March 19, 2024
Finance Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject:
Quarterly Garbage Liens
FINANCIAL IMPACT: The City will receive $597,784.66 when the balance of the liens is paid, of which $549,184.66 will be remitted to Republic Services, and $48,600.00 in administrative fees will be deposited to the General Fund.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
City staff is requesting City Council approval of liens and special assessments for unpaid garbage collection
service fees to be placed on the County property tax
records.
RECOMMENDED ACTION:
ADOPT a resolution authorizing placement of liens and
special assessments for unpaid garbage collection
service fees on Contra Costa County’s property tax
records – Finance Department (Andrea Miller/Mubeen
Qader 510-620-6740/Antonio Banuelos 510-620-6741).
AGENDA
REPORT
358
March 19, 2024
DISCUSSION:
Richmond Municipal Code Chapter 9.20 entitled “Solid Wastes” requires that property owners have garbage collection services and pay for those services. Richmond property owners are notified in writing of their obligation to have and pay for garbage collection services. Property owners who are five (5) months delinquent in their payments receive a final notification of their outstanding debt and a date for an administrative hearing. The administrative hearings are held quarterly and attended by staff from both Republic Services and the City of Richmond’s Finance Department. If the fees remain unpaid, a lien is placed on the property in the amount of the unpaid garbage collection fees plus associated City administrative fees.
City staff is requesting that the City Council adopt a resolution that authorizes liens and special assessments for unpaid garbage collection services fees to be placed on Contra Costa County’s property tax records. Garbage collection fees are remitted to Republic Services on a yearly basis, after collection of the property taxes. Administrative fees are retained by the City.
DOCUMENTS ATTACHED:
Attachment 1 – Letter from Republic Services
Attachment 2 – Garbage Lien Resolution
Attachment 3 – Garbage Preliminary Lien List
359
�R-n REPUBLIC.
�-\\ SERVICES
1067
Sustainability in Action
February 7, 2024
Ms. Andrea Miller, Director of Finance
City of Richmond
P. 0. Box 4046
Richmond, CA 94804
Via e-mail to: [email protected]
Att: Antonio Banuelos, Accounting Manager
Dear Antonio:
Subject: GARBAGE LIENS FROM February 7, 2024 -ADMINISTRATIVE HEARING Enclosed is the preliminary lien list that includes unpaid waste collection service charges that fell delinquent between April 2023-December 2023. As you will note, this list includes 1080 records, representing $549,184.66 in delinquent service charges and $48,600.00 in City Administrative Fees, for a total of $597,784.66 to be assigned to the City for lien and special assessment upon the property taxes of benefitting properties. All required notices have been provided to account holders and property owners.
Please let me know when this item is scheduled for City Council consideration. After Council approval, we will provide you with an updated list for recording. After recording, please provide us with a copy of the enabling resolution and coversheet bearing the document recording information.
The next Administrative Hearing to consider liens for delinquent waste collection service charges is scheduled for June 5, 2024, at 10:00 a.m., in the Richmond Room at City Hall.
If you have any questions, or need additional information, please let me know. I can be reached by telephone at (510) 262-7131, or e-mail at [email protected] a:;/---_'.\r--------
Angela Roof
Customer Service Manager
cc: City Clerk
3260 Blume Dr, Suite 115, Richmond, CA 94806 I RichmondSanitaryService.com I Organics, Recycling & Waste 360
Exhibit 2 - Garbage Lien Resolution
DocID #14206v1DocID #14206v1
Formatted: Font: 8 pt
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF RICHMOND, CALIFORNIA,
LEVYING SPECIAL ASSESSMENTS FOR UNPAID WASTE COLLECTION SERVICE
CHARGES ON CERTAIN LANDS SITUATED IN THE CITY OF RICHMOND,
COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA
WHEREAS, pursuant to Richmond Municipal Code (RMC) Chapter 9.20, Section
9.20.100(b) subscription to waste collection service for all premises is required in the City of Richmond; and
WHEREAS, the premises located in the City of Richmond, County of Contra Costa, State of California, and described in Exhibit A attached hereto and by this reference incorporated herein, were provided with waste collec tion service as required by RMC Chapter
9.20; and
WHEREAS, pursuant to the provisions of Section 9.20.110, and Article 4 of Chapter 6 of Part 3 of Division 5 of the California Health and Safety Code , commencing with section 547 0, the owners of said premises were notified in writing of their requirement to subscribe to waste collection services and make payments as required by said code sections; and WHEREAS, said owners of the premises failed to make payments for waste collection services as required; and
WHEREAS, as a result thereof, the City of Richmond has incurred charges for delinquent waste collection charges and administrative costs, which amounts remain unpaid; and WHEREAS, said delinquent waste collection service charges an d administrative costs are enumerated in Exhibit A.
NOW, THEREFORE, BE IT RESOLVED that pursuant to Section 9.20.110 of the Municipal Code of the City of Richmond, the City Council of the City of Richmond does hereby lien and levy a special assessment aga inst each premises, in the amounts as identified for each specific premise listed in the Exhibit A which is attached hereto and incorporated herein by this reference.
BE IT FURTHER RESOLVED that Exhibit A may be amended to delete any enumerated waste coll ection service charges and administrative costs paid before special assessments authorized hereby are forwarded to the County Record er of Contra Costa County, California.
BE IT FURTHER RESOLVED that the City Clerk is hereby directed to record this resolut ion, together with Exhibit A as may be amended, with the Office of the County Recorder of Contra Costa County, California.
BE IT FURTHER RESOLVED that the City Clerk is hereby directed to deliver a copy of this resolution to the Director of Finance of the City of Richmond, and that the Director of Finance is authorized to cause the above amounts to be collected in the manner provided by 361
Exhibit 2 - Garbage Lien Resolution
DocID #14206v1DocID #14206v1
Formatted: Font: 8 pt
law for collection of special assessments.
-------------------------
I certify that the foregoing resolution was passed and adopted by the Council of the City of Richmond, California at a regular meeting thereof held March 19,2024, by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
Clerk of the City of Richmond
(SEAL)
Approved:
Mayor
Approved as to form:
City Attorney
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March 19, 2024
Finance Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Subject:
Investment and Cash Balance Report and Monthly
Overtime Reports for the Month of January 2024
FINANCIAL IMPACT: There is no fiscal impact due to this agenda item.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
City staff is requesting that the City Council receive the City’s Investment and Cash Balance Report and Monthly
Overtime Reports for the month of January 2024.
RECOMMENDED ACTION:
RECEIVE the City’s Investment and Cash Balance
Report and Monthly Overtime Reports for the month of
January 2024 – Finance Department (Andrea Miller 510-
620-6740).
DISCUSSION:
It is the policy of the City of Richmond (City) to invest public funds in a manner which prioritizes safety and liquidity over yield, while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. In accordance with California Government Code Section 53 646 and the City’s Investment Policy, the Director of Finance shall report monthly on the City's pooled and AGENDA
REPORT
462
March 19, 2024
Bond funds to the City Manager and City Council and shall report quarterly on other investments.
The Investment and Cash Balance Report is a monthly report of the City’s pooled cash balance which include General Fund, Special Revenue, Debt Service, Capital Projects, Enterprise, Internal service, Trust & Agency, Redevelopment/Successor Agency, and any other Funds investment activities under the direction of the City.
The Portfolio Management Report represents the monthly bank balances, along with market balances of permitted investments according to the City’s Investment Policy.
Investment in the Local Agency Investment Fund (LAIF), CalTrust, money market, agency bonds, certificates of deposits, and corporate notes are all allowable by California Government Code Section 536 01 and permitted according to the City of Richmond’s Investment Policy updated October 17, 2023.
The City is allowed to prefund future Pension and OPEB costs in accordance with the City’s Pension and Other Post-Employment Benefits (OPEB) policies. These funds are invested according to the policies funding objectives and funding guidelines. Each Trust is comprised of a diversified portfolio of investments consistent with the Trust’s objectives and liquidity requirements. The City maintains a Section 115 Combination Trust for City- OPEB & Pension administered by Public Agency Retirement Services (PARS) and a California Employers’ Retiree Benefit Trust (CERBT) administered by California Public Employees’ Retirement System (CalPERS) for RPOA-OPEB.
DOCUMENTS ATTACHED:
Attachment 1 – Investment and Cash Balance Report for January 2024 Attachment 2 – Overtime Report for January 2024
Attachment 3 – Overtime Public Safety Report for January 2024 463
Finance Department – Treasury Division
M E M O R A N D U M
To: Mayor and Members of the City Council
From: Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Date: March 19, 2024
Subject: MONTHLY CASH BALANCES & INVESTMENT REPORT –
January 2024
Enclosed for your information are the Investment Report, Port folio Summary, a nd Comparative Cash Report for the month of January 2024 prepared by the City Treasurer pursuant to the statutory requirements of the State of California.
It is the policy of the City of Richmond (City) to invest public funds in a manner which prioritizes safety and liquidity over yield, while meeting the daily cash flow demands of the City and conforming to all state and local statutes governing the investment of public funds. In accordance with California Government Code Section 53646 and the City’s Investment Policy, the Director of Finance shall report monthly on the City's pooled and Bond funds to the City Manager and City Council and shall report quarterly on other investments.
The City is allowed to prefund future Pension and OPEB costs in accordance with the City’s Pension and Other Post -Employment Benefits (OPEB) policies. These funds are invested according to the polic ies funding objectives and funding guidelines. Each Trust is comprised of a diversified portfolio of investments consistent with the Trust’s objectives and liquidity requirements. The City maintains a Section 115 Combination Trust for City -OPEB & Pension administered by Public Agency Retirement Services (PARS) and a California Employers’ Retiree Benefit Trust (CERBT) administered by California Public Employees’ Retirement System (CalPERS) for RPOA-OPEB.
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6. Overtime Report ( All Funds ) ( January 2024)
PERIOD 7, JANUARY 2024
58% Threshold
ORIGINAL
BUDGET TRANSFERS REVISED
BUDGET
YTD
EXPENDED
AVAILABLE
BUDGET
PCT
GENERAL FUND (summary)
400031 OVERTIME/General 1,725,650 9,836 1,735,486 1,237,350 498,135 71% 400032 OVERTIME/Sworn 9,282,969 - 9,282,969 6,502,730 2,780,239 70% TOTAL GENERAL FUND 11,008,619 9,836 11,018,455 7,740,081 3,278,374 70% Overtime By Department
CITY CLERK
Administration 20,000 20,000 12,836 7,164 64% Two staff required for every council meeting - three staff required while the city clerk was out on leave 9-1-23 to 10-31-23
COMMUNITY DEVELOPMENT
General Plan Code Enforcement 20,000 20,000 3,007 16,993 15%
FINANCE -
Administration - - 16 (16) Short-staffed. A budget transfer will be completed.
General Accounting - - 1,321 (1,321) - Short-staffed. A budget transfer will be completed.
Payroll - - 51,294 (51,294) - Short-staffed. Budget will be added at mid-year.
Treasury/Cash Management - - - Accounts Payable 600 600 551 49 92% Short-staffed.
Revenue Collection 5,000 5,000 4,192 808 84% Short-staffed.
TOTAL FINANCE 5,600 - 5,600 57,374 (51,774) 1025%
HUMAN RESOURCES
Administration - - 386 (386) - A budget transfer will be done to cover the actual.
POLICE
Administration 490,227 490,227 271,455 218,772 55% CAD Dispatch System 680,625 680,625 450,839 229,786 66% New hire training RM System 4,000 4,000 782 3,218 20% Parking Enforcement 6,000 6,000 1,594 4,406 27% Sworn Administration 4,800,000 4,800,000 3,767,393 1,032,607 78% Short-staffed, and events have continued to pick-up post-pandemic.
TOTAL POLICE 5,980,852 - 5,980,852 4,492,063 1,488,789 75% FIRE
Administration 2,000 2,000 - 2,000 0% Suppression - - 64,282 (64,282) - 7 Personnel's OT is being charged to general OT object (400031) instead of sworn OT (400032). Contacted payroll to correct the account string.
6. Overtime Report ( All Funds ) ( January 2024)
58% Threshold
ORIGINAL
BUDGET TRANSFERS REVISED
BUDGET
YTD
EXPENDED
AVAILABLE
BUDGET
PCT
Sworn Suppression 4,453,872 4,453,872 2,707,835 1,746,037 61% Vacancies, injury leave, vacation and comp time off Sworn Prevention 29,097 29,097 11,399 17,698 39% Sworn Prv-Chvrn Insp - 535 Sworn Training - 15,569 (15,569) - 1 Battalion Chief's OT is being charged to Training instead of Suppression.
Contacted payroll to correct the account string.
TOTAL FIRE 4,486,969 - 4,486,969 2,799,620 1,687,884 62%
PUBLIC WORKS & ENGINEERING SVCS
Facility Maintenance Administration - - 118 (118) A budget transfer will be done to cover the actual.
Stationary Engineers 10,000 10,000 6,298 3,702 63% Stationary Engineers had after hours calls Building Services 3,000 3,000 2,757 243 92% Utility Sections 132,000 132,000 104,435 27,565 79% Weekend cleaning of the Aquatic centers, stripping and waxing of floors at community centers.
Electric 25,000 25,000 15,500 9,500 62% After hours emergency calls.
Parks & Landscape Admin 200,000 200,000 156,341 43,659 78% Tree work and extensive weed abatement in various locations that are open spaces and busy roadways.
Streets Administration 36,000 (30,000) 6,000 49 5,951 1% Street Sweeping 1,100 - 1,100 189 911 17% Pavement Maintenance 41,447 10,000 51,447 15,905 35,542 31% Traffic Signs & Lines 4,885 20,000 24,885 10,270 14,615 41% Equipment Services 8,000 - 8,000 16,590 (8,590) 207% To catch up on outstanding work, clerical and maintenance.
Abatement Services 27,000 - 27,000 22,183 4,817 82% Abatement staff had Dumpster Day work on the 15th, 22nd and 29th TOTAL PUBLIC WORKS 488,432 - 488,432 350,635 137,797 72%
LIBRARY
Library Administration - 6,000 6,000 5,180 820 86% Admin support fo Deputy City Manager, Library Commission, and staffing shortages.
COMMUNITY SERVICES
Recreation Services/Cities of Service - - 23 (23) - Tool Lending Library OT Recreation Administration - 500 500 1,351 (851) - Administrative staff were tabling at several weekend and evening events in July.
Booker T Center 250 - 250 124 126 50% Nevin Center 1,000 864 1,864 1,864 - 100% Short-staffed during summer camp Shields Reid 37 - 37 161 (123) 429% Short staffed during summer camp Recreation Complex 1,000 - 1,000 969 31 97% Short-staffed.
Parchester Center 200 250 450 733 (283) 163% Short-staffed.
May Valley Center - - - 1,616 (1,616) - Short-staffed.
Recreation DPRC 500 250 750 369 381 49% Senior Center 300 - 300 - 300 0% Senior Center Annex 250 - 250 155 95 62% Staff participated in fireworks events.
Aquatics 2,028 972 3,000 4,564 (1,564) 152% Short-staffed.
Convention Center - - - 3,384 (3,384) 100% Increased rentals required staff overtime
6. Overtime Report ( All Funds ) ( January 2024)
58% Threshold
ORIGINAL
BUDGET TRANSFERS REVISED
BUDGET
YTD
EXPENDED
AVAILABLE
BUDGET
PCT
Plunge 2,200 1,000 3,200 3,668 (468) 115% Short-staffed.
TOTAL COMMUNITY SERVICES 7,766 3,836 11,602 18,981 (7,379) 164%
ECONOMIC DEVELOPMENT PROGRAM
Administration 1,000 1,000 - 1,000 0% TOTAL GENERAL FUND 11,010,619 9,836 11,020,454 7,740,081 3,280,908 70%
NON-GENERAL FUND
Overtime By Fund
1012 HILLTOP LANDSCAPE MAINT DIST 20,000 - 20,000 20,513 (513) 103% The Hilltop crew completed weed abatement around the lake and High Fire Zones
1015 MARINA BAY LNDSCP & LIGHT DIST 25,300 - 25,300 17,436 7,864 69% The Marina crew overtime was for the July 3rd and tree trimming/weed abatement
1018 RENT CONTROL 2,500 - 2,500 285 2,215 11% 1050 CR-PLANNING & BUILDING 9,500 - 9,500 - 9,500 0% 1055 ENCROACHMENT SVCS 8,000 - 8,000 11,698 (3,698) 146% To inspect services completed by PG&E and it corresponds with a permit and the funds should go back to that line
4003 WASTEWATER ADMINISTRATION - 8,595 (8,595) 4003 WASTEWATER PRE-TREATMENT 7,500 - 7,500 4,539 2,961 61% Admin staff worked overtime providing support to Department assisting with reconciling invoices, contracts, etc. in preparation of year-end close 4404 RHA-NEVIN PLAZA - - - 2,156 (2,156) - On-call services from tenants after hours and weekends. 4405 RHA-NYSTROM VILLAGE - - - 3,127 (3,127) - On-call services from tenants after hours and weekends. 5001 INSURANCE RESERVES - - - 285 (285) - TOTAL NON-GENERAL FUNDS 72,800 - 72,800 68,634 4,166 94%
6.b. Overtime Report ( Public Safety) (January 2024)
City of Richmond
Public Safety Sworn Overtime
Fund: 0001 - General Fund
Period 1 2 3 4 5 6 7 8 9 10 11 12 Average
Month July August September October November December January February March April May June YTD YTD Remaining Monthly Target % 8% 17% 25% 33% 42% 50% 58% 67% 75% 83% 92% 100% Total $ Total % Budget Expense
ORIGINAL
BUDGET
REVISED
BUDGET
FY2016-17 Overtime - Sworn 3,169,000 3,169,000 313,703 373,243 423,224 469,661 339,483 327,177 348,075 361,458 349,723 365,735 425,407 563,317 4,660,206 147.1% (1,491,206) 388,350.51 FY2017-18 Overtime - Sworn 3,169,000 3,169,000 569,194 440,670 445,282 459,402 452,278 396,762 322,524 497,979 455,202 554,449 509,368 466,567 5,569,677 175.8% (2,400,677) 464,139.77 FY2018-19 Overtime - Sworn 3,433,019 3,433,019 482,143 537,369 655,866 437,794 524,577 430,398 367,322 512,595 422,587 497,767 536,209 505,966 5,910,593 172.2% (2,477,574) 492,549.39 FY2019-20 Overtime - Sworn 5,000,000 4,800,000 473,963 469,392 491,205 509,931 449,751 473,935 390,897 498,501 501,383 479,696 560,031 439,159 5,737,844 119.5% (937,844) 478,153.64 FY2020-21 Overtime - Sworn 5,000,000 3,533,043 275,202 246,822 296,775 382,618 306,787 278,293 205,529 303,631 307,092 357,284 323,537 368,366 3,651,936 103.4% (118,893) 304,328.00 FY2021-22 Overtime - Sworn 5,165,434 5,165,434 358,067 389,828 472,454 417,698 322,193 301,011 240,070 323,173 309,207 327,424 301,721 360,540 4,123,386 79.8% 1,042,048 343,615.51 POLICEFY2022-23 Overtime - Sworn 5,165,435 4,800,000 365,627 345,212 390,077 354,865 370,205 401,964 394,652 472,091 442,662 397,356 436,869 382,792 4,754,372 99.0% 45,628 396,197.67 FY2023-24 Overtime - Sworn 4,800,000 4,800,000 487,105 925,716 477,693 462,417 470,347 531,204 412,911 3,767,393 78.5% 1,032,607 753,478.62 FY2016-17 Overtime - Sworn 2,486,914 2,486,914 268,353 267,582 178,894 164,200 149,136 147,981 227,796 267,960 182,993 246,898 233,383 316,924 2,652,102 106.6% (165,188) 221,008.47 FY2017-18 Overtime - Sworn 2,486,914 2,486,914 268,465 345,174 291,221 359,542 367,182 310,508 336,315 176,449 132,298 196,306 203,912 166,108 3,153,480 126.8% (666,566) 262,789.99 FY2018-19 Overtime - Sworn 2,509,914 2,509,914 257,785 245,946 179,272 171,370 219,937 204,997 261,780 216,596 196,343 310,702 220,368 275,966 2,761,062 110.0% (251,148) 230,088.48 FY2019-20 Overtime - Sworn 4,305,402 2,509,914 295,166 277,886 286,016 300,083 332,654 382,084 347,492 328,467 350,709 302,505 264,571 325,335 3,792,969 151.1% (1,283,055) 316,080.74 FY2020-21 Overtime - Sworn 4,305,402 3,193,165 398,678 380,282 417,982 393,922 267,819 345,928 341,403 305,081 172,961 261,923 263,518 286,039 3,835,537 120.1% (642,372) 319,628.08 FY2021-22 Overtime - Sworn 3,629,097 4,334,499 334,236 434,974 358,578 358,251 352,789 327,832 427,404 396,618 297,215 351,463 715,688 429,890 4,784,938 110.4% (450,439) 398,744.82 FIREFY2022-23 Overtime - Sworn 4,334,499 4,334,499 444,959 444,457 414,638 401,115 402,116 379,882 443,531 475,560 339,814 398,079 369,477 435,057 4,948,685 114.2% (614,186) 412,390.41 FY2023-24 Overtime - Sworn 4,482,969 4,482,969 524,969 473,094 348,296 346,854 363,759 315,266 363,100 2,735,337 61.0% 1,747,632 547,067.37 FY2023-24 TOTAL 9,282,969 9,282,969 1,012,073 1,398,810 825,989 809,271 834,106 846,470 776,011 - - - - - 6,502,730 70.1% 2,780,239 3,251,364.99
BUDGET ACTUALS TOTAL
476
March 19, 2024
Finance Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Subject:
American Rescue Plan Act (ARPA) Allocation Amendment
FINANCIAL IMPACT: There is no net impact to replace the project allocated to ARPA funds. Accounts 13623331-400708-AR240 and
40322931-400708-01U10
PREVIOUS COUNCIL
ACTION:
November 23, 2021
STATEMENT OF THE
ISSUE:
North Richmond Pump Station expenditures in the
amount of $731,847.85 incurred prior to March 3, 2021,
the allowed period of performance by the Department of
Treasury, were inadvertently allocated to ARPA funds.
Staff recommends transferring these expenditures from
ARPA funds to Wastewater and transferring Ferry Point
Dornan Pump Station expenses of the same amount
from Wastewater to ARPA funds.
RECOMMENDED ACTION:
APPROVE a transfer of expenses in the amount of
$731,847.85 between American Rescue Plan Act (ARPA)
funds and Wastewater funds to correct an inadvertent
allocation of ARPA funds for the North Richmond Pump
Station emergency repair project made prior to the
allowable ARPA project reimbursement date of March 3,
2021 – Finance (Andrea Miller 510-620-6790/Mubeen
Qader 510-412-2077).
AGENDA
REPORT
477
March 19, 2024
DISCUSSION:
The Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, a part of the American Rescue Plan Act (ARPA), provided $350 billion to state, local, and tribal governments across the country to support their response to and recovery from the COVID-19 public health emergency. The City of Richmond received approximately $27.7 million in ARPA funds. At its November 23, 2021 meeting, the City Council approved Resolution 136-21 allocating $1.8 million from the City’s ARPA funding for repair of the North Richmond Pump Station (Attachment 1).
Section 35.5 of the Final Rule of the SLFRF issued by Department of the Treasury states the following regarding use of funds (https://www.govinfo.gov/content/pkg/FR- 2022-01-27/pdf/2022-00292.pdf),
"§ 35.5 Use of funds. (a) In general. A recipient may only use funds to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024, for one or more of the purposes enumerated in sections 602(c)(1) and 603(c)(1) of the Social Security Act, as applicable, including those enumerated in § 35.6, subject to the restrictions set forth in sections 602(c)(2) and 603(c)(2) of the Social Security Act, as applicable.”
During the Single Audit process, the City’s auditors, Badawi and Associates, discovered that expenditures in the amount of $731,847.85 were incurred prior to March 3, 2021, for North Richmond Pump Station repairs and allocated to ARPA funding. To correct this issue, City staff, in consultation with Badawi and Associates, recommend City Council approve the transfer of prior year expenditures between ARPA and Wastewater Funds as follows:
Project Name From Account To Account Amount
North Richmond
Pump Station
13623331-400708-AR240 40322931-400708-AR240 $731,847.85 Ferry Point Dornan
Pump Station
40322931-400708-01U10 13623331-400708-01U10 $731,847.85
There is no net financial impact in transferring the expenditures for the two projects between the funding sources identified above.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution 136-21
478
479
480
481
March 19, 2024
Fire Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Michael E. Smith, Interim Fire Chief
Aaron Osorio, Deputy Fire Chief
Subject:
Approve a Standing Purchase Order with Municipal
Emergency Services (MES) to Purchase Firefighting
Equipment and Personal Protective Equipment
FINANCIAL IMPACT: Expenditures would be spread out over two budget cycles and will come from multiple account strings
(01204022-400382; 01204022-400384). Funding for
Fiscal Year 2023-24 is included in the Fire Department
budget.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
The Fire Department is seeking approval to establish a
standing purchase order with MES to provide firefighting equipment and personal protective equipment.
RECOMMENDED ACTION:
APPROVE two standing purchase orders with Municipal
Emergency Services (MES) in a total amount not to
exceed $400,000 using: (a) RFP 1910/Contract #
PS20040 Master Price Agreement publicly solicited by
National Purchasing Partners, Government Division, to
purchase firefighting equipment in an amount not to
exceed $200,000, for a two-year term ending March 23,
2026, with a two-year extension option not to exceed an additional $200,000 for the extended term; and (b) using AGENDA
REPORT
482
March 19, 2024
RFP 1915/Contract # PS20070 Master Price Agreement
to purchase firefighter personal protective equipment in an amount not to exceed $200,000, for a two-year term
ending March 23, 2026, with a two-year extension option not to exceed an additional $200,000 for the extended
term – Fire Department (Interim Fire Chief Michael E.
Smith 510-307-8041/Aaron Osorio 510-307-8021).
DISCUSSION:
Staff is recommending approval of a standing purchase order with Municipal Emergency Services (MES) based on the Master Price Agreement between the vendor and League of Oregon Cities (“LOC”), entered into in March 2020 and valid through 2026. LOC issued a competitive solicitation for fire, rescue, safety, and emergency products and services, as the lead public agency through National Purchasing Partners (“NPP”), Government Division, a national cooperative procurement organization. This purchase is in compliance with the Richmond Municipal Code Section 2.52.328, Cooperative Procurement, which allows for the City of Richmond to use cooperative solicitations if it is in the best interest of the City.
The City of Richmond’s utilization of the Master Price Agreement through NPP eliminates the cost associated with obtaining multiple solicitations throughout the year and reduces the lead-time in obtaining crucial equipment. Similarly, it is time consuming and costly to issue a competitive solicitation for firefighting equipment and personal protective equipment each time a purchase needs to be made. The current Master Price Agreement remains active and is valid for the City’s utilization. If MES extends the Master Price Agreement past 2026, the Fire Department wants the ability to exercise the option years.
The amount of the purchase order is estimated from data on the life cycle for replacement of existing equipment and projected needs for equipping new firefighters.
DOCUMENTS ATTACHED:
Attachment 1 – MES (Firefighter Equipment) Piggyback Justification Form Attachment 2 – MES (Personal Protective Equipment) Piggyback Justification Form 483
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March 19, 2024
Human Resources
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager
Sharrone Taylor, Human Resource Director
Subject:
Amend Staffing (Position Control) and Appropriate Funds as Required
FINANCIAL IMPACT: The fiscal impact for the Finance Department is $11,416, and the fiscal impact for the Community Development -
Planning Department is $53,891 and the fiscal impact for the Human Resources Department is savings in the
amount of $10,498. All projections are approximations for three months, and the final fiscal impact will be
determined once the vacancies are filled
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
The City Council’s authorization is required to amend
staffing (position control) and appropriate funds.
RECOMMENDED ACTION:
ADOPT a resolution amending position control to add a
Finance Manager II to the Finance Department, a Senior
Planner for the Community Development Department,
and an Office Assistant for the Human Resources
Department; and APPROPRIATE associated salaries,
wages, and benefits as required – Human Resources
Department (Nickie Mastay/ Sharrone Taylor 510-620-
6602).
AGENDA
REPORT
718
March 19, 2024
DISCUSSION:
FINANCE DEPARTMENT
The Finance Department requests the reallocation of one (1) Senior Accountant to one (1) Finance Manager II to position control.
Finance Manager
Adding a Finance Manager II to the Finance Department is crucial for optimizing organizational efficiency and financial health. This position, which will be in the Finance Department, but will oversee finances for the Port, Housing Authority, and Public Works Department, will ensure streamlined and cohesive processes and alignment with the City's short- and long-term goals and priorities for these departments. The duties of this position include oversight of critical functions such as strategic planning, budgeting, forecasting, contract and invoice processing/payment, and fiscal reporting. In addition, the Finance Manager II position will create a promotional opportunity, allowing for growth within the department.
HUMAN RESOURCES DEPARTMENT
The Human Resources Department requests the reallocation of one (1) Human Resources Technician to one (1) Office Assistant to position control.
Office Assistant
The Human Resources Department will benefit significantly from the addition of an Office Assistant position. This new role will be responsible for assisting with day-to-day front office operations, clerical duties, and organizing important paperwork. By taking care of these administrative tasks, our Human Resources professionals will have more time to focus on recruitment, training, and improving workplace culture. Furthermore, this position will provide a promotional opportunity to a previous Richmond Promise Scholar working in our Human Resources department for over a year.
COMMUNITY DEVELOPMENT – PLANNING DEPARTMENT
The Community Development Department requests the addition of one (1) Senior Planner.
Senior Planner
The Planning Department within the Community Development Department has requested the addition of a Senior Planner. This position is intended to manage high- 719
March 19, 2024
priority and complex planning projects, improve project outcomes, generate revenue, increase efficiency, and enhance the effectiveness of the Planning unit. It should be noted that this position will be funded 100% by cost recovery and will not have an impact on the General Fund.
FISCAL IMPACT:
There is a fiscal impact for reallocating the Senior Accountant to Finance Manager II.
There are net savings from reallocating the Human Resources Technician to an office assistant. There is no fiscal impact on the General Fund for the addition of the Senior Planner as it will be funded through cost recovery.
The City Council must approve the budget appropriation for the difference between positions. Below is a table that illustrates the fiscal impact based on three months of salary to allow time for recruitment and onboarding. Below is an estimate, and the actual salary and benefits costs will be determined once the positions are filled.
Job Title Salary (Step 3) and Benefits (@80%)
3 Months – April - June
Finance Manager II $11,416
Office Assistant ($10,498)
Senior Planner $53,891
SUMMARY:
City staff recommend approval of the resolution amending position control, which will modify position control in the following manner:
Position Control
Classification Department Unit
Delete 1 Senior Accountant Finance IFPTE Local 21 – Mid Management
Add 1 Finance Manager II Finance IFPTE Local 21 – Mid-
Management
Delete 1 Human Resources
Technician Human Resources SEIU Local 1021 – General
Employees
Add 1 Office Assistant Human Resources SEIU Local 1021 – General Employees
Add 1 Senior Planner Community Development –
Planning
IFPTE Local 21 – Mid-
Management
In addition, City staff are requesting an appropriation of the required wages, salaries, and benefits, as required.
DOCUMENTS ATTACHED:
Attachment 1 – Resolution Amending Position Control
720
RESOLUTION NO. _____
RESOLUTION OF THE COUNCIL OF THE CITY OF RICHMOND, CALIFORNIA AMENDING THE CITY’S POSITION CONTROL LIST
WHEREAS, pursuant to Article IV Section 1(b)(1) of the City Charter, the City Manager has the responsibility to manage all affairs of the City's operations, and appoint employees when necessary for the good service of the City; and
WHEREAS, pursuant to City Resolution No. 148-20, the City Manager has the authority to make appropriate administrative changes to the City’s position control list; and
WHEREAS, the City Manager has determined that certain amendments to the position control list are necessary to meet the operational needs of the City.
NOW, THEREFORE, BE IT RESOLVED, that the Richmond City Council authorizes the City Manager to modify the position control in order to meet the operational needs of the City; and
BE IT FURTHER RESOLVED, that, effective March 19, 2024, the City’s position control is hereby revised to add the following positions:
Classification Department Bargaining Group
Finance Manager II Finance Department IFPTE Local 21- Mid-Management Senior Planner Community Development – Planning IFPTE Local 21 Mid-Management Office Assistant Human Resources Department SEIU Local 1021 – General Employees
BE IT FURTHER RESOLVED, that, effective March 19, 2024, the City’s position control is hereby revised to delete the following positions:
Classification Department Bargaining Group
Senior Accountant Finance Department IFPTE Local 21– Mid-Management Human Resources Technician I/II Human Resources Department SEIU Local 1021 – General Employees
-----------
I hereby certify that the foregoing Resolution was passed and adopted by the Council of the City of Richmond at a regular meeting thereof held by the following vote:
AYES:
721
NOES:
ABSTENTIONS:
ABSENT:
_____________________________
CLERK OF THE CITY OF RICHMOND
(SEAL)
Approved:
____________________
Mayor
Approved as to form:
____________________
City Attorney
722
March 19, 2024
Library and Community Services
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
LaShonda White, Deputy City Manager – Community
Services
Kate Eppler, Deputy Director of Community Services –
Library
Abigail Sims-Evelyn, Literacy Program Manager
Subject:
Accept and Appropriate $139,204 in Grant Funds from
the California State Library to Provide English as a
Second Language Services
FINANCIAL IMPACT: Project expenditures will be funded by the California State Library grant funds. There will be no net additional expense to the General Fund.
PREVIOUS COUNCIL
ACTION:
Not applicable.
STATEMENT OF THE
ISSUE:
The Richmond Public Library has been awarded
$139,204 from the California State Library to support
English as a Second Language program services offered
at the library’s literacy program, Literacy for Every Adult Program (LEAP), for Fiscal Year (FY) 2024-2025 and FY
2025-2026.
RECOMMENDED ACTION:
ADOPT a resolution to ACCEPT and APPROPRIATE the
California State Library grant award of $139,204 for
English as a Second Language educational services; and
AUTHORIZE the city manager or their designee to
execute the grant agreement – Community Services
Department (Kate Eppler 510-620-5452/Abigail Sims-
Evelyn 510-307-8082).
AGENDA
REPORT
723
March 19, 2024
DISCUSSION:
Richmond’s Literacy for Every Adult Program (LEAP) provides English as a Second Language (ESL) services to the community, including group classes and individual tutoring. These services are funded by a grant from the California State Library’s California Library Literacy Services program.
In Fiscal Year (FY) 2023-2024, LEAP’s literacy services helped 31 learners increase their ability to speak, read, and understand English. Learners’ current skills are assessed when they enroll; learners then participate in small group classes, including sessions on evenings and weekends. LEAP’s ESL services have been supported by California State Library grant funding since FY 2021-2022.
The current grant award of $139,204 contains funding to support the ESL program during FY 2024-2025 and FY 2025-2026. The State Library is releasing both years of funding in FY 2024-2025. Of the grant award, $69,602 must be spent in FY 2024-2025 and $69,602 must be spent during FY 2025-2026.
DOCUMENTS ATTACHED:
Attachment 1 –California Library Literacy Services Award Packet Attachment 2 – Resolution
724
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764
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RICHMOND TO
ACCEPT AND APPROPRIATE A GRANT FROM THE CALIFORNIA STATE LIBRARY IN THE AMOUNT OF $139,204.
WHEREAS, the Richmond Public Library offers a Literacy for Every Adult Program (LEAP) to provide English as a Second Language (ESL) services to the community, including group classes and individual tutoring; and
WHEREAS, the Richmond Public Library has applied for and has the opportunity to receive grant award funding from the California State Library’s California Library Literacy Services program in support of its community ESL services; and
WHEREAS, the California Library Literacy Services Program has awarded to the Richmond Public Library total grant funding in the amount of $139,204 (Grant Monies) to further enable adult literacy education and literacy activities for ESL participants in LEAP; and
WHEREAS, this grant funding will continue ESL services at the Richmond Public Library’s adult literacy service, LEAP; and
NOW, THEREFORE, BE IT RESOLVED, that the Council of the City of Richmond accepts and appropriates $139,204 in Grant Monies to support ESL services, and, authorizes the City Manager or their designee to execute grant agreements and any other grant-related documents in this regard.
*****************************
I certify that the foregoing resolution was passed and adopted by the City Council of the City of Richmond at a _________ meeting held on _____________ by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
765
________________________________________
Clerk of the City of Richmond
(SEAL)
Approved:
_______________________________
Mayor
Approved as to form:
____________________________
City Attorney
766
March 19, 2024
Library and Community Services
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
LaShonda White, Deputy City Manager – Community
Services
Subject:
Land Use Agreement for Weekly Farmer’s Market on Civic
Center Plaza
FINANCIAL IMPACT: The City does not receive any revenue from the utilization of its property by the Richmond Certified
Farmers’ Market Association (RCFMA). Furthermore, the
City is not obligated to compensate the RCFMA for any
services provided under the Land Use Agreement.
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
City staff would like approval to execute a temporary
Land Use Agreement with the Richmond Certified
Farmers’ Market Association exclusively for the operation of a weekly farmers market on Fridays. This agreement
aims to permit the utilization of Civic Center Plaza
between Macdonald Avenue and Nevin Avenue in front
of the Richmond Main Library.
RECOMMENDED ACTION:
APPROVE a temporary Land Use Agreement between
the City of Richmond and the Richmond Certified
Farmers’ Market Association for the free use of Civic
Center Plaza between Macdonald Avenue and Nevin
Avenue in front of the Richmond Main Library to host a
weekly farmers’ market on Fridays, effective April 5,
2024, and ending March 31, 2026, or earlier if the market must move due to the Richmond Main Library renovation
project – Community Services Department (LaShonda
White 510-620-6828).
AGENDA
REPORT
767
March 19, 2024
DISCUSSION:
Since 1983, Richmond Certified Farmers’ Market Association (RCFMA) has successfully operated a Certified Farmers Market (hereinafter the “Market”) in Richmond, CA around Civic Center wherein farmers from around the Bay Area are provided an opportunity to sell their freshly grown produce and to sell various other related foodstuffs and crafts.
The original home of the Market was in front of the Richmond Main Library; however, in 2007, the City requested that the RFCMA move the Market to the northern section of a City-owned parking lot located on Barrett Avenue between 24th Street and 25th Street due to construction of Civic Center. The City then entered into a Land Use Agreement (Agreement) with the RCFMA to provide them with access to the parking lot on Barrett Avenue for the sole purpose of continuing to operate a Market every Friday between January and December.
Upon approval, the City and RCFMA will enter into a Land Use Agreement, effective from April 5, 2024, to March 31, 2026, or when the Market must move due to the planned Richmond Main Library renovation project. When the Library renovation project begins, the Market will be required to temporarily relocate to another location, more than likely back to the City-owned parking lot on Barrett Avenue between 24th Street and 25th Street.
The Agreement outlines the terms for the RCFMA's use of the property at no cost, and it clarifies that the City will not compensate the RCFMA for any services rendered. The RCFMA is obligated to adhere to all rules and regulations stipulated in the Agreement, utilizing the leased property in compliance with existing and amended laws. Importantly, the City is not obligated to provide a future site or renew the Agreement upon its expiration. The Agreement outlines specific details such as hours of operation, minimum and maximum vendor numbers, operations and marketing plans, vendor performance criteria, site clean-up procedures, and City approval processes for non-certified vendors and signage.
Farmers’ markets play a crucial role in communities, offering various benefits that contribute to the health and well-being of both individuals and the community as a whole. Hosting a farmers’ market is a multifaceted strategy that positively impacts the economic, social, environmental, and health aspects of a community. As communities seek to build resilience and promote sustainability, the establishment and support of farmers’ markets emerge as valuable endeavors with far-reaching benefits for all stakeholders involved.
DOCUMENTS ATTACHED:
Attachment 1 – Land Use Agreement by and between the City of Richmond and the Richmond Certified Farmers’ Market Association
768
LAND USE AGREEMENT
BETWEEN
THE CITY OF RICHMOND AND
THE RICHMOND CERTIFIED FARMERS MARKET ASSOCIATION
THIS LAND USE AGREEMENT (the “Agreement”) is made and entered into this ___ day of _____________, 2024, by and between the CITY OF RICHMOND, a municipal corporation and charter city (“Landlord”), and the Richmond Certified Farmers Market Association, a California nonprofit corporation (“Tenant”). Landlord and Tenant are sometimes referred to individually as “Party” and collectively as “Parties.” This Agreement shall be effective immediately and shall replace and supersede any and all previous agreements or amendments thereto made between the parties.
