Pico Rivera City Council
February 14, 2023

The following table summarizes the bids received:

No. Contractor Total Bid
1 Aneen Construction, Inc. $221,910.00
2 Onyx Paving Company, Inc. $321,000.00
3 Toro Enterprises, Inc. $353,802.00
4 Stance Construction Company $366,845.00
5 Addison-Miller, Inc. $395,560.00
6 EBS General Engineering, Inc. $496,889.80
Upon evaluation of the bids, it was discovered that most of the bid proposals included discrepancies and irregularities. Contractor No. 1, 2, 3, 4 and 6 did not include a completed and signed letter of assent from the prime contractor. Contractor No. 1, 2 and 4 did not include a signed Skilled and Trained Workforce Certification. Bid proposal from contractor No. 5, Addison-Miller Inc., appears to be in order. However, the total bid amount is substantially over the engineer’s estimate. Therefore, due to these irregularities, staff recommends rejecting all the bids and to re-advertise the project.

Discussion:

According to the Pico Rivera Municipal Code, the City Council has the authority to reject all bids. Municipal Code Section 3.20.150, Rejection of Bids, states, “In its discretion, the City Council may reject any and all bids presented and re-advertise for bids.” Therefore, staff recommends the rejection of all bids received, and opened, for the Annual Sidewalk Improvement Project CIP No. 50080 and requests authorization to readvertise for construction.

Steven Carmona
SC:TR:NC:np
To: Mayor and City Council
From: City Manager
Meeting Date: February 14, 2023
Subject: APPROVE A PROFESSIONAL SERVICES AGREEMENT

WITH HINDERLITER DE LLAMAS & ASSOCIATES (HDL

COMPANIES) FOR BUSINESS LICENSE TAX AND

TOBACCO RETAIL LICENSE ADMINISTRATION

SERVICES
Recommendation:

1. Approve a professional services agreement with Hinderliter De Llamas & Associates (HdL Companies) to perform business license tax and tobacco retail license administration services and authorize the City Manager to execute the agreement in a form approved by the City Attorney.

Fiscal Impact:

The annual cost of this professional services agreement is approximately $42,000. In addition, the agreement states that the City of Pico Rivera (City) will share a percentage of the revenue recovered through their auditing services with the HdL Companies. Their auditing services are designed to identify new revenue that should be recorded to the City (e.g., identifying businesses subject to licensure or taxation in the City of Pico Rivera, etc.).

The Fiscal Year (FY) 2022-23 adopted General Fund budget includes sufficient funds for these services in G/L # 100.20.2015-54400 (Professional Services). There is no need to adjust the adopted budget as sufficient appropriations exist to pay for these professional services.

Background:

The City has had a professional relationship with HdL Companies since 1988 to provide a host of services, from sales and use tax auditing and examination to property tax examination services. During that time HdL Companies has provided regular updates of the City’s revenue projections used in developing the annual budget for both these categories. In addition, the City began using HdL’s services to provide business license tax administration in 2016.
8 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023

APPROVE A PROFESSIONAL SERVICES AGREEMENT WITH HINDERLITER DE

LLAMAS & ASSOCIATES (HDL COMPANIES) FOR BUSINESS LICENSE TAX AND

TOBACCO RETAIL LICENSE ADMINISTRATION SERVICES

HdL provides a valuable service to the City through its Sales Tax, Property Tax, and Business License Tax (BLT) Administration Services. In the six (6) plus years HdL has handled our BLT and have seen a consistent level of service and attention to the City’s needs.

In the City’s ongoing efforts to advance the vision and priorities of the Strategic Plan, the City continues to explore revenue enhancements to support the City’s ongoing fiscal stability. Measure AB was a proposed ballot measure that was geared towards modernizing the City’s outdated Business License fee structure; one that had not been updated since 1967. Voters overwhelmingly approved Measure AB with over 75% voting in favor of this item. Based on early projections and the current business count in the City, staff expects this revision will result in an estimated $5.8 million each year in additional business license tax revenue.

Discussion:

HdL has been a great partner to the City in preparing the relevant historical information and modeling for staff the taxing structure that was ultimately approved by voters in November 2022. Their attention to detail, approach to revising the structure, and presenting a clear analysis and plan to City staff demonstrated HdL’s efforts to arrive at the best solution for the City.

HdL has maintained their pricing intact since the inception of our agreement with them in 2016. As the City is looking to implement this new tax measure revision, staff contacted HdL to ensure all relevant factors pertaining to the revision could be implemented by them through their current contract. In reviewing the current agreement, HdL requested the base fee for the BLT be revised, going from $14 per license to $16 per license. This amount averages to about 2.3% increase per year since 2016, well within the CPI for each year on average from 2016 through 2023. As such staff recommends City Council approve the rate increase. All other pricing for other fees charged, such as audit and discovery services remain unchanged.

Additionally, on March 8, 2022, City Council adopted Ordinance No. 1154 adding Chapter

5.75 to establish a local tobacco retail licensing program and prohibit the sale of flavored tobacco products. As the most efficient way to carry out this licensing is with the currently established licensing model administered by HdL, we called on them to provide us with a quote to setup these licensing procedures and annual licensing administration. The attached Professional Services Agreement (Enclosure 1) and Scope of Work (Exhibit A) includes the per-license fee rate of $16, the same fee charged for the Business License certificate. Additionally, a one-time fee of $3,000 is included for the setup of this specific license, which is currently not a part of the current setup.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023

APPROVE A PROFESSIONAL SERVICES AGREEMENT WITH HINDERLITER DE

LLAMAS & ASSOCIATES (HDL COMPANIES) FOR BUSINESS LICENSE TAX AND

TOBACCO RETAIL LICENSE ADMINISTRATION SERVICES

Conclusion:

HdL has provided exceptional service in providing BLT administration to the City. Staff is recommending approval of this agreement for a three (3) year term (through February 14, 2026) with the option to renew for two (2), one-year terms.

Steve Carmona
SC:AG:ep
Enclosure: 1) Professional Services Agreement /Exhibit A AGREEMENT NO. _______

PROFESSIONAL SERVICES AGREEMENT

BETWEEN THE CITY OF PICO RIVERA AND
Hinderliter De Llamas & Associates (HdL)

1. IDENTIFICATION
THIS PROFESSIONAL SERVICES AGREEMENT (“Agreement”) is entered into by and between the City of Pico Rivera, a California municipal corporation (“City”) and Hinderliter De Llamas & Associates (HdL), a California corporation (“Consultant”). City and Consultant are sometimes hereinafter individually referred to as a “Party” and collectively referred to as “Parties.”

2. RECITALS

2.1 City has determined that it requires professional services from a consultant to provide management services related to the City’s Business License Tax which includes Business Tax Operations Management and Business Tax Compliance Services on behalf of the City of Pico Rivera.

2.2 Consultant represents that it is fully qualified to perform such professional services by virtue of its experience and the training, education and expertise of its principals and employees. Consultant further represents that it is willing to accept responsibility for performing such services in accordance with the terms and conditions set forth in this Agreement.

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

3. DEFINITIONS

3.1 “Scope of Services”: Such professional services as are set forth in the Consultant’s Scope of Services attached hereto as Exhibit “A”, and incorporated herein by this reference.

3.2 “Approved Fee Schedule”: Such compensation rates as are set forth in Exhibit “A”.

3.3 “Commencement Date”: March 1, 2023

3.4 “Expiration Date”: March 1, 2028

4. TERM
The term of this Agreement shall commence at 12:00 a.m. on the Commencement Date and shall expire at 11:59 p.m. on the Expiration Date unless extended by written agreement of the Parties or terminated in accordance with Section 22 below.

Enclosure 1
8a
Professional Services Agreement
HdL Software – Business License Tax

5. CONSULTANT’S SERVICES

5.1 Consultant shall perform the services identified in the Scope of Services (Attachment “A”). City shall have the right to request, in writing, changes in the Scope of Services. Any such changes mutually agreed upon by the Parties, and any corresponding increase or decrease in compensation, shall be incorporated by written amendment to this Agreement. In no event shall the total compensation and costs payable to Consultant under this Agreement exceed the sum of Forty-Two Thousand Dollars ($42,000.00) annually unless specifically approved in advance, in writing, by City.

5.2 Consultant shall perform all work to the highest professional standards of Consultant’s profession and in a manner reasonably satisfactory to City.

6. COMPENSATION

6.1 City agrees to compensate Consultant for the services provided under this Agreement, and Consultant agrees to accept in full satisfaction for such services, payment in accordance with the Approved Fee Schedule (Attachment “B”).

6.2 Consultant shall submit to City an invoice, on a monthly basis or less frequently, for the services performed pursuant to this Agreement. Each invoice shall itemize the services rendered during the billing period and the amount due. Within ten (10) business days of receipt of each invoice, City shall notify Consultant in writing of any disputed amounts included on the invoice. Within thirty (30) calendar days of receipt of each invoice, City shall pay all undisputed amounts included on the invoice. City shall not withhold applicable taxes or other authorized deductions from payments made to Consultant.

6.3 Payments for any services requested in writing by City and not included in the Scope of Services shall be made to Consultant by City on a time-and-materials basis using Consultant’s standard fee schedule. Fees for such additional services shall be paid within sixty (60) days of the date Consultant issues an invoice to City for such services.

7. BUSINESS LICENSE
Consultant shall obtain a City business license prior to commencing performance under this Agreement.

Professional Services Agreement
HdL Software – Business License Tax

8. COMPLIANCE WITH LAWS
Consultant shall keep informed of State, Federal and Local laws, ordinances, codes and regulations that in any manner affect those employed by it or in any way affect the performance of its services pursuant to this Agreement. The Consultant shall at all times comply with such laws, ordinances, codes and regulations. Without limiting the generality of the foregoing, if Consultant is an out-of-state corporation or LLC, it must be qualified and registered to do business in the State of California pursuant to sections 2105 and 17708.02 of the California Corporations Code. The City, its officers and employees shall not be liable at law or in equity occasioned by failure of Consultant to comply with this Section.

9. CONFLICT OF INTEREST
Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the services to be performed by Consultant under this Agreement, or which would conflict in any manner with the performance of its services hereunder. During the term of this Agreement, Consultant shall not perform any work for another person or entity for whom Consultant was not working at the Commencement Date if both: (i) such work would require Consultant to abstain from a decision under this Agreement pursuant to a conflict of interest statute; and (ii) City has not consented in writing prior to Consultant’s performance of such work.

