Agenda — Richmond City Council, March 17, 2026 (part 2 of 8)

March 17, 2026

Economic Development

DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM:

Nannette Beacham, Economic Development Director
Samantha Carr, Environmental Manager
Valerie Li, Office Aide

Subject:

Contract with Zero Net Energy Alliance for Lighting Fixture Upgrades at City Hall[Title]
FINANCIAL IMPACT: The proposed $250,000 expenditure is included within the approved fiscal year 2025-Environmental and
Community Investment Agreement (ECIA) and Economic
Development General Fund budget. (Account Strings:
11771018-400201-2A1EC ($50,000), 01362765-400201
($200,000)).

PREVIOUS COUNCIL
ACTION:

None.

STATEMENT OF THE
ISSUE:

The City of Richmond, in partnership with the Zero Net
Energy Alliance (ZNEA), received a grant from the
California Energy Commission to support the
development of the Marin Clean Energy (MCE) Virtual
Power Plant (VPP) Pilot program, advancing clean
energy deployment, reducing greenhouse gas emissions,
and increasing resiliency at public facilities. By upgrading the lighting at 450 Civic Center Plaza (City Hall) —a
critical public facility that also serves as the City’s Emergency Operations Center (EOC), it will provide
future cost savings from increased energy efficiency and participantion in VPP. The Economic Development
Department is requesting City Council approval of a
agreement with ZNEA to provide these services.

AGENDA
REPORT
145

Page 2 of 3 ends

March 17, 2026
RECOMMENDED ACTION: APPROVE a sole-source contract with Zero Net Energy Alliance (ZNEA) in the amount of $250,000 to upgrade
lighting infrastructure at 450 Civic Center Plaza (City Hall) and participate in Marin Clean Energy's (MCE)
Virtual Power Plant Program with a term beginning
February 27, 2026, through September 30, 2026 –
Economic Development Department (Nannette
Beacham/Valerie Li 510-621-1554/Samantha Carr 510-
620-5407).

DISCUSSION:

ZNE Alliance (ZNEA) in partnership with the City of Richmond, MCE Clean Energy (MCE) and other grant partners were awarded the California Energy Commission (CEC) grant under Grant Award Number: EPC-19-005 ("CEC Grant Agreement"). As part of of this grant, the MCE Virtual Power Plant (VPP) Pilot Program was developed. Due to the grant, ZNEA and subcontractor Serious Controls are the only and most knowledable vendors to provide the lighting upgrade service. By upgrading the lighting at 450 Civic Center Plaza (City Hall) —a critical public facility that also serves as the City’s Emergency Operations Center (EOC), the City can receive bill savings from both the new energy efficient fixtures and from participation in the VPP Program.

A Virtual Power Plant (VPP) is a network of distributed energy resources (DERs)—such as batteries, smart devices, and efficient systems—that are coordinated to optimize grid performance. MCE’s VPP program will allow DERs at participating sites to be monitored and dispatched via a Distributed Energy Resource Management System (DERMS) in ways that:
 Reduce peak demand
 Lower emissions
 Support energy cost savings
 Improve resilience during outages

As a publicly owned, critical operations site, Richmond City Hall is an ideal candidate for early DER integration. The proposed lighting upgrade will improve building energy efficiency while positioning the facility for future participation in load-shifting and grid- responsive operations managed by MCE. The site’s location at 450 Civic Center Plaza and its use as an Emergency Operations Center strengthens the need for resilient infrastructure investments.

Richmond Municipal Code (RMC) Section 2.52.326 provides for sole source procurement where the City determines in writing, after conducting a good faith review of available sources, that there is only one source for the required good or service. Sole source procurement is justified in this instance because ZNEA are the awardees of the 146

Page 3 of 3 ends

March 17, 2026
grant and are therefore the only vendor that can provide the service for the VPP project (Attachment 1).

ZNEA’s subcontractor, Serious Controls, LLC, will perform the installation. The attached quote outlines costs for a comprehensive lighting retrofit package, including (Attachment 2):
 Full disposal of old lighting materials
 Installation of new high-efficiency fixtures
 All labor costs
 A 5-year warranty

City staff recommend approval of a sole-source contract with the Zero Net Energy Alliance (ZNEA) in the amount of $250,000 to upgrade lighting infrastructure at 450 Civic Center Plaza (City Hall) and participate in Marin Clean Energy’s Virtual Power Plant (VPP) Program (Attachment 3). The contract term would run from February 27, 2026, through September 30, 2026. After the lighting upgrades are installed, the City will apply to the MCE VPP program by completing and signing an MCE VPP Agreement to secure the full benefits of future cost savings, while supporting the City’s goals to advance clean energy, reduce greenhouse gas emissions, and increase resiliency at public facilities (Attachment 4).

NEXT STEPS:

1. Enter into agreement with ZNEA for the lighting upgrade

2. ZNEA to complete installation through subcontractor Serious Controls, LLC

3. Apply for MCE VPP program by completing and signing MCE VPP Agreement

SYNERGISTIC POLICIES:

This VPP Program supports and advances multiple City goals, including:
 Richmond Climate Action Plan
o Strategy RE3: Promote switching from natural gas to clean electricity o Strategy EE3: Promote energy efficiency and green buildings  Health in All Policies (HiAP)
o Enhances environmental health through sustainable public infrastructure

DOCUMENTS ATTACHED:

Attachment 1 – 450 CCP Lighting Upgrade - Sole Source Justification Form Attachment 2 – Lighting Upgrade Quote for 450 Civic Center Plaza Attachment 3 – 450 CCP Lighting Upgrade - Standard Contract Attachment 4 – MCE Virtual Power Plant Contract
147
148
149
2 13 2026
150
Serious Controls LLC July 2, 2025
4000 Barranca Pkwy, Suite 250 070225A
Irvine, CA. 92604 End-User
Bill To: Ship to:

SalespersonJob Shipping Method Shipping TermsDelivery DatePayment TermsDue Date NM Our Truck Balance due on completion
QTY Location Fixture Type Material CostLabor &
Recycling CostRebates Line Total
4 SF1 LED STRIP FIXTURE $ 238.00 $ 408.00 $ - $ 646.00 10 SF1A LED STRIP FIXTURE $ 595.00 $ 1,020.00 $ - $ 1,615.00 16 SF2 LED STRIP FIXTURE $ 952.00 $ 1,632.00 $ - $ 2,584.00 6 SF5 LED FLAT PANEL $ 459.00 $ 612.00 $ - $ 1,071.00 4 RC2 LED TRIM $ 204.00 $ 408.00 $ - $ 612.00 331 TYPE ATUNABLE FLAT PANEL 2X2 $ 25,321.50 $ 33,762.00 $ - $ 59,083.50 172 TYPE BTUNABLE FLAT PANEL 2X4 $ 16,082.00 $ 17,544.00 $ - $ 33,626.00 3 TYPE CTUNABLE FLAT PANEL 2X2 $ 229.50 $ 306.00 $ - $ 535.50 95 TYPE CLED TRIM $ 4,845.00 $ 9,690.00 $ - $ 14,535.00 11 TYPE DLED PAR LAMP $ 374.00 $ 1,122.00 $ - $ 1,496.00 143 TYPE ELED TRIM $ 7,293.00 $ 14,586.00 $ - $ 21,879.00 6 TYPE F LED PAR LAMP $ 204.00 $ 612.00 $ - $ 816.00 116 TYPE GLED 2FT T8 $ 2,958.00 $ 11,832.00 $ - $ 14,790.00 53 TYPE HLED T8 LAMP $ 1,351.50 $ 5,406.00 $ - $ 6,757.50 36 TYPE J LED TRIM $ 1,836.00 $ 3,672.00 $ - $ 5,508.00 48 TYPE KLED T5 TUBULAR LAMP $ 1,224.00 $ 4,896.00 $ - $ 6,120.00 12 TYPE KLED T5 TUBULAR LAMP $ 306.00 $ 1,224.00 $ - $ 1,530.00 41 TYPE L LED T5 TUBULAR LAMP $ 1,045.50 $ 4,182.00 $ - $ 5,227.50 19 TYPE MLED T5 TUBULAR LAMP $ 484.50 $ 1,938.00 $ - $ 2,422.50 8 TYPE OLED FLAT PANEL $ 748.00 $ 816.00 $ - $ 1,564.00 16 TYPE P LED FLAT PANEL $ 880.00 $ 1,632.00 $ - $ 2,512.00 0 0 0 $ - $ - $ - $ - 0 0 0 $ - $ - $ - $ - 0 0 0 $ - $ - $ - $ - 0 0 0 $ - $ - $ - $ - 0 0 0 $ - $ - $ - $ - Fixture Totals: -$ 184,930.50$ Lighting Controls
Controller Cost Each
PIR Motion & Daylight Sensor $ 50.76 3,299.40$ Wireless Bridge $ 140.54 10,540.50$ Labor for Controls install $ 23.91 32,152.50$ System Commissioning $ 4,200.00 4,200.00$ 50,192.40$
Subtotal 235,122.90$
Sales Tax 8,147.04$
Total 243,269.94$
Quotation
Thank you for your business!
Date:

Quote #:

Customer Type:
450 Civic Center Plaza
Richmond CA 94804
510-620-6582
Total CostQTY
65 75
1 888.444.1855 / [email protected]
City of Richmond CA
Attention Omar Rascón City of Richmond CA
450 Civic Center Plaza
Richmond CA 94804
510-620-6582
1 Control System Totals:
151

CITY OF RICHMOND

STANDARD CONTRACT
Department: City Project Manager:

City Project Manager E-mail: City Project Manager Phone No:

Vendor No: 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, a municipal corporation (“the City”), and the following named Contractor:

Contractor Name:

Street Address:

City, State, Zip Code:

Contact Person:

Telephone: Email:

Business License No:
☐ 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 terminates _________________ unless terminated earlier as set forth herein.

3. Payment Limit. City’s total payments to Contractor under this Contract shall not exceed $______________ (“Contract Payment Limit”) unless a Contract Amendment has been approved by the City Council or City Manager. If this amount includes a contingency, Contractor acknowledges that any use of such contingency shall be for work beyond the original scope of services and requires prior written authorization by the City. If noted below, Compensation for work done under this Contract, shall not exceed as follows:

FY _________ total compensation shall not exceed $_________________ FY _________ total compensation shall not exceed $_________________ FY _________ total compensation shall not exceed $_________________

4. Contractor’s Obligations. Contractor agrees to perform all work at its own cost and expense, to furnish all labor, tools, equipment, materials, except as otherwise specified, in accordance with the Service Plan set forth in Exhibit A, attached hereto and incorporated herein.

5. City Obligations. City shall make payments to the Contractor in accordance with the Payment Provisions set forth in Exhibit B, attached hereto and incorporated herein.

Economic Development
Samantha Carr
[email protected]
(510) 620-5407
Partner with Zero Net Energy Alliance (ZNEA) to participate in the Marin Clean Energy (MCE) Virtual Power Plant (VPP) program to provide lighting upgrades at 450 Civic Center Plaza.

Zero Net Energy Alliance
744 Eureka Ave, Suite 103
Davis, CA 95616
Richard Schorske
(415) 310-2407
[email protected]
February 27, 2026
September 30, 2026
250,000.00
25-26
250,000.00
152

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

7. General Conditions. This Contract is subject to the General Conditions (Exhibit D), which are attached hereto and incorporated herein.

8. Special Conditions. This Contract is subject to the Special Conditions (Exhibit E) (if any), which are attached hereto and incorporated herein.

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

10. Sanctuary City Compliance Statement. This Contract is subject to the Sanctuary City Compliance Statement (Exhibit G), which is attached hereto and incorporated herein.

11. Signatures. These signatures attest the parties' agreement hereto:

CITY OF RICHMOND,
a municipal corporation [BUSINESS NAME]
(* The Corporation Chairperson of the Board, President, or Vice President should sign below)

By: _________________________ By: ___________________________ Title: ________________________ Title: __________________________ Date Signed: _________________ Date Signed: ___________________

I hereby certify that this Contract (* The Corporation Chief Financial Officer or Assistant has been approved by City Council Treasurer, or Secretary or Assistant Secretary should or the City Manager. sign below)

By: _________________________ By: ___________________________ City Clerk Title: __________________________
Date Signed: ____________________
Approved as to form:
(NOTE: Pursuant to California Corporations Code Section By: _________________________ 313, if Contractor is a corporation or nonprofit organization, City Attorney this Contract (1) must be signed by (a) the Chairperson of the Board, President, or Vice-President and (b) the
Chief Financial Officer or Assistant Treasurer, or
Secretary or Assistant Secretary)

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
Sanctuary City Compliance Statement Exhibit G

Zero Net Energy Alliance
153
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

EXHIBIT A

SERVICE PLAN

Contractor shall, to the satisfaction of the Project Manager ( set forth in Exhibit B) , perform the following services and be compensated as outlined below [or attach service plan if necessary]:

Zero Net Energy Alliance
Please see attached Scope of Work.

The amount of $6,730.06 will be used as contingency.
154
Attachment 1: Scope of Work and Timeline
ZNEA and Serious Controls shall:

1. Obtain, maintain, and provide to the City all documents required to execute and perform under the Contract, including but not limited to valid business licenses, insurance certificates, and permits.

2. Conduct a project kick-off meeting with City staff to coordinate scope, schedule, site access, and project logistics.

3. Provide the City with a detailed installation schedule for lighting and controls, with the intent that installation activities commence on a Friday evening, where feasible and subject to City approval.

4. Furnish and install all lighting and control equipment in accordance with City-approved specifications, manufacturer requirements, and applicable industry standards.

5. Submit to the City copies of all lighting and control equipment specifications prior to or upon installation.

6. Provide copies of all applicable manufacturer warranties for materials and equipment installed as part of the Project, including the warranty commencement date.

7. Place all removed, replaced, or surplus materials in a City-designated area for disposal.

8. Submit an itemized invoice for completed work in accordance with the payment provisions of the Agreement.

The City shall:

1. Notify applicable City staff of the scheduled work and provide vendor with access to City facilities as necessary to complete the Project.

2. Designate a City staff representative to oversee, coordinate, and serve as the primary point of contact for vendor during installation activities.

3. Dispose of materials in the City-designated area.

4. Review the completed installation and receive all required specifications, warranties, and project documentation.

5. Inspect the completed work and provide written acceptance upon verification of proper installation and operational performance.

Timeline:

Consultant shall perform the Services in accordance with the following anticipated schedule. Dates are estimates and subject to change upon mutual agreement of the parties. - February 17, 2026: Receive City Council Approval
- February 27, 2026: Finish up the contract process and acquire all necessary documents - March 2, 2026: Start project installation
- March 31, 2026: Finish installation project and provide invoice for work 155
Serious Controls LLC July 2, 2025
4000 Barranca Pkwy, Suite 250 070225A
Irvine, CA. 92604 End-User
Bill To: Ship to:

Quote #:

EXHIBIT B

PAYMENT PROVISIONS

1. COMPENSATION TO CONTRACTOR:

a. Provided Contractor is not in default under this Contract, Contractor shall be compensated in the manner set forth herein.

b. All payments made pursuant to this Contract shall be subject to the Contract Payment Limit. The Payment Limit includes expenses (phones, photocopying, 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.

c. All City vendors receiving new contracts shall sign up to receive electronic payments through the City’s Automated Clearinghouse (ACH) payments service/provider.

2. SUBMISSION OF INVOICES:

Contractor shall submit timely invoices by email to
[email protected] and/or to the following address:

Attention: City of Richmond Finance/Account Payable
Project Manager: _______________________
P.O. Box 4046
Richmond, CA 94804

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

a. 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.

b. All appropriate permits, certificates, and licenses, including a City business license shall be obtained and maintained for the duration of this Contract before any payment is authorized.

4. All insurance coverage required by this Contract shall be provided by the Contractor before this Contract is executed by the City. The insurance coverage required by this Contract shall be maintained by Contractor for the duration of this Contract and must be in place before any payment is authorized.

Samantha Carr
Samantha Carr
Zero Net Energy Alliance
157
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

EXHIBIT C

AUTHORIZED REPRESENTATIVES AND NOTICES

1. All required written notices shall be delivered: (i) by hand; or (ii) sent by registered, express, or certified mail, with return receipt requested or with delivery confirmation requested from the U.S. postal service; or (iii) sent by overnight or same day courier service at the party’s respective address listed in this Section.

2. Each notice shall be deemed to have been received on the earlier to occur of:
actual delivery or the date on which delivery is refused; or three (3) days after notice is deposited in the U.S. mail or with a courier service in the manner described above (Sundays and City holidays excepted).

3. Either party may, at any time, change its notice address (other than to a post office box address) by giving the other party three (3) days prior written notice of the new address.

4. All notices, demands, requests, or approvals from Contractor to the City shall be addressed to the City at:

City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
Email: ________________________________________________

5. All notices, demands, requests, or approvals from the City to Contractor shall be addressed to Contractor at:

Attn:

Email: ________________________________________________ Samantha Carr
[email protected]
Zero Net Energy Alliance
Zero Net Energy Alliance
744 Eureka Ave, Suite 103
Davis, CA 95616
[email protected]
158
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

EXHIBIT D

GENERAL CONDITIONS

1. INDEPENDENT PARTIES:

Contractor hereby declares that Contractor is engaged as an independent business and Contractor agrees to perform the services as an independent contractor.

The manner and means of conducting the services and tasks are under the control of Contractor except to the extent they are limited by statute, rule or regulation and the express terms of this Contract. No civil service status or other right of employment will be acquired by virtue of Contractor’s services. None of the benefits provided by the City to its employees, including but not limited to unemployment insurance, workers’ compensation plans, vacation and sick leave, are available from the City to Contractor, its employees or agents. Deductions shall not be made for any state or federal taxes, FICA payments, PERS payments, or other purposes normally associated with an employer-employee relationship from any compensation due to Contractor. Payments of the above items, if required, are the responsibility of Contractor.

2. TIME IS OF THE ESSENCE:

Contractor and the City agree that time is of the essence regarding the performance of this Contract.

3. STANDARD OF CARE:

Contractor agrees to perform all services hereunder in a manner commensurate with the prevailing standards of like professionals or service Contractors, as applicable, in the San Francisco Bay Area and agrees that all services shall be performed by qualified and experienced personnel who are not employed by the City.

4. IMMIGRATION REFORM AND CONTROL ACT (IRCA):

Contractor assumes all responsibility for verifying the identity and employment authorization of all of its employees performing work hereunder, pursuant to all applicable IRCA or other federal, or state rules and regulations. Contractor shall indemnify, defend, and hold the City harmless from and against any loss, damage, liability, costs or expenses arising from any noncompliance of this provision by Contractor.

5. NON-DISCRIMINATION:

Consistent with the City’s policy and state and federal law that harassment and discrimination are unacceptable conduct, Contractor and its employees, contractors, and agents shall not harass or discriminate against any job applicant, City employee, or any other person on the basis of any kind of any statutorily (federal, state or local) protected class, including but not limited to: race, religious creed, color, national origin, ancestry, Zero Net Energy Alliance
159
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
disability (both mental and physical) including HIV and AIDS, medical condition (e.g. cancer), genetic information, marital status, sex, gender, gender identity, gender expression, age, sexual orientation, pregnancy, political affiliation, military and veteran status or legitimate union activities. Contractor agrees that any violation of this provision shall constitute a material breach of this Contract.

6. CITY PROPERTY:
a. Each and every report, draft, work product, map, record, applicable plans, drawings, calculation, data, specification, video, graphic, or any other material or document produced, prepared or caused to be prepared by Contractor pursuant to or in connection with this Contract shall be the exclusive property of the City.

b. 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 11 below, indemnify, defend and hold the City harmless from and against any discovery or Public Records Act request seeking the disclosure of such proprietary software or data.

c. No report, information or other data given to or prepared or assembled by Contractor pursuant to this Contract shall be made available to any individual or organization by Contractor without prior approval of the City Manager or their designee.

d. Contractor shall, at such time and in such form as City Manager or their designee may require, furnish reports concerning the status of services and tasks required under this Contract.

7. RECORDS:

a. Contractor shall maintain complete and accurate records with respect to the services, tasks, work, documents and data in sufficient detail to permit an evaluation of Contractor’s performance under the Contract, as well as maintain books and records related to sales, costs, expenses, receipts and other such information required by the City that relate to the performance of the services and tasks under this Contract (collectively the “Records”).

b. All Records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Contractor shall provide free access to the Records to the representatives of the City or its designees during regular business hours upon reasonable prior notice. The City has the right to examine and audit the Records, and to make copies or transcripts therefrom as necessary, and to allow inspection of all proceedings and activities related to this Contract. Such Records, together with supporting documents, shall be kept separate from other documents and records and shall be maintained by Contractor for a period of five (5) years after receipt of final payment.

Zero Net Energy Alliance
160
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
c. If supplemental examination or audit of the Records is necessary due to concerns raised by the City’s preliminary examination or audit of records, and the City’s supplemental examination or audit of the records discloses a failure to adhere to appropriate internal financial controls, or other breach of this Contract or failure to act in good faith, then Contractor shall reimburse the City for all reasonable costs and expenses associated with the supplemental examination or audit.

8. PERMITS AND LICENSES:

Contractor, at its sole expense, shall obtain and maintain during the term of this Contract, all appropriate permits, certificates and licenses, including a City business license, required in connection with the performance of the services and tasks hereunder.

The failure to obtain such permits and licenses 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.

9. TERMINATION:

a. Termination Without Default. Notwithstanding any provision herein to the contrary, the 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 transmission of written notice to Contractor as provided in Exhibit C “Authorized Representatives and Notices”.

b. 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 Exhibit B; 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.

10. 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 Zero Net Energy Alliance
161
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
this Contract shall be forfeited and returned to City forthwith. This provision shall survive the termination of this Contract for one (1) year.

11. HOLD HARMLESS:

a. To the fullest extent permitted by law, Contractor shall indemnify, defend (with counsel acceptable to the City) and hold harmless the City, its City Council, boards, commissions, officials, employees, agents and volunteers (“Indemnitees”) from and against any and all loss, damages, liability, obligations, claims, suits, judgments, costs and expenses whatsoever, including attorney’s fees and costs of litigation (“Claims”), arising from or in any manner connected to Contractor’s performance of its obligations under this Contract or failure to comply with any of its obligations under this Contract or out of the operations conducted by Contractor even if the City is found to have been negligent. If the Claims filed against Indemnitees allege negligence, recklessness or willful misconduct on the part of Contractor, Contractor shall have no right of reimbursement against Indemnitees for the costs of defense even if negligence, recklessness or willful misconduct is not found on the part of Contractor. Contractor shall not have any obligations to indemnify Indemnitees if the loss or damage is found to have resulted solely from the negligence or the willful misconduct of the City. The defense and indemnification obligations of this Contract are undertaken in addition to, and shall not in any way be limited by, the insurance obligations contained in this Contract.

b. This indemnification obligation shall survive this Contract and shall not be limited by any term of any insurance policy required under this Contract; provided however, that if this Contract is for design professional services, this indemnity provision is limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the design professional (as defined in California Civil Code section 2782.8).

12. LIMITATIONS UPON SUBCONTRACTING AND ASSIGNMENT:

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

b. Contractor shall not assign, sublease, hypothecate, or transfer this Contract, or any interest therein, directly or indirectly, by operation of law or otherwise, without prior written consent of the City Manager. Contractor shall submit a written request for consent to transfer to the City Manager at least thirty (30) days in advance of the desired transfer.

The City Manager or their designee may consent or reject such request in their sole and absolute discretion. Any attempt to do so without said consent shall be null and void, and any assignee, sublessee, hypothecate or transferee shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer. However, claims for Zero Net Energy Alliance
162
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
money against the City under this Contract may be assigned by Contractor to a bank, trust company or other financial institution without prior written consent.

c. 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.

d. Only those persons and/or businesses whose names and resumés are attached to this Contract shall be used in the performance of this Contract. However, if after the start of this Contract, Contractor wishes to use sub-contractors, at no additional costs to the City, then Contractor shall submit a written request for consent to add sub- contractors including the names of the sub-contractors and the reasons for the request to the City Manager at least five (5) days in advance. The City Manager may consent or reject such requests in their sole and absolute discretion.

e. Each sub-contractor shall be required to furnish proof of workers’ compensation insurance and shall also be required to carry general, automobile and professional liability insurance (as applicable) in reasonable conformity to the insurance carried by Contractor.

f. In addition, any tasks or services performed by sub-contractors shall be subject to each provision of this Contract. Contractor shall include the following language in their Contract with any sub-contractor: “Sub-Contractors hired by Contractor agree to be bound to Contractor and the City in the same manner and to the same extent as Contractor is bound to the City.”

g. The requirements in this Section 12 shall not apply to persons who are merely providing materials, supplies, data or information that Contractor then analyzes and incorporates into its work product.

13. SAFETY:

a. Contractor acknowledges that the City is committed to the highest standards of workplace safety. Contractor will be solely and completely responsible for conditions of all vehicles owned or operated by Contractor, including the safety of all persons and property during performance of the services and tasks under this Contract.

Contractor shall assume sole and complete responsibility for the safety of Contractor's employees and any of subcontractor's employees This requirement will apply continuously and not be limited to normal working hours. In addition, Contractor will comply with all safety provisions in conformance with U.S. Department of Labor Occupational Safety and Health Act, any equivalent state law, and all other applicable Zero Net Energy Alliance
163
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
federal, state, county and local laws, ordinances, codes, and any regulations that may be detailed in other parts of the Contract. Where any of these are in conflict, the more stringent requirements will be followed. Contractor’s failure to thoroughly familiarize itself with the aforementioned safety provisions will not relieve it from compliance with the obligations and penalties set forth herein.

b. Contractor will immediately notify the City (in no event less than 24 hours) of any incident of death, serious personal injury or substantial property damage that occurs in connection with the performance of this Contract. Contractor will promptly submit to the City a written report of all incidents that occur in connection with this Contract. This report must include the following information: (i) name and address of injured or deceased person(s); (ii) name and address of Contractor’s employee(s) involved in the incident; (iii) name and address of Contractor’s liability insurance carrier; (iv) a detailed description of the incident; and (v) a police report.

c. Contractor acknowledges that the City shall have the right to impose, at the City’s sole discretion, requirements that it deems are necessary to protect the health and safety of the City employees, residents, and visitors. Contractor agrees to comply with all such requirements, including, but not limited to, mandatory vaccinations, the use of personal protective equipment (e.g. masks), physical distancing, and health screenings.

Contractor also agrees to make available to the City, at the City’s request, records to demonstrate Contractor’s compliance with this Section.

14. 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.

15. COMPLIANCE WITH ALL APPLICABLE LAWS:

a. During the term of this Contract, Contractor shall keep fully informed of all existing and future state and federal laws and all municipal ordinances and regulations of the City of Richmond which affect the manner in which the services or tasks are to be performed by Contractor, as well as all such orders and decrees of bodies or tribunals having any jurisdiction or authority over the same. Contractor shall comply with all applicable laws, state and federal and all ordinances, rules and regulations enacted or issued by the City. 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.

b. Contractor acknowledges that under § 2.60.070 of the Municipal Code ("Living Wage Ordinance"), Contractor is required to provide the City with documents and information verifying its compliance with the Living Wage Ordinance. 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 as prescribed in § 2.60.070 of the Municipal Code.

Zero Net Energy Alliance
164
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

c. Contractor shall comply with § 2.28.030 of the Municipal Code, obligating every Contractor or sub-Contractor under an agreement or sub-agreement with the City for public works, goods or services to refrain from discriminatory employment or 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 sub-contractor.

d. 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.

16. INTEGRATED CONTRACT:

The Recitals and exhibits are a material part of this Contract and are expressly incorporated herein. This Contract represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions hereof. Any modification of this Contract will be effective only by written execution signed by both the City and Contractor.

17. 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 Condition 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.

18. 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.

19. CONFLICT OF LAW:

This Contract shall be interpreted under, and enforced by the laws of the State of Zero Net Energy Alliance
165
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
California without regard to any choice of law rules which may direct the application of laws of another jurisdiction. The Contract and obligations of the parties are subject to all valid laws, orders, rules, and regulations of the authorities having jurisdiction over this Contract (or the successors of those authorities). Any suits brought pursuant to this Contract shall be filed with the courts of the County of Contra Costa, State of California.

20. 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.

21. INTERPRETATION:

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

22. WARRANTY:

If any product is 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.

23. SEVERABILITY:

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

24. 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 they are duly authorized to enter into and execute this Contract on behalf of Contractor, Zero Net Energy Alliance
166
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
and shall be personally liable to City if they are not duly authorized to enter into and execute this Contract on behalf of Contractor.

25. 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 payment 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.

26. COUNTERPARTS:

This Contract may be executed in any number of counterparts (including by fax, PDF, DocuSign, or other electronic means), each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

27. 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.

Zero Net Energy Alliance
167
Contract No: ________ 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, otherwise please state “NONE”):

Zero Net Energy Alliance
NONE
168
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

EXHIBIT F

INSURANCE PROVISIONS
☐ CHECK HERE IF RISK MANAGEMENT HAS APPROVED WAIVING INSURANCE REQUIREMENTS FOR THIS CONTRACT.

1. CERTIFICATES: Before the commencement of the terms of this Contract, and during the entire term of this Contract and any extension or modification thereof, Contractor shall furnish the City’s Risk Manager with certificates showing the type, amount, class of operations covered, effective dates and dates of expiration of insurance coverage in compliance with coverage requirements set forth by the City and incorporated herein.

Such certificates, which do not limit Contractor’s indemnification, shall also contain substantially the following statement:
“Should any of the above insurance covered by this certificate be canceled or coverage reduced before the expiration date thereof, the insurer affording coverage shall provide thirty (30) days’ advance written notice to the City of Richmond.

Attention: Risk Manager.”
Contractor shall maintain in force at all times during the performance of this Contract all appropriate coverage of insurance required by this Contract with an insurance company licensed to offer insurance business in the State of California with a current A.M. Best’s rating of no less than A:VII or Standard & Poor’s Rating (if rated) of at least BBB unless otherwise acceptable to the City. Contractor shall deliver updated insurance certificates to the City at the address set forth in Exhibit C prior to the expiration of the existing insurance certificate for the duration of the term of Contract.

Endorsements naming the City, its City Council, boards, commissions, officials, employees, agents, and volunteers as additional insured shall be submitted with the insurance certificates.

2. COVERAGE REQUIREMENTS: The City’s insurance requirements depend upon the type of service being provided and/or the provider. The City’s insurance requirements will fall into one of the following categories (unless otherwise provided by the City):

Consultants and Contractors – Type 1
Professional Services – Type 2
Environmental Risk/Hazardous Waste Material – Type 3
Lease of City Property – Type 4
Vendors, Suppliers, Small Grant Recipients & Nonprofit Organizations – Type 5 Transportation Providers – Type 6
Professional Services Pyrotechnics – Type 7
Cyber and I.T. Risks – Type 8
Zero Net Energy Alliance
169
Contract No: ________ For the Contract between the City of Richmond and
_____________________________
The insurance requirements classification applicable to this Contract shall be attached to this Exhibit F and made a part hereof.

3. FAILURE TO SECURE: If Contractor at any time during the term hereof should fail to secure or maintain the foregoing insurance, the City shall be permitted to obtain such insurance in Contractor’s name or as an agent of Contractor and shall be compensated by Contractor for the costs of the insurance premiums at the maximum rate permitted by law and computed from the date written notice is received that the premiums have not been paid.

4. SUFFICIENCY OF INSURANCE: The insurance limits required by the City are not represented as being sufficient to protect Contractor. Contractor is advised to consult Contractor’s insurance broker to determine adequate coverage for Contractor. The coverage and limits shall be (1) the minimum coverage and limits specified in this Contract; or (2) the broader coverage and maximum limits of the coverage carried by or available to Contractor; whichever is greater.

INSERT INSURANCE REQUIREMENTS CLASSIFICATION APPLICABLE TO THIS CONTRACT: (IF NECESSARY, CONFIRM WITH RISK MANAGER)
Zero Net Energy Alliance
170
Contract No: ________ For the Contract between the City of Richmond and
_____________________________

EXHIBIT G

SANCTUARY CITY COMPLIANCE STATEMENT

The undersigned, (hereafter "Contractor"), has had an opportunity to review the requirements of City of Richmond Ordinance 12-18 (hereafter "Sanctuary City Contracting Ordinance" or “SCCO”).

Contractor 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”). Contractor 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. “Extreme 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 at any time during the term of the Contract it ceases to comply, Contractor will promptly notify the City Manager in writing. Any person or entity who knowingly or willingly supplies false information in violation of the SCCO shall be guilty of a misdemeanor and subject 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.

Printed Name: Title:

Signed: Date:

Business Entity:

Zero Net Energy Alliance
171

Page 1 of 5 ends

MCE Internal Use Only: Group 1 ☐ Group 2 ☐ Group 3 ☐
Marin Clean Energy (MCE) Virtual Power Plant Agreement (VPPA) Cover Page A. Participant Information
Participant Name Contact Name (if Participant is an entity) Title (if applicable) Phone e-mail
B. Project Developer (MCE Authorized Designee)
Company Name Contact Name Phone & e-mail
C. Project Installer (Subcontractor to Project Developer and is an MCE Authorized Designee, if applicable) Company Name
Contact Name Phone e-mail
D. Project Site Information
Site Address City State Zip
Last 4 digits for each of the PG&E Service Account ID (SAID) Number(s) for the building (s) where equipment will be installed. ___ ___ ___ ___ // ___ ___ ___ ___ // ___ ___ ___ ___ Eligible electric Rate Schedule per Virtual Power Plant Tariff (as of date of agreement): _____________ Attachments: ☐ Proof of change to a rate schedule eligible for the Virtual Power Plant Tariff (if applicable) E. MCE Battery Energy Storage System (BESS) Gap Funding $
Total Cost of BESS BESS Installer:
$
MCE BESS Rebate Amount Payee*:

F. Richmond Advanced Energy Community Grant Funding Allocation $
Total Grant Funding Allocated Payee*:

G. Monthly Bill Credit for Distributed Energy Resource (DER) Management and Control (Residential Participants, insert Total Monthly RMAP from Worksheet A; Non-Residential Participants, insert 1 st Year CMAP Amount in Worksheet B, Line c) $ /month
Last four digits of SAID Number*: ______________________ Payee*: ________________________________
*If Payee is someone other than the Participant, then Participant must assign the funding, bill credit, and/or true -up payment to the third-party Payee via executing the Virtual Power Plant Funding Assignment Agreement attached hereto as part of this Agreement. ☐ Virtual Power Plant Funding Assignment H. Term
Term Duration (years from Commercial Operation Date ): Estimated Commercial Online Date:

I. Installation Deadline
All work related to this Agreement must be installed and Fully Operational no later than _________. Failure to meet this deadline due to withdrawal or delay due to actions and/or inaction by Participant may result in adjustment or forfeiture of MCE Agreement Funding hereunder.

J. Participant Agreement and Signature
This Agreement is made and entered into by and between Marin Clean Energy (“MCE”) and Participant as of the date of execution of the agreement. By my signature below, Participant represents to MCE that (i) Participant has read, understands, and agrees to be bound by the terms, condi tions and requirements of this contract between MCE and Participant (including this Cover Page, the Virtual Power Plant Agreement Terms, and all attachments hereto) (“Agreement”) and the Conditions and Requirements of the Virtual Power Plant Tariff , (ii) if Participant is an entity rather than an individual, its authorized representative listed below (“Authorized Representative”) has the authority to sign this Agreement on behalf of th e Participant, and (iii) all accompanying Project documentation is complete, true, and accurate to the best of my knowledge.

Consent to Electronic Disclosure and Contracting. By signing below, Participant consents and agrees to receive electronically all communications, agreements, documents, notices, records, legal disc losures, and other information (collectively, “Electronic Records”) that MCE provides in connection with this Agreement. Participant further agrees and consents to the use of electronic signatures (such as clicking, checking , signing using a digital pen, or otherwise manifesting assent) in the process ing of Electronic Records. Participant has the right to withdraw this consent at any time by calling 1 (888) 632-3674 or emailing [email protected]. Participant must notify MCE of any change in Participant’s e -mail addr ess by using the contact information above.

