CITY COUNCIL
Maureen Toms, Mayor
Cameron Sasai, Mayor Pro Tem
Anthony Tave, Council Member
Norma Martínez-Rubin, Council Member
Devin T. Murphy, Council Member
PINOLE CITY COUNCIL
MEETING AGENDA
April 16, 2024
5:00 PM
Attend in Person: PINOLE CITY COUNCIL CHAMBERS - 2131 PEAR STREET OR
Attend VIA ZOOM TELECONFERENCE – Details provided below How to Submit Public Comments:
In Person:
Attend meeting at the Pinole City Council Chambers, fill out a yellow public comment card and submit it to the City Clerk.
Via Zoom:
Members of the public may submit a live remote public comment via Zoom video conferencing. Download the Zoom mobile app from the Apple Appstore or Google Play. If you are using a desktop computer, you can test your connection to Zoom by clicking here. Zoom also allows you to join the meeting by phone.
From a PC, Mac, iPad, iPhone or Android:
https://us02web.zoom.us/j/89335000272
Webinar ID: 893 3500 0272
By phone: +1 (669) 900-6833 or +1 (253) 215-8782 or +1 (346) 248-7799 • Speakers will be asked to provide their name and city of residence, although providing this is not required for participation.
• Each speaker will be afforded up to 3 minutes to speak (subject to modification by the Mayor) • Speakers will be muted until their opportunity to provide public comment.
When the Mayor opens the comment period for the item you wish to speak on, please use the “raise hand” feature (or press *9 if connecting via telephone) which will alert staff that you have a comment to provide and press *6 to unmute. To comment with your video enabled, please let the City Clerk know you would like to turn your camera on once you are called to speak.
Written Comments:
All comments received before 3:00 pm the day of the meeting will be posted on the City’s website on the agenda page (Agenda Page Link) and provided to the City Council prior to the meeting. Written comments will not be read aloud during the meeting. Email comments to [email protected] Please indicate which item on the agenda you are commenting on in the subject line of your email.
City Council
Agenda - April 16, 2024
OTHER WAYS TO WATCH THE MEETING
LIVE ON CHANNEL 26. They are retelecast the following week. The Community TV Channel 26 schedule is published on the city’s website at www.ci.pinole.ca.us.
VIDEO-STREAMED LIVE ON THE CITY’S WEBSITE, www.ci.pinole.ca.us and remain archived on the site for five (5) years.
If none of these options are available to you, or you need assistance with public comment, please contact the City Clerk, Heather Bell at (510) 724-8928 or [email protected]..
Americans With Disabilities Act: In compliance with the Americans With Disabilities Act of 1990, if you need special assistance to participate in a City Meeting or you need a copy of the agenda, or the agenda packet in an appropriate alternative format, please contact the City Clerk’s Office at (510) 724-8928. Notification at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service.
Note: Staff reports are available for inspection on the City Website at www.ci.pinole.ca.us. You may also contact the City Clerk via e-mail at [email protected].
Ralph M. Brown Act. Gov. Code § 54950. In enacting this chapter, the Legislature finds and declares that the public commissions, boards and councils and the other public agencies in this State exist to aid in the conduct of the people's business. It is the intent of the law that their actions be taken openly and that their deliberations be conducted openly. The people of this State do not yield their sovereignty to the agencies, which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.
City Council
Agenda - April 16, 2024
1. CALL TO ORDER & PLEDGE OF ALLEGIANCE IN HONOR OF THE US MILITARY TROOPS
2. LAND ACKNOWLEDGMENT
Before we begin, we would like to acknowledge the Ohlone people, who are the traditional custodians of this land. We pay our respects to the Ohlone elders, past, present, and future, who call this place, Ohlone Land, the land that Pinole sits upon, their home. We are proud to continue their tradition of coming together and growing as a community. We thank the Ohlone community for their stewardship and support, and we look forward to strengthening our ties as we continue our relationship of mutual respect and understanding.
3. ROLL CALL, CITY CLERK’S REPORT & STATEMENT OF CONFLICT An official who has a conflict must, prior to consideration of the decision: (1) publicly identify in detail the financial interest that causes the conflict; (2) recuse himself /herself from discussing and voting on the matter; and (3) leave the room until after the decision has been made, Cal. Gov't Code § 87105.
4. CONVENE TO A CLOSED SESSION
Citizens may address the Council regarding a Closed Session item prior to the Council adjourning into the Closed Session, by first providing a speaker card to the City Clerk.
5. RECONVENE IN OPEN SESSION TO ANNOUNCE RESULTS OF CLOSED SESSION
6. CITIZENS TO BE HEARD (Public Comments)
Citizens may speak under any item not listed on the Agenda. The time limit is 3 minutes and is subject to modification by the Mayor. Individuals may not share or offer time to another speaker. Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future Council meeting. PLEASE SEE THE COVERSHEET OF THE
AGENDA FOR INSTRUCTIONS ON HOW TO SUBMIT PUBLIC COMMENTS
7. RECOGNITIONS / PRESENTATIONS / COMMUNITY EVENTS
A. Proclamations
1. Parkinson's Awareness Month
2. Arbor Day
3. Earth Day
4. Celebrating Dr. Nicole Barnett's Retirement
B. Presentations
1. County Presentation of Pinole's Energy Enhancement Rebate Program and County Sustainability Initiatives
2. Update on the Pride and Juneteenth Event
8. REPORTS & COMMUNICATIONS
A. Mayor Report
City Council
Agenda - April 16, 2024
1. Announcements
B. Mayoral & Council Appointments
C. City Council Committee Reports & Communications
D. Council Requests for Future Agenda Items
E. City Manager Report / Department Staff
F. City Attorney Report
9. CONSENT CALENDAR
All matters under the Consent Calendar are considered to be routine and noncontroversial. These items will be enacted by one motion and without discussion. If, however, any interested party or Council member(s) wishes to comment on an item, they may do so before action is taken on the Consent Calendar. Following comments, if a Council member wishes to discuss an item, it will be removed from the Consent Calendar and taken up in order after adoption of the Consent Calendar.
A. Approve the Minutes of the Regular City Council Meeting on April 2, 2024.
B. Receive the March 30, 2024 – April 12, 2024 – List of Warrants in the Amount of $850,230.05 and the April 12, 2024 Payroll in the Amount of $508,972.30.
C. Quarterly Update on the Economic Development Strategy (covering July 2023-March 2024) Action: Receive Report (Lilly Whalen)
D. Approval of Financial and Investment Policies for FY 2024/25 Action: Adopt Resolution per Staff Recommendation (Markisha Guillory)
E. Dissolution of the City of Pinole Successor Agency to the Redevelopment Agency Action:
Adopt Resolution per Staff Recommendation (Markisha Guillory, Stephanie Downs)
10. PUBLIC HEARINGS
Citizens wishing to speak regarding a Public Hearing item should fill out a speaker card prior to the completion of the presentation, by first providing a speaker card to the City Clerk. An official who engaged in an ex parte communication that is the subject of a Public Hearing must disclose the communication on the record prior to the start of the Public Hearing.
A. Approval of the Updated User and Regulatory Fees and the Master Fee Schedule Action:
Adopt Resolution per Staff Recommendation (Markisha Guillory) B. Conduct First Reading Of An Ordinance Amending Section 1.02.010 Of The Pinole Municipal Code To Adopt A New City Seal Action: Conduct First Reading and Public Hearing (Eric Casher)
11. OLD BUSINESS
A. Receive Update on Status of Development of Parklet/Outdoor Dining Regulations in Pinole and Provide Direction Action: Receive Update and Provide Direction (David Hanham)
12. NEW BUSINESS
13. CITIZENS TO BE HEARD (Continued from Item 6) (Public Comments)
City Council
Agenda - April 16, 2024
Open only to members of the public who did not speak under the first Citizens to Be Heard, Agenda Item 6 Citizens may speak under any item not listed on the Agenda. The time limit is 3 minutes for City Council items and is subject to modification by the Mayor. Individuals may not share or offer time to another speaker.
Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future meeting.
14. ADJOURNMENT to the Special Meeting of April 30, 2024 in Remembrance of Amber Swartz.
I hereby certify under the laws of the State of California that the foregoing Agenda was posted on the bulletin board at the main entrance of Pinole City Hall, 2131 Pear Street Pinole, CA, and on the City’s website, not less than 72 hours prior to the meeting date set forth on this agenda. _______________________
Heather Bell, CMC
City Clerk
POSTED: April 11, 2024 at 4:00 pm
Pinole City Council Regular Meeting
Minutes – April 2, 2024
CITY COUNCIL MEETING
MINUTES
April 2, 2024
1. CALL TO ORDER & PLEDGE OF ALLEGIANCE IN HONOR OF THE US MILITARY TROOPS
The City Council Meeting was held in a hybrid format (in-person and via Zoom videoconference and broadcast) from the Pinole Council Chambers, 2131 Pear Street, Pinole, California. Mayor Toms called the Regular Meeting of the City Council to order at 5:01 p.m. and led the Pledge of Allegiance.
2. LAND ACKNOWLEDGEMENT
Before we begin, we would like to acknowledge the Ohlone people, who are the traditional custodians of this land. We pay our respects to the Ohlone elders, past, present and future, who call this place, Ohlone Land, the land that Pinole sits upon, their home. We are proud to continue their tradition of coming together and growing as a community. We thank the Ohlone community for their stewardship and support, and we look forward to strengthening our ties as we continue our relationship of mutual respect and understanding.
3. ROLL CALL, CITY CLERK’S REPORT & STATEMENT OF CONFLICT An official who has a conflict must, prior to consideration of the decision; (1) publicly identify in detail the financial interest that causes the conflict; (2) recuse himself/herself from discussing and voting on the matter; and (3) leave the room until after the decision has been made, Cal. Gov.
Code § 87105.
A. COUNCILMEMBERS PRESENT
Maureen Toms, Mayor
Cameron Sasai, Mayor Pro Tem
Norma Martinez-Rubin, Council Member
Devin Murphy, Council Member
Anthony Tave, Council Member
B. STAFF PRESENT
Neil Gang, Interim City Manager/Police Chief
Heather Bell, City Clerk
Eric Casher, City Attorney
Lilly Whalen, Community Development Director
Sanjay Mishra, Public Works Director
Markisha Guillory, Finance Director
City Clerk Heather Bell announced the agenda had been posted on March 28, 2024 at 4:30 p.m. with all legally required written notices. A written comment had been received in advance of the meeting, distributed to the City Council and staff and posted to the City website and made available to the public in the Council Chambers.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Following an inquiry, the Council reported there were no conflicts with any items on the agenda.
4. CONVENE TO A CLOSED SESSION:
Citizens may address the Council regarding a Closed Session item prior to the Council adjourning into the Closed Session, by first providing a speaker card to the City Clerk.
A. CONFERENCE WITH LABOR NEGOTIATORS
Gov. Code §54957.6
Agency designated representatives: Interim City Manager, Neil Gang, Human Resources Director Stacy Shell, and Gregory Ramirez, IEDA Employee organization: Management Compensation Plan (MCP)
PUBLIC COMMENTS OPENED
City Clerk Bell reported there were no comments from the public.
PUBLIC COMMENTS CLOSED
5. RECONVENE IN OPEN SESSION TO ANNOUNCE RESULTS OF CLOSED SESSION At 6:15 p.m., Mayor Toms reconvened the meeting into open session and reported there was no reportable action from the Closed Session.
6. CITIZENS TO BE HEARD (Public Comments)
Citizens may speak under any item not listed on the Agenda. The time limit is 3 minutes and is subject to modification by the Mayor. Individuals may not share or offer time to another speaker.
Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future Council meeting.
Rafael Menis, Pinole, reported on the current rate of COVID-19 in the City of Pinole and in Contra Costa County pursuant to the latest data from the Centers for Disease Control and Prevention (CDC). While wastewater tracking charts continued to show an overall decline in COVID levels, he recommended masking while in crowded areas and for sensitive populations. He also commented on the idea of equity as opposed to equality and defined each term. As an example, he suggested it would be equal to charge 100,000 people $1 dollar each to build a road, but not equitable since the majority may never have traveled over or used the road but were still charged for the use of the road. It would be equitable to charge certain groups more for different reasons since it was an equal charge across the board, but it may disproportionately affect populations that could not pay since certain groups may benefit more than others, which was why there were user fees for recreation, as an example, rather than a flat charge. He suggested it was not about treating everyone the same but balancing factors so that ultimately everyone reached the same point in the end.
Debbie Long, Pinole, commented on the significant increases in day-to-day living expenses including gas costs noting the local Safeway had seen a significant increase in gas prices over the past month, with the increase for the summer blend yet to be seen.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Ms. Long explained that there had also been increases in PG&E, homeowner’s insurance with many homeowners’ insurance policies in Pinole Valley having been canceled with a homeowner having no remedy but to sign up for the California Fair Plan Homeowners’ Insurance at great expense. Increases in rates had also occurred for automobile insurance, home repairs, costs of materials, groceries and veterinary expenses leaving some having no choice but to relinquish their pets. She raised those concerns since she was of the opinion the City of Pinole should reduce its budget before coming to taxpayers to bail them out due to poor planning and she offered a number of examples of what she suggested had been poor budget decisions. Before the City Council asked residents for more money, she urged the City Council to make a good faith effort to see what could be cut from the City’s budget.
7. RECOGNITIONS / PRESENTATIONS / COMMUNITY EVENTS
A. Proclamations
1. Autism Acceptance Awareness Month
The City Council read into the record the proclamation recognizing Autism Acceptance Awareness Month.
PUBLIC COMMENTS OPENED
Rafael Menis, Pinole, thanked the City Council for the proclamation. He emphasized the importance to note it was Autism Acceptance, not Autism Awareness Month, in that there was value not being aware that autism existed or people had autism, but that there was acceptance.
Those with autism had different perspectives on things and had value and there should be acceptance of the differences and challenges those with autism had to face, which made the community stronger and better able to work together to accomplish everything the community wanted to do.
PUBLIC COMMENTS CLOSED
2. Arab American Heritage Month
The City Council read into the record a proclamation recognizing the month of April as Arab American Heritage Month.
PUBLIC COMMENTS OPENED
Hanin Ebrahim, a resident of Egypt, and an exchange student in the AFS Exchange Program, a cultural program for students to live in the United States for a 10-month period with a host family, explained that she attended Pinole Valley High School and she had provided a presentation about her culture to students. She also detailed a recent visit to Washington D.C. She appreciated the welcome and kindness from the community, her host family, neighbors and students and thanked the City Council for the proclamation.
PUBLIC COMMENTS CLOSED
Pinole City Council Regular Meeting
Minutes – April 2, 2024
3. National Pet Day
The City Council read into the record a proclamation recognizing April 11, 2024 as National Pet Day and those members of the Council who had pets highlighted their personal pets.
PUBLIC COMMENTS OPENED
City Clerk Bell reported there were no comments from the public.
PUBLIC COMMENTS CLOSED
B. Presentations
1. Marin Clean Energy’s (MCE) Application to the Department of Energy’s GRIP Grant for the Virtual Power Plant Expansion in MCE Communities Community Development Director Lilly Whalen introduced Alexandra McGee, Director of Strategic Initiatives, Marin Clean Energy (MCE), who provided a PowerPoint presentation on MCE’s Virtual Power Plant for the People, which included an overview of MCE’s application to the Department of Energy’s (DOE) GRIP Grant for the Virtual Power Plant Expansion in MCE Communities, which would ensure that the benefits of electrification and energy efficiency was available to all community members. She highlighted the market challenges and impacts of solar energy on the grid and the fact the Virtual Power Plant would tap into existing distributed energy resources (heat pump, water heaters, small thermostats, batteries and electric vehicles) and send them to digital signals to charge up or release power to the grid at strategic times, and which quietly and invisibly would create pockets of power to support and decarbonize the grid.
The DOE GRIP Application would expand MCE’s Virtual Power Plant pilot to all MCE communities. Community members would be able to engage at various levels to optimize value through controllable devices and behavior change and the application included a request for $50 million in funds from the DOE with a $50 million match over eight years of partnership and community benefits of the Virtual Power Plant Expansion.
Ms. McGee asked that the City Council consider approval of a resolution directing the Interim City Manager/Police Chief to sign a Memorandum of Understanding (MOU) in support of MCE’s application to the DOE Grid Resilience and Innovation Partnerships (GRIP) Grant Program. She also highlighted the key points of the MOU.
Responding to questions from the City Council, Ms. McGee clarified the number of eligible devices that could be installed and how the program would communicate to the device. She offered examples of how the devices would shift the energy load and the grid benefits. A proposal with low to no-cost solutions would be offered to customers, to be leveraged against MCE’s existing programs and other sources that could bring down customer costs. The $50 million ask of the DOE was again clarified along with the federal program, Justice40 Initiative, where the White House had made it a goal that 40 percent of the overall benefits of certain federal climate, clean energy, affordable and sustainable housing and other investments would flow to disadvantaged communities that were marginalized by underinvestment and overburdened by pollution.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Ms. McGee clarified that all MCE communities would be eligible for the program and all Pinole residents would be eligible if MCE was awarded the funding from the DOE. The strategy for enrollment was in-flux and may be done in phases.
Ms. McGee also provided an overview of the invitation-only pilot program in the City of Richmond with the findings from the program able to be provided, when available, and she also provided the background of the Richmond Community Foundation, a partner in Richmond’s pilot program.
She clarified that if a customer needed an electrical panel upgrade due to an older home stock that had been built directly into the proposal with grant funds used to reduce costs. She provided additional overview of the federal funds that could be used specifically for the types of electrical panel upgrades that would be needed for the older home stock and the programs and resources available for low-income select customers.
Ms. McGee also detailed how devices would become more efficient and the shift of energy costs to different times of the day, which were less expensive and how that would be displayed on statements for MCE customers. She also clarified the $50 million ask from the DOE and match of $50 million budget was still being prepared in terms of details of how many households the funds would cover. She also described the timing for the GRIP Application, with signatures being requested before April 10, 2024 and with the absolute final deadline of April 17, 2024.
In response to the Mayor as to whether staff or the City Council may sign the MOU request from MCE, Community Development Director Whalen advised that Consent Item 9F, Memorandum of Understanding (MOU) with Marin Clean Energy (MCE) for Department of Energy (DOE) Grid Resilience and Innovation Partnerships (GRIP) Grant Application, had been added to the Consent Calendar for City Council consideration for approval.
PUBLIC COMMENTS OPENED
City Clerk Bell reported there were no comments from the public.
PUBLIC COMMENTS CLOSED
Council member Murphy was excited about the levels of partnership, was glad to have the program and was supportive and excited to learn more about partners the City of Pinole could work with across the industry who may support this type of program.
Mayor Toms thanked Ms. McGee for the presentation and looked forward to the successful DOE grant application and future programs.
Mayor Toms reported for the benefit of the public that staff had asked that Item 11A be continued to a future meeting.
8. REPORTS & COMMUNICATIONS
A. Mayor Report
1. Announcements
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mayor Toms reported she had attended the League of California Cities Housing, Community and Economic Development Policy and Legislative Update Committee meetings with a discussion on a number of bills including Assembly Bill (AB) 2085 and AB 2632, which she highlighted. She had also participated in an initial meeting with staff and representatives from Republic Services to discuss the City’s Franchise Agreement.
B. Mayoral & Council Appointments: None
C. City Council Committee Reports & Communications
Mayor Pro Tem Sasai reported he had attended the League of California Cities Policy Committee meetings and represented the Asian & Pacific Islander (API) Caucus in the Public Safety Policy Committee. He briefed the City Council on a presentation from the Los Angeles Police Department (LAPD) Commercial Crimes Division on retail theft and a number of bills including AB 1725, AB 2034, AB 2225 and AB 2309. He expressed the willingness to email the agenda packet from the meeting to anyone interested in receiving more information. He had also met with the Mayor, the City Attorney and Council Interns for a meeting of the Municipal Code Ad-Hoc Subcommittee to discuss the development of a Safe Storage of Firearms Ordinance and to provide direction on a new ordinance related to the new City Seal and Logo.
Council member Murphy reported he had attended the East Bay Economic Development Alliance (EBEDA) Innovation Awards and thanked the EBEDA for awarding the Contra Costa Transportation Authority (CCTA) the 2024 Legacy Award for Pioneering Efforts in Transportation.
He had also joined Partnership for the Bay’s Future luncheon as part of its collaboration to produce and preserve affordable homes so the Bay Area remained a diverse place where everyone thrived, and he briefed the City Council on the conversations. He also briefed the City Council on discussions and actions from the latest MCE Board meeting and he looked forward to the City’s activities planned for Earth Month.
Council member Martinez-Rubin reported she had attended the League of California Cities Revenue and Taxation Policy Committee meeting and briefed the City Council on the discussions of AB 2854, Senate Bill (SB) 1494 and a presentation on alternatives to fuel taxes, with more information on that topic available at www.carroadcharge.com.
D. Council Requests for Future Agenda Items
ACTION: Motion by Council member Murphy/Mayor Toms to direct staff to prepare a proclamation honoring Dr. Nicole Barnett, Chief Operating Officer and Chief Nurse Executive, Kaiser Permanente Richmond Medical Center on the event of her retirement on April 12, 2024.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Murphy offered a motion, seconded by Mayor Pro Tem Sasai to review proposed City Banner Program to utilize light poles to beautify travel corridors and promote City-sponsored events and programs, to be considered around the budget discussions.
On the motion, and in response to Council member Martinez-Rubin as to whether the City already had a Banner Program in place, Mayor Toms understood that had fallen away years ago during the time when the Redevelopment Agency had been in place, when former banners had worn out and had not been replaced.
ACTION: Motion by Council member Murphy/Mayor Pro Tem Sasai to review proposed City Banner Program to utilize light poles to beautify travel corridors and promote Citysponsored events and programs to be considered around the budget discussions.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
ACTION: Motion by Mayor Toms/Council member Martinez-Rubin to invite City of Berkeley Mayor Jesse Arreguin to a future City Council meeting to discuss the impacts from the closure of Alta Bates Hospital.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
E. City Manager Report / Department Staff
Interim City Manager/Police Chief Neil Gang reported the City Manager Recruitment process was ongoing with 22 online applications received and with the application process to run through April 28, 2024; the Pinole Police Department would hold a Helping Others through Positive Encounters (HOPE) Event on April 25, 2024; the Bike Rodeo would be held at Collins Elementary on April 27, 2024 from 11:00 a.m. to 2:00 p.m.; and Pinole Earth/Walk/Day would be held on April 20, 2024 from 9:00 a.m. to 12:00 Noon at Fernandez Park, with a two-mile walk and refreshments, finish line activities and vendors to be provided. Also, Community Service Day would be held on May 18, 2024 from 9:00 a.m. to 12:00 Noon, with registration at 8:00 a.m. at the Youth Center and lunch at the end of the event. In addition, the 2024 Community Event postcards would arrive in residents’ mailboxes the second week of April and the Acting Community Services Director was working to install new park signs to update the rules in all City parks.
Interim City Manager/Police Chief Gang also provided an overview of the tentative agenda items for the City Council meeting of April 16, 2024, and reported an offer had been made for a new Community Services Director who would start employment with the City on April 22, 2024.
F. City Attorney Report
Pinole City Council Regular Meeting
Minutes – April 2, 2024
City Attorney Eric Casher reported the Municipal Code Ad-Hoc Subcommittee had met as the Mayor Pro Tem had reported. The next Municipal Code Ad-Hoc Subcommittee meeting had been scheduled for April 22, 2024, to discuss an ordinance to allow the City to impose a use fee for electric vehicle (EV) charging stations.
PUBLIC COMMENTS OPENED (Items 7E through 7F)
Christy Lam-Julian, Pinole, asked that the City Council direct staff to provide a harassment training refresher so that staff and public officials understood rights and responsibilities.
In response to Council member Martinez-Rubin, Interim City Manager/Police Chief Gang clarified the park rules currently posted at City parks were antiquated and would be updated on existing signs in all City parks.
9. CONSENT CALENDAR
All matters under the Consent Calendar are considered to be routine and noncontroversial. These items will be enacted by one motion and without discussion. If, however, any interested party or Council member(s) wishes to comment on an item, they may do so before action is taken on the Consent Calendar. Following comments, if a Council member wishes to discuss an item, it will be removed from the Consent Calendar and taken up in order after adoption of the Consent Calendar.
A. Approve the Minutes of the Regular City Council Meeting on March 19, 2024.
B. Receive the March 16, 2024 – March 29, 2024 List of Warrants in the Amount of $230,954.20 and the March 29, 2024 Payroll in the Amount of $497,529.78.
C. Award a Contract for Landscape Maintenance Services (RFP No. Pw-2024-02) to Pacific Site Management for an Amount Not to Exceed $420,545. Action: Adopt Resolution per Staff Recommendation (Sanjay Mishra)
D. Pinole Perks Program Update and Budget Allocation for FY 2023/24 and FY 2024/25. Action: Approve restructuring of Pinole Perks Program for FY 2023/24 and FY 2024/25 (Lilly Whalen)
E. City Clerk Contract Amendment. Action: Adopt a Resolution per Staff Recommendation (Stacy Shell)
F. Memorandum of Understanding (MOU) with Marin Clean Energy (MCE) for Department of Energy (DOE) Grid Resilience and Innovation Partnerships (GRIP) Grant Application. Action: Adopt a Resolution per Staff Recommendation (Lilly Whalen)
Mayor Toms reported there had been a request to remove Item 9A from the Consent Calendar and continue the item to the next meeting of the City Council. She added pursuant to Government Code Section 54953(c)(3), Item 9E would provide the City Clerk with a four percent merit increase and a one percent longevity pay in accordance with the amendment to the Employment Agreement, which would have no fiscal impact to the General Fund as the merit increase and longevity pay had already been incorporated into the Fiscal Year 2023/24 budget.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Martinez-Rubin requested that Item 9D be removed from the Consent Calendar for discussion.
Council member Murphy requested Item 9F be removed from the Consent Calendar for discussion.
PUBLIC COMMENTS OPENED
Irma Ruport, Pinole, referenced Item 9C and commented on her understanding the City’s existing Landscape Maintenance Services Contractor had been hired in the last couple of years. She detailed the maintenance services the contractor would provide as part of the contract but noted some of the contract documents had not been included in the agenda packet. She reported on an incident with the contractor last year at the Senior Center, which had an adjacent site that had been full of weeds and was a fire hazard. She had approached the contractor to ask why the area was not being maintained and had been informed the contractor had not been asked to perform any maintenance services. She pointed out the proposed contract for landscape maintenance services did not include the location where services would be performed, and suggested the contractor should be supervised and monitored. She expressed concern with the City wasting funds.