10. PERSONNEL
Consultant represents that it has, or will secure at its own expense, all personnel required to perform the services identified in the Scope of Services. All such services shall be performed by Consultant or under its supervision, and all personnel engaged in the work shall be qualified to perform such services. Consultant reserves the right to determine the assignment of its own employees to the performance of Consultant’s services under this Agreement, but City reserves the right, for good cause, to require Consultant to exclude any employee from performing services on City’s premises. Robert Gray, CIO, shall be Consultant’s project administrator and shall have direct responsibility for management of Consultant’s performance under this Agreement. No change shall be made in Consultant’s project administrator without City’s prior written consent.

11. OWNERSHIP OF WRITTEN PRODUCTS
All final reports, documents or other written material (“written products”) developed by Consultant in the performance of this Agreement shall be and remain the property of City without restriction or limitation upon its use or dissemination by City. Consultant may take and retain copies of such written products as desired, but no such written products Professional Services Agreement
HdL Software – Business License Tax

shall be the subject of a copyright application by Consultant. If any state, federal, or local law requires mandatory copyright protection for Consultant’s work product, City shall comply with such laws to the extent feasible.

If access to any software which Consultant owns is provided to City as part of this Agreement (including, without limitation, if City chooses to subscribe to such software and reports option as part of the Services) (such Consultant-owned software is, collectively, the “Software”), Consultant hereby provides a limited, non-exclusive, nontransferable license to City for the use by such of City’s staff as may be designated from time to time by City and approved by Consultant in writing to use the Software pursuant to and during the Term of this Agreement. The Software must only be used by such authorized City staff, and City must not sublicense, sublet, duplicate, modify, decompile, reverse engineer, disassemble, or attempt to derive the source code of the Software. The license granted hereunder does not imply ownership by City or any of City’s staff of the Software nor any rights of City or any of City’s staff to sublicense, transfer or sell the Software, or rights to use the Software for the benefit of others. City may not create (or allow the creation of) any derivative work or product based on or derived from the Software or documentation, nor modify (or allow the modification of) the Software or documentation without the prior written consent of Consultant. In the event of a breach of this provision (and without limiting Consultant’s remedies), such modification, derivative work or product based on the Software or documentation is hereby deemed assigned to Consultant. Upon termination of this Agreement or this Software license, this Software license will be deemed to have expired and City must immediately deactivate, cease using and remove, delete and destroy all the Software (including, without limitation, from City’s computers and network). Consultant warrants that the Software will perform in accordance with the Software’s documentation.

All final documents, preliminary drafts, communications and any and all other work product related to the Services and provided by Consultant to City either in hard copy or electronically are the property of City. This does not include any software, programs, methodologies or systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by Consultant in the course of performing the Services that were not otherwise provided to City in either hardcopy or electronic form, all of which may be protected by Consultant or others’ copyrights or other intellectual property. It is possible that any documents, drafts, communications or other work product provided to City may be considered public records under applicable law and/or may be discoverable through litigation. Consultant may publicly state that it performs the Services for City.

12. INDEPENDENT CONTRACTOR

12.1 Consultant is, and shall at all times remain as to City, a wholly independent contractor. Consultant shall have no power to incur any debt, obligation, or liability on behalf of City or otherwise to act on behalf of City as an agent. Neither City nor any of its officers, employees or agents shall have control over the conduct of Consultant or any of Professional Services Agreement
HdL Software – Business License Tax

Consultant’s employees, except as set forth in this Agreement. Consultant shall not at any time represent that it is, or that any of its agents or employees are, in any manner employees of City.

12.2 The Parties further acknowledge and agree that nothing in this Agreement shall create or be construed to create a partnership, joint venture, employment relationship, joint-employer relationship, or any other relationship between Consultant or Consultant’s employees except as set forth in this Agreement.

12.3 City shall have no direct or indirect control over Consultant’s employees or sub-consultants with respect to wages, hours, and working conditions. In addition, City shall not deduct from the Compensation paid to Consultant any sums required for Social Security, withholding taxes, FICA, state disability insurance or any other federal, state or local tax or charge which may or may not be in effect or hereinafter enacted or required as a charge or withholding on the compensation paid to Consultant, Consultant’s employees or subconsultants. City shall have no responsibility to provide Consultant, its employees or subconsultants with workers’ compensation insurance or any other insurance.

12.4 The Parties further acknowledges the following: (i) that Consultant shall provide the services outlined in the Scope of Services directly to City; (ii) Consultant maintains a business location at the address listed under Section 20 that is separate and distinct from the City; (iii) Consultant contracts with other businesses to provide the same or similar services and maintains a clientele without restriction from the City; (iv) Consultant advertises and holds itself out to the public as available to provide the same or similar services; (v) unless otherwise specified in this Agreement, Consultant provides its own tools, vehicles, and equipment necessary for performing the Scope of Services; (vi) Consultant has proposed and negotiated its own rates; and (vii) consistent with the nature and demands of the project and the City’s business hours, Consultant may set its own hours and location of work.

13. CONFIDENTIALITY
All data, documents, discussion, or other information developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without prior written consent by City. City shall grant such consent if disclosure is legally required. Upon request, all City data and any copies thereof shall be returned to City upon the termination or expiration of this Agreement.

Consultant agrees to comply with the requirements of the applicable laws, ordinances and/or regulations concerning the confidentiality of tax records.

As used herein, the term “proprietary information” means all information, techniques, processes, services or material that has or could have commercial value or other utility in Consultant’s Business, including without limitation: Consultant’s (i) software, computer or data processing programs; (ii) data processing applications, Professional Services Agreement
HdL Software – Business License Tax

routines, subroutines, techniques or systems; (iii) desktop or web-based software; (iv) audit, tax or fee collection/administration or business processes, methods or routines; (v) marketing plans, analyses and strategies; and (vi) materials, techniques and intellectual property used. Except as otherwise required by law, City must hold in confidence and may not use (except as expressly authorized by this Agreement) or disclose to any other party any proprietary information provided, learned of or obtained by City in connection with this Agreement. The terms of this Section do not apply to any information that is public information.

14. NON-LIABILITY OF CITY OFFICIALS AND EMPLOYEES
No official or employee of the City shall be personally liable to Consultant in the event of any default or breach by City, or for any amount which may become due to Consultant.

15. INDEMNIFICATION

15.1 The Parties agree that City, its officers, agents, elected and appointed officials, employees, affiliated public agencies and volunteers should, to the extent permitted by law, be fully protected from any loss, injury, damage, claim, lawsuit, cost, expense, attorneys’ fees, litigation costs, or any other cost arising out of or in any way related to the performance of this Agreement. Accordingly, the provisions of this indemnity provision are intended by the Parties to be interpreted and construed to provide the fullest protection possible under the law to City. Consultant acknowledges that City would not enter into this Agreement in the absence of Consultant’s commitment to indemnify and protect City as set forth herein. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

15.2 To the full extent permitted by law, Consultant shall indemnify, hold harmless and defend City, its officers, agents, elected and appointed officials, employees, affiliated public agencies and volunteers from and against any and all claims, demands, lawsuits, causes of action, losses, costs or expenses for any damage due to death or injury to any person and injury to any property resulting from or arising out of any alleged intentional, reckless, negligent, or otherwise wrongful acts, errors or omissions of Consultant or any of its officers, employees, servants, agents, or subconsultants in the performance of this Agreement. Such costs and expenses shall include reasonable attorneys’ fees incurred by counsel of City’s choice and expert witness fees and consultant fees. Notwithstanding the foregoing, to the extent Consultant's Services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.

Professional Services Agreement
HdL Software – Business License Tax

15.3 City shall have the right to offset against the amount of any compensation due Consultant under this Agreement any amount due City from Consultant as a result of Consultant’s failure to pay City promptly any indemnification arising under this Section 15 or related to Consultant’s failure to either: (i) pay taxes on amounts received pursuant to this Agreement or (ii) comply with applicable workers’ compensation laws.

15.4 The obligations of Consultant under this Section 15 will not be limited by the provisions of any workers’ compensation act or similar act. Consultant expressly waives its statutory immunity under such statutes or laws as to City, its officers, agents, employees and volunteers.

15.5 Consultant agrees to obtain executed indemnity agreements with provisions identical to those set forth here in this Section 15 from each and every subconsultant or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this Agreement. In the event Consultant fails to obtain such indemnity obligations from others as required herein, Consultant agrees to be fully responsible and indemnify, hold harmless and defend City, its officers, agents, elected and appointed officials, employees, affiliated public agencies and volunteers from and against any and all claims, demands, lawsuits, causes of action, losses, costs or expenses for any damage due to death or injury to any person and injury to any property resulting from or arising out of any alleged intentional, reckless, negligent, or otherwise wrongful acts, errors or omissions of Consultant’s subconsultants or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this Agreement. Such costs and expenses shall include reasonable attorneys’ fees incurred by counsel of City’s choice and expert witness fees and consultant fees.

15.6 City does not, and shall not, waive any rights that it may possess against Consultant because of the acceptance by City, or the deposit with City, of any insurance policy or certificate required pursuant to this Agreement. This hold harmless and indemnification provision shall apply regardless of whether or not any insurance policies are determined to be applicable to the claim, demand, damage, liability, loss, cost or expense.

15.7 In no event will CONSULTANT be liable for any lost revenues or lost profits, or any special, incidental, or consequential damages of any nature. CONSULTANT’s duty to indemnify and hold harmless CITY shall not apply to claims for liability which arise from the issuance or nonissuance of any registration, license or permit.

15.7 PERS ELIGIBILITY INDEMNITY. In the event that Consultant or any employee, agent, or subconsultant of Consultant providing services under this Agreement claims or is determined by a court of competent jurisdiction or the California Public Employees Retirement System (PERS) to be eligible for enrollment in PERS as an employee of the City, Consultant shall indemnify, defend, and hold harmless City for the payment of any employee and/or employer contributions for PERS benefits on behalf of Professional Services Agreement
HdL Software – Business License Tax

Consultant or its employees, agents, or subconsultants, as well as for the payment of any penalties and interest on such contributions, which would otherwise be the responsibility of City.

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

16. INSURANCE

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

16.1.1 Comprehensive general liability, and Umbrella or Excess Liability Insurance covering all operations by or on behalf of Consultant providing insurance for bodily injury liability and property damage liability for the following and including coverage for:

16.1.1.1 Premises, operations, and mobile equipment

16.1.1.2 Products and completed operations

16.1.1.3 Broad form property damage (including completed operations)

16.1.1.4 Explosion, collapse, and underground hazards

16.1.1.5 Personal Injury

16.1.1.6 Contractual liability
in the amount of One Million Dollars ($1,000,000) per occurrence combined single limit; Two Million Dollars ($2,000,000) aggregate for products/completed operation; Two Million Dollars ($2,000,000) general aggregate (General aggregate must apply separately to Consultant’s work under this Agreement.); and Five Million Dollars ($5,000,000) umbrella or excess liability.

