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MODESTO CITY COUNCIL
www.modestogov.com
AGENDA
City of Modesto
CITY COUNCIL MEETING
Chambers, Basement Level
Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, June 07, 2022 at 5:30 PM
*Roll Call - Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Mayor Zwahlen
* Some Councilmembers may be participating in the meeting remotely via teleconferencing or other electronic means consistent with the AB 361.
THIS MEETING WILL BE PHYSICALLY OPEN TO THE PUBLIC AND BY ZOOM
VIDEO CONFERENCING AND TELEPHONE
In order to minimize the spread of the COVID-19 virus, this meeting will be conducted pursuant to AB 361, which amended the Brown Act’s teleconferencing provisions.
You may observe a livestream of the meeting at http://media.modestogov.com. You may also participate in the meeting as indicated below.
PARTICIPATING IN CITY COUNCIL MEETINGS IN CONFORMANCE WITH AB 361
The City of Modesto is providing alternatives to view Council meetings and provide public comments. If you wish to make either a general public comment or to comment on a specific agenda item, you may use one of the following options:
SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Councilmembers - 1 -
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and placed in the record, but will not be read aloud during the meeting. Written comments must be received by 3:00 p.m. on the day of the meeting.
VIRTUAL PARTICIPATION BY ZOOM VIDEO
CONFERENCING AND TELEPHONE
Joining the City Council meeting via Zoom
The City of Modesto is now offering the ability to view and participate in Council meetings via telephonic conferencing via “Zoom” video conferencing computer technology. The meeting may be accessed through the use of Zoom using the following options:
Enter the following link into an Internet Browser
https://us02web.zoom.us/j/86945970570,
Enter the following link into an Internet Browser https://zoom.us/ and using the Webinar ID 869 4597 0570
Passcode 84326
To use Zoom, please visit: https://zoom.us/ and either sign-up for a free Zoom account or continue as a guest. Once you have downloaded the app onto your mobile device, joined from your web browser, or downloaded the Zoom software on your computer you will be ready for the upcoming Council meeting.
Joining the City Council meeting via Telephone
If you don’t have a smart phone or computer to access the meeting via Zoom, you can participate by phone, by calling 1-877-853-5257 (Toll Free) or 1-888-475-4499 (Toll Free) and enter the Webinar ID 869 4597 0570 Passcode 84326
Providing Public Comment on Zoom and by Telephone
The Mayor will request public comment during the Public Comment periods on the meeting agendas and during each Public Hearing and Regular Calendar Item on the Council Agenda.
Once the Mayor has announced the public comment period, please do one of the following.
USING A COMPUTER OR SMART PHONE APP:
Click on the “Raise Hand” feature in the webinar controls. This will notify City staff that you have raised your hand.
City staff will unmute your microphone when it is your turn to provide public comment.
A prompt will appear to confirm you would like to be unmuted and then you will have three minutes to provide public comment.
Once your public comment has ended, you will be muted again.
USING A REGULAR PHONE (not using a computer or smart phone APP):
Dial *9 (star 9), this will notify City staff that you have “raised your hand” for public comment.
City staff will unmute your microphone when it is your turn to provide - 2 -
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public comment.
You will hear “you are unmuted” and then you will have three minutes to provide public comment.
Once your public comment has ended, you will be muted again. If your phone is unmuted, and you are unable to be heard, the host may ask that you Dial *6 to toggle mute on/off in Zoom.
Additional Zoom resources/support
Please visit Zoom’s website support page on helpful tips to prepare for the meeting:
https://support.zoom.us/hc/en-us/categories/201146643
Pledge of Allegiance to the Flag
Invocation: Jon Apodaca, Good Life
City Clerk’s Announcements
Declaration of Conflicts of Interest
Reports from Closed Session
ACKNOWLEDGEMENTS AND PRESENTATIONS
1. Presentation of Proclamation declaring June 2022 as Men's Health Month. (Funding Source: Not Applicable)
CITY COUNCIL; Kathy Espinoza, 209-571-5597, [email protected]
2. Presentation of Proclamation declaring June 2022 as Pride Month. (Funding Source:
Not Applicable)
CITY COUNCIL; Kathy Espinoza, 209-571-5597, [email protected]
PUBLIC COMMENT PERIOD
Please refer to special public comment instruction above Three-minute time limit per speaker
Only interested persons in the audience may present these matters. Under State law, Councilmembers may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Councilmember or the Council itself may take action to direct staff to place a matter of business on a future agenda.
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CONSENT ITEMS – ROLL CALL VOTE REQUIRED
Information concerning the consent items listed below has been forwarded to each Councilmember prior to this meeting for study. Unless some member of the audience or Councilmember has a question concerning an item and asks that it be withdrawn from the consent list, the Council approves the items at one time. The action taken by the Council in approving consent items is set forth in the explanation of this individual item.
Any and all of the following agenda items are subject to action by the Modesto City Council.
This Agenda is on file at the Modesto-Stanislaus Library Reference Room, 1500 I Street, Modesto, in the City Clerk’s Office, Sixth Floor, 10th Street Place, and is available on the City’s Web site at www.modestogov.com.
In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.
CONSENT ITEMS
An item may be removed from consent and discussed at the request of an audience member or Councilmember.
Consent
3. Consider approving the minutes from the May 24, 2022 Council Meeting. (Funding Source: Not Applicable)
Staff Recommendation:
Motion approving the minutes from the May 24, 2022 Council Meeting.
CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] Consent
4. Consider calling for the holding of a Municipal Election to be held on November 8, 2022, requesting the Stanislaus County Board of Supervisors to Consolidate the City of Modesto Municipal Election to be held on November 8, 2022, requesting the services of the Registrar of Voters, Elections Division of the County of Stanislaus to conduct the Election on behalf of the City of Modesto and the Modesto City School Board; and adopting regulations for candidates for elective office pertaining to candidates - 4 -
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statements submitted to the voters at an Election to be held on Tuesday, November 8, 2022. (Funding Source: Election Fund)
Staff Recommendation:
Resolution of the City of Modesto calling for the holding of a Municipal Election to be held on November 8, 2022, requesting from the Stanislaus County Board of Supervisors to Consolidate the City of Modesto Municipal Election to be held on November 8, 2022, requesting the services of the Registrar of Voters, Elections Division of the County of Stanislaus to Conduct the Election on behalf of the City of Modesto and the Modesto City Schools Board.
Resolution adopting Regulations for Candidates for Elective Office Pertaining to Candidates Statements Submitted to the Voters at an Election to be held on Tuesday, November 8, 2022.
CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] Consent
5. Consider receiving the 2022 Local Agency Biennial Notice and directing staff to conduct a review of the City’s Conflict of Interest Code and the filing of a Biennial Notice with the City Clerk regarding such review, as required by the Political Reform Act. (Funding Source: Not Applicable)
Staff Recommendation:
Motion directing staff to make a formal review of the City’s Conflict of Interest Code, pursuant to the Political Reform Act, and if necessary at the appropriate time thereafter, prepare a resolution to be adopted by the City Council to approve any required amendments.
CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] Consent
6. Consider approving the recommended budget adjustments to Fiscal Year 2021-22 Annual Operating and Capital Improvement Program Budgets. (Funding Source:
Various Funds)
Staff Recommendation:
Resolution amending the Fiscal Year 2021-22 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to take the necessary steps to implement the provisions of this resolution.
BUDGET; Steve Christensen, 209-577-5390, [email protected] Consent
7. Consider acknowledging Receipt of Notification of the Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees Fiscal Year 2022-23. (Funding Source: Capital Facilities Fees and Development User Fees) Staff Recommendation:
Resolution acknowledging Receipt of Notification of the Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees Fiscal Year 2022-23.
CED; Jessica Hill, 209-577-5321, [email protected]
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Consent
8. Consider approving the updates to the City’s Debt Management Policy. (Funding Source: Not Applicable)
Staff Recommendation:
Resolution approving the updates to the City’s Debt Management Policy.
FINANCE DEPARTMENT; Calogero Maniscalco, 209-577-5219,
[email protected]
Consent
9. Consider accepting the Monthly Investment Report for March 2022. (Funding Source:
Various Funds)
Staff Recommendation:
Motion accepting the Monthly Investment Report for March 2022.
FINANCE DEPARTMENT; Calogero Maniscalco, 209-577-5219,
[email protected]
Consent
10. Consider accepting an informational report for the April 2022 Accounts Payable Payment Register and Void report. (Funding Source: Not Applicable) Staff Recommendation:
Motion accepting an informational report for the April 2022 Accounts Payable Payment Register and Void report.
FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]
Consent
11. Consider accepting an informational report on the January and February 2022 grant applications and awards. (Funding Source: Not Applicable) Staff Recommendation:
Motion accepting an informational report for the January and February 2022 grant applications and awards.
FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]
Consent
12. Consider approving the Fiscal Year 2022-2023 Appropriation Limit, which is an annual spending limit calculation that identifies the maximum amount of appropriations for publicly funded programs. (Funding Source: Not Applicable) Staff Recommendation:
Resolution establishing the appropriation limit for the Fiscal Year 2022-2023 annual budget.
FINANCE DEPARTMENT; Maria Garnica, 209-577-5249,
[email protected]
Consent
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13. Consider approving the First Amendment increasing the Agreement amount with the Public Group aka Public Surplus for the Furnishing of Online Auction Services by $12,000 annually from $18,000 to a revised annual estimated amount of $30,000 and for a revised total amount not to exceed of $114,000 over five years. (Funding Source:
Various Funds)
Staff Recommendation:
Resolution approving the First Amendment increasing the Agreement amount with the Public Group aka Public Surplus for the Furnishing of Online Auction Services by $12,000 annually from $18,000 to a revised amount estimated amount of $30,000 and for a revised total amount not to exceed $114,000 over five years and authorizing the City Manager or his designee to execute the amendment.
FINANCE DEPARTMENT; Cynthia Kline, 209-577-5412, [email protected] Consent
14. Consider approving payment of various Equipment Maintenance Agreements for Fiscal Year 2022-2023 with multiple equipment manufacturers for all City Departments, for an annual cost not to exceed $706,022; and authorizing the City Manager, or his designee to execute Equipment Maintenance Agreements associated with the items in Exhibit B – Fiscal Year 2022-2023 Equipment Maintenance Agreements (more than $50,000). (Funding Source: Various Funds)
Staff Recommendation:
Resolution approving payment of various Equipment Maintenance Agreements for Fiscal Year 2022-2023 with multiple equipment manufacturers for all City Departments, for an annual estimated cost not to exceed $706,022; and authorizing the City Manager, or his designee, to execute Equipment Maintenance Agreements associated with the items in Exhibit B – Fiscal Year 2022-2023 Equipment Maintenance Agreements (more than $50,000).
FINANCE DEPARTMENT; DeAnna Christensen, 209-577-5387,
[email protected]
Consent
15. Consider approving the payment of Hardware and Software Maintenance Support Agreements for Fiscal Year 2022-2023 for an estimated annual cost not to exceed $6,282,787; and Authorizing the City Manager, or his designee to execute routine Renewal Agreements associated with the items in Exhibit B - Hardware/ Software Maintenance Support Agreements for Fiscal Year 2022-2023 (Over $50,000). (Funding Source: Information Technology Fund and Various Funds)
Staff Recommendation:
Resolution approving the payment of Hardware and Software Maintenance Support Agreements for Fiscal Year 2022-2023 for an estimated annual cost not to exceed $6,282,787; and to authorize the City Manager, or his designee to execute routine Renewal Agreements associated with Exhibit B.
IT; Kevin Harless, 209-571-5593, [email protected] Consent
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16. Consider approving the Sole Source Purchase Order with StarChase for 25 Global Positioning System tracking units for law enforcement use for a total cost not to exceed $161,698. (Funding Source: Traffic Safety Fund)
Staff Recommendation:
Resolution approving the Sole Source Purchase Order with StarChase for 25 Global Positioning System tracking units for law enforcement use for a total cost not to exceed $161,698; and authorizing the Purchasing Manager, or her designee, to issue the Purchase Order.
POLICE DEPARTMENT; Steven Stanfield, 209-572-9500, [email protected] Consent
17. Consider approving an Agreement with National Plant Services, Inc., Hayward, CA, for Pipe Inspection and Assessment Services for the River Trunk Inspection and Assessment Project in the amount of $163,000, plus $16,300 for additional services, if needed, for a total amount not to exceed $179,300 and amending the FY 2021/22 Multi-Year Program Budget in the amount of $189,300. (Funding Source: Wastewater Fund)
Staff Recommendation:
Resolution approving an Agreement with National Plant Services, Inc., Hayward, CA, for Pipe Inspection and Assessment Services for the River Trunk Inspection and Assessment Project in the amount of $163,000 for the identified scope of services, plus $16,300 in additional services, if needed, for a total amount not to exceed $179,300 and authorizing the City Manager, or his designee, to execute the Agreement.
Resolution amending the Fiscal Year 2021/22 Multi-Year Program Budget in the amount of $189,300 to be transferred into the project from Wastewater Fund Reserves in order to fully fund the River Trunk Inspection and Assessment Project.
UTILITIES; Robert Englent, 209-577-6222, [email protected]
COUNCIL COMMENTS & REPORTS
CITY MANAGER COMMENTS & REPORTS
HEARINGS
Published in the Modesto Bee on May 27, 2022
18. Hearing to consider and approve the Final Proposed Fiscal Year 2022-23 Operating and Multi-Year Budget and Capital Improvement Program for the City and related Resolutions. (Funding Source: All City Funds)
Staff Recommendation:
Resolution approving the adoption of the Fiscal Year 2022-23 Annual and Multi-Year Operating Budgets and the 2022-23 Capital Improvement Program for the City of Modesto and the related Inter-Fund Transfers. Resolution approving the Budget Principles, Policy on Workers Compensation - 8 -
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Fund for FY 2022-23, and the Operating Budget Policy as outlined in the Fiscal Year 2022-23 Final Proposed Budget.
Resolution amending the Position Allocation for Fiscal Year 2022-23 as adopted in the Operating Budget.
Resolution amending the Classification Plan for the City of Modesto to create the classification of Police Administrator.
Resolution approving a Leave Bank Purchase option for Modesto City Employees, Modesto Confidential and Management Association, and Modesto Police and Fire Nonsworn Association and authorizing the City Manager or his designee to execute the transactions.
Resolution adopting the Council Unfunded Pension Liability Policy.
BUDGET; Stephan Christensen, 209-577-5390, [email protected]
NEW BUSINESS
19. Consider approving a successor Memorandum of Understanding (MOU) between the City of Modesto and Modesto City Fire Fighters Association (MCFFA) for a term of July 1, 2022 to June 30, 2024; granting salary changes and benefit offerings to nonsworn unrepresented management and confidential employees including charter officers, executives and unrepresented sworn fire employees; and rescinding Resolution Nos. 2020-310 and 2021-346. (Funding Source: General Fund) Staff Recommendation:
Resolution approving a proposed agreement including language changes for a successor Memorandum of Understanding (MOU) between the City of Modesto and Modesto City Fire Fighters Association (MCFFA) for a term of July 1, 2022 to June 30, 2024, authorizing the City Manager to prepare and execute the successor MOU and authorizing the City Manager or his designee to take the necessary administrative action to implement the agreement. Resolution granting salary changes to Unrepresented Sworn Fire Management employees, effective July 22, 2022 and Non-Sworn Unrepresented Management and Confidential employees including Charter Officers and Executives, effective November 26, 2019; rescinding Resolution No. 2020-310, and authorizing the City Manager or his designee to take the necessary administrative action to implement the changes.
Resolution updating benefit offerings for Unrepresented Sworn Fire Management and Non-Sworn Management and Confidential employees, including Charter Officers and Executives; rescinding Resolution No. 2021-346 and authorizing the City Manager or his designee to take the necessary administrative action to implement the changes.
HUMAN RESOURCES; Christina Alger, 209-571-5126, [email protected]
MATTERS TOO LATE FOR THE AGENDA
These may be presented by members of the City Council and staff upon determination by a majority vote that an emergency exists, as defined by State law, or by a 2/3 vote that (1) there is a need to take immediate action, and (2) that the need for action came to the City’s attention after the agenda was posted.
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ADJOURNMENT
CLOSED SESSION
Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on
TUESDAY, JUNE 7, 2022 at 4:30 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.
Any and all of the following agenda items are subject to action being taken by the Modesto City Council.
The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:
CLOSED SESSION
PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Pursuant to Section 54957 of the Government Code)
Title: City Attorney
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
One Case (Pursuant to Section 54956.9(d)(1) of the Government Code) Name of Case: Cherry v. City of Modesto
Case No. 1:18-CV-01268
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on
at by
date time signature
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MODESTO CITY COUNCIL
www.modestogov.com
MINUTES
City of Modesto
CITY COUNCIL MEETING
Chambers, Basement Level
Tenth Street Place, 1010 10th Street
Modesto, California
Tuesday, May 24, 2022 at 5:30 PM
Roll Call - Councilmembers Escutia-Braaton, Kenoyer, Madrigal, Ricci, Wright, Mayor Zwahlen
Pledge of Allegiance to the Flag
Invocation: Mark Krieger, Modesto Covenant Church
City Clerk’s Announcements City Clerk reported, 1) No email correspondence was received and 2) Item 1 Appointments to the Standing Committees and City Council Liaison Committees has been amended to include Councilmember Rosa Escutia-Braaton and Mayor Sue Zwahlen as Alternates to the StanCOG Executive Committee.
Declaration of Conflicts of Interest - Councilmember Ricci recused himself from item 6.
Reports from Closed Session - City Attorney Sanchez reported no reportable action was taken.
MISCELLANEOUS
1. Consider approving the Mayor’s appointments to the City of Modesto Standing Committees, and City Council Liaison Committees. (Funding Source: Not Applicable) Staff Recommendation:
Motion approving the appointments to the Standing Committees and City Council Liaison Committees.
CITY MANAGER; Allison Van Guilder, 209-577-5228, [email protected] #3..
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ACTION: (Wright/Escutia-Braaton; 6/0) Motion approving the appointments to the Standing Committees and City Council Liaison Committees.
2. Consider accepting the resignation of Lynn Dickerson from the City’s Blight Abatement Advisory Committee. (Funding Source: Not Applicable) Staff Recommendation:
Resolution accepting the resignation of Lynn Dickerson from the City of Modesto Blight Abatement Advisory Committee.
CITY MANAGER; Scotty Douglass, 209-577-9149, [email protected] ACTION: (Wright/Escutia-Braaton; 6/0) Resolution 2022-230 accepting the resignation of Lynn Dickerson from the City of Modesto Blight Abatement Advisory Committee.
3. Consider approving the appointment of Matthew Speckman to the Stanislaus Animal Services Agency Advisory Committee. (Funding Source: Not Applicable) Staff Recommendation:
Resolution approving the appointment of Matthew Speckman to the Stanislaus Animal Services Agency Advisory Committee for a 2-year term beginning June 1, 2022.
CITY MANAGER; Scotty Douglass, 209-577-9149, [email protected] ACTION: (Wright/Escutia-Braaton; 6/0) Resolution 2022-231 approving the appointment of Matthew Speckman to the Stanislaus Animal Services Agency Advisory Committee for a 2-year term beginning June 1, 2022.
PUBLIC COMMENT PERIOD
Jeremiah Williams asked for a moment of silence in honor of the recent passing of Sean Harrison.
Bret Burnside, from the Modesto Kiwanis thanked Council for their support with the Graffiti Parade.
CONSENT ITEMS – ROLL CALL VOTE REQUIRED
ACTION CONSENT ITEMS 4, 5, 7-14: (Kenoyer/Wright; 6/0)
CONSENT ITEMS
Consent
4. Consider approving the minutes from the May 10, 2022 Council Meeting. (Funding Source: Not Applicable)
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Motion approving the minutes from the May 10, 2022 Council Meeting.
CITY CLERK; Diane Nayares-Perez, 209-577-5396, [email protected] ACTION: (Kenoyer/Wright; 6/0) Motion approving the minutes from the May 10, 2022 Council Meeting.
Consent
5. Consider approving a resolution continuing to authorize remote teleconference meetings pursuant to Assembly Bill 361. (Funding Source: Not Applicable) Resolution continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361.
CITY ATTORNEY; Jose Sanchez, 209-577-5284, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-232 continuing to authorize remote teleconference meetings of the City of Modesto pursuant to Assembly Bill 361.
Removed from Consent
6. Consider approving the First Amendment with TBWBH Props & Measures, San Francisco, CA for City of Modesto Professional Polling/Public Opinion Research Services, increasing the scope of services to include Task 2 to increase the Agreement by $114,634 including a 5% contingency, from $49,263 for a new estimated total amount not to exceed $163,897. (Funding Source: General Fund) Resolution approving the First Amendment with TBWBH Props & Measures, San Francisco, CA for City of Modesto Professional Polling/Public Opinion Research Services, increasing the scope of services to include Task 2 to increase the Agreement by $114,634 including a 5% contingency, from $49,263 for a new estimated total not to exceed an amount of $163,897 and authorizing the City Manager, or his designee, to execute the Amendment.
FINANCE; Steve Christensen, 209-577-5390, [email protected] ACTION: (Kenoyer/Wright; 5/0; Ricci Recuse) Resolution 2022-233 approving the First Amendment with TBWBH Props & Measures, San Francisco, CA for City of Modesto Professional Polling/Public Opinion Research Services, increasing the scope of services to include Task 2 to increase the Agreement by $114,634 including a 5% contingency, from $49,263 for a new estimated total not to exceed an amount of $163,897 and authorizing the City Manager, or his designee, to execute the Amendment.
Consent
7. Consider approving an Equipment Use and Broadcasting Agreement with Central Valley Media Center MyTV26 for the purchase and lease of a TelVue HyperCaster AIO B2000-4+ Digital Broadcast Server from TelVue Corporation, for an amount of $33,236 plus $3,324 in contingency for a total amount not to exceed $36,560, amending the Fiscal Year 2021-22 Annual Operating Budget to increase the expenditure budget in the Public Educational and Governmental Fund cost center in the amount of $36,560 to fund the purchase of the server and authorizing the City Manager #3..
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to negotiate and execute the final terms of the Agreement with Central Valley Media MyTV26. (Funding Source: Public, Education, and Government (PEG) Funds) Resolution approving an Equipment Use and Broadcasting Agreement with Central Valley Media Center MyTV26 for the purchase and lease of a TelVue HyperCaster AIO B2000-4+ Digital Broadcast Server from TelVue Corporation, for an amount of $33,236 plus $3,324 in contingency for a total amount not to exceed $36,560, and authorizing the City Manager to negotiate and execute the final terms of the Agreement with Central Valley Media MyTV26.
Resolution amending the Fiscal Year 2021-22 Annual Operating Budget to increase the expenditure budget in the Public Educational and Governmental Fund cost center in the amount of $36,560 to fund the purchase of the server and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.
FINANCE; Steve Christensen, 209-577-5390, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-234 approving an Equipment Use and Broadcasting Agreement with Central Valley Media Center MyTV26 for the purchase and lease of a TelVue HyperCaster AIO B2000-4+ Digital Broadcast Server from TelVue Corporation, for an amount of $33,236 plus $3,324 in contingency for a total amount not to exceed $36,560, and authorizing the City Manager to negotiate and execute the final terms of the Agreement with Central Valley Media MyTV26.
ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-235 amending the Fiscal Year 2021-22 Annual Operating Budget to increase the expenditure budget in the Public Educational and Governmental Fund cost center in the amount of $36,560 to fund the purchase of the server and authorizing the City Manager or his designee, to take the necessary steps to implement the provisions of this resolution.
Consent
8. Consider amending the City’s Community Facilities Districts (CFDs) Policies and Procedures; authorizing the City Council to establish inter-fund loans from the General Fund up to $450,000 for the formation of future City CFDs; and authorizing the City Manager to carry out the necessary budget adjustments to implement the inter-fund loans for CFD formations up to the total amount of $450,000 to implement the action authorized by the City Council (Funding Source: General Fund) Resolution amending the City’s Community Facilities Districts (CFDs) Policies and Procedures, authorizing the City Council to establish inter-fund loans from the General Fund up to $450,000 for the formation of future City CFDs; and authorizing the City Manager to carry out the necessary budget adjustments to implement the inter-fund loans for CFD formations up to the total amount of $450,000 to implement the action authorized by the City Council.
CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-236 amending the City’s Community Facilities Districts (CFDs) Policies and Procedures, authorizing the City #3..
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Council to establish inter-fund loans from the General Fund up to $450,000 for the formation of future City CFDs; and authorizing the City Manager to carry out the necessary budget adjustments to implement the inter-fund loans for CFD formations up to the total amount of $450,000 to implement the action authorized by the City Council.
Consent
9. Consider approving the Award of Proposal and Agreement for Community Facilities Districts (CFDs) Administration Services to Goodwin Consulting Group, for a twoyear Agreement with three one-year extension options, for an annual estimated amount of $90,000 and a total amount not to exceed $450,000 over five years. (Funding Source: Various Community Facilities Districts)
Resolution approving the Award of Proposal and Agreement for Community Facilities Districts (CFDs) Administration Services to Goodwin Consulting Group, for a two-year Agreement with three one-year extension options, for an annual estimated amount of $90,000 and a total amount not to exceed $450,000 over five years, and authorizing the City Manager, or his designee, to execute the Agreement.
CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-237 approving the Award of Proposal and Agreement for Community Facilities Districts (CFDs) Administration Services to Goodwin Consulting Group, for a two-year Agreement with three one-year extension options, for an annual estimated amount of $90,000 and a total amount not to exceed $450,000 over five years, and authorizing the City Manager, or his designee, to execute the Agreement.
Consent
10. Consider approving a two-year Agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800. (Funding Source: Grants - Police)
Resolution approving a two-year Agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800, and authorizing the City Manager, or his designee, to execute the Agreement.
POLICE DEPARTMENT; Chris Adams, 209-572-9500, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-238 approving a two-year Agreement with Stanislaus County Behavioral Health and Recovery Services for the provision of a series of 40-hour Crisis Intervention and De-Escalation Training classes for an amount not to exceed $116,800, and authorizing the City Manager, or his designee, to execute the Agreement.
Consent
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11. Consider approving the addition of the Sacramento Police Academy to the agencies authorized to furnish Police Officer Standards and Training Academy services and increase the estimated annual cost by $25,000 to a new total of $125,000 and the total amount not to exceed to $625,000 over five years, and rescinding Resolution No. 2021- 066. (Funding Source: General Fund)
Resolution approving the addition of the Sacramento Police Academy to the agencies authorized to furnish Police Officer Standards and Training Academy services and increase the estimated annual cost by $25,000 to a new total of $125,000, and the total amount not to exceed to $625,000 over five years, and rescinding Resolution No. 2021-066.
POLICE DEPARTMENT; Chris Adams, 209-572-9500, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-239 approving the addition of the Sacramento Police Academy to the agencies authorized to furnish Police Officer Standards and Training Academy services and increase the estimated annual cost by $25,000 to a new total of $125,000, and the total amount not to exceed to $625,000 over five years, and rescinding Resolution No. 2021-066.
Consent
12. Consider approving the City’s sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car Show, including the waiver of City permit fees, Police Department overtime and vehicle costs, and Streets Division labor and equipment costs at an estimated cost of $82,430. (Funding Source: Surface Transportation Fund and General Fund)
Resolution approving the City of Modesto sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car show, including a waiver of City permit fees, Police Department overtime and vehicle costs, and Streets Division labor and equipment costs at an estimated total cost of $82,430, and authorizing the City Manager, or his designee, to execute any documents necessary related to the sponsorship.
PUBLIC WORKS; Steve Fischio, 209-342-2222, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-240 approving the City of Modesto sponsorship of the 23rd Annual 2022 North Modesto Kiwanis Graffiti Parade and Car show, including a waiver of City permit fees, Police Department overtime and vehicle costs, and Streets Division labor and equipment costs at an estimated total cost of $82,430, and authorizing the City Manager, or his designee, to execute any documents necessary related to the sponsorship.
Consent
13. Consider accepting the Del Rio Well 70 (Replacing Well 271) Surface Improvements Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $2,444,787 to Conco-West, Inc., of Manteca, California. (Funding Source: Water Fund-CIP) Resolution accepting the Del Rio Well 70 (Replacing Well 271) Surface Improvements as complete, authorizing all necessary steps to file with the #3..
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County Recorder, releasing securities, and releasing payments totaling $2,444,787 to Conco-West, Inc. of Manteca, CA.
UTILITIES; Jesse Franco, 209-571-5175, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-241 accepting the Del Rio Well 70 (Replacing Well 271) Surface Improvements as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $2,444,787 to Conco-West, Inc. of Manteca, CA.
Consent
14. Consider accepting the Rebid Codoni Lift Station Force Main Replacement Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $242,334 to Rolfe Construction Company, Inc., of Atwater, CA. (Funding Source: Wastewater Fund) Resolution accepting the Rebid Codoni Lift Station Force Main Replacement Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $242,334 to Rolfe Construction Company, Inc., of Atwater, CA.
UTILITIES; Jesse Franco, 209-571-5175, [email protected] ACTION: (Kenoyer/Wright; 6/0) Resolution 2022-242 accepting the Rebid Codoni Lift Station Force Main Replacement Project as complete, authorizing all necessary steps to file with the County Recorder, releasing securities, and releasing payments totaling $242,334 to Rolfe Construction Company, Inc., of Atwater, CA.
COUNCIL COMMENTS & REPORTS
Vice Mayor Wright reported on the great time had this Sunday afternoon at the City’s annual Porchfest. It was a great event with good music at many neighborhoods. He thanked those that help with the event. He also attended the Special Olympics with the Mayor and wanted to recognize Sean Hicks, representing Stanislaus County who made state finals.
Councilmember Ricci also commented on the annual Porchfest event. It was a great event that showcases Modesto and it’s the kind of event the City should be promoting. He also spoke about the homeless situation and that they have to try new strategies to address homelessness.
Councilmember Escutia-Braaton reported that last week she attended the Mayor in the Park event that was held in her District. The Mayor is hosting Mayor in the Park events throughout the City. The Parks and Recreation Department was highlighted at the recent event. Helmets, tshirts and popcorn were distributed and community members were able to ask questions about the many parks in Modesto. She also reported, that as a member of StanCOG she attended a California Transportation Commission Meeting (CTC). She reported on the role and importance of the CTC.
Mayor Zwahlen commented on the Mayor in the Park event. She thanked Safe Kids Stanislaus for providing and distributing free helmets. The goal of Safe Kids Stanislaus is dedicated to the #3..
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prevention of unintentional childhood accidents. She also attended the Special Olympics at Gregory High and the Miracle League at Big Valley Grace that is designed for children with special needs. It was inspiring to watch the children participate and the joy they expressed.
Councilmember Madrigal reported on attending the League of California Cities – Central Valley Board Meeting where a vote was taken to consider endorsing or not the California Plastic Pollution Reduction and Recycling Act ballot measure. He also reported on attending the Forward Together Community Meeting at King Kennedy Memorial Center in West Modesto.
There was good community input and stated he would like to see more of those meetings in English and Spanish as well as other languages.
CITY MANAGER COMMENTS & REPORTS
City Manager Lopez introduced and welcomed the City’s New Chief Information Officer - Scott Conn. He also acknowledged Kevin Harless who did a great job as the interim.
HEARINGS
Published in the Modesto Bee on May 9, 2022
15. Hearing to consider approving a Capital Facilities Fees Exemption Agreement, in the amount of $62,100, with Stanislaus County Affordable Housing Corporation (STANCO) for a six-unit project located at 835 California Avenue. (Funding Source:
Capital Facilities Fees Fund)
Resolution approving a Capital Facilities Fees Exemption Agreement, in the amount of $62,100, with Stanislaus County Affordable Housing Corporation for the six-unit project located at 835 California Avenue, and authorizing the City Manager, or his designee, to execute the Agreement.
CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Escutia-Braaton/Wright; 6/0) Resolution 2022-243 approving a Capital Facilities Fees Exemption Agreement, in the amount of $62,100, with Stanislaus County Affordable Housing Corporation for the six-unit project located at 835 California Avenue, and authorizing the City Manager, or his designee, to execute the Agreement.
Published in Modesto Bee on May 9, 2022.
16. Hearing to consider approving the City of Modesto HOME-American Rescue Plan (ARP) as the Program Year 2021-2022 Annual Action Plan Amendment #1, accepting the HOME-ARP grant in the amount of $3,409,774, and amending the Fiscal Year 2021-2022 Multi-Year Fund Budget to program the HOME-ARP grant funds awarded to the City of Modesto. (Funding Source: HOME-ARP Grant Funds) Resolution approving the City of Modesto HOME-American Rescue Plan as the Program Year 2021-2022 Annual Action Plan Amendment #1 and accepting the HOME-ARP grant in the amount of $3,409,774, and authorizing #3..
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the City Manager, or his designee, to negotiate and execute any forms related to the acceptance of this grant.
Resolution amending the Fiscal Year 2021-2022 Multi-Year Fund Budget, amending the allocation of American Rescue Plan Act of 2021 HOME grant funds in the amount of $3,409,774 with the appropriate revenue and expenditure allocations and authorizing the City Manager, or his designee to accept the Federal Grant Funds and to take the necessary steps to implement the provisions of this resolution.
CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Wright/Ricci; 6/0) Resolution 2022-244 approving the City of Modesto HOME-American Rescue Plan as the Program Year 2021-2022 Annual Action Plan Amendment #1 and accepting the HOME-ARP grant in the amount of $3,409,774, and authorizing the City Manager, or his designee, to negotiate and execute any forms related to the acceptance of this grant.
ACTION: (Wright/Ricci; 6/0) Resolution 2022-245 amending the Fiscal Year 2021- 2022 Multi-Year Fund Budget, amending the allocation of American Rescue Plan Act of 2021 HOME grant funds in the amount of $3,409,774 with the appropriate revenue and expenditure allocations and authorizing the City Manager, or his designee to accept the Federal Grant Funds and to take the necessary steps to implement the provisions of this resolution.
Published in the Modesto Bee on April 24, 2022.
17. Hearing to approve the City of Modesto Program Year 2022-2023 Annual Action Plan and amending the City of Modesto’s Fiscal Year 2022-2023 annual operating, multiyear and capital improvement project budgets to reflect the allocation of funds outlined in the program year 2022-2023 Annual Action Plan. (Funding Source: Community Development Block Grant, HOME Investment Partnerships and Emergency Solutions Grant Funds)
Resolution approving the City of Modesto Program Year 2022-2023 Annual Action Plan for use of Community Development Block Grant Programs, Emergency Solutions Grant, and HOME Investment Partnerships Program funding received from the U.S. Department of Housing and Urban Development and authorizing the City Manager, or his designee, to negotiate and execute any related program Agreements, contracts or other documentation required for implementation of the Program Year 2022-2023 Annual Action Plan, and authorizing the City Manager to submit applicable documentation and provide technical alterations, as required by HUD, incorporate comments received prior to the close of the public comment period, and to make the necessary steps to implement the provision of this resolution. Resolution approving the allocation of funds outlined in the program year 2022- 2023 Annual Action Plan budget to reflect proposal submitted to the U.S.
Department of Housing and Urban Development and authorizing the City Manager, or his designee, to take the necessary steps to implement the provisions of this resolution.
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CED; Jessica Hill, 209-577-5321, [email protected]
ACTION: (Ricci/Wright; 6/0) Resolution 2022-246 approving the City of Modesto Program Year 2022-2023 Annual Action Plan for use of Community Development Block Grant Programs, Emergency Solutions Grant, and HOME Investment Partnerships Program funding received from the U.S. Department of Housing and Urban Development and authorizing the City Manager, or his designee, to negotiate and execute any related program Agreements, contracts or other documentation required for implementation of the Program Year 2022-2023 Annual Action Plan, and authorizing the City Manager to submit applicable documentation and provide technical alterations, as required by HUD, incorporate comments received prior to the close of the public comment period, and to make the necessary steps to implement the provision of this resolution.
ACTION: (Ricci/Wright; 6/0 Resolution 2022-247 approving the allocation of funds outlined in the program year 2022-2023 Annual Action Plan budget to reflect proposal submitted to the U.S. Department of Housing and Urban Development and authorizing the City Manager, or his designee, to take the necessary steps to implement the provisions of this resolution.
MATTERS TOO LATE FOR THE AGENDA
None.
ADJOURNMENT
This meeting adjourned at 6.23 p.m.
CLOSED SESSION
All Closed Session Matters Heard Prior to Meeting
PUBLIC EMPLOYEE PERFORMANCE EVALUATION
(Pursuant to Section 54957 of the Government Code)
Title: City Attorney
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA #3..
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Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
Employee Organization: Modesto Police Non-Sworn Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
Employee Organization: Modesto Police Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees Attest:____________________________
Diane Nayares-Perez, City Clerk
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 15, 2022
TO: Mayor & City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Diane Nayares-Perez, City Clerk
SUBJECT: November 8, 2022 Election Services
CONTACT: Diane Nayares-Perez, CMC, City Clerk, [email protected], 209-577-5396
DESCRIPTION:
Consider calling for the holding of a Municipal Election to be held on November 8, 2022, requesting the Stanislaus County Board of Supervisors to Consolidate the City of Modesto Municipal Election to be held on November 8, 2022, requesting the services of the Registrar of Voters, Elections Division of the County of Stanislaus to conduct the Election on behalf of the City of Modesto and the Modesto City School Board; and adopting regulations for candidates for elective office pertaining to candidates statements submitted to the voters at an Election to be held on Tuesday, November 8, 2022. (Funding Source: General Fund) STRATEGIC PLAN ELEMENT:
This item supports the City’s 2020-2025 Strategic Plan Goals to build community trust in City government through responsive, transparent and efficient service delivery.
BACKGROUND:
In 2018, the City of Modesto voters passed a ballot measure amending the Modesto City Charter to move regular City elections from November of odd numbered years to November of even-numbered years to align with statewide elections starting in November 2020. The City’s next municipal election is scheduled to be held on November 8, 2022.
Federal Decennial Census – Redistricting for Future Elections Pursuant to California Elections Code Section 21601(a), following each federal decennial census for a city whose council is already elected using district-based elections, the council shall, by ordinance or resolution, adopt boundaries for all of the council districts of the city so that the council districts shall be substantially equal in population as required by the United States Constitution. Since a federal decennial census was conducted in 2020, the City of Modesto was required to conduct the redistricting process by the April 17, 2022 deadline. On March 8, 2022, City Council held a Public Hearing to adopt the Final Council District Map #4..
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City Council, June 7, 2022
November 8, 2022 Election Services
recommended by the Citizens’ Districting Commission. Draft Map B3 was approved by Council and was implemented as Modesto’s Council District Map. The new District Map attached hereto as Exhibit A, establishes the City’s district boundaries and shall be used for the November 8, 2022, municipal elections, and subsequent elections until further re-alignment occurs.
DISCUSSION:
The two (2) proposed resolutions relate to conducting a municipal election on November 8, 2022. The first resolution has the Modesto City Council officially call the November 8, 2022 General Municipal Election and request that the Stanislaus County Board of Supervisors consolidate the elections for electing three (3) Councilmembers (Districts 2, 4 and 5) and four (4) Modesto City Schools Board members (Trustee Areas 1, 3, 5, and 7). The second resolution adopts regulations for candidates for elective office pertaining to candidates’ statements submitted to the voters at the November 8, 2022 General Municipal Election. The resolution recommends candidates’ statements be limited to 200 words in accordance with California Elections Code, section 13307. Under the regulations set forth in the resolution, candidates will be required to pay a deposit for the actual costs of printing candidate statements in English and Spanish . Candidates will pay the estimated costs at the time nomination papers and candidate's statements are filed, with the estimated costs being equal to the amount required for the printing and translation of the candidate statement. The proposed deposit is being increased from $500 to $1,000 as deposits from prior elections did not cover the full amount of the actual cost for the printing of candidate statements.
The nomination period to run for the City’s Municipal Election opens on Monday, July 18, 2022, and closes on Friday August 12, 2022. If an eligible incumbent does not file, a five-day extension will permit filing until Wednesday, August 17, at 5:00 p.m. Prior to qualifying as a candidate, the City Clerk will verify the residency of each potential candidate through their nomination paperwork.
The City of Modesto may also have Ballot Measures for the November 8, 2022 election; however, and any such measures will be brought to Council at a future date.
FISCAL IMPACT:
The City will be required to pay Stanislaus County for its services in consolidating the election, which is estimated at $1.18 - $2.00 per registered voter. The projected cost for the Modesto City Council seats is between $161,898 to $274,414.
The Modesto City Schools Board election projected costs will be reimbursed by Modesto City Schools. The projected cost for the Modesto City School Board Election is between $98,571 to $167,070.
The cost to administer an election is funded through the Election Fund.
COMMITTEE RECOMMENDATION:
This item did not go to Committee.
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City Council, June 7, 2022
November 8, 2022 Election Services
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution of the City of Modesto calling for the holding of a Municipal Election to be held on November 8, 2022, requesting from the Stanislaus County Board of Supervisors to Consolidate the City of Modesto Municipal Election to be held on November 8, 2022, requesting the services of the Registrar of Voters, Elections Division of the County of Stanislaus to Conduct the Election on behalf of the City of Modesto and the Modesto City Schools Board.
Resolution adopting Regulations for Candidates for Elective Office Pertaining to Candidates Statements Submitted to the Voters at an Election to be held on Tuesday, November 8, 2022.
Approved by:
Diane Nayares-Perez, CMC, City Clerk
Joseph P. Lopez, City Manager
Attachments:
1. Resolutions (2)
2. Exhibit A District Map
3. Election Cost Estimate
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06/07/2022/CCL/DNayaresPerez/Item X 1 2022-XX
MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX
RESOLUTION OF THE CITY OF MODESTO CALLING FOR THE HOLDING OF A MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022,
REQUESTING FROM THE STANISLAUS COUNTY BOARD OF
SUPERVISORS TO CONSOLIDATE THE CITY OF MODESTO GENERAL
MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 8, 2022,
REQUESTING THE SERVICES OF THE REGISTRAR OF VOTERS,
ELECTIONS DIVISION OF THE COUNTY OF STANISLAUS TO CONDUCT
THE ELECTION ON BEHALF OF THE CITY OF MODESTO AND THE
MODESTO CITY SCHOOLS BOARD
WHEREAS, the City of Modesto will hold a Municipal Election on November 8, 2022, for the purpose of electing three (3) Council Members (Districts 2, 4, and 5) for a term of four (4) years, and four (4) Modesto City Schools Board Members (Trustee Areas 1, 3, 5, and 7) for a term of four (4) years, and
WHEREAS, the City of Modesto respectively requests that the Stanislaus County Registrar of Voters, Elections Division, furnish all other services, facilities, supplies, equipment, etc. necessary for the Municipal Election, and WHEREAS, the City of Modesto City Clerk’s Office will be responsible for issuing/collecting election information, publishing the Notice of Election, and the Nominees for Public Office, and
WHEREAS, the City of Modesto will reimburse the County of Stanislaus for all actual costs for services performed to conduct the Municipal Election on behalf of the City, and
WHEREAS, pursuant to Elections Code section 10403, the resolution requesting the consolidation shall be adopted and filed at the same time as the adoption of the ordinance, resolution, or order calling the election.
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06/07/2022/CCL/DNayaresPerez/Item X 2 2022-XX
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby calls for the holding of a General Municipal Election to be held on Tuesday, November 8, 2022, for the purpose of electing three (3) Council Members (Districts 2, 4, and 5) for a term of four (4) years, and four (4) Modesto City Schools Board Members (Trustee Areas 1, 3, 5, and 7) for a term of four (4) years.
BE IT FURTHER RESOLVED by the Council of the City of Modesto that it hereby formally requests from the Board of Supervisors of Stanislaus County, California, to consolidate the City of Modesto’s Municipal Election with the County’s General Election to be held on November 8, 2022, requesting the services of the Registrar of Voters, Elections Division, of the County of Stanislaus to conduct the election on behalf of the City of Modesto.
