San Marino City Council
March 28, 2025

AGENDA – MARCH 28, 2025 PAGE 1 of 304

CITY OF SAN MARINO

CITY COUNCIL AGENDA
Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
Philippe Eskandar, City Manager
www.SanMarinoCA.gov
(626) 300-0700 Phone
City Hall Council Chamber
2200 Huntington Drive
San Marino, CA 91108

ADJOURNED REGULAR MEETING OF THE

SAN MARINO CITY COUNCIL
FRIDAY, MARCH 28, 2025 AT 8:30 AM

CITY HALL COUNCIL CHAMBERS
2200 HUNTINGTON DRIVE
SAN MARINO, CA 91108
The City of San Marino appreciates your attendance. Citizens’ interest provides the Council with valuable information regarding issues of the community.

Regular meetings are held on the 2nd Wednesday of every month at 6:00 p.m. Typically, adjourned meetings are held on the last Friday of every month at 8:30 a.m.

In compliance with the Americans with Disabilities Act, any person with a disability who requires a reasonable modification or accommodation in order to participate in a meeting should contact the City Clerk via email at [email protected] or by phone at (626) 300-0705 prior to the meeting for assistance.

The public is welcome to attend the meeting in person or remotely via Zoom, however, the meeting will proceed as normal even if there are technical difficulties with Zoom. The City will do it’s best to resolve any technical issues as quickly as possible.

How to view or listen to the meeting from home:

Visit www.SanMarinoCA.gov/Zoom
How to offer public comment from home:

Public comment will be accepted by email to [email protected] until 3:00 p.m. the day before the meeting. Written public comment received by 3:00 p.m. will AGENDA – MARCH 28, 2025 PAGE 2 of 304
be distributed to City Council during the meeting. Any comments received after 3:00 p.m. will be included in the public comment record but not provided to City Council at the meeting.

Written public comment will be accepted electronically via the zoom.us teleconference module during the meeting. Written Zoom comments will be accepted after the in-person comments.

CALL TO ORDER

PLEDGE OF ALLEGIANCE

ROLL CALL
Council Member Chang, Council Member Chou, Council Member Lo, Vice Mayor Chou, and Mayor Shepherd Romey

POSTING OF AGENDA
The agenda is posted 72 hours prior to each meeting at the following locations: City Hall, 2200 Huntington Drive, the Crowell Public Library, 1890 Huntington Drive, and the Stoneman Building, 1560 Pasqualito Drive. The agenda is also posted on the City’s website:
http://www.SanMarinoCA.gov.

PUBLIC COMMENTS
The City welcomes public input. Members of the public may address the City Council by completing a public comment card and giving it to the City Clerk prior to the meeting. At this time, the public may address the City Council on items that are not on the agenda.

Pursuant to state law, the City Council may not discuss or take action on issues not on the meeting agenda (Government Code Section 54954.2). The Mayor reserves the right to place limits on duration of comments. Staff may be asked to follow up on such items.

PRESENTATION

GREATER LOS ANGELES COUNTY VECTOR CONTROL DISTRICT UPDATE

NEW BUSINESS

1. REVIEW OF DRAFT FY 2025-26 CAPITAL EQUIPMENT AND
CONSTRUCTION PLANS AND 5-YEAR FORECAST
Recommendation: Staff recommends that the City Council review the draft FY 2025- 26 capital equipment and capital construction budgets and 5-year plans and provide direction and guidance on the following two matters: 1) approve or reject the proposed FY 2025-26 expenditures, and 2) offer guidance on any FY 2026-27 or beyond projects that should be moved up into FY 2025-26. Staff will include the Council’s direction in the proposed budget.

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2. APPROVAL OF RESOLUTION TO REESTABLISH FISCAL YEAR 2025-26

PUBLIC SAFETY SPECIAL TAX LEVIES
Recommendation: Staff recommends that the City Council approve a public safety parcel tax levy of $3,704,976. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve Resolution No. R-25-08 establishing the Public Safety Special Tax Levies for Fiscal Year 2025-26.”

3. AUTHORIZATION TO PUBLISH THE PUBLIC HEARING NOTICE TO

CONSIDER PROPOSED ESTABLISHMENT OF SEWER SERVICE RATES, AND ADOPT RESOLUTION R-25-09 TO ESTABLISH RATE SETTING
PROCEDURES IN COMPLIANCE WITH PROPOSITION 218 AND
ASSEMBLY BILL 2257
Recommendation: (1) Provide direction on the funding scenario to be used for the Sewer Rate Study;
(2) Adopt the Resolution to approve the Sewer Service Charge Rate Setting Procedures; and
(3) Authorize staff to mail and post the Public Hearing Notice for June 27, 2025, to consider approval of the proposed sewer service charges.

CONSENT CALENDAR

4. APPROVAL OF CONTRACT CHANGE ORDER WITH ONYX PAVING
COMPANY, INC. FOR THE STREET REHABILITATION PROJECT TO

INCLUDE ADDITIONAL CITY-OWNED ALLEYWAYS AND PARKING LOTS AND APPROVAL OF AMENDMENT NO. 1 TO THE PROFESSIONAL

SERVICES AGREEMENT WITH Z&K CONSULTANTS
Recommendation:: Staff recommends that the City Council 1) approve Contract Change Order #2 with Onyx Paving Company, Inc. for the Street Rehabilitation Project in an amount not to exceed $498,000 for the completion of additional work associated with the Alley and Parking Lot Improvement Program and authorize the Parks and Public Works Director to execute the Contract Change Order on behalf of the City, 2) approve Amendment No.1 with Z&K Consultants in an amount not to exceed $143,148 for additional construction management services associated with the project, and authorize the City Manager to execute the contract amendment on behalf of the City. If the Council concurs, an appropriate motion would be:
“I move to 1) approve Contract Change Order #2 with Onyx Paving Company, Inc. for the Street Rehabilitation Project in an amount not to exceed $498,000 for the completion of additional work associated with the Alley and Parking Lot Improvement Program and authorize the Parks and Public Works Director to execute the Contract Change Order on behalf of the City, 2) approve Amendment No.1 with Z&K Consultants in an amount not to exceed $143,148 for additional construction management services associated with the project, and authorize the City Manager to execute the contract amendment on behalf of the City.”
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5. AUTHORIZATION TO ENTER INTO A 3-YEAR AGREEMENT FOR

SAFEKEEPING SERVICES
Recommendation: Staff recommends the Council authorize the City Manager or his designee to execute the agreements necessary to enter into a 3-year agreement with an option to renew 2 additional 1-year terms with BMO for safekeeping services, subject to final language approval by the City Manager and City Attorney, and open a demand deposit account. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve the City Manager or his designee to execute the agreements necessary to enter into a 3-year agreement with an option to renew 2 additional 1- year terms with BMO for safekeeping services, subject to final language approval by the City Manager and City Attorney and open a demand deposit account.”

6. AWARDS OF 3-YEAR MAINTENANCE SERVICES AGREEMENTS TO SOCAL ELECTRIC, INC., ACCO ENGINEERED SYSTEMS, GRAYCON INC.,

AMTEK CONSTRUCTION, AND CREATIVE AIR MECHANICAL SERVICES INC. IN AN AMOUNT NOT TO EXCEED $50,000 PER YEAR EACH FOR

ON-CALL MAINTENANCE SERVICES
Recommendation: Staff recommends the City Council award maintenance services agreements for on-call maintenance services to So-Cal Electric Inc., ACCO Engineered Systems, Inc., and Graycon Inc. as the primary on-call contractors, and award agreements to Amtek Construction and Creative Air Mechanical Services, LLC as secondary on-call contractors. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to award three-year maintenance services agreements for on-call maintenance services to So-Cal Electric Inc., ACCO Engineered Systems, Inc., and Graycon Inc. as the primary on-call contractors, and award agreements to Amtek Construction and Creative Air Mechanical Services, LLC as secondary on-call contractors, and authorize the City Manager to execute the agreements on behalf of the City.”

WRITTEN COMMUNICATIONS OR PUBLIC WRITINGS DISTRIBUTION
This is an opportunity to announce any written communications pertaining to the City received by members of the City Council. All public writings distributed by the City of San Marino to at least a majority of the City Council regarding any item on this agenda will be made available at the Public Counter at City Hall located at 2200 Huntington Drive, San Marino, California 91108, and will also be included in the public agenda packet that will available for review at the City Council meeting.

FUTURE AGENDA ITEMS

ADJOURNMENT
AGENDA – MARCH 28, 2025 PAGE 5 of 304
Posted: 03/21/2025 ALISON WALKER

CITY CLERK
TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer DATE: March 28, 2025
SUBJECT: REVIEW OF DRAFT FY 2025-26 CAPITAL EQUIPMENT AND CONSTRUCTION PLANS AND 5-YEAR FORECAST

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Engaged and Connected Residents
Fiscally Responsible and Transparent City Government
Inviting and Relevant City Facilities
Safe Community
Well-Maintained Infrastructure

BACKGROUND
Overall Budget Process
During the Fiscal Year 2019-20 budget process, staff worked together with the then City Council Budget Liaisons to develop an innovative and streamlined budget process that ultimately led to a successful adoption of the budget on June 26, 2020. Staff has continued to use the same budget process each fiscal year since Fiscal Year 2019-20.

