Monterey Park City Council
June 18, 2025

City of Monterey Park Capital Project
Project No. 99031/99032
Lead Dept./Division Public Works
Supporting Division Water
Staff Contact Ziad Mazboudi
Engineering Manager
Start Date FY 24-25
Target Completion FY 25-26
General Plan Policy
Project Description: Safety 20.2
Operating Budget Impact:

Estimated Costs and Funding Sources:

FY 2024-25
Carryover
FY 2025-26 Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
Total
$ 4,002,479 $ 4,002,479
$ -
$ -
$ 4,002,479 $ - $ - $ - $ - $ - $ 4,002,479
FY 2024-25
Carryover
FY 2025-26 Budget
FY 2026-27
Forecast
FY 2027-28
Forecast
FY 2028-29
Forecast
FY 2029-30
Forecast
Total
408 - WATER BOND FUND $ 4,002,479 $ - $ - $ - $ - $ 4,002,479 TOTAL FUNDING $ 4,002,479 $ - $ - $ - $ - $ - $ 4,002,479 Water
S. Garfield & S. Atlantic Water Main Replacement
Ext. 320
Funding Source(s)
The project includes the replacement of deteriorated water main along Garfield from Graves to Coral View, and related ancillaries.

Additionally, replacement of deteriorated water main along Atlantic from Newmark to Harding, and related ancillaries.

Project Estimate

TOTAL ESTIMATE
Construction
R60

Debt Service
FY 2025-2026 Proposed Budget
S1

DEBT SERVICE
Debt service obligations of the City and budgeted amounts required to meet these obligations are presented in this section. These obligations involve long-term debt, which was used to build capital facilities or to acquire equipment that the City is now using.

Sales Tax Revenue Bonds Series 2021
On October 1, 2021, the City issued Sales Tax Revenue Bonds Series 2021 to fund the rehabilitation a various City streets. This is a 30-year bond funded with Measure M, Measure R and Proposition C revenues.

Siemens Energy Efficiency Project
On September 23, 2014, the City entered into a 15-year lease purchase agreement with Siemens Public, Inc. for the purchase and installation of interior lighting retrofits, exterior lighting retrofits, HVAC equipment replacement at select sites, building automation system and water meter replacements. Funding for this lease purchase is approximately 85% water fund,401, and 15% general fund,101.

Police Mobile Radios & System
In March 2021, the City entered into a 10-year lease purchase agreement with Motorola Solutions, Inc., for the purchase of Motorola APX radios and related accessories for the Police Department. This lease purchase is funded using the COPS Fund, 308.

Pension Obligation Bonds 2021 Series A
On February 16, 2021, the City issued Pension Obligation Bond 2021 Series A. The bond merged POB 2004 and paid off the full Unfunded Actuarial Liability through FY2020- 2021. This is a 22-year bond payment and is funded with the City’s retirement fund, 506.

Water Revenue Bond
On May 1, 2024, the City issued Water Revenue Bonds Series 2024 to fund aging water infrastructure. This is a 30-year bond with an aggregate interest rate of 4.14%.

Debt Service
FY 2025-2026 Proposed Budget
S2
San Gabriel Valley Municipal Water District
In March of 2021, the City entered into a 10-year loan agreement with the San Gabriel Valley Municipal Water District for the PFAS treatment system. This loan is funded using the water fund, 401. Payment for this loan will begin when project is complete.

Fire Truck; Public Works Dump Truck; and Citywide HVACs On May 16, 2025 the City entered into a 9-year lease purchase agreement with Banc of America Capital Corp., Inc. for the purchase of one fire engine truck, one dump truck and various HVACs for City buildings. Funding for this lease purchase is from the internal service shop fund 501 and building maintenance fund 506.

Debt Service
FY 2025-2026 Proposed Budget
S3
Fiscal Year Fiscal Year
Fund Type of
Debt Description 2024-2025 2025-2026
621 Bonds Sales Tax Revenue Bonds Series 2021 1,050,200 1,048,450 (Final date: 06/2051)
101 Lease
Purchase SIEMENS Energy Efficiency Project 150,167 156,766 401 (Final date: 06/2030) 850,950 888,341
Sub-Total 1,001,117 1,045,107
308
Lease
Purchase Police Mobile Radios & System 307,745 307,745
(Final date: 09/2032)
202 Bonds Pension Obligation Bonds 2004 1,433,588 1,435,283 Pension Obligation Bonds 2021 Series A 5,906,132 5,904,422 Merge with 2004 POBs (Final date:
06/2043)
Sub-Total 7,339,720 7,339,705
401 Bonds Water Revenue Bonds 1,211,803 1,212,575
(Final date: 02/2054)
401 Loan SGVMWD 0 400,000
(Final date: 12/2036)
501 Lease
Purchase Fire Engine Truck 0 190,620
506 Lease
Purchase Dump Truck; Citywide HVACS 0 190,620
(Final date: 05/2034)
Total $10,910,585 $11,734,821

T1
RESOLUTION NO.

A RESOLUTION ADOPTING THE FISCAL YEAR 2025-2026 FINAL OPERATING, DEBT AND CAPITAL BUDGET FOR THE CITY OF MONTEREY PARK; THE SUCCESSOR AGENCY TO THE MONTEREY PARK REDEVELOPMENT AGENCY; THE MONTEREY PARK FINANCING AUTHORITY; THE MONTEREY PARK HOUSING AUTHORITY; AND THE GEOLOGIC HAZARD ABATEMENT DISTRICT The City Council for the City of Monterey Park and the City Council acting on behalf of the Successor Agency (collectively referred to, for convenience, as the “City”) does resolve as follows:

SECTION 1: FINDINGS. The City Council finds and declares as follows:

A. The City Council reviewed the proposed final Operating and Debt Budget (“Budget”) for the City and Capital Improvement Plan (“CIP”) for fiscal year 2025-2026;
B. The Budget and CIP are based upon appropriate estimates and financial planning for the City’s operations, debt and capital improvements; C. The City Council conducted a public study session on May 28, 2025; D. The City Council is fully informed regarding the City’s current finances, projected revenue, and financial obligations; and
E. It is in the public interest for the City Council to adopt the Budget and CIP as proposed by the City Manager.

SECTION 2: Adoption. The Budget and the Capital Improvement Projects as incorporated by reference to this Resolution are approved and adopted subject only to the authorizations set forth below. Such approval and adoption includes, without limitation, the Position Control Listing of Authorized Positions, Classification and Compensation Plans set forth in the Budget which recognizes new classifications and removes unused classifications.

SECTION 3: Appropriations Limit.

A. Article XIIIB of the California Constitution requires the City to set its Appropriations Limit on an annual basis;
B. The City’s Appropriations Limit may be adjusted annually based upon inflation and population growth.

C. The City Council may choose the method of calculating adjustments to the City’s Appropriations Limit on an annual basis. For inflation, pursuant to Article XIIIB, § 8(e)(2), adjustments to the Appropriations Limit may be calculated using either the percentage change in per capita personal

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income from the preceding year or the percentage change in the local assessment roll from the preceding year because of local nonresidential new construction. For population growth, pursuant to Government Code § 7901(b), the City may either use the percentage growth either in its jurisdiction or from the surrounding county.

D. Pursuant to Article XIIIB of the California Constitution, and those Government Code sections adopted pursuant to Article XIIIB, § 8(f), the City Council chooses to adjust the City’s Appropriations Limit by calculating inflation using the California per capita personal income growth and calculating population growth by using the percentage change in population in Los Angeles County.

E. As a result of the adjustments made to the City’s Appropriations Limit, the City Council sets the Appropriations Limit for fiscal year 2025-2026 at $121.2 million.

SECTION 4: Budget Appropriations. Based upon the Budget, the total General Fund operating budget, including transfers, is $73.9 million. The Overall City Budget is $170.7 million including Capital Improvement Projects. The City Manager, or designee, is authorized to implement the appropriations for City Departments.

SECTION 5: CIP Appropriations. Based upon the CIP, a total of $17 million is appropriated for capital improvement projects for fiscal year 2025-2026. The City Manager, or designee, is authorized to implement the CIP.

SECTION 6: Reappropriation. The City Manager, or designee, is authorized to reappropriate any unused appropriations for capital projects, special projects, and grant programs at the close of fiscal year 2025-2026 for the Budget and CIP.

SECTION 7: Fund Operating Reserves. The City Manager, or designee, may appropriate any remaining revenues at the close of fiscal year 2025-2026 into the applicable Fund operating reserve per Governmental Accounting Standards Board (GASB) Statement No. 54.

SECTION 8: Budget Adjustments. The Budget may be subsequently adjusted as follows:

A. By majority vote of the City Council;
B. By the City Manager, or designee, for all appropriation transfers between programs and sections within a City department and between appropriation units (e.g., salaries and benefits, services and supplies, and capital outlay) within programs;
C. Objects code expenditures within appropriation units in a program are not

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restricted so long as funding is available in the appropriation unit as a whole.

SECTION 9: Contracting Authority.

A. Pursuant to Monterey Park Municipal Code (“MPMC”) Chapter 3.20, the City Manager, or designee, is authorized to bid and award contracts for the equipment, supplies, and services approved in the Budget.

B. Pursuant to MPMC § 3.90.050(c), the City Manager or designee, is authorized to execute all contracts awarded for equipment, supplies, and services approved in the Budget.

C. For all other services, equipment, and supplies, the City Manager or designee, is authorized to execute contracts in accordance with the MPMC.

SECTION 3: Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.

SECTION 4: Recordation. The Mayor, or presiding officer, is authorized to sign this Resolution signifying its adoption by the City Council of the City of Monterey Park and the City Clerk, or her duly appointed deputy, may attest thereto.

SECTION 5: Effective Date. This Resolution will become effective immediately upon adoption and will remain effective unless repealed or superseded.

PASSED AND ADOPTED this 18h day of June 2025.
____________________________
Vinh T. Ngo, Mayor
ATTEST:
____________________________
Maychelle Yee, City Clerk
APPROVED AS TO FORM:
____________________________
Karl H. Berger, City Attorney

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Management and Budget Policies are developed and maintained to set forth the framework for not only the development of the budget for the upcoming year, but the ongoing operations and future needs of the citizens of Monterey Park. The following policies are the foundation that supports the services that our citizens expect and deserve.

1. Legal Requirements Regarding Annual Budget

2. Budgetary/Accounting Basis

3. Description of Reporting Entities

4. Budgetary Fund Structure

5. General Management and Budget Policies

6. Revenue Policy

7. Purchasing Policy

8. Fund Balance Policy for Governmental Funds

9. Other Postemployment Benefits (OPEB) Sustainability Policy

10. Capital Improvement Program Policy

11. Investment Policy

12. Debt Administration and Policies

13. Grant Administration Policy

14. Cost Accounting Application

15. Article XIIIB Appropriations Limit

16. Source of Funds By Departments

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1. LEGAL REQUIREMENTS REGARDING ANNUAL BUDGET
Monterey Park Municipal Code Section 2.08.070, Subsection 8, establishes the City Manager's responsibility to prepare and submit to the City Council the annual budget for the operations of the City of Monterey Park during each fiscal year.

The annual budget adopted by the City Council serves as a guideline for operations of the City. From the effective date of the budget, the date of formal adoption by the City Council, expenditure amounts as proposed are appropriated to departments and offices for the respective expenditure objects and purposes named or described.

Budgeted expenditures are controlled at the fund and department level. The City Manager is authorized to transfer appropriations between the accounts of any department within individual funds. Council approval is required only for transfers between funds, or for an increase in total appropriations.

2. BUDGETARY/ACCOUNTING BASIS
The annual budget adopted by the City Council serves as a guideline for operations of the City. It includes proposed expenditures and estimated revenues and is legally adopted for all General, Special Revenue, and Proprietary Fund Types.

Budgets for the General, and Special Revenue Fund Types are adopted on a basis consistent with generally accepted accounting principles (GAAP). The modified-accrual basis of accounting is employed in the preparation of the budget for these fund types.

Budgets for proprietary funds are adopted on the “funds available” basis. Major differences for the GAAP basis of accounting include: Capital outlay is budgeted as expenditure in the year purchased; Accrued compensated absences are not considered expenditures until paid; Purchases of inventories are considered expenditures when purchased; Depreciation is not budgeted.

The budget is formally integrated into the accounting system and employed as a management control device during the year for all funds. At fiscal year-end, unexpended and unencumbered budget appropriations lapse. Encumbrances outstanding at year-end are carried into the following year for continuing appropriation.

3. DESCRIPTION OF REPORTING ENTITIES
Monterey Park's Municipal Services Program includes presentation of the annual budgets and operational activities of four distinct reporting entities: The City of Monterey Park, the Monterey Park Public Financing Authority, and the Monterey Park Housing Authority.

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The City of Monterey Park
The City of Monterey Park was incorporated on May 29, 1916, under the general laws of the State of California and enjoys all rights and privileges pertaining to general law cities.

The Monterey Park Financing Authority
The Monterey Park Public Financing Authority was established in June of 2021 under a joint exercise of power agreement to provide for the financing of public capital improvements for the City and Agency through the acquisition of obligations pursuant to debt purchase agreements.

The Monterey Park Housing Authority
The Monterey Park Housing Authority was established in September 1992 to provide affordable housing within the City. The members of the City Council act as the governing board of the Monterey Park Housing Authority.

The Successor Agency
The Successor Agency was established in February 2012 to replace the Former Monterey Park Redevelopment Agency. The members of the City Council act as the governing board of the Successor Agency.

4. BUDGETARY FUND STRUCTURE
 Governmental Fund Types
 General Fund – the general operating fund of the City.  Special Revenue Funds – are utilized to account for revenues derived from specific
sources, which are usually required, by law or administrative regulations to be accounted for in a separate fund. Special Revenue Funds include Retirement, Gas
Taxes, Park Facilities, Proposition A, Proposition C, Measure R, Measure M, Measure W, RMRA (SB1), SB2, Asset Forfeiture, Business Improvement District #1, Air Quality, Maintenance District 1972 Act, Developer Impact Fees, Public Safety Augmentation, CERCLA Liability, Housing, and Grant Funds.
 Major Funds include General Fund, Grants Fund, Retirement Fund, and Housing Fund.

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 Proprietary Fund Types
 Water Operation Fund – is used to account for water operations that are financed and operated in a manner similar to private business enterprises.  Water Treatment Fund – is used to account for water treatment activities that are
financed and operated in a manner similar to private business enterprises.  Refuse Fund – is used to account for receipts and expenditures relating to waste management activities including refuse collection, disposal, and recycling.
 Sewer Fund – is used to account for construction and improvement to deficient sanitary sewer mains identified in the Sewer Master Plan, as established pursuant to Monterey Park Municipal Code Section 14.06.060.  Internal Service Funds – are used to account for the financing of services provided by one department to the other departments of the City on a costreimbursement basis. Internal Service Funds include Auto Shop, Separation Benefits, Workers’ Compensation, Technology/Communications, Building Maintenance, General Liability, and Other Post-Employment Benefits (OPEB) Funds.

All funds indicated in the above are included in the audited financial statements.

5. GENERAL MANAGEMENT AND BUDGET POLICIES
 The City’s long-term financial plan takes into account of its capital improvement plan (CIPs) and financial forecast as part of its expenditure projections, revenue estimates as well as future debt position.  The City will avoid budgetary procedures that finance current expenditures at the expense of meeting future year's obligations, such as postponing expenditures, accruing future year revenues, or rolling over short-term debt.  Budgetary and accounting procedures will conform to Generally Accepted Accounting Principles (GAAP) for government agencies.
 The City Council shall be presented a midyear fiscal (budget) review, which provides written analysis of the City's financial health. The Midyear Review document is an update for significant events and charges occurring since the last update in the previous year. All of the key assumptions are reviewed

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and revised as necessary.
 The City Manager will provide a financial impact analysis of all policy initiatives, service changes and new projects.
 The City's General Fund will be self-supporting, as will the various enterprise or special purpose funds. The objective is to maintain budgets, which do not borrow from one fund to support another. Where fund transfers are made, they are to be based on sound financial policy and will not be carried out for the sake of expedience.
 The City is required to adopt a balanced budget for its General Fund prior to the beginning of the fiscal year. A balanced budget means current revenues equal current expenditures. The City will make all current expenditures with current revenues, avoiding procedures that balance current budgets by postponing needed expenditures, accruing future revenues, or rolling over short-term debt.

6. REVENUE POLICY
 The City will endeavor to maintain a diversified and stable revenue base to minimize the effects of economic fluctuations on revenue accumulation.  The City will estimate revenue using objective, analytical processes; in cases of assumption uncertainty, conservative projections will be utilized. The estimated growth rates used to project revenues are based on analysis, as adjusted for Monterey Park’s experience and outlook, as well as state economic conditions.
 The City will fund all current expenditures from current revenues, avoiding procedures that balance current budgets by postponing needed expenditures, accruing future revenues, or rolling over short-term debt.  The City will identify basic tax-provided services and will establish user fees and charges for services provided in excess of basic services and/or to non-taxpaying users.

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7. PURCHASING POLICY
 MPMC Chapter 3.90, entitled “Execution of Contracts,” establishes the means by which the City can generally become legally obligated under a contract.

Persons authorized to sign contracts on the City’s behalf include the mayor, the City Manager for contracts up to $60,000, and department directors for contracts up to $25,000.
 MPMC Chapter 3.20 and 3.90 generally establishes the procedures for obtaining supplies and services. The purchasing officer must approve purchases of supplies that either are not identified in the City’s current budget or constitute special supplies.
 Departments will be responsible to inform to the Finance Department for the use of the City’s credit card in accordance with the City’s Credit Card Usage Policy.
 Purchase Orders must be complete and have supporting documentation attached i.e., agreement cover page, quotes/bids/justification memo, etc.  MPMC Section 3.20.040 requires formal bidding for matters over $60,000.

MPMC Section 3.20.060 allows informal bidding for matters up to $60,000.  Please refer to MPMC §3.90.050 Signature authority for approved signature authority thresholds.
 Please refer to Administrative Policy #50-09 for the disposal of surplus property.
 MPMC Chapter 3.90.010 requires that the City Attorney approve all contracts.
 Whenever Federal Award funds are used the following criteria must be followed in addition to the City's Purchasing Policy guidelines. The Office of Management and Budget (OMB) issued the Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards, Final Rule (aka Uniform Guidance) which applies to all non-federal entities receiving Federal awards, and to all new federal awards and existing awards that receive additional funding (or funding increments) after December 12, 2014.

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8. FUND BALANCE POLICY
 The City’s fund balance classification includes five components:

Nonspendable, Restricted, Committed, Assigned, and Unassigned.  Unrestricted General Fund balance, including Committed, Assigned, and Unassigned, will be maintained at a minimum level of two months, as recommended by the Government Finance Officers’ Association (GFOA), of the General Fund regular revenues or operating expenditures. The City’s maximum unrestricted fund balance shall not exceed 50% of General Fund operating expenditures.
 General Fund committed fund balance will include amounts for Potential Catastrophic Events and Economic Stabilization. The funding of this committed fund balance account will be reviewed each year during the midyear fiscal review.
 An Assigned Fund Balance for future Capital Projects account will be established to capture accumulated, nonrecurring or unanticipated revenues or expenditures savings, and will be carried forward from year to year to provide resources for the City Council to fund future infrastructure and other onetime expenditure needs of the City.
 The City will maintain adequate reserve to fund annual paid and committed claims in the General Liability Fund and Workers’ Compensation Fund, scheduled vehicle maintenance and replacement in the Auto Shop Fund, accrued leave liability in the Separation Benefit Fund, technology and telephone replacement in the Technology/Data Processing Fund.  Working Capital (current assets minus current liabilities) in the City’s Enterprise Funds, including Water, Refuse, and Sewer, must be maintained at a minimum of two months’ annual operating expenses. In addition, of one quarter (25%) of accumulated depreciation of the Capital Assets of the enterprise funds is necessary to ensure adequate resources for reconstructing or rehabilitating capital assets as they
reach the end of their useful lives.
 It is the City’s goal to reduce its total future pension and retiree medical liabilities. The City participates in the California Employers’ Retiree Benefit Trust Program (“CERBT”) to prefund its Other Post Employment Benefits (OPEB) and funding is set aside through the annual budget process.

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 The City issued Pension Obligation Bonds 2021 Series A on February 16, 2021, reducing the Unfunded Actuarial Liability (UAL) to zero during fiscal year 2020-2021. Mitigation strategies to pay or reduce any new UAL are included with the UAL policy included in the Budget Book under tab Resolutions & Policies and are presented to the Council each year and updated according to Council’s directions.

9. OTHER POSTEMPLOYMENT BENEFITS (OPEB) SUSTAINABILITY
 The City’s post-employment medical benefits represent a significant employee-related compensation cost.
 The City adopted Resolution No. 11663 to prefund retiree health care benefits through the California Employers’ Retiree Benefit Trust Program (CERBT).  The CERBT program is an irrevocable trust and funds set aside in the Program cannot be used to meet any other City needs.
 The total annual contributions to the CERBT will be determined each year through the budget process and payments are shared by the City’s various funds.
 The City will continue to search and implement healthcare cost containment measures to meet the OPEB funding challenge, including besting rules which are commensurate with years of service and a tiered system of benefits based on hiring dates.

10. CAPITAL IMPROVEMENT PROGRAM POLICY
 The City will utilize a Five-Year Capital Improvement Program to systematically plan, schedule, and finance capital projects as determined by the City Council. The Five-Year Program will include major ongoing maintenance and rehabilitation costs to existing infrastructure and facilities, as well as the cost of new facilities or capital improvements.  The City’s Capital Improvement Plan (CIP) identifies each proposed project, the year the project will start, and the proposed method of financing.  The City will actively pursue grant and other outside funding sources for all capital improvements projects.
 The City will maintain all of its assets at a level adequate to protect the City's capital infrastructure and to minimize future maintenance and replacement

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costs.
 Whenever the City finances capital projects by issuing bonds, it will repay the bonds within a period not to exceed the expected useful life of the project.  The City will confine long-term borrowing to capital improvements or projects that cannot be financed from current revenues.

11. INVESTMENT POLICY
 This Statement is intended to provide guidelines for the prudent investment of the City's temporary idle cash and outline the policies for maximizing the efficiency of the City's cash management system. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash.  The policy shall direct the investment of the City's temporarily idle monies for all funds, including the general fund, special revenue funds, debt service funds, trust and agency funds, and proprietary funds. Employee deferred compensation, pension, and bond reserves are not managed by the City and are not subject to the City's Investment Policy.
 Criteria for selecting investments and the order of priority are: Safety, Liquidity, and Yield.
 The Policy provides for the creation of a Treasury Committee (“The Committee”). The Committee is comprised of the City Treasurer, the City Manager, the Assistant City Manager, and the Director of Finance.  It should be noted that any newly developed derivative of an allowable investment that is not specifically mentioned in the policy must be recommended by the City Treasurer for inclusion in the policy and any amendments to the policy must be submitted to the City Council for approval.
 The Treasury Committee shall maintain an approved list of primary security dealers and brokers and government sponsored investment pools. The Committee will review and amend the approved list periodically to ensure that the institutions continue to meet the selection criteria.  Purchases of investments shall, whenever practical, be made directly from the issuer, from a member of a Federalregulated securities exchange, from a national or state chartered bank, or from a brokerage firm.

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 Only commercial banks and savings and loan associations that demonstrate financial strength and are insured by the federal government may be selected to provide investment services.
 Only primary dealers registered with the Federal Reserve Bank of New York shall be used for Broker/Dealer instrument transactions.  Other financial institutions shall be selected using the following selection criteria: financial strength, reputation, area of expertise and ability to conform to the City and state mandated investment parameters.  All transactions described above shall be executed on a delivery versus payment basis. The custodian shall hold assets until the investments mature or the bank receives a request from the City to dispose of the securities.  Maturities of investment instruments in the portfolio shall be staggered as much as practical and shall be consistent with projected cash requirements.  All forecasted operating requirements shall be satisfied by maintaining an adequate level of liquidity in the portfolio.
 Within the parameters established by Section Ill., Investment Selection Criteria, and Section VI., Allowable Investments, investments should be diversified by security type and institution.
 The Annual Investment Report shall provide a summary of the year's investment activities and shall include a proposed statement of Investment Policy to be approved by the City Council during the first sixty days of the fiscal year.
 The City of Monterey Park will follow the prudent investor standards of Government Code Section 53600.3. Investment officers acting in accordance with written procedures and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided that deviations from expectation are reported in a timely and accurate fashion and appropriate action is taken to control adverse developments.
 As part of the City's annual audit, the City's external auditor shall review the City's investment activities to ensure compliance with the Investment Policy.  At the direction of the City Treasurer, the City's Investment Policy shall be reviewed and updated annually by the Committee to reflect changes in the

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California State Codes, general market conditions or to provide further clarification of the City's policies. The Investment Policy shall be adopted by the City Council annually.

12. DEBT ADMINISTRATION AND POLICIES
(A) COMPUTATION OF LEGAL DEBT MARGIN
(Fiscal Year 2023-2024) (In thousands)
Total Assessed Value of all Real and Personal Property $ 9,715,095 Debt Limit Percentage 15%
Total Debt Limit 1,457,264
Amount of Debt Applicable to Debt Limit 105,950
Legal Debt Margin $ 1,351,314
(1) In accordance with California Government Code Section 43605, total general obligation bonds outstanding cannot exceed 15 percent of total assessed valuation. As of June 30, 2024, the City had no general obligation bonds outstanding.
(B) DEBT POLICY
The City’s key debt management goal is to protect and enhance the viability of the General Fund and other associated operating funds to enable the City to continue to deliver top services to Monterey Park residents.
 The City uses debt financing only for capital improvements or projects that cannot be financed from current revenues.
 The project’s useful life, or the estimated service life of the equipment (leasepurchase), will be equal to or exceed the term of the financing.  Debt financing is not considered appropriate for any recurring purpose such as current operating and normal maintenance expenditures.
 The City will comply with a policy of full disclosure on every financial report and bond prospectus. The City will maintain good communications with bond rating agencies regarding the City’s financial condition and other relevant data related to the debt.

