Agenda — Montebello City Council, February 9, 2022 (part 1 of 2)

CITY OF MONTEBELLO CITY COUNCIL

REGULAR MEETING AGENDA
WEDNESDAY, FEBRUARY 9, 2022 AT 5:00 P.M.

CITY HALL COUNCIL CHAMBERS
1600 WEST BEVERLY BOULEVARD

MONTEBELLO, CALIFORNIA

CITY COUNCIL
Kimberly A. Cobos-Cawthorne, Mayor
Angie M. Jimenez, Mayor Pro Tem
Scarlet Peralta, Councilmember
Salvador Melendez, Councilmember
David N. Torres, Councilmember

CITY MANAGER CITY TREASURER CITY ATTORNEY
René Bobadilla, City Manager Rafael Gutierrez Arnold M. Alvarez-Glasman

CITY CLERK
Christopher Jimenez

DEPARTMENT HEADS
Assistant City Manager Arlene Salazar
Fire Chief Fernando Pelaez
Police Chief Brad Keller
Director of Finance Michael Solorza
Director of Human Resources Nicholas Razo
Director of Planning/Community Development Joseph Palombi Director of Public Works James Enriquez
Director of Recreation and Community Services David Sosnowski Director of Transportation Lupita Ibarra

February 9, 2022: City Council Meeting Page 2 of 7

NOTICES
COVID-19 NOTICE: Pursuant to the Executive Order N-29-20 and No. N-35-20 from the Executive Department of the State of California and the County of Los Angeles Department of Public Health Safer at Home Order, Council Members may attend City Council meetings via teleconferencing and make public meetings accessible telephonically or electronically to all members of the public seeking to observe and address the City Council. The City Council and Staff will meet in person at City Hall but due to the increased transmission of COVID- 19 and to ensure the health and safety of the public, the Council Chambers will be closed to the public and all real time public participation, pursuant to Assembly Bill 361, will continue to occur telephonically and/or in writing until further notice. Consistent with the Executive Order, the City Council meeting will continue to be live streamed and can be watched on the City’s website at:
https://www.cityofmontebello.com/government/live-streaming.html, and may also be viewed on Spectrum Public Access Channel 3 for all Spectrum cable subscribers.

AMERICANS WITH DISABILITIES ACT: In compliance with the Americans with Disabilities Act (ADA) any person with a disability who requires special accommodations in order to participate in a meeting should contact the Administration Office at (323) 887-1363 Monday-Thursday from 7:30 a.m.-5:30 p.m. Please call 48 hours prior to the meeting to ensure that reasonable arrangements can be made to provide accessibility to this meeting (28 CFR 35.102 -35.104 ADA Title II 1203). If you require translation services, please contact the City Clerk’s office 48 hours before this meeting.

Si necesita servicios de traducción, comuníquese con la Oficina del Secretario Municipal 72 horas antes de esta reunión. 如果您需要翻译服务，请在会议前 72 小时联系市书记员办公室.

STATEMENT OF PUBLIC COMMENTS AND PARTICIPATION: Members of the public may address the City Council on Closed Session items during the “Public Comments for Closed Session Items” period. The public may also address the City Council on a ny items listed on the Agenda and on items not listed on the Agenda (Non -Agenda Items) during the “Public Comments” period. State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. In order to conduct a timely meeting, the maximum time allotted for members of the public to speak on any or all agenda items and on any Non-Agenda Item(s) shall not exceed three (3) minutes per person; the period for all “Public Comments” may be limited to 30-minutes.

Pursuant to Assembly Bill 361, for those interested in participating during the public comment period or public testimony period for public hearings of the City Council meetings , you may call in to the City Clerk’s office as listed below until the day of the meeting prior to the start of each Public Comments period, Wednesday, February 9, 2022.

The public can submit speaker card requests telephonically by calling (323) 887-1216, Staff will complete/number the speaker cards and speakers will be called in the order received during the City Council meeting – Closed Session begins at 5:00 p.m. and Regular Session begins at 6:00 p.m. The exact call back time is not predictable due to the nature of the City Council agenda. As a result, you must be available until the end of the public comments period(s).

The City has also created an email address , [email protected], where the public can submit written comments up until the day of the meeting, Wednesday, February 9, 2022 between 7:30 a.m. – 3:00 p.m. These comments will be submitted to all members of the City Council and may not be read aloud, but will be entered into the record of the proceedings to the extent they relate to matter s listed on the posted agenda or otherwise address matters/issues within the subject matter jurisdiction of the City Council. Any requests to provide public comment which is submitted after the deadlines indicated above will not be submitted to the City Council until the after the meeting, with the exception of non-agenda written item comments which will be held over for the next regularly scheduled meeting.

AGENDA MATERIALS: The agenda/ agenda packet are available for public inspection at City’s website at:
https://www.cityofmontebello.com/council-agendas.html. The agenda cover sheets may also be emailed upon request.

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IN CONSIDERATION OF OTHERS, PLEASE TURN OFF, OR MUTE, ALL CELL PHONES AND PAGERS

THANK YOU FOR YOUR COOPERATION

OPENING CEREMONIES

CALL TO ORDER

ROLL CALL

PUBLIC COMMENTS FOR CLOSED SESSION ITEMS
Pursuant to AB 361 and the guidelines specifically stated in this agenda above, at this time, the general public may address the City Council on Closed Session Items. Please be aware that th e maximum time allotted for members of the public to speak on Closed Session Items shall not exceed three (3) minutes per person. State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the Mayor.

CLOSED SESSION – 5:00 P.M.

The City Attorney shall provide a briefing on the item listed for Closed Session as follows:

1. T

HREAT TO PUBLIC SERVICES OR FACILITIES
Government Code Section 54957
Consultation with City Manager, Police Chief, City Attorney and other related City officials.

2. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Government Code Section 54956.9(d)(2)
Threat of litigation – One matter related to the CVRA

3. CO
NFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Government Code Section 54956.9(d)(1)
Application of San Gabriel Valley Water Company (U337W) for an Order Authorizing the Purchase of the City of Montebello’s Water System Assets and related Approvals. PUC Application 20-10-004

4. CO

NFERENCE WITH LABOR NEGOTIATORS
Government Code Section 54957.6
Agency Negotiators: Rene Bobadilla, Nicholas Razo
Employee Groups: Various City employee groups including but not limited to MPMA, MFMA, MMMA, MSA, MPOA, MCEA, MFA and unrepresented
employees.

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REGULAR SESSION – NO LATER THAN 6:00 P.M.

CLOSED SESSION REPORT

INVOCATION

PLEDGE OF ALLEGIANCE

CORRECTIONS TO THE AGENDA – CITY MANAGER

CEREMONIAL/PRESENTATIONS

5. RECOGNITION OF UNITED STATES MARINE CORPS RECRUITING SUBSTATION OFFICE OF THE YEAR AWARD FOR 2021

6. RECOGNITION OF BLACK HISTORY MONTH

7. RECOGNITION OF AMERICAN HEART MONTH

PUBLIC COMMENTS ON NON-AGENDA AND AGENDA ITEMS (30 MINUTES) Pursuant to AB 361 and the guidelines specifically stated in this agenda above, at this time, the general public may address the City Council on both non-agenda and agenda items. Please be aware that the maximum time allotted for members of the public to speak shall not exceed three (3) minutes per speaker. State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the Mayor.

STAFF COMMUNICATIONS ON ITEMS OF COMMUNITY INTEREST

PUBLIC HEARING

8. CALIFORNIA VOTING RIGHTS ACT (“CVRA”) TRANSITION FROM AN “AT-LARGE” TO A “BY- DISTRICT” ELECTION SYSTEM – PUBLIC HEARING NO. 3

RECOMMENDATION: It is recommended that the City Council:

1) Review draft City Council district maps submitted by the public and ARDA Demographics; and
2) Receive input from the public regarding the draft City Council district maps submitted by the public and ARDA Demographics; and
3) Take such additional, related, action that may be desirable.

February 9, 2022: City Council Meeting Page 5 of 7

REGULAR BUSINESS

9. RECEIVE AND FILE THE FISCAL YEAR 2020-21 ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR)

RECOMMENDATION: It is recommended that the City Council:

1) Receive and file the Fiscal Year 2020 -21 Annual Comprehensive Financial Report (ACFR) and presentation.

10. FISCAL YEAR 2021-22 SECOND QUARTER BUDGET REPORT

RECOMMENDATION: It is recommended that the City Council:

1) Receive and file this agenda report and the presentation on the Fiscal Year 2021 -22 Second Quarter Budget report; and,
2) Amend the budget by increasing appropriations by the listed amounts in the various accounts listed on Attachment B; and,
3) Update the Table of Organization/Master Position Control by adding two (2) Deputy Director positions in the Transit Department (Attachment C); and, 4) Take whatever additional actions necessary.

CONSENT CALENDAR
ALL MATTERS LISTED U NDER THE CONSENT CAL ENDAR ARE CONSIDERED TO BE ROUTINE. ANY ITEMS A COUNCILMEMBER WISHES TO DISCUSS SHOULD BE DESIGNATED AT THIS TIME. ALL OTHER ITEMS MAY BE APPROVED IN A SINGLE MOTION. SUCH APPROVAL WILL ALSO WAIVE THE READING OF ANY ORDINANCE.

11. UPDATED REPORT OF EM ERGENCY REPAIR AND REPLACEMENT OF THE BEACH STREET

STORM DRAIN

RECOMMENDATION: It is recommended that the City Council:

1) Receive and file the City Manager’s updated report of the emergency repair of the Beach Street Storm Drain pursuant to Montebello Municipal Code Section 3.20.140 and Public Contracts Code Section 22035; and
2) Take such additional, related, action that may be desirable.

12. COMMUNITY GARDEN AT GRANT REA PARK

RECOMMENDATION: It is recommended that the City Council:

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1) Approve an Agreement No. 3955 with the Los Angeles Community Garden Council (“LACGC”) for a three -year term to manage a community garden at Grant Rea Park; and 2) Amend the Fiscal Year 2021-22 budget by increasing appropriations in Account Nos. 221- 70-720-6040.10 by $41,000; 221- 70-720-6040.96 by $25,000 and 221 -70-720-7116 by $75,000 (Measure A, Parks and Rec reation, Parks Maintenance, Outside Contracts; Engineering Design Services; Improvements Other Than Building; and 3) Take such additional, related, action that may be desirable.

13. APPROVE BLANKET PURC HASE ORDER WITH PDQ RENTAL CENTER FOR PURCHASE OR

RENTALS OF CITYWIDE EQUIPMENT

RECOMMENDATION: It is recommended that the City Council:

1) Approve a blanket purchase order with PDQ Rental Center in a total not -to-exceed amount of $75,000, for the purchase or rental of citywide equipment rentals; and 2) Take such additional, related, action that may be desirable.

14. WAIVE SECOND READING AND ADOPT ORDINANCE NO. 2447 AMENDING MO NTEBELLO MUNICIPAL CODE CHAPTERS 3.16 “CITY FUNDS ,” 3.20 “PURCHASING SYSTEM,” AND 3.21 “CONTRACTS FOR PROFE SSIONAL AND SPECIAL SERVICES” TO INCORPORATE REVISION S AND RECOMMENDATIONS MADE IN THE STATE AUDITORS REPORT OF 2021

RECOMMENDATION: It is recommended that the City Council:

1) Waive Second Reading and adopt Ordinance No. 2447 Amending Chapters 3.16 “City Funds,” 3.20 “Purchasing System,” and 3.21 “Contracts for Professional and Special Services” of the Montebello Municipal Code Relating; and 2) Take such additional, related, action that may be desirable.

15. APPROVE PURCHASE OF A FIRE COMMAND VEHICLE AND AMEND THE FIS CAL YEAR 2021- 22 BUDGET

RECOMMENDATION: It is recommended that the City Council:

1) Authorize the purchase and replacement of the Fire Command Vehicle using pre -bid Sourcewell Contract #0011620-NCL awarded to NCL Government Capital; and 2) Amend the Fiscal Year 2021 -22 budget by increasing appropriations by $221,000 in Account No. 100--85-860-6082(General Fund, Fire, Suppression, Vehicle Purchases); and 3) Take such additional, related actions necessary to actions to effectively and efficiently procure the Fire Command Vehicle.

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16. PAYMENT OF BILLS: RESOLUTION NO. 22-08 APPROVING THE CITY W ARRANT REGISTER OF DEMANDS DATED FEBRUARY 9, 2022

RECOMMENDATION: Adopt Resolution No. 22-08 approving the Warrant Register dated February 9, 2022.

17. APPROVAL OF MINUTES – SPECIAL MEETING MAY 1, 2021; CITY COUNCIL MEETING MAY 12, 2021; CITY COUNCIL MEETING MAY 26, 2021; ADJOURNED CITY COUNCIL MEETING JUNE 1, 2021; JOINT SPECIAL CITY COUNCIL AND PLANNING MEETING JUNE 1, 2021; ADJOURNED CITY COUNCIL MEETING JUNE 3, 2021; AND CITY COUNCIL MEET ING JUNE 9, 2021.

RECOMMENDATION: Approve said minutes as written.

AB 1234 TRAVEL REPORTS
Members of the City Council will provide a brief report on meetings attended at the expense of the local agency as required by Government Code Section 53232.3(d).

COUNCIL ORALS
Council member announcements; requests for future agenda items; conference/meetings reports.

1. Councilmember Torres
a. Comments on Black History Month
b. Request for financial reports
c. Request for report on language access plan status

2. Councilmember Melendez

3. Councilmember Peralta

4. Mayor Pro Tem Jimenez

5. Mayor Cobos-Cawthorne

ADJOURNMENT
The City of Montebello will adjourn to the next Regular Meeting on February 23, 2022 at 5:00 p.m. which can be live streamed at www.cityofmontebello.com (Click on Live Stream).

I, Alicia Fernandez, Deputy City Clerk for the City of Montebello hereby certify that a copy of this agenda has been posted on or before Sunday, February 6, 2022 5:00 p.m.

_____________________________________________
Alicia Fernandez, Deputy City Clerk

ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Arnold M. Alvarez-Glasman, City Attorney
SUBJECT: California Voting Rights Act (“CVRA”) Transition From an “At -Large” to a “By-District” Election System – Public Hearing 3
DATE: February 9, 2022
RECOMMENDATION (S):

It is recommended that the City Council:
1) Review draft City Council district maps submitted by the public and ARDA Demographics; and
2) Receive input from the public regarding the draft City Council district maps submitted by the public and ARDA Demographics;
and
3) Take such additional, related, action that may be desirable.

FISCAL IMPACT
None.

BACKGROUND
Members of the Montebello City Council are currently elected in “at -large” elections, in which each City Councilmember is elected by the registered voters of the entire City and the next regular election is to take place on November 8, 2022.

The City received a petition on March 15, 2021 from Scott J. Rafferty (“Petition”) alleging that the City’s at -large election system violates Elections Code, Sections 14027 and 14028, (the California Voting Rights Act or “CVRA”) and requesting that the City voluntarily change its at-large system of electing Councilmembers through the 8 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 California Voting Rights Act (“CVRA”) Transition From an “At-Large” to a “By- District” Election System – Public Hearing 3

Page 2 of 2 ends

collaborative process set forth in Elections Code, Section 10010. On May 26, 2021, the City of Montebello adopted a Resolution of Intention stating the intention of the City to transition from an at-large election process to a by-district election process.

DISCUSSION

The CVRA was enacted in 2001 to implement the California constitutional guarantees of equal protection and the right to vote. The CVRA is broader than the Federal Voting Rights Act and provides a private right of action to members of a protected class where, because of “dilution or the abridgment of the rights of voters,” an at-large election system “impairs the ability of a protected class to elect candidates of its choic e or its ability to include the outcome of an election.” A violation of CVRA is established if racially polarized voting occurs in elections. “Racially polarized voting” means voting where there is a difference between candidates or other electoral choices preferred by voters in a protected class and those preferred by voters in the rest of the electorate.” Intent to discriminate is not necessary to find evidence of racially polarized voting.

Under the CVRA, a city is required to hold at least two (2) publ ic hearings prior to the drawing of draft City Council district maps, and at least two (2) public hearings after the draft City Council district maps are drawn, where the City Council will receive public input on such maps.

At its meeting on October 13, 2021, the City Council held its first public hearing to receive comment and input from the residents of Montebello with regard to the transition from an at-large election process to a by-district process. The City held its second public hearing for November 13, 2021 to continue receiving input from the public.

SUMMARY

Staff recommends that the City Council review draft City Council district maps submitted by the public and ARDA Demographics and receive input from the public r egarding the same.

ATTACHMENT (S):

A. Attachment A – Submitted Draft City Council District Maps

[DOCUMENT TITLE]
[Document subtitle]

MONTEBELLO

DISTRICT

PROPOSALS WITH

DETAILED

DEMOGRAPHIC
DATA

ATTACHMENT A
Demographer Proposal 1
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 450 Largest Negative Deviation: -501 Overall Range in Deviation: 951 Overall Range in Deviation Percentage: 7.56% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,075 12,576 -501 -3.98 2 12,515 12,576 -61 -0.49 3 12,846 12,576 270 2.15 4 12,417 12,576 -159 -1.26 5 13,026 12,576 450 3.58

Demographer Proposal 1 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,075 1,274 10.55% 6,295 52.13% 119 0.99% 4,167 34.51% 220 1.82% 2 12,515 712 5.69% 10,509 83.97% 87 0.70% 1,009 8.06% 198 1.58% 3 12,846 1,406 10.95% 9,618 74.87% 113 0.88% 1,492 11.61% 217 1.69% 4 12,417 581 4.68% 11,082 89.25% 108 0.87% 504 4.06% 142 1.14% 5 13,026 500 3.84% 11,673 89.61% 97 0.74% 623 4.78% 133 1.03% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 8,678 1,013 11.67% 4,142 47.73% 120 1.38% 3,370 38.83% 33 0.39% 2 7,697 533 6.92% 6,659 86.51% 14 0.18% 458 5.95% 33 0.44% 3 7,989 1,391 17.41% 5,364 67.14% 299 3.74% 790 9.89% 145 1.82% 4 6,494 497 7.65% 5,628 86.66% 100 1.54% 241 3.71% 28 0.44% 5 7,685 335 4.36% 6,403 83.32% 14 0.18% 915 11.91% 18 0.23% Total 38,543 3,769 28,196 547 5,774 257 Demographer Proposal 2
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 450 Largest Negative Deviation: -332 Overall Range in Deviation: 782 Overall Range in Deviation Percentage: 6.22% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,282 12,576 -294 -2.34 2 12,244 12,576 -332 -2.64 3 12,692 12,576 116 0.92 4 12,635 12,576 59 0.47 5 13,026 12,576 450 3.58

Demographer Proposal 2 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,282 1,292 10.52% 6,492 52.61% 119 0.97% 4,188 34.10% 191 1.80% 2 12,244 688 5.62% 10,298 84.11% 83 0.68% 977 7.98% 198 1.61% 3 12,692 1,391 10.96% 9,490 74.77% 113 0.89% 1,481 11.67% 217 1.71% 4 12,635 602 4.76% 11,254 89.07% 112 0.89% 526 4.16% 141 1.12% 5 13,026 500 3.84% 11,673 89.61% 97 0.74% 623 4.78% 133 1.03% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 8,830 1,029 11.65% 4,238 47.99% 124 1.40% 3,408 38.60% 31 0.36% 2 7,480 490 6.55% 6,529 87.29% 10 0.13% 417 5.57% 34 0.46% 3 7,890 1,378 17.46% 5,282 66.95% 299 3.79% 788 9.99% 143 1.81% 4 6,658 537 8.07% 5,744 86.27% 100 1.50% 246 3.69% 31 0.47% 5 7,685 335 4.36% 6,403 83.32% 14 0.18% 915 11.91% 18 0.23% Total 38,543 3,769 28,196 547 5,774 257 Demographer Proposal 3
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 283 Largest Negative Deviation: -457 Overall Range in Deviation: 740 Overall Range in Deviation Percentage: 5.88% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,119 12,576 -457 -3.63 2 12,859 12,576 283 2.25 3 12,379 12,576 -197 -1.57 4 12,834 12,576 258 2.05 5 12,688 12,576 112 0.89

Demographer Proposal 3 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,119 1,344 11.09% 6,379 52.64% 92 0.76% 4,090 33.75% 214 1.76% 2 12,859 758 5.89% 10,585 82.32% 103 0.80% 1,183 9.20% 230 1.79% 3 12,379 1,107 8.94% 9,808 79.23% 119 0.96% 1,161 9.38% 184 1.49% 4 12,834 803 6.26% 11,067 86.23% 52 0.41% 778 6.06% 134 1.04% 5 12,688 461 3.63% 11,338 89.36% 158 1.25% 583 4.59% 148 1.17% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 8,829 1,210 13.70% 4,269 48.35% 111 1.26% 3,209 36.35% 30 0.34% 2 7,890 598 7.58% 6,562 83.17% 39 0.49% 658 8.34% 33 0.42% 3 7,243 1,007 13.90% 5,160 71.24% 267 3.69% 658 9.08% 151 2.09% 4 7,207 675 9.36% 6,047 83.90% 41 0.57% 409 5.67% 35 0.50% 5 7,374 279 3.78% 6,158 83.51% 89 1.21% 840 11.39% 8 0.11% Total 38,543 3,769 28,196 547 5,774 257 Demographer Proposal 4: 4 District Map
TOTAL Population: 62,879 Mean Target Population: 15,720 Largest Positive Deviation: 583 Largest Negative Deviation: -637 Overall Range in Deviation: 1,220 Overall Range in Deviation Percentage: 7.76% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 15,566 15,720 -154 -0.98 2 15,927 15,720 207 1.32 3 15,083 15,720 -637 -4.05 4 16,303 15,720 583 3.71

Demographer Proposal 4 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 15,566 1,785 11.47% 8,699 55.88% 130 0.84% 4,677 30.05% 275 1.76% 2 15,927 1,022 6.42% 13,478 84.62% 99 0.62% 1,103 6.93% 225 1.41% 3 15,083 1,091 7.23% 12,361 81.95% 124 0.82% 1,285 8.52% 222 1.48% 4 16,303 575 3.53% 14,639 89.79% 171 1.05% 730 4.48% 188 1.15% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 11,101 1,545 13.92% 5,650 50.90% 157 1.41% 3,699 33.32% 50 0.45% 2 9,898 863 8.72% 8,491 85.79% 35 0.35% 459 4.64% 50 0.50% 3 8,203 966 11.78% 6,190 75.46% 266 3.24% 633 7.72% 148 1.80% 4 9,341 395 4.23% 7,865 84.20% 89 0.95% 983 10.52% 9 0.10% Total 38,543 3,769 28,196 547 5,774 257 Demographer Proposal 5: 6 District Map
TOTAL Population: 62,879 Mean Target Population: 10,480 Largest Positive Deviation: 498 Largest Negative Deviation: -495 Overall Range in Deviation: 993 Overall Range in Deviation Percentage: 9.48% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 10,214 10,480 -266 -2.54 2 10,514 10,480 34 0.32 3 10,659 10,480 179 1.71 4 9,985 10,480 -495 -4.72 5 10,978 10,480 498 4.75 6 10,529 10,480 49 0.47

Demographer Proposal 5 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 10,214 1,038 10.16% 5,116 50.09% 100 0.98% 3,764 36.85% 196 1.92% 2 10,514 547 5.20% 8,794 83.64% 79 0.75% 906 8.62% 188 1.79% 3 10,659 1,218 11.43% 7,780 72.99% 101 0.95% 1,375 12.90% 185 1.73% 4 9,985 923 9.24% 8,165 81.77% 53 0.53% 745 7.46% 99 1.00% 5 10,978 417 3.80% 9,738 88.70% 56 0.51% 660 6.01% 107 0.98% 6 10,529 330 3.13% 9,584 91.02% 135 1.28% 345 3.28% 135 1.29% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 7,260 894 12.31% 3,208 44.19% 99 1.36% 3,028 41.71% 31 0.43% 2 6,543 363 5.55% 5,736 87.67% 10 0.15% 400 6.11% 34 0.52% 3 7,085 1,293 18.25% 4,767 67.28% 219 3.09% 718 10.13% 88 1.25% 4 6,386 748 11.71% 4,904 76.79% 130 2.04% 537 8.41% 67 1.05% 5 5,554 166 2.99% 4,871 87.70% 4 0.07% 492 8.86% 21 0.38% 6 5,715 305 5.34% 4,710 82.41% 85 1.49% 599 10.48% 16 0.28% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 1
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 590 Largest Negative Deviation: -638 Overall Range in Deviation: 1,228 Overall Range in Deviation Percentage: 9.76% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 11,938 12,576 -638 -5.07 2 12,272 12,576 -304 -2.42 3 13,166 12,576 590 4.69 4 12,475 12,576 -101 -0.80 5 13,028 12,576 452 3.59

Public Submission 1 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 11,938 670 5.61% 9,847 82.48% 99 0.83% 1,117 9.36% 205 1.72% 2 12,272 1,375 11.20% 6,503 52.99% 91 0.74% 4,091 33.34% 212 1.73% 3 13,166 558 4.24% 11,726 89.06% 118 0.90% 624 4.74% 140 1.06% 4 12,475 436 3.49% 11,281 90.43% 118 0.95% 490 3.93% 150 1.20% 5 13,028 1,434 11.01% 9,820 75.38% 98 0.75% 1,473 11.31% 203 1.55% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 7,372 502 6.81% 6,185 83.90% 35 0.47% 619 8.40% 31 0.42% 2 8,919 1,236 13.86% 4,345 48.72% 118 1.32% 3,169 35.53% 51 0.57% 3 7,575 384 5.07% 6,357 83.92% 37 0.49% 744 9.82% 53 0.70% 4 6,196 300 4.84% 5,390 86.99% 101 1.63% 390 6.29% 15 0.25% 5 8,481 1,347 15.88% 5,919 69.79% 256 3.02% 852 10.04% 107 1.27% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 2
TOTAL Population: 62,879 Mean Target Population: 10,480 Largest Positive Deviation: 517 Largest Negative Deviation: -487 Overall Range in Deviation: 1,004 Overall Range in Deviation Percentage: 9.58% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 10,418 10,480 -62 -0.59 2 10,997 10,480 517 4.93 3 9,993 10,480 -487 -4.65 4 10,514 10,480 34 0.32 5 10,940 10,480 460 4.39 6 10,017 10,480 -463 -4.42

Public Submission 2 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 10,418 502 4.82% 9,266 88.94% 106 1.02% 434 4.17% 110 1.05% 2 10,997 443 4.03% 9,716 88.35% 86 0.78% 607 5.52% 145 1.32% 3 9,993 689 6.89% 8,641 86.47% 52 0.52% 522 5.22% 89 0.90% 4 10,514 547 5.20% 8,794 83.64% 79 0.75% 906 8.62% 188 1.79% 5 10,940 1,211 11.07% 6,176 56.45% 88 0.80% 3,257 29.77% 208 1.91% 6 10,017 1,081 10.79% 6,584 65.73% 113 1.13% 2,069 20.65% 170 1.70% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 5,379 281 5.22% 4,629 86.06% 114 2.12% 336 6.25% 19 0.35% 2 6,495 295 4.54% 5,357 82.48% 14 0.22% 815 12.55% 14 0.21% 3 6,200 740 11.93% 4,848 78.19% 185 2.98% 350 5.65% 77 1.25% 4 6,543 363 5.55% 5,736 87.67% 10 0.15% 400 6.11% 34 0.52% 5 7,337 1,055 14.38% 3,722 50.73% 103 1.40% 2,434 33.17% 23 0.32% 6 6,589 1,035 15.71% 3,904 59.25% 121 1.84% 1,439 21.84% 90 1.36% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 3
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 590 Largest Negative Deviation: -638 Overall Range in Deviation: 1,228 Overall Range in Deviation Percentage: 9.76% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 11,938 12,576 -638 -5.07 2 12,272 12,576 -304 -2.42 3 13,166 12,576 590 4.69 4 12,475 12,576 -101 -0.80 5 13,028 12,576 452 3.59

Public Submission 3 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,592 1,401 11.13% 6,732 53.46% 114 0.91% 4,124 32.75% 221 1.75% 2 12,548 714 5.69% 10,436 83.17% 97 0.77% 1,078 8.59% 223 1.78% 3 12,561 1,399 11.14% 9,408 74.90% 97 0.77% 1,468 11.69% 189 1.50% 4 12,512 463 3.70% 11,355 90.75% 54 0.43% 513 4.10% 127 1.02% 5 12,666 496 3.92% 11,246 88.79% 162 1.28% 612 4.83% 150 1.18% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 9,066 1,243 13.71% 4,448 49.06% 118 1.30% 3,198 35.27% 59 0.66% 2 7,584 508 6.70% 6,477 85.40% 42 0.55% 529 6.98% 28 0.37% 3 8,158 1,169 14.33% 5,722 70.14% 268 3.28% 891 10.92% 108 1.33% 4 6,230 500 8.03% 5,447 87.43% 30 0.48% 195 3.13% 58 0.93% 5 7,505 349 4.65% 6,102 81.31% 89 1.19% 961 12.80% 4 0.05% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 4
TOTAL Population: 62,879 Mean Target Population: 8,983 Largest Positive Deviation: 14 Largest Negative Deviation: -10 Overall Range in Deviation: 24 Overall Range in Deviation Percentage: 0.27% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 8,997 8,983 14 0.16 2 8,973 8,983 -10 -0.11 3 8,977 8,983 -6 -0.07 4 8,995 8,983 12 0.13 5 8,982 8,983 -1 -0.01 6 8,979 8,983 -4 -0.04 7 8,976 8,983 -7 -0.08

