Agenda packet, first session — Seal Beach City Council, March 10, 2025

A G E N D A

MEETING OF THE CITY COUNCIL
Monday, March 10, 2025 ~ 7:00 PM
City Council Chambers
211 Eighth Street
Seal Beach, California

LISA LANDAU
MAYOR
Third District

NATHAN STEELE
MAYOR PRO TEM
Fifth District

JOE KALMICK
COUNCIL MEMBER
First District

BEN WONG
COUNCIL MEMBER
Second District

PATTY SENECAL
COUNCIL MEMBER
Fourth District
This Agenda contains a brief general description of each item to be considered. No action or discussion shall be taken on any item not appearing on the agenda, except as otherwise provided by law. Supporting documents, including agenda staff reports, and any public writings distributed by the City to at least a majority of the Council Members regarding any item on this agenda are available on the City’s website at www.sealbeachca.gov.

City Council meetings are broadcast live on Seal Beach TV-3 and on the City's website (www.sealbeachca.gov). Check SBTV-3 schedule for the rebroadcast of meetings. The meetings are also available on demand on the City’s website (starting 2012).

In compliance with the Americans with Disabilities Act of 1990, if you require disability related modifications or accommodations, including auxiliary aids or services to attend or participate in the City Council meeting, please call the City Clerk's office at (562) 431-2527 at least 48 hours prior to the meeting.

CITY COUNCIL NORMS:

Adopted on June 12, 2023
• Maintain a citywide perspective, while being mindful of our districts. • Move from I to we, and from campaigning to governing. • Work together as a body, modeling teamwork and civility for our community. • Assume good intent.
• Disagree agreeably and professionally.
• Utilize long range plans to provide big picture context that is realistic and achievable. • Stay focused on the topic at hand. Ensure each member of Council has an opportunity to speak.
• Demonstrate respect, consideration, and courtesy to all. • Share information and avoid surprises.
• Keep confidential things confidential.
• Respect the Council/Manager form of government and the roles of each party. • Communicate concerns about staff to the City Manager; do not criticize staff in public.

CIVILITY PRINCIPLES:

Treat everyone courteously;
Listen to others respectfully;
Exercise self-control;
Give open-minded consideration to all viewpoints;
Focus on the issues and avoid personalizing debate; and, Embrace respectful disagreement and dissent as democratic rights, inherent components of an inclusive public process, and tools for forging sound decisions.

@CITYOFSEALBEACH @CITYOFSEALBEACHCA @SEALBEACHCITYCA @SEALBEACHRECREATION&COMMUNITYSERVICES @SEALBEACH_LIFEGUARD @SEALBEACHPOLICEDEPARTMENT @SEALBEACHPOLICE @SEALBEACHPUBLICWORKS
@K9YOSA
@K9.SAURUS

CALL TO ORDER

PLEDGE OF ALLEGIANCE

COUNCIL ROLL CALL

PRESENTATIONS / RECOGNITIONS
• Lifeguard Department Recruitment Presentation

ORAL COMMUNICATIONS
At this time members of the public may address the Council regarding any items within the subject matter jurisdiction of the City Council. Pursuant to the Brown Act, the Council cannot discuss or take action on any items not on the agenda unless authorized by law. Matters not on the agenda may, at the Council's discretion, be referred to the City Manager and placed on a future agenda.

Those members of the public wishing to speak are asked to come forward to the microphone and state their name for the record. All speakers will be limited to a period of five (5) minutes. Speakers must address their comments only to the Mayor and entire City Council, and not to any individual, member of the staff or audience. Any documents for review should be presented to the City Clerk for distribution. Speaker cards will be available at the Clerk’s desk for those wishing to sign up to address the Council, although the submission of a speaker card is not required in order to address the Council.

Public Comment Received via Email from Jo8n

APPROVAL OF AGENDA & WAIVER OF FULL READING OF RESOLUTIONS

ORDINANCES
By motion of the City Council this is the time to notify the public of any changes to the agenda and /or rearrange the order of the agenda.

CITY ATTORNEY REPORT Nicholas Ghirelli, City Attorney
CITY MANAGER REPORT Patrick Gallegos, Interim City Manager

COUNCIL COMMENTS
General Council Member comments and reporting pursuant to AB 1234.

COUNCIL ITEMS – None

CONSENT CALENDAR
Items on the consent calendar are considered to be routine and are enacted by a single motion with the exception of items removed by Council Members.

A. Approval of the City Council Minutes - That the City Council approve the minutes of the Closed Session and Regular City Council meetings held on February 24, 2025.

B. Demand on City Treasury (Fiscal Year 2025) - Ratification.

C. Approving and Authorizing Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. for Water and Wastewater Financial Planning Services - That the City Council adopt Resolution 7620: 1. Approving Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. dated June 12, 2023, as previously amended by Amendment 1 dated March 25, 2024, to provide additional Water and Wastewater Financial Planning Services; increase compensation for such additional services by $51,527 for a revised total contract not-to-exceed amount of $187,294; and extend the term to December 31, 2025; and,2. Authorizing and directing the Interim City Manager to execute Amendment 2 on behalf of the City; and, 3. Authorizing the Interim City Manager to approve unforeseen additional work requests, up to the total notto-exceed amount of $10,000.

D. Awarding and Authorizing Execution of a Public Works Agreement with R.J. Noble Company for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301 - That the City Council adopt Resolution 7622: 1. Approving the plans, specifications, and contract documents for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301; and, 2. Approving and awarding a Public Works Agreement to R.J. Noble Company in the amount of $522,981.50, and rejecting all other bids; and, 3.

Authorizing the Interim City Manager to execute a Public Works Agreement with R.J. Noble Company for the Project; and, 4. Authorizing the Interim City Manager to approve additional work requests up to $60,000 and construction support/testing/inspection services up to $60,000, in connection with the Project, in the cumulative not-to-exceed amount of $120,000; and, 5.

Authorizing the Interim City Manager to approve, by change order, additional work requests for Bid Item #11, in the not-to-exceed amount of $47,250.00.

E. Approving an Orange County Water District Producer Well Construction Loan Agreement for the Lampson Well Treatment System, CIP WT1902 - That the City Council adopt Resolution 7623: 1. Approving an Orange County Water District Producer Well Construction Loan Agreement for the Lampson Well Treatment System, CIP WT1902; and, 2. Authorizing the Interim City Manager to execute the Agreement for an estimated amount of $4,450,000, with the final amount to be determined upon receipt of publicly solicited bids; accept, receive, and utilize the Agreement funding on behalf of the City.

F. Approving a Side Letter of Agreement to the Memorandum of Understanding (MOU) between the City of Seal Beach and the Seal Beach Police Officers Association for the July 1, 2023 through June 30, 2025 MOU Term - That the City Council adopt Resolution 7624: 1. Approving the Side Letter of Agreement to the Memorandum of Understanding between the City of Seal Beach and the Seal Beach Police Officers Association for the July 1, 2023 through June 30, 2025 MOU term; and, 2. Authorizing the Interim City Manager to execute the Side Letter of Agreement.

G. Approving a Professional Services Agreement with The Pun Group, LLC for Annual Auditing Services - That the City Council adopt Resolution 7625:

1. Approving the Professional Services Agreement with The Pun Group, LLC, dated March 10, 2025, to provide annual auditing services for three consecutive years, beginning with the fiscal year (FY) ending June 30, 2025, in the amount of $52,140 for FY 2024-25, $54,747 for FY 2025-26, $57,485 for FY 2027-28, and the total contract not-to-exceed amount of $164,372 for the three-year term; and with an option to renew for two additional one-year terms in the not-to-exceed amount of $60,359 for the first extension and $63,376 for the second extension; and, 2. Authorizing and directing the Interim City Manager to execute the Agreement; and, 3. Authorizing the Interim City Manager to approve additional work requests related to GASB services, in the not-to-exceed amount of $5,000 per year of the original term and for each one-year extension.

ITEMS REMOVED FROM THE CONSENT CALENDAR
PUBLIC HEARING – None
UNFINISHED / CONTINUED BUSINESS – None

NEW BUSINESS
H. Fiscal Year 2024-25 Mid-Year Budget Update and Consideration of Proposed Amendment to the Fiscal Year 2024-25 Budget - That the City Council receive and file the Fiscal Year 2024-25 Mid-Year Budget Update and adopt Resolution 7626 to approve Budget Amendment BA #25-09-01.

ADJOURNMENT
Adjourn the City Council to Monday, March 24, 2025 at 5:00 p.m. to meet in closed session.
1 Brandon DeCriscio
From: JO8N <[email protected]>
Sent: Monday, March 10, 2025 4:20 PM
To: Gloria Harper; Brandon DeCriscio; Lisa Landau; Nathan Steele; Joe Kalmick; Ben Wong; Patty Senecal
Subject: Re: Public Comment For 3/10/25 City Council Meeting On Monday, March 10th, 2025 at 11:18 PM, JO8N <[email protected]> wrote:

I Love You Sister Lisa. Truly, Truly, Just Look At Jesus Christ With Me:

On the eighth day, when it was time to circumcise the child, he was named Jesus, the name the angel had given him before he was conceived. (Luke 2:21) "Οἱ οὖν στρατιῶται, ὅτε ἐσταύρωσαν τὸν Ἰησοῦν, ἔλαβον τὰ ἱμάτια αὐτοῦ, καὶ ἐποίησαν τέσσαρα μέρη, ἑκάστῳ στρατιώτῃ μέρος, καὶ τὸν χιτῶνα. ἦν δὲ ὁ χιτὼν ἄραφος, ἐκ τῶν ἄνωθεν ὑφαντὸς δι’ ὅλου." (John 19:23)
https://biblehub.com/text/john/19-23.htm
There are no significant textual variants in the Greek manuscripts, though there are a couple of bad spellings in a few manuscripts. From the point of view of Greek grammar this is perfectly transparent. The verb ἔλαβον (they took) is followed by two direct objects in the accusative case: τὰ ἱμάτια (the outer garments) and τὸν χιτῶνα (the undergarment). There is no way that καὶ τὸν χιτῶνα could mean “with the undergarment remaining”.

Instead, one of the soldiers pierced Jesus' side with a spear, bringing a sudden flow of blood and water. (John 19:34)
Pilate also wrote an inscription and put it on the cross. It read, “Jesus of Nazareth, the King of the Jews.” Many of the Jews read this sign, for the place where Jesus was crucified was near the city, and the sign was written in Aramaic, Latin and Greek. (John 19:19-20) ⭼⭽⭾⭿⮀⮁⮂
ၒၓ࿬࿭࿮⯴⯵⯶
⍾
I Am A Doubting Thomas. If Your Church Has Another Way To Put My Hand In The Side Of Jesus Christ, I Am Willing To Try.
https://en.wikipedia.org/wiki/Gematria
1A 2B 3C 4D 5E 6F 7G
JO8N
2 Agenda Item A

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Gloria D. Harper, City Clerk
SUBJECT: Approval of the City Council Minutes
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council approve the minutes of the Closed Session and Regular City Council meetings held on February 24, 2025.

BACKGROUND AND ANALYSIS:

This section does not apply.

ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

LEGAL ANALYSIS:

No legal analysis is required for this item.

FINANCIAL IMPACT:

There is no financial impact for this item.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council approve the minutes of the Closed Session and Regular City Council meetings held on February 24, 2025.

Page 2 ends

SUBMITTED BY: NOTED AND APPROVED:

Gloria D. Harper Patrick Gallegos
Gloria D. Harper, City Clerk Patrick Gallegos, Interim City Manager ATTACHMENTS:

A. Minutes – Closed Session, February 24, 2025
B. Minutes – Regular Session, February 24, 2025
Seal Beach, California
February 24, 2025
The City Council met in Closed Session at 5:40 p.m. in the City Hall Conference Room.

ROLL CALL

Present: Mayor Landau
Council Members: Kalmick, Wong, Senecal, Steele

Absent: None
City Staff: Nicholas Ghirelli, City Attorney
Patrick Gallegos, Interim City Manager
Gloria D. Harper, City Clerk
Alexa Smittle, Director of Community Development
Iris Lee, Director of Public Works

ORAL COMMUNICATIONS
Mayor Landau opened oral communications. Speakers: Rosie Ritchie and Cole Montgomery. Mayor Landau closed oral communications.

CLOSED SESSION
A. PUBLIC EMPLOYEE PERFORMANCE EVALUATION
Government Code §54957(b)
Title: Interim City Manager
B. Conference with Legal Counsel
Existing Litigation Pursuant to Government Code Section 54956.9(d)(1) Beach House at the River, LLC v. City of Seal Beach
Orange County Superior Court Case No. 30-2023-01314997-CU-MC-CJC Mayor Landau recused herself from the meeting prior to the discussion of Item B.

ADJOURNMENT
Mayor Landau adjourned the Closed Session meeting at 6:55 p.m.

Gloria D. Harper, City Clerk
City of Seal Beach
Approved:

Lisa Landau, Mayor
Attested:

Gloria D. Harper, City Clerk
Seal Beach, California
February 24, 2025
The City Council met in Regular Session at 7:00 p.m. in the City Council Chambers.

Mayor Pro Tem Steele led the Pledge of Allegiance.

ROLL CALL

Present: Mayor Landau
Council Members: Kalmick, Wong, Senecal, Steele

Absent: None
City Staff: Nicholas Ghirelli, City Attorney
Patrick Gallegos, Interim City Manager
Michael Henderson, Police Chief
Barbara Arenado, Director of Finance/City Treasurer
Iris Lee, Director of Public Works
Joe Bailey, Marine Safety Chief
Gloria D. Harper, City Clerk
Nick Nicholas, Police Captain
Chris Hendrix, Police Lieutenant
Kevin Edwards, Information Technology Manager
Craig Covey, Orange County Fire Authority Division 1 Chief Tim Kelsey, Recreation Manager
Alayna Hoang, Finance Manager

PRESENTATIONS / RECOGNITIONS
• 50th Annual Americana Awards Presentation
• Parking Technology Upgrades Presentation
• Annual Comprehensive Financial Report (ACFR) Presentation

ORAL COMMUNICATIONS
Mayor Landau opened oral communications. Speakers: Chad Berlinghieri, Jim Lingle, Jacque and Ludo Wurfbain, Jon Janecek, Ken Seiff, Theresa Miller, and Kori DeLeon addressed the City Council. Mayor Landau closed oral communications.

City Clerk Harper announced that five (5) supplemental communications were received after posting the agenda; they were distributed to the City Council and made available to the public. Additionally, she announced that Item H had been pulled from tonight’s agenda and would be considered at a future meeting, date to be determined.

APPROVAL OF AGENDA & WAIVER OF FULL READING OF RESOLUTIONS AND

ORDINANCES
Mayor Pro Tem Steele moved, second by Council Member Wong to approve the agenda.

AYES: Kalmick, Wong, Landau, Senecal, Steele
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried

CITY ATTORNEY REPORT
City Attorney Ghirelli reported that the City Council met in Closed Session to discuss the two (2) items posted on the agenda. All five (5) Council Members were present, and no reportable action was taken. Mayor Landau recused herself from the meeting prior to the discussion of Item B.

Additionally, City Attorney Ghirelli noted that the City Council would have to approve a franchise agreement before the Haynes Generating Station Recycled Water Pipeline Project could move forward, and that agreement is yet to be considered.

CITY MANAGER REPORT
Interim City Manager Gallegos announced that Council Members Wong and Senecal were provided a tour of the city on Tuesday, February 11, 2025. He also announced his attendance at the Local Hazard Mitigation Plan Stakeholder meeting. Additionally, Interim City Manager Gallegos announced that the Seal Beach Police Department will be hosting a surviving gun violence presentation at the McGaugh Elementary School Auditorium at 5:30 p.m. on Tuesday, February 25, 2025. Lastly, Interim City Manager Gallegos announced that the Water and Sewer Rate Financial Study Session will be held on Monday, March 10, 2025, at 5:00 p.m. in the City Council Chambers.

COUNCIL COMMENTS
Council Member Wong reported his attendance at the California Environmental Quality Act (CEQA) workshop, the Shops at Rossmoor Business Development meeting via Zoom, the Local Hazard Mitigation Plan Stakeholder meeting, the League of California Cities Sober Living Homes meeting via Zoom, the Planning Commission meeting, and the Orange County Sanitation District (OCSan) Special Orientation meeting. Additionally, Council Member Wong announced that he was given a tour of the city and that he volunteered at Home Bank Los Angeles to assist with disaster recovery efforts for those affected by the recent wildfires.

Council Member Kalmick reported his attendance at the Local Hazard Mitigation Plan Stakeholder meeting, the League of California Cities Sober Living Homes meeting via Zoom, the Planning Commission meeting, and the Orange County Council of Governments (OC-COG) meeting via Zoom. Additionally, Council Member Kalmick reported that he met with the owner of the vacant lots near the Ocean Place Housing Development about a plan regarding future development.

Council Member Senecal reported her attendance at the Local Hazard Mitigation Plan Stakeholder meeting, the Environmental Quality Control Board meeting, the Planning Commission meeting, and a meet and greet with Lieutenant Commander Fox of the Los Alamitos Joint Forces Training Base. Additionally, Council Member Senecal announced that a vacancy exists on both the Environmental Quality Control Board (EQCB) and the Recreation and Parks Commission to represent District 4. She encouraged residents to reach out to her for more information.

Mayor Pro Tem Steele reported his attendance at the Orange County Mosquito and Vector Control meeting, the Orange County Older Adult Advisory Commission (OCOAAC) meeting, the Planning Commission, and the Local Hazard Mitigation Plan Stakeholder meeting. Additionally, Mayor Pro Tem Steele announced that Leisure World will be hosting a Naval Weapons Station Presentation on Friday, March 28, 2025.

Mayor Landau announced that she met with a developer regarding the vacant lots near the Ocean Place Housing Development. Additionally, she offered her condolences to the family of Seal Beach Lions Club President Mary Hollen.

COUNCIL ITEMS
There were no council items.

CONSENT CALENDAR
A. Approval of the City Council Minutes - That the City Council approve the minutes of the Closed Session and Regular City Council meetings held on February 10, 2025.

B. Demand on City Treasury (Fiscal Year 2025) - Ratification.

C. Monthly Investment Report (February 24, 2025) - Receive and file.

D. City of Seal Beach Annual Audit Reports for Fiscal Year Ending June 30, 2024 - That the City Council receive and file the following documents for the Fiscal Year ending June 30, 2024:

A. Audit Communication Letter
B. Report on Internal Control
C. Annual Comprehensive Financial Report
D. Appropriations Limit Final Report
E. Amendment 1 to the Professional Special Counsel Services Agreement with Telecom Law Firm, P.C. - That the City Council adopt Resolution 7617: 1. Approving Amendment 1 to the Professional Special Counsel Services Agreement with Telecom Law Firm, P.C. to approve an increase in compensation of $30,000 for professional legal and general telecommunications services for a revised total not-to-exceed amount of $70,000, and a 12-month extension to expire on June 30, 2026; and, 2. Directing the Interim City Manager to execute Amendment 1 on behalf of the City.