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 The City’s complete Debt Policy and Disclosure Policy is included in the Budget Book under tab Resolutions & Policies.
(C) ANNUAL DEBT SERVICES BY PROJECT
Fiscal Year Fiscal Year
Fund Type of Debt Description 2024-2025 2025-2026
621 Bonds Sales Tax Revenue Bonds Series 2021 1,050,200 1,048,450 (Final date: 06/2051)
101 Lease
Purchase SIEMENS Energy Efficiency Project 150,167 156,766 401 (Final date: 06/2030) 850,950 888,341
Sub-Total 1,001,117 1,045,107
308
Lease
Purchase Police Mobile Radios & System 307,745 307,745
(Final date: 09/2032)
202 Bonds Pension Obligation Bonds 2004 1,433,588 1,435,283 Pension Obligation Bonds 2021 Series A 5,906,132 5,904,422 Merge with 2004 POBs (Final date: 06/2043)
Sub-Total 7,339,720 7,339,705
401 Bonds Water Revenue Bonds 1,211,803 1,212,575
(Final date: 02/2054)
401 Loan SGVMWD 0 400,000
(Final date: 12/2036)
501 Lease
Purchase Fire Engine Truck 0 190,620
506 Lease
Purchase Dump Truck; Citywide HVACS 0 190,620
(Final date: 05/2034)
Total $10,910,585 $11,734,821

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13. GRANT ADMINISTRATION POLICY
To aggressively seek and apply for federal, state and other agencies grant funding to support a variety of social, recreation, public safety, and public works programs. And, to effectively administer grants to ensure the grants can be best integrated into the City’s service goals and financial planning.

Grant Application:
 Programs and projects proposed for grant funding should be those that are consistent with the City’s service goals, objectives and priorities.  When contemplating a grant application, the applying department shall consider the cost
and benefit of the grant activity including the cost of administering the proposed grant, the matching requirement, and the potential impact on the operating budget.
 Regardless of grant dollar amount or application medium, the department shall, prior to application, submit a report to the City Manager.  Applications for grants that require the City to provide matching funds of $15,000 or more must first be submitted to the City Manager, and then, seek formal Council approval.

Expending the Grant Funds:
• Grant expenditures are appropriated and expended following the City’s budget and accounting procedures. The department shall not expend or commit any grant funds until the grant is incorporated into the accounting system. • If the grant expenditures are funded by multiple sources, the most restricted funding source should be used first. Grant funds should be planned so they will be fully expended at the grant expiration.

Grant Compliance:
• The department in charge is to administer the grant, to ensure compliance with grant requirements, to submit to the grantor any compliance or progress reports of a programmatic nature and to monitor grant expenditures. Finance is responsible for preparing all financial reports to the granting agency as well as coordinating all financial audits relating to grant activities.

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14. COST ACCOUNTING APPLICATION
The City applies cost accounting in the two following areas: cost recovery from Federal, State and other agencies, and internal service operations.

Indirect Cost Allocation Plan
Indirect costs are costs that cannot be practically assigned to any particular department and/or division, but are necessary for the functioning of the City as a whole. Most of the City’s indirect costs are either for general administrative support or facilities maintenance. Each year, the City updates its Indirect Cost Allocation Plan according to OMB Circular A-87 to establish the indirect costs.

Internal Services Charges
Internal Service Funds account for goods and services provided by one department to other departments on a cost reimbursement basis. Currently, the City maintains six Internal Services Funds; they are: Shop Fund, Technology/Data Processing Fund, Building Maintenance Fund, General Liability Fund, Workers’ Compensation Fund, and Separation Benefits Fund. Internal service charges are developed as follows: Shop Fund based on mileage and annual depreciation, Technology/Data Processing Fund based on the number of computer equipment and telephones, Building Maintenance is based on square footage, General Liability Fund and Workers’ Compensation Fund based on claims history, Separation Benefits Fund based on the number of employees, and other Post-Employment Benefits Fund based on Council Budget directions.

The City routinely updates internal service charges to ensure adequate charges for the City’s current costs and future liabilities.

15. ARTICLE XIIIB APPROPRIATIONS LIMIT (GANN APPROPRIATIONS LIMIT) Background and Calculations
Article XIIIB of the California State Constitution, more commonly known as the Gann or "Prop 4" Appropriations Limit, was adopted by the California voters in 1980. The Gann Limit places limits on the amount of tax proceeds that government agencies can receive and appropriate each year.

The appropriations limit is based on actual appropriations during the 1978-79 Fiscal Year, and is adjusted each year using the growth in population and inflation. The City's limit is adopted each year via resolution of the City Council.

In 1990, Proposition 111 made changes to the manner in which the Appropriations

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Limit is calculated by allowing government agencies choice of annual growth factors.

Proposition 111 also provides for the exclusion from the limit capital expenditures for fixed assets of $100,000 or more in value that have an expected life of ten years or more.

Derivation of the 2025-2026 Gann Appropriations Limit follows:

FISCAL YEAR 2025-2026 ARTICLE XIIIB APPROPRIATIONS LIMIT A. Appropriations Limit:
2024-2025 Adopted Limit $113,484,468
Annual Adjustment Factors:

Change in CA Personal Income 1.0644
Change in Population 1.0030 1.067593
2025-2026 Appropriation Limit $121,155,247
B. Appropriations Subject to Limit and Amount Under Legal Limit:
2025-2026 Preliminary Budget Total $140,840,423
Less Exclusions:

Non-Proceeds of Taxes $5,317,025
Budget Appropriations Subject to Limit $60,530,487
Amount Under Legal Limit $80,309,934
Implications and Future Trends of GANN Limit
The margin between the City’s appropriations limit and its appropriations subject to limit remains high. As it has been the case in many years, the City’s budget appropriations subject to limit are on average 40% below the legal limit.

Based on the past trend and projected future growth, the City believes its appropriations will continue remaining within the legal limit.

City of Monterey Park Policy Number: 20-28
Administrative Policy Issue Date: 01/20/2021
Revised Date:

Subject: Approved by:

DEBT ISSUANCE AND MANAGEMENT POLICY
_______________________
Ron Bow, City Manager
Page Number Page 1 of 19

PURPOSE
The purpose of this Debt Issuance and Management Policy (this “Policy”) is to establish guidelines and parameters for the effective governance, management and administration of debt and other financing obligations issued by the City of Monterey Park and its related entities. “City” means the City of Monterey Park and any related entity; “debt” means, without limitation, bonds, notes, certificates of participation, financing leases or other financing obligations. The use of “debt” in this Policy is solely for convenience and may not be interpreted to characterize any such obligation as an indebtedness or debt within the meaning of any statutory or constitutional debt limitation where the substance and terms of the obligation fall within exceptions to such limitation. This Policy applies to all debt issued or sold to third party lenders or investors and does not pertain to City internal interfund borrowings or any employee benefit obligations.

BACKGROUND
The City is committed to fiscal sustainability by employing long-term financial planning efforts, maintaining appropriate reserves levels and employing prudent practices in governance, management, budget administration and financial reporting.

Debt levels and their related annual costs are important long-term obligations that must be managed within available resources. A disciplined thoughtful approach to debt management includes policies that provide guidelines for the City to manage its collective debt program. An objective of this Policy, therefore, is to provide written guidelines and restrictions concerning the amount and type of debt and other financing obligations issued by the City and the ongoing management of its debt portfolio.

This Policy is intended to improve the quality of decisions, assist with the determination of the structure of debt issuance, identify policy goals and demonstrate a commitment to long-term financial planning, including a multi-year capital plan. Adherence to a Debt Issuance and Management Policy signals to rating agencies and the capital markets that a government is well managed and should meet its obligations in a timely manner.

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CONDITIONS AND PURPOSES OF DEBT ISSUANCE

1. Acceptable Conditions for the Use of Debt
The City believes that prudent amounts of debt can be an equitable and cost-effective means of financing infrastructure, and capital asset and project needs of the City. Debt will be considered to finance such projects if:
a) The project is included in the City’s capital improvement plan or has otherwise been coordinated with the City Council’s planning goals and objectives. b) The project can be financed with debt not exceeding the term specified in Section E.1 of this Policy, to assure that long-term debt is not issued to finance projects with a short useful life.
c) It is the most cost-effective funding means available to the City, taking into account cash flow needs and other funding alternatives.
d) It is fiscally prudent and meets the guidelines of this Policy. Any consideration of debt financing must consider financial alternatives, including pay-as-you-go funding; proceeds derived from development or redevelopment of existing land and capital assets owned by the City; and use of existing or future cash reserves, or combinations thereof.

2. Acceptable Uses of Debt and Proceeds of Debt
The primary purpose of debt is to finance one of the following:
a) The City will consider long-term financing for the acquisition, substantial refurbishment, replacement, or expansion of capital assets (including, without limitation, land improvements, infrastructure projects, and equipment) for the following purposes:
i. Acquisition and or improvement of land, right-of-way or long-term easements. ii. Acquisition of a capital asset with a useful life of three or more years. iii. Construction or reconstruction of a facility.
iv. Although not the primary purpose of the financing effort, project reimbursables that include project planning design, engineering and other preconstruction efforts; project-associated furniture fixtures and equipment; capitalized interest (prefunded interest); original issue discount; underwriter’s discount; and other costs of issuance.
b) Refunding, refinancing or restructuring debt (including, without limitation, the refinancing or advance funding of City pension obligations), subject to refunding objectives and parameters discussed in Section G.

3. Short-Term Debt
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a) In the event of temporary shortfalls in cash flow for City operation costs due to timing of receipt of revenues and the lack of cash on hand to cover a temporary deficit, the City may consider interim or cash flow financing, such as anticipation notes. In compliance with California law, any such notes must be payable either: (i) not later than the last day of the fiscal year in which it is issued; or (ii) during the fiscal year succeeding the fiscal year in which issued, but in no event later than 15 months after the date of issue, and only if such note is payable only from revenue received or accrued during the fiscal year in which it was issued.
b) Short-term debt may also be used to finance short-lived capital projects, such as leasepurchase financing or equipment. c) Before the City issues any short-term debt, it must identify a reliable revenue source for repayment of the debt.

4. Internal Control Procedures Concerning Use of Proceeds of Debt One of the City’s priorities in the management of debt is to ensure that the proceeds of the debt will be directed to the intended use for which the debt has been issued. In furtherance of this priority, the following procedures apply:
a) The Management Services Director must retain, for the applicable period specified in Section H.4. of this Policy, a copy of each annual report filed with the California Debt and Investment Advisory Commission (“CDIAC”) pursuant to Government Code § 8855(k) concerning (1) debt authorized during the applicable reporting period (whether issued or not); (2) debt outstanding during the reporting period; and (3) the use during the reporting period of proceeds of issued debt.
b) In connection with the preparation of each annual report to be filed with CDIAC pursuant to Government Code § 8855(k), the Management Services Director must keep a record of the original intended use for which the debt has been issued, and provide a written statement whether the proceeds spent during the applicable one-year reporting period for such annual report comport with the intended use (at the time of original issuance or as modified pursuant to the following sentence). If a change in intended use is authorized after the original issuance of the debt, the Management Services Department must provide a written statement when the change in use was authorized and whether the City Council, City Manager or another City official has authorized the change in intended use. The Management Services Director or designee must report apparent deviations from the intended use in debt proceeds to the City Manager for further discussion. Additionally, the City Attorney and City Council must be informed.
c) If the debt is issued to finance a capital project and the project timeline or scope of project changed in a way that all or a portion of the debt proceeds cannot be expended on the original project, the Management Services Director must consult with the City Manager and City Attorney as to available alternatives for the expenditure of the remaining debt proceeds (including prepayment of the debt).

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TYPES OF FINANCING INSTRUMENTS; AFFORDABILITY AND PLANNING POLICIES The City recognizes that there are numerous types of financing structures and funding sources available, each with specific benefits, risks and costs. All potential funding sources are reviewed by management within the context of this Policy and the overall portfolio to ensure that any financial product or structure is consistent with the City’s objectives. Regardless of what financing structure(s) is utilized, due diligence review must be performed for each transaction, including the quantification of potential risks and benefits and analysis of the impact on City creditworthiness and debt affordability and capacity.

Before the City issues debt or assumes other financing obligations to finance a project, the City will carefully consider the overall long-term affordability of the proposed debt issuance. The City may not assume more debt or other financing obligations without conducting an objective analysis of the City’s ability to assume and support additional debt service payments. The City will consider its long-term revenue and expenditure trends, the impact on operational flexibility and the overall debt burden on the taxpayers.

The evaluation process must include a review of generally accepted measures of affordability and will strive to achieve and or maintain debt levels consistent with its current operating and capital needs.

1. General Fund-Supported Debt – General Fund Supported Debt generally include Certificates of Participation (“COPs”) and Lease Revenue Bonds (“LRBs”) which are lease obligations that are secured by a lease-back arrangement between the City and another public entity. Typically, the City appropriates available General Fund moneys to pay the lease payments to the other public entity and, in turn, the public entity uses such lease payments received to pay debt service on the bonds or Certificates of Participation.

General Fund Supported Debt may also include bonds issued to refund obligations imposed by law, such as judgments (judgment obligation bonds (“JOBs”)) or unfunded accrued actuarial liabilities for pension plans (pension obligation bonds (“POBs”)).

These obligations do not constitute indebtedness under the state constitutional debt limitation and, therefore, are not subject to voter approval.

Without limiting the foregoing, the City may also enter into operating leases and lease purchase agreements on an as-needed basis without voter approval.

Payments to be made under valid leases are payable only in the year in which use and occupancy of the leased property is available, and lease payments may not be accelerated as a default remedy.

Lease financing requires the fair market rental value of the leased property to be equal to or greater than the required debt service or lease payments. The lessee (the City) is obligated to include in its Annual Budget and appropriate the rental payments that are due and payable during each fiscal year the lessee has use of the leased property.

The City should strive to maintain its net General Fund-backed annual debt service at or less than 8% of available annually budgeted revenue. This ratio is defined as the City’s annual debt service requirements on General Fund Supported Debt (including, but not limited to, COPs, LRBs, JOBs, and POBs) compared to total annual General Fund Revenues net of interfund transfers out.

2. Revenue Bonds – Long-term obligations payable solely from specific special fund sources, in general, are not subject to a debt limitation. Examples of such long-term obligations include those T22

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which are payable from a special fund consisting of restricted revenues or user fees (e.g., enterprise revenues) and revenues derived from the system of which the project being funded is a part.

In determining the affordability of proposed revenue bonds, the City will perform an analysis comparing projected annual net revenues (exclusive of depreciation which is a non-cash related expense) to estimated annual debt service. The City should strive to maintain an annual coverage ratio of 110% (or such higher coverage ratio included in the City’s existing financing documents), using historical and/or projected net revenues to cover annual debt service for bonds. To the extent necessary, the City must undertake proceedings for a rate increase to cover both operations and debt service costs, and create debt service reserve funds to maintain the required coverage ratio.

3. Special Districts Financing – The City may undertake proceedings to form Community Facilities Districts pursuant to the Mello-Roos Community Facilities District Act of 1982 or assessment districts pursuant to the Improvement Act of 1911, the Municipal Improvement Act of 1913, or other applicable law. The City will consider requests for special district formation and debt issuance when such requests address a public need or provide a public benefit. Each application will be considered on a case by case basis, and the Management Services Director may not recommend a financing if it is determined that the financing could be detrimental to the debt position or the best interests of the City.

4. General Obligation Bonds – Notwithstanding their name, General Obligation Bonds are not general obligations of the City, but instead they are payable from and secured by a dedicated, voterapproved property tax override rate (i.e., a property tax in excess of the 1% basic ad valorem property tax rate which has received the approving two-thirds vote of the City’s electorate). While the dedicated revenue stream to repay the debt makes General Obligation Bonds an attractive option, additional considerations for this financing mechanism include the time and expense of an election, the possibility that the electorate will not approve the ballot measure, and the legal bonding capacity limit of the assessed value of all taxable property within the City.

5. Tax Increment Financing – Tax increment financing is a financing method whereby a portion of ad valorem property taxes (commonly called the “tax increment”) that are allocated to an entity, such as an enhanced infrastructure financing district (“EIFD”), a community revitalization and investment authority (“CRIA”) or an infrastructure and revitalization financing district (“IRFD”), and the entity is permitted to incur debt payable from and secured by the tax increment revenues.

While tax increment debt for redevelopment agencies and Successor Agencies is entitled to the benefits of Article XVI, Section 16, of the California Constitution, no similar provision exists for EIFDs, CRIAs and IRFDs at the time of adoption of this Policy. Therefore, when considering EIFD, CRIA or IRFD financing or other types of tax increment financing which may be permitted by law in the future, debt limit concerns should be analyzed with respect to the proposed structure and taken into account in determining the practical viability of the proposed financing.

6. Conduit Debt – Conduit financing provides for the issuance of securities by a government agency to finance a project of a third party, such as a non-profit organization or other private entity. The City may sponsor conduit financings for those activities that have a general public purpose and are consistent with the City’s overall service and policy objectives. Unless a compelling public policy rationale exists, such conduit financings will not in any way pledge the City’s faith and credit.

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STRUCTURE OF DEBT

1. Term of Debt – To comply with Internal Revenue Service regulations for tax-exempt financing obligations, the weighted average maturity of the debt should not exceed 120% of the weighted average useful life of the facilities or projects to be financed, unless specific circumstances exist that would mitigate the extension of time to repay the debt and it would not cause the City to breach any covenants to maintain the tax-exempt status of such debt, if applicable.

2. Rapidity of Debt Payment; Level Payment – To the extent practical, bonds will be amortized on a level repayment basis, and revenue bonds will be amortized on a level repayment basis considering the forecasted available pledged revenues to achieve the lowest rates possible. Bond repayments should not increase on an annual basis in excess of 2% without a dedicated and supporting revenue funding stream.

Accelerated repayment schedules reduce debt burden faster and reduce total borrowing costs. The Management Services Director will amortize debt through the most financially advantageous debt structure and to the extent possible, match the City’s projected cash flow to the anticipated debt service payments. “Backloading” of debt service will be considered only when one or more of the following occur:
a) Natural disasters or extraordinary or unanticipated external factors make payments on the debt in early years prohibitive.
b) The benefits derived from the debt issuance can clearly be demonstrated to be greater in the future than in the present.
c) Such structuring is beneficial to the City’s aggregate overall debt payment schedule or achieves measurable interest savings.
d) Such structuring will allow debt service to more closely match projected revenues, whether due to lower project revenues during the early years of the project’s operation, inflation escalators in the enterprise user rates, or other quantifiable reasons.

3. Serial Bonds, Term Bonds, and Capital Appreciation Bonds – For each issuance, the City will select serial bonds or term bonds, or both. On the occasions where circumstances warrant, Capital Appreciation Bonds (“CABs”) may be used. The decision to use term bonds, serial bonds, or CABs is driven based on market conditions. However, the use of CABs should be used as a last resort unless a compelling financing need is presented and acceptable rates and terms can be secured.

4. Reserve Funds – To the extent that the use of available City moneys to fund a reserve fund provides an economic benefit that offsets the cost of financing the reserve fund from bond proceeds (as determined by the Management Services Director in consultation with the City’s municipal advisor and, if applicable, the underwriter for the bonds), the City may use legally permitted moneys to fund a reserve fund (in cash or through the purchase of a debt service reserve surety bond or insurance policy) for the proposed bonds, up to the maximum amount permitted by applicable law or regulation. Typically, this amount is equal to the least of: (i) maximum annual debt service on the bonds, (ii) 10% of the principal amount of the bonds (or 10% of the sale proceeds of the bonds, within the meaning of Section 148 of the federal Internal Revenue Code), or (iii) 125% of average annual debt service on the bonds.

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USE OF ALTERNATIVE DEBT INSTRUMENTS
Alternative debt instruments and financing structures sometimes can provide a lower cost of borrowing in the short run, but may involve greater medium-term or long-term risk. Due diligence review must be performed for each transaction, including the quantification of potential risks and benefits, analysis of the impact on City creditworthiness and debt affordability and capacity, and an evaluation of the ability of the City to withstand the medium-term or long-term risk attendant to alternative debt instruments, including the feasibility of exit strategies.

1. Variable Rate Debt
Variable rate debt affords the City the potential to achieve a lower cost debt depending on market conditions. However, the City will seek to limit the use of variable-rate debt due to the potential risks of such instruments.
a) Purpose
The City may consider the use of variable rate debt for the purposes of:
i. Reducing the costs of debt issues.
ii. Increasing flexibility for accelerating principal repayment and amortization. iii. Enhancing the management of assets and liabilities (matching short-term “priced debt” with the City’s short-term investments).
b) Considerations and Limitations on Variable-Rate Debt The City may consider the use of all alternative structures and modes of variable rate debt to the extent permissible under California law and will make determinations among different types of modes of variable rate debt based on cost, benefit, and risk factors.

The Management Services Director must consider the following factors in considering whether to utilize variable rate debt:
i. With respect to General Fund supported debt, one of the following two criteria should be met as determined by the Management Services Director in his or her discretion: 1) any variable rate debt should not exceed 20% of total City General Fund supported debt; or 2) annual debt service on any variable rate debt should not exceed 5% of the annual General Fund Revenue.
ii. Any variable rate debt should be fully hedged by expected future capital fund reserves or unrestricted General Fund reserve levels, as applicable. iii. Whether interest cost and market conditions (including the shape of the yield curves and relative value considerations) are unfavorable for issuing fixed rate debt.
iv. The likelihood of projected debt service savings when comparing the cost of fixed rate bonds.

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v. Costs, implementation and administration are quantified and considered. vi. Cost and availability of liquidity facilities (lines of credit necessary for variable rate debt obligations and commercial paper in the event that the bonds are not successfully remarketed) are quantified and considered. vii. Whether the ability to convert debt to another mode (daily, monthly, fixed) or redeem at par at any time is permitted.
viii. Cost and availability of derivative products to hedge interest rate risk. ix. The findings of a thorough risk management assessment. c) Risk Management
A decision to issue variable rate debt first requires a rigorous risk assessment including, without limitation, factors discussed in this section. Variable rate debt subjects the City to additional financial risks (compared to fixed rate bonds) including interest rate risk, tax risk, and certain risks related to providing liquidity for certain types of variable rate debt.

The City will properly manage the risks as follows:
i. Interest Rate Risk and Tax Risk – The risk that market interest rates increase on variable-rate debt because of market conditions, changes in taxation of municipal bond interest or reductions in tax rates. Mitigation – Limit total variable rate exposure per the defined limits, match the variable rate liabilities with short term assets, and/or purchase appropriate derivative products to hedge against the risk (see also Section F.2 below).
ii. Liquidity/Remarketing Risk – The risk that holders of variable rate bonds exercise their “put” option, tender their bonds, and the bonds cannot be remarketed requiring the bond liquidity facility provider to repurchase the bonds. This will result in the City paying a higher rate of interest to the facility provider and the potential rapid amortization of the repurchased bonds. Mitigation - Limit total direct variable-rate exposure. Seek liquidity facilities which allow for longer (5-10 years) amortization of any draws on the facility. Endeavor to secure credit support facilities that result in bond ratings of the highest short-term ratings and long-term ratings not lower than the second highest rating category (without taking into account numerical or plus/minus sign modifiers). If the City’s bonds are downgraded below these levels (or such other rating levels as provided in the applicable financing documents) as a result of the facility provider’s ratings, a replacement provider shall be sought.
iii. Liquidity/Rollover Risk – The risk that arises due to the shorter term of most liquidity provider agreements (1-5 years) compared to the longer-term amortization schedule of the City’s variable-rate bonds. Liquidity and rollover risk includes the following risks: (1) the City may incur higher renewal fees when renewal agreements are negotiated; and (2) the liquidity bank market may constrict T26

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such that it is difficult to secure third party liquidity at any interest rate. Mitigation – Negotiate longer terms on provider contracts to minimize the number of rollovers.

2. Derivatives
Using certain derivative products to hedge variable rate debt, such as interest rate swaps, may be considered by the City to the extent it has such outstanding debt. The City must exercise extreme caution in the use of derivative instruments for hedging purposes and will consider their utilization only when sufficient understanding of the products and sufficient expertise for their appropriate use is developed by the Management Services Director. A comprehensive derivative policy must be adopted by the City Council before any utilization of such instruments.

REFUNDING GUIDELINES
The Management Services Director must monitor all outstanding City debt obligations for potential refinancing opportunities. The City will consider refinancing of outstanding debt to achieve annual savings or to refinance a bullet payment or spike in debt service. Except for instances in which a bullet payment or spike in debt service is being refinanced, absent a compelling reason or financial benefit to the City, any refinancing should not result in an increase to the weighted average life of the refinanced debt.

Except for instances in which a bullet payment or spike in debt service is being refinanced or another City policy objective is being accomplished, the City will generally seek to achieve debt service savings which, on a net present value basis, are at least 3% of the debt being refinanced. The net present value assessment shall factor in all costs, including issuance, escrow, and foregone interest earnings of any contributed funds on hand. Any potential refinancing must additionally consider whether an alternative refinancing opportunity with higher savings is reasonably expected in the future. Refunding which produce a net present value savings of less than 3% will be considered on a case-by-case basis.

MARKET COMMUNICATION, ADMINISTRATION, AND REPORTING

1. Rating Agency Relations and Annual or Ongoing Surveillance – The Management Services Director is responsible for maintaining the City’s relationships with the major rating agencies that rate municipal bond issues (such as S&P Global Ratings, Fitch Ratings and Moody’s Investors Service). These agencies’ rating criteria often change and the City cannot control the decisions made by any rating agency. However, for each debt issue that the City will seek a rating assignment, the City will strive to obtain and maintain the highest possible underlying, uninsured rating. In addition to general communication, the Management Services Director must:
a) Ensure the rating agencies are provided updated financial statements of the City as they become publicly available.
b) Communicate with credit analysts at each agency as may be requested by the agencies. c) Before each proposed new debt issuance, schedule meetings or conference calls with agency analysts and provide a thorough update on the City’s financial position, including the impacts of the proposed debt issuance.