Public Submission 4 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 8,997 372 4.13% 8,102 90.05% 101 1.12% 324 3.60% 98 1.10% 2 8,973 375 4.18% 7,890 87.93% 78 0.87% 520 5.80% 110 1.22% 3 8,977 347 3.87% 8,116 90.41% 72 0.80% 346 3.85% 96 1.07% 4 8,995 856 9.52% 7,133 79.30% 62 0.69% 824 9.16% 120 1.33% 5 8,982 469 5.22% 7,548 84.03% 72 0.80% 759 8.45% 134 1.50% 6 8,979 985 10.97% 5,444 60.63% 55 0.61% 2,313 25.76% 182 2.03% 7 8,976 1,069 11.91% 4,944 55.08% 84 0.94% 2,709 30.18% 170 1.89% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 4,521 238 5.26% 3,920 86.71% 100 2.21% 246 5.44% 17 0.38% 2 5,544 242 4.36% 4,533 81.76% 14 0.25% 740 13.35% 15 0.28% 3 4,448 342 7.69% 3,760 84.53% 59 1.33% 221 4.97% 66 1.48% 4 6,060 817 13.48% 4,398 72.57% 201 3.32% 594 9.80% 50 0.83% 5 5,704 296 5.19% 5,020 88.00% 8 0.14% 352 6.17% 28 0.50% 6 5,955 909 15.26% 3,256 54.68% 73 1.23% 1,674 28.11% 43 0.72% 7 6,311 925 14.66% 3,309 52.43% 92 1.46% 1,947 30.85% 38 0.60% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 5
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 385 Largest Negative Deviation: -457 Overall Range in Deviation: 842 Overall Range in Deviation Percentage: 6.70% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,777 12,576 201 1.60 2 12,720 12,576 144 1.15 3 12,961 12,576 385 3.06 4 12,302 12,576 -274 -2.18 5 12,119 12,576 -457 -3.63

Public Submission 5 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,777 439 3.44% 11,460 89.69% 146 1.14% 563 4.41% 169 1.32% 2 12,720 848 6.67% 10,864 85.41% 113 0.89% 774 6.08% 121 0.95% 3 12,961 1,182 9.12% 10,058 77.60% 86 0.66% 1,431 11.04% 204 1.58% 4 12,302 660 5.36% 10,416 84.67% 87 0.71% 937 7.62% 202 1.64% 5 12,119 1,344 11.09% 6,379 52.64% 92 0.76% 4,090 33.75% 214 1.76% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 6,906 370 5.36% 5,571 80.67% 85 1.23% 868 12.57% 12 0.17% 2 7,636 707 9.26% 6,054 79.28% 267 3.50% 467 6.12% 141 1.84% 3 7,694 1,059 13.76% 5,716 74.29% 49 0.64% 850 11.05% 20 0.26% 4 7,478 423 5.66% 6,586 88.07% 35 0.47% 400 5.35% 34 0.45% 5 8,829 1,210 13.70% 4,269 48.35% 111 1.26% 3,189 36.12% 50 0.57% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 6
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 484 Largest Negative Deviation: -254 Overall Range in Deviation: 738 Overall Range in Deviation Percentage: 5.87% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,506 12,576 -70 -0.56 2 13,060 12,576 484 3.85 3 12,653 12,576 77 0.61 4 12,322 12,576 -254 -2.02 5 12,338 12,576 -238 -1.89

Public Submission 6 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,506 408 3.26% 11,290 90.28% 146 1.17% 493 3.94% 169 1.35% 2 13,060 947 7.25% 11,022 84.40% 114 0.87% 852 6.52% 125 0.96% 3 12,653 1,075 8.50% 10,217 80.75% 66 0.52% 1,141 9.02% 154 1.21% 4 12,322 665 5.40% 10,256 83.23% 99 0.80% 1,077 8.74% 225 1.83% 5 12,338 1,378 11.17% 6,392 51.81% 99 0.80% 4,232 34.30% 237 1.92% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 6,855 370 5.40% 5,525 80.60% 85 1.24% 864 12.60% 11 0.16% 2 7,895 785 9.94% 6,348 80.41% 219 2.77% 445 5.64% 98 1.24% 3 7,326 838 11.44% 5,633 76.89% 121 1.65% 660 9.01% 74 1.01% 4 7,485 505 6.75% 6,377 85.20% 39 0.52% 535 7.15% 29 0.38% 5 8,982 1,271 14.15% 4,313 48.02% 83 0.92% 3,270 36.41% 45 0.50% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 7
TOTAL Population: 62,879 Mean Target Population: 15,720 Largest Positive Deviation: 557 Largest Negative Deviation: -301 Overall Range in Deviation: 858 Overall Range in Deviation Percentage: 5.46% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 16,277 15,720 557 3.54 2 15,622 15,720 -98 -0.62 3 15,419 15,720 -301 -1.91 4 15,561 15,720 -159 -1.01

Public Submission 7 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 16,277 1,805 11.09% 9,179 56.39% 136 0.84% 4,843 29.75% 314 1.93% 2 15,622 1,080 6.91% 12,798 81.92% 108 0.69% 1,407 9.01% 229 1.47% 3 15,419 1,004 6.51% 13,314 86.35% 114 0.74% 804 5.21% 183 1.19% 4 15,561 584 3.75% 13,886 89.24% 166 1.07% 741 4.76% 184 1.18% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 11,239 1,658 14.75% 5,787 51.49% 135 1.20% 3,603 32.07% 56 0.49% 2 10,148 925 9.11% 8,342 82.20% 35 0.34% 795 7.83% 51 0.52% 3 8,295 791 9.54% 6,684 80.58% 288 3.47% 393 4.74% 139 1.67% 4 8,861 395 4.46% 7,383 83.32% 89 1.00% 983 11.09% 11 0.13% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 8
TOTAL Population: 62,879 Mean Target Population: 15,720 Largest Positive Deviation: 418 Largest Negative Deviation: -650 Overall Range in Deviation: 1,068 Overall Range in Deviation Percentage: 6.79% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 15,070 15,720 -650 -4.13 2 16,138 15,720 418 2.66 3 16,110 15,720 390 2.48 4 15,561 15,720 -159 -1.01

Public Submission 8 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 15,070 1,838 12.20% 8,942 59.34% 129 0.86% 3,871 25.69% 290 1.76% 2 16,138 1,021 6.33% 12,527 77.62% 111 0.69% 2,211 13.70% 268 1.41% 3 16,110 1,030 6.39% 13,822 85.80% 118 0.73% 972 6.03% 168 1.48% 4 15,561 584 3.75% 13,886 89.24% 166 1.07% 741 4.76% 184 1.15% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 10,095 1,602 15.87% 5,605 55.52% 163 1.61% 2,656 26.31% 69 0.69% 2 10,285 815 7.92% 7,788 75.72% 57 0.55% 1,589 15.45% 36 0.36% 3 9,302 957 10.29% 7,420 79.77% 238 2.56% 546 5.87% 141 1.51% 4 8,861 395 4.46% 7,383 83.32% 89 1.00% 983 11.09% 11 0.13% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 9
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 435 Largest Negative Deviation: -457 Overall Range in Deviation: 892 Overall Range in Deviation Percentage: 7.09% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,855 12,576 279 2.22 2 13,011 12,576 435 3.46 3 12,541 12,576 -35 -0.28 4 12,353 12,576 -223 -1.77 5 12,119 12,576 -457 -3.63

Public Submission 9 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,855 512 3.98% 11,412 88.77% 162 1.26% 612 4.76% 157 1.23% 2 13,011 481 3.70% 11,816 90.82% 80 0.61% 507 3.90% 127 0.97% 3 12,541 1,435 11.44% 9,369 74.71% 88 0.70% 1,460 11.64% 189 1.51% 4 12,353 701 5.67% 10,201 82.58% 102 0.83% 1,126 9.12% 223 1.80% 5 12,119 1,344 11.09% 6,379 52.64% 92 0.76% 4,090 33.75% 214 1.76% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 7,605 355 4.67% 6,185 81.33% 89 1.17% 970 12.75% 6 0.08% 2 6,295 344 5.46% 5,660 89.91% 55 0.87% 164 2.61% 72 1.15% 3 8,225 1,336 16.24% 5,711 69.43% 253 3.08% 826 10.04% 99 1.21% 4 7,589 524 6.90% 6,371 83.95% 39 0.51% 625 8.24% 30 0.40% 5 8,829 1,210 13.70% 4,269 48.35% 111 1.26% 3,189 36.12% 50 0.57% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 10
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 597 Largest Negative Deviation: -542 Overall Range in Deviation: 1,139 Overall Range in Deviation Percentage: 9.06% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 12,889 12,576 313 2.49 2 12,190 12,576 -386 -3.07 3 13,173 12,576 597 4.75 4 12,034 12,576 -542 -4.31 5 12,593 12,576 17 0.14

Public Submission 10 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 12,889 514 3.99% 11,438 88.74% 162 1.26% 614 4.76% 161 1.25% 2 12,190 503 4.13% 11,013 90.34% 44 0.36% 514 4.22% 116 0.95% 3 13,173 819 6.22% 10,904 82.78% 97 0.74% 1,171 8.89% 182 1.37% 4 12,034 1,461 12.14% 8,909 74.03% 95 0.79% 1,383 11.49% 186 1.55% 5 12,593 1,176 9.34% 6,913 54.90% 126 1.00% 4,113 32.66% 265 2.10% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 7,623 356 4.67% 6,202 81.36% 89 1.17% 970 12.72% 11 0.08% 2 6,147 498 8.10% 5,414 88.07% 25 0.41% 184 2.99% 26 0.43% 3 8,383 458 5.46% 7,195 85.83% 35 0.42% 659 7.86% 36 0.43% 4 7,898 1,360 17.22% 5,204 65.89% 350 4.43% 845 10.70% 139 1.76% 5 8,492 1,097 12.92% 4,181 49.23% 48 0.56% 3,116 36.69% 50 0.60% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 11
TOTAL Population: 62,879 Mean Target Population: 8,983 Largest Positive Deviation: 247 Largest Negative Deviation: -370 Overall Range in Deviation: 617 Overall Range in Deviation Percentage: 6.87% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 9,176 8,983 193 2.15 2 8,613 8,983 -370 -4.12 3 9,045 8,983 62 0.69 4 9,142 8,983 159 1.77 5 9,036 8,983 53 0.59 6 9,230 8,983 247 2.75 7 8,637 8,983 -346 -3.85

Public Submission 11 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 9,176 1,180 12.86% 5,607 61.11% 77 0.84% 2,145 23.38% 167 1.81% 2 8,613 813 9.44% 6,922 80.37% 65 0.75% 705 8.19% 108 1.25% 3 9,045 479 5.30% 8,024 88.71% 69 0.76% 380 4.20% 93 1.03% 4 9,142 924 10.11% 4,981 54.48% 70 0.77% 2,977 32.56% 190 2.08% 5 9,036 434 4.80% 7,603 84.14% 70 0.77% 780 8.63% 149 1.66% 6 9,230 295 3.20% 8,294 89.86% 148 1.60% 377 4.08% 116 1.26% 7 8,637 348 4.03% 7,746 89.68% 25 0.29% 431 4.99% 87 1.01% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 6,260 1,051 16.79% 3,561 56.88% 124 1.98% 1,470 23.48% 54 0.87% 2 5,859 626 10.68% 4,387 74.88% 229 3.91% 529 9.03% 88 1.50% 3 4,654 573 12.31% 3,802 81.69% 51 1.10% 167 3.59% 61 1.31% 4 6,261 873 13.94% 3,060 48.87% 44 0.70% 2,263 36.14% 21 0.35% 5 5,503 245 4.45% 4,878 88.64% 10 0.18% 345 6.27% 25 0.46% 6 5,223 261 5.00% 4,206 80.53% 87 1.67% 665 12.73% 4 0.07% 7 4,783 140 2.93% 4,302 89.94% 2 0.04% 335 7.00% 4 0.09% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 13
TOTAL Population: 62,879 Mean Target Population: 12,576 Largest Positive Deviation: 578 Largest Negative Deviation: -650 Overall Range in Deviation: 1,228 Overall Range in Deviation Percentage: 9.76% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 11,926 12,576 -650 -5.17 2 12,212 12,576 -364 -2.89 3 12,732 12,576 156 1.24 4 13,154 12,576 578 4.60 5 12,855 12,576 279 2.22

Public Submission 13 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 11,926 1,465 12.28% 6,916 57.99% 101 0.85% 3,228 27.07% 216 1.81% 2 12,212 969 7.93% 8,506 69.65% 78 0.64% 2,435 19.94% 224 1.84% 3 12,732 952 7.48% 10,512 82.56% 136 1.07% 957 7.52% 175 1.37% 4 13,154 575 4.37% 11,831 89.94% 47 0.36% 563 4.28% 138 1.05% 5 12,855 512 3.98% 11,412 88.77% 162 1.26% 612 4.76% 157 1.23% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 8,175 1,262 15.44% 4,380 53.58% 159 1.94% 2,316 28.33% 58 0.71% 2 8,084 946 11.70% 5,392 66.70% 34 0.42% 1,675 20.72% 37 0.46% 3 8,087 691 8.54% 6,415 79.32% 238 2.94% 618 7.64% 125 1.56% 4 6,592 515 7.81% 5,824 88.35% 27 0.41% 195 2.96% 31 0.47% 5 7,605 355 4.67% 6,185 81.33% 89 1.17% 970 12.75% 6 0.08% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 16
TOTAL Population: 62,879 Mean Target Population: 8,983 Largest Positive Deviation: 477 Largest Negative Deviation: -367 Overall Range in Deviation: 844 Overall Range in Deviation Percentage: 9.40% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 9,460 8,983 477 5.31 2 8,767 8,983 -216 -2.40 3 9,151 8,983 168 1.87 4 8,903 8,983 -80 -0.89 5 8,731 8,983 -252 -2.81 6 8,616 8,983 -367 -4.09 7 9,251 8,983 268 2.98

Public Submission 16 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 9,460 1,204 12.73% 6,497 68.68% 68 0.72% 1,503 15.89% 188 1.98% 2 8,767 891 10.16% 4,087 46.62% 82 0.94% 3,547 40.46% 160 1.82% 3 9,151 811 8.86% 7,564 82.66% 87 0.95% 583 6.37% 106 1.16% 4 8,903 470 5.28% 7,389 82.99% 66 0.74% 826 9.28% 152 1.71% 5 8,731 454 5.20% 7,600 87.05% 48 0.55% 528 6.05% 101 1.15% 6 8,616 348 4.04% 7,727 89.68% 25 0.29% 429 4.98% 87 1.01% 7 9,251 295 3.19% 8,313 89.86% 148 1.60% 379 4.10% 116 1.25% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 5,875 1,150 19.57% 3,720 63.32% 104 1.77% 865 14.72% 36 0.62% 2 6,505 747 11.48% 2,780 42.74% 79 1.21% 2,866 44.06% 33 0.51% 3 5,931 591 9.96% 4,651 78.42% 184 3.10% 431 7.27% 74 1.25% 4 5,645 343 6.08% 4,917 87.10% 10 0.18% 340 6.02% 35 0.62% 5 4,581 537 11.72% 3,620 79.02% 81 1.77% 272 5.94% 71 1.55% 6 4,770 139 2.91% 4,290 89.94% 2 0.04% 335 7.02% 4 0.09% 7 5,236 262 5.00% 4,218 80.56% 87 1.66% 665 12.70% 4 0.08% Total 38,543 3,769 28,196 547 5,774 257 Public Submission Map 18
TOTAL Population: 62,879 Mean Target Population: 15,720 Largest Positive Deviation: 465 Largest Negative Deviation: -650 Overall Range in Deviation: 1,115 Overall Range in Deviation Percentage: 7.09% Trustee Area TOTAL Population Target Population Target Deviation Target Deviation (%) 1 15,070 15,720 -650 -4.13 2 15,591 15,720 -129 -0.82 3 16,185 15,720 465 2.96 4 16,033 15,720 313 1.99

Public Submission 18 Total Population by Race/Ethnicity Area Total Population NH White Hispanic NH Black NH Asian NH Other 1 15,070 1,838 12.20% 8,942 59.34% 129 0.86% 3,871 25.69% 290 1.76% 2 15,591 941 6.04% 12,113 77.69% 110 0.71% 2,164 13.88% 263 1.68% 3 16,185 1,061 6.56% 13,863 85.65% 115 0.71% 981 6.06% 165 1.02% 4 16,033 633 3.95% 14,259 88.94% 170 1.06% 779 4.86% 192 1.19% Total 62,879 4,473 49,177 524 7,795 910 Citizen Voting Age Population Area Total CVAP NH White CVAP Hispanic CVAP NH Black CVAP NH Asian CVAP NH Other CVAP 1 10,095 1,602 15.87% 5,605 55.52% 163 1.61% 2,656 26.31% 69 0.69% 2 9,962 781 7.84% 7,522 75.51% 54 0.54% 1,571 15.77% 34 0.34% 3 9,398 962 10.24% 7,517 79.98% 231 2.46% 548 5.83% 140 1.49% 4 9,088 424 4.66% 7,552 83.10% 99 1.09% 999 10.99% 14 0.16% Total 38,543 3,769 28,196 547 5,774 257 ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Michael Solorza, Director of Finance
SUBJECT: Receive and File the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)
DATE: February 9, 2022

RECOMMENDATION
It is recommended that the City Council receive and file the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR) and presentation.

FISCAL IMPACT
The action of receiving and filing the ACFR for the period ending June 30, 2021 does not have a fiscal impact.

BACKGROUND
The City annually produces an Annual Comprehensive Financial Report (ACFR) that presents audited financial results as of June 30 of the prior fiscal year. Staff is presenting the ACFR for the fiscal year ended June 30, 2021. The City engages a third-party audit firm (Vasquez and Company) to review all financial transactions, produce various statements, ensure compliance with Governmental Accounting Standards Board (GASB) statements, assist staff in compiling the ACFR document, sample transactions, review internal controls, and provide an opinion on the accuracy and validity of the financial statements.

The auditors have provided an “un -qualified” opinion for the Fiscal Year 2020 -21 report.

In other words, this is a “clean” audit with no significant fin dings that would cause the auditors to render a “qualified” opinion:
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“In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Montebello, California, as of June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in acco rdance with accounting principles generally accepted in the United States of America.”

The ACFR is a document that tells “what has happened” in the prior fiscal year, as opposed to a budget which is a plan for the upcoming fiscal year. There are statements, notes and financial schedules of required information that provide the reader a comprehensive view of revenues, expenses, assets, liabilities, cash and investments, debt, pension liabilities, and other financial data across the entire organization. There are also statistical tables which present a more complete (non -financial) picture of Montebello.

The Transmittal Letter (Attachment A) and Management Discussion and Analysis (MD&A) (Attachment B) provide extensive detail and discussion of the financial statements and are included in the final published ACFR document . They are included as attachments for review and detail. The extensive Notes section of the ACFR is also useful in providing a more complete explanation of the various financial a spects of the City , adding descriptions and explanations to the myriad schedules and tables.

This agenda report provides a summary of the document. It should be noted that Staff is presenting the FY 2020-21 ACFR for the Government Finance Officers Association (GFOA) “Certificate of Achievement for Excellence in Financial Reporting” award program. This program provides a third-party review of the CAFR in an effort to produce a document that meets industry best practice standards.

ANALYSIS

The ACFR presents information by type of fund , with the two most significant “buckets” being Governmental Activities and Business -type Activities. Governmental Activities includes not just the General Fund, but special funds such as Gas Tax, Proposition A, Proposition C, Housing Successor Agency, Retirement Fund, and the various (non - Transit) Grant Funds. Business -type Activities includes Transit, Golf Course, Hilton Garden Inn and the Home2Suites.

Included in the financia l statements for both Governmental and Business -type funds is not only revenue and expenditures, but liabilities related to bond debt, pension and retiree medical liabilities , assets such as land , buildings and equipment, and other useful information desi gned to give the reader a clear picture of the City’s overall financial condition. The following pages provide a discussion of major items found in the complete CITY COUNCIL AGENDA STAFF REPORT – MEETING OF FEBRUARY 9, 2022 Receive and File the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)

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ACFR document (which can be found on the City’s website: www.cityofmontebello.com).

In addition, hard copies will be made available to City Council and staff.

Government-wide Overview
Overall, across the entire organization, total revenues (Governmental and Business-type combined) for FY 2020-21 were $136.4 million, compared to $122.2 million in FY 2020-

21. The largest increases to revenue were in the “Sales Tax” and “Property Tax” categories: $9.5 million and $2.7 million respectively.

The increase to sales tax was primarily due to the new Measure H Transaction and Use Tax, approv ed by Montebello voters in March 2020 with collections and remittance beginning July 2020 (i.e., FY 2020-21). The increase to property tax shows the improving real estate market, as overall assessed value increased over five percent in FY 2020-21.

The “P roperty Tax” category includes revenue restricted for payment of retirement obligations and is recorded in the “Retirement Fund” special revenue fund. The debt service on the $153.4 million in pension obligation bonds issued in May, 2020 is entirely funded by this restricted revenue. In addition, “Capital Grants” also saw a significant increase: $9.7 million. The majority of this additional grant revenue (when comparing prior year totals) is found in the “Business -type Activities” and represents funding to Transit operations from the CARES Act approved by Congress in May 2020.

Total expenses across the organization were $127.8 million, compared to $136.9 million in FY 2020-21 (Government and Business -type funds combined) . Public Safety and Transit saw the largest increases : $13.8 million and $4.6 million respectively . These increases were offset by lower spending in General Government, Public Works, Housing and Community Development and Parks and Recreation . As a reminder, these are expenses across the organization: all funds, including capital and grant funds.

Business-Type Activities
The City’s Transit operation (Montebello Bus Lines) is the largest component of the Business-type Activities group. In addition, there are the Golf Course, Hilton Garden Inn and Home2Suites operations.

The Golf Course continues to improve operations with revenues collected stronger than in prior years. The General Fund still had to make a $471,300 subsidy payment to th e Golf Course for FY 2020-21, however that amount is lower than in prior fiscal years. Staff is excited to pursue the renovation of the golf course, with the anticipation of Top Golf opening in the near future. The rehabilitation of the golf course would eliminate the General Fund subsidy, which would be a positive impact on fund balance.

The Hilton Garden Inn saw an operating loss of $1.023 million. This is not a surprising outcome as the pandemic continued to negatively impact travel and leisure. In addition, the hotel was closed for three months of the fiscal year, as renovations were completed.

The Home2Suites had an operating surplus of $2.745 million, similar to the surplus of the CITY COUNCIL AGENDA STAFF REPORT – MEETING OF FEBRUARY 9, 2022 Receive and File the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)

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prior fiscal year . The City’s hotels continue to operate efficiently – even during these trying times dominated by the pandemic – holding more than enough funds necessary to pay ongoing debt service as well as funding day to day operating expenses.

Governmental Activities
General Fund revenues and expenditures a lso saw variances when compared to FY 2019-20. Overall, General Fund revenue was $ 14.195 million greater in FY 2020 -21 versus the prior fiscal year. “Sales Tax” witnessed the largest increase year over year:
$9.452 million. The majority of this increa se was from the newly enacted Measure H Transaction and Use Tax, with additional increases due to improvements in the Bradley Burns 1% tax category as the economy improves from the depths of the pandemic in Spring and early Summer 2020.

“License and Permits” revenue was up $979,000 from FY 20219 -20 primarily due to improved business license management. Once the City contracted for a professional organization (HdL Companies) to take over business license administration from in-house staff in October 2020, revenue collection improved due to an increased ability to ensure regular renewals as well as improved compliance (i.e., making sure business were abiding by the City’s Municipal Code requiring a valid business license to operate).

General Fund expenditures were up $4.369 million over FY 2019-20. The majority of the increase was in Public Works: $3.172 million. It should be noted that numerous categorizations contained in the ACFR were updated for FY 2020 -21 to reflect actual operations and improve reporting accuracy.

This has led to the appearance of large increases in specific functional areas when making year-over-year comparisons. For example, prior to this year, the Public Work’s Engineering and Street Divisions were mis-categorized in the ACFR (they were placed in Housing and Community Development and Parks and Recreation in prior years). There were Public Works functions erroneously included as General Government, and other divisions in General Government and Public Work s that are actually Parks and Recreation.

With the movement of these functions to their proper groupings, expense variances appear larger from one year to the next . Subsequent ACFR presentations will maintain the more accurate groupings, which will allow for better and more consistent comparison of expenses across fiscal years.

The “Capital Outlay” category was $5.454 million higher than FY 2019-20 ($9.014 million vs. $3.560 million). There were three major expense categories responsible for this large increase: “Acquisition,” “Building Improvements” and “Outside Contracts.”

The City Council approved the purchase of a property at 715 W. Whittier, this accounted for $1.223 million in “Acquisition” expenses. There was $1.677 million in “Building CITY COUNCIL AGENDA STAFF REPORT – MEETING OF FEBRUARY 9, 2022 Receive and File the Fiscal Year 2020-21 Annual Comprehensive Financial Report (ACFR)

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Improvements,” representing the use of excess bond reserves (Series 2009A) to fund repairs and maintenance at City Hall and Police Headquarters. Projects such as finishing Taylor Ranch Park, upgrading office space at City Hall and replacing the HVAC at Police Headquarters were all funded with the Series 2009A proceeds. “Outside Contracts” saw $5.031 million in expenses related to the citywide energy savings/upgrade project with ABM. This project replaced lighting in City facilities and parks, as well as ma de improvements in other areas to help reduce the City’s overall costs of electricity.

Additional capital outlay expenses were related to information technology purchases, vehicle purchases in Police and Fire, and emergency equipment for the Fire Department.

Total General Fund reserves as of June 30, 202 1 were $7.585 million, slightly less than the ending balance of $9.448 million as of June 30, 2020. As described above, the primary draw on reserves was due to one-time capital outlay expenses: acquisition of property, infrastructure repairs and upgrades, vehicle purchases, information technology hardware upgrades, and life-safety/emergency response equipment for firefighters.

Given the breadth and scope of deferred maintenance, equipment and in frastructure projects in Montebello, it should be expected that subsequent fiscal years will see large “Capital Outlay” totals similar to FY 2020 -21. As the City improves its infrastructure to better serve residents, replaces aging vehicles in its fleet ( especially for public safety), and makes much needed upgrades to facilities to ensure a safe and proper work environment for its employees, there will be a need for ongoing capital related expenditures. The City’s overall revenue standing – focusing on th e General Fund – should continue to improve, allowing for future fiscal years to potentially show increases to fund balance.

Economic Overview and Credit Rating
As of the date of this ACFR, the City ’s S&P underlying credit rating is “A+”, which represents an improvement of one-step (from “A”) from two years previous. The “A” rating was provided in December 2019 as part of debt issuance for the “Paving the Way Project” (Sales Tax Revenue Bonds, Series 2019ABC) and refinancing of Lease Revenue Bonds of the Montebello Hilton (Hilton Garden Inn).

The upgraded “A+” rating was awarded with the issuance of the Pension Obligation Bonds in May 2020. It should be noted that the “A+” rating was reaffirmed, and the previous “unstable” outlook provided as part of the POB issuance was removed and replaced with “stable” with S&P’s annual credit update in July, 2021.

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in economic activity of February 2020 marking the beginning of the “COVID -19 recession,” and a trough in economic activity occurring just two months later in April 2020.

This short-lived recession – and the concomitant pandemic related responses – continued to impact the economy into FY 2020 -21. However, as evidenced by much stronger than anticipated sales tax revenue performance (discussed above and in greater detail in the “Transmittal Letter” [Attachment A] and “MD&A” [Attachment B]) the local Montebello economy fared better than anticipated when the FY 2020 -21 budget was being developed. The surge in coronavirus cases in Fall and Winter of 2020 did not negatively impact economic activity to the extent witnessed by the original outbreak in Spring, 2020.

However, it should be noted that the impacts from the “Delta Variant” and more recent “Omicron Variant” did not impact FY 2020 -21 but could negatively influence the national economy in FY 2021-22 and beyond, with unknown impacts locally.

5.5%, with a 3.5% growth predicted for 2022 and 2.9% in 2023. There is concern that the resurgence in new COVD-19 cases in the first quarter of 2022 will negatively impact the economy, mimicking a similar pattern seen in early 202 1. This concern is coupled with the persistence of high inflation rates. Nevertheless, there are projections of robust economic expansion over the next two years, despite the pall cast over the economy by the pandemic.

The good news is the bulk of economi c growth will be associated with continued expansion in consumer spending. Locally, that could equate to a continuation of strong sales tax results as retail businesses in Montebello see improvement in activity. More generally, as online retail activity continues to grow, its importance to local cities will also expand as the City’s share from the County sales tax pool grows.

Also portending positive economic activity is the forecasted reduction in the national unemployment rate. Nationally, it was 8.1% in 2020, is forecasted to be 5.4% at the end of 2021, and is expected to drop over the next two years (4.0% and 3.5% in 2022 and 2023 respectively). As the economy moves towards full employment, this should help with overall consumer sentiment.

In general , according to the UCLA Anderson Forecast, California’s recovery and expansion will outpace those of the nation. While income inequality will persist throughout the State, forecasters point to the State’s better public health outcomes and transition to new ways of working (i.e., remotely) as the main reasons why California’s recovery will be better than the United States’. Unemployment in the State – like the nation – will continue to fall from 7.6% in 2021, to 5.6% and 4.4% in 2022 and 2023 respectively.

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In addition, the new, voter approved Measure H Transaction and Use Tax outperformed budget by $1.7 million. These General Fund sources of revenue helped mitigate lower revenue in charges for services and fines and forfeitures. Suspension of street sweeping enforcement and cancellation of all community services’ programming resulted in lost revenue when compared to the adopted budget in these two categories in FY 2020-21.

Based on these results for FY 2020-21, total sales tax revenue for FY 2021-22 is expected to be higher than the adopted budget. The City’s share of the County sales tax pool has grown significantly since 2018 and 2019. The Supreme Court decision in Wayfair vs.

South Dakota (2018) and the implementation of Assembly Bill 147 in 2019 have improved collection of sales tax by remote sellers. A recent UCLA Anderson Forecast indicated that Wayfair and AB 147 lowered the cost of compliance and enforcement of sales tax remittance, which resulted in more reported taxable sales. More reported t axable sales equates to more sales tax revenue.

Montebello is also benefiting from the additional ¾ cent Transaction and Use Tax implemented in July 2020. The Measure H revenue will contribute an additional $7.7 million plus to General Fund revenue in FY 2021-22, helping to close a twenty plus year history of structural deficits (i.e., adopted expenditures exceeding adopted revenues).

Management will continue to monitor the impacts which the pandemic continues to have on the local and regional economy, especially with the “Omicron Variant.” Staff will adjust revenue and expenditure forecasts as more data become available. Montebello remains well positioned to weather the current economic storm, having recently improved organizational efficiencies and ef fectiveness, continued investing in capital projects and infrastructure improvements, and updated policies and procedures as well as accomplished myriad other projects aimed at improving the City’s long -term financial standing.