Tenant’s address: P.O. Box 20995, El Sobrante, CA 94804______________________________ Contact person: Tom Cloman, President of the Richmond Certified Farmers Market Association Telephone: _(510) 268-8010 __ Email: [email protected]_________ ___________
RECITALS
WHEREAS, Tenant has operated a Certified Farmers Market (hereinafter the “Market”) in Richmond, CA around Civic Center since 1983 wherein farmers from around the Bay Area are provided an opportunity to sell their freshly grown produce and to sell various other related foodstuffs and crafts; and
WHEREAS, Farmers markets play a crucial role in communities, offering various benefits that contribute to the health and well-being of both individuals and the community as a whole; and
WHEREAS, Landlord relocated Tenant in November 2007 to the northern section of the parking lot located on Barrett Avenue between 24th Street and 25th Street in Richmond, California, which is owned and maintained by Landlord; and,
WHEREAS, prior to 2007, the Market was located on Civic Center Plaza between Macdonald Avenue and Nevin Avenue in front of the Richmond Main Library; and
WHEREAS, the Parties would like to temporarily relocate the Market back in front of the Richmond Main Library until the Library renovation project begins as it is believed that the Market was more successful and had more visibility in the original location; and
WHEREAS, when the Library renovation project begins, the Market will need to temporarily relocate to another location, more than likely back to the city-owned parking lot on Barrett Avenue between 24th Street and 25th Street; and
WHEREAS, the parties wish to enter into a new Agreement for the temporary, non-exclusive use of Landlord’s property by Tenant during the hours of operation from 7:00 a.m. to 6:00 p.m., every Friday between January and December; and
769
WHEREAS, the Parties desire to enter into a Land Use Agreement (hereinafter the “Agreement”) that shall commence on April ___, 2024 (“Commencement Date”), and expire on March 31, 2026, or earlier if the Market must move due to the planned Richmond Main Library renovation project, pursuant to Tenant’s ability to use and occupy Landlord’s property subject to the terms and conditions of this Agreement; and
WHEREAS, the parties wish to enter into an Agreement to describe the responsibilities of the parties for the temporary, non-exclusive use of Landlord’s property by Tenant.
NOW, THEREFORE, in consideration of this Agreement and the mutual promises, covenants, and stipulations herein contained, the parties agree as follows:
Section 1. Incorporation of Recitals
The above recitals, including the paragraph preceding the recitals, are hereby incorporated into this Agreement as if set forth herein in full.
Section 2. Description of Tenant Rules and Regulations
The rules and regulations agreed upon to be provided by Tenant are set forth in Exhibit “A”
Section 3. Location
The location of the Market is set forth in Exhibit “B.” However, if required and requested by Landlord, Tenant may be required upon five (5) days’ notice in advance to temporarily relocate the Market to an area in close proximity to the location set forth in Exhibit “B”. Any such temporary relocation shall be at Landlord’s sole and absolute discretion.
Section 4. Vendor Categories
The categories of acceptable certified and non-certified vendors are set forth in Exhibit “C.”
Section 5. Insurance
Insurance requirements are set forth in Exhibit “D.”
Section 6. Term of Agreement
The Agreement shall commence upon the Commencement Date and terminate on March 31, 2026 (“Termination Date”). This Agreement shall expire on the termination date unless sooner terminated in accordance with Sections 12 and 13. The Agreement may be extended by mutual written consent of the Parties, which shall not be unreasonably withheld. The City Manager has the authority to extend this agreement up to two times for a one-year period each time the Agreement is extended.
Section 7. Operations Plan
Tenant shall adhere to and update, as necessary, the Operations Plan as set forth in Exhibit “E.”
Section 8. Compensation
Landlord is allowing temporary access to its property for the specified purpose, term, and hours of operation to Tenant as described herein at no cost to Tenant. Landlord shall not pay Tenant for any services rendered under this Agreement.
770
Section 9. Inspection
If the services set forth in Exhibit "A" are performed by Tenant on Landlord’s property, Landlord shall have the right to inspect such work without notice.
Section 10. Services
The services set forth in Exhibit "A" shall be performed to the full satisfaction and approval of Landlord. Tenant shall, at its own cost and expense, furnish all facilities and equipment necessary for Tenant to operate the Market.
Section 11. General Use
Landlord’s property shall be used for activities consistent with Tenant’s operation of a Market.
Tenant shall use Landlord’s property in a manner consistent with all applicable laws, statutes, ordinances, or rules and regulations now in force and as they may be amended. Tenant shall pay all costs and expenses which may be incurred or required to be paid in order to comply with any and all laws, statutes, ordinances, rules, and regulations which apply to the use of the property and the sale of freshly grown produce and various other related foodstuffs and crafts.
Section 12. Termination Without Default
Notwithstanding any provision herein to the contrary, Landlord may, in its sole and absolute discretion and without cause, terminate this Agreement at any time upon five (5) days’ written notice to Tenant. Tenant may terminate this Agreement at any time in its sole and absolute discretion and without cause upon thirty (30) days' written notice to Landlord. In addition, Landlord may immediately terminate this Agreement upon written notice to Tenant, without default, in the event of any health or safety concerns related to the performance of this Agreement.
Section 13. Termination in the Event of Default
Should Tenant 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 Agreement, Landlord may immediately terminate this Agreement by giving written notice of such termination and in the notice, stating the reasons for such termination. Landlord shall be compensated for any expenses Landlord incurs as a result of Tenant’s default under this Agreement.
Section 14. Professional Ability
Tenant acknowledges, represents and warrants that Tenant is and its employees are skilled and able to competently provide the services hereunder, and possesses all professional licenses, certifications, and approvals necessary to engage in its occupation. Landlord has relied upon the professional ability and training of Tenant as a material inducement to enter into this Agreement.
Tenant shall perform in accordance with generally accepted professional practices and standards of Tenant's profession. In the event that Landlord, in its sole discretion, desires the removal of any person employed or retained by Tenant to perform services hereunder, such person shall be removed immediately upon receiving notice from Landlord.
Section 15. Business License
Tenant shall obtain and maintain at all times a current Richmond Business License before performing any services required under this Agreement. The failure to so obtain such license 771
shall be a material breach of this Agreement and grounds for immediate termination by Landlord.
Section 16. Independent Tenant
It is expressly understood and agreed upon by both parties that Tenant, including its agents and employees, and its farmers while engaged in carrying out and complying with any of the terms and conditions of this Agreement, is an independent Tenant and not an employee of Landlord.
Tenant is solely responsible for its acts and omissions. This Agreement shall not be construed to create an agency, servant, employee, partnership, or joint venture relationship. Tenant agrees not to represent, at any time or in any manner, that Tenant is an employee or agent of Landlord. As an independent Tenant, Tenant shall have no authority to bind Landlord to any obligation or to act as Landlord's agent except as expressly provided herein.
Section 17. Sub-Tenant
Tenant acknowledges that the services which Tenant shall provide under the Agreement are unique, personal services which, except as otherwise provided herein, Tenant shall not assign or sublet to any other party without the prior written approval of Landlord, which approval may be withheld in Landlord's sole and absolute discretion. In the event that Landlord, in writing, approves any assignment or subletting of this Agreement or the retention of sub-Tenants by Tenant, Tenant shall provide to Landlord upon request copies of each and every subcontract contract prior to the execution thereof by Tenant and sub-Tenant. Any assignment by Tenant of any or all of its rights under this Agreement without first obtaining Landlord's prior written consent shall constitute a material breach of this Agreement.
Section 18. Indemnification
To the fullest extent permitted by law, Tenant shall indemnify, defend and hold harmless Landlord 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 Tenant's employees), or any other injury or damage whatsoever, which injury, death or damage arises out of or is in any way connected with Tenant's performance of work, services, or use hereunder or its failure to comply with any of its obligations contained in the Agreement, or its failure to comply with any current or prospective law, regardless of the Tenant'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 Landlord, its officers, agents, or servants.
Tenant shall further indemnify, defend and hold harmless the Indemnified Parties, against and from any and all claims for damages or suits arising from Tenant’s use of Landlord’s property under this Agreement, and against and from all costs, attorneys’ fees, expenses and liabilities related to any claim for damages or any action or proceeding brought within the scope of this indemnification.
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Submission of insurance certificates, endorsements, or other proof of compliance with the insurance provisions does not relieve Tenants from liability under these terms. These indemnification, hold harmless and defense obligations shall apply whether or not such insurance policies are applicable to any such damages or claims for damages, and shall survive the expiration or sooner termination of this Agreement.
Section 19. Safety
Tenant acknowledges that Landlord is committed to the highest standards of workplace safety.
Tenant shall perform all work and 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 Tenant's employees and any sub-Tenant's employees. If a death, serious personal injury or property damage occurs in connection with the performance of this Agreement, Tenant shall immediately notify the Landlord by telephone.
Section 20. Nondiscrimination
In executing this Agreement, neither Tenant nor Landlord shall discriminate against any person on the grounds of race, color, religion, national origin, sex, marital status, disability, sexual orientation, ancestry or age. Any sub-Tenant agreement entered in by Tenant, pursuant to this Agreement, shall contain comparable language forbidding discriminatory practices by sub- Tenants.
Section 21. Non-Liability of Officials and Employees of the Landlord No official or employee of Landlord shall be personally liable for any default or liability under this Agreement.
Section 22. Remedies
In addition to any other available rights and remedies, either party may institute legal action to cure, correct or remedy any default, enforce any covenant herein, or enforce by specific performance the rights and obligations of the parties hereto.
Section 23. Litigation Costs
If legal action is necessary to enforce any provision of this Agreement, the prevailing party shall be entitled to reasonable litigation expenses, including court costs, expert witness and attorney fees, discovery expenses and all other related costs.
Section 24. Conflict of Interest
Tenant acknowledges, represents and warrants that Tenant 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 Agreement. Tenant further acknowledges, represents and warrants that Tenant has no business relationship or arrangement of any kind with any City official or employee with respect to this Agreement. No City official or employee has any economic interest, as defined in Title 2, California Code of Regulations §§ 18703.1 through 18703.5, with Tenant. Tenant acknowledges that in the event that Tenant shall be found by any judicial or administrative body to have any conflict of interest (as defined above) with respect to this Agreement, all consideration received under this Agreement shall be forfeited and returned to Landlord forthwith. This provision shall survive the termination of this Agreement for one (1) year. 773
Section 25. Continuous Use Clause
Tenant agrees to operate the Market according to the agreed upon schedule and acknowledges that failure to operate on said schedule may, at the discretion of Landlord, put them in default of the Agreement.
Section 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 Agreement, riots, civil unrest, acts of terrorism, insurrection, war, declaration of a state or national emergency or other reasons of a like nature not within the control of such party.
Section 27. Governing Law
This Agreement shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. This Agreement is made in Contra Costa County, California, and any action relating to this Agreement shall be instituted and prosecuted in the courts of Contra Costa County, California.
Section 28. No Third Party Beneficiaries
There shall be no third party beneficiaries to this Agreement.
Section 29. Interpretation
This Agreement shall be interpreted as if drafted by both parties.
Section 30. Authorized Representatives
Landlord and Tenant shall each designate an Authorized Representative who has authority to act on its behalf in the administration of this Agreement. Landlord and Tenant warrants that the person(s) who signs this document has the full authority to do so, and by his/her signature shall bind Landlord and Tenant to each and every term and condition hereof.
Section 31. Notices
All correspondence and notice to the parties indicated herein shall be sent to the parties as follows:
LANDLORD
City of Richmond
Attention: Shasa Curl, City Manager
450 Civic Plaza
Richmond, CA 94804
TENANT
Richmond Certified Farmers’ Market Association
Attention: Tom Cloman, President
P.O. Box 20995
El Sobrante, CA 94820
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Section 32. Holdover
Unless otherwise specified by Landlord, if Tenant fails to vacate the location as set forth in Exhibit “B” after expiration or termination of this Agreement, Tenant shall be deemed a trespasser which shall entitle Landlord to all remedies in equity and at law, including damages, to remove Tenant as a trespasser.
Section 33. Nonrenewal
Tenant understands and agrees that there is no representation, implication, or understanding that the Agreement will be renewed by Landlord under a new Agreement following expiration or termination of this Agreement. Tenant waives all rights or claims to notice or hearing respecting any failure by Landlord to continue the purchase of all or any such services from Tenant.
Section 34. Entire Agreement
This Agreement, including the Exhibits, constitutes the complete and exclusive expression of the understanding and agreement between the parties with respect to the subject matter hereof. All prior written and oral communication, including correspondence, drafts, memoranda, and representations, are superseded in total by this Agreement; provided, however, that correspondence or documents exchanged between Tenant and Landlord may be used to assist in the interpretation of the Exhibits to this Agreement.
Section 35. Amendment of Agreement
The Richmond City Council or, after Council approval, the City Manager, and the Board of Directors of the Richmond Certified Farmers Market Association are empowered to amend the provisions of this Agreement at any time provided such amendments are mutually agreed upon in writing. The City Manager has the authority to extend this agreement up to three times for a two- year period each time the agreement is extended.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day first written above.
[Signatures on Following Page]
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LANDLORD:
City of Richmond, a California municipal corporation and charter city
By ______________________________
Title: ____________________________
Date: ____________________________
Attest:
By ______________________________
City Clerk
Approved as to form:
_______________________________
City Attorney
Insurance Coverage reviewed by:
________________________________
Risk Manager
TENANT:
Richmond Certified Farmers’ Market Association, a California nonprofit corporation
By ______________________________
Title ____________________________
Date _____________________________
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EXHIBIT A
Tenant Rules and Regulations
1. Scope
The scope of services to be performed by the Tenant under this Agreement shall encompass the operations of the Market.
2. Market Operation
Tenant shall establish and operate a Market event in the City of Richmond, at the location set forth in Exhibit “B” every Friday from approximately 7:00 a.m. until 6:00 p.m. during the period from January to December.
3. Special Events
Should the Tenant require the use of City owned property for special events, the Tenant shall notify the Landlord in writing and if applicable, complete a City of Richmond Special Event Permit Application, at least thirty (30) days in advance of such event. The Landlord shall have the authority to approve, modify or reject such request.
4. City Business License
The Tenant shall obtain a City of Richmond Business License as the sponsor of the market.
5. Operations Plan
As determined necessary, Tenant shall update and adhere to the Operations Plan as set forth in Exhibit “E.” The Operations plan shall include, but not be limited to the following information:
a. Specified location and layout of market stalls, aisles, parking areas, type and locations of barricades, identification and directional signs, types and location of producers;
b. If applicable, number and type of entertainment and special events; c. Marketing and advertising plan, including signage. Any proposed signage requires City approval regarding content and location;
d. Market rules and regulations that are aligned with applicable local, state and federal laws to be distributed to all vendors and shall include provisions regarding:
i. Obtaining proper permits for participation;
ii. Limitations on selling;
iii. Market association fees;
iv. Hours of operation;
v. Set-up and clean-up guidelines,
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vi. Proper disposal procedures;
vii. Appropriate vendor behavior;
viii. Grounds for discipline or removal from market;
ix. Sanctions for breaking rules and regulations;
x. Information regarding health regulations; and
xi. Others as identified by Tenant.
e. Performance criteria which the Tenant will be responsible for enforcing and will be accountable to the Landlord for ensuring compliance.
6. Market Manager
Tenant shall hire and/or perform the following responsibilities:
a. A public relations coordinator and liaison to the Landlord. b. A trained on-site Market Manager who will be at each scheduled farmer’s market to assist on market days and for special events. His/her responsibilities shall include:
i. Implementing market policies and directives, and to oversee the operation of the market;
ii. Managing daily operations of the Market;
iii. Reporting any problems or concerns regarding Market operations to Landlord staff at the earliest opportunity;
iv. Ensuring vendor and Tenant compliance with all laws, rules and regulations from applicable regulatory agencies including, but not limited to, Contra Costa Health Services – Environmental Health Division and California Department of Food and Agriculture; v. Requiring all sellers to have and display at the market all appropriate permits, licenses and certificates;
vi. Ensuring that the Tenant shall not maintain, commit or permit the maintenance or commission of any nuisance or the use of the Landlord’s property for any unlawful purpose; and
vii. Maintaining financial records that establish compliance with the terms of this Agreement.
7. Market Vendors
The Tenant will recruit and put its best effort forth to have at least 10 but no more than 40 certified growers and non-certified vendors participate in the Market on a weekly basis. The Tenant will recruit and screen certified and non-certified vendors.
The selection of all vendors will be based on the categories outlined in Exhibit “C.”
8. Restrooms
Tenant is authorized to use the existing restrooms at the Richmond Main Library.
In the event that the restrooms are unavailable during Market hours and/or it is determined that continued use of the Library restrooms by the Tenant is no longer 778
feasible, the Tenant will be responsible for obtaining at least one (1) portable restroom and one (1) hand washing unit for use at every Market (units can be combined or separate). Tenant will incur all costs associated with the renting, cleaning and maintenance of the portable units. Depending upon the direction provided by the City, the portable units should either be picked up by 7:00 p.m. every Friday evening in which a market is held or the following Monday morning in which a market is held, or the portable units can remain on the Landlord’s property in an agreed upon location. If the portable units remain on the Landlord’s property then the Tenant must guarantee that the portable units are properly secured. Tenant is responsible for the cleaning and maintenance of the restroom facilities. The inside and outside of the restroom facilities need to be clean and trash free after every Market.
9. Market Site Maintenance & Clean-up
a. Site Clean-up: Tenant shall make certain that at the end of each market day the site is left clean of all trash, debris, recyclable and food waste materials (materials) associated with the Market. All materials shall be placed in appropriate receptacles for trash, recyclable and food waste materials. All vendors must maintain their stalls in a clean and sanitary condition, as specified by the City of Richmond, Contra Costa Health Services – Environmental Health Division, California Department of Food and Agriculture and any other applicable oversight agencies/entities. Each vendor is required to remove all materials from their stall areas before leaving the market. The Tenant is responsible for providing the appropriate trash and recycling receptacles for the use of vendors and customers. Tenant will provide its own custodial service for the Market clean-up and will guarantee that their custodial service vendor properly disposes of all waste. If the Landlord incurs clean-up costs as a result of the Tenant’s use of the Market area during market hours or from market vendors arriving or leaving the Market area, the Landlord will bill the Tenant for the costs.
b. City Dumpster Use: Use of an on-site dumpster or Landlord trash bins will not be allowed, unless agreed to by Landlord. If Tenant is allowed to utilize on- site dumpster or Landlord trash, recycling and/or green waste bins then Tenant must guarantee proper use of each bin (e.g. specific waste must be placed in the proper bins).
c. Long-Term Maintenance: If determined by Landlord, Tenant shall clean up any stains that result from market vendor vehicles twice per year via power washing or other acceptable method. It is recommended that vendors be required to lay down cardboard or other appropriate material to catch oil or other fluids which drip from their vehicles.
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d. Repairs: Tenant shall replace at its sole cost and expense any damage to the sidewalks, roadway, lighting, buildings, and landscaping or irrigation systems at Landlord’s property attributable to the Market.
10. Marketing
Any signs on or around the Market area shall be temporary and designed, purchased, ordered and installed by Tenant and/or qualified vendors. The design of any signs proposed to be placed on or around the Market area shall be approved by Landlord and the City of Richmond Planning and Building Department prior to installation and shall comply with all applicable City of Richmond codes and regulations governing signs. Signs will be set up and removed on Market day, unless permitted otherwise by Landlord.
11. Inspections
Tenant is required to inform Landlord of inspections by the Contra Costa Health Services – Environmental Health Division or other regulatory agencies and provide Landlord with any write-ups or reports provided by regulatory agencies. Any violations by Tenant shall be cause for Landlord, at Landlord’s sole discretion, to require that a specific vendor(s) be removed from the Market and/or termination of this Agreement.
12. Community Stall Space
Upon the availability of space, Tenant will provide community stall space free of charge to the Landlord, governmental agencies, and/or non-profit organizations serving Richmond to distribute information or raise funds for non-profit purposes. In the event that Tenant does not allow a City department and/or non-profit organization to occupy stall space at the Market, it is the responsibility of the Tenant to notify the organization that an appeal for community stall space may be made to the Landlord. 780
EXHIBIT B
Market Location
Farmers
Market
site
781
Possible Alternative Site once Richmnd Main Library Renovation Begins
Farmers
Market site
782
EXHIBIT C
Vendor Categories
Acceptable categories of certified vendors:
Per the California Department of Food and Agriculture’s laws, certifiable agricultural products, which are certified under the jurisdiction of the County Agricultural Commissioner relative to inspection and verification of compliance with the provisions of this article, include fresh fruits, nuts, vegetables, shell eggs, honey, flowers, and nursery stock.
An approved seller must also have an approved application-to-sell on file with the Market Manager prior to exercising his/her privilege of selling at the market. Landlord may ask the Tenant to see this application and any applicable documents at any time.
Acceptable categories of non-certified vendors:
Per the California Department of Food and Agriculture’s laws, non-certifiable agricultural products include all certified agricultural products that have been processed, those products other than certified agricultural products noted in the definition of acceptable categories of certified vendors above from any tree, vine or plant and their flowers (including processed products), any horticultural (including floricultural), viticultural (including wine), and vemicultural or apiary products.
Specific items may include:
Baked items such as breads, crackers, cookies, etc.;
Cheese and spreads;
Restaurant foods, prepared for purchase at market such as pastas and sauces; Condiments such as oils, vinegars, mustards, etc.;
Handmade crafts such as wreathes/baskets.
Any non-certified vendor which is not among the categories listed above is subject to the review and approval of the Landlord prior to participation in the market.
Non-acceptable categories of vendors:
The sale or giving away of any live animals, including but not limited to domestic animals, wild animals, insects, livestock, or poultry (including chickens) is strictly prohibited at any time in addition to any illegal items under federal, state, or local law.
Special Notes Regarding Vendors:
Tenant shall not be allowed to permit vendors selling non-food items not listed above such as clothing and electronics, and those labeled as temporary and/or mobile vendors selling foods cooked and/or prepared at the Market without Landlord’s prior written consent. Any such vendors permitted by Landlord must follow all applicable laws and obtain the proper permits and licenses required prior to participation in the Market. In the event that Tenant allows such vendors to sell at the Market without prior approval Landlord may require that such vendor(s) be removed from the Market immediately.
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This list is designed to provide a guide to help Tenant in making selections of acceptable certified and non-certified vendors; however, as necessary, Landlord reserves the right to order the removal of any producer or product that does not meet the City’s codes or that causes a public nuisance.
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Exhibit D
Insurance
Tenant shall comply with the insurance requirements that are set forth in the City of Richmond - Insurance Requirements document that is attached hereto and incorporated herein by this reference.
785
Exhibit E
Operations Plan
GOVERNING RULES FOR THE RICHMOND CERTIFIED FARMERS MARKET
THE PURPOSE of the Richmond Farmers Market Association (“Association”) is to operate a Certified Farmers Market in the City of Richmond, California, in accordance with the laws, ordinances, and regulations of the state, county, and local governments, for the benefit of the producers and consumers.
The Market is certified by the Agricultural Commissioner of Contra Costa County as a direct-marketing outlet for California producers of fruits, nuts, and vegetables. These producers may sell their products directly to consumers at the Market, without having to meet the usual size, standard-pack, and container requirements for such products, under the auspices of the Direct Marketing Regulations of the California Department of Food and Agriculture. Non-certified agricultural products may also be sold outside the certified portion of the market.
The following rules apply at the Richmond Certified Farmers Market:
1. CERTIFICATES AND OTHER REQUISITES FOR PARTICIPATION IN THE MARKET: All growers must be current members of this Association. Growers must possess and display an embossed copy of a current and valid Producer’s Certificate issued by the agricultural commissioner of the county where the producer’s farm is located. All certificates must list Contra Costa County as a destination county.
Only a certified producer, or a member of the grower’s immediate family, or a bona fide employee, may offer for sale the certified commodities.
All producer’s employees must supply proof of employment upon request. Proof may be a letter from and signed by the certified employer, a pay stub, or a W-9 form.
A certified grower may sell products for a maximum of one (1) other certified grower as long as the grower displays the other growers (current valid) certificate and clearly indicates, by sign or package label, the origin of those commodities.
Growers must get prior permission from the Market Manager to sell products from a second certificate.
However, the agent producer must own (produce) over 50 percent of the products displayed for sale. Each producer must also be a current member of this Association, the products must be separate and identified as belonging to the other producer’s certificate.
No peddlers or resale vendors are allowed under the California Administrative Code, Title 3, Chapter 3, Article 6.5; Direct Marketing.
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By signing the application form, a grower member specifically recognizes that a representative of the Market may, by appointment visit the certified farm location as necessary to verify compliance with these regulations.
Any producer claiming to have “organic” produce must grow the produce in accordance with current California and Federal regulations. Signs claiming that the produce has been organically grown must comply with current California and Federal rules. Grower should check with their local agricultural commissioner for current “organic” regulations.
By State regulations, producers’ certificates must be displayed prominently in their stalls.
The Contra Costa Health Services – Environmental Health Division has specific requirements for signs identifying vendors under their jurisdiction. Each seller should have a display sign bearing his or her business name and county of origin.
Producers must also provide the Market Manager with copies of other required documentation (such as liability insurance for the grower’s vehicle used in the market), and must understand and sign an agreement to respect these governing rules.
2. MEMBERSHIP: The current annual membership dues for Producers Members is $30.00. Membership entitles the producer to a reserve space (see #6, #10 and #14 below).
3. HEALTH REGULATIONS: All participants in the market must abide by the regulations set by the Contra Costa Health Services – Environmental Health Division and California Department of Food and Agriculture, or other applicable regulatory agencies.
All vendors shall comply with Chapter 12 of the California Retail Food Code with regards to Farmers’ Markets. Specifically, food and food containers must be kept at least 6 inches off the ground either on a study table or in (or on) a vehicle. Health regulations prohibit the sale of food prepared in an unlicensed kitchen. Food samples must be kept in approved clean containers. Gloves must be worn when cutting food samples. Samples must be washed in potable water and dispersed within 2 hours of cutting. Smoking by food handlers is not permitted in the market stall areas.
All vendors referred to as Temporary Food Facilities (Chapter 11 of the California Retail Food Code) and/or Mobile Food Facilities (Chapter 10 of the California Retail Food Code) shall comply with applicable Federal, State and local regulations.
4. PRICES, LABELS, MEASURES: Growers are strongly encouraged to display their prices (per unit, etc.) clearly and unambiguously.
Prepackaged products sold in containers (packages, bottles) should be labeled with the quantity or weight of the contents, the grade (if applicable), and the name and address (including zip code) of the producer.
Scale used in the market must have current valid inspection seals from the county agent in charge of weights and measures.
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5. DATES, HOURS: The Board of Directors determines the opening and closing dates for the Association’s market(s), as well as the opening and closing hours. Any changes to the dates and times set forth in this document shall be approved by the City of Richmond as long as the City’s land is being used for market operations.
The current market day and hours are: Every Sunday from 10:00 a.m. to 2:00 p.m.
Sales may be permitted before the official daily opening of the market. Sales shall end and clean-up shall begin no later than the official closing hour of 2:00 p.m.
6. RESERVATIONS: All growers are expected to reserve their spaces with the Manager. Growers arriving without reservations for their first time at market will be allowed to sell that day if there is room available and they satisfy all other requirements of membership and certification.
7. CANCELLATIONS: Growers are expected to cancel their space reservations before the next market day. Growers failing to notify the Manager in advance of their intention not to attend a market may be charged the regular stall fee for the day missed when they next appear at the market.
8. STALL FEES: The fee for Grower Members is $25.00 for each stall space.
The Association is authorized to handle and exchange food stamp and WIC coupons.
9. CLEAN-UP: The Association feels a special obligation to the City to leave their street in good order. Growers should keep and leave their space clean. This includes providing waste cans for sample peels and pits, policing the area periodically to prevent potential accidents, and removing waste from the market area at the end of the day.
At the Manager’s discretion, a cleaning fee of $10.00 may be assessed, after one warning, if the stall is not left clean, and a chronic violator (whom the Manager has warned at least three times, at least once in writing) risks suspension or loss of his or her reserved space.
10. STALL SPACES: Assignment of spaces is at the discretion of the Market Manager. Unresolved conflicts may be appealed to the Board. Although no formal seniority rule has been made, the Board and the Manager will try to respect the seniority of Grower Members who have a record of cooperation in reserving and cancelling their spaces in advance.
A stall space is 12 feet along the curb by about 25 feet into the street. We reserve the right to require growers to keep within these limits or pay for additional stall spaces, if available.
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11. PRODUCTS: Certifiable products include the following: Fresh fruit, nuts, vegetables, eggs, honey, flowers and nursery stock. The Board my limit the amount of certain products in the market:
a. There shall be no more than two sellers of eggs in the Market. Eggs sellers must own and control the hens laying the eggs and be in compliance with all laws, state and federal, relating to egg production, quality control, and sales.
b. There shall be no more than two sellers of honey in the Market. Honey sellers must own and control the hives where the honey has been produced and be in compliance with all laws relating to honey production and sales. Specifically, the seller must comply with state regulations regarding containers, grading, and labeling, and must supply a copy of the health permit for the kitchen facility used in preparation and packaging the product.
c. There shall be no more than two sellers of fresh flowers or nursery stock (potted plants) in the Market.
d. The sale or giving away, of any live animals, including but not limited to domestic animals, wild animals, insects, livestock, or poultry is strictly prohibited at any time.
12. OCEAN FISH: The sale of ocean fish is not allowed by the Direct Marketing Rules within the “certified” area of the Market. Vendors wishing to sell ocean fish are to occupy an area designated for non-agricultural products which is outside the “certified” Market.
There shall be no more than two sellers of ocean fish in the non-agricultural area of the Market. Ocean fish sellers must supply the Manager with copies of pertinent permits and licenses, and particular, of currently valid product-liability insurance coverage.
13. QUALITY: Growers shall guarantee their products, food items and whatever they sell.
All sellers of potentially hazardous food (as defined in State regulations: “any food which consists of ingredients capable of supporting rapid and progressive growth of infectious or toxicogenic microorganisms, including, but not limited to, milk or milk products, eggs, meat, poultry, fish or shellfish”) must furnish satisfactory proof of compliance with regulations applicable to the preparation of their products (such as licenses from approved commissaries).
The market Manager has the authority to order a grower to label a commodity of impaired quality and/or to remove it from sale on any given market day on account of poor quality. In case of dispute, the matter may be referred to the Board of Directors.
Any grower receiving two (2) “red tags” (for substandard quality) from the county or state Agricultural Commissioner for the same commodity within a market season will be 789
summoned to meet the Board of Directors for a review of the grower’s continued participation in the market.
14. STANDARDS OF CONDUCT: PENALTIES: Sellers are expected to maintain high standards of honesty and to conduct themselves in a courteous, respectable, and businesslike manner. Rude, abusive, or other disruptive or offensive conduct will not be allowed in the Market at any time.
Customers are expected to maintain similar standards.
Day-to-day market problems should be handled through the Market Manager, but matters of policy, complaints and major difficulties should be taken up with the Board in writing.
The Board of directors and the Market Manager shall implement and enforce all rules and regulations pertaining to the operation of the Certified Farmers Market in fair and equitable manner.
Whereas the Market will make available the space and opportunity for any qualified producer who meets the standards of the State, County, and the Market’s rule and regulations, we also reserve the right to qualify any producer or product based upon those standard rules and regulations.
The Market also reserves the right to order removal of any producer or product that does not meet the qualifications and standards set forth by the State, County, or Market rules.
The Market Manager will assure compliance with these regulations as follows:
a. The Manager will deliver fair warning of the alleged infraction(s), verbally at first; then, in case of need, by written notice to the offending grower(s), with a copy to the Board.
b. If the alleged infraction is not resolved to the Manager’s satisfaction by the next market day, the Manager will issue a second written notice which will carry an automatic fine of $10.00.
c. If the alleged infraction is still not satisfactorily resolved, the Manager may recommend to the Board suspension of the producer’s membership and selling privileges at the Market. The Board’s decision after fair hearing is final.
15. REPRESENTATION: The Board of Directors of this Association includes one (1) representative from each Community Organization Member, and nine (9) grower and individual members. All producer Members of the Association are entitled to participate in selecting their Board representatives.
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Only the Board of Directors and its officers, the Market Manager, and individuals who may be appointed and approved by the Board, may speak publicly on behalf of the Association or its market.
16. OTHER RULES: Occasionally, other rules governing the market may be adopted by the Board as allowed in the Association’s by-laws. Members will be notified, in advance, as new rules are being considered, and again if the rules are adopted.
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March 19, 2024
Mayor's Office
DATE: March 19, 2024
TO: Members of the City Council
FROM: Mayor Eduardo Martinez
Subject:
Community Police Review Commission Appointment
FINANCIAL IMPACT: N/A
PREVIOUS COUNCIL
ACTION:
N/A
STATEMENT OF THE
ISSUE:
Carmen Martinez is applying for position on the
Community Police Review Commission.
RECOMMENDED ACTION:
APPOINT Carmen Martinez to the Community Police
Review Commission with a term that expires November
1, 2027 - Mayor’s Office (Mayor Eduardo Martinez 510-
620-6502)
DISCUSSION:
Carmen Martinez is applying for a seat on the Community Police Review Commission (CPRC), motivated by her belief in the importance of law enforcement oversight to AGENDA
REPORT
792
March 19, 2024
increase accountability and transparency within communities. Her educational background, with a Bachelor of Arts in Criminology & Criminal Justice Studies and Spanish, has deepened her understanding of issues such as over-policing, mass criminalization, and the culture of surveillance. This knowledge has driven her to not only get involved but also to educate others about the role and potential impact of the CPRC. Carmen emphasizes the need for diversity in the commission, particularly in terms of age, to enable younger community members to learn about accountability mechanisms and the power of civic engagement.
DOCUMENTS ATTACHED:
Attachment 1 – Carmen Martinez redacted application to the Community Police Review Commission
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March 19, 2024
Mayor's Office
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Mayor Eduardo Martinez
Subject:
Reducing the Reimaging Public Safety Community Task
Force from 21 to 14 members
FINANCIAL IMPACT: N/A
PREVIOUS COUNCIL
ACTION:
On June 30th 2020 the City Council directed staff to create a 21-member task force for the Reimagine Public Safety
STATEMENT OF THE
ISSUE:
There are currently 21 authorized seats on the
Reimagining Public Safety Community Task Force. The
Mayor has identified a need to reduce the maximum
number of seats to 14.
RECOMMENDED ACTION:
APPROVE the reduction of Reimaging Public Safety
Task Force from 21 to 14 members.
DISCUSSION:
On June 30, 2020, the City Council heard Item I-1 to direct staff to prepare a plan to transition from Richmond's current "community policing" model to a plan conducive to a reduced police force and return to Council with the preferred policing model and a plan AGENDA
REPORT
795
March 19, 2024
for implementation by the end of Fiscal Year 2020/2021. AGENDA REPORT September 15, 2020 Page 2 of 3 Creation of a Task Force Following discussion on the item, the City Council further wanted to “create a transition accountability task force composed by members of the public, including community organizations, individuals who were impacted by law enforcement, and law enforcement.” Within a series of friendly amendments, the City Council specifically wanted to include representation from Safe Return Project, RYSE Center, members of the Community Police Review Commission, Office of Neighborhood Safety, the police department, and Contra Costa County amongst possible additional representatives. Following the approval of this item, there was no formal appointment of members, nor was there a clear structure laid out for the function of the body. Given the formal action taken by Council to create the task force, it was determined that it is within the charter-appointed duties of the mayor to nominate candidates for appointment to the task force, as is done for the city’s boards and commissions. In lieu of exercising his ability to be the sole nominator of candidates for the task force, at the September 15, 2020 City Council meeting, the mayor plans to recommend that each member of the City Council nominate three members of the public to the task force, thus appointing a total of twenty-one individuals. Council members will be encouraged to nominate individuals who are active in the various community organizations mentioned in the City Council discussions. The City Council may wish to recommend additional components of this process, such as an application process. It is understood that one or more community groups have formed to begin conversations surrounding this topic and to develop recommendations for City Council consideration. Staff truly appreciates the initiative taken by these groups, and, pending Council direction, believes that there is a way to work collaboratively with the community groups and/or incorporate members of these groups into the proposed structure of a formalized task force.
It was in this meeting that 21-member task members were created. There is no ordinance or resolution with this formation; it was done through council direction.
DOCUMENTS ATTACHED:
Attachment 1 – September 12, 2020 Agenda Report (update on Reimagine Public Safety)
796
September 15, 2020 Page 1 of 3
City Manager’s Office
DATE: September 15, 2020
TO: Honorable Mayor and Members of the City Council
FROM: Laura Snideman, City Manager
Sal Vaca, Community Services Director
SUBJECT: Update on “Reimagine Public Safety” Conversations
STATEMENT OF THE ISSUE:
On June 30, 2020, the City Council directed staff to prepare a plan to transition from the city’s current community policing model and to return to t he Council by the end of Fiscal Year 2020/2021 with recommendations on how to achieve th is goal. Providing an update as also directed by the City Council and establishing a pro cess to accomplish this work is the focus of this item on September 15.
RECOMMENDED ACTION:
RECEIVE an update on the status of the “Reimagine P ublic Safety” process. PROVIDE FEEDBACK on a possible future consultation and faci litation services agreement with CircleUp Education. CONSIDER appointment methodolog y recommendation to form a 21- member task force – City Manager’s Office (Laura Snideman 620-6512).
FINANCIAL IMPACT OF RECOMMENDATION:
The September 15 actions will not directly result i n a fiscal impact, but further facilitation services (subject to City Council review at a futur e meeting) will have a budget impact. The CircleUp agreement would be for an amount not to exceed $19,312.50.
DISCUSSION:
On June 30, 2020, the City Council heard Item I-1 to direct staff to prepare a plan to transition from Richmond's current "community policing" model to a plan conducive to a reduced police force and return to Council with the preferred policing model and a plan for implementation by the end of Fiscal Year 2020/2021.
AGENDA
REPORT
797
September 15, 2020 Page 2 of 3
Creation of a Task Force
Following discussion on the item, the City Council further wanted to “create a transition accountability task force composed by members of th e public, including community organizations, individuals who were impacted by law enforcement, and law enforcement.” Within a series of friendly amendments, the City Co uncil specifically wanted to include representation from Safe Return Project, RYSE Cente r, members of the Community Police Review Commission, Office of Neighborhood Safety, t he police department, and Contra Costa County amongst possible additional representatives.
Following the approval of this item, there was no f ormal appointment of members, nor was there a clear structure laid out for the function o f the body. Given the formal action taken by Council to create the task force, it was determined that it is within the charter-appointed duties of the mayor to nominate candidates for appo intment to the task force, as is done for the city’s boards and commissions. In lieu of exerc ising his ability to be the sole nominator of candidates for the task force, at the September 15, 2020 City Council meeting, the mayor plans to recommend that each member of the City Cou ncil nominate three members of the public to the task force, thus appointing a total o f twenty-one individuals. Council members will be encouraged to nominate individuals who are active in the various community organizations mentioned in the City Council discuss ions. The City Council may wish to recommend additional components of this process, such as an application process.
It is understood that one or more community groups have formed to begin conversations surrounding this topic and to develop recommendatio ns for City Council consideration. Staff truly appreciates the initiative taken by these groups, and, pending Council direction, believes that there is a way to work collaboratively with th e community groups and/or incorporate members of these groups into the proposed structure of a formalized task force.
Community Conversation Series
Staff is recommending that open community conversat ions be used for additional outreach and input into the process, supporting the work of the task force. On August 27, 2020, the city hosted a virtual community event titled, “A Communi ty Conversation Series, Reimagining Police and Public Safety,” which was open to the pu blic. The goal of this event, which was viewed by more than one hundred people, was to rece ive community input about the topics the community wants to discuss and hear ideas about the best process for furthering these conversations.
The event was facilitated by Tiffany Hoang with Cir cleUp Education, an East Bay organization that specializes in creating strategies to address implicit bias, inequity, and other structural and institutional social issues. By rece iving questions and comments from the public, the city gained an initial understanding of the community’s priorities and positions on changes to police services and public safety in Ric hmond. The city was in “listening” mode and did not present any specific plans or ideas, as those will be developed with the community over the coming months. With the help of the community, the task force, and CircleUp Education, city staff recommends hosting a dditional installments of the Community Conversation Series, likely focusing on a different key topic during each session. 798
September 15, 2020 Page 3 of 3
Contract with CircleUp Education
To ensure that future public forums are moderated b y a neutral facilitator, staff recommends that the City Council consider a contract at a futu re meeting for $19,312.50 to retain the services of Tiffany Hoang with CircleUp Education. Following recent protests and calls for public safety reform in the wake of the murders of George Floyd, Breonna Taylor, and several other Black Americans, Ms. Hoang successful ly moderated public forums for the cities of Concord, Lafayette, and Hercules. Ms. Ho ang is a highly reputable facilitator for cities and other clients, and successfully worked t o facilitate an objective and community- focused forum in Richmond on August 27
th .