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2. Council Communication – The Management Services Director should report to the City Council regarding feedback from rating agencies, when and if available, on the City’s financial strengths and weaknesses and areas of concern relating to weaknesses as they pertain to maintaining the City’s existing credit ratings.

3. Continuing Disclosure Compliance – The City will remain in compliance with Securities and Exchange Commission Rule 15c2-12 (17 CFR § 240.15c2-12) by filing (to the extent required by the applicable continuing disclosure undertaking). To that end, the “Continuing Disclosure Compliance Procedures,” attached as Appendix I, is incorporated as part of this Policy as if fully set forth.

4. Debt Issue Record-Keeping – A copy of all debt-related records must be retained in the City Clerk’s office. At minimum, these records must include all official statements, bond legal documents/transcripts, resolutions, trustee statements, leases, and title reports for each City financing (to the extent available). .

Such records must be retained while any bonds of an issue are outstanding and during the six-year period following the final maturity or redemption of the bond issue or, if later, while any bonds that refund bonds of that original issue are outstanding and for the six year period following the final maturity or redemption date of the latest refunding bond issue.

5. Arbitrage Rebate – The use of bond proceeds and their investments must be monitored to ensure compliance with all arbitrage rebate requirements of the Internal Revenue Code and related Internal Revenue Service regulations, in keeping with the covenants of the City and/or related entity in the tax certificate for any federally tax-exempt financing. The Management Services Director must ensure that all bond proceeds and investments are tracked in a manner which facilitates accurate calculation; and, if a rebate payment is due, such payment is made in a timely manner.

CREDIT RATINGS
The City will consider published ratings agency guidelines regarding best financial practices and guidelines for structuring its capital funding and debt strategies to maintain the highest possible credit ratings consistent with its current operating and capital needs.

CREDIT ENHANCEMENT
Credit enhancement may be used to improve or establish a credit rating on a City debt obligation.

Types of credit enhancement include letters of credit, bond insurance and surety policies. The City, in consultation with the City municipal advisor, may determine the use of a credit enhancement, for any debt issue, if it reduces the overall cost of the proposed financing or if the use of such credit enhancement furthers the City’s overall financing objectives.

SB 1029 COMPLIANCE
Government Code § 8855 requires issuers to adopt debt policies addressing each of the five items below:
i. The purposes for which the debt proceeds may be used.

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Section C.2 (Acceptable Uses of Debt and Proceeds of Debt) and Section C.3 (Short-Term Debt) address the purposes for which debt proceeds may be used. ii. The types of debt that may be issued.

Section C.3 (Short-Term Debt), Section D (Types of Financing Instruments; Affordable and Planning Policies), Section E (Structure of Debt) and Section F (Use of Alternative Debt Instruments) are among the provisions that provide information regarding the types of debt that may be issued.
iii. The relationship of the debt to, and integration with, the issuer's capital improvement program or budget, if applicable.

Section C.1 (Acceptable Conditions for the Use of Debt) provides information regarding the relationship between the City's debt and Capital Improvement Program. iv. Policy goals related to the issuer's planning goals and objectives.

As described in Section B (Background), Section D (Types Of Financing; Affordability and Planning Policies) and other sections, this Policy has been adopted to assist with the City’s goal of maintaining fiscal sustainability and financial prudence. v. The internal control procedures that the issuer has implemented, or will implement, to ensure that the proceeds of the proposed debt issuance will be directed to the intended use.

Section C.4 (Internal Control Procedures Concerning Use of Proceeds of Debt) provides information regarding the City's internal control procedures designed to ensure that the proceeds of its debt issues are spent as intended.

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GLOSSARY
Ad Valorem Tax: A tax calculated “according to the value” of property. In California, property which is subject to ad valorem taxes is classified as “secured” or “unsecured.” The secured classification includes property on which any property tax levied by a county becomes a lien on that property. A tax levied on unsecured property does not become a lien against the unsecured property, but may become a lien on certain other property owned by the taxpayer.

Annual Coverage Ratio: With respect to any bonds that are secured by a particular source of revenue for a particular 12 month period, the ratio obtained from dividing the estimated dollar amount of the revenue during such period by the scheduled principal and interest payment for the bonds during such period.

Anticipation Notes: Short term notes (such as Tax and Revenue Anticipation Notes, Grant Anticipation Notes and Bond Anticipation Notes) issued to provide interim financing anticipated to be paid off from sources to be received at or before the maturity date of the anticipation notes (such as tax revenues, grant funds, proceeds of long-term bonds).

Arbitrage: The gain that may be obtained by borrowing funds at a lower (often tax-exempt) rate and investing the proceeds at higher (often taxable) rates. The ability to earn arbitrage by issuing tax-exempt securities has been severely curtailed by the Internal Revenue Code of 1986, as amended.

Assessed Valuation: The “value” of property as set by a taxing authority (such as the county assessor) on the tax roll for purposes of ad valorem taxation.

Bond: A security that represents an obligation to pay a specified amount of money on a specific date in the future, typically with periodic interest payments.

Bond Anticipation Notes: Short-term notes issued usually for capital projects and paid from the proceeds of the issuance of long-term bonds. Provide interim financing in anticipation of bond issuance.

Bond Counsel: A specialized, qualified attorney retained by the issuer to give a legal opinion concerning the validity of securities. The bond counsel’s opinion usually addresses the subject of tax exemption. Bond counsel typically prepares and/or advises the issuer regarding legal structure, authorizing resolutions, trust indentures and the like.

Bond Insurance: A type of credit enhancement whereby an insurance company indemnifies an investor against default by the issuer. In the event of failure by the issuer to pay principal and interest in full and on time, investors may call upon the insurance company to do so. Once issued, the municipal bond insurance policy is generally irrevocable. The insurance company receives its premium when the policy is issued and this premium is typically paid out of the bond issue.

Capital Appreciation Bond: A municipal security on which the investment return on an initial principal amount is reinvested at a stated compounded rate until maturity, at which time the investor receives a single payment representing both the initial principal amount and the total investment return.

CDIAC: California Debt and Investment Advisory Commission.

Certificates of Participation: A financial instrument representing a proportionate interest in payments (such as lease payments) by one party (such as a city acting as a lessee) to another party (often a JPA or nonprofit).

Competitive Sale: A sale of bonds in which an underwriter or syndicate of underwriters submit sealed bids to purchase the bonds. Bids are awarded on a true interest cost basis (TIC), providing that other bidding requirements are satisfied. Competitive sales are recommended for simple financings with a strong underlying credit rating. This type of sale is in contrast to a Negotiated Sale Continuing Disclosure: An issuer’s obligations under its continuing disclosure agreements executed in connection with its bond issues. See “Rule 15c2-12” below. Under each continuing disclosure agreement, the issuer agrees to periodically provide certain relevant information and make such information available to the investing market. The information is generally required to be posted on MSRB’s Electronic T30

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Municipal Market Access (EMMA) website.

Credit Enhancement: An instrument (such as a bond insurance policy, a debt service reserve insurance policy or surety bond, a letter of credit) which may be purchased to provide additional assurance that the repayment of the debt will be honored, and hence may enhance the credit rating for the debt issue.

Credit Rating Agency: A company that rates the relative credit quality of a bond issue and assigns a letter rating. These rating agencies include Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings.

Debt Limit: The maximum amount of debt that is legally permitted by applicable charter, constitution, or statutes.

Debt Service: The amount necessary to pay principal and interest requirements on outstanding bonds for a given year or series of years.

Default: The failure to pay principal or interest in full or on time and, in some cases, the failure to comply with non-payment obligations after notice and the opportunity to cure.

Derivative: A financial instrument which derives its own value from the value of another instrument, usually an underlying asset such as a stock, bond, or an underlying reference such as an interest rate index.

Disclosure Counsel: A specialized, qualified attorney retained to provide advice on issuer disclosure obligations, to prepare the official statement and to prepare the continuing disclosure undertaking.

Discount: The difference between a bond’s par value and the price for which it is sold when the latter is less than par. Also known as “underwriter discount,” this is the fee paid to the underwriter its banking and bond marketing services.

Enterprise Activity: Specific activity that generates revenues. Common examples include water, wastewater and solid waste enterprises. A use of revenues generated by an enterprise activity for purposes unrelated to that enterprise is often subject to restrictions imposed by law. Debt service on bonds issued to finance facilities or projects for an enterprise is usually paid with the revenues of such enterprise.

Financing Team: The working group of City staff and outside consultants necessary to complete a debt issuance.

Indenture: A contract between the issuer and the trustee stipulating the characteristics of the financial instrument, the issuer’s obligation to pay debt service, and the remedies available to the trustee in the event of default.

Issuance Costs: The costs incurred by the bond issuer during the planning and sale of securities. These costs include by are not limited to municipal advisory, bond counsel, disclosure counsel, printing, advertising costs, credit enhancement, rating agencies fees, and other expenses incurred in the marketing of an issue.

Lease: An obligation wherein a lessee agrees to make payments to a lessor in exchange for the use of certain property. The term may refer to a capital lease or to an operating lease.

Lease Revenue Bonds: Bonds that are secured by the revenue from lease payments made by one party to another.

Maturity Date: The date upon which a specified amount of debt principal or bonds matures, or becomes due and payable by the issuer of the debt.

Municipal Advisor: A consultant who provides the municipal issuer with advice on the structure of the bond issue, timing, terms and related matters for a new bond issue.

Municipal Securities Rulemaking Board (MSRB): A self-regulating organization established on September 5, 1975 upon the appointment of a 15-member board by the Securities and Exchange Agreement. The MSRB, comprised of representatives from investment banking firms, dealer bank representatives, and public representatives, is entrusted with the responsibility of writing rules of conduct for the municipal securities market. The MSRB hosts the EMMA website, which hosts information posted by issuers under their continuing disclosure undertakings.

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between the issuer and the purchaser, typically an underwriter, without competitive bidding. The negotiated sales process provides control over the financing structure and issuance timing. Negotiated sales are recommended for unusual financing terms, period of market volatility and weaker credit quality.

A thorough evaluation, usually with the assistance of the City’s Municipal Advisor, of the proposed bond’s credit characteristics in conjunction with market conditions will be performed to ensure reasonable final pricing and underwriting spread.

Net Present Value (NPV) – A financial measurement whereby savings of a transaction are discounted back to money into a “today’s” dollars equivalent. Often the discount rate used is the true interest cost (TIC—see definition below) rate on the proposed new bond issuance. Typically, in the municipal market place it is common to then divide the NPV value by the outstanding par amount of the bonds that are to be refunded to develop a percentage value.

Official Statement (Prospectus): A document published by the issuer in connection with a primary offering of securities that discloses material information on a new security issue including the purposes of the issue, how the securities will be repaid, and the financial, economic and social characteristics of the security for the bonds. Investors may use this information to evaluate the credit quality of the securities.

Par Value: The face value or principal amount of a security.

Pension Obligation Bonds: Financing instruments used to pay some or all of the unfunded pension liability of a pension plan. POBs are issued as taxable instruments over a 10-40 year term or by matching the term with the amortization period of the outstanding unfunded actuarial accrued liability.

Premium: The excess of the price at which a bond is sold over its face value.

Present Value: The value of a future amount or stream of revenues or expenditures.

Private Placement: A bond issue that is structured specifically for a small number of purchasers or a single purchaser. Private placements are typically carried out when extraneous circumstances preclude public offerings. A private placement is considered to be a negotiated sale.

Redemption: Depending on an issue’s call provisions, an issuer may on certain dates and at certain premiums, redeem or call specific outstanding maturities. When a bond or certificate is redeemed, the issuer is required to pay the maturities’ par value, the accrued interest to the call date, plus any premium required by the issue’s call provisions.

Refunding: A procedure whereby an issuer refinances an outstanding debt issue by issuing a new debt issue.

Rule 15c2-12: Rule adopted by the Securities and Exchange Commission setting forth certain obligations of (i) underwriters to receive, review and disseminate official statements prepared by issuers of most primary offering of municipal securities, (ii) underwriters to obtain continuing disclosure agreements from issuers and other obligated persons to provide ongoing annual financial information on a continuing basis, and (iii) broker-dealers to have access to such continuing disclosure in order to make recommendations of municipal securities in the secondary market.

Reserve Fund: A fund established by the indenture of a bond issue into which money is deposited for payment of debt service in case of a shortfall in current revenues.

Revenue Bond: A bond which is payable from a specific source of revenue and to which the full faith and credit of an issuer is not pledged. Revenue bonds are payable from identified sources of revenue, and do not permit the bondholders to compel a jurisdiction to pay debt service from any other source. Pledged revenues often are derived from the operation of an enterprise.

Secondary Market: The market in which bonds are sold after their initial sale in the new issue market.

Serial Bonds: Bonds of an issue that mature in consecutive years or other intervals and are not subject to mandatory sinking fund provisions.

Tax and Revenue Anticipation Notes (TRANS): Short term notes issued in anticipation of receiving tax receipts and revenues within a fiscal year. TRANs allow the municipality to manage the period of cash shortfalls resulting from a mismatch between timing of revenues and timing of expenditures.

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Term Bonds: Bonds that come due in a single maturity but where the issuer may agree to make periodic payments into a sinking fund for mandatory redemption of term bonds before maturity and for payment at maturity.

True Interest Cost (TIC): Under this method of computing the interest expense to the issuer of bonds, true interest cost is defined as the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the new issue of bonds. Interest is assumed to be compounded semi-annually. TIC computations produce a figure slightly different from the net interest cost (NIC) method because TIC considers the time value of money while NIC does not.

Trustee: A bank retained by the issuer as custodian of bond proceeds and official representative of bondholders. The trustee ensures compliance with the indenture. In many cases, the trustee also acts as paying agent and is responsible for transmitting payments of interest and principal to the bondholders.

Underwriter: A broker-dealer that purchases a new issue of municipal securities from the issuer for resale in a primary offering. The bonds may be purchased either through a negotiated sale with the issuer or through a competitive sale.

Weighted Average Useful Life: In reference to a particular bond issue, the weighted average useful life of the assets financed with the proceeds of the bonds is calculated by giving weight to both the relative dollar amount spent on each asset and the useful life of that asset.

Yield: The net rate of return, as a percentage, received by an investor on an investment. Yield calculations on a fixed income investment, such as a bond issue, take purchase price and coupon into account when calculating yield to maturity.

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APPENDIX I

CONTINUING DISCLOSURE COMPLIANCE PROCEDURES

BACKGROUND AND TRAINING
SEC Rule 15c2-12 requires certain information be disclosed to the municipal bond marketplace. The SEC stated that it has a mandate “to adopt rules reasonably designed to prevent fraudulent, deceptive or manipulative acts or practices in the market for municipal securities.” The SEC takes the position that material non-compliance by an issuer with past continuing disclosure obligations may warrant, without corrective actions, an underwriter being prohibited from underwriting the issuer’s bonds, and thus prevent the issuer from accessing the municipal bond marketplace.

The following procedures will help ensure compliance by the City of Monterey Park (“City”) with SEC Rule 15c2-12 and its continuing disclosure obligations under continuing disclosure agreements or similar instruments executed in connection with its municipal bond offerings. Certain capitalized terms herein will have the meanings ascribed to them in the respective continuing disclosure agreements or similar instruments.

DESIGNATION OF RESPONSIBLE OFFICER
The Responsible Officer will be the officer or other employee responsible for compiling and filing Annual Reports (as defined in the continuing disclosure agreements) and notices regarding enumerated events (“Event Notices”), if required to be filed pursuant to the continuing disclosure agreements or similar instruments. The initial Responsible Officer is the City’s Management Services Director. From time to time, the City Manager may designate a different person to serve as the Responsible Officer.

1. RESPONSIBLE OFFICER TO BECOME FAMILIAR WITH “EMMA” AND FILING

REQUIREMENTS UNDER CONTINUING DISCLOSURE AGREEMENTS
A. The Responsible Officer will take such action as may be necessary or appropriate to become familiar with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website. The Responsible Officer should understand how to locate on EMMA the filings made by the City in connection with bonds issued by the City. If the City is serving as its own Dissemination Agent, the Responsible Officer will establish a user identification and password for EMMA and become familiar with uploading documents onto EMMA.

B. For each separate issue of the City’s outstanding bonds, the Responsible Officer will read the related continuing disclosure agreement or similar instrument and identify the following:
(i) The date by which the Annual Report must be filed;
(ii) The contents needed to be included in the Annual Report; (iii) The Event Notices that must be filed; and
(iv) When Event Notices are required to be filed.

C. The Responsible Officer should be aware of the types of events (the “Listed Events”) that would require the filing of an Event Notice. If clarification is required regarding what is meant by a Listed Event, the City’s bond counsel or disclosure counsel should be contacted to seek such clarification.

2. PREPARATION AND FILING OF ANNUAL REPORTS AND EVENT NOTICES City of Monterey Park
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A. The City will strive to begin the process of completing its audited financial statements as soon as practicable after the close of each Fiscal Year. Such audited financial statements should be completed in time to be submitted to the City Council (or other governing board) before the date that the Annual Report must be filed.

B. The Responsible Officer will identify any information that is required to be included in the Annual Report but is not part of the City’s audited financial statements, and contact the sources necessary to compile such information as soon as possible after the close of each Fiscal Year. The Responsible Officer will consider adding any information required by its continuing disclosure agreements or similar instrument not already included in its audited financial statements into a supplementary information section of audited financial statements.

C. Following the compilation of the information that is to be included in the Annual Report, the Responsible Officer will (or will cause the Dissemination Agent to) submit the Annual Report to EMMA on or before the date on which the Annual Report must be filed.

D. Each year, by not later than the date that the Annual Report is required to be filed on EMMA, the Responsible Officer will review the EMMA website to confirm that the Annual Report was posted with respect to all applicable securities. If the Annual Report was not posted, the dissemination agent will be notified, or the Responsible Officer will file the Annual Report, as applicable.

E. The Responsible Officer will identity, or with the assistance of consultants engaged to monitor compliance will identify, the occurrence of a Listed Event and prepare, or have prepared, the appropriate Event Disclosure. The Responsible Officer will file (or will cause the dissemination agent to file) Event Notices on EMMA in a timely manner, when so required by the continuing disclosure agreements or similar instrument. The Responsible Officer will contact the City’s bond counsel or disclosure counsel if there are any questions regarding whether an event constitutes a Listed Event, and whether such occurrence will require the filing of an Event Notice.

F. In connection with amendments to SEC Rule 15c2-12 adopted in 2018, for any new continuing disclosure agreement executed on or after February 27, 2019 with respect to a debt issue (the “Debt”), the Responsible Officer must, before the Debt issuance date, review the City’s financial records and create a list of the City’s existing financial obligations (as such term is defined by SEC Rule 15c2-12) (the “Financial Obligations List”). The Financial Obligations List must be continuously updated by the Responsible Officer. Whenever the City prepares to enter into a new financial obligation or modify the terms of an existing financial obligation, the Responsible Officer must determine whether the incurrence of such financial obligation or modification of terms would require an Event Notice under the continuing disclosure agreement. If a determination is made that an Event Notice would be required, the Responsible Officer, in consultation with legal counsel, must cause the Event Notice to be filed on a timely basis, when so required by the continuing disclosure agreements or similar instrument.

G. Certain Listed Events are qualified by a materiality standard. Materiality is determined according to SEC guidance available at the time. If clarification is required regarding materiality on any potential Listed Event, the Responsible Officer must contact the City’s bond counsel or disclosure counsel to seek clarification. The Responsible Officer’s determination of materiality will depend on the facts and circumstances surrounding the event and will take into consideration many factors including, without limitation, the following:

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• Source of security pledged for repayment of the financial obligation, • Rights associated with such a pledge (e.g., senior versus subordinate), • Principal amount or notional amount (in the case of a derivative instrument or guarantee of a derivative instrument),
• Covenants,
• Events of default,
• Remedies,
• Other similar terms that affect security holders to which the issuer agreed at the time of incurrence,
• Size of the overall balance sheet,
• Size of existing obligations, and
• Size of the overall bond portfolio.

RETENTION OF RECORDS
A. The documents identified below should be retained for a period of at least six years following the termination of the City’s obligations (i.e., the legal defeasance, prior redemption or payment in full of the related issue of municipal securities) under a continuing disclosure agreement or similar instrument.

B. The City will retain, in its records, the transcripts containing the documents related to each issue of bonds or other obligations of the City.

C. The City will retain copies, in paper or electronic form, of each Listed Event Notice submitted to EMMA.

D. The City will retain copies, in paper or electronic form, of each Annual Report submitted to EMMA.

E. To the extent that the content of an Annual Report is based on source materials created or obtained by the City, the City will retain in its records, such source materials created or obtained by the City.

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CERTIFICATION AND RECEIPT OF UNDERSTANDING
I certify that I have received a copy of the City of Monterey Park Policy for Disclosure Procedures. I have reviewed and understand its contents and agree to abide by the principles and requirements in the Disclosure Procedures.

Name:

Date:

APPROVED AS TO FORM:
___________________
Karl H. Berger, City Attorney
01/20/2021
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City of Monterey Park Policy Number: 20-29
Administrative Policy Issue Date: 01/20/2021
Revised Date:

Subject: Approved by:

POLICY FOR DISCLOSURE PROCEDURES
_______________________
Ron Bow, City Manager
Page Number Page 1 of 6

PURPOSE
The purpose of this Policy for Disclosure Procedures (the “Policy”) is to memorialize and communicate the policies and procedures in connection with obligations, including notes, bonds and certificates of participation, issued by the City of Monterey Park (the “City”) to ensure that the City continues to comply with all applicable disclosure obligations and requirements under the federal securities laws.

BACKGROUND
The City occasionally issues certificates of participation, assessment bonds, notes or other obligations (collectively, “Obligations”) in order to fund or refund capital investments, or other long-term programs. In offering Obligations to the public, and at other times when the City makes certain reports, the City must comply with the “anti-fraud rules” of federal securities laws (the “anti-fraud rules” includes Section 17 of the Securities Act of 1933 [15 U.S.C. § 77a, et seq.] and Section 10(b) of the Securities and Exchange Act of 1934 [15 U.S.C.A. § 78j], and regulations promulgated by the Securities and Exchange Commission under those Acts (particularly “Rule 10b-5” under the 1934 Act at 17 C.F.R. § 240.10b–5).

The core requirement of these rules is that potential investors in Obligations must be provided with all “material” information relating to the offered Obligations. The information provided to investors must not contain any material misstatements, and the City must not omit material information which would be necessary to provide to investors a complete and transparent description of the Obligations and the City’s financial condition.

When the City issues Obligations, the two central disclosure documents which are prepared are a preliminary official statement (“POS”) and a final official statement (“OS”; collectively with the POS, “Official Statement”). The Official Statement generally consists of (i) a description of the specific transaction including maturity dates, interest rates, redemption provisions, the specific type of financing, the leased premises (in certificate of participation financings) and other matters particular to the financing; (ii) information on the source of payment for the Obligations (discussed in the next paragraph); and (iii) various other appendices, including the City’s audited financial report, form of the proposed legal opinion, and form of continuing disclosure undertaking.

Investors use the Official Statement as one of their primary resources for making informed investment decisions regarding the City’s Obligations.

The City issues Obligations payable from different sources, including the City’s General Fund. The Official Statement for a given transaction must reflect the particular source of payment. In General Fund-backed financings, the Official Statement will include a section which provides information on the financial condition of the City’s General Fund and other relevant City financial data (the “City Section”).

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ENGAGEMENT OF OUTSIDE DISCLOSURE COUNSEL
The City engages outside legal counsel with expertise in securities laws for advice with respect to the City’s disclosure obligations and requirements under the federal securities laws (“Disclosure Counsel”).

Disclosure Counsel assists the City in preparing the Official Statement and reviews all new data and updates to the Official Statement. Throughout the process of receiving and incorporating material, Disclosure Counsel provides advice as to standards of materiality and other securities law issues. Disclosure Counsel has a confidential, attorney-client relationship with the City.

Disclosure Counsel provides a negative assurance letter to the underwriters as to the disclosure set forth in the Official Statement for each Obligation. The letter advises the underwriters that, as a matter of fact and not opinion, no information came to the attention of the attorneys working on the transaction which caused them to believe that the Official Statement as of its date and as of the date of their letter (except for any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, and other customary exclusions), contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

DISCLOSURE PROCESS
When the City determines to issue Obligations, the Director of Management Services requests involved City Department Directors to commence preparation of the portions of the Official Statement for which they are responsible. While the general format and content of the Official Statement secured by a particular revenue source does not normally change substantially from offering to offering, except as necessary to reflect major events, the City Manager, Director of Management Services, and City Attorney (or their designees) are separately responsible for reviewing and preparing or updating certain portions of the Official Statement which are within their particular area of knowledge. Additionally, all participants in the disclosure process are separately responsible for reviewing the entire Official Statement.

Disclosure Counsel and the City’s Municipal Advisor assists the Director of Management Services and City Manager in determining the materiality of any particular item, and the development of specific language in the Official Statement. Disclosure Counsel also assists the City in the development of a “big picture” overview of the financial condition of the General Fund or particular enterprise included in the Official Statement. This overview highlights particular areas of concern. Disclosure Counsel has a confidential, attorney-client relationship with the City.

The Director of Management Services schedules one or more meetings or conference calls of the financing team working group (which includes City officials, the City’s municipal advisor, Bond and Disclosure Counsel, the underwriter of the Obligations, and its counsel), and new drafts of the Official Statement are circulated and discussed. During this part of the process, there is substantial contact among City Department Directors (or their designees), other members of the financing team and Disclosure Counsel, to discuss issues which may arise, determine the materiality of particular items and ascertain the prominence in which the items should be disclosed.

Before distributing a POS to potential investors, there is a formal meeting which includes City officials involved in the preparation of the POS and the underwriters and their counsel, during which the Official Statement is reviewed in its entirety, page by page or section by section, to obtain final comments and to allow the underwriters to ask questions of the City’s senior officials. This is referred to as a “due diligence” meeting.

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A substantially final form of the POS is provided to the City Council and, if applicable, the Board of Directors of the Monterey Park Public Financing Authority (the “Authority”) in advance of approval to afford the City Council an opportunity to review the POS, ask questions and make comments. The substantially final form of the POS is approved by the City Council which generally authorizes certain senior staff to make additional corrections, changes and updates to the POS in consultation with the City Attorney and Disclosure Counsel.

