Richmond City Council
May 16, 2023

Executive Summary
Introduction
In 2010, the City Council adopted Ordinance No. 28-10 adding Chapter 7.102 Medical Marijuana Collectives to the Richmond Municipal Code to regulate the collective cultivation and dispensing of medical marijuana.

In 2011, the City Council adopted Resolution No. 9-11 establishing fees for application review, approval, and annual regulation required for medical marijuana collectives.

The Medical Cannabis Regulation and Safety Act (“MCRSA”) was signed into law in October 2015.

MCRSA was composed of three bills: AB 266 which established a dual-licensing structure requiring a state license and a local license or permit, AB 243 which established a regulatory and licensing structure for cultivation sites under the Department of Food and Agriculture, and SB 643 which established criteria for licensing of medical cannabis businesses, regulated physicians, and recognized local authority to levy taxes and fees.

On November 8, 2016, the voters of the State of California approved Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act," which decriminalized the adult use of cannabis for non-medical purposes and established a regulatory scheme at the state level.

On November 15, 2016, the City Council adopted Ordinance No. 16-16 adding Article

15.04.610.270 “Medical Marijuana Uses”, establishing regulations to allow for medicinal cannabis business to operate in the City.

On June 27, 2017, Senate Bill 94, the "Medicinal and Adult-Use Cannabis Regulation and Safety Act" (“MAUCRSA”) repealed and replaced MCRSA. MAUCRSA consolidates the medical MCRSA and adult use (Proposition 64) cannabis statutes.

On November 5, 2019, the City Council adopted Ordinance No. 16-19 amending Article

15.04.610.270 “Marijuana/Cannabis Commercial Uses”, establishing regulations to allow for adult-use cannabis activities and provide consistency with State regulations.

The purpose of this Cannabis Regulatory Fee Study (“Fee Study”) is to reevaluate and update the City’s existing cannabis fee structure and to establish the legal and policy basis for imposing regulatory fees (“fees”) for permitting and annual regulation of commercial cannabis businesses in the City. The fees will be used to reimburse the City departments for reasonable direct and indirect costs and contracted services attributable to reviewing and acting upon the applications and verifying and enforcing cannabis business compliance with the City’s Municipal Code. 1777
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Legal Framework
In order to impose such fees, this Fee Study will present findings in order to meet the substantive requirements of Proposition 26, which are as follows:

1. Demonstrate that the levy, charge, or other exaction is not a tax; and

2. The amount is not more than necessary to cover the reasonable cost of the governmental activity; and

3. The manner in which those costs are allocated to a payor bears a fair or reasonable relationship to the payor’s burden on, or benefits received from, the governmental activity.

Additionally, recent case law has provided further clarification of these substantive requirements, which are as follows:
 Costs need not be “finely calibrated to the precise benefit each individual fee payor might derive.”1
 The payor’s burden or benefit from the program is not measured on an individual basis.

Rather, it is measured collectively, considering all fee payors.2  Demonstrating that the amount collected is no more than is necessary to cover the reasonable costs of the program is satisfied by estimating the approximate cost of the activity and demonstrating that this cost is equal to or greater than the fee revenue to be received.3
 Reasonable costs associated with the creation of the regulatory program may be recovered by the regulatory fee.4

Methodology and Approach
To determine the City’s cannabis regulatory fees consistent with these substantive requirements, the cost of permitting and regulating cannabis operations by various City Departments is determined. These costs are then allocated to the payor in a way that demonstrates that the costs bear a fair or reasonable relationship to the payor’s burden on or benefits from the program. 1 Griffith v. City of Santa Cruz (2012)
2 Griffith v. City of Santa Cruz (2012); Newhall City Water District v. Castaic Lake Water Agency (2016) 3 Griffith v. City of Santa Cruz (2012)
4 League of California Cities Propositions 26 and 218 Implementation Guide, May 2017, pp. 70-71 1778
City of Richmond
Cost Recovery Analysis
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The City went through a deliberative process to establish a reasonable expenditure plan to use in setting the fees. An interdepartmental working group representing staff from the City, the Fire Department, City Attorney’s Office, and Planning Department worked together to develop and review the proposed fees.

For each of the regulatory fees established by the Fee Study, the City evaluated Article

15.04.610.270 “Marijuana/Cannabis Commercial Uses” and identified specific City tasks and activities associated with permitting and enforcement of the regulations. Each City department then determined the specific hours and personnel needed by their department to complete their tasks and activities. The estimated labor hours for each activity were then multiplied by each relevant department’s current hourly labor rate for each position completing the task. The hourly labor rates include various salary and benefits, departmental support, supervision, and other administration overhead and similar indirect costs.

The type of costs included in the fees includes labor costs, contracted services, supplies, interdepartment charges, and other incidental costs; for example: background checks and follow-up research and analysis on findings, zoning and distance checks, site visits, applicant correspondence, etc. Detailed supporting analysis tables served as the mechanism to determine specific fee rates and estimated hours, as summarized in this Fee Study. These time estimates and levels of effort were then reviewed and evaluated by other City staff and SCI for their reasonableness.

The time estimate remains constant for each application review phase or annual regulation and inspection activity, and the fees are based on each department’s hourly rates as of the date of this fee study.

Summary of General Findings
The following general findings from the Fee Study are presented:

1. The City’s proposed cannabis regulatory fees are not taxes, but regulatory fees in that the fees are proposed to recover costs associated with the Article 15.04.610.270, which created the regulatory framework to permit and regulate commercial cannabis businesses in the City.

2. The City went through a deliberative process to establish reasonable costs for permitting and annual enforcement of the City’s regulations.

3. The fee amounts determined by this Fee Study do not exceed the reasonable cost of permitting and enforcement of the new regulations.

4. The fees bear a fair or reasonable relationship to the payor’s burden on or benefits from the regulatory program.
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City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Summary of Recommendations
Based on the findings presented in the Fee Study, it is recommended that the City consider adopting the fees shown in Figure 1.

Figure 1 – Summary of Proposed Fees
Fee Description Fee 1 Unit
Application Completeness Review $1,019 per application
Conditional Use Permit $12,611 per application
Cannabis Business Permit $4,262 per application
Annual Permit Fee (Retail Storefront) $3,365 per permit annually 2 Annual Permit Fee (Retail Delivery) $3,365 per permit annually 2 Annual Permit Fee (Distribution) $3,365 per permit annually 2 Annual Permit Fee (Manufacturing) $3,587 per permit annually 2 Annual Permit Fee (Specialty/Cottage Cultivation)3 $3,365 per permit annually 2 Annual Permit Fee (Small Cultivation)3 $3,587 per permit annually 2 Annual Permit Fee (Medium Cultivation)3 $3,809 per permit annually 2 Annual Permit Fee (Large Cultivation)3 $4,030 per permit annually 2 Annual Permit Fee (Nursery Cultivation)3 $3,365 per permit annually 2 Annual Permit Fee (Processor Cultivation)3 $3,365 per permit annually 2 Annual Permit Fee (Testing) $3,365 per permit annually 2 Reinspection Fee $1,463 per inspection
Compliance Fee4 Actual Cost per hourly rate
Notes:

In the event of a compliance issue, a compliance fee will be charged based on actual costs incurred by the City, using the fully burdened rates of the staff and consultant time spent to remedy the issue.

Proposed fees are rounded to the nearest dollar.

Each additional permit for the same business at the same location shall be charged 25% of the applicable fee.

The highest activity use fee shall be the first base fee.

The annual permit fee for cultivation businesses is based on the license type issued by the Department of Cannabis Control (DCC), regardless of whether the business is utilizing the maximum canopy space authorized under the State License.
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City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Commercial Cannabis Business Application Review Fees
This section determines the costs and associated fees to review applications and issue permits for commercial cannabis businesses in the City.

Commercial Cannabis Business Application Fees
The following fees will be collected at separate phases of the application process:
 Application Completeness Review Fee
 Conditional Use Permit
 Cannabis Business Permit (CBP) Issuance Fee
Application Completeness Review Fee
The proposed Application Completeness Review Fee is $1,019 and is due upon submittal of the application. The application fee recovers the cost to review and process applications for completeness.

Figure 2 – Application Completeness Review Fee
Conditional Use Permit
The proposed Conditional Use Permit fee is $12,611 per eligible application and is due upon submittal of the complete application.

Outside Service
Cannabis
General Tasks/Activities
DirectorSenior PlannerCode Enfor ManagerCode Enfor Officer IIFire MarshalConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $288 $154 $173 $144 $250 $300 Application Completeness Review 0.50 2.00 1.00 1.00 1.00 - 5.50 $1,019 $0 $1,019 Total 0.50 2.00 1.00 1.00 1.00 - 5.50 $1,019 $0 $1,019
City Administration
Community Development Total Labor
Richmond FD
Fire
1781
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Figure 3 – Complete Application Review Fee
Cannabis Business Permit (CBP) Issuance Fee
The proposed Cannabis Business Permit Issuance Fee is $4,262 and is due upon submittal of the application for Cannabis Business Permit. The Cannabis Business Permit Fee recovers the cost associated with verifying an applicant has obtained required City permits, paid all City fees, obtained their State License, and conducting a final site inspection to check for building, fire, and local and state compliance prior to operation.

Figure 4 – Cannabis Business Permit (CBP) Issuance Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
DirectorSenior PlannerCode Enfor ManagerCode Enfor Officer IISR. Bldg InspectorDirectorSenior Civil EngineerAttorneyChiefCaptainLieutenantSergeantDeputy Fire ChiefBattalion ChiefFire MarshalConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $288 $154 $173 $144 $161 $389 $259 $232 $329 $272 $242 $224 $277 $240 $250 $300 Application Review - 3.00 2.00 3.00 3.00 2.00 1.00 1.00 1.50 1.50 1.50 4.00 1.00 1.00 1.00 3.00 29.50 $6,819 $0 $6,819 Background Checks - - - - - - - - - - 1.00 - - - - - 1.00 $242 $0 $242 Fire Safety Compliance - - - - - - - - - - - - - - - - - $0 $0 $0 Facility Inspection - - 1.00 2.00 2.00 2.00 2.00 - - - - - - - - 3.00 12.00 $2,977 $0 $2,977 Staff Report 1.00 3.00 - - - 1.00 1.00 1.00 - - - - - - 1.00 - 8.00 $1,880 $0 $1,880 Public Hearing 1.00 - 1.00 - - - - 1.00 - - - - - - - - 3.00 $693 $0 $693 Total 2.00 6.00 4.00 5.00 5.00 5.00 4.00 3.00 1.50 1.50 2.50 4.00 1.00 1.00 2.00 6.00 53.50 $12,611 $0 $12,611 Community Development Police Fire Total Labor
City Administration Richmond PD Richmond FD
Public Works
Outside Service
Finance Cannabis
General Tasks/Activities
Senior PlannerCode Enfor ManagerCode Enfor Officer IISR. Bldg InspectorBus License SpecialistDirectorSenior Civil EngineerSR. Env Comp InspcDirectorSergeantFire MarshalConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $154 $173 $144 $161 $82 $389 $259 $259 $270 $224 $250 $300 CBP Issuance 1.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 - 12.00 $2,537 $0 $2,537 Facility Inspection - CUP Conditions - 1.00 1.00 1.00 - 1.00 1.00 - - - - 2.00 7.00 $1,725 $0 $1,725 Total 1.00 3.00 2.00 2.00 1.00 2.00 2.00 1.00 1.00 1.00 1.00 2.00 19.00 $4,262 $0 $4,262 Community Development Police Fire Total Labor
City Administration chmond P chmond F
Public Works
1782
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Commercial Cannabis Business Annual Permit Fees
Cannabis Retail (Storefront & Non-Storefront) Annual Permit Fee Figure 5 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Retail (Storefront & Non-Storefront) Business. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 5 – Cannabis Retail (Storefront & Non-Storefront) Annual Permit Fee Cannabis Distribution Annual Permit Fee
Figure 6 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Distribution Business. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 6 – Cannabis Distribution Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
1783
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Cannabis Manufacturing Annual Permit Fee
Figure 7 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Manufacturing Business. One inspection will be performed annually. As shown, the proposed fee is $3,587 annually per permit.

Figure 7 – Cannabis Manufacturing Annual Permit Fee
Cannabis Specialty/Cottage Cultivation Annual Permit Fee Figure 8 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Specialty or Cottage Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 8 – Cannabis Specialty/Cottage Cultivation Annual Permit Fee Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.50 - 2.50 4.00 $965 $0 $965
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.00 2.00 6.00 16.50 $3,587 $0 $3,587
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
1784
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Cannabis Small Cultivation Annual Permit Fee
Figure 9 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Small Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,587 annually per permit.

Figure 9 – Cannabis Small Cultivation Annual Permit Fee Cannabis Medium Cultivation Annual Permit Fee
Figure 10 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Medium Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,809 annually per permit.

Figure 10 – Cannabis Medium Cultivation Annual Permit Fee Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.50 - 2.50 4.00 $965 $0 $965
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.00 2.00 6.00 16.50 $3,587 $0 $3,587
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 2.00 - 3.00 5.00 $1,187 $0 $1,187 Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.50 2.00 6.50 17.50 $3,809 $0 $3,809
City Administration
Community Dev. Total Labor
1785
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Cannabis Large Cultivation Annual Permit Fee
Figure 11 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Large Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $4,030 annually per permit.

Figure 11 – Cannabis Large Cultivation Annual Permit Fee Cannabis Nursery Cultivation Annual Permit Fee
Figure 12 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Nursery Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 12 – Cannabis Nursery Cultivation Annual Permit Fee Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 2.50 - 3.50 6.00 $1,409 $0 $1,409 Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 6.00 2.00 7.00 18.50 $4,030 $0 $4,030
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
1786
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Cannabis Processor Cultivation Annual Permit Fee
Figure 13 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Processor Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 13 – Cannabis Processor Cultivation Annual Permit Fee Cannabis Testing Annual Permit Fee
Figure 14 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Testing Business. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.

Figure 14 – Cannabis Testing Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor ManagerCode Enfor Officer IIAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
1787
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Cannabis Reinspection Fee
Figure 15 shows the determination of the fee for full cost recovery for the cannabis reinspection fee for all cannabis business types. Reinspection will be performed on an as needed basis, when follow-up actions are required following an annual inspection or the City receives a complaint that warrants an inspection. As shown, the proposed fee is $1,463 annually per permit.

Figure 15 – Cannabis Processor Cultivation Annual Permit Fee Cannabis Compliance Fee
In the event of a compliance issue, a compliance fee will be charged based on actual costsincurred by the City, using the fully burdened rates of the staff and consultant time spent to remedy the issue.

Outside Service
City Attorney Cannabis
General Tasks/Activities
Senior PlannerCode Enfor ManagerCode Enfor Officer IISR. Bldg InspectorAttorneyConsultant Hours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $154 $173 $144 $161 $232 $300 Facility Inspection 1.00 1.00 1.00 1.00 1.00 2.00 7.00 $1,463 $0 $1,463 Total 1.00 1.00 1.00 1.00 1.00 2.00 7.00 $1,463 $0 $1,463 Reinspection Fee: $1,463
City Administration
Community Development Total Labor
1788
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Other Fees
In addition to the fees outlined in this Fee Study, there are other fees that permit holders will be required to pay. These other fees fall into two categories:
 Fees that apply in relation to cannabis operations as they would to any other permitted business operation or land-use entitlement in the City; and  Fees that may be developed in relation to cannabis operations, but which are outside the scope of this Fee Study.
 In the event the state develops additional sub-license types, city staff may apply the nearest applicable fee based on a similar use determination.

Permit holders will be informed of additional fees in the usual course of applications and communications with the involved City departments.

Generally Applicable Fees
Existing fees that apply to cannabis operations include, for example, business license fees and building permit application fees. These fees generally apply to cannabis operations the same as they would to any other permitted business in City. Another example is the Conditional Use Permit Fee or Appeals Fee payable by any applicant other than an applicant for a cannabis operator permit. For example, if a third party (e.g., any person other than a permit applicant) appeals a decision in relation the cannabis operator permit processes described identified above, that appellant will pay a nominal appeal fee. This amount is consistent with the fee that is generally applied by the Planning Department for third-party appeals in planning processes brought by anyone other than the applicant.
1789
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023

Review and Update of Fees
This Fee Study has been prepared in the context of an emerging industry and regulatory framework for legalized cannabis in the State of California. It may be appropriate for the City to review and update the fees identified in this Fee Study:
 When the program under Article 15.04.610.270 has been implemented for a period of time sufficient for the City to have had an opportunity to review the actual costs incurred in processing applications and monitoring permits and to have achieved some efficiencies in processing applications and undertaking monitoring and compliance;  If Article 15.04.610.270 is substantially amended such that the time and/or processes involved are substantially changed.
1790
TO: WCCTAC Board MEETING DATE: April 28, 2023
FR: Leah Greenblat, Transportation Planning Manager
RE: FY 23-24 Annual STMP Fee Adjustment

REQUESTED ACTION
Information only.

BACKGROUND AND DISCUSSION
The 2019 STMP Update became effective on July 1, 2019. The Master Cooperative Agreement, signed by all partner agencies, specifies an automatic annual fee adjustment so that the fees keep up with construction related inflation. The agreement specifies that the fee adjustment is based on the Engineering News Record’s February San Francisco Bay Area Construction Cost Index that covers the prior twelve months. This year that rate was 7.1%. (By comparison, if the January 2023 rate was used, the adjustment would be 8.4%.) WCCTAC staff is in the process of notifying partner agencies of this impending annual fee adjustment, which becomes effective July 1, 2023, so it may be incorporated into their local fee schedules.

Given the on-going state of inflation, this year’s fee increase is on par with last year’s adjustment which was 9.8%. It should be noted that Engineering New Record’s Bay Area Construction Cost Index is a tool commonly used by jurisdictions to make annual fee adjustments. The implementation of a different fee increase would require all six member jurisdictions to amend the Master Cooperative Agreement and related ordinances.

The FY 22-23 and FY 23-24 STMP fees are shown below.

FY 22-23 STMP Fee Rate
$ 6,458
$ 3,181
$ 1,744
$ 4,133
$ 0.90
$ 7.82
$ 6.60
$ 10.35
$ 8,727
STMP Fee per
Square ft.

STMP Fee
per Unit
Other (per AM pk hr trip)
Storage Facility
Industrial
Office
Single Family
Multi Family
Senior Housing
Hotel (per room)
Retail / Service
Type of Fee
3B-1
1791
The STMP Quarterly Reporting form for FY 23-24 is included as an attachment. Local agency staff should begin using this version to report STMP fees after July 1, 2023.

ATTACHMENT
A. FY 2023-2024 STMP Quarterly Reporting Form
3B-2
1792
Check Appropriate Box: Fiscal Year: _________
Reporting Period: FY Q1 FY Q2 FY Q3 FY Q4
All sections of the report must be completed. July-Sept Oct-Dec Jan-Mar Apr-JuneAttach check, payable to WCCTAC, to this report. Fee Submittal Due Date: 31-Oct 30-Jan 30-Apr 31-JulSubmit check and completed transmittal report to:

WCCTAC Jurisdiction's Name:El Cerrito, CA 945306333 Potrero Ave., Suite 100 Contact Email:Contact Name:

No development to report this period. OR Notes:

List each project or project component separately. Add rows as needed.Insert below the # of Units or # of Sq. Ft. to calculate the amnt. of fee collected. 6,916 $ - $ 3,407 $ - $ 1,868 $ - $ 4,426 $ - $

0.97 $ - $ 8.38 $ - $ 7.07 $ - $

11.09 $ - $
9,346 $ - $
TOTAL FEES COLLECTED: - $
This should be the amount of your check to WCCTAC.
foIf a jurisdiction is collecting STMP fees for a development application at a rate different than what is currently in effect, provide on the llowing page the name and address of each development and which reason applies:

A. The development project is subject to a development agreement executed on _________________; B. The development submitted a vesting tentative map that was approved on ___________________; C. Other (explain legal basis for development not paying current adopted rates; n.b., a development application submitted in a prior year alone is an insufficient explanation) ___________________.

West County Subregional Transportation Mitigation Program (STMP) Developer Fees JURISDICTIONS' QUARTERLY TRANSMITTAL REPORT FORM for FY 2023-24 STMP Fee per
Square ft.

Total # Units
or Sq. Ft.

STMP Fee per
Unit
Other (per AM pk hr tripOfficeIndustrialRetail / ServiceStorage FacilityHotel (per room)Senior Housing Multi FamilySingle Family Type of Fee
Jurisdictions are required to submit this completed form to WCCTAC no later than 30 days following the close of each calendar quarter; whether or not there are fees to submit, continuing through the life of the Master Cooperative Agreement.

STMP $
Collected Project Address Development Name

3B-3
1793
During the reporting period, has your agency granted:

1. STMP Fee Credits to any development? Yes No2. STMP Fee Waivers/Exemptions to any development? Yes No If STMP Credits were granted, for each development complete the questions below: If yes to either of the above, please respond to the questions on the next page.

1. What is the name and address of the development project receiving the credit?2. What was the dollar value of the credit? 3. Which of the 20 STMP Projects was the credit used for?4. What elements of the STMP project were completed with the credited funds? If Waivers/Exemptions of STMP Fees were granted, for each development, complete the questions below:

1. Were all other local fees waived/exempted for the development project? Yes No2. Briefly explain why the development project's STMP fee was waived/exempted? Revised 6/30/2020
Respond to Different Fee Rates/Credit and Waiver/Exemption Questions here:

3B-4
1794
1 RESOLUTION NO. -23

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RICHMOND ESTABLISHING A MASTER FEE SCHEDULE FOR THE SERVICES RENDERED BY CITY DEPARTMENTS. THIS

RESOLUTION ESTABLISHES AND ESTABLISHING A FEE SCHEDULE WHICH WILLTO

IMPLEMENT COST RECOVERY, WHICH AND WILL SERVE AS THE BASIS FOR FUTURE FEE ADJUSTMENTS.
________________________________________________________________________ WHEREAS, Section 2.34.040 of the Municipal Code of the City of Richmond provides for the establishment of a Master Fee Schedule for the fees to be charged by the various City departments for City services; and
WHEREAS, the City Council of the City of Richmond desires to enact a Master Fee Schedule, which updates the fees assessed by the City departments to reflect the actual costs associated with providing the services, as supported by the analysis prepared by Willdan Financial (incorporated herein by reference); and
WHEREAS, the City Council of the City of Richmond desires to enact a Master Fee Schedule which that can be utilized as the basis for the future fee adjustments based on the Employment Cost Index.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Richmond that, in accordance with Section 2.34.040 of the Municipal Code of the City of Richmond, there is hereby established a Master Fee Schedule for the City of Richmond.

BE IT FURTHER RESOLVED that the Master Fee Schedule for the City of Richmond which is established by this resolution is attached hereto as Exhibit A and is incorporated herein by this reference.

BE IT FURTHER RESOLVED that all fees set forth in the Master Fee Schedule shall become effective thirty days after the adoption of this resolution.

BE IT FURTHER RESOLVED that if any fee set forth in the Master Fee Schedule is for any reason found to be unconstitutional or invalid, such a decision shall not affect the validity of the remaining fees contained in the Master Fee Schedule.

BE IT FURTHER RESOLVED that the City Council hereby declares that it would have adopted each of the fees individually set forth in the Master Fee Schedule irrespective of the unconstitutionality or invalidity of any particular or specified fee. --------------------------
1795
2 I certify that the foregoing resolution was passed and adopted by the City Council of the City of Richmond at a regular meeting thereof, held on June 6May 16, 2023, by the following vote:

AYES:

NOES:

ABSTENTIONS:

ABSENT:
____________________________________
City Clerk of the City of Richmond
(SEAL)
Approved:
______________________________
Mayor
Approved as to form:
______________________________
City Attorney
1796

May 16, 2023
Library and Community Services
DATE: May 16, 2023
TO: Mayor Martinez and Members of the City Council
FROM: LaShonda White, Deputy City Manager, Community
Services
Tamara Walker, Deputy Director of Community Services,
Employment and Training Division
Subject: Contract with the Richmond Police Activities League to Provide Workforce Training and Work Experience
Opportunities
FINANCIAL IMPACT: The contract will be funded entirely by the California for All Youth grant from California Volunteers - Office of the Governor. All expenditures associated with this program are grant funded and will be reimbursed to the City.

There will be no fiscal impact upon the City’s General
Fund (12572641-400538-27A01).

PREVIOUS COUNCIL
ACTION:

N/A

STATEMENT OF THE
ISSUE:

The Employment and Training Division is seeking a
contract with the Richmond Police Activities League to
provide workforce training and employment opportunities for 20 youth for the Ambassador and Explorer program.

RECOMMENDED ACTION: APPROVE a contract with the Richmond Police Activities League (RPAL) to provide workforce training and
employment services to 20 youth, for a term commencing
April 5, 2023, and ending March 31, 2024, for a total
amount not to exceed $73,700 funded by the California
for All Youth grant – Community Services Department,
Employment and Training (Tamara Walker 510-307-
8006). This item was continued from the April 4, 2023,
April 18, 2023, and May 2, 2023, meetings.

AGENDA
REPORT
1797

May 16, 2023
DISCUSSION:

The City of Richmond’s Employment and Training Division (E&T) was awarded $2,972,695 from California Volunteers, Office of the Governor. These funds were allocated to provide Richmond youth and young adults, ages 16 – 30, with transitional employment, academic development, occupational skills training, career pathways, and on-the-job training opportunities in high-wage, high-growth industries.

On December 12, 2022, E&T released a Request for Proposal (RFP) to communitybased organizations to support the delivery services under the California for All Youth grant. Two (2) applications were received and after review, E&T is requesting City Council approval to enter into a contract with the Richmond Police Activities League (RPAL).

RPAL will provide workforce training and employment opportunities for 20 youth through the Ambassador and Explorer program. The partnership will provide job preparedness training, workplace skills training, and community service opportunities that will allow program participants to gain work experience important to enhancing their qualifications and advantages toward their ultimate career success. Each participant will be allowed to work a maximum of 500 hours at $20 per hour and E&T will be responsible for payroll functions.

DOCUMENTS ATTACHED:

Attachment 1 – California for All Youth Grant
Attachment 2 – California for All Youth RFP
Attachment 3 – Scoring Rubric
Attachment 4 – Richmond Police Activities League Contract 1798

2. The term of this Agreement is:

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 6/27/2022
6/27/2022
1799
City of Richmond For All Youth Workforce Development Program RFA#JP12-002
Section 1: Program Goals
The COVID-19 pandemic and accompanying economic downturn are having staggering effects on young adults. Young people are typically among the hardest-hit groups during recessions and getting off to a bad start in the labor market can have long-term effects.

Prior to the pandemic, young people aged 16 -24 were already disproportionately adversely affected in the labor markets compared to other age groups. Even as the nation enjoyed record low unemployment rated between 2016 and early 202, young people experienced unemployment rates twice as high as the national average. Experts estimate that the number of young people between the ages of 16 -24 who are not in school or working will easily top 6 million and could swell to almost one-quarter of all young people.

Thus, young people are facing a catastrophic crisis, and we can’t wait to act. The window for action is open, but we need to move swiftly. We need a society, economy and community designed to care for all people, especially young people, who are the most important and most affected stakeholder when talking about our global future.

Therefore, the City of Richmond has made young people the heart of it’s COVID-19 recovery by helping them prepare for work and life as engaged citizens. Richmond has prioritized education, civic engagement, and employment for Richmond youth.

Our goals are as follows:
• Improve the health and well-being of the community by providing valuable educational, social, and environmental services
• Prevent long-term unemployment among young adults and reduce economic hardship. • Help young people prepare for future good jobs by offering a more affordable route to postsecondary education and giving them the chance to learn new skills, gain work experience, and expand their social and professional networks. • Rebuild civic and social connections by bringing participants from different backgrounds, income levels, races, ethnicities and area of the city together to share experiences to solve public challenges.

Section 2: Program Design
City of RIchmond
#JP2002
Exhibit A Scope of Work
DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1800
We cannot fail in the crucial task pf promoting equal opportunities for all young people to thrive.

The pandemic has interrupted the education, socialization, and employment of tens of millions of children and young adults – disproportionately hurting those from low-income families and communities of color.

As we recover, we must aim higher and think bigger, rather than returning to the economic and social status quo.

It is our responsibility, as local government, to provide an avenue for young people to support themselves financially, carry out meaningful and productive work, learn new skills, and expand their networks to prepare for a leadership role in the future.

The City of Richmond For All Youth Workforce Program is designed and administered by Richmond YouthWORKS, a department within the city, in partnership with the Richmond Police Activities League, RichmondBuild, Richmond YouthBuild, Richmond Office of Neighborhood Safety, Richmond Police Cadet, Richmond Fire Department Explorers, West Contra Costa Unified School District, THIMBY, and Contra Costa College.

All program partners have over 10 years of providing youth development and employment and training opportunities for at-risk, low income Richmond youth.

In addition, we will partner with several community-based organization to provide a holistic approach to addressing the needs of the young people who participate in the program.

The program will target 150 at-risk, low-income Richmond youth, ages 16 – 30, who identify as Opportunity Youth (unemployed/not in school), justice-involved, or have aged out of the foster care system. We will serve a minimum of 75 youth per year in year-round/summer employment opportunities beginning May 1, 2022.

The program will focus on building and expanding career pathways, addressing climate control and food insecurities, and provide meaningful service opportunities to assist COVID-19 recovery in the community.

Each youth referred to the program will go through an intake process which includes a resiliency and needs assessment. Upon completion of their assessments, each participant will receive a Career Action Plan. A career action plan is a dynamic planning document owned and managed by young people intended to reflect their increased career development learning. The plan helps young people: set their goals. clarify the actions needed to achieve these goals.

Participants can participate in the following programs:
• Career Support – All participants will be required to attend our Career Support workshops. The workshops designed to prepare youth for employment providing soft skills training in order to increase the youth’s employability in a short amount of time.

The workshop is comprised of modules on professionalism, workplace conflict resolution, workplace safety, financial management, resume writing, job search and interview techniques and job retention.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1801
• Life Skills – All participants will be required to attend our Life Skills workshops. The workshops give youth the ability to learn new skills that increase their understanding of the world around them and equip them with the tools they need to live a more productive and fulfilling life; to finding ways to cope with the challenges that life, inevitably, throws at them.
• Public works and environmental conservation/restoration program – Participants will address long-standing conservation, restoration, and climate change needs such as maintenance backlog in public parks, and coastal ecosystem restoration, neighborhood beautification, and disaster preparedness as a result of COVID-19. • RPAL Farm, Garden and Culinary Arts program – Participants will be introduced to the local agricultural industry and build new and essential life skills through farming, gardening, cooking and food literacy. Young people will have the ability to make healthy food choices by having the skills and knowledge necessary to buy, grow, and cook food with implication for improving individual, family, and community health. • Tiny House In My Backyard (THIMBY) – Participants will participate in the design and construction of carbon neutral, off-grid capable transitional housing for low-income and unhoused Richmond residents. This student-led housing initiative was developed by UC Berkeley students to address the acute housing crisis in the region, which has been especially exacerbated in the wake of COVID-19.
• Public Service & Safety Corp – A career pathway program and pipeline that teaches the critical skills needed for and entry into public service and safety careers. • RichmondBuild and YouthBuild - Participants work toward their GEDs or high school diplomas (if appropriate), learn job skills, and work on community projects. The program provides participants with intensive hands-on training in industry-recognized certifications and supports their progress toward a lucrative career in the construction industry.

Section 3: Youth Recruitment/Development
Participants for the City of Richmond For All Youth Workforce Development program are atrisk, low-income Richmond Youth, ages 16 – 30, who identify as Opportunity Youth (unemployed/not in school), justice-involved, and/or have aged out of the foster care system.

There are various entry points into to the program; inhouse recruitment and partnering agencies referral. Richmond YouthWORKS is a youth development program that focuses on provided employment and training opportunities to Richmond youth ages 16 – 24.