The foregoing Resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 7th day of June, 2022, by Council Member _________, who moved its adoption, which motion being duly seconded by Council Member ______, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _____________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
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06/07/2022/CCL/DNayaresPerez/Item X 3 2022-XX
APPROVED AS TO FORM:
BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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06/07/2022/CCL/DNayaresPerez/Item X 1 2022-XX
MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX
RESOLUTION ADOPTING REGULATIONS FOR CANDIDATES FOR
ELECTIVE OFFICE PERTAINING TO CANDIDATES STATEMENTS
SUBMITTED TO THE VOTERS AT AN ELECTION TO BE HELD ON
TUESDAY, NOVEMBER 8, 2022
WHEREAS, Section 13307 of the Elections Code of the State of California provides that the governing body of any local agency may adopt regulations pertaining to materials prepared by any candidate for a municipal election, including costs of the candidates statement.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MODESTO, DOES HEREBY RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS:
SECTION 1. GENERAL PROVISIONS. That pursuant to Section 13307 of the Elections Code of the State of California, each candidate for elective office to be voted for at an Election to be held in the City of Modesto on November 8, 2022 may prepare a candidate’s statement on an appropriate form provided by the City Clerk. The statement may include the name, age and occupation of the candidate and a brief description of no more than 200 words of the candidate’s education and qualifications expressed by the candidate himself or herself. The statement shall not include party affiliation of the candidate, nor membership or activity in partisan political organizations. The statement shall be filed [in typewritten form] in the office of the City Clerk at the time the candidate’s nomination papers are filed. The statement may be withdrawn, but not changed, during the period for filing nomination papers and until 5:00 p.m. of the next working day after the close of the nomination period.
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06/07/2022/CCL/DNayaresPerez/Item X 2 2022-XX
SECTION 2. FOREIGN LANGUAGE POLICY.
A. Pursuant to the Federal Voting Rights Act, candidates statements will be translated into all languages required by the County of Stanislaus. The County is required to translate candidate’s statements into the following languages: Spanish.
B. The County will print and mail sample ballots and candidates statements to all voters in Spanish. The County will make the sample ballots and candidates statements in the required languages available at all polling places, on the County’s website, and in the Election Official’s office.
SECTION 3. PAYMENT.
A. Translations:
1. The candidate shall be required to pay for the cost of translating the candidates statement into any required foreign language as specified in (A) and/or (B) of Section 2 above pursuant to Federal and\or State law, but is requested as an option by the candidate.
B. Printing:
1. The candidate shall be required to pay for the cost of printing the candidates statement in English in the main voter pamphlet.
2. The candidate shall be required to pay for the cost of printing the candidates statement in a foreign language required in (A) of the Foreign Language Policy Section above, in the main voter pamphlet.
SECTION 4. ESTIMATE OF PRINTING COSTS. The Stanislaus County Registrar of Voters has estimated the cost of printing, handling, translating, and mailing #4..
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06/07/2022/CCL/DNayaresPerez/Item X 3 2022-XX
the candidate’s statement filed pursuant to this section, including cost incurred as a result of complying with the Voting Rights Act of 1965 (as amended). The estimated cost for printing of a candidate’s statement for the November 8, 2022 main voter pamphlet is $1,000. The City Clerk shall require each candidate filing a statement to pay $1,000 in advance as a condition of having his or her statement included in the voter’s pamphlet. The estimate is only an approximation of the actual cost. Costs vary from one election to another and may be significantly more or less than the estimate, depending on the actual number of candidates filing statements. Accordingly, the City Clerk is not bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expense or refund any excess paid depending on the final actual cost. In the event of underpayment, the City Clerk will require the candidate pay the balance of the cost incurred. In the event of overpayment, the clerk shall prorate the excess amount to the candidate and refund the excess amount paid after the election.
SECTION 5. MISCELLANEOUS. The City Clerk shall comply with all recommendations and standards set forth by the California Secretary of State regarding occupational designations and other matters relating to elections.
SECTION 6. ADDITIONAL MATERIALS. No candidate will be permitted to include additional materials in the sample ballot package.
SECTION 7. The City Clerk shall provide each candidate or the candidate’s representative a copy of this Resolution at the time nominating petitions are issued.
SECTION 8. That all previous resolutions establishing council policy on payment for candidates statements are repealed.
SECTION 9. That this Resolution shall apply only to the election to be held on #4..
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06/07/2022/CCL/DNayaresPerez/Item X 4 2022-XX
November 8, 2022 and shall then be repealed.
SECTION 10. That the City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original resolutions.
The foregoing Resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 7th day of June, 2022, by Councilmember _________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: _____________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ________________________________
JOSE M. SANCHEZ, City Attorney
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Woodland Ave
S Emerald Ave
S Washington St
Tenaya Dr
Veneman Ave
Chicago Ave
Coldwell Ave
Kiernan Ave
Sierra Dr
N Conejo Ave
Caswell Ave
Maze
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Broadway Ave
N Riverside Dr
Snyder Ave
Grecian Ave
Eastridge Dr
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Dr
Hillglen Ave
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Wylie Dr
Daly Ave
Keller St
Dallas St
Merle Ave
Central Ave
Houser Ln
S Riverside Dr
Millbrook Ave
Laramie Dr
Bridgewood Wy
13th St
E Orangeburg Ave
Dragoo Park Dr
Beverly Dr
Temescal Dr
Panama Dr
Norwegian Ave
Mechalys Wy N Mc Clure Rd
Poust Rd
Esta Ave
El Pasado Dr
Orchard Park
Wy
C olonial Dr
Manor Oak Dr
Faith Home Rd
Palmwood Dr
Cheyenne Wy
E Morris Ave
Litt Rd
Belharbour Dr
Sylvan Meadows Dr
Sonoma Ave
6th
St
Moffett Rd
4th
St
Veneman Ave N
2nd
St
Rose Ave
Nightingale Dr
Tioga Dr
Empire Ave
California Ave
Clevenger Dr
Edgebrook Dr
Terminal A
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Dr
Boothe Rd
Mars
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W Morris Ave
E Rumble Rd
Lillian Dr
Hashem Dr
Celeste Dr
W Union Ave
Claus Rd
Lincoln Oak Dr
Surrey Ave
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Carver Rd
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E Union Ave
Rouse Ave
Aria Wy
Toomes Rd
Dry Creek Dr
Peppermint Dr
Poppypatch Dr
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Reynolds
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7th St
Encina Ave
Oaklawn Dr
Rosemore Ave
Middleboro Pl
Mable Ave
Nadine Ave
Vintage Dr
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Fine Ave
Montana Dr
Fowler Rd
Beckwith Rd
Tucson Ave
B ue l Bird Dr
Virginia Ave
Edward Ave
Penny Ln
E Fairmont Ave
Miller Ave
Sunrise Ave
Bodem St
Richland Ave
W Roseburg Ave E Roseburg Ave Neece Dr
La Force Dr
Evans Rd
Kodiak Dr
Conant Ave
Woodrow
Ave
Glenn Ave
S Madison St
Robertson Rd
Finney Rd
Bacon Rd
Wade
Ave
Sharon Ave
Carver Rd
Church St
10th St
11th St
12th St
S Santa Cruz Ave
Herndon Rd
17th St
Murphy Rd
Sisk Rd
Napier Dr
Bowen Ave
Lifescapes
Dr
Maid Mariane Ln
Roselle Ave
H
eld
Dr
Coffee Rd
Bangs Ave
Roselawn Ave
Claribel Rd
El Roya
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Nathan Ave
S Santa Fe Ave
River Rd
Dale Rd
Brighton Ave
BuenaVista
E Hatch Rd
Tully Rd
Norseman Dr
N Emerald Ave
Hoover Ave
Claratina Ave
S C o
n
ejo
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Oakdale Rd
Chapman Rd
Milnes Rd
Wieland Ave
Dakota Ave
E Whitmore Ave Codoni Ave
Salida Blv
S Mc Clure Rd
Spenker Ave
E Glenn Ave
Plaza Parkway
Doherty Ave
Kiernan Ct
Woodland Ave
Paradise Rd
Garner Rd
Leckron Rd
E Whitmore Ave
Hillglen
Ave
Sutter Ave
Pelandale Ave
Dale Rd
Standiford Ave
Ric
h
al n
d
A
ve
Prescott Rd
Finch Rd
Lakewood Ave
La Loma Ave
Tuolumne Blv
E Hatch Rd
S 7th St
Tully Rd
Floyd Ave
Scenic Dr
5th St
W Rumble Rd
Kansas Ave
E Orangeburg Ave
Cro
ws
L
a
n
d
ni g
R
d
S Martin Luther King Dr
College Ave
Coffee Rd Morgan Rd
E Rumble Rd
W Whitmore Ave
W Orangeburg Ave
19th St
Yosemite Blv
Broadway Ave
Paradise Rd
I St
1st St
J St
Lincoln Ave
Blue Gum Ave
Kiernan Ave
G St
N 9th St
B St
9th St
6th St
14th St
E Briggsmore Ave
Roselle Ave
Sylvan Ave
Central Ave
Herndon
A
ve
Sisk Rd
Herndon Rd
Mc Henry
Ave
Beck with Rd
S
Santa
Fe
A
ve
Morse Rd
Mariposa Rd
Garner Rd
Needham Opas
MC HENRY AVE
PARADISE AVE
NEEDHAMST
OAKDALE RD
H ST
G ST
EL VISTA AVE
E WHITMORE AVE
MITCHELL RD
YOSEMITE BLV
N
CA
RPE
N
TE
R
RD
S 9TH ST
PARADISE RD
L ST
MAZE BLV
E BRIGGSMORE AVE
E HATCH RD
S
CA
RPE
N
TE
R
R
D
D ST
W HATCH RD
K ST
W BRIGGSMORE AVE
1ST ST
9TH ST
PELANDALE AVE
CLAUS RD
SCENIC DR
1 2
3 4
5 6
City of Modesto
0 0.5 1 2
Miles
Date: 3/4/2022
2 Jennings Rd
West Main St
E Las Palmas Ave
Sycamore Ave
Legend
Council District - Population
1 - 36,216
2 - 37,472
3 - 35,853
4 - 37,182
5 - 37,025
6 - 35,503
K:\Working\Districting\Redistricting2022.mxd Council District Map Exhibit A
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OFFICE OF COUNTY CLERK-RECORDER
DONNA LINDER
County Clerk-Recorder, Registrar of Voters &
Commissioner of Civil Marriage
ADMINISTRATION:
1021 "I" Street, Suite 101, Modesto, CA 95354
Telephone: 209.525.5211
Facsimile: 209.525.5800
November 8 State-Wide General Election Cost Estimate
City of Modesto & Modesto City Schools
Estimates may include costs associated with:
Printing
Publications
Polls / Drop Boxes / Vote Centers
Personnel
Information Technology Support
Mailings
Miscellaneous
City of Modesto Measures
Number of Registered Voters 114,633 -114,800 (projected estimate) Cost to conduct a city-wide vote by mail election in consolidation with the November 8, 2022 State-Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct a city-wide election $1.18 - $2.00 per voter for Charter Review Measure on Nov. 8, 2022. 2. County ROV services to conduct a city-wide election $1.18 - $2.00 per voterfor a Sales Tax Measure on Nov. 8, 2022. City of Modesto City Council District 2 Number of Registered Voters 13,017 - 13,067 (projected estimate) Cost to conduct a district-wide vote by mail election in consolidation with the November 8, 2022 State- Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct a district-wide election for City Council District 2 on Nov.8, 2022. $1.18 - $2.00 per voter #4..
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City of Modesto City Council District 4
Number of Registered Voters 19,699 - 19,850 (projected estimate) Cost to conduct a district-wide vote by mail election in consolidation with the November 8, 2022 State- Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct a district-wide election $1.18 - $2.00 per voter for City Council District 4 on Nov. 8, 2022. City of Modesto City Council District 5 Number of Registered Voters 20,558 - 20,750 (projected estimate) Cost to conduct a district-wide vote by mail election in consolidation with the November 8, 2022 State- Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct a district-wide election $1.18 - $2.00 per voter for City Council District 5 on Nov. 8, 2022. Modesto City Schools Area 1 Number of Registered Voters 23,045- 24,100 (projected estimate) Cost to conduct a trustee area-wide vote by mail election in consolidation with the November 8, 2022 State-Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct an area-wide election $1.18 - $2.00 per voter for Trustee Area 1 on Nov. 8, 2022. Modesto City Schools Area 3 Number of Registered Voters 23,896 - 24,115 (projected estimate) Cost to conduct a trustee area-wide vote by mail election in consolidation with the November 8, 2022 State-Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.) County ROV services to conduct an area-wide election $1.18 - $2.00 per voter for Trustee Area 3 on Nov. 8, 2022. 1.
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Modesto City Schools Area 5
Number of Registered Voters 21,968 - 22,000 (projected estimate) Cost to conduct a trustee area-wide vote by mail election in consolidation with the November 8, 2022 State-Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct an area-wide election $1.18 - $2.00 per voter for Trustee Area 5 on Nov. 8, 2022. Modesto City Schools Area 7 Number of Registered Voters 13,297 - 13,320 (projected estimate) Cost to conduct a trustee area-wide vote by mail election in consolidation with the November 8, 2022 State-Wide General Election (Costs can increase or decrease based on the number of candidate statements and participation by other cities, districts, etc.)
1. County ROV services to conduct an area-wide election $1.18 - $2.00 per voter for Trustee Area 7 on Nov. 8, 2022. <- Donna Linder, County Clerk / Recorder / Registrar of Voters February 7, 2022
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 13, 2022
TO: Mayor & City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Diane Nayares-Perez, City Clerk
SUBJECT: 2022 Local Agency Biennial Notice for the Review of the Conflict of Interest Code Pursuant to the Political Reform Act
CONTACT: Diane Nayares-Perez, CMC, City Clerk, [email protected], 209-577-5396
DESCRIPTION:
Consider receiving the 2022 Local Agency Biennial Notice and directing staff to conduct a review of the City’s Conflict of Interest Code and the filing of a Biennial Notice with the City Clerk regarding such review, as required by the Political Reform Act. (Fundings Source: Not Applicable)
STRATEGIC PLAN ELEMENT:
Build community trust in City government through responsive, transparent and efficient service delivery.
BACKGROUND:
The Political Reform Act of 1974, Government Code Section 81000 et seq. (the “Act”), requires all public agencies to adopt and maintain a conflict of interest code. The primary effect of the code is to establish disclosure requirements for various government positions involved in the requisite level of decision-making as set forth in the Act. The Act requires each city to adopt a local conflict of interest code designating city positions not otherwise designated in the Act itself, that are involved in making or participating in the making of city decisions at all levels of city government.
The Act further requires that agencies, including cities, regularly review and update their codes as necessary as directed by their code-reviewing bodies or when change is necessitated by changed circumstances. (Gov. Code §§ 87306, 87306.5). The City Council is the codereviewing body for the City’s Code and must direct the biennial review of its Conflict of Interest Code (“Code”). The Act also requires that the City Manager file a statement regarding the results of the review no later than October 1 of the same year. If a change in the Code is necessitated by this review, it must be submitted to the City Council for approval within ninety (90) days of the filing of the Local Agency Biennial Notice with the City Clerk. (Gov. Code § 87303, 87306.5)
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City Council, June 7, 2022
2022 FPPC Local Agency Biennial Notice
DISCUSSION:
The City Council is the code reviewing body for the City. Therefore, no later than July 1, 2022, the City Council must notify staff to review its code and submit a biennial notice. No later than October 1st of each even-numbered year, staff must submit to the code reviewing body, a notice indicating whether or not an amendment is necessary.
The City Council is also the code reviewing body for local City Boards, Commissions and Committees whose jurisdictions are solely within the City of Modesto. Therefore, Council must adopt any amendments to the codes for these boards, commissions, and committees. The City Boards, Commissions and Committees are as follows:
• Board of Building Appeals
• Board of Zoning Adjustment
• Citizens’ Housing and Community Development Committee • Citizens’ Salary Setting
• Disabled Access Appeals Board
• Citizens’ Districting Commission
• Entertainment Commission
• Housing Rehabilitation Loan Committee
• Landmark Preservation Committee
• Measure L Citizens' Transportation Sales Tax Commission Conflict of Interest Codes are not required for City Council and Planning Commission members as they are mandated by State law to file full disclosure statements of economic interests directly with the Fair Political Practices Commission.
The City Clerk will coordinate the review of the Conflict of Interest codes and the City Attorney will conduct the legal review of any changes to the codes.
FISCAL IMPACT:
None.
COMMITTEE RECOMMENDATION:
This item did not go to Committee.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Motion directing staff to make a formal review of the City’s Conflict of Interest Code, pursuant to the Political Reform Act, and if necessary at the appropriate time thereafter, prepare a resolution to be adopted by the City Council to approve any required amendments.
Approved by:
Diane Nayares-Perez, City Clerk
Joseph P. Lopez, City Manager
Attachments:
1. 2022 FPPC Local Agency Biennial Notice and Instructions #5..
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www.fppc.ca.gov
FPPC Advice: [email protected] (866.275.3772)
2022 Local Agency Biennial Notice
Name of Agency:
Mailing Address:
Contact Person: Phone No.
Email: Alternate Email:
Accurate disclosure is essential to monitor whether officials have conflicts of interest and to help ensure public trust in government. The biennial review examines current programs to ensure that the agency’s code includes disclosure by those agency officials who make or participate in making governmental decisions.
This agency has reviewed its conflict of interest code and has determined that (check one BOX):
q An amendment is required. The following amendments are necessary:
(Check all that apply.)
¡ Include new positions
¡ Revise disclosure categories
¡ Revise the titles of existing positions
¡ Delete titles of positions that have been abolished and/or positions that no longer make or participate in making governmental decisions
¡ Other (describe)
q The code is currently under review by the code reviewing body. q No amendment is required. (If your code is over five years old, amendments may be necessary.)
Verification (to be completed if no amendment is required) This agency’s code accurately designates all positions that make or participate in the making of governmental decisions. The disclosure assigned to those positions accurately requires that all investments, business positions, interests in real property, and sources of income that may foreseeably be affected materially by the decisions made by those holding designated positions are reported. The code includes all other provisions required by Government Code Section 87302.
__________________________________________ _________________________ Signature of Chief Executive Officer Date
All agencies must complete and return this notice regardless of how recently your code was approved or amended. Please return this notice no later than October 3, 2022, or by the date specified by your agency, if earlier, to:
(PLACE RETURN ADDRESS OF CODE REVIEWING BODY HERE)
PLEASE DO NOT RETURN THIS FORM TO THE FPPC.
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[email protected] 1.866.275.3772 or 916.322.5660
www.fppc.ca.gov FPPC • 076-04.2022 • Page 1 of 1
FAIR POLITICAL PRACTICES COMMISSION
2022 Conflict of Interest Code
Biennial Notice Instructions for Local Agencies
The Political Reform Act requires every local government agency to review its conflict of interest code biennially. A conflict of interest code tells public officials, governmental employees, and consultants what financial interests they must disclose on their Statement of Economic Interests (Form 700).
By July 1, 2022: The code reviewing body must notify agencies and special districts within its jurisdiction to review their conflict of interest codes.
By October 3, 2022: The biennial notice must be filed with the agency’s code reviewing body.
The FPPC has prepared a 2022 Local Agency Biennial Notice form for local agencies to complete or send to agencies within its jurisdiction to complete before submitting to the code reviewing body. The City Council is the code reviewing body for city agencies. The County Board of Supervisors is the code reviewing body for county agencies and any other local government agency whose jurisdiction is determined to be solely within the county (e.g., school districts, including certain charter schools). The FPPC is the code reviewing body for any agency with jurisdiction in more than one county and will contact them.
The Local Agency Biennial Notice is not forwarded to the FPPC.
If amendments to an agency’s conflict of interest code are necessary, the amended code must be forwarded to the code reviewing body for approval within 90 days. An agency’s amended code is not effective until it has been approved by the code reviewing body.
If you answer yes, to any of the questions below, your agency’s code probably needs to be amended.
• Is the current code more than five years old?
• Have there been any substantial changes to the agency’s organizational structure since the last code was approved?
• Have any positions been eliminated or re-named since the last code was approved? • Have any new positions been added since the last code was approved? • Have there been any substantial changes in duties or responsibilities for any positions since the last code was approved?
If you have any questions or are still not sure if you should amend your agency’s conflict of interest code, please contact the FPPC. Additional information including an online webinar regarding how to amend a conflict of interest code is available on FPPC’s website. #5..
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 17, 2022
TO: Mayor and City Council
FROM: Joseph P. Lopez, City Manager
SUBJECT: Monthly Budget Adjustment Report – May 2022
CONTACT: Steve Christensen, Budget Manager, [email protected] 209-577-5390
DESCRIPTION:
Consider approving the recommended budget adjustments to Fiscal Year 2021-22 Annual Operating and Capital Improvement Program Budgets. (Funding Source: Various Funds)
STRATEGIC PLAN ELEMENT:
This item supports the City of Modesto 2020-2025 Strategic Plan focus on Governance and Service Delivery under Goal H: Achieve Financial Sustainability.
BACKGROUND:
Each month City staff presents a variety of budget adjustments requiring the approval of Council. These changes are submitted to the Finance Committee for review prior to submission to Council and include an explanation and justification for each transaction.
This report includes a number of adjustments that have been identified by monitoring department budgets. Due to the number of adjustments, they have been included as an attachment to this report (Exhibit A). As in past reports, adjustments are separated by fund and department as appropriate. The adjustments are reflected in a more summarized version and supporting documentation is available for review upon request.
Also included in this report as an attachment (Exhibit B) is a summary of the budget adjustments approved by the City Manager and/or Budget Manager consistent with the change in authority levels that was approved by Council with the passing of the Fiscal Year 2019-20 Operating Budget via Resolution No. 2019-305.
DISCUSSION:
The monthly budget adjustments attached as Exhibit A in this item include adjustments across various departments. These adjustments are explained in further detail within Exhibit A. #6..
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City Council, June 7, 2022
Monthly Budget Adjustment Report – May 2022
FISCAL IMPACT:
The fiscal impact of each item is noted in the attachments to this report. The adjustments are for Fiscal Year 2021-22.
COMMITTEE RECOMMENDATION:
This item was presented to the Finance Committee on May 23, 2022 and was recommended to be forwarded to Council for approval.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution amending the Fiscal Year 2021-22 Annual Operating and Capital Improvement Project Fund Budgets and authorizing the City Manager, to take the necessary steps to implement the provisions of this resolution.
Approved by:
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Exhibit A – Budget Adjustments Requiring Council Approval
3. Exhibit B - Staff Approved Budget Adjustments
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION AMENDING THE FISCAL YEAR 2021-22 ANNUAL
OPERATING AND CAPITAL IMPROVEMENT FUND BUDGETS AND
AUTHORIZING THE CITY MANAGER, TO TAKE THE NECESSARY
STEPS TO IMPLEMENT THE PROVISIONS OF THIS RESOLUTION
WHEREAS, a financial analysis has been completed and it has been determined that a budget adjustment is required to the Annual and Capital Improvement Budgets of the City of Modesto for Fiscal Year 2021-22.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Fiscal Year 2021-22 Annual Operating and Capital Improvement budget as shown in Exhibit A, which is attached hereto and incorporated by reference herein.
BE IT FURTHER RESOLVED that the City Manager, or his designee, is hereby authorized to take the necessary steps to implement the provisions of this resolution.
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 7th day of June 2022, by Councilmember _________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following votes:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: ________________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: _____________________________________
JOSE M. SANCHEZ, City Attorney
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City Council, June 7, 2022
Monthly Budget Adjustment Report
EXHIBIT A
FISCAL YEAR 2021-22
COMMUNITY & ECONOMIC DEVELOPMENT
A budget adjustment is necessary to transfer $393,780 from Fund 1420 – Surface Transportation/Measure L – SB1 MOE fund to project 101168 – Scenic Dr. Pavement Rehab Phase 1 to satisfy the Fiscal Year 2021-2022 Maintenance of Effort for Measure L. In addition, the transfer from Fund 1410 – Measure L Road Tax Fund to the project is being reduced by the same amount and will be returned to the Measure L Local Road Tax fund – Local Streets and Roads category.
PARKS & RECREATION
A budget adjustment is needed in the Modesto Convention & Visitors Bureau (CVB) cost center because the TOT collected from lodging establishments over the nine prior months has increased as more people are traveling. This adjustment will increase the revenue budget in cost center 34300 in account 41204 (Transient Occupancy Tax) by $126,635 and the expense budget in the same cost center by $126,641 in account 53505 (Intergovernmental Services – Other). The net of the budget adjustments for this cost centers is an increase of $6 to the budget expense. The City of Modesto has an agreement with Modesto Convention & Visitors Bureau Inc. The City provides 13.33% (thirteen and thirty-three hundredths percent) of the 9% (nine percent) Transient Occupancy Tax (TOT) collect from lodging guests.
A budget adjustment is needed in the Modesto Tourism Marketing District (MTMD) cost center because the Modesto Tourism Marking Fee collected from hotels has increased as more people are starting to travel more. This adjustment will increase the revenue budget in cost center 34301 by $95,686 in account 47056 (Special Assessments - Modesto Tourism Marketing District) and increase the expense budget in cost center 34301 by $92,603 in account 53505 (Intergovernmental Services – Other) and by $3,083 in account 54501 (Services City Forces – Intrafund). The City of Modesto has an agreement with Modesto Convention & Visitors Bureau (CVB) where the City collects 1% (one percent) Modesto Tourism Marking Fee from hotels. The 1% (one percent) fee collected by the City is then remitted to the CVB minus an admin fee of 0.75% (seventyfive hundredths percent). A Budget Adjustment is needed in the Downtown Improvement District (DID) Cost center due to the increased DID tax revenue business have remitted over the past 9 months.
This adjustment will increase revenue in cost center 80030 by $47,386 in account 41403 (Business License Tax - Mill Tax DID) and increase the expense budget in cost center 80030 by $49,187 in account 53505 (Intergovernmental Services – Other). The net expense budget increase is $1,801. The City of Modesto has a Memorandum of Understanding and Cooperative agreement (MOU Agreement) with Modesto Downtown Improvement District, Inc. (DID) for the collection and disbursement of DID taxes. The City collects DID taxes from businesses located downtown and then remits the taxes to Modesto Downtown Improvement District minus an annual administration fee. #6..
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City Council, June 7, 2022
Monthly Budget Adjustment Report
PUBLIC WORKS
A budget adjustment is necessary in the amount of $420,198 to establish transfers from Fund 4520 – Bus Service Fund - DAR, Fund 4540 - Bus Fixed Route Max Operations Fund, and Fund 4550 - Bus Fixed Route - Alternative Transport Fund to Fund 4510 - Bus Fixed Route Fund and Fund 4530 – Transportation CTR Fund in order to account for the close-out of all City transit funds and move all remaining cash to Stanislaus Regional Transit Authority (StanRTA).
The following adjustments are being made from the various city Fleet Replacement subfunds to the Fleet Replacement Fund (5409). This action is being done to reimburse the Fleet Replacement Fund (5409) for vehicle purchases that had been made as required by fund accounting rules in FY 21-22 for the activity through March 2022. Below is a table showing the net effect in each sub-fund as a result of the various adjustments.
Fund Fund Name Net Impact
of
Adjustments
1709 Surface Transportation Fleet Replacement $21,158
4109 Water Fleet Replacement $135,199
4489 Storm Drain Fleet Replacement $638,590
4899 Solid Waste Fleet Replacement $620,275
5410 General Fund Equipment Fleet Replacement $223,025
Total Transfer Outs $1,638,247
5409 Transfer In – Fleet Management Fleet Replacement $1,638,247 Total Transfer Ins $1,638,247
A budget adjustment is necessary to establish a transfer in the amount of $21,158 from Surface Transportation Fleet Replacement Fund 1709 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (1) Trailer Tilt bed and (1) Roller Wacker.
A budget adjustment is necessary to establish a transfer in the amount of $135,199 from Water Fleet Replacement Fund 4109 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (1) Tractor Load with backhoe.
A budget adjustment is necessary to establish a transfer in the amount of $638,590 from Storm Drain Fleet Replacement Fund 4489 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (2) full size street sweepers.
A budget adjustment is necessary to establish a transfer in the amount of $620,275 from Solid Waste Fleet Replacement Fund 4899 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (1) High Dump Street Sweep, (1) ¾ Ton Truck, and (1) Windrow Turner.
A budget adjustment is necessary to establish a transfer in the amount of $223,025 from General Fund Equipment Fleet Replacement Fund 5410 to Fleet Replacement Fund 5409 for a purchase made in FY 21/22 for (2) SUV Patrol, (1) SUV Investigation and Police build out equipment.
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City Council, June 7, 2022
Monthly Budget Adjustment Report
UTILITIES
A budget adjustment in the amount of $1,303,000 is needed in the Water CIP (4180) to establish Project 101403 – Well 312 Treatment System & Flushline. This project will flush the lines for Well 312 located in the Emprise Service Area. The City is seeking a Drought Relief grant that may fund $1,000,000 of the total expenditures. A budget adjustment in the amount of $1,035,000 is necessary in the Wastewater Fund (4210) to establish Project 101404 - Recoating Clarifiers 1 & 2. This project will fund the recoating of Clarifiers 1 & 2 at the Sutter Wastewater Treatment Plant and replace the existing lawn area with drought tolerant hardscaping.
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-119 BM 0100 General Fund 33030 - Recreation
Operations
Repair & Maintenance Services -
Real Property Exp $ 24,000 (24,000) $ $ -
AT-119 BM 0100 General Fund 33030 - Recreation
Operations Transfer Out to Fund 3130 Exp $ - 24,000 $ $ 24,000 AT-125 CM 0100 General Fund CMO - Budget Division Budget Only - Salary Adjustment - Decrease Exp $ - (40,130) $ $ (40,130)
AT-125 CM 0100 General Fund CMO - Budget Division Budget Only - Benefit Adjustment - Decrease Exp $ - (17,200) $ $ (17,200)
AT-125 CM 0100 General Fund CMO - City Manager's
Office Professional Services Exp $ 130,000 57,330 $ $ 187,330 AT-138 DD 0100 General Fund CED - Economic
Development
Budget Only - Salary Adjustment
- Decrease Exp $ - (17,500) $ $ (17,500)
AT-138 DD 0100 General Fund CED - Economic
Development
Budget Only - Benefit
Adjustment - Decrease Exp $ - (7,500) $ $ (7,500)
AT-138 DD 0100 General Fund CED - Economic
Development Business Expenses Exp $ 2,000 25,000 $ $ 27,000 AT-144 CM 0100 General Fund MPD - Field Operations Budget Only - Salary Adjustment - Decrease Exp $ (485,746) (56,700) $ $ (542,446)
AT-144 CM 0100 General Fund MPD - Field Operations Budget Only - Benefit Adjustment - Decrease Exp $ (276,549) (24,300) $ $ (300,849) AT-144 CM 0100 General Fund CMO - City Manager's
Office
Budget Only - Salary Adjustment
- Increase Exp $ 22,676 30,800 $ $ 53,476
AT-144 CM 0100 General Fund CMO - City Manager's
Office
Budget Only - Benefit
Adjustment - Increase Exp $ - 13,200 $ $ 13,200
AT-144 CM 0100 General Fund CMO - City Manager's
Office Professional Services Exp $ 187,330 37,000 $ $ 224,330 AT-159 CM 0100 General Fund 19320/02010 Budget Only - Salary Decrease Exp $ (542,446) (10,382) $ $ (552,828) AT-159 CM 0100 General Fund 19320/02010 Budget Only - Benefit Decrease Exp $ (300,849) (6,921) $ $ (307,770) AT-159 CM 0100 General Fund 19320/02010 Professional Services Exp $ 224,329 17,303 $ $ 241,632 AT-160 CM 0100 General Fund 19320/19325 Budget Only - Salary Decrease Exp $ (552,828) (9,600) $ $ (562,428) AT-160 CM 0100 General Fund 19320/19325 Budget Only - Benefit Decrease Exp $ (314,170) (6,400) $ $ (320,570) AT-160 CM 0100 General Fund 19320/19325 Professional Services Exp $ - 16,000 $ $ 16,000 AT-162 CM 0100 General Fund 18210 - MFD Suppression Interfund Charges - Service Credit Labor Charges Rev $ - 200,000 $ $ 200,000
A budget adjustment is necessary to increase the expenditure budget to track the $200,000 that was allocated for the funding to support the development of the Enhanced Infrastructure Financing District (EIFD) Program in the Public Safety Labor task in the ARPA project. This task is used to track the reimbursement of ineligible expenditures and the increase in this adjustment will track costs associated with the EIFD project. The City of Modesto received $45.9 million in total allocated ARPA funds. This project will track costs related to the development of the EIFD program and will be drawn against the Public Safety Payroll task as the costs are part of the ineligible expenditure category. This project was approved as part of the City's ARPA Spending Plan via Council Resolution 2021-194.
A budget adjustment in the amount of $17,303 is needed to move budget from MPD to City Manager's Office to pay for services rendered related to the Forward Together Program, which is a public safety initiative.
A budget adjustment in the amount of $16,000 is needed to cover expenses related to finding a new dispatch delivery service model for the City of Modesto.
A budget adjustment of $57,330 is necessary to move Salary and Benefit savings from the vacant Financial Analyst III position in CMO - Budget to Professional Services in CMO in order to cover Slate expenses, recruitment expenses, and reimbursements.
A budget adjustment of $25,000 is necessary to utilize salary savings to assist with new employee expenses and CoStar Data Services upgrade.
A budget adjustment is necessary to reduce the Recreation Operations budget in the amount of $24,000 for Repair and Maintenance Services - Real Property and reallocate the budget to newly created Project 101389. In addition, a transfer needs to be established to move the budget from the operating budget to the project. The A budget adjustment of $81,000 is necessary to move salary savings from PD to City Manager's Office in order to cover two months of a double-filled Deputy City Manager position, Slate expenses, recruitment expenses, and State and Federal advocacy expenses. Double filling of the Deputy City Manager position is directly related to the completion of the Forward Together project and the movement of funds from the Police Department budget will help to cover this additional cost to the City Manager's budget.
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-164 CM 0100 General Fund 70100 - Transfers Out Transfers Out to Fund 1390 Exp $ - 200,000 $ $ 200,000 A budget adjustment is necessary to establish the transfer out from the General Fund to the ARPA EIFD project budget for the revenue that will be ultimately be reimbursed from ARPA funds to support the development of the Enhanced Infrastructure Financing District (EIFD) Program. This funding is coming from the amounts received from the American Rescue Plan Act of 2021 Funds. The City of Modesto received $45.9 million in total allocated ARPA funds. This project was approved as part of the City's ARPA Spending Plan via Council Resolution 2021-194.
Total Changes for Fund 0100 $ (1,882,253) $ 400,000 $ (1,482,253) AT-122 BM 1120 Grants - PLHA Program 101347 - PLHA 2020-21 Direct Loan Exp $ 371,260 (276,378) $ $ 94,882 AT-122 BM 1120 Grants - PLHA Program 101347 - PLHA 2020-21 Direct Loan - CHS Youth Housing AUC Exp $ - 276,378 $ $ 276,378
AT-123 BM 1120 Grants - PLHA Program 101377 - PLHA 2021-22 Direct Loan Exp $ 1,431,925 (223,622) $ $ 1,208,303 AT-123 BM 1120 Grants - PLHA Program 101377 - PLHA 2021-22 Direct Loan - CHS Youth Housing AUC Exp $ - 173,622 $ $ 173,622
AT-123 BM 1120 Grants - PLHA Program 101377 - PLHA 2021-22 Direct Loan - CHS AD Youth Housing AUC Exp $ - 50,000 $ $ 50,000
Total Changes for Fund 1120 $ 1,803,185 $ - $ 1,803,185 AT-117 BM 1130 Grants - CDBG Direct
Program 101193 - Microenterprise HUD Intergov Federal Revenue Rev $ 110,000 (16,170) $ $ 93,830 AT-117 BM 1130 Grants - CDBG Direct
Program 101193 - Microenterprise Direct Loan Principle Rev $ - 16,170 $ $ 16,170 AT-121 BM 1130 Grants - CDBG Direct
Program 61130 - Transfer In Transfer In From Fund 1155 TI $ - 20,000 $ $ 20,000 An adjustment is necessary to budget a transfer from RLF funding for CDBG expenses. HUD allows for a portion of RLF program income to be used to fund CDBG admin expenses associated with the program.
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1359 Rev $ 546,707 (129,332) $ $ 417,375 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1416 Rev $ - 10,687 $ $ 10,687 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1417 Rev $ - 10,944 $ $ 10,944 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1418 Rev $ - 8,036 $ $ 8,036 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1419 Rev $ - 9,488 $ $ 9,488 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1421 Rev $ - 10,638 $ $ 10,638 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1422 Rev $ - 5,651 $ $ 5,651 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1424 Rev $ - 10,525 $ $ 10,525 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1425 Rev $ - 10,487 $ $ 10,487 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1426 Rev $ - 10,812 $ $ 10,812 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1427 Rev $ - 10,476 $ $ 10,476 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1428 Rev $ - 10,342 $ $ 10,342 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1429 Rev $ - 10,576 $ $ 10,576 A budget adjustment is needed to allocate $276,378 to Permanent Supportive Housing/CHS 1208 9th St. The remaining budget needed for the 9th Street project will be funded by PLHA 2021-22, project 101377.
A budget adjustment is needed to allocate $233,622 to Permanent Supportive Housing/CHS 1208 9th St. The remaining budget needed for the 9th Street project will be funded by PLHA 2020-21, project 101347.
A budget adjustment is needed to adjust the revenue for project 101193, Microenterprise, in order to close the project.
#6..
- 47 -
Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1430 Rev $ - 10,670 $ $ 10,670 AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1359 Exp $ 10,031 (8,381) $ $ 1,650
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1416 Exp $ - 687 $ $ 687
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1417 Exp $ - 944 $ $ 944
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1418 Exp $ - 789 $ $ 789
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1419 Exp $ - 320 $ $ 320
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1421 Exp $ - 638 $ $ 638
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1422 Exp $ - 1,115 $ $ 1,115
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1424 Exp $ - 525 $ $ 525
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1425 Exp $ - 487 $ $ 487
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1426 Exp $ - 812 $ $ 812
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1427 Exp $ - 476 $ $ 476
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1428 Exp $ - 342 $ $ 342
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1429 Exp $ - 576 $ $ 576
AT-133 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1430 Exp $ - 670 $ $ 670
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1359 Rev $ 427,848 (81,976) $ $ 345,872 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1431 Rev $ - 10,801 $ $ 10,801 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1432 Rev $ - 10,502 $ $ 10,502 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1433 Rev $ - 10,265 $ $ 10,265 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1434 Rev $ - 7,885 $ $ 7,885 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1420 Rev $ - 10,530 $ $ 10,530 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1400 Rev $ - 10,532 $ $ 10,532 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1401 Rev $ - 10,846 $ $ 10,846 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance Federal Revenue - Activity 1402 Rev $ - 10,615 $ $ 10,615 AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1359 Exp $ 1,650 (1,177) $ $ 473
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1423 Exp $ 10,000 (10,000) $ $ -
A budget adjustment is necessary to clean up the project budget in order to close the project. There is no change to the total amount budgeted.
A budget adjustment is necessary to clean up the project budget in order to close the project. There is no change to the total amount budgeted. #6..
- 48 -
Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1406 Exp $ 1,874 (130) $ $ 1,744
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1408 Exp $ 1,384 (561) $ $ 823
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1431 Exp $ - 801 $ $ 801
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1432 Exp $ - 502 $ $ 502
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1433 Exp $ - 265 $ $ 265
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
AD 1434 Exp $ - 226 $ $ 226
AT-135 BM 1130 CDBG - Direct Program 101256 - Small Business Assistance
Services - City Forces - Interfund
1359 Appr Unit C Exp $ 220,325 10,074 $ $ 230,399
Total Changes for Fund 1130 $ 1,329,819 $ 20,000 $ 1,349,819 AT-121 BM 1155 Grants - RLF Program Income 71155 - Transfer Out Transfer Out to Fund 1130 TO $ - 20,000 $ $ 20,000 An adjustment is necessary to budget a transfer from RLF funding for CDBG expenses. HUD allows for a portion of RLF program income to be used to fund CDBG admin expenses associated with the program.
Total Changes for Fund 1155 $ - $ 20,000 $ 20,000
AT-116 BM 1160 Housing Economic
Development Fund 100829 - Eco Dev CDBG HUD Intergov Federal Revenue Rev $ 81,344 (50,313) $ $ 31,031 AT-116 BM 1160 Housing Economic
Development Fund 100829 - Eco Dev CDBG Direct Loan Principle Rev $ - 30,071 $ $ 30,071 AT-116 BM 1160 Housing Economic
Development Fund 100829 - Eco Dev CDBG Direct Loan Interest RLF Rev $ - 16,900 $ $ 16,900 AT-116 BM 1160 Housing Economic
Development Fund 100829 - Eco Dev CDBG Direct Loan Interest Rev $ - 3,342 $ $ 3,342 Total Changes for Fund 1160 $ 81,344 $ - $ 81,344
AT-115 CM 1170 HOME Investment Partnership
Prgm
101184 - Archway
Commons Phase II Federal Revenue Rev $ 1,480,000 30,000 $ $ 1,510,000 AT-115 CM 1170 HOME Investment Partnership
Prgm
101184 - Archway
Commons Phase II 1282 Activity Delivery Exp $ 85,000 30,000 $ $ 115,000 AT-145 BM 1170 Grants - HOME Investment
Partnership
100918 - 522 Granger
Housing
Federal Housing Urban
Development Revenue Rev $ 621,996 (175,888) $ $ 446,108 AT-145 BM 1170 Grants - HOME Investment
Partnership
100918 - 522 Granger
Housing Direct Loan Principle H & HDPL Rev $ - 33,976 $ $ 33,976 AT-145 BM 1170 Grants - HOME Investment
Partnership
100918 - 522 Granger
Housing Direct Interest H & HDPL Rev $ - 141,912 $ $ 141,912 Total Changes for Fund 1170 $ 2,186,996 $ 60,000 $ 2,246,996 AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program Intergov - State - CA Recycle Rev $ - 54,352 $ $ 54,352 AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program
Appr C - Beverage Container
Collection Exp $ - 16,352 $ $ 16,352
AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program Appr C - Litter Clean-up Exp $ - 500 $ $ 500 AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program Appr C - Advertising Exp $ - 12,500 $ $ 12,500 AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program Appr C - Recycling Education Exp $ - 5,000 $ $ 5,000 AT-161 CM 1341 Grants-Operation Grants
Reimbursed
101405 - PW-City/County
Payment Program Appr C - Svcs City Forces Exp $ - 20,000 $ $ 20,000 Total Changes for Fund 1341 $ - $ 108,704 $ 108,704
The City of Modesto received grant funding in the amount of $54,352.00 from the City/County Payment Program through Cal Recycle. These funds will be utilized to enhance the current recycling program and expand our efforts through education and outreach, advertising and collection programs. In addition, allocated funds will support a designated staff member.
A budget adjustment is needed to clean up the revenue budget for the project. There is no change to the project budget.
A budget adjustment is needed to increase the revenue and expense budgets for project 101184 - Archway Commons Phase II in the amount of $30,000. This increase will capture additional staff time as the project progresses A budget adjustment is needed for the revenue budget for project 100829 in order to close the project. No change to the overall project budget. #6..
- 49 -
Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
47005-Misc. Revenue - Spirit of
Giving Rev $ 18,163 10,000 $ $ 28,163
AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
47005-Misc. Revenue - Leisure
Bucks Rev $ - 24,000 $ $ 24,000
AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
47031 - Misc.