At the time the POS is posted for review by potential investors, senior City officials execute certificates deeming certain portions of the POS complete (except for certain pricing terms) as required by Securities and Exchange Commission (“SEC”) Rule 15c2-12.

Between the posting of the POS for review by potential investors and delivery of the final OS to the underwriter for redelivery to actual investors in the Obligations, any changes and developments will have been incorporated into the POS, including particularly the City Section, if required. If necessary, to reflect developments following publication of the POS or OS, as applicable, supplements will be prepared and published.

In connection with the closing of the transaction, one or more senior City officials execute certificates stating that certain portions of the OS, as of the date of each OS and as of the date of closing, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements contained in the OS in light of the circumstances under which they were made, not misleading. The City Attorney also provides an opinion letter for underwriters. Generally, that opinion letter will inform underwriters that information contained in the section of the OS relating to the City and its operations (or specified portions thereof) as of the date of the opinion letter did not, and as of the date of the closing, does not, contain any untrue statement of a known material fact or omitted or omits to state any known material fact necessary to make the statements within the OS, in light of the circumstances under which they were made, not misleading. The City Attorney does not opine to any financial, statistical, economic or demographic data or forecasts, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion, and certain other customary matters.

DEVELOPMENT OF INFORMATION FOR THE OBLIGATIONS
The information contained in the City Section is developed by City personnel under the direction of the Director of Management Services, with the assistance of the financing team. In certain circumstances, additional City officials will be involved, as necessary. The following principles govern the work of the respective City personnel that contribute information to the City Section:
• City employees involved in the disclosure process are responsible for being familiar with federal securities laws as they relate to disclosure.
• City employees involved in the disclosure process should be instructed to err on the side of raising issues when preparing or reviewing information for disclosure. Officials and other personnel are encouraged to consult with Disclosure Counsel if there are questions regarding whether an issue is material or not. • Care should be taken not to shortcut or eliminate any steps outlined in the Policy on an ad hoc basis.

However, the Policy is not necessarily intended to be a rigid list of procedural requirements, but instead to provide guidelines for disclosure review. If warranted, based on experience during financings or because of additional SEC pronouncements or other reasons, the City should consider revisions to the Procedures.
• The process of updating Official Statements from transaction to transaction should not be viewed as being limited to updating tables and numerical information. While it is not anticipated that there will be major changes in the form and content of the Official Statements secured by a particular revenue source at the T40

time of each update, everyone involved in the process should consider the need for revisions in the form, content and tone of the sections for which they are responsible at the time of each update. • The City must make sure that the particular officials involved in the disclosure process are of sufficient seniority such that it is reasonable to believe that, collectively, they are in possession of material information relating to the City and its finances.

DISTRIBUTION OF PROCEDURES; TRAINING
The Procedures must be provided to all senior City officials and any other member of the City staff that is involved in the City’s disclosure obligations and must also be provided to the members of the City Council and the members of the Board of Directors of the Authority.

Periodic training for the personnel involved in the preparation of the Official Statement is coordinated by the office of the Director of Management Services, with the assistance of Disclosure Counsel. These training sessions are provided to assist staff members involved in identifying relevant disclosure information to be included in Official Statements. The training sessions also provide an overview of federal laws relating to disclosure, situations in which disclosure rules apply, the purpose of the Official Statement, a description of previous SEC enforcement actions and a discussion of recent developments in the area of municipal disclosure. Attendees at the training sessions are provided the opportunity to ask questions of Disclosure Counsel concerning disclosure obligations and are encouraged to contact Disclosure Counsel at any time if they have questions.

ANNUAL CONTINUING DISCLOSURE REQUIREMENTS
In connection with issuing of Obligations, the City entered into a number of agreements (“Continuing Disclosure Certificates”) to provide annual reports related to its financial condition (including its audited financial statements) as well as notice of certain events relating to the Obligations specified in the Continuing Disclosure Certificates. The City must comply with the specific requirements of each Continuing Disclosure Certificate. The City’s Continuing Disclosure Certificates generally require that the annual reports be filed within nine months after the end of the City’s fiscal year, and event notices are generally required to be filed within 10 days of their occurrence.

Specific events which require “enumerated event” notices are set forth in each particular Continuing Disclosure Certificate.

The Director of Management Services is responsible for preparing and filing the annual reports and enumerated event notices required pursuant to the Continuing Disclosure Certificates and for other secondary market disclosures as described under the caption “Secondary Market Disclosure.” Particular care must be paid to the timely filing of any changes in credit ratings on Obligations (including changes resulting from changes in the credit ratings of insurers of particular Obligations).

The City Attorney or Director of Management Services will provide written notice to the City Council and the Board of Directors of the Authority of any receipt by the City or the Authority of any default, event of acceleration, termination event, modification of terms (only if material or may reflect financial difficulties), or other similar events (collectively, a “Potentially Reportable Event”) under any agreement or obligation to which the City is a party and which may be a “financial obligation” as discussed below. Such written notice should be provided by the City Attorney or Director of Management Services to the City Council and the Board of Directors of the Authority as soon as the City Attorney or Director of Management Services is provided written notice or otherwise informed by knowledgeable City personnel, consultants, or external parties of such event. The Director of Management Services, with the assistance of Bond and Disclosure Counsel, will determine whether notice of such Potentially Reportable Event is required to be filed on the Electronic Municipal Market Access (“EMMA”) T41
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pursuant to the disclosure requirements of SEC Rule 15c2-12 (the “Rule”). If filing on EMMA is required, the filing is due within 10 business days of such Potentially Reportable Event to comply with the continuing disclosure undertaking for the various debt obligations of the City. The Director of Management Services will notify the City Council and the Board of Directors of the Authority of such events.

The City Attorney or Director of Management Services will report to the City Council and the Board of Directors of the Authority regarding the execution by the City of any agreement or other obligation which might constitute a “financial obligation” for purposes of the Rule. Amendments to existing City agreements or obligations with “financial obligation,” which relate to covenants, events of default, remedies, priority rights, or other similar terms, should be reported to the City Council and the Board of Directors of the Authority as soon as the City Attorney or Director of Management Services is provided written notice or otherwise notified by knowledgeable City personnel, consultants, or external parties of such event. The Director of Management Services will determine, in consultation with the City Attorney and with the assistance of Bond and Disclosure Counsel, whether such agreement or other obligation constitutes a material “financial obligation” for purposes of the Rule. If such agreement or other obligation is determined to be a material “financial obligation” or a material amendment to a “financial obligation” described above, notice thereof would be required to be filed on EMMA within 10 business days of execution or incurrence. The types of agreements or other obligations that could constitute “financial obligations” and would need to be reported on EMMA include:

1. Bank loans or other obligations which are privately placed;

2. State or federal loans;

3. Commercial paper or other short-term indebtedness for which no offering document has been filed on EMMA;

4. Letters of credit, surety policies or other credit enhancement with respect to the City’s publicly offered debt;

5. Letters of credit, including letters of credit which are provided to third parties to secure the City’s obligation to pay or perform (an example of this is a standby letter of credit delivered to secure the City’s obligations for performance under a mitigation agreement);

6. Capital leases for property, facilities, fleet or equipment; and

7. Agreements which guarantee the payment or performance obligations of a third party (regardless of whether the agreements constitute guarantees under California law).

Types of agreements that could be a “financial obligation” under the Rule include:

1. Payment agreements which obligate the City to pay a share of another public agency’s debt service (for example, an agreement with a joint powers agency whereby the City agrees to pay a share of the joint powers agency’s bonds, notes or other obligations); and

2. Service contracts with a public agency or a private party pursuant to which the City is obligated to pay a share of such public agency or private party’s debt service obligation (for example, certain types of Public-Private Partnership arrangements).

Types of agreements that may be a “financial obligation” subject to the Rule include:

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1. Any agreement the payments under which are not characterized as an operation and maintenance expenses for accounting purposes if such agreement could be characterized as the borrowing of money;
The Director of Management Services will continue to work with the City Attorney and Bond and Disclosure Counsel to refine the definition of financial obligation going forward based on future SEC guidance.

SECONDARY MARKET DISCLOSURE
On February 7, 2020, the SEC released a staff legal bulletin (the “Bulletin”) concerning secondary market disclosure in the municipal bond market. The Bulletin included SEC views on a variety of matters including, without limitation, the applicability of the federal securities law to public agency websites, reports delivered to governmental and institutional bodies and statements made by public officials including elected board members.

Documents, reports and other written statements of the City which contain current financial and operational conditions of the City will be included in a section of the City’s website appropriately identified. The City and its Bond and Disclosure Counsel have reviewed the Bulletin and have incorporated certain SEC staff recommendations into this Policy and into disclosure training for staff and City Council members. The City and its Bond and Disclosure Counsel will be cognizant of those reviews and will consider whether those reviews require the City to make secondary market disclosures.

CERTIFICATION AND RECEIPT OF UNDERSTANDING
I certify that I have received a copy of the City of Monterey Park Policy for Disclosure Procedures. I have reviewed and understand its contents and agree to abide by the principles and requirements in the Disclosure Procedures.

Name:

Date: 1/20/2021
APPROVED AS TO FORM:
___________________
Karl H. Berger, City Attorney
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City of Monterey Park
Administrative Policy 20-29
Disclosure Procedures

City of Monterey Park Policy Number:

Administrative Policy Issue Date: 04/ 27 /2021
Revised Date: 5/22/2024
Subject: Approved by:

POLICY FOR UNFUNDED PENSION LIABILITY
_______________________
Inez Alvarez, City Manager
Page Number Page 1 of 5

PURPOSE
The purpose of this Unfunded Pension Liability Policy (“Policy”) is to provide guidance on the development and adoption of a funding plan for any Unfunded Accrued Liabilities (“UAL”) that are calculated annually by the California Public Employee Retirement System (“CalPERS”), or for any unfunded accrued liabilities remaining immediately after the issuance of a Pension Obligation Bond (“POB”). This funding Policy should also support the decision making process of the City Council and should be consistent with the overall purpose and goals of the City of Monterey Park’s pension plan. As used in this Policy, “City” means the City of Monterey Park and affiliated, but separate, legal entities such as the Monterey Park Financing Authority, as the context may require.

The City recognizes that a fiscally prudent Policy should:
§ Maintain the City’s sound financial position;
§ Ensure the City has the flexibility to respond to changes in future service priorities, revenue levels, and operating expenditures;
§ Protect the City’s creditworthiness;
§ Ensure that all pension funding decisions are structured to protect both current and future taxpayers, ratepayers, employees and residents of the City; and
§ Ensure that the structure of the City’s POB and future UAL amortization is consistent with the City’s strategic planning goals, objectives, capital improvement program, budget, and/or debt policy.

BACKGROUND
The primary goal of funding defined benefit pension plans is to ensure that sufficient assets will be accumulated to deliver promised benefits when they come due and to protect pension benefits in situations that involve employer insolvency or bankruptcy. Establishing sound funding guidelines promotes pension benefit security.

The City’s overall objective is to fund its CALPERS pension plan up to 100% of the total accrued liability and not less than 80%, whenever possible. In addition to the Section 115 Trust, the City will also create a Pension Rate Stabilization Assignment in the General Fund, the goal of which is to maintain additional savings that can used to pay off accrued pension liabilities. The Pension Rate Stabilization Assignment allows the City to setaside funds in the General Fund to contribute to the pension plan funded percentage and manage ongoing pension costs.

The City is committed to fiscal sustainability by employing long-term financial planning efforts, maintaining appropriate reserve levels, and employing prudent practices in governance, management, budget administration, and financial reporting. This Policy is intended to make all relevant information readily available to decisionT44

City of Monterey Park
Administrative Policy No.

Unfunded Pension Liability Policy

makers and the public to improve the quality of decisions, identify policy goals, and to demonstrate a commitment to long-term financial planning. Adherence to this Policy signals to rating agencies and the capital markets that the City is well managed and able to meet its obligations in a timely manner.

The purpose of this funding policy is to establish a framework for funding the City’s defined benefit pension plan, taking into account factors that are relevant to the plan and the City. These factors include:
• The City’s financial position;
• Stability of the plan and/or the affordability of the annual contributions; • Benefit security;
• The terms of the CALPERS contract for Monterey Park, along with any related collective bargaining agreements; and
• Minimum funding requirements under California law.

There are several advantages to developing a funding policy to address an unfunded accrued liability. These advantages include the following:
• Provides the framework to ensure the proper management of future liabilities and to minimize the effects on operations. Adopting a funding policy will help ensure a disciplined decision-making process, which will contribute to better predictability in funding.
• Having a written summary of the funding policy that is accessible to the employees and the public will help improve the transparency of funding decisions and increase the understanding of pension funding issues.
• Developing this funding policy improves the identification, understanding, and management of the risk factors that affect the variability of funding requirements and the security of benefits to the employees and retirees.

The City contracts with CalPERS to manage its employee pension plan. CalPERS collects contributions from the City and its employees, invests the money, and pays monthly benefits to retirees. The market value of investments in the plan at any point in time may be less than the liability for benefits already earned, which means the City has an Unfunded Pension Liability. Each year, the amount of the liability changes based upon actual plan results. The liability grows when actual plan results do not meet CalPERS assumptions, such as retirees living longer than expected. Conversely, the liability decreases when actual plan results exceed CalPERS assumptions, such as investments earning more than the assumed rate of return. CalPERS also charges interest on the liability each year, based on the plan’s discount rate, equivalent to the assumed rate of return.

CalPERS requires the City to make annual contributions to reduce the unfunded liability.

STRATEGIES
New Unfunded Accrued Liability
Every June 30th, CALPERS will complete a new actuarial valuation report and will calculate the City’s pension liability as of the new valuation date. If the value of the funded assets is not equivalent to this new liability amount, the City will incur a new unfunded accrued liability at that point in time. The unfunded accrued liability may increase or decrease from year to year, due to the following factors:

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City of Monterey Park
Administrative Policy No.

Unfunded Pension Liability Policy

• Changes in actuarial assumptions and experience changes (e.g., changes in the discount rate and changes in demographic experience);
• Changes in actuarial gains and losses due to asset returns being higher or lower than expected; • Changes in plan benefits;
• Changes in number of employees participating (Classic/PEPRA), employee pickup of plan contributions, etc.

There are two basic strategies to reduce the City’s cost for the unfunded accrued liability:

1. Contribute more than required by CalPERS (an Additional Discretionary Payment) to reduce the accrual of interest; or

2. Refinance the liability, which is a legal debt of the City, at a lower interest rate.

Within these two basic strategies, there are a variety of options and associated risks.

Application of Additional Discretionary Payments
When the City identifies funding for an Additional Discretionary Payment (ADP), there is a strategy to apply the ADP to the unfunded pension liability.

The unfunded liability is comprised of layers, or “bases,” related to each year of actual plan results. Each base is either a loss or gain. CalPERS amortizes the bases over twenty years to calculate the annual required contribution to reduce the liability. Loss bases at the beginning of an amortization cycle are desirable targets for an ADP to maximize overall savings. Conversely, loss bases at the end of an amortization cycle are desirable targets to maximize short-term savings.

It is the City’s policy to apply any ADP to loss bases at the beginning of an amortization cycle to maximize overall savings.

Use Accumulated Fund Balance or One-Time Money
The City uses its General Fund to pay for unrestricted revenues and expenditures. It also uses many other “restricted” fund accounts for revenues with spending restrictions imposed by law, other governmental agencies, or legally enforceable agreements. The City allocates its unfunded pension liability to each fund based upon the prior year normal cost charged to the fund through payroll.

When the City receives more revenue than expected, or spends less than budgeted, a fund balance accumulates.

Much like spending from a savings account, accumulated fund balance is a one-time resource the City can use to pay down a fund’s allocation of the unfunded pension liability. The City has a separate “reserve” policy to establish the minimum fund balance to keep on hand for emergencies and operational cash flow.

It is the City’s policy to consider an additional discretionary payment to reduce the unfunded pension liability during each annual budget process, when the City Manager, or designee, identifies accumulated fund balance in excess of reserve policy requirements. It is the City’s goal to allocate up to 50% of any General Fund year end savings for additional payments to CalPERS, or deposits into the City’s Section 115 Trust account.

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City of Monterey Park
Administrative Policy No.

Unfunded Pension Liability Policy

This table lays out an estimate of CalPERS’ paying off / funding schedule of new UAL:

New Unfunded Accrued Liability
(Any new liability incurred after the
June 30, 2020 valuation date report ) Payoff / Funding Time Period $0 to $2,000,000 5 Years
$2,000,001 to $5,000,000 8 Years
$5,000,001 to $15,00,000 10 Years
Over $15,000,000 15 Years
Each year, when the City is provided with the annual valuation report from CALPERS, the City Manager, or designee, will present to the City Council, as part of the next budgetary cycle, the following:
• The dollar amount of the new liability (new amortization base); • The number of years that staff is recommending to pay off/fund the liability; • The dollar amount of the annual contribution to be made; • The funding source(s) of the payments; and
• The short-term and long-term financial impacts on the City’s General Fund reserve balance.

Use Cash Planned for Capital Projects and Issue Tax-Exempt Debt When the City has unrestricted cash on hand to fund capital projects, the City may consider using the cash to reduce the unfunded pension liability and instead issue tax-exempt debt to pay for the project. Tax-exempt debt carries a lower interest rate, and this strategy effectively swaps a higher-rate debt for a lower-rate debt.

The City funds most of its capital projects with restricted money. Therefore, the restricted funds’ allocation of unfunded pension liability, and the cash available for a project, limits the use of this strategy. In addition, frequent debt issues can negatively affect the City’s credit rating.

It is the City’s policy to consider paying down the unfunded pension liability when there is at least $10 million of unrestricted cash available for capital projects and it is feasible to issue tax-exempt debt for the projects.

Irrevocable Section 115 Trust
As an alternative to making an ADP to CalPERS, the City can choose to set aside additional money in a “Section 115 Trust.” The Section 115 Trust refers to Internal Revenue Code Section 115. Money placed into the Section 115 Trust is irrevocable, funds are committed for the essential function specified in the Trust Agreement. The City previously established a Section 115 Trust in 2012 for Other Post-Employee Benefits (OPEB).

There are two primary benefits associated with a Section 115 Trust. The City has more control over the investment, and the City can use the Trust for pension cost stabilization. If there are future spikes in pension costs, the City could use money from the Section 115 Trust to help pay some of the required CalPERS contributions. However, T47

City of Monterey Park
Administrative Policy No.

Unfunded Pension Liability Policy

to utilize the Trust, funds must be deposited in advance to have available when needed.

It is the City’s policy to consider adding money to the Section 115 Trust account during each annual budget process.

Pension Obligation Bonds
The City may consider issuing Pension Obligation Bonds (POBs) to refinance its unfunded pension liability.

When low interest rates are available, issuing POBs can significantly reduce the City’s pension costs. However, there is risk associated with the refinancing. If actual pension plan results consistently exceed CalPERS assumptions, the City may pay more overall.

CERTIFICATION AND RECEIPT OF UNDERSTANDING
I certify that I have received a copy of the City of Monterey Park Policy for Disclosure Procedures. I have reviewed and understand its contents and agree to abide by the principles and requirements in the Disclosure Procedures.

Name:

Date:

APPROVED AS TO FORM:
___________________
Karl H. Berger, City Attorney
5/22/2024
T48

City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.D.

To: The Honorable Mayor and City Council
From: Christine Tomikawa, Human Resources/Risk Management Director Subject: Amendment to Agreement 2230-AA with City Management Advisors, LLC for Executive Recruitment Services
Recommendation:

It is recommended that the City Council consider:

1. Ratifying a Third Amendment with City Management Advisors, LLC in a form approved by the City Attorney, to provide executive recruitment services in an amount of $28,000;

2. Authorizing the City Manager, or designee, to appropriate $28,000 from the General Fund into the 2024-2025 Fiscal Year budget; and

3. Taking such additional, related, action that may be desirable.

Executive Summary:

The City has utilized City Management Advisors, LLC to conduct two prior executive level recruitments for the Director of Public Works and Director of Community Development. City Management Advisors, LLC brings a wealth of experience and expertise in recruiting for executive level positions across the state of California. The Director of Human Resources and Risk Management ("Director") is recommending an amendment to the professional services agreement to complete the City's recruitment for the Fire Chief position. The amendment is valued at $28,000 which brings the total value of the contract to $80,000.

Background:

In 2022, the City enlisted the services of City Management Advisors, LLC to assist with the Director of Public Works recruitment and were successful at placing a seasoned and qualified candidate. Recently the City utilized City Management Advisors, LLC to lead the Director of Community Development recruitment and are currently in the final stages of the recruitment process. The cost to conduct the Fire Chief recruitment with City Management Advisors, LLC requires City Council authority.

On March 12, 2025, the Fire Chief position became vacant. The City needed to immediately begin the recruitment process to meet CalPERS' requirement to have "an active recruitment" to appoint a CalPERS retired annuitant to the vacant position. The City appointed retired Fire

Chief, Scott Haberle, to ensure Fire Department emergency services were not impacted as the City was still under a declared emergency for the windstorms and firestorms in the Los Angeles County area.

City Management Advisors, LLC representatives have worked in executive level positions for public agencies. The consultants' public sector work experience and understanding of the recruitment process provide a wide network when recruiting for department head level positions. With the recent recruitments the City has conducted for similar level positions, the Director recommends ratifying the agreement with City Management Advisors, LLC for the Fire Chief recruitment.

Strategic Plan Goal:

This action supports the City Council's Strategic Plan Goal of maintaining stability of the City's Human Resources by strengthening workforce recruitment.

Fiscal Impact:

For Fiscal Year 2024-2025, the Human Resources and Risk Management Department will require a budget adjustment to appropriate funds for the estimated $28,000 cost for recruitment services.

Attachments:

1. City Management Advisors, LLC - Third Amendment

Staff Report
June 18, 2025
ATTACHMENT 1
City Management Advisors, LLC Agreement
Third Amendment

THIRD AMENDMENT TO
AGREEMENT NO. 2230-AA BETWEEN

THE CITY OF MONTEREY PARK AND

CITY MANAGEMENT ADVISORS, LLC

FOR EXECUTIVE RECRUITMENT SERVICES
THIS THIRD AMENDMENT (“Amendment”) is made and entered into the 15th day of April 2025, by and between the CITY OF MONTEREY PARK, a general law city and municipal corporation (“CITY”), and CITY MANAGEMENT ADVISORS, a Limited Liability Company (“CONSULTANT”) (collectively, the “Parties”).

1. Pursuant to Section 12 of Agreement No. 2230-AA (“Agreement”), CITY agrees to pay CONSULTANT $28,000 for CONSULTANT’s Services attached as Exhibit “B” and incorporated by reference. CITY will pay this sum as specified in the attached Exhibit “B” which is incorporated by reference.

2. CONSISTENCY. In interpreting this Amendment and resolving any ambiguities, the main body of this Amendment takes precedence over the attached Exhibits; this Amendment supersedes any conflicting provision. Any inconsistency between the Exhibits will be resolved in order in which the Exhibits appear below: Agreement No. 2230-AA; Exhibit “A;” Exhibit “B.”

3. ELECTRONIC SIGNATURES. Pursuant to Government Code §16.5, the Parties agree that this Amendment, Agreements ancillary to this Amendment, and related documents to be entered into in connection with this Amendment will be considered signed when the signature of a party is delivered by electronic transmission. Such electronic signature will be treated in all respects as having the same effect as an original signature.

4. This Amendment may be executed in any number or counterparts, each of which will be an original, but all of which together constitutes one instrument executed on the same date and all such counterparts so executed constitute one Agreement binding on all the Parties notwithstanding that all the Parties are not signatories to the same counterpart.

5. Except as modified by this Amendment, all other terms and conditions of the Second Amendment to the Agreement remain the same.
[SIGNATURES ON NEXT PAGE]
Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 475 of 775 City Management Advisors, LLC
Third Amendment to Agreement No. 2230-AA
TAKE WITNESS, the Parties have executed this contract the day and year first hereinabove written.

CITY OF MONTEREY PARK
Inez Alvarez,
City Manager
ATTEST:

Maychelle Yee,
City Clerk
APPROVED AS TO FORM:

Karl H. Berger, City Attorney
By:______________________________
Justin A. Tamayo, Assistant City Attorney
City Management Advisors, LLC
Anton Dahlerbruch, Executive Recruiter
Taxpayer ID No. 84-1855311
Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 476 of 775 Exhibit B
So
Peckham

MCKENNEY

EXECUTIVE SEARCH
Recruitment for Fire Chief, Monterey Park, CA
March 19, 2025
Peckham & McKenney
Peckham & McKenney provides executive search services to local government agencies throughout the western United States and is headquartered in Roseville, CA. The firm, founded in 2004 by Bobbi (Peckham) McKenney and Phil McKenney, and under the ownership and leadership of Anton “Tony” Dahlerbruch, maintains and is recognized for an unsurpassed commitment to service that has resulted in decades of successful placements and positive relationships with local government and applicants alike. Our team is comprised of Executive Recruiters who are based in northern and southern California and represent over 80 collective years of experience in local government and executive search. Our team also includes administrative, research, and marketing and design professionals for conducting searches. We are proud of our reputation as one of the most trusted and respected executive recruitment firms in the country.

Since 2004, we have conducted more than 750 executive level recruitments. The scope of our recruitments includes many Community Development Director positions throughout California and a full list of all our searches be viewed here. To learn more about Peckham & McKenney, we invite you to visit our web site at www.peckhamandmckenney.com.

Scope of Services
It is our understanding that the City of Monterey Park is seeking search services for finding a Fire Chief.

Consistent with other search process conducted by Peckham & McKenney, the proposed process will include the following steps:

Step 1 City discussion with Recruiter to discuss recruitment needs and process. (March 19, 2025) Step 2 Commence process as follows:

Step 2 A: Pre-recruitment / Recruiter works with City liaison to confirm schedule and future meeting dates, obtain photographs, receive list of employee benefits, etc.