F. Approving the FY 2025-2026 West Orange County Water Board Budget - That the City Council adopt Resolution 7618 approving the FY 2025-2026 West Orange County Water Board budget of $1,683,800, of which the City’s proportionate agency contribution is $286,771.

G. Notice of Completion for the North Seal Beach Community Center, CIP BG2501 - That the City Council adopt Resolution 7619: 1. Accepting the North Seal Beach Community Center Project, by MDJ Management, LLC in the amount of $404,023.76; and, 2. Directing the City Clerk to file a “Notice of Completion” with the Orange County Clerk-Recorder within 15 days from the date of acceptance and to release retention 35 days after recordation of the Notice of Completion contingent upon no claims being filed on the Project.

H. Approving and Authorizing Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. for Water and Wastewater Financial Planning Services - That the City Council adopt Resolution 7620: 1.

Approving Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. dated June 12, 2023, as previously amended by Amendment 1 dated March 25, 2024, to provide additional Water and Wastewater Financial Planning Services; increase compensation for such additional services by $51,527 for a revised total contract not-to-exceed amount of $187,294; and extend the term to December 31, 2025; and,2. Authorizing and directing the Interim City Manager to execute Amendment 2 on behalf of the City; and, 3. Authorizing the Interim City Manager to approve unforeseen additional work requests, up to the total not-to-exceed amount of $10,000.

I. Parking Enforcement Automated License Plate Reader (ALPR) and Supporting Equipment Refresh - That the City Council adopt Resolution 7621: 1. Approving the expenditure of $214,479.37 for the reimplementation and refresh of the Seal Beach Parking ALPR system, CIP BG2401; and, 2. Authorizing the Interim City Manager to execute on behalf of the City all contracts and proposals, including any necessary extensions or amendments thereafter.

Council Member Kalmick moved, second by Council Member Senecal to approve the recommended actions on the consent calendar.

The vote below is for the Consent Calendar Items with the exception of Item H.

AYES: Kalmick, Wong, Senecal, Steele, Landau
NOES: None
ABSENT: None
ABSTAIN: None
Motion carried

ITEMS REMOVED FROM THE CONSENT CALENDAR
H. Approving and Authorizing Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. for Water and Wastewater Financial Planning Services - That the City Council adopt Resolution 7620: 1.

Item H was pulled from tonight’s agenda and will be considered at a future meeting, date to be determined.

PUBLIC HEARING
There were no public hearing items.

UNFINISHED/CONTINUED BUSINESS
There were no unfinished/continued business items.

NEW BUSINESS
There were no new business items.

ADJOURNMENT
Mayor Landau adjourned the City Council in memory of Volunteers in Police Services Ron Alsop Cardon and Laurel Mauk at 8:41 p.m. to Monday, March 10, 2025, at 5:30 p.m. to meet in Closed Session if deemed necessary.
__________________________
Gloria D. Harper, City Clerk
City of Seal Beach
Approved: ___________________________
Lisa Landau, Mayor
Attested: ____________________________
Gloria D. Harper, City Clerk

Agenda Item C

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Iris Lee, Director of Public Works
SUBJECT: Approving and Authorizing Amendment 2 to the
Professional Services Agreement with Raftelis Financial Consultants, Inc. for Water and Wastewater Financial
Planning Services
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7620:

1. Approving Amendment 2 to the Professional Services Agreement with Raftelis Financial Consultants, Inc. dated June 12, 2023, as previously amended by Amendment 1 dated March 25, 2024, to provide additional Water and Wastewater Financial Planning Services; increase compensation for such additional services by $51,527 for a revised total contract not-to-exceed amount of $187,294; and extend the term to December 31, 2025; and,

2. Authorizing and directing the Interim City Manager to execute Amendment 2 on behalf of the City; and,

3. Authorizing the Interim City Manager to approve unforeseen additional work requests, up to the total not-to-exceed amount of $10,000.

BACKGROUND AND ANALYSIS:

The City’s water and sewer utilities are funded by fees collected through adopted water and sewer service charges (Enterprise Funds). The rates that customers pay on their utility bills must fund the operating costs, capital improvements, and reserves. Water and sewer rates must be periodically reviewed to ensure rates are set to provide adequate revenue. These studies are performed in accordance with Proposition 218 requirements.

On February 22, 2021, City Council adopted Resolutions 7114 and 7115 adjusting the water and sewer rates, respectively. These resolutions led to the

Page 2 ends

implementation of five incremental annual rate adjustments, beginning in July 2021, with the final adjustment having occurred in January 2025.

In early 2023 an assessment of the current five-year financial plan was conducted, revealing the need for water and sewer rate adjustments. The assessment identified several key factors impacting the Enterprise Funds’ financial stability and long-term infrastructure needs:

1. Fluctuations in water sales due to erratic weather patterns;

2. Underestimated inflation factors in the original rate structure projections;

3. Increased water purchasing costs;

4. Increased operating and capital expenditures due to labor and material shortages and overall pricing increases;

5. Depletion of cash reserves due to capital spending originally slated to be funded through bond proceeds;

6. Deferred critical capital improvement needs on aging infrastructure.

In response to these findings, City Council adopted Resolution 7416 on June 12, 2023, awarding a Professional Services Agreement to Raftelis Financial Consultants, Inc. (Raftelis) to provide water and wastewater financial planning services in a not-to-exceed amount of $82,415, and authorizing the City Manager to approve additional work requests in the amount of $5,000.

The water and wastewater financial plan and proposed rate adjustment findings were presented to City Council on December 11, 2023. On the same night, City Council adopted Resolution 7472 setting a public hearing date on February 12, 2024, that was subsequently continued to February 26, 2024. At the close of the public hearing, the City Council concluded the pending majority protest proceedings and took no further action to adopt the rate adjustments. City Council directed staff to further examine the rates and re-notice the public pursuant to Proposition 218 at a later date.

Accordingly, City Council adopted Resolution 7500 on March 25, 2024, approving Amendment 1 to the Professional Services Agreement with Raftelis, authorizing the additional services, and increasing compensation by $48,352. As work resumed, it became apparent that a substantial reevaluation was needed to accurately account for updated expenditures and revenue losses, integrate utility account updates, incorporate potential external funding sources to mitigate rate impacts, develop various rate scenarios, and comply with relevant legislation (e.g., AB 755 and AB 2577). The process essentially constitutes the development of a new financial plan, incorporating enhanced outreach efforts aimed at re-engaging the public.

Accordingly, Raftelis submitted a proposal dated January 29, 2025, for the additional support work in the amount of $51,527. Additionally, staff recommends authorizing the Interim City Manager to approve additional work requests in a notto-exceed amount of $10,000.

Page 3 ends

ENVIRONMENTAL IMPACT:

This item is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the state CEQA Guidelines because it can be seen with certainty that approval of a professional services agreement amendment with Raftelis Financial Consultants, Inc. and will not have a significant effect on the environment.

LEGAL ANALYSIS:

The City Attorney has approved the agreement and resolution as to form.

FINANCIAL IMPACT:

Additional costs associated with Amendment 2 will be expensed from the Water and Sewer operation funds. Sufficient funding for this item is available in the adopted FY 2024-25 Budget.

Description Amount
Water O&M – 501-500-0900-51280 $ 25,763.50
Sewer O&M – 503-500-0925-51280 $ 25,763.50
Contingency – Water O&M – 501-500-0900-51280 $ 5,000.00 Contingency – Sewer O&M – 503-500-0925-51280 $ 5,000.00 Total $ 61,527.00
STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council adopt Resolution 7620:

2. Authorizing and directing the Interim City Manager to execute Amendment 2 on behalf of the City; and,

Page 4 ends

3. Authorizing the Interim City Manager to approve unforeseen additional work requests, up to the total not-to-exceed amount of $10,000.

SUBMITTED BY: NOTED AND APPROVED:

Iris Lee Patrick Gallegos
Iris Lee, Director of Public Works Patrick Gallegos, Interim City Manager Prepared by: Sean Sabo, Management Analyst
ATTACHMENTS:

A. Resolution 7620
B. Amendment 2 with Raftelis Financial Consultants, Inc.

C. Amendment 1 with Raftelis Financial Consultants, Inc.

D. Agreement with Raftelis Financial Consultants, Inc.

RESOLUTION 7620

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

APPROVING AN AUTHORIZING THE INTERIM CITY
MANAGER TO EXECUTE AMENDMENT 2 TO THE

PROFESSIONAL SERVICES AGREEMENT WITH
RAFTELIS FINANCIAL CONSULTANTS, INC. TO PROVIDE

WATER AND WASTEWATER FINANCIAL PLANNING

SERVICES
WHEREAS, the City owns and operates a water system and wastewater system; and, WHEREAS, the water and wastewater systems are funded by utility rate-generated revenues; and,
WHEREAS, the water and wastewater utility rates must be periodically reviewed to ensure they are properly set to fund operations and capital needs; and, WHEREAS, climate conditions, material and labor shortages, and critical infrastructure needs have significantly impacted revenue and expenditures; and, WHEREAS, on June 12, 2023, the City Council adopted Resolution 7416 approving a Professional Services Agreement with Raftelis Financial Consultants, Inc. (Raftelis) to provide water and wastewater financial planning services in the amount of $82,415, and authorizing the City Manager to approve work payment requests in the amount of $5,000; and,
WHEREAS, on March 25, 2024, the City Council adopted Resolution 7500 approving Amendment 1 to the Professional Services Agreement with Raftelis to provide additional support services; increasing Raftelis’s compensation for such services by $48,352, for a revised not-to-exceed amount of $135,767; and,
WHEREAS, the City desires to amend the Agreement with Raftelis to provide additional support services; increase Raftelis’s compensation for such services by $51,527, for a revised not-to-exceed amount of $187,294; authorize the Interim City Manager to approve any unforeseen additional work requests, up to a not-to-exceed amount of $10,000; and extend the term to December 31, 2025.

NOW, THEREFORE, THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:

Section 1. The City Council hereby approves Amendment 2 to the Agreement dated June 12, 2023, as previously amended by Amendment 1 dated March 25, 2024 between the City of Seal Beach and Raftelis Financial Consultants, Inc. (i) to authorize Raftelis to provide additional water and wastewater financial planning services; (ii) to increase Raftelis’s compensation by $51,527 for the additional services, for a revised total contract not-to-exceed amount of $187,294; and (iii) to extend the Agreement term to December 31, 2025.

Section 2. The City Council hereby authorizes and directs the Interim City Manager to execute Amendment 2.

Section 3. The City Council hereby authorizes the Interim City Manager to approve unforeseen additional work requests in connection with the Agreement in the cumulative not-to-exceed amount of $10,000.

PASSED, APPROVED, and ADOPTED by the Seal Beach City Council at a regular meeting held on the 10th day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE }
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7620 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 10th day of March 2025.

Gloria D. Harper, City Clerk

RAFTELIS 1
January 29, 2025
Mrs. Iris Lee, Public Works Director
City of Seal Beach
211 Eighth Street, Seal Beach, CA 90740
Subject: Water and Wastewater Financial Plan Amendment #2 Dear Mrs. Lee,
This proposal is to complete the Water and Sewer Rate Study.

We previously submitted a contract amendment request to complete the study and raise the contract to the amount shown in line 1 in the table below. We used a portion of this amendment to update the study with additional CIP scenarios. After this (prior) update, the study was postponed. Therefore, funds remain as of our December billing cycle, as shown in line 3 of the below table. Line 2 includes all time to be billed up until the end of December. Line 4 is our estimate to complete the study and line 5 is the net increase to the contract.

The estimated scope to complete the study is discussed below. Since time has passed, we will:
1) Update the O&M expenses with FY 2025 expenses,
2) Update CIP expenses to reflect the latest capital project costs, 3) Update reserve balances,
4) Update customer water use,
5) Update the model with the loan from OCWD.

We will meet with staff to review the financial plan, develop scenarios and present results to City Council. Gina DePinto will lead our outreach efforts to:
1) Update the City Website,
2) Develop social media calendar and content,
3) Develop CIP Project Fact Sheets,
4) Develop New Content, Infographics and Presentations, 5) Public Notice Creation,
6) Direct Two Community Engagement Events.

A more detailed scope and fee is provided below. We enjoy working with you and your staff and believe it will lead to financially viable utilities.

RAFTELIS 2
Sincerely,
Steve Gagnon, PE (AZ)
Vice President
P: 714 351 2013; E: [email protected]
RAFTELIS 3
2025 Seal Beach Water and Sewer Rate Study Completion
Task 1. Update the Financial Plan and Rates
Raftelis will update the financial plan model this will include:
1) Analyze and update the model with FY 2024 water use, 2) Update the model with FY 2025 O&M expenses,
3) Update current reserve balances,
4) Input revised CIP expenses based on the latest capital project estimates, 5) Review debt assumptions including modeling the new OCWD loan, 6) Work with staff to create and analyze financial plan scenarios.

With the above revised data, we will create scenarios by selecting revenue adjustments and analyzing debt coverage ratios and reserve balances. If directed by the City, we can discuss fixed charge options for Leisure World residents. We will prepare a report detailing the financial plan assumptions, revenue adjustments and resulting rates. We will also prepare PowerPoint presentations and present results at up to two City Council meetings.

MEETINGS: Meetings are in Task 2
DELIVERABLES: Financial Plan model in Microsoft Excel
Task 2. Review Financial Plan Results with City Staff
Raftelis will update the financial plan model with the latest O&M expenses, water use, CIP expenses and reserve balances. We will summarize the assumptions in a PowerPoint presentation.

MEETINGS: Two web meetings with City Staff
Task 3. As Needed Support for Rate Study Questions
The City received several inquiries and questions during the past two rate studies. Raftelis can assist with answering questions as needed.

MEETINGS: Web meetings if needed
DELIVERABLES: Written responses via email
Task 4. Two City Council Presentations
Raftelis will present study results and answer questions at two City Council meetings. We anticipate the first meeting will be to present results and solicit Council feedback and prepare them to provide direction at the second council meeting.

MEETINGS: Two in-person City Council Meetings
DELIVERABLES: Presentations in PowerPoint
RAFTELIS 4
Task 5. Update the Prior Report and Include Text for AB 755 We will update the prior report with the new financial plan and rates and include text to satisfy AB 755 which seeks to quantify the cost to sever the highest water users (top 10% of water users).

MEETINGS: If required
DELIVERABLES: Rate Study report in Microsoft Word
Task 6. AB 2257 Support -Respond to Objections, Prepare Presentation to Summarize Objections and Responses and Present to City Council
Raftelis will respond to AB2257 objections during the response period. The City will respond directly to objectors if it deems it needs to respond. We assume one round of objections and responses. Raftelis will also summarize the objections and responses, prepare a presentation and present the summary to City Council. We have assumed this City Council meeting will occur separate from the public hearing and that the objection process will end at this meeting. The Council will then advise if clarifications are needed, whether to leave rates as is, or conclude the objection process.

The responses to objections
MEETINGS: Up to three web meetings to discuss responses DELIVERABLES: PowerPoint presentation with summary of objections and responses Task 7. Website Updates and Maintenance
Raftelis will update and maintain the rate study website, which includes regularly reviewing content, design, and functionality to ensure it remains accurate, engaging, and user-friendly. Updates and announcements will be added as the rate study progresses. Collaboration with City staff will ensure the website continues to align with project goals and effectively serves its audience.

MEETINGS: One virtual meeting; may be combined with other tasks DELIVERABLES: Updated microsite and ongoing updates and maintenance Task 8. Develop Social Media Calendar and Content
Raftelis will develop a social media plan to inform and engage the community about the need to adjust water and sewer rates. The task includes developing posts tailored to various platforms that explain complex topics like rate structures, funding needs, and infrastructure improvements in a clear and relatable way. The plan will include a calendar to guide City staff as they plan and schedule posts strategically to align with key milestones, public meetings, and decision points in the study. Content will include using existing videos and FAQs and development of new engaging visuals and infographics to enhance understanding and draw interest. The content should encourage community feedback, address common questions, and highlight the benefits of the study to ensure transparency and build trust with residents.

Beyond the rate study, we encourage the City to employ an ongoing social media campaign to feature projects, initiatives, services, and staff on the job to humanize City government and feature Public Works employees as they strive to ensure high quality, uninterrupted water and sewer services.

RAFTELIS 5
MEETINGS: One virtual meeting to review strategy, content, and implementation DELIVERABLES: Social media calendar and draft content
Task 9. Develop CIP Project Fact Sheet(s)
Raftelis will develop a fact sheet highlighting key capital improvement projects to inform customers and consumers about critical infrastructure initiatives. The fact sheet will outline essential details such as project necessity, community benefits, and anticipated budgets and timelines. This tool is vital for building public understanding and support, especially for projects tied to funding decisions, rate adjustments, and significant community impact. By presenting information in a clear, visually engaging format, the fact sheet fosters transparency and ensures consistent messaging across various communication channels, aiding in effective stakeholder engagement and decision-making. The fact sheet(s) will be designed for digital posting online and for printed handouts.

MEETINGS: One virtual meeting to plan content; City staff to provide content and images DELIVERABLES: A digital and print-ready fact sheet
Task 10. Develop New Content, Infographics, and Presentations Raftelis will develop materials and content to build awareness, engage residents in the process, and address misinformation that can be included on the website and in materials, presentations, social media, and in the Proposition 218 Notice. With input from the City, materials may include two press releases, an Op-Ed, direct mail piece, newsletter content for the City Manager and Council, and a video script to recap the 2023-24 rate study and announce the new process and schedule. Without using a professional videographer/producer, Raftelis will guide City staff to record the brief video update using a smart phone.

MEETINGS: One virtual meeting to review content and plan implementation DELIVERABLES: Two draft press releases, an Op-Ed, direct mail piece, newsletter content for the City Manager and Council, and a video script for City staff to recap the 2023-24 rate study and announce the new process and schedule
Task 11. Proposition 218 Notice Development
Raftelis will develop a redesigned Proposition Hearing to clearly stand apart from the Notice issued in December 2023. The content will include all statutorily required elements, along with strategic communications messages to ensure it properly communicates the need and justification for rate increases and the public is given tools to understand the impacts to their individual bills. Beyond satisfying legal requirements, the goal of the Notice will be to describe the ongoing public process that went into the recommendations and make the case for why adoption is critical and invite customers and residents to participate in the community engagement events.
-to-read design
that will encourage customers and the public to read the information and have a broader understanding of the issues. Our pricing includes the development of a print-ready PDF. The City will assume responsibility RAFTELIS 6
for the mailing list, printing, and postage. As envisioned, the Notice will be a folded self-mailer, which will We budgeted time to include the process for AB2257 objections in the Prop 218 notice.

MEETINGS: Two virtual meetings to discuss and review content DELIVERABLES: Draft and Final Prop 218 Public Notice as printer ready files and a digital PDF for the website
Task 12. Community Engagement Events (2)
We recommend holding two community engagement events (workshop, meeting, or open house) at neutral locations, such as a library, school, or church instead of in Council Chambers to set a tone of repeat of last year and that the City is going
out to residents instead of asking them to come to you. Additionally, we recommend offering one event on a weeknight and another on a Saturday to accommodate different schedules.

