Redlands City Council
March 15, 2022

Measure T Citizens’ Oversight Committee
FY 2020‐21 Annual Report

March 15, 2022

Summary & Background

In  November  2020,  City  of  Redlands  voters  approved  a  one‐cent  sales  tax  (Measure  T)  that  became effective April 1, 2021.  The stated purpose of the tax was to provide funding for safety services, fire protection, paramedics, 911 emerge ncy response, addressing homelessness, police patrols and crime prevention,  maintaining  library  services,  parks,  sidewalks  and  roads,  keeping  public  areas  well‐ maintained and other general services.  The measure included a provision for the formation of a Citizens’ Oversight Committee, further described in Chapter 2.72 in the Redlands Municipal Code.

The  Oversight  Committee  was  established  to  serve  as  an  advisory  body  to  the  City  Council  and  to periodically review the revenues and expenditures of Measure T monies.  The seven‐member committee is comprised of five (5) citizen members from each Council dist rict and two (2) members representing the  City’s  employee  bargaining  units.    The  committee  shall  advise  the  Council  regarding  the  use  of Measure T revenue, according to the priorities set forth in each fiscal year adopted budget. This includes an  annual  written  report  to  the  Council  that  summarizes  the  committee’s  proceedings  and  activities during the most recent review period.

For fiscal year (FY) 2020‐21, City Council made the decision to prioritize the following expenditures in in the Adopted Budget.
 Restoring positions critical to public safety staffing levels  Restoring capital leases for Fire & Police
 Restoring the most critical contract services for general maintenance  Addition of Capital Projects ‐
o Police and Fire Facility Improvements and Equipment
o Library Facility Repairs & Improvements
o Animal Shelter Improvements
o Park Infrastructure Upgrades & Improvements

Redlands Regular Meeting 03-15-22

326 of 413

During FY 2020‐21, the City received a total of $4.6 million in Measure T sales tax. This was revenue $1.6 million over budget estimates.  The FY 2020‐21 Budget was revised to include approximately $2,970,400 in Measure T spending. Because of the timing of the budgeting process, the F Y 2020‐21 Measure T spending was approved with less than 20 working days remaining in the fiscal year to  spend the funds. As a result, few expenditures were made before June 30, 2021.

As a result of the increased revenue received over projections, staff is amending this report to include additional Measure T‐related projects to reconcile the additional $1.6 million.

Committee Proceedings
Between April 2021 and February 2022, the Committee met a total of five (5) times.  The inaugural meeting of the Committee was held April 21, 2021. During this meeting the  officers were elected by the members, the background  &  history  of  Measure  T  was  presented  along  with  a  re view  of  the  Committee’s  duties  and responsibilities.    The  subsequent  meeting  on  May  19,  2021  reviewed  the  fiscal  year  2020‐21  and  2021‐22 budgets recommended to the City Council by the City Manager.  The Committee motioned to recommend these budgets to the Council.

In November, the Committee met again to discuss possible fundin g sources for proposed City Council projects and how best to consider Measure T.  Over the course of the following meetings, the Committee determined a process by which to express its  opinion on the expenditure of M easure T funds, including presentation of the annual report to City Council as well as other avenues to commu nicate to the broader public & community.

D u r i n g  i t s  m e e t i n g  o f  J a n u a r y  2 5 t h ,  t h e  C o m m i t t e e  r e v i e w e d  t h e  audited  general  fund  financials  and  draft annual report.  During its meeting of February 25th, the Commit tee approved the report (contained herein) pending some revisions and clarifications. It was decided that  the next meeting of the Committee would be in May, closer to the presentation of the City Manager’s Proposed Budgets for FY 22, 23 & 24.

Financial Summary Information
The total General Fund Revenue for fiscal year (FY) 2020‐21 was  approximately $89.7 million. Measure T sales tax revenue represents 5% of these funds, or $4.6 million.  As  Measure T was effective April 1, 2021, these revenues were collected between April 1, 2021 and June 30, 2021.

(continued on next page)

Redlands Regular Meeting 03-15-22

327 of 413

Figure 1.

Due  to  the  timing  of  the  budget  process  and  the  effective  date of  Measure  T,  the  City  Council  approved additional expenditures of Measure T funds for FY 2020‐21 in June 2021.  This included additional spending of approximately $2.9 million on restoration of essential services , including public safety staffing, police and fire vehicles, essential maintenance services, infrastructure and park repairs, and Library improvements.  As a result of the increased revenue received over projections, staff is amending this report to include additional Measure T‐related projects to reconcile the additional $1.6 million. These additions are detailed in Figure 2 below.

Figure 2 below presents the adopted budget items, the amount budgeted, the actual expenditures before June 30, 2021 and the amount carried forward to the subsequent fisca l year 2021‐22.  Staff have added a section that  identifies  Measure  T  –eligible  projects  to  include  as  a  result  of  the  additional  revenue  received  over forecast amounts for FY 2020‐21. These amounts have also been carried over.

Redlands Regular Meeting 03-15-22

328 of 413

Figure 2.

Spending from the Approved Budget FY 2020‐21   Adopted Budget FY 2020‐21
Actual
FY 2020‐21
Carryover
FY 2021‐22
Mid‐Year Additions ‐
Adding back funds for 2 Police Dept. positons (partial year costs)   $            75,000    $                 ‐     $        75,000 Restoration of capital leases for Police vehicles               323,500                       ‐             323,500 *Adding back funds for  4 firefighter/paramedic positons (partial year costs)               151,000           151,000                      ‐ Restoration of capital leases for Fire vehicles                 61,000                       ‐               61,00 0 Restoration of 2 Facilities & Community Services positions (partial year costs)                28,500                       ‐               28,50 0 Restoration of most critical contract services for general maintenance               210,500           210,500  ‐ Subsequent Additions ‐
Police Department Specialized Vehicle & Facility Improvements               570,000                       ‐             570,000 Park Infrastructure Improvements               390,000                       ‐             390,000 Library Facility Repairs and Capital Improvements               370,000                       ‐             370,000 Animal Shelter Facility Improvements                 30,000                       ‐               30,00 0 Fire Station Mechanical & Security Enhancements               760,900                       ‐             760,900 Original Budget Total $      2,970,400  $     361,500  $  2,608,900 Additional Spending to Reconcile $1.6 million in additional revenue

June 1, 2021 Additions ‐
Upgrade Community Center Game room   $         168,000    $                 ‐     $       168,000 Repave & Restripe Community center Parking Lot                70,000                       ‐                70,00 0 Citywide Sidewalk/ADA Replacement Project               500,000                       ‐              500,000 Bridge Preventive Maintenance Program               275,000                      ‐              275,000 Citywide Stormdrain System Improvement Project               500,000                      ‐              500,000 Increase in Paramedics Fund Expenses over prior year               163,315          163,315         ‐ Subtotal   $      1,676,315  $                  ‐  $     1,513,000 Revised Total $      4,646,715  $     524,815  $    4,121,900 *Any vacancies were backfilled with overtime. Service levels remained consistent with pre‐pandemic levels.

As indicated, the timing of the above appropriations made it difficult to fully expend a significant portion of Measure  T  funds  before  the  end  of  FY  2021.  Some  progress  was  made  however,  on  services  for  general maintenance and Fire Department staffing.  Other projects remain at various stages of progress.  The inclusion of the additional projects is made in an effort to spend Measure T funds with priority and demonstrate value to the community, as these are the projects that underway and that staff are currently managing.

Conclusions
The Measure T Citizens’ Oversight Committee has reviewed the revenues and expenditures of the transactions and  use  tax  and  found  that  they  were  collected  and  appropriatel y  spent  in  accordance  with  the  City’s corresponding fiscal year budget plan, to the extent that timing allowed and that the City’s FY 2021‐22 General Fund Adopted Budget both promoted and maintained the City’s core services, including public safety.

Redlands Regular Meeting 03-15-22

329 of 413

The Citizens’ Oversight Committee understands the passage of Measure T represents a trusted investment by Redlands  residents.  We  believe  Measure  T  funds  are  being  used  as  intended  for  the  betterment  of  the community. During the review period, City staff have worked to provide transparent and accurate information to the Committee.

The  Citizens’  Oversight  Committee  looks  forward  to  the  continue d  improvements  to  public  safety  and infrastructure in the coming years made possible through Measure T.

Sincerely,

Toni Momberger, Chair, District 4
S t e v e n   C h a p m a n ,   V i c e   C h a i r ,   D i s t r i c t   3 Ruth Cook, Secretary, District 1
Edward Ico, District 2
Shelli Stockton, District 5
Rich Smith, Non‐Public Safety Bargaining Unit
Brent Fuller, Public Safety Bargaining Unit

MEASURE T CITIZENS’ OVERSIGHT COMMITTEE

Redlands Regular Meeting 03-15-22

330 of 413
City Council Meeting K. 1.

DATE: 03/15/2022
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of Resolution Nos. 8313 and 8314 (Mayor to declare meeting open as a public hearing)
PUBLIC HEARING to consider Resolution No. 8313 - Calling a special election of the question of levying special taxes within the territory to be annexed to Community Facilities District No. 2004-1; and Resolution No. 8314 - Declaring results of special election of Annexation No. 26 to Community Facilities District No. 2004-1 (Municipal Utilities and Engineering Director Harris)
A.

PROCEDURE FOR PUBLIC HEARING:

Mayor opens Public Hearing.1.

Mayor asks City Clerk if Notice of the Hearing has been published and mailed as required by law.

2. Mayor calls for report from the Municipal Utilities and Engineering Department with regard to the Annual Levy of Special Taxes within the Annexing Territory to Pay Costs of the Maintenance of Parkways within and in the area of the property and the Community Facilities District.

3. Mayor asks the City Clerk if she has received any written protests regarding the proposed Annexation.

4. Mayor asks if City Clerk agrees to hold the special election within the annexing territory on March 15, 2022.

5. Mayor closes Public Hearing.6.

The City Council may adopt the following Resolution:

Resolution Calling Special Election on the Question of Levying Special Taxes within the Territory Proposed to be annexed to Community Facilities District No. 2004-1.

7. City Clerk conducts Special Election and Announces Results of Canvass of Votes Cast.

8. City Council adopts Resolution Declaring Results of Special Election. 9.

Redlands Regular Meeting 03-15-22

331 of 413
MOTION(S):

If the City Council determines that staff's recommendation is appropriate, the following motions are provided:

I move City Council approve Resolution No. 8313.
“Mayor to request City Clerk to conduct Special Election and announce results of canvass of votes cast”; and

1. I move City Council approve Resolution No. 8314.2.

RECOMMENDATION:

Staff recommends the Mayor conduct the annexation proceeding in accordance with the above "Mayor's Agenda" and City Council adopt Resolution Nos. 8313 and 8314.

DISCUSSION:

On February 1, 2021, City Council approved Resolution No. 8293 to commence with the annexation proceedings for Lennar Homes of California, LLC., Tract Map No. 20257, to Community Facilities District No. 2004-1 (CFD) for the purposes of performing maintenance of perimeter lettered lots, retention basins, and street trees adjacent to Tract Map No. 20257. Additionally, at that meeting, a public hearing was set for March 15, 2022 regarding the annexation of approximately 37.9 acres of land located at the northwest corner of San Bernardino Avenue and Texas Street. At the conclusion of the public hearing, City Council will consider adopting Resolution No. 8313 scheduling a special election within the territory to be annexed. Resolution No. 8313 schedules the special election for March 15, 2022, immediately following the public hearing.

Lennar Homes of California, LLC. requested the annexation of its property into the CFD and delivered to the City Clerk a written waiver consenting to the special election being conducted by the City Clerk on March 15, 2022. The City Clerk consented to conduct the special election on that date.

Immediately following the adoption of Resolution No. 8313, the property owners will deliver voted ballots to the City Clerk. The City Clerk will then canvass the voted ballot(s) and report the results of the election to the Council. The Council will then consider the adoption of Resolution No. 8314, declaring the results of the election, which will complete the annexation of the property to the Community Facilities District.

The adoption of Resolution Nos. 8313 and 8314 are not subject to environmental

Redlands Regular Meeting 03-15-22

332 of 413
The adoption of Resolution Nos. 8313 and 8314 are not subject to environmental review pursuant to Section 15061 (b)(3) of the California Environmental Quality Act, as the adoption of these Resolutions does not have the potential for causing a significant effect on the environment.

CFD 2004-1 has had multiple annexations in the past 18 years which are listed in Attachment "L".

ALTERNATIVES:

The Council may choose to deny the request to annex property into CFD No. 2004-1; however, another funding source for the maintenance of the perimeter lettered lots, retention basins, and street trees will need to be identified.

STRATEGIC PLAN:

N/A
SUBMITTED BY:

John R. Harris, Municipal Utilities and Engineering Director RECOMMENDED BY:

Charles M. Duggan, Jr., City Manager
REVIEWED BY:

Daniel J. McHugh, City Attorney
Janice McConnell, Assistant City Manager
Chris Boatman, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
Goutam Dobey, Engineering Manager
PREPARED BY:

Donald P. Young, One Stop Permit Center Manager
Fiscal Impact
Budgeted Y/N: NA
Discussion:

There is no fiscal impact to the City as all costs for this annexation are borne by the property owner.