Summary
The June 30, 20 21 ACFR presents a broad range of financial information aimed at providing readers an in-depth picture of Montebello’s fiscal standing. The City’s auditors have worked closely with Staff to test and sample transactions, review internal policies and financial statements in order to render their “un-qualified” opinion. Management will continue reviewing policies and procedures in order to make improvements where needed. Finance staff will continue to provide regular budget updates to the City Council.

It is anticipated that the City will be awarded recognition by GFOA for this June 30, 2021 ACFR.

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ATTACHMENTS

A. Attachment A - Transmittal Letter
B. Attachment B - Management Discussion and Analysis (MD&A)

CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
January 26, 2022
Honorable Mayor and Members of the City Council:

The Annual Comprehensive Financial Report (ACFR) of the City of Montebello for the fiscal year ended June 30, 2021 - the beginning of Montebello's second century of incorporation - is submitted as prepared by the City's Finance Department. The report is published to provide the City Council, community and other interested parties detailed financial and operational information about the City for the previous fiscal year. The financial statements are audited by a third-party accounting firm, providing assurance to the public that the City's financial reporting and associated operations meet or exceed generally accepted accounting and auditing standards.

The ACFR is presented in three sections: the Introductory Section, the Financial Section, and the Statistical Section. The Management Discussion and Analysis (MD&A) for Fiscal Year 2020- 21 is the most useful for readers of this ACFR to find a general overview of the City's financial condition at year-end.

Responsibility for both the accuracy of the financial report and the completeness and fairness of the presentation rests with the City. To the best of our knowledge, the information presented is accurate in all material aspects and includes all disclosures necessary to enable the reader to gain an understanding of the City's financial activities.

The City prepared the ACFR using the financial reporting requirements outlined in the Governmental Accounting Standards Board (GASB) Statement No. 34. This statement requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found immediately following the report of the independent auditors in the financial section of the ACFR.

The City requires that its financial statements be audited by an independent, accredited auditing firm on an annual basis. This requirement has been satisfied, and the auditor's opinion is included in the financial section of this report.

In addition, the City is required to undergo an annual single audit to conform to the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). This requirement has also been satisfied, with the single audit published separately as a stand-alone document.

THE FINANCIAL REPORTING ENTITY
This report includes activity of all funds of the City, with presentation in the ACFR being done on a major vs. other funds basis. All funds have their appropriations approved by the governing body (i.e., City Council) through the annual budget development process. In addition to the General Fund, other governmental and enterprise funds are utilized to record the City's financial activity.

Each fund is appropriated annually, and include the General Fund, Proposition A, Proposition C, 1600 West Beverly Boulevard • Montebello, California 90640-3932 • {323}-887-1200

ATTACHMENT A
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CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
Measure M, MeasureR, HOME, Community Development Block Grant (CDBG), Gas Tax, Grants (non-Transit), Asset Forfeiture, Grants (Transit), Debt Service, etc. Revenue and expenditures are appropriated through the budget
process, with the FY 2020-21 budget (all funds) adopted at a regular City Council meeting in June, 2020.

The City of Montebello provides a full range of municipal services including police and fire protection, street maintenance, planning and community development, parks and recreation services, financial planning, treasury management, information technology, human resources, engineering and general administration.

Montebello also operates several enterprise funds, which include a municipal golf course, a transportation system (Montebello Bus Lines), water services in certain areas of the City, and two hotels (i.e., Hilton Garden Inn and Home2Suites). Enterprise funds are financed from user charges (e.g., green fees, room charges, bus fares, etc.) and revenue from other governmental agencies (e.g., Los Angeles
County Metropolitan Transportation Authority funding for fixed transit lines), as applicable. It should be noted that the City is working to sell its water system, with the sale anticipated to be completed in Fiscal Year 2021-22. Subsequent financial reports and ACFRs will include updates once the sale is completed.

ACCOUNTING SYSTEM
The modified accrual basis of accounting is followed for governmental fund types and the accrual basis of accounting is followed for proprietary and fiduciary fund types. In reviewing and developing the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute assurance regarding:
• The safeguarding of assets against losses from unauthorized use or disposition and the reliability of financial records for preparing financial statements and maintaining accountability for assets.
• The concept of reasonable assurance recognizes that the cost control procedures should not exceed the benefits likely to be derived and that the evaluation of costs and benefits require estimates and judgment by management.
• All internal control evaluations occur within the above framework.

As discussed more fully below, management has made a concerted effort to improve internal controls by updating the Municipal Code, creating and implementing new procedures and policies, and generally ensuring internal policies and procedures are efficient while not sacrificing requisite safeguards against fraud, waste and abuse.

BUDGETARY CONTROL
In addition to internal accounting controls, the City also maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with the City's budget policy approved by the City Council as incorporated in the budget adoption resolution. Appropriations of the General Fund, special revenue funds, debt service funds, and capital project funds are 1600 West Beverly Boulevard • Montebello, California 90640-3932 • (323}-887-1200 iii

CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
included in the annual approved budget. The City's adopted budget document includes detailed information about the approval process. A budget calendar, various budget schedules and related policies can be found in that document.

Budgetary control is maintained at a functional level by division within the department through the use of object level accounting as actual expenditures are compared to appropriations. As purchase orders are approved, appropriations are encumbered. Encumbrances and expenditures, which would cause an overrun of appropriations, require an approved budget transfer, which is reviewed and approved by the Director of Finance, pursuant to the City's administrative policy, the Annual Budget Resolution and the Municipal Code. The City's Capital Improvement Program (CIP) is adopted at the same time as the operational budget, and includes various street and infrastructure improvement projects. Any action to increase total appropriations requires approval by a majority vote of the City Council.

IMPROVEMENTS TO INTERNAL CONTROLS
The City responded positively and decisively to the 2018 State Auditor's report (published December, 2018) and the 2021 update (published subsequent to this ACFR, in October 2021).

These reports - published by the State Auditors "High Risk Agency" group - provided numerous recommendations for improving different areas of management and internal controls. Besides focusing on management turnover, management of the City owned hotels, oversight of the municipal golf course, and other organizational areas, the audit reports looked at ways in which purchasing and procurement could be improved.

Over the span of the last three years, the City has put into place numerous new procedures and policies directly aimed at responding to the audit reports' various recommendations . The City's municipal code chapters dealing with purchasing and procurement were updated in March 2019, and citywide purchasing training has been conducted on numerous occasions since 2019.

Several new administrative policies were developed that addressed the areas of weakness identified by the State Auditor (i.e., petty cash, credit cards, hotel financial reporting, etc.), while other existing policies were updated to incorporate recommendations from the audit reports.

As required, management provides status reports to the City Council at regular meetings, which are then forwarded to the State Auditor to show the City's progress towards meeting the audit report recommendations. Staff has been in regular contact with State Auditor staff over the past three years, providing updates on the City's progress in addressing the recommendations and findings.

Management is committed to satisfying all recommendations from the 2021 report in order to formally remove Montebello from the high risk agency category. The improvements made in organizational management and internal controls indicate that Montebello is making positive strides in ensuring future financial stability, as well as putting into place internal controls that ensure public funds are managed and spent wisely.

ADOPTION OF FORMAL RESERVE POLICIES
Besides improvements to internal controls - through the publication and operationalization of updated policies- the City is demonstrating its commitment to fiscal sustainability by the adoption 1600 West Beverly Boulevard • Montebello, California 90640-3932 • (323}-887-1200 iv

CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
of formal General Fund reserve policies. The City's prior policies were lacking in a comprehensive and descriptive treatment of General Fund reserves. The City Council first adopted updated reserve policies in June 2020, as part of the City's operating and capital budget. These policies are incorporated into the adopted budget document, and are presented annually for review and approval by the City Council.

Having such written policies in place indicates to third parties (i.e., credit rating agencies) that Montebello has a clear plan in place for how to manage General Fund reserves - spendable and non-spendable. Fully compliant with GASB 54, the policies establish distinct reserve categories for various uses:
• Economic Uncertainties
• Unfunded Liabilities
• Equipment/Technology Replacement and Upgrade
• Capital Improvement (Unfunded/Un-programmed)
• Deferred Maintenance
• Insurance- Risk Management
• Economic Sustainability
Each reserve category sets aside a specific amount -either a fixed dollar amount or an amount calculated based on a percentage of prior year operating revenues - for one of the uses mentioned above. The policy, per GASB 54, makes "commitments" or "assignments," and describes the method by which each reserves can be utilized. Furthermore, the policy includes the method for replenishing the various reserve buckets, should they be used and fall below the pre-scribed amounts.

The reserve policy is reviewed annually and provided to City Council as part of the budget development process. Changes and updates to the policy will be recommended by Staff as necessary.

GENERAL INFORMATION AND ECONOMIC OUTLOOK
The City of Montebello was incorporated on October 16, 1920 and is proudly celebrating its second century of incorporation -albeit while continuing to maintain social distance during these unprecedented times. The City is a general law city and functions under the City Council-Manager form of government. The City is governed by a legislative body of five City Councilmembers elected at large and serving staggered, four-year terms, with the Mayor and Mayor Pro-Tem selected by fellow Councilmembers. The City Clerk and City Treasurer are also elected to four year terms. The City Manager and City Attorney are appointed by the City Council.

Montebello is located nine miles east of the Los Angeles Civic Center, with access to three freeways- the Santa Ana 5 Freeway to the south, the Pomona 60 Freeway to the north, and the San Gabriel River 605 Freeway to the east. The City has a population of approximately 64,000 living in an area of 8.2 square miles. The City is a balanced community with industrial, residential, and commercial areas.
1600 West Beverly Boulevard • Montebello, California 90640-3932 • (323}-887-1200 v

CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
Fiscal Year 2020-21 continued to be driven by the coronavirus pandemic and the social and economic impacts related to the public response to containing the virus' spread. Economies around the world were negatively impacted, with a recession in the United States officially beginning in February 2020 and ending two months later in April. The detrimental impacts the pandemic had on the economy were felt in Montebello.

Early in the pandemic (Spring and Summer, 2020), various State and County stay at home orders - implemented to "flatten the curve" and protect the public - negatively impacted sales tax generating retail operations throughout the City for FY 2019-20. With sales tax comprising over one-third of General Fund revenue, the impacts of the coronavirus and the responses aimed at containing it took a toll on FY 2019-20 sales tax receipts. Actual sales tax was $11.616 million, versus a budget of $12.197 million. This drop of almost $600,000 was solely due to the closure of retail stores, restaurants and other sales tax producing outlets.

However, sales tax revenue rebounded positively in FY 2020-21. The prolonged negative impact of the pandemic on general retail activity was not as severe as first anticipated. Autos and transportation and pooled sales tax categories performed remarkably well in FY 2020-21. In addition to general retail activity performing better than originally forecast, the City benefitted from the voter approved additional % cent transaction and use tax. Measure H was approved by over 60% of Montebello voters in the March 2020 special election. The revenue from this additional transaction and use tax began flowing to City coffers July 1 , 2020.

Initial sales tax estimates were $11.270 million for Bradley Burns (i.e., traditional 1 %) and $6.000 million for Measure H for FY 2020-21. These budget estimates were developed in late Spring 2020, early in the pandemic and completed under dire forecasts of overall revenue performance.

Fortunately,
traditional 1% sales tax came in at $13.507 million, and Measure H revenue was $7.698 million for FY 2020-21. Early forecasts for FY 2021-22 continue to support this positive upward trend in sales tax - despite the ongoing pandemic and surges caused by the Delta and Omicron variants. While the pandemic continues to impact the economy and society at large, there is reason to believe this area of revenue will not be as severely impacted as originally forecasted almost two years ago.

Other sources of revenue were severely impacted by the pandemic in FY 2020-21: recreation classes, daycamps, and related community services program revenue fell to zero as the City cancelled programs in order to abide by State and County regulations. License and permit revenue (i.e., planning, building, etc.) fared well, with the City doing its best to practice social distancing while still allowing for customers to conduct plan checks and request building permits and apply for or renew business licenses. Fines and Forfeiture revenue was also lower than budgeted amounts due to the suspension of street sweeping enforcement as City officials sought to mitigate pandemic related impacts.

One area of General Fund revenue not negatively impacted by the pandemic in FY 2020-21 was property tax. Property tax accounts for more than one-quarter of General Fund revenue. Due to the timing of property assessments - January 1 of each year - the virus and related responses did not impact FY 2020-21 assessed values. Demand has remained high for residential properties, as supply continues to be constrained. Generationally low interest rates coupled with a demand for housing that would accommodate the "new normal" of working from home has kept demand up.
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CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
The FY 2020-21 net taxable assessed value of all property within the City is $6.714 billion and represents a 5.00% increase over the prior year ($6.393 billion, a $321 million increase).

Increases in assessed value over the past three years have averaged 5.53%. The median home value for a detached single family residential property in Montebello for the second quarter of 2021 was $650,000, a 3.6% increase from the same quarter in the previous year. Since the start of 2018, median home values in Montebello have averaged a 6. 7% annual increase (from $550,000 to $681,500 in the third quarter of 2021).

On the expense side of the ledger, the City acted decisively to reduce its unfunded actuarial liability (UAL) from its retirement commitments with CaiPERS. The City issued over $153.4 million in Pension Obligation Bonds (POBs) in May 2020. This amount fully extinguished the UAL from the City's Miscellaneous and Safety defined benefit retirement programs (per the June 30, 2018 actuarial valuation report form PERS, published in July 2019). The debt service for the POBs will be paid using revenue from the City's 1946 voter approved property tax override assessment.

The level debt service of the POBs provides a predictable and stable expense - replacing a variable and unpredictable expense related to annual changes in UAL costs. Projections done by the City's financial advisor when determining the efficacy of issuing POBs demonstrated the potential for future UAL expenses to outpace the growth in property tax override revenue. Any retirement related expenses above and beyond available property tax override revenue is borne directly by the General Fund, reducing resources available for public safety, street and park maintenance, and other important services.

Moreover, the City was able to receive an upgrade in its credit rating as part of the POB issuance process. The City's credit rating, as reported by S&P Credit Ratings, is UA+," up one notch from the "A" rating received in December 2019. This upgrade is an achievement, given the credit rating was given at a point when the full impacts of the pandemic were still being analyzed and uncertainty surrounding local economic impacts remained high. The credit rating upgrade is just another indication of how recent improvements to management and financial controls are manifested in concrete ways, and was reaffirmed in July 2021 .

ACCOMPLISHMENTS AND ACHIEVEMENTS
Montebello has made tremendous strides in Fiscal Year 2020-21 to improve its financial standing and operations. In addition to improvements in internal controls, responding to the State Auditor findings, adopting a General Fund budget with a surplus for the second year in a row, extinguishing existing unfunded liability, some of the many positive accomplishments this past year include:
• Completion of a park and facilities needs assessment study and master plan • Completion of significant facility repair and upgrade projects, eliminating years of deferred maintenance on key City facilities
• Awarding of an energy conservation project contract to provide energy savings through lighting, HVAC and roof repairs and upgrades
• Completion of the Taylor Ranch Park project
• Streamlining invoice
approval and payment processes
1600 West Beverly Boulevard • Montebello, California 90640-3932 • {323}-887-1200 vii

CITY OF MONTEBELLO

DEPARTMENT OF FINANCE
• Introduction of improved purchasing and procurement guidelines • Receiving the Government Finance Officers Association (GFOA) award for budget preparation for the first time in the history of the City • Significant positive movement on reimagining the Golf Course These and other accomplishments have helped set Montebello on the right path towards fiscal sustainability and operational stability. The following pages provide technical information related to the City's accounting system, budgetary control, cash and investments, etc. Greater detail is available in the MD&A, the various notes to the financial statements, required supplementary information (RSI) and statistical sections.

ACKNOWLEDGEMENTS
The preparation of the City's Annual Comprehensive Financial Report could not have been accomplished without the dedicated services of the entire Finance Department, as well as assistance from each of the operating departments. I want to specifically thank the lead Accountant in this endeavor, Van Dao for her commitment to ensuring the ACFR was completed accurately and on-time . The City's independent auditor- Vasquez & Company LLP - provided invaluable assistance and expert advice in completing the ACFR.

I also want to thank the City Council, the Executive Management Team and City staff for their interest and support of the financial operations of the City and helping ensure Montebello thrives financially and operationally.

Michael Sol
Director of Finance
1600 West Beverly Boulevard • Montebello, California 90640-3932 • {323}-887-1200 City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021
4 The following section represents Management’s Discussion and An alysis (MD&A). It is intended to provide narrative overview and analysis on the City’s financial performance for the fiscal year ended June 30, 2021. Readers are encoura ged to consider the information presented here in conjunction with the accompanying letter of transmittal and financial statements.

Overview of the Financial Statements
The City's basic financial stat ements consist of three componen ts: 1) Government-wide Financial Statements, 2) Fund Financial Stat ements, and 3) Notes to the B asic Financial Statements. The Statistical section at the end of this report provides supplementary information in addition to the basic financial statements. Government-wide Financial Statements are prepared using accrual accounting method to demonstrate the City’s operational accountability, while the Fund Financial Statements are based on modified-accrual accounti ng method to demonstrate its budgetary accountability.

Reconciliations of the Fund Financ ial Statements to the Governm ent-wide Financial Statements are provided to explain to readers the differences created by this integrated approach.

Government-wide Financial Statements
The Government-wide Financial St atements provide a broad overview of the City's finances, in a manner similar to a private-sector business. The statements pre sent information about the functions of the City principally supported by taxes and intergovernmenta l revenues (governmental activities).

The governmental activities of the City include general governm ent (i.e., administration, finance, human resources, elected officials, etc.) public safety, public works, parks and recreation, and housing and community development. Business-type activities of the City include water, golf course, transportation and hotel operati ons. These statements include a ll assets of the City as well as all liabilities (including long-term debt). Additionally, certain eliminations have occurred as prescribed by GASB Statement No. 34 in regards to inter-fund activity, payables, and receivables.

The Statement of Net Position and the Statement of Activities r eport information about the City as a whole and about its activities. These statements include all assets and liabilities of the City using the accrual basis of accounting, which is similar to the accounting used by most private sector companies.

All changes in net position ar e reported as soon as the underly ing event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

The government-wide financial statements can be found immediately following this discussion and analysis.

Fund Financial Statements
The Fund Financial Statements incl ude statements for three cate gories of activities: Governmental Funds, Proprietary Funds and Fiduc iary Funds. The governmental activities are prepared using the current financial resources measurement focus and the modified accrual basis of accounting.

A Fund
is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

ATTACHMENT B
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

5 Governmental Funds. Governmental funds are used to account for essentially the same functions reported as Governmental Activities in the government-wide financial statements. However, unlike the government-wide financial statem ents, governmental fund financi al statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. S uch information may be useful in evaluating a government's near-term financing requirements.

Because the focus of government al funds is narrower than that o f the government-wide financial statements, it is useful to com pare the information presented f or governmental funds with similar information presented for governmental activities in the Government-wide Financial Statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund Balance Sheet and the gov ernmental fund Statement of Revenues, Expenditures and Changes in Fund Balances provide a r econciliation to facilitate this comparison between governmental funds and governmental activities.

The City maintains various individual governmental funds. Information is presented separately in the Governmental Funds Balance Sheet, and in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances, for the General Fund, the Retirement Special Revenue Fund, Prop C Local Special Revenu e Fund, the Public Financing A uthority Debt Service Fund, and the Housing Successor Special Re venue Fund, all of which are co nsidered to be major funds. Data from other governmental funds are combined into a single, aggre gated presentation. Individual fund data for each of these other gov ernmental funds is provided in the form of combining statements elsewhere in this report. As a result of Assembly Bills 1X26 and 1484, Redevelopment Agency assets and liabilities are no longer a part of the governmental funds of the City and are now reported in the Fiduciary Fund section of the financial statements.

The City adopts an annual appropriated budget for all of its individual funds, including the major funds as listed above. The basic financ ial statements include a budge tary comparison statement for the General Fund. The budgetary compar ison statement has been provi ded to demonstrate compliance with this budget.

The basic governmental fund finan cial statements can be found i mmediately following the government-wide financial statements.

Proprietary Funds. Proprietary funds are generally u sed to account for services fo r which the City charges external customers, or o ther units of the City. Proprie tary funds provide the same type of information as shown in the government-wide statements, only in more detail. The City maintains the following two types of proprietary funds.

• Enterprise
funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses ente rprise funds to account for the operations of water, golf c ourse, transit system, Montebell o Hilton and Home2suites Hotels.

• Internal service funds are used to report activities that provide internal services for the City.

The City uses internal service funds to account for workers' co mpensation and general liability. Because internal ser vice funds predominantly benefit governmental rather than business-type functions, they have been included within governm ental activities in the government-wide financial statements. The internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

6 the internal service funds is provided in the form of combining statements elsewhere in this report.

Fiduciary Funds. Fiduciary funds are used to acc ount for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. The basic fiduciary fund financial statem ents can be found immediately fo llowing the basic proprietary fund financial statements and include the assets and liabilities of the Successor Agency Fiduciary Fund.

Notes to financial statements

The notes to financial statements provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The notes to the basic financial statements can be found before the Required Supplementary Information.

Other information

The combining statements referred to earlier in connection with other governmental funds and internal service funds are presented for all other Special Revenue Funds , all other Debt Service Funds, all other Capital Projects Funds, and all Internal Service Funds. T hese combining fund statements and schedules of revenues, expenditures and changes in fund balance - budget and actual for individual funds – can be found immediately following the notes to financial statements.

Note: The numbers shown on the MD&A are either expressed in mul tiples of one thousand or million dollars while percentages are ro unded to the nearest tenth or w hole number. Hence, there may be slight differences between numbers on the MD&A and the numbers on the Basic Financial Statements.

Financial Highlights

• At June 30, 2021, the City’s tot al net position was approxima tely negative $9.3 million dollars, an increase (improvement) of $8.7 million in the positive direction compared to the negative $18.0 million in 2020. The City’s unrestricted net pos ition, at a negative $169.9 million, decreased by $15.9 million dollars over Fiscal Year 2019-20.

• Total revenues from all sour ces were $136.4 million while tot al expenses were $127.8 million. Of the total revenues, pr ogram revenues totaled $78.9 million while general revenues totaled $57.5 million, net of transfers.

• The City’s General Fund expendi tures exceeded revenue and other financing sources by $1.9 million in the Fiscal Year 2020-21. The General Fund unassigned fund balance was $4.9 million at the end of the fiscal year, which was equivalent to approximately one month of the total General Fund expenditures for FY 2021-20.

• General Fund total revenues, including transfers in, for FY 2 020-21 was $5.2 million higher than budget. This is due to an overall increase in sales and pr operty tax revenues, offsetting the lower than budgeted other revenue.

• The General Fund expenditures including transfers out were $7 .7 million over budget mainly due to lower than budgeted interfund charges.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

7 • The City’s Hilton Garden Inn ended the fiscal year with $1.0 million in operating loss before debt service. It should be noted t hat this hotel was closed ent irely between March and September 2020 in order to complete a planned, complete renovation.

• The Home2Suites (which opened in September 2018) ended the fi scal year with $2.7 million in operating income before debt service.

These Financial Highlights, as well as other points, are discussed in greater detail in the body of this discussion and analysis, as well as the Notes to the Financial Statements.

Government-wide Financial Analysis

The government-wide financial st atements provide both long-term and short-term information about the City's overall financial position. This analysis addresses the financial statements of the City as a whole. The statement of net position includes all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources. The City’s net p osition is a useful measurement of its financial health. Net position can be tracked over time to assess whether the City’s financial health is improving or deteriorating. However, readers will need to consider other nonfinancial factors, such as changes in the City’s property tax base, the condition of the City’s infrastructure, and the level of public safety services to assess the overall health of the City.

As mentioned in the financial high lights, the City’s total net position was negative $9.3 million as of June 30, 2021, an increase (impro vement) of $8.7 million compar ed to the negative $18.0 million in FY 2019-20. Included in the City’s net position is $89.4 millio n net investment in capital assets (e.g., land, buildings, machinery and equipment, infrastructure, impro vements other than buildings, and construction in progress); less any related debt used to acquire those assets that remain outstanding.

Capital assets, net of accumulated depreciation, increased by $17.4 million. 2021 2020 2021 2020 2021 2020
Assets:

Current and other assets $ 95,595 $ 93,239 $ 32,885 $ 26,505 $ 128,480 $ 119,744 Capital assets 102,330 81,157 103,685 107,452 206,015 188,609 Total assets 197,925 174,396 136,570 133,957 334,495 308,353 Deferred outflows of resources 12,854 125,438 3,528 45,095 16,383 170,533 Liabilities:

Long-term liabilities 206,705 317,844 117,941 152,988 324,645 470,832 Other liabilities 21,074 14,372 8,960 7,746 30,034 22,118 Total liabilities 227,779 332,216 126,901 160,734 354,680 492,950 Deferred inflows of resources 3,801 2,657 1,735 1,284 5,536 3,941 Net Position:

Net investment in capital assets 56,730 37,578 32,670 45,102 89,400 82,680 Restricted 59,934 40,673 11,203 12,617 71,137 53,290 Unrestricted (137,465) (113,290) (32,409) (40,685) (169,874) (153,975) Total net position $ (20,801) $ (35,039) $ 11,464 $ 17,034 $ (9,337) $ (18,005) Governmental Activities Business-type Activities Total
City of Montebello
Statements of Net Position
June 30
(in thousands)
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

8 The City uses these capital asse ts to provide services to resid ents and the community at large; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net o f related debt, it should be no ted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Any remaining amount is restricted to spending agreements originated by law, contract, or other agreements with external parties. Capital assets are discussed in greater details under Capital Assets section of MD&A, and under Note 3 to the Financial Statements.

The key elements impacting the Ci ty’s net position for the fisc al year ended June 30, 2021 are as follows:

 Governmental activities tota l revenues before transfers excee ded total expenses by $16.1 million, while total expenses exceeded total revenues by $13.4 in the prior year.

2021 2020 2021 2020 2021 2020
Revenues
Program revenues:

Charges for services $ 14,399 $ 13,030 $ 17,365 $ 20,939 $ 31,764 $ 33,969 Operating grants and contributions 10,942 11,106 23,233 29,238 34,174 40,344 Capital grants and contributions 1,207 - 11,802 3,275 13,009 3,275 General revenues:

Sales taxes 22,270 12,818 - - 22,270 12,818 Property taxes 21,414 18,662 - - 21,414 18,662 Other taxes 10,032 9,632 - - 10,032 9,632 Other revenues 3,289 2,327 - - 3,289 2,327 Investment earnings 459 762 18 416 477 1,178 Total revenues 84,012 68,337 52,418 53,868 136,430 122,205 Expenses
General government 2,487 15,829 - - 2,487 15,829 Public safety 54,765 41,005 - - 54,765 41,005 Public works 2,723 10,063 - - 2,723 10,063 Parks, recreation and culture 1,372 5,382 - - 1,372 5,382 Housing and community development 645 3,402 - - 645 3,402 Transit - - 41,718 37,053 41,718 37,053 Golf course - - 2,780 2,378 2,780 2,378 Montebello Hilton - - 3,096 4,306 3,096 4,306 Water utility - - 2,291 2,359 2,291 2,359 Hotel2Suite - - 5,612 6,167 5,612 6,167 Interest on long-term debt 5,252 5,308 4,308 2,983 9,560 8,291 Unallocated infrastructure depreciation 713 701 - - 713 701 Total expenses 67,956 81,690 59,805 55,246 127,761 136,936 Change in net position before transfers 16,056 (13,353) (7,387) (1,378) 8,668 (14,731) Transfers (518) (843) 518 843 - - Change in net position after transfers 15,538 (14,196) (6,870) (535) 8,668 (14,731) Net position - beginning of year, as restated (36,339) (20,843) 18,333 17,569 (18,005) (3,274) Net position - end of year $ (20,801) $ (35,039) $ 11,464 $ 17,034 $ (9,337) $ (18,005) See Note 16 Prior Period Adjustments affecting the restatement of Net Position Governmental Activities Business-type Activities Total
City of Montebello
Statements of Activities
(in thousands)
Years ended June 30
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

9  Business-type activities total expenses before transfers exceeded total revenues by $7.4 million while total expenses exceeded revenues by $1.4 million in the prior year.

 Total Citywide revenues befor e transfers were $136.4 million, an increase of approximately $14.2 million (11.6%) compared to the preceding fiscal year, wh ile total Citywide expenses before transfers decreased by $9.2 million (6.7%) from $136.9 million in 2020 to $127.8 million in 2021.

 Revenues are classified into program and general revenues. Pr ogram revenues of approximately $78.9 million, which are used to offset program expenses under each functional activity, made up 57.9% of total citywide revenues for the current fiscal year. General revenues of approximately $57.5 million, which are used to offset the additional expenses net of program revenues, made up the remaining 42.1% of total revenues.

The overall increase of 11.6% in total revenues ($14.2 million) for the City was primarily due to increases in sales and proper ty tax. Sales Tax accounted for $9.5 million of the increase, the majority of this coming fr om the new Measure H Transaction and Use Tax approved by Montebello voters in March 2020. Property Tax increased $2.8 mi llion, as overall assessed value in the City increased by 5.0% from the prior year.

 The largest City-wide revenues came from four sources: charge s for services (e.g. business license fees, building permits, hotel charges and bus fares) at $31.8 million (23.3%), operating grants and contributions (e.g. allocations of funds derived fro m Los Angeles County Metropolitan Transportation Authority Local Return Funds Propos itions A and C, and Measures R and M, as well as asset forfeiture funds contributed from the Justice Department and US Treasury) at $34.2 million (25.0%), property taxes at $21.4 million (15.7%), and sales taxes at $22.3 million (16.3%). Property taxes include the property taxes derived from the 1946 voter approved initiative to provide restricted revenue to pay for the retirement benefit costs of City employees, which is recorded in a separate fund from the General Fund.

 Revenue from charges for services decreased by $2.2 million (6.5%), property tax increased by $2.8 million (14.7%) and sales taxes increased by $9.5 million (73.7%). Operating grants and contributions decreased by $6.2 million (15.3%).