CircleUp Education is recommended as a sole source due to their facilitation of similar meetings in other jurisdictions, as well as their m ost recent work that was presented to the West County Mayors and Supervisors Monthly Meeting surrounding re-imagining and restructuring public safety. CircleUp Education can continue to assist coordinating and facilitating the community conversations and assist with key task force meetings, which includes but is not limited to session design, logi stical/technical support, and coordinating follow up with residents and staff. City staff would like to continue using their services in order to accomplish the end goal of providing a plan, rec ommended by the community task force, to City Council on transitioning from the city’s current community policing model.
Next Steps
The next steps include but are not limited to:
• Creation of a 21-member task force and hosting of task force meetings with appropriate City support from the Community Service s Department and possibly CircleUp Education
• Development of a dedicated webpage on the City’s w ebsite to share information about the progress of this work with the Richmond communi ty. Follow-up from the August 27 th community conversation will be uploaded on this site • Hosting of future communitywide conversations, wit h direction from City Council and the task force
ATTACHMENTS:
1 – DRAFT Standard Contract with CircleUp Education
2 – DRAFT Sole Source Justification Form
799
March 19, 2024
Public Works
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, Director of Public Works
Charles Gerard, Port Director
Subject: Amendment to NEMA Construction On-Call Construction Contract
FINANCIAL IMPACT: The proposed expenditure was approved in the Fiscal Year 2023-24 Budget (Account String 01232531-
400538). The Port will provide funding for this work as approved in the Fiscal Year 2023-24 Budget (Account
String 40183080-400708-36011).
PREVIOUS COUNCIL
ACTION:
City Council Approved the Contract with NEMA
Construction on September 8, 2020.
STATEMENT OF THE
ISSUE:
The City seeks approval to amend an existing on-call
construction agreement with NEMA Construction to
repair electrical infrastructure at various locations within the City including at the Point Potrero Marine Terminal.
RECOMMENDED ACTION: APPROVE Amendment 2 to the construction agreement with NEMA Construction in the amount of $150,000, for a new total not to exceed amount of $1,650,000, and for a term ending September 30, 2025 – Public Works
Department (Daniel Chavarria 510-620-5478).
AGENDA
REPORT
800
March 19, 2024
DISCUSSION:
NEMA Construction, recognized for its expertise in high voltage and traffic signal electrical repairs, has been a reliable on-call contractor for the City since September 8, 2020. The company operates under a three -year, $1,500,000 contract with the City, exten dable by two years, which was recently extended to September 30, 2025. NEMA's consistent delivery of high-quality work across various city projects, particularly in lighting and traffic signal systems, positions them as the ideal candidate for addressing the urgent electrical repair needs at the Point Potrero Marine Terminal.
Staff seeks to amend the existing As-Needed Contract for Electrical Services with NEMA to facilitate the issuance of Purchase Orders for necessary repairs, starting with a critical $75,000 project at the Port. This project will repair lighting and other electrical infrastructure at the Port Administrative building, ensuring the Port's operational efficiency and safety. Approval of this amendment will allow City Staff to swiftly address these needs, leveraging NEMA Construction's familiarity with the Port's systems and their competitive cost value.
ENVIRONMENTAL REVIEW:
As this is repair work, the project is exempt from the California Environmental Quality Act.
DOCUMENTS ATTACHED:
Attachment 1 – Second Contract Amendment
Attachment 2 – First Contract Amendment
Attachment 3 – Original NEMA Contract
801
CITY OF RICHMOND
CONTRACT AMENDMENT
Department: Project Manager:
Project Manager E-mail: Project Manager Phone No:
P.R. No: Vendor No: P.O./Contract No:
Description of Services:
Amendment No. ___ modifies the: (2nd or subsequent amendments attach Amendment History page)
Term, Pa yment Limit and Service Plan
Pay ment Limit and Service Plan
Term and Service Plan
Service Plan
The parties to this Contract Amendment do mutually agree and promise as follows:
1. Parties. The parties to this Contract Amendment are the City of Richmond, California, a
municipal corporation (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. Purpose. This Contract Amendment is being entered into to amend the Contract between City and Contractor which
was approved by the City Council of the City of Richmond or executed by the City Manager on ,
which original term commenced
on
and terminates w
ith an original
contract payment limit of $
. Said contract shall hereinafter be referred
to as the "Original Contract" and is incorporated herein by reference.
3. Original Contract Provisions. The parties hereto agree to continue to abide by those terms and conditio
ns of the Original Contract, and any amendments thereto, which are unaffected by this Contract Amendment.
Public Works
Robert Armijo
[email protected]>
(510) 620-5477
9843
Electrical Service
✔
2 NEMA Construciton
555 Pierce Street #1005
Albany, CA 94706
Ali Farahami
(510) 525-2398
[email protected]
40048359
September 30, 2024
✔
NEMA Construction
October 1, 2020
October 1, 2020
September 30, 2023
1,500,000.00
802
Contract Amendment/EJ/TE 09-26-07
4. Amendment Provisions. This Contract Amendment is subject to the Amendment Provisions attached here
to, which are incorporated herein by reference, and which control over any conflicting provisions of the Original Contract, or any amendment thereto.
5. City of Richmond Business License Active Status Maintained. Pursuant to Municipal Code Section
7.04.030, the Contractor must maintain its City of Richmond business license for this Contract Amendment to be deemed to be in effect.
6. Insurance Coverage Updated and Maintained. Pursuant to the Original Contract, the Contractor shall provide the City with updated insurance certificates, and the Contractor
shall maintain insurance coverage, for this Contract Amendment to be deemed to be in effect.
7. Signatures. These signatures attest the parties’ agreement hereto:
CITY OF RICHMOND, CALIFORNIA
a municipal corporation
By _______________________
Title:
I hereby certify that the Original Contract
and this Amendment have been approved
by the City Council or executed by the City
Manager.
By _______________________
City Clerk
Approved as to form:
By_______________________
City Attorney
List of Attachments:
1. Amend ment Provisions
2. Updated Insurance Certificates
CONTRACTOR:
______________________________
(*The Corporation Chairperson of the Board, President or Vice-President should sign on the line below.)
By____________________________
Title:________________________
(*The Corporation Chief Financial Officer, Secretary or Assistant Secretary should sign on the line below.)
By:___________________________
Title:________________________
(NOTE: Pursuant to California Corporations
Code Section 313, if Contractor is a
corporation or nonprofit organization, this
Contract (1) should be signed by the
Chairperson of the Board, President or
Vice-President and
the Chief Financial
Officer, Secretary or Assistant Secretary; (2)
should have both signatures conform to
designated representative groups pursuant
to Corporations Code Section 313.
NEMA Construciton
803
Contract Amendment between the City of Richmond and
Amendme
nt No. P.O./Contract No.
AMENDMENT PROVISIONS (TERM, PAYMENT LIMIT AND SERVICE PLAN)
1. Paragraph 2 (Term) of the Original Contract is hereby amended to extend the Contract term. Paragra
ph 2 of the Original Contract is amended to read as
follows:
"2. Term. The effective date of this Contract is
____________________________________________________________ (Insert original contract commencement date)
and it terminates
___________________________________________________.
(Insert new contract termination date)
unless sooner terminated as provided herein."
2. Paragraph 3 (Payment Limit) of the Original Contract is hereby amended to increase the
payment limit by $ . Paragraph 3 of the Original Contract is
amended to read as follows:
"3. Payment Limit. City's total payments to Contractor under this Contract shall not exceed $
including expenses."
“The City of Richmond shall not pay for services that exceed the Contract Payment Limit without the prior written approval of the City Manager if the total Contract amount does not exceed $10,000 or without the prior approval of the City Council if the total Contract amount is over $10,000.”
3. The Service Plan (Exhibit A) of the Original Contract is hereby amended to include the f
ollowing tasks and/or services:
Contract Amendment/EJ/TE 9-26-07
2 NEMA Construciton
October 1, 2020
September 30, 2025
150,000.00
1,650,000.00
None
804
Contract Amendment between the City of Richmond and
Amendme
nt No. P.O./Contract No.
AMENDMENT PROVISIONS (AMENDMENT HISTORY)
The first Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The second Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The third Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The fourth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The fifth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
2 NEMA Construciton
1,500,000.00
September 30, 2025
✔
1,500,000.00
1,500,000.00
1,500,000.00
1,500,000.00
805
Contract Amendment between the City of Richmond and
Amendme
nt No. P.O./Contract No.
The sixth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The seventh Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The eighth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The ninth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
The tenth Contract Amendment was approved by City Council of the City of Richmond or executed by the City Manager on for one or more of the following provisions (check those that apply):
Increa sed contract payment limit by $ ________________for a payment limit not to exceed $ _________________________.
Term Amendment (insert new termination date):________________________
Service Plan
Contract Amendment/EJ/TE 11-30-07
2 NEMA Construciton
1,500,000.00
1,500,000.00
1,500,000.00
1,500,000.00
1,500,000.00
806
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 807
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 808
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 809
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 810
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 811
DocuSign Envelope ID: 3D0A6B93-4D7F-4E0E-AA02-91C1176B139A 812
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817
818
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820
821
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835
March 19, 2024
Public Works
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Daniel Chavarria, Director of Public Works
Chief Bisa French
Captain Eric Smith
Tawfic Halaby, Deputy Director of Public Works for
Operations & Maintenance
Dee Karnes, Fleet Maintenance Superintendent
Subject:
Contract Award to Stommel, Inc., dba LEHR, for
Outfitting of Emergency Vehicles
FINANCIAL IMPACT: The capacity on this contract will be utilized when funding is available in the Fleet Maintenance Capital
Improvement account in fiscal years 2023-2024, 2024-
2025, and 2025-20256, Account String 50336031-
400705-03B04.
PREVIOUS COUNCIL
ACTION:
None
STATEMENT OF THE
ISSUE:
The Public Works Department is requesting City Council
approval to award a contract to Stommel, Inc., dba
LEHR, for the outfitting of emergency vehicles.
RECOMMENDED ACTION:
APPROVE a contract with Stommel, Inc., dba LEHR, for
the outfitting of emergency vehicles, for a term from
March 1, 2024 to June 30, 2027, in an amount not to
exceed $1,500,000 – Public Works Department and
Richmond Police Department (Daniel Chavarria 510-620-
5478/Captain Eric Smith 510-621-1802).
AGENDA
REPORT
836
March 19, 2024
DISCUSSION:
The City of Richmond currently has more than one dozen police cars that need to be outfitted with emergency equipment to be assigned to personnel for deployment. More police cars are expected to be ready for similar services in the coming months.
In July 2019, the County of Placer published a Request for Bids for Emergency Response Vehicle Equipment and Installation Services. Stommel, Inc., (LEHR) was awarded the original contract for services, and on July 25, 2023, a one-year extension, effective October 1, 2023, was approved by the Placer County Boad of Supervisors.
The Fleet Maintenance Division is proposing to use the Placer County’s competitive bidding because the majority of specifications requested are identical to that of Richmond’s.
This contract is in compliance with the Richmond Municipal Code Section 2.52.330 Piggyback procurement which allows for a “piggyback” purchase using another agency’s purchase contract if it is in the best interest of the City of Richmond
The City of Richmond has worked with Stommel, Inc, (LEHR) for many years and has been completely satisfied with their work. There is no qualified City of Richmond vendor that can provide this service.
DOCUMENTS ATTACHED:
Attachment 1 – Proposed Contract
Attachment 2 – Piggyback Approval
Attachment 3 – County of Placer Contract
837
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.
838
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:
B y :
City Clerk
(* The Corporation Chief Financial Officer,
Secretary or Assistant Secretary should sign below)
Approved as to form:
B y :
B y : T i t l e :
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
839
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:
840
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 PA YMENT 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 Contra ctor 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 a fter 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. 841
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
Project Manager: Department:
1701 Regatta Blvd.
Richmond, CA 94804
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. 842
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:
843
General Conditions/EJ/TE 01-19-11 1 of 13
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, 844
General Conditions/EJ/TE 01-19-11 2 of 13
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. 845
General Conditions/EJ/TE 01-19-11 3 of 13
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 C ontract's termination (or for any further period that is required by law) and until all Fede ral or State audits are complete and exceptions resolved for this contract's funding period. Upon request, CONTRACTOR shall make thes e 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. 846
General Conditions/EJ/TE 01-19-11 4 of 13
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 847
General Conditions/EJ/TE 01-19-11 5 of 13
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
.
(a) If this Contract is a contract for design professional services subject to California Civil Code Section 2782.8(a) and Contractor is a design professional, as defined in California Civil Code Section 2782.8(b)(2), Contractor shall hold harmless, defend and indemnify the City, its officers, agents, employees, and volunteers from and against any and all claims, damages, losses, and expenses including attorneys’ fees arising out of, or pertaining to, or relating to the negligence, recklessness, or willful misconduct of the Contractor, except where caused by the active negligence, sole negligence, or willful misconduct of the City. To the fullest extent permitted by law, Contractor shall immediately defend and indemnify the City and its officers, agents, employees, and volunteers from and against any and all liabilities, regardless of nature or type, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor, or its employees, agents, or subcontractors.
Liabilities subject to the duties to defend and indemnify include, without limitation, any and all claims, losses, damages, penalties, fines, and judgments; associated investigation and administrative expenses; defense costs, including but not limited to reasonable attorneys’ fees; court costs; and costs of alternative dispute resolution. Contractor’s obligation to 849
General Conditions/EJ/TE 01-19-11 7 of 13
indemnify applies unless it is finally adjudicated that the liability was caused by the sole active negligence or sole willful misconduct of an indemnified party.
(b) If this Contract is not a contract for design professional services subject to California Civil Code Section 2782.8(a) or Contractor is not a design professional as defined in California Civil Code Section 2782.8(b)(2), Contractor shall indemnify, defend, and hold harmless the City, its officers, agents, employees and volunteers from any and all claims, suits, or actions of every name, kind and description, brought forth on account of injuries to or death of any person or damage to property arising from or connected with the willful misconduct, negligent acts, errors or omissions, ultra-hazardous activities, activities giving rise to strict liability, or defects in design by Contractor or any person directly or indirectly employed by, or acting as, the agent for Contractor in the performance of this Contract, including the concurrent or successive passive negligence of the City, its officers, agents, employees or volunteers.
(c) It is understood that the duty of Contractor to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Contractor shall be obligated to defend, in all legal, equitable, administrative, or special proceedings, with counsel approved by the City, the City and its officers, agents, employees, and volunteers, immediately upon tender to Contractor of the claim in any form or at any stage of an action or proceeding, whether or not liability is established. An allegation or determination that persons other than Contractor are responsible for the claim does not relieve Contractor from its separate and distinct obligation to defend under this Section 15. The obligation to defend extends through final judgment, including exhaustion of any appeals. The defense obligation includes an obligation to provide independent counsel if Contractor asserts that liability is caused in whole, or in part, by the negligence or willful misconduct of an indemnified party. (d) The review, acceptance or approval of the Contractor’s work or work product by any indemnified party shall not affect, relieve or reduce the Contractor’s indemnification or defense obligations. This Section 15 survives completion of the services or the termination of this Contract.
The provisions of this Section 15 are not limited by, and do not affect, the provisions of this Contract relating to insurance.
(e) Acceptance of insurance certificates and endorsements required under this Contract does not relieve Contractor from liability under this Section
15. This Section 15 shall apply whether or not such insurance policies are determined to be applicable to any such damages or claims for damages.
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 850
General Conditions/EJ/TE 01-19-11 8 of 13
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 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 851
General Conditions/EJ/TE 01-19-11 9 of 13
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.
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 852
General Conditions/EJ/TE 01-19-11 10 of 13
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, 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.
853
General Conditions/EJ/TE 01-19-11 11 of 13
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 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 854
General Conditions/EJ/TE 01-19-11 12 of 13
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 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.
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General Conditions/EJ/TE 01-19-11 13 of 13
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.
41. 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”). Contractor must submit the Sanctuary City Compliance Statement, attached hereto as Exhibit G, prior to the execution of this Agreement.
856
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):
857
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.
858
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 1 of 4
Revised: September 2011
In all instances where a CONTRACTOR or its representatives will be conducting business and/or providing 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, employees 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) including coverage for bodily and personal injury, property damage, and products and completed operations.
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 coverage.
5. Original and Separate Waiver of Subrogation for Workers’ Compensation and Builder’s Risk/ Course of Construction Insurance.
6. Builder’s Risk/Course of Construction insurance covering all risks of loss less policy exclusions when the City of Richmond has a financial interest in the property. – (Only required for Construction Contracts involving property)
7. Contractor’s Pollution Liability (if applicable for Construction Contractors)
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 Self- Insure, signed by the California Department of Industrial Relations and Self- Insurance. If contractor is a sole proprietor (has no employees) than contractor must sign “Contractor Release of Liability” found at:
http://www.ci.richmond.ca.us/index.aspx?nid=61.
859
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 2 of 4
Revised: September 2011
PROJECT COST R EQUIRED LIMIT
$0 - $5 million $2 million p/o
$5 million - $10 million $5 million p/o
Over $10 million $10 million p/o
Fireworks $5 million p/o
General Liability
(primary and excess limits
combined)
Includes coverage for bodily injury, personal injury, property damage and products and completed operations. The policy shall not exclude coverage for XCU perils (explosion, collapse, or damage to underground property).
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 limit).
Policy shall be endorsed to name the City of Richmond as an additional insured per the conditions detailed below.
Automobile Liability $1,000,000 per occurrence for bodily injury and property damage.
Builders’ Risk/Course of
Construction – Covers property
under construction, repair or
renovation as well as equipment
and materials to be installed.
(Only required for Construction
Projects involving property and
equipment installation.)
Coverage shall include all risks of direct physical loss, excluding earthquake, for an amount equal to the full completed value of the covered structure or replacement value of alterations or additions, including soft costs and business interruption.
If the project does not involve new or major reconstruction, an Installation Floater may be acceptable. For such projects, a property installation floater shall be obtained that provides for the improvement, remodel, modification, alteration, conversion or adjustment to existing buildings, structures, processes, machinery and equipment. The Property Installation Floater shall provide property damage coverage for any building, structure, machinery or equipment damaged, impaired, broken or destroyed during the performance of the Work, including during transit, installation and testing at the City of Richmond’s site.
The City of Richmond shall be named as loss payee as its interest may appear. The insurer shall waive all rights of subrogation against City.
Contractor’s Pollution Liability (if
applicable)
Protects against:
unexpected/unintended release of
pollution resulting from contractors
covered operations such as:
HVAC, paving, carpentry, pipeline
& tank installation, drillers,
remediation contractors,
maintenance, mechanical,
demolition, excavation, grading,
street/road construction,
residential & commercial builders.
Same limits as General Liability.
Required Policy Conditions
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.
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 but not limited to 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. 860
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 3 of 4
Revised: September 2011
Additional Insured Endorsement
(continued)
SAMPLE Endorsements 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.
Waiver of Subrogation
Endorsement Form
Contractor’s insurer will provide a Waiver of Subrogation in favor of the City for Workers Compensation and Builder’s Risk/ Course of Construction coverage during the life of this contract.
SAMPLE Endorsements can be found at
http://www.ci.richmond.ca.us/index.aspx?nid=61
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.
Loss Payable Endorsement (only
required when Builder’s Risk
and/or Course of Construction
Insurance is required.)
Applicable to Builder’s Risk/Course of Construction naming the City of Richmond as Loss Payee.
SURETY BONDS
(If a Public Works/Engineering
Project)
The Contractor shall provide:
1. A Bid bond
2. A Performance Bond
3. A Payment Bond
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.
Claims-Made Policies
If any insurance policy is written on a claims-made form: 1) the retroactive date must be shown, and must be before the date of the contract or the beginning of contract work. 2) Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of the contract of work. 3) If coverage is canceled or non- renewed, and not replaced with another claims-made policy form with a retroactive date prior to the contract effective date, the Contractor must purchase an extended period coverage for a minimum of five (5) years after completion of contract work.
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.
861
___ Exhibit F
___ Section 8
City of Richmond - Insurance Requirements – Type 1:
Consultants and Contractors
Type 1 – Page 4 of 4
Revised: September 2011
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.
862
CITY OF RICHMOND
Sanctuary City Compliance Statement
The undersigned, an authorized agent of (hereafter
"Contractor"), has had an opportunity to review the requirements of City of Richmond Ordinance 12 -18 (hereafter "Sanctuary City Contracting Ordinance" or “SCCO”). Con tractor understands and agrees that the City may choose with whom it will maintain business relations and may refrain from contracting 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”). Con tractor understands the meaning of the following terms used in the SCCO:
a. "Data Broker” means either of the following:
i. The collection of information, including personal information about consumers, from a wide variety of sources for the purposes of reselling such information to their customers, which include both private-sector business and government agencies; ii. The aggregation of data that was collected for another purpose from that for which it is ultimately used.
b. “Ex treme Vetting” means data mining, threat modeling, predictive risk analysis, or other similar services."
Contractor understands that it is not eligible to receive or retain a City contract if at the time the Contract is executed, or at any time during the term of the Contract, it provides Data Broker or Extreme Vetting services to ICE.
Contractor further understands and agrees that Contractor's failure to comply with the SCCO shall constitute a material default of the Contract and the City Manager may terminate the Contract and bar Contractor from bidding on future contracts with the City for five (5) years from the effective date of the contract termination.
By executing this Statement, Contractor certifies that it complies with the requirements of the SCCO and that if any time during the term of the Contract it ceases to comply, Contractor will promptly notify the City Manager in writing. Any person or en tity who knowingly or willingly supplies false information in violation of the SCCO shall be guilty of a misdemeanor and up to a $1,000 fine.
Based on the foregoing, the undersigned declares under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Execu ted this d ay of , 20 , at , California.
Printed Name: Title:
Signed: Date:
Business Entity:
Vendor SCCO Compliance Statement (Augt2020)
EXHIBIT G
SPECIAL CONDITIONS
For the Contract between the City of
Richmond and
863
County of Placer
Procurement Services Division
2964 Richardson Drive
Auburn, CA 95603
Phone (530) 886-2122
Supplier Contract
Contract Number SCN106312
Contract Reference 97
Contract Start Date 10/01/2023
Contract End Date 09/30/2024
Buyer Javier Terrazas
Phone Number +1 (530) 889.4252 x4252
Email [email protected]
1 Supplier:
STOMMEL INC
dba LEHR
631 N MARKET BLVD STE N
SACRAMENTO, CA 95834
This Supplier Contract shall be governed by the attached terms and conditions.
Please reference the Supplier Contract number above on all invoices and correspondence related to this order.
Summary:
Emergency Response Vehicle Supplies/Equipment and Installation Services Vendor Contact: Steve Adair, Ph. #No. 916-267-5547, Email: [email protected] County Contacts:
Probation Dept. Contact (Orders and Accounting): Chris Artim, Ph. #530-889-7912, Email: [email protected] Placer County Sheriff Contact: Matt Burgans, Ph. #530-889-7865 Sheriff Accounting: Lisa Lentz, Ph. #530-889-6919, [email protected] Placer County Fire: Sarah Poindexter, Ph. #530-889-4037 Placer County Fire Accounting: Glenn Nishimoto, Ph. #530-886-4623, [email protected] Renewal of SCN105300
This renewal was approved by the Board of Supervisors on July 25, 2023.
Payment Terms Total Contract Amount
NET 30 375,000.00
Service Lines
Line Number Description Start Date End Date Amount
1 Emergency response vehicle equipment and supplies as well as equipment installation services in accordance with the vendor's agreement to renew SCN105300 - see attached for pricing, terms, and conditions and discounts.
10/01/2023 09/30/2024 375,000.00
864
631 North Market Street Suite N, Sacramento Ca 95834 Labor Price Increase Notice
Due to wage pressure for technicians our labor rate has increased to $125.00 per hour Effective :
October 1, 2023
October 1, 2023
To Our Valued Customers,
Due to the State of California increasing wage pressure and industry changes our new Labor Rate will need to increase from $115.00 per hour to $125.00 per hour. We understand that this is almost a 10% increase from the previous year.
Lehr provides specialized labor for the fabrication of first responder vehicles.
Historically we have only taken two labor increases in 15 years. Wages have increased annually to allow Lehr to continue to employ certified and qualified technicians. To ensure that Lehr provides the best emergency equipment installations in the industry this increase was implemented.
If you have any questions regarding the labor increase, please reach out to:
Steve Adair
Lehr
Regional Sales Manager
631 North Market St. Suite N
Sacramento, CA 95834
Cell 916.267.5547
Fax: 916.646.6656
[email protected]
865
Additional Emergency Equipment Manufatures Discounts
Manufacture Discount of List Price
AFS 40%
Ace K‐9 2%
AEDEC 2%
American Aluminum 25%
Airgain 15%
BackRack 15%
Big Sky 10%
Brooking 20%
CHEETAH 13.33%
Copeland 15%
D&R 10%
ECCO 40%
GORhino 25%
Hint 15%
I‐Key 23%
Intermotive 10%
Jotto Desk 12%
Kussmaul 5%
Lind 2%
Lund 5%
MnStar 10%
Newmar 5%
Panorama 5%
Patrol Power 20%
Pico 35%
Pro‐Gard 20%
Ram Mounts 15%
Stico 2%
Stopstick 5%
Streamlight 30%
Secure‐Idle 5%
TigerTough 5%
Tomar 23%
Trucklite 67%
Tuffy 20%
Unity 38%
Weatherguard 10%
Westin 20%
Xantrex 20%
Panasonic Toughbooks 12%
Panasonic ICV 12%
Vigilant ALPR 12%
CradlePoint 5%
Sierra Wirless 5%
Ubiquity 2%
Fixed PODS 10%
866
Procurement Services Division
2964 Richardson Drive ▪ Auburn, CA 95603
(530) 886-2122
20000 - Emergency Response Vehicle Equipment and Installation Services Opening Date: July 30, 2019 4:45 PM
Closing Date: August 13, 2019 3:00 PM
To ensure a complete and timely response, it is strongly recommended that you submit your bid response via our Online Bidding System.
However, if you have difficult submitting your bid online or prefer to submit your bid manually (hard-copy) for any reason, print and complete this bid package along with any required bid documents, and mail or deliver in a sealed envelope to:
Placer County Procurement Services Division
2964 Richardson Drive
Auburn, CA 95603
All bids must be submitted on original documents (no fax bids) prior to the Closing Date and Time specified above and as prescribed in this bid's General Terms and Conditions. All bids must be signed by an authorized representative of the firm. UNSIGNED OR LATE BIDS WILL BE REJECTED.
Vendors shall complete the area below for hard copy submissions:
COMPANY NAME: ____________________________________________________ Mailing Address: ____________________________________________________ City/State/Zip: ____________________________________________________ Contact Person: ____________________________________________________ Telephone: ____________________________________________________ Email: ____________________________________________________ SIGNATURE: ____________________________________________________ DATE: ____________________________________________________ Title: ____________________________________________________ By signature above, bidder hereby agrees to and accepts the terms, conditions and requirements specified in this bid, including the following bid documents and all related addenda (if any).
Vendor Details
867
Company Name: Stommel Inc
Does your company conduct business
under any other name? If yes, please
state:
Lehr Auto Electric
Address:
4707 Northgate Blvd
Sacramento, CA 95834-1120
Contact: Steve Adair
Email: [email protected]
Phone: 916-267-5547
Fax: 916-646-6656
HST#: 61-1499917
Submission Details
Created On: Thursday August 08, 2019 16:23:20
Submitted On: Tuesday August 13, 2019 11:55:35
Submitted By: Steve Adair
Email: [email protected]
Transaction #: bf9e4edd-1317-482f-9d85-05e42711727e
Submitter's IP Address: 207.242.136.194
868
Schedule of Prices
BID PRICING WORKSHEET - Category 1
ITEM NO. DESCRIPTION UOM EST. ANNUAL
USAGE
MANUFACTURE
R
MANUFACTURERS
PART NUMBER UNIT PRICE * EXT PRICE
PRODUCT
WARRANTY
INFORMATION
(state number
of months and
any special
terms or
provisions that
may apply)
COMMENTS
1.1 Lightbar with the following
options/modifications: Add (2) LR11
Flashing Alley Lights, LED
(SRALF1); Add (2) 500 Series
inboard LED, one red and one blue
(SLDBR); Add (2) 500 Series
inboard LED, one red and one blue
(SLDBR); Add (2) TIR high output
LED take downs, flashing or steady
(SXTDLED); and Add (2) 500
Series inboard LED, amber/amber
(SLDAA).
EA 15 Whelen LFL
Liberty SW
WeCan Series
Super-LED 54"
Lightbar
SW2RRBB $1,750.0000 $ 26,250.00 60 Whelen Master
Distributor
*
1.2 Strap Kit for LFL Liberty SW
WeCan Series Super-LED 54"
Lightbar. Strap Kit shall be
compatible with Chevrolet Tahoe
Police SUVs.
EA 15 Whelen
Engineering
STPKT71 $57.0000 $ 855.00 60 Whelen Master
Distributor
*
1.3 CenCom Sapphire Siren with
amplifier control module with pigtails,
traffic advisor module, and
microphone with CCMICX20 included
(20' microphone cable).
EA 15 Whelen
Engineering
CCSRN3
$749.00 $ 60 Whelen Master
Distributor
*
1.4 PB400 Full Aluminum Push
Bumpers. Push bumpers shall be
compatible with 2015 to current
model year Chevrolet Tahoe Police
SUVs.
EA 15 Setina
Manufacturing
Bodyguard
PB400
BK0534TAH15 $319.2000 $ 4,788.00 60 Setina Master
Distributor
*
1.5 Patrol Car Seat, black, with Laguna
Seat Belts and Rear Cargo Cage.
Patrol car seat shall be compatible
with 2011 to current model year
Chevrolet Tahoe Police SUVs.
EA 15 Laguna 3P
Products
CT5502 $1,084.0000 $ 16,260.00 60 Laguna
distributor
*
1.6 Stationary Vinyl Coated Partition
with Full Lower Extension Panel.
The partition shall be compatible
with 2015 to current model year
Chevrolet Tahoe Police SUVs.
EA 15 Setina
Manufacturing 8-
VS Series
PK0369TAH10SCA $599.2500 $ 8,988.75 60 correct Part
Number
PK0369TAH15S
CA
*
1.7 Shotgun Gun Lock EA 15 Santa Cruz SC-1H $77.0400 $ 1,155.60 12 #2 Key *
1.8 Ratchet Lock Gen. 2 EA 15 Santa Cruz SC-6H
$131.64 12 #2 Key *
1.9 Muzzle Up Partition Mount EA 30 Santa Cruz SC-915P $69.9900 $ 2,099.70 12 Authorized Distributor *
1.10 Siren Speaker EA 15 Whelen SA315P $199.99 24 Authorized Distributor *
1.11 Speaker Bracket Kit for Whelen
SA315P Speaker
EA 15 Whelen SAK1
$29.40 $ 60 Authorized
Distributor *
1.12 Plug In Headlight Flasher for 2015
to current model year Chevrolet
Tahoe Police SUVs
EA 15 SoundOff ETHTAHO-07 $65.7200 $ 985.80 60 Authorized Distributor *
1.13 Vertex Super-LED Light, Single Self-
Contained Hemispheric Light,
Color: BLUE
EA 45 Whelen VTX609B
$84.99 $ 60 Authorized
Distributor *
1.14 Vertex Super-LED Light, Single Self-
Contained Hemispheric Light,
Color: RED
EA 45 Whelen VTX609R
$84.99 $ 60 Authorized
Distributor *
1.15 Vertex Super-LED Light, Single Self-
Contained Hemispheric Light,
Color: CLEAR
EA 45 Whelen VTX609J
$$84.99 $ 60 Authorized
Distributor *
1.16 LIN3 Series Super-LED Lighthead,
Horizontal Mounting, Color: BLUE
EA 15 Whelen RSB02ZCR
$$66.60 $ 60 Authorized
Distributor *
1.17 LIN3 Series Super-LED Lighthead,
Horizontal Mounting, Color: RED
EA 15 Whelen RSR02ZCR
$66.60 $ 60 Authorized
Distributor *
1.18 Mounting Bracket for LIN3 Series
Super-LED Lighthead (Horizontal
Mounting)
EA 30 Whelen RBKT1
$10.80 $ 60 Authorized
Distributor *
869
1.19 PAR46 LED Flood - Spotlight EA 25 Whelen
Engineering
P46FLC $154.99 $ 60 Authorized
Distributor *
1.20 PAR46 LED Spot - Spotlight EA 25 Whelen
Engineering
P46SLC
$154.99 $ 60 Authorized
Distributor *
1.21 Magnetic Mic Kit EA 25 Whelen
Engineering
MMSU-1 $34.9500 $ 873.75 12 Authorized
Distributor *
1.22 Blac-Rac Weapon Mount EA 20 Blac-Rac 1082E
$861.75 $ 12 Authorized
Distributor *
1.23 Chargeguard-Select Auto Shut-Off
Timer
EA 15 Havis Inc. CG-X $71.3800 $ 1,070.70 36 Authorized Distributor *
1.24 Littlite 12" Gooseneck Lamp with
Rehostat Control, Gooseneck
Extends From End of Chassis, Lead
Extends From Bottom of Chassis.
EA 15 Federal Signal LF12ERB $57.7500 $ 866.25 60 Authorized Distributor *
1.25 Patrol Vehicle "Placer" Console,
consisting of the following
components:Arm Rest w/2"
Extension - Lehr Auto Electric
Model# PARM002Tall, Arm Rest
Pad - Lehr Auto Electric Model#
PARP, XTL2500 3" Faceplate -
Troy Products Model#FP-MXTL5000,
Cencom 4" Faceplate - Troy
Products Model#FP-WC10285909,
1" Blank - Troy Products Model# FP-
BLNK1, 2" Blank - Troy Products
Model# FP-BLNK2, 4" Beverage
Holder - Troy Products Model#
EA 12 Lehr Auto
Electric
PCC001 $1,142.0000 $ 13,704.00 60 Authorized
Distributor
*
1.26 Mount Kit EA
1 Troy Products AC-EXP03 $117.1800 $ 117.18 60 limited Lifetime *
1.27 Speaker EA 1 Code 3 C3100ENO7 $178.3800 $ 178.38 24 Authorized Distributor *
1.28 12" Litlite Console Light EA 1 Feederal Signal LF12TRB $66.95 60 Authorized Distributor *
1.29 3 Accessory Outlet EA 2 Able2 Shoe-Me 14.0553 $21.9500 $ 43.90 24 Authorized Distributor *
1.30 Dual Stacked LED X Light EA 2 Code 3 LXEX2F-RR $411.10 $ 60 Authorized Distributor *
1.31 Wig-Wag EA 1 Sound Off LAROOBK $42.6000 $ 42.60 60 Authorized Distributor *
1.32 Double Beam Halogen Work Lamp
12V
EA
2 Hella 006991663 AS 115 $41.8200 $ 83.64 12 Authorized Distributor *
1.33 LED Strip Light EA 1 Whelen PSC0CDCR $ 112.20 $ 60 Authorized Distributor *
1.34 2007-2010 Ford Expedition Base EA 1 Gamber Johnson 7160-446- $113.4000 $ 113.40 60 Part Number 7160-0046 *
1.35 Mongoose 9" Locking Slide Arm w/o
Standard Attachment
EA
1 Gamber Johnson 7160-0219 $247.8000 $ 247.80 60 Part has been discontinued
replacement
quoted 7160-
0220
*
1.36 Tlt Swivel Attachment EA
1 Gamber Johnson DS-CLEVIS $56.0000 $ 56.00 60 Discontinued part -
replacement
quoted 7110-
1008
*
1.37 Radio Ray Wireless Spot Light EA
1 GoLight 7900 $244.1100 $ 244.11 36 Limited 3yr
warranty *
1.38 18" Console EA 1 Troy Products CC-MC18 384.48 $ 60 Authorized Distributor *
Subtotal: $ 124,020.15
870
871
Bid Questions
Delivery Time: Bidders shall indicate their delivery time (after an order is received) for items specified in this bid without installation services in the space provided. Indicate your Delivery Time in Days
Delivery time 2-21 days. (In stock items 1-2 days, Items needed to be ordered up to 3 weeks however we stock many of your every day items.)
Turnaround Time: Bidders shall indicate their normal
turnaround time for a fully installed emergency vehicle in the space provided. Indicate your Turnaround Time in
Days
3-5 business days
**Note: If installation service is needed on behalf of Placer County Fire Department, the County intends to deliver and pick up the vehicles at the successful firm's location. As an option, Placer County Fire may require the successful firm to pick up and/or deliver a vehicle. Bidder shall provide rates for pick up and delivery service to be charged one- way, from vendor's shop to Placer County Fire facility
only.**
$65 per hour based on Map Quest travel time 35 minutes travel time Travel Rate: Bidders shall provide rates for pick up and delivery service to be charges one-way, from the vendor's shop to the Placer County Fire Department address:
13760 Lincoln Way Auburn, CA 95603. Indicate your travel rate
$65 per hour based on Map Quest travel time 35 minutes travel time Travel Time: Bidders shall provide rates for pick up and delivery service to be charges one-way, from the vendor's shop to the Placer County Fire Department address:
13760 Lincoln Way Auburn, CA 95603. Indicate your
Travel Time
$65 per hour based on Map Quest travel time 35 minutes travel time Documents
Upload additional information here - optional, unless otherwise denoted as mandatory (with asterisk):
Additional Document - Additional Discounts.xlsx - Tuesday August 13, 2019 11:36:56 872
Attachment A
Bid No. 20000
COUNTY OF PLACER
EMERGENCY RESPONSE VEHICLE EQUIPMENT AND INSTALLATION SERVICES
SUPPLEMENTAL TERMS AND CONDITIONS
1. DOCUMENTS
Below are the documents associated with this bid.
Attachment A – Supplemental Terms and Conditions
Attachment B – Scope of Work
Attachment C – Insurance Requirements
Attachment D – Lightbar Configuration (Patrol Vehicle)
2. OVERVIEW
Placer County is soliciting bids for the purchase and installation of emergency response vehicle equipment & related supplies for the Placer County sheriff’s Office and Placer County Fire Department. Placer County intends to award a supplier contract for the purchase emergency response vehicle equipment and installation services on an as-needed basis. The items, quantities, sample jobs, services, and occurrences listed in this bid represent the County’s estimated annual requirements and will be utilized for evaluation purposes only. The County does not guarantee any minimum or maximum quantities that will be purchased or minimum or maximum dollar amounts to be spent throughout the term of the resulting agreement(s). Please note that the County requires NEW PRODUCT ONLY – No refurbished, demo, or restored products will be accepted unless specifically authorized by County staff.
3. PRICING
Responding bidders shall indicate their hourly shop rate for the services described herein as well as provide firm, fixed prices and discounts off list prices for the emergency response vehicle equipment and supplies listed in this bid for the initial contract period of approximately one year from the date this bid is awarded. Pricing offered in the bid line items herein shall be for services provided during the successful firm’s normal business hours. Overtime will not be required. The bidder’s shop labor rate per hour offered herein shall apply to all vehicle and equipment makes, models, and types.
The prices offered by bidders shall be exclusive of sales tax (applicable sales tax shall be added to the County’s invoices). The discounts offered by bidders for the brands listed in this solicitation shall be calculated and billed in addition to any invoice terms that are offered.
All rates shall be billed in accordance with the bidders offered pricing. The County will not accept or pay any premiums, administrative surcharge costs, or any other surcharges that are not identified in the bidder’s response. Charges imposed by the State of California or Federal Government after the bid has been awarded will be honored.
873
Attachment A
Bid No. 20000
4. AWARD
4.1. This bid shall be evaluated and awarded by an all-or-none basis. The bid evaluation will consider the total cost to install the Sheriff’s Office patrol vehicle equipment into a typical Chevrolet Tahoe 4x2 and 4x4 for items 1.1 through 1.25 and a Ford Expedition for the Placer County Fire Department for items 1.26 through 1.38 for evaluation purposes. This cost will be determined by multiplying the firm’s shop labor rate by the total estimated time to install the equipment, as determined by the County. The estimated installation time will be 18 hours of labor for evaluation purposes only. Local Vendor Preference (if applicable), prompt payment discounts, optional pick up/delivery rates, travel time, travel time rate, turnaround time, and adherence to all conditions and requirements of this bid will also be considered.
Bidders are not required to bid on all categories to be considered for award however Placer County reserves the right to award the bid based on pricing offered for the most categories.
4.2. An example of a typical Chevrolet Tahoe patrol vehicle installation includes the following equipment (manufacturer or supplier is shown in parenthesis – no substitutions):
Light Bar System (Whelen/Cencom)
Headlight Flasher (Soundoff)
Siren Speaker and Bracket (Whelen)
Maplight (Little Lite)
Radio Mounting Console (Lehr)
Cage (Setina)
Gun Locks – 2 per vehicle (Santa Cruz)
Push Bumper (Setina)
All emergency equipment, dome light, and spotlight are require d to be wired to an auxiliary power source in the rear of the vehicle. All power should be timed and disconnected as to protect the vehicle from a dead battery.