Richard Schorske ZNE Alliance [email protected]
(415) 310- 2407
City of Richmond
Samantha Carr
Environmental Manager
[email protected]
Serious Controls
Neil Moffatt
450 Civic Center Plaza
Richmond
CA
94804
172

Page 2 ends

Consent to Sharing Agreement with MCE Authorized Financer (Only Applicable for Residential Customer Participants). By signing below, Participant hereby consents and agrees to the provision of this Agreement and/or data contained in this Agreement to the National Energy Improvement Fund (“NEIF”) for evaluation of your eligibility for financing of the Project. Any such financing arrangements shall be negotiated and subject to a further agreement between Participant and NEIF. If you are approved, financing will be provided by NEIF. Authorized Representative of Participant (if Participant is an entity; please print) Title Date Signature of Participant or Authorized Representative of Participant (if Participant is an entity) Virtual Power Plant Agreement Terms, Conditions and Requirements 1. Overview. MCE’s Virtual Power Plant Pilot (VPP Pilot) provides certain payments and funding options to MCE customers installing behind-the-meter Distributed Energy Resources in exchange for MCE to have the ability to monitor and dispatch the Distributed Energy Resource to reduce local peak demand, reduce overall cost of service to eligible customers, reduce greenhouse gas emissions, and provide resiliency benefits for eligible customers during grid outages. 2. Definitions. a. “Agreement” refers to this Virtual Power Plant Agreement, including the Cover Page, the Virtual Power Plant Agreement Terms, Conditions and Requirements and all attachments hereto b. “CPUC” refers to the California Public Utilities Commission c. “DERMS” refers to MCE’s distributed energy resources management system d. “DER” refers to one or more behind-the-meter Distributed Energy Resources installed within the Project e. "Fully Operational” refers to all the following occurring: (1) the DER has been completely installed at the Site; and (2) the Participant has received utility’s permission to operate the DER; and (3) MCE has verified that the participating DERs are successfully connected to MCE’s VPP. f. “MCE” refers to Marin Clean Energy or its contractors, subcontractors or agents g. “MCE Agreement Funding” has the meaning set forth in Section 12.b h. “MCE Authorized Designee” refers to a vendor that has been approved by MCE or its VPP Pilot Implementer to work in the VPP Pilot and is identified on the Cover Page i. “M&V” refers to measurement and verification j. “Participant” has the meaning set forth on the Cover Page k. “Party” (individually) or “Parties” (collectively) refers to MCE and Participant l. “Personally Identifiable Information” refers to any information that relates to an identified or identifiable individual, including, but not limited to, an individual’s name, address, telephone number, email address, or as otherwise recognized as “personal information,” “personal data,” or “personally identifiable information” in accordance with applicable laws and regulations m. “Project” refers to the design, engineering and installation of the DER pursuant to the terms of this Agreement as described in Section E. of the Cover Page n. “Project Developer” refers to an MCE-authorized installer of the DER and can be an MCE Authorized Designee o. “Qualifying DER” refers to a DER supplied by an MCE Authorized Designee that is capable of being controlled by MCE’s DERMS p. “Site” refers to the site (or sites) where the DER will be located q. “Tariff” or “VPPT” refers to the MCE Virtual Power Plant Tariff (VPPT) applicable to Participants of the Virtual Power Plant Pilot 3. Agreement Eligibility. Participants must, for the Term of the Agreement: (i) be and remain an active MCE customer and (ii) meet and maintain all Agreement requirements herein and those listed in the Virtual Power Plant Tariff. 4. Authorization. Participant must be authorized to approve the installation of a DER, including any necessary modifications to the electrical system, either: (i) as the legal Site owner; (ii) as the duly authorized representative of the Site owner; or (iii) with prior, written authorization and approval from the legal owner of the Site. 5. Ownership. Participant must be the owner and title holder to the DER during the Term of the Agreement, unless agreed to otherwise in writing by MCE. If the site has a solar panel system owned by a person or entity other than the Participant, MCE must be notified immediately. MCE does not anticipate that its control of the DER will interfere with the operation of the solar panel system or impact the terms of any agreement with the third-party owner of the solar panel system (i.e., a lease, prepaid lease, or power purchase agreement), however MCE does not guarantee that this Agreement does not conflict with any agreement with a third-party owner of the solar panel system and takes no responsibility or liability for any such conflict. Participant is solely responsible for confirming the terms of any agreement with the third-party owner of the solar panel system does not conflict with this Agreement and obtaining any required consent to this Agreement of the third-party owner of the solar panel system. 6. DER Requirements. Participant agrees to: (i) install a Fully Operational Qualifying DER with equipment and/or software using an MCE Authorized Designee (ii) provide the DER with continuous access to a functioning broadband internet connection with a speed of at least 1 Mbps with one (1) wired Ethernet port (preferred), a wireless Internet connection and standard electrical outlet, or its own mobile data connection. 7. DER Operations. Participant agrees to operate and maintain the DER and all associated equipment in accordance with the rules, stipulations and restrictions of all manufacturer requirements and warranties as well as all State and local codes and regulations. 173

Page 3 ends

Last updated 12/15/2022
Participant is responsible for operation and maintenance of the DER and therefore must provide for or arrange for the provision of operations and maintenance services on the DER . Except for any required shutdowns for safety or maintenance, Participant further agrees to ensure that the solar panel system is operated and maintained such that it is generating at its expected capacity (as per manufacturer’s projections) during the Term.

8. No Modification of DER. Participant may not modify, disconnect, or uninstall the DER equipment and/or software during the Term, unless required for maintenance, repair, or safety reasons and Participant has provided advance notice to MCE (if possible, due to safety considerations), after which the DER must be restored to original condition, connection, and specifications. Participant must notify MCE immediately if there have been any modifications to the DER equipment and/or software by any person or entity, or if there has been any damage to or removal of the DER. Notwithstanding the fore going, manufacturer-recommended software upgrades are permitted without needing to notify MCE, so long as such upgrades do not impact MCE’s ability to monitor and control the DER.

9. Site Acc ess and Inspections. Participant agrees to allow MCE, and/or MCE Authorized Designee, acc ess to the Site during reasonable hours and upon reasonable notice during the Term to: (i) specify, install, operate, maintain, repair and remove equipment used to measure Project-related kW Usage; (ii) perform Agreement related audits; and (iii) perform Agreement-related inspections.

MCE Authorized Designee may conduct a Site inspection during installation or after installation is complete. If the MCE Authorized Designee determines that the DER was not installed in a manner consistent with the approved Project or within the provisions of this Agreement, or Participant has taken measures that counter the Agreement’s goals such as going off-grid or removing the DER from Site, MCE may, at its sole discretion, require immediate repayment of the MCE Agreement Funding and/or eliminate future MCE Agreement Funding. MCE Authorized Designees may perform up to two (2) inspections per year during the Term.

10. Measurement and Verification Equipment. MCE Authorized Designee will develop an M&V plan for the purpose of measuring DER performance and subsequent energy savings from deployed use cases subject to the limitations of the Tariff, on an ongoing basis for the Term of this Agreement. Participant agrees: (i) to allow MCE and/or MCE Authorized Designee to install M&V equipment; and (ii) to allow for such equipment to remain in place and functional for the entire Term of this Agreement; and (iii) not to remove, modify, or tamper with installed M&V equipment. MCE may modify the M&V conditions in the Tariff from time to time in its sole discretion.

11. Project Installation. The Project must be developed and installed by an MCE Authorized Designees. Participant is responsible for negotiating an installation contract with the Project Developer or MCE Authorized Designee, monitoring the work, and managing and resolving any disputes that may arise between Participant and Project Developer or MCE Authorized Designee with respect to the contract or the work performed under the contract. Participant shall require its Project Developer or MCE Authorized Designee to install the DER in accordance with all applicable federal, California State and local law. MCE does not guarantee or warranty, and is not responsible for, any acts or omissions of any Project Developer or MCE Authorized Designee.

12. Available Funding.
a. SGIP Incentives. Eligible Participants or Project Developer may apply for incentives from PG&E’s Self -Generation Incentive Program (SGIP). SGIP is a CA State-funded Program that provides financial incentives for installing on-site electrical generation and storage systems. Eligibility and receipt of SGIP incentives is solely determined by the SGIP program administrator. b. MCE Agreement Funding. Participant understands and agrees that their eligibility to receive any MCE Agreement Funding, if applicable, or the eligibility of MCE Authorized Designee or its Subcontractor to receive any MCE Agreement Funding, if applicable, requires compliance with the terms and conditions of this Agreement for the full Term. MCE Agreement Funding includes all amounts provided to Participant from this Section 12 b. pursuant to this Agreement. Pursuant to Section 14, MCE may require repayment of DER Gap funding, PV Gap funding, and/or Richmond Advanced Energy Community Grant Funding on a pro-rated basis:
i. DER Gap Funding as set forth on the Cover Page to cover some of the DER costs not covered by SGIP and other incentives, depending on SGIP eligib ility rules and final award of funds and determined on a case -by-case basis. Gap Funding is provided in return for integration with the MCE DERMS.
ii. Solar Photovoltaic (PV) Gap Funding Participants may be eligible for additional MCE Agreement Funding as indicated on the Cover Page for installing a Solar PV with GRID Alternatives, or other MCE Authorized Designee. iii. Richmond Advanced Energy Community Grant Funding as set forth on the Cover Page to cover a portion of the DER costs not covered by SGIP, MCE Gap Funding and other applicable incentives, depending on SGIP eligibility rules and final award of funds, and determined on a case-by-case basis.
iv. DER Management & Control Payments: Participants are eligible to receive a monthly bill credit as defined in the Tariff and pursuant to the applicable Worksheet A or B, attached. Non-Residential Participants are eligible for an additional Program Year True-Up Payment as defined in the Tariff and Worksheet B paid annually once Fully Operational. MCE reserves the right to change the Tariff at any time for any reason.
c. Cap on Total Funding. The combined total of MCE Agreement Funding and any other incentives (including, but not limited to SGIP incentives and Investment Tax Credit, if applicable) received for the Project shall not exceed the Total Eligible Projec t Costs, as defined in the current SGIP Handbook. If Participant is not receiving SGIP Incentives, the total of MCE Agreement Funding and any other incentives cannot exceed 100% of the DER costs. 174

Page 4 ends

13. Term. Standard terms are 5 years for residential sites and 7 years for non-residential sites. Term end date will be 5 or 7 years, as indicated based on the Cover Page, from the latter of (1) Participant receives utility’s permission to operate the DER, if applicable and (2) DERMS software platform is installed and enabling MCE to monitor and control the DER. For clarity, the Term Start Date is the date Participant signs this Agreement. 14. Early Termination. If MCE terminates this Agreement pursuant to the terms set forth in Section 15, or if Participant terminates this Agreement prior to the end of the Term, MCE may, at its sole discretion, require immediate repayment of the MCE Agreement Funding. Upon termination, all monthly bill credits and any applicable Program True-Up Payment will terminate. 15. Breach of the Agreement. If Participant does any of the following, it shall constitute a material breach of this Agreement by Participant (“Breach”): (a) Participant opts out of MCE service; (b) Participant abandons the Site, or for any reason other than selling, leasing or renting the Site to another MCE customer, terminates service with MCE; (c) Participant modifies, removes, disconnects, decommissions, fails to properly maintain or operate the DER or has the DER interconnection agreement revoked for any reason; (d) the DER is destroyed or damaged other than as a result of the negligence of MCE; or (e) the DER is not installed by the Installation Deadline set forth on the Cover Page. In the event of a Breach that has not been resolved by Participant within ten (10) days of such Breach, MCE shall have the right to terminate this Agreement and MCE may, at its sole discretion, require immediate repayment of the MCE Agreement Funding and/or eliminate future MCE Agreement Funding. 16. Command and Control of the DER. As a condition of participating in the Agreement and receiving any Agreement Funding, Participants must allow MCE to monitor and control the DER for the Term of this Agreement. a. MCE Control. Participant agrees MCE will be the sole entity controlling and dispatching the DER for the Term and agrees not to allow any other person or entity to control DERs interconnected at this Site. b. Dispatching DER. MCE will dispatch the DER at its discretion subject to the limitations defined in the Tariff and as applicable, the requirements of the California Independent System Operator (“CAISO”) Open Access Transmission Tariff (“OATT”). c. Access to DER Data. Participants agree to provide access to the DER telemetry and usage data for the Term of this Agreement. Such data includes, but is not be limited to information regarding how frequently the DER operates, charges and discharges, the timing and amount of such operation, and may include data relating to the solar panel system production or Site’s energy usage (hereinafter, collectively referred to as the “Data”). Participants consent to MCE’s collection, processing, use, and retention for its own purposes of any Data in de-identified and aggregated form, including Data collected under this Agreement, or derived from participation in this Agreement. Participants acknowledge, agree and, to the extent necessary or appropriate as determined in MCE’s sole discretion, provide consent to MCE for MCE to obtain such Data in de-identified and aggregated form. Without limiting the generality of the foregoing, MCE will not disclose Data without the consent of Participant, except in the following circumstances: (1) to MCE’s agents, independent contractors and subcontractors as necessary in connection with MCE’s performance under the Agreement; (2) where the Data does not contain Personally Identifiable Information (including where Data has been de-identified or aggregated); (3) if MCE is required to do so by any law or regulation or in the good-faith belief that such action is necessary to comply with any law, regulation, order or other legal process; (4) if MCE believes, in good faith, disclosure is appropriate or necessary to (A) take precautions against liability, (B) protect MCE or others from fraudulent, abusive, or unlawful uses or activity, (C) investigate or defend against any third-party claims or allegations or (D) protect the security or integrity of MCE’s services and any facilities or equipment used to make MCE’s service available. d. CAISO Participation. MCE, at its sole discretion and without requiring any additional approvals from or notice to Participant, may enroll or disenroll the DER in any program, product, or market (including any distributed energy resource aggregation) under the CAISO OATT. MCE shall be entitled to all revenue received from the DER’s participation in such program, product, or market. 17. Indemnification. MCE shall have no liability for any claims arising from work performed by Project Developer or MCE Authorized Designee, including, but not limited to, damage to the Site, the DER or any persons or property at or about the Site, or the performance of the DER. MCE shall have no liability for any claims or damages caused by the DER, including, but not limited to, any defects therein. Participant hereby releases MCE from any claims or liabilities relating to the installation of the Project. To the fullest extent permitted by applicable law, Participant shall indemnify, defend, and hold MCE and its employees, officers, directors, authorized designees, and agents, harmless from and against any and all actions, claims, liabilities, losses, costs, damages, and expenses (including, but not limited to, litigation costs, attorney’s fees and costs, physical damage to or loss of tangible property, and injury or death of any person) arising out of, resulting from, or in connection with the Agreement by any actual or alleged act or omission of Participant, Project Developer, MCE Authorized Designee, or any subcontractor, agent, or third party, or anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable. 18. LIMIT OF LIABILITY. MCE AND PARTICIPANT WAIVE ANY AND ALL CLAIMS AGAINST EACH OTHER FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, MULTIPLE, AND PUNITIVE DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, REGARDLESS OF WHETHER SUCH DAMAGES WERE FORESEEABLE AND WHETHER OR NOT THE CULPABLE PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. MCE’S TOTAL AGGREGATE LIABILITY TO PARTICIPANT UNDER THIS AGREEMENT ON ALL CLAIMS OF ANY KIND ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, NEGLIGENCE, ERRORS, OMISSIONS, STRICT LIABILITY, INDEMNITY, OR BREACH OF CONTRACT, IS LIMITED TO THE MCE AGREEMENT FUNDING PAID TO PARTICIPANT UNDER THIS AGREEMENT. 175

Page 5 ends

19. No Warranty. MCE DOES NOT WARRANT OR GUARANTEE (1) THE AMOUNT OF ENERGY PRODUCED BY THE DER FOR ANY PERIOD, (2) ANY COST SAVINGS, OR (3) THE EXISTENCE OF OR PRICING ASSOCIATED WITH ANY NET METERING AGREEMENT, OR UTILITY OR GOVERNMENT INCENTIVE AGREEMENT. CUSTOMER LOAD, ELECTRICITY RATES AND RATE STRUCTURES ARE SUBJECT TO CHANGE. PROJECTED SAVINGS FROM THE DER ARE THEREFORE SUBJECT TO CHANGE. TAX INCENTIVES ARE SUBJECT TO CHANGE OR TERMINATION BY EXECUTIVE, LEGISLATIVE OR REGULATORY ACTION. 20. Removal of Equipment. Participant agrees to remove and dispose of any batteries and/or equipment being replaced by the DER in accordance with all laws, rules, codes and regulations. Participant agrees not to reinstall the DER anywhere in California or transfer it to any other party for installation in California for the Term of the Agreement. 21. Miscellaneous. a. Agreement/Terms and Conditions Changes. The VPP Pilot may be modified, suspended or terminated by MCE at any time, without prior notice. In the event of termination of this VPP Pilot, MCE or its Authorized Designees shall be granted immediate access to the Site in order to remove M&V Equipment. b. Taxes. Participant shall be responsible for the payment of any and all taxes associated with the Project or incurred as a result of the SGIP incentives, Monthly Bill Credits, Program Year True-Up Payment, or any MCE Agreement Funding. c. Insurance. Participant has and agrees to maintain during the entire Term customary property and liability insurance with respect to the Site, including sufficient coverage for any damage to the Solar Panel System and/or the DER. d. Use of Non-Usage Data. Participant agrees to allow MCE and its authorized contractors and agents to use Participant’s name, Site location, size of DER installed, and any other information gathered as part of participating in the Agreement (“Non-Usage Data”) for use in regulatory and grant reporting, ordinary business use, industry forums, case studies or other activities deemed necessary to MCE. e. Acknowledgment. Participant agrees to have MCE designed stickers containing MCE's logo and/or the generation service (i.e., Light Green, Deep Green, Local Sol) placed on the installed DER. The applicable stickers will be provided by MCE and Participant authorizes MCE and/or its MCE Authorized Designee to place such stickers on the installed DER. f. Amendment. This Agreement may not be amended without the mutual, written agreement of both Parties. g. Assignment. This Agreement may not be assigned by either MCE or Participant without the prior written consent of the other party, not to be unreasonably withheld, conditioned, or delayed. Subject to ten (10) days prior written notice, Participant may assign this Agreement if the new Site owner or lessee enters into a written assignment and assumption agreement assuming all the obligations of Participant prior to the transfer of Site ownership or control. h. Jurisdiction and Venue. This Agreement shall be construed in accordance with the laws of the State of California and the Parties hereto agree that venue shall be in Marin County, California. i. Survival. The following sections will survive the termination of this Agreement: 11, 15, 17-20. j. Severability. In the event any provision in this Agreement is found to be legally invalid or unenforceable, that provision will be revised to the degree allowed by law to give it the maximum effect allowed by law, or, if revision is not possible, will be severed and the remaining provisions of this Agreement will remain in full force and effect. 176

Page 6 ends

Worksheet A Residential MCE VPP Customer This Worksheet is to be completed by a Project Developer or MCE Authorized Designee who is authorized to provide services relating to MCE’s Virtual Power Plant Pilot. Residential Monthly Advance Payment (RMAP) DER Classification Make and Model Quantity Monthly Bill Credit per unit kW Capacity Line-Item Bill Credit Smart Refrigerator $2 Smart Freezer $2 Smart Outlet* (*with 1 kW minimum peak load) $2 Smart Thermostat $5 HAN/Smart Gateway $5 Mini-split $5 Heat-Pump Water Heater $5 Level 2 EV Charger $10 Bi-directions Level 2 EV Charger $20 ESS under 20kWh $10 ESS larger than 20kWh $20 Total kW Capacity: TOTAL MONTHLY RMAP**: (**Maximum monthly RMAP is $50 for CARE and FERA customers. Maximum monthly RMAP is $40 for non-CARE and non-FERA customers) $ 177

Page 7 ends

Worksheet B Commercial MCE VPP Customer This Worksheet is only to be completed by a Project Developer or MCE Authorized Designee who is authorized to provide services relating to MCE’s Virtual Power Plant Pilot. First Year CMAP and Program Year True-up Payment Estimated Total Annual kWh of Load Shift: a. Estimated Total Annual Performance Payment - multiply Line a. by 0.11: b. First year’s CMAP* - multiply Line b. by 0.33 and divide by twelve: c. Program Year True-Up Payment - Calculation Below Program Year Verified Total Annual kWh of Load Shift**: d. First Year Annual Performance Payment - multiply Line d. by $0.11: e. Number of program participation months this program year (Jan.1st to Dec. 31st): f. Total annual CMAP - multiply Line c. by line f.: g. Program Year True-Up Payment - subtract line g. from Line e: h. After First Year CMAP and Program Year Annual Performance Payments Total Delivered Annual kWh of Load Shift in previous year (verified kWh from Line d.): i. Estimated Annual Performance Payment - multiply Line i. by 0.11: j. After First Year CMAP* - multiply Line j. by 0.5 and divide by twelve: k. Program Year True-Up Payment - Calculation Below Program Year verified total annual kWh of Load Shift**: l. After First Year Annual performance payment - multiply Line l. by $0.11: m. Number of program participation months this year (Jan.1st to Dec. 31st): n. Total annual CMAP - multiply Line k. by line n.: o. Program Year True-up Performance Payment - subtract Line o. from Line m.: p. ***All calculations are done pursuant to MCE’s M&V plan for the VPP Pilot, which may be updated from time to time by MCE. *Maximum monthly CMAP $300 for customers on a commercial rate schedule. Maximum monthly CMAP $750 for customers on an industrial rate schedule. **Total kWh of measured load shift delivered to the MCE VPP during each Program Year (January 1st to December 31st) will be verified by MCE and its program partners at the conclusion of each program year using the MCE approved Measurement and Verification methodology, which will be independently validated through third-party audit. The Program Year True-Up Payment will be delivered to participating customers no later than March 31st of each applicable program year. *Maximum monthly CMAP $300 for customers on a commercial rate schedule. Maximum monthly CMAP $750 for customers on an industrial rate schedule. **Total kWh of measured load shift delivered to the MCE VPP during each Program Year (January 1st to December 31st) will be verified by MCE and its program partners at the conclusion of each program year using the MCE approved Measurement and Verification methodology, which will be independently validated through third-party audit. The End of Program Year True-Up Payment will be delivered to participating customers no later than March 31st of each applicable program year. 178

Page 1 of 6 ends

March 17, 2026

Economic Development

DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM:

Nannette J. Beacham, Director of Economic
Development

Subject:

Arts and Culture Division Update
FINANCIAL IMPACT: There is no fiscal impact associated with this item.

PREVIOUS COUNCIL
ACTION:

December 16, 2025

STATEMENT OF THE
ISSUE:

On December 16, 2025, the City Council directed the City Manager to develop a transparent community process on
hiring an Arts and Culture Manager, to report back to the arts community and City Council on the results of the
hiring process; and directed the City Manager to meet
and work with the Richmond artist community, Richmond
Arts and Culture Commission, and City Council liaison to address the challenges presented and to develop a plan
on how to improve the whole grant process, including
contracts and requirements the City asks of artists
RECOMMENDED ACTION:

RECEIVE an Arts and Culture Division update on the
progress of hiring an Arts and Culture Manager and
ongoing status of the Mini Grants Program and other
public art – Economic Development (Nannette Beacham
510-621-1306).

AGENDA
REPORT
179

Page 2 of 6 ends

March 17, 2026
DISCUSSION:

Background
The City of Richmond recognizes the arts as an important contributor to community identity, cultural expression, and economic vitality. In response to community feedback and evolving program needs, the City is taking steps to strengthen its arts programs, processes, and partnerships. These efforts include the recruitment of a new Arts & Culture Manager to provide dedicated leadership and coordination of arts initiatives, as well as expanded engagement with artists, cultural organizations, and residents.

Through ongoing dialogue with the arts community and the Richmond Arts and Culture Commission, the City is committed to improving transparency, accessibility, and effectiveness in the delivery of arts programs and public art projects.

City Council Direction from December 16, 2025
On December 16, 2025, City Council received a presentation through Councilmember Jimenez from representatives from the Richmond Art Advocates and Visual Artists of Richmond stating the following: (1) reduced opportunities for public participation, (2) failure to follow the Arts Master Plan recommendations, and (3) excessive red tape and insurance requirements for the Neighborhood Public Art (NPA) mini-grant program (Attachment 1).

The Recommended Action from the agenda item was as follows:
 DIRECT the city manager to develop a transparent community process on hiring an Arts and Culture Manager and to report back to the arts community and City Council on the results of the hiring process; and
 DIRECT the city manager to meet and work with the Richmond artist community, Richmond Arts and Culture Commission, and city council liaison to address the challenges presented tonight and to develop a plan on how to improve the whole grant process, including contracts and requirements that the City asks of artists

After the presentation and discussion, the City Council also directed staff to return to the City Council with recommended actions by the mid-year budget discussion in 2026. This staff report provides an update on the Arts & Culture Manager recruitment and outlines a path forward to address the concerns raised by the Art stakeholders.

Update on the Arts & Culture Manager Recruitment
The City’s Human Resources Department hired a consultant, Bob Murray & Associates, to provide recruitment services to assist the City in hiring an Arts and Culture Manager.

The recruitment process is designed to identify qualified and diverse candidates through national outreach and the firm’s professional network, while incorporating input from City leadership, staff, and community stakeholders.

The City is working with an executive recruitment firm to ensure a comprehensive and inclusive hiring process for the Arts & Culture Manager position. As part of this effort, the recruiter has engaged with City Council members and representatives from Richmond’s arts community to gather input on the qualities, experience, and priorities 180

Page 3 of 6 ends

March 17, 2026
needed for the role, ensuring the position reflects both policy leadership and community perspectives. City staff is currently finalizing the recruitment brochure, which will outline the position, priorities, and desired qualifications. Once completed, it will inform the development of a detailed recruitment timeline and guide the remainder of the hiring process.

The major components of the recruitment process include the following:

Task Estimated
Timeframe
Key Activities
Interviews with
Elected Officials and
Key Stakeholders
December
2025 –
January 2026

March – early
April 2026
Individual meetings with the Mayor and
Councilmembers

Meeting with Recruiter and Arts Community
Development and
Release
Recruitment
Brochure
January –
early April
2026
City staff, in collaboration with the recruiter, are
finalizing the recruitment brochure with the plan to
release in late March 2026 (no later than early April
2026)
Candidate
Recruitment and
Outreach
4-6 weeks The position will be open for interested candidates to submit applications
Applicant Screening
Process
2-3 weeks Review and evaluation of resumes and application materials using criteria established in the candidate
profile.

Interviews 3-4 weeks The process will include interviews in which one diverse panel will include representatives from the
arts community, staff from the City of Richmond
and/or other local jurisdictions, as well as key
stakeholders knowledgeable about art and the
position. Following the panel interviews, the hiring
manager will conduct a final interview with one or
more eligible candidates prior to making a hiring
decision.

Reference and
Background Checks
1-2 weeks Comprehensive reference checks, background
screening, and verification of credentials for final
candidates.

Job Offer,
Negotiations, and
Candidate
Announcement
1-2 weeks City staff will announce the selection of the Arts & Culture Manager

Next Steps to Address Challenges Presented by the Arts Community To address the concerns identified in the presentation by members of the arts community City staff have initiated several actions and will continue implementing 181

Page 4 of 6 ends

March 17, 2026
additional measures to improve transparency, engagement, and program accessibility, and strengthen the City’s arts programs and processes (Attachment 1).

1. Strengthening Public Participation and Transparency in Arts Processes

To address concerns regarding reduced opportunities for public participation, the City has begun implementing and/or will implement the following:
 Improving transparency in public art selection processes and establishing clearer timelines for calls for artists and cultural planning efforts.  Continue check-ins with local arts organizations to maintain open communication and provide ongoing opportunities for feedback. Representatives from the arts community have met with City staff and the City Manager at least 5 times and future meetings will be scheduled to continue dialogue, address emerging concerns, and strengthen collaboration on arts initiatives, programs, and policy implementation.
 Arts organizations and community representatives have been encouraged to present at Richmond Arts and Culture Commission (RACC) meetings to share perspectives and provide updates on community initiatives. Presentations were made by Richmond Art Advocates and Visual Artists of Richmond at the February 12, 2026, RACC meeting, and by Richmond Open Studios and Vibe Bistro at the January 8, 2026, meeting.
 Improve project tracking and transparency for public art initiatives.  Support the recruitment of new Richmond Arts & Culture Commission members.

2. Improve Alignment with the Richmond Arts & Culture Master Plan

To strengthen alignment with the Richmond Arts & Culture Master Plan, staff will do or have done the following:
 Uploaded the Master Plan to the City’s website so community members and interested parties could review it.
 Review existing processes and update procedures to ensure greater consistency with the Plan’s goals and policies.
 Conduct an internal review of current practices and procedures to ensure greater consistency with the Plan’s adopted goals and policies. Based on the findings, staff will identify areas where existing processes diverge from the Plan and implement adjustments to better incorporate its recommendations into City decision-making.
 Update Arts & Culture Standard Operating Procedures in the second and third quarter of 2026 and continue aligning internal processes to support the timely and consistent delivery of public art projects.
 Continue investing in key cultural organizations that support the Master Plan’s goals of strengthening Richmond’s arts ecosystem. In the current fiscal year, annual contracts were increased by $50,000 each for the East Bay Performing Arts Center (EBCPA), NIAD Art Center (NIAD), and the Richmond Art Center (RAC). These investments are intended to expand community arts programming and support local artists and cultural institutions.
182

Page 5 of 6 ends

March 17, 2026
City staff will continue to monitor the implementation of Master Plan priorities and maintain regular engagement with arts stakeholders through RACC meetings, community outreach, and program updates.

2. Reduce Administrative Barriers in the NPA Mini-Grant Program

The City has taken several steps to expand access to the Neighborhood Public Art (NPA) Mini-Grant Program while maintaining appropriate oversight and risk management, including:
 Issued a Request for Proposals for the NPA Mini-Grant program in September 2025, increasing the total grant pool from $65,000 to $110,000; received 22 proposals, and facilitated review by the Richmond Arts and Culture Commission, which recommended awards to 13 applicants totaling $160,000.  Hosted two NPA mini-grant informational workshops with more than 70 participants.
 Reevaluated insurance and compliance requirements and are exploring options to simplify program access on a case-by-case basis. City of Richmond Risk Management staff have met individually with Mini-Grant recipients—and in some cases their insurance carriers—to assist applicants in navigating insurance requirements.
 Leveraged California SB 456’s licensing exemption to reduce regulatory requirements for mural and public art projects
 Increased NPA grant awards to allow grantees to use programmatic budgets to help offset insurance costs for public art projects
 Continue to allow the 50 percent advance for NPA mini-grants to help ease the financial burden some artists might experience with implementing the art grant.  Continued collaboration with the City’s Risk Manager to permit contract processing while insurance coverage is being secured, contingent upon the grantee providing a broker-issued insurance quote. This will allow City staff to process the contract so grantees can access the advance payment, which will help pay for the required insurance.
 Review insurance requirements and explore options for reducing or scaling thresholds for small community-based projects.
 Streamlined program approval processes where feasible while maintaining appropriate risk management and oversight.
 Developed clearer application guidance and support materials to assist artists and community groups in navigating program requirements.

Moving forward, staff will continue exploring strategies to reduce barriers for artists working on public art projects, increase programmatic budgets to help offset insurance costs, and conduct an annual Arts Vendor Technical Assistance Workshop to help artists better navigate City processes.

Additional Activities and Next Steps
In addition to the actions outlined above, Arts & Culture staff continue to support a range of ongoing programs and initiatives that strengthen Richmond’s arts ecosystem. 183

Page 6 of 6 ends

March 17, 2026
These include, but are not limited to:
 Expand marketing and communications efforts following the hiring of the Arts & Culture Manager.
 Continued administrative support to the Richmond Arts and Culture Commission.  Managing large public art initiatives such as the Main Library renovation project  Overseeing the selection of Richmond’s next Poet Laureate for a two-year term.  Continuous staff participation in the development of the Strategic Plan for the Richmond Arts Corridor with Independent Arts and Media Consultant and Richmond Renaissance by conducting targeted community outreach.  Expand marketing and communications efforts following the hiring of the Arts & Culture Manager.

City staff will also continue to expand community engagement efforts, support the delivery of public art projects across City programs, and strengthen partnerships with local artists and arts organizations to ensure Richmond’s cultural programs remain accessible, transparent, and reflective of the community.

The actions outlined in this report reflect the City’s commitment to continuous improvement and collaboration with Richmond’s arts community. By strengthening engagement, aligning programs with the Richmond Arts & Culture Master Plan, and reducing barriers to participation, the City aims to support a vibrant and inclusive arts ecosystem. Economic Development staff will continue working with the Richmond Arts and Culture Commission, local artists, and community organizations to refine processes, implement improvements, and ensure that Richmond’s arts programs remain responsive to community needs, as well as providing training and coordinating with the Finance Department on procurement and City Attorney’s Office to ensure there aren’t any conflicts of interest.

SYNERGISTIC POLICIES:

 Public Art Ordinance (Municipal Code Chapter 6.50) – Establishes the City’s Public Art Program and framework for acquiring, commissioning, and maintaining public art.
 Percent-for-Art Policy – Allocates 1.5% of eligible City Capital Improvement Project budgets to fund public art.
 Public Art Policies and Procedures (2021) – Provides implementation guidelines for public art projects, artist selection, and program administration.  Richmond Arts and Culture Commission Ordinance – Establishes the Commission to advise City Council on arts policy, programs, and cultural development.
 Private Development Public Art Requirements – Encourages or integrates public art within certain development and planning review processes.  Public Art Master Plan – Provides long-term strategic guidance for public art investment, cultural programming, and community engagement in Richmond 184
A Seat At The Table:

Improving Opportunities for
Richmond Artists
Richmond Art Advocates and Visual Artists of Richmond
Presentation to the Richmond City Council on Dec 16, 2025 185
Introductions
186
Who We Are
187
Richmond is losing its artists, art
commissioners, and the trust of its
residents as it neglects issues that can
be addressed by working together.

Why We’re
Here
188
The Problems
189

1. Fewer opportunities for public
participation

2. Failure to follow Master Plan
recommendations

3. NPA Mini-Grant program’s
excessive red tape
Areas of
Concern
190
The Public Art Advisory
Committee has been dismantled.

Richmond Arts and Culture
Commission members were
made powerless
First
Concern:

PAAC and
RACC
191
Failure to follow the Public Art
Master Plan’s Recommendations:

Adequate Staffing
Maintain existing public art
Create an artist registry
Second
Concern:

PAMP
192
Less than 10% of the almost 2 million
Percent for Art Fund has been used
193
Artist John
Wehrle
194
Artist
Registries in
Other Cities
195
The Neighborhood Public Art
mini-grant program’s
requirements, contracting and
payment protocols need an
overhaul
Third
Concern:

NPA
196
Grant requirements that go
beyond anything other cities
are requiring
197
Tiny Village
NPA Grant
Award: $9,000
Cost of pollution
insurance: $3,600
198
Contracts treating individual
artists, non-profits and big
business vendors the
same way
199
200
The expectation that artists spend
thousands of dollars before they are
reimbursed
No consequences for payment
delays
201
202
What We Envision For Success
203
Include members of RAA in the
Interim and permanent Arts &
Culture Manager selection panel.
Staff to report back with a plan on
how they will select a new manager
Include members of the RAA in the
NPA mini grant renewal efforts
Transparency
204
•Reform the most onerous
requirements to increase the
applicant pool
•Revise the current reimbursement
model, and issue payments
promptly to ensure artists can
complete public art projects
Address The
Challenges
205
•Pay small grants up front- most of
these grants go to cover expenses
anyway
•Let artists negotiate advances to
cover the expenses of larger grants
•Compensate the artists who lost
money covering such expenses
before signing a contract.

Equity
206
Time for Questions
Contact RAA at
[email protected]
Contact VAR at
[email protected]
207
March 17, 2026

Finance Department

DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM:

Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager
Antonio Banuelos, Accounting Manager

Subject:

Investment and Cash Balance Report, Monthly Overtime
Reports, Documentary Transfer Tax Report, and Other
Post-Employment Benefits (OPEB) and Pension Report
for the Month of January 2026
FINANCIAL IMPACT: There is no fiscal impact for receiving this item.

PREVIOUS COUNCIL
ACTION:

None.

STATEMENT OF THE
ISSUE:

City staff is requesting that the City Council receive the City’s Investment and Cash Balance Report, Monthly
Overtime Reports, Documentary Transfer Tax Report,
and Other Post-Employment Benefits (OPEB) and
Pension Report for the month of January 2026.

RECOMMENDED ACTION:

RECEIVE the City’s Investment and Cash Balance
Report, Monthly Overtime Reports, Documentary
Transfer Tax Report, and Other Post-Employment
Benefits (OPEB) and Pension Report for the month of
January 2026 – Finance Department (Emily Combs
510-620-6740).

AGENDA
REPORT
208
March 17, 2026
DISCUSSION:

Investment and Cash Balance Report
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 Investment and Cash Balance Report is a monthly report of the City’s pooled cash balance, which includes 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 (Attachment 1).

On June 24, 2025, the City officially awarded a contract to Meeder Public Funds, Inc. to provide investment management and advisory services. Meeder’s approach emphasizes diversification, asset allocation, and advanced risk mitigation techniques.

Meeder’s strategy focuses on the City’s cash flow needs to prioritize safety and liquidity.

These strategies are designed to safeguard the City’s principal investments, especially during periods of market volatility. Meeder’s approach ensures that our portfolio remains resilient and well-positioned to meet cash flow demands.

The Federal Reserve (i.e., Fed) seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. In support of its goals, on Wednesday January 28, 2026, the Committee decided to maintain the target range for the federal funds rate at 3.50 to 3.75 percent. In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The next Federal Open Market Committee (FOMC) meeting is scheduled for Wednesday, March 18, 2026.

Overtime Reports

The overtime reports for the month of January 2026 provides a comparative summary of budgeted overtime to actual overtime usage by department for miscellaneous and sworn staff. Year-over-year and month-over-month totals are included for sworn staff (Attachment 2 and 3).

Documentary Transfer Tax

On June 24, 2024, City Council requested monthly updates of the Transfer Tax received by the City of Richmond from Contra Costa County for the sale of properties in Richmond. As this is the most volatile revenue stream for the City, the amounts 209
March 17, 2026
received month-to-month can vary from as low as $300,000 to upwards of $7 million – a few large sales can widely swing the revenues.

In February 2026, the City received the documentary transfer tax data report from the County which identified that the tax revenue for January 2026 would total $249,048 (Attachment 4).