 Total citywide expenses decreas ed by $9.2 million, mainly due to the settlement of unfunded pension liability in the prior year.

 The cost of serving residents for the year includes: $54.8 million for public safety, $41.7 million for transit, $2.5 million for general government, $2.7 million for public works, and $16.5 million for other services such as recreation, community development, t he golf course, water utility fund, and two hotels.

Governmental Activities

 As reflected in the Statement of Activities schedule above, G overnmental activities increased the City's net position by $16. 1 million. Key factors of this c hange in governmental activities include the following based on the government-wide statement of activities.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

10 Revenues:

• Total governmental activitie s revenues increased by $15.7 mi llion (22.9%). This is mainly due to increases in sales tax and property tax revenues. The largest single source of the increase is from the voter approved Measure H Transaction and Use Tax, approved in March 2020.

• Sales tax revenues were the la rgest portion of total governm ental activities revenues (26.5%).

Sales tax revenues increased by $9.5 million (73.7%) compared t o 2020 (see bullet point above).

• Property tax revenues were t he second largest revenue source for governmental activities (25.5%). This includes the 1946 vo ter-approved retirement porti on of property tax (e.g. property tax override). Property tax revenues inc reased by $2.8 million (14.7%) from 2020, primarily due to the increase in annual assessed valuations (i.e., property values).

• Charges for services were the third largest source of revenu e for governmental activities (17.1%). Charges for services in governmental funds include lic enses and permits, fines and forfeitures, waste collection, etc. Compared to the prior fisca l year, this program revenue increased by approximately $1.4 mi llion (10.5%), primarily from cannabis permit related revenue as more non-storefront r etail operations began normal o perations, contributing revenue based on sales and other factors. This source of revenu e offset decreases in fines and forfeitures and community services related program revenue caused by the suspension of street sweeping enforcement and the cancellation of community services programming due to the ongoing impacts of the Coronavirus pandemic.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

11 Expenses:

The cost of providing all gover nmental activities in 2021 was $ 68.0 million before applying program revenues of $26.5 million, a decrease of approximately $13.7 million (16.8 %) from 2020. Certain areas such as Public Safety saw increases year over year ($54.8 million vs. $41.0 million) while most other functional areas saw decreases. Fo r example, Public Works had e xpenses of $2.7 million a $7.3 million decrease, and General Gov ernment was $13.3 million lowe r in FY 2020-21 ($2.5 million vs. $15.8 million).

The remaining $41.5 million of governmental activities expenses is considered “public benefit” portion which was funded by general reve nues primarily derived from tax es (i.e, sales, property, transient occupancy, etc.).

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

12 Business-type Activities

The City operates the following business-type activities: Trans it System (i.e, Montebello Bus Lines), Golf Course, Hilton Garden Inn, Home2Suites, and Water Utility. In 2019, the Detention fund was transferred from Business-type activities to Governmental activities and is now recorded as a function of the Police Department in the General Fund portion of the bud get. The City’s Transit System is the largest business-type operation, followed by the Hilton Garden Inn, Home2Suites and the Golf Course.

Business-type activities decreased the City’s net position before transfers by $7.4 million, a decrease of $6.0 million as compared to the prior year, primarily a result of a decrease in overall revenues and an increase in operating expenses.

Total revenues for business-ty pe activities were $52.4 million, compared to $53.9 million in the previous fiscal year, constituti ng a 2.7% decrease. The overall decrease is primarily a result of the lower revenues generated from hotel operations, which is a direct result of the coronavirus pandemic and its impact on hotel occupancy rates. In addition, the Hilton Garden Inn was closed between March and September 2020 in order to undergo a planned, complete reno vation. The pandemic has continued to suppress hotel occupancy rates, but there have bee n improvements in recent months that indicate a slow return to pre-pandemic leisure and business travel activity.

It should be noted that the City’s bus operations were impacted by the pandemic, leading to lower bus fare related revenue. Decreased ri dership is directly related t o changes in bus schedules and routes in an effort to promote social distancing and protect riders and employees.

Approximately 33.1% of revenue ca me from Charges for Services, which was generated from bus fares, special contracts, revenue from hotel room fees and golf course green fees, while the remaining

66.9% comes from State and Federal subsidies in the form primar ily of Transit related grants and related revenue from Federal, State and local (i.e., Los Angele s County Metropolitan Transportation Authority) agencies.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

13 City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

14 • The Transit System reported operating revenues of $1.4 million, $1.6 million (54.1%) lower than in 2020 due to lower ridership. This lower ridership can be directly attributed to the coronavirus pandemic and the suspension of bus operations as part of State orders aimed at reducing the spread of COVID-19. Non-operating revenues and capital grants r eceived in 2021 and 2020 were $35.0 million and $32.5 milli on, respectively. Operating e xpenses in 2021 were $41.7 million; approximately $4.7 million higher than in 2020. Net position decreased by $6.8 million in 2021 compared to a decrease in net position of $1.4 million in 2020.

• The City’s Golf Course generated slightly higher revenues for FY 2020-21 compared to the prior year due to improvements in operations from a new management co mpany. Operating expenses increased by $402 thousand for the year primarily due to a new landscape contract.

As a result, the Golf fund ended the fiscal year with a net inc ome before transfers in of $96 thousand, a $526 thousand improvement over the prior year, redu cing the subsidy needed from General fund.

• The Hilton Garden Inn reflec ted operating net loss before de bt service of $1.0 million for FY 2021, a 829.5% decrease compared to last year. This decrease is directly attributable to the negative impact the coronavirus had on occupancy rates, as well as the six-month closure (discussed above) necessary for a complete remodel of the venue . Operating revenues decreased by $2.4 million (53.4% ), a combination of reduced ope rations in line with lower occupancy rates, while operating expenses decreased by 28.1%.

• The Montebello Home2Suites reflected operating net income before debt service of $2.7 million.

It had a net income of approximately $368 thousand after bond interest expense paid related to its construction.

Governmental Funds Financial Analysis (Reporting the City’s most Significant Funds)

Governmental Funds. The focus of the City's governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information may be useful in assessing the City's financing r equirements, in particular, una ssigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City's governmental funds reported total combined ending fund balances of $63.3 million, a decrease of $6.7 million (9.5 %) as compared with the prior fiscal year. All governmental fund bal ances are either non-spendable, restricted, committed, assigned, or unassigned pursuant to GASB 54.

Non-spendable indicates they are fund balances tied to inventories, prepaid expenses and property held for sale. The restricted fund balance category includes a mounts that can be spent only for the specific purposes sti pulated by constituti on, external resource providers, or through enabling legislation. These restrictions of fund balance are to indicate that portions of fund balance are not available for new spending, becaus e they have already been comm itted to: 1) finance Special Revenue Fund expenditures, 2) pay debt service, or 3) finance ongoing capital projects.

Amounts in the committed fund balance are constrained for specific purposes that are in ternally imposed by the government through formal written action of the City Council. Amounts in the assigned fund balance classification are intended to be used by the gove rnment for specific purposes but do not meet the criteria to be classified as restricted or committed. The City has not designated committed or assigned fund balances as of June 30, 2021 (see next paragra ph for further explanation).

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

15 Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.

It should be noted that updated comp rehensive reserve policies were originally adopted by the City Council as part of the Fiscal Y ear 2020-21 budget adoption proc ess. These reserve policies created commitments and assignments in line with GASB 54, detailing spe cific uses for the commitments or assignments such as “Economic Unc ertainty” or “Capital Projects . These new policies, and the assignment of portions of the General Fund’s fund balance, will be fully implemented once total fund balance levels have risen to a point where the reserve categori es can be fully funded. A complete copy of the reserve policies can be found in the City’s adopted budget.

General Fund is the City's main operating fund. It is used to a ccount for revenues and expenditures necessary to perform basic gover nment functions that are not ac counted for through other special revenue and grant funds. These are the typical services residen ts see daily: police and fire service, street maintenance, community services programming, etc.

In Fiscal Year 2020-21, the General Fund ended the year with a deficit of $1.9 million compared to a deficit of $10.8 million in the previous fiscal year.

2021 2020 Amount %
Operating revenues $ 56,114 $ 41,918 $ 14,196 33.9% Operating expenditures 66,860 57,149 9,711 17.0% Excess of revenues over (under) expenditures (10,746) (15,231) 4,485 -29.4% Net operating transfers 3,099 3,659 (560) -15.3% Proceeds from capital lease 5,785 815 4,970 100.0% Surplus (deficit) (1,862) (10,757) 8,895 -82.7% Beginning fund balance 9,447 20,204 (10,757) -53.2% Ending fund balance $ 7,585 $ 9,447 $ (1,862) -19.7% Change
City of Montebello
General Fund
Years Ended June 30
(in thousands)
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

16 The key factors affecting the fund balance of the General Fund for FY 2020-21 are as follows:

• General Fund revenues increased by $14.2 million (33.9%) from the prior year which is primarily due to the overall increase in sales and property tax revenues. The increase in sales tax is attributed to the approval of a new Transaction and Use Tax (Me asure H) in March 2020.

Montebello residents approved the new ¾ cent transaction tax, which went into effect July 1, 2020. Fiscal Year 2020-21 also saw an increase in retail econom ic activity due to lesser mandated coronavirus closures of department stores, restaurants , bars, and other sales tax generating operations, when compared to the prior fiscal year.

• The increase is the property tax revenues is primarily due to the increase in annual assessed valuations, which saw a 3.2% increase to the median value of a detached single family home in Montebello when compared to the prior year ($650,000 vs. $62 7,500), and an overall increase of 5.0% in assessed values of all property in the City

• General Fund expenditures, excluding interfund charges, increased by $9.7 million (17.0%). This is mainly caused by increases fro m the purchase of two properti es on Whittier Boulevard as well as vehicle purchases by the Police Department. Of the total general fund expenses, Public Safety accounted for 48.8%, Public Works was 15.9% and General Government was 12.5%.

Retirement Fund is reserved for the payment of retirement expenses (both Normal Cost and Unfunded Accrued Liability) for all employees of the City. The Retiremen t Fund is financed by the retirement portion of the property tax revenue (i.e., property tax overrid e) pursuant to a 1946 voter approved initiative to provide for the re tirement benefit costs of City employees. The City ’s Retirement Fund increased its net position by $3.9 million in Fiscal Year 2020-21 to $17.6 million. The total net pension asset excluding the Transit fund was $1.5 million as of the end of FY 2020-21. The City issued $153.4 million in Pension Obligation B onds (POBs) in May 2020, the pro ceeds of which were used to completely extinguish the unfunded accrued liability (UAL) per the 2018 actuarial valuation from PERS.

Variance
with Final
(in thousands) Budget Variance
2021 Positive 2020 with Prior
Original Final Actual (Negative) Actual Year
Revenues
Sales taxes $ 18,241 $ 18,241 $ 22,270 $ 4,029 $ 12,818 $ 9,452 Property taxes 13,026 13,026 13,715 689 5,802 7,913 Other taxes 599 599 477 (122) 533 (56) Franchise taxes 2,272 2,272 2,316 44 2,200 116 Licenses and permits 4,873 4,873 5,769 896 4,790 979 Fines and forfeitures 2,600 2,600 2,312 (288) 2,186 126 Investment income 150 150 77 (73) 137 (60) Intergovernmental 6 790 1,096 306 6,910 (5,814) Charges for services 7,220 7,220 6,317 (903) 6,053 264 Other revenue 384 384 1,763 1,379 490 1,273 Total revenues $ 49,371 $ 50,155 $ 56,114 $ 5,959 $ 41,919 $ 14,195 Budgeted Amounts
City of Montebello
General Fund
Year ended June 30
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

17 Proposition C Fund- is used to account for the receipt of the h alf-cent sales tax allocated by Los Angeles County Metropolitan Transportation Authority (LACMTA). During the year ended June 30, 2021, the net position decreased by $876 thous and primarily due to expenditures related to various capital projects citywide focused on road and street repair.

Public Financing Authority Debt Service Fund is used to account for the accumulation of resources required for the payment of interest and principal on all revenue bonds issued by the Public Financing Authority. During the year ended June 30, 2021, the net position decreased slightly.

Self-Insurance Fund is the City’s lone Internal Service Fund which is used to set aside funding to cover workers’ compensation, liability claims, and potential future claims. The Self Insurance fund ended the year with deficit net position of $13.9 million compared to a d eficit net position of $13.4 million in the prior fiscal year. The increase in deficit of $447 thousand was primarily a result of an increase in the costs of claims and premiums. The City has a new third party ad ministrator as of May, 2020 and is focused on reducing its workers compensation and general liability claims costs.

Proprietary Funds

The City's proprietary funds account for the City’s business-type activities.

Transit:

The Transit System incurred an operating loss of $40.3 million compared to $34.1 million in the prior fiscal year, an increase in loss of approximately $6.3 million (18.5%).

Operating revenues include bus fares and special contracts which totaled $1.4 million, which was $1.6 million lower than the prior year total of $3.0 million, primarily due to lower ridership. The lower ridership was due to the suspension of bus operations early in the fiscal year in an effort to abide by State and

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

18 County orders aimed at minimizing the spread of COVID-19. Operating expenses for Transit amounted to $41.7 million in 2021, an incr ease of $4.6 million from $37. 1 million in 2020. Operating expenses included $5.0 million in depreciation expense reported as required by accounting standards.

The operating loss was offset b y approximately $23.2 million in operating subsidies from the Los Angeles County Metropolitan Trans portation Authority (LACMTA), and capital contributions of $11.8 million. Total subsidies from various sources was approximately $2.5 million higher than the prior fiscal year, resulting in a net loss of $6.8 million, compared to $1.4 million net loss in the prior year.

Golf:

The Municipal Golf Course incurred operating income of $187 tho usand, which was $514 thousand more than the prior year. Its operating revenues for the FY 202 0-21 were $3.0 million and operating expenses were $2.8 million. Operat ing revenues were 44.6% highe r than in the prior year. The City engaged a new management company i n March 2020, and operations have improved at the Golf Course, especially in the area of revenue collections. Total operating expenses, which included $233 thousand of depreciation expense, increased by $402 thousand (1 6.9%), primarily due to increased contract costs from a new landscape maintenance provider. As a result, the subsidy needed from the General Fund was decreased when compared to prior years.

Hilton Garden Inn:

The Hilton Garden Inn reflected operating revenues of $2.1 mill ion, $2.4 million (53.4%) lower than the prior fiscal year. This is primarily due to the negative im pact the coronavirus pandemic had on occupancy rates, coupled with a s ix-month closure (March-Septem ber, 2020) required for the complete remodel of the propert y. Operating ex penses decreased by 28.1% due to lower administrative expenses directly related to lower occupancy and the renovation related closure

Home2Suites:

Home2Suites generated approximately $8.4 million in revenues and incurred $5.6 million in operating expenses. As a result, the hotel had a net operating income of $2.7 million dollars in its second full year of operations. It has a net income of approximately $368 t housand after bond interest expense paid related to its construction.

Capital Asset and Debt Administration

Capital Assets

The City's capital assets for i ts governmental and business-typ e activities as of June 30, 2021 amounted to $206.0 million, net of accumulated depreciation. Capital assets include land, buildings, improvements, machinery and equi pment, park facilities, roads, highways, and bridges. The City's capital assets net of accumulated depreciation increased by 9.2% over the prior year primarily due to ongoing construction projects.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

19 The capital asset classes include:

• Sewer system, including sewe r pipes, pumping stations, manholes, and laterals;

• Storm drain system, includi ng storm drain pipes, flood control channels, and catch basins;

• Streets, including pavement, curb and gutter, sidewalks, medi ans, greenways, block walls and traffic signals;

• Buildings, including building remodels, building lighting sys tems, building equipment, and building roofs; and

• Parks, including associated s tructures and infrastructure assets.

Major capital asset transactions during the current fiscal year included the following:

• Building and Improvements are t he largest categories of capital assets of the City, making up 50.5% of the total capital assets. During the fiscal year, the City purchased a property at 715 W. Whittier Blvd for a tot al of $1.2 million, $769.9 millio n attributed to the building and $433.1 million for the value of the land.

• Machinery, Equipment, and Automotive Equipment totaled approx imately $26.8 million in 2021 which included: purchases of one (1) new CNG Bus, 13 police and code enforcement vehicles, new air compressors, etc.

Additional information on the Ci ty's capital assets can be foun d in Note 3 to the basic financial statements section of this report.

Long-term Debt

At the end of Fiscal Year 2020-21, the City had total debt outstanding of $324.6 million, a decrease of $146.2 million compared to the prio r year. This decrease is dir ectly attributable to the elimination of $144.6 million in net pension liability from the issuance of pension obligation bonds (POBs) at the end of FY 2019-20.

2021 2020 2021 2020 2021 2020
Land $ 2,378 $ 1,945 $ 6,307 $ 6,307 $ 8,685 $ 8,252 Rights-of-way 14,392 14,392 - - 14,392 14,392 Construction in progress 32,503 11,517 5,609 3,118 38,112 14,635 Buildings and improvements, net 30,872 31,209 73,268 76,572 104,140 107,782 Machinery and equipment, net 8,319 8,723 18,502 21,456 26,821 30,179 Infrastructure 13,866 13,370 - - 13,866 13,370 $ 102,330 $ 81,157 $ 103,685 $ 107,452 $ 206,015 $ 188,609 Total
City of Montebello
Summary of Capital Assets, Net of Depreciation
As of June 30
(in thousands)
Governmental Activities Business-type Activities
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

20 The outstanding debt includes $255.0 million of revenue bonds a nd $30.4 million of other postemployment benefit obligation. The remaining $39.3 million relates to the claims payable, notes payable, capital leases and comp ensated absences. Pension liabi lity decreased $144.6 million compared to 2020 due to the settlement of the unfunded accrued liability (UAL) per the 2018 actuarial valuation from PERS using the pr oceeds of the pension bond issu ed in May 2020. Total long-term claims payable as of June 30, 2021 was $23.6 million, an increa se of $1.5 million compared to prior year based on an actuarial report. Outstanding debt is summarized below.

Additional information on the City 's long-term debt can be foun d in Note 8 to the basic financial statements section of this report.

Credit Rating

As of the date of this ACFR, the City S&P underlying credit rat ing is “A+”, which represents an improvement of one-step (from “A ”). The “A” rating was provided in December 2019 as part of debt issuance for the “Pav ing the Way Project” (Sales Tax Revenue Bo nds, Series 2019ABC) and refinancing of Lease Revenue Bonds of the Montebello Hilton (Hilton Garden Inn). The upgraded “A+” rating was awarded with the issuance of the Pension Obligation Bonds in May 2020. It should be noted that the “A+” rating was reaffi rmed, and the previous “unstable” outlook provided as part of the POB issuance was removed and replaced with “stable” with S&P’s annual credit update review conducted in July, 2021.

Economic Overview

Fiscal Year 2020-21 continued to be influenced by the global co ronavirus pandemic and the various economic and social responses to it. Responses to the pandemic varied by country, region, state and even locality. In the United Stat es, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) declared the start of a recession in February 2020, which ended in April 2020, making it the shortest recession on record. The Committee determined that a peak in quarterly economic activity occurred in t he fourth quarter of 2019, with a monthly peak in ec onomic activity of February 2020 marking the beginning of the “COVID-19 recession,” and a trough in economic activity occurring just two months later in April 2020
2021 2020 2021 2020 2021 2020
Revenue bonds, net $ 143,693 $ 149,785 $ 111,287 $ 114,347 $ 254,980 $ 264,132 Claims payable 23,601 22,121 - - 23,601 22,121 Notes payable 8,692 3,315 1,099 528 9,790 3,843 Capital lease obligation 1,403 1,993 240 423 1,643 2,416 Compensated absences 2,977 2,630 1,295 1,202 4,272 3,832 Net pension liability (asset) (1,467) 110,928 (974) 33,639 (2,441) 144,567 Other postemployment
benefit obligation 26,339 27,072 4,020 2,849 30,359 29,921 Sub total 205,238 317,844 116,966 152,988 322,204 470,832 Less current portion 16,162 6,808 3,968 3,992 20,130 10,800 Noncurrent portion $ 189,076 $ 311,036 $ 112,998 $ 148,996 $ 302,075 $ 460,032 City of Montebello
Summary of Long-term Debt
As of June 30
(in thousands)
Governmental Activities Business-type Activities Total
City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

21 This short-lived recession – and the concomitant pandemic related responses – continued to impact the economy into FY 2020-21. Howev er, as evidenced by much stro nger than anticipated sales tax revenue performance, the local Montebello economy fared better than anticipated when the FY 2020- 21 budget was being developed. The surge in coronavirus cases i n Fall and Winter of 2020 did not negatively impact economic activity to the extent witnessed by the original outbreak in Spring, 2020.

However, it should be noted that t he impacts from the “Delta Va riant” and more recent “Omicron Variant” did not impact FY 2020- 21 but could negatively influence the national economy in FY 2021- 22 and beyond, with unknown impacts locally.

More generally, Gross Domestic Product (GDP) is forecast to gro w by an annualized rate of 5.0% in the fourth quarter of 2021 (October – December), vs 2.0% growth in the third quarter of 2021 (July – September). Overall annual GDP growth for 2021 is forecasted at 5.5%, with a 3.5% growth predicted for 2022 and 2.9% in 2023. There is renewed concern that a resu rgence in new COVD-19 cases will be seen in the first quarter of 2022, mimicking a similar patte rn seen in early 2021. This concern is coupled with the persistence of hi gh inflation rates. Neverthel ess, there are projections of robust economic expansion over the next two years, despite the pall cast over the economy by the pandemic.

The good news is the bulk of economic growth will be associated with continued expansion in consumer spending. Locally, that could equat e to a continuation of strong sales tax results as retail businesses in Montebello see impr ovement in activity. More gene rally, as online retail activity continues to grow, its importance to local cities will also exp and as the City’s share from the County sales tax pool grows.

Also portending positive economic activity is the forecasted re duction in the national unemployment rate. Nationally, it was 8.1% in 2020, is forecasted to be 5.4% at the end of 2021, and is expected to drop over the next two years (4.0% and 3.5% in 2022 and 2023 respectively). As the economy moves towards full employment, this should help with overall consumer sentiment.

Recently, much attention has been paid to inflation, and whethe r it is truly transitory or not. Some forecasts indicate inflation peaked in the second quarter of 2021 (April – June). Core CPI (which strips out volatile food and energy prices) is forecasted at 5.1% for 2021 but dropping to 2.7% and 2.5% in 2022 and 2023 (respectively). Anothe r measure of price changes in the market, the Personal Consumption Expenditure (PCE) def lator (the measure preferred b y the Federal Reserve), is also expected to slow in 2022 and 2023, returning to the 2.0% Federal Reserve target level.

In general, according to the UCLA Anderson Forecast, California ’s recovery and expansion will outpace those of the nation. While income inequality will persist throughout the State, forecasters point to the State’s better public health outcomes and transition to new ways of working (i.e., remotely) as the main reasons why California’ s recovery will be better than the United States’. Unemployment in the State – like the nation – will continue to fall from 7.6% in 2021, to 5.6% and 4.4% in 2022 and
2023 respectively.

The focus locally in Montebello continues to be on sales tax, as it comprises more than one-third of all General Fund revenue. Traditional (i.e., Bradley Burns 1%) sale s tax revenue for FY 2020-21 was $13.5 million, $1.7 million great er than the adopted budget. In addition, the new, voter approved Measure H Transaction and Use Tax outperformed budget by $1.7 m illion. These General Fund sources of revenue helped mitigat e lower revenue in charges for services and fines and forfeitures.

Suspension of street sweeping enforcement and cancellation of all community services’ programming resulted in lost revenue when compared to the adopted budget in these two categories.

City of Montebello
Management’s Discussion and Analysis
Year ended June 30, 2021

22 Based on these results for FY 2020-21, total sales tax revenue for FY 2021-22 is expected to be higher than the adopted budget. The City’s share of the County sales t ax pool has grown significantly since 2018 and 2019. The Supreme Court decision in Wayfair vs. South Dakota (2018) and the implementation of Assembly Bill 147 in 2019 have improved collection of sales tax by remote sellers.

A recent UCLA Anderson Forecast indicated that Wayfair and AB 147 lowered the cost of compliance and enforcement of sales tax remittance, which resulted in more reported taxable sales. More reported taxable sales equates to more sales tax revenue.

Montebello is also benefiting from the additional ¾ cent Transaction and Use Tax implemented in July 2020. The Measure H revenue is adding an additional $7.7 millio n plus to General Fund revenue in FY 2021-22, helping to close a twenty plus year history of structural deficits (i.e., adopted expenditures exceeding adopted revenues).

Management will continue to monitor the impacts which the pandemic continues to have on the local and regional economy, especially with the newly identified “Omicron Variant.” Staff will adjust revenue and expenditure forecasts as more data become available. Regard less, Montebello remains well positioned to weather the current economic storm, having recently improved organizational efficiencies and effectiveness, continued investing in capital projects and infrastructure improvements, and updated policies and procedures a s well as accomplished myriad other projects aimed at improving the City’s long-term financial standing.

Requests for Information

This financial report is designed to provide a general overview of the City's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report can be answered by visiting the City’s website at www.cityofmontebello.com.

I TEM #____
C

ITY OF MONTEBELLO
CI

TY COUNCIL AGENDA STAFF REPORT
TO
: Honorable Mayor and City Council Members
F
ROM: René Bobadilla, P.E., City Manager
B
Y: Michael Solorza, Finance Director
S
UBJECT: Fiscal Year 2021-22 Second Quarter Budget Report D
ATE: February 9, 2022
RECOMMENDATIONS:

It is recommended that City Council:

1. R
eceive and file this agenda report and the presentation on the Fiscal Year 2021- 22 Second Quarter Budget report; and,

2. A
mend the budget by increasing appropriations by the listed amounts in the various accounts listed on Attachment B; and,

3. U
pdate the Table of Organization/Master Position Control by adding two (2) Deputy Director positions in the Transit Department (Attachment C); and,

4. T
ake whatever additional actions necessary.

FISCAL IMPACT
T
he Fiscal Year 2021 -22 budget was adopted on June 23, 2021. Since adoption, changes (amendments) to the budget have been made. In addition, there are now six months of revenue and expenditure results that allow trends to be analyzed and an updated budget forecast to be presented. In addition, presentation of quarterly reports on a regular basis show good financial stewardship and promote transparency. 10 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 2 of 11 ends

This 2nd Quarter Budget report will focus on the General Fund, and will provide updated expenditure and revenue projections for the fiscal year. There will also be a brief discussion of the Golf Course fund as well as the two enterprise funds which record the activity of the City-owned hotels (Hilton Garden Inn and Home2Suites).

The General Fund budget was adopted with a $310,460 surplus; revenue of $61,719,150 forecasted higher than expenditures of $61,408,690. Since adoption in June, budget amendments have been made to department expenditure appropriations. Updated (unaudited) revenue performance at the June 30, 2021 fiscal year close has provided additional information to update FY 2021- 22 revenue projections. Also, six months of actual data provide trends for where expenditures are headed by year-end, allowing for updated estimates vs. the budget adopted seven months prior.

The updated expenditure and revenue projections for the General Fund are presented in the table below, as well as the adopted and amended budgets. In addition, a comparison of the 1
st Quarter projections are included, to show changes in revenue and expenditure projections since September. The updated projections indicate a $645,461 surplus for FY 2021-22 (revenue exceeding expenditures). Expenditures are proj ected to be $2.437 million greater than 1st quarter projections, offset by a growth in revenue estimates since then of $2.554 million.

The chart below provides historical context, plotting actual and budgeted General Fund revenues against expenditures:

40 45
50 55
60 65
70 75
FY 16-17 FY 17-18 FY 18-19 FY 19-20

BUD GET
FY 19-20 FY 20-21

BUD GET
FY 20-21 FY 21-22

BUD GET
FY 21-22 1QFY 21-22 2Q
Millions
General Fund Revenue vs Expenditures

TOTAL GENERAL FUND REVENUE TOTAL GENERAL FUND EXPENDITURES

FY 2021-222

ADOPT ED
FY 2021-22

AM ENDED
FY 2021-22

PROJECT ED
(1st Quarter)
FY 2021-22

PROJECT ED
(2nd Quarter)
Variance Qtr
- Qtr
EXPENDITURES 61,408,690 66,016,861 63,482,985 65,920,239 2,437,254 REVENUE 61,719,150 61,719,150 64,011,850 66,565,700 2,553,850 Surplus / (Deficit) 310,460 (4,297,711) 528,865 645,461 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

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There were slight surpluses in actuals pre-pandemic (i.e., prior to FY 2019-20). The large gap between revenue and expenditures in FY 2019-20 shows the impact of lower revenue (negatively impacted by the pandemic and its effects on the economy) plus one- time capital expenditures related to infrastructure projects: Taylor Ranch, City Hall roof, Police HVAC, etc. The surplus forecast for the current fiscal continues a positive trend where projected revenue exceeds forecast expenditures.

The paragraphs below present a more detailed discussion of the changes based on 2 nd
Quarter actuals and their impact on the forecast for fiscal year end. It should be noted that the updated revenue projections do not include rec ognition of revenue received through the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) program.

Further discussion below provide detail of how CSLFRF revenue will be recorded in the General Fund in FY 2021-22.

ANALYSIS
At the time the FY 2021- 22 budget was adopted on June 23, 2021, revenue and expenditure forecasts were based on April and May information, tempered and informed by prior year and historical data. The closing of the books for FY 2020- 21 provided additional insight into revenue and expenditure performance. That information along with additional data (i.e., actuals) from July – December allows an updated forecast for fiscal year-end to be presented. This 2 nd Quarter budget update will also serve as a “jumpi ng off” point to begin FY 2022-23 budget preparation discussions.

The paragraphs below present highlights of significant changes to revenue and expenditure projections in the General Fund, followed by a discussion of CSLFRF revenue and an overview of golf course and hotel operations.