Ms. Ruport added as a member of the Community Services Commission, work was being done to set activities for Community Services Day but there were challenges with scheduling activities due to existing contracts. She expressed concern contractors were not doing their job, a lot of things were not being maintained, and she asked that the contractor be supervised, monitored and a report on the status of work performed in the last year be provided for transparency.
PUBLIC COMMENTS CLOSED
Speaking to Item 9F, Council member Murphy stated he supported the item, but asked for clarification about the nominal staff time that would be involved in the preparation of the MOU.
Community Development Director Whalen explained that she had not looked at the staff time in terms of hours but she had been in communication with Ms. McGee with MCE about the expectations and had been informed it would be fairly minimal, such as helping to streamline the permitting process where staff would partner and where little staff time was expected.
Council member Murphy understood most federal and state grants had requested tracking of the staff time. He asked that staff return with some options for City Council consideration as to how to track the staff time, which would be helpful in terms of safeguarding the resources being expended and which would be helpful as the City applied for future grants.
Community Development Director Whalen acknowledged that conversation had not occurred holistically as yet.
As to whether staff could be directed to return with options for tracking staff time and in response to Council member Murphy, City Attorney Casher explained that discussion was different from Item 9F. He suggested that could be a request for a future agenda item or through the Mayor there could be a conversation with the Interim City Manager/Police Chief around that objective.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Murphy suggested that direction would be acceptable.
Council member Tave also expressed concern with the impacts to staff.
Community Development Director Whalen reiterated that in discussions with Ms. McGee, she understood that the help MCE would need from local communities was getting the word out to constituents, getting the word out on the City website or direct interested parties to the MCE website.
Community Development Director Whalen commented that the intent was to ensure the City’s permitting process was as streamlined as possible, which the City’s new permitting process software would provide. She was confident in speaking with Ms. McGee that staff could support this project.
Council member Tave asked that staff report back if the work became problematic.
Council member Martinez-Rubin spoke to Item 9D, and expressed her appreciation to staff for the way information had been requested and obtained from participating businesses in the Pinole Perks Program. She asked whether staff had reached out to those businesses that had not provided input from the survey and while she recognized that businesses such as eateries likely were too busy to respond to a survey, she wanted to know about the efforts to obtain as much input as possible and feasible from staff’s end, which she recognized involved staff time. She also appreciated the survey questions that had been asked of the businesses, which had informed how to proceed into the future.
Community Development Director Whalen explained that her ability to reach out to each merchant individually had been limited. She had relied on Surveymonkey and had made some calls but had been unable to meet personally with each business. She had sent reminders via Surveymonkey and her City email, and suggested there had been a good representation from the respondents. Even though some businesses had not responded, she suggested there had been a good balance from the feedback received and she had provided a fair amount of time for people to respond.
Council member Martinez-Rubin found the Pinole Perks Program overall was something that should be retained, and she hoped to see it develop even more over the initial pilot period.
Mayor Toms asked the Public Works Director to respond to the public comments on Item 9C.
Public Works Director Sanjay Mishra clarified that Pacific Site Management, the City’s existing landscape contractor, had been working for the City of Pinole for the past eight years absent a contract. A Request for Proposal (RFP) had been issued to solicit more landscaping contractors to participate, as detailed in the April 2, 2024 staff report. In response to comments about an area adjacent to the Senior Center that had not been maintained, he stated that area had not been in the original contract, was part of the Senior Center Auxiliary Parking Lot Project, was not required to be mowed and was maintained by City staff, as required. If anyone had questions about City contracts, they may contact the Public Works Director or Public Works Manager. He added as part of the current RFP, all facilities, medians and locations where work was to be done had been listed and while some documents may have been missed from being added to the staff report/agenda packet they could be provided.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Community Development Director Whalen reported that Ms. McGee had emailed her to inform her the anticipated staff time per year for Item 9F would be five to ten hours per year.
ACTION: Motion by Council member Murphy/Mayor Pro Tem Sasai to adopt Items 9B through 9F, as shown.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
10. PUBLIC HEARINGS
A. Urgency Ordinance Enacting a Temporary Moratorium on the Establishment of New Service Stations or Expansion of Existing Service Stations. Action: Adopt Urgency Ordinance per Staff
Recommendation (Eric Casher, Lilly Whalen)
Community Development Director Whalen provided a PowerPoint presentation on an Urgency Ordinance Enacting a Temporary Moratorium on the Establishment of New Service Stations or Expansion of Existing Service Stations, which included an overview of the background of the request; climate change and government regulations; gas/service station regulations in other communities; where the service stations in Pinole were allowed; existing service stations in Pinole and the purpose of the moratorium, which would prohibit service stations as part of the City’s efforts to facilitate the transition of zero-emissions vehicles and combat the effects of climate change, while also allowing the City time to study and enact permanent changes to the Zoning Code and consider more nuanced and comprehensive regulations.
Community Development Director Whalen highlighted the proposed Urgency Ordinance, consistency with the General Plan, applicability of the Urgency Ordinance on other public agencies and the process and timeline for the Urgency Ordinance and a Permanent Ordinance along with the fiscal impacts.
The City Council was asked to adopt an Urgency Ordinance enacting a temporary moratorium on the establishment of new service stations or expansion of existing service stations.
Council member Martinez-Rubin clarified with Community Development Director Whalen the Urgency Ordinance would involve a temporary moratorium on the establishment of new service stations or expansion of existing service stations. This was a temporary measure, as outlined in the PowerPoint presentation. Once a permanent ordinance had been approved, the moratorium would be permanent.
Mayor Pro Tem Sasai clarified that if adopted, the Urgency Ordinance would go into effect immediately but extended before the 45-day window. Since the final Climate and Adaptation Action Plan (CAAP) was due to come back to the City Council in May or June, he asked when this item would return to the City Council for an extension of the Urgency Ordinance.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Community Development Director Whalen stated the item would likely return to the City Council at its first meeting of May 2024. She understood there were milestones and points where the Urgency Ordinance may be extended for a year or renew for another year, but the City Attorney should provide clarification.
City Attorney Casher explained that if the Urgency Ordinance was approved by the City Council, the moratorium would go into effect and the action to extend it could be on the Consent Calendar, and it would be brought forward before the 45-day period expired and could be done up to two years before permanent action was taken and the moratorium would go away.
Mayor Pro Tem Sasai referenced Page 117 of 146 of the agenda packet, Attachment A, Urgency Ordinance Service Station Ban, Section 3. Modifications to Service Stations, Generally, the second paragraph under this section which read: This Section shall not prohibit repair, maintenance, or modification of existing service stations, as long as such repair, maintenance, or modification does not result in an expansion of the use and is completed in compliance with the applicable requirement of Pinole Municipal Code Chapter 17.14. He asked for examples.
Community Development Director Whalen advised that hypothetically, if a convenience store at an existing gas station requested a permit to tear down and rebuild it would not be allowed. Some routine maintenance would be allowed. Another example was an existing gas station on Appian Way, which had already been entitled and had received building permits and would be allowed to continue with renovations. If the Urgency Ordinance were adopted, no existing gas station would be allowed to tear down and rebuild.
Council member Murphy asked for clarification as to how other transit agencies would be impacted by the Urgency Ordinance, to which Community Development Director Whalen explained that generally other agencies would be subject to the City’s Zoning Ordinance but Contra Costa County and WestCAT would be exempt from the Urgency Ordinance.
City Attorney Casher added that due to the laws around such Urgency Ordinances and moratoriums, it did not allow the City to impose this moratorium on Contra Costa County per state law.
Council member Murphy thanked staff for the work on the ordinance, understood other cities outside of Contra Costa County had enacted similar ordinances and looked forward to its promoting public health as intended.
PUBLIC HEARING OPENED
John Bender, Pinole, speaking as a private citizen, supported the temporary moratorium. He had spoken about the item when the City Council last discussed it, had read the staff report and continued to support a moratorium. He found this was all about public health and suggested the number of existing gas stations in Pinole was sufficient.
Rafael Menis, Pinole, speaking as a private citizen, supported the moratorium given the environmental impacts of gasoline and fossil fuels. He asked whether the prohibition of the expansion of accessory uses, such as convenience stores, was required as part of the state requirement for the way Urgency Ordinances were laid out.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mr. Menis highlighted and read into the record, Goal SE7, as shown on Page 419 and Goal SE3 as shown on Page 411 of the General Plan Sustainability Element. He found that most of the elements discussed in the Urgency Ordinance were a good idea but was unsure how the expansion of accessory buildings tied into the Urgency Ordinance.
Peter Murray, Pinole, explained that he had anticipated speaking on this issue when Safeway remodeled its site since Safeway initially had plans for a major service station and he was of the opinion a larger service station would provide cheaper gas in Pinole. He suggested it was a unique opportunity for a service station to provide not only gas services but EV and hydrogen fuel services, which may be the fuel of the future, although at this time the closest location to fuel a hydrogen vehicle was in the City of Berkeley. He suggested the moratorium not be considered completely if someone met certain criteria for EV or hydrogen fuel services since those transportation sources were anticipated and they could also influence existing service stations to offer those services in the future benefitting the community and citizens of Pinole.
Gabriel Sandoval, Pinole, thanked the Mayor Pro Tem for introducing the item to the City Council.
He supported the moratorium and found the issue was about health and the effort to keep Pinole as clean as possible. He suggested Pinole had enough gas stations, the community did not need more or larger gas stations and EV and hydrogen fueling stations could be addressed in the future. He suggested the moratorium should also include remodeling some gas stations that may be older and this could be a moratorium on existing fueling sites from increasing the number of pumps while allowing EV or renewable fuel sources.
George Pursley, Pinole, favored the adoption of the Urgency Ordinance and moratorium, as he had when he last addressed the City Council on the same topic. He too commented on the number of gas stations in the community and suggested people would not be inconvenienced if the moratorium was approved. He also commented on the number of EV charging stations near Sprouts and suggested the City of Pinole had the largest concentration of EV charging stations and service stations and he looked forward to more EV charging stations in the community. He asked the City Council to adopt the Urgency Ordinance, as proposed.
PUBLIC HEARING CLOSED
Council member Martinez-Rubin asked for clarification about the ability of existing gas stations transitioning to alternative resources and whether the moratorium would allow existing gas stations to make the modifications necessary to reduce the number of pumps for fuel in the same location and transfer to EV and hydrogen fuel if possible.
Community Development Director Whalen reported the moratorium had considered that possibility. The Pinole Municipal Code (PMC) already allowed for the expansion of an existing service station to incorporate EV charging stations or alternative fuels and the Urgency Ordinance had carved out that language to incentivize service stations to make that transition.
Mayor Pro Tem Sasai thanked staff for the carve out language in the Urgency Ordinance. He emphasized there was a climate emergency in Pinole, the City had to take bold action and he was excited should the Urgency Ordinance be adopted that it could be a model for other cities in the region to follow suit.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mayor Toms reported she and the Mayor Pro Tem had worked on the Urgency Ordinance and had discussed transitioning to hydrogen fuel and what that would look like with current technology.
The transition to EV charging could take place at a service station, shopping center or elsewhere.
When considering a permanent ordinance, she suggested the City Council consider accessory buildings and get more information on what was necessary for hydrogen refueling stations. She reported the City Council had previously been advised that hydrogen refueling stations would take place in a different stand-alone area as opposed to retrofitting an existing service station.
ACTION: Motion by Mayor Pro Tem Sasai/Mayor Toms to adopt an Urgency Ordinance, and making the findings to enact a temporary moratorium on the establishment of new service stations or expansion of existing service stations.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
11. OLD BUSINESS:
A. Receive Update on Status of Development of Parklet/Outdoor Dining Regulations in Pinole and Provide Direction. Action: Receive Update and Provide Direction (David Hanham)
Item continued to a future meeting.
B. Real Property Transfer Tax/Charter City Measure for November 2024 Ballot.
Action: Receive Report and Provide Direction (Markisha Guillory) Finance Director Markisha Guillory provided a PowerPoint presentation on the Real Property Transfer Tax (RPTT)/Charter City Measure for the November 2024 ballot, which included the background of the City Council’s direction to staff to explore five potential revenue measures and direction to staff to retain a polling firm to conduct research related to a potential November 2024 ballot measure. Staff had selected The Lew Edwards Group to conduct the poll. The potential revenue measures included RPTT/Charter City, Half-Cent Sales and Use Tax, Parcel Tax, Utility User’s Tax (UUT) Expansion and excise tax on sugar sweetened beverages (Soda Tax), and feedback had been provided from the consultant on each of the potential revenue measures, as outlined in the April 2, 2024 staff report. The excise tax option had been eliminated since the State passed legislation in 2018 banning any local government without an existing soda tax from establishing this tax for twelve years.
If the City Council directed staff to moved forward with an RPTT/Charter City measure on the November ballot, a number of steps would be required including voter approval to amend the City Charter and only then could an RPTT be enacted. If the charter included the RPTT, a 4/5 vote of the City Council would be required. Additional steps would be required to place the measure on the ballot including two public hearings to be held 30 days apart. The first public hearing would be held during the May 7, 2024 City Council meeting. The potential revenue to be generated would be approximately $1.5 million at the median of $12 dollars per $1,000 of sales value or a
1.2 percent rate.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
The City Council was asked to decide whether to pursue an RPTT/Charter City measure and/or another measure.
Mayor Toms clarified with City Attorney Casher that a majority vote of the Council may direct staff to bring back an item for the public hearing, with the 4/5th vote required after the second public hearing to advance a measure to the ballot.
Mayor Toms also clarified with Finance Director Guillory the polling from The Lew Edwards Group was due to be completed at the end of April 2024.
PUBLIC COMMENTS OPENED
Peter Murray, Pinole, stated he had been a member of the City Council when he had spoken against the RPTT option, which he found to be unfair, repressive and an unequal tax, taking away opportunities for first-time homebuyers and low-income persons, penalizing property owners who may leave the community and who would receive no benefit of the transfer tax in direct conflict with the intent of taxation. As to the Charter City measure, he found the City of Pinole was better served by being part of the theology of a General Law City with oversight by the State, which kept everyone in-line with respect to how cities operated. He suggested a City Manager form of government was best for the community, with a professional manager managing the City as opposed to a Strong Mayor who could be of any political bent. He hoped to have the opportunity to explain to voters his opinion in more depth if the item were to go to the ballot.
Rafael Menis, Pinole, commented that the items in the presentation seemed to be an overall discussion of which tax measures, if any, should move forward rather than the agenda item, as described, a discussion about the RPTT/Charter City. He asked staff to provide clarification.
City Attorney Casher explained that the item to be discussed was as described on the meeting agenda, including the other tax measure options staff had listed as potential ballot measures and for which staff did not need direction at this time. The RPTT/Charter City measure would require additional steps, as outlined in the PowerPoint presentation.
Mr. Menis expressed his support for the RPTT option. Of the options available and as outlined in the PowerPoint presentation, the RPTT measure would be the most equitable, could be drafted to target certain levels and could be shaped to only apply to purchases above a certain level, was a percentage-based tax with a larger impact on larger purchases and a smaller impact on smaller purchases, and would not disproportionately impact everyone like a parcel tax. Also, at any given year only, a small portion of property owners would be affected and over time it would affect everyone, which was the general nexus needed to make it meritorious.
Tyra Wright, President, Contra Costa Association of Realtors (CCAR), opposed the RPTT since by adding additional costs, roughly $9,000 to a transaction, could push first-time homebuyers and low-income families out of the market. She explained that buyers had many costs to keep in mind including insurance and fees for coverage, and due to the recent pending commission settlement, buyers could be faced paying additional fees not part of the original equation when looking to purchase a home. She asked the City Council to consider those impacts when looking to add even more of a burden to a potential homebuyer.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Debbie Long, Pinole, understood the City Council was looking at new forms of new taxation, although she was surprised the City Council was now considering an RPTT/Charter City when less than two years ago the City Council did not have the votes to move the item forward. She asked what had changed since that time.
Ms. Long commented that if the item came back for a public hearing, she planned to provide more viewpoints on her opposition but at this time noted a Charter City would allow for a Strong Mayor form of government giving the Mayor a larger and costlier role than just being part of the City Council in that Charter City Mayors may hire and fire a Police Chief without City Council oversight.
And, if the transfer tax were increased it would be based on the sales price of a home and not the net profits to the seller resulting in possible double taxation whereas the federal government only taxed on net profits. She emphasized that issue had not been discussed, many people were selling their homes since they could no longer afford to live in the Bay Area and needed to take their equity to live affordably elsewhere. By increasing the transfer tax, the City would be taking away money the property owner needed to live on.
Ms. Long pointed out that Pinole was a bedroom community comprised of middle-income families and not wealthy families and the City was not taking on the risk homeowners had. She questioned why the City could be taking a piece of the pie with the homeowner supporting the City through sales and property taxes and having to anticipate the costs of homeownership and save for maintenance and upgrades to their homes, which she suggested the City should do as well. If the City Council did not try to save money within its budget for ongoing maintenance, why should it be trusted to spend any more taxpayers’ dollars wisely. She opposed the City of Pinole trying to become a Charter City for the purpose of increasing the RPTT, and encouraged the City Council not to spend any more money pursuing this venture and instead review equitable ways to increase revenue starting with reducing the City’s budget.
George Pursley, Pinole, stated he had spoken to residents of Richmond and El Cerrito who were Charter Cities when the topic had come up last year. He supported the City’s efforts to increase revenue and did not find the RPTT to be a regressive tax and rather suggested it was a progressive tax. He noted the City of Richmond limited its RPTT to extremely high-end properties and unless a home was worth $250,000 to $1 million, the homeowner did not pay an RPTT. In that case, since the RPTT was limited to high-end properties, most of the time Realtors would pick it up and make more in commissions, and while he understood this may be a hard sell suggested the voters should have the ability to explore the options and make a judgment for themselves.
Irma Ruport, Pinole, also questioned the fact the agenda description for this item had not mentioned the other possible tax measures. She suggested the current City Council had inherited a mess, the City was going into a deficit, the City was losing money and sales receipts were down.
She understood the City must do something but would like to see all ballot measures be discussed and taken out to the public with no prior politician with self-interest allowed to speak out on what they wanted. She urged the City Council to be inclusive with the community, bring the community together, place the item on the November ballot or not. Again, she did not want to see old politicians return and push for something that had not been supported in the past. She emphasized taxpayers had to pay for whatever measure was proposed.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Kellie Taylor, Pinole, commented she did not have some of the information the City Council was discussing, and was informed by the City Clerk a copy of the agenda packet and PowerPoint presentation were available in the Council Chambers and posted online. She expressed concern with the idea of making a decision absent citizens’ being aware since some residents did not have WiFi or email access. She hoped there would be an effort to reach everyone in the community.
She opposed the agenda item.
Mayor Toms reported the City Council had been provided email communications that had been provided to the City Council prior to the meeting.
PUBLIC COMMENTS CLOSED
Council member Murphy asked of the projected estimated sales taxes, and Finance Director Guillory advised the information had been part of the January 16, 2024 City Council agenda packet, but approximately $2.5 million would be generated with the half-cent/sales tax measure and would align with the existing half-cent/sale tax measure already in place. The parcel tax measure would be $100 annually per residential parcel generating approximately $600,000 per year. She would have to get back to the City Council on the number of commercial properties in Pinole and the revenue that could be generated from those properties.
Council member Murphy understood the City was dealing with a number of plans to improve the quality of life for Pinole residents, including the recently adopted Parks Master Plan, as an example, and to fund that plan additional revenue was needed. Improvements were also needed for streets and roads. When he had come into office in 2021, the City had been faced with a $100 million deficit for deferred maintenance. He understood that anything that was on the ballot must be approved by Pinole voters and no Council member individually or collectively could increase taxes in the City of Pinole. The City Council had been asked to provide direction on solutions that would increase revenue for the City. He noted that any tax measure to be placed on the ballot required a 4/5th vote of the City Council.
Council member Murphy also acknowledged this topic had been discussed previously by the City Council. He asked how the item had been agendized in this particular way since he recalled the City Council had wanted to assess all revenue options at the same time.
Finance Director Guillory clarified a full menu of options had initially been presented to the City Council at a prior meeting, at which time the consultant firm Baker Tilly had also been present.
At that time a number of revenue enhancement options, tax measures and expenditure reduction options had been presented. From that menu of options, staff had been directed to go back and look at the five options as outlined in the PowerPoint presentation and staff report, which staff had analyzed and brought back as part of this presentation. She reiterated that no action would be taken at this time to place an item on the ballot, more discussion was required including a public hearing, and there would be more community input. If the City Council decided to move forward with the RPTT/Charter City measure, a polling firm would do the polling over the next few weeks and bring the results back to the City Council at a future meeting. While polling had been done around two years ago on the same topic, this was the normal course of action when looking at ballot measures and perceptions and opinions may have changed since the last polling had been done. It would be helpful to see where the public stands now and gauge interest. That public engagement piece would not require a 4/5ths vote of the City Council.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mayor Pro Tem Sasai asked whether there was any real evidence that an RPTT would hurt the real estate market in those communities where an RPTT had been enacted.
Finance Director Guillory was unaware of any evidence other than impacts to the real estate market from a recession in the general economy not from a city imposing an RPTT, which was based on information that was publicly available.
Mayor Pro Tem Sasai asked how rebates had been incorporated into an RPTT to help buyers and sellers to recover a portion of the tax, to which Finance Director Guillory understood the City of El Cerrito offered a rebate for seismic upgrades. The City of Pinole could also craft a rebate program if so inclined.
Mayor Pro Tem Sasai asked whether there was any data to prove if a city decided to become a Charter City whether that would increase the chance the city may become bankrupt, and Finance Director Guillory was unaware of any such data.
City Attorney Casher acknowledged that some Charter Cities had challenges but there was no correlation to the fact that a Charter City was the reason in that there were some General Law cities that had financial challenges as well.
Mayor Pro Tem Sasai understood that if the voters approved Pinole as a Charter City that would not allow the City Council to make decisions whether to shift to independent police oversight or a shift in the direction of a Strong Mayor format.
City Attorney Casher explained the proposal would be to adopt a City Charter and the charter would be very narrow and only adjust the City’s ability to increase the RPTT. The charter would include language that any other provision under the PMC and all other state laws would apply to the City of Pinole. The City could adopt other measures available to it under a charter, such as a Strong Mayor, but any change to the charter must be approved by the voters via a separate ballot initiative.
Mayor Pro Tem Sasai referenced the Safeway property which had a change of ownership over the past few years and was a substantial amount of property. Had the City imposed an RPTT, he asked how much revenue would have been generated from that property.
Finance Director Guillory was uncertain of the amount the property had been sold but it could have involved $12,000 per $1 million of the property value, as an example.
Council member Martinez-Rubin again clarified with Finance Director Guillory the amount of revenue that could be generated to the City if an RPTT were to be adopted.
Council member Martinez-Rubin read into the record the definitions for progressive, regressive and proportional taxes per the Internal Revenue Service (IRS) and offered examples of each.
She commented how cities were increasingly relying on e-commerce and online taxes with statewide discussions now occurring on how e-commerce sales taxes could be more equitably distributed amongst cities, a larger level discussion that had not been discussed by the City Council and may help or hinder the types of revenue generation by the City. She also commented on discussions about the difficulties of the current generation’s challenges in acquiring new property or ability to move out of a parent’s home, which also had to be considered with an RPTT.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Martinez-Rubin understood that if the City were to agree to have a narrow Charter City, it could change with a newly composed City Council in 2026, which may include experienced or inexperienced Council members in governance or taxation. With respect to polling, she also commented on the challenges with questions, return and response rates, and suggested more than two Council sessions would be needed to educate and inform the public on the underlying circumstances to consider with a Charter City versus a General Law City and potential RPTT, which would require significant engagement, more than what had been proposed.
She suggested those kinds of conversations required workshops with the public. She emphasized those were the kinds of conversations that were needed for voters to realize what would happen if the City were to potentially become a Charter City, possible consequences into the future, what it meant to the potential pool of would-be homeowners and impacts of the RPTT on the purchasing power of new homebuyers.
Council member Martinez-Rubin found that an RPTT was not a proportionate but a selective tax, and underlying the desire to have thousands, if not $1.5 million into the City, was because the City was very close to having a deficit in the budget given that the City’s expenses were increasingly above revenues. She added that the discussion was related to revenue generation but there were different tax options that would represent more of a proportionate tax than an RPTT.
Council member Tave acknowledged the discussion about the looming deficit but found the City had shown a lot of progress over the years and the prior and current City Councils had shown what City services could be provided, such as the Parks Master Plan, CAAP, work with MCE and things that had been done where the community had participated. Council members were elected to assess all information with staff assistance to ensure all options had been presented to the public. He emphasized the decision and power sat with the public who had the right to decide whether to move forward with an RPTT/Charter City measure. If the voters approved an RPTT/Charter City measure, he asked whether that could be reversed by voters at any point.
City Attorney Casher confirmed that voters could return to a General Law City.
Council member Tave clarified that the City Council was only discussing an RPTT and narrow Charter City as neighboring cities had done for years, and Pinole had to consider all options. He questioned why only the RPTT/Charter City measure had been pulled out while the remaining options had not been presented in the same way on the agenda description.
Finance Director Guillory again explained that the RPTT/Charter City measure required additional steps, which was why it had been pulled out separately, as outlined in the PowerPoint presentation and April 2, 2024 staff report. The City Council had considered the other options that staff had been directed to research, which had been included in the RFP to the consultants, as detailed in the PowerPoint presentation and staff report.
Finance Director Guillory cautioned the City had to be mindful about the number of questions to be asked in the polling due to survey fatigue, and it would be better to focus on a couple of options similar to a polling effort that had been conducted in 2022. Based on the consultant’s experience, the consultant had recommended the RPTT/Charter City and half-cent sales tax measure options, but it was up to the City Council whether or not to include the other options.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Tave recalled a past poll had returned with split results and he suggested the same would occur. He emphasized due diligence was needed to weigh all options, to ensure the City continued to provide the services it was providing, increase the vitality of the City and again explore all options. He asked about the timeline for the RPTT/Charter City measure and how the community could ensure that it had been heard.
City Attorney Casher reiterated that as part of the RPTT/Charter City measure, the first public hearing would have to occur at the first City Council meeting in May 2024, the second public hearing no earlier than 30 days later at the first meeting in June, and then the ballot measure would need to be placed on the ballot in August 2024. There would be opportunities for community engagement between and throughout that process. Results from the polling would be available at the end of April and would be presented to the City Council in some form in May to help inform further discussions of the options. The time sensitive issue was the RPTT/Charter City measure.