4.3. Other public agencies may elect to “piggyback” on the County’s resulting agreement(s). It will be the responsibility of the other agencies to execute separate contracts with the successful bidder(s) at the same bid pricing (refer to this Bid’s General Terms and Conditions, Section 22) through the end of the initial contract period. Any subsequent renewal pricing and terms successfully negotiated between Placer County and the successful bidder(s) would be made available to those other agencies.
5. DELIVERY REQUIREMENTS
5.1. Bidder’s pricing for equipment and supplies shall be FOB Destination, freight prepaid and assumed by the successful bidder, inside delivery to the following address:
Placer County Sheriff’s Office
2929 Richardson Drive, Ste. A
Auburn, CA 95603
Placer County Fire Department
13760 Lincoln Way
Auburn, CA 95603
874
Attachment A
Bid No. 20000
5.2. The successful bidder shall deliver regular orders within five (5) business days of order placement for the complete order (no partial deliveries will be allowed unless specifically approved by County staff at the time the order is placed). There will also be occasions where the County will need to place an emergency order, which shall be defined as items which are so urgently needed that they must be delivered within forty-eight (48) hours of placing the order or items that are not available from the vendor’s normal inventory. In these instances actual freight charges will be allowed with written approval from the County employee placing the order. All freight charges shall be prepaid by the vendor and added to the resulting invoice. Freight collect charges will not be allowed. The vendor shall clearly advise County personnel of such emergency order circumstances for authorization at the time the order is placed with the vendor.
5.3. If the County’s orders are not delivered within the delivery times specified herein, the County reserves the right to cancel the order and obtain the products from another source. In the event that the County must make such open market purchases, the County reserves the right to exercise the provisions of Section 17 of this bid’s General Terms and Conditions.
Continued non-compliance with the stated delivery times may be cause for cancellation of the resulting agreement.
6. PRICE LISTS
Placer County requests that the successful bidder provide pric e lists upon award of the resulting agreement for each of the manufacturer discounts offered in the successful bidder’s completed Bid Pricing Worksheet. The County will accept electronic versions of the price lists if hard copies are not available (e.g. CD’s, flash drives, etc.). These lists will be used to verify the discount pricing on the resulting invoices. All price lists shall be provided free of charge to the County. The County also prefers that the successful bidder(s) state the manufacturer’s list price, the bidder’s offered discount off list price, and the net price for each part purchased on the resulting invoices. The successful bidder shall be responsible for notifying the Placer County Sheriff’s Office primary contact as well as the Procurement Services Division of any changes or updates to the bidder’s/manufacturer’s published catalog/list prices that occur during the contract period.
7. INSURANCE REQUIREMENTS
The successful bidder shall be required to furnish a certificate of insurance within ten (10) calendar days following receipt of a Notice of Award demonstrating proof of coverage in the amounts specified in Attachment C, Insurance Requirements.
8. SUBCONTRACTING
The successful bidder shall not subcontract any portion of the work to be performed under the resulting agreement.
9. EQUIVALENT/ALTERNATE OFFERS
Due to the standardization of the County’s emergency response vehicle equipment including the County’s inventory of repair/replacement parts as well as staff training issues, bids will only be accepted for the brand and model emergency response vehicle equipment and supplies specified in the Bid Worksheet.
875
Attachment A
Bid No. 20000
10. SERVICE STANDARDS
The successful bidder shall provide all necessary personnel, tools, parts, materials, and equipment to perform the services described herein. The successful bidder shall perform all work in such a manner as to meet all accepted standards for safe practices for emergency response vehicle equipment installation services and to safely maintain stored equipment or other hazards consequential or related to the work. The successful bidder agrees to accept the sole responsibility for complying with all local, County, State or other legal requirements at all times including, but not limited to, O.S.H.A. and CAL. O.S.H.A. Safety Orders. The successful bidder must meet all EPA standards as well as all Federal, State, and Local laws, standards, and regulatory and permitting requirements while performing services on behalf of Placer County.
11. WORKMANSHIP
All services shall be performed in accordance with the highest standards prevailing in the trades. All of the successful bidder’s employees shall be especially skilled and appropriately trained and certified for the kind of work for which they are employed. Should the successful bidder’s Manager and/or Placer County staff deem anyone employed by the successful bidder incapable of completing the work required, the successful bidder shall immediately dismiss the employee from performing services on behalf of the County. Such removal shall not be considered a basis for employee’s claim for compensation or damages against the County, or any of its officers or agents. 876
Attachment B
Bid No. 20000
COUNTY OF PLACER
EMERGENCY RESPONSE VEHICLE EQUIPMENT AND INSTALLATION SERVICES
SCOPE OF WORK
1.0 The successful bidder shall be regularly established in the business of routine emergency vehicle lighting and equipment installation services on a variety of patrol vehicles, light trucks, and fire trucks. Responding firms shall have staff experienced in the installation of law enforcement and fire department radios, “Code 3” emergency equipment, prisoner partitions, mounting consoles, trunk racks, cages and gun locks at a minimum.
2.0 The successful bidder shall be qualified and capable of performing equipment installation services on various types of emergency response vehicles and equipment including, but not limited to, law enforcement sedans, sport utility vehicles, trucks, undercover vehicles, trailers, off-highway vehicles, and boats, including Type I and Type II engines.
3.0 Time is of the essence in returning County vehicles to service. The successful bidder agrees that work performed under the resulting agreement shall receive top priority over other work in the successful bidder’s shop. If the County determines that the workload of the successful bidder is such that timeliness is not possible in a given situation, the County reserves the right to assign the job to another vendor.
4.0 In the event that the successful bidder is unable to respond or complete the requested services within the bidder’s stated turnaround time, the successful bidder shall notify the County designated contact person immediately prior to commencing work. The County at its sole discretion may elect to utilize the services of another vendor in such instances and will notify the successful bidder if such intention is to be exercised.
5.0 The successful bidder agrees that the County has the right to view any work performed on a County vehicle at the successful bidder’s facility at any time, whether or not services have been completed. The successful bidder agrees that the County has the right to audit any work performed by the successful bidder.
6.0 The successful bidder warrants the goods furnished to be of the highest quality, complying with the specifications and free from all defects whatsoever in workmanship and materials, for a minimum period of one year from the date of delivery. Replacements and repairs under this warranty are to be made by the successful bidder at no cost and to the satisfaction of the County. Equipment installations shall be guaranteed for as long as the County owns/possesses the vehicle.
7.0 The successful bidder agrees that the County has the right to make the final determination as to whether services have been satisfactorily completed. The successful bidder shall include County staff on a walk-through of the vehicle to confirm that all equipment is installed and functioning correctly and testing the equipment prior to the County's acceptance of the work as being completed. Should any portion of the work to be done which, due to any cause, is not in accordance with the specifications or is not satisfactorily completed, it will be rejected and the successful bidder shall immediately make a satisfactory arrangement with the County before proceeding with other work. The successful bidder shall promptly correct all work rejected by the County as faulty, defective, or failing to conform to the product specifications or scope of 877
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work defined herein, whether observed before or after substantial completion of the work and whether or not inspected, tested, repaired, fabricated, installed, or completed. The successful bidder shall bear all costs of correcting such rejected work. This provision applies during the contract term and any resulting renewal periods.
8.0 The successful bidder shall be held responsible for any breakage or loss of the County’s vehicles or equipment while performing service on the County’s vehicles. The successful bidder shall be responsible for restoring or replacing any equipment, vehicle, etc. so damaged to the satisfaction of the County and at the sole expense of the successful bidder. The successful bidder shall immediately report to the County any damages to the vehicle or equipment resulting from services performed under the resulting agreement.
9.0 The successful bidder, at the County’s request, shall provide a field representative to meet with County personnel at least once a month to review the department's inventory levels, discuss the department's emergency lighting and equipment requirements and introduce additional products to address any County needs. The successful bidder shall also have technical staff available to conduct scheduled on-site meetings at the County’s request. The successful bidder shall provide inside sales support capable of providing product specification sheets, quotations, order placement and expediting, via fax and telephone at the County’s request.
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Attachment C
Bid No. 20000
PLACER COUNTY INSURANCE REQUIREMENTS
1. HOLD HARMLESS AND INDEMNIFICATION AGREEMENT
The CONTRACTOR shall save, keep, hold harmless, defend, and in demnify PLACER COUNTY from all damages, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of or in the course of performing work which may be occasioned by any willful or negligent act or omissions of the CONTRACTOR, any of the CONTRACTOR'S employees, o r a n y subcontractors.
The CONTRACTOR shall be responsible for any liability imposed by law and for death, injury, or damage to property of any person including, but not limited to, workmen, subcontractors, and the public, resulting from any cause whatsoever during the progress of the work or at any time before its completion and final acceptance.
If any judgment is rendered against PLACER COUNTY for any inju ry, death, or damage caused by CONTRACTOR as a result of work performed or completed , pursuant to this agreement, CONTRACTOR shall, at its own expense, satisfy and discharge any judgment.
As used above, the term PLACER COUNTY means PLACER COUNTY, its o f f i c e r s , agents, employees, and volunteers.
2. INSURANCE:
CONTRACTOR shall file with the COUNTY concurrently herewith a Certificate of Insurance, in companies acceptable to COUNTY, with a Best's Rat ing of no less than A- :VII showing.
3. WORKER'S COMPENSATION AND E MPLOYERS LIABILITY INSURANCE:
Worker's Compensation Insurance shall be provided as required by a ny ap p lica b le law o r regulation. Employer's liability insurance shall be provided i n amounts not less than one million dollars ($1,000,000) each accident for bodily injury by accident, one million dollars ($1,000,000) policy limit for bodily injury by disease, and one million dollars ($1,000,000) each employee for bodily injury by disease.
If there is an exposure of injury to PROVIDER'S employees unde r the U.S. Longshoremen's and Harbor Worker's Compensation A c t , t h e J o n e s A c t , o r u n d e r laws, regulations, or 879
Attachment C
Bid No. 20000
statutes applicable to maritime employees, coverage shall be in cluded for such injuries or claims.
Each Worker's Compensation po licy shall be endorsed with the following specific language:
Cancellation Notice - “This polic y shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to the County of Placer.”
Waiver of Subrogation - The workers’ compensation policy shall be endorsed to state that the workers’ compensation carrier waives its right of subrogati on against the County, its officers, directors, officials, employees, agents or volunteers, which might arise by reason of payment under such policy in connection with performance under this agreement by the CONSULTANT.
CONTRACTOR shall require all SU BCONTRACTORS to maintain adequa te Workers' Compensation insurance. Certificates of Workers' Compensation shall be filed forthwith with the County upon demand.
4. GENERAL LIABILITY INSURANCE:
A. Comprehensive General Liab ility or Commercial General Liabi lity insurance covering all operations by or on behalf of CONTRACTOR, providing insurance for bodily injury liability and prop erty damage liability for the l imits of liability indicated below and including coverage for:
(1) Products and completed operations;
(2) Contractual liability insuring the obligations assumed by CONTRACTOR in this Agreement; and
(3) Broad form property damage (including completed operations)
Except with respect to bodily injury and property damage incl uded within the products and completed operations hazards, the aggregate limits, where applicable, shall apply separately to CONTRACTOR'S work under the Contract.
B. One of the following forms is required:
(1) Comprehensive General Liability;
(2) Commercial General Liability (Occurrence); or
(3) Commercial General Liability (Claims Made).
C. If CONTRACTOR carries a Com prehensive General Liability policy, the limits of liability shall not be less than a Combined Single Limit for bodily injury, property damage, and Personal Injury Liability of:
One million dollars ($1,000,000) each occurrence
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Attachment C
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Two million dollars ($2,000,000) aggregate
D. If CONTRACTOR carries a Com mercial General Liability (Occurrence) policy:
(1) The limits of liability shall not be less than:
One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
One million dollars ($1,000,000) for Products Completed Operations Two million dollars ($2,000,000) General Aggregate
(2) If the policy does not have an endorsement providing that t h e G e n e r a l Aggregate Limit applies separately, or if defense costs are inc luded in the aggregate limits, then the required aggregate limits shall be t wo million dollars ($2,000,000).
E. Special Claims Made Policy Form Provisions:
CONTRACTOR shall not provide a Commercial General Liability (Claims Made) policy without the express prio r written consent of COUNTY, whi ch consent, if given, shall be subject to the following conditions:
(1) The limits of liability shall not be less than:
One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage)
One million dollars ($1 ,000,000) aggregate fo r Products Complet ed Operations
Two million dollars ($2,000,000) General Aggregate
(2) The insurance coverage provided by CONTRACTOR shall conta in language providing coverage up to one (1) year following the completion of the contract in order to provide insurance coverage for the hold ha rmless provisions herein if the policy is a claims-made policy.
Conformity of Coverages - If more than one policy is used to meet the required coverages, such as a separate umbrella policy, such policies shall be consistent with all other applicable policies used to meet these minimum requirements. For example, all policies shall be Occurrence Liability policies or all shall be Claims Made Liability policies, if approved by the County as noted above. In no cases shall the types of polices be different.
5. ENDORSEMENTS:
Each Comprehensive or Commerc ial General Liability policy shal l be endorsed with the following specific language:
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Attachment C
Bid No. 20000
A. "The County of Placer, its officers, agents, employees, and volunteers are to be covered as an additional insured for all liability arising out of the operations by or on behalf of the named insured in the performance of this Agreement."
B. "The insurance provided by the Contractor, including any ex cess liability or umbrella form coverage, is primary coverage to the County of Placer with respect to any insurance or self-insurance programs maintained by the County of Placer and no insurance held or owned by the County of Placer shall be called upon to contribute to a loss."
C. “This policy shall not be cha nged without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation f or non-payment of premium to the County of Placer.”
6. AUTOMOBILE LIAB ILITY INSURANCE:
Automobile Liability insurance co vering bodily injury and property damage in an amount no less than one million dollars ($1,000,000) combined single limit for each occurrence.
Covered vehicles shall include owned, non-owned, and hired automobiles/trucks.
7. ADDITIONAL REQUIREMENTS:
Premium Payments - The insurance companies shall have no recourse against the COUNTY and funding agencies, its officers and employees or any of them for payment of any premiums or assessments under any policy issued by a mutual insurance company.
Policy Deductibles - The CONTRACTOR shall be responsible for all deductibles in all of the CONSULTANT’s insurance policies. The maximum amount of allowable deductible for insurance coverage required herein shall be $25,000.
CONTRACTOR’s Obligations - CONTRACTOR’s indemnity and other obligations shall not be limited by the foregoing insurance requirements and shall survive the expiration of this agreement.
Verification of Coverage - CONTRACTOR shall furnish the County with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by the County before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the CONTRACTOR’s obligation to provide them. The County reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time.
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Attachment C
Bid No. 20000
Material Breach - Failure of the CONTRACTOR to maintain the insurance required by this agreement, or to comply with any of the requirements of this section, shall constitute a material breach of the entire agreement.
Certificate Holder –Placer County subscribes to a service that monitors insurance certificates for compliance with the above requirements. The C ertificate Holder on insurance certificates and related documents should read as follows:
County of Placer
c/o EXIGIS LLC
PO Box 4668 ECM #35050
New York, NY 10168-4668
Fax: 888-355-3599
Email: [email protected]
Upon initial award of a contract to your firm, Exigis will cont act you with further instructions for providing insur ance certificates which meet th e terms of the contract.
Certificates which amend or alter the coverage during the term of the contract, including updated certificates due to policy renewal, should be sent dire ctly to Exigis via fax or email as indicated above.
***SOLE PROPRIETER LANGUAGE:
Workers’ Compensation
CONTRACTOR represents they have no employees and, therefore, not required to have Workers’ Compensation coverage.
CONTRACTOR agrees they have no rights, entitlements or claim against COUNTY for any type of employment benefits or workers’ compensation or other programs afforded to COUNTY employees.
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Terms & Conditions
INVITATION FOR BIDS
GENERAL TERMS AND CONDITIONS
The following provisions are hereby made a part of this Invitation for Bids ("bid") by reference and attachment to the Invitation for Bids document. Any contract award made as the result of this bid shall be governed by these General Terms and Conditions. By submission of a bid, bidder does agree if the bid is accepted within 90 calendar days from the date of opening, to furnish to furnish the product(s) and/or service(s) pursuant to these conditions. In the event of a contract award pursuant to this bid, performance by the successful bidder of any or all of the services, or delivery of any or all of the products defined herein, shall constitute acceptance of all terms, conditions and requirements of the resulting agreement.
WARNING: It is the bidder’s responsibility to monitor the County’s website for possible addenda to this bid to inform him/herself of the most current specifications, terms, and conditions (see also Section 4 below), and to submit his/her bid in accordance with the original bid requirements and all addenda. All available bids and related addenda can be found at: https://placer.bidsandtenders.net. Failure of bidder to obtain this information shall not relieve him/her of the requirements contained therein. Additionally, failure of bidder to respond to any addenda, when required, may be cause for rejection of his/her bid.
1. GENERAL. These provisions are standard for all County contracts. The County may delete or modify any of these standard provisions for a particular contract by indicating a change in the special instructions to bidders or in the bid. Any bidder accepting a contract award as the result of this bid agrees that the provisions included within this Invitation for Bid shall prevail over any conflicting provision within any standard form contract of the bidder.
2. SUBMISSION OF BIDS. Bids shall be submitted to the Procurement Services Division either online, by using the Placer County EBid System, or in hard-copy form (see below for instructions). All bids must be submitted prior to the date and time specified in this solicitation. Bids shall be submitted by an employee who is authorized to commit his/her firm or organization to the provisions of the bid. Any exceptions to the specifications, terms, or conditions of this solicitation shall be clearly indicated by bidder.
SUBMISSION OF HARD-COPY BIDS. Bidders who wish to submit bids in hard-copy form in lieu of using the Placer County EBid System shall submit their bids to the Procurement Services Division, 2964 Richardson Drive, Auburn, California, 95603, between the hours of 8:00 am and 5:00 PM (Pacific), Monday through Friday (excluding County holidays). Hard-copy bids shall be submitted in a sealed envelope which clearly identifies the bid number, commodity, and closing date and time. Bids shall be submitted on the bid forms provided by the County, which may be downloaded from the EBid System or obtained from Procurement Services. Hard-copy bids must be signed by an authorized employee of the firm. The County shall not be responsible for bids delivered to a person/location other than that specified herein. Bids shall be in ink or typewritten and all changes and/or erasures shall be initialed and dated in ink. Any exceptions to the specifications, terms, or conditions of this solicitation shall be clearly indicated by bidder, without obliterating the original text or images contained herein.
WARNING: Late bids or unsigned bids shall not be accepted under any circumstances. Facsimile or telephone bids shall not be accepted.
3. AMENDMENTS TO THE BID. Any amendment to this bid is valid only if in writing and issued by the Placer County Procurement Services Division.
REQUESTS FOR CLARIFICATION/INFORMATION. Bidders are instructed to contact the Placer County Buyer/Contact Person(s) specifically identified in this bid for further clarification or information related to the specifications, terms, conditions, or evaluation of this bid. Information provided by other than the named contact person may be invalid, and responses which are submitted in accordance with such information may be declared non-responsive. Additionally, contacts made with other County staff in an attempt to circumvent or interfere with the County’s standard bidding and evaluation practices may be grounds for disqualification of the bidder. Questions should be submitted using the Question tool on the Bids&Tenders site. Questions submitted within four (4) County working days of the bid opening date may not be answered.
4. NON-COLLUSION. The bidder certifies that his bid is made without any previous understanding, agreement or connection with any person, firm or corporation making a bid for the same project and is in all respects fair, without outside control, collusion, fraud or otherwise illegal action.
5. CONFLICT OF INTEREST. Bidder states that no County officer or employee, nor any business entity in which they have an interest, has an interest in the bid awarded or has been employed or retained to solicit or aid in the procuring of the resulting contract, nor will any such person be employed in the performance of such contract.
6. AWARD. The contract may be awarded to the lowest responsible and responsive bidder complying with the provisions of the Invitation for Bid. In determining whether a bid is lowest and responsive, and the bidder responsible, the following may be considered by the County: a) Ability to perform the service required within the specified time; b) Reputation, judgment and experience; c) The quality of performance in previous contracts; d) Previous compliance with laws, as well as employment practices; e) Financial ability to perform the contract; f) The quality, availability and adaptability of the supplies or the contractual services to the particular use required; g) Ability to provide maintenance and service; h) Whether the bidder is in arrears to the County, in debt on contract, is a defaulter on surety to the County or whether the bidder’s taxes or assessments are delinquent; i) The resale value and life cycle costs of the items; j) Such other information as identified in the Purchasing Policy Manual having bearing on the decision to make the award. The award analysis will also include consideration for Local Vendor Preference (per Section 18 below) and any prompt pay discounts offered by the bidder (per Section 19 below). The County reserves the right to reject any and all bids and to waive any informality in bids received whenever such rejection or waiver is in the interest of the County. The County also reserves the right to reject the bid of a bidder who has previously failed to perform properly. The County may award bids by line item, category, or on an all-or-none basis.
7. MERCHANTABILITY. There shall be an implied warranty of merchantability and fitness for an intended use. Any bid submittals taking exception to this requirement may, at the County’s option, be considered non-responsive.
8. SAMPLES. Samples of items, when required, must be furnished free of expense to Placer County and if not destroyed by tests will, upon request, be returned at bidder’s expense. Samples of selected items may be retained for comparison.
9. MANUFACTURER’S NAME AND APPROVED EQUIVALENTS. Unless otherwise specified, manufacturer’s names, trade names, brand names, information and/or catalog numbers listed in a specification are intended only to identify the quality level desired. They are not intended to limit competition. The bidder may offer any equivalent product, which meets or exceeds the specifications. If bids are based on equivalent products, the bids must: 1) Indicate on the bid form the alternate manufacturer’s name and catalog number; 2) Include complete descriptive literature and/or specifications; 3) Include proof that the proposed equivalent shall meet the specifications. The County reserves the right to be the sole judge of what is equal and acceptable. If bidder fails to name a substitute, goods identical to the bid standard must be furnished.
10. INSURANCE AND INDEMNIFICATION. The awarded bidder may be required to provide proof of liability, automobile, and/or workers compensation insurance. If required, the minimum coverage requirements will be identified in the bidding documents. All costs of complying with the insurance requirements shall be included in your pricing. The selected firm shall provide complete and valid insurance certificates within ten (10) days of the County’s written request. Failure to provide the documents within the time stated may result in the rejection of the bid response and/or cancellation of the resulting contract or purchase order.
Unless indemnification requirements are stated otherwise in this solicitation, said requirements shall be as follows: The awarded bidder ("Contractor") hereby agrees to protect, defend, indemnify, and hold Placer County free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character including, but not limited to the amounts of judgments, penalties, interest, court costs, legal fees, and all other expenses incurred by Placer County arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of the County) and without limitation by enumeration, all other claims or demands of every character occurring or any way incident to, in connection with or arising directly or indirectly out of, the contract or agreement. The Contractor agrees to investigate, handle, respond to, provide defense for, and defend any such claims, demand, or suit at the sole expense of the Contractor. Contractor also agrees to bear all other costs and expenses related thereto, even if the claim or claims alleged are groundless, false, or fraudulent. This provision is not intended to create any cause of action in favor of any third party against Contractor or the County or to enlarge in any way the Contractor’s liability but is intended solely to provide for indemnification of Placer County from liability for 885
damages or injuries to third persons or property arising from Contractor’s performance pursuant to the resulting contract or agreement.
11. FORCE MAJEURE. If an emergency or natural disaster causes delay or interferes with the use or delivery of the products/services described in this bid, deliveries may be suspended as long as needed to remove the cause or repair the damage. An emergency or natural disaster includes fire, flood, blizzard, strike, accident, consequences of foreign or domestic war, or any other cause beyond the control of the parties. The County reserves the right to acquire from other sources any products/services during any suspension of delivery.
12. TAXES. Placer County is exempt from Federal Excise Tax; an exemption certificate will be furnished upon request. Placer County is not exempt from California State sales/use taxes. All applicable State sales/use taxes will be added to the purchase order.
13. DELIVERY. All prices bid must be FOB Destination, unloaded inside and assembled unless otherwise indicated.
14. FIXED CONTRACT QUANTITIES. Purchase order(s) for full quantities will be issued to successful bidder(s) after notification of award and receipt of all required documents.
15. OPEN-END CONTRACT. No guarantee is expressed or implied as to the total quantity of commodities/services to be purchased under any open-end contract. Estimated quantities/bid ratio or discounts from manufacturer’s list price may be used for bid comparison. The County reserves the right to: issue purchase orders as and when required; or issue a contract for individual agencies or multiple County agencies; or any combination of the preceding. No delivery shall be made without a written order by the County, unless otherwise specifically provided for in the contract. If in a subsequent year the vendor offers to supply his goods and service for the same bid price, or in the event the supplier is willing to negotiate to the satisfaction of Placer County any justifiable price increase prior to the succeeding year’s contract renewal and if the service provided by the supplier was to the satisfaction of the County, the County of Placer reserves the right to extend the period of the resulting contract on a year-to-year basis. Alternatively, the bid solicitation may set forth specific renewal terms. Bidder certifies that prices charged to the County for non-listed commodities or no-fixed price items are equal to or less than those charged the bidder’s most favored customer for comparable quantities under similar terms and conditions.
16. TERMINATION OF CONTRACT. In the event of a material breach of the contractual obligations by the Contractor, the County may terminate the contract. At its sole discretion, the County may give the contractor an opportunity to cure the breach or to explain how the breach will be cured. The actual cure must be completed within no more than 10 working days from notification, or at minimum the contractor must provide the county within 10 working days from notification a written plan detailing how the contractor intends to cure the breach. If the contractor fails to cure the breach or if circumstances demand immediate action, the County will issue a notice of immediate termination.
Supplier Contracts may be terminated by the County without cause upon 30 calendar days’ written notice.
17. NON-APPROPRIATION. In the event that sufficient funds are not appropriated and budgeted for the payment of goods or services described herein, the agreement shall immediately terminate on the last day of the fiscal period for which appropriations were received or other amounts were available to pay the amounts due under the agreement, without penalty or expense to the County of any kind whatsoever, except that the County will be liable for payment of any unpaid invoices for goods or services which were delivered prior to the end of the last fiscal period for which appropriations were made.
18. RIGHTS AND REMEDIES OF COUNTY FOR DEFAULT. If any item or service furnished by the vendor fails to conform to bid specifications, or to the sample submitted by the vendor with his bid (if any), or if the vendor fails to deliver the items or perform any services required by the contract in the time and manner prescribed, the County may reject the products and/or services provided. Upon rejection, the vendor must promptly reclaim and remove any rejected items without expense to the County, and shall immediately replace all such rejected items with others conforming to such specifications or samples, and/or correct the service deficiency. If the vendor fails to do so, the County has the right to purchase in the open market a corresponding quantity of the rejected items, or have another firm provide the required service, and to deduct from any monies due the vendor the difference between the price named in the contract or purchase order and the actual cost to the County. If the vendor breaches the contract or purchase order, any loss or damage sustained by the County in procuring items which the vendor therein agreed to supply shall be borne and paid for by the vendor. The rights and remedies of the County identified above are in addition to any other rights and remedies provided by law or under the contract. In any legal proceeding brought to enforce the terms of the herein agreement, the prevailing party shall be entitled to an award of reasonable attorney’s fees and costs incurred as a result of enforcing the terms of this agreement.
19. LOCAL VENDOR PREFERENCE. A local preference credit of 5.0% for Placer County businesses will be permitted when evaluating bids for supplies, equipment, materials and services that are not part of a public project. Bidders claiming local vendor preference must submit an Affidavit of Eligibility with their bid, unless an authorized affidavit is already on file with Placer County Procurement. Preference criteria and affidavit forms are available on our website at: https://www.placer.ca.gov/1408/Local- Vendor-Preference
20. INVOICES AND PAYMENT TERMS. Invoices are to be mailed to the County department specified on the resulting purchase order or contract. All invoices must include the purchase order or contract number. Failure to comply will result in delayed payments. The County will make payment on a Net 30-day basis unless a cash discount is allowed for payment within the time period specified by vendor. The payment term shall begin on the date the merchandise is inspected, delivered and accepted by the County, or on the date a correct invoice is received in the office specified in the order, whichever is later. Prompt payment discounts shall be considered earned if payment is postmarked or personally delivered within the prescribed term. For the purposes of this section, the beginning date described above shall be considered day zero for the purposes of counting days in the prescribed term. For the purposes of bid evaluation, the County will only consider discount periods of ten (10) days or more. LATE FEES: In accordance with Section 926.10 of the California Government Code, Placer County may pay interest at not more than the rate of 6% per annum on invoices which are unpaid 61 or more days beyond the “beginning date” or “day zero” as defined above. In cases where this policy may conflict with other terms provided by the supplier, this provision shall prevail.
21. LEGAL REQUIREMENTS. Federal, State, County and local ordinances, rules and regulations, and policies shall govern development, submittal and evaluation of bids and disputes about bids. Lack of knowledge by any bidder about applicable law is not a defense.
22. ASSIGNMENT. Any contract awarded shall not be assignable by the vendor without the express written approval of the County, and shall not become an asset in any bankruptcy, receivership or guardianship proceedings.
23. OTHER AGENCIES. The successful vendor shall agree to extend Placer County contract prices and terms to other governmental agencies. Any contract resulting from this requirement shall be executed by the successful vendor and the other agency. Placer County will not be a party to “other agency” contracts.
24. PROTEST AND APPEAL PROCESS. Any actual or prospective bidder or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the Director of Administrative Services in the manner prescribed by Section 10.0 of the Placer County Purchasing Policy. The protest shall be submitted in writing to the Director of Administrative Services within seven (7) County business days after such aggrieved person or company knows or should have known of the facts giving rise thereto.
25. RECYCLED PRODUCT PREFERENCE. A preference of 10% will be given to bids for products meeting the definition of recycled product cited in Public Contract Code Sections 22150 - 22154. In order to be granted this preference bidder shall provide statements and/or documentation as supporting evidence that the product(s) meets the definition.
26. PATENT INFRINGEMENT. Supplier shall indemnify and hold harmless County, its agents and employees, against and from any and all actions, suits, liabilities, prosecutions, penalties, settlements, losses, damages, costs, charges, attorney’s fees, and all other expenses which may arise directly or indirectly from any claim that any of the products supplied by supplier infringes any patent, copyright, trade secret, or other property right.
27. VENDOR FINANCIAL STABILITY. If a vendor is currently involved in an ongoing bankruptcy as a debtor, or in a reorganization, liquidation, or dissolution proceeding, or if a trustee or receiver has been appointed over all or a substantial portion of the property of the vendor under federal bankruptcy law or any state insolvency law, the vendor must provide the County with that information as part of its bid/proposal. In accordance with Section 3.12(g) of the Placer County Purchasing Policy Manual and paragraph 8.e. of this document, the County may use information regarding a bidder’s financial responsibility when making an award determination.
The County reserves the right to take any action available if it discovers a failure to provide such information to the County, including but not limited to, a determination that the vendor should be declared non-responsible and/or non-responsive, and suspension or debarment of the vendor, in accordance with the processes defined in the Placer County Purchasing Policy Manual.
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By submitting a bid/proposal in response to this solicitation, the vendor agrees that if, during the term of any contract it has with the County, it becomes involved as a debtor in a bankruptcy proceeding, or becomes involved in a reorganization, liquidation, or dissolution proceeding, or if a trustee or receiver has been appointed over all or a substantial portion of the property of the vendor under federal bankruptcy law or any state insolvency law, the vendor will immediately provide the County with a written notice to that effect and that it will provide the County any relevant information requested in order for the County to determine whether the vendor has the financial ability to meet its obligations to the County.
- - End of General Terms and Conditions - -
07/25/2019
I acknowledge that I have the authority to bind the Company and submit this bid on behalf of the Company. - Steve Adair, Regional Sales Manager The Applicant declares that there is an actual or potential Conflict of Interest relating to the preparation of its submission, and/or the Applicant foresees an actual or potential Conflict of Interest in performing the contractual obligations contemplated in the bid. Yes No The Bidder acknowledges and agrees that the addendum/addenda below form part of the Bid Document Please check the box in the column "I have reviewed this addendum" below to acknowledge each of the addenda.
File Name
I have reviewed the
below addendum and
attachments (if
applicable)
Pages
There have not been any addenda issued for this bid.
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March 19, 2024
Finance Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Dave Aleshire, City Attorney
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject:
Ordinance Creating New Business Activity Classification, Class P – Wholesale, and the Corresponding Rates
FINANCIAL IMPACT: The financial impact of creating this new classification and rate structure will result in a decrease of
approximately $10,000 in Business Tax Revenue in the
General Fund.
PREVIOUS COUNCIL
ACTION:
STATEMENT OF THE
ISSUE:
The proposed Ordinance will create a new Business
Activity, Class P – Wholesale, and the corresponding
rates.
RECOMMENDED ACTION:
INTRODUCE an ordinance (first reading) amending
Chapter 7.04.103 of the Richmond Municipal Code by
creating a new Business Activity Classification, Class P – Wholesale, and the corresponding rates – City Attorney's Office/Finance Department (Dave Aleshire 510-620-
6509/Andrea Miller, Mubeen Qader, Antonio Banuelos
510-620-6741). This item was continued from the
February 27, 2024, and March 5, 2024, meetings.
AGENDA
REPORT
914
March 19, 2024
DISCUSSION:
City Council placed Measure U on the November 3, 2020, ballot that was approved by the voters. The Measure changed the business tax calculation methodology to be based on gross receipts instead of the prior methodology that was based upon the number of employees employed by a business.
This item was originally scheduled on the December 19, 2023 City Council agenda but was removed and postponed pending more outreach to wholesalers in Richmond. Staff mailed and e-mailed 18 Richmond businesses who have listed wholesaling as their primary businesses and invited them to an online meeting held on January 25, 2024.
Staff presented the situation and reasons behind the proposed changes to the Business Tax Ordinance. Participants understood the need for a new class for wholesalers, but also raised concerns about the rates postulating that they should be lower. Additionally, they inquired about possibly making any change retroactive, meaning some businesses would be due a refund.
Measure U (Richmond Municipal Code 7.04) contains fifteen (15) Business Activity Classifications but does not include wholesale as a business activity classification class.
City staff is requesting to amend the Ordinance by adding, Wholesale, in section
7.04.130) of the Richmond Municipal Code as follows:
7.04.130 Business Activity Classifications Class
Class Industry
A Retail Sales
B Grocers
C Automobile Sales, Manufacturing
D Recreation and Entertainment
E Hotel/Motel
F Construction contractor
G Business and personal services
H Professional/semi-professional service
I Administrative headquarters (payroll based, not gross receipts) J Miscellaneous
K Residential and Commercial Rentals
L Cannabis
M Firearms Ammunition
N Taxi and limousine service
O Transportation, trucking
P Wholesale
915
March 19, 2024
Additionally, this new Wholesale class will be assigned a new business tax at the rate provided below following an amendment of the ordinance to include this section after
7.04.205 (J):
7.04.205 Tax Rates for Class A through Class J, and Class P —Progressive Rates
K. Class P. Business engaged in Class P business activities shall pay a business tax as follows:
If annual gross is: Then the business tax is:
Not over $1,000,000 $1.20 per $1,000 of annual gross
receipts
Over $1,000,000 but not over
$2,500,000
$1,200, plus $1.50 per $1,000 of annual
gross receipts over $1,000,000
Over $2,500,000 but not over
$25,000,000
$3,450, plus $1.90 per $1,000 of annual
gross receipts over $2,500,000
Over $25,000,000 but not over
$50,000,000
$46,200, plus $2.20 per $1,000 of
annual gross receipts over $25,000,000
Over $50,000,000 $101,200, plus $2.40 per $1,000 of
annual gross receipts over $50,000,000
A wholesale classification was inadvertently omitted from the original voter approved ordinance. City s taff attempted to correct this oversight via an Administrative Ruling placing Wholesale businesses in the same classification as Retail Sales businesses. The issue with this approach is that the definition of “Retail Sales” in the approved Ordinance excludes the resale of items such as with wholesalers:
“Retail sales” means the sale of goods, wares, or merchandise for any purpose other than resale in the regular course of business, including restaurants and peddlers. (emphasis added)
Other communities have a wholesale category in their ordinances and the City has businesses that could be classified as “wholesale.” The definitions in the ordinance excluding wholesale from retail and vice versa create legal confusion which could make the Ordinance subject to challenge.
The new classification clarifies both the Business Class and the respective Business Tax Rate structure for Wholesale businesses. Currently, staff classifies Wholesale businesses as part of “Class J – Miscellaneous” which has significantly higher rates than “Class A – Retail Sales”.
AMENDMENT PROCESS
While any amendment to Measure U that would increase the rate of taxation is subject to approval by a vote of the voters, the City Council has the authority to adopt modifications that decrease the rate of taxation, which applies to this action. 916
March 19, 2024
BUSINESS TAX UPDATE
City staff recently mailed out the 2024 renewal notices for both rental property businesses and non-rental businesses. The due date for the rental properties is March 1, 2024, while the due date for the non-rentals is April 1, 2024. The Finance Department is providing augmented business tax services to the Richmond business community in person, via phone calls, through our online payment portal, and through virtual online appointments.
The community can leave questions for City staff on the business tax hotline at 510-620- 5555 or email to [email protected].
DOCUMENTS ATTACHED:
Attachment 1 – Administrative Ruling No. 1
Attachment 2 – Redline Ordinance
Attachment 3 – Final Ordinance
Attachment 4 – Presentation
917
CITY OF RICHMOND
FINANCE DEPARTMENT
FINANCE DIRECTOR ADMINISTRATIVE RULING NO. 1
ADMINISTRATIVE RULING AND INTERPRETATION (1.0)
Authority. Pursuant to Section 7.04.670 of the City of Richmond Gross Receipts Business Tax Measure U, the Director of Finance, upon delegation from the City Manager, hereby adopts the following administrative rulings:
PURPOSE
This Administrative Ruling clarifies certain sectio ns of the Measure U Gross Receipts Tax Ordinance approved by Richmond voters in November 2020.
BACKGROUND
The rulings herein promulgated provides specific ap portionment criteria to be used by the City of Richmond staff and the taxpayer in determining application if the Business Tax of gross receipts.
RULING OF THE DIRECTOR OF FINANCE
The following guidelines shall be used to determine the percentage of gross receipts to be used for the tax base:
A. Administrative Ruling - Definitions and Classifications (Section
7.04.100)
1) If a business operator has earned gross receipts in Richmond, and provides other services where the gross receipts is earned outside of Richmond, such as trucks, water or rail transportation, the tax will be calculated on the gross receipts from sales in Richmond.
2) “Wholesale Sales” is defined as “the sale of go ods, wares, or merchandise for the purpose of resale in the regular course of business. However, it is not included in any of the Business Activity Classifications. Businesses categorized as Wholesale Sales will fall under Business Activity Classification of Class A – Retail Sales with the following rates:
918
If annual gross receipts are: Then the business tax is:
Not over $1,000,000 $1.20 per $1,000 of annual gro ss receipts Over $1,000,000 but not over $2,500,000 $1,200, plus $1.60 per $1,000 of annual gross receipts over $1,000,000
Over $2,500,000 but not over
$25,000,000
$3,600, plus $2.00 per $1,000 of annual
gross receipts over $2,500,000
Over $25,000,000 but not over
$50,000,000
$48,600, plus $2.40 per $1,000 of annual
gross receipts over $25,000,000
Over $50,000,000 $108,600, plus $3.20 per $1,000 o f
annual gross receipts over $50,000,000
3) Any business that is not otherwise defined nor i ncluded in the various classifications will fall under Business Activity Classification of Class J – Miscellaneous.
Limitation. This Ruling and Interpretation is intended to give general guidance and should not be viewed as providing a definite answer to all factual situations, as the exact application of the tax will depend on the nature of the service, the manner in which it is billed ( e.g., bundled or unbundled), and other factors.