Step 2 B: Recruiter meets individually (virtually) with City Manager, Assistant City Manager, and Interim Fire Chief to learn the specific interests for the next Fire Chief. Recruiter prepares, provides to, and receives from the City the approval of Candidate Profile. (2 weeks) Step 2 C: Recruiter conducts direct and personal outreach, posts and advertises, etc. to find applicants. (4 weeks)
goyears ofserving government
300 Harding Boulevard, Suite 203-D
Roseville, CA 95678
1-866-912-1919
www.peckhamandmckenney.com

Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 477 of 775 Step 2 D: Recruiter conducts supplemental process to review and preliminarily evaluate applicant’s alignment with the Candidate Profile and City’s previously stated interests for candidates. (2 weeks) Step 2 E: Recruiter and City meet (virtually) to review list of all applicants as well as materials of applicants to be considered for an interview. City determines who to interview and interview questions. (1 week)
Step 2 F: City conducts in-person interviews facilitated by Recruiter. City selects finalist candidate. (2 consecutive days)
Step 2 G: Concurrentwith City / finalist candidate contractnegotiations, Recruiter conductsbackground and reference check of finalist candidate. (1 week)
Cost of Services
Over years of experience, we have found that an all-inclusive fee is simpler, cost-effective, and efficient. The all-inclusive fee includes, as applicable to each phase, the out-of-pocket costs associated with advertising, consultant travel, administrative support / printing / copying / postage / materials, telephone / technology, partial background checks on recommended candidates, and full background check on selected finalist only.

The fee for a Fire Chief search will be $28,000.

Process of Payment and Insurance
One-third of the $28,000 fee is due as a retainer upon execution of the agreement. The second third will be invoiced within approximately 30 days after Step 1 is completed. The final third will be invoiced approximately 30 days thereafter. All payments are due within 30 days following the invoice date.

Peckham & McKenney carries Professional Liability Insurance ($1,000,000 limit), Commercial General Liability Insurance ($2,000,000 General Liability, and $4,000,000 Products) and Automobile Liability Insurance ($1,000,000). Our Insurance Broker is B&B Premier Insurance Solutions, Agoura Hills, CA.

Necessary insurance documentation will be provided to the City of Monterey Park in a timely manner.

Guarantee
• We will connect with you and our placement in 6 months and 1 year after the appointment to check-in. • We will conduct a second search within 6 months of our search process if a candidate is not placed. • If the placement vacates the position within 1 year from the date of accepting the offer, we agree to conduct a second search within 6 months of the vacancy.

Because of how we conduct recruitments, it is unusual that we are unsuccessful in providing a placement, an individual is not placed, or the placement vacates the position within a year. In the unlikely event that no qualified candidates are identified as a result of the search efforts, and it is mutually agreed that the result is due to the search effort and/or process, we will extend the search for a second time for expenses ($7,200) only. If qualified applicants are not selected or the selected candidate is separated goyears ofserving government----------------------------- 300 Harding Boulevard, Suite 203-D 1-866-912-1919
Roseville, CA 95678 www.peckhamandmckenney.com

Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 478 of 775 from employment within 1 year after accepting the offer, a second search will be conducted for the discounted fixed fee of $17,600 (external candidates only, and except in the event of budgetary cutbacks, promotion, position elimination, or illness/death, etc.).

Diversity Statement
Peckham & McKenney is committed to diversity in its broadest possible definition in every aspect of each executive recruitment our firm provides. Peckham & McKenney does not discriminate on the basis of race, color, religion, creed, sex/gender, national origin/ancestry, disability, pregnancy, sexual orientation (including transgender status), marriage or family status, military status, or age. We are fully compliant with all applicable federal and state employment laws and regulations in all of our recruitments.

References
Will be provided on request.
goyears ofserving government
300 Harding Boulevard, Suite 203-D
Roseville, CA 95678
1-866-912-1919
www.peckhamandmckenney.com

Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 479 of 775 City of Monterey Park
Signature Verification Form
Thank you for doing business with the City of Monterey Park. Please note that the City requires verification that the person executing a contract has signature authority. Signature requirements for contracts vary depending on whether a vendor conducts business in the capacity of a corporation, general partnership, limited partnership, or as an individual. When the contract is with a corporation, California Corporations Code § 313 requires the contract to be signed by: (a) one officer from the corporation’s “operational group” consisting of the chairman of the board, the president, or any vice president; and (b) one officer from the corporation’s “financial group” consisting of the secretary, or assistant secretary, or the chief financial officer or any assistant treasurer. Alternatively, the board of directors for the corporation can delegate signature authority to a particular individual or individuals. This is generally memorialized in the form of a resolution adopted by the board of directors. When the contract is with a consultant conducting business as a general partnership or limited partnership, the contract should be signed by a least one general partner having authority to enter into the contract on behalf of the partnership. When the contract is with an individual, that individual must sign the contract.

To ensure that the City’s contracts are valid, this Signature Verification Form must be completed by vendors/contractors/consultants providing services to the City of Monterey Park.

By completing this form, the person listed below has the authority to sign all legal binding agreements with the City of Monterey Park on behalf of the company/organization listed below. If a corporation, attach a copy of the document demonstrating signature authority to this form.

The City of Monterey Park greatly appreciates your cooperation.

Date: July 3, 2023
Type of Company/Organization: LLC
Company/Organization Name: City Management Advisors dba Peckham & McKenney Name: Anton Dahlerbruch
Title
Signature
Man
Please send the completed form to the following address:

City of Monterey Park
City Clerk's office
320 West Newmark Avenue
Monterey Park, CA 91754
Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 480 of 775

CITY MANAGEMENT ADVISORS
LLC (201912710047)
Request
Certificate
initial Filing Date 04/30/2019
Status Active
Standing - SOS Good
Standing - FTB Good
Standing - Agent Good
Standing- VCFCF Good
Formed in CALIFORNIA
Entity Type Limited Liability Company -
CA
Principal Address 5452 MANITOWAC DR

RANCHO PALOS VERDES, CA
90275
MailingAddress 5452 MANITOWAC DR

RANCHO PALOS
VERDES,CA90275
Statement ofInfo
Due Date
04/30/2027
Agent Individual

ANTON DAHLERBRUCH
5452 MANITOWAC DR

RANCHO PALOS VERDES, CA
90275
View History Request Access
Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 481 of 775 7 ®

ACORD CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) 0^/1^/202^
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

PRODUCER
B & B Premier Insurance Solutions
5008 Chesebro Road Suite 200
Agoura Hills CA 91301
CONTACT Milana Medvedeva NAME:
(PAH/CO,NNEo, Ext): (818) 223-8383 (FAA/XC, No): (818) 223-8181 E-MAIL [email protected] ADDRESS:

INSURER(S) AFFORDING COVERAGE NAIC #
INSURER A : Hartford Insurance Company 38288

INSURED
Peckham & McKenney
300 Harding Boulevard, Suite 203D
Roseville CA 95678
INSURER B : Employers Insurance Group
INSURER C : Westchester Surplus Lines Ins Co
INSURER D :

INSURER E :

INSURER F :

COVERAGES CERTIFICATE NUMBER: CL2151929016 REVISION NUMBER:

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

INSR

LTR TYPE OF INSURANCE
ADDL
INSD
SUBR

WVD POLICY NUMBER

POLICY EFF
(MM/DD/YYYY)

POLICY EXP
(MM/DD/YYYY) LIMITS
A

X COMMERCIAL GENERAL LIABILITY
72SBMBC5772 07/01/202^ 07/01/202^
EACH OCCURRENCE 2,000,000 $

CLAIMS-MADE X OCCUR

DAMAGE TO RENTED
PREMISES (Ea occurrence) 1,000,000 $
MED EXP (Any one person) 10,000 $
PERSONAL & ADV INJURY 2,000,000 $
GEN'L AGGREGATE LIMITAPPLIES PER: GENERALAGGREGATE 4,000,000 $ X □m ir~v PRO- \ i rn-'

POLICY JECT LOC
OTHER:

PRODUCTS - COMP/OP AGG 4,000,000 $
Hired and Non-Owned $ 2,000,000
A

AUTOMOBILE LIABILITY
72SBMBC5772 07/01/202^ 07/01/202^
COMBINED SINyGLE LIMIT
(Ea accident) $ 2,000,000
ANYAUTO BODILY INJURY (Per person) $
OWNED

AUTOS ONLY
HIRED

AUTOS ONLY

SCHEDULED
AUTOS

NON-OWNED

AUTOS ONLY
BODILY INJURY (Per accident) $
X X

PROPERTY DAMAGE
(Per accident) $
$

UMBRELLA LIAB

EXCESS LIAB
—
OCCUR

CLAIMS-MADE
EACH OCCURRENCE $
AGGREGATE $
DED RETENTION $ $
B

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY Y / N
ANY PROPRIETOR/PARTNER/EXECUTIVE OFFICER/MEMBER EXCLUDED? Y (Mandatory in NH)
If yes, describe under
DESCRIPTION OF OPERATIONS below
N / A EIG4769229 05/15/202^ 05/15/202^
PER OTHSTATUTE ER
E.L. EACH ACCIDENT 1,000,000 $
E.L. DISEASE - EA EMPLOYEE 1,000,000 $
E.L. DISEASE - POLICY LIMIT 1,000,000 $
C
Professional Liability
PSL0039654174 05/15/202^ 05/15/202^
Retention
Each Claim
Aggregate
1,000
$1,000,000
$1,000,000
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) Certificate Holder is named as an additional insured as their interests may appear in the operation of the named insured.

CERTIFICATE HOLDER CANCELLATION
City of Monterey Park
320 West Newmark Ave.

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE
Monterey Park
1 CA 91754
© 1988-2015 ACORD CORPORATION. All rights reserved.

ACORD 25 (2016/03) The ACORD name and logo are registered marks of ACORD Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 482 of 775

COMMERCIAL GENERAL LIABILITY
POLICY NUMBER: 72SBMBC5772 ISSUE DATE: 2 - 18-2025
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

ADDITIONAL INSURED DESIGNATED PERSON

OR ORGANIZATION
This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE PART

SCHEDULE
Name of person or organization:

CITY OF MONTEREY PARK
WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule as an insured but only with respect to liability arising out of your acts or omissions.

CG T4 91 11 88 Copyright, Insurance Services Office, Inc., 1984 Page 1 of 1 Doc ID: 5d45e4ba464415e70edfea5cb4b8837eadabc757 Page 483 of 775 2/18/25, 1:05 PM Hartford Insurance Company of Illinois - Company Profile - Best's Credit Rating Center AM Best Rating Services
Hartford Insurance Company of Illinois
BestLink fl AMB #: 002611 NAIC #: 38288 FEIN #: 061010609 Mailing Address
One Hartford Plaza
Hartford, Connecticut 06155-0001
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Affiliation Code: p (Pooled)
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Effective Date: June 18, 2024
Initial Rating Date: June 30, 1980
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Initial Rating Date: July 14, 2005
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June 18, 2024 A+ June 18, 2024 aaAugust 24, 2023 A+ August 24, 2023 aaAugust 25, 2022 A+ August 25, 2022 aaJuly 29, 2021 A+ July 29, 2021 aaJune 19, 2020 A+ June 19, 2020 aaAugust 30, 2019 A+ August 30, 2019 aaBest's Credit & Financial Reports Best's Credit Report - financial data included in Best's Credit Report reflects the data used in determining the current credit rating(s) for AM Best Rating Unit: AMB #: 058707 - Hartford Financial Services Group, Inc..

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Westchester Surplus Lines Insurance Company
BestLink fl AMB #: 004433 NAIC #: 10172 FEIN #: 582139927 Mailing Address
436 Walnut Street, P.O. Box 1000
Philadelphia, Pennsylvania 19106
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Web: www.chubb.com
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Rating (Rating Category): A++ (Superior)
Affiliation Code: g (Group)
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Effective Date: December 12, 2024
Initial Rating Date: June 30, 1972
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City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.E.

To: The Honorable Mayor and City Council
From: Philip Lanzafame, Interim Director of Community Development Subject: Waive further reading and adopt an Ordinance amending the Monterey Park Municipal Code ("MPMC") to implement the General Plan concerning mixed use development and development standards
Recommendation:

It is recommended that the City Council consider:

1. Waiving the second reading and adopting the proposed Ordinance; and

2. Taking such additional, related, action that may be desirable.

Executive Summary:

The Ordinance was introduced and received first reading at the June 4, 2025 City Council meeting. The staff report from June 4, 2025 is attached for reference. Second reading and adoption of this Ordinance is recommended. If adopted, the ordinance will take effect in 30 days.

Background:

See Attachment 2 – June 4, 2025 City Council Report.

Strategic Plan Goal:

The attached ordinance satisfies the 2025-26 Strategic Plan Goal to “Strengthen our local economy and enhance housing opportunities” by achieving the goals and programs set forth in the HE, reducing barriers to encourage housing development, and supporting economic growth in the City.

Fiscal Impact:

There are no identifiable fiscal impacts associated with adopting the Ordinance itself (other than costs associated with codifying the Ordinance).

Attachments:

1. Ordinance

2. June 4, 2025 City Council Report

ATTACHMENT 1
Ordinance ____ Amending the
Monterey Park Municipal Code

ORDINANCE NO.

AN ORDINANCE AMENDING THE MONTEREY PARK MUNICIPAL

CODE TO IMPLEMENT THE GENERAL PLAN CONCERNING MIXED

USE DEVELOPMENT AND DEVELOPMENT STANDARDS
The City Council of the City of Monterey Park does ordain as follows:

SECTION 1: The City Council finds and declares that:

A. The City initiated the proposed amendments to the Monterey Park Municipal Code (“MPMC”) pursuant to MPMC § 21.38.020 and § 21.42.010.

B. This Ordinance was reviewed by the Interim City Planner for, in part, consistency with the General Plan, and conformity with the Monterey Park Municipal Code (“MPMC”).

C. The Interim City Planner completed review and scheduled a public hearing regarding this Ordinance before the City Council for June 4, 2025.

D. On June 4, 2025, the City Council held a public hearing to receive public testimony and other evidence regarding the proposed Ordinance including, without limitation, information provided to the City Council by the City Planner and public testimony; and
E. The findings in this Ordinance are made based on the entire administrative record including testimony and evidence presented the City Council at its March 19, 2025, public hearing including, without limitation, the staff report submitted by the City Planner.

SECTION 2: Zone Text Amendment Findings. Pursuant to Government Code § 65860 and MPMC § 21.38.050, the City Council finds as follows:

A. Amendments to the MPMC accomplished by this Ordinance are consistent with the goals, policies and objectives of the General Plan including, without limitation:

1. General Plan Policy 19.8— Encourage a diverse mix of uses that are innovative, competitive, entrepreneurial, local, and sustainable, thereby promoting economic development, increasing City revenues, expanding job growth, increasing property values, and meeting residents’ and visitors’ desires and needs.

2. General Plan Policy 19.9— Accommodate a variety of housing

Ordinance No.
options, including medium- and high-density apartments and condominiums, live/work units, and mixed-use buildings with a residential component.

3. Housing Element Goal 2— Remove governmental constraints to the provision of housing to the greatest extent feasible

4. Housing Element Policy 2.4—Update the MPMC to facilitate residential and mixed-use development in the community.

B. The proposed text amendments are aimed at meeting and implementing the objectives of the General Plan and compliance with all applicable zoning regulations will ensure that any future project will not adversely affect surrounding properties.

C. These regulations promote public health, safety, and general welfare and serve the goals and purposes of the MPMC’s zoning regulations. Among other things, the regulations will reduce barriers to the development of housing to address the California Legislature’s determination regarding a statewide housing shortage.

SECTION 4: Environmental Review. The City reviewed the environmental impacts of the proposed Ordinance pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq. “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regs. §§ 15000, et seq., the “CEQA Guidelines”). The City Council finds and determines that this Ordinance is not subject to further review under the California Environmental Quality Act (Public Resources Code §§ 21000, et seq.; “CEQA”) for the following reasons:

A. This Ordinance will not result in a direct or reasonably foreseeable indirect physical change in the environment (14 Cal. Code Regs. § 15060(c)(2)); B. There is no possibility that the Ordinance itself may have a significant effect on the environment (14 Cal. Code Regs. § 15061(b)(3));
C. The Ordinance, by itself, does not constitute a “project” as defined in the CEQA Guidelines (14 Cal. Code Regs. § 15378). The Ordinance is for general policies and procedure-making. It can be seen with certainty that there is no possibility that the Ordinance may have a significant effect on the environment; and
D. The previous CEQA documents adopted by the City Council (see, Resolution Nos. 12124 and 2022-R2) adequately analyze the changes contemplated by this Ordinance:

1. On December 5, 2019, the City Council adopted Resolution No. 12124 certifying the Monterey Park Focused General Plan Update

Ordinance No.

Final Environmental Impact Report (the “FEIR”) (State Clearing House (SCH) No. 2001-01-1074) (Exhibit A), which is incorporated by reference and found at:
https://www.montereypark.ca.gov/DocumentCenter/View/16507/Re so-12124---attachments-included.

2. On January 19, 2022, the City Council adopted Resolution No. 2022- R2 adopting an addendum to the FEIR analyzing the impacts of the City’s 2021-2029 Housing Element update (“FEIR Addendum”), which is incorporated by reference and found at:
https://www.montereypark.ca.gov/DocumentCenter/View/16506/20 22-R2---Addendum-to-the-Final-Environmental-Impact-Report.

3. The Housing Goals are an activity contemplated by the EIR and Addendum.

4. The Housing Goals do not contemplate any changes which will require major revisions to the EIR or Addendum, nor are there any substantial changes with respect to the circumstances under which the EIR and Addendum were undertaken.

5. There is no new information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the EIR and Addendum were certified showing: (1) the Housing Goals will have one or more significant effects not discussed in the EIR or Addendum; and (2) significant effects previously examined will be substantially more severe than shown in the EIR or Addendum.

SECTION 5: Planning Agency. Pursuant to MPMC § 2.56.020(a), the City Council is acting as the Planning Agency for purposes of the Project.

SECTION 6: Amendment. MPMC § 21.02.070 is amended and restated as follows:
Ҥ 21.02.070 Relationship with the General Plan.

This Title is applicable to all real property within the City, and provides the legislative framework for implementing the goals, policies, plans, principles, and standards of the General Plan.

Notwithstanding anything in the applicable zone, residential and mixed-use development are permitted when allowed by the General Plan, subject to discretionary entitlements that may be required pursuant to this Title. Development standards are those contained in the General Plan and the underlying zoning designation.”

Ordinance No.

SECTION 7: Electronic Signatures. This Ordinance may be executed with electronic signatures in accordance with Government Code § 16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.

SECTION 8: Construction. This Ordinance must be broadly construed to achieve the purposes stated in this Ordinance. It is the City Council’s intent that the provisions of this Ordinance be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Ordinance.

SECTION 9: Summaries of Information. All summaries of information in the findings, which precede this section, are based on the substantial evidence in the record. The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.

SECTION 10: Reliance On Record. Each and every one of the findings and determination in this Resolution are based on the competent and substantial evidence, both oral and written, contained in the entire record relating to the project. The findings and determinations constitute the independent findings and determinations of the City Council in all respects and are fully and completely supported by substantial evidence in the record as a whole.

SECTION 11: Severability. If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Ordinance are severable.

SECTION 12: Preservation. This Resolution does not affect any penalty, forfeiture, or liability incurred before, or prelude prosecution and imposition of penalties for any violation occurring before, this Resolution’s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.

SECTION 13: Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events. In all instances, best efforts have been made to form accurate assumptions. Somewhat related to this are the limitations on the city’s ability to solve what are in effect regional, state, and national problems and issues. The City must work within the political framework within which it exists and with the limitations inherent in that framework.

SECTION 14: Recordation. The City Clerk, or designee, is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Monterey Park’s book of original ordinances; make a note of the passage and adoption in the records of

Ordinance No.
this meeting; and, within 15 days after the passage and adoption of this Ordinance, and cause it to be published or posted in accordance with California law.

SECTION 15: Effective Date. This Ordinance will become effective 30 days after second reading and adoption.

PASSED AND ADOPTED this ____ day of _________, 2025.
____________________________
Vinh T. Ngo, Mayor
ATTEST:
________________________________
Maychelle Yee, City Clerk
APPROVED AS TO FORM:

Karl H. Berger, City Attorney
By:________________________________
Justin A. Tamayo, Assistant City Attorney
Exhibit A – FEIR (SCH No. 2001-01-1074)

Exhibit A
FEIR (SCH No. 2001-01-1074)

Staff Report
June 18, 2025
ATTACHMENT 2
City Council Staff Report,
dated June 4, 2025
(without attachments)

City Council Staff Report
Date: June 4, 2025
Agenda Item Number: 10.A.

To: The Honorable Mayor and City Council
From: Philip Lanzafame, Interim Director of Community Development Subject: Continued public hearing to consider introduction and first reading of an Ordinance amending the Monterey Park Municipal Code (“MPMC”) to implement the General Plan regulating mixed use development and development standards (ZCA 25-02)
Recommendation:

It is recommended that the City Council consider:

1. Opening the public hearing and taking testimonial and documentary evidence;

2. After closing the public hearing and considering the evidence submitted during that public hearing, introducing and waiving first reading of Ordinance No. _____ amending the Monterey Park Municipal Code (“MPMC”) to implement the General Plan regulating mixed use development and development standards; and

3. Taking such additional, related, action that may be desirable.

CEQA (California Environmental Quality Act):

The City reviewed the environmental impacts of the proposed Ordinance pursuant to the California Environmental Quality Act (Public Resources Code §§ 21000, et seq. “CEQA”) and the regulations promulgated thereunder (14 Cal. Code of Regs. §§ 15000, et seq., the “CEQA Guidelines”). Pursuant to CEQA Guidelines §15062, the City Council finds and determines that this Ordinance is not subject to further review under CEQA because the previous CEQA documents adopted by the City Council (see Resolution Nos. 12124 and 2022-R2) adequately analyze the changes contemplated by this Ordinance.

Type of Action (Legislative; Quasi-Judicial; or Advisory):

In considering the Zoning Code Amendment, the City Council acts in its discretionary legislative capacity. The City Council must make the following findings pursuant to MPMC §

21.38.050:
• That the proposed amendment is consistent with the goals, policies, and objectives of the General Plan;
• That the proposed amendment will not adversely affect surrounding properties; and • That the proposed amendment promotes public health, safety, and general welfare and serves the goals and purposes of the Zoning Code.

These findings are included in the attached Ordinance.

Executive Summary:

The City’s General Plan contains the Revised Monterey Park 2040 Land Use Element (“LUE”) and 6th cycle (2021-2029) Housing Element (“HE”) establishing a vision and long-term goals for development, housing, and redevelopment within the City.

The attached Ordinance implements the LUE and HE by amending the MPMC to allow residential and mixed use development in mixed use zones, consistent with the LUE, subject to those development standards in the underlying zone. These changes clarify that the General Plan applies to all properties, takes precedence over conflicting or obsolete regulations, and creates a consistent framework that allows for expanded housing opportunities consistent with the City’s vision and long-term development goals.

This item was originally noticed for public hearing at the May 7, 2025, City Council meeting at which time the Interim Director of Community Development (“Director”) requested a continuance. The City Council continued the public hearing to June 4, 2025. The draft ordinance is attached for the Council’s consideration.

Background:

On November 3, 2020, City voters approved Measure JJ (Ordinance No. 2198) which adopted the Revised LUE and authorized the City Council to take all appropriate action to implement the LUE.

In March 2023, the California State Department of Housing and Community Development (“HCD”), certified the City’s HE. Government Code § 65583(c) requires that cities include programs which set forth a schedule of actions the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the HE.

HE and LUE Programs
The HE and LUE included several programs that reconcile the General Plan and MPMC to encourage the production of a variety of housing types and at various affordability levels, including:

HE Program 7 and LUE Implementation Program 6 require the City to either amend or repeal the North Atlantic, Mid Atlantic and Garvey-Garfield Specific Plans (collectively, the “Specific Plans”) and replace them with zoning designations consistent with the LUE.

HE Program 11 and LUE Implementation Program 1 require the City to resolve inconsistencies between the MPMC and the General Plan related to mixed-use areas.

Currently, the P-D overlay serves as the mechanism through which the MPMC implements the LUE’s mixed-use designation. The HE and LUE, however, contemplate creating a new zoning designation to implement the mixed-use designation. Creating a new zoning designation requires, among other things, the development of standards and procedures, zone changes, and amendments to the adopted zoning map which are anticipated to exceed staff’s capacity and take more time to carefully implement.

Additionally, the detailed Specific Plans require an extensive analysis of land use, circulation, and right-of-way requirements before being amended or repealed. Such analysis requires additional time to ensure that important land use and infrastructure requirements are not inadvertently altered or repealed. To reconcile the time needed for such analysis with the deadlines adopted by the City Council in the HE resulted in the proposed action: a third way to both implement the General Plan and preserve important policy considerations regulated by the existing Specific Plans.

If adopted, the proposed ordinance immediately implements various programs of the HE and LUE while more comprehensive updates are planned and prepared. Specifically, the ordinance amends the MPMC’s general provisions by providing that residential and mixed-use development are permitted when allowed by the LUE designation, subject to the development standards in the underlying zone. The LUE mixed-use designation allows for, both, residential and mixed-use development. Accordingly, the ordinance will allow residential and mixed-use development within the LUE’s mixed-use designation.

Strategic Plan Goal:

The attached ordinance satisfies the 2025-26 Strategic Plan Goal to “Strengthen our local economy and enhance housing opportunities” by achieving the goals and programs set forth in the HE, reducing barriers to encourage housing development, and supporting economic growth in the City.

Legal Notification:

A public hearing was scheduled for May 7, 2025, and a legal notice was duly posted at City Hall, Monterey Park Bruggemeyer Library, and Langley Center and published in Monterey Park Press on April 17, 2025, with affidavits of posting on file. Additionally, 358 notices were mailed to affected property owners. At the May 7, 2025 meeting, the City Council continued the hearing to June 4, 2025.

Fiscal Impact:

There are no identifiable fiscal impacts associated with adopting the Ordinance itself (other than costs associated with codifying the Ordinance).

