Tuesday, May 7, 2024
Meeting Agenda
Closed Session - 5:45 pm
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HOUSING AUTHORITY
COMMUNITY DEVELOPMENT COMMISSION
WATER DISTRICT
HESPERIA FIRE PROTECTION DISTRICT - SPECIAL MEETING
City Council Chambers
9700 Seventh Ave., Hesperia CA, 92345
City Clerk's Office: (760) 947-1007
City Council Members
Larry Bird, Mayor
Rebekah Swanson, Mayor Pro Tem
Brigit Bennington, Council Member
Cameron Gregg, Council Member
Allison Lee, Council Member
Rachel Molina, City Manager
Pam K. Lee, City Attorney
Amended Agenda
NOTE: In compliance with the Americans with Disability Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office at (760) 947-1007 or (760) 947-1026. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility.
To leave a Public Comment by phone, call and leave a recorded message at (760) 947-1056 up to 5:30 pm on the day of the scheduled meeting. City Council meetings may be viewed live or after the event on the City’s website at www.cityofhesperia.us.
NOTICE AND CALL OF SPECIAL MEETING
HESPERIA FIRE PROTECTION DISTRICT
NOTICE IS HEREBY GIVEN that a special meeting of Hesperia Fire Protection District will be held on Tuesday, May 7, 2024, at 6:30 p.m. in the City Council Cham ers, at 9700 Seventh Avenue, Hesperia, CA 92345.
�
Lary Bird, Mayor
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May 7, 2024City Council Meeting Agenda
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
HESPERIA FIRE PROTECTION DISTRICT - SPECIAL MEETING
9700 7th Avenue, Council Chambers, Hesperia, CA 92345
As a courtesy, please silence your cell phones and other electronic devices while the meeting is in session. Thank you.
Prior to action of the Council, any member of the audience will have the opportunity to address the legislative body on any item listed on the agenda, including those on the Consent Calendar.
Individuals wishing to speak during General Public Comments or on a particular numbered item must submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
CLOSED SESSION - 5:45 PM
Roll Call
Mayor Larry Bird
Mayor Pro Tem Rebekah Swanson
Council Member Brigit Bennington
Council Member Cameron Gregg
Council Member Allison Lee
Conference with Labor Negotiator
Government Code Section 54957.6
1. Negotiations between the City of Hesperia and the Teamsters Local 1932 with the City's Negotiator. (Staff person: Rachel Molina, City Manager) CALL TO ORDER - 6:30 PM
A. Invocation
B. Pledge of Allegiance to the Flag
C. Roll Call
Mayor Larry Bird
Mayor Pro Tem Rebekah Swanson
May 7, 2024City Council Meeting Agenda
Council Member Brigit Bennington
Council Member Cameron Gregg
Council Member Allison Lee
D.
Agenda Revisions and Announcements by City Clerk
E. Closed Session Reports by City Attorney
ANNOUNCEMENTS/PRESENTATIONS
Presentation by Art Bishop regarding the opposition by League of California Cities to the Taxpayer Protection and Government Accountability Act.
GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda) Individuals wishing to speak during General Public Comments or on a particular numbered item are requested to submit a speaker slip to the City Clerk with the agenda item noted. Speaker slips should be turned in prior to the public comment portion of the joint agenda or before an agenda item is discussed. Comments will be limited to three minutes for General Public Comments, Consent Calendar items and New Business items. Comments are limited to five minutes for Public Hearing items.
In compliance with the Brown Act, the City Council may not discuss or take action on non-agenda items or engage in question and answer sessions with the public. The City Council may ask brief questions for clarification; provide a reference to staff or other resources for factual information and direct staff to add an item to a subsequent meeting.
JOINT CONSENT CALENDAR
1. Consideration of the Draft Minutes from the Regular Meeting held Tuesday, April 16, 2024.
Recommended Action:
It is
recommended that the City Council approve the Draft Minutes from the Regular Meeting held Tuesday, April 16, 2024.
Staff Person: Assistant City Clerk Erin Baum
Draft CC Min 2024-4-16Attachments:
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Commission - Water)
Recommended Action:
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
Staff Person: Assistant City Manager Casey Brooksher
May 7, 2024City Council Meeting Agenda
SR Warrant Run 5-7-2024
Attachment 1- Warrant Run
Attachments:
3. Risk Financing Options Study Contract Amendment
Recommended Action:
It
is recommended that the City Council authorize the City Manager to approve an amendment of $22,500 to the existing contract with Albert Risk Management Consultants (Albert Risk), for a revised not-to-exceed contract amount of $62,000 and approve a one-year contract extension for Phase Two of the JPA evaluation process.
Staff Person: Assistant City Manager Casey Brooksher
SR Risk Financing Options Study Contract Amendment 5-7-2024 Attachment 1 - City of Hesperia Risk Financing Study Final Report Attachments:
4. Pacific Products & Services, LLC Contract Amendment
Recommended Action:
It
is recommended that the City Council authorize the City Manager to amend the existing agreement with Pacific Products & Services, LLC in the amount of $130,000 for a total not-to-exceed amount of $380,000, and approve a one-year contract extension for the purchase of traffic signs and sign materials.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Pacific Products & Services, LLC Contract Amendment 5-7-2024Attachments:
5. G & M Automotive Center, Inc. Contract Amendment
Recommended Action:
It
is recommended that the City Council and Board of Directors of the Hesperia Water District authorize the City Manager to approve a one-year contract extension for vehicle maintenance and repairs with G & M Automotive Center and increase the contract in the amount of $300,000 for a new not-to-exceed amount of $875,000 for vehicle maintenance and repairs.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR G & M Automotive Center, Inc. Contract Amendment 5-7-2024Attachments:
6. Vehicle Procurement - One Heavy-Duty Truck
Recommended Action:
It
is recommended that the City Council authorize the City Manager to approve the procurement of one (1) 2024 Chevy Silverado 2500HD 4 X 4 utility truck for the Streets Maintenance Program and enter into an agreement with Victorville Chevrolet for the not-to-exceed amount of $73,000.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Vehicle Procurement - One Heavy-Duty Truck 5-7-2024
Attachment 1- Bid Comparison
Attachments:
May 7, 2024City Council Meeting Agenda
7. GP Electric Motor Contract Amendment
Recommended Action:
It
is recommended that the City Council and Board Members of the Hesperia Water District (District) authorize the City Manager to approve an amendment of $30,000 to the existing contract with GP Electric Motor, for a total revised not-to-exceed amount of $190,000 for well motor maintenance.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR GP Electric Motor Contract Amendment 5-7-2024Attachments:
8. Contract Amendment for Street Sweeping Services
Recommended Action:
It
is recommended that the City Council authorize the City Manager to approve an amendment of $357,585 to the existing contract with Guardian Street Sweeping for a revised not-to-exceed amount of $1,072,755 for street sweeping services and to approve a one-year contract extension for street sweeping.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Contract Amendment for Street Sweeping Services 5-7-2024Attachments:
9. Contract Amendment for Unarmed Security Services with Alltech Industries Recommended Action:
It
is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager to approve an amendment to the existing contract with Alltech Industries, Inc. for an additional $164,400 for a revised not-to-exceed contract amount of $414,964 and approve a one-year contract extension for unarmed security services.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Contract Amendment with Alltech Industries 5-7-2024Attachments:
10. Final Tract Map No. 20648-1
Recommended Action:
It
is recommended that the City Council adopt Resolution No. 2024-14 approving Final Map No. 20648-1 to create 20 residential lots and 1 homeowners association (HOA) community lot with a remainder parcel on approximately 15.61 gross acres and accept right-of-way necessary to develop Tract 18989-1 Lot 26, Planning Area 17 of the Tapestry Specific Plan (Applicant:
Silverwood Development Phase I, LLC).
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Final Tract Map 20648-1 5-7-2024
Resolution 2024-14
Attachment 2 - Final Tract Map 20648-1
Attachments:
11. Contract Amendment for Apple Valley Communications after hours phone
May 7, 2024City Council Meeting Agenda
service
Recommended Action:
It
is recommended that the City Council authorize the City Manager to approve an amendment to the existing contract with Apple Valley Communications for an additional $50,000 for a revised not-to-exceed contract amount of $100,000 and approve a one-year contract extension for after hour telephone answering services.
Staff Person: Director of Public Works/City Engineer Cassandra Sanchez SR Apple Valley Communications 5-7-2024Attachments:
12. Adoption of Mission Statement and Goals
Recommended Action:
It
is recommended that the City Council formally adopt the City Mission Statement, Values, and Goals as revised.
Staff Person: Deputy City Manager/City Clerk Melinda Sayre SR Adoption of Mission Statement and Goals 5-7-2024Attachments:
13. Award Professional Services Agreements for On-Call Landscape and Irrigation Plan Check Services
Recommended Action:
It is recommended that the City Council approve the award of two (2) Professional Services Agreements (PSAs) to Architerra Design Group and Community Works Design Group each in the not to exceed amount of $150,000 for on call landscape and irrigation plan check services for a term of three (3) years.
Staff Person: Principal Planner Ryan Leonard
SR On-Call Landscape and Irrigation Plan 5-7-2024Attachments:
CONSENT ORDINANCES
WAIVE READING OF ORDINANCES
Approve the reading by title of all ordinances and declare that said titles which appear on the public agenda shall be determined to have been read by title and further reading waived.
14. CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs:
3064-401-03, -04 & -05
Recommended Action:
Place on second reading and adopt by title waiving the text of Ordinance No. 2024-05 approving SPLA24-00002, adopt Resolution No. 2024-12 approving CUP22-00017, and adopt Resolution No. 2024-11, recommending that the City Council make the environmental determination pursuant to the California Environmental Quality Act (CEQA) by certifying the Final Environmental Impact
May 7, 2024City Council Meeting Agenda
Report (FEIR) and adopting a statement of overriding considerations.
Staff Person: Principal Planner Ryan Leonard
SR Kiss Logistics Center 5-7-2024
Attachment 1 - Overall Site Plan
Attachment 2 - General Plan and Zoning Map
Attachment 3 - Aerial
Attachment 4 - Color Elevation
Attachment 5 - View Rendering
Resolution 2024-11
Ordinance 2024-05
Resolution 2024-12
Attachments:
15. Amendment to Title 16 [Development Code] , Chapter 20 [ General Regulations], Article V [ General Performance Standards] by adding a new Section 16.20.161 related to completion and maintenance of public improvements prior to issuance of building permits and certificates of occupancy Recommended Action:
Place on second reading and adopt by title waiving the text of Ordinance No. 2024-06 adding a new Section 16.20.161 to Title 16 [Development Code], Chapter 20 [General Regulations], Article V [General Performance Standards] of the Hesperia Municipal Code regarding the completion and maintenance of public improvements prior to issuance of a building permit and certificate of occupancy.
Staff Person: City Attorney Pam K. Lee
SR Amendment to Title 16 5-7-2024
Ordinance 2024-06
Attachments:
NEW BUSINESS
16. City of Hesperia Community Assistance Program (CAP) - Grant Awards Recommended Action:
It is
recommended that the City Council, after reviewing the City Council Advisory Committee (CCAC) CAP applicant rankings, Exhibit “A,” adopt Resolution No. 2024-10 approving the Program Year (PY) 2024-25 CAP funding for each applicant.
Staff Person: Administrative Analyst April Antonio
SR Community Assistance Program (CAP)- Grant Awards 5-7-2024 Resolution 2024-10
Attachment 2 - Application Notebooks
Attachment 3 - Exhibit "A" - CCAC Ranking Recommendations Attachments:
*Agenda was amended to reflect Green Sheet changes from 4/16/24 City Council Meeting
May 7, 2024City Council Meeting Agenda
17. FY 2024-25 Budget Workshop #1 - Operating Budget
Recommended Action:
It
is recommended that the City Council/Board receive and file this staff report, which provides information about the current status of the City of Hesperia’s proposed operating budget for Fiscal Year (FY) 2024-25.
Staff Person: Assistant City Manager Casey Brooksher
SR FY 2024-25 Budget Workshop #1 - Operating Budget 5-7-2024Attachments:
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Council may report on their activities as appointed representatives of the City on various Boards and Committees and/or may make comments of general interest or report on their activities as a representative of the City.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
The City Manager, City Attorney or staff may make announcements or reports concerning items of interest to the Council and the public.
ADJOURNMENT
I, Erin Baum, Assistant City Clerk of the City of Hesperia, California do hereby certify that I caused to be posted the foregoing agenda on Wednesday, May 1, 2024 at 5:30 p.m. pursuant to California Government Code §54954.2. _____________________________
Erin Baum,
Assistant City Clerk
Documents produced by the City and distributed less than 72 hours prior to the meeting regarding items on the agenda will be made available in the City Clerk's Office during normal business hours.
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City of Hesperia
City of Hesperia
Meeting Minutes - Draft
City Council
Tuesday, April 16, 2024 6:30 PM
REGULAR MEETING AGENDA
HESPERIA CITY COUNCIL
SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY
HESPERIA HOUSING AUTHORITY
HESPERIA COMMUNITY DEVELOPMENT COMMISSION
HESPERIA WATER DISTRICT
CLOSED SESSION - 5:00 PM
Roll Call
Present: 4 - Mayor Bird, Mayor Pro Tem Swanson, Council Member Gregg, and Council Member Bennington
A
bsent: 1 - Council Member Lee
Conference with Legal Cou
nsel - Potential Litigation: Government Code Section 54956.9(d)2
1. One (1) Case
Conference with Real Property Negotiators – Property Negotiations Government Code Section – 54956.8
1. Negotiating Parties: City of Hesperia and Gustavo Valdez and Fernando Valdes Location: APN: 3064-461-03
Under Negotiation: Price and Terms
Conference with Labor Negotiator Government Code Section 54957.6
1. Negotiations between the City of Hesperia and the Teamsters Local 1932 with the City's Negotiator. (Staff person: Rachel Molina, City Manager)
CALL TO ORDER - 6:30 PM
A. Invocation
B. Pledge of Allegiance to the Flag
C. Roll Call
City Council Chambers
9700 Seventh Ave.
Hesperia CA, 92345
City of Hesperia
Present: 4 - Mayor Bird, Mayor Pro Tem Swanson, Council Member Gregg, and Council Member Bennington
Abs
ent: 1 - Council Member Lee
D. Agenda Revisions and Announcements by City Clerk
There was a green sheet rev
ision to agenda item number 10.
E. Closed Session Reports by City Attorney
ANNOUNCEMENTS/PRESENTATIONS
1. Presentation of Certificates of Recognition to Hesperia High School and Oak Hills High School for being recognized as C
alifornia Distinguished Schools.
2. Presentatio
n of Proclamation to The San Bernardino County Children’s Network declaring April as Child Abuse Prevention Mo
nth.
3. Presentatio
n by Director of Development Services Nathan Freeman with an Economic Development Update.
GENERAL PUBLIC COMMENTS (For items and matters not listed on the agenda) The following members of the public commented:
Patti Oxenham
Greg Allen with Covington
Cresenciana Rios
JOINT CONSENT CALENDAR
A motion was made by Bennington, seconded by Gregg, that the Joint Consent Calendar be approved. The motion carried by the following vote:
Aye: 4 - Bird, Swanson, Gregg, and Bennington
Nay: 0
Absent: 1 - Lee
1. Consideration of the Draft Minutes from the Special Meeting held Tuesday, April 2, 2024.
Recommended Action:
It is recomm
ended that the City Council approve the Draft Minutes from the Special Meeting held
Tuesday, April 2, 2024.
Sponsors: Assistant City Clerk Erin Baum
2. Warrant Run Report (City - Successor Agency - Housing Authority - Community Development Commission -
Water)
Recommended Action:
City of Hesperia
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
Sponsors: Assistant City Manager Casey Brooksher
3. Treasurer’s Cash Report for the unaudited period ended February 29, 2024.
Recommended Action:
It is recommended that the Council/Board accept the Treasurer’s Cash Report for the City, Succes sor
Agency to the Hesperia Communit
y Redevelopment Agency, Hesperia Housing Authority, Comm unity Developm
ent Commission, and Water District.
Sponsors: Assistant City Manager Casey Brooksher
4. Revised Combined Compensation Schedules
Recommended Action:
It is recommended that the City Council and Board of Directors of the Hesperia Housing Authority (HHA) and Hesperia Water District (HWD) adopt
Joint Resolution No. 2024-01, HHA 2024-01, HWD 2024-01
approving the C
ity’s Fiscal Year (FY) 2023-24 Revised Combined Compensation Schedule.
Sponsors: Assistant City Manager Casey Brooksher
5. TLC Animal Removal Services Contract Amendment
Recommended Action:
It is recommended that the City Council approve an amendment to the existing contract with TLC Animal Removal Services in the am
ount of $36,000, for a total not-to-exceed revised amount of $141,000 and to approve a one-year contract extension for animal disposal services.
Sponsors: Acting Code C
ompliance Manager Caleb Enriquez
6. 2021 Edward Byrne Justice Assistance Grant (JAG)
Recommended Action:
It is recommended that the City Council accept the 2021 Edward Byrne Justice Assistance Grant (JAG) award and adopt Resolution No. 2024-13,
amending the Fiscal Year 2023-24 Budget by appr opriating $29,697 for gra
nt-related expenditures.
Sponsors: Hesperia Police Department Captain Jeremy Dean
7. Amended Agreement for the Joint Exercise of Powers Relative to the San Bernardino Associated Governments, SANBAG JP
A Amendment #4
Recommended Action:
It is recommended that the City Council approve Amendment No. 4 to the Joint Exercise of Powers Agreement Relative to the San Bernardino
Associated Governments (SANBAG), now referred to as the San Bernardino
Council of Governments (SBCOG), to increase membership dues by $28,847, for a total of $47,249.
Sponsors: Assistant to the C
ity Manager Tammy Pelayes
City of Hesperia
PUBLIC HEARING
8. CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 Recommended Action:
The Planning Commission recommends that the City Council adopt Resolution No. 20 24-11, recommending that the City Council mak
e the environmental determination pursuant to the Ca lifornia Environm
ental Quality Act (CEQA) by certifying the Final Environmental Impact Report (FEIR) and adopting a statem
ent of overriding considerations and introduce and place on first reading Or dinance No. 2024-05 appro
ving SPLA24-00002 and adopting Resolution No. 2024-12 approving CUP22-00017.
Sponsors: Principal Planner Ryan Leonard
The following members of the public commented during Public Hearing Jonathan Daily
Wanyae McDonald
Zach Straster
Andrew Roldan
Efrain Lopez
Cordero Rios
Robert Ramos
Phillip Huerta
Aidan Marshall
Jason Ellis
Josh Lety, a representative for the applicant, gave a short presentation on the project. :
A motion was made by Gregg, seconded by Bennington, that this item be approved. The motion carried by the following vote:
Aye: 4 -
Bird, Swanson, Gregg, and Bennington
Nay: 0
Absent: 1 - Lee
9. AB1684 Impact on Commercial Cannabis Enforcement
Recommended Action:
It is recommended that the City Council introduce and place on first reading Ordinance No. 2024-04 amending Title 1 - Genera
l Enforcement Procedures, Title 8 - Public Nuisances, and Title 16 - Land Uses, of the Hesp
eria Municipal Code related to illegal commercial cannabis activities. Adopt Resolutio n No. 2024-09 am
ending the City-Wide bail schedule related to administrative enforcement of cannabis activities.
Sponsors: Management Analyst Jacquelyn Castillo
Council Member Gregg requested information regarding the City’s illegal Cannabis enforcement statistics.
City of Hesperia
A motion was made by Gregg, seconded by Bird, that this item be continued. The motion carried by the following vote:
Aye: 4 - Bird, Swanson, Gregg, and Bennington
Nay: 0
Absent: 1 - Lee
10. Amendment to Title 16 [Development Code], Chapter 20 [General Regulations], Art icle V [General Performance Standards] by adding a new
Section 16.20.161 related to completion and maintenance of public
improvements prior to issuance of building permits and certificates of occupancy Recommended Action:
It is recommended that the City Council introduce and place on first reading Ordinance No. 2024-06 adding a new Section 16.20.161 to Title 16
[Development Code], Chapter 20 [General Regulations],
Article V [Gener
al Performance Standards] of the Hesperia Municipal Code regarding the completion and m
aintenance of public improvements prior to issuance of a building permit and certificate of occupancy.
Sponsors: City Attorney Pam K. Lee
A motion was made by Swanson, seconded by Bennington, that this item be approved. T he motion carried b
y the following vote:
Aye: 4 - Bird, Swanson, Gregg, and Bennington
Nay: 0
Absent: 1 - Lee
NEW BUSINESS
11. Approval of a Letter of Intent by and between the City of Hesperia and Fenner Gap Mutual W ater Company
Recommend
ed Action:
It is recommended that the City Council authorize the City Manager to approve a Letter of Intent (LOI) b y and between the City of Hesperia and
Fenner Gap Mutual Water Company.
Sponsors: Director of Public Works/City Engineer Cassandra Sanchez Al Vogler commented on this item.
A motion was made by Gregg, seconded by Swanson, that this item be approved. The motion carried by the following vote:
Aye: 4 -
Bird, Swanson, Gregg, and Bennington
Nay: 0
Absent: 1 - Lee
City of Hesperia
COUNCIL COMMITTEE REPORTS AND COMMENTS
The Mayor, Mayor Pro Tem, and Council Members reported from various events and Committees.
Council Member Gregg requested a Resolution be brought forward in support of Israel.
Mayor Pro Tem Swanson and Council Member Gregg requested information on zoning for llamas within the City.
CITY MANAGER/CITY ATTORNEY/STAFF REPORTS
The City Manager thanked City staff.
ADJOURNMENT
The meeting was adjourned in honor of Wesley Bird’s 26th birthday at 9:16 p.m. _____________________________
Erin Baum,
Assistant City Clerk
City of Hesperia
STAFF REPORT
DATE: May 07, 2024
TO: Mayor and Council Members
City Council, as Successor Agency to the Hesperia Community Redevelopment Agency
Chair and Commissioners, Hesperia Housing Authority
Chair and Commissioners, Community Development Commission Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Anne Duke, Deputy Finance Director
Shirley Domacio Calderon, Accountant
SUBJECT: Warrant Run Report (City – Successor Agency – Housing Authority – Community Development Commission – Water)
RECOMMENDED ACTION
It is recommended that the Council/Board ratify the warrant run and payroll report for the City, Successor Agency to the Hesperia Community Redevelopment Agency, Hesperia Housing Authority, Community Development Commission, and Water District.
BACKGROUND
The Warrant Run totals represented below are for th e period March 16, 2024 through March 29, 2024.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health
ATTACHMENT(S)
1. Warrant Runs
Agency/District Accounts Payable Payroll Wires Totals
City of Hesperia $2,709,804.17 $303,160.12 $0.00 $3,012,964.29 Successor Agency 0.00 0.00 0.00 0.00
Housing Authority 0.00 190.52 0.00 190.52
Community Development Commission 0.00 0.00 0.00 0.00
Water 145,602.73 138,721.20 0.00 284,323.93
Totals $2,855,406.90 $442,071.84 $0.00 $3,297,478.74
* Includes debt service payments made via Automated Clearing House (ACH) electronic deposit of funds.
YEAR-TO PRIOR FY YTD
W/E W/E WARRANT DATE DATE
FUND # FUND NAME 3/22/2024 3/29/2024 TOTALS Wires TOTALS * TOTALS Accounts Payable
100 GENERAL 1,973,086.32 $ 132,945.03 $
2,106,031.35$ -$
26,953,514.08$ 22,779,328.05$
204 MEASURE I - RENEWAL -$
-$
-$
-$
509,371.09$ 251,376.72$
207 LOCAL TRANSPORT-SB 325 -$
-$
-$
-$
967,882.81$ 286,759.13$
209 GAS TAX-RMRA -$
-$
-$
-$
-$
805.00$
210 HFPD (PERS) -$
-$
-$
-$
907,316.00$ 1,093,204.87$
251 CDBG -$
-$
-$
-$
340,836.91$ 775,028.71$
254 AB2766 - TRANSIT -$
-$
-$
-$
-$
-$
255 AB3229 SUPPLEMENTAL LAW -$
-$
-$
-$
-$
-$
256 ENVIRONMENTAL PROGRAMS GRANT 1.50$
-$
1.50$
-$
21,631.25$
22,821.81$
262 SB 1383 LOCAL ASSISTANCE GRANT -$
-$
-$
-$
-$
31,598.69$
263 STREETS MAINTENANCE 68,349.89$
16,351.65$
84,701.54$
-$
1,643,507.80$ 1,446,131.06$
300 DEV. IMPACT FEES - STREET -$
-$
-$
-$
82,056.38$
34,221.18$
301 DEV. IMPACT FEES - STORM DRAIN -$
-$
-$
-$
-$
17,460.50$
303 DEV. IMPACT FEES - POLICE -$
-$
-$
-$
-$
-$
304 DEV. IMPACT FEES - PUBLIC WKS. -$
-$
-$
-$
-$
-$
306 DEV. IMPACT FEES - 2018-STREETS -$
-$
-$
-$
1,640,006.95$ 4,860,914.81$
312 DIF 2018-POLICE FACILITIES -$
-$
-$
-$
-$
7,969.11$
313 DIF A-04 DRAINAGE -$
-$
-$
-$
320,448.35$ 6,270.00$
402 WATER RIGHTS ACQUISITION -$
272,913.90$
272,913.90$
-$
1,493,015.59$ 1,432,351.95$
403 2013 REFUNDING LEASE REV BONDS -$
-$
-$
-$
571,151.39$ 872,392.46$
504 CITY WIDE STREETS - CIP -$
-$
-$
-$
10,218,149.68$ 7,611,254.07$
509 CITY FACILITIES CIP -$
-$
-$
-$
-$
-$
800 EMPLOYEE BENEFITS 204,223.00$
37,984.47$
242,207.47$
-$
6,582,102.92$ 6,642,739.55$
801 TRUST/AGENCY 122.50$
3,825.91$
3,948.41$
-$
1,639,525.85$ 1,605,854.21$
802 AD 91-1 AGENCY -$
-$
-$
-$
-$
-$
804 TRUST-INTEREST BEARING -$
-$
-$
-$
267,035.60$ 152,725.00$
807 CFD 2005-1 -$
-$
-$
-$
1,266,529.66$ 1,295,901.27$
808 HFPD (TRANSITION) -$ -$ -$ -$ 347,796.19$ 317,384.59$ 815 PLAN REVIEW TRUST - FRONTIER -$
-$
-$
-$
-$
6,584.08$
CITY 2,245,783.21$ 464,020.96 $ 2,709,804.17$ - $ 55,771,878.50$ 51,551,076.82$ 163 REDEVELOP OBLIG RETIREMENT-2018 -$
-$
-$
-$
9,949,902.79$ 9,708,465.48$
SUCCESSOR AGENCY -$ -$ -$ - $ 9,949,902.79$ 9,708,465.48$ 370 HOUSING AUTHORITY -$
-$
-$
-$
35,950.25$
36,133.56$
HOUSING AUTHORITY -$ -$ -$ - $ 35,950.25$ 36,133.56$ 170 COMMUNITY DEVELOPMENT COMMISSION -$
-$
-$
-$
-$
-$
COMMUNITY DEVELOPMENT COMMISSION -$ -$ -$ - $ -$ -$ 700 WATER OPERATING 98,458.61$
39,478.02$
137,936.63$
-$
7,984,885.26$ 6,217,365.81$
701 WATER CAPITAL -$
-$
-$
-$
320,389.00$ 37,598.00$
710 SEWER OPERATING 5,455.43$
1,633.47$
7,088.90$
-$
4,625,202.30$ 3,729,283.90$
711 SEWER CAPITAL -$
-$
-$
-$
1,249,376.35$ 261,282.26$
720 RECLAIMED WATER OPERATIONS 577.20$
-$
577.20$
-$
272,949.04$ 258,924.17$
WATER 104,491.24$ 41,111.49$ 145,602.73$ - $ 14,452,801.95$ 10,504,454.14$ ACCOUNTS PAYABLE TOTAL 2,350,274.45$ 505,132.45$ 2,855,406.90$ -$
80,210,533.49$ 71,800,130.00$
REG. PAYROLL
City -$
303,160.12$
303,160.12$
-$
6,048,514.79$ 5,535,606.28$
Housing Authority -$
190.52$
190.52$
-$
3,874.97$
3,640.54$
Water -$
138,721.20$
138,721.20$
-$
2,581,999.93$ 2,258,097.83$
PAYROLL TOTAL -$
442,071.84$
442,071.84$
-$
8,634,389.69$ 7,797,344.65$
*No payments were issued on July 1, 2023.
City of Hesperia
WARRANT RUNS
03/16/2024-03/29/2024
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Casey Brooksher, Assistant City Manager
Amanda Rose, Human Resources Specialist
SUBJECT: Risk Financing Study Contract Amendment
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to approve an amendment of $22,500 to the existing contract with Albert Risk Management Consultants (Albert Risk), for a revised not-to-exceed contract amount of $62,000 and approve a one -year contract extension for Phase Two of the evaluation process.
BACKGROUND
Due to increasing premiums , and lack of administrative support, i n July 2023 , the City entered into an agreement with Albert Risk to explore risk pool (insurance) alternatives for its property, liability and workers compensation risks including ancillary coverages such as cyber, crime, and others . The following table shows the increase of premiums:
Coverage FY 2021-22 FY 2022-23 FY 2023-24 FY 2024-25
General Liability $ 758,108 $ 887,440 $ 1,216,600 $ 2,192,700 Property $ 221,220 $ 366,717 $ 504,588 $ 639,500 Workers Compensation $ 681,880 $ 836,487 $ 848,300 $ 938,812 Crime $ 1,921 $ 1,942 $ 1,984 $ 2,840 Cyber $ 13,241 $ 22,787 $ 37,571 $ 73,020 Employment Practices $ 59,077 $ 35,877 $ 50,697 $ 86,500 Auto Physical Damage $ 29,289 $ 11,399 $ 12,427 $ 16,000 Deadly Weapon $ 687 $ 905 $ 920 $ 970 Total: $ 1,765,423 $ 2,163,554 $ 2,673,087 $ 3,950,342
The goal of this study was to analyze the City’s current risk pool, Public Entity Risk Management Authority (PERMA), and assess its ability to meet the City’s insurance, risk management, and administrative needs.