At the February 12, 2025, City Council meeting, staff presented the Fiscal Year 2025-26 budget calendar, gave a FY 2025-26 budget overview, and presented proposed priority initiatives. A community engagement survey was also available for residents to complete until March 3, 2025. At the March 12, 2025, City Council meeting, staff presented more detailed information on the FY 2025-26 proposed priority initiatives and received feedback from Council on which items to include in the proposed budget. Today represents the next stage of the budget process. Staff will present both the capital equipment and Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
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capital construction budgets. On April 25, 2025, we will present each department’s Fiscal Year 2025-26 work plans and budgets. Staff will continue to work with the Budget Liaisons to ensure that our presentations meet the Council’s needs.

Please note that there will still be opportunities for adjustments and additions/removals as the budget process continues, but today’s discussion and decisions will give staff the direction needed to prepare the proposed Fiscal Year 2025-26 capital equipment and construction budgets.

DISCUSSION
Each year as part of the adoption of the City’s municipal budget, new and planned capital expenditures are compiled and presented to the City Council for review and deliberation. Afterward, those projects and programs that are approved for an appropriation in the coming fiscal year are incorporated into the City’s capital budget.

This budget workshop will include a review and discussion of the draft FY 2025-26 capital equipment and construction budgets and an update to the 5- year forecast.

Capital Equipment
This year’s format is identical to the one presented to the City Council the last six (6) fiscal years. The following information is provided in the attached draft capital equipment plans:
· Attachment 1- The current status of all FY 2024-25 capital equipment expenditures.
· Attachment 2 -A summary table of the recommended capital expenditures for FY 2025-26.
· Attachment 3 - A detailed description and cost estimate for each proposed capital expenditure.

The recommended items presented to the City Council today have gone through several rounds of prioritization. The requests for equipment purchases were first generated by each department head based on their individual work plans and operational needs.

Director Shah and Finance Director Guirola-Leon then presented the submitted requests to the City Manager, who reviewed the requests based on City PAGE 7 of 304
Council priorities. In summary, the proposed capital equipment list (Attachment 2) was reviewed and sorted into upcoming FY 2025-26 purchases, and future purchases (Attachment 3).

Capital Construction
Concurrently, the following information is provided in the attached draft capital construction plans:
· Attachment 4 - The current status of all FY 2024-25 capital construction projects and programs
· Attachment 5 - A summary table of the recommended capital construction projects and program expenditures for FY 2025-26
· Attachments 6, 7, and 8 - A detailed description and cost estimate for each proposed capital improvement expenditure (right-of-way, park and grounds, civic facilities, wastewater collection, and stormwater) The capital construction requests were generated by the Parks and Public Works Department based on the five-year CIP plan and operational needs.

The capital construction requests are sorted into 1) Annual/Recurring Capital Construction Projects, 2) Proposed New (FY 2025-26) Capital Construction Projects, 3) Proposed Future (FY 2026-27 and beyond) Capital Construction Projects.

The following projects below have already been approved for funding by the City Council during prior budget processes, but have not yet been completed.

These projects are listed in the tabulation spreadsheet (Attachment 5) under the category “Re-Appropriations/Re-Budgets.” However, as these projects were all previously approved by City Council and no new funding is requested at this time for FY 2025-26 or future years, they are not included in the individual request forms for this meeting. Forms will be included in the final adopted budget book for ease of reference and transparency. Attachment 4 provides further detail on the status of each of these projects:
· Bridge Maintenance Program
· Measure R 710 North Projects
· Huntington Drive/Mission Street Beautification
· City Hall Campus – Emergency Generator Connection
· Library – Barth Community Room Lighting
· Lift Station Improvement Program
· Sewer Master Plan
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· Rio Hondo Load Reduction Strategy
· Condition Assessment – Park and Street Trees
Commission Review
The proposed capital equipment plan was presented to the Public Safety Commission on March 17, 2025. The Public Safety Commission took action to recommend forwarding the proposed FY 2025-26 capital equipment list to the City Council for approval.

Capital Equipment and Construction 5-Year Plan
The table below shows an estimated $81.7 million in city-wide capital needs for the next five fiscal years, including both capital equipment and construction needs. Of this amount, approximately $20 million are capital needs related to the Wastewater system.

Each year, the City receives approximately $1.6 million in special revenue funding to help cover some of these capital needs. However, the remaining projected amounts are currently unfunded.

FISCAL IMPACT & PROCUREMENT REVIEW
All FY 2024-25 City Council-approved equipment has been either purchased or is expected to be purchased by June 30, 2025, as detailed in Attachment

1. Attachment 2 provides the budgeted capital equipment expenditures that are completed (highlighted in yellow), new capital equipment requests for FY 2025-26, and the 5-year equipment expenditure plan. In total, staff is PAGE 9 of 304
proposing seven (7) new capital equipment purchases to be considered for next fiscal year. The table below provides the proposed budget by funding sources for the next fiscal year.

Funding Source FY 2025-26 Proposed Budget
Capital Equipment $344,000
COPS $144,604
Total $488,604
The Capital Equipment Fund (Fund 591) would need a budgeted transfer in from the General Fund to cover the costs of $344,000. The transfer in would be incorporated as part of the proposed budget presented in May 2025.

As of July 1, 2024, $14,254,998 of funding was available in the Capital Projects Fund (Fund 394).

The proposed Capital Projects for FY 2025-26 total $9,408,342. The table below provides the proposed budget by funding sources for the next fiscal year.

Funding Source FY 2025-26 Proposed
Budget
Special Revenue Funds $2,352,195
Capital Projects Fund (Fund 394) $7,056,147
Total $9,408,342
Of the $3,540,289 of new funding requests for the FY 2025-26 capital improvement budget, $1,565,189 is funding allocated from the Capital Projects Fund (Fund 394). The remaining $1,999,610 is from the Gasoline Tax Fund (Fund 202), Proposition A Fund (Fund 207) TDA Article 3 Fund (Fund 214), Proposition C Fund (Fund 215), Measure R Fund (Fund 243), Measure M Fund (Fund 247), Measure W Fund (Fund 246), CDBG Fund (Fund 204), and the Donations Fund (Fund 281) (precise amounts are shown on Attachment 5). Projects and programs underway and not completed this fiscal year will be re-budgeted or re-appropriated into next fiscal year.

The Parks and Public Works Department will be embarking on three (3) financially-significant construction projects this coming fiscal year: the completion of Lift Station upgrades ($1,985,690), the Street Rehabilitation Program ($3,978,647) and another year of Annual Sidewalk Improvements ($484,235).

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LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.

RECOMMENDATION
Staff recommends that the City Council review the draft FY 2025-26 capital equipment and capital construction budgets and 5-year plans and provide direction and guidance on the following two matters: 1) approve or reject the proposed FY 2025-26 expenditures, and 2) offer guidance on any FY 2026-27 or beyond projects that should be moved up into FY 2025-26. Staff will include the Council’s direction in the proposed budget.

ATTACHMENTS

1. Status Update on the FY 2024-25 Capital Equipment Plan

2. Summary Table of Recommended FY 2025-26 Capital Equipment Purchases and 5-Year Plan

3. Capital Equipment Request Forms - All Departments (FY 2025-26 and future years)

4. Status Update on the FY 2024-25 Capital Construction Programs and Projects

5. Summary Table of Recommended FY 2025-26 Capital Construction Projects and 5-Year Plan

6. Capital Construction Request Forms - Annual/Recurring Projects/Programs

7. Capital Construction Request Forms - Proposed New FY 2025-26 Capital Construction Projects

8. Capital Construction Request Forms - Future Projects (FY 2026-27 and beyond)
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TO: Mayor Shepherd Romey and Members of the City Council FROM: Amber Shah, PE, Director of Parks & Public Works/City Engineer DATE: March 28, 2025
SUBJECT: FY 2024-25 CAPITAL IMPROVEMENT PLAN STATUS
UPDATE

BACKGROUND
The Parks and Public Works Department is moving forward with the implementation of the FY 2024-25 capital improvement program that includes equipment replacement and capital construction. This report lists the status of the FY 2024-25 construction projects and programs to ensure the City Council is sufficiently informed:

Right-of-Way

1. Annual Striping, Signing, and Marking Program
• Re-striping of Huntington Drive between Gainsborough Drive and San Gabriel Boulevard completed during FY 2024-25. Re-striping of school zones will also be completed this FY. Staff are working to prioritize additional locations to complete with remaining funds.

2. Street Tree Management Plan
• Planting is underway, and scheduled to be complete by June 30, 2025.

3. Streetlight Management Plan
• Staff is assessing the cost to procure equipment necessary to complete the project internally that would also support the ongoing maintenance and replacement of streetlights throughout the City by staff in lieu of contracting this project out.

4. FY 2022-23 and FY 2023-24 Street Rehabilitation Program Projects • Construction began in November 2024 and will be complete in April 2025. Savings during the project will allow staff to increase the total number of streets resurfaced as part of this project.

5. Sidewalk Replacement Program
• Construction activities for FY 2024-25 cycle commenced on August 5, 2024, and were complete in late September 2024.

6. Alley and Parking Lot Improvement Program
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2 • Design is complete and project will be issued for bids in April 2025.

7. Citywide Traffic Improvements
• Comprehensive replacement of signage and striping complete in school zone areas. Installation of new speed radar signs, primarily in school zones, will also be complete this FY.