Revenue
Overall, General Fund revenue is projected to be $ 4,846,550 higher than the adopted budget ($66.566 million vs. $61.719 million). This increase represents the net impact of changes to revenue accounts across the General Fund . The chart and table below presents high-level overviews of General Fund revenue – by totals and major revenue category:
57 56 55
51 49
56 68
62 64
67 FY 16-17 FY 17-18 FY 18-19 FY 19-20

BUDGE T
FY 19-20 FY 20-21

BUDGE T
FY 20-21 FY 21-22

BUDGE T
FY 21-22 1Q FY 21-22 2Q

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

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FY 21-22

ADOPT ED
FY 21-22

FORECAST
(2QTR) Variance
SALES TAX 20,765,000 24,120,000 3,355,000
PROPERTY TAX 14,293,100 14,379,100 86,000
OTHER TAXES 610,000 625,000 15,000
FRANCHISE TAXES 2,163,000 2,338,000 175,000
LICENSES AND PERMITS 5,942,000 6,620,000 678,000
FINES AND FORFEITURES 2,250,000 2,860,000 610,000 INVESTMENT INCOME 575,000 524,000 (51,000)
INTERGOVERNMENTAL 7,500 19,700 12,200 CHARGES FOR SERVICE 7,291,850 7,326,150 34,300
OTHER REVENUE 882,500 1,114,550 232,050
Sub-total Operating Revenue 54,779,950 59,926,500 5,146,550 TRANSFERS IN 4,100,000 3,800,000 (300,000)

PROCEEDS FROM CAPITAL LEASE - - - ADMINISTRATIVE OVERHEAD 2,839,200 2,839,200 -
6,939,200 6,639,200 (300,000)
61,719,150 66,565,700 4,846,550

The largest positive change comes in the Sales Tax category , showing an increase of

16.2%, or $ 3.355 million over the adopted budget . The pandemic wreaked havoc with the economy and soc iety the past two years . It was prudent to conservatively project sales tax revenue for FY 2021- 22, especially not knowing how the final quarters of FY 2020-21 would play out.

In addition, the newly enacted Measure H transaction and use tax had only become active as of July 1, 2020; therefore no prior historical data was available to inform projections .

Staff purposely recommended very conservative projections for sales tax performance given the uncertain nature of the pandemic’s impact on the local economy.

The table below shows FY 2020-21 budget and actuals and the FY 2021- 22 adopted budget and updated 2
nd Quarter forecast for all three major sales tax revenue streams:

2020-21
Adopted
Budget
2020-21
Actual
FY 21-22

ADOPTED
BUDGET
FY 21-22

UPDATED
FORECAST Variance
Sales Tax 11,270,000 13,507,132 12,470,000 14,225,000 1,755,000 Sales Tax-Monterey Park Martketplace 971,000 1,064,486 1,125,000 1,125,000 0 Sales Tax-Measure H 6,000,000 7,698,629 7,170,000 8,770,000 1,600,000 18,241,000 22,270,247 20,765,000 24,120,000 3,355,000

The Bradley Burns 1% sales tax forecast shows 5.3% growth from FY 2021- 22 actuals, while Measure presents a 13.9% growth over prior year actuals. The economy clearly continues to improve – at least locally. Staff has conferred with its sales tax consultant (HdL Companies) and feel confident in these updated estimates. Moreover, HdL has indicated that in the instance of new Transaction and Use Tax, it can take one to two quarters for retailers to fully understand and remit the new amounts. Heading into the second full year of Measure H, current trends appear more accurate than at this point last fiscal year.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

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The increase of $678,000 in the Licenses and P ermits category is due to improved performance in Business License , accounting for $425,000 of that increase. Every approved, legal business operating in Montebello must have a business license. The City contracted for the administration of this program to HDL and Companies in October, 2020. The knowledge and expertise of the HDL staff have increased the number of businesses complying with the City’s business license requirement. In addition, HdL staff consistently monitor and send renewal notices, ens uring business remain current with their licenses. With additional businesses added through compliance efforts, and annual renewals properly followed up on, overall revenue has increased. It should also be noted that the full -time City position previousl y responsible for business license program management has remained vacant since November, 2020. This vacancy provides additional savings on the expense side of the ledger.

This improved revenue performance has occurred despite the fact that b usiness license rates remain frozen at 2010 levels. Staff re- implemented the freeze in spring, 2021 response to the pandemic. However, Staff have reviewed the freeze with the City Attorney’s office and its consultant (HDL) and have a proposal for lifting the freeze and updating fees. The update would improve equity amongst business types in the City, as well as improve overall revenue performance. Staff will follow-up with the City Council in subsequent meetings.

The Fines and Forfeitures category is projected to see $610,000 in additional revenue for FY 2021- 22. The primary reason is improved collection and remittance of moving violations and parking tickets. The pandemic caused a decrease in the remittance of fine payments – with suspended street -sweeping related parking enforcement and leniency by the Los Angeles County superior court – through 2020 and into 2021. Staff is currently reviewing proposals to improve street sweeping related parking enforcement, which will help the City comply with cl ean water mandates as well as improve City streets’ aesthetics. Currently, part-time Parking Enforcement staff has been hired, as the City looks to improve citywide parking enforcement efforts. The by -product of this improved performance will be additional parking enforcement revenue.

Investment Income is projected to be reduced ($51,000) due to the continued low-interest rate environment. Other Revenue” has some one-time sources combined with prior year and current year reimbursements of public safety training costs. There is also $175,000 estimated for the sale of water rights, assuming the sale of the City’s water system is finalized this fiscal year.

The $34,300 increase to Charges for Service is from improved fire inspection collection and addit ional fire plan check revenue. The newly rejuvenated Fire Department Prevention Bureau – with a full-time, professional Fire Marshall and (currently) one full - time Fire Inspector I – has allowed the City to meet its State Fire Code inspection mandates. T his activity in turn means additional inspection revenue, as staff time is recovered through charging approved inspection fees.

Transfers In (non-operating) revenue will be reduced by $300,000. This reduction is from lower pension (i.e., PERS) costs. This particular Transfer In reimburses the General Fund CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 6 of 11 ends

for pension related expenses, utilizing revenue from the Property Tax Override. While revenue is reduced, there is a concomitant reduction in pension expenses in operating departments.

The additional $4.847 million in General Fund revenue projected for FY 2021- 22 is a positive sign of the recovering economy, improved City operations, and other related changes. Staff will continue monitoring revenue actuals, and will present an updated forecast as part of the FY 2022- 23 budget development process . The following paragraphs provide additional analysis on General Fund expenditure projections.

Expenditures
General Fund expenditures are projected to be $65,920,239 for FY 2021-22. This $4.512 million (7.3%) increase over the adopted budget takes into account budget amendments approved by the City Council since July, encumbrance rollovers from the prior year, and updated forecasts for various line- item expense categories . There are budget amendments needed (Attachment B) in order to match budgets with updated projections.

Attachment B provides detail on the budget amendments needed, with a description for each amendment.

The chart below provides a historical trend back to FY 2016- 17 of Genera l Fund expenditures (actuals and budget):

54 52 52 54
60 60
56 69
61 66 63 66
40 45
50 55
60 65
70 75Millions

TOTAL GENERAL FUND EXPENDITURES

The table below shows – by Department/operational area – the adopted and amended budgets for FY 2021- 22, as well as the updated projections based on actuals through December. The “Variance” column shows whether the 2
nd Quarter projected amount is
greater than (positive amount) or less than (negative amount) the amended budget:

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

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FY 2021-222

ADOPT ED
FY 2021-22

AM ENDED
FY 2021-22

PROJECT ED
(2nd Quarter)
Variance
(Proj vs.

Amended)
A DMINISTRA TION/ELECTED 2,354,400 2,362,821 2,521,338 158,517 HUMA N RESOURCES/INFO TECH 1,928,000 2,009,987 1,978,497 (31,490) PUBLIC WORKS 9,512,600 11,331,100 11,926,144 595,044 FINA NCE 2,130,300 2,130,511 2,409,610 279,099 COMMUNITY DEV ELOPMENT 2,489,820 3,064,790 2,673,808 (390,982) PA RKS A ND RECREA TION 5,361,550 5,376,521 5,564,356 187,835 POLICE 18,818,950 19,477,674 19,398,154 (79,520) FIRE 15,814,270 16,206,269 15,034,454 (1,171,815) NON-DEPA RTMENTA L 2,998,800 4,057,188 4,413,878 356,690 61,408,690 66,016,861 65,920,239 (96,622)

For Administration (which includes the City Manager’s office, City At torney and elected officials), the primary reasons for the projected overage is increased legal costs, and additional advertising and printing expenses . Finance’s projected overage is generally due to additional professional services costs. For example, additional contract services expenses related to animal control (SEAACA) and business license administration is causing the overage forecast.

Most of the $595,044 variance in Public Works is from the Montebello Boulevard improvement project. There is a portion of this $7.0 million project ($498,000) that will be reimbursed by the Montebello Hills developer, and which is recorded in the General Fund.

Details of the reimbursement are still being discussed, with anticipation of these costs being fully reimbursed. Once that occurs, revenue will be recorded in the General Fund and budget adjustments will be made to reflect the additional expenses and revenue.

Currently, out of an abundance of caution, the General Fund revenue forecast does not include any anticipated reimbursement. Should the reimbursement occur in the current fiscal year, that action would increase the $66.566 million revenue forecast by the amount reimbursed.

The overage for Non-Departmental reflects the anticipated spending of remaining 2009A Excess Bond Proceeds, as well as higher than anticipated retiree medical costs. Staff in Public Works is reviewing pending facility and other projects that are 2009A Excess Bond Proceeds eligible. The recommended budget amendments (Attachment B) will address these over budget areas in the Non-Departmental function.

The remaining departments are showing varying degrees of budget savings. In Community Development, there is a reduced use of some professional services in the areas of plan check and cannabis consulting. As the City adds professional staff in various areas – Building Official, Combination Inspector, etc. – the reliance on third party consultants to provide services is reduced. This adjustment to operations improv es service, while reducing the dependence on consultants.

Human Resources and Fire are realizing salary and benefit, equipment and supplies related savings. The adopted budget was developed assuming a certain staffing plan – making allowances for exist ing staff while projecting the cost impacts of additional staff added through the budget process. Offsetting some additional staff related costs are CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 8 of 11 ends

unexpected vacancies that occur across departments, or recruitments to fill vacancies taking longer than expected. Both of these situations ultimately produce (unanticipated) salary savings in the aggregate.

The Fire Department has so far produced savings in regular salaries and overtime across all divisions, but primarily in the Suppression Division. Ove rtime is generally trending lower ($425,000 under budget) in Suppression due to the fact that there are fewer vacancies at this point in the fiscal year than in prior fiscal years. Nearing full staffing of Firefighters and Engineers requires less overtime to backfill the vacant positions. Salary savings are being seen in the Prevention and Communication Divisions, with anticipated/budgeted positions taking longer to be filled than anticipated. Fire is also trending lower in some supplies, equipment and contract categories across all divisions. .

Police is showing a slight savings ($79,500) vs. the amended budget, despite the increased need for overtime in some divisions. Overtime in Patrol and Communications is higher than budget ed. There are a variety of reasons for this: full -time vacancies requiring backfill, additional enforcement efforts for car cruising and other nuisances, special events, increased training (offsite) requiring the back fill of positions, etc.

The recommended budget amendments (Attachment B) will add budget where needed, “fixing” various over-budget line items. It must be noted that the projected total General Fund expenditure amount of $65,920,239 includes the line -items in Attachment B. In other words, increasing budget appropriations to align projected expenditures with amended budget will not further increase projected expenses for the General Fund. Staff will continue monitoring the budget and will recommend appropriation increase where and when necessary to ensure amended budget amounts match final expenditures.

In addition, the Table of Organization/Master Position Control will be increased by two (2) full-time equivalent (FTE) positions. The proposal is to add two “Deputy Directors” to the Transit Department. These positions would be funded 100% from the Transit Fund, and would have not fiscal impact to the General Fund. These positions would al low for additional management oversight of a large and complex department.

Golf Course and Hotels (Revenue and Expenditures)
The Golf Course (Fund 610) records revenue and expenditures from golf course operations as well as the Quiet Cannon. The majorit y of the activity in Fund 610 is from the golf course. The course continues to lose money, costing more to operate than the revenue it brings in to support labor and maintenance costs. While the General Fund subsidy has decreased the last few years ($471,000 for FY 2020-21 vs. $750,000 for FY 2019-20), there is still a projected subsidy for FY 2021-22.

Even with continued improvement in revenue, there is a projected deficit ( i.e., expenditures over revenue) of $ 53,500 by fiscal year end. Labor costs h ave been reduced vs. prior years , as course management and landscape services have been contracted. In addition, utilities expenses are approximately $400,000 annually (electricity, water, etc.), even with reduced costs for water as the course switched to the use of reclaimed water. W ithout significant adjustments to green fees or cart rental CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 9 of 11 ends

charges, revenue will not outperform expenses. In addition, the Golf Course is in need of significant capital investment – repairing and replacing sand traps, improving fairways and making other necessary repairs. There is not capital reserve in order to fund these types of necessary repairs, as the course continues to operate with a deficit.

The City continues to work closely with Top Golf to transform the entire golf course into a new entertainment venue that preserves its nature as a golf course, but makes necessary improvements to increase its profitability. Discussions continue on next steps on transforming the entire 118 acre golf course. The ultimate goal is to re-create the space into a venue that drives people to visit Montebello while also improving overall revenue performance.

The Hilton Garden Inn performed well in FY 2020- 21, despite the continuing negative impact of the coronavirus pandemic on leis ure and business travel. The hotel finished last fiscal year with $3.243 million in revenue vs. $3.855 million in expenditures, a $611,800 deficit. For the current fiscal year, revenue has picked up markedly from the same point one year ago. Year to date revenues for December 31, 2021 are $2,547,633, compared to $237,998 as of December 31, 2022. Expenditures for the current year are also up versus last year. But this is due to the hotel being open, requiring increased staff, supplies and related expens es. Current trends indicate a surplus of $545,000 for FY 2021-22.

The Home2Suites hotel performed very well last fiscal year, ending with a $378,400 surplus ($8.361 million in revenue against $7.982 million in expenditures). Revenue for the current fi scal year is slightly lower than the prior year: $3,007,794 vs. $3,345,755.

However, expenditures are trending lower in the current fiscal year, about $450,000 lower. The continuing economic recovery, especially in the leisure and travel industries as t he pandemic is slowly controlled will have a positive impact on the City’s hotels, allowing for pre-pandemic travel patterns and an increase in occupancy rates and room revenue. Staff will continue monitoring the City’s hotels and reporting their performance on a regular basis.

Coronavirus State and Local Fiscal Relief Funds (CSLFRF) At the September 1, 2021 Study Session, Staff presented an overview of the American Rescue Plan Act (ARPA) and specifically the use of fiscal relief funds (CSLFRF program).

The City will receive a total of $16.59 million in funds from the CSLFRF program, half of which was received in May, 2021, with the other half to be received by May, 2022.

ARPA contained a host of spending guidelines and restrictions on CSLFRF revenue (U.S.

Treasury Interim Final Rule published Mary 7, 2021 and Final Rule issued January 6, 2022, with an April 1, 2022 effective date). There are four primary eligible use categories for CSLFRF per the Final Rule (no changes to eligible uses from the Interim to the Final Rule):

A. Responding to the public health emergency by providing assistance to households, businesses or non-profits;
B. Responding to workers performing essential work by providing premium pay CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 10 of 11 ends

C. Provision of government services to the extent of the reduction in revenue (i.e., revenue loss)
D. Make investments in water, sewer or broadband infrastructure

Category “C” provides the most flexibility – and is the easiest to manage administratively – of the four eligible uses. The City calculated its revenue loss, utilizing Interim Final Rule guidance and workbooks from the League of California Cities / California Society of Municipal Finance Officers. The ensuing calculation produced a revenue loss amount of $20,524,069 for the period of July 1, 2019 through December 31, 2020 (eighteen months).

The revenue loss calculation has recently been updated, as required by mandatory reporting guidelines. As of December 31, 2021, the calculated revenue loss utilizing the calendar year method was $26,541,533. The only significant change impact Montebello was the ability to calculate revenue loss on a fiscal year or calendar year. Given the significant revenue loss using the initial calendar year method, Staff has determined to continue utilizing this method.

Since these revenue loss amounts exceed the City’s CSLFRF award ($20.52 million and $26.542 million vs. $16.59 million), Staff recommended at the Study Session that the entire CSLFRF amount be recorded under eligible use Category “C” (revenue loss).

Montebello received $8.3 million of funds in May, 2021, and that cash has been deposited for investment/safe keeping. There are accounting rules (Governmental Accounting Standards Board [GASB]) which govern this Federal funding, and the recognition of it as revenue. When first received, the revenue was booked as “unearned revenue,” identical treatment applied to the myriad Federal awards the City receives. The “unearned revenue” would then be “recognized” as it is used – per funding guidelines.

The City has now recognized a portion of the first $8.3 million tranche received last year.

Using guidance from the Final Rule, $4,191,015 will be recognized as General Fund revenue as of December 31, 2021. The plan is to then recognize the second half of the $8.3 million tranche as of June 30, 2022. The required “Project and Expenditure Report” submitted at the January 31, 2022 deadline through the U.S. Treasury’s reporting portal indicated the City’s use of the “Revenue Loss” category, and the recognition/expenditure of $4.2 million in CSLFRF revenue.

As mentioned in the paragraphs above, the updated General Fund forecast does not include any CSLFRF revenue. When the City closes its books for FY 2021-22, there will be an additional $8.3 million in General Fund revenue from recognition of ARPA funding.

However, it is important that the 2
nd Quarter report only show ongoing revenue and
expenditure projections, absent any one- time revenues (i.e., CLFRF) in an effort to be accurate and transparent about what the City’s true costs of doing business are balanced against ongoing (not one-time) revenue.

The presentation of revenue is done in such a manner so as not to overstate the projected year-end surplus. The $645,461 projected surplus for FY 2021- 22 indicates ongoing revenue vs. ongoing operating expenses. The importance of not including CSLFRF revenue is to better reflect in a more transparent manner what the City’s true ongoing CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Fiscal Year 2021-22 Second Quarter Budget Report

Page 11 of 11 ends

income vs. expenses will be.

The recognition of CSLFRF revenue will increase Gen eral Fund revenue, and improve reserves by the close of FY 2021- 22. The City has until December 31, 2024 to commit all funds ($16.59 million) and Staff will work to recognize revenue accordingly and in line with the Final Rule (and any subsequent guidance issued by the U.S. Treasury).

SUMMARY

This 2
nd Quarter Budget Report provides an overview of General Fund revenue and expenditure performance based on the first six months of FY 2021-22 (July – December).

A discussion of the handling and recognition of CSLFRF revenue has also been included.

The addition of two Deputy Director positions in the Transit Department is being proposed and necessary budget amendments (increases to appropriations) are also being recommended. T his preliminary budget “check -in” is an opportunity to update revenue and expenditure forecasts based on prior and current year actuals performance.

The General Fund is projected to have a $645,461 surplus (revenue over expenditures):

FY 2021-222

ADOPT ED
FY 2021-22

AM ENDED
FY 2021-22

PROJECT ED
(1st Quarter)
FY 2021-22

PROJECT ED
(2nd Quarter)
Variamce
Qtr - Qtr
EXPENDITURES 61,408,690 66,016,861 63,482,985 65,920,239 2,437,254 REVENUE 61,719,150 61,719,150 64,011,850 66,565,700 2,553,850 Surplus / (Deficit) 310,460 (4,297,711) 528,865 645,461

Staff will continue monitoring revenue and expenditure trends in the 3rd Quarter, and will utilize the additional data to provide a budget update as part of the Fiscal Year 2022- 23 budget development process . This 2 nd Quarter budget report also serves as the beginning of budget development for next year , utilizing projections to build next year’s budget.

City Council is being asked to receive and file this report and presentation, as well as approve the budget amendments presented in Attachment B in the amounts and to the accounts listed.

ATTACHMENTS:

A. Revenue and Expenditure Summary Tables
B. Budget Amendment Schedule
C. Master Position Control

General Fund Revenue Summary - by Major Category ATTACHMENT A1 Fiscal Years 2016-17 - 2021-22
Actuals, Budget and Forecasted
FY 16-17
ACTUAL
FY 17-18
ACTUAL
FY 18-19
ACTUAL
FY 19-20

ADOPTED
FY 19-20
ACTUAL
FY 20-21

ADOPTED
FY 20-21
ACTUAL
FY 21-22

ADOPTED
FY 21-22 1ST
QTR

FORECAST
FY 21-22 2ND
QTR

FORECAST
Forecast
Variance from
Budget
2nd Q
Variance from
1st Q
SALES TAX 13,267,373 13,118,981 14,031,972 13,146,732 12,817,884 18,241,000 22,270,247 20,765,000 22,675,000 24,120,000 3,355,000 1,445,000 PROPERTY TAX 11,042,346 11,359,512 12,191,977 12,740,406 12,701,368 13,026,000 13,714,582 14,293,100 14,293,100 14,379,100 86,000 86,000 OTHER TAXES 553,462 585,960 614,485 658,200 533,005 599,000 476,959 610,000 500,000 625,000 15,000 125,000 FRANCHISE TAXES 1,493,956 2,141,450 2,224,087 2,315,185 2,199,916 2,272,000 2,316,221 2,163,000 2,213,000 2,338,000 175,000 125,000 LICENSES AND PERMITS 4,186,912 4,452,210 6,215,378 5,132,840 4,776,531 4,872,800 5,775,694 5,942,000 6,255,000 6,620,000 678,000 365,000 FINES AND FORFEITURES 2,251,384 2,185,022 2,165,922 2,023,694 2,186,401 2,600,000 2,301,787 2,250,000 2,500,000 2,860,000 610,000 360,000 INVESTMENT INCOME 991,127 1,215,614 679,437 402,706 367,133 350,000 420,710 575,000 475,000 524,000 (51,000) 49,000 INTERGOVERNMENTAL 2,239 6,493 11,003 11,762 10,160 5,500 1,096,288 7,500 7,500 19,700 12,200 12,200 CHARGES FOR SERVICE 6,569,905 6,451,686 6,662,699 6,919,770 6,066,829 7,020,300 6,105,784 7,291,850 7,571,550 7,326,150 34,300 (245,400) OTHER REVENUE (2,317) (10,760) 211,746 - 259,247 384,000 1,640,198 882,500 882,500 1,114,550 232,050 232,050 Sub-total Operating Revenue 40,356,387 41,506,168 45,008,706 43,351,295 41,918,474 49,370,600 56,118,470 54,779,950 57,372,650 59,926,500 5,146,550 2,553,850 - - - - - - - - - - - - TRANSFERS IN 14,645,170 12,257,328 6,758,437 5,888,806 3,987,540 4,300,000 3,570,002 4,100,000 3,800,000 3,800,000 (300,000) - PROCEEDS FROM CAPITAL LEASE 591,423 9,725 1,547,962 - 815,153 - 5,785,000 - - - - - ADMINISTRATIVE OVERHEAD 1,700,004 1,887,113 1,886,402 2,106,117 1,883,090 2,030,500 2,054,000 2,839,200 2,839,200 2,839,200 - - Sub-total NON-Operating Revenue 16,936,597 14,154,166 10,192,801 7,994,923 6,685,783 6,330,500 11,409,002 6,939,200 6,639,200 6,639,200 (300,000) - TOTAL GENERAL FUND REVENUE 57,292,984 55,660,334 55,201,507 51,346,218 48,604,257 55,701,100 67,527,472 61,719,150 64,011,850 66,565,700 4,846,550 2,553,850 General Fund Expenditure Summary - by Department ATTACHMENT A2 Fiscal Years 2016-17 - 2021-22
Actuals, Budget and Forecasted
FY 2016-17
Actuals
FY 2017-18
Actuals
FY 2018-19
Actuals
FY 2019-20
Adopted
Budget
FY 2019-20
Actuals
FY 2020-21
Adopted
Budget
FY 2020-21
Actuals
FY 2021-22

ADOPTED
FY 2021-22

AMENDED
FY 2021-22

PROJECTED
(1st Quarter)
FY 2021-22

PROJECTED
(2nd Quarter)
Variance (Proj
vs. Amended)
Amend
Increase
Variance
1stQ v. 2ndQ
ADMINISTRATION/ELECTED 1,443,318 1,696,595 2,609,361 1,824,440 2,392,931 2,184,400 2,473,142 2,354,400 2,362,821 2,434,078 2,521,338 158,517 8,421 87,261 HUMAN RESOURCES/INFORMATION TECH 1,087,205 803,431 866,145 1,234,518 1,239,180 1,312,200 1,742,605 1,928,000 2,009,987 1,928,219 1,978,497 (31,490) 81,987 50,278 PUBLIC WORKS 8,054,815 8,160,100 8,056,232 8,946,743 8,865,983 8,329,500 9,956,283 9,512,600 11,331,100 10,915,249 11,926,144 595,044 1,818,500 1,010,895 FINANCE 2,057,687 2,126,820 2,025,854 2,364,003 2,227,568 2,158,800 2,201,293 2,130,300 2,130,511 2,274,796 2,409,610 279,099 211 134,815 COMMUNITY DEVELOPMENT 1,770,851 1,637,830 2,029,591 1,784,896 1,612,140 2,140,800 1,752,271 2,489,820 3,064,790 2,750,616 2,673,808 (390,982) 574,970 (76,808) PARKS AND RECREATION 3,137,144 3,212,671 3,322,872 4,741,300 4,472,874 4,467,100 5,078,367 5,361,550 5,376,521 5,306,265 5,564,356 187,835 14,971 258,091 POLICE 19,518,540 19,217,922 18,214,825 18,905,963 19,223,841 18,989,500 18,916,432 18,818,950 19,477,674 18,722,861 19,398,154 (79,520) 658,724 675,293 FIRE 12,542,175 12,472,672 12,901,041 11,908,253 15,114,996 13,690,200 15,310,305 15,814,270 16,206,269 15,171,837 15,034,454 (1,171,815) 391,999 (137,383) NON-DEPARTMENTAL 4,294,775 3,037,386 2,309,200 2,476,595 4,625,043 2,409,000 11,912,013 2,998,800 4,057,188 3,979,066 4,413,878 356,690 1,058,388 434,812 TOTAL GENERAL FUND EXPENDITURES 53,906,510 52,365,427 52,335,121 54,186,711 59,774,556 55,681,500 69,342,711 61,408,690 66,016,861 63,482,985 65,920,239 (96,622) 4,608,171 2,437,254 Budget Amendments ATTACHMENT B
2nd Quarter Budget Report
City Council Meeting, 02/09/2022
Account
Appropriation
Increase Amount Reason/Notes
100-40-400-6040.10 Finance, Administration Other Contract Services 400,000$ Higher than budgeted SEAACA costs, additional contract costs related to business license program administration (HdL and Companies), offset by higher revenue collection
100-70-510-5000.20 Parks and Recreation, Facilities Part-Time Salaries 100,000$ Additional part-time wages for reitred annuitant (960) assisting with various facilities projects/maiintenance
100-70-710-5000.30 Parks and Recreation, Facilities Part-Time Salaries 185,000$ Additional part-time wages related to 100-80-805-5010.10 Police, Patrol Overtime 380,000$ Additional overtime due to increased training (POST) from promotions (required training for new Sergeants, etc.), weekend enforcement of car cruising, Street Festival, Parade, etc. 100-80-805-5300.20 Police, Patrol PERS Retirement 125,000$ Retirement costs projecting higher, additional positions filled vs. when budget developed
100-80-820-5010.10 Police, Communications Overtime 120,000$ Vacancies in dispatch required additional overtime to cover shifts 100-99-5300.10 Non-Departmental Retiree Medical 200,000$ Retiree medical benefits, projecting higher (full impact of additional retirees in effect)
100-99-6040.10 Non-Departmental Other Contract Services 90,000$ Contract services related to utility savings review, additional costs offset by electrical, telephone and water utility savings 100-99-7060 Non-Departmental Acquisition 541,000$ Purchase of property at 715 W. Whitter recognized in current fiscal year (purchase approved prior fiscal year)
2,141,000
Account Description

ATTACHMENT C
FY 2019-20 FY 2020-21
FY 2021-22

ADOPTED
FY 2021-22
AMENDED Variance
Elected
City Councilmember 5.0 5.0 5.0 5.0 0.0
City Clerk 1.0 1.0 1.0 1.0 0.0
City Treasurer 1.0 1.0 1.0 1.0 0.0

7.0 7.0 7.0 7.0 0.0
Administration
City Manager 1.0 1.0 1.0 1.0 0.0
Assistant City Manager 1.0 1.0 1.0 1.0 0.0
Deputy Director 0.0 1.0 1.0 1.0 0.0
Public Information Officer 1.0 1.0 1.0 1.0 0.0
Deputy City Clerk 1.0 1.0 1.0 1.0 0.0
Assistant to the Deputy City Clerk 0.0 1.0 1.0 1.0 0.0
Records Coordinator 0.0 0.0 1.0 1.0 0.0
Office Manager 1.0 1.0 1.0 1.0 0.0
Administrative Secretary 1.0 1.0 0.0 0.0 0.0

6.0 8.0 8.0 8.0 0.0
Finance
Director of Finance 1.0 1.0 1.0 1.0 0.0
Deputy Director 0.0 1.0 1.0 1.0 0.0
Accounting Manager 1.0 1.0 1.0 1.0 0.0
Accounting Supervisor 1.0 1.0 1.0 1.0 0.0
Sr. Management Analyst 1.0 1.0 1.0 1.0 0.0
Management Analyst (Payroll) 0.0 0.0 1.0 1.0 0.0
Accountant 4.0 4.0 4.0 4.0 0.0
Finance Technician 5.0 5.0 5.0 5.0 0.0
Account Clerk II 5.0 5.0 5.0 5.0 0.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0