In addition, the consultant would analyze other carriers to allow the City to determine the best potential fit for the insurance needs. Albert Risk provided a report to the City on April 29, 2024, which determined that California Joint Powers Insurance Authority (CJPIA), Public Risk Innovation Solutions Management (PRISM), and California Intergovernmental Risk Authority (CIRA) may provide a better service to the City.
The following table details the statistics of the top ranked firms:
Basic JPA Elements CJPIA PRISM CIRA PERMA
Number of Members 117 354 53 31
Number of Cities (#) 92 136 44 21
Number of Cities (%) 79% 38% 83% 68%
City Population (Average) 32,928 103,647 22,000 59,363
Founded 1977 1979 2021* 1985
*Originally formed in 1986 as CA Municipal Insurance Authority
ISSUES/ANALYSIS
The report dated April 29, 2024 is considered Phase One of this process. As mentioned, Phase One determined if there are other potential pr oviders that could offer improvements/enhancements to services currently offered by PERMA. During Phase One, cost is not considered as a review component; similar to the process of the profession ser vice agreement (PSA). It is during Phase Two, that the top ranked firms are invited to submit insurance premium estimates which will be compared to the City’s current prov ider PERMA. It is during this phase that the City will have to provide key financial data, such as its annual comprehensive financial report (ACFR), budgets, and listing of all assets to be insured. Albert Risk will assist staff through this process to ensure that the City will ascertain the best financial quote for insurance services.
Additionally, Albert Risk will assist with the negotiation of rates, should the City determine to transition from PERMA.
CITY GOAL SUPPORTED BY THIS ITEM
Financial Health – Maintain a balanced budget and adequate reserves.
Organizational Health – Foster a high performing organization that provides opportunities for professional growth.
FISCAL IMPACT
Sufficient funding for Phase Two of this review will be included in the Division’s programs in the proposed Fiscal Year 2024-2025 Budget.
ALTERNATIVE(S)
1. Provide staff other alternative(s)
ATTACHMENTS
1. City of Hesperia Risk Financing Options for Property, Liability, and Worker’s Compensation
May 1, 2024
Casey Brooksher
Director of Administrative Services
City of Hesperia
RE: Risk Financing Options for Property, Liability, and Workers’ Compensation Dear Casey,
We are pleased to present our Risk Financing Options Study final report pursuant to our engagement with the City of Hesperia (City).
Please let me know if you and your team would like to further discuss the report’s findings, conclusions, and recommendations.
We have enjoyed working with you and the City.
Sincerely,
Catherine Wells, MBA, CPCU, ARM, CRIS Elizabeth Schmitt Principal Consultant Staff Consultant
11230 GOLD EXPRESS DRIVE, #310-220, GOLD RIVER, CA 95670-4484 916.842.5200 WWW.ALBERTRISK.COM Attachment 1
CITY OF HESPERIA
Risk Financing Options for Property, Liability,
and Workers’ Compensation
April 29, 2024
3 Table of Contents
I. Executive Summary ............................................................................................................................... 4 A. Purpose and Structure of This Report ....................................................................................... 4 B. Findings ..................................................................................................................................... 4 C. Conclusions ............................................................................................................................... 5 D. Recommendations .................................................................................................................... 6 II. Background, Interviews, Goals and Objectives, and Risk Profile ........................................................... 7 A. Background ............................................................................................................................... 7 B. Interviews ................................................................................................................................. 7 C. City Goals and Objectives .......................................................................................................... 8 D. City's Risk Profile ....................................................................................................................... 8 III. Overview of the JPA and Insurance Marketplace ................................................................................ 10 A. JPA Governing Code ................................................................................................................ 10 B. JPAs for Cities .......................................................................................................................... 10 C. Recommended JPAs by Geography and Fit .............................................................................. 11 D. Short List JPAs - Basic Elements ............................................................................................... 12 E. Traditional Insurance ............................................................................................................... 13 IV. Financial Analysis................................................................................................................................. 15 A. JPA Financial Strength ............................................................................................................. 15 B. Rate Accepting Risk ................................................................................................................. 16 C. Ability to Withstand Adverse Loss Development ..................................................................... 16 D. Adequate Funding for Current Claims ..................................................................................... 17 E. Conclusions from Financial Analysis ........................................................................................ 18 V. Coverage Comparisons........................................................................................................................ 19 A. Liability Program Structures .................................................................................................... 20 B. Employment Practices Liability Program Structures ................................................................ 21 C. Property Coverage Structures .................................................................................................. 22 D. Workers’ Compensation Structures ......................................................................................... 23 E. Ancillary Insurance Program Structures................................................................................... 24 VI. Services, Support, and Claims ............................................................................................................. 25 A. Support & Services ................................................................................................................. 26 B. Claim Services ......................................................................................................................... 28 C. Summary of Support, Services and Claims Services ................................................................. 29 VII. Conditions and Requirements of Participation ................................................................................... 30 A. Prospective JPA Participation .................................................................................................. 30 B. PERMA Withdrawal ................................................................................................................ 31 C. A Word About Changing JPAs ................................................................................................. 34 VIII. Road Map for Moving Forward .............................................................................................. 35 A. Plan of Action .......................................................................................................................... 35 B. Implementation Timeline........................................................................................................ 37
Appendix A Persons Interviewed ....................................................................................................... 39 Appendix B City of Hesperia Risk Profile ........................................................................................... 41 Appendix C JPA Member Lists .......................................................................................................... 44 Appendix D JPA Coverage Comparisons ............................................................................................ 58
4 I. Executive Summary
The City of Hesperia (City) has participated in the Public Entity Risk Management Authority (PERMA) risk sharing pool since 2010 . PERMA currently has 31 members of which 21 are cities and the balance are transit districts, JPAs, and other local authorities mostly located within the vicinity of the City. The City obtains its liability , property, and workers’ compensation coverages through PERMA. The City ’s retention per workers’ compensation claim is $250,000 and retains deductible obligations of $50,000 for general liability and $10,000 for property insurance.
A. Purpose and Structure of This Report
Albert Risk Management Consultants (ARMC) has been retained by the City to evaluate risk financing alternatives to PERMA, including other JPAs and commercial insurance programs. Our engagement involves reviewing prospective JPA program structures and insurance coverages, risk management services including training and education and risk control services and other key aspects of how each JPA operates . A cost evaluation of risk financing comparisons was not conducted in this Phase 1 study. Rather, this study focuses on overall “fit” between JPA options and renders an opinion of the best risk financing options for the City. If requested by the City, ARMC’s Phase 2 study will explore the financial aspect of alternative JPAs including self-insured retention and deductible options.
Our analysis includes an overview and summary of our interviews with City stakeholders, broad assessments of the marketplace and JPA alternatives, JPA financial strength, services offered, and approach to claims management. This executive summary provides our findings, conclusions, and recommendations from the analysis we conducted. From this final evaluation, the City should have a roadmap to determine whether to engage into Phase 2 to solicit firm quotations from alternate JPAs. Changing JPAs does not relieve the City of any potential special assessments and claim obligations until all coverage years are closed out for years the City participated in PERMA.
B. Findings
• During the course of this study, six (6) goals and objectives were expressed by City staff during the interviews:
1. Conduct basic due diligence of the City’s existing insurance JPA “fit” while exploring alternative risk financing options for property, liability, and workers’ compensation risks;
2. Explore risk pool options that offer a strong similar risk profile as the City, especially an option that includes members in neighboring cities with similar emerging risks;
3. Explore options that would reduce the insurance program administrative burden;
4. Explore options that would improve claims service and ensure accountability while offering an option for the City to retain some control of the claim process;
5. Explore options that offer proactive loss control services to the City, and;
6. Explore options that provide robust training and education opportunities for City staff.
5 • In addition to the City’s current participation in PERMA, 16 alternative JPAs were also analyzed for potential "fit." Many were eliminated due to geographic location while others were too small or didn’t share the same risk profile as the City. Each of these prospective JPAs were compared against the current JPA, PERMA , using various metrics and paired with the City-stated goals and objectives.
From this exercise, three prospective JPAs were identified considering the objectives stated above:
o California Joint Powers Insurance Authority (CJPIA);
o Public Risk Innovation Solutions and Management (PRISM); and o California Intergovernmental Risk Authority (CIRA)
C. Conclusions
Our analysis in performing this study has led to eight (8) conclusions:
1. The short list of risk pools reviewed did not all meet all the City-stated goals and objectives. The following table outlines each goal and objective and whether each risk pool would meet each of the City-stated stated goals including the incumbent, PERMA.
Stated Goal PERMA PRISM CJPIA CIRA
Conduct due
diligence of “fit” and
identify JPA
alternatives for
insurance program
Incumbent;
this potentially
no longer
remains “a fit”
for the City
Potential Yes Yes
Similar risk profile in
neighboring cities
with similar emerging
risks
Yes No
Yes, including
many other
southern
California cities
No, includes
both
northern and
southern
California
cities
Reduce the insurance
administrative
burden
No Potential Potential Potential
Claims accountability
while offering some
City claim control
No Yes Yes Yes
Proactive loss control
services No Potential Yes Yes
Robust training and
education to City
staff
No Potential Yes Yes
2. The best “fit” from our analysis points to CJPIA as this risk pool currently meets most all of the City-stated objectives. Interviews with City staff indicated the need for more robust and proactive risk control services, training and education, and more accountability with claims management for all lines of insurance. With this said, CIRA remains a strong second candidate and should be further vetted should the City engage in Phase 2 of this due diligence.
6 3. PRISM is a partial “fit” for the City as it offers liability, property, and workers’ compensation programs, allows the member to retain control of their claims, and has a robust menu of training and education programs. At this stage of the analysis, it is not a perfect “fit” for the City in that it is very large risk pool with hundreds of members who may or may not be neighboring cities and may not offer the customized services desired by the City.
4. The CJPIA JPA option could be a very strong candidate for the City. Its strong financials, service- oriented approach, coverage options for all lines of insurance , robust proactive loss control approach and extensive training and educational programs seem to best match for many of the City stated objectives.
5. The CIRA option remains a strong potential candidate for the City’s consideration. Other than the City-stated goal of similar geographic location, CIRA does appear to meet most of the City’s goals and objectives, especially as the City seeks more customized services and improved claim management.
6. Commercial insurance is not a viable option for the City for either liability, property, or workers’ compensation as the insurance market is too volatile with limited availability and appetite for public entity risks.
7. Use caution withdrawing from PERMA earlier than the required 6-month notice pursuant to the JPA Agreement provisions. PERMA, as well as most risk pools, will assess early withdrawal fees and assessments which could be an amount at least as the annual premium for each line of coverage. Joining a risk pool in the middle of a policy coverage period is not advisable from a coverage and administrative standpoint.
8. Transitioning to a new JPA can be disruptive, at least in the short term.
D. Recommendations
Our analysis in performing this study has led to one (1) recommendation.
1. Pursue alternatives to PERMA and initiate Phase 2 of the study . The Phase 1 study determined there are enough reasons to seek alternatives to the existing risk pool given many of the City’s goals and objectives are currently not being met.
The Phase 2 study will facilitate the process of obtaining initial quotes from PRISM, CJPIA, and CIRA for the current 2024/2025 coverage period. After this initial financial assessment, the Phase 2 study will facilitate the application process and interview process with the short list JPAs to further refine the “best fit” for the City for the 2025/2026 coverage year. The Phase 2 study will also facilitate obtaining firm pricing and terms in Spring 2025. Keep in mind PERMA’s 6-month requirement for notice to withdrawal is December 31, 2024.
7 II. Background, Interviews, Goals and Objectives, and Risk Profile
A. Background
The City engaged Albert Risk Management Consultants (ARMC) to explore various risk pools as an alternative to PERMA to finance its liability, property, and workers’ compensation risks. The City has been a member of PERMA since 2010. Over the past several years, the City has experienced a variety of service issues involving administration, finance, and claims through PERMA and its appointed vendors. The other motivation for the engagement was to conduct a due diligence review to determine if PERMA remains the best fit for the City’s insurance and risk management needs. The decision was then made to conduct an objective unbiased study of all alternative risk pools as it is a healthy exercise to periodically evaluate options.
The City engaged ARMC for two phases of this study. The first phase analyzes PERMA as an appropriate fit for the City. The first phase also identifies potential JPA options for the City to consider. Potential candidates are then paired down to further analyze potential fit including coverage differences, financial health, services offered, and claims handling matters. At the conclusion of the study, an implementation plan is outlined for the City to follow in moving forward with Phase 2 of the study. Phase 1 does not evaluate the financial feasibility of various risk pools as that analysis should be done following evaluation of the best “fit” for the City.
Phase 2 involves obtaining rate indications and other cost information from the identified short list in the Phase 1 study. In Phase 2, each of the short list JPAs will be approached to obtain pricing indications for membership in the 2025/2026 fiscal year, or earlier if the City elects to withdrawal from PERMA sooner. The City will then go through the application process with each JPA and provide exposure data from which the prospective JPA will provide a pricing indication. Interviews with each prospective JPA will most likely occur, further assisting with the overall “fit” analysis of the prospective pool. A report will be prepared with the results of all pricing indications, other costs, and summary of interviews with each JPA. It is at this stage the City will be in a position to make a reasonable decision whether to exit PERMA or switch to another JPA pool.
B. Interviews
The ARMC team conducted interviews with City's staff and leadership group as well as key individuals a t prospective JPAs. The ARMC team did not contact PERMA nor its current JPA administrator, Alliant Insurance Services, in the course of this Phase 1 study . Risk financing alternatives were discussed with interviewees including alternate risk pools and commercial insurance options. Each interviewee was asked what they needed in a risk pool to better service the City. The interviews also involved questions surrounding the City's risk profile, risk appetite and experiences to date with participation in PERMA.
The results of the interviews were mixed with some indicating dissatisfaction while others did not express concerns. All City interviewees did express a genuine desire to vet the current risk pool and learn about alternatives as a matter of basic due diligence. Specifically, the following are key comments were expressed during the interviews:
• Most interviewees indicated it was important for the City to continue its participation in a risk pool with cities similar in risk profile to the City of Hesperia. Many thought the Phase 1 study would provide the necessary due diligence regarding whether PERMA continues to be the best fit for the City. The study would also explore other services offered and alternative approaches to claims. It was important to several interviewees that the City belong to a risk pool that shared in the same risks and could also assist with emerging risks, such as increased traffic from recent major construction projects in the area.
8 • Regarding matters involving finance and administration with PERMA, several interviewees expressed concern and frustration over the timing of renewal rate indications and the final premiums assessed for each coverage year. PERMA’s process requires the City to make significant adjustments after final rates are set. This has caused delays with audits as questions to PERMA are not being answered quickly. In addition, monthly statements are not being issued which makes the accounting process more difficult.
• The communication from PERMA has been challenging the past several years. • The service provided by PERMA’s third party administrator has been challenging as claims are not being quickly resolved.
• Several interviewees expressed frustration about the City’s lack of input in the TPA selection process. • The general liability and automobile liability claims are administered by Adminisure with challenged communication. Several expressed the need for a dashboard to manage the claims while others indicate claims are not settled quick enough and communication to claimants is not ideal which elevates the value of the claim.
• Several interviewees expressed a desire to have access to alternative training programs as the selection offered by PERMA and its service partners is ineffective. • Several interviewees expressed a desire to have access to proactive and meaningful loss control programs as the City faces new and emerging risks.
C. City Goals and Objectives
During the interviews, the City provided their goals and objectives for this study:
• Conduct basic due diligence of the City’s existing insurance JPA “fit” while exploring alternative risk financing options for property, liability, and workers’ compensation risks; • Explore risk pool options that offer a strong similar risk profile as the City, especially an option that includes members in neighboring cities with similar emerging risks; • Explore options that would reduce the insurance program administrative burden; • Explore options that would improve claims service and ensure accountability while offering an option for the City to retain some control of the claim process; • Explore options that offer proactive loss control services to the City, and; • Explore options that provide robust training and education opportunities for City staff.
Emphasis has been put on these areas in this study. Our opinion of how each of each of these goals and objectives will be met are addressed in the Executive Summary at the beginning of this report.
D. City's Risk Profile
The City enjoys a low to moderate risk profile compared to other cities in California. The City is growing in population and appears to be adding to staff count to support the population growth. The City owns a golf course and also owns and operates a fleet of 125 vehicles including large equipment handled by the public works department. Although the City has had workers’ compensation and liability claims, interviewees expressed an opinion that the City enjoys a better than average risk profile and would be an attractive candidate to prospective risk pools. The City contracts out both police and fire which reduces both the workers’ compensation and liability risk profile.
9 Several interviewees discussed concerns over emerging risks such as increased amount of traffic due to large public infrastructure construction projects in the area. Recent large projects let by California Department of Transportation have diverted traffi c to streets not designed to withstand the traffic burden from these diversions. In addition, the City will face even more traffic and road congestion from construction of the Brightline West project, a privately developed high-speed train that will bisect the City and surrounding areas.
These projects are impacting City roads and streets and are expected to impact them as construction progresses. Interviewees indicated that claims involving streets and roads have doubled since the inception of construction. Given these emerging risks, however, we believe the City's general approach to risk will translate to competitive rates and terms in the JPA marketplace.
10 III. Overview of the JPA and Insurance Marketplace
A. JPA Governing Code
California Government Code Sections 990 and 990.4 provide that a local government may self-insure, purchase insurance through an authorized insurer, purchase insurance through a surplus lines broker, or any combination thereof. Code Section 990.8 provides that two or more local public entities, by a joint power agreement, may provide insurance for any authorized purpose by any one or more of the methods specified in Section 990.4. A Joint Powers Authority (JPA) as defined under Code Section 6500 is distinct from its member entities and has its own governing body, usually comprised of delegates from the member agencies that form the JPA.
B. JPAs for Cities
The majority of California cities, counties, special districts, and authorities participate in one or multiple of the approximately 17 JPAs for insurance and risk management services. One of the most common types of JPAs is a risk financing authority that provides either a vehicle for sharing losses arising out of the risks of the members or a means to jointly purchase insurance. Often a JPA combines these two (2) approaches, sharing risks up to a certain level then buying "excess" insurance for losses above that level.
Participation is largely an economic decision in terms of reduced contribution expenses versus securing insurance individually in the open market. The JPAs do vary widely though both in terms of coverage and risk management services.
Of the numerous insurance and risk management JPAs in California, roughly 17 have exclusive or even majority participation by cities. The following are potential JPAs we considered when conducting this report.
BCJPIA (Bay Cities Joint Powers Insurance Authority) GSRMA (Golden State Risk Management Authority) BICEP (Big Independent Cities Excess Pool) ICRMA (Independent Cities Risk Management Authority) CIPA (California Insurance Pool Authority) LAWCX (Local Agency Workers' Compensation Excess JPA) CIRA (California Intergovernmental Risk Authority) MPA (Municipal Pooling Authority of Northern California) CJPIA (California Joint Powers Insurance Authority) NCCSIF (Northern California Cities Self Insurance Fund) CJPRMA (California Joint Powers Risk Management PERMA (Public Entity Risk Management Authority) Authority) PRISM (Public Risk Innovation Solutions and Management) CSJVRMA (Central San Joaquin Valley Risk Management Authority) SCORE (Small Cities Organized Risk Effort) ERMAC (Exclusive Risk Management Authority of California) YCPARMIA (Yolo County Public Agency RM Insurance Authority)
Many on this list are clustered by geography and specific to areas in southern California, the San Francisco Bay Area, and parts of central valley. This list of potential JPAs for the City are highlighted below in Section C. Recommended JPAs by Geography and Fit.
11 C. Recommended JPAs by Geography and Fit
During our interviews, the City expressed an interest in obtaining customized risk management and training for their city, provide ease of administration with billing and premium allocations, and participate in a pool that offers the ability for the City to retain control over its claims. These considerations, along with similar geographic and risk tolerance criteria, resulted in a reduced list of three potential JPAs for the City's review and consideration. These pools are highlighted in green in the chart below.
• California Joint Powers Insurance Authority (CJPIA)
• California Intergovernmental Risk Authority (CIRA)
• Public Risk Innovation, Solutions and Management (PRISM)
Geography City Fit Reason
BCJPIA (Bay Cities Joint Powers Insurance Authority) No No Bay Area pool BICEP (Big Independent Cities Excess Pool) Yes No So CA beach cities CIPA (California Insurance Pool Authority Yes No So CAL pool CIRA (California Intergovernmental Risk Authority) -
formerly PARSAC and REMIF Yes Yes Services, ease of
administration
CJPIA (California Joint Powers Insurance Authority) Yes Yes So Cal focused;
customized services ;
ease of administration
CJPRMA (California Joint Powers Risk Management
Authority) No No Northern Cal pool
CSJVRMA (Central San Joaquin Valley Risk
Management Authority) No No City population size less
than 75,000
ERMAC (Exclusive Risk Management Authority of
California No No Small membership
GSRMA (Golden State Risk Management Authority) No No Small municipalities ICRMA (Independent Cities Risk Management
Authority) Yes No All So Cal cities
LAWCX (Local Agency Workers' Compensation Excess) Yes No Only WC pool MPA (Municipal Pooling Authority of Northern CA) No No SF Bay Area cities NCCSIF (Northern California Cities Self Insurance Fund) No No Small NorCal cities PERMA (Public Entity Risk Management Authority) Yes Yes Current Provider PRISM (Public Risk Innovation, Solutions and
Management) - formerly CSAC-EIA Yes Yes Wide offerings; many services; ease of
administration
SCORE (Small Cities Organized Risk Effort) No No Very small cities YCPARMIA (Yolo County Public Agency Risk
Management Insurance Authority) No No Only Yolo County
municipal risks
In addition to the recommended options outlined in green above, other pools were considered but quickly eliminated after matching up with the City's goals. Specifically, both ICRMA , BICEP, and CIPA were considered as there are many members in Southern California and surrounding communities. These pools were eliminated due to either required higher retentions or not a fit with the City’s risk profile.
12 D. Short List JPAs - Basic Elements
The analysis contained in this section will focus on the identified short list of potential pools, their capabilities, their services and overall "fit" for the City of Hesperia. The table below shows member attributes for the four pools. Full-Service cities are those that do not contract out for police and fire. The average population estimates are from 2022.
Basic JPA Elements PRISM CIRA PERMA CJPIA
Number of Members 354 53 31 117
Number of Cities (#) 136 44 21 92
Number of Cities (%) 38% 83% 68% 79%
Number of Cities in
Southern CA
68 (50%) 12 (25%) 100% Several small cities
in Marin & San
Mateo Counties
Other Types of
Members
Transits Districts;
Counties; Pools;
Superior Courts, etc.
Fire Districts,
Dispatch JPA
Transit Districts,
Emergency
Communication
Authorities, JPA,
Training Agency
Transit Districts;
Other Special
Districts
City Population
(Average)
103,647 22,000 59,363 32,928
Pool Type Primary and Excess Primary Primary / Risk
Sharing
Primary / Risk
Sharing
Founded 1979 July 1, 2021 but
was originally
formed in 1986 as
CA Municipal
Insurance
Authority
1985 1977
Lead Time to Join 3 Months 3 Months 3 Months 3-4-Month
application process
followed by BOD
approval
Length of Commitment 3 Years 5 Years 3 Years 3 Years
Participant
Requirements
Optional
participation.
Requirements if
choose to participate
maintain loss
prevention program,
actuarial study every
3 yrs., annual loss
data submissions,
compliance with
EIA's Claims Admin
Use of Authority
Approved TPA,
Must participate in
at least Workers’
Compensation or
Liability
Must participate in
Liability
Board approval,
May take 3-4
months for
application process
and BOD approval;
must join liability
pool to participate
in rest
Notice to Withdraw 60 Days 1 Year or Shorter,
if approved by
Executive
Committee
6 Months 1 Year
13 Basic JPA Elements PRISM CIRA PERMA CJPIA
TPA Selection Sedgwick George Hills
Company
(Liability)
LWP (WC)
Adminisure
(Liability)
Adminisure, Corvel
and Sedgwick (WC)
Carl Warren & Co.
Reserve Confidence
Level
85% 90% 80% "Expected
probability level"
As is indicated from the chart above, PRISM has the highest number of members in its pool even though only 38% of them are cities. This is followed by CJPIA with 117 members and 79% of the membership being cities.
CIRA has 53 members, of which 44 are cities, 4 towns, and 5 fire districts. While PERMA is the only JPA with 100% of cities located in Southern California, they have the lower member count at 31. PRISM has the most diverse type of members in its pool portfolio with non-member cities being transit agencies, counties, superior courts, and other municipalities. Finaly, the table indicates CJPIA tends to support smaller cities as the average population of their pool participants is 32,928. This is contrasted wi th PRISM's average pool participant population base of 103,647.
There are other distinguishing elements from the above-referenced table. All four JPAs evaluated have existed for quite some time starting back as early as the late 1970’s. While CIRA legally formed in 2021, it was originally created as the California Municipal Insurance Authority (CMIA) in 1986. The CMIA JPA Agreement was revised in 1993 when its name was changed to the Public Agency Risk Sharing Authority of California (PARSAC). In 2021, PARSAC merged with the Redwood Empire Municipal Insurance Fund (REMI F) to form CIRA to strengthen the pool, reduce overhead costs, and spread losses over a larger member base. Still another common characteristic of the prospective pools is all prospective pools require a commitment to participate for a minimum of 3 years. The notice to withdrawal from the JPA ranges vastly with PRISM requiring 60 days and CJPIA requiring one year notice. CIRA may permit a shorter notice to withdraw with approval from their executive committee.
Finally, the confidence levels are important to note between the four JPAs. PRISM has increased its confidence level from 70% in past years to a current level of 85%. CJPIA does not specify a specific percentage confidence level, but rather states the organization sets its reserves and rate levels to "expected probability levels." Should the City move forward with CJPIA, it will need to seek clarification on its rate setting and reserving philosophy.
Reserving to a higher confidence level avoids wide fluctuations in loss reserves and thus less volatility in the rates it charges its member organizations. CIRA reserves to the highest confidence level of 90%.
E. Traditional Insurance
Cities and other large public entities that do not participate in JPAs generally fall into two categories: those large enough to maximize their own buying power (or completely self-insure) and those with complex exposures that cannot be addressed on a group basis. These entities may still elect to participate in JPAs for specific exposures or even move in and out of JPAs as the marketplace changes over time.
Though infrequent, there are instances where cities obtain private insurance for certain exposures. Options for the core lines of insurance such as workers' compensation, property, and liability insurance are very limited with only a handful of insurers consistently providing coverage in the public agency sector. The California public entity workers' compensation market, for example, consists of three to four insurance companies with SIR options starting at $500,000 per claim.
Unfortunately for most cities and counties in California, options for primary liability and workers'
14 compensation coverage are very limited outside of the available JPA programs. For liability there are only two to three insurers providing options, each starting with SIRs at $500,000 or greater given recent hard market conditions. The number of potential insurers increases to three or four for workers' compensation, but they are also focused on providing options at the higher excess level. Property coverage can be obtained without the economies of scale that a pool provides. The current property insurance market is very restrictive with limited capacity, particularly for catastrophic perils such as earth movement and flood. The instability of the commercial insurance market makes it difficult for a municipality to stabilize its risk financing program.
Participating in commercial insurance for one year only to move to a JPA solution the next year is not advisable from a cost and administrative burden, let alone the nature of long-term commitment required of JPA participation.
As part of the study, we spoke to several public entity commercial insurance brokers about the possibility of the City transferring its risks to a commercial insurance product(s). All indicated it was not advisable in the current insurance marketplace due to the limited insurer options and restrictive coverage agreements. If options were available now, they may not be available next year at the same terms, conditions, deductibles or self-insured retentions, and premiums. Further, insurers offering commercial insurance options now may not at the next renewal. JPAs are far more stable risk financing options for municipal risks as they are more isolated from the commercial insurance markets and can have superior coverage agreements over commercial insurance options.
15 IV. Financial Analysis
A. JPA Financial Strength
Four JPAs were evaluated in terms of financial strength, using several ratios for analysis. These measures provide an indication of liquidity and of ability of a JPA to pay losses even under adverse conditions. An insurance pool must always balance the need to be liquid and hold adequate reserves against the members' need to keep as much of their cash as possible for their own operations.
There are guidelines and rules for financial management of JPAs. All four JPAs appear to operate within these guidelines although with different degrees of cautiousness. All reviewed JPAs are within all the recommended ranges of the financial tests. Some JPAs fell outside the recommended ranges in prior years but are all within the recommended ranges for the most recent two years reviewed. Note that financials were not available for both CIRA and CJPIA for fiscal year ending on June 30, 2023.
The financial condition of a prospective pool is one of the most important factors to consider when evaluating prospective membership. Financial weakness can lead to undesirable consequences. At the least, weakness can lead to assessments imposed on the members to make up for past deficits. At the worst, financial weakness can lead to a collapse of a pool and unfunded liabilities placed on the members, ultimately defeating the functionality of a pool.
Pools should operate in a manner similar to an insurance company by setting aside sufficient reserves to cover expected losses. They should have a cushion to cover unforeseen circumstances due to changes in membership or adverse loss development and need substantial liquidity to cover irregularities in cash flow that can occur over a period of time.