Council member Murphy understood there could not be an RPTT without a Charter City. He commented that the City Council had previously discussed the opportunities of an elected Mayor and he had requested a future agenda item on that topic. He asked how the City Council could incorporate that conversation, and asked whether staff had reached out to those jurisdictions that were Charter Cities similar in size to Pinole to address some of the concerns raised by Pinole residents.
Finance Director Guillory advised she had not done such research, had not reached out to other Charter Cities, but reiterated that as far as she was aware there was no correlation between a Charter City and financial distress, as an example.
Council member Murphy commented that if the City Council were to move forward with the RPTT/Charter City measure, he would like to see whether there were other forms of charters from cities of similar size to Pinole and how that educational piece could be implemented in future public hearings, which could include charters that were in financial distress, and Finance Director Guillory confirmed that examples of charters from cities of similar size could be provided.
Mayor Toms expressed concern with the RPTT piece of the RPTT/Charter City measure. She worked on housing for all income levels as part of her career, and expressed concern with an RPTT imposing a fee on a certain segment of the population, which she found to be inequitable with no nexus for someone who was selling their home, such as a senior citizen who may be saddled with a tax for improvements they could no longer enjoy, or a buyer paying the tax that was not proportional, as examples. Also, due to Proposition 13, new home buyers would be paying hefty property taxes already and having to pay those taxes along with an RPTT may push people out of the market.
Mayor Toms stated she had advocated for taxpayers to consider a sales tax or expand the UUT.
Having worked on several tax measures in the City of Pinole, she was aware what was saleable to Pinole voters. She suggested an RPTT was not saleable and she would hate to miss the 2024 election focusing on the big number of an RPTT and miss the opportunity of being successful on a moderate tax more evenly split amongst residents or among the people who shopped in Pinole.
She looked forward to the staff report and polling data on the other proposed tax measures and depending on the vote for this agenda item, there may be polling required for the RPTT as well.
She reiterated she did not support the RPTT/Charter City measure.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Council member Tave suggested there was another option that could be split, it did not have to be seller or buyer, but a seller/buyer rebate as some cities had offered as part of other strategies.
He understood the concerns for an RPTT could be an additional burden but an RPTT had been imposed in the cities of El Cerrito and Richmond, was a cost of doing business within the region, and the question was how the cost would benefit the City of Pinole. He questioned what the funds from the RPTT could be used for, whether rebate programs or other options. He looked forward to future discussions and suggested the RPTT/Charter City measure would be more flexible than people realized.
Mayor Toms reiterated her concerns with the RPTT/Charter City measure regardless of who paid the RPTT, buyer or seller, since it was still the cost of the transaction and would fly in the face of some of the goals the City was trying to promote by having housing be more affordable.
Council member Murphy understood the sales tax option would hit one’s income more and was a regressive tax. He asked how Council members saw a vision of what had the most flexibility in the recommended tax measures including the RPTT/Charter City measure, Parcel Tax and HalfCent Sales Tax Measures. He suggested all of the options would be regressive in that they would impact different people with different incomes, with those with a lower income to be hit more than those with higher incomes based on each tax option.
Mayor Toms noted the tax option was not based on one’s income but based on the cost of the transaction and someone with a higher income may be doing more transactions.
Council member Martinez-Rubin reiterated the definitions for progressive, regressive and proportional taxes she had read into the record had come directly from the IRS. She reiterated her concerns and opinion about the RPTT/Charter City measure. She was uncertain whether the City Council wanted staff to spend the time to meet with the consultant and come up with questions on a poll pertaining to the RPTT/Charter City measure only where the questions needed to be framed in such a way to be comprehended by the would-be voter, which was a challenge.
None of the other taxing measures required a Charter City as did the RPTT/Charter City measure.
She preferred that more priority be given to the taxing measures that were more proportional and the same amount for everyone, such as the half-cent sales tax and expansion of the UUT.
Council member Tave noted all three of those tax options regardless of the level of income one would pay as part of a transaction, whereas the RPTT could be tailored and somewhat address equity across the housing market. As an example, he suggested the Pinole Perks Program offered the same concept and was equivalent to the RPTT. He wanted to address equity in the RPTT and asked if that should be included in the polling. He did not favor taking the RPTT/Charter City measure off the table.
Mayor Pro Tem Sasai understood equity was a priority for the City Council. He suggested sales taxes were proportional taxes and inequitable by nature, and the RPTT/Charter City measure offered the opportunity and flexibility for an equitable option for people to want to be residents of Pinole. He asked about language that could be considered in the tax measure to lift up lowincome homeowners.
Finance Director Guillory clarified there were no standards but some cities had a tiered system such as the City of Richmond’s RPTT, which had a tiered structure.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Finance Director Guillory stated the RPTT could be crafted in any way the City Council desired, with the 1.2 percent rate that had been included, the median for the comparative cities to Pinole and that percentage could be higher or lower.
Mayor Pro Tem Sasai emphasized that equity was a priority for him and the decisions around tax measures. He found proportional tax measures to be inequitable while the RPTT/Charter City measure was equitable.
Council member Martinez-Rubin again referenced the IRS definitions for progressive, regressive and proportional taxes and suggested the discussion was mixing some of the definitions, although the Mayor Pro Tem disagreed and found the concepts to be interconnected.
Council member Murphy emphasized the importance of having a conversation about all of the options at one time, which was important when considering framing future agenda items. He recommended if the City Council moved forward with a public hearing for the first meeting of May for the RPTT/Charter City measure, it also include a public hearing for each one of the tax measure options identified.
Council member Murphy offered a motion to move forward with a public hearing around the RPTT/Charter City measure for the November 2024 ballot and a public hearing for the sales tax and parcel tax measures on the same agenda.
As to whether the items could be included within the same agenda item, City Attorney Casher stated he would look into it and if needed the items may have to be separated. A standalone public hearing would be required for the RPTT/Charter City measure.
Council member Murphy clarified he would like the items to be separate items because he wanted to be sensitive to the legal requirements for a public hearing for the RPTT/Charter City measure but suggested the same standard could apply to the idea of the parcel tax and sales tax options.
It did not need to be one item but different items on the meeting agenda. He wanted to continue the conversations as part of a public hearing.
Mayor Toms suggested it was important to have the items be part of one item to allow a discussion of all items together.
Council member Tave understood the RPTT/Charter City measure had different strings attached and must be its own agenda item, voted on, and then have a discussion on the other tax measures. He asked whether staff could put that together in one month to allow a discussion of the full picture and a conversation on all three tax measures, to then vote on them separately.
Council member Murphy explained that was his intent with the motion but understood the RPTT/Charter City measure required is own legal process.
Finance Director Guillory was uncertain where this discussion fell in with the polling results.
Council member Murphy understood the polling would ask about the options (RPTT/Charter City, Parcel Tax, Half-Cent Sales Tax and UUT) with the exception of the excise tax option that had been taken off of the table, with the public to be asked what option was best for the community.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Finance Director Guillory noted that ideally for polling purposes two options would be preferred but she could work with the consultant on four options if that was the direction from the City Council.
Mayor Toms suggested if they wanted fewer options on the poll, her preference was not to include the RPTT/Charter City measure and Parcel Tax, but understood her fellow Council members did not agree. She understood a Parcel Tax had a higher passage rate requirement and possibly that option could be dropped.
Council member Martinez-Rubin commented on the time challenges to promote and inform the public of all information before the first City Council meeting in May and she wanted the public to have the time to plan and have the opportunity to discuss issues that may affect them. She was uncertain that was feasible for the first meeting in May.
Council member Tave pointed out this discussion was not new, the discussion had been ongoing for four years, but he understood the need to re-engage the community. If he had to choose, he suggested the RPTT/Charter City and Half-Cent sales tax measures should be the options to consider, should be the top priorities and were the most reasonable given the time constraints.
Mayor Toms suggested the three tax options under consideration should be RPTT/Charter City measure, Half-Cent Sales Tax and UUT. A 4/5ths vote was required to place an item on the ballot, and she pointed out when the RPTT/Charter City measure had previously been discussed there had not been majority support from the City Council at that time. She recommended the options should be left open for the Half-Cent Sales Tax and UUT.
Finance Director Guillory understood the options to be considered would be the RPTT/Charter City measure, Half-Cent Sales Tax and UUT.
Council member Murphy restated his motion, seconded by Council member Tave for staff to move forward with three different public hearings for the first City Council meeting of May 2024, with the three taxing measures to include 1) RPTT/Charter City measure, 2) Half-Cent Sales Tax, and 3) UUT.
ACTION: Motion by Council members Murphy/Tave for staff to move forward with three different public hearings for the first City Council meeting of May 2024, with the three taxing measures to include 1) Real Property Transfer Tax/Charter City measure, 2) HalfCent Sales Tax, and 3) Utility User’s Tax.
Vote: Passed 3-2
Ayes: Sasai, Murphy, Tave
Noes: Toms, Martinez-Rubin
Abstain: None
Absent: None
12. NEW BUSINESS
A. Purchase of General Use Vehicles to Replace Aging City Fleet Vehicles. Action:
Receive Report and Provide Direction (Joseph Bingaman, Sanjay Mishra)
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Public Works Director Mishra provided a PowerPoint presentation on the Purchase of General Use Vehicles to Replace Aging City Fleet Vehicles, which included an overview of the purpose of the General Use Vehicles. The City currently had a fleet of five sedans that were used by the Public Works, Community Development and Community Services Departments that were more than 20 years of age and due to age should be replaced. He highlighted the pros and cons of transitioning to electric vehicles, the limited purchasing options for electric vehicles with staff required to purchase from existing retail inventory along with the details for the plug-in, hybrid and electric vehicle options and costs. The City Council was asked to receive the report and provide direction.
Council member Murphy noted the City Council had recently approved the City’s Procurement Policy and asked whether staff had a recommendation at this time based on the options provided.
Public Works Director Mishra suggested the Chevy Models were the only models that would be prioritized pursuant to the Procurement Policy, but cautioned the models had been discontinued although some remained on the market.
In response to Mayor Pro Tem Sasai, Public Works Director Mishra clarified that staff was recommending that two vehicles be replaced this year and two more would be recommended for replacement in the next year. One of the vehicles would be used for the Pinole-Hercules Wastewater Treatment Plant and the other for the Public Works Department. The Public Works Inspection Team fleet vehicle must have the ability to be a hybrid and be all-wheel drive. Most of the options provided were not all-wheel drive models. He also clarified the costs for the EV charging stations with one for the Pinole-Hercules Wastewater Treatment Plant to cost more, between $3,000 and $8,000, as outlined in the April 2, 2024 staff report. He also clarified the models that were on the list of United Auto Workers (UAW) vehicles, detailed the differences between the models as shown in the PowerPoint presentation and staff report, noted the costs were almost the same depending on the features, and suggested no more than four staff persons would likely need to be in the vehicle at the same time, which vehicle would be used for the PinoleHercules Wastewater Treatment Plant.
If the City Council preferred the 2023 EUV Chevy Bolt model for the two vehicles, two residential EV charging stations would be required. The two vehicles would cost between $65,000 and $70,000 plus taxes in addition to possible extra accessories, with the EV chargers to cost $16,000.
The costs for the 2023 Chevy Bolt EV model were again detailed as well, would include similar costs, and he recommended the compact Chevy Bolt EUV model as the preferred option.
Public Works Director Mishra again walked through the cost of each vehicle model as shown in the PowerPoint presentation and staff report.
Council member Martinez-Rubin understood the existing City vehicles that were 20 years old had a lot of maintenance costs due to age but had low mileage. She asked about the lifespan for the vehicles, and Public Works Director Mishra explained that the vehicles were typically auctioned off and recovery was not great with the City getting anywhere from $2,000 to $3,000 per vehicle.
Council member Martinez-Rubin recalled the Bay Area Air Quality Management District (BAAQMD) had at one time offered a program with funds to cities for EV charging stations. She asked about the status of that program.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Public Works Director Mishra confirmed the BAAQMD provided such a program which required application for each vehicle and other criteria that had to be met. Staff was working with Contra Costa County to be part of a Charging and Fueling Infrastructure (CFI) Grant, specifically for local agency fleet chargers somewhere in nearby County facilities.
Council member Martinez-Rubin asked when a vehicle model was discontinued if there was a risk because parts may not be available, and Public Works Director Mishra confirmed that was a risk and maintenance could be difficult or delayed if parts were unavailable.
Council member Martinez-Rubin again asked of the staff preference of vehicle models given the staff needs, costs, amount of use, life of the vehicle and fuel efficiency, including electrical fuel efficiency.
Public Works Director Mishra explained that this item had previously been discussed by the City Council, the item had been pulled and the staff recommendation had not changed. Staff recommended at least one plug-in hybrid vehicle which could be used in any circumstance and one full EV vehicle, which the Pinole-Hercules Wastewater Treatment Plant staff could use and which staff was of the opinion the Tesla Model 3 would be adequate since the model was continuing, had been tested, had the best cost based on life expectancy, had parts available and the model had been procured by other public agencies using public funds.
Council member Tave again referenced the recent adoption of the City’s Procurement Policy and asked whether staff had explored the lease buy-back model to help curb costs and which would offer maintenance services. He had no preference other than to follow the policy the City Council had approved.
Public Works Director Mishra stated he had not investigated the costs of a lease buy-back model but if that was the desire of the City Council he would research those costs.
Mayor Toms suggested the Chevy Bolt, whether the EV or EUV model, would be the best option but would depend on what was available. She suggested those models were good pool vehicles for public agencies and while the models had been discontinued since the manufacturer was changing the batteries, she understood they would pick up again in 2025 or 2026. She had a Chevy Bolt model with over 65,000 miles and the only maintenance required was the rotation of tires. She suggested the cost of installing the chargers, when installing the conduit, would be the same price for two as it was for one, and that was the direction the City should follow since it fit into the CAAP for the City to move towards more green energy. The Chevy Bolts were also more consistent with more union made vehicles.
PUBLIC COMMENTS OPENED
Rafael Menis, Pinole, suggested it would be a benefit to the City to purchase electric vehicles rather than hybrids, both in terms of the CAAP and the Sustainability Element and shift away from relying on gas powered vehicles given the City Council action to approve a moratorium on the establishment of new service stations or expansion of existing service stations. While he agreed with many of the points made by the Mayor about the ultimate availability of the Chevy Bolt models, he asked whether it would be possible for the City to obtain a four-wheel drive electric vehicle along with the Chevy Bolt to ensure the City had one vehicle with all-terrain capability and the other vehicles could be more standard.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mr. Menis added in terms of the conduit and EV charging station costs, depending on how the City structured its fees, there could be potential cost savings by having those EV charging stations open to the public during the time when not used to charge City vehicles. He suggested it would be beneficial to the City on net to install more EV charging stations for more infrastructure than it needed now since over time it would be a broader benefit to the City and the public and purchasing electric vehicles was justification for those additional charging stations.
PUBLIC COMMENTS CLOSED
ACTION: Motion by Mayor Toms/Mayor Pro Tem Sasai to provide direction to staff to purchase two of the Chevy Bolts and leave it to staff to be flexible whether the EV or EUV model, based on availability.
Vote: Passed 5-0
Ayes: Toms, Sasai, Martinez-Rubin, Murphy, Tave
Noes: None
Abstain: None
Absent: None
13. CITIZENS TO BE HEARD (Continued from Item 6) (Public Comments) Only open to members of the public who did not speak under the first Citizens to be Heard, Agenda Item 6.
Citizens may speak under any item not listed on the Agenda. The time limit is 3 minutes and is subject to modification by the Mayor. Individuals may not share or offer time to another speaker.
Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future Council meeting.
Kellie Tayor, Pinole, stated she had been born and raised in the City of Pinole. She highlighted her attendance and education at Pinole schools and commented on her understanding a decision had been made to change the City’s official Seal and Logo. Referencing the history of the City of Pinole, the Ellerhorst Family, Native American Tribes and settlers in the area, she questioned the decision to change the City Seal and Logo and asked that the original Seal and Logo be preserved.
Christy Lam-Julian, Pinole, stated as a Contra Costa Developmental Disabilities Boardmember, and a parent, she appreciated the City Council’s proclamation recognizing Autism Acceptance Awareness Month. She emphasized the importance of shedding light on the diverse experiences and perspectives of the developmental disabilities community by fostering greater awareness, understanding and inclusion. She looked forward to working with the City of Pinole on a more inclusive society because kindness, compassion and respect spoke volumes.
Anthony Vossbrink, Pinole, commented on the increase in crime in the City and suggested the City Council, Mayor and Interim City Manager/Police Chief prioritize this issue. He reported a strong-arm robbery had occurred in the last week and similar incidents prior to that which had been centered in and around the Fitzgerald Drive Corridor and Appian Way. He asked whether the City had a crime reduction strategy.
Pinole City Council Regular Meeting
Minutes – April 2, 2024
Mr. Vossbrink urged the City Council to spend taxpayer dollars better than on drone shows, and consider funding another beat cop or public works maintenance worker. He also expressed concern with the City Council considering asking residents to pay more in taxes while street lights remained inoperable up and down Pinole Valley Road, there continued to be basic infrastructure problems and street lights were out on San Pablo Avenue, which should all be addressed prior to future tax initiatives. In addition, waste recycling cans remained missing as well as toilet seat covers in the restrooms near the dog park.
Mayor Toms reported a meet and greet with Pinole Police Officers had been scheduled for April 20, 2024 at 5:00 p.m. at Fernandez Park, which would offer a good opportunity for the public to speak with those Police Officers serving the City of Pinole.
14. ADJOURNMENT to the Regular City Council Meeting of April 16, 2024 in Remembrance of Amber Swartz.
At 10:28 p.m., Mayor Toms adjourned the meeting to the Regular City Council Meeting of April 16, 2024 in Remembrance of Amber Swartz.
Submitted by:
_________________________________
Heather Bell, CMC
City Clerk
Approved by City Council:
CITY COUNCIL
REPORT 9.C.
DATE: APRIL 16, 2024
TO: MAYOR AND COUNCIL MEMBERS
FROM: LILLY WHALEN, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: QUARTERLY UPDATE ON THE ECONOMIC DEVELOPMENT STRATEGY (COVERING JULY 2023-MARCH 2024)
RECOMMENDATION
City Staff recommends that the City Council receive and file report.
BACKGROUND
The City of Pinole (“City”) adopted an Economic Development Strategy (“Strategy”) in October 2022. The Strategy has six major initiatives to pursue over three years:
1. Economic Development branding and marketing
2. Business retention, expansion, and attraction around target industry clusters
3. Regional partnerships to expand resources for entrepreneurial development
4. Review and strengthen Pinole’s business/development friendliness
5. Expand development capacity and pursue placemaking projects
6. Enhance interface with education/workforce development partners This report provides an update on Year 1 activities per quarter to date (July 2023 through March 2024) undertaken by City staff and its consultant, RSG Inc. It also summarizes action steps to come in Year 2 (2024-25). Future updates will be provided on a quarterly basis.
REVIEW AND ANALYSIS
Q1 Accomplishments (July to September 2023)
Business Visitations and Stakeholder Outreach (Initiatives 1-4) In July 2023, RSG met with 12 Pinole business owners and stakeholders to introduce the Strategy and collect feedback on what the City could do to support the business community.
The main recommendations were:
Make Old Town Pinole a Destination for people in and outside of Pinole. The community craves a central location to gather, especially young families who move for the affordability but miss the amenities of more urban areas. Take advantage of Pinole’s unique historic architecture to create a vibrant downtown.
• Define the Old Town Pinole area (signage, banners, lighting). • Market Old Town Pinole and local businesses on social media. Pinole needs
a central, coordinated social media marketing efforts.
• Host special and pop-up events to increase foot traffic (live music, food, public art showcases, etc.). Take care of event permit processing, fees, and alcohol licenses. Market to public and inform local businesses. • Take advantage of open spaces (Community Corner, Fernandez Park) to create gathering spaces and build community.
• Increase lighting (Trees and street), outdoor seating, and walkability.
Nights are too dark and the streets are empty.
• Diversify businesses by attracting more sit down restaurants and boutique retail (small grocery store, bookstore, apothecary, etc.). Embrace local small businesses and artisans.
Pinole needs someone to take leadership on coordinated business improvement and economic development efforts and someone to be the face for these efforts. Business owners are too busy to coordinate joint events, marketing, or improvements (street, façade, lighting, etc.). A new City Economic Development staff member could fill this role to act as a champion for local businesses. If a critical mass of businesses participate, others will follow and the City can activate volunteers in the business community.
Keeping a pulse on the community and building rapport. Businesses will be more willing to contribute their time and money on joint business improvement efforts, like a Business Improvement District or business association, if they have confidence in the City and see value in what they are doing. A City Economic Development staff member could conduct business visitations on a regular basis to gain the business community’s insight and support their success. Bilingual efforts could help build trust with immigrant entrepreneurs.
Promote Pinole as a business friendly City. Assist with permit processing and fees.
Coordinate permitting efforts between departments. New and old entrepreneurs are overwhelmed by the length and cost of the permitting process to open a business and obtain special licenses. Dealing with multiple agencies, such as the Health Department or Fire, can create a bottleneck. A Business Concierge and Quick Response Team could help relieve some of this pressure by walking customers through the permitting process and assisting along the way. The City can communicate when it is implementing a third-party or legal requirement that is out of its hands, but is doing what it can do help. An in-house Economic Development staff person is necessary to lead this effort, which is why this initiative has been shifted from Year 1 to Year 2.
Assist with façade improvements. The City could consider providing financial and permitting assistance to businesses to conform with signage requirements and refurbish properties in disrepair. Since the City is a General Law City, how this is structured is critical to not trigger prevailing wage on small businesses who would receive a grant.
Connect businesses to hiring resources, like the workforce development board or SBDC at Contra Costa College. Employers are having a hard time finding employees, especially when paying closer to minimum wage ($15-$18/hour). Some businesses cannot afford to go higher without pricing their goods and services out of the market.
Consider cross-jurisdictional promotion by partnering with the East Bay Economic Development Alliance (EDA) and neighboring cities to promote businesses in the area on a regional basis (e.g. create an “East Bay Made” or “Pinole Made marketing program where local jurisdictions and business can take a template to cater locally).
Activate the Community Corner or other public spaces with a special events. Many business owners commented the City only hosts a few special events, but it the City hosts several per year. There is a gap in marketing or communication here. Other types of events to generate foot traffic for businesses could include pop-up artisan markets, craft beer fairs, food truck pods, street fairs, and festivals. One Old Town business mentioned their evening sales doubled during special events at Fernandez Park. This could be done by City staff or a volunteer effort to start. Finding a volunteer or volunteers who are downtown stakeholders to take the lead on this could test out if there is sufficient interest from these parties to invest in their own promotional efforts, and in turn, a more organized effort such as a business improvement district. If this is done on a volunteer basis, the City could consider permit expediting, barrier staging support, trash can placement, and site clean-up.
Out of all the suggestions we heard, one suggestion stands out amongst the rest. That is hiring an economic development staff person. Staff has found with RSG’s economic development program implementation support, having someone on board to facilitate these business-related conversations is critical to understanding and supporting our vital business community.
Market Research (Initiative 1D)
CoStar market reports demonstrate strong occupancy rates overall, despite some shopping centers with lower vacancy rates. An evaluation of sales tax data (which is confidential) reveals the importance of building relationships to retain valued businesses that are high sales tax generators. A Smith Travel Research market report shows little demand for new hotels, however the City can focus on improving existing hotel sites and talking to hoteliers and others. We have started these efforts and will continue these conversations at the International Council of Shopping Centers (“ICSC”) conference in May 2024 to market the City.
Target Industry Clusters (Initiative 2A)
Based on market research and feedback from stakeholders, City staff identified eight target clusters to focus business retention and attraction efforts:
1. Retail/Restaurant (entertainment and placemaking uses)
2. Health Services
3. Information Technology and Analytical Instruments
4. Medical Devices
5. Communications Equipment and Services
6. Business/Professional Services
7. Insurance Services
8. Video Production and Distribution (motion picture production and related industries such as a film tech school or equipment rental and catering could complement new WB soundstage in Vallejo)
Hospitality and Tourism was not selected as a target cluster because there is little demand for new hotel, however City staff and RSG are talking to hotel owners about potential for
improvements.
RSG reviewed business license data and compiled a list of Pinole business that are within these target clusters.
Identified Opportunity Sites (Initiative 5C)
City staff identified over 20 sites in the City that offer potential for new development or improvements. The sites will be marketed to retailers, and developers at the ICSC conference in May 2024.
Reviewed Available Funding Resources (Initiative 5C)
City staff determined there are no remaining American Rescue Plan Act (ARPA) dollars available for economic development efforts. As an alternative, City staff is considering the use of City funds already budgeted for complementary efforts (e.g. Capital Improvement Projects for lighting or road improvements) and exploring grants or other public agency assistance. The City would need to be cautious about whether any direct assistance to businesses could trigger prevailing wage, in which case it could be beneficial to contract with a third party to administer funds.
Q2 Accomplishments (October to December 2023)
Broker/Developer Outreach (Initiative 1)
RSG has spoken with local brokers at Lee and Associates and Colliers who are interested in cultivating an ongoing relationship. Colliers offered to connect the City to their research team to identify trends in Pinole and the larger region and share the types of economic incentives their brokers are seeing around the State. Broker outreach will be an ongoing long-term effort.
RSG has also spoken with several developers active in the city to connect them with the appropriate City departments and has support the Department’s conversations with them.
Economic Development Branding (Initiative 1A)
City staff worked with Golden Shovel to develop temporary economic development branding guidelines and a tagline that will be used in marketing materials at ICSC and to refresh the City’s Economic Development webpage.
Summit Meeting (Initiative 1E)
RSG and City staff planned for the Summit Meeting described under the Q3 accomplishments, coordinating event logistics and inviting speakers.
Target Industry Clusters (Initiative 2A)
RSG reviewed business license data and compiled a list of Pinole business that are within the target industry clusters identified in Q1 to inform business retention efforts.
Explored Partnership with California Main Street (Initiative 2C) California Main Street (CAMS), a division of Main Street America, was established by the National Trust for Historic Preservation to address issues facing older and historic downtowns.
The City explored whether CAMS could engage with business owners to coordinate marketing, retention, and attraction efforts. The average cost is $375,000 per year with a recommended minimum of $150,000 per year. A City staff member would devote 10-25% of their time to assist as needed (special event planning and permitting, talking to Council members, etc.).