Richmond YouthWORKS along with RichmondBuild and Richmond YouthBuild are under the auspices of the City of Richmond’s Employment & Training Department and will be a pipeline for recruitment.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1802
In addition, the department, in partnership with West Contra Costa Unified School District, Contra Costa Office of Education, and Contra Costa Community College, provide employment opportunities for 500 Richmond youth during the summer.

Furthermore, we receive referrals from law enforcement agencies, community-based organizations, probation, and independent living programs.

Lastly, the City of Richmond utilizes several outreach platforms to provide information to the community. These platforms include:
• Television station
• Mayor’s weekly blog
• Community Newspaper
• City Manager’s weekly report
• Social media outlets (i.e., Facebook, Twitter, Instagram) As stated above, we will partner with several community-based organization to provide a holistic approach to addressing the needs of the young people who participate in the program. These services include:
• Case Management,
• Transportation assistance,
• Referral to substance abuse treatment and mental health counseling, • Assistance with childcare,
• Assistance with housing,
• Legal aid services,
• Referrals to healthcare,
• Assistance with uniforms and other work attire and work-related tools and gear, • Assistance with book, fees, and school supplies, and
• Payments for fees for employing and training-related applications, tests, and certifications.

Section 4: Metrics/Outcomes
As a workforce development system, we are competent in data collection for outcome measures.

We are very confident in our ability to provide the required metrics for the grant.

We have the capability and capacity to utilize our current MIS system, CalJobs, to capture the required outcome metrics which are aligned with the Workforce Innovation and Opportunity Act (WIOA) metrics that govern our funding.

Section 5: Budget/Staffing/Communication
DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1803
The City of Richmond commits to using CaliforniaVolunteers developed branding for this program and will participate in CaliforniaVolunteers-organized training/curriculum if required.

In addition, if funded, we would be interested in participating in a program launch media event with CaliforniaVolunteers.

TOTAL: $2,972,695
Category Amount Total Budget Narrative
Year 1 Year 2
Staffing
(3) FTE Employment Program
Specialist
Administrative/MIS Staff
.5FTE
$177,444
$40,004
$186,300
$41,862
$363,744
$81,866
3 FTE Employment Program Specialist responsible
for outreach, case management and job placement.

Cost of living increase in Year 2.

Responsible for program support, tracking and
reporting of program outcomes, and support for
outreach and recruitment
Benefits @.45% $18,002 $18,838 $36,840 Calculated at .45% Supplies (tools, uniform, wood,
nails, paint)
$10,000 $10,000 $20,000 The total budget for supplies equals $20,000, and includes $10,000 for the cost of
construction supplies and consumables to be used in
the construction training lab, and uniforms and safety
equipment for participants. An additional $10,000 is
included for the cost of hand and power tools for use
by participants.

Contractual
Richmond Police Activities
League Farm, Garden, Culinary
Program
Contra Costa College
$100,000
$50,000
$100,000
$50,000
$200,000
$100,000
Contract with the Richmond Police Activities League
to administer the Youth Farm Safety Education and
Certification Program.

Contract with Contra Costa College to administer the
Public Service and Safety certification program.

Other
Supportive Services
Participant Wages = 150 youth
X $20/hr. X 500 hours
$200,000
$750,000
$200,000
$750,000
$400,000
$1,500,000
Costs associated with providing wraparound services
(see description of wraparound services above)
Costs for participant wages will equal $10,000 per
participant, for a total of $1,500,000 for 150
participants (75 per year) in year-round and summer
program.

Administrative Cost (10%) $134,545 135,700 $270,245 Charges for “Other” also include administrative costs calculated at 10% of the
total federal request of $2,702,450, and equal
to $270,245.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1804
City of Richmond
#JP2002
Applicant:

Items Description Calculation Total Budget
Administrative Costs General purpose staff,
including office staff,
Director, fiscal staff and
item such as office supplies,
internet access, office
postagecopier cost, etc.
.1FTE Director
.1 Administrative
Analyst
.2FTE Fiscal Support
10% of office
expenditures
$ 255,495.00
Total $ 255,495.00
# Requested Hourly Salary # of Hours Total Budget
150 $20/hr 500 $ 1,500,000.00
Total $ 1,500,000.00
Items Description Calculation Total Budget
FICA for Fellows Social Security & Medicare 150 X $500 X 7.65% $ 114,750.00 Worker's Compensation
Health Care
Total $ 114,750.00
Items Description Calculation Total Budget % Allocation Cross Check Support Services Transportation assistance,
Referral to substance abuse
treatment and mental
health counseling,
Assistance with childcare,
Assistance with housing,
Legal aid services, Referrals
to healthcare, Assistance
with uniforms and other work
attire and work-related tools
and gear, Assistance with
book, fees, and school
supplies, and Payments for
fees for employing and
training-related
applications, tests, and
certifications.
150 X $2000 $ 300,000.00
Case Management Work collaboratively to
engage the Youth and
other support team
members in the
identification of strengths
and needs which support
the development and
implementation of a service
plan.
3FTE (includes
benefits)
.5FTE MIS (includes
benefits)
$ 482,450.00
CTE Certification Offer CTE courses through
the local community
college for participants
obtain CTE certificates and
college credit.
3 contract
education courses
at the community
college with
support staff @
$33K/each
$ 100,000.00
Community Garden To develop a community
garden that allows the
community to grow their
own fresh fruits and
vegetables.
supplies and staff
for the gardening
education and
supplies for the
garden
$ 200,000.00
Supplies
tools, uniform, wood, nails, paint,
seeds, dirt
Supplies needed for
beautification
project and
community farms.
$ 20,000.00
Total $ 1,102,450.00 37.1%
Total Budget Request $ 2,972,695.00
Total # of Fellows 150
Partner Status (Proposed or Secured) Contractual Amount Richmond PAL Proposed $ 200,000.00
Contra Costa College Proposed $ 100,000.00
Total $ 300,000.00
Exhibit B Budget Detail
List of Partners
IV. Program Wrap-Around Services (Not to Exceed 40% of Total Award) III. CaliforniansForAll Youth Workforce Fellows - Other Fellow Costs CaliforniansForAll Youth Workforce Program (Revised 11/30/2021) City of Richmond
II. CaliforniansForAll Youth Workforce Fellows - Wage
I. Administration (Must Not Exceed 10% of Direct Award Amount) DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1805
City of Richmond
Agreement #JP2002

EXHIBIT B
Budget Payment Provisions
California Volunteers,
CaliforniansForAll Youth Workforce Development Program
and City of Richmond

BUDGET PAYMENT PROVISIONS

1. Invoicing and Payment
a) For services satisfactorily rendered, and upon receipt and approval of the invoices, the State agrees to compensate the Contractor for actual expenditures incurred in accordance with the rates specified herein, which is attached hereto and made a part of this Agreement.
b) Invoices shall include the Agreement Number and shall be submitted via PDF to [email protected].

2. Budget Contingency Clause
a) It is mutually agreed that if the Budget Act of the current year and/or any subsequent years covered under this Agreement does not appropriate sufficient funds for the program, this Agreement shall be of no further force and effect. In this event, the State shall have no liability to pay any funds whatsoever to Contractor or to furnish any other considerations under this Agreement and Contractor shall not be obligated to perform any provisions of this Agreement.
b) If funding for any fiscal year is reduced or deleted by the Budget Act for purposes of this program, the State shall have the option to either cancel this Agreement with no liability occurring to the State, or offer an agreement amendment to Contractor to reflect the reduced amount.

3. Prompt Payment Clause
Payment will be made in accordance with, and within the time specified in, Government Code Chapter 4.5, commencing with Section 927.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1806
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
CaliforniansForAll Youth Jobs Corps Program
Outcome and Output Reporting
All CaliforniansForAll Youth Jobs Corps Program grantees will be responsible for providing periodic and timely reports on outcomes and outputs associated with the funding received from this program.

Reporting Metrics
Grantees will be required to report the following metrics on a quarterly and annual basis to California Volunteers in a format and method to be specified by California Volunteers. These metrics are subject to change, depending on the California Department of Finance’s review and approval:
• Required by Department of Treasury:
o Number of workers enrolled in sectoral job training programs o Number of workers completing sectoral job training programs o Number of people participating in summer youth employment programs
• Output: Total number of youth employed; number of hours of employment
• Outcome: Percentage of participants who enroll in higher education or gain employment following program end; Number of industries served; Disadvantaged areas served
Additionally, CaliforniaVolunteers requires cities to report the following data, where feasible, on a quarterly and annual basis to CaliforniaVolunteers in a format and method to be specified by California Volunteers. • Number of youth participating in program
• Number of youth employed in each focus area
• Number of youth enrolled in job training/readiness programs • Number of youth completing job training/readiness programs • Number of youth participating in summer program (if applicable) • Average wage and hours worked of participants across program Information/data/member stories as requested for annual report • Does this project serve an economically disadvantaged community? • Number of youth employed in program who were previously unemployed DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1807
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
• Number of youth who complete full program (1 year or summer program) • Percentage of youth employed in program who remain in college or stable employment
• Percentage of youth employed after completion of program • Percentage of youth who report job satisfaction after one year of employment, as reported by a survey
• Percentage of youth who report an interest in a career in public service after one year of employment, as measured by a survey
• Percentage of youth employed in public service after one year of employment
• Job training evaluations
Reporting Deadlines:

Report Reporting Period Partner Reports Due
1 (if applicable) Award Date – December 31, 2021 January 10, 2022 2 January 1 – March 31, 2022 April 8, 2022
3 April 1 – June 30, 2022 July 8, 2022
4 July 1 – September 30, 2022 October 7, 2022
California Volunteers will update this reporting timeline with additional reporting periods, upon receipt of updated reporting timelines established by the federal government for projects leveraging State Fiscal Recovery Funds, as further identified by the California Department of Finance. Reporting metrics may be updated, depending on updated guidance from the California Department of Finance.

Reporting Process:

California Volunteers will be providing a comprehensive reporting template for grantees upon execution of a contract. Additionally, this reporting template and process may be updated during the period of the contract. At the time when the reporting process is updated, California Volunteers will roll out communication regarding this process and provide updates to grantees.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1808
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
CaliforniansForAll Youth Jobs Corps Program
Invoicing
This grant is a cost-reimbursement grant. As such, grantees will be required to submit periodic and timely invoices to California Volunteers for expenses already incurred for processing and payment. Grantees have the discretion to invoice monthly or quarterly. However, California Volunteers will not allow invoices for periods in excess of three months due to the need to provide quarterly financial reporting to the California Department of Finance, as well as the federal government, over the use of State Fiscal Recovery Funds (SFRF), federal stimulus funding.

Invoicing Deadlines:

Grantees have the discretion to invoice monthly or quarterly. If monthly, invoices should be submitted by the 15th of the following month. If quarterly, invoices should be submitted with the financial report no later than the due date identified in the financial reporting deadlines below.

Financial Reporting Metrics:

Grantees will be required to report quarterly on expenditures and unliquidated obligations associated with the grant. As such, grantees will be required to provide the following:
• Expenditure Amounts
o Cumulative Expenditures (prior cycles)
o Expenditure Adjustments (+/-) prior cycles
o Expenditures (Current Cycle)
o Total Cumulative Expenditures
• Obligation Amounts
o Remaining Obligation
o Total Cumulative Expenditures
o Total Cumulative Expenditures + Obligation
o Award Amount
• Notes (if applicable)
These metrics are subject to change, depending on the California Department of Finance’s review and approval.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1809
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
Financial Reporting Deadlines:

Report Reporting Period Partner Reports Due
1 Award Date – December 31, 2021 January 10, 2022
2 January 1 – March 31, 2022 April 8, 2022
3 April 1 – June 30, 2022 July 8, 2022
4 July 1 – September 30, 2022 October 7, 2022
California Volunteers will update this reporting timeline with additional reporting periods, upon receipt of updated reporting timelines established by the federal government for projects leveraging State Fiscal Recovery Funds, as further identified by the California Department of Finance. Reporting metrics may be updated, depending on updated guidance from the California Department of Finance.

Reporting Process:

California Volunteers will be providing a comprehensive financial reporting template for grantees upon execution of a contract. Additionally, this reporting template and process may be updated during the period of the contract. At the time when the reporting process is updated, California Volunteers will roll out communication regarding this process and provide updates to grantees.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1810
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
CaliforniansForAll Youth Jobs Corps Program
State Fiscal Recovery Funds
This program leverages 100% State Fiscal Recovery Funds. Grantees leveraging this funding are required to follow specific terms and conditions, reporting requirements, guidance, etc. associated with these funds. The requirements for the use of these funds are incorporated in their entirety through the inclusion of the links to specific resource pages in this Exhibit (see below). This includes links and attachments referenced on the following pages.

Resources:
• Coronavirus State and Local Fiscal Recovery Funds:
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-statelocal-and-tribal-governments/state-and-local-fiscal-recovery-funds • State Fiscal Recovery Fund: https://www.dof.ca.gov/budget/COVID19/State_Fiscal_Recovery_Fund/ • State Fiscal Recovery Fund Reporting Portal:
https://www.dof.ca.gov/budget/COVID19/State_Fiscal_Recovery_Fund_Reporting_Portal/ Through execution of the contract, grantees agree to follow the rules, guidance, regulations, and terms and conditions as outlined in the above links, as well as any other requirements and policies outlined throughout the exhibits of the executed contract.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1811
City of Richmond
#JP2002
Exhibit D(1) California Volunteers Reporting Requirements, Invoicing, and Specific Requirements and Terms and Conditions
Programmatic and Fiscal Document Retention
In line with State and Federal requirements regarding record retention, grantees are required to maintain all documentation, programmatic and fiscal, pertaining to this contract for a period of five years after the close out the contract and the payment of the final invoice. The grantee is required to maintain books, records, documents, and other evidence pertaining to the reimbursable costs and hold them available for audit and inspection by the State or Federal Government for the five years following the close out of the contract and payment of the final invoice. These retention requirements pertain to all contracts associated with this program, regardless of funding source.

DocuSign Envelope ID: 6D84046E-A820-4E5E-9EAE-B1DF93C651B0 1812

Request for Proposals
California For All Youth
Release Date: December 12, 2022
Deadline for Submittal
January 6, 2023
5:00pm
Contact: Itza Gonzalez
Email: [email protected]
Phone Number: 510-307-8023
City of Richmond
Employment & Training Department
1813

RICHMOND – CALIFORNIA FOR ALL YOUTH GRANT PROGRAM

GUIDELINES AND APPLICATION

TABLE OF CONTENT
California For All Youth Background 3
Eligibility Requirements 3
Grant Award Amounts 4
Eligible Uses of Grant Funds 4
Ineligible Uses of Grant Funds 5
Fiscal Sponsorships 6
Collaborating Organizations 7
Metrix and Reporting 7
Application Submission Requirements 8
Application Submission Details 9
Payment Provisions 9
Review Criteria 9
Application Review and Selection Process 10
Application Deadline 10
Late Application or Modification to Applications 10
Schedule 11
Questions or Addendums to the Application 12
Proposal Format Guidelines 12
Process for Submitting Proposals 13
Grantee Requirements 15
City Staff Contact 15
General Terms and Conditions 16
Exhibits 19
1814

INTRODUCTION
The City of Richmond is requesting proposals from qualified agencies to provide workforce development and training services to Richmond youth, ages 16 – 30. This request for proposal (RFP) describes the project, the required scope of services, the agency selection process, and the minimum information that must be included in the proposal. Failure to submit information in accordance with the RFP requirements and procedures may be cause for disqualification. The anticipated term of this contract will be for a period of 18-months and an option to renew for six additional months by means of a mutual agreement of both parties.

Vendors are required to read and understand all information contained within this entire Proposal package. By responding to this RFP, the vendor agrees to read and understand these documents.

PROJECT BACKGROUND / DESCRIPTION
On October 2022, the Richmond City Council Approved the California for All Youth Workforce Initiative which will invest $2.9 million dollars, over the next 18 months, to enhance and expand workforce development programs intended to assist youth job seekers in obtaining employment, education, training and support services necessary to succeed in today’s labor market and compete in the global economy.

The funding in this Request for Proposal (RFP) supports programs delivered through The California For All Youth Workforce Program; a Governor’s initiative administered by California Volunteers in partnership with cities across California. The purpose of the initiative is to strengthen the city’s capacity to address key areas of:
 climate,
 food insecurity, and
 local COVID-19 recovery.

ELIGIBILITY REQUIREMENTS
Organizations must meet the following condition to be eligible to apply for a grant:
 Are a nonprofit 501(c)(3) organization, registered with the Internal Revenue Service and in good standing with the State of California’s Registry of Charitable Trusts.  Are not debarred or suspended from participation in local, State or Federal programs.  Provide services to Richmond residents (Richmond-serving) o A minimum of 80% of the organizations proposed grant-funded program/services must be provide to Richmond residents. If awarded, grant funds can only be spend serving Richmond residents.
 Meet all minimum qualifications as described in Section I & II below.  Can comply with all local, state, or federal laws and regulations if funded. 1815

GRANT AWARD AMOUNTS
Initial grant awards for the following will be funded through State funds are available through Item 0650-163-8506 (California Volunteers - Coronavirus State and Local Fiscal Recovery Funds) of the 2021 Budget Act. These funds were made available to California Volunteers through an investment by the Governor and the Legislature. Coronavirus State and Local Fiscal Recovery Funds, though administered through the State of California and California Volunteers, are federal stimulus funds associated with recovery from the COVID-19 pandemic. City of Richmond will grant funds directly to eligible CBOs on a reimbursable basis.

Grant allocation amount: The amount available for the grant cycle is $1,100,000.00.

Minimum and Maximum grant awards: The minimum grant award amount is $50,000. The maximum grant award amount is $200,000. The number of awards available will be determined based on the amount of each award.

Number of applications per grant cycle: Organizations may submit up to two applications per grant cycle.

ELIGIBLE USE OF GRANT FUNDS
The program has three primary goals:
 Increase youth employment
 Develop career pathways
 Strengthen local capacity to address key areas of food insecurity, climate, and COVID-19 recovery
City of Richmond will subgrant all parts of the funding to existing CBOs providing youth workforce development programming, excluding wages for youth participants. Subgrantees under supervision of the city of Richmond are responsible for selecting or creating training and job opportunities and recruiting, hiring, and managing participants.

Funding can be used to create new programming or expand existing youth workforce programs within the requirements of this grant. Programming can be run year-round or as an intermittent summer program. Regardless of program length, all participant positions must be 50% FTE - 100%.

All participants must be Richmond residents between 16-30 years of age. Priority should be given to youth who:
• Have not participated in an AmeriCorps program
• May have difficulty finding employment
• Are low-income
• Are unemployed and/or out of school
• Are or were justice-involved
• Are in or transitioning from foster care
• Are engaged with the mental health or substance abuse system 1816

Priority applicants (meeting two of above criteria) should make up no fewer than 75% of selected participants.

Examples of eligible projects or programs may include, but not limited to, the following:
 Urban Forestry
 City Beautification
 Community Food Distribution/Food Banks
 Community Service Special Events
 Senior Services
 Public health/healthcare services
 Information Technology
 Urban and Community Farming
 Public Safety Initiatives
 Sustainable Energy
Indirect administrative costs incurred should not exceed 10% of total direct costs, pursuant to federal guidance. Up to 40% of total direct costs may be used for wraparound services for participants. This can include services such as:
 transportation stipends/awards,
 job readiness training,
 case management, or
 other services likely to help participants succeed in the program and/or gain employment after completion of program.

All participants will receive a wage of $20/hr. (not to exceed 500 hours) that will be paid by the City of Richmond Employment & Training Department.

INELIGIBLE USE OF GRANT FUNDS
Participants may not partake in activities that require high levels of safety precautions.

Participants may not partake in activities that require specialized training unless that training is provided by subgrantee. All expenditures and activities must comply with Coronavirus State and Local Fiscal Recovery Funds requirements, federal procurement requirements, and other state and/or federal laws and regulations.

In addition, grant funds may not be used for the following reasons:
 Repayment of existing debt or pre-existing tax liens or obligations  Legal, loan, or bank fees
 Subsidization of existing contracts
 Political campaigns or lobbying
 Advancement of certain sectarian, politically partisan, or religious projects (grant funds should be used for specific programs and not to advance the causes of any of the stated 1817

groups)
 Fundraisers or other events not open to the general public  A project or program which is clearly intended for commercial gain  A project or program that occurs before or after the grant award period  Support of individuals
 For businesses established for personal benefit or profit  To support annual fund drives
 To fund an agency’s deficit or endowment
 To repay loans
 Furniture
 Cell phones
 Bonuses
 For the direct support of religious activities. Secular activities offered to the Richmond community that is provided by religious organizations regardless of congregational membership or statements of belief may be eligible for grant funds.

FISCAL SPONSORSHIPS
What types of organizations should utilize a fiscal sponsor?  A non-governmental organization (sponsoree) that does not have 501(c)(3) tax status must utilize a fiscal sponsor to apply for this grant. It is the sole responsibility of the sponsoree to find an organization with 501(c)(3) tax status that is willing to serve as a fiscal sponsor.

What is fiscal sponsorship?
 Fiscal sponsorship allows organizations without 501(c)(3) tax status.  A fiscal sponsorship agreement should be entered into between the sponsoree and an organization that has 501(c)(3) tax status.
 The fiscal sponsorship agreement allows the sponsoree to raise tax-deductible contributions through grants and individual donations.
 Tax-deductible funds are given to the fiscal sponsor and restricted to the use of the sponsoree.

How does a fiscal sponsorship work for the California For All Youth grant process?:
 The fiscal sponsor will serve as the applicant. Fiscal sponsors will enter into a grant services agreement with the City of Richmond and must meet all requirements and submit all required documents.
 A signed agreement between the sponsoree and fiscal sponsor must be included in the submitted application. The organization actually implementing the program and performing the services will act as the sponsoree or fiscal sponsor’s sub-grantee.  Fiscal sponsors can also apply for grants.
 In addition to requesting funds for its own purposes, organizations may also act as a fiscal agent for other organizations.

COLLABORATING ORGANIZATIONS
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Through this grant program, the City strongly encourages applicants to collaborate with other organizations such as school districts, adult schools, community colleges, and training facilities. Collaboration is a mutually beneficial relationship to meet a common goal.

Collaboration can come in many forms, from information sharing to joint programming. It can help organizations reduce redundancy in service sectors, leverage resources, share strengths, and increase efficiencies.

METRICS AND REPORTING
Subgrantees will be required to report the following metrics monthly:
 Number of youth participating in program.
 Number of youth employed in each focus area.
 Number of youth enrolled in job training/readiness programs.  Number of youth completing job training/readiness programs.  Number of youth participating in summer program (if applicable).  Average wage and hours worked of participants across program.  Information/data/member stories will be requested for annual report.

Additionally, subgrantees will be required to report monthly:
 Number of youth employed in program who were previously unemployed.  Number of youth who complete full program (1 year or summer program).  Percentage of youth employed in program who remain in college or stable employment.

Percentage of youth employed after completion of program.  Percentage of youth who report job satisfaction after one year of employment, as reported by a survey.
 Percentage of youth who report an interest in a career in public service after one year of employment, as measured by a survey.
 Percentage of youth employed in public service after one year of employment • Job training evaluations.
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APPLICATION SUBMISSION REQUIREMENTS
The following materials must be submitted as part of a complete application packet by 5:00 p.m. on Friday, December 30, 2022, to be considered for funding (feel free to use this section as a checklist). The inability to adhere to the requirements below may impact an organization’s overall scores:
 Completed application
 Five (5) pages
 Applicant Organizational Budget
 Applicant Program Budget
 Proof of 501(c)(3) status (Non-Profit Status Determination letter from the Internal Revenue Service) or fiscal sponsor’s corresponding documents  Financial statements – most recent (current) audited financials or Internal Revenue Service Form 990 or 990-N for tax-exempt organizations whose gross receipts are typically $50,000 or less or fiscal sponsor’s corresponding documents. Faith-based organizations may submit reviewed or annual financial statements.  List of Board of Directors and affiliations or fiscal sponsor’s corresponding documents 
 Signed agreement between the organization and the fiscal sponsor, if applicable  “Active” status with the California secretary of State (https://businesssearch.sos.ca.gov/)
NOTE: Application submitted by organizations not identified with “active” status will be disqualified.

For organization with 501(c)(3) tax status, City staff may check websites such as Internal Revenue Service at www.irs.gov and GuideStar at www.guidestar.org to gather information about the applicant organization.

APPLICATION SUBMISSION DETAILS
 Submit completed grant application (include budgets and résumés and/or descriptions of work experience with the application) and a set of all additional required documents.
 The responses to the application questions shall be limited to eight (5) pages. This page limit is not inclusive of budgets, résumés, descriptions of work experience, or documents requested as part of the application.
 All submitted materials should be typed in a 12-point font size and Times New Roman font style. Applications must be easily reproducible on a standard copying machine.
 All costs incurred in the preparation of an application are the applicant’s responsibility.
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 Applications must be completed and submitted electronically by Friday, December 30, 2022, at 5:00 p.m. Applications received after this date and time will not be considered and will not be eligible for review and scoring by the Review Panel.

PAYMENT PROVISIONS
This is a reimbursable grant. An initial advance payment of twenty-five percent (25%) of the total award amount will be advanced to all grantees as part of the application award process.

The remaining funds will be released upon the submission of complete and adequate reporting and invoicing documentation. The final ten percent (10%) will be reserved until the completion of the grant program and final submittal of all required documentation. Payments will only be made for the eligible items and amounts specified in the approved grant agreement budget and a manner consistent with the payment provisions contained in the executed grant agreement.

REVIEW CRITERIA
All submitted application, which comply with the grant requirements, will be evaluated, and rated using the criteria listed below. The maximum score than an application receive is 100 points from criteria areas #1 – 4 and an extra 10 points program deliver included (10 points) Total Points Available for Criteria Area #1-5: 100 Points 20 Agency History & Capacity - The extent to which the respondent demonstrates a history of successfully implementing youth and workforce development programs and achieving outcomes. Evidence should include previous experience with diverse communities and youth, program integration, case management, and successful data tracking and performance outcomes.
45 Program Design - The extent to which the proposed plan and services are clear and specific, including recruitment, frequency of programming, average number of clients to be served over the course of the grant, location of services, and extend of proposed services to be delivered.
20 Staffing Experience & Qualification – The extent that staffing is sufficient for the level of services proposed, and staff are qualified and reflective of the communities to be served.
15 Budget Request & Justification – The extent that the budget is clear and reasonable in cost to support the proposed level of services and provides adequate justification of proposed costs.

EXTRA POINTS
10 Collaboration – To the extent that program services include collaborations with local training institutions that offer Occupational-skills or Industry-recognized certifications.
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APPLICATION REVIEW AND SELECTION PROCESS
The City's overall objective is to award grants to highly qualified organizations that provide needed services to Richmond youth. Within this overall objective, it is also the City’s intent that the selection process is fair and transparent. Applications will be evaluated and scored by Review Panel (Review Panel) consisting of no more than four (4) individuals residing in or employed in Richmond (not City of Richmond employees).

The selection process is divided into the following steps:

1. Applications are received by the due date.

2. All applications are reviewed in depth by City staff for responsiveness, completeness, and satisfaction of eligibility requirements. Based on this review, eligible claims will proceed to the application evaluation process.

3. All complete and eligible applications are forwarded to the Review Panel, which will review and score the applications using the criteria listed in the guidelines and make an award recommendation to City Council. The inability to adhere to the application requirements may impact an organization’s overall scores. Grant awards can be less than the applicant’s original request.

4. The Review Panel’s recommendations are forwarded to the City Council for review, discussion, and approval.

Any party applying shall not contact or lobby any City Council member Review Panel member, City official, employee (except those specified for contact) or agent regarding the RFP. Any party attempting to influence or circumvent the RFP, application submittal, and/or review process may have their application rejected for violating this provision of the RFP.

All scores are final. There is no grievance process. Copies of Review Panel comments and scoring will be made available upon request.

APPLICATION DEADLINE
The deadline to submit an application and all relevant attachments is Friday, December 30, 2022, at 5:00 p.m. There are no exceptions for applications submitted after the deadline.

LATE APPLICATIONS OR MODIFICATIONS TO APPLICATIONS
Applications submitted after the specified date and time will not be considered.

Organizations assume responsibility for the timely submission of applications and all required documents. Any applications may be withdrawn or modified by a written request signed by the applicant.
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SCHEDULE
The schedule associated with the application is below. The City reserves the right to alter this schedule as necessary.

Date Activity
December 5, 2022 Release RFP
December 16, 2022 Final Day to Submit Questions (5:00 PM) December 20, 2022 Responses to Questions posted on BidsOnline December 30, 2022 RFP Due Date
January 2033 Final Selection and Contract Negotiations
January 2023 – February 2023 City Approval Processes
March 1, 2023 Effective Date of Contract

QUESTIONS OR ADDENDUMS TO THE APPLICATIONS
It is strongly recommended that organizations register on the City’s E-Notify Me webpage (http://www.ci.richmond.ca.us/list.aspx) to ensure that they receive any addendums to or notifications regarding this RFP or the CFAY grant program. Any requests for clarification or other questions concerning this RFP should be submitted in writing to City staff via [email protected].
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PROPOSAL FORMAT GUIDELINES
The proposal should be concise, well organized, and demonstrate the organization’s qualifications and experience applicable to the Project. The proposal shall be limited to 3-pages double-sided pages (8.5 inches x 11 inches), inclusive of graphics, forms, pictures, photographs, dividers, etcetera, but not of cost proposal, resumes, required forms, certifications, front and back covers, or letters of commitment from sub-consultants. The required font size is 12 point, with minimum left and right margins of one-inch, and top and bottom margins of 0.7 inches.

Each proposal will adhere to the following order and content of sections. Proposal should be straightforward, concise and provide “layman” explanations of technical terms that are used.

Emphasis should be concentrated on conforming to the RFP instructions, responding to the RFP requirements, and on providing a complete and clear description of the offer. Proposals, which appear unrealistic in the terms of technical commitments, lack of technical competence or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. The following proposal sections are to be included in the Vendor’s response:

A. Agency History and Capacity
 Describe your agency’s mission and the programs and services you offer.  Describe your agency’s experience providing youth and workforce development programs including outcomes.

B. Program Design
 Describe the program and proposed services. Provide information on the program design, types of services, and how services will be delivered.  Describe how the program aligns with one or more of the key funding areas of this grant. If program is not one of the key funding areas, identify the need for the program that will lead to identified grant outcomes.
 Describe what successful completion of the program and services look like for the participants. How will you know your program has met its intended goals.  Provide information on the program partners. What are their roles and what will they provide?
 Portion of the funds for this grant should be used to provide workforce training and subsidized work-experience opportunities for youth participant. Describe your recruitment and placement strategy for placing youth in employment opportunities in the community.
 For Applicants with Fiscal Sponsors only: Describe the relationship between the proposed program and the fiscal sponsor agency, and the role of both in the success of the proposed program.

NOTE: Youth participants may not complete work experience opportunities within a forprofit business.

C. Staffing Experience and Qualification
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 Describe the key program staff that are responsible for delivering the direct services. Describe key duties and roles and time devoted to the proposed program. Include information on staff experience, community connections, and cultural competencies.
 Describe the key knowledge skills, and ability possessed by your staff or needed in the roles for your program to be successful, and how will your agency support staff to acquire and develop their knowledge, skills, and ability.

D. Budget Request & Justification
 For all budgeted items, provide a brief narrative explanation and justification of planned expenditures
 Explain how funds requested are reasonable to support the proposed number of youth to be served, hours of service to be provided and overall program design.  Provide detail regarding each line item, including those listed as “Other.” For these items, provide a brief narrative explanation and justification of planned expenditures.