We analyzed the annual financial reports for all four JPAs for the past 3-4 consecutive years. For comparison of financial strength, we identified various guidelines within the industry of self-insurance pools that recognize the unique character of these organizations. Several of the measurements came from outside sources.
The financial strength of insurance carriers is assessed by third party companies such as AM Best or S&P Global.
The pools we reviewed are not rated by these third parties. However, California JPAs is reviewed for industry best practices by the California Association of Joint Powers Association (CAJPA - www.cajpa.org). Most pools reviewed have been Accredited with Excellence by CAJPA since 1989. This rating is based on an examination of the pool's finances, management, and operations in relation to JPA standards established by CAJPA's Accreditation Committee. Other pools reviewed have also achieved AGRiP Recognition, a distinction the Association of Governmental Risk Pools (AGRiP) awards to pools exceeding operational standards, as reviewed by a committee of peers.
1 "Evaluating Group Risk Finance Programs," The Risk Report, Volume XXXII, No.4, December 2009, International Risk Management Institute, Dallas, Texas.
16 B. Rate Accepting Risk
This ratio measures the rate at which the pool is accepting risk in the form of member contributions against the pool's total surplus, or net assets. It is calculated by taking the JPA's net member contributions for the fiscal year and dividing it by the JPA's net assets. The ratio also measures whether the pool has sufficient assets to support contributions from its members. Net member premium contributions represent the annual amount of premium contributions from pool members less reinsurance costs and excess liability insurance. Ratios over 3:1 indicate the pool is accepting risk by collecting premiums at a higher rate than obligations that can be supported by its surplus. This can potentially cause the pool to have liquidity and solvency issues. The exhibit below shows the net member contributions to asset ratio for each of the pools reviewed.
Exhibit 1 - Rate Accepting Risk
JPA 2019/20 2020/21 2021/22 2022/23 Target Ratio
PRISM 1.36 1.37 1.88 1.46
3:1 or Lower
CIRA 0.53 0.58 1.45 N/A
CJPIA 0.81 0.82 0.94 N/A
PERMA 1.72 7.17 1.35 2.75
As the exhibit indicates, all prospective pools are within industry guidelines of $3.00 in member contributions to $1.00 in net assets. All are accepting risk at a rate under $3.00 for every $1.00 in pool surplus. This indicates the JPAs are accepting risks well within a very conservative rate to its surplus level. Although PERMA’s ratio was out of line for the 2020/2021 fiscal year, the relationship to net member contributions to net assets adjusted to a more favorable level in the last two fiscal years reviewed evidencing less risk.
C. Ability to Withstand Adverse Loss Development
The ratio of loss reserves to net assets measures the pool's total loss reserves against its total surplus, or net assets. It is calculated by taking the JPA's current and long-term loss reserves as stated on its balance sheet and dividing that by the JPA's net assets. Loss reserves consist of the pool's total outstanding current and long- term claim liabilities which include claim reserves, incurred but not reported, and unallocated loss adjustment expenses as represented on the pool's balance sheet each year. The ratio measures a pool's ability to withstand adverse loss development in a given year. Ratios approaching or exceeding a 4:1 relationship of claim liabilities to surplus indicate the pool may not have enough surplus to meet its claim liabilities and therefore may be prone to member assessments.
17 Exhibit 2 - Ability to Withstand Adverse Loss Development
JPA 2019/20 2020/21 2021/22 2022/23 Target Ratio
PRISM 3.76 4.16 6.14 3.37
4:1 or Lower
CIRA 0.7 0.68 1.5 N/A
CJPIA 1.55 1.45 1.77 N/A
PERMA 2.86 12.07 1.73 2.74
As the table indicates, all JPAs are within industry guidelines as their claim liabilities are below the 4:1 industry guideline for each of the 3 - 4 years reviewed. PRISM and PERMA’s relationship of claim liabilities to surplus were higher than industry guidelines during some fiscal years reviewed, however, now fall within guidelines for the most recent fiscal year reviewed. Several years ago, PRISM restructured its liabilities by conducting a loss portfolio transfer which strengthened the organization's balance sheet. This strategy will continue to strengthen the liability portfolio's equity position and will continue to improve in the coming years.
D. Adequate Funding for Current Claims
The relationship of net member contributions to current year losses measures whether the pool is obtaining adequate funding for its current claim obligations. The ratio is calculated by taking total net member contributions for the fiscal year and dividing that by the provision for current losses on the JPA's income statement for that fiscal year. A ratio of 100% means the pool is taking in $1.00 in member premiums for every $1.00 it has in current year claim obligations. A ratio above 100% suggests adequate funding for the current year, while a ratio of less than 100% suggests the pool may be drawing from prior year contributions to pay current claim obligations.
18 The following sections present the analysis of this ratio for each of the four JPAs evaluated.
Exhibit 3 - Adequate Funding for Current Claims
JPA 2019/20 2020/21 2021/22 2022/23 Target
Ratio
PRISM 91% 83% 106% 158%
100% or
Greater
CIRA 394% 348% 185% N/A
CJPIA 130% 185% 152% N/A
PERMA 155% 136% 360% 220%
The relationship of net member contributions to provisions for current losses measures whether the pool is accepting risk at a faster rate than the claims for a particular fiscal year. All four pools demonstrate a healthy position and are adequately funded to meet its current claim obligations. CJPIA, CIRA, and PERMA have always maintained a healthy relationship of member contributions to current liabilities.
In several recent fiscal years, PRISM was collecting more member contributions than current year claim obligations. This rate dip below the guideline of $1.00 in two (2) prior fiscal years. This indicates for the fiscal year 2019/2020 and 2020/2021, the JPA may have used prior year member contributions to fund its current liabilities. The extent this ratio digresses lower from $1.00, the more likely the organization is using prior year member contributions to fund current losses. The ratio did increase to $1.58 in the most current fiscal year showing healthier relationship of current member contributions to current claim obligations.
E. Conclusions from Financial Analysis
In summary, all four JPAs show an acceptable level of member contributions relative to their surplus level when considering an industry guideline of 3:1 (net member contributions relative to assets). Annual member contributions for the 3-4 most recent fiscal year data available exceeds current year losses reflecting an adequate funding level.
When reviewing each pool's relationship of total loss reserves to net assets , all four JPAs showed a solid surplus level relative to short and long-term claim obligations. Although PERMA and PRISM produced ratios above the suggested guidelines in some prior fiscal years, those ratios are now at acceptable levels. In both cases, the JPAs experience adverse development from prior years which prompted some restructuring.
Measuring the relationship of member contributions to current claim obligations showed tha t all four (4) JPAs produced strong results. In the case of PRISM, the relationship of member contributions to current claim obligations for the two (2) oldest fiscal years reviewed was some cause for concern as the results were below the benchmark of 1:1. PRISM’s most recent two fiscal years show a positive trend. All in all, for the four (4) pools reviewed, each shows a healthy financial condition which minimizes the potential for financial distress and minimizes the potential for future member assessments.
19 V. Coverage Comparisons
Liability risks are the most critical and difficult to insure for California public entities. The so -called "liability insurance crisis" of the 1970s, repeated in the 1980s, drove the formation of risk sharing pools in the public sector, especially in California. Although many JPAs also pool workers' compensation risks, liability pool participation is often the principal requirement for JPA membership.
By statute, public entity risk sharing pools formed as joint powers authorities are not insurance companies.
The documents the JPAs use spell out the protection s available to members of the pool are not called insurance policies. Names for the coverage documents may vary, using such terms as "memorandum of coverage," "coverage contract," or similar terms.
Public entity liability insurance or group self-insurance documents usually will provide at least the following types of coverage:
• General liability, which would cover claims alleging bodily injury, property damage, personal injury, and advertising injury;
• Public official liability, covering errors and omissions made by public elected officials and member employees; and
• Auto liability covering bodily injury or property damage resulting from negligent operation of a motor vehicle.
JPAs also offer employment practices liability protection either within their form or through a separate coverage agreement through Employment Risk Management Authority (ERMA) JPA.
Sometimes the "line" of coverage may not be spelled out in the coverage document. For example, some of the MOCs do not specifically mention "auto liability" as one of the types of protection provided, but the document will clearly indicate that unlike comm ercial general liability insurance, the MOC has no exclusion for bodily injury or property damage resulting from use or operation of a motor vehicle. Each of the three prospective pools offers a package of liability protection that includes the three basic types of coverage identified above, i.e., general liability, public official liability, and auto liability.
All three (3) alternate JPAs offer a liability package that provides protection for municipal liability exposures and provides a mechanism to pool and share risk with fellow members. The risk sharing is a relatively small portion of the total program limits; however, with excess insurance covering losses above a specific pooled amount. Usually, excess liability insurance covers 70% or more of the total limit.
There are differences among the programs in terms of broadness of definitions, number and kind of exclusions, and approaches to drafting coverage terms. For example, CIRA has some unique exclusions not found with the other JPA’s such as a bounce house exclusion, labor disputes and class action exclusion, firearm by non-peace officers’ exclusion, non-police electroshock weapons exclusion, and vaccination and disease testing exclusion. There are also unique features such as CJPIA's "city manager employment li ability" coverage. No JPA has a clear and distinct advantage over another in terms of coverage. One of the unique characteristics of a JPA is that since it exists for the benefit of and at the pleasure of its members, JPAs tend to be liberal in coverage interpretation and can choose to cover almost anything they wish. Thus, even though a MOC may appear to exclude a type of coverage or may be silent, the JPA may choose to cover a claim where an insurer might deny it.
20 As the table below and Appendix D - JPA General Liability Coverage Comparison indicates, PERMA offers liability limits of $2 5,000,000 with an optional liability program offered to provide limits up to $50,000,000.
CIRA offers liability limits of $40,000,000. PRISM offers $25,000,000 in liability limits but can provide additional liability limit s for an increased premium. CJPIA offers liability limits of $30,000,000 with an optional liability program offered to provide limits up to $50,000,000. The City currently carries $25,000,000 in limits through PERMA.
It is important to note that each of the four (4) pools requires participation in their liability program to be a member of the JPA.
A. Liability Program Structures
The following summarizes PERMA as well a s the three ( 3) prospective JPA's liability structure, retentions, and program limits.
Liability PERMA
(Incumbent) CIRA PRISM CJPIA
Member Retentions $5,000 –
$500,000
$5,000 –
$750,000
$10,000 –
$1 Million
$0 (Primary Program)
$150K – $1
Million (Excess
Program)
Pool Retention $1 Million $1 Million $5 Million $3 Million Program Limits
$25 Million
(Primary)
Up to $50
Million
(Excess)
$40 Million $25 Million
Optional Excess
$30 Million (Primary)
Up to $50 Million
(Excess)
As the table indicates, member liability retentions range from $0 to $1,000,000, depending on the JPA.
The actual pooled retentions for PERMA, CIRA, PRISM, and CJPIA range from $1,000,000 per occurrence to $5,000,000. The JPA arranges for excess layers above the member and pool retention levels. Program limits also range from $25,000,000 to $50,000,000, with PRISM offering limits in excess of $25,000,000 that vary by member. Many JPA member participants purchase excess layers above the pool-provided programs through Alliant Insurance Services, an insurance broker who administers many JPAs and also serves as a commercial insurance broker for insurance products. For a comprehensive comparison of liability coverage and exclusions amongst the four prospective JPAs, refer to Appendix D, JPA Coverage Comparison.
21 B. Employment Practices Liability Program Structures
The following table describes how Employment Practices Liability (EPL) coverage is provided in each of the JPA’s.
Employment Practices
Liability PERMA (Incumbent) CIRA PRISM CJPIA
Covered Program
ERMA Primary & Excess
with ERMA
Part of PRISM
General Liability 1
and 2
Part of CJPIA
Liability Program
Deductible Options
Varies ($25K, $50K,
$100K, $500K)
Varies ($25K, $50K,
$100K, $500K)
Varies ($10K to
$1M)
$0 (Primary
Program)
$150K, $250K,
$500K, $750K, or
$1M (Excess
Program)
Limits
ERMA $1M
Excess Pool up to
$50M
CIRA Primary
$250K
ERMA Up to $1M
PRISM provides
coverage above
ERMA
$25M Primary
with Optional
Excess Liability
Available
$30M Primary
with Optional
Excess Liability
Available
Claims Handline
ERMA Approved
Panel of Defense
Counsel
ERMA Approved
Panel of Defense
Counsel
Qualified defense
counsel
experienced in
liability law shall
handle litigated
claims. Members
are encouraged to
utilize defense
counsel
experienced in the
subject at issue in
the litigation.
CJPIA shall control
selection of
defense counsel.
Services Offered
• Up to $2,500 per
year for employment
practices-related
training
• Attorney hotline
with (1) hour of free
legal advice every
month
• Employee
Protection Line
• Up to $2,500 per
year for
employment
practices-related
training
• Attorney hotline
with (1) hour of
free legal advice
every month
• Employee
Protection Line
• Members may
access Labor Law /
Employment
Practices Program
through Eyres Law
Group at no
additional cost
• Employment
practices manuals,
customizable
forms and
checklists
• Employment
intervention
program to guide
member in
positioning, and is
designed to work
with concurrent
legal efforts
• Anonymous
harassment
reporting system
for member use
22 As shown in the above table, PERMA offers EPL with a separate coverage agreement through Employment Risk Management Authority (ERMA) JPA. ERMA offers up to $1,000,000 in EPL limits and PERMA offers excess pool coverage up to $50,000,000. CIRA offers the first $250,000 of EPL coverage in their coverage form with ERMA providing up to $1,000,000 of coverage beyond CIRA. CIRA members can access the PRISM program for EPL limits above $1,000,000. PRISM and CJPIA both provide EPL as part of their liability program – PRISM provides $25,000,000 of EPL in their l iability form and CJPIA provides $30,000,000. O ptional excess liability limits available, if desired by the member. In terms of claims handling, PERMA, CIRA, and CJPIA require the use of their approved defense council firms. PRISM encourages members to utilize qualified defense council firms. All four JPA’s provide EPL services for members.
C. Property Coverage Structures
PERMA, PRISM, and CJPIA provide their own property program, with CIRA offering PRISM’s property program to their members . For PERMA, this concept involves developing a “manuscript” insurance policy geared towards public entities and then enlisting insurance protection from various insurers. The core program is called the Public Entity Property Insurance Program (PEPIP). The comprehensive offerings through PEPIP include all risk property, equipment breakdown, business income, builder’s risk, and more. Ear thquake coverage may be available on an optional basis. Each property program offered is essentially structured in the same manner, with a few differences among each. For example, PEMRA excludes any property newly acquired, owned, leased, managed, rented, or occupied by the member unless the property is specifically scheduled, while the other JPA’s offer limited coverage for newly acquired property.
Property PERMA (Incumbent) CIRA PRISM CJPIA
“All Risk”
Member
Retentions
$10K or $50K, with
Hesperia’s current
retention at $10K
See PRISM Property
Program
$10K to $125K, but
varies depending on
Program Tower
$2.5K, $10K,
$100K, or 5%
Limit
$100M per member
per occurrence except
for specified perils.
$200M annual
aggregate.
See PRISM Property
Program
Tower I to VIII: $300M
except for specified
perils, $100M boiler
and machinery, plus
excess coverage
$25M per
occurrence except
for specified perils
Earthquake Shock
Coverage
Sublimit
Optional Program See PRISM Property
Program
Tower I to VI: $100M
Tower I to VI: $365M
Shared Excess Roof
Top
Tower VII: $25M with
no Excess Roof Top
Tower VIII: No
Coverage
If purchased $25M
shared by covered
members per
occurrence and in the
annual aggregate
As further evaluated in Appendix D - JPA Coverage Comparison indicates, all four JPA’s offer “All Risk” member retentions at the City’s current retention of $10,000 per occurrence. CJPIA offers the lowest program limit at $25,000,000 per occurrence, with PERMA at $100,000,000 per occurrence, and PRISM at $300,000,000. The PRISM program is set up to provide eight (8) different towers, or sub-programs. Each tower has its own limits specified.
23 D. Workers’ Compensation Structures
As part of this engagement, the City also requested ARMC to evaluate risk financing options for its workers ’ compensation risks. Currently the City is self-insured for each workers’ compensation claim up to its $250,000 self-insured retention.
The following are options to finance the City’s statutory workers’ compensation liabilities:
• Purchase primary commercial insurance;
• Obtain primary or excess coverage through a Joint Powers Authority, or • Remain self-insured and purchase excess workers ’ compensation insurance through an alternate JPA or can excess workers’ compensation commercial insurance product.
The following are key aspects of alternative JPA workers’ compensation programs:
Workers’
Compensation PRISM CIRA CJPIA PERMA
Member Minimum
Retentions /
Deductibles
Primary program –
first dollar coverage
up to $125,000
Primary program –
first dollar coverage,
SIR up to $350,000
Primary (first dollar)
and excess programs
available
Primary program
– first dollar
coverage, SIR up
to $500,000
Pooled Retention $10,000 $500,000 $1,000,000 $500,000
Confidence Level 80% 75% 70% - 80% 80%
Cost Containment
Programs provided by
the JPA
- Risk control
- Medical provider
network
- Managed care
- Crisis incident
counseling
- Training and
education
“Zero Litigation
Policy” to ensure
employees receive
quality care and
timely benefits.
Pharmacy benefit
program.
Return-to-work
program.
- Telephonic nurse
triage
- Early return to work
programs
- Medical provider
network
- Nurse case
management
Utilization review
- Bill review
- Return-to-Work
Program
Template
- Wellness
Program Tools
- Job Analysis
Library and
Template
- Infectious
Disease Outbreak
Response Plan
Claims Management
For primary program,
select one of four
TPAs from PRISM’s
contracted TPAs:
AdminSure, Intercare,
LWP, or Sedgwick
LWP
Must use CJPIA-
provided TPA (Athens
Administrators). Must
use CJPIA provided
panel attorneys (list of
8)
Current TPAs
include
AdminSure,
Corvel, and
Sedgwick.
As the table indicates, the City does have a few more options when it comes to workers’ compensation coverage with other risk pools.
A word about CJPIA’s workers’ compensation program. CJPIA offers both primary and excess workers’ compensation programs. Participation in this pool requires the use of their contracted TPA, Athens Administrators. It is unclear how involved the City could be in claims administration and settlement under CJPIA’s arrangement. If the City is interested in exploring this option, thoroughly vetting the claims management arrangement will be an important item to explore as it may significantly differ from the wa y workers’ compensation claims are handled under a $250,000 retention currently controlled by the City. Note this option requires the City to join CJPIA’s liability program.
24 E. Ancillary Insurance Program Structures
Each of the JPAs also offer the following programs:
• Cyber liability;
• Special event coverage;
• Deadly weapons liability coverage;
• Pollution;
• Course of construction coverage, and
• Crime and fidelity bonds.
In addition, other coverages that may be unique to a particular entity are available in any of these programs, most often through a commercial insurance broker. The cost of these programs is generally not high, and we therefore have not made direct comparisons between the JPAs of their commonality and low cost .
In our opinion, the City could likely obtain any of the programs for comparable cost.
25 VI. Services, Support, and Claims
PRISM, CIRA, PERMA, and CJPIA are all considered primary pools. This means that they provide the primary layer of protection to their members. The pools' respective risk management services are designed to support this first layer of defense and many services are mandatory for pool participation, such as site inspections. The types of services available can be broadly categorized as:
• Loss Prevention, Risk Control, Safety;
• Education and Training;
• Claims and Litigation Management/Oversight; and
• General Consulting and Contractual Risk Transfer.
For each JPA these services have been developed to support the broad membership base. This is a critical consideration that leads to selecting potential JPAs with city specific membership and corresponding services. In terms of customization, it is our opinion after the JPA interview process that all prospective pools are positioned to provide customization as requested by the City. This type of narrative discussion is by no means a guarantee of delivering tailored programs, but each alternate JPA was able to cite specific, credible, representative examples of personalized service.
JPA Services and Support Matrix
The following matrix highlights various noteworthy services offered by PERMA and the three prospective JPAs:
PERMA CIRA PRISM CJPIA
Risk Control
Reimbursements
Members may be reimbursed
for the actual expenses which
they incur for workplace
safety and/or risk control
related expenses, to a
maximum of $3,000 per fiscal
year
(July 1 – June 30).
Grant Program available
– amount varies
depending on potential
impact of member’s risk
management objectives
and limited to $3,500
per fiscal year.
An annual Risk
Management Subsidy of
$1,000 per coverage can
be used to cover any
risk management or loss
prevention related
expenses and is
available to members of
the Workers’
Compensation, Property
and Liability programs.
Also have a $2,000
actuarial study subsidy.
Not aware of any
grants or risk
control related
reimbursements.
Training Visit the training/risk
management page. If you
have special training needs,
please contact Bill Taylor,
[email protected] or
(916) 204-0030.
Members have access
to Target Solutions‘
suite of safety courses
at no cost to the
members.
PRISM partners with
Vector Solutions to
deliver an online
training and safety/risk
management platform
of services. Other online
streaming trainings
include (1) iTrainStation
(library or videos) and
(2) PRISMtv (24/7 access
to on-demand
webcasts).
CJPIA's E-Learning
library has over
225 training
videos accessible
at any time. View
the catalog here –
https://cjpia.org/t
raining/e-
learning/
26 PERMA CIRA PRISM CJPIA
Risk
Management
Services
Contracts with Sedgwick for
risk control services, all
members have access to
technology-based resources
through the Sedgwick
risk services
website. Additional details can
be found at Risk Control
Services – PERMA
(permarisk.gov)
Annual academy-a full
day workshop of risk
management training,
legal updates, claims
lessons learned.
Customized, regional,
onsite, and individual
training courses.
Heenan
Communications
provides strategic and
crisis communications.
Similar services are
provided by field staff
and partnerships with
other 3rd party vendors.
See their 2021 Risk
Control Services
Brochure –
Services - PRISM
(prismrisk.gov)
Similar services are
provided by CJPIA's
seven regional risk
managers, training
academies, Loss
Control Action Plan
program and their
E-Learning
platform. You can
view the training
catalog and other
information here –
https://cjpia.org/tr
aining.
A. Support & Services
In terms of risk control reimbursements, PERMA offers $3,000 per program year for general liability training, while PRISM provides an annual Risk Management Subsidy of $1,000 per coverage, which can be used for any risk management or loss prevention expenses. CIRA offers a grant program with awards based on their potential impact on the member’s risk management objectives. For example, attendance for more than one employee at a risk management conference can be reimbursed with grant funds, limited to $3,500 per fiscal year. CJPIA, unfortunately, does not mention any specific grants or reimbursements in their offerings.
Regarding training, all the JPA’s offer online and virtual training programs accessible on the web. PERMA offers training in a variety of formats (e.g. on -demand, webinar, live). Members also have access to a learning management system to track employee training. CIRA offers courses such as Risk Management 101 (a two-day intensive session), implementing a return -to-work program, ADA interactive process, claims handling for city staff, conducting investigations, safety management, city council orientation, and new board member orientation. PRISIM has several unique training programs, such as cyber security training and safety management certification. CJPIA members can access an extensive online library of resources and unique one -day offerings, such as risk management roundtables, workers’ compensation symposium, and webinars.
In terms of risk management services, PERMA offers a range of services through Sedgwick, including on- site training, on -site consultation, program development, customized webinar development, and phone consultation. CIRA has experienced staff in specialty areas such as litigation management, proactive incident and claim resolution, representation at mediation, legislative and regulatory compliance, and contractual risk transfer. PRISM provides similar services through their field staff and partnerships with third-party vendors, as detailed in their Risk Control Services Brochure. CJPIA offers comparable services through their seven regional risk managers, training academies, Loss Control Action Plan program, and their own E-Learning platform.
Overall, while there are certainly strengths and weaknesses in the specific offerings, all of the considered organizations aim to provide support and services related to risk control, training, and risk management.
The City should carefully evaluate these offerings to determine which best aligns with their specific needs and preferences.
27 JPA Claims Services Matrix
Equally important from risk control and training support services are claims services. The following matrix summarizes the claims services offered for property and liability claims from PERMA and the three prospective JPA pools:
CLAIMS
MANAGEMENT
PERMA CIRA PRISM CJPIA
Can select liability TPA? Adminisure Yes, but the services for George Hills are already
included in the
premium and are not
credited.
Sedgwick No (Carl Warren & Co.)
Can self-administer
liability?
No All claims must be
reported to George Hills
to administer/
manage. We do have
some members that did
self-administer small
claims, such as potholes
or snowplow related
claims.
Yes No (Carl Warren & Co.)
Member can select
defense counsel?
Utilize PERMA defense
counsel
No - With respect to
any potentially covered
Claim or Suit, the
Authority shall select
and assign counsel to
defend the Covered
Party(s). The Authority
will consider the wishes
of a Covered Party with
respect to the
assignment of counsel,
but the Authority
retains the sole right to
make the assignment of
counsel. If the Covered
Party refuses to be
defended by the
counsel assigned by the
Authority, then this
Memorandum shall not
provide any defense or
indemnity to such
Covered Party
Yes - "Members are
encouraged to utilize
defense counsel
experienced in the
subject at issue in the
litigation". MOC
prescribes following
Claims Admin
Guidelines
Members choose from
the Authority's pre-
approved defense
panel, which has a
variety of legal
specializations tailored
to municipal risks,
defense panel complies
with Authority-
established reporting
requirements pre-trial
budgets and negotiated
panel rates (non-panel
counsel is permitted
with prior approval).
Additions to the panel
are considered upon
request.
Claims Disagreements
settled by:
An executive committee
appointed by the Board
of Directors. Such a
decision could be
appealed to the Board
of Directors. The results
of such appeal shall be
final and binding and
shall not be the subject
of any further appeal,
Member retains the
right to appeal to the
Board of Directors,
whose decision shall be
final. If either the
Covered Party or the
party identified in the
Covered Contract
refuses to have such
party(s) be defended by
the counsel assigned by
the Authority, then the
Letter, Committee
Appeal, Executive
Committee Appeal,
Arbitration (binding
optional), Litigation (see
article 31 of agreement)
Letter to Chief Executive
Officer, appeal to
Appeals Committee,
Binding Arbitration
Process (detailed in
Memoranda of
Coverage) - see pg. 26
of Primary Liability
Program's MOC
28 CLAIMS
MANAGEMENT
PERMA CIRA PRISM CJPIA
arbitration, or court
action.
obligation of the
Authority to contribute
to Defense Costs arising
from such Claim or Suit
shall be limited to such
amounts as would be
incurred if counsel
selected from the Panel
Counsel list were
assigned the defense of
such Claim or Suit.
B. Claim Services
When comparing the claims management services offered by the JPA’s, PERMA, PRISM, and CJPIA require the use of their liability third-party administrator (TPA), while CIRA does not. Currently, PERMA offers the choice of 1 third party administrator – Adminisure. All pool members are required to utilize PERMA’s provided third-party administrator without the ability to select their own.
CIRA permits members to select their own liability TPA, but the services for George Hill s are already included in the premium and are not credited. All of CIRA’s current members are using George Hills. CIRA does not allow their members to select defense counsel, and will consider the wishes of the member, but retains the sole right to make counsel assignments. Claim disagreements and other disputes with CIRA are reviewed by the Board of Directors.
In contrast, PRISM does not allow the selection of a liability TPA but offers self -administration of liability.
Members can choose defense counsel with expertise in the relevant litigation subject. PRISM has claims committees for each coverage area, and di sagreements can progress through a series of steps, including letters, committee appeals, executive committee appeals, arbitration (binding optional), and ultimately litigation.
For CJPIA, liability TPA selection is not allowed as Carl Warren & Co. serves as the designated TPA. Members cannot self-administer liability and must rely on Carl Warren & Co. for administration. Defense counsel is selected from the Authority's pre-approved panel, which includes various legal specializations tailored to municipal risks. CJPIA has a claims committee composed of other members, and disputes follow a process involving letters to the Chief Executive Officer, appeals to the Appeals Committee, and ultimately a binding arbitration process outlined in the Memoranda of Coverage.
These variations in claims management services highlight the different approaches taken by PERMA, CIRA, PRISM, and CJPIA. The City should carefully consider these factors when choosing a JPA that provides the most suitable claims management services for their needs.
29 C. Summary of Support, Services and Claims Services
When selecting a JPA to participate in, it is crucial to consider the factors listed above as they can greatly impact the City’s risk management and overall success. The importance of choosing good risk control, training, support services, and claims services cannot be overstated.
Effective risk control measures are essential for minimizing potential liabilities and ensuring the safety of your operations. A reliable JPA should offer robust risk control programs tailored to the specific needs of its members. These programs may includ e risk assessments, safety training, loss prevention strategies, and proactive measures to identify and mitigate potential risks. By selecting a JPA with strong risk control practices, you can enhance the overall safety culture of your organization and red uce the likelihood of accidents, injuries, or property damage.
Comprehensive training services are also vital in equipping your organization with the knowledge and skills necessary to handle potential risks and respond appropriately in critical situations. Look for a JPA that provides ongoing training programs, workshops, and educational resources to empower your team members and foster a culture of preparedness. By investing in training, you enhance your organization's ability to manage risks effectively and minimize the potential for costly incidents or errors.
Support services also play a significant role in assisting JPA members in navigating the complexities of insurance coverage and risk management. A reliable JPA should offer dedicated support personnel who can provide guidance, answer questions, and offer e xpert advice on various insurance -related matters.
This level of support ensures that your organization receives timely and accurate information, helping you make informed decisions and optimizing your risk management strategies.
Lastly, the quality of claims services is paramount when evaluating a JPA. In the unfortunate event of a claim, a responsive and efficient claims process can make a significant difference in minimizing disruptions and ensuring a swift resolution. A proven track record of handling claims effectively, offering timely communication, fair assessment, and expedited settlements cannot be overlooked. Effective claims services not only provide financial protection but also demonstrate the commitment of the JPA in supporting its members during challenging times.