Subject matter experts would present or be available to address topics like rates 101, specific proposed rates, utility operations and infrastructure, bonding and debt finance, state and federal grants and loans, water/wastewater legislation and the regulatory environment, and public and fire safety. Depending on the format and logistics, Raftelis would facilitate Q&A and potentially collect question/comment cards upfront to address questions before breaking into one-on-one conversations, such as open house style.

MEETINGS: Up to three virtual planning meetings, and two in-person outreach events DELIVERABLES: Logistics support, facilitation, FAQs, outreach event materials to include up to six new display posters and comment or survey cards
Proposed Schedule
Action/Task Date (2025)
Update Website and Refresh the Webinar Video January 17 Publicly Announce Restart of Rate Study
(website, social media, press release) January 20
Draft Prop 218 Content DUE February 5
City Council Workshop February 10
City Council Authorization of Prop 218 Process February 24 RAFTELIS 7
City and Legal Review/Approval of Prop 218 Content
DUE February 28
Prop 218 Design March 3-11
City Legal Review of Prop 218 Notice DUE March 18
Prop 218: Finalize Notice, Send to Printer March 19-20
Postmark Prop 218 Notice
(begin 45-day period)
March 28
(latest date to postmark)
Community Engagement Event #1 April 23 or 30
(Wednesday)
Community Event #2 April 26 or May 3
(Saturday)
Public Hearing May 12
Effective Date July 1, 2025
RAFTELIS 8
Proposed Fee
Raftelis proposes to complete the scope of work outlined above on a time-and-materials basis for the fee shown below.

The following table shows our proposed fee based on our hourly rate and estimated hours.

PM GD SC MS CS Total

1. Update the Financial Plan & Rates with Revised
Water Use, O&M Expenses and CIP 14 18 32 $9,080

2. Webmeetings to Present Financial Plan Results
and Finalize Rates with City Staff 2 6 6 12 $3,540

3. As Needed Support for Rate Study Questions
and Analysis 6 4 10 $3,130

4. Two City Council Presentations 2 12 4 16 $5,581

5. Update the Prior Report Including AB 755 - The
Cost to Serve High Water Users 14 32 46 $11,950

6. Summarize and Respond to Objections, Present
to City Council for AB2257 at a Separate Meeting 22 3 6 31 $10,615

7. Website Updates and Maintenance 1 6 14 20 $4,350

8. Develop Social Media Calendar and Content 1 1 1 4 8 13 $3,316

9. Develop CIP Project Fact Sheet(s) 1 6 10 16 $3,880

10. Develop New Content, Inforgraphics, and
Presentations 1 12 12 $3,660

11. Propostion 218 Notice Development, Including
Text for AB2257 2 2 8 4 14 28 $6,550

12. Facilitate Community Engagement Events
(incl. Public Hearing) 3 2 12 16 28 $9,641
11 5 89 55 74 18 28 264
$375 $295 $195 $195 $170
$33,375 $16,225 $14,430 $3,510 $4,760 $72,300
$72,300
$2,994
$75,294
Remaining Funds $23,767
Contract Amendment $51,527
SG - Project Manager, Steve Gagnon, PE (AZ)
GD - Communications Staff, Gina DePinto, APR
SC - Staff Consultants
MS - Makenna Sturgeon
CS - Creative Services
Tasks
Virtual
Meetings
Number of
In-Person
Meetings
Total Fees &
Expenses
Total Fees
Total Expenses
Total Fees & Expenses

PROFESSIONAL SERVICES AGREEMENT
for
Water and Wastewater Financial Planning Services
between
City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
N
Raftelis Financial Consultants, Inc.
227 West Trade Street, Suite 1400
Charlotte, NC 28202
704) 373- 1199
This Professional Service Agreement (" the Agreement") is made as of June 12, 2023 the " Effective Date"), by and between Raftelis Financial Consultants, Inc.

Consultant'), a North Carolina corporation, and the City of Seal Beach (" City"), a California charter city, ( collectively, " the Parties").

RECITALS
A. City desires certain professional water and wastewater financial planning services.

B. Pursuant to the authority provided by its City Charter and Seal Beach Municipal Code § 3.20.025( C), City desires to retain Consultant as an independent contractor to provide professional water and wastewater financial planning services.

C. Consultant represents that the principal members of its firm are qualified professionals and are fully qualified to perform the professional services contemplated by this Agreement by virtue of its experience, and the training, education and expertise of its principals and employees.

D. City desires to retain Consultant as an independent contractor and Consultant desires to serve City to perform those services in accordance with the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the Parties' performance of the promises, covenants, and conditions stated herein, the Parties hereto agree as follows.

AGREEMENT

1. 0 Scope of Services

1. 1. Consultant shall provide those services ( collectively " Services") set forth in the Scope of Services attached hereto as Exhibit A and incorporated herein by this reference. To the extent that there is any conflict between Exhibit A and this Agreement, this Agreement shall control.

1. 2. Consultant shall perform all Services under this Agreement in accordance with the standard of care generally exercised by like professionals under similar circumstances and in a manner reasonably satisfactory to City at the time and place the Services are performed.

1. 3. In performing this Agreement, Consultant shall comply with all applicable provisions of federal, state, and local law.

1. 4. As a material inducement to City to enter into this Agreement, Consultant hereby represents that it has the experience necessary to undertake the Services to be provided. In light of such status and experience,. The City relies upon the skill of Consultant, and Consultant' s staff, if any, to do and perform the Services in a skillful, competent, and professional manner, and Consultant and Consultant's staff, shall perform the Services in such manner.

Consultant shall, at all times, meet or exceed any and all applicable professional 2of19
standards of care. The acceptance of Consultant' s work by the City shall not operate as a release of Consultant from such standard of care and workmanship.

1. 5. Consultant will not be compensated for any work performed not specified in the Scope of Services unless the City authorizes such work in advance and in writing. The City Manager may authorize extra work to fund unforeseen conditions up to the amount approved at the time of award by the City Council. Payment for additional work in excess of this amount requires prior City Council authorization.

2. 0 Term

2. 1. The term of this Agreement shall commence on June 12, 2023, and shall remain in full force and effect until June 30, 2024, unless sooner terminated as provided in Section 5. 0 of this Agreement.

3. 0 Consultant' s Compensation

3. 1. City will pay Consultant in accordance with the hourly rates shown on the fee schedule set forth in Exhibit A for the Services but in no event will the City pay more than the total not -to -exceed amount of $ 82, 415. 00 ( Eight Two Thousand Four Hundred Fifteen dollars and 00/ 100) for the Term.

4. 0 Method of Payment

4. 1. Consultant shall submit to City monthly invoices for all Services rendered pursuant to this Agreement. Such invoices shall be submitted within 15 days of the end of the month during which the Services were rendered and shall describe in detail the Services rendered during the period, the days worked, number of hours worked, the hourly rates charged, and the Services performed for each day in the period. City will pay Consultant within 30 days of receiving Consultant' s invoice. City will not withhold any applicable federal or state payroll and other required taxes, or other authorized deductions from payments made to Consultant.

4.2. Upon 24- hour notice from City, Consultant shall allow City or City's agents or representatives to inspect at Consultant' s offices during reasonable business hours all records, invoices, time cards, cost control sheets and other records maintained by Consultant in connection with this Agreement. City's rights under this Section 4. 2 shall survive for three ( 3) years following the termination of this Agreement. '
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5. 0 Termination

5. 1. This Agreement may be terminated by City, without cause, or by Consultant based on reasonable cause, upon giving the other party written notice thereof not less than 30 days prior to the date of termination.

5. 2. This Agreement may be terminated by City upon 10 days' notice to Consultant if Consultant fails to provide satisfactory evidence of renewal or replacement of comprehensive general liability insurance as required by this Agreement at least 20 days before the expiration date of the previous policy.

6. 0 Party Representatives

6. 1. The City Manager is the City's representative for purposes of this Agreement.

6. 2. Steve Gagnon is the Consultant' s primary representative for purposes of this Agreement. Steve Gagnon shall be responsible during the term of this Agreement for directing all activities of Consultant and devoting sufficient time to personally supervise the Services hereunder. Consultant may not change its representative without the prior written approval of City, which approval shall not be unreasonably withheld.

7. 0 Notices

7. 1. All notices permitted or required under this Agreement shall be deemed made when personally delivered or when mailed 48 hours after deposit in the United States Mail, first class postage prepaid and addressed to the party at the following addresses:

To City: City of Seal Beach
211 - 8th Street
Seal Beach, California 90740
Attn: City Manager
To Consultant: Raftelis Financial Consultants, Inc.
227 West Trade Street
Charlotte, NC 28202
Attn: Steve Gagnon

7.2. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

8. 0 Permits and Licenses
Consultant and all of Consultant' s employees and other personnel shall obtain and maintain during the Agreement term all necessary licenses, permits and 4of19
certificates required by law for the provision of the Services under this Agreement, including a business license as required by the Seal Beach Municipal Code.

9. 0 Independent Contractor

9. 1. Consultant is an independent contractor and not an employee of the City. All work or other Services provided pursuant to this Agreement shall be performed by Consultant or by Consultant' s employees or other personnel under Consultant' s supervision. Consultant will determine the means, methods, and details by which Consultant' s employees and other personnel will perform the Services. Consultant shall be solely responsible for the satisfactory work performance of all personnel engaged in performing the Services and compliance with the customary professional standards.

9. 2. All of Consultant' s employees and other personnel performing any of the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant' s exclusive direction and control. Consultant and Consultant' s personnel shall not supervise any of City' s employees; and City' s employees shall not supervise Consultant' s personnel. Consultant' s personnel shall not wear or display any City uniform, badge, identification number, or other information identifying such individual as an employee of City; and Consultant' s personnel shall not use any City e- mail address or City telephone number in the performance of any of the Services under this Agreement. Consultant shall acquire and maintain at its sole cost and expense such vehicles, equipment and supplies as Consultant' s personnel require to perform any of the Services required by this Agreement. Consultant shall perform all Services off of City premises at locations of Consultant' s choice, except ( 1) as otherwise required for the performance of Services on City real property, vehicles or equipment; ( 2) as otherwise may from time to time be necessary in order for Consultant' s personnel to receive projects from City, review plans on file at City, pick up or deliver any work product related to Consultant' s performance of any Services under this Agreement, or ( 3) as may be necessary to inspect or visit City locations and/ or private property to perform such Services. City may make a computer available to Consultant from time to time for Consultant' s personnel to obtain information about or to check on the status of projects pertaining to the Services under this Agreement.

9. 3. Consultant shall be responsible for and pay all wages, salaries, benefits and other amounts due to Consultant' s personnel in connection with their performance of any Services under this Agreement and as required by law.

Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: Social Security taxes, other retirement or pension benefits, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance. Notwithstanding any other agency, State, or federal policy, rule, regulation, statute or ordinance to the contrary, Consultant and any of its officers, employees, agents, and 5of19
subcontractors providing any of the Services under this Agreement shall not become entitled to, and hereby waive any claims to, any wages, salaries, compensation, benefit or any incident of employment by City, including but not limited to, eligibility to enroll in, or reinstate to membership in, the California Public Employees Retirement System (" PERS") as an employee of City, and entitlement to any contribution to be paid by City for employer contributions or employee contributions for PERS benefits.

9.4. Consultant shall indemnify and hold harmless City and its elected and appointed officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from liability, damages, claims, costs and expenses to the extent caused by Consultant' s personnel practices. or to the extent arising from, caused by or relating to the violation by Consultant of any of the provisions of this Section 9. 0.

In addition to all other remedies available under law, City shall have the right to offset against the amount of any fees due to Consultant under this Agreement any amount due to City from Consultant as a result of Consultant' s failure to promptly pay to City any reimbursement or indemnification arising under this Section. This duty of indemnification is in addition to Consultant' s duty to defend, indemnify and hold harmless as set forth in any other provision of this Agreement. .

10. 0 PERS Compliance and Indemnification

10. 1. General Requirements. The Parties acknowledge that City is a local agency member of PERS, and as such has certain pension reporting and contribution obligations to PERS on behalf of qualifying employees. Consultant agrees that, in providing its employees and any other personnel to City to perform any work or other Services under this Agreement, Consultant shall assure compliance with the Public Employees' Retirement Law (" PERL"), commencing at Government Code § 20000, as amended by the Public Employees' Pension Reform Act of 2013 (" PEPRA" ),. and the regulations of PERS. Without limitation to the foregoing, Consultant shall assure compliance with regard to personnel who have active or inactive membership in PERS and to those who are retired annuitants and in performing this Agreement shall not assign or utilize any of its personnel in a manner that will cause City to be in violation of the PERL, PEPRA or any other applicable retirement laws and regulations.

10. 2. Indemnification. Consultant shall defend indemnify and hold harmless City, and its City and its elected and appointed officials, officers, employees, servants, designated volunteers, and agents serving as independent contractors in the role of City officials, from liability, damages, claims, costs and expenses of any nature to the extent arising from, caused by, or relating to Consultant' s violation of any provisions of this Section 10. 0. This duty of indemnification , is in addition to Consultant' s duty to defend, indemnify and hold 6of19
harmless as set forth in any other provision of this Agreement. Consultant's indemnification and obligations under this Section shall survive the expiration or termination of this Agreement.

11. 0 Confidentiality

11. 1. Consultant covenants that all data, reports, documents, surveys, studies, drawings, plans, maps, models, photographs, images, video files, media, discussion, or other information ( collectively " Data & Documents") developed or received by Consultant or provided for performance of this Agreement are deemed confidential and shall not be disclosed by Consultant without prior written authorization by City. City shall grant such authorization if applicable law requires disclosure. Consultant, its officers, employees, agents, or subcontractors shall not without written authorization from the City Manager or unless requested in writing by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the Services performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court order shall not be considered " voluntary," provided Consultant gives City notice of such court order or subpoena.

11. 2. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed thereunder or with respect to any project or property located within the City. City may, but has no obligation to, represent Consultant or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does not imply or mean the right by City to control, direct or rewrite the response.

11. 3. Consultant' s covenants under this Section shall survive the termination or expiration of this Agreement.

12. 0 Ownership of Documents and Work Product

12. 1. All Data & Documents shall be and remain the property of City without restriction or limitation upon its use, duplication or dissemination by City.

All Data & Documents shall be considered " works made for hire," and all Data & Documents and any and all intellectual property rights arising from their creation, including, but not limited to, all copyrights and other proprietary rights, shall be and remain the property of City without restriction or limitation upon their use, duplication or dissemination by City. Consultant shall not obtain or attempt to obtain copyright protection as to any Data & Documents. 7of19

12. 2. Consultant hereby assigns to City all ownership and any and all intellectual property rights to the Data & Documents that are not otherwise vested in City pursuant to the paragraph directly above this one.

12. 3. Consultant warrants and represents that it has secured all necessary licenses, consents or approvals to use any instrumentality, thing or component as to which any intellectual property right exists, including computer software, used in the rendering of the Services and the production of all Written Products produced under this Agreement, and that City has full legal title to and the right to reproduce the Data & Documents. Consultant shall defend, indemnify and hold City, and its elected and appointed officials, officers, employees, servants, attorneys, designated volunteers, and agents serving as independent contractors in the role of City officials, harmless from any loss, claim or liability in any way related to a claim that City's use of any of the Data & Documents is violating federal, state or local laws, or any contractual provisions, or any laws relating to trade names, licenses, franchises, copyrights, patents or other means of protecting intellectual property rights and/or interests in products or inventions.

Consultant shall bear all costs arising from the use of patented, copyrighted, trade secret or trademarked documents, materials, equipment, devices or processes in connection with its provision of the Services and Data & Documents produced under this Agreement. In the event the use of any of the Written Products or other deliverables hereunder by City is held to constitute an infringement and the use of any of the same is enjoined, Consultant, at its expense, shall: ( 1) secure for City the right to continue using the Data & Documents and other deliverables by suspension of any injunction, or by procuring a license or licenses for City; or ( 2) modify the Data & Documents and other deliverables so that they become non -infringing while remaining in compliance with the requirements of this Agreement. These covenants shall survive the expiration and/or termination of this Agreement.

12.4. Upon expiration or termination of the Agreement, Consultant shall deliver to City all Data & Documents and other deliverables related to any Services performed pursuant to this Agreement without additional cost or expense to City. If Consultant prepares a document on a computer, Consultant shall provide City with said document both in a printed format and in an electronic format that is acceptable to City.

13. 0 Subcontractors
No portion of this Agreement shall be subcontracted without the prior written approval of the City. Consultant is fully responsible to City for the performance of any and all subcontractors.

14. 0 Prohibition Against Assignment or Delegation
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Consultant shall not assign any of its rights or delegate any of its duties under this Agreement, either in whole or in part, without City' s prior written consent. Any purported assignment or delegation in violation of this Section shall be void and without effect, and shall entitle City to terminate this Agreement. As used in this Section, " assignment' and " delegation" means any sale, gift, pledge, hypothecation, encumbrance or other transfer of all or any portion of the rights, obligations, or liabilities in or arising from this Agreement to any person or entity, whether by operation of law or otherwise, and regardless of the legal form of the transaction in which the attempted transfer occurs.

15. 0 Inspection and Audit of Records
Consultant shall maintain complete and accurate records with respect to all Services and other matters covered under this Agreement, including but expressly not limited to, all Services performed, salaries, wages, invoices, time cards, cost control sheets, costs, expenses, receipts and other records with respect to this Agreement. Consultant shall maintain adequate records on the Services provided in sufficient detail to permit an evaluation of all Services in connection therewith. All such records shall be clearly identified and readily accessible. At all times during regular business hours, Consultant shall provide City with access to such records without charge, and the right to examine and audit the same and to make copies and transcripts as City deems necessary, and shall allow inspection of all program data, information, documents, proceedings and activities and all other matters related to the performance of the Services under this Agreement. Consultant shall retain all financial and program service records and all other records related to the Services and performance of this Agreement for at least three ( 3) years after expiration, termination or final payment under this Agreement, whichever occurs later.

City' s rights under this Section 15. 0 shall survive for three ( 3) years after expiration, termination or final payment under this Agreement, whichever occurs later.

16. 0 Safety Requirements
All work performed under this Agreement shall be performed in such a manner as to provide safety to the public and to meet or exceed the safety standards outlined by CAL OSHA and other applicable state and federal laws. City may issue restraint or cease and desist orders to Consultant when unsafe or harmful acts are observed or reported relative to the performance of the Services.

Consultant shall maintain the work sites free of hazards to persons and property resulting from its operations. Consultant shall immediately report to the City any hazardous condition noted by Contractor.
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17. 0 Insurance

17. 1. General Requirements. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that Consultant has secured all insurance required under this Section.