E. Collaboration
 Describe potential collaborative opportunities

PROCESS FOR SUBMITTING PROPOSALS
Please submit your proposal via the City of Richmond's BidsOnline system. Proposals submitted by facsimile or e-mail are not acceptable and will not be considered.

The proposal and any required certifications shall be signed by an individual or individuals authorized to execute legal documents on behalf of the organization.

Organization is responsible for submitting its entire proposal package with all required submittal documents and any modifications or revisions, to reach the City of Richmond’s office as designated in the RFP by the time specified below. Any proposal, modification, or revision received by the City of Richmond after the exact time specified for receipt of proposals is “late” and will not be considered.

Pre-Award Negotiations
After the proposals are opened, but prior to award, the City may elect to conduct negotiations with the highest ranked respondent for purposes of:
 Resolving minor differences and information
 Clarifying necessary details and responsibilities
 Emphasizing important issues and points
 Receiving assurances from respondents
 Cost/budget clarifications
If the City cannot successfully negotiate a contract with the highest ranked respondent, the City may begin negotiations with the second highest ranked respondent. 1825

Selection may be made without further discussion, negotiations or Offeror’s presentations; therefore, Offeror shall offer the most favorable terms in response to this RFP. Offeror must demonstrate an understanding of the scope of service to be provided and the ability to accomplish the tasks set forth. Offeror shall include information that will enable the City to determine the Offeror’s overall qualifications. The City reserves the right to request additional information or clarification on any matter included in the proposal response, to enable the City to arrive at the final award decision.

Award - When the Review Panel has completed its work, City staff will then recommend a Financial Advisor firm to the City Manager and City Council for approval. The services provided by the successful bidder shall be governed by a Standard Services Agreement (Attachment 1). 1826

GRANTEE REQUIREMENTS
If awarded a grant, organizations will be required to do the following:
 A Grant Service Agreement with specific deliverables will be executed. All organizations are expected to initiate projects within two (2) months of execution of the grant agreement. The scope of work will be based on the application submitted.  Submit bi-annual progress reports and reimbursement requests (templates will be included as part of the executed grant agreement):
o Progress and Final Report - Reports will be required and must provide detailed information about the services provided. Grantees that do not submit the required reports run the risk of forfeiting their funding. A final report at the conclusion of the project or program is also required.
o Funding Requests – Requests must include the necessary documents to substantiate the disbursement (e.g., receipts, timecards, payroll records, etc.).

Grantees that do not adhere to the invoicing requirements run the risk of forfeiting their funding
 Host City staff for one or more site visit and/or program evaluation.  Published program materials shall include the City and California For All Youth Grant seal or logos and shall state, “Made possible in part by the City of Richmond and the California For All Youth Grant.” The material must be appropriate, relevant, and aligned with the approved project and should be reviewed and approved by City staff before release.
 Complete and submit a W-9 form and Supplemental Vendor Application.  Obtain a City of Richmond business license. Organizations are responsible for all associated fees. Information can be found at http://www.ci.richmond.ca.us/66/Business  Meet the City of Richmond insurance requirements. Fiscal sponsors, serving as the grantee, must have insurance that covers all actions of the non-profit and/or communitybased organization acting as the sub-grantee

CITY STAFF CONTACT
For inquiries or clarification regarding this program or application, please contact Employment & Training staff at [email protected] or Itza Gonzalez at (510) 307-8023. 1827

GENERAL CITY REQUIREMENTS
Background Checks
Organizations that provide services to youth or other vulnerable populations (elderly, people with disabilities, etc.) must require comprehensive background checks and fingerprinting of all employees and/or volunteers that work directly with youth or such other vulnerable populations.

General Information
This RFP does not commit the City of Richmond to award a contract, to defray any costs incurred in the preparation of a proposal pursuant to this RFP, or to procure or contract for work.

The City of Richmond may reject a proposal without providing the reason(s) underlying the declination. A failure to award a contract to the organization with the lowest cost proposal shall not constitute a valid cause of action against the City of Richmond. The City shall not be responsible for work done, even in good faith, prior to final approval of the proposed contract.

The City may investigate the qualifications of any organization under consideration, require confirmation of information furnished by the organization, and require additional evidence or qualifications to perform the Services described in this RFP.

The City reserves the right to:

1. Reject any or all proposals, or to make no award without providing the reason(s) underlying the declination.

2. Issue subsequent Requests for Proposals.

3. Postpone opening for its own convenience.

4. Remedy technical errors in the Request for Proposal process.

5. Negotiate with any, all, or none of the Respondents.

6. Solicit best and final offers from all or some of the Respondents.

7. Select one or more Respondents.

8. Accept other than the lowest proposed fees.

9. Waive informalities and irregularities in proposals.

10. Request additional information, including, but not limited to, follow‐ up interviews.

Public Records
All proposals submitted in response to this RFP become the property of the City of Richmond and public records and, as such, may be subject to public review. Documents protected by law from public disclosure will not be disclosed by the City of Richmond if clearly marked with the word "confidential" on each applicable page. Trade secrets may be marked as confidential only to the extent they meet the requirements of California Government Code section 6254.7. Only information claimed to be a trade secret at the time of submittal to the City of Richmond and marked as "confidential" will be treated as a trade secret.

Contractor Assignment of Sub-Contract
The resulting contract shall not be assigned, transferred, or sublet, in whole or in part, without the prior written approval of the City of Richmond. If organizations intend to subcontract any portion of the resulting contract, they must describe their process for selecting such subcontractor(s) and the quality control measures that the organization will employ to ensure that any subcontractor complies with the provisions of organization’s contract with the City. 1828

Previous Contracts with the City of Richmond
The organization shall submit a list which indicates all prime contracts and/or amendments awarded to the organization by the City of Richmond for the last three (3) years. The list shall include a short description of the Project, the Project scope of work, award date, completion date, name of City of Richmond’s assigned Project Manager, and contract value.

Exceptions to this Request for Proposals
The organization shall state whether or not it takes exception(s) to this RFP, including but not limited to the City of Richmond’s Standard Services Agreement – RFP (Attachment 1). If the organization does take exception(s) to any portion of the RFP or contract, the specific portion to which exception(s) is taken must be identified by section number and explained. Requests for changes or additions to sections of City of Richmond’s Standard Services Agreement must be shown by requesting deletion of specific words and/or by providing new requested contract language. Requests for complete replacement of the City of Richmond’s Standard Services Agreement for another contract will not be granted. Failure to make exceptions to the RFP or Standard Services Agreement within the proposal will be deemed a waiver of any objection.

Exceptions will be considered during the proposal evaluation process.

Statement of Impartiality and Disclosure
The nature of this Project requires an impartial unbiased approach on the part of the organization’s team. This proposal shall include a statement declaring that the organization and sub-consultants are not currently, and will not, during the performance of these services, participate in any other similar work involving a third-party with interests currently in conflict or likely to be in conflict with City of Richmond’s interests. Additionally, organizations are required to disclose any pending or active investigations or litigation that may affect the reputation or ability of the organization to carry out the Project.

Insurance Requirements
The City of Richmond requires consultants doing business with it to obtain insurance, as shown in RFP Attachment 2. The required insurance certificates must comply with all requirements of the standards as shown and must be provided within fifteen (15) days of issuance of the Notice of Intent to Award and prior to the commencement of any work on the Project.

Business Licenses
Organization, at its sole expense, and all subcontractors shall obtain and maintain during the term of any agreement, all appropriate permits, certificates and licenses including, but not limited to, a City of Richmond Business License, which will be required in connection with the performance of services hereunder.

Compliance with City Ordinances
The contractor and all subcontractors shall comply with the City of Richmond Nondiscrimination Clauses in City Contracts Ordinance (Richmond Municipal Code (RMC) Chapter 2.28), Business Opportunity Ordinance (RMC Chapter 2.50), Local Employment Program Ordinance (RMC Chapter 2.56), Living Wage Ordinance (RMC Chapter 2.60) and Ordinance Banning the Requirement to Provide Information of Prior Criminal Convictions on all Employment Applications (“Ban the Box”) (RMC Chapter 2.65), which are incorporated into the Contract Documents by this reference.
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Collusion
By submitting a proposal, each organization represents and warrants that its proposal is genuine and not false or collusive or made in the interest of, or on behalf of any person not named therein; that the organization has not directly or indirectly induced or solicited any other person to submit a false proposal, or any other person to refrain from submitting a proposal; and that the organization has not, in any manner, sought collusion to secure any improper advantage over any other person submitting a proposal.

Withdrawal of Proposals
An organization may withdraw their proposal before the expiration of the time for submission of proposals by delivering to the City Manager’s Office a written request for withdrawal signed by, or on behalf of, the organization.

Ownership of Documents
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems, and any other materials produced for the Project shall be the sole and exclusive property of the City.

No such materials or properties produced in whole or in part for the Project shall be subject to private use, copyrights or patent rights by organization in the United States or in any other country without the express written consent of the City. The City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced for this Project.

Sanctuary City Contracting Ordinance
The Richmond Sanctuary City Contracting Ordinance No. 12-18 prohibits the City from granting and or retaining contracts with any person or entity that provides Data Broker or Extreme Vetting services to the U.S. Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”) (Attachment 4). Bidders/Organizations must submit the attached Sanctuary City Compliance Statement with their Bid or Proposal (Attachment 3).

Limited Liability Companies Disclosure Statement (LLCS) Resolution No. 86-21, approved by City Council on July 6, 2021, requires disclosure of the identities of beneficial & responsible owners of Limited Liability Corporations (LLC) (Attachment 5). Bidders/Organizations must submit the attached Disclosure Statement of Limited Liability Companies Form with their Bid or Proposal (Attachment 6).

Rejections
All proposals will be reviewed to determine conformance with the RFP requirements. Failure to meet the requirements may be cause for rejection of the proposal. Any proposal which is incomplete, conditional or contains irregularities may also be rejected.

The City of Richmond reserves the right to:

A. Select any proposal as a basis for written or oral communication with any or all of the companies or individuals when such action is considered to be in the best interest of the City of Richmond.

B. Exercise discretion and apply its judgment with respect to selection of any proposals submitted.

C. Reject all proposals.
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ATTACHMENTS
ATTACHMENT 1: Standard Contract
ATTACHMENT 2: Insurance Requirements
ATTACHMENT 3: Sanctuary City Compliance Statement
ATTACHMENT 4: Sanctuary City Contracting Ordinance
ATTACHMENT 5: Resolution No. 86-21
ATTACHMENT 6: Disclosure Statement of Limited Liability Companies Form 1831
CALIFORNIA FOR ALL YOUTH SCORING RUBRIC – RICHMOND POLICE ACTIVITIES LEAGUE Agency
History &
Capacity
Program
Design
Staffing &
Qualifications
Budget
Request &
Justification
Collaboration Total
Rater 1 20 40 20 15 10 105
Rater 2 20 39 16 14 9 98
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CITY OF RICHMOND

STANDARD CONTRACT
Department: Project Manager:

Project Manager E-mail: Project Manager Phone No:

PR No: Vendor No: P.O./Contract No:

Description of Services:

The parties to this STANDARD CONTRACT do mutually agree and promise as follows:

1. Parties. The parties to this Contract are the City of Richmond (herein referred to as the “City”) and the following named Contractor:

Company Name:

Street Address:

City, State, Zip Code:

Contact Person:

Telephone: Email:

Business License No: / Expiration Date:

A California [ ] corporation, [ ] limited liability corporation [ ] general partnership, [ ] limited partnership, [ ] individual, [ ] non-profit corporation, [ ] individual dba as [specify:] ,
[ ] other [specify:]

2. Term. The effective date of this Contract is and it
terminates unless terminated as provided herein.

3. Payment Limit. City’s total payments to Contractor under this Contract shall not exceed $ . City shall not pay for services that exceed
the Contract Payment Limit unless a contract amendment has been approved by the City Council or City Manager.

4. Contractor’s Obligations. Contractor shall provide those services and carry out that work described in the Service Plan (Exhibit A) which is attached hereto and is incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

5. City's Obligations. City shall make to the Contractor those payments described in the Payment Provisions (Exhibit B) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

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6. Authorized Representatives and Notices. This Contract is subject to the Authorized Representatives and Notices Provisions (Exhibit C) which are attached hereto and are incorporated herein by reference.

7. General Conditions. This Contract is subject to the General Conditions (Exhibit D) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein.

8. Special Conditions. This Contract is subject to the Special Conditions (Exhibit E) (if any) which are attached hereto and are incorporated herein by reference, subject to all the terms and conditions contained or incorporated herein. (Note:
other than Public Works contracts, the City will agree to Special Conditions only in unusual circumstances.)

9. Insurance Provisions. This Contract is subject to the Insurance Provisions (Exhibit F) which are attached hereto and are incorporated herein by reference.

10. Signatures. These signatures attest the parties' Contract hereto:

CITY OF RICHMOND CONTRACTOR:
a municipal corporation

By:
(* The Corporation Chairperson of the Board,
President or Vice President should sign below)

Title: By:

I hereby certify that this Contract Title:
has been approved by City Council.

Date Signed:

By:

City Clerk
(* The Corporation Chief Financial Officer,
Secretary or Assistant Secretary should sign below)
Approved as to form:

By:

By: Title:

City Attorney
Date Signed:

(NOTE: Pursuant to California Corporations
Code Section 313, if Contractor is a corporation
or nonprofit organization, this Contract (1) must
be signed by (a) the Chairperson of the Board,
President or Vice-President and (b) the
Secretary any Assistant Secretary, the Chief
Financial Officer or any Assistant Treasurer.

LIST OF ATTACHMENTS:

Service Plan Exhibit A
Payment Provisions Exhibit B
Authorized Representatives and Notices Exhibit C
General Conditions Exhibit D
Special Conditions Exhibit E
Insurance Provisions Exhibit F
Standard Contract/EJ/TE 9-26-07
1834
For the Contract between the City of
Richmond and

EXHIBIT A

SERVICE PLAN
Contractor shall, to the satisfaction of the , perform the following services and be compensated as outlined below:

Employment & Training Dept.
1835
For the Contract between the City of
Richmond and

EXHIBIT B

PAYMENT PROVISIONS
{PLEASE NOTE THAT THE CITY OF RICHMOND SHALL NOT PAY FOR SERVICES

THAT EXCEED THE CONTRACT PAYMENT LIMIT UNLESS A CONTRACT

AMENDMENT HAS BEEN APPROVED BY THE CITY COUNCIL OR THE CITY MANAGER}

1. Provided Contractor is not in default under this Contract, Contractor shall be compensated as provided below.

2. Any and all payments made pursuant to this Contract shall be subject to the Contract Payment Limit. The Payment Limit includes expenses (phones, photo copying, meals and travel etc). Invoices, shall be adequately detailed, based on accurate records, and be in a form reasonably satisfactory to the City. Contractor may be required to provide back-up material upon request.

3. Contractor shall submit timely invoices to the following address:

Attention: City of Richmond, Finance Department - Accounts Payable Project Manager: Department:

PO Box 4046
Richmond, CA 94804-0046

4. All invoices that are submitted by Contractor shall be subject to the approval of the City’s Project Manager, before payments shall be authorized.

5. The City will pay invoice(s) within 45 days after completion of services to the City’s satisfaction. The City shall not pay late fees or interest.

6. A Richmond business license shall be obtained before any payment under this Contract shall be authorized and the business license must be kept current during the term of this Contract for payments to continue to be authorized.

7. All insurance coverage required by this Contract shall be provided by the Contractor before this Contract shall be executed by the City. The insurance coverage must be kept current during the term of this Contract for payments to continue to be authorized. 1836
For the Contract between the City of
Richmond and

EXHIBIT C

AUTHORIZED REPRESENTATIVES AND NOTICES

1. Notices. All notices, demands, statements, or communications provided for by this Contract shall be in writing and may be delivered by deposit in the United States mail, postage prepaid. Notices to the City shall be addressed to the Department Head and (as delineated below in section 1.1) to the project manager responsible for the administration of or the supervision of the scope of work under this Contract. Notices to the Contractor shall be addressed to the party designated by Contractor (as delineated below in section 1.2). Notice shall be deemed delivered (a) upon personal delivery; (b) as of the fifth business day after mailing by United States certified mail, postage prepaid, addressed to the proper party; or (c) as of 12:00 p.m. on the second business day immediately after the day it is deposited with and accepted by Federal Express, or a similar overnight courier service, addressed to the proper party and marked for next business day morning delivery. For the purposes of this Contract, a "business day" means any day Monday through Friday that is not a holiday recognized by the federal government or the State of California.

1. 1 CITY hereby designates as its Authorized Representative the Project Manager whose name and address are as follows:

City of Richmond
Richmond, CA 94804-0046

1. 2 CONTRACTOR hereby designates as its Authorized Representative the Project Manager whose name and address are as follows:

1837

EXHIBIT D

GENERAL CONDITIONS

1. Independent Contractor. Contractor acknowledges, represents and warrants that Contractor is not a regular or temporary employee, joint venturer or partner of the City, but rather an independent Contractor. This Contract shall not be construed to create an agency, servant, employee, partnership, or joint venture relationship. As an independent Contractor, Contractor shall have no authority to bind City to any obligation or to act as City's agent except as expressly provided herein. Due to the independent Contractor relationship created by this Contract, City shall not withhold state or federal income taxes, the reporting of which shall be Contractor's sole responsibility.

2. Brokers. Contractor acknowledges, represents and warrants that Contractor has not hired, retained or agreed to pay any entity or person any fee, commission, percentage, gift, or any other consideration, contingent upon or resulting from the award or making of this Contract.

3. City Property. The rights to applicable plans, drawings, reports, calculations, data, specifications, videos, graphics or other materials prepared for or obtained pursuant to this Contract, which, upon request, are to be delivered to City within a reasonable time, shall be deemed assigned to City. If applicable, Contractor shall prepare check prints upon request. Notwithstanding the foregoing, Contractor shall not be obligated to provide to City proprietary software or data which Contractor has developed or had developed for Contractor's own use; provided, however, that Contractor shall, pursuant to Section 15 below, indemnify, defend and hold harmless City from and against any discovery or Public Records Act request seeking the disclosure of such proprietary software or data.

4. Patents, Trademarks, Copyrights and Rights in Data. Contractor shall not publish or transfer any materials, discoveries, developments, concepts, designs, ideas, know how, improvements, inventions and/or original works of authorship resulting from activities supported by this Contract without the express prior written consent of the City Manager. If anything resulting from activities supported by this Contract is patentable, trademarkable, copyrightable or otherwise legally protectable, City reserves the exclusive right to seek such intellectual property rights. Notwithstanding the foregoing, Contractor may, after receiving City's prior written consent, seek patent, trademark, copyright or other intellectual property rights on anything resulting from activities supported by this Contract. However, City reserves, and Contractor irrevocably grants, a nonexclusive, fully paid-up, royalty-free, assumable, perpetual, worldwide license, with the right to transfer, sublicense, practice and exploit said license and the right to make, have made, copy, modify, make derivative works of, use, sell, General Conditions/EJ/TE 09-26-07 1 of 12
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import, and otherwise distribute under all applicable intellectual properties without restriction of any kind said license.

Contractor further agrees to assist City, at City's expense, in every proper way to secure the City’s rights in any patents, trademarks, copyrights or other intellectual property rights relating thereto, including the disclosure to City of all pertinent information and data with respect thereto. Contractor shall also assist City in the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which City shall deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, to waive such rights. Contractor shall further assist City in the execution of all applications, specifications, oaths, assignments, recordations and all other instruments which City shall deem necessary in order to assign and convey to City, and any assigns and nominees the sole and exclusive right, title and interest in and to any patents, trademarks, copyrights or other intellectual property rights relating thereto. Contractor further agrees that its obligation to execute or cause to be executed, when it is in Contractor's power to do so, any such instruments or papers shall continue during and at all times after the end of Contractor's services and until the expiration of the last such intellectual property right. Contractor hereby irrevocably designates and appoints City, and its duly authorized officers, agents and servants, as its agent and attorney-in-fact, to act for and in its behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters of patents, copyright and other registrations. This power of attorney is coupled with an interest and shall not be affected by Contractor's subsequent incapacity.

5. Inspection. Contractor's performance, place of business and records pertaining to this Contract are subject to monitoring, inspection, review and audit by authorized representatives of the CITY, the State of California, and the United States Government.

If the project or services set forth in Exhibit A shall be performed on City or other public property, City shall have the right to inspect such work without notice. If such project or services shall not be performed on City or other public property, City shall have the right to inspect such work upon reasonable notice.

6. Services. The project or services set forth in Exhibit A shall be performed to the full satisfaction and approval of City. In the event that the project or services set forth in Exhibit A are also itemized by price, City, in its sole discretion, may, upon notice to Contractor, delete certain items or services set forth in Exhibit A, in which case there shall be a corresponding reduction in the amount of compensation paid to Contractor.

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Contractor shall, at its own cost and expense, furnish all facilities and equipment necessary for Contractor to complete the project or perform the services required herein, unless otherwise provided in Exhibit A.

7. Records. Contractor shall keep and make available for inspection and copying by authorized representatives of the City, the State of California, and the United States Government, the Contractor's regular business records and such additional records pertaining to this Contract as may be required by the City.

Contractor shall retain all documents pertaining to this Contract for a period of five (5) years after this Contract's termination (or for any further period that is required by law) and until all Federal or State audits are complete and exceptions resolved for this contract's funding period. Upon request, CONTRACTOR shall make these records available to authorized representatives of the CITY, the State of California, and the United States Government.

Contractor shall keep full and detailed accounts, maintain records, and exercise such controls as may be necessary for proper financial management under this Contract. The Contractor’s accounting and control systems shall be satisfactory to City. Contractor's accounting systems shall conform to generally accepted accounting principles and all records shall provide a breakdown of total costs charged under this Contract, including properly executed payrolls, time records, utility bills, invoices and vouchers. The City shall be afforded prompt access to Contractor's records, books, and Contractor shall preserve such project records for a period of at least five (5 years after the termination of this Contract , or for such longer period as may be required by law.

Contractor shall permit City and its authorized representatives and accountants to inspect, examine and copy Contractor's books, records, accounts, correspondence, instructions, drawings, receipts, subcontracts, purchase orders, vouchers, memoranda and other data relating to the project or services set forth in Exhibit A, and any and all data relevant to this Contract at any reasonable time for the purpose of auditing and verifying statements, invoices, or bills submitted by Contractor pursuant to this Contract and shall provide such assistance as may be reasonably required in the course of such inspection. Contractor shall also allow City access to the record keeping and accounting personnel of Contractor.

City further reserves the right to examine and re-examine said books, records, accounts, and data during the five (5 year period following the termination of this Contract; and Contractor shall in no event dispose of, destroy, alter, or mutilate said books, records, accounts, and data in any manner whatever for five (5 years after the termination of this Contract.

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Pursuant to California Government Code § 10527, the parties to this Contract shall be subject to the examination and audit of representatives of the Auditor General of the State of California for a period of three (3) years after final payment under this Contract. The examination and audit shall be confined to those matters connected with the performance of this Contract including, but not limited to, the cost of administering this Contract.

8. Changes and Extra Work. All changes and/or extra work under this Contract shall be performed and paid for in accordance with the following:

Only the City Council or the City Manager may authorize extra and/or changed work. Contractor expressly recognizes that other City personnel are without authorization to either order extra and/or changed work or waive contract requirements. Failure of Contractor to secure the authorization for such extra and/or changed work shall constitute a waiver of any and all right to adjustment in contract price due to such unauthorized work and Contractor thereafter shall be entitled to no compensation whatsoever for performance of such extra and/or changed work.

If Contractor is of the opinion that any work which Contractor has been directed to perform is beyond the scope of this Contract and constitutes extra work, Contractor shall promptly notify City of the fact. The City shall make a determination as to whether or not such work is, in fact, beyond the scope of this Contract and constitutes extra work. In the event that City determines that such work does constitute extra work, City shall provide extra compensation to Contractor on a fair and equitable basis. A change order or Contract Amendment providing for such compensation for extra work shall be negotiated between City and Contractor and executed by Contractor and the appropriate City official.

In the event City determines that such work does not constitute extra work, Contractor shall not be paid extra compensation above that provided herein and if such determination is made by City staff, said determination may be appealed to the City Council; provided, however, a written appeal must be submitted to the City Manager within five (5) days after the staff's determination is sent to Contractor. Said written appeal shall include a description of each and every ground upon which Contractor challenges the staff's determination.

9. Additional Assistance. If this Contract requires Contractor to prepare plans and specifications, Contractor shall provide assistance as necessary to resolve any questions regarding such plans and specifications that may arise during the period of advertising for bids, and Contractor shall issue General Conditions/EJ/TE 09-26-07 4 of 12
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any necessary addenda to the plans and specifications as requested. In the event Contractor is of the opinion that City's requests for addenda and assistance is outside the scope of normal services, the parties shall proceed in accordance with the changes and extra work provisions of Section 8 of these General Conditions.

10. Professional Ability. Contractor acknowledges, represents and warrants that Contractor and its employees are skilled and able to competently provide the services hereunder, and possess all professional licenses, certifications, and approvals necessary to engage in their occupations.

City has relied upon the professional ability and training of Contractor as a material inducement to enter into this Contract. Contractor shall perform in accordance with generally accepted professional practices and standards of Contractor's profession. In the event that City, in its sole discretion, desires the removal of any person employed or retained by Contractor to perform services hereunder, such person shall be removed immediately upon receiving notice from City.

11. Business License. Contractor shall obtain a Richmond Business License before performing any services required under this Contract. The failure to so obtain such license shall be a material breach of this Contract and grounds for immediate termination by City; provided, however, that City may waive the business license requirement in writing under unusual or extraordinary circumstances without necessitating any modification of this Contract to reflect such waiver.

12. Termination Without Default. Notwithstanding any provision herein to the contrary, City may, in its sole and absolute discretion and without cause, terminate this Contract at any time prior to completion by Contractor of the project or services hereunder, immediately upon written notice to Contractor. Contractor may terminate this Contract at any time in its sole and absolute discretion and without cause upon 30 days' written notice to City. In the event of termination by either party, Contractor shall be compensated for: (1) all authorized work satisfactorily performed prior to the effective date of termination; (2) necessary materials or services of others ordered by Contractor for this Contract, prior to receipt of notice of termination, irrespective of whether such materials or services of others have actually been delivered, provided that Contractor is not able to cancel such orders. Compensation for Contractor in such event shall be determined by City in accordance with the percentage of the project or services completed by Contractor; and all of Contractor's finished or unfinished work product through the time of the City's last payment shall be transferred and assigned to City. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.

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13. Termination in the Event of Default. Should Contractor fail to perform any of its obligations hereunder, within the time and in the manner provided or otherwise violate any of the terms of this Contract, City may immediately terminate this Contract by giving written notice of such termination, stating the reasons for such termination. Contractor shall be compensated as provided in Section 12 of these General Conditions; provided, however, there shall be deducted from such amount the amount of damage, including attorney's fees, expert witness fees and costs, if any, sustained by City by virtue of Contractor's breach of this Contract. Additionally, in the event of such termination, the City may proceed with the work in any reasonable manner it chooses.

14. Conflict of Interest. Contractor acknowledges, represents and warrants that Contractor shall avoid all conflicts of interest (as defined under any federal, state or local statute, rule or regulation, or at common law) with respect to this Contract. Contractor further acknowledges, represents and warrants that no City official or employee has any economic interest, as defined in Title 2, California Code of Regulations §§ 18703.1 through 18703.5, with Contractor that would invalidate this Contract. Contractor acknowledges that in the event that Contractor shall be found by any judicial or administrative body to have any conflict of interest (as defined above) with respect to this Contract, all consideration received under this Contract shall be forfeited and returned to City forthwith. This provision shall survive the termination of this Contract for one (1) year.

15. Indemnification. To the fullest extent permitted by law, Contractor shall indemnify, defend and hold harmless City and its officers, employees, elected and appointed officials, and volunteers (the "Indemnified Parties") from and against any and all claims, demands, causes of action, lawsuits (whether at law, equity or both), proceedings, liabilities, losses, damages, expenses, costs (including without limitation attorney's fees and costs and expert witness fees), judgments, penalties, and liens of every nature resulting from injury to or death sustained by any person (including Contractor's employees), or damage to property of any kind, or any other injury or damage whatsoever, which injury, death or damage arises out of or is in any way connected with Contractor's performance of work hereunder or its failure to comply with any of its obligations contained in this Contract, or its failure to comply with any current or prospective law, regardless of Contractor's fault or negligence, including any of the same resulting from the alleged or actual negligent act or omission of an Indemnified Party, except that said indemnity shall not be applicable to injury, death or damage to property arising from the sole or active negligence or willful misconduct of City, their officers, agents, or servants.

Notwithstanding the foregoing, in the event a particular design, process or product of a particular manufacturer is specified by City in writing, City General Conditions/EJ/TE 09-26-07 6 of 12
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shall defend, indemnify and hold Contractor harmless from any suits or claims of patent or copyright infringement arising out of Contractor's use of those specified designs, processes or products. City does not, however, consent to or authorize the unauthorized, unlicensed or otherwise impermissible use of any patented or copyrighted designs, processes, or products by Contractor. Therefore, if Contractor has any reason to believe the use of a specified design, process or product would result in the infringement of any patents or copyrights, Contractor shall promptly provide written notice thereof to City.

If Contractor is subject to a claim of patent or copyright infringement, then Contractor hereby agrees to provide City prompt notice of any such claim, and to permit City to assume and control the defense of such action, with counsel selected by City. Contractor shall not enter into any settlement of any such claim without City's prior written consent, which shall not be unreasonably withheld.

This indemnification obligation shall survive this Contract and shall not be limited by any term of any insurance policy required under this Contract; provided however, that if this Contract is for design professional services, this indemnity provision is limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional (as defined therein).

16. Safety. Contractor acknowledges that the City is committed to the highest standards of workplace safety. Contractor shall perform all work hereunder in full compliance with applicable local, state and federal safety requirements including but not limited to Occupational Safety and Health Administration requirements, and shall assume sole and complete responsibility for the safety of Contractor's employees and any subContractor's employees. If a death, serious personal injury or substantial property damage occurs in connection with the performance of this Contract, Contractor shall immediately notify the City by telephone.

17. Insurance. Insurance requirements are set forth in Exhibit F to this Contract. Contractor shall abide by the insurance requirements set forth in said Exhibit F.

18. Non-Liability of Officials and Employees of the City. No official or employee of the City shall be personally liable for any default or liability under this Contract.

19. Compliance with Laws. Contractor shall comply with all federal, state and local laws, statutes, ordinances, rules and regulations, and the orders and decrees of any courts or administrative bodies or tribunals, with respect to this Contract, including without limitation environmental laws, employment General Conditions/EJ/TE 09-26-07 7 of 12
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discrimination laws and prevailing wage laws. Compliance under this provision includes compliance with all provisions of the Richmond Municipal Code ("Municipal Code"), including Chapters 2.50, 2.52, 2.56, and 2.60, if applicable.

Contractor acknowledges that under § 2.60.070 of the Municipal Code ("Living Wage Ordinance"), Contractor shall promptly provide to City documents and information verifying its compliance with the Living Wage Ordinance. Also as prescribed in § 2.60.070, Contractor shall notify each of its affected employees with regards to the wages that are required to be paid pursuant to the Living Wage Ordinance.

Contractor shall comply with § 2.28.030 of the Municipal Code, obligating every Contractor or subcontractor under a contract or subcontract with the City for public work or for goods or for services to refrain from discriminatory employment or subcontracting practices on the basis of race, color, sex, sexual orientation, religious creed, national origin or ancestry of any employee, any applicant for employment or any potential subcontractor.

Contractor acknowledges that the City’s Drug Free Workplace Policy, Violence in the Workplace Policy and the Policy Against Workplace Harassment, are available on the City’s website at
http://www.ci.richmond.ca.us/workplacepolicies . Contractor agrees to abide by the terms and conditions of said policies.