City of Richmond, Director of Finance
______________________________
Belinda Brown
Date: November 2, 2021
919
ORDINANCE NO. N.S.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RICHMOND AMENDING CHAPTER 7.04 TO THE CITY OF RICHMOND MUNICIPAL CODE ENTITLED “BUSINESS LICENSES”
The City Council of the City of Richmond do ordain as follows:
SECTION 1. Section 7.04.130 of the City of Richmond Municipal Code is hereby amended to read as follows:
7.04.130 Business Activity Classifications Class
Class Industry
A Retail Sales
B Grocers
C Automobile Sales, Manufacturing
D Recreation and Entertainment
E Hotel/Motel
F Construction contractor
G Business and personal services
H Professional/semi-professional service
I Administrative headquarters (payroll
based, not gross receipts)
J Miscellaneous
K Residential and Commercial Rentals
L Cannabis
M Firearms Ammunition
N Taxi and limousine service
O Transportation, trucking
P Wholesale
SECTION 2. Section 7.04.205 of the City of Richmond Municipal Code is hereby amended to read as follows:
7.04.205 Tax Rates for Class A through Class J, and Class P —Progressive Rates
920
K. Class P. Persons engaged in Class I business activities shall pay a business tax as follows:
If annual gross receipts are: Then the business tax is:
Not over $1,000,000 $1.20 per $1,000 of annual gross receipts Over $1,000,000 but not over $2,500,000 $1,200, plus $1.50 per $1,000 of annual gross receipts over $1,000,000
Over $2,500,000 but not over $25,000,000 $3,450, plus $1.90 per $1,000 of annual gross receipts over $2,500,000
Over $25,000,000 but not over $50,000,000 $46,200, plus $2.20 per $1,000 of annual gross receipts over $25,000,000
Over $50,000,000 $101,200, plus $2.40 per $1,000 of annual gross receipts over $50,000,000
SECTION 3. If any section, subsection, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid, the remaining portions of this Ordinance shall remain in full force and effect. The City Council hereby declares that it would have passed each section, subsection, paragraph, sentence, clause or phrase of this Ordinance irrespective of the unconstitutionality or invalidity of any section, subsection, paragraph, sentence, clause or phrase.
SECTION 4.
This Ordinance becomes effective thirty (30) days after its final passage and adoption.
*****************************
(This section to be completed by Clerk’s Office)
First introduced at a regular meeting of the City Council of the City of Richmond held on _____________ and finally passed and adopted at a regular meeting held on ___________ by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
________________________________________
Clerk of the City of Richmond
(SEAL)
921
Approved:
_______________________________
Mayor
Approved as to form:
____________________________
City Attorney
922
ORDINANCE NO. N.S.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RICHMOND AMENDING CHAPTER 7.04 TO THE CITY OF RICHMOND MUNICIPAL CODE ENTITLED “BUSINESS LICENSES”
The City Council of the City of Richmond do ordain as follows:
SECTION 1. Section 7.04.130 of the City of Richmond Municipal Code is hereby amended to read as follows:
7.04.130 Business Activity Classifications Class
Class Industry
A Retail Sales
B Grocers
C Automobile Sales, Manufacturing
D Recreation and Entertainment
E Hotel/Motel
F Construction contractor
G Business and personal services
H Professional/semi-professional service
I Administrative headquarters (payroll
based, not gross receipts)
J Miscellaneous
K Residential and Commercial Rentals
L Cannabis
M Firearms Ammunition
N Taxi and limousine service
O Transportation, trucking
P Wholesale
SECTION 2. Section 7.04.205 of the City of Richmond Municipal Code is hereby amended to read as follows:
7.04.205 Tax Rates for Class A through Class J, and Class P —Progressive Rates
923
K. Class P. Persons engaged in Class P business activities shall pay a business tax as follows:
If annual gross receipts are: Then the business tax is:
Not over $1,000,000 $1.20 per $1,000 of annual gross receipts Over $1,000,000 but not over $2,500,000 $1,200, plus $1.50 per $1,000 of annual gross receipts over $1,000,000
Over $2,500,000 but not over $25,000,000 $3,450, plus $1.90 per $1,000 of annual gross receipts over $2,500,000
Over $25,000,000 but not over $50,000,000 $46,200, plus $2.20 per $1,000 of annual gross receipts over $25,000,000
Over $50,000,000 $101,200, plus $2.40 per $1,000 of annual gross receipts over $50,000,000
SECTION 3. If any section, subsection, paragraph, sentence, clause, or phrase of this Ordinance is for any reason held by a court of competent jurisdiction to be unconstitutional or invalid, the remaining portions of this Ordinance shall remain in full force and effect. The City Council hereby declares that it would have passed each section, subsection, paragraph, sentence, clause or phrase of this Ordinance irrespective of the unconstitutionality or invalidity of any section, subsection, paragraph, sentence, clause or phrase.
SECTION 4.
This Ordinance becomes effective thirty (30) days after its final passage and adoption.
*****************************
(This section to be completed by Clerk’s Office)
First introduced at a regular meeting of the City Council of the City of Richmond held on _____________ and finally passed and adopted at a regular meeting held on ___________ by the following vote:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
________________________________________
Clerk of the City of Richmond
(SEAL)
924
Approved:
_______________________________
Mayor
Approved as to form:
____________________________
City Attorney
925
Business Tax Update
Ordinance Creating New Business Activity
Classification, Class P – Wholesale, and the
corresponding rates.
FINANCE DEPARTMENT AND CITY ATTORNEY’S OFFICE
FEBRUARY , 2024
926
Agenda
Background
Business Tax Classifications
Business Tax Rates
Recommended Action
Questions
2 927
Measure U Background
Measure U Approved by Voters in November 2020
Changed the way the tax is calculated
◦ New Methodology is based on the Business Gross Receipts ◦ Tax is a percentage of the Gross Receipts and changes based on the Business Category and the amount of Gross Receipts
◦ Businesses making less than $250,000 pay the Minimum Tax of $100 Per Year 3 928
Wholesale Background
Measure U contained no classification for Wholesalers
Staff created Administrative Ruling 1.0 that categorized Wholesale Businesses under Class A - Retail Sales.
Definition of Retail Sales excludes wholesale sales:
“Retail sales” means the sale of goods, wares, or merchandise for any purpose other than resale in
the regular course of business, including restaurants and peddlers. (emphasis added) Definition of Retail Sales excluding wholesale sales creates need for a new Business Tax Class for Wholesale Businesses
Approximately 15 business in Richmond are wholesalers and financial impact is estimated at $10,000 decrease to the General Fund revenues.
If a business does not fall clearly into any class, they are then placed in Class J - Miscellaneous 4 929
Business Tax Classifications
Class Industry Class Industry
A Retail Sales I Administrative headquarters (payroll
based, not gross receipts)
B Grocers J Miscellaneous
C Automobile Sales, Manufacturing K Residential and Commercial Rentals D Recreation and Entertainment L Cannabis
E Hotel/Motel M Firearms Ammunition
F Construction contractor N Taxi and limousine service
G Business and personal services O Transportation, trucking H Professional/semi-professional service P Wholesale
930
Current Rates For All Classes
6 Class Industry Under $1M $1M to
$2.5M
$2.5M to
$25M
$25M to
$50M Over $50M
A Retail Sales 0.120% 0.160% 0.200% 0.240% 0.320%
B Grocers 0.060% 0.100% 0.130% 0.015% 0.200%
C Automobile Sales, Manufacturing 0.120% 0.220% 0.310% 0.410% 0.500% D Recreation and Entertainment 0.450% 0.460% 0.470% 0.480% 0.500% E Hotel Motel 0.180% 0.280% 0.380% 0.480% 0.500%
F Construction contractor 0.180% 0.210% 0.240% 0.270% 0.300% G Business and personal services 0.180% 0.270% 0.360% 0.500% 0.540% H Professional/semi-professional service 0.360% 0.410% 0.450% 0.500% 0.680% I Administrative headquarters (payroll based, not gross receipts) 0.120% 0.150% 0.190% 0.220% 0.240%
J Miscellaneous 0.240% 0.310% 0.380% 0.450% 0.480%
K Residential and Commercial Rentals 1.081% if 4 properties or less and 2.880% if 5 properties or more L Cannabis 5.000% 5.000% 5.000% 5.000% 5.000%
M Firearms Ammunition 2.400% 2.400% 2.400% 2.400% 2.400% N Taxi and limousine service $75 for each ambulance or limousine and $180 for each taxicab permit O Transportation, trucking Tax based on current employee total 931
Proposed Rates for Class P
7 Class P . Persons engaged in Class P business activities shall pay a business tax as follows:
If annual gross receipts are: Then the business tax is:
Not over $1,000,000 $1.20 per $1,000 of annual gross receipts Over $1,000,000 but not over $2,500,000 $1,200, plus $1.50 per $1,000 of annual gross receipts over $1,000,000
Over $2,500,000 but not over $25,000,000 $3,450, plus $1.90 per $1,000 of annual gross receipts over $2,500,000
Over $25,000,000 but not over $50,000,000 $46,200, plus $2.20 per $1,000 of annual gross receipts over $25,000,000
Over $50,000,000 $101,200, plus $2.40 per $1,000 of annual gross receipts over $50,000,000
932
Rates For All Classes including Class P
8 Class Industry Under $1M $1M to
$2.5M
$2.5M to
$25M
$25M to
$50M Over $50M
A Retail Sales 0.120% 0.160% 0.200% 0.240% 0.320%
B Grocers 0.060% 0.100% 0.130% 0.015% 0.200%
C Automobile Sales, Manufacturing 0.120% 0.220% 0.310% 0.410% 0.500% D Recreation and Entertainment 0.450% 0.460% 0.470% 0.480% 0.500% E Hotel Motel 0.180% 0.280% 0.380% 0.480% 0.500%
F Construction contractor 0.180% 0.210% 0.240% 0.270% 0.300% G Business and personal services 0.180% 0.270% 0.360% 0.500% 0.540% H Professional/semi-professional service 0.360% 0.410% 0.450% 0.500% 0.680% I Administrative headquarters (payroll based, not gross receipts) 0.120% 0.150% 0.190% 0.220% 0.240% J Miscellaneous 0.240% 0.310% 0.380% 0.450% 0.480%
K Residential and Commercial Rentals 1.081% if 4 properties or less and 2.880% if 5 properties or more L Cannabis 5.000% 5.000% 5.000% 5.000% 5.000%
M Firearms Ammunition 2.400% 2.400% 2.400% 2.400% 2.400% N Taxi and limousine service $75 for each ambulance or limousine and $180 for each taxicab permit O Transportation, trucking Tax based on current employee total P Wholesale 0.120% 0.150% 0.190% 0.220% 0.240%
933
Proposed Rates for Class P
9 Current Richmond Rates
Class Industry $250k to
$1M
$1M to
$2.5M
$2.5M to
$25M
$25M to
$50M Over $50M
A Retail Sales 0.120% 0.160% 0.200% 0.240% 0.320%
P Proposed Wholesales 0.120% 0.150% 0.190% 0.220% 0.240% Approved Oakland Rates in 2022 with Measure T - effective 1/1/2023 Industry Under $1M $1M to
$2.5M
$2.5M to
$20M
$20M to
$50M Over $50M
Retail Sales 0.090% 0.110% 0.200% 0.220% 0.240%
Wholesales 0.110% 0.120% 0.180% 0.200% 0.250%
Current San Francisco Rates updated with Proposition F in 2020 Industry Under $1M $1M to
$2.5M
$2.5M to
$20M
$25M to
$50M Over $50M
Retail Sales 0.053% 0.070% 0.095% 0.224% 0.224%
Wholesale Trade 0.105% 0.140% 0.189% 0.224% 0.224%
Current Berkeley Rates
Industry Under $1M $1M to
$2.5M
$2.5M to
$20M
$25M to
$50M Over $50M
Retail Sales 0.120% 0.120% 0.120% 0.120% 0.120%
Wholesale Trade 0.120% 0.120% 0.120% 0.120% 0.120%
934
Examples of Business Tax
Proposed Oakland
Gross
Receipts
Class A -
Retail Sales
Class P -
Wholesale
Class J -
Miscellaneous Wholesale
$900,000 $1,080 $1,080 $2,160 $990
$2,000,000 $2,800 $2,700 $5,500 $2,300
$3,000,000 $4,600 $4,400 $8,950 $3,800
$10,000,000 $18,600 $17,700 $35,550 $16,400
$25,000,000 $48,600 $46,200 $92,550 $44,400
$50,000,000 $108,600 $101,200 $205,050 $94,400
935
Recommended Action to
City Council on February 6th Meeting
INTRODUCE an Ordinance (first reading) amending
Chapter 7.04.103 of the Richmond Municipal Code to
create a new Business Activity Classification, Class P – Wholesale, and provide the corresponding rates.
936
Questions?
12 937
March 19, 2024
Finance Department
DATE: March 19, 2024
TO: Mayor Martinez and Members of the City Council
FROM:
Nickie Mastay, Deputy City Manager, Internal Services
Andrea Miller, Director of Finance
Mubeen Qader, Deputy Director of Finance
Antonio Banuelos, Accounting Manager
Subject:
Proposed Developer Impact Fees Adjustments for a
Revised Master Fee Schedule
FINANCIAL IMPACT: This update of the Master Fee Schedule adjusts Developer Impact Fees based on an analysis of the fees
needed to support future development in the City of
Richmond through 2040. This update does not include
the Traffic Impact Fees which will be updated later this year.
Based on the level of activity in Fiscal Year 2022-2023, the proposed fee adjustments would generate additional
annual revenue totaling $436,000 for the City of
Richmond’s Impact Fee Funds in year one of the phase-
in approach proposal.
PREVIOUS COUNCIL
ACTION:
May 23, 2023, June 6, 2023, June 27, 2023, and
September 26, 2023
STATEMENT OF THE
ISSUE:
Sections 2.34.040 (Schedule of fees and service
charges) and 13.45.020 (Approval of adjustments by City Council) of the Richmond Municipal Code authorize
periodic adjustments to all City levied fees and charges, subject to approval by the City Council. City staff is requesting adoption of a resolution adjusting the dollar amount for current Developer Impact Fees as outlined in the proposed Master Fee Schedule.
AGENDA
REPORT
938
March 19, 2024
RECOMMENDED ACTION:
RECEIVE a presentation from the Finance Department
and Willdan Financial Services on the proposed updates
to the Developer Impact Fees in the Master Fee
Schedule – Finance Department (Andrea Miller/Mubeen
Qader/Antonio Banuelos 510-620- 6741). This item was
continued from March 5, 2024.
PREVIOUS COUNCIL MEETINGS:
On May 23, 2023: City Council approved first reading of Ordinance establishing Commercial Cannabis Regulatory Fees.
On June 6, 2023: City Council approved second reading of Ordinance establishing Commercial Cannabis Regulatory Fees.
On June 27, 2023: City Council approved a Resolution adjusting the dollar amount for current fees except for Recreation fees which remained as is.
On September 26, 2023: City Council provided direction to make certain adjustments to the study and to further reach out to stakeholders.
DISCUSSION:
Section 2.34.040 of the Richmond Municipal Code (RMC) (Schedule of fees and service charges) provides that “The City Manager shall review the fees and charges based upon the review schedule set forth (herein) and shall set and adjust the fees or charges so as to recover up to the … costs reasonably necessary to provide the listed regulations, products or services.”
Additionally, Sections 13.45.010 and 13.45.020 of the RMC, as recently amended by the Richmond City Council at its May 2, 2023 meeting, further provides that:
The Director of Finance of the City shall adjust all city -levied taxes, fees and charges provided for in the Richmond Municipal Code on a yearly basis, or as needed, in accordance with any increase or decrease in the Bureau of Labor Statistics Employment Cost Index (ECI), State and Local Government Workers component, during the preceding fiscal year.
Additionally, a comprehensive fee study should be conducted at least every five years.
And
Each year, the Director of Finance shall submit to the City Council a report listing all proposed adjustments for approval. No proposed adjustment shall take effect until it is approved by the City Council. The Council may reject, but may not modify, any one or more o f the proposed adjustments in any report before approving the adjustments.
939
March 19, 2024
The Finance Department worked with Willdan Financial Services to develop the proposed Developer Impact Fees. The scope of services provided under this program was designed to produce reports used in updating the Master Fee Schedule to help better offset the impacts of new developments. The traffic impact fee section is still pending, and Finance staff will return later this year with those proposed changes.
Willdan’s Development Impact Fee Nexus Study Update summarizes an analysis of development impact fees needed to support future development in the City of Richmond through 2040 (Attachment 2). It is the City’s intent that the costs representing future development’s share of public facilities and capital improvements be imposed on that development in the form of a development impact fee, also known as a public facilities fee. The public facilities and improvements included in this analysis are divided into the fee categories listed below:
Sewer Facilities
Parks
Community Center and Aquatic Facilities
Police Facilities
Fire Protection Facilities
Library Facilities
Storm Drains
On December 13, 2023, City staff and consultants from Willdan Financial Services held a virtual meeting with interested parties to review the impact fees and answer questions.
The presentation can be found here: https://www.ci.richmond.ca.us/CivicMedia?VID=30.
The study and fees have been updated based on input received in the meeting and input previously provided by City Council.
Major changes included:
1. Updated library chapter to incorporate $29 million cost of planned facilities.
This version now uses a system standard to calculate higher fees than the previous report.
2. Community/aquatic centers fee updated to use the existing facility standard (and results in a higher fee). The City will have to identify approximately $19 million in additional projects to maintain the existing level of service through the planning horizon.
3. Incorporated current fee fund balances where appropriate.
4. Costs of projects were updated to match latest CIP where appropriate (Martin Luther King, Jr. Community Center is now shown as $14 million, new fire facilities, etc.)
940
March 19, 2024
AB 602 Requirements
On January 1, 2022, new requirements went into effect for California jurisdictions implementing impact fees. Among other changes, AB 602 added Section 66016.5 to the Government Code, which set guidelines for impact fee nexus studies. Four key requirements from that section which concern the nexus study are reproduced here:
66016.5. (a) (2) When applicable, the nexus study shall identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is appropriate. 66016.5. (a) (4) If a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee. 66016.5. (a) (5) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of proposed units of the development. A local agency that imposes a fee proportionately to the square footage of the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. 66016.5. (a) (6) Large jurisdictions shall adopt a capital improvement plan as a part of the nexus study.
One key change listed above is the fee calculation methodology for residential properties. Previously, the City of Richmond, like many other cities, calculated the fee based on the number of dwelling units. Going forward, the fee will be on a square footage basis. The goal here is to be more equitable in that smaller dwellings are charged a lower fee than larger dwellings.
Phase In Approach
Since the proposed increases to the developer impact fees are significant, City staff is proposing a phase-in approach over several years. For non-residential properties, the developer impact fees would be updated over two years. Subsequent yearly increases would be based on changes to the Employment Cost Index; that is until the next study is done in four to five years. For residential properties, the phase-in would be over four years with the next overall fee study to be completed around year five.
NEXT STEPS:
Due to recent legislation, further technical work is required to justify traffic impacts fees by developing a long-term plan that demonstrates how the City will expand its transportation resources in order to mitigate the impacts of new development. Public Works staff is updating a list of traffic projects with one of the City’s on-call consultants.
This list of projects may include projects which facilitate movement of traffic, mitigate safety impacts, and/or address the growing requirements for all travel modes consistent with SB 743 (e.g., complete streets, bicycle projects, pedestrian improvements, transit improvements, etc.). Staff will return with proposed updates to the developer impact fees focused on the traffic impact fees.
941
March 19, 2024
Additionally, City staff will return to City Council with a proposed contract focused on Recreation Department fees, which will include a comparison with nearby jurisdictions.
DOCUMENTS ATTACHED:
Attachment 1 – Master Fee Schedule - Proposed Impact Fees Attachment 2 – Development Impact Fee Nexus Study Update Attachment 3 – Presentation
Attachment 4 – State Audit Report – November 2022
942
January 24, 2024
Residential - Four Year Phase In
Current Year 1 Year 2 Year 3 Year 4
Parks - Quimby (Subdivisions) 4.39$ 6.12$ 7.86$ 9.59$ 11.32$ Parks (Infill) 4.39 6.05 7.71 9.37 11.03 Community / Aquatic Center 1.05 1.10 1.14 1.19 1.23 Police Facilities 0.25 0.43 0.62 0.80 0.99 Fire Protection Facilities 0.30 0.34 0.38 0.42 0.46 Library Facilities 1.19 0.54 0.54 0.54 0.54 Storm Drains 0.45 0.03 0.03 0.03 0.03 Sewer Facilities 2.29 3.71 5.14 6.56 7.98 Total (Subdivisions) 9.92$ 13.08$ 16.24$ 19.39$ 22.55$ Total (Infill) 9.92$ 13.01$ 16.09$ 19.18$ 22.26$ Nonresidential - Two Year Phase In
Current Year 1 Year 2
Office
Police Facilities 0.30$ 0.42$ 0.54$
Fire Facilities 0.26 0.38 0.49
Library 0.42 - -
Storm Drainage 0.74 0.07 0.07
Sewer 2.32 3.37 4.43
Total 4.04$ 4.24$ 5.53$
Industrial
Police Facilities 0.11$ 0.15$ 0.19$
Fire Facilities 0.19 0.17 0.17
Library 0.18 - -
Storm Drainage 0.79 0.10 0.10
Sewer 1.14 4.12 7.09
Total 2.41$ 4.54$ 7.55$
Warehousing
Police Facilities 0.11$ 0.06$ 0.06$
Fire Facilities 0.19 0.05 0.05
Library 0.05 - -
Storm Drainage 0.79 0.10 0.10
Sewer 1.14 4.12 7.09
Total 2.29$ 4.33$ 7.30$
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CITY OF RICHMOND
DEVELOPMENT IMPACT FEE NEXUS STUDY
UPDATE
FINAL
JANUARY 24, 2024
Oakland Office Corporate Office Other Regional Offices
66 Franklin Street 27368 Via Industria Aurora, CO
Suite 300 Suite 200 Orlando, FL
Oakland, CA 94607 Temecula, CA 92590 Phoenix, AZ
Tel: (510) 832-0899 Tel: (800) 755-6864 Plano, TX
Fax: (888) 326-6864 Seattle, WA
Washington, DC
www.willdan.com
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i
TABLE OF CONTENTS
EXECUTIVE SUMMARY .......................................................................... 1 Background and Study Objectives 1
Facility Standards and Costs 1
Use of Fee Revenues 2
Development Impact Fee Schedule Summary 2
Other Funding Needed 4
1. INTRODUCTION ........................................................................... 5 Public Facilities Financing in California 5
Study Objectives 5
Fee Program Maintenance 6
Study Methodology 6
Types of Facility Standards 6
New Development Facility Needs and Costs 7
Organization of the Report 8
2. GROWTH FORECASTS ................................................................. 9 Land Use Types 9
Impact Fees for Accessory Dwelling Units 9
Existing and Future Development 10
Occupant Densities 11
3. SEWER FACILITIES .................................................................... 13 Service Area 13
Sewer Demand 13
EDU Generation by New Development 14
Facility Needs and Costs 15
Cost per EDU 16
Fee Schedule 16
4. PARKS AND RECREATION FACILITIES ........................................... 18 Service Population 18
Existing Parkland Inventory 18
Parkland and Park Facilities Unit Costs 20
Park Facility Standards 21
Quimby Act Standard 21
City of Richmond Park Facilities Standards 22
Facilities Needed to Accommodate New Development 22
Park Facilities Cost per Capita 23
Use of Fee Revenue 24
Fee Schedule 24
5. COMMUNITY CENTER AND AQUATIC FACILITIES ............................ 26 946
City of Richmond Development Impact Fee Nexus Study Update ii
Service Population 26
Existing Recreation and Community Center Facilities Inventory 26 Planned Recreation and Community Center Facilities 28
Cost Allocation 28
Existing Level of Service 28
Future Level of Service 29
Use of Fee Revenue 29
Fee Revenue Projection 29
Fee Schedule 30
6. POLICE FACILITIES .................................................................... 31 Service Population 31
Existing Facility Inventory 31
Planned Facilities 32
Cost Allocation 32
Existing Level of Service 32
Future Level of Service 33
Fee Revenue Projection 33
Fee Schedule 34
7. FIRE PROTECTION FACILITIES .................................................... 36 Service Population 36
Existing Facilities Inventory 36
Planned Facilities 40
Cost Allocation 40
Fee Revenue Projection 41
Fee Schedule 41
8. LIBRARY FACILITIES .................................................................. 43 Service Population 43
Existing Facility Inventory 43
Planned Facilities 45
Cost Allocation 45
Existing Level of Service 45
Future Level of Service 46
Fee Revenue Projection 46
Fee Schedule 47
9. STORM DRAIN FACILITIES .......................................................... 48 Storm Drain Demand 48
EDU Generation by New Development 48
Planned Facilities 49
Cost per Equivalent Dwelling Unit 51
Fee Schedule 51
10. AB 602 REQUIREMENTS ............................................................ 53 Compliance with AB 602 53
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City of Richmond Development Impact Fee Nexus Study Update iii
66016.5. (a) (2) - Level of Service 53
66016.5. (a) (4) – Review of Original Fee Assumptions 53 66016.5. (a) (5) – Residential Fees per Square Foot 54
66016.5. (a) (6) – Capital Improvement Plan 54
11. IMPLEMENTATION ...................................................................... 55 Impact Fee Program Adoption Process 55
Inflation Adjustment 55
Reporting Requirements 55
Programming Revenues and Projects with the CIP 57
12. MITIGATION FEE ACT FINDINGS .................................................. 58 Purpose of Fee 58
Use of Fee Revenues 58
Benefit Relationship 58
Burden Relationship 59
Proportionality 59
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1 Executive Summary
This report summarizes an analysi s o f development impac t fees nee ded to support future development in the City of Richmond through 2040. It is the City’s intent that the costs representing future development’s share of public facilities and capital improvements be imposed on that development in the form of a development impact fee, also known as a pu blic facilities fee. T he publi c fa cilities and impr ovements included in t his analysis are divi ded into the fee categories listed below:
▪ Sewer Facilities
▪ Parks
▪ Community Center and Aquatic
Facilities
▪ Police Facilities
▪ Fire Protection Facilities
▪ Library Facilities
▪ Storm Drains
Background and Study Objectives
The primary policy object ive of a development impact fee program is to ensure that new development pays t he ca pital c osts a ssociated with growth. Although growt h also imposes operating costs, ther e is not a similar sy stem to genera te reven ue from new d evelopment for services. The primary purpose of this report is to calculate and present fee s that will enable the City to expand its inventory of public fa cilities, as new development creates increases in service demands.
The City collects public facilities fees under authority grant ed by the Mitigation Fee Act (the Act), contained in California Government Code Sections 66000 et s eq. Th is report provides th e necessary findings required by the Act for adoption of the fees presented in t he fee sc hedules contained herein.
The City progr ams development im pact fee-funded capital projects through its Capital Improvement Plan ( CIP). Usin g a CIP allows the City to identify and direct its fee revenue to public facilities projects that wil l acco mmodate f uture growth. By programming fee revenues to specific capit al projects, the City can help ensure a reasona ble r elationship between new development and the use of fee revenues as required by the Mitigation Fee Act.
Facility Standards and Costs
There are three approaches used to calculate facilities standards and al locate the costs of planned facilities to accommodate growth in compliance with the Mitigation Fee Act requirements in this study.
The existing inventory approach is based on a facility standard derived from the C ity’s existing level of facilities and existing demand for services. This approach results in no facility deficiencies attributable to existing development. This approach is often used when a long -range plan for new facilities is not a vailable. Future facilities to serve growth will be identi fied t hrough the City’s annual CIP and budget process and/or completion of a new facility master plan. This approach is used to calcula te the park and recreation facilities fees, fire prot ection facilities and community and aquatic center facilities fees in this report.
The planned facilities approach allocates costs based on the ratio of planned facilities that serve new development to the increase in demand associated with new develo pment. This approach is appropriate when specific planned facilities that only benefit new development can be iden tified, or when the specific share of facilities benefiting new d evelopment can be identified. Examples include street improvements to avoid d eficient levels of service or a sewer trunk line extension to 949
City of Richmond Development Impact Fee Nexus Study Update 2 a previou sly undeveloped area. This approach is used for the storm drai n, and sewer facilities fees in this report.
The system plan approach is based on a master facility plan in situations where specific needed facilities serve both existing and new development. This approach allocates existing and planned facilities across existing and new development to determ ine new development’s fair share of facility needs. This approach is used when it is not possible to differentiate the benefits of ne w facilities between ne w and existing dev elopment. This approach is used t o calculate the library and police facilities fees in this report.
Use of Fee Revenues
Impact fee revenue must be spent on new facilities or expansion of current fa cilities to serve new development. Fa cilities can be generally defined as capital acquisition items with a us eful life greater tha n five years. Imp act fee revenue c an be spent on capital facilities to serve new development, including but not limited to land acquisition, construction of buildings, construction of infrastructure, the acquisitio n of vehicles or equi pment, info rmation te chnology, so ftware licenses and equipment.
In that the City cannot predict with certainty how and when development within the City will occur during the 17-year p lanning horizon assumed in this stud y, the Ci ty may need to update and revise the p roject lis ts fun ded by the fees do cumented i n this study. Any subs titute projects should be funded within th e same facility category, an d the substitute projects must still benefit and have a relationship to n ew development. The City could identify any changes to the projects funded b y the impact fees whe n it updates the CIP. The imp act fees could also be updat ed if significant changes to the projects funded by the fees are anticipated.
Development Impact Fee Schedule Summary
Table E.1 summarizes the develo pment impa ct fe es that meet t he City’s identified needs and comply with the requirements of the Mitigation Fee Act.
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City of Richmond Development Impact Fee Nexus Study Update 3 Table E.1: Maximum Justified Impact Fee Summary
Land Use
Sewer
Facilities 1
Parks -
Quimby
(Subdivisions)2
Parks
(Infill)2
Community /
Aquatic
Center
Police
Facilities
Fire
Protection
Facilities
Library
Facilities
Storm
Drains
Total -
Subdivisions
Total -
Infill
Residential - per Sq. Ft. 7.98$ 11.32$ 11.03$ 1.23$ 0.99$ 0.46$ 0.54$ 0.03$ 22.55$ 22.26$ Nonresidential - per Sq. Ft.
Commercial 3.55$ -$ -$ -$ 0.35$ 0.32$ -$ 0.05$ 4.27$ 4.27$ Office 4.43 - - - 0.54 0.49 - 0.07 5.53 5.53 Industrial 7.09 - - - 0.19 0.17 - 0.10 7.55 7.55 Warehousing 7.09 - - - 0.06 0.05 - 0.10 7.30 7.30 2 Only charged w ithin Richmond Municipal Sew er District Boundaries.
Sources: Tables 3.5, 4.7, 5.7, 6.6, 7.9, 8.8 and 9.5.
1 A development project either pays the Quimby fee of the park infill fee, not both. Development not occurring in subdivisions is subject to the infill fee. Development in subdivisions is subject to the Quimby fee.
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City of Richmond Development Impact Fee Nexus Study Update 4 Other Funding Needed
Impact fees may only fund the share of public facili ties related to new de velopment in Richmond.
They may not be used to fund the share of facility needs generated by existing development or by development outside of the City. As shown i n Table E. 2, approximately $ 420.9 million in additional funding will be ne eded to complete the facility projects the City currently plans to develop if fees are adopted at the maximum justified fee level. The “Additional Funding Required” column shows non-impact fee fun ding required to fund a share o f th e improvements partially funded by impact fees. Non-fee funding is needed because these facilities are needed partially to remedy existing deficiencies and partly to accommodate new development. To the extent that the City adopts fees tha t are lower th an t he maximum justified amou nt, the non -fee fundi ng requirements may increase, depending on the fee category and methodology.
The City will need to develop alternative funding sources to fund existing developme nt’s share of the planned facil ities. Potential sources of revenue include but are not limited to existing or new general fund revenues, existing or new taxes, special assessments, and grants.
Table E.2: Non-Impact Fee Funding Required
Fee Category
Fee Calculation
Methodology
Net Project
Cost
Projected
Impact Fee
Revenue
Additional
Funding
Required
Sewer Facilities Planned Facility Standard 584,149,500$ 228,986,604$ 355,162,896$ Parks1 Existing Facility Standard 303,328,000 303,328,000 - Community / Aquatic Center Existing Facility Standard 33,783,200 33,783,200 - Police Facilities System Standard 80,000,000 32,771,000 47,229,000 Fire Protection Facilities Existing Facility Standard 17,641,200 17,641,200 - Library Facilities2 System Standard 29,933,657 14,747,472 15,186,185 Storm Drains Planned Facility Standard 5,947,000 2,586,945 3,360,055 Total 1,054,782,557$ 633,844,421$ 420,938,136$
1 Fee revenue show n if all development is infill development. Refer to Table 4.5 for projections of Quimby in-lieu fee revenue.
Sources: Tables 3.3, 4.5, 5.4, 6.5, 7.8, 8.5, 8.8, and 9.3.
Note: For facility categories calculated using the existing facility standard, the projected fee revenue is equal to the cost of planned facilities needed to serve new development.
2 The City has secured $13.9 million in grants to fund the planned facilities. The remainder w ill be funded through the City's General Capital Fund. See Table 8.7 for more detail.
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5 1. Introduction
This report pres ents an analysis of the need for public facilities to accommoda te new development in the City o f Richmond. This chapt er pr ovides background for t he stu dy and explains the study approach under the following sections:
▪ Public Facilities Financing in California;
▪ Study Objectives;
▪ Fee Program Maintenance;
▪ Study Methodology; and
▪ Organization of the Report.
Public Facilities Financing in California
The changing fiscal landscape in C alifornia during the p ast 45 years h as steadily unde rcut the financial capacity of local governments to fund infrastructure. Three dominant trends stand out:
▪ The passage of a stri ng of tax limitation measures, s tarting with Pro position 13 in 1978 and continuing through the passage of Proposition 218 in 1996; ▪ Declining popul ar support for bond measures to f inance infrastructure for the next generation of residents and businesses; and
▪ Steep reductions in federal and state assistance.
Faced with these trends, many cities and counties have had to adopt a policy of “growth pays its own way. ” This policy shifts t he burden of funding infrastructure expan sion from e xisting ratepayers and ta xpayers on to new dev elopment. Th is funding shift has b een accom plished primarily through the imposition of assessments, special taxes, and development impact fees also known as pu blic facilities fees. Assessments and spe cial taxes require the approval of p roperty owners and a re appropria te when the fund ed fac ilities a re directly re lated to the developi ng property. De velopment impact fees, on the oth er hand, ar e an appropriate fundi ng source for facilities that benefit all development jurisdiction-wide. Deve lopment impact fees need only a majority vote of the legislative body for adoption.
Study Objectives
The primary policy objective of a public facilities fee program is to ensure t hat new development pays the capital costs associated with growth. Finding 2 of the General Plan Growth Management Element states: “To accommodate growth, Richmond will need to acquire additional sources of revenue to address future infrastructure and public facilities needs. Long -term growth management strategies include: Ensuring that new development pay s its fair share of community improvements through impact fees, development agreements and other mechanisms …” The primary purpose of this report is to update the City’s impact fees bas ed on the most current available facility plans and growth projections. The maximum justified fees will enable the City to expand its inventory of pub lic facilities as new deve lopment leads to increa ses in service demands. This report supports the General Plan finding stated above.
The City collects public facilities fees unde r authority granted by the Mitigation Fee Act (the Act), contained in California Government Code Sections 6600 0 et seq. Th is r eport provides the necessary findings requ ired by th e Act for adoption of the fees presented in the fee schedules presented in this report.
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City of Richmond Development Impact Fee Nexus Study Update
6 Richmond is forecast to see significant growth through this study’s planning horizon of 2040. This growth will creat e an increase in demand for publ ic services a nd the facilities required to deliver them. Given the revenue challenges de scribed above, Richmond has decided to continue to use a deve lopment impact fee program to ensure that new development f unds its share of facility costs a ssociated wi th growth. Th is report makes use o f the most cur rent available growth forecasts and facility plans to update th e City’s existing f ee program to ensure that the fee program accurately represents the facility needs resulting from new development.
Fee Program Maintenance
Once a fee program has been adopted it must be properly maintained to ensure t hat the revenue collected ade quately f unds t he facilities n eeded by new development. To avoid collect ing inadequate revenue, the invento ries of existing facilities and costs for planned facilities m ust be updated periodically for inflation, and the fees re calculated to reflect the higher costs. The use of established indices for each facility included in the inventories (land, buildings, and equipment), such as the California Construction Cost Index, is necessary to accurately adjust the impact fees.
For a list of recommended indices, see Chapter 11.
While fee updates using inflation indices are appropriate for annual or periodic updates to ensure that fee revenues ke ep up with increases in the cos ts of public f acilities, it is recommended to conduct more ext ensive upda tes of the fee docu mentation and calcu lation (such as this study) when significant new data on growth fo recasts and/or facility plans become available. For further detail on fee program implementation, see Chapter 11.
Study Methodology
Development impact fees are cal culated t o f und the cost of facilities requ ired to accommodate growth. The six steps followed in this development impact fee study include:
1. Estimate existing develop ment an d future growt h: Identify a base year for existing development and a growt h forecast that reflects increased demand for public facilities;
2. Identify facility standards: Determine the facil ity s tandards used to p lan for new and expanded facilities;
3. Determine facilities re quired to serve new development: Estimate the total amount o f planned facilities, and ide ntify the share required to a ccommodate new development;
4. Determine the cost of facilities required to serve new development: Estimate the total amount and the share o f the cost of plann ed facilities required to accommodate new development;
5. Calculate fee schedule: Allocate facil ities costs per unit of new development to calculate the development impact fee schedule; and
6. Identify alternative funding requirements: Determine if any non -fee funding is required to complete projects.
The key public po licy issue in devel opment impact f ee st udies is the identification of facility standards (step #2, above). Facility s tandards document a reasonable relation ship between new development and the nee d for new facilities. Standards ensure th at new dev elopment does not fund deficiencies associated with existing development.
Types of Facility Standards
There are three separate components of facility standards:
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City of Richmond Development Impact Fee Nexus Study Update
7 ▪ Demand standards determine the amount of fac ilities required to accommodate growth, for example, park ac res per thousand residents, square feet of library space per capita, or gallons of wa ter per day. Demand standards may also reflect a level of service such as the vehicle volume-to-capacity (V/C) ratio used in traffic planning. ▪ Design st andards determine h ow a faci lity shou ld b e designed to mee t expected demand, for example, park improveme nt requirements and technology i nfrastructure for City office space. Design standards are typically not explicitly evaluated as part of an impact fee an alysis but can have a significant impact on the cost of facilities. Our approach incorporates the cost o f planned facilities built to sa tisfy the City’s facility design standards.
▪ Cost standards are an alternate met hod for determining the amount of facilit ies required to acc ommodate growth based on facility costs per unit of demand. Cost standards are useful when dem and standards were not explicitly devel oped for the facility planning process. Cost standards also enable different types of facilities to be analyzed ba sed on a single me asure (co st or value) an d are useful when different facilities are funded by a single fee program. Examples include facility costs per capita, cost per vehicle trip, or cost per gallon of water per day.
New Development Facility Needs and Costs
A number of approaches are used to identify facility needs and costs to serve new develo pment.
This is o ften a two -step process: (1) identify total facility needs, and (2) allocate to new development its fair share of those needs.
There a re three common meth ods for determining ne w development’s fair share of planned facilities costs in this study: the existing inventory method, the planned facilities method, and the system plan method. Often the m ethod selected depends on the degree to whi ch the community has engaged in comprehensive facility master planning to identify facility needs.
The formula used by each approach and the advantages and disadvantages of each method is summarized below:
Existing Inventory Method
The existing inve ntory method allocates costs based on the ratio of existing facilities to demand from existing development as follows:
Current replacement cost of Existing Facilities
Existing Development Demand
Under this method new de velopment will fund the expansion of facil ities at t he same s tandard currently serving e xisting de velopment. The existing inventory method results in no facility deficiencies attributable to existing development. This met hod is often used whe n a long -range plan for new facilities is not available. Future facilities to s erve growth are identified through an annual CIP and budget process, possibly a fter c ompletion of a new faci lity master plan. This approach is used to calculate the park and recreation facilities fees, fire protection facilities and community center/aquatic facilities fees in this report.
Planned Facilities Method
The plann ed f acilities met hod allo cates costs based on th e ratio of pla nned fa cility costs to demand from new development as follows:
Cost of Planned Facilities
New Development Demand
This method is appropriate when planned facilities will entirely serve new development, or when a fair share allocation of planned facilities to new development can be estimated. An example of the = cost per unit of demand
= cost per unit of demand
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City of Richmond Development Impact Fee Nexus Study Update
8 former is a Sewer trunk line extension to a previ ously undeveloped area. An example of the latter is expansion of a n existing lib rary building and book co llection, which will be needed only i f new development occurs, but which, if built, will in par t benefit existi ng development, as well . Under this method new development will fund the exp ansion of facilities at the st andards used i n th e applicable planning documents. This approach is used for the storm drain , and sewer facilities fees in this report.
System Plan Method
This method c alculates the fe e based on the value of existing facilities plus the cost of planned facilities, divided by demand from existing plus new development:
Value of Existing Facilities + Cost of Planned Facilities Existing + New Development Demand
This me thod is useful when planned facilities n eed to be an alyzed as part of a system that benefits both exis ting and new d evelopment. It is difficult, for example, to allocat e a new fire station solely to ne w development when that station will operate as part of an integrated system of fire stations that together achieve the desired level of service.