Donations/Contributions NonIntergovRev $ 3,500 143 $ $ 3,643 AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
Spirit of Giving-10397-Business
Expenses Exp $ 68,787 10,000 $ $ 78,787
AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
Leisure Bucks-10398-
Professional Services Exp $ 25,000 24,000 $ $ 49,000
AT-142 CM 1380 Non-Capital Parks Fund (NonGrant)
100880 - Fund
Development/Special
Projects
Movie Night-10390-Professional
Services Exp $ 2,000 143 $ $ 2,143
Total Changes for Fund 1380 $ 117,450 $ 68,286 $ 185,736 AT-163 CM 1390 American Rescue Grants
Fund
101345 - CMO - ARPA
2021 Spending (1st) Appr Unit C (3.1) Exp $ - 200,000 $ $ 200,000 A budget adjustment is necessary to establish the Non-Capital Project expenditure budget to track the $200,000 that was allocated for the funding to support the development of the Enhanced Infrastructure Financing District (EIFD) Program. This funding is coming from the amounts received from the American Rescue Plan Act of 2021 Funds. The City of Modesto received $45.9 million in total allocated ARPA funds. This project will track costs related to the development of the EIFD program and will be drawn against the Public Safety Payroll task as the costs are part of the ineligible expenditure category. This project was approved as part of the City's ARPA Spending Plan via Council Resolution 2021-194.
AT-164 CM 1390 American Rescue Grants
Fund 61390 - Transfers In Transfers In from Fund 0100 Rev $ - 200,000 $ $ 200,000 A budget adjustment is necessary to establish the transfer out from the General Fund to the ARPA EIFD project budget for the revenue that will be ultimately be reimbursed from ARPA funds to support the development of the Enhanced Infrastructure Financing District (EIFD) Program. This funding is coming from the amounts received from the American Rescue Plan Act of 2021 Funds. The City of Modesto received $45.9 million in total allocated ARPA funds. This project was approved as part of the City's ARPA Spending Plan via Council Resolution 2021-194.
AT-165 CM 1390 American Rescue Grants
Fund
101406 - CED - ARPA 2021
EIFD Program Discretionary Expenses Exp $ - 200,000 $ $ 200,000 A budget adjustment is necessary to increase the revenue budget for the Direct Charge account that is being used as on offset for the ARPA funds that are being used to reimburse the transfer out from the General Fund that is funding the EIFD Project expenditure budget. This funding is coming from the amounts received from the American Rescue Plan Act of 2021 Funds. The City of Modesto received $45.9 million in total allocated ARPA funds. This project will track costs related to the development of the EIFD program and will be drawn against the Public Safety Payroll task as the costs are part of the ineligible expenditure category. This project was approved as part of the City's ARPA Spending Plan via Council Resolution 2021-194.
Total Changes for Fund 1390 $ - $ 600,000 $ 600,000
AT-119 BM 3130 Parks Fund 101389 - Enslen Park
Improvements Transfer In from Fund 0100 Rev $ - 24,000 $ $ 24,000 AT-119 BM 3130 Parks Fund 101389 - Enslen Park
Improvements Business Expenses Exp $ - 24,000 $ $ 24,000 A budget adjustment is necessary to reduce the Recreation Operations budget in the amount of $24,000 for Repair and Maintenance Services - Real Property and reallocate the budget to newly created Project 101389. In addition, a transfer needs to be established to move the budget from the operating budget to the project. The A budget adjustment is necessary to recognize some of the miscellaneous revenue within Project 100880 - Fund Development/Special Projects and allocate it to the Spirit of Giving and Leisure Bucks tasks. In addition, this adjustment is balancing the Movie Night tasks with funds at Stanislaus Community Foundation. The revenue was received to the project related to these activities, but was not recognized. This adjustment recognizes the revenue and increases the specific tasks for tracking. #6..
- 50 -
Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-147 BM 3130 Parks Fund 101380 - Park Security
Camera Miscellaneous Revenue Rev $ - 17,000 $ $ 17,000
AT-147 BM 3130 Parks Fund 101380 - Park Security
Camera
Repair & Maintenance Services -
Real Property Exp $ - 17,000 $ $ 17,000
Total Changes for Fund 3130 $ - $ 82,000 $ 82,000
AT-136 BM 3140 Capital Grants - CIP Projects 101337 - BMF Parts Storage Room Upgrade
Intergov- Federal- Transit
Administration Rev $ 1,337,463 (16,976) $ $ 1,320,487
AT-136 BM 3140 Capital Grants - CIP Projects 101337 - BMF Parts Storage Room Upgrade Contingency - CIP Exp $ 104,164 (43,178) $ $ 60,986 AT-136 BM 3140 Capital Grants - CIP Projects 101337 - BMF Parts Storage Room Upgrade Construction Admin Exp $ 183,218 45,000 $ $ 228,218 AT-136 BM 3140 Capital Grants - CIP Projects 101337 - BMF Parts Storage Room Upgrade Construction Exp $ 1,320,842 (18,798) $ $ 1,302,044 AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab Intergov- State - LTF Rev $ 50,000 25,829 $ $ 75,829 AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab Construction Admin Exp $ 2,500 (2,500) $ $ - AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab Construction Exp $ 11,304 (11,304) $ $ - AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab Contingency - CIP Exp $ 23,402 (23,402) $ $ - AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab EDA Exp $ 12,794 (12,794) $ $ -
AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab AUC-CA-Construction Admin Exp $ - 16,755 $ $ 16,755 AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab AUC-CON-Construction Exp $ - 11,527 $ $ 11,527 AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab AUC-CTGY-Contingency - CIP Exp $ - 44,547 $ $ 44,547 AT-137 CM 3140 Capital Grants - CIP Projects 101348 - Amtrak Station Repairs and Rehab AUC-EDA-Eng./Design/Admin Exp $ - 3,000 $ $ 3,000 AT-139 BM 3140 Capital Grants - CIP Projects 101353 - BMF Tire Carousel Intergov-Federal-Federal Transit Administration Rev $ 44,755 (272) $ $ 44,483
AT-139 BM 3140 Capital Grants - CIP Projects 101353 - BMF Tire Carousel Intergov- State - LTF - Current Year Rev $ - $ 1 $ 1
AT-139 BM 3140 Capital Grants - CIP Projects 101353 - BMF Tire Carousel EA-Tools and Equip Supplies >$5,000 Exp $ 44,755 (271) $ $ 44,484
AT-140 BM 3140 Capital Grants - CIP Projects 101340 - PW- TC Video Surveillance System
Intergov - State - Prop 1B -
Capital Related Rev $ 116,946 (188) $ $ 116,758
AT-140 BM 3140 Capital Grants - CIP Projects 101340 - PW- TC Video Surveillance System
Appr Unit C - Video Equipment <
$5000 Exp $ 116,946 (188) $ $ 116,758
AT-149 BM 3140 Capital Grants - CIP Projects 101337-BMF Parts Storage Room Upgrade Contingency Exo $ 60,986 (44,981) $ $ 16,005 AT-149 BM 3140 Capital Grants - CIP Projects 101337-BMF Parts Storage Room Upgrade Construction Administration Exp $ 228,218 44,981 $ $ 273,199 Total Changes for Fund 3140 $ 3,658,293 $ 16,788 $ 3,675,081 AT-151 BM 3160 Capital Grants - Streets CIP
Projects
101063 - Pelandale
Interchange - Phase 2 EDA-CFF-Eng./Design/Admin Exp $ 204,849 (129,849) $ $ 75,000 AT-151 BM 3160 Capital Grants - Streets CIP
Projects
101063 - Pelandale
Interchange - Phase 2
CC-LA-R/W Support-CFF-Right
of Way Exp $ - 30,000 $ $ 30,000
AT-151 BM 3160 Capital Grants - Streets CIP
Projects
101063 - Pelandale
Interchange - Phase 2
CC-UC-R/W Support-CFF-Utility
Relocation Exp $ - 7,000 $ $ 7,000
A budget adjustment is necessary to recognize cell tower revenue and establish the project expenditure budget. The project will be used to purchase security cameras and fund small projects at various locations.
The purpose of this adjustment is to redistribute funds between task lines in the project to cover expenses associated with a consultant agreement for construction management services
A budget adjustment is necessary to re-allocate funds from the EDA CFF task to the appropriate tasks as needed for completion of this project.
A budget adjustment is necessary to reallocate budget from CTGY and CON to CA, and reduce an overbudgeted FTA grant by $16,976. $18,797.55 in actuals are being moved from CON to CA and EDA due to them being improperly coded. After the adjustment has been processed, the budgeted CON amount will match the construction contract, actuals, and encumbrances in the project.
A budget adjustment is necessary to recognize $25,829 in LTF from project 101238 (Reestablished as current project 101348). The expense budgets will be rearranged to match how they were created in the original project once the Appr Unit C actuals are moved to the correct task lines by A/P.
A budget adjustment is necessary to reduce revenue and expense budgets for project closure. $1 in LTF is being budgeted to account for an $0.87 difference between the revenue and expenses.
A budget adjustment is necessary to reduce revenue and expense budgets for project closure.
#6..
- 51 -
Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-151 BM 3160 Capital Grants - Streets CIP
Projects
101063 - Pelandale
Interchange - Phase 2
UC-R/W Support-CFF-Utility
Relocation Exp $ - 10,000 $ $ 10,000
AT-151 BM 3160 Capital Grants - Streets CIP
Projects
101063 - Pelandale
Interchange - Phase 2
LA-R/W Support-CFF-Right of
Way Exp $ - 82,849 $ $ 82,849
AT-152 BM 3160 Capital Grants - Streets CIP
Projects
101119 - SR 132 W.
Expressway - CON
CTGY-ProjectML - ContingencyCIP Exp $ 2,478,275 (89,227) $ $ 2,389,048 AT-152 BM 3160 Capital Grants - Streets CIP
Projects
101119 - SR 132 W.
Expressway - CON
CA-DokkenML - Construction
Administration Exp $ 1,667,480 89,227 $ $ 1,756,707
Total Changes for Fund 3160 $ 4,350,604 $ - $ 4,350,604 AT-129 BM 3246 Fairview Village #2 CED - Fairview Village #2 CS-CD-Time and Materials Fee Rev $ - 50,000 $ $ 50,000 AT-129 BM 3246 Fairview Village #2 CED - Fairview Village #2 Services - City Forces - Interfund Exp $ - 25,000 $ $ 25,000 AT-129 BM 3246 Fairview Village #2 CED - Fairview Village #2 Professional Services Exp $ - 20,000 $ $ 20,000 AT-129 BM 3246 Fairview Village #2 CED - Fairview Village #2 Legal Services Exp $ - 5,000 $ $ 5,000 Total Changes for Fund 3246 $ - $ 100,000 $ 100,000
AT-141 BM 4140 Water Fund Grant 101131 - GSP Modesto Sub Basin Svcs City Forces - Interfund Exp $ 230,000 (50,000) $ $ 180,000 AT-141 BM 4140 Water Fund Grant 101131 - GSP Modesto Sub Basin Professional Services Exp $ 2,651,225 50,000 $ $ 2,701,225 AT-157 BM 4140 Water Grants 101131 - GSP Modesto Sub
Basin
Appr Unit C - Svcs City Forces -
Interfund Exp $ 180,000 (25,000) $ $ 155,000
AT-157 BM 4140 Water Grants 101131 - GSP Modesto Sub
Basin
Appr Unit C - Professional
Services Exp $ 2,701,255 25,000 $ $ 2,726,255
Total Changes for Fund 4140 $ 5,762,480 $ - $ 5,762,480 AT-113 BM 4180 Water CIP Fund 101367 - Sylvan Water Main Upgrade Engineering/Design/Admin Exp $ - 25,000 $ $ 25,000 A budget adjustment in the amount of $25,000 is needed to establish the initial expense budget for the Sylvan Water Main upgrade project.
AT-127 BM 4180 Water CIP Fund 101078 - Del Rio
Replacement Well Contingency-CIP Exp $ 265,000 (75,000) $ $ 190,000 AT-127 BM 4180 Water CIP Fund 101078 - Del Rio
Replacement Well Eng./Design/Admin Exp $ 700,000 75,000 $ $ 775,000 AT-128 BM 4180 Water CIP Fund 100953 - La Loma El Vista to Riverside Contingency-CIP Exp $ 330,000 (60,000) $ $ 270,000 AT-128 BM 4180 Water CIP Fund 100953 - La Loma El Vista to Riverside Eng./Design/Admin Exp $ 263,000 60,000 $ $ 323,000 AT-156 BM 4180 Water Fund CIP Projects 101154 - Sutter S&R Water Mains Construction Exp $ 740,000 (75,000) $ $ 665,000
AT-156 BM 4180 Water Fund CIP Projects 101154 - Sutter S&R Water Mains Eng./Design/Admin Exp $ 170,000 75,000 $ $ 245,000 AT-158 BM 4180 Water Fund CIP Projects 100804 - Paradise Water Main Construction Exp $ 2,100,000 (100,000) $ $ 2,000,000 AT-158 BM 4180 Water Fund CIP Projects 100804 - Paradise Water Main Eng./Design/Admin Exp $ 211,000 100,000 $ $ 311,000 Total Changes for Fund 4180 $ 4,779,000 $ 25,000 $ 4,804,000 AT-118 BM 4210 Sewer Operations Fund 100535 - Sonoma Trunk Ext Lift St. Construction Exp $ 1,315,000 (50,000) $ $ 1,265,000 AT-118 BM 4210 Sewer Operations Fund 100535 - Sonoma Trunk Ext Lift St. Eng./Design/Admin Exp $ 415,198 50,000 $ $ 465,198 A budget adjustment is necessary to reallocate funds within tasks on the project. No additional funding is being requested.
A budget adjustment is necessary to move budget from the CTGY-PROJECTML task to the CA-DOKKENML task to account for the fifth amendment to Dokken Engineering. The funding source is not charging as it is staying within the SR 132 Regional Measure L funds.
A budget adjustment is necessary to reallocate funds within tasks on the project. No additional funding is being requested.
A budget adjustment is necessary to reallocate funds within tasks on the project. No additional funding is being requested.
A budget adjustment in the amount of $75,000 is needed in the Water CIP Fund, Del Rio Replacement Well project, to move budget from Contingency to Engineering/Design/Administration to cover additional costs related to the design state of this project.
A budget adjustment in the amount of 60,000 is needed in the Water CIP Fund, La Loma El Vista to Riverside project, to move budget from Contingency to Engineering/Design/Administration to cover additional costs related to the design state of this project.
A budget adjustment in the amount of $50,000 is needed to recognize revenue and appropriate expense budget related to the formation of the Fairview Village #2 CFD.
A budget adjustment is necessary to re-distribute funds between tasks within the project. There is sufficient funding in construction to move to the Eng./Design/Admin task.
A budget adjustment in the amount of $50,000 is needed to move budget between Services City Forces - Interfund to Professional Services to cover contract costs. #6..
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-154 BM 4210 Sewer Operations Fund 101381 - River Trunk Repair at 7th
Appr. Unit C - Construction
Administration Exp $ 25,000 (24,000) $ $ 1,000
AT-154 BM 4210 Sewer Operations Fund 101381 - River Trunk Repair at 7th Appr. Unit C - Construction Exp $ 558,717 58,000 $ $ 616,717 AT-154 BM 4210 Sewer Operations Fund 101381 - River Trunk Repair at 7th
Appr. Unit C -
Eng./Design/Admin Exp $ 25,000 (24,000) $ $ 1,000
Total Changes for Fund 4210 $ 2,338,915 $ 10,000 $ 2,348,915 AT-153 CM 4212 Wastewater PCE Mitigation
Fund
100668 - WW PCE
Mitigation Site 1 Appr. Unit C Exp $ 1,670,632 119,582 $ $ 1,790,214 A budget adjustment is necessary to cover expenses associated with professional services being provided by Tetra Tech approved by the City Attorney's Office in a letter dated August 11, 2021.
Total Changes for Fund 4212 $ 1,670,632 $ 119,582 $ 1,790,214 AT-155 BM 4330 County Aircraft Tax Fund 101055 - Airport Layout Update AIP 41 Transfer Out to Fund 4320 TO $ - 1,246 $ $ 1,246 A budget adjustment is necessary to re-establish the transfer out from the County Aircraft Tax Fund to Project 101055 - Airport Layout Update AIP 41. The transfer out is the remaining amount budgeted for the project, however, the transfer out lapsed at the end of the prior fiscal year and needs to be reestablished.
Total Changes for Fund 4330 $ - $ 1,246 $ 1,246
AT-148 BM 4510 Bus Fixed Route Fund 101238 Amtrak Station Repairs/Rehab AUC-CA-Construction Admin Exp $ 48,981 (1,048) $ $ 47,933 AT-148 BM 4510 Bus Fixed Route Fund 101238 Amtrak Station Repairs/Rehab AUC-CON-Construction Exp $ 434,166 (222) $ $ 433,944 AT-148 BM 4510 Bus Fixed Route Fund 101238 Amtrak Station Repairs/Rehab AUC-EDA-Eng./Design/Admin Exp $ 50,599 (280) $ $ 50,319 Total Changes for Fund 4510 $ 533,746 $ (1,550) $ 532,196 AT-114 BM 4549 Bus Fixed Route Fleet
Replacement Fund
53237 - PW-Fleet
Replacement Fund Bus
Services
Interfund Charges - Equipment
Pool Replacement Rev $ 12,446 (12,446) $ $ -
A budget adjustment is necessary to move the revenue related to equipment for StanRTA Maintenance from Fund 4549 to Fund 5409. Fund 4549 is no longer being used as Transit has moved to the StanRTA JPA. The adjustment will account for the replacement revenue anticipated to be received for cost center 53243 - City Services for StanRTA. Cost Center 53218 was created to track all revenue and expenses related to equipment tied to StanRTA.
AT-131 BM 4549 Bus Fixed Route Fleet
Replacement Fund Transfer Out Fund 4549 Transfer Out to Fund 5409 TO $ - 138,903 $ $ 138,903 A budget adjustment is necessary to establish the establish the transfer of $138,903 from Fund 4549 to Fund 5409. The fund 4549 was used for vehicles tied to the Transit Maintenance cost center. Those vehicles have now been moved to 5409 as the employees are housed in Fund 5400. The budget adjustment falls within the Budget Manager authority under bullet point #8 as this adjustment is moving from one fleet replacement sub-fund to the Fleet Replacement Management fund. Activity related to fleet replacement funds are done through the management fund. The replacement for these vehicles needs to move to the fund where they are now housed. All cash and fair market value in Fund 4549 is being moved to Fund 5409 so that the fund can be closed.
Total Changes for Fund 4549 $ 12,446 $ 126,457 $ 138,903 AT-146 BM 4600 Golf Fund 101294 - Dryden Clubhouse
Renovation Miscellaneous Revenue Rev $ 700,000 (700,000) $ $ - AT-146 BM 4600 Golf Fund 101294 - Dryden Clubhouse
Renovation Legal Settlements Rev $ - 700,000 $ $ 700,000 Total Changes for Fund 4600 $ 700,000 $ - $ 700,000
AT-126 DD 4895 Waste to Energy Dist Fund PW - Waste-to-Energy Administration Professional Services Exp $ - 21,747 $ $ 21,747 A budget adjustment of $21,747 is necessary to fund an agreement with R3 Consulting for compliance with state law. There are sufficient fund reserves for the increase in expense budget.
Total Changes for Fund 4895 $ - $ 21,747 $ 21,747
A budget adjustment is necessary to move revenue from the miscellaneous revenue account to the legal settlements account within project 101294. In discussions with Accounting, it was determined that the revenue should be placed in account 47021 instead of account 47005. All revenue is remaining in the project and this is simply A budget adjustment is needed to reduce the expense budget for project closure A budget adjustment is necessary to increase the project budget to cover Emergency Repair expenses on the project. The project will be closed once all payments are released.
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-134 CM 5230 Information Technology Fund 101220 - Hyland & DocuSign Transfer In from Various Funds TI $ 197,197 $ 197,197 - $ A budget adjustment is necessary to re-establish the transfer outs from various funds to Project 101220. This transfer out should not lapse per the Operating Budget Policy (Page 4 item number 4. under Inter-fund transfers and loans). In addition, Fund 4510 transfer in remaining budget is being reduced and re-allocated to all funds. The reason being is that Fund 4510 is no longer active in FY 21-22 with the JPA formation.
The total remaining transfer to the project is $42,117.19. All other funds will be charged for their portion of the expenses. This will be the final transfer for Project 101220 and once completed the project will be closed.
AT-167 DD 5230 Information Technology Fund 17410 - IT Administration Budget Only - Salary Adjustment - Decrease Exp $ - (25,000) $ $ (25,000)
AT-167 DD 5230 Information Technology Fund 17410 - IT Administration Budget Only - Benefit Adjustment - Decrease Exp $ - (5,000) $ $ (5,000)
AT-167 DD 5230 Information Technology Fund 17410 - IT Administration Professional Services Exp $ 3,160 30,000 $ $ 33,160 Total Changes for Fund 5230 $ 200,357 $ - $ 200,357
AT-132 BM 5310 Insurance Administration Fund Transfer Out Fund 5310 Transfer Out to Fund 5319 TO $ - $ 53 $ 53 A budget adjustment is necessary to establish the establish the transfer of $53 from Fund 5319 to Fund 5310. The fund 5319 is an old Fleet Replacement sub fund for Insurance Administration. The fund has not been used since 2018. All cash and fair market value in Fund 5319 is being moved to Fund 5310 so that the fund can be closed.
Total Changes for Fund 5310 $ - $ 53 $ 53
AT-132 BM 5319 Insurance Administration
Replacement Fund Transfer In Fund 5319 Transfer In from Fund 5310 TI $ - $ 53 $ 53 A budget adjustment is necessary to establish the establish the transfer of $53 from Fund 5319 to Fund 5310. The fund 5319 is an old Fleet Replacement sub fund for Insurance Administration. The fund has not been used since 2018. All cash and fair market value in Fund 5319 is being moved to Fund 5310 so that the fund can be closed.
Total Changes for Fund 5319 $ - $ 53 $ 53
AT-120 BM 5400 Fleet Management Fund 101365 - 416 N Jefferson and 121 Elm St Land Acquisition Exp $ 570,000 (5,000) $ $ 565,000 AT-120 BM 5400 Fleet Management Fund 101365 - 416 N Jefferson and 121 Elm St Eng./Design/Admin Exp $ - 5,000 $ $ 5,000 AT-150 BM 5400 Fleet Management Fund 100451 - Fleet Maintenance Facility Contingency Exp $ 325,114 (128,089) $ $ 197,025 AT-150 BM 5400 Fleet Management Fund 100451 - Fleet Maintenance Facility Construction Administration Exp $ 573,515 128,089 $ $ 701,604 AT-166 DD 5400 Fleet Management Fund 53255 - Fleet Vehicle and Equipment Maintenance
Budget Only - Salary Adjustment
- Decrease Exp $ - (150,000) $ $ (150,000)
AT-166 DD 5400 Fleet Management Fund 53255 - Fleet Vehicle and Equipment Maintenance
Budget Only - Benefit
Adjustment - Decrease Exp $ - (125,000) $ $ (125,000)
AT-166 DD 5400 Fleet Management Fund 53255 - Fleet Vehicle and Equipment Maintenance Oils Lubricants Expenses Exp $ 1,772,761 275,000 $ $ 2,047,761 Total Changes for Fund 5400 $ 3,241,390 $ - $ 3,241,390 AT-114 BM 5409 Fleet Management Fleet
Replacement Fund
53218 - PW-Fleet
Equipment Replacement -
StanRTA Maintenance
Interfund Charges - Equipment
Pool Replacement Rev $ - 12,446 $ $ 12,446
A budget adjustment is necessary to move the revenue related to equipment for StanRTA Maintenance from Fund 4549 to Fund 5409. Fund 4549 is no longer being used as Transit has moved to the StanRTA JPA. The adjustment will account for the replacement revenue anticipated to be received for cost center 53243 - City Services for StanRTA. Cost Center 53218 was created to track all revenue and expenses related to equipment tied to StanRTA.
A budget adjustment is necessary to move projected salary savings for vacant positions in Cost Center 53255 to the Oils Lubricants expense account as the invoices related to the account are coming in higher for the fiscal year.
A budget adjustment is necessary to move projected salary savings for the vacant CIO position to Professional Services to account for the invoices related to recruitment of the position.
A budget adjustment is necessary to redistribute funds between tasks in the project to cover expenses associated with a consultant agreement for construction management services.
A budget adjustment is necessary to reallocate funds from the Land Acquisition task to the Eng./Design/Admin task within project 101365. There are invoices related to legal costs that need to be paid and those invoices should not be paid under the land acquisition task per the asset guidelines.
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Department Director/Budget Manager/City Manager Approved Budget Adjustments EXHIBIT B For FY2021/22
AT #
Appro
ved by
CM,
BM or
DD Fund Fund Name Cost Ctr/Project Name Account Name
Rev/E
xp/TI/
TO
Accou
nt Current Budget
Increase
(Decrease)
Revised
Budget Description
AT-130 BM 5409 Fleet Management
Replacement Fund Transfer In Fund 5409 Transfer In from Fund 6599 TI $ - 21,852 $ $ 21,852 A budget adjustment is necessary to establish the establish the transfer of $21,852 from Fund 6599 to Fund 5409. The fund 6599 was used for one vehicle that was tied to the 10th Street JPA. All motor pool vehicles are housed in Fund 5409. The replacement for the vehicle needs to move to the fund where it is now housed. All cash and fair market value in Fund 6599 is being moved to Fund 5409 so that the fund can be closed.
AT-131 BM 5409 Fleet Management
Replacement Fund Transfer In Fund 5409 Transfer In from Fund 4549 TI $ - 138,903 $ $ 138,903 A budget adjustment is necessary to establish the establish the transfer of $138,903 from Fund 4549 to Fund 5409. The fund 4549 was used for vehicles tied to the Transit Maintenance cost center. Those vehicles have now been moved to 5409 as the employees are housed in Fund 5400. The budget adjustment falls within the Budget Manager authority under bullet point #8 as this adjustment is moving from one fleet replacement sub-fund to the Fleet Replacement Management fund. Activity related to fleet replacement funds are done through the management fund. The replacement for these vehicles needs to move to the fund where they are now housed. All cash and fair market value in Fund 4549 is being moved to Fund 5409 so that the fund can be closed.
Total Changes for Fund 5409 $ - $ 173,201 $ 173,201
AT-130 BM 6599 JPA-10th Street Fleet
Replacement Fund Transfer Out Fund 6599 Transfer Out to Fund 5409 TO $ - 21,852 $ $ 21,852 A budget adjustment is necessary to establish the establish the transfer of $21,852 from Fund 6599 to Fund 5409. The fund 6599 was used for one vehicle that was tied to the 10th Street JPA. All motor pool vehicles are housed in Fund 5409. The replacement for the vehicle needs to move to the fund where it is now housed. All cash and fair market value in Fund 6599 is being moved to Fund 5409 so that the fund can be closed.
Total Changes for Fund 6599 $ - $ 21,852 $ 21,852
AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2
Intergov-Federal-Land and
Water Conservation Rev $ 451,060 (415,065) $ $ 35,995
AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2
Intergov-State-Land and Water
Conservation Rev $ - 415,065 $ $ 415,065
AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2 Construction Exp $ 2,069,336 (972) $ $ 2,068,364 AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2 Contingency-CIP Exp $ 322,176 (268) $ $ 321,908 AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2 Eng./Design/Admin Exp $ 626,869 (563) $ $ 626,306 AT-124 BM 6710 JPA - TRRP Special Revenue
Fund - CIP 6710
100599 TRRP Gateway
Phase 2 Construction Administration Exp $ 189,774 2,251 $ $ 192,025 Total Changes for Fund 6710 $ 3,659,215 $ 448 $ 3,659,663 AT-134 CM Various Various Transfer Out from Various
Funds
Transfer Out to Fund 5320
(Project 101220) TO $ - 42,117 $ $ 42,117
A budget adjustment is necessary to re-establish the transfer outs from various funds to Project 101220. This transfer out should not lapse per the Operating Budget Policy (Page 4 item number 4. under Inter-fund transfers and loans). In addition, Fund 4510 transfer in remaining budget is being reduced and re-allocated to all funds. The reason being is that Fund 4510 is no longer active in FY 21-22 with the JPA formation.
The total remaining transfer to the project is $42,117.19. All other funds will be charged for their portion of the expenses. This will be the final transfer for Project 101220 and once completed the project will be closed.
Total Changes for Fund Various $ - $ 42,117 $ 42,117
A budget adjustment is necessary to move the budgeted revenue from Account 42050 to Account 42165 as the actual revenue posted in account 42165 within the TRRP Gateway Phase 2 project. Additionally, the expense budget is being cleaned up to match actuals. There is $1,803 available in the CON, CTGY-CIP, and EDA tasks to move. There is also a need for an additional $448 in the project expense budget which will come from the 6710 fund balance. There are sufficient funds in the fund balance for the increase of $448.
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 9, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Jaylen French, Director of Community and Economic Development SUBJECT: Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees for Fiscal Year 2022-23
CONTACT: Jessica Hill, Community Development Manager
[email protected], 209-577-5211
DESCRIPTION:
Consider acknowledging Receipt of Notification of the Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees Fiscal Year 2022-23. (Funding: Capital Facilities Fees and Development User Fees)
STRATEGIC PLAN ELEMENT:
The recommended action supports the City of Modesto’s 2020-2025 Strategic Plan Goal D to provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance and sustainability efforts.
BACKGROUND:
A “development user fee” is a charge for services provided by a governmental agency to a public citizen or group. Specifically, California State law, Government Code 66014(a), stipulates that user fees charged by local agencies, “…may not exceed the estimated reasonable cost of providing the service for which the fee is charged”. Managed by the Community and Economic Development Department, Development User Fees, are charged by the City to pay for the cost of various development services provided by City Staff. As codified in Modesto Municipal Code Section 8-1.904, Development User Fees shall be due and payable at the time a building permit is issued. These fees include:
Building Fees
Planning Fees
Capital Facilities Fees
Land Development Engineering Fees
Water and Sewer Connection Fees
Fire and Landscaping Plan Check Fees
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City Council, June 7, 2022
Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees for Fiscal Year 2022-23
In 2011, all development user fees were reviewed and refined by the Comprehensive Fees Task Force (CFTF). The CFTF suggested changes after considering several factors including land values, improvement project lists and annual inflation adjustments. The CFTF recommendations were approved by the City Council and resulted in a significant reduction in Capital Facilities Fees rates and adoption of a policy instituting an annual review of land values to ensure that vast swings in value (both low or high) are accounted for in the CFF Program.
The CFTF recommended an annual inflationary adjustment that can be applied each year based on the annual change in the San Francisco Bay Area Engineering News Record Construction Cost Index through the month of December of the year preceding each inflationary adjustment. Per Resolution 2011-105, all Development User Fees shall be automatically adjusted for inflation based on the annual change in the San Francisco Bay Area Engineering News Record (ENR) Construction Cost Index (CCI) through the month of December the year preceding each inflationary adjustment. The adjustments become effective on or about July 1st of each year.
DISCUSSION:
Resolution No. 2011-106 approved the annual adjustment as an administrative function and authorized staff to administratively apply annual inflationary adjustments to Development User Fees. Each inflationary adjustment is effective on July 1st of each fiscal year. The annual CCI inflationary adjustment to be considered for Fiscal Year 2022-23 is an increase of 9.19%.
Since 2011, fees have been increased three times, twice during that last two fiscal years. 2011-2019: Fees only increased by an inflation index of 5% 2019: Council approved an inflation factor of 3.49% to all fees per the Comprehensive Fees Task Force recommendation
2020: No fee increases as a result of COVID-19 pandemic (2020) ENR Construction Cost Index (CCI) was 5.7%
2021: The annual CCI inflationary adjustment for Fiscal Year 2021-22 was 2.1% 2022: The annual CCI inflationary adjustment to be considered for Fiscal Year 2022-23 is an increase of 9.19%
The City is required to provide at least one (1) meeting with stakeholders and other interested parties at least sixty (60) days in advance of the effective date of the adjustment. This Notification of the City’s 2022 Inflationary Adjustment meeting was held on April 28, 2022.
Additionally, staff took this item to the Economic Development Committee on May 2, 2022 and the item was forwarded to Council for approval.
FISCAL IMPACT:
The annual inflationary adjustment is 9.19% and, if approved, would become effective July 1, 2022. This action would result in an increase in revenues collected on all new construction projects on Development User Fees collected.
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City Council, June 7, 2022
Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees for Fiscal Year 2022-23
COMMITTEE RECOMMENDATION:
This item was presented to the Economic Development Committee on May 2, 2022 and was forwarded to the City Council for approval.
RECOMMENDED COUNCIL ACTION:
Staff Recommendation:
Resolution acknowledging Receipt of Notification of the Annual Inflationary Adjustment for Capital Facilities Fees and Development User Fees Fiscal Year 2022-23.
Approved by:
Jaylen French,
Director of Community and Economic Development
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Fiscal Year 2022-23 Capital Facilities Fees
3. Fiscal Year 2022-23 Development Fee Schedule
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6/7/2022/C&ED/JHill 1 2022-
MODESTO CITY COUNCIL
RESOLUTION NO. 2022-
RESOLUTION ACKNOWLEDGING RECEIPT OF NOTIFICATION OF THE ANNUAL\ INFLATIONARY ADJUSTMENT FOR CAPITAL FACILITIES FEES AND DEVELOPMENT USER FEES FISCAL YEAR 2022-23
WHEREAS, a development user fee is a charge for services provided by a governmental agency to a public citizen or group, and
WHEREAS, California State law, Government Code 66014(a), stipulates that user fees charged by local agencies, “…may not exceed the estimated reasonable cost of providing the service for which the fee is charged”, and WHEREAS, managed by the Community and Economic Development Department, development user fees, are charged by the City to pay for the cost of various development services provided by City Staff., and
WHEREAS, in 2011, all development user fees were reviewed and refined by the Comprehensive Fees Task Force, and suggested changes after considering several factors including annual inflation adjustments, and
WHEREAS, per Resolution 2011-105, all development user fees shall be automatically adjusted for inflation based on the annual change in the San Francisco Bay Area Engineering News Record Construction Cost Index through the month of December the year preceding each inflationary adjustment, with adjustments effective on July 1st of each year, and
WHEREAS, the annual Construction Cost Index inflationary adjustment to be considered for Fiscal Year 2022-23 is an increase of 9.19%, and #7..
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6/7/2022/C&ED/JHill 2 2022-
WHEREAS, the City is required to provide at least one meeting with stakeholders and other interested parties at least sixty days in advance of the effective date of the adjustment, and
WHEREAS, this notification of Inflationary Adjustment meeting was held on April 28, 2022, and
WHEREAS, City Staff presented item to the Economic Development Committee on May 2, 2022 and the item was forwarded to Council for review.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby acknowledges receipt of notification of the annual inflationary adjustment Capital Facilities Fees and Development User Fees Fiscal Year 2022-23.
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 7th day of June 2022 by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers: ?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST: ____________________________
DIANA NAYARES-PEREZ, CMC
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
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Industrial (Manufacturing) $ 435
Industrial (Warehousing) $ 404Daycare $ 987
Church $ 815Nursing Home $ 834
Medical Office $ 1,428General Office $ 1,046Hospital $ 1,172 Retail 50,000 - 100,000 $ 888
Retail 100,000 - 300,000 $ 822Retail >300,000 $ 794
NON-RESIDENTIAL (PER 1,000 sq. ft.)Hotel/Motel (per room) $ 542 Retail <50,000 $ 983Single Family $ 9,135Multi-Family $ 6,034Senior Housing $ 5,805 Industrial (Manufacturing) $ 2,955Industrial (Warehousing) $ 2,111 City of Modesto
2022-2023 Capital Facilities Fees Program
Fee Schedule
Effective July 1, 2022 to June 30, 2023
Downtown Residential Mix-Use Incentive
RESIDENTIAL (per dwelling unit)
Daycare $ 6,127Church $ 1,475Nursing Home $ 2,075
Medical Office $ 15,504
General Office $ 7,592Hospital $ 10,862Retail 50,000 - 100,000 $ 10,151Retail 100,000 - 300,000 $ 8,606 Retail >300,000 $ 8,041NON-RESIDENTIAL (PER 1,000 sq. ft.)Hotel/Motel (per room) $ 4,275Retail <50,000 $ 12,192 Single Family $ 10,246Multi-Family $ 7,222Senior Housing $ 4,798 City of Modesto
2022-2023 Capital Facilities Fees Program
Fee Schedule
Effective July 1, 2022 to June 30, 2023
Sphere of Influence
RESIDENTIAL (per dwelling unit)
Nursing Home $ 2,579
Industrial (Manufacturing) $ 3,144Industrial (Warehousing) $ 2,303Hospital $ 11,301 Daycare $ 6,579
Church $ 2,007
Retail >300,000 $ 8,268
Medical Office $ 15,871
General Office $ 8,035
Retail <50,000 $ 12,416
Retail 50,000 - 100,000 $ 10,380Retail 100,000 - 300,000 $ 8,833NON-RESIDENTIAL (PER 1,000 sq. ft.)Hotel/Motel (per room) $ 4,496Single Family $ 16,740 Multi-Family $ 11,301
Senior Housing $ 10,395
City of Modesto
2022-2023 Capital Facilities Fees Program
Fee Schedule
Effective July 1, 2022 to June 30, 2023
City Limits
RESIDENTIAL (per dwelling unit)
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Fiscal Year 2022-2023
Development Fee Schedule
Fees as of July 1, 2022
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PLANNING DIVISION ……………………………………………………………………………………………………………………………………………………………………………………… 4 ZONING ACTIONS ………………………………………………………………………………………………………………………………………………………………………………………4 MINOR ZONING ACTIONS …………………………………………………………………………………………………………………………………………………………………………4 LAND DIVISION …………………………………………………………………………………………………………………………………………………………………………………………4 GENERAL PLAN/SPECIFIC PLAN …………………………………………………………………………………………………………………………………………………………………4 ENVIRONMENTAL REVIEW ………………………………………………………………………………………………………………………………………………………………………4 MISCELLANEOUS ………………………………………………………………………………………………………………………………………………………………………………………5 COMMERCIAL CANNABIS …………………………………………………………………………………………………………………………………………………………………………………6 PHASE ONE APPLICATION FEE …………………………………………………………………………………………………………………………………………………………………6 PHASE TWO APPLICATION FEE ………………………………………………...…………………..……………………………………………………………………6 ANNUAL COMMERCIAL CANNABIS PERMIT FEE ………………………………………………………………………………………………………………………………………6 BUILDING SAFETY DIVISION ……………………………………………………………………………………………………………………………………………………………………………7 RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………………7 COMMERCIAL AND MULTI-FAMILY ……………………………………………………………………………………………………………………………………………………………7 OTHER ………………………………………………………………………………………………………………………………………………………………………………………………………8 CAPITAL FACILITIES FEES - CITY LIMITS ……………………………………………………………………………………………………………………………………………………………9 RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………………9 NON-RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………9 CAPITAL FACILITIES FEES - SPHERE OF INFLUENCE ……………………………………………………………………………………………………………………………………………10 RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………………10 NON-RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………10 CAPITAL FACILITIES FEES - DOWNTOWN ECONOMIC INCENTIVE PROGRAM ………………………………………………………………………………………………………11 RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………………11 NON-RESIDENTIAL ……………………………………………………………………………………………………………………………………………………………………………………11 INFRASTRUCTURE FINANCING PROGRAMS ………………………………………………………………………………………………………………………………………………………12 COMMUNITY FACILITIES DISTRICTS (IN GENERAL) ………………………………………………………………………………………………………………………………………12 DEFERRAL AGREEMENTS …………………………………………………………………………………………………………………………………………………………………………12 COMMUNITY FACLITIES DISTRICTS …………………………………………………………………………………………………………………………………………………………………13 CFD NO. 1996-1 (VILLAGE ONE) …………………………………………………………………………………………………………………………………………………………………13 One-Time Facilities Special Tax (Annexed Properties) ……………………………………………………………………………………………………………………………13 One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………………………13 Annual Maintenance Tax ……………………………………………………………………………………………………………………………………………………………………13 CFD NO. 1997-1 (NORTH BEYER PARK) ………………………………………………………………………………………………………………………………………………………14 One-Time Facilities Special Tax (Annexed Properties) ……………………………………………………………………………………………………………………………14 One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………………………14 Annual Maintenance Tax …………………………………………………………………………………………………………………………………………………………………………14 CFD NO. 1998-2 (CARVER-BANGS/PELANDALE-SNYDER) ……………………………………………………………………………………………………………………………15 One-Time Facilities Special Tax (Annexed Properties) ……………………………………………………………………………………………………………………………15 One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………………………15 Annual Maintenance Tax ……………………………………………………………………………………………………………………………………………………………………16 CFD NO. 2000-2 (COFFEE-CLARATINA) ………………………………………………………………………………………………………………………………………………………17 Annexation One-Time Special Tax ………………………………………………………………………………………………………………………………………………………17 Annual Maintenance Special Tax …………………………………………………………………………………………………………………………………………………………17 CFD NO. 2002-1 (NORTHPOINTE) ………………………………………………………………………………………………………………………………………………………………18 One Time Special Tax …………………………………………………………………………………………………………………………………………………….. 18 Annual Maintenance Special Tax …………………………………………………………………………………………………………………………………………………………18 CFD NO. 2003-1 (FAIRVIEW VILLAGE) …………………………………………………………………………………………………………………………………………………………19 One-Time Facilities Special Tax ……………………………………………………………………………………………………………………………………………………………19 Annual Facilities Special Tax ………………………………………………………………………………………………………………………………………………………………19 Annual Maintenance Special Tax …………………………………………………………………………………………………………………………………………………………19 Table of Contents
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CITY OF MODESTO
Development Fee Schedule
CFD NO. 2004-1 (VILLAGE ONE #2) ….……………………………………………………………………………………………………………………… 20 One-Time Facilities Special Tax (Annexed Properties) ……………………………………………………………………………………………………………………………20 One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………………………23 Annual Facilities Special Tax ………………………………………………………………………………………………………………………………………………………………24 Annual Maintenance Special Tax …………………………………………………………………………………………………………………………………………………………24 CFD NO. 2005-1 (HETCH HETCHY) ………………………………………………………………………………………………………………………………………………………………25 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………25 Maximum Annual Maintenance Special Tax ………………………………………………………………………………………………………………….. 25 Maximum Annual Facilities Special Tax ………………………………………………………………………………………………………………….. 25 CFD NO. 2007-1 (NORTH BEYER PARK #2) …………………………………………………………………………………………………………………………………………………26 One-Time Facilities Special Tax (Annexed Properties) ……………………………………………………………………………………………………………………………26 One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………………………26 Annual Maintenance Special Tax (Annexed Properties) ………………………………………………………………………………………………………………………26 Annual Maintenance Special Tax (Non-Annexed Properties) …………………………………………………………………………………………………………………26 CFD NO. 2007-2 (KIERNAN BUSINESS PARK WEST) ……………………………………………………………………………………………………………………………………27 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………27 Annual Maintenance Special Tax …………………………………………………………………………………………………………………………………………………………27 CFD NO. 2012-1 (KIERNAN BUSINESS PARK SOUTH) ……………………………………………………………………………………………………………………………………28 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………28 Maximum One-Time Facilities Special Tax (Non-Annexed Properties) ……………………………………………………………………………………………………28 Maximum Annual Maintenance Special Tax ………………………………………………………………………………………………………………………………………28 CFD NO. 2016-1 (KIERNAN BUSINESS PARK East #2) ……………………………………………………………………………………………………………………………………29 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………29 Maximum Annual Maintenance Special Tax ………………………………………………………………………………………………………………………………………29 CFD NO. 2016-2 (The Vintage) ……………………………………………………………………………………………………………………………………………………………………30 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………31 Maximum Annual Maintenance Special Tax ………………………………………………………………………………………………………………………………………31 CFD NO. 2021-1 (Woodglen) ………………………………………………………………………………………………………………………………………………………………………32 Maximum One-Time Facilities Special Tax (Annexed Properties) …………………………………………………………………………………………………………32 Maximum Annual Maintenance Special Tax ………………………………………………………………………………………………………………………………………32 LAND DEVELOPMENT ENGINEERING ………………………………………………………………………………………………………………………………………………………………33 ENGINEERING DEVELOPMENT …………………………………………………………………………………………………………………………………………………………………33 ENCROACHMENT PERMIT …………………………………………………………………………………………………………………………………………………………………………33 TRENCH RESTORATION ……………………………………………………………………………………………………………………………………………………………………………34 WATER RELATED ………………………………………………………………………………………………………………………………………………………………………………………36 Water Connection ………………………………………………………………………………………………………………………………………………………………………………36 Water Main Installation ……………………………………………………………………………………………………………………………………………………………………36 Water Meter ………………………………………………………………………………………………………………………………………………………………………………………36 Fire Hydrant Installation ……………………………………………………………………………………………………………………………………………………………………36 Other …………………………………………………………………………………………………………………………………………………………………………………………………37 SEWER RELATED ………………………………………………………………………………………………………………………………………………………………………………………38 Wastewater Capacity Charge ……………………………………………………………………………………………………………………………………………………………38 Other …………………………………………………………………………………………………………………………………………………………………………………………………39 FIRE DEPARTMENT …………………………………………………………………………………………………………………………………………………………………………………………40 LANDSCAPE AND IRRIGATION …………………………………………………………………………………………………………………………………………………………………………41 LANDSCAPE PLAN REVIEW …………………………………………………………………………………………………………………………………………………………………………41 LANDSCAPE AND IRRIGATION INSPECTIONS ………………………………………………………………………………………………………………………………………………41 OTHER DEVELOPMENT RELATED FEES ………………………………………………………………………………………………………………………………………………………………42 STANISLAUS COUNTY PUBLIC FACILITIES FEES (PFF) ……………………………………………………………………………………………………………………………………42 MODESTO CITY SCHOOL FEES ……………………………………………………………………………………………………………………………………………………………………42 Table of Contents (cont'd)
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Description
Effective July 1, 2022
through
June 30, 2023 Per Due at Zoning Actions P-D Zone $6,914.00 Application Time of Application P-D Amendment (Planning Commission approval) $5,573.00 Application Time of Application P-D Amendment (City Council approval) $6,914.00 Application Time of Application Rezone $3,988.00 Application Time of Application Prezone $3,988.00 Application Time of Application
Development Agreement** $5,000.00 Deposit Time of Application Development Agreement Amendment $4,561.00 Application Time of Application Precise Plan/Precise Plan Amendment $6,914.00 Application Time of Application Area Plan $5,573.00 Application Time of Application Annexation $7,342.00 Application Time of Application Operating Agreement $10,000.00 Deposit Time of Application Minor Zoning Actions
Conditional Use Permit with Development $5,573.00 Application Time of Application Conditional Use Permit without Development $2,654.00 Application Time of Application Conditional Use Permit in Single-Family Dwelling⁴ $1,461.00 Application Time of Application Conditional Use Permit, Signs and Cell Facilities $1,951.00 Application Time of Application Variance $2,654.00 Application Time of Application Variance for Single-Family Dwelling⁴ $1,461.00 Application Time of Application Exception $2,654.00 Application Time of Application
Development Plan Review $3,625.00 Application Time of Application Development Plan Review, minor alterations $535.00 Application Time of Application Development Plan Review, minor residential $730.00 Application Time of Application Final Development Plan (Planning Commission approval) $5,573.00 Application Time of Application Final Development Plan (Administrative approval) $3,625.00 Application Time of Application Plot Plan Review (Planning Commission/BZA approval) $535.00 Application Time of Application Minor Plan Revisions $535.00 Application Time of Application Land Division
Tentative Subdivision Map $5,573.00 Application Time of Application Tentative Parcel Map $2,732.00 Application Time of Application Lot Line Adjustment Moved to LDE Application Time of Application General Plan/Specific Plan General Plan Amendment $6,914.00 Application Time of Application Specific Plan Review** $10,000.00 Deposit Time of Application Specific Plan Amendment (City Council approval) $6,914.00 Application Time of Application Specific Plan Amendment (Administrative approval) $3,625.00 Application Time of Application General Plan Maintenance Recovery Fee .55/1,000 valuation $1,000 of Valuation Time of Application Environmental Review
Environmental Impact Report** $10,000.00 Deposit Time of Application Mitigated Negative Declaration** $5,000.00 Deposit Time of Application Negative Declaration $1,198.00 Application Time of Application Initial Study $543.00 Application Time of Application
Notice of Determination Filing Fees5
Initial Study/Finding of Conformance
See County Clerk- Recorder's Office under "Special Fee" Application Prior to Hearing Date Mitigated Negative Declaration
State Department of Fish & Game County Clerk Recorder Fee See County Clerk- Recorder's Office under "Special Fee" Application Prior to Hearing Date Environmental Impact Report
State Department of Fish & Game Fee
State Department of Fish & Game Application Prior to Hearing Date County Clerk Recorder Fee
See County Clerk- Recorder's Office under "Special Fee" Application Prior to Hearing Date Landmark Preservation Mills Act $1,946.00 Application Time of Application Demolish or Designate Landmark $1,952.00 Application Time of Application Alter or Renovate Landmark $1,480.00 Application Time of Application 1 2
3 4
CITY OF MODESTO
Community and Economic Development Department
Planning Division Fee Schedule
(209) 577-5267
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Description
Effective July 1, 2022
through
June 30, 2023 Per Due at Miscellaneous Street/Alley Abandonment $6,914.00 Application Time of Application Street/Alley Closure $6,914.00 Application
Time Extension (Planning Commission/BZA approval) $1,600.00 Application Time of Application Time Extension (Administrative approval) $150.00 Application Time of Application Director Determination (Administrative approval) $150.00 Determination Time of Application Williamson Act Cancellation $3,246.00 Application Time of Application Appeals of Administrative Decisions $797.00 Appeal Time of Application Referral of Plans to Planning Commission/BZA $2,045.00 Referral Time of Application Building Plan Check $108.00 Plan Check Permit Application Address Change $182.00 Application Time of Application
Parking exception $2,654.00 Application Time of Application Zoning Verification Letter $43.00 Letter Time of Request Division Endnotes 1 Prior to adoption of Development Plan Review, projects would have required P-D zoning or CUP 2 Minor site plan or façade modifications, cellular facilities 3 Second-story review, large family daycare 4 Fee subsidized - reduced to cover costs of noticing, holding hearing, and City Attorney Fee 5 All checks for Notice of Determination Filing Fees must be made out to the Stanislaus County Clerk-Recorder. ** Time and Materials Fees: 1. When multiple entitlement applications are filed for the same project and one or more of the applications is a time and materials fee, then the entire project shall be treated as a time and materials project for fee purposes.