17. 2. Minimum Scope and Limits of Insurance. Consultant shall, at its sole cost and expense, procure, maintain and keep in full force and effect for the duration of the Agreement, insurance against claims for injuries to persons or damages to property that may arise from or in connection with the performance of this Agreement, as follows:

17. 2. 1. Commercial General Liability Insurance: Consultant shall maintain limits no less than $ 2, 000,000 per occurrence for bodily injury, personal injury and property damage; and if Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to this Agreement/ location or the general aggregate limit shall be twice the required occurrence limit: Coverage shall be at least as broad as the latest version of Insurance Services Office Commercial General Liability coverage ( occurrence form CG 0001). If Consultant is a limited liability company, the commercial general liability coverage shall be amended so that Consultant and its managers, affiliates, employees, agents and other persons necessary or incidental to its operation are insureds;

17. 2. 2. Automobile Liability Insurance: Consultant shall maintain limits no less than $ 1, 000, 000 per accident for bodily injury and property damage. Coverage shall be at least as broad as Automobile Liability: Insurance Services Office Business Auto Coverage form number CA 0001, code 1 ( any auto).

17.2. 3. Workers' Compensation Insurance in the amount required by law; and Employer' s Liability: $ 1, 000,000 per accident and in the aggregate for bodily injury or disease;

17. 2. 4. Professional Liability ( or Errors and Omissions) Liability, with minimum limits of $ 1, 000,000 per claim/ aggregate. If a " claims made" policy is provided, then the policy shall be endorsed to provide an extended reporting period of not less than three years.

17. 3. Acceptability of Insurers. The Insurance policies required under this Section shall be placed with insurers with a current A.M. Best's rating no less than A:VIII, licensed to do business in California, and satisfactory to the City. 10 of 19

17. 4. Additional Insured.

17. 4. 1. For general liability insurance, City, its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents acting as independent contractors in the role of City officials shall be covered as additional insureds with respect to the services or operations performed by or on behalf of the Consultant, including materials, parts or equipment furnished in connection with such work.

17.4.2. For automobile liability, City, its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents serving as independent contractors in the role of City officials, shall be covered as additional insureds with respect to the ownership, operation, maintenance, use, loading or unloading of any auto owned, leased, hired or borrowed by the Consultant or for which the Consultant is responsible.

17.4.3. These additional insured provisions shall also apply to any excess/ umbrella liability policies.

17. 5. Cancellations or Modifications to Coverage. The insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms supplied or approved by City to state: ( 1) coverage shall not be suspended, voided, reduced or canceled except after 30 days prior written notice by certified mail, return receipt requested, has been given to City; 2) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to City, its elected and appointed officials, officers, employees, agents, designated volunteers, and those City agents serving as independent contractors in the role of City officials;
f

17. 6. Primary and Non -Contributing. Coverage shall be primary insurance as respects the City, its elected and appointed officials, officers, employees, agents, designated volunteers designated volunteers and agents serving as independent contractors in the role of City officials, or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled underlying coverage and that any insurance or self-insurance maintained by the City, its elected and appointed officials, officers, employees, agents. designated volunteers designated volunteers and agents serving as independent contractors in the role of City officials, shall be excess of the Consultant' s insurance and shall not be called upon to contribute with it;

17. 7. Separation of Insureds. All insurance required by this Section shall contain standard separation of insureds provisions and shall not contain any special limitations on the scope of protection afforded to City, its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents serving as independent contractors in the role of City officials. 11 of 19

17. 8. Deductibles and Self -Insured Retentions. Any deductibles or selfinsured retentions shall be declared to and approved by City. Consultant guarantees that, at the option of City, either: ( 1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City, its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents serving as independent contractors in the role of City officials; or ( 2) Consultant shall procure a bond guaranteeing payment of losses and related investigation costs, claims and administrative and defense expenses.

17. 9. Waiver of Subrogation. Each insurance policy required by this Agreement shall expressly waive the insurer's right of subrogation against City and its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents serving as independent contractors in the role of City officials. Consultant hereby waives all rights of subrogation against City.

17. 10. City Remedy for Noncompliance. If Consultant does not maintain the policies of insurance required under this Section in full force and effect during the term of this Agreement, or in the event any of Consultant' s policies do not comply with the requirements under this Section, City may either immediately terminate this Agreement or, if insurance is available at a reasonable cost, City may, but has no duty to, take out the necessary insurance and pay, at Consultant' s expense, the premium thereon. Consultant shall promptly reimburse City for any premium paid by City or City may withhold amounts sufficient to pay the premiums from payments due to Consultant.

17. 11. Evidence of Insurance. Prior to the performance of Services under this Agreement, Consultant shall furnish City with original certificates of insurance and all original endorsements evidencing and effecting the coverages required under this Section on forms satisfactory to and approved by City. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf, and shall be on forms provided by City if requested. Consultant may provide complete, certified copies of all required insurance policies to City. Consultant shall maintain current endorsements on file with City' s Risk Manager. All certificates and endorsements shall be received and approved by the City before work commences. City reserves the right to require complete, certified copies of all required insurance policies, at any time. Consultant shall also provide proof to City that insurance policies expiring during the term of this Agreement have been renewed or replaced with other policies providing at least the same coverage. Consultant shall furnish such proof at least two weeks prior to the expiration of the coverages.

17. 12. Indemnity Requirements Not Limiting. Procurement of insurance by Consultant shall not be construed as a limitation of Consultant' s liability or as full performance of Consultant's duty to indemnify City under Section 18. 0. 12 of 19

17. 13. Broader Coverage/ Higher Limits. If Consultant maintains broader coverage and/ or higher limits than the minimums required above, City requires and shall be entitled to the broader coverage and/ or the higher limits maintained by Consultant. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to City.

17. 14. Subcontractor Insurance Requirements. Consultant shall require each of its subcontractors that perform Services under this Agreement to maintain; insurance coverage that meets all of the requirements of this Section.

18. 0
Indemnification, Hold Harmless, and Duty to Defend

18. 1. Indemnities.

18. 1. 1. To the fullest extent permitted by law, Consultant shall, at its sole cost and expense, protect, defend, hold harmless and indemnify City and its elected and appointed officials, officers, attorneys, agents, employees, designated volunteers, successors, assigns and those City agents serving as independent contractors in the role of City officials ( collectively " Indemnitees" in this Section 18. 0), from and against any and all damages, costs, expenses, liabilities, claims, demands, causes of action, proceedings, judgments, penalties, bid protests, stop notices, liens and losses of any nature whatsoever, including but not limited to fees of accountants, attorneys and other professionals, and all costs associated therewith, and the payment of all consequential damages collectively " Liabilities"), in law or equity, whether actual, alleged or threatened, which arise out of, pertain to, or relate to the negligent acts or omissions or willful misconduct of Consultant, its officers, agents, servants, employees, subcontractors, materialmen, suppliers, or contractors, or their officers, agents, servants or employees ( or any entity or individual that Consultant shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees' active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the Parties. Consultant shall defend the Indemnitees in any action or actions filed in connection with any Liabilities with counsel approved by City, whose approval shall not be unreasonably withheld, and shall pay all costs and expenses, including all attorneys' fees and experts' costs actually incurred in connection with such defense. Consultant shall reimburse the Indemnitees for any and all legal expenses and costs incurred by the Indemnitees in connection therewith.

18. 1. 2. Consultant shall indemnify and hold harmless City in accordance with Sections 9. 0 and 10. 0.

18. 2. Subcontractor Indemnification. Consultant shall obtain executed indemnity agreements with provisions identical to those in this Section 18. 0 from 13 of 19
each and every subcontractor or any other person or entity involved by, for, with or on behalf of Consultant in the performance of this Agreement. If Consultant fails to obtain such indemnities, Consultant shall be fully responsible and indemnify, hold harmless and defend the Indemnitees from and against any and all Liabilities in law or equity, whether actual, alleged or threatened, which arise out of, are claimed to arise out of, pertain to, or relate to the acts or omissions of Consultant' s subcontractor, its officers, agents, servants, employees, subcontractors, materialmen, contractors or their officers, agents, servants or employees ( or any entity or individual that Consultant' s subcontractor shall bear the legal liability thereof) in the performance of this Agreement, including the Indemnitees' active or passive negligence, except for Liabilities arising from the sole negligence or willful misconduct of the Indemnitees, as determined by final arbitration or court decision or by the agreement of the Parties.

18. 3. Workers' Compensation Acts Not Limiting. Consultant' s indemnification obligations under this Section, or any other provision of this Agreement, shall not be limited by the provisions of any workers' compensation act or similar act. Consultant expressly waives its statutory immunity under such statutes or laws as to City, its elected and appointed officers, officials, agents, employees, designated volunteers and those City agents serving as independent contractors in the role of City officials.

18. 4. Insurance Requirements Not Limiting. City does not, and shall not, waive any rights that it may possess against Consultant because of the acceptance by City, or the deposit with City, of any insurance policy or certificate required pursuant to this Agreement. The indemnities and obligations in this Section shall apply regardless of whether or not any insurance policies are determined to be applicable to the Liabilities asserted against City or any of the other Indemnitees.

18. 5. Survival of Terms. Consultant' s indemnifications and obligations under this Section 18. 0 shall survive the expiration or termination of this Agreement.

19. 0 Non -Discrimination and Equal Employment Opportunity Consultant affirmatively represents that it is an equal opportunity employer. In the performance of this Agreement, Consultant shall not discriminate against any subcontractor, employee, or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, gender, sexual orientation, gender identity, gender expression, marital status, national origin, ancestry, age, physical disability, mental disability, medical condition, genetic information, or any other basis prohibited by law. Consultant will take affirmative action to ensure that subcontractors and applicants are employed, and that employees are treated during employment, without regard to their race, color, religious creed, sex, gender, gender identity, gender expression, marital status, national origin, 14 of 19
ancestry, age, physical disability, mental disability, medical condition, genetic information or sexual orientation, or any other basis prohibited by law.

20. 0 Labor Certification
By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code that require every employer to be insured against liability for Workers' Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

21. 0 Prevailing Wage and Payroll Records
To the extent that this Agreement calls for services that, in whole or in part, constitute " public works" as defined in the California Labor Code, Consultant shall comply in all respects with all applicable provisions of the California Labor Code, including those set forth in Exhibit B, attached hereto and incorporated by reference herein.

22. 0 Entire Agreement
This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings, or agreements. This Agreement may only be modified by a writing signed by both Parties.

23. 0 Severability
The invalidity in whole or in part of any provisions of this Agreement shall not void or affect the validity of the other provisions of this Agreement.

24.0 doverning Law and Venue
This Agreement shall be governed by and construed in accordance with the laws of the State of California, except that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in interpreting this Agreement. Any dispute that arises under or relates to this Agreement ( whether contract, tort or- both) shall be resolved in a superior court with geographic jurisdiction over the City of Seal Beach.

25. 0 No Third Party Beneficiaries
This Agreement is made solely for the benefit of the Parties to this Agreement and their respective successors and assigns, and no other person or entity shall be deemed to have any rights hereunder against either party by virtue of this Agreement.
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26. 0 Waiver
No delay or omission to exercise any right, power or remedy accruing to City under this Agreement shall impair any right, power or remedy of City, nor shall it be construed as a waiver of, or consent to, any breach or default. No waiver of any breach, any failure of a condition, or any right or remedy under this Agreement shall be ( 1) effective unless it is in writing and signed by the Party making the waiver, ( 2) deemed to be a waiver of, or consent to, any other breach, failure of a condition, or right or remedy, or ( 3) deemed to constitute a continuing waiver unless the writing expressly so states.

27. 0 Prohibited Interests; Conflict of Interest

27. 1. Consultant covenants that it presently has no interest and shall not acquire any interest, direct or indirect, which may be affected by the Services, or which would conflict in any manner with the performance of the Services.

Consultant further covenants that, in performance of this Agreement, no person having any such interest shall be employed by it. Furthermore, Consultant shall avoid the appearance of having any interest, which would conflict in any manner with the performance of the Services. Consultant shall not accept any employment or representation during the term of this Agreement which is or may likely make Consultant " financially interested" ( as provided in California Government Code §§ 1090 and 87100) in any decision made by City on any matter in connection with which Consultant has been retained.

27.2. Consultant further warrants and maintains that it has not employed or retained any person or entity, other than a bona fide employee working exclusively for Consultant, to solicit or obtain this Agreement. Nor has Consultant paid or agreed to pay any person or entity, other than a bona fide employee working exclusively for Consultant, any fee, commission, gift, percentage, or any other consideration contingent upon the execution of this Agreement. Upon any breach or violation of this warranty, City shall have the right, at its sole and absolute discretion, to terminate this Agreement without further liability, or to deduct from any sums payable to Consultant hereunder the full amount or value of any such fee, commission, percentage or gift.

27. 3. Consultant warrants and maintains that it has no knowledge that any officer or employee of City has any interest, whether contractual, non - contractual, financial, proprietary, or otherwise, in this transaction or in the business of Consultant, and that if any such interest comes to the knowledge of Consultant at any time during the term of this Agreement, Consultant shall immediately make a complete, written disclosure of such interest to City, even if such interest would not be deemed a prohibited " conflict of interest" under applicable laws as described in this Section.

28. 0 Final Payment Acceptance Constitutes Release
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The acceptance by Consultant of the final payment made under this Agreement shall operate as and be a release of City from all claims and liabilities for compensation to Consultant for anything done, furnished or relating to Consultant' s work or services. Acceptance of payment shall be any negotiation of City' s check or the failure to make a written extra compensation claim within ten calendar days of the receipt of that check. However, approval or payment by City shall not constitute, nor be deemed, a release of the responsibility and liability of Consultant, its employees, subcontractors and agents for the accuracy and competency of the information provided and/ or work performed; nor shall such approval or payment be deemed to be an assumption of such responsibility or liability by City for any defect or error in the work prepared by Consultant, its employees, subcontractors and agents.

29. 0 Corrections
In addition to the indemnification obligations set forth above, Consultant shall correct, at its expense, all errors in the work which may be disclosed during City' s review of Consultant' s report or plans. Should Consultant fail to make such correction in a reasonably timely manner, such correction may be made by City, and the cost thereof shall be charged to Consultant. In addition to all other available remedies, City may deduct the cost of such correction from any retention amount held by City or may withhold payment otherwise owed Consultant under this Agreement up to the amount of the cost of correction.

30. 0 NonAppropriation of Funds
Payments to be made to Consultant by City for any Services performed within the current fiscal year are within the current fiscal budget and within an available, unexhausted fund. In the event that City does not appropriate sufficient funds for payment of Consultant' s Services beyond the current fiscal year, this Agreement shall cover payment for Consultant' s Services only to the conclusion of the last fiscal year in which City appropriates sufficient funds and shall automatically terminate at the conclusion of such fiscal year.

31. 0 Mutual Cooperation

31. 1. City' s Cooperation. City shall provide Consultant with all pertinent Data, documents and other requested information as is reasonably available for Consultant' s proper performance of the Services required under this Agreement.

31. 2. Consultant' s Cooperation. In the event any claim or action is brought against City relating to Consultant's performance of Services rendered under this Agreement, Consultant shall render any reasonable assistance that City requires.

32. 0 Time of the Essence
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Time is of the essence in respect to all provisions of this Agreement that specify a time for performance; provided, however, that the foregoing shall not be construed to limit or deprive a Party of the benefits of any grace or use period allowed in this Agreement.

33.0 Attorneys' Fees
If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party all of its attorneys' fees and other costs incurred in connection therewith.

34.0 Exhibits
All exhibits referenced in this Agreement are hereby incorporated into the Agreement as if set forth in full herein. In the event of any material discrepancy between the terms of any exhibit so incorporated and the terms of this Agreement, the terms of this Agreement shall control.

35. 0 Corporate Authority
The person executing this Agreement on behalf of Consultant warrants that he or she is duly authorized to execute this Agreement on behalf of said party and that by his or her execution, the Consultant is formally bound to the provisions of this Agreement.
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IN WITNESS WHEREOF, the Parties hereto, through their respective authorized representatives have executed this Agreement as of the date and year first above written.

CITY OF SEAL BEACH
9- & n" jn
U.9R. . Ta
Attest:

M
CONSULTANT: Raftelis Financial
onsultants, Inc., a North Carolina
orporation
By:

Peiffe A. Brandt
C f Executive Officer
Cm
Christine McIntyre
Secretary
Approved as to Form:

By: jg;i6
Nicholas R. Ghirelli, City Attorney
case note, two signatures required
ui corporations pursuant to California
Corporations Code Section 393 from
each of the following categories: ( i) the
chairperson of the board, the president
or any vice president, and ( ii). the
secretary, any assistant secretary, the
chief financial officer or any assistant
treasurer of such corporation.)

PROOF OF AUTHORITY TO BIND

CONTRACTING PARTY REQUIRED
19 of 19

EXHIBIT A
Consultant' s Scope of Services

R R A F T E LIS

RAFTELIS
May 30, 2023
Ms. Iris Lee
Public Works Director
City of Seal Beach
211 Eighth Street
Seal Beach, CA 90740
Subject: Water and Wastewater Financial Plan
Dear Mrs. Lee,
Raftelis is pleased to submit this proposal for a water and wastewater financial plan. A financial plan is the first half of a rate study. The goal of a financial plan is to assess if your future expected revenue is sufficient to meet expenses over the next 5 to 10 years. We project expenses which include operating, capital, debt, and reserve funding expenses. Capital expenses may be funded through cash and/ or debt. We also plan for reserves. If revenue is not sufficient, the financial plan proposes a series of revenue increases to meet expenses and reserve targets.

As we discussed, we will not perform a cost -of -service study. A cost of service study allocates the City' s revenue requirements to each customer class. A cost -of -service study was performed in the 2021 rate study and we can use the resulting rate structure from this study. Therefore, if our financial plan identifies a need for 10% additional revenue, we will increase all current rates by 10% to yield the additional required revenue.

This letter proposal includes a scope of work. I will be the project manager assisted by a member of our financial consulting staff, and Gina DePinto, APR, who will lead the outreach efforts. Should you have any questions, please contact me using the contact information below.

Sincerely,
Steve Gagnon, PE (AZ)
Vice President
P.• 714 3512013
E. sgagnon@raftelis. com
445 S. Figueroa Street, Suite 1925, Los Angeles, CA 90071 www. raftelis. com,

RAFTELIS
Scope of Services
Task 1: Project Management, Kick-off Meeting, QA/QC, Data Collection and Communication Check-in Meetings
Note: We have assumed that staff meetings are virtual and City Council Meetings are in person.

The kick-off meeting is used to perform our due diligence. As part of the kick-off meeting, Raftelis will:

1. Discuss any items that you think may affect the City' s future financial health such as:
o large CIP projects
o changes in revenue or expenses
o changes in tax revenue
o
Inflation and the projection of future expenses including water purchase costs.

2. Identify objectives for the study.

3. Discuss the state of reserves and financial policies.

4. Discuss any data gaps or questions.

5. Review the schedule.

This task also includes general project management, correspondence, billing, QA/ QC, and data collection. Raftelis will prepare a data request and start preparing the financial model before the kick- off meeting.

The time and cost associated with quality assurance/ quality control (QA/ QC) is also included in this task and includes a QA/ QC review by a Sr. Analyst who is not involved with the project to review calculations and critique the approach.

For the communications and outreach planning and implementation tasks over several months or longer, we typically schedule biweekly virtual check-in meetings of 30 minutes, so we are in regular touch about what we' ve learned, what we' re doing, and whether anything about communications and outreach efforts needs to change.