The system plan method e nsures that new development d oes not pay for existing deficienci es.
Often fa cility st andards based on poli cies such a s t hose found in Comprehensive Plans ar e higher than the existing facility standards. This method enables t he calculation of the ex isting deficiency required to bring e xisting development up to the polic y-based stan dard. The local agency must secure non -fee funding for that portion of planned facilities required to co rrect the deficiency to ensure that new development receives the level of service funded by the impact fee.
This approach is used to calculate the library and police facilities fees in this report.
Organization of the Report
The determinati on o f a public facilities fee begins with the selection of a p lanning horizon and development of growth projection s for p opulation and employment. These projections are used throughout the analysis of different facility categories and are summarized in Chapter 2.
Chapters 3 through 9 identify facility standards and planned facilities, allocate the cost of planned facilities between n ew development and other development, and ide ntify the appropriate development impact fee for each of the following facility categories:
▪ Sewer Facilities
▪ Parks
▪ Community Center and Aquatic
Facilities
▪ Police Facilities
▪ Fire Protection Facilities
▪ Library Facilities
▪ Storm Drains
Chapter 10 describes how this nexus studies complies with the requirements of AB 602.
Chapter 11 details the pro cedures that the City must follow when implementing a development impact fee program. Impact fee program adoption procedures are found in California Government Code Sections 66016 through 66018.
The five statutory findings required for adoption of the maximum justified public facilities fees in accordance with the Mitigation Fee Act are documented in Chapter 12. = cost per unit of demand
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9 2. Growth Forecasts
Growth projections are used as indicators of demand to determine facility needs and allo cate those needs between ex isting and new devel opment. This chapter explains the source for the growth projections used in this study based on a 2023 base year and a planning horizon of 2040.
Estimates of existing developme nt and projections of future growth are critical assumptions used throughout this report. These estimates are used as follows:
▪ The estimate of existing development i n 2023 is used as an indica tor of existing facility demand and to determine existing facility standards. ▪ The estimate of to tal development at the 2040 planning horizon is used as an indicator of future d emand to determine total facilities ne eded to accomm odate growth and remedy existing facility deficiencies, if any. ▪ Estimates of growth from 2023 through 2040 are used to (1) a llocate facility costs between new development and existing development, and (2) estimate total fee revenues.
The dema nd for public facilities is b ased on the service populat ion, dwel ling un its or nonresidential development creating the need for the facilities.
Land Use Types
To ensure a reasonable re lationship between each fee and t he type of development paying the fee, growth projections distinguish between different land use types. The land use types for which impact fees have been calculated for are defined below. ▪ Residential D welling Units : All residential dwelling units, inclu ding detached and attached one-unit dwellings and all multifamily dwellings including apartments, duplexes, and condominiums.
▪ Commercial: All commercial, retail, educational, and service development ▪ Office: All general, professional, and medical office development ▪ Industrial: All manufacturing, distribution, and other industrial development. ▪ Warehousing: All warehouse development, including distribution facilities.
Some developments m ay includ e m ore th an one land use type, such as a mixed-use development with both multifamily and commercial uses. In those cases, the facilities fee would be calculated separately for each land use type.
The City has the dis cretion to determine which land use type best ref lects a de velopment project’s characteristics for purposes of imposing an impact fee and may adjust fees for special or unique uses to reflect the im pact characteris tics of the use . If a project results in t he intensification of use, at i ts discre tion, the City can charge the project the difference in fees between the existing low intensity use and the future high intensity use.
Impact Fees for Accessory Dwelling Units
The California State Legi slature recently amended requirements on local agencies for the imposition of development impact fees on accessory dwelling units (ADU) with Assembly B ill AB 68 in 2021. The amendment to California Government Co de §65852.2(f)(2) stipulates that local agencies may not impose any impact fees on ADU less than 750 square feet. ADU greater than 750 square feet can be charged impact fees in proportion to the size of the primary dwelling unit. 957
City of Richmond Development Impact Fee Nexus Study Update
10 Calculating Impact Fees for Accessory Dwelling Units For ADU s greater t han 750 squar e feet, impact fees can be charged as a per centage of the single family impact fee. The formula is:
𝐴𝐷𝑈 𝑆𝑞𝑢𝑎𝑟𝑒 𝐹𝑒𝑒𝑡
𝑃𝑟𝑖𝑚𝑎𝑟𝑦 𝑅𝑒𝑠𝑖𝑑𝑒𝑛𝑐𝑒 𝑆𝑞𝑢𝑎𝑟𝑒 𝐹𝑒𝑒𝑡 × 𝑆𝑖𝑛𝑔𝑙𝑒 𝐹𝑎𝑚𝑖𝑙𝑦 𝐼𝑚𝑝𝑎𝑐𝑡 𝐹𝑒𝑒 = 𝐴𝐷𝑈 𝐼𝑚𝑝𝑎𝑐𝑡 𝐹𝑒𝑒
In the case of an 800 square foot ADU and a 1,600 square foot primary r esidence, the impact fees would be 50 percent (800 square fee t / 1,600 square feet = 50% ) of the single family dwelling unit fee.
Existing and Future Development
Table 2.1 shows the estimated number o f residen ts, dwell ing unit s, employees, a nd building square feet in Richmond, both in 2023 and in 2040. The base year estima tes of household residents and dwelling units come from th e California Department of Finance. The 2040 projection of residents was identified in the Association of Bay Area Government’s (ABAG) 2016- 2040 RTP/SCS Final Growth Forec ast. The projection of total dwelling units in 2040 is based on increasing the supply of dwelling units proportionally to the pr ojected increase in population . This analysis ass umes that the same r atio of single family to multifamily will be maint ained as development occurs.
Base year employees were estimated based on the latest data from the US Census’ OnTheMap application and exclude 2,138 local government (public admi nistration) employees. Total projected workers in 2040 are identified by ABAG. The projected 2040 proportion of workers by land use is held co nsistent with curre nt estimates. The estimates of nonresidential building square feet were estimated by dividing employee counts by the occupancy density factors presented in the following table.
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City of Richmond Development Impact Fee Nexus Study Update
11 Table 2.1: Existing and New Development
2023 2040 Increase
Residents1 111,924 164,220 52,296
Dwelling Units2
Single Family 25,125 36,865 11,740
Multifamily 15,746 23,103 7,357
Total 40,871 59,968 19,097
Employment3
Commercial 9,899 22,181 12,282
Office 8,695 19,483 10,788
Industrial 8,993 20,151 11,158
Total 27,587 61,815 34,228
Building Square Feet (1,000s)4
Commercial 4,669 10,463 5,793
Office 2,667 5,976 3,309
Industrial 7,753 17,372 9,619
Total 15,089 33,811 18,722
Sources: Table 2.2; ABAG 2016-2040 RTP/SCS Final Grow th Forecast by Jurisdiction; California Department of Finance (DOF), Table E-5, 2023; U.S.
Census Bureau, OnTheMap Application, http://onthemap.ces.census.gov; Willdan Financial Services.
4 Equivalent building square footage estimated by dividing employees by occupancy density factors.
1 Current population from California Department of Finance (DOF).
Projection total for 2040 from ABAG.
2 Current values from DOF. Total dw ellings units projection is based on maintaining current ratio of dw elling units to population. 3 Base year from OnTheMap Applicaion. Projection from ABAG allocated to land uses based on current proportions
Occupant Densities
All f ees i n this re port are calculated bas ed on the assumed square footage of the average dwelling unit or nonresidential building square feet . Occupa nt density a ssumptions ens ure a reasonable relationship between the size of a devel opment project, the i ncrease in service population associated with the project, and the amount of the fee.
Occupant densities (residents per average dwelling unit or worker s per bu ilding square foot) are the most ap propriate c haracteristics to use for most impact fees. The fee impose d sho uld b e based o n the la nd use type that most closely represents the proba ble occ upant density of the development. The occupancy factors are shown in Table 2.2 . The residential density factor is based on data for Richmond from the 2021 U.S. Census’ American Community Survey, the most recent data available . The nonr esidential occupancy factors are derived f rom d ata from the Institute of Traffic Engineers Trip Generation Manual, 11th Edition. 959
City of Richmond Development Impact Fee Nexus Study Update
12 Table 2.2: Occupant Density Assumptions
Residential 2.72 Residents per Dwelling Unit
Nonresidential
Commercial 2.12 Employees per 1,000 square feet
Office 3.26 Employees per 1,000 square feet
Industrial 1.16 Employees per 1,000 square feet
Warehousing 0.34 Employees per 1,000 square feet Sources: U.S. Census Bureau, 2021 American Community Survey 1-Year Estimates, Tables B25024 and B25033; ITE Trip Generation Manual, 11th Edition; Willdan Financial Services.
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13 3. Sewer Facilities
This chapter details an analysis of the need for sewer facilities to accommodate growth within the City of Richmond. The projects and asso ciated costs in this c hapter were identified in the City’s 2016 WWTP Facility Plan. It documents a reasonable relationship between new development and a sewer facilities impact fee to fund facilities to serve new development.
Service Area
Unlike the other facility categories included in this nexus study, the City’s sewer facilities do not serve the entir e City. The Richmond Municipal Sewer District (RMSD) serves approximately 14 square miles within the City of Richmond. Two other sewer districts provide service to the other areas of the City. Consequently, this fee is calculated based on demand from existing and new development within the RMSD boundaries and cannot be charged in other areas of the City.
Sewer Demand
Estimates of new development and its consequent increased sewer demand provide the basis for calculating the sewer facilities fee . The need f or sewer facilities improv ements is based on the sewer demand place d on t he sys tem by develop ment. A typical measure of de mand is a flow generation rate, expressed as the number of gallons per day genera ted by a specific type of land use. Flow generation rates are a reasonable measure of demand on t he City’s system of sewer improvements because t hey r epresent the average rate of de mand that will be placed on the system per land use designation.
Table 3.1 shows the calculation of equivalent dwelling unit (EDU) demand fa ctors based on flow generation by land use category. The flow g eneration estimates based on data from the City’s Sanitary Sewer Master Plan. EDU factors express water flow from each land use in terms of the flow generated by a single family dwelling unit.
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City of Richmond Development Impact Fee Nexus Study Update
14 Table 3.1: Sewer Demand by Land Use
Land Use Type
Flow
Generation
(GDP/NA)1 Density2
Average
Flow
Generation/
DU, KSF
Equivalent
Dwelling
Unit (EDU)
Residential - per Dwelling Unit
Single Family n/a n/a 165.00 1.00
Multifamily 3,000 25.00 120.00 0.73
Nonresidential - per 1,000 Square Feet
Commercial 1,000 21.78 45.91 0.28
Office 1,000 17.42 57.39 0.35
Industrial 1,000 10.89 91.83 0.56
Warehousing 1,000 10.89 91.83 0.56
1 Gallons per day per net acre.
2 Dw elling units for residential and thousand building square feet for nonresidential. Based on General Plan density assumptions and minimum FAR of 0.5 for commercial, 0.4 for office and 0.25 for light industrial.
Sources: City of Richmond Sanitary Sew er Master Plan Nov. 2011: Table 3-2; Willdan Financial Services.
EDU Generation by New Development
Table 3.2 shows the e stimated EDU generation from new development through 2040. The EDU factors fr om Table 3.1 are multiplied by the land use assumptions specific to the RMSD boundaries to estimate total EDUs in the base year, at the pla nning horizo n and for new development within the District. New development will generate approximately 18,423 new EDUs through 2040, comprising 39.2% of sewer demand in the City at that time. 962
City of Richmond Development Impact Fee Nexus Study Update
15 Table 3.2: Sewer Facilities Equivalent Dwelling Units EDU
Factor1
Existing2
(DU/KSF)
Projected
Growth3
(DU/KSF)
Existing
EDUs
Growth in
EDUs Total
Residential - Dwelling Units
Single Family 1.00 17,881 8,953 17,881 8,953 26,834 Multifamily 0.73 8,051 4,032 5,877 2,943 8,820 Subtotal 25,932 12,985 23,758 11,896 35,654 Nonresidential - 1,000 Square Feet
Commercial 0.28 3,360 4,536 941 1,270 2,211 Office 0.35 1,758 2,373 615 831 1,446 Industrial 0.56 5,856 7,904 3,279 4,426 7,705 Subtotal 10,974 14,813 4,835 6,527 11,362 Total 28,594 18,423 47,017
Percent of Total 60.8% 39.2% 100.0%
1 Per dw elling unit (residential) or thousand building square feet (nonresidential) Sources: ESRI Business Analyst; OnTheMap; Tables 2.1 and 3.1, Willdan Financial Services. 2 Existing dw elling units in Richmond Municipal Sew er District (RMSD) estimated using GIS analysis w ith ESRI Business Analyst. Based on ACS data. Existing equivalent building square feet estimate using GIS analysis using existing sew er district boundaries and employment data from OnTheMap. Jobs converted to equivalent building square feet using employment density factors from Table 2.2. 3 Projected development estimated in RMSD using cityw ide residential and nonresidential average compound grow th rates from 2022 to 2040 applied to development w ithin sew er district.
Facility Needs and Costs
Table 3.3 identifies the planned sewer facilities to be funded by the fee. The new sewer facilities were all identified in the City ’s 2016 WWTP Facili ty Plan. Since sewer facilities projects will benefit both existi ng development an d ne w development, capacity expan ding project s a re allocated to new development based on new development ’s share of sewer demand at the planning horizon. Projects that do not expand capacity are not allocated to the impact fee. 963
City of Richmond Development Impact Fee Nexus Study Update
16 Table 3.3: Sewer Facilities Allocation to New Development Escalated
Cost Estimate1
Allocation to
New
Development
Costs
Allocated to
New
Development
Waste Water Treatment Plant 2020-2040 2
CRITICAL PROJECTS 2020
1.5 Dewatering Facility 12,135,200$ 39.2% 4,756,998$
NEAR-TERM PROJECTS 2021-2025
2.1 Level 1 Nutrient Removal Improvements $ 1,712,200 39.2% $ 671,182
2.10 Site Protection from Rock Slides 2,140,200 39.2% 838,958
2.11 Low-Lift Effluent Pump Station 7,847,500 39.2% 3,076,220 LONG-TERM PROJECTS 2026-2045
3.1 Level 2 Nutrient Removal Improvements 195,760,500$ 39.2% 76,738,116$
3.2 Level 3 Nutrient Removal Improvements 120,281,400 39.2% 47,150,309
3.3 Wet Weather Improvements 193,049,500 39.2% 75,675,404
3.4 Digested Sludge Storage (to support dewatering) 8,703,600 39.2% 3,411,811
3.5 Biosolids Post-Processing (Dryer Facility) 42,519,400 39.2% 16,667,605 Total Project Cost 584,149,500$ 228,986,604$
1 Project Cost Estimates adjusted to 2023 construction costs using ENR BCI. 2 Richmond WWTP Facility Plan Final Draft 2016.10.7 Appendix A - CIP Summary Source: City of Richmond: WWTP Facility Plan, 2016: Engineering New s Record Building Cost Index; Wildan Finacial Services
Cost per EDU
The cost of planned facil ities allocated to new develo pment in Table 3.3 is divided by the to tal growth in EDUs to determine a cost per EDU. Table 3.4 displays this calculation.
Table 3.4: Cost per EDU
Costs Allocated to New Development 228,986,604$
Less Existing Fund Balance 277,985
Net Cost Allocated to New Development 228,708,619$
Growth in EDUs 18,423
Cost per EDU 12,414$
Sources: Tables 3.2 and 3.3.
Fee Schedule
The maxim um justified fee for sewer facilities is show n in Table 3.5. The cost per EDU is converted to a fee per unit of new developm ent based on the EDU factors shown in Table 3.1.
The fee per average dwelling unit is converted into a fee per sq uare foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The to tal fe e includes an administrative charge to fund costs that include: (1) a standard overhead charge applied to all City programs for legal, acco unting, and other departmental and administrative support, (2) capital planning, programming, project management costs associated with the share of p rojects funded by the f acilities fee, and (3) fee program administrative co sts 964
City of Richmond Development Impact Fee Nexus Study Update
17 including revenue collection , revenue an d cost accountin g, mandated p ublic reporting , and fee justification analyses.
Table 3.5: Maximum Justified Sewer Facilities Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per
EDU
EDU
Factor
Base
Fee 1
Admin
Charge1, 2 Total Fee 1
Fee per Sq.
Ft.3
Residential Dwelling Unit4 12,414$ 0.92 11,421$ 228$ 11,649$ 7.98$ Nonresidential - per 1,000 Sq. Ft.
Commercial 12,414$ 0.28 3,476$ 70$ 3,546$ 3.55$ Office 12,414 0.35 4,345 87 4,432 4.43 Industrial 12,414 0.56 6,952 139 7,091 7.09 Warehousing 12,414 0.56 6,952 139 7,091 7.09 1 Fee per average sized dw elling unit or per 1,000 square feet of nonresidential. 4 Average EDU factor per residential dw elling unit w eighted by projected single family and multifamily development.
Sources: Tables 3.1 and 3.4; Willdan Financial Services. 2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, 3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
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18 4. Parks and Recreation Facilities
The purpose of t he parks and recreation facilities impact fee is to fund t he parks and recreation facilities needed to serve new development. The maximum justified im pact f ee is pre sented based on the existing standard of parks and recreation facilities per capita.
Service Population
Park a nd recreat ion facilities in Richmond primarily serve resi dents. Therefore, demand for services and associa ted facilities is based on th e City’s residential populati on. Table 4.1 shows the existing and future projected service population for park and recreation facilities.
Table 4.1: Park and Recreation
Facilities Service Population
Residents
Existing (2023) 111,924
Growth (2023 - 2040) 52,296
Total (2040) 164,220
Source: Table 2.1.
Existing Parkland Inventory
The City of Richmond maintains several park and recreation facilities throughout the city. Table
4.2 summarizes the City’s existing parkland inventory in 2023. All facilities are located within the City limits. In total, the inventory includes a total of 322.33 acres of improved parkland. 966
City of Richmond Development Impact Fee Nexus Study Update 19 Table 4.2: Parkland Inventory
Park Name Total Acres
Community Parks
B.T. Anderson Jr. Park 22.00
Central Richmond Greenway 11.00
Hilltop Lake Park 36.00
La Moine Park 22.00
Marina Bay Park 11.00
Martin Luther King Jr. Park 13.00
Nichol Park 21.00
Pt. Molate Beach Park 25.00
Subtotal 161.00
Joint Use Parks
Central Park 2.60
Fairmede Park 12.00
Hilltop Park 6.70
Olinda School Field 2.00
Valley View School Fields 11.00
Subtotal 34.30
Pocket Parks
Abraham Braxton Park 0.60
Bay Vista Park 0.70
Clinton Play lot 0.20
Elm Playlot 0.50
Humboldt Park 0.40
Humphrey Play Lot 0.20
Huntington Park/Senior Annex 0.30
Janice Play Lot 0.10
Kern Play Lot 0.30
Mendocino Play Lot 0.40
Monterey Play Lot 0.50
Moody Underpass Park 0.73
Sheridan Observation Poin 1.00
Solano Play Lot 0.20
Stewart Playground 0.80
Virginia Play Lot 0.20
Subtotal 7.13
Source: City of Richmond: Richmond Parks Master Plan Dec 22, 2010, Parks and Recreation Richmond Master Plan 2030
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City of Richmond Development Impact Fee Nexus Study Update 20 Table 4.2: Park Land Inventory Continued
Park Name Total Acres
Neighborhood Parks
Atchison Village Park 4.30
Barbara & Jay Vincent Park 6.00
Belding-Garcia Park 2.00
Boorman Park 4.00
Burg Park 1.00
Country Club Vista 2.60
Crescent Park 3.10
Harbor 8 Park 1.00
Hilltop Green Park 6.30
John F. Kennedy Park 4.80
Judge Carroll Park 2.50
Lucas Park 7.20
Lucretia Edwards Park 2.00
Marina Bay Trails 18.00
Mira Vista Park 1.70
Miraflores 4.30
Nevin Park 4.40
North Richmond Ball Field 8.20
Parchester Park 2.10
Rain Cloud Park 1.40
Rosie The Riveter Park 2.00
Shields-Reid Park 5.90
Shimada Friendship Park 3.00
Southside Park 3.50
State Court Park 2.10
The Plunge -
Tiller Park 2.70
Unity Park 10.00
Veterans Memorial Park 1.60
Wendell Park 2.20
Subtotal 119.90
Total 322.33
Source: City of Richmond: Richmond Parks Master Plan Dec 22, 2010, Parks and Recreation Richmond Master Plan 2030
Parkland and Park Facilities Unit Costs
Table 4.3 displays the unit costs neces sary to develop parkland in Richmond. The la nd cost assumption was based on an analysis of land sales comparisons from 2020, 2021 and 2022 within the City of Richmond using data from CoS tar. An estimate of $ 748,000 per acre for standard parkla nd improvements is based on Willdan’s experience with other recent cl ients in California. In total, it costs over $2 million to acquire and impr ove an acre of park land in Richmond.
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City of Richmond Development Impact Fee Nexus Study Update 21 Table 4.3: Park Facilities Unit Costs
Cost
Per Acre
Share of
Total Costs
Standard Park Improvements1
748,000$
Subtotal - Improvements 748,000$ 37%
Land Acquisition2 1,266,000$ 63%
Total Cost per Acre 2,014,000$ 100%
2 Based on recent sales comparison data from CoStar.
1 Improvement costs are estimated at $748,000 per acre for site improvements (curbs, gutters, w ater, sew er, and electrical access), plus basic park and school field amenities such as basketball or tennis court, parking, tot lot, irrigation, turf, open green space, pedestrian paths, and picnic tables. Excludes special use facilities such as recreation centers, structures and pools.
Sources: Table 4.3; San Diego County Parks and Recreation: Prototypical Park Cost Estimate; CoStar; Willdan Financial Services.
Park Facility Standards
Park facilit y standards establish a re asonable relati onship between ne w developm ent and the need for expanded park fa cilities. Information regarding the Cit y’s existing inventor y of exist ing parks facilities was obtained from City staff.
The most comm on measure in cal culating new developm ent’s demand for par ks is the ratio o f park acr es per resident. In general, f acility standards may be b ased on a jurisdicti on’s existing inventory of park facilities, o r an adop ted policy stan dard conta ined in a master facility plan or general plan. Facility standards may also be based on a l and dedication standard established by the Quimby Act.1
Quimby Act Standard
The Quimby Act specifies that the dedication requirement must be a minimum of 3.0 acres and a maximum of 5.0 acres per 1,0 00 residents. A juris diction can require residential devel opers to dedicate above the three-acre minimum if the jurisdiction’s existing park sta ndard at the time it adopted its Quimby Act ordinance justifies the higher level (up to five ac res per 1,000 res idents).
The standard used must also conf orm to the jurisd iction’s a dopted general or specific pla n standards.
The Quimby Act only applies to land subdivisions. The Quimby Act would not apply to residential development on f uture approved p rojects on single parcels, such as apa rtment complexes and other multifamily development.
The Quimby Act allows payment of a fee in lieu of land dedication. The fee is calculated to fund acquisition of the same amount of land that would have been dedicated.
The Quimby Ac t allows use of in -lieu fe e revenue for a ny park or recrea tion facil ity purpose.
Allowable uses of this revenue include land acquisition, park i mprovements including recreation
1 California Government Code §66477.
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City of Richmond Development Impact Fee Nexus Study Update 22 facilities, and rehab ilitation of ex isting par k and recreation facilities. The Quimby Act generally requires that fees be used for neighb orhood and community park acreage to serve the subdivision, except in limited circumstances.
City of Richmond Park Facilities Standards
Table 4.4 shows the existing standard for improved park acreage pe r 1,000 residents based on the type of parkl and. In total the City has an existing parkland standard of 2.88 acres per 1 ,000 residents, which is less than the minimum Quimby standard of 3.0 acres per 1,000 residents. The impact fee analysis in this repor t will be based o n maintaining the C ity’s 2.88 acre p er 1,000 resident standard as new development adds demand for parks in Richmond. Fees in-lieu of land dedication for subdivisions are calculated at the minimum Quimby standard o f 3.0 ac res of developed parkland per 1,000 residents.
Table 4.4: Parkland Standards
Park Acres 322.33
Service Population (2023) 111,924
Existing Standard (Acres per 1,000 Residents) 2.88
Quimby Standard (Acres per 1,000 Residents) 3.00
City Policy Standard (Acres per 1,000 Residents) 3.00
Sources: City of Richmond; Tables 4.1 and 4.2, Willdan Financial Services.
Facilities Needed to Accommodate New Development
Table 4.5 shows the park fa cilities needed to accomm odate new deve lopment at the exist ing standard. To achieve the stand ard by the plannin g horizon , depending on the amount of development subject to the Quimby Act, new development must fu nd the purchas e and improvement of between 150.61 and 156.89 parkland a cres, at a tot al cost ranging betwe en $303.3 and $311.3 million.
The facility standards and resulting fees under the Quimby Act are higher because development will be charged t o provide 3.0 acres of park land per 1,000 residents, a nd 2.88 acres of improvements, whereas d evelopment not subjec t to the Quimby Act will be charged to provide only 2.88 acres of parkland per 1,000 residents, and 2.88 acres of improvements. Since the exact amount of development that will be subject to the Q uimby fees is unknown at this time, Table 4.5 presents the rang e of total facility cos ts t hat may be incurred depending on t he a mount of development subject to the Quimby Act.
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City of Richmond Development Impact Fee Nexus Study Update 23 Table 4.5: Park Facilities to Accommodate New Development Calculation Parkland Improvements Total1
Parkland (Mitigation Fee Act) & Improvements (Mitigation Fee Act) 2 Facility Standard (acres/1,000 capita) A 2.88 2.88 Service Population Growth (2023-2040) B 52,296 52,296 Facility Needs (acres) C = A x B 150.61 150.61 Average Unit Cost (per acre) D $ 1,266,000 $ 748,000 Total Cost of Facilities E = C x D $190,672,000 $ 112,656,000 $303,328,000 Parkland (Quimby Act), Improvements (Mitigation Fee Act) 3 Facility Standard (acres/1,000 capita) A 3.00 2.88 Service Population Growth (2023-2040) B 52,296 52,296 Facility Needs (acres) C = A x B 156.89 150.61 Average Unit Cost (per acre) D $ 1,266,000 $ 748,000 Total Cost of Facilities E = C x D $198,623,000 $ 112,656,000 $311,279,000 Note: Totals have been rounded to the thousands.
Sources: Tables 4.1, 4.3 and 4.4.
1 Values in this column show the cost of parkland acquisition and development in orer to meet the existing 3.0 acre standard under either the Quimby Act or the Mitigation Fee Act.
3 Cost of parkland to serve new development show n if all development is subject to the Quimby Act. The Quimby Fee applies anytime the Subdivision Map Act is applied. Under the Quimby Act, an in-lieu fee is charged at 3.0 acres per 1,000 residents; improvements charged at the existing standard. If a subdivision has less than 50 units, then the Quimby "in-lieu" fee w ill apply. If a subdivision has more than 50 units, then the developer has the option of dedicating land to meet its Quimby parkland requirements or paying the fee. 2 Cost of parkland to serve new development show n if all development is subject to the Mitigation Fee Act. Parkland and improvements are charged at the existing standard.
Park Facilities Cost per Capita
Table 4.6 shows the cost per capi ta of providing new park facilities at the Quimby standard, and the existing facility standard. The cost per capita is shown separately for land and improvements.
The costs per capita in this table will serve as the basis of three fees:
• A Quimby Act Fee in -lieu of parkland dedi cation. This fee is payable by residentia l development occurring in subdivisions.
• A Miti gation Fee A ct F ee for parkland acquisi tion. This fee is p ayable by resid ential development not occurring in subdivisions.
• A Mitigation Fee Act Fee for parkland improvements. This fee is payable by all residential development.
A development project pays either the Quimby Act Fee in-lieu of land dedication, or the Mitigation Fee Act Fee for land acqu isition, not both. A ll development projects pay the Mitigat ion Fee Act Fees for park improvements.
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City of Richmond Development Impact Fee Nexus Study Update 24 Table 4.6: Park Facilities Investment per Capita
Improvements
Calculation Quimby Fee Impact Fee Impact Fee
Cost per Acre A 1,266,000$ 1,266,000$ 748,000$
Facility Standard B 3.00 2.88 2.88 Investment Per Capita C = A / B 3,798$ 3,646$ 2,154$ Sources: Tables 4.3 and 4.4.
Land
Use of Fee Revenue
The City plans to use pa rk and r ecreation facilities fee revenue to p urchase parkland and open space and construct improvements t o ad d to the s ystem of park facilities that s erves new development. The City may only use impact fee revenue to provide facilitie s and intensify usage of existing faci lities needed to serve new development. The City should program fee revenue to capacity expanding projects annually through its CIP and budget process.
Fee Schedule
To calculate fees by land use type, the inve stment in park facilities is determined on a per resident basis for parkland acquisition , and parkland improvements. These investment fa ctors (shown in Table 4.6) are based on the uni t cost estimates and the City ’s existing facility standards.
Table 4.7 shows the maxim um justified park and recr eation facilities fee based on the existing standard per capita under th e Quimby Act and under the existing park standard under the Mitigation Fee Act, respectively. The investment per capita is converted to a fee per dwelling unit using the occupancy density factor from Table 2.2. The fee per average dwelling unit is converted into a fee per sq uare foot by dividing the fee per dw elling unit by the assumed average square footage of a dwelling unit.
The total fee includes an administra tive charge to fund costs that in clude: (1) legal, accounting, and othe r a dministrative support and ( 2) imp act fee progra m adminis trative costs including revenue collection, revenue, and cost accounting, mandated public reporting, and fee justification analyses.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers the c ost of fee pro gram adm inistration. The administ rative charge should be re viewed a nd adjusted during compreh ensive i mpact fee updates to ensure that revenue generated fr om the charge sufficiently covers, but does not exc eed, the administrative costs associated with the f ee program.
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City of Richmond Development Impact Fee Nexus Study Update 25 Table 4.7: Maximum Justified Park Facilities Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Base Admin Fee per
Land Use Capita Density Fee Charge1 Total Fee Sq. Ft.3 Residential Dwelling Unit - Subdivisions
Quimby Fee In Lieu of
Land Dedication 3,798$ 2.72 10,331$ 207$ 10,538$ 7.22$ Improvements 2,154 2.72 5,859 117 5,976 4.10 Total 5,952$ 16,190$ 324$ 16,514$ 11.32$ Residential Dwelling Unit - Infill
Parkland Acquisition 3,646$ 2.72 9,917$ 198$ 10,115$ 6.93$ Improvements 2,154 2.72 5,859 117 5,976 4.10 Total 5,800$ 15,776$ 315$ 16,091$ 11.03$ Sources: Tables 2.2 and 4.6.
3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
1 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analyses.
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26 5. Community Center and Aquatic
Facilities
The following chapter docu ments the nexus analysis, demonstrating the need for new recreation and community center facilities demanded by new development.
Service Population
Community center and aquatic facilities in Richmond primarily serve residents so this analysis assumes that demand for services and associated facilities is based on the City ’s residential population. Table 5.1 shows the existing and future pro jected residential population for community center and aquatic facilities . These facilities primarily serve resi dents so the se rvice population is based on the existing and projected residents of the City.
Table 5.1: Community Center and
Aquatic Facilities Service Population
Residents
Existing (2023) 111,924
Growth (2023 - 2040) 52,296
Total (2040) 164,220
Source: Table 2.1.
Existing Recreation and Community Center Facilities
Inventory
The City of Richmond maintains several community center and aquatic facilities. Table 5.2 summarizes the City’s exi sting community center and aquatic facilities building inventory. All facilities are located within the City limits. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each facility was adjusted for inflation to its current replacement cost using the Engineering News Record’s Building Cost Index. 974
City of Richmond Development Impact Fee Nexus Study Update 27 Table 5.2: Existing Community Center and Aquatic Facilities Building Inventory
A B C = A x B
Facility Address
Date
Acquired
Building
Cost
Cost
Index
Replacement
Cost1
Community Centers
Richmond Annex Senior Center 5801 Huntington Avenue 01/01/37 13,300$ 39.52 525,600$ Richmond Annex Senior Center Renovation 5801 Huntington Avenue 06/11/09 25,850 1.59 41,200 Booker T. Anderson Jr. Community Center 960 South 47th Street 06/30/04 294,361 1.85 545,000 Booker T. Anderson Jr. Community Center Restroom Building 960 South 47th Street 06/30/04 65,648 1.85 121,500 Booker T. Anderson Jr. Community Center Renovation 960 South 47th Street 01/01/80 2,525 3.71 9,400 Developing Personal Resources Center 1900 Barrett Avenue 01/01/79 288,647 4.01 1,157,800 Crescent Park Child Care 5050 Hartnett Ave, 01/01/70 161,464 8.21 1,326,100 May Valley Community Center 3530 Morningside Drive 01/01/80 153,740 3.71 570,800 Richmond Recreation Complex / Memorial Youth Center 3230 MacDonald Avenue 01/01/49 1,100,000 20.76 22,837,900 Richmond Recreation Complex / Memorial Youth Center Labor & Mats 3230 MacDonald Avenue 05/10/00 4,498 2.18 9,800 Richmond Recreation Complex / Memorial Youth Center Upgrade 3230 MacDonald Avenue 06/30/99 11,010 2.20 24,200 Richmond Recreation Complex / Memorial Youth Center Renovation 3230 MacDonald Avenue 06/11/09 296,820 1.59 473,300 Nevin Community Center 598 Nevin Ave 01/01/77 449,929 4.71 2,117,900 Nevin Community Center Renovation 598 Nevin Ave 06/11/09 160,859 1.59 256,500 Parchester Community Center 900 Williams drive 01/01/73 144,459 6.46 933,400 Parchester Community Center Renovation 900 Williams drive 06/11/09 226,107 1.59 360,500 Shield-Reid Community Center 1410 Kelsey Street 01/01/79 498,907 4.01 2,001,200 Shield-Reid Community Center Renovation 1410 Kelsey Street 06/11/09 214,657 1.59 342,300 Richmond Senior Center 2525 Macdonald Avenue 01/01/77 1,341,128 4.71 6,312,900 Total Replacement Value - Community Centers 39,967,300$ Aquatic Centers
Richmond Plunge Aquatic Center Restoration 1 E Richmond Ave 08/31/10 5,928,790 1.54 9,126,000$ Richmond Plunge Aquatic Center 1 E Richmond Ave 01/01/26 184,600 41.86 7,727,000 Kennedy Swim Center 4300 Cutting Blvd 04/23/99 4,300,000 2.20 9,459,800 Kennedy Swim Center Construction Cost 4300 Cutting Blvd 06/30/99 185,720 2.20 408,600 Kennedy Swim Center Construction Cost 4300 Cutting Blvd 06/30/99 851,479 2.20 1,873,200 Total Replacement Value - Aquatic Centers 28,594,600$
Total Replacement Value - Community and Aquatic Centers 68,561,900$ 1 Original facility cost, building construction cost escalated to 2022 cost.
Source: City of Richmond; Engineering New s Record Building Cost Index; Willdan Financial Services.
Table 5.3 displays the City’s inventory of community center and aquatic facilities land assets. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each site was adjusted for inflation to its current replacement cost using the Consumer Price Ind ex for All Urban Consumers (CPI-U).
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City of Richmond Development Impact Fee Nexus Study Update 28 Table 5.3: Existing Community Center and Aquatic Facilities Land Inventory
Date A B C = A x B
Facility Address
Acquired Land Cost Cost Index Land Value 1
Community Centers
Richmond Annex Senior Center 5801 Huntington Avenue 01/01/51 1,660$ 10.85 18,000$ Booker T. Anderson Jr. Community Center 960 South 47th Street 04/05/62 27,080 9.40 254,400 Booker T. Anderson Jr. Community Center 960 South 47th Street 01/01/54 11,050 10.73 118,500 Disabled Peoples Recreation Center 1900 Barrett Avenue 06/11/57 9,500 9.95 94,500 Crescent Park Child Care 5050 Hartnett Ave, 04/07/71 194,240 6.88 1,336,000 May Valley Community Center 3530 Morningside Drive 05/02/60 14,740 9.62 141,700 Richmond Recreation Complex / Memorial Youth Center 3230 MacDonald Avenue 12/11/75 134,120 4.74 636,300 Shield-Reid Community Center 1410 Kelsey Street 01/01/53 7,290 10.69 77,900 Richmond Senior Center 2525 Macdonald Avenue 01/01/75 112,500 5.05 568,400 Point Richmond Community Center 139 Washington Avenue 06/15/60 25,790 9.62 248,000 Total Land Value - Community Centers 3,493,700$
-
Aquatic Centers
Richmond Plunge Aquatic Center Restoration 1 E Richmond Ave 01/01/54 18,050 10.73 193,600$ Kennedy Swim Center 4300 Cutting Blvd -
Total Land Value - Aquatic Centers 193,600$
Total Land Value - Community and Aquatic Centers 3,687,300$ 1 Original land cost, inflation adjusted to 2022.
Source: City of Richmond; US Dept of Labor: CPI Tables
Planned Recreation and Community Center Facilities
The City has one planned community center. Table 5.4 summarizes the cost o f the planned facility.
Table 5.4: Planned Community Center and Aquatic Facilities Cost Estimate
Martin Luther King Jr. Community Center 14,000,000$
Total Planned Facilities Cost 14,000,000$
Source: City of Richmond.
Cost Allocation
Existing Level of Service
Per the new nexus study r equirements that went into effect of January 1, 2022, a n exus study “shall identify the existing level of service for each public facility, identify the pr oposed new level of service, and include an explanation of why the new level of service is appropriat e.” Table 5.5 expresses the City’s current community center and aquatic facilities level of service in terms of an existing cost per capita. This cost per capita is not us ed in the fee calculation, rather it is shown here for informational purposes only.
Once the planned facilities have been constructed and new development has increased the City’s service population the resulting facility cost per capita will be lower than the cost per capita shown in Table 5.5. This lower cost per capita will drive the fee calculation. 976
City of Richmond Development Impact Fee Nexus Study Update 29 Table 5.5: Existing Level of Service
Value of Existing Facilities 68,561,900$
Value of Existing Land 3,687,300
Exsting Impact Fee Fund Balance 67,556
Total 72,316,756$
Existing Service Population 111,924
Facility Standard per Resident 646$
Sources: Tables 5.1, 5.2 and 5.3.
Future Level of Service
The approach used to calculate this fee ensures that the existing level of service will be maintained throughout the planning horizon. If implemented at the maximum justified amount, the impact fees would maintain the $646 per capita facility standard through the planning horizon.
Use of Fee Revenue
The City plan s t o use community center and aquatic facilities fee revenue to construct improvements to construct a new comm unity center that will serve new d evelopment. The planned facility is detailed above in Table 5.4. The City will have to identify additional facilities needed to maintain the existing level of service through the planning horizon. The City c an use community center and aquatic facilities fee revenues for the construction or purchase of buildings, land, vehicles and equipment that are par t of the system of community center and aquatic facilities serving new development.
Fee Revenue Projection
Table 5.6 shows a projection of fee revenue needed to maintain the existing level of service.
Additional facilities will have to be identified to maintain the level of service through the planning horizon.
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City of Richmond Development Impact Fee Nexus Study Update 30 Table 5.6: Community Center and Aquatic
Facilities Projected Fee Revenue
Cost per Capita 646$
Growth in Service Population (2023- 2040) 52,296
Fee Revenue 33,783,200$
Net Cost of Planned Facilities 14,000,000
Future Facilities to be Identified 19,783,200$
Sources: Tables 5.1, 5.4, and 5.5.
Fee Schedule
Table 5.7 shows the maximum justified community center and aquatic facilities fee schedule. The cost per capita is converted to a fee per unit of new develo pment based on dwelling unit densities (persons per dwelling). The fee per average dwelling unit is converted into a fee per sq uare foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee includes a two -percent (2% ) admi nistrative char ge to f und costs t hat incl ude: a standard overhead charge applied to City programs for legal, accou nting, and other departmental and administrative support, and fee program adm inistrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analyses.
In Willdan’s experience with impact fee pro grams, two percent of the base fee adequately covers the cost of fee program administration. The administrative charge should be reviewe d and adjusted during comprehensive impact fee updates to ensure that revenue generat ed from the charge sufficiently cov ers, but does not exceed, the administ rative costs associated with the fee program.
Table 5.7: Community Center and Aquatic Facilities Fee
A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge1, 2 Total Fee Sq. Ft.3 Residential Dwelling Unit 646$ 2.72 1,757$ 35$ 1,792$ 1.23$ Sources: Tables 2.2 and 5.4.
1 Fee per average sized dw elling unit.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification.
3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
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31 6. Police Facilities
The purpose of this fee is to ensure that new dev elopment funds its f air share of police facilities.