2. When deposited funds drop below 50% of the initial deposit amount, then additional funds shall be required to be deposited in an amount to be determined by the Director. This requirement may be waived by the Director if it is determined that additional funds are not needed to complete the entitlements or the entitlements are inactive. 3. Once the project is completed, withdrawn or returned, the applicant shall be returned the balance of any remaining unused funds.
Concurrent Processing:
When two or more entitlement applications related to a single development proposal on the same parcel are submitted simultaneously, the application fees shall be the highest fee plus half of the fees for the remaining applications (exclusive of CEQA processing fees).
Refunds (Non Time and Materials Fees):
1. If an application is withdrawn or returned before it is deemed complete or within two weeks of submittal, whichever occurs first, then the applicant shall be entitled to a full refund. 2. If an application is withdrawn or returned after the initial period described above, but no later than six months after submittal and prior to scheduling for a hearing or an administrative decision, then the applicant shall be refunded half of the application fees submitted.
3. After six months from application submittal, or once an application has been scheduled for a public hearing or administrative decision, whichever occurs first, no refunds shall be given.
Authority to determine fee when none exists: If an application is made for an entitlement where no fee has been established, then the Director shall determine the appropriate fee based on the adopted fees for similar entitlements requiring a similar process or amount of staff time. 5 CITY OF MODESTO
Community and Economic Development Department
Planning Division Fee Schedule
(209) 577-5267
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CITY OF MODESTO
Community and Economic Development Department
Planning Division Fee Schedule
(209) 577-5267
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Commercial Cannabis Permit Item
Pre-Application Screening Fee (Optional) $1,250 Pre-Application Time of Application Application Fee - Retail and Non Retail Cannabis Businesses (background Check, zoning clearance, non-refundable) $6,380 Application Time of Application Annual Commercial Cannabis Permit Fee $18,732 Annual Time of Application 6 #7..
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CITY OF MODESTO
Community and Economic Development Department
Building Safety Division Fee Schedule
(209)577-5232
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at RESIDENTIAL FEES Custom Residential Dwelling including Duplex (includes MPE) Accessory Dwelling Units and small dwellings up to 1,200 sf $2,241.00 Permit Time of Application Dwellings up to 5,000 sf $3,284.00 Permit Time of Application Dwellings 5,000 sf or greater $3,284.00 Deposit Time of Application Residential Dwelling - Tract Homes (includes MPE)
Master Plan Review per Development $2,393.00 Review Time of Application Production Home $2,209.00 Each Time of Application
Residential Additions, Remodels, Minor Improvements and Repairs Additions less than or equal to 500 sf (includes MPE) $1,749.00 Permit Time of Application Additions > 500 sf (includes MPE) $2,349.00 Deposit Time of Application Residential Remodel - No structural review needed (includes MPE) $813.00 Permit Time of Application Improvements: Decks, Patio Enclosures and Covers, Carports, Covered Porch, etc. $459.00 Permit Time of Application Accessory Buildings: 120 to 500 sf (> 500 sf, see Garage) $603.00 Permit Time of Application Garage $880.00 Permit Time of Application
Re-Roofing $322.00 Permit Time of Application
Mobile Home Installation (Park Installation and permanent foundation) $615.00 Permit Time of Application COMMERCIAL FEES New Construction (includes MPE) New Building without Interior Improvements (Shell) $5,324.00 Deposit Time of Application New Building with Interior Improvements $17,007.00 Deposit Time of Application Apartment/Condo $5,342.00 Deposit Time of Application
Hotel/Motel $31,774.00 Deposit Time of Application
Commerical Additions
Up to 3,000 sf (includes MPE) $2,478.00 Permit Time of Application Greater than 3,000 sf (includes MPE) $2,478.00 Deposit Time of Application Tenant Improvement 500 to 3,000 sf (includes MPE) $1,835.00 Permit Time of Application Tenant Improvement > 3,000 sf (includes MPE) $2,234.00 Deposit Time of Application Minor Improvements and Remodels: Decks, Awnings, Single interior partition and demising walls, tenant improvements up to 500 sf $1,228.00 Permit Time of Application Accessory Buildings less than or equal to 500 sf (> 500 sf, see Garage) $603.00 Permit Time of Application Garage (up to 720 sf and no occupancy) $1,189.00 Permit Time of Application Re-Roofing $515.00 Permit Time of Application
Commercial Remodels, Tenant Improvements, Minor Improvements and Repairs 7 #7..
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CITY OF MODESTO
Community and Economic Development Department
Building Safety Division Fee Schedule
(209)577-5232
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at ADA CBC Chapter 11 Accessibility Review $215.00 Hour Permit Issuance Certified Access Specialist Review and Inspection $106.00 Hour Permit Issuance Admin Processing Fee $38.00 Review Permit Issuance Mechanical Plumbing Electrical Mechanical Plumbing Electrical - Minor1
$223.00 Permit Time of Application
Water Heater Replacement $128.00 Permit Time of Application Mechanical Plumbing Electrical - Commercial/Industrial $942.00 Permit Time of Application Electrical Photovoltaic - Residential $307.00 Permit Time of Application Electrical Photovoltaic - Commercial $1,013.00 Deposit Time of Application Miscellaneous Demolition $278.00 Permit Time of Application Signs (All types) $296.00 Permit Time of Application
Swimming Pools (All types) $507.00 Permit Time of Application Vacant Building Registration (NPU) $238.00 Application Time of Application Minimum Fee Permit2 $223.00 Permit Time of Application
Strong Motion Tax - Residential $1.00 Permit Valuation Permit Issuance Inspection $199.00 Hour Prior to Final Reinspection Fee $199.00 Hour Prior to Final Rental House Inspection $100.00 Application Plan Review (Non-Structural) $215.00 Hour Permit Issuance Plan Review (Structural) $235.00 Hour Permit Issuance General Plan Maintenance Recovery $0.55 $1,000 of Valuation Time of Application Green Building Standards Fee
$1 - 25,000 Permit Valuation $1.00 Permit Permit Issuance $25,001 - 50,000 Permit Valuation $2.00 Permit Permit Issuance $50,001 - 75,000 Permit Valuation $3.00 Permit Permit Issuance $75,001 - 100,000 Permit Valuation $4.00 Permit Permit Issuance Every $25,000 or fraction thereof above $100,000 Permit Valuation $1.00 Permit Permit Issuance Strong Motion Tax - Commerical $0.00 Permit Valuation Permit Issuance Division Endnotes may be applied to provide additional service not already covered by the original permit. It is a non-refundable fee and includes, but is not limited advanced mechanical systems, will be assessed at the Mechanical Plumbing Electrical - Commercial/Industrial category. 2 Minimum Fee Permit: This fee was established to provide the Building Safety Division flexibility in assisting citizens, contractors, designers and developers with code compliance prior to issuance of a project permit and still recover the cost associated with this service. It is a non-refundable fee and includes, but is not limited to, one-stop inspection, code consultation, re-inspection fee and small projects that do not fit in the fee schedule. to, Plan Review for revisions of approved plans, unscheduled or out of sequence inspections, after hours inspections, re-inspections, and exceeding the number of inspections typically allotted for each type of permit.
MISCELLANEOUS FEES Accessibility Review
1 Mechanical Plumbing Electrial - Minor: This fee includes, but is not limited to, HVAC replacements and new systems, plumbing repairs and maintenance, electrical circuitry for new lighting and electrical outlets, service changes and similar projects in residential and small commercial applications. Large commercial systems, such as boilers and 3 Per Hour Charges: At the discretion of the Chief Building Official and/or the Community and Economic Development Director, an hourly charge 8 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Capital Facility Fees - City Limits
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Residential
Single-Family $16,740.00 Dwelling Unit Permit Issuance
Multi-Family $11,301.00 Dwelling Unit Permit Issuance
Senior Housing $10,395.00 Dwelling Unit Permit Issuance Non-Residential
Hotel/Motel $4,496.00 Room Permit Issuance
Retail
<50,000 square feet $12,416.00 1,000 sf Permit Issuance 50,000 – 100,000 square feet $10,380.00 1,000 sf Permit Issuance 100,000 – 300,000 square feet $8,833.00 1,000 sf Permit Issuance >300,000 square feet $8,268.00 1,000 sf Permit Issuance Medical Office $15,871.00 1,000 sf Permit Issuance
General Office $8,035.00 1,000 sf Permit Issuance
Hospital $11,301.00 1,000 sf Permit Issuance
Daycare $6,579.00 1,000 sf Permit Issuance
Church $2,007.00 1,000 sf Permit Issuance
Nursing Home $2,579.00 1,000 sf Permit Issuance
Industrial
Manufacturing $3,144.00 1,000 sf Permit Issuance
Warehousing $2,303.00 1,000 sf Permit Issuance
9 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Capital Facility Fees - Sphere of Influence
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Sphere of Influence Residential
Single-Family $10,246.00 Dwelling Unit Permit Issuance
Multi-Family $7,222.00 Dwelling Unit Permit Issuance
Senior Housing $4,798.00 Dwelling Unit Permit Issuance
Sphere of Influence Non-Residential
Hotel/Motel $4,275.00 Room Permit Issuance
Retail
<50,000 square feet $12,192.00 1,000 sf Permit Issuance 50,000 – 100,000 square feet $10,151.00 1,000 sf Permit Issuance 100,000 – 300,000 square feet $8,606.00 1,000 sf Permit Issuance >300,000 square feet $8,041.00 1,000 sf Permit Issuance Medical Office $15,504.00 1,000 sf Permit Issuance
General Office $7,592.00 1,000 sf Permit Issuance
Hospital $10,862.00 1,000 sf Permit Issuance
Daycare $6,127.00 1,000 sf Permit Issuance
Church $1,475.00 1,000 sf Permit Issuance
Nursing Home $2,075.00 1,000 sf Permit Issuance
Industrial
Manufacturing $2,955.00 1,000 sf Permit Issuance
Warehousing $2,111.00 1,000 sf Permit Issuance
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Capital Facility Fees - Downtown Economic Incentive Program (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Residential
Single-Family $9,135.00 Dwelling Unit Permit Issuance
Multi-Family $6,034.00 Dwelling Unit Permit Issuance
Senior Housing $5,805.00 Dwelling Unit Permit Issuance
Non-Residential
Hotel/Motel $542.00 Room Permit Issuance
Retail
<50,000 square feet $983.00 1,000 sf Permit Issuance
50,000 – 100,000 square feet $888.00 1,000 sf Permit Issuance 100,000 – 300,000 square feet $822.00 1,000 sf Permit Issuance >300,000 square feet $794.00 1,000 sf Permit Issuance
Medical Office $1,428.00 1,000 sf Permit Issuance
General Office $1,046.00 1,000 sf Permit Issuance
Hospital $1,172.00 1,000 sf Permit Issuance
Daycare $987.00 1,000 sf Permit Issuance
Church $815.00 1,000 sf Permit Issuance
Nursing Home $834.00 1,000 sf Permit Issuance
Industrial
Manufacturing $435.00 1,000 sf Permit Issuance
Warehousing $404.00 1,000 sf Permit Issuance
Division End Notes 1
Project must include new development within the designated downtown area and include a residential component to the project to qualify.
11 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per
Community Facilities Districts (In General)
Formation of Community Facilities District* $64,500.00 Deposit Annexation into Existing Community Facilities District* $9,500.00 Deposit First page of Recordation document2$14.00 Agreement
Each additional page of recordation document2$3.00 Agreement Fraud Fee2$3.00 Agreement
Deferral Agreements 1 Commercial, Industrial and Multi-Family Deferrals Administrative Fee $250.00 Agreement
Title Report Fee $500.00 Title Report
Release of Lien2$20.00 Release
First page of Recordation document $14.00 Agreement
Each additional page of recordation document2$3.00 Agreement Fraud Fee2$3.00 Agreement
Wastewater Capacity Charge Deferral for Exisitng Single-Family Dwellings Administrative Fee $250.00 Agreement
Title Report Fee $75.00 Title Report
Release of Lien2$20.00 Release
First page of Recordation document2$14.00 Agreement
Each additional page of recordation document $3.00 Agreement Fraud Fee2$3.00 Agreement
Existing Residential Past Paid Unconnected Sewer Charge Deferrals Administrative Fee $250.00 Agreement
Title Report Fee $75.00 Title Report
Release of Lien2$20.00 Release
First page of Recordation document2$14.00 Agreement
Each additional page of recordation document2$3.00 Agreement Fraud Fee2$3.00 Agreement
Division Endnotes
* Time and Materials based fee. 1
Deferred Payment Agreements are an elective deferral of Capital Facilities Fees, Water Connection Fees and/or Wastewater Capacity Fees. Fees listed are charged for the initiation and administration of Deferred Payment Agreements. 2 Charged by the Stanislaus County Clerk Recorder's Office and subject to change. 12 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 1996-1 (Village One)
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at One-Time Facilities Special Tax (Annexed Properties)1 Esta Estates Subdivision $32,754.90 Lot Permit Issuance Lawson’s Twenty Subdivision $21,292.06 Lot Permit Issuance Villagio Subdivision $25,620.22 Lot Permit Issuance One-Time Facilities Special Tax (Non-Annexed Properties)2 Formation Village Residential $97,989.78 Gross Acre Permit Issuance Village Low-Density Residential $65,297.06 Gross Acre Permit Issuance Multi-Family Residential $255,128.76 Gross Acre Permit Issuance Commercial $287,495.24 Gross Acre Permit Issuance Industrial $135,073.20 Gross Acre Permit Issuance Annexation # 2 Village Residential $99,906.38 Gross Acre Permit Issuance Village Low-Density Residential $66,792.38 Gross Acre Permit Issuance Multi-Family Residential $259,053.94 Gross Acre Permit Issuance Commercial $293,326.92 Gross Acre Permit Issuance Industrial $137,360.32 Gross Acre Permit Issuance All Other Annexations Village Residential $96,328.60 Gross Acre Permit Issuance Village Low-Density Residential $64,422.76 Gross Acre Permit Issuance Multi-Family Residential $249,338.68 Gross Acre Permit Issuance Commercial $283,035.26 Gross Acre Permit Issuance Industrial $132,551.00 Gross Acre Permit Issuance Annual Maintenance Tax3 Developed Property Very Low Density Residential $382.10 Lot Annually (Dec/Apr) Village Residential $382.10 Lot Annually (Dec/Apr)
Multi-Family Residential $248.04 Unit Annually (Dec/Apr) Commercial $1,339.98 Gross Acre Annually (Dec/Apr) Industrial $1,339.98 Gross Acre Annually (Dec/Apr)
Undeveloped Property
Very Low Density Residential $191.04 Lot Annually (Dec/Apr) Village Residential $191.04 Lot Annually (Dec/Apr)
Multi-Family Residential $124.08 Unit Annually (Dec/Apr) Commercial $1,339.98 Gross Acre Annually (Dec/Apr) Industrial $1,339.98 Gross Acre Annually (Dec/Apr) Division Endnotes 3 The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services, administrative expenses not covered in the Annual Facilities Special Tax for the fiscal year, and cures delinquencies. 1 The One-Time Facilities Special Tax shall be collected prior to a final building permit inspection being completed or a certificate of occupancy being issued for new construction for any residential or non-residential structure within CFD No. 1996-1 and shall be immediately delinquent if not so paid. 2 The One-Time Facilities Special Tax shall be collected prior to building permit issuance for new construction of any residential or non-residential structure on taxable property within the CFD. 13 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 1997-1 (North Beyer Park) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
One-Time Facilities Special Tax (Annexed Properties) 1 PAID Unit - One-Time Facilities Special Tax (Non-Annexed Properties) 2 Single-Family Detached Residential $184.09 Unit Permit Issuance Multi-Family Residential $118.35 Unit Permit Issuance
Non- Residential $9,342.73 Acre Permit Issuance
Annual Maintenance Tax3 Very Low Density Residential $175.33 Lot Annually (Dec/Apr) Village Residential $113.96 Unit Annually (Dec/Apr)
Non-Residential $890.74 Gross Acre Annually (Dec/Apr)
Division Endnotes 3
The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services, administrative expenses not covered in the Annual Facilities Special Tax for the fiscal year, and cures delinquencies. 1 The One-Time Facilities Special Tax shall be collected prior to a final building permit inspection being completed or a certificate of occupancy being issued for new construction for any residential or non-residential structure within CFD NO. 1997-1 and shall be immediately delinquent if not so paid. 2
The One-Time Facilities Special Tax shall be collected prior to building permit issuance for new construction of any residential or nonresidential structure on taxable property within the CFD. 14 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 1998-2 (Carver/Bangs-Pelandale/Snyder) (209) 577-5211
Description
Effective
January 1, 2022
through
December 31, 2022 Per Due at
One-Time Facilities Special Tax (Annexed Properties) 1
Tax Area A (Carver/Bangs)
Calvary Chapel (APN 078-018-048) $39,169.74 Lot Permit Issuance Calvary Chapel (APN 078-018-047) PAID Lot - Calvary Chapel (APN 078-018-046) PAID Lot - Tax Area B (Pelandale/Snyder) Big Valley Grace Community Church (APN 046-003-006) PAID Lot Permit Issuance Big Valley Grace Community Church (APN 046-003-007) - Big Valley Grace Community Church (APN 046-003-002) PAID Big Valley Grace Community Church (APN 046-003-009) PAID Big Valley Grace Community Church (APN 046-003-012) [Pre-2014 LLA] PAID Big Valley Grace Community Church (APN 046-003-012) PAID Lot - Big Valley Grace Community Church (APN 046-003-013) PAID Lot Permit Issuance Big Valley Grace Community Church (APN 046-003-014) PAID Lot - Happy Bees (APN 078-066-003) $25,256.02 Lot Permit Issuance Dale Road Professional Park (APN 078-066-013) PAID Lot - Dale Road Professional Park (APN 078-066-014) PAID Lot - Dale Road Professional Park (APN 078-066-015) PAID Lot - Dale Road Professional Park (APN 078-066-016) $38,627.17 Lot Permit Issuance One-Time Facilities Special Tax (Non-Annexed Properties) 2 Tax Area A (Carver/Bangs)
APN 078-018-002 $39,169.73 Lot Permit Issuance
APN 078-018-023 $624,530.58 Lot Permit Issuance
APN 078-018-024 $1,271,946.82 Lot Permit Issuance
APN 078-018-014 $994,670.87 Lot Permit Issuance
APN 046-007-015 $721,355.45 Lot Permit Issuance
APN 046-007-016 $797,056.09 Lot Permit Issuance
APN 046-007-018 $385,104.96 Lot Permit Issuance
APN 046-007-019 $849,431.29 Lot Permit Issuance
APN 046-007-020 $365,740.01 Lot Permit Issuance
Tax Area B (Pelandale/Snyder)
APN 078-018-006- Split into Sutter Ridge Subdiv. & 078-066-001 - 078-066-016 $2,206,367.03 Lot Permit Issuance APN 078-018-007 - Split into Bella Tuscany #1 & #2 Subdivisions PAID Lot Permit Issuance APN 078-018-022 - Split into Tuscany Subdivisions #1 & #2 PAID Lot Permit Issuance APN 078-018-028 - Split into Eastport Subdivisions #1 & #2 PAID Lot Permit Issuance APN 078-018-012 - Dominion Subdivision PAID Lot Permit Issuance APN 046-007-017 - Split into Madison Point Subdiv. (PAID) & 046-024-059&060 $1,009,514.75 Lot Permit Issuance APN 046-007-011 - Rose Hollow #3 PAID Lot Permit Issuance APN 046-007-012 - Split into Subdivisions Rose Hollow #1 & #2 PAID Lot Permit Issuance APN 046-007-022 - Kensington #1 PAID Lot Permit Issuance APN 046-007-009 - Kensington #2 PAID Lot Permit Issuance APN 046-007-007 - Split into APNs 046-025-060 - 046-025-065 $864,498.52 Lot Permit Issuance APN 046-007-006 - Chateau Maison PAID Lot Permit Issuance APN 046-007-008 - Covington Pointe PAID Lot Permit Issuance APN 046-003-002 $448,119.73 Lot Permit Issuance
15 #7..
- 76 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 1998-2 (Carver/Bangs-Pelandale/Snyder) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Annual Maintenance Tax3
Tax Area A (Carver/Bangs)
Single-Family Residential $302.47 Unit Annually (Dec/Apr) Multi-Family Residential $2,422.32 Acre Annually (Dec/Apr) Non-Residential $2,422.32 Acre Annually (Dec/Apr)
Tax Area B (Pelandale/Snyder)
Single-Family Residential $235.82 Unit Annually (Dec/Apr) Multi-Family Residential $1,878.90 Acre Annually (Dec/Apr) Non-Residential $1,878.90 Acre Annually (Dec/Apr)
Chateau Provence $39,572.31 Subdivision Annually (Dec/Apr) Division Endnotes 2
The One-Time Facilities Special Tax shall be collected prior to building permit issuance for new construction of any residential or non-residential structure on taxable property within the CFD. 3
Beginning January 1999 and each January thereafter, the maximum Annual Maintenance Special Tax shall be increased by 4% of the amount in effect in the prior year. Each annual adjustment of the maximum Annual Maintenance Special Tax shall become effective on the subsequent July 1. 1 The Facilities Special Tax shall be collected prior to a final building permit inspection being completed or a certificate of occupancy being issued for new construction (whichever occurs first) for any residential or non-residential structure within CFD No. 1998-2 and shall be immediately delinquent if not so paid. 16 #7..
- 77 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2000-2 (Coffee-Claratina) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Annexation One-Time Special Tax1 Arbor Lane 1 Subdivision TBD @ Annexation Lot - Arbor Lane 2 Subdivision TBD @ Annexation Lot - Claratina Estates Unit No. 1 Subdivision TBD @ Annexation Lot - Loretelli Manor Subdivision TBD @ Annexation Lot - Evergreen Subdivision TBD @ Annexation Lot - Effective July 1, 2022
through
June 30, 2023
Annual Maintenance Special Tax2 Properties per Acre $6,559.45 Acre Annually (Dec/Apr) Division Endnotes delinquencies. 1
Tax calculations for new subdivisions/projects will be done at the time the parcel is annexed to the CFD. authorized services, administrative expenses not covered in the Annual Facilities Special Tax for the fiscal year, and cures 2 The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for 17 #7..
- 78 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2002-1 (NorthPointe)
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
One-Time Special Tax
Zone 1 PAID Acre - Annual Maintenance Special Tax1
ZONE 1
Maximum Maintenance Portion $4,993.72 Acre Annually (Dec/Apr) Maximum Sinking Fund Portion (no escalator) $126.00 Acre Annually (Dec/Apr) TOTAL TAX TO BE LEVIED $5,119.72 Acre Annually (Dec/Apr) ZONE 2
Developed Properties
Maximum Maintenance Portion $3,170.56 Acre Annually (Dec/Apr) Maximum Sinking Fund Portion (no escalator) $80.00 Acre Annually (Dec/Apr) TOTAL TAX TO BE LEVIED $3,250.56 Acre Annually (Dec/Apr) Undeveloped Properties
Maximum Maintenance Portion $4,993.72 Acre Annually (Dec/Apr) Maximum Sinking Fund Portion (no escalator) $126.00 Acre Annually (Dec/Apr) TOTAL TAX TO BE LEVIED $5,119.72 Acre Annually (Dec/Apr) Division Endnotes 1 Beginning in January 2002, the maintenance portion of the maximum Annual Special Tax shall be adjusted by applying the greater of (I) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Recorder or another comparable source if the Engineering News Record is discontinued or otherwise not available, or (ii) four percent (4.0%). Each annual adjustment of the maintenance portion of the maximum Annual Special tax shall become effective on July 1. The sinking fund portion of the maximum Annual Special Tax shall not 18 #7..
- 79 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2003-1 (Fairview Village) (209) 577-5211
Description Per Due at One-Time Facilities Special Tax1 Galas Brothers Subdivision Unit # 1 Lot - Galas Brothers Subdivision Unit # 2 Lot - Annual Maintenance Special Tax3 Developed Properties 256,561.78 382 $671.62 Lot Annually (Dec/Apr) Undeveloped Properties 256,561.78 382 $671.62 Lot Annually (Dec/Apr) Annual Facilities Special Tax2 Developed Properties 466,346.70 382 $1,220.00 Lot Annually (Dec/Apr) Undeveloped Properties 466,346.70 382 $1,220.00 Lot Annually (Dec/Apr) Division Endnotes 3 Beginning in January 2005 and each January thereafter, the Maximum Annual Maintenance Special Tax shall be adjusted annually by the greater of (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or comparable source if the Engineering News Record is discontinued or otherwise not available, or (ii) four percent (4%). Each annual adjustment of the Maximumother Annual Maintenance Special Tax shall become effective on the subsequent July 1. 1 The Maximum One-Time Facilities Special Tax shall be collected prior to a building permit being issued for new construction of any residentialor nonresidential structure on Taxable Property within CFD No. 2003-1, and shall be immediately delinquent if not so paid. 2 Beginning in Fiscal Year 2005-06 and each Fiscal Year thereafter, the Maximum Annual Facilities Special Tax shall escalate by 2.0% of the amount in effect in the prior Fiscal Year.
NOTE: Upon issuance of all CFD 2003-1 (Fairview Village) building permits for new construction of any residential or non-residential structure, manually enter $0.00 for the CFD tax.
Effective July 1, 2022
through
June 30, 2023
-
-
19 #7..
- 80 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2004-1 (Village One #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at One-Time Facilities Special Tax (Annexed Properties)1 Oakcrest Subdivision APN 077-033-012 (93 Residential Lots)
3400 Bob's Way APN 077-033-011
(3.05 AC Commerical)
Oakdale Park Subdivision APN 077-033-013
(11 Residential Lots)
Modesto Endoscopy Center APN 077-033-009
(0.93 AC Commercial)
3032 Merle Avenue APN 085-034-083
(existing home, remainder 53-PM-57)
Merle Avenue Residential Lots
APNs 085-034-081, 085-034-082, 085-034 -084 and 085-034-085 Shadow Creek Apartments APN 085-002-034
(4.62 AC Multi-Family)
Shadow Creek Apartments APN 085-002-035
(4.88 AC Multi-Family)
Village Ranch Unit #1 Subdivision
APN 077-008-031 (portion)
(70 Residential Lots)
Village Ranch Unit #2 Subdivision
APN 077-008-031 (portion)
(68 Residential Lots)
Hacienda Del Sol #1 Subdivision
APN 077-008-034 (portion) and APN 077-008-035
(86 Residenital Lots)
Hacienda Del Sol #2 Subdivision
APN 077-008-034 (portion) and APN 077-008-035
(85 Residential Lots)
Lincoln Parks
APN 077-008-034 (portion)
(Zoned Multi-Family- 58 Residential Lots)
Parcel - Parcel Permit Issuance Parcel Permit Issuance Parcel - Parcel - Parcel Permit Issuance Parcel - Parcel - Parcel - Parcel - Parcel - Parcel - Parcel Permit IssuancePAID $204,512.68
Paid
PAID
$9,450.64 PAID
PAID
PAID
PAID
PAID
PAID
PAID
PAID
20 #7..
- 81 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2004-1 (Village One #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at Kodiak Village II Subdivision
APN 077-009-014 and APN 077-009-056
(61 Residential Lots)
Kodiak Village Subdivision APN 077-009-057
(201 Residenital Lots)
Paramont Apartments on Merle APN 085-013-067
(0.57 AC Multi-Family)
Paramont Apartments on Merle APN 085-013-069
(0.57 AC Multi-Family)
3424 Oakdale Road APN 077-033-002
(1.12 AC Commerical)
3837 Merle Avenue APN 085-007-018
(3.06 AC Residential)
Kodiak Village III Subdivision APN 077-009-055
(23 Residential Lots)
Burkshire Estates I Subdivision APN 085-001-061
(48 Residential Lots - formerly Lagos Subdivision)
Parcels 1 and 2 (within Burkshire Estates I Boundary) APN 085-051-003 (Formerly 3007 Esta Avenue)
Falling Leaf Subdivision
APN 085-002-079 (portion)
(257 Residential Lots)
The Trails at Falling Leaf
APN 085-002-079 (portion)
(59 residential lots)
Bhatti Estates Subdivision APN 085-050-001
(12 Residential Lots)
Sylvan Vet Clinic (Parcel 2)
APN 084-002-053 (3500 Roselle Avenue)
(1.86 AC Commercial)
Sylvan Vet Clinic (Parcel 1)
APN 084-002-048 (3520 Roselle Avenue)
(1.00 AC Commercial)
The Plaza Subdivision
APN 077-008-032 and APN 077-008-033
(165 Residential Lots)
Hillglen Roselle Subdivision
APN 085-064-004 previously (APN 085-001-047)
(44 Residential Lots)
Burkshire Estates II Subdivision (1 of 2)
APNs 085-001-017, 085-001-045 and 085-001-046
Parcel Permit Issuance Parcel Permit Issuance Parcel - Parcel - Parcel - Parcel Permit Issuance Parcel Permit Issuance Parcel Permit Issuance Parcel Permit Issuance Parcel Permit Issuance Parcel Permit Issuance Parcel Permit Issuance Parcel - Parcel - Parcel Permit Issuance Parcel - Parcel Permit Issuance
PAID
PAID
PAID
PAID
PAID
$111,226.74 PAID
$9,196.96
$4,594.56 PAID
$9,864.64
$15,408.54
$170,898.08 PAID
PAID
PAID
PAID
21 #7..
- 82 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2004-1 (Village One #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at Cambrooke Estates Subdivision APN 085-018-060 (8 Residential Lots - formerly Ramirez Estates)
Village One Plaza (Parcel 1) APN 085-009-006
(5.84 AC Commercial)
Village One Plaza (Parcel 2) APN 085-009-007
(0.74 AC Commercial)
Village One Plaza (Parcel 3) APN 085-009-008
(1.97 AC Commercial)
Village One Plaza (Parcel 4) APN 085-009-009
(1.59 AC Commercial)
Village One Plaza (Parcel 5)
APN 085-009-010 (portion)
(0.5 AC Commercial)
Village One Town Center - Apartments
APN 085-009-005 (portion)
(1.36 AC Multi-Family - Housing Authority Project)
Village One Town Center - Single Family Homes
APN 085-009-005 (portion)
(35 Residential Lots - Housing Authority Project)
Tarantella Estates Subdivision
APN 085-061-002 (Master APN 085-001-010)
(6 Residential Lots)
Burkshire Estates II Subdivision (2 of 2) APN 085-001-045 (see tax amount above)
Hillglen/Sunrise Subdivision APN 077-009-025
(59 Residential Lots)
Graham Estates Subdivision
APNs 085-033-066, 085-033-067 and 085-033-068
(24 Residential Lots)
Thomas Terrace Subdivision APN 085-003-057
(20 Residential Lots)
Parcel Permit Issuance Parcel - Parcel - Parcel - Parcel - Parcel - Parcel - Parcel Permit Issuance Parcel Permit Issuance Parcel - Parcel Permit Issuance Parcel Permit Issuance Parcel Permit IssuancePAID PAID
PAID
PAID
PAID
PAID
PAID
$18,564.22
$12,602.16
see Burkshire Estates II PAID
PAID
PAID
22 #7..
- 83 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2004-1 (Village One #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at Village Corners (Parcel 1) APN 085-062-001 (0.79 AC Commercial - formerly Pimentel)
Village Corners (Parcel 2) APN 085-062-002
(0.77 AC Commercial - formerly Pimentel)
Village Corners (Parcel 3) APN 085-062-003
(0.75 AC Commercial - formerly Pimentel)
Village Corners (Parcel 4) APN 085-062-004
(0.92 AC Commercial)
Village Ranch Apartments APN 077-008-030
(10.04 AC Multi-Family)
Walgreens Commercial
APNs 085-050-006, 085-050-007, and 085-050-008
(Commercial)
2500 Sylvan Ave 077-046-079 Parcel
(Village Residential)
Hillglen Parks 077-009-058
(62 Residential Parcels)
Icon at the Village 085-007-009
(24 Residential Parcels)
Metro at the Village 085-064-004
(46 Residential Parcels)
One-Time Facilities Special Tax (Non-Annexed Properties)2 Tax Zone #1 (Formation – Annexation No. 5)
Low Density Residential $31,551.02 Net Taxable Acre Permit Issuance Village Residential $71,608.12 Net Taxable Acre Permit Issuance Multi-Family Residential $239,876.98 Net Taxable Acre Permit Issuance Commercial $123,210.20 Net Taxable Acre Permit Issuance Industrial $30,985.78 Net Taxable Acre Permit Issuance
-
Parcel - Parcel - Parcel - Parcel - Parcel - Parcel - Parcel - Parcel Permit Issuance Parcel Permit Issuance PAID
PAID
PAID
PAID
$6,633.42
$20,817.08
PAID
PAID
PAID
PAID
23 #7..
- 84 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2004-1 (Village One #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at Tax Zone # 2 (Annexation No. 6 Forward) Low Density Residential $23,498.52 Net Taxable Acre Permit Issuance Village Residential $53,331.44 Net Taxable Acre Permit Issuance Multi-Family Residential $178,654.10 Net Taxable Acre Permit Issuance Commercial $91,763.80 Net Taxable Acre Permit Issuance Industrial $23,077.20 Net Taxable Acre Permit Issuance Annual Maintenance Special Tax3 Very Low Density Residential $1,241.52 Net Taxable Acre Annually (Dec/Apr) Village Residential $2,915.76 Net Taxable Acre Annually (Dec/Apr) Multi-Family Residential $9,506.46 Net Taxable Acre Annually (Dec/Apr) Commercial $2,175.58 Net Taxable Acre Annually (Dec/Apr) Industrial $2,175.58 Net Taxable Acre Annually (Dec/Apr) Annual Facilities Special Tax4
Low Density Residential $5,023.14 Net Taxable Acre Annually (Dec/Apr) Village Residential $9,147.92 Net Taxable Acre Annually (Dec/Apr) Multi-Family Residential $10,314.79 Net Taxable Acre Annually (Dec/Apr) Commercial $5,098.84 Net Taxable Acre Annually (Dec/Apr) Industrial $3,642.02 Net Taxable Acre Annually (Dec/Apr) Division Endnotes 4 The Annual Facilities Special Tax is levied and collected at the same time as property taxes until all bonds have been repaid and all facilities have been funded. 1 The Maximum One-Time Facilities Special Tax shall be collected prior to a building permit being issued for new construction of any residential or non- residential structure on Taxable Property within CFD No. 2004-1, and shall be immediately delinquent if not so paid. 2 The One-Time Facilities Special Tax shall be collected prior to building permit issuance for new construction of any residential or non-residential structure on taxable property within the CFD. 3 The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services, administrative expenses not covered in the Annual Facilities Special Tax for the fiscal year, and cures delinquencies. 24 #7..
- 85 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2005-1 (Hetch Hetchy) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Maximum One-Time Facilities Special Tax (Annexed Properties)1 Shelter Cove Community Church (APN 082-005-003)* $3,891,260.30 Net Taxable Acre - Maximum Annual Maintenance Special Tax1 Shelter Cove Community Church (APN 082-005-003)* $225,027.34 Net Taxable Acre - Maximum Annual Facilities Special Tax1 Shelter Cove Community Church (APN 082-005-003)* $250,707.63 Net Taxable Acre - Division Endnotes 1
Tax calculations for new subdivisions/projects will be done at the time the parcel is annexed to the CFD. * Per the development agreement between the City of Modesto and the Shelter Cove Community Church recorded on April 5, 2005 : "City agrees that it shall not levy any tax against Shelter Cove for construction or maintenance of the CFD Facilities until such time as any subsequent development in the CFD triggers the levy of the CFD tax." 25 #7..
- 86 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2007-1 (North Beyer Park #2) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
One-Time Facilities Special Tax (Annexed Properties)1 APN 082-005-031 (Rose Villas) Revised October 2010 $392,059.64 Parcel Permit Issuance APN 082-025-002 (Parcel 2 of Parcel Map 55-PM-12) Revised October 2010 $211,051.74 Parcel Permit Issuance APN 082-005-031/082-025-002 (Rose Villas One Phase 1)
(0 of 57 indiviudal parcels paid = $0 of $270,213.63)
$6,662.76 Parcel Permit Issuance
APN 082-005-031/082-025-002 (Rose Villas One Phase 2+) $272,549.16 Parcel Permit Issuance One-Time Facilities Special Tax (Non-Annexed Properties)1 APN 082-014-041 $146,363.64 Parcel Permit Issuance APN 082-016-042 $250,295.24 Parcel Permit Issuance
Annual Maintenance Special Tax (Annexed Properties)2 APN 082-005-031 (Rose Villas) $70,204.24 Parcel Annually (Dec/Apr) APN 082-025-002 (Parcel 2 of Parcel Map 55-PM-12) $37,792.04 Parcel Annually (Dec/Apr) Annual Maintenance Special Tax (Non-Annexed Properties)2 APN 082-014-041 $24,231.36 Parcel Annually (Dec/Apr) APN 082-016-042 $41,437.80 Parcel Annually (Dec/Apr)
Division Endnotes 2
The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services, administrative expenses not covered in the Annual Facilities Special Tax for the fiscal year, and cures delinquencies. 1 The One-Time Facilities Special Tax shall be collected prior to a building permit being issued for new construction of any residential or non-residential structure within CFD No. 2007-1 and shall be immediately delinquent if not so paid. 26 #7..