Other Post-Employment Benefits (OPEB) & Pension Report

On April 22, 2025, the City Manager requested monthly updates to the City Council on the returns of the OPEB and Pension accounts. The City manages two OPEB plans; the Richmond Police Officers’ Association (RPOA) Plan administered by CalPERS in a California Employers’ Retiree Benefit Trust (CERBT), and the City Plan administered by Public Agency Retirement Services (PARS). In May 2024, PARS was also tasked with administering the Pension account. The City receives monthly account statements for the PARS accounts, while the CalPERS account statement is received quarterly. As the statements are received after period close, the amounts are reported on a delayed timeframe.

In December 2025, the PARS OPEB account reported a gain of $173,905.58 for a rate of 0.29 percent. The 3-month return rate is 2.11 percent, and the annualized return rate for FY 2025-26 is 7.12 percent based on 6 months of activity. The PARS Pension account reported a gain of $20,857.32, for a rate of 0.36 percent. The 3-month return rate is 2.30 percent, and the annualized return rate for FY 2025-26 is 7.80 percent based on 6 months of activity.

In December 2025, the CalPERS CERBT account reported quarterly earnings of $203,237.57, for a 3-month return rate of 1.43 percent, and the annualized return rate for FY 2025-26 is 6.32 percent based on 2 quarters of activity (Attachment 5).

DOCUMENTS ATTACHED:

Attachment 1 – Investment and Cash Balance Report for January 2026 Attachment 2 – Overtime Report for January 2026
Attachment 3 – Overtime Public Safety Report for January 2026 Attachment 4 – Documentary Transfer Tax Report for January 2026 Attachment 5 – Other Post-Employment Benefits (OPEB) and Pension Report for January 2026
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
Overtime Report for January 2026 (Attachment 2)
PERIOD 7, JANUARY 2026
58% Threshold

ORIGINAL

BUDGET TRANSFERS REVISED
BUDGET
YTD

EXPENDED

AVAILABLE

BUDGET PCT
GENERAL FUND (summary)
400031 OVERTIME/General 2,346,051 76,625 2,422,676 1,466,687 955,989 61% 400032 OVERTIME/Sworn 11,465,610 - 11,465,610 7,100,672 4,364,938 62% TOTAL GENERAL FUND 13,811,661 76,625 13,888,286 8,567,359 5,320,927 62% Overtime By Department

CITY MANAGER
Administration - - - 357 (357) 100%

CITY CLERK
Administration 25,000 - 25,000 11,582 13,418 46%

COMMUNITY DEVELOPMENT
General Plan Code Enforcement 40,000 - 40,000 4,011 35,989 10%

FINANCE
Administration - - - 1 (1) 100% Payroll 28,000 - 28,000 15,495 12,505 55% Accounts Payable - - - 169 (169) 100% Revenue Collection 5,000 - 5,000 204 4,796 4% TOTAL FINANCE 33,000 - 33,000 15,869 1 7,131 48%

HUMAN RESOURCES
Administration - - - 523 (523) 100% POLICE
Administration 583,083 - 583,083 380,227 202,8 56 65% CAD Dispatch System 1,024,059 - 1,024,059 662,293 36 1,766 65% RM System 4,000 - 4,000 11,293 (7 ,293) 282% Parking Enforcement 15,000 - 15,000 17,952 (2,952) 120% Sworn Administration 6,983,641 - 6,983,641 4,611,769 2,371 ,872 66% TOTAL POLICE 8,609,783 - 8,609,783 5,683,533 2,926,250 66% FIRE
Administration 5,000 - 5,000 1,844 3,156 37% Sworn Suppression 4,452,872 - 4,452,872 2,444,780 2,008,09 2 55% Sworn Prevention 29,097 - 29,097 15,285 13,812 53% Sworn Training - - - 28,838 (28,838) 100% TOTAL FIRE 4,486,969 - 4,486,969 2,490,747 1,996,222 56%

Page 1 of 3 ends

227
Overtime Report for January 2026 (Attachment 2)
58% Threshold

ORIGINAL

BUDGET TRANSFERS REVISED
BUDGET
YTD

EXPENDED

AVAILABLE

BUDGET PCT

OFFICE OF NEIGHBORHOOD SAFETY
Administration 40,000 (462) 39,538 1,696 37,842 4% Re-Imagining - 462 462 462 - 100% TOTAL ONS 40,000 - 40,000 2,158 37,842 5%

PUBLIC WORKS & ENGINEERING SVCS
Administration - 16,000 16,000 6,389 9,611 40% Engineering Services 2,800 - 2,800 1,134 1,666 41% Stationary Engineers 15,000 - 15,000 9,796 5,204 65% Building Services 5,000 - 5,000 1,618 3,382 32% Utility Sections 100,000 - 100,000 33,813 66,187 34% Electric 25,000 10,000 35,000 36,488 (1,488) 104% Parks & Landscape Admin 200,000 (8,375) 191,625 121,382 70,243 63% Street Sweeping 1,100 - 1,100 - 1,100 0% Pavement Maintenance 56,447 30,000 86,447 47,322 39,125 55% Traffic Signs & Lines 15,000 20,000 35,000 14,786 20,214 42% Equipment Services 20,000 - 20,000 3,554 16,446 18% Abatement Services 50,000 5,000 55,000 41,249 13,752 75% TOTAL PUBLIC WORKS 490,347 72,625 562,972 317,532 245,44 0 56%

LIBRARY
Library Administration 25,000 - 25,000 2,820 22,180 11%

COMMUNITY SERVICES
Recreation Services/Cities of Service - - - 1,448 (1,448) 100% Recreation Administration 400 - 400 10,089 (9,689) 2522% Booker T Center 100 - 100 404 (304) 404% Nevin Center 200 - 200 5 195 2% Shields Reid 200 - 200 455 (255) 228% Recreation Complex 2,000 - 2,000 949 1,051 47% Parchester Center 700 - 700 145 555 21% May Valley Center 700 - 700 752 (52) 107% Recreation DPRC 750 - 750 743 7 99% Senior Center 200 - 200 1 199 0% Senior Center Annex 300 - 300 - 300 0% Aquatics 5,000 - 5,000 3,714 1 ,286 74% Convention Center 4,512 - 4,512 13,945 (9,433) 309% Plunge 3,500 - 3,500 1,829 1,6 71 52% TOTAL COMMUNITY SERVICES 18,562 - 18,562 34,478 (15,916) 186%

Page 2 of 3 ends

228
Overtime Report for January 2026 (Attachment 2)
58% Threshold

ORIGINAL

BUDGET TRANSFERS REVISED
BUDGET
YTD

EXPENDED

AVAILABLE

BUDGET PCT

ECONOMIC DEVELOPMENT PROGRAM
Administration 1,000 - 1,000 3 997 0% Public Art 2,000 4,000 6,000 3,704 2,2 96 62% TOTAL ECONOMIC DEVELOPMENT 3,000 4,000 7,000 3,706 3,294 53%

COMMUNITY CRISIS RESPONSE PROGRAM
Administration 40,000 - 40,000 43 39,957 0% TOTAL GENERAL FUND 13,811,661 76,625 13,888,286 8,567,359 5,320,927 62 %

NON-GENERAL FUND
Overtime By Fund
1012 HILLTOP LANDSCAPE MAINT DIST 20,000 - 20,000 7,663 12,337 38% 1015 MARINA BAY LNDSCP & LIGHT DIST 26,312 - 26,312 13,323 12,989 51% 1018 RENT PROGRAM 3,750 - 3,750 523 3,227 14% 1050 CR-PLANNING & BUILDING 9,500 - 9,500 275 9,225 3% 1050 CR-PLANNING & BUILDING 15,000 - 15,000 26 14,974 0% 1055 ENCROACHMENT SVCS 50,000 (5,500) 44,500 3,314 41,186 7% -
1205 EMPLOYMENT & TRAINING - - - 836 (836) 100% 1303 KIDS FIRST INITIATIVE 5,000 - 5,000 213 4,787 4% 4001 PORT OF RICHMOND 1,000 - 1,000 - 1,000 0% 4003 WASTEWATER ADMINISTRATION 30,000 - 30,000 9,282 20,718 31% 4003 WASTEWATER PRE-TREATMENT 25,000 50,000 75,000 36,722 38,278 49% 4006 STORMWATER 2,500 4,000 6,500 4,080 2,420 63% 4404 RHA-NEVIN PLAZA - - - 191 (191) 100% 4405 RHA-NYSTROM VILLAGE 12,000 - 12,000 1,763 10,237 15% 5001 INSURANCE RESERVES - - - 239 (239) 100% TOTAL NON-GENERAL FUNDS 200,062 48,500 248,562 78,451 170,111 32%

Page 3 of 3 ends

229
Overtime Public Safety Report for January 2026 (Attachment 3) City of Richmond
Public Safety Sworn Overtime
Fund: 0001 - General Fund
P e r i o d 123456789 1 0 1 1 1 2 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
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 5,910,592 172.2% (2,477,573) 492,549.37 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 2,497,290 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 3,651,935 103.4% (118,892) 304,327.96 FY2021-22 Overtime - Sworn 5,165,434 5,165,434 379,016 408,253 487,481 423,830 333,006 307,152 255,420 330,788 314,524 336,044 304,989 366,419 4,246,922 82.2% 918,512 353,910.14 POLICEFY2022-23 Overtime - Sworn 5,165,435 4,800,000 373,491 355,649 399,628 355,866 377,889 401,964 396,783 474,403 463,499 416,775 496,542 449,394 4,961,883 103.4% (161,883) 413,490.26 FY2023-24 Overtime - Sworn 4,800,000 6,708,965 487,105 925,716 477,693 462,417 470,347 531,204 424,452 626,680 478,293 593,735 568,535 588,097 6,634,274 98.9% 74,691 552,856.16 FY2024-25 Overtime - Sworn 6,708,965 6,708,965 560,788 543,814 584,028 590,943 580,286 631,961 492,367 662,199 566,326 603,150 720,953 680,661 7,217,477 107.6% (508,512) 601,456.40 FY2025-26 Overtime - Sworn 6,983,641 6,983,641 614,222 750,224 711,221 716,296 638,352 590,269 591,184 4,611,768 66.0% 2,371,873 658,824.06 FY2018-19 Overtime - Sworn 2,509,914 2,509,914 257,785 245,946 179,272 171,370 219,937 204,997 261,780 216,596 196,343 310,702 220,368 275,166 2,760,261 110.0% (250,347) 230,021.77 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 1,993,165 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) 319,628.09 FY2021-22 Overtime - Sworn 3,629,097 4,334,499 334,236 434,974 358,578 358,251 352,789 327,832 448,493 410,429 297,215 355,475 725,409 438,807 4,842,489 111.7% (507,990) 403,540.77 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 5,135,869 524,969 473,094 348,296 346,854 363,759 315,266 363,100 382,930 381,442 417,762 431,523 357,820 4,706,814 91.6% 429,055 392,234.47 FY2024-25 Overtime - Sworn 4,481,969 4,481,969 367,801 375,737 425,984 419,101 462,309 358,764 366,579 356,872 395,710 496,072 499,221 510,985 5,035,136 112.3% (553,167) 419,594.68 FY2025-26 Overtime - Sworn 4,481,969 4,481,969 597,372 381,730 262,916 283,051 322,373 344,304 297,158 2,488,903 55.5% 1,993,066 355,557.61 FY2025-26 TOTAL 11,465,610 11,465,610 1,211,594 1,131,954 974,136 999,347 960,725 934,573 888,342 - - - - - 7,100,672 61.9% 4,364,938 1,014,381.67

BUDGET ACTUALS TOTAL

Page 1 of 1 ends

230
D
ocumentary Transfer Tax
The C
ity of Richmond receives Documentary Transfer Tax from the County for the sale of properties in Richmond. As one of the most volatile revenue stream s for the City, the a mounts received can vary month- to-month from the low $250 thousand to the highs of $7 million. A few large sales can widely swing the revenues.

In FY2023-24, the City budgeted $13.3 million for the Transfer Tax category and received $8.6 million, equating to a difference of $4.7 million.

In FY2024-25, the City budgeted $7.4 million. The difference between the budgeted amounts in these two years is that in the FY2024-25 budget, staff did not include property sales of over $10 million in the formula. These few unpredictable transactions skew the monthly sales figures.

For FY2025-26, the City budgeted $13.6 million following the Guiding Fiscal Policy formula.

As a reminder, Measure H, approved by Richmond voters in November 2018, went into effect at the end of December 2018. Measure H increased the real estate transfer tax from 0.7 percent to 1.25 percent for properties with a sale price of over $1 million but below $3 million, 2.5 percent for properties with a sale price between $3 - $10 million, and 3.0 percent for properties with a sale price over $10 million.

The table below shows each monthly payment going back to FY2018-19 and highlights the volatility of this revenue stream. Of note are the very high payments received in certain months which are shown as significant peaks.

Documentary Transfer Tax for January 2026 (Attachment 4) 231
Fiscal Year July Augu st September October November December January February March April May June Totals FY2018-19 498,037 508,343 348, 117 440,189 462,542 437,400 225,541 487,419 809,257 733,536 1,524,100 1,542,404 8,016,886 FY2019-20 475,202 514,221 489,633 581,608 406,167 676,059 2,578,200 344,488 460,000 1,345,764 444,160 406,756 8,722,257 FY2020-21 1,464,754 529,696 5,088,852 508,011 2,522,185 883,461 569,095 357,803 621,601 4,312,603 2,130,037 878,737 19,866,835 FY2021-22 784,937 642,394 3,405,874 1,620,476 689,214 701,028 419,082 944,682 3,047,276 926,132 1,675,993 3,755,021 18,612,107 FY2022-23 1,086,045 520,354 517,718 580,839 1,250,243 785,993 682,509 244,636 2,034,519 970,348 1,253,543 490,102 10,416,847 FY2023-24 465,705 425,650 368,966 507,066 1,357,082 407,488 356,203 336,787 439,035 582,710 627,785 2,726,059 8,600,534 FY2024-25 3,353,340 420,135 424,251 4,394,236 1,791,677 448,977 273,946 412,343 486,190 339,108 611,460 538,589 13,494,250 FY2025-26 7,258,631 380,656 398,557 479,573 371,688 537,250 249,048 9,675,403 $0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
July August September October November December Jan uary February March April May June City of Richmond - Documentary Transfer Tax
FY2018-19 FY2019-20 FY2020-21 FY2021-22 FY2022-23 FY2023-24 FY2024-25 FY2025-26 Documentary Transfer Tax for January 2026 (Attachment 4) 232
KRISTIN B. CONNELLY, CLERK-RECORDER
County of Contra Costa
555 Escobar Street * Martinez, CA 94553
Recorder (925) 335-7900 * Fax (925) 335-7926
Transfer Tax Monthly Detail by City
Report Date & Time
02/05/2026 18:57
For Month: January 2026
Document No. Recording Date/Time Transaction Date/Time Action City Split County Split Transfer Tax Total Location
For Richmond
2026-0000062 01/02/2026 08:46 01/02/2026 08:46:00 $4,550.00 $715.00 $5,265.00 Main Office 2026-0000996 01/06/2026 08:01 01/06/2026 08:01:00 $3,626.00 $569.80 $4,195.80 Main Office 2026-0001286 01/06/2026 10:54 01/06/2026 10:54:00 $4,403.00 $691.90 $5,094.90 Main Office 2026-0001895 01/07/2026 12:57 01/07/2026 12:57:00 $4,165.00 $654.50 $4,819.50 Main Office 2026-0001914 01/07/2026 13:44 01/07/2026 13:44:00 $21,062.50 $1,853.50 $22,916.00 Main Office 2026-0002004 01/08/2026 08:09 01/08/2026 08:09:00 $6,503.00 $1,021.90 $7,524.90 Main Office 2026-0002281 01/08/2026 13:14 01/08/2026 13:14:00 $4,095.00 $643.50 $4,738.50 Main Office 2026-0002716 01/09/2026 13:51 01/09/2026 13:51:00 $5,950.00 $935.00 $6,885.00 Main Office 2026-0003160 01/12/2026 13:42 01/12/2026 13:42:00 $3,843.00 $603.35 $4,446.35 Main Office 2026-0003181 01/12/2026 14:19 01/12/2026 14:19:00 $6,860.00 $1,078.00 $7,938.00 Main Office 2026-0003743 01/13/2026 12:24 01/13/2026 12:24:00 $5,145.00 $808.50 $5,953.50 Main Office 2026-0003906 01/13/2026 15:10 01/13/2026 15:10:00 $2,534.00 $398.20 $2,932.20 Main Office 2026-0003946 01/13/2026 16:06 01/13/2026 16:06:00 $2,345.00 $368.50 $2,713.50 Main Office 2026-0004423 01/14/2026 14:51 01/14/2026 14:51:00 $4,900.00 $770.00 $5,670.00 Main Office 2026-0005280 01/16/2026 14:06 01/16/2026 14:06:00 $5,075.00 $797.50 $5,872.50 Main Office 2026-0005335 01/16/2026 15:26 01/16/2026 15:26:00 $13,750.00 $1,210.00 $14,960.00 Main Office 2026-0005538 01/20/2026 11:17 01/20/2026 11:17:00 $5,950.00 $935.00 $6,885.00 Main Office 2026-0006482 01/21/2026 12:12 01/21/2026 12:12:00 $5,355.00 $841.50 $6,196.50 Main Office 2026-0006519 01/21/2026 13:22 01/21/2026 13:22:00 $3,500.00 $550.00 $4,050.00 Main Office 2026-0006600 01/21/2026 14:32 01/21/2026 14:32:00 $6,545.00 $1,028.50 $7,573.50 Main Office 2026-0006916 01/22/2026 09:41 01/22/2026 09:41:00 $4,179.00 $656.70 $4,835.70 Main Office 2026-0007196 01/22/2026 15:55 01/22/2026 15:55:00 $3,850.00 $605.00 $4,455.00 Main Office 2026-0007295 01/23/2026 08:37 01/23/2026 08:37:00 $4,081.00 $640.75 $4,721.75 Main Office 2026-0007299 01/23/2026 08:38 01/23/2026 08:38:00 $5,943.00 $933.90 $6,876.90 Main Office Documentary Transfer Tax for January 2026 (Attachment 4) 233
KRISTIN B. CONNELLY, CLERK-RECORDER
County of Contra Costa
555 Escobar Street * Martinez, CA 94553
Recorder (925) 335-7900 * Fax (925) 335-7926
Transfer Tax Monthly Detail by City
Report Date & Time
02/05/2026 18:57
For Month: January 2026
Document No. Recording Date/Time Transaction Date/Time Action City Split County Split Transfer Tax Total Location
2026-0007301 01/23/2026 08:41 01/23/2026 08:41:00 $6,475.00 $1,017.50 $7,492.50 Main Office 2026-0007735 01/23/2026 16:04 01/23/2026 16:04:00 $3,150.00 $495.00 $3,645.00 Main Office 2026-0008104 01/26/2026 14:32 01/26/2026 14:32:00 $4,480.00 $704.00 $5,184.00 Main Office 2026-0008188 01/26/2026 15:59 01/26/2026 15:59:00 $3,850.00 $605.00 $4,455.00 Main Office 2026-0008253 01/27/2026 08:24 01/27/2026 08:24:00 $2,114.00 $331.65 $2,445.65 Main Office 2026-0008285 01/27/2026 09:20 01/27/2026 09:20:00 $3,605.00 $566.50 $4,171.50 Main Office 2026-0008347 01/27/2026 10:55 01/27/2026 10:55:00 $3,675.00 $577.50 $4,252.50 Main Office 2026-0008572 01/27/2026 13:51 01/27/2026 13:51:00 $3,850.00 $604.45 $4,454.45 Main Office 2026-0008997 01/28/2026 12:27 01/28/2026 12:27:00 $4,550.00 $715.00 $5,265.00 Main Office 2026-0009003 01/28/2026 12:30 01/28/2026 12:30:00 $4,655.00 $731.50 $5,386.50 Main Office 2026-0009185 01/29/2026 08:23 01/29/2026 08:23:00 $3,220.00 $506.00 $3,726.00 Main Office 2026-0009324 01/29/2026 10:28 01/29/2026 10:28:00 $4,900.00 $770.00 $5,670.00 Main Office 2026-0009429 01/29/2026 12:40 01/29/2026 12:40:00 $4,410.00 $693.00 $5,103.00 Main Office 2026-0009486 01/29/2026 14:38 01/29/2026 14:38:00 $2,275.00 $357.50 $2,632.50 Main Office 2026-0009557 01/30/2026 08:12 01/30/2026 08:12:00 $3,290.00 $517.00 $3,807.00 Main Office 2026-0009658 01/30/2026 09:13 01/30/2026 09:13:00 $6,650.00 $1,045.00 $7,695.00 Main Office 2026-0009733 01/30/2026 10:21 01/30/2026 10:21:00 $20,937.50 $1,842.50 $22,780.00 Main Office 2026-0009935 01/30/2026 12:55 01/30/2026 12:55:00 $4,200.00 $660.00 $4,860.00 Main Office 2026-0009993 01/30/2026 14:34 01/30/2026 14:34:00 $5,901.00 $927.30 $6,828.30 Main Office 2026-0010038 01/30/2026 15:24 01/30/2026 15:24:00 $5,271.00 $828.30 $6,099.30 Main Office 2026-0010049 01/30/2026 15:37 01/30/2026 15:37:00 $4,095.00 $643.50 $4,738.50 Main Office 2026-0010060 01/30/2026 15:57 01/30/2026 15:57:00 $5,285.00 $830.50 $6,115.50 Main Office Total For Richmond $249,048.00 $35,279.20 $284,327.20
Documentary Transfer Tax for January 2026 (Attachment 4) 234
OPEB and Pension Returns for January 2026 (Attachment 5) Account Frequency Beg. Balance Contributions Interest Gain(Loss) Fees End Balance Rate PARS-OPEB Monthly 60,611,602.96 0.00 173,905.58 (16,058.04) 60,769,450.50 0.29% FY 2018 6.60%
FY 2019 6.77%
FY 2020 3.62%
FY 2021 26.76%
FY 2022 -13.72%
FY 2023 9.49%
FY 2024 13.37%
FY 2025 10.49%
FY 2026* 7.12%
*FY 2026 Annualized Return is based on 6 months of activity.

Annualized Returns
City of Richmond
City of Richmond Finance Department
PARS-OPEB Summary 450 Civic Center Plaza
Period Ending December 31, 2025 Richmond, CA 94804
(510) 620-6740

2.07%

0.41%
-2.83%

0.31%

2.81%

3.17%

0.68%

1.90%

2.25%

1.36%

0.45% 0.29%

2.76%
-0.21%
-0.41%
-2.13%

0.21%

6.40%

6.79%

5.85%

4.90%

5.61%

4.11%

2.11%
-4.00%
-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%
Jan-25
FY2025
Feb-25
FY2025
Mar-25
FY2025
Apr-25
FY2025
May-25
FY2025
Jun-25
FY2025
Jul-25
FY2026
Aug-25
FY2026
Sep-25
FY2026
Oct-25
FY2026
Nov-25
FY2026
Dec-25
FY2026
PARS-OPEB Return Rates
1-Month Return
3-Month Return

Page 1 of 3235 ends

OPEB and Pension Returns for January 2026 (Attachment 5) Account Frequency Beg. Balance Contributions Interest Gain(Loss) Fees End Balance Rate PARS-Pension Monthly 5,742,145.60 0.00 20,857.32 (1,525.58) 5,761,477.34 0.36% FY 2025 7.68%
FY 2026* 7.80%
*FY 2026 Annualized Return is based on 6 months of activity.

Annualized Returns
City of Richmond
City of Richmond Finance Department
PARS-Pension Summary 450 Civic Center Plaza
Period Ending December 31, 2025 Richmond, CA 94804
(510) 620-6740

1.36% 1.29%
-1.42%

0.31%

1.13%

2.40%

0.17%

2.48% 2.65%

1.42%

0.51% 0.36%

1.41%

0.50%

1.21%

0.16% 0.29%

3.88%

3.73%

5.12%

5.37%

6.69%

4.64%

2.30%
-2.00%
-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

Page 2 of 3236 ends

OPEB and Pension Returns for January 2026 (Attachment 5) Account Frequency Beg. Balance Disbursements Contributions Interest Gain(Loss) Fees End Balance Rate CalPERS-CERBT Quarterly 14,209,179.00 0.00 130,141.99 203,237.57 (2,553.18) 14,540,005.38 1.43% FY 2020 5.97%
FY 2021 20.47%
FY 2022 -12.60%
FY 2023 3.81%
FY 2024 8.69%
FY 2025 10.74%
FY 2026* 6.32%
*FY 2026 Annualized Return is based on 2 quarters of activity.

Annualized Returns
City of Richmond
City of Richmond Finance Department
CalPERS-CERBT Summary 450 Civic Center Plaza
Quarter Ending December 31, 2025 Richmond, CA 94804
(510) 620-6740

4.63%

1.58%
-4.39%

10.60%

2.31%

0.47%

7.83%
-3.94%

1.37%

5.48%

4.82%

1.43%
-6.00%
-4.00%
-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%
Jan-Mar 2023
FY2023
Apr-Jun 2023
FY2023
Jul-Sep 2023
FY2024
Oct-Dec 2023
FY2024
Jan-Mar 2024
FY2024
Apr-Jun 2024
FY2024
Jul-Sep 2024
FY2025
Oct-Dec 2024
FY2025
Jan-Mar 2025
FY2025
Apr-Jun 2025
FY2025
Jul-Sep 2025
FY2026
Oct-Dec 2025
FY2026
CalPERS-CERBT Return Rates
3-Month Return

Page 3 of 3237 ends

Page 1 of 4 ends

March 17, 2026

Finance Department

DATE: March 17, 2026
TO: Mayor Martinez and Members of the City Council
FROM: Shasa Curl, City Manager
Emily Combs, Director of Finance
Mubeen Qader, Deputy Director of Finance
Jerry Gurule, Accounting Manager

Subject:

Annual Review and Update of Financial Policies
FINANCIAL IMPACT: There is no fiscal impact associated with this item.

PREVIOUS COUNCIL
ACTION:

None.

STATEMENT OF THE
ISSUE:

The Government Finance Officers Association (GFOA)
recommends that financial policies be formally adopted
and reviewed annually as part of the budget process.

Consistent with this recommendation, as well as past
practice and best practices, staff is bringing forward
updates to the OPEB Funding Policy, Pension Funding
Policy, Investment Policy, and Unclaimed Funds Policy
for Council consideration.

RECOMMENDED ACTION:

ADOPT a resolution to APPROVE updates to the
Financial Policies - Finance Department (Emily Combs
510-620-6790/Mubeen Qader 510-412-2077/Jerry Gurule
510-620-6591).

DISCUSSION:

The Finance Department has undertaken a comprehensive review of our existing Financial Policies to ensure the policies align with the California Government Code, AGENDA
REPORT
238

Page 2 of 4 ends

March 17, 2026
Government Finance Officers Association (GFOA) recommended best practices, and standards set forth by the California Municipal Treasurers Association (CMTA). These policies serve as essential guidelines for City staff, ensuring adherence to financial standards across all operational facets.

GFOA recommends that governments formally adopt financial policies and review them annually as part of the budget process. Following our assessment, we have provided updates to the Other Post Employment Benefit (OPEB) Funding Policy, the Pension Funding Policy, the Investment Policy, and the Unclaimed Funds Policy.

OPEB Funding Policy

City staff recommends amending Section D. 3. b of the Funding Guidelines to specify exclusions when calculating the 10 percent allocation of the year-end operating surplus.

The revised section shall read as follows:

The City shall place 10 percent of the year-end operating surplus in the General Fund in excess of the City’s Cash Reserve Policy into the Trusts. The Operating Surplus is calculated as Total Actual Revenues minus Total Actual Expenditures including Transfers In and Transfers Out with the following exclusions:

 Revenues received per Resolution No. 98-24
 Grant revenues and expenditures
 Section 115 Trust revenues and expenditures
 Depreciation expenditures

Pension Funding Policy

City staff recommends amending Section D.2. of the Funding Guidelines to specify exclusions when calculating the 10 percent allocation of the year-end operating surplus.

The revised section shall read as follows:

Transfers In and Transfers Out with the following exclusions:
 Revenues received per Resolution No. 98-24
 Grant revenues and expenditures
 Section 115 Trust revenues and expenditures
 Depreciation expenditures

239

Page 3 of 4 ends

March 17, 2026
Investment Policy

Annually, the State Treasures office and The California Debt and Investment Advisory Commission (CDIAC) update and issue, in January, the Local Agency Investment Guidelines (LAIG). The LAIG is intended to aid local officials in their efforts to implement existing laws pertaining to the investment of public funds. Each year, CDIAC staff convenes a working group of public and private sector professionals to support its efforts to revise and update these Guidelines. Finance staff reviewed the LAIG effective January 1, 2026, to update the Investment Policy accordingly.

The policy has been updated to include clarifying language that aligns with California Government Code Section 53600 and permitting the investment of specific securities with maturities in excess of five years, contingent upon a resolution by the City Council no less than three months prior to investment. These securities include Bonds, Notes, Treasury Notes, Mortgage-Backed Securities and Asset-Backed Securities. In addition, the California Government Code has updated eligible Commercial Paper from may not exceed 270 days maturity to 397 days maturity.

Unclaimed Funds Policy

The procedure for managing unclaimed checks has been revised to occur on a quarterly basis rather than every six months. This more frequent schedule allows the City to identify and process outstanding unclaimed checks in a timely manner, ensuring that funds are either returned to their rightful owners or appropriately transferred according to policy. By increasing review frequency, oversight is strengthened and financial management is improved, leading to greater compliance and adaptability. Quarterly assessments provide regular updates to stakeholders and support proactive measures in handling unclaimed checks throughout the year.

Next Steps

City staff recommends that the City Council approve the proposed updates to the financial policies. City staff will continue to review the policies annually to ensure they remain consistent with the California Government Code, applicable legislation, City Council goals and priorities, and best practices.

DOCUMENTS ATTACHED:

Attachment 1 – Guiding Fiscal Policy
Attachment 2 – OPEB Funding Policy
Attachment 3 – Pension Funding Policy
Attachment 4 – Cash Reserve Policy
Attachment 5 – Debt Policy
Attachment 6 – Grant Management Policy
Attachment 7 – Investment Policy
Attachment 8 – Unclaimed Funds Policy
240

Page 4 of 4 ends

March 17, 2026
Attachment 9 – Purchasing Policy
Attachment 10 – Employee Meal and Food Policy
Attachment 11 – Travel Expense Policy and Procedures
Attachment 12 – FasTrak Policy and Procedures
Attachment 13 – Accounts Payable ACH Policy
Attachment 14 – Resolution Adopting Financial Policies

241
POLICY: Guiding Fiscal Policy
ESTABLISHED: April 20, 2021
RESOLUTION NO.: None
I. Guiding Fiscal Policy
A. Budget development by the City Manager will be guided by a long -term financial plan developed in consultation with City Council, the Mayor and other key stakeholders and adopted by City Council.

B. If a department is projected to overspend by 1 percent of th eir total annual budget based on year-to-date performance as of the quarterly report, then the City should take corrective action to balance the budget.

C. The City will, to the extent possible, avoid using non -recurring revenues to fund ongoing programs or services. Non -recurring revenues are the portion of the government’s revenues that are not predictable to any degree and cannot be reasonably expected to continue year to year. Non-recurring revenue can also include settlements that are one-time payment.

D. Recurring revenues are the portion of the government’s revenues that can reasonably be expected to continue year to year, with some degree of predictability. Some revenue sources may have both non-recurring and recurring components. The goal of the City will be to provide transparency as to what portion of the revenue stream is reasonably expected to be collected each year.

E. The City will establish a baseline estimate of what portion of the Documentary Transfer Tax is considered recurring by calculating the mean monthly amount collected since the increase to the rate was approved by voters in 2018. The average amount of tax collected from this source will be recalculated in April of each year to incorporate new data and the new average will be adopted as the baseline amount budgeted for the new fiscal year. This amount will be recalculated in January and adjustments will be included with the midyear budget update to City Council. Any excess tax collected through this source—amounts collected above the baseline—may be considered non- recurring revenue in that year and the City Council will prioritize how these funds are spent. The Council should prioritize and consider using recurrin g revenue to address recurring expenditures . Non-recurring revenue sources should not be used to fund recurring expenditures.

F. Capital asset acquisitions will not be treated as recurring expenditures.

242

Page | 1

G. If the City anticipates a General Fund deficit, new un restricted funds must be considered first to support ongoing programs and close the deficit before funding new ones.

H. The use of unencumbered prior -year balances in all funds as well as other non - recurring revenues shall be scrutinized and carefully limited to be used primarily for non-recurring expenditures. Non-recurring expenditures are defined as those that have a clearly recognized termination date connected to the completion of the identified purpose of the expenditure, even if the expenditure crosses multiple fiscal years.

I. The City Council must approve any changes to position control irrespective of the impact to the City’s operating budget.

II. Special Revenue Funds and Enterprise Funds
A. Special revenue fund administrators must regularly evaluate and manage the balances within the fund to ensure that they are spent timely to achieve the fund’s intent.

B. Each enterprise fund shall reflect the true cost of operation, including direct and indirect costs of services provided by the General Fund.

C. Enterprise funds should derive most of their revenues from charges, user fees and interest. Functions that are funded using enterprise funds should strive to be 100 percent self -supporting through annual reviews of th eir fee structures, charges for services, and other operating revenues and expenditures.

D. It shall be the goal of all special revenue and enterprise funds to fully reimburse the General Fund for all direct expenditures and related costs provided to support their programs. Related cost reimbursements shall be calculated using the most current Cost Allocation Plan rate, unless otherwise restricted by an ordinance or policy that has been approved by the City Council. In the event that a fund does not fully rei mburse the General Fund, any remaining subsidy shall be reported annually through the budget process.

III. Reserve Policies
A. The City’s goal shall be to achieve 21 percent of its operating General Fund expenditures as a minimum reserve policy. The City must bal ance the need for adequate reserves with its responsibility to provide services to the residents of Richmond. In years when the City forecasts that total General Fund revenues will be less than the current year’s revenues, or anytime significant service re ductions, such as layoffs or furloughs, are contemplated due to adverse financial conditions, use of the General Fund reserve must be considered to maintain existing services. Use of General Fund reserves must be authorized by City Council resolution expla ining the need for use.

243

Page | 2

B. Prior-year funds and surpluses will revert to their original funding sources with the exception of cost-recovery funds that will be permitted to maintain a reserve balance of 10 percent of the actual expenditures from the previo us fiscal year. Those funds reverting to the General Fund will be allocated to the unassigned fund balance.

C. In fiscal years where it becomes necessary for the City to use monies in the Reserve Fund such that the Reserve Fund balance drops below the twenty-one percent level, the City will initiate action in the subsequent year to replenish the Reserve Fund to the level of twenty-one percent of General Fund expenditures. If use of Reserve Fund monies is less than one percent of General Fund receipts, the Cit y shall attempt to replenish the twenty-one percent balance in the subsequent fiscal year. If use of Reserve Fund monies is more than one percent of General Fund revenue, the City shall attempt to replenish the twenty-one percent balance by one percent per year over a period of years as necessary to restore the Reserve Fund balance to the level of twenty-one percent of General Fund expenditures.

D. Risk Management Internal Service Fund reserves should be maintained at a level that adequately cover the City’s self-insurance indemnity risk exposure to City property, liability, health benefits and workers compensation obligations.

E. Reserve policies for equipment replacement internal service funds (e.g., Police CAD, Police RMS and Equipment Replacement) will be inc orporate into the annual budget based on projected remaining useful lives of underlying assets (based on years and usage) and, to the extent that such funds include operating costs, will also include a goal to achieve a planned operating reserve of not les s than 10 percent of operating and maintenance costs. The goal of achieving a 10 percent reserve, however, will not supersede the budgetary needs of providing city services and workforce needs.

F. Enterprise fund administrators for the Port, Marina and KCRT enterprise funds are encouraged to establish a reserve policy for their funds where permitted and appropriate. These policies should set a target minimum reserve level that accounts for the unique characteristics and risks to the fund. The policies should also establish the appropriate uses of the reserves and set a timeframe both for meeting reserve targets if they have not yet been achieved and for replenishing reserves should they fall below the target minimum level.

IV. Encumbrances
A. Once funds have been encumbered, they cannot be expended for anything other than what was authorized under the original encumbering authority, which could include a purchase order, contract, authority for expenditure, or travel authority. This policy does not prohibit the use of change order capacity which would allow purchase orders to be amended as long as the purpose of the encumbrance has not changed from what was originally authorized. City departments may disencumber and re -encumber funds within the same fiscal year.

244

Page | 3

B. City departments may not increase a prior-year encumbrance, but they may disencumber one. Notwithstanding this Policy, prior -year encumbrances for capital projects may be increased if there is more money left on the contract. Only the Ci ty Council may reprogram prior-year disencumbered funds. At the end of a fiscal year, all unencumbered funds will revert to their respective fund balance , if the originating source is the General fund, to the unassigned fund balance.

C. If funds are not disencumbered, they will continue to be regarded as obligated balances, thereby reducing the available unobligated account balances. Consequently, the timely disencumbrance of funds is necessary to reflect an accurate and updated status on the availability of funds. As a rule, any encumbered funds that remain unspent at the end of the fiscal year shall be unencumbered. An exception to this policy applies to encumbrances for commodities procurements, which include supplies or equipment.

These encumbered funds shall be unencumbered and revert to fund balance if they remain unspent for a period longer than three years.

The City Manager is authorized to implement this Policy and to ensure funds are disencumbered at the appropriate time.