8. Traffic Control Devices Program
• Traffic signal inventory, including RRFB locations, developed this FY to identify and prioritize replacements and upgrades of devices and associated equipment. First priority to upgrade RRFB pedestrian crossings on Huntington Drive will begin this FY.

9. Bridge Maintenance Program
• Re-budget to FY 2025-26.

10. Measure R – 710 North Projects
• Staff worked with on-call traffic engineer to develop traffic study scoping memo for Huntington Drive within City limits that must be completed in order for the funding agreement to be executed with LA Metro prior to commencing design work.

11. Huntington Drive/Mission Street Beautification Program • Re-budgeted to FY 2025-26.

Parks

1. Lacy Park Playground Management Program
• Phase I of Playground Replacement (age 5-12 structure and swing set) to be completed in March/April 2025. FY 2025-26 budget includes funding request for replacement of age 2-5 structure and install additional freestanding pieces.

2. Citywide Irrigation Upgrades
• Upgrades to median irrigation controllers completed in fall/winter 2024.

Civic Facilities

1. PW Facility Upgrades
• Various upgrades will be complete during FY 2024-25 including installation of new flooring and office furnishings in the public works office located behind City Hall. FY 2025-26 funds will complete the upgrades and begin design work for renovating the office building and garage at Lacy Park, which is several decades old and both incurred damage during the January windstorm.

2. Old Mill Facility Repairs
• Re-budget to FY 2025-26.

3. City Hall Campus Emergency Generator Connections
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3 • Re-budget to FY 2025-26. Staff will assess existing generator’s condition and feasibility of potential upgrades and need for future replacement.

Wastewater Collection System

1. Sewer Main Rehabilitation Program
• Staff is working with the City’s sewer maintenance contractor to identify high priority locations and develop a scope of work for the project based upon video and data collected during latest sewer cleaning cycle. Design work planned to begin in FY 2025-26.

2. Lift Station Improvement Program
• Contractor has been working under an Administrative NTP to submit for approval and procure long lead items. Construction scheduled to begin in April 2025.

3. Sewer Master Plan
• Re-budget to FY 2025-26.

Stormwater System

1. Drainage Inlet Replacement Program
• Re-budgeted to FY 2025-26.

2. Drainage Wash Replacement Program-
• Re-budgeted to FY 2025-26.

3. Trash Capture Filters
• Installation of trash capture debris devices in 38 catch basins completed in December 2024.

4. Culvert Replacement Program
• Design of culvert replacement in Lacy Park ongoing. Consultant is analyzing the potential second alternative route requested by staff to minimize the disruption to the park. Design to be completed in FY 2025-26 with construction beginning in FY 2026-27.

5. Rio Hondo Load Reduction Strategy
• County-led project currently in design. The City has not received an updated construction timeline for the project. City’s remaining obligation for the project will be paid for using Measure W funds.

The annual capital expenditures are part of a five-year rolling plan for capital projects. New equipment and project requests for FY 2025-26 as well as requests for FY 2026-27 and beyond are also provided at today’s meeting, along with five-year estimates.

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TO:

FROM:

Mayor and City Council
Philippe Eskandar, City Manager
BY: Hillary Guirola-Leon , Finance Director
Mark Siegfried, Accounting Manager/Controller
DATE: March 28, 2025
SUBJECT: APPROVAL OF RESOLUTION TO REESTABLISH FISCAL
YEAR 2025-26 PUBLIC SAFETY SPECIAL TAX LEVIES

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Fiscally Responsible and Transparent City Government
Efficient, Responsive, and Effective City Services

BACKGROUND
San Marino voters approved the adoption of a special tax in November 1980 on parcels of real property within the City. The special tax is to be used for the purposes of obtaining, providing, operating, and maintaining paramedic services, police equipment or apparatus therefor; paying the salaries and benefits to paramedic, police protection, and firefighting protection and prevention personnel; and for other necessary paramedic expenses, police protection expenses, and fire protection and prevention expenses of the City of San Marino. The parcel tax has been approved by the voters in twelve (12) subsequent elections; it was most-recently approved by 76.55% of voters in November 2024 as Ordinance No. O-24-1412 for Fiscal Years (FY) beginning July 1, 2025, and ending June 30, 2029.

Exhibit 1 to Ordinance No. O-24-1412 established the maximum special tax to be levied for each property zone for Fiscal Years 2026, 2027, 2028, and 2029. As shown in Exhibit A, the annual maximum amounts specified in the Ordinance increase by five percent (5%) each year over the previous year’s maximum amount. The City Council must set the actual tax amount for each zone each year. From time to time, the City Council has acted to increase the Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
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levy to amounts that were less than the maximums established in the Ordinance. For the ten-year period of FY 2010-11 through FY 2019-20, the parcel tax was increased seven (7) times. Six (6) of these seven (7) times, the annual increase was five percent (5%) while in FY 2018-19, the tax was increased by two percent (2%). For FY 2019-20, FY 2020-21, FY 2021-22, FY 2022-23, and FY 2024-25 there was no increase. For FY 2023-24, there was an increase of three percent (3%).

DISCUSSION
As mentioned above, the City Council has only increased the Public Safety Parcel Tax once in the past five (5) fiscal years. Over that same period, all inflationary costs such as materials and supplies have risen dramatically. The Consumer Price Index change for December 2024 was 3.4% and this factor drives future operational increases. A five percent (5%) increase in the Public Safety Parcel Tax will help absorb the increases seen over the years and the increase expected in the next FY.

Below is a table of how much the Public Safety Parcel Tax is a percentage of the operating expenses incurred by the Police and Fire Departments over the years and next fiscal year’s estimates.

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Public Safety Tax History
Growth in
Collections Over
Public
Safety Tax
Prior Year as % of
Year Measurement Amount $ %
Public
Safety Fund
Expenses
Fiscal Year
2015-16 Audited 2,938,883 29%
Fiscal Year
2016-17 Audited 3,093,737 154,854 5.27% 26%
Fiscal Year
2017-18 Audited 3,220,338 126,601 4.09% 29%
Fiscal Year
2018-19 Audited 3,357,200 136,862 4.25% 29%
Fiscal Year
2019-20 Audited 3,431,755 74,555 2.22% 27%
Fiscal Year
2020-21 Audited 3,426,827 (4,928)
-

0.14% 26%
Fiscal Year
2021-22 Audited 3,421,901 (4,926)
-

0.14% 25%
Fiscal Year
2022-23 Audited 3,439,456 17,555 0.51% 23%
Fiscal Year
2023-24 Audited 3,528,294 88,838 2.58% 19%
Fiscal Year
2024-25 Estimated 3,528,294 - 0.00% 21%
Fiscal Year
2025-26 Estimated 3,704,976 176,682 5.01% 21%
At this time, staff is recommending an increase in the Public Safety Parcel Tax rates of five percent (5%) compared to prior year. On average this is an increase of approximately $4 a month for residential zones.

The recommended increase is needed to help fund operational increases experienced in the Public Safety Fund. Over the last five fiscal years (from FY 2021 to FY 2025), Public Safety Fund expenditures have increased by $3.8M (or 29%) while the Public Safety Parcel Tax has only increased by three percent (3%).

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Public Safety
Parcel Tax
Revenue
Public Safety Fund
Expenditures
Fiscal Year 2020-21 3,426,827 13,240,280
Fiscal Year 2024-25 3,528,294 17,097,354
$ Increase 101,467 3,857,074
% Increase 3% 29%
A five percent (5%) revenue increase was included as part of the 5-year forecast presented to the City Council on February 28, 2025. A five percent (5%) increase would generate approximately $176,000 in revenue and this amount would help fund existing services.

The revenue estimate for the Public Safety Parcel Tax that will be included in the FY 2025-26 Proposed Operating and Capital Budget will be based on the parcel tax amounts approved today. If the City Council decides on an increase, the tax will offset the amount that the General Fund subsidizes for paramedic expenses, police protection expenses, and fire protection and prevention expenses in the City.

Exhibit B shows the current FY 2024-25 rate, recommended rate FY 2025-26, and Maximum rate for FY 2025-26 as set by Ordinance No. O-24-1412.

FISCAL IMPACT & PROCUREMENT REVIEW
Staff is recommending an increase of five percent (5%) to the parcel tax next year. The anticipated total collection will be approximately $3,704,976 and will be included with the FY 2025-26 Proposed Operating and Capital Budget.

If Council were to choose to increase the public safety parcel tax rate at a different rate than staff’s recommendation, each percentage increase would generate approximately $35,283 of revenue compared to FY 2024-25.

This report requires no procurement review.

LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.

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RECOMMENDATION
Staff recommends that the City Council approve a public safety parcel tax levy of $3,704,976. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve Resolution No. R-25-08 establishing the Public Safety Special Tax Levies for Fiscal Year 2025-26.”