- 87 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2007-2 (Kiernan Business Park West) (209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Maximum One-Time Facilities Special Tax (Annexed Properties)1 APN 078-013-006 N/A APN 078-013-018 N/A
APN 078-013-037 N/A
APN 078-013-041 N/A
APN 078-013-042 N/A
APN 078-013-035 $0.00 Lot - APN 078-069-010 $96,286.62 Lot Permit Issuance APN 078-069-011 $283,773.70 Lot Permit Issuance
APN 078-069-012 $9,110.98 Lot Permit Issuance
APN 078-069-001 $48,365.72 Lot Permit Issuance
APN 078-069-002 $24,683.34 Lot Permit Issuance
APN 078-069-003 $20,942.90 Lot Permit Issuance
APN 078-069-004 $42,135.14 Lot Permit Issuance
APN 078-069-005 $15,209.14 Lot Permit Issuance
APN 078-069-0203
$13,962.02 Lot Permit Issuance
APN 078-069-0174 PAID Lot Permit Issuance
APN 078-069-008 PAID Lot Permit Issuance
APN 078-069-0195
$31,666.78 Lot Permit Issuance
Annual Maintenance Special Tax2 APN 078-013-006 N/A
APN 078-013-018 N/A
APN 078-013-037 N/A
APN 078-013-041 N/A
APN 078-013-042 N/A
APN 078-013-035 $187,936.33 Lot Annually (Dec/Apr)
APN 078-069-010 $4,160.82 Lot Annually (Dec/Apr)
APN 078-069-011 $12,262.61 Lot Annually (Dec/Apr)
APN 078-069-012 $394.35 Lot Annually (Dec/Apr)
APN 078-069-001 $9,630.21 Lot Annually (Dec/Apr)
APN 078-069-002 $4,914.39 Lot Annually (Dec/Apr)
APN 078-069-003 $4,169.78 Lot Annually (Dec/Apr)
APN 078-069-004 $8,389.21 Lot Annually (Dec/Apr)
APN 078-069-005 $3,028.06 Lot Annually (Dec/Apr)
APN 078-069-0203
$2,730.21 Lot Annually (Dec/Apr)
APN 078-069-0174
$7,148.19 Lot Annually (Dec/Apr)
APN 078-069-008 $4,616.55 Lot Annually (Dec/Apr)
APN 078-069-0195
$12,062.59 Lot Annually (Dec/Apr)
Division Endnotes
GCG 2/16/22 LLA "B" 4
formerly 078-069-007 (2.17 acres) new map and acreage on (56-PM-33) dated 9/4/18 5 formerly 078-069-009 (1.95 acres) new map and acreage on (56-PM-33) dated 9/4/18/formerly 078-069-016 subdivided in 2021 per GCG 2/16/22 LLA "A"
1 The One-Time Facilities Special Tax shall be collected prior to a final building permit being issued for new construction of any structure on Taxable Property within CFD No. 2007-2 and shall be immediately delinquent if not so paid. 2 Beginning in January 2008 and each January thereafter, the Maximum Annual Maintenance Special Tax assigned to each parcel shall be adjusted by the greater of (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or (ii) four percent (4%). Each annual adjustment of the Maximum Annual Maintenance Special Tax shall become effective on the subsequent July 1. 3 formerly 078-069-006 (.56 acres) new map and acreage on (56-PM-33) dated 9/4/18/formerly 078-069-018 subdivided in 2021 per 27 #7..
- 88 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2012-1 (Kiernan Business Park South) (209) 577-5211
Description
Net Taxable
Acreage
Effective
January 1, 2022
through
December 31, 2023 Per Due at
Maximum One-Time Facilities Special Tax (Annexed Properties)1 APN 078-018-051(2) 8.31 $2,186,968.78 Lot Permit APN 078-018-052(2) 8.30 $2,908,036.88 Lot Permit
APN 078-018-027 14.29 $4,761,353.16 Lot Permit
APN 078-018-036 2.62 $0.00 Lot Permit
Maximum One-Time Facilities Special Tax (Non-Annexed Properties)1 APN 078-018-031(4) 14.00 $4,900,136.16 Lot Permit APN 078-018-035(4) 9.96 $3,612,954.24 Lot Permit
Description
Net Taxable
Acreage
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Maximum Annual Maintenance Special Tax3 % of Total Acres 57.48 APN 078-018-051(2) 14.46% 8.31 $15,683.90 Developed Lot Annually APN 078-018-052(2) 14.44% 8.30 $18,994.20 Developed Lot Annually APN 078-018-027 24.86% 14.29 $32,623.42 Developed Lot Annually APN 078-018-031 24.36% 14.00 $31,961.34 Developed Lot Annually APN 078-018-035 17.33% 9.96 $22,738.20 Developed Lot Annually Retail 0.00% $0.00 Developed Lot Annually
Hotel 0.00% $0.00 Developed Lot Annually
APN 078-018-036 4.56% 2.62 $5,981.32 Developed Lot Annually Division Endnotes 1 The One-Time Facilities Special Tax shall be collected prior to a final building permit being issued for new construction of any structure on Taxable Property within CFD No. 2012- 1 and shall be immediately delinquent if not so paid. The tax is adjusted annually per SF ENR or 4% (whichever is greater). Beginning in January 2013 and each January thereafter, the Maximum One-Time Facilities Special Tax shall be adjusted annually by the greater of: (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available; or (ii) four percent (4%). Each annual adjustment shall become effective on January 1 of the calendar year for which the annual adjustment was made. 2 At the time of CFD Formation, APN 078-018-021 was anticipated to be subdivided into two separate parcels based on a preliminary parcel map submitted to the City. The new APNs are 078-018-051 (8.31 net taxable acres) and 078-018-052 (8.3 net taxable acres) per GCG 10/19/21 Reallocated based on Book 56 of Parcel Maps, at Page 81 on 9/11/12, which does not include the drainage basin anticipated at CFD Formation and shown in Attachment 2 of the RMA. 4 These parcels are not obligated to pay the Maximum One-Time Facilities Special Tax until such time oas they annex to the CFD and a Building Permit is issued for construction on the parcels. 3 The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services and administrative expenses and cures delinquencies. The tax is adjusted annually per SF ENR or 4% (whichever is greater). The annual adjustment shall become effective on July 1 of the calendar year in which the adjustment was made.
28 #7..
- 89 -
CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2016-1 (Kiernan Business Park East #2) (209) 577-5211
Description Net Taxable Acreage
Effective July 1, 2022
through
June 30, 2023 Per Due at Maximum One Time Facilities Special Tax1 % of Total Acres 19.08
79.77% 15.22 $ 188,557.30 Acre Permit Issuance 20.23% 3.86 - Acre Permit Issuance Tax Zone 1 Maximum Annual Maintenance Special Tax2 % of Total Acres 19.08
79.77% 15.22 $ 4,036.50 Acre Annually (Dec/Apr) 20.23% 3.86 Acre Annually (Dec/Apr) Division Endnotes 2 The Annual Maintenance Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services and administrative expenses and cures delinquencies. The tax is adjusted annually per SF ENR or 4% (whichever is greater). The annual adjustment shall become effective on January 1 of the calendar year in which the adjustment was made. 1 The One-Time Facilities Special Tax shall be collected prior to a final building permit being issued for new construction of any structure on a parcel of Taxable Property within CFD No. 2016-1 and shall be immediately delinquent if not so paid. The tax is adjusted annually per SF ENR or 4% (whichever is greater).
Beginning in January 2016 and each January thereafter, the Maximum One-Time Facilities Special Tax shall be adjusted annually by the greater of: (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available; or (ii) four percent (4%). Each annual adjustment shall become effective on January 1 of the calendar year for which the annual adjustment was made. 29 #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2016-2 (The Vintage)
(209) 577-5211
Description
Number of
Lots/Acres
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Maximum Special Tax1
Tax Area A
Developed Property 154 $798.60 Lot Annually (Dec/Apr)
Undeveloped Property 0 $6,339.34 Acre Annually (Dec/Apr) Tax Area B
Developed Property 73 $421.16 Lot Annually (Dec/Apr)
Undeveloped Property 0 $4,658.44 Acre Annually (Dec/Apr) Tax Area C
Developed Property 0 $408.80 Lot Annually (Dec/Apr)
Undeveloped Property 9.14 $0.00 Acre Annually (Dec/Apr) All Tax Areas
Taxable Public Property TBD Annually (Dec/Apr)
Division Endnotes 1 The Annual Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services and administrative expenses and cures delinquencies. The tax is adjusted annually per SF ENR or 4% (whichever is greater). The annual adjustment shall become effective on July 1 of the calendar year in which the adjustment was made. #7..
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CITY OF MODESTO
Community and Economic Development Department
Infrastructure Financing Programs
Community Facilities District No. 2016-2 (The Vintage)
(209) 577-5211
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Developed Property
Maximum One-Time Special Tax1
Single Family Residential Property $1,080.98 Lot Annually (Dec/Apr) Other Property $11,693.16 Acre Annually (Dec/Apr)
Maximum Annual Maintenance Special Tax1
Single Family Residential Property $980.52 Lot Annually (Dec/Apr) Other Property $10,606.72 Acre Annually (Dec/Apr)
Division Endnotes 1 The Annual Special Tax is levied and collected at the same time as property taxes. It is a perpetual fee that pays for authorized services and administrative expenses and cures delinquencies. The tax is adjusted annually per SF ENR or 4% (whichever is greater). The annual adjustment shall become effective on July 1 of the calendar year in which the adjustment was made.
31 #7..
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CITYOFMODESTO
CommunityandEconomicDevelopmentDepartment
InfrastructureFinancingPrograms
CommunityFacilitiesDistrictNo.2021-1(Woodglen)
(209)577-5211
Description
Effective
July1,2022
through
June30,2023 Per Dueat
DevelopedProperty
MaximumOne-TimeSpecialTax1
SingleFamilyResidentialProperty $1,080.98 Lot Annually(Dec/Apr) OtherProperty $11,693.16 Acre Annually(Dec/Apr)
MaximumAnnualMaintenanceSpecialTax1
SingleFamilyResidentialProperty $980.52 Lot Annually(Dec/Apr) OtherProperty $10,606.72 Acre Annually(Dec/Apr)
DivisionEndnotes 1TheAnnualSpecialTaxisleviedandcollectedatthesametimeaspropertytaxes.Itisaperpetualfeethatpaysforauthorizedservicesandadministrative expensesandcuresdelinquencies.ThetaxisadjustedannuallyperSFENRor4%(whicheverisgreater).TheannualadjustmentshallbecomeeffectiveonJuly1of thecalendaryearinwhichtheadjustmentwasmade.
32 #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Engineering Development
Reversion to Acreage Check $1,056.00 Each Time of Application Final Parcel Map Check3
$1,900.00 Each Time of Application
Final Subdivision Map Check3
First 10 Lots $3,049.00 Each Time of Application
Each Additional Lot $25.00 Each Time of Application
Improvement Plan Check**
Cost Estimate - up to $25,000 $2,000.00 Deposit Time of Application Cost Estimate - $25,001 - $100,000 $4,000.00 Deposit Time of Application Cost Estimate - $100,001 - $250,000 $6,750.00 Deposit Time of Application Cost Estimate - $250,001 - $500,000 $11,350.00 Deposit Time of Application Cost Estimate - over $500,001 $20,550.00 Deposit Time of Application Property Owner’s Association Document Check $412.00 Each Time of Application Certificate of Correction $353.00 Each Time of Application Easment/Summary Abandonment3
$2,626.00 Each Time of Application
Monument Deposit (refundable) $423.00 Monument Permit Issuance Monument Preservation
Legal Description Check1
$305.00 Each Permit Issuance
Reciprocal Access Agreement Preparation $925.00 Each Permit Issuance Print Fees – Bonds (18” x 26”) Each Permit Issuance
Water Availability Analysis** $1,000.00 Deposit Time of Application Water and Wastewater Capacity Analysis** $1,021.00 Deposit Time of Application Reimbursement Agreements $2,170.00 Each Permit Issuance Will-Serve Letter2
$539.00 Each Time of Application
Outside Service Agreement $235.00 Each Time of Application GIS Subdivision Mapping Fee $334.00 Each Time of Application Microfilm Fee $1.00 Page Permit Issuance
As-Built Process Fee $199.00 Each Time of Application
PUE and PE Dedication3
$539.00 Each Time of Application
Lot Line Adjustment3
$1,900.00 Each Time of Application
Encroachment Permit4,8,9 Curb and Curb Cuts – Drive Approach (100 l.f. max.)5 $258.00 Lot Permit Issuance
Curb and Curb Cuts – Drive Approach (100 l.f.) – Staking6 $5.00 l.f. Permit Issuance
Curb and Curb Cuts – Drive Approach (100 l.f.) – Paving6,7 $8.00 l.f. Permit Issuance 33 32
#7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Sidewalk (< 100 l.f.) 5 $258.00 Lot Permit Issuance
Sewer Service from Lot to Main9,10 $94.00 Each Permit Issuance Sewer Main (50 l.f.)9,10,11 $94.00 Each Permit Issuance Sewer Main (50 l.f.) – Staking6
$1.00 l.f. Permit Issuance
Sewer Main (50 l.f.) – Paving6,7 $8.00 l.f. Permit Issuance Storm Drain (through curb) $199.00 Each Permit Issuance Utilities – Major Construction9,10,12 $94.00 Each Permit Issuance Utilities – Major Construction – Paving6,7 $8.00 l.f. Permit Issuance Utilities – Service and Repair9,12 $305.00 Each Permit Issuance Utilities – Service and Repair – Paving6,7 $8.00 l.f. Permit Issuance Utilities - MID, Service and Repair $211.00 Each Permit Issuance Temporary Street/Right-of-Way Closures $341.00 Day Permit Issuance Street Lights9
$621.00 Each Permit Issuance
Miscellaneous Improvements10,13 $94.00 Each Permit Issuance Rough Grading Permit - 0-3 Acres $742.00 Each Permit Issuance Rough Grading Permit - 3.1-5 Acres $1,092.00 Each Permit Issuance Rough Grading Permit - 5.1-10 Acres $1,485.00 Each Permit Issuance Rough Grading Permit - 10+ Acres $2,227.00 Each Permit Issuance Monitoring/Extraction Well - Application Fee $128.00 Each Permit Issuance Monitoring/Extraction Well - Inspection Fee $107.00 Each Permit Issuance Application Pre-Inspection $111.00 Each Permit Issuance Lane Closure Traffic Control Plan Review $70.00 Each Permit Issuance Detour Traffic Control Plan Review $141.00 Each Permit Issuance Outdoor Dining Permits
Application Fee (Downtown Area Exempt) $200.00 Application Time of Application Barrier Removal Deposit (fixed barrier only) $250.00 Application Time of Application Annual Renewal Fee $100.00 Permit July 1st
PCI Between 100 and 7016- Trench Depth over 4 feet Permit Issuance PCI Between 100 and 7016 - Trench Depth 4 feet or less Permit Issuance PCI Between 69 and 2617 - Trench Depth over 4 feet Permit Issuance PCI Between 69 and 2617 - Trench Depth 4 feet or less Permit Issuance PCI Between 25 and 0 Permit Issuance
Trench Restoration
34 Permits are required for all work done in all public right-of-way, including public utility easements. #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division Fee Schedule
(209) 571-5569
Division Endnotes
Division Endnotes
* Inflationary Adjustment of 1.30% applies to Development User Fees only. ● AT&T ● MID
● PG&E 17 $1.25 per sf of Trench Influence Area
NOTE: The following companies have executed Pavement Maintenance Agreements with the City of Modesto and are NOT subject to the Trench Restoration Fee:
6 Where no fee is shown, the work is to be performed by others as needed. 8 Costs shall be paid for emergency or other work performed by City for public health and safety in addition to the following minimum charges:
a. Cleanup or dust control $370.00 per street 13 Improvements not otherwise listed such as water line extensions, irrigation lines, irrigation line replacements, storm drain lines, etc. 16 $2.50 per sf of Trench Influence Area 10 Inspection to be charged on a Time and Materials basis. 11 Applicant shall pay an additional $3.75/lf for small laterals designed and drawn by the City. 12 Utility relocation required for City projects is not subject to a charge. 15 To be calculated by the Public Works Director and other pertinent staff in each instance, based on the actual cost of doing the work, including overhead. ** Time and Materials based fee. 1
Land Surveyor portion of charge will be on a Time and Materials basis because this effort varies significantly. 2 Significant additional connection fees apply. 7
Chargeable only when paving is done by City. Developer/Owner shall repave all trenches, unless otherwise approved by the City Engineer. c. Temporary Barricades $142.00 each
9 A trench restoration fee of $2.50/sf is charged in addition. 3 Does not include Land Surveyor review cost. Land Surveyor time will be charged on a Time and Materials basis. 4 Additional fees charged if City employees perform paving or staking services. 5 For lots greater than 100' frontage, each 100' or part therof is considered to be one "lot" (distance to be measured to nearest 100 feet). b. Temporary Paving $233.00 per street 14 Unpermitted Street Work will be assessed a "double fee" penalty. 35 #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division
Water Related Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023
Water Connection
5/8” Service1$2,202.00
1” Service $3,671.00
1 ½” Service $7,341.00
2” Service $11,746.00
3” Service $25,695.00
4” Service $46,250.00
6” Service $95,437.00
8” Service $176,191.00
10” Service $278,970.00
12” Service $367,065.00
Water Service Installation2
1” Service $1,108.00
1 ½” Service $1,754.00
2” Service $1,772.00
4” Service $2,937.00
6” Service $3,009.00
8” Service $3,717.00
10” Service or Larger At Cost
Water Main Installation - Residential, Commercial or Industrial 3$28.00 Water Meter2
1” Meter/New Service – Pedestrian Lid $275.00
1” Meter/New Service – Traffic Lid $314.00
1” Meter/Retrofit Service – Pedestrian Lid $520.00
1” Meter/Retrofit Service – Traffic Lid $600.00
1 ½” Meter – Pedestrian Lid $484.00
1 ½” Meter – Traffic Lid $545.00
2” Meter – Pedestrian Lid $699.00
2” Meter – Traffic Lid $707.00
4” Meter10 $1,820.00
6” Meter10 $3,684.00
8” Meter10 $4,147.00
10” Meter or Larger10 At Cost
Fire Hydrant Installation
Hydrant Installation $2,960.00
Fire Hydrant Line from Main $34.00
Pavement Replacement - Residential (if needed) 6$500.00 Pavement Replacement - Commercial (if needed)6Time & Materials Deposit to Install Meter on Fire Hydrant for Construction Water9$1,250.00 Fire Service Installation Inspection/Test $90.00
Install 4” Single Check Valve $390.00
Install 6” Single Check Valve $479.00
Install 8” Single Check Valve $688.00
Voluntary Installation of Fire Sprinklers (Apartments) Note – Services used ONLY for fire protection do not require a meter. All other new 36 #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division
Water Related Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023
Fire Main Test5$90.00
Other
Water Connection for Main Extension4$665.00
Pavement - Residential (Local Streets)6$500.00
Pavement - Commercial (Non Local Streets)6 Time and Materials Outside City Limits Agreement7$211.00
Will Serve Letter Fee $484.00
Reimbursement Agreement Preparation8$1,946.00
Division Endnotes 1
Single-family residences qualify for the 5/8” connection fee only under the following conditions:
such a service is accompanied by a report from a licensed professional engineer that certifies that the 5/8” service is adequate to meet the needs of the proposed dwelling. than 4,000 square feet.
property line. This fee is charged at the time the building permit or a separate water permit is issued for the construction of the water line on the property. specific property. Generally, this fee is charged at the time that the building permit is issued for the has already participated in the cost of the water main serving the property. connection from a new subdivision to an existing water main. Generally, this fee is charged at the time charged when a developer requests installation of a hydrant or hydrants. This fee is not charged of a water service. This fee is charged at the time that a building permit or water permit is issued administrative preparation.
administrative preparation. Generally, this fee is charged immediately prior to the acceptance 9 Includes backflow. 10 Includes strainer.
for hydrants necessary to meet minimum spacing requirements. 8 Pays for the time required to prepare a water reimbursement agreement, including review of costs and of the reimbursement agreement by the City Council. This fee is charged as directed by the Engineer. 6 Pays for the removal and replacement of pavement in the street or alley required for the installation for the construction of the water line on the property. This fee can be waived for dirt alleys or where the water line is located in an unimproved road or shoulder. 7 Pays for the time required to prepare an Outside City Limits Agreement, including review of costs and property. This fee applies to the old city area (Zone 1) and in the former Del Este area (Zone 2) where the City has significantly strengthened the infrastructure. This fee may be waived if the property owner 4 Pays for the time required to connect a new water main to an existing “live” main for making the the water permit is issued for the connection to an existing water main. 5 Pays for the time and materials required to install a fire hydrant in the public right-of-way. This fee is 3 Pays for the construction of the specific water main that extends down a public right of way to serve a · Two-story single-family residence on a lot of 4,000 square feet or less, provided the request for · A 5/8” “service” shall not be allowed for single-family dwellings of greater than 2 stories on lots less · Single story, single-family residences on a lot of 4,000 square feet or less. 2 Pays for the time and materials required to install the water service from the city water main to the 37 #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division
Sewer Related Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Wastewater Capacity Charge1 Office Building (FLOW/BOD/TSS) General Office7$1.13 Square Foot Permit Issuance
Medical/Dental Office $2.49 Square Foot Permit Issuance Medical Clinic $4.19 Square Foot Permit Issuance
Dental Clinic $2.04 Square Foot Permit Issuance
Institutional (FLOW/BOD/TSS)
Auditorium $1.36 Seat Permit Issuance
Assembly Hall - Food Prepared Off-Site $2.15 Square Foot Permit Issuance Assembly Hall - Food Prepared On-Site $3.02 Square Foot Permit Issuance Church $17.28 Seat Permit Issuance
Hospital $2,832.57 Bed Permit Issuance
Institutional Residential Care Facility - 7 Beds or More8$1,133.03 Bed Permit Issuance Country Club - Non-Resident Member $226.61 Capita Permit Issuance County Club - Resident Member $1,133.03 Capita Permit Issuance Picnic Park $113.30 Capita Permit Issuance
Pool $113.30 Capita Permit Issuance
Tennis Courts, Outdoor with Toilets and Showers $1,246.33 Capita Permit Issuance Tennis Courts, Indoor with Toilets and Showers $3,285.78 Capita Permit Issuance Schools (FLOW/BOD/TSS)9 K-8 $53.34 Capita Permit Issuance High School/College $106.69 Capita Permit Issuance
Warehouse/Distribution (FLOW/BOD/TSS) $0.34 Square Foot Permit Issuance Retail/Commercial (FLOW/BOD/TSS)10 General Retail/Commercial $0.45 Square Foot Permit Issuance Auto Body Shop/Auto Dealers $1.25 Square Foot Permit Issuance Bakeries $6.20 Square Foot Permit Issuance
Beauty Shop/Day Spa (with wash sinks) $3.06 Square Foot Permit Issuance Bars without Dining $3.97 Square Foot Permit Issuance
Bowling Alley (including dining) $3.48 Square Foot Permit Issuance Cafeteria $4.92 Square Foot Permit Issuance
Car Wash $10.99 Square Foot Permit Issuance
Coffee House – No Food Prep $4.53 Square Foot Permit Issuance Dry Cleaner $0.57 Square Foot Permit Issuance
Dry Goods $0.57 Square Foot Permit Issuance
Delicatessen, Sandwich Shop, Take-N-Bake Pizza $4.30 Square Foot Permit Issuance Donut Shop $8.62 Square Foot Permit Issuance
Gyms, Health Clubs $3.17 Square Foot Permit Issuance
Health Clubs – No Showers, Pool or Spa11 $2.38 Square Foot Permit Issuance Hotels, Motels – Excluding bars and restaurants $1,472.93 Room Permit Issuance Laundry - Industrial $1,211.58 Square Foot Permit Issuance Laundries – Coin Operated $1,372.44 Machine Permit Issuance Laundries, Full Service Dry Cleaner $5.81 Square Foot Permit Issuance Market – Grocery $1.59 Square Foot Permit Issuance
Market – Grocery (with bakery, food prepared on-site or garbage grinder)12 See Footnote Mortuaries $1.53 Square Foot Permit Issuance
Plant Nursery $0.91 Square Foot Permit Issuance
Printers $1.59 Square Foot Permit Issuance
Restaurant – Fast Food and Small Non-Franchise Eliminated Square Foot Permit Issuance Restaurant – Fast Food and Small Non-Franchise with Grease Interceptor $4.81 Square Foot Permit Issuance Restaurant – Full Service Franchise Eliminated Square Foot Permit Issuance Apartments or Mobile Home in Mobile Home Park $1,844.00 Unit Permit Issuance Recreational Vehicle Park $1,359.63 RV Space Permit Issuance Theaters $17.11 Seat Permit Issuance
Veterinary Hospital $2.61 Square Foot Permit Issuance
Shopping Center – Up to 25% Dining $3.99 Square Foot Permit Issuance Shopping Center – Up to 50% Dining $7.62 Square Foot Permit Issuance Shopping Center – Up to 75% Dining $11.80 Square Foot Permit Issuance 38 #7..
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CITY OF MODESTO
Community and Economic Development Department
Land Development Engineering Division
Sewer Related Fee Schedule
(209) 571-5569
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Residential (FLOW/BOS/TSS)
Single-Family or Mobile Home on Lot $2,643.00 Unit Permit Issuance Multi-Family or Additional Unity or Mobile Home on Lot $2,151.00 Unit Permit Issuance Other
Subtrunk Charge2$645.00 Gross Acre Permit Issuance
Reimbursement Agreement Preparation5$1,987.00 Agreement Permit Issuance Outside City Limits Agreement6$215.00 Agreement Permit Issuance Lateral Charge3
$33.00
l.f. of lot frontage
adjacent to sewer
line
Permit Issuance
11 Example: Martial Arts facilities with no showers. 12 Estimated flow coefficient to be weighted average based on proportional square footage dedicated to each use. · Group 4 – 14,01 mg/l or more
5 Pays for the time required to prepare a Sewer Reimbursement Agreement, including review of costs and administrative preparation. Generally, this fee is charged immediately prior to the acceptance of the reimbursement agreement by the City Council. This fee is charged as directed by the Engineer. 4 Pays for the time required to inspect the parcel in order to determine the size of acreage to be used in calculating the Bond Redemption Charge and Subtrunk Fee. This fee is charged when a parcel larger than 20,000 square feet is developing only a portion of the lot. The remaining acreage would be paid for at the time that the future development takes place on the remainder of the parcel. 6
Pays for the time required to prepare an Outside City Limits Agreement, including review of costs and administrative preparation. Generally, this fee is charged prior to the acceptance of the Agreement by the City Council.
· Group 2 – 401 mg/l to 900 mg/l
· Group 3 – 901 mg/l to 1,400 mg/l 7
Banks and title companies are considered General Office. Barbershops, nail salons and tattoo parlors without wash sinks are considered General Office. 10 Commercial Groups Combined BOD + TSS 9 Schools head count is the total of staff and students.
1 Pays towards the construction of the Wastewater Treatment Plant and the sewer trunk system throughout the City. Generally, this fee is charged at the time that the building permit is issued for the construction of the house sewer lateral on the property. 8 The Wastewater Capacity charge is not applied to Residential Care Facilities of 6 or fewer beds.
Division Endnotes
· Group 1 – 400 mg/l or less
2 Pays toward the construction and maintenance of the subtrunk lines. This fee is charged at the time the sewer service is made available to any subdivision, tract, area or lot in the Sewer District. In the case of new subdivisions or parcel maps, this charge shall be paid at the time of filing the final subdivision or parcel map. The Council may establish conditions under which the subtrunk sewer extension charges set forth in Section 5-6.803 may be spread over a period of time. 3 Pays towards the specific sewer lateral that extends down the street or alley serving the specific property. Generally, this fee is charged at the time the building permit is issued for the house sewer line on the property. This fee may be waived if the property owner has participated in the cost of the extension of the lateral down the street or alley. 39 #7..
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CITY OF MODESTO
Community and Economic Development Department
Fire Prevention Fee Schedule
(209) 571-5553
Description
Effective
July 1, 2022
through
June 30, 2023 Due at
Site Plan Review* $165.00 Time of Application
Plan Check, Complete Building* $145.00 Time of Application Plan Check, Shell Building* $70.00 Time of Application
Plan Check, Tenant Improvement* $60.00 Time of Application Plan Check/Inspection, S Occupancies Only1* $2,000.00 Time of Application Plan Check, Fire Alarm System* $70.00 Time of Application Plan Check, Sprinkler System* $70.00 Time of Application Engineered/Pre-Engineered Protection System* $225.00 Time of Application Alternate Materials/Methods Evaluation* $570.00 Time of Application Incomplete or Changed Plans* $152.00 Time of Application Fire Alarm System Test and Inspection* $186.00 Time of Application Fire Sprinkler System Test and Inspection - New Commercial* $523.00 Time of Application Fire Sprinkler System Test and Inspection - Tenant Improvement* Inquire with Fire Time of Application Fire Sprinkler System Test and Inspection - Residential* Inquire with Fire Time of Application Fire Re-Inspection* Inquire with Fire Time of Application Fire Inspection After Hours* Inquire with Fire Time of Application Spray Booth Installation Permit $354.00 Time of Application Underground Tank Installation (First tank)* $351.00 Time of Application Underground Tank Installation (additional tanks)* $22.00 Time of Application Underground Tank Removal (First Tank)* $424.00 Time of Application Underground Tank Removal (additional tanks)* $35.00 Time of Application Underground Tank Abandonment/Fill in Place (First tank)* $345.00 Time of Application Underground Tank Abandonment/Fill in Place (additional tanks)* $35.00 Time of Application Convault Tank Installation (First tank)* $352.00 Time of Application Convault Tank Installation (additional tanks)* $29.00 Time of Application Field Fire (Water) Flow Test* $199.00 Time of Application Hood and Duct System Installation* $346.00 Time of Application Medical Gas System Installation* $367.00 Time of Application On-Site Fire Main Test* $486.00 Time of Application
Re-Inspection (after 2x)* Inquire with Fire Paid up front After hours inspection (first 3 hrs, $74.67/hr after)* Inquire with Fire Paid up front 1 Plan check activities shall be billed at $220/hour, inspections shall be billed at $105/hour * Development User Fees are subject to annual inflationary adjustmeents which may cause variations from above in future years from what is listed above.
Division Endnotes
40 #7..
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CITY OF MODESTO
Community and Economic Development Department
Landscape and Irrigation Fee Schedule
(209) 571-5526
Description
Effective
July 1, 2022
through
June 30, 2023 Per Due at
Landscape Plan Review
Initial Plan Check (Up to 5,000 Square Feet) $287.00 Plan Time of Application Re-Check (Up to 5,000 Square Feet) $209.00 Each Time of Application Initial Plan Check (5,001 – 10,000 Square Feet) $444.00 Plan Time of Application Re-Check (5,001 – 10,000 Square Feet) $209.00 Each Time of Application Initial Plan Check (10,001 – 15,000 Square Feet) $525.00 Plan Time of Application Re-Check (10,001 – 15,000 Square Feet) $287.00 Each Time of Application Initial Plan Check (15,001 – 25,000 Square Feet) $680.00 Plan Time of Application Re-Check (15,001 – 25,000 Square Feet) $367.00 Each Time of Application Initial Plan Check (25,001 – 50,000 Square Feet) $839.00 Plan Time of Application Re-Check (25,001 – 50,000 Square Feet) $444.00 Each Time of Application Initial Plan Check (50,001 Square Feet and over) $1,231.00 Plan Time of Application Re-Check (50,001 Square Feet and over) $525.00 Each Time of Application Landscape and Irrigation Inspections
Initial Inspection (Up to 5,000 Square Feet) $209.00 Inspection Time of Application Re-Inspection (Up to 5,000 Square Feet) $209.00 Inspection Time of Application Initial Inspection (5,001 – 10,000 Square Feet) $250.00 Inspection Time of Application Re-Inspection (5,001 – 10,000Square Feet) $209.00 Inspection Time of Application Initial Inspection (10,001 – 15,000 Square Feet) $367.00 Inspection Time of Application Re-Inspection (10,001 – 15,000 Square Feet) $250.00 Inspection Time of Application Initial Inspection (15,001 – 25,000 Square Feet) $525.00 Inspection Time of Application Re-Inspection (15,001 – 25,000 Square Feet) $287.00 Inspection Time of Application Initial Inspection (25,001 – 50,000 Square Feet) $680.00 Inspection Time of Application Re-Inspection (25,001 – 50,000 Square Feet) $287.00 Inspection Time of Application Initial Inspection (50,001 Square Feet and over) $839.00 Inspection Time of Application Re-Inspection (50,001 Square Feet and over) $367.00 Inspection Time of Application 41 #7..
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CITY OF MODESTO
Other Development Related Fees
Description Amount
Stanislaus County Public Facilities Fees (PFF)
Modesto City School Fees
Contact Cyndi Campbell with Modesto City Schools at (209) 550-3300 ext. 5520 (Multi-Family and Commercial Developments only).
Contact Stanislaus County Building Department at (209) 525-6557. 42 #7..
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 17, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Debt Management Policy – Annual Review
CONTACT: Calogero Maniscalco, Senior Financial Analyst
[email protected], (209) 577-5219
DESCRIPTION:
Consider approving the updates to the City’s Debt Management Policy. (Funding Source: Not Applicable)
STRATEGIC PLAN ELEMENT:
This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.
BACKGROUND:
On August 2, 2006, the City Council adopted Resolution 2006-487 approving a Debt Management Policy (“Policy”) for the City of Modesto. The purpose of this Policy is to organize and formalize debt issuance-related policies and procedures for the City. The primary objectives of the City’s debt and financing-related activities are to maintain cost-effective access to the capital markets through prudent yet flexible policies; moderate debt principal and debt service payments through effective planning and project cash management; achieve the lowest cost of borrowing; and achieve the highest practical credit ratings.
DISCUSSION:
This Policy is to be reviewed and updated annually. Public Financial Management, Inc. (“PFM”), the City’s financial advisor, and Norton Rose Fulbright, the City’s bond counsel, have reviewed and proposed updates and changes to the Debt Management Policy.
A summary of major changes is as follows:
1. Section VIII.D. MAXIMUM ANNUAL DEBT SERVICE (“MADS”), this section was removed to avoid duplication with the Debt Service Coverage section. #8..
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City Council, June 7, 2022
Debt Management Policy – Annual Review
2. Section VIII.I. MAXIMUM REPAYMENT RATIO, this is a new paragraph for this year and places a limit on the maximum repayment amount of an issuance to ensure the City of Modesto doesn’t enter into an excessive commitment.
3. Section XI. METHODS OF ISSUANCE, the opening paragraph in this section is extended to include information previously presented as its own section.
4. Section XI.D. ISSUANCE METHOD ANALYSIS was removed as the information was incorporated into the opening paragraph for Section XI.
5. ADDENDUM: INTEREST RATE SWAP POLICY, the section was updated to clarify that the references to “this policy” mean the Swap Policy and not the larger Debt Policy.
Other changes suggested are minor and are mostly formatting and grammatical in nature.
A copy of the proposed Debt Management Policy is attached (Attachment 2), with revisions indicated/underlined. An additional copy is attached (Attachment 3), with the same revisions accepted and integrated in the body of the text (a “clean” copy of the updated Policy).
Changes to the Debt Management Policy are subject to approval by the City Council at a legally noticed public meeting.
FISCAL IMPACT:
There is no immediate fiscal impact associated with this particular action.
COMMITTEE RECOMMENDATION:
The Finance Committee approved the Debt Management Policy updates at their April 13, 2022 meeting and recommended forwarding to Council for approval.
RECOMMENDED COUNCIL ACTION:
Staff Recommendations:
Resolution approving the updates to the City’s Debt Management Policy.
Approved by:
DeAnna Christensen, Director of Finance
Joseph P. Lopez, City Manager
Attachments:
1. Resolution
2. Debt Management Policy (FY22 With Edits)
3. Debt Management Policy (FY22 Clean Copy)
4. PowerPoint Presentation Presented at Finance Committee #8..
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1 MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX
RESOLUTION APPROVING THE UPDATES TO THE CITY’S DEBT
MANAGEMENT POLICY
WHEREAS, pursuant to the City of Modesto Debt Management Policy, last adopted on April 13, 2021 the City of Modesto is required to periodically review and update its Debt Management Policy to address changes to the primary objectives related to the City’s debt and financing related activities; and WHEREAS, staff has identified the need to update the City’s Debt Management Policy in order to continue to maintain cost-effective access to the capital markets through prudent yet flexible policies; moderate principal and debt service payments through effective planning and project cash management; achieve the lowest cost of borrowing; and achieve the highest practical credit ratings; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto, that it hereby adopts the revised Debt Management Policy.
BE IT FURTHER RESOLVED that City staff is hereby authorized and directed to proceed with any and all actions deemed necessary or advisable, following the adopted policy guidelines pursuant to this Resolution, in connection with the future issuances of the City Debt, for future consideration by this City Council. #8..
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2 The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 7th day of June, 2022 by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:
AYES: Councilmembers:
NOES: Councilmembers:
ABSENT: Councilmembers:
ATTEST: ______________________________
DIANE NAYARES-PEREZ, CMC,
City Clerk
(SEAL)
APPROVED AS TO FORM:
BY:
JOSE M. SANCHEZ, City Attorney
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1 I. INTRODUCTION
The purpose of this Policy is to organize and formalize debt issuance-related policies and procedures for the City of Modesto (the “City”) and to establish a systematic debt policy (the “Debt Policy” or the “Policy”). The debt policies and practices of the City are, in every case, subject to and limited by applicable provisions of state and federal law and prudent debt management principles.
II. DEBT POLICY OBJECTIVE
The primary objectives of the City’s debt and financing related activities are to maintain cost-effective access to the capital markets and other financing venues through prudent yet flexible policies:
Moderate principal and debt service payments through effective planning and projected cash management;
Achieve the lowest cost of borrowing; and
Achieve the highest practical credit ratings.
III. SCOPE AND DELEGATION OF CITY
This Debt Policy shall govern, except as otherwise covered by the City of Modesto Investment Policy and the City of Modesto Interest Rate Swap Policy (copies of which are attached hereto), the issuance and management of all debt funded through the capital markets and private placements, including the selection and management of related financial and advisory services and products, and the investment of bond proceeds.
This Policy shall be reviewed and updated periodically as required. Any changes to the Policy are subject to approval by the City Council at a legally noticed and conducted public meeting. Overall policy direction of this Debt Policy shall be provided by the City Council.
Responsibility for implementation of the Debt Policy, and day-to-day responsibility for structuring, implementing, and managing the City’s debt and finance program, shall lie with the Director of Finance. The City Council’s adoption of the City Annual Budget does not, in and of itself, constitute authorization for debt issuance for any reason. This Debt Policy requires that the City Council specifically authorize each debt financing. Each financing shall be presented to the City Council, subject to City Council agenda review and approval (debt financings cannot be approved on a consent calendar).
CITY OF MODESTO
CITY COUNCIL
POLICY
Latest Revision Date: April 20221
Policy Number: 1.036
SUBJECT: DEBT MANAGEMENT POLICY
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2 While adherence to this Policy is required in applicable circumstances, the City recognizes that changes in the capital markets, agency programs and other unforeseen circumstances may from time to time produce situations that are not covered by the Policy and will require modifications or exceptions to achieve policy goals. In these cases, management flexibility is appropriate, provided specific authorization from the City Council is obtained.
IV. ETHICS AND CONFLICTS OF INTEREST
Officers and employees of the City involved in the debt management programexecution and management of the Debt Policy will not engage in any personal business activities that could conflict with proper and lawful execution and management of the debt management programDebt Policy, or which could impair their ability to make impartial decisions.
V. CAPITAL IMPROVEMENT PROGRAM INTEGRATION
The City’s multi-year Capital Improvement Program (“CIP”), which identifies the projects and the appropriate funding mechanisms to pay for them, shall be used in combination with the CIP Financial and Budget Policies and this Debt Policy to ensure the proper allocation and financing of eligible projects. The CIP and its related policies set priorities and strategies for allocating and tracking funding, while the Debt Policy provides policy direction and limitations for proposed financings. Debt issuance for capital projects shall not be recommended for City Council approval unless such issuance has been incorporated into the Capital Improvement ProgramCIP.
VI. STANDARDS FOR USE OF DEBT FINANCING
The City’s debt management programDebt Policy will promote debt issuance only in those cases where public policy, equity and economic efficiency favor debt over cash (pay-as-you-go) financing.
Long-term debt financing shall not be used to fund operating costs.
A. Credit Quality
Credit quality is an overriding consideration. All City debt management activities for new debt issuances will be conducted in a manner conducive to receiving the highest credit ratings possible consistent with the City’s debt management objectives, and to maintaining or improving the current credit ratings assigned to the City's outstanding debt by the major credit rating agencies.
B. Term of Financing
Debt can be used to provide funding for long-term capital projects. The debt repayment period should relate to the expected useful life for the facilities or equipment being financed, and should, as a general matter, be concurrent with the stream of benefits from these facilities. When the City finances capital projects by issuing bonds, the debt repayment period generally should not exceed the average useful life of the equipment, software and/or facilities being acquired or constructed, but in no case will the financing exceed 120% of the useful life of the project being financed. Inherent in its long-term debt policies, the City recognizes that future taxpayers will benefit from the capital investment and that it is appropriate that they pay a share of the asset cost. #8..
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3 C. Debt Financing Mechanism
The City will evaluate the use of all financial alternatives available, including, but not limited to: long-term debt, short-term debt, commercial paper, tax revenue and grant anticipation notes, private placement and inter-fund borrowing. The City will utilize the most cost advantageous financing alternative available while limiting the City’s risk exposure.
D. Ongoing Debt Administration and Internal Controls
The City shall maintain all debt-related records for as long as the associated debt is outstanding plus a term of three years. At a minimum, this repository will include all official statements, bid documents, ordinances, indentures, records relating to the expenditure of proceeds and the use of the project, records related to the investment of the proceeds of the bonds and the sources of payment, all returns filed with the IRS, trustee reports, etc. for all City debt. To the extent that official transcripts incorporate these documents, possession of a transcript will suffice (transcripts may be hard copy, stored on CD-ROM or other forms of electronic record). The City will collect all available documentation for outstanding debt and will develop a standard procedure for archiving transcripts for any new debt. The City will establish internal controls to ensure compliance with the Debt Policy, all debt covenants and any applicable requirements of the State and Federal Government Codes.
E. Rebate Policy and System
The City will accurately account for all interest earnings in debt-related funds. These records will be designed to ensure that the City is in compliance with all debt covenants, and with State and Federal laws. The City will maximize the interest earnings on all funds within the investment parameters set forth in each respective indenture, and as permitted by the City Investment Policy, subject to applicable limitations. The City will develop a system of reporting interest earnings that relates to and complies with Internal Revenue Code rebate requirements, yield limits and arbitrage.
F. Minimum Reserve Requirements for Water and Wastewater Funds The Water and Wastewater Funds are to maintain a working capital reserve equal to [not less than] 25% of their operating expenses plus one annual debt service payment on any State Revolving Fund (“SRF”) loans. This reserve is meant to ensure that adequate cash is on hand to meet current obligations of the funds as well as respond to unanticipated demands, such as unplanned repairs or renovations of the systems. This reserve is consistent with reserves established by other utilities for similar purposes.