V. Fund Balances/Accounting
A. The General Fund is the only fund in the City permitted to have a positive unassigned fund balance. Fund balances in any other fund outside of the General Fund should be earmarked monies either as restricted, committed, or assigned based upon the authority under which such categorizations have been given by Government Accounting Standards Board (GASB).

B. New and expanded unrestricted revenue sources should be first applied to support existing obligations prior to funding new programs.

C. Unrestricted General Fund revenue streams shall not be designated as restricted or special revenue funds. This in no way precludes the City from making appropriations from unrestricted revenues to achieve specific policy goals either as part of the budget process or during the fiscal year.

D. Other than in the General Fund, unspent General Fund monies that were assigned to a specific purpose that are no longer applicable should not be reported as assigned fund balance, but rather, should be included in the unassigned fund balance of the General Fund by reporting those amounts as due to the General Fund. Fu nd balances will include amounts designated as “due to the General Fund” and “due from the General Fund” in budget reports accounting for the flow of funds.

245

Page | 4

VI. Fiscal Sustainability Planning
A. Service level or work force reductions based solely on anticipated or current budget deficits cannot be adopted by City Council until all other sources of funds including reserves and other fund balances have been considered to cover budget gaps.

B. Multi-year General Fund operating cost projections, which forecast revenues and expenditures, shall be prepared and updated each year, or as necessary, to identify and evaluate the financial condition of the City over a four -year period, at a minimum.

This forecast shall be reported to the City Council as part of the annual budge t development process. Projections shall be developed using available data, historical trends, and an evaluation of anticipated future impacts to revenues and expenditures.

Departments shall prepare a forecast for each major special fund and special fund facing structural imbalance that they administer and present it with their annual budget request.

C. When initiating multi-year projects or adding new items to the budget with future -year expenditure requirements, the City shall consider its ability to contin ue to pay these future year expenses.

D. The City will pursue federal, state, and private grants but will carefully analyze the need for, and availability of, required financial support of these programs beyond grant funding. City Council will determine wheth er grant funding supplants or augments current funding for programs. Any such financial support must be reported at the time that the City considers accepting the grant. Financial support includes, but is not limited to, an obligation for a current or ongo ing City match and a need to maintain a service level following the termination of the grant.

E. The City will continuously seek new revenues and pursue a diverse revenue base in order to limit the impact to the City from short -term fluctuations in any one r evenue source. The City must consider taxes that are not regressive.

VII. Debt Management
A. Short-term debt in the form of Tax and Revenue Anticipation Notes will be considered as a viable option to support ongoing operations.

B. Long-term debt will not be used to support ongoing operations.

C. Capital leases may be used as a mid-term borrowing arrangement for fleet, equipment, and technology uses to the extent that the imputed interest rate in any such capital lease is competitive with existing long -term borrowing r ates, considers potential maintenance cost savings for assets under the capital lease, and that such costs are incorporated into the long-range financial forecast.

D. Long-term borrowing (three years or more) for capital facilities will be considered as an appropriate method of financial facilities that benefit more than one generation of users and to the extent that existing reserves or other one-time resources are not available.

246

Page | 5

E. The City will no longer be permitted to use interest rate swaps when issuing debt.

F. The City’s finance department present value analysis must identify the economic effect of any proposed refunding and shall periodically evaluate potential savings to the City from financing outstanding debt (Refundings). Savings will be analyzed on a present value basis with the goal of achieving a Present Value Savings of three percent of the refunded par amount for any one refunding transaction. The Finance Director may recommend a refunding that has economic benefit but does not meet the Present Value Savings Goal of three percent; however, the Director must present to the Mayor and City Council the reasons for advocating for the refunding explaining the benefits and the costs.

G. The use of variable interest rate debt instruments should be analyzed a s part of a strategy that benefits from the out-performance of the variable rate market to fixed rate debt, and to determine the appropriate level of risk exposure for the City to accept.

VIII. Private Developments
Private development of residential, commercial and/or industrial properties shall pay all contractual obligations for capital or other improvements that are necessary to serve the development and should not be subsidized by public funds except in cases where there is a direct financial benefit to the City that is at least fiscally proportional to the subsidy being offered to the developer. Should a development not move forward, in addition to any other contractual requirements owed to the City, the developer must reimburse the City for the amount of th e subsidy provided to the developer.

IX. Capital and Technology Projects
A. Objectives and Project Prioritization

1. A minimum five-year capital improvement plan will be developed as part of the budget process to identify capital projects based on a system of prior itization and considering funding resources that are available.

2. City Council will determine how capital projects are prioritized.

3. The City shall identify projects for funding on an annual basis through a systematic and transparent process that is consistent with the City’s annual budget development process and that reflects the prioritization criteria detailed in Project Prioritization Criteria as detailed in number 4.

4. Project Prioritization Criteria – projects shou ld meet one of the standards under each subheading and the criteria apply not only to projects in the 5-year capital plan, but also for projects applied for through the grant process.

247

Page | 6

a) Resilience and Sustainability
(1) Project improves the health of the commun ity and natural environment through sustainable designs with improved water resources and regional air quality and reduced greenhouse gas emission that contributes to climate change, open space and land for preservation, habitat protection and biological d iversity, and enhanced urban runoff management.
(2) Project facilitates multiple transportation options (including walkability, bicycles, and public transportation) and reduces the need for auto dependency
(3) Project promotes infill development, where appropriate. (4) Project incorporates design that meets or exceeds recognized Federal and State standards in the field of energy efficiency, such as State of California Title 24 Energy Efficiency Standards, or LEED building standards.
(5) Project results in greener neighborhoods and reduces or avoids the potential public exposure to pollutants, contamination and other hazards to public health and environment.
b) Impact on City Operations, Asset Condition, Annual Recurring Costs and Asset Longevity
(1) Project is necessary to meet the basic level of service needs. (2) Project avoids potential infrastructure failure.
(3) Project minimizes maintenance needs by improving
infrastructure and/or reducing future costs.
(4) Project delay would create significant future costs, or negative community impacts.
c) Equitable Community Investment and Economic Sustainability (1) Project contributes toward economic development and revitalization efforts.
(2) Project will benefit underserved communities including those with low - income households, low community engagem ent, limited or no access to the internet, and low mobility or access to transportation systems.
(3) Project benefits communities that have the highest population served per acre.
d) Project Readiness
(1) Project is ready to enter the phase corresponding to the funding requested (e.g., a design -build project with a completed environmental document will rank higher than a design -build project without a complete environmental document).
248

Page | 7

(2) Project shall be ranked based upon the delivery method.

Projects that can be deliver ed most expeditiously shall be preferred.
e) Funding Availability
(1) Projects that have higher leveraging of City funds against external funds (grant funds or cost sharing from outside entities) will receive greater priority.
(2) Project rank is increased based on assessment of the amount of funding needed to complete the current project phase and the entire project.
f) Multiple Category Benefit and Bundling Opportunities 1) Project reduces construction costs and community disruption by potentially bundling with adjacent projects.
2) Project provides for partnering or bundling opportunities with other local, state, or federal agencies (e.g., leverages shared resources).
3) Completion of the project sooner may provide significant financial benefits.

5. Cost Estimates
a) Cost estimating is an iterative process that should be done at significant milestones during the development of capital and technology improvement projects. Cost estimating should develop a greater degree of detail and accuracy at each milestone and provide a major budgetary control mechanism on every project.
b) For purposes of initial scoping, preliminary cost estimates may be based on industry standards or existing practices.
c) Once a project has been funded, cost estimates should be prepared after each applicable phase, suc h as space planning, preliminary design, conceptual design, final design (just prior to bid initiation), and on change orders during construction or implementation. d) Cost estimates should be as complete as possible based on the information available at mile stones and should address such areas as CEQA or NEPA compliance, land acquisition, grant funding requirements, design, construction, furniture, fixtures and equipment, software and hardware, contingency funding, costs associated with staffing, maintenance and other additional incremental costs that may be incurred once the project is complete.

249

Page | 8

6. Funding Requirements
a) Total requested funding should identify the total amount needed to complete the project, potential sources of funding including any applicable restrictions, options for phased implementation, and a timeline with milestones and the corresponding funding needed to accomplish each milestone.
b) The funding requirement should include the estimated amount needed to fund ongoing maintenance, programming, and operating needs of the project.

250

Page | 1

POLICY: OPEB Funding Policy
ESTABLISHED: April 20, 2021
RESOLUTION NO.: 65-23; DATE: June 27, 2023

I. OPEB Funding Policy
A. Introduction
The purpose of this Statement of Benefits Plan Funding Policy (“Policy”) is to establish a methodology for funding benefit obligations accruing under the City of Richmond Other Post Employment Benefit Plans (the “Plans”). It is anticipated that current assets plus future assets from employer contributi ons, employee contributions, and investment earnings should be sufficient to fund the Plans benefits. The Policy is intended to reflect a reasonable, conservative approach with each generation of ratepayers financing, to the greatest extent possible, the cost of retiree healthcare benefits being accrued. This Policy recognizes that there will be investment marketplace volatility and that actual economic and demographic experience will differ from assumed experience. Accordingly, this Policy is intended to p rovide flexibility to smooth such volatility and experience in a reasonable, systematic, and financially sound manner. Further, it is the intent that this Policy comply with all applicable laws, rules and regulations (collectively “Laws”). In the event that this Policy conflicts with any such Law, the applicable Law shall prevail.

B. General Information
The City of Richmond (the “City”) currently manages two separate trust accounts in regard to Other Post Employment Benefits (“OPEB”). As of January 17, 2017, the Richmond Police Officers Association (“RPOA”) and the City implemented a new contract to create a separate OPEB trust for RPOA members and future retirees.

The City OPEB plan is administered by Public Agency Retirement Services (PARS) and the RPOA OPEB plan is administered by California Public Employees Retirement System (“CalPERS”).

C. Policy Funding Objectives
The primary funding objectives of this Policy, in order of importance, are to:

1. Provide sufficient assets to permit the payment of all benefits under the Plans.

2. Maintain equity among generations of ratepayers by:
a) Establishing improvement, on a projected basis, in the Plan’s Funded Ratio, as defined in the Glossary, such that it approaches 100% over a given period of time;

251

Page | 2

b) Amortizing the Unfunded Actuarial Accrued Liability, as defined in the Glossary, over fixed periods, specified below.

3. Minimize the volatility of the employer’s annual contributions by smoothing investment gains and losses over a period of years. Smoothing investment returns over a period of years recognizes that investment performance will fluctuate, and only by coincidence will it exactly equal the assumed rate of return for any given year. It is anticipated that this approach may reduce volatility within the calculation of the Unfunded Actuarial Accrued Liability and the actuarially determined contribution rate.

D. Funding Guidelines
This Policy establishes guidelines for setting the employer contribution rate.

1. Actuarial Valuations
The Plan’s actuary shall conduct an actuarial valuation biennially, based on actual Plans data, to determine funding progress as well as employer contributions for the following two fiscal years.

2. Actuarially Determined Contribution Rate
a) The actuarial valuation report shall include calculation of a recommended Actuarially Determined Contribution (ADC) rate. The ADC is intended to fund new OPEB liabilities as they are earned each year (the Normal Cost) plus an amortization of the existing Unfunded Actuarial Accrued Liability (UAAL).
b) The UAAL amortization component shall consist of:
(1) The initial UAAL amortized as a level dollar amount over a fixed 20-year period.
(2) Future unexpected changes in plan liabilities or assets at each valuation date shall each be amortized in “layers” as level dollar amounts over separate, fixed 20-year periods.
c) The ADC shall be reduced by the expected employee contributions to arrive at a net Actuarially Determined Employer Contribution (ADEC) rate. This target contribution rate may be expressed as a dollar amount or as a percent of payroll.
d) The ADEC shall be further reduced by the amount of annual retiree benefits payments (Implicit Subsidy and/or Explicit Subsidy payments) which are paid from the City’s general assets but not reimbursed by the OPEB trusts.

252

Page | 3

3. Funding Policy Contribution Rate
Coordination of the Plan’s Funding and Investment Policies will attempt to minimize the volatility of the employer’s contribution. a) The City shall seek to contribute the Actuarially Determined Contribution rate annually, though it maintains the flexibility to reduce contributions when fiscally necessary.
b) The City shall place 10 percent of year-end operating surplus in the General Fund in excess of the City’s Cash Reserve Policy into the Trusts. The Operating Surplus is calculated as Total Actual Revenues minus Total Actual Expenditures including Transfers In and Transfers Out with the following exclusions:
 Revenues received per Resolution No. 98-24
 Grant revenues and expenditures
 Section 115 Trust revenues and expenditures
 Depreciation expenditures
c) For the purposes of the ADC calculation, investment return assumptions shall be evaluated by an independent investment advisor on a regular basis (at a minimum of every two years) and should reflect the nature of the investments held in the Plans, and the historical and projected return rates anticipated for the investments.

E. Assumption Guidelines

1. The actuarial assumptions are adopted by the City in an effort to align the funding of the Plans with actual demographic, healthcare and economic experience, t hus providing stability to the contribution rate over time. It is expected that actual experience will deviate from the actuarial assumptions and Experience Gains and Losses will occur. These gains (or losses) will reduce (or increase) future contributions.

2. Actuarial Assumptions are generally grouped into two major categories:
a) Demographic assumptions -- which include withdrawal (termination), retirement, disability, and mortality rates, as well as assumptions regarding beneficiaries.
b) Economic assumptions -- which include inflation, healthcare inflation and investment return.

3. As part of the annual OPEB valuation process, the actuary shall also provide advice to the City and recommend non -pension assumptions, such as increases in healthcare costs.

253

Page | 4

F. Transparency and Reporting
Funding of the City’s OPEB should be transparent to all parties including City employees, retirees, recognized employee organizations, the City Council and Richmond residents. In order to achieve this transparency, the following information shall be available:
a) Copies of the actuarial valuations for the City’s OPEB plans shall be made available to the City Council.
b) The City’s Annual Comprehensive Financial Report (ACFR) shall be published on its website. This report includes information on th e City’s OPEB plans, contributions to the OPEB Trusts, and the funded status of the plans.
c) The City’s annual operating budget shall include appropriations for contributions to the OPEB Trusts and pay-go costs.

G. Review Funding Policy
Funding OPEB requires a long -term plan. The City shall review this policy annually and make changes as necessary. Annually checking the actuarial valuations to determine if changes to this policy are necessary to ensure adequate resources are being accumulated to fund OPEB.

All aspects of this Policy and the individual factors in the calculation of the annual employer contribution rate which is the result of the above process are subject to the review and approval of the Board and are subject to change, in whole and in part, if deemed appropriate and in the best interests of the Plan sponsor and participants.

254

Page | 5

Glossary
Actuarial Cost Method: The technique used to allocate costs to various time periods.

Actuarial Accrued Liability (AAL) : The portion of the Present Value of Projected Benefits that is attributed to past years of service by the Actuarial Funding Method. The AAL serves as a funding target at any given point in time.

Actuarial Value of Assets : The smoothed value of assets used by t he actuary in the actuarial valuation, for the purpose of reducing the impact of market fluctuations on the employer’s contribution rate.

Entry Age Method : An Actuarial Cost (or Funding) Method that determines the plan's Normal Cost as a level percentage of pay over the working lifetimes of plan members.

Experience Gains and Losses: The difference between the experience anticipated by the actuarial assumptions and the plan's actual experience during the period between valuations. If actual experience is financially more favorable to the Plan, it is a Gain, (e.g., higher investment return than expected). If actual experience is financially less favorable to the Plan, it is a Loss, (e.g., lower investment return than expected).

Funded Ratio: A measure of the ratio of plan assets to the Actuarial Accrued Liability (funding target) of the Plan. Plan assets can be the Market Value of Assets or the Actuarial Value of Assets.

Market Value of Assets: The total fair value of fund assets as reported in the Plan’s financial statements.

Normal Cost: The portion of the Present Value of Projected Benefits that is attributed to the current year by the Actuarial Funding Method. Also referred to as the Annual Benefit Cost.

Unfunded Actuarial Accrued Liability (UAAL): The portion of the Actuarial Accrued Liability not covered by plan assets. It is calculated by subtracting the Actuarial Value of Assets from the Actuarial Accrued Liability.
255

Page | 1

POLICY: Pension Funding Policy

ESTABLISHED: October 17, 2023
RESOLUTION NO.: 104-23; DATE: October 17, 2023

I. Pension Funding Policy
A. Introduction
The following policy has been developed in response to significant annua l pension cost increases as a result of current and retired employees living longer, lower than anticipated investment returns by CalPERS over the last several years, reduction in Discount Rate and CalPERS adopted policies that require all cities to paybac k all Unfunded Actuarial Liability (“UAL”) over thirty years for unfunded liability prior to June 30, 2019 valuations and over twenty years for any new unfunded liability. This policy will formalize a funding mechanism to be used at the City’s discretion t o help offset future pension cost increases.

B. General Information
The City of Richmond (the “City”) approved a new contract to create a combo Section 115 Trust account on July 19, 2022, for pension prefunding. The combo Section 115 Trust account is administered by Public Agency Retirement Services (“PARS”) and allows the City to prefund Pension and Other Post-Employment Benefits (“OPEB”). The funds that are contributed to the Trust account can only be used to pay Pension and OPEB; the City can utilize these funds to pay for such costs during fiscal emergencies.

C. Policy Funding Objectives
The primary funding objectives of this Policy are to:

1. Address the increasing annual employer required UAL contributions due to variances in actual experience versus CalPERS actuarial assumptions including investment returns.

2. Prefunding the Trust Fund account can help the City improve its UAL funding ratio faster.

3. Provide budgetary flexibility during challenging budget years or to “smooth” payment spikes that could cause financial stress on the City.

256

Page | 2

D. Funding Guidelines
This Policy establishes guidelines for setting the employer contribution to pre -fund rising pension costs.

1. The City shall continue to make annual UAL prepayment to CalPERS in the beginning of each Fiscal Year, resulting in an estimated 3. 4 percent discount compared to paying the UAL monthly. The City shall place the prepayment savings into the Trust account.

2. The City shall place 10 percent of year -end operating surplus in the General Fund in excess of the City’s Cash Reserve Policy into the Trust. The Operating Surplus is calculated as Total Actual Revenues minus Total Actual Expenditures including , Transfers In and Transfers Out with the following exclusions:
 Revenues received per Resolution No. 98-24
 Grant revenues and expenditures
 Section 115 Trust revenues and expenditures
 Depreciation expenditures

E. Review of Funding Policy
Funding Pension requires a long -term plan. The City will review this policy annually and make changes as necessary. Annually checking the CalPERS actuarial valuations to determine if changes to this policy are necessary to ensure adequate resources are being accumulated to fund Pension.
257

Page | 1

POLICY: Cash Reserve Policy
ESTABLISHED: June 7, 2023
RESOLUTION NO.: 64-23; DATE: June 27, 2023

I. Cash Reserve Policy
A. Overview
Municipal governments provide a wide range of services that have an impact on public safety and quality of life for community members. Prudent use of resources helps determine how effectively these services are provided on an ongoing basis. In addition to managing revenues and expenditures, it is also the muni cipal finance official’s responsibility to focus on the General Fund balance and maintain cash reserves. In particular, to maintain operations in case of any significant event that could cause disruptions in cash flow, such as an economic downturn or natur al disaster.

The City of Richmond endeavors to maintain adequate reserves in its General Fund as a matter of fiscal prudence and sound financial management: This policy will guide the City in:
• Planning for contingencies and unexpected events.
• Ensuring cash availability to stabilize cash flow.
• Maintaining creditworthiness.
• Long-range financial planning
• Deciding when to use reserves and how to replenish reserves should they fall below the minimum threshold

B. Policy Guidelines
For purposes of this policy document, cash reserves refer to the sum of the Committed, Assigned, and Unassigned portions of the fund balance in the General Fund. The Governmental Accounting Standards Board Statement No. 54 (GASB 54) defines five distinct classifications of fund balances, applicable to governmental funds only, as follows:

258

Page | 2

CLASSIFICATION NATURE OF DESIGNATION
Non-Spendable Cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to remain intact
Restricted Restricted either externally imposed or imposed by law through constitutional provisions or enabling legislation Committed Reserved for specific purposes pursuant to constraints imposed by formal action of the City Council
Assigned Reserved by the City Council or City Manager for specific purposes, but neither restricted nor committed
Unassigned Residual balance not classified in any of the above categories and has not been restricted, committed, nor
assigned to specific purposes
The City shall maintain year end contingency reserve balances in the General Fund of a minimum of twenty one percent (21%) of next year’s budgeted General Fund expenditures including transfers out. This is the minimum needed to maintain the City’s creditwo rthiness and to adequately provide for economic and legislative uncertainties, cash flow needs and contingencies. A policy based upon percentage assures that the reserve will remain a prudent cushion as the City’s budgets grow over time.

City Council approval is required before any withdrawals from the reserve fund. The City Council shall have the discretion to use the reserve for one -time emergencies only and not to be used for ongoing expenditures. As the City experiences net revenue gains in future years, the reserve balance must grow back to a minimum of twenty one percent (21%) of total expenditures, in order to allow the City to build up its capacity to handle future short-term economic downturns or emergencies with minimal to no impact on City services.

The Director of Finance will review the Cash Reserve Policy annually in connection with the City’s annual budget process to ensure that the City is in compliance with the policy. Additionally, the City Manager will review the policy at regular intervals and will make recommendations for modification as deemed appropriate. 259

Page | 1

POLICY: Debt Policy
ESTABLISHED BY: October 17, 2023
RESOLUTION NO.: 103-23; DATE: October 17, 2023

I. Debt Policy
A. Introduction
The City of Richmond (the City), through the Finance Department, executes debt instruments, administers debt proceeds, manages ongoing disclosure and debt compliance, and makes debt service payments, while acting with prudence and diligence and attention to prevailing economic conditions. The City believes that debt is an equitable means of financing capital projects and represents an important means of meeting fiscal responsibilities.

The Debt Policy primarily addresses debt instruments/securities issued by the City in public or private bond markets. This is consistent with Government Finance Officers Association (GFOA) guidelines, and rating agency guidelines. The debt policies pertain to debt that is typically incurred when capital is raised in the publi c or private markets, including borrowings from sophisticated qualified institutional buyers, to meet the City’s funding needs. Such debt constitutes obligations whereby a third - party has provided funds, which is evidenced by the formal execution of a bond or certificate (or a similar instrument) and is held by the third-party until it is repaid.

The Debt Policy does not cover other obligations such as contracts payable, notes payable, arbitrage liability, or net pension liability, pension unfunded accrued actuarial liability and Other Post -Employment Benefits (OPEB) unfunded accrued actuarial liability. The City’s Annual Comprehensive Financial Report (ACFR) provides a complete list of outstanding long -term obligations. The sections in the ACFR listing the long-term obligations are: Governmental Activities Long -Term Debt Obligations; Business Type Activities Long -Term Debt Obligations; Special Assessment Debt without City Commitment; and Conduit Debt. Consistent with Governmental Accounting Standards Board (GASB)standards, the net pension liability and OPEB - related obligations are reflected in the Notes section of the ACFR.

The Debt Policy outlines the City’s procedures and goals for the use of debt to finance City needs. This Debt Policy is enacted in an e ffort to standardize and plan the issuance and management of debt by the City. While the Debt Policy serves as a guideline for general use, from time to time, however, compelling or extraordinary circumstances may arise that require the City Council, at the recommendation of the Finance Department, to deviate from this policy.

260

Page | 2

B. Policy Purpose
The purpose of this Debt Policy is to set forth the principles and objectives that should guide the City’s decisions to issue debt and establishes guidelines for responsibly managing debt. The core objectives of this policy include the following:

1. Establish guidelines for the use of various categories of debt

2. Create procedures and policies that minimize the City’s debt service and issuance costs.

3. Maintain access to cost-effective borrowing.

4. Ensure full and timely repayment of debt.

5. Achieve and maintain the highest practical credit ratings of the various bond and credit types as well as the City’s overall credit rating.

6. Ensure financial controls are in place with resp ect to proceeds of debt issuances.

7. Ensure compliance with covenants contained in financing documents and compliance with applicable state and federal laws and regulations.

8. Promote the City’s best interests and protect the City’s financial stability when deciding whether to approve debt.

9. Provide full and complete financial disclosure and reporting.

In meeting these objectives, the City also fulfills the requirements of California Government Code Section 8855 with respect to local debt policies.

An annual review of the Debt Policy will be performed and any changes to the policy will be brought forward for City Council consideration and approval. Further, in the event there are any material deviations or exceptions from the Debt Policy when a certain bond issue is structured, those exceptions will be discussed in the staff reports when the bond issue is docketed for City Council’s consideration.

C. California Debt and Investment Advisory Commission (CDIAC) Reporting/Debt Policy Requirements
Effective January 1, 2017, Government Code Section 8855 was amended to require reporting to CDIAC both before and after the issuance of debt by or on behalf of local governments, including the City. Section 8855 also requires local governments to have a debt policy that includ es the following (locations in this policy are identified parenthetically):
261

Page | 3

1. The purposes for which the debt proceeds may be used (Section: E)

2. The types of debt that may be issued (Section: E).

3. The relationship of the debt to, and integration with, the issuer’s capital improvement program or budget, if applicable (Section: F.2).

4. Policy goals related to the issuer’s planning goals and objectives (Section: F.1)

5. The internal control policies that th e issuer has implemented, or will implement, to ensure that the proceeds of the proposed debt issuance will be directed to the intended use (Section: G).

D. Scope of Application
This Debt Policy applies to debt issued by the City of Richmond, the Richmond Housing Authority, the Successor Agency to the Richmond Community Redevelopment Agency, and the Richmond Joint Powers Financing Authority; to debt the City issues on behalf of assessment districts and community facilities districts; and to debt the City issu es on behalf of third parties where public benefit can be achieved i.e., conduit financing.

E. Types and Purposes of Debt

1. Long-Term Debt
Long-term debt may be issued only to serve a public purpose and may be used to finance the costs of acquiring or improving land, infrastructure, facilities, or equipment if it is appropriate to spread these costs over more than one budget year. Long-term debt may also be used to fund capitalized interest, costs of issuance, required reserves, and any other financing - related costs that may be legally capitalized. Long -term debt may not be used to fund City operating costs. The final maturity of long-term debt should not exceed 40 years. The following are the types of long-term debt that may be undertaken by the City:
262

Page | 4

a) Special-Assessment Bonds. The Improvement Act of 1911 and the Improvement Bond Act of 1915 authorize the City to form assessment districts for imposing special -assessment liens on properties within the districts. Assessments on each property are calculated according to the “special benefit” the property receives from the local public improvements. Local public improvements examples include local streets, street lights, landscaping, sidewalks and sanitary sewers. The assessments are used to secure payment of bonds that amortize the local public improvement costs over a period of years. A majority of the property owners within the district must approve both the formation of the district and the issuance of the bonds. Approval occurs through submission of assessment ballots weighted according to the amount of each property’s proposed assessment.
b) Special-Tax Revenue Bonds. Under the Mello -Roos Community Facilities District Act of 1982, codified at Governmental Code sections 53311 to 53368.3 (the “Mello -Roos Act”), the City may use special -tax bonds to finance the construction or acquisition of various public improvements. The Mello -Roos Act provides an efficient means of financing certain public capital facilities and services and promotes economic development in a reas that lack sufficient infrastructure, such as infill or brownfield areas. Bonds may be issued to fund capital facilities so long as the estimated useful life of the facilities is at least five years.

These bonds must be approved by at least two -thirds of the qualified electors within the Community Facilities District unless there are fewer than 12 qualified electors, in which case the vote is by the landowners. c) Marks-Roos Bonds. Under the Marks -Roos Local Bond Pooling Act of 1985, codified at Governmen t Code sections 6500 to 6599.3 (the “Marks-Roos Act”), governmental entities, in consort with or as part of a joint powers financing authority, may use a “pooled” financing technique for a broad array of public capital improvements.
d) General Obligation Bon ds. These bonds may be issued by governmental entities that have the legal authority to levy ad valorem property taxes and other charges at whatever rate and amount is necessary to pay the debt. Under article XVI, section 18 of the California Constitution, these bonds may only be issued for the acquisition or improvement of real property such as libraries, parks and public safety facilities. Two thirds voter approval is required.
263

Page | 5

e) Tax-Allocation Bonds. Until January 2012, the City was authorized to issue tax-allocation bonds (“TABs”) that were secured by a pledge of tax-increment revenues from redevelopment project areas. Proceeds from TABs were used to revitalize blighted and economically depressed areas and promote economic growth. The City is no longer au thorized to issue new -money TABs unless the City or its related financing authorities are aware of enforceable obligations that need to be met.

Only refunding TABs are now authorized, and only the Successor Agency to the Richmond Community Redevelopment Agency may issue them.
f) Certificates of Participation and Lease -Revenue Bonds. These debt instruments are secured by a lease-leaseback arrangement between the City and another public entity. The City uses its general operating revenues (which are not expressly pledged) to pay amounts owed under the lease. The payments are in turn used to pay debt service on lease - revenue bonds issued by a joint -powers financing authority or on certificates of participation executed and delivered by a trustee. Under this type of financing, a site on which a capital project is being built is leased to a joint -powers financing authority and subsequently the site and the capital project are leased back to the City. In an alternative arrangement, a different asset is leased to the joint-powers financing authority and leased back, with the proceeds of the bonds being used for some other capital improvements (this is known as an "asset transfer" financing). Lease payments from the City are subsequently collected by the joint -powers financing authority and used to fund the debt service payments. Internally, costs of particular projects can be allocated to the budgets of one or more departments, but the City's general fund is liable to pay lease payments. Voter approval is not required because these debt instruments are not subject to the debt limit in article XVI, section 18 of the California Constitution. g) Revenue Bonds. These bonds are payable from revenue generated by a City enterprise, such as the Port, KCRT Cable Television, and Wat er Resource Recovery. Because debt service on revenue bonds is paid solely from enterprise revenues and are not secured by any pledge of tax or general fund revenues, these bonds are not subject to the debt limit in article XVI, section 18 of the Californi a Constitution. Revenue bonds are used for the improvements to the enterprise.
h) Pension Obligation Bonds. Pension Obligation Bonds are issued to finance all or part of the unfunded pension liabilities of a pension plan.

Typically, these bonds are issued at a lower rate of return than was being paid to the Pension System Administrator, and in this way, provide an economic benefit to the City.
264

Page | 6

i) State and Federal Loans or Other Similar Debt Instruments. State and federal loan proceeds are an important source of funds for capital projects in addition to bond proceeds. State Revolving Funds make low- cost loans available to local agencies to fund certain public infrastructure projects. Through these programs, various state agencies, such as the California State Wat er Resources Control Board, California Infrastructure and Economic Development Bank, and California Department of Resources Recycling and Recovery, as well as federal agencies such as the Department of Transportation and Environmental Protection Agency, offer local agencies loans to fund qualifying public infrastructure projects. Often the cost of borrowing through the loan programs is lower than the cost of issuing. Benefiting departments within the City will evaluate such programs in conjunction with the Finance Department on a case-by-case basis. City Council approval is required to apply for such loans.
j) Conduit Debt. The City may agree to provide conduit financing for specific public purposes, such as financings for affordable rental housing and qualifie d 501c3 organizations. In a conduit financing, the debt is solely repaid with non -City revenues. No City funds will be pledged to the repayment of conduit debt and no appropriation of City funds will be made in the event of a default. All conduit financings must have at least one investment grade rating from a nationally recognized rating agency or have a private placement investor committed to purchase the bonds.

2. Short-Term Debt
Short-term debt may be issued for any purpose for which long-term debt may be issued, including the payment of capitalized interest and other financing- related costs; it may also be used to address legitimate short-term cashflow requirements during a given fiscal year, so that the City may continue to fund the operating costs of pro viding necessary public services; and it may be used to bridge the gap in financing before long -term debt is issued to meet the ongoing capital needs of a project or series of projects. The City will not engage in short -term borrowing solely for the purpos e of generating investment returns (arbitrage). Short term debt usually may not exceed five years.
265

Page | 7

a) Tax and Revenue Anticipation Notes (“TRANs”). These are short -term notes used to cover cash shortfalls resulting from a mismatch between the timing of revenu es and expenditures. The City may issue TRANs when needed to meet general fund cash -flow needs in a fiscal year.

TRAN proceeds may be used and expended for any purpose, including operating expenses, capital expenditure, repayment of indebtedness and investment and reinvestment. TRAN proceeds may be invested at an unrestricted yield if TRANs are issued in an amount not to exceed the maximum anticipated cumulative cash flow deficit over 13 months, plus the lesser of either (i) a reasonable working capital res erve or (ii) 5% of the prior fiscal year's expenditures paid out of current revenues.

TRANs are secured by the property taxes and other revenues received later in the fiscal year. Voter approval is not required. b) Line of Credit. This is a contract between t he issuer and a bank that provides a source of borrowed monies to the issuer in the event that monies available to pay debt service or to purchase a demand bond are insufficient for that purpose. The City may enter into agreements with commercial banks or other financial entities for purposes of acquiring a Line of Credit. Voter approval is not required.
c) Lease-Purchase Financings. These financings may be used for the short-term financing of essential equipment or capital assets. The term of a lease purchase agreement is typically less than 10 years but may be as long as 15 years. Under this type of financing, the City and a lessor enter into a master lease agreement for the lease -purchase of equipment or capital assets up to a certain aggregate amount. The City and the lessor then enter into separate “schedules of property” or “lease schedules” for each lease purchase of equipment or capital asset, and the City Council annually budgets and appropriates an amount sufficient to pay rent for the equipment or cap ital asset under lease during that year; the failure to appropriate will result in termination of the lease - purchase agreement. Voter approval is not required.

3. Refunding Financing
The Finance Department will periodically review outstanding City Debt to identify refunding opportunities and evaluate the costs and benefits of restructuring or retiring outstanding obligations. Refunding will be considered (within federal tax-law constraints) when it will provide a net economic benefit or when it is needed to ac hieve City objectives relating to changes in covenants, call provisions, operational flexibility, tax status, the issuer, debt - service profile, etc. The City may purchase City Debt in the open market for the purpose of retiring the debt when doing so is cost effective. 266

Page | 8

a) There are two types of refunding transactions: a current refunding occurs when outstanding bonds are paid off within 90 days after the proceeds of refunding bonds are deposited into an escrow account with the escrow agent (typically the same entity as the trustee); and an advance refunding occurs when outstanding bonds are paid off more than 90 days after proceeds of refunding bonds are deposited into an escrow account with the escrow agent. Federal tax law does not currently permit tax exempt advance refunding.

b) In general, when the City undertakes a current refunding or an advance refunding for net economic benefit, the refunding should produce net present value debt service savings of at least 3%. This 3% threshold is a goal rather than a requirement, as the City may have reason to refund an issue that generates net-present value savings of less than 3% (i.e., the refunding will eliminate unduly restrictive bond covenants or achieve a favorable restructuring of debt).

4. Other Debt
There may b e special circumstances when other forms of debt are appropriate; these will be evaluated on a case by-case basis by the Finance Department. Such other forms may include, but are not limited to non - enterprise revenue bonds, bond anticipation notes, grant a nticipation notes and judgment or settlement obligation bonds

F. Integration with Planning Goals and Objectives

1. Policy Goals Related to Planning Goals and Objectives. The City is committed to long-term capital and financial planning, maintaining appropriate reserve levels and employing prudent practices in governance, management and budget administration. This Debt Policy, in conjunction with the City’s Swap Policy, Reserve Policy, Capital Improvement Plan, Five -Year Revenue and Expenditure Forecast, Investment Policy and the Cash Reserve Policy, serves as an important tool that supports the use of the City’s resources to meet its financial commitments and to maintain sound financial management practices.

The City intends to issue debt for the public purposes stated in this Debt Policy and to implement policy decisions incorporated into the City’s annual operating and capital budgets. This Debt Policy will help ensure that debt is issued and managed in a manner that protects the public interest.

267

Page | 9

2. Relationship o f Debt to Capital Improvement Plan and Budget. The City’s Capital Improvement Plan sets priorities for projects and funding while the Debt Policy provides policy direction and limitations for proposed financings undertaken to implement the Capital Improvem ent Plan. Debt issuances will be integrated with the goals of the capital improvement plan and capital budget by timing the issuance of debt to ensure that projects are available when needed in furtherance of the City’s public purposes, and that the long -term repayment obligation is sustainable from a budgetary perspective. The City will seek to issue debt in a timely manner to avoid having to make unplanned expenditures for capital improvements or equipment from the general fund.

Debt issuances for capital projects will be incorporated into the Capital Improvement Plan at the time the plan is recommended for City Council approval.

The City shall strive to fund the upkeep and maintenance of its infrastructure and facilities, due to normal wear and tear, thr ough the expenditure of available operating revenues. The City shall seek to avoid the use of debt to fund infrastructure and facilities improvements that are the result of normal wear and tear, unless a specific revenue source has been identified for this purpose.

G. Internal Control Policies
When issuing debt, in addition to complying with the terms of this Debt Policy, the City shall comply with any other applicable policies regarding initial bond disclosure, continuing disclosure, post-issuance compliance, and investment of bond proceeds.

Without limiting the foregoing, the City will periodically review the requirements of and will remain in compliance with the following:

1. Federal securities law, including any continuing disclosure undertakings entered into by the City in accordance with Securities and Exchange Commission Rule 15c2-12.