The program takes about one to two years to implement after conducting initial business outreach to create a Board, strategy, and business volunteer committees.
After exploring this option, RSG recommends hiring an in-house Economic Development staff person as intended by the Strategy (ideally, full-time). Main Street does not provide direct staffing, and instead coordinates with business owners to volunteer their services. The City needs in-house staff to serve as the face of the City as a Business Concierge, to gain valuable business community insight, assist in aligning City efforts and messaging with the business community, and cultivate a trusted ongoing relationship with business owners.
Bayfront Chamber Meeting (Initiative 2C)
City staff and RSG met with the Bayfront Chamber, who supports the Pinole small business community through marketing, advising on improvements, and business visits. The Chamber was instrumental in helping the City implement its Pinole Perks program last year. The Chamber offered suggestions to implement the Strategy, including:
• Help Old Town Businesses with marketing, improving lighting, bringing in foot traffic, and slowing down the street.
• Promote Business Outside Major Shopping Areas, such as the Trader Joes shopping Center.
• Expand Pinole Perks to revive the program around short-term events, such as Small Business Saturday, Small Business Week, and the holiday season.
Chamber staff attended the Economic Development Summit and offered to promote the meeting to its members.
Customer Relationship Management (Initiative 2)
City staff explored different options for a Customer Relationship Management (CRM) system to help manage economic development outreach efforts by populating with business license data, identifying key stakeholder contacts, tracking business type, number of employees, ownership/rental status, lease terms, important dates, log dates and topics of contact, and set reminders to follow up as needed. It is possible this could be built into the City’s new permit application system; however other options will be explored.
New Permit Application System (Initiative 4)
City staff expect the new permitting system, a two-year implementation project, will be released to the public in May of 2024. This comprehensive and centralized web-based system will enable citizens, business owners, contractors, architects, and engineers to view project, permit and license status, submit applications, and request inspections 24/7 from the comfort of their own homes. The system will increase efficiencies for the City, access to the public and improve turnaround times significantly.
Identified Potential Grant / State Funding Needs (Initiative 5C) City staff brainstormed economic development projects that could be promoted by Townsend Public Affairs, who helps the City obtain grants and State funding, which includes many of the improvements suggested by business owners (e.g. lighting, façade, and street improvements, public art, small business support).
Q3 Accomplishments (January to March 2024)
Summit Meeting (Initiative 1E)
The City hosted an Economic Development Summit on February 15, 2024 to update stakeholders on the Strategy and make a call to action. Six regional partners (Small Business Development Center, East Bay, Contra Costa County, East Bay Renaissance Entrepreneurship Center, San Pablo Economic Development Corporation, Bayfront Chamber of Commerce and the East Bay Economic Development Alliance) presented the services they offer to local businesses. The Summit was attended by 37 stakeholders who were invited to stay informed, be involved, invest their time and resources, and ignite positive change. Nine stakeholders provided their contact information and expressed interest in assisting the City with its efforts. More information about the Summit, including the slides and an abbreviated recording of the slide presentation, can be found on the City’s Economic Development page.
Business Visitations (Initiatives 1-4)
City staff and RSG met with a local family interested in transforming their property into a new special event space. City staff visited the property to advise on improvements necessary for the entitlement and building permit process and connected the family to related resources such as the Small Business Development Center and County Health Department. RSG had spoken with this family since July 2023 about what they envision for their property, which prompted the meeting.
RSG met with three other businesses to offer the City’s assistance to achieve future goals for their properties. The efforts here are focusing on how to help them owners achieve a greater use for their properties/businesses while aligning the development with the City’s goals. This will be an ongoing discussion.
Shopping Center Outreach (Initiative 5A)
RSG has contacted over 10 shopping center owners to offer the City’s help recruiting new tenants at the ICSC conference in May 2024 and offer ongoing assistance to recruit new businesses when they have vacancies. Two shopping center owners provided information about vacancies and desired tenants. Two additional shopping center owners/property managers will meet with City staff and RSG at ICSC.
ICSC Preparation and Marketing Materials (Initiative 1) City staff and RSG are developing a brochure to market the City to retailers at ICSC, which will highlight Pinole’s strengths and include a link to a map with Opportunity Sites, including information about available vacancies shared by shopping center owners (see Attachment A for draft brochure, noting that the links/QR codes are still in draft form).
EIFD Memo (Initiative 5A)
RSG provided a memo (Attachment B) giving an overview of what Enhanced Infrastructure Financing Districts can do as a tax increment financing tool, including eligible projects. If directed by City Council, City staff can pursue an EIFD feasibility study to explore if this is a viable tool for Pinole.
Upcoming Actions
The remainder of Year 1 will focus on:
▪ Shopping center and business owner outreach. Staff and RSG will continue to contact key business and shopping center owners to let them know they are valued in Pinole, understand their future plans, learn of current or upcoming vacancies, and offer the City’s assistance to advance any revitalization goals.
▪ Business Recruitment. City staff will attend the national International Council of Shopping Centers (“ICSC”) conference in May 2024 to meet with retailers that the City may be interested in recruiting, and existing Pinole retailers that are valued tenants.
Staff will talk to exhibitors to market Pinole and provide a map of potential opportunity sites in the City.
▪ Economic Development Webpage Improvements. City staff and RSG will suggest improvements. It will include hiring and entrepreneurial resources such as the Workforce Development Board of Contra Costa County, Small Business Development Center, and East Bay Renaissance Entrepreneurship Center. Employers are having a hard time finding employees, especially when paying closer to minimum wage. Some businesses cannot afford to go higher without pricing their goods and services out of the market. These resources can help employers strategize to find employees and develop business plans.
▪ Recruit a leader to coordinate business improvement efforts and act as a liaison between businesses and the City. This person would partner with businesses to coordinate special events, undertake regional marketing, and advocate for improvements important to local businesses (such as outdoor seating, façade improvements, increased lighting, etc.). This step is essential groundwork for establishing a Pinole business concierge and quick response team. RSG recommends hiring a full-time Economic Development Manager to fulfil this role given the volume of work involved. Aging this is a critical component to help support and understand the business community while supporting City goals and programs. ▪ Keep a pulse on the community and build rapport. Businesses will be more willing to contribute their time and money on joint efforts, like a Business Improvement District (“BID”), if they have confidence in the City and see value in what we are doing. Exploring the potential of a BID is a Year 2 action item; establishing a BID is typically a 2-3 year process that requires significant business outreach to build trust.
A summary of Year 1 and upcoming Year 2 action steps are provided in the following Table 1.
Initiative Year 1 Essential
Actions
Status Year 2 Actions
1. Branding/Marketi
ng
1. ED website /
new brand
2. Launch
retail/restaur
ant tenant
recruitment
effort
3. Civic
organization
1. Branding
complete,
Website
design Q4 /
Year 2
2. Underway
(Business
visitations,
broker
1. Implement
targeted
advertising
campaign for
retail recruitment
2. Establish and
implement
annual calendar
for attendance at
summit
4. Plan
marketing
services
outreach,
ICSC)
3. Held
February
2024
4. Developing
marketing
materials for
ICSC that
can be used
in the future
selected industry
events
3. Host industrial
broker
luncheon/site
tour to establish
Pinole as a
viable location for
targeted
office/industrial
tenant types
(continue on
annual basis)
2. Business
Retention/
Expansion/Attraction
1. Define
partner roles
(MOU) for
business
attraction
2. In-house
plan for
existing
business
outreach
1. Underway.
Recommen
d full-time
Economic
Developmen
t staff
person to
serve as
point person
and
implement
Strategy
2. Business
and
shopping
center
owner
outreach is
underway
through
business
visitations,
phone calls,
and e-mail
outreach
1. Conduct needs
assessment of
firms receptive to
business
retention/expansi
on assistance
and develop
customized
responses to
address specific
needs
2. Implement
marketing effort
for identified
business
attraction targets
3. Customize
entrepreneurial
development
resources
to maximize
startup potentials
in targeted
industry clusters
4. Customize
workforce
development
resources to
ensure
competitive
pipeline of
workers to
meeting staffing
needs of targeted
industry clusters
3. Entrepreneurial
Development
1. Inventory
regional/part
ner
programs
and
resources
2. Webpage
(partner
links)
3. Plan
“startup
network”
workshop
(with
partners)
1. Met with
regional
partners
who spoke
at Summit
Meeting
about their
services and
responded
to Pinole’s
“call to
action”
2. ED branding
guidelines
and tagline
is complete.
Website
partner links
in Q4 / Year
2 3. Q4 / Year 2
activity
4. In conjunction
with regional
partners,
organize a local
annual “startup
network”
workshop
featuring
presentations
from partner
organizations
and providing
networking
opportunities for
prospective
startups
4. Business/Develop
ment Friendliness
1. Organize
“Business
Concierge”
and “Quick
Response
Team”
programs
2. Set up
annual
survey of
competing
cities’ fees
1. Cannot
complete
until ED
staff person
is hired (fulltime
recommend
ed); push to
Year 2
activity.
2. City staff
effort
underway
3. Fund and
publicize small
business
financial
assistance
programs (i.e.,
small loans
and/or grants for
specific business
improvement
purposes)
4. Establish and
publicize
branded
program(s) for
streamlined
business
permitting and
development
entitlements
5. Host annual
broker/developer
appreciation
event (include a
“customer
satisfaction
survey” to obtain
ongoing
feedback on
ways City can
improve
business/develop
ment
friendliness)
5. Development
Capacity/
Placemaking
1. Launch
“reposition
retail”
2. Investigate
options/cost
s for EIFD
formation
3. Internal
game plan
(scope, etc.)
for revising
Three
Corridors
Specific
Plan (if
needed)
1. Business
and
shopping
center
owner
outreach
and retail
recruitment
is underway
(ICSC May
2024)
2. EIFD memo
drafted;
RSG
provided
estimated
cost.
Investigated
potential for
ARPA ($0);
reviewing
City budget
to identify
complement
ary activities
3. To occur
after current
zoning/speci
fic plan
amendment
s are
4. Investigate
potential for
establishing one
or more business
improvement
districts (BID’s)
to fund
revitalization and
placemaking
activities within
special focus
areas (e.g.,
Downtown)
5. Prepare
Broadband
Master Plan (this
is already a
funded City
project, separate
from the EDS)
6. Conduct focus
group meeting
with development
community to
identify market
demand
prospects for
various reuse
approaches/conc
epts
7. If initial
investigations
concluded indicate
feasibility of the
EIFD concept,
retain consultant
team to prepare
necessary
studies, etc. to
establish EIFD
6. Workforce
Interface
1. Establish
Pinole
Workforce
Developmen
t
Consortium
(PWDC)
2. Webpage
listing
workforce
developmen
t resources
3. Strategy to
connect
firms with
training
resources
1. Many
regional
partners
attended the
ED Summit
meeting and
responded
to the “call
to action”.
An
Economic
Developmen
t staff
person must
be hired to
lead efforts
to establish
a PWDC
2. Webpage in
Q4 / Year 2
3. Summit
meeting
introduced
stakeholder
s to several
resources;
add to
webpage in
Q4 / Year 2
and connect
firms to
resources
on an
ongoing
basis
4. Conduct survey
of Pinole’s
resident
workforce to
identify
characteristics
(commute
distances,
occupations,
skills, adaptability
to remote work,
etc.) of Pinole
residents who
work in other
communities
5. Based on
workforce
survey, define
strategy for
leveraging workfrom-home
trends as part of
Pinole’s
marketing,
business
attraction and
entrepreneurial
development
strategies
FISCAL IMPACT
There is no fiscal impact to receiving this report. Fiscal impact of an Economic Development Coordinator/Manager will be evaluated in the budgeting process for FY24/25.
ATTACHMENTS
A. Draft Brochure for ICSC
B. EIFD Considerations Memo
C. Exhibit A- CC County EIFD Policy
WHERE Opportunity LIVES
THE PERFECT
RETAIL PLACE
SAN
FRANCISCO
RICHMOND
BERKELEY
HPINOLE
OAKLAND
If you are considering
planting and growing
your business in the
Bay Area, imagine:
• A diverse and vibrant community that
fosters innovation
• A city where families thrive, supported by
a wealth of recreational, educational, and
workforce opportunities
• An ecosystem primed for business success
• Breathtaking rolling hills, captivating
waterfront views, tranquil creeks, and a
charming historic downtown
www.pinole/business.com
Pinole: A thriving Bay
Area oasis, rooted in
community:
• Near San Francisco, Oakland
and Berkeley
• 15,000 daytime population
• Business centered city
• Inviting climate with mild
temperatures
• Supportive city government
COMMUNITY, GROWTH, OPPORTUNITY
Explore opportunities.
Business MINDED:
A flourishing community with strong,
existing retail centers. The nearest
trade area is just a ten-minute
drive with a population of 190,000,
prioritizing the empowerment of
new businesses.
Wellness FOCUSED:
Active, outdoor lifestyles are
embedded into Pinole’s very core,
with accessible amenities tailored
for residents, workers, and visitors
alike, fostering a vibrant community
where well-being thrives.
People CENTERED:
An established city that prioritizes
family, health, and overall quality of
life. Renowned as one of the most
diverse and racially integrated cities
in the Bay Area, Pinole stands as a
beacon of inclusivity and well-being.
Amenity DRIVEN:
Pinole is characterized by top
schools, vibrant neighboring cities,
distinctive shopping centers, and a
robust workforce. Bayfront access
and scenic views are just the
beginning of its offerings.
WHERE Opportunity LIVES
WHERE Opportunity LIVES
THE PERFECT
RETAIL PLACE
SAN
FRANCISCO
RICHMOND
BERKELEY
HPINOLE
OAKLAND
WHERE Opportunity LIVESWHERE Opportunity LIVES
THE PERFECT
RETAIL PLACE
SAN
FRANCISCO
RICHMOND
BERKELEY
HPINOLE
OAKLAND
2131 Pear Street, Pinole, CA 94564
510.724.9837 www.pinole.us.ca
If you are considering
planting and growing
your business in the
Bay Area, imagine:
• A diverse and vibrant community that
fosters innovation
• A city where families thrive, supported by
a wealth of recreational, educational, and
workforce opportunities
• An ecosystem primed for business success
• Breathtaking rolling hills, captivating
waterfront views, tranquil creeks, and a
charming historic downtown
www.pinole/business.com
Pinole: A thriving Bay
Area oasis, rooted in
community:
• Near San Francisco, Oakland
and Berkeley
• 15,000 daytime population
• Business centered city
• Inviting climate with mild
temperatures
• Supportive city government
COMMUNITY, GROWTH, OPPORTUNITY
Explore opportunities.
Business MINDED:
A flourishing community with strong,
existing retail centers. The nearest
trade area is just a ten-minute
drive with a population of 190,000,
prioritizing the empowerment of
new businesses.
Wellness FOCUSED:
Active, outdoor lifestyles are
embedded into Pinole’s very core,
with accessible amenities tailored
for residents, workers, and visitors
alike, fostering a vibrant community
where well-being thrives.
People CENTERED:
An established city that prioritizes
family, health, and overall quality of
life. Renowned as one of the most
diverse and racially integrated cities
in the Bay Area, Pinole stands as a
beacon of inclusivity and well-being.
Amenity DRIVEN:
Pinole is characterized by top
schools, vibrant neighboring cities,
distinctive shopping centers, and a
robust workforce. Bayfront access
and scenic views are just the
beginning of its offerings.
City of Pinole
Community Development Department
M E M O R A N D U M
DATE: APRIL 15, 2024
TO: MAYOR AND COUNCILMEMBERS
FROM: LILLY WHALEN, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: ENHANCED INFRASTRUCTURE FINANCING DISTRICT
CONSIDERATIONS
The information in this Memorandum was prepared by the City’s Economic Development Consultant, RSG, Inc.
BACKGROUND
Enhanced Infrastructure Financing Districts (“EIFD”) are a financing tool to fund infrastructure improvements in targeted areas using tax increment financing. The City of Pinole’s (“City”) 2022 Economic Development Strategy (“Strategy”) set a goal to explore the feasibility of an EIFD in Pinole and understand potential City costs.
This memo presents background information on how EIFDs work and general considerations for the City to inform the process. The largest takeaways are:
• EIFDs are a long-term strategy to finance projects of community-wide significance. They do not generate immediate revenues and cannot be used for operating costs and services.
• With an EIFD, the City would commit a portion of property tax revenues that otherwise go to the General Fund to invest in eligible projects. • EIFDs would enable the City to issue bonds to fund projects that serve the community and that may catalyze new development.
• An EIFD could have more impact if other taxing agencies agree to contribute a share of property tax to fund mutually beneficial projects. For example, the City could contribute a proposal to the County to jointly fund projects that generate jobs or develop affordable housing.
EIFD Background Information
Meeting Date: April 16, 2024 2
REVIEW AND ANALYSIS
What are EIFDs?
EIFDs are special districts that collect a portion of property tax revenues in a defined area to fund public infrastructure, economic development, and affordable housing projects of community-wide significance.
What can an EIFD fund?
EIFDs may fund infrastructure projects that provide a community-wide benefit and have a useful life of at least 15 years. Examples include, but are not limited to:
• Road, highways, streets, parking facilities, and transit facilities • Transit priority facilities
• Sewer, reclamation, and water facilities
• Solid waste facilities
• Public safety facilities
• Flood control levees and dams, retention basins, and drainage facilities • Libraries
• Parks, open space, and recreational facilities
• Childcare facilities
• Improvements related to fighting climate change
• Brownfield restoration and other environmental mitigation • Affordable housing
EIFDs may fund the purchase, expansion, improvement, or rehabilitation of property related to such projects. They may fund planning and design work and ongoing or capitalized maintenance costs directly related to eligible projects. EIFDs may not finance the costs of an ongoing operation or providing services of any kind.
How are EIFDs formed and governed?
An EIFD can be formed by a single entity, like a city, or by multiple taxing agencies like a city, county, and/or special district. Each participating agency commits a share of property tax revenues they receive from the district boundary to fund eligible projects. School districts may not participate.
The founding parties form a Public Financing Authority (“PFA”) that authorizes, develops, and eventually implements an Infrastructure Financing Plan that makes budget projections and creates an investment plan. The PFA oversees EIFD finances and activities.
Contra Costa County has a policy that outlines how cities can request their partnership on an EIFD for specific projects requiring a regional funding approach.
EIFD Background Information
Meeting Date: April 16, 2024 3
Priority policy areas are workforce development/job creation, transportation, homeless prevention, and sustainability. Residential development funded with tax increment must be at least 50% affordable. The County will only commit funding up to 25 years; any longer requires special Board approval. As noted below, EIFDs last 45 years.
How are EIFDs funded?
EIFDs use tax increment financing. When a district is formed, it established a “base year” value for properties within its boundaries. Participating agencies commit a share of property tax revenues generated from growth above the base year value for a 45-year period.
Rather than depositing all property tax revenues from the district into the City’s General Fund, a portion would be diverted to the EIFD to fund eligible projects.
EIFDs can bond against projected revenues to fund projects.
EIFDs do not create a new tax, nor do they result in any additional taxes or fees to the property owners.
What are important considerations when forming an EIFD? • EIFDs are not a new revenue source like a tax or fee. It is a commitment of property tax revenues to fund eligible projects.
• The City must commit a share of property tax revenues to an EIFD that would otherwise go to the General Fund.
• EIFDs are more financially feasible when multiple taxing agencies contribute to fund mutually beneficial projects.
• EIFD boundaries should include areas that are projected to have large growth in property values, such as vacant land with development potential. • An EIFD can invest in projects that generate new economic growth for the district and have a community-wide benefit.
What are the City’s initial next steps to explore an EIFD? An EIFD feasibility study is necessary to:
1. Identify goals and desired projects that are eligible to be funded by an EIFD.
Estimate project costs.
a. Of those projects, identify which ones could interest the County or special districts who receive property tax revenues from Pinole.
EIFD Background Information
Meeting Date: April 16, 2024 4
2. Identify potential district boundaries. Ideally the boundaries will have high potential for new development to generate sufficient tax increment for the district.
3. Create “rough cut” financial projections to estimate how much revenue a district could generate over 45 years. Determine the capacity to issue bonds to fund desired projects. Determine what share of property tax revenues the City would need to commit for financial feasibility.
4. If the rough cut projections show an EIFD feasible, refine boundaries and prepare more detailed financial projections.
5. If desired projects are of regional significance, have discussions with the County and/or special districts about a potential partnership and negotiate their potential property tax share to refine the financial projections.
6. Report results of feasibility study to City Council and potential partners to determine if moving forward with the EIFD formation process, which can take 12-18 months.
EXHIBITS
A- Contra Costa County EIFD Policy
As of September 22, 2021
CONTRA COSTA COUNTY
POLICY ON PARTICIPATION IN
ENHANCED INFRASTRUCTURE FINANCING DISTRICTS
Contra Costa County supports economic development projects benefiting the residents of the County and will review proposals from cities seeking financial partnership with the County through an Enhanced Infrastructure Financing Districts (EIFD), pursuant to this Policy. The County will prioritize Commercial and Industrial development that promotes creation of above minimum wage jobs within the region. In addition, projects that offer private investment to complement investment of public funds will be viewed favorably by the County.
Proposals shall be submitted to the Department of Conservation and Development and include the following components for County review:
1. Contribution of Tax Increment
a. Minimum City Contribution. The City shall contribute at least the same percentage share of tax increment that the County, excluding Affected Taxing Entities as defined by Government Code section 53398.51(a) governed by the County Board of Supervisors. b. Maximum County Contribution. The County will contribute no more than 50% of the County share of future ad valoremproperty tax increment generated in the proposed geographic area of the EIFD, as defined further in Section 1(d) below. c. Correlation of Contributions. In the case that the actual dollar amount share of the percent contributions outlined in Section 1 (a) and (b) above result in the City contributing a lower dollar amount than the County, then the City will increase its dollar amount contribution to be at least equal the County dollar amount contribution. d. Limitations on Tax increment. The County tax increment contribution to the EIFD will only be composed of future ad valoremproperty tax increment growth within the proposed geographic area of the EIFD (the “Future Increment”), excluding the base tax increment of the area (the “Base Increment”). The Base Increment is equal to the ad valoremproperty tax increment of the EIFD area for the fiscal year property tax assessment roll in which the EIFD was created.
2. Term of County Participation in EIFD
a. Maximum term. The County will participate in joint EIFDs for a period not longer than 25 years. This allows consistency with County policy on the issuance of municipal securities for
As of September 22, 2021
a period not longer than 20 years, but also includes an additional five-years for project development and closeout over the life of the EIFD.
b. Procedures for Extension.
i. The County plans to enter into partnerships with cities for specific projects requiring a regional funding approach best suited for an EIFD model with a duration consistent with Section 2(a) above with the assumption that future extensions will be unnecessary.
ii. The County will review scenarios for extending its participation in an existing EIFD, at the discretion of the Board of Supervisors, upon receipt of an updated proposal from a City as outlined in Section 3 below and may decide to extend its participation in the EIFD for a period longer than the term in Section 2(a) on a case-by-case basis. c. Termination Prior to End of Term.
i. Non-Performance. If project construction has not commenced within two-years following creation of a joint EIFD, then the County, City and EIFD Governing Board shall identify whether the project is likely to commence within one-year. If project construction has not commenced within three-years following creation of a joint EIFD, then the County, City and EIFD Governing Board shall immediately begin proceedings to dissolve the EIFD.
ii. Change in Project Feasibility. If following creation of an EIFD and prior to the timeline established in Section 2(c)(i) above the County and the City determine that the project is no longer feasible, then the County, City and EIFD Governing Board shall immediately begin proceedings to dissolve the EIFD. iii. Mandatory Acknowledgement. The City agrees to the terms set forth in Section 2(c)(i-ii) above as a condition of submitting its project proposal to the County for review.
3. RequiredElements for City Proposals
a. Executive Summary. This section should provide an overview of the City’s proposal in a summary form easily understood by members of the public outlining the proposed project, including financial impacts and social benefits to the community, as outlined further below. b. Project Description. This section should provide details related to the proposed project, including atleast the following aspects:
i. Proposed Project Details.
1. Discuss Commercial, Industrial and Residential aspects of the project
As of September 22, 2021
2. Related metrics, including number of permanent jobs above the minimum wage, access points to public transit, number and type of housing units (affordable and marketrate), business park square footage, etc.
3. Stage of current planning efforts (status of approved entitlements or Disposition and Development Agreements (DDAs) with developers, actions taken by the City Council, etc.)
ii. Demonstration of Social Benefits.
1. Qualitative analysis of why a joint EIFD model is the best approach to implement the City’s proposed project within the City limits, such as:
a. Why City and developer finances alone are insufficient to finance the project
b. Why the County is best suited to partner with the City on the proposed project
2. How are the project goals of the City consistentwith the stated goals of the County Board of Supervisors in one or more policy areas, such as:
a. Workforce development/job creation
b. Transportation improvements
c. Homeless Prevention
d. Sustainability
3. To be considered favorably relative to workforce development / job creation benefits, proposed projects should generate new permanent jobs that cover a range of job types and industries, serve the workforce characteristics of County residents (ideally residents local to the immediate sub-region of the project), and require skills and knowledge at a variety of levels. Permanent jobs generated by proposed projects should be careertrack and pay above minimum wage. Furthermore, to be favorably considered in this category, proposed projects should contribute significantly toward addressing the County’s overall jobs-housing balance, which as of 2021 has far more homes than jobs for its residents. Job generation in areas of the County with the fewest employment opportunities for local residents is particularly important.
4. Projects including a Residential development componentshould include an affordable housing commitment of 50%; however, a lower percentage may be considered for units made available to households with an Area Median Income (AMI) of 50% or lower, in which case the commitmentshall be no less than 20%.
c. Financial Analysis. This section should provide a comprehensive analysis of the project economics, including financial impacts to the County and the City over the course of the project life and beyond, including at least the following aspects:
As of September 22, 2021
i. Financial Details Related to Project
1. Summary of assumptions, including backup context for selecting those assumptions
2. Anticipated net growth in ad valoremproperty tax in the EIFD area, both with and without development of the proposed project
3. Proposed tax increment contributions from each jurisdiction (as percentage and dollar amount)
4. Plan of finance for any municipal securities to be used for the project
5. Assessment of other one-time revenue sources being used to finance the project
6. Related Transient Occupancy Tax (TOT), Sales Tax or other revenues to be generated from proposed project
7. Estimated new ongoing expenditures related to the project area forthe provision of municipal services, including a sustainableplan of finance
8. Sensitivity analysis illustrating how market forces may change the above analyses
a. Impacts of cost escalation
b. Impacts of other assumptions of project feasibility that may not materialize over the term of the EIFD project and beyond ii. Ongoing Administrative Responsibilities
1. Proposed budget to staff the EIFD over the life of the District
2. Continuing disclosure responsibilities related to the issuance of municipal securities or other loan instruments
3. Ongoing grant reporting responsibilities
iii. Positive Net Impact to the County. The project proposal must determine that there is a positive net financial impact to County finances.