Redlands Regular Meeting 03-15-22

333 of 413
Attachments
Attachment A - Resolution No. 8293 - Resolution of Intent Attachment B - Ballot
Attachment C - Official Ballot
Attachment D - Project Location Map
Attachment E - Resolution 8313 Calling Ellection - Redlands CFD 2004-1 Annex. No. 26
Attachment F - Resolution 8314 Declare Results of Election, Annex No. 26 Attachment G - Annex 26 - Notice of Hearing
Attachment H - Boundary Map
Attachment I - Affidavit Proof of Publication
Attachment J - Signed Redlands CFD 2004-1 Annex No. 26 - Waiver Atachment K - Voter Certification from County of San Bernardino - Annex No. 26 Attachment L - Annexation List

Redlands Regular Meeting 03-15-22

334 of 413

Redlands Regular Meeting 03-15-22

335 of 413

Redlands Regular Meeting 03-15-22

336 of 413

Redlands Regular Meeting 03-15-22

337 of 413

Redlands Regular Meeting 03-15-22

338 of 413

Redlands Regular Meeting 03-15-22

339 of 413

Redlands Regular Meeting 03-15-22

340 of 413
17942.00056\34696317.1

COMMUNITY FACILITIES DISTRICT NO. 2004-1

OF THE CITY OF REDLANDS,

COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA
(ANNEXATION 26)
(Special Election With Respect to Annual
Levy of Special Taxes to Be Levied Within
Territory Proposed to Be Annexed to the
Community Facilities District)
March 15, 2022
_________________________________________
Ballot Pamphlet
and
Instructions to Voter

Redlands Regular Meeting 03-15-22

341 of 413
17942.00056\34696317.1

-2-

Dear Voter:

The City Council of the City of Redlands has called a special election within territory proposed to be annexed to Com munity Facilities District No. 2004-1 of the City of Redlands, County of San Bernardino, State of California. This is an all -mailed ballot landowner election. The ballots are being mailed to the persons or entities listed on the County Assessor ’s latest equalized assessment roll as updated based on more current information available to the City of Redlands.

YOU WILL RECEIVE ONE BALLOT FOR EACH GROUP OF PARCELS
LISTED UNDER AN IDENTICAL NAME AND ADDRESS . The ballots will be distributed based on the names and addresses designated on the assessment roll or obtained from such other information. Any parcels with a common name and address were combined for voting purposes.

Each qualified voter has been issued one ballot which entitles that voter to vote his or her total acreage of land. Each ballot is allotted a specified number of votes depending on acreage. Each acre or portion thereof is worth one vote.

Please note that your ballot must be received by the City Clerk of the City of Redlands not later than 6:00 p.m., March 15 , 2022. A POSTMARK DATE IS NOT ACCEPTABLE. You must use the enclosed envelope for mailing your ballot, or your ballot may be delivered in the envelope, to the office of the City Clerk of the City of Redlands, located at 35 Cajon Street, Redlands, California 92373.

Contained in this Ballot Pamphlet and Instructions to Voter are Instructions to Landowner Voter, a Sample Ballot, and a copy of Resolution No. 8293 of the City Council of the City of Redlands.

If you have any questions, please contact us at (909) 798-7531.

Very truly yours,
Jeanne Donaldson
City Clerk
City of Redlands

Redlands Regular Meeting 03-15-22

342 of 413
17942.00056\34696317.1

-3-

INSTRUCTIONS TO LANDOWNER VOTER

HOW TO VOTE YOUR BALLOT
Vote your official ballot by placing a cross (+ or X) in the voting square opposite your choice with a pen or pencil, and by completing, dating and signing the certificate attached thereto.

SPOILING YOUR BALLOT
If you tear your ballot or make an error in voting you may secure another by surrendering the ballot you spoiled, in person or by mail at the address below, or by executing an affidavit to the effect that you lost your ballot, and you will be given another ballot.

RETURNING YOUR BALLOT
Enclose your ballot in the Identification Envelope provided. Supply ALL information requested on the Identification Envelope.

LAST DAY TO RETURN TO CITY CLERK OF THE CITY OF REDLANDS Your ballot must be returned to the City Clerk of the City of Redlands not later than 6:00 p.m. on March 15 , 2022, for it to be counted. YOUR BALLOT CANNOT BE ACCEPTED BEYOND THIS DEADLINE.

Your ballot must be returned in the envelope provided for this purpose, or it may be delivered in the envelope to the City Clerk of the City of Redlands, located at 35 Cajon Street, Redlands, California 92373.

Redlands Regular Meeting 03-15-22

343 of 413
17942.00056\34696317.1

-4-

S A M P L E B A L L O T

DO NOT VOTE

OFFICIAL BALLOT

SPECIAL ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2004-1

OF THE CITY OF REDLANDS

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
March 15, 2022
To vote, mark a cross (+ or X) in the voting square after the word “ YES” or after the word “NO”. All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Redlands and obtain another.

PROPOSITION A: Shall Proposition A
authorizing the annual levy of special taxes
on taxable property in the territory proposed
to be annexed to Community Facilities
District No. 2004-1 of the City of Redlands,
County of San Bernardino, State of
California, to pay the costs of the
maintenance of perimeter lettered lots,
retention basins, and street trees adjacent to
Tract Map No. 20257, including but not
limited to, landscape maintenance in the
area of the Property and the Community
Facilities District, and to pay costs
associated w ith the determination of the
amount of and the levy and collection of the
special taxes at the special tax rates provided
for Special Tax Rate Category “ B”, as set
forth in Exhibit “B” to Resolution No. 8293
and for Fiscal Year 2022-23, and each Fiscal
Year thereafter, assessed at the rate set forth
in Table 2 in Exhibit “B” to Resolution No.
8293, subject to annual increases beginning
in Fiscal Year 20 23-24 by the greater of 2%
or the percentage increase in the Consumer
Price Index as determined pursuant t o the
method of apportioning such special taxes
set forth in said Exhibit “B” be approved?

YES
NO

Redlands Regular Meeting 03-15-22

344 of 413
17942.00056\34696474.1

Lennar Homes of California, LLC

37.90 acres – 38 votes

OFFICIAL BALLOT

SPECIAL ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2004-1

OF THE CITY OF REDLANDS

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
March 15, 2022
To vote, mark a cross (+ or X) in the voting square after the word “ YES” or after the word “NO”. All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Redlands and obtain another.

PROPOSITION A: Shall Proposition A
authorizing the annual levy of special taxes
on taxable property in the territory proposed
to be annexed to Community Facilities
District No. 2004-1 of the City of Redlands,
County of San Bernardino, State of
California, to pay the costs of the
maintenance of perimeter lettered lots,
retention basins, and street trees adjacent to
Tract Map No. 20257, including but not
limited to, landscape maintenance in the
area of the Property and the Community
Facilities District, and to pay costs
associated with the determination of the
amount of and the levy and collection of the
special taxes at the special tax rates provided
for Special Tax Rate Category “ B”, as set
forth in Exhibit “B” to Resolution No. 8293
and for Fiscal Year 2022-23, and each Fiscal
Year thereafter, assessed at the rate set forth
in Table 2 in Exhibit “B” to Resolution No.
8293, subject to annual increases beginning
in Fiscal Year 20 23-24 by the greater of 2%
or the percentage increase in the Consumer
Price Index as determin ed pursuant to the
method of apportioning such special taxes
set forth in said Exhibit “B” be approved?

YES
NO

Redlands Regular Meeting 03-15-22

345 of 413
17942.00056\34696474.1

CERTIFICATION
I certify that I am the authorized representative of Lennar Homes of California, LLC, a California limited liability company , the owner of property to be annexed and included within the boundaries of Community Facilities District No. 2004- 1 of the City of Redlands , County of San Bernardino, State of California, (the “Owner”) and that I am authorized to vote the Official Ballot to which this certification is attached. I further certify that in voting said ballot it was my intent, as well as the intent of the Owner, to vote all votes to which the Owner is entitled on Proposition A set forth in said ballot as marked in the voting square opposite such proposition. I further certify that the Owner is the owner of approximately 37.90 acres of land proposed to be included within said community facilities district, and that in voting said ballot I intended to vote each vote to which such acreage would entitle the Owner in the manner marked on said ballot.

I certify that this certification was executed on ________________, 2022, at __________________________, California.

LENNAR HOMES OF CALIFORNIA, LLC
a California limited liability company

______________________________________
By: Geoffrey L. Smith
Its: Vice President

Redlands Regular Meeting 03-15-22

346 of 413
TRACT MAP NO. 20257

Redlands Regular Meeting 03-15-22

347 of 413
1 L:\ca\Reso\8313 Resolution Calling Election-CFD 2004-1 ANNEX 26.doc RESOLUTION NO. 8313

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS

CALLING SPECIAL ELECTION AND SUBMITTING TO THE QUALIFIED

ELECTORS OF TERRITORY PROPOSED TO BE ANNEXED TO
COMMUNITY FACILITIES DISTRICT NO. 2004-1 OF THE CITY OF

REDLANDS THE QUESTI ON OF LEVYING SPECIAL TAXES WITHIN
THAT TERRITORY (ANNEXATION 26)

WHEREAS, the City Council (the "City Council") of the City of Redlands (the "City") has heretofore conducted proceedings for the establishment of and has established Community Facilities District No. 2004-1 of the City of Redlands , County of San Bernardino, State of California (the "Community Facilities District"), and the Community Facilities District has been authorized to annually levy special taxes to pay the costs of the maintenance of parks, parkways and open space, including, but not limited to, the maintenance of street trees and landscape, within the Community Facilities District and in the surrounding area , the costs associated with the determination of the amount of and levy and c ollection of special taxes which will be levied to provide the services, and costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District; and

WHEREAS, the City Council is authorized by Article 3.5 (commenci ng with Section 53339) of Chapter 2.5 of Part 1 of Division 2 of Title 5 of the California Government Code, commonly known as the "Mello- Roos Community Facilities Act of 1982," to annex territory to the Community Facilities District; and

WHEREAS, on February 1, 2022, the City Council adopted Resolution No. 8293, a resolution amending and restating a resolution of intention to annex territory to the Community Facilities District pursuant to Section 53339.2 of the California Government Code, determining that the public convenience and necessity require that certain property, consisting of approximately 37.90 acres, be annexed to the Community Facilities District and containing all of the matters prescribed by Section 53339.3 of said Code, and fixing 6:00 p.m., or as soon thereafter as the matter may be heard, on March 15, 2022, in the meeting room of the City Council, or via teleconference as directed by the City due to COVID -19 social distancing guidelines as the time and place for a hearing upon said resolution; and

WHEREAS, pursuant to said resolution, the City Clerk has published and mailed notice of the time and place of said hearing as required by Section 53339.4 of said Code; and

WHEREAS, on March 15, 2022, at the time and place of said hearing, the City Council afforded all interested persons for or against the annexation of said property to the Community Facilities District an opportunity to present testimony and to protest against the proposed annexation of said property to the Community Facilities District, and no protests, either oral or in writing, were received; and

Redlands Regular Meeting 03-15-22

348 of 413
17942.00056\34697122.1

-2-

WHEREAS, pursuant to Section 53339.7 of said Code, the City Council may now submit the question of levying a special tax within the territory proposed to be annexed to the Community Facilities District to the qualified electors within that territory;

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF REDLANDS AS FOLLOWS:

Section 1. Findings. The City Council finds that: (i) the foregoing recitals are correct; (ii) less than 12 persons have been registered to vote within the territory proposed to be annexed to the Community Facilities District during the 90 days preceding the close of the public hearing held on March 15 , 2022, and no persons are registered to vote therein ; (iii) pursuant to Section 53326 of the California Government Code, as a result of the findings set forth in clause (ii) above, the vote in the special election called by this resolution shall be by the landowners of the territory proposed to be annexed to the Community Facilities District whose property would be subject to the special taxes if they were levied at the time of the election, and each landowner shall have one vote for each acre, or portion thereof, which he or she owns within said territory which would be subject to the proposed special taxes if they were levied at the time of the election; and (iv) pursuant to said Section 53326, the special election must be held at least 90 days, but not more than 180 days following the date of the adoption of this resolution, unless such time periods are waived with the unanimous waiver of the qualified electors. All of the qualified electors in the territory to be annexed waived the time limits and election formalities of the special election.

Section 2. Special Election . A special election is called for and shall be held on Tuesday, March 15, 2022, for the purpose of submitting to the qualified electors of the territory proposed to be annexed to the Community Facilities District the question of whether special taxes shall annually be levied within said territory to pay the costs of the maintenance of perimeter lettered lots, retention basins, and street trees adjacent to Tract Map No. 20257, including but not limited to, landscape maintenance in the area of the Property and the Community Facilities District, the costs associated with the determination of the amount of and levy and collection of special taxes which will be levied to provide the services , and costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District pursuant to the Rates and Method of Apportionment of the Special Taxes, attached as Exhibit "B" to Resolution No. 8293.