2. Any federal tax compliance requirements, including, without limitation, arbitrage and rebate compliance; The City’s investment policy as it relates to the use and investment of bond proceeds; and

3. Government Code section 8855(k) and the annual reporting requirements therein. Proceeds of debt will be held either: (a) by a third-party trustee or fiscal agent, which will disburse such proceeds to or upon order of the City with the submission of one or more written requisitions by the Finance Department; or (b) by the City, to be held and accounted for in a separate fund or account.

Timely authorizations and processing of transactions will be undertaken, and expenditures will be carefully documented by the City to ensure proceeds are utilized 268

Page | 10

for the intended use. Regular budget and schedule progress updates will be required by the Finance Department to track the status of debt-funded projects.

H. Debt Approval Procedures

1. Reviewed by City Council. All proposed long -term financing transactions for capital improvements shall be reviewed by the City Council. For matters related to the City Council approval process, "long -term financing" means financing which constitutes an obligation beyond one fiscal year.

2. Proposed transactions submitted for City Council approval should be reviewed prior to submission by the Finance Director, City Manager and City Attorney.

3. Upon approval by the Finance Director, City Manager and City Attorney, the proposed transaction shall then be presented to the full City Council.

4. Approval by the City Council. All long-term financing transactions over $10,000 should be agendized as *action* items and shall be approved and adopted by the City Council. The City Council sh all comply with all public hearing requirements applicable to the specific type of bond being approved.

I. Debt Limitations
There is no statutory restriction on the amount of Lease Revenue Bonds or Certifications of Participation that can be outstanding at a ny given time. However, it is the policy of the City of Richmond that net debt service payments funded from General Fund sources shall be no greater than 10% of current General Fund revenues. Payments on bonds that are tied to a specified revenue stream other than General Fund sources (e.g. revenue bonds, tax allocation bonds and assessment bonds) are not subject to this 10% limit. Each proposed financing will be individually assessed by the Finance Department and subject to the approval policies contained herein.

The City also issues debt funded by revenues of Business-type activities, also known as Enterprise Funds. Any debt secured by revenues of an Enterprise Fund shall maintain a coverage ratio (defined as the ratio of revenues subject to the bondholders’ pledge over aggregate debt service on bonds secured by the pledged revenues of the Enterprise Fund) that equals or exceeds the minimum coverage required by the rate covenant in the financing documents.

J. Methods of Sale
The Finance Department shall revi ew each transaction on a case -by-case basis to determine the most appropriate method of sale.
269

Page | 11

1. Competitive Sale. In a competitive sale, bids for the purchase of the bonds are opened at a specified place and time and are awarded to the underwriter (or syndicate) whose conforming bid represents the lowest true interest cost (TIC) to the City. The City may take bids in person, by facsimile, or by electronic means.
a) Bond sales shall be advertised as broadly as possible, including advertising in an industry newspaper. The financial advisors for each transaction shall undertake to provide information on the bonds to prospective bidders and investors as relevant.
b) Terms of the bonds shall be amendable as late as possible and ideally until at least 1:00 p.m. Pacific Time the day prior to the day bids are to be received.
c) Bond sales shall be cancelable at any time prior to the time bids are to be received.
d) Upon award to the bidder whose conforming bid represents the lowest true interest cost (TIC), the City may restructure the bonds in accordance with the Official Notice of Sale.
(1) The City shall reserve the unfettered right to reject all bids or waive bid irregularities.
(2) The Finance Department shall award any bonds sold via competitive sale.

2. Negotiated Sale. In a negotiated sale, the City chooses the initial buyer of the bonds in advance of the sale date. The initial buyer is usually an investment banking firm, or a syndicate of investment banking firms interested in reoffering the bonds to investors through an underwriting process. This type of sale allows the City to discuss different financing techniques with the underwriter in advance of the sale date, and is particularly appropriate for complex bond structures, difficult credit situations (such as non -rated assessment or Mello- Roos Bonds, and refundings).

3. Private Placement. Also referred to as a direct placement, private placement is a variation of a negotiated sale. Instead of retaining the services of an investment banking firm to underwrite the bonds, the City will sel l the bonds directly to a limited number of investors. The City may use a placement agent to assist it in identifying likely investors.

K. Debt Structuring Practices

1. Standard Terms. The following terms shall be applied to the City's transactions as appropriate. Individual terms may change as dictated by the marketplace or the unique qualities of the transaction.

270

Page | 12

2. All Bonds
a) Term - 30 years is standard, but up to 35 years may be acceptable, depending on cash flow assumptions, construction timeline and remaining useful life of the asset being financed.
b) Maximum Yield – as set by State law.
c) Maximum Premium - case by case, as re commended by the City's Municipal Advisor.
d) Maximum Discount - case by case, as recommended by the City's Municipal Advisor.
e) Payment Dates - fixed after considering cash flow needs, the Finance Department will determine the occurrence of all new debt serv ice payments.
f) Coupons - fixed rate or variable rate.
g) Call Provisions - shortest possible optional call consistent with optimal pricing.
h) Structure of Debt - preferred level debt service but shall be determined on a case-by-case basis, at the discretion of the Finance Department i) Debt Service Reserve – case by case, as recommended by the City’s Municipal Advisor and/or the underwriter.
j) Capitalized Interest – may be sized through substantial completion plus a minimum of six months unless other assets are available to be pledged or otherwise limited under Federal Tax Law. Liquidated damages of construction contract must include amount of daily debt service. k) Net Funding - the project and capitalized interest funds may be net funded if investments are secured upon issuance of bonds. l) Reimbursement Resolution - must be adopted by the City Council if the project hard costs are advanced by the General Fund prior to the bond sale.
m) Good Faith Deposit - determined on a case -by-case basis by the Finance Department.

3. Variable Rate Bonds - The City may elect to issue any bonds as variable rate bonds, which are broadly defined to mean daily, weekly, monthly, semi-annual or auction rate bonds.
a) Purpose - reduction of net borrowing cost; match of assets and liabilities. b) Maximum Portfolio Allocation - no more than 20% of the City's outstanding debt portfolio shall be in unhedged short -term paper consistent with policies for underlying debt types.
c) Term - consistent with policies for underlying debt types. d) Maximum Yield – as set by State Law.
271

Page | 13

e) Monitoring - the Finance Department shall monitor all variable rate bonds on a monthly basis and shall determine, from time to time, whether to change modes and/or replace a broker/dealer or remarketing agent.
f) Budgeting Debt Service - the Finance Department will recommend that annual debt service on any variable rate bonds be budgeted at 1.5 times SIFMA Municipal Swap Index (or another relevant index or successor index to SIFMA) as of the last Wednesday in February in the year in which the budget is being prepared. The Finance Department will also include in the budget any ongoing fees associated with floating rate bonds.
g) Liquidity - a liquidity facility shall be obtained, either externally or internally, for all short-term indebtedness containing a put feature. h) Mode - all bonds issued as variable rate bonds shall be issued as "multi- modal" bonds.
i) Good Faith Deposit - determined on a case -by-case basis by the Finance Department.

L. Derivatives (Swap) Policy
Derivative products, or swaps, are financial instruments whose value depends on (is derived from) the value of one or more separate assets or indices of asset values. As used in public finance, derivatives may take the form of interest rate swaps, futures and options contract, options on swaps and other hedging mechanisms such as rate locks. GFOA recommends state and local governments to exercise caution in the use of derivative instruments. The City no longer has swaps in its debt portfolio. To reduce risk exposure associated with swaps, the City adopted a guiding fiscal policy on April 20, 2021, which states that the City will no longer be permitted to use interest rate swaps when issuing debt.

M. Permitted Investments
All investments of bond proceeds shall adhere to the City's Investment Policy, approved annually by the City Council. With the exception of guaranteed investment contracts, investments shall not allow security types or credit standards less than those of the City's Investment Policy.
272

Page | 14

1. City of Richmond Investment Policy:

2. Investment Agreements
a) Purpose - a) maximize interest earnings, thereby reducing net borrowing cost, and b) match of assets and liabilities.
b) Counterparty - minimum rating of AA- from S&P or Aa3 from Moody's. c) Mandatory Termination - limited to credit-related events and nonpayment.
d) Cure Provisions - timelines on City's obligations to cure must provide for appropriate legislative action.
e) City's Priority of Payment - termination payments - subordinate to related debt payments.
f) Procurement/Award - award based on best bid as defined in bid form after limited negotiation of terms.
g) Term - not in excess of the term of the bonds.

N. Professional Assistance

1. Municipal Advisors. The City shall utilize the services of independent municipal advisor(s) on debt financing when deemed prudent by the Finance Director.

All such municipal advisors should be registered with the Securities and Exchange Commission and hold the Municipal Securities Rulemaking Board Series 50 designation. The City may utilize an RFP -selected pool of such municipal advisors to mitigate time constraints and reduce overhead costs of the City in procuring such services. Services shall be documented by contract and compensation shall be capped.

2. Underwriters. In the case of a competitive sale, the City will aw ard the bonds to the underwriting firm whose bid results in the lowest True Interest Cost. In the case of a negotiated sale, the Finance Director will determine the best method of selection, taking into consideration all factors involved in each particular sale, and shall recommend the best qualified underwriter to the City Council.

3. Bond Counsel. The Finance Department, in consultation with the City Attorney's Office, shall recommend the bond counsel for each transaction to the City Council.

4. Broker-Dealers and Remarketing Agents. For all variable rate bonds, the Finance Director shall recommend broker -dealers or remarketing agents for each transaction to the City Council. The City shall monitor performance on a monthly basis. The City may replace a remarketing agent or broker-dealer with notice at any time.

273

Page | 15

5. Disclosure Counsel. The Finance Department, in consultation with the City Attorney’s Office, shall recommend the disclosure counsel for each transaction to the City Council.

6. Trustees. Selected for each transaction by RFP, unless use of current trustee (particularly for parity obligations) is deemed practical by the Finance Director.

The Trustee (or applicable holding company) shall have a combined capital and surplus of at least $500,000,000 and be sub ject to supervision or examination by federal or state authority.

7. Rebate Consultant. Selected by RFP for all bonds for a set term with 1 -year extensions.

8. Financial Printer. Selected for each issue by RFP.

9. Auction Agents. Selected for each relevant issue by RFP issued by the Finance Department or its agent and subject to negotiation of terms.

10. Placement Agents. Selected for each relevant issue by RFP issued by the Finance Department or its agent and subject to negotiation of terms.

11. Liquidity Providers. Selected for each relevant issue by RFP issued by the Finance Department or its agent and subject to negotiation of terms.

12. Investment Agreement Counterparties. Selected by bid in compliance with Federal Tax Law Requirements in accordance with relevant bond documents and the City's Investment Policy.
a) In general, uncollateralized Investment Agreements shall be executed with counterparties rated at least AAA with collateral required upon downgrade below AAA.
b) Repurchase Agreements or Forward Delivery Agreements shall be executed with counterparties rated at least AA (by at least one of the major rating agencies) with downgrade provisions requiring assignment or collateral should the rating fall below A- or A3 by Standard and Poor's or Moody's Investor Services respectively.

O. Ongoing Debt Administration

1. Continuing Disclosure. It is the goal of the Finance Department to be as transparent as possible and comply with its obligations under continuing disclosure undertakings executed by the City in connection with its outstanding bonds.

274

Page | 16

2. Annual Report. The City will covenant to provide its annual disclosure report no later than 270 days following the end of the fiscal year. However, the City will use its best efforts to issue the Annual Report as soon as practical following the issuance of the City’s Annual Comprehensive Financial Report (ACFR).

The City shall use its best efforts to issue the Annual Report electronically on the Electronic Municipal Market Access (EMMA) sy stem or any other successor thereto as designated by the United States Securities and Exchange Commission (SEC) or the Municipal Securities Rulemaking Board (MSRB), and to post the Annual Report on its web site. The Annual Report will also be on file with the City Clerk.

3. Material Event. The City will issue a notice of occurrence of a material event (as defined in Appendix C) in accordance with the provisions of SEC Rule 15c2-12. Prior to the issuance of any material event, the Finance Director will consult with the Mayor, City Manager, City Attorney and policymakers or outside professionals as appropriate, to discuss the materiality of any event and the process for accurate, timely and appropriate disclosure to the marketplace.

4. Post-Issuance Compliance on Build America Bonds. The City will adhere to the instructions contained in Appendix B regarding required post -issuance activities when Build America Bonds have been issued. Upon recommendation of the Finance Department, the City may retain a firm to assist it in maintaining compliance with all continuing disclosure requirements.

5. Arbitrage Rebate Compliance. The City shall calculate arbitrage annually in each year that the related construction fund (or equivalent) has had an outstanding balance. Thereafter, the City shall calculate arbitrage on the fifth anniversary of the bond issuance in accordance with IRS recommended practices.

6. Insurance Certifications. The City (through its Risk Manager) shall provide annual insurance certification to the Trustee and B ond Insurer, if required under the legal documents for each issue.

7. Ratings. The policy of the Finance Department is to secure underlying ratings on all newly issued obligations from at least one national rating agency. a) Citywide Ratings Notification. Any c hanges in ratings will be promptly noticed to the City Council.
b) Annual Meeting. The Finance Department shall meet with each rating agency that rates City debt issues at least annually unless such meeting is declined by the respective rating agency.
c) Annual Reporting. The Finance Department shall ensure prompt delivery to each of the rating agencies of the following public documents:
(1) Annual Comprehensive Financial Reports (ACFR’s)
275

Page | 17

(2) Adopted budgets
(3) Other Reporting Certificates of Substantial Completion. On projects financed with long-term obligations Certificates of Substantial Completion shall be delivered to the rating agencies and Bond Insurer, as relevant.

8. Voluntary Disclosures. The Finance Director may determine to file voluntary disclosure or information that is not required under any continuing disclosure undertaking. The City shall have no obligation to update any voluntary disclosure or information.

9. Record Retention. At a minimum, the following documentation shall be retained for the term of each issuance of bonds, including any refunding bonds, plus five years, or longer if contemplated by a tax certificate for a specific issuance of bonds.
a) Continuing disclosure undertaking.
b) Annual Reports, including any EMMA transmittal letters and filing receipts.
c) Material Event Notices, including any EMMA transmittal letters and filing receipts.
d) CDIAC transmittal letters and filing receipts, including those related to filing of Annual Debt Transaction Reports (ADTRs), pursuant to Senate Bill 1029 (Chapter 207, Statutes of 2016).
e) Rating Agency reports.
f) Such other information as the Finance Director determines necessary or useful in accordance with the continuing disclosure undertakings.

276

Page | 1

POLICY: Grants Management
ESTABLISHED: September 20, 2022
RESOLUTION NO.: NO. 128-22; DATE: September 20, 2022

I. Grant Management Policy
A. Overview
The City of Richmond continues its practice of taking advantage of granting opportunities to support operations, programs, and capital improvement projects.

Major sources of grant awards are federal, state, local agencies, and private organizations. A grant’s scope is determined by the poli cy goals of the grantor, and the grantee is obligated to provide deliverables based on the terms and conditions of the grant. Grants differ based on the funding source, scope of work, requirements, and timelines. This policy provides a general guidance to managing grants which may not be pertinent to manage all grants awarded to the City.

B. Goal
The purpose of the Grants Management Policy is to develop, implement, and maintain meaningful grant oversight and coordination for the City Council thereby increasing grant-related revenue, limiting the City Council’s exposure to grant-related legal liability, and improving the efficiency and impact of programs and services funded through grants.

C. Pre-Application Evaluation
City staff will continuously identify grants in all functional areas in general but specifically in funding capital projects. City staff must review grant requirements to validate the feasibility of undertaking the responsibility of grant deliverables and the alignment of the scope with the City’s and the community’s mission before applying, accepting, and committing to any grant opportunity.

1. Short Term Revenues vs. Long Term Costs
Special attention must be paid to evaluate if a grant opportunity is viable to the City and that one time or short-term grant revenues are not adding to the fiscal burden of unprecedented permanent or long -term expenditures. For example, a grant funded project may require the City to hire additional staff, in this situation it is necessary to review the grant to assure that the City is clear about the requirement of additional staff, temporary or permanent. If permanent staff is required, the long-term labor cost must be evaluated and analyzed before applying for the grant. The viability consideration is not 277

Page | 2

limited to labor cost; it must be evaluated for all types of costs such as ongoing operations and maintenance.

2. Required Resources
A grant opportunity must be evaluated based on required resources versus available resources in the City before moving forward with the applic ation process. This applies to resources such as: staff support, local funding match, or in-kind match.
a) If a funding match is required by a grantor, the funding source must be approved by the City Manager in writing before submitting the grant application.

3. Indirect Costs
During the grant application process the City staff shall include the cost of administering the grant program when possible and wherever it is allowable by the grantor in the grant terms and conditions. For example, some grantors may have a fixed percentage for indirect costs that can be reimbursed.

4. Cost Benefits Analysis
The overall cost benefit analysis is required to confirm that the grant is in alignment with the City’s general mission and strategic goals and is in the best interest of the residents of the City.

5. Public Private Partnership
In a situation where the City is working in partnership with another organization (local or public) the solicitation process must be transparent.

City Council approval is required prior to submitting the grant application. If the pre -approval step is missed in such partnership, there must be an explanation provided to the City Council upon the grant acceptance (see section 4.b.).

D. Grant Cycle

1. Grant Application
Department staff is required to follow the gr antors’ determined application processes. Department staff seeking and administering the grant are responsible for compiling the grant application, and the Finance department shall provide certain information that is required to be submitted with the proposal.
278

Page | 3

a) If a local funding match is required for a grant, refer to the section 3.b. of this document.
b) The Finance department must be notified upon submission of a grant application within ten (10) business days.

2. Grant Award
Grant award is the notification tha t is provided to the applicant upon the acceptance of the grant application. The notification must be in writing and/or it can also be in a grant agreement format.

3. Council Approval
Each grant must be formally accepted by the City Council before moving to the execution phase. Department staff are responsible for preparing the City Council agenda item. The recommended action must include the words “accept and appropriate” in the agenda report to ensure budget appropriation for execution. Some grants may requi re City Council authorization before a grant application is submitted and, in that case, recommended action may include the language about the acceptance and appropriation of funds upon grant award.

4. Grant Set-Up
Department staff is responsible for submitti ng grant documents to the Finance department within ten (10) business days to be set up in the City’s financial system, which may require creating special account strings to fully track the related activity. Required documents are:
a) Grant Award Letter/Agreement
b) Approved Council Minutes, and/or Resolutions
c) Completed Grant Information Form (see attached form) d) Appropriate Grant Funds

5. Grant Execution
It is the Department staff’s responsibility to deliver agreed upon deliverables, generate status reports, exercise careful examination of the costs being incurred, and file for reimbursements from grantor in a timely fashion. The Finance department assists as needed in terms of setting up account strings, budgets, and preparing monthly reports etc. Department staff shall maintain a comprehensive project file for the record and send all documents to [email protected] for record keeping in the financial system.

6. Grant Compliance
It is the Department staff’s responsibility to meet all grant requirements and take appropriate steps to ensure grant compliance by adhering to all applicable Federal, State, and lo cal regulations. This includes collecting all necessary documentation from the pre -award phase through closeout, 279

Page | 4

ensuring appropriate procurement steps are taken for any subawards, compliance with sam.gov debarment and suspension checks, and all other award requirements.

7. Reimbursements/Reporting
Department staff shall submit reimbursements and other periodic reports in a timely manner depending upon the grantor specified timeline. The majority of grants are on a reimbursement basis. Therefore, the City covers the expenditures from the cash reserve before the grant funds are reimbursed, which limits the City’s ability to fund other operations and city services. It is crucial that the reimbursement requests are submitted to the grantor in a timely manner t o alleviate undue burden from the City’s cash reserves.

Department staff shall forward all the filed reimbursement requests to [email protected] at the time of submission to the grantor.

8. Close-Out
Department staff are responsible for following the s pecified close out procedure provided by the grantor. Grant funded project files and records are required to be maintained for five years or the retention limit the grantor has provided which may exceed five years. Final close out reports shall be sent to the Finance department within ten (10) business days.

E. Record Keeping
Department staff must maintain all documents (purchasing, bidding, and communications with the grantor) even after the grant completion. Department staff shall also forward all documents to the Finance department ([email protected]) for saving and retention in the financial system (currently Project Master in Tyler MUNIS) to ensure city -wide availability as needed. This is primarily for audit purposes.

F. Audits
Appropriate audit fac ilitator is determined depending on the nature of the audit including the Annual Single Audit. The Finance department facilitates all financial audits and may reach out to Department staff for assistance if warranted. 280

Page | 5

G. Roles and Responsibilities

1. City Council
a) Provides policy guidance to City staff to seek grants in certain categories and authorizes staff to apply for grants, and upon grant award, accepts and appropriates funds.

2. City Manager’s Office
a) Executes grant agreements and directs/assigns staff to seek and execute grants.

3. Finance Department
a) Provides guidance to Department staff about tracking costs appropriately.
b) Sets up account strings in the financial system.
c) Assists in day-to-day financial operations.

d) Generates periodic reports stating sources and uses of the grant funds. e) Maintains project master in the financial system.
f) Maintains the City’s general information regarding tax ID and tax-exempt status letter.
g) Maintains the City’s accounts with federal grant portals such as www.grant.gov, www.sam.gov, etc.
h) Maintains the City’s CAGE code and Unique Identifier Number, formerly known as DUNS number.
i) Generates Schedule of Expenditures of Federal Awards (SEFA) annually after fiscal close.
j) Facilitates financial audits.
k) Provides training on grants managemen t and financial systems to improve the grants program.

281

Page | 6

4. Department Staff
a) Applies for the grant.
b) Takes awarded grant to the City Council for approval (Council action must read “Accept and appropriate funds…”).
c) Prepares budget amendments based on the City Council approval. d) Executes the grant.
e) Delivers the grant deliverables under the terms and conditions. f) Monitors costs and makes sure the costs are allowable and within the grant award.
g) Communicates and reports to the grantor/s regarding status, periodic , and close out reports, and any other communication regarding modifications to the scope or changes in timeline.
h) Follows the procurement and other City policies in the process of issuing contracts. This includes ensuring all contract provisions outlined on pages 24 -25 of City of Richmond’s Purchasing Policy (AP 522) are followed and passed down as applicable to all subrecipients and contractors. Note that suspension and debarment check is required and the department must “Verify that a vendor is not debar red, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Confirm and document that vendors are not on the federal government’s Excluded Party list found at www.sam.gov.” This verification must occur prior to the execution of subawards. For more information, please refer to the Finance Department’s Sam.gov Debarment Check Guidelines document. i) Maintains complete project file during and after beyond project completion.
j) Assists finance/audit coordinator as needed during audit/s.

282

Page | 7

283
Page | 1
POLICY: Investment Policy
ESTABLISHED: June 24, 2025
RESOLUTION NO.: 82-25; DATE: June 24, 2025

I. Investment Policy

A. Mission Statement
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.

B. Scope
This investment policy covers the City's pooled funds which include the 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 investment of bond and note proceeds will be in accordance with policy contained in the relevant bond documents approved by the City Council at the time of the issuance of the debt. To the extent not inconsistent with such bond documents, bond or note proceeds and in acc ordance with Government Code, sections 53601(I) and 5922(d), proceeds may be invested in (i) Guaranteed Investment Contracts or other debt issuance proceeds with an investment provider rated in a category of "A" or better and with downgrade protection or (ii) Investment instruments described herein.

The investment policy for the Police and Fire Pension Fund and the General Pension Fund are contained in the City Charter.

C. Objectives
The City's investment activities are designed to accurately monitor and forecast expenditures and revenues to ensure funds are always available when needed. The portfolio will be managed to take advantage of changing economic conditions that can aid in increasing the return on the City's portfolio.

The primary objectives of the investment activities, in priority order shall be:

1. Safety. Safety of principle is the foremost objective of the investment program. Investments of the City shall be undertaken in a manner that seeks to ensure preservation of capital in the portfolio. To attain this objective, the City will diversify its investments by investing funds among a variety of securities offering independent returns.

2. Liquidity. An adequate percentage of the portfolio will remain sufficiently liquid in short-term securities to enable the City to meet its cash flow requirements. Since all cost requirements cannot be anticipated, investment in securities with active secon dary or resale 284
Page | 2
markets is highly recommended. Emphasis should be on marketable securities with low sensitivity market risks.

3. Yield. The investment portfolio of the City should be designed with the objective of attaining a market rate of return, also known as the yield, throughout budgetary and economic cycles. Yield should be considered only after safety and liquidity objectives have been met and measured against cash flow needs.

D. Delegation of Authority
Management responsibility for the investment program is hereby delegated to the Director of Finance, acting in their capacity as Treasurer, or the Deputy Director of Finance as designee , or the Accounting Manager as designee , who shall be responsible for all transactions undertaken and shall monitor and review all investments for consistency with this investment policy. The Director of Finance or their designee(s) shall establish a system of controls to regulate the activities of subordinate officials, and their procedures in the absence of the Director of Finance.

E. Prudence
The City holds to the “prudent investor” standard as set forth in Section 53600.3 of the California Government Code, in that all investments placed shall be made with a degree of judgment and care . The prudent investor standard states, “ [w]hen investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.”

Investment officers acting in accordance with written procedures and the investment policy and exercising due diligence shall be relieved of personal responsibility for an individual security’s credit risk or market price change s, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments.

F. Ethics and Conflict of Interest
All participants in the investment process shall act as custodians of the public trust.

Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Thus, employees and officials involved in the investment process shall refrain from personal business activity that could create a conflict of interest or the appearance of a conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions.

Employees and investment officials shall disclose to the City Clerk’s Office any material interests in financial institutions with which they conduct business, and they shall further disclose any large personal financial/investment positions that 285
Page | 3
could be related to the performance of the investment portfolio. Employees and officers shall refrain from undertaking any personal investment transactions with the same individual with whom business is conducted on behalf of the City. All investment personnel shall comply with the reporting requirements of the Political Reform Act, including the annual filing of their Statement of Economic Interest.

G. Authorized Financial Institutions, Depositories and Broker/Dealers The Director of Finance will obtain financ ial information from qualified institutions to determine if the institution markets in securities appropriate to the City’s needs, can assign qualified sales representatives, and can provide written agreement to abide by the conditions set forth in the City’s Investment Policy.

The City may engage the services of investment advisory firms to assist in the management of the portfolio and investment advisors may utilize their own list of approved broker/dealers. Investment advisors should be registered with the US Securities and Exchange Commission (SEC). The advisor shall maintain a list of authorized broker-dealers and complete the appropriate due diligence required by the SEC. The list of approved firms maintained by the investment advisor shall be provided to the City on an annual basis or upon request. The investment advisor will certify that they have read and are willing to comply with the City’s investment policy.

If an external investment advisor is not u sed in the process of recommending a particular transaction in the City’s portfolio, any authorized broker/dealer from whom a competitive bid is obtained for the transaction will meet the following criteria and provide the required information to the Director of Finance : proof of Financial Industry Regulatory Authority (FINRA) certification, proof of state registration, audited financial statements, a completed broker/dealer questionnaire, and certification of having read the City’s investment policy. Each firm will be evaluated and selected based on firm and staff qualifications, trading product capacity, research capabilities, compliance and due diligence, presentation, and credit worthiness.

In accordance with Government Code Section 53601.5, institutio ns eligible to transact investment business with the City include:
• Institutions licensed by the state as a broker-dealer. • Institutions that are members of a federally regulated securities exchange. • Primary government dealers as designated by the Federal Reserve Bank and non-primary government dealers.

• Nationally or state-chartered banks.
• The Federal Reserve Bank.
• Direct issuers of securities eligible for purchase.

The Director of Finance will maintain a list of broker/dealers authorized to provide investment services. These may include "primary" dealers or "regional" dealers 286
Page | 4
that qualify under Securities and Exchange Commission Rule 15c3-1 (uniform net capital rule). An eligible designatio n does not guarantee that the City will do business with the firm or institution.

An annual review of the financial condition and registrations of brokers/dealers on the City’s approved list will be conducted by the Director of Finance. The bidding process shall be conducted every four (4) years. The current audited financial statement is required to be on file for each financial institution and broker/dealer in which the City invests.

H. Authorized Investments and Maximum Maturities
To the extent possible, the City will attempt to match its investments with anticipated cash flow requirements. The City will not invest in securities maturing more than five (5) years from the date of trade settlement, unless the City Council has by resolution granted authority to make such an investment either specifically or as a part of an investment program it has approved no less than three months prior to the investment or is otherwise stated in this policy. Forward settlement on new issues may not exceed 45 days from time of investment.

The City’s investments are governed by Government Code Sections 53600, et seq.

Within the investments permitted by the Government Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this policy and the Government Code, the more restrictive parameters will take precedence. Percentage holding limits listed in this section apply at the time the security is purchased.

An appropriate risk level determined by the Government Code must be maintained by primarily purchasing securities that are of high quality, liquid, and marketable.

The portfolio must be diversified by security type and institution to avoid incurring unreasonable and avoidable risks rega rding specific security types or individual issuers.

1. Government Bonds and Notes – The City may invest up to 100% of its portfolio in Government Bonds and Notes. The maximum maturity for such investments shall not exceed five (5) years. Maturities beyond this limit may be permitted only upon prior approval by the City Council.

a) United States Treasury Notes, B onds, Bills, or certificates of indebtedness or those for which the full faith and credit of the United States are pledged for the payment of principal and interest; and

b) Treasury notes or bonds of the State of California; and

c) Bonds, Notes, Warrants or oth er evidence of indebtedness of the State of California, or any local agency within California with a minimum rating threshold of an “A”.

2. Bonds and Notes of Federally Sponsored Agencies - Maximum of 287
Page | 5
100% invested no longer than five (5) years, such as the Federal Farm Credit Bank, Federal Home Loan Bank, Federal National Mortgage Association, Government National Mortgage Association, or any other instruments issued by a federal agency, or a United States government sponsored enterprise. Maturities beyond this limit may be permitted only upon prior approval by the City Council.

3. Bankers’ Acceptance - Bills of exchange or time drafts drawn on and accepted by a commercial bank insured by the FDIC, with a rating category of at least A -1 or the equivalent by a nationally recognized statistical rating organization (NRSRO). Purchases in this category may not exceed 180 days maturity or 40% of the City’s investment portfolio as provided by Government Code Section 53601(f)g. Purchases may not exceed 5% in any single issuer.

4. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to Califor nia. Such securities must be rated in a rating category of "A" or better by a nationally recognized rating service.

Purchases may not exceed 30% of the total portfolio. Purchases in any single issuer may not exceed 5% of the portfolio. The maximum maturity for such investments shall not exceed five (5) years. Maturities beyond this limit may be permitted only upon prior approval by the City Council.

5. Negotiable Certificates of Deposit issued by a Federal and State chartered bank or a Federal and State Savings and Loan Association or by any state licensed branch of a foreign bank. Purchases are not to exceed 30% of total portfolio. Purchases may not exceed 5% in any single issuer.

6. Repurchase Agreements Repurchase agreements are agreements between the local agency and seller for the local agency to purchase government securities to be resold back to the seller at a specific date and for a specific amount and are authorized by Government Code Section 53601 (j). Although the legal maximum maturity on these investments is 360 days, repurchase agreements are generally short - term investments varying from one day to two weeks. Investments in repurchase agreements must be collateralized, and collateral required for repurchase agreements is limited to Treasury and Agency securities. In order to anticipate market changes and provide a level of security for all funds, the required collateralization level is 102% of the market value of principal and accrued interest.

7. Local Agency Investment Fund (LAIF) - maximum of $75 million The City may invest in the Local Agency Investment Fund (LAIF) established 288
Page | 6
by the State Treasurer for the benefit of local agencies up to the maximum permitted by State law but not to exceed the aggregate limit set by the City of 100%. LAIF’s investments in instruments prohibited by or not specified in the City’s policy do not exclude the investment in LAIF itself from the City’s list of allowable investments.

8. Joint Powers Authority
Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

(a) The adviser is registered or exempt from registration with the Securities and Exchange Commission.

(b) The adviser has not less than five (5) years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive.

9. Medium Term Notes with a maximum of five (5) years maturity issued by corporations organized and operating within the United States. Such securities must be rated in a rating category of "A" or better by a nationally recognized rating service. Purchases may not exceed 30% of the total portfolio. Purchases in any single issuer may not exceed 5% of the portfolio.

10. Commercial Paper of "prime quality" of the highest ranking or of the highest letter and numerical rating as provided by Moody's Investor Service, Inc., or Standard & Poor's Corporation. Eligible paper is further limited to issuing corporations that are organized and operating within the United States and have total assets in excess of five hundred million dollars ($500,000,000) and having an "A" or higher rating for the issuer's debt, other than commercial paper, if any, as provided for by Moody's Investors Service, Inc., or Standard & Poor's. Eligible commercial paper may not exceed 397 days maturity nor represent more than 10 percent of the outstanding paper of an i ssuing corporation. Purchases of commercial paper may not exceed 25 % of the City’s surplus money that may be invested pursuant to this section.

11. Mutual Funds and Money Market Mutual Funds are eligible for investment if the companies providing the mutual funds invest only in instruments authorized by Government Code, Sections 53601 and 53630.

To be an eligible money market investment under this section:

289
Page | 7
 The money market shall have attained the highest ranking, or the highest letter and numerical rating provided by not less than two nationally recognized statistical rating organizations and shall maintain these ratings for the duration of the investment.

 Retain an investment advisor registered with the Securities and Exchange Commission (SEC) with not less than five (5) years' experience investing in securities and obligations.

 The fund shall have a minimum of $500 million to total asset size of portfolio at time of investment and should not drop below this threshold.

 The purchase price of the share of beneficial interest shall not include any commission that these companies charge.

 Purchases in one mutual fund shall not exceed 10 percent of the total portfolio.

 Purchases shall not exceed 20 percent of the total portfolio.

12. Mortgage-Backed Passthrough /Asset-Backed Securities which are rated “AA” or higher and have a maximum remaining maturity not to exceed five (5) years. No more than 20 percent of the City’s surplus funds shall be invested pursuant to this section.

Agency Mortgage -Backed Securities issued or guaranteed by the U.S Government or U.S. Agencies shall have a maximum maturity of five (5) years. Maturities beyond this limit may be permitted only upon prior approval by the City Council. Percentage of the portfolio, issuer, and ratings are not applicable.

13. Supranational Securities that are United States dollar denominated senior unsecured unsubordi nated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development (IBRD), International Finance Corporation (IFC), or Inter - American Development Bank (IADB), with a maximum remaining maturity of five (5) years or less, and eligible for purchase and sale within the United States. Investments must be rated “AA” or its equivalent or better and shall not exceed 30 percent of the City’s surplus funds.

14. Collateralized Bank Deposits As authorized in Government Code Section 53601(n), notes, bonds, or other obligations that are at all times secured by a valid first priority security interest in securities of the types listed by Section 53651 as eligible securities for the purpose of se curing local agency deposits having a market value at least equal to that required by Section 53652 for the purpose of securing local agency deposits.
290
Page | 8

15. Public Bank Obligations As authorized in Government Code Section 53601(r), 53635(c), and 57603 local agencies may invest in commercial paper, debt securities or other obligations of a public bank. The maximum legal final maturity is limited to five (5) years.

Summary of Maximum Percentage Limitations of Investments, by Investment Type

The following summary of maximum percentage limits, by instrument, is established for the City's total pooled fund's portfolio:

Investment Type: Percentage
U.S. Treasury Obligations (Bills, Notes,
and Bonds) 0 to 100%
U.S. Government Agency Obligations 0 to 100%
Bankers’ Acceptance 0 to 40%
Muni Bonds Issued by other 49 States
Negotiable Certificates of Deposit Local
0 to 30%
0 to 30%
Repurchase Agreements 0 to 100%
Local Agency Investment Fund (LAIF) 0 to 100% (Max $75 million) Joint Powers Authority 0 to 100%
Medium Term Notes 0 to 30%
Commercial Paper (Non-Pooled) 0 to 25%
Mutual Funds & Money Market Mutual
Funds

0 to 20%

Mortgage Backed & Asset Backed
Securities 0 to 20%
Supranational Obligations 0 to 30%
Collateralized Bank Deposits 0 to 100%
Public Bank Obligations 0 to 100%

I. Reporting
A monthly transaction report will be submitted by the Treasurer to the City Council in accordance with Government Code Section 53607. A monthly Investment Report will be submitted with the monthly transaction report. The following elements will be part of the investment report:
291
Page | 9

1. Type of investment

2. Institution/Issuer

3. Date of maturity

4. Cost of security (par amount) and dollar amount in all securities

5. Description of the funds, investments and programs managed by contracts

6. Current market value of securities

7. Rate of return

8. Statement of compliance to meet pool expenditure requirements for the next six months

9. If, in any case, pool expenditures are not met, an explanation of why sufficient monies will not be available.

J. Review of the Investment Portfolio
The securities held by the City must be in compliance with Section H - Authorized and Suitable Investments at the time of purchase. Because some securitie s may not comply with Section H - Authorized and Suitable Investments subsequent to the date of purchase, The Director of Finance must periodically, but no less than quarterly, review the portfolio to identify investments that do not comply with this inves tment policy and establish protocols for reporting major and critical incidences of noncompliance to the City Council. A report to City Council detailing the issue and recommendations to bring the portfolio back into compliance should be made.

K. Investment Pools
Government sponsored investment pools (Pools) are permitted under California Government Code Section 53601 et seq. and an excellent short -term investment option for cash management facilities. These pools can provide safety, liquidity and yield in a single diversified investment. However, thoughtful investigation and due diligence are required both initially at the time of purchase and ongoing analysis to determine that the investment pool is being managed in a manner consistent with the objectives of the Policy.