4. County Analysis of City Proposal. In the course of evaluating the City’s proposal, it may be necessary for the County to hire consultants to assist in the evaluation. The City shall compensate the County for reasonable costs of outside consultants assisting the County with it’s evaluation of the City’s proposal.
5. Miscellaneous Provisions.
a. The County shall not participate in any EIFD that uses eminent domain on inhabited residential properties.
b. For projects with an affordable housing component, the County will be interested to explore crediting some of the new housing toward the County’s Regional Housing Needs Allocation.
CITY COUNCIL
REPORT 9.D.
DATE: APRIL 16, 2024
TO: MAYOR AND COUNCIL MEMBERS
FROM: MARKISHA GUILLORY, FINANCE DIRECTOR
SUBJECT: APPROVAL OF FINANCIAL AND INVESTMENT POLICIES FOR FY 2024/25
RECOMMENDATION
City staff recommends that the City Council adopt a resolution approving the Financial and Investment Policies for Fiscal Year (FY) 2024/25.
BACKGROUND
It is best practice in public finance and the recommendation of the National Advisory Council on State and Local Budgeting (NACSLB) and the Government Finance Officers Association (GFOA) that public agencies regularly review and update their financial policies as appropriate.
Consistent with best practices, the City either reconfirms or updates its financial and investment policies as part of the annual budget process.
The financial policies are intended to set guidelines on how the City will manage its financial resources as well as to provide direction for financial decision-making.
Financial policies are central to a strategic, long-term approach to financial management.
Adopting formal written financial policies includes their ability to help government agencies:
• Institutionalize good financial management policies;
• Clarify strategic intent for financial management;
• Define boundaries;
• Support credit ratings;
• Promote long-term and strategic planning;
• Manage risks to financial condition; and
• Comply with established public management best practices.
City staff presented the proposed Financial and Investment Policies for FY 2024/25 to the Finance Subcommittee at its meeting on March 27, 2024. The proposed Financial and Investment Policies for FY 2024/25 contain only minor updates to the FY 2023/24 policies. The Subcommittee accepted staff’s recommendation to present the proposed policies to the City Council for adoption.
REVIEW AND ANALYSIS
Staff is presenting the proposed Financial and Investment Policies for FY 2024/25 for
City Council consideration and adoption. The policies are consistent with municipal finance best practices and align with standard financial policies recommended by the Government Finance Officers Association (GFOA) and those implemented by other local government agencies. Therefore, staff is not recommending any substantial changes to any of the policies other than minor changes to two of the policies. Clean and redlined copies of the policies have been provided for review (Attachments A and B). The following section provides a summary of each policy.
Structurally Balanced Budget
The City will aspire to create a proposed General Fund operating budget that is structurally balanced whereby current expenditures will be funded by current year revenue. If the proposed operating budget is structurally imbalanced, the City will develop a plan to create a proposed General Fund operating budget for the subsequent fiscal year that is structurally balanced.
Staff recommended change: none.
Reserve Policy
The City will establish and maintain reserves to meet certain anticipated future obligations as well as to ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase.
Staff recommended change: update the fund balance designation of the reserve from “assigned” to “committed.” Per the Governmental Standards Board (GASB) Statement No. 54, committed fund balance includes amounts that can only be used for specific purposes determined by a formal action of the government’s highest level of decisionmaking authority. Staff recommends this change as use of committed fund balance requires City Council approval by resolution.
Revenue Policy – One-Time (Non-Recurring) Resources
The City will strive to maintain a diversified and stable revenue base that is not overly dependent on any individual revenue type, land use, or major taxpayer. One-time resources (also referred to as “non-recurring”) should be used for one-time (nonrecurring) expenditures, including but not limited to establishing and rebuilding reserves, early retirement of debt, capital expenditures, and reducing unfunded pension liabilities (California Employee Retirement System (CalPERS) and Other PostEmployment Benefits (OPEB)).
Staff recommended change: none.
Revenue Policy – User Fees and Charges
The City of Pinole is empowered to recapture, through fees, up to the full cost of providing specific services. Regular and consistent review of all fees is necessary to ensure that the costs associated with delivery of individual services have been appropriately identified, and that the City is fully recovering those costs. It is the City’s policy to set user fees at full cost recovery levels, except where a greater community benefit is demonstrated to the satisfaction of the City Council, or when it is not cost effective to do so. The City will recover costs of new facilities and infrastructure
necessitated through development impact fees consistent with state law.
Staff recommended change: none.
Expenditure and Budget Policy
The City will deliver service in the most efficient and cost-effective manner. This includes utilizing the services of volunteers in areas where operationally and economically viable. The budget will state the objectives of the operating programs, and identify the resources being provided to accomplish the specified objectives.
Staff recommended change: none.
Debt Policy
The City will limit the use of debt so as not to place a burden on the fiscal resources of the City and its taxpayers. Long-term borrowing will be limited to capital improvements or projects that cannot be financed from current revenues. When capital projects are financed, the City will amortize the debt within a period not to exceed the expected useful life of the project. The City will limit the total debt ratio (debt guaranteed by the General Fund) to 10% or as required by bond coverage ratios. The debt ratio is calculated by the relationship between the debt and the General Fund revenue.
Staff recommended change: none.
Receivables Policy
The City will ensure the timely invoicing, monitoring, and collection of outstanding obligations owed to the City.
Staff recommended change: none.
Grants Management Policy and Procedures
City departments actively pursue federal, state and other grant opportunities when deemed appropriate. Grant funding allows the City to leverage local public funds by extending and enhancing the services it offers to the community, and to introduce new initiatives.
Staff recommended change: none.
Capital Assets Policy and Procedures
Purchased and donated assets meeting the City’s capitalization definition and threshold will be classified and recorded in the City’s financial records as capital assets. The value of the asset must meet the City’s capitalization threshold of $5,000 to be recorded as a capital asset.
Staff recommended change: none.
Unclaimed Funds/Outstanding Checks Policy and Procedures The City of Pinole will account for unclaimed funds in a manner which follows Government Code Sections 50050 through 50056. Funds that remain unclaimed for at least three (3) years will become the property of the City of Pinole after the procedures
identified herein have been followed.
Staff recommended change: none.
Investment Policy
The purpose of this Policy is to define the parameters within which funds are to be managed. In methods, procedures, and practices, the policy formalizes the framework for the City of Pinole’s investment activities that must be exercised to ensure effective and judicious fiscal and investment management of the City’s funds.
Staff recommended change: update the policy to change the reporting frequency from quarterly to monthly and incorporate the monthly transactions report. In addition to the reporting requirement set forth by Government Code Section 53646, under Section 53607, the City Treasurer or designee who has been delegated authority to invest or reinvest City funds must submit a monthly report to the City Council accounting for transactions made during the month. For efficiency, the investment report and transactions report will be merged and submitted to the City Council on a monthly basis.
Pension Investment Policy
The City has established the City of Pinole Employee Benefit Pension Plan (the “Plan”), a Section 115 Trust. The goal of the Plan’s investment program is to provide a reasonable level of growth which will result in sufficient assets to offset a portion of the present and future obligations of retirement benefits provided by the California Public Employees Retirement System (“CalPERS”) for those eligible employees who meet the specified age and service requirements.
Staff recommended change: none.
FISCAL IMPACT
There is no fiscal impact.
ATTACHMENTS
A. Proposed Financial and Investment Policies (Clean)
B. Proposed Financial and Investment Policies (Redlined) C. RESO Financial and Investment Policies FY24-25
City of Pinole
Financial and Investment Policies
Updated March 2024
Financial Policies
Structurally Balanced Budget .......................................................................................... 1 Reserve Policy ................................................................................................................ 3 Revenue Policy – One-Time (Non-Recurring) Resources............................................... 4 Revenue Policy – User Fees and Charges ..................................................................... 5 Expenditure and Budget Policy ....................................................................................... 6 Debt Policy ...................................................................................................................... 7 Receivables Policy .......................................................................................................... 8 Grants Management Policy and Procedures................................................................... 9 Capital Assets Policy and Procedures........................................................................... 14 Unclaimed Funds/Outstanding Checks Policy and Procedures .................................... 17 Investment Policies
Investment Policy………………………………………………………………………………20
Pension Investment Policy……………………………………………………………………27
1 Structurally Balanced Budget
Policy
The City will aspire to create a proposed General Fund operating budget that is structurally balanced whereby current expenditures will be funded by current year revenue. If the proposed operating budget is structurally imbalanced, the City will develop a plan to create a proposed General Fund operating budget for the subsequent fiscal year that is structurally balanced.
Purpose
To ensure the sustainability of service and expenditure levels by requiring that ongoing General Fund operating expenditures be funded by ongoing revenues.
Definitions and Details
1. This policy applies to General Fund operating budgets.
2. Structural balance is defined as recurring (ongoing) revenues equaling or exceeding ongoing expenditures.
3. Under this policy, City staff will analyze whether the proposed General Fund operating budget is structurally balanced.
4. If City staff determines that the proposed budget is imbalanced, City staff will develop a plan to create a proposed General Fund operating budget for the following fiscal year that is structurally balanced, including possible revenue enhancements or expenditure decreases.
5. Internal service funds are intended to operate on a break-even basis.
6. To implement this policy, staff will identify General Fund operating revenue that is recurring and non-recurring. Recurring revenues are those that the City can reasonably expect to continue to receive on an annual basis over the next 5 to 10 years. Recurring revenues include, but may not be limited to, property taxes, sales and use taxes, utility user taxes, franchise taxes, business license taxes, transient occupancy taxes, other taxes, fines and forfeitures, interest on investments, use of money and property, motor vehicle in-lieu, city interfund transfers, licenses and permits, resources from other governmental agencies, charges to other City funds, and other reimbursements and charges for services. Non-recurring revenues are monies that the City cannot reasonably expect to continue to receive over the next 10 to 15 years. Non-recurring revenues include, but may not be limited to, fund balance, grant funds, financing proceeds, and sale of property and equipment.
Revenue from recurring sources that is significantly above normal levels will be considered non-recurring revenues.
7. Staff will also identify General Fund operating expenditures that are recurring and non-recurring. A recurring expenditure is an ongoing cost that relates to an ongoing City service or activity. Examples of recurring expenditures are salaries, benefits, utilities, debt service, maintenance, normal capital outlays, and other mandated costs. Non- recurring expenditures are costs that are incurred for one-time activities,
2 or services that are scheduled to "sunset". Typical non-recurring expenditures include those for grant-funded activities, special initiatives, and one-time capital expenditures.
8. A structurally balanced General Fund operating budget is a best practice. It is, however, appropriate and consistent with best practice to adopt a structurally imbalanced budget for a given fiscal year under certain circumstances. For example, it is appropriate and consistent with best practice to use designated reserves as a non-recurring revenue to cover recurring expenditures during times of fiscal duress.
If a budget is proposed with this characteristic, the Structurally Balanced Budget Policy provides appropriate direction, which is that staff should develop a plan to create a structurally balanced budget for the subsequent fiscal year.
3 Reserve Policy
Policy
The City will establish and maintain reserves to meet certain anticipated future obligations as well as to ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase.
Purpose
To ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase.
Definitions and Details
1. The City shall establish a separate account in the financial system to reserve funds intended to ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase. This account and the funds contained therein shall be referred to as the General Reserve. It shall be budgeted to contain an amount equivalent to 50% of the City's annual General Fund ongoing operating expenditures. Resources in the General Reserve account will be considered committed1for the purpose of financial reporting per the standards of Generally Accepted Accounting Principles (GAAP) set forth by the Governmental Accounting Standards Board (GASB) Statement No. 54.
2. The City shall establish other separate accounts in the financial system to reserve funds for other appropriate purposes, such as for replacement of vehicles and major equipment; maintenance and replacement of capital assets; and long-term liabilities.
3. Funds held in the General Reserve can only be appropriated by a majority vote of the Council to address exceptional circumstances specifically related to a significant revenue shortfall, unanticipated expenditure, or other budget stabilization issue.
4. If the General Reserve funds are appropriated and expended, the City Council will endeavor to replenish them to the full amount noted above as part of the adoption of the subsequent budget, if not sooner.
5. This Policy shall be reviewed by the City Council periodically to ensure its consistency with current law and the City's current needs. 1 Per the Governmental Accounting Standards Board (GASB) Statement No. 54, “committed” includes amounts that can be used only for specific purposes determined by a formal action of the government’s highest level of decisionmaking authority. Commitments may be changed or lifted only by the government taking the same formal action that originally imposed the constraint..
4 Revenue Policy – One-Time (Non-Recurring) Resources
Policy
The City will strive to maintain a diversified and stable revenue base that is not overly dependent on any individual revenue type, land use, or major taxpayer. One-time resources (also referred to as “non-recurring”) should be used for one-time (nonrecurring) expenditures, including but not limited to establishing and rebuilding reserves, early retirement of debt, capital expenditures, and reducing unfunded pension liabilities (California Employee Retirement System (CalPERS) and Other Post Employment Benefits (OPEB)).
Purpose
To ensure that the City appropriately uses one-time resources, including not using onetime resources on ongoing expenditures, which can contribute to a structurally imbalanced budget.
Definitions and Details
1. Non-recurring revenues are monies that the City cannot reasonably expect to continue to receive over the next 10 to 15 years. Non-recurring revenues include, but may not be limited to, fund balance, grant funds, financing proceeds, and sale of property and equipment. Revenue from recurring sources that is significantly above normal levels will be considered non-recurring revenues.
5 Revenue Policy – User Fees and Charges
Policy
The City of Pinole is empowered to recapture, through fees, up to the full cost of providing specific services. Regular and consistent review of all fees is necessary to ensure that the costs associated with delivery of individual services have been appropriately identified, and that the City is fully recovering those costs. It is the City’s policy to set user fees at full cost recovery levels, except where a greater community benefit is demonstrated to the satisfaction of the City Council, or when it is not cost effective to do so. The City will recover costs of new facilities and infrastructure necessitated through development impact fees consistent with state law.
Purpose
To determine the full costs of providing specific services so that the City Council can make informed decisions as to the appropriate levels of fees for services that may be imposed to avoid providing unwanted subsidies. The City Council may decide against full cost recovery in cases where greater community benefit is demonstrated.
Definitions and Details
1. Every service supported by user fees or charges will be analyzed bi-annually, or as required by statute or directed by City Council to determine the net cost of providing the service.
2. Net cost will be determined by identifying all revenues generated or attributed to the service and subtracting all cost elements (direct and indirect expenses, capital outlays and other one-time expenses). The resulting figure will be the level of subsidy, which the City Council will use as a basis for determining user fee increases or decreases.
3. If it is determined that there is a net cost to providing the service, the City Council will raise user fees to achieve full cost recovery, unless it is decided that the subsidy should be maintained.
4. Additional information may be necessary to aid in the decision as to whether or not a service should be subsidized (community benefit, cost-effectiveness, etc.)
6 Expenditure and Budget Policy
Policy
The City will deliver service in the most efficient and cost-effective manner. This includes utilizing the services of volunteers in areas where operationally and economically viable.
The budget will state the objectives of the operating programs, and identify the resources being provided to accomplish the specified objectives.
Purpose
To provide guidance to staff in developing spending plans that address the City’s priorities and policy objectives while ensuring benefit to the City.
Definitions and Details
1. Department expenditures are limited to:
a. Budgeted expenditures approved by the City Council as appropriated by major category:
i. Salary and Benefits;
ii. Services and Supplies: Travel and Training, Office Expenses, Repairs and Maintenance, Materials, Professional Services, etc.; and Capital Outlay.
2. The operating budget will be prepared to fund current year expenditures with current year revenue. However, surplus fund balances may be used to increase reserves, fund Capital Improvement Projects, reduce unfunded pension liability (California Employee Retirement System (CalPERS) and Other Post Employment Benefits (OPEB)), or carried forward to fund future years’ operating budgets when necessary to stabilize services and fund capital outlay.
3. Budget transfers require the approval of the City Manager or designee except those affecting personnel and capital projects which must be approved by the City Council.
4. Budget transfers required to hire additional permanent personnel require the City Council’s approval.
5. The City will periodically update replacement and maintenance financing plans, and incorporate them into the Budget.
6. The City will monitor and review methods of operation to ensure that services continue to be delivered in the most cost-effective manner possible. This review process encompasses a wide range of productivity issues, including:
a. Analyzing systems and procedures to ensure efficient delivery of services. b. Evaluating the ability of new technologies and related capital investments to improve productivity.
c. Developing the skills and abilities of all City employees. d. Developing and implementing appropriate methods of recognizing and rewarding exceptional employee performance.
e. Evaluating the ability of the private sector to perform the same level of service at a lower cost.
7 Debt Policy
Policy
The City will limit the use of debt so as not to place a burden on the fiscal resources of the City and its taxpayers. Long-term borrowing will be limited to capital improvements or projects that cannot be financed from current revenues. When capital projects are financed, the City will amortize the debt within a period not to exceed the expected useful life of the project. The City will limit the total debt ratio (debt guaranteed by the General Fund) to 10% or as required by bond coverage ratios. The debt ratio is calculated by the relationship between the debt and the General Fund revenue.
Purpose
To maintain fiscal viability by not encumbering the General Fund with excessive debt payments or using debt to support operating expenses.
Definitions and Details
1. For purposes of computing the percentage of debt payments the proposed budget expenditures will be used.
2. The ratio of debt payments to operating expenditures will be presented in the annual budget.
3. The City will investigate the use of special assessment, revenue or other selfsupporting bonds to limit the General Fund obligation for debt service payments.
4. The City will not use long-term debt for current operations.
5. The City will not use short-term borrowing to support routine operations, provided however, that it may be used to meet temporary cash flow needs.
6. The City will maintain strong communications with bond rating agencies about the City’s financial condition and will follow a policy of full disclosure on financial reports and bond prospectus.
7. The City will strive to maintain or improve the City’s bond rating.
8. The City will utilize inter-fund loans when possible to reduce the cost of financing capital improvements.
9. The City is required to enter into an agreement for inter-fund loans beyond the current fiscal year.
8 Receivables Policy
Policy
The City will ensure the timely invoicing, monitoring, and collection of outstanding obligations owed to the City.
Purpose
To maintain appropriate oversight of all receivables and maintain sound fiscal management and accounting practices related to all receivables.
Definitions and Details
1. For the purpose of this policy, receivables are defined to include outstanding obligations owed to the City for services or goods supplied.
2. All receivables shall be recorded in accordance with Generally Accepted Accounting Principles (GAAP).
3. Accounts receivable will be administered by the Finance Department.
4. Accounts receivable shall be established for services or goods provided in advance of a payment and should include terms for collection. Invoices should be prepared in a timely manner but not less than on a monthly basis. Invoices should include a description of the goods or services provided, payment terms and remittance address.
5. All accounts receivable should be recorded in a manner that allows for aging analysis. Reconciliation of accounts receivable may be performed on a monthly, quarterly or annual basis depending on the type of receivable.
6. Collection options should be evaluated and pursued to maximize collections. The use of collection agencies and programs such as the State Interagency Intercept Collection Program or the County Tax lien process may be used based on the type of receivable.
7. An allowance for doubtful accounts should be recorded after a bad debt expense is estimated. Write-off of bad debt should be performed on an annual basis to ensure that accounts receivable and allowance balances are not overstated.
8. The City will establish written procedures to document the accounts receivable process and bad debt write-off process for adequate internal controls and proper management oversight. These procedures should be reviewed annually as part of the year end audit process.
9 Grants Management Policy and Procedures
Policy
City departments actively pursue federal, state and other grant opportunities when deemed appropriate. Grant funding allows the City to leverage local public funds by extending and enhancing the services it offers to the community, and to introduce new initiatives.
Purpose
The purpose of this policy is to specify circumstances when grant funding is appropriate and to establish a standardized set of procedures for the fiscal administration, management, and monitoring of public and private grants. This policy is intended to ensure compliance with all applicable administrative, financial, reporting, and monitoring requirements established by the funding agency as well as all applicable administrative and fiscal directives and guidelines established by the City of Pinole. The policy and procedures established herein shall apply to all Federal, State, County and private grants administered by the City.
Definitions and Details
1. Staff Responsibilities
a. City Department seeking and managing grant funding is responsible for:
i. Preparation of grant application materials;
ii. Providing sufficient data to allow City Management to evaluate the costs and benefits of the proposed grant;
iii. Obtaining appropriate approvals for submission of grant, if necessary; iv. Obtaining City Council approval for acceptance of grant; v. Understanding the operational and budgetary impact the grant has on the City;
vi. Accumulating the appropriate accounting detail and
supporting documentation;
vii. Preparation of reports required by the grantor;
viii. Providing the Finance Department with the following:
1. Grant Award Letter;
2. Grant Contract;
3. City Council minutes of action or Council Resolution approving the grant;
4. An administrative manual (this includes program guidelines and accounting procedures). This will allow Finance to maintain grant files which are accurate and complete.
10 ix. Providing Finance copies of all grant amendments, program reporting, reimbursement requests and other communications to all agents involved in the grant administration process for review prior to submission.
a. The Finance Department (Finance Director) is responsible for:
i. Reviewing all financial reports to the grantor prior to submission to ensure its accuracy;
ii. Assisting departments with any problems or questions regarding the grant submission process;
iii. Scheduling audit of grant programs when requested by Grantee Agency. City staff will aid in the auditing process providing available source documents as requested by the auditing agency;
iv. Coordinating the accounting for all receipts and disbursements related to the grant. Finance Department will determine setup and maintain the most appropriate method (s) of accounting for the grant in the financial system.
2. Pre-Application
Prior to submitting an application for any grant award, the applicant department shall thoroughly review the grant requirements outlined in the solicitation to ensure that the department is aware of and has the capacity to meet all administrative, fiscal, programmatic, reporting and monitoring requirements.
3. Post-Award
a. Set-Up
All new grants should be reviewed by the Finance Director to ensure that all grant details are accurate and grant budget is established in the financial system in accordance with any special conditions required by the funder. i. Acceptance of all grants must be approved by action of the City Council. Said approval shall include authorization to appropriate funding to revenue and expenditure accounts.
ii. For grants that were not included in the annual adopted budget, the applicant department will submit a request to appropriate revenue and expenditures to the City Council for review and approval. Once the grant budget has been approved by the City Council, department staff should submit a request to the Finance Department to establish the approved budget in the financial system.
iii. The term of grant-funded positions must be clearly identified and disclosed to the City Council prior to approval. If the expiration of a grant requires the application of General Fund revenue for continued funding, this stipulation must also be disclosed.
11 iv. One-time or fluctuating grant sources should not be used for ongoing programs.
v. The awarded department assumes the lead role in grant management in collaboration with the Finance Department.
b. Cash Handling
Grant funds are received from various funding agencies via checks and electronic wire/ACH transfers only and should be sent to the Finance Department. Hard copy checks are deposited weekly and promptly recorded in the City’s financial system.
4. Grant Monitoring and Quarterly Reporting
a. Grant Award Monitoring
Award monitoring shall be the responsibility of the applicant department to ensure that grant funds are expended for eligible activities in accordance with the guidelines established by the funder, including, but not limited to:
The applicant department shall obtain all documentation necessary to fully and accurately support all grant expenditures, including expenditures incurred by sub- recipients. Examples of supporting documentation may include, but not be limited to:
i. Employee timesheets
ii. Personnel Activity Reports
iii. Personnel Action Forms
iv. Payroll reports
v. Invoices and proof of payment
vi. Purchase receipts
vii. Workshop/Training itineraries
viii. Travel documents
b. Quarterly Reporting
Finance Department staff should review grant expenditures and cash position as needed to ensure proper oversight and fiscal administration of the grant.
Claims for reimbursement based grants should be sent to the funder timely to ensure prompt reimbursement. If grant reimbursements are not received within the timeframe prescribed by the funder - generally 60 to 90 days - the appropriate applicant department staff should follow up to check on the status of the reimbursement request.
Grants are required to be reconciled at least quarterly as part of the Finance
12 Department’s grant reconciliation process. Grant reconciliation should include review of all of the following:
i. Grant expenditure to revenue balance
ii. Grant budget to actual balance
iii. Status of reimbursement requests submitted to the funder for purpose of reversing revenue accruals
iv. Grant advances and whether or not funds should be recognized v. Grant end dates, closeouts
vi. Review grant information against the general ledger to ensure accuracy of information listed
5. Record Retention
The City is committed to ensuring that all necessary grant records and documents are adequately retained as required by federal, state, and private funding agencies.
The below Record Retention Schedule is approved as the retention schedule for grant records and documents maintained by the applicant department. The schedule is applicable to all physical and electronic grant records maintained by the department as part of the administration and management of federal, state, and private grant funds.
Record Retention Schedule: Grant Records
Record Type* Retention Period
Original grant proposal
Grant-specific policies and procedures
Grant award letter
Grant agreement and subsequent
modifications, if applicable
Grant budget and subsequent
modifications, if applicable
All pertinent funder correspondence,
including emails, phone log notes, letters,
site visit/monitoring/corrective action/audit
reports, etc…
All pertinent sub-recipient/sub-grantee
correspondence including emails, phone
At least 5 years following official
notification by the awarding agency that
the grant has been fiscally and
programmatically closed OR at least 5
years following the closure of its audit
report covering the entire award period,
whichever is later.
13 log notes, letters, site
visit/monitoring/corrective action/audit
reports, etc…
Fiscal and program/performance reports
submitted to the funder including
explanation of data collection/reporting
methodology, if not evident
Wire transfers and/or copies of
reimbursement checks received
Documentation of required matching
funds
All documentation relating to grantee
compliance with the grant agreement
All evidence of returned grant funds
All supporting documentation necessary
to fully and adequately justify grant
expenditures including timesheets, payroll
reports, Personnel Activity Reports,
receipts, invoices, etc.
Other documents deemed necessary and
important by grant program/fiscal staff
and/or documents required to be
maintained by the funder
* All grant documents and records should be organized and maintained in designated grant files or other systematic organizational structure.
14 Capital Assets Policy and Procedures
Policy
Purchased and donated assets meeting the City’s capitalization definition and threshold will be classified and recorded in the City’s financial records as capital assets. The value of the asset must meet the City’s capitalization threshold of $5,000 to be recorded as a capital asset.