19.0 20.0 21.0 21.0 0.0
Fire
Fire Chief 1.0 1.0 1.0 1.0 0.0
Assistant Fire Chief 0.0 0.0 0.0 1.0 1.0
Deputy Fire Chief 0.0 1.0 1.0 1.0 0.0
Fire Battalion Chief 3.0 3.0 3.0 3.0 0.0
Fire Captain 12.0 13.0 13.0 14.0 1.0
Fire Engineer 12.0 12.0 12.0 12.0 0.0
Firefighter 24.0 24.0 24.0 24.0 0.0
Firefighter/Paramedic Trainee 0.0 4.0 4.0 4.0 0.0
Fire Marshal 1.0 1.0 1.0 1.0 0.0
Deputy Fire Marshal 1.0 1.0 1.0 1.0 0.0
Community Risk Reduction and Education Coordinator 0.0 0.0 1.0 1.0 0.0 Senior Fire Inspector 0.0 0.0 1.0 1.0 0.0
Fire Inspector I 1.0 2.0 2.0 2.0 0.0
Deputy Director 1.0 1.0 1.0 1.0 0.0
Grants and Project Administrator 0.0 0.0 1.0 1.0 0.0
Sr. Management Analyst 2.0 2.0 2.0 2.0 0.0
Telecommunications Manager 0.0 1.0 0.0 0.0 0.0
Telecommunications Supervisor 0.0 1.0 1.0 1.0 0.0
Telecommunications Technician 0.0 0.0 1.0 1.0 0.0
Social Work Supervisor 0.0 1.0 1.0 1.0 0.0
Field Response Case Coordinator 0.0 1.0 1.0 1.0 0.0
Administrative Secretary 1.0 1.0 1.0 2.0 1.0

59.0 70.0 73.0 76.0 3.0
City of Montebello
Fiscal Year 2021-22 Budget
Master Position Control, by Department
2nd Quarter Update

ATTACHMENT C
FY 2019-20 FY 2020-21
FY 2021-22

ADOPTED
FY 2021-22
AMENDED Variance
City of Montebello
Fiscal Year 2021-22 Budget
Master Position Control, by Department
2nd Quarter Update
Human Resources and Information Technology
Director of Human Resources and Risk Management 1.0 1.0 1.0 1.0 0.0 Human Resources Manager 0.0 0.0 1.0 1.0 0.0
Risk Manager 1.0 1.0 1.0 1.0 0.0
Sr. Human Resources Analyst 2.0 2.0 2.0 2.0 0.0
Human Resources Analyst 1.0 1.0 1.0 1.0 0.0
Human Resources Technician 1.0 1.0 1.0 1.0 0.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0
Information Systems Manager 1.0 1.0 2.0 2.0 0.0
Information Systems Supervisor 1.0 1.0 1.0 1.0 0.0
Information Systems Analyst 3.0 3.0 3.0 3.0 0.0

12.0 12.0 14.0 14.0 0.0
Planning and Community Development
Director of Planning and Community Development 1.0 1.0 1.0 1.0 0.0 Deputy Director 1.0 1.0 1.0 1.0 0.0
Building Official 1.0 1.0 1.0 1.0 0.0
Housing Manager 0.0 0.0 1.0 1.0 0.0
Planning Manager 1.0 1.0 1.0 1.0 0.0
Associate Planner 1.0 1.0 1.0 1.0 0.0
Assistant Planner 0.0 2.0 2.0 2.0 0.0
Code Enforcement Manager 0.0 1.0 1.0 1.0 0.0
Code Enforcement Coordinator 1.0 1.0 1.0 1.0 0.0
Code Enforcement Officer 3.0 4.0 4.0 4.0 0.0
Combination Builidng Inspector 0.0 1.0 1.0 1.0 0.0
Buiding Permit Technician 1.0 1.0 2.0 2.0 0.0
Sr. Management Analyst 1.0 1.0 1.0 1.0 0.0
Management Analyst 0.0 2.0 2.0 2.0 0.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0

12.0 19.0 21.0 21.0 0.0
Police
Police Chief 1.0 1.0 1.0 1.0 0.0
Police Captain 2.0 2.0 2.0 2.0 0.0
Police Lieutenant 5.0 5.0 6.0 6.0 0.0
Police Sergeant 10.0 10.0 10.0 10.0 0.0
Police Corporal 23.0 23.0 23.0 23.0 0.0
Police Officer 33.0 33.0 32.0 32.0 0.0
Grants and Project Administrator 1.0 1.0 1.0 1.0 0.0
Records Supervisor 1.0 1.0 1.0 1.0 0.0
Communications Supervisor 1.0 1.0 1.0 1.0 0.0
Police Dispatcher II 5.0 5.0 5.0 5.0 0.0
Police Dispatcher I 5.0 5.0 5.0 5.0 0.0
Police Records Technician 9.0 9.0 9.0 9.0 0.0
Property and Evidence Technician 2.0 2.0 2.0 2.0 0.0
Court Liaison 1.0 1.0 1.0 1.0 0.0
Parking Control Officer 1.0 1.0 1.0 1.0 0.0
Senior Management Analyst 0.0 1.0 1.0 1.0 0.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0
101.0 102.0 102.0 102.0 0.0

ATTACHMENT C
FY 2019-20 FY 2020-21
FY 2021-22

ADOPTED
FY 2021-22
AMENDED Variance
City of Montebello
Fiscal Year 2021-22 Budget
Master Position Control, by Department
2nd Quarter Update
Public Works
Director of Public Works 1.0 1.0 1.0 1.0 0.0
Assistant Director 1.0 1.0 1.0 1.0 0.0
Assistant Engineer 0.0 0.0 1.0 2.0 1.0
Public Works Inspector 0.0 0.0 1.0 1.0 0.0
Recreation & Community Services Superintendent 0.0 1.0 1.0 1.0 0.0 Street Maintenance Supervisor 1.0 1.0 1.0 1.0 0.0
Assistant Tree Maintenance Supervisor 1.0 1.0 1.0 1.0 0.0 Senior Management Analyst 0.0 1.0 1.0 1.0 0.0
Management Analyst 0.0 0.0 0.0 1.0 1.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0
Maintenance Worker* 7.0 14.0 14.0 14.0 0.0

12.0 21.0 23.0 25.0 2.0
*Transfer 7.0 FTE from Parks and Recreation - Golf Course Operations, October, 2020 Recreation and Community Services
Director of Recreation and Community Services 1.0 1.0 1.0 1.0 0.0 Deputy Director 1.0 1.0 1.0 1.0 0.0
Recreation & Community Services Superintendent** 0.0 1.0 1.0 1.0 0.0 Park Maintenance Supervisor 1.0 1.0 1.0 1.0 0.0
Building Maintenance Tradeworker II 2.0 2.0 2.0 2.0 0.0 Maintenance Worker 8.0 8.0 8.0 8.0 0.0
Recreation Manager 0.0 0.0 1.0 1.0 0.0
Community Services Coordinator 3.0 4.0 4.0 4.0 0.0
Management Analyst 1.0 1.0 1.0 1.0 0.0
Administrative Secretary 1.0 1.0 1.0 1.0 0.0
Golf Course Superintendent / Facility Manager** 1.0 0.0 0.0 0.0 0.0 Golf Cart Mechanic* 1.0 0.0 0.0 0.0 0.0
Golf Course Equipment Mechanic* 1.0 0.0 0.0 0.0 0.0

21.0 20.0 21.0 21.0 0.0
*Golf Course personnel transferred to Public Works as "Maintenance Worker" classification **Golf Course Superintendent to be reclassified as Recreation & Comm Services Superintendent

ATTACHMENT C
FY 2019-20 FY 2020-21
FY 2021-22

ADOPTED
FY 2021-22
AMENDED Variance
City of Montebello
Fiscal Year 2021-22 Budget
Master Position Control, by Department
2nd Quarter Update
Transportation
Director of Transportation 1.0 1.0 1.0 1.0 0.0
Assistant Director 1.0 1.0 1.0 1.0 0.0
Deputy Director 0.0 0.0 0.0 2.0 2.0
Public Information Officer 0.0 1.0 1.0 1.0 0.0
Transit Administration Manager 1.0 2.0 2.0 2.0 0.0
Transit Operations Manager 1.0 1.0 1.0 1.0 0.0
Vehicle Maintenance Manager 0.0 1.0 1.0 1.0 0.0
Maintenance Manager 0.0 0.0 1.0 1.0 0.0
Shop Maintenance Supervisor 4.0 4.0 4.0 4.0 0.0
Transit Dispatch Supervisor 10.0 12.0 12.0 12.0 0.0
Transit Operations Supervisor 3.0 3.0 3.0 3.0 0.0
Transit Stores and Facility Supervisor 1.0 1.0 1.0 1.0 0.0 Maintenance Service Supervisor 1.0 1.0 1.0 1.0 0.0
Transit Grants and Project Administrator 1.0 1.0 1.0 1.0 0.0 Sr. Procurement Analyst 0.0 1.0 1.0 1.0 0.0
Management Analyst 1.0 3.0 3.0 3.0 0.0
Associate Planner 0.0 0.0 1.0 1.0 0.0
Account Clerk I 0.0 1.0 1.0 1.0 0.0
Account Clerk II 2.0 3.0 3.0 3.0 0.0
Administative Secretary 0.0 1.0 1.0 1.0 0.0
Bus Operator 105.0 105.0 120.0 120.0 0.0
Equipment Mechanic A 15.0 15.0 15.0 15.0 0.0
Equipment Serviceworker 13.0 13.0 13.0 13.0 0.0
Body Shop Mechanic 1.0 1.0 1.0 1.0 0.0
Building Maintenance Tradeworker II 1.0 1.0 1.0 1.0 0.0 Maintenance Worker 1.0 1.0 1.0 1.0 0.0
Storekeeper 3.0 3.0 3.0 3.0 0.0
Clerk Typist 4.0 5.0 5.0 5.0 0.0
170.0 182.0 199.0 201.0 2.0
Total Full-Time Employees 419.0 461.0 489.0 496.0 7.0
Total Full-Time Employees Net Elected 412.0 454.0 482.0 489.0 7.0 FY 2019-20 FY 2020-21
FY 2021-22

ADOPTED
FY 202-22
AMENDED Variance
Administration 6.0 8.0 8.0 8.0 0.0
Community Development 12.0 19.0 21.0 21.0 0.0
Finance 19.0 20.0 21.0 21.0 0.0
Fire 59.0 70.0 73.0 76.0 3.0
Human Resources - Information Technology 12.0 12.0 14.0 14.0 0.0 Parks and Recreation 21.0 20.0 21.0 21.0 0.0
Police 101.0 102.0 102.0 102.0 0.0
Public Works 12.0 21.0 23.0 25.0 2.0
Transit 170.0 182.0 199.0 201.0 2.0
412.0 454.0 482.0 489.0 7.0
ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: James Enriquez, Director of Public Works / City Engineer SUBJECT: Updated Report of Emergency Repair and Replacement of the Beach Street Storm Drain
DATE: February 9, 2022
RECOMMENDATION (S):

It is recommended that the City Council:
1) Receive and file the City Manager’s updated report of the emergency repair of the Beach Street Storm Drain pursuant to Montebello Municipal Code Section 3.20.140 and Public Contracts Code Section 22035; and
2) Take such additional, related, action that may be desirable.

FISCAL IMPACT
There is no new information to report regarding fiscal impacts.

BACKGROUND
On December 14, 2021, the Director of Public Works received an email from Los Angeles County Department of Public Works (LACDPW) Stormwater Maintenance staff notifying the City of damage to the dirt slope at the outlet of the Beach Street Storm Drain near the intersection of Beach Street and Bluff Road. LACDPW requested the City’s immediate attention to this matter.

In response to this email, Public Works contacted LACDPW staff and met them at the site on December 16 th to inform them that an underground contractor (Mike Bubalo Construction Co.) was on standby to complete emergency repairs prior to the storms forecasted for the following week. LACDPW issued a permit for temporary repairs and 11 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Updated Report of Emergency Repair and Replacement of the Beach St reet Storm Drain

Page 2 of 2 ends

agreed to meet at the site on Monday (December 20th) once the contractor had completed exploratory excavation and the City had developed a plan of action for repairs that could be completed before the rain forecas ted to begin on Thursday (December 23 rd). The meeting occurred in the afternoon on Monday (December 20 th) and the County agreed to the proposed temporary repairs.

The contractor completed the temporary emergency repairs on January 3rd.

On January 12, 2022, the City Council authorized the City Manager to finalize an agreement with Mike Bubalo Construction Co. for the replacement of the storm drain within Beach Street for an amount not-to-exceed $390,000. The work commenced on January 26, 2022.

Staff went door-to-door to notify the residents immediately adjacent to the work. The work is anticipated to be completed in three to four weeks.

SUMMARY

Staff will continue to coordinate the completion of this emergency work and updated reports will be included at each regularly scheduled City Council Meeting until the work is completed.

ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: David Sosnowski, Director of Recreation and Community Services SUBJECT: Community Garden at Grant Rea Park
DATE: February 9, 2022
RECOMMENDATIONS:

It is recommended that the City Council:
1) Approve an Agreement No. 3955 with the Los Angeles Community Garden Council (“LACGC”) for a three -year term to manage a community garden at Grant Rea Park; and
2) Amend the Fiscal Year 2021-22 budget by increasing appropriations in Account Nos. 221-70-720-6040.10 by $41,000; 221-70-720-6040.96 by $25,000 and 221- 70-720-7116 by $75,000 (Measure A, Parks and Recreation, Parks Maintenance, Outside Contracts; Engineering Design Services; Improvements Other Than Building; and
3) Take such additional, related, action that may be desirable.

FISCAL IMPACT
The LACGC will be responsible for assisting the City with the initial design and build of the garden, as well as managing and overseeing the community garden located on City property at Grant Rea Park. The total annual
cost for garden management services is
$21,000. The Agreement will be managed by the Recreation and Community Services Department and funding for the annual cost of the Agreement will be by Los Angeles County Measure A (Fund 221) Annual Allocation grant funds.

Additionally, start-up costs are estimated to be $120,000, which includes assistance from LACGC at an estimated cost of $20,000. The start-up costs includes community outreach, design and construction of the community garden, fencing, lighting, and potable 12 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Community Garden at Grant Rea Park

Page 2 of 3 ends

water connections. This cost is a one-time capital investment and will be funded by Los Angeles County Measure A Annual Allocation grant funds.

Measure A funding is allocated annually to Los Angeles County Study Areas for park improvements. At the February 12, 202 0 City Council meeting, City Council approved Resolution 20-14 authorizing blanket authority to file applications from the Los Angeles County Regional Open Space District for Measure A funding for projects and programs.

A budget amendment is needed for th e start-up capital costs, to increase FY 2021-22 appropriations by a total of $1 41,000 in the following accounts in the Measure A fund (Fund 221):

 221-70-720-6040.10: $41,000
 221-70-720-6040.96: $25,000
 221-70-720-7116: $75,000

The cost of services for the additional two years of the agreement will be included in the Measure A Fund’s Fiscal Year 2022-23 and Fiscal Year 2023-24 budgets.

BACKGROUND

LACGC is a non-profit organization that aims to strengthen communities by building and supporting community gardens w here every person in Los Angeles County can grow healthy food in their neighborhood. LACGC currently manages 42 community gardens and offers advice, workshops, and community organizing assistance to more than 125 community gardens in Los Angeles County.

The community garden’s proposed location is Grant Rea Park. Grant Rea Park has been identified as a suitable location based on outreach efforts and site specific plans developed within the City’s Parks Master P lan. The Parks Master Plan includes a Site Specific Plan for Grant Rea Park which proposes the construction of a community garden to provide educational elements to the community and to provide a space that promotes urban agriculture and sustainable communities.

As a part of the outreach efforts completed during the development of the Parks Master Plan, several surveys were made available to the public to gather input from the community regarding future park amenities and programs. This included a general parks survey and a survey specific to Grant Rea Park. Through these efforts, the community expressed interest in the addition of a community garden within Montebello. The Grant Rea Site Specific Plan which includes a community garden was developed ba sed off of the input received.

ANALYSIS

The proposed community garden will be located on the eastern side of Grant Rea Park near the Rio Hondo Bike Path. This location of the park is ideal due to the area currently CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Community Garden at Grant Rea Park

Page 3 of 3 ends

being underutilized, its a safe distance from baseball fields, the ability to install fencing, and access to potable water. Additionally, the area is included in the City’s current landscape maintenance contract and would not require any additional funding to maintain the area.

Under the proposed Agreement terms, LACGC will be responsible for day -to-day management and operation of the community garden. Duties will include the development of operational guidelines that establish garden rules, the creation of volunteer roles, identifica tion of a master gardener, accepting and reviewing garden applications, assigning plots, collecting garden dues, member assistance, and facilitating educational workshops available to the public.

LACGC will assist the City with community engagement prior to the construction of the garden to gauge interest and determine the final design of the garden. Plot rental fees and membership dues will be established by LACGC and plots will be made available to Montebello residents. The project aims to promote healthy and sustainable lifestyles, make fresh produce available locally, provide educational opportunities, and provide a space for Montebello community members to connect.

SUMMARY

Staff is recommending that the City Council approve an Agreement with the Los Angeles Community Garden Council (“LACGC”) for a three -year term to manage a community garden at Grant Rea Park and amend the FY 2021 -22 budget by i ncreasing appropriations by $141,000 in the following Measure A (Fund 221) accounts:

 221-70-720-6040.10: $41,000
 221-70-720-6040.96: $25,000
 221-70-720-7116: $75,000

ATTACHMENTS:

A. Attachment A – Los Angeles Community Garden Council Agreement in Substantial Form
B. Attachment B – Site Map

ATTACHMENT A

CITY OF MONTEBELLO

PROFESSIONAL SERVICES AGREEMENT NO. 3955

WITH LOS ANGELES COMMUNITY GARDEN COUNCIL

THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is made and entered into on February 9, 2022 (“Effective Date”), by and between the CITY OF MONTEBE LLO, a California municipal corporation ( the “CITY”) and LOS ANGELES COMMUNITY GARDEN COUNCIL (the “CONSULTANT”). The CITY and the CONSULTANT are sometimes referred to herein individual as the “Party,” and jointly as the “Parties.”

RECITALS

WHEREAS, the CITY desires to retain a qualified professional consultant to provide community garden management services in the CITY; and

WHEREAS, the CONSULTANT represents that it is fully qualified to perform such services by virtue of its experience and the training, education and expertise of its principals and employees.

NOW THEREFORE, in consideration of performance by the Parties of the covenants and conditions herein contained, the Parties hereto agree as follows:

SECTION 1. INCORPORATION OF RECITALS AND O THER CONTRACT

DOCUMENTS

a. The above -referenced Recitals constitute a material part hereof and shall hereby be incorporated by reference. Moreover, this Agreement consists of the following documents, in order of precedence, all of which are incorporated here in and made part of this Agreement, as though fully set forth herein:

1. This Agreement and its Exhibits, including scope of work, fee schedules, and any and all addenda or supplemental agreements.

2. All other documents, including but not limited to all applic able bonds, insurance certificates, permits, notices, schedules, forms, certifications, and affidavits.

b. These documents shall be collectively referred to herein as the “Contract Documents.” In the event of a conflict among the Contract Documents, the or der of precedence list above shall apply.

SECTION 2. SERVICES / COMPENSATION.

a. To the extent of a conflict between the terms of this Agreement and that set forth in any exhibits or attachments hereto, the terms of this Agreement shall govern.

b. The CONSULTANT shall provide to the CITY all labor, equipment, materials and incidental necessary to provide community garden management services as set forth fully in the scope of work, as such is set forth fully in Exhibit “A” attached hereto and incorporated fully herein by this reference (hereinafter “Professional Services”).

PROFESSIONAL SERVICES AGREEMENT NO. 3955

Page 2 of 12 ends

c. The CONSULTANT shall be compensated for performance of the Professional Services as set forth in the Schedule of Compensation attached hereto as Exhibit “B” and incorporated fully here in by this reference (“Compensation”).

The CONSULTANT shall provide an itemized billing statement to the CITY each month for Professional Services performed. The CONSULTANT shall no incur fees or costs which exceed the Compensation without the prior writ ten consent of the CITY.

SECTION 3. TERM.

a. This Agreement shall commence upon issuance of a written “Notice to Proceed” (as further defined below) by the CITY and shall expire three (3) years from the Effective Date, unless terminated earlier as hereina fter provided. This Agreement may be extended for up to two (2) , one-year extensions upon such terms and conditions mutually agreed upon by the Parties in writing.

b. Notice to Proceed. Any work or service contemplated under this Agreement shall not commence until the CITY has issued a written Notice to Proceed issued by CITY’s applicable, department head.

SECTION 4. PERFORMANCE.

a. The CONSULTANT shall at all times, faithfully, competently, and to the best of its ability, experience, and talent, perform all tasks described herein.

b. The CONSULTANT shall employ, at a minimum, generally accepted standards and practices utilized by companies engaged in providing similar services, as are required of Consultant hereunder, in meeting its obligations under this Agreement.

c. The CONSULTANT shall be knowledgeable of and subject to all CITY ordinances, rules and regulations, standard operating procedures, and the supervisory chain of command.

d. The CONSULTANT shall have the right to retain, subject to the CITY's approval, additional individuals, consultants or sub consultants to assist in the completion of services as herein defined. Compensation for additional individuals, consultants or sub consultants shall be the sole and exclusive responsibility of the CONSULTANT.

e. The CONSULTANT shall retain all original reports, field and office notes, correspondence, calculations, maps, and other documents specifically related to the services provided by the CONSULTANT pursuant to this Agreement, other than docume nts which are exempt from disclosure pursuant to the attorney - client privilege or any other law. Said documents shall be made available for inspection by the CITY upon request.

SECTION 5. WORK PRODUCT.

a. The CONSULTANT hereby agrees that all work product p roduced pursuant to this Agreement, and provided to the CITY during and upon completion of this Agreement, shall be the property of the CITY , and ownership of said work product PROFESSIONAL SERVICES AGREEMENT NO. 3955

Page 3 of 12 ends

shall be retained by the CITY. The CONSULTANT may take and retain copies of such written products as desired, but no such written products shall be the subject of a copyright application by the CONSULTANT.

b. All data, documents, discussion, or other information developed or received by the CONSULTANT or provided for performance of thi s Agreement are deemed confidential and shall not be disclosed by the CONSULTANT without prior written consent by the CITY. The CITY shall grant such consent if disclosure is legally required. All such w ritten products shall be returned to the CITY upon the termination or expiration of this Agreement. The CONSULTANT agrees that the covenants contained in this Section shall survive the expiration or termination of this Agreement.

SECTION 6. EXTRA SERVICES.

No extra services over and above the Compensatio n shall be rendered by the CONSULTANT under this Agreement unless such extra services first shall have been duly authorized in writing by the CITY’s City Manager (the “City Manager”).

SECTION 7. CITY SUPERVISION.

The City Manager shall have the right of general supervision of all work performed by the CONSULTANT and shall be the CITY ’s agent with respect to obtaining the CONSULTANT’s compliance hereunder. No payment for services rendered under this Agreement shall be made without the prior approval of the City Manager.

SECTION 8. TERMINATION.

In the event that either Party hereto fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, the non -defaulting party shall give the defaulting party writt en notice of the default, the nature of the default, and of the steps necessary to cure the default.

a. Termination for Cause . In the event that any of the provisions of the Agreement are violated by either party, the non -defaulting Party may terminate the Agreement by serving written notice upon the other Party, listing the violation(s) and its intent to terminate such Agreement unless within ten (10) days after the serving of such notice, such violation shall cease or be rectified, the contract shall upon t he expiration of an additional thirty (30) days cease and terminate. Violations by the CONSULTANT which cannot be corrected within ten (10) days, said contract shall at the option of the C ITY cease and terminate upon the giving of like notice. In the event of any such termination for default by the CONSULTANT, the CITY may take over the work and prosecute the same to completion by contract or otherwise for the account and at the expense of the CONSULTANT. The CONSULTANT and his sureties shall be liable t o the C ITY for any excess cost occasioned in the event of any such termination. This change shall not be construed to prevent the termination, for other causes authorized by law or other provisions of this contract.

In the event of a termination for cause , the CONSULTANT shall only be entitled to the Compensation for those Professional Services satisfactory performed on or before the effective date of termination.

b. Termination for Convenience. T he CITY shall have the option, at its sole discretion and wit hout cause, to terminate this Agreement in whole, or in part, by PROFESSIONAL SERVICES AGREEMENT NO. 3955

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giving ten ( 30) business days’ written notice to the CONSULTANT. Upon the termination of this Agreement as provided herein, the CITY shall provide to the CONSULTANT the part of Compensation which would otherwise be payable to the CONSULTANT for services the CONSULTANT had completed as of the date of termination, less the amount of all previous payment with respect to the Compensation. Further, upon such a termination for convenience by the CITY, the Parties agree that the CONSULTANT shall be reimbursed for any “non - refundable” costs that the CONSULTANT has incurred for its services under this Agreement, provided that: (1) such “non - refundable” costs were incurred by the CONSULTANT prior to the date of termination, and (2) that the CONSULTANT provides the CITY with adequate proof that the CONSULTANT incurred the costs, and is unable to be seek a refund for such costs. Such “non -refundable” costs may include, but are not limited to, travel reservations incurred by the CONSULTANT for its performance of services under this Agreement. The CONSULTANT agrees to cease all work under this Agreement on or before the effective date of any notice of termination.

SECTION 9. EMPLOYMENT OF CITY EMPLOYEES.

No regular employee of the CITY shall be employed by the CONSULTANT during the term of this Agreement.

SECTION 10. NON-LIABILITY OF CITY OFFICIALS AND EMPLOYEES.

No official or employee of the CITY shall be personally liable to the CONSULTANT in the event of any default or breach by the CITY, or for any amount which may become due to the CONSULTANT.

SECTION 11. INDEPENDENT CONSULTANT.

a. The CONSULTANT is and shall, at all times, remain as to the CITY a wholly independent consultant. Neither t he CITY nor any of its elected officials, officers, employees, or agents shall have control over the conduct of the CONSULTANT except as expressly set forth in this Agreement. The CONSULTANT shall not at any time or in any manner represent that he or she is in any manner an elected official, officer, employee, or agent of the CITY. No employee benefits shall be available to the CONSULTANT in connection with the performance of this Agreement. Except as provided in this Agreement, the CITY shall not pay sa lary, wages, or other compensation to the CONSULTANT for performance hereunder for the CITY, the CITY shall not be liable for compensation to the CONSULTANT, the CONSULTANT’s employees or the CONSULTANT’s subconsultants for injury or sickness arising out of performing services hereunder.

b. The parties further acknowledge and agree that nothing in this Agreement shall create or be construed to create a partnership, joint venture, employment relationship or any other relationship except as set forth in this Agreement.

c. The CITY shall not deduct from the Compensation paid to the CONSULTANT any sums required for Social Security, withholding taxes, FICA, state disability insurance or any other federal, state or local tax or charge which may or may not be in effect or hereinafter enacted or required as a charge or withholding on the compensation paid to the CONSULTANT. The CITY shall have no responsibility to provide the CONSULTANT, its employees or sub consultants PROFESSIONAL SERVICES AGREEMENT NO. 3955

Page 5 of 12 ends

with workers’ compensation insurance or any other insurance.

SECTION 12. CALPERS ANNUITANTS AND ELIGIBILITY INDEMNITY.

a. If the CONSULTANT is a California Public Employees’ Retirement System (“CalPERS”) annuitant, the CONSULTANT must provide the City with written notification of such fact a minimum of 14 calendar days prior to commencement of services under this Agreement. Failure to provide such notification may result in termination of the Agreement, and any penalties or other costs relating thereto shall be borne by the CONSULTANT. If this Agreement remains in place, the CONSULTANT shall execute any amendment(s) to this Agreement requested by the City in order to comply with all laws and regulations applicable to CalPERS annuitants.

b. In the event that the CONSULTANT or any employee, agent, or subconsultant of the CONSULTANT providing services under this Agreement claims or is determined by a court of competent jurisdiction or CalPERS to be eligible for enrollment in CalPERS as an employee of the CITY, the CONSULTANT shall indemnify, d efend, and hold harmless the CITY for the payment of any employee and/or employer contributions for CalPERS benefits on behalf of the CONSULTANT or its employees, agents, or sub consultants, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of the CITY.

c. Notwithstanding any other agency, state or federal policy, rule, regulation, law or ordinance to the contrary, the CONSULTANT and any of its employees, agents, and subconsultants providing service under this Agreement shall not qualify for or become entitled to, and hereby agree to waive any claims to, any compensation, benefit, or any incident of employment by the CITY, including but not limited to eligibility to enroll in PERS as an employee of the CITY and entitlement to any contribution to be paid by the CITY for employer contribution and/or employee contributions for PERS benefits.

SECTION 13. LEGAL RESPONSIBILITIES.

The CONSULTANT shall at all times observe and compl y with all applicable laws, ordinances, codes, and regulations of the federal, state, and local governments including, but not limited to the Montebello Municipal Code. The CITY, and its appointed or elected officers, employees, or agents, shall not be li able at law or in equity occasioned by failure of the CONSULTANT to comply with this section.

SECTION 14. INDEMNIFICATION.

The CONSULTANT agrees to, and shall defend, indemnify, protect and hold harmless, the CITY, its elected and appointed boards, offi cers, officials, employees, agents and volunteers from and against any and all claims, demands, lawsuits, defense costs, civil, penalties, expenses, causes of action, and judgments at law or in equity, or liability of any kind or nature which the CITY, its elected and appointed boards, officers, officials, employees, agents and volunteers may sustain or incur or which may be imposed upon them for injuries or deaths of persons, or damage to property arising out of the CONSULTANT’s negligent or wrongful act, or omission under the terms of this Agreement, except only liability arising out of the sole negligence of the CITY.

PROFESSIONAL SERVICES AGREEMENT NO. 3955

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SECTION 15. INSURANCE COVERAGE.

a. During the term of this Agreement, the CONSULTANT shall carry, maintain, and keep in full force and effe ct insurance against claims for death or injuries to persons or damages to property that may arise from or in connection with CONSULTANT’s performance of this Agreement. Such insurance shall be of the types and in the amounts as set forth below:

 Commercial General Liability (CGL) : Insurance Services Office Form CG 00 01 covering CGL on an “occurrence” basis for bodily injury and property damage, including products -completed operations, personal injury, and advertising injury, with limits no less than $ 2,000,000 per occurrence. If a general aggregate limit applies, the limit shall be twice the required occurrence limit.

 Automobile Liability Insurance: Insurance Services Office Form Number CA 0001 covering, Code 1 (any auto), or if CONSULTANT has no owned autos, Code 8 (hired) and 9 (non -owned), with limit no less than $1,000,000 per accident for bodily injury and property damage.

 Worker's Compensation insurance as required by the laws of the State of California, with Statutory Limits, and Employer’s Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease.