16.1.2 Automobile Liability Insurance for owned, hired and non-owned Professional Services Agreement
HdL Software – Business License Tax

vehicles utilized by Consultant, its employees or subconsultants, in the amount of One Million Dollars ($1,000,000) per accident for bodily injury and property damage.

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

16.1.4 Professional Liability Insurance against errors and omissions in the performance of the work under this Agreement with coverage limits of not less than One Million Dollars ($1,000,000) per occurrence of claim/ Two Million Dollars ($2,000,000) in the aggregate.

16.2 Consultant shall require each of its subconsultants, if any, to maintain insurance coverage that meets all of the requirements of this Agreement.

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

16.4 Consultant agrees that if it does not keep the aforesaid insurance in full force and effect City may either: (i) immediately terminate this Agreement; or (ii) take out the necessary insurance and pay, at Consultant’s expense, the premium thereon.

16.5 At all times during the term of this Agreement, Consultant shall maintain on file with City’s Risk Manager a certificate or certificates of insurance showing that the aforesaid policies are in effect in the required amounts and, for the general liability and automobile liability policies, naming the City as an additional insured. Consultant shall, prior to commencement of work under this Agreement, file with City’s Risk Manager such certificate(s).

16.6 Consultant shall provide proof that policies of insurance required herein expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Consultant shall provide such proof to City at least two weeks prior to the expiration of the coverages.

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

16.8 The general liability and automobile policies of insurance provided by Professional Services Agreement
HdL Software – Business License Tax

Consultant shall be primary to any coverage available to City. Any insurance or selfinsurance maintained by City, its officers, employees, agents or volunteers, shall be in excess of Consultant’s insurance and shall not contribute with it.

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

16.10 Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of City, Consultant shall either reduce or eliminate the deductibles or self-insured retentions with respect to City, or Consultant shall procure a bond guaranteeing payment of losses and expenses.

16.11 Procurement of insurance by Consultant shall not be construed as a limitation of Consultant’s liability or as full performance of Consultant’s duties to indemnify, hold harmless and defend under Section 15 of this Agreement.

16.12 If Consultant maintains broader coverage and/or higher limits than the minimums shown above, the City requires and shall be entitled to the broader coverage and/or the higher limits maintained by the Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City.

17. MUTUAL COOPERATION

17.1 City shall provide Consultant with all pertinent data, documents and other requested information as is reasonably available to City for the proper performance of Consultant’s services under this Agreement.

17.2 In the event any claim or action is brought against City relating to Consultant’s performance in connection with this Agreement, Consultant shall render any reasonable assistance that City may require.

18. RECORDS AND INSPECTIONS
Subject to applicable law, Consultant is responsible for retaining all final versions of documents and other final work product related to the Services for a period of not less than three (3) years from the date provided to City. Retention of any other documents, preliminary drafts, communications and any and all other work product provided to City by Consultant is the responsibility of City. Consultant has no responsibility to retain any drafts, notes, communications, emails or other writings created or received by City in the course of performing the Services (other than the final documents and other final work product related to the Services and provided to City for the term of years referenced above).

Professional Services Agreement
HdL Software – Business License Tax

19. PERMITS AND APPROVALS
Consultant shall obtain, at its sole cost and expense, all permits and regulatory approvals necessary in the performance of this Agreement. This includes, but shall not be limited to, encroachment permits and building and safety permits and inspections.

20. NOTICES
Any notices, bills, invoices, or reports required by this Agreement shall be deemed received on: (i) the day of delivery if delivered by hand, facsimile, email, or overnight courier service during Consultant’s and City’s regular business hours; or (ii) on the third business day following deposit in the United States mail if delivered by mail, postage prepaid, to the addresses listed below (or to such other addresses as the Parties may, from time to time, designate in writing).

If to City: If to Consultant:

Steve Carmona, City Manager
City of Pico Rivera
PO Box 1016
6615 Passons Blvd.

Pico Rivera, California 90660-1016
Facsimile: (562) 801-4765
George Bonnin
Hinderliter De Llamas & Associates
(HdL)
120 C. State College Blvd.

Suite 200
Brea, CA 92821
(714) 879-5000
With a courtesy copy to:

Arnold M. Alvarez-Glasman, City Attorney
13181 Crossroads Parkway North
Suite 400 - West Tower
City of Industry, CA 91746
Facsimile: (562) 692-2244

21. SURVIVING COVENANTS
The Parties agree that the covenants contained in Sections 13, 15 and Paragraph

17.2 of Section 17, of this Agreement shall survive the expiration or termination of this Agreement.

22. TERMINATION
Professional Services Agreement
HdL Software – Business License Tax

22.1. City shall have the right to terminate this Agreement for any reason on thirty (30) calendar days’ written notice to Consultant. Consultant shall have the right to terminate this Agreement for any reason on thirty (30) calendar days’ written notice to City. The effective date of termination shall be upon the date specified in the notice of termination. Consultant agrees that in the event of such termination, City’s obligation to pay Consultant shall be limited to payment only for those services satisfactorily rendered, as solely determined by the City, prior to the effective date of termination. Consultant agrees to cease all work under this Agreement on or before the effective date of any notice of termination. All City data, documents, objects, materials or other tangible things shall be returned to City upon the termination or expiration of this Agreement.

22.2 If City terminates this Agreement due to no fault or failure of performance by Consultant, then Consultant shall be paid based on the work satisfactorily performed, as solely determined by the City, at the time of termination. In no event shall Consultant be entitled to receive more than the amount that would be paid to Consultant for the full performance of the services required by this Agreement.

23. ASSIGNMENT
Consultant shall not delegate, transfer, subcontract or assign its duties or rights hereunder, either in whole or in part, without City’s prior written consent, and any attempt to do so shall be void and of no effect. City shall not be obligated or liable under this Agreement to any Party other than Consultant.

24. NON-DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY

24.1 In the performance of this Agreement, Consultant shall not discriminate against any employee, subconsultant, or employment applicant because of race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation. Consultant will take affirmative action to ensure that subconsultants, employees, and employment applicants are treated without regard to their race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation.

24.2 Consultant will, in all solicitations or advertisements for employees placed by or on behalf of Consultant state either that it is an equal opportunity employer or that all qualified applicants will receive consideration for employment without regard to race, color, creed, religion, sex, marital status, national origin, ancestry, age, physical or mental handicap, medical condition or sexual orientation.

24.3 Consultant will cause the foregoing provisions to be inserted in all subcontracts for any work covered by this Agreement except contracts or subcontracts for standard commercial supplies or raw materials.

25. WARRANTIES
Professional Services Agreement
HdL Software – Business License Tax

25.1 Each Party has received independent legal advice from its attorneys with respect to the advisability of entering into and executing this Agreement, or been provided with an opportunity to receive independent legal advice and has freely and voluntarily waived and relinquished the right to do so. Each Party who has not obtained independent counsel acknowledges that the failure to have independent legal counsel will not excuse such Party’s failure to perform under this Agreement.

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

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

26. CAPTIONS

26.1 The captions appearing at the commencement of the sections hereof, and in any paragraph thereof, are descriptive only and for convenience in reference to this Agreement. Should there be any conflict between such heading, and the section or paragraph thereof at the head of which it appears, the section or paragraph thereof, as the case may be, and not such heading, shall control and govern in the construction of this Agreement.

26.2 Masculine or feminine pronouns shall be substituted for the neuter form and vice versa, and the plural shall be substituted for the singular form and vice versa, in any place or places herein in which the context requires such substitution(s).

27. NON-WAIVER

27.1 The waiver by City or Consultant of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant or condition herein contained. In no event shall the making by City of any payment to Consultant constitute or be construed as a waiver by City of any breach of covenant, or any default which may then exist on the part of Consultant, and the making of any such payment by City shall in no way impair or prejudice any right or remedy available to City Professional Services Agreement
HdL Software – Business License Tax

with regard to such breach or default. No term, covenant or condition of this Agreement shall be deemed to have been waived by City or Consultant unless in writing.

27.2 Each right, power and remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise shall be cumulative and shall be in addition to every other right, power, or remedy provided for herein or now or hereafter existing at law, in equity, by statute, or otherwise. The exercise, the commencement of the exercise, or the forbearance of the exercise by any Party of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by such Party of any of all of such other rights, powers or remedies.

27.3 Consultant shall not be liable for any failure to perform if Consultant presents acceptable evidence, in City’s sole judgment, that such failure was due to causes beyond the control and without the fault or negligence of Consultant.

28. COURT COSTS AND ATTORNEY FEES
In the event legal action shall be necessary to enforce any term, covenant or condition herein contained, the Party prevailing in such action, whether reduced to judgment or not, shall be entitled to its reasonable court costs, including accountants’ fees and expert witness fees, if any, and attorneys’ fees expended in such action. The venue for any litigation shall be Los Angeles County, California.

29. SEVERABILITY
If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, then such term or provision shall be amended to, and solely to, the extent necessary to cure such invalidity or unenforceability, and in its amended form shall be enforceable. In such event, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.

30. GOVERNING LAW
This Agreement shall be governed and construed in accordance with the laws of the State of California.

31. COUNTERPARTS
This Agreement may be signed in any one or more counterparts all of which taken together shall be but one and the same Agreement. Any signed copy of this Agreement or of any other document or agreement referred to herein, or copy or counterpart thereof, delivered by facsimile or email transmission, shall for all purposes be treated as if it were Professional Services Agreement
HdL Software – Business License Tax

delivered containing an original manual signature of the Party whose signature appears in the facsimile or email and shall be binding upon such Party in the same manner as though an originally signed copy had been delivered.

32. ENTIRE AGREEMENT
All documents referenced as exhibits in this Agreement are hereby incorporated in this Agreement. In the event of any material discrepancy between the express provisions of this Agreement and the provisions of any document incorporated herein by reference, the provisions of this Agreement shall prevail. This instrument contains the entire Agreement between City and Consultant with respect to the transactions contemplated herein. No other prior oral or written agreements are binding upon the Parties.