Section 3. Ballot Proposition. The proposition to be submitted on March 15, 2022, to the qualified electors of the territory proposed to be annexed to the Community Facilities District shall be as follows:

First Proposition

PROPOSITION A: Shall Proposition A authorizing the annual levy of special taxes on taxable property in the territory proposed to be annexed to Community Facilities District No. 2004- 1 of the City of Redlands, County of San Bernardino, State of California, to pay the costs of the maintenance of perimeter lettered lots, r etention basins, and street trees adjacent to Tract Map No. 20257, including but not limited to, landscape

Redlands Regular Meeting 03-15-22

349 of 413
17942.00056\34697122.1

-3-

maintenance in the area of the Property and the Community Facilities District, and to pay costs associated with the determination of the amount of and the levy and collection of the special taxes at the special tax rates provided for Special Tax Rate Category “B”, as set forth in Exhibit “B” to Resolution No. 8293 and for Fiscal Year 2022-23, and each Fiscal Year thereafter, assessed at the rate set fo rth in Table 2 in Exhibit “B” to Resolution No. 8293, subject to annual increases beginning in Fiscal Year 2023-24 by the greater of 2% or the percentage increase in the Consumer Price Index as determined pursuant to the method of apportioning such special taxes set forth in said Exhibit “B” be approved?

Section 4. Conduct of Election. Except as otherwise provided in Section 5 hereof, said election shall be conducted by the City Clerk (the "City Clerk") pursuant to the provisions of the California Elec tions Code governing elections of cities, and the provisions of Division 4 (commencing with Section 4000) of said Code, insofar as they may be applicable.

Section 5. Election Procedures . The procedures to be followed in conducting said election shall be as follows:

(a) Pursuant to Section 53326 of the California Government Code, ballots for the election shall be distributed to the qualified electors by the City Clerk by mail with return postage prepaid.

(b) Pursuant to applicable sections of the aforementioned provisions of the California Elections Code governing the conduct of mail ballot elections, including in particular Division 4 (commencing with Section 4000) of said Code, the City Clerk shall mail or deliver to each qualified elector an official ballot in the form attached hereto as Exhibit "A," and shall also mail or deliver to all such qualified electors a ballot pamphlet and instructions to voter, including a sample ballot identical in form to the official ballot but identified as a sample ballot, a return identification envelope with prepaid postage thereon addressed to the City Clerk for the return of voted official ballots, and a copy of Resolution No. 8293.

(c) The official ballot to be mailed by the City Clerk to each landowner -voter shall have printed or typed thereon the name of the landowner -voter and the number of votes to be voted by the landowner-voter and shall have appended to it a certifi cation to be signed by the person voting the official ballot which shall certify that the person signing the certification is the person who voted the official ballot, and if the landowner -voter is other than a natural person, that he or she is an officer of or other person affiliated with the landowner -voter entitled to vote such official ballot, that he or she has been authorized to vote such official ballot on behalf of the landowner-voter, that in voting such official ballot it was his or her intent, as well as the intent of the landowner-voter, to vote all votes to which the landowner -voter is entitled based on its land ownership on the proposition set forth in the official ballot as marked thereon in the voting square opposite such proposition, and further certifying as to the acreage of the landowner - voter's land ownership within the Community Facilities District.

(d) The return identification envelope delivered by the City Clerk to each landowner-voter shall have printed or typed thereon the following: the name of the landowner,

Redlands Regular Meeting 03-15-22

350 of 413
17942.00056\34697122.1

-4-

the address of the landowner, a declaration under pena lty of perjury stating that the voter is the landowner or the authorized representative of the landowner entitled to vote the enclosed ballot and is the person whose name appears on the identification envelope, the printed name and signature of the voter, the address of the voter, the dat e of signing and place of execu tion of said declaration, and a notice that the envelope contains an official ballot and is to be opened only by the City Clerk.
(e) The information- to-voter form to be mailed by the City Clerk to the landowner-voters shall inform them that the official ballots shall be returned to the City Clerk properly voted as provided thereon and with the certification appended thereto properly completed and signed in the sealed return identification envelope with the certification thereon completed and signed and all other information to be inserted thereon properly inserted by six (6) o'clock p.m. on the date of the election.

(f) Upon receipt of the return identification envelopes which are returned prior to the voting deadline on the date of the election, the City Clerk shall canvass the votes cast in the election, and shall file a statement with the City Council as to the results of such canvass and the election on the proposition set forth in the official ballot.

ADOPTED this 15th day of March, 2022.

____________________________
Paul T. Barich, Mayor

ATTEST:

_________________________
Jeanne Donaldson, City Clerk

Redlands Regular Meeting 03-15-22

351 of 413
5 L:\ca\Reso\8313 Resolution Calling Election-CFD 2004-1 ANNEX 26.doc EXHIBIT "A"

OFFICIAL BALLOT

SPECIAL ELECTION FOR
COMMUNITY FACILITIES DISTRICT NO. 2004-1

OF THE CITY OF REDLANDS

COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA
March 15, 2022

To vote, mark a cross (+ or X) in the voting square after the word "YES" or after the word "NO". All marks otherwise made are forbidden. All distinguishing marks are forbidden and make the ballot void.

If you wrongly mark, tear, or deface this ballot, return it to the City Clerk of the City of Redlands and obtain another.

PROPOSITION A: Shall Proposition A
authorizing the annual levy of special taxes
on taxable property in the territory proposed
to be annexed to Community Facilities
District No. 2004-1 of the City of Redlands,
County of San Bernardino, State of
California, to pay the costs of the
maintenance of perimeter lett ered lots,
retention basins, and street trees adjacent to
Tract Map No. 20257, including but not
limited to, landscape maintenance in the
area of the Property and the Community
Facilities District, and to pay costs
associated with the determination of the
amount of and the levy and collection of the
special taxes at the special tax rates
provided for Special Tax Rate Category
“B”, as set forth in Exhibit “B” to
Resolution No. 8293 and for Fiscal Year
2022-23, and each Fiscal Year thereafter,
assessed at the rate set forth in Table 2 in
Exhibit “B” to Resolution No. 8293, subject
to annual increases beginning in Fiscal Year
2023-24 by the greater of 2% or the
percentage increase in the Consumer Price
Index as determined pursuant to the method
of apportioning such special taxes set forth
in said Exhibit “B” be approved?

YES

NO

Redlands Regular Meeting 03-15-22

352 of 413
17942.00056\34697122.1

-6-

CERTIFICATION

I, Jeanne Donaldson, City Clerk of the City of Redlands, do hereby certify that the foregoing r esolution was regularly adopted by the City Council of said City at a regular meeting of said Council duly held on the 15th day of March, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

IN WITNESS WHEREOF , I have hereunto set my hand this ______ day of March, 2022.

_______________________________________
Jeanne Donaldson, City Clerk

Redlands Regular Meeting 03-15-22

353 of 413
1 L:\ca\Reso\8314 Resolution Declaring Results of Election-CFD 2004-1 ANNEX 26.docx RESOLUTION NO. 8314

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDLANDS

DECLARING THE RESULTS OF THE SPECIAL ELECTION FOR COMMUNITY FACILITIES DISTRICT NO. 2004 -1 OF THE CITY OF REDLANDS ON THE

PROPOSITION OF THE ANNUAL LEVY OF SPECIAL TAXES WITHIN THE

TERRITORY PROPOSED TO BE ANNEXED TO SAID COMMUNITY

FACILITIES D ISTRICT TO PAY THE COSTS OF CERTAIN SERVICES TO BE

PROVIDED BY THE COMMUNITY FACILITIES DISTRICT, DETERMINING

THAT THE TERRITORY PROPOSED TO BE ANNEXED IS ADDED TO AND

PART OF SAID COMMUNITY FACILITIES DISTRICT WITH FULL LEGAL

EFFECT, AND ORDERING THE RECORDING OF A MAP OF THE BOUNDARIES

OF SAID COMMUNITY FACILITIES DISTRICT INCLUDING THE TERRITORY ANNEXED THERETO (ANNEXATION NO. 26)
WHEREAS, the City Council (the "City Council") of the City of Redlands (the "City") has heretofore conducted proceedings for the annexation of approximately 37.90 acres of land to Community Facilities District No. 2004 -1 of the City of Redlands, County of San Bernardino, State of California (the "Community Facilities District"), including conducting a public hearing pursuant to Section 53339.5 of the Government Code; and WHEREAS, at the conclusion of said public hearing, the City Council adopted a resolution calling a special election for March 15, 2022 and submitting to the qualified electors of the territory to be annexed to the Community Facilities District the question of levying special taxes within that territory to pay the costs of the maintenance of perimeter lettered lots, retention basins, and street trees adjacent to Tract Map No. 20257, including but not limited to, landscape maintenance in the area of the Property and the Community Facilities District and the costs associated with the determination of the amount of and levy and collection of special taxes which will be levied to provide the services and costs otherwise incurred in order to carry out the authorized purposes of the Community Facilities District (the "Election Resolution"); and WHEREAS, the City Council has received a statement from the City Clerk (the "City Clerk"), who pursuant to the Election Resolution was authorized to conduct such special election and act as the election official therefor, with respect to the canvass of the ballot returned in and the results of said special election, certifying that at least two -thirds of the votes cast upon the proposition submitted to the qualified electors in said special election were in favor of such proposition.

NOW, THEREFORE, BE IT RESOLVED, DETERMINED AND ORDERED BY THE CITY COUNCIL OF THE CITY OF REDLANDS AS FOLLOWS:

Section 1. Findings. The City Council finds that: (i) there are no registered voters residing within the territory proposed to be annexed to the Community Facilities District (the "Territory") at the time of the close of the public hearing on March 15, 2022 and pursuant to Section 53326 of the Government Code, the vote in said special election was, therefore, to be by the landowners owning land within the Territory, with each landowner having one vote for each acre or portion thereof of land that he or she owned within the Territory; (ii) pursuant to said

Redlands Regular Meeting 03-15-22

354 of 413
2 L:\ca\Reso\8314 Resolution Declaring Results of Election-CFD 2004-1 ANNEX 26.docx Section 53326 and the Election Resolution, the City Clerk caused to be delivered an official ballot for the special election to the owner of the land within the Territory, with return postage prepaid; (iii) said special election has been properly conducted in accordance with all statutory requirements and the provisions of the Election Resolution; (iv) pursuant to said Section 53326, Lennar Homes of California, LLC, the owner of all the land within the Territory, was entitled to thirty-eight (38) votes; (v) said landowner returned its ballot to the City Clerk prior to the time set by the City Clerk for the close of the election on March 15, 2022; (vi) the ballot returned to the City Clerk by said landowner voted all votes of said landowner in favor of the proposition set forth therein; (vii) at least two-thirds of the votes cast in such special election on said proposition were in favor thereof, and pursuant to Sections 53328 and 53329 of the Government Code, said proposition carried; (viii) pursuant to Section 53339.8 of the Government Code, the City Council is authorized to determine that the Territory to be annexed has been added to and become a part of the Community Facilities District with full legal effect; and (ix) the City Council is also authorized, pursuant to said Section 53339.8, to annually levy special taxes within the Territory to pay the costs of the services to be provided by the Community Facilities District.

Section 2. Declaration of Results. At least two-thirds of the votes voted in the special election on the proposition of the annual levy of special taxes within the Territory to pay the costs of the services to be provided by the Community Facilities Dis trict were voted in favor thereof, and such proposition carried.

Section 3. Annexation. The Territory is annexed and added to and is a part of the Community Facilities District with full legal effect, and the City Council shall annually levy special taxes within the Territory at the rates provided for Special Tax Rate Category “B”, as specified in Resolution No. 8293 adopted by the City Council on February 1, 2022, to pay costs of certain services to be provided by the Community Facilities District. The boundaries of the Territory are shown on the map entitled, Annexation Map No. 26, Community Facilities District No. 2004-1 of the City of Redlands, County of San Bernardino, State of California, which was recorded on February 3, 2022 in the office of the County Recorder of the County of San Bernardino as Document No. 2022-0047463.

Section 4. Pursuant to Section 53339.8 of the Government Code and Section 3117.5 of the Streets and Highways Code, the City Clerk shall cause to be filed with the County Recorder of the County of San Bernardino an amendment of the notice of special tax lien and a map of the amended boundaries of the Community Facilities District including the Territory.

ADOPTED this 15th day of March, 2022.

__________________________
Paul T. Barich, Mayor
ATTEST:

_____________________________
Jeanne Donaldson, City Clerk

Redlands Regular Meeting 03-15-22

355 of 413
3 L:\ca\Reso\8314 Resolution Declaring Results of Election-CFD 2004-1 ANNEX 26.docx

CERTIFICATION

I, Jeanne Donaldson, City Clerk of the City of Redlands, do hereby certify that the foregoing resolution was regularly adopted by the Ci ty Council of said City at a regular meeting of said Council duly held on the 15th day of March, 2022 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAINED:

IN WITNESS WHEREOF, I have hereunto set my hand this ______ day of March, 2022.

____________________________
Jeanne Donaldson, City Clerk

Redlands Regular Meeting 03-15-22

356 of 413

Redlands Regular Meeting 03-15-22

357 of 413

Redlands Regular Meeting 03-15-22

358 of 413

Redlands Regular Meeting 03-15-22

359 of 413

Redlands Regular Meeting 03-15-22

360 of 413

Redlands Regular Meeting 03-15-22

361 of 413

Redlands Regular Meeting 03-15-22

362 of 413

Redlands Regular Meeting 03-15-22

363 of 413

Redlands Regular Meeting 03-15-22

364 of 413

Redlands Regular Meeting 03-15-22

365 of 413

Redlands Regular Meeting 03-15-22

366 of 413

Redlands Regular Meeting 03-15-22

367 of 413

Redlands Regular Meeting 03-15-22

368 of 413

Redlands Regular Meeting 03-15-22

369 of 413

Redlands Regular Meeting 03-15-22

370 of 413

Redlands Regular Meeting 03-15-22

371 of 413

Redlands Regular Meeting 03-15-22

372 of 413

Redlands Regular Meeting 03-15-22

373 of 413

WRITTEN CONSENT TO CORPORATE ACTION

BY BOARD OF DIRECTORS AND SHAREHOLDER OF
LENNAR HOMES OF CALIFORNIA, INC.