ATTACHMENTS

1. Resolution No. R-25-08 Reestablishing the Public Safety Special Tax Levies for Fiscal Year 2025-26

2. Exhibit A Maximum Special Tax Levies

3. Exhibit B 2024-25 and FY 2025-26 Rates and Estimated FY 2025-26 Total . Levy

4. Ordinance No. O-24-1412 and Exhibit 1
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RESOLUTION NO. R-25-08

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF SAN MARINO, CALIFORNIA, REESTABLISHING THE

PUBLIC SAFETY SPECIAL TAX LEVIES FOR FISCAL
YEAR 2025-26
WHEREAS, in November 2024, the voters adopted Ordinance No. O-24-1412, reestablishing the public safety special tax; and
WHEREAS, the City Council is empowered to establish amounts of tax levy annually each fiscal year in amounts not to exceed maximum levies established in Ordinance No. O-24- 1412; and
WHEREAS, the City Council has considered budgetary matters and proposes a levy that is 5% greater than the fiscal year 2024-25 levy and is equal to the approved maximum levy for fiscal year 2025-26 as approved as Exhibit 1 to Ordinance No. O-24-1412.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN MARINO, CALIFORNIA, DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

SECTION 1. The public safety special tax shall be assessed as follows for fiscal year 2025-26:

PUBLIC SAFETY SPECIAL TAX LEVY

AND ASSESSMENT AMOUNTS
FOR FISCAL YEAR 2025-26

POLICE/FIRE PARAMEDIC

ZONES COMPONENTS COMPONENT
RES I 1,360.16 76.11
RES II 1,192.49 76.11
RES III 993.92 76.11
RES IV 857.14 76.11
RES V 653.06 76.11
RES VI 522.88 76.11
RES VII 453.39 76.11
COM I 1,088.79 76.11
COM II 1,701.03 76.11
COM III 2,948.66 76.11
UNIMPR 249.31 76.11
SPLIT 182.02 76.11
PAGE 107 of 304
CITY OF SAN MARINO RESOLUTION NO. R-25-08
PAGE 3 OF 2
PASSED, APPROVED, AND ADOPTED this 28th day of March, 2025. ______________________________________

GRETCHEN SHEPHERD ROMEY
MAYOR
ATTEST:
__________________________________

ALISON WALKER

CITY CLERK

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.

CITY OF SAN MARINO )
I, Alison Walker, City Clerk of the City of San Marino, California, hereby certify that Resolution No R-25-08 was adopted by the City Council of the City of San Marino at a Regular Adjourned Meeting held on the 28th day of March, 2025, and that the same was adopted by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
________________________________

ALISON WALKER

CITY CLERK
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TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Hillary Guirola-Leon , Finance Director
DATE: March 28, 2025
SUBJECT: AUTHORIZATION TO PUBLISH THE PUBLIC HEARING

NOTICE TO CONSIDER PROPOSED ESTABLISHMENT OF
SEWER SERVICE RATES, AND ADOPT RESOLUTION R-25-
09 TO ESTABLISH RATE SETTING PROCEDURES IN
COMPLIANCE WITH PROPOSITION 218 AND ASSEMBLY
BILL 2257

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Fiscally Responsible and Transparent City Government
Safe Community
Well-Maintained Infrastructure

BACKGROUND
The City of San Marino operates a 50-mile long municipal sewer collection system and is responsible for collecting wastewater (sewage) and conveying it to the Los Angeles County Sanitation District for treatment. Proper maintenance and capital investment are essential for the system’s continued operation, health, and safety.

In 2019, the City completed a Sewer System Master Plan (SSMP) and a Wastewater Collection System Condition Assessment (WCSCA), which identified over $36 million in needed sewer capital investments over the next 10 years. However, these capital improvements are currently unfunded.

Unlike most agencies, the City does not charge customers for the use of the sewer system. Historically, the wastewater collection system expenditures have been funded by the General Fund. Based on research conducted by staff, Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
PAGE 118 of 304
San Marino remains the only City in the region who funds, operates, and maintains their sewer system in this manner. Most sewer systems are selffunded enterprises funded through customer rate revenue.

Based on latest projections, the General Fund is facing significant budgetary challenges ahead with projected operating deficits and is no longer a sustainable funding source for the long-term sewer utility needs. Achieving a financial self-sustaining Sewer system will ensure there is enough funding available to continue making necessary improvements.

On November 13, 2024, Council approved a contract with Raftelis to conduct a Sewer Rate Study aimed at creating a sustainable financial model. Having an independent third party perform the sewer rate study ensures an unbiased, objective analysis of costs and needs, to develop a funding rate structure.

On February 12, 2025, the City Council considered a priority initiative entitled “Financially Self-Sustaining Sewer System.” This initiative is focused on ensuring the long-term financial viability and functionality of the City’s sewer system. The priority initiative was put before the community through the priority initiative survey and was generally categorized as a higher priority by survey participants. The initiative was then considered again by the City Council on March 12, 2025 at which time the Council was supportive of moving the initiative forward in the budget preparation process.

On February 13, 2025, Raftelis presented the initial Sewer Rate model to staff and City Finance Liaisons providing an opportunity for questions and discussion of the financial model. The three funding scenarios presented are based on a percentage of funded capital improvement Plan (CIP).

The three funding scenarios for the City Council’s consideration are 100% CIP, 75% CIP, and 50% CIP. Staff is seeking direction from Council regarding which funding scenario to use for the Sewer Rate Study. It is important to note that should the City Council move forward with any funding scenario other than the 100% level, a deficit will continue to exist in the City’s ability to fund the necessary sewer repairs outlined in the SSMP. At this time, there is no alternative, structural funding source that would making up the difference if the Council pursued a funding scenario less than 100% and the remaining necessary annual work would be deferred until such time an appropriate balance was accrued.

The Sewer Rate Study will serve as the basis for complying with the City’s obligations to justify the amount of the proposed sewer rate in accordance with Proposition 218. Under Proposition 218, the City is required to justify the PAGE 119 of 304
amount of the sewer rates so that they do not exceed the City’s proportionate cost of providing the sewer service to each customer.

Proposition 218 also requires the City to follow particular procedural requirements including mailing a public hearing notice to all property owner customers subject to the proposed sewer rates, with the notice being mailed at least 45 days prior to the hearing. During the hearing (tentatively scheduled for June 27, 2025), the Council will consider all public comments prior to taking action to consider approval of the proposed rates. Additionally, each property owner will have a right to submit a written protest to the City to challenge the rates. The City Council will have the authority to consider approval of the proposed sewer rates only if there is not a “majority protest” from property owners. There would be a majority protest if the number of written protests from owners challenging the rates exceeds more than onehalf (50% +1) of the parcels served by the City.

In addition to the procedural requirements under Proposition 218, staff recommends that the Council adopt Resolution No. R-25-09 establishing Sewer Service Charge Rate Setting Procedures which implements new law (“AB 2257,” Government Code Sections 53759.1 and 53759.2). Those recommended procedures document compliance with both Proposition 218 and AB 2257. If authorized by Council, under AB 2257, property owners will also have an opportunity to submit a “written objection” (in addition to the “written protest”) within 45 days after the public hearing notice is mailed.

Unlike a “written protest” (for which the property owner need only identify an opposition to the rates), a “written objection” must document a substantive provision under Proposition 218 that the proposed rates are claimed to violate, with facts to support the claim, and the City has an obligation to provide a substantive written response to each timely written objection. The benefit to the City in adopting the supplemental procedures under AB 2257 is that any person who intends to legally challenge the proposed sewer rates in court would be required to first submit a timely written objection, and the City will have an opportunity to consider and respond to the objection (including a potential modification to the proposed sewer rates) prior to approving the rates.

DISCUSSION
The rate structure in the Sewer rate study is calculated using Sewer Units (SU) based on Los Angeles County Sanitation Districts (LACSD) flow estimates. The charges would be levied yearly on the county tax rolls.

One SU represents the typical wastewater flow from a single-family home.

This means a single-family home is assigned 1 SU, while larger properties— such as restaurants and large institutions—that generate more wastewater PAGE 120 of 304
are assigned additional SUs to reflect their higher usage of the sewer system.

Table 1 below shows the annual charge per SU for the next 5-years by funding scenario. The rate revenue generated would be restricted and could only be used for sewer utility operations and capital improvement projects. This rate revenue would provide a funding source for Sewer improvements.

Table 1- FY 2026 Annual Charge per Sewer unit (SU) by Funding Scenario Funding
Scenario- 100%
CIP
Funding
Scenario75% CIP
Funding
Scenario- 50%
CIP
Annual Charge
PER SU $ 984 $ 756 $ 522
Staff is seeking direction on the funding scenario to use for the Sewer Rate study and authorization to proceed with the Proposition 218 notification and public hearing process in connection with the proposed sewer charges.

Alternative Rate Structure
During the Priority Initiatives presentation on March 12, 2025, staff received feedback from the City Council to explore the possibility of an alternative rate structure. Charging a single-family home a flat rate or by Sewer Unit (SU) is very common especially for cities that only collect sewage and send it to a regional treatment plant. Raftelis, the City‘s subject matter experts, know of no client/city that uses square footage to charge for sewer.

The alternative rate structure and shown on table 2 below would involve a hybrid methodology combining Sewer Units (SU) and square footage. Under this model:
• Commercial Customers: Charges would be based on Sewer Units (SU) as different businesses have varying wastewater flow requirements per sq. ft. For example, a restaurant has a higher sewer discharge per sq. ft. than a store.
• Residential Customers: Sewer charges would be calculated based on the square footage of the home. Using the latest County records, the square footage of each residential property would be determined, and the charge would be applied based on this size.

Table 2 below outlines the rate by funding scenario for both commercial and residential customers under this alternative approach.