Best efforts will be made to acquire the following information:

1. A description of eligible investment securities, and a written statement of investment policy and objectives.

2. A description of interest calculations and how it is distributed, and how gains and losses are treated.

3. A description of how the securities are safeguarded (including the settlement processes), and how often the securities are priced and the program audited.
292
Page | 10

4. A description of who may invest in the program, how often, what size deposit and withdrawal are allowed.

5. A schedule for receiving statements and portfolio listings.

6. Are reserves, retained earnings, etc. utilized by the pool/fund?

7. A fee schedule, and when and how is it assessed.

8. Is the pool/fund eligible for bond proceeds and/or will it accept such proceeds?

L. Collateralization
Collateral for Certificates of Deposit (CD) and Negotiated Certificates of Deposit (NCD) must comply with Government Code 53601, Chapter 4, Bank Deposit law Section 16500 et seq. and the Savings and Loan and Credit Union Deposit Law Government Code Section 16600 et seq. In addition, if the CD is not FDIC insured or goes over the FDIC $250,000 limit, collateral is required to equal 100 percent of the principal of either U.S. Treasury securities or Federal Agency securities. The collateral level for Repurchase (and reverse repurchase) Agreements is 102 % for reverse repurchase agreements of principal and accrued interest.

Collateral will always be held by an independent third party with whom the City has a current custodial agreement. Clearly marked evidence of ownership (safekeeping receipt) must be supplied to the City and retained. The right of collateral substitution is granted, within the parameters and constraints of the Policy.

M. Safekeeping and Custody
Securities purchased from broker/dealers shall be held in third party safekeeping by the trust department of the City's bank or other designated third party, in the City's name and control. The basic premise underlying the City's investment philosophy is and will continue to be to ensure that money is always safe and available when needed. All trades executed by a dealer will settle delivery vs. payment (DVP) through the City's safekeeping agent. Securities held in custody for the City shall be independently audited on an annual basis to verify investment holdings.

N. Diversification and Risk Tolerance
Credit risk is the risk that a security or a portfolio will lose some or all its value due to a real or perceived change in the ability of the issuer to repay its debt. The City will mitigate credit risk by adopting the following strategies:
• The diversification requirements included in the “Authorized Investments” section of this policy are designed to mitigate credit risk in the portfolio. • No more than 5% of the total portfolio may be deposited with or invested in securities issued by any single issuer unless otherwise specified in this policy.
• The City may elect to sell a security before its maturity and record a capital 293
Page | 11
gain or loss in order to manage the quality, liquidity or yield of the portfolio in response to market conditions or City’s risk preferences. • If a security owned by the City is downgraded to a level bel ow the requirements of this policy, making the security ineligible for additional purchases, the following steps will be taken:
• Any actions taken related to the downgrade by the investment adviser will be communicated to the Treasury Committee in a timely manner. • If a decision is made to retain the security, the credit situation will be monitored and reported to the City Council by the Treasurer.

Market risk is the risk that the portfolio value will fluctuate due to changes in the general level of in terest rates. The City recognizes that, over time, longer -term portfolios have the potential to achieve higher returns. On the other hand, longer - term portfolios have higher volatility of return. The City will mitigate market risk by providing adequate liquidity for short -term cash needs, and by making longer -term investments only with funds that are not needed for current cash flow purposes. The City further recognizes that certain typ es of securities, including variable rate securities, securities with principal paydowns before maturity, and securities with embedded options, will affect the market risk profile of the portfolio differently in different interest rate environments. The Ci ty, therefore, adopts the following strategies to control and mitigate its exposure to market risk:
• The City will maintain a minimum of six months of budgeted operating expenditures in short term investments to provide sufficient liquidity for expected disbursements.
• The maximum stated final maturity of individual securities in the portfolio will be five (5) years, except as otherwise stated in this policy or approved by the City Council.
• The duration of the portfolio will not exceed three (3) years.

O. Internal Control
The Treasurer or designee shall maintain a system of internal controls designed to ensure compliance with the Investment Policy and to prevent losses due to fraud, employee error, and misrepresentations by third parties or unanticipated changes in financial markets. Accordingly, the Treasurer shall establish an annual process of independent review by an external auditor. This review will provide internal control by assuring compliance with policies and procedures.

P. Performance Standards
The investment portfolio shall be designed to attain a market-average rate of return throughout budgetary and economic cycles, taking into account th e City’s risk constraints, the cash flow characteristics of the portfolio , and state and local laws, ordinances or resolutions that restrict investments.

The Director of Finance must monitor and evaluate the portfolio’s performance relative to the chosen market benchmark(s), which will be included in the mon thly 294
Page | 12
investment report. The Director of Finance shall select an appropriate, readily available index to use as a market benchmark.

Q. Investment Policy Adoption
The investment policy shall be adopted by resolution of the City Council. The policy shall be reviewed annually by the Council and any modification made thereto must be approved by the City Council.

R. Interest Earnings
All money earned and collected from investments authorized in this policy shall be allocated quarterly to pooled funds based on the daily cash balance in each fund as a percentage of the entire pooled portfolio. Should any fund not have a daily cash balance at the end of a quarter, it will receive none of the money earned and collected from the pooled investments. Further more, should any fund have a temporary negative daily cash balance at the end of a quarter, the negative amounts will be reallocated to provide earnings to the funds with a positive daily cash balance.

S. Restrictions

1. The City will not invest any funds in inverse floaters, range notes, or interest- only STRIPS (Separate Trading of Registered Interest and Principal of Securities) that are derived from a pool of mortgages.

2. The City will not invest any funds in any security that could result in zero interest accrual if held to maturity. This limitation does not apply to investments in shares of beneficial interest (money market mutual funds) that are authorized elsewhere in the Investment Policy.

3. The City will not invest in companies involved in the manufacturing of tobacco and tobacco-related products such as cigarettes, cigars, pipe tobacco, chewing tobacco, etc.

4. The City will not invest in companies that develop and manufacturer commodities that facilitate violence, war, oppression, and apartheid.

5. The City will not invest in companies that develop and manufacture arms and weapons.

6. The City will not invest in companies that develop and manufacture commodities involved in border and mass surveillance industries.

7. The City will not invest in comp anies involved in mass incarceration and detention industries, nor those companies that use prison labor to manufacture products.

8. In accordance with the Slavery Era Insurance Ordinance 14 -05 N.S. Section

2.29.030 Social Disclosure on Gains from Slavery e ffective July 1, 2005, the City will not invest any funds in international financial instruments that benefited from slavery. The City Council prohibits, by social investment policy, such 295
Page | 13
investments and reserves the absolute right to divest from such inve stments with the cost of divestment being borne by the contracting institution.

9. In accordance with Resolution 38-13 effective May 7, 2013, the City declared it a policy of the City of Richmond to not invest in Fossil Fuel companies and urges the Board and Management of the City’s Pens ion funds to divest from publicly-traded Fossil Fuel Companies.

10. In accordance with the Sanctuary City Ordinance 12 -18 N.S. Section 4 Prohibition on Investments effective June 5, 2018, the City shall not make any investments in stocks, bonds, securities, or other obligations issued by any provider of Data Broker or Extreme Vetting services to United States Immigration and Customs Enforcement (ICE).

296
Page | 14

GLOSSARY

Agencies: Federal agency securities and/or Government-sponsored enterprises.

Bankers' Acceptance (BA): A draft or bill of exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.

Benchmark: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio's investments.

Bid: The price offered by a buyer of securities. (When you are selling securities, you ask for a bid.) See Offer.

Broker: A broker brings buyers and sellers together for a commission.

Certificate of deposit (CD): A time deposit with a specific maturity evidenced by a Certificate.

Large-denomination CDs are typically negotiable.

Collateral: Securities, evidence of deposit or other property, which a borrower pledges to secure repayment of a loan. Also refers to securities pledged by a bank to secure deposits of public monies.

Collateralization of Deposits: Process by which a bank or financial institution pledges securities, or other deposits for the purpose of securing the repayment of deposit funds.

Data Broker: Means either 1) the collection of information, including personal information about consumers, from a wide variety of sources for the purpose of reselling such information to their customers, which include both private -sector businesses and government agencies; 2) the aggregation of data that was collected for another purpose from that for which it is ultimately used.

Dealer: A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own account.

Delivery versus Payment (DVP): There are two methods of delivery of securities:
delivery versus payment and delivery versus receipt. Delivery versus payment is delivery of securities with an exchange of money for the securities. Delivery versus receipt is delivery of securities with an exchange of a signed receipt for the securities.

Diversification: Investment contained within the portfolio will be diversified by security type, institution and maturity.

Extreme Vetting: Data mining, threat modeling, predictive risk analysis, or other similar services.

Federal Deposit Insurance Corpo ration (FDIC): A federal agency that insures bank deposits, currently up to $250,000 per deposit.

Federal Home Loan Banks (FHLB): Government sponsored wholesale banks (currently 12 regional banks), which lend funds and provide correspondent banking service s to 297
Page | 15
member commercial banks, thrift institutions, credit unions and insurance companies. The mission of the FHLBs is to liquefy the housing related assets of its members who must purchase stock in their district Bank.

Federal National Mortgage Association (FNMA): FNMA, like GNMA was chartered under the Federal National Mortgage Association Act in 1938. FNMA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of resi dential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder -owned corporation. The corporation's purchases include a variety of adjustable mortgages and second loans, in addition to fixed-rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assumes and guarantees that all security holders will receive timely payment of principal and interest.

Fossil Fuel: A fuel formed by natural processes, such as anaerobic decomposition of buried dead organisms, containing organic molecules originating in ancient photosynthesis that release energy in combustion such as: coal, oil, and gas reserves as measured by the gigatons of carbon dioxide that would be emitted if those reserves were extracted and burned.

Government National Mortgage Association (GNMA or Ginnie Mae): Securities influencing the volume of bank credit guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan associations, and other institutions . The security holder is protected by full faith and credit of the U.S. Government. Ginnie Mae securities are backed by the FHA, VA or FHA mortgages. The term "pass -through" is often used to describe Ginnie Maes.

Liquidity: A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow and reasonable size can be done at those quotes.

Local Government Invest ment Pool (LGIP): The aggregate of all funds from political subdivisions that are placed in the custody of the State Treasurer for investment and reinvestment.

Market Value: The price at which a security is trading and could presumably be purchased or sold.

Maturity: The date upon which the principal or stated value of an investment becomes due and payable.

Money Market: The market in which short -term debt instruments (bills, commercial paper, bankers' acceptances, etc.) are issued and traded.

Offer: The price asked by a seller of securities. (When you are buying securities, you ask for an offer.) See Bid.

Portfolio: Collection of securities held by an investor.

Primary Dealer: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include 298
Page | 16
Securities and Exchange Commission (SEC)-registered securities broker-dealers, banks, and a few unregulated firms.

Prudent Investor: A trustee who manages investments responsibly, prioritizing beneficiaries' best interests while avoiding conflicts of interest. They exercise reasonable care, skill, and caution to make sound investment decisions that align with trust objectives and risk tolerance.

Public Bank: A corporation, organized as either a nonprofit mutual benefit corporation or a nonprofit public benefit corporation for the purpose of engaging in the commercial banking business or industrial banking business, that is wholly owned by a local agency, as specified, local agencies, or a joint powers authority.

Rate of Return: The yield obtainable on a security based on its purchase price or its current market price. This interest may be amortized yield to maturity on a bond or the current income return.

Repurchase Agreements: An agreement of one party (for example, a financial institution) to sell securities to a second party (such as a local agency) and simultaneous agreement by the first party to repurchase the securities at a specified price from the second party on demand or at a specified date.

Sanctuary City: A municipal jurisdiction that limits its cooperation with the national government's effort to enforce immigration law.

Safekeeping: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.

Secondary Market: A market made for the purchase and sale of outstanding issues following the initial distribution.

Securities & Exchange Commission: Agency created by Congress to protect investors in securities transactions by administering securities legislation.

Securities and Exchange Commission (SEC) Rule 15C3 -1: See Uniform Net Capital Rule.

Treasury Bills: A non-interest bearing discount security issued by the U.S. Treasury to finance the national debt. Most bills are issued to mature in three months, six months, or one year.

Treasury Notes: Medium-term coupon-bearing U.S. Treasury securities issued as direct obligations of the U.S. Government and having initial maturities from two to 10 years.

Uniform Net Capital Rule: Securities and Exchange Commission requirement that member firms as well as nonmember broker -dealers in securities maintain a maximum ratio of indebtedness to liquid capital of 15 to 1; also called net capital rule and net capital ratio. Indebtedness covers all money owed to a firm, including margin loans and commitments to purchase securities, one reason new public issues are spread among members of underwriting syndicates. Liquid capital includes cash and assets easily converted into cash.
299
Page | 17
United States Immigra tion and Customs Enforcement (ICE): A federal law enforcement agency under the U.S. Department of Homeland Security. ICE's stated mission is to protect America from the cross -border crime and illegal immigration that threaten national security and public safety.

Yield: The rate of annual income return on an investment, expressed as a percentage. (a) Income Yield is obtained by dividing the current dollar income by the current market price for the security. (b) Net Yield or Yield to Maturity is the current i ncome yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.
300

Page | 1

POLICY: Unclaimed Funds Policy
ESTABLISHED: New
RESOLUTION NO.: Not Applicable; DATE: Not Applicable

I. Unclaimed Funds
The City of Richmond will account for unclaimed funds in a manner which follows Government Code Sections 50050 through 50057. Funds that remain unclaimed for at least three (3) years will become the property of the City of Richmond after the procedures identified herein have been followed.

A. Purpose
The purpose of this policy is to establish guidelines for the proper disposition of and accounting for unclaimed funds. In accordance with the California Government Code Sections 50050 through 50057, money that is not the property of the City of Richmond (City) that remains unclaimed for a period of three years will become the property of the City after certain notice procedures are followed.

B. Definitions and Details

1. Definitions
a) Unclaimed Funds - Consists of funds which are not the property of the City but remain in the City Treasury for three (3) or more years without a claim being filed by the legal owner(s). Unclaimed funds do not include individual items of less than $15.00, any amounts in which the depositor’s name is unknown, or restitution to victims. b) Warrant – Instrument issued to pay for goods and/or services rendered, issue refunds, etc. (i.e. a check).
c) Stale Dated – A check that is older than six (6) months. d) Escheat – refers to state escheat laws that require agencies to transfer unclaimed property or funds to the state after three years and reasonable efforts to locate the property owner.

2. Guidelines
The City of Richmond has established the policy to hold unclaimed Payroll, Accounts Payable, Genera l Liability, and Worker Compensation checks rather than escheating the unclaimed funds to the State of California.

This unclaimed funds policy applies to all outstanding Payroll, Accounts Payable, General Liability, and Workers Compensation checks abandon ed three years after the issue date.
301

Page | 2

3. Quarterly Procedures: Items over $15.00
a) Quarterly during the bank reconciliation process, t The outstanding warrant register will be reviewed for items six (6) months and older. For warrants six months and older, a first letter (Exhibit A) and affidavit of unclaimed monies claim form (Exhibit B) will be mailed to the address on record for the issued warrant , and the warrant will be identified as stale dated.
b) Every June 30th and December 31st, (final evaluation dates) a All remaining outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days the warrant will be identified as unclaimed. A journal entry shall be prepared to record the total amount of unclaimed checks in a holding account called “Aged Unclaimed Warrants”.
c) A list of stale date d and unclaimed warrants containing the warrant number, issue date, amount, and payee shall be maintai ned by the Finance Department. If a cancelled warrant is presented, or the payee files a claim after cancellation, the warrant shall be voided and reissued according to standard procedure , and the original warrant shall be removed from this list.
d) Also, on June 30th and December 31st, t The stale dated list shall be evaluated to determine which warrants are more than 3 years old from the date of issue. Warrants that are more than 3 years old will be handled as follows:
(1) A notice must be published once a week f or two consecutive weeks in a newspaper of general circulation in the City of Richmond stating the payee, the amount, the fund in which the money is held, and that it is proposed that the money will become the property of the City of Richmond on a specific date (not less than 45 nor more than 60 days after the first publication) in accordance with Government Code Section 50051. See
Exhibit C for example.
(2) Upon or prior to publication, a party of interest may file a claim (Exhibit B) for the funds with the Fi nance Director. The claim must contain the claimant’s name, address, amount, tax
identification number, and grounds for claim prior to the date the funds become property of the City of Richmond. The Finance Director can request additional information to he lp substantiate the claim.

302

Page | 3

(3) On the day identified in the public notice, the total dollar amount (on which no claims were filed) becomes the property of the City.

Uncashed checks will be cancelled , voided in the system, and notification sent to the City’s b ank. A resolution authorizing the transfer of these unclaimed funds from the “Aged Unclaimed Warrants fund” to the general fund will be prepared for approval by the City Council. Thereafter, a journal entry will be prepared to recognize the revenue.
e) At the expiration of the three year period, money representing restitution collected on behalf of victims shall be deposited into a Restitution Fund or used by the City of Richmond for the purpose of victim services in accordance with Government Code Section 500 50. The City must document that it has made a reasonable effort to locate and notify the victim to whom the restitution is owed.

4. Quarterly Procedures: Items under $15.00 or items where the depositor is unknown
a) Quarterly during the bank reconciliation pro cess, t The outstanding warrant register will be reviewed for items six (6) months and older. For warrants six months and older, a letter (Exhibit A) and affidavit of unclaimed monies claim form (Exhibit B) will be mailed to the address on record for the is sued warrant, and the warrant will be identified as stale dated.
b) Every June 30th and December 31st, (final evaluation dates) a All remaining outstanding warrants will be evaluated. Any warrants issued more than 12 months prior to evaluation date will receive a second letter and affidavit form. If no response is received within 30 days the warrant will be identified as unclaimed . A Journal entry shall be prepared to record the total amount of unclaimed checks in a holding account called “Aged Unclaimed Warrants”.
c) Any individual check of less than fifteen ($15) dollars, or any amount if the depositor’s name is unknown, which remain unclaimed for a period of one (1) year will become the property of the City. Uncashed checks will be cancelled , voided in the syste m, and notice of the cancellation will be sent to the City’s bank. The unclaimed funds may be transferred from the funds which money was originally drawn from by the City to the general fund without the necessity of publication of notice in a newspaper in accordance with Government Code Section 50055. A resolution authorizing the transfer of these funds to the general fund will be prepared for approval by the City Council. Thereafter, a journal entry will be used to record the total amount of these warrants as revenue, becoming the property of the City of Richmond.
303

Page | 4

d) At the expiration of the three-year period, money representing restitution collected on behalf of victims shall be deposited into a Restitution Fund or used by the City of Richmond for the purpose of victim services in accordance with Government Code Section 50050. The City must document that it has made a reasonable effort to locate and notify the victim to whom the restitution is owed.

304

Page | 5

Exhibit A
Sample notification letter to be mailed

mm, dd, yyyy

Vendor Name
Address
City, State, Zip Code

Vendor # 1693
Re: Un-cashed check

The City of Richmond issued check #10007826 on 5/31/2001 in the amount of $500.00.

A review of the records indicates that this check is still outstanding and has not been cashed. By completing the attached affidavit of unclaimed monies claim form you are acknowledging that the above mentioned check was n ot received or was lost and has not been presented for payment by the payee, therefore requesting a re -issuance. Please return the competed affidavit of unclaimed monies claim form to:

City of Richmond
Finance Department / Accounts Payable

450 Civic Center Plaza
P.O. Box 4046
Richmond CA 94804-0046

If you have this check, please return it for reissuance; do not cash the check, as it will no longer be honored by the City bank.

If you have any questions please feel free to contact Accounts Payable_______________ at 510-620-6740 or by email at [email protected]

Sincerely,
305

Page | 6

Accounts Payable

Exhibit B
City of Richmond
Affidavit of Unclaimed Monies

I, ____________________________, hereby declare that I am the depositor of the unclaimed money, their heir, beneficiary, or duly appointed representative of check number _________________, issued by the City of Richmond, in the amount of $_________________ _ (“unclaimed monies”), dated _______________________ and the name of the Payee shown is _______________________________________.

Indicate below what happened to the original check– mark on the box and explain.

( ) The above check was not received.
( ) The above check was destroyed by __________________. ( ) The above check was lost by me on _________________. ( ) Other _________________________________________.
( ) The above check is attached. The check was not cashed within six months and has become stale dated.
( ) The above check was not received, deposited, or cashed, however there are no outstanding payments due to me from the City of Richmond.

I have an interest in the unclaimed monies, am entitled to the full amount thereof, request that a replacement check be issued to me, and agree that if the above warrant is received I will promptly return it to the City of Richmond Finance Department.

I CERTIFY UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.

EXECUTED AT _______________________________________, on DATE ______________________
_______________________________________________ ______________________________ Print Name Daytime Phone Number
_______________________________________________
306

Page | 7

Signature
___________________________________________________________________________________ Address City State Zip Code
Exhibit C
Sample Notice to be Published in Local Newspaper

Notice is hereby given that the City of Richmond is holding funds for the below listed individual(s).

If said funds are not claimed by mm, dd, yyyy, these funds will become the property of the City of Richmond in accordance with California Government Code Sections 50050 – 50057. These funds may be released to the depositor, their heir, beneficiary, or duly appointed representative provided a claim form has been completed with the necessary information.

The Affidavit of Unclaimed Money Claim form is available at the City of Richmond, Finance Department, 450 Civic Center Plaza, Richmond, CA 94804, on the City’s website (http://www.cityofrichmond.ca.us), or by calling [Name}, 510-620925-671-####. Required claim information includes name, address, phone number, tax identification number or social security number, amount of claim, and grounds on which the claim is founded. Once a claim is submitted, the Director of Finance will determine what, if any, additional information is necessary.

Name Transaction Date Dollar Amount
Vendor A
Vendor B
Vendor C

307

Page | 1

POLICY: Purchasing Policy
ESTABLISHED: October 25, 2011
RESOLUTION NO.: Not Applicable; DATE: Not Applicable
I. Purchasing Policy
A. Section I - General

1. Purpose
To establish the manner by which all City procurement is to be conducted as well as to ensure City compliance with applicable laws relating to the expenditure of public funds.

2. Policy
When authorized to procure material or service, all City employees shall follow this policy to correctly and ethically process a procurement need and ensure the efficient use of public funds. All City rules, regulations, laws, resolutions and the City Purchasing Ordinance are incorporated herein by reference see the following chapters of the Municipal Co de and the procurement standards in 2 CFR 200.317:

Chapter 2.52 – Contracting and Purchasing Procedures
Chapter 2.50 – Richmond Business Opportunity Ordinance
Chapter 2.56 – Local Employment Program
Chapter 2.65 – Ban the Box Ordinance
Chapter 2.28 – Nondiscrimination Clauses

3. Overview
The City’s Purchasing Ordinance and Procurement Policy are in place as your guideline to ensure materials and services are purchased in a legal and cost- effective manner. Keep in mind that services generally have some ris k associated with them and typically require insurance documentation and a City Contract Agreement.

Most services will require a standard City agreement which can be found on the City’s Intranet. Each agreement must be approved as to form by the City Attorney’s Office.

The purchasing functions are decentralized, with each Department/Division responsible for compliance with City policies and procedures. Purchasing responsibility and authority shall be delegated to the lowest possible level consistent with good business practice and sound financial management policy to the extent practical.

The following apply to all purchases made by the City of Richmond:
308

Page | 2

a) No purchase will be approved or undertaken unless an appropriation has been established, through either the adopted annual budget or City Council approval of additional appropriations. It is the responsibility of the Department/Division to maintain budget control of their individual budgets. Ultimate responsibility for the individual budget rests with the Department Director.
b) Certain purchases are unique in nature and do not lend themselves to the process of competitive bidding. Therefore, these items are excluded from the competitive bidding and purchase order requirements. These items include, but are not limited to, County Services, debt service payments, and ongoing expenses for utilities or services (such as telephones, electricity, etc.)
c) No City employee shall have a direct or indirect financial interest in any contract or purchase of goods or services entered into by the City, or shall derive any personal benefit from the City’s purchase of goods or services.
d) No City employee shall use the City’s purchasing procedures to obtain property for personal use, by misrepresenting to vendors for the purpose of obtaining price discounts for personal purchases.
e) No City employee shall draft or cause to be drafted any specifications for bids in such a way as to intentionally limit the bidding directly or indirectly to any one bidder.

4. Solicitation Thresholds
The dol lar limits for purchases are established by ordinance or resolution.

Purchases shall not be split to avoid the required procedures or certain dollar limits. In summary, requisitioners are responsible to obtain quotes/bids as indicated below:
• Less than $3,000 – Solicit One Written Quote
• Between $3,000 - $5,000 – Solicit Two Written Quotes
• Between $5,000 - $50,000 – Solicit Three Written Quotes • Over $50,000 – Formal Sealed Bids/Proposals are Required

Formal procedures are used when the value of th e purchase/service is estimated to be $50,000 or greater. Informal procedures are used when the estimated value of the purchase/service is less than $50,000.

Formal purchases may be solicited by either an Invitation For Bid (IFB), a Request For Proposals (RFP), or by a Request For Qualifications (RFQ).

Informal purchases may be solicited by either a Request For Quote or a Request for Proposal (RFP).

309

Page | 3

5. Issuing the Quote/BID/RFP/RFQ
Since all solicitations over $3,000 require competitive quotes, the issuing department shall submit the solicitation to the Purchasing Division to post to the City’s BidsOnline System. The City utilizes this online registration and bidding system to notify businesses of various bid opportunities, news, and updates. The electronic bidding system provides an easy and accessible way to bid documents. Registered companies will receive customized emails notifying them of specific bids and they will have the ability to search for bids, and download documents. This will ensure maximum exposure and competition. Also submit to Purchasing a list of potential firms to receive notice of the solicitation.
a) Exceptions: The informal/formal bid process may be bypassed in the following three instances:
(1) In emergency situations to preserve life, health or property, the appropriate Department Head may dispense with obtaining quotes/bids/proposals to obtain materials/services necessary in dealing with the emergency. The Emergency Justification Form must be approved by the Finance Director and City Manager prior to any purchase. If the purchase exceeds $10,000, immediately following the emergency, the appropriate
Department Head shall prepare an agenda report to Council explaining the emergency and the items purchased. Emergency procurements should be made only to preserve life, health or property.
• Upon a natural disaster
• To correct or forestall a shutdown
• To maintain essential public services
• Other unforeseeable events
• NOT because of poor planning
(2) When one known supplier is available, the Department Head may complete the Sole Source Form. A sole source is the only possible source, not a preferred source. The Sole Source Form must be approved by the Finance Director. If the purchase is under $10,000 the City Manager must also approve the Sole Source. If the purchase exceeds $10,000, an agenda report for Council approval requesting an exception from the solicitation process and requesting awarding the purchase to the “Sole Source vendor” must be prepared.

310

Page | 4

(3) When there exists other governmental contracts that are competitively bid (such as State Contracts, DGS, WSCA,
Sourcewell, OMNIA Partners, NJPA, etc.) that the City is eligible to use.

6. Procurement/Payment Methods
a) Purchase Order: The Finance Department has designated the purchase order as the primary and preferable procurement and payment method.

The Purchase Order (PO) is the main source of encumbering and procuring services and materials. The PO is used to communicate to a vendor the City’s terms and conditions, authorizes an encumbrance of City funds and is a contractual agreement to order goods and services.

The PO is used to process payment and track expenditures in the City’s Financial System (MUNIS).

Important to our procurement process is the system of encumbrance accounting, which helps departments and Finance control department spending by knowing what amounts have been committed prior to the actual invoicing and payment of services. When a department makes a verbal commitment with a vendor and does not issue a purchase requisition and a purchase order is not created, it circumvents the entire budgetary control process. Verbal commitments with a vendor and the absence of a purchase order is not an acceptable practic e. Obtaining a purchase order from the Purchasing Division is the main method of encumbering City funds.

Accounts Payable will pay approved vendor invoices with an appropriate and valid purchase order number issued from the Purchasing Division.

Invoices without an authorized purchase order may be returned to the vendor unpaid.
b) Credit/Procurement Card (CAL -Card): The CAL -Card is used as a purchase and payment method used to procure budgeted low value goods, typically up to $3,000. It may be used for higher value purchases on an approved basis. Cardholder and cardholder’s approving official are responsible for proper use of the CAL-Card program. See the CAL- Card Handbook, posted on the City’s intranet, for policies and procedures.
c) Direct Pay (Green Stamp): Green stamps are used as a limited payment method typically used for utilities, trust accounts, and one -time payments. Direct pay is not to be used for payment of services or routine/reoccurring payment of goods. The use of a direct pay must be approved by t he Finance Director or his/her designee and shall be limited to the following areas:

311

Page | 5

(1) Utility payments, i.e. electricity, gas, water, sewer, etc. 2. (2) Trust Accounts
(3) One time vendors – The one-time vendor should be used for any vendor that will be utilized one time during a calendar year with an aggregate payment of less than $600.00 per calendar year.

A vendor number will need to be created for payment. The issuing Department/Division will need to obtain a completed IRS form W-9 from the vendor.
(4) Legitimate “emergency” needs, must have the Finance Director’s approval.
d) Electronic Funds Transfer (EFT): EFT is used as a limited payment method for transactions with large d ollar amounts which are time sensitive. Types of payments which are routinely processed by means of an EFT are debt service payments, the purchase of securities, and medical benefits etc.

B. Section II – General Supplies, Materials, and Equipment

1. Purpose
Provide guidelines for the purchase of general supplies, materials and equipment. Supplies, materials and equipment shall consist of any and all articles or things which shall be furnished to or used by any department.

In instances where goods and services ar e purchased together from one vendor, this section shall only apply if the predominant portion of the purchase is goods. (For example, a purchase of equipment for $2,000 with a $300 installation fee would be covered under this section of the policy. A repa ir of equipment with $2,000 in labor and $300 in parts would be covered under Section III General Trade Services).

2. Informal/Unsealed Quotes < $50,000.00
Material/supply purchases exceeding $10,000 must be awarded by the City Council.

Informal bidding shou ld be used to assure the most competitive price is received for an item, while avoiding the additional time and expense involved in formal bidding.

The Department/Division should make every reasonable attempt to obtain at least three quotes for all purcha ses between $5,000 -$50,000. However, it is understood that at times it is neither practical nor cost effective to continue soliciting quotes until three quotes are received. In the event that three viable quotes are not received, the division shall document what steps were taken to obtain quotes, any vendors contacted that declined to bid, and, if applicable, why it is not practical to receive three quotes.
312

Page | 6

a) Documentation: Quotes received must be documented to the satisfaction of the Finance Department. Idea lly, documentation should include the name of the company bidding, the person giving the quote, items being quoted, the date and time of the contact, the amount quoted and any other relevant information.
b) Evaluating Quotes: The Department/Division shall evaluate the informal quotes received and determine the lowest most responsible quote.

When evaluating quotes, please verify that like items are being evaluated (apples to apples). The City reserves the right to accept the quote which is in the best interest of the City.
c) Purchase Order: A purchase requisition detailing the vendor name, address, item(s) being purchased, total price including tax and shipping, and budget account to be charged shall be prepared in the MUNIS Financial System. A copy of the quotes/ quote summary shall be attached to the purchase requisition. The Purchasing Division will review/approve the purchase requisition and convert the requisition to a Purchase Order.

3. Formal/Sealed BIDS > $50,000.00
Material/supply purchases exceeding $10,000 m ust be awarded by the City Council.

Formal bidding should be used to assure all possible vendors are given the opportunity to bid on major City purchases, thereby assuring the City that it has received the most competitive price. The formal process genera lly takes more time and expense than informal bidding.

The initiating Department/Division shall be responsible for completion of the formal bid process.
313

Page | 7

a) Bid Package: The initiating department shall prepare a bid form including detailed specifications for the item to be purchased. The following format is suggested for competitive bids.
(1) Submission of Bids – Include date, time, location and bid number. Include a detailed list of the information the bid or proposal should contain. The public notice shall state the method of submission, either paper bids to the City Clerk’s office or electronic bids through the City’s electronic bidding system. (2) Questions – List the name, address, and telephone number of the person to be contacted concerning questions about the project.
(3) Background – Provide as much background as necessary to give the bidder an understanding of the environment in which the job will be performed and to which the job relates.

314

Page | 8

(4) Scope of work – Describe in detail the requirements for the job and detail specifications.
(5) Desired project schedule – be as specific as possible. (6) Minimum and desirable qualifications – Be as specific as possible.
(7) Performance Bond – Whether a performance bond is required and if so, the amount and form of bidders security.
b) Notice inviting Bids: The initiating department shall also prepare a notice inviting bids that includes the following:
(1) A general description of the item to be purchased.
(2) A statement ind icating where bid package, specifications and bonding requirements can be obtained.
(3) A statement specifying the time place for the opening of the bid. c) Bid Opening:
(1) Sealed paper bids shall be submitted to the City Clerk’s office or electronically through the City’s electronic bidding system. (2) Paper bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the Invitation to Bid.
(3) Electronic bid submission will remain unopened until the closing date and time. Said submission shall not be viewed by the public or City staff until the closing date and time.
(4) Any bid received after the time specified in the notice shall be rejected.
(5) When bidder’s security is required, it will be announced in the public notice invit ing bids. The amount shall be determined at the time of preparation of the bid. It shall be in the form of cash, certified or cashier’s check, certificate of deposit in City of Richmond’s name, or bid bond made payable to the City of Richmond. When a bidder’s security is required, a bid shall not be considered unless one of the aforementioned forms of security accompanies the bid.
d) Rejection of Bids: The City reserves the right to reject any and all bids, to accept or reject any one or more items of a bid, o r to waive any irregularities or informalities in the bids or the bidding process if to do so is deemed to best serve the interest of the City.
315

Page | 9

e) Determining Lowest Responsible Bidder: Award to bid shall be to the lowest responsive and responsible bidder. The City reserves the right to accept that bid which is in the best interest of the City. When selecting the recommended bidder the Department/Division Head will take into consideration:
(1) Price
(2) Ability, capacity, and skill, warrantee
(3) Ability to meet time requirements
(4) Character, integrity, and reputation
(5) Previous vendor experience
(6) Financial resources available for contract performance (7) Ability to provide future maintenance and service, if necessary f) Awarding the Bid: Once the bids have been evaluated, the Depart ment Head/Division Head shall prepare an agenda report to Council recommending the most responsive and responsible bidder. The Council shall then award the bid in a public meeting.

All contracts exceeding $10,000 must be awarded by the City Council.

Otherwise:
• Such purchases are void and not considered an obligation of the City.
• Invoices may be returned to the contractor/service provider unpaid. • The person ordering the unauthorized purchase may be held personally liable for the costs of the contract.
316

Page | 10

g) Purchase Order: A purchase requisition detailing the vendor name, address, item being purchased, total price including tax and shipping, and budget account to be charged shall be prepared in the MUNIS Financial System. A copy of the bid/bid summary shall be attached to the purchase requisition. The Purchasing Division will review/approve the purchase requisition and convert the requisition to a Purchase Order. h) Change Orders for Product: The Purchasing Division is authorized to issue change orders f or changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. i) Change Orders for Services: The City Manager is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price. Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval.

C. Section III – General Trade Services

1. Purpose
Provide guidelines for the purchase of trade contractual services. Trade services shall mean the repair, rental or maintenance of equipment, machinery and other City -owned or operated property. Included within this term are services necessary for the routine operation, repair or maintenance of existing buildings or improvements. The term does not include services rendered by professionals and other services which are unique in nature and not subject to competition.

In instances where goods and trade services are purchased together from one contractor/service provider, this section shall only apply if the predominant portion of the purchase is services. (For example, a repair of equipment with $2,000 in labor and $300 in parts would be covered under this sect ion of the policy. A purchase of equipment for $2,000 with a $300 installation fee would be covered under Section II- General Supplies, Materials and Equipment).

2. Informal/Unsealed Quotes < $50,000.00
Trade services exceeding $10,000 must be awarded by the City Council.

Informal bidding should be used to assure the most competitive price is received for an item, while avoiding the additional time and expense involved in formal bidding.

The Department/Division shall strive to, whenever possible, solicit at least three quotes in writing. It is important that the specifications are accurate and comprehensive.
317

Page | 11

a) Documentation: Quotes received must be documented to the satisfaction of the Finance Department. Ideally, documentation should include the name of the co mpany bidding, the person giving the quote, services being purchased, the date and time of the contact, the amount quoted and any other relevant information.
b) Evaluating Quote: The Department/ Division shall evaluate the informal quotes received and determine the lowest most responsible quote. The City reserves the right to accept that quote which is in the best interest of the City.