Amendments hereto or deviations herefrom shall be effective and binding only if made in writing and executed by City and Consultant.
[SIGNATURES ON THE FOLLOWING PAGE]
Professional Services Agreement
HdL Software – Business License Tax

TO EFFECTUATE THIS AGREEMENT, the Parties have caused their duly authorized representatives to execute this Agreement on the dates set forth below. “CITY” “CONSULTANT”

CITY OF PICO RIVERA HINDERLITER DE LLAMAS & ASSOCIATES
(HDL)
______________________________ ___________________________________ Steve Carmona, City Manager Robert Gray, CIO
Dated: ________________________ Dated: _____________________________ ATTEST: APPROVED AS TO FORM:
___________________________ ___________________________________ Anna M. Jerome, City Clerk Arnold M. Alvarez-Glasman, City Attorney Dated: ________________________ Dated: _____________________________ Hinderliter De Llamas & Associates (HdL)
Tax and Fee Administration Services and Fees
Business License Tax and Fees – Tobacco Retailer License 1211802.2 Page 1 of 4

SCOPE OF SERVICES
Consultant will provide the following Services relative to Client’s business license tax administration.

1. Operations Management Services

1.1. Establish and maintain database of Client businesses. The database is maintained by entering data through our proprietary software into our back end sql databases.

1.2. Receive and process applications, renewals and payments in a timely fashion.

1.3. Send renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by Client.

1.4. Provide businesses multiple options for submitting applications, renewals, payments, or support requests (including via website, email, mail, phone, and fax. Consultant license specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).

1.5. Remit revenue to Client no less than monthly.

1.6. Provide Client staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.

1.7. Set up a Tobacco Retailer (TR) account for each existing TR business authorized by the Client. Consultant will also set up TR accounts for new TR business after they are authorized by the Client. The Client will either provide a list of the TR business 30-days before this service is implemented or will provide written authorization based on a list provided by Consultant.

1.8. Send a renewal notice to each existing TR business each year unless informed, in writing, by the Client that a TR is no longer authorized for a particular business or businesses. This notice must be received by Consultant at least 30 calendar days before the renewal notices are scheduled to be sent otherwise Consultant will be deemed to have been authorized to send renewals to any existing TR business.

NOTE: Consultant’s TR service does not include any regulatory reviews or authorization of the TR business. Consultant’s TR scope of service is limited to providing renewal notices and forms, gathering information as requested by the Client, providing that information to the Client for review, and, after receiving written approval from the Client, issuing a certificate evidencing payment. TR scope of service does not include any enforcement activities.

2. Compliance Services – Business License Tax Only: 1) Identify and register businesses which are subject to licensure or taxation, 2) collect known debt as pertains to business license or tax, and 3) identify underreported tax liability.

2.1. Discovery Services

2.1.1.Develop a list of businesses subject to Client licensure or taxation.

2.1.2.Notify non-compliant businesses of their options to comply or dispute their non-compliant status.

Notification and support to businesses will be facilitated through the website, mail, email, phone and fax.

2.1.3.Review information and forms submitted by the business for completion and accuracy, inclusive of any additional required documentation (i.e. home occupation permit). All submissions are filed and stored electronically and made available to Client upon request.

2.1.4.Provide businesses with detailed invoicing and options to pay via website, mail, and phone.

2.1.5.Remit revenue to Client no less than monthly, along with all business applications and any additional documentation.

2.2. Collection Services

2.2.1.Identify businesses subject to Client licensure or taxation which have known debt to Client and have failed to pay within an appropriate time frame.

2.2.2.Notify businesses of their options to comply or dispute their non-compliant status.

Exhibit A
Hinderliter De Llamas & Associates (HdL)
Tax and Fee Administration Services and Fees
Business License Tax and Fees – Tobacco Retailer License 1211802.2 Page 2 of 4

2.2.3.Provide businesses with detailed invoicing and options to pay via website, mail and phone.

2.2.4.Remit revenue to Client no less than monthly.

2.3. Audit Services

2.3.1. Identify potential under-reporting and/or misclassified businesses. Consultant will develop a workplan for identifying potential businesses for audit and will submit the workplan to Client for review and collaboration.

2.3.2.Audit businesses mutually agreed to by Client and Consultant that are identified as potential under-reporting businesses.

2.3.3.Submit audit summaries to Client and discuss further actions.

2.3.4.Educate businesses on proper reporting practices.

2.3.5.Invoice and collect identified delinquencies.

3. Online Payment Processing – Consultant’s services include PCI compliant payment processing services powered by FIS Global, which supports both credit card and eCheck transactions.

3.1. Client Responsibilities

3.1.1.As a condition to its receipt of the Service, Client shall execute and deliver any and all applications, agreements, certifications or other documents required by FIS Global, Networks or other third parties whose consent or approval is necessary for the processing of Transactions by FIS Global. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.

3.1.2.Client hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction report. Client represents and warrants that it has the full right and authority to grant these rights.

FEES

4. Operations Management Services

4.1. Fees for performing operations management Services shall be as follows:
• $16.00 for each processed business license tax account, which is any business license tax account for which an application or renewal/return was processed, or active account which was sent a renewal notice.
• Tobacco Retailer License Administration - $3,000.00/year + CPI. Additional processes outside of the standard scope of Tobacco License Administration will require written statement of work authorization.

4.2. Fees will be increased as of January 1st of each calendar year with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPIU), West Region, as reported by the U.S. Bureau of Labor Statistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change. For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.

4.3. Fees related to travel and lodging expenses are billed at cost and apply to all meetings (including implementation, training, operations and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by Client.

Hinderliter De Llamas & Associates (HdL)
Tax and Fee Administration Services and Fees
Business License Tax and Fees – Tobacco Retailer License 1211802.2 Page 3 of 4

4.4. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to Consultant within 30 days of receiving the invoice.

5. Compliance Services

5.1. Fees for performing compliance Services apply to all monies received for the current tax/license period and any other prior period collected (including monies received for taxes, penalties, interest, and fees).

5.1.1.Fees for performing discovery Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.

5.1.2.In the event that Client discovers a non-compliant business and reports the business to Consultant (including a calculation of all taxes/fees due), Consultant will categorize the business as a collection service effort and thus apply the lower collection Services contingency Fee rate.

5.1.3.Fees for performing collection Services shall be a contingency Fee of 25% of the revenues received as a result of the Services.

5.1.4.Fees for performing audit Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.

5.2. Consultant recognizes Client’s authority to waive or reduce the tax/fee debt of a business. Should Client decide to do so for a business whose deficiency was identified by Consultant, Consultant shall be entitled to compensation in the amount of one half (1/2) of the Fees Consultant would have otherwise earned. Deficiencies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e. statute of limitation or other legal defense) shall not be considered a Client voluntary election to waive, and thus, Consultant would not be entitled to compensation related thereto under this provision.

5.3. Fees related to travel and lodging expenses are billed at cost and applied to all meetings (including implementation, training, operations, and support). Travel expenses only apply to out of scope travel and must therefore be pre-approved by Client.

5.4. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to Consultant within 30 days of receiving the invoice.

6. Payment Processing – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or Client funded model, as directed by Client. Client may switch between these models upon written request to Consultant. Fees for each of these payment processing models are detailed here.

6.1. Taxpayer funded model – Client authorizes Consultant to collect each convenience fee from the taxpayer at time of payment.

6.1.1.Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00

6.1.2.ACH/eCheck processing - $1.25 per transaction

6.2. Client funded

6.2.1.Credit and debit card processing – 2.9% of transaction amount

6.2.2.ACH/eCheck processing - $0.50 per transaction

6.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayers account.

6.4. Consultant reserves the right to review and adjust pricing related to payment processing services on an annual basis. Consultant will communicate any such adjustment to Client in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, Hinderliter De Llamas & Associates (HdL)
Tax and Fee Administration Services and Fees
Business License Tax and Fees – Tobacco Retailer License 1211802.2 Page 4 of 4
bank/processor dues and assessments, average consumer payment amounts, card type utilization, and costs of service.

IN WITNESS WHEREOF, the parties hereto have entered into this Schedule D to the MSA through their duly authorized representatives as of ___________, 2023.

CONSULTANT:

Hinderliter De Llamas & Associates (HdL)
By: _________________________
Its: _________________________
CLIENT:

City of Pico Rivera, CA
By: ________________________
Its: ________________________
To: Mayor and City Council
From: City Manager
Meeting Date: February 14, 2023
Subject: FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022
Recommendation:

1. Receive and file the Mid-Year Budget Report ending December 31, 2022, which represents the balances and activity for the first and second quarters (July through December) of the 2022-23 fiscal year;

2. Approve Budget Adjustments amending the fiscal year (FY) 2022-23 Adopted Budget for the General Fund and Other Funds as outlined in Enclosures 1 - 4 of this report; and

3. Approve Position Reclassifications amending the fiscal year (FY) 2022-23 Adopted Authorized Positions Full-Time Equivalent (FTE) as outlined in Enclosure 5 of this report.

Fiscal Impact:

The Mid-Year Report shows current revenues and expenditures for the first six (6) months of this FY 2022-23. The FY 2022-23 adopted budget anticipated that General Fund Revenues would be $51,833,428. The recommended General Fund Budget Adjustments listed in Enclosure 1 require additional appropriations of $180,000 in revenue that offsets the expenditures appropriations. It also requires additional transfers-out of $328,000 to the Liability Claims and Workers’ Compensation Claims funds. The Other Funds Budget Adjustments listed in Enclosure 2 require additional appropriations of $60,560 and the Capital Improvement Funds Budget Adjustments listed in Enclosure 3 require additional appropriations of $110,000 being requested at this time. The approved Cost-of-Living Adjustments (COLA) totals $530,084 for FY 2022-23, that was approved subsequent to FY 2022-23 Budget Adoption. This amount represents the additional compensation costs as listed in Enclosure 4. In addition, Enclosure 5 outlines the Position Reclassifications being requested that were fully funded in the FY 2022-23 Adopted Budget and therefore do not require any additional appropriations.
9 CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Background:

The City Council adopted the balanced Year-Two of the FY 2021-23 Biennial Budget on June 28, 2022. As this biennial budget (FY 2021-23) was approved by City Council in June 2021, our work in Year-Two of the Biennial Budget is to make any known adjustments and corrections. This mid-year budget performance report for FY 2022-23 includes the six (6) month period beginning July 1, 2022, through December 31, 2022, and year-end projections for the remaining six (6) month period of fiscal year from January 1, 2023 through June 30, 2023. This report summarizes the City of Pico Rivera’s (City) overall financial position for the current fiscal year and provides quarterly public reporting, with an emphasis on the General Fund. By December 31, 2022 the expectation is that most budget categories will be at 50%, although this may fluctuate based on timing of certain receipts and expenditures/projects. At the end of the third quarter (March 31, 2023), staff will conduct another review of revenues and expenditures and provide updates to City Council.