A fee s chedule is present ed based on the existing inventory facilities standard of police facilities in the City of Richmond to ensure that ne w development provides adeq uate funding to meet its needs.
Service Population
Police facilities ser ve both resi dents and bu sinesses. Therefore, demand for services and associated facilities are based on the City’s service population including residents and workers.
Table 6.1 shows the existing and future project ed service p opulation fo r police facilities. While specific data is not available t o estimate the actual ratio of demand pe r resident to demand by businesses (per worker) for this service, it is reasonable to assu me that d emand for these services is less for one employee compared to one resident, because nonresidential buildings are typically occupied less i ntensively than dwe lling u nits. The 0.31 -weighting factor for workers is based on a 40-hour workweek divided by the total number of non-work hours in a week (128) and reflects th e degree to which nonresidential developme nt yields a les ser demand for police facilities.
Table 6.1: Police Facilities Service Population
A B C D = A + (B x C)
Residents Workers
Worker
Demand
Factor1
Service
Population
Existing (2023) 111,924 27,587 0.31 120,500 New Development (2023-2040) 52,296 34,228 0.31 62,900 Total Development (2040) 164,220 61,815 183,400 Sources: Table 2.1; Willdan Financial Services.
1 Workers are w eighted at 0.31 of residents based on a 40 hour w ork w eek out of a possible 128 non- w ork hours in a w eek (40/128 = 0.31)
Existing Facility Inventory
Table 6.2 displays the City’s existing inventory of police facilities, which is comprised primarily of vehicles and equipment. The City operates primarily out of a leased facility, which is not included in this inventory. All fa cilities are located within the City limits. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each item included in the inventory was adjusted for inflation to its current replacement cost using the Engineering News Record’s Building Cost Index.
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City of Richmond Development Impact Fee Nexus Study Update 32 Table 6.2: Existing Police Facilities Inventory
A B C = A x B
Facility
Date
Acquired Original Cost Cost Index
Replacement
Cost1
Hilltop Mall Police Sub-Station 03/31/10 434,014$ 1.54 668,100$ Vehicles and Equipment Various Various Various 14,837,979 Total 434,014$ 15,506,079$
1 Original facility cost escalated to 2022 cost.
Source: City of Richmond; Engineering New s Record Building Cost Index; Willdan Financial Services.
Planned Facilities
The City is planning to construct a new police facility. The City’s current capital improvement plan identifies the projected cost of this facility. Table 6.3 displays the cost of the planned facility.
Table 6.3: Planned Facilities
Cost Estimate
New Police Facility 80,000,000$
Total 80,000,000$
Source: City of Richmond Capital Improvement Plan FY2023-24 through FY2027-28.
Cost Allocation
Existing Level of Service
Per the new nexus study requirements that went into effect of January 1, 2022, a nexus study “shall identify the existing level of service for each publi c facility, identify the proposed new level of service, and include an explanation of why the new level of s ervice is appropriate.” Table 6.4 expresses the City’s current police facilities level of service in terms of an existing cost per capita.
This cost per capita is not used in the fee calculat ion, rather i t is shown here for informational purposes only.
980
City of Richmond Development Impact Fee Nexus Study Update 33 Table 6.4: Police Facilities Existing Standard
Value of Existing Facilities 15,506,079$
Existing Service Population 120,500
Cost per Capita 129$
Facility Standard per Resident 129$
Facility Standard per Worker1 40
1 Based on w eighting factor in Table 6.1.
Sources: Tables 6.1 and 6.2.
Future Level of Service
Table 6.5 shows the calculation of the system facilities standard per capita for police facilities used to calculate the fees. This value is calculated by dividing the total value of all police facilities in 2040 by the total service population in 2040. The value pe r capita is multiplied by the wor ker weighting factor of 0.31 to determine the value per worker. The resulting standard is the cost standard that will be achieved when all the facilities are realized, and new development has come online.
Table 6.5: Police Facilities - System Standard
Value of Existing Facilities 15,506,079$
Value of Planned Facilities 80,000,000
Total System Value (2040) 95,506,079$
Future Service Population (2040) 183,400
Cost per Capita 521$
Cost Allocation per Resident 521$
Cost Allocation per Worker 1 162
1 Based on a w eighting factor of 0.31.
Sources: Tables 6.1, 6.2 and 6.3.
Fee Revenue Projection
Completing the planned facilities will provide a higher value of facilities per capita than is currently provided in the City. Impact fee revenue may not be used to increase the level of service provided to existing development. Therefore, impact fee revenue will not fully fund the planned facilities and some non-fee funding will be requi red. Table 6.6 shows the projected fee revenue and the non-fee funding required th rough 2040. After accounting for the projected fu ture impact fee 981
City of Richmond Development Impact Fee Nexus Study Update 34 revenue approximately $47.2 million in non-fee funding will be needed to complete the planned facilities.
The City will need to use alternative funding sources to fund exi sting development’s share of the planned civic facilities. Potential sources of revenue include but are not limited to existing or new general fund revenues, existing or new taxes, donations, and grants.
Table 6.6: Revenue Projection - System Standard
Cost per Capita 521$
Growth in Service Population (2023- 2040) 62,900
Fee Revenue 32,771,000$
Net Cost of Planned Facilities 80,000,000
Non-Fee Revenue to Be Identified (47,229,000)$
Sources: Tables 6.1, 6.3 and 6.5.
Fee Schedule
Table 6.7 shows the maximum justified police facilities fee schedule. The City can adopt any fee up to this amount. The cost per capita is co nverted to a fee per unit of new development based on dwelling unit and employment dens ities (persons per dwelling uni t or empl oyees per 1,000 square feet of nonresidential building space). The fee per average dwelling unit is converted into a fee per sq uare fo ot by dividing the fee per dw elling un it by the assumed average square footage of a dwelling unit.
The total fee includ es a two perc ent (2.0%) administrative charge t o fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and admin istrative s upport, and fee prog ram administrative costs in cluding revenue collection, revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program ad ministration. The ad ministrative charge should be reviewed and adjusted durin g comp rehensive impact fe e updates to ensure t hat revenue generated from the charge sufficiently covers, b ut does not exceed, the administrative costs associated with t he fee program.
982
City of Richmond Development Impact Fee Nexus Study Update 35 Table 6.7: Maximum Justified Police Facilities Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge1, 2 Total Fee Sq. Ft.3 Residential Dwelling Unit 521$ 2.72 1,417$ 28$ 1,445$ 0.99$ Nonresidential - per 1,000 Square Feet
Commercial 162$ 2.12 342$ 7$ 349$ 0.35$ Office 162 3.26 527 11 538 0.54 Industrial 162 1.16 187 4 191 0.19 Warehousing 162 0.34 55 1 56 0.06 Sources: Tables 2.2 and 6.5.
3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
1 Fee per average sized dw elling unit, per 1,000 square feet of nonresidential. 2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analyses.
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36 7. Fire Protection Facilities
The purpose of this fee is to ensure t hat new development funds its fai r share of fire protection facilities. A fee schedule is presented based on the existing standard of fire protection facilities in the City of Richmond to ens ure that new development provide s adeq uate fun ding to meet its needs.
Service Population
Public safety facilities serve both r esidents, visitors, and busin esses. T herefore, demand for services and associ ated facilities are ba sed on the City’s service population including residents , visitors, and workers.
Table 7.1 shows the existing and future projected service population for fire protection facilities.
Residents and workers are assume d to create different amounts of demand for fire protection facilities. To calculate service population for fire protecti on facil ities, residents are weight ed at
1.00. A worker is weighted at 0.6 1 of one resident to reflect the lower per capita need for fi re services associated with businesses. The specific 0.61 per worker weighting used here is derived from an analysis of fire services demand by residential versus nonresidential land uses in other agencies in California.
Table 7.1: Fire Protection Facilities Service Population A B C D = A + (B x C)
Residents Workers
Worker
Demand
Factor1
Service
Population
Existing Development (2023) 111,924 27,587 0.61 128,800 New Development (2023-2040) 52,296 34,228 0.61 73,200 Total (2040) 164,220 61,815 202,000
Sources: Table 2.1; Willdan Financial Services.
1 Service population w orker demand factor based on fire service call data from other Willdan clients w eighted by the relative proportions of residential and nonresidential land use in the City.
Existing Facilities Inventory
The City’s fire protection facilities inventory is comprised of the several fire stations , vehicles, apparatus, and equipment. All facilities are located w ithin the City limits. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each item included in the inventory was adjusted for i nflation to its current replacement cost using the Engineering News Record’s Building Cost Index.
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City of Richmond Development Impact Fee Nexus Study Update 37 Table 7.2: Existing Fire Protection Facilities Inventory A B C = A x B
Facility Date Acquired Building Cost Cost Index
Replacement
Cost1
Fire Station 61- 140 W Richmond Ave
Fire Station 61 01/01/68 108,795$ 9.86 1,072,200$ Retrofitting 06/02/99 16,667 2.20 36,700 Seismic Upgrade 09/23/99 248,334 2.20 546,300 Garage 01/01/70 14,581 8.21 119,800 Fire Station 62- 1065 7th St
Fire Station 62 01/01/70 156,396 8.21 1,284,400$ Re-Roofing Fire Station 62 06/30/10 179,100 1.54 275,700 Electronic Gate - Fire Station #62 01/21/09 21,000 1.59 33,500 Fire Station 63- 5201 Valley View Rd
Fire Station 63 01/01/92 906,605 2.60 2,356,000$ Trash Enclosure 01/01/92 1,655 2.60 4,300 Fire Station 64- 4801 Bayview Avenue
Fire Station 64 08/16/74 309,742 5.96 1,846,500$ Garage 01/01/74 36,410 5.96 217,100 Re-Roofing Fire Station 64 06/30/11 183,078 1.50 275,500 Electronic Gate - Fire Station #64 01/21/09 24,200 1.59 38,600 Fire Station 66- 4100 Clinton Avenue
Fire Station 66 01/01/68 52,068 9.86 513,100$ Garage 01/01/68 4,139 9.86 40,800 Fire Station 67- 1131 Cutting Blvd
Fire Station 67 01/01/53 118,607 17.46 2,070,500$ Garage 01/01/53 10,842 17.46 189,300 Electronic Gate - Fire Station #67 01/21/09 35,100 1.59 56,000 Fire Station 68- 2904 Hilltop Drive
Fire Station 68 01/01/81 348,552 3.49 1,214,700$ Garage 01/01/81 37,088 3.49 129,300 Fire Station 68-Laundry & Restroom 07/01/15 16,740 1.38 23,100 Electronic Gate - Station #68 01/21/09 30,000 1.59 47,800 Fire Training Facility- 3506 Cutting Blvd
Training Tower 01/01/53 31,742 17.46 554,100$ School Building 01/01/53 42,537 17.46 742,600 Smoke House 01/01/53 3,017 17.46 52,700 Youth Academy Building 01/01/53 91,847 17.46 1,603,300 Electronic Gate - Fire Training Center 01/21/09 37,400 1.59 59,600 Office/Storage Trailer 11/14/13 24,500 1.41 34,600 Total Replacement Value 15,438,100$
1 Original facility cost escalated to 2022 cost.
Source: City of Richmond; Engineering New s Record Building Cost Index, 1920 - 2022
985
City of Richmond Development Impact Fee Nexus Study Update 38 Table 7.3 displays the C ity’s inventory of fire protection facilities land assets. The City provided an asset schedule for us e in this analysis. The original acquisition cost of each site was adjusted for inflation to its c urrent replacement cost using the Consumer Price Ind ex for All Urban Consumers (CPI-U).
Table 7.3: Existing Fire Facilities Land Inventory
A B C = A x B
Facility Address
Date
Acquired Land Cost Cost Index
Replacement
Cost1
Fire Station 62 1065 7th St 10/26/72 19,640 6.46 126,900$ Fire Station 63 5201 Valley View Rd 01/22/90 125,820 2.83 356,100 Fire Station 64 4801 Bayview Avenue 03/08/72 35,040 6.84 239,700 Fire Station 66 4100 Clinton Avenue 01/01/48 1,610 22.12 35,600 Fire Station 67 1131 Cutting Blvd 05/25/60 127,500 13.71 1,747,700 Total Land Value 2,506,000$
1 Original land cost inflation adjusted to 2022.
Source: City of Richmond; Engineering New s Record Building Cost Index; Willdan Financial Services.
Table 7.4 displays the Ci ty’s current inventory of fire protection vehicles , apparatus, and equipment. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each item was adjusted for inflation to its current replacement cost using the Consumer Price Index for All Urban Consumers (CPI-U).
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City of Richmond Development Impact Fee Nexus Study Update 39 Table 7.4: Existing Fire Vehicles, Apparatus and Equipment A B C = A x B
Equipment Date Acquired
Acquisition
Cost Cost Index
Replacement
Cost1
Stationary Compressor 4/5/2021 68,629$ 1.00 68,600$ Spartan Tiller Truck 11/22/2021 1,230,660 1.00 1,230,700 2020 Ford Hybrid Explorer 12/3/2020 38,484 1.00 38,500 2021 Ford Hybrid Explorer 12/3/2020 38,484 1.00 38,500 Spartan Pumper Gladiator Truck 8/31/2020 725,993 1.04 757,100 Spartan Pumper Gladiator Truck 7/31/2020 725,993 1.04 757,100 Ford Hybrid Explorer 12/3/2020 38,484 1.00 38,500 Ward Diesel Exhaust Removal System 1/30/2018 57,416 1.12 64,600 Diesel Exhaust Removal Systems 10/5/2016 57,416 1.14 65,700 2015 Ford Explorer 6/1/2015 30,512 1.20 36,600 2015 Ford Explorer 6/1/2015 30,512 1.20 36,600 2015 Ford Explorer 6/1/2015 30,512 1.20 36,600 2015 Chevrolet Tahoe 11/19/2014 37,917 1.20 45,400 2015 Chevrolet Tahoe 11/19/2014 37,917 1.20 45,400 2015 Chevrolet Tahoe 11/19/2014 37,917 1.20 45,400 Spartan Heavy Rescue Apparatus 12/16/2014 397,827 1.20 476,600 Zeiss Stabilization Binocular 8/28/2013 6,277 1.21 7,600 Office/Storage Trailer 11/14/2013 24,500 1.21 29,700 2012 Ford Fusion Hybrid 2/2/2012 30,236 1.23 37,300 2012 Ford Fusion Hybrid 2/2/2012 30,236 1.23 37,300 2011 Hi-Tech/Spartan Type-1 Pumper 7/23/2012 522,721 1.23 645,100 Milnor 30015 T5X Grdn Washer Extractor 12/13/2011 9,940 1.23 12,300 Opticon Emergency Equipment 6/2/2010 12,311 1.28 15,700 Opticon Emergency Equipment 6/2/2010 12,311 1.28 15,700 Opticon Emergency Equipment 6/2/2010 12,311 1.28 15,700 Opticon Emergency Equipment 6/2/2010 12,311 1.28 15,700 Ford F250 Truck For RFD 6/30/2010 28,267 1.28 36,100 2011F250 Crew Cab 7/6/2010 35,933 1.28 45,900 Fuel Master 3500 Plus Prokee/RF 12/7/2009 15,036 1.28 19,200 Fuel Master 3500 Plus Prokee/RF 12/7/2009 15,036 1.28 19,200 Toyota Sit Down LPG Pnuematic 6/24/2009 9,000 1.32 11,900 Cargo Trailer 10/30/2009 8,373 1.28 10,700 Electronic Gate - Fire Station #62 1/21/2009 21,000 1.32 27,700 Isg K1000 Elite Camera 6/30/2008 65,231 1.34 87,400 Hi Tech Custom Pumper 9/30/2008 459,474 1.32 605,800 Hi Tech Custom Pumper 9/30/2008 443,320 1.32 584,500 Hi Tech Custom Pumper 9/30/2008 369,658 1.32 487,400 Fire Truck Rear Mount Aerial Model 9/30/2008 658,835 1.32 868,700 Hi Tech Custom Pumper 9/30/2008 369,658 1.32 487,400 Fire Truck 110 Ft. Aerial 6/3/2002 599,954 1.56 937,400 1500 Gmp Pumper Fire Truck 6/29/2001 379,303 1.60 606,200 1500 Gmp Pumper Fire Truck 6/29/2001 379,303 1.60 606,200 1500 Gmp Pumper Fire Truck 6/29/2001 379,303 1.60 606,200 1500 Gmp Pumper Fire Truck 6/29/2001 379,303 1.60 606,200 110 Ft. Aerial Fire Apparatus 6/29/2001 624,441 1.60 997,900 Type IV Fire Apparatus - 4 X 4 6/29/2001 26,058 1.60 41,600 Type Iv Fire Apparatus - 4 X 4 6/29/2001 26,058 1.60 41,600 Emergency Rescue Vehicle 9/8/1999 93,946 1.67 156,900 Emergency Rescue Vehicle 9/8/1999 93,946 1.67 156,900 Truck Pumper '98 Spartan 1/1/1998 289,600 1.73 499,800 Total Fire Equipment Value 13,162,800$
1 Original cost inflation adjusted to 2022.
Source: City of Richmond; US Dept of Labor: CPI Tables; Willdan Financial Services.
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City of Richmond Development Impact Fee Nexus Study Update 40 Table 7.5 summarizes the total replacement cost of fire protection facilities owned by the City. In total the City owns over $31.1 million worth of fire protection facilities.
Table 7.5: Existing Fire Facilities Summary
Replacement
Cost
Buildings 15,438,100$
Land 2,506,000
Vehicles, Apparatus and Equipment 13,162,800
Existing Impact Fee Fund Balance (20,489)
Total 31,086,411$
Sources: Tables 7.2, 7.3 and 7.4.
Planned Facilities
Table 7.6 summarizes the planned fire protection facilities needed to serve the City, as identified in the City’s Capital Improvement P lan. The City anticipates that additional planned facilities will be needed to provide service to new d evelopment as it increases demand for fire protection services.
Table 7.6: Planned Fire Protection Facilities
Cost Estimate
Gender Specific Restrooms Fire Station 66 475,000$
Fire Department Regional Training Center 2,000,000
Total Planned Facilities Cost 2,475,000$
Source: City of Richmond Capital Improvement Plan FY2023-24 through FY2027-28.
Cost Allocation
Existing Level of Service
Per the new nexus study requirements that we nt into effect of January 1, 2022, a nexus study “shall identify the existing level of service for each public facility, identify the pro posed new level of service, and include an explanation of why the new level of s ervice is appropriate.” Table 7.7 expresses the City’s current fire protection facilities level of service in terms of an existing cost per capita. This cost per capita is used to drive the fee calculation. 988
City of Richmond Development Impact Fee Nexus Study Update 41 Table 7.7: Fire Protection Facilities Existing Standard Total Value of Existing Facilities 31,086,411$
Existing Service Population 128,800
Cost per Capita 241$
Facility Standard per Resident 241$
Facility Standard per Worker1 147
1 Based on w eighing factor from Table 7.1.
Sources: Tables 7.1 and 7.5.
Fee Revenue Projection
Table 7.8 shows the projected fee revenue through 2040. After accounting for the cost of planned facilities, the City will need to id entify $ 15.2 million in additional planned facilities in order to maintain its existing facility standards.
Table 7.8: Revenue Projection
Cost per Capita 241$
Growth in Service Population (2023- 2040) 73,200
Fee Revenue 17,641,200$
Net Cost of Planned Facilities 2,475,000
Future Facilities to be Identified 15,166,200$
Sources: Tables 7.1, 7.6, and 7.7.
Fee Schedule
Table 7.9 shows the maximum justified fire protection facilities fee schedule. The City can adopt any fee up to this amount. The cost per capita is converted to a fee per unit of new development based on dwelling unit and employment dens ities (persons per dwellin g unit or empl oyees per 1,000 squa re feet of nonresidential bu ilding spa ce). The fee per average dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee includes a two perc ent (2.0%) administrative charge t o fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and admin istrative s upport, and fee prog ram administrative costs in cluding revenue collection, revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program ad ministration. The ad ministrative charge should be rev iewed and adjusted durin g compre hensive impact fe e updates to ensure t hat revenue generated from the 989
City of Richmond Development Impact Fee Nexus Study Update 42 charge sufficiently covers, but does not exceed, the administrative costs associated with t he fee program.
Table 7.9: Maximum Justified Fire Protection Facilities Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge1, 2 Total Fee 1 Sq. Ft.3 Residential Dwelling Unit 241$ 2.72 656$ 13$ 669$ 0.46$ Nonresidential - per 1,000 Square Feet
Commercial 147$ 2.12 312$ 6$ 318$ 0.32$ Office 147 3.26 479 10 489 0.49 Industrial 147 1.16 171 3 174 0.17 Warehousing 147 0.34 50 1 51 0.05 Sources: Tables 2.2 and 7.7.
1 Fee per average sized dw elling unit, per 1,000 square feet of nonresidential. 2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analyses.
3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
990
43 8. Library Facilities
The purpose of this f ee is to ensure that new development funds its fair share of library facilities.
A fee schedule is presented based on the existing facilities standard of library facilities in the City of Richmond to ensure that new development maintains the existing level of service.
Service Population
Library facilities in Richmond primarily serve resi dents. Therefor e, deman d for servic es and associated facili ties is based on the City’s residential populati on. Table 8.1 shows the ex isting and future projected service population for library facilities.
Table 8.1: Library Facilities Service
Population
Residents
Existing (2023) 111,924
Growth (2023 - 2040) 52,296
Total (2040) 164,220
Sources: Table 2.1; Willdan Financial Services.
Existing Facility Inventory
The City’s library facilities inventory is comprised of three libraries and the library collections . The City provided an asset schedule for use in th is analysis. The original acquisition cost of each item included in the invento ry was adjusted for inflation to its current replacement cost using the Engineering News Recor d’s Building Cost Index . Table 8.2 displays the City’s existing inventory of library buildings.
991
City of Richmond Development Impact Fee Nexus Study Update 44 Table 8.2: Existing Library Facilities Inventory
A B C = A x B
Facility Date Acquired Building Cost Cost Index
Replacement
Cost1
Main Library - 325 Civic Center Plaza2 -$
Bay View Branch - 5100 Hartnett Avenue
Bay View Branch Library 01/01/76 99,280 5.04 500,300 Bayview Branch Library Renovation 06/11/09 152,686 1.59 243,400 West Side Branch - 135 Washington Avenue
Westside Branch Library 01/01/60 68,475 13.71 938,600 Remodel - West Side Branch Lib 01/01/92 125,000 2.60 324,800 West Side Branch Library Renovation 06/11/09 112,936 1.59 180,100 Total Replacement Value 2,187,200$
1 Original facility cost adjusted to 2022 cost.
2 No value show n because library w ill be replaced by planned facility.
Source: City of Richmond; Engineering New s Record Building Cost Index; Willdan Financial Services.
Table 8.3 displays the City’s inventory of library land assets. The City provided an asset schedule for use in t his analysis. The original acquisition cost of each site was adjusted for inflation to its current replacement cost using the Consumer Price Index for All Urban Consumers (CPI-U).
Table 8.3: Existing Library Facilities Land Inventory
A B C = A x B
Facility Address
Date
Acquired Land Cost Cost Index
Replacement
Cost1
Main Library 325 Civic Center Plaza 01/01/1958 72,832 9.88 719,566$ Bay View Branch 5100 Hartnett Avenue 03/08/72 28,670 6.48 185,600 West Side Branch 135 Washington Avenue 06/15/60 25,790 9.62 248,000 Total Land Value 1,153,166$
1 Original land cost adjusted to 2022.
Source: City of Richmond; US Dept of Labor: CPI Tables; Willdan Financial Services.
Table 8.4 displays the City ’s current inventory of library collections. The City provided an asset schedule for use in th is analysis. The original acquisition cost of each item was adjusted for inflation to its current replacement cost using the Consumer Price Index for All Urban Consumers (CPI-U).
992
City of Richmond Development Impact Fee Nexus Study Update 45 Table 8.4: Existing Library Collections
Inventory Unit Cost1
Replacement
Cost
Books
Adult / Young Adult 204,180 36$ 7,350,500$ Children / Juvenile 120,152 36 4,325,500 Subtotal 324,332 11,676,000$
Multimedia
Adult / Young Adult 22,800 36$ 820,800$ Children / Juvenile 11,000 36 396,000 Subtotal 33,800 1,216,800$
Other
Bookmobile '95 International 1 184,904 184,900$ Total Library Collections 13,077,700$
1 Cost per item based on data from similar jurisdictions. 1995 Bookmobile Acquisition indexed to 2022.
Source: City of Richmond: Richmond Library Program Feb 2009; Wildan Finacial Services.
Planned Facilities
Table 8.5 summarizes the planned library facilities needed to s erve the City, as identified by City staff. The City plans to rehabilitate and reconfig ure its current library so that it can increase its capacity to provide library services to existi ng and new development. The City has secured a grant to fund part of the main library reconfiguration.
Table 8.5: Planned Library Facilities
Project Cost
Main Library Project 29,933,657$
Total Project Cost 29,933,657$
Source: City of Richmond.
Cost Allocation
Existing Level of Service
Per the new nexus study requirements that went into effect of January 1, 2022, a nexus study “shall identify the exis ting level of serv ice for each public facility, identify the proposed new lev el of service, and include an explanation of wh y the new level of service is appropria te.” Table 8.6 expresses the City’s current library facilities level of service in terms of an existing cost per capita.
This cost per capita is used to drive the fee calculation. 993
City of Richmond Development Impact Fee Nexus Study Update 46 Table 8.6: Existing Level of Service
Existing Facilities 2,187,200$
Existing Land 1,153,166
Existing Library Collection 13,077,700
Value of Existing Facilities 16,418,066$
Existing Service Population 111,924
Facility Standard per Resident 147$
Sources: Tables 8.1 through 8.4.
Future Level of Service
Table 8.7 shows the calculation of the system facilities standard per capita for library facilities used to calculate the fees. This value is calculated by dividing the total value of all library facilities in 2040 by the total service population in 2040. The resulting standard is the cost standard that will be achieved when all the facilities are realized, and new development has come online.
Table 8.7: Library Facilities System Standard
Value of Existing Facilities 16,418,066$
Cost of Planned Facilities 29,933,657
Total System Value (2040) 46,351,723$
Future Service Population (2040) 164,220
Facility Standard per Resident 282$
Sources: Tables 8.1 through 8.5.
Fee Revenue Projection
Completing the planned facilities will provide a higher value of facilities per capita than is currently provided in the City. Impact fee revenue may not be used to increase the level of service provided to existing development. Therefore, impact fee revenue will not fully fund the planned facilities and some non-fee funding will be requi red. Table 8.8 shows the projected fee revenue and the non-fee funding required th rough 2040. After accounting for the projected fu ture impact fee revenue, existing fund balances and grants approximately $1.2 million in non-fee funding will be needed to complete the planned facilities.
The City will anticipates funding the balance with the City’s General Capital Fund. 994
City of Richmond Development Impact Fee Nexus Study Update 47 Table 8.8: Fee Revenue Projection
Cost Per Capita 282$
Growth in Residents (2023-2040) 52,296
Estimated Fee Revenue 14,747,472$
Cost of Planned Facilities 29,933,657$
Less Projected Impact Fee Revenue 14,747,472
Less Current Impact Fee Fund Balance 143,484
Less CA Building Forward Grant 9,712,979
Less ARPA 3,656,490
Less CIP CIP (HVAC AR231) ARPA 500,000
Non-fee Funding Required 1,173,232$
Sources: Tables 8.1, 8.5, 8.6.
Fee Schedule
Table 8.9 shows the maximum justified library facilities fee schedule. The City can adopt any fee up to this amount. The cost per capi ta is converted to a f ee per unit of new dev elopment based on dwelli ng unit densities (per sons p er dwelling unit ). The fee per average dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee i ncludes a two percent (2.0%) adm inistrative charge to fund costs that include: a standard overhead charge applied to City programs for legal, accounting, and other departmental and a dministrative s upport, and fee prog ram a dministrative costs inclu ding reve nue collect ion, revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers the c ost of fee program ad ministration. The ad ministrative charge should be reviewed and adjusted during comprehensive impact fe e updates t o ensure th at revenue generated f rom the charge sufficiently covers, b ut does not exceed, the administrative costs associated with the fee program.
Table 8.9: Library Facilities Fee - Maximum Justified Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per Admin Fee per
Land Use Capita Density Base Fee 1 Charge1, 2 Total Fee Sq. Ft.3 Residential Dwelling Unit 282$ 2.72 767$ 15$ 782$ 0.54$ Sources: Tables 2.2 and 8.7.
1 Fee per average sized dw elling unit.
2 Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification
3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
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48 9. Storm Drain Facilities
This chapter s ummarizes an analysis of the nee d fo r storm drain facilities to accommodate growth with in the C ity of Richmond. This projects and associated c osts in this c hapter were identified it t he City’s Storm Drain Master Plan , 2018. This chapter documents a reasonable relationship between new dev elopment and a storm drain fee t o fund storm drain f acilities that serve new development.
Storm Drain Demand
Most new development generates storm water ru noff that must be contro lled through storm drain facilities by increasing the amount of land that is impervious to precipitation. Table 9.1 shows the calculation o f equivalent d welling unit ( EDU) demand factors based on impe rvious surface coefficient by land use category. The impervious surface coefficients are bas ed on data from the Environmental Protection Agency. EDU factors relate demand for storm drain facilities in terms of the demand created by a single-family dwelling unit.
Table 9.1: Storm Drain Facilities Equivalent Dwelling Units A B C = (43,560 / A) x B D = C / Single Family
DU or 1,000
Sq. Ft. per
acre 1
Average
Percent
Impervious
per Acre
Impervious
Square feet per
DU or 1,000 Sq.
Ft.
Equivalent
Dwelling Unit
(EDU)2
Residential - per Dwelling Unit
Single Family 10.00 35% 1,525 1.00 Multifamily 25.00 80% 1,394 0.91 Nonresidential - per 1,000 Square Feet
Commercial 21.78 86% 1,720 1.13 Office 17.42 85% 2,125 1.39
Industrial 10.89 81% 3,240 2.12 Warehousing 10.89 81% 3,240 2.12 Note: Figures have been rounded.
1 Dw elling units for residential and thousand building square feet for nonresidential. Based on General Plan density assumptions and minimum FAR of 0.5 for commercial, 0.4 for office and 0.25 for light industrial. 2 EDUs per dw elling unit for residential development and per thousand square feet for nonresidential Sources: User’s Guide for the California Impervious Surface Coefficients, Office of Environmental Health Hazard Assessment California Environmental Protection Agency, December 2010. Richmond General Plan; Willdan Financial Services.
EDU Generation by New Development
Table 9.2 shows t he estim ated EDU gener ation from new development t hrough 2040. New development w ill generate 49,974 new EDU s, represe nting 43.5 percent of to tal storm d rain demand in 2040.
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City of Richmond Development Impact Fee Nexus Study Update 49 Table 9.2: Storm Drain Facilities Equivalent Dwelling Units EDU
Factor1 Existing
Projected
Growth Existing Growth Total
Residential
Single Family 1.00 25,125 11,740 25,125 11,740 36,865 Multifamily 0.91 15,746 7,357 14,329 6,695 21,024 Subtotal 40,871 19,097 39,454 18,435 57,889 Nonresidential
Commercial 1.13 4,669 5,793 5,276 6,547 11,823 Office 1.39 2,667 3,309 3,707 4,600 8,307 Industrial 2.12 7,753 9,619 16,435 20,392 36,827 Subtotal 15,089 18,722 25,418 31,539 56,957 Total 64,872 49,974 114,846
Percent of Total 56.5% 43.5% 100%
1 Per dw elling unit (residential), thousand building square feet (nonresidential). ---------- DU or KSF---------- ---------------- EDU ---------------- Sources: Tables 2.2 and 9.1, Willdan Financial Services.
Planned Facilities
Table 9.3 identifies the planned storm dra in facilities to be funded by the fee. The n ew storm drain facilities were all identified in the City ’s Storm Drain Master Plan. Since drainage projects will benefit both existi ng development an d new development, capacity expandi ng project s a re allocated to new develo pment based on new development ’s share of storm drain demand at the planning horizon. Projects that do not expand capacity are not allocated to the impact fee. 997
City of Richmond Development Impact Fee Nexus Study Update 50 Table 9.3: Storm Drain Capital Improvements
Proj.
No. Location Project Total Cost
Allocation To
New
Develpoment
Cost
Allocated
to Impact
Fee
1 Central Avenue - West end of Van Fleet Avenue Replace/upsize pipes upstream in storm drain system through area and increase inlet capacity. 676,000$ 43.5% 294,060$ 2 32nd Street - End of Spring Street south of
Freeway and railroad tracks Convert 32' of ditch to dual 48" RCP. 182,000 43.5% 79,170 3 8th-9th Street and Harbor Way Replace/upsize inlets to storm drain throughout area to alleviate flooding 332,000 43.5% 144,420 4 McLaughlin - Plumas Ave and San Benito St.
Add new storm drain along Plumas Ave. and upsize an
additional existing storm drain near Plumas and San Benito St. and connect to Carlson Blvd. system. Add inlets along Plumas Ave. 950,000 43.5% 413,250
5 McLaughlin - Carlson Blvd & Tehama Ave Upsize inlets in Tehama and Carlson intersection. 105,000 43.5% 45,675 6 McLaughlin - Carlson Blvd & Tehama Ave Upsize inlets and laterals in Tehama and Carlson intersection. 226,000 43.5% 98,310
7 McLaughlin - Carlson Blvd & Tehama Ave Upsize inlets and laterals along Carlson Boulevard from Santa Cruz Avenue to Tehama Avenue. 560,000 43.5% 243,600 8 McLaughlin - Green infrastructure along Carlson
Boulevard.
Construct infiltration within the public ROW along Carlson Boulevard from Santa Cruz Avenue to Tehama Avenue. 2,215,000 43.5% 963,525 9 McLaughlin - Green infrastructure along Plumas
Avenue.
Construct infiltration within the public ROW along Plumas Avenue from San Pablo Avenue to Carlson Boulevard. 701,000 43.5% 304,935 Total 5,947,000$ 2,586,945$
Source: City of Richmond Storm Drain Master Plan 12/21/18; Willdan Financial Services. 998
City of Richmond Development Impact Fee Nexus Study Update 51 Cost per Equivalent Dwelling Unit
This c hapter uses the planned facilities approach to calcul ate the storm drain facilities cost standard. The cost of planned facilit ies allocated to new development is divided by the gro wth in EDUs to determine a cost standard per EDU. Table 9.4 shows the facility cost standard for storm drain facilities.
Table 9.4: Cost per Equivalent Dwelling Unit
Planned Facilities Allocated to New Development 2,586,945$ Less Existing Impact Fee Fund Balance 235,671
Net Cost Allocated to New Development 2,351,274$
Growth in EDUs 49,974
Cost Allocation per EDU 47$
Sources: Tables 9.2 and 9.3.
Fee Schedule
The maximum justified fee for storm drain facilities is shown in Table 9.5. The City can adopt any fee up to this amount. The cost per EDU from Table 9.4 is converted to a fee p er unit of new development based on th e EDU factors shown in Table 9.1. The fee per average dwelling unit is converted into a fee per square foot by dividing the fee per dwelling unit by the assumed average square footage of a dwelling unit.
The total fee includes a two percent (2.0%) admin istrative charge to fund c osts tha t include: a standard overhead charge applied to a ll Cit y programs fo r legal, ac counting, and other departmental and administrative support, and fee program administrative costs including revenue collection, revenue and cost accounting and mandated public reporting.
In Willdan’s experience with impact fee programs, two percent of the base fee adequately covers the cost of fee program administration. The administrative char ge should be reviewed and adjusted during com prehensive impact fee up dates to ensure t hat revenue generate d from the charge sufficiently covers, but does not exceed, th e administrative costs associated wi th the fee program.
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City of Richmond Development Impact Fee Nexus Study Update 52 Table 9.5: Storm Drain Facilities Impact Fee Schedule A B C = A x B D = C x 0.02 E = C + D F = E / Average
Cost Per
EDU
EDU
Factor
Base
Fee 1
Admin
Fee 1,2
Total
Fee 1
Fee per Sq.
Ft.3
Residential Dwelling Unit4 47$ 0.97 46$ 1$ 47$ 0.03$ Nonresidential - per 1,000 Sq. Ft.
Commercial 47$ 1.13 53$ 1$ 54$ 0.05$ Office 47 1.39 65 1 66 0.07 Industrial 47 2.12 100 2 102 0.10 Warehousing 47 2.12 100 2 102 0.10 Note: KSF = 1,000 Square Feet
4 Average EDU factor per residential dw elling unit w eighted by projected single family and multifamily development.
Sources: Tables 9.1 and 9.4; Willdan Financial Services. 1 Fee per average sized dw elling unit, per 1,000 square feet of nonresidential. 2Administrative charge of 2.0 percent for (1) legal, accounting, and other administrative support and (2) impact fee program administrative costs including revenue collection, revenue and cost accounting, mandated public reporting, 3 Assumes an average of 1,459 square feet per dw elling unit in the San Francisco MSA per the 2019 American Housing Survey.
1000
53 10. AB 602 Requirements
On January 1, 2022, new requirements went into effect for California jurisdictions implementing impact fees. Among othe r c hanges, AB 60 2 added Section 66016.5 to the Government Code, which set guidelines f or impact fee nexus studies. Four key requirements from that section which concern the nexus study are reproduced here:
66016.5. (a) (2) When a pplicable, the ne xus study shall identify the existing level of service for each public facility, identify the p roposed new level of service, and include an explanation of why the new level of service is appropriate.
66016.5. (a) (4) If a nex us study suppo rts the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of fees collected under the original fee.
66016.5. (a) (5) A nexus study adopted after J uly 1, 2022, s hall calculate a fee imposed on a housing development project proportionately to the squ are footage of pro posed uni ts of the development. A loca l agency that imposes a fee pro portionately to the square footage of the proposed units of the dev elopment shall be deemed to h ave used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. 66016.5. (a) (6) Large jurisdictions shall adopt a capital improvem ent plan as a part of the nexus study.
Compliance with AB 602
The following sections describe this study’s compliance with the new requirements of AB 602. 66016.5. (a) (2) - Level of Service
1. For fees calculated under the existing standard methodology, the fees are calculated such that new development funds facilities at the existing level of service. These fee categ ories are: parks, community and aquatic centers and fire protection facilities . The existing level service in terms of the existing facility investment per capita is shown in each corresponding chapter.
2. For fees calculated under the planned facilities methodology, the fees are calculated to ensur e that the level of service do es not fall to unacceptable levels. The fees calculated under this approach are the community/aquatic center facilities, sewer, and storm drain facilities i mpact fees. For sewers and storm drains projects were identified in the City’s various master plans as necessary to maintain an acceptable level of service.
3. For the fees calculated under the system stand ard methodology, the maximum justified fe es represent an increase in the fac ility level of service. The fees calculate d under this methodology are th e library a nd police facility fees. The increased level of serv ice is required to fund new development’s fair sha re of identified planned facilities. New development will not fun d t he entirety of the increase in level of service, rather, i t will fund a share of th e increased lev el of service represen ted by the planned facilities. The City will have to fund existing development’s share of the in crease level of service through any o ther funding so urce. The library and police facilities chapters include tables that shows the existing level of service and future level of service in terms of facility investment per capita.
66016.5. (a) (4) – Review of Original Fee Assumptions
The original nexus studies, fee schedules and corresponding revenue generated we re reviewed by the City and Willdan prior to conducting the nexus study analysis. The current fee schedule did not generate sufficient revenue to fully fund n ew development’s share of future needed facilities. 1001
City of Richmond Development Impact Fee Nexus Study Update 54 Additionally, the City’s 2006 fee study assume d a pl anning horizon of 2025. Staff and Willdan agreed that the assumptions from the 2006 study needed to be updated to account for changes in planned development and the facilities needed to serve that development.
Table 10.1 displays annual fee revenue collected, by impact fee fund.
Table 10.1: Annual Collected Impact Fee Revenue
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21 FY 2021-22 Fee Category Actuals Actuals Actuals Actuals Actuals Actuals Actuals Actuals (YTD) Parks 432$ -$ -$ 23,604$ 80,256$ 26,352$ 59,220$ 3,024$ Traffic 1,042,199 163,223 1,329,544 990,507 470,727 221,218 629,841 233,605 Fire 76,404 25,665 148,752 100,785 70,690 23,442 54,797 28,992 Police 106,442 21,868 106,215 78,107 74,971 23,685 159,818 153,612 Community Centers/Aquatic 109,113 91,838 160,429 92,882 341,346 82,325 220,558 15,282 Parks/Open Space 447,963 375,929 272,270 387,278 679,474 343,270 1,158,109 63,726 Library 143,965 114,077 261,645 181,208 477,876 114,017 288,913 41,674 Storm Drain 619,556 113,542 578,597 490,117 161,910 51,701 154,376 111,219 Sewer - 60,441 238,736 715,857 764,633 202,688 511,878 176,564 Total 2,546,075$ 966,583$ 3,096,188$ 3,060,345$ 3,121,882$ 1,088,697$ 3,237,510$ 827,698$ Source: City of Richmond.