Table 2- Alternative Rate Structure
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Funding
Scenario100% CIP
Funding
Scenario75% CIP
Funding
Scenario50% CIP
Commercial
Annual Charge
PER SU
$
984
$
756
$
522
Average Home
Square feet
Funding
Scenario100% CIP
Funding
Scenario75% CIP
Funding
Scenario50% CIP
Single Family Residential 1,500
$
491
$
377
$
261
2,000
$
655
$
503
$
347
2,500
$
819
$
629
$
434
3,005
$
984
$
756
$
522
3,500
$
1,146
$
881
$
608
4,000
$
1,310
$
1,006
$
695

FISCAL IMPACT & PROCUREMENT REVIEW
The financial impacts of implementing the Proposition 218 process consist of an estimated $6,500 for the preparation, printing, and mailing of notices.

Sewer rates, if implemented, would generate revenue that can fund over $36 million in needed sewer capital investments over the next 10 years. Achieving a self-sustaining sewer utility would ensure General fund revenues are spent on general operations.

LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.

RECOMMENDATION
Staff recommends that the City Council:
(1) Provide direction on the funding scenario to be used for the Sewer Rate Study;
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(2) Adopt the Resolution to approve the Sewer Service Charge Rate Setting Procedures; and
(3) Authorize staff to mail and post the Public Hearing Notice for June 27, 2025, to consider approval of the proposed sewer service charges.

ATTACHMENTS

1. Resolution No. R-25-09

2. Exhibit A- Sewer Service Charge Rate Setting Procedures PAGE 123 of 304
RESOLUTION NO. R-25-09

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF SAN MARINO ESTABLISHING SEWER SERVICE

CHARGE RATE SETTING PROCEDURES UNDER
PROPOSITION 218, AND GOVERNMENT CODE
SECTIONS 53750 THROUGH 53759.2
SECTION 1: The City Council of the City of San Marino finds and declares as follows:

A. The City of San Marino (“City”) provides sewer service to property owners (who may also be referred to as “owners”) within the City’s service area, and establishes the amount of sewer service charges to be paid by customers in accordance with San Marino Municipal Code (“Municipal Code”) and applicable law.

B. California law authorizes the City to charge a fee to the property owners or property owners’ “tenants” (who may be collectively referred to as “ratepayers” or “customers”) for the proportionate cost of providing sewer services to each customer in accordance with the procedural and substantive requirements of the voter-approved ballot measure known as “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been interpreted by judicial decisions). As used in this resolution:
1) The phrase “sewer service charges” may be used interchangeably with “sewer service rates” or “rates.”
2) The phrase "property owner” shall include any tenant who is directly liable to pay the sewer service charges.

C. Under Proposition 218, the City’s sewer service charges are considered to be a “fee” for a “property-related service” (also referred to as a “property-related fee”), subject to the particular requirements of Constitution Article XIII D, Section 6. A property-related fee is one imposed upon any parcel or person as an incident of property ownership. In general, the City may only establish or increase its existing sewer service charges if the City (1) calculates the sewer service charges in accordance with Proposition 218, (2) conducts a noticed public hearing before the City Council (“City Council”), as described in this resolution, and (3) a “timely written protest” is not submitted by property owners representing a majority of the parcels served by the City.

D. Under Government Code sections 53759.1 and 53759.2 (known as “AB 2257”), the City may establish a supplemental process for objecting property owners to exhaust administrative remedies, also described in this resolution, by which the City will take specified actions in response to any “timely written objection.” Under this process, only an owner who submits a timely written objection will have a right to challenge a proposed increase in sewer service charges through a legal proceeding. (These supplemental processes were authorized by Assembly Bill No. 2257, Chapter 561, Statutes of 2024, effective January 1, 2025.) PAGE 124 of 304
CITY OF SAN MARINO RESOLUTION NO. R-25-09
PAGE 2 OF 3
E. The purpose of this resolution is to document the processes the City will follow in considering proposed new or increased sewer service charges, including compliance with Proposition 218 as well as the exhaustion of administrative procedures under AB 2257. The processes described in this resolution provide a meaningful opportunity for a property owner to submit a written objection to proposed new or increased sewer service charges early in the rate consideration process, and to provide an opportunity for the City to address or resolve any objections before the City Council makes a final decision on whether to adopt a proposed sewer service charge pursuant to Proposition 218.

F. This resolution will identify the process the City will follow in order to implement the administrative remedies to be exhausted by property owners under Government Code sections 53759.1 prior to an owner initiating litigation to challenge the sewer service charges. In general, at least 45 days before a public hearing to consider a proposed new or increased sewer service charge, the City will make available the proposed sewer service charge, and post the written basis for the proposed sewer service charge on its internet website. The City will provide at least 45 days for any property owner to review the proposed sewer service charge and timely submit to the City a written objection to the sewer service charge that specifies the grounds for alleging noncompliance with Proposition 218. The City will consider and provide a substantive written response to each timely written objection submitted prior to the close of the public hearing described in Section 1(C).

G. For any sewer service charge approved by the City implementing the procedures described in this resolution, a person or entity shall be prohibited from bringing a judicial action or proceeding alleging noncompliance with Article XIII D of the California Constitution for those sewer service charge, unless that person or entity has timely submitted to the City a written objection to those rates that specifies the grounds for alleging noncompliance with Proposition 218.

H. The City Council hereby intends to adopt the exhaustion of administrative remedies procedure as outlined in Government Code section 53759.1, and the administrative record principles contained in Government Code section 53759.2.

SECTION 2: NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Marino, as follows:

A. The City Council hereby adopts the sewer service charge rate setting procedures attached hereto as Exhibit “A,” and incorporated herein by reference (“Sewer Service Charge Rate Setting Procedures”). The Sewer Service Charge Rate Setting Procedures explicitly incorporate and implement the requirements contained in Proposition 218 and the procedures by which property owners are required to exhaust administrative remedies as set forth in Government Code section 53759.1, subdivision (c).

B. For any sewer service charge adopted or approved by the City implementing the procedures described in this resolution, a person or entity shall be prohibited from bringing a judicial action or proceeding alleging noncompliance with Article XIII D of the California Constitution for those sewer service charge, unless that person or entity has timely submitted to PAGE 125 of 304
CITY OF SAN MARINO RESOLUTION NO. R-25-09
PAGE 3 OF 3
the City a written objection to those sewer service charges in accordance with this resolution that specifies the grounds for alleging noncompliance with Proposition 218.

C. The City Council hereby adopts the administrative record principles contained in Government Code section 53759.2.

D. This resolution will take effect on March 28, 2025, after initial City Council adoption, and will apply to any proposed new or increased sewer service charge of which notice is provided in accordance with this resolution.

E. The City Council authorizes the City Manager to take such other and additional actions as may be reasonably necessary to implement the purpose of this resolution and implement the exhaustion of administrative remedies procedure adopted herein.

PASSED, APPROVED, AND ADOPTED this 28th day of March, 2025. ______________________________________

GRETCHEN SHEPHERD ROMEY
MAYOR
ATTEST:
__________________________________

ALISON WALKER

CITY CLERK

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.

CITY OF SAN MARINO )
I, Alison Walker, City Clerk of the City of San Marino, California, hereby certify that Resolution No R-25-08 was adopted by the City Council of the City of San Marino at a Regular Adjourned Meeting held on the 28th day of March, 2025, and that the same was adopted by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:
________________________________

ALISON WALKER

CITY CLERK
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Resolution No. R-25-09 (Exhibit “A”)

Sewer Service Charge Rate Setting Procedures
These “Sewer Service Charge Rate Setting Procedures” (“Procedures”) describe the processes that will be followed by the City of San Marino (“City”) in establishing any new or increased sewer service charges, as summarized in the Resolution identified in the header of this Exhibit “A.”
The Sewer Service Charge Rate Setting Procedures include compliance with Proposition 218 (including the consideration of “written protests” from record owners) as well as the procedures for exhausting administrative remedies under Government Code section 53759.1 (including the consideration of “written objections” from record owners).

1. Overview of Exhaustion Procedure
If the City publishes a notice of public hearing identifying procedures for property owners to submit written objections (described in Section 2(b), below),1 the City will follow the “exhaustion procedure” set forth herein, to be conducted concurrently with the Proposition 218 process, for the City Council’s consideration of any proposed new or increased sewer service charges. This exhaustion procedure shall be conducted in accordance with “Proposition 218” (California Constitution Article XIII D; as it is implemented by the Legislature at Government Code sections 53750 – 53759.2; and as it has been interpreted by judicial decisions), and the particular procedures set forth in Government Code section 53759.1. The exhaustion procedure provides an opportunity for record owners to submit a “timely written objection” to identify substantive bases for asserting proposed sewer service charges do not comply with Proposition 218. A ”record owner” may be referred to in these Procedures as the “owner” or “property owner.” The “record owner” shall include any tenant who is directly liable to pay the sewer service charges. The processes described herein may be referred to as “these Procedures.” a. City staff will post on its internet website a notice of the exhaustion procedure, and this notice will be prominently incorporated in the Proposition 218 public hearing notice mailed to each record owner.
b. The notice will identify the date and time by which timely written objections must be submitted to the City, and the date will be no less than 45 calendar days after the notice is mailed to record owners.
c. City staff will review timely written objections and prepare written responses providing the substantive basis for retaining or altering the proposed sewer service charges in response to the written objections. City staff will present its written responses to the City Council prior to the close of the public hearing for the Proposition 218 protest hearing, and the City Council will review to determine whether action is needed in response to the written objections or written responses. 1 If the City publishes a notice of public hearing that does not identify procedures for property owners to submit written objections , the City will conduct the public hearing in compliance with Proposition 218, and consider any written protests in accordance with these Procedures.