The Mid-Year Budget Report provides an in-depth assessment of the City’s revenues and expenditures during the first half of the fiscal year and provides projections of the fiscal year end results, which serve as the starting point for the refinement of next year’s budget. The Mid-Year review allows the City to monitor its revenues and expenditures, with the intent to proactively respond to unanticipated changes and emerging trends. It also provides fiscal transparency of the City’s finances as the City is ultimately accountable to its residents for the use of revenue. The Mid-Year Budget Review is an important touchstone in the City’s monitoring of its economic condition and ensuring fiscal sustainability.

Discussion:

Based on the first six (6) months of activity, the Mid-Year outlook is positive, but the City remains in a period of uncertainty driven by inflation, increases in interest rates, and ongoing trends impacting the retail sector. The City has been continuously working to avoid negative impacts from future economic downturns, by developing and monitoring responsible and strategic budgets that provide essential services to our residents and fulfill City Council priorities. These efforts ensure the City maintains current and future financial sustainability and security. A detailed analysis highlighting the major changes will be presented in this report.

Mid-Year Accomplishments
City staff compiled a mid-year review of department accomplishments half-way through FY 2022-23. These accomplishments highlight the progress of departments working toward a range of City Council goals and priorities, including federal and state legislative advocacy, city legislative action, funding allocation, City development and community outreach and engagement. Although this is not a comprehensive list of all accomplishments, it provides a summary of our most notable achievements.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Administration
• Successfully held Virtual City Hall Citywide Sweepstakes with 22 winners of various prizes that included Disneyland gift cards, Knott’s Berry Farm gift cards, Pico Rivera Golf Club Packages and Citizen Folding Bikes. • City Council presented the community revitalization program to the Pico Rivera Chamber of Commerce that included several community revitalization efforts such as Historic Whittier Blvd Revitalization Program.
• Successfully held the Veterans Resource Center Meet and Greet event and appointed Veterans Resource Officer appointments.

City Clerk
• Successfully held General Municipal Elections and approved the Certificate of Canvass and Statement of Votes Cast provided by the Los Angeles County Registrar-Recorder/County Clerk.
• Successfully held City’s record retention and bi-annual records clean-up.

Office of Sustainability
• Successfully held NASA Services and GO2Zero Strategies Community Recycling and Organics Training that provided information that covered state laws and regulations related to waste and recycling, container colors for all material streams, proper sorting and separating of recyclables, contaminations, procedures for correcting, and types of acceptable bags for organics and recycling containers.
• Received the highest recognition GOLD Energy Action Award form Gateway Cities Council of Governments recognizing the City for their actions to improve energy efficiency and sustainability efforts.

Administrative Services
• Received the Government Finance Officers Association (GFOA) Award for Excellence in Financial Reporting for FY 2020-21 Annual Comprehensive Financial Report (ACFR).
• Successfully implemented the credit card tracking and reconciliation application TravelBank.
• Obtained a rating of “low risk” by the California State Auditor’s Office (State Controller) due to our commitment to prudent fiscal practices and long-term strategic planning. The City remains the highest-ranked among the neighboring 10 cities.
• Completed Collective Bargaining with Labor Groups “Negotiations”. • Published the Pico Rivera FY 2021-22 Accomplishments Report brochure. • Approved Biennial Budget Calendar for FY 2023-24 and FY 2024-25.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Community and Economic Development
• Issued 13 grants for the Small Business Grant program Round 3, to small businesses operating within Community Development Block Grant eligible areas impacted from COVID-19.
• Successfully presented the 5-year Permanent Local Housing Allocation (PLHA) plan to City Council that outlines how the City will utilize the grant funds. • Successfully worked with Habitat for Humanity to provide Pico Rivera resident with critical roof repairs.
• City officials met with the American Heart Association to discuss the City’s flavored tobacco ban and State of California’s passage of Proposition 31, which upholds SB 793 and bans flavored tobacco state-wide.
• Successfully held the American Red Cross Blood Drive.

Human Resources
• Since COVID-19 remains fluid, staff has continuously updated the COVID-19 Prevention Plan to ensure a safe work environment.
• Accelerated job recruitments, able to recruit 25 positions, including two (2) Directors.

Parks & Recreation
• Successfully brought back in-person Special Events such as National Night Out, Fiestas Patrias, Boxfest Round 7, Halloween Spooktacular, and the Holiday Festival & Tree Lighting. A total of eight (8) special events were hosted with over 21,000 attendees in total.
• Successfully held a Community Backpack Giveaway that provided City of Pico Rivera youth with free school supplies, haircuts, COVID-19 vaccines. • Successfully held Mayor’s Empowerment Conference for Young Men. • Successfully held the annual Holiday Food Giveaway to a total of 4,146 individuals.

Public Works
• Successfully completed the Senior Center Americans with Disabilities Act (ADA) Parking Lot Improvement project that includes new ADA amenities, resurfaced pavement, and restriped parking stalls.
• Public Works Field Maintenance staff completed yearly winter field maintenance on all fields at all City parks.
• Awarded $6.5 million grant from Metro for Washington Blvd Bridge Reconstruction and the Pico Rivera Regional Bikeway.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

General Fund Mid-Year Review – Six Months through December 31, 2022 Revenues
General Fund revenues through the halfway point (second quarter) total $22.35 million, or 43% of the $52.01 million Amended Budget, compared to $20.02 million at FY 2021- 22 Mid-Year. General Fund revenues are not received evenly throughout the year, so revenue received through the second quarter is not expected to be 50% of the total budget. Staff projects that General Fund revenue will come within the amended budget for all revenue categories except for the Licenses and Permits as outlined in Enclosure 1 (See Table 1).

The General Fund has several sources of revenue, four (4) major categories including Sales Tax, Property Tax and Utility Users Tax, with Licenses and Permits. Table 1 below shows revenues by category.

Sales Tax is the largest source of revenue for the General Fund, representing 49.5% of total General Fund Operating Revenue. The Sales Tax revenue increased by $526,687, or 6% as compared to this same period last year due to the City continuing to recover economically in major sales tax generating groups including Fuel and Service Stations and Business and Industry. Although the favorable number may be indicative of a positive local economy, it’s important to note the attributed growth is in large part the result of higher priced goods due to inflation. Measure P also continues to show growth due to inflation and demand. The prices of gasoline at the pumps have spiked, and this has resulted in a boost in the sales tax associated with the fuel and service station sector. The City has experienced a strong rebound from the Business and Industry category likely due to strong demand and high cost of materials as employees streamed back to office buildings after the pandemic. New store openings within the City, such as Burlington Coat Factory also lifted the general consumer goods category.

Property Tax is the second largest General Fund revenue source, a net taxable value increase of 7.4% for the FY 2022-23 tax roll that was actually more than the increase countywide at 7.0%. The median sale price of a detached single family residential home in Pico Rivera from October through December 2022 was $660,000. This represents a $20,000 or 3.1% increase in median sale price from the same period in 2021. Growth in home sales strengthened in 2021 and early 2022 and is reflected on the FY 2022-23 tax rolls. Concerns over rising interest rates and inflation are decreasing the volume of home sales. For many cities, median prices have decreased slightly in recent months, but still represent increases in sale price when compared to the prior year.

Utility Users Tax (UUT) is higher by $130,705 as compared to the same time last fiscal year primarily due to an increase in usage and pricing of electric and natural gas billed charges. When comparing prices of Electricity per Kilowatt Hour (EKH) and Utility (piped) gas per therm (UGT), the Bureau of Labor Statistics shows EKH went up 9% in CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

the Los Angeles Area and UGT went up 19%. While this trend shows an increase in energy pricing, it is too early to tell whether this will result in total UUT to exceed budget estimates. Staff will continue to monitor and include any new estimates in the FY 2022- 23 Third Quarter Review.

Licenses and Permits are slightly lower by $24,756 in FY 2022-23 as compared to FY 2021-22 primarily due to a higher number of Dog Licenses issued in FY 2021-22, during the pandemic. Staff recommends an increase of $180,000 in the General Fund Licenses and Permits budget due to a projected increase in Plan Check fees from an anticipated development.

Business License Tax revenue is higher at mid-year in FY 2022-23 as compared to FY 2021-22 by $114,372 primarily due to an increase in new businesses obtaining business licenses and renewals. The voter approved Measure AB, modernizes the City’s Business license fee structure, and is set to begin January 2023. Actual receipts have not been realized as staff continues to work with the Business License consultants for accurate estimates. Therefore, staff will continue to monitor this and will report in the third quarter with better estimates.

Parks and Recreation revenues are higher by $158,193 as compared to this period in FY 2021-22, primarily due to COVID-19 pandemic restrictions being lifted and the expansion of recreation programs and contact class offerings in FY 2022-23. Staff will continue to monitor this and expects to be come in within budget.

All Other Revenues is coming in higher by $1.06 million as compared to this period last fiscal year primarily due to Sales of Property, Miscellaneous Revenue, and Cost Reimbursements. The one-time revenue for Sales of Property is for the sale of a vacated site. Miscellaneous Revenue category increase includes the one-time recognition of unclaimed deposits, and the Cost Reimbursement increase is attributed to State reimbursement receipts.

Overall, General Fund revenues are projected to end the year approximately $180,000 or 1% higher than what was budgeted at the start of the fiscal year for a total FY 2022- 23 revenue projection of approximately $52,197,508. This is primarily attributed to increased revenue in Licenses and Permits, as described above, and outlined in Enclosure 1. Staff will continue to monitor the revenue trends for the remainder of the fiscal year and modify the year-end estimate, if necessary, during our third quarter review.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Table 1. General Fund Revenues by Category
Revenue Source
FY 21-22

MID-YEAR

ACTUALS
FY 22-23

ADOPTED
FY 22-23

AMENDED
FY 22-23

MID-YEAR

ACTUALS
FY 22-23

YEAR-END

PROJECTIONS
$
FY 21-22
vs.

FY 22-23

MID-YEAR
%
FY 21-22
vs.