20. Limitations upon Subcontracting and Assignment. This Contract binds the heirs, successors, assigns and representatives of Contractor. The Contractor shall not enter into subcontracts for any work contemplated under this Contract and shall not assign this Contract, nor any portion hereof or monies due or to become due, without the prior written consent of the City Council or its designee.

Contractor acknowledges that the services which Contractor shall provide under this Contract are unique, personal services which, except as otherwise provided herein, Contractor shall not assign or sublet to any other party without the prior written approval of City, which approval may be withheld in City's sole and absolute discretion. In the event that City, in writing, approves any assignment or subletting of this Contract or the retention of subcontractors by Contractor, Contractor shall provide to City upon request copies of each and every subcontract contract prior to the execution thereof by Contractor and subcontractor. Any assignment by Contractor of any or all of its rights under this Contract without first obtaining City's prior written consent shall be a default under this Contract.

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The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Contractor (if applicable), or of the interest of any general partner or joint venturer or syndicate member if Contractor is a partnership or joint-venture or syndicate, which shall result in a change of control of Contractor, shall be deemed an assignment. For this purpose, control shall mean fifty percent or more of the voting power or twenty-five percent or more of the assets of the corporation, partnership or joint-venture.

21. Integration. This Contract constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes any previous oral or written agreement; provided, however, that correspondence or documents exchanged between Contractor and City may be used to assist in the interpretation of the Exhibits to this Contract.

22. Modifications and Amendments. This Contract may be modified or amended only by a change order or Contract Amendment executed by both parties and approved as to form by the City Attorney.

23. Conflicting Provisions. In the event of a conflict between these General Conditions and those of any Exhibit or attachment hereto, these General Conditions shall prevail; provided, however, that any Special Conditions as set forth in Exhibit E shall prevail over these General Conditions. In the event of a conflict between the terms and conditions of any two or more Exhibits or attachments hereto, those prepared by City shall prevail over those prepared by the Contractor, and the terms and conditions preferred by the City shall prevail over those preferred by the Contractor.

24. Non-exclusivity. Notwithstanding any provision herein to the contrary, the services provided by Contractor hereunder shall be non-exclusive, and City reserves the right to employ other Contractors in connection with the project.

25. Exhibits. All Exhibits hereto are made a part hereof and incorporated herein by reference; provided, however, that any language in Exhibit A which does not pertain to the project description, proposal, scope of services, or method of compensation (as applicable) , or any corresponding responsibilities of City, shall be deemed extraneous to, and not a part of, this Contract.

26. Force Majeure. Neither party hereto shall be considered in default in the performance of its obligations hereunder to the extent that the performance of such an obligation is prevented or delayed by reason of acts of God, strikes, boycotts, lock-outs, inability to procure materials not related to the price thereof, failure of power, restrictive governmental laws and regulations enacted after the date of this Contract, riots, civil unrest, General Conditions/EJ/TE 09-26-07 9 of 12
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acts of terrorism, insurrection, war, declaration of a state or national emergency or other reasons of a like nature not within the reasonable control of such party.

27. Time of the Essence. Time is of the essence of this Contract. Contractor and City agree that any time period set forth in Exhibit A represents their best estimates with respect to completion dates and both Contractor and City acknowledge that departures from the schedule may occur.

Therefore, both Contractor and City will use reasonable efforts to notify one another of changes to the schedule. Contractor shall not be responsible for performance delays caused by others, or delays beyond Contractor's control, and such delays shall extend the times for performance of Contractor's work.

28. Confidentiality. Contractor agrees to comply with, and to require its employees, agents and partners to comply with, all applicable State or Federal statutes or regulations respecting confidentially, including but not limited to, the identity of persons served under this Contract, their records, or services provided them, and assures that:

All applications and records concerning any individual made or kept by Contractor or any public officer or agency in connection with the administration of or relating to services provided under this Contract will be confidential, and will not be open to examination for any purposes not directly connected with the administration of such service.

No person will publish or disclose or permit or cause to be published or disclosed, any list of persons receiving services, except as may be required in the administration of such service.

29. Third Parties. Nothing herein shall be interpreted as creating any rights or benefits in any third parties. For purposes hereof, transferees or assignees as permitted under this Contract shall not be considered "third parties."

30. Governing Law. This Contract shall be construed in accordance with the law of the State of California without regard to principles of conflicts of law.

This Contract is made in Contra Costa County, California, and any action relating to this Contract shall be instituted and prosecuted in the courts of Contra Costa County, California.

31. Nonrenewal. Contractor understands and agrees that there is no representation, implication, or understanding that the services provided by Contractor under this Contract will be purchased or renewed by the City under a new contract following expiration or termination of this Contract, and waives all rights or claims to notice or hearing respecting any failure General Conditions/EJ/TE 09-26-07 10 of 12
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by City to continue the purchase of all or any failure to continue purchase of all or any such services from Contractor.

32. Claims. Any claim by Contractor against City hereunder shall be subject to Government Code §§ 800 et seq. The claims presentation provisions of said Act are hereby modified such that the presentation of all claims hereunder to the City shall be waived if not made within six months after accrual of the cause of action.

33. Interpretation. This Contract shall be interpreted as if drafted by both parties.

34. Warranty. In the event that any product shall be provided to the City as part of this Contract, Contractor warrants as follows: Contractor possesses good title to the product and the right to transfer the product to City; the product shall be delivered to the City free from any security interest or other lien; the product meets any specifications contained herein; the product shall be free from material defects in materials and workmanship under normal use for a period of one (1) year from the date of delivery; and the product shall be fit for its intended purpose(s). Notwithstanding the foregoing, consumable and maintenance items (such as light bulbs and batteries) shall be warranted for a period of one hundred and eighty (180) days from the date of delivery. All repairs during the warranty period shall be promptly performed by Contractor, at Contractor's expense, including shipping.

35. Severability. In the event that any of the provisions or portions or applications thereof of this Contract are held to be unenforceable or invalid by any court of competent jurisdiction, City and Contractor shall negotiate an equitable adjustment in the provisions of the Contract with a view toward effecting the purpose of this Contract, and the validity and enforceability of the remaining provisions or portions or applications thereof, shall not be affected thereby.

36. Authority. City warrants and represents that the signatory hereto (the Mayor of the City of Richmond or the City Manager) is duly authorized to enter into and execute this Contract on behalf of City. The party signing on behalf of Contractor warrants and represents that he or she is duly authorized to enter into and execute this Contract on behalf of Contractor, and shall be personally liable to City if he or she is not duly authorized to enter into and execute this Contract on behalf of Contractor.

37. Waiver. The waiver by City of any breach of any term or provision of this Contract shall not be construed as a waiver of any subsequent breach.

Inspections or approvals, or statements by any officer, agent or employee of the City relating to the Contractor’s performance, or payments General Conditions/EJ/TE 09-26-07 11 of 12
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therefore, or any combination of these acts, shall not relieve the Contractor’s obligation to fulfill this Contract as prescribed; nor shall the City be thereby stopped from bringing any action for damages or enforcement arising from any failure to comply with any of the terms and conditions of this Contract.

38. Possessory Interest. If this Contract results in the Contractor having possession of, claim to or right to the possession of land or improvements, but does not vest ownership of the land or improvements in the same person, or if this Contract results in the placement of taxable improvements on tax exempt land (Revenue and Taxation Code 107), such interest or improvements may represent a possessory interest subject to property tax, and Contractor may be subject to the payment of property taxes levied on such interest.

39. Performance and Final Acceptance.

Contractor represents that it is experienced, qualified, registered, licensed, equipped, organized and financed to perform the services under this Contract.

Contractor shall perform the services under this Contract with that degree of skill and judgment normally exercised by professional firms performing services of a similar nature in the State of California, and shall be responsible for the professional quality, technical accuracy and coordination of the services it performs under this Contract. In addition to the other rights and remedies which City may have, Contractor shall, at its own expense, correct any services which fail to meet the above standard.

City shall provide Contractor an opportunity to cure errors and omission which may be disclosed during the review of submittals, with no increase in the authorized Contract Payment Limit. Should Contractor fail to make necessary corrections in a timely manner, such corrections shall be made by the City and the cost thereof shall be charged to Contractor.

If warranted, City shall determine, and Contractor may request such determination, that Contractor has satisfactorily completed performance of this Contract. Upon such determination, City shall issue to Contractor a written Notice of Final Acceptance, after which Contractor shall not incur further costs under this Contract. Contractor shall respond to such Notice of Final Acceptance by executing and submitting to City a Release and Certificate of Final Payment.

40. Survival. The rights and obligations of the parties which by their nature survive termination or completion of the services covered by this Contract shall remain in full force and effect after termination or completion.

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For the Contract between the City of
Richmond and

EXHIBIT E

SPECIAL CONDITIONS
The General Conditions are hereby amended to include the following modifications and/or provisions (if applicable):
1850
For the Contract between the City of
Richmond and

EXHIBIT F

INSURANCE PROVISIONS
During the entire term of this Contract and any extension or modification thereof, the CONTRACTOR shall keep in effect insurance policies meeting the insurance requirements specified in the insurance provisions which are attached hereto and incorporated herein by this reference.
1851

City of Richmond Insurance Requirements – Type 5:

Vendors, Suppliers, Small Grant Recipients & Nonprofit
Organizations
Type 5 - Page 1 of 3
Revised: September 2011
In all instances where CONTRACTOR or its representatives will be conducting business and/or providing services to the City of Richmond (City), or will be awarded City of Richmond (City) funds to provide programs or services, the City requires the following MINIMUM insurance requirements and limits.

CONTRACTOR shall procure and maintain for the duration of the contract, agreement, or other order for work, services or supplies, insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder and the results of that work by the CONTRACTOR, its agents, representatives, or subcontractors. Maintenance of proper insurance coverage is a material element of the contract. Failure to maintain or renew coverage or to provide evidence of renewal may be treated by the City as a material breach of contract.

CONTRACTOR agrees that in the event of loss due to any of the perils for which it has agreed to provide Commercial General Liability insurance, CONTRACTOR shall look solely to its insurance for recovery.

CONTRACTOR hereby grants to CITY, on behalf of any insurer providing Commercial General Liability insurance to either CONTRACTOR or CITY with respect to the services of CONSULTANT herein, a waiver of any right to subrogation which any such insurer of said CONTRACTOR may acquire against the CITY by virtue of the payment of any loss under such insurance.

Original, signed certificates and original, separate policy endorsements, naming the City as an additional insured for general liability, as well as a waiver of subrogation for Workers’ Compensation insurance, shall be received and approved by the City before any work may begin. However, failure to do so shall not operate as a waiver of these insurance requirements.

City reserves the right to modify or require additional coverages for specific risk exposures depending on scope of CONTRACTORS work.

Minimum coverage is detailed below. The policy limits of coverage shall be made available to the full limits of the policy. The minimum limits stated herein shall not serve to reduce the policy limits of coverage of CONTRACTOR.

Minimum Scope of Insurance – the following forms shall be provided and coverage shall be at least as broad as the following:

1. Insurance Services Office Commercial General Liability coverage (ISO Occurrence Form CG 0001)

2. Insurance Services Office Automobile Liability coverage (ISO Form CA 0001, Code 1, Any Auto)

3. Original and Separate Additional Insured Endorsements for General Liability (ISO Form CG 20 10 11/85 or its equivalent) with primary and non-contributory language.

4. Workers’ Compensation insurance as required by the State of California including Employer’s Liability (for CONTRACTOR’s with employees);

5. Original and Separate Waiver of Subrogation for Workers’ Compensation Insurance.

6. Fidelity Bond/Crime Coverage – in an amount stipulated by City depending upon scope of contract.

Required Coverage Minimum Limits
Workers’ Compensation and
Employers’ Liability
Statutory limits as required by the State of California including $1 million Employers’ Liability per accident, per employee for bodily injury or disease.

If CONTRACTOR is self-insured, provide a certificate of Permission to SelfInsure, signed by the California Department of Industrial Relations and SelfInsurance. If contractor is a sole proprietor (has no employees) than contractor must sign “Contractor Release of Liability” located at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.

General Liability
(primary and excess limits
combined)
$1,000,000 per occurrence for bodily injury, personal injury and property damage. If the policy includes a general aggregate, either the general aggregate shall apply separately to this project, service or location or the minimum required aggregate limit shall be twice the per occurrence limit ($4 million aggregate).

Policy shall also include coverage for liability arising out of the use and operation of any City-owned or City-furnished equipment used or operated by the CONTRACTOR, its personnel, agents or subcontractors.

Policy shall be endorsed to name the City of Richmond as an additional insured per the conditions detailed below.
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City of Richmond Insurance Requirements – Type 5:

Vendors, Suppliers, Small Grant Recipients & Nonprofit
Organizations
Type 5 - Page 2 of 3
Revised: September 2011
Automobile Liability (If auto is used.) $1,000,000 per occurrence for bodily injury and property damage.

Fidelity Bond/Crime Coverage
(Applies if receiving City
funds.)
In an amount stipulated by City depending upon the scope of Contract. (Usually based upon the amount of money the Contractor is handling that could be embezzled over a period of time.)
Required Policy Conditions
Additional Insured Endorsement Applicable to General Liability Coverage.

The City of Richmond, its officers, officials, employees, agents and volunteers are to be named as additional insureds for all liability arising out of the operations by or on behalf of the named insured including bodily injury, deaths and property damage or destruction arising in any respect directly or indirectly in the performance of this contract.

ISO form CG 20 10 (11/85) or its equivalent is required. The endorsement must not exclude products and completed operations coverage. If it does, then CG 20 37 (10/01) is also required.

SAMPLE ENDORSEMENT can be found at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.

Waiver of Subrogation
Endorsement Form
Contractor’s insurer will provide a Waiver of Subrogation in favor of the City for Workers’ Compensation Insurance providing coverage during the life of this contract.

SAMPLE ENDORSEMENT can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61.

Primary and Noncontributory The contractor’s insurance coverage must be primary coverage as it pertains to the City, its officers, officials, employees, agents and volunteers. Any insurance or self insurance maintained by the City is wholly separate from the insurance of the contractor and in no way relieves the contractor from its responsibility to provide insurance.

A. M. Best Rating A:VII or Better. If the A.M. Best Rating falls below the required rating, CONTRACTOR must replace coverage immediately and provide notice to City.

Deductibles and Self-Insured
Retentions
Any deductible or self-insured retention must be declared to and approved by the City. At the option of the City either the insurer shall reduce or eliminate such deductibles or self-insured retention as respects the City or the contractor shall procure a financial guarantee in an amount equal to the deductible or self-insured retention guaranteeing payment of losses and related investigations, claims administration and defense expenses.

Contractor is responsible for satisfaction of the deductible and/or self-insured retention for each loss.

Umbrella/Excess Liability Policies
If an Umbrella or Excess Liability Policy is used to meet the liability limits, coverage shall be as broad as specified for underlying coverages and cover those insured in the underlying policies. 1853
City of Richmond Insurance Requirements – Type 5:

Vendors, Suppliers, Small Grant Recipients & Nonprofit
Organizations
Type 5 - Page 3 of 3
Revised: September 2011
Subcontractors
CONTRACTOR shall include all subcontractors as insured under its policies or shall furnish to the City for review and approval, separate certificates and endorsements for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements stated herein.

CONTRACTOR agrees to defend and indemnify the City of Richmond for any damage resulting to it from failure of either CONTRACTOR or any subcontractor to take out or maintain the required insurance policies. The fact that insurance is obtained by CONTRACTOR, and/or CONTRACTOR’s subcontractors, will not be deemed to release or diminish the liability of CONTRACTOR, including, without limitation, liability under the indemnity provisions of this contract. Damages recoverable by CITY from CONTRACTOR or any third party will not be limited by the amount of the required insurance coverage.

Verification of Coverage
All original certificates and endorsements shall be received and approved by the City before work may begin.

The City of Richmond reserves the right to require complete, certified copies of all required insurance policies including endorsements affecting the coverage at any time.

Original insurance certificates and required policy endorsements shall be mailed or delivered to the Designated Project Manager for the City of Richmond.

Insurance certificates and endorsements may be faxed to the Designated Project Manager. However, Contractor must mail the original certificates and endorsements to Designated Project Manager once faxed.

Continuous Coverage
CONTRACTOR shall maintain the required insurance for the life of the contract. Should the CONTRACTOR cease to have insurance as required during this time, all work by the CONTRACTOR pursuant to this agreement shall cease until insurance acceptable to the City is provided. In the event that CONTRACTOR fails to comply with the City’s insurance requirements, the City may take such action as it deems necessary to protect the City’s interests. Such action may include but is not limited to termination of the contract, withholding of payments, or other actions as the City deems appropriate.

If services or the scope of work extend beyond the expiration dates of the required insurance policies initially approved by the City, CONTRACTOR must provide updated certificates and endorsements indicating that the required coverage, terms and conditions are still in place. Renewal certificates and updated endorsements shall be mailed to the Designated Project Manager.

Cancellation
CONTRACTOR shall ensure that coverage shall not be cancelled, reduced or otherwise materially changed except after thirty (30) days’ prior written notice has been given to the City.

Reporting Requirements
Any failure to comply with reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers.

Consistent with Public Policy
The insuring provisions, insofar as they may be judged to be against public policy shall be void and unenforceable only to the minimum extent necessary so that the remaining terms and provisions herein may be consistent with public policy and thus enforceable.
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Richmond Police Activities League
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May 16, 2023
Public Works
DATE: May 16, 2023
TO: Mayor Martinez and Members of the City Council
FROM: Daniel Chavarria, PE, Director of Public Works
Dee Karnes, Fleet Maintenance Superintendent
Subject: Purchase of Four Police Motorcycles
FINANCIAL IMPACT: The funds are available in the Public Works Fleet Maintenance Capital Improvement Projects Fiscal Year
2022-2023 budget (50336031-400705-03B04).

PREVIOUS COUNCIL
ACTION:

N/A

STATEMENT OF THE
ISSUE:

The Department of Public Works is requesting City
Council approval for the purchase of four replacement
motorcycles to be used by the Police Department.

RECOMMENDED ACTION: APPROVE the purchase of four 2023 BMW R 1250 RT motorcycles from Long Beach BMW, in an aggregate
amount not to exceed $160,000, including a contingency
of $10,158.44 – Public Works (Daniel Chavarria 510-620- 5478 / Dee Karnes 510-231-3044). This item was
continued from the April 18, 2023, and May 2, 2023,
meetings.

DISCUSSION:

The Fleet Maintenance division must replace four 2015 model year BMW motorcycles that have each met and exceeded their useful lifecycle of seven years. Three of the four motorcycles have been wrecked and are non-operable.

The new motorcycles will meet updated air emission standards and will be used by the Police Department’s Traffic division. The decision to replace a vehicle, including a AGENDA
REPORT
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May 16, 2023
motorcycle, is based on lifecycle and includes the age, mileage, and repair costs over the life of the vehicle. The vehicle is then rated on a point system that is generated through an equipment replacement report. The highest number for each of these three factors is five for a total of 15 points.

Once a vehicle gets to a total of ten or higher points, it should be added to the replacement list. Fleet Maintenance does not currently maintain or service the BMW motorcycles; therefore, a mileage report is not available in our fleet software.

There are no BMW motorcycle dealerships in the City of Richmond. The Finance department has approved this purchase in compliance with the Richmond Municipal Code, Section 2.52.320 Piggyback procurement. This allows for a “piggyback” purchase using another agency’s purchase contract if it is in the best interest of the City.

Based on the Los Angeles County Sheriff’s purchase order 22009476-1, Public Works staff is recommending the purchase of four (4) BMW motorcycles from Long Beach BMW Motorcycles in the amount of $149,841.56. A contingency of $10,158.44 has been added to the quoted price, for an aggregate purchase of $160,000, to allow for any change orders and/or price changes at the time of delivery.

DOCUMENTS ATTACHED:

Attachment 1 – Quote 1001
Attachment 2 – Los Angeles County Sheriff Purchase Order 22009476-1 1859
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May 16, 2023
Public Works
DATE: May 16, 2023
TO: Mayor Martinez and Members of the City Council
FROM: Daniel Chavarria, PE, Director of Public Works
Dee Karnes, Fleet Maintenance Superintendent
Subject: Purchase of One Crosswind Street Sweeper
FINANCIAL IMPACT: The funds are available in the Public Works Fleet Maintenance Capital Improvement Projects Fiscal Year
2022-2023 budget (50336031-400705-03C04)

PREVIOUS COUNCIL
ACTION:

N/A

STATEMENT OF THE
ISSUE:

The Department of Public Works is requesting City
Council approval for the purchase of one replacement
street sweeper to be used by the Street Sweeping
division.

RECOMMENDED ACTION: APPROVE the purchase of a new Elgin Crosswind 1 Regenerative Air Street Sweeper from Owen Equipment
in an amount not to exceed $430,000, including a
contingency of $38,708.32 – Public Works (Daniel
Chavarria 510-620-5478 / Dee Karnes 510-231-3044).

This item was continued from the April 18, 2023, and
May 2, 2023, meetings.

DISCUSSION:

The Fleet Maintenance division must replace a 2017 model-year street sweeper that has met and exceeded its useful lifecycle of five years. The decision to replace a vehicle or equipment based on lifecycle includes the age, mileage, and repair costs over the life of the unit. The unit is then rated on a point system that is generated through an AGENDA
REPORT
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May 16, 2023
equipment replacement report. The highest number for each of these three factors is five for a total of 15 points. Once the unit gets a rating of ten or higher, it should be added to the replacement list.

The new street sweeper will meet updated air emission standards and will be used by the Street Sweeping division of Public Works.

The finance department has approved this purchase to be in compliance with the Richmond Municipal Code Section 2.52.320. Piggyback procurement allows for a “piggyback” purchase using another agency’s purchase contract if it is in the best interest of the City of Richmond.

Based on the Sourcewell Contract 093021-ELG pricing, Public Works staff is recommending the purchase of the Elgin street sweeper in the amount of $391,291.68 from Owen Equipment as the authorized dealership for Elgin. There are no manufacturers of Elgin street sweepers in the City of Richmond. A contingency of $38,708.32 has been added to the quoted price, for an aggregate purchase of $430,000, to allow for any change orders and/or price changes at the time of delivery.

DOCUMENTS ATTACHED:

Attachment 1 – Quote 2022-49146
Attachment 2 – Sourcewell Contract 093021-ELG
Attachment 3 – Equipment Mileage Report
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093021-ELG
Rev. 3/2021 1
Solicitation Number: RFP #093021

CONTRACT
This Contract is between Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 (Sourcewell) and Elgin Sweeper Company, 1300 West Bartlett Road, Elgin, IL 60120 (Supplier).

Sourcewell is a State of Minnesota local government unit and service cooperative created under the laws of the State of Minnesota (Minnesota Statutes Section 123A.21) that offers cooperative procurement solutions to government entities. Participation is open to eligible federal, state/province, and municipal governmental entities, higher education, K-12 education, nonprofit, tribal government, and other public entities located in the United States and Canada.

Sourcewell issued a public solicitation for Street Sweepers and Specialty Sweepers, with Related Equipment, Accessories, and Supplies from which Supplier was awarded a contract.

Supplier desires to contract with Sourcewell to provide equipment, products, or services to Sourcewell and the entities that access Sourcewell’s cooperative purchasing contracts (Participating Entities).

1. TERM OF CONTRACT
A. EFFECTIVE DATE. This Contract is effective upon the date of the final signature below.

B. EXPIRATION DATE AND EXTENSION. This Contract expires November 16, 2025, unless it is cancelled sooner pursuant to Article 22. This Contract may be extended one additional year upon the request of Sourcewell and written agreement by Supplier.

C. SURVIVAL OF TERMS. Notwithstanding any expiration or termination of this Contract, all payment obligations incurred prior to expiration or termination will survive, as will the following: Articles 11 through 14 survive the expiration or cancellation of this Contract. All rights will cease upon expiration or termination of this Contract.

2. EQUIPMENT, PRODUCTS, OR SERVICES
A. EQUIPMENT, PRODUCTS, OR SERVICES. Supplier will provide the Equipment, Products, or Services as stated in its Proposal submitted under the Solicitation Number listed above. 







 




ATTACHMENT 2
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Supplier’s Equipment, Products, or Services Proposal (Proposal) is attached and incorporated into this Contract.

All Equipment and Products provided under this Contract must be new and the current model.

Supplier may offer close-out or refurbished Equipment or Products if they are clearly indicated in Supplier’s product and pricing list. Unless agreed to by the Participating Entities in advance, Equipment or Products must be delivered as operational to the Participating Entity’s site.

This Contract offers an indefinite quantity of sales, and while substantial volume is anticipated, sales and sales volume are not guaranteed.

B. WARRANTY. Supplier warrants that all Equipment, Products, and Services furnished are free from liens and encumbrances, and are free from defects in design, materials, and workmanship.

In addition, Supplier warrants the Equipment, Products, and Services are suitable for and will perform in accordance with the ordinary use for which they are intended. Supplier’s dealers and distributors must agree to assist the Participating Entity in reaching a resolution in any dispute over warranty terms with the manufacturer. Any manufacturer’s warranty that extends beyond the expiration of the Supplier’s warranty will be passed on to the Participating Entity.

C. DEALERS, DISTRIBUTORS, AND/OR RESELLERS. Upon Contract execution and throughout the Contract term, Supplier must provide to Sourcewell a current means to validate or authenticate Supplier’s authorized dealers, distributors, or resellers relative to the Equipment, Products, and Services offered under this Contract, which will be incorporated into this Contract by reference. It is the Supplier’s responsibility to ensure Sourcewell receives the most current information.

3. PRICING
All Equipment, Products, or Services under this Contract will be priced at or below the price stated in Supplier’s Proposal.

When providing pricing quotes to Participating Entities, all pricing quoted must reflect a Participating Entity’s total cost of acquisition. This means that the quoted cost is for delivered Equipment, Products, and Services that are operational for their intended purpose, and includes all costs to the Participating Entity’s requested delivery location.

Regardless of the payment method chosen by the Participating Entity, the total cost associated with any purchase option of the Equipment, Products, or Services must always be disclosed in the pricing quote to the applicable Participating Entity at the time of purchase.

A. SHIPPING AND SHIPPING COSTS. All delivered Equipment and Products must be properly packaged. Damaged Equipment and Products may be rejected. If the damage is not readily apparent at the time of delivery, Supplier must permit the Equipment and Products to be 







 




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returned within a reasonable time at no cost to Sourcewell or its Participating Entities.

Participating Entities reserve the right to inspect the Equipment and Products at a reasonable time after delivery where circumstances or conditions prevent effective inspection of the Equipment and Products at the time of delivery. In the event of the delivery of nonconforming Equipment and Products, the Participating Entity will notify the Supplier as soon as possible and the Supplier will replace nonconforming Equipment and Products with conforming Equipment and Products that are acceptable to the Participating Entity.

Supplier must arrange for and pay for the return shipment on Equipment and Products that arrive in a defective or inoperable condition.

Sourcewell may declare the Supplier in breach of this Contract if the Supplier intentionally delivers substandard or inferior Equipment or Products.

B. SALES TAX. Each Participating Entity is responsible for supplying the Supplier with valid taxexemption certification(s). When ordering, a Participating Entity must indicate if it is a taxexempt entity.

C. HOT LIST PRICING. At any time during this Contract, Supplier may offer a specific selection of Equipment, Products, or Services at discounts greater than those listed in the Contract.

When Supplier determines it will offer Hot List Pricing, it must be submitted electronically to Sourcewell in a line-item format. Equipment, Products, or Services may be added or removed from the Hot List at any time through a Sourcewell Price and Product Change Form as defined in Article 4 below.

Hot List program and pricing may also be used to discount and liquidate close-out and discontinued Equipment and Products as long as those close-out and discontinued items are clearly identified as such. Current ordering process and administrative fees apply. Hot List Pricing must be published and made available to all Participating Entities.

4. PRODUCT AND PRICING CHANGE REQUESTS
Supplier may request Equipment, Product, or Service changes, additions, or deletions at any time. All requests must be made in writing by submitting a signed Sourcewell Price and Product Change Request Form to the assigned Sourcewell Supplier Development Administrator. This approved form is available from the assigned Sourcewell Supplier Development Administrator.

At a minimum, the request must:
x Identify the applicable Sourcewell contract number;
x Clearly specify the requested change;
x Provide sufficient detail to justify the requested change; 







 




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x Individually list all Equipment, Products, or Services affected by the requested change, along with the requested change (e.g., addition, deletion, price change); and x Include a complete restatement of pricing documentation in Microsoft Excel with the effective date of the modified pricing, or product addition or deletion. The new pricing restatement must include all Equipment, Products, and Services offered, even for those items where pricing remains unchanged.

A fully executed Sourcewell Price and Product Change Request Form will become an amendment to this Contract and will be incorporated by reference.

5. PARTICIPATION, CONTRACT ACCESS, AND PARTICIPATING ENTITY REQUIREMENTS

A. PARTICIPATION. Sourcewell’s cooperative contracts are available and open to public and nonprofit entities across the United States and Canada; such as federal, state/province, municipal, K-12 and higher education, tribal government, and other public entities.

The benefits of this Contract should be available to all Participating Entities that can legally access the Equipment, Products, or Services under this Contract. A Participating Entity’s authority to access this Contract is determined through its cooperative purchasing, interlocal, or joint powers laws. Any entity accessing benefits of this Contract will be considered a Service Member of Sourcewell during such time of access. Supplier understands that a Participating Entity’s use of this Contract is at the Participating Entity’s sole convenience and Participating Entities reserve the right to obtain like Equipment, Products, or Services from any other source.

Supplier is responsible for familiarizing its sales and service forces with Sourcewell contract use eligibility requirements and documentation and will encourage potential participating entities to join Sourcewell. Sourcewell reserves the right to add and remove Participating Entities to its roster during the term of this Contract.

B. PUBLIC FACILITIES. Supplier’s employees may be required to perform work at governmentowned facilities, including schools. Supplier’s employees and agents must conduct themselves in a professional manner while on the premises, and in accordance with Participating Entity policies and procedures, and all applicable laws.

6. PARTICIPATING ENTITY USE AND PURCHASING
A. ORDERS AND PAYMENT. To access the contracted Equipment, Products, or Services under this Contract, a Participating Entity must clearly indicate to Supplier that it intends to access this Contract; however, order flow and procedure will be developed jointly between Sourcewell and Supplier. Typically, a Participating Entity will issue an order directly to Supplier or its authorized subsidiary, distributor, dealer, or reseller. If a Participating Entity issues a purchase order, it may use its own forms, but the purchase order should clearly note the applicable Sourcewell 







 




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contract number. All Participating Entity orders under this Contract must be issued prior to expiration or cancellation of this Contract; however, Supplier performance, Participating Entity payment obligations, and any applicable warranty periods or other Supplier or Participating Entity obligations may extend beyond the term of this Contract.

Supplier’s acceptable forms of payment are included in its attached Proposal. Participating Entities will be solely responsible for payment and Sourcewell will have no liability for any unpaid invoice of any Participating Entity.

B. ADDITIONAL TERMS AND CONDITIONS/PARTICIPATING ADDENDUM. Additional terms and conditions to a purchase order, or other required transaction documentation, may be negotiated between a Participating Entity and Supplier, such as job or industry-specific requirements, legal requirements (e.g., affirmative action or immigration status requirements), or specific local policy requirements. Some Participating Entities may require the use of a Participating Addendum; the terms of which will be negotiated directly between the Participating Entity and the Supplier. Any negotiated additional terms and conditions must never be less favorable to the Participating Entity than what is contained in this Contract.

C. SPECIALIZED SERVICE REQUIREMENTS. In the event that the Participating Entity requires service or specialized performance requirements not addressed in this Contract (such as ecommerce specifications, specialized delivery requirements, or other specifications and requirements), the Participating Entity and the Supplier may enter into a separate, standalone agreement, apart from this Contract. Sourcewell, including its agents and employees, will not be made a party to a claim for breach of such agreement.