In summary, when selecting a JPA, prioritizing good risk control, training, support services, and claims services is essential. These elements form the foundation of a strong risk management framework and can significantly contribute to the long -term success and stability of the City. Partnering with a trusted JPA and having the ability to select your own TPA provides the City with the peace of mind knowing your interests are being considered and protected.
30 30
VII. Conditions and Requirements of Participation
A. Prospective JPA Participation
All JPAs have conditions and requirements for participation in the pools they manage. These conditions and requirements may be expressed in several document forms including a Joint Powers Agreement, By - laws, a Memorandum of Understanding, or some similar document. Such documents define the purpose of the JPA, its governance and powers delegated, the relationship of the members, accounting for expenses, and rules and requirements for participation in the JPA. The controlling document, whatever the form, also defines responsibilities of membership and terms of participation.
Most JPA participation agreements have several common requirements, such as:
• A minimum participation period, usually three years;
• A withdrawal notice requirement ranging from 60 days to 1 year;
• Defined financial responsibilities for periods of participation, including an obligation to pay future assessments for prior years of participation even after withdrawal from the JPA;
• Terms for disposition of equities or fund balances remaining with the pool after departure, ranging from payout schedules to forfeiture of any balances remaining; and
• Terms for removing a member from a JPA or one of its programs.
In addition to the Joint Powers Agreements and Memoranda of Understanding, JPAs often have unwritten requirements for participation, withdrawal, and compliance with standards. Such requirements may be the result of governing board actions or rules and procedures adopted by the JPA. Some of the pertinent requirements for each of the prospective JPAs are shown below.
PERMA, CJPIA, PRISM, and CIRA as authorized by its joint-powers agreement, operates as a membership organization. Public agencies with good loss experience and risk management efforts are welcome to apply for membership. CJPIA and CIRA staff will visit the City to explain the programs and procedures. To process the membership application, a fee between $3,000 - $5,000 is required. The fee is refundable if the City is not admitted to membership. If admitted, the fee is applied toward the initial primary deposit.
Both follow a five-step underwriting process for prospective members:
1. Submittal of application through website;
2. Five to ten years of loss data and five years of payroll;
3. Underwriting questionnaire and on-site risk management evaluation;
4. Underwriting Committee review and recommendation to Executive Committee; and
5. Executive Committee final membership determination.
31 31
Participation in PRISM's programs involve less steps and much less time. Given PERMA’s notice of withdraw requirement is 6 months, the City should have ample time to evaluate prospective pool’s indications and decide whether to leave PERMA and join another JPA. Note if the City is going to move forward with obtaining indications in the Fall of 2024, those indications are rates based on the 2024/2025 coverage year and not for 2025/2026 year. Rates for the 2025/2026 coverage year will be developed in the early Spring 2025 before the new coverage term effective 7/1/2025.
B. PERMA Withdrawal
Because the City participates in PERMA and is evaluating withdrawing from participation, it is important to review the withdrawal provisions in the JPA Agreement. According to PERMA’s JPA Agreement, adopted on 3/4/2013 , the following outlines the withdrawal and effect of withdraw provisions:
*************************************************************************************** ARTICLE 19
CANCELLATION OR WITHDRAWAL
(a) A member organization may withdraw as a party to this Agreement upon thirty (30) days’ advance written notice to the Authority if it has never become a participant in any insurance program pursuant to Article 14, or if it has withdrawn from all insurance programs in which it was a participant, pursuant to (c) below.
(b) The Board of Directors may:
(1) Cancel, for reasonable cause, any member organization from this Agreement and membership in the Authority, on a vote of two-thirds of the quorum of the Board members. Such action shall have the effect of canceling the member organization's participation in all insurance programs of the Authority as of the date that membership is canceled, subject to the notice provisions below.
(2) Cancel any member organization's participation in an insurance program of the Authority, without canceling the member organization's membership in the Authority or participation in other programs, on a vote of two-thirds of the quorum of the Board members, plus a vote of two-thirds of the quorum of the members who represent member organizations participating in the program, subject to the notice provisions below.
The Board shall give ninety (90) days’ advance written notice of the effective date of any cancellation under the foregoing provisions. Upon such effective date, the member organization shall be treated the same as if it had voluntarily withdrawn from this Agreement, or from the program, as the case may be.
(c) Any member having completed three (3) years as a party to this Agreement may withdraw from its status as a participant in a program only at the end of a policy year for the program, and only if it gives the Authority at least six (6) months advance written notice of such action.
The Authority may assess an early-withdrawal charge for any such member that withdraws from a program without providing six (6) months advance written notice. The early-withdrawal charge is to be determined in the discretion of the Executive Committee based upon all costs and damages
32 32
resulting to the Authority because of the member’s withdrawal on short notice. The early-withdrawal charge shall not exceed the withdrawing member’s annual premium for the program from which it is withdrawing.
(d) A member organization which withdraws from all insurance programs of the Authority in which it was a participant and does not enter any program for a period of six (6) months thereafter shall be considered to have withdrawn as a party to this Agreement at the end of such period, and its membership in the Authority shall be automatically canceled as of that time, without action of the Board of Directors.
ARTICLE 20
EFFECT OF CANCELLATION OR WITHDRAWAL
(a) If a member organization withdraws from participation in an insurance program of the Authority or such participation is canceled, with or without cancellation of membership in the Authority, and such cancellation is effective before the end of the policy year for that program, the Authority shall promptly determine and return to the member organization the amount of any unearned premium payment from the member organization for the policy year, such amount to be computed on a pro rata basis from the effective date of cancellation. In addition, the Board of Directors may in its sole and absolute discretion determine and return to the member organization such fees, charges and pro rata share of assets as it may determine are due and owing to such member organization.
(b) Except as provided in (a) above, a member organization which withdraws or is canceled from this Agreement and membership in the Authority, or from any program of the Authority, shall not be entitled to the return of any premium or other payment to the Authority, or of any property contributed to the Authority. However, in the event of termination of this Agreement, such member organization may share in the distribution of assets of the Authority to the extent provided in Article
21. (c) Notwithstanding withdrawal or cancellation from any insurance program of the Authority, a member organization shall pay any premium charges which the Board of Directors determines are due from the member organization for losses and costs during the period in which the member organization was a participant in such program. Such charges may include any deficiency in a premium previously paid by the member organization, any premium surcharge assessed to the member organization and any additional amount of premium which the Board determines to be due from the member organization upon final disposition of all known or future claims arising from known or potential losses under the program during the organization's period of participation.
Any such premium charges shall be payable by the organization within thirty (30) days of billing by the Authority. The liability of the Authority for incurred, but not reported, claims shall be governed by the particular insurance program provisions.
***********************************************************************************
There are a couple of noteworthy provisions in PERMA’s withdrawal and effect of withdrawal provisions for the City to consider:
• The City may withdraw from membership from PERMA by providing a 6-month notice which would be no later than December 31, 2024;
• If the City provides less than 6 months’ notice of withdrawal, PERMA may assess an early withdrawal fee. The amount of fee is at the discretion of the Executive Committee but shall not exceed a
33 33
member’s premium for that insurance program from which they are withdrawing; • If the City does not rejoin PERMA within a 6-month timeframe following withdrawal, the membership is automatically cancelled;
• If the withdrawal date is effective before the new policy year, the City may be entitled to a pro rata return premium; and
• Even if the City provides timely notice of withdraw, they are still responsible for costs for all policy years participated which might include retroactive assessments for the current policy year and prior year assessments until all claims have been resolved.
34 34
C. A Word About Changing JPAs
Changing pools does not change obligations for prior claims and contributions to PERMA. Nor would it change future claims and losses. Only a risk management program designed to control risk and implemented within the City, can positively impact claims. Nevertheless, there are financial considerations associated with the basic underwriting approach used by a JPA. The City might or might not reduce its total cost of risk (JPA contributions, premiums, claims under retention, risk management services) by changing JPAs.
Changing JPA programs, and the underlying services and infrastructure attached to each program, could be disruptive internally in the short-term. The City's ability to navigate this transition without negative impacts on other operations may depend on allocation of resources within the City. Transitioning to another JPA could entail directly assuming some additional risks or result in higher self-insured retentions or deductibles.
With the City's prior loss history, this level of retention combined with the contribution estimates for the insurance programs , could result in savings after a thorough comparison is performed. Adverse loss experience could result in higher costs, while improved loss experience could increase the savings.
"Fit" is equally important as financing and services when selecting a pool. Ultimately an entity pays its own losses plus a premium for smoothing losses over time. Therefore, there are other factors that must be considered when choosing a JPA, including service, personal attention to the needs of the member, financial strength, and a sense of partnership. These can only be determined by spending some time with the prospective JPA.
A new JPA will have to seek its BOD's approval to accept the City. Applying to a JPA does not guarantee acceptance. In addition to a more thorough underwriting review than required to provide the indications we have used in this report, the prospective JPA will probably want to visit the City, inspect its facilities, and meet with its management. Even if a favorable report goes back to the JPA governing body, the members may not wish to accept the City and could overrule the field report recommendation.
Our initial review of City's loss history, exposures, ability to transfer risk, and basic information (i.e., payroll, property values) indicates that the City of Hesperia will surely be viewed as a valuable new member to any prospective JPA.
35 35
VIII. Road Map for Moving Forward
A. Plan of Action
From interviews with each JPA, the following information was gathered about the membership process and length of time to underwrite the City, obtain indications, and to obtain final liability quotes for the 2025/2026 coverage year.
JPA Suggested Month to Initiate Applications and Process for Membership Length of Time to Obtain Firm Terms
PRISM
November 2024
• Complete application
December 2024
• Request desired SIR ranges by December 1, 2024
February 2025
• February 2025 final request for desired SIR prior
to March 2025 board meeting
• Whole process takes 2- 3 months
• Indication – In 3 to 4 weeks
• Quote process - after March 2025 board meeting
• Final quote – by May 2024
• SIRs above $100,000 require underwriting
committee approval
CJPIA
September - November 2024
• Complete underwriting submission to include
application, 10-year exposure data; currently
valued 10-year loss history, claim notes on large
liability losses, CAFRs, and actuarial studies
• After review of data, will release indication at
various SIRs
• Required on site risk management evaluation
followed by report to underwriting committee
• Underwriting committee recommends to
executive committee
February – April 2025
• Final quotes not released until updated loss runs
in Spring 2025 to check on loss development
• Whole process takes 4 – 5 months
• Will release initial rate indications at various SIR
levels in 2-3 weeks following complete underwriting
submission
• Required on site risk management evaluation in
January or February 2025 if like indications
• Risk management report goes to board in March
2025
• Underwriting assesses loss development from
November 2024 to April 2025 then finalizes rates in
April 2025 for the coming policy year.
CIRA
September - November 2024
• Complete underwriting submission to include
application, 5-year exposure data (10-years
preferred for excess providers); currently valued
5-year loss history (10-years preferred for excess
providers), claim notes on large liability losses,
CAFRs, and actuarial studies
• After review of data, actuarial team will
calculate the ex-mod and rates
• Once data is provided back, it will be provided to
the City and CIRA with both parties determining
if it would be a fit.
• Up to 6 Months, depending on when Board of
Directors meets
• Once data received, will release quote within 5
business days
• If quote is accepted, an application and on-site visit are scheduled – the visit takes about 2-3 business
days
• Final steps are underwriting committee approval,
executive committee approval, and Board approval.
The executive committee meets quarterly and the
Board semi-annually.
36 36
• If both parties agree to move forward, an
application will need to be completed.
• An underwriting visit will be scheduled to
conduct a risk assessment
January -April 2025
• The underwriting committee (UC) meeting will
be scheduled and the application, risk
assessment, loss data, and financial information
will be reviewed.
• If UC recommends approval, it will go to the
Executive Committee (EC) for their approval
• Upon EC’s recommendation to approve, it goes
to the Board of Directors for final approval
37 37
B. Implementation Timeline
Unless the City wants to invoke its right to withdrawal early from PERMA, the following timeline assumes new JPA membership for the 2025/2026 policy year. The process for obtaining quotes for the 202 5/2026 coverage year will be much more simplified and shorter with PRISM . The process for JPA membership for CJPIA and CIRA will be much more involved and require more lead time due to the underwriting process required for new membership. And although the City may obtain approval to join certain JPAs by March or April 2025, final rates may not be known until April – May 2025. This could present a timing issue given the 6-month notice requirement of withdraw from PERMA. Many JPAs may know the costs of participating in the pooled layer, however, may not have firmed up reinsurance costs for the excess liability layers until May 2025.
The following are suggested tasks and implementation timelines to allow enough time for prospective JPAs to underwrite the City, vet the options, and decide about liability coverage for the 202 5/2026 coverage year.
Timeline
Task
April 2024
• Presentation of Phase 1 report to the City’s designed staff • Vet report conclusions and recommendations
• Finalize prospective JPA short list
• Assess amount of effort needed to approach JPAs for indications, underwriting, and final quotes / terms
July – August 2024
• Begin Phase 2 study
• Gather exposure data history, updated 10 -year loss runs, download JPA applications
• Complete prospective JPA applications
• Submit applications, exposure history, loss runs, loss history, CAFRS, and actuarial studies to JPA short list
September –
December 2024
• Prospective JPA site visits, information gathering and interviews • Obtain initial indications from prospective risk pools based on 202 4/25 rates • Deadline for notice of intent to withdrawal from PERMA is 12/31/2024
January 2025 –
February 2025 *
• Participate in underwriting processes with prospective JPAs for 2025/2026 policy year
• Continual exchange of requested information and meetings with prospective JPAs
March 2025
• JPAs conduct board meetings and discuss prospective membership • Receive and analyze quotes and SIR options from prospective JPAs following March JPA board meetings
April 2025
• More JPA board meetings
• Receive and analyze quotes and SIR options from prospective JPAs • Make preliminary JPA selection
38 38
May 2025
• Make final JPA selection and SIR level after rates are finalized • Board resolution to change JPAs
June 2025
• Meetings with new JPA
• Vet and update City procedures to reflect changes in JPA, TPA, claims handling instructions, and any other new procedures with City’s internal risk management staff and city attorneys.
July 2025
• Begin coverage with new JPA
* Only complete steps starting in January 2025 and thereafter if notice of intent to withdrawal is submitted to PERMA on 12/31/2024.
39 39
Appendix A
Persons Interviewed
40 40
• Casey Brooksher, Director of Administrative Services, City of Hesperia • Anne Duke, Finance, City of Hesperia
• Keith Cheong, Finance, City of Hesperia
• Rachel Molina, City Manager, City of Hesperia
• Pam Lee, City Attorney, City of Hesperia
• Mark Faherty, Public Works, City of Hesperia
• Brian Blackwell, Public Works, City of Hesperia
• Jeremy McDonald, Public Works, City of Hesperia
• Rita Perez, Human Resources, City of Hesperia
• Amanda Rose, Human Resources, City of Hesperia
• Erike Young, Deputy General Manager, CIRA
• Olga Berdial, Communications Director, CJPIA
• Sarah Bishop, Underwriting Manager, PRISM
41 41
Appendix B
City of Hesperia Risk Profile
42 City of Hesperia
Risk Profile
City Population
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
City service population 100,956 (estimate) 102,164 (estimate) 102,503 (estimate) Service area 74.77 Miles 74.77 Miles 74.77 Miles
Employee Count (#)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Elected Officials 5 5 5
Appointed Officials 5 5 5
Volunteers 5 8 8
Full Time 166 181 182.46
Part time 6.9 11.85 12.74
Payroll ($)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Actual Payroll $20,676,611.15 $22,000,315.76 $7,204,026.08 – First Quarter Budgeted Payroll $20,430,571.00 $24,043,555.00 $25,944,396.00
Classification of Payroll ($)
FY 2021/2022 FY 2022/2023 Projected FY 2023/2024
Police Contract with county Contract with county Contract with county Fire Contract with county Contract with county Contract with county All City Employees See above totals See above totals See above totals
43 Operating Expenditures ($)
FY 2021/2022 Actual FY 2022/2023 Budget Projected FY 2023/2024 Total Budget $81,298,524 $133,605,549 $136,996,564
Less Capital Improvements $17,450,453 $62,347,052 $59,567,008 Net Operating Expenditures $63,848,070 $71,258,497 $77,429,556
Special Exposures (if any)
Aquatic center(s) None
Acreage for City Parks City owns the park behind City Hall (7.259 acres) however it is maintained by the Hesperia Parks & Rec District
City-sponsored special events Clean Up Day,
Landfill and / or Recycling center(s) None owned by the City Water and sewage Sewer – 138.3 miles of sewer main , 3.3 miles are pressurized; Water – 592 miles of water main; Recycled Water – 20.35 miles of recycled water main.
Miles of City Roads 500 miles
# Sworn Police Officers Contracted with County of San Bernardino # Firefighters Contracted with County of San Bernardino Vehicles (Police) None - Contracted with County of San Bernardino Vehicles (Fire) None - Contracted with County of San Bernardino Commercial Vehicles 112 City Vehicles, 17 drivable equipment such as forklifts, scissor lifts, backhoes; 9 trailered equipment such as Ditch Witch, asphalt zipper, roller Other: City Owned Golf Course – 211 acres
Notes:
44 44
Appendix C
JPA Member Lists
45 45
PRISM Members
County Members
County Name Member Since
Alameda County 6/1/1988
Alpine County 7/1/1986
Amador County 11/1/1979
Butte County 11/1/1979
Calaveras County 11/1/1979
Colusa County 7/1/1986
Contra Costa County 10/1/1994
Del Norte County 7/1/1980
El Dorado County 5/1/1992
Fresno County 11/1/1979
Glenn County 7/1/1986
Humboldt County 11/1/1979
Imperial County 7/1/1986
Inyo County 11/1/1979
Kern County 5/31/1989
Kings County 7/1/1980
Lake County 11/1/1979
Lassen County 7/1/1980
Madera County 4/1/1980
Marin County 7/1/1992
Mariposa County 7/1/1986
Mendocino County 11/1/1979
Merced County 7/1/1986
Modoc County 7/1/1985
Mono County 1/23/1993
Monterey County 7/1/1992
Napa County 7/1/1988
Nevada County 11/1/1979
Orange County 3/31/2009
Placer County 7/1/1980
Plumas County 7/1/1984
Riverside County 7/1/1984
Sacramento County 4/1/1992
San Benito County 3/18/1993
San Bernardino
County
3/31/2014
San Diego County 6/15/1993
San Joaquin County 7/1/1995
46 46
County Name Member Since
San Luis Obispo
County
11/1/1979
Santa Barbara County 11/1/1979
Santa Clara County 6/30/1984
Santa Cruz County 11/1/1979
Shasta County 11/1/1979
Sierra County 7/1/1986
Siskiyou County 10/8/1985
Solano County 7/1/1981
Sonoma County 11/1/1979
Stanislaus County 1/1/1986
Sutter County 7/1/1986
Tehama County 11/1/1979
Trinity County 7/1/1980
Tulare County 6/30/1988
Tuolumne County 10/1/1980
Ventura County 9/21/2004
Yolo County 7/1/1999
Yuba County 7/1/1981
City Members
City Name Member Since
City of Alameda 1/1/2010
City of Albany 7/1/2003
City of American Canyon 1/1/2017
City of Atwater 4/1/2010
City of Bakersfield 7/1/2007
City of Baldwin Park 7/1/2019
City of Beaumont 7/1/2015
City of Bell 7/1/2006
City of Belmont 12/1/2004
City of Berkeley 12/31/2011
City of Buena Park 11/1/2010
City of Burlingame 10/1/2003
City of Calabasas 1/1/2010
City of Calexico 1/1/2016
City of Capitola 1/1/2014
City of Carmel by the Sea 7/1/2006
City of Carson 8/31/2017
City of Chico 8/1/2010
City of Chula Vista 10/1/2003
47 47
City Name Member Since
City of Citrus Heights 7/1/2006
City of Clovis 1/1/2017
City of Compton 7/1/2021
City of Concord 7/1/2003
City of Corona 7/30/2003
City of Coronado 3/31/2016
City of Costa Mesa 1/1/2011
City of Covina 1/1/2004
City of Cupertino 1/1/2004
City of Cypress 1/1/2011
City of Daly City 2/1/2003
City of Del Mar 11/1/2003
City of Dixon 7/1/2003
City of Downey 7/1/2006
City of El Cajon 7/1/2002
City of El Centro 2/1/2010
City of El Monte 7/1/2006
City of Elk Grove 7/1/2008
City of Encinitas 3/31/2016
City of Escalon 8/1/2010
City of Escondido 10/1/2003
City of Fairfield 7/1/2003
City of Fontana 5/1/2005
City of Foster City 1/1/2014
City of Fountain Valley 7/1/2018
City of Fremont 7/1/2006
City of Galt 1/1/2014
City of Garden Grove 7/1/2005
City of Gardena 7/1/2018
City of Glendale 7/1/2004
City of Goleta 1/1/2010
City of Hanford 7/1/2012
City of Hawthorne 7/1/2003
City of Hayward 7/1/2012
City of Hesperia 7/1/2002
City of Huntington Beach 1/1/2010
City of Imperial Beach 7/1/2003
City of Ione 9/1/2010
City of Irvine 1/1/2008
City of Lake Forest 1/1/2024
City of Lancaster 8/1/2003
City of Lemon Grove 1/1/2004
48 48
City Name Member Since
City of Lindsay 7/1/2003
City of Live Oak 8/1/2010
City of Livermore 1/1/2011
City of Loma Linda 1/1/2022
City of Lompoc 7/1/2003
City of Los Alamitos 7/1/2016
City of Los Altos 7/1/2010
City of Madera 7/1/2003
City of Manhattan Beach 3/1/2017
City of Maywood 1/1/2010
City of Menlo Park 1/1/2015
City of Merced 10/1/2005
City of Mill Valley 8/1/2010
City of Millbrae 7/1/2005
City of Mission Viejo 3/1/2010
City of Modesto 7/1/2017
City of Montebello 7/1/2006
City of Monterey Park 7/1/2003
City of Moreno Valley 7/1/2003
City of Murrieta 6/1/2011
City of Napa 7/1/2002
City of National City 10/1/2003
City of Needles 1/1/2010
City of Norco 7/1/2003
City of Oakland 7/1/2002
City of Oceanside 10/1/2003
City of Oroville 10/1/2010
City of Oxnard 7/1/2002
City of Pacifica 1/1/2014
City of Palmdale 7/1/2013
City of Palo Alto 7/1/2003
City of Pasadena 7/1/2020
City of Paso Robles 1/1/2011
City of Perris 10/1/2010
City of Petaluma 7/1/2021
City of Pico Rivera 7/1/2017
City of Pittsburg 9/25/2017
City of Pleasanton 7/1/2011
City of Pomona 7/1/2008
City of Port Hueneme 1/1/2012
City of Rancho Cordova 7/1/2003
City of Rancho Mirage 7/1/2013
49 49
City Name Member Since
City of Rancho Santa Margarita 6/1/2010
City of Redding 5/1/2007
City of Redlands 7/1/2017
City of Redondo Beach 7/1/2017
City of Redwood City 7/1/2005
City of Rialto 7/1/2003
City of Richmond 4/18/2009
City of Ridgecrest 7/1/2006
City of Roseville 1/1/2016
City of Sacramento 7/1/2005
City of San Bernardino 1/1/2011
City of San Bruno 7/1/2013
City of San Buenaventura (Ventura) 7/17/2002
City of San Clemente 7/1/2005
City of San Diego 7/1/2003
City of San Jacinto 9/1/2010
City of San Leandro 1/1/2014
City of San Mateo 8/12/2019
City of San Ramon 1/1/2016
City of Santa Clara 7/1/2004
City of Santa Rosa 1/1/2005
City of Santee 3/31/2016
City of Shafter 1/1/2018
City of Simi Valley 7/1/2003
City of Solana Beach 10/1/2003
City of South Pasadena 7/1/2014
City of South San Francisco 1/1/2004
City of Stanton 9/1/2010
City of Stockton 7/1/2003
City of Sunnyvale 7/1/2004
City of Thousand Oaks 7/1/2021
City of Torrance 7/1/2002
City of Vacaville 10/1/2010
City of Vallejo 7/1/2018
City of Visalia 1/1/2005
City of Vista 3/31/2016
City of Walnut Creek 1/1/2010
City of Watsonville 7/1/2013
City of West Covina 1/1/2017
City of West Sacramento 1/1/2011
City of Westminster 7/1/2018
City of Whittier 7/1/2006
50 50
City Name Member Since
City of Yuba City 1/1/2008
Town of Apple Valley 1/1/2024
Town of Colma 8/21/2004
Town of Yountville 1/1/2011
County Ops Members
County Ops Name Member Since
Alameda Health System 7/1/2002
Bay Area Housing Authority RMA (BAHARMA) 5/1/2005
Los Angeles County Development Authority (LACDA) 7/1/2003 Sonoma County Employees' Retirement Association (SCERA) 7/1/2004
Educational Members
Educational Name Member Since
Berkeley Unified School District 1/1/2004
Butte Schools Self-Funded Programs 5/1/2023
California Schools JPA (CSRM) 7/1/2002
California State University Risk Management Authority (CSURMA) 1/1/2015 Campbell Union School District 7/1/2008
Central Region School Insurance Group (CRSIG) 7/1/2014
College of the Law, San Francisco 7/1/2004
Evergreen Elementary School District 7/1/2006
Huntington Beach Union High School District 7/1/2008
Lake Elsinore Unified School District 7/1/2003
Los Angeles County Office of Education (LACOE) 1/1/2012 Los Angeles Unified School District Risk Management Authority (LAUSD RMA) 7/1/2016 Oakland Unified School District 7/1/2018
Pasadena USD 7/1/2010
Redondo Beach Unified School District 7/1/2013
San Diego Unified School District 7/1/2004
San Jose Unified School District 12/1/2002
San Mateo County Schools Insurance Group (SMCSIG) 7/1/2006 Santa Clara County Office of Education (SCCOE) 7/1/2013 Schools Excess Liability Fund (SELF) 1/1/2012
Self Insured Risk Management Authority (SIRMA) 10/1/2002 South Bay Area Schools Insurance Authority (SBASIA) 7/1/2010 Torrance Unified School District 7/1/2002
Tri-County Schools Insurance Group (TCSIG) 7/1/2023
Upland Unified School District 7/1/2014
West San Gabriel Liability and Property JPA 7/1/2002
West San Gabriel WC JPA 7/1/2003
51 51
IHSS Members
IHSS Name Member Since
Contra Costa County IHSS Public Authority 10/29/2003
Del Norte IHSS Public Authority 1/8/2003
Imperial County IHSS Public Authority 6/4/2003
Kern County In Home Supportive Services Public Authority 1/1/2003 Riverside County IHSS Public Authority 11/1/2002
San Benito County IHSS Public Authority 11/12/2003
San Bernardino IHSS Public Authority 1/7/2003
San Diego County IHSS Public Authority 11/4/2003
Shasta IHSS Public Authority 1/11/2003
Sutter IHSS Public Authority 1/8/2003
Sutter IHSS Public Authority 1/8/2003
Special Districts Members
Special Districts Name Member Since
ACCEL 7/1/2002
Amador Transit 7/1/2004
Bay Area Air Quality Management District 8/1/2012
California Fair Services Authority 7/1/2003
California Intergovernmental Risk Authority (CIRA) 7/1/2021 California Mental Health Services Authority (CalMHSA) 7/1/2011 California State Senate 10/1/2012
Capitol Area Development Authority (CADA) 7/1/2003
CAPRI 7/1/2002
Casitas Municipal Water District 8/1/2002
Catalina Island Medical Center 1/1/2012
CenCal Health 1/1/2021
Central Contra Costa Sanitary District 7/1/2016
Central County Fire Department 6/21/2010
Central Sierra Child Support Agency 11/14/2002
Coachella Valley Association of Governments (CVAG) 9/1/2010 Council of San Benito County Governments 12/20/2002
Dublin San Ramon Services District 1/1/2012
East Bay Regional Park District 6/1/2001
Exclusive Risk Management Authority of California (ERMAC) 7/1/2005 Fairfield-Suisun Sewer District 1/1/2019
Gold Coast Transit District 4/1/2004
Golden Empire Transit District 7/1/2005
Golden State Risk Management Authority (GSRMA) 7/1/2001 Great Basin Unified Air Pollution Control District 6/1/2010
52 52
Special Districts Name Member Since