 Professional Li ability insurance appropriate to the CONSULTANT’S profession, with limit no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate.

b. If the CONSULTANT maintains higher limits than the minimums shown above, the CITY requires and shall be entitle d to coverage for the higher limits maintained by the CONSULTANT.

c. The CONTACTOR shall require each of its sub consultants, if any, to maintain insurance coverage that meets all of the requirements of this Agreement.

d. The policy or policies required by this Agreement shall be issued by an insurer admitted in the State of California and with a current rating of at least A:VII in the latest edition of Best's Insurance Guide.

e. Each insurance policy required above shall state that coverage shall not be canceled, except after thirty (30) days’ prior written notice (ten [10] days for non- payment) has been given to the CITY. The CONSULTANT agrees that if it does not keep the aforesaid insurance in full force and effect the CITY may either (i) immediately term inate this Agreement for Cause ; or (ii) take out the necessary insurance and pay, at the CONSULTANT’s expense, the premium thereon.

f. Evidence of Insurance prior to commencement . The Contractor shall provide to the C ITY Certificate(s) of Insurance evidencin g such coverage together with copies of the required policy endorsements no later than five (5) business days prior to commencement of service and at least fifteen (15) business days prior to PROFESSIONAL SERVICES AGREEMENT NO. 3955

Page 7 of 12 ends

the expiration of any policy. Unreasonable failure to provide such evidence may be cause for termination of the Agreement as provided herein or delay the services’ commencement date. The evidence of insurance shall be U.S. mail or email to:

City of Montebello
Attn: Risk Manager
1600 West Beverly Boulevard
Montebello, CA 90640
Email: [email protected]

Coverage shall not be suspended, voided, cancelled, reduced in coverage or in limits, non-renewed, or materially changed for any reason, without thirty (30 ) days prior written notice thereof given by the insurer to the CITY by U.S. mail, or by personal delivery, except for nonpayment of premiums, in which case ten (10) days prior notice shall be provided.

g. Evidence of Insurance during the entire term of the Agreement. At all times during the term of this Agreement, the CONSULTANT shall maintain on file with the CITY’s Risk Manager a certificate or certificates of insurance showing that the aforesaid policies are in effect in the required amounts and naming the CITY as an additional insured. The CONSULTANT shall, prior to commencement of work under this Agreement, file with the CITY’s Risk Manager such certificate(s).

h. The CONSULTANT shall provide proof that policies of insurance required herein expiring duri ng the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Such proof will be furnished at least two (2) weeks prior to the expiration of the coverages.

i. The general liability and automobile polic ies of insurance required by this Agreement shall contain an endorsement naming the CITY, its officers, employees, agents and volunteers as additional insureds. All of the policies required under this Agreement shall contain an endorsement providing that t he policies cannot be canceled or reduced except on thirty days’ prior written notice to the CITY. The CONSULTANT agrees to require its insurer to modify the certificates of insurance to delete any exculpatory wording stating that failure of the insurer to mail written notice of cancellation imposes no obligation, and to delete the word “endeavor” with regard to any notice provisions.

j. The insurance provided by the CONSULTANT shall be primary to any coverage available to the CITY. Any insurance or self -insurance maintained by the CITY, its officers, employees, agents, or volunteers, shall be in excess of CONSULTANT’s insurance and shall not contribute with it.

k. All insurance coverage provided pursuant to this Agreement shall not prohibit the CONSULTANT, and CONSULTANT’s employees, agents or subconsultants, from waiving the right of subrogation prior to a loss. The CONSULTANT hereby waives all rights of subrogation against the CITY.

l. Any deductibles or self-insured retentions must be declared to and approved by the CITY. At the option of the CITY, the CONSULTANT shall either reduce or eliminate the deductibles or self -insured retentions with respect to the CITY, or the CONSULTANT shall procure a bond guaranteeing payment of losses and PROFESSIONAL SERVICES AGREEMENT NO. 3955

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expenses.

m. Procurement of insurance by the CONSULTANT shall not be construed as a limitation of the CONSULTANT'S liability or as f ull performance of CONSULTANT’s duties to indemnify, hold harmless and defend under the indemnity covenants of this Agreement.

SECTION 16. SUBCONTRACT, ASSIGNMENT OR DELEGATION.

The CONSULTANT shall not subcontract, delegate, or assign its duties or rights hereunder, either in whole or in part, without the prior written consent of the CITY.

Any proposed subcontract, delegation, or assignment shall pro vide a description of the services to be covered, identification of the proposed sub-consultant, delegee, or assignee, and an explanation of why and how the same was selected, including the degree of competition involved.

Any subcontract, delegation or as signment shall be made in the name of the CONSULTANT and shall not bind or purport to bind the CITY and shall not release the CONSULTANT from any obligations under this Agreement including, but not limited to, the duty to properly supervise and coordinate the work of employees, assignees, delegees or sub-consultants. No such subcontract, delegation or assignment shall result in any increase in the amount of total compensation payable to the CONSULTANT under the Agreement.

SECTION 17. NO WAIVER.

Waiver by any party hereto of any term, condition or covenant of this Agreement shall not constitute the waiver of any other term, condition, or covenant hereof.

SECTION 18. DISPUTE RESOLUTION; GOVERNING LAW.

Disputes regarding the interpretation or application of any provision(s) of this Agreement shall, to the extent reasonably feasible, be resolved through good faith negotiations between the Parties. If any action at law or in equity is brought to enforce this Agreement or because of alleged dispute, breach, default or misrepresentation in connection with the provisions of this Agreement, the prevailing party in such action shall be entitled to reasonable attorney’s fees, expert fees, costs and necessary disbursements incurred in that action or proceeding, in addition to such other relief as may be sought and awarded. The venue for any litigation shall be County of Los Angeles, California. The Parties agree that the covenants contained in this Section shall survive the expiration or termination of this Agreement.

SECTION 19. ATTORNEY’S FEES AND COSTS.

If litigation is reasonably required to enforce or interpret the provisions of this Agreement, the prevailing party in such litigation shall be entitled to an award of reasonable attorney's fees and costs in ad dition to any other relief to which it may be entitled.

SECTION 20. WARRANTIES.

Each of the parties represents and warrants to one another as follows:

PROFESSIONAL SERVICES AGREEMENT NO. 3955

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a. It has received independent legal advice from its attorneys with respect to the advisability of entering into and executing this Agreement;

b. In executing this Agreement, it has carefully read this Agreement, knows the contents thereof, and has relied solely on the statements expressly set forth herein and has placed no reliance whatsoever on any statement , representation, or promise of any other party, or any other person or entity, not expressly set forth herein, nor upon the failure of any other party or any other person or entity to make any statement, representation or disclosure of any matter whatsoever; and

c. It is agreed that each party has the full right and authority to enter into this Agreement, and that the person executing this Agreement on behalf of either party has the full right and authority to fully commit and bind such party to th e provisions of this Agreement.

SECTION 21. MISCELLANEOUS.

a. The descriptive paragraph headings of this Agreement are included for purposes of convenience only and shall not control or affect the construction of interpretation of any of its provisions.

b. Whenever the context hereof shall so require, the singular shall include the plural, the male gender shall include the female gender, and the neuter and vice versa.

c. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof and this Agreement shall be construed as if such invalid, illegal, or unenforceable provisions had never been contained herein.

d. The representations and warranties made by the parties to this Agreement shall survive the consummation of the transaction herein described.

e. This Agreement may be signed in any one or more counterparts all of which taken together shall be but one and the same Agreement. Any signed copy of this Agreement or of any other document or agreement referred to herein, or copy or counterpart thereof, delivered by facsimile transmission, shall for all purposes be treated as if it were delivered containing an original manual signature of the party whose signature appears in the facsimile and shall be binding upon such party in the same manner as though an originally signed copy had been delivered.

f. Each of the parties acknowledges t hat it has been represented by independent counsel of its own choosing, or if it has not been so represented, it has been admonished to obtain independent counsel and has freely and voluntarily waived and relinquished the right to counsel. E ach party who has not obtained independent counsel acknowledges that the failure to have independent legal counsel will not excuse such party’s failure to perform under this Agreement or any agreement referred to in this Agreement.

PROFESSIONAL SERVICES AGREEMENT NO. 3955

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SECTION 22. NOTICE.

All notices, demands, requests or approvals to be given under this Agreement shall be given in writing and conclusively shall be deemed served when delivered via e- mail (an “Electronic Notice” as further defined below), personally or on the se cond (2nd) business day after the deposit thereof in the United States mail, postage prepaid, registered or certified, addressed as hereinafter provided. All notices, demands, requests, or approvals hereunder shall be given to the following addresses or such other addresses as the Parties may designate by written notice:

If to CITY: City of Montebello
Attn: René Bobadilla, City Manager
1600 West Beverly Boulevard
Montebello, CA 90640
(323) 887-1200
Email: [email protected]

With a copy to: City of Montebello – Recreation & Community Services Attn: David Sosnowski, Director
1600 West Beverly Boulevard
Montebello, CA 90640
(323) 887-4540
Email: [email protected]

If to Consultant: Los Angeles Community Garden Council
Attn: Glen Dake, Board Chair
4470 W. Sunset Blvd. #381
Los Angeles, CA 90027
(323) 902-7167
dcampos@[email protected]

An electronic communication (“ Electronic Notice”) shall be deemed written notice for purposes of this section if sent to the electronic mail address specified above.

Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verifi cation of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form.

SECTION 23. NON-DISCRIMINATION AND EQUAL OPPORTUNITY EMPLOYER.

In the performan ce of this Agreement, the CONSULTANT shall not discriminate against any employee, sub-consultant, or applicant for employment because of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, mental condition or sexual orientation. The CONSULTANT will take affirmative action to ensure that sub- consultant and applicants are employed, and that employees are treated during employment, without regard to their race, color, creed, r eligion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation.

SECTION 24. CONFLICT OF INTEREST.

The CONSULTANT covenants that it presently has no interest and shall not PROFESSIONAL SERVICES AGREEMENT NO. 3955

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acquire any interest, direct or indirect, which may be affected by the services to be performed by the CONSULTANT under this Agreement, or which would conflict in any manner with the performance of its services hereunder. The CONSULTANT further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, the CONSULTANT shall avoid the appearance of having any interest that would conflict in any manner with the performance of its services pursuant to this Agreement.

The CONSULTANT covenants not to give or receive any compensation, monetary or otherwise, to or from the ultimate vendor(s) of services to the CITY as a result of the performance of this Agreement, or the services that may be procured b y the CITY as a result of the recommendations made by the CONSULTANT. The CONSULTANT's covenant under this section shall survive the termination of this Agreement.

SECTION 25. ENTIRE AGREEMENT.

This Agreement contains the entire understanding between the CITY and the CONSULTANT. Any prior agreements, promises, negotiations or representations not expressly set forth herein are of no force or effect. Subsequent modifications to this Agreement shall be effective only if in writing and signed by each party. I f any term, condition, or covenant of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable , the remaining provisions of this Agreement shall be valid and binding.

[SIGNATURE PAGE TO FOLLOW]
PROFESSIONAL SERVICES AGREEMENT NO. 3955

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IN WITNESS WHEREO F, the parties, through their respective authorized representatives, have executed this Agreement as of the date first written above.

(“CITY”) (“CONSULTANT”)

CITY OF MONTEBELLO LOS ANGELES COMMUNITY

GARDEN COUNCIL

René Bobadilla, City Manager Glen Dake, Board Chair

ATTEST:

Christopher Jimenez, City Clerk

APPROVED AS TO FORM:

Arnold M. Alvarez-Glasman, City Attorney

EXHIBITS:
 Exhibit A – Scope of Work
 Exhibit B – Schedule of Compensation

EXHIBIT “A”

Scope of Work

The LACGC will assist the City with various phases of the project to construct a community garden at Grant Rea Park including the following:

 Design of the community garden
 Construction assistance
 Community outreach/engagement
 Garden management
 Volunteer recruitment
 Accepting/reviewing garden applications
 Collection of member dues
 Facilitation of educational workshops

EXHIBIT “B”

Schedule of Compensation

YEAR 1 TOTAL COST - $31,350

Design/Construction Phase

120 hours x $50/hr = $6,000
Expenses = $250
Total = $6,250

Community Engagement

240 hours x $50/hour = $12,000
Expenses = $500
Total = $12,500

Garden Management

240 hours x $50/hour = $12,000
Expense = $600
Total = $12,600

YEAR 2 TOTAL COST - $25,200

Garden Management

480 hours x $50 = $24,000
Expenses = $1,200
Total = $25,200

YEAR 3 TOTAL COST - $25,200

Garden Management

480 hours x $50 = $24,000
Expenses = $1,200
Total = $25,200

TOTAL 3 YEAR COST – NOT-TO-EXCEED $81,750

TY OF MONTEBELLO
CIT

Y COUNCIL AGENDA STAFF REPORT
TO: H
onorable Mayor and City Council Members
FR
OM: René Bobadilla, P.E., City Manager
BY: D
avid Sosnowski, Director of Recreation and Community Services SUBJ
ECT: Approve Blanket Purchase Order with PDQ Rental Center for Purchase or Rentals of Citywide Equipment
DAT
E: February 9, 2022
RECOMMENDATIONS:

It
is recommended that the City Council:
1) Appr
ove a blanket purchase order with PDQ Rental Center in a total not-to-exceed amount of $75,000, for the purchase or rental of citywide equipment rentals; and 2) Tak
e such additional, related, action that may be desirable.

FISCAL IMPACT
PD
Q Rental Center is utilized by various City departments for as-needed individual projects that require the rental or purchase of specialized equipment . Adequate appropriations have been included in each department’s adopted budget for Fiscal Year 2021-22. Therefore, no budget amendments are necessary.

BACKGROUND
PD
Q Rental Center provides the City of Montebello with a variety of equipment rentals such as generators, light towers, scissor lifts, and other mechanical equipment. Services are utilized on an as-needed basis for different projects depending on each Department’s need. In FY 2021-22, equipment has been rented or purchased by the Recreation and Community Services Department, Public Works Department, and Transit Department.

Each department obtains necessary quotes and places orders on their own. All purchases to date have been made in accordance with the Montebello Municipal Code procurement policies and PDQ Rental Center has consistently provided the most competitive quotes.

ITEM # 13
CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Approve Blanket Purchase Order with PDQ Rental Center for Purchase or Rentals of Citywide Equipment

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ANALYSIS

The total amount of citywide purchases for FY 2021- 22 from PDQ Rental Center is anticipated to exceed $50,000. Montebello Municipal Code Section 3.20 et al requires City Council approval for purchas es of $50,000 or greater. To continue making f uture rentals or purchases in FY 2021-22, City Council approval is required. Rentals or purchases for the remainder of FY 2021-22 are not expected to exceed $75,000 citywide.

The approval of additional funds allow for departments to rent or purchase necessary rentals for the remainder of the Fiscal Year.

Staff continue to review and analyze the use of services such as this, and will present blanket purchase orders for City Council approvals as necessary. The ultimate goal is to bring these types of items at the beginning of each fiscal year to assist in budget and overall procurement management.

SUMMARY

Staff is recommending that the City Council approve a Blanket Purchase Order with PDQ Rental Center in a total not-to-exceed amount of $75,000 for the purchase of citywide rental equipment or purchase in FY 2021-22.

ATTACHMENT:

None

ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Michael Solorza, Director of Finance
SUBJECT: Waive Second Reading and adopt Ordinance No. 2447 Amending Montebello Municipal Code Chapters 3.16 “City Funds,” 3.20 “Purchasing System ,” and 3.21 “Contracts for Professional and Special Services” to Incorporate Revisions and Recommendations Made in the State Auditors Report of 2021
DATE: February 9, 2022
RECOMMENDATIONS:

It is recommended that the City Council:
1) Waive Second Reading and adopt Ordinance No. 2447 Amending Chapters 3.16 “City Funds,” 3.20 “Purchasing System,” and 3.21 “Contracts for Professional and Special Services” of the Montebello Municipal Code Relating; and 2) Take such additional, related, action that may be desirable.

FISCAL IMPACT
There is no direct fiscal impact related to the approval of the suggested municipal code updates. Some of the recommended updates to Chapters 3.16 et al, 3.20 et al and 3.21 et al may lead to improved procurement efficiencies, which would conceivably reduce administrative costs.

BACKGROUND
The City of Montebello last updated the section of municipal code governing procurement in February 2019. That update was a comprehensive overhaul of the (then) existing code, making necessary changes to modernize language while improving control over procurement and purchasing processes, and removing contradictory guidance found in multiple policies and in the code itself.
14 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Waive Second Reading and adopt Ordinance No. 2447 Amending Montebello Municipal Code Chapters 3.16 “City Funds,” 3.20 “Purchasing System,” and 3.21 “Contracts for Professional and Special Services” to Incorporate Revisions and Recommendations Made in the State Auditors Report of 2021

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The 2019 update was a direct result of recommendations and findings from the December 2018 State Auditors report (Report No. 2018 -802). As stated in the February 13, 2019 agenda report “[t]he Statue Audit requires [the purchasing] policies and procedures be updated to reflect best practices in purchasing and procurement, and to resolve ambiguities and inefficiencies.”

Moreover, the 2019 update revealed five different governing documents/policies that each contained varying and conflicting formal and informal bid dollar thresholds (ranging from less than $5,000 to $100,000), differing City Coun cil approval threshold dollar amounts ($50,000 vs. $20,000) and even varying dollar amounts for when a purchase order was required ($500 vs. $25,000) . Each of these documents – ranging from resolutions to standard operating procedures to administrative po licies – were active and ap plied to procurements in 2019.

The confusing nature of the City’s procurement program prior to 2019 led to understandable lapses in following the rules. It was difficult for Staff to know what was precedent at the time, making it next to impossible to establish a standardized and coherent procurement program across the City. The 2019 update eliminated much of this confusion by amending Chapters 3.20 and 3.21 of the municipal code. From these chapters, new administrative poli cies could be adopted – all internally consistent with each other in an effort to promote the ability to “play by the rules.”

In the three years since this comprehensive and much needed update, Staff have found additional areas of the code which must be amended in order to resolve lingering ambiguities and provide the maximum level of efficiency in procurement without sacrificing proper controls. In addition to the Staff identified changes, the audit review published in October 2021 by the State Auditor (Report No. 2021 -807) contained recommendations that also require updating the existing municipal code. Put together, the recommended amendments (Attachment A) will further improve the code and increase the ability to properly manage all procurements.

Specifically, the City’s corrective action plan (required by State Auditor Report No. 2021- 807) that was presented to and approved by the City Council on November 10, 2021 identified the follow ing recommendations that would be satisfied with approval of t he ordinance amending Chapters 3.16, 3.20 and 3.21 (Attachment A):

 “The City should revise its municipal code to prohibit the purchases of employee gifts with public funds”

 “The City should create a policy by January 2022 requiring staff to formally document situations when a valid reason exists for deviating from procurement requirements in its municipal code, when the code allows it to do so.”

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Waive Second Reading and adopt Ordinance No. 2447 Amending Montebello Municipal Code Chapters 3.16 “City Funds,” 3.20 “Purchasing System,” and 3.21 “Contracts for Professional and Special Services” to Incorporate Revisions and Recommendations Made in the State Auditors Report of 2021

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 “Establish a policy by January 2022 that requires contracts to include a maximum value when feasible. The policy should require the City Council to review and approve any agreement that binds the City financially and that does not include a maximum value.”

In addition to addressing these specific State Auditor recommendations, Staff is recommending language changes to improve the management of:

 Sole/Single source goods and/or services
 Standardization of Goods and/or services
 Cooperative purchases (i.e., piggybacking of contracts)  Posting of bids, requests for proposals, etc. using electronic methods (i.e., PlanetBids)

Municipal code language is also being amended to allow staff to better manage purchase orders, making it more clear as to when one is needed vs. not (based on the type of good/service being procured ). In addition, an error in the municipal code that stated purchase orders are needed for any purchase of $3,000 or more is being corrected – the intent and practice since 2019 has been $2,000 (the agenda report from February 2019 states the $2,000 purchase order limit in numerous places) . Moreover, explicit language prohibiting the splitting of purchases to circumvent dollar limits in the code has been added. While the practice of splitting purchases has always been forbidden, the existing municipal code language was not clear enough.

The recommended updates remove ambiguity from the municipal code – making it easier for operating department staff to understand the purchasing rules as well as improving the ease by which Finance manages the entire procurement process. The “redlined” version of the existing Chapters 3.20 and 3.21 is attached (Attachment A), clearly showing added and removed language.

A committee of Finance staff worked closely with the City Attorney’s office to ensure all the proposed changes coincide with current Government Code and other governing rules and regulations. Moreover, Finance Staff, in conducting purchasing trainings with key personnel in each department, has incorporated suggestions from these sessions into the proposed language updates. The end goal are amended municipal code chapters that improve efficiency and clarity, while ensuring the proper level of control over all purchasing and procurement processes and practices.

If approved, the amended chapters go into effect after City Council approval after the second reading. Once in effect, Finance Staff will provide trainings to departments on the updates to ensure compliance with the new municipal code language. The proposed recommendations satisfy recommendations from the State Auditor as well as provide necessary updates to ensure compliance that have been identified by Staff.

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On January 26, 2022 the proposed Ordinance was presented before City Council, and the City Council approved the amendments for Chapters 3.16 “City Funds,” 3.20 “Purchasing System,” and 3.21 “Contracts for Professional and Special Services” of the Montebello Municipal Code.

SUMMARY
It is recommended that the City Council waive the second reading and approve an Ordinance Amending Chapters 3.16 “City Funds,” 3.20 “Purchasing System ,” and 3.21 “Contracts for Professional and Special Services” of the Montebello Municipal Code, with the amendments being effective thirty (30) days from City Council approval.

ATTACHMENT
A. Attachment A - Ordinance Amending Montebello Municipal Code Chapters 3.16,

3.20 and 3.21

ATTACHMENT A
ORDINANCE NO. 2447

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
MONTEBELLO, CALIFORNIA, AMENDING CHAPTER 3.16 “CITY
FUNDS,” CHAPTER 3.2 0 “PURCHASING SYSTEM” AND CHAPTER

3.21 “CONTRACTS FOR PROFESSIONAL AND SPECIAL SERVICES”
OF THE MONTEBELLO MUNICIPAL CODE UPDATING THE CITY’S

REVENUE AND FINANCE PROVISIONS

RECITALS

WHEREAS, California law requires the State Auditor to issue an audit report at least once every three (3) years with recommendations for improvement when a city is designated as high-risk; and

WHEREAS, State Auditor Audit Report 2021-807 (“Report”) was issued to the City of Montebello (“City”) in October 2021, requiring the City to provide a corrective action plan by December 13, 2021, responding to all recommendations made in the Report; and

WHEREAS, the State Auditor Required Corrective Action Plan was created by staff and presented to the City Council on November 10, 2022; and

WHEREAS, the Report states the following relevant recommendations:

A. The City should revise its municipal code to prohibit the purchase of employee gifts with public funds; and

B. The City should create a policy requiring staff to formally document situations when a valid reason exists for deviating from procurement requirements in its municipal code, when the code allows it to do so; and

C. The City should establish a policy that requires contracts to include a maximum value when feasible and should require the City Council to r eview and approve any agreement that binds the City financially and that does not include a maximum value; and

WHEREAS, this Ordinance to amend and update the City’s revenue and finance provisions is in response to the recommendations made by the State Auditor.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY ORDAINS AS FOLLOWS:

ORDINANCE NO. 2447

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SECTION 1. The above recitals are true and correct and made part of this Ordinance.

SECTION 2. AMENDMENTS; ADDITIONS . Chapter 3. 16 “City Funds ” of the Montebello Municipal Code is amended and will read as follows ((deletions in strikethrough and additions in double underline):

CHAPTER 3.16

CITY FUNDS

3.16.140 Use of Public Funds
The use of public funds for the purchase of employee gifts shall be prohibited and any use of public funds shall be in conformance with Section 6, Article XVI of the California Constitution.

SECTION 3. AMENDMENTS; ADDITIONS. Chapter 3.20 “Purchasing System” of the Montebello Municipal Code is amended and will read as follows ((deletions in strikethrough and additions in double underline):

CHAPTER 3.20

PURCHASING SYSTEM

3.20.010 Adoption – Purpose.

In order to establish efficient procedures for the purchase of supplies and equipment, to secure the city supplies and equipment at the lowest possible cost commensurate with quality needed, to exercise positive financial control over purchases, to clearly define authority for the purchasing function and to assure the quality of purchases, a purchasing system is adopted.

This chapter also establishes efficient procedures for the adoption and implementation of the provisions of the California Uniform Construction Cost Accounting Act [Section 22000, et seq. of the Public Contract Code]) as they relate to public works defined under Public Contract Code 22002.

3.20.020 Purchasing officer.

The director of finance shall be ex officio purchasing officer under the direction of the city manager and the words "purchasing officer" as used in this chapter shall be deemed to refer to the director of finance or his or her duly authorized designee. The purchasing officer shall have the duty and authority to:

ORDINANCE NO. 2447

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A. Purchase or contract for supplies and equipment required by any using agency in accordance with purchasing procedures prescribed by this chapter, such administrative regulations as the purchasing officer shall adopt and such other rules and regulations as shall be prescribed by the city council; B. Negotiate and recommend execution of contracts for the purchase of supplies and equipment;
C. Act to procure for the city the needed quality in supplies and equipment at least expense to the city;
D. Discourage uniform bidding and endeavor to obtain as full and open competition as possible on all purchases;
E. Prepare and recommend to the city council rules governing the purchase of supplies and equipment for the city;
F. Prepare and recommend to the city council r evisions and amendments to the purchasing rules;
G. Keep informed of current developments in the field of purchasing, prices, market conditions and new products;
H. Prescribe and maintain such forms as are reasonably necessary to the operation of this chapter and other rules and regulations;
I. Supervise the inspection of all supplies and equipment purchased to ensure uniform conformance with specifications;
J. Recommend the transfer of surplus and unused supplies and equipment between departments as ne eded and the sale of all supplies and equipment which cannot be used by any agency or which have become unsuitable for city use;
K. Maintain a bidders' list, vendors' catalog file and records needed for the efficient operation of the purchasing department function.

L. Maintain a list of duly authorized designees and the authorization limits, which shall be less than fifty thousand dollars ($50,000) for each designee.

3.20.030 Exemptions from centralized purchasing.

The purchasing officer, with approval of the city council, may authorize, in writing, any agency to purchase or contract for specified supplies and equipment independently of the purchasing department function, but he shall require that such purchases or contracts shall be made in conformity with the procedures established by this chapter and shall further require periodic reports from the agency on the purchases and contracts made under such written authorization.

3.20.040 Requisitions.

Using agencies shall submit requests for services, supplies and equipment to the purchasing officer by standard requisition forms.

ORDINANCE NO. 2447

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3.20.050 Conformance with bidding procedures.

Purchases of supplies and equipment for city use shall be made and accomplished in conformity with Section 3.20.080 or Section 3.20.090 except:

A. Emergency Procurement: When an emergency, as determined by the purchasing agent with the approval of the city manager in writing, is deemed to require that an order be placed with the nearest available source of supply; B. Sole/Single Source Goods and/or Services: When the supplies and equipment needed can be obtained from one source only , such that written declaration of such will be required and noted by standard forms;
C. Standardization of Goods and/or Services: When goods and /or services are required to maintain consistent operation or function to an existing technology or public safety system or program already in use by the City. Examples of items lending themselves to standardization are computer equipment, computer hardware and software products, public safety equipment such as ammunition, ballistic vests, light bars, mobile radios, camera systems, and fire apparatus.

The purchasing officer shall have discretion in determining what goods and/or services fall within this category;
DC. City Council Authorization: When the city council by a four-fifths vote determines to dispense with such bidding and other procedures required by the above - mentioned sections in every individual instance upon a finding by the city council that it would be impractical, useless, or uneconomical in such instance to follow the procedures, and that the welfare of the public would be promoted by dispensing with the same; or
ED. Less than Two Thousand Dollars: When the amount of the purc hase involved is less than two thousand dollars ($1,999 or less) and cumulative citywide purchases from a single vendor/consultant/firm/etc. have not exceeded this amount during the fiscal year (July 1 – June 30);
F. Cooperative Purchase - Purchases for goods and/or services that are identical or nearly identical in scope to the goods and/or services listed in any valid, current and competitively bid cooperative governmental purchase program. Pricing shall be the same or better than the pricing contained in the cooperative purchase agreement. For the purposes of this Section, the term “cooperative governmental purchase program” means any combination between the City and any other public agency or public agencies for the joint purchase of goods and/or services.

G. Piggyback Purchase - If the Purchasing Officer determines it to be in the best interest of the City, the Purchasing Officer is authorized to "piggyback" onto or join into an existing written purchase contract obtained through a competitive bidding process prepared by and awarded by another local, state or federal government agency.

ORDINANCE NO. 2447

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H. Professional Services - Nothing shall be construed to preclude the city from awarding a written contract for professional type services, as defined by case or statutory law, without complying with the provisions of this Article. The term “professional services” means services entailing a high degree of specialized technical or mental skill, in a recognized field of expertise. Such services include attorneys, physicians, architects, engineers, appraisers, accountants, collection agency, detective agency, draftsman, mortuary, hospitals, escrow agency, travel agency, insurance broker, employment agency, advertising agency, real estate, chiropractic and optometry.

I. Solicitation of Bids with No Response: Where competitive bids or proposals have been solicited and no bid or proposal has been received. In such a situation the Purchasing Manager may proceed to have the services performed or the goods procured without further competitive bidding;
JH. Compliance: Compliance with the requirements set forth in the provisions of this chapter shall apply to all contracts awarded after the effective date of this subsection, as may be amended.

KI. Maximum Contract Term: Notwithstanding the exceptions under this section, no commitment or contract with a definitive term may exceed five years.

Any use or application of the bidding procedure exceptions listed herein for the purchase of supplies and equipment for city use shall require the making of a written record of such use or application, including the existence of a valid reason for such use or application. This written record shall be kept for at least five (5) years.