G. Minimum Debt Service Coverage Ratio for Water and Wastewater Funds The City will seek to maintain debt service coverage on its senior lien Water and Wastewater revenue bonds at a level not less than one and a half times (1.5x) the maximum annual debt service for the aggregate outstanding senior lien bonds of the respective system, including the debt service for theany new issuance, unless a different debt service coverage amount is allowed by existing bond covenants. #8..
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4 VII. DEBT FINANCING
A. Purpose of Debt
When the City determines that the use of debt is appropriate, the following criteria will be utilized to evaluate the type of debt to be issued:
1. New Money Financing
New money issues are financings that generate funding for capital projects, equipment or enterprise software systems. Eligible capital projects for allocation of City funds include the acquisition, construction or major rehabilitation of capital assets.
2. Refunding Financing
Refunding bonds are issued to retire all or a portion of an outstanding bonddebt issue. Refunding issuances can be used to achieve present-value savings on debt service or to restructure the payment schedule, type of debt instrument used, or covenants of existing debt. The City must analyze the refunding issue on a presentvalue basis to identify economic effects before approval, as is further described in Section X. Refinancing Outstanding Debt below.
B. Type of Debt
When the City determines that the use of debt is appropriate, the following criteria will be utilized to evaluate the type of debt to be issued:
1. Long-Term Debt
The City may issue long-term debt when equipment, project, or software costs cannot be financed from current revenues. The proceeds derived from long-term borrowing will not be used to finance current operations or normal/current maintenance. Long-term debt will be structured such that the obligations generally do not exceed the average useful life of that which is being financed or the sunset date of any current, pledged revenues. And at no time will the financing exceed 120% of the expected average useful life of the asset being financed. Current Interest Bonds are bonds that pay interest periodically and principal at maturity. They may be used for both new money and refunding transactions. Bond features may be adjusted to accommodate the market conditions at the time of sale, including changing dollar amounts for principal maturities, offering discount and premium bond pricing, modifying call provisions, utilizing bond insurance, as well as determining whether and how to fund a debt service reserve fund.
Zero Coupon and Capital Appreciation Bonds pay interest only when principal matures. Interest continues to accrue on the unpaid interest, therefore representing a more expensive funding option. In the case of zerocoupon bonds, principal and interest, at one coupon rate, is repaid at maturity.
In the case of Capital Appreciation Bonds, the value of the bond accretes until maturity. These types of bonds should be used only when no other bond structure is available to address a certain structuring problem. If used, these bonds should mature no later than 20 years from issuance and should be callable.
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5 tax purposes to bondholders. The City will consider the issuance of taxable debt when it is necessary for federal tax reasons or if these bonds would lower the overall cost of the financing or help the City achieve refunding savings that could not otherwise be achieved with the issuance of tax-exempt debt.
2. Short-Term Debt
Short-term borrowing may be utilized for the temporary funding of operational cash flow deficits or anticipated revenues, where anticipated revenues are defined as an assured revenue source with the anticipated amount based on conservative estimates, or until the structure of the take-out financing is finalized. The City will determine and utilize the least costly method for short-term borrowing. The City may issue short-term debt when there is a defined repayment source or amortization of principal, subject to the following policies:
Commercial Paper Notes may be issued as an alternative to fixed rate debt, particularly when the timing of funding requirements is uncertain. The City may maintain an ongoing commercial paper program to ensure flexibility and immediate access to capital funding when needed. The retirement of commercial paper is most commonly a result of the issuance of long-term bonds but they may also be retired with available cash. Grant Anticipation Notes (“GAN”) are short-term notes that are repaid with the proceeds of State or Federal grants of any type. The City shall generally issue GANs only when there is no other viable source of funding for the project.
Bond Anticipation Notes (“BAN”) are short-term notes issued prior to the issuance of long-term debt. It is anticipated that BANs will are most commonly be retired, or taken-out, with long -term debt or commercial paper.
BANs will be issued only when there is no better alternative to reduce the overall cost of a financing program.
Tax and Revenue Anticipation Notes (“TRAN”) shall be issued only to address a timing mismatch between operating revenues and operating expenditures orand if the sizing of the issue shall fully conforms to Federal Internal Revenue Code IRS requirements and limitations. Lines of Credit shall be considered as an alternative to other short-term borrowing options. The lines of credit shall be structured to limit concerns as to Internal Revenue Code compliance.
Other short-term debt may also be considered and utilized when appropriate such as a Direct Purchase Loan from a bank or Floating Rate Notes.
3. Variable Rate Debt
To maintain a predictable debt service burden, the City may give preference to debt that carries a fixed interest rate. An alternative to the use of fixed rate debt is floating or variable rate debt. It may be appropriate to issue short-term or long-term variable rate debt to diversify the City’s debt portfolio, reduce interest costs, provide interim funding for capital projects and improve the match of assets to liabilities. Variable rate debt typically has a lower cost of borrowing than fixed rate financing and shorter interest rate reset periods in the range of 1 to 35 days. Under no circumstances will the City issue variable rate debt solely for the purpose of earning arbitrage. The City, however, may consider variable rate debt in certain instances.
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6 A) Variable Rate Debt Capacity. The City will maintain a conservative level of outstanding variable rate debt in consideration of general rating agency guidelines recommending a maximum of a 20% variable rate exposure, in addition to maintaining adequate safeguards against risk and managing the variable revenue stream, both as described below:
(1) Adequate Safeguards Against Risk. Financing structure and budgetary safeguards are in place to prevent adverse impacts from interest rate shifts; such structures could include, but are not limited to, interest rate swaps, interest rate caps and the matching of assets and liabilities. See Section VII. 4. Financial Derivative Products below. See also the, City of Modesto Interest Rate Swap Policy addendum.
(2) Variable Revenue Stream. The revenue stream for repayment is variable, and is anticipated to move in the same direction as market-generated variable interest rates, or the dedication of revenues allows capacity for variability. (3) As a Component to Synthetic Fixed Rate Debt. Variable rate bonds may be used in conjunction with a financial strategy, which results in synthetic fixed rate debt. Prior to using synthetic fixed rate debt, the City shall certify that the expected interest cost is at least 10 basis points (0.10%) lower than traditional fixed rate debt (including any ongoing fees in such calculation) as well as giving due consideration to other risks associated with such a structure that may raise the ultimate costs of a synthetic fixed rate structure. See Section VII. 4. Financial Derivative Products below. See also the, City of Modesto Interest Rate Swap Policy addendum.
4. Financial Derivative Products
Financial Derivative Products will be considered appropriate in the issuance or management of debt only in instances where it has been demonstrated that the derivative product will either provide a hedge that is expected to reduce the risk of fluctuations in expense or revenue, or alternatively where the derivative product is expected to reduce total project cost. The City shall maintain an Interest Rate Swap Policy (see attached) governing the use of derivative products. For derivatives other than interest rate swaps, the City will undertake an analysis of early termination costs and other conditional terms given certain financing and marketing assumptions. Such analysis will document the risks and benefits associated with the use of a particular derivative product. Derivative products will only be utilized with prior approval from the City Council. As noted below, private placements may require compliance with new disclosure requirements (see Section XV. F.
Continuing Disclosure below).
VIII. TERMS AND CONDITIONS OF BONDS
The City shall establish all terms and conditions relating to the issuance of bonds, and will control, manage, and invest all bond proceeds. Unless otherwise authorized by the City, the following shall serve as bond requirements.
A. Term
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7 being financed, and in no event should the final maturity exceed the lesser of thirty (30) years or when the revenue source is projected to sunset.
B. Capitalized Interest
The nature of the City’s revenue stream is such that funds are generally continuously available and the use of capitalized interest should not normally be necessary. However, certain types of financings may require the use of capitalized interest from the issuance date until the City has constructive use/benefit of the financed project. Unless otherwise required, the City will avoid the use of capitalized interest to obviate unnecessarily increasing the bond size. Interest shall not be funded (capitalized) beyond three (3) years or a shorter period when based upon project needs or if further restricted by statute. The City may require that capitalized interest on the initial series of bonds be funded from the proceeds of the bonds. Interest earnings may, at the City's discretion, be applied to extend the term of capitalized interest but in no event beyond 3 years, or less, if restricted by law.
C. Lien Levels
Senior and Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint, typically either cost or capacity, thus allowing for the most beneficial use of the revenue source securing the bond. Projects chosen for priority financing, based on funding availability and proposed timing, will generally be subject tofinanced on the most senior lien of the bond seriesrelevant credit.
D. Maximum Annual Debt Service (“MADS”)
Concerning revenue bonds, the MADS for any given year must not exceed a level at which the pledged net revenues are less than one and a quarter times (1.25x) the total debt service within any year unless allowed by existing bond covenants.
ED. Debt Service Coverage
For any new debt issuance secured by Water or Wastewater revenues, the City will seek to maintain pledged net revenues at a level no less than one and a half times (1.50x) the Mmaximum aAnnual dDebt sService for the aggregate outstanding senior lien bonds, including the debt service for the new issuance, unless a different debt service coverage amount is allowed by existing bond covenants. For other types of debt incurred by the City, the City will determine the appropriate minimum debt service coverage levels based upon the nature of the pledged revenues, rating considerations, and other relevant factors.
FE. Debt Service Structure
Debt issuance shall be planned to achieve relatively rapid repayment of debt while still matching debt service to the useful life of facilities. The City will amortize its debt within each lien to achieve overall level debt service or may utilize more accelerated repayment schedules after giving consideration to bonding capacity constraints. The City shall avoid the use of bullet or balloon maturities except in those instances where these maturities achieve one of the City’s stated goals, such as minimizing annual debt service or leveling annual existing debt service, among others.
GF. Call Provisions
In general, the City’s securities will include a call feature, which is no later than ten (10) years from the date of delivery of the bonds. The City will avoid the sale of non-callable Commented [SH3]: Do we need this section in addition to the Debt Service Coverage section following?
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8 bonds absent careful evaluation by the City with respect to the value of the call option. If the City were to issue taxable bonds, the City will carefully consider the financial impacts of a 10- year call, a make-whole call, or non-callable debt.
HG. Original Issue Discount & Deep Discount Bonds
An original issue discount and deep discount bonds will be permitted only if the City determines that such discount results in a lower true interest cost on the bonds and that the use of an original issue discount or deep discount bonds will not materially reduce the value of the bonds’ call provisions and adversely affect the project identified by the bond documents.
I. Multiple Series
In instances where multiple series of bonds are to be issued, the City shall make a final determination as to which allocations are of the highest priority.
H. Maximum Repayment Ratio
The maximum repayment ratio, wheredefined as total future debt service payments are divided by the principal amount of the bonds issued, shall be no more than within three to one (3:1) for each series of bonds. and for each authorization.
IX. CREDIT ENHANCEMENTS
The City will consider the use of credit enhancement on a case-by-case basis, evaluating the economic benefit versus cost for each case. Only when a clearly demonstrable savings can be shown shall enhancement be considered. The City will consider each of the following enhancements as alternatives by evaluating the cost and benefit of such enhancement. As noted below, the use of credit enhancements may result in additional continuing disclosure requirements described below (see Section XV. F. Continuing Disclosure below).
A. Bond Insurance
The City may purchase bond insurance when such purchase is deemed prudent and advantageous. The predominant determination shall be based on such insurance being less costly than the present value of the difference in the interest on insured bonds versus uninsured bonds.
B. Debt Service Reserves
When required, a reserve fund equal to the lesser of 10% of the original principal amount of the bonds, maximum annual debt service, or 125% of average annual debt service, and if permitted, 10% of par value of bonds outstanding, (the “Reserve Requirement”) shall be funded from the proceeds of each series of bonds, subject to federal tax regulations and in accordance with the requirements of credit enhancement providers and/or rating agencies. The City may purchase a reserve equivalent (e.g., a reserve fund surety policy) when such purchase is deemed prudent and advantageous. Such equivalents shall be evaluated in comparison to cash funding of reserves on a net present value basis, while also taking into account the creditworthiness of the surety provider and market acceptance.
C. Letters of Credit
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9 by the market (e.g., in the case of variable rate demand bonds) or is deemed prudent and advantageous. Only those financial institutions with long-term ratings greater than or equal to that of the City, and minimum short-term ratings of P-1, A-1, F1, by Moody’s Investor Services, Standard & Poor’s and Fitch, respectively, may participate in City letter of credit agreements unless there are no other practicable options for the City.
X. REFINANCING OUTSTANDING DEBT
The City shall have the responsibility to analyze outstanding bond issues for refunding opportunities that may be presented by underwriting and/or municipal advisory firms. The City will consider the following issues when analyzing possible refunding opportunities:
A. Debt Service Savings
The City has established a minimum net present value savings threshold goal of 3% of the refunded bond principal, unless there are other compelling reasons for defeasance.
The present value savings will be net of all costs related to the refinancing. [Consider adding something in here about, iIf the debt to be defeasedrefinanced is not currently callable (i.e., in the case of forward delivery refundings, or advance refundings, etc.), also considering athe City will make a comparison to the projected savings if theit could City achieve if it instead waited to do auntil the debt becomes eligible for a current refunding]. The decision to defease debt that is not currently callable or to take savings on an upfront or deferred basis must be explicitly approved by the City Council.
B. Restructuring
The City will refund debt when in its best interest to do so. Refundings will include restructuring to meet unanticipated revenue expectations, terminate swaps, achieve cost savings, mitigate irregular debt service payments, release reserve funds or remove unduly restrictive bond covenants.
C. Term of Refunding Issues
The City will refund bonds within the term of the originally issued debt. However, the City may consider maturity extension, when necessary to achieve a desired outcome, provided that such extension is legally permissible. The City may also consider shortening the term of the originally issued debt to realize greater savings. The remaining useful life of the financed facility and the concept of intergenerational equity should guide this decision.
D. Escrow Structuring
The City shall utilize the least costly permitted securities available in structuring refunding escrows. The City will examine the viability of an economic versus legal defeasance on a net present value basis. Generally, the City should look to purchase State and Local Government Series (“SLGS”) securities from the federal treasury when structuring refunding escrows. The City may review the purchase of Open Market Securities (“OMS”) to fund a refunding escrow. In such a case, a certificate from a thirdparty agent, who is not a broker-dealer, is required stating that the securities were procured through an arms-length, competitive bid process (in the case of OMS), that such securities were more cost effective than SLGS, and that the price paid for the securities was reasonable within Federal guidelines. Under no circumstances shall an underwriter, agent, municipal advisor or financial advisor sell escrow securities to the City from its Formatted: Indent: Left: 0", Right: 0", Line spacing:
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10 own account.
E. Arbitrage
The City shall take all necessary steps to optimize refunding escrows and to avoid negative arbitrage. Any resulting positive arbitrage will be rebated as necessary according to Federal guidelines.
XI. METHODS OF ISSUANCE
The City will determine, on a case-by-case basis, whether to sell its bonds competitively or through negotiation. The City shall evaluate the comparative costs of each method of issuance on a net present value basis, using the City’s investment rate as the appropriate measure of the discount rate. It should be noted, however, that cost may be only one of a number of factors considered in determining the most advantageous method of sale.
A. Competitive Sale
In a competitive sale, the City’s bonds shall be awarded to the bidder providing the lowest true interest cost as long as the bid adheres to the requirements set forth in the official notice of sale. Conditions under which a competitive sale would be preferred are as follows:
Bond prices are stable and/or demand is strong.
Market timing and interest rate sensitivity are not critical to the pricing. There are no complex explanations required during marketing regarding issuer’s projects, media coverage, political structure, political support, and funding or credit quality.
The bond type and structure are conventional.
Bond insurance is not needed, is included or pre-qualified (available). Significant transaction size, generally larger than $10 million. The City (or the issuing City enterprise) has strong credit ratings. The City (or the issuing City enterprise) is well known to investors.
B. Negotiated Sale
The City recognizes that some securities are best sold through negotiation. Conditions under which a negotiated sale would be preferred are as follows:
Interest rates are volatile.
Demand is weak or supply of competing bonds is high.
Market timing is important, such as for refundings.
The City (or the issuing City enterprise) has lower or weakening credit rating. The issuing City enterprise is not well known to investors. Sale and marketing of the bonds will require complex explanations about the issuer’s projects, media coverage, political structure, political support, funding, or credit quality.
The bond type and/or structural features are non-standard, such as for a forward delivery bond sale, issuance of taxable or variable rate bonds, or where there is the use of derivative products.
Bond insurance is not available or not offered.
Early structuring, investor outreach and other market participation by underwriters are desired.
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11 The par amount for the transaction is small (generally under $10 million) or significantly larger than normal (generally over $100 million). Demand for the bonds by retail investors is expected to be high. Participation from Disadvantaged Business Enterprise (“DBE”) firms is required or desired.
C. Private Placement
From time to time the City may elect to privately place its debt. Such placement shall be considered if this method is demonstrated to result in a cost savings to the City or other benefits relative to other methods of debt issuance. As noted below, private placements may require compliance with disclosure requirements (see Section XV. F. Continuing Disclosure below).
D. Issuance Method Analysis
The City shall evaluate the comparative costs of each method of issuance on a net present value basis, using the City’s investment rate as the appropriate measure of the discount rate. It should be noted, however, that cost may be only one of a number of factors considered in determining the most advantageous method of sale.
ED. Feasibility Analysis
Issuance of revenue bonds may be accompanied by a finding that demonstrates the projected revenue stream’s ability to meet future debt service payments.
XII. MARKET RELATIONSHIPS
A. Rating Agencies and Investors
The Director of Finance shall be responsible for maintaining the City’s relationships with Moody’s Investors Service, Standard & Poor’s, Fitch and any other major rating agency.
The City may, from time- to- time, choose to seek ratings from only one or two of these agencies as circumstances dictate. In addition to general communication, the Director of Finance shall meet with credit analysts prior to each rated competitive or negotiated sale and/or offer conference calls with agency analysts in connection with the planned sale as needed.
B. Other Jurisdictions/Conduit Financing
From time to time, the City may issue bonds on behalf of other public entities. While the City will make every effort to facilitate the desires of these entities, the Director of Finance will ensure that the highest quality financings are done and that the City is insulated from all manageable risks. The City may issue bonds through another issuing entity such as a Joint Powers Authority (“JPA”). The City may issue debt in this manner if it would result in the least costly method to issue debt (e.g. reduced costs of issuance).
The City will evaluate the timing of such issuance.
C. Fees
When appropriate, the City will charge an administrative fee equal to direct costs to reimburse its administrative costs incurred in debt issuance and ongoing reporting costs.
XIII. CONSULTANTS
Commented [SH5]: Delete? or incorporate general concept into the lead in under "XI. Method of Issuance" above?
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12 Periodically, the City may create an approved pool of qualified financing team members, such as municipal advisors or underwriters.
A. Selection of Financing Team Members
The Director of Finance will make recommendations to the City Manager for all financing team members, with the City Council providing final approval.
B. Municipal Advisor
The City shall utilize a municipal advisor to assist in its debt issuance and debt administration processes as prudent. The municipal advisor must be registered as a Municipal Advisor with the Securities and Exchange Commission (“SEC”) and Municipal Securities Rulemaking Board (“MSRB”). Selection of the City’s municipal advisor(s) shall be based on, but not limited to, the following criteria:
Prior knowledge and experience with the City.
Experience in providing consulting services to complex issuers. Knowledge and experience in structuring and analyzing complex issues. Experience and reputation of assigned personnel.
Fees and expenses.
Municipal advisory services provided to the City shall include, but shall not be limited to the following:
Evaluation of risks and opportunities associated with debt issuance. Monitoring market conditions and opportunities.
Evaluation of proposals submitted to the City by investment banking firms. Structuring and pricing of debt.
Preparation of request for proposals for other financial services such as trustee and paying agent services, printing, credit facilities, remarketing agent services, etc.
Advice, assistance and preparation for presentations with rating agencies, credit providers and investors.
Assisting in preparation of official statements and other financing documents. Be available for other projects whenever needed.
The City also expects that its municipal advisor will provide the City with objective advice and analysis, maintain the confidentiality of City financial plans, and be free from any conflicts of interest.
C. Bond Counsel
City debt will include a written opinion by legal counsel affirming that the City is authorized to issue the proposed debt, that the City has met all constitutional and statutory requirements necessary for issuance, and a determination of the proposed debt’s federal income tax status. The approving opinion and other documents relating to the issuance of debt will be prepared by counsel with extensive experience in public finance and tax issues. The counsel will be selected by the City Attorney and subject to City Council approval.
The services of bond counsel may include, but are not limited to:
Rendering a legal opinion with respect to authorization and valid issuance of debt #8..
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13 obligations including whether the interest paid on the debt is tax exempt under federal and State of California law;
Preparing all necessary legal documents in connection with authorization, sale, issuance and delivery of bonds and other obligations;
Unless this task is assigned to disclosure counsel, as selected by the City separately from bond counsel, preparing the preliminary and final official statements and commercial paper memoranda;
Participating in discussions with potential investors, insurers and credit rating agencies, if requested;
Providing continuing advice, as requested, on the proper use and administration of bond proceeds under applicable laws and the indenture, particularly arbitrage tracking and rebate requirements;
D. Disclosure Counsel
The City may utilize a separate firm to serve as disclosure counsel as it deems necessary.
If cost effective, bond counsel may also serve as disclosure counsel.
XIV. UNDERWRITER SELECTION
A. Senior Manager Selection
The City shall have the right to select a senior manager for a proposed negotiated sale.
The criteria shall include but not be limited to the following:
The firm’s ability and experience in managing similar and/or complex transactions.
Demonstrated ability to structure debt issues efficiently and effectively. Prior knowledge and experience with the City.
The firm’s willingness to risk capital and demonstration of such. The firm’s ability to reach a wide network of investors. The firm’s ability to sell bonds at the lowest market interest rates. Quality and experience of personnel assigned to the City’s engagement. Financing and marketing plans presented.
B. Co-Manager Selection
Co-managers may be selected on the same basis as the senior manager. In addition to their qualifications, co-managers appointed to specific transactions will be a function of transaction size and the necessity to ensure maximum distribution of the City’s bonds.
C. Selling Groups
The City may establish selling groups in certain transactions. To the extent that selling groups are used, the City may make appointments to selling groups from within the an existing pre-qualified pool of underwriters or from outside the poolthrough another process, as the transaction dictates.
D. Underwriter’s Counsel
In any negotiated sale of City debt in which legal counsel is required to represent the underwriter, the lead underwriter will make the appointment subject to the City’s right to object to any such appointment approval. [Consider changing this to “right to object to any such appointment” instead of approval. If the City is approving underwriter’s Formatted: Normal, Indent: Left: 1.75", No bullets or
numbering
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14 counsel it may require additional disclosure.]
E. Underwriter’s Discount
The City will evaluate the proposed underwriter’s discount against comparable issues in the market. If there are multiple underwriters in the transaction, the City will determine the allocation of fees with respect to the takedown and management fee (if any). The determination of the size and allocation of the management fee will be based upon participation in the structuring phase of the transaction. Generally, the City will not pay for risk in its underwriter’s discount. All fees and allocation of the management fee will be determined prior to the sale date; a cap on management fee, expenses and underwriter’s counsel will be established and communicated to all parties by the City.
The senior manager shall submit an itemized list of expenses charged to members of the underwriting group. Any additional expenses must be substantiated.
F. Evaluation of Financing Team Performance
The City will evaluate each bond sale after its completion to assess the following: costs of issuance including underwriters’ compensation, pricing of the bonds in terms of the overall interest cost and on a maturity-by-maturity basis, and the distribution of bonds and sales credits. Following each sale, the municipal advisor shall provide a post-sale evaluation on the results of the sale to the City Council.
G. Syndicate Policies
For each negotiated transaction, the Director of Finance will prepare review and approve syndicate policies that will describe the designation policies governing the upcoming sale. The Director of Finance shall ensure receipt of each member’s acknowledgement of the syndicate policies for the upcoming sale prior to the sale date.
H. Designation Policies
To encourage the pre-marketing efforts of each member of the underwriting team, orders for the City’s bonds will be net designated, unless otherwise expressly stated. The City shall require the senior manager to:
Equitably allocate bonds to other managers and the selling group. Comply with MSRB regulations governing the priority of orders, compliance with retail order requirements and allocations.
Within 10 working days after the sale date, submit to the Director of Finance a detail of orders, allocations and other relevant information pertaining to the City’s sale.
I. Disclosure by Financing Team Members
All financing team members will be required to provide full and complete disclosure relative to agreements with other financing team members and outside parties. The extent of disclosure may vary depending on the nature of the transaction and for underwriters and municipal advisors shall, at a minimum, comply with applicable SEC and MSRB requirements. For firms acting as the City’s bond counsel, disclosure counsel, or municipal advisor, no agreements shall be permitted which could compromise the firm’s ability to provide independent advice which is solely in the City’s best interests or which could reasonably be perceived as a prohibited conflict of interest. All other conflicts must be disclosed to the City in accordance with applicable regulatory requirement. For legal counsel such conflicts disclosure shall, at a minimum, comply with applicable conflicts #8..
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15 disclosure requirements for attorneys in the state.
XV. POST-ISSUANCE COMPLIANCE
A. General
In conjunction with the issuance of a tax-advantaged obligation, bond counsel issues an opinion that is in part based on the reasonable expectation that the issuer will comply with federal tax law requirements to preserve the tax-advantaged status of the obligation. The issuer agrees to comply with these requirements through representations it makes in the tax compliance certificate. The purpose of this Post-Issuance Compliance section is to establish policies and procedures in connection with the issuance of obligations, so as to (a) maximize the likelihood that the City satisfies all applicable post-issuance requirements of federal income tax law needed to preserve the tax exempt status of bonds, (b) ensure that the City will take any appropriate remedial actions on a timely basis if a future event occurs that could affect the tax-exempt status of bonds, and (c) maximize the likelihood that the City complies with applicable federal securities laws, including any contractual obligations arising thereunder. The City reserves the right to use its discretion as necessary and appropriate to make exceptions or request additional provisions as circumstances warrant. The City also reserves the right to change these policies and procedures from time to time.
Issuers and borrowers are also required to disclose, on a periodic basis, financial information and certain other information that may impact their ability to service their debt. This ongoing reporting requirement is known as continuing disclosure. The requirements of continuing disclosures are directly applicable to underwriters and are set forth in Securities and Exchange Commission (“SEC”) Rule 15c2-12. The issuer makes representations in its official statements and other bond documents regarding its intent to comply as a matter of contract with the requirements of Rule 15c2-12.
B. Designation of Post-Issuance Compliance Officer
The City has established a Disclosure Working Group (“DWG”) consisting of the City’s Manager and Director of Finance. The DWG will establish appropriate written policies and procedures, which this document provides, and periodic training regarding continuing disclosure obligations to effect compliance with the federal securities laws. In connection with each primary offering subject to Rule 15c2-12, as well as annually and periodically when necessary in connection with its continuing disclosure filings required by contractual undertakings delivered in accordance with Rule 15c2-12,. Tthe DWG will notify its dissemination agent and others, as and when appropriate when developments and events affect the City that may give rise to a contractual obligation to provide additional disclosure or that may provide an opportunity for voluntary disclosure.
The Director of Finance, or his or her designee, shall be the Post-Issuance Compliance Officer (the “Compliance Officer”) for the City’s debt issuancesbonds (the “Bonds”). The Compliance Officer, if City staff, may designate such other personnel as may be necessary to assist in determining continuing compliance with all relevant law and regulations applicable to the continued favorable tax treatment of such indebtedness, and to comply with the record-keeping responsibilities outlined herein. At such time as the initial Compliance Officer is replaced or a new Compliance Officer is designated, the departing #8..
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16 Compliance Officer will ensure that such successor is fully briefed as to the status of the City’s outstanding indebtedness and the location of records relating to such indebtedness, and that such successor receives training and consultation(s) with bond or disclosure counsel as to his or her duties as Compliance Officer under this policyDebt Policy.
C. External Advisors
The City shall consult with bond counsel and other legal counsel and advisors, as needed, so long as any Bonds remain outstanding, to identify requirements and to establish procedures necessary or appropriate so that tax-exempt interest on the Bonds will continue to be excludable from gross income for federal income tax purposes. Those requirements and procedures shall include future compliance with applicable private activity bond tests, arbitrage rebate requirements and all other applicable post-issuance requirements of federal tax law throughout (and in some cases beyond) the term of bonds. The Compliance Officer shall conduct periodic reviews, at least annually, or more often as may be necessary, to determine that the City remains in compliance with all laws and regulations, including, without limitation, the matters set forth herein. The Compliance Officer annual review shall include matters that relate to the tax status of the Bonds, continuing compliance with covenants that relate to the tax status of the Bonds, and any new matters or public finance developments that relate to the tax status of the Bonds or continuing compliance with such requirements. The City may consult with bond counsel in conducting its review and may engage expert advisors (each a “Rebate Analyst”) to assist in the calculation of arbitrage rebate payable in respect of the investment of Bond proceeds in the manner more fully set forth in the Tax Certificate.
D. Uses and Investments of Funds and Accounts
Various funds and accounts are established as security for the Bonds. The Compliance Officer shall prepare regular, periodic statements regarding the investments and transactions involving bond proceeds, which shall comprise part of the records required to be kept. The Compliance Officer will also review the disbursement of bond proceeds from Trustee records or City records, as applicable, to ensure that bond proceeds are expended in accordance with their intended purpose. The Compliance Officer shall report to the Finance Director (if the officer is a designee of the Finance Director) and the City Manager any expenditure which violates the provisions of any ballot measure, authorizing resolution, or trust document. If any Debt Service Fund ever contains any balance after the principal payment of the Bonds is made each year, except for a reasonable carryover amount which is less than the greater of the earnings on the Debt Service Fund for the immediately preceding year ending on such principal payment date (a “Bond Year”), or 1/12 of the principal and interest payments on the Bonds for the immediately preceding Bond Year, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan to remediate such condition, if necessary, and to determine an allowable use for such excess moneys and/or to determine if any yield restrictions apply. If any Debt Service Reserve Fund is ever funded (i) in an amount more or less than the required balance but declining in future years as detailed in the Tax Certificate), or (ii) is invested at a yield that is higher than the yield of the Bonds, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan to remediate such condition and/or to determine if any yield restrictions apply. Generally, if the Debt Service Reserve Fund ever contains a higher balance than required (either through the accrual of interest, investment gains, maturity of securities, or reduction in the #8..
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17 Reserve Requirement) then the excess moneys should be dealt with as directed by the documents and approved by bond counsel. If any Construction Fund ever is invested at a yield higher than the yield of the Bonds or if moneys in the Construction Fund are not fully expended by three years after the original delivery date of the Bonds, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan for the investment and application of the remaining unexpended Bond Proceeds, which plan may include the redemption or defeasance of Bonds, and/or to determine if any yield restrictions apply.
E. Rebate Reporting
The use of bond proceeds and their investments must be monitored to ensure compliance with arbitrage restrictions. The City will cause arbitrage rebate calculations to be completed, or cause to be completed by an experienced firm the City has retained for this purpose related to any bond issues, with any positive rebate paid every five years and as otherwise required by applicable provisions of the Internal Revenue Code and regulations.
Therefore, the Director of Finance shall ensure that proceeds and investments are tracked in a manner that facilitates accurate, complete calculation, and timely rebates, if necessary.
F. Continuing Disclosure
Appointment. Unless otherwise provided in any Continuing Disclosure Agreement executed in connection with the Bonds pursuant to SEC Rule 15c2-12 (the “Continuing Disclosure Agreement”), the Compliance Officer shall also be the Dissemination Agent under such Continuing Disclosure Agreement. The Compliance Officer shall be responsible for and take all reasonable steps to ensure compliance with said Continuing Disclosure Agreement and shall monitor the operations of the Issuer for occurrence of any listed event (as set forth therein). For any Bonds for which it is designated to serve in such capacity, sShould the Compliance Officer no longer serve as Dissemination Agent, the City shall select an internal or external Dissemination Agent.
Responsibilities. The Dissemination Agent is responsible for the following (the “Continuing Disclosure Policies”):
Serving as a “point person” for personnel to communicate issues or information that should be or may need to be included in any Continuing Disclosure Agreement;
Identifying the officers and employees of the City who are most likely to first obtain knowledge of the occurrence of events that would require event filings; Monitoring compliance by the City with the Continuing Disclosure Policies, including timely dissemination of the annual report and event filings as described below;
Recommending changes to the Continuing Disclosure Policies to the City as necessary or appropriate;
Following up with others to make sure that assigned tasks have been completed on a timely basis and making sure that the continuing disclosure annual report is filed on a timely basis; and
Maintaining records documenting the City’s compliance with the Continuing Disclosure Policies and the Continuing Disclosure Agreement.
Filing Requirements. The City is required to file an annual report with the MSRB’s Electronic Municipal Market Access (“EMMA”) system each year. Such annual reports #8..
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18 are required to include certain updated financial and operating information and audited financial statements. The Dissemination Agent will establish or cause to be established a calendar reminder of the city’s continuing disclosure obligations on July 1 each year. The City is also required to file notices of certain events with the MSRB’s Electronic Municipal Market Access system. Upon the identification of the occurrence of a material event, the Dissemination Agent shall, in consultation with bond counsel, prepare, or caused to be prepared, a draft of the necessary notice (including compiling any materials or documents to be included with such notice) and shall notify such parties of the date by which such notice is to be filed. If it is not clear if the occurrence of an event constitutes an event thate requires notification, then the Dissemination Agent shall consult with bond counsel to determine whether the City is required to file a notice concerning such event.
For any public debt issues (subject to contractual obligations under SEC Rule 15c2-12) issued on or after February 27, 2019, the City is required to commit to make additional disclosure with respect to private loans or financing leases (not sold through an official statement) or derivatives or credit support agreements (collectively “financial obligations”). The additional events will need to be provided to the City’s Dissemination Agent, for further filing with EMMA, within ten (10) business days of their occurrence:
Incurrence of a financial obligation of the City (and any obligated person, where applicable), if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation the City (and any obligated person, where applicable), any of which affect security holders, if material;
Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City (and any obligated person, where applicable), any of which reflect financial difficulties.
In addition, the Compliance OfficerDissemination Agent will be responsible for providing notice, in a timely manner, of a failure to provide any of the City’s required annual financial information by the date specified in the continuing disclosure undertaking. The inability to make timely filings must be disclosed and is a negative reflection. While there is reliance on timely audit and preparation of the City’s annual report, the Director of Finance will ensure the City’s timely filing of its annual report on EMMA as soon as it is available.
G. Voluntary Disclosure Requirements
In addition to preparing annual reports and event notices, the City may wish to keep investors informed by providing information that is not required to be provided under Rule 15c2-12 or its continuing disclosure undertakings. Examples of such types of information are investments, interim financial information, capital improvement plans, fund balance policies, etc. and financial forecasts. Because providing this information is voluntary, the Compliance Officer will monitor for events which may materially affect the financial condition or operations of the City, so that a determination can be made if the event should be disclosed. The below list is comprised of events and financial disclosure which the MSRB has suggested issuers may wish to voluntarily disclose. Some of these are not applicable to the City’s public debt issues and financial obligations, but the City may wish to consider providing some of these to the City’s Dissemination Agent for further filing with EMMA:
Amendment to continuing disclosure undertaking;
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19 Change in obligated person (i.e., a person guaranteeing or supporting City debt):
Notice to investors pursuant to bond documents;
Certain communications from the Internal Revenue Service; Secondary market purchases;
Capital or other financing plan;
Litigation/enforcement action;
Change of tender agent, remarketing agent, or other on-going party; Change in fiscal year/timing of annual disclosure or accounting standard; Interim/additional financial information/operating data, budget; Investment/debt/financial policy changes;
Information provided to rating agency, credit/liquidity provider or other third party; and
Consultant reports
Also, if the City maintains an Investor Relations website, or routinely posts City information packages, including interim financial information, capital improvement plans, etc. on its website, the City’s Compliance Officer should review and, in some cases, the Compliance Officer should reissue the posted material with an explanatory note (e.g., the interim financial information is presented on a cash, as opposed to accrual basis).
Currently, the City is not required to file interim financial information. In the future, if such filings are required in continuing disclosure undertakings, the City’s Compliance Officer will notify the Dissemination Agent for assistance when these filings become necessary.
H. Coordinating Continuing Disclosure with Primary Disclosure It is expected that the DWG will be responsible for collecting and reviewing information set forth in official statements prepared in connection with new bond offerings. Any Management’s Discussion and Analysis (“MD&A”) from the prior year’s audited financial statements will be reviewed to ensure that the unaudited information which was provided in that portion of the financial statements is updated to include added public debt and material financial obligations. Coordination with the City’s auditors will be essential, as well as careful review of the long-term debt notes in the financial statements and the checking of all bond ratings before each EMMA filing is made. Measures should be taken to assure information publicly available to investors is accurate. Further coordination between the DWG and the City’s website manager is essential before posting any financial information.
I. Website Disclosure
It is expected that the Compliance Officer will be responsible for monitoring website content and reviewing the information set forth on such website. Appropriate disclaimer language on the website will be considered in order to educate the viewer that specific information intended for investors can be found on the City’s EMMA page as well as the investor’s acknowledgement of the limitations of such reliance. Coordination between the DWG and City officials will occur before the release of any public statements about any financial condition of the City.
J. Training for Employees and Issuer Officials
For City officials, compliance with federal securities law should be considered as #8..
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20 important as compliance with local public meetings and records laws. To further this goal, the Compliance Officer shall call a meeting for an annual review or, if necessary, an interim review, of the continuing disclosure policies of the City, which all members of the DWG and additional invited officials and employees are expected to attend. The Compliance Officer shall be responsible for keeping a record of attendance. Furthermore, the members of the DWG and such invited officials and employees are expected to attend training sessions, at least annually, called by the Compliance Officer. Applicable policies and procedures will be updated by the City to reflect required changes on an as-needed basis.
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21 GLOSSARY
Arbitrage- The difference between the interest paid on the tax-exempt securities and the interest earned by investing the security proceeds in higher-yielding taxable securities.
IRS regulations govern arbitrage on the proceeds from issuance of municipal securities.
Balloon Maturity- A later maturity within an issue of bonds that contains a disproportionately large percentage of the principal amount of the original issue.
Bond Allocation Policies- Outline as to how an investor’s order is filled when a maturity in an underwriting syndicate is oversubscribed. The senior managing underwriter and issuer decide how the bonds will be allocated among the syndicate. There are three primary classifications of orders, which form the designation policy. The highest priority is given to Net Designated orders; the next priority is given to Group Net orders and Member orders are given the lowest priority (unless the Member orders are retail orders in which case it would be given the highest priority).
Bullet Maturity- Maturity for which there are no sinking fund payments prior to the stated maturity date.
Call Provisions- The terms of the bond contract giving the issuer the right to redeem all or a portion of an outstanding issue of bonds prior to their stated dates of maturity at a specific price, usually at or above par.
Capitalized Interest- A portion of the proceeds of an issue that is set aside to pay interest on the securities for a specific period of time. Interest is commonly capitalized for the construction period of the project.
Commercial Paper- Very short-term, unsecured promissory notes issued in either registered or bearer form, and usually backed by a line of credit with a bank.
Competitive Sale- A sale of securities by an issuer in which underwriters or syndicates of underwriters submit sealed bids to purchase the securities in contrast to a negotiated sale.
Continuing Disclosure- The principle that accurate and complete information material to the transaction which potential investors would be likely to consider material in making investment decisions with respect to the securities be made available on an ongoing basis.
Credit Enhancement- Credit support purchased by the issuer to raise the credit rating of the issue. The most common credit enhancements consist of bond insurance, direct or standby letters of credit, and lines of credit.
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22 Debt Service Reserve Fund- The fund in which moneys are placed which may be used to pay debt service if pledged revenues are insufficient to satisfy the debt service requirements.
Deep Discount Bonds- Bonds that are priced for sale at a substantial discount from their face or par value.
Derivatives- A financial product whose value is derived from some underlying asset value.
Designation Policies- Concerning a negotiated sale of bonds, the rules regarding how the takedown (sales commission) is allocated among the underwriters for each order put in for the bonds.
Direct Purchase Loan- A source of financing where the loan is purchased by a financial institution instead of being offered to the general public for purchase. The loan can bear interest at a fixed rate or on a variable rate tied to market index (i.e. SOFR or SIFMA).
This form of financing does not require a remarketing agent to set the variable rate. As such, a Direct Purchase Loan can be used to replace traditional forms of variable-rate debt.
Escrow- A fund established to hold moneys pledged and to be used to pay debt service on an outstanding issue.
Expenses- Compensates senior managers for out-of-pocket expenses including:
underwriters counsel, DTC charges, travel, syndicate expenses, dealer fees, overtime expenses, communication expenses, computer time and postage.
Floating Rate Notes (“FRN”)- A note with a variable interest rate sold either in the public market or directly to financial institutions. The adjustments to the interest rate are typically tied to a certain index like SOFR or SIFMA and are made periodically. The rate would continue to reset in the same manner through maturity. The SOFR-based floating rate note market typically does not require bank support and as a result, offers issuers an alternative to traditional floating rate debt.
Grant Anticipation Notes (“GAN”)- Short term notes issued by the government unit, usually for capital projects, which are paid from the proceeds of State or Federal grants of any type.
Letters of Credit- A bank credit facility wherein the bank agrees to lend a specified amount of funds for a limited term.
Management Fee- The fixed percentage of the gross underwriter’s spread which is usually only paid to the managing underwriter for the structuring phase of a transaction.
Members- Underwriters in a syndicate other than the senior underwriter.
Moody’s Median- Key financial, debt, economic and tax base statistics with median values for each statistic presented. Moody’s uses audits for both rated and unrated #8..
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23 agencies to ensure that the medians presented are representative of all agencies.
Negotiated Sale- A method of sale in which the issuer chooses one underwriter to negotiate terms pursuant to which such underwriter will purchase and market the bonds.
Original Issue Discount- The amount by which the original par amount of an issue exceeds its public offering price at the time it is originally offered to an investor.
Pay-As-You-Go- An issuer elects to finance a project with existing cash flow as opposed to issuing debt obligations.
Present Value- The current value of a future cash flow.
Private Placement- The original placement of an issue with one or more investors or financial institutions as opposed to being publicly offered or sold.
Rebate- A requirement imposed by the Tax Reform Act of 1986 whereby the issuer of the bonds must pay the IRS an amount equal to its profit earned from investment of bond proceeds at a yield above the bond yield calculated pursuant to the IRS code together with all income earned on the accumulated profit pending payment.
Tax and Revenue Anticipation Notes (“TRAN”)- Short-term notes issued by a government unit, usually for capital projects, which are paid from the proceeds of sales tax or other revenue sources.
Selling Groups- The group of securities dealers who participate in an offering not as underwriters but rather as those who receive securities less the selling concession from the managing underwriter for distribution at the public offering price.
Syndicate Policies- The contractual obligations placed on the underwriting group relating to distribution, price limitations and market transactions.
Underwriter- A dealer that purchases new issues of municipal securities from the Issuer and resells them to investors.
Underwriter’s Discount- The difference between the price at which the Underwriter buys bonds from the Issuer and the price at which they are reoffered to investors.
Variable Rate Debt- An interest rate on a security which changes at intervals according to an index or a formula or other standard of measurement as stated in the bond contract. #8..
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24 1. City of Modesto Philosophy Regarding Use of Interest Rate Swaps A. Introduction
Interest rate exchange agreements or interest rate swaps (“Swaps”) and related financial instruments and derivatives are may be appropriate interest rate management tools in certain circumstances. Properly used, Swaps can increase the City of Modesto’s (the “City”) financial flexibility and provide opportunities for interest rate savings. This policy (“Swap Policy”) shall be followed in conjunction with the City’s related debt issuance-related policies and procedures (the “Debt Policy”).