JANUARY 31, 2022

The undersigned, being all the members of the Board of Directors of LENNAR HOMES OF CALIFORNIA, INC., a California corporation (the “Corporation”), and all the members of the Board of Directors of U.S. HOME CORPORATION, a Delaware corporation (“Shareholder”) and the sole shareholder of the Corporation, joined by the undersigned Vice President of Shareholder on its behalf, do hereby waive any and all requirements for notice of the time, place and purpose of a special meeting of the Board of Directors and shareholders of the Corporation and do hereby unanimously agree and consent, pursuant to the provisions of 307(b) of the C alifornia General Corporation Law, to the adoption of, and do hereby adopt, the following preamble, resolutions and the actions specified therein:

WHEREAS, the Board of Directors of the Corporation have recommended to Shareholder that the Corporation be converted into a California limited liability company under the name “ LENNAR HOMES OF CALIFORNIA, LLC ” (the “Converted Entity”) substantially upon the terms and conditions set forth in the Plan of Conversion (the “ Plan of Conversion” ) annexed hereto as Exhibit “A”, pursuant to which all the issued and outstanding shares of the common stock of the Corporation will be converted into the sole membership interest in the Converted Entity and the sole shareholder of the Corporation shall become the sole member of the Converted Entity (the “Equity Conversion”);

NOW, THEREFORE, it is

RESOLVED, that the conversion of the Corporation into the Converted Entity, the Plan of Conversion and the Equity Conversion, be, and they hereby are, approved, authorized and adopted in all respects, and that the Chief Executive Officer, President, Chief Operating Officer and Vice Presidents of the Corporation (each, individually, an “Authorized Officer”, and, as to two or more, the “Authorized Officers ”), and each them, be, and each hereby is, authorized, empowered and directed to execute and deliver in the name and on behalf of the Corporation, and under its corporate seal or otherwise, the Plan of Conversion, and such other agreements, instruments, documents, consents, certificates, notices, applications and requests, including, without limitation, a Certificate of Conversion of the Corporation and Certificate of Formation of the Converted Entity for filing with the Secretary of State of the State of California, all in such form and upon such terms and conditions as shall be approved in such Authorized Officer ’s or Authorized Officers’ discretion as being in substantive conformity with the terms and conditions of the Plan of Conversion, and to do or take all such acts, actions and things, and to pay such costs, expenses and taxes, as contemplated by the Plan of Conversion or as in such Authorized Officer’s or Authorized Officers’ discretion DocuSign Envelope ID: 46E52AFD-ECE3-482F-B9E5-E7D8989FA128

Redlands Regular Meeting 03-15-22

374 of 413
may be deemed necessary, desirable or appropriate in connection with, incidental to, in furtherance of or to effectuate the conversion of the Corporation into the Converted Entity;

RESOLVED, that the taking of any action or the execution and delivery of any document authorized by the foregoing resolution in the name and on behalf of the Corporation, including as the Converted Entity, by any Authorized Officer thereof be deemed, and it hereby is authorized and empowered to be deemed, conclusive proof of the approval thereof by the Board of Directors and Shareholder, including in its capacity as the member of the Converted Entity;

AND, RESOLVED, that the authorities hereby conferred shall be deemed retroactive, and any and all acts authorized herein that were performed prior to the passage of these resolutions be, and they hereby are, approved, ratified and confirmed in all respects.

This Written Consent may be executed in several counterparts or in counterpart signature pages, and all so executed shall constit ute one Written Consent, notwithstanding that all of the undersigned are not signatories to the original or the same counterpart or counterpart signature page. A facsimile of a signature to this Written Consent shall be deemed and treated for all purposes of execution to be as valid as an original signature thereto.

[SIGNATURES ON FOLLOWING PAGE.]

DocuSign Envelope ID: 46E52AFD-ECE3-482F-B9E5-E7D8989FA128

Redlands Regular Meeting 03-15-22

375 of 413
IN WITNESS WHEREOF, the undersigned have executed this Written Consent in order to give their consent thereto effective as of the 31st day of January 2022.

DIRECTORS: SOLE SHAREHOLDER:

U.S. HOME CORPORATION,
________________________ a Delaware corporation
Diane Bessette

By: _______________________________
________________________ Name: Mark Sustana
Mark Sustana Title: Vice President
DocuSign Envelope ID: 46E52AFD-ECE3-482F-B9E5-E7D8989FA128

Redlands Regular Meeting 03-15-22

376 of 413

December 27, 2021

City of Redlands
PO Box 3005
Redlands, CA 92373

Attention: Jeanne Donaldson

To Whom It May Concern:

On December 15, 2021, the San Bernardino County Registrar of Voters received a request to provide the number of registered voters residing within proposed Annexation No. 26 to Community Facilities District No. 2004-1 of the City of Redlands.

After examining the voter registration records within the area, the Registrar of Voters certifies the following information as of December 27, 2021:

Registered voters within the area: 0

An invoice for services rendered for this request will be provided later.

If you have any questions, please contact the Registrar of Voters at (909) 387-8300.

Sincerely,

Melissa Eickman
Media Specialist

Registrar of Voters
Bob Page
Registrar of Voters
777 East Rialto Avenue, San Bernardino, CA 92415 | Phone: 909.387.8300 Fax: 909.387.2022

Redlands Regular Meeting 03-15-22

377 of 413
CFD 2004-1 Annexations List
In August 2004 Council approved the establishment of community facilities district (CFD) No. 2004-1, for Tract No. 16408, the Centex tract located at the southwest corner of Fifth Avenue and Wabash Avenue in the City of Redlands. The CFD was developed to cover the ongoing cost of maintenance of street trees, citrus groves landscaping and other appurtenances located along Fifth Avenue and Wabash Avenue.

In May 2006 Council approved Annexation No. 1 (Tract No. 16287) to the CFD, located at Occidental Drive and Crystal Court for the maintenance of landscaping and water quality treatment devices in the open space lots. During this last year, Annexation No. 1 subdivided the properties on site from two lots to twelve lots.

Annexation No. 2 (Tentative Tract No. 16586), located north of I-10 and both sides of the proposed Wabash Street alignment has been on hold since October 2006.

In July 2006 Council approved Annexation No. 3 (Tentative Tract No. 17253) to the CFD, located at the southwest corner of Lugonia Avenue and Church Street for the maintenance of the landscape and the associated irrigation equipment on Lugonia Avenue parkway frontages. This project has not yet begun construction.

In October 2008 Council approved Annexation No. 4 (Parcel Map No. 17353) to the CFD, located at Ford Street and Interstate 10 for the maintenance of the landscape in the median island and the associated irrigation equipment.

In October 2008 Council approved Annexation No. 5 (Commission Review and Approval No. 826) to the CFD, located at California Street and Orange Tree Lane for the maintenance of the landscape in the median island and the associated irrigation equipment on California Street and the parkway frontages along both streets.

Annexation No. 6 (Tract No 14790-1), located adjacent to Sunset Hills Lane, west of Alessandro Road did not receive sufficient votes needed to annex into the CFD in June 2009.

Annexation No. 7 (Parcel 2 of Parcel Map No. 15573), located at the northeast corner of San Bernardino Avenue and Mountain View Avenue, has been on hold since February 2011.

In February 2011 Council approved Annexation No. 8 (Tract No. 16806) to the CFD, located at southeast corner of Pennsylvania Avenue and Texas Street for the maintenance of the landscape and the associated irrigation equipment on Pennsylvania Avenue and Texas Street parkway frontages. This project has not yet begun construction.

In November 2012 Council approved Annexation No. 9 (Parcel Map No, 18208) to the CFD located at the southeast corner of Redlands Boulevard and Nevada Street for the maintenance of landscaping and the associated irrigation equipment on Redlands

Redlands Regular Meeting 03-15-22

378 of 413
Boulevard and Nevada Street parkway frontages and the Redlands Boulevard raised center median.

Annexation No. 10 (Tract No. 18762-1), located at the northeast corner of Orange Street and Lugonia Avenue, has been completed since July 2016. Annexation No. 10 is dormant because the property owners have agreed to be responsible for all landscaping and irrigation efforts themselves; therefore the annexations are not being assessed.

In June 2014 Council approved Annexation No. 11 (Parcel Map No. 19371) to the CFD located at the northwest corner of Lugonia Avenue and Wabash Avenue for the maintenance of landscaping and the associated irrigation equipment on Lugonia Avenue and Wabash Avenue Street parkway frontages. Annexation No. 11 is dormant because the property owners have agreed to be responsible for all landscaping and irrigation efforts themselves; therefore the annexations are not being assessed.

In June 2014 Council approved Annexation No. 12 (Tract Map Nos. 16465 and 16627) to the CFD located at the southwest and southeast corners of Pioneer Avenue and Judson Street, respectively, for the maintenance of landscaping and the associated irrigation equipment on Pioneer Avenue and Judson Street parkway frontages, maintenance of landscaping and water quality treatment devices in the open space lots, and for the maintenance of landscaping and the associated irrigation equipment on the common area lots. Annexation No. 12a (Tract No. 16465) is nearly complete. A 50% assessment is being proposed to establish a reserve fund. Annexation No. 12b was completed in July 2016 and is being assessed. Annexation No. 12c (Tract Map Nos. 18979 and 19975) located east of Tract Map No. 16627 and between Pioneer Avenue and Pennsylvania Avenue was approved by City Council in June 2016. A 50% assessment is being proposed to establish a reserve fund. Annexation No. 12d (Tract Map No. 20079) was approved by Council in May 2018. A 50% assessment is being proposed to establish a reserve fund.

In June 2014 Council approved Annexation No. 13 (Tract Map No. 18882) to the CFD located at the southwest corner of San Bernardino Avenue and Dearborn Street, respectively, for the maintenance of landscaping and the associated irrigation equipment on San Bernardino Avenue and Dearborn Street parkway frontages and for the maintenance of landscaping and the associated irrigation equipment on the common area lots with the exception of Lot B. Annexation No. 13 is dormant because the property owners have agreed to be responsible for all landscaping and irrigation efforts themselves; therefore the annexation is not being assessed.

In September 2015 Council approved Annexation No. 14 (Parcel Map No. 19496) to the CFD located at the northeast corner of California Street and Lugonia Avenue for the maintenance of landscaping and associated irrigation equipment on the California Street center median. The maintenance of landscaping and associated irrigation equipment on California Street and Lugonia Avenue parkway frontages will be maintained by the property owner and will not be assessed.

Redlands Regular Meeting 03-15-22

379 of 413
In December 2017 Council approved Annexation No. 15 (Parcel Map No. 18535-1) to the CFD located at the northwest corner of Eureka Street and Stuart Avenue for the maintenance of street trees, landscaping and irrigation in the rights-of-way and landscape maintenance along the property frontage. Annexation No. 15 will be dormant because the property owners have agreed to be responsible for all landscaping and irrigation efforts themselves; therefore the annexation is not being assessed.

In April 2017 Council approved Annexation No, 16 (Tract Map No. 18988) to the CFD located on the north side of Pioneer Avenue, east of Texas Street for the maintenance of parks, slopes, parkways, median, open space, shade and seating structures, and monuments within and adjacent to said tract.

In July 2017 Council approved Annexation No. 17 (Tract Map No. 17022) to the CFD located at the northeast corner of Pioneer Avenue and Texas Street for the maintenance of slopes, parkways, open space and citrus trees within and adjacent to the tract. This project has not yet begun construction.

In May 2018 Council approved Annexation No. 18 (Parcel Map No. 19465) to the CFD located at the southeast corner of Alabama Street and Park Avenue for the maintenance of street trees, landscaping and irrigation in the rights-of-way and landscape maintenance easement along the property frontage within and in the parcel map. The maintenance of landscaping and associated irrigation equipment on Alabama Street and Park Avenue parkway frontages and landscape maintenance easement will be maintained by the property owner and will not be assessed.

In January 2020 Council approved Annexation No. 19 (Tract Map No.19942) to the CFD located at the northeast corner of Wabash Avenue and Sylvan Boulevard for the maintenance of parks, slopes, parkways, and open space within and adjacent to the tract.

In May 2019 Council approved Annexation No. 20 (Tract Map No. 19956) to the CFD located at the southeast corner of Wabash Avenue and Citrus Avenue for the maintenance of slopes, parkways, and open space within and adjacent to the tract.

In September 2019 City Council approved Annexation No. 21 (Tract Map No. 20126) to the CFD located on the north side of Lugonia Avenue, south of Pennsylvania Avenue, east of Judson Street for the maintenance of parks, slopes, parkways, open space, and citrus groves within and adjacent to the tract.

In September 2020 City Council approved Annexation No. 22 (Parcel Map No. 19981) to the CFD located at the northwest corner of Alabama Street and Park Avenue for the maintenance of parkways.