MEETINGS
Kick-off meeting (in person)
30 -minute virtual check-in meetings ( 16 each virtual) primarily for communications and outreach tasks ( Tasks 6- 9)

DELIVERABLES
Data Request List
Task 2: Water and Wastewater Financial Plan
The financial plan assesses each utility' s financial condition and suggests revenue adjustments to ensure long-term fiscal sustainability. We will analyze the prior financial plan and compare it to the proposed financial plan to assess why additional revenue increases are needed. It is likely a combination of the following factors:
1) Decreased water sales with the prior year drought and heavy rains in early 2023. 2) Low inflation factors used to project expenses.
3) Increased OCWD wholesale rates.
4) Higher capital expenses than projected.
5) Depletion of cash reserves due to capital spending that was originally planned to be funded through bond proceeds.
6) Any other factors that increased expenses beyond those anticipated in the prior financial plan.

RAFTELIS 3
Raftelis will project expenses and revenue over a 10 -year planning horizon. If desired, we can model two to three different financial plan scenarios reflecting different revenue adjustments based on capital investment and other expenses.

As part of the financial plan we review and discuss typical reserves for operating, capital, and if applicable rate stabilization and emergency purposes.

Our models include a dashboard with the following features:

Flexibility to change assumptions such as water sales, CIP levels, debt issuance amounts, and revenue adjustments.

Error flagging of results such as failure to meet debt coverage, unmet reserve targets, etc.

Sensitivity analyses that can be viewed instantaneously.

A sample model dashboard is shown below.
la R FYE 2020 FYE 202f FYE 2022 FYE 2023 FYE 2024 FYE 2025 FYE 2029 Salectiorin_OPtiana — R—me Adjuatmsnta 3.7% 5. 0% 5. 0% 5.0% 5. 0% O. ON. 0. 0% Chert 3: Display Total Funds' AdjuatmantMonth Apdi April Apol' April April April APAI Display Years 5 Demand Reduction 0% 0% 0% 0% 0% 0% 0% Raftelis will develop Pass- through? FALSE Addrt Demand Factor 100% 100% 100% 100% 1007. loci. 100% Rata Revenue Calcaiatod Patnbla Wutsr Salsa 17, 936 AF 17, 652AF 17,635 AF 17, 719 AF 17,751 AF 17, 7941 AF 17, 817AF a customized Reryled Weter Saba Z,Ti6 AF 2,993 AF 2.993AF 2.993 AF 2,963 AF 2, 993 AF Z, 953AF ETpand( or Transyars and Proposed Debt OpDons; financial model that

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FYE9120 FYE ] 021 FYE Mn FYEN13 FYEMSA FYE 2010 FTE 1021 FYE 1021 FYEMS FYE 2024 We' ve assumed two virtual staff presentations to review the financial plan, solicit staff feedback and incorporate it into the financial plan.

MEETINGS
Two webinars to discuss the financial plan

DELIVERABLES
Financial Plan Model in Microsoft Excel
Task 3: Three City Council Presentations
We propose an introductory Council presentation to explain the need for additional revenue. The second workshop will show the financial plan results and the additional revenue increases needed. We will describe all assumptions that will include anticipated revenue based on water sales, inflationary assumptions, and water purchase costs. We have included a third workshop, if needed, to incorporate City Council feedback from the second workshop.

RAFTELIS 4

MEETINGS
Three City Council workshops

DELIVERABLES
Presentation materials in PowerPoint
Task 4: Draft and Final Report Preparation
Raftelis will prepare draft and final reports. The report will describe the assumptions used in projecting revenue and expenses and the revenue adjustments needed to meet expenses and reserve targets.

MEETINGS
Webinar or phone conferences as needed to discuss the Report

DELIVERABLES
Draft and Final Reports
Task 5: Public Hearing Presentation
To adopt the rates, the City must present the rates to the public at a public hearing. Raftelis will prepare a presentation and present study results at the public hearing. Our Project Managers, myselfincluded, do this often and are accustomed to answering questions from the Council and members ofthe public. We assume this meeting will be in person.

PLANNED MEETINGS:

One public hearing presentation
DELIVERABLES:

Public hearing presentation in PowerPoint.

Task 6: Community Meetings with Presentation
We will help the City go beyond communicating with its stakeholders to ensure it also engages with them, meaningfully, through the study process before decisions are made. We propose that Raftelis will help coordinate and present at two community meetings or open houses to inform the public about the need to adjust rates. These are separate from publicly noticed City Council meetings, workshops, and hearings. Open houses allow convenient, one- on-one communication with customers in a low conflict setting, ensuring that customers can get their questions answered and that City staff can benefit from community feedback. This process can be highly collaborative and iterative; the feedback we receive from key stakeholders will help guide the overall direction ofthe study and inform the methodologies and options ultimately selected for the final rate proposal. Our presentation will be reviewed by our communications staff who are experts at developing clear, compelling, and consistent messages that build awareness and support with stakeholders.

PLANNED MEETING( S):

Web meetings as needed to discuss the messaging, meeting logistics, and presentation; two in-person community meetings or open houses
DELIVERABLE( S):

Presentation in PowerPoint
Develop promotional materials including digital and print event notices, invitations, social media content, a press release, and direct mail postcard ( printing and postage are not included)

RAFTELIS
o Recommend producing 8- 10 graphic display/ poster boards for use in the open houses o Logistical coordination and on- site facilitation of the open houses o Gathering feedback from participants
o Compiling a summary report of feedback
Task 7: Proposition 218 Public Notice Preparation
While requirements of Proposition 218 notifications are easy to satisfy, too many municipalities and utilities miss the opportunity to educate and inform ratepayers. Over the years, Raftelis has designed countless Proposition 218 notifications that go beyond the minimum dictated by statute to deliver visually appealing pieces that customers want to read. We will draft the content and match the City' s established brand guidelines to design custom graphics that support clear, positive messaging in the Notice. Once these arrive in mailboxes, customers will not only be properly notified but will understand the City' s needs and be more likely to support rate adjustments.

PLANNED MEETING( S):

Web meetings as needed to discuss the public hearing notice DELIVERABLE( S):

Draft notification language for the City' s legal counsel' s review/ approval, designed notification with two rounds of revisions, and final press -ready PDF in English. As needed, the City will provide language translations to be included in the final designed Notice.

Task 8: Communication and Outreach Plan Development
As a first step in getting a comprehensive look at how we can build a strategy most effectively, Raftelis will conduct a two- hour in-person outreach kickoff meeting followed by a communications analysis to identify areas we can leverage.

It' s in our best interest to invite staff who participate in the City and Public Works Department communications assets to participate in the kickoff because we will review assets, obstacles, challenges, and opportunities with respect to communications and outreach to obtain a clear picture of your working environment and staff resources. We' ll amass your internal and external stakeholders, communication materials, channels, and programs and evaluate what' s working, or what may need a tweak. Doing so provides us with a foundation to build an effective plan.

From there, Raftelis will develop an outreach plan that includes the following components:

Situation analysis — this is a combination ofinternal research and input gathered in the kickoff workshop.

Stakeholder identification — stakeholder mapping is inserted into the plan to show how key stakeholders are connected to the communication process. It also identifies special population communication needs such as necessary translation services, or community communication preferences.

Communication channel identification - this section covers which communications channels will be used to reach stakeholders, such as the City' s website, social media, printed and electronic materials, bills, direct mail, newsletters, and other available opportunities.

Messaging platform — this provides messages about why rates are changing, how the results will be implemented, and potential impacts to customers for use in such materials as FAQs, infographics, website updates, bill inserts, etc.

Internal communication strategies — this section will provide guidance to ensure all City staff are aware ofthe rates study and feel prepared and empowered to answer questions about it or where to direct stakeholders for information.

Community engagement techniques — this section will identify the techniques we will recommend for community engagement to ensure key stakeholders from each customer group and the development community, potentially highly impacted customer groups, underrepresented populations, etc., all have an opportunity to provide input into decision making.

RAFTELIS
Traditional and social media strategies — this section will provide an approach to using local media and your social media platforms for reaching your community with information.

Materials — this section will identify materials we recommend that we can develop for you to help us communicate such as newsletters, fact sheets, brochures, flyers, webpages, and an explainer video of legal rates setting.

Success measures — this section will identify the outputs and outcomes we will use to measure project success.

Implementation plan — this section ensures the Outreach Plan is accessible, usable, and practical. It identifies roles, responsibilities, materials, activities, and their due dates. We will refer to this document during project update calls.

PLANNED MEETING( S):

One in-person outreach kickoff meeting, two virtual meetings to review the draft Outreach Plan and receive feedback DELIVERABLE( S):

Draft and Final Communications and Outreach Plan with message platform, FAQs, one press release, social media content
Task 9: Materials Development
Key messages developed as part of the Communications and Outreach Plan come to life when woven together into powerful communications pieces by Raftelis' strategic communicators and professional graphic designers. Visual representation of proposed rate changes in an easy -to -understand and accessible format significantly improves customer understanding ofrate structure changes that may impact customer bills. Raftelis can provide a suite of communications pieces to assist with communicating rate and rate structure changes in print, online, or in person.

Exact materials will be determined in consultation with you, with specific estimates provided before expending time and materials. As a rough estimate, a brochure or fact sheet averages around $ 1, 500 each. A 2 -minute explainer video is roughly $ 2, 500-$ 5, 000 depending on content and format ( animation vs original b -roll, etc.). Generally, there are cost savings as more materials are produced using similar content and design.

PLANNED MEETING( S):

Web meetings as needed to discuss materials development DELIVERABLE( S):

Materials as requested
As proposed, hours built in for design and development of 2- 3 products

RAFTELIS
Raftelis proposes to complete the scope of work outlined above on a time -and -materials basis for the fee shown below.

The following table shows our proposed fee based on our hourly rate and estimated hours. The fee shows an optional task for a communications and outreach plan and materials development.

St; - Statt Uansultants k Total Fees & Expenses
GD- Graphic Designer i - —
t
j Number of
Virtual In -Person Total Fees &
Tasks Y Meetings Meetings PM CS SC GD Total Expenses

1. Project Management, Kick- off Meeting and 16 1 i 14 1'4i 10 38' 10, 593
QA/ QC, Communications . Check -ins

2.. Water and Wastewater Financial Plan 2 r 80 j24 56 18, 760 r

3. Three City Council Presentations 3 20 3 6, 2 31
r
9,449

4. Draft and Final Reports i ; 10 34 44 f $ 9, 790
5- Public Hearing Presentation11 8 4 2 14 4,363

6. Community Meetings with Presentation 2 t
2 1.0 14
4 4. 1 32
d
1 $ 8,826

7. Proposition 218 Public Notice Preparation 2 i 2 12 t1 10 26 5, 825

8.. Communication & Outreach Plan 21' 1 30 i 6 37 9, 533 i 1
9: Materials Development 4 11 10 1 12 24 5, 275
28 8 t 990 87 114 34 325
340 260 175 160
30, 600 22, 620 19, 950 73, 170
Total Fees 73, 170
PM - Project Manager, Steve Gagnon, PE ( AZ) r
CS - Communications Staff, Gina DePinto, APR i 1
Total Expenses 9, 245
St; - Statt Uansultants k Total Fees & Expenses
GD- Graphic Designer i - —
RAFTELiS 8
Schedule
A proposed schedule is shown below. It assumes that Raftelis will receive data by late July and that we will implement rates for January 2024.

Notice to Proceed

1. Project Management, Kick- off Meeting and
QA/ QC, Communications Check -ins
City Provides Requested Data

2. Water and Wastewater Financial Plan
Kick- off Meeting

3. Three City Council Presentations

4. Draft and Final Reports

6. Public Hearing Presentation

6. Community Meetings with Presentation

7. Proposition 218 Public Notice Preparation
Public Noticing Period

8. Communication & Outreach Plan
9: Materials Development

JUN JUL AUG SEP OCT NOV DEC JAN
7k'
0 0
Q O O
O

1.1 EXHIBIT B

TERMS FOR COMPLIANCE WITH CALIFORNIA LABOR LAW REQUIREMENTS

1. This Agreement calls for services that, in whole or in part, constitute " public works" as defined in Division 2, Part 7, Chapter 1 ( commencing with Section 1720) of the California Labor Code (" Chapter 1"). Further, Consultant acknowledges that this Agreement is subject to ( a) Chapter 1 and ( b) the rules and regulations established by the Department of Industrial Relations (" DIR") implementing such statutes. Therefore, as to those Services that are " public works", Consultant shall comply with and be bound by all the terms, rules and regulations described in 1( a) and 1( b) as though set forth in full herein.

2. California law requires the inclusion of specific Labor Code provisions in certain contracts. The inclusion of such specific provisions below, whether or not required by California law, does not alter the meaning or scope of Section 1 above.

3. Consultant shall be registered with the Department of Industrial Relations in accordance with California Labor Code Section 1725.5, and has provided proof of registration to City prior to the Effective Date of this Agreement. Consultant shall not perform work with any subcontractor that is not registered with DIR pursuant to Section 1725. 5. Consultant and subcontractors shall maintain their registration with the DIR in effect throughout the duration of this Agreement. If Consultant or any subcontractor ceases to be registered with DIR at any time during the duration of the project, Consultant shall immediately notify City.

4. Pursuant to Labor Code Section 1771. 4, Consultant' s Services are subject to compliance monitoring and enforcement by DIR. Consultant shall post job site notices, as prescribed by DIR regulations.

5. Pursuant to Labor Code Section 1773.2, copies of the prevailing rate of per diem wages for each craft, classification, or type of worker needed to perform the Agreement are on file at City Hall and will be made available to any interested party on request.

Consultant acknowledges receipt of a copy of the DIR determination of such prevailing rate of per diem wages, and Consultant shall post such rates at each job site covered by this Agreement.

6. Consultant shall comply with and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages. Consultant shall, as a penalty to City, forfeit 200.00 for each calendar day, or portion thereof, for each worker paid less than the prevailing rates as determined by the DIR for the work or craft in which the worker is employed for any public work done pursuant to this Agreement by Consultant or by any subcontractor.

7. Consultant shall comply with and be bound by the provisions of Labor Code Section 1776, which requires Consultant and each subcontractor to: keep accurate payroll records and verify such records in writing under penalty of perjury, as specified in Section 1776; certify and make such payroll records available for inspection as provided by Section 1776; and inform City of the location of the records.

8. Consultant shall comply with and be bound by the provisions of Labor Code Sections 1777. 5, 1777. 6 and 1777. 7 and California Code of Regulations, Title 8, Section 200 et seq. concerning the employment of apprentices on public works projects. Consultant shall be responsible for compliance with these aforementioned Sections for all apprenticeable occupations. Prior to commencing work under this Agreement, Consultant shall provide City with a copy of the information submitted to any applicable apprenticeship program. Within 60 days after concluding work pursuant to this Agreement, Consultant and each of its subcontractors shall submit to City a verified statement of the journeyman and apprentice hours performed under this Agreement.

9. Consultant shall not perform work with any Subcontractor that has been debarred or suspended pursuant to California Labor Code Section 1777. 1 or any other federal or state law providing for the debarment of contractors from public works. Consultant and subcontractors shall not be debarred or suspended throughout the duration of this Contract pursuant to Labor Code Section 1777. 1 or any other federal or state law providing for the debarment of contractors from public works. If Consultant or any subcontractor becomes debarred or suspended during the duration of the project, Consultant shall immediately notify City.

10. Consultant acknowledges that eight hours labor constitutes a legal day' s work.

Consultant shall comply with and be bound by Labor Code Section 1810. Consultant shall comply with and be bound by the provisions of Labor Code Section 1813 concerning penalties for workers who work excess hours. Consultant shall, as a penalty to City, forfeit $ 25. 00 for each worker employed in the performance of this Agreement by Consultant or by any subcontractor for each calendar day during which such worker is required or permitted to work more than eight hours in any one calendar day and 40 hours in any one calendar week in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code. Pursuant to Labor Code Section 1815, work performed by employees of Consultant in excess of eight hours per day, and 40 hours during any one week shall be permitted upon public work upon compensation for all hours worked in excess of eight hours per day at not less than one and one-half times the basic rate of pay.

11. California Labor Code Sections 1860 and 3700 provide that every employer will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, Consultant hereby certifies as follows:

I am aware of the provisions of Section 3700 of the Labor Code which require every employer to be insured against liability for workers' compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract."

12. For every subcontractor who will perform work on the project, Consultant shall be responsible for such subcontractor' s compliance with Chapter 1 and Labor Code Sections 1860 and 3700, and Consultant shall include in the written contract between it and each subcontractor a copy of those statutory provisions and a requirement that each subcontractor shall comply with those statutory provisions. Consultant shall be required to take all actions necessary to enforce such contractual provisions and ensure subcontractor' s compliance, including without limitation, conducting a periodic review of the certified payroll records of the subcontractor and upon becoming_ aware of the failure of the subcontractor to pay his or her workers the specified prevailing rate of wages.

Consultant shall diligently take corrective action to halt or rectify any failure.

13. To the maximum extent permitted by law, Consultant shall indemnify, hold harmless and defend ( at Consultant' s expense with counsel reasonably acceptable to City) City, its officials, officers, employees, agents and independent contractors serving in the role of City officials, and volunteers from and against any demand or claim for damages, compensation, fines, penalties or other amounts arising out of or incidental to any acts or omissions listed above by any person or entity ( including Consultant, its subcontractors, and each of their officials, officers, employees and agents) in connection with any work undertaken or in connection with the Agreement, including without limitation the payment of all consequential damages, attorneys' fees, and other related costs and expenses. All duties of Consultant under this Section shall survive the termination of the Agreement. rliantif• 1722AAq RAFTEFIN
ACORD.. CERTIFICATE OF LIABILITY INSURANCE
DATE ( NNNDD/ YYY`/)
6/ 15/ 2023
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER( S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsement( s).