Swaps are appropriate to use when they achieve a specific financial objective consistent with the City’s overall Swap Policy and Debt Management policiesPolicy. Swaps may be used, for example, to lock-in a current market fixed rate or create additional variable rate exposure. Swaps may be used to produce interest rate savings or alter the pattern of debt service payments. Swaps may be used to cap, limit or hedge variable rate payments. Options granting the right to commence or cancel an underlying Swap are permitted to the extent the Swap itself is otherwise consistent with this policySwap Policy.
The authorized Swaps contemplated in this policy Swap Policy are intended to reduce the amount or duration of interest rate risk, or produce a lower cost of borrowing when used in combination with the issuance of bonds.
B. Rationales for Utilizing Interest Rate Swaps
The use of Swaps and related financial instruments should balance the City’s primary objectives of reducing the cost of capital, minimizing the City’s exposure to interest rate volatility, and gaining flexibility in structuring and managing its debt portfolio over time with the risks associated with these tools and instruments. Examples of how the City’s debt management objectives can be achieved through the use of Swaps and other financial instruments are described below:
Reduce borrowing costs at the time of issuance
Create synthetic fixed rate debt through a floating-to-fixed Swap. Actively manage interest rate risk
Lock-in current market rates through (forward starting) floating-to-fixed Swap. Balance financial risk
Purchase of an interest rate cap.
Achieve appropriate asset/liability match
Create variable rate exposure through fixed-to-floating Swap.
CITY OF MODESTO
CITY COUNCIL
POLICY
Latest Revision Date: April 20221
ADDENDUM: INTEREST RATE SWAP POLICY
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25 Under no circumstances will Swaps be used for speculative purposes, e.g., to realize trading gains.
2. Authority for Entering iInto Swap Agreements
The purpose of this Swap Policy policy is to integrate the use of Swaps into the City’s overall debt Debtmanagement practicePolicy, and other funds of the City where particular debt strategies, both long-term and short-term, factor into these decisions. Swaps will not be used for speculation. The City Manager, in conjunction with the Director of Finance, shall be responsible for determining if and when it is in the City’s overall best financial interests to enter into a Swap or related financial instruments covered by this policySwap Policy.
The City shall comply with all applicable laws. The City must receive an opinion acceptable to the financial market from a nationally recognized law firm that the swap contract is a legal, valid, and binding obligation of the City and that entering into such a contract complies with applicable provisions of the City Charter and State statutes.
3. Permitted Instruments
The City may utilize financial instruments that (i) lower its interest expense, (ii) manage its financial risk or (iii) improve its financial condition.
The City shall not use financial instruments that (i) create substantial leverage or financial risk, (ii) lack adequate liquidity to terminate at market, (iii) provide insufficient price transparency to allow reasonable valuation on an ongoing basis, or (iv) are primarily speculative in nature.
The use of Swaps and other hedging products should produce a result not otherwise available in the cash market (i.e., lack of advance refunding/non-callable debt), or provide a higher level of net savings compared to conventional financing methods.
The City may expressly utilize the following financial instruments, after identifying the financial objective(s) to be realized and assessing the attendant risks:
Current or forward starting floating-to-fixed rate swaps Designed to reduce a fixed interest rate below that which would otherwise be available through the use of traditional fixed rate debt. Current or forward starting fixed-to-floating rate swaps Designed to create additional variable interest rate exposure. Rate Locks
Cash-settled forward contracts based on indices such as the MMD™ 1 “AAA” scale.
Interest Rate Caps, Floors or Collars
Financial contracts that limit exposure to interest rate volatility. Options on Variable Rate Indices
Indices could include the Securities Industry and Financial Markets Association (“SIFMA”) Index2, Secured Overnight Financing Rate (“SOFR”)3, etc.
1. MMD™ is a trademark of Municipal Market Data, a Thompson Financial company.
2. The SIFMA Index is an index of more than 500 high-grade, tax-exempt, weekly reset VRDO issues.
3. SOFR is a taxable rate which is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, published daily by the Federal Reserve Bank. #8..
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26 Options on Swaps (“Swaptions”)
Methods used to control the commencement or cancellation of interest rate swaps. Basis Swaps
Floating-to-floating rate swaps using different variable-rate indices, such as a swap from the SIFMA Index to a percentage of SOFR.
4. Swap Risk Analysis
The City shall require for each proposed financing an evaluation of all financial products with respect to the unique risks that they bear. A specific determination must be made that the proposed or expected benefits exceed the identified risks by an adequate margin over those available in the traditional cash market. At a minimum, the City shall perform an evaluation of the risks and what steps have been taken to mitigate any risks. The City shall retain a municipal/swap advisor to assist in assessing these risks. Questions that may arise include the following:
Market or Interest Rate Risk
Does the transaction hedge (i.e., decrease or eliminate) or increase interest rate volatility? Tax Risk
How is the transaction or its benefits affected by a future change in federal income tax policy?
Termination Risk
Under what circumstances might the transaction be terminated? At what value? Risk of Uncommitted Funding (Put Risk)
Does the transaction create additional financing dependent upon third- party participation (such as requiring a letter of credit, grant or other anticipation funding, etc.)? Rollover Risk
Is the term of the Swap shorter than the term of the underlying hedged debt or financial instrument? Does the City anticipate entering into another Swap when the first Swap terminates?
Legal Risk
Is the transaction expressly legally authorized?
Counterparty Risk
What is the creditworthiness of the counterparty?
Rating Agency Risk
Is the proposed transaction consistent with the City’s current ratings and ratings objectives? Basis Risk
Is it anticipated that the projected Swap payments the City will receive closely match the debt service payments it will make?
Index Risk
Does the transaction include provisions acceptable to the City regarding any change in indices used to calculate payments or obligations?
Subsequent Business Conditions
Does the transaction or its benefits depend upon the continuation, or realization, of specific industry business conditions (e.g., unusual demand for state-specific variable rate debt)? Operational Risk
Does the City have adequate systems, policies, and practices in place to monitor and manage the transaction over its term?
5. Swap Procurement and Execution
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27 A. Procurement
The City will not have a fixed policy with respect to the procurement of Swaps and other financial instruments authorized by this policySwap Policy. On a product-by-product basis, the City will have the authority to negotiate or competitively bid the procurement of financial instruments that have customized or specific attributes designed on its behalf. The Director of Finance will be responsible for determining the method of procurement for Swaps and related financial instruments. An independentA municipal/swap advisor [if you want to require independence then should define what that means and use consistently] shall be retained to assist the Director of Finance in evaluating the proposed pricing of Swaps or related financial instruments.
B. Swap Execution
The Director of Finance may recommend the use of financial derivative products if they:
1. Provide a specific benefit not otherwise available;
2. Produce greater expected interest rate savings than cash market alternatives;
3. Do not create substantial leverage or financial risk;
4. Result in an improved capital structure or better asset/liability match; and
5. Reasonably pass the Swap Risk Analysis required by Section 4. Swap Risk Analysis of this policySwap Policy.
C. Credit Rating Designations
For purposes of this Swap Policy, references to credit ratings will be based on those ratings issued by Moody’s Investors Service, and/or Standard & Poor’s Corporation, and/or Fitch Ratings. The credit ratings will reflect the designations assigned by each of these rating agencies utilized for comparable credit and will be listed for each rating agency utilized in the order shown in the preceding sentence.
6. Swap Documentation
The City will use standard International Swap and Derivatives Association, Inc. (“ISDA”) Master Agreement, including the Counterparty Schedule to the Master Agreement and a Credit Support Annex (utilizing such versions thereof as the Director of Finance shall determine), as supplemented and amended in accordance with the recommendations of the City’s financial/swap advisor and legal counsel. Each Swap entered into by the City shall include payment, term, security, collateral, default, remedy, termination and other terms, conditions and provisions as the Director of Finance may deem necessary or desirable.
A. Terms and Notional Amount of Swap Agreement
The City shall determine the appropriate term for Swaps on a case-by-case basis. The slope of the swap curve, the marginal change in swap rates from time to time along the swap curve, and the impact that the term of the Swap will have on the City’s overall financial (e.g., interest rate, market value, counterparty, etc.) exposure shall be considered in determining the appropriate term of any Swap agreement. In connection with the issuance or carrying of bonds, the term of the Swap agreement between the City and qualified swap counterparty shall not extend beyond the final maturity date of existing City debt, or in the case of a refunding transaction, beyond the final maturity of the refunding bonds. At no time shall the total net notional amount of all Swaps, excluding any offsetting Swaps exceed the total amount of outstanding applicable bonds. Variable rate debt exposure created through the use of Swaps will be consistent with the limitations set forth Formatted: Font: Bold
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28 in the City’s adopted Debt Management Policy. Terms and conditions of any Swap shall be negotiated by the Director of Finance in the best interests of the City subject to the applicable legal provisions and this Swap Ppolicy. The Swap agreements entered into between the City and each counterparty shall include payment, term, security collateral, default, remedy, termination, and other terms, conditions and provisions as the Director of Finance, in consultation with City legal counsel and its swap advisor, deems necessary or desirable.
Subject to the provisions contained herein, the City’s swap documentation and terms should include the following:
The City will be able to terminate the swap without cause subject to market termination costs.
The swap counterparty will only be able to terminate the swap if the City’s credit ratings fall below a certain pre-determined threshold and/or the City’s failure to perform, as required by the swap contract.
Governing law for Swaps will be New York, but should reflect California authorization provisions.
The specified indebtedness related to credit events in the Master Agreement should be narrowly drafted and refer only to specific debt of the issuing fund. Eligible collateral should be limited to Treasuries, Federal Agencies and any other securities which, in the City’s sole discretion, shall be deemed reasonable and creditworthy.
Collateral thresholds should be set on a sliding scale reflective of credit ratings. Termination value should be set by “market quotation” methodology. Whenever possible use a Credit Support Annex to document swap termination value collateralization procedures.
Ratings downgrade triggers.
7. Policy on Swap Counterparties
The City shall only do business with highly rated counterparties, and will structure swap agreements to protect itself from credit deterioration. All Swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at-market at any time over the term of the agreement.
A. Qualified Swap Counterparties
The City should not have an immutable credit standard. However, the City shall attempt to do business with highly rated counterparties the long-term ratings of which at the date of execution are at least “Aa” or “AA” by one or more Nationally Recognized Statistical Ratings Organizations (NRSRO) and no less than “A2” or “A” by one or more NRSRO. For lower rated counterparties, the City should seek credit enhancement in the form of:
1. Contingent swap counterparty providing support;
2. Collateral;
3. Ratings downgrade triggers; and,
4. Minimum rating threshold of “Baa3/BBB-/BBB-,” below which provisions will allow an assignment or trigger an additional termination event, with the counterparty as the affected party (i.e., the counterparty would pay market- based transaction costs). #8..
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29 In addition, the counterparty must have a demonstrated record of successfully executing swap transactions as well as creating and implementing innovative ideas in the swap market. The City shall be authorized to enter into interest rate swap transactions only with qualified swap counterparties.
8. Limitations on Counterparty Exposure
In order to diversify the City’s counterparty credit risk, and to limit the City’s credit exposure to any one counterparty, limits will be established for each counterparty based upon both the credit rating of the counterparty as well as the relative level of risk associated with each existing and proposed swap transaction. The guidelines shown in the following table provide general termination exposure guidelines with respect to whether the City should enter into an additional transaction with an existing counterparty. The City may make exceptions to the guidelines at any time to the extent that the execution of a swap achieves one or more of the goals outlined in these guidelines or provides other benefits to the City. In general, the maximum net termination exposure to any single counterparty should be set so that it does not exceed a prudent level as measured against the gross revenues, available assets or other financial resources of the City.
For example, if the City has two Swaps with one counterparty, and if the first Swap’s market value is positive $10 million and the second Swap’s market value is negative $20 million, then the City’s total net exposure to the counterparty is negative $10 million.
Such guidelines will also not mandate or otherwise force automatic termination by the City or the counterparty. Maximum net termination exposure is not intended to impose retroactively any terms and conditions on existing transactions. Such provisions will only act as guidelines in making a determination as to whether or not a proposed transaction should be executed given certain levels of existing and projected net termination exposure to a specific counterparty. Collateral posting guidelines are described in the collateral section below. The calculation of net termination exposure per counterparty will take into consideration multiple transactions, some of which may offset the overall exposure to the City.
Under this approach, the City will set limits on individual counterparty exposure based on existing as well as new or proposed transactions. The sum of the current market value and the projected exposure shall constitute the maximum net termination exposure. For outstanding transactions, current exposure will be based on the market value as of a recently completed swap valuation report provided by the City’s swap advisor. Projected exposure shall be calculated based on the swap’s potential termination value taking into account possible adverse changes in interest rates as implied by historical or projected measures of potential rate changes applied over the remaining term of the swap. For purposes of this calculation, the City shall include all existing and projected transactions of an individual counterparty and all transactions will be analyzed in aggregate such that the maximum exposure will be additive.
The exposure thresholds, which will be reviewed periodically by the City to ensure that they remain appropriate, will also be tied to long-term credit ratings of the counterparties and whether or not collateral has been posted as shown in the table below. If a counterparty has more than one rating, the lowest rating will govern for purposes of the calculating the level of exposure. If contingent swap counterparty or swap insurance is used to provide financial support for the primary counterparty, the rating of the support entity shall be used. A summary table is provided below:
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30 Credit Ratings
Maximum
Collateralized Net
Termination Value
Maximum
Uncollateralized
Net Termination Value
Maximum Net
Termination
Exposure
AAA N/A $30.0 million N/A
AA Category $30.0 million $20.0 million $30.0 million
A Category $20.0 million $10.0 million $20.0 million
Below A Category $10.0 million $5.0 million $15.0 million If the exposure limit is exceeded by counterparty, the City shall conduct a review of the exposure limit per counterparty. The City, in consultation with its bond counsel and swap advisor, shall explore remedial strategies to mitigate this exposure.
9. Benefit Expectation
Financial transactions, using Swaps or other derivative products, intended to produce the effect of a synthetic advance refunding, must generate at least 25% greater savings than the benefit threshold then in effect for fixed-rate bonds as determined by the City’s Director of Finance. (See Debt Management Policy Section X.A. Debt Service Savings). The higher savings target reflects the greater complexity and higher risk of derivative financial instruments.
In calculating the prospective savings against the target for implementing a fixed-to-variable swap, the cost of remarketing, in addition to the cost of credit and liquidity fees must be added to the variable rate representing the ten-year average of comparable variable rate securities.
10. Termination Provisions
All swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at market at any time over the term of the agreement, but shall NOT grant this right to the counterparty. In general, exercising the right to terminate an agreement produces a benefit to the City, either through the receipt of a payment from a termination, or if the termination payment is made by the City, in conjunction with a conversion to a more beneficial (desirable) City debt obligation, as determined by the City.
11. Collateral
As part of any swap agreement, the City shall require collateralization or other credit enhancements to secure any or all swap payment obligations. As appropriate, the City, in consultation with its bond counsel and swap advisor, may require collateral or other credit enhancements to be posted by each swap counterparty under the following circumstances:
Each counterparty to the City may be required to post collateral if the highest credit rating of the counterparty or parent falls below the “Aa/AA” category. Additional collateral for further decreases in credit ratings of each counterparty shall be posted by each counterparty in accordance with the provisions contained in the collateral support agreement to each counterparty with the City.
Collateral shall be deposited with a third- party trustee, or as mutually agreed upon between the City and the counterparty.
A list of acceptable securities that may be posted as collateral and the valuation of such Formatted: Font: Bold
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31 collateral will be determined and mutually agreed upon during negotiation of the swap agreement with each swap counterparty.
The market value of the collateral shall be determined on at least a weekly basis. The City shall determine the reasonable threshold limits for the initial deposit and for increments of collateral posting thereafter.
The City shall determine on a case-by-case basis whether other forms of credit enhancement, such as swap insurance, are more beneficial in lieu of the posting of additional collateral.
An evaluation of the performance of the swap relative to the rate on the bonds. A computation of the effective cost of borrowing inclusive of all fees and costs associated with the underlying financing.
12. Conformance with Dodd-Frank
It is the intent of the City to conform this Swap Ppolicy to the requirements relating to legislation and regulations for over-the-counter derivatives transactions under Title VII of the Wall Street Transparency and Accountability Act of 2010, as supplemented and amended from time to time (herein collectively referred to as “Dodd-Frank”). Pursuant to such intent, it is the policy of the City that: (i) each swap advisor engaged or to be engaged by the City will function as the designated qualified investment representative of the City, sometimes referred to as the “Designated QIR”; (ii) each swap advisor agrees to meet and meets the requirements specified in Commodity Futures Trading Commission Regulation 23.450(b)(1) or any successor regulation thereto (herein referred to as the “Representative Regulation”) (iii) each swap advisor provide a written certification to the City to the effect that such swap advisor agrees to meet and meets the requirements specified in the Representative Regulation; and (iv) the City rely on the advice of its swap advisor with respect to transactions authorized pursuant to this Debt Swap Policy and not rely on recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Debt Swap Policy.
13. Monitoring and Reporting
At least once per year normally as part of the City’s Annual Comprehensive Financial Annual Report (“Annual Report”), or as requested by the City Council, the Director of Finance shall prepare information describing the various Swaps and financial arrangements entered into by the City pursuant to this policy Swap Policy that are in effect as of the date of the report’s publication.
The report shall include the following information:
1. A summary of key terms of the agreements, including notional amounts, interest rates, maturity and method of procurement.
2. The mark-to-market value of each agreement.
3. The full name, description, and credit ratings of each counterparty or the applicable guarantor.
4. The amounts that were required to be paid and received and any amounts that were actually paid and received.
5. A listing of any credit enhancement, liquidity facility, or reserves and an accounting of all costs and expenses associated with the credit enhancement, liquidity facility, or reserves.
6. The aggregate mark-to-market value and potential termination value for each swap by counterparty.
7. A discussion of other risks associated with each transaction. #8..
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32 At the end of each fiscal year, the Director of Finance shall provide to the City Council all information required for financial reporting under Government Accounting Standards Board (“GASB”) requirements as well as any other reporting or disclosure requirements. The City shall adhere to California Government Code Section 5922 and applicable GASB guidelines for reporting and disclosure guidelines for derivative products.
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1 I. INTRODUCTION
The purpose of this Policy is to organize and formalize debt issuance-related policies and procedures for the City of Modesto (the “City”) and to establish a systematic debt policy (the “Debt Policy” or the “Policy”). The debt policies and practices of the City are, in every case, subject to and limited by applicable provisions of state and federal law and prudent debt management principles.
II. DEBT POLICY OBJECTIVE
The primary objectives of the City’s debt and financing related activities are to maintain cost-effective access to the capital markets and other financing venues through prudent yet flexible policies:
Moderate principal and debt service payments through effective planning and projected cash management;
Achieve the lowest cost of borrowing; and
Achieve the highest practical credit ratings.
III. SCOPE AND DELEGATION OF CITY
This Debt Policy shall govern, except as otherwise covered by the City of Modesto Investment Policy and the City of Modesto Interest Rate Swap Policy, the issuance and management of all debt funded through the capital markets and private placements, including the selection and management of related financial and advisory services and products, and the investment of bond proceeds.
This Policy shall be reviewed and updated periodically as required. Any changes to the Policy are subject to approval by the City Council at a legally noticed and conducted public meeting. Overall policy direction of this Debt Policy shall be provided by the City Council.
Responsibility for implementation of the Debt Policy, and day-to-day responsibility for structuring, implementing, and managing the City’s debt and finance program, shall lie with the Director of Finance. The City Council’s adoption of the City Annual Budget does not, in and of itself, constitute authorization for debt issuance for any reason. This Debt Policy requires that the City Council specifically authorize each debt financing. Each financing shall be presented to the City Council, subject to City Council agenda review and approval (debt financings cannot be approved on a consent calendar).
CITY OF MODESTO
CITY COUNCIL
POLICY
Latest Revision Date: April 2022
Policy Number: 1.036
SUBJECT: DEBT MANAGEMENT POLICY
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2 While adherence to this Policy is required in applicable circumstances, the City recognizes that changes in the capital markets, agency programs and other unforeseen circumstances may from time to time produce situations that are not covered by the Policy and will require modifications or exceptions to achieve policy goals. In these cases, management flexibility is appropriate, provided specific authorization from the City Council is obtained.
IV. ETHICS AND CONFLICTS OF INTEREST
Officers and employees of the City involved in the execution and management of the Debt Policy will not engage in any personal business activities that could conflict with proper and lawful execution and management of the Debt Policy, or which could impair their ability to make impartial decisions.
V. CAPITAL IMPROVEMENT PROGRAM INTEGRATION
The City’s multi-year Capital Improvement Program (“CIP”), which identifies the projects and the appropriate funding mechanisms to pay for them, shall be used in combination with the CIP Financial and Budget Policies and this Debt Policy to ensure the proper allocation and financing of eligible projects. The CIP and its related policies set priorities and strategies for allocating and tracking funding, while the Debt Policy provides policy direction and limitations for proposed financings. Debt issuance for capital projects shall not be recommended for City Council approval unless such issuance has been incorporated into the CIP.
VI. STANDARDS FOR USE OF DEBT FINANCING
The City’s Debt Policy will promote debt issuance only in those cases where public policy, equity and economic efficiency favor debt over cash (pay-as-you-go) financing. Long-term debt financing shall not be used to fund operating costs.
A. Credit Quality
Credit quality is an overriding consideration. All City debt management activities for new debt issuances will be conducted in a manner conducive to receiving the highest credit ratings possible consistent with the City’s debt management objectives, and to maintaining or improving the current credit ratings assigned to the City's outstanding debt by the major credit rating agencies.
B. Term of Financing
Debt can be used to provide funding for long-term capital projects. The debt repayment period should relate to the expected useful life for the facilities or equipment being financed, and should, as a general matter, be concurrent with the stream of benefits from these facilities. When the City finances capital projects by issuing bonds, the debt repayment period generally should not exceed the average useful life of the equipment, software and/or facilities being acquired or constructed, but in no case will the financing exceed 120% of the useful life of the project being financed. Inherent in its long-term debt policies, the City recognizes that future taxpayers will benefit from the capital investment and that it is appropriate that they pay a share of the asset cost. #8..
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3 C. Debt Financing Mechanism
The City will evaluate the use of all financial alternatives available, including, but not limited to: long-term debt, short-term debt, commercial paper, tax revenue and grant anticipation notes, private placement and inter-fund borrowing. The City will utilize the most cost advantageous financing alternative available while limiting the City’s risk exposure.
D. Ongoing Debt Administration and Internal Controls
The City shall maintain all debt-related records for as long as the associated debt is outstanding plus a term of three years. At a minimum, this repository will include all official statements, bid documents, ordinances, indentures, records relating to the expenditure of proceeds and the use of the project, records related to the investment of the proceeds of the bonds and the sources of payment, all returns filed with the IRS, trustee reports, etc. for all City debt. To the extent that official transcripts incorporate these documents, possession of a transcript will suffice (transcripts may be hard copy, stored on CD-ROM or other forms of electronic record). The City will collect all available documentation for outstanding debt and will develop a standard procedure for archiving transcripts for any new debt. The City will establish internal controls to ensure compliance with the Debt Policy, all debt covenants and any applicable requirements of the State and Federal Government Codes.
E. Rebate Policy and System
The City will accurately account for all interest earnings in debt-related funds. These records will be designed to ensure that the City is in compliance with all debt covenants, and with State and Federal laws. The City will maximize the interest earnings on all funds within the investment parameters set forth in each respective indenture, and as permitted by the City Investment Policy, subject to applicable limitations. The City will develop a system of reporting interest earnings that relates to and complies with Internal Revenue Code rebate requirements, yield limits and arbitrage.
F. Minimum Reserve Requirements for Water and Wastewater Funds The Water and Wastewater Funds are to maintain a working capital reserve equal to not less than 25% of their operating expenses plus one annual debt service payment on any State Revolving Fund (“SRF”) loans. This reserve is meant to ensure that adequate cash is on hand to meet current obligations of the funds as well as respond to unanticipated demands, such as unplanned repairs or renovations of the systems. This reserve is consistent with reserves established by other utilities for similar purposes.
G. Minimum Debt Service Coverage Ratio for Water and Wastewater Funds The City will seek to maintain debt service coverage on its senior lien Water and Wastewater revenue bonds at a level not less than one and a half times (1.5x) the maximum annual debt service for the aggregate outstanding senior lien bonds of the respective system, including the debt service for any new issuance, unless a different debt service coverage amount is allowed by existing bond covenants. #8..
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4 VII. DEBT FINANCING
A. Purpose of Debt
When the City determines that the use of debt is appropriate, the following criteria will be utilized to evaluate the type of debt to be issued:
1. New Money Financing
New money issues are financings that generate funding for capital projects, equipment or enterprise software systems. Eligible capital projects for allocation of City funds include the acquisition, construction or major rehabilitation of capital assets.
2. Refunding Financing
Refunding bonds are issued to retire all or a portion of an outstanding debt issue.
Refunding issuances can be used to achieve present-value savings on debt service or to restructure the payment schedule, type of debt instrument used, or covenants of existing debt. The City must analyze the refunding issue on a present-value basis to identify economic effects before approval, as is further described in Section X.
Refinancing Outstanding Debt below.
B. Type of Debt
When the City determines that the use of debt is appropriate, the following criteria will be utilized to evaluate the type of debt to be issued:
1. Long-Term Debt
The City may issue long-term debt when equipment, project, or software costs cannot be financed from current revenues. The proceeds derived from long-term borrowing will not be used to finance current operations or normal/current maintenance. Long-term debt will be structured such that the obligations generally do not exceed the average useful life of that which is being financed or the sunset date of any current, pledged revenues. And at no time will the financing exceed 120% of the expected average useful life of the asset being financed. Current Interest Bonds are bonds that pay interest periodically and principal at maturity. They may be used for both new money and refunding transactions. Bond features may be adjusted to accommodate the market conditions at the time of sale, including changing dollar amounts for principal maturities, offering discount and premium bond pricing, modifying call provisions, utilizing bond insurance, as well as determining whether and how to fund a debt service reserve fund.
Zero Coupon and Capital Appreciation Bonds pay interest only when principal matures. Interest continues to accrue on the unpaid interest, therefore representing a more expensive funding option. In the case of zerocoupon bonds, principal and interest, at one coupon rate, is repaid at maturity.
In the case of Capital Appreciation Bonds, the value of the bond accretes until maturity. These types of bonds should be used only when no other bond structure is available to address a certain structuring problem. If used, these bonds should mature no later than 20 years from issuance and should be callable.
Taxable Debt is debt whose interest payments are taxable for federal income #8..
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5 tax purposes to bondholders. The City will consider the issuance of taxable debt when it is necessary for federal tax reasons or if these bonds would lower the overall cost of the financing or help the City achieve refunding savings that could not otherwise be achieved with the issuance of tax-exempt debt.
2. Short-Term Debt
Short-term borrowing may be utilized for the temporary funding of operational cash flow deficits or anticipated revenues, where anticipated revenues are defined as an assured revenue source with the anticipated amount based on conservative estimates, or until the structure of the take-out financing is finalized. The City will determine and utilize the least costly method for short-term borrowing. The City may issue short-term debt when there is a defined repayment source or amortization of principal, subject to the following policies:
Commercial Paper Notes may be issued as an alternative to fixed rate debt, particularly when the timing of funding requirements is uncertain. The City may maintain an ongoing commercial paper program to ensure flexibility and immediate access to capital funding when needed. The retirement of commercial paper is most commonly a result of the issuance of long-term bonds but they may also be retired with available cash. Grant Anticipation Notes (“GAN”) are short-term notes that are repaid with the proceeds of State or Federal grants of any type. The City shall generally issue GANs only when there is no other viable source of funding for the project.
Bond Anticipation Notes (“BAN”) are short-term notes issued prior to the issuance of long-term debt. BANs are most commonly retired, or taken-out, with long -term debt. BANs will be issued only when there is no better alternative to reduce the overall cost of a financing program. Tax and Revenue Anticipation Notes (“TRAN”) shall be issued only to address a timing mismatch between operating revenues and operating expenditures and the sizing of the issue shall fully conform to Internal Revenue Code requirements and limitations.
Lines of Credit shall be considered as an alternative to other short-term borrowing options. The lines of credit shall be structured to limit concerns as to Internal Revenue Code compliance.
Other short-term debt may also be considered and utilized when appropriate such as a Direct Purchase Loan from a bank or Floating Rate Notes.
3. Variable Rate Debt
To maintain a predictable debt service burden, the City may give preference to debt that carries a fixed interest rate. An alternative to the use of fixed rate debt is floating or variable rate debt. It may be appropriate to issue short-term or long-term variable rate debt to diversify the City’s debt portfolio, reduce interest costs, provide interim funding for capital projects and improve the match of assets to liabilities. Variable rate debt typically has a lower cost of borrowing than fixed rate financing and shorter interest rate reset periods in the range of 1 to 35 days. Under no circumstances will the City issue variable rate debt solely for the purpose of earning arbitrage. The City, however, may consider variable rate debt in certain instances.
A) Variable Rate Debt Capacity. The City will maintain a conservative level of #8..
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6 outstanding variable rate debt in consideration of general rating agency guidelines recommending a maximum of a 20% variable rate exposure, in addition to maintaining adequate safeguards against risk and managing the variable revenue stream, both as described below:
(1) Adequate Safeguards Against Risk. Financing structure and budgetary safeguards are in place to prevent adverse impacts from interest rate shifts; such structures could include, but are not limited to, interest rate swaps, interest rate caps and the matching of assets and liabilities. See Section VII. 4. Financial Derivative Products below. See also the Interest Rate Swap Policy addendum. (2) Variable Revenue Stream. The revenue stream for repayment is variable, and is anticipated to move in the same direction as market-generated variable interest rates, or the dedication of revenues allows capacity for variability. (3) As a Component to Synthetic Fixed Rate Debt. Variable rate bonds may be used in conjunction with a financial strategy, which results in synthetic fixed rate debt. Prior to using synthetic fixed rate debt, the City shall certify that the expected interest cost is at least 10 basis points (0.10%) lower than traditional fixed rate debt (including any ongoing fees in such calculation) as well as giving due consideration to other risks associated with such a structure that may raise the ultimate costs of a synthetic fixed rate structure. See Section VII. 4. Financial Derivative Products below. See also the Interest Rate Swap Policy addendum.
4. Financial Derivative Products
Financial Derivative Products will be considered appropriate in the issuance or management of debt only in instances where it has been demonstrated that the derivative product will either provide a hedge that is expected to reduce the risk of fluctuations in expense or revenue, or alternatively where the derivative product is expected to reduce total project cost. The City shall maintain an Interest Rate Swap Policy (see attached) governing the use of derivative products. For derivatives other than interest rate swaps, the City will undertake an analysis of early termination costs and other conditional terms given certain financing and marketing assumptions. Such analysis will document the risks and benefits associated with the use of a particular derivative product. Derivative products will only be utilized with prior approval from the City Council.
VIII. TERMS AND CONDITIONS OF BONDS
The City shall establish all terms and conditions relating to the issuance of bonds, and will control, manage, and invest all bond proceeds. Unless otherwise authorized by the City, the following shall serve as bond requirements.
A. Term
All capital improvements financed through the issuance of debt will be financed for a period generally not to exceed the average useful life of that which is being financed. At no time will the financing exceed 120% of the expected average useful life of the assets being financed, and in no event should the final maturity exceed the lesser of thirty (30) years or when the revenue source is projected to sunset.
B. Capitalized Interest
The nature of the City’s revenue stream is such that funds are generally continuously available #8..
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7 and the use of capitalized interest should not normally be necessary. However, certain types of financings may require the use of capitalized interest from the issuance date until the City has constructive use/benefit of the financed project. Unless otherwise required, the City will avoid the use of capitalized interest to obviate unnecessarily increasing the bond size. Interest shall not be funded (capitalized) beyond three (3) years or a shorter period when based upon project needs or if further restricted by statute. Interest earnings may, at the City's discretion, be applied to extend the term of capitalized interest but in no event beyond 3 years, or less, if restricted by law.
C. Lien Levels
Senior and Junior Liens for each revenue source will be utilized in a manner that will maximize the most critical constraint, typically either cost or capacity, thus allowing for the most beneficial use of the revenue source securing the bond. Projects chosen for priority financing, based on funding availability and proposed timing, will generally be financed on the most senior lien of the relevant credit.
D. Debt Service Coverage
For any new debt issuance secured by Water or Wastewater revenues, the City will seek to maintain pledged net revenues at a level no less than one and a half times (1.50x) the Maximum Annual Debt Service for the aggregate outstanding senior lien bonds, including the debt service for the new issuance, unless a different debt service coverage amount is allowed by existing bond covenants. For other types of debt incurred by the City, the City will determine the appropriate minimum debt service coverage levels based upon the nature of the pledged revenues, rating considerations, and other relevant factors.
E. Debt Service Structure
Debt issuance shall be planned to achieve relatively rapid repayment of debt while still matching debt service to the useful life of facilities. The City will amortize its debt within each lien to achieve overall level debt service or may utilize more accelerated repayment schedules after giving consideration to bonding capacity constraints. The City shall avoid the use of bullet or balloon maturities except in those instances where these maturities achieve one of the City’s stated goals, such as minimizing annual debt service or leveling annual existing debt service, among others.
F. Call Provisions
In general, the City’s securities will include a call feature, which is no later than ten (10) years from the date of delivery of the bonds. The City will avoid the sale of non-callable bonds absent careful evaluation by the City with respect to the value of the call option. If the City were to issue taxable bonds, the City will carefully consider the financial impacts of a 10-year call, a make-whole call, or non-callable debt.
G. Original Issue Discount & Deep Discount Bonds
An original issue discount and deep discount bonds will be permitted only if the City determines that such discount results in a lower true interest cost on the bonds and that the use of an original issue discount or deep discount bonds will not materially reduce the value of the bonds’ call provisions and adversely affect the project identified by the bond documents.
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8 H. Maximum Repayment Ratio
The maximum repayment ratio, defined as total future debt service payments divided by the principal amount of the bonds issued, shall be no more than three to one (3:1) for each series of bonds.
IX. CREDIT ENHANCEMENTS
The City will consider the use of credit enhancement on a case-by-case basis, evaluating the economic benefit versus cost for each case. Only when a clearly demonstrable savings can be shown shall enhancement be considered. The City will consider each of the following enhancements as alternatives by evaluating the cost and benefit of such enhancement. As noted below, the use of credit enhancements may result in additional continuing disclosure requirements described below (see Section XV. F. Continuing Disclosure below).
A. Bond Insurance
The City may purchase bond insurance when such purchase is deemed prudent and advantageous. The predominant determination shall be based on such insurance being less costly than the present value of the difference in the interest on insured bonds versus uninsured bonds.
B. Debt Service Reserves
When required, a reserve fund equal to the lesser of 10% of the original principal amount of the bonds, maximum annual debt service, or 125% of average annual debt service, and if permitted, 10% of par value of bonds outstanding, (the “Reserve Requirement”) shall be funded from the proceeds of each series of bonds, subject to federal tax regulations and in accordance with the requirements of credit enhancement providers and/or rating agencies. The City may purchase a reserve equivalent (e.g., a reserve fund surety policy) when such purchase is deemed prudent and advantageous. Such equivalents shall be evaluated in comparison to cash funding of reserves on a net present value basis, while also taking into account the creditworthiness of the surety provider and market acceptance.
C. Letters of Credit
The City may enter into a letter of credit agreement when such an agreement is required by the market (e.g., in the case of variable rate demand bonds) or is deemed prudent and advantageous. Only those financial institutions with long-term ratings greater than or equal to that of the City, and minimum short-term ratings of P-1, A-1, F1, by Moody’s Investor Services, Standard & Poor’s and Fitch, respectively, may participate in City letter of credit agreements unless there are no other practicable options for the City.
X. REFINANCING OUTSTANDING DEBT
The City shall have the responsibility to analyze outstanding bond issues for refunding opportunities that may be presented by underwriting and/or municipal advisory firms. The City will consider the following issues when analyzing possible refunding opportunities:
A. Debt Service Savings
The City has established a minimum net present value savings threshold goal of 3% of the refunded bond principal, unless there are other compelling reasons for defeasance. #8..
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9 The present value savings will be net of all costs related to the refinancing. If the debt to be refinanced is not currently callable (i.e., in the case of forward delivery refundings, advance refundings, etc.) the City will make a comparison to the projected savings it could achieve if it waited until the debt becomes eligible for a current refunding. The decision to defease debt that is not currently callable or to take savings on an upfront or deferred basis must be explicitly approved by the City Council.
B. Restructuring
The City will refund debt when in its best interest to do so. Refundings will include restructuring to meet unanticipated revenue expectations, terminate swaps, achieve cost savings, mitigate irregular debt service payments, release reserve funds or remove unduly restrictive bond covenants.
C. Term of Refunding Issues
The City will refund bonds within the term of the originally issued debt. However, the City may consider maturity extension, when necessary to achieve a desired outcome, provided that such extension is legally permissible. The City may also consider shortening the term of the originally issued debt to realize greater savings. The remaining useful life of the financed facility and the concept of intergenerational equity should guide this decision.
D. Escrow Structuring
The City shall utilize the least costly permitted securities available in structuring refunding escrows. The City will examine the viability of an economic versus legal defeasance on a net present value basis. Generally, the City should look to purchase State and Local Government Series (“SLGS”) securities from the federal treasury when structuring refunding escrows. The City may review the purchase of Open Market Securities (“OMS”) to fund a refunding escrow. In such a case, a certificate from a thirdparty agent, who is not a broker-dealer, is required stating that the securities were procured through an arms-length, competitive bid process (in the case of OMS), that such securities were more cost effective than SLGS, and that the price paid for the securities was reasonable within Federal guidelines. Under no circumstances shall an underwriter, agent, municipal advisor or financial advisor sell escrow securities to the City from its own account.
E. Arbitrage
The City shall take all necessary steps to optimize refunding escrows and to avoid negative arbitrage. Any resulting positive arbitrage will be rebated as necessary according to Federal guidelines.
XI. METHODS OF ISSUANCE
The City will determine, on a case-by-case basis, whether to sell its bonds competitively or through negotiation. The City shall evaluate the comparative costs of each method of issuance on a net present value basis, using the City’s investment rate as the appropriate measure of the discount rate. It should be noted, however, that cost may be only one of a number of factors considered in determining the most advantageous method of sale. #8..
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10 A. Competitive Sale
In a competitive sale, the City’s bonds shall be awarded to the bidder providing the lowest true interest cost as long as the bid adheres to the requirements set forth in the official notice of sale. Conditions under which a competitive sale would be preferred are as follows:
Bond prices are stable and/or demand is strong.
Market timing and interest rate sensitivity are not critical to the pricing. There are no complex explanations required during marketing regarding issuer’s projects, media coverage, political structure, political support, and funding or credit quality.
The bond type and structure are conventional.
Bond insurance is not needed, is included or pre-qualified (available). Significant transaction size, generally larger than $10 million. The City (or the issuing City enterprise) has strong credit ratings. The City (or the issuing City enterprise) is well known to investors.
B. Negotiated Sale
The City recognizes that some securities are best sold through negotiation. Conditions under which a negotiated sale would be preferred are as follows:
Interest rates are volatile.
Demand is weak or supply of competing bonds is high.
Market timing is important, such as for refundings.
The City (or the issuing City enterprise) has lower or weakening credit rating. The issuing City enterprise is not well known to investors. Sale and marketing of the bonds will require complex explanations about the issuer’s projects, media coverage, political structure, political support, funding, or credit quality.
The bond type and/or structural features are non-standard, such as for a forward delivery bond sale, issuance of taxable or variable rate bonds, or where there is the use of derivative products.
Bond insurance is not available or not offered.
Early structuring, investor outreach and other market participation by underwriters are desired.
The par amount for the transaction is small (generally under $10 million) or significantly larger than normal (generally over $100 million). Demand for the bonds by retail investors is expected to be high. Participation from Disadvantaged Business Enterprise (“DBE”) firms is required or desired.
C. Private Placement
From time to time the City may elect to privately place its debt. Such placement shall be considered if this method is demonstrated to result in a cost savings to the City or other benefits relative to other methods of debt issuance. As noted below, private placements may require compliance with disclosure requirements (see Section XV. F. Continuing Disclosure below).
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11 D. Feasibility Analysis
Issuance of revenue bonds may be accompanied by a finding that demonstrates the projected revenue stream’s ability to meet future debt service payments.
XII. MARKET RELATIONSHIPS
A. Rating Agencies and Investors
The Director of Finance shall be responsible for maintaining the City’s relationships with Moody’s Investors Service, Standard & Poor’s, Fitch and any other major rating agency.
The City may, from time to time, choose to seek ratings from only one or two of these agencies as circumstances dictate. In addition to general communication, the Director of Finance shall meet with credit analysts prior to each rated competitive or negotiated sale and/or offer conference calls with agency analysts in connection with the planned sale as needed.
B. Other Jurisdictions/Conduit Financing
From time to time, the City may issue bonds on behalf of other public entities. While the City will make every effort to facilitate the desires of these entities, the Director of Finance will ensure that the highest quality financings are done and that the City is insulated from all manageable risks. The City may issue bonds through another issuing entity such as a Joint Powers Authority (“JPA”). The City may issue debt in this manner if it would result in the least costly method to issue debt (e.g. reduced costs of issuance).
The City will evaluate the timing of such issuance.
C. Fees
When appropriate, the City will charge an administrative fee equal to direct costs to reimburse its administrative costs incurred in debt issuance and ongoing reporting costs.
XIII. CONSULTANTS
Periodically, the City may create an approved pool of qualified financing team members, such as municipal advisors or underwriters.
A. Selection of Financing Team Members
The Director of Finance will make recommendations to the City Manager for all financing team members, with the City Council providing final approval.
B. Municipal Advisor
The City shall utilize a municipal advisor to assist in its debt issuance and debt administration processes as prudent. The municipal advisor must be registered as a Municipal Advisor with the Securities and Exchange Commission (“SEC”) and Municipal Securities Rulemaking Board (“MSRB”). Selection of the City’s municipal advisor(s) shall be based on, but not limited to, the following criteria:
Prior knowledge and experience with the City.
Experience in providing consulting services to complex issuers. Knowledge and experience in structuring and analyzing complex issues. Experience and reputation of assigned personnel.
Fees and expenses.
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12 Municipal advisory services provided to the City shall include, but shall not be limited to the following:
Evaluation of risks and opportunities associated with debt issuance. Monitoring market conditions and opportunities.
Evaluation of proposals submitted to the City by investment banking firms. Structuring and pricing of debt.
Preparation of request for proposals for other financial services such as trustee and paying agent services, printing, credit facilities, remarketing agent services, etc.
Advice, assistance and preparation for presentations with rating agencies, credit providers and investors.
Assisting in preparation of official statements and other financing documents. Be available for other projects whenever needed.
The City also expects that its municipal advisor will provide the City with objective advice and analysis, maintain the confidentiality of City financial plans, and be free from any conflicts of interest.
C. Bond Counsel
City debt will include a written opinion by legal counsel affirming that the City is authorized to issue the proposed debt, that the City has met all constitutional and statutory requirements necessary for issuance, and a determination of the proposed debt’s federal income tax status. The approving opinion and other documents relating to the issuance of debt will be prepared by counsel with extensive experience in public finance and tax issues. The counsel will be selected by the City Attorney and subject to City Council approval.
The services of bond counsel may include, but are not limited to:
Rendering a legal opinion with respect to authorization and valid issuance of debt obligations including whether the interest paid on the debt is tax exempt under federal and State of California law;
Preparing all necessary legal documents in connection with authorization, sale, issuance and delivery of bonds and other obligations;
Unless this task is assigned to disclosure counsel, as selected by the City separately from bond counsel, preparing the preliminary and final official statements and commercial paper memoranda;
Participating in discussions with potential investors, insurers and credit rating agencies, if requested;
Providing continuing advice, as requested, on the proper use and administration of bond proceeds under applicable laws and the indenture, particularly arbitrage tracking and rebate requirements;
D. Disclosure Counsel
The City may utilize a separate firm to serve as disclosure counsel as it deems necessary.