In April 2021 City Council approved Annexation No. 23 (Parcel Map No. 18536) to the CFD located at the southwest Corner of Stuart Avenue and Eureka Street for maintenance of parkways.

Redlands Regular Meeting 03-15-22

380 of 413
In January 2021 City Council approved Annexation No. 24 (CUP No. 1129) to the CFD located at the southeast corner of Eureka Street and Stuart Avenue for the maintenance of parkways.

Redlands Regular Meeting 03-15-22

381 of 413
City Council Meeting L. 1.

DATE: 03/15/2022
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of an agreement for professional auditing services with The Pun Group to provide auditing services for fiscal years ending June 30, 2022, 2023 and 2024 with the option to extend to 2025 and 2026 with a total agreement amount not-to-exceed $318,549 (Management Services/Finance Director Garcia)
MOTION(S):

I move to approve the agreement for Professional Auditing Services with The Pun Group for a term of three years with the option to extend for two optional one-year terms.

RECOMMENDATION:

Staff recommends the approval of the Agreement for Professional Auditing Services with The Pun Group for fiscal years ending June 30, 2022, 2023 and 2024 with an option to extend for 2025 and 2026 with a total agreement amount not-to-exceed $318,549.

DISCUSSION:

The Pun Group was one of seven firms that responded to the City’s request for proposal for Professional Auditing Services bid that was posted on December 20, 2021. Written proposals were evaluated and ranked on a 100 point system.

The Pun Group was chosen based on the firms’ qualifications, experience, and responsiveness to the requirements of the city’s request for proposal for Professional Auditing Services.

Other factors included, overall evaluation points, as well as a very impressive proposal that highlighted the firm’s expertise in the audit of local governments, The Pun Group was selected as the firm most qualified to perform the services requested by the city in its request for Proposal for Professional Auditing Services. The Pun Group included in its proposal the preparation of the State

Redlands Regular Meeting 03-15-22

382 of 413
Controller’s Office Financial Transaction Report, single audit report, management letter of reportable conditions, and financial statement audit for the Annual Comprehensive Financial Report. See financial breakdown below.

FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26
Requested Services
City Audit and Related
Reports $51,500 $53,045 $54,636 $56,275 $57,964
Single Audit - 1 Major
Program 5,000 5,150 5,305 5,464 5,628
GANN 500 515 530 546 563
State Controller's Reports
(City) 3,000 3,090 3,183 3,278 3,377
Total $60,000 $61,800 $63,654 $65,564 $67,531
ALTERNATIVES:

Do not approve the Agreement for Professional Audit Services with The Pun Group.

STRATEGIC PLAN:

Not applicable.

SUBMITTED BY:

Danielle Garcia, Management Services/Finance Director
RECOMMENDED BY:

Charles M. Duggan, City Manager
REVIEWED BY:

Daniel J. McHugh, City Attorney
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
Dana Abramovitz-Daniel, Procurement Manager
PREPARED BY:

Faith Nobles, Management Analyst
Fiscal Impact
Fiscal Year: 2021-2022
Revenue Generating: No

Redlands Regular Meeting 03-15-22

383 of 413
Revenue Generating: No
Appropriation Required Y/N: No
Amount: 60,000
Budgeted Y/N: Y
Account No.: 101130
Discussion:

The Pun Group will perform Professional Audit Services for the City of Redlands for based upon the following fee schedule:

FY2021-22 $60,000.00
FY2022-23 $61,800.00
FY2023-24 $63,654.00
FY2024-25 $65,564.00 (optional)
FY2025-26 $67,531.00 (optional)
The total cost of auditing services over the five-year period will be $318,549.00.

Attachments
Firms Submitting Proposals
Auditing Services Agreement

Redlands Regular Meeting 03-15-22

384 of 413
Auditing Services – Firms Submitting Proposals

1. Badawi and Associates, CPA

2. Eadie and Payne, LLP

3. Rogers, Anderson, Malody & Scott

4. The Pun Group

5. Van Lant & Frankhel, LLP

6. Moss, Levy & Hartzheim

7. Lance, Soll & Lunghard, LLP

Redlands Regular Meeting 03-15-22

385 of 413
1 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn

AGREEMENT TO PERFORM PROFESSIONAL SERVICES

This agreement for the provision of professional auditing services (“Agreement”) is made and entered in this 15th day of March, 2022 (“Effective Date”), by and between the City of Redlands, a municipal corporat ion (“City ”) and The Pun Group, LLP , a California limited liability partnership (“Consultant”). City and Consultant are sometimes individually referred to herein as a “Party” and, together, as the “Parties.” In consideration of the mutual promises contained herein, City and Consultant agree as follows:

ARTICLE 1 – ENGAGEMENT OF CONSULTANT

1.1 City hereby engages Consultant to provide professional auditing services for City (the “Services”).

1.2 The Services shall be performed by Consultant in a professional manner, and Consultant represents that it has the skill and the professional expertise necessary to provide the Services to City at a level of competency presently maintained by other practicing professional consultants in the industry providing like and similar types of Services.

ARTICLE 2 – SERVICES OF CONSULTANT

2.1 The Servi ces that Consultant shall perform are more particularly described in Exhibit “A,” titled “Scope of Servi ces,” which is attached hereto and incorporated herein by this reference. Consultant shall perform and complete the Services in a prompt and diligent manner.

2.2 Consultant shall comply with applicable federal, state and local laws and regulati ons in the performance of this A greement including, but not limited to , any applicable State prevailing wage laws.

ARTICLE 3 – RESPONSIBILITIES OF CITY

3.1 City designates Danielle Garcia, Management Services/Finance Director , as City’s representative with respect to performance of the Services, and such person shall have the authority to transmit instructions, receive information, interpret and define City’s policies and decisions with respect to performance of the Services.

ARTICLE 4 – PERFORMANCE OF SERVICES

4.1 The initial term of this Agreement shall be for a period of three (3) years from the Effective Date of this Agreement (the “Initial Term”). The City shall have the option to extend the Initial Term of this Agreement by two (2), additional, one-year terms (each, an “Extended Term”), on the same terms and conditions hereof, by providing written not ice to Consultant at least thirty (30) days prior to the expiration of the Initial Term or any Extended Term. The Initial Term and any Extended Terms are collectively defined to herein as the “Term” of this Agreement.

Redlands Regular Meeting 03-15-22

386 of 413
2 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn

4.2 If Consultant’s Services include deliverable electronic visual presentation materials, such materials shall be delivered in a form, and made available to Cit y, consistent with City Council-adopted policy for the same. It shall be the obligation of Consultant to obtain a copy of such policy from City staff.

ARTICLE 5 – PAYMENTS TO CONSULTANT

5.1 The compensation for Consultant ’s performance of the Services shall not exceed the amount of one hundred eighty five thousand four hundred fifty four dollars ($185,454) for the Services provided during the Initial Term. Should this Agreement be extended, the compensation for Consultant’s performance for the Services shall not exceed the amount of sixty five thousand five hundred sixty four dollars ($65,564) for the first Extended Term; and sixty sev en thousand five hundred thirty one dollars ($67,531) for the second Extended Term, bringing the total possible amount of compensation to a not -to-exceed amount of three hundred thousand five hundred forty nine dollars ($318,549). For the Initial Term and each Extended Term, City shall pay Consultant on a time and materials basis up to the not to not -to-exceed amount in accordance with the rates specified in Exhibit “B,” titled “Cost Proposal,” which is attached hereto and incorporated herein by this reference.

5.2 Consultant shall submit monthly invoices to City describing the Services performed during the preceding month. Consultant’s invoices shall include a brief description of the Services performed, the dates the Services were performed, the number of ho urs spent and by whom, and a description of reimbursable expenses related to the Services. City shall pay Consultant no later than thirty (30) days after receipt and approval by City of Consultant’s invoice.

5.3 Any n otice or other communication required, or which may be given, pursuant to this Agreement, shall be in writing. Any such notice shall be deemed delivered (i) on the date of delivery in person; (ii) five (5) days after deposit in first class registered mail, with return receipt requested; (iii) on the actual delivery date if deposited with an overnight courier; or (iv) on the date sent by facsimile or electronic mail transmission (including PDF), if confirmed with a copy sent contemporaneously by first class, certified, registered or express mail ; in each case properly posted and fully prepaid to the appropriate address set forth below, or such other address as a Party may provide notice in accordance with this section:

CITY: CONSULTANT:

City Clerk Kenneth H. Pun
City of Redlands The Pun Group
35 Cajon Street 200 E. Sandpointe Avenue, Suite 600
P.O. Box 3005 (mailing) Santa Ana, CA 92707
Redlands, CA 92373 [email protected]
[email protected] 949-777-8801
Phone: (909) 798-7531 949-777-8850

Redlands Regular Meeting 03-15-22

387 of 413
3 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn ARTICLE 6 – INSURANCE AND INDEMNIFICATION

6.1 The following insurance coverage required by this Agreement shall be maintained by Consultant for the duration of its performance of the Services. Consultant shall not perform any Services unless and until the required insurance listed below is obtained by Consultant. Consultant shall provide City with certificates of insurance and endorsements evidencing such insurance prior to commencement of the Services. Insurance policies shall include a provision prohibiting cancellation or modification of the policy except upon thirty (30) days prior written notice to City.

A. Workers’ Compensation and Employer’s Liability insurance in the amount that meets statutory requirements with an insurance carrier acceptable to City, or certification to City that Consultant is self -insured or exempt from the workers’ compensation laws of the State of California. Consultant shall execute and provide City with Exhibit “C,” titled “Workers’ Compensation Insurance Certification,” which is attached hereto and incorporated herein by this reference, prior to performance of the Services.

B. Comprehensive General L iability insurance with carriers acceptable to City in the minimum amount of One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) aggregate , for public liability, property damage and personal injury is required. City shall be named as an additional insured and such insurance shall be primary and non- contributing to any insurance or self -insurance maintained by City.

C. Consultant shall secure and maintain professional liability insurance throughout the term of this Agreement in the amount of One Million Dollars ($1,000,000) per claim made.

D. Business Auto L iability coverage, with minimum limits of One Million Dollars ($1,000,000) per occurrence, combined single limit bodily injury liability and property damage liability. This coverage shall include all Consultant owned vehicles used in connection with Consultant’s provision of the Services, hired and non-owned vehicles, and employee non-ownership vehicles. City shall be named as an additional insured and such insurance shall be primary and non- contributing to any insurance or self-insurance maintained by City.

E. Consultant is expressly prohibited from assigning or subcontracting any of the Services without the prior written consent of City. In the event of mutual agreement by the Parties to assign or subcontract a portion of the Services, Consultant shall add such assignee or subcontractor as an additional insured to the insurance policies required hereby and provide City with the insurance endorsements prior to any Services being performed by the assignee or subcontractor.

6.2 Consultant shall defend, indemnify and hold harmless City and its elected and appointed officials, employees and agents from and against any and all claims, losses or liability, including attorneys’ fees, arising from injury or death to persons or damage to property

Redlands Regular Meeting 03-15-22

388 of 413
4 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn occasioned by any negligent act or omission by, or the willful misconduct of, Consultant, or its officers, employees and agents in performing the Services.

ARTICLE 7 – CONFLICTS OF INTEREST

7.1 Consultant covenants and represents that it does not have any investment or interest in any real property that may be the subject of this Agreement or any other source of income, interest in real property or investment that would be affected in any manner or degree by the performance of Consultant’s Services. Consultant further covenants and represents that in the performance of its duties hereunder, no person having any such interest shall perform any Services under this Agreement.

7.2 Consultant agrees it is not a designated employee within the meaning of the Political Reform Act because Consultant:

A. Does not make a governmental decision whether to:

(i) approve a rate, rule or regulation, or adopt or enforce a City law; (ii) issue, deny, suspend or revoke any City permit, license, application, certification, approval, order or similar authorization or entitlement; (iii) authorize City to enter into, m odify or renew a contract; (iv) grant City approval to a contract that requires City approval and to which City is a party, or to the specifications for such a contract; (v) grant City approval to a plan, design, report, study or similar item; (vi) adopt, or grant City approval of, policies, standards or guidelines for City or for any subdivision thereof.

B. Does not serve in a staff capacity with City and in that capacity, participate in making a governmental decision or otherwise perform the same or subs tantially the same duties for City that would otherwise be performed by an individual holding a position specified in City’s Conflict of Interest Code under Government Code section 87302.

7.3 In the event City determines that Consultant must disclose its financial interests, Consultant shall complete and file a Fair Political Practices Commission Form 700, Statement of Economic Interests , with the City Clerk’s office pursuant to the written instructions provided by the City Clerk.

ARTICLE 8 – GENERAL CONSIDERATIONS

8.1 In the event any action is commenced to enforce or interpret any of the terms or conditions of this Agreement the prevailing Party shall, in addition to any costs and other relief, be entitled to the recovery of its reasonable attorneys’ fees, incl uding fees for the use of in-house counsel by a Party.

Redlands Regular Meeting 03-15-22

389 of 413
5 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn

8.2 Consultant shall not assign any of the Services, except with the prior written approval of City and in s trict compliance with the terms and conditions of this Agreement. Any assignment or attempted as signment without such prior written consent may, in the sole discretion of City, result in City’s immediate termination of this Agreement.