Purpose
To define costs eligible and establish thresholds for capitalization in conformity with Governmental Accounting Standards Board Statement No. 34 Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments and Statement No. 51 Accounting and Financial Reporting for Intangible Capital Assets.
Definitions and Details
1. Definition of a Capital Asset
A capital asset is any tangible or intangible asset purchased for use in the day-to- day operations of the City with a useful life greater than one year and has an acquisition cost of $5,000 or more. Donations with an estimated appraised value of $5,000 or more and have a useful life greater than one year is also considered a capital asset. Capital assets include items such as land, sewer lines, buildings, vehicles, equipment, and furniture.
2. Major Asset Classes
a. (100) Land – includes land under infrastructure and preparation costs. Costs can include acquisition prices and cost of initially preparing land for its intended use (basic site improvements, removal, excavation, relocation, reconstruction). Usually has an indefinite useful life and is not depreciated. b. (200) Improvements other than buildings - permanent improvements (nonmoveable), other than buildings that add value to land, but do not have an indefinite useful life. Examples include fences, retaining walls, parking lots, and landscaping.
c. (300) Buildings - permanent structures. Costs can include purchase of new building or cost of an improvement to an existing building. An entire building can be classified as one asset or be reported as separate capital assets if discrete portions of the building have significantly different useful lives (e.g. roof separate from building).
d. (400) Infrastructure - capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples include roads, bridges, tunnels, drainage
15 systems, water and sewer systems, and lighting systems. e. (600) Furnishings and Equipment - moveable assets that includes all costs to place equipment into service (freight, installation, warranties, and sales tax).
Each piece of equipment must meet the minimum capitalization threshold and is not recorded in bulk. Examples include vehicles, furnishings, machinery, servers, and appliances.
f. (700) Other Capital Assets – capital assets that do not fit into any of the major asset classes. This can include:
i. Intangibles – assets that are not physical in nature. Generally, this includes software and easements (can also include water rights, trademarks).
ii. Easements - intangibles with an indefinite useful life and are not depreciated.
iii. Software - both internally generated and off-the-shelf. g. (900) Construction in Progress - construction projects in progress at the conclusion of the fiscal year. These costs are not depreciable until the project is completed and booked into the correct category of improvements, buildings, or infrastructure.
3. Capital Asset Useful Life
The capital asset useful life is the determining factor for the number of accounting periods over which the asset is to be depreciated. The City can determine the useful life of an asset by using historical information or by seeking guidance from other external resources to determine the proper useful life of the asset. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset as follows:
Class Useful Life
Bridges 75 years
Buildings 50 years
Equipment 5-10 years
Parks 70 years
Street drainage 100 years
Streets and roads 50 years
Vehicles 5-10 years
Wastewater infrastructure 50 years
4. Capital Asset Review
The City relies on a decentralized method to verify the accuracy of capital assets.
Departments are responsible for evaluating the condition and functionality of existing capital assets assigned to their department to determine if the asset is still providing the most appropriate method to deliver services. Capital assets should be assessed on an annual basis.
5. Disposal of Capital Assets/Surplus Property
16 When an asset will no longer be used in operations, voluntarily or involuntarily, the asset shall be removed from the City’s financial records and removed from service.
Disposal of equipment, material, or inventory will be in accordance with the City’s surplus property guidelines.
“Surplus Property” is used generically to describe any City property that is no longer needed or useable by the holding department. The City Council shall declare item(s) surplus prior to disposal.
6. Methods of Disposition
a. The department head or designee in consultation with the Finance Director shall determine or approve one of the following methods of disposition that is most appropriate and in the best interests of the City. b. All surplus property is for sale “as is” and “where is”, with no warranty, guarantee, or representation of any kind, expressed or implied, as to the condition, utility or usability or the property offered for sale. Appropriate methods of sale are as follows:
i. Public Auction - Surplus property may be sold at public auction. City staff may conduct public Auctions, or the City may contract with a professional auctioneer including professional auction services. ii. Bids - Bids may be solicited for the sale of surplus property. Surplus property disposed of in this manner shall be sold to the highest responsible bidder.
iii. Selling for Scrap - Surplus property may be sold as scrap if the department head or designee in consultation with the Finance Director deems that the value of the raw material exceeds the value of the property as a whole.
iv. Negotiated Sale - Surplus property may be sold outright if the department head or designee in consultation with the Finance Director determines that only one known buyer is available or interested in acquiring the property.
v. No Value Item – Where the department head or designee in consultation with the Finance Director determines that specific supplies or equipment are surplus and of minimal value to the City due to spoilage, obsolescence or other cause, or where the Finance Director, serving as the Purchasing Officer, determines that the cost of disposal of such supplies or equipment would exceed the recovery value, the department head or designee in consultation with the Finance Director shall dispose of the same in such a manner as he or she deems appropriate and in the best interest of the City.
c. Surplus property that remains unsold will be donated to a non-profit organization or transferred to an appropriate recycle center. d. Proceeds from the sale or trade-in of surplus property shall be submitted to Finance for returning to the appropriate fund.
17 Unclaimed Funds/Outstanding Checks Policy and Procedures Policy
The City of Pinole will account for unclaimed funds in a manner which follows Government Code Sections 50050 through 50056. Funds that remain unclaimed for at least three (3) years will become the property of the City of Pinole after the procedures identified herein have been followed.
Purpose
The purpose of this policy is to establish guidelines for the proper disposition of unclaimed funds and outstanding checks in accordance with government statutes.
Definitions and Details
1. Definitions
a. Unclaimed Funds - Consists of funds which are not the property of the City but remain in the City Treasury for three (3) or more years without a claim being filed by the legal owner(s). Unclaimed funds do not include individual items of less than $15.00, any amounts in which the depositor’s name is unknown, or restitution to victims.
b. Warrant – Instrument issued to pay for goods and/or services rendered, issue refunds, etc. (i.e. a check).
c. Stale Dated – A check that is older than six (6) months. d. Escheat – refers to state escheat laws that require agencies to transfer unclaimed property or funds to the state after three years and reasonable efforts locate the property owner.
2. Guidelines
The City of Pinole has established the policy to hold unclaimed payroll and accounts payable checks rather than escheating the unclaimed funds to the State of California.
This unclaimed funds policy applies to all outstanding payroll and accounts payable checks abandoned three years after the issue date.
3. Procedures: Items over $15.00
a. Quarterly during the bank reconciliation process, the outstanding warrant register will be reviewed for items six (6) months and older. For the warrants six months and older, a letter and unclaimed property claim form will be mailed to the address on record for the issued warrant. See Exhibit 1 and 2 for examples.
b. Every June 30th and December 31st, (final evaluation dates) all remaining
18 outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days for the warrants 12 months or greater, the warrant will be identified as stale dated. Stale dated warrants shall be cancelled and voided in the system. A journal entry shall be prepared to record the total amount of stale dated checks in a hold account called “Aged Unclaimed Warrants”.
c. A list of stale date warrants containing the warrant number, issue date, amount, and payee shall be maintained by the Finance Department. If a cancelled warrant is presented, or the payee files a claim after cancellation, the warrant shall be reissued by debiting the “Aged Unclaimed Warrants” account, and the original warrant shall be removed from the stale dated list.
d. Also, on June 30th and December 31st, the stale dated list shall be evaluated to determine which warrants are more than 3 years old from the date of issue. Warrants that are more than 3 years old will be handled as follows:
i. A notice must be published once a week for two consecutive weeks in a newspaper of general circulation in the City of Pinole stating the payee, the amount, the fund in which the money is held, and that it is proposed that the money will become the property of the City of Pinole on a specific date (not less than 45 nor more than 60 days after the first publication). See Exhibit 3 for example. ii. Upon or prior to publication, a party of interest may file a claim (Exhibit 2) for the funds with the Finance Director. The claim must contain the claimant’s name, address, amount, tax identification number, and grounds for claim prior to the date the funds become property of the City of Pinole. The Finance Director can require additional information to help substantiate the claim.
iii. On the day identified in the notice, the total dollar amount (on which no claims were filed) becomes the property of the City. A journal entry will be prepared to recognize the revenue. The money will be moved from “Aged Unclaimed Warrants” to the fund the warrant was originally issued from.
4. Procedures: Items under $15.00 or items where the depositor is unknown a. Quarterly during the bank reconciliation process, the outstanding warrant register will be reviewed for items six (6) months and older. For the warrants six months and older, a letter and unclaimed property claim form will be mailed to the address on record for the issued warrant. See Exhibit 1 and 2 for examples.
b. Every June 30th and December 31st, (final evaluation dates) all remaining outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days for the warrants 12 months or greater, it becomes the property of the City of Pinole. Stale dated warrants shall be cancelled and voided in the system. A journal entry will
19 be used to record the total amount of these warrants as revenue. c. Any individual check of less than fifteen ($15) dollars, or any amount if the depositor’s name is unknown, which remain unclaimed for a period of one (1) year may be transferred from the funds which the money was originally drawn from by the City Council to the General Fund without the necessity of publication of notice in a newspaper. (Gov. Code Section 50055)
20 City of Pinole
INVESTMENT POLICY
I. Introduction
The purpose of this Policy is to define the parameters within which funds are to be managed. In methods, procedures, and practices, the policy formalizes the framework for the City of Pinole’s investment activities that must be exercised to ensure effective and judicious fiscal and investment management of the City’s funds.
II. Governing Authority
The investment program of the City of Pinole (“the City”) shall be operated in conformance with federal, state, and other legal requirements. All funds will be invested in accordance with the City’s Investment Policy, and California Government Code Sections 5360l, 5360l.l, 5360l.5, 5360l.6, 53635, 53646, 53635.5, and l648l.2.
III. Scope
It is intended that this policy cover all funds (except retirement funds) and investment activities under the direction of the City. The investment of bond proceeds will be in accordance with the provisions of relevant bond documents.
IV. Objectives
The primary objectives, in priority order, of the investment activities of the City shall be:
1. Safety
Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure preservation of capital in the portfolio.
2. Liquidity
The investment portfolio of the City will remain sufficiently liquid to enable the City to meet its cash flow requirements.
22 3. Return
The investment portfolio of the City shall be designed with the objective of attaining a market rate of return on its investments consistent with the constraints imposed by its safety objective and cash flow considerations.
V. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse development.
The “prudent person” standard states that,
“Investments shall be made with judgment and care under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”
2. Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.
3. Delegation of Authority
The management responsibility for the investment program is hereby delegated to the City Treasurer or designee who shall monitor and review all investments for consistency with this investment policy. No person may engage in an investment transaction except as provided under the limits of this policy. The City Council may delegate its investment decision making and execution authority to an investment advisor. The advisor shall follow the policy and such other written instructions as are provided.
23 VI. Permitted Investment Instruments
1. U.S. Treasury and other government notes, bonds, bills, or obligations that carry the full faith and credit guarantee of the United States for the payment of principal and interest. Maturities shall not exceed five years in length. No more than fifty (50) percent of the City’s investment portfolio may be invested in instruments defined under this section.
2. Federal Agency or U.S. government sponsored enterprises (GSE) bonds and note obligations, participations or other instruments. This includes but is not limited to obligations issued by Banks for Cooperatives, Federal Land Banks, Federal Intermediate Credit Banks, Federal Farm Credit Banks, Federal Home Loan Banks, the Federal Home Loan Bank Board, the Federal Home Loan Mortgage Corporation or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small Business Administration notes. Maturities shall not exceed five years in length, unless the funds to be invested are moneys generated from the proceeds of the sale of real estate assets restricted to a reserve account, and the investment security is “AA” rated by at least two of three nationally recognized rating agencies (Standard & Poor’s, Moody’s or Fitch) in which case maturities shall not exceed ten years in length. No more than 40 (forty) percent of the City’s investment portfolio may be invested in instruments defined under this section.
3. Certificates of Deposit (CDs) which are Federal Deposit Insurance Company (FDIC) insured or fully collateralized time CD’s in financial institutions in California. No more than 10 percent of the City’s portfolio shall be invested in FDIC insured or fully collateralized time certificates of deposit. Maturities shall not exceed five years in length.
4. Negotiable FDIC insured Certificates of Deposit or deposit notes issued by a nationally or state-chartered bank or a state or federal savings and loan association or by a state-licensed branch of a foreign bank. Purchase of negotiable CD’s may not exceed 30 percent of the City’s investment portfolio.
Maturities shall not exceed five years in length, and must have an IDC number greater than 165 (excellent rated).
24 5. Bankers’ Acceptances issued by domestic or foreign banks, which are eligible for purchase by the Federal Reserve System, the short-term paper of which is rated in the highest category by Moody’s Investors Services or by Standard & Poor’s Corporation. Purchases of Bankers’ Acceptances may not exceed 180 days maturity or 40 percent of the City’s investment portfolio. No more than l0 percent of the City’s investment portfolio may be invested in the Banker’s Acceptances of any one commercial bank.
6. Medium-term corporate notes issued by corporations organized and operating within the United States or by depository institutions licensed by the U.S. or any state and operating within the U.S. Medium-term corporate notes shall be rated in a Double-AA rating category “AA” or its equivalent or better by a nationally recognized rating service. Additionally, corporate notes shall be widely diversified across all market sectors. Purchase of medium-term corporate notes may not exceed fifteen (15) percent of the City’s investment portfolio. No more than five (5) percent of the City’s investment portfolio may be invested in a medium-term note of any one corporation. Maturities shall not exceed five years in length.
7. Commercial paper rated in the highest tier of “prime quality” as provided by Moody’s Investors Service, Inc., or Standard & Poor’s Corporation, provided that the issuing corporation is organized and operating within the United States, has total assets in excess of $500 million and has an “A” or higher rating for its long-term debt, if any, as provided by Moody’s or Standard & Poor’s. Purchases of eligible commercial paper may not exceed l80 day’s maturity nor represent more than l0 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed l5 percent of the City’s investment portfolio. An additional l5 percent or a total of 30 percent of the City’s investment portfolio may be invested only if the dollar weighted average of the entire amount does not exceed 3l days.
8. Repurchase Agreements used solely as short-term investments not to exceed 30 days. The following collateral restrictions will be observed: Only U.S. Treasury securities or Federal Agency securities, as described in VI.l and 2, will be acceptable collateral. All securities underlying Repurchase Agreements must be delivered to the City’s custodian bank versus payment or be handled under a tri-party repurchase agreement. The total of all collateral for each Repurchase Agreement must equal or exceed, on the basis of market value plus accrued interest, l03 percent of the total dollar value of the money invested by the City for the term of the investment unless the term of the investment is overnight, in which case the total of all collateral for the Repurchase Agreement must equal or exceed, on the basis of market value plus accrued interest, l00 percent of the total dollar value of the
25 investment. For any Repurchase Agreement with a term of more than one day, the value of the underlying securities must be reviewed on a regular basis. Market value must be calculated each time there is a substitution of collateral. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement.
The City may enter into Repurchase Agreements with (l) primary dealers in U.S. Government securities who are eligible to transact business with, and who report to, the Federal Reserve Bank of New York, and (2) California and non-California banking institutions having assets in excess of $l billion and in the highest short-term rating category as provided by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation. The City will have specific written agreements with each firm with which it enters into Repurchase Agreements. No more than 10 percent of the City’s investment portfolio may be invested in Repurchase Agreements.
9. State of California’s Local Agency Investment Fund (LAIF). Up to l00 percent of the City’s portfolio may be invested in LAIF or up to the maximum permitted by California State Law. The LAIF portfolio should be reviewed periodically.
10.Securities and Exchange Commission (SEC) registered Money Market Mutual Funds as authorized by Government Code Sections 5360l and/or 53635. To be eligible for investment pursuant to this subdivision these companies shall either:
a. Attain the highest ranking letter or numerical rating provided by not less than two of the three largest nationally recognized rating services; b. Have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in securities and obligations authorized by Government Code Section 5360l;
c. Assets under management in excess of $500,000,000;
d. The purchase price of the share of beneficial interest shall not include any commission charged by these companies; and,
e. Purchases shall not exceed l5 percent of the investment portfolio of the City.
Under no circumstances shall any funds of the City be invested in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. Nor
26 shall any of the City’s funds be invested in any security that could result in zero interest accrual if held to maturity.
VII. Reporting Requirements
Quarterly investment reports shall be submitted by the City’s Treasurer or designee to the City Council. The reports shall include, at a minimum, the following information for each individual investment:
• Type investment instrument;
• Institution/Issuer;
• Maturity date;
• Cost of security (par value) and dollar amount in all securities; • Description of the funds and investments;
• Maturity distribution and of the portfolio;
• Current market value of all securities;
• Rate of return for the portfolio;
• A statement of compliance of the portfolio with the City’s Investment Policy, and its ability to meet expenditure requirements for the next six months.
Pursuant to Government Code Section 53646 (e), the Treasurer may supply to the governing body, chief executive office and the external auditor a copy of the most recent statement received by the City on those investments in the State Local Agency Investment Fund in lieu of the above required statement.
In addition to the reporting requirement set forth by Section 53646, under Section 53607, the Treasurer or designee who has been delegated authority to invest or reinvest City funds must submit a monthly report to the City Council accounting for transactions made during the month. For efficiency, the investment report and transactions report will be merged and submitted to the City Council on a monthly basis.
VIII. Safekeeping and Custody
The assets of the City shall be secured through the third-party custody and safekeeping procedures. Bearer instruments shall be held only through third-party institutions. Collateralized securities such as repurchase agreements shall be purchased using the delivery vs. payment (DVP) procedure.
27 I. Introduction
City of Pinole
PENSION INVESTMENT POLICY
The City of Pinole (the “City”) has established the City of Pinole Employee Benefit Pension Plan (the “Plan”), a Section 115 Trust. The goal of the Plan’s investment program is to provide a reasonable level of growth which will result in sufficient assets to offset a portion of the present and future obligations of retirement benefits provided by the California Public Employees Retirement System (“CalPERS”) for those eligible employees who meet the specified age and service requirements.
II. Statement of Purpose
The purpose of this Pension Investment Policy is to establish a comprehensive strategy for assets invested under the Plan, and outline prudent and acceptable parameters in which pension funds are to be managed.
The primary objectives of this policy are to:
• Facilitate the process of ongoing communication between the Plan Sponsor and its plan fiduciaries;
• Confirm the Plan’s investment goals and objectives and management policies applicable to the investment portfolio;
• Provide a framework to construct a well-diversified asset mix that can potentially be expected to meet the account’s short and long-term needs that is consistent with the account’s investment objectives, liquidity considerations and risk tolerance;
• Identify any unique considerations that may restrict or limit the investment discretion of its designated investment managers;
• Help maintain a long-term perspective when market volatility is caused by short-term market movements.
III. Roles and Responsibilities
Governing Authority
The pension investment program of the City of Pinole (“the City”) shall be operated in conformance with federal, state, and other legal requirements. All funds will be invested in accordance with the City’s Pension Investment Policy, and applicable California Government Code Sections.
28 Delegation of Authority
The management responsibility for the pension investment program is hereby delegated to the City Manager and/or Assistant City Manager or designee as Plan Administrator who shall monitor and review all investments for consistency with this investment policy. No person may engage in an investment transaction except as provided under the limits of this policy. The City Council may delegate its investment decision making and execution authority to an investment advisor.
The advisor shall follow the policy and such other written instructions as are provided.
Duties and Responsibilities (Refer to Appendix for who serves in these roles) Plan Administrator
The Plan Administrator for the City of Pinole is responsible for:
▪ Confirming the accuracy of this Investment Guidelines Document, in writing.
▪ Advising Trustee and Investment Manager of any change in the plan/account’s financial situation, funding status, or cash flows, which could possibly necessitate a change to the account’s overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to the overall investment objective and goals for the account. ▪ Monitoring and supervising all service vendors and investment options, including investment managers.
▪ Avoiding prohibited transactions and conflicts of interest.
Trustee
The plan Trustee is responsible for:
▪ Valuing the holdings.
▪ Collecting all income and dividends owed to the Plan. ▪ Settling all transactions (buy-sell orders).
Investment Manager
The Investment Manager is responsible for:
▪ Assisting the Plan Administrator with the development and maintenance of this Investment Policy document.
▪ Meeting with the Plan Administrator to review portfolio structure, holdings, and performance.
▪ Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this Policy. ▪ Researching and monitoring investment advisers and investment vehicles.
29 ▪ Purchasing, selling, and reinvesting in securities held in the account. ▪ Monitoring the performance of all selected assets.
▪ Voting proxies, if applicable.
▪ Recommending changes to any of the above.
▪ Periodically reviewing the suitability of the investments, and being available at such other times within reason at your request. ▪ Preparing and presenting appropriate reports.
▪ Informing the Plan Administrator if changes occur in personnel that are responsible for portfolio management or research.
Standards of Care
Prudence
The standard of prudence to be used by investment officers shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse development.
The “prudent person” standard states that,
“Investments shall be made with judgment and care under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”
Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.
IV. Asset Allocation
The goal of the Plan’s investment program is to provide a reasonable level of growth, which will result in sufficient assets to pay a portion of the present and future obligations of the Plan. The following objectives are intended to assist in
30 achieving this goal:
• The Plan should seek to earn a return in excess of its policy benchmark over the life of the Plan.
• The Plan’s assets will be managed on a total return basis which takes into consideration both investment income and capital appreciation. While the Plan Sponsor recognizes the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. To achieve these objectives, the Plan Sponsor allocates its assets (asset allocation) with a strategic perspective of the capital markets.
Investment Time Horizon: Intermediate-term
Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of future rate increases from CalPERS. Typically,
increases in rates come with a one-year advance
warning; however the Plan Administrator may
request disbursement of assets at any time.
Investment Objective: The primary objective is to generate a reasonable level of growth over time. The assets in this Plan
will eventually be used to fund Pension Plan
obligations for assets managed in the CalPERS
Trust.
Risk Tolerance: Custom – The account’s risk tolerance has been rated moderate, which demonstrates that the
account can accept price fluctuations to pursue
its investment objectives.
Strategic Asset Allocation
As of the date of this Pension Investment Policy adoption, the asset allocation ranges for the City of Pinole Employee Benefit Pension Plan is as follows:
Strategic Asset Allocation Ranges
Cash Fixed Income Equity
0-20% 45%-75% 25%-45%
Policy: 4% Policy: 60% Policy: 36%
31 Market conditions may cause the account’s asset allocation to vary from the stated range from time to time. The Investment Manager will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with the Plan’s objectives.
V. Investment Guidelines
Security Guidelines
Equities
With the exception of limitations and constraints described above, the Investment Manager may allocate assets of the equity portion of the account among various market capitalizations (large, mid, small) and investment styles (value, growth).
Further, the Investment Manager may allocate assets among domestic, international developed and emerging market equity securities.
Total Equities 25%-45%
Equity Style Range
Domestic Large Cap Equity 12%-35%
Domestic Mid Cap Equity 0%-10%
Domestic Small Cap Equity 0%-15%
International Equity (incl. Emerging Markets) 0%-15%
Real Estate Investment Trust (REIT) 0%-8%
Fixed Income
In the fixed income portion of the account, the Investment Manager may allocate assets among various sectors and industries, as well as varying maturities and credit quality that are consistent with the overall goals and objectives of the portfolio.
*High Yield securities may be purchased, but they will be held using a diversified exchange traded fund, or mutual fund vehicle.
If individual fixed income securities are purchased for the Plan, the following guidelines will be adhered to in the management of the fixed income segment:
Total Fixed Income 45%-75%
32 Eligible Investments
• Debt obligations of the U.S. Government, its agencies, and Government Sponsored Enterprises
• Mortgage-Backed Securities (MBS)
• Asset Backed Securities (ABS)
• Collateralized Mortgage Obligations (CMO)
• Commercial Mortgage-Backed Securities (CMBS)
• Corporate debt securities issued by U.S. or foreign entities including, but not limited to, limited partnerships, equipment trust certificates and enhanced equipment trust certificates
• Eligible instruments issued pursuant to SEC Rule 144(a) • Municipal Bonds
With the exception of Debt obligations of the U.S. Government, its agencies, Government Sponsored Enterprises and US TIPS, the total investment in any fixed income security issuer shall not exceed 3% of total plan assets. These restrictions do not apply to fixed income funds or exchange-traded funds (ETFs).
Quality
The portfolio will maintain a minimum weighted average quality of A- at all times.
Individual securities shall have a minimum quality rating of Baa3 by Moody’s or BBB- by Standard & Poor’s (S&P).
Duration
The Investment Manager will maintain the portfolio duration within +/- 25% of the benchmark duration at all times.
Diversification
• No more than 5% of the portfolio assets may be invested in any individual issuer, with the exception of securities issued or guaranteed by the U.S.
Government, its agencies, and Government Sponsored Enterprises. • No more than 10% of the portfolio may be invested in securities issued under Rule 144A.
33 Performance Benchmarks
The performance of the total Plan shall be measured over a three and five-year periods. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance shall be compared to the return of the total portfolio blended benchmark shown below.
Total Portfolio Blended Benchmark
19.00% S&P 500 Index
3.50% Russell Mid Cap Index
5.50% Russell 2000 Index
2.50% MSCI Emerging Market Index
4.50% MSCI EAFE Index
1.00% Wilshire REIT Index
45.50% Bloomberg Barclays Capital Aggregate Bond Index
13.00% ML 1-3 Year US Corp/Gov’t Index
1.50% US High Yield Master II
4.00% Citi 1Mth T-Bill
Asset Class/Style Benchmarks
Over a market cycle, the long-term objective for each investment strategy is to add value to a market benchmark. The following are the benchmarks used to monitor each investment strategy:
Large Cap Equity S&P 500 Index
Growth S&P 500 Growth Index
Value S&P 500 Value Index
Mid Cap Equity Russell Mid Cap Index
Growth Russell Mid Cap Growth Index
Value Russell Mid Cap Value Index
Small Cap Equity Russell 2000 Index
Growth Russell 2000 Growth Index
Value Russell 2000 Value Index
REITs Wilshire REIT Index
International Equity MSCI EAFE Index
Investment Grade Bonds Bloomberg Barclays Capital Aggregate Bond Index High Yield US High Yield Master II
34 Security Selection
The Investment Manager may utilize a full range of investment vehicles when constructing the investment portfolio, including but not limited to individual securities, mutual funds, and exchange-traded funds. In addition, to the extent permissible, the Investment Manager is authorized to invest in shares of mutual funds in which the Investment Manager serves as advisor or sub-adviser.