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Resolution No. R-25-09 (Exhibit “A”)

d. Following the City Council’s review and response to timely written objections and written responses, it is within the discretion of the City Council to proceed with the Proposition 218 protest hearing process, as described herein, to consider approval of the proposed sewer service charges.
e. Rate Challenger Must Exhaust Administrative Remedies. No claim, suit for damages, suit for injunctive relief, petition for writ of mandamus, or administrative or judicial proceeding shall be brought against the City (including the City Council, or its employees, officers, or designees) regarding a challenge to a proposed sewer service charges unless the challenging party first exhausts its administrative remedies by complying with these Procedures and submitting to the City a timely written objection.

2. Notice of Proposition 218 Public Hearing and Initiating Exhaustion Procedure Prior to approving or imposing any new or increased sewer service charges, the City will conduct a public hearing and provide prior written notice to each record owner of the hearing and the exhaustion procedure as described in these Procedures. While the City is planning to establish a billing system for placing sewer service charges on the tax rolls for payment by record owners (in accordance with Health and Safety Code Section 5473), to the extent the City authorizes regular billing statement for sewer service charges to a “customer” (e.g., a “tenant” or other “ratepayer”) who is not the record owner, the City may also mail the written notice to the customer at the address for the billing statement. The City will mail the public hearing notice to each record owner no later than 45 days prior to the public hearing. The public hearing notice will include the content, and be published, as outlined below:
a. Compliance with Proposition 218:
(1) The date, time, and location of the public hearing. (2) The amount of the sewer service charge imposed on each parcel. This may be satisfied by identifying the rate amounts for each customer type subject to the rates.
(3) The basis upon which the amount of the proposed sewer service charges were calculated.
(4) The reason for the sewer service charges.
(5) The location to which owners must submit written protests via mail or personal delivery.
(6) How members of the public may obtain additional information regarding the proposed new or increased fee, including a link to information that is available on the City’s website or by requesting a mailed copy. This will include a copy of the resolution or ordinance by which the proposed new or increased sewer service charges are proposed to be adopted.

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Resolution No. R-25-09 (Exhibit “A”)

(7) In addition to the requirements of Proposition 218, to the extent relevant to support covenants for bond financing that rely on revenue from sewer service charges, pursuant to Government Code section 54354.5, the notice will identify the opportunity for record owners to be heard as to whether the proposed sewer service charges are not in compliance with any requirements of the Revenue Bond Law of 1941 (Government Code Sections 53000 – 55821), including: (a) the rates are discriminatory or excessive, or (b) the rates will not be sufficient under the provisions of any outstanding revenue bonds (including Government Code section 54515).
b. Compliance with the Exhaustion Procedure for Written Objections. If the City chooses to follow the exhaustion procedure for written objections, concurrently with mailing the public hearing notice, the City will post on its internet website the written basis for the proposed sewer service charges and a link to the Proposition 218 public hearing notice which will be supplemented with the following prominently displayed information:
(1) The “deadline” (date and time) by which a “timely written objection” must be submitted to the City. The deadline will be no earlier than 45 days after the City mails to property owners the notice of the public hearing. (2) The location to which written objections must be submitted to the City via mail, email, fax, or personal delivery.
(3) All substantive requirements for submitting a written objection. The record owner must comply with the requirements set forth in Procedures section 3, below, including specifying the grounds on which the owner alleges the proposed new or increased sewer service charges do not comply with Proposition 218. (4) Prominently identify that: (a) any person’s failure to submit a timely written objection bars any right of that person to challenge the proposed new or increased fee through a legal proceeding; and (b) there is a 120-day statute of limitations for challenging the proposed new or increased sewer service charges (in accordance with Government Code section 53759).
c. The City will mail the public hearing notice to each record owner of a parcel that is subject to payment of the new or increased sewer service charges. The notice shall be mailed to owner’s address shown on the last equalized property tax assessment roll. (1) There is a rebuttable presumption that the most recent equalized property tax assessment roll of the Los Angeles County Recorder is sufficient evidence of the record owner of each parcel. A person may rebut the presumption by providing to the City written proof of ownership.
(2) The City Clerk, or designee, may certify by affidavit the proper mailing of notices described in these Procedures, and any such affidavit shall constitute conclusive proof of mailing in the absence of fraud.

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Resolution No. R-25-09 (Exhibit “A”)

(3) Failure of any person to receive notice shall not invalidate the hearing or its results.
(4) The City may also provide supplemental notices to the address where the City customarily mails the billing statement for sewer service charges. d. Concurrently with publishing and mailing the public hearing notice, the City will post on its website relevant information regarding the proposed new or increased sewer service charges including a copy of the “Rate Study” which provides documentation of compliance with all substantive requirements of Prop 218 regarding the calculation of the amount of the proposed new or increased sewer service charges.

3. Requirements for Submitting Timely Written Objections In order for a record owner to submit a timely written objection, it must:
a. Be received by the City at the location identified on the public hearing notice, no later than the deadline identified on the public hearing notice. The deadline may be no earlier than 45 days after the City mails to record owners the notice of public hearing. b. Be in writing submitted via mail, email, fax, or personal delivery (1) identifying the name of the record owner, and the street address or assessor’s parcel number (or other clear identification) of the property subject to the sewer service charges; and (2) signed by the record owner, or otherwise identifying that the record owner submitted the written objection, subject to verification by the City.
c. Specify the grounds for alleging the proposed sewer service charges do not comply with Proposition 218. The grounds must identify (i) the substantive requirement of Proposition 218, and (ii) the reason the proposed sewer service charges do not comply with that requirement. It is not a legally sufficient written objection under these Procedures to simply claim that a proposed sewer service charge does not comply with Proposition 218, unless the written objection includes an explanation of the factual basis for the claim (the relevant provision of Proposition 218, and how that provision is not satisfied by the proposed sewer service charge). For any proposed new or increased “fee” for a propertyrelated service (such as sewer service charges), relevant substantive requirements of Proposition 218 include:
(1) Revenues derived from the sewer service charges shall not exceed the funds required to provide the property related sewer service. (2) Revenues derived from the sewer service charges shall not be used for any purpose other than that for which the fee or charge was imposed. (3) The amount of the sewer service charges shall not exceed the proportional cost of the sewer service attributable to the parcel.

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Resolution No. R-25-09 (Exhibit “A”)

(4) No sewer service charges may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Sewer service charges based on potential or future use of a service are not permitted.
(5) No sewer service charges may be imposed for general governmental services including, but not limited to, police, fire, ambulance or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.

PAGE 131 of 304
Resolution No. R-25-09 (Exhibit “A”)

4. Requirements for Submitting Timely Written Protests
For the purpose of considering and counting written protests, the City will consider the term “record owner” to include tenancies of real property where tenants are directly liable to pay the sewer service charges to the City (consistent with Proposition 218; California Constitution Article XIII D, Section 2(g)).

In order for a record owner to submit a timely written protest, to be considered as a part of the Proposition 218 protest hearing described in Section 6, below, it must:
a. Be received by the City at the location identified on the public hearing notice, no later than the close of the public testimony portion of the public hearing. b. Be in writing on paper (1) identifying the name of the record owner, and the street address or assessor’s parcel number (or other clear identification) of the property subject to the sewer service charges; and (2) signed by the record owner, subject to verification by the City.
c. Must clearly identify that the record owner opposes the proposed new or increased sewer service charges that are the subject of the hearing. d. Will only be counted as one protest per parcel. That means if any one or more record owners of a parcel submits a timely written protest (or timely written objection) for the same parcel, it will be counted as one timely written protest. e. Record owners of multiple parcels within the City may file one protest for each parcel owned within the City’s service area.
f. A record owner may withdraw a written protest only if the withdrawal is submitted in writing by the record owner clearly indicating an intent to withdraw for an identified property, and it is received by the City at the location (and no later than the time) for submitting written protests. After a written protest is withdrawn, a record owner may submit a new or replacement written protest in accordance with the requirements of these Procedures. No other modification to a timely written protest may be made. g. The City Clerk shall take custody of all submitted written objections and written protests.
(1) In order to protect the integrity of the procedures for considering written objections and written protests as described in these Procedures, all written objections and written protests shall remain confidential until the City Manager (or designee) has determined they may be published in accordance with the criteria in paragraph 4(g)(2).
(2) Any submitted written objection and written protest shall be a public record, subject to the City’s determination that the public interest served by not disclosing clearly outweighs the public interest served by disclosure under Government Code PAGE 132 of 304
Resolution No. R-25-09 (Exhibit “A”)

section 7922.000. As a general rule, the City finds there is a substantial public interest in not disclosing written objections and written protests to protect the integrity of the process described herein during the time that: (A) written objections are still being submitted and (B) prior to the time that the Brown Act meeting agenda is posted (e.g., at least 72 hours before a regular meeting under Government Code section 54954.2).

5. City’s Response to Timely Written Objections
At the close of the written objection period, City staff shall review timely written objections and shall prepare written responses to the written objections. The City’s written response will include: (i) the grounds on which the objection is (or is not) resulting in amendments to the proposed new or increased sewer service charges; and (ii) an explanation of the substantive basis for retaining or altering the proposed new or increased sewer service charges.