8.3 Consultant is for all purposes under this Agreement an independent contractor and shall perform the Services as an i ndependent contractor. Neither City nor any its agents shall have control over the conduct of Consultant or Consultant’s employees, except as herein set forth. Consultant shall supply all necessary tools and instrumentalities required to perform the Servic es. Assigned personnel employed by Consultant are for its account only, and in no event shall Consultant or personnel retained by it be deemed to have been employed by City or engaged by City for the account of, or on behalf of City. Consultant shall have no authority, express or implied, to act on behalf of City in any capacity whatsoever as an agent, nor shall Consultant have any authority, express or implied, to bind City to any obligation.

8.4 This Agreement may be terminated by City, in its sole discretio n, by providing not less than five (5) days prior written notice to Consultant of City’s intent to terminate. If this Agreement is terminated by City, an adjustment to Consultant’s compensation shall be made, but (1) no amount shall be allowed for anticipated profit or unperformed S ervices, and (2) any payment du e Consultant at the time of termination may be adjusted to the extent of any additional costs to City occasioned by any default by Consultant. Upon receipt of a termination notice , Consultant shall immediately discontinue its provision of the Services and, within five (5) days of the date of the termination notice, deliver or otherwise make available to City, copies (in both hard copy and electronic form, where applicable) of project related data, design calculations, drawings, specifications, reports, estimates, summaries and such other information and materials as may have been accumulated by Consultant in performing the Services. Consultant shall be compensated on a pro-rata basis for Services completed up to the date of termination.

8.5 Consultant shall maintain books, ledgers, invoices , accounts and other records and documents evidencing costs and expenses related to the Services for a period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant pursuant to this Agreement. Such books shall be available at reasonable times for examination by City at the office of Consultant.

8.6 This Agreement, including the Exhibits incorporated herein by reference, represents the entire agreement and understanding between the Parties as to the matters contained herein, and any prior negotiations, written proposals or verbal agreements relating to such matters are superseded by this Agreement. Except as otherwise prov ided for herein, an y amendment to this Agreement shall be in writing, approved by City and signed by City and Consultant.

8.7 This Agreement shall be governed by and construed in accordance with the laws of the State of California , without regard to its conflicts of laws provisions. The Parties agree that all actions or proceedings arising in connection with this Agreement shall be tried

Redlands Regular Meeting 03-15-22

390 of 413
6 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn and litigated only in the state courts located in San Bernardino County, California, and the federal courts located in Riverside County, California.

8.8 If one or more of the sentences, clauses, paragraphs or sections contained in this Agreement is declared invalid, void or unenforceable by a court of competent jurisdiction, the same shall be deemed severable from the remainder of this Agreement and shall not affect, impair or invalidate the remaining sentences, clauses, paragraphs or sections contained herein, unless to do so would deprive a Party of a material benefit of its bargain under this Agreement.

IN WITNESS WHEREOF, duly authorized representatives of City and Consultant have signed in confirmation of this Agreement.

CITY OF REDLANDS THE PUN GROUP, LLP

By: ___________________________ By: _____________________________ Paul T. Barich, Mayor Kenneth H. Pun, Managing Partner

ATTEST:

___________________________
Jeanne Donaldson, City Clerk

Redlands Regular Meeting 03-15-22

391 of 413
7 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn EXHIBIT "A"

SCOPE OF SERVICES

Provided By Client (PBC) Lists: They will be provided for both interim and final audits according to an agreed -upon timeline between the engagement team and the City in order to be reasonably prepared for a field audit. The engagement team will meet with the City’s management during the initial planning stage to discuss audit schedules and review prior year audit findings (if any). We will deliver a list of all documents to be provided by the City’s staff.

Once such materials are agreed upon by the engagement team and City’s finance personnel, no other schedules will be requested unless new information comes to light in the course of test work.

Attendance at Meetings and Hearings: The engagement team will participate in as many meetings with staff as needed to perform the work scope tasks, present the audit plan prior to beginning fieldwork, and discuss the draft audit reports. The team will attend public meetings to present and discuss its findings and recommendations. Once all issues of discussion are resolved, the completed Financial Reports, Single Audit report (if applicable), and other reports will be delivered to the City according to the agreed-upon schedule.

Proposed Audit Adjustments: All proposed adjusting journal entries by the Firm will be discussed and explained in a timely manner with the designated Finance Department personnel.

Such proposed adjustments will be in a format that shows the lowest level of posting detail needed for data entry in the general ledger systems.

Supplemental Reports, Audits, or Agreed -Upon Procedures: Other services, such as agreed - upon procedures, may be deemed necessary. These services will be performed at agreed -upon rates and will be added in a written agreement before commencing audit work. The Firm and the City of Redlands will discuss and approve the scope and associated costs of these tasks.

Advice and Consultation: Will be provided throughout the year on matters relating to accounting and financial reporting. Such services do not include any task that entails significant research or a formal report.

GASB Implementation: The Firm will provide technical assistance and training in the implementation of applicable GASB pronouncements not yet in effect. We have a dedicated partner, Mr. Gary Caporicci, who will be responsible for providing advice and consultation for the implementation of these new standards. The Firm will advise the City on the applicability o f accounting and reporting standards and other accounting issues and provide guidance on new note disclosures, GASB implementations, and other reporting requirements. We will also provide training, resources, and information on topics relevant to the City’s financial reporting and operations. (Based on the scope, additional charges may apply.)

Report of all Irregularities and Illegal Acts: The Firm will make an immediate written report of all irregularities and illegal acts or indications of illegal action s of which we may become aware to the City Manager, Director of Management Services/Finance, and City Attorney.

Redlands Regular Meeting 03-15-22

392 of 413
8 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn The engagement team will also make all communications to the City required by the audit standards under which the engagement is performed. Those communications include, but are not limited to:

A. The auditor’s responsibility under generally accepted auditing standards.

B. Significant accounting policies.

C. Management judgment and accounting estimates.

D. Significant audit adjustments.

E. Other information in documents containing audited financial statements.

F. Disagreements with management.

G. Management consultation with other accountants.

H. Major issues discussed with management prior to retention.

I. Difficulties encountered in performing the audit.

Working Paper Re tention and Access to Working Papers: The Firm will retain, at its own expense, all working papers and reports for a minimum of seven (7) years, unless the City of Redlands notifies the Firm in writing of the need to extend the retention period. The Firm w ill make working papers available to the City or any government agencies included in the audit of federal grants.

Also, we will comply with reasonable requests from successor auditors and allow them to review working papers that relate to matters of continuing accounting significance.

Methodology and Segmentation of Engagement

The Firm’s audit approach consists of six phases: Engagement Acceptance and General Planning, Planning and Internal Control Evaluation, Fieldwork, Post Fieldwork, Report Preparation and Review, and Final Production.

1. Engagement Acceptance and General Planning: The engagement partner and manager will meet with City’s management to obtain an update on current City policies and procedures, help identify risk areas and new operations , and establish any specific requirements they may have.

Our team will work on the identification of unique transactions, implementation of new GASB pronouncements, and develop the audit work plan for the engagement. (Proposed Timeline:
around April/May)

2. Planning and Internal Control Evaluation: The engagement team, including the engagement partner, will assess accounting policies adopted by the City in order to obtain an understanding of its structure and its operating environment. Also, our team will review internal controls on all significant transaction classes, perform walkthroughs and/or tests of internal controls, perform preliminary analytical procedures, develop initial risk assessment, evaluate Single Audit compliance, identify any audit issues, and prepare confirmation correspondence. The engagement team and City’s Management will establish expectations, including responsibilities and assignments for the year-end fieldwork, and will hold a progress status meeting at the end of the interim phase. (Proposed Timeline: by June)

3. Fieldwork: The engagement team, including the engagement partner, will conduct audit procedures on account balances in the general ledger, finish confirmation procedures, perform

Redlands Regular Meeting 03-15-22

393 of 413
9 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn data analysis using our AI tools, search f or unrecorded liabilities, perform substantial analytical review procedures, complete work on compliance with Federal Assistance, and conclude fieldwork. The engagement team and City’s Management will hold an exit conference at year - end. Periodic update me etings will be held to communicate audit progress to management. (Proposed Timeline: September)

4. Post Fieldwork: During the phase, the engagement team, including the engagement partner, will review all documents and evaluate commitments and contingencie s. The team will perform an assessment of the going concern and jointly plan for the next steps. (Proposed Timeline:

September – October)

5. Report Preparation and Review: The Firm will review and prepare audit reports and perform quality control procedures following the Quality Control Standards issued by the AICPA. We will also examine reports for compliance with GFOA reporting guidelines at no additional cost.

Any comments will be recorded in a letter to management. At the City’s request, the engagement partner and manager will present the audit to City’s Management and other governing bodies. (Proposed Timeline: mid to late November)

6. Final Production: The final phase of our approach entails obtaining the management representation letter and final fi nancial statement report, which may include a final presentation to the City’s Management and other governing bodies (if applicable). (Proposed Timeline: mid- December, prior to City close for holidays))

The Firm will complete the audit fieldwork and issue all reports within the established timeframe, assuming no internal circumstances within the City causes delays in the audit.

Sample Size and the Extent to Which Statistical Sampling is to be Used in this Engagement In our audit approach, random and stati stical sampling is used in conjunction with our skilled judgment and knowledge of each situation. When designing an audit sample, our auditors consider the purpose of the audit procedure and the characteristics of the population from which the sample will be drawn. We determine a sample size sufficient to reduce sampling risk to an acceptably low level and select items for such a task in a way that we can reasonably expect it to be representative of the relevant sample and likely to provide the auditor with a reasonable basis for conclusions about the population.

Enhancing Auditing Quality with Artificial Intelligence There are plenty of challenges with established audit practices. Outdated CAAT tools, sampling practices, and the explosive growth of big dat a are some of the examples, and they all present significant barriers to detecting anomalies, intentional or otherwise, in financial data. The Pun Group deploys a comprehensive, risk- based approach, complemented by using MindBridge™'s Artificial Intelligen ce Platform, to conduct our audit. Through this tool, we can seamlessly analyze thousands and thousands of financial and operating data and records, identifying and cataloging significant risks in mere seconds.

The AI Auditor platform works by our side, augmenting our capacity to detect errors or fraud in the collected data not only by analyzing the entire set but by cross -correlating dozens of testing criteria against pre-established data points, and presenting us with a view of every user, vendor,

Redlands Regular Meeting 03-15-22

394 of 413
10 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn and transaction, by risk. All are happening within moments of ingesting analyzed data, which is something standard audit procedures simply cannot accomplish.

We utilize these tools to allow our audit team to increase efficiency in the audit process, to enhance the existing quality of our work, to provide directed testing in areas subject to the highest risk, and to quickly assimilate large amounts of data your staff would typically be asked to gather. The tools also help us to meet our professional requirements regarding fraud and internal control, allowing us to:

• Run Benford’s analysis to check for fraud in transactions. • Increase the value of audit findings with complete, 100% data coverage. • Isolate risk and control issues before they impact your operations. • Improve productivity by automating procedures and eliminating manual tasks. • Conduct more direct, efficient, and effective audits to improve overall service quality.

Our engagement team easily imports data in a secure environment from the City’s financial software and extracts useful data for testing and analytical procedures particular to the following areas:
• Successful Fraud Test • Kickback or Conflict-of- Interest Schemes • Questionable Invoices • Dormant Account Schemes
• Phantom Vendor Schemes • Money Laundering Schemes

Type and Extent of Analytical Procedures to be used in the Engagement

Analytical procedures are one of many financial audit processes that help an auditor understand the client’s operation and changes in the environment and identify potential risk areas to plan other audit procedures. Such procedures include a comparison of financial information on prior periods, budget, forecast, and industry benchmark. We use trend and ratio analysis to identify any uncertain or unusual events. To perform these analyses, our Firm surveys cities and counties and develops benchmarks on specific vital financial indicators, such as the cost of services to tax revenues ratios, average general fund balance, capital assets, debt -to-capital, general fund unassigned fund balance to total general fund expenditures, etc. Our engagement members have extensive experience in successfully implanting analytical procedures to the City’s benefit.

Our analytical procedures process is performed during three stages of audit: (a) at the start, (b) in the middle, and
(c) at the end. These three stages are risk assessment procedures, substantive analytical procedures, and final analytical procedures:

• Risk assessment procedures are used to assist the auditor in understanding the business better and to plan the nature, timing, and extent of audit procedures. • Substantive analytical procedures are used to obtain evidential matters about particular assertions related to the account balances or classes of transactions. During the interim phase, our engagement team will set up expectations for the year -to-date results and balances and compare them with budgeted and prior -year amounts. This process allows us to forecast year -end amounts, reducing the workload during the year -end phase and allowing us to focus on areas of concern.

Redlands Regular Meeting 03-15-22

395 of 413
11 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn • Final analytical procedures are used as an overall review of the financial information in the last review stage of the audit. The Engagement Partner(s) and Manager(s) will perform a high- level analytical analysis of the financial information, comparing its data both quantitatively and qualitatively to ensure the amounts are fairly presented in all material respect in the financial statements.

Approach to be Taken to Gain and Document an Understanding of the Internal Control Structure

Audit risk assessment is established by an internal control review, combined with the engagement team’s understanding of the City’s operations and accounting software. Using the Committee of Sponsoring Organizations (COSO) Framework, staff members will evaluate the City’s processes and identify any control deficiencies. These diagnostic review procedures allow the engagement team to assess the City’s systems and controls and to provide constructive feedback to management.