When selecting the recommended bidder the Department / Division Head will take into consideration:
• Price
• Ability, capacity, and skill.
• Ability to meet time requirements.
• Character, integrity, and reputation.
• Previous contractor/service provider experience.
• Financial resources available for contract performance. • Ability to provide future maintenance and service, if necessary. c) Contract and Purchase Order:

318

Page | 12

(1) A contract shall be prepared detailing the consultant’s name, service being purchased, total price of the service being purchased. The consultant shall sign three original copies. (2) The issuing Department/ Division will obtain a completed IRS form W-9 from the consultant.
(3) Proof of insurance in accordance with the contract shall be obtained. This includes an insurance certificate and an additional ensured endorsement.
(4) If the vendor is located in, or perform services within city limits or if vendor delivers products in company owned vehicles, a Business License is required. Visit the City’s website
www.ci.richmond.ca.us/businesslicense if you want more
information.
(5) The contract shall be entered in the MUNIS Financial System. A copy of the contract together with the proof of insurance, business license, and evidence of the competitive solicitation, minutes and legal opinion shall be attached in the contract module.
(6) A purchase requisition shall be prepared in the MUNIS Financial System.
(7) The City Clerk, City Attorney, and Mayor/City Manager shall sign the three original copies of the contract.
(8) One original copy of the executed contract shall be returned to the contractor/service provider, the issuing Department sha ll keep the second copy and the third copy shall remain in the City Clerk’s Office.
d) Renewals: Contracts for ongoing services may include annual renewal provisions for up to three additional years. However, all contracts that exceed $10,000 in overall contract amount must be approved by the City Council. Cost increases related to such renewals shall not exceed the Consumer Price Index (CPI) adjustments unless approved in advance by the Finance Director.
e) Change Orders for Product: The Purchasing Division is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. f) Change Orders for Services: The City Manager is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. 319

Page | 13

3. Formal/Sealed BIDS > $50,000.00
Trade services contracts exceeding $10,000.00 must be awarded by the City Council.

Formal bidding should be used to assure all possible contractor/service providers are given the opportunity to bid on major City contracts, thereby assuring the City that it has received the most competitive price. The formal process generally takes more time and expense than informal bidding.

The initiating Department/Division shall be responsible for completion of the formal bid process. However, the process shall be coordinated with the City Clerk’s Office and the Purchasing Division. Formal Sealed bids must be publicly opened in the City Clerk’s Office.
320

Page | 14

a) Bid Package: The initiating department shall prepare a bid package including detail specifications for the services to be purchased. The following format is suggested for competitive bids/proposals:
(1) Submission of bids (or proposals) – Include date, time, and location. Include a detail list of the information the bid or proposal should contain. State the method of submission, either paper bids to the City Clerk’s Office or electronic bids through the City’s electronic bidding system. Formal sealed pro posals are not required to have a public bid opening.
(2) Questions – List the name, address, and telephone number of the person to be contacted concerning questions about the project.
(3) Background – Provide as much background as necessary to give the bidder an understanding of the environment in which the job will be performed and to which the job relates.
(4) Scope of work – Describes in detail the requirement for the job and detail specification.
(5) Desired project schedule – Be as specific as possible. (6) Minimum and d esirable qualifications – Be as specific as possible.
(7) Performance Bond – Whether a performance bond is required and if so, the amount and form of bidders security.
(8) Sample Contract – A sample of the contract that is expected to be used should be included in the bid package.
b) Notice Inviting Bids: The initiating department shall also prepare a notice inviting bids that includes the following:
(1) A general description of the services to be purchased. (2) A statement indicating where bid forms, specifications and bonding requirements can be obtained.

321

Page | 15

(3) A statement specifying the time and place for the opening of the bids.
c) Bid Opening:
(1) Sealed paper bids shall be submitted to the City Clerk’s office or electronically through the City’s electronic bidding system. (2) Paper bids shall be opened publicly in the presence of one or more witnesses at the time and place designated in the Invitation to Bid.
(3) Electronic bid submission will remain unopened until the closing date and time. Said submission shall not be viewed by the public or City staff until the closing date and time.
(4) Any bid received after the time specified in the notice shall be rejected.
(5) When bidder’s security is required, it will be announced in the public notice inviting bids. The amount shall be determined at the time of preparation of the bid. It shall be in the form of cash, certified or cashier’s check, certificate of deposit in City of Richmond’s name, or bid bond made payable to the City of Richmond. When a bidder’s security is required, a bid shall not be co nsidered unless one of the aforementioned forms of security accompanies the bid.
d) Rejection of Bids/Proposals: The City reserves the right to reject any and all bids, to accept or reject any one item of a bid, or to waive any irregularities or informalities in the bids or the bidding process if to do so is deemed to best serve the interest of the City.
e) Determining Lowest Responsive and Responsible Bidder: Award of bid shall be to the lowest responsive and responsible bidder. The City reserves the right to a ccept that bid which is in the best interest of the City. When selecting the recommended bidder the City staff will take into consideration:
(1) Price
(2) Ability, capacity, and skill.
(3) Ability to meet time requirements.
(4) Character, integrity, and reputation.
(5) Previous contractor/service provider experience.
(6) Financial resources available for contract performance. (7) Ability to provide future maintenance and service, if necessary f) On-Call (Ongoing) Professional Services
322

Page | 16

(1) In some instances it is in the best interest of the City to have on- call contracts with multiple consultants for the same or very similar services. (I.e. services that can be defined as to scope of work but not as to require events such as soils testing, contract building inspection services, architect ural services, etc.) These services would best be handled by establishing an eligibility list and by entering into annual on -call processional service contracts.
(2) The process for selecting firms for annual ongoing professional service contracts shall be ge nerally the same as for other professional services contracts. However, multiple firms may be awarded an on-call contract based on the RFP/RFQ process and may be placed on the eligibility list. Additional firms/individuals may also be awarded contracts and placed on the eligibility list at a later date, using the RFP/RFQ process without impacting contracts currently in place.
(3) As events occur and need arises, work may be assigned to the consultants on the eligibility list. The Department Head shall solicit proposals from the consultants on the eligibility list or shall make a reasonable attempt to rotate work between consultants subject to availability and special needs.
g) Contract and Purchase Order:
(1) A contract shall be prepared detailing the consultant’s name , service being purchased, and total price of the service being purchased. The consultant shall sign three original copies. (2) The issuing Department/Division will obtain a completed IRS form W-9 from the consultant.
(3) Proof of insurance in accordance with the contract shall be obtained. This includes an insurance certificate and an additional ensured endorsement.
(4) If the vendor is located in or perform services within city limits or if vendor delivers products in company owned vehicles, a Business License is re quired. Visit the City’s website www.ci.richmond.ca.us/businesslicense if you want more
information.
(5) The contract shall be entered in the MUNIS Financial System. A copy of the contract together with the proof of insurance, evidence of the competitive solic itation, minutes and legal opinion shall be attached in the contract module.
(6) A purchase requisition shall be prepared in the MUNIS Financial System.
323

Page | 17

(7) The City Clerk, City Attorney, and Mayor/City Manager shall sign the three original copies of the contract.
(8) One original copy of the executed contract shall be returned to the contractor/service provider, the issuing Department shall keep the second copy and the third copy shall remain in the City Clerk’s Office.
h) Renewals: Contracts for ongoing services may in clude annual renewal provisions for up to three years. However, all contracts that exceed $10,000 in overall contract amount must be approved by the City Council. Cost increases related to such renewals shall not exceed the Consumer Price Index (CPI) adjus tments unless approved in advance by the Finance Director.
i) Change Orders for Product: The Purchasing Division is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purch ase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. j) Change Orders for Services: The City Manager is authorized to issue change orders for changes or additions to the origi nal purchase that result in less than $10,000 aggregate change in purchase price. Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval.

D. Section IV – Professional Services

1. Purpose
Provide guidelines for the purchase of professional services. Professional services are those activities performed by a consultant or firm who possesses a high degree or expertise in a particular profession. This would generally include (but not be limited to) a rchitectural, landscape architectural, engineering, environmental, land surveying, construction project management, accounting/auditing, financial, legal, and other administrative services.

2. Informal Request for Proposal or Request for Qualifications <$50,000.00 Professional service contracts exceeding $10,000 must be awarded by the City Council.

An informal Request for Proposal (RFP) or a Request for Qualifications (RFQ) process shall be used for any solicitation under $50,000. These professional service a greements shall have sufficient documentation of background analysis to support the contract. Informal solicitations should be used to assure quality services are received for a reasonable price. 324

Page | 18

The Department/Division shall strive, whenever possible, to solicit at least three qualifications/proposals in writing. It is important that the specifications are accurate and comprehensive.

Informal Request for Proposal or Request for Qualifications:
a) Documentation – Informal quotations must be documented to the satisfaction of the Finance Department. Documents should include:
(1) The name of the company
(2) The person giving the quote
(3) The date and time the quotes were received
(4) Understanding of the required scope of services.
(5) Specialized experience of the firm and its personnel relative to the required services.
(6) References who can be contacted to verify past record of performance, i.e., completion of quality product, in a timely manner, and within budget constraints.
(7) The capacity of the firm to perform the subject project within a required timeframe.

(8) Estimated price
b) Evaluating Informal RFP/RFQ: The Department/Division Head or designee(s) shall select the consultant which, in their evaluation process, is the mo st qualified to perform the work. The evaluation and selection process shall be based upon the following considerations:
(1) General quality and responsiveness to the request, including but not limited to:
• Responsiveness to the terms, conditions, and items o f performance;
• Grasp of the problem, work to be performed, and approach to be used
(2) Organization and personnel making the proposal;
• Evidence of good organizational management practices. • Qualification of the personnel.
• Specialized experience of the firm and its personnel relative to the required services.
• References who can be contacted to verify past record of performance (i.e., completion of a quality product in a timely manner and within budget constraints).
325

Page | 19

• Previous consultant experience
• The final condition of the firm
• Capacity of the firm to perform the subject project within a required timeframe
(3) If appropriate, the price, in any of the following formats, may be considered.
• Total price and price breakdown
• Price range
• Cost schedule
c) Negotiation: The Department Head or designee(s) shall discuss with the highest ranked firm(s) the requirements of the project, the scope of services needed to meet the requirements, and negotiate a reasonable fee/contract for the established work assignment.
d) Contract and Purchase Order:
(1) A contract shall be prepared detailing the consultant’s name, service being purchased, and total price of the service being purchased. The consultant shall sign three original copies.

326

Page | 20

(2) The issuing Department/Divisio n will obtain a completed IRS form W-9 from the consultant.
(3) Proof of insurance in accordance with the contract shall be obtained. This includes an insurance certificate and an additional ensured endorsement.
(4) If the vendor is located in, or perform servic es within city limits or if vendor delivers products in company owned vehicles, a Business License is required. Visit the City’s website
www.ci.richmond.ca.us/businesslicense if you want more
information.
(5) The contract shall be entered in the MUNIS Financial System. A copy of the contract together with the proof of insurance, evidence of the competitive solicitation, minutes and legal opinion shall be attached in the contract module.
(6) A purchase requisition shall be prepared in the MUNIS Financial System.
(7) The City Clerk, City Attorney, and Mayor/City Manager shall sign the three original copies of the contract.
(8) One original copy of the executed contract shall be returned to the contractor/service provider, the issuing Department shall keep the second copy and the third copy shall remain in the City Clerk’s Office.
e) Renewals: Contracts for ongoing services may include annual renewal provisions for up to three additional years. However, all contracts that exceed $10,000 in overall contract amount must be approved by the City Council. Cost increases related to such renewals shall not exceed the Consumer Price Index (CPI) adjustments unless approved in advance by the Finance Director.
f) Change Orders for Product: The Purchasing Division is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. g) Change Orders for Services: The City Manager is authorized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price. Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval.

3. Formal Request for Proposal or Request for Qualifications > $50,000.00 Professional service contracts exceeding $10,000 must be awarded by the City Council.
327

Page | 21

A Formal sealed Request for Pr oposal (RFP) or a Request for Qualifications (RFQ) process shall be used, for any solicitation exceeding $50,000, thereby assuring the City that it has engaged the most qualified consultant available for the engagement. The formal solicitation process generally takes more time and expense than informal solicitations of qualifications.

The Formal Request for Proposal or Request for Qualifications shall include:
a) Developing the RFP or RFQ: Because RFP’s and RFQ’s ask for a subjective product, they should contain the greatest detail possible, and may include the following:
(1) A precise description of the problem or objective
(2) The services to be performed
(3) The product to be provided
(4) The anticipated time schedule for:
• Submittal of RFP/RFQ (date and time)
• Any pre-proposal conference (date, time and location) • Review and evaluation of the proposals
• Award of the contract
• Commencement of the work on the project
• Completion date
(5) Evaluation factors and the relative importance of each (6) Expectations or limitations on the part of the City • The format, form and quantity of any expected reports • The extent/nature of assistance/cooperation available from the City
(7) Expected content of the RFP/RFQ, including:
• The overall description of techniques to be used
• Listing of similar services provided to other clients • Listing of available references to contact
• Description and qualifications of assigned lead and
supporting personnel
• Time and staff expected to be expended
• Facilities and equipment to be used
• Portion of contract to be performed by sub-contractors • Subcontractors / Sub consultants qualifications
• Cost, in summary and total, and desired method of
payment. The RFP/RFQ for services may, but is not required to; state the amount budgeted for the service.
(8) Contractual requirements including, but not limited to:
• Prohibition against assignment
• Indemnification
328

Page | 22

• Insurance requirements
• Warranties
• Compliance with federal, state and City laws, rules and regulations
• Compliance with any grant related regulations
• Sample contract
b) Issuing the RFP/RFQ
(1) To ensure maximum exposure and competition, the issuing department shall submit the RFP/RFQ documents to the
Purchasing Division to post to the City’s BidsOnline System. Also submit to Purchasing a list of potential firms to receive the RFP/RFQ.
(2) A reasonable length of time between solicitations and closing dates must be allowed to provide potential respondents time for preparation in accordance with the complexity, the s ize of the project, and the scope of the advertising.
(3) City staff may conduct conferences to explain the requirements of the project. A sufficient amount of time should be allowed after the RFP/RFQ has been issued to allow potential respondents to become f amiliar with the project. Any clarification or changes required to the RFP/RFQ, as a result of the conference, shall be added as a written amendment. A summary of the conference shall be provided to all prospective respondents receiving the request.
(4) Amendments should be used to make any changes in quantities descriptions, schedules, or to correct defects or ambiguities in the original RFP/RFQ. Amendments are provided to ensure that all potential respondents are furnished with the same information with which to prepare proposals. Amendments to the RFP/RFQ shall be identified as such and shall require acknowledgment as such by firms receiving the RFP/RFQ within a reasonable time period before the closing date. If the time and date established for the receipt of proposals does not allow sufficient time for consideration and changes, the time and date will be modified by amendment.

329

Page | 23

c) Proposal Opening:
(1) Proposal shall be submitted electronically through the BidsOnline System, to the issuing Department or to the Cit y Clerk’s office and shall be clearly identified with the Proposal number on the envelope.
(2) Any proposal received after the time specified in the RFP/RFQ shall be returned unopened.

(3) Respondents may modify or withdraw their proposals prior to the established closing date and time, without penalty. However, any modifications submitted after the established closing date and time will not be accepted. Such modifications will be returned to the respondent, unopened.
(4) Proposals and modifications shall be shown only to the evaluation committee personnel, the City Clerk or his/her designee, the Department Head and the Finance Department until a recommendation is made to Council or all proposals have been rejected.
d) Rejection of Proposals: The City reserves the right to reject any and all proposals, to accept or reject any one or more items of a proposal, or to waive any irregularities or informalities in the proposal or the RFP/RFQ process if to do so is deemed to best serve the interests of the City. e) Evaluation Factors and Method:
(1) Because unique services are requested, cost is not considered the primary selection criteria.
• General quality and responsiveness of the proposal,
including but not limited to:
o Responsiveness to the terms, conditions, and items
of performance;
o Completeness and thoroughness of the proposal;
o Grasp of the problem, work to be performed, and
approach to be used.
• Organization and personnel making the proposal:
o Evidence of good organizational and management
practices.
o Qualification of the personnel.
o Specialized experience of the firm and its personnel
relative to the required services.
o References who can be contacted to verify past
record of performance, i.e., completion of a quality
330

Page | 24

product, in a timely manner, and w ithin budget
constraints.
o The financial condition of the firm.
o Capacity of the firm to perform the subject project
within a required time frame

• If appropriate, the price, in any of the following formats, may be considered.
o Total price and price breakdown.
o Price range.
o Cost schedule.
331

Page | 25

(2) A Selection Committee shall be formed to evaluate the submitted data and determine the consultants that should receive further consideration. The Committee shall be appointed by the issuing department and may consist of mo re than one department. For example one or more people from the issuing department, one person from Finance, one person from the City Attorney’s office, an expert in the field or one or more employees from another department.
(3) The Selection Committee may ch oose to interview all of the responding consultants, only the top few ranking consultants or to not perform interviews.
(4) After the interviews (if applicable), the Selection Committee shall rank the consultants based on their proposals, interviews, and references.
f) On-Call (Ongoing) Professional Services
(1) In some instances it is in the best interest of the City to have on- call contracts with multiple consultants for the same or very similar services (i.e. services that can be defined as to scope of work but not as to required events such as soils testing, contract building inspection services, architectural services, etc.) These services would best be handled by establishing an eligibility list and by entering into annual on -call processional service contracts.
(2) The process for selecting firms for annual ongoing professional service contracts shall be generally the same as for other professional services contracts. However, multiple firms may be awarded an on-call contract based on the RFP/RFQ process and may be placed on the eligibility list. Additional firms/individuals may also be awarded contracts and placed on the eligibility list at a later date, using the RFP/RFQ process without impacting contracts currently in place.

(3) As events occur and need arises, work may be assigned to the consultants on the eligibility list. The Department Head shall make a reasonable attempt to rotate work between consultants subject to availability and special needs or by soliciting proposals from the consultants on the eligibility list. g) Negotiation: The Department Head or designee(s) shall discuss with the highest ranked firm(s) the requirements of the project, the scope of services needed to meet the requirements, and negotiate a reasonable fee/contract for the established work assignment.

332

Page | 26

h) Awarding the Contract:

The Department Head/Division Head shall prepare an agenda report to City Council recommending the most responsive consultant. The Council shall then award the contract in a public meeting. All contracts exceeding $10,000 must be awarded by the City Council. Otherwise:
(1) Such purchases are void and not considered an obligation of the City.
(2) Invoices may be returned to the contractor/service provider unpaid.
(3) The person ordering the unauthorized purchase may be held personally liable for the costs of the contract.
i) Contract and Purchase Order:
(1) A contract shall be prepared detailing the consultant’s name, service being purchased, and total price of the service being purchased. The consultant shall sign three original copies. (2) The issuing Department/Division will obtain a completed IRS form W-9 from the consultant.
(3) Proof of insurance in accordance with the contract shall be obtained.
(4) If the vendor is located in, or perform services within city limits or if vendor delivers products in company owned vehicles, a Business License is required. Visit the City’s website
www.ci.richmond.ca.us/businesslicense if you want more
information.
(5) The contract shall be entered in the MUNIS Financial System. A copy of the contract together with the proof of insurance, evidence of the competitive solicitation, minutes and legal opinion shall be attached in the contract module.
(6) A purchase requisition shall be prepared in the MUNIS Financial System.
(7) The City Clerk, City Attorney, and Mayor/City Manager shall sign the three original copies of the contract.

(8) One original copy of the executed contract shall be returned to the contractor/service provider, the issuing Department shall keep the second copy and the third copy shall remain in the City Clerk’s Office.

333

Page | 27

j) Renewals: Contracts for ongoing services may include annual renewal provisions for up to three additional years. However, all contracts that exceed $10,000 in overall contract amount must be approved by the City Council. Cost increases related to such renewals shall not exceed the Consumer Price Index (CPI) adjustments unless approved in advance by the Finance Director.
k) Change Orders for Product: The Purchasing Division is authorized to issue change orders for changes or additions to the original p urchase that result in less than $10,000 aggregate change in purchase price.

Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval. l) Change Orders for Services: The City Manager is autho rized to issue change orders for changes or additions to the original purchase that result in less than $10,000 aggregate change in purchase price. Change orders in excess of the $10,000 aggregate change in purchase price shall be brought to the City Council for approval.

E. Section V – Procurement During a Proclaimed Emergency or Disaster

1. Purpose
This Policy modifies the City’s normal purchasing practices (pursuant to Municipal Code-Chapter 2.52 – Contracting and Purchasing Procedures) to assure that, in both emergency and exigent circumstances caused by a proclaimed disaster or emergency, the City is able to acquire the goods and services required to address an immediate threat to life safety, public health, or to eliminate or reduce an immediate threat of si gnificant damage to improved public and private property through cost -effective measures while still maintaining an effective purchasing process and complying with applicable local and state purchasing laws. Where the City is included in a major disaster or emergency declared by the President of the United States, this Policy also assures that City procurements comply with Federal regulations applicable to FEMA disaster grant reimbursement as defined in Title 2 of the Code of Federal Regulations, Part 200 (2CFR Part 200).

Notwithstanding the terms of this policy, nothing contained herein shall conflict with Federal procurement regulations as currently defined in 2 CFR Part 200.

2. Definitions
“Proclaimed Emergency or Disaster” exists if

1. The Governor has dec lared a state of emergency for an area which includes the geographic territory of the City; or

2. The City Manager, Police Chief, or Public Works Director of the City has declared an emergency in the City;
334

Page | 28

“Exigent Circumstances” are situations in which

1. A disaster or emergency has been proclaimed, and

2. The public need for goods and services required to address immediate threats to life safety, public health, or to eliminate or reduce an immediate threat of significant damage to improved public and private property through cost -effective measures will not permit competitive solicitation.
“Purchase(s)” as defined in this policy means the purchase(s), rental(s) or lease(s) of goods or services related to a Proclaimed Emergency or Disaster. “Simplified Acquisition Threshold” means the dollar amount below which a non-Federal entity may purchase property or services using small purchase methods, as set forth in Title 2 of the Code of Federal Regulations, Part 200, as it may be amended from time to time. Simplified Acquisition Procedures are described in Federal Acquisition Regulations (FAR) Part 13.

3. Delegations of Purchasing Authority in Exigent Circumstances If the City Manager or his/her designee determines that goods and services must be procured before the Elected governing board is able to assemble and approve purchases, the City Manager has authority, subject to the limitations set forth in sub -paragraphs (a) and (b), to approve the immediate rental or purchase of any equipment, supplies, services o r other items necessary to respond to an immediate threat to life safety, public health, or to eliminate/reduce an immediate threat of significant damage to improved public and private property through cost-effective measures
(a) Limits of Single Purchase Authority. The City Manager, shall have the authority to make individual purchases up to a maximum of $150,000 without prior City Council approval. (b) Limits of Aggregate Purchase Authority. The City
Manager shall have the authority to make aggregate
purchases up to a maximum of $1,000,000 without prior City Council approval.

All procurements that exceed the City Council’s approval threshold of $10,000 shall be presented to City Council for ratification as soon as possible.

Delegation for purchasing authority t o EOC Director or the Finance Director
The EOC Director, or the Finance Director, shall be designees of the City Manager at any time that the City Manager is not available to approve purchases as allowed in this section.

Sub-delegation of Purchasing Authority to Department Heads 335

Page | 29

If neither the City Manager nor the EOC Director or Finance Director is available, the police department watch commander, duty fire battalion chief, and/or duty public works department director have authority to rent or purchase from the nearest available source any equipment, supplies, services, or other items necessary for his or her department to respond to an immediate threat to life, public health, or safety, or to eliminate/reduce an immediate threat of significant damage to improved public and private property through cost- effective measures, up to a maximum of $150,000.

Administrative Procedures/Reporting Requirements
• As soon as possible after purchases are made under this section, the City Manager, EOC Director, Finance Director or department head shall submit to the Purchasing Division a requisition and a notation that the commodity has been ordered on an emergency basis from the vendor designated.
• If the City Manager/EOC Director/Finance Director is unavailable, and the delay in getting his/her signature would imperil life safety, public health or improved property, the police department watch commander, duty fir e battalion chief, and/or duty public works department director or his/her designee may approve the emergency purchase of $150,000 or more.
• The Purchasing Division shall have the authority to approve all disaster related purchases under $150,000.
• The Purchasing Division will expedite the verification of funds available and complete the preparation of the purchase order

4. Procurement Procedures in Exigent Circumstances
Upon receipt of requisitions under Section V, the Purchasing Division shall prepare purchase orders for the emergency equipment, supplies, services or other items in accordance with the requirements of this section.

Exempt Purchases
Purchases up to $150,000 shall not be required to be formally bid. Purchases greater than $150,000 may be made following the procedures specified in this section. The signature(s) of the City Manager, Purchasing Division and/or Department Head are still required as provided in Section V.

Justification of Sole Source or No-bid Contracts
Where exigent circumsta nces require immediate procurement from the nearest available source,
(a) the Procurement Officer shall use the "Justification Form For Emergency or Sole Source or No-Bid Purchase."
336

Page | 30

(b) Procurement should be limited to that portion of the work that must be performed immediately, allowing subsequent procurement by competitive proposals of the remainder of the work.
(c) Emergency Sole Source or No Bid acquisitions shall be necessary for one of the following reasons:
(i) Placement of emergency protective measures
(ii) Procurement of scarce commodities, goods, or
services
(iii) Acquisition or rental of emergency equipment
(iv) Emergency consulting services
(v) Emergency road clearance
(vi) Other emergency requirements.

Provision for Alternate Bid Solicitation Procedures
The City's normal requirements for sealed bids shall not apply to acquisitions under Section V. However, the Procurement Officer shall conduct telephonic or other electronic bid solicitation from potential vendors or suppliers, in an effort to obtain multiple competitive proposals when and if time allows in light of the exigent circumstances; however, all quotations must be fully documented as to the details of the purchase and contain a scope of work if at all possible and a not-to-exceed contract limit.

Locations of Postings for Requests for Proposals or Solicitation of Bids The Procurement Officer may modify normal requirements for public posting of requests for proposals or solicitation of bids. Notices soliciting bids or requests for proposals shall b e posted at the Emergency Operations Center or Alternate Emergency Operations Center, if the Primary Emergency Operations Center is not being used.

Length of Time for Posting Requests for Proposals or Solicitation of Bids The Procurement Officer may sho rten the normal bid period from 14 days to 24 hours as needed to deal with the emergency circumstances and to expedite the award of contracts for emergency equipment, goods, or services. The Procurement Officer should seek to assure that the shortened bid period allows multiple suppliers to submit bids.

Number of Bids Required
Solicited bids that are non -responsive do not count towards the minimum number of bids required when there is a declared emergency or disaster in the Jurisdiction. All such no-bids must be documented as to time, date and person or company contacted, with a reason for the no-bid, if possible. 337

Page | 31

F. Section VI – Purchases with Federal Grant Funds
The following section is being added to the Purchasing Policy to establish standards for the procurement of supplies, equipment, real property and other services as required by 2 CFR 200.317 through 200.326 to comply with the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards commonly called “Uniform Guidance”. o When using federal grant funds, follow applicable state statutes and rules and local policies only to the extent that those statutes, rules, and policies do not conflict with the Uniform Administrative Requirements (UAR) outlined below. 2 CFR 200.318(a)

o Contract performance and payments must be monitored during the course of the contract. 2 CFR 200.318(b).

o Written standards of conduct and Conflict of Interest:
o No employee, officer, or agent must participate in the selection, award, or administration of a contract supported by a federal award if he or she [the employee, officer, or agent], any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ
 the employee, officer, or agent;
 an immediate family member of the employee, officer, or agent; or
 the partner of the employee, officer, or agent
has a financial or other interest in or will receive a tangible personal benefit from a firm considered for the contract. Officers, employees, and agents must neither solicit nor accept gratuities, favors, or anything of monetary value from contractors or parties to subcontracts. 2 CFR 200.318(c)(1)
o Before starting a procurement process:
o Review all proposed procurements to avoid
unnecessary/duplicative purchases of equipment, supplies, and services. Consider whether it will it save money/time to consolidate procurements; if so, consolidate. If relevant, consider whether a lease or a purchase is the most economical approach (and document how you came to your decision). 2 CFR 200.318(d).
o Look for state or local intergovernmental agreements (such as competitive bidding group purchasing programs, state term contracts, GSA contracts, or formal intergovernmental
agreements—but get awarding ag ency approval before using one of those agreements. 2 CFR 200.318(e).
338

Page | 32

1. Purchasing Guidelines
a) Documentation
(1) Keep records showing:
• Basis for vendor selection
• Documentation of lack of competition when competitive bids or offers are not obtained
• Why you chose a specific procurement method;
• The basis for your award (why did you select the contractor or vendor you selected? Why did you reject the others?); • The basis for the contract price; and
• Any other significant decisions that were a p art of the procurement process resources.

b) Award only to “responsible contractors possessing the ability to perform successfully under the terms and conditions of a proposed procurement.” In determining which contractors are responsible, you must consider “matters such as contractor integrity, compliance with public policy, record of past performance, and financial and technical resources.” 2 CFR 200.318(h). (Note: This means that your solicitation documents must ask for information that will allow you to assess whether a contractor is “responsible.”)
c) Keep records to detail the history of each procurement. These records must include, at least, records showing your rationale for (1) the method of procurement, (2) the selection of contract type, (3) contractor selection or rejection, and (4) the basis for the contract price. 2 CFR 200.318(i)
d) Prohibit awarding time and materials type contracts unless (1) you have determined that no other contract is suitable and (2) the contract includes a ceiling price that the contractor exceeds at its own risk. The UAR defines a time and materials type contract as “a contract whose cost to a non‐Federal entity is the sum of: (1) the actual cost of materials; and (2) direct labor hours charged at fixed hourly rates that reflect wages, general and administrative expenses, and profit.” 2 CFR 200.318(j). For the purposes of this policy, the term “non -Federal Entity” means the City of Richmond and/or the Housing Authority for the City of Richmond.
e) Restricting competition . The follow ing actions on procurements funded with federal grants are prohibited:
 Allowing contractors that develop or draft specifications, requirements, statements of work, invitations for bids, or requests for proposals to compete for such procurements; 339

Page | 33

 Placing u nreasonable requirements on firms for them to qualify to do business (if you’re not sure if a requirement is unreasonable, ask the Federal awarding agency);
 Requiring unnecessary experience or excessive bonding;  Permitting noncompetitive pricing practices between
companies;
 Awarding contracts to consultants on “retainer” contracts;  Permitting organizational conflicts of interest
 Specifying a brand name product without permitting an equal product to be offered, and without describing the performance requirements that must be met for a product to qualify as an equal;
 Acting arbitrarily in awarding contracts. 2 CFR 200.319(a) f) Prohibit awards based on local geographic preferences, except where applicable Federal statutes expressly mandate or encourage geographic preference . However, geographic location may be a selection criteria when awarding contracts for architectural or engineering services, provided that using such criteria “leaves an appropriate number of qualified firms” to compete for the work, “give n the nature and size of the project.” 2 CFR 200.319(b).
g) All solicitations must identify (1) all requirements which the offerors must fulfill and (2) all other factors to be used in evaluating bids or proposals. 2 CFR 200.319(c)
h) If you use prequalified lists of entities or products when procuring goods or services, make sure those lists are “current and include enough qualified sources to ensure maximum open and free competition,” and do not preclude other potential entities or products from participating in the solicitation. 2 CFR 200.319(d).

2. Methods of Procurement to be followed
a) Procurement by sealed bids require formal advertising. Bids are publicly solicited (Post to the BidsOnline System) and a firm fixed price contract (lump sum or unit price) is awa rded to the responsible bidder whose bid, conforming with all the material terms and conditions of the invitation for bids, is the lowest in price. The sealed bid method is the preferred method for procuring construction.
(1) In order for sealed bidding to be feasible, the following conditions should be present:
• A complete, adequate, and realistic specification or purchase description is available;
• Two or more responsible bidders are willing and able to compete effectively for the business; and
340

Page | 34

• The procurement lends itself to a firm fixed price contract and the selection of the successful bidder can be made
principally on the basis of price.
(2) If sealed bids are used, the following requirements apply:
• The invitation for bids must be publicly advertised, providing suppliers sufficient response time prior to the date set for opening the bids;
• The invitation for bids, which will include any specifications and pertinent attachments, must define the items or services in order for the bidder to properly respond;
• The bids must be opened publicly at the time and place prescribed in the invitation for bids;
• A firm fixed price contract award will be made in writing to the lowest responsive and responsible bidder. Where
specified in bidding documents, fa ctors such as discounts, transportation cost, and life cycle costs must be considered in determining which bid is lowest. Payment discounts will only be used to determine the low bid when prior experience indicates that such discounts are usually taken adv antage of; and
• Any or all bids may be rejected if there is a sound
documented reason. 2 CFR 200.320(c)
(3) Procurement by competitive proposals. The technique of competitive proposals is normally conducted with more than one source submitting an offer, and e ither a fixed price or costreimbursement type contract is awarded. It is generally used when conditions are not appropriate for the use of sealed bids.

If this method is used, the following requirements apply:
• Requests for proposals must be publicized and identify all evaluation factors and their relative importance. Any
response to publicized requests for proposals must be
considered to the maximum extent practical;
• Proposals must be solicited from an adequate number of qualified sources;
• The non-Federal entity must have a written method for conducting technical evaluations of the proposals received and for selecting recipients;
• Contracts must be awarded to the responsible firm whose proposal is most advantageous to the program, with price and other factors considered; and
341

Page | 35

• The non-Federal entity may use competitive proposal
procedures for qualifications-based procurement of
architectural/engineering (A/E) professional services
whereby competitors' qualifications are evaluated and the most qualified competitor is selected, subject to negotiation of fair and reasonable compensation. The method, where
price is not used as a selection factor, can only be used in procurement of A/E professional services. It cannot be
used to purchase other types of services though A/E firms are a potential source to perform the proposed effort. 2 CFR 200.320(d)
(4) Procurement by noncompetitive proposals is procurement through solicitation of a proposal from only one source and may be used only when one or more of the fol lowing circumstances apply:
• The item is available only from a single source;
• The public exigency or emergency for the requirement will not permit a delay resulting from competitive solicitation; • The Federal awarding agency expressly authorizes
noncompetitive proposals in response to a written request from the non-Federal entity; or
• After solicitation of a number of sources, competition is determined inadequate. 2 CFR 200.320(f)
342

Page | 36

b) Take certain steps to assure that minority firms and women’s business enterprises are used when possible. These steps are:
(1) Place qualified small and minority businesses and women’s business enterprises on solicitation lists;
(2) Assure that small and minority businesses and women’s business enterprises are solicited whenever they are potential sources;
(3) Divide total requirements into smaller tasks or quantities to permit maximum participation by small and minority businesses and women’s business enterprises;
(4) Establish delivery schedules which encourage participation by small and minority businesses and women’s business
enterprises;
(5) Use the services and assistance of the Small Business Administration (http://www.sba.gov) and the Minority Business Development Agency of the Department of Commerce
(http://www.mbda.gov); and
(6) Require prime contractors to take the same steps listed above. 2 CFR 200.321
c) Contract cost and price
(1) Perform a cost or price analysis in connection with every procurement action in excess of the Simplified Acquisition Threshold ($150,000), including contract modifications. Make the Independent Cost Estimates (ICE) before receiving bids or proposals. 2 CFR 200.323(a)
(2) Negotiate profit as a separate element of the p rice (1) for each contract in which there is no price competition and (2) in all cases where cost analysis is performed. 2 CFR 200.323(b)
(3) A prohibition on using “cost plus a percentage of cost” or “percentage of construction cost” methods of contracting. 2 CFR 200.323(d)

343

Page | 37

3. Federal Awarding Agency Review
a) The non-Federal entity must make available, upon request of the Federal awarding agency or passthrough entity, technical specifications on proposed procurements where the Federal awarding agency believes such review is needed to ensure that the item or service specified is the one being proposed for acquisition. This review generally will take place prior to the time the specification is incorporated into a solicitation document. However, if the non-Federal entity desires to have the review accomplished after a solicitation has been developed, the Federal awarding agency may still review the specifications, with such review usually limited to the technical aspects of the proposed purchase. 2 CFR 200.324(a)
b) The non -Federal entity must make available upon request, for the Federal awarding agency preprocurement review, procurement documents, such as requests for proposals or invitations for bids, or independent cost estimates, when:
(1) The non-Federal entity's proc urement procedures or operation fails to comply with the procurement standards in this part; (2) The procurement is expected to exceed the Simplified Acquisition Threshold ($150,000) and is to be awarded without competition or only one bid or offer is received in response to a solicitation;
(3) The procurement, which is expected to exceed the Simplified Acquisition Threshold, specifies a “brand name” product; (4) The proposed contract is more than the Simplified Acquisition Threshold and is to be awarded to other than the apparent low bidder under a sealed bid procurement; or
(5) A proposed contract modification changes the scope of a contract or increases the contract amount by more than the Simplified Acquisition Threshold. 2 CFR 200.324(b)
c) The non-Federal entity is exempt from the pre-procurement review in the above paragraph if the Federal awarding agency determines that its procurement systems comply with the standards of this part. (1) The non-Federal entity may request that its procurement system be reviewed by the Fede ral awarding agency to determine whether its system meets these standards in order for its system to be certified. Generally, these reviews must occur where there is continuous high -dollar funding, and third party contracts are awarded on a regular basis;
344

Page | 38

(2) The non-Federal entity may self-certify its procurement system.