City staff shall present the written responses to the City Council at the public meeting that was specified in the public hearing notice described in Section 2, above. a. In accordance with the Brown Act, the public will be provided an opportunity to address the City Council prior to the Council’s action related to the timely written objections and written responses. (See Government Code section 54954.3(a).) b. In accordance with Government Code section 53759.1(d), the City Council, in exercising its legislative discretion in considering timely written objections and written responses, shall determine for the proposed new or increased sewer service charges whether further review, clarification, or reduction is needed, and whether to proceed to the Proposition 218 protest hearing.

6. Conducting the Proposition 218 Protest Public Hearing If the City Council determines to proceed to the Proposition 218 protest public hearing for proposed new or increased sewer service charges (as previously noticed in accordance with Section 2, above), the public hearing shall be conducted consistent with the following:
a. The City Council will open the public hearing and consider all evidence presented during the hearing including the public hearing notice and all documents referenced therein (particularly including the Rate Study), all written objections, written responses, written protests, and any testimony, documents, or information presented during the public hearing.
b. Prior to closing the public hearing, the City Council will request if there are any additional written protests to be submitted to (or withdrawn from) the City. c. The City Council will then close the public hearing and request a report from the City Clerk to identify the number of timely written protests compared to the total number of parcels subject to the new or increased sewer service charges.

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Resolution No. R-25-09 (Exhibit “A”)

(1) A majority protest exists only if the number of timely written protests exceeds one-half of the parcels served by the City.
(2) If the City Clerk determines that additional time is needed to tabulate timely written protests, the City Council shall recess or continue the public meeting to provide sufficient time for the City Clerk to complete the tabulation. (3) If the City Clerk determines that there is a majority protest, the City shall not impose the new or increased sewer service charges.
(4) If the City Clerk determines that there is not a majority protest, the City Council shall continue its deliberations and take action on the proposed new or increased sewer service charges.
(5) The City Clerk’s determinations under these Procedures shall be the final determination of the City subject to appropriate judicial review. This shall include the City Clerk’s determinations that: (a) a written protest meets the requirements for a timely written protest in accordance with these Procedures; or (b) a majority protest has (or has not) been submitted for the proposed sewer service charges.

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TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer DATE: March 28, 2025
SUBJECT: APPROVAL OF CONTRACT AMENDMENT NO. 1 TO THE

PROFESSIONAL SERVICES AGREEMENT WITH Z&K

CONSULTANTS IN THE NOT TO EXCEED AMOUNT OF
$80,268

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
Safe Community
Well-Maintained Infrastructure

BACKGROUND
On July 26, 2024, the City Council awarded a contract to Onyx Paving Company, Inc. for Street Rehabilitation Project No. 22-9271 and 23-9271 in the amount of $7,171,000. As part of this award of contract, the City Council also authorized the Public Works Director/City Engineer to approve contract change orders and other contingencies in an amount not to exceed $358,500.

These contingencies are commonplace for larger construction projects such as this, as it enables the City to cover costs due to unforeseen conditions or to request additional work. Contingency funds are only utilized if the fully contracted amount is on track to be spent. The current Street Rehabilitation Project is on schedule to be complete next month with cost savings remaining that can be utilized to complete additional streets and associated concrete repairs under the current project that were not included in the original scope of work due to budget constraints. Proceeding with the additional streets now allows the City to utilize the unit bid prices for the current project to complete the additional work.

Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
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DISCUSSION
The City’s Street Rehabilitation Project with Onyx Paving is currently ongoing and nearing completion. The City has been in consistent communication with Onyx and the City’s construction manager, Z&K Consultants, regarding the budget to track the project’s remaining funds projections consisting of cost savings of approximately $1.2 million plus the project contingency of $358,500 that can be utilized to complete additional streets that were not included in the original scope of work. Completing the additional streets now allows the City to utilize the unit bid prices for the current project to complete the additional work and accelerate the schedule for the rehabilitation of more streets with the budget appropriated for this project. Based upon the projected remaining funds for the project, staff is working with Onyx to complete rehabilitation of the following additional streets:
• Del Mar Boulevard – Lorain Road to Huntington Drive
• Old Mill Road – Monterey Road to North City Limit (N.C.L.) • Old Mill Road – Sherwood Road to Roanoke Road
• Euston Road – Wembley Road to Oxford Road
In order to complete the additional resurfacing of the streets above and associated concrete repairs, professional construction management services are recommended to continue through the extended duration of the project for 30 additional days to ensure an experienced construction manager is on site to oversee the construction of the additional streets and deliver a successful project. The City contracted with Z&K Consultants for the Street Rehabilitation Project, and recommends approval of Amendment No. 1 to their existing agreement in the not to exceed amount of $80,268 increasing the total compensation for construction management services on the project to $280,264 to include the additional streets. Z&K Consultants has worked with the City on multiple street rehabilitation projects, including receiving the award of contract for the current project through a competitive RFP process.

Z&K has been highly professional during these projects and is very familiar with the City and City-affiliated construction projects. Additionally, they have worked successfully with Onyx to this point on the Street Rehabilitation Project, which would enable this change order work to be completed in an efficient manner.

Given all of the above-mentioned factors, staff recommends the City Council approve contract Amendment No. 1 with Z&K Consultants to continue providing construction management services for the completion of the additional street rehabilitation work.

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FISCAL IMPACT & PROCUREMENT REVIEW
At its July 26, 2024, meeting, the City Council approved awards of contract related to the Street Rehabilitation Project, including to Z&K Consultants for Construction Management services. At that meeting, the project budget was presented as such;
Costs for Street Rehabilitation Project
Item Cost
Construction Contract (Onyx Paving) $7,171,000
Construction Contingency (5%) $358,500
Construction
Management/Inspection (Z&K
Consultants)
$199,996
Total Project Cost $7,729,496
The proposed Amendment No.1 with Z&K in the amount of $80,268 falls within the construction contingency amount of $358,500. As such, sufficient funds have been budgeted in Account # 394-48-4600-9271 for the completion of the additional work. No additional appropriation is required.

LEGAL REVIEW
The City Attorney's office has reviewed the staff report and approved as to form.

RECOMMENDATION
Staff recommends that the City Council approve Amendment No.1 with Z&K Consultants in an amount not to exceed $80,268 for additional construction management services associated with the project, and authorize the City Manager to execute the contract amendment on behalf of the City. If the Council concurs, an appropriate motion would be:
“I move to approve Amendment No.1 with Z&K Consultants in an amount not to exceed $80,268 for additional construction management services associated with the project, and authorize the City Manager to execute the contract amendment on behalf of the City.”

ATTACHMENTS

1. Draft Amendment No.1 with Z&K Consultants

2. Original Agreement with Z&K Consultants
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TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Amber Shah, Parks & Public Works Director/City Engineer DATE: March 28, 2025
SUBJECT: AWARDS OF 3-YEAR MAINTENANCE SERVICES
AGREEMENTS TO SO-CAL ELECTRIC, INC., ACCO
ENGINEERED SYSTEMS, GRAYCON INC., AMTEK

CONSTRUCTION, AND CREATIVE AIR MECHANICAL
SERVICES INC. IN AN AMOUNT NOT TO EXCEED $50,000

PER YEAR EACH FOR ON-CALL MAINTENANCE SERVICES

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Efficient, Responsive, and Effective City Services
Fiscally Responsible and Transparent City Government
Safe Community

BACKGROUND
Historically, the City has relied upon various contractors of specialized trades when necessary to perform maintenance or larger-scale repairs at City facilities. This work most often includes electrical, HVAC, and plumbing work.

In order to improve the efficiency of the process to complete facilities maintenance and repairs when an outside contractor is required, staff issued a Request for Proposals (RFP) on February 14, 2025, for multi-year on-call maintenance services. The RFP included three (3) different categories for prospective proposers to submit under; electrical services, HVAC services, and plumbing services. On March 10, 2025, six (6) firms submitted Proposals to provide on-call maintenance services for the City’s review and evaluation.

Based on staff evaluation of the proposals and the proposed costs, staff recommends that the City enter into Maintenance Services Agreements (MSAs) with the following qualified firms:

Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
PAGE 167 of 304
• So-Cal Electric, Inc, and Amtek (Electrical)
• ACCO (Plumbing)
• Graycon, and Creative Air Mechanical (HVAC)

DISCUSSION
The City’s staffing model requires reliance upon licensed contractors to handle a variety of specialized maintenance and repair work at City-owned facilities.

In order to improve the efficiency of the process to complete facilities maintenance and repairs when an outside contractor is required and reduce the amount of staff time required to obtain multiple bids each time, the firms with the lowest hourly rate for each trade selected through this RFP will provide services on an on-call as needed basis.