3.20.060 Use of purchase orders.

A. The purchase of goods and /or services including contracts and/or professional services agreements totaling three two thousand dollars ($2,000) or more shall be made by purchase order. Exceptions may be processed by request for warrant and shall be limited to dues and subscriptions,; travel, and registration costs for training, conferences and meeting expense s, postal services, courier servic es, telephone, gas, electricity, water, internet, cable, cellular and other utilityies, and postal services,; and payments that are not good and/or service items such as, pay for elected officials, commissions, police reserve and auxiliary firefighters ,; stipends, honorariums, pass -through payments, donations, legal fees, legal settlements, claims and expenses, reimbursements, refunds, replenishment of petty cash funds, contracts, debt service, letter of credit fees, payments to other government agencies, FICA, PERS, employee group insurance, workers' compensation premiums, claims and expenses ; insurance premiums, and any other required payroll function/personnel related payments. claims and expenses; reimbursements, refunds and replenishment of petty cash funds; contracts; debt payments; and payments to other government agencies.

ORDINANCE NO. 2447

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B. Also exempted is the purchase of inventory stock replenishment for all stores materials. Such purchases shall be transacted with a purchase requisition form.

C. The finance dir ector may authorize any variance up to ten percent of the original purchase order price, in addition to sales tax and shipping.

D. No commitment or contract with a definitive term may exceed five years.

3.20.070 Unencumbered funds required for purchase order issuance.

Except in cases of emergency, the purchasing officer shall not issue any purchase order for services, supplies or equipment unless there exists an unencumbered appropriation in the fund account against which the purchase is to be charged.

3.20.080 Formal contract procedure.

Except as otherwise provided herein, purchases and contracts for supplies and equipment of an estimated value of fifty thousand dollars ($50,000) or more for contracts which do not constitute a public project as defined by Section 22002 of the Public Contract Code, shall be by written contract with the lowest responsible bidder pursuant to the procedure prescribed herein.

A. Notice Inviting Bids. Notices inviting bids shall include a general description of the articles to be purchased, shall state where bid blanks and specifications may be secured and the time and place for opening bids.

1. Published Notice. Notices inviting bids shall be published at least ten (10) days before the date of opening of the bids. Notice shall be published at least once via the City’s website or in a newspaper of general circulation, printed and published in the city, or if there is none, it shall be posted in at least three public places in the city that have been designated by ordinance as the places for posting public notices.

2. Bidders' List. The purchasing officer shall also solicit sealed bids from all responsible prospective suppliers whose names are on the bidders' list or who have requested their name be added thereto.

3. Bulletin Board. The purchasing officer shall also advertise pending purchases by a notice posted on a public bulletin board in the city hall.

B. Bidders' Security. When deemed necessary by the purchasing offi cer, bidders' security may be prescribed in the public notices inviting bids. Bidders shall be entitled to return of bid security; provided that a successful bidder shall forfeit his bid security upon refusal or failure to execute the contract within ten (10) days after the notice of award of contract has been mailed made, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the city council awards the contract to the next lowest bidder, the amount of the lowest bidders' security shall be applied by the city to the ORDINANCE NO. 2447

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difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder.

C. Bid Opening Procedure. Sealed bids shall be submitted to the purchasing officer and shall be identified as bids on the envelope or via electronic method . Bids shall be opened in public at the time and place stated in the public notices. A tabulation of all bids received shall be open for public inspection via the City’s website or posted during regular business hours for a period of not less than thirty calendar days after the bid closing.

D. Rejection of Bids. In its discretion, the city council may reject any and all bids presented and re-advertise for bids.

E. Award of Contracts. Contracts shall be awarded by the city council to the lowest responsible bidder except as otherwise provided herein.

F. Tie Bids. If two or more bids received are for the same total amount or unit price, quality and service being equal, and if the public interest will not permit the delay or re -advertising for bids, the city council may accept the one it chooses or accept the lowest bid made by negotiation with the tie bidders at the time of bid opening.

G. Performance Bonds. The city council shall have authority to require a performance bond before entering a contract in such amount as it shall find reasonably necessary to protect the best interests of the ci ty. If the city council requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids.

H. No commitment or contract with a definitive term may exceed five years unless determined to be in the public’s best interest by the city council.

3.20.090 Open market procedure.

Purchases of supplies and equipment of an estimated value in the amount of less than fifty thousand dollars ($50,000) for contracts which are not for a public project as defined by Section 22002 of the Public Contract Code, may be made by the purchasing officer in the open market without observing the procedure prescribed by Section

3.20.080.

A. Minimum Number of Bids. Open market purchases shall, wherever possible, be based on at least three bids, and shall be awarded to the lowest responsible bidder.

B. Notice Inviting Bids. The purchasing officer shall solicit bids by written requests to prospective vendors or by telephone or by electronic mail (email) or by public notice posted on a public bulletin board in the city hall.

C. Written Bids. Written bids or quotations shall be submitted to the purchasing officer or designee who shall open them a nd keep a record of all open market orders and bids for a period of one year after the submission of bids or the ORDINANCE NO. 2447

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placing of orders , or as long as directed by a city council adopted records retention schedule. This record, while so kept, shall be open to public inspection.

D. No commitment or contract with a definitive term may exceed five years.

3.20.100 Inspection and testing.

The purchasing officer shall inspect supplies and equipment delivered to determine their conformance with the specifications set forth in the order or contract. The purchasing officer shall have authority to require chemical and physical tests of samples submitted with bids and samples of deliveries which are necessary to determine their quality and conformance with specifications.

3.20.110 Bidding procedure prescribed.

Whenever bids are required by law or by this code for the letting of contracts, the doing of work or the furnishing of supplies, equipment or materials, all of the steps, acts and proceedings required by law or by this code shall be fully complied with, an d in particular and supplementary to the acts, steps and procedures, the procedure hereinafter set forth in this section regulating the notices inviting bids, the publication and posting of the notices, and the opening of the bids shall be followed:

A. Notice—Contents. The notice inviting bids shall set a date for the opening of bids. All such notices, whether mailed, published, or posted, shall state the date, the hour, and the place at which the bids called for are to be opened, and shall also state the date, the hour, and the place of the city council meeting at which the city council intends to take action on the bids.

B. Bids—Opening. All bids shall be returnable to the purchasing officer or to the office of the city clerk, and at the hour and date stated in the notice, all bids shall be publicly opened at the office of the city clerk in the presence of the city clerk, purchasing officer, a representative of the department, or departments, to which the purchase or contract is to be charged, and all ot her interested parties who wish to attend and witness the opening of the bids. As each bid is opened, it shall be read aloud so that all persons interested in the bidding may hear the contents thereof, although no more of the bid need be read or announced than would ordinarily be announced in an open city council meeting for the same purpose. From and after the time of their opening, the city clerk shall, upon request of any interested party, read or give such further information from the bid as may be requested.

C. Bids—Compiling. After they have been opened, all bids shall be examined and studied by the city clerk, purchasing officer and any other officials necessary for the proper analysis of the bids to see if they comply with the notice inviting bids and are in all other respects in good order. A report shall then be made by the appropriate department to the city council announcing the results of the ORDINANCE NO. 2447

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investigation and particularly designate which bid is found to be the lowest bid, the next lowest bid, a nd all of the other bids in ascending order of the figure or figures quoted.

D. Bids—Report—Awarding.

1. At the meeting of the city council at which the bids are acted upon, the report shall be read publicly and the bid of the lowest bidder shall be publ icly announced.

2. After having complied with the foregoing procedure, the city council shall proceed in accordance with applicable provisions of law or this code either to award the bid and to let the contract therein referred to, or to take such other action as may be authorized by law.

E. Officer—Deputies. In the absence of the city clerk or purchasing officer, a duly authorized assistant or deputy may act in his place.

3.20.120 Joint purchasing agreements.

A. Whenever the city council finds that the public interest and convenience require, it may enter into joint purchasing agreements for the acquisition of city services, supplies and /or equipment, with any other public agency; provided, that such agreements are authorized by the laws of the state.

B. The provisions of this chapter shall not apply to purchases made under such an agreement: provided, that the city council shall, by resolution, prior to the execution of such an agreement, establish rules for administrative practices to be followed by the purchasing agent with respect to such joint purchasing agreements.

3.20.125 Piggybacking purchasing agreements.

A. The purchasing officer may arrange for the city and enter into purchase contracts with a vendor(s) for the purchase of supplies, equipment, services, including but not limited to materials, vehicles and apparatus, the pricing and terms of which have been previously established by another local, county, state, federal or other public entity, school district, League of California Cities, Cal ifornia Communities Program, or other nonprofit association or group consisting of governmental entities, provided that:

1. The purchase contract with the vendor(s) is the result of competitive bidding or negotiation and is made in compliance with the com petitive bid or proposal requirements of any participating entity or organization;

2. The purchase is made within two years of the competitive bid or negotiation; The agreement or purchase order must be valid/not expired and the vendor/consultant has prov ided written authorization for the city to make purchases using the same (or lower) pricing.

3. The purchase conforms to the city's specifications for the item or service; and ORDINANCE NO. 2447

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4. The estimated price of the purchase is lower than that estimated for the purchase if made directly by the city pursuant to this chapter.

B. Notwithstanding subsection 3.20.125(A), approval of a "piggyback" purchasing agreement pursuant to this section sha ll be obtained from city council for an award of a purchase in an amount exceeding of fifty thousand dollars ($50,000) or more.

3.20.130 Local vendor preference.

A. Whenever practical, the purchasing officer shall first ascertain the availability of goods and services from responsible local sources within city limits before considering outside sources and, if available, shall (as provided for in Section

3.20.050) solicit formal and/or informal bids from responsible local sources seeking the best price, quality, and delivery possible that best serves the interests of the city.

B. The purchasing officer may seek competitive pricing outside the city when it is determined that the best interests of the city related to price, quality and delivery will not be served by local sources.

C. The purchasing officer may establish competitively priced purchase agreements, open purchase, and blanket purchase orders with responsible local vendors via written quotes or negotiated agreement as provided for in Section 3.20.050.

D. For purposes of determining final cost, City of Montebello vendors may be allowed a one percent allowance in determination of low bid based upon estimated sal es and business tax return and local service convenience, except when such an allowance is prohibited by the grantor of funds to purchase such goods and services. All requests for sealed bids must include notification of local vendor allowance.

3.20.135 Splitting purchases – financial interest prohibited.

A. No officer or employee of the city or its agencies shall split or separate a purchase/procurement of services, supplies and/or equipment for the purpose of evading the dollar amount bid threshold provisions of this chapter. The acquisition of services, supplies and/or equipment shall be made with a single contract covering all services to be provided.

B. No city employee who participates in the selection or approval of a vendor supplying services, supplies and/or equipment to the city, nor any person who has supervisory responsibility for any such employee, shall have a direct financial interest in any business entity under consideration.

3.20.140 Public works projects (uniform public construction cost accounting act).

A. Adoption of Uniform Public Construction Cost Accounting Act. The city has elected to be subject to the Uniform Public Construction Cost Accounting Act (hereinafter referred to as the "UPCCA" or the "Act"). City contracts for public p rojects and maintenance work shall be governed by applicable state laws including the Act, Public Contract Code Section 22000 et seq, and the California Uniform Construction ORDINANCE NO. 2447

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Cost Accounting Commission's (hereinafter, "UPCCA Commission") policies and procedures manual and cost accounting review procedures, as amended from time to time.

The term "public works" shall mean the same as the term "public project," as defined by the Act, which means any of the following: (1) construction, reconstruction, erection, alteration, renovation, improvement, demolition, and repair work involving any publicly owned, leased, or operated facility; (2) painting or repainting of any publicly owned, leased, or operated facility; and (3) in the case of a publicly owned utility sy stem, "public project" shall include only the construction, erection, improvement, or repair of dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.

The term "maintenance work," as defined by the Act, includes: (1) routine, recurring, and usual work for the preservation or protection of any publicly owned or publicly operated facility for its intended purposes; (2) minor repainting; (3) resurfacing of streets and highways at less than one inch; (4) landscape maintenance, including mowing, watering, trimming, pruning, planting, replacement of plants, and servicing of irrigation and sprinkler systems; and (5) work performed to keep, operate, and maintain publicly owned water, power, or waste dispos al systems, including, but not limited to, dams, reservoirs, power plants, and electrical transmission lines of two hundred thirty thousand volts and higher.

Public projects and maintenance work shall be procured through the procedures and at the monetary thresholds set forth in the Act and as further described in this chapter.

B. Pre-Bid Contractors List for Public Projects and Maintenance Work. The city shall develop and maintain a list of qualified contractors, identified according to categories of work for all projects and any scheduled projects, on an annual basis in accordance with the Act (Public Contract Code Section 22034(a)).

C. Contracts for Public Projects and Maintenance Work of Sixty Thousand Dollars or Less. Public projects and maintenance work of sixty thousand dollars or less (or the current amount specified in the Act) may be performed by city employees, by force account, by negotiated contract or by purchase order. Where it is anticipated that a project may be conducted and finished at a cost of sixty thousand dollars (or the amount as specified the Act) or less, the city manager or his/her designee is authorized to approve the project, provided the expenditure is within the approved budget.

D. Contracts for Public Projects and Maintenan ce Work of Two Hundred Thousand Dollars or Less. Public projects and maintenance work estimated to cost two hundred thousand dollars (or the amount as specified in the Act) or less may be procured through the following informal procedures prescribed by the Act:

1. Notice Inviting Informal Bids. The city manager or his/her designee shall send a notice inviting informal bids not less than ten calendar days before bids are due to: (a) all contractors on the list of qualified contractors developed by the UPCCA ORDINANCE NO. 2447

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Commission; or (b) all contractors on the list of qualified contractors and to the designated construction trade journals specified in Section 22036 of the Public Contract Code. The notice inviting informal bids shall describe the project, how to obtain m ore detailed information about the project, and the time, date and place for the submission of bids. Additional contractors and/or construction trade journals may be notified at the discretion of the department soliciting bids, provided however:
a. If there is no list of qualified contractors maintained by the city for the particular category of work performed, the notice inviting bids shall be sent only to the construction trade journals specified by the commission. b. If the product or service is proprietary in nature such that it can be obtained only from a certain contractor or contractors, the notice inviting informal bids may be sent exclusively to such contractor or contractors.

2. Distribution of Bid Documents. B id documents may be transmitted and/or received via mail, facsimile, or email notice inviting informal bids to all construction trade journals specified in Section 22036 of the Public Contract Code.

3. Award of Contracts. The city manager or his/her designee is authorized to award such informal Public projects and maintenance work, provided the expenditure is within the approved budget and in a form approved by the city attorney. The city manager or his/her designee may, at his/her sole discretion, reject any or all bids presented and waive any minor irregularity or informality in such bids. The contract shall be awarded to the lowest responsive, responsible bidder. If two or more bids are the same and the lowest, the city manager may accept the one he/she chooses. If no bids are received through the informal procedure, the project may be performed by city employees, by force account or negotiated contract without further complying with this section.

4. Informal Bids Between Two Hundred Thousand Dollars and Two Hundred and Twelve Thousand Five Hundred Dollars. If all bids received are in excess of the amount specified in this section, the city council may, by adoption of a resolution by a four -fifths vote, award the contract, at two hundred and twelve thousa nd five hundred dollars or less, to the lowest responsible bidder, if it determines the cost of the estimate of the city was reasonable.

E. Contracts for Public Projects and Maintenance Work Greater Than Two Hundred Thousand Dollars. Public Projects and Maintenance Work of more than two hundred thousand dollars (or the current amount as specified in the Act) shall be procured through the following formal bidding procedures prescribed by the Act:

1. Notice Inviting Formal Bids. The city manager or his/her designee shall publish a notice inviting formal bids for public projects and maintenance work at least fourteen calendar days before the bid opening date in a newspaper of general circulation in the city. Additionally, the city manager or his/her designee shall ORDINANCE NO. 2447

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send a notice inviting formal bids to all contractors on the list of qualified contractors and to the designated construction trade journals specified in Section 22036 at least fifteen calendar days before bids are due. The notice shall describe the project, how to obtain more detailed information about the project, and the time and place for submission of bids.

2. Bidder's Security. All bids presented in connection with the public project shall be accompanied by bidder's security in the form and amo unt prescribed by Public Contract Code Section 20170, which security shall be dealt with as prescribed therein. In all cases bidders shall be entitled to return of bid security provided that a successful bidder shall forfeit its bid security upon refusal o r failure to execute the contract within ten days after the notice of award of contract has been mailed, unless the city is responsible for the delay. The city council may, on refusal or failure of the successful bidder to execute the contract, award it to the next lowest responsible bidder. If the city council awards the contract to the next lowest bidder, the amount of the lowest bidder's security shall be applied by the city to the difference between the low bid and the second lowest bid, and the surplus, if any, shall be returned to the lowest bidder.

3. Bid Opening Procedure. Sealed bids shall be submitted to the department identified in the invitation for bid documents and shall be identified as bids on the envelope. Bids shall be opened in public at the time and place stated in the public notice. A tabulation of all bids received shall be open for public inspection during regular business hours for a period of not less than thirty calendar days after the bid opening.

4. Award of Contracts. Contracts shall be awarded by the city council to the lowest responsible bidder. The city council may, in its sole discretion, waive minor irregularities in the bids or in the bidding procedures. The city council may reject all bids presented, and re-advertise for bids.

5. Tie Bids and No Bids. If two or more bids are the same and the lowest, the city council may accept the one it chooses. If no bids are received through the formal procedure, the project may be performed by city employees, by force account or negotiated contract without complying with this section.

6. Rejecting Bids and Performing Project through City Employees. In its discretion, the city council may reject any bids presented, if the city, prior to rejecting all bids and declaring that the project can be more economically performed by employees of the city, furnishes a written notice to an apparent low bidder. The notice shall inform the bidder of the city's intention to reject the bid and shall be mailed at least two business days prior to the hear ing at which the city intends to reject the bid. If after the first invitation of bids, all bids are rejected, the city shall reevaluate its cost estimates of the project and either:
a. Abandon the project or re -advertise for bids in the manner described by this section; or
ORDINANCE NO. 2447

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b. May have the project completed by force account without further complying with this section, if it passes a resolution by a four-fifths vote of the city council declaring that the project can be performed more economically by the employees of the city.

7. Performance Bonds. The department head shall have authority to require a performance bond before entering a contract in such amount as he or she finds reasonably necessary to protect the best interests of the city. If the city manager requires a performance bond, the form and amount of the bond shall be described in the notice inviting bids.

F. Emergencies.

1. In cases of emergency when repair or replacements are necessary, the city council, pursuant to a four-fifths vote, may proceed at once to replace or repair any public facility without adopting plans, specifications, strain sheets, or working details, or giving notice for bids to let contracts. The work may be done by day labor under the direction of the city council, by contr actor, or by a combination of the two. The city council's authority under this section may be exercised pursuant to Public Contract Code Section 22035.

2. In case of emergency, if notice for bids to let contracts will not be given, the city shall comply with Chapter 2.5 of Part 3 of Division 2 of the Public Contracting Code (commencing with Section 22050).

3. City council delegates to the city manager, the authority to order any direct and immediate action necessary to repair or replace a public facility, procure the necessary equipment, services and supplies for the purposes of addressing an emergency, without giving notice for bids to let contracts per Paragraph 2 of this section. If the city manager orders any action specified under this section, the city manager shall report to city council at its next meeting as required under Section 22050 of the Public Contract Code.

SECTION 4 . AMENDMENTS; ADDITIONS . Chapter 3.21 “Contracts for Professional and Special Services” of the Montebello Municipal Code is amended and will read as follows ((deletions in strikethrough and additions in double underline):

CHAPTER 3.21

CONTRACTS FOR PROFESSIONAL AND SPECIAL SERVICES

3.21.010 Definitions.

For purposes of this chapter, the following words shall have the following meanings:
"Professional/special services" means services which require special performance criteria; special or specific equipment; specific experience, knowledge, training, personal judgment, quality of work or factors other than simply obtaining the service at the lowest cost to the city. Such services include, but are not limited to, those provided by attorneys, ORDINANCE NO. 2447

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architects, engineers, land surveyor s, construction managers, appraisers, experts, accounting firms, security firms, computer consultants/programmers and/or other specialized consultants. Professional/special services do not include services rendered by city officers or employees.

3.21.020 Experience and qualifications of professional/special service providers.

A. In contracting for professional/special services, such contracts shall only be awarded to firms or persons who have demonstrated adequate levels of experience, competence, resources/equipment, staffing and other professional qualifications necessary for more than a satisfactory performance of the services required in the time period needed.

B. Once the department requesting the professional/special service has determined a firm has an adequate level of competence, the cost of the service may be considered, however, price may not be the sole factor in determining to whom a contract shall be awarded. The city's best interests may be served by awarding the contract to a higher priced contractor based on the scope of services available, unique skills, staffing levels, timing, prior experience, past working relationship, and other factors required by the department or proposed by the contractor.

C. No commitment or contract with a definitive term may exceed five years.

3.21.025 Conformance with bidding procedures.

The acquiring of professional/special services shall be made and accomplished in conformity with Section 3.21.050 or Section 3.21.060 except:

A. When an emergency, as determined by the purchasing agent with the written approval of the city manager, is deemed to require that an order be placed with the nearest available source;
B. When the professional/special services needed can be obtained from o ne source only;
C. When the city council by a four -fifths vote determines to dispense with such bidding and other procedures required by the above-mentioned sections in every individual instance upon a finding by the city council that it would be impractical, useless, or uneconomical in such instance to follow the procedures, and that the welfare of the public would be promoted by dispensing with the same; or D. When the amount of the professional/special services involved is less than two thousand dollars ($1,999 or less).

E. Compliance with the requirements set forth in the provisions of this chapter shall apply to all contracts awarded after the effective date of this subsection, as may be amended.

ORDINANCE NO. 2447

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F. Notwithstanding the exceptions under this section, no commitment or contract with a definitive term may exceed five years.

G. Nothing shall be construed to preclude the city from awarding a written contract for professional type services, as defined by case or statutory law, without complying with the provisions of this Article. The term “professional services” means services entailing a high degree of specialized technical or mental skill, in a recognized field of expertise. Such services include attorneys, physicians, architects, engineers, appraisers , accountants, collection agency, detective agency, draftsman, mortuary, hospitals, escrow agency, travel agency, insurance broker, employment agency, advertising agency, real estate, chiropractic and optometry.

Any use or application of the bidding proce dure exceptions listed herein for the acquisition of professional/special services shall require the making of a written record of such use or application, including the existence of a valid reason for such use or application. This written record shall be kept for at least five (5) years.

3.21.030 Request for proposals.

The acquiring of professional/special services shall be procured through a negotiated contract and should include a request for proposals ("RFP"), unless Section 3.21.025 or Section 3.21.050 applies.

3.21.040 Decentralized bid solicitation.

Soliciting bi ds for professional/special services is decentralized and shall be the responsibility of the department director requesting the service; however, the city manager may be contacted to assist with bids requiring the formal sealed RFP process set forth in Section 3.21.060.

3.21.050 Contracts for less than fifty thousand dollars ($50,000).

The following procedure shall be used when seeking professional/special services estimated to have an annual cost of less than fifty thousand dollars ($49,999 or less).

A. In nonemergency situations, the requesting department shall contact a minimum of three consultants or firms.

B. Unless the city council authorized the entering into or the award of a specific contract for professional/special services, the city manager shall approve in writing the award of all such contracts, taking into consideration the recommendation of the department director requesting the professional/special services at issue.

ORDINANCE NO. 2447

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C. The city manager or his or her duly authorized designee is authorized to approve in writing professional/special service contracts with an annual estimated cost of less than fifty thousand dollars ($49,999 or less).

3.21.060 Contracts of fifty thousand dollars ($50,000) or more.

The following procedure shall be used when seeking professional/special services estimated to have an annual cost of fifty thousand dollars ($50,000) or more.

A. In nonemergency situations, departments shall utilize the following formal sealed RFP process:

1. A formal sealed RFP template shall be developed for solicitation of professional services contracts of fifty thousand dollars ($50,000) or more.

2. The department shall advertise in appropriate publications , electronic purchasing databases and/or use the professional services listings, as available, during the solicitation process.

3. Notice inviting RFP's shall be posted at city hall, an appropriate and recognized electronic purchasing database and on the city's website at least fourteen (14) calendar days before the due date of submission of the RFP, when reasonably possible.

4. The notice shall at least describe the general type of service needed, how the RFP minimum scope of work can be obtained, the requirement of a written sealed proposal, state the closing date, place, and time for submission of the RFP.

5. Sealed request for proposals shall be submitted directly to the requesting department through an approved process, as designed and determined by the purchasing officer and need not be opened publicly.

6. Departments shall analyze proposals for compliance with RFP requirements, value of the total scope of services and make a recommendation to city council for selection or for follow up interviews with those consultants/firms submi tting proposals.

B. Contracts for professional/special services of fifty thousand dollars ($50,000) or more require the approval of the city council and the signature of the mayor, or in his or her absence, the mayor pro tempore, pursuant to the provisions of Gov.

Code Sections 40601 and 40602 unless specifically delegated as part of the city council approval action.

C. Contracts for professional/special services shall be on the city's standard form and shall be reviewed and approved as to form by the city attorney.

D. No commitment or contract with a definitive term may exceed five years.

ORDINANCE NO. 2447

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3.21.070 City manager authority to execute certain contracts.

The city manager or his or her duly authorized designee shall be authorized to sign on behalf of the city all contracts for professional/special services, which are less than a total contract amount of fifty thousand dollars ($50,000) in any one fiscal year period.

3.21.080 Splitting purchases or contracts – financial interest prohibited.

A. No officer or employee of the city or its agencies shall split or separate a purchase/procurement of professional/special for the purpose of evading the dollar amount bid threshold provisions of this chapter. The acquisition of professional/special service s should be made with a single contract covering all services to be provided.

B. No city employee who participates in the selection or approval of a professional/special service provider, nor any person who has supervisory responsibility for any such empl oyee, shall have a financial interest in any professional/special service provider business entity under consideration.

SECTION 5. EFFECTIVE DATE. This Ordinance shall become effective thirty (30) days after approval by the Council.

SECTION 6. PUBLICATION. The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published or posted according to law.

APPROVED AND ADOPTED this 9th day of February 2022.

_______________________________
Kimberly A. Cobos-Cawthorne, Mayor

ATTEST:

________________________
Christopher Jimenez, City Clerk

APPROVED AS TO FORM:

__________________________
Arnold M. Alvarez-Glasman, City Attorney
ORDINANCE NO. 2447

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I HEREBY CERTIFY that the foregoing Ordinance was introduced at the regular meeting of the City Council on the 26th day of January 2022 and was adopted by the City Council of the City of Montebello at its meeting held on the 9th day of February 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________
Christopher Jimenez, City Clerk

ITEM #____

CITY OF MONTEBELLO

CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Fernando Pelaez, Fire Chief
SUBJECT: Approve Replacement and Purchase of the Fire Command Vehicle DATE: February 9, 2022
RECOMMENDATIONS:

It is recommended that the City Council:
1) Authorize the purchase and replacement of the Fire Command Vehicle using pre- bid Sourcewell Contract #0011620-NCL awarded to NCL Government Capital; and 2) Amend the Fiscal Year 2021-22 budget by increasing appropriations by $220,728 in Account No. 100-80-815-XXXX (General Fund, Fire, Support Services, Vehicle Purchases); and
3) Take such additional, related actions necessary to actions to effectively and efficiently procure the Fire Command Vehicle.

FISCAL IMPACT
The total amount necessary to procure the Fire Command Vehicle is $220,728, which includes the cost of the required emergency fire upfitting for specialty command vehicles, such as mobile radios, antennas, vehicular repeaters, Bluetooth, Intelligent internet equipment, intercom sensors, emergency lights and sirens , rugged computing, mobile data computer (MDC ), Rugged LTE Modems & Mobile Data/Wi-Fi Gateways and all required installation services that meet the industry requirements for Fire Command Vehicles.

The Department is requesting for City Council to amend the Fire Departments Fiscal Year 2021-22 Budget by increasing appropriations by $220,728.00 from the General Funds for the purchase of the fire vehicles . This fire safety vehicle has been identified as a high 15 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Approve Replacement and Purchase of the Fire Command Vehicle

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priority due to the need to replace the current outdated Fire Command Vehicle, and the need for the Battalion Chief’s to b e able to fully function as incident commanders in the field, and therefore, it is necessary to procure it, utilizing the General Funds.

BACKGROUND
The Montebello Fire Department operates three (3) fire stations , with Suppression activities that account for the vast majority of emergencies, resulting in approximately 22 emergency calls per day, for a total of 8,000 calls for service each year. Part of those emergency operations is to have the on -duty Battalion Chief safely, effectively and efficiently respond to an incident and deploy an incident command. The Battalion Chief utilizes a Fire Command Support Vehicle to respond to incidents , these command vehicles are fully equipped with authorized 911 emergency equipment and up-to-date wireless data technology when providing incident command to the scene of an incident.

Currently, the Montebello Fire Department only counts with one Fire Command Vehicle a 2013 Chevrolet Suburban 2500 that is close to 10 years old and has approximately 40k miles. This is the o nly vehicle of its kind in the fleet, and there is no back up command vehicle. The current command vehicle has been out of service due to repairs, creating a serious potential risk if not able to respond in a timely manner to an incident and provide incident command support. It is important for continuity of operations and services that the Montebello Fire Department maintain a reserve vehicle to ensure the Department to increase the operating capabilities and remain compliant with the National Fire Protection Association (NFPA) 1901 Standard for Automotive Fire Apparatus and Vehicles.

ANALYSIS

The Montebello Fire Department staff have conducted a vehicle resource assessment identifying the need for replacements and additional purchases to meet the growing demand in the Department, and ensuring full compliancy in our ability to increase vehicle and apparatus resources that will meet the industry standards and operating capabilities to minimize risks, and ensure safety. Any fire apparatus is an emergency vehicle that must be relied on to transport fire personnel safely to and from an incident and to operate reliably and properly to support the mission of the Fire Department.

By only having one (1) Fire Command Vehicle that breaks down at any time during an emergency operation not only compromises the success of the operation but might jeopardize the safety of the fire personnel relying on that vehicle to support their role in the operation. An outdated, and highly utili zed fire vehicle cannot be considered the primary and sole vehicle in providing emergency services to a community. Rather, it meets the standards for a Reserve (back-up) Fire Command Vehicle, this will ensure that emergency operations are fully maintained during an incident or more than one incident.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 9, 2022 Approve Replacement and Purchase of the Fire Command Vehicle

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Montebello City CouncilFebruary 9, 2022

Montebello City Council
February 9, 2022