During our initial planning phase of the audit, our engagement team, including the engagement Partner and Manager, will obtain an understanding of the entity and its environment. It is an essential aspect of performing an audit under generally accepted aud iting standards. That understanding establishes a frame of reference within which the auditor plans the procedures and exercises professional judgment about assessing risks of material misstatement of the financial statements and responding to those risks throughout the examination.

During the interim phase of the audit, our engagement team will perform a walkthrough of all significant accounting systems, including processes for financial reporting, revenue recognition and cash receipts, purchasing/contract management and cash disbursements, payroll, and related liabilities, and others. Our auditors will obtain the written policies and procedures, inquiring accounting personnel, and document the process in either a flowchart or narrative summary format. Aft er gaining an understanding of the accounting and internal control systems, our auditor will make a preliminary assessment of control risk, at the assertion level, for each material account balance or class of transactions.

The form and extent of this documentation are influenced by the size and complexity of the entity and the nature of its accounting and internal control systems. Generally, the more complex the entity’s accounting and internal control systems and the more extensive the auditor’s procedures, the broader our documentation will need to be.

Approach to be Taken in Determining Laws and Regulations that Will be Subject to Audit Test Work

The Firm stays continually up to date with audit requirements —including new regulations, compliance supple ments, state guidelines, and related contracts —to ensure that we conduct audits under applicable laws and regulations. We test transactions for compliance with the Single Audit Act, California Government Code, GANN Appropriations Limit, provisions of appli cable grant guidelines, requirements of local measures, and others.

For example, the Single Audit Act requires that we determine which grants to include in our audit and select transactions from those grants for detailed testing. While most items will be

Redlands Regular Meeting 03-15-22

396 of 413
12 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn tested as part of the Interim phase, we cannot determine which grants will be selected for the Single Audit until the year-end/fieldwork stage of the audit.

Our compliance audits of cash, investments, debt covenants, and other areas will be performed following the California Government Code, which has many provisions and regulations covering investments.

Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance

To test compliance, we will follow the AICPA’s Audit Sampling Conside rations of Uniform Guidance Compliance Audits. We will select an appropriate sample size based on our professional judgment and knowledge. Any deviations from control and compliance requirements will be documented.

Identification of Anticipated Potential Audit Problems

While we do not expect any problems with the audit, we will carefully investigate and monitor the following relevant accounting issues:

Investments:

• Compliance with GASB 31 and GASB 34
• Authorization and approval process for City investments • Controls to assure City’s compliance with investment limitations and types of specific investments
• Monitoring by the City of its investments

Financial Reporting:
• Compliance with current reporting and disclosure requirements issued by GASB • Compliance with the various GASBs in effect
• Perform valuations of OPEB benefits to determine the liability for all benefits promised to active, retired, and inactive plan members as of each valuation date • Compliance with Governmental Accounting Standards Board (GASB) Statements 74 and 75 • Compliance with infrastructure obligations and regulatory provisions

Internal Control Structure:

• City’s internal control functions and compliance with proper internal control philosophies • Computer-system processes and controls, and adequacy of the control environment

We cannot speculate at this time on the contents of the auditor’s reports. However, we expect to be able to discuss the tentative content of the auditor’s reports well in advance of the issuance of such reports

Redlands Regular Meeting 03-15-22

397 of 413
13 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn EXHIBIT "B"

COST PROPOSAL

Total All-Inclusive Maximum Price

Our proposed fees (1) (2) for Professional Auditing Services for the fiscal years ending June 30, 2022 through June 30, 2024 with an option to extend for two (2) subsequent fiscal years, are as follows:

(1) Single Audit fees based on one (1) major program. The fee to audit additional major programs will be $5,000 each. The number of programs determined to be “major” will be based on OMB Uniform Guidance. The Engagement Team will discuss this with the City of Redlands’s Management before starting Single Audit work.

(2) Services related to the implementation of GASB 87, Leases , and Implementation of Guide No. 2019- 3, Leases may require additional charges. The Engagement Team will discuss details with the City of Redlands’s Management before starting GASB 87 implementation work.

FY2021-22 FY2022-23 FY2023-24 FY2024-25 FY2025-26
Requested Services
City Audit and Related Reports $51,500 $53,045 $54,636 $56,275 $57,964 Single Audit - 1 Major Program 5,000 5,150 5,305 5,464 5,628 GANN 500 515 530 546 563
State Controller's Reports (City) 3,000 3,090 3,183 3,278 3,377 Total $60,000 $61,800 $63,654 $65,564 $67,531

Redlands Regular Meeting 03-15-22

398 of 413
14 L:\ca\djm\Agreements\The Pun Group Agreement.PS-1.1.FY21-0081.doc.jn EXHIBIT "C"
WORKERS’ COMPENSATION INSURANCE CERTIFICATION

Every employer, except the State, shall secure the payment of compensation in one or more of the following ways:

(a) By being insured against liability to pay compensation by one or more insurer s duly authorized to write compensation insurance in this State. (b) By securing from the Director of Industrial Relations, a certificate of consent to self-insure, either as an individual employer , or as one employer in a group of employers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self -insure and to pay any compensation that may become due to his or her employees.

CHECK ONE

_____I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for Workers’ Compensation or to undertake self - insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of the work and activities required or permitted under this Agreement. (Labor Code §1861).

_____I affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers’ compensation laws of California. However, a t any time, if I employ any person such that I become subject to the workers’ compensation laws of California, immediately I shall provide the City with a certificate of consent to self -insure, or a certification of workers’ compensation insurance.

I certify under penalty of perjury under the laws of the State of California that the information and representations made in this certificate are true and correct.

THE PUN GROUP, LLP

By: Date: ___________________
Kenneth H. Pun, Managing Partner

Redlands Regular Meeting 03-15-22

399 of 413
City Council Meeting L. 2.

DATE: 03/15/2022
TO: Honorable Mayor and City Council Members
SUBJECT: Consideration of a contract with R-Dependable Construction Inc. in the amount of $888,800.00 for the 2021 CDBG Joslyn Center Renovation Project No.FCS10252021ER, designate $164,551.27 from the Parks and Recreation category of the Nevada Palmetto Grove Proceeds, approve an additional appropriation in the amount of $563,695.49, and determine that the project is exempt from environmental review pursuant to Section 15061(b)(3) of the State's guidelines implementing the California Environmental Quality Act (Assistant City Manager Boatman)
MOTION(S):

If the City Council determines that staff's recommendations are appropriate, the following motions are provided:

I move that the City Council determine approval of the non-professional services agreement with R-Dependable Construction Inc. is exempt from environmental review pursuant to Section 15061(b)(3) of the State's guidelines implementing the California Environmental Quality Act; and

1. I move that the City Council designate $164,551.27 from the Parks and Recreation category of the Nevada Palmetto Grove Proceeds; and

2. I move that the City Council approve an additional appropriation of $563,695.49; and

3. I move that the City Council approve an award of contract to R-Dependable Construction Inc. in the amount of $888,800 for the 2021 CDBG Joslyn Center Renovation Project No. FCS10252021ER.

4. Redlands Regular Meeting 03-15-22

400 of 413
RECOMMENDATION:

COMMISSION RECOMMENDATION
On February 10, 2022, the Parks and Recreation Advisory Commission voted unanimously to recommend to City Council the use of Nevada-Palmetto Grove proceeds in the amount of $258,493.27 to fund the remaining portion of Joslyn Center Renovation Project.

STAFF RECOMMENDATION
Staff recommends that the City Council approve an award of contract to R-Dependable Construction in the amount of $888,800.00 for the 2021 CDBG Joslyn Center Renovation Project No.FCS10252021ER which consists of the construction of a commercial kitchen, renovation of existing restroom facilities, installation of a grease interceptor, minor site improvements, selective demolition, connection to existing utilities, structural shoring, roof equipment replacement and roof repair, designate $164,551.27 from the Parks and Recreation category of the Nevada Palmetto Grove Proceeds, approve an additional appropriation in the amount of $563,695.49, and determine that the project is exempt from environmental review pursuant to Section 15061(b)(3) of the State's guidelines implementing the California Environmental Quality Act.

DISCUSSION:

This project started in 2017 as a commercial kitchen remodel and is also listed on the Parks and Recreation Commission list of priority projects. A combination of County funds and City funds was secured for this project; however, when the project was put out to bid the bids received significantly exceeded funds available and the project was delayed. Since this time, staff has worked with the County to obtain additional funding for the project. Although the original intent of this project began as a kitchen remodel, the project was expanded to include a host of additional much-needed upgrades. The project now includes complete bathroom renovations, installation of additional fixtures, ADA upgrades to the parking areas, commercial-grade kitchen remodel, installation of a grease interceptor, minor site improvements, roof equipment replacement and roof repair. Plans have been revised accordingly and subsequently approved by the City and County.

Improvements included within this project scope are necessary to meet requirements and compliance with the Federal Americans with Disabilities Act and the California Building Code. In addition, the kitchen renovation and expansion portion of the project is necessary to meet the San Bernardino County Health Department regulations for food preparation and handling.

Furthermore, this project will provide a greater efficiency in food preparation and

Redlands Regular Meeting 03-15-22

401 of 413
capacity for daily meals within our current programs such as Meals on Wheels and the Family Services Association's program. These daily meal services combined currently provide 120 meals a day to our senior community. With the renovations included in this project, these programs will be able to expand and become more efficient. These renovations will also open the door for opportunities for future programs and events to assist in expanding the services to the City's senior community.

On December 20, 2021, the City received three bids for the Joslyn Senior Center Kitchen Remodel. Staff reviewed the bids and identified R-Dependable Construction Inc. as the lowest responsive bidder. This project, if funded will provide commercial kitchen, ADA upgrades, renovation of existing restroom facilities, installation of a grease interceptor, minor site improvements, selective demolition, connection to existing utilities, structural shoring, roof equipment replacement and roof repair. On February 24, 2022 the City received a letter from R-Dependable Construction Inc. requesting a 10% increase to the contract amount as a result of increasing subcontractors’ and material supplier’s prices since the opening of the bid. The additional cost would result in a total of $888,800.00 for the project with R-Depndable Construction Inc. remaining as the lowest responsive bidder.

BID OPENING REPORT SUMMARY
Bidder Bid Schedule
Total Price

1. R-Dependable Construction Inc., San Bernardino, CA $808,000.00

2. Corner Keystone Construction Corp., Walnut, CA $1,177,000.00

3. MLC Constructors, Corona, CA $1,265,823.00
ALTERNATIVES:

The City Council may elect to not approve the award of contract and direct staff accordingly.

STRATEGIC PLAN:

Focus Area C: Infrastructure
SUBMITTED BY:

Chris Boatman, Assistant City Manager
RECOMMENDED BY:

Charles M. Duggan Jr., City Manager
REVIEWED BY:

Daniel J. McHugh, City Attorney
Janice McConnell, Assistant City Manager

Redlands Regular Meeting 03-15-22

402 of 413
Janice McConnell, Assistant City Manager
Danielle Garcia, Management Services/Finance Director
PREPARED BY:

Joe Bierma, Administrative Analyst
Fiscal Impact
Fiscal Year: FY 2021-22
Revenue Generating: N
Appropriation Required Y/N: Y
Amount: $888,800.00
Budgeted Y/N: Y
Account No.: Various
Discussion:

There is currently $813,128.73 in funds available for this project, which include $413,984.51 from the County Community Development Block Grant, $305,202.22 in donated funds and $93,942.00 from the Nevada Palmetto Grove Fund that was designated in 2017 for this project. A total of $977,680.00 is needed to complete the project ($888,800 plus a 10% contingency of $88,880) which equates to a funding shortfall of $164,551.27. On February 10th, 2022, the Parks and Recreation Commission recommended the City Council designated the remaining $164,551.27 from the Nevada Palmetto Grove Proceeds to close this gap. The current balance in the unappropriated balance of the Parks and Recreation Category of the Nevada Palmetto Grove account is $703,015.00.

PROJECT FUNDING
Community Development Block Grant Funds $413,984.51
Joslyn Center Donation Funds $305,202.22
Nevada Palmetto Grove Fund $258,493.27
TOTAL $977,680.00
Attachments
Contract
A. Additional Appropriation Form
B. Bid Opening Report
C. Bid Analysis

Redlands Regular Meeting 03-15-22

403 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

PUBLIC WORK CONSTRUCTION CONTRACT

This Public Work Construction contract (“Contract”) is made and entered into this 15th day of March, 2022, by and between the City of Redlands, a municipal corporation, organized and existing under the laws of the State o f California (hereinafter “City”), and R. Dependable Construction ( hereinafter "Contractor"). City and Contractor are sometimes individually referred to herein as a “Party” and, together, as the “Parties.”

In consideration of the mutual promises contained herein, City and Contractor agree as follows:

1. SCOPE OF WORK: Contractor shall furnish all materials and will perform all of the work for the following: 2021 CDBG Joslyn Center Renovation , Project FCS10252021ER, complete all items as required by the C ontract Documents (as herein defined) and Specifications for City’s 2021 CDBG Joslyn Center Renovation, Project FCS10252021ER (the “Work”).