The Scope of Services for On-Call Maintenance Services requested in this RFP included, but is not limited to, the following:

CATEGORY 1: ELECTRICAL SERVICES
• Troubleshoot electrical issues as directed by the City • Perform basic and/or major repairs of electrical systems and equipment • Repair lamps and fixtures as high as 30 feet
• Repair low and high voltage equipment up to 480 volts • Perform equipment replacement or repair as directed by the City • Install new equipment/fixtures as directed by the City • Coordinate repair scope, cost and schedule with the City • Additional services may be performed on an as-needed basis as directed by the City
CATEGORY 2: PLUMBING SERVICES
• Perform work to address plumbing issues identified by the City • Perform basic and major repairs of plumbing leaks/breaks and open clogged lines and drains
• Repair and/or replace fixtures such as toilets, urinals, wax rings, seals, sinks, faucets, etc.
• Install and repair water heaters and boilers
• Assemble, install, and repair pipes and fittings of heating, water, and drainage systems
• Coordinate repair scope, cost and schedule with the City • Additional services may be performed on an as-needed basis as directed by the City
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CATEGORY 3: HVAC SERVICES
• Troubleshoot HVAC issues as directed by the City
• Perform basic and major repairs of HVAC systems and equipment, including but not limited to; chillers, package units, etc. • Perform equipment replacement as directed by the City • Install new equipment as directed by the City
• Coordinate repair scope, cost and schedule with the City • Perform routine preventative maintenance of equipment on a quarterly basis
• Additional services may be performed on an as-needed basis as directed by the City
On March 10, 2025, six (6) firms submitted proposals to provide on-call maintenance services for the City’s review and evaluation. As Respondents were able to submit proposals for multiple categories, some responses encompassed multiple categories. Ultimately, the breakdown of submissions by category were as follows:

Category Number of Responses to RFP
Electrical Services 3
Plumbing Services 1
HVAC Services 4
Staff evaluated these proposals to identify firms that were the lowest responsive, qualified bidder. Based on this, staff recommends that the City enter into MSAs with a total of five (5) qualified firms, as shown below:
• So-Cal Electric, Inc (Electrical)
• Amtek (Electrical)
• ACCO (Plumbing)
• Graycon (HVAC)
• Creative Air Mechanical (HVAC)
So-Cal Electric, ACCO, and Graycon, will be the primary on-call maintenance contractors for electrical services, plumbing services, and HVAC services, respectively, as they were each the lowest qualified bidder. Each agreement will be task-order based and in an amount not to exceed $50,000 per fiscal year.

So-Cal Electric has been in business for 25 years, and specializes in the maintenance and installation of electrical equipment, ranging from smaller electrical repairs to the ability to work on larger electrical equipment such as PAGE 169 of 304
generators. The City has worked with So-Cal Electric in the past for various electrical repairs and maintenance-related projects, and has found them to be professional, efficient, responsive, and perform quality work. Overall, So-Cal Electric’s familiarity with San Marino and its facility needs makes them wellsuited to provide on-call electrical services for the City. Should So-Cal Electric not be available or unable to perform the work in the event of a request for electrical services from the City, the City will then utilize Amtek. Amtek has been in business for over 40 years and has contracts with multiple municipalities, making them well-qualified to perform the work.

The City received one (1) proposal for plumbing services, from ACCO. ACCO has been in business for several decades and has experience on a wide range of plumbing repairs, as well as working with public agencies. As such, they are well-suited to perform this work on an on-call basis.

In regards to HVAC proposals, Graycon is a licensed HVAC contractor that has been in business in the mechanical contracting industry for over 50 years, and has substantial experience performing routine maintenance on a full range of HVAC parts and equipment. Furthermore, Graycon has valuable experience performing repairs on larger HVAC equipment, such as chillers and split-units, making them a good fit to perform work on the larger units located at the Crowell Public Library and San Marino Community Center. Similar to So-Cal Electric, the City has worked with Graycon on various projects in the past, and has found their work to be professional and of good quality. In the event that Graycon is unavailable or unable to perform the work, the City will utilize Creative Air Mechanical Services. Creative Air Mechanical has experience both with performing the types of repairs needed by the City, as well as experience working with public agencies, as they provide on-call services for multiple other jurisdictions.

Having multiple firms on-call to provide as-needed on-call maintenance services allows the City more options for short-term assignments by different contractors. If a particular contractor is unable to perform the work or is not available at a desired time, another contractor can fulfill that need. This provides the City the flexibility to have another qualified firm that has already been qualified through the RFP process and under contract with the City to provide services in a timely manner. The proposed MSAs for all firms have an initial three-year term, are task-order based, and are non-exclusive which allows the City maximum flexibility for requesting services and, as desired, to seek additional proposals from other firms for any particular project or initiative.

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FISCAL IMPACT & PROCUREMENT REVIEW
The use of on-call maintenance services is included in the Parks and Public Works Department Operating Budget Building Repair and Maintenance Account (Account # 101-53-4206-0000) Additionally, the Department may also utilize the on-call contracts to assist with the execution of various projects within the Capital Improvement Program (CIP), including but not limited to; the Emergency Generator Connection, and EOC Improvements. By entering into multiple on-call MSAs for as-needed on-call services, the City is neither obligating itself nor guaranteeing any compensation to the selected contractors. Each of the proposed MSAs establish an annual maximum compensation value of $50,000 with a three-year term maximum compensation value of $150,000.

LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.

RECOMMENDATION
Staff recommends the City Council award maintenance services agreements for on-call maintenance services to So-Cal Electric Inc., ACCO Engineered Systems, Inc., and Graycon Inc. as the primary on-call contractors, and award agreements to Amtek Construction and Creative Air Mechanical Services, LLC as secondary on-call contractors. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to award three-year maintenance services agreements for on-call maintenance services to So-Cal Electric Inc., ACCO Engineered Systems, Inc., and Graycon Inc. as the primary on-call contractors, and award agreements to Amtek Construction and Creative Air Mechanical Services, LLC as secondary on-call contractors, and authorize the City Manager to execute the agreements on behalf of the City.”

ATTACHMENTS

1. Draft Agreement – So-Cal Electric

2. Draft Agreement – ACCO Engineered Systems

3. Draft Agreement – Graycon Inc.

4. Draft Agreement – Amtek Construction

5. Draft Agreement – Creative Air Mechanical Services
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TO: Mayor and City Council
FROM: Philippe Eskandar, City Manager
BY: Hillary Guirola-Leon , Finance Director
DATE: March 28, 2025
SUBJECT: AUTHORIZATION TO ENTER INTO A 3-YEAR AGREEMENT

FOR SAFEKEEPING SERVICES

STRATEGIC PLAN CRITICAL SUCCESS FACTORS
Fiscally Responsible and Transparent City Government

BACKGROUND
Per the City of San Marino’s investment policy, all securities owned by the City shall be held in safekeeping by a third-party bank trust department. The City currently uses US Bank for safekeeping services. On March 7, 2025, the City was informed that the current safekeeping services platform will sunset on April 30, 2025, and will not continue. The City had short notice regarding the upcoming sunset of our current safekeeping services and had to find alternative solutions for a new safekeeping services agreement to stay in compliance with its own investment policy.

A safekeeping services agreement ensures that valuable assets or documents are held securely by a third party, mitigating risks associated with loss, theft, or mismanagement. The City seeks to enter into this agreement with BMO Bank N.A. (“BMO”) to ensure compliance with industry standards and regulatory requirements.

DISCUSSION
As soon as staff was alerted of the upcoming sunset of our current safekeeping services platform, staff contacted two banks to compare services offered for safekeeping as well as obtained an alternative solution offered by our current Gretchen Shepherd Romey, Mayor
Tony Chou, Vice Mayor
Hunter Chang, Council Member
John Chou, Council Member
Calvin Lo, Council Member
PAGE 297 of 304
provider, US Bank. Staff contacted East West Bank and BMO for proposals and received one formal proposal from BMO as East West Bank cannot meet the requirements of the City’s current investment policy. Based on staff’s evaluation and conversation with three banks, staff recommends that the City enter into an agreement with BMO for safekeeping services.

US Bank offered custody safekeeping services as an alternative to the current services provided which would have a minimum fee of $15,000 annually. This would be an increase of approximately $13,000 from our current fees.

BMO submitted a proposal as shown in Attachment 1. BMO is one of the top five commercial banks in North America and they have a local presence and government banking team. The proposal as shown in Attachment 1 is for a 3- year agreement with an option to renew 2 additional 1-year terms. The monthly fee would be based on our activity and is estimated to be approximately $503.25 a month ($6,039 annually) based on our latest statement activity. A demand deposit account (DDA) is also necessary in order to establish this service. This is similar to the current structure the City has for its safekeeping services with US Bank.

After reviewing the proposals, staff recommends that the City proceed with entering into an agreement with BMO for safekeeping services, a recommendation that has also been discussed and supported by the city finance liaison.

FISCAL IMPACT & PROCUREMENT REVIEW
The annual fee for Safekeeping services is approximately $6,039. No budget adjustment is needed to cover this cost.

The Finance Director has reviewed all three proposals and the bidding is in compliance with the City’s Municipal Code in regards to procurement of contracts for services.

LEGAL REVIEW
The City Attorney's office has reviewed and approved as to form.

RECOMMENDATION
Staff recommends the Council authorize the City Manager or his designee to execute the agreements necessary to enter into a 3-year agreement with an option to renew 2 additional 1-year terms with BMO for safekeeping services, PAGE 298 of 304
subject to final language approval by the City Manager and City Attorney, and open a demand deposit account. If the City Council concurs with staff’s recommendation, an appropriate motion would be:
“I move to approve the City Manager or his designee to execute the agreements necessary to enter into a 3-year agreement with an option to renew 2 additional 1-year terms with BMO for safekeeping services, subject to final language approval by the City Manager and City Attorney and open a demand deposit account.”

ATTACHMENTS

1. BMO Proposal Letter and Pricing
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