Housing Authority of the County of Riverside 10/29/2003 Humboldt Transit Authority (HTA) 4/1/2014
Inland Empire Health Plan 1/1/2011
Inland Empire Utilities Agency 1/1/2015
Irvine Ranch Water District (IRWD) 9/1/2002
Kern County Hospital Authority 7/1/2016
Kings County Area Public Transit Agency 7/1/2005
Kings Waste & Recycling Authority 7/1/2003
Local Agency WC Excess JPA (LAWCX) 7/1/2003
Lompoc Valley Medical Center 1/1/2020
Los Angeles County Law Library 7/1/2019
Marin County Transit District 12/6/2002
Merced Irrigation District 1/1/2022
Midpeninsula Regional Open Space District 7/1/2002
Monterey Bay Area Self Insurance Authority (MBASIA) 7/1/2010 Monterey County Housing Authority 5/1/2018
Monterey County Water Resource Agency (MCWRA) 7/31/2018 Monterey Salinas Transit 11/1/2004
Morongo Basin Transit Authority dba Basin Transit 7/1/2004 Mountain Communities Healthcare District 10/1/2007
Municipal Pooling Authority (MPA) 7/1/2003
Napa Sanitation District 1/1/2011
Northern CA Cities Self Insurance Fund (NCCSIF) 7/1/2003 Northern California Power Agency (NCPA) 10/1/2018
Northern California Special Districts Insurance Authority (NCSDIA) 7/1/2001 OC Sanitation District 7/1/2003
Omnitrans 9/14/2006
Orange County Fire Authority 3/1/2007
Orange County Transportation Authority 1/1/2012
Palo Verde Valley Health Care District Hospital 1/23/2013 Placer County Water Agency 1/1/2016
Pleasant Hill Recreation and Park District 1/1/2011
Port of Oakland 3/1/2013
PRISM 10/1/1979
Public Agencies Self Insurance System (PASIS) - San Diego 7/1/2002 Public Entity Risk Management Authority (PERMA) 7/1/2008 Public Entity Risk Management Authority (PERMA) Administration 7/1/2008 Regional Council of Rural Counties 1/1/2010
Riverside Transit Agency 10/1/2006
Sacramento Area Flood Control Agency (SAFCA) 6/1/2005
Sacramento Regional Transit District (SACRT) 7/1/2021
Sacramento-Yolo Mosquito and Vector Control District 1/1/2015
53 53
Special Districts Name Member Since
San Bernardino Municipal Water Department 1/1/2015
San Diego County Water Authority 1/1/2017
San Diego Housing Commission 6/15/1993
San Diego Metropolitan Transit System 3/31/2008
San Mateo Consolidated Fire Department 1/13/2019
Santa Barbara Metropolitan Transit District 1/1/2005
Santa Clara County Central Fire Protection District 10/7/1999 Santa Clara County Housing Authority 7/1/2017
Santa Clara County Library District JPA 1/29/2015
Santa Clara County Vector Control District 11/30/2006
Santa Clara Valley Water District 4/1/2023
Santa Cruz County Fire Agencies Insurance Group 7/1/2002 Santa Cruz Metro Transit District 10/24/2003
SLORTA JPA 1/1/2021
Solano Transportation Authority 12/29/2007
Sonoma Marin Area Rail Transit 1/1/2017
South Coast Air Quality Management District 9/1/2008
Special District Risk Management Authority (SDRMA) 6/1/2003 Tahoe Transportation District 7/1/2016
Transportation Corridor Agencies 1/1/2010
Trindel Insurance Fund 7/1/2001
Turlock Irrigation District 7/1/2008
Union Sanitary District 1/1/2020
Yolo County Public Agency Risk Management Insurance Authority (YCPARMIA)
12/31/2003
54 54
CIRA Members
CIRA Member Name CIRA Member Name, Continued
City of Amador City City of South Lake Tahoe
City of Arcata City of St. Helena
City of Avalon City of Tehama
City of Belvedere City of Trinidad
City of Blue Lake Town of Truckee
City of Calimesa City of Twentynine Palms
City of Calistoga City of Ukiah
City of Citrus Heights City of Watsonville
City of Clearlake City of Wheatland
City of Cloverdale Wheatland Fire
City of Coalinga City of Willits
Confire Regional Emergency Communication City of Wilodmar City of Cotati Town of Windsor
City of Eureka Town of Yountville
City of Ferndale City of Yucaipa
City of Foresthill Fire Town of Yucca Valley
City of Fort Bragg
City of Fortuna
City of Grass Valley
City of Healdsburg
City of Highland
City of Lakeport
City of Menifee
City of Mosquito Fire
City of Nevada City
City of Placentia
City of Placerville
City of Plymouth
City of Point Arena
City of Rancho Cucamonga
Rancho Cucamonga Fire Protection District
City of Rancho Santa Margarita
City of Rohnert Park
City of San Juan Bautista
City of Sebastopol
City of Sierra Madre
City of Sonoma
55 55
PERMA Members
Member Year Joined
City of Barstow 1985-86
City of Perris 1985-86
City of Westmorland 1985-86
City of Banning 1986-87
City of Blythe 1986-87
City of Cathedral City 1986-87
City of Coachella 1986-87
City of Desert Hot Springs 1986-87
City of Holtville 1986-87
City of Norco 1986-87
City of Rancho Mirage 1986-87
City of San Jacinto 1986-87
SunLine Transit Agency 1986-87
City of Murrieta 1991-92
March Joint Powers Authority 1996-97
MD&MIWMA 1996-97
Victor Valley EDA 1996-97
Victor Valley Transit Authority 1996-97
Palo Verde Valley Transit Agency 1997-98
City of Victorville 1997-98
IVECA 2002-03
City of La Mesa 2002-03
Palm Springs Aerial Tramway 2005-06
City of Moreno Valley 2009-10
City of Hesperia 2010-11
ICTC 2010-11
City of Eastvale 2010-11
City of Canyon Lake 2011-12
City of Jurupa Valley 2011-12
SCIT&DC Gov’t Training Agency 2013-14
City of Colton 2021-22
56 56
CJPIA Members
CJPIA Member Name CJPIA Member Name, Continued
Agoura Hills Eastern Sierra
Alhambra Transit Authority
Aliso Viejo El Centro
Apple Valley Fountain Valley
Area E Disaster Management Fillmore
Arroyo Grande Gateway Cities
Artesia Council of Governments
Atascadero Goleta
Azusa Grand Terrace
Bell Gardens Grover Beach
Bellflower Guadalupe
Big Bear City Community Services District Hawaiian Gardens Big Bear Fire Authority Hemet
Big Bear Lake Hermosa Beach
Bishop Hidden Hills
Black Gold Imperial
Cooperative Library System Indian Wells
Bradbury Indio
Brawley Irwindale
Buellton La Cañada Flintridge
Calabasas La Habra Heights
Agoura Hills/Calabasas Community Center LA IMPACT
Camarillo La Mirada
Carpinteria La Palma
Cerritos La Puente
Chino Hills La Quinta
Claremont La Verne
Coachella Valley Laguna Hills
Association of Governments Laguna Niguel
Coachella Valley Laguna Woods
Conservation Commission Lake Elsinore
Coastal Animal Services Authority Lake Forest
Commerce Lakewood
Dana Point LA-RICS
Desert Recreation District Lawndale
Diamond Bar Lemon Grove
Duarte Loma Linda
57 57
CJPIA Member Name, Continued CJPIA Member Name, Continued Lomita San Gabriel
Malibu San Juan Capistrano
Mammoth Lakes San Luis Obispo
Midpeninsula Regional San Marcos
Open Space District San Marino
Mission Viejo Santa Clarita
Monrovia Santa Fe Springs
Monterey Peninsula Santa Paula
Regional Park District Seal Beach
Moorpark Seaside
Morro Bay Seaside County Sanitation District
Mountain Area Signal Hill
Regional Transit Authority Solvang
Needles South El Monte
Norwalk Southeast Area
Ojai Animal Control Authority
Orange County Southern California
Council of Governments Association of Governments
Pacific Grove Stanton
Palm Desert Temple City
Palos Verdes Estates Ventura Port District
Palos Verdes Peninsula Villa Park
Transit Authority Vista
Paramount Walnut
Paso Robles West Cities Police Comm. Center
Pismo Beach West Covina
Pomona Valley West Hollywood
Transportation Authority Westlake Village
Port Hueneme
Poway
Rancho Palos Verdes
Rolling Hills
Rolling Hills Estates
Rosemead
Rossmoor Community Services District
San Clemente
San Dimas
Appendix D
JPA Coverage Comparisons
59 Liability
Liability PERMA CIRA PRISM CJPIA
Limit $25M
$4M (Pool Layer)
$5M xs $5M (Starstone)
$9M xs $10M (various
quota share insurers)
$6M xs $19M (various
quota share insurers)
(optional Excess Liability
program above $25M to
$50M)
$10M xs $25M (Allied
World)
$5M xs $35M (Great
American)
$10M xs $40M (Munich Re)
$40M
$1M (Pool Layer)
$25M
$5M (Pool Layer)
$5M xs $5M (Various
quota share)
$9M xs $10M (Various
quota share)
$6M xs $19M (Various
quota share)
(optional Excess Liability
program above $25M)
$30M (Primary Program)
$3M (Pool Layer)
$3M xs 3M (Various quota
share)
$4M xs $6M (Various quota
share)
$10M xs $10M (Various
quota share)
$10M xs $20M (Various
quota share)
$50 M (Excess Program)
$15M xs $30M (Various
quota share)
$5M xs $45M (Various quota
share)
Pool Retention $1M $1M $5M $3M
Member Retentions $5K to $500K, with Hesperia’s
current retention at $50K
$5K to $750K $10K to $1M
(Primary, GL1 and GL2)
$0 (Primary Program)
$150K, $250K, $500K, $750K,
or $1M (Excess Program)
Coverage Programs Liability includes:
Bodily Injury
Property Damage
Personal Injury
Public Officials E&O
Ancillary Coverages:
Crime
Special Events
Vendors/Contractors
Liability
Workers’ Compensation
General Liability
Workers’ Compensation
Property through PRISM
Special Events
Ancillary Coverages:
Crime
Employee Benefits
Volunteer Coverage
Vendors/Contractors
Liability
Primary Liability
Excess Liability
Primary Workers'
Compensation
Excess Workers'
Compensation
Property
Miscellaneous
Aviation/Airport
Cyber
Equipment
Maintenance
Legal obligations to pay as
damages by reason of tort
liability imposed by law
because of one or more of
these defined damages:
Bodily Injury
Property Damage
Personal Injury
Public Officials Errors and
Omissions
Broadcast/Publication Injury
Employment Practices Injury
60 Liability PERMA CIRA PRISM CJPIA
Crime
Fiduciary
Pollution
Special Events
Special Property and
Liability
Watercraft
Catastrophic Inmate
Medical
Master Rolling Owner’s
Protective Professional
Indemnity
Master Course of
Construction
Vendor/Contractor
Program
Employee Benefits Admin.
Liability
Employment Practices
Liability (EPLI)
$1M (optional Employment
Practices program above $1M
to $50M)
$250K (optional Employment
Practices program up to $1M
with ERMA and excess
coverage available above
ERMA)
Available in GL1 and GL2 Primary and Excess liability
programs
Group Purchase
Programs
Auto Physical Damage, Cyber,
Property, Boiler and
Machinery, Pollution, Deadly
Weapons
Crime, Employee Benefits,
Volunteer Coverage
Vendors/Contractor’s Liability
21 Miscellaneous, ancillary
group purchase options
Property, Earthquake, Flood,
Mechanical Breakdown,
Pollution Legal Liability, Crime
Coverage, Special Events
Subsidence / Earth
Movement
Claims arising out of or in
connection with an earthquake
or series of related
earthquakes shall be deemed
to arise out of one Occurrence.
Not specifically outlined in
MOC.
Excluded - "To property
damage arising out of
subsidence"
Excluded - "Any Claim of
property damage directly or
indirectly arising out of, caused
by, resulting from, contributed
to or aggravated by the
settling, sinking, slipping,
falling away, caving in, shifting,
eroding, mud flow, rising,
tilting, or any other subsidence
or movement of land."
61 Liability PERMA CIRA PRISM CJPIA
Settlement Authority The Authority shall have no
duty to assume the control of
investigation or defense of any
claim unless the Retained Limit
is zero. However, the Authority
shall have the right to assume
the control of the negotiation,
investigation, defense, appeal
or settlement of any claim
which the Authority
determines, in its own
discretion, to have a
reasonable probability of
resulting in an Ultimate Net
Loss exceeding the Retained
Limit. The Covered Party shall
fully cooperate in any matters
pertaining to such claim or
proceeding.
For any Claim that creates the
potential for the recovery of
Damages to which this
Memorandum applies, the
Authority shall have the duty
to pay Defense Costs upon
satisfaction of the Retained
Limit. The Authority shall have
the right to defend any such
Claim or Suit against a Covered
Party if the final judgment or
settlement is likely to result in
an Ultimate Net Loss in excess
of the Retained Limit. The
Authority shall have no
obligation to defend or
contribute to the defense of
uncovered Claims, including
uncovered Claims contained in
a suit that contains covered
Claims.
The Authority has no duty
to defend under the
Memorandum. The
Authority; however, shall
have the right, but not the
duty, to associate itself, at
its own cost, with the
covered party, in the
control, investigation,
defense or appeal of any
claim or suit which, in the
opinion of the Authority, is
or may be covered by the
Memorandum. The
covered party shall fully
cooperate in all matters
pertaining to such claim or
suit.
Primary Program - Although
claims are managed through a
collaborative process, the
Authority retains ultimate
settlement authority.
Excess Program - Members
retain settlement authority
over claims within their layer,
except for certain defined
claim types that have
catastrophic potential.
Members retain the right to
select defense counsel from
the Authority's pre-approved
panel.
Defense Costs If the Authority assumes
control of the handling of a
claim, the Covered Parties shall
pay at the direction of the
Authority all Defense Costs
incurred by the Authority and
any sum necessary for the
settlement of a claim, or to
satisfy liability imposed by law,
up to the applicable Retained
Limit.
If the Authority advances
Defense Costs within the
Retained Limit, the Covered
Party shall promptly reimburse
the Authority upon request.
Inside.
"The Authority's liability
for excess defense costs is
subject to, and not in
addition to, the Authority's
limit of liability" (MOC pg.
1)
Inside.
Limit is "inclusive of Defense
Costs" (MOC)
62 Liability PERMA CIRA PRISM CJPIA
Participation
Requirements
Mandatory participation Mandatory participation Optional participation.
Requirements if choose to
participate include:
maintain loss prevention
program, actuarial study
every 3 yrs., annual loss
data submissions,
compliance with EIA's
Claims Admin standards.
Mandatory participation
Dispute Resolution The decision to assume control
of a claim shall be made by an
executive committee
appointed by the Board of
Directors. Such decision may
be appealed to the Board of
Directors. The results of such
appeal shall be final and
binding, and shall not be the
subject of any further appeal,
arbitration or court action.
In the event of a disagreement
regarding the assignment of
counsel, the Covered Party
retains the right to appeal to
the Board of Directors, whose
decision shall be final. If either
the Covered Party or the party
identified in the Covered
Contract refuses to have such
party(s) be defended by the
counsel assigned by the
Authority, then the obligation
of the Authority to contribute
to Defense Costs arising from
such Claim or Suit shall be
limited to such amounts as
would be incurred if counsel
selected from the Panel
Counsel list were assigned the
defense of such Claim or Suit.
(1) Written request; (2)
Committee appeal; (3)
Executive Committee
appeal; (4) Arbitration; (5)
Litigation
(source: bylaws)
(1) Written notice to EC; (2)
Appeals Committee; (3)
Potential to reopen with
certain circumstances; (4)
Arbitration
(source: MOC pg. 25)
63 Liability PERMA CIRA PRISM CJPIA
Notable Exclusions Aircraft and Airport
Radon and Asbestos
Failure to Perform/Breach of
Contractual Obligation
besides Covered Contract
Indemnity Obligation
Dam Failure
Claims by Employees,
Employment Related Claims
Fiduciary Liability
Workers’ Compensation
ERISA
Bid Specifications/Cost
Overruns
Failure to Supply Utilities
Punitive, Exemplary, Multiple
Damages
Criminal Acts
Land Use Regulation and/or
Planning
Eminent Domain,
Condemnation Proceedings,
Inverse Condemnation
Hospital, Health Care, Medical
Clinic Facility, Except
Emergency Services
Nuclear Material
Pollutants
Taxes, Fees, Fines, Leins,
Assessments Disputes
Automobile, Motorcycle,
Watercraft Racing
Additional Covered Party’s
Sole Negligence
Aircraft or Airport Operations,
Except Drones
Antitrust or Restraint of Trade
Bounce House
Breach of Contract
Contractual Liability
Dam Failure
Disability Accommodation
Expenses
Employee Benefit Plans
Employee Injury
Estimates, Plans, Contract
Awards
Failure to Supply Utilities
Fiduciary Liability
Fines, Penalties, Punitive
Damages
Impairment or Loss of
Property
Knowingly False Statements
Labor Disputes and Class
Actions
Land Use and Other Regulation
Medical and Health Care
Operations with Limited
Coverage
Motorized Racing Contest
Nuclear
Pollution (limited)
Property in Covered Party’s
Control
Refund of Taxes, Fees,
Aircraft or Airport
Operations and
Watercraft
Workers’ Compensation
Property in the Covered
Party’s Control
Condemnation and Land-
Use Regulation
Pollution (limited)
Failure to Supply Utilities
Dam Failure
Fiduciary Liability
Fines, Penalties and
Punitive Damages
Antitrust or Restraint of
Trade
Contractual Liability
Estimates, Plans and
Contract Awards
EPLI
Medical Care Activities
with Limited Coverage
ERISA
Aircraft or Airport Operations
and Watercraft
Workers’ Compensation
Property in the Covered Party’s
Control
Condemnation and Land-Use
Regulation
Pollution with Limited
Exceptions
Failure to Supply Utilities
Dam Failure
Fiduciary Liability
Fines, Penalties and Punitive
Damages
Antitrust or Restraint of Trade
Contractual Liability
Estimates, Plans and Contract
Awards
EPLI
Public Officials E&O
Landfill
Criminal Acts
64 Liability PERMA CIRA PRISM CJPIA
Assessment
Watercraft
Wage and Hour
Workers’ Compensation
Unwanted Electronic
Communications
Use of a Firearm by Non-Peace
Officers
Electroshock Weapons with
Exception for Policy
Department Employees
Vaccination and Disease
Testing
65 Property
Property PERMA CIRA PRISM CJPIA
“All Risk” Member
Retentions
$10K or $50K, with
Hesperia’s current retention
at $10K
See PRISM Property
Program
$10K to $125K, but varies
depending on Program
Tower
$2.5K, $10K, $100K, or 5%
Limit $100M per member per
occurrence except for
specified perils. $200M
annual aggregate.
See PRISM Property
Program
Tower I to VIII: $300M
except for specified perils,
$100M boiler and
machinery, plus excess
coverage
$25M per occurrence except
for specified perils
“All Risk” Deductible $100M per occurrence
except for specified perils.
$500K Unscheduled
infrastructure including but
not limited to tunnels,
bridges, roadways, and all
similar property unless a
specific value has been
declared. Unscheduled
infrastructure coverage is
excluded for the peril of
Earthquake and excluded
for FEMA and/or OES
declared disasters, providing
said declaration provides
funding for repairs.
See PRISM Property
Program
Specified by member. $10K per occurrence, all perils
and property including fire and
ambulance vehicles and
vehicles on the premises and
boats, except as indicated by
peril or type of property below:
$250K per occurrence,
unscheduled tunnels, bridges,
dams, catwalks (except those
not for public use), roadways,
highways, streets, sidewalks,
culverts, street lights and
traffic signals
$100K per occurrence,
unscheduled property, unless
Vacant and Unoccupied in
which case there is no
coverage
$500K per occurrence for
Vacant and Unoccupied
scheduled buildings
66 Property PERMA CIRA PRISM CJPIA
Earthquake Shock Coverage
Sublimit
Optional program See PRISM Property
Program
Tower I to VI: $100M
Tower I to VI: $365M
Shared Excess Roof Top
Tower VII: $25M with no
Excess Roof Top
Tower VIII: No Coverage
If purchased $25M shared by
covered members per
occurrence and in the annual
aggregate
Earthquake Shock
Deductible
Varies based on optional
program.
See PRISM Property
Program
5% per unit of coverage
with minimum deductible
$100K per occurrence and
maximum of $50M. All
members share in a
proportional basis
deductibles that exceed
$50M.
5% per unit of coverage with
minimum deductible $100K per
occurrence. Applies separately
to each member and each
occurrence.
Flood Coverage Sublimit $2.5M per occurrence and
in the annual aggregate for
members that purchase
coverage
No coverage for Flood Zones
A & V
See PRISM Property
Program
Tower I to VIII: $200M If Earthquake Shock purchased
$25M shared by covered
members per occurrence and
in the annual aggregate
If Earthquake Shock not
purchased $10M shared by
covered members per
occurrence and in the annual
aggregate
Flood Deductible $100K all flood zones per
occurrence excluding Flood
Zones A & V
No coverage for Flood Zones
A & V
See PRISM Property
Program
Greater of $25K per
occurrence or All Risk
deductible, outside Flood
Zones A & V.
Greater of $100K per
occurrence or All Risk
deductible, within Flood
Zones A & V.
$100K per occurrence except
$250K per occurrence per
member within SFHA. For
unscheduled property,
whether Vacant and
Unoccupied or not, the Flood
deductible shall be the greater
of the Flood deductible or the
applicable “All Risk” deductible.
$500K per occurrence, per pier
67 Property PERMA CIRA PRISM CJPIA
Earthquake Sprinkler
Leakage Sublimit
Covered outside of the
“Earthquake Shock”
definition and subject to the
basic peril deductible
See PRISM Property
Program
Included as “All Risk” peril $25M
Ordinance or Law Sublimit $50M except $2.5M for
vacant properties.
See PRISM Property
Program
$50M Increased Cost of
Construction
$25M for Earthquake Shock
and Flood only, per occurrence
and in the Annual Aggregate
Course of Construction
Sublimit
$25M for projects with
completed values not
exceeding the sub-limit
shown. Projects valued
greater than $15,000,000
require underwriting
approval and a premium
charge.
See PRISM Property
Program
$100M for projects at new
or existing sites with a final
contract value of
$100,000,000 or less
$25M Final Contract Value in
respect of Real Property,
including new projects at new
locations. Includes Earthquake
Shock and Flood for existing
Covered Members reported
within 60 days. Excludes
Earthquake Shock and Flood
for new Covered Members.
Newly Acquired Property
Sublimit
Any property newly
acquired, owned, leased,
managed, rented or
occupied is excluded.
See PRISM Property
Program
Automatically extended to
cover.
$25M per building or structure
for existing Covered Members.
Includes Earthquake Shock for
existing Covered Members that
already purchase earthquake
shock, when the new location
is reported within 60 days.
$25M per building or structure
for new Covered Members
reported within 60 days.
Excludes Earthquake Shock for
new Covered Members.
Newly Acquired Piers,
Docks, Wharves, Dams
Sublimit
Any property newly
acquired, owned, leased,
managed, rented or
occupied is excluded.
See PRISM Property
Program
Piers, wharves, and dams
are excluded unless
specifically declared.
$5M per member reported
within 60 days. Includes
Earthquake Shock and Flood
for existing Covered Members
that already purchase
earthquake shock, when the
68 Property PERMA CIRA PRISM CJPIA
new location is reported within
60 days. Excludes Earthquake
Shock and Flood for new
Covered Members.
Off Premises Services
Business Interruption
including Extra Expense
Sublimit
$25M resulting from a
covered peril at non-
owned/operated locations.
See PRISM Property
Program
Included in boiler and
machinery extension.
$2M per occurrence
Unscheduled or Temporary
Locations Sublimit
See PRISM Property
Program
$3M Unscheduled
Infrastructure each
occurrence subject to a
$500,000 deductible each
occurrence (All Risk and
Flood only)
$5M
Scheduled Vacant and
Unoccupied Property
Sublimit
$2.5M See PRISM Property
Program
No Sublimit $2.5M
Errors and Omissions
Sublimit
$50M See PRISM Property
Program
$50M $10M
Unscheduled Tunnels,
Bridges, Dams, etc. Sublimit
$750K unless a specific
value has been declared.
See PRISM Property
Program
$3M unless a specific value
has been declared
$1M per occurrence for
unscheduled tunnels, bridges,
dams, catwalks (except those
not for public use), roadways,
highways, streets, sidewalks,
(and related appurtenances to
these) culverts, street lights
and traffic signals.
Tax Revenue Interruption
Protection Sublimit
$3M except $1M per
occurrence if specific values
not reported.
See PRISM Property
Program
Not Specified if Included $25M per occurrence
Animals Sublimit $2.5M unscheduled animals,
$50K per animal, per
occurrence.
See PRISM Property
Program
S1M, specially trained
animals subject to a
stipulated value of $50,000
per animal each occurrence
$500K
69 Workers’ Compensation and Employers’ Liability
WC/EL PERMA CIRA PRISM CJPIA
Member Retentions $50K to $500K, with
Hesperia’s current retention
at $250K
Up to $350K Up to $125K Varies by member
State(s) Covered California California California California Volunteer Coverage Excluded, unless the
Member has assumed
liability pursuant to
California Labor Code
sections 3363.5, et seq., by
resolution before the date of
the injury.
Included provided that, prior
to the occurrence, the
governing Board of the
Member has adopted a
resolution as provided in
Division 4, Part 1, Chapter 2,
Article 2 of the California
Labor Code, declaring such
volunteer workers to be
Employees of the Member
for purposes of the Workers’
Compensation Act; or
provided that such volunteer
workers are statutorily
deemed by the Workers’
Compensation Act to be
Employees for the purposes
of workers’ compensation.
Included provided that, prior
to the occurrence, the
Governing Board of the
Covered Party has adopted a
resolution as provided in
Division 4, Part 1, Chapter 2,
Article 2, of the California
Labor Code, declaring such
volunteer workers to be
employees of the Covered
Party for purposes of the
Workers’ Compensation Act;
or provided that such
volunteer workers are
statutorily deemed by the
Workers’ Compensation Act
to be employees for the
purposes of workers’
compensation.
Volunteers are considered
Employees under this
Memorandum only if the
Member has a resolution in
effect, and passed prior to
the date of injury or illness
at issue, providing workers’
compensation coverage to
volunteers under Labor Code
Section 3363.5, and while
performing specific functions
in the course and scope of
authorized activities for the
Member.
Recovery from Others (WC) PERMA may enforce the
Member's rights, and the
rights of persons entitled to
the benefits of this coverage,
to recover PERMA's
payments from anyone
liable for the injury. The
Member will do everything
necessary to protect those
On behalf of the Program,
the Authority may, but is not
required to, enforce on
behalf of Participating
Member the Participating
Member’s rights under
Chapter V of the Workers’
Compensation Division of
the Labor Code,
In the event of any loss
payment for which you have
waived the right of recovery
in a written contract entered
into prior to the loss, we
agree to waive our right of
recovery with respect to
such loss.
The Authority shall be
subrogated to the extent of
any payment hereunder to
all the Member’s rights of
recovery thereof. This
section applies to all
recoveries from third parties
or governmental agencies.
The Member shall do
70 WC/EL PERMA CIRA PRISM CJPIA
rights for PERMA and to help
PERMA enforce them, and
will take no action to
prejudice the rights of
PERMA to seek such
recoveries.
commencing with Labor
Code 3850 et seq., including
but not limited to the
Participating Member’s
rights to subrogation to
recover the Program’s
payments from anyone
legally liable for the injury to
Participating Member’s
employee. The Participating
Member will do everything
necessary to protect those
rights and to help enforce
them.
nothing after Loss to
prejudice such rights and
shall do everything
necessary to secure such
rights. The Authority shall
have standing to seek
subrogation recovery in its
own name or in the name of
the Member, and the
Member shall cooperate
with and assist the Authority
in pursuing such recovery,
including assigning its right
to recover subrogated
amounts, and if necessary,
executing a written
agreement to effect such
assignment.
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works
Robert Worby, Fleet/Warehouse Supervisor
SUBJECT: Pacific Products & Services, LLC Contract Amendment
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to a mend the existing agreement with Pacific Products & Services, LLC in the amount of $130,000 for a total not-to- exceed amount of $380,000, and approve a one-year contract extension for the purchase of traffic signs and sign materials.
BACKGROUND
The Public Works Traffic program is responsible for the installation and maintenance of roadway pavement markers and traffic signs throughout the City of Hesperia. Traffic signs are vital to regulate, warn, and guide motorists and pedestrians in and around the public right -of-way. All City traffic signs are maintained to State and Federal standards based on the California Manual on Uniform Traffic Control Devises (MUTCD).
ISSUES/ANALYSIS
City staff has been satisfied with the vendor’s offering under the existing contract as they have demonstrated the ab ility to deliver a quality product at competitive prices within the desired delivery timeframe. The current agreement with Pacific Products & Services, LLC expires on June 30, 202 4. A contract extension is needed to continue to purchase traffic signs and sign materials for new locations along with replacing those destroyed by vehicle impact, vandalism, and theft. The vendor has agreed to hold the current contract pricing for one more y ear through June 30, 2025.
FISCAL IMPACT
Sufficient funding has been included in the FY 2024-25 Proposed Operating Budget.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENTS
None
THIS PAGE LEFT INTENTIONALLY BLANK
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and City Council Members
Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works
Robert Worby, Fleet/Warehouse Supervisor
SUBJECT: G & M Automotive Center, Inc. Contract Amendment
RECOMMENDED ACTION
It is re commended that the City Council and Board of Directors of the Hesperia Water District authorize the City Ma nager to approve a one -year contract extension for vehicle maintenance and repairs with G & M Automotive Center and increase the contract in the amount of $300,000 for a new, not-to-exceed amount of $875,000 for vehicle maintenance and repairs.
BACKGROUND
Preventative and corrective maintenance that is required for the City are seventy-six (76) light- duty vehicles , and thirty-four (34) super -duty and heavier on -road vehicles and equipment.
Preventative maintenance improves fleet productivity, manages vehicle wear, and ultimately reduces repair costs.
ISSUES/ANALYSIS
Public Works requested bids for Fiscal Year 2022-23 from local vendors located in the High Desert that could provide maintenance services. The vehicle fleet’s three categories were solicited on three separate requests for bids (RFB’s) to include as many potential bidders as possible . G & M Automotive Center, Inc., located in Hesperia, was deemed the lowest responsible, responsive bidder in each section. City staff recommends extending the agreement for an additional year and G & M has agreed to hold the current contract pricing for one more year through June 30, 2025.
CITY GOAL SUPPORTED BY THIS ITEM
Public Safety: ensure public safety resources adequately protect our community; and Financial Health: maintain a balanced budget and adequate reserves.