Attachments:

1. Draft Ordinance

2. Notice of Determination

City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.F.

To: The Honorable Mayor and City Council
From: Scott Haberle, Interim Fire Chief
Rebecca Bojorquez, Principal Management Analyst
Subject: Urban Area Security Initiative - Award of Contract to Richard Beckman, of Beckman Educational Consultants, for the Regional Training Group ("RTG") Fire Service Training Officer
Recommendation:

It is recommended that the City Council consider:

1. Authorizing the City Manager to execute a one year agreement in the amount of $150,000, with the option to extend for an additional two years, with Richard Beckman of Beckman Educational Consultants, LLC., in a form approved by the City Attorney, to provide training and further develop response readiness of Los Angeles area fire agencies for incidents of national significance for an amount not to exceed $450,000;

2. Authorizing the City Manager, or designee, to appropriate $150,000 in grant funding to the FY 2025-2026 budget; and

3. Taking such additional, related, action that may be desirable.

Executive Summary:

The City of Los Angeles is a Subgrantee of the Homeland Security Program – Urban Area Security Initiative ("UASI") that is provided by the U.S. Department of Homeland Security.

Pursuant to the subrecipient agreement, the City of Los Angeles may enter into an agreement with the City of Monterey Park. A portion of the grant funds awarded to the City of Monterey Park will include salaries for a full-time Regional Training Group ("RTG") Fire Training Officer position, for the Los Angeles Area Fire Chiefs Association ("LAAFCA").

In accordance with the MPMC Chapter 3.20, the Interim Fire Chief ("Chief') completed a bidding process to identify a viable candidate for the RTG Fire Training Officer position. The position was advertised on the City’s website and through various websites related to firefighting. Three candidates submitted proposals and interviews were conducted to verify each candidate’s qualifications. The panel, comprised of current and retired fire chiefs, confirmed that Richard Beckman of Beckman Educational Consultants, LLC is qualified for the position. Mr. Beckman has over 40 years of experience in the fire service, with the last

seventeen years of his career at the City of San Gabriel, where he served as Battalion Chief and Deputy Chief. Additionally, he has Bachelor’s in Fire Protection Administration and Technology and has served as an instructor at Rio Hondo College for over 20 years. Mr.

Beckman's work experience coupled with his education make him a prime candidate for the position.

The Chief recommends City Council authorize the City Manager to execute an agreement, in a form approved by the City Attorney with Richard Beckman of Beckman Educational Consultants, LLC., for an amount to not exceed $450,000. The current grant-funded position will span over three grant award years. The contract is contingent on the award of funds from the City of Los Angeles.

Background:

Monterey Park Fire Department ("Department") must keep pace with public safety needs in the city and region. Pursuant to the subrecipient agreement, “this financial assistance is being provided to the Subrecipient in order to address the unique equipment, training, organization, exercise and planning needs of the Subrecipient, and to assist the Subrecipient in building effective prevention and protection capabilities to prevent, response to, and recover from threats or acts of terrorism.” The Department was awarded UASI grants in the past and seeks City Council approval of the one-year contract in an amount of $150,000, with the option to extend services (for two additional years) for a total contract award of $450,000 to Richard Beckman of Beckman Educational Consultants.

Strategic Plan Goal:

This item being brought before Council meets the 2025-26 City Council Strategic Plan goal of ensuring public safety with a modernized and community-oriented approach by improving public safety training.

Fiscal Impact:

The City of Monterey Park will receive a total of $450,000 over three grant award years (2024- 2026) from the City of Los Angeles via the Urban Area Security Initiative. These grant funds are reserved for the RTG Fire Training Officer position. The funding for this position became available after the budget had been initially proposed, and as such, the Chief is requesting a budget appropriation of $150,000 of grant funds for the Fiscal Year 2025-2026.

Attachments:

None

City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.G.

To: The Honorable Mayor and City Council
From: Shawn Igoe, Public Works Director
Subject: SB1 Funding - Annual Adoption of Projects
Recommendation:

It is recommended that the City Council consider:

1. Adopting a resolution identifying a street maintenance project to be included in the FY 2025-26 and budget and funded with Road Maintenance and Rehabilitation Act (“RMRA”) funds, in a form approved by the City Attorney; and

2. Taking such additional, related, action that may be desirable.

Executive Summary:

Senate Bill 1 (2017) (“SB1”), the Road Repair and Accountability Act of 2017, addresses the significant multi-modal transportation funding shortfall statewide. As of November 2017, portions of SB1 revenues are deposited into a Road Maintenance and Rehabilitation Account (“RMRA”) and made available to eligible cities and counties, which must comply with RMRA funding requirements as determined by the California Transportation Commission (“CTC”).

RMRA funds made available for the Local Streets and Roads Funding Program are prioritized for expenditure on basic road maintenance and rehabilitation projects, and on critical safety projects. The CTC provided a number of example projects and uses for RMRA funding that include, without limitation: road maintenance and rehabilitation, safety projects, railroad grade separations, complete streets components (including active transportation purposes, pedestrian and bicycle safety projects, transit facilities, and drainage and stormwater capture projects in conjunction with any other allowable project), and traffic control devices.

Background:

Pursuant to the most recent State estimates for FY 2025-26, the City could receive $1,602,727 in RMRA funds for its project list. Eligible to receive these funds requires that agencies submit a proposed project list to the CTC by July 1, 2025, along with budget support documentation including the meeting minutes and/or resolution of the City Council committing to the project list. This year, project lists are due July 1, 2025.

The proposed resolution and project list includes the resurfacing and rehabilitation of various local streets as identified in the City’s Pavement Management Study. The Public Works Director (“Director”) reviewed the study and selected those street segments that would most benefit from a rehabilitation project based on their current conditions. If adopted by the Council and timely submitted to CTC, the Director may begin designing the improvements which are anticipated to be completed by Spring 2026. The proposed rehabilitation work consists primarily of grinding and overlay of the roadway surface with asphalt concrete and asphalt rubber hot mix.

Strategic Plan Goal:

This proposed resolution meets the City’s goal to maintain, build, and modernize infrastructure and facilities to support the current and future needs of our city and community.

Fiscal Impact:

The City’s FY 2025-26 Preliminary Budget includes Capital Improvement Project (CIP) No. 96057 – Pavement Improvements partially funded by $1,602,727 in RMRA Funds.

Attachments:

1. Resolution

Staff Report
June 18, 2025
ATTACHMENT 1
Resolution

RESOLUTION NO.

A RESOLUTION IDENTIFYING A STREET MAINTENANCE PROJECT
LIST TO BE INCLUDED IN THE FY 2025-26 BUDGET AND FUNDED BY SENATE BILL 1: ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017 THE CITY COUNCIL RESOLVES AS FOLLOWS:

SECTION 1: The City Council finds as follows:

A. The Road Repair and Accountability Act of 2017 was adopted to address the significant multi-modal transportation funding shortfalls statewide.

B. The Act includes accountability and transparency provisions that will ensure the residents of the City are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year.

C. The City must adopt, by resolution, a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (“RMRA”), created by the Act, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement.

D. The City will receive an estimated $1,602,727 in RMRA funding in Fiscal Year 2025-26.

E. This is the eighth year in which the City is receiving such funding and will enable the City to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without the Act.

F. The City used a Pavement Management Program to help develop the RMRA project list to ensure revenues are being used on the most high-priority and costeffective projects that also meet the communities priorities for transportation investment.

G. The funding from the Act will help the City maintain and rehabilitate its streets throughout the City this year and several similar projects into the future. This revenue will help the City increase the overall quality of our road system over the next decade.

H. Cities and counties own and operate more than 81% of streets and roads in California, and from the moment we open our front door to drive to work, bike to school, or walk to the bus station, people are dependent upon a safe, reliable local transportation network.

Resolution No.

I. The project list and overall investment in the City’s local streets and roads infrastructure with a focus on basic maintenance and safety and investing in complete streets infrastructure will have significant positive co-benefits statewide.

SECTION 2: The Adopted Budget for fiscal year 2025-2026 will incorporate the following project planned to be funded with Road Maintenance and Rehabilitation Account revenues:

Project: Pavement Improvements
Description: Cold mill asphalt concrete pavement and construct conventional and rubberized asphalt concrete overlay on various local streets. Work includes but is not limited to asphalt grind and overlay, and striping.

Location: South Garfield Avenue – Coral View Street to East Graves Avenue, Harding Avenue – Atlantic Boulevard to De
Lafuente Street, Atlantic Boulevard – West Newmark
Avenue to Harding Avenue
Estimated Useful Life: 15-20 years
Est. Year of Construction/
Completion: Fiscal Year 2025-2026
SECTION 3. Severability. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.

SECTION 4. Reliance On Record. Each and every one of the findings and determinations in this Resolution are based on the competent and substantial evidence, both oral and written, contained in the entire record relating to the project. The findings and determinations constitute the independent findings and determinations of the City Council in all respects and are fully and completely supported by substantial evidence in the record as a whole.

SECTION 5. Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events. In all instances, best efforts were made to form accurate assumptions. Somewhat related to this are the limitations on the City’s ability to solve what are in effect regional, state, and

Resolution No.

national problems and issues. The City must work within the political framework within which it exists and with the limitations inherent in that framework.

SECTION 6. Summaries of Information. All summaries of information in the findings, which precede this section, are based on the substantial evidence in the record. The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.

SECTION 7. Construction. This Resolution must be broadly construed in order to achieve the purposes stated in this Resolution. It is the City Council’s intent that the provisions of this Resolution be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Resolution.

SECTION 8. Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.

SECTION 9. The City Clerk is directed to certify the adoption of this Resolution.

SECTION 10. The Mayor, or presiding officer, is authorized to affix a signature to this Resolution signifying its adoption by the City Council of the City of Monterey Park and the City Clerk, or her duly appointed deputy, is directed to attest.

SECTION 11. This Resolution takes effect immediately upon its adoption.

Resolution No.

PASSED AND ADOPTED this ___ day of ______________, 2025. ________________________________
Vinh T. Ngo, Mayor
Attest:
__________________________
Maychelle Yee, City Clerk
Approved as to Form:

Karl H. Berger, City Attorney
By:__________________________
Justin A. Tamayo, Assistant City Attorney

City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.H.

To: The Honorable Mayor and City Council
From: Shawn Igoe, Public Works Director
Subject: Amendment to various Public Works Agreements for Fiscal Year 2025-26 Recommendation:

It is recommended that the City Council consider:

1. Authorizing the City Manager to execute amendments to various Public Works agreements for Fiscal Year 2025-26, in a form approved by the City Attorney; and

2. Taking such additional, related, action that may be desirable.

Executive Summary:

The Public Works department is responsible for providing and maintaining the City’s infrastructure to ensure the health, safety, and welfare of the City’s residents and visitors. To address the Department’s various needs, the City may seek contracted services with vendors for Public Works related services. It is recommended that City Council consider approving annual extensions for City agreements with vendors who are currently providing services to the City. This would ensure continuity of services for fiscal year 2025-26.

Background:

The Public Works department is composed of several divisions including Parks, Engineering, Streets, Facilities, Fleet, and Water. Staff within these divisions perform a large majority of the City’s maintenance operations. However, some services may not be performed in-house by City employees due to limited staffing resources, expertise, and/or costs. To supplement employee efforts, the City may seek contracted services with various vendors for Public Works related services. Contracted services must be procured through the City’s purchasing policies and Monterey Park Municipal Code (“MPMC”) 3.20. Pursuant to MPMC 3.20.070, contracts with a value of $60,000 or more require City Council approval. In compliance with this requirement, the Public Works Director recommends City Council consider agreement extensions with vendors listed in Attachment 1 for Public Works related services. The total contract amount for the proposed extensions exceeds $60,000 and therefore requires Council approval.

The proposed action is presented as an efficient administrative process for annual extensions

for City agreements with vendors who are currently providing satisfactory services to the City.

Rather than submitting them individually on future agendas, they are included in this report for approval.

The following is a brief explanation of each agreement for Public Works related services.

Additional information, including annual costs, and total contract amounts are included in Attachment 1.

Barberio Enterprises, Inc. DBA West Service Co. (Agreement No. 2443-A) - Westco Service Co. provides maintenance services on the City’s Heating Ventilation and Cooling (“HVAC”) systems at various City-owned facilities.

Bear Electrical Solutions, Inc. (Agreement No. 2183-A) - Bear Electrical Solutions, Inc. provides the City with traffic signal and street lighting maintenance and response services.

General Pump Company, Inc. (Agreement No. 2340-AB) - General Pump provides maintenance services for the City's wells and booster pumps.

Golden Bell Products, Inc. (Agreement No. 2431-AC) - Golden Bell Products, Inc. provides City-wide application of insect pesticide for sewer roach control in sanitary manholes.

Harold's Key Shop, Inc. (Agreement No. 2370-AB) - Harold's Key Shop, Inc. provides commercial locksmith services for all City-owned facilities.

Mariposa Landscape, Inc. (Agreement No2136-A) - Mariposa Landscape, Inc. provides the City with median maintenance, weed abatement at water facilities, and weekend litter control services at City parks.

Maven Roofing (Agreement No. 2344-AA) - Maven Roofing provides the City with roof maintenance services at various City-owned facilities.

Priority Landscape Services, LLC (Agreement No. 2368-AA) - Priority Landscape Services, LLC provides the City with landscaping services for the common landscape areas located north of the Luminarias Restaurant and the slope located on the far East side of the MPK Golf Course.

Quinn Power Systems (Agreement No. 2468-A) - Quinn Power Systems provides the City with heavy equipment maintenance for the Fleet Division and routine inspections and servicing of generators for the Facilities Division.

SC Commercial LLC DBA SC Fuels (Agreement No. 1968-A) - The City purchases gasoline, diesel, oil, and lubricants for its fleet from Southern Counties Oil Co., DBA SC Fuels. The amendment is exempt from bidding pursuant to Monterey Park Municipal Code (“MPMC”)

3.20.050(1)-(2), and City Council Resolution No. 2025-R3.

Stetson Engineering Services (Agreement No. 2315-A) - Stetson provides professional engineering services to the Water Division to comply with National Pollution Discharge Elimination System (“NPDES”) permits, Annual Water Assessment Reporting, Water Quality Reporting and other DDW reports.

Tank Specialties DBA Tank Specialists of Southern California (Agreement No. 1983-AB) - Tank Specialists provides a full range of maintenance services, including, without limitation, regular inspection, testing, and monitoring of the City's waste oil tanks and fuel system and the City Yard and Fire Station 61 locations.

Unify Staffing, Inc. (Agreement No. 2373-AA) - Unify Staffing provides the City with staff augmentation services for the Parks Maintenance Division. Temporary staff augmentation services are needed as the City continues to recruit for vacant positions within the Parks Maintenance Division.

Ware Disposal Inc. (Agreement No. 2435-AA) - Ware Disposal provides trash collection services for all City facilities and public right of ways. Ware Disposal is an approved franchisee for commercial solid waste services. The proposed Amendment extends services for one additional year.

The listed vendors have provided satisfactory services to the City at low and/or fixed-term costs. The City will be completing formal bidding process for some services, as listed in Attachment 1, for FY 26-27 agreements.

Strategic Plan Goal:

The proposed contract amendments meet the City’s goal to maintain fiscal stability of our city’s financial resources as the proposed extensions allow for various services to continue at low competitive costs. Additionally, they meet the goal to maintain, build and modernize infrastructure and facilities to support the current and future needs of our city and community as the services provided are for Public Works related services related to the maintenance operations for water, street, sewer, parks, fleet, and facilities.

Fiscal Impact:

The costs for services provided by each respective vendor are included in the FY 2025-26 budget and are funded by various funding sources.

Attachments:

1. List of Proposed Agreements

Staff Report
June 18, 2025
ATTACHMENT 1
List of Proposed Agreements

Vendor/Contractor Service Provided Term
FY25-26 Annual Amount
(Not-to-exceed)
Total Contract Amount
(>$60,000)
Barberio Enterprises, Inc. DBA
West Service Co.

Westco Service Co. provides on-call maintenance services on the City’s Heating Ventilation and Cooling (“HVAC”) systems at various City-owned facilities. The proposed First Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $120,000. Westco has committed to honoring their current labor rates through end of fiscal year 2026. A budget of $60,000 for HVAC repairs and oncall maintenance services is included in the FY2025-2026 preliminary budget. July 1, 2025 - June 30, 2026 60,000.00 $ $ 120,000.00 Bear Electrical Solutions, Inc.

Bear Electrical Solutions, Inc. provides the City with traffic signal and street lighting maintenance and response services. The proposed Third Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $1,139,000. Bear Electrical Solutions' rates include a CPI increase of 3.42% due to an increase in wages for urban and clerical workers through FY2025-2026. A budget of $212,961 for traffic signal maintenance and response services is included in the FY2025- 2026 preliminary budget. City staff intends on seeking proposals for a traffic signal maintenance and response services contract for FY 26-27. July 1, 2025 - June 30, 2026 212,961.00 $ $ 1,139,000.00 General Pump Company, Inc.

General Pump provides on-call maintenance services for the City's wells and booster pumps. On July 6, 2022 City Council awarded a 3-year contract to General Pump following a competitive bid process. The proposed Amendment extends services for one additional year for an annual cost of $200,000. November 1, 2025 - Oct 31, 2026 200,000.00 $ $ 600,000.00 Golden Bell Products, Inc.

Golden Bell Products, Inc. provides City-wide application of pesticide for sewer roach control in sanitary manholes. Manholes were treated bi-annually in previous years. The service is now scheduled annually. The proposed First Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $87,000. A budget of $30,900 for the services is included in the FY2025-2026 preliminary budget. July 1, 2025 - June 30, 2026 30,900.00 $ $ 87,000.00 Harold's Key Shop, Inc.

Harold's Key Shop, Inc. provides commercial locksmith on-call services for all City-owned facilities. The proposed Second Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $85,000. An increase in services in FY25-26 is anticipated as a result of recently completed City re-key projects. Per the vendor, there will not be in increase in their service rates for FY25-26. A budget of $25,385 for commercial locksmith services is included in the FY2025-2026 preliminary budget. July 1, 2025 - June 30, 2026 25,385.00 $ $ 85,000.00 Mariposa Landscape, Inc.

Mariposa Landscape, Inc. provides the City with median maintenance, weed abatement at water facilities, and weekend litter control services at City parks. The proposed Sixth Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $1,405,134. The contract amount for FY25-26 includes a proposed annual rate adjustment of 3% for CPI effective July 1, 2025. A budget of $315,000 for the services is included in the FY2025-2026 preliminary budget. City staff is currently evaluating landscaping services and intends on completing formal bidding process for services starting in FY 26-27. July 1, 2025 - June 30, 2026 315,000.00 $ $ 1,405,134.00

Vendor/Contractor Service Provided Term
FY25-26 Annual Amount
(Not-to-exceed)
Total Contract Amount
(>$60,000)
Maven Roofing
Maven Roofing provides the City with roof on-call maintenance services at various Cityowned facilities. The proposed Third Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $85,000. Although a decrease in the service is anticipated due to completed CIP's for roof repairs at various Cityowned facilities, an agreement with a roofing repair contractor is necessary to support facilities maintenance staff for unanticipated roof repairs through FY25-26. Maven Roofing proposes an increase to their rates due to the rise in the cost of wages and material in January 2026. City staff intends on seeking proposals for an on-call roof repair services contract for FY26-27. A budget of $35,000 for roof repairs is included in the FY2025-2026 preliminary budget. July 1, 2025 - June 30, 2026 35,000.00 $ $ 85,000.00 Priority Landscape Services,
LLC
Priority Landscape Services, LLC provides the City with landscaping services for the common landscape areas located North of the Luminarias Restaurant and the slope located on the far East side of the MPK Golf Course. The proposed Third Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $221,854. A budget of $57,000 for the services is included in the FY2025-2026 preliminary budget. City staff is currently evaluating landscaping services and intends on seeking proposals for a new landscaping services contract for FY 26-27. July 1, 2025 - June 30, 2026 57,000.00 $ $ 221,854.00 Quinn Power Systems
Quinn Power Systems provides the City with heavy equipment repair for the Fleet Division and routine inspections and servicing of generators for the Facilities Division. The proposed First Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $100,000. Quinn Power Systems' rates include an increase of 3.92% due to anticipated increases in labor costs through FY2025-2026. A budget of $60,000 for heavy equipment and generator maintenance is included in the FY2025-2026 preliminary budget. July 1, 2025 - June 30, 2026 60,000.00 $ $ 100,000.00 SC Commercial LLC DBA SC
Fuels
The City purchases gasoline, diesel, oil, and lubricants for its fleet from Southern Counties Oil Co., DBA SC Fuels. The proposed Sixth Amendment extends services for one additional year through June 30, 2026 and increases the annual amount to $495,000 due to changes in the fuel market, leading to increases in fuel costs. Staff estimates a cost of $37,500 per month for fuel and $3,750 for oil and lubricants. SC Fuels will not be increasing their rates through FY2025-2026. A budget of $495,000 for the purchase of fuel, oil, and lubricants is included in the FY2025-2026 preliminary budget. City staff intends completing the competitive bid process for fuel delivery services in FY 26-27. July 1, 2025 - June 30, 2026 495,000.00 $ $ 3,100,000.00 Stetson Engineering Services
Stetson provides professional engineering services to the Water Division to comply with National Pollution Discharge Elimination System (“NPDES”) permits, Annual Water Assessment Reporting, Water Quality Reporting and other DDW reports. July 1, 2025 - June 30, 2026 80,000.00 $ $ 320,000.00

Vendor/Contractor Service Provided Term
FY25-26 Annual Amount
(Not-to-exceed)
Total Contract Amount
(>$60,000)
Tank Specialties DBA Tank
Specialists of Southern
California
Tank Specialists provides a full range of maintenance services, including, without limitation, regular inspection, testing, and monitoring of the City's waste oil tanks and fuel system and the City Yard and Fire Station 61 locations. The proposed 4th Amendment extends services for one additional year through June 30, 2026 and increases the total contract amount to $111,000. The contract amount for FY25-26 includes a proposed annual rate adjustment of

3.4% for CPI effective July 1, 2025 A budget of $30,000 for the services is included in the FY2025-2026 preliminary budget. City staff will be re-evaluating the departments storage tank and fuel system needs after the completion of the installation of new waste oil storage tanks and fuel management system and fuel delivery system upgrades. July 1, 2025 - June 30, 2026 30,000.00 $ $ 126,000.00 Unify Staffing, Inc.

Unify Staffing provides the City with staff augmentation services for the Parks Maintenance Division. Temporary staff augmentation services are needed as the City continues to recruit for vacant positions within the Parks Maintenance Division. The proposed Third Amendment increases the total contract amount to $186,080. The City will use up to $80,000 from salary savings from Full-time Parks vacancies to cover the costs of the Amendment. No change to term, expires 6/30/28 80,000.00 $ $ 186,080.00 Ware Disposal Inc.

Ware Disposal provides trash collection services for all City facilities and public right of ways. Ware Disposal is an approved franchisee for commercial solid waste services. The proposed Amendment extends services for one additional year through August 31, 2026. It also increases the annual amount due to an increase in service level and collection needs and annual rate adjustments effective September 1, 2025. September 1, 2025 - August 31, 2026 296,000.00 $ $ 490,000.00

City Council Staff Report
Date: June 18, 2025
Agenda Item Number: 9.I.

To: The Honorable Mayor and City Council
From: Shawn Igoe, Public Works Director
Subject: Award of Contract to Ferguson Enterprises for Advanced Metering Infrastructure Project
Recommendation:

It is recommended that the City Council consider:

1. Adopting a Resolution authorizing the City Manager to execute a design/build agreement, in a form approved by the City Attorney, with Ferguson Enterprises, LLC dba Ferguson Waterworks in the amount of $9,826,029 for the Advanced Metering Infrastructure (“AMI”) Project;

2. Authorizing the Director of Public Works to approve change orders and contingency up to $453,149, or 5% of the contract amount, for a total project cost of $9,826,029; and

3. Taking such additional, related, action that may be desirable.

CEQA (California Environmental Quality Act):

The proposed project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption (Existing Facilities). The Project results in minor alterations to existing public facilities involving no significant expansion of the existing use. The Project is not anticipated to have any significant impacts with regard to traffic, noise, air quality or water quality.

Executive Summary:

In July 2024, the City contracted with MeterSYS, LLC, a consulting firm specializing in the planning and implementation of Advanced Metering Infrastructure (“AMI”) solutions for public utilities, to support staff with the implementation of the AMI project. AMI is an integrated system that enables two-way communication between utilities (such as water) and customers through a network of smart meters, communication channels, and data management systems.

This AMI is listed as Capital Improvement Project (“CIP”) No. 99024 – 2024-25 Water Meter Replacement Project. It will replace approximately 13,500 existing water meters and associated infrastructure, improving meter accuracy, reducing water loss, and enhancing customer service through real-time usage monitoring. MeterSYS developed the AMI specifications for the Request for Proposals (“RFP”) and assisted staff with review of proposal and the vendor selection process.

In January, the City Council adopted Resolution No. 2025-R3 which declared a local emergency (based upon the fire storm events during that month) and authorized the City Manager and Public Works Director to take all (and immediate) actions needed to secure contractors to construct the City’s Capital Improvement Plan included with that Resolution. To help ensure the City received competitive pricing while also delivering the AMI expeditiously, the Public Works Director utilized the design/build contracting process authorized by Public Contract Code (“PCC”) § 22162. Accordingly, the City issued RFPs and received proposals from Ferguson Waterworks (Neptune), Core and Main (Kamstrup), and Aqua-Metric (Sensus) to complete the AMI CIP. The design/build process does not require the City to award a contract to the lowest bidder; it may select the contractor with the best proposal to complete a project.

After receiving these proposals, the Public Works Director utilized a competitive procedure to determine which one was best for the City. Following that process, the Public Works Director determined Ferguson is the recommended contractor.