66016.5. (a) (5) – Residential Fees per Square Foot
Impact fees for residential land uses are calculated per square foot and comply with AB 602. 66016.5. (a) (6) – Capital Improvement Plan
The Capital Improvement Plan for this nexus study is comprised of the identified planned facilities within each facility fee chapter. Adoption of this nexus study would approve the planned facili ties identified herein as the Capital Improvement Plan for this nexus study. .
1002
55 11. Implementation
Impact Fee Program Adoption Process
Impact fee progra m adoption procedures are fou nd in the California Governmen t Code section 66016. Adoption of an impact fee pr ogram requires the City Council to follow certai n procedures including holding a public hearing. Data, such as an impact fee report, must be made available at least 10 days pri or to the publi c hearing. The City’s legal counsel sh ould be consulted for any other procedural requiremen ts as well as advice r egarding adop tion of an enabl ing o rdinance and/or a resolution. After adoption there is a mandatory 60-day waiting period before the fees go into effect.
Inflation Adjustment
The City can keep its impact fee program up to date by periodically adjusting the fees for inflation.
Such adjustments should be completed regularly t o ensure that new development will fully fund its share of needed facilit ies. We recomme nd that th e California Construction C ost Index (https://www.dgs.ca.gov/RESD/Resources/Page-Content/Real-Estate-Services-Division- Resources-List-Folder/DGS-California-Construction-Cost-Index-CCCI) be used for adjusting fees for inflation. The California Construction Cost Index is based on data from the Engineering News Record and is aggregated and made available for free by the State of California.
The fee amounts can be adjusted based on the change in the index compared to the index in the base year of this study (2023).
While fee updates using inflation indices are appropriate for periodic updates to ensure that fee revenues keep up with increases in the costs of public facilities, the City will also need to conduct more extens ive updates of the fee do cumentation and calculation (such as this st udy) w hen significant new data on gro wth forecas ts and /or facility pla ns become availabl e. Note that decreases in index value will result in decreases to fee amounts.
While fee updates us ing inflationary indices are ap propriate for periodic updates to ensu re that fee revenues k eep up with inc reases in the cos ts of public facil ities, the City will also n eed to conduct more exten sive updates of the fee documentation and calculation (such as this study) when significant new data on growth forecasts and/or facility plans become available.
Reporting Requirements
The City will comply with the annua l and five-year reporting requirements of the Mitigation Fee Act. For facilities to be funded by a combination of public fees and other revenues, identification of the source and amount of t hese non-fee revenues is essenti al. Identification of the timing o f receipt of other revenues to fund the facilities is also important.
Table 11.1 summarizes the an nual and five-year reporting req uirements i dentified in the Mitigation Fee Act.
1003
City of Richmond Development Impact Fee Nexus Study Update
56 Table 11.1: Mitigation Fee Act - Annual and Five-year Administrative Requirements CA Gov't Code
Section Timing Reporting Requirements 1
Recommended
Fee Adjustment
66001.(d)
The fifth fiscal year following the
first deposit into the account or
fund, and every five years
thereafter
(A) Identify the purpose to which the fee is to be put. (B) Demonstrate a reasonable relationship between the fee and thepurpose for which it is charged.
(C) Identify all sources and amounts of funding anticipated tocomplete financing in incomplete improvements.
(D) Designate the approximate dates on which supplemental funding is expected to be deposited into the appropriate account or fund.
Comprehensive
Update
66006. (b) Within 180 days after the last
day of each fiscal year
(A) A brief description of the type of fee in the account or fund. (B) The amount of the fee.
(C) The beginning and ending balance of the account or fund. (D) The amount of the fees collected and the interest earned. (E) An identification of each public improvement on which fees were expended including share funded by fees.
(F) (i) An identification of an approximate date by which the construction of the public improvement will commence if the local agency determines that sufficient funds have been collected to complete financing on an incomplete public improvement and the public improvement remains incomplete.
(ii) An identification of each public improvement identified in a previous report pursuant to clause (i) and whether construction began on the approximate date noted in the previous report.
(iii) For a project identified pursuant to clause (ii) for which construction did not commence by the approximate date provided in the previous report, the reason for the delay and a revised approximate date that the local agency will commence construction.
(G) A description of any potential interfund transfers. (H) The amount of refunds made (if any).
Inflationary
Adjustment
1 Edited for brevity. Refer to the government code for full description.
Sources: California Government Code §66001 and §66006.
1004
City of Richmond Development Impact Fee Nexus Study Update 57 Programming Revenues and Projects with the CIP
The City maintains a Capital Improvement Program (CIP) to plan f or future infrastruct ure needs.
The CIP identifies costs and phasing fo r specific capital p rojects. The use of the CIP i n this manner docu ments a rea sonable rela tionship between new development and the us e of those revenues.
The City may d ecide to alter t he scope of the plann ed projects o r to substitute new projects if those new projects contin ue to represe nt an expansion of the City’s facilities and provide benefit to new development. If the total cost of facilities var ies from the total cost used as a basis for the fees, the City should consider revising the fees accordingly. 1005
58 12. Mitigation Fee Act Findings
Public facilities fees ar e one-time fees typically paid w hen a building pe rmit is issued a nd imposed on development p rojects b y loc al age ncies responsible f or regulating lan d use (c ities and counties). To guide the widespread imposition of publ ic facilities fees the State Legislature adopted the Mitigation Fee A ct (the Act) with Assembly Bi ll 1 600 in 1987 and subsequent amendments. The Act, contained in California Government Code Sections 66000 through 66025, establishes requirements on local agencies for the imposition and administration of fee programs.
The Act requires local agencies to document five findings when adopting a fee.
The fiv e s tatutory finding s required for ad option o f the public facilities fees docum ented in this report are pres ented in th is chapter and sup ported i n detail by the preceding chapte rs. All statutory references are to the Act.
Purpose of Fee
▪ Identify the purpose of the fee (§66001(a)(1) of the Act).
Development imp act fees are designed t o ensure that new development will not b urden th e existing service population wit h the cost of fac ilities requi red to accom modate g rowth. The purpose of the f ees documented by th is re port is to provide a funding so urce fro m new development for capital improv ements to serve that develo pment. The fees advance a legitimate City interest by enabling the City to provide public facilities to new development.
Use of Fee Revenues
▪ Identify the use to which t he fees will be p ut. If the use is financing facilities, the facilities shall be identif ied. That i dentification may, but nee d not, be made by reference to a capital improvement plan as specified in §65403 or §66002, may be made in applicable general or sp ecific plan requi rements, or ma y be made in other public docu ments t hat identify the facilities for which the fees are charged (§66001(a)(2) of the Act).
Fees documented in this report, if enacted by the City, would be used to fund expanded facilities to serve new development. Facilities funded by these fees are designated to be located within the City’s sphere of influence. Fees addressed in this report have been identified by the City to be restricted to funding the following facility c ategories: parks and recreation faci lities community center and aquatic facilities, police facilities, fire protection facilities, library facilities, storm drain facilities, and sewer facilities.
Benefit Relationship
▪ Determine the reasonable re lationship between the fe es' us e and the type of development project on which the fees are imposed (§66001(a)(3) of the Act).
The City will restrict fee revenue to the acquisition of land, construction of facilities, infrastructure and buildings, and purch ase of related equi pment, furnishings, ve hicles, and services used to serve new development. Facilities funded by the fees are expec ted to provide a citywide network of facilities accessible to the additional residents and workers assoc iated with new devel opment.
Under the A ct, fe es are not inten ded to fund planned f acilities ne eded to correct existing deficiencies. Thus, a reasonable relationship can be shown between the use of fee revenue and the new development residential and non-residential use classifications that will pay the fees. 1006
City of Richmond Development Impact Fee Nexus Study Update 59 Burden Relationship
▪ Determine the reasonable relationship between the need for the public facilitie s and the types of development on which the fees are imposed (§66001(a)(4) of the Act).
Facilities need is base d on a facili ty standard that re presents the demand ge nerated by new development for th ose facilities. For each facility category, demand is meas ured by a s ingle facility standard that can be applied across land use types to ensure a reasonable rela tionship to the type of development. For some facility categories service population standards are calculated based upon the number of residents associa ted with re sidential development and the number of workers associated with non-residential development. To calculate a singl e, per capita stand ard, one wor ker is wei ghted differently than one residen t base d on an analysis of t he relat ive use demand between residential and non -residential development. For other facility categories demand is e xpressed in terms of sewer flow generation or the increase in impervious surface associated with various types of development.
The standards used to identify growth needs are also used to determine if planned fa cilities will partially serve the existin g service population by cor recting existing deficiencies. This approach ensures that new development will only be responsible for its fa ir share of planned facilities, and that the fees will not unfairl y burden new development with t he cost of facilities a ssociated with serving the existing service population.
Chapter 2, Growth Forecasts provides a description of ho w service population an d g rowth forecasts are calculated. Facility standards are described in the Facility Standard sections of each facility category chapter.
Proportionality
▪ Determine how there is a r easonable relationship b etween the fees amount and the cost of the facilities or portion of the facilities attributable to the development on which the fee is imposed (§66001(b) of the Act).
The reasonable relationship betw een each facilities fee for a spe cific new development pr oject and t he cost of the fac ilities a ttributable t o t hat project is bas ed on the estimated new development growth th e project wil l accommodate. Fees for a specific project are based on the project’s size. Larger new development projects can result in a higher service population resulting in higher fee rev enue th an sma ller projects in the same land use classification. Th us, the fees ensure a reasonable relationship between a specific new development project and the cost of the facilities attributable to that project.
See Chapter 2, Gro wth Forecasts, or the Service Population sections in each facility category chapter for a description of how service pop ulations or other factors are determined for diffe rent types of land uses. See the Fee Schedule section of each facili ty category chapter for a presentation of the maximum justified facilities fees.
1007
Development Impact Fee Update Study
City of Richmond
March 5, 2024
1008
About Willdan Financial Services
2 Cost Allocation and
User Fee Studies
Development
Impact Fees
Utility Rates
Financial and Economic
Impact and Feasibility
Special District Formation
and Administration
(CFD, AD)
Bond Compliance
(IRS and SEC)
1009
What is a Development Impact Fee?
1One-time charge
Imposed at building permit stage
Imposed on all development projects
within a defined geographic area
Funds facilities to serve new development
3 1010
Mitigation Fee Act Findings (Govt. Code §66001)
Key findings
Need: Development creates need for facilities
Benefit: Development use of revenue
Rough Proportionality: Fee amount development’s
share of facility costs (i.e. proportional to demand)
Other findings
Purpose of fee
Use of fee revenue
4 1011
Requires local jurisdictions to make certain
information available on website:
Current impact fee schedule
Nexus studies
Annual AB1600 reports
Five-Year AB1600 reports
Changes to impact fee adoption process:
Prior to adoption of development fees,
an impact fee nexus study needs to be
adopted with 30 days notice
Technical changes:
Residential fees should be charged
per square foot, unless findings are
supported that justify another
metric
Large jurisdictions shall adopt a
capital improvement plan as a part
of the nexus study
Nexus study should identify level of
service
If fees are increasing, review the
assumptions of the original nexus
study and evaluate the amount of
fees collected under the original fee
AB 602
1012
Impact Fees – Basic Methodology
ESTIMATE
EXISTING
DEVELOPMENT
AND FUTURE
GROWTH
IDENTIFY FACILITY
STANDARDS
DETERMINE NEW
FACILITY NEEDS
AND COSTS
ALLOCATE SHARE
TO
ACCOMMODATE
GROWTH
IDENTIFY
ALTERNATIVE
FUNDING NEEDS
CALCULATE FEE BY
ALLOCATING
COSTS PER UNIT
OF NEW
DEVELOPMENT
6 1013
Impact Fee Categories
Sewer Facilities
Parks
Community / Aquatic Center
Police Facilities
Fire Protection Facilities
Library Facilities
Storm Drains
**Note that Richmond Traffic Impact Fees are not being updated at this time. 1014
Changes to Report Since Last Version
Revised library fee and methodology to incorporate latest costs and grant funding
Revised Community/Aquatic Center fee methodology to
existing standard approach
Incorporated latest impact fee fund balances, where
appropriate
Updated project costs to match City’s latest CIP
1015
Growth Projections
2023 2040 Increase
Residents 111,924 164,220 52,296
Dwelling Units 40,871 59,968 19,097
Employment 27,587 61,815 34,228
Sources: CA DOF; ABAG; US Census’ OnTheMap Application
9 1016
Cost Allocation Methods:
WHAT Facilities Serve WHO
PLANNED FACILITIES
Planned Facilities
New Demand
SYSTEM PLAN
Existing + Planned Facilities
Existing + New Demand
EXISTING INVENTORY
Existing Facilities
Existing Demand
1017
Cost Allocation Methodologies
0 10
20 30
40 50
60 70
80 90
100
Facility Demand Facility Needs
Existing
Demand
Future
Demand
Existing Inventory Method
New
Facilities
Existing
Facilities
Fee $
System Plan Method
(Increase Service Level)
0 10
20 30
40 50
60 70
80 90
100
110
120
130
140
150
Future
Demand
Growth
Share
Existing
Deficiency
Existing
Demand
Existing
Facilities
Facility Needs
New
Facilities
Facility Demand
0 10
20 30
40 50
60 70
80 90
100
110
120
130
140
150
Future
Demand
New
Facilities
Demand Facility Needs
Planned Facilities Method
11 1018
Fee Program Methodologies
Parks
Community / Aquatic
Centers
Fire Protection Facilities
Existing Standard
Police Facilities
Libraries
System Plan
Sewer
Storm Drain
Planned Facilities
12 1019
Planned Facilities
13 Cost Estimate Cost Estimate
Community Centers Storm Drain Facilities
Martin Luther King Jr. Community Center $ 14,000,000 Central Avenue - West end of Van Fleet Avenue $ 676,000 32nd Street - End of Spring Street south of Freeway and railroad tracks 182,000
Police Facilities 8th-9th Street and Harbor Way 332,000 New Police Station $ 80,000,000 Plumas Ave and San Benito St. 950,000 Carlson Blvd & Tehama Ave 105,000
Fire Facilities Carlson Blvd & Tehama Ave 226,000
Gender Specific Restrooms Fire Station 66 $ 475,000 Carlson Blvd & Tehama Ave 560,000 Fire Department Regional Training Center 2,000,000 Green infrastructure along Carlson Boulevard. 2,215,000 Total Fire Facilities $ 2,475,000 Green infrastructure along Plumas Avenue. 701,000 Total Storm Drain Facilities $ 5,947,000
Library Facilities
New Library $ 29,933,657 Sewer Facilities
1.5 Dewatering Facility $ 12,135,200
Parks 2.1 Level 1 Nutrient Removal Improvements 1,712,200 Acquisition and Improvement of 150.61 Parkland Acres $ 303,328,000 2.10 Site Protection from Rock Slides 2,140,200
2.11 Low-Lift Effluent Pump Station 7,847,500
3.1 Level 2 Nutrient Removal Improvements 195,760,500
3.2 Level 3 Nutrient Removal Improvements 120,281,400
3.3 Wet Weather Improvements 193,049,500
3.4 Digested Sludge Storage (to support dewatering) 8,703,600
3.5 Biosolids Post-Processing (Dryer Facility) 42,519,400 Total Sewer Facilities $ 584,149,500
1020
Projected Impact Fee Revenue
14 Fee Category Fee Calculation Methodology Net Project Cost Projected Impact
Fee Revenue
Additional
Funding
Required
Sewer Facilities Planned Facility Standard $ 584,149,500 $ 228,986,604 $355,162,896 Parks1 Existing Facility Standard 303,328,000 303,328,000 - Community / Aquatic Center Existing Facility Standard 33,783,200 33,783,200 - Police Facilities System Standard 80,000,000 32,771,000 47,229,000 Fire Protection Facilities Existing Facility Standard 17,641,200 17,641,200 - Library Facilities2 System Standard 29,933,657 14,747,472 15,186,185 Storm Drains Planned Facility Standard 5,947,000 2,586,945 3,360,055 Total $1,054,782,557 $ 633,844,421 $420,938,136
Note: For facility categories calculated using the existing facility standard, the projected fee revenue is equal to the costof planned facilities needed to serve new development.
1 Fee revenue shown if all development is infill development. Refer to Table 4.5 for projections of Quimby in-lieu fee revenue. 2 The City has secured $13.9 million in grants to fund the planned facilities. The remainder will be funded through the City's General Capital Fund. See Table 8.7 for more detail.
1021
Maximum Justified Impact Fee Schedule
15 Maximum Justified Impact Fee Summary
Land Use
Sewer
Facilities1
Pa rks -
Quimby
(Subdivisions)2
Pa rks
(Infill)2
Community /
Aquatic
Center
Police
Facilities
Fire
Protection
Facilities
Library
Facilities
Storm
Drains
Total -
Subdivisions
Total -
Infill
Residential - per Sq. Ft. 7.98$ 11.32$ 11.03$ 1.23$ 0.99$ 0.46$ 0.54$ 0.03$ 22.55$ 22.26$ Nonresidential - per Sq. Ft.
Commercial 3.55$ -$ -$ -$ 0.35$ 0.32$ -$ 0.05$ 4.27$ 4.27$ Office 4.43 - - - 0.54 0.49 - 0.07 5.53 5.53 Industrial 7.09 - - - 0.19 0.17 - 0.10 7.55 7.55 Warehousing 7.09 - - - 0.06 0.05 - 0.10 7.30 7.30 2 Only charged w ithin Richmond Municipal Sew er District Boundaries.
Sources: Tables 3.5, 4.7, 5.7, 6.6, 7.9, 8.9 and 9.5.
1 A development project either pays the Quimby fee of the park infill fee, not both. Development not occurring in subdivisions is subject to the infill fee. Development in subdivisions is subject to the Quimby fee.
1022
Staff Recommendation: Residential – Phase In Increases Over Four Years 16 Residential - Four Year Phase In
Current Year 1 Year 2 Year 3 Year 4
Parks - Quimby (Subdivisions) 4.39$ 6.12$ 7.86$ 9.59$ 11.32$ Parks (Infill) 4.39 6.05 7.71 9.37 11.03 Community / Aquatic Center 1.05 1.10 1.14 1.19 1.23 Police Facilities 0.25 0.43 0.62 0.80 0.99 Fire Protection Facilities 0.30 0.34 0.38 0.42 0.46 Library Facilities 1.19 0.54 0.54 0.54 0.54 Storm Drains 0.45 0.03 0.03 0.03 0.03 Sewer Facilities 2.29 3.71 5.14 6.56 7.98 Total (Subdivisions) 9.92$ 13.08$ 16.24$ 19.39$ 22.55$ Total (Infill) 9.92$ 13.01$ 16.09$ 19.18$ 22.26$ 1023
Staff Recommendation: Nonresidential – Phase In Increases Over Two Years 17 Nonresidential - Two Year Phase In
Current Year 1 Year 2
Office
Police Facilities 0.30$ 0.42$ 0.54$
Fire Facilities 0.26 0.38 0.49
Library 0.42 - -
Storm Drainage 0.74 0.07 0.07
Sewer 2.32 3.37 4.43
Total 4.04$ 4.24$ 5.53$
Industrial
Police Facilities 0.11$ 0.15$ 0.19$
Fire Facilities 0.19 0.17 0.17
Library 0.18 - -
Storm Drainage 0.79 0.10 0.10
Sewer 1.14 4.12 7.09
Total 2.41$ 4.54$ 7.55$
Warehousing
Police Facilities 0.11$ 0.06$ 0.06$
Fire Facilities 0.19 0.05 0.05
Library 0.05 - -
Storm Drainage 0.79 0.10 0.10
Sewer 1.14 4.12 7.09
Total 2.29$ 4.33$ 7.30$
1024
Comparison: Single Family Residential – 1,600 Sq. Ft.
18 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
Oakland
(Low)
Berkeley Oakland
(High)
Concord
(Low)
Richmond
(Current)
Concord
(High)
San
Leandro
(Low)
Hayward Richmond
(Maximum
Justified)
San
Leandro
(High)
1025
Comparison: Multifamily – 20 Units
19 $-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
Oakland
(Low)
Berkeley
(Low)
Oakland
(High)
San Leandro
(Low)
San Leandro
(High)
Concord
(Low)
Hayward Richmond
(Current)
Concord
(High)
Richmond
(Draft)
1026
Comparison: Commercial – 15,000 Sq. Ft. Retail
20 $-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Hayward Oakland San Leandro
(Low)
Concord Berkeley Richmond
(Current)
San Leandro
(High)
Richmond
(Maximum
Justified)
1027
Comparison: Industrial – 100,000 Sq. Ft.
21 $-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
San Leandro
(Low)
Oakland Concord Berkeley Richmond
(Current)
Hayward San Leandro
(High)
Richmond
(Maximum
Justified)
1028
Credit Policy
• A public facility or improvement must be included on the current adopted list of public improvements and facilities for the applicable to be considered eligible for credits toward future Impact Fees.
• Fee Credits will apply only to the “cost of the improvements,” not the related financing costs.
• Costs incurred for work not directly related to improvement of a thoroughfare will not be eligible for credit. Specifically excluded from credit calculations are costs of contaminated soils removal or remediation. • Credits shall be awarded only upon receipt of satisfactory documentation that
(i) the improvement is completed; or
(ii) land has been conveyed to and accepted by the City; or (iii) that funds for the improvement are in escrow; or
(iv) that a construction contract for the improvement has been executed; or (v) that a performance bond approved by the City Attorney has been posted to ensure completion.
22 1029
Credit Policy
• A public facility or improvement must be included on the current adopted list of public improvements and facilities for the applicable to be considered eligible for credits toward future Impact Fees.
• Fee Credits will apply only to the “cost of the improvements,” not the related financing costs.
• Costs incurred for work not directly related to improvement of a thoroughfare will not be eligible for credit. Specifically excluded from credit calculations are costs of contaminated soils removal or remediation. • Credits shall be awarded only upon receipt of satisfactory documentation that
(i) the improvement is completed; or
(ii) land has been conveyed to and accepted by the City; or (iii) that funds for the improvement are in escrow; or
(iv) that a construction contract for the improvement has been executed; or (v) that a performance bond approved by the City Attorney has been posted to ensure completion.
23 1030
Questions from City Council
Question: The warehouse fees are proposed to go down
for certain fee categories. I think these fees should be higher because warehouses don't provide much benefit
(few jobs, not meeting a service gap, and make areas less safe). Also, the warehouse industry is booming.
Response:
• While warehouse land uses may not provide the desired benefits cited above, that is not justification to charge them higher fees.
• The fees must be proportional to demand created for
facilities.
• These fees are lower than other land uses because
warehouses have relatively low employment density per
1,000 square feet of building space.
• Employment density for warehouse uses has been
decreasing over time as warehousing and distribution
facilities become increasingly automated.
24 Table 2.2: Occupant Density
Residential 2.72 Residents per Dwelling Unit
Nonresidential
Commercial 2.12 Employees per 1,000 square feet
Office 3.26 Employees per 1,000 square feet
Industrial 1.16 Employees per 1,000 square feet
Warehousing 0.34 Employees per 1,000 square feet Sources: U.S. Census Bureau, 2021 American Community Survey 1-Year Estimates, Tables B25024 and B25033; ITE Trip Generation Manual, 11th Edition; Willdan Financial Services.
1031
Questions from City Council
Question: The residential fee is already in the medium range compared to similar cities and if it was raised to the maximum allowable it would be really high. The cost of building housing is already high in the region, so keeping residential development fees low is one way to make it more feasible for new housing to be built. Also, new housing raises revenue in other ways (transfer fee, property taxes). What can be a more fair rate for this fee? Response:
• The City Council can always adopt a fee lower than the maximum justified.
Some cities chose to implement a fraction of the max fees to incentivize certain kinds of development.
• If the City adopts a fee that is lower than the maximum justified then other City funding must be used to expand facilities, or the level of service will decline.
• Other funding sources would have to be allocated to fund capital facilities to serve new development
25 1032
The chart lists the various
proposed projects as listed in
Richmond Parks Assessment of
Soccer Fields.
Park Impact Fee revenue can be
used in these types of projects that
expand the capacity of current
parks and new parks.
Parks Master Plan Projects
26 1033
Questions from City Council
Question: The Industrial and Commercial fees are hard to know how to judge.
Are the maximum allowable increases so high they would discourage businesses trying to move/expand here?
Response:
• The majority of recent nonresidential development has been mixed-use buildings and new light industrial/warehouse/logistic uses.
• There are not many entitled/anticipated nonresidential projects in the near term. • There is one hotel project in the Hilltop area under review and an entitled boat repair facility.
• The recent activity around warehousing has significantly slowed down. • Staff thinks the biggest factor for feasibility of nonresidential projects is the interest rates and will continue to monitor the issue during the first year and report back to Council before the year two fees go into effect. 27 1034
Next Steps
• Revise fee study (if needed)
• Hold public hearing to adopt nexus study and fee schedules (April 16) • Transportation impact fee study
• Completion of Long Range Transportation Infrastructure Planning Study by end of calendar year
• Updated Transportation impact fee study to City Council in Spring of 2025
28 1035
Questions
29 1036
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
1037
CALIFORNIA STATE AUDITOR
621 Capitol Mall, Suite 1200 I Sacramento I CA I 95814
916.445,0255 I TTY 916.445.0033
For complaints of state employee misconduct,
contact us through the Whistleblower Hotline:
1.800.952.5665
Don't want to miss any of our reports? Subscribe to our email list at 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 I Alternative format reports available upon request I Permission is granted to reproduce reports 1038
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:
Michael S. Tilden Aeling Stale Auditor
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,
MICHAELS . TILDEN, CPA
Acting California State Auditor
621 Capito l Mall, Suite 1200 I Sacramento, CA 95814 I 916 .445 .0255 I 916.327.0019 fa x I www .auditor.ca .gov 1039 iv CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
Blank page inserted for reproduction purposes only.
1040
CALIFORNIA STATE AUDITOR
Report 2021-806 I November 2022
LOCAL HIGH RISK
HIGH-RISK ISSUES
City of Richmond, Contra Costa County Risk Designation: High Risk Despite Recent Improvements, Richmond's Long-Term Financial Stability Remains Uncertain Financial Reserves Have Increased, but Risks Remain
Richmond Forecasts a Significant Long-Term Deficit, Which Evolving Financial Trends May Worsen The City's Debt Burden Remains High
Addressing Its Poor'J! Funded Retirement Benefits and Be/ow-Market Compensation Will Increase Richmond s Expenses
Significant Retirement Obligations Continue to Burden the City Richmond May Have Missed Opportunities to Better Address Its Retiree Health Obligations Increasing the Competitiveness of City Salaries Will Incur Additional Costs 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 Housing Authority Missed Mandatory Deadlines to Complete the Recovery Agreement The Housing Authority May Owe the Internal Revenue Service $1 Million or More in Taxes and Penalties 7 9
13 17
18 20
23 25
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
City Staff Have Not Updated Fee Schedules as Required
Appendices
Appendix A- The State Auditor's Local High-Risk Program Appendix B-Scope and Methodology
Agency Response
City of Richmond
California State Auditor's Comment on the Response From the City of Richmond 29 30
33 35
39 43
V
1041
vi CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
Blank page inserted for reproduction purposes only.
1042
CALIFORNIA STATE AUDITOR
Report 2021-806 1 November 2022
LOCAL HIGH RISK
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, identif1ed five areas-debt burd en, pension obligations, pension costs, futur e 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 determi ned 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 2019-20 2020-21
Overall Risk Rating MNi©I MNi©I Moderate Risk
General Fund Reserves HIGH HIGH MODERATE
Debt Burden
Liquidity
Revenue Trends
Pension Obligations
Pension Funding
Pension Costs
Future Pension Costs
OPEB Obligations
OPEB Funding
HIGH
MODERATE
HIGH
MODERATE
HIGH
HIGH
MODERATE
HIGH
HIGH
MODERATE
HIGH
MODERATE
HIGH
HIGH
HIGH
Source: Analysis based on Richmond's audited financial statements and Cal PERS' actuarial reports.
HIGH
HIGH
HIGH
I
HIGH
HIGH
1043
2 CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
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. 1044
Recommendations
CALIFORNIA STATE AUDITOR
Report 2021-8061 November 2022
LOCAL HIGH RISK
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.
3 1045
4 CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
• To ensure complian ce 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 1 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.
1046
Introduction
CALIFORNIA STATE AUDITOR
Report 2021-806 1 November 2022
LOCAL HIGH RISK
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 enterpris e 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 1047
6 CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
Figure 1
Richmond's General Fund Revenues Have Slightly Exceeded Expenditures in Recent Years $200
120
~
C
~ 100 ~
.E
80 60
40 20
0 2016-17 2017-18
Source: Richmond's audited financial statements.
2018- 19
Fiscal Year
- General Fund Revenues
- General Fund Expenditures
2019-20 2020- 21
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CALIFORNIA STATE AUDITOR
Report 2021-8061 November 2022
Despite Recent Improvements,
Richmond's-Long-Term Financial
Stability Remains Uncertain
LOCAL HIGH RISK
------------
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 rriay 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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8 CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
Figure 2
Richmond Has Been Increasing Its General Fund Reserves
$50 -
- General Fund Reserves
45 -
40 --------------
30 -
10 0
2016-17 2017-18 2018-19 2019-20 2020-21 2021-22*
Fiscal Year
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 1050
CALIFORNIA STATE AUDITOR
Report 2021-806 I November 2022
LOCAL HIGH RISK
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.
Table2
Richmond Has Multiple Areas of Concern That May Require Increased Reserves ~ - ~ .
GFOA IDENTIFIED
RISK FACTOR
Predictability of
revenues and
expenditures
Risk of one-time
and emergency
expenditures
Potentia I need for
general fund support
of other funds
Potential impact on
bond ratings
Planned other uses
for unrestricted
funds
I
I
i
I
I
I
HAS RICHMOND
REDUCED OR
ELIMINATED THE RISK?
YES
YES
CONDITIONS WITHIN RICHMOND
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.
As we discuss later in the report, the housing authority represents an ongoing risk of significant one-time expenditures for Richmond.
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.
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.
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.
9 1051
I ,o
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November 2022 I Report 2021-806
LOCAL HIGH RISK
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 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.
SalarvSavings. 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.
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 yeaFs, 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.
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Figure3
Richmond's Latest Projections Show Expenditures Exceeding Revenues - Projected Revenues
- Projected Expenditures
Operating Deficit:
• .. • • •
$260
240 --- -
220
~
c::
~ 200 ~
-=
180
160
140
120
100
2022-23 2023-24 2024-25 2025-26 2026-27 2027-28
Fiscal Year
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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CALIFORNIA STATE AUDITOR
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Figure4
Richmond's Forecasted Deficits Could Critically Deplete Its General Fund Reserves $60 ----------------------
55 ------------ The city falls below
GFOA's recommended
reserve level.
0 2022-23* 2023-24
The city has less
than two weeks of
------- expenses in reserve.
2024-25 2025-26 2026-27 2027-28
Fiscal Year
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 a·fter 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 1054
CALIFORNIA STATE AUDITOR
Report 2021-806 I November 2022
LOCAL HIGH RISK
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 oth er 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. 1055
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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 imP,oses 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 paymeht 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 curr ent dollars. Figure s 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 ~
"' er:
i:::-::,
)B
e: ';:
"' ,J:!.
6 vi =:,
Apri/6,2021
Staff presents analysis
and refinancing options
to city council.
4.0%
3.5 3.0
2.5 2.0
1.5 1.0
0.5 0.0
June 21, 2022
City council
authorizes issuance.
April 26, 2022
Staff presents analyst's
conclusions to city council.
September B, 2022
City issues new
bonds.
December 7, 2021
City procures a
financial analyst.
October 5, 2021
Staff recommends quick
action to refinance.
Date
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. 1057
I 16
CALIFORNIA STATE AUDITOR
November 2022 I Report 2021-806
LOCAL HIGH RISK
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 Cal PERS are separated into two plans- one specifically for safety employees and the second for other employees.
s In addition to the city's two Cal PERS plans, Richmond pays pension costs of less than $1.s 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. 1059
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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 insuranc e 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. 1060
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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.? 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 bei'ng 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. 1061
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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
Non-Safety All
Public Safety Firefighters
Fire Management
Police Officers
Police Management
LAST COST-OF-LIVING
ADJUSTMENT
July 2015
July 2018
July 2018
July 2018
Jan.2016
RECENT OR NEXT
COST-OF-LIVING
ADJUSTMENT
Jan. 2023 (5%)
June 2022 (1%)
None Scheduled
June 2022 (1 %)
June 2022 (1 %)
INFLATION SINCE LAST
COST-OF-LIVING ADJUSTMENT
(THROUGH JUNE 2022)
24%
18%
18%
18%
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 s 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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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 frqm 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 1065
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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.
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 accou.nts 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.
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 t_he 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 maint enance and rehabilitation of affected housing units - are negatively affecting Richmond residents who currently rely on that public housing.
t-
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Figure6
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LOCAL HIGH RISK
HUD Has Repeatedly Identified Mismanagement of the Housing Authority .-----~I HUD I~ ---~ J i
..-a..;:r---..._ After its 2009 audit of the housing
authority, HUD designated the
housing authority as a
TROUBLED AGENCY.
HU D's 2009 audit of the housing authority
found the following:
@ 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.
Source: HUD audit reports.
After its 2016 audit of the housing
authority, HUD again designated
the housing authority as a
TROUBLED AGENCY.
HU D's 2016 audit found the following:
@ Inadequate financial practices and lack of
accountability-exemplified by:
- Submitting documentatiQn 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.
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 1067
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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 HU D's Recovery Agreement Deadlines as of September 2022
2019
2020
2021
OCTOBER: Signed recovery agreement with HUD.
ocroBER: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.
OVERDUE
DE~EMBER:Obtain HUD approval for a redevelopment application for undeveloped ·········f#J•mt Hacienda property parcels.
DECEMBER: Begin construction of Richmond Village 3 redevelopment. • • • • •• • • • • • • •••• • • • • • ·f {1J•MiJ 2022
1--MARCH,Start Nevin Plaza redevelopment. ............................. ...................... -f{,tJ•t.rfj 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. 1068
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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 $7 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. 1071
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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
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.
compliance inspections, have fees that
are sufficient to cover the cost of those
services.lo 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 so 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 updat ed 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. 1072
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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.
Figures
Richmond Has Not Regularly Updated Its Fees and May Not Be Recovering Costs for Related Services 2018 2019 2020 2021 2022
Police Department 0 0 0 - 0 0
Fire Department 0 0 0 0 0
Library and Community Services
e 0 0 0 e
Public Works Engineering Department 0 0 0 0 e
Public Works Water Resource Recovery
e 0 0 0 0
Community Development Planning Department
0 0 0 0 0
Community Deve/opmef!t Building Department 0 0 e 0 e
Community Development Code Enforcement 0 0 0 0 0
(2) The city updated the department's fees to reflect the cost of providing services. 8 The city updated some but not all of the department's fees to reflect its costs. 0 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 t
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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,
~
MICHAELS. TILDEN, CPA
Acting California State Auditor
November 10, 2022
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APPENDIX A
The State Auditor's Local High-Risk Program
CALIFORNIA STATE AUDITOR
Report 2021-806 I November 2022
LOCAL HIGH RISK
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 describ e 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 . 1075
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APPENDIX B
Scope and Methodology
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LOCAL HIGH RISK
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 . 1077
36 CALIFORNIA STATE AUDITOR
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Audit Objectives and the Methods Used to Address Them
' I I :
Review and evaluate the laws,
rules, and regulations significant
to the audit objectives.
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.
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.
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.
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.
I
METHOD
Identified and reviewed relevant federal and state laws, rules, regulations, municipal code, and other background materials applicable to the city. • 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 enterpris~ funds and the degree to which it has relied on general fund subsidies in the past five fiscal years.
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.
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. • 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. 1078
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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.
7 Review and assess any other
issues that are significant to the
audit.
Source: Audit workpapers.
Assessment of Data Reliability
METHOD
CALIFORNIA STATE AUDITOR
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LOCAL HIGH RISK
• 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.
• 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.
The U.S. Governm ent Accountability Office, whose standards we are statutorily obligated to follow, requires us to assess the sufficiency and appropriaten ess of computer-proc essed 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 purpos e of reviewing its financial condition . 37 1079
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CALIFORNIA STATE AUDITOR
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_c_1TY_ M_A_N_A_G_E_R_·s_o_F_F_1c_E _____________ fffftl.. •• October 21, 2022
Via Email - [email protected]
Michael S. Tilden, CPA*
Acting California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Re: State Auditor's Recommendations
2021-806- Confidential Draft Audit Report
Dear Mr. Tilden:
The City of Richmond ("City") is pleased to have the opportunity to comment on the recommendations ("Recommendations") from the State Auditor's Report ("Audit Repo1t") dated November 10, 2022.
The City has observed the representatives of the State Auditor's Office ("Office") over the last several months as we provided information and worked together to make the Audit Report accurate and helpful. We believe the Office has acted with professionalism, sound judgment, and fairness to provide an Audit Report which will be helpful to the City. Finally, we appreciate that this response will be published along with the Audit Report itself.
The comments herein are those of the City Staff. Given the limited time posed for review, we were able to share a draft of the Audit Repmt at a City Council closed session held pursuant to Govt.
Code § 54956.75 on October 18, 2022, to ensure that Councilmembers are aware of the recommendations, but not of the responses which were subsequently drafted and contained herein.
Council sets policy; accordingly, all matters of policy will go to the Council at a public meeting for actual determination .
City staff responses to each recmmendation included in the Audit Report are included below. We understand that descriptions of the findings and conclusions that led to these recommendations can be found in the sections of Audit Repo1t.
l. To help ensure that Richmond maintains appropriate reserves for times of fiscal uncertainty, city staff should, by June 2023, review Richmond's reserve policy to detennine 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.
The City Staff agrees with the recommendation and will continue to review its Reserve Policy. In recent years, the City has continuously improved its reserve level, but it was still below the City reserve policy target of 15 percent as of June 30, 2021. On September 20, 2022, the City Council adopted a new Cash Reserve 450 Civic Center Plaza, Richmond, CA 94804-1630
Telephone: (510) 620-6512 Fax: (510) 620-6542 www.ci.richmond.ca.us * California State Auditor's comment appears on page 43. 1081
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Policy with a minimum target reserve level increased to a range up to 20 percent, meeting GFOA standards. The City is estimated to end Fiscal Year (FY) 2021-22 with a reserve level well above its policy range at 22.95 percent of the General Fund expenditures budget for FY 2022-23. The City staff will perform an analysis per the GFOA best practices on the five risk factors and present such updated analysis to the City Council.
2. To decrease the risk that Richmond will deplete its reserves, city staff should, by June 2023, present to the city council a list of proposed budget actions that would help ensure balanced budgets and eliminate projected deficits.
Under the City Council approved Guiding Fiscal Policies, the City is required to develop an annual budget guided by a long-term financial plan. For the past several years, with the exception of recent pandemic years, the City has adopted a balanced annual budget and also has ended each fiscal year with a significant surplus. The City staff will continue to work with the City Council on developing a long-term plan and then develop a structurally balanced budget for FY 2023-24.
3. 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.
The City staff agree that in present circumstances, economic downturns and recessions need to be factored into budgets. The City continues to use its Five-Year Forecast as a dynamic document to assist and inform in strategic decision-making processes, including labor negotiations and budget development. The City will work on refining its Five-Year Forecast and incorporate all the factors, global and local, impacting the City's fiscal health, including but not limited to recession, inflation, housing market, etc. The City staff plans on bringing back a refined forecast with multiple scenarios by spring 2023 prior to the FY 2023-24 budget development.
4. To ensure that Richmond is able to fund its retirement-related costs, city staff should, by June 2023, propose to the city council a specific policy regarding funding of its pension trust ftmd for this purpose. Staff should report to the city council on estimated long-term savings from increasing its direct payments to Cal PERS 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.
The City has created a Pension Prefunding 115 Trust account and is in the process of developing a policy. The City staff concurs with the recommendation and will perform an analysis of the two options: (a) prefundingthe 115 Trust account versus (b) prefunding directly to CalPERS. The analysis will be presented to the City Council with a recommendation in spring of 2023.
5. To improve the city's ability to pay other post-employment benefits, Richmond should, by June 2023 and annually thereafter, implement a policy identifying funds, such as surpluses or one-time revenues that should be contributed to the OPEB trust fund. Staff should conduct an annual analysis to determine whether any funds available to the city are 1082
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