FISCAL IMPACT
The Fiscal Year 2024-25 Proposed Operating Budget includes sufficient funding.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and City Council Members
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works
Robert Worby, Fleet / Warehouse Supervisor
SUBJECT: Vehicle Procurement – One Heavy-Duty Truck
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to approve the procurement of one (1) 2024 Chevy Silverado 2500HD 4 X 4 utility truck for the Streets Maintenance Program and enter into an agreement with Victorville Chevrolet for the not-to-exceed amount of $73,000.
BACKGROUND
To maintain an optimal operating fleet, v ehicles are reviewed periodically as part of fleet management. Those that require higher than expected lifetime maintenance costs to remain operational are recommended for replacement.
This vehicle is needed to replace an existing unit (vehicle # 1472) that has reached the end of its useful life and the annual costs attributed to maintaining the existing unit exceed salvage value.
Additional benefits include improved occupant safety and lower fuel expenditures. Currently, it is difficult to attain vehicles wi th the time between ordering and delivery often taking six to twelve months. This replacement truck is available for purchase now with no needed lead time.
ISSUES/ANALYSIS
The Public Works Division requested a quote for one (1) four-wheel drive utility truck on April 5, 2024, soliciting bids from six dealerships both locally and out of the area to maximize the bid response. A requirement was included that the vehicle be in stock and available for delivery. The bid closed on April 10, 2024, with Victorville Chevrolet being the only respondent with a total bid of $ 72,893.39.
Staff recommends awarding the bid to Victorville Chevrolet who has been deemed the lowest responsive/responsible vendor and have the vehicle currently at their dealership.
CITY GOAL SUPPORTED BY THIS ITEM
Public Safety : ensure public safety resources adequately protect our community; and Financial Health: maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Funding for this purchase was not included in the Fiscal Year 2023-24 Budget. This procurement will be funded with the use of budgetary savings within Streets Fund 263. A Budget Amendment will be submitted during the Fourth Quarter Budget Review if savings are not available.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Bid comparison
Bid Comparison Type: Taxable
Bid Comparison Completed By: R. WORBY
Date:
Item
No. Qty Description Bidder Part # Unit Cost Extended Amount 1 1 One 2024 White Heavy-Duty 4 X 4 Truck With Four Full Doors And Utility Body N/A $67,526.73 $67,526.73 1 1 Title, Tire Tax, And Document Fees N/A $126.75 $126.75 $67,653.48
$5,239.91
$72,893.39
$72,893.39
$0.00
$72,893.39
4/11/2024
Victorville, CA
Vehicle Must Be Built Now And Available For Delivery Winning Bidder Victorville Chevrolet
Submitted Bid Amount
Sales Tax
Difference
Final Total
Total Bid Before Tax
Bid Amount (with tax)
Attachment 1
THIS PAGE LEFT INTENTIONALLY BLANK
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works/City Engineer Jeremy McDonald, Water Operations Manager
SUBJECT: GP Electric Motor Contract Amendment
RECOMMENDED ACTION
It is recommended that the City Council and Board Members of the Hesperia Water District (District) authorize the City Manager to approve an amendment of $30,000 to the existing contract with GP Electric Motor , for a total revised not-to-exceed amount of $ 190,000 for well motor maintenance.
BACKGROUND
Electric motors that operate the water pumps require proactive or reactive (emergency) repairs throughout the year to continue to have water pumped at the well sites and maintain positive water pressure in the distribution system to serve homes and businesses. The proactive and reactive repairs will also greatly reduce the possibility of a water service outage through the City.
In April 2019, the District conducted a request for bid for well motor maintenance and GP Electric Motor was deemed the lowest responsible/responsive bidder.
ISSUES/ANALYSIS
Due to a substantial repair in the amount of $20,022 for the motor at Well 32, additional contract contingency will be needed for the current Fiscal Year. On March 8, 2024, the motor for Well 14A triggered an alarm on the Supervisory Control and Data (SCADA) program. City staff determined that the winding of the motor shorted. Based on historical trends, repairs of this nature are estimated to be between $20,000 and $30,000. City staff recommend that the contract be amended so the repair can be completed prior to peak demand during the summer.
CITY GOAL SUPPORTED BY THIS ITEM
Capital Improvement: continually evaluate capital improvement priorities; and Financial Health:
maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Sufficient funding has been included in the adopted Fiscal Year 2023-24 Water Operating Fund 700 Budget.
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works
Brian Blackwell, Streets/Traffic Operations Mangager
SUBJECT: Contract Amendment for Street Sweeping Services
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to approve an amendment of $357,585 to the existing contract with Guardian Street Sweeping for a revised not-to-exceed amount of $1,072,755 for street sweeping services and to approve a one-year contract extension for street sweeping.
BACKGROUND
Street sweeping services are provided to eliminate trash/debris on City of Hesperia (City) streets and to minimize trash/debris from entering the storm drain system. Street sweeping services are performed on a weekly, bi-weekly, and monthly schedule at various locations which include Main Street, Bear Valley Road, I Avenue, E Avenue, Hesperia Road, City facilities, housing tracts, and schools with curb and gutter. In addition, bike lanes throughout the city are swept on a quarterly schedule.
ISSUES/ANALYSIS
The current contract with Guardian Street Sweeping expires June 30, 202 4, and a contract extension is needed to continue to provide street sweeping services. City staff recommends extending the contract for an additional year. Additionally, the vendor has agre ed to hold the current contact pricing for one more year through June 30, 2025.
CITY GOAL SUPPORTED BY THIS ITEM
Public Safety: ensure public safety resources adequately protect our community; and Financial Health: maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Sufficient funding will be included in the proposed Fiscal year 2024-25 Streets Operating Budget.
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
Staff Report to the Mayor and Council Members, Board Members of the Hesperia Water District RFB 2020-21-007, 2020-21-008, 2020-21-009 Fleet Vehicle Maintenance Services March 16, 2021
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Public Works Director
Brian Blackwell, Streets/Traffic Operation Manager
SUBJECT: Contract Amendment for Unarmed Security Services with Alltech Industries, Inc.
RECOMMENDED ACTION
It is recommended that the City Council and Board of Directors of the Hesperia Water District (District) authorize the City Manager to approve an amendment to the existing contract with Alltech Industries, Inc. for an additional $164,400 for a revised not-to-exceed contract amount of $414,964 and approve a one-year contract extension for unarmed security services.
BACKGROUND
The City and District have continued to use unarmed security patrols after business hours and weekends at the Civic Center and Public Works Corporate Yard to min imize theft, vandalism, provide a safe environment for staff after normal business hours , which has been proven to be beneficial. The current vendor Alltech Industries, Inc. began services in November 2022, and has provided excellent service, responded to City inquiries timely, and provided daily service reports that are automatically generated at the end of each shift.
ISSUES/ANALYSIS
The contract with Alltech Industries, Inc. is set to expire on June 30, 2024, and to continue to provide unarmed security services, the vendor requested a 6.5% increase for Fiscal Year 2024-
25. City staff researched their request and based on the consumer price index (CPI) specifically related to s ervices in Riverside -San Bernardino-Ontario, CA, (U.S. Bureau of Labor Statistics series ID: CUURS49CSAS) an increase of approximately (7.1%) was noted from March 2023 to March 2024. In addition, when the original bid closed in April 2022, only two vendors submitted bids, Alltech Industries, Inc., and another vendor in which the contract was terminated , due to inadequate performance.
As mentioned above with Alltech Industries, Inc. providing excellent service, providing an increase request that corresponds with the referenced CPI, and being the only responsible vendor to respond to the bid in April 2022, staff recommends approving the requested six and a half percent (6.5%) price increase request and extending the contract for unarmed security services.
CITY GOAL SUPPORTED BY THIS ITEM
Staff Report to the Mayor and Council Members, Chair and Board Members, Hesperia Water District Contract Amendment for Unarmed Security Services
May 07, 2024
Public Safety: ensure public safety resources adequately protect our community; and Financial Health: maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Sufficient funding will be included in the FY 2024-25 Proposed Operating Budget.
ALTERNATIVES
1. Provide alternative direction to staff.
ATTACHMENTS
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works/City Engineer Bethany Hudson, Assistant Project Manager
SUBJECT: Final Tract Map No. 20648-1
RECOMMENDED ACTION
It is recommended that the City Council adopt Resolution No. 2024-14 approving Final Map No. 20648-1 to create 20 residential lots and 1 homeowners association (HOA) community lot with a remainder parcel on approximately 15.61 gross acres and accept right -of-way necessary to develop Tract 18989 -1 Lot 26, Planning Area 17 of the Tapestry Specific Plan (Applicant:
Silverwood Development Phase I, LLC).
BACKGROUND
On January 26, 2016, the City Council approved Tentative Tract Map No. 18989 to create 39 lots on 986 gross acres within the Tapestry Specific Plan , now known as the Silverwood Project , located south of Ranchero Road at the intersection of I Avenue. Final Map 20648 subdivides Lot 26, Planning Area 17 of Final Map 18989-1 to create 20 residential lots and 1 HOA Community Lots on approximately 15.61 gross acres and dedicates the in-tract right-of-way for utility infrastructure, streets, and easements within the Silverwood project. The first phase of Final Map 20648-1 will include the Model Home Complex and the Welcome Center for the Silverwood project.
Staff has reviewed the final map and determined that it complies with the Tapestry Specific Plan, the Tapestry Development Agreement, the General Plan and zoning regulations , all required conditions of approval, and all local ordinances related to the creation of these parcels. The developer has executed a Subdivision Improvement Agreement in accordance with local ordinances and the Subdivision Map Act and posted the necessary bonds for offsite improvements.
ISSUES/ANALYSIS
There are no issues identified with this item.
CITY GOAL SUPPORTED BY THIS ITEM
Future Development: facilitate balanced growth to ensure cohesive community development and pursue economic development.
FISCAL IMPACT
Staff Report to the Mayor and Council Members
Final Tract Map 20648-1
May 7, 2024
There are no significant fiscal impacts to the City related to this action.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Resolution No. 2024-14
2. Final Tract Map No. 20648-1
RESOLUTION NO. 2024-14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPER IA, CALIFORNIA, APPROVING FINAL TRACT MAP NO. 20648-1 TO CREATE 20 RESIDENTIAL LOTS AND 1 HOMEOWNERS ASSOCIATION (HOA)
COMMUNITY LOT WITH A REMAINDER PARCEL ON APPROXIMATELY 15.61
GROSS ACRES AND ACCEPT RIGHT -OF-WAY NECESSARY TO DEVELOP PHASE I OF THE TAPESTRY SPECIFIC PLAN (APPLICANT: SILVERWOOD
DEVELOPMENT PHASE I, LLC)
WHEREAS, on January 26, 2016 the City Council recommended that Tentative Tract Map No. 18989 for approval; and
WHEREAS, Tentative Tract Map No. 18989 created 39 lots; and
WHEREAS, on May 16, 2023 the City Council approved Tract Map No. 18989-1 for approval; and
WHEREAS, on August 10, 2023 the Design Review Committee approved Tentative Tract Map No. 20648 on Lot 26 of Tract Map 18989-1; and
WHEREAS, Tract Map No. 20648-1 is to create 20 residential lots and 1 homeowners association (HOA) community lot on 15.61 gross acres within the Tapestry Specific Plan; and
WHEREAS, Tract Map No. 20648-1 is to accept right-of-way for the backbone infrastructure; and
WHEREAS, all legal prerequisites to the adoption of this resolution have occurred.
NOW THEREFORE , BE IT RESOLVED BY THE CITY OF HESPERIA CITY COUNCIL AS FOLLOWS:
Section 1. Final Tract Map No. 20648-1 is hereby approved, and the City Clerk is authorized to present same to the County Recorder to be filed for record.
Section 2. That the City Clerk shall certify to the passage and adoption of this resolution and enter it into the book of original resolutions.
ADOPTED AND APPROVED this 7th day of May, 2024.
Larry Bird
Mayor
ATTEST:
Erin Baum
Assistant City Clerk
Attachment 2
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
Chair and Board Members, Hesperia Water District
FROM: Rachel Molina, City Manager
BY: Cassandra Sanchez, Director of Public Works/City Engineer
SUBJECT: Contract Amendment for Apple Valley Communications after hours phone service
RECOMMENDED ACTION
It is recommended that the City Council authorize the City Manager to approve an amendment to the existing contract with Apple Valley Communications for an additional $50,000 for a revised not-to-exceed contract amount of $100,000 and approve a one-year contract extension for after hour telephone answering services.
BACKGROUND
The City has continued to utilize after hour telephone answering services after business hours and weekends at the Civic Center and Public Works Corporate Yard to collect citizens phone calls after normal business hours, which has been proven to be beneficial and allows staff to respond quickly during business hours. The current vendor Apple Valley Communications began services in July 2020, and has provided excellent service.
ISSUES/ANALYSIS
The contract with Apple Valley Communications is set to expire on June 30, 2024. Apple Valley Communications has agreed to not increase the original contract to continue to provide after- hours telephone answering service and hold the original pricing. The City has been happy with the service being provided and staff continues to utilize the after-hours telephone service to service the community.
CITY GOAL SUPPORTED BY THIS ITEM
Public Safety: ensure public safety resources adequately protect our communit y; and Financial Health: maintain a balanced budget and adequate reserves.
FISCAL IMPACT
Sufficient funding will be included in the FY 2024-25 Proposed Operating Budget.
ALTERNATIVES
1. Provide alternative direction to staff.
Staff Report to the Mayor and Council Members – Contract Amendment with Apple Valley Communications for after hour phone services
May 7, 2024
ATTACHMENTS
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Melinda Sayre, Deputy City Manager/City Clerk
Erin Baum, Assistant City Clerk
SUBJECT: Adoption of Mission Statement and Goals
RECOMMENDED ACTION
It is recommended that the City Council formally adopt the City Mission Statement , Values, and Goals as revised.
BACKGROUND
The City Council held a goal setting workshop on Wednesday, March 20, 2024. The workshop provided an opportunity for council Members to review elements of effective governance, discuss and confirm goals for the coming year, and discuss the City’s mission and values.
ISSUES/ANALYSIS
During the meeting City Council revised the City’s Mission statement to read;
“Valuing our rural character while embracing new living and economic opportunities, the City of Hesperia is dedicated to providing a safe community where all can thrive.”
The City’s Values were defined as;
Responsive Service
Integrity
Innovation
Efficiency
The City’s goal statement was revised to reflect the following:
Goal Goal Statement
Public Safety Ensure public safety resources adequately protect our community
Future Development Facilitate balanced growth to ensure cohesive community development and pursue
economic development.
Staff Report to the Mayor and Council Members
Adoption of Mission Statement and Goals
May 7, 2024
Organizational Health Foster a high performing organization that provides opportunities for professional growth
Financial Health Maintain a balanced budget and adequate reserves
Capital Improvement Continually evaluate capital improvement priorities
With the revision of the City’s goal statement, City staff reports will include which City goals are furthered by items as included below.
CITY GOAL SUPPORTED BY THIS ITEM
Organizational Health : foster a high performing organization that provides opportunities for professional growth.
FISCAL IMPACT
There is no fiscal impact associated with approval of the recommended action.
ALTERNATIVE(S)
Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia
STAFF REPORT
DATE: May 7, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager
BY: Nathan R. Freeman, Director of Development Services Ryan Leonard, Principal Planner
SUBJECT: Award Professional Services Agreement s for On-Call Landscape and Irrigation Plan Check Services
RECOMMENDED ACTION
It is recommended that the City Council approve the award of two (2) Professional Services Agreements (PSAs) to Architerra Design Group and Community Works Design Group each in the not to exceed amount of $150,000 for on call landscape and irrigation plan check services for a term of three (3) years.
BACKGROUND
Currently, landscape plans are submitted to the Building and Safety Division for all new developments including commercial, industrial, other non -residential developments, single - family, and multi-family projects. The Planning Division is responsible for reviewing landscaping plans during the plan check process to ensure compliance with the Development Code, applicable Specific Plan regulations, conditions of approval, and the City’s approved Plant List.
The Planning Division is also responsible for reviewing landscape plans that are processed as a part of the Tapestry Specific Plan (referred to as Silverwood). The Silverwood project is an approved Specific Plan that includes over 9,000 acres and is entitled for more th an 15,000 homes. Phase 1 of the Silverwood development has already commenced, with model homes anticipated to be constructed within the first quarter of the 2025 calendar year.
The Planning Division needs professional services to assist in the review of l andscaping and irrigation plans, in order to meet the demands of the Silverwood project. Staff is recommending that the City award “on -call” service contracts to the top two ranked firms. This is a practice followed by many cities. Work will primarily be assigned to the top ranked firm. However, as the workload increases, the City will be able to assign work to either firm to ensure the timely completion of plan checks and inspections.
ISSUES/ANALYSIS
The Public Contract Code requires contracts for professional services to be awarded based on qualifications of a firm. Staff solicited professional on-call landscape plan check and irrigation plan check services by issuing a Request for Proposals (RFP) through a formal process utilizing Public Purchase, the City’s online site. A total of five (5) Proposals were received and reviewed by a selection committee. The proposals were evaluated based on criteria such as experience, technical expertise, and approac h to the scope of work. Architerra Design Group and Community Works Design Group were deemed the top ranked firms. Staff desires to contract with the two top rated firms to provide flexibility in assigning projects to be managed.
Staff Report to the Mayor and Council Members
Award Professional Services Agreement for On-Call Landscape and Irrigation Plan Check Services May 7, 2024
Contract plan review services are necessary to allow the City to continue to provide a high level of service to the development community. Awarding the two contracts does not mean the entire contract amounts will be used, but available for use when required. Contract utilization is based upon the volume of plans that are submitted to the City. Each consultant has timeframes within their contract for plan reviews to be completed, which is typically 14 days.
CITY GOAL SUPPORTED BY THIS ITEM
Future Development: facilitate balanced growth to ensure cohesive community development and pursue economic development.
FISCAL IMPACT
Adequate funding will exist within the FY 2024-25 Proposed Budget. Awarding the two contracts does not require the City to expend each contract in its entirety.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
None
City of Hesperia
STAFF REPORT
DATE: April 16, 2024
TO: Mayor and Council Members
FROM: Rachel Molina, City Manager SECOND READING AND ADOPTION BY: Nathan R. Freeman, Director of Development Services Ryan Leonard, Principal Planner
SUBJECT: CUP22-00017 & SPLA24 -00002; Applicant: Kiss Logistics Center; APNs: 3064 - 401-03, -04 & -05
RECOMMENDED ACTION
The Planning Commission recommends that the City Council adopt Resolution No. 2024 -11, recommending that the City Council make the environmental determination pursuant to the California Environmental Quality Act (CEQA) by certifying the Final Environmental Impact Report (FEIR) and adopting a statement of overriding considerations and introduce and place on first reading Ordinance No. 2024-05 approving SPLA24-00002 and adopting Resolution No. 2024-12 approving CUP22-00017.
BACKGROUND
Proposal: Conditional Use Permit CUP22-00017 has been filed to construct a 655,468 square foot industrial warehouse on approximately 31.1 gross acres in conjunction with Specific Plan Amendment SPLA24-00002 and to change approximately nine gross acres from Neighborhood Commercial (NC) to Commercial Industrial Business Park (CIBP) within the Main Street and Freeway Corridor Specific Plan (Specific Plan).
Location: West of US Highway 395, approximately 600 feet north of Phelan Road (Attachment 1).
Current General, Plan, Zoning and Land Uses : Approximately 22.1 acres of the site are located within the CIBP zone of the Specific Plan and approximately nine acres are located within the NC zone of the Specific Plan. The surrounding land is designated and zoned as noted on Attachment
2. The site is currently vacant. Land uses to the north, south, and west consist of vacant land. US Highway 395 is located immediately to the east of the site followed by vacant land (Attachment 3). In 2022 , entitlement applications were approved for three warehouse buildings totaling approximately 3,745,429 square feet immediately to the west of the site (CUP19-00010).
Planning Commission: The Planning Commission, at its March 28, 2024 meeting, reviewed the proposed project and voted 4-0 (Commissioner Sevy was absent) to forward this item to the City Council with a recommendation for approval. During the meeting, three people spoke in favor of the project. In addition, prior to the meeting four comment letters were received after the agenda was posted. Two of the comment letters were from neighboring property owners who were in support of the project and two of the comment letters were in opposition to the project. The opposition letters were received from the Golden State Environmental Justice Alliance and the Center for Biological Diversity. Both groups previously provided comment letters on the Draft EIR, and the two opposition letters received prior to the meeting generally raised sim ilar concerns as
Staff Report to the Mayor and Council Members
CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 April 16, 2024
those that were received during the public review of the Draft EIR. During the meeting Commissioner Steeno and Commissioner Burke asked clarifying questions regarding the offsite water and sewer improvements. The Planning Commission was unanimous in their support of the proposed project.
ISSUES/ANALYSIS
The project consists of the construction of a 655,468 square foot industrial warehouse building on approximately 31.1 gross acres of land. Gross site acreage is defined in the Development Code as the net property site acreage in addition to the area from the property line to the centerline of all public rights-of-way across the site frontage. The proposed building will contain 639,468 square feet of industrial warehouse space, 11,000 square feet of ground floor office space, and a 5,000 square foot mezzanine for additional office use. Depending on the number of future tenants, office areas could be distributed among four individual office spaces in each of the corners of the building. Regardless of how the office spaces are distributed within the building, a maximum of 16,000 square feet of office area would be allowed since it generates a higher parking demand than traditional warehouse areas. The maximum office space limitation is included as a condition of approval. The project also features an outdoor patio seating area for employees at the southeast corner of the building.
Parking: The project complies with all site development regulations, including the minimum building requirements, landscaping, and number of parking spaces. The parking regulations require a minimum of 325 parking stalls based upon the requirements listed in Table 1. As proposed, the project satisfies the minimum parking requirements.
TABLE 1-PARKING REQUIREMENTS
Proposed
Building Square
Footage
Parking Formula Spaces
Required
Spaces
Provided
Warehouse 639,468 SF 20 spaces + 0.40/1,000 sq. ft. of
building over 10,000 sq. ft
272
-
Office 16,000 SF 3.33 spaces per 1,000 sq. ft.
gross floor area
53 -
TOTAL 655,468 SF 325 377
The conventional parking spaces are proposed primarily along the northern and southern sides of the building, with additional parking provided at each corner of the building. In addition, the project includes 30 dock doors located along the east side of the building, and 30 dock doors located along the west side of the building for a total of 60 dock doors. The project will also provide 74 trailer stalls located opposite of the loading dock doors on the east and west perimeter of the site. Gated entries are proposed at all four corners of the building that will allow access to the truck courts.
Screening: As previously mentioned, the project includes 30 dock doors located along the east side of the building, and 30 dock doors located along the west side of the building. The dock doors are proposed to be setback approximately 200 feet from Caliente Road to the west and 200 feet away from US Highway 395 to the east. To help screen the view of the dock doors from the right- of-way, the project includes an 8’ high concrete screen wall across the east and west sides of the property. In addition, as a condition of approval, the screen wall will be required to be decorative and incorporate the use of pilasters and other decorative elements. With incorporation of the
Staff Report to the Mayor and Council Members
CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 April 16, 2024
condition of approval, all the truck loading docks, and truck loading activities will not be vi sible from Caliente Road or US Highway 395.
Access/Roadway Improvements: Primary access to the site will be provided from a new public roadway (Caliente Road) that will be constructed by the project. Caliente Road is planned as a 70-foot wide Industrial Collector that will provide public two-way access with a turn pocket and will form the connection between Yucca Terrace Drive to the north and Phelan Road to the south.
The intersection of Caliente Road and Phelan Road will be fully signalized. Secondary access will be provided at the intersection of Yucca Terrace Drive and US Highway 395. This intersection will be fully signalized and will allow full turning movements and controlled access to and from US Highway 395. Two 40 -foot-wide driveway approaches will be provided off Caliente Road to provide full access for trucks, passenger vehicles, and emergency vehicles. Internal circulation will be provided by 40-foot-wide drive aisles located around the perimeter of the site.
The project will be responsible for the construction of curb, gutter, and sidewalk along the project frontage of Caliente Road and US Highway 395. In addition, the project will be responsible for paving Yucca Terrace Drive, which is currently an unimproved roadway, from US Highway 395 to the intersection of Caliente Road. The project will also be responsible for the construction of Caliente Road that will connect Phelan Road to the south with Yucca Terrace Drive to the north.
Finally, the project will be responsible for co nstructing the required traffic signals at the Phelan Road and Caliente Road intersection, and the Yucca Terrace Drive and US Highway 395 intersection.
Architecture: The architecture of the proposed building complies with the architectural requirements of the Specific Plan (Attachments 4 & 5). The large concrete tilt-up building exhibits a clean, corporate look, exhibiting several exterior building colors, and multiple expansion joints.
The building has been designed to incorporate prominent glass features at each of the corners of the structure. In addition, the sides of the building, which are adjacent to the right-of-way, feature prominent tower elements, concrete accent walls , and decorative windows. The building height will be approximately 49 feet.
The project also satisfies the minimum landscaping requirements. The minimum required landscape coverage is 10% of the developed site; the project provides 209,075 square feet (16.8%) of total landscape coverage, which will be located around the perimeter of the site and will be visible from the right-of-way.
Water and Sewer: The project will include the construction of new onsite and offsite water lines.
Water lines will be constructed within the Caliente Road right-of-way to the west of the project site and extend approximately 1,300 feet south to Phelan Road. The proposed water main w ill then run adjacent to the existing water main within Ph elan Road/Main Street for approximately 3,980 feet to Mesa Linda Street. The water main will then continue approximately 2,700 feet south and connect to the existing at Sultana Street. The new water line will provide the necessary volume to achieve the required fire flow.
The project will also include the construction of new onsite and offsite sewer lines. The proposed sewer line will begin from the northern portion of Caliente Road and extend approximately 2,600 feet south to Phelan Road. The proposed sewer system w ill include a combination of proposed sewer force main and proposed sewer gravity main with a sewer lift station located at the intersection of Caliente Road and Yucca Terrace Drive. The sewer will then extend approximately
Staff Report to the Mayor and Council Members
CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 April 16, 2024
one mile east on Phelan Road/Main Street and connect to the existing facilities within Cataba Road.
Drainage: The project will install new onsite storm drain lines throughout the site. No off-site storm drain improvements are proposed for this project. Stormwater would be collected using a system of catch basins and roof drains that route flows to underground pipes. All storm water run-off will be conveyed to a proposed detention basin at the north end of the project site. The detention basin will contain dry wells that would treat the stormwater collected from the project site.
Specific Plan Amendment: A Specific Plan Amendment has been filed to change approximately nine acres of the project site from Neighborhood Commercial ( NC) to Commercial Industrial Business Park (CIBP). Although the City originally planned for the subject parcel to be developed with commercial uses, very little interest has ever been expressed from commercial developers.
Furthermore, within the past few years , the retail industry has undergone a major shift as traditional brick and mortar retail uses face stiffening competition from online-only stores.
The proposed CIBP zoning designation is appropriate as the surrounding parcels that are located to the north, east, and west are all zoned CIBP. In addition, the two parcels located immediately to the south of the subject parcel would remain as Neighborhood Commercial (NC). The remaining parcels could accommodate commercial uses in the future if it were proposed. For these reasons, staff is in support of the proposed Specific Plan Amendment.
ENVIRONMENTAL ANALYSIS
Given the size and regional importance of this project, CEQA requires that the environmental impact of the project be analyzed. An initial study was prepared, which determined that the project may have a significant impact on the environment. As a result, an Environmental Impact Report (EIR) was required. A Notice of Preparation (NOP) was distributed for public review for a period of 30 days from November 4, 2022, through December 5, 2022, and the Draft EIR was distributed for a 45 -day public period from October 3, 2023 through November 16, 2023 and was subsequently extended until December 1, 2023. The environmental document was circulated to local, state, and federal agencies, and organizations as well as surrounding property owners. Five comment letters were received during the Initial Study/NOP comment period and six comment letters were received during the Draft EIR comment period. The letters, as well as the responses to them, are included in the Final EIR. The Draft and Final EIR are available for review on the City’s website at https://www.cityofhesperia.us/1466/CEQA--Environmental-Documents and have been provided to the City Council under separate cover.
The Draft EIR identified potentially significant impacts of the project and discussed numerous mitigation measures proposed to address potential impacts of the project. Mitigation measures presented in the Draft EIR have been included in the Mitigation Monitoring Reporting Program, which is attached as Attachment 6 and incorporated by reference in the conditions of approval (Attachment 8). The mitigation measures for the project will reduce potentially significant impacts to Biological Resources, Cultural Resources, Geology and Soils, and Tribal Cultural Resources.
However, the EIR concluded that despite mitigation measures, the project could result in significant and unavoidable impacts to Greenhouse Gas Emissions and Transportation.
Consequently, pursuant to CEQA guidelines, a statement of overriding considerations must be made to approve the project. The following is a summary of the significant and unavoidable impacts because of the project:
Staff Report to the Mayor and Council Members
CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 April 16, 2024
Greenhouse Gas Emissions: Long-term operations of the project would result in greenhouse gas emissions through mobile sources and on-site equipment, area sources (landscape maintenance equipment); energy use (natural gas and generation of electricity consumed by the Project); generation of electricity associated with wastewater treatment and with water supply, treatment, and distribution; and solid waste disposal. Annual greenhouse gas emissions from these sources were estimated in the EIR.
With applicable regulatory requirements and project design features, the project would result in approximately 11,630.5 MT CO2e per year, which would exceed the GHG threshold of 3,000 MT CO2e per year. Therefore, the project would generate GHG emissions, either directly or indirectly, that may have a significant impact on the environment, and this would represent a cumulatively potential significant impact. Mitigation measures would be required that would reduce project - generated construction and operational GHG emissions. The EIR determined that the effectiveness of the required mitigation measures cannot be accurately quantified. Therefore, project-generated greenhouse gas emissions would still exceed the applied thres hold of 3,000 MT CO2e per year. The EIR concludes that there are significant unavoidable impacts upon greenhouse gas emissions and a finding of overriding considerations is included in the resolution certifying the EIR for this project.