Such self -certification must not limit the Federal awarding agency's right to survey the system. Under a self -certification procedure, the Federal awarding agency may rely on written assurances from the non-Federal entity that it is complying with these standards. The non -Federal entity must cite specific policies, procedures, regulations, or standards as being in compliance with these requirements and have its system
available for review. 2 CFR 200.324(c)

4. Bonding requirements
a) For construction or facility improvement contracts or sub contracts exceeding the Simplified Acquisition Threshold, the Federal awarding agency may accept the bonding policy and requirements of the local agency provided that the Federal awarding agency has made a determination that the Federal interest is adequately protected. If such a determination has not been made, the minimum requirements must be as follows:
(1) A bid guarantee from each bidder equivalent to five percent o f the bid price. The “bid guarantee” must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time specified. 2 CFR 200.325(a)
(2) A performance bond on the part of the contractor for 100 percent of the contract price. A “performance bond” is one executed in connection with a contract to secure fulfillment of all the contractor's obligations under such contract. 2 CFR 200.325(b) (3) A payment bond on the part of the contractor for 100 percent of the contract price. A “payment bond” is one executed in connection with a contract to assure payment as required by law of all persons supplying labor and material in the execution of the work provided for in the contract. 2 CFR 200.325(c)

5. Contracting Provisions
Appendix II to Part 200 - Contract Provisions for Non -Federal Entity Contracts Under Federal Awards
In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non -Federal entity under the Federal award must contain provisions covering the following, as applicable. 345

Page | 39

a) Remedies: Contracts for more than the simplified acquisition threshold currently set at $150,000, which is the inflation adjus ted amount determined by the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) as authorized by 41 U.S.C. 1908, must address administrative, contractual, or legal remedies in instances where contractors violate or breach contract terms, and provide for such sanctions and penalties as appropriate. b) Termination: All contracts in excess of $10,000 must address termination for cause and for convenience by the non -Federal entity including the manner by which it will be effected and the basis for settlement.
c) Equal Employment Opportunity: Except as otherwise provided under 41 CFR Part 60, all contracts that meet the definition of “federally assisted construction contract” in 41 CFR Part 60 -1.3 must include the equal oppor tunity clause provided under 41 CFR 60 -1.4(b), in accordance with Executive Order 11246, “Equal Employment Opportunity” ( 30 FR 12319, 12935, 3 CFR Part, 1964 - 1965 Comp., p. 339), as amended by Executive Order 11375, “Amending Executive Order 11246 Relati ng to Equal Employment Opportunity,” and implementing regulations at 41 CFR part 60, “Office of Federal Contract Compliance Programs, Equal Employment Opportunity, Department of Labor.”
d) Davis-Bacon Act, as amended : ( 40 U.S.C. 3141 - 3148). When required by Federal program legislation, all prime construction contracts in excess of $2,000 awarded by non -Federal entities must include a provision for compliance with the Davis -Bacon Act ( 40 U.S.C. 3141 - 3144) as supplemented by Department of Labor regulations ( 29 CFR Part 5, “Labor Standards Provisions Applicable to Contracts Covering Federally Financed and Assisted Construction”). In accordance with the statute, contractors must be required to pay wages to laborers and mechanics at a rate not less than the pre vailing wages specified in a wage determination made by the Secretary of Labor. In addition, contractors must be required to pay wages not less than once a week.

The non-Federal entity must place a copy of the current prevailing wage determination issued b y the Department of Labor in each solicitation.

The decision to award a contract or subcontract must be conditioned upon the acceptance of the wage determination. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency. The contracts must also include a provision for compliance with the Copeland “Anti-Kickback” Act: ( 40 U.S.C. 3145), as supplemented by Department of Labor regulations ( 29 CFR Part 3, “Contractors and Subcontractors on Public Building or Public Work Financed in Whole or in Part by Loans or Grants from the United States”).
346

Page | 40

The Act provides that each contractor or subrecipient must be prohibited from inducing, by any means, any person employed in the construction, completion, or repair of public work, to give up any part of the compensation to which he or she is otherwise entitled. The non-Federal entity must report all suspected or reported violations to the Federal awarding agency.
e) Contract Work Hours and Safety Standards Act: ( 40 U.S.C. 3701 - 3708). Where applicable, all contracts awarded by the non -Federal entity in excess of $100,000 that involve the employment of mechanics or laborers must include a provision for compliance with 40 U.S.C. 3702 and 3704, as supplemented by Department of Labor regulations ( 29 CFR Part 5). Under 40 U.S.C. 3702 of the Act, each contractor must be required to compute the wages of every mechanic and laborer on the basis of a standard work week of 40 hours. Work in excess of the standard work week is permissible pr ovided that the worker is compensated at a rate of not less than one and a half times the basic rate of pay for all hours worked in excess of 40 hours in the work week.

The requirements of 40 U.S.C. 3704 are applicable to construction work and provide that no laborer or mechanic must be required to work in surroundings or under working conditions which are unsanitary, hazardous or dangerous. These requirements do not apply to the purchases of supplies or materials or articles ordinarily available on the open market, or contracts for transportation or transmission of intelligence.
f) Rights to Inventions Made Under a Contract or Agreement : If the Federal award meets the definition of “funding agreement” under 37 CFR § 401.2 (a) and the recipient or subrecipient wishes to enter into a contract with a small business firm or nonprofit organization regarding the substitution of parties, assignment or performance of experimental, developmental, or research work under that “funding agreement,” the recipient or subrecipient must comply with the requirements of 37 CFR Part 401, “Rights to Inventions Made by Nonprofit Organizations and Small Business Firms Under Government Grants, Contracts and Cooperative Agreements,” and any implementing regulations issued by the awarding agency.
347

Page | 41

g) Clean Air Act : ( 42 U.S.C. 7401 - 7671q.) and the Federal Water Pollution Control Act ( 33 U.S.C. 1251 - 1387), as amended - Contracts and subgrants of amounts in excess of $150,000 must contain a provision that requires the non -Federal award to agree to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act ( 42 U.S.C. 7401- 7671q) and the Federal Water Pollution Control Act as amended ( 33 U.S.C. 1251 - 1387). Violations must be reported to the Federal awarding agency and the Regional Office of the Environmental Protection Agency (EPA).
h) Debarment and Suspension: (Executive Orders 12549 and 12689) – Verify that a vendor is not debarred, suspended or otherwise excluded from or ineligible for participation i n Federal assistance programs or activities. Confirm and document that vendors are not on the federal government’s Excluded Party list found at www.sam.gov.
i) Byrd Anti-Lobbying Amendment: ( 31 U.S.C. 1352) - Contractors that apply or bid for an award excee ding $100,000 must file the required certification. Each tier certifies to the tier above that it will not use, and has not used, Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award.

Such disclosures are forwarded from tier to tier up to the non -Federal award.

348

Page | 42

Attachment A
City of Richmond
RFP/RFQ Evaluation Committee Guidelines
(Sample Documents)

The Evaluation Committee (EC) has the authority to review and evaluate proposals received by the City in response to a specific Request for Proposals (RFP) or Request for Qualifications (RFQ) for the purpose of identifying the most com petitive or best qualified proposal(s) from responsive and responsible offerors.

Proposed General guidelines:

1. Identifying Evaluation Committee Members. The members of the EC should be identified prior to the solicitation issuance. Members of the EC should have professional interest and expertise to evaluate proposals and make recommendations that could lead to the selection of one or more offeror(s) who will provide products/services to the City in an acceptable manner pursuant to the RFP/RFQ.

2. EC Member Participation Form. The Project Manager (PM) will send an Evaluation Committee Member Participation Form to the individual EC members and each member shall return an executed copy to the PM.

3. Preparing the Evaluation Rating Matrix (Attachment C). The EC will identify mandatory, non - mandatory requirements, in addition to establishing evaluation criteria and assigned weight. The evaluation criteria and assigned weight shall be consistent with the criteria defined in the RFP/RFQ.

4. Initial Review of Proposals. The PM will review received Proposals for compliance with the submittal criteria and content requ irements. The EC will review Proposals that are deemed “responsive and responsible”. A responsive RFP/RFQ is one that meets all the terms, conditions and specification of the RFP/RFQ. A responsible RFP/RFQ is one where the proposer has the overall capability to satisfactorily perform the contract. “Non -Responsible” Proposals will not be evaluated and shall be rejected from any further consideration by the City.

5. Submitting Proposals to the EC. The EC members who have executed the Evaluation Committee Me mber Participation Form will be provided with all “responsive and responsible” Proposals and evaluation forms.

6. Independent and Individual Review. The EC shall review the received Proposals and independently score each Proposal. Scores shall be in acco rdance with the Evaluation Rating Matrix and shall represent each evaluator’s best objective judgment.

7. Convening EC Committee Meetings. The EC meeting(s) shall be convened by the PM on the date and time designated. Each member will bring his/her compl eted technical evaluation form. 349

Page | 43

The EC members will discuss the individual scores and, as a result of the discussion, each member may adjust the member’s individual scoring up or down as appropriate. The PM shall average the individual scores to determine the Offeror’s score for that particular question/requirement.

8. Analyzing Cost Proposals. When applicable, the City may utilize lowest cost, lowest total cost, Total Cost of Ownership (TCO) or greatest savings to determine best offeror; provided, however, the City must abide by any statements within the RFP regarding cost evaluation.

9. Overall Scores Preceding Negotiations. The EC will identify which offeror(s) submitted the best ranked, responsive and responsible proposal(s) according to the evaluati on and scoring by the EC. The Cost and Evaluation Rating Matrix summary or such other appropriate document should be used to determine the award recommendation and the offeror(s) that will participate in negotiations, if applicable.

10. Convening a Negotiation Team. If the EC elects to initiate negotiations, as approved by the PM, in order to ensure that the City is receiving the best value and/or the most cost-efficient goods and/or services, then a Negotiation Team (NT) will convene. The NT may inc lude any or all members of the EC or other individuals as appropriate; provided, however, only the EC may rescore proposal revisions following negotiations. The NT will develop the Negotiation Plan and Negotiation Script.

11. Capturing Negotiation Results & Award Recommendation. If the City elects to negotiate with identified offerors, the offerors will each be asked to submit a Proposal Revision following each round of negotiations, which Proposal Revision will then augment the original RFP submission.

Each Proposal Revision will be evaluated and re-scored by the EC utilizing the same evaluation criteria. Upon completion of negotiations, the PM will prepare the Evaluation and Selection Report and obtain EC’s signatures approving the award recommendation.

12. Final Contract Award. Based on the recommendations contained in the Evaluation and Selection Report, the PM will prepare an Agenda Report to present to Council. Upon Council approval, the PM will process the contract to be executed by the offeror and the City.

13. Maintaining Agency Records. All evaluation/negotiation documents/forms completed by each evaluator and by the EC and NT will be collected by the PM and become part of the official records and subject to the Public Records Act and Record Retention Policy. The retention period for these documents is Audit plus four years.

350

Page | 44

Attachment B

EVALUATION COMMITTEE MEMBERS PARTICIPATION FORM

(Solicitation Title)

REQUEST FOR PROPOSAL
(Sample Documents)

You have been asked to participate in the evaluation of offers that have been received as the result of the competitive solicitation referenced above.

It is essential that the integrity of the evaluation process is maintained to ensure that each bidder or offeror is given fair and equal consideration. Your knowledge of and/or past or current association with particular firms and/or individuals must not influence your evaluation. The written responses to the solicitation and any subsequent respective clari fications and/or negotiations must stand alone, and you are required to be particularly objective and guard against any tendency to favor a particular firm or individual.

You are required to report to the Project Manager any actual or potential conflict of interest.

An additional consideration is the need to maintain confidentiality during the evaluation regarding the contents of the offerors’ or bidders’ responses, as well as the proceedings of the evaluation committee. Any inquiries regarding the eval uation of this particular solicitation must be directed to the Project Manager.

You are asked to read and sign the following statement:

I have read, understand, and agree to the above, and I will adhere to the policies presented.

I do not know of any c onflict of interest on my part, nor have I accepted any gratuities or favors from potential offerors or bidders, which would compromise my objectivity. I shall keep all evaluation proceedings in strict confidence prior to contract award. I will do my best to base my recommendation for contract award solely upon the evaluation criteria in the solicitation and each offeror’s or bidder’s response.

Committee Member Signature Date
Print Name and Title of Committee Member Date

351

Page | 45

352

Page | 46

Scoring Mechanisms (SAMPLE)

For the evaluation criteria, the following scoring mechanism will be used. The points awarded for each criterion are determined by multiplying the weight by the assigned score.

Exceptional (Assigned Scores - 22 to 25) –
 The approach will yield a result that exceeds the Objectives qualitatively.  The proposal offers an approach or features with little or no risk.  The response covers areas not originally addressed within the RFP category and includes additional information and recommendations that would prove both valuable and beneficial to the City of Richmond.
 This response is considered an excellent approach demonstrating the Supplier’s authoritative knowledge and understanding of the project.

Exceeds Objectives (Assigned Scores - 19 to 21) –
 A very good response that shows experience and knowledge within the category. The Supplier provides insight into their expertise, knowledge and understanding of the subject matter.
 The collective approach yields a qualitative benefit to the project that i s beyond the minimum objectives.
 The approach being proposed or the majority of the features are acceptable or above the objectives set out in the RFP.
 The Supplier can easily implement additional features or options. A minimal number of resources will be required from the City of Richmond.

Meets Objectives (Assigned Scores - 14 to 18) –
 The approach or the majority of the features proposed meet the objectives.  No apparent deficiencies noted. Some items could be improved upon but are still considered ac ceptable. To enhance them may require rework and resources from the Supplier and/or the City.
 The ranking should reflect some qualitative achievement(s) such as acceptable delivery timeframe, end-user training program, etc.

Fails to Meet Objectives (Assigned Scores - below 14)-
 The proposed approach or a majority of the features for the item are deficient. The approach taken is undesirable and correction would require a major and material change in the proposal.
 The correction of any deficiencies either c ollectively or individually, poses a serious problem in correction or has a "domino" effect on the other design features.

353

Page | 1

POLICY: Employee Meal and Food Policy
ESTABLISHED: October 25, 2011
RESOLUTION NO.: Not Applicable; DATE: Not Applicable
I. Employee Meal and Food Policy
A. Purpose
To establish guidelines for the provision of food and refreshments for meetings, seminars and other authorized City of Richmond functions.

B. Policy
It is the policy of the City of Richmond that food and refreshments will not be provided for routine, regularly scheduled departmental meetings. Food includes meals, beverages, snacks, drinking water, etc. Under no circumstances is alcohol an allowable food expense.

City funds are not to be expended on events, milestones, parties or celebrations that are primarily personal in nature, wh ere employees may choose to acknowledge or celebrate with other employees. These types of occasional short department celebrations are permitted, but the use of City funds is not allowed. Examples of these types of events include:
 Birthday celebrations
 Baby showers or new baby congratulations gifts
 Graduation gifts/acknowledgements
 Engagements or wedding showers, gifts or parties
 Holiday parties (Thanksgiving, Christmas, etc) and similar events

The following are allowed exceptions to this policy:
354

Page | 2

1. Meals/food purchases necessary for the City’s convenience and provided on City premises where business is normally conducted. Examples include:

Emergency situations such as natural disasters or significant public safety events, but may also include intra-departmental meetings or training sessions, where the meeting or training session continues during the meal period and the employees are not permitted to leave the premises of the meeting site.

Meals should be provided only to facilitate the effective and efficient operations of the department involved.

2. Off-site business meals for a clear business reason. When submitted for reimbursement or paid with a CAL-Card, an itemized receipt is required along with documentation showing the business purpose, at tendees (must include non-City participants), and location. Restaurant business meals solely between City employees are not reimbursable except when the business meal has been approved by the City Manager (City Manager must sign Food and Meals Expense Documentation Form AP521-1).

3. Refreshments for breaks and off-site lunches for Interview Panel which include external members.

4. Food for City Council Meetings and Advisory Committees.

5. Meetings with the public, including Community/Customer partnerships.

6. Lunches with Councilmembers are limited to Department Directors.

7. Food for City sponsored employee events.

8. Meal allowance for Local 1021 employees under MOU Section D1 and Local 21 employees under MOU Article 8, Section 72.

9. Meals/food during travel – Refer t o AP 508 Travel Expense Policy and Procedure.

10. The City will centralize the purchase of coffee and soft drinks in bulk on a quarterly basis for the purpose of serving guests to the City. If the supply is depleted before the end of the quarter because of ex tensive employee use, then employees will have to supply their own beverages until the start of the new quarter when the supply will be replenished.

Requests for food other than meetings listed above must be approved, in writing, by the City Manager.

355

Page | 3

C. Required Documentation
Food purchased by the City in conjunction with its official business or for City sponsored events must include an itemized receipt along with documentation showing the purpose of business being conducted, and a list of attendees and affiliation. Meals should be appropriate and consistent with the maintenance of a reasonable living standard.

Please attach required documentation to Food and Meals Expense Documentation Form (AP 521-1).

D. Authorization
The Department Director shall provide approval for all food purchases for City sponsored functions prior to the cost being incurred.
356

Page | 1

POLICY: Travel Expense Policy and Procedure
ESTABLISHED: August 25, 1999
RESOLUTION NO.: Not Applicable; DATE: Not Applicable
I. Travel Expense Policy and Procedure
A. Purpose
To ensure that uniform and standard procedures are followed which are consistent, comprehensive and explicit for approving all expenditures and the reimbursements to City employees for travel and business expenses incurred in connection with service performed on behalf of the City of Richmond.

1. Authorization and Approval Levels
Before incurring any expense(s), preapproval is required and mandatory for all City of Richmond employees for the purpose of business travel, training and the travel associated with the training by submitting a completed Request for Travel/Training Form (AP 508-2) with all required approval signatures. An event (i.e., training, workshop, conference, etc.) informational brochure or flyer with detailed information must be attached to the Request for T ravel/Training Form (AP 508-2).
a) Employees

Approvals are as follows:
(1) Approval for travel/training in California (including within the local Bay Area) or Nevada is to be given by immediate supervisor and the Department Head.
(2) Approval for travel/training outside of California and Nevada must be approved by the City Manager along with the approvals in (1) above.
(3) Approval for international travel/training must be approved by City Council along with the above approvals in (1) and (2).

These approvals may be delegated to an authorized designee who shall be at the department or division director level or above. The Travel/Training Expense Report Form for Reimbursement (AP 508 -1) and the International Travel/Training Expense Report Form for Reimbursement (AP 508-4), use of determined by ultimate destination of travel, will henceforward be referred to as the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4).

357

Page | 2

b) City Manager, City Attorney and City Clerk
Travel and/or training expenses for the City Manager, City Attorney and City Clerk are subject to the approval by the Mayor. City Council approval is required for international travel.

If an employee incurs a travel expense without prior authorization as set forth in this Travel Expense Policy and Procedure, and later seeks reimbursement for such expense, such expense may not be reimbursed unless employee demonstrates good cause, as determined by required approvers in the Request for Travel/Training Form (AP 508-2).

If an employee uses a City of Richmond issued credit card for any travel - related expenses, such expenses shall not be eligible for reimbursement.

2. Compliance Responsibility
All employees who attend trainings and/or travels on behalf of the City of Richmond are responsible for understanding and adhering to this policy.

Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4) will be periodically reviewed to determine compliance with City policy and procedure. The Accounts Payable Div ision is responsible for processing Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4) for payment.

Elected officials and employees required to file Form 700 should note that some expenditure reimbursements may be subject to repo rting under the Political Reform Act and other laws. All documents regarding agency travel expenditures are public records subject to disclosure under the Public Records Act.

3. Policy Change and Disputes
Any dispute regarding interpretation of this policy an d procedure, as well as any serious non-compliance with this policy and procedure, is to be referred to the appropriate approval authority as designated in this policy Section I -A Authorization and Approval Levels.

4. Reporting Requirements
All reimbursable e xpenses incurred for travel must be reported on the Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508- 4) within ten (10) business days upon return from travel. The Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4) must have original itemized receipts attached and a copy of the fully executed Request for Travel/Training Form (AP 508-2).

For credit card usage, the original itemized receipts and a copy of the fully executed Request for Travel/Training Form (AP 508-2) must be submitted with 358

Page | 3

the monthly credit card reconciliation along with all other required documentation as outlined in the City of Richmond credit card policies and procedures. For guidelines on City of Richmond credit card policies and procedures, please see the Finance Department’s Credit Card manual provided to employees with credit card authorization.

B. Policy
The City of Richmond shall reimburse employees for reasonable and necessary travel expenditures incurred in the course of conducting the business of the City.

When incurring expenses on behalf of the City, employees must recognize that the City is a public institution and that expenses involve the use of public funds. Adequate substantiation of expenditures is required. The nature and amount of expenses incurred may vary according to the objectives of the assignment, circumstances and location. Good judgment in the appraisal of the reasonableness of expenses is required by each individual incurring the expenses and the superv isory level approving the Request for Travel/Training Form (AP 508 -2) and the Travel/Training Expense Report Form for Reimbursement (AP 508-1 and AP 508-4).

Non-business (personal) items are not reimbursable. Employees must pay for items separately and obtain an original itemized receipt for only business items expenses for the purpose of reimbursement. Business expenses, to the extent they are lavish or extravagant, as determined by the applicable approving authority, are not regarded as reasonable and ar e not reimbursable. If an employee uses a City of Richmond issued credit card for any travel/training related expenses, such expenses shall not be eligible for reimbursement. All reimbursable expenses paid with personal funds must be reported on the Travel /Training Expense Report Form for Reimbursement (AP 508-1 or AP 508 -4) as outlined in Section I -D Reporting Requirements of this policy.

C. Travel Expenses
All requests to travel on City business outside the continental United States shall be approved in advance by resolution of the City Council. All requests to travel within the San Francisco Bay Area shall be approved by the appropriate department director.

All requests to travel on City business within the State of California, but outside of the San Francis co Bay Area counties of Alameda, Contra Costa, Marin, Napa, Sacramento, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma, shall be approved in writing by the department director for staff within his or her department by submitting a Re quest for Travel/Training Form (AP 508 -2). All requests to travel outside of the State of California or Nevada but within the continental United States, shall be approved by the City Manager’s signature on the Request for Travel/Training Form (AP 508 -2). T he City Manager shall provide a written report to the City Council of all City travel outside of the State of California or Nevada, but within the continental United States upon request.

Travel expenses include air and ground transportation, City automobil e usage, personal automobile usage, car rentals for business purposes, meals and tips, 359

Page | 4

lodging, non -meal tips, telephone, fax, parking, tolls and other related expenses.

Original itemized receipts are required for all expenses. For City of Richmond credit card usage during travel/training, original itemized receipts must be attached to a copy of the fully executed Request for Travel/Training Form (AP 508 -2) for submission with the monthly reconciliation. Original itemized receipts for reimbursement of perso nal funds used to pay for expenses during approved travel/training must be submitted with the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) within ten (10) business days upon return from travel. See Section I-D Reporting Requirements in this policy.

International expenses must be reported on the International Travel/Training Expense Report Form for Reimbursement (AP 508 -4) with attachments of original itemized receipts for reimbursements of personal funds, a printout of the cu rrency exchange rate that concurs with the date of the receipt, and a copy of a fully executed Request for Travel/Training Form (AP 508 -2) within ten (10) business days upon return from travel. The currency rate is available at www.fiscal.treasury.gov.

1. Transportation
a) Air Travel
Air travel will be arranged and paid by the employee’s department with the City of Richmond credit card. City-approved air travel shall be routed through the airport that is the most practical.

City departments shall make their own travel reservations in accordance with Section V Travel Advance of this policy. Every effort should be made to travel at the lowest cost. The class of air travel shall be coach only.

The class of ticket is to be utilized as issued. If a lesser cost ticket is substituted for any reason, the cost savings is to be remitted to the City. b) Automobile Travel
With the approval of the department director, employees may drive their own car for their own convenience when a pool car is unavailable.

Reimbursement for mi leage driven may not exceed the cost of appropriate air fare and related ground transportation. Therefore, the employee should check the cost of air fare versus mileage at the current approved rate before deciding to drive. The current approved rate will be the prevailing IRS mileage allowance rate available at www.irs.gov or by contacting the Finance Department. For purposes of mileage reimbursement, a printout of an internet map from the employee’s City of Richmond assignment site address or home address, whichever is the shortest distance, to the designation of the training round trip to determine number of miles must be attached and submitted with the Travel/Training Expense Report Form for Reimbursement Form (AP 508-1 or AP 508-4). If automobile travel is selected for the employee’s 360

Page | 5

convenience, the time beyond normal air travel is not chargeable to the City’s time.

The City does not provide primary insurance to protect an employee who uses his/her privately -owned vehicle on City business. No employee shall operate his/her privately -owned vehicle on City business without being in compliance with the provisions of the California Vehicle Code (CVC) §16050-16058 and meet the minimum requirements of California Insurance Code §11580. Employees shall have proo f of financial responsibility in their possession at all times while operating his/her privately-owned vehicle on City business.

For some designated employees receiving a monthly auto allowance for use of their personal car for City business, reimbursement for mileage will only be made on that portion of the trip outside a 60 mile radius (120 miles total) of the employee’s regular assignment site or home address, whichever is the shortest distance. Therefore, 120 miles should be deducted from the total mile s driven per trip when calculating reimbursable mileage. Please refer to Policy Number AP 107 - “Policy on Driving on City Business and Use of City Vehicles.”
c) Car Rental
When traveling, vehicles should be rented with the company offering the best price. Government rates may be available and should be requested when renting a vehicle. Only compact or mid -size vehicles should be rented. The rental of a vehicle should only be for the approved dates indicated on the Request for Travel/Training Form (AP 508-2).

Employees should purchase the Collision Damage Waiver (CDW) if their own personal insurance does not provide coverage. Employees should purchase additional liability, medical payments and uninsured motorist insurance offered by the rental agency. Employee s are covered by Workers Compensation when traveling on business.

Original itemized receipts of all rentals of vehicles must be submitted within ten (10) business days upon return from travel and reported on a Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508 -4) along with a copy of a fully executed Request for Travel/Training Report Form (AP 508 -2) when the expense was paid with personal funds. Original itemized receipt for payment with the City of Richmond credit card must be attac hed to the monthly credit card statement reconciliation along with a copy of a fully executed Request for Travel/Training Form (AP 508-2).
d) Public Ground Transportation
Taxi, airport limousine, bus, BART or other public transportation expenses incurred for a business-related purpose is reimbursable and 361

Page | 6

must be submitted and reported on the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) with original itemized receipts attached. Payments made with the City of Richmond credit card must abide by reporting requirements outlined in Section I -D Reporting Requirements in this policy. Prudent business judgment should be applied in determining the means of public transportation to be used. e) Parking and Tolls
Parking and tolls incurred for business trips are reimbursable.

2. Meals
Meal costs within the following guidelines, as well as normal gratuities and taxes, are reimbursable when incurred while on City business. Original itemized receipts are required for all meal expenses. If a meal expense is incurred for other persons for a business-related purpose, this should be reported as a business meeting expense as appropriate and the purpose and parties involved should be stated. Reimbursement for alcoholic beverages is prohibited. Request separate original itemized receipts for busin ess items for reimbursement from expenses made for personal items. See the Employee Meal and Food Purchase Policy (AP 521). Separate original itemized receipts should also be requested for expenses paid with personal funds to be reimbursed from expenses paid with City of Richmond credit card.

Travelers are expected to consume any meals provided at the trainings, conference, seminar, etc. and employees will not be reimbursed for meals covered by the registration fee.

City of Richmond credit card usage or reimbursements for meal and incidental expense (M&IE) must not exceed the daily allowance as set forth from the U.S. General Services Administration ( www.gsa.gov) for the San Francisco Area (highest rate), and must be reported and submitted on the Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508 -4) or with monthly credit card reconciliation. The meal and incidental expense (M&IE) rate is effective each calendar year beginning January 1.

The rates are subject to change in accordance to U.S. General Services Administration per diem rates for San Francisco (highest rate) that are set each fiscal year and made available by October 1 of each year.

Reimbursements are at the current fiscal year rate of the occurrence of the expense.

3. Lodging
Actual lodging expense for accommodations (in suitable quality facilities at the lowest price available) incurred for business purposes is reimbursable.

Employees should inquire about and utilize any available discounts and group rates. The Travel/Training Expense Report Form for Reimbursement (AP 508- 362

Page | 7

1 or AP 508-4) is required as outlined in Section I-D Reporting Requirements for all lodging expenses to be reimbursed The amount reported for lodging expenses sh ould not include meals, personal telephone calls, etc., which should be listed separately in the appropriate sections on the employee’s Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4).

Lodging should only be arranged by the department when:
• Traveling outside of the Bay Area Counties as outlined above in Section III – Travel Expenses.

OR
• Commuting to and from said training is unreasonable or a hardship as determined by Department Head.

Lodging must be approved before incurring the expense.

4. Non-meal Tips
Reasonable non-meal tips such as bellhop and shuttle driver are reimbursable and must be reported on the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4).

5. Telephone/ Fax/WIFI
All business communications such as telephone, fax, and/or WIFI use for work purposes are reimbursable.

6. Miscellaneous Travel Expenses
Expenses that are personal, such as toiletry articles, magazines, etc., are not reimbursable.

7. Business Meals
A business lunch or other meal is reimbursable if the meeting is for an actual business purpose with City tenants or potential tenants, suppliers, or other City business associates. It is the City’s policy not to pay restaurant vendors directly for charges incurred by individual City employees. The City employees are responsible for paying the charges directly to restaurant vendors and to obtain reimbursement through the submission of the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508 -4) as outlined in this policy (Section I -D Reporting Requirements). Restaurant business meals solely between City employees are not reimbursable. Reimbursement for alcoholic beverages is prohibited. The same guidelines and reporting requirements are applicable when using the City of Richmond credit card for business meals. For more information, see Employee Meal and Food Purchase Policy (AP 521).
363

Page | 8

D. Employee Training Program
As outlined in the City’s Training Policy (AP 309) and Section I -A Authorization and Approval Levels of this policy, attendance at conventions or seminars at the City’s expense requires the prior approval on a Request for Travel/Training Form (AP 508- 2). Travel expenses relating to employee training must be reasonable, as outlined in Section III Travel Expenses of this policy, including transportation, lodging, and meals not included in trainings, conferences, seminars, etc. The Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4) for expenses and detailed explanation of the nature of the expenses are required to be submitted within ten (10) business days upon return from travel.

Payment of convention and seminar registration fees directly to the event sponsor, should be made in advance utilizing procedures as outlined in the following Section V Travel Advance. Also, whenever possible, discounted advance payments for related lodging should be sought and utilized.

E. Travel Advance
No blanket per diem will be issued.

The City of Richmond will pay in advance for registration, lodging, and/or airfares. All other expenses paid with the employee’s personal funds will be reimbursed after the submittal of a Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508-4) with the appropriate original itemized receipts and information attached.

F. Reporting and Reimbursement of Travel Expenses
All expenditures covered within this policy must be documented on a Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4), which is attached to this policy, in order to obtain reimbursement. This report is important for the employee’s reimbursement of expenses and to provide adequate documentation of the expenses for City accounting purposes.

A Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) should be completed and submitted within ten (10) business days after return from any business trip in which expenses were incurred. The Accounts Payable Division will normally process re imbursements within fifteen (15) business days of submission, provided that the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) is submitted with appropriate documentation and approval. The Travel/Training Expense Report Form f or Reimbursement (AP 508-1 or AP 508 -4) is a fillable form available online. The Travel/Training Expense Report Form for Reimbursement (AP 508 -1 or AP 508 -4) should cover the travel period and not exceed ten (10) days for submission upon return from travel . Each page must be hand signed in ink by the employee submitting the report.

Each Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508- 4) must be submitted with required documentation. Amounts charged to the City credit card must be reported with the monthly credit card reconciliation. Original 364

Page | 9

itemized receipts, a paid invoice, or other documentary evidence should disclose the amount, date, place, and nature of the expenditure and be attached to either the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) or the monthly credit card reconciliation.

1. Substantiation
Travel/Training Expense Report Form for Reimbursement (AP 508 -1or AP 508-4) shall provide the funding accounting code(s) and the following information for the type of expenses incurred:
a) Travel
(1) Date of departure and return.
(2) Actual cost of each separate item to be reimbursed, except that incidental items of a similar nature (taxi, bus and BART fares) may be aggregated on a daily basis.
(3) Cities or other locations visited.
(4) Business purposes or nature of the business benefit expected, or business relationship of individuals visited.
(5) Allocation of transportation and related costs for any portion of the trip that is clearly personal.

b) Requests for Travel/Training
All travel/training must be preapproved before incurring expenses by completing a Request for Travel/Training Form (AP 508 -2), obtaining required approval signatures, and attaching any and all required documents.

A copy of the fully executed Request for Travel/Training Form (AP 508- 2) must accompany the Travel/Training Expense Report Form for Reimbursement (AP 508-1 or AP 508-4) or the City of Richmond monthly credit card statement reconciliation along with all required documentation.

2. Failure to Comply with Procedures
Failure to comply with any component of the above policy and procedure may result in disciplinary action.

Under state law, use of public resources or falsifying expense reports is a violation of state law and/or this policy and may result in any or all of the following:
365

Page | 10

(1) Loss of reimbursement privileges.
(2) A demand for restitution to the City of Richmond.
(3) Civil penalties of up to $10,000 per day and three times the value of the resources used.
(4) Prosecution for misuse of public resources.

G. Arizona Travel Ban – Resolution No 55-10
The City of Richmond established a policy to prevent City Funded travel to Arizona while on City business until SB 1070 passed into law in Arizona is repealed.

Exceptions to the travel prohibitions may be granted by City Council. 366

Page | 1

POLICY: FasTrak Policy & Procedures
ESTABLISHED: August 20, 2012
RESOLUTION NO.: Not Applicable; DATE: Not Applicable
I. FasTrak Policy & Procedures

A. Purpose
City employees may be required to travel over Bay Area bridges to perform City business or to represent the City of Richmond. Beginning January 1, 2021, all Bay Area toll bridges switched to automatic toll collection. Drivers must have a FasTrak toll tag mounted to the vehicle’s windshield to pay the lowest tolls at Bay Area bridges. Departments that travel over Bay Area bridges and wish to open a FasTrak account are required to obtain Director of Finance approval.

B. Policy
This policy provides direction on the procedure for opening a FasTrak account and obtaining toll tags to pay for tolls at Bay Area bridges. The City is allowing the use of FasTrak toll tags for City business in City Vehicles. Toll tags may not be obtained for non-City owned vehicles.

No City owned vehicle is exempt from toll fees, with the exception of Public Safety vehicles responding to an emergency situation. A personal transponder does not relieve the offending driver of any violations incurred to the City in the event that the FasTrak toll tag does not register 'Valid' when entering the toll area.

The ticketing agency for FasTrak traces offending vehicle ownership through the State vehicle registration system (administered by the Department of Motor Vehicles), and mails a Notice of Violation notification to the registered owner of the evading vehicle. In these cases, the offending driver will be traced through the City's car pool sign out or assignment sheets. The driver shall be held personally responsible for full payment of the violation.

City vehicles without toll tags will have a picture taken of the license plate and a bill will be forwarded to the City for payment. This is not the preferred method from the City’s perspective since there is a 21 day window to make payments or a late fee will be assessed. This 21 day window includes mailing the bill, forwarding the bill to the appropriate department and paying the bill. In the event that the City receives a fine, it is the department’s responsibility to pay the FasTrak fine within the 21 day window to avoid any additional fines. Setting up an account for use with FasTrak toll tags is the preferred method for crossing Bay Area bridges.

367

Page | 2

Process for Setting Up a FasTrak Account – The department must obtain Director of Finance approval to open a FasTrak account. When requesting approval, state:

 Business purpose to obtain the toll tags
 Cal-Card holder whose card will be linked to the FasTrak account and who will monitor the program to ensure that tolls are for a business purpose.  Number of toll tags that will be obtained for the department.

A list of approvals will be maintained by the Purchasing Division in the Finance Department.

Personally Owned Vehicles – Only actual toll charge reimbursement can be requested on an Expense Report. A request for reimbursement may be submitted through a Travel Expense Report as outlined in Policy Number AP508, "Travel and Expense" or in Policy Number AP 510 "Petty Cash". Any late fees, fines, etc. will be the responsibility of the offending individual, not the City.

All departments shall ensure that a FasTrak toll tag is appropriately placed inside the vehicle if an employee is crossing Bay Area bridges for a business purpose.

368

Page | 1

POLICY: Accounts Payable ACH Policy
ESTABLISHED: June 12, 2023
RESOLUTION NO.: Not Applicable; DATE: Not Applicable

I. Accounts Payable ACH Policy
A. Purpose
To establish proper ACH procedures to ensure accuracy and safety to avoid fraudulent activity.

B. Policy
The Finance Department, Accounts Payable Division, is responsible for ensuring that ACH account change request, ACH set up request are verified and signed off by Manager/Supervisor before requesting purchasing to make changes.

C. Procedure

1. Accounts Payable
a) Verifying vendor request
(1) Accounts Payable will ensure each request to update vendor information regarding ACH are legitimate by ensuring the email received is from proper vendor email address. This can be obtained by checking to see if the email address matches the email address in Munis or by verifying email address from older invoices for the vendor.
(2) Once the initial review is done, AP will provide vendor with Direct deposit form to change or set up ACH payment method.
(3) Vendor must mail the ACH form to Accounts Payable along with a voided check or voided deposit ticket. If those are not available a letter from their bank on their letterhead, which must include the name on the account, ABA routing number and account number as well as the bank representative contact information and signature.
(4) The final step would be to hand over all the proper backup documents to the Accounting Manager/Supervisor and have them verify the change request. They will conduct a secondary check by calling the vendor with contact information in Munis to verify that the change was requested. After that information is verified by the Manager/Supervisor they will sign off and initial before handing over to Accounts Payable.

369

Page | 2

(5) Once forms are received back and signed from
Manager/Supervisor, AP will provide the AC H forms to
purchasing to make the required changes. Purchasing will make sure that all changes are signed off by the Manager/Supervisor before making any changes.
370

Reso. No. _____

Page 1 of 2 ends

Richmond City CouncilMarch 17, 2026

Richmond City Council
March 17, 2026