2. CONTRACT SUM: City shall pay Contractor the sum of eight hundred eight thousand dollars ($888,800) as consideration for its performance of the Work in accordance with the terms and conditions set forth in the Contract Documents. Pursuant to Public Contract Code Section 22300, Contractor has the option to deposit securities with an escrow agent as a substitute for retention of earnings required to be withheld by City pursuant to an escrow agreement as set forth in Public Contract Code section 22300.

3. TIME FOR COMPLETION: The Work shall be completed within ninety (90) calendar days from and after the date of City’s issuance of a Notice to Proceed to Contractor.

4. LIQUIDATED DAMAGES: Contractor’s failure to complete the Work within the time allowed will result in damages being sustained by City. Such damages are, and will continue to be, impracticable and extremely difficult to determine. Accordingly, Contractor shall pay to City, or have withheld from monies due to Contractor , the sum of one thousand five hundred d ollars ($1,500.00) for each consecutive calendar day in excess of the specified time for completion of the Work. Execution of this Contract shall constitute agreement by City and Contractor that one thousand five hundred dollars ($1,500.00) per day is the estimated damage to City caused by the failure of the Contractor to complete the work within the allowed time. Such sum is liquidated damages and shall not be construed as a penalty, and may be deducted from payments due the Contractor if such delay occurs.

5. CONTRACT DOCUMENTS: This Contract incorporates by reference the follo wing: Notice Inviting Bids, Instructions to Bidders, Contractor’s Proposal, Bid Bond, Agreement, Performance Bond, Labor and Material Bond, Plans, General Conditions, Special Provisions and Specifications, and any addenda thereto (collectively, the “Contract Documents”).

6. ATTORNEYS' FEES: In the event any action is commenced to enforce or interpret the terms or conditions of this Contract, or the Contract Documents, the prevailing Party in such action, in addition to any costs and other relief, shall be entitled to recover its reasonable attorneys’ fees, including fees for use of in-house counsel by a Party.

7. RESOLUTION OF CONSTRUCTION CLAIMS: Claims by Contractor in the amount of three hundred seventy five thousand dollars ($375,000) or less shall be made by Contractor and processed by the City pursuant to the provisions of Part 3, Chapter 1, Article 1.5 of the Public Contract Code (commencing with Section 20104). All claims shall be in writing and include the

Redlands Regular Meeting 03-15-22

404 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

documents necessary to substantiate the claim. Nothing in subdivision (a) of Public Contract Code Section 20104.2 shall extend the time limit or supersede the notice requirements provided in this case from filing claims by Contractor.

8. ELIGIBILITY OF CONTRACTOR/SUBCONTRACTOR: Contractor and al l of its subcontractors shall abide by California Public Contract Code, Section 6109, and California Labor Code Sections 1777.1 and/or 1777.7, and certify that they are not debarred and are eligible to work on this project.

9. ASSIGNMENT OF AGREEMENT: No assignment by a Party of any rights or interests under this Contract shall be binding on another Party without the written consent of the Party sought to be bound.

10. SUCCESSORS AND ASSIGNS: City and Contractor each binds itself and their respective successors and assigns in respect to all covenants, agreements, and obligations contained in the Contract Documents.

11. SEVERABILITY: Any provision or part of the Contract D ocuments held to be void or unenforceable under any law or regulation shall be deemed stricken, and all remaining provisions shall continue to be valid and binding upon City and Contractor.

Redlands Regular Meeting 03-15-22

405 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

IN WITNESS WHEREOF, the Parties hereto have executed this Contract the day and year first written above.

CITY OF REDLANDS
(SEAL)

By:____________________________________
Paul T. Barich, Mayor
ATTEST:

____________________________________
Jeanne Donaldson, City Clerk
(SEAL)

__________________________________________
Name of Contractor

By:_______________________________________
Signature of Authorized Agent

__________________________________________
Title

__________________________________________
Signature of Authorized Agent (if necessary)

__________________________________________
Title

__________________________________________
Contractor's License No.

Redlands Regular Meeting 03-15-22

406 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

WORKER'S COMPENSATION INSURANCE CERTIFICATION

Description of Contract: City of Redlands
Facilities and Community Services Department
2021 CDBG Joslyn Senior Center Renovation
Project Number FCS10252021ER

Every employer, except the State, shall secure the payment of compensation in one or more of the following ways:

a. By being insured against liability to pay compensation by one or more insurers duly authorized to write compensation insurance in this State. b. By securing from the Director of Industrial Relations, a certificate of consent to self - insure, either as an individual employer, or as one employer in a group of employ ers, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his or her employees.

CHECK ONE

_____I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for Workers’ Compensation or to undertake self -insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the perfo rmance of the work and activities required or permitted under this Agreement. (Labor Code §1861).

_____I affirm that at all times, in performing the work and activities required or permitted under this Agreement, I shall not employ any person in any manner such that I become subject to the workers’ compensation laws of California. However, at any time, if I employ any person such that I become subject to the workers’ compensation laws of California, immediately I shall provide the City with a certificate of consent to self -insure, or a certification of workers’ compensation insurance.

I certify under penalty of perjury under the laws of the State of California that the information and representations made in this certificate are true and correct.

Dated this day of , 2022. _____________________________________
(Contractor)
_____________________________________
(Signature)
_____________________________________
(Official Title)

(SEAL)

(Labor Code Section 1861 provides that the above certificate must be signed and filed by the Contractor with the Owner prior to performing the work of the contract.)

Redlands Regular Meeting 03-15-22

407 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

FAITHFUL PERFORMANCE BOND

Whereas, the City of Redlands (“City”), State of California, and R. Depe ndable Construction (hereinafter designated as "Principal") have entered into an agreement dated March 15, 2022 (“Agreement”) whereby Principal agrees to install and complete certain public improvements (the “Work”), which said Agreement is identified as 2021 CDBG Joslyn Senior Center Renovation, Project Number FCS10252021ER and is hereby referred to and made a part hereof; and

Whereas, said Principal is required under the terms of the Agreement to furnish a bond for the faithful performance of the Work , now, therefore, we, the Principal and , ______________________________________, as Surety, are held and firmly bound unto the City in the penal sum of eight hundred eighty eight thousand eight hundred dollars ($888,800) lawful money of the United States, for the payment of which sum we bind ourselves, and our heirs, successors, executors and administrators, jointly and severally, firmly by these presents.

The condition of this obligation is such that if the above bounded Principal, his or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Agreement and any alteration thereof made as therein provided, on his or its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall faithfully fulfill the one -year guarantee of all materials and workmanship, and shall defend, indemnify and save harmless the City and its elected officials, officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by the City in successfully enforcing such obligations, all to be taxed as costs and included in the judgment rendered.

As a condition precedent to the satisfactory completion of the Work, the above obligation shall hold good for a period of one (1) year or longer if required by the Agreement after the acceptance of the work by the City, during which time if the P rincipal shall fail to make full, complete, and satisfactory repair and replacements and totally protect the City from loss or damage made evident during this period from the date of completion of the Work, and resulting from or caused by defective materials or faulty workmanship, the above obligation in penal sum thereof shall remain in full force and effect. The obligations of Surety hereunder shall continue so long as any obligation of the Principal remains.

Whenever the Principal shall be, and is declared by the City to be, in default under the Agreement, the City having performed the City obligations thereunder, the Surety shall promptly remedy the default, or shall promptly, at the City’s option:

1. Complete the Work in accordance with its terms and conditions; or

2. Obtain a bid or bids for completing the Work in accordance with its terms and conditions, and upon determination by Surety of the lowest responsive and responsible bidder, arrange for a contract between such bidder and the City, and make available as work progresses sufficient funds to pay the cost of completion of the Work less the balance of the Agreement price,

Redlands Regular Meeting 03-15-22

408 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

but not exceeding, including other costs and damages for which Surety may be liable hereunder, the amount set forth above. The term “balance of the Agreement price,” as used in this paragraph, shall mean the total amount payable to the Principal by the City under the Agreement and any modifications thereto, less the amount previously properly paid by the City to the Principal.

Surety expressly agrees that the City may reject any contractor or subcontractor which may be proposed by Surety in fulfillment of its obligations in the event of default by the Principal.

Surety shall not utilize the Principal in completing the Work nor shall Surety accept a bid from the Principal for completion of the Work if the City, when declaring the Principal in default, notifies Surety of the City’s objection to the Principal’s further participation in the completion of the Work.

No right of action shall accrue on the bond to or for the use of any person or corporation other than the City named herein or the successors or assigns of the City. Any suit under this bond must be instituted within the applicable statute of limitations period.

The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or to the work to be performed thereunder or the Specifications accompanying the same shall in any wa y affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Agreement or to the work or to the specifications.

No final settlement between the City and the Principal shall abridge the right of any beneficiary hereunder whose claim may be unsatisfied.

The Principal and Surety agree that if the City is required to engage the services of any attorney in connection with the enforcement of this bond, each shall pay the City’s reasonable attorneys’ fees incurred, with or without suit, in addition to the above sum.

In witness whereof, this instrument has been duly executed by the Principal and Surety above named, on , 2022.

(SEAL) (SEAL)

(Contractor) (Surety)
BY:
(Signature) (Signature)

Address:___________________________________
__________________________________________
(Seal and Notarial Acknowledgment of
Surety)
Telephone ( )___________________________

Redlands Regular Meeting 03-15-22

409 of 413
L:\ca\djm\Agreements\R. Dependable Construction Contract.PW-3.1.FY21-0082.doc.jn

LABOR AND MATERIAL BOND

Whereas, the City Council of the City of Redlands, State of California, and R. Dependable Construction (hereinafter designated as “Principal”) have entered into an agreement (the “Agreement”) whereby Principal agrees to install and complete certain designated public improvements (the “Work”), which said agreement, dated March 15th, 2022, and identified as 2021 CDBG Joslyn Senior Center Renovation, Project Number FCS10252021ER is hereby referred to and made a part hereof; and

Whereas, under the terms of the Agreement, Principal is required before commending the performance of the Work, to file a good and sufficient Labor and Material bond with the City of Redlands to secure the claims to which reference is made in Title 3 (commencing with Section 9550) of Part 6 of Division 4 of the Civil Code of the State of California.

Now, therefore, said Principal and the undersigned as corporate surety, are held firmly bound unto the City and all contractors, subcontractors, laborers, material men and other persons employed in the performance of the Agreement and referred to in the aforesaid Code of Civil Procedure in the sum of eight hundred eighty eight thousand eight hundred dollars ($ 888,800) for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to such work or labor, that said surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by the City in successfully enforcing such obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Title 3 (commencing with Section 9550) of Part 6 of Division 4 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.

Should the condition of this bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.

The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Agreement or the specifications accompanying the same shall in any manner affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition.

In witness whereof, this instrument has been duly executed by the Principal and surety above named, on _______________________, 2022.

(SEAL) (SEAL)

(Contractor) (Surety)
BY:
(Signature) (Signature)
Address:_____________________________
(Seal and Notarial Acknowledgement of Surety) ____________________________________ Telephone: ( )___________________

Redlands Regular Meeting 03-15-22

410 of 413
DATE
OF REQUEST:

An a
dditional appropriation is hereby requested as follows:

Department:

JUSTIFICATION:

Requested By:

Recommended By Finance Director: Recommended:

Yes No Signed
Comments: Approved by City Council:

Date:

Signed:

City Clerk
REVENUE APPROPRIATION INCREASE (if applicable)
EXPENDITURE APPROPRIATION INCREASE (if applicable)
$
-
$
-

TRANSACTION
NO:

ACCOUNTING PERIOD:

Acc
ount Description Orgkey Object Code Job Ledger (If
applicable) Amount
Job Ledger (If
applicable) AmountAccount Description Orgkey Object Code Department Head
City Manager
CITY

OF REDLANDS
REQ

UEST FOR ADDITIONAL APPROPRIATION
FINANC

E USE ONLY
Pag
e 1 of 1

Redlands Regular Meeting 03-15-22

411 of 413

Redlands Regular Meeting 03-15-22

412 of 413
2021 CDBG JOSLYN CENTER RENOVATION PROJECT
FCS10252021ER
Item No. Bid Item Qty.

Unit Price Item Price Unit Price Item Price Unit Price Item Price

BASE BID
$1,085,000.00 $1,085,000.00 $1,215,823.00 $1,215,823.00 $808,000.00 $808,000.00 TOTAL BID PRICE WHEN ADDED $1,085,000.00 $1,215,823.00 $808,000.00 TOTAL ON SUBCONTRACTOR's WRITTEN BID PRICE $1,265,823.00 $945,000.00 DIFFERENCE BETWEEN THE TWO -$92,000.00 -$50,000.00 -$137,000.00

ADDITIVES IF ANY
Additive 1 $92,000.00 $92,000.00 $50,000.00 $50,000.00 $137,000.00 $137,000.00 BASE BID PRICE $1,085,000.00 $1,085,000.00 $1,215,823.00 $1,215,823.00 $808,000.00 $808,000.00 Additive 1 $92,000.00 $92,000.00 $50,000.00 $50,000.00 $137,000.00 $137,000.00 TOTAL BID PRICE PLUS ADDITIVE(s) $1,177,000.00 $1,265,823.00 $945,000.00 $1,177,000.00
CORNER KEYSTONE CONSTRUCTION MLC CONSTRUCTORS R. DEPENDABLE CONSTRUCTION

Redlands Regular Meeting 03-15-22

413 of 413