Traffic/Circulation: Beginning on July 1, 2020, vehicle miles traveled (VMT) is used to determine the significance of transportation impacts. The San Bernardino Transportation Analysis Model (SBTAM) is an accepted program to estimate VMT as it considers interaction between different land uses based on socio -economic data such as population, households, and employment. A project’s VMT impacts are considered significant if the project baseline and cumulative VMT per service population is above the County’s regional average. The County’s regional average is 32.7 VMT per service population . However, the project’s cumulative VMT per service population is estimated to be 37.1 VMT. Therefore, the project would have a significant and unavoidable impact on the environment. The project would implement mitigation measures to provide a ridesharing program and provide end of trip bicycle facilities to encourage employee carpooling, use of public transit, and biking as alternative modes of transportation to work. Implementation of the mitigation measures would reduce the total VMT per service population; however, they would not reduce the project’s VMT below the 32.7 countywide significance threshold.
Overriding Considerations: Pursuant to CEQA, the City must balance the benefits of the project against any significant and unavoidable environmental impacts that cannot be mitigated to less than significant. If the benefits of the project outweigh these environmental impacts, those impacts are considered “acceptable.” Since the impact upon Greenhouse Gas Emissions and Transportation are considered significant and unavoidable, findings for a Statement of Overriding Considerations must be made. The project’s benefits include strengthening the local economy by providing new employment opportunities for residents and generating tax revenues to maintain adequate infrastructure facilities. Further, the project will help satisfy the City's deficiency of high- quality local jobs, as most residents must currently travel outside of the City to obtain higher paying jobs . The project would use the locational characteristics (specifically, the project’s proximity to the I-15 freeway and US Highway 395) to provide needed flexible industrial space to businesses wishing to invest in the City, as well as to provide approximately 549 permanent jobs both directly and indirectly in the region. The project’s social and economic benefits render these significant and unavoidable impacts acceptable.
Conclusion: In summary, because the project is consistent with the City’s General Plan, most of the project’s impacts, whether less than significant, mitigable, or significant and unavoidable, were
Staff Report to the Mayor and Council Members
CUP22-00017 & SPLA24-00002; Applicant: Kiss Logistics Center; APNs: 3064-401-03, -04 & -05 April 16, 2024
known and acknowledged by the City when the General Plan EIR was adopted in 2010. Prior to acting on the project, the City Council must make the environmental determination, certifying that the Final EIR is complete; that it has been prepared in compliance with CEQA; that it reflects the City’s independent judgment; and that all impacts from carrying out the project have been identified and disclosed to the public. Resolution No. 2024-11has been prepared to document this determination. Once that has occurre d, the Council can consider Specific Plan Amendment SPLA24-00002 and Conditional Use Permit CUP22-00017. If approved, the mitigation monitoring and reporting program will be administered with the project approval.
FISCAL IMPACT
None. The development will be subject to payment of development impact fees and will be required to annex into the City ’s Industrial CFD to pay for the ongoing maintenance of public infrastructure and services.
ALTERNATIVE(S)
1. Provide alternative direction to staff.
ATTACHMENT(S)
1. Overall Site plan
2. General Plan / Zoning Map
3. Aerial
4. Color Elevation
5. View Rendering
6. Resolution No. 2024-11 (Adoption of the EIR including Exhibit A- Findings of Fact and Statement of Overriding Considerations and Exhibit B- MMRP)
7. Ordinance No. 2024-05. (SPLA24-00002)
8. Resolution No. 2024-12, with list of conditions (CUP22-00017)
9. Draft EIR (provided under separate cover)
10. Final EIR (provided under separate cover)
Attachment 1-Site Plan
APPLICANT(S):
KISS LOGISTICS CENTER
FILE NO(S):
CUP22-00017 & SPLA24-00002
LOCATION:
WEST OF HIGHWAY 395, APPROXIMATELY 600 FEET NORTH
OF PHELAN ROAD.
APNs:
3064-401-03, -04 & -05
PROPOSAL:
CONSIDERATION OF CON DITIONAL USE PERMIT CUP22-00017 TO CONST RUCT A 655,468 SQUARE FOOT WAREHOUS E DISTRIBUTION BUILD ING ON 31.1 GROSS ACRES WITHIN THE
COMMERCIAL INDUSTRIAL BUSINESS PARK (CIBP) AND THE NEIGHBORHOOD COMMERCIAL (NC)
ZONE OF THE MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN IN CONJUNCTION WITH SPECIFIC PLAN AMENDM ENT SPLA24-00002 TO CHANGE THE ZONE FOR PARCEL 3064 -401-05
FROM NC TO CIBP AND THE ADOPTION OF AN ENVIRONMENTAL IMPACT REPORT PURSUANT TO
THE PROVISIONS OF CEQA
N
GENERAL PLAN AND ZONING MAP
ATTACHMENT 2
SITE
APPLICANT(S):
KISS LOGISTICS CENTER
FILE NO(S):
CUP22-00017 & SPLA24-00002
LOCATION:
WEST OF HIGHWAY 395, APPROXIMATELY 600 F EET NORTH
OF PHELAN ROAD.
APNs:
3064-401-03, -04 & -05
PROPOSAL:
CONSIDERATION OF CON DITIONAL USE PERMIT CUP22-00017 TO CONST RUCT A 655,468 SQUARE FOOT WAREHOUS E DISTRIBUTION BUILD ING ON 31.1 GROSS ACRES WITHIN THE
COMMERCIAL INDUSTRIAL BUSINESS PARK (CIBP) AND THE NEIGHBORHOOD COMMERCIAL (NC)
ZONE OF THE MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN IN CONJUNCTION WITH SPECIFIC PLAN AMENDM ENT SPLA24-00002 TO CHANGE THE ZONE FOR PARCEL 3064 -401-05
FROM NC TO CIBP AND THE ADOPTION OF AN ENVIRONMENTAL IMPACT REPORT PURSUANT TO
THE PROVISIONS OF CEQA
N
AERIAL
ATTACHMENT 3
SITE
APPLICANT(S):
KISS LOGISTICS CENTER
FILE NO(S):
CUP22-00017 & SPLA24-00002
LOCATION:
WEST OF HIGHWAY 395, APPROXIMATELY 600 F EET NORTH
OF PHELAN ROAD.
APNs:
3064-401-03, -04 & -05
PROPOSAL:
CONSIDERATION OF CON DITIONAL USE PERMIT CUP22-00017 TO CONST RUCT A 655,468 SQUARE FOOT WAREHOUS E DISTRIBUTION BUILD ING ON 31.1 GROSS ACRES WITHIN THE
COMMERCIAL INDUSTRIAL BUSINESS PARK (CIBP) AND THE NEIGHBORHOOD COMMERCIAL (NC)
ZONE OF THE MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN IN CONJUNCTION WITH SPECIFIC PLAN AMENDM ENT SPLA24-00002 TO CHANGE THE ZONE FOR PARCEL 3064 -401-05
FROM NC TO CIBP AND THE ADOPTION OF AN ENVIRONMENTAL IMPACT REPORT PURSUANT TO
THE PROVISIONS OF CEQA
COLOR ELEVATION
ATTACHMENT 4
APPLICANT(S):
KISS LOGISTICS CENTER
FILE NO(S):
CUP22-00017 & SPLA24-00002
LOCATION:
WEST OF HIGHWAY 395, APPROXIMATELY 600 F EET NORTH
OF PHELAN ROAD.
APNs:
3064-401-03, -04 & -05
PROPOSAL:
CONSIDERATION OF CON DITIONAL USE PERMIT CUP22-00017 TO CONST RUCT A 655,468 SQUARE FOOT WAREHOUS E DISTRIBUTION BUILD ING ON 31.1 GROSS ACRES WITHIN THE
COMMERCIAL INDUSTRIAL BUSINESS PARK (CIBP) AND THE NEIGHBORHOOD COMMERCIAL (NC)
ZONE OF THE MAIN STREET AND FREEWAY CORRIDOR SPECIFIC PLAN IN CONJUNCTION WITH SPECIFIC PLAN AMENDM ENT SPLA24-00002 TO CHANGE THE ZONE FOR PARCEL 3064 -401-05
FROM NC TO CIBP AND THE ADOPTION OF AN ENVIRONMENTAL IMPACT REPORT PURSUANT TO
THE PROVISIONS OF CEQA
VIEW RENDERING
ATTACHMENT 5
RESOLUTION NO. 2024-11
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HESPERIA,
CALIFORNIA, MAKING THE ENVIRONMENTAL FINDINGS PURSUANT TO
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, CERTIFY ING THE FINAL ENVIRONMENTAL IMPACT REPORT (SCH #2022110097), ADOPTING
THE STATEMENT OF OVERRIDING CONSIDERATIONS, AND ADOPTING A
MITIGATION MONITORING AND REPORTING PROGRAM
WHEREAS, the Project consists of the construction of an approximately 655,468 square foot industrial warehouse building on approximately 31.1 g ross acres of vacant land in conjunction with Specific Plan Amendment SPLA24 -00002 to change approximately nine gross acres from Neighborhood Commercial (NC) to Commercial Industrial Business Park (CIBP) within the Main Street and Freeway Corridor Specific Plan; and.
WHEREAS, the Project will be accessible to US Highway 395 and ultimately Interstate 15 and will promote the City's economic development by creating approximately 549 permanent jobs for the citizens of Hesperia and surrounding communities, will increase the City's tax base, will fulfill the growing demand for distribution and light industrial uses in the region, and will develop the land to the highest and best allowable use that is compatible with the City's General Plan, and Main Street and Freeway Corridor Specific Plan; and
WHEREAS, pursuant to the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et. seq,) and the State CEQA Guidelines (14 CCR, Section 15000 et. seq.), the City of Hesperia is the lead agency for the Project as the public agency with general governmental powers; and
WHEREAS, the City of Hesperia, as lead agency, prepared an initial study, from which it was determined that an Environmental Impact Report (EIR) should be prepared pursuant to CEQA to analyze all adverse environmental impacts of the Project; and
WHEREAS, a Notice of Preparation (NOP) and the Initial Study identifying the scope of environmental issues were distributed to numerous state, federal, and local agencies and organizations from November 4, 2022 thru December 5, 2022, for a period of 30 days, pursuant to State CEQA Guidelines sections 15082(a), 15103, and 15375. Five comment letters were received during the Initial Study/NOP comment period and were incorporated into the Draft EIR (DEIR); and
WHEREAS, a public scoping meeting for the EIR was held at Hesperia City Hall on November 17, 2022, and
WHEREAS, the City completed the DEIR and circulated it with the Notice of Availability (NOA) to affected public agencies and interested members of the public for a 45-day public period from October 3, 2023 through November 16, 2023. The public review period was sub sequently extended until December 1, 2023. During the public review of the DEIR, six comment letters were received during the comment period. The letters, as well as the responses to them, are included in the Final EIR; and
WHEREAS, on March 28, 2024, the Planning Commission of the City of Hesperia conducted a duly noticed public hearing, at which time all interested parties were provided the opportunity to give testimony for or against the issue; and
Resolution No. 2024-11
WHEREAS, the City Council duly noticed and conducted a public hearing on April 16, 2024, at which time all interested parties were provided the opportunity to give testimony for or against the issue; and
WHEREAS, as contained herein, the City has endeavored in good faith to set forth the basis for its decision on the Project; and
WHEREAS, the EIR for the Project reflects the City’s independent judgment. The City has exercised independent judgment in accordance wit h Public Resources Code Section 21082.1(c)(3) in directing the consultant in the preparation of the EIR. The City has independently reviewed and analyzed the EIR and accompanying studies and finds that the report reflects the independent judgment of the City for the purposes of making decisions on the merits of the Project; and
WHEREAS, all the requirements of CEQA, the State CEQA Guidelines, and the City's Local CEQA Guidelines have been satisfied in the EIR, which is sufficiently detailed so that all of the significant environmental effects of the Project have been adequately evaluated; and
WHEREAS, the EIR prepared in connection with the Project sufficiently analyzes both the feasible mitigation measures necessary to avoid or substantially lessen the Project's environmental impacts and a range of feasible alternatives capable of eliminating or reducing these effects in accordance with CEQA, the State CEQA Guidelines, and the City's Local CEQA Guidelines.
WHEREAS, all legal prerequisites to the adoption of this Resolution have occurred.
NOW THEREFORE, BE IT RESOLVED BY THE CITY OF HESPERIA CITY COUNCIL AS FOLLOWS:
Section 1. The City Council hereby specifically finds that all the facts set forth in this Resolution are true and correct.
Section 2. Based upon substantial evidence presented to the City Council during the above- referenced April 16, 2024, hearing, including public testimony and written and oral staff reports, this City Council specifically finds as follows:
a) The City Council has independently reviewed, analyzed, and considered the Final EIR and all written documentation and public comment s prior to making recommendations on the proposed Project; and
b) The Final EIR was prepared and completed in compliance with the provisions of CEQA, the State CEQA Guidelines, and the City's Local CEQA Guidelines; and
c) The information and analysis contained in the Final EIR reflects the City’s independent judgment as to the environmental consequences of the proposed Project; and
d) The documents and other materials, including without limitation, staff reports, memoranda, maps, letters, and minutes of all relevant meetings, which constitute the administrative record of proceedings upon which the City Council’s decision is based are lo cated at the City of Hesperia, Planning
Resolution No. 2024-11
Division, 9700 Seventh Avenue, Hesperia, C A 92345. The custodian of the records is the Planning Division.
Section 3. That on the basis of the evidence contained in the administrative record of the Final EIR, the City Council finds based on the information submitted, following the conclusion of the public comment period on the Draft EIR , and following the consultant's responses thereto, there is no significant new information concerning the Project's environmental effects, feasible mitigation measures, or feasible project alternatives; therefore there is no need or requirement to recirculate the EIR for additional public comment.
Section 4. That the City Council of the City of Hesperia hereby certifies the Final EIR.
Section 5. Exhibit A (Findings of Facts and Statement of Overriding Considerations) and Exhibit B (Mitigation Monitoring and Reporting Program) of this Resolution provide findings required under Section 15091 of the State CEQA Guidelines for significant effects of the Project. Exhibit A of this Resolution provides the findings required under Section 15093 of the State CEQA Guidelines relating to the acceptable adverse impacts of the Project due to overriding considerations. The City has balanced the economic, legal, social, technological, and other benefits of the Project against the unavoidable environmental risks that may result, and finds that the specific economic, legal, social, technological, and other benefits outweigh the unavoidable adverse environmental effects. Therefore, the City Council hereby adopts the Findings of Facts and Statement of Overriding Considerations attached hereto as Exhibit A.
Section 6. Pursuant to Public Resources Code Section 21081.6, the City Council hereby approves the Mitigation Monitoring and Reporting Program attached as Exhibit B to this Resolution and requires the Project to comply with the mitigation measures contained therein.
The City Council finds that these mitigation measures are fully enforceable on the Project and shall be binding upon the City and affected parties.
Section 7. The City Clerk shall certify the adoption of this Resolution.
ADOPTED AND APPROVED this 16th day of April 2024.
_______________________________________
Larry Bird, Mayor
ATTEST:
_______________________________________
Erin Baum, Assistant City Clerk
KISS Logistics Center Project
City of Hesperia 1
Findings of Fact
December 2023
EXHIBIT A
FINDINGS AND FACTS IN SUPPORT OF FINDINGS
FOR THE FINAL ENVIRONMENTAL IMPACT REPORT FOR THE
KISS LOGISTICS CENTER PROJECT
CITY OF HESPERIA, CALIFORNIA
STATE CLEARINGHOUSE NO. 2022110097
1.0 INTRODUCTION
This statement of Findings of Fact (Findings) addresses the environmental effects associated with the proposed KISS Logistics Center Project (proposed Project), as described in the Environmental Impact Report (EIR). These Findings are made pursuant to the California Environmental Quality Act (CEQA) Public Resources Code, Section 21000 et seq., Section 21081, and the State CEQA Guidelin es Section 15091. The Draft EIR examines the full range of potential effects of construction and operation of the Project and identifies standard mitigation practices that could be employed to reduce, minimize, or avoid those potential effects.
1.1 PURPOSE
The CEQA, Public Resources Code Section 21000 et seq. and the State CEQA Guidelines, 14 Cal. Code of Regs. Section 15000 et seq. (collectively, CEQA) require that a public agency consider the environmental impacts of a project before a project is approved and make specific findings. CEQA Guidelines Section 15091, implementing CEQA Section 21081, provides:
(a) No public agency shall approve or carry out a project for which an EIR has been certified which identifies one or more significant environmental effects of the project unless the public agency makes one or more written findings for each of those significant effects, accompanied by a brief explanation of the rationale for each finding. The possible findings are:
1. Changes or alterations have been required in, or incorporated into, the project which avoid or substantially lessen the significant environmental effect as identified in the EIR.
2. Such changes or alterations are within the responsibility and jurisdiction of another public agency and not the agency making the finding. Such changes have been adopted by such other agency or can or should be adopted by such other agency.
3. Specific economic, legal, social, technological, or other considerations, including provision of employment opportunities for highly trained workers, make infeasible the mitigation measures or project alternatives identified in the final EIR.
(b) The findings required by subdivision (a) shall be supported by substantial evidence in the record. (c) The finding in subdivision (a)(2) shall not be made if the agency making the finding has concurrent jurisdiction with another agency to deal with identified feasible mitigation measures or alternatives.
The finding in subsection (a)(3) shall describe the specific reasons for rejecting identified mitigation measures and project alternatives.
(d) When making the findings required in subdivision (a)(1), the agency shall also adopt a program for reporting on or monitoring the changes which it has either required in the project or made a condition of approval to avoid or substantially lessen significant environmental effects. These measures must be fully enforceable through permit conditions, agreements, or other measures. (e) The public agency shall specify the location and custodian of the documents or other materials which constitute the record of the proceedings upon which its decision is based. (f) A statement made pursuant to Section 15093 does not substitute for the findings required by this section.
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CEQA Guidelines Section 15093 further provides:
(a) CEQA requires the decision-making agency to balance, as applicable, the economic, legal, social, technological, or other benefits of a proposed project against its unavoidable environmental risks when determining whether to approve the project. If the specific economic, legal, social, technological, or other benefits of a proposal project outweigh the unavoidable adverse environmental effects, the adverse environmental effects may be considered “acceptable.” (b) Where the lead agency approves a project which will result in the occurrence of significant effects which are identified in the Final EIR but are not avoided or substantially lessened, the agency shall state in writing the specific reasons to support its action based on the final EIR and/or other information in the record. T his statement of overriding considerations shall be supported by substantial evidence in the record.
(c) If an agency makes a statement of overriding considerations, the statement should be included in the record of the project approval and should be mentione d in the notice of determination. This statement does not substitute for, and shall be in addition to, findings required pursuant to Section 15091.
Having received, reviewed and considered the Draft Environmental Impact Report (Draft EIR) and the Final Environmental Impact Report (FEIR) for the KISS Logistics Center Project, SCH No. 2022110097 (collectively, the EIR), as well as all other information in the record of proceedings on this matter, the following Findings and Facts in Support of Findings (Findings) are hereby adopted by the City of Hesperia (City) in its capacity as the CEQA Lead Agency.
These Findings set forth the environmental basis for the discretionary actions to be undertaken by the City for the development of the Project. These actions include the approval of the Conditional Use Permit (CUP), Specific Plan Amendment (SPA), and Devel opment Plan Review . This action is referred to herein as the Project.
1.2 RECORD OF PROCEEDINGS
For purposes of CEQA and these Findings, the Record of Proceedings for the proposed Project consists of the following documents and other evidence, at a minimum:
• The NOP and all other public notices issued by the City in conjunction with the proposed Project; • The Final EIR (includes Draft EIR) for the proposed Project; • All written comments submitted by agencies and members of the public during the public review comment periods on the Draft EIR;
• All responses to written comments submitted by agencies and members of the public during the public review comment period on the Draft EIR;
• The Mitigation Monitoring and Reporting Program (MMRP); • The reports and technical memoranda included or referenced in the Response to Comments of the Final EIR;
• All documents, studies, EIRs, or other materials incorporated by reference in the Draft EIR and Final EIR; • The Ordinances and Resolutions adopted by the City in connec tion with the proposed Project, and all documents incorporated by reference therein;
• Matters of common knowledge to the City, including but not limited to federal, state, and local laws and regulations;
• Any documents expressly cited in these Findings; and
• Any other relevant materials required to be in the record of proceedings by Public Resources Code Section 21167.6(e).
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1.3 CUSTODIAN AND LOCATION OF RECORDS
The documents and other materials which constitute the administrative record for the City’s actions related to the Project are located at the City of Hesperia Planning Department, 9700 Seventh Avenue, Hesperia, CA 92345. The City is the custodian of the administrative record for the Project.
1.4 DOCUMENT FORMAT
These Findings have been organized into the following sections:
Section 1: Provides an introduction to these Findings.
Section 2: Provides a summary of the Project and overview of the discretionary actions required for approval of the Project, and a statement of the Project’s objectives.
Section 3: Provides a summary of previous environmental reviews related to the Project area that took place prior to the environmental review done specifically for the Project, and a summary of public participation in the environmental review for the Project.
Section 4: Sets forth that the Draft EIR reflects the City’s independent judgment.
Section 5: Sets forth findings regarding environmental impacts identified in the EIR which were determined to be significant and unavoidable.
Section 6: Sets forth findings regarding environmental impacts identified in the EIR which can feasibly be mitigated to a less than significant level through the imposition of project design features, regulatory requirements, and/or mitigation measures. In order to ensure compliance and implementation, all of these measures are included in the Mitigation Monitoring and Reporting Program (MMRP) for the Project which shall be adopted by the City together with these Findings in accordance with CEQA Section 21081.6. Where potentially significant impacts can be reduced to less than significant levels through adherence to project design features and regulatory requirements, these findings specify how those impacts were reduced to an acceptable level.
Section 7: Sets forth findings regarding environme ntal impacts identified in the EIR which were determined not to be significant.
Section 8: Sets forth findings regarding alternatives to the proposed Project.
Section 9: Statement of Overriding Considerations.
Section 10: Provides a summary of conclusions.
2.0 PROJECT SUMMARY
2.1 PROJECT LOCATION
The proposed Project is located within the western portion of the City of Hesperia in the southwest portion of San Bernardino County. The Project site is located northwest of the intersection of Highway 395 and Main Street. Regional access to the Project site is provided by Highway 395, located directly to the east, and I - 15, located approximately 1.2 miles east of the Project site. Local access to the site is provided via Caliente Road (unpaved road), which is accessibl e from Phelan Road to the south and Main Street to the east.
Specifically, the Project site is located within Section 16, Township 4 North, Range 5 West, San Bernardino Base and Meridian (SBB&M) of the Baldy Mesa United States Geological Survey (USGS) 7.5 -minute topographic quadrangle.
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The Project encompasses 31.1 acres, which includes the 29.61 -acre Project site and 1.3 acres of offsite improvement area. The 29.61-acre Project site is comprised of three parcels identified as Assessor’s Parcel Numbers (APNs) 3064-401-03, -04, and -05.
2.2 PROJECT DESCRIPTION
The proposed Project would include development of a single -story, 655,468-square foot (SF) industrial building on the 29.61-acre site. The proposed Project would also include a Specific Plan Amendment (SPA) to change the site’s MSFC -SP designation from NC to CIBP . Additional improvements proposed include landscaping, sidewalks, utility connections, implementation of stormwater facilities, and pavement of parking areas and drive aisles. Approximately 1.3 acres of offsite improvements would be required for necessary roadway and utility infrastructure to support the Project.
Building and Architecture. The proposed Project consists of a single -story, approximately 49 -foot-tall warehouse building. The Project building area would provide a total of 655,468 SF, inclusive of 639,468 SF of warehouse, 11,000 SF of ground floor office space, and a 5,000 SF mezzanine for additional office use. The proposed building would result in an FAR of 0.48. Additionally, the use of landscaping, building layout, finish materials, and accenting on the Project site would create a quality architectural presence from the existing and proposed public right-of-way.
Circulation and Street Improvements. Access to the proposed Project would be provided via two driveways from the proposed public road (‘A’ Street) that would be constructed along the west side of the Project. The proposed roadway would extend from Phelan Road, approximately 630 feet south of the Project site, to Yucca Terrace Drive, approximately 930 feet north of the Project site. The roadways would be built to half width (35 feet). The proposed driveways would be 40 feet wide and provide access for trucks, passenger vehicles, and emergency vehicles. Internal circulation would be provided via 40-foot drive aisles. Trucks are expected to primarily utilize Phelan Road, Highway 395, I-15, and Joshua Road, which are all designated truck routes within the City. Additionally, The Project would construct 12-foot sidewalks along the proposed ‘A’ Street and Yucca Terrace Drive. Sidewalk area would be dedicated to the City as part of the Project.
Loading Docks and Parking. Truck loading docks would be located along the east and west sides of the building. The building would include 30 loading dock doors along the east side of the building and 30 dock doors along the west side of the building for a total of 60 dock doors. The proposed Project would also provide 82 trailer stalls located opposite of the loading dock doors on the east and west perimeter of the proposed parking areas. Additionally, the building would provide 374 vehicle parking stalls inclusive of 38 electric vehicle/clean air/carpool spaces.
Landscaping and Walls. The proposed Project includes approximatel y 209,075 SF of ornamental landscaping that would extend around the perimeter of the Project site and in between the parking areas.
Additionally, the proposed Project would also include an 8-foot-tall concrete screening wall at the southern entrance of the western truck court. Additionally, the Project would include an 8-foot-tall concrete screening wall along the perimeter of the trailer parking of the eastern truck court. A 6-foot-high combination concrete masonry unit (CMU) block and wrought iron security fence is proposed around the proposed detention basin in the northern portion of the site.
Infrastructure. The proposed Project would include construction of new onsite and offsite water lines. Water lines would be constructed within the proposed ‘A’ Str eet or Caliente Road right-of-way to the west of the Project site and extend approximately 1,300 feet south toward Phelan Road. The proposed water main would then run adjacent to the existing water main within Phalen Road/Main Street for approximately 3,980 feet to Mesa Linda Street. The water main would then continue approximately 2,700 feet south and connect to the existing main at Sultana Street. The proposed water line within Phelan Road/Main Street and Mesa Linda Street has been approved and will be constructed as part of the adjacent Hesperia Commerce Center
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II Project (SCH # 2019110418). The Project would be responsible for constructing the portion of water line from along Caliente Road from Phelan Road to Yucca Terrace Road and the connection to the proposed building. The proposed Project would also include construction of new onsite and offsite sewer lines. The proposed sewer line would begin from the northern portion of “A” Street or Caliente Road and extend approximately 2,600 feet south to Phelan Road. The proposed sewer system would include a combination of proposed sewer force main and proposed sewer gravity main with a sewer lift station located at the intersection of Caliente Road and Yucca Terrace Drive. The sewer would then extend appr oximately one mile to connect to existing facilities within Cataba Road. The proposed sewer line within Phelan Road/Main Street and Mesa Linda Street has been approved and will be constructed as part of the adjacent Hesperia Commerce Center II Project (SCH # 2019110418). The Project would be responsible for constructing the portion of sewer line along Caliente Road from Phelan Road to Yucca Terrace Road and the connection to the proposed building.
2.3 REQUIRED APPROVALS
Implementation of the Project would require, but is not limited to, the following discretionary approvals by the City (Lead Agency):
• Development Plan Review
• Specific Plan Amendment
• Lot Merger
• Conditional Use Permit (CUP) (CUP22-00017)
• Certification of the Environmental Impact Report
• Approvals and permits necessary to execute the proposed Project, including but not limited to, grading permit, building permit, etc.
2.4 STATEMENT OF PROJECT OBJECTIVES
The following objectives have been identified in order to aid decision makers in their review of the proposed Project and its associated environmental impacts.
1. To make efficient use of the property and add to its potential for employment-generating uses.
2. To attract new business and employment to the City and thereby promote economic growth.
3. To reduce the need for members of the local workforce to commute outside the Project vicinity for work.
4. To develop an underutilized property with an industrial warehouse building near Highway 396 and Interstate 15, to help meet demand for logistics business in the City and surrounding region.
5. To develop the property with use that is similar to and compatible with other nearby industrial buildings that were recently built or recently approved for construction in western Hesperia.
6. Develop a project that does not contribute to surface and groundwater quality degradation by treating surface and stormwater flows.
3.0 ENVIRONMENTAL REVIEW AND PUBLIC
PARTICIPATION
The Final EIR ( FEIR) includes the Draft Environmental Impact Report ( Draft EIR) dated May 2023, written comments on the D raft EIR that were received during the public review period, written responses to those comments, and changes to the Draft EIR. In conformance with CEQA and the State CEQA Guidelines, the City
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of Hesperia conducted an extensive environmental review of the KISS Logistics Center Project, including the following:
• Completion of the Notice of Preparation (NOP), which was released for an initial 30-day public review period from November 4, 2022, through December 5, 2022. The NOP was posted at the San Bernardino County Clerk office on November 1, 2022, and to the State Clearinghouse (SCH) on November 4, 2022.