USI Insurance Svcs, Charlotte
6100 Fairview Road Ste 1400
Charlotte, NC 28210
800 868-8834INSURER
GU
NAME:ME: I Brad Christensen

PHONE FAX
AIC, No, Ext): AIC, No):

ADDRESS: E- MAIL brad. christensen@usi. com
INSURER( S) AFFORDING COVERAGE NAIC #
A National Fire Insurance Co. of Hartford 20478

INSURED
Raftelis Financial Consultants, Inc.
227 West Trade Street, Ste. 1400
Charlotte, NC 28202
INSURER B: Continental Insurance Company 35289
INSURER C: American Casualty Company of Reading PA 20427 INSURER D: Continental Casualty Company 20443
INSURERE:

INSURER F:

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

INSR LTR TYPE OF INSURANCE

ADDLISUBR

INSR WVD POLICY NUMBER

POLICY EFF
MIDD

POLICY EXP
D
LIMITS
A X COMMERCIAL GENERAL LIABILITY 6076000011 0112112023 01/ 21/ 202 EACH OCCURRENCE $ 1, 000,000 PREMISES Ea occu nce 5500, 000 CLAIMS - MADE 1 OCCUR
MED EXP (Any oneperson) 515,000
PERSONAL & ADV INJURY S1, 000, 000
GEN' L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2, 000, 000 PRODUCTS - COMP/ OP AGG 52, 000, 000 X POLICY
PROJECT LOC
OTHER:

D AUTOMOBILE LIABILITY BUA6076000025 1/ 21/ 2023 01/ 21/ 202 EDacct CNDSINGLELIMIT $ 1, 000, 000 BODILY INJURY ( Per person) S

ANY AUTO
OWNED SCHEDULED BODILY INJURY ( Per accident) S

AUTOS ONLY AUTOS

HIRED NON - OWNED

X AUTOS ONLY X AUTOS ONLY
PROPERTY DAMAGE 5
Per accident
5 B X UMBRELLA LIAB X OCCUR CUE6076000039 1/ 21/ 2023 0112112024 EACH OCCURRENCE $ 5, 000, 000 EXCESS LIAB CLAIMS - MADE AGGREGATE s5, 000, 000
DED I X RETENTION 510000 S
C WORKERS COMPENSATIONWC676000042 AND EMPLOYERS' LIABILITY N

ANY PROPRIETOR/ PARTNER/ EXECUI
YIN
OFFICER/ MEMBEREXCLUDED?
Mandatory in NH)
NIA
WC676305637
1/ 21/ 2023
1/ 21/ 2023
01/ 21/ 202
0112112024

X PERTUT OTH -
A PR
E. L. EACH ACCIDENT $ 1, 000, 000
E. L. DISEASE - EA EMPLOYEE 31, 000, 000
E. L. DISEASE - POLICY LIMIT 51, 000, 000 If yes, describe under DESCRIPTION OF OPERATIONS below
D Professional 652071235 D112112023 0112112024 5, 000, 000 Aggregate 5, 000, 000 Occurrence
3/ 4/ 1994 Retro Date
DESCRIPTION OF OPERATIONS/ LOCATIONS/ VEHICLES ( ACORD 101, Additional Remarks Schedule, maybe attached if more space is required) The City of Seal Beach its elected and appointed officials, officers, employees, agents, designated volunteers and those City agents acting as independent contractors in the role of City officials shall be See Attached Descriptions)

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE City of Seal Beach THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 211 - 8th Street ACCORDANCE WITH THE POLICY PROVISIONS.

Seal Beach, CA 90740

AUTHORIZED REPRESENTATIVE
40ai,_ L U 6d,
W Tyt$t5- ZU 10 At- UKU L UKrUKH I IUM Mu I IyI Iu I U Ul vwu.

ACORD 25 ( 2016103) 1 of 2 The ACORD name and logo are registered marks of ACORD S40414805/ M39162930 LUSZZ
I. DESCRIPTIONS. ( Continued from Page 1)
covered as additional insuredswith respect to General Liability, Automobile and Umbrella will follow form as per written contract. The coverage afforded to the Additional Insured is on a Primary and Non Contributory basis for General Liability, Automobile and Umbrella if required by written contract. Waiver of Subrogation applies to General Liability, Automobile, Workers Compensation and Umbrella policies in favor of the above listed Additional Insured per written contract. A 30 day notice of cancellation will be given except for non- payment of premium will be 10 days if required by written contract.

SAGITTA 25. 3 ( 2016103) 2 of 2
S40414805/M39162930
Agenda Item D

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Iris Lee, Director of Public Works
SUBJECT: Awarding and Authorizing Execution of a Public Works Agreement with R.J. Noble Company for the Seal Beach
Boulevard at North Gate Road Improvement Project, CIP
ST2301
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7622:

1. Approving the plans, specifications, and contract documents for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301; and,

2. Approving and awarding a Public Works Agreement to R.J. Noble Company in the amount of $522,981.50, and rejecting all other bids; and,

3. Authorizing the Interim City Manager to execute a Public Works Agreement with R.J. Noble Company for the Project; and,

4. Authorizing the Interim City Manager to approve additional work requests up to $60,000 and construction support/testing/inspection services up to $60,000, in connection with the Project, in the cumulative not-to-exceed amount of $120,000; and,

5. Authorizing the Interim City Manager to approve, by change order, additional work requests for Bid Item #11, in the not-to-exceed amount of $47,250.00.

BACKGROUND AND ANALYSIS:

The City’s Arterial Paving Program (Project) was budgeted in the FY 2024-2025 Capital Improvement Program to improve roadway conditions within the City. The work will generally include grinding the existing pavement and installing an asphalt overlay to extend the roadway serviceable life. Pursuant to the 2022 Pavement

Page 2 ends

Management Program, Seal Beach Boulevard between Westminster Avenue and North Gate Road was selected for resurfacing.

The City Council adopted Resolution 7606 on January 27, 2025, awarding a paving project to resurface Seal Beach Boulevard between Westminster Avenue and North Gate Road. However, the intersection at North Gate Road itself is not a part of that project. Repaving of this intersection was created as a stand-alone project due to design differences between the rest of Seal Beach Boulevard, alternate funding sources, and permitting constraints with Caltrans.

In 2022, the City was successful in securing funding for this project through the Coronavirus Response and Relief Supplemental Appropriations Act of 2021, through the Orange County Transportation Authority 2021 Pavement Management Relief Funding Program (PMRF). This intersection was heavily used during the I405 widening project and experienced more rapid pavement deterioration, shortening the pavement lifespan. Orange County Transportation Authority (OCTA) funding provided via a Settlement Agreement was also utilized to mitigate a portion of the cost associated with the paving of this intersection.

On February 19, 2025, the City Clerk’s office received five (5) bids with the following base bid results:

Rank Contractor Total Base Bid
Low R.J. Noble Company $522,981.50
2 All American Asphalt $531,866.00
3 Hardy & Harper, Inc. $619,500.00
4 LRC Earthwork & Engineering Corp. $667,765.00
5 Onyx Paving Company $731,000.00
Based upon the references, qualifications, work experience, and cost, staff recommends deeming R.J. Noble Company (RJ Noble) as the lowest responsible bidder at the base bid price of $522,981.50, awarding the Project to RJ Noble, and rejecting all other bids. The Project plans are available in the City Engineer’s office.

Staff further recommends authorizing the Interim City Manager to approve additional work requests up to $60,000, and construction support/testing/inspection services up to $60,000, in the cumulative not-to-exceed amount of $120,000.

The Project scope of work includes an optional full-depth structural section removal and replacement that was requested as part of the bid but is not included in the base bid or award pricing. The full-depth structural section removal and replacement may be necessary should project inspection during construction warrant the work. In response, RJ Noble also submitted an optional bid item for Item 11 in the amount of $47,250. As such, staff recommends establishing an additional construction contingency of $47,250 that would allow for additional full-

Page 3 ends

depth structural section removal and replacement, as deemed necessary by the Interim City Manager.

Construction is estimated to start in late Spring 2025 and be completed within 15 working days following the issuance of the Notice to Proceed. The Project will require closure of up to two (2) through lanes and/or turn lanes at the intersection of Seal Beach Boulevard and North Gate Road in each direction at any one time.

Accordingly, and in compliance with the Caltrans encroachment permit conditions, the work will be conducted at night to minimize disruption to the high day time traffic volumes. Staff will coordinate the work schedule and construction expectations with Leisure World, Golden Rain Foundation, and other entities along Seal Beach Boulevard and North Gate Road prior to the start of construction.

ENVIRONMENTAL IMPACT:

This project complies with all requirements of the California Environmental Quality Act (CEQA) and is categorically exempt under section 15301 Class 1, Subsection (c) of the CEQA Guidelines.

LEGAL ANALYSIS:

The City Attorney has reviewed the agreement and approved the resolution as to form.

FINANCIAL IMPACT:

Sufficient funding in the amount of $1,055,000 has been allocated in the FY 2024- 2025 Capital Improvement Program budget for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301. No budget amendments are recommended. The table below presents the estimated breakdown of the Project construction cost:

Description Amount
R.J. Noble - Total Base Bid $ 522,981.50
Contingency $ 60,000.00
Construction Support/Inspection/Testing
Optional Change Order 1 (Bid Item 11)
$ 60,000.00
$ 47,250.00
Total $ 690,231.50
Any unspent funds will be returned to the original funding source.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

Page 4 ends

RECOMMENDATION:

That the City Council adopt Resolution 7622:

1. Approving the plans, specifications, and contract documents for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301; and,

2. Approving and awarding a Public Works Agreement to R.J. Noble Company in the amount of $522,981.50, and rejecting all other bids; and,

3. Authorizing the Interim City Manager to execute a Public Works Agreement with R.J. Noble Company for the Project; and,

5. Authorizing the Interim City Manager to approve, by change order, additional work requests for Bid Item #11, in the not-to-exceed amount of $47,250.00.

SUBMITTED BY: NOTED AND APPROVED:

Iris Lee Patrick Gallegos
Iris Lee, Director of Public Works Patrick Gallegos, Interim City Manager Prepared by: David Spitz, P.E. Associate Engineer
ATTACHMENTS:

A. Resolution 7622
B. Agreement with R.J. Noble Company
RESOLUTION 7622

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

AWARDING AND AUTHORIZING THE INTERIM CITY MANAGER
TO EXECUTE A PUBLIC WORKS AGREEMENT WITH R.J.

NOBLE COMPANY FOR THE SEAL BEACH BOULEVARD AT
NORTH GATE ROAD IMPROVEMENT PROJECT, CIP ST2301
WHEREAS, on January 22, 2025, the City issued a solicitation for bids for the Seal Beach Boulevard at North Gate Road Improvement Project, CIP ST2301 (Project); and,
WHEREAS, on February 19, 2025, the City Clerk’s office received five (5) bids in response to the solicitation for bids, and R.J. Noble Company submitted the lowest responsible bid in the amount of $522,981.50; and,
WHEREAS, upon reviewing the Notice Inviting Bids and Instructions to Bidders, the bids submitted for the work to be performed pursuant to the Agreement and the plans and specifications, the City Council finds that R.J. Noble Company is a qualified firm to perform the Project.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE:

Section 1. The City Council hereby approves the plans and specifications for the Project.

Section 2. Based on the recitals set forth above, the City Council hereby awards a Public Works Agreement to R.J. Noble Company for the Project in the not-to-exceed amount of $522,981.50 and rejects all other bids.

Section 3. The City Council hereby authorizes and directs the Interim City Manager to execute the Public Works Agreement with R.J. Noble Company on behalf of the City.

Section 4. The City Council hereby authorizes the Interim City Manager to approve payments for additional work requests up to $60,000 and payments for construction support/testing/inspection services up to $60,000, in connection with the Project in the cumulative not-toexceed amount of $120,000.

Section 5. The City Council hereby authorizes the Interim City Manager to approve, by change order, additional work requests by R.J. Noble Company for Bid Item 11, in a not-to-exceed amount of $47,250.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 10th day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE }
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7622 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 10th day of March 2025.

Gloria D. Harper, City Clerk

Agenda Item E

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Iris Lee, Director of Public Works
SUBJECT: Approving an Orange County Water District Producer Well Construction Loan Agreement for the Lampson Well
Treatment System, CIP WT1902
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7623:

1. Approving an Orange County Water District Producer Well Construction Loan Agreement for the Lampson Well Treatment System, CIP WT1902; and,

2. Authorizing the Interim City Manager to execute the Agreement for an estimated amount of $4,450,000, with the final amount to be determined upon receipt of publicly solicited bids; accept, receive, and utilize the Agreement funding on behalf of the City.

BACKGROUND AND ANALYSIS:

The City owns and maintains four (4) water production wells – (1) Lampson Well, (2) Beverly Manor Well, (3) Leisure World Well, and (4) Bolsa Chica Well. The Lampson Well is located at the easterly end of the Old Ranch Country Club on Lampson Avenue.

When Lampson Well runs for long periods of time or at higher flow rates, there is an increase in hydrogen sulfide (H2S) concentrations. While H2S is identified under the National Secondary Drinking Water Regulations for aesthetic effects and is not a health and safety concern, the nuisance odor from H2S is distinct. As such, the Lampson Well Treatment System (Project) was introduced to permanently treat this nuisance odor and ultimately increase well production capacity and operational flexibility.

Orange County Water District (OCWD) has the statutory responsibility to manage, regulate, and replenish the Orange County Groundwater Basin (Basin) that the Project draws from. In efforts to encourage groundwater producers, such as the

Page 2 ends

City, to operate their production well sites to capacity and provide reliable drinking water, OCWD has introduced the Producers Well Construction Loan Program (Program).

The Program is generally summarized below, and is more specifically detailed in the attached agreement:
• A 20-year term that would lessen the burden of large one-time capital investments; and,
• Fair interest rate that would be locked at a rate equal to OCWD’s current monthly yield-to-maturity for OCWD’s investment portfolio; and, • Loan would be amortized over the term from a project’s substantial completion date; and,
• Annual repayments would begin one (1) year after a project’s substantial completion date; and,
• Program funding may be used to cover construction support services and construction costs.

Staff finds the Program to be favorable and consistent with the City’s desires to provide safe and reliable water supply. Furthermore, the ability for the City to produce groundwater would ultimately decrease overall operational costs compared to importing water, which is generally double the cost. As such, the City submitted an application for Project construction funding under the Program and has been selected. As the Project’s design has been completed (“shovel-ready”), the City would be able to realize the benefits of Lampson Well sooner than with a new project.

ENVIRONMENTAL IMPACT:

This item is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the state CEQA Guidelines because it can be seen with certainty that the approval of a loan agreement with Orange County Water District will not have a significant effect on the environment.

The Project complies with all requirements of the California Environmental Quality Act (CEQA) and is categorically exempt under Section 15301 Class 1 Subsection (b) of the CEQA Guidelines as the work involves alteration to an existing public utility facility.

LEGAL ANALYSIS:

The City Attorney has approved the agreement and resolution as to form.

Page 3 ends

FINANCIAL IMPACT:

The estimated loan amount is $4,450,000, which will be confirmed upon publicly bidding the Project. Loan repayments will be budgeted into Water Operations and Maintenance budget accordingly.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council adopt Resolution 7623:

1. Approving an Orange County Water District Producer Well Construction Loan Agreement for the Lampson Well Treatment System, CIP WT1902; and,

SUBMITTED BY: NOTED AND APPROVED:

Iris Lee Patrick Gallegos
Iris Lee, Director of Public Works Patrick Gallegos, Interim City Manager ATTACHMENTS:

A. Resolution 7623
B. OCWD Producer Well Construction Loan Agreement
RESOLUTION 7623

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

APPROVING AN ORANGE COUNTY WATER DISTRICT

PRODUCER WELL CONSTRUCTION LOAN AGREEMENT FOR
THE LAMPSON WELL TREATMENT SYSTEM (CIP WT1902)
WHEREAS, Lampson Well is one of the City’s four (4) water production wells where an occasional nuisance odor has been detected; and, WHEREAS, the Lampson Well Treatment System (CIP WT1902) (Project) was identified to mitigate the nuisance odor; and,
WHEREAS, the Legislature of the State of California has vested in the Orange County Water District (OCWD) the statutory responsibility to manage, regulate, replenish, and to protect the quality of the Orange County Groundwater Basin (Basin); and,
WHEREAS, the City produces groundwater from the Basin; and, WHEREAS, OCWD introduced the Producer Well Construction Loan Program (Program) to support groundwater producers in the Basin with well construction projects that would increase a producer’s Basin pumping capacity; and, WHEREAS, the City applied for the Program and was selected by OCWD to enter into the Program’s loan agreement to construct the Project.

THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:

Section 1. The City Council hereby approves the Orange County Water District Producer Well Construction Loan Program for the Lampson Well Treatment System project (CIP WT1902).

Section 2. The City Council hereby authorizes and directs the Interim City Manager to execute the Agreement for an estimated amount of $4,450,000, with the final amount to be determined upon receipt of publicly solicited bids; accept, receive, and utilize the Agreement funding on behalf of the City
PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 10th day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE }
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7623 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 10th day of March 2025.

Gloria D. Harper, City Clerk

Agenda Item F

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
FROM: Patrick Gallegos, Interim City Manager
SUBJECT: Approving a Side Letter of Agreement to the Memorandum of Understanding (MOU) between the City of Seal Beach
and the Seal Beach Police Officers Association for the July 1, 2023 through June 30, 2025 MOU Term
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7624:

1. Approving the Side Letter of Agreement to the Memorandum of Understanding between the City of Seal Beach and the Seal Beach Police Officers Association for the July 1, 2023 through June 30, 2025 MOU term; and,

2. Authorizing the Interim City Manager to execute the Side Letter of Agreement.

BACKGROUND AND ANALYSIS:

On August 12, 2024, the City Council approved a Memorandum of Understanding (MOU) between the City of Seal Beach and the Seal Beach Police Officers Association (SBPOA) for the period of July 1, 2023 through June 30, 2025.

During a subsequent review of Article XII, Section 2 of the MOU, both the City and the SBPOA identified language related to the accrual and use of floating holidays had been inadvertently deleted during the drafting process. This language was previously included in the MOU covering the July 1, 2020 to June 30, 2023 term.

Neither party intended to remove this language.

To correct this omission, SBPOA has requested, and City staff recommends, that the City Council reinstate the first paragraph of Article XII, Section 2 as originally written in the prior MOU. A Side Letter of Agreement has been prepared to formally document this correction.

STRATEGIC PLAN:

This item is not applicable to the strategic plan.

Page 2 ends

ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

LEGAL ANALYSIS:

The City Attorney has reviewed this staff report and approved it as to form.

FINANCIAL IMPACT:

There is no financial impact associated with this action because it is expected to maintain the status quo. Resolution 7555 adopted on August 12, 2024 authorized appropriations for MOU related costs.

RECOMMENDATION:

That the City Council adopt Resolution 7624:

1. Approving the Side Letter of Agreement to the Memorandum of Understanding between the City of Seal Beach and the Seal Beach Police Officers Association for the period of July 1, 2023 through June 30, 2025; and,

2. Authorizing the Interim City Manager to execute the Side Letter of Agreement.

Patrick Gallegos
Patrick Gallegos, Interim City Manager
Prepared by Jennifer Robles, Management Analyst
ATTACHMENTS:

A. Resolution 7624
B. Side Letter of Agreement between the City of Seal Beach and Seal Beach Police Officers Association
RESOLUTION 7624

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

APPROVING THE SIDE LETTER OF AGREEMENT BETWEEN

THE CITY OF SEAL BEACH AND THE SEAL BEACH POLICE

OFFICERS ASSOCIATION (SBPOA) REGARDING FLOATING
HOLIDAYS.

WHEREAS, the City of Seal Beach (“CITY”) and the Seal Beach Police Officers Association (“SBPOA”) (collectively, the “Parties”) are parties to a Memorandum of Understanding (“MOU”) that is in effect from July 1, 2023 through June 30, 2025, and governs the wages, hours, and other terms and conditions of employment of the classifications represented by the SBPOA; and, WHEREAS, Article XII, Section 2 of the MOU provides the terms for accrual and use of floating holidays for classifications represented by SBPOA; and, WHEREAS, in drafting the MOU, the Parties inadvertently deleted the first paragraph of Article XII, Section 2. The Parties have collectively agreed to a Side Letter Agreement amending the MOU to reinsert the first paragraph to Article XII, Section 2 of the MOU to correct this drafting error.