D. TERMINATION OF ORDERS. Participating Entities may terminate an order, in whole or in part, immediately upon notice to Supplier in the event of any of the following events:

1. The Participating Entity fails to receive funding or appropriation from its governing body at levels sufficient to pay for the equipment, products, or services to be purchased; or

2. Federal, state, or provincial laws or regulations prohibit the purchase or change the Participating Entity’s requirements.

E. GOVERNING LAW AND VENUE. The governing law and venue for any action related to a Participating Entity’s order will be determined by the Participating Entity making the purchase.

7. CUSTOMER SERVICE
A. PRIMARY ACCOUNT REPRESENTATIVE. Supplier will assign an Account Representative to Sourcewell for this Contract and must provide prompt notice to Sourcewell if that person is changed. The Account Representative will be responsible for:









 




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x Maintenance and management of this Contract;
x Timely response to all Sourcewell and Participating Entity inquiries; and x Business reviews to Sourcewell and Participating Entities, if applicable.

B. BUSINESS REVIEWS. Supplier must perform a minimum of one business review with Sourcewell per contract year. The business review will cover sales to Participating Entities, pricing and contract terms, administrative fees, sales data reports, supply issues, customer issues, and any other necessary information.

8. REPORT ON CONTRACT SALES ACTIVITY AND ADMINISTRATIVE FEE PAYMENT A. CONTRACT SALES ACTIVITY REPORT. Each calendar quarter, Supplier must provide a contract sales activity report (Report) to the Sourcewell Supplier Development Administrator assigned to this Contract. Reports are due no later than 45 days after the end of each calendar quarter. A Report must be provided regardless of the number or amount of sales during that quarter (i.e., if there are no sales, Supplier must submit a report indicating no sales were made).

The Report must contain the following fields:
x Participating Entity Name (e.g., City of Staples Highway Department); x Participating Entity Physical Street Address;
x Participating Entity City;
x Participating Entity State/Province;
x Participating Entity Zip/Postal Code;
x Participating Entity Contact Name;
x Participating Entity Contact Email Address;
x Participating Entity Contact Telephone Number;
x Sourcewell Assigned Entity/Participating Entity Number; x Item Purchased Description;
x Item Purchased Price;
x Sourcewell Administrative Fee Applied; and
x Date Purchase was invoiced/sale was recognized as revenue by Supplier.

B. ADMINISTRATIVE FEE. In consideration for the support and services provided by Sourcewell, the Supplier will pay an administrative fee to Sourcewell on all Equipment, Products, and Services provided to Participating Entities. The Administrative Fee must be included in, and not added to, the pricing. Supplier may not charge Participating Entities more than the contracted price to offset the Administrative Fee.

The Supplier will submit payment to Sourcewell for the percentage of administrative fee stated in the Proposal multiplied by the total sales of all Equipment, Products, and Services purchased 







 




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by Participating Entities under this Contract during each calendar quarter. Payments should note the Supplier’s name and Sourcewell-assigned contract number in the memo; and must be mailed to the address above “Attn: Accounts Receivable” or remitted electronically to Sourcewell’s banking institution per Sourcewell’s Finance department instructions. Payments must be received no later than 45 calendar days after the end of each calendar quarter.

Supplier agrees to cooperate with Sourcewell in auditing transactions under this Contract to ensure that the administrative fee is paid on all items purchased under this Contract.

In the event the Supplier is delinquent in any undisputed administrative fees, Sourcewell reserves the right to cancel this Contract and reject any proposal submitted by the Supplier in any subsequent solicitation. In the event this Contract is cancelled by either party prior to the Contract’s expiration date, the administrative fee payment will be due no more than 30 days from the cancellation date.

9. AUTHORIZED REPRESENTATIVE
Sourcewell's Authorized Representative is its Chief Procurement Officer.

Supplier’s Authorized Representative is the person named in the Supplier’s Proposal. If Supplier’s Authorized Representative changes at any time during this Contract, Supplier must promptly notify Sourcewell in writing.

10. AUDIT, ASSIGNMENT, AMENDMENTS, WAIVER, AND CONTRACT COMPLETE A. AUDIT. Pursuant to Minnesota Statutes Section 16C.05, subdivision 5, the books, records, documents, and accounting procedures and practices relevant to this Agreement are subject to examination by Sourcewell or the Minnesota State Auditor for a minimum of six years from the end of this Contract. This clause extends to Participating Entities as it relates to business conducted by that Participating Entity under this Contract.

B. ASSIGNMENT. Neither party may assign or otherwise transfer its rights or obligations under this Contract without the prior written consent of the other party and a fully executed assignment agreement. Such consent will not be unreasonably withheld. Any prohibited assignment will be invalid.

C. AMENDMENTS. Any amendment to this Contract must be in writing and will not be effective until it has been duly executed by the parties.

D. WAIVER. Failure by either party to take action or assert any right under this Contract will not be deemed a waiver of such right in the event of the continuation or repetition of the circumstances giving rise to such right. Any such waiver must be in writing and signed by the parties.








 




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E. CONTRACT COMPLETE. This Contract represents the complete agreement between the parties. No other understanding regarding this Contract, whether written or oral, may be used to bind either party. For any conflict between the attached Proposal and the terms set out in Articles 1-22 of this Contract, the terms of Articles 1-22 will govern.

F. RELATIONSHIP OF THE PARTIES. The relationship of the parties is one of independent contractors, each free to exercise judgment and discretion with regard to the conduct of their respective businesses. This Contract does not create a partnership, joint venture, or any other relationship such as master-servant, or principal-agent.

11. INDEMNITY AND HOLD HARMLESS

Supplier must indemnify, defend, save, and hold Sourcewell and its Participating Entities, including their agents and employees, harmless from any claims or causes of action, including attorneys’ fees incurred by Sourcewell or its Participating Entities, arising out of any act or omission in the performance of this Contract by the Supplier or its agents or employees; this indemnification includes injury or death to person(s) or property alleged to have been caused by some defect in the Equipment, Products, or Services under this Contract to the extent the Equipment, Product, or Service has been used according to its specifications. Sourcewell’s responsibility will be governed by the State of Minnesota’s Tort Liability Act (Minnesota Statutes Chapter 466) and other applicable law.

12. GOVERNMENT DATA PRACTICES
Supplier and Sourcewell must comply with the Minnesota Government Data Practices Act, Minnesota Statutes Chapter 13, as it applies to all data provided by or provided to Sourcewell under this Contract and as it applies to all data created, collected, received, stored, used, maintained, or disseminated by the Supplier under this Contract.

13. INTELLECTUAL PROPERTY, PUBLICITY, MARKETING, AND ENDORSEMENT A. INTELLECTUAL PROPERTY

1. Grant of License. During the term of this Contract:
a. Sourcewell grants to Supplier a royalty-free, worldwide, non-exclusive right and license to use the trademark(s) provided to Supplier by Sourcewell in advertising and promotional materials for the purpose of marketing Sourcewell’s relationship with Supplier.
b. Supplier grants to Sourcewell a royalty-free, worldwide, non-exclusive right and license to use Supplier’s trademarks in advertising and promotional materials for the purpose of marketing Supplier’s relationship with Sourcewell.

2. Limited Right of Sublicense. The right and license granted herein includes a limited right of each party to grant sublicenses to their respective subsidiaries, distributors, dealers, 







 




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resellers, marketing representatives, and agents (collectively “Permitted Sublicensees”) in advertising and promotional materials for the purpose of marketing the Parties’ relationship to Participating Entities. Any sublicense granted will be subject to the terms and conditions of this Article. Each party will be responsible for any breach of this Article by any of their respective sublicensees.

3. Use; Quality Control.
a. Neither party may alter the other party’s trademarks from the form provided and must comply with removal requests as to specific uses of its trademarks or logos.
b. Each party agrees to use, and to cause its Permitted Sublicensees to use, the other party’s trademarks only in good faith and in a dignified manner consistent with such party’s use of the trademarks. Upon written notice to the breaching party, the breaching party has 30 days of the date of the written notice to cure the breach or the license will be terminated.

4. As applicable, Supplier agrees to indemnify and hold harmless Sourcewell and its Participating Entities against any and all suits, claims, judgments, and costs instituted or recovered against Sourcewell or Participating Entities by any person on account of the use of any Equipment or Products by Sourcewell or its Participating Entities supplied by Supplier in violation of applicable patent or copyright laws.

5. Termination. Upon the termination of this Contract for any reason, each party, including Permitted Sublicensees, will have 30 days to remove all Trademarks from signage, websites, and the like bearing the other party’s name or logo (excepting Sourcewell’s pre-printed catalog of suppliers which may be used until the next printing). Supplier must return all marketing and promotional materials, including signage, provided by Sourcewell, or dispose of it according to Sourcewell’s written directions.

B. PUBLICITY. Any publicity regarding the subject matter of this Contract must not be released without prior written approval from the Authorized Representatives. Publicity includes notices, informational pamphlets, press releases, research, reports, signs, and similar public notices prepared by or for the Supplier individually or jointly with others, or any subcontractors, with respect to the program, publications, or services provided resulting from this Contract.

C. MARKETING. Any direct advertising, marketing, or offers with Participating Entities must be approved by Sourcewell. Send all approval requests to the Sourcewell Supplier Development Administrator assigned to this Contract.

D. ENDORSEMENT. The Supplier must not claim that Sourcewell endorses its Equipment, Products, or Services.








 




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14. GOVERNING LAW, JURISDICTION, AND VENUE
The substantive and procedural laws of the State of Minnesota will govern this Contract. Venue for all legal proceedings arising out of this Contract, or its breach, must be in the appropriate state court in Todd County, Minnesota or federal court in Fergus Falls, Minnesota.

15. FORCE MAJEURE
Neither party to this Contract will be held responsible for delay or default caused by acts of God or other conditions that are beyond that party’s reasonable control. A party defaulting under this provision must provide the other party prompt written notice of the default.

16. SEVERABILITY
If any provision of this Contract is found by a court of competent jurisdiction to be illegal, unenforceable, or void then both parties will be relieved from all obligations arising from that provision. If the remainder of this Contract is capable of being performed, it will not be affected by such determination or finding and must be fully performed.

17. PERFORMANCE, DEFAULT, AND REMEDIES
A. PERFORMANCE. During the term of this Contract, the parties will monitor performance and address unresolved contract issues as follows:

1. Notification. The parties must promptly notify each other of any known dispute and work in good faith to resolve such dispute within a reasonable period of time. If necessary, Sourcewell and the Supplier will jointly develop a short briefing document that describes the issue(s), relevant impact, and positions of both parties.

2. Escalation. If parties are unable to resolve the issue in a timely manner, as specified above, either Sourcewell or Supplier may escalate the resolution of the issue to a higher level of management. The Supplier will have 30 calendar days to cure an outstanding issue.

3. Performance while Dispute is Pending. Notwithstanding the existence of a dispute, the Supplier must continue without delay to carry out all of its responsibilities under the Contract that are not affected by the dispute. If the Supplier fails to continue without delay to perform its responsibilities under the Contract, in the accomplishment of all undisputed work, the Supplier will bear any additional costs incurred by Sourcewell and/or its Participating Entities as a result of such failure to proceed.

B. DEFAULT AND REMEDIES. Either of the following constitutes cause to declare this Contract, or any Participating Entity order under this Contract, in default:

1. Nonperformance of contractual requirements, or

2. A material breach of any term or condition of this Contract. 







 




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The party claiming default must provide written notice of the default, with 30 calendar days to cure the default. Time allowed for cure will not diminish or eliminate any liability for liquidated or other damages. If the default remains after the opportunity for cure, the non-defaulting party may:
x Exercise any remedy provided by law or equity, or
x Terminate the Contract or any portion thereof, including any orders issued against the Contract.

18. INSURANCE

A. REQUIREMENTS. At its own expense, Supplier must maintain insurance policy(ies) in effect at all times during the performance of this Contract with insurance company(ies) licensed or authorized to do business in the State of Minnesota having an “AM BEST” rating of A- or better, with coverage and limits of insurance not less than the following:

1. Workers’ Compensation and Employer’s Liability.

Workers’ Compensation: As required by any applicable law or regulation.

Employer's Liability Insurance: must be provided in amounts not less than listed below:

Minimum limits:
$500,000 each accident for bodily injury by accident
$500,000 policy limit for bodily injury by disease
$500,000 each employee for bodily injury by disease

2. Commercial General Liability Insurance. Supplier will maintain insurance covering its operations, with coverage on an occurrence basis, and must be subject to terms no less broad than the Insurance Services Office (“ISO”) Commercial General Liability Form CG0001 (2001 or newer edition), or equivalent. At a minimum, coverage must include liability arising from premises, operations, bodily injury and property damage, independent contractors, products-completed operations including construction defect, contractual liability, blanket contractual liability, and personal injury and advertising injury. All required limits, terms and conditions of coverage must be maintained during the term of this Contract.

Minimum Limits:
$1,000,000 each occurrence Bodily Injury and Property Damage $1,000,000 Personal and Advertising Injury
$2,000,000 aggregate for Products-Completed operations
$2,000,000 general aggregate

3. Commercial Automobile Liability Insurance. During the term of this Contract, Supplier will maintain insurance covering all owned, hired, and non-owned automobiles in limits of liability not less than indicated below. The coverage must be subject to terms 







 




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no less broad than ISO Business Auto Coverage Form CA 0001 (2010 edition or newer), or equivalent.

Minimum Limits:
$1,000,000 each accident, combined single limit

4. Umbrella Insurance. During the term of this Contract, Supplier will maintain umbrella coverage over Employer’s Liability, Commercial General Liability, and Commercial Automobile.

Minimum Limits:
$2,000,000

5. Network Security and Privacy Liability Insurance. During the term of this Contract, Supplier will maintain coverage for network security and privacy liability. The coverage may be endorsed on another form of liability coverage or written on a standalone policy. The insurance must cover claims which may arise from failure of Supplier’s security resulting in, but not limited to, computer attacks, unauthorized access, disclosure of not public data – including but not limited to, confidential or private information, transmission of a computer virus, or denial of service.

Minimum limits:
$2,000,000 per occurrence
$2,000,000 annual aggregate
Failure of Supplier to maintain the required insurance will constitute a material breach entitling Sourcewell to immediately terminate this Contract for default.

B. CERTIFICATES OF INSURANCE. Prior to commencing under this Contract, Supplier must furnish to Sourcewell a certificate of insurance, as evidence of the insurance required under this Contract. Prior to expiration of the policy(ies), renewal certificates must be mailed to Sourcewell, 202 12th Street Northeast, P.O. Box 219, Staples, MN 56479 or sent to the Sourcewell Supplier Development Administrator assigned to this Contract. The certificates must be signed by a person authorized by the insurer(s) to bind coverage on their behalf.

Failure to request certificates of insurance by Sourcewell, or failure of Supplier to provide certificates of insurance, in no way limits or relieves Supplier of its duties and responsibilities in this Contract.

C. ADDITIONAL INSURED ENDORSEMENT AND PRIMARY AND NON-CONTRIBUTORY INSURANCE CLAUSE. Supplier agrees to list Sourcewell and its Participating Entities, including their officers, agents, and employees, as an additional insured under the Supplier’s commercial general liability insurance policy with respect to liability arising out of activities, “operations,” or “work” performed by or on behalf of Supplier, and products and completed operations of Supplier. The policy provision(s) or endorsement(s) must further provide that coverage is 







 




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primary and not excess over or contributory with any other valid, applicable, and collectible insurance or self-insurance in force for the additional insureds.

D. WAIVER OF SUBROGATION. Supplier waives and must require (by endorsement or otherwise) all its insurers to waive subrogation rights against Sourcewell and other additional insureds for losses paid under the insurance policies required by this Contract or other insurance applicable to the Supplier or its subcontractors. The waiver must apply to all deductibles and/or self-insured retentions applicable to the required or any other insurance maintained by the Supplier or its subcontractors. Where permitted by law, Supplier must require similar written express waivers of subrogation and insurance clauses from each of its subcontractors.

E. UMBRELLA/EXCESS LIABILITY/SELF-INSURED RETENTION. The limits required by this Contract can be met by either providing a primary policy or in combination with umbrella/excess liability policy(ies), or self-insured retention.

19. COMPLIANCE
A. LAWS AND REGULATIONS. All Equipment, Products, or Services provided under this Contract must comply fully with applicable federal laws and regulations, and with the laws in the states and provinces in which the Equipment, Products, or Services are sold.

B. LICENSES. Supplier must maintain a valid and current status on all required federal, state/provincial, and local licenses, bonds, and permits required for the operation of the business that the Supplier conducts with Sourcewell and Participating Entities.

20. BANKRUPTCY, DEBARMENT, OR SUSPENSION CERTIFICATION
Supplier certifies and warrants that it is not in bankruptcy or that it has previously disclosed in writing certain information to Sourcewell related to bankruptcy actions. If at any time during this Contract Supplier declares bankruptcy, Supplier must immediately notify Sourcewell in writing.

Supplier certifies and warrants that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from programs operated by the State of Minnesota; the United States federal government or the Canadian government, as applicable; or any Participating Entity. Supplier certifies and warrants that neither it nor its principals have been convicted of a criminal offense related to the subject matter of this Contract. Supplier further warrants that it will provide immediate written notice to Sourcewell if this certification changes at any time. 







 




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21. PROVISIONS FOR NON-UNITED STATES FEDERAL ENTITY PROCUREMENTS UNDER

UNITED STATES FEDERAL AWARDS OR OTHER AWARDS
Participating Entities that use United States federal grant or FEMA funds to purchase goods or services from this Contract may be subject to additional requirements including the procurement standards of the Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, 2 C.F.R. § 200. Participating Entities may have additional requirements based on specific funding source terms or conditions. Within this Article, all references to “federal” should be interpreted to mean the United States federal government.

The following list only applies when a Participating Entity accesses Supplier’s Equipment, Products, or Services with United States federal funds.

A. EQUAL EMPLOYMENT OPPORTUNITY. Except as otherwise provided under 41 C.F.R. § 60, all contracts that meet the definition of “federally assisted construction contract” in 41 C.F.R. § 60-

1.3 must include the equal opportunity clause provided under 41 C.F.R. §60-1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” (30 FR 12319, 12935, 3 C.F.R. §, 1964-1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relating to Equal Employment Opportunity,” and implementing regulations at 41 C.F.R. § 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.” The equal opportunity clause is incorporated herein by reference.

B. DAVIS-BACON ACT, AS AMENDED (40 U.S.C. § 3141-3148). When required by federal program legislation, all prime construction contracts in excess of $2,000 awarded by nonfederal entities must include a provision for compliance with the Davis-Bacon Act (40 U.S.C. § 3141-3144, and 3146-3148) as supplemented by Department of Labor regulations (29 C.F.R. § 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week. The non-federal entity must place a copy of the current prevailing wage determination issued by the Department of Labor in each solicitation. The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-federal entity must report all suspected or reported violations to the federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act (40 U.S.C. § 3145), as supplemented by Department of Labor regulations (29 C.F.R. § 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”). The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-federal entity must report all suspected or reported violations to the federal awarding agency. Supplier must be in compliance with all applicable Davis-Bacon Act provisions. 







 




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C. CONTRACT WORK HOURS AND SAFETY STANDARDS ACT (40 U.S.C. § 3701-3708). Where applicable, all contracts awarded by the non-federal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. §§ 3702 and 3704, as supplemented by Department of Labor regulations (29 C.F.R. § 5).

Under 40 U.S.C. § 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible provided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week. The requirements of 40 U.S.C. § 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence. This provision is hereby incorporated by reference into this Contract. Supplier certifies that during the term of an award for all contracts by Sourcewell resulting from this procurement process, Supplier must comply with applicable requirements as referenced above.

D. RIGHTS TO INVENTIONS MADE UNDER A CONTRACT OR AGREEMENT. If the federal award meets the definition of “funding agreement” under 37 C.F.R. § 401.2(a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the recipient or subrecipient must comply with the requirements of 37 C.F.R. § 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency. Supplier certifies that during the term of an award for all contracts by Sourcewell resulting from this procurement process, Supplier must comply with applicable requirements as referenced above.

E. CLEAN AIR ACT (42 U.S.C. § 7401-7671Q.) AND THE FEDERAL WATER POLLUTION CONTROL ACT (33 U.S.C. § 1251-1387). Contracts and subgrants of amounts in excess of $150,000 require the non-federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act (42 U.S.C. § 7401- 7671q) and the Federal Water Pollution Control Act as amended (33 U.S.C. § 1251- 1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).

Supplier certifies that during the term of this Contract will comply with applicable requirements as referenced above.

F. DEBARMENT AND SUSPENSION (EXECUTIVE ORDERS 12549 AND 12689). A contract award (see 2 C.F.R. § 180.220) must not be made to parties listed on the government wide exclusions in the System for Award Management (SAM), in accordance with the OMB guidelines at 2 C.F.R. §180 that implement Executive Orders 12549 (3 C.F.R. § 1986 Comp., p. 189) and 12689 (3 C.F.R. § 1989 Comp., p. 235), “Debarment and Suspension.” SAM Exclusions contains the names 







 




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of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549. Supplier certifies that neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation by any federal department or agency.

G. BYRD ANTI-LOBBYING AMENDMENT, AS AMENDED (31 U.S.C. § 1352). Suppliers must file any required certifications. Suppliers must not have used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant, or any other award covered by 31 U.S.C. § 1352. Suppliers must disclose any lobbying with non-federal funds that takes place in connection with obtaining any federal award. Such disclosures are forwarded from tier to tier up to the non-federal award. Suppliers must file all certifications and disclosures required by, and otherwise comply with, the Byrd Anti-Lobbying Amendment (31 U.S.C. § 1352).

H. RECORD RETENTION REQUIREMENTS. To the extent applicable, Supplier must comply with the record retention requirements detailed in 2 C.F.R. § 200.333. The Supplier further certifies that it will retain all records as required by 2 C.F.R. § 200.333 for a period of 3 years after grantees or subgrantees submit final expenditure reports or quarterly or annual financial reports, as applicable, and all other pending matters are closed.

I. ENERGY POLICY AND CONSERVATION ACT COMPLIANCE. To the extent applicable, Supplier must comply with the mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act.

J. BUY AMERICAN PROVISIONS COMPLIANCE. To the extent applicable, Supplier must comply with all applicable provisions of the Buy American Act. Purchases made in accordance with the Buy American Act must follow the applicable procurement rules calling for free and open competition.

K. ACCESS TO RECORDS (2 C.F.R. § 200.336). Supplier agrees that duly authorized representatives of a federal agency must have access to any books, documents, papers and records of Supplier that are directly pertinent to Supplier’s discharge of its obligations under this Contract for the purpose of making audits, examinations, excerpts, and transcriptions. The right also includes timely and reasonable access to Supplier’s personnel for the purpose of interview and discussion relating to such documents.

L. PROCUREMENT OF RECOVERED MATERIALS (2 C.F.R. § 200.322). A non-federal entity that is a state agency or agency of a political subdivision of a state and its contractors must comply with Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation 







 




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and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (EPA) at 40 C.F.R. § 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired during the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines.

M. FEDERAL SEAL(S), LOGOS, AND FLAGS. The Supplier not use the seal(s), logos, crests, or reproductions of flags or likenesses of Federal agency officials without specific pre-approval.

N. NO OBLIGATION BY FEDERAL GOVERNMENT. The U.S. federal government is not a party to this Contract or any purchase by an Participating Entity and is not subject to any obligations or liabilities to the Participating Entity, Supplier, or any other party pertaining to any matter resulting from the Contract or any purchase by an authorized user.

O. PROGRAM FRAUD AND FALSE OR FRAUDULENT STATEMENTS OR RELATED ACTS. The Contractor acknowledges that 31 U.S.C. 38 (Administrative Remedies for False Claims and Statements) applies to the Supplier’s actions pertaining to this Contract or any purchase by a Participating Entity.

P. FEDERAL DEBT. The Supplier certifies that it is non-delinquent in its repayment of any federal debt. Examples of relevant debt include delinquent payroll and other taxes, audit disallowance, and benefit overpayments.

Q. CONFLICTS OF INTEREST. The Supplier must notify the U.S. Office of General Services, Sourcewell, and Participating Entity as soon as possible if this Contract or any aspect related to the anticipated work under this Contract raises an actual or potential conflict of interest (as described in 2 C.F.R. Part 200). The Supplier must explain the actual or potential conflict in writing in sufficient detail so that the U.S. Office of General Services, Sourcewell, and Participating Entity are able to assess the actual or potential conflict; and provide any additional information as necessary or requested.

R. U.S. EXECUTIVE ORDER 13224. The Supplier, and its subcontractors, must comply with U.S.

Executive Order 13224 and U.S. Laws that prohibit transactions with and provision of resources and support to individuals and organizations associated with terrorism.

S. PROHIBITION ON CERTAIN TELECOMMUNICATIONS AND VIDEO SURVEILLANCE SERVICES OR EQUIPMENT. To the extent applicable, Supplier certifies that during the term of this Contract it will comply with applicable requirements of 2 C.F.R. § 200.216. 







 




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T. DOMESTIC PREFERENCES FOR PROCUREMENTS. To the extent applicable, Supplier certifies that during the term of this Contract will comply with applicable requirements of 2 C.F.R. § 200.322.

22. CANCELLATION
Sourcewell or Supplier may cancel this Contract at any time, with or without cause, upon 60 days’ written notice to the other party. However, Sourcewell may cancel this Contract immediately upon discovery of a material defect in any certification made in Supplier’s Proposal. Cancellation of this Contract does not relieve either party of financial, product, or service obligations incurred or accrued prior to cancellation.

Sourcewell Elgin Sweeper Company
By: __________________________ By: __________________________ Jeremy Schwartz David Panizzi
Title: Chief Procurement Officer Title: Business Development Manager Date: ________________________ Date: ________________________ Approved:

By: __________________________
Chad Coauette
Title: Executive Director/CEO
Date: ________________________








 









 











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1909

EQUIPMENT METER REPORT

GROUPED BY COMPANY AND DEPARTMENT
PAGE: 1
3104.rpt DATE: 03/16/2023 11:12
City of Richmond Equipment Services
The totals for each group and for the report are the sum of the YTD meter readings.

COMPANY: 001 - Richmond Active Fleet
DEPARTMENT: 01234331 - GF- PWSD/STRT SWPNG/PVMNT MAIN(S-DIV)

FISCAL YTD

READING
LTD

READING

CURRENT

READING
FUEL
MTR
MTR

EQUIPMENT YEAR MAKE MODEL DEPT CLASS LICENSE TYPE
6140 2017 PETERBUILT 220 RHS 01234331 SS 1498951 M Y 31789 31789 31789 01234331 TOTALS: HOURS: 0 MILES: 31,789 KILOMETERS: 0 TONS: 0 VOLTAGE: 0 COMPANY TOTALS: HOURS: 0 MILES: 31,789 KILOMETERS: 0 TONS: 0 VOLTAGE: 0 ATTACHMENT 3
1910

EQUIPMENT METER REPORT

GROUPED BY COMPANY AND DEPARTMENT
PAGE: 2
3104.rpt DATE: 03/16/2023 11:12
City of Richmond Equipment Services
The totals for each group and for the report are the sum of the YTD meter readings.

REPORT TOTALS: HOURS: 0 MILES: 31,789 KILOMETERS: 0 TONS: 0 VOLTAGE: 0 REPORT PARAMETERS:

GROUP: COMPANY AND DEPARTMENT
EQUIPMENT NUMBER RANGE: 6140 to 6140
MODEL YEAR RANGE: ALL YEARS
ECO COMPANY RANGE: ALL COMPANIES
DPN DEPARTMENT RANGE: ALL DEPARTMENTS
EQC EQUIPMENT CLASS RANGE: ALL CLASSES
SHP EQUIPMENT SHOP RANGE: ALL SHOPS
STE EQUIPMENT SITE RANGE: ALL SITES
MAK EQUIPMENT MAKE RANGE: ALL MAKES
MOD EQUIPMENT MODEL RANGE: ALL MODELS
EBC EQUIPMENT BILLING CODE RANGE: ALL BILLING CODES
EMG EQUIPMENT MONITOR GROUP RANGE: ALL MONITOR GROUPS
STA EQUIPMENT STATUS RANGE: ALL STATUSES
EUC EQUIPMENT USE CODE: ALL EQUIPMENT REGARDLESS OF USE CODE v09012009
1911

May 16, 2023
Finance Department
DATE: May 16, 2023
TO: Mayor Martinez and Members of the City Council
FROM: Shasa Curl, City Manager
Nickie Mastay, Deputy City Manager-Internal Services
Sharrone Taylor, Interim Director of Human Resources
Subject: Contract with Raftelis to Provide a Workforce Analysis FINANCIAL IMPACT: The proposed expenditure will not exceed $200,000.

There will need to be an appropriation from the General Fund. Human Resources Department budget
(01181016-400201).

PREVIOUS COUNCIL
ACTION:

N/A

STATEMENT OF THE
ISSUE:

City staff request both the approval of a contract with Raftelis Financial Consultants, Inc. (“Raftelis”) to provide a Workforce Analysis, and an appropriation of the
necessary funding.

RECOMMENDED ACTION: APPROVE a contract with Raftelis Financial Consultants, Inc. to provide a workforce analysis, in alignment with a state audit recommendation, in an amount not to exceed
$200,000, with a term beginning June 1, 2023, and
ending March 31, 2024; and APPROPRIATE the
necessary funding – Human Resources Department
(Nickie Mastay 510-620-6609/Sharrone Taylor 510-620-
6803). This item was continued from the May 2, 2023,
meeting.

AGENDA
REPORT
1912

May 16, 2023
DISCUSSION:

On April 4, 2022, the City of Richmond was notified by the State Auditor that they would be conducting an audit of the City as approved by the Joint Legislative Audit Committee on June 30, 2021. The State Auditor’s local audit program identifies and supports local government agencies that might be at high risk based upon analysis of a City’s audited financial statements. Richmond’s risk assessment began in February 2021 based upon the City’s June 2020 financial statements.

The audit was initiated in May 2022, and was completed and published on November 10, 2022. At the conclusion of the audit, the State Auditor formalized eleven (11) recommendations to the City (Attachment 1). State Auditor recommendation number 6 stated:

To mitigate the costs of increasing salaries, the City should perform a workforce analysis by June 2024. Based on the results of the analysis, the City Council should consider eliminating vacant positions that it deems no longer necessary. Additionally, the City should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that it does not need.

Request for Proposal
On February 17, 2023, the City Manager’s Office released a Request for Proposals (RFP) to solicit qualified professionals to perform a workforce analysis and to develop a plan that includes succession planning and recommendations not only for vacant positions, but for the proper position for succession planning to be effective for the City in the coming years (Attachment 2).

Key aspects of the scope of services included:
 Reassess the Size of the City Staff: Meet with Department Directors via the City Manager and Human Resources Director to assess staffing needs to determine if the department needs fewer additional staff than their vacancies would suggest.  Succession Planning and Vacancies: The City would like to take a measured approach to filling vacancies. By taking a measured approach to filling vacancies, this will allow the City time to determine whether any departments, including Police and Fire, should or could operate with a smaller staff. While taking a measured approach to filling vacancies there needs to be an analysis of potential retirements to determine proper succession planning.
 Department Analysis: Facilitate a variety of meetings between/among Department Directors to determine current workflow with the current staff in each division of each department to determine if the department is operating at optimum accuracy and efficiency. Produce a written document that summarizes this analysis with recommendations on workflow and staffing.
1913

May 2, 2023
The RFP was posted on the City’s BidsOnline system where 254 vendors were notified, and 20 vendors downloaded copies of the RFP (Attachment 3). On March 17, 2023, two electronic proposals were received. The proposals were reviewed by City staff members and each vendor was found to be compliant. Subsequent interviews were held with each vendor after which final scores were assigned (Attachment 4).