Investment Limitations
The following investment transactions are prohibited:
• Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
• Venture Capital
• Short sales*
• Purchases of Letter Stock, Private Placements, or direct payments • Leveraged Transactions*
• Commodities Transactions Puts, calls, straddles, or other option strategies* • Purchases of real estate, with the exception of REITs • Derivatives, with exception of ETFs*
*Permissible in diversified mutual funds and exchange-traded funds VI. Reporting Requirements
Quarterly reports shall be submitted by the Investment Manager to the Plan Administrator of the City of Pinole. These reports will be submitted by the City’s Treasurer or designee to the City Council.
35 APPENDIX
Plan Sponsor Account Information as of the date this pension investment policy is adopted:
Plan Sponsor: City of Pinole
Plan Administrator: City Manager and/or Assistant City Manager or designee
Governance: Pinole City Council
Plan Name (“Plan”) City of Pinole Employee Benefits Pension Plan Trustee: US Bank
Type of Account Pension Plan
ERISA Status: Not subject to ERISA
Investment Manager: US Bank, as discretionary trustee, has delegated investment management
responsibilities to HighMark Capital
Management, Inc. (“Investment Manager”), an
SEC-registered investment adviser
Investment Authority: Except as otherwise noted, the Trustee, US Bank, has delegated investment authority to
HighMark Capital Management, an SECregistered investment adviser. Investment Manager has full investment discretion over the
managed assets in the account. Investment
Manager is authorized to purchase, sell,
exchange, invest, reinvest and manage the
designated assets held in the account, all in
accordance with account’s investment
objectives, without prior approval or
subsequent approval of any other party(ies).
City of Pinole
Financial and Investment Policies
Updated March 2024
Financial Policies
Structurally Balanced Budget .......................................................................................... 1 Reserve Policy ................................................................................................................ 3 Revenue Policy – One-Time (Non-Recurring) Resources............................................... 4 Revenue Policy – User Fees and Charges ..................................................................... 5 Expenditure and Budget Policy ....................................................................................... 6 Debt Policy ...................................................................................................................... 7 Receivables Policy .......................................................................................................... 8 Grants Management Policy and Procedures................................................................... 9 Capital Assets Policy and Procedures........................................................................... 14 Unclaimed Funds/Outstanding Checks Policy and Procedures .................................... 17 Investment Policies
Investment Policy………………………………………………………………………………20
Pension Investment Policy…………………………………………………………………… 27
1 Structurally Balanced Budget
Policy
The City will aspire to create a proposed General Fund operating budget that is structurally balanced whereby current expenditures will be funded by current year revenue. If the proposed operating budget is structurally imbalanced, the City will develop a plan to create a proposed General Fund operating budget for the subsequent fiscal year that is structurally balanced.
Purpose
To ensure the sustainability of service and expenditure levels by requiring that ongoing General Fund operating expenditures be funded by ongoing revenues.
Definitions and Details
1. This policy applies to General Fund operating budgets.
2. Structural balance is defined as recurring (ongoing) revenues equaling or exceeding ongoing expenditures.
3. Under this policy, City staff will analyze whether the proposed General Fund operating budget is structurally balanced.
4. If City staff determines that the proposed budget is imbalanced, City staff will develop a plan to create a proposed General Fund operating budget for the following fiscal year that is structurally balanced, including possible revenue enhancements or expenditure decreases.
5. Internal service funds are intended to operate on a break-even basis.
6. To implement this policy, staff will identify General Fund operating revenue that is recurring and non-recurring. Recurring revenues are those that the City can reasonably expect to continue to receive on an annual basis over the next 5 to 10 years. Recurring revenues include, but may not be limited to, property taxes, sales and use taxes, utility user taxes, franchise taxes, business license taxes, transient occupancy taxes, other taxes, fines and forfeitures, interest on investments, use of money and property, motor vehicle in-lieu, city interfund transfers, licenses and permits, resources from other governmental agencies, charges to other City funds, and other reimbursements and charges for services. Non-recurring revenues are monies that the City cannot reasonably expect to continue to receive over the next 10 to 15 years. Non-recurring revenues include, but may not be limited to, fund balance, grant funds, financing proceeds, and sale of property and equipment.
Revenue from recurring sources that is significantly above normal levels will be considered non-recurring revenues.
7. Staff will also identify General Fund operating expenditures that are recurring and non-recurring. A recurring expenditure is an ongoing cost that relates to an ongoing City service or activity. Examples of recurring expenditures are salaries, benefits, utilities, debt service, maintenance, normal capital outlays, and other mandated costs. Non- recurring expenditures are costs that are incurred for one-time activities,
2 or services that are scheduled to "sunset". Typical non-recurring expenditures include those for grant-funded activities, special initiatives, and one-time capital expenditures.
8. A structurally balanced General Fund operating budget is a best practice. It is, however, appropriate and consistent with best practice to adopt a structurally imbalanced budget for a given fiscal year under certain circumstances. For example, it is appropriate and consistent with best practice to use designated reserves as a non-recurring revenue to cover recurring expenditures during times of fiscal duress.
If a budget is proposed with this characteristic, the Structurally Balanced Budget Policy provides appropriate direction, which is that staff should develop a plan to create a structurally balanced budget for the subsequent fiscal year.
3 Reserve Policy
Policy
The City will establish and maintain reserves to meet certain anticipated future obligations as well as to ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase.
Purpose
To ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase.
Definitions and Details
1. The City shall establish a separate account in the financial system to reserve funds intended to ensure that the City maintains adequate financial resources to continue to provide basic municipal services in the event of a significant unanticipated revenue decrease or expenditure increase. This account and the funds contained therein shall be referred to as the General Reserve. It shall be budgeted to contain an amount equivalent to 50% of the City's annual General Fund ongoing operating expenditures. Resources in the General Reserve account will be considered committed1for the purpose of financial reporting per the standards of Generally Accepted Accounting Principles (GAAP) set forth by the Governmental Accounting Standards Board (GASB) Statement No. 54.
2. The City shall establish other separate accounts in the financial system to reserve funds for other appropriate purposes, such as for replacement of vehicles and major equipment; maintenance and replacement of capital assets; and long-term liabilities.
3. Funds held in the General Reserve can only be appropriated by a majority vote of the Council to address exceptional circumstances specifically related to a significant revenue shortfall, unanticipated expenditure, or other budget stabilization issue.
4. If the General Reserve funds are appropriated and expended, the City Council will endeavor to replenish them to the full amount noted above as part of the adoption of the subsequent budget, if not sooner.
5. This Policy shall be reviewed by the City Council periodically to ensure its consistency with current law and the City's current needs. 1 Per the Governmental Accounting Standards Board (GASB) Statement No. 54, “committed” includes amounts that can be used only for specific purposes determined by a formal action of the government’s highest level of decisionmaking authority. Commitments may be changed or lifted only by the government taking the same formal action that originally imposed the constraint..
Deleted: assigned
Deleted: assigned
Deleted: fund balance is comprised of amounts that are
constrained by the government’s intent to be used for
specific purposes but are neither restricted nor committed
4 Revenue Policy – One-Time (Non-Recurring) Resources
Policy
The City will strive to maintain a diversified and stable revenue base that is not overly dependent on any individual revenue type, land use, or major taxpayer. One-time resources (also referred to as “non-recurring”) should be used for one-time (nonrecurring) expenditures, including but not limited to establishing and rebuilding reserves, early retirement of debt, capital expenditures, and reducing unfunded pension liabilities (California Employee Retirement System (CalPERS) and Other Post Employment Benefits (OPEB)).
Purpose
To ensure that the City appropriately uses one-time resources, including not using onetime resources on ongoing expenditures, which can contribute to a structurally imbalanced budget.
Definitions and Details
1. Non-recurring revenues are monies that the City cannot reasonably expect to continue to receive over the next 10 to 15 years. Non-recurring revenues include, but may not be limited to, fund balance, grant funds, financing proceeds, and sale of property and equipment. Revenue from recurring sources that is significantly above normal levels will be considered non-recurring revenues.
5 Revenue Policy – User Fees and Charges
Policy
The City of Pinole is empowered to recapture, through fees, up to the full cost of providing specific services. Regular and consistent review of all fees is necessary to ensure that the costs associated with delivery of individual services have been appropriately identified, and that the City is fully recovering those costs. It is the City’s policy to set user fees at full cost recovery levels, except where a greater community benefit is demonstrated to the satisfaction of the City Council, or when it is not cost effective to do so. The City will recover costs of new facilities and infrastructure necessitated through development impact fees consistent with state law.
Purpose
To determine the full costs of providing specific services so that the City Council can make informed decisions as to the appropriate levels of fees for services that may be imposed to avoid providing unwanted subsidies. The City Council may decide against full cost recovery in cases where greater community benefit is demonstrated.
Definitions and Details
1. Every service supported by user fees or charges will be analyzed bi-annually, or as required by statute or directed by City Council to determine the net cost of providing the service.
2. Net cost will be determined by identifying all revenues generated or attributed to the service and subtracting all cost elements (direct and indirect expenses, capital outlays and other one-time expenses). The resulting figure will be the level of subsidy, which the City Council will use as a basis for determining user fee increases or decreases.
3. If it is determined that there is a net cost to providing the service, the City Council will raise user fees to achieve full cost recovery, unless it is decided that the subsidy should be maintained.
4. Additional information may be necessary to aid in the decision as to whether or not a service should be subsidized (community benefit, cost-effectiveness, etc.)
6 Expenditure and Budget Policy
Policy
The City will deliver service in the most efficient and cost-effective manner. This includes utilizing the services of volunteers in areas where operationally and economically viable.
The budget will state the objectives of the operating programs, and identify the resources being provided to accomplish the specified objectives.
Purpose
To provide guidance to staff in developing spending plans that address the City’s priorities and policy objectives while ensuring benefit to the City.
Definitions and Details
1. Department expenditures are limited to:
a. Budgeted expenditures approved by the City Council as appropriated by major category:
i. Salary and Benefits;
ii. Services and Supplies: Travel and Training, Office Expenses, Repairs and Maintenance, Materials, Professional Services, etc.; and Capital Outlay.
2. The operating budget will be prepared to fund current year expenditures with current year revenue. However, surplus fund balances may be used to increase reserves, fund Capital Improvement Projects, reduce unfunded pension liability (California Employee Retirement System (CalPERS) and Other Post Employment Benefits (OPEB)), or carried forward to fund future years’ operating budgets when necessary to stabilize services and fund capital outlay.
3. Budget transfers require the approval of the City Manager or designee except those affecting personnel and capital projects which must be approved by the City Council.
4. Budget transfers required to hire additional permanent personnel require the City Council’s approval.
5. The City will periodically update replacement and maintenance financing plans, and incorporate them into the Budget.
6. The City will monitor and review methods of operation to ensure that services continue to be delivered in the most cost-effective manner possible. This review process encompasses a wide range of productivity issues, including:
a. Analyzing systems and procedures to ensure efficient delivery of services. b. Evaluating the ability of new technologies and related capital investments to improve productivity.
c. Developing the skills and abilities of all City employees. d. Developing and implementing appropriate methods of recognizing and rewarding exceptional employee performance.
e. Evaluating the ability of the private sector to perform the same level of service at a lower cost.
7 Debt Policy
Policy
The City will limit the use of debt so as not to place a burden on the fiscal resources of the City and its taxpayers. Long-term borrowing will be limited to capital improvements or projects that cannot be financed from current revenues. When capital projects are financed, the City will amortize the debt within a period not to exceed the expected useful life of the project. The City will limit the total debt ratio (debt guaranteed by the General Fund) to 10% or as required by bond coverage ratios. The debt ratio is calculated by the relationship between the debt and the General Fund revenue.
Purpose
To maintain fiscal viability by not encumbering the General Fund with excessive debt payments or using debt to support operating expenses.
Definitions and Details
1. For purposes of computing the percentage of debt payments the proposed budget expenditures will be used.
2. The ratio of debt payments to operating expenditures will be presented in the annual budget.
3. The City will investigate the use of special assessment, revenue or other selfsupporting bonds to limit the General Fund obligation for debt service payments.
4. The City will not use long-term debt for current operations.
5. The City will not use short-term borrowing to support routine operations, provided however, that it may be used to meet temporary cash flow needs.
6. The City will maintain strong communications with bond rating agencies about the City’s financial condition and will follow a policy of full disclosure on financial reports and bond prospectus.
7. The City will strive to maintain or improve the City’s bond rating.
8. The City will utilize inter-fund loans when possible to reduce the cost of financing capital improvements.
9. The City is required to enter into an agreement for inter-fund loans beyond the current fiscal year.
8 Receivables Policy
Policy
The City will ensure the timely invoicing, monitoring, and collection of outstanding obligations owed to the City.
Purpose
To maintain appropriate oversight of all receivables and maintain sound fiscal management and accounting practices related to all receivables.
Definitions and Details
1. For the purpose of this policy, receivables are defined to include outstanding obligations owed to the City for services or goods supplied.
2. All receivables shall be recorded in accordance with Generally Accepted Accounting Principles (GAAP).
3. Accounts receivable will be administered by the Finance Department.
4. Accounts receivable shall be established for services or goods provided in advance of a payment and should include terms for collection. Invoices should be prepared in a timely manner but not less than on a monthly basis. Invoices should include a description of the goods or services provided, payment terms and remittance address.
5. All accounts receivable should be recorded in a manner that allows for aging analysis. Reconciliation of accounts receivable may be performed on a monthly, quarterly or annual basis depending on the type of receivable.
6. Collection options should be evaluated and pursued to maximize collections. The use of collection agencies and programs such as the State Interagency Intercept Collection Program or the County Tax lien process may be used based on the type of receivable.
7. An allowance for doubtful accounts should be recorded after a bad debt expense is estimated. Write-off of bad debt should be performed on an annual basis to ensure that accounts receivable and allowance balances are not overstated.
8. The City will establish written procedures to document the accounts receivable process and bad debt write-off process for adequate internal controls and proper management oversight. These procedures should be reviewed annually as part of the year end audit process.
9 Grants Management Policy and Procedures
Policy
City departments actively pursue federal, state and other grant opportunities when deemed appropriate. Grant funding allows the City to leverage local public funds by extending and enhancing the services it offers to the community, and to introduce new initiatives.
Purpose
The purpose of this policy is to specify circumstances when grant funding is appropriate and to establish a standardized set of procedures for the fiscal administration, management, and monitoring of public and private grants. This policy is intended to ensure compliance with all applicable administrative, financial, reporting, and monitoring requirements established by the funding agency as well as all applicable administrative and fiscal directives and guidelines established by the City of Pinole. The policy and procedures established herein shall apply to all Federal, State, County and private grants administered by the City.
Definitions and Details
1. Staff Responsibilities
a. City Department seeking and managing grant funding is responsible for:
i. Preparation of grant application materials;
ii. Providing sufficient data to allow City Management to evaluate the costs and benefits of the proposed grant;
iii. Obtaining appropriate approvals for submission of grant, if necessary; iv. Obtaining City Council approval for acceptance of grant; v. Understanding the operational and budgetary impact the grant has on the City;
vi. Accumulating the appropriate accounting detail and
supporting documentation;
vii. Preparation of reports required by the grantor;
viii. Providing the Finance Department with the following:
1. Grant Award Letter;
2. Grant Contract;
3. City Council minutes of action or Council Resolution approving the grant;
4. An administrative manual (this includes program guidelines and accounting procedures). This will allow Finance to maintain grant files which are accurate and complete.
10 ix. Providing Finance copies of all grant amendments, program reporting, reimbursement requests and other communications to all agents involved in the grant administration process for review prior to submission.
a. The Finance Department (Finance Director) is responsible for:
i. Reviewing all financial reports to the grantor prior to submission to ensure its accuracy;
ii. Assisting departments with any problems or questions regarding the grant submission process;
iii. Scheduling audit of grant programs when requested by Grantee Agency. City staff will aid in the auditing process providing available source documents as requested by the auditing agency;
iv. Coordinating the accounting for all receipts and disbursements related to the grant. Finance Department will determine setup and maintain the most appropriate method (s) of accounting for the grant in the financial system.
2. Pre-Application
Prior to submitting an application for any grant award, the applicant department shall thoroughly review the grant requirements outlined in the solicitation to ensure that the department is aware of and has the capacity to meet all administrative, fiscal, programmatic, reporting and monitoring requirements.
3. Post-Award
a. Set-Up
All new grants should be reviewed by the Finance Director to ensure that all grant details are accurate and grant budget is established in the financial system in accordance with any special conditions required by the funder. i. Acceptance of all grants must be approved by action of the City Council. Said approval shall include authorization to appropriate funding to revenue and expenditure accounts.
ii. For grants that were not included in the annual adopted budget, the applicant department will submit a request to appropriate revenue and expenditures to the City Council for review and approval. Once the grant budget has been approved by the City Council, department staff should submit a request to the Finance Department to establish the approved budget in the financial system.
iii. The term of grant-funded positions must be clearly identified and disclosed to the City Council prior to approval. If the expiration of a grant requires the application of General Fund revenue for continued funding, this stipulation must also be disclosed.
11 iv. One-time or fluctuating grant sources should not be used for ongoing programs.
v. The awarded department assumes the lead role in grant management in collaboration with the Finance Department.
b. Cash Handling
Grant funds are received from various funding agencies via checks and electronic wire/ACH transfers only and should be sent to the Finance Department. Hard copy checks are deposited weekly and promptly recorded in the City’s financial system.
4. Grant Monitoring and Quarterly Reporting
a. Grant Award Monitoring
Award monitoring shall be the responsibility of the applicant department to ensure that grant funds are expended for eligible activities in accordance with the guidelines established by the funder, including, but not limited to:
The applicant department shall obtain all documentation necessary to fully and accurately support all grant expenditures, including expenditures incurred by sub- recipients. Examples of supporting documentation may include, but not be limited to:
i. Employee timesheets
ii. Personnel Activity Reports
iii. Personnel Action Forms
iv. Payroll reports
v. Invoices and proof of payment
vi. Purchase receipts
vii. Workshop/Training itineraries
viii. Travel documents
b. Quarterly Reporting
Finance Department staff should review grant expenditures and cash position as needed to ensure proper oversight and fiscal administration of the grant.
Claims for reimbursement based grants should be sent to the funder timely to ensure prompt reimbursement. If grant reimbursements are not received within the timeframe prescribed by the funder - generally 60 to 90 days - the appropriate applicant department staff should follow up to check on the status of the reimbursement request.
Grants are required to be reconciled at least quarterly as part of the Finance
12 Department’s grant reconciliation process. Grant reconciliation should include review of all of the following:
i. Grant expenditure to revenue balance
ii. Grant budget to actual balance
iii. Status of reimbursement requests submitted to the funder for purpose of reversing revenue accruals
iv. Grant advances and whether or not funds should be recognized v. Grant end dates, closeouts
vi. Review grant information against the general ledger to ensure accuracy of information listed
5. Record Retention
The City is committed to ensuring that all necessary grant records and documents are adequately retained as required by federal, state, and private funding agencies.
The below Record Retention Schedule is approved as the retention schedule for grant records and documents maintained by the applicant department. The schedule is applicable to all physical and electronic grant records maintained by the department as part of the administration and management of federal, state, and private grant funds.
Record Retention Schedule: Grant Records
Record Type* Retention Period
Original grant proposal
Grant-specific policies and procedures
Grant award letter
Grant agreement and subsequent
modifications, if applicable
Grant budget and subsequent
modifications, if applicable
All pertinent funder correspondence,
including emails, phone log notes, letters,
site visit/monitoring/corrective action/audit
reports, etc…
All pertinent sub-recipient/sub-grantee
correspondence including emails, phone
At least 5 years following official
notification by the awarding agency that
the grant has been fiscally and
programmatically closed OR at least 5
years following the closure of its audit
report covering the entire award period,
whichever is later.
13 log notes, letters, site
visit/monitoring/corrective action/audit
reports, etc…
Fiscal and program/performance reports
submitted to the funder including
explanation of data collection/reporting
methodology, if not evident
Wire transfers and/or copies of
reimbursement checks received
Documentation of required matching
funds
All documentation relating to grantee
compliance with the grant agreement
All evidence of returned grant funds
All supporting documentation necessary
to fully and adequately justify grant
expenditures including timesheets, payroll
reports, Personnel Activity Reports,
receipts, invoices, etc.
Other documents deemed necessary and
important by grant program/fiscal staff
and/or documents required to be
maintained by the funder
* All grant documents and records should be organized and maintained in designated grant files or other systematic organizational structure.
14 Capital Assets Policy and Procedures
Policy
Purchased and donated assets meeting the City’s capitalization definition and threshold will be classified and recorded in the City’s financial records as capital assets. The value of the asset must meet the City’s capitalization threshold of $5,000 to be recorded as a capital asset.
Purpose
To define costs eligible and establish thresholds for capitalization in conformity with Governmental Accounting Standards Board Statement No. 34 Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments and Statement No. 51 Accounting and Financial Reporting for Intangible Capital Assets.
Definitions and Details
1. Definition of a Capital Asset
A capital asset is any tangible or intangible asset purchased for use in the day-to- day operations of the City with a useful life greater than one year and has an acquisition cost of $5,000 or more. Donations with an estimated appraised value of $5,000 or more and have a useful life greater than one year is also considered a capital asset. Capital assets include items such as land, sewer lines, buildings, vehicles, equipment, and furniture.
2. Major Asset Classes
a. (100) Land – includes land under infrastructure and preparation costs. Costs can include acquisition prices and cost of initially preparing land for its intended use (basic site improvements, removal, excavation, relocation, reconstruction). Usually has an indefinite useful life and is not depreciated. b. (200) Improvements other than buildings - permanent improvements (nonmoveable), other than buildings that add value to land, but do not have an indefinite useful life. Examples include fences, retaining walls, parking lots, and landscaping.
c. (300) Buildings - permanent structures. Costs can include purchase of new building or cost of an improvement to an existing building. An entire building can be classified as one asset or be reported as separate capital assets if discrete portions of the building have significantly different useful lives (e.g. roof separate from building).
d. (400) Infrastructure - capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples include roads, bridges, tunnels, drainage
15 systems, water and sewer systems, and lighting systems. e. (600) Furnishings and Equipment - moveable assets that includes all costs to place equipment into service (freight, installation, warranties, and sales tax).
Each piece of equipment must meet the minimum capitalization threshold and is not recorded in bulk. Examples include vehicles, furnishings, machinery, servers, and appliances.
f. (700) Other Capital Assets – capital assets that do not fit into any of the major asset classes. This can include:
i. Intangibles – assets that are not physical in nature. Generally, this includes software and easements (can also include water rights, trademarks).
ii. Easements - intangibles with an indefinite useful life and are not depreciated.
iii. Software - both internally generated and off-the-shelf. g. (900) Construction in Progress - construction projects in progress at the conclusion of the fiscal year. These costs are not depreciable until the project is completed and booked into the correct category of improvements, buildings, or infrastructure.
3. Capital Asset Useful Life
The capital asset useful life is the determining factor for the number of accounting periods over which the asset is to be depreciated. The City can determine the useful life of an asset by using historical information or by seeking guidance from other external resources to determine the proper useful life of the asset. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset as follows:
Class Useful Life
Bridges 75 years
Buildings 50 years
Equipment 5-10 years
Parks 70 years
Street drainage 100 years
Streets and roads 50 years
Vehicles 5-10 years
Wastewater infrastructure 50 years
4. Capital Asset Review
The City relies on a decentralized method to verify the accuracy of capital assets.
Departments are responsible for evaluating the condition and functionality of existing capital assets assigned to their department to determine if the asset is still providing the most appropriate method to deliver services. Capital assets should be assessed on an annual basis.
5. Disposal of Capital Assets/Surplus Property
16 When an asset will no longer be used in operations, voluntarily or involuntarily, the asset shall be removed from the City’s financial records and removed from service.
Disposal of equipment, material, or inventory will be in accordance with the City’s surplus property guidelines.
“Surplus Property” is used generically to describe any City property that is no longer needed or useable by the holding department. The City Council shall declare item(s) surplus prior to disposal.
6. Methods of Disposition
a. The department head or designee in consultation with the Finance Director shall determine or approve one of the following methods of disposition that is most appropriate and in the best interests of the City. b. All surplus property is for sale “as is” and “where is”, with no warranty, guarantee, or representation of any kind, expressed or implied, as to the condition, utility or usability or the property offered for sale. Appropriate methods of sale are as follows:
i. Public Auction - Surplus property may be sold at public auction. City staff may conduct public Auctions, or the City may contract with a professional auctioneer including professional auction services. ii. Bids - Bids may be solicited for the sale of surplus property. Surplus property disposed of in this manner shall be sold to the highest responsible bidder.
iii. Selling for Scrap - Surplus property may be sold as scrap if the department head or designee in consultation with the Finance Director deems that the value of the raw material exceeds the value of the property as a whole.
iv. Negotiated Sale - Surplus property may be sold outright if the department head or designee in consultation with the Finance Director determines that only one known buyer is available or interested in acquiring the property.
v. No Value Item – Where the department head or designee in consultation with the Finance Director determines that specific supplies or equipment are surplus and of minimal value to the City due to spoilage, obsolescence or other cause, or where the Finance Director, serving as the Purchasing Officer, determines that the cost of disposal of such supplies or equipment would exceed the recovery value, the department head or designee in consultation with the Finance Director shall dispose of the same in such a manner as he or she deems appropriate and in the best interest of the City.
c. Surplus property that remains unsold will be donated to a non-profit organization or transferred to an appropriate recycle center. d. Proceeds from the sale or trade-in of surplus property shall be submitted to Finance for returning to the appropriate fund.
17 Unclaimed Funds/Outstanding Checks Policy and Procedures Policy
The City of Pinole will account for unclaimed funds in a manner which follows Government Code Sections 50050 through 50056. Funds that remain unclaimed for at least three (3) years will become the property of the City of Pinole after the procedures identified herein have been followed.
Purpose
The purpose of this policy is to establish guidelines for the proper disposition of unclaimed funds and outstanding checks in accordance with government statutes.
Definitions and Details
1. Definitions
a. Unclaimed Funds - Consists of funds which are not the property of the City but remain in the City Treasury for three (3) or more years without a claim being filed by the legal owner(s). Unclaimed funds do not include individual items of less than $15.00, any amounts in which the depositor’s name is unknown, or restitution to victims.
b. Warrant – Instrument issued to pay for goods and/or services rendered, issue refunds, etc. (i.e. a check).
c. Stale Dated – A check that is older than six (6) months. d. Escheat – refers to state escheat laws that require agencies to transfer unclaimed property or funds to the state after three years and reasonable efforts locate the property owner.