FY 22-23

MID-YEAR

YEAR-END

VARIANCE
Sales Tax 7,655,617 24,482,589 24,482,589 8,182,304 24,482,589 526,687 6% - Property Tax 5,924,695 13,044,410 13,044,410 6,264,929 13,044,410 340,234 5% - Utility Users Tax 1,782,402 3,159,400 3,159,400 1,913,107 3,159,400 130,705 7% - Franchise Tax 98,231 970,000 970,000 92,447 970,000 (5,784) (6%) - Transient Occupancy Tax (TOT) 244,284 565,020 565,020 247,622 565,020 3,338 1% - Business License Tax 527,602 1,459,062 1,459,062 641,975 1,459,062 114,372 18% - Parks & Recreation Fees 68,775 378,033 378,033 226,968 378,033 158,193 70% - Licenses & Permits 1,064,206 2,166,564 2,166,564 1,039,450 2,346,564 (24,756) (2%) 180,000 All Other Revenues* 1,841,655 3,783,050 3,967,130 2,910,047 3,967,130 1,068,392 37% - OPERATING REVENUE 19,207,468 50,008,128 50,192,208 21,518,849 50,372,208 2,311,381 11% 180,000 Cares Act 28,703 - - - - (28,703) 0% -
Transfers In** 783,845 1,825,300 1,825,300 837,756 1,825,300 53,911 6% - TOTAL - GENERAL FUND REVENUE 20,020,016 51,833,428 52,017,508 22,356,605 52,197,508 2,336,589 10% 180,000 *Includes Fines & Forfeitures, Charges for Services, Use of Money, Other Revenue, and Intergovernmental Revenue **Includes Transfer In (Gas Tax)
Expenditures
General Fund expenditures through the halfway point (second quarter) total $27.50 million, or 47% of the $58.16 million Amended Budget. Most departments had increases from the prior year primarily in Salaries and Benefits by $852,334 due to Cost-of-Living Adjustment (COLA), merit increases, and filling vacancies in various City departments. On September 13, 2022, the City Council approved a Memorandum of Understanding (MOU) between the City of Pico Rivera and two (2) Full-time employee bargaining groups, Professional and Confidential Employee Association (CEA) and Service Employees’ International Union 721 (SEIU). The approved MOU included an annual COLA salary increase of 4% July 2021, 3% July 2022, and an additional 3% July 2023. FY 2022-23 is the second year of the MOU. The anticipated COLA increase for FY 2022-23 is approximately $530,084 to salaries and additional employer costs. The Maintenance and Operations costs in the General Fund departments increased by $2.28 million as compared to this same period last year largely due to the prefunding increase in of contributions to the City’s Public Employees Retirement (PERS), Contracted Services increases, and more programs/services being offered as described below.

Discussion of Departments with significant variances from the prior year are as follows:

• Administration mid-year expenditures are higher compared to the same period last year, due to COLA increases and increases in usage and costs for City Attorney services, Advertising and Publication services, and Government Relations Consulting services. It is expected to meet budget expectations by the end of the year.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

• Public Safety Los Angeles County Sheriff’s Department (LASD) is tracking slightly higher compared to the same period last year primarily due to contract increases and the Automated License Plate Reader (ALPR) program. It is expected to come within budget by the end of the year.
• Administrative Services is slightly higher compared to last fiscal year due to COLA increases, filling vacant positions, and software expenses from multiple departments being moved under the IT division for proper monitoring and implementation. The IT division is also working on the projects as part of the IT Assessment. Additional increases are due to some annual costs, such as the City’s Financial Auditors and Property Tax Consultant invoices being expensed in the beginning of the fiscal year. It is expected to meet budget expectations by year-end.
• Community & Economic Development is tracking slightly higher by 3% compared to the same period last year primarily due to COLA increases and filling employee vacancies this fiscal year. Maintenance and Operations costs are tracking lower than last year primarily attributed to Professional and Contracted Services in various divisions such as Planning, Economic Development, and Emergency Preparedness programs and projects that will be expensed later in the fiscal year. It is expected to meet budget expectations by the end of the fiscal year.
• Non-Departmental expenditures are higher compared to this same period last year primarily due to the timing of the Debt Service payments expensed later in FY 2021-22. When accounting for the Debt Service payments, the variance is approximately $99,900. The most notable increase is due to the $163,000 prefunding of the City’s Public Employees Retirement (PERS) costs in FY 2022-

23. Other notable citywide increases are due to annual Group Health and General Liability rate increases. The General Liability expenses have been moved under the Non-Departmental Division this fiscal year, which was previously under the Human Resources Department. The additional increase also includes the funding of the Equipment Replacement Fund with the intention to contribute to the long-term equipment replacement needs of the city. It is expected to meet budget expectations by the end of the fiscal year. • Human Resources expenditures are lower in the Salaries and Benefits category due to the vacant Director position for the first half of the fiscal year. The Maintenance and Operations costs are lower due to the General Liability expenses being moved to Non-Departmental as a citywide expenditure and Contracted Services and Legal Services to be expensed later in the fiscal year.

It is expected to come within budget at year-end.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

• Parks & Recreation has increased expenditures as compared to last fiscal due to COVID-19 restrictions lifting and more programs/services being offered. The increase to Salaries and Benefits are primarily due to COLA increases and hourly salaries for staff returning to work. The Maintenance and Operations increases are primarily due to Special Events such as the Summer Street Fest, Veteran’s Day Event, and Holiday Tree Lighting Event, along with Contracted Services costs for additional programming and services being offered. Although as compared to last fiscal year, the Parks & Recreation department expenditures have increased, they are expected to meet budget expectations by end of the year.
• Public Works is tracking higher compared to this same period last fiscal year primarily due to COLA increases, filling vacant positions, and overtime costs.

The Maintenance and Operations costs increase is attributed to rising costs for supplies and services such as Contracted Services and Professional Services for street sweeping, tree trimming services, traffic engineering professional services, Geographic Information System (GIS) professional services, Heating, Ventilation, and Air Conditioning (HVAC) services, Janitorial services, Fleet Maintenance and repairs, and the project management consulting services. It is expected to come within budget by the end of the year.
• Operating Transfers Out includes the $1.065 million Sales Tax Pledge from the General Fund to the Successor Agency (Fund 851).
• Non-Operating Transfers Out includes the $1.835 million and $1.147 million for funding of Community & Economic Development Strategic Projects and General Fund Capital Improvement Projects.

Table 2 shows expenditures by Department.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Table 2. General Fund Expenditures by Department

DEPARTMENT / EXPENDITURE CATEGORY
FY 21-22

MID-YEAR

ACTUALS
FY 22-23

ADOPTED
FY 22-23

AMENDED
FY 22-23

MID-YEAR

ACTUALS
$
FY 21-22
vs.

FY 22-23

MID-YEAR

ACTUALS
%
FY 21-22
vs.

FY 22-23

MID-YEAR

ACTUALS
Percentage of
Budget Used

ADMINISTRATION
Salaries & Benefits 755,251 1,597,743 1,622,835 890,765 135,514 18% Maintenance & Operations 155,945 621,675 1,458,313 305,718 149,773 86% TOTAL ADMINISTRATION 911,196 2,219,418 3,081,148 1,196,483 285,287 31% 39% Public Safety 6,089,195 12,854,647 13,398,518 6,417,158 327,962 5% 48%

ADMINISTRATIVE SERVICES
Salaries & Benefits 725,418 2,126,529 2,009,478 860,902 135,484 17% Maintenance & Operations 224,488 805,997 1,251,182 405,537 181,049 426% TOTAL ADMINISTRATIVE SERVICES 949,905 2,932,526 3,260,660 1,266,439 316,533 38% 39%

COMMUNITY & ECONOMIC DEVELOPMENT
Salaries & Benefits 1,526,076 3,870,328 3,948,041 1,765,506 239,430 13% Maintenance & Operations 486,295 3,642,837 4,144,456 312,960 (173,335) (85%) TOTAL COMMUNITY & ECONOMIC DEVELOPMENT 2,012,372 7,513,165 8,092,497 2,078,466 66,094 3% 26% Non-Departmental 3,178,026 6,807,390 6,260,939 4,699,499 1,521,473 49% 75%

HUMAN RESOURCES
Salaries & Benefits 341,764 670,160 634,795 276,583 (65,181) (15%) Maintenance & Operations 270,749 386,632 435,632 168,814 (101,935) (52%) TOTAL HUMAN RESOURCES 612,513 1,056,792 1,070,427 445,397 (167,116) (26%) 42%

PARKS & RECREATION
Salaries & Benefits 2,124,959 5,131,020 5,207,327 2,251,594 126,634 6% Maintenance & Operations 345,512 1,158,541 1,750,496 617,531 272,019 116% TOTAL PARKS & RECREATION 2,470,471 6,289,561 6,957,823 2,869,124 398,653 17% 41%

PUBLIC WORKS
Salaries & Benefits 2,210,119 5,266,887 5,308,112 2,490,573 280,454 11% Maintenance & Operations 1,889,611 4,680,347 6,415,768 1,995,258 105,647 7% TOTAL PUBIC WORKS 4,099,730 9,947,234 11,723,880 4,485,831 386,101 10% 38% GENERAL FUND OPERATING EXPENDITURES 20,323,409 49,620,733 53,845,892 23,458,397 3,134,988 16% 44% TOTAL Salaries & Benefits 7,683,588 18,662,667 18,730,588 8,535,922 852,334 TOTAL Maintenance & Operations 12,639,821 30,958,066 35,115,304 14,922,475 2,282,654 20,323,409 49,620,733 53,845,892 23,458,397 3,134,988 16% 44% Operating - Transfers Out 1,065,000 1,065,000 1,065,000 1,065,000 - 0% Non-Operating - Transfers Out 5,000,000 1,147,695 3,252,695 2,982,695 (2,017,305) 0% TOTAL - GENERAL FUND EXPENDITURES 26,388,409 51,833,428 58,163,587 27,506,092 1,117,683 6% 47% General Fund Citywide
At the end of the second quarter or halfway point, expenditures exceed revenues due to upfront expenditures such as funding General Fund Capital Improvement Projects, OPEB, COLA increases, and Contracted Services. The mid-year report is developed using six (6) months of actual (unaudited) activity for FY 2022-23. An update will be provided in the FY 2023-23 third quarter budget results. Except for the identified variances, expenditures and revenues are tracking as expected. Table 3 below summarizes the total General Fund revenues and expenditures citywide.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Table 3. General Fund Revenues and Expenditures Citywide Totals FY 21-22

MID-YEAR

ACTUALS
FY 22-23

ADOPTED
FY 22-23

AMENDED
FY 22-23

MID-YEAR

ACTUALS
FY 22-23

YEAR-END

PROJECTIONS
$
FY 21-22
vs.

FY 22-23

MID-YEAR

ACTUALS
%
FY 21-22
vs.