RFP Rating Matrix 4-11-23
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL
Koff & Associates 76 95 81 75 327
Raftelis 70 78 77 79 304
Interview Rating Matrix 4-24-23
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL
Koff & Associates 76 50 85 83 294
Raftelis 85 70 90 90 335

TOTAL SCORES
Rater
1 Rater
2 Rater
3 Rater
4 TOTAL Rank
Koff & Associates 152 145 166 158 621 2
Raftelis 155 148 167 169 639 1
City staff is requesting approval of a contract with Raftelis to provide a workforce analysis in an amount not-to exceed $200,000, with a term beginning June 1, 2023, and ending March 31, 2024, and to appropriate the necessary funding.

DOCUMENTS ATTACHED:

Attachment 1 – State Audit Report – November 2022
Attachment 2 – Request for Proposal
Attachment 3 – Project Report
Attachment 4 – Rating Matrix
Attachment 5 – Proposed Contract
1914
City of Richmond
Anticipated Deficits, High Pension Debt, and
Mismanagement of Its Housing Authority Cause
the City to Be High Risk
November 2022
REPORT 2021‑806
1915
For questions regarding the contents of this report, please contact our Public Affairs Office at 916.445.0255 This report is also available online at www.auditor.ca.gov | Alternative format reports available upon request | Permission is granted to reproduce reports 621 Capitol Mall, Suite 1200 | Sacramento | CA | 95814

CALIFORNIA STATE AUDITOR
916.445.0255 | TTY 916.445.0033

1.800.952.5665
For complaints of state employee misconduct,
contact us through the Whistleblower Hotline:

Don’t want to miss any of our reports? Subscribe to our email list at auditor.ca.gov 1916
Michael S. Tilden Acting State Auditor
621 Capitol Mall, Suite 1200 | Sacramento, CA 95814 | 916.445.0255 | 916.327.0019 fax | www.auditor.ca.gov November 10, 2022
2021-806
The Governor of California
President pro Tempore of the Senate
Speaker of the Assembly
State Capitol
Sacramento, California 95814
Dear Governor and Legislative Leaders:

Despite recent financial improvements, the city of Richmond’s long-term financial stability remains uncertain. Our office's audit of the city—conducted as part of our high-risk local government agency audit program—concludes that the city is high risk due to its anticipated deficits, high pension debt, and mismanagement of the Richmond Housing Authority (housing authority).

Richmond forecasts a significant long-term deficit, which we believe may worsen based on emerging financial trends. The city anticipates that these deficits may average as much as $6.7 million annually beginning in fiscal year 2023–24 and continue through at least fiscal year 2027–28. Despite having increased its general fund reserves to nearly $49 million in fiscal year 2021–22, Richmond projects that its deficit will deplete those reserves to less than $9 million by fiscal year 2027–28, which is well below levels recommended by financial experts.

Richmond’s growing annual pension costs are a significant barrier to balancing its budgets. In fiscal year 2020–21, Richmond paid $37 million in pension costs. However, these costs could reach $53 million by fiscal year 2028–29. Richmond attempted to mitigate its pension costs in 2005 by issuing $115 million in bonds and investing the proceeds but, after refinancing those bonds in 2022, the city now expects its residents to pay millions in annual debt service until 2044.

Finally, the mismanagement of Richmond's housing authority has resulted in the federal government disallowing millions of dollars in reimbursement of city expenses and requiring the housing authority to transfer its public housing responsibilities to other entities. However, the housing authority has missed numerous federal deadlines associated with this transfer and the city, which provides staff and financial support to the housing authority, may need to provide additional resources to resolve this ongoing problem.

Respectfully submitted,
MICHAEL S. TILDEN, CPA
Acting California State Auditor
1917
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HIGH-RISK ISSUES
City of Richmond, Contra Costa County Risk Designation: High Risk

ISSUE PAGE
Despite Recent Improvements, Richmond’s Long-Term Financial Stability Remains Uncertain Financial Reserves Have Increased, but Risks Remain 7
Richmond Forecasts a Significant Long-Term Deficit, Which Evolving Financial Trends May Worsen 9 The City’s Debt Burden Remains High 13
Addressing Its Poorly Funded Retirement Benefits and Below-Market Compensation Will Increase Richmond’s Expenses
Significant Retirement Obligations Continue to Burden the City 17 Richmond May Have Missed Opportunities to Better Address Its Retiree Health Obligations 18 Increasing the Competitiveness of City Salaries Will Incur Additional Costs 20 The City Has Mismanaged the Richmond Housing Authority
A Decade of Mismanagement Will Result in the Housing Authority Transferring Its Public Housing Responsibilities to Other Entities 23
The Housing Authority Missed Mandatory Deadlines to Complete the Recovery Agreement 25 The Housing Authority May Owe the Internal Revenue Service $1 Million or More in Taxes and Penalties 27 The City Has Not Consistently Followed Its Contracting Policies or Updated Its Fees as Required Richmond Could Do More to Demonstrate It Is Following Requirements to Ensure the Best Value for Its Contracts 29
City Staff Have Not Updated Fee Schedules as Required 30 Appendices
Appendix A—The State Auditor’s Local High-Risk Program 33 Appendix B—Scope and Methodology 35
Agency Response
City of Richmond 39
California State Auditor's Comment on the Response From the City of Richmond 43 v

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Risks the City of Richmond Faces
Although Richmond’s general fund reserves have increased in recent years to the point where it has reserves in excess of two months of general fund expenditures, its long‑term financial stability remains in question. Its 2022 financial forecast predicts annual deficits that will grow to $13.8 million in fiscal year 2025–26 before shrinking to $9.4 million by fiscal year 2027–28; these deficits threaten to critically deplete the city’s general fund reserves. Further, Richmond’s current forecast may be underestimating inflation and does not account for the possibility of a recession in the later years of the projection. If Richmond eventually exhausts its reserves and spends more than it projects, it will need to either raise revenue or cut city expenditures or services.

Our Local Government High‑Risk Dashboard (dashboard), which we updated in October 2022, identified five areas—debt burden, pension obligations, pension costs, future pension costs, and other post employment benefits (OPEB)—in which the city's finances continue to have high risk ratings as indicated in Table 1. Although we determined that Richmond’s overall fiscal risk rating for fiscal year 2020–21 was moderate and adjusted its ranking among the highest‑risk cities from 9th to 10th, we conclude that Richmond is high risk based on the totality of factors described in this audit report, particularly its projections of future deficits.

Table 1
Richmond’s Fiscal Risk Indicators Have Improved
FINANCIAL INDICATOR 2018–19 2019–20 2020–21
Overall Risk Rating High Risk High Risk Moderate Risk
General Fund Reserves HIGH HIGH MODERATE
Debt Burden HIGH HIGH HIGH
Liquidity LOW LOW LOW
Revenue Trends MODERATE MODERATE MODERATE
Pension Obligations HIGH HIGH HIGH
Pension Funding MODERATE MODERATE LOW
Pension Costs HIGH HIGH HIGH
Future Pension Costs HIGH HIGH HIGH
OPEB Obligations MODERATE LOW LOW
OPEB Funding HIGH HIGH HIGH
Source: Analysis based on Richmond’s audited financial statements and CalPERS’ actuarial reports. 1 CALIFORNIA STATE AUDITOR
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Addressing the areas in which Richmond continues to be at high risk and counteracting the effects of its long‑term wage freezes will increase the city’s expenses. Notably, the California Public Employees’ Retirement System (CalPERS) has projected Richmond’s annual retirement costs to increase from roughly $35 million in fiscal year 2020–21 to $53 million in fiscal year 2028–29. These increasing costs are a potential barrier to the city’s ability to maintain balanced budgets. As of June 2021, Richmond has funded its OPEB trust funds—which assist the city in meeting health care obligations for retired staff—at about 27 percent of the cost of its promised future benefits and has set aside more than $7 million in fiscal year 2022–23 for increasing staff salaries and benefits that it had previously frozen to reduce costs.

However, maintaining salary increases may prove difficult as the city moves closer to deficit spending.

Richmond’s mismanagement of the Richmond Housing Authority (housing authority)—a legally separate entity created to manage low‑income housing facilities—has also increased financial risk to the city. Audits by the U.S. Department of Housing and Urban Development (HUD) noted deficiencies in financial practices, oversight, documentation, and accountability. In fact, in 2016 HUD found that the housing authority had misled HUD on the status of its finances and had submitted falsified documentation. In its report, HUD noted that the housing authority had inappropriately allowed the city to use HUD funds, the city had charged the housing authority excessive amounts for rent and services, and the city’s actions had resulted in more than $2 million in misspent HUD funds.

The housing authority signed an agreement with HUD in 2019 with the intent, according to HUD, to effectuate the transfer of the housing authority’s direct public housing responsibilities to other entities, such as developers, who will rehabilitate the properties and hold long‑term leases to use them for public housing. Richmond acknowledged this agreement through the signature of its mayor and agreed to work in good faith to assist the housing authority and HUD in accomplishing the tasks described in the agreement. However, the housing authority has missed 11 of the 26 deadlines and not completed the associated tasks needed to make this transfer, many by more than a year. As a result, some low‑income housing residents have experienced delays in the rehabilitation of their housing. Although the housing authority is a legally separate entity from the city, the city agreed to assist the housing authority with the agreement; thus, continued concerns related to the housing authority may require additional financial resources from the city.

Richmond has also not consistently followed its policies for contracting and fees. We examined 10 of Richmond’s contracts and found at least two instances in which it failed to follow contracting policies or made errors involving contract management.

For example, Richmond did not justify its use of an alternative contracting process on a $24,500 contract because it failed to make a formal determination that using this alternative process was in the city’s best interest, as it is required to do. Richmond has also not consistently updated its fees to reflect the cost of doing business, thereby forgoing revenues that could help improve its financial condition. 2 CALIFORNIA STATE AUDITOR
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Recommendations
The following are the recommendations we made as a result of our audit.

Descriptions of the findings and conclusions that led to these recommendations can be found in the sections of this report.
• To help ensure that Richmond maintains appropriate reserves for times of fiscal uncertainty, city staff should complete a review by June 2023 of Richmond’s reserve policy to determine whether a higher reserve target is appropriate. As part of the review, staff should consider all the factors the Government Finance Officers’ Association (GFOA) recommends for setting a reserve target. Once that review is complete, city staff should present proposals to the city council for modifying the city’s policy.
• To decrease the risk that Richmond will deplete its reserves, city staff should present by June 2023 to the city council a list of proposed budget actions that would help ensure balanced budgets and eliminate projected deficits. • Richmond should include multiple scenarios in its financial projections, including scenarios with potential additional risks, such as economic downturns or recessions, and how the city would continue to fund its operations under those circumstances.
• To ensure that Richmond is able to fund its retirement‑related costs, city staff should propose by June 2023 to the city council a specific policy regarding funding of its pension trust fund for this purpose. Staff should report to the city council on the estimated long‑term savings from increasing its direct payments to CalPERS as compared to investing the same amounts in its pension trust fund. Staff members should use this information to inform their recommendations related to funding targets for the pension trust fund and should consider recommending that the council increase the city’s payments directly to CalPERS. • To improve the city’s ability to pay OPEB, Richmond should implement, by June 2023 a policy identifying funds, such as surpluses or one‑time revenues, that should be contributed to the OPEB trust fund. Staff should then conduct an annual analysis to determine whether any funds available to the city are applicable under the city’s policy and should present a proposal to the city council to apply those funds to that trust fund.
• To mitigate the costs of increasing salaries, the city should perform a workforce analysis by June 2024. Based on the results of the analysis, the city council should consider eliminating vacant positions that it deems no longer necessary.

Additionally, the city should continue to assess its need for any vacant position before it seeks to fill it.
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• To ensure compliance with federal requirements, Richmond should dedicate the resources necessary to provide all records needed for an independent auditor to complete all outstanding single audits of the housing authority within the next fiscal year.
• To comply with existing legal obligations, Richmond should make available sufficient resources to enable the housing authority to resolve all past‑due requirements of the recovery agreement and to meet the remaining deadlines in a timely manner, but no later than January 2024.
• To define Richmond’s responsibility related to the housing authority, the city should immediately enter into a written agreement with the housing authority defining each entity’s financial responsibilities and it should draft plans to resolve past tax liabilities and prevent unnecessary new liabilities. • To ensure that Richmond is receiving the best value when entering into contracts, city staff should immediately begin documenting that they are following the contracting requirements in the city’s municipal code and in the contracting policies for all contracts.
• To reduce potential errors and omissions by city staff members when contracting for goods and services, by January 2023, Richmond should require its finance department to create a comprehensive checklist of required documentation for contract files that other departments must follow when conducting procurements. • To ensure that city fees appropriately cover the cost of providing services, by June 2023, Richmond should determine a cost‑effective frequency for updating its Master Fee Schedule (fee schedule) to reflect all allowable costs, including adjusting fees for inflation as appropriate. Richmond should then revise its municipal code as necessary.

Agency Comments
Richmond agreed with our recommendations. We look forward to receiving Richmond's corrective action plan by January 2023 to understand the specific actions it has undertaken, or plans to take, to address the conditions that led us to designate it as high risk.
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Introduction
The city of Richmond, located in Contra Costa County, had approximately 116,000 residents in 2021 and about 690 full‑time, budgeted employees. Richmond is a charter city and therefore has authority over its municipal affairs, and it may establish certain local ordinances beyond those that state law allows for cities that operate under general law. Voters elect a seven‑member city council. The mayor is elected separately and is one of the council members. The council in turn appoints a city manager, who implements council policy and acts as the chief executive and administrative officer of the city. Richmond provides many services to residents, including libraries, parks, community facilities, and public safety.

Richmond has had a long‑standing history of financial challenges. For example, in 2004 our office audited the city and found that it had drained its financial assets and jeopardized its financial stability by failing to control spending while its revenues decreased. In 2015 Moody's, a credit rating agency, downgraded the city’s credit rating, citing $396 million in combined governmental and enterprise debt. Further, our dashboard has assessed Richmond as having high fiscal risk every year from fiscal years 2016–17 through 2019–20. Richmond showed some improvement in our most recent analysis of its fiscal health for fiscal year 2020–21.

Despite its challenges, since fiscal year 2016–17, Richmond has received more general fund money than it has spent, as indicated in Figure 1. General fund revenue comes in part from property taxes and sales taxes, and it funds the city’s core government services, including public safety, recreation, and administration.

In fiscal year 2020–21, Richmond had general fund revenues of $179 million and expenditures of $162 million. As of June 2021, the general fund had a total balance of $49 million, $35 million of which made up the city’s reserves. The city estimates that it received $194 million in revenues and spent $166 million out of the general fund in fiscal year 2021–22.

In addition to its other responsibilities, the city operates a number of businesslike activities. One such program is the Richmond housing authority, a separate legal entity created in 1941 to manage low‑income housing facilities. Members of the city council serve on the housing authority’s board and the Richmond finance department manages the authority’s finances. Currently, the housing authority directly administers more than 240 low‑income housing units across two properties.

The housing authority receives about 40 percent of its $4.8 million in revenues from the federal government and about 16 percent from the city. As we detail later in this report, HUD found that the housing authority mismanaged its financial operations and that its external auditor had not completed several years of audits because of staff turnover and inadequate recordkeeping within the finance department. 5 CALIFORNIA STATE AUDITOR
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Figure 1
Richmond’s General Fund Revenues Have Slightly Exceeded Expenditures in Recent Years 2016–17 2017–18 2018–19 2019–20 2020–21
Fiscal Year
0 20
40 60
80 100
120
140
160
180
$200
In Millions
General Fund Revenues
General Fund Expenditures
Source: Richmond’s audited financial statements.
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Despite Recent Improvements,
Richmond’s Long‑Term Financial
Stability Remains Uncertain
Financial Reserves Have Increased, but Risks Remain
In June 2021, Richmond reached $34.7 million in general fund reserves, exceeding the minimum amount experts typically recommend. The city further estimates based on unaudited information that, as of October 2022, its reserve has since increased to almost $49 million. The GFOA recommends that a general‑purpose government establish a policy to maintain an unrestricted general fund balance that would at least cover a minimum of two months—or about 17 percent—of its regular general fund operating revenues or expenditures. Richmond’s general fund reserve policy substantially aligns with the GFOA recommendation. The policy requires the city to maintain a minimum of 15 percent of the next year’s budgeted general fund expenditures as its reserve. Richmond’s 2021 unrestricted fund balance represented more than 19 percent of its fiscal year 2020–21 general fund expenditures,1 exceeding the GFOA’s minimum recommendation. Richmond was able to reach this general fund balance partly through revenues that are unlikely to be repeated regularly, such as unexpectedly high property transfer taxes.

The city’s current reserve represents significant growth from prior years. For example, in June 2018, Richmond only had $17.7 million in reserve, just 11 percent of its expenditures.

For fiscal year 2019–20, we considered the city’s reserve level a high risk because it maintained low general fund balances compared to its expenditures and transfers, and it had had limited growth in its reserves in previous years. However, the city’s improved balance, illustrated in Figure 2, led to our updated determination that reserves are now an area of moderate risk for the city as of October 2022.

That said, Richmond may require a higher reserve target to address the specific challenges it may face. According to the GFOA, governments may need to set policies to maintain more than the minimum recommended reserves. The GFOA has identified five factors that governments should consider when setting a reserve target. As indicated in Table 2, Richmond has not sufficiently reduced or eliminated risks related to three of the five factors, which could lead the city to need greater reserves than its current policy dictates. For example, the city could experience volatile revenues and expenditures during the next few years because of unusual inflation and other economic trends. Beginning in fiscal year 2022–23, Richmond’s reserve policy now requires a range of reserves from 15 percent to 20 percent of general fund expenditures; however, this minimum may still be too low to meet the city’s needs.
1 We include in this calculation both the $162 million Richmond reported in general fund expenditures and an additional $16 million it transferred out of the general fund that year. The city’s reserve policy requires that transfers out be included along with expenditures to calculate the reserve level.
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Figure 2
Richmond Has Been Increasing Its General Fund Reserves
0 5
10 15
20 25
30 35
40 45
$50
Fiscal Year
2016–17 2017–18 2018–19 2019–20 2020–21 2021–22*
In Millions
General Fund Reserves
Source: Richmond’s audited financial statements and staff reports to the city council.

Note: This figure does not include portions of the general fund balance that Richmond identified as nonspendable or otherwise restricted.
* The fiscal year 2021–22 reserve is based on unaudited estimates from the city.

Insufficient reserves could leave Richmond unable to respond effectively to financial emergencies or maintain city services during economic downturns. Although maintaining two months of reserves is an important milestone that could help the city weather a short‑term crisis—such as emergency infrastructure replacement—the city’s minimum target of 15 percent could quickly prove inadequate in the face of a severe recession or long‑term economic downturn, especially given Richmond’s other risk factors.

In fact, Richmond’s independent auditor found that the city’s reserves constituted a significant weakness as of June 2021. The city’s auditor noted that the low general fund balance could eventually require Richmond to cut costs significantly in order to continue operations while also building up its reserves. Moreover, a city consultant has indicated that cost‑cutting measures could include reducing the overall number of city employees and shuttering certain services, such as library branches. Though dedicating funds to maintain adequate reserves could require Richmond to make difficult budgeting decisions over the next several years, doing so may be necessary to ensure that it can maintain services during uncertain economic times ahead. After we shared our concerns regarding the city’s reserve levels with Richmond, staff reported to the city council that the city 8 CALIFORNIA STATE AUDITOR
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would perform an analysis on adequate reserve levels based on the GFOA’s guidance.

Doing so will be an important step in ensuring that Richmond seeks to maintain adequate fund balances to support its unique needs.

Table 2
Richmond Has Multiple Areas of Concern That May Require Increased Reserves

GFOA IDENTIFIED

RISK FACTOR

HAS RICHMOND

REDUCED OR
ELIMINATED THE RISK?

CONDITIONS WITHIN RICHMOND
Predictability of
revenues and
expenditures
NO
Richmond has identified the potential for significant year‑to‑year variation in its revenue and expenditures. The city has also acknowledged that inflation is a significant uncertainty going forward.

Risk of one‑time
and emergency
expenditures
NO
As we discuss later in the report, the housing authority represents an ongoing risk of significant one‑time expenditures for Richmond.

Potential need for
general fund support
of other funds
NO
Several of Richmond’s other funds have had negative balances, some in excess of $2 million, that staff proposed using the general fund to stabilize in October 2022.

It remains to be seen whether the city can avoid future deficits in its other funds.

Potential impact on
bond ratings YES
Richmond’s credit rating has been steadily improving. The city recently received a reaffirmed credit rating of AA‑ from Standard & Poor’s in August 2022.

Planned other uses
for unrestricted
funds YES
Richmond has previously allocated millions in its reserves for other purposes.

In June 2021, for example, Richmond reported that more than $12 million of its $34.7 million reserve had already been allocated. In October 2022, after we highlighted this risk, staff proposed releasing the majority of its allocated funds such that only $1.4 million of the reserve would have planned uses.

Source: Richmond’s audited financial statements, Richmond’s financial projection and budget documents, staff reports to the city council, reports from credit‑rating agencies, and interviews with city budget staff.

Richmond Forecasts a Significant Long‑Term Deficit, Which Evolving Financial Trends May Worsen
Richmond’s recent budget projections—produced by two different consultants and by city staff members using various models over multiple years—all predict that it will face future deficits because of inadequate general fund revenues and rising expenditures.

For example, in 2021 a consultant anticipated annual budget deficits that would grow from $8 million in fiscal year 2022–23 to $26 million in fiscal year 2027–28, eventually declining and stabilizing at $18 million annually through fiscal year 2030–31. Richmond city staff members completed their projection in September 2022, showing less severe deficits of about $13.8 million in fiscal year 2025–26 before shrinking to $9.4 million by fiscal year 2027–28. Despite the differences between the consultant’s projections, approach, and assumptions and those of the city staff, city staff members agree that Richmond is facing future deficits. City staff have identified several long‑term obstacles to fiscal sustainability, including future costs for infrastructure maintenance, the need to fund growing retirement benefits costs, and the difficulty of addressing these challenges while building up adequate reserves. As Richmond’s consultant warned in 2021, not addressing projected budgetary shortfalls could result in the city being unable to support key city services.
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In recent years, Richmond has avoided deficits both through unexpected revenue and the implementation of a variety of short‑term and long‑term measures, as the text box describes. For example, in fiscal year 2020–21, the city anticipated $6 million in revenue from its property transfer tax; however, it received $20 million, largely due to tax revenue from several large property
sales. This unexpected $14 million—which
the city indicates is unlikely to reoccur—
accounts for the entire $10.5 million increase
in Richmond’s general fund balance for that
fiscal year. In addition, Richmond decreased
its expenses by taking steps such as keeping
certain positions vacant and freezing staff
compensation levels.

Although some of the actions Richmond
has taken—such as implementing new
voter‑approved taxes—will improve its
long‑term fiscal sustainability, others may
not be sustainable in the future. For example,
Richmond has relied on savings from
freezing cost‑of‑living adjustments to some
staff salaries since 2015; however, it recently
increased staff compensation, which will
decrease its ability to maintain balanced
budgets. Thus, Richmond will likely need to
seek additional revenue or decrease other
expenses to prevent future deficits.

In 2021 a consultant provided an overview
of past projections, an updated set of
projections, and warnings about future fiscal
issues to the city council. The consultant
warned that, although the city might
experience individual positive and negative
economic events and might employ various
strategies to report balanced budgets, it would still face a long‑term structural deficit, largely because of increasing personnel costs. Ultimately, the consultant determined that Richmond would need to increase general fund revenues or decrease expenditures by $5 million to $21 million per year in order to both balance its budget and maintain at least minimum reserve levels.

The city’s own financial forecast from September 2022 projects deficits averaging about $6.7 million annually through fiscal year 2027–28, the farthest the city has projected.

Under this forecast, which Figure 3 shows, the city predicts that it will achieve a surplus in fiscal year 2022–23 but then operate at a deficit in each of the subsequent fiscal years, peaking at a shortfall of nearly $14 million in fiscal year 2025–26. The city identified rising costs to fund retirement programs and increased city salaries as contributing factors to its projected deficit.

Examples of Strategies and
Circumstances That Allowed Richmond
to Avoid Deficits in Recent Years
The city identified key measures it employed
or circumstances it benefited from which
allowed it to avoid deficits:

New Revenue. In 2018 and 2020, Richmond
voters approved a new rate structure for taxes
collected from property sales and increased a
business tax.

Pandemic Recovery. In fiscal year 2020–21,
the economic recovery from the pandemic
contributed to the city collecting $5 million
more in sales tax than it budgeted,
$1 million more in property taxes, and
almost $1 million more in utility taxes.

Salary Savings. Until recently, Richmond had
not provided salary increases for non-public
safety staff since 2015 or for many public safety
positions since 2018.

Staff Vacancies. According to the finance
director, about 6 percent of Richmond’s
approximately 690 city positions historically
remain vacant.

Source: Richmond’s financial statements,
Richmond’s website, staff reports to the city council,
and interviews with city staff.
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Figure 3
Richmond’s Latest Projections Show Expenditures Exceeding Revenues 2022–23 2023–24 2024–25 2025–26 2026–27 2027–28
Fiscal Year
100
120
140
160
180
200
220
240
$260
In Millions
$1.3M $7.7M $13.8M $10.9M $9.4M
Projected Revenues
Projected Expenditures
Operating Deficit:

Source: Richmond’s projection documents.

Richmond’s current projections anticipate that, without significant cuts to city expenses or services or without new revenue, its general fund will run critically low on reserves in fiscal year 2027–28, reaching less than $9 million, or the equivalent of less than two weeks of expenditures, as indicated in Figure 4. Richmond’s consultant has provided a variety of options for the city council to consider as long‑term budget solutions to avoid deficits, including contracting out police services, contracting out or reducing library services, reducing social services, and substantially decreasing the city’s workforce. Richmond’s city council has not yet considered these actions because, according to the finance director, city staff is still analyzing its 2022 projection and is reviewing potential methods to create new revenue. Nevertheless, the city’s projections suggest that it will soon need to reduce its expenditures by an average of more than $6 million annually unless its revenues increase by a similar amount. Otherwise, maintaining adequate services for its residents will become increasingly difficult.
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Figure 4
Richmond’s Forecasted Deficits Could Critically Deplete Its General Fund Reserves 0 5
10 15
20 25
30 35
40 45
50 55
$60
2022–23* 2023–24 2024–25 2025–26 2026–27 2027–28
Fiscal Year
General Fund Reserves (in millions)
The city falls below
GFOA's recommended
reserve level.

The city has less
than two weeks of
expenses in reserve.

Recommended
reserve level.

Source: Documents provided by Richmond’s finance department, staff reports to the city council, and the GFOA website. * The starting fund balance in fiscal year 2022–23 is based on unaudited estimates the city published in October 2022.

Further, Richmond may encounter more severe shortfalls than it has forecast because of uncertain economic trends. First, Richmond’s staff explained that the projection assumes that inflation—which was at 8 percent year‑over‑year as of August 2022— will largely return to normal rates after a single year. Though the city’s forecast does account for certain expense increases due to inflation, such as higher health insurance costs, other expense projections may be too low if high inflation persists past 2023. The Congressional Budget Office and Federal Reserve Bank have predicted that it could take multiple years for inflation to return to long‑term average rates, indicating that the city may spend more than it projects in future years because of higher inflation.

Second, the possibility of a recession threatens the city’s long‑term revenue potential. In 2021 Richmond’s consultant noted that the city could face a mild recession beginning in fiscal year 2026–27, suggesting that including that possibility 12 CALIFORNIA STATE AUDITOR
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in projections could help determine whether Richmond’s reserves are sustainable.

However, city staff explained that the 2022 projection does not include the chance of such a recession because events near the end of the decade were too far out for the city to predict. Instead, Richmond included what staff described as a conservative estimate of revenue growth in the first few years of the projection to account for immediate recession risks based on current economic events. However, if the city experiences cyclical recessions in six‑ or seven‑year intervals, as the consultant predicted, another recession at the end of the decade could significantly reduce revenues even as the city draws down its reserves.

Applying more conservative assumptions to Richmond’s projections indicates that the city may have to make steeper budget cuts sooner than it currently projects.

For example, if current rates of inflation persist for some years, Richmond may experience higher than anticipated expenses in fiscal years 2024–25 and 2025–26.

Additionally, if Richmond experiences a recession near the end of the period covered by its forecast, it might take in less revenue in fiscal year 2027–28 than predicted or run a series of deficits in the years following the end of its projections. Such deficits could cause Richmond to face more severe or more prolonged shortfalls than predicted and thus require the city to revisit the difficult budgeting decisions the consultant proposed, such as reductions in service or workforce.

In October 2022, we updated the annual assessment of fiscal risk we conduct related to California cities, which we use in part to identify cities that may require further review. During that update, we adjusted Richmond’s overall fiscal risk rating to moderate risk based on financial information from fiscal year 2020–21. This change in rating and Richmond’s movement from the 9th to the 10th city at greatest risk reflects improvement in certain risk indicators on our online dashboard. However, Richmond retains many high‑risk characteristics, including its risk of significant projected deficits. Our ultimate designation of Richmond as high risk for the purposes of our high‑risk local government agency audit program reflects the totality of the findings in this report and informs our report title, which notes Richmond’s high‑risk status.

The City’s Debt Burden Remains High
Richmond’s large debt burden may become a significant impediment to its ability to maintain balanced budgets. As of June 2021, Richmond had about $250 million in debt related to its governmental activities. However, in fiscal year 2020–21, only $1 million of Richmond’s $162 million in operating expenditures in the city’s general fund directly supported debt service. Richmond paid the remainder of its debt service—another $20 million in fiscal year 2020–21—with the city’s other governmental funds, several of which are designated for this purpose.2 2 Richmond operates a variety of additional funds for specific purposes, such as revenue collection, public safety, and support for certain grant programs. Moreover, it has three funds designated for paying debt service. Much of the money these funds use to pay debt service comes from a special property tax that we discuss later in this section. 13 CALIFORNIA STATE AUDITOR
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These debt service payments represent a risk to the city’s overall finances, including to the general fund. If Richmond’s revenues from other sources prove insufficient, it may need to use general funds to support its debt service. Thus, the city’s management of its overall debt load will be a key step to ensuring the sustainability of its operations in the future. The city’s debt, and the potential strain it imposes on the city’s revenues, leads us to determine that Richmond’s debt burden is a high‑risk area.

Much of Richmond’s $250 million in outstanding governmental activities debt—56 percent as of June 2021—comes from its decision to create short‑term savings using pension obligation bonds. Pension obligation bonds are a type of taxable bond that cities can use to fund their retirement programs and then pay back over decades. After it issued bonds totaling almost $115 million in 2005, Richmond sent $114 million in proceeds to CalPERS to support its retirement obligations. This issuance was part of a complex set of transactions, which resulted in Richmond paying only minimal debt service until two scheduled payment updates in subsequent years. The first of the payment updates occurred in 2013 and resulted in higher annual payments for $75 million of the bonds.

A second update was set to further increase payments beginning in 2023 on another $128 million of the bonds.3
Richmond reports that it initially issued the debt in this manner because it needed short‑term budgetary savings and lacked other options because of its poor credit rating at the time. The staff asserts that the bonds and related agreements created savings on combined debt and pension costs from 2005 through 2013, allowed for smaller savings from 2013 through 2020, and would result in increased costs after 2021. Under this debt arrangement, bond payments would have increased from a range of $9 million to $13 million annually—the amounts the city reported paying from 2013 through 2022—to a range of $15 million to $22 million annually. However, Richmond refinanced this debt in September 2022.