Background:

The City is implementing a comprehensive modernization of its water meter system through the design and construction of a citywide AMI project. Currently, the City utilizes a mix of Automated Meter Reading (AMR) and manual reading for tracking utility use. The AMR system is currently a Metron-Farnier product. While the main goal of AMR is to eliminate the need for manual meter readings (City workers can drive by sites to collect data remotely), the MetronFarnier infrastructure (installed in 2016) is proving difficult to operate and maintain: its wireless communication is spotty and infrastructure replacement costs are high (the City is generally unable to repair existing units; Metron-Farnier requires installation of all new units – which is a higher cost).

This AMI project will replace approximately 13,400 existing water meters with state-of-the-art Neptune R900® meters and associated infrastructure, improving meter accuracy, reducing water loss, and enhancing customer service through real-time usage monitoring. The meters proposed within the project scope of work are of a solid-state design utilizing ultrasonic technology. This metering technology provides greater measuring accuracy and supports water conservation through extremely low flow detection.

Resolution No. 2025-R3 authorized the City Manager and Public Works Director to secure contractors to complete the Capital Improvement Plan approved by the City Council. The City Council’s expressed intent was to expedite all CIPs to avoid increased materials and labor costs that were expected to occur following the Pacific Palisades and Eaton fires, along with economic uncertainty resulting from executive decisions at the federal level. These concerns are proving to be valid as construction costs continue to increase (since January, costs have increased approximately 2.8% in Los Angeles County; constructions costs are expected to rise

22.6% statewide in 2025).

For the AMI CIP, the Public Works Director utilized the design/build procedures authorized by the PCC. This consisted of first issuing an RFP to qualified companies and then evaluating submitted proposals. Here, Ferguson Waterworks (Neptune), Core and Main (Kamstrup), and

Aqua-Metric (Sensus) submitted proposals. After receiving these proposals, the Public Works director utilized a competitive process to identify which company would deliver the best AMI CIP. This process included using a detailed evaluation form for each vendor that included reference checks, company history, capability to meet the project schedule, technical compliance, qualifications of the team, and costs proposal. Additionally, each vendor was interviewed by a panel of City representatives, including the Director of Public Works, Water Utility Manager, Assistant Water Utility Manager, and Customer Service staff. Following this process, the Public Works Director identified Ferguson’s proposal as the best for completing the AMI CIP.

The recommended contractor, Ferguson, brings extensive AMI experience and partnerships with Professional Meters Inc. (installation) and JM Electrical Services (network infrastructure).

Its approach emphasizes rapid deployment, secure data integration, and community engagement to ensure a smooth transition for the community and utility staff.

The AMI project aligns with the City's goals to improve water resource management, enhance billing accuracy, and provide customers with tools to better understand and control their water usage. Once an agreement is executed, Ferguson will begin the procurement and implementation process followed by pre-construction site walks. Testing of the network performance and meter connectivity will be performed throughout all stages of the project in order to ensure that all functional requirements are met before advancing to each successive phase of installation. The project is expected to take 12 months from authorization to proceed to project closeout.

The AMI project contract involves design and construction of a new meter reading system including water meters, transmitters, network collectors/gateways, and a head-end system/meter data management system (HES/MDMS). City staff and consultants from MeterSYS reviewed proposals beginning March 11, 2025, and completed review of the proposals following vendor presentations during the week of April 21, 2025. The RFP provided for the evaluation of proposals utilizing a scoring and ranking process based on the following criteria:

Category Weight
Company history, experience and references in market and proposed solution
25%
Demonstrated ability to meet project schedule 25%
Proposed scope of work and technical compliance and
requirements
20%
Qualifications of proposed team 15%
Cost proposal 15%
A summary of the proposals ranking and pricing is as follows:

Rank Score Proposer Base Bid Amount
1 91 Ferguson (Neptune) $8,841,519
2 80 Core and Main (Kamstrup) $9,826,868
3 65 Aqua-Metric (Sensus) $13,290,418

Based on the objective solicitation and evaluation process, Ferguson received the highest score among the three proposers and is therefore recommended for a contract with the City to initiate the necessary metering system upgrades and modernization. Ferguson’s base bid is also the lowest from the three proposals received.

The following table outlines the anticipated costs:

Vendor Description Cost
Ferguson Enterprises AMI Equipment, Installation, and Customer Portal $9,062,978 PW Contract Contingency 5% $453,149
Ferguson Enterprises 5% Materials Surcharge $279,902
Data West Bill Master Integration with City billing $30,000 TOTAL $9,826,029
The project is expected to deliver long-term operational and financial benefits, including reductions in manual meter reading labor, improved customer service, and a potential increase in billed revenue due to more accurate metering.

Strategic Plan Goal:

This Project meets the City’s goal to maintain, build and modernize infrastructure and facilities to support the current and future needs of our city and community as it aims to replace old water meters and bring our water infrastructure up to current standards. Additionally, this project is part of the City’s water bond-funded projects intended to enhance water infrastructure in the City.

Fiscal Impact:

The total estimated cost for the citywide AMI Project is $9,826,209, which includes AMI equipment, installation, customer engagement portal services, CIS integration, project management oversight, and a 5% project contingency. In addition, the total project cost includes a 5% surcharge on materials due to the global trade surcharge effective June 1, 2025.

Funds for this project are included in the adopted FY 2024–25 Capital Improvement Program (4085005-5501-99024). No additional appropriations are required at this time.

Attachments:

1. Resolution for Design/Build Agreement

2. Ferguson (Neptune) Bid

3. Core & Main (Kamstrup) Bid

4. Aqua-Metric (Sensus) Bid

Staff Report
June 18, 2025
ATTACHMENT 1
Resolution for Design/Build Agreement

RESOLUTION NO. XXX

A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A

DESIGN/BUILD PUBLIC WORKS AGREEMENT WITH FERGUSON

ENTERPRISES, LLC DBA FERGUSON WATERWORKS FOR THE

ADVANCED METERING INFRASTRUCTURE PROJECT
The City Council does resolve as follows:

SECTION 1: Recitals. The City Council finds and declares as follows:

A. On January 21, 2025, the City Council adopted Resolution No. 2025- R3. Section 3(D) of that Resolution authorizes the City Manager to award and execute all agreements required to implement the City’s capital improvement plan (“CIP”) without additional City Council approval.

B. To implement Resolution No. 2025-R3 and expedite the delivery of a CIP project identified as the “Advanced Metering Infrastructure Project” (the “Project”), the City Engineer exercised the authority granted by Section 2 of Resolution No. 2023-R52 (adopted June 21, 2023) to approve specifications developed by MeterSYS, LLC (in accordance with Government Code § 830.6).

C. Thereafter, on March 11, 2025, the City Manager authorized the Public Works Director to issue a request for proposals (“RFP”) pursuant to Public Contract Code (“PCC”) § 22162 to solicit proposals for the AMI.

PCC § 22162 allows the City to utilize a design/build procurement process for the Project which allows the City Council to determine the contractor based upon the best combination of price, project design, and contractor qualifications.

D. The Project will replace approximately 13,400 existing water meters with state-of-the-art Neptune R900® meters and associated infrastructure, improving meter accuracy, reducing water loss, and enhancing customer service through real-time usage monitoring. The meters proposed within the project scope of work are of a solid-state design utilizing ultrasonic technology. This metering technology provides greater measuring accuracy and supports water conservation through extremely low flow detection.

E. All requirements of the PCC regarding design/build bids were identified in the City’s solicitation including, without limitation, mandatory registration with the Department of Industrial Relations (“DIR”) pursuant to Labor Code §§ 1725.5 and 1771.4.

F. While the City Manager is authorized to directly negotiate for the Project pursuant to authority granted by Resolution No. 25-R3, the City

nevertheless utilized PCC § 22162 to ensure that the proposals submitted in response to the City’s RFP were competitive.

G. The purpose of competitive bidding requirements is to guard against favoritism, improvidence, extravagance, fraud and corruption, to prevent waste of public funds, and to obtain the best economic result for the public.

H. The facts and circumstances of this Project demonstrate an alternative procurement system is undesirable and would not produce an advantage for the following reasons:

1. The City already received competitive proposals in response to a RFP regarding the Project;

2. Pursuant to PCC § 22162, the City Council may award based upon best value;

3. Ferguson Enterprises, LLC is registered with DIR, has the required insurance and bonding, is properly licensed, and is prepared to execute the City’s design/build agreement for the Project.

I. In adopting this Resolution, the City Council takes note of the analysis and decisions set forth in Graydon v. Pasadena Redevelopment Agency (1980) 104 Cal.App.3d 631; Hodgeman v. City of San Diego (1942) 53 Cal. App.2nd 610; Orange County Water Dist. v. Bennett (1958) 156 Cal. App.2nd 745; and Los Angeles G&E Corp. v. City of Los Angeles (1922) 188 Cal. 307.

SECTION 2: Environmental Assessment. The Project is categorically exempt from the requirements of the California Environmental Quality Act (CEQA) pursuant to 14 California Code of Regulations § 15301 as a Class 1 categorical exemption (Existing Facilities). The Project results in minor alterations to existing public facilities involving no significant expansion of the existing use. The project is not anticipated to have any significant impacts with regard to traffic, noise, air quality, or water quality. There are adequate utilities and public services to serve the project.

SECTION 3: Design Immunity.

A. The design and plans for the Project were reviewed by the City Engineer and were determined to comply with engineering and industry standards.

B. The design approval set forth in this Resolution occurred before actual work on the Project construction commenced.

C. The approval granted by this Resolution conforms with the City’s

General Plan.

D. The approval and authorization granted by this Resolution is intended to avail the City of the immunities set forth in Government Code § 830.6.

SECTION 4: Actions; Authorizations. The City Council takes the following actions:

A. The City Manager is authorized to execute a design/build public works agreement with Ferguson Enterprises for completion of the Project in a form approved by the City Attorney.

B. The City Manager, or designee, is authorized to execute change orders – in accordance with the terms of the agreement – as necessary to complete the Project.

SECTION 5: Conflict of Interest. The Design-Build Conflict of Interest attached as Exhibit “A,” and incorporated by reference, is adopted for all design-build agreements executed by the City of Monterey Park in accordance with PCC § 22162, i.e., this Resolution’s adoption of the Design-Build Conflict of Interest may be utilized for future design/build projects without the need for additional City Council action. Accordingly, this Resolution may be referenced as the “Monterey Park Design-Build Conflict of Interest Policy.”
SECTION 6: Preservation. This resolution does not affect any penalty, forfeiture, or liability incurred before, or preclude prosecution and imposition of penalties for any violation occurring before, this Resolution’s effective date. Any such amended part will remain in full force and effect for sustaining action or prosecuting violations occurring before the effective date of this Resolution.

SECTION 7: Severability. If any part of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or applications and, to this end, the provisions of this Resolution are severable.

SECTION 8: Reliance On Record. Each and every one of the findings and determinations in this Resolution are based on the competent and substantial evidence, both oral and written, contained in the entire record relating to the project. The findings and determinations constitute the independent findings and determinations of the City Council in all respects and are fully and completely supported by substantial evidence in the record as a whole.

SECTION 9: Limitations. The City Council’s analysis and evaluation of the project is based on the best information currently available. It is inevitable that in evaluating a project that absolute and perfect knowledge of all possible aspects of the project will not exist. One of the major limitations on analysis of the project is the City Council’s lack of knowledge of future events. In all instances, best efforts were made to form accurate assumptions. Somewhat related to this are the limitations on the City’s ability to solve what are in effect regional, state, and national problems and issues. The City must work

within the political framework within which it exists and with the limitations inherent in that framework.

SECTION 10: Summaries of Information. All summaries of information in the findings, which precede this section, are based on the substantial evidence in the record. The absence of any particular fact from any such summary is not an indication that a particular finding is not based in part on that fact.

SECTION 11: Construction. This Resolution must be broadly construed in order to achieve the purposes stated in this Resolution. It is the City Council’s intent that the provisions of this Resolution be interpreted or implemented by the City and others in a manner that facilitates the purposes set forth in this Resolution.

SECTION 12: Electronic Signatures. This Resolution may be executed with electronic signatures in accordance with Government Code §16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.

SECTION 13: This Resolution will become effective immediately upon adoption.

PASSED, APPROVED, AND ADOPTED this 18th day of June, 2025. ____________________________________
Vinh T. Ngo, Mayor
ATTEST:
______________________________
Maychelle Yee, City Clerk
APPROVED AS TO FORM:
____________________________________
Karl H. Berger, City Attorney

Exhibit A
Design-Build Conflict of Interest Policy
In accordance with Public Contract Code § 22162 and Resolution No. 25-XX, the purpose of this policy is to clarify the City of Monterey Park’s organizational conflict of interest guidelines applicable to design-build projects procured pursuant to Public Contract Code § 22160, et seq.
• POLICY
Contractors and consultants participating as proposers on a design-build project or joining a design-build team ("Proposers") may not have organizational conflicts of interest.

Organizational conflicts of interest are circumstances arising out of a consultant's or contractor's existing or past activities, business or financial interests, familial relationships, contractual relationships, and/or organizational structure (e.g., parent entities, subsidiaries, affiliates) that results in (i) impairment or potential impairment of a consultant's or contractor's ability to render impartial assistance or advice to the City or of its objectivity in performing work for the City, (ii) an unfair competitive advantage for any bidder or proposer with respect to a City procurement; or (iii) a perception or appearance of impropriety with respect to any of the City's procurements or contracts or a perception or appearance of unfair competitive advantage with respect to a procurement by the City (regard less of whether any such perception is accurate).

An organizational conflict of interest exists in the following instances:
a. A Proposer is the City's general engineering or architectural consultant to the design-build project, except that a sub-consultant to the general engineering or architectural consultant that has not yet performed work on the contract to provide services for the design-build project may participate as a proposer or join a design-build team if it terminates the agreement to provide work and provides no work for the City's general engineering or architectural consultant on the design-build project.
b. A Proposer has assisted or is assisting the City in the management of the design-build project, including the preparation of the request for proposals, evaluation criteria, or any other aspect of the procurement. c. A Proposer has conducted preliminary design services for the design-build project such as conceptual layouts, preliminary design, or preparation of bridging documents.

d. A Proposer performed design work related to the design-build project for other stakeholders in the design­ build project.
e. A Proposer performed design work on a previous contract that specifically excludes it from participating as a proposer or joining a design-build team for the design-build project.
f. A Proposer is under contract with any other entity or stakeholder to perform oversight of the design-build project.
g. A Proposer has obtained advice from, or discussed any aspect relating to the design-build project or procurement of the design-build project with , any person or entity with an organizational conflict of interest, including, without limitation, the consultants of any entity that have provided technical support on the design-build project.
h. Any circumstances that would violate California Government Code § 1090, et seq.
• Proposers's Obligations
Proposers must immediately make an immediate and full written disclosure to the Director, Purchasing and Contracting and must have a continuing obligation to do so until they are no longer Proposers.

If a Proposer determines that a conflict of interest or potential conflict of interest exists, it must disclose the conflict or potential conflict of interest to the City. Such disclosure will not necessarily disqualify a Proposer from being awarded a contract, however. The Proposer must propose measures to avoid, neutralize, or mitigate all potential or actual conflicts. The City, at its sole discretion, must determine whether the proposed measures are sufficient to overcome the conflict or potential conflict and whether the Proposer may continue with the procurement process.
• Obligations After Contract Award
The successful Proposer to whom a contract is awarded ("Contractor") has an ongoing obligation to monitor and disclose its conflicts or potential conflicts of interest. The City has a right to ongoing enforcement of this Policy. If an organizational conflict of interest is discovered after contract award, the Contractor must make an immediate and full written disclosure to the City that includes a description of the action that the Contractor has taken or proposes to take to avoid or mitigate such conflicts. If an organizational conflict of interest is determined to exist and the Contractor was aware of an organizational conflict of interest before award of the contract and did not disclose the conflict, the City may terminate the contract. If a new conflict of interest arises after contract award, and Contractor's proposed measures to avoid or mitigate the conflict

are determined by the City to be inadequate to protect the City, the City may terminate the contract. If the contract is terminated, the City assumes no obligations, responsibilities and liabilities to reimburse all or part of the costs incurred or alleged to have been incurred by Contractor and is entitled to pursue any available legal remedies. • Incorporation by Reference
This Policy must be incorporated by reference into all design-build contracts executed by the City.

Staff Report
June 18, 2025
ATTACHMENT 2
Ferguson (Neptune) Proposal

Statement of Qualifications
City of Monterey Park, CA
Advanced Metering Infrastructure System
SUBMISSION DEADLINE:

April 16, 2025, at 3:00pm PST
PREPARED BY: Adam Milauskas
AMI/AMR Specialist
Ferguson Waterworks
E: [email protected]
P: (949) 467-4758

City of Monterey Park, CA Advanced Metering Infrastructure System

TABLE OF CONTENTS
Section 1 – Cover Letter ....................................................................................................................................... 3 Section 2 – Firm and Team Experience............................................................................................................. 5 o Ferguson Background and Qualifications
o Meter and Automation Group (MAG) Overview
o Financials
o Local Presence and National Capability
o Neptune Background and Qualifications
o Subcontractor Background and Qualifications
o Professional Meters, Inc. (PMI)
o JM Electrical Services (JMES)
o VertexOne
o AquaSight (optional)
o Key Personnel Resumes
o Organization Chart
Section 3 – Project Understanding.....................................................................................................................28 Section 4 – Schedule............................................................................................................................................30 Section 5 – Certified Propagation of Network Design ....................................................................................37 Section 6 – References ........................................................................................................................................44 Section 7 – Exceptions and Clarifications Summary .......................................................................................47 Appendices.................................................................................................................................................................49 o Section C: Responder’s Proposal
o Attachment 2: Cost Schedule
o Attachment 1: Project Specifications
o Attachment 2: Pricing Sheet
o Added Language for Customer Portal Technical Requirements o Bid Bond
o Authority to Sign
o Authority to Do Business
o DIR Registration
o Certificate of Insurance
o Product Specification Sheets
o Manufacturer’s Warranty Sheets
o PMI Statement of Qualifications
o Optional Technology Add-On Information
2 Click on each heading and section to navigate through the response.

SECTION 1

COVER LETTER
3

City of Monterey Park, CA Advanced Metering Infrastructure System
SECTION 1 – COVER LETTER
Ferguson Enterprises, LLC dba Ferguson Waterworks (Ferguson) is excited for the opportunity to submit the accompanying Advanced Metering Infrastructure System for the City of Monterey Park (City) and hereby acknowledges all Addenda (3) released by the City regarding this RFP. Ferguson Waterworks (Ferguson) is focused on building upon our partnership and solving the meter and automation complexities that challenge the City of Monterey Park. Ferguson will be the prime material supplier, providing premium integrated (all-in-one design) Neptune manufactured meters, hardware and software. Ferguson will deliver the solution via its in-house project management team along with partners Professional Meters, Inc (PMI), VertexOne and AquaSight (optional).

Neptune and Ferguson bring the best stability and reliability to the solution you seek, as we are established local partners with a history of proven products. Since 1892, Neptune has built a 125-year track record of dependable meter and automation technology to become the most widely used water RF system in North America. Since 1975, Ferguson has operated as both a Neptune Level 1 Distributor and since 2001 as a meter systems and proven water meter installation contractor (nationwide) with over 1 million meters and endpoints. With the quality of the products and services we can and have provided, Ferguson/Neptune has a proven track record of successful AMI and AMR projects. Our extensive history of success and partnership with Neptune Technology Group equip us with all we need to design and engineer a solution with your specific needs in mind – from the water meter to the data collection system, to the network software. We are confident you will find Ferguson well qualified to design and implement your best-inclass metering system.

SUMMATION
Though some manufacturers may wave a low-cost solution in front of you, a quick Google search can bring to light some of the massive pitfalls of product obsolescence, creating exponential future expenses with a product transition. A partnership with Ferguson and Neptune will eliminate the headache that usually accompanies a meter change out program. We aim to save you from the performance pitfalls, disadvantages, and time-consuming hidden costs that an unsuccessful project with a different contractor could cost you.

Above all, Ferguson and Neptune appreciate the chance to showcase our capabilities. We hope that we convey, through this proposal, the unique advantages of the R900® Cellular solution. Our goal is to exceed expectations – those of the selection committee, your leadership, and your water customers – for years to come. If you have any questions concerning our qualifications, please do not hesitate to contact us for clarification.

Sincerely,
Matt Rizzo, Director of Meter and Automation
Ferguson Waterworks | Meter & Automation
4

SECTION 2

FIRM AND TEAM EXPERIENCE
5

City of Monterey Park, CA Advanced Metering Infrastructure System
SECTION 2 – FIRM AND TEAM EXPERIENCE
FERGUSON WATERWORKS – BACKGROUND AND QUALIFICATIONS
Ferguson is a leading value-added distributor in North America, providing expertise, solutions, and products from infrastructure, plumbing, and appliances to HVAC (heating, ventilation, and air conditioning), fire, fabrication, and more. Our more than 1,700 final-mile locations are within 60 miles of 95% of the North American population, and we build long-term relationships with our customers by providing a valuable experience – in our branches and online – rooted in exceptional service. Since 1953, Ferguson has been a source of quality supplies for a variety of industries, each working together to help build better infrastructure, better homes, and better businesses.

Ferguson is proud to provide best-in-class products, service, and capabilities across the following industries: Waterworks, Commercial/Mechanical, Facilities Supply, Fire and Fabrication, HVAC, Industrial, Residential Trade, Residential Building and Remodel, and Residential Digital Commerce. With over 70 years of industry experience, Ferguson’s associates are dedicated to understanding the latest products and services available, so they can recommend the system or tool best suited for a Utility’s immediate and future needs. The professionals we serve help transform the world we live in, and we are their trusted partners with the scale, expertise, and solutions to provide peace of mind.

Ferguson's expansive product offering allows for the availability of material for on-time jobsite delivery and by leveraging the resources of a nationwide company. Ferguson is positioned to manage the extensive range of projects that this highly specialized industry demands.

We are Ferguson, and Together We Build Better.
$29.6 Billion
Annual sales in FY 2024
35,000+
Associates
1,800+
Locations
Largest Distributor
Offering Customizable Solutions
72 Years of Operation
Over 1 Million
Customers Worldwide
36,000
Suppliers
Publicly Traded
Listed on NYSE & LSE
6

City of Monterey Park, CA Advanced Metering Infrastructure System

CORPORATE VALUES, MISSION, AND VISION

METER AND AUTOMATION GROUP BACKGROUND (MAG)
When Ferguson deployed its first AMI project in 2008, the decision was made on a national level to invest in substantial sales, installation, and ongoing support resources for AMR/AMI projects with the Meter and Automation Group (MAG). Ferguson’s in-house team of metering experts are highly trained in the latest metering technology and project management support. Our strong relationship with the top 4-meter manufacturers allows us to offer municipalities access to an extensive range of automated meter reading (AMR), advanced metering infrastructure (AMI), products and solutions. Our MAG team will clearly identify the specific needs of your municipality and will help you select the right AMR/AMI technology based on your requirements and project goals.

In addition to guiding a municipality through the selection of meter system products from top brands, our MAG team members will also provide municipalities with support throughout the installation process. We will help strategically design your utility’s metering system to ensure the most accurate readings of meter data. Additionally, Ferguson can leverage its branch network and municipal sales focus to bring unprecedented support. Ferguson’s MAG has seventeen years of experience inclusive of Product Specialists, General, Area, and Sales Managers, IT Integration and Installation Project Managers, and Municipal Sales Associates for additional support.

Dedicated
Ferguson
AMR/AMI sales,
service and
support
employees
More than 2
million points
sold since the
year 2000
In-house project
management team
provides assistance
for a variety of water
meter installation
services
Project
management
services for
subcontractor
installation and
integration
Service and support
with a customized
maintenance program
after sale and
installation
7

City of Monterey Park, CA Advanced Metering Infrastructure System

METER AND AUTOMATION GROUP BENEFITS
 Quality Meter & Technology Supplier: Ferguson works hand in hand with many of our manufacturing vendors to offer products and solutions to our customers in need every day. Our rigorous supplier qualification enables us to maintain a detailed list of approved manufacturers, manufacturing sites and specific products from qualified suppliers nationwide.
 Finance Solutions: Ferguson has partnered with firms that specialize in Waterworks project financing so we can help Utilities explore creative funding options to drive higher returns and get more done.  Expansive Product Offerings and Solutions: Developing knowledgeable and quality focused associates strengthens our ability to partner with our customers and manufactures, offering detailed product knowledge, problem solving solutions, and cost-savings opportunities. Ferguson's expansive product offering allows for the availability of material for on-time jobsite delivery and by leveraging the resources of a nationwide company.
 AMR/AMI Technology Experts: With 70 years of industry experience, Ferguson Waterworks is one of the largest suppliers of water, sewer and storm management products and services to multiple segments of the Waterworks sector. Our associates are dedicated to understanding the latest products and services available, so they can recommend the system or tool best suited for the Utility’s immediate and future needs.
 Meter Testing: Our Meter and Automation Group (MAG) provides meter testing services that ensure your system provides accurate real-time water use data, leak alerts, and more.  Support & Project Management: Ferguson provides project management and installation services such as field mapping, instruction, and testing for new water meter systems.  Data Analytics Support: Intelligent metering systems and cloud-based analytics software applications can provide unprecedented access to real-time information about consumption demand and system efficiency, which allows forward-thinking Utilities to use predictive analysis to preemptively correct problems.
 Network & Meter Installation: Ferguson partners with experienced national and regional meter installers. All approved Installation partners will comply with the scope of work generated by Ferguson and the Utility. The installers will also adhere to the meter manufacturer’s installation specifications, and all other applicable local, state, and federal codes/regulations. 8

City of Monterey Park, CA Advanced Metering Infrastructure System

FINANCIALS
o COMPANY LEGAL STRUCTURE: Ferguson is a Limited Liability Company (LLC). o HEADQUARTER’S ADDRESS: 751 Lakefront Commons, Newport News, VA 23606 o FERGUSON’S FEDERAL TAX ID: 54-1211771
o FERGUSON’S D-U-N-S NUMBER: 00-895-5171
o E-VERIFY: 1205487
o SAM.gov UNIQUE ENTITY ID NO.: G3UJV497QGU3
o VERIFICATION OF CURRENT BONDING CAPATOWN: Maximum amount of bond authorized to issue: $50,000,000 Single $200,000,000 Aggregate. o BANK REFERENCE: Bank of America Acct: 3752290835 for all inquiries please visit www.bankvod.com
COMPANY REVENUE FOR PAST 3 YEARS
MAIN CORPORATE SITE: Ferguson is part of Ferguson plc, which is listed on the New York Stock Exchange (NYSE: FERG) and the London Stock Exchange (LSE: FERG) and is in the FTSE 100 index of listed companies.