FY 22-23

MID-YEAR

ACTUALS

YEAR-END

VARIANCE
REVENUE* $ 20,020,016 $ 51,833,428 $ 52,017,508 $ 22,356,605 $ 52,197,508 $ 2,336,589 10% 180,000 $ EXPENDITURES** 20,323,409 49,620,733 53,845,892 23,458,397 54,025,892 3,134,988 13% 180,000 SUBTOTAL (303,393) 2,212,695 (1,828,384) (1,101,792) (1,828,384) (798,399) 72% - OPERATING TRANSFERS OUT 1,065,000 1,065,000 1,065,000 1,065,000 1,065,000 - 0% - NON-OPERATING TRANSFERS OUT (ONE-TIME) 5,000,000 1,147,695 3,252,695 2,982,695 3,252,695 (2,017,305) (68%) - SURPLUS / (DEFICIT) $ (6,368,393) $ - $ (6,146,079) $ (5,149,487) $ (6,146,079) $ 1,218,906 (24%) $ - 51,833,428
*Includes Non-Operating Transfers In (Gas Tax and Intergovernmental Transfers) **Includes Vacancy Savings

The Administrative Services Department conducted a four (4) year comparison of the mid-year of FY 2019-20 through mid-year of FY 2022-23 in Graph 1. The mid-year of FY 2019-20 shows pre-pandemic revenues and expenditures that are considered under normal operations. The mid-year of FY 2020-21 was during the pandemic impacted the budget with unexpected expenses and significant uncertainty about how long the pandemic would last. FY 2021-22 is the reduced impact of the pandemic and allowing operations to align more closely with pre-pandemic budgets. FY 2022-23 mid-year shows the impact of inflation and increasing interest rates for both revenues and expenditures.

Graph 1. Mid-Year 2019 Actuals through Mid-Year 2023 Actuals CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

General Fund Budget Adjustments (Enclosure 1):

The FY 2022-23 General Fund Budget was adopted as a balanced budget of $51,833,428 in revenues and expenditures. Since its adoption, certain unavoidable costs have been identified and are being recommended for budget adjustments as outlined in Enclosure 1 for the General Fund. With the anticipation of new developments, staff is recommending a budget adjustment of $180,000 in the revenue and expenditure accounts for Plan Check services. The expenditure adjustment is offset by the increase in revenue from Developers requesting Plan Check services.

There is also an additional transfers-out of $328,000 to the Liability Claims (Fund 105) and Workers’ Compensation Claims (Fund 106) funds to cover expenditures for the remainder of the fiscal year. Detailed analysis is included in the section below.

Other Funds Budget Adjustments (Enclosure 2):

In reviewing the City’s Other Funds, staff identified the need to allocate claims payments in FY 2022-23 to the General Fund. As there are deficits of $84,515 that exists in the Liability Claims Fund and $104,505 in the Workers’ Compensation Claims Fund as of December 31, 2022, staff is recommending a budget adjustment of $156,500 and $171,500 for a total of $328,000 in the transfers-in and expenditure accounts for the remainder of the fiscal year as detailed in Enclosure 2. The expenditure adjustments have a net impact of $0 for Fund 105 and Fund 106 due to the Transfers-in from the General Fund. Additionally, due to anticipated project costs and an increase in costs and services, staff is recommending budget adjustments of $60,560 for Fund 205 and Fund 291 in expenditures as outlined in Enclosure 2.

Capital Improvement Funds Budget Adjustments (Enclosure 3):

The City has a five-year capital improvement program (CIP) that encompasses includes improvements for streets, bridges, and roadways, parks and open spaces, storm water quality, water production, treatment and delivery, sanitary sewer, City buildings, and other large-scale capital projects. A review of these project is conducted as part of the FY 2022-23 Mid-Year Budget Review. Upon analysis, various capital improvements projects require minimal mid-year adjustments to expenditures totaling $110,000 as outlined in Enclosure 3.

Per the City’s Municipal Code 17.36.40, the City can use the Park Development Fund to purchase necessary land for providing park and recreation to the community. The City has collected approximately $227,000 from Park Development fees. On December 13, 2022, the City Council approved the transfer of $270,000 from the General Fund to the Capital Improvement Plan (CIP) Fund to purchase PAD Park. As the land deed restriction requires it to remain a park and recreation space for 30 years, staff determined that the Park Development fund can be utilized to acquire the PAD Park.

Staff recommends transferring $227,000 to the CIP Fund for the purchase and transferring $227,000 from the CIP Fund back to the General Fund for other imminent needs as outlined in Enclosure 3.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

COLA Budget Adjustments (Enclosure 4):

As previously discussed, the updated MOU with the City’s two (2) bargaining groups, CEA and SEIU, was approved on September 13, 2022 subsequent to the adoption of the FY 2022-23 Adopted Budget. The approved COLA adjustment totals $530,084 for FY 2022-23. This amount represents the fully burdened cost, taking into account not only higher salaries for the full-time employees, but also the additional employer PERS costs and Medicare costs associated with the higher salaries as detailed in Enclosure 5.

Underfilled Positions (Personnel) Adjustments (Enclosure 5):

To support City operations, filling vacant positions as efficiently and effectively as possible is essential to meet the objectives and goals of Departments. Under certain circumstances, the need to underfill positions may arise. Underfilling is defined as the filling of a position with an employee holding a lower classification. Underfilling positions requires that the position being underfilled is a closely related title, at a lower grade level. The following underfilled positions outlined in Enclosure 4 have no fiscal impact due to all the positions being fully funded in the FY 2022-23 Adopted Budget.

To carry out the strategies in the City Council priorities and guiding principles, four (4) positions are being recommended to be underfilled with lower costs positions. The positions are listed below by department:

Administration – Office of Sustainability (1 Position):
• The Office of Sustainability Division’s appointed Director resigned from the City in July 2022. Since then, the Administration Department has assessed the current needs of the City and is recommending not filling this position and, alternatively, underfilling it with a Principal Analyst (General Manager). The Adopted FY 2022- 23 Full-Time Equivalent (FTE) Positions includes the Director – Office of Sustainability position. The FTE list will be formally adopted to reflect the change from a Director to a Principal Analyst position at the FY 2022-23 Mid-Year Budget Review presented to City Council.

Administrative Services (1 Position):
• The Administrative Services Department experienced difficulties in recruiting for the Finance Technician position with qualified candidates and therefore, made the determination to underfill the position with an Account Clerk III position. The Adopted FY 2022-23 FTE Positions includes the Finance Technician position.

The FTE list will be formally adopted to reflect the change from a Technician to an Account Clerk III position when the FY 2022-23 Mid-Year Budget Review is presented to City Council.

Community and Economic Development (1 Position):
• The Community and Economic Development Department experienced difficulties in recruiting for the Principal Planner position with qualified candidates and therefore, made the determination to underfill the position with a Senior Planner CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

position. The Adopted FY 2022-23 FTE Positions includes the Principal Planner position. The FTE list will be formally adopted to reflect the change from a Principal Planner to a Senior Planner position at the FY 2022-23 Mid-Year Budget Review presented to City Council.

Parks and Recreation (1 Position):
• The Manager position has been vacant since the FY 2022-23 Budget was adopted. To support the operations within the Media and Communications Division of the Parks and Recreation Department, staff is recommending underfilling this Manager position and recruiting for a Program Coordinator within the Media and Communications Division to help support the Department and City needs. Specifically, to assist the City with the increasing demands of social media and marketing of Citywide initiatives. This position will also assist with department special events, grant writing, marketing campaigns, videography, and City Council initiatives, as well as helping manage grant writing community engagement sessions, public information dissemination, City and event promotions, recording public meetings held in the City Council Chambers, managing the City’s Virtual City Hall, PR 2035 tasks and special projects as assigned. Currently, the Media and Communications Division has seen a drastic increase in the amount of requests from all City Departments.

Enterprise Funds
The City has four (4) Enterprise Funds – Water Authority, PRIME, Golf Course, and Sports Arena. Collectively, these are all separate funds where the City charges a fee to customers to cover all or most of the costs of services it provides. A review of these funds is conducted as part of the FY 2022-23 Mid-Year Budget Review. The total Enterprise Funds summary of revenues and expenses as of December 31, 2022 on Table 5 on the next page.

Water Operations Enterprise Fund
The FY 2022-23 Water Fund revenues include the implementation of the water rate increases of 10% that was adopted by the City Council on April 27, 2021, for five (5) consecutive years. More than half of the budgeted expenses are anticipated to be incurred in the second half of the fiscal year, and staff expects to meet the budget by the end of the year.

Pico Rivera Innovative Municipal Energy (PRIME) Fund
The PRIME Fund includes revenues and expenses for the purchase and sale of “greener” energy for consumers. FY 2022-23 Mid-Year revenues are tracking higher than expenses by approximately $3.25 million, primarily due to extreme heat events during the Summer of 2022, causing an increase in demand and usage. As the Resource Adequacy Sale and Purchase amongst the California Choice Energy Authority was favorable, PRIME had sufficient energy to meet the demand and sell the excess. Staff expects to meet the budget by year-end.

CITY COUNCIL AGENDA REPORT – MEETING OF FEBRUARY 14, 2023 FISCAL YEAR 2022-23 CITY OF PICO RIVERA MID-YEAR BUDGET REPORT AS OF DECEMBER 31, 2022

Golf Course Fund
The Pico Rivera Golf Course experienced a decrease in demand for golf play due to pandemic restrictions lifting and patrons having access to other activities. Additionally, the U.S. Army Corp of Engineers (USACE) closed the driving range resulting in decreased revenue. The Golf Course expenses have increased due to the building and grounds maintenance and the cost of utilities needed for the restaurant and banquet facility rentals and grounds maintenance. Staff will continue to monitor and reevaluate for the rest of the fiscal year.

Sports Arena Fund
The Sports Arena is slowly recovering from COVID-19 restrictions and has resumed operations to near pre-pandemic levels for rentals and events. Staff will continue to monitor and reevaluate for the rest of the fiscal year.

Conclusion:

This Mid-Year (second quarter) Report presents an overview of the City’s operating revenues and expenditures for the mid-year ending December 31, 2022 in comparison to the previous year. Mid-Year operating expenditures are in line with the current budget at 47%. The projected year-end General Fund revenues are on target compared to the budget and projected to come in within budget by the end of FY 2022-

23. The financial results from the prior fiscal year, combined with the FY 2022-23 midyear data, confirm the City’s goal of continuing to remain on the path to structural balance through fiscal discipline being a fundamental component of financial reporting.