Richmond likely missed an opportunity to lower the debt service costs for its pension obligation bonds. From 2020 through much of 2021, interest rates on U.S. treasury bonds, which influence interest rates on other bonds, were at historic lows. Before September 2022, Richmond had been working toward refinancing its pension obligation bonds for more than a year in an attempt to take advantage of these low interest rates and avoid increased debt expenses. According to Richmond’s finance director, managerial turnover and the city’s lengthy process to find financial and legal consultants caused delay.

Although the city council instructed staff in June 2022 to issue new bonds, bond interest rates began rapidly increasing in March 2022. U.S. Treasury bond rates had almost doubled from 1.65 percent at the end of April 2021 to 3.15 percent as of August 2022.

For perspective, such a rate increase on a $100 million 20‑year bond issuance would result in about $900,000 in higher payments annually. The city’s actual debt structure is more complex than a simple bond, and the city asserts that it achieved limited one‑time savings in 2022 by reducing a fee payment by more than $1 million. However, the volatile interest rates we highlight provide an example of the risks cities take when issuing or 3 The value of the bonds Richmond paid beginning in 2013 and would have begun paying in 2023 is higher than the initial $115 million in proceeds because it includes fees the city incurred both when it entered into the debt and when it subsequently negotiated its interest rates.
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refinancing pension obligation bonds generally and the importance of considering market conditions. For example, in October 2021, staff noted that an interest rate increase of even a tenth of a percent could cost the city more than $1 million in current dollars. Figure 5 shows the timeline of some of the actions Richmond has taken toward refinancing since 2021 and how interest rates have increased over that time.

Figure 5
Richmond Deliberated About Refinancing Options for More Than a Year As Borrowing Costs Rose Jan. 2021
Feb. 2021
Mar. 2021
Apr. 2021
May 2021
Jun. 2021
Jul. 2021
Aug. 2021
Sep. 2021
Oct. 2021
Nov. 2021
Dec. 2021
Jan. 2022
Feb. 2022
Mar. 2022
Apr. 2022
May. 2022
Jun. 2022
Jul. 2022
Aug. 2022
Sep. 2022
Date
U.S. 10-Year Treasury Rates*

0.0 0.5

1.0 1.5

2.0 2.5

3.0 3.5

4.0%
April 6, 2021
Staff presents analysis
and refinancing options
to city council.

April 26, 2022
Staff presents analyst's
conclusions to city council.

June 21, 2022
City council
authorizes issuance.

September 8, 2022
City issues new
bonds.

December 7, 2021
City procures a
financial analyst.

October 5, 2021
Staff recommends quick
action to refinance.

Source: U.S. Treasury website, city council meeting minutes, and staff reports to the city council. * U.S. treasury rates influence interest rates on other bonds. 15 CALIFORNIA STATE AUDITOR
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Further, when Richmond refinanced its bonds, it extended its repayment period, which will add to the total amount of interest it will pay over the lifetime of the bonds. Though the city was scheduled to finish repaying the debt service on its original pension obligation bonds by 2034, it elected to pay debt service on the new bonds until 2044—an extension of 10 years. According to the city’s financial consultant, this extension would further reduce costs to the general fund in the near term and shift more of the debt costs to the future when there would be higher tax revenues available for debt service. However, the consultant also warned that the city’s total general fund costs related to its pensions and debt service for pension obligation bonds would consequently increase by $30 million over the life of the bonds.

Richmond’s delay in refinancing its pension debt and its decision to increase the years required for debt service will impact its taxpayers for decades. Richmond pays the majority of the debt service on its pension obligation bonds through a surcharge on property taxes (pension tax). This arrangement limits the impact on the general fund of debt service for these bonds. However, it also highlights the city’s duty to its taxpayers to secure the best possible investments and to efficiently use the taxes it levies.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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Addressing Its Poorly Funded Retirement
Benefits and Below‑Market Compensation
Will Increase Richmond’s Expenses
Significant Retirement Obligations Continue to Burden the City Richmond’s rising pension costs—the money it contributes annually to support its program to provide guaranteed retirement benefits—are an additional risk to its taxpayers and another potential barrier to maintaining balanced budgets. Richmond participates in CalPERS and pays annual contributions to its pension plans based in part on payroll size and investment growth and the size of its unfunded pension liabilities.4 In fiscal year 2020–21, the city paid more than $35 million in pension costs, almost a quarter of its $162 million in total general fund expenditures for the year; however, some of the general fund costs—about $6 million to $10 million—are typically reimbursed through the pension tax.5 As of 2022, CalPERS reported that Richmond’s annual pension costs are increasing and projects they could reach $53 million by fiscal year 2028–29. Richmond’s rising pension costs led to our determination that those pension costs are an area of high risk.

Richmond is incurring significant annual costs now because its historical contributions have been insufficient to fund all the promised pension benefits. The value of the city’s investments have not yet recovered from significant losses in fiscal year 2008–09, nor has Richmond contributed significant additional funds to make up the shortfall. Thus, Richmond’s pension funding level—the percent of assets it has relative to the cost of promised benefits—dropped to less than 71 percent in 2020, due in large part to minimal returns in several preceding years. By the end of fiscal year 2020–21, the funding level increased to more than 80 percent from strong investment returns for the CalPERS portfolio; however, this is still less than the 100 percent funding target the GFOA recommends. Further, this reported growth does not yet account for significant CalPERS investment losses in the most recent fiscal year. Although Richmond has been making annual payments assigned by CalPERS to address its shortfall, CalPERS projects that it will take decades for the payments to amount to a 100 percent funding level. These payments represent the majority of Richmond’s projected pension costs. For example, in 2022 CalPERS projected that, in fiscal year 2028–29, about 66 percent of Richmond’s payment would go to address the shortfall, while only 34 percent would fund ongoing pension costs. Contributing additional funds to CalPERS to further improve Richmond’s funding status would require difficult budgeting decisions by the city. However, additional contributions represent an opportunity to reduce cumulative city expenditures by tens or hundreds of millions of dollars in the coming decades. 4 Richmond’s investments with CalPERS are separated into two plans—one specifically for safety employees and the second for other employees.
5 In addition to the city’s two CalPERS plans, Richmond pays pension costs of less than $1.5 million for two smaller pension plans. We have focused our discussion on the two larger plans because they represent the significant majority of the city’s annual pension costs. 17 CALIFORNIA STATE AUDITOR
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In July 2022, Richmond’s city council approved the use of an irrevocable trust fund for pension costs, which would give it an additional tool to address its pension shortfall.6 According to CalPERS, such a fund can generate investment income to reduce pension impacts on city budgets and help to offset costs during financial crises. Staff members did not ask the council to adopt a specific funding schedule for the trust fund, but they reported that Richmond should be able to generate almost $1 million per year by seeking discounts from CalPERS for making the city’s annual contribution at the beginning of the fiscal year, as it did in fiscal year 2021–22.

Although Richmond’s pension trust fund may prove an effective decision, it also increases the risk the city will suffer long‑term losses compared to other investment options. Staff reported to the city council that money placed in the pension trust fund might earn more than if the city kept the money in its existing investment accounts and that investing with a private fund manager would give the city greater control over the timing and risk levels of its investments. Staff also reported that the city could use the trust fund to pay immediate pension costs in an emergency. These represent important considerations. Nonetheless, while the private fund would allow the city to take on greater risk for potentially greater returns, such an action also increases the risk of losses. Further, the outside investment manager charges higher management fees than the fees CalPERS charges for similar trust funds.

The city could do more to evaluate possible options for managing its pension costs.

Though staff members acknowledged to the city council that it would also be possible to send additional money directly to CalPERS rather than investing it in a trust fund, they did not provide the council an analysis of the relative fiscal benefits of such a strategy. Instead, they recommended using the outside trust fund because the city would be able to experience benefits sooner and have more control over its investments. The finance director asserted that the city’s management held verbal discussions on the different options available and chose the private trust fund for flexibility and investment diversification reasons, but did not provide an analysis comparing the long‑term fiscal benefits of the different options. Therefore, we are concerned that Richmond has not fully considered the value of using some or all of its expected $1 million in annual early‑payment discounts to make additional payments to CalPERS and directly address its shortfall. Additional payments would only slightly reduce Richmond’s annual contribution to CalPERS in individual years; however, they would have a cumulative effect over time, as amounts invested with the State double about every 12 years at CalPERS’ expected investment growth rate.

Richmond May Have Missed Opportunities to Better Address Its Retiree Health Obligations
In addition to its pension costs, Richmond pays significant annual costs toward retiree health benefits. Richmond’s OPEB programs fund medical insurance costs for its retired employees, with annual costs shared between the city and 6 The city already possessed a trust fund for certain retiree health funding, which we discuss in the next section. The city elected to use this trust fund for both its pension and other benefit costs by dividing it into multiple accounts going forward. We refer to these accounts as separate trust funds for the purposes of this report. 18 CALIFORNIA STATE AUDITOR
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current employees. The city has contributed an average of more than $11.5 million per year since fiscal year 2016–17. Although the city has created trust funds to address its OPEB expenses, the funds’ balances are not yet high enough to be effective. In 2008 the city established a trust fund that it could use to partially fund its future OPEB obligations in a similar manner to its approach to pension funding, a practice the GFOA recommends. As of June 2021, Richmond had $39 million in its two OPEB trust funds—significant growth over its $9 million balance in fiscal year 2016–17. However, the $39 million still represented only 27 percent of Richmond’s promised future benefits.7 This funding level is far short of the GFOA’s recommended target of 100 percent funding. As a result, the funds’ investment income has been historically inadequate to pay benefits without millions of dollars in additional annual contributions from the city.

In 2016 the city council adopted a policy to place into its OPEB trust funds half of its one‑time revenues and half of its surpluses above those needed to meet its reserve goals. However, until recently, Richmond had not made a contribution under this policy since 2018. Richmond’s finance staff explained that when the city increased its reserve target from 7 percent to 15 percent of its budgeted expenditures beginning in fiscal year 2018–19, the likelihood of dedicated contributions decreased. After we discussed the lack of contributions with city management, staff proposed and the city council approved a $6 million contribution to the OPEB trust funds in October 2022. The city also enacted a new policy in 2022 that removed the requirements for Richmond to make the types of contributions described above in the future.

We acknowledge that the city’s surplus revenue may have been limited as it built reserves and responded to the pandemic. However, finance staff were only able to provide evidence of very limited analysis they had conducted to determine whether certain unexpected revenues qualified under the policy and should have been contributed to the OPEB trust fund. Notably, Richmond did not make dedicated contributions to its trust funds in fiscal year 2020–21, despite exceeding its reserve target by $6.5 million and reporting a surplus of $10.4 million, largely as a result of tax revenue from property sales. Thus, a contribution of up to $6.5 million may have been appropriate once the city determined how much of its surplus and revenue was eligible under its policies. Finance staff asserted that Richmond did not need to contribute any of this money to OPEB because the city set aside much of its surplus for future fiscal years. However, the city’s policies did not exempt such set‑aside funds from being considered for OPEB contributions. Had Richmond completed a more thorough analysis to determine whether additional dedicated contributions were appropriate based on its OPEB funding policy and reserve policy in fiscal year 2020–21, it may have been able to more quickly increase the balance of its OPEB trust funds. Increasing this balance would allow the city to reduce its long‑term annual costs, potentially saving it millions of dollars in the coming decades. 7 The majority of Richmond’s OPEB funds are in the original trust fund it established in 2008. In 2017 the city established a second, smaller trust fund to invest OPEB funds for police officers. 19 CALIFORNIA STATE AUDITOR
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Increasing the Competitiveness of City Salaries Will Incur Additional Costs As part of Richmond’s efforts to reduce expenses, it did not provide cost‑of‑living salary increases to city employees for up to the past seven years. Richmond provides different compensation packages for several groups of employees, such as those in executive positions, staff positions, and public safety positions. For its non‑public safety employees, the city last offered a cost‑of‑living adjustment to salaries in July 2015, more than seven years ago. Meanwhile, before 2022, the city had last offered nonmanagerial public safety employees in the police and fire departments cost‑of‑living increases in 2018. As Table 3 shows, these decisions came in spite of prices having risen 24 percent since 2015.

According to Richmond’s budget administrator, these decisions to not provide salary increases represented the types of difficult steps the city has taken in order to promote fiscal stability.

Table 3
Richmond Delayed Providing Raises for Years as the Cost of Living Significantly Increased

EMPLOYEE
CATEGORY EMPLOYEE LEVEL LAST COST‑OF‑LIVING

ADJUSTMENT

RECENT OR NEXT
COST‑OF‑LIVING

ADJUSTMENT

INFLATION SINCE LAST
COST‑OF‑LIVING ADJUSTMENT
(THROUGH JUNE 2022)
Non‑Safety All July 2015 Jan. 2023 (5%) 24%
Public Safety Firefighters July 2018 June 2022 (1%) 18% Fire Management July 2018 None Scheduled 18%
Police Officers July 2018 June 2022 (1%) 18%
Police Management Jan. 2016 June 2022 (1%) 25%
Source: Richmond’s bargaining agreements, Bureau of Labor Statistics website, and compensation information on Richmond’s website.

Richmond’s decision to reduce payroll costs likely contributed to its high vacancy rate for city positions and high turnover rates among employees. Although Richmond’s overall vacancy rate varies from month to month and has been affected by such factors as hiring freezes during the pandemic, the director of finance stated that vacancy rates are about 6 percent annually—high enough to negatively affect department operations. Further, the city experienced several executive departures in recent years. As of April 2022, when the audit started, Richmond had filled some of those positions, including city manager, deputy city manager, library and community services director, and finance director, on an interim basis.8 According to the city’s data, as of April 2022, several departments were experiencing vacancy rates significantly above the 6 percent estimate. For example, the finance department reported a 24 percent vacancy rate, the police department a 20 percent vacancy rate, and the public works department a 15 percent vacancy rate. 8 As of October 2022, one deputy city manager position continues to be vacant, and the library and community services director is filled on an interim basis.
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Vacancy rates this high can affect the efficiency and effectiveness of city services and at times can result in increased costs. For example, the finance director acknowledged that Richmond’s finance department has been adversely affected by high vacancies and turnover, limiting the staff’s ability to take on projects and complete the department’s duties. Similarly, the 20 percent vacancy rate in Richmond’s police force has resulted in high overtime costs. Significant overtime can further result in issues with staff retention and may ultimately affect critical services.

Richmond is taking steps to increase employee compensation. In 2021 the city negotiated a cost‑of‑living adjustment for its non‑safety employees. Richmond agreed to a 5 percent cost‑of‑living increase to take effect in January 2023, followed by 4 percent increases in each of the next two years. Richmond also provided a cost‑of‑living salary increase in 2022 to many of its safety employees, an increase that the city acknowledged it had delayed implementing since 2020. In addition to these adjustments, a consultant to the city issued a compensation study in 2021 that determined the city was typically paying 7 percent to 8 percent below the market rate for base pay for its positions. In response, the city built funding for addressing the consultants findings into its fiscal year 2022–23 budget.

These efforts to increase compensation represent a substantial policy shift for the city, as it must now identify alternative avenues for long‑term savings or generate additional revenues. Although salary increases may assist Richmond in recruiting and retaining staff, the associated expenses will increase the burden on the annual budget. In June 2022, staff reported to the city council that the upcoming negotiated cost‑of‑living adjustments contributed to significant increases in fiscal year 2022–23 to salaries and benefits over the previous year. In total, the city expects an additional $7.4 million in fiscal year 2022–23 costs to implement compensation increases based on its consultant’s report and cost‑of‑living adjustments. The finance director explained that Richmond is considering a variety of options to address these new costs, including reducing professional service expenditures and updating some positions’ responsibilities to acknowledge that other positions are expected to remain vacant.

To alleviate the costs of increasing city employees’ compensation, Richmond should also take the opportunity to reassess the size of its staff. Richmond budgeted savings of approximately $5.8 million from fiscal year 2021–22 vacancies, and it budgeted a vacancy savings of $8.3 million for fiscal year 2022–23, which staff asserted would compensate for that year’s allocation for salary adjustment. Increasing recruitment would reduce the size of this savings. Although some recruitment is likely inevitable—for example, recruiting some additional police officers to reduce overtime—taking a measured approach to filling vacancies will allow the city the time to determine whether any departments, including police and fire, should or could operate with a smaller staff and thereby allow the city to eliminate vacant positions. For example, in fiscal year 2021–22, staff reported that eliminating 12 vacant positions in the police department saved $3 million from the police budget. The finance director has stated, that in some departments, high vacancy rates have limited operations and efficiency. Nevertheless, by assessing its staffing needs, the city may find other departments that need fewer additional staff than their vacancies would suggest.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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Blank page inserted for reproduction purposes only.
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The City Has Mismanaged the Richmond
Housing Authority
A Decade of Mismanagement Will Result in the Housing Authority Transferring Its Public Housing Responsibilities to Other Entities
The city has ineffectively managed the finances of the housing authority for a decade and, as a result, HUD—the federal oversight agency for local housing authorities—has directed the housing authority to transfer its programs and resources to other entities. The housing authority is a separate legal entity from the city. The city manager acknowledges that the city manages the authority’s finances but could provide no agreement between the city and the housing authority other than the city council’s approval of the authority’s budget. This included a general fund subsidy that provided $800,000 of its $4.8 million annual revenue in fiscal year 2021–22. Despite this support and assistance, the housing authority has failed to comply with basic financial requirements and best practices. This has increased the risk that neither the city, the housing authority, nor the public may be aware of the housing authority’s actual financial condition.

Most importantly, the housing authority has not completed since fiscal year 2016–17 annual financial audits required by state and federal law. In July 2022, housing authority staff requested that the authority board and the city approve a contract amendment with the authority’s financial services contractor to support the housing authority’s auditors in completing their work. According to the housing authority’s executive director, Richmond has not dedicated sufficient financial staff who are trained in federal requirements to the housing authority. City staff acknowledged in November 2018 that the city had not completed the necessary tasks to know the authority’s financial position, such as being able to provide bank reconciliations. As of October 2022, the audits remain incomplete.

The lack of audited financial statements for the housing authority has in turn affected Richmond’s financial reporting. From fiscal year 2016–17 to the most recent audited financial statements in fiscal year 2020–21, the city’s auditors noted that they could not obtain sufficient appropriate evidence to provide an audit opinion on the financial statements for Richmond’s businesslike activities, which include the housing authority.

Because the housing authority has not completed its annual financial audits since fiscal year 2016–17, neither it, the city, nor those that the authority or the city serve can be confident in the authority’s finances and its potential effects on the city.

In fiscal year 2020–21, Richmond also decided to not seek repayment for the costs of services provided to the housing authority because the expenses did not meet federal requirements. In 2021, a HUD consultant reviewed the city’s 2019 audited financial statements and found that Richmond claimed that the housing authority owed it more than $15 million for services rendered, including nearly $5 million in indirect cost allocations.

According to the HUD consultant, federal law disallowed nearly all—$14.7 million—of 23 CALIFORNIA STATE AUDITOR
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those claimed expenditures. In 2022 the city decided to withdraw its claim for these expenses and was required to write off its claim to these funds before completing its fiscal year 2020–21 financial statements.

As a result of these and other instances of financial mismanagement and in response to HUD concerns, the housing authority is planning to transfer its housing programs and resources to other agencies and partners. As Figure 6 indicates, HUD identified significant deficiencies concerning the housing authority’s financial practices, oversight, documentation, and accountability going back more than a decade. For example, in its 2009 audit, HUD found that the housing authority had issued payments for services related to the management of housing units without determining whether the invoiced amounts were appropriate. In a subsequent audit in 2016, HUD found that the housing authority had misled HUD on the status of its financial resources, submitted falsified documentation, and allowed the city to use the housing authority’s HUD funds. It also found that the city had charged the housing authority for rent and services at prices that seemed excessive. HUD found that these actions resulted in more than $2 million in misspent HUD funds and nearly another $1 million in costs the housing authority could not support. The housing authority had also incurred other questionable transactions that unnecessarily limited its resources and the effectiveness of its public housing program.

Further, in its annual evaluations of public
housing performance, HUD has regularly
found the housing authority to be deficient.

In these reviews HUD assesses and scores the
performance of public housing agencies based
on the indicators noted in the text box. For
the nine years from 2011 through 2019, HUD
designated the housing authority as below
HUD standards in seven of those years. From
2017 through 2019, HUD found the authority
to be well below standards.

As a result of the consistently poor reviews, in
2019 HUD created and the housing authority
signed a recovery agreement with the intent,
according to HUD, to bring about the transfer
of the housing authority’s direct public
housing responsibilities to other agencies and
partners. Richmond acknowledged this agreement by the signature of its mayor and agreed to work in good faith to assist the housing authority and HUD in accomplishing the tasks in the agreement, many of which are described in the next section. This process, when complete, will result in the housing authority no longer directly providing housing because private entities will rehabilitate and manage its real property under long‑term leases. The housing authority’s role will be reduced to overseeing the lease agreements. The housing authority’s partners will ultimately maintain the existing public housing in the future, but the housing authority’s delays in completing the recovery agreement—and the associated delays in maintenance and rehabilitation of affected housing units—are negatively affecting Richmond residents who currently rely on that public housing.

HUD Performance Indicators
Physical Condition Indicator—Reviews
whether the housing is decent, safe, sanitary,
and in good repair.

Management Operations Indicator—
Measures occupancy, tenant accounts
receivable, and accounts payable.

Financial Condition Indicator—Determines
whether sufficient financial resources exist to
support the provision of housing.

Capital Fund Program Indicator—Determines
whether funds are obligated and units
occupied within program grant deadlines.

Source: Federal law.
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Figure 6
HUD Has Repeatedly Identified Mismanagement of the Housing Authority After its 2009 audit of the housing
authority, HUD designated the
housing authority as a
TROUBLED AGENCY.

Deficient financial practices—such as releasing
payments without supporting documentation.

Failures in oversight—allowing payments
beyond a contract’s expiration.

Poor documentation practices—such as failing
to keep documents required for procurement
and for tenant files.

Inadequate accountability—such as:
– Rejecting the results of competitive procurement
processes.
– Staff participating in awarding contracts to entities with whom staff members had a conflict of interest.

After its 2016 audit of the housing
authority, HUD again designated
the housing authority as a
TROUBLED AGENCY.

Inadequate financial practices and lack of
accountability—exemplified by:
– Submitting documentation that misrepresented the
authority’s finances.
– Failing to conduct required procurement processes.

Weak oversight—such as:
– Housing authority staff not reviewing and approving
transactions initiated by the city.
– Providing and paying for city staff and services using authority funds without HUD approval.

HUD
HUD’s 2009 audit of the housing authority
found the following: HUD's 2016 audit found the following:

Source: HUD audit reports.

The Housing Authority Missed Mandatory Deadlines to Complete the Recovery Agreement
HUD may seek remedies because the housing authority is not complying with the recovery agreement. The recovery agreement requires the housing authority to meet target dates for 26 individual tasks, such as submitting a financing plan and issuing a request for redevelopment proposals. Due dates range from October 2019 to November 2022. The authority has made some progress in satisfying the terms of the recovery agreement. For example, the authority stated that it transferred to another organization a property that had been vacant since 2015 because it was uninhabitable. However, as of September 2022, the housing authority had missed 11 other deadlines, many by more than a year, as Figure 7 shows. In May 2022, HUD stated in a letter to the housing authority that it will not provide extensions to these 25 CALIFORNIA STATE AUDITOR
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deadlines and will instead seek remedies against the housing authority, including suspension or debarment.9 In July 2022, the housing authority reported to its board that it had not been able to meet required deadlines because of staffing shortages and unspecified "unforeseen cirumstances.” The housing authority’s executive director also indicated that, although the deadlines were originally reasonable, the pandemic has made the deadlines unreasonable, as each step required additional time to complete.

Figure 7
The Housing Authority Has Failed to Comply With HUD’s Recovery Agreement Deadlines as of September 2022
2+ YEARS
OCTOBER: Signed recovery agreement with HUD.

OCTOBER: Submit application for Richmond Village 1 & 2 property redevelopment.

APRIL: Submit final voucher program closeout audit to HUD.

MAY: Finalize contract with Nystrom property developer.

SEPTEMBER: Obtain HUD approval for Nystrom property redevelopment application.

NOVEMBER: Submit financial plan for Richmond Village 1 & 2 property redevelopment.

DECEMBER: Close conversion of Richmond Village 1 & 2 property to ownership and operation by private developers.

MAY: Obtain HUD approval for Richmond Village 3 property redevelopment application.

JUNE: Obtain vouchers to ensure continuity for Richmond Village 3 residents as property is transferred to new owner.

DECEMBER: Obtain HUD approval for a redevelopment application for undeveloped Hacienda property parcels.

DECEMBER:Begin construction of Richmond Village 3 redevelopment.

MARCH: Start Nevin Plaza redevelopment.

OVERDUE
2019
2020
2021
2022
2+ YEARS
2+ YEARS
2+ YEARS
1+ YEARS
1+ YEARS
262 DAYS
1+ YEARS
1+ YEARS
262 DAYS
202 DAYS
Source: Housing authority documentation.

Note: Overdue total as of September 19, 2022.
9 A suspension is imposed for a temporary period, pending the completion of an investigation or legal proceeding, and it results in an immediate exclusion from participation in further government transactions. A debarment sanction means that an organization and its affiliates are excluded from conducting business with any federal agency. Debarments are imposed for criminal and/or serious HUD program violations. A suspension may lead to debarment. 26 CALIFORNIA STATE AUDITOR
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Avoiding delays in the recovery agreement is critical because it helps ensure that residents have safe housing. Under federal and state law, the housing authority is responsible for ensuring that the housing units it provides are habitable and safe.

However, the housing authority has not always been able to meet HUD’s physical conditions indicator; in 2013, 2014, and 2018, the housing authority scored low enough on this indicator for HUD to require corrective action. Residents of one housing authority building sued the city and housing authority in 2015, listing mold, vermin, faulty elevators, and lax security as some of the conditions they had to endure. The city and the housing authority settled this lawsuit in 2019 for more than $650,000. The housing authority stated that it directly manages about 240 housing units in two complexes as of August 2022 and indicated that, under the recovery agreement, it will sell or transfer all the housing units to other entities.

For example, the housing authority entered into a long‑term lease with a developer for the Hacienda development, which will rehabilitate the building and manage it as affordable housing for seniors. Further delays in the housing authority’s implementation of the agreement could result in residents experiencing more problems in their housing and more lawsuits.

The Housing Authority May Owe the Internal Revenue Service $1 Million or More in Taxes and Penalties
The Internal Revenue Service (IRS) claims that the housing authority owes significant taxes and penalties from 2018 and 2019. Federal law requires the housing authority to submit tax information on property owners who receive federal funds through the housing authority—in this case through a housing voucher program—to ensure that those property owners pay the taxes they owe and, in some instances, to withhold taxes and submit them on the property owners’ behalf. The housing authority reported to its board in June 2022 that it had failed to report tax information in 2018 and 2019, and that failure to comply could result in $9 million in withholding taxes and penalties.

The housing authority took no significant action to address this potential liability until the start of this audit. However, it has been able to submit sufficient records so that the IRS agreed to reduce the remaining taxes and penalties to $1 million.

According to the housing authority’s executive director, the city, which provides financial services for the housing authority, had not provided sufficient support or resources to allow it to meet IRS requirements. The city manager indicated that the prior finance director and housing authority executive director were not engaged in the level of detail as the new finance director and executive director. Although the city is not directly liable for these debts, because it provides significant funding to the housing authority, the existence of the outstanding taxes and penalties results in increased risk to Richmond.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.
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The City Has Not Consistently Followed
Its Contracting Policies or Updated Its
Fees as Required
Richmond Could Do More to Demonstrate It Is Following Requirements to Ensure the Best Value for Its Contracts
Lack of documentation sometimes makes it difficult for Richmond to demonstrate that it complies with its own contracting policies. The city’s municipal code and its purchasing policy outline requirements that promote fairness and transparency in how it selects vendors. Specifically, for contracts between $5,000 and $50,000, city staff must contact vendors to obtain three written quotes before awarding the contract. For contracts valued at $50,000 or more, the city must follow a competitive bidding process. The municipal code allows for limited exceptions to its requirements for multiple quotes or bids, such as during an emergency or when the city determines it is economical for the city to use the pricing and terms established by another public agency. Such requirements are key measures that help ensure that the city is fairly selecting vendors that provide the best value. However, when we reviewed 10 contracts the city entered into from 2019 through 2021, we identified at least two instances in which the city could not demonstrate that it followed its own procurement policies or it had made errors or omissions that could have affected its management of contracts.

In one example related to a $24,500 contract approved by the city council, Richmond did not justify its use of an alternative contracting process that allows it to purchase supplies, equipment, or services by using the pricing and terms of a contract negotiated by another public agency that has already procured those same goods or services. The municipal code allows Richmond to use this method so long as the finance department determines it would be in the city’s best interest. However, staff did not perform such an analysis and did not explain that Richmond was using this method when reporting the contract to the city council. For another contract originally bid at $63,800, city staff proposed and the city council approved a higher value of $71,200 for the contract without a documented explanation. Inconsistent documentation limits the city’s ability to demonstrate that it is properly procuring goods and services and complying with its own policies.

According to finance staff, staff from other departments typically enter into contracts that the finance staff then approves. The finance department has not required other staff to follow specific formats when submitting related documentation. When we reviewed with the finance department the various documentation issues we identified, staff acknowledged the need for stronger and more consistent contract documentation practices going forward. The finance director also noted that the finance department had enforced more rigid documentation requirements in the past but that turnover in other departments has increased the workload for finance staff because of the need to provide more training. She further explained that the city was implementing a new training program to familiarize other departments’ staff with procurement requirements. 29 CALIFORNIA STATE AUDITOR
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As we discussed earlier, competitive bidding allows the city to demonstrate that it is obtaining goods and services at the appropriate value and selecting vendors without inappropriate influence. When Richmond does not adequately document its adherence to bidding requirements or the use of allowable exceptions to its procurement process, it risks overspending for goods and services.

City Staff Have Not Updated Fee Schedules as Required
Richmond has not consistently updated its service fees, and as a result, it risks incurring general fund costs for each service those fees should cover. The city’s municipal code generally requires the city manager to update the city's fee schedule annually to ensure that fee‑supported services, such
as engineering site plan reviews or code
compliance inspections, have fees that
are sufficient to cover the cost of those
services.10 While performing the annual
update, the city must consider components
such as direct costs and overhead, as the
text box describes. The municipal code
also requires that the city’s finance director
propose quarterly to the city council any
adjustments to its taxes and fees based on
the Employment Cost Index (ECI). The ECI
is a federal economic indicator that measures
changes in hourly labor costs to employers.

Despite setting these requirements, the
city has not conducted either updates or
adjustments at the required frequency.

From 2018 through 2022, Richmond did
not review and update the full range of its
existing fees. Richmond performed three partial updates during this period—in 2018, 2020, and 2022. In 2018 Richmond analyzed the costs associated with the services its Planning Division provided and updated the associated fees. However, it updated only a selection of fees from two others of its eight fee‑levying departments and divisions: its Water Resource Recovery Division and Library and Community Services Department.

For example, the city updated only six of the 50 fees used by its Water Resource Recovery Division. It made no fee updates for the remaining city departments in 2018 and no fee updates at all in 2019 or 2021. In 2020 Richmond updated certain fees that developers could pay in lieu of constructing affordable housing units within residential development projects, but its updates did not include all fees for the Building Division or any fees for other departments or divisions in the city. Richmond’s 2022 effort was improved but still not complete. At that time, it conducted full fee updates for the police and fire departments and for Code Enforcement, and it updated a selection of 10 The fee schedule requires an annual update for a majority of the fees it lists. However, a small subset of fees, such as those levied for investigating work done without permits, require updates only as needed.

Cost Components for Fee Updates
Applicable Direct Costs, such as wages,
overtime, benefits, services, and supplies.