NOW, THEREFORE, THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:

Section 1. Approving the Side Letter of Agreement to the Memorandum of Understanding between the City of Seal Beach and the Seal Beach Police Officers Association for the July 1, 2023 through June 30, 2025 MOU term; and,
Section 2. Authorizing the Interim City Manager to execute the Side Letter of Agreement.

PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a regular meeting held on the 10TH day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members
Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7624 on file in the office of the City Clerk, passed, approved, and adopted by the Seal Beach City Council at a regular meeting held on the 10th of March 2025.

Gloria D. Harper, City Clerk
Side Letter of Agreement
Between the City of Seal Beach
and
The Seal Beach Police Officers Association
Regarding Floating Holidays
WHEREAS, the City of Seal Beach (“CITY”) and the Seal Beach Police Officers Association (“SBPOA”) (collectively, the “Parties”) are parties to a Memorandum of Understanding (“MOU”) that is in effect from July 1, 2023 through June 30, 2025 and governs the wages, hours, and other terms and conditions of employment of the classifications represented by the SBPOA; and,
WHEREAS, Article XII, Section 2 of the MOU provides the terms for accrual and use of floating holidays for classifications represented by SBPOA; and, WHEREAS, the in drafting the MOU, the Parties inadvertently deleted the first paragraph of Article XII, Section 2. The Parties wish to amend the MOU to reinsert the first paragraph to Article XII, Section 2 of the MOU to correct this drafting error.

NOW, THEREFORE, the Parties agree that the following shall be inserted into Article XII, Section 2 of the MOU as the first paragraph of that section:

The City will also recognize two (2) floating holidays each fiscal year. Each unit employee shall be eligible to accrue up to a maximum of two (2) floating holidays on July 1st of each year, subject to the following limitations. The floating holidays shall be taken, or may be cashed out, during the fiscal year (July 1st through June 30th) in which they are accrued. An employee may not have more than two (2) floating holidays on the books at any time. If an employee does not use, or cash out, both of his/her floating holidays within the fiscal year in which the employee accrued them, he/she will not earn two (2) additional floating holidays in the next fiscal year. Instead, the employee will only earn that number of floating holidays, on July 1st of each year that will bring the employee’s balance of floating holidays to two (2). Thus, if an employee uses, or cashes out, only one (1) floating holiday during a fiscal year, that employee will only accrue one (1) additional floating holiday on July 1st of the following fiscal year, bringing the employee’s floating holiday balance up to two (2) floating holidays. The parties encourage employees in the unit to use their floating holidays. Since floating holidays cannot be removed from an employee once earned, and the parties do not want employees to have more floating holidays on the books than would be received within the current fiscal year, a floating holiday(s) carried over at the end of the fiscal year results in the employee being unable to earn that holiday(s) in the next fiscal year.

Except as modified by this side letter, the MOU shall remain in full force and effect.

CITY OF SEAL BEACH SEAL BEACH POLICE OFFICERS

ASSOCIATION
Patrick Gallegos, Interim City Manager Corporal Ben Jaipream, President Date Date
Agenda Item G

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Barbara Arenado, Director of Finance/Treasurer
SUBJECT: Approving a Professional Services Agreement with The Pun Group, LLC for Annual Auditing Services
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7625:

2. Authorizing and directing the Interim City Manager to execute the Agreement; and,

3. Authorizing the Interim City Manager to approve additional work requests related to GASB services, in the not-to-exceed amount of $5,000 per year of the original term and for each one-year extension.

BACKGROUND AND ANALYSIS:

The City of Seal Beach undergoes an independent annual audit to ensure compliance with generally accepted auditing standards and government regulations. This process evaluates the City's financial practices, internal controls, and overall fiscal health while promoting accountability and transparency in financial reporting.

On January 13, 2025, the City issued a Request for Proposal (RFP) for professional auditing services, with a submission deadline of February 10, 2025.

Out of thirteen prospective bidders, only The Pun Group submitted a responsive bid within the required guidelines.

Page 2 ends

The Pun Group is a highly reputable firm specializing in governmental auditing and has served as the City’s independent auditor for the past eight years following a previous competitive bidding process. During this time, they have consistently delivered high-quality audits, met all deadlines, and provided year-round assistance to City staff. Their deep understanding of the City’s financial operations, internal controls, and enterprise resource planning system has led to an efficient and effective audit process. Staff have had positive experiences working with The Pun Group, citing their responsiveness, professionalism, and ability to adapt to the City's evolving financial needs.

While periodic auditor rotation can enhance independence, existing regulations mitigate this concern. California Government Code section 12410.6(b) requires Certified Public Accountant (CPA) firms to rotate the lead engagement partner every six years. Additionally, independent quality control reviews and periodic changes in the City's engagement team ensure continued objectivity. The City’s audit engagement team has already seen two different lead engagement partners over the past five years and upon this agreement will have an additional change of lead partner.

In evaluating The Pun Group’s selection, staff considered audit quality, institutional knowledge, and cost-effectiveness. Retaining a firm with established knowledge of the City’s financial structure allows for a more focused audit process, directing resources toward high-risk areas rather than re-establishing foundational understanding. The Pun Group has also demonstrated its commitment to client service by providing timely technical guidance, accommodating delays when necessary, and offering training opportunities for City staff.

Given The Pun Group’s strong track record, familiarity with the City's financial operations, and adherence to government auditing standards, staff recommends awarding a contract for audit services to The Pun Group for a three-year term, with an option to renew for two additional one-year terms. This ensures continued highquality audits, financial transparency, and an efficient audit process.

ENVIRONMENTAL IMPACT:

This action is not subject to the California Environmental Quality Act (CEQA) because it is not defined as a “project” under CEQA pursuant to Section 15378(b)(3) and (5) of the State CEQA Guidelines. Even if the Agreement is determined to be subject to CEQA, it is exempt therefrom pursuant to Section 15061(b)(3) of the State CEQA Guidelines because the proposed action falls under the general rule that CEQA only applies to actions that have the potential for causing a significant effect on the environment, and it can be seen with certainty that the Agreement will not have a significant effect on the environment.

LEGAL ANALYSIS:

The City Attorney has reviewed this staff report and resolution and approved it as to form.

Page 3 ends

FINANCIAL IMPACT:

The Pun Group fees for services to be provided are outlined in the attached proposal in the amounts of $52,140 for FY 2024-25, $54,747 for FY 2025-26, and $57,485 for FY 2027-28 for the original term. The Agreement also provides the City with the option to renew for two additional one-year terms, in the not-to-exceed amount of $60,359 for the first extension and $63,376 for the second extension. A contingency of up to $5,000 per year for audit services related to Governmental Accounting Standards Board (GASB) is also requested. There are adequate funds budgeted for the annual audit and future years’ funding will be included as appropriate.

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council adopt Resolution 7625:

2. Authorizing and directing the Interim City Manager to execute the Agreement; and,

SUBMITTED BY: NOTED AND APPROVED:

Barbara Arenado Patrick Gallegos
Barbara Arenado, Director of
Finance/Treasurer
Patrick Gallegos, Interim City Manager
ATTACHMENTS:

A. Resolution 7625
B. Agreement for Auditing Services
C. Exhibit “A” – Proposal for Auditing Services
RESOLUTION 7625

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

APPROVING AND AUTHORIZING THE CITY MANAGER TO

EXECUTE AN AGREEMENT FOR PROFESSIONAL AUDITING

SERVICES WITH THE PUN GROUP LLC
WHEREAS, the City of Seal Beach conducts an annual audit of its finances and accounts; and,
WHEREAS, the annual audit is performed by a qualified accounting firm; and, WHEREAS, pursuant to the authority provided by its City Charter and Seal Beach Municipal Code § 3.20.025(C), the City issued Request for Proposals on January 13, 2025, titled “Request for Proposal for Financial and Special Audit Services ” (“RFP”); and,
WHEREAS, the Pun Group, LLC, submitted a proposal dated February 10, 2025, to perform the audit for fiscal years 2024-2025, 2025-2026, and 2026-2027; and, WHEREAS, the City Council desires to retain the Pun Group as an independent contractor to perform the audit for those fiscal years, with the option of two additional fiscal year audits and,
WHEREAS, the Pun Group is qualified to perform the audit.

NOW, THEREFORE, THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:

Section 1. The City Council hereby approves the professional services agreement for professional auditing services with the Pun Group, LLP.

Section 2. The City Council hereby authorizes the City Manager to execute the agreement on behalf of the City.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 10th day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7625 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 10th day of March 2025.

Gloria D. Harper, City Clerk

Agenda Item H

AGENDA STAFF REPORT
DATE: March 10, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, Interim City Manager
FROM: Barbara Arenado, Director of Finance/City Treasurer SUBJECT: Fiscal Year 2024-25 Mid-Year Budget Update and Consideration of Proposed Amendment to the Fiscal Year 2024- 25 Budget
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council receive and file the Fiscal Year 2024-25 Mid-Year Budget Update and adopt Resolution 7626 to approve Budget Amendment BA #25-09-01.

BACKGROUND AND ANALYSIS:

This report provides a Mid-year Budget update (second quarter) of the City’s financial position for Fiscal Year (FY) 2024-25. To develop the mid-year update, the Finance Department meets with City departments to gather revenue projections, reviews and analyzes data with the City’s consultants, and evaluates the potential fiscal impacts. Preparing for an uncertain future requires consideration of a wide range of factors, including direct and indirect influences on the City. This report represents the City’s best estimates based on the most current information. The FY 2024-25 Mid-Year Budget Update Summary (Attachment B) is based on actuals from July 1, 2024 through December 31, 2024.

The economy is experiencing volatility, continued elevated inflation, and uncertainty in US economic policy, impacting local financial conditions. Recent federal policy developments may significantly impact the local economy and the budget. It is too early to determine the year-end impact of federal actions and it is imperative City staff continue to monitor closely. In Seal Beach, sales tax revenue is trending lower than budget projections, adding to fiscal pressures. With expenditures consistently outpacing revenues and no one-time revenues to offset the gap, the City anticipates additional budgetary constraints. However, the City continues to remain within budget while actively filling vacant positions in the Police Department and funding safety services, ensuring overall safety, mobility and quality of life for the City. The City remains committed to responsible fiscal management and closely monitors economic trends and financial impacts.

Page 2 ends

General Fund revenues recorded through December 2024 were reviewed in the context of FY 2023-2024 actual results, performance to date, and historical budget average. Property tax continues to be a consistent revenue source and is estimated to meet budget expectations. Sales tax performance has declined and the City’s sales tax consultant, HdL, has reduced revenues and flattened projections. Typically, an adjustment would be included but due to the anticipated revenue from the recently passed Measure GG, growth in revenues in this category would offset current declines. Utility Users Tax (UUT) and Transient Occupancy Tax (TOT) continue to outperform pre-pandemic levels. Further information is included in the Mid-Year Budget Update Summary, (Attachment B).

As of the second quarter, General Fund non-personnel expenditures (maintenance and operations) align with historical trends through mid-year. The City is preparing for negotiations with the bargaining units and further adjustments may be necessary in the FY 2025-26 Budget. When those updates are available, staff will bring forth to the City Council for approval. The Mid-Year Report also documents immediate demands that were not included in the FY 2024-25 Budget. Through Strategic Planning and the previous budget process, the City Council gave direction to City Staff to allocate Revitalization funds to several different priority projects. City staff have completed projects such as the additional payment to CalPERS to reduce the pension liability as well as Polling for Measure GG.

Projects and emergency needs have arisen and are outlined below and provided in the Budget Amendment Detail Report (Attachment C).

Lifeguard Headquarter (LGHQ) Fiber/Phone Connectivity
Previously, LGHQ experienced communication connectivity issues, prompting the Council to allocate $400,000 for the extension of fiber infrastructure to the facility.

Of this amount, $28,920 was spent on design plans. With the funding already allocated for a permanent LGHQ/Police Substation replacement and the temporary communication enhancements performing satisfactorily, it is recommended to reallocate the remaining $371,080 toward other necessary improvements. The design plans will be incorporated into the overall LGHQ/Police Substation replacement design.

LGHQ and Police Substation Repair
A reallocation of $100,000 is proposed, as funding for the permanent LGHQ/Police Substation replacement has been assigned.

West End Pump Station
The West End Pump Station, constructed in 1955, is a critical drainage facility for the southern portion of the City. Continuous improvement investments are necessary for the facility's operation. The original budget included $700,000 for improvements, and the first phase has been completed. It is recommended to reduce the allocation by $245,000, leaving a revised budget of $455,000 to initiate the next phase of stormwater conveyance improvements, while addressing other urgent unfunded priorities.

Page 3 ends

Fleet Management
An initial $350,000 was allocated to modernize the City’s Fleet Management Plan and potentially purchase the City’s leased fleet to align with the City's fleet practices. A total of $278,814.10 has been expended. In alignment with the Fleet Management Plan, it is recommended to increase the budget by $54,814.10 from reallocated funds to replace the existing backhoe that is beyond its serviceable life.

This equipment is crucial for construction, excavation, operations, and maintenance, where its failure would severely impact the City’s emergency response capabilities.

Lifeguard Jet Skis
On February 10, 2025, the City Council approved the emergency purchase of two (2) Personal Watercraft (PWC) and was previously recorded in the Fleet Management Plan. The total amount of $43,374 will be memorialized in the Revitalization Funds and includes two (2) rescue sleds and two (2) sand trailers.

PWCs are essential to the Marine Safety Department’s operations, particularly during the winter months when staffing is limited and the need for rapid response is at its highest. Lifeguards rely on these units for quick and effective rescues, and the safety and success of these operations depend on the reliable performance of the PWC.

OCTA Grant
The City applied for and received an Orange County Transportation Authority (OCTA) grant to install a hydrodynamic trash separator, which will improve stormwater conveyance and water quality. An initial allocation of $150,000 was made for the grant application process. An additional $80,000 is now requested for design expenditures and to meet the 20 percent matching fund requirement as stipulated by the grant.

A correction of $33,030 is requested to align expenditures that were previously coded to a different revitalization account.

Operational Assessment
An additional $50,000 to a total of $150,000 is requested for the compensation studies, as outlined in the Memorandum of Understanding, to support commitments made during bargaining. This funding is also essential for conducting good-faith deliberations in the upcoming negotiations. Additionally, cost studies will aid the City in making informed fiscal decisions regarding workforce placement.

Citywide IT Master Plan
An additional $10,000 is adjusted for the Citywide Infrastructure Technology (IT) Master Plan. The IT Master Plan is a critical component necessary to understand and evaluate the current state of IT citywide and plan for the future in a methodical manner. Staff issued a request for proposals and received 14 responses. At the time of this staff report, proposals have been evaluated, and a limited number of respondents have been selected to interview. Based on cost proposals received, staff believes an additional $10,000 will be needed to support the IT Master Plan.

Page 4 ends

Final costs will be determined once a vendor has been selected, at which time the contract will be provided to the City Council for approval.

PD Generator AS Bypass
The Police Department Headquarters (PDHQ) serves as a critical 24-hour facility and the West Cities Police Communications dispatch center for the Cities of Cypress, Los Alamitos, and Seal Beach. PDHQ also functions as the City’s Emergency Operations Center. In the event of a power failure, back-up power must be readily available. While PDHQ has an adequately sized generator, it lacks an automatic transfer switch (ATS) with bypass. Staff recommends allocating $100,000 to install the ATS bypass, ensuring a seamless power transfer during outages.

Lifeguard 800 MHz Radio/Aerial Vehicle
A request of $40,000 is made to replace two (2) handheld 800 MHz radios and add two (2) additional handheld 800 MHz radios to inventory, ensuring improved Lifeguard radio interoperability within the City and enhanced connectivity with local partners. Additionally, $5,000 is included to replace the aging aerial vehicle (drone). Over the past decade, aerial vehicle technology has advanced significantly, and the drone will be equipped with FLIR (thermal imaging) technology and an onboard speaker for live public address. These upgrades will improve operational efficiency and communication capabilities.

Emergency Vehicles
The expenditure of $220,000 is included of which $164,955 is included from Revitalization Funds and $57,045 from General Fund Insurance proceeds to purchase two (2) fully pursuit-rated patrol vehicles and one (1) Lifeguard truck used for emergency response and calls for service. The necessity for this emergency purchase is due to the need to replace safety response vehicles that have reached the end of their serviceable life or are no longer in service.

Labor Group Negotiations
During negotiations, certain bargaining groups were granted $4,000, while others received $2,000. The additional total of $117,682 ensures that the City remains in alignment with all bargaining groups and the one-time non-PERSable payment of $2,000 is for current, represented Orange County Employee Association (OCEA), Mid-Management and Confidential Employees Association (MMCEA) and the Seal Beach Supervisors and Professionals Association (SBSPA). The Revitalization Funds were originally sourced from American Rescue Plan Act (ARPA) funds, with one of the guiding principles being to compensate government employees who served during the pandemic. This funding increase aligns with those goals.

Regulatory and Service Fee Study
As part of the City’s revitalization efforts, an ongoing review of revenue sources is vital to maintaining financial stability while fostering a thriving local business environment. $50,000 is requested for a regulatory and service fee study to ensure that the City’s fee structure remains fair, competitive, and aligned with the costs of providing services. Many neighboring cities periodically review and adjust their

Page 5 ends

regulatory fees to reflect economic changes, inflation, and evolving business needs. Seal Beach has not conducted a comprehensive fee study, which may result in outdated fees that either overburden small businesses or fail to generate sufficient revenue to support essential City services. A study would provide datadriven insights to help the City establish an equitable fee structure that supports both economic growth and long-term sustainability.

Public Works Permit Fund
Due to fund updates, anticipated revenues have been included in the current budget; however, expenditures were still being outlined in development. As we prepare for mid-year adjustments, the addition of $305,000 to the Public Works Permit – Expenditures account to correct an omission from last year’s budget preparation. Increasing this expenditure account by $305,000 will align with the corresponding revenue account, ensuring budgetary consistency and proper fund allocation.

Fire Fuel Modification and Vegetation Management
In response to fuel modification recommendations, tree trimming and vegetation removal work has been completed. The associated costs were expensed from the Landscape Maintenance account. Staff is recommending allocating $40,000 from General Fund balance to this account to ensure that proper landscape maintenance continues throughout the remainder of the fiscal year.

Global Payment Fee Structure
The credit card fee for proprietary funds was not included in the current year's budget and will need to be addressed in the mid-year adjustment. Going forward, this fee will be included in future budgets. To ensure proper tracking and coverage of these expenditures, $348,000 is included in the mid-year update for this purpose.

McGaugh Gym/Pool
The City has a joint-use agreement with the Los Alamitos Unified School District (LAUSD) for the McGaugh Elementary School pool and gym. As part of this agreement, both the City and LAUSD share responsibility for costs related to repairs and improvements. A recommended allocation of $197,500 is requested from the General Fund for the recent unanticipated roofing repairs and upcoming pool screening.

Staffing Correction – Community Services

Page 83 ends

Services. The fourth line item, Senior Recreation Specialist (Part-Time) was labeled mistakenly, and should have been labeled Recreation Coordinator (PartTime). No adjustments to staffing levels or fiscal changes are being requested.

ENVIRONMENTAL IMPACT:

There is no environmental impact related to this item.

Page 6 ends

LEGAL ANALYSIS:

The City Attorney has reviewed and approved as to form.

FINANCIAL IMPACT:

The recommended budget adjustments are included above in the Budget Amendment Detail Report (Attachment C).

STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

RECOMMENDATION:

That the City Council receive and file the Fiscal Year 2024-25 Mid-Year Budget Update and adopt Resolution 7626 to approve Budget Amendment BA #25-09-01.

SUBMITTED BY: NOTED AND APPROVED:

Barbara Arenado Patrick Gallegos
Barbara Arenado, Director of
Finance
Patrick Gallegos, Interim City Manager
ATTACHMENTS:

A. Resolution 7626
B. Mid-Year Budget Update Summary
C. Budget Amendment Detail Report BA #25-09-01
RESOLUTION 7626

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL APPROVING
FISCAL YEAR 2024-2025 MID-YEAR BUDGET AMENDMENT
BA #25-09-01
WHEREAS, on May 14, 2024, May 15, 2024 and May 20, 2024, the City Council conducted budget workshops to provide an opportunity to the public to comment on the Proposed Fiscal Year 2024-25 Operating and Capital Improvement Program Budget; and,
WHEREAS, on June 24, 2024, the City Council unanimously approved Resolution 7540, adopting the City’s Fiscal Year 2024-2025 Budget; and, WHEREAS, on March 10, 2025, the Mid-Year Budget Review was presented to City Council; and,
WHEREAS, unforeseen situations and conditions, including changes in operations or funds received, since the City Council’s adoption of the Fiscal Year 2024-2025 Budget have brought about the need to amend certain items within the budget.

NOW, THEREFORE, THE SEAL BEACH CITY COUNCIL DOES HEREBY RESOLVE:

Section 1. The City Council hereby approves Budget Amendment BA 25-09-01 to modify the Fiscal Year 2024-2025 Budget.

PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a regular meeting held on the 10th day of March 2025 by the following vote:

AYES: Council Members
NOES: Council Members
ABSENT: Council Members
ABSTAIN: Council Members

Lisa Landau, Mayor
ATTEST:

Gloria D. Harper, City Clerk
STATE OF CALIFORNIA }
COUNTY OF ORANGE } SS
CITY OF SEAL BEACH }
I, Gloria D. Harper, City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution 7626 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 10th day of March 2025.

Gloria D. Harper, City Clerk
1 | P a g e

MID-YEAR BUDGET UPDATE
July - December 2024
The Mid-Year Budget Update for Fiscal Year (FY) 2024-25 provides an analysis of General Fund revenues and expenditures based on July 1, 2024, through December 31, 2024, actuals with a comparison to prior year.

SUMMARY
The development of the FY 2024-25 Mid-Year Budget Update includes analysis of financial activity from July 1, 2024, through December 31, 2024. This report includes six months of the fiscal year. The City ended the prior fiscal year in a positive financial position mostly due to one-time payments received and savings due to the freezing of positions in anticipation of future budget deficits and Measure GG.

During the second quarter of FY 2024-25, City programs and services have resumed to full operations.

Mid-year assessments indicate that General Fund revenue projections are generally in line with the budget. Property Tax remains a reliable revenue source and is expected to meet budget expectations.

Sales and Use Tax are seeing declines from the prior year but it is anticipated that the voter approved Measure GG funds will offset the decline to keep the City at budgeted projections. Revenue projections from the City’s sales tax consultant, HdL, have been reduced for this year and lowering projections for SOURCES ADOPTED BUDGET YTD-ACTUAL % ADOPTED BUDGET YTD-ACTUAL % 01-PROPERTY TAXES 14,797,300 6,084,746 41% 15,390,000 5,539,754 36% 02-SALES AND USE TAXES 11,307,000 3,811,888 34% 11,891,183 3,488,369 29% 03-UTILITY USERS TAX 4,500,000 2,325,571 52% 5,100,000 2,308,720 45% 04-TRANSIENT OCCUPANCY TAX 1,600,000 533,289 33% 1,850,000 557,768 30% 05-FRANCHISE FEES 1,090,000 230,613 21% 1,108,000 237,016 21% 06-OTHER TAXES 850,800 728,714 86% 829,800 616,830 74%
07-LICENSES AND PERMITS 859,000 534,698 62% 872,000 592,155 68% 08-INTERGOVERNMENTAL 146,000 36,199 25% 173,800 27,772 16% 09-CHARGES FOR SERVICES 3,276,600 1,684,944 51% 3,114,700 1,705,851 55% 10-FINES AND FORFEITURES 2,005,100 625,981 31% 1,598,800 617,152 39% 11-USE OF MONEY AND PROPERTY 704,000 197,647 28% 750,000 635,596 85% 13-OTHER REVENUES 94,200 310,733 330% 85,600 272,221 318% TOTAL OPERATING REVENUE 41,230,000 17,105,022 41% 42,763,883 16,599,204 39% 14-TRANSFERS IN 924,700 - 0% 1,220,781 - 0%
TOTAL REVENUES & SOURCES 42,154,700 17,105,022 41% 43,984,664 16,599,204 38%

USES, BY TYPE
01-REGULAR SALARIES 10,044,256 4,462,556 44% 10,269,416 4,873,918 47% 02-OTHER PAY AND BENEFITS 4,874,982 2,149,903 44% 4,780,729 2,416,169 51% 03-RETIREMENT 4,959,523 3,812,827 77% 5,608,884 4,565,247 81% 04-MAINTENANCE AND OPERATIONS 20,127,015 10,881,495 54% 21,324,656 10,901,969 51% 05-CAPITAL OUTLAY 10,000 10,000 100% - -
06-DEBT EXPENSE 91,807 45,905 50% 91,811 - 0%
TOTAL OPERATING EXPENDITURES 40,107,583 21,362,686 53% 42,075,496 22,757,303 54% 07-TRANSFERS OUT 15,330,789 1,022,393 7% 12,253,396 (141,226) -1% TOTAL EXPENDITURES & USES 55,438,372 22,385,079 40% 54,328,892 22,616,077 42% FY 2023-2024 FY 2024-2025
General Fund Summary
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next year. Recent federal policy developments may significantly impact the local economy and the budget projections. It’s too early to determine the year-end impact of federal actions and its imperative City staff continue to monitor closely. Utility Users Tax (UUT) and Transient Occupancy Tax (TOT) continue to exceed budget expectations.

During this period, revenues accounted for approximately 38 percent of the adopted budget, slightly lower than previous years. It's important to note that the majority of revenues are typically received in the latter half of the fiscal year and the timing of payments will impact mid-year estimates. Fluctuations and unforeseen events may still arise due to external factors such as labor shortages, inventory constraints, emergencies, and ongoing uncertainty in US economic policy. Departments are monitoring expenditures closely to ensure they remain within budget and any further adjustments will be brought forth to Council.

PROPERTY TAX revenues have increased compared to the same period in the prior fiscal year due to the timing of payments, but it is anticipated to have slight growth throughout the fiscal year. The growth is primarily due to the overall sales and market value increases that helped add value to the City’s assessed valuations. The City’s Assessed Valuation, as released by the Orange County Assessor, is $7.3 billion, an increase of 6.4 percent from the prior year. Median home price during this period was $1.5 million.

Although there was an increase in median price from the previous time last year, there were fewer sales transactions than the previous year which will be reflected in the additive FY 2025-26 tax roll reducing year of year growth. Residential property tax payments are largely received by the City in the months of December and April. Property tax provides 35 percent of annual budgeted General Fund operating revenues and remains on budget.

SALES TAX is collected by the State and advanced to the City monthly with funds distributed two months following the period the revenue is earned. According to HdL, the City’s tax consultant, the City’s gross receipts from July – September 2024 were 21 % below the third sales period in 2023. However, after adjusting for reporting modifications such as audit adjustments and delayed payments, actual sales were down 4.6%. Results varied by tax group. While most general retail categories trended down (similar to statewide trends), a new home furnishing business in town boosted the overall results. The businessindustrial group transactions improved due to some one-time allocations; and the comparative autosREVENUES 3 | P a g e

MID-YEAR UPDATE
transportation returns grew due to a low allocation a year ago. Building-construction purchases also edged higher.

Conversely, declines in casual and fast casual dining offset a slight gain in quick service receipts, contributing to an overall 2.7% drop in restaurant-hotel revenues. The City’s allocation from the countywide use-tax pool fell 14%, driven by a slight decrease in the City’s pool share and waning third party auto sales. The price of crude oil dropped during the period and directly affected fuel-service station receipts – with revenues sliding 15.4%.

Net of adjustments, taxable sales for all of Orange County declined 2.3% over the comparable time period; the Southern California region was down 2.3%.

Source: HdL, Sales and Use Tax
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UTILITY USERS TAX (UUT) is 11.6 percent of the FY 2024-25 Budget. UUT is charged to customers of electric, natural gas, telecommunications and pre-paid wireless. Revenues in this category are impacted by consumption levels and have experienced strong growth from prior periods due to return to work, increases in utilities, and businesses fully operational.

Year end is expected to be at budget or slightly positive. The City is seeing continued moderate growth in UTT, mostly due to rate increases in electric. Bundling of data and voice/text in cellphone plans continues to negatively impact wireless revenues and migration of landlines to cellular continues to negatively impact wired revenues. However, increases in rates will continue to impact customers.

CHARGES FOR SERVICES are 7.1 percent of the FY 2024-25 Budget. Charges for services are used to recover costs of programs for specific end users. Programs provided through Community Services are typically subsidized by the General Fund to encourage participation. Leisure Program Fees and Tennis Center revenue are trending higher than budget the first half of the year. Charges for services are anticipated to 5 | P a g e

MID-YEAR UPDATE
be slightly higher than budget due to these factors. A substantial portion of Charges for Services is for Refuse Services and the spike in August is due to timing in payments received.

FINES & FORFEITURES are primarily parking revenue and are 3.6 percent of the FY 2024-25 Budget. Staff are anticipating a slight reduction in vehicle code violations due to greater compliance. Fines and forfeitures in the City of Seal Beach budget represent revenue collected from penalties imposed for violations of local laws, ordinances, and regulations. These include traffic citations, parking fines, code enforcement penalties, and other municipal violations. Additionally, forfeitures may include assets seized in legal proceedings or funds from unclaimed property. This revenue source helps offset costs associated with public safety, law enforcement, and municipal court operations, with the goal of promoting compliance with local regulations.

TRANSIENT OCCUPANCY TAX accounts for 4.2 percent of the General Fund. Due to the impacts of COVID19 that began in the second half of FY 2019-20, the hotel industry reported its lowest occupancy rates since 2007. Year-to-date through December, TOT revenue is anticipated to be right at budget compared 6 | P a g e

MID-YEAR UPDATE
to the prior year. The City’s three hotels are performing at the same expectations as the prior year as our hotels are at capacity. This revenue source is volatile and is strongly correlated with economic impacts.

FRANCHISE FEES are imposed on various public utilities and account for 2.5 percent of the General Fund.

The franchise grants the public utilities the right to use public property for system infrastructure such as lines and pipes. It also grants exclusive rights to provide cable television within the City. Revenues are typically received in the later part of the fiscal year, with the largest payment from Electric in April.

Franchise fees remain relatively stable.
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MID-YEAR UPDATE
OTHER REVENUE is made up of a variety of relatively small revenue categories including Licenses and Permits, Intergovernmental, Use of money and Property, and Miscellaneous Public Safety Revenues.

Other revenue includes one-time payments that the City may receive. Staff anticipates other revenue will meet budget projections and fluctuations are due to timing of receipts. 8 | P a g e

MID-YEAR UPDATE
REGULAR SALARIES in the first half of the year were trending at budget as nearly all positions throughout the City have been filled except those positions frozen to meet the adopted budget goals.

OTHER PAY & BENEFITS include part-time salaries, medical benefits, insurance, the City’s health and wellness program, tuition reimbursement, employee benefits and overtime. Medical Benefits, Insurance, part-time salaries, and overtime comprise most of this category. Expenditures are anticipated to be higher than budget due to benefits and insurance costs increasing. Overtime is well monitored in the City but fluctuates based on unanticipated events and emergencies. During the first half of the fiscal year, overtime was lower than budget projections as many scheduled events occur in the summer.

RETIREMENT The City offers a defined benefit plan through California Employees’ Public Retirement System (CalPERS) to manage the pension and health benefits. CalPERS is the largest pension fund in the

EXPENDITURES
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nation offering benefits to 1.6 million public employees, retirees, and their families. The FY 202-25 budget includes the required increases estimated by CalPERS to pay down the unfunded actuarial liabilities of all plans. Funding for these payments is included in the City’s operating budget, spread across several funds, including the General Fund. The City’s unfunded liabilities and the payments required to pay off those liabilities are calculated by CalPERS’ actuarial staff. These calculations are made annually and can change the amount of the City’s unfunded liabilities based on a number of factors, including variances from expected results relative to investment returns and employee demographics, as well as any changes in the assumptions that CalPERS uses to make their calculations.

Over the last couple of years, CalPERS has phased in the reduction in their investment return assumption, taking it from 7.5 percent to 6.8 percent. This change and CalPERS negative returns on investments has resulted in significant increases in the City’s unfunded liabilities in recent years, in spite of the fact that the City has been making its required payments on its unfunded liabilities. This change in investment return assumptions is also a primary factor in the projected increases in future contributions that will be required to pay off the City’s unfunded pension liabilities. These increases will hinder the City’s ability to fund other services. The California Public Employees’ Pension Reform Act (PEPRA) of 2013 became effective on January 1, 2013. PEPRA primarily affects new members. PEPRA’s primary areas of impact concern limiting benefit formulas, increasing the time of final average compensation period, pensionable compensation, setting a salary cap and increasing the employees’ retirement contributions.

Termination of the City’s contract with CalPERS would require the payment of a termination fee to guarantee the payment of pension obligations that have already accrued. This fee would be several times the current unfunded pension liability. The City prepays the unfunded liability portion at the beginning of the fiscal year for substantial savings.

Maintenance and Operations The City engages in contracts with vendors to avail various services, including specialized consulting, legal, financial, landscape and facility maintenance, and program support, on a contractual basis. Maintenance and Operations constitute 47 percent of the overall General Fund Budget for FY 2024-25. The primary General Fund M&O expenditures for FY 2024-25 include $7.1 million for Fire Contract services (which accounts for 34 percent of M&O), $1.4 million for Refuse, $2.9 million 10 | P a g e

MID-YEAR UPDATE
for General Liability, Property Insurance, and Workers Compensation, $1.0 million for West-Comm Contract services, and $1.3 million for Street Maintenance Contracts. Increases in contract costs are mainly attributed to State-mandated prevailing and/or minimum wage hikes, alongside the integration of additional City infrastructure and/or emergency repairs (such as streets, trees, community centers, signalized intersections, etc.). The spike in December is due to timing of payments for insurance. A request for an increase of $40,000 is included in the Mid-year for fire fuel modification and vegetation ensuring fire risk reduction and brush clearing. Additionally, $197,500 is included for an unanticipated payment for McGaugh Gym for repairs and screen upgrades.

BA 25-09-01 ATTACHMENT C
Description Project
No. Adopted Budget Adjustment Modification Revised Budget Revitalization Fund
301-500-0333-55000 LG/Fiber/Phone Connectivity BG2401 $ 400,000.00 $ (371,080.00) $ 28,920.00 Project complete 301-500-0333-55000 LG/Substation Repair BG2401 $ 100,000.00 $ (100,000.00) $ - Reallocate balance 301-500-0333-55000 West End Pump Station BG2401 $ 700,000.00 $ (245,000.00) $ 455,000.00 Reallocate for backhoe/personnel 301-500-0333-55000 Fleet Management BG2401 $ 350,000.00 $ (34,973.99) $ 54,814.10 $ 404,814.10 Reallocated emergency backhoe 301-500-0333-55000 OCTA Grant (ECP Project X) BG2401 $ 150,000.00 $ (33,030.00) $ 80,000.00 $ 230,000.00 Matching grant and correcting entry 301-500-0333-55000 Operational Assessment BG2401 $ 100,000.00 $ 33,030.00 $ 50,000.00 $ 150,000.00 Class & Comp per MOUs correcting entry 301-500-0333-55000 Grant writing BG2401 $ 150,000.00 $ 150,000.00 Approved Grant Writing/Advocacy 301-500-0333-55000 Citywide IT Master Plan BG2401 $ 75,000.00 $ 10,000.00 $ 85,000.00 IT Assessment 301-500-0333-55000 License Plate Reader BG2401 $ 325,000.00 $ - $ 325,000.00 Approved License Plate Reader Program 301-500-0333-55000 Personnel Expenditure BG2401 $ 254.54 $ 254.54 Project staff allocation time 301-500-0333-55000 CDTFA Fees BG2401 $ 230,000.00 $ - $ 230,000.00 Approved Transaction Tax CDTFA Fee 301-500-0333-55000 PD Generator Bypass BG2401 $ 100,000.00 $ 100,000.00 Emergency continued operations bypass 301-500-0333-55000 Lifeguard 800MHz/Aerial Vehicle BG2401 $ 45,000.00 $ 45,000.00 Emergency Radios/Drone 301-500-0333-55000 PD/LG Emergency Vehicles BG2401 $ 164,955.00 $ 164,955.00 2 Police/1 Lifeguard Emergency Vehicles 301-500-0333-55000 Lifeguard Jet ski BG2401 $ 43,374.00 $ 43,374.00 Approved Emergency Jet Skis 301-500-0333-55000 Personnel MOU Allocation BG2401 $ 117,682.00 $ 117,682.00 Personnel equity allocation 301-500-0333-55000 Business License Study BG2401 $ 50,000 $ 50,000 Review of equitable fee structure Special Fund/General Fund
103-500-0242-51305 Public Works Permit Fund $ 305,000 $ 305,000 Align expenditure account with revenues 501-500-0900-52200 Water Special Departmental $ 348,000 $ 348,000 Payment Portal 601-500-0980-51275 PD/LG Emergency Vehicles $ 57,045.00 $ 57,045.00 Insurance portion 601-000-0000-42900 PD/LG Emergency Vehicles $ 57,045.00 $ 57,045.00 Insurance portion 101-150-0080-59200 PD/LG Emergency Vehicles $ 57,045.00 $ 57,045.00 Insurance portion 101-500-0049-51280 Fire Fuel Modification/Vegetation $ 484,300 $ 40,000 $ 524,300 Fire risk reduction and brush clearing 101-500-0052-51290 McGaugh Gym/Cost Share/Screen $ 16,000.00 $ 197,500.00 $ 213,500.00 LAUSD cost sharing repairs Budget Amendment:
1 FISCAL YEAR
2024-25
Mid-Year Budget
FY 2024-25 Mid-Year General Fund Update
2 FISCAL YEAR 2024-25
Mid-Year Budget Update
FY 2024-25 General