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13 XIV. UNDERWRITER SELECTION
A. Senior Manager Selection
The City shall have the right to select a senior manager for a proposed negotiated sale.
The criteria shall include but not be limited to the following:
The firm’s ability and experience in managing similar and/or complex transactions.
Demonstrated ability to structure debt issues efficiently and effectively. Prior knowledge and experience with the City.
The firm’s willingness to risk capital and demonstration of such. The firm’s ability to reach a wide network of investors. The firm’s ability to sell bonds at the lowest market interest rates. Quality and experience of personnel assigned to the City’s engagement. Financing and marketing plans presented.
B. Co-Manager Selection
Co-managers may be selected on the same basis as the senior manager. In addition to their qualifications, co-managers appointed to specific transactions will be a function of transaction size and the necessity to ensure maximum distribution of the City’s bonds.
C. Selling Groups
The City may establish selling groups in certain transactions. To the extent that selling groups are used, the City may make appointments to selling groups from within an existing pre-qualified pool of underwriters or through another process, as the transaction dictates.
D. Underwriter’s Counsel
In any negotiated sale of City debt in which legal counsel is required to represent the underwriter, the lead underwriter will make the appointment subject to the City’s right to object to any such appointment.
E. Underwriter’s Discount
The City will evaluate the proposed underwriter’s discount against comparable issues in the market. If there are multiple underwriters in the transaction, the City will determine the allocation of fees with respect to the takedown and management fee (if any). The determination of the size and allocation of the management fee will be based upon participation in the structuring phase of the transaction. Generally, the City will not pay for risk in its underwriter’s discount. All fees and allocation of the management fee will be determined prior to the sale date; a cap on management fee, expenses and underwriter’s counsel will be established and communicated to all parties by the City.
The senior manager shall submit an itemized list of expenses charged to members of the underwriting group. Any additional expenses must be substantiated.
F. Evaluation of Financing Team Performance
The City will evaluate each bond sale after its completion to assess the following: costs of issuance including underwriters’ compensation, pricing of the bonds in terms of the overall interest cost and on a maturity-by-maturity basis, and the distribution of bonds and sales credits. Following each sale, the municipal advisor shall provide a post-sale evaluation on the results of the sale to the City Council. #8..
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14 G. Syndicate Policies
For each negotiated transaction, the Director of Finance will review and approve syndicate policies that will describe the designation policies governing the upcoming sale. The Director of Finance shall ensure receipt of each member’s acknowledgement of the syndicate policies for the upcoming sale prior to the sale date.
H. Designation Policies
To encourage the pre-marketing efforts of each member of the underwriting team, orders for the City’s bonds will be net designated, unless otherwise expressly stated. The City shall require the senior manager to:
Equitably allocate bonds to other managers and the selling group. Comply with MSRB regulations governing the priority of orders, compliance with retail order requirements and allocations.
Within 10 working days after the sale date, submit to the Director of Finance a detail of orders, allocations and other relevant information pertaining to the City’s sale.
I. Disclosure by Financing Team Members
All financing team members will be required to provide full and complete disclosure relative to agreements with other financing team members and outside parties. The extent of disclosure may vary depending on the nature of the transaction and for underwriters and municipal advisors shall, at a minimum, comply with applicable SEC and MSRB requirements. For firms acting as the City’s bond counsel, disclosure counsel, or municipal advisor, no agreements shall be permitted which could compromise the firm’s ability to provide independent advice which is solely in the City’s best interests or which could reasonably be perceived as a prohibited conflict of interest. All other conflicts must be disclosed to the City in accordance with applicable regulatory requirement. For legal counsel such conflicts disclosure shall, at a minimum, comply with applicable conflicts disclosure requirements for attorneys in the state.
XV. POST-ISSUANCE COMPLIANCE
A. General
In conjunction with the issuance of a tax-advantaged obligation, bond counsel issues an opinion that is in part based on the reasonable expectation that the issuer will comply with federal tax law requirements to preserve the tax-advantaged status of the obligation. The issuer agrees to comply with these requirements through representations it makes in the tax compliance certificate. The purpose of this Post-Issuance Compliance section is to establish policies and procedures in connection with the issuance of obligations, so as to (a) maximize the likelihood that the City satisfies all applicable post-issuance requirements of federal income tax law needed to preserve the tax exempt status of bonds, (b) ensure that the City will take any appropriate remedial actions on a timely basis if a future event occurs that could affect the tax-exempt status of bonds, and (c) maximize the likelihood that the City complies with applicable federal securities laws, including any contractual obligations arising thereunder. The City reserves the right to use its discretion as necessary and appropriate to make exceptions or request additional provisions as circumstances warrant. The City also reserves the right to change these policies and #8..
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15 procedures from time to time.
Issuers and borrowers are also required to disclose, on a periodic basis, financial information and certain other information that may impact their ability to service their debt. This ongoing reporting requirement is known as continuing disclosure. The requirements of continuing disclosures are directly applicable to underwriters and are set forth in Securities and Exchange Commission (“SEC”) Rule 15c2-12. The issuer makes representations in its official statements and other bond documents regarding its intent to comply as a matter of contract with the requirements of Rule 15c2-12.
B. Designation of Post-Issuance Compliance Officer
The City has established a Disclosure Working Group (“DWG”) consisting of the City’s Manager and Director of Finance. The DWG will establish appropriate written policies and procedures, which this document provides, and periodic training regarding continuing disclosure obligations to effect compliance with the federal securities laws. In connection with each primary offering subject to Rule 15c2-12, as well as annually and periodically when necessary in connection with its continuing disclosure filings required by contractual undertakings delivered in accordance with Rule 15c2-12, the DWG will notify its dissemination agent and others, as and when appropriate when developments and events affect the City that may give rise to a contractual obligation to provide additional disclosure or that may provide an opportunity for voluntary disclosure.
The Director of Finance, or his or her designee, shall be the Post-Issuance Compliance Officer (the “Compliance Officer”) for the City’s debt issuances (the “Bonds”). The Compliance Officer, if City staff, may designate such other personnel as may be necessary to assist in determining continuing compliance with all relevant law and regulations applicable to the continued favorable tax treatment of such indebtedness, and to comply with the record-keeping responsibilities outlined herein. At such time as the initial Compliance Officer is replaced or a new Compliance Officer is designated, the departing Compliance Officer will ensure that such successor is fully briefed as to the status of the City’s outstanding indebtedness and the location of records relating to such indebtedness, and that such successor receives training and consultation(s) with bond or disclosure counsel as to his or her duties as Compliance Officer under this Debt Policy.
C. External Advisors
The City shall consult with bond counsel and other legal counsel and advisors, as needed, so long as any Bonds remain outstanding, to identify requirements and to establish procedures necessary or appropriate so that tax-exempt interest on the Bonds will continue to be excludable from gross income for federal income tax purposes. Those requirements and procedures shall include future compliance with applicable private activity bond tests, arbitrage rebate requirements and all other applicable post-issuance requirements of federal tax law throughout (and in some cases beyond) the term of bonds. The Compliance Officer shall conduct periodic reviews, at least annually, or more often as may be necessary, to determine that the City remains in compliance with all laws and regulations, including, without limitation, the matters set forth herein. The Compliance Officer annual review shall include matters that relate to the tax status of the Bonds, continuing compliance with covenants that relate to the tax status of the Bonds, and any new matters or public finance developments that relate to the tax status of the Bonds or continuing compliance with such requirements. The City may consult with bond counsel in #8..
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16 conducting its review and may engage expert advisors (each a “Rebate Analyst”) to assist in the calculation of arbitrage rebate payable in respect of the investment of Bond proceeds in the manner more fully set forth in the Tax Certificate.
D. Uses and Investments of Funds and Accounts
Various funds and accounts are established as security for the Bonds. The Compliance Officer shall prepare regular, periodic statements regarding the investments and transactions involving bond proceeds, which shall comprise part of the records required to be kept. The Compliance Officer will also review the disbursement of bond proceeds from Trustee records or City records, as applicable, to ensure that bond proceeds are expended in accordance with their intended purpose. The Compliance Officer shall report to the Finance Director (if the officer is a designee of the Finance Director) and the City Manager any expenditure which violates the provisions of any ballot measure, authorizing resolution, or trust document. If any Debt Service Fund ever contains any balance after the principal payment of the Bonds is made each year, except for a reasonable carryover amount which is less than the greater of the earnings on the Debt Service Fund for the immediately preceding year ending on such principal payment date (a “Bond Year”), or 1/12 of the principal and interest payments on the Bonds for the immediately preceding Bond Year, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan to remediate such condition, if necessary, and to determine an allowable use for such excess moneys and/or to determine if any yield restrictions apply. If any Debt Service Reserve Fund is ever funded (i) in an amount more or less than the required balance but declining in future years as detailed in the Tax Certificate), or (ii) is invested at a yield that is higher than the yield of the Bonds, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan to remediate such condition and/or to determine if any yield restrictions apply. Generally, if the Debt Service Reserve Fund ever contains a higher balance than required (either through the accrual of interest, investment gains, maturity of securities, or reduction in the Reserve Requirement) then the excess moneys should be dealt with as directed by the documents and approved by bond counsel. If any Construction Fund ever is invested at a yield higher than the yield of the Bonds or if moneys in the Construction Fund are not fully expended by three years after the original delivery date of the Bonds, then the Compliance Officer will contact bond counsel to ensure that such facts will not cause the Bonds to become arbitrage bonds, to formulate a plan for the investment and application of the remaining unexpended Bond Proceeds, which plan may include the redemption or defeasance of Bonds, and/or to determine if any yield restrictions apply.
E. Rebate Reporting
The use of bond proceeds and their investments must be monitored to ensure compliance with arbitrage restrictions. The City will cause arbitrage rebate calculations to be completed, or cause to be completed by an experienced firm the City has retained for this purpose related to any bond issues, with any positive rebate paid every five years and as otherwise required by applicable provisions of the Internal Revenue Code and regulations.
Therefore, the Director of Finance shall ensure that proceeds and investments are tracked in a manner that facilitates accurate, complete calculation, and timely rebates, if necessary. #8..
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17 F. Continuing Disclosure
Appointment. Unless otherwise provided in any Continuing Disclosure Agreement executed in connection with Bonds pursuant to SEC Rule 15c2-12 (the “Continuing Disclosure Agreement”), the Compliance Officer shall also be the Dissemination Agent under such Continuing Disclosure Agreement. The Compliance Officer shall be responsible for and take all reasonable steps to ensure compliance with said Continuing Disclosure Agreement and shall monitor the operations of the Issuer for occurrence of any listed event (as set forth therein). For any Bonds for which it is designated to serve in such capacity, should the Compliance Officer no longer serve as Dissemination Agent, the City shall select an internal or external Dissemination Agent.
Responsibilities. The Dissemination Agent is responsible for the following (the “Continuing Disclosure Policies”):
Serving as a “point person” for personnel to communicate issues or information that should be or may need to be included in any Continuing Disclosure Agreement;
Identifying the officers and employees of the City who are most likely to first obtain knowledge of the occurrence of events that would require event filings; Monitoring compliance by the City with the Continuing Disclosure Policies, including timely dissemination of the annual report and event filings as described below;
Recommending changes to the Continuing Disclosure Policies to the City as necessary or appropriate;
Following up with others to make sure that assigned tasks have been completed on a timely basis and making sure that the continuing disclosure annual report is filed on a timely basis; and
Maintaining records documenting the City’s compliance with the Continuing Disclosure Policies and the Continuing Disclosure Agreement.
Filing Requirements. The City is required to file an annual report with the MSRB’s Electronic Municipal Market Access (“EMMA”) system each year. Such annual reports are required to include certain updated financial and operating information and audited financial statements. The Dissemination Agent will establish or cause to be established a calendar reminder of the city’s continuing disclosure obligations on July 1 each year. The City is also required to file notices of certain events with the MSRB’s Electronic Municipal Market Access system. Upon the identification of the occurrence of a material event, the Dissemination Agent shall, in consultation with bond counsel, prepare, or caused to be prepared, a draft of the necessary notice (including compiling any materials or documents to be included with such notice) and shall notify such parties of the date by which such notice is to be filed. If it is not clear if the occurrence of an event constitutes an event that requires notification, then the Dissemination Agent shall consult with bond counsel to determine whether the City is required to file a notice concerning such event.
For any public debt issues (subject to contractual obligations under SEC Rule 15c2-12) issued on or after February 27, 2019, the City is required to commit to make additional disclosure with respect to private loans or financing leases (not sold through an official statement) or derivatives or credit support agreements (collectively “financial obligations”). The additional events will need to be provided to the City’s Dissemination Agent, for further filing with EMMA, within ten (10) business days of their occurrence:
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18 Incurrence of a financial obligation of the City (and any obligated person, where applicable), if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation the City (and any obligated person, where applicable), any of which affect security holders, if material;
Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City (and any obligated person, where applicable), any of which reflect financial difficulties.
In addition, the Dissemination Agent will be responsible for providing notice, in a timely manner, of a failure to provide any of the City’s required annual financial information by the date specified in the continuing disclosure undertaking. The inability to make timely filings must be disclosed and is a negative reflection. While there is reliance on timely audit and preparation of the City’s annual report, the Director of Finance will ensure the City’s timely filing of its annual report on EMMA as soon as it is available.
G. Voluntary Disclosure Requirements
In addition to preparing annual reports and event notices, the City may wish to keep investors informed by providing information that is not required to be provided under Rule 15c2-12 or its continuing disclosure undertakings. Examples of such types of information are investments, interim financial information, capital improvement plans, fund balance policies, etc. and financial forecasts. Because providing this information is voluntary, the Compliance Officer will monitor for events which may materially affect the financial condition or operations of the City, so that a determination can be made if the event should be disclosed. The below list is comprised of events and financial disclosure which the MSRB has suggested issuers may wish to voluntarily disclose. Some of these are not applicable to the City’s public debt issues and financial obligations, but the City may wish to consider providing some of these to the City’s Dissemination Agent for further filing with EMMA:
Amendment to continuing disclosure undertaking;
Change in obligated person (i.e., a person guaranteeing or supporting City debt):
Notice to investors pursuant to bond documents;
Certain communications from the Internal Revenue Service; Secondary market purchases;
Capital or other financing plan;
Litigation/enforcement action;
Change of tender agent, remarketing agent, or other on-going party; Change in fiscal year/timing of annual disclosure or accounting standard; Interim/additional financial information/operating data, budget; Investment/debt/financial policy changes;
Information provided to rating agency, credit/liquidity provider or other third party; and
Consultant reports
Also, if the City maintains an Investor Relations website, or routinely posts City information packages, including interim financial information, capital improvement plans, etc. on its website, the City’s Compliance Officer should review and, in some cases, the Compliance Officer should reissue the posted material with an explanatory note (e.g., the interim financial information is presented on a cash, as opposed to accrual basis). #8..
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19 Currently, the City is not required to file interim financial information. In the future, if such filings are required in continuing disclosure undertakings, the City’s Compliance Officer will notify the Dissemination Agent for assistance when these filings become necessary.
H. Coordinating Continuing Disclosure with Primary Disclosure It is expected that the DWG will be responsible for collecting and reviewing information set forth in official statements prepared in connection with new bond offerings. Any Management’s Discussion and Analysis (“MD&A”) from the prior year’s audited financial statements will be reviewed to ensure that the unaudited information which was provided in that portion of the financial statements is updated to include added public debt and material financial obligations. Coordination with the City’s auditors will be essential, as well as careful review of the long-term debt notes in the financial statements and the checking of all bond ratings before each EMMA filing is made. Measures should be taken to assure information publicly available to investors is accurate. Further coordination between the DWG and the City’s website manager is essential before posting any financial information.
I. Website Disclosure
It is expected that the Compliance Officer will be responsible for monitoring website content and reviewing the information set forth on such website. Appropriate disclaimer language on the website will be considered in order to educate the viewer that specific information intended for investors can be found on the City’s EMMA page as well as the investor’s acknowledgement of the limitations of such reliance. Coordination between the DWG and City officials will occur before the release of any public statements about any financial condition of the City.
J. Training for Employees and Issuer Officials
For City officials, compliance with federal securities law should be considered as important as compliance with local public meetings and records laws. To further this goal, the Compliance Officer shall call a meeting for an annual review or, if necessary, an interim review, of the continuing disclosure policies of the City, which all members of the DWG and additional invited officials and employees are expected to attend. The Compliance Officer shall be responsible for keeping a record of attendance. Furthermore, the members of the DWG and such invited officials and employees are expected to attend training sessions, at least annually, called by the Compliance Officer. Applicable policies and procedures will be updated by the City to reflect required changes on an as-needed basis.
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20 GLOSSARY
Arbitrage- The difference between the interest paid on the tax-exempt securities and the interest earned by investing the security proceeds in higher-yielding taxable securities.
IRS regulations govern arbitrage on the proceeds from issuance of municipal securities.
Balloon Maturity- A later maturity within an issue of bonds that contains a disproportionately large percentage of the principal amount of the original issue.
Bond Allocation Policies- Outline as to how an investor’s order is filled when a maturity in an underwriting syndicate is oversubscribed. The senior managing underwriter and issuer decide how the bonds will be allocated among the syndicate. There are three primary classifications of orders, which form the designation policy. The highest priority is given to Net Designated orders; the next priority is given to Group Net orders and Member orders are given the lowest priority (unless the Member orders are retail orders in which case it would be given the highest priority).
Bullet Maturity- Maturity for which there are no sinking fund payments prior to the stated maturity date.
Call Provisions- The terms of the bond contract giving the issuer the right to redeem all or a portion of an outstanding issue of bonds prior to their stated dates of maturity at a specific price, usually at or above par.
Capitalized Interest- A portion of the proceeds of an issue that is set aside to pay interest on the securities for a specific period of time. Interest is commonly capitalized for the construction period of the project.
Commercial Paper- Very short-term, unsecured promissory notes issued in either registered or bearer form, and usually backed by a line of credit with a bank.
Competitive Sale- A sale of securities by an issuer in which underwriters or syndicates of underwriters submit sealed bids to purchase the securities in contrast to a negotiated sale.
Continuing Disclosure- The principle that accurate and complete information material to the transaction which potential investors would be likely to consider material in making investment decisions with respect to the securities be made available on an ongoing basis.
Credit Enhancement- Credit support purchased by the issuer to raise the credit rating of the issue. The most common credit enhancements consist of bond insurance, direct or standby letters of credit, and lines of credit.
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21 Debt Service Reserve Fund- The fund in which moneys are placed which may be used to pay debt service if pledged revenues are insufficient to satisfy the debt service requirements.
Deep Discount Bonds- Bonds that are priced for sale at a substantial discount from their face or par value.
Derivatives- A financial product whose value is derived from some underlying asset value.
Designation Policies- Concerning a negotiated sale of bonds, the rules regarding how the takedown (sales commission) is allocated among the underwriters for each order put in for the bonds.
Direct Purchase Loan- A source of financing where the loan is purchased by a financial institution instead of being offered to the general public for purchase. The loan can bear interest at a fixed rate or on a variable rate tied to market index (i.e. SOFR or SIFMA).
This form of financing does not require a remarketing agent to set the variable rate. As such, a Direct Purchase Loan can be used to replace traditional forms of variable-rate debt.
Escrow- A fund established to hold moneys pledged and to be used to pay debt service on an outstanding issue.
Expenses- Compensates senior managers for out-of-pocket expenses including:
underwriters counsel, DTC charges, travel, syndicate expenses, dealer fees, overtime expenses, communication expenses, computer time and postage.
Floating Rate Notes (“FRN”)- A note with a variable interest rate sold either in the public market or directly to financial institutions. The adjustments to the interest rate are typically tied to a certain index like SOFR or SIFMA and are made periodically. The rate would continue to reset in the same manner through maturity. The SOFR-based floating rate note market typically does not require bank support and as a result, offers issuers an alternative to traditional floating rate debt.
Grant Anticipation Notes (“GAN”)- Short term notes issued by the government unit, usually for capital projects, which are paid from the proceeds of State or Federal grants of any type.
Letters of Credit- A bank credit facility wherein the bank agrees to lend a specified amount of funds for a limited term.
Management Fee- The fixed percentage of the gross underwriter’s spread which is usually only paid to the managing underwriter for the structuring phase of a transaction.
Members- Underwriters in a syndicate other than the senior underwriter.
Moody’s Median- Key financial, debt, economic and tax base statistics with median values for each statistic presented. Moody’s uses audits for both rated and unrated #8..
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22 agencies to ensure that the medians presented are representative of all agencies.
Negotiated Sale- A method of sale in which the issuer chooses one underwriter to negotiate terms pursuant to which such underwriter will purchase and market the bonds.
Original Issue Discount- The amount by which the original par amount of an issue exceeds its public offering price at the time it is originally offered to an investor.
Pay-As-You-Go- An issuer elects to finance a project with existing cash flow as opposed to issuing debt obligations.
Present Value- The current value of a future cash flow.
Private Placement- The original placement of an issue with one or more investors or financial institutions as opposed to being publicly offered or sold.
Rebate- A requirement imposed by the Tax Reform Act of 1986 whereby the issuer of the bonds must pay the IRS an amount equal to its profit earned from investment of bond proceeds at a yield above the bond yield calculated pursuant to the IRS code together with all income earned on the accumulated profit pending payment.
Tax and Revenue Anticipation Notes (“TRAN”)- Short-term notes issued by a government unit, usually for capital projects, which are paid from the proceeds of sales tax or other revenue sources.
Selling Groups- The group of securities dealers who participate in an offering not as underwriters but rather as those who receive securities less the selling concession from the managing underwriter for distribution at the public offering price.
Syndicate Policies- The contractual obligations placed on the underwriting group relating to distribution, price limitations and market transactions.
Underwriter- A dealer that purchases new issues of municipal securities from the Issuer and resells them to investors.
Underwriter’s Discount- The difference between the price at which the Underwriter buys bonds from the Issuer and the price at which they are reoffered to investors.
Variable Rate Debt- An interest rate on a security which changes at intervals according to an index or a formula or other standard of measurement as stated in the bond contract. #8..
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23 1. City of Modesto Philosophy Regarding Use of Interest Rate Swaps A. Introduction
Interest rate exchange agreements or interest rate swaps (“Swaps”) and related financial instruments and derivatives may be appropriate interest rate management tools in certain circumstances. Properly used, Swaps can increase the City of Modesto’s (the “City”) financial flexibility and provide opportunities for interest rate savings. This policy (“Swap Policy”) shall be followed in conjunction with the City’s related debt issuance-related policies and procedures (the “Debt Policy”).
Swaps are appropriate to use when they achieve a specific financial objective consistent with the City’s overall Swap Policy and Debt Policy. Swaps may be used, for example, to lock-in a current market fixed rate or create additional variable rate exposure. Swaps may be used to produce interest rate savings or alter the pattern of debt service payments. Swaps may be used to cap, limit or hedge variable rate payments. Options granting the right to commence or cancel an underlying Swap are permitted to the extent the Swap itself is otherwise consistent with this Swap Policy.
The authorized Swaps contemplated in this Swap Policy are intended to reduce the amount or duration of interest rate risk, or produce a lower cost of borrowing when used in combination with the issuance of bonds.
B. Rationales for Utilizing Interest Rate Swaps
The use of Swaps and related financial instruments should balance the City’s primary objectives of reducing the cost of capital, minimizing the City’s exposure to interest rate volatility, and gaining flexibility in structuring and managing its debt portfolio over time with the risks associated with these tools and instruments. Examples of how the City’s debt management objectives can be achieved through the use of Swaps and other financial instruments are described below:
Reduce borrowing costs at the time of issuance
Create synthetic fixed rate debt through a floating-to-fixed Swap. Actively manage interest rate risk
Lock-in current market rates through (forward starting) floating-to-fixed Swap. Balance financial risk
Purchase of an interest rate cap.
Achieve appropriate asset/liability match
Create variable rate exposure through fixed-to-floating Swap.
CITY OF MODESTO
CITY COUNCIL
POLICY
Latest Revision Date: April 2022
ADDENDUM: INTEREST RATE SWAP POLICY
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24 Under no circumstances will Swaps be used for speculative purposes, e.g., to realize trading gains.
2. Authority for Entering into Swap Agreements
The purpose of this Swap Policy is to integrate the use of Swaps into the City’s overall Debt Policy, and other funds of the City where particular debt strategies, both long-term and short-term, factor into these decisions. Swaps will not be used for speculation. The City Manager, in conjunction with the Director of Finance, shall be responsible for determining if and when it is in the City’s overall best financial interests to enter into a Swap or related financial instruments covered by this Swap Policy.
The City shall comply with all applicable laws. The City must receive an opinion acceptable to the financial market from a nationally recognized law firm that the swap contract is a legal, valid, and binding obligation of the City and that entering into such a contract complies with applicable provisions of the City Charter and State statutes.
3. Permitted Instruments
The City may utilize financial instruments that (i) lower its interest expense, (ii) manage its financial risk or (iii) improve its financial condition.
The City shall not use financial instruments that (i) create substantial leverage or financial risk, (ii) lack adequate liquidity to terminate at market, (iii) provide insufficient price transparency to allow reasonable valuation on an ongoing basis, or (iv) are primarily speculative in nature.
The use of Swaps and other hedging products should produce a result not otherwise available in the cash market (i.e., lack of advance refunding/non-callable debt), or provide a higher level of net savings compared to conventional financing methods.
The City may expressly utilize the following financial instruments, after identifying the financial objective(s) to be realized and assessing the attendant risks:
Current or forward starting floating-to-fixed rate swaps Designed to reduce a fixed interest rate below that which would otherwise be available through the use of traditional fixed rate debt. Current or forward starting fixed-to-floating rate swaps Designed to create additional variable interest rate exposure. Rate Locks
Cash-settled forward contracts based on indices such as the MMD™ 1 “AAA” scale.
Interest Rate Caps, Floors or Collars
Financial contracts that limit exposure to interest rate volatility. Options on Variable Rate Indices
Indices could include the Securities Industry and Financial Markets Association (“SIFMA”) Index2
, Secured Overnight Financing Rate (“SOFR”)3, etc.
1. MMD™ is a trademark of Municipal Market Data, a Thompson Financial company.
2. The SIFMA Index is an index of more than 500 high-grade, tax-exempt, weekly reset VRDO issues.
3. SOFR is a taxable rate which is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, published daily by the Federal Reserve Bank. #8..
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25 Options on Swaps (“Swaptions”)
Methods used to control the commencement or cancellation of interest rate swaps. Basis Swaps
Floating-to-floating rate swaps using different variable-rate indices, such as a swap from the SIFMA Index to a percentage of SOFR.
4. Swap Risk Analysis
The City shall require for each proposed financing an evaluation of all financial products with respect to the unique risks that they bear. A specific determination must be made that the proposed or expected benefits exceed the identified risks by an adequate margin over those available in the traditional cash market. At a minimum, the City shall perform an evaluation of the risks and what steps have been taken to mitigate any risks. The City shall retain a municipal/swap advisor to assist in assessing these risks. Questions that may arise include the following:
Market or Interest Rate Risk
Does the transaction hedge (i.e., decrease or eliminate) or increase interest rate volatility? Tax Risk
How is the transaction or its benefits affected by a future change in federal income tax policy?
Termination Risk
Under what circumstances might the transaction be terminated? At what value? Risk of Uncommitted Funding (Put Risk)
Does the transaction create additional financing dependent upon third-party participation (such as requiring a letter of credit, grant or other anticipation funding, etc.)? Rollover Risk
Is the term of the Swap shorter than the term of the underlying hedged debt or financial instrument? Does the City anticipate entering into another Swap when the first Swap terminates?
Legal Risk
Is the transaction expressly legally authorized?
Counterparty Risk
What is the creditworthiness of the counterparty?
Rating Agency Risk
Is the proposed transaction consistent with the City’s current ratings and ratings objectives? Basis Risk
Is it anticipated that the projected Swap payments the City will receive closely match the debt service payments it will make?
Index Risk
Does the transaction include provisions acceptable to the City regarding any change in indices used to calculate payments or obligations?
Subsequent Business Conditions
Does the transaction or its benefits depend upon the continuation, or realization, of specific industry business conditions (e.g., unusual demand for state-specific variable rate debt)? Operational Risk
Does the City have adequate systems, policies, and practices in place to monitor and manage the transaction over its term?
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26 5. Swap Procurement and Execution
A. Procurement
The City will not have a fixed policy with respect to the procurement of Swaps and other financial instruments authorized by this Swap Policy. On a product-by-product basis, the City will have the authority to negotiate or competitively bid the procurement of financial instruments that have customized or specific attributes designed on its behalf. The Director of Finance will be responsible for determining the method of procurement for Swaps and related financial instruments. A municipal/swap advisor shall be retained to assist the Director of Finance in evaluating the proposed pricing of Swaps or related financial instruments.
B. Swap Execution
The Director of Finance may recommend the use of financial derivative products if they:
1. Provide a specific benefit not otherwise available;
2. Produce greater expected interest rate savings than cash market alternatives;
3. Do not create substantial leverage or financial risk;
4. Result in an improved capital structure or better asset/liability match; and
5. Reasonably pass the Swap Risk Analysis required by Section 4. Swap Risk Analysis of this Swap Policy.
C. Credit Rating Designations
For purposes of this Swap Policy, references to credit ratings will be based on those ratings issued by Moody’s Investors Service, and/or Standard & Poor’s Corporation, and/or Fitch Ratings. The credit ratings will reflect the designations assigned by each of these rating agencies utilized for comparable credit and will be listed for each rating agency utilized in the order shown in the preceding sentence.
6. Swap Documentation
The City will use standard International Swap and Derivatives Association, Inc. (“ISDA”) Master Agreement, including the Counterparty Schedule to the Master Agreement and a Credit Support Annex (utilizing such versions thereof as the Director of Finance shall determine), as supplemented and amended in accordance with the recommendations of the City’s financial/swap advisor and legal counsel. Each Swap entered into by the City shall include payment, term, security, collateral, default, remedy, termination and other terms, conditions and provisions as the Director of Finance may deem necessary or desirable.
A. Terms and Notional Amount of Swap Agreement
The City shall determine the appropriate term for Swaps on a case-by-case basis. The slope of the swap curve, the marginal change in swap rates from time to time along the swap curve, and the impact that the term of the Swap will have on the City’s overall financial (e.g., interest rate, market value, counterparty, etc.) exposure shall be considered in determining the appropriate term of any Swap agreement. In connection with the issuance or carrying of bonds, the term of the Swap agreement between the City and qualified swap counterparty shall not extend beyond the final maturity date of existing City debt, or in the case of a refunding transaction, beyond the final maturity of the refunding bonds. At no time shall the total net notional amount of all Swaps, excluding any offsetting Swaps exceed the total amount of outstanding applicable bonds. Variable #8..
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27 rate debt exposure created through the use of Swaps will be consistent with the limitations set forth in the City’s adopted Debt Policy. Terms and conditions of any Swap shall be negotiated by the Director of Finance in the best interests of the City subject to the applicable legal provisions and this Swap Policy. The Swap agreements entered into between the City and each counterparty shall include payment, term, security collateral, default, remedy, termination, and other terms, conditions and provisions as the Director of Finance, in consultation with City legal counsel and its swap advisor, deems necessary or desirable.
Subject to the provisions contained herein, the City’s swap documentation and terms should include the following:
The City will be able to terminate the swap without cause subject to market termination costs.
The swap counterparty will only be able to terminate the swap if the City’s credit ratings fall below a certain pre-determined threshold and/or the City’s failure to perform, as required by the swap contract.
Governing law for Swaps will be New York, but should reflect California authorization provisions.
The specified indebtedness related to credit events in the Master Agreement should be narrowly drafted and refer only to specific debt of the issuing fund. Eligible collateral should be limited to Treasuries, Federal Agencies and any other securities which, in the City’s sole discretion, shall be deemed reasonable and creditworthy.
Collateral thresholds should be set on a sliding scale reflective of credit ratings. Termination value should be set by “market quotation” methodology. Whenever possible use a Credit Support Annex to document swap termination value collateralization procedures.
Ratings downgrade triggers.
7. Policy on Swap Counterparties
The City shall only do business with highly rated counterparties, and will structure swap agreements to protect itself from credit deterioration. All Swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at-market at any time over the term of the agreement.
A. Qualified Swap Counterparties
The City should not have an immutable credit standard. However, the City shall attempt to do business with highly rated counterparties the long-term ratings of which at the date of execution are at least “Aa” or “AA” by one or more Nationally Recognized Statistical Ratings Organizations (NRSRO) and no less than “A2” or “A” by one or more NRSRO. For lower rated counterparties, the City should seek credit enhancement in the form of:
1. Contingent swap counterparty providing support;
2. Collateral;
3. Ratings downgrade triggers; and,
4. Minimum rating threshold of “Baa3/BBB-/BBB-,” below which provisions will allow an assignment or trigger an additional termination event, with the counterparty as the affected party (i.e., the counterparty would pay market-based transaction costs). #8..
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28 In addition, the counterparty must have a demonstrated record of successfully executing swap transactions as well as creating and implementing innovative ideas in the swap market. The City shall be authorized to enter into interest rate swap transactions only with qualified swap counterparties.
8. Limitations on Counterparty Exposure
In order to diversify the City’s counterparty credit risk, and to limit the City’s credit exposure to any one counterparty, limits will be established for each counterparty based upon both the credit rating of the counterparty as well as the relative level of risk associated with each existing and proposed swap transaction. The guidelines shown in the following table provide general termination exposure guidelines with respect to whether the City should enter into an additional transaction with an existing counterparty. The City may make exceptions to the guidelines at any time to the extent that the execution of a swap achieves one or more of the goals outlined in these guidelines or provides other benefits to the City. In general, the maximum net termination exposure to any single counterparty should be set so that it does not exceed a prudent level as measured against the gross revenues, available assets or other financial resources of the City.
For example, if the City has two Swaps with one counterparty, and if the first Swap’s market value is positive $10 million and the second Swap’s market value is negative $20 million, then the City’s total net exposure to the counterparty is negative $10 million.
Such guidelines will also not mandate or otherwise force automatic termination by the City or the counterparty. Maximum net termination exposure is not intended to impose retroactively any terms and conditions on existing transactions. Such provisions will only act as guidelines in making a determination as to whether or not a proposed transaction should be executed given certain levels of existing and projected net termination exposure to a specific counterparty. Collateral posting guidelines are described in the collateral section below. The calculation of net termination exposure per counterparty will take into consideration multiple transactions, some of which may offset the overall exposure to the City.
Under this approach, the City will set limits on individual counterparty exposure based on existing as well as new or proposed transactions. The sum of the current market value and the projected exposure shall constitute the maximum net termination exposure. For outstanding transactions, current exposure will be based on the market value as of a recently completed swap valuation report provided by the City’s swap advisor. Projected exposure shall be calculated based on the swap’s potential termination value taking into account possible adverse changes in interest rates as implied by historical or projected measures of potential rate changes applied over the remaining term of the swap. For purposes of this calculation, the City shall include all existing and projected transactions of an individual counterparty and all transactions will be analyzed in aggregate such that the maximum exposure will be additive.
The exposure thresholds, which will be reviewed periodically by the City to ensure that they remain appropriate, will also be tied to long-term credit ratings of the counterparties and whether or not collateral has been posted as shown in the table below. If a counterparty has more than one rating, the lowest rating will govern for purposes of the calculating the level of exposure. If contingent swap counterparty or swap insurance is used to provide financial support for the primary counterparty, the rating of the support entity shall be used. A summary table is provided below:
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29 Credit Ratings
Maximum
Collateralized Net
Termination Value
Maximum
Uncollateralized
Net Termination Value
Maximum Net
Termination
Exposure
AAA N/A $30.0 million N/A
AA Category $30.0 million $20.0 million $30.0 million
A Category $20.0 million $10.0 million $20.0 million
Below A Category $10.0 million $5.0 million $15.0 million If the exposure limit is exceeded by counterparty, the City shall conduct a review of the exposure limit per counterparty. The City, in consultation with its bond counsel and swap advisor, shall explore remedial strategies to mitigate this exposure.
9. Benefit Expectation
Financial transactions, using Swaps or other derivative products, intended to produce the effect of a synthetic advance refunding, must generate at least 25% greater savings than the benefit threshold then in effect for fixed-rate bonds as determined by the City’s Director of Finance. (See Debt Management Policy Section X.A. Debt Service Savings). The higher savings target reflects the greater complexity and higher risk of derivative financial instruments.
In calculating the prospective savings against the target for implementing a fixed-to-variable swap, the cost of remarketing, in addition to the cost of credit and liquidity fees must be added to the variable rate representing the ten-year average of comparable variable rate securities.
10. Termination Provisions
All swap transactions shall contain provisions granting the City the right to optionally terminate a swap agreement at market at any time over the term of the agreement, but shall NOT grant this right to the counterparty. In general, exercising the right to terminate an agreement produces a benefit to the City, either through the receipt of a payment from a termination, or if the termination payment is made by the City, in conjunction with a conversion to a more beneficial (desirable) City debt obligation, as determined by the City.
11. Collateral
As part of any swap agreement, the City shall require collateralization or other credit enhancements to secure any or all swap payment obligations. As appropriate, the City, in consultation with its bond counsel and swap advisor, may require collateral or other credit enhancements to be posted by each swap counterparty under the following circumstances:
Each counterparty to the City may be required to post collateral if the highest credit rating of the counterparty or parent falls below the “Aa/AA” category. Additional collateral for further decreases in credit ratings of each counterparty shall be posted by each counterparty in accordance with the provisions contained in the collateral support agreement to each counterparty with the City.
Collateral shall be deposited with a third-party trustee, or as mutually agreed upon between the City and the counterparty.
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30 collateral will be determined and mutually agreed upon during negotiation of the swap agreement with each swap counterparty.
The market value of the collateral shall be determined on at least a weekly basis. The City shall determine the reasonable threshold limits for the initial deposit and for increments of collateral posting thereafter.
The City shall determine on a case-by-case basis whether other forms of credit enhancement, such as swap insurance, are more beneficial in lieu of the posting of additional collateral.
An evaluation of the performance of the swap relative to the rate on the bonds. A computation of the effective cost of borrowing inclusive of all fees and costs associated with the underlying financing.
12. Conformance with Dodd-Frank
It is the intent of the City to conform this Swap Policy to the requirements relating to legislation and regulations for over-the-counter derivatives transactions under Title VII of the Wall Street Transparency and Accountability Act of 2010, as supplemented and amended from time to time (herein collectively referred to as “Dodd-Frank”). Pursuant to such intent, it is the policy of the City that: (i) each swap advisor engaged or to be engaged by the City will function as the designated qualified investment representative of the City, sometimes referred to as the “Designated QIR”; (ii) each swap advisor agrees to meet and meets the requirements specified in Commodity Futures Trading Commission Regulation 23.450(b)(1) or any successor regulation thereto (herein referred to as the “Representative Regulation”) (iii) each swap advisor provide a written certification to the City to the effect that such swap advisor agrees to meet and meets the requirements specified in the Representative Regulation; and (iv) the City rely on the advice of its swap advisor with respect to transactions authorized pursuant to this Swap Policy and not rely on recommendations, if any, presented by any counterparty with respect to transactions authorized pursuant to this Swap Policy.
13. Monitoring and Reporting
At least once per year normally as part of the City’s Annual Comprehensive Financial Report (“Annual Report”), or as requested by the City Council, the Director of Finance shall prepare information describing the various Swaps and financial arrangements entered into by the City pursuant to this Swap Policy that are in effect as of the date of the report’s publication. The report shall include the following information:
1. A summary of key terms of the agreements, including notional amounts, interest rates, maturity and method of procurement.
2. The mark-to-market value of each agreement.
3. The full name, description, and credit ratings of each counterparty or the applicable guarantor.
4. The amounts that were required to be paid and received and any amounts that were actually paid and received.
5. A listing of any credit enhancement, liquidity facility, or reserves and an accounting of all costs and expenses associated with the credit enhancement, liquidity facility, or reserves.
6. The aggregate mark-to-market value and potential termination value for each swap by counterparty.
7. A discussion of other risks associated with each transaction. #8..
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31 At the end of each fiscal year, the Director of Finance shall provide to the City Council all information required for financial reporting under Government Accounting Standards Board (“GASB”) requirements as well as any other reporting or disclosure requirements. The City shall adhere to California Government Code Section 5922 and applicable GASB guidelines for reporting and disclosure guidelines for derivative products.
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DEBT MANAGEMENT POLICY
UPDATES
Finance Committee, April 13, 2022
DeAnna Christensen, Director of Finance
Sarah Hollenbeck, Managing Director, PFM Financial Advisors #8..
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● The purpose of this Policy is to organize and formalize debt issuancerelated policies and procedures for the City. ● The primary objectives of the City’s debt and financing-related activities are to maintain cost-effective access to the capital markets through the following:
○ Prudent yet flexible policies.
○ Moderate debt principal and debt service payments through effective planning and project cash management.
○ Achieve the lowest cost of borrowing.
○ Achieve the highest practical credit ratings.
BACKGROUND
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● Edits made to Section VIII.D. Maximum Annual Debt Service ○ This section was removed as it is superseded by the Debt Service Coverage section
○ The intention of the section was to limit the total annual debt service of an issuance, but the limit should really be based upon the nature of the pledged revenues, rating considerations, and other relevant factors at the time of issuance.
TERMS AND CONDITIONS OF BONDS
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● Edits made to Section VIII.J. Maximum Repayment Ratio ○ Language added to ensure the City doesn’t enter an excessive commitment ○ The ratio ensures that total future debt service payments divided by the initial principal amount shall be on more than 3:1.
TERMS AND CONDITIONS OF BONDS
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● Edits made to Section XI. Methods of Issuance and Section XI.D.
Issuance Method Analysis
○ The information in Subsection D was incorporated into the opening paragraph of the Methods of Issuance section
○ The information is more of a general concept instead of a prescriptive action.
METHODS OF ISSUANCE
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● ADDENDUM: Interest Rate Swap Policy
○ This is an additional policy that describes the City’s philosophy regarding the use of interest rate swap issuances.
○ The language in the addendum was cleared up to clarify that references to “this policy” meant the Swap Policy and not the larger Debt Policy.
POST-ISSUANCE COMPLIANCE
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QUESTIONS?
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CITY OF MODESTO
COUNCIL AGENDA REPORT
DATE OF MEETING:
June 7, 2022
Date: May 18, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: DeAnna Christensen, Director of Finance
SUBJECT: Monthly Investment Report – March 2022
CONTACT: Calogero Maniscalco, Senior Financial Analyst
[email protected], (209) 577-5219
DESCRIPTION:
Consider accepting the Monthly Investment Report for March 2022. (Funding Source: Various Funds)
STRATEGIC PLAN ELEMENT:
This item supports the City of Modesto 2020-2025 Strategic Plan focus of Governance and Service Delivery under Goal H: Achieve Financial Sustainability.
BACKGROUND:
The City’s Finance Department submits a monthly investment report to Council and the City Manager. Attached are the March investment reports (see attachment list below) generated by Public Financial Management, the City’s investment advisor. Investments in the portfolio (attachment 4) are for the City of Modesto, Modesto Public Financing Authority, Community Facilities Districts, Tuolumne River Regional Park, Successor Agency to the Redevelopment Agency, and the Modesto-Ceres Fire Protection Agency Joint Powers Authority.
DISCUSSION:
It is the function of the Finance Department to deposit and invest funds in accordance with sound treasury management and to safeguard the principal and maintain the liquidity needs of the City. The purpose of the Monthly Investment Report is to keep the City Council and City Manager informed of the City’s investment portfolio. As shown in Attachment 2, on March 31, 2022 the City had a closing market value of $414,970,167 in its investment portfolio. #9..
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City Council, June 7, 2022
Monthly Investment Report – March 2022