Applicable Indirect Costs, such as building
and equipment maintenance and operation,
communications and computer expenses.

Overhead, including but not limited to the
distributed costs of the department head
and support staff, and of the city council,
city manager, finance department, and other
staff and support services provided to the
entire city.

Other Costs, including debt service costs and
fixed asset depreciation.

Source: Richmond municipal code.
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fees for departments and divisions, including Community Development and the Library, but it did not conduct fee updates for other departments. Figure 8 provides a summary of Richmond’s fee updates for the eight key departments from 2018 through 2022.

Figure 8
Richmond Has Not Regularly Updated Its Fees and May Not Be Recovering Costs for Related Services Police Department
Fire Department
Library and Community Services
Public Works Engineering Department
Public Works Water Resource Recovery
Community Development Planning Department
Community Development Building Department
Community Development Code Enforcement
2018 2019 2020 2021 2022
The city updated the department’s fees to reflect the cost of providing services.

The city updated some but not all of the department’s fees to reflect its costs.

The city did not update any of the department’s fees to reflect the cost of providing services.

Source: Richmond municipal code and analysis of Richmond city council agenda documents from 2018 through 2022.

Note: The analysis above includes updates to existing fees and does not include the addition of various new fees the city implemented between 2018 and 2022.

Even the fee updates Richmond has completed may be inadequate. We reviewed three of the largest fees Richmond assessed—accounting for 15 percent of Richmond’s assessed fees in fiscal year 2020–21—to determine whether the city was reasonably recovering its costs. The city was unable to provide documentation detailing how it calculated costs related to an engineering permit fee for digging and therefore cannot demonstrate that it is appropriately recovering its costs. Richmond was able to provide documentation partially supporting the reasonableness of the other two fees we reviewed. In 2020 the city updated its building fees related to developing affordable housing based on a fee assessment completed in 2019, and in 2018 it updated its fees for reviews of California Environmental Quality Act filings. However, because it has 31 CALIFORNIA STATE AUDITOR
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not updated these fees in several years, it is unclear whether the updated assessments continue to cover the city’s costs. In fiscal year 2020–21, the city assessed fees of $2.1 million in developer fees and $1.6 million for environmental impact report reviews.

Richmond has also not adjusted its rates and fees for inflation as frequently as is set forth in its municipal code. We found that, from 2018 through 2022, Richmond adjusted its fee schedule to account for inflation on a roughly annual basis while the municipal code requires quarterly adjustments. The city states that it has adjusted its fees annually rather than quarterly for more than a decade because of the labor‑intensive nature of fee updates. Although that did not meet the requirements of the municipal code, we estimate that the city’s practice of adjusting its fees annually rather than quarterly resulted in a limited financial impact of $208,000 in 2021, the equivalent of only 0.7 percent of the total fees it collected.

The city indicated that updating its fees on a set schedule has not been feasible because of staffing limitations and the significant amount of labor required to calculate fee increases. The city’s assessment may be reasonable given the staffing issues we identified earlier. The city must balance the time and labor of conducting more frequent updates against any potential lost revenue to determine a reasonable frequency for conducting citywide fee updates, and it should revise its municipal code to reflect its decision on the required frequency of those updates.

Please refer to the section beginning on page 3 to find the recommendations we have made to address this area of risk to the city.

We conducted this audit in accordance with generally accepted government auditing standards and under the authority vested in the California State Auditor by Government Code section 8543 et seq. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on the audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Respectfully submitted,
MICHAEL S. TILDEN, CPA
Acting California State Auditor
November 10, 2022
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APPENDIX A
The State Auditor’s Local High‑Risk Program
Government Code section 8546.10 authorizes the California State Auditor (State Auditor) to establish a local high‑risk program to identify local government agencies that are at high risk for potential waste, fraud, abuse, or mismanagement or that have major challenges associated with their economy, efficiency, or effectiveness.

Regulations that define high risk and describe the workings of the local high‑risk program became effective on July 1, 2015. Both statute and regulations require that the State Auditor seek approval from the Joint Legislative Audit Committee (Audit Committee) to conduct audits of local entities.

To identify local entities that may be at high risk, we analyze audited financial statements and unaudited pension‑related information for more than 470 California cities. This detailed review includes using financial data to calculate indicators that may be indicative of a city's fiscal stress. These indicators enable us to assess each city’s ability to pay its bills in both the short and long term. Specifically, the indicators measure each city’s financial reserves, debt burden, cash position or liquidity, revenue trends, and ability to pay for employee retirement benefits.

In October 2019, we determined that Richmond potentially met the criteria for being at high risk. We conducted an assessment in February 2021 to determine the city’s awareness of and responses to these issues as well as to identify any other ongoing issues that could affect our determination of whether the city is at high risk. After conducting our initial assessment, we concluded that Richmond’s circumstances warranted an audit. We sought and, in June 2021, obtained approval from the Audit Committee to conduct an audit of Richmond.

If a local agency is designated as high risk as a result of an audit, it must submit a corrective action plan. If it has not provided its corrective action plan in time for inclusion in the audit report, it must provide the plan no later than 60 days after the report’s publication. It must then provide written updates every six months after the audit report is issued regarding its progress in implementing its corrective action plan. This corrective action plan must outline the specific actions the local agency will perform to address the conditions causing us to designate it as high risk and the proposed timing for undertaking those actions. We will remove the high‑risk designation when we conclude that the agency has taken satisfactory corrective action and the deficiencies in the audit have been satisfactorily addressed. 33 CALIFORNIA STATE AUDITOR
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APPENDIX B
Scope and Methodology
In June 2021, the Audit Committee approved a proposal by the State Auditor to perform an audit of Richmond under the local high‑risk audit program. We conducted an initial assessment of Richmond in February 2021 in which we reviewed the city’s finances to determine whether it demonstrated characteristics of high risk pertaining to the following six risk factors specified in state regulations:
• The local government agency’s reported financial condition has the potential to impair its ability to efficiently deliver services or to meet its financial or legal obligations.
• The local government agency’s ability to maintain or restore its financial stability is impaired.
• The local government agency’s financial reporting does not follow generally accepted government accounting principles.
• Prior audits reported findings related to financial or performance issues, and the local government agency has not taken adequate corrective action. • The local government agency uses an ineffective system to monitor and track state and local funds it receives and spends.
• An aspect of the local government agency’s operation or management is ineffective or inefficient; presents the risk for waste, fraud, or abuse; or does not provide the intended level of public service.

Based on our initial assessment, we identified concerns about Richmond’s financial condition and outlook and its debt. The following table lists the objectives that the Audit Committee approved and the methods we used to address them. 35 CALIFORNIA STATE AUDITOR
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Audit Objectives and the Methods Used to Address Them

AUDIT OBJECTIVE METHOD
1 Review and evaluate the laws,
rules, and regulations significant
to the audit objectives.

Identified and reviewed relevant federal and state laws, rules, regulations, municipal code, and other background materials applicable to the city. 2 Evaluate Richmond’s current
financial condition and ability to
meet its short‑term and long‑term
financial obligations while
continuing to provide services to
its residents.
• Developed and analyzed trends of revenues, expenditures, and other relevant financial risk indicators from fiscal years 2016–17 through 2020–21.
• Reviewed the city’s methodology for creating its financial projections and assessed whether those projections are reasonable.
• Assessed the reliability of selected data elements in the city’s financial systems.
• Reviewed the city’s financial statements and accounting records to determine the position of its enterprise funds and the degree to which it has relied on general fund subsidies in the past five fiscal years. 3 Identify the causes of Richmond’s
financial challenges and
determine whether the city has
developed an adequate plan for
addressing those challenges. This
will include assessing the city’s
efforts to improve its financial
condition by increasing revenue
and reducing expenditures.
• Interviewed city staff and reviewed documentation, such as presentations to the city council, to identify underlying revenue and expenditure issues the city believes are contributing to its financial challenges. • Reviewed Richmond’s “Plan 2030,” financial forecasts and presentations, and related documentation.
• Assessed the extent to which staff compensation contributed to Richmond’s financial challenges by doing the following: reviewed Richmond’s salary survey, budgets, and federal inflation reports to determine when the city last provided cost‑of‑living increases to its staff and to estimate the impact of inflation since that time, compared recent staff salaries in key positions to those in neighboring cities, and reviewed staffing levels for departments with significant vacancies or overtime. • Assessed risks related to the city’s reliance on pension obligation bonds and current refinancing plan based on GFOA guidance and available reports on pension costs. We also reviewed the city’s planning and costs related to its OPEB liabilities.
4 Determine whether Richmond’s
budgeting processes align
with best practices. In addition,
evaluate the city’s procedures
and underlying assumptions for
projecting future revenue and
expenditures, and determine
whether the projections result in
balanced budgets and accurate
financial forecasts.
• Evaluated the policies, processes, and practices the city used to develop its budgets and compared them with applicable criteria and GFOA best practices. We determined that the city complied with its policies, processes, and practices when developing its budget. Further, we determined that Richmond’s budgeting practices comply with GFOA best practices.
• Assessed the reasonability of assumptions used by the city in its revenue and expenditure projections. We reviewed budget and financial records to determine whether the projections resulted in balanced budgets and accurate financial forecasts from fiscal years 2016–17 through 2020–21. 5 Assess Richmond’s process for
setting, increasing, or decreasing
fees or rates to ensure that it
complies with applicable laws,
rules, regulations, and best
practices. For a selection of these
fees and rates, determine whether
they cover the city’s costs of
providing services.
• Reviewed state law, the city’s municipal code, and guidance from GFOA and the California and National Leagues of Cities to identify requirements and best practices for setting municipal fees and rates. • Interviewed staff and reviewed documentation to determine Richmond’s process for setting fees and rates. We determined whether that process complied with state law, the municipal code, and best practices. • Assessed whether city’s fees covered its costs for providing services by reviewing supporting documentation for the rates for three fees. 36 CALIFORNIA STATE AUDITOR
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AUDIT OBJECTIVE METHOD
6 Evaluate Richmond’s efforts
to address the deficiencies its
external auditors identified in their
reports for fiscal year 2018–19
and earlier years and those the
Inspector General identified in
its 2016 report related to the
Richmond Housing Authority.
• Conducted interviews and reviewed the city’s and housing authority’s documentation to determine the progress of the city and housing authority to address associated audit recommendations.
• Conducted interviews and reviewed documentation to assess the housing authority’s efforts to comply with the recovery agreement timeline.

Further, to the extent possible, we assessed the risk to the city associated with missing associated deadlines.
7 Review and assess any other
issues that are significant to the
audit.
• To assess the city council’s compliance with open‑meeting laws related to closed sessions, we reviewed five closed city council meetings held from 2018 through 2021. We had no reportable findings.
• To assess potential conflict‑of‑interest violations, we reviewed statements of economic interest submitted by the city council, mayor, and certain other leadership positions. We had no reportable findings. • Reviewed a selection of 10 contracts from the city’s purchasing database and paper records from 2019 through 2021 to determine whether the city followed its competitive bidding and contract approval requirements, the city received the services procured, and the city made payments in accordance with the contract terms.

Source: Audit workpapers.

Assessment of Data Reliability
The U.S. Government Accountability Office, whose standards we are statutorily obligated to follow, requires us to assess the sufficiency and appropriateness of computer‑processed information we use to support our findings, conclusions, or recommendations. In performing this audit, we relied on electronic reports that we obtained from the city’s financial system. We completed data validation, logic, and completeness testing. We found the city’s financial accounting system to be sufficiently reliable for the purpose of reviewing its financial condition. 37 CALIFORNIA STATE AUDITOR
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*
* California State Auditor’s comment appears on page 43. 39 CALIFORNIA STATE AUDITOR
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Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM

THE CITY OF RICHMOND
To provide clarity and perspective, we are commenting on Richmond's response to the audit. The number below corresponds to the number we have placed in the margin of Richmond's response.

The city’s assertion that, in the past, it did not meet minimum reserve policy targets does not align with its financial reports and policies. Richmond’s fiscal year 2020–21 reserve policy identified several types of funds that the city considered part of its reserve. Based on this policy, the city exceeded its fiscal year 2020–21 reserve target and may have been able to contribute up to $6.5 million to its OPEB trust fund. However, as we indicate on page 19, city staff did not conduct a thorough analysis of whether—under its then existing policy— these funds should have been placed in its OPEB trust fund and thus the city may have missed an opportunity to shore up this area of financial risk. 1 43 CALIFORNIA STATE AUDITOR
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Request for Proposals
Workforce Analysis
Release Date: February 17, 2023
Deadline for Submittal
5:00 PM PST
March 17, 2023
Contact: Nickie Mastay, Deputy City Manager
Email: [email protected]
Phone Number: (510) 620-6609
City of Richmond
City Manager’s Office
1964

INTRODUCTION
The City of Richmond (City) is requesting proposals from qualified professionals to perform a workforce analysis.

This request for proposal (RFP) describes the required scope of services, the selection process, and the minimum information that must be included in the proposal. Failure to submit the information in accordance with the RFP requirements and procedures is cause for disqualification. The anticipated term of this contract will be for a period of one year with an option to renew for an additional year with mutual agreement of both parties.

Qualified professionals are required to read and understand all information contained within this entire proposal package. By responding to this RFP, the qualified professional agrees that they have read and understand these documents.

ABOUT THE CITY
The City of Richmond was chartered as a city in 1909, and is located 16 miles northeast of San Francisco, directly across the San Francisco Bay. Richmond’s population is 116,448. The City is a Charter City and operates a Council-administrator form of government consisting of six (6) council members and a mayor. There are six (6) districts in the City of Richmond with the Mayor elected at-large.

The City of Richmond provides a full range of municipal services including police and fire protection; construction and maintenance of highways, streets, and infrastructure; library services; storm water and municipal sewer systems; operation of a wastewater treatment facility; and the administration of recreational activities and cultural events.

The City also operates the Richmond Memorial Convention Center and the Port of Richmond.

To become better acquainted with the City, please visit the City’s website at http://www.ci.richmond.ca.us.

SCOPE OF SERVICES
On April 4, 2022, the City of Richmond was notified by the California State Auditor that they would be conducting an audit of the City as approved by the Joint Legislative Audit Committee on June 30, 2021. The Audit was initiated in May 2022 and was completed and published on November 10, 2022. City staff members provided the State Auditor’s Office with full access to financial data and systems per their request.

The State Auditor issued a total of 11 recommendations regarding various areas of concern. One of the recommendations is to provide a Workforce/Position Analysis.

The State Auditor described this as follows:

To mitigate the costs of increasing salaries. The City should perform a Workforce Analysis. Based on the results of the analysis, the City Council should consider eliminating vacant positions that it deems no longer necessary. Additionally, the City 1965
should assess its need for each vacant position before it seeks to fill the positions and eliminate any positions that is does not need.

The selected qualified professional will be responsible for working with City staff to develop a detailed plan that includes succession planning and recommendations not only for vacant positions, but for the proper position for succession planning to be effective for City in the coming years. Specific activities include:
x Reassess the Size of City Staff: Meet with Department Directors via the City Manager and Human Resources Director to assess staffing needs to determine if the department needs fewer allocated staff than their vacancies would suggest.
x Succession Planning and Vacancies: The City would like to take a measured approach to filling vacancies. By taking a measured approach to filling vacancies, this will allow the City time to determine whether any departments, including Police and Fire, should or could operate with a smaller staff. While taking a measured approach to filling vacancies there needs to be an analysis of potential retirements to determine proper succession planning.
x Department Analysis: Facilitate a variety of meetings between/among Department Directors to determine current workflow with the current staff in each division of each department to determine if the department is operating at optimum accuracy and efficiency. Produce a written document that summarizes this analysis with recommendations on improvements to workflow and staffing.

Responsive materials should be submitted no later than the close of business, 5:00 p.m. Friday, March 17, 2023.

RFP SCHEDULE
Date Activity
February 17, 2023 Release RFP
March 1, 2023 Final Day to Submit Questions (5:00 p.m.) March 17, 2023 RFP Due Date
April 2023/May 2023 Evaluation of proposals/Interviews of Respondents June 2023 Effective Date of Contract
1966

PROPOSAL FORMAT GUIDELINES
The proposal should be concise, well-organized, and demonstrate the proposer’s qualifications and experience applicable to the Project. The proposal shall be limited to no more than10 double-sided pages (8.5 inches x 11 inches), inclusive of graphics, forms, pictures, photographs, dividers, etc. but not of cost proposal, resumes, required forms, certifications, front and back covers, or letters of commitment from subconsultants. The required font size is 12 point, with minimum left and right margins of one-inch, and top and bottom margins of 0.7 inches.

Each proposal will adhere to the following order and content of sections. Proposal should be straightforward, concise, and provide “layman” explanations of technical terms that are used. Emphasis should be concentrated on conforming to the RFP instructions, responding to the RFP requirements, and providing a complete and clear description of the offer. Proposals, which appear unrealistic in the terms of technical commitments, lack of technical competence, or are indicative of failure to comprehend the complexity and risk of this contract, may be rejected. The following proposal sections are to be included in the Respondent’s response:

A. Respondent Cover Letter
A cover letter, not to exceed three (3) pages in length, should summarize key elements of the proposal and shall:
x Confirm that all elements of this RFP have been reviewed and understood;
x Include a statement of intent to perform the services as outlined; x Express company’s willingness to enter into an agreement under the terms and conditions prescribed by this RFP, insurance requirements (Attachment 1), Sanctuary City Compliance Statement (Attachment 2), and in the sample Standard Service Agreement (Attachment 3); x Submit a written description and brief history of the company’s experiences, qualifications, and successes in providing California services described herein. Please indicate the number of employees, client base and location of offices;
x Indicate the address and telephone number of the Respondent’s office located nearest to Richmond, California and the office from which the project will be managed;
x Confirm that Respondent has a minimum of three (3) years verifiable California experience;
x Stipulate that the proposal price will be valid for a period of at least 180 days;
x Identify a single person for contact during the RFP review process; and x Cover letter shall be signed by an authorized official of the company. 1967
B. Background and Project Summary Section
The Background and Project Summary Section should describe your understanding of the City, the work to be done, and the objectives to be accomplished. Refer to description of services for this RFP.

C. Methodology Section
Provide a detailed description of the approach and methodology to be used to accomplish the Scope of Services of this RFP. The Methodology Section should include:
1) An implementation plan that describes in detail (i) the methods, including controls by which your firm manages projects of the type sought by this RFP; (ii) methodology for soliciting and documenting views of internal and external stakeholders; (iii) and any other project management or implementation strategies or techniques that the respondent intends to employ in carrying out the work.
2) Detailed description of efforts your firm will undertake to achieve client satisfaction and to satisfy the requirements of the "Scope of Services" section.
3) Detailed project schedule, identifying all tasks and deliverables to be performed, durations for each task, and overall time of completion. 4) Detail how your firm conducts meetings with City Council and staff (all with different backgrounds) to get to twelve top priorities. 5) Detailed description of specific tasks you will require from City staff.

Explain what the respective roles of City staff and your staff would be to complete the tasks specified in the Scope of Services.

D. Staffing and Timeline
Describe the proposed Project team organization, including identification and responsibilities of key personnel. Include resumes of the Project team assigned to this project. Indicate role and responsibility of prime consultants and all subconsultants. If applicable, indicate how local firms are being utilized to ensure a strong understanding of state and local laws, ordinances, regulations, policies, requirements, and permitting.

Provide a proposed approach with projected timeline (including retreats and workshops) to conduct and complete the scope of work.

E. Firm Qualifications
The information requested in this section should describe the qualifications of the firm, key staff, and sub contractors performing projects within the past five (5) years that are similar in size and scope to demonstrate competence to perform 1968
these services. Information shall include:
1) Key staff that participated on named projects and their specific responsibilities with respect to this scope of service. 2) A summary of your firm’s demonstrated capability, including length of time that your firm has provided the services being requested in this Request for Proposal.
3) Provide at least three (3) references that received similar services from your firm in the past three (3) years. The City of Richmond reserves the right to contact any of the organizations or individuals listed.

Information provided shall include:
a) Client Name and contact info
x Telephone & e-mail address
x Address
b) Description of services provided including contract amount c) Project start and end dates
F. Cost Information
Provide the total direct and indirect costs to complete all tasks identified in the scope of services. Even if the method of payment to proposer will be a fixed fee, a detailed cost breakdown shall be provided identifying:
1) The number of staff hours and hourly rates for each professional and administrative staff person who will be available to the City; 2) All other direct costs, such as materials and reproduction costs; and 3) Sub-consultant services, if needed.

If project work exceeds one-year period, indicate if the proposed rates are fixed for this entire time frame or specifically include how the rates will be adjusted in subsequent years. These rates will also be used to negotiate costs for other projects (including optional tasks) that may be assigned. No additional funds will be paid above and beyond the original quote given by the selected Respondent.

G. Value Added Services
Please provide any additional services of benefit not specifically required herein, which the Respondent offers to provide.

H. Respondent Assignment of Sub-Contract
The resulting contract shall not be assigned, transferred, or sublet, in whole or in part, without the prior written approval of the City of Richmond. If Respondents intend to subcontract any portion of the resulting contract, they must describe their process for selecting such subcontractor(s) and the quality control measures that the Respondent will employ to ensure that any subcontractor complies with the provisions of Respondent’s contract with the City. 1969
I. Previous Contracts with the City of Richmond
The Respondent shall submit a list which indicates all prime contracts and/or amendments awarded to the proposer by the City of Richmond for the last three (3) years. The list shall include a short description of the Project, the Project scope of work, award date, completion date, name of the City of Richmond’s assigned Project Manager, and contract value.

J. Exceptions to this Request for Proposals
The Respondent shall state whether or not it takes exception(s) to this RFP, including but not limited to the City of Richmond’s Standard Services Agreement (Attachment 3). If the Respondent does take exception(s) to any portion of the RFP or contract, the specific portion to which exception(s) is taken must be identified by section number and explained. Requests for changes or additions to sections of City of Richmond’s Standard Services Agreement must be shown by requesting deletion of specific words and/or by providing new requested contract language. Requests for complete replacement of the City of Richmond’s Standard Services Agreement for another contract will not be granted. Failure to make exceptions to the RFP or Standard Services Agreement within the proposal will be deemed a waiver of any objection. Exceptions will be considered during the proposal evaluation process.

K. Statement of Impartiality and Disclosure
The nature of this Project requires an impartial unbiased approach on the part of the Respondent’s team. This proposal shall include a statement declaring that the Respondent’s and sub-consultants are not currently, and will not, during the performance of these services, participate in any other similar work involving a third-party with interests currently in conflict or likely to be in conflict with City of Richmond’s interests. Additionally, proposer is required to disclose any pending or active investigations or litigation that may affect the reputation or ability of the proposer to carry out the Project.

QUESTIONS CONCERNING REQUEST FOR PROPOSALS
All must be submitted via the electronic BidsOnline system on the Q&A tab by March 1, 2023 - 5:00 p.m. PST. If City finds it necessary to issue an addendum, prospective Respondents will receive notification of addendum.

Otherwise, answers to questions received will be provided the Q&A tab and notification will be It is the proposer’s responsibility to periodically check the BidsOnline website www.ci.richmond.ca.us/bids for any possible Addenda to the RFP that may have been posted.

Any party submitting a proposal shall not contact or lobby any City Council member, City official, employee (except those specified for contact) or agent regarding the RFP.

Any party attempting to influence or circumvent the RFP, bid submittal, and review process shall have their proposal rejected for violating this provision of the RFP. 1970
Interested parties may download copies of the abovementioned proposal by visiting the City's web site, www.ci.richmond.ca.us/bids. To download the RFP, new Respondents will be required to register. Once the Respondent downloads any documents relative to a solicitation, that Respondent's name will appear on the Prospective Bidders list for that project and will receive any addenda or notifications relating to the RFP.

PROCESS FOR SUBMITTING PROPOSALS
Electronic Proposals shall be submitted via the City’s secure online bidding system. All required sections of the proposal must be submitted via the website. Respondent is solely responsible for “on time” submission of their electronic proposal. The Bid Management System will not accept late proposals and no exceptions shall be made.

Respondents will receive an e-bid confirmation number with a time stamp from the Bid Management System indicating that their proposal was submitted successfully. The City will only receive those proposals that were transmitted successfully. The proposal must be received no later than 5:00 p.m. PST, on March 17, 2023. The proposal and any required certifications shall be signed by an individual or individuals authorized to execute legal documents on behalf of the Respondent.

GENERAL GUIDELINES
This RFP does not commit the City of Richmond to award a contract, to defray any costs incurred in the preparation of a proposal pursuant to this RFP, or to procure or contract for work. The City of Richmond may reject a proposal without providing the reason(s) underlying the declination. A failure to award a contract to the proposer with the lowest cost proposal shall not constitute a valid cause of action against the City of Richmond. The City shall not be responsible for work done, even in good faith, prior to final approval of the proposed contract. The City may investigate the qualifications of any respondent under consideration, require confirmation of information furnished by the respondent, and require additional evidence or qualifications to perform the Services described in this RFP.

The City reserves the right to:

1. Reject any or all proposals.

2. Issue subsequent Requests for Proposal.

3. Postpone opening for its own convenience.

4. Remedy technical errors in the Request for Proposal process.

5. Negotiate with any, all, or none of the Respondents.

6. Solicit best and final offers from all or some of the Respondents.

7. Select one or more Respondents.

8. Accept other than the lowest proposed fees.

9. Waive informalities and irregularities in proposals. 1971
Public Records
All proposals submitted in response to this RFP become the property of the City of Richmond and public records and, as such, may be subject to public review. Documents protected by law from public disclosure will not be disclosed by the City of Richmond if clearly marked with the word "confidential" on each applicable page. Trade secrets may be marked as confidential only to the extent they meet the requirements of California Government Code section 6254.7. Only information claimed to be a trade secret at the time of submittal to the City of Richmond and marked as "confidential" will be treated as a trade secret.

Insurance Requirements
The City of Richmond requires consultants doing business with it to obtain insurance, as shown in RFP Attachment 1. The required insurance certificates must comply with all requirements of the standards as shown and must be provided within fifteen (15) days of issuance of the Notice of Intent to Award and prior to the commencement of any work on the Project.

Business Licenses
The successful Respondent and all subcontractors used in the work will be required to hold or to obtain a City of Richmond business license for which the fee will not be waived.

Compliance with City Ordinances
The contractor and all subcontractors shall comply with the City of Richmond Nondiscrimination Clauses in City Contracts Ordinance (Richmond Municipal Code (RMC) Chapter 2.28), Business Opportunity Ordinance (RMC Chapter 2.50), Local Employment Program Ordinance (RMC Chapter 2.56), Living Wage Ordinance (RMC Chapter 2.60) and Ordinance Banning the Requirement to Provide Information of Prior Criminal Convictions on all Employment Applications (“Ban the Box”) (RMC Chapter

2.65), which are incorporated into the Contract Documents by this reference.

Sanctuary City Contracting Ordinance (SCCO)
The Richmond Sanctuary City Contracting Ordinance No. 12-18 prohibits the City from granting and or retaining contracts with any person or entity that provides Data Broker or Extreme Vetting services to the U.S. Immigration and Customs Enforcement Division of the United States Department of Homeland Security (“ICE”). Bidders/Proposers must submit the Sanctuary City Compliance Statement (Attachment 2) with their Bid or Proposal.
1972
Collusion
By submitting a proposal, each respondent represents and warrants that its proposal is genuine and not false or collusive or made in the interest of, or on behalf of any person not named therein; that the respondent has not directly or indirectly induced or solicited any other person to submit a false proposal, or any other person to refrain from submitting a proposal; and that the respondent has not, in any manner, sought collusion to secure any improper advantage over any other person submitting a proposal.

Withdrawal of Proposals
A respondent may withdraw their proposal before the expiration of the time for submission of proposals by delivering to the Finance Department a written request for withdrawal signed by, or on behalf of, the respondent.

Ownership of Documents
All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems, and any other materials produced for the Project shall be the sole and exclusive property of the City. No such materials or properties produced in whole or in part for the Project shall be subject to private use, copyrights, or patent rights by Respondent in the United States or in any other country without the express written consent of the City. The City shall have unrestricted authority to publish, disclose (except as may be limited by the provisions of the Public Records Act), distribute, and otherwise use, copyright or patent, in whole or in part, any such reports, studies, data, statistics, forms or other materials or properties produced for this project.

PROPOSAL EVALUATION AND SELECTION PROCESS
All proposals shall be reviewed to verify that the Respondent has met the minimum requirements. Proposals that have not complied with requirements, do not meet minimum content and quality standards, or take unacceptable exceptions to the General Terms and Conditions of the Service Agreement, will be eliminated from further consideration. Proposals will be reviewed and evaluated by an evaluation committee comprised of City of Richmond personnel.

The City also reserves the right to require modifications follow up with requests for additional information, including, but not limited to, follow up interviews. The City may request Best and Final offers based upon improved understanding of the offers or changed scope of service. The City will negotiate with that respondent to determine final pricing and contract form. Because this proposal is negotiable, all pricing data will remain confidential until after award is made, and there will be no public opening and reading of Proposals. Overall responsiveness to the RFP is an important factor in the evaluation process. The criteria upon which the evaluation of the proposals will be based include, but are not limited to, the following:
x Quality, clarity, and responsiveness of proposal. (15%) x Experience of key individual(s) assigned to the contract. (15%) 1973
x Experience of firm in performing this type of service. (15%) x References from clients for whom similar work was performed. (15%) x Project schedule and depth of staff available to perform services. (10%) x Ability to meet the needs of City. (10%)
x Understanding of services to be provided and ability to provide requested services. (10%)
x Cost. (10%)
Interview/presentations
Upon request of the City of Richmond, Respondents may be requested to give an oral presentation/demonstration on the proposal, which would include a detailed analysis of how each of the RFP requirements would be addressed should Offeror receive the award. An in-person presentation is preferred but City staff will work with the vendor to determine what is feasible. The demonstration shall be conducted at no cost to the City.

The purpose of the presentation is to verify the vendor’s capability, suitability, and adaptability to the performance requirements stipulated in this solicitation.

The City will schedule the interview date, time, and location with the successful finalists.

If the vendor fails to participate in the interview on the specified date stipulated, the City may elect to reject the proposal or to re-schedule at its discretion.

Respondents are not guaranteed an opportunity to have an interview. Respondents may be eliminated from consideration based solely on inability to meet minimal requirements and/or review of written proposals. The City shall be the sole judge of the acceptability of the proposal in conformance with the specifications and its decision shall be final.

If required these presentations will take place at the following location:

City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
If special accommodations are required in order to attend a site visit, contact at [email protected], no later than three (3) days before the event.

Pre-Award Negotiations
After the proposals are opened, but prior to award, the City may elect to conduct negotiations with the highest ranked respondents for purposes of:
x Resolving minor differences and information
x Clarifying necessary details and responsibilities
x Emphasizing important issues and points
x Receiving assurances from respondents
x Cost/budget clarifications
1974
Selection may be made without further discussion, negotiations, or Respondent’s presentations; therefore, Respondent shall offer the most favorable terms in response to this RFP. Respondent must demonstrate an understanding of the scope of service to be provided and the ability to accomplish the tasks set forth. Respondent shall include information that will enable the City to determine the Respondent’s overall qualifications.

The City reserves the right to request additional information or clarification on any matter included in the proposal response, to enable the City to arrive at a final award decision.

Award
When the Review Panel has completed its work, City staff will then recommend the award to the City Manager for approval. The award of a contract to the successful respondent will be at the discretion of the City Manager/City Council. The services provided by the successful bidder shall be governed by a Standard Services Agreement (Attachment 3).

Attachment 1: Insurance Certificate
Attachment 2: Sanctuary City Compliance Statement
Attachment 3: Standard Services Agreement
1975
City of Richmond
Workforce Analysis, bidding on 03/17/2023 5:00 PM (PDT)