Ferguson’s earnings statements are located in Ferguson’s Annual Report at www.corporate.ferguson.com. Key sections include our businesses, investors, financial details, media, and sustainability. There is also information on our strategy and links to our business unit websites.
2024
2023
2022
$29.6B
$29.7B
$28.6B
9

City of Monterey Park, CA Advanced Metering Infrastructure System

LOCAL PRESENCE AND NATIONAL CAPABILITY
Ferguson has over 1,700 branch locations across the U.S, and roughly 300 of those are dedicated to commercial/municipal Waterworks. This allows us to maintain additional stocking levels to ensure that the City will never have to wait for deliveries. This also means that there is no need to tie up funds in the City’s warehouse inventory.

Our team has expansive industry knowledge and experience in the state of California, and we work alongside the local Ferguson Waterworks team to offer substantial project resources. This scope includes immediate meter inventories, phone and on-site technical support, meter testing, project management, RMA assistance, and more.

Our Waterworks locations and regional Meter Depots allow us to maintain a dedicated metering inventory, ensuring our customers have reliable access to the products they need. Our well-trained staff will also be able to quickly respond to any issues as they arise, as the success of any AMI/AMR system is dependent on solid project experience and support. We utilize our inventory management system and communicate with our partners for product availability and lead times.

Map illustrates Ferguson’s national support platform.

LOCAL FERGUSON OFFICES
2600 Marine Avenue, Redondo Beach, CA 90278
10

City of Monterey Park, CA Advanced Metering Infrastructure System
MANUFACTURER BACKGROUND – NEPTUNE
Neptune is an AMR/AMI systems vendor with a
successful history for 130 years. As a leading
provider of meter reading systems and water
measurement products, Neptune has continually
focused on the evolving needs of water utilities –
revenue optimization, operational efficiencies, and improved customer service. Our vision is to be viewed as the most valued partner of our utility customers and help them manage the world’s scarce water, energy, and human funding resources.

Neptune’s fully integrated manufacturing facility ensures a dependable and dedicated support for all hardware, software, and support for mobile Advanced Meter Reading (AMR) and fixed-base Advanced Metering infrastructure (AMI) systems. All Neptune water meters meet or exceed American Water Works Association standards as well as all the revised requirements of the Safe Drinking Water Act (SDWA).

Accurate meter readings are guaranteed with Neptune’s absolute encoder technology — a field-proven meter reading concept first introduced in 1964. This solid foundation allows a seamless migration from manual data collection to handheld, mobile, and fixed network radio frequency systems. Neptune’s migration approach means you’ll never outgrow Neptune technology.

Neptune has approximately 700 employees in North America producing meter reading systems and water measurement products. Neptune’s state-of-the-art, ISO9001-certified, 300,000-square-foot facility in Tallassee, Alabama houses our integrated manufacturing, engineering, and support capabilities.

Additionally, Neptune opened its Atlanta based Innovation Center in the spring of 2017 with a focus on software and hardware development, including IT support.

KEY FACTS
o 715 employees located in the US, Canada, and Mexico
o 300,000 square foot manufacturing facility
o 100% lead free foundry
o 4000+ AMR/AMI reading systems deployed
o System hardware optimized for water applications
o Superior battery management
o Common software platform optimized for mobile and fixed network applications o Integrated RF MIU and absolute encoder technologies for Neptune meters o R900™ building block for Smart Water solutions - Supports fixed base AMI and back up mobile AMR o Cloud Based Data Management Software - offered as a Software-as-a-Service (SaaS) model AMI infrastructure support offered as Network-as-a-Service (NaaS) model 11

City of Monterey Park, CA Advanced Metering Infrastructure System

SUBCONTRACTOR BACKGROUND AND QUALIFICATIONS
Professional Meters, Inc. (PMI)
Professional Meters, Inc. (PMI) was founded in 1999 in response to the rapidly growing market for automated meter reading systems for the water, gas and electric industry. PMI specializes in the turnkey installation of AMR/AMI Systems nationwide. We have installed mobile, fixed, and mesh network systems and have worked with most of the industry’s major product.

Over the last twenty years, PMI has installed meters from Portland, Maine, to Kauai, Hawaii, and has managed projects ranging from 500 meters to 300,000 meters. PMI has demonstrated its ability to handle every aspect of a utility meter replacement program. Our experienced management staff carefully monitors the overall installation program ensuring timely delivery of project data as well as quick and professional installation. Our training and quality programs enable our installers to perform superior work and deliver accurate data, while our safety program help to protect both our employees and people around them.

Customer service and attention to detail are the cornerstones of our business. Your utility is unique, so our services are tailored to fit your organization. Our staff is highly specialized and trained as well as sensitive to the individual needs that may arise out of this project. PMI prides itself on our “out of the box” thinking and always puts the customer at the top of the priority list. PMI utilizes professional, friendly, and experienced installers. Extra care is taken on every installation so that each resident is satisfied with the entire process. Our customer care philosophy becomes your success.

PMI has been actively involved with dozens of public works projects in California and has office locations in Fremont and Oxnard. Since 2015, PMI has installed over 175,000 smart meters throughout the state. PMI has no history of default termination. PMI has managed every type of mass meter project including insideset and appointment jobs, meter pit jobs, and specialized plumbing jobs. In past projects, our installers have performed simple meter exchanges, new meter cut-in work, and plumbing repairs or modifications such as installing new meter pits, valves, adapters, re-plumbing and more. We have utilized both union and non-union labor forces and have experienced installers on every meter project. PMI has worked nationwide and is mindful to the specific needs of every utility. The variety of projects and types of customers we have performed work for has allowed us to create a management approach that is scalable to the needs of every mass installation program.

Point of Contact:

John Cummings, VP
815.942.7000
Proposer Name
Professional Meters, Inc.

Business Address: 3605 North Rte. 47, Suite E Morris, IL 60450 Licensing and Certification
California Class A General Engineering Contractors License No. 1019233 Expiration Date: 10/31/26
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City of Monterey Park, CA Advanced Metering Infrastructure System

PMI RESUMES
PMI is committed to exceeding our customers’ expectations by dedicating professional, highly skilled team members to the project. Our team members have decades of management experience and are trained to work as an efficient, knowledgeable team, committed to excellence. Below is an overview of staff members that may be assigned to this project.

John Cummings, P.E, Vice President, Co-Owner of PMI
John holds a BS in Civil Engineering and has overseen every major PMI project since his hiring in 2003.

John has guided the company from the status of a small installation firm to an industry-leading installation firm completing major utility project across the US. He is very actively involved in the day-to-day business of PMI and will serve as the Contract Manager for this project.

Jason Brown, Director of Operations
Jason has been with PMI since 2012 and worked as a Field Manager for the City of Chicago project from 2012 to 2020. Jason became a Project Manager for PMI in 2020 and took on numerous PMI projects in the Midwest, Southwest, and Southeast. Notable projects include Plano, TX (72,000 meters) and Toledo, OH (113,000 Sensus meters). Jason has been the Director of Operations since 2024. His role includes overseeing the Operations team and allocating personnel and resources to ensure the successful implementation of each project.

Joe Zikan, Regional Project Manager for PMI
Joe has been with PMI since 2015 as a Project Manager. Since being in that role, he has taken on numerous PMI projects on the West Coast. Notable projects include Yuba District, CA (17,000 meters) and Ventura, CA (31,000 meters).

Stan Kumor, IT Manager for PMI
Stan has been an IT Manager for PMI for twelve years and has over twenty years of computing and data management experience. Mr. Kumor is responsible for computer systems and data management for ongoing installation projects and has data managed over 100 projects including Chicago, IL (300,000 meters), Western Virginia Water Authority (57,000 meters), and Chicago Consortium Project (47,000 meters).
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City of Monterey Park, CA Advanced Metering Infrastructure System

SUBCONTRACTOR BACKGROUND AND QUALIFICATIONS
J M Electrical Services (JMES)
Ferguson Waterworks is partnering with JM Electrical Services (JMES) to provide the AMI Network infrastructure installations needed. JMES has served the electrical and wireless telecom industry for over 15 years. JMES has specialized in commercial and industrial electrical installations, as well as AMI systems, network infrastructure, point-to-point microwave, and telecom structure builds. The JMES team can offer reliable, efficient, and competitive services within the electrical and telecom industries. JMES has worked for customers such as Ferguson Waterworks, Tesla, T-Mobile, BNSF Railroad, and dozens of water utilities including Western MWD, East Valley WD, City of Oceanside, Las Virgenes MWD, etc.

Ferguson has partnered with JMES exclusively, on all AMI projects throughout the state of California. With over 200 collectors successfully installed Ferguson’s collaboration with JMES continues to be a longterm partnership. Through the trials and tribulations of the COVID-19 pandemic, our partnership enabled us to complete key AMI projects within the projected schedule. JMES works in sync with Ferguson to have gateways installed on assets ranging from new and existing towers, water tanks and reservoirs, City buildings, pump stations, and water/wastewater treatment facilities.

Company Name
and Address
Website
Contact
Phone/Email
Contractor’s License
JM Electrical Services (JMES)
2581 Union Ave, La Habra, CA 90631
www.jmservices.net
Jeffrey Mandell
P: (714) 488-1970
E: [email protected]
#1056901 C-10
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City of Monterey Park, CA Advanced Metering Infrastructure System

SUBCONTRACTOR BACKGROUND AND QUALIFICATIONS
VertexOne
VertexOne connects water, gas, and electric
utilities, retailers, and energy service providers
to their customers and their business
operations, transforming the customer
experience for the energy and utility industry. With decades of experience and over 500 engagement customers, Ferguson will deliver the most advanced water resource alerting tools to the City’s staff, as well as its customers via the VX Smart application. Ferguson’s recent R900 LoRa WAN projects at Oceanside, Las Virgenes MWD, Camarillo and Victorville all utilize the platform which has yielded tremendous success.

Las Virgenes MWD has recently won national awards for their R900 AMI working in conjunction with VX Smart to lower the highest water usage per capita in California. Ferguson is extremely confident in the Vertex One team providing a dramatically new approach for the ratepayers in the City, to manage such a scare resource.

Company Name
and Address
Website
Contact
Phone/Email
VertexOne
1321 Upland Dr. Suite 8389
Houston, TX 77043
vertexone.ai
Michael Caldwell
P: (602) 284-5438
E: [email protected]
15

City of Monterey Park, CA Advanced Metering Infrastructure System

SUBCONTRACTOR BACKGROUND AND QUALIFICATIONS
AquaSight (Optional)
About AURA™
AURA™ addresses challenges experienced within
the distribution system and on the customer side
of the meter. AURA™ is a sophisticated GIS-based
digital-twin software solution designed to minimize
non-revenue water, identify smart meter anomalies, forecast water quality, detect main breaks and leaks, monitor virtual DMAs, and simulate hydraulic conditions in real time for optimal water management.

AMI Leak Detection
The focus of this proposal is on AMI Leak Detection. AURA™ integrates AMI smart water meters with advanced leak detection algorithms to identify episodic, persistent, and sustained anomalies. These robust algorithms allow utility users to input variables for analysis, with the resulting insights supporting customer service teams in notifying field technicians for repairs directly. With this data source alone (as is the case with this RFP), leaks can be detected, categorized, monetized (revenue losses), prioritized, and fixed (below screenshot).
16

City of Monterey Park, CA Advanced Metering Infrastructure System
Distribution System Pressure Leaks:

As an optional expansion in the future, additional pressure meters - either from AMI systems or the distribution network (screenshot below) - can be integrated into AURA™ to identify DMAs or pressure zones with potential distribution-side leaks.

Aquasight is with you every step of the way
While software solutions offer great potential, many fall short due to poor adoption. Aquasight addresses this by providing ongoing adoption and data review meetings throughout the contract term. These sessions help users better leverage AURA’s capabilities, align with key workflows and reporting needs, and, most importantly, identify and resolve leaks. This hands-on, collaborative approach reflects Aquasight’s hybrid software-consultative DNA and is key to ensuring project success.

AURA™ Leak Detection Case Study of Warren, Michigan
The City of Warren is the third largest city in Michigan with a population of 134,000 and 13 million gallons per day of water supply. Drinking water is supplied by Great Lakes Water Authority and is metered through nine meter pits bringing water into the city. On the consumption side, over 50,500 AMI meters were deployed to monitor residential and commercial water usage. The City needed an automated Water Loss Monitoring and Resident Leak Detection program that could tap into the enormous supply and consumption data generated in real-time by their $10M+ investment in metering infrastructure. The City has deployed Aquasight's smart water cloud AI platform AURA™ to achieve this objective, empowered its customer service to proactively assist residents and solve leaks. Each leak detected through this technology resulted in average savings of $1,600, driven by improved efficiency within the customer service department—enabling teams to do more with less. 17

How City of Warren Utilized Non-Capital Cloud
AI Software For Resident Leak Detection and
Automated Water Loss Monitoring
City of Warren is the third largest city in Michigan
with a population of 134,000 and
13 million gallons per day of water supply.

Drinking water is supplied by Great Lakes Water
Authority and is metered through nine meter pits
bringing water into the city. On the consumption
side, over 50,500 meters were deployed to
monitor water usage at each of the customer.

Enormous supply and consumption data is
generated in real-time. City needed an automated
Water Loss Monitoring and Resident Leak
Detection that can tap into $10's of millions of
installed metering infrastructure. City has selected
Aquasight's smart water cloud AI platform AURA
to achieve this objective which required no capital
investment. City wants to empower its workforce
and proactively assist residents for leaks.

Empowering Workforce

CASE STUDY
City of Warren resident after getting leak
notification based on Aquasight software
“This is very cool and I am glad our
dollars are put to good use”
Quantifiable Impact
Early Warning to
Residents on Water Leaks
- One Day instead
of One Month
Radio Field O&M Staff To
Immediately Inspect
Large Anomalies
Detected
Automate City Water
Loss Quantification and
Track Unintended
Losses
Tom Pawelkowski
Water Division Superintendent, Warren, MI
“With out capital investments and
major effort, Aquasight smart
software has saved us significant
time and money and most importantly,
helping our residents save money and
reduce the number of complaints
reaching our Mayors office”
“Aquasight has made things much
quicker from a customer service
standpoint. I can send out triple the
high usage notifications in the same
amount of time as before, allowing
residents to identify leaks faster.”
Erin Christie
Account Technician, Warren, MI

Pre-Built Out of Box
Solution & Algorithms
Results that Speak
Volumes
50 to 100 notification letters sent each week
based on Aquasight leak detection software
Each notification letter results in residents saving
up-to $500 of water leaks
Residents warned within days of leak occurrence
replacing monthly audits
Delighted residents, in particular older
population, proactive approach minimizes
number of complaints
Eliminated manual effort in estimating water loss;
historical comparison available at the finger tips
Rapid payback from Aquasight software which
required no hardware and software investment
Tablet enabled and can be used anywhere,
anytime in a secured fashion
Rapid Deployment In Weeks
Aquasight deployed its water loss and leak
detection solution by integrating real-time or daily
data from third party consumption and water
supply meters. It deployed its data cleaning &
integrity technology to ensure good high quality
data is available for real-time intelligence
processing.

An automated algorithm tally daily, weekly and
quarterly water loss in-terms of million gallons, $
and %. The GIS platform has built-in algorithm
that in real-time, based on user preferences
identifies leaks or episodic, persistent and
sustained anomalies. City acts on these leaks and
losses, by sending resident notifications or alerting
O&M staff that is on the field.

Intelligent Work Automation, Meter Data
Integration and Cloud Processing To Delight
Its Residents - A Smart City Approach
Resident Consumption
Insights & Analytics
Customer Leak
Detection Early
Warning & Notifications
Automated City Wide
Water Loss Monitoring
& Quantification

CASE STUDY

PROFILE
A regional executive leader in the water
utility sector, more specifically automated
metering solutions. Andy is known for his
hands on metering experience,
communication skills, planning and
integrity. A skilled systems planner with
excellent vision of the metering space and
where its heading into future.

Over two decades of experience,
responsible for dramatic growth in market
share in the CA/NV region.

CONTACT
PHONE:
415-710-2046
EMAIL:
[email protected]
WEBSITE:
www.neptunetg.com

AFFILIATIONS (ACTIVE

INVOLVEMENT)
• ACWA
• AWWA
• CA-NV AWWA
• Cal Mutuals
Andy Bohn
District Manager CA/NV

EDUCATION & CERTIFICATIONS
North Central College
BA - Marketing

EXPERIENCE & BACKGROUND
Neptune Technology Group, Inc.
2019 to Present
Responsible for strategically increasing opportunities, collaborative delivery positioning, strengthening leadership in the industry, growing market share, forward thinking innovation, and increasing name recognition for Neptune across California and Nevada.

Neptune Technology Group Inc. – Territory Manager SoCal/NV 2002 - 2019
Managed sales, marketing and strategic distribution team assembly and training to sell and support water meter technology to our water utility partners within the region.

Water Resources (IL) – Field Installation Resource
1999 - 2002
Installed Neptune AMR/AMI systems in the Chicago and Minneapolis metropolitan areas for utilities striving for more effective data to better assist their customers and understand water system use.

REFERENCES
• Tom Taulbee – Retired (Orange Water)
• Miguel Pena – Water Operations Manager – Indio Water Authority • Craig Jones – Resource Conservation Manager
• Engineering/External Affairs - Las Virgenes MWD
• Dan Newton – Assistant Deputy Public Works Director
City of Simi Valley
• Mario Martinez – Customer Service Manager - Fontana Water • Leo Barrera – CSM - San Gabriel Valley Water
20

PROFILE
A 20-year veteran of the Water Meter
Industry, Brad is known for his hands-on
experience, integrity, communication skills
to delivery desired outcomes for AMI and
AMR deployments. Customer satisfaction is
at the core of Brad’s everyday activity and
essential to our success.

CONTACT
PHONE:
310-974-0784
EMAIL:

[email protected]
WEBSITE:
ferguson.com/waterworks
Brad Foster
Sales Manager – Meter & Automation

EDUCATION & CERTIFICATIONS
North Central College of Naperville, IL
Bachelor of Arts

EXPERIENCE & BACKGROUND
Ferguson Waterworks, Sales Manager, Meter & Automation
2021 to Present
Responsible for strategically increasing opportunities, growing market share, forward thinking innovation, and increasing our customer base in California.

Ferguson Waterworks, IT Manger
2017 to 2021
Responsible for successful deployment of AMI Systems. Provided industry leading service and support to Ferguson’s AMR and AMI customers to achieve desired outcomes.

Ferguson Waterworks, Operations Manager
2009 to 2017
Oversaw daily operations to meet company expectations. Used experience to assist the group meet inventory levels to meet customer needs and expectations.

Ferguson Waterworks, Inside Sales
2003 to 2009
Worked closely with sales associates to meet customer expectations. Order entry accuracy and timeliness was an essential part of this position. 21

PROFILE
Senior project manager who partners with
consultants, municipalities, and water
districts alike to oversee implementation of
value-based AMR and AMI metering
solutions. Working closely with sales and
delivery teams Russell Deliver consistent
and comprehensive planning that enables
key decision makers to advance their
agenda through actional data.

With over a decade of experience in buried
infrastructure, Russell is known for his
hands-on experience, integrity, and
communication skills.

CONTACT
PHONE:
619-643-8364
EMAIL:
[email protected]
WEBSITE:
ferguson.com/waterworks

AFFILIATIONS
• American Water Works
Association (AWWA)
• American Society of Civil
Engineers (ASCE)

INDUSTRY TRAINING
• OSHA 30
• CPR & First Aid
• Confined Space & Trench
Excavation
Russell Gray
AMI Project Manager

EDUCATION & CERTIFICATIONS
George Mason University
Bachelor of Science Civil Environmental Infrastructure Engineering

EXPERIENCE & BACKGROUND
Ferguson, Project Manager V, Metering Automation Group
2021 to Present
Responsible for overseeing all aspects of a meter and/or AMI/AMR installation project and collaborates directly with clients to ensure their goals are being met in a satisfactory manner.

Xylem Inc, Senior Project Manager
2013 to 2020
Prepared and led teams of experienced engineers and technicians on and offsite, managed multimillion dollar pipeline condition assessment projects through entire project lifecycle and functioned as primary client liaison.

Pure Technologies U.S. Inc, Project Engineer
2011 to 2013
Oversaw application of a variety of nondestructive inspection technologies and operated as on-site safety officer and client technology resource.

DOI United States Geological Survey, Hydrologic Technician 2005 to 2010
Supported senior scientists in field operations, sample collection, and data processing related to the National Research Project (NRP).

REFERENCES:

Art Shapiro – Howard County Bureau of Utilities
Larry Hentz – HDR Engineering
Eric Barnett – DC Water
Mohamed Madih – Fairfax WDCD
Bruce Mattheiss – Jacobs Engineering
Contact Information available upon request.
22

PROFILE
Johnny Ho is a highly motivated and driven
Integration Specialist. He has experience
implementing multiple AMR and AMI
systems throughout Southern California.

Johnny’s background in software
implementation and recent work in the field
have given him the experience and
understanding to work with the different
applications and databases that need to
communicate to roll-out an AMI platform.

CONTACT
PHONE:
(310) 938-0860
EMAIL:

[email protected]
WEBSITE:

Johnny Ho
Integration Specialist III

EDUCATION & CERTIFICATIONS
Florida Tech Melbourne, Florida
Master of Business Administration
Indiana University Bloomington, Indiana
Bachelor of Arts Telecommunications
Bachelor of Arts Communication and Culture

EXPERIENCE & BACKGROUND
Ferguson Enterprises, Inc., Integration Specialist III, Meter & Automation 2015 to Present
Provide Software/Hardware technical support and training for Neptune AMI and AMR customers.

Worked with 3rd party Utility billing software on software integration with Neptune systems.

REFERENCES
ferguson.com/waterworks • Michael Sharp City of Ventura, CA • Michael Santillan City of Lakewood, CA
• Michael Perea Trabuco Canyon Water District
Contact information available upon request.
23

PROFILE
Adam is an extremely driven and motivated
sales professional with over 13 years of
business development and high-level
outside sales experience. Adam’s strong
leadership and communication skills have
given him the ability to develop lasting
business relationships.

Adam is a proven performer who
consistently exceeds goals put in front of
him.

CONTACT
PHONE:
(949) 382-9393
EMAIL:

[email protected]
WEBSITE:
ferguson.com/waterworks
Adam Milauskas
AMR/AMI Specialist

EDUCATION & CERTIFICATIONS
University of Central Missouri, Warrensburg
Bachelor of Science - Business Administration

EXPERIENCE & BACKGROUND
Ferguson Enterprises, Inc., AMR/AMI Specialist, Meter & Automation 2015 to Present
Develops strong relationships with customers and has an extremely strong relationship with Neptune. Consistently achieves and exceeds monthly and annual sales goals. Effectively works with Municipal Sales associates to create a team approach for new market and existing markets.

Equarius Waterworks, Territory Manager
2012 to 2015
Worked closely with staff to ensure customer satisfaction and retention.

Expanded territory with 9 new accounts to represent over 100,000 endpoints.

Grew territory sales by over $2,000,000 in 2 years.

Measurement Control Systems, Project Manager
2009 to 2011
Clearly communicated and delivered accurate data for customer satisfaction.

Successfully hit project deadlines by keeping teams on task while managing multiple projects simultaneously. Developed strategies to maximize production from installation technicians.

REFERENCES
• Jeff Olsen – Neptune Technology Group
• Andy Bohn – Neptune Technology Group
• Mike Grisso – City of Tustin
• Jose L. Martinez – Valley County WD
Contact information available upon request.
24

Chris Sebestyen
Project Management Manager, West Region
Water Works Meter & Automation

EDUCATION & CERTIFICATIONS
CSUSM - 1993-1997 Bachelor of Science
Certified Associate in Project Management (CAPM) – 2022

EXPERIENCE & BACKGROUND
Ferguson LLC. Project Management Manager, West Region 2023- • Supervise and provide mentorship to the personnel responsible for the organization's portfolio of projects.
• Identify, resolve, or advance operational problems and minimize delays. • Select and manage ongoing relationships with external contractors so that the organization receives satisfactory standards of service.

Ferguson LLC. Integration Specialist II, Arizona 2021-2023 • Monitor projects across the country to completion.
• Resolve operational problems and minimize delays in project completion. • Manage ongoing relationships with contractors.

US Peroxide Project Manager 2014-2021
• Develop strategies for installing chemical dosing systems and manage customer accounts. Implement best practices to drive continuous improvement, innovation, and excellent customer service. • Review compliance and safety training.
• Develop staff for Field Service Technician roles.

RDX Technologies Field Superintendent 2012 -2014
• Lead team in charge of constructing/ water treatment and bio-diesel systems in remote locations.
• Ensured correct implementation of engineering plans and made modifications as necessary to meet specific location needs.
• Ensured that proper safety procedures were followed with regards to leak prevention and piping specifications for toxic chemicals.

PROFILE:

With 13 years of experience in the
water industry, Chris has managed large
AMI/AMR projects including the
installation of over 150 pieces of
infrastructure on one account
alone.

Helping my staff to manage projects is
what I enjoy doing. It helps them learn
form my experience and keeps
me forward thinking on better
ways to complete projects on time and
budget. I look forward to helping my
team successfully complete your
project.

CONTACT:

PHONE:
480-296-8798
EMAIL:

[email protected]
WEBSITE:
ferguson.com/waterworks
REFERENCES:

Jason Fater Town of Gilbert Arizona
103,000 endpoints and 150 pieces of
infrastructure.

John Simonton Town of Gilbert Arizona
103,000 endpoints and 150 pieces of
infrastructure.
25