Departments continue to work to reduce impacts to the General Fund and understand their financial pressures and should be commended for their efforts. Staff will continue to monitor each revenue source and expenditure activity closely and will evaluate opportunities to enhance revenues and reduce expenditures.

Steve Carmona
SC:AG:JG:DS:ep
Enclosures: 1) FY 2022-23 Mid-Year General Fund Budget Adjustment Worksheet 2) FY 2022-23 Mid-Year Other Funds Budget Adjustment Worksheet 3) FY 2022-23 Mid-Year Capital Improvement Funds Budget Adjustment Worksheet
4) FY 2022-23 COLA Budget Adjustment Worksheet
5) FY 2022-23 Mid-Year Underfill Positions (Personnel) Budget Adjustment Worksheet

CITY OF PICO RIVERA
Fiscal Year 2022-23 Mid-Year Budget Adjustments
ENCLOSURE 1 - General Fund
GENERAL FUND Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes

REVENUE
Licenses & Permits
100.00.0000-42000 $ - $ 180,000 $ - $ 180,000 Increase for Plan Check for Self storage and 45 unit townhome development.

EXPENDITURE
Community & Economic Development
Building
100.30.4020-54500 $ 180,000 $ 180,000 Increase Plan Checks for Self storage and 45 unit townhome development. Revenue offset.

Transfer Out Control
Transfer Out
100.98.9800-56900 $ - $ - $ 328,000 $ 328,000 Transfer Out to Liability Claims (Fund 105) and Workers Compensation Claims (Fund 106). $ - $ 180,000 $ 328,000 $ 508,000
$ - $ 180,000 $ - $ 180,000
$ 328,000
February 14, 2023

EXPENDITURE ADJUSTMENTS

REVENUE ADJUSTMENTS

NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 1
9a

CITY OF PICO RIVERA
Fiscal Year 2022-23 Mid-Year Budget Adjustments
ENCLOSURE 2 - Other Funds - No General Fund
OTHER FUNDS - NO GENERAL FUND Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes

REVENUE

LIABILITY CLAIMS
105.00.0000-47900 $ - $ 156,500 $ - $ 156,500 Transfer In from General Fund for Liability Claims funding for remainder of Fiscal Year.

WORKERS COMPENSATION CLAIMS
106.00.0000-47900 $ - $ 171,500 $ - $ 171,500
Transfer In from General Fund for Workers Compensation Claims funding for remainder of Fiscal Year.

EXPENDITURE

LIABILITY CLAIMS
105.60.6005-56105 $ - $ 156,500 $ - $ 156,500 Funding for remainder of Fiscal Year.

WORKERS COMPENSATION CLAIMS
106.60.6005-56106 $ - $ 171,500 $ - $ 171,500 Funding for remainder of Fiscal Year.

PROPOSITION A
205.40.4030-54500 $ - $ - $ 35,000 $ 35,000 Nationwide Bus Shelter rate increase of 4%.

HOUSING - SECTION 8
291.30.3090-54500 $ - $ - $ 25,560 $ 25,560 Increase for file scanning services in order to store files electronically. $ - $ 328,000 $ 60,560 $ 388,560
$ - $ 328,000 $ - $ 328,000
$ 60,560
February 14, 2023

EXPENDITURE ADJUSTMENTS

REVENUE ADJUSTMENTS

NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 2
9b

CITY OF PICO RIVERA
Fiscal Year 2022-23 Mid-Year Budget Adjustments
ENCLOSURE 3 - CIP Other Funds - No General Fund
CAPITAL IMPROVEMENT - NO GF Decrease Increase
New
Appropriation
Request
Net Increase /
(Decrease) Notes

REVENUE
$ - $ - $ - $ -

EXPENDITURE

PROPOSITION C
206.70.7300-54500-21241 $ - $ - $ 20,000 $ 20,000
Prop C - Fund 206 add $20,000 to fund the final processing of the Durfee Avenue Grade Separation Project.

Project: Durfee Ave Underpass
206.70.7300-54500-21354 $ - $ - $ 25,000 $ 25,000
Prop C - Fund 206 add $25,000 to complete the project and cover the total costs for design, construction, and staff time (job costing).

Project: Beverly Blvd Transit Safety and Security Program (TSSP)

MEASURE R
207.40.4010-54500-30053 $ - $ - $ 5,000 $ 5,000
Measure R - Fund 207 add $5,000 to fund Telegraph Rd Complete Street Study for job costing and to complete the project.

Project: Telegraph Road Complete Street Study
207.40.4010-54500-4700 $ - $ - $ 40,000 $ 40,000
Measure R - Fund 207 add $40,000 to fund LRSP study and update of Yellow clearance timing sheets and job costing to complete the project.

Project: Local Roadway Safety Plan (LRSPP)

PARK DEVELOPMENT
270.70.7300-57100-50089 $ (227,000) $ - $ - $ (227,000) Appropriate Fund 270 Fund Balance.

CAPITAL IMPROVEMENT FUND
400.70.7300-57100-50089 $ - $ 227,000 $ - $ 227,000 Transfer from CIP Fund (Fund 270) to the General Fund (Fund 400).

WATER AUTHORITY
550.70.7340-54500-50027 $ - $ - $ 20,000 $ 20,000
Water Authority - Fund 550 add $20,000 to provide construction and inspection services to complete the project.

Project: Plant No. 3 Electrical Control and MCC Panel Replacement $ (227,000) $ 227,000 $ 110,000 $ 110,000
$ - $ - $ - $ -
$ 110,000
February 14, 2023

EXPENDITURE ADJUSTMENTS

REVENUE ADJUSTMENTS

NET ADJUSTMENTS INCREASE/(DECREASE)
Enclosure 3
9c

CITY OF PICO RIVERA
Fiscal Year 2022-23 Mid-Year Budget Adjustments
ENCLOSURE 4 - COLA Adjustments
EMP. HLD COLA Amount
- - - - (0.00) $ 530,084
Total 420,335.00 39,427.00 60,024.00 4,203.00 6,095.00
Account 51100 51500 51500 51504 51930
Salary PERS UAL 457 1% Medicare 1.45%
100.11.1110 14,317 1,342 2,042 142 205
100.12.1200 5,586 524 798 56 81
100.20.2000 6,093 572 870 61 88
100.20.2010 22,651 2,125 3,235 227 328
100.20.2015 4,199 394 600 42 61
100.20.2020 5,244 492 749 52 76
100.20.2030 2,225 209 318 22 32
100.20.2050 1,323 124 189 13 19
100.20.6040 3,423 321 489 34 50
100.30.3000 20,704 1,942 2,957 207 300
100.30.3010 5,574 523 796 56 81
100.30.3020 9,126 856 1,303 91 132
100.30.3030 7,370 691 1,052 74 107
100.30.3045 12,072 1,132 1,724 121 175
100.30.3090 390 37 56 4 6
100.30.4020 6,386 599 912 64 93
100.40.4000 2,657 249 380 27 39
100.40.4010 17,274 1,620 2,467 173 251
100.40.4030 26,672 2,502 3,809 267 387
100.40.4031 20,649 1,937 2,949 206 299
100.40.4032 30,216 2,834 4,315 302 438
100.40.4033 2,920 274 417 29 42
100.40.4040 563 53 80 6 8
100.60.6000 10,812 1,014 1,544 108 157
100.80.8000 21,592 2,025 3,083 216 313
100.80.8100 15,798 1,482 2,256 158 229
100.80.8102 5,782 542 826 58 84
100.80.8103 1,188 111 170 12 17
100.80.8104 611 57 87 6 9
100.80.8107 1,357 127 194 14 20
100.80.8108 170 16 24 2 3
100.80.8109 170 16 24 2 3
100.80.8110 1,426 134 204 14 21
100.80.8115 170 16 24 2 3
100.80.8130 1,018 96 145 10 15
100.80.8140 1,426 134 204 14 21
100.80.8220 12,464 1,169 1,780 125 181
100.80.8230 20,485 1,922 2,925 205 297
100.80.8235 340 32 49 3 5
100.80.8290 611 57 87 6 7
202.40.4010 3,098 291 442 31 45
205.80.8410 3,809 357 544 38 55
230.40.4990 7,987 749 1,141 80 116
280.30.3400 390 37 56 4 6
291.30.3090 12,571 1,179 1,795 126 182
550.11.1110 1,476 138 211 15 21
550.20.2000 7,125 668 1,018 71 103
550.40.4900 14,737 1,382 2,104 147 214
550.40.4920 35,483 3,328 5,067 355 515
550.40.4930 537 50 77 5 8
550.80.8230 326 31 47 3 5
560.11.1110 4,646 436 664 46 67
560.20.2000 985 92 141 10 14
570.20.2000 985 92 141 10 14
590.11.1110 738 69 105 7 11
851.20.2000 2,390 224 341 24 35
FY 22-23 COLA ADJUSTMENTS
February 14, 2023
Enclosure 4
9d

CITY OF PICO RIVERA
Fiscal Year 2022-23 Mid-Year Budget Adjustments
ENCLOSURE 5 - Underfilled Positions (Personnel)
Department Adopted Position Title Underfilled Position Title Notes Administration (Office of Sustainability) Director Principal Analyst Underfill Memo 9/14/22 Administrative Services Finance Technician Account Clerk III Underfill Memo 9/22/22 Community & Economic Dev. Principal Planner Senior Planner Underfill Memo 9/1/22 Parks & Recreation Manager Coordinator Underfill Memo 2/7/23 FY 2022-23 UNDERFILLED POSITIONS
February 14, 2023
Enclosure 5
9e

COUNCIL

MEETING
DATE

COUNCIL

MEMBER REQUEST DETAIL DIRECTOR(S)
ACTION TAKEN: Memo; Staff
Report; Closed Session;
Presentation; Follow-up
Meeting; City Manager
Reports; Informal Action

DISCUSSION
ITEM
ACTION

ITEM DATE
STATUS:

Complete;
Pending;
On-going;
In-Progress
8/10/2021 Lutz/Lara Shopping Cart Ordinance Review ordinance A. Betancourt Discussion 2/22/2022 8/24/2021 Pending 6/28/2022 Lara/Camacho
Battery Storage Funds Set aside $50,000 for Battery
Storage for non-profits. S. Carmona
Pending
10/11/2022 Lara/Camacho NASA Contract Discuss third party vendors Present at next City Council meeting 10/25
1/24/2023 Complete
1/24/2023 Lara/Garcia Safe Pathways to School Discuss with ERUSD Boardmembers
Ad Hoc Committee

GOOD OF THE ORDER