The notice was mailed to reviewing agencies and to City residents and owners within a 300-foot radius from the Project Site. Copies of the NOP were made available for public review on the City’s website at: https://www.cityofhesperia.us/1466/CEQA--Environmental-Documents. • Completion of a scoping process, in which the public was invited by the City to participate. The scoping meeting for the EIR was held on November 17, 2022, at 5:30 PM at Hesperia City Hall, Planning Department, 9700 Seventh Avenue, Hesperia, California 92345. • Preparation of a Draft EIR by the City, which was made available for a 45-day public review period from November 16, 2023, to December 1, 2023. The D raft EIR consisted of the analysis of the KISS Logistics Center Project and appendices, including the NOP and responses to the NOP. The Notice of Availability (NOA) for the D raft EIR was sent to all property owners and occupants within a 300-foot radius from the Project site, all persons, agencies, and organizations on the interest list interested persons, and posted to the SCH website for distribution to public agencies. The NOA was posted at the City of Hesperia’s Planning Department (9700 Seventh Avenue, Hesperia, California 92345) on November 16, 2023. Copies of the Draft EIR were made available for public review at Hesperia Branch Library (9650 Seventh Avenue, Hesperia, California 92345), and it was available for download via the City’s website at http://www.cityofhesperia.us/1466/Environmental-Documents. • Preparation of a Final EIR, including the Comments and Responses to Comments on the Draft EIR, occurred.
The Final EIR/Response to Comments contains comments on the Draft EIR, responses to those comments, revisions to the Draft EIR, and appended documents. The Final EIR Response to Comments was released for a 10-day agency review period prior to certification of the Final EIR on March 15, 2024. • A Planning Commission hearing was held for the proposed Project. A notice of the Planning Commission hearing for the Project was mailed on March 15, 2024 to all property owners of record within a 300 - foot radius from the Project site and all individuals that requested to be notified and posted on the City’s website at http://www.cityofhesperia.us/1466/Environmental-Documents and at the City of Hesperia’s Planning Department (9700 Seventh Avenue, Hesperia, California 92345) office, as required by established public hearing posting procedures.
4.0 CEQA FINDINGS OF INDEPENDENT JUDGEMENT
4.1 INDEPENDENT REVIEW AND ANALYSIS
The Final EIR reflects the City’s independent judgment. The City has exercised independent judgment in accordance with Public Resources Code 21082.1(c)(3) in retaining its own environmental consultant in the preparation of the Draft EIR, as well as reviewing, analyzing, and revi sing material prepared by the consultant.
Having received, reviewed, and considered the information in the Final EIR, as well as any and all other information in the record, the City hereby makes findings pursuant to and in accordance with CEQA Sections 21081, 21081.5, and 21081.6 of the Public Resources Code.
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5.0 IMPACTS DETERMINED TO BE SIGNIFICANT AND
UNAVOIDABLE
This section identifies the significant and unavoidable impacts that require a statement of overriding considerations to be issued by the City, pu rsuant to CEQA Guidelines Section 15093, if the project is approved. Based on the analysis contained in the Draft EIR, the following environmental topic area and that no further, detailed analysis of this topic was required in the EIR:
5.1 GREENHOUSE GAS EMISSIONS
5.1.1 GENERATION OF GREENHOUSE GAS EMISSIONS
Impact Finding: The Project would generate greenhouse gas emissions, either directly or indirectly, that may have a significant impact on the environment (Draft EIR Page 5.7-11).
Facts in Support of Finding:
Construction
Neither the MDAQMD nor SCAQMD has an adopted threshold of significance for construction related GHG emissions. However, lead agencies are required to quantify and disclose GHG emissions that would occur during construction. The proposed Project is compared to the GHG threshold of 3,000 MT/year CO 2e. The SCAQMD also requires construction GHG emissions to be amortized over the life of the project, defined by SCAQMD as 30 years, added to the operational emissions, and compared to the applicable interim GHG significance threshold tier. It is estimated that the Project would generate approximately 1,715.8 MT/year CO2e during construction of the Project. When amortized over the 30 -year life of the Project, annual emissions would be 57.2 MT/year CO2e (Appendix B).
Operation
Long-term operations of uses proposed by the Project would generate greenhouse gas emissions from the following primary sources: area source emissions, energy source emissions, mobile source emissions, w ater supply, treatment, and distribution, and solid waste. A project would have less than significant GHG emissions if it would result in operational-related GHG emissions of less than 3,000 MT/year CO2e. The Project would include construction and operatio n of a 655,468 SF industrial facility. The Project includes several Project Design Features (PDFs) that would reduce Project emissions and energy demand. Project PDF-1 through PDF- 6 include energy and GHG reduction measures such as implementation of renewable energy system, inclusion of automatic light switches and control receptacles, the Project would be designed to meet LEED certification standards, low volatile organic compound (VOC) coatings and paint would be used, and exterior glazing to reduce solar heat gain would be applied. As shown in Draft EIR Table 5.7 -1, the annual GHG emissions associated with construction and operation of the proposed Project would result in annual emissions of 11,630.5 MTCO2e/yr, which is above the screening threshold of 3, 000 MTCO2e/yr. Therefore, the following discussion compares the proposed Project to the efficiency-based threshold as well.
Using the Southern California Association of Governments (SCAG) employment generation rate for employees required for operation of a n industrial project, operation of the Project would require approximately 549 employees. The proposed Project would not accommodate new residents; therefore, the total service population would be 549 people (residents plus employees). As such, the propose d Project would result in a per service population of 21.2 MT CO2e per year per service population, which exceeds the SCAQMD’s threshold of 4.8 MT CO2e per year per service population. Therefore, the proposed Project would have the potential to generate si gnificant GHG emissions. As such, Mitigation Measure GHG -1 is
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included in the Project which requires that the Project incorporate sustainable transportation technologies and practices appropriate for the proposed use. Additionally, voluntary best practices have been included that could reduce Project GHG emissions and energy consumption but are not enforceable. These measures are subject to the availability of technology and/or are dependent on human behavior, which neither the applicant nor the Lead Agency can ensure. These measures have not been included in Project modeling and reductions in GHG emissions have not been taken.
Draft EIR Table 5.7 -2 shows Project operation GHG emissions with implementation of Mitigation Measure GHG-1. As shown, with implementation of Mitigation Measure GHG-1, the proposed Project would result in approximately 10,583.4 MT/year CO2e or 19.2 MT CO2e per year per service population. Due to the GHG emissions exceedance, the proposed Project would have the potential to generate dir ect or indirect GHG emissions that would result in a significant impact on the environment, thereby requiring mitigation.
Implementation of Mitigation Measure GHG -1 aims to reduce the Project's GHG emissions through minimization of construction emissions via idling limitations and use of lower-emission equipment. The measure also includes implementation of infrastructure necessary for building and vehicle electrification that meets existing and anticipated future demands. Mitigation Measure GHG-1 includes programs intended to reduce car trips of Project workers. Through implementation of Mitigation Measure GHG -1, 100 percent of the Project’s electricity demand would come from renewable energy with the support of solar panels. Overall, Mitigation Measure GHG -1 is designed to reduce Project construction and operational -source emissions.
Draft EIR Table 5.7 -2 shows the GHG emission reduction associated with implementation of Mitigation Measure GHG-1.
As shown in Table 5.7-2, Mitigation Measure GHG-1 would result in a reduction in overall GHG due to the provision of 100 percent of Project electricity through renewable energy sources. However, there is no way to quantify GHG reductions of the other components of Mitigation Measures GHG-1 in CalEEMod. Although it is likely Project emissions would decrease with implementation of the other components, to provide a conservative evaluation of Project impacts, no reductions were applied to the estimated Project emissions.
Further, 94 percent of Project emissions would primarily result from mobile source emissions, both vehicle and truck. There are no available feasible Project measures that would further reduce vehicular and truck emissions to below the GHG threshold, since neither the Project Applicant nor the Lead Agency (City of Hesperia) can substantively or materially affect reductions in Project mobile -source emissions and/or available technologies. Thus, emissions would be reduced to the extent feasible; however, emissions would continue to exceed the SCAQMD threshold. Therefore, with implementation of Mitigation Measure GHG-1, operation of the proposed Project would have the potential to generate significant GHG emissions that would have a significant effect on the environment. Impacts would be significant and unavoidable.
MITIGATION MEASURES
Mitigation Measure GHG-1: Prior to issuance of a building permit, the City of Hesperia shall identify project design details and specifications to document implementation and compliance with the following emission reduction measures. Implementation of the following measures will be required prior to building permits and is considered to be applicable, feasible, and effective in reducing greenhouse gas emissions generated by the project:
• Provide the necessary infrastructure to support zero -emission vehicles and equipment that will b e operating on site, including but not limited to running conduit to dock doors to allow for future plug-in of TRUs or truck charging.
• All loading/unloading docks and trailer spaces shall be equipped with electrical hookups for trucks with transport refrigeration units (TRU) or auxiliary power units. This requirement will substantially decrease the amount of time that a TRU powered by a fossil -fueled internal combustion engine can operate at the Project site.
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• All TRUs operated by the owner/applicant entering the project site be shall plug-in capable. • All heavy-duty trucks operated by the owner/applicant on the project site shall be model year 2014 or later, expedite a transition to zero -emission vehicles, and be fully zero -emission beginning in 2030 if feasible.
• The Project Applicant shall be in, and monitor compliance with, all current air quality regulations for on- road trucks including CARB’s Heavy-Duty (Tractor-Trailer) Greenhouse Gas Regulation, Periodic Smoke Inspection Program (PSIP), and the Statewide Truck and Bus Regulation. • Trucks and support equipment shall be prohibited from idling longer than three minutes while on site. • On-site TRU diesel engine runtime shall be limited to no longer than 15 minutes. • Include rooftop solar panels and supply 100 percent of Project electricity from renewable energy resources.
• Implement a transportation demand program. Program measures may include free transit passes for employees, electric rideshare vehicles for employees, and construction of additional transit infrastructure at the project site (see Mitigation Measure T-1 of Section 5.12, Transportation). • Install water-efficient fixtures (toilets, faucets, showers), water efficient landscape irrigation systems (drip irrigation with control panel and soil moisture sensors), and water efficient landscaping. • Keep onsite and furnishing to the lead agency of other regulators upon request, all equipment maintenance records and data sheets, including design specifications and emission control tier classification.
• Provide information on transit and ridesharing programs and services to construction employees. • Provide information on nearby meal/dining destinations for construction workers. • Run conduit to designated locations for future vehicle electric charging stations. • Expand the electrical room by 10 percent to (25 percent total) to accommodate future expansion of electric vehicle charging capability.
• Run conduit to an additional proportion of employee parking spaces for a future increase in the number of electric light-duty charging stations.
• The building shall have breakroom with food storage capabilities. • Signs shall be posted at every truck exist driveway to provide directional information to the truck route. • The owner shall provide any future tenants with information on incentive programs, such as Carl Moyer program and Voucher Incentive Program, to upgrade their fleets.
Best Practices: In addition to mitigation identified above, the following voluntary best practices would be implemented by the applicant to the greatest extent possible:
• Use the cleanest technologies available.
• Use of zero-emission all-electric plug-in TRUs, hydrogen fuel cell transport refrigeration, and cryogenic transport refrigeration shall be encouraged for operational fleets. • Operational fleets shall exclusively use zero -emission light and medium -duty delivery trucks and vans when feasible.
• Implement a zero-waste program or other feasible waste reduction measures such as composting waste food scraps from employee activities and food waste processing. • The project contractor will use Tier 4 equipment as commercially available. • Expedite a transition to zero-emission vehicles and be fully zero-emission beginning in 2030 if feasible.
5.1.2 CUMULATIVE GREENHOUSE GAS EMISSION IMPACTS
Impact Finding: The Project would result in cumulatively considerable impacts to greenhouse gas emissions (Draft EIR Page 5.7-23).
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Facts in Support of Finding: GHG emissions impacts are inherently cumulative since no single project can cause a discernible change to climate. Climate change impacts are the result of incremental contributions from natural processes, and past and present human -related activities. Therefore, the area in which a proposed Project in combination with other past, present, or future projects, could contribute to a significant cumulative climate change impact would not be defined by a geographical boundary such as a project site or combination of sites, city, or air basin. GHG emissions have h igh atmospheric lifetimes and can travel across the globe over a period of 50 to 100 years or more. Even though the emissions of GHGs cannot be defined by a geographic boundary and are effectively part of the global issue of climate change, CEQA places a boundary for the analysis of impacts at the state’s borders. Thus, the geographic area for analysis of cumulative GHG emissions impacts is the State of California.
Executive Order S-3-05, Executive Order B-30-15, Executive Order B-55-18, AB 1279, AB 32, and SB 32 recognize that California is a source of substantial amounts of GHG emissions; recognize the significance of the cumulative impact of GHG emissions from sources throughout the state; and set performance standards for reduction of GHGs.
The analysis of GHG emission impacts required under CEQA and contained in this EIR effectively constitutes an analysis of a project’s contribution to the cumulative impact of GHG emissions. CEQA Guidelines Section 15183.5(b) states that compliance with GHG -related plans can support a determination that a project’s cumulative effect is not cumulatively considerable. Although the Project would be implemented in compliance with applicable plans for the reduction of GHG emissions, detailed previously, the Project would result in a project-specific significant and unavoidable impact, and therefore, contribution of the Project to significant cumulative GHG impacts would also be cumulatively considerable.
5.2 TRANSPORTATION
5.2.1 CONFLICT WITH CEQA GUIDELINES SECTION 15064.3 (B) Impact Finding: The Project would not conflict or be inconsistent with CEQA Guidelines Section 15064.3, Subdivision (B) regarding vehicle miles traveled (Draft EIR at p. 5.9 -9). The City’s TIA Guidelines for VMT analysis were applied and found that the proposed Project would exceed the City’s threshold.
The City hereby makes Finding 1 and determines that this impact is significant and unavoidable with implementation of Mitigation Measure T-1.
Facts in Support of Finding: Section 15064.3 (B) states that “Vehicle miles traveled exceeding an applicable threshold of significance may indicate a significant impact.” The City’s TIA Guidelines (July 2020) provide VMT analysis methodology, impact thresholds, and screening thresholds to determine if projects would require a VMT analysis. If a project meets one of the following criteria, then the VMT impact of the project is considered less than significant and no further analysis of VMT would be required. The Project would not meet any of the City’s screening criteria, therefore the Project’s impact on VMT would not be considered less than significant, thus an analysis of VMT was prepared for the Project (Appendix L). As described previously, State CEQA Guidelines Section 15064.3(b) focuses on determining the significance of VMT-related transportation impacts. According to the City’s TIA Guidance, a project’s VMT impacts are considered significant if the project baseline and cumulative VMT per service population is above the County’s regional average or if the project results in a greater countywide link-level VMT per service population.
As shown in the Draft EIR Tables 5.12-4 and 5.12-5, the Project’s VMT would not be considered significant as the Countywide roadway VMT per service population would be reduced with the Project in both the 2016 and 2040 conditions. However, because the cumulative VMT per service population is above the County’s regional average of 32.7. As shown in Draft EIR Table 5.12-3, the Project would have a less than significant impact on VMT in the baseline but would exceed the City’s threshold and therefore have a significant impact
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in the cumulative conditions. The Project’s cumulative VMT per service population is forecast to be 13.51% above the County significance threshold. Therefore, the Project would have a significant impact related to VMT.
To mitigate the significant VMT impact, the Project w ill implement applicable measures from the California Air Pollution Control Officers Association (CAPCOA) Handbook for Analyzing Greenhouse Gas Emi ssion Reductions, Assessing Climate Vulnerabilities, and Advancing Health and Equity (hereafter CAPCOA). The Commute Trip Reduction Marketing (CAPCOA Measure T -7), provide a Ridesharing Program (CAPCOA Measure T-8), and provide end of trip bicycle faciliti es (CAPCOA Measure T-10) to encourage employee carpooling, use of transit, and biking as alternative modes of transportation to work (Mitigation Measure T- 1) is applicable and feasible for Project implementation to reduce VMT. A CTR Marketing strategy includes information sharing and marketing to promote and educate employees about their travel choices to the employment location. The Ridesharing Program would encourage carpooling or vanpooling by providing incentives to future employees such as priority par king spaces and/or a daily or monthly stipend for participants. As part of Mitigation Measure T -1, the Project would also install and maintain end -of-trip facilities for employee use that facilitate bicycling to work. Facilities could include bike parking, bike lockers, personal lockers, and shower facilities.
The VMT reduction resulting from the CAPCOA Measures (Mitigation Measure T -1) are calculated in Table
5.12-6 of the Draft EIR. Thus, implementation of Mitigation Measure T -1 would reduce the total VM T per service population; however, is unlikely to reduce VMT below the 32.7 Countywide significance threshold.
Therefore, with implementation of the Mitigation Measure T-1, the Project’s VMT impact would be significant and unavoidable.
MITIGATION MEASURES
MM T-1: The Project applicant shall implement Commute Trip Reduction Marketing (CAPCOA Measure T -7), provide a Ridesharing Program (CAPCOA Measure T -8), and provide end of trip bicycle facilities (CAPCOA Measure T -10) to encourage employees carpooling, tak ing transit, and biking to work. 100 percent of employees would be eligible to participate in all identified measures. Each measure is discussed further below:
1. Implement Commute Trip Reduction Marketing (CAPCOA Measure T-7). A CTR Marketing strategy includes information sharing and marketing to promote and educate employees about their travel choices to the employment location. This measure would require an on -site employee transportation coordinator and commuter information services, and on-site or online transit pass sales.
2. Provide Ridesharing Program (CAPCOA Measure T -8). Incentives for carpooling or vanpooling such as priority parking spaces and/or a daily or monthly stipend for participants. Additional incentives for carpool and/or vanpool drivers could also be provided. Preferred parking for carpool or vanpool vehicles.
3. Provide End-of-Trip Bicycle Facilities (CAPCOA Measure T -10). This measure includes installation and maintenance of end-of-trip facilities for employee use that facilitate bicycling to work. Facilities could include bike parking, bike lockers, personal lockers and shower facilities. Initially, the project shall provide secure bicycle parking (bicycle racks or lockers) for at least 9 bicycles (consistent with San Bernardino County Code Section 83.14.030 which requires secure bicycle parking at a rate of one per 30 parking spaces).
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Findings of Fact
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To comply with components 1 and 2 of MM T -1, tenants of the Project could participate in the IE Commuter program (iecommuter.org) or alternative program.
Monitoring of the program shall be conducted by the onsite transportation coordinator and an annual re port shall be provided to the City. The report shall include a summary of the current CTR program, the number of employees participating in the program, summary of any partnerships with outside agencies such as IE Commuter, and total amount of subsidies pr ovided by type (if any). If Project tenants choose to comply with MM T-1 via participation in the IE Commuter program, then the Commute Activity Report provided by IE Commuter shall be sufficient for annual reporting.
6.0 IMPACTS DETERMINED TO BE LESS THAN
SIGNIFICANT WITH MITIGATION
The following potentially significant environmental impacts were analyzed in the Draft EIR and were determined to be less than significant with implementation of project design features, compliance with existing laws, codes and statutes, regulatory requirements, and implementation of identified feasible mitigation measures. The City has found in accordance with CEQA Section 21081(a)(1) and CEQA Guidelines Section 15091(a) (1) that “Changes or alterations have been required in, or incorporated into, the project which mitigate or avoid the significant effects on the environment,” which is referred to herein as “Finding 1”.
Where the potential impact can be reduced to less than significant solely through adherence to and implementation of project design features, standard conditions, and plans, programs, or policies, these measures are considered “incorporated into the project,” which mitigate or avoid the potentially significant effect, and in these situations, the C ity also makes “F inding 1” even though no mitigation measures are required. Based on substantial evidence, the City finds that adoption of the mitigation measures set forth in this section will reduce the identified significant impacts to less than significant levels:
• Biological Resources
o Candidate, Sensitive, or Special-Status
Species
o Adverse Impacts on Riparian
Habitat/Sensitive Natural Communities
o Adverse Impacts on Wildlife Movement
o Conflict with Biological Resources
Protection Policies and Ordinances
o Cumulative Biological Resource Impacts
• Cultural Resources
o Archaeological Resources
o Cumulative Cultural Resource Impacts
• Geology and Soils
o Seismic-related ground failure
o Unstable geological unit
o Paleontological resources
o Cumulative paleontological impacts
• Tribal Cultural Resources
6.1 BIOLOGICAL RESOURCES
6.1.1 CANDIDATE, SENSITIVE, OR SPECIAL-STATUS SPECIES
Impact Finding: The Project would not have a substantial adverse effect, either directly or through habitat modifications, on any species identified as a candidate, sensitive, or special status species in local or regional plans, policies, or regulations, or by the California Department of Fish and Wildlife or U.S. Fish and Wildlife Service (Draft EIR Page 5.3-13).
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Findings of Fact
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The City hereby makes Finding 1 and determines that this impact is less than significant with implementation of Mitigation Measure BIO-1 through BIO-13.
Facts in Support of Finding:
One state listed special -status plant species (the western Joshua tree) was observed within the biological survey area (BSA): .
No non-listed special-status plant species were observed or have high or moderate potential to occur within the BSA; therefore, the Project would have no direct or indirect impacts to non -listed special-status plant species. In addition, the BSA does not occur within a federally designated critical habitat for special -status plant species, and there would be no direct impacts to critical habitats.
Western Joshua Trees
Direct Impacts
Western Joshua tree, a candidate species for state listing under CESA at the time the DEIR was prepared, was observed on the Project site and would be directly impacted by the Project. The Western Joshua Tree Conservation Act was passed on June 27, 2023. The act provides a streamlined mitigation option for payment of in lieu fees for the removal of Joshua trees as protected under the act and under CESA. The Western Joshua Tree Conservation Act has a direct nexus to the conservation of Western Joshua trees and the costs have been established by the CFGC and CDFW to capture adequate costs for acquiring, conserving, and managing western Joshua tree conservation lands and completing other activities to conserve the western Joshua tree. All in -lieu fees collected will be deposited into the Western Joshua Tree Conservation Fund for appropriation to CDFW solely for the purposes of acquiring, conserving, and managing western Joshua t ree conservation lands and completing other activities to conserve the western Joshua tree.
The Project would result in direct impacts to 248 western Joshua tree individuals. All ground -disturbing activities are considered permanent impacts to western Joshua trees. Direct impacts to western Joshua tree are considered significant absent mitigation under CEQA. Of the 248 western Joshua tree individuals, several overlap the Hesperia Commerce Center II project (ITP No. 2021 -038-06) (see Draft EIR Figure 5.3-2). The project that takes those trees first would be responsible for the mitigation of those subject trees and the latter project would not be required to mitigate for the take of the trees.
As required by Mitigation Measure (MM) BIO-2 (Conservation of Western Joshua Tree Lands), mitigation for direct impacts to western Joshua trees, their seed bank, and associated habitat will be fulfilled through conservation of western Joshua trees through a payment of fees consistent with The Western Joshua Tree Conservation Act or through payment to a CDFW -approved mitigation bank as approved by the City of Hesperia and CDFW. In addition, implementation of MM BIO -3 (Compliance Monitoring), MM BIO -4 (Education Programs), and MM BIO -5 (Construction Monitoring Notebook) wou ld further reduce potential direct impacts during Project construction to a less-than significant level.
In addition, project applicants are required to submit an application and pay applicable fees to the City of Hesperia for removal or relocation of pro tected native desert plants under Hesperia Municipal Code Chapter 16.24. Per City policy, obtainment of an Incidental Take Permit (ITP), and corresponding mitigations, through CDFW would satisfy the City’s requirements under Chapter 16.24 of the City Municipal Code, and therefore, a relocation plan as included under MM BIO-1 would not be required so long as the requirements of CESA and/or the Western Joshua Tree Conservation Act are met.
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Findings of Fact
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Indirect Impacts
Indirect impacts are considered any reasonably fores eeable effects caused by a project’s implementation on remaining or adjacent biological resources outside the direct disturbance zone. Construction -related, short-term indirect impacts may include inadvertent spillover impacts outside of the construction f ootprint, dust accumulation on Joshua trees, chemical spills, stormwater erosion and sedimentation, and increased wildfire risk.
Potential long -term (post -construction) indirect impacts from operation and maintenance activities may include effects of herbi cides, changes in water quality, increased wildfire risk, induced demand of the surrounding area, increased traffic and vehicle emissions, and accidental chemical spills. Indirect impacts to Joshua trees are considered significant absent mitigation.
MM BIO-3 (Compliance Monitoring) requires that an experienced biologist oversee compliance with the protective measures, including limiting impacts to the Project impact footprint. MM BIO-4 (Education Program) would provide construction personnel with training related to western Joshua trees that are present on and adjacent to the impact footprint. MM BIO-5 (Construction Monitoring Notebook) provides for documentation that the education program was administered to applicable personnel. MM BIO-6 (Delineation of Property Boundaries) requires that impacts occur within the fenced, staked, or flagged area that is clearly delineated within the Project impact footprint. The construction crew will be responsible for unauthorized impacts from construction activities to wes tern Joshua trees that are outside the permitted Project footprint. Thus, implementation of MM BIO-3 through MM BIO-6 will enable the Project to avoid and minimize inadvertent spillover impacts outside of the Project footprint.
To reduce fugitive dust resu lting from Project construction and to minimize adverse air quality impacts, the Project would employ dust mitigation measures in accordance with the Mojave Desert Air Quality Management District’s Rules 401 and 403.2, which limit the amount of fugitive du st generated during construction.
MM BIO -7 (Hazardous Waste) would ensure that a prompt and effective response to any accidental chemical spills will be implemented, and that repair and clean -up of any hazardous waste occurs. Thus, implementation of MM BIO -7 (Hazardous Waste) would help to avoid and minimize impacts to western Joshua tree from any construction-related chemical spills.
A Stormwater Pollution Prevention Plan (SWPPP) would be prepared and implemented to prevent all construction pollutants from contacting stormwater during construction activities (PPP HYD -2 of Section 5.9, Hydrology and Water Quality), with the intent of keeping sediment and any other pollutants from moving off site and into receiving waters. Best management practice categories employed on site would include erosion control, sediment control, and non-stormwater good housekeeping. Preparation and implementation of a SWPPP would help to avoid and minimize the potential effects of stormwater erosion during construction.
Construction of the Project would introduce potential ignition sources to the Project site, including the use of heavy machinery and the potential for sparks during welding activities or other hot work. However, the Project would be required to comply with City of Hesperia and state requirements for fire safety practices to reduce the possibility of fires during construction activities. Further, vegetation would be removed from the site prior to the start of construction. Adherence to City of Hesperia and state regulat ory standards during Project construction would reduce the risk of wildfire ignition and spread during construction activities.
Therefore, short-term construction impacts involving wildland fires would not be substantial.
MM BIO-8 (Herbicides) would limit herbicide use to instances where hand or mechanical efforts are infeasible and would only be applied when wind speeds are less than 7 miles per hour to prevent drift into off -site western Joshua trees.
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Findings of Fact
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Implementation of low-impact-development features and best management practices, as specified under the Project WQMP (PPP HYD -3, Section 5.9 Hydrology and Water Quality) would, to the maximum extent practicable, reduce the discharge of pollutants into receiving waters, including inadvertent release of pollutants (e.g., hydraulic fluids and petroleum); the improper management of hazardous materials; trash and debris; and the improper management of portable restroom facilities (e.g., regular service) in accordance with all relevant local and state development st andards. In addition, in accordance with CALGreen requirements (California Green Building Standards Code, CCR, Title 24, Part 11), Project source controls to improve water quality would be provided for outdoor material storage areas, outdoor trash storage/waste handling areas, and outdoor loading/unloading areas. Therefore, impacts to western Joshua trees due to changes in water quality would be avoided and minimized through implementation of low - impact-development features and best management practices.
Conclusion
Implementation of MM BIO -1 (Relocation of Desert Native Plants), MM BIO -2 (Conservation of Western Joshua Tree Lands), MM BIO-3 (Compliance Monitoring), MM BIO-4 (Education Programs), and MM BIO -5 (Construction Monitoring Notebook) would reduce po tential direct impacts to western Joshua trees to less than significant. Implementation of MM BIO-3 (Compliance Monitoring), MM BIO-4 (Education Program), MM BIO-5 (Construction Monitoring Notebook), MM BIO -6 (Delineation of Property Boundaries), MM BIO -7 (Hazardous Waste), and MM BIO-8 (Herbicides), would reduce potential indirect impacts to western Joshua tree to less than significant. Therefore, the Project would result in less than significant impacts with mitigation on special status plant species.
Wildlife Species
As described above, four special-status wildlife species, burrowing owl ( Athene cunicularia), loggerhead shrike ( Lanius ludovicianus ), LeConte’s thrasher ( Toxostoma lecontei ), and Mohave ground squirrel (Spermophilus (Xerospermophilus) mohavensis) had a moderate potential to occur within the BSA. In addition, two special-status wildlife species, Mojave desert tortoise and Crotch bumble bee (Bombus crotchii), have a low potential to occur within the BSA. Focused surveys conducted for Mohave gro und squirrel and Mojave desert tortoise were negative and therefore these species are not expected to occur and will not be analyzed further.
Construction
Indirect impacts to special-status wildlife species are those that occur during construction to species present near the site, but not within the construction zone. These include fugitive dust that can degrade habitat and result in health implications for wildlife species; noise and vibration that can stress wildlife species or cause them to leave an area of otherwise suitable habitat, or that can result in disruption of bird nesting and abandonment of nests; increased human presence, which can also disrupt daily activities of wildlife and cause them to leave an area; night-time lighting, which can disrupt the activity patterns of nocturnal species, including many mammals and some birds, amphibians, and reptiles; and release of chemical pollutants, such as from oil leaks from construction vehicles and machinery.
Project construction cou ld result in significant, indirect impacts to four special -status wildlife species:
loggerhead shrike, LeConte’s thrasher, burrowing owl, and Crotch bumble bee. Those impacts could include dust, noise and vibration, increased human presence, vehicle collisions, chemical spills, and night-time lighting.
Loggerhead shrike and LeConte’s thrasher
In the event that construction is required to occur during bird nesting season, MM BIO -9 (Pre-construction Nesting Bird Surveys and Avoidance) would require nesting b ird surveys. In the event nests are not found, no further mitigation would be required. In the event that nests are found, a qualified biologist will implement