2. Guidelines
The City of Pinole has established the policy to hold unclaimed payroll and accounts payable checks rather than escheating the unclaimed funds to the State of California.
This unclaimed funds policy applies to all outstanding payroll and accounts payable checks abandoned three years after the issue date.
3. Procedures: Items over $15.00
a. Quarterly during the bank reconciliation process, the outstanding warrant register will be reviewed for items six (6) months and older. For the warrants six months and older, a letter and unclaimed property claim form will be mailed to the address on record for the issued warrant. See Exhibit 1 and 2 for examples.
b. Every June 30th and December 31st, (final evaluation dates) all remaining
18 outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days for the warrants 12 months or greater, the warrant will be identified as stale dated. Stale dated warrants shall be cancelled and voided in the system. A journal entry shall be prepared to record the total amount of stale dated checks in a hold account called “Aged Unclaimed Warrants”.
c. A list of stale date warrants containing the warrant number, issue date, amount, and payee shall be maintained by the Finance Department. If a cancelled warrant is presented, or the payee files a claim after cancellation, the warrant shall be reissued by debiting the “Aged Unclaimed Warrants” account, and the original warrant shall be removed from the stale dated list.
d. Also, on June 30th and December 31st, the stale dated list shall be evaluated to determine which warrants are more than 3 years old from the date of issue. Warrants that are more than 3 years old will be handled as follows:
i. A notice must be published once a week for two consecutive weeks in a newspaper of general circulation in the City of Pinole stating the payee, the amount, the fund in which the money is held, and that it is proposed that the money will become the property of the City of Pinole on a specific date (not less than 45 nor more than 60 days after the first publication). See Exhibit 3 for example. ii. Upon or prior to publication, a party of interest may file a claim (Exhibit 2) for the funds with the Finance Director. The claim must contain the claimant’s name, address, amount, tax identification number, and grounds for claim prior to the date the funds become property of the City of Pinole. The Finance Director can require additional information to help substantiate the claim.
iii. On the day identified in the notice, the total dollar amount (on which no claims were filed) becomes the property of the City. A journal entry will be prepared to recognize the revenue. The money will be moved from “Aged Unclaimed Warrants” to the fund the warrant was originally issued from.
4. Procedures: Items under $15.00 or items where the depositor is unknown a. Quarterly during the bank reconciliation process, the outstanding warrant register will be reviewed for items six (6) months and older. For the warrants six months and older, a letter and unclaimed property claim form will be mailed to the address on record for the issued warrant. See Exhibit 1 and 2 for examples.
b. Every June 30th and December 31st, (final evaluation dates) all remaining outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days for the warrants 12 months or greater, it becomes the property of the City of Pinole. Stale dated warrants shall be cancelled and voided in the system. A journal entry will
19 be used to record the total amount of these warrants as revenue. c. Any individual check of less than fifteen ($15) dollars, or any amount if the depositor’s name is unknown, which remain unclaimed for a period of one (1) year may be transferred from the funds which the money was originally drawn from by the City Council to the General Fund without the necessity of publication of notice in a newspaper. (Gov. Code Section 50055)
20 City of Pinole
INVESTMENTPOLICY
I. Introduction
The purpose of this Policy is to define the parameters within which funds are to be managed. In methods, procedures, and practices, the policy formalizes the framework for the City of Pinole’s investment activities that must be exercised to ensure effective and judicious fiscal and investment management of the City’s funds.
II. Governing Authority
The investment program of the City of Pinole (“the City”) shall be operated in conformance with federal, state, and other legal requirements. All funds will be invested in accordance with the City’s Investment Policy, and California Government Code Sections 5360l, 5360l.l, 5360l.5, 5360l.6, 53635, 53646, 53635.5, and l648l.2.
III. Scope
It is intended that this policy cover all funds (except retirement funds) and investment activities under the direction of the City. The investment of bond proceeds will be in accordance with the provisions of relevant bond documents.
IV. Objectives
The primary objectives, in priority order, of the investment activities of the City shall be:
1. Safety
Safety of principal is the foremost objective of the investment program.
Investments of the City shall be undertaken in a manner that seeks to ensure preservation of capital in the portfolio.
2. Liquidity
The investment portfolio of the City will remain sufficiently liquid to enable the City to meet its cash flow requirements.
22 3. Return
The investment portfolio of the City shall be designed with the objective of attaining a market rate of return on its investments consistent with the constraints imposed by its safety objective and cash flow considerations.
V. Standards of Care
1. Prudence
The standard of prudence to be used by investment officials shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse development.
The “prudent person” standard states that,
“Investments shall be made with judgment and care under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”
2. Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.
3. Delegation of Authority
The management responsibility for the investment program is hereby delegated to the City Treasurer or designee who shall monitor and review all investments for consistency with this investment policy. No person may engage in an investment transaction except as provided under the limits of this policy. The City Council may delegate its investment decision making and execution authority to an investment advisor. The advisor shall follow the policy and such other written instructions as are provided.
23 VI. Permitted Investment Instruments
1. U.S. Treasury and other government notes, bonds, bills, or obligations that carry the full faith and credit guarantee of the United States for the payment of principal and interest. Maturities shall not exceed five years in length. No more than fifty (50) percent of the City’s investment portfolio may be invested in instruments defined under this section.
2. Federal Agency or U.S. government sponsored enterprises (GSE) bonds and note obligations, participations or other instruments. This includes but is not limited to obligations issued by Banks for Cooperatives, Federal Land Banks, Federal Intermediate Credit Banks, Federal Farm Credit Banks, Federal Home Loan Banks, the Federal Home Loan Bank Board, the Federal Home Loan Mortgage Corporation or in obligations, participations, or other instruments of, or issued by, or fully guaranteed as to principal and interest by, the Federal National Mortgage Association; or in guaranteed portions of Small Business Administration notes. Maturities shall not exceed five years in length, unless the funds to be invested are moneys generated from the proceeds of the sale of real estate assets restricted to a reserve account, and the investment security is “AA” rated by at least two of three nationally recognized rating agencies (Standard & Poor’s, Moody’s or Fitch) in which case maturities shall not exceed ten years in length. No more than 40 (forty) percent of the City’s investment portfolio may be invested in instruments defined under this section.
3. Certificates of Deposit (CDs) which are Federal Deposit Insurance Company (FDIC) insured or fully collateralized time CD’s in financial institutions in California. No more than 10 percent of the City’s portfolio shall be invested in FDIC insured or fully collateralized time certificates of deposit. Maturities shall not exceed five years in length.
4. Negotiable FDIC insured Certificates of Deposit or deposit notes issued by a nationally or state-chartered bank or a state or federal savings and loan association or by a state-licensed branch of a foreign bank. Purchase of negotiable CD’s may not exceed 30 percent of the City’s investment portfolio.
Maturities shall not exceed five years in length, and must have an IDC number greater than 165 (excellent rated).
24 5. Bankers’ Acceptances issued by domestic or foreign banks, which are eligible for purchase by the Federal Reserve System, the short-term paper of which is rated in the highest category by Moody’s Investors Services or by Standard & Poor’s Corporation. Purchases of Bankers’ Acceptances may not exceed 180 days maturity or 40 percent of the City’s investment portfolio. No more than l0 percent of the City’s investment portfolio may be invested in the Banker’s Acceptances of any one commercial bank.
6. Medium-term corporate notes issued by corporations organized and operating within the United States or by depository institutions licensed by the U.S. or any state and operating within the U.S. Medium-term corporate notes shall be rated in a Double-AA rating category “AA” or its equivalent or better by a nationally recognized rating service. Additionally, corporate notes shall be widely diversified across all market sectors. Purchase of medium-term corporate notes may not exceed fifteen (15) percent of the City’s investment portfolio. No more than five (5) percent of the City’s investment portfolio may be invested in a medium-term note of any one corporation. Maturities shall not exceed five years in length.
7. Commercial paper rated in the highest tier of “prime quality” as provided by Moody’s Investors Service, Inc., or Standard & Poor’s Corporation, provided that the issuing corporation is organized and operating within the United States, has total assets in excess of $500 million and has an “A” or higher rating for its long-term debt, if any, as provided by Moody’s or Standard & Poor’s. Purchases of eligible commercial paper may not exceed l80 day’s maturity nor represent more than l0 percent of the outstanding paper of an issuing corporation. Purchases of commercial paper may not exceed l5 percent of the City’s investment portfolio. An additional l5 percent or a total of 30 percent of the City’s investment portfolio may be invested only if the dollar weighted average of the entire amount does not exceed 3l days.
8. Repurchase Agreements used solely as short-term investments not to exceed 30 days. The following collateral restrictions will be observed: Only U.S. Treasury securities or Federal Agency securities, as described in VI.l and 2, will be acceptable collateral. All securities underlying Repurchase Agreements must be delivered to the City’s custodian bank versus payment or be handled under a tri-party repurchase agreement. The total of all collateral for each Repurchase Agreement must equal or exceed, on the basis of market value plus accrued interest, l03 percent of the total dollar value of the money invested by the City for the term of the investment unless the term of the investment is overnight, in which case the total of all collateral for the Repurchase Agreement must equal or exceed, on the basis of market value plus accrued interest, l00 percent of the total dollar value of the
25 investment. For any Repurchase Agreement with a term of more than one day, the value of the underlying securities must be reviewed on a regular basis. Market value must be calculated each time there is a substitution of collateral. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to Repurchase Agreement.
The City may enter into Repurchase Agreements with (l) primary dealers in U.S. Government securities who are eligible to transact business with, and who report to, the Federal Reserve Bank of New York, and (2) California and non-California banking institutions having assets in excess of $l billion and in the highest short-term rating category as provided by Moody’s Investors Service, Inc. or Standard & Poor’s Corporation. The City will have specific written agreements with each firm with which it enters into Repurchase Agreements. No more than 10 percent of the City’s investment portfolio may be invested in Repurchase Agreements.
9. State of California’s Local Agency Investment Fund (LAIF). Up to l00 percent of the City’s portfolio may be invested in LAIF or up to the maximum permitted by California State Law. The LAIF portfolio should be reviewed periodically.
10.Securities and Exchange Commission (SEC) registered Money Market Mutual Funds as authorized by Government Code Sections 5360l and/or 53635. To be eligible for investment pursuant to this subdivision these companies shall either:
a. Attain the highest ranking letter or numerical rating provided by not less than two of the three largest nationally recognized rating services; b. Have an investment advisor registered with the Securities and Exchange Commission with not less than five years experience investing in securities and obligations authorized by Government Code Section 5360l;
c. Assets under management in excess of $500,000,000;
d. The purchase price of the share of beneficial interest shall not include any commission charged by these companies; and,
e. Purchases shall not exceed l5 percent of the investment portfolio of the City.
Under no circumstances shall any funds of the City be invested in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages. Nor
26 shall any of the City’s funds be invested in any security that could result in zero interest accrual if held to maturity.
VII. Reporting Requirements
Quarterly investment reports shall be submitted by the City’s Treasurer or designee to the City Council. The reports shall include, at a minimum, the following information for each individual investment:
• Type investment instrument;
• Institution/Issuer;
• Maturity date;
• Cost of security (par value) and dollar amount in all securities; • Description of the funds and investments;
• Maturity distribution and of the portfolio;
• Current market value of all securities;
• Rate of return for the portfolio;
• A statement of compliance of the portfolio with the City’s Investment Policy, and its ability to meet expenditure requirements for the next six months.
Pursuant to Government Code Section 53646 (e), the Treasurer may supply to the governing body, chief executive office and the external auditor a copy of the most recent statement received by the City on those investments in the State Local Agency Investment Fund in lieu of the above required statement.
In addition to the reporting requirement set forth by Section 53646, under Section 53607, the Treasurer or designee who has been delegated authority to invest or reinvest City funds must submit a monthly report to the City Council accounting for transactions made during the month. For efficiency, the investment report and transactions report will be merged and submitted to the City Council on a monthly basis.
VIII. Safekeeping and Custody
The assets of the City shall be secured through the third-party custody and safekeeping procedures. Bearer instruments shall be held only through third-party institutions. Collateralized securities such as repurchase agreements shall be purchased using the delivery vs. payment (DVP) procedure.
27
28 I. Introduction
City of Pinole
PENSION INVESTMENT POLICY
The City of Pinole (the “City”) has established the City of Pinole Employee Benefit Pension Plan (the “Plan”), a Section 115 Trust. The goal of the Plan’s investment program is to provide a reasonable level of growth which will result in sufficient assets to offset a portion of the present and future obligations of retirement benefits provided by the California Public Employees Retirement System (“CalPERS”) for those eligible employees who meet the specified age and service requirements.
II. Statement of Purpose
The purpose of this Pension Investment Policy is to establish a comprehensive strategy for assets invested under the Plan, and outline prudent and acceptable parameters in which pension funds are to be managed.
The primary objectives of this policy are to:
• Facilitate the process of ongoing communication between the Plan Sponsor and its plan fiduciaries;
• Confirm the Plan’s investment goals and objectives and management policies applicable to the investment portfolio;
• Provide a framework to construct a well-diversified asset mix that can potentially be expected to meet the account’s short and long-term needs that is consistent with the account’s investment objectives, liquidity considerations and risk tolerance;
• Identify any unique considerations that may restrict or limit the investment discretion of its designated investment managers;
• Help maintain a long-term perspective when market volatility is caused by short-term market movements.
III. Roles and Responsibilities
Governing Authority
The pension investment program of the City of Pinole (“the City”) shall be operated in conformance with federal, state, and other legal requirements. All funds will be invested in accordance with the City’s Pension Investment Policy, and applicable California Government Code Sections.
29 Delegation of Authority
The management responsibility for the pension investment program is hereby delegated to the City Manager and/or Assistant City Manager or designee as Plan Administrator who shall monitor and review all investments for consistency with this investment policy. No person may engage in an investment transaction except as provided under the limits of this policy. The City Council may delegate its investment decision making and execution authority to an investment advisor.
The advisor shall follow the policy and such other written instructions as are provided.
Duties and Responsibilities (Refer to Appendix for who serves in these roles) Plan Administrator
The Plan Administrator for the City of Pinole is responsible for:
▪ Confirming the accuracy of this Investment Guidelines Document, in writing.
▪ Advising Trustee and Investment Manager of any change in the plan/account’s financial situation, funding status, or cash flows, which could possibly necessitate a change to the account’s overall risk tolerance, time horizon or liquidity requirements; and thus would dictate a change to the overall investment objective and goals for the account. ▪ Monitoring and supervising all service vendors and investment options, including investment managers.
▪ Avoiding prohibited transactions and conflicts of interest.
Trustee
The plan Trustee is responsible for:
▪ Valuing the holdings.
▪ Collecting all income and dividends owed to the Plan. ▪ Settling all transactions (buy-sell orders).
Investment Manager
The Investment Manager is responsible for:
▪ Assisting the Plan Administrator with the development and maintenance of this Investment Policy document.
▪ Meeting with the Plan Administrator to review portfolio structure, holdings, and performance.
▪ Designing, recommending and implementing an appropriate asset allocation consistent with the investment objectives, time horizon, risk profile, guidelines and constraints outlined in this Policy. ▪ Researching and monitoring investment advisers and investment vehicles.
30 ▪ Purchasing, selling, and reinvesting in securities held in the account. ▪ Monitoring the performance of all selected assets.
▪ Voting proxies, if applicable.
▪ Recommending changes to any of the above.
▪ Periodically reviewing the suitability of the investments, and being available at such other times within reason at your request. ▪ Preparing and presenting appropriate reports.
▪ Informing the Plan Administrator if changes occur in personnel that are responsible for portfolio management or research.
Standards of Care
Prudence
The standard of prudence to be used by investment officers shall be the “prudent person” standard and shall be applied in the context of managing an overall portfolio. Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse development.
The “prudent person” standard states that,
“Investments shall be made with judgment and care under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.”
Ethics and Conflict of Interest
Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which could impair their ability to make impartial decisions.
IV. Asset Allocation
The goal of the Plan’s investment program is to provide a reasonable level of growth, which will result in sufficient assets to pay a portion of the present and future obligations of the Plan. The following objectives are intended to assist in
31 achieving this goal:
• The Plan should seek to earn a return in excess of its policy benchmark over the life of the Plan.
• The Plan’s assets will be managed on a total return basis which takes into consideration both investment income and capital appreciation. While the Plan Sponsor recognizes the importance of preservation of capital, it also adheres to the principle that varying degrees of investment risk are generally rewarded with compensating returns. To achieve these objectives, the Plan Sponsor allocates its assets (asset allocation) with a strategic perspective of the capital markets.
Investment Time Horizon: Intermediate-term
Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of future rate increases from CalPERS. Typically,
increases in rates come with a one-year advance
warning; however the Plan Administrator may
request disbursement of assets at any time.
Investment Objective: The primary objective is to generate a reasonable level of growth over time. The assets in this Plan
will eventually be used to fund Pension Plan
obligations for assets managed in the CalPERS
Trust.
Risk Tolerance: Custom – The account’s risk tolerance has been rated moderate, which demonstrates that the
account can accept price fluctuations to pursue
its investment objectives.
Strategic Asset Allocation
As of the date of this Pension Investment Policy adoption, the asset allocation ranges for the City of Pinole Employee Benefit Pension Plan is as follows:
Strategic Asset Allocation Ranges
Cash Fixed Income Equity
0-20% 45%-75% 25%-45%
Policy: 4% Policy: 60% Policy: 36%
32 Market conditions may cause the account’s asset allocation to vary from the stated range from time to time. The Investment Manager will rebalance the portfolio no less than quarterly and/or when the actual weighting differs substantially from the strategic range, if appropriate and consistent with the Plan’s objectives.
V. Investment Guidelines
Security Guidelines
Equities
With the exception of limitations and constraints described above, the Investment Manager may allocate assets of the equity portion of the account among various market capitalizations (large, mid, small) and investment styles (value, growth).
Further, the Investment Manager may allocate assets among domestic, international developed and emerging market equity securities.
Total Equities 25%-45%
Equity Style Range
Domestic Large Cap Equity 12%-35%
Domestic Mid Cap Equity 0%-10%
Domestic Small Cap Equity 0%-15%
International Equity (incl. Emerging Markets) 0%-15%
Real Estate Investment Trust (REIT) 0%-8%
Fixed Income
In the fixed income portion of the account, the Investment Manager may allocate assets among various sectors and industries, as well as varying maturities and credit quality that are consistent with the overall goals and objectives of the portfolio.
*High Yield securities may be purchased, but they will be held using a diversified exchange traded fund, or mutual fund vehicle.
If individual fixed income securities are purchased for the Plan, the following guidelines will be adhered to in the management of the fixed income segment:
Total Fixed Income 45%-75%
33 Eligible Investments
• Debt obligations of the U.S. Government, its agencies, and Government Sponsored Enterprises
• Mortgage-Backed Securities (MBS)
• Asset Backed Securities (ABS)
• Collateralized Mortgage Obligations (CMO)
• Commercial Mortgage-Backed Securities (CMBS)
• Corporate debt securities issued by U.S. or foreign entities including, but not limited to, limited partnerships, equipment trust certificates and enhanced equipment trust certificates
• Eligible instruments issued pursuant to SEC Rule 144(a) • Municipal Bonds
With the exception of Debt obligations of the U.S. Government, its agencies, Government Sponsored Enterprises and US TIPS, the total investment in any fixed income security issuer shall not exceed 3% of total plan assets. These restrictions do not apply to fixed income funds or exchange-traded funds (ETFs).
Quality
The portfolio will maintain a minimum weighted average quality of A- at all times.
Individual securities shall have a minimum quality rating of Baa3 by Moody’s or BBB- by Standard & Poor’s (S&P).
Duration
The Investment Manager will maintain the portfolio duration within +/- 25% of the benchmark duration at all times.
Diversification
• No more than 5% of the portfolio assets may be invested in any individual issuer, with the exception of securities issued or guaranteed by the U.S.
Government, its agencies, and Government Sponsored Enterprises. • No more than 10% of the portfolio may be invested in securities issued under Rule 144A.
34 Performance Benchmarks
The performance of the total Plan shall be measured over a three and five-year periods. These periods are considered sufficient to accommodate the market cycles experienced with investments. The performance shall be compared to the return of the total portfolio blended benchmark shown below.
Total Portfolio Blended Benchmark
19.00% S&P 500 Index
3.50% Russell Mid Cap Index
5.50% Russell 2000 Index
2.50% MSCI Emerging Market Index
4.50% MSCI EAFE Index
1.00% Wilshire REIT Index
45.50% Bloomberg Barclays Capital Aggregate Bond Index
13.00% ML 1-3 Year US Corp/Gov’t Index
1.50% US High Yield Master II
4.00% Citi 1Mth T-Bill
Asset Class/Style Benchmarks
Over a market cycle, the long-term objective for each investment strategy is to add value to a market benchmark. The following are the benchmarks used to monitor each investment strategy:
Large Cap Equity S&P 500 Index
Growth S&P 500 Growth Index
Value S&P 500 Value Index
Mid Cap Equity Russell Mid Cap Index
Growth Russell Mid Cap Growth Index
Value Russell Mid Cap Value Index
Small Cap Equity Russell 2000 Index
Growth Russell 2000 Growth Index
Value Russell 2000 Value Index
REITs Wilshire REIT Index
International Equity MSCI EAFE Index
Investment Grade Bonds Bloomberg Barclays Capital Aggregate Bond Index High Yield US High Yield Master II
35 Security Selection
The Investment Manager may utilize a full range of investment vehicles when constructing the investment portfolio, including but not limited to individual securities, mutual funds, and exchange-traded funds. In addition, to the extent permissible, the Investment Manager is authorized to invest in shares of mutual funds in which the Investment Manager serves as advisor or sub-adviser.
Investment Limitations
The following investment transactions are prohibited:
• Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
• Venture Capital
• Short sales*
• Purchases of Letter Stock, Private Placements, or direct payments • Leveraged Transactions*
• Commodities Transactions Puts, calls, straddles, or other option strategies* • Purchases of real estate, with the exception of REITs • Derivatives, with exception of ETFs*
*Permissible in diversified mutual funds and exchange-traded funds VI. Reporting Requirements
Quarterly reports shall be submitted by the Investment Manager to the Plan Administrator of the City of Pinole. These reports will be submitted by the City’s Treasurer or designee to the City Council.
36 APPENDIX
Plan Sponsor Account Information as of the date this pension investment policy is adopted:
Plan Sponsor: City of Pinole
Plan Administrator: City Manager and/or Assistant City Manager or designee
Governance: Pinole City Council
Plan Name (“Plan”) City of Pinole Employee Benefits Pension Plan Trustee: US Bank
Type of Account Pension Plan
ERISA Status: Not subject to ERISA
Investment Manager: US Bank, as discretionary trustee, has delegated investment management
responsibilities to HighMark Capital
Management, Inc. (“Investment Manager”), an
SEC-registered investment adviser
Investment Authority: Except as otherwise noted, the Trustee, US Bank, has delegated investment authority to
HighMark Capital Management, an SECregistered investment adviser. Investment Manager has full investment discretion over the
managed assets in the account. Investment
Manager is authorized to purchase, sell,
exchange, invest, reinvest and manage the
designated assets held in the account, all in
accordance with account’s investment
objectives, without prior approval or
subsequent approval of any other party(ies).
RESOLUTION NO 2024-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PINOLE APPROVING THE FINANCIAL AND INVESTMENT POLICIES FOR THE FISCAL YEAR 2024/25 WHEREAS, the City of Pinole has financial policies, including investment policies, that were most recently updated and approved by the City Council in April 2023; and WHEREAS, it is a best practice in public finance and a recommendation of the National Advisory Council on State and Local Budgeting (NACSLB) and the Government Finance Officers Association (GFOA) that cities regularly review and update as appropriate their financial policies; and
WHEREAS, State law recommends that California cities have investment policies that are adopted by their city council; and
WHEREAS, City staff presented the proposed financial and investment policies to the Finance Subcommittee on March 27, 2024 and received feedback from the Subcommittee; and
WHEREAS, City staff has addressed the feedback provided by the Subcommittee and is now seeking City Council’s adoption of the proposed financial and investment policies; and
WHEREAS, City staff presented proposed financial and investment policies for fiscal year (FY) 2024/25 to the City Council for consideration at the Council meeting held on April 16, 2024.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Pinole hereby approves the City of Pinole Financial and Investment Policies Updated April 16, 2024, attached hereto as Exhibit 1.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pinole held on the 16th day of April 2024 by the following vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAIN: COUNCILMEMBERS:
I hereby certify that the foregoing resolution was introduced, passed and adopted on this 16th day of April 2024.
____________________________
Heather Bell, CMC
City Clerk
CITY COUNCIL
REPORT 9.E.
DATE: APRIL 16, 2024
TO: MAYOR AND COUNCIL MEMBERS
FROM: MARKISHA GUILLORY, FINANCE DIRECTOR
STEPHANIE DOWNS, LEGAL COUNSEL
SUBJECT: DISSOLUTION OF THE CITY OF PINOLE SUCCESSOR AGENCY TO THE
REDEVELOPMENT AGENCY
RECOMMENDATION
Staff recommend that the Pinole City Council adopt a resolution declaring that there is no need for the Successor Agency to the Redevelopment Agency to function in the community and requesting that the Contra Costa County Oversight Board approve the dissolution of the Successor Agency.
BACKGROUND
On November 22, 1972, the City Council declared a need to eliminate blight in the community and created the Redevelopment Agency of the City of Pinole (the “Agency”) and recorded a map of the Pinole Vista Redevelopment Project Area (the “Project Area”). The map of the Project Area was subsequently amended to add territory to the Project Area.
In June 2011, the California Legislature passed AB x1 26 (as subsequently amended, the “Dissolution Law”) which dissolved all redevelopment agencies in the State of California and created successor agencies to wind down the redevelopment activities of the former redevelopment agencies.
On January 17, 2012, the City Council passed a resolution electing to serve as the Successor Agency to the Redevelopment Agency of the City of Pinole (the “Successor Agency”) and to assume the responsibilities, rights and powers of a successor agency to wind down the affairs of the Agency, as required under the Dissolution Law.
REVIEW AND ANALYSIS
The Successor Agency has now repaid all debt and has disposed of all real estate, as required under the Dissolution Law, and the City Council now desires to dissolve the Successor Agency. By adoption of this Resolution, the City Council is requesting that the Oversight Board of the County approve the dissolution of the Successor Agency and forward the request to the California Department of Finance.
Once the City has received final notice of dissolution of the Successor Agency from the Oversight Board, the City will record a notice terminating the Pinole Vista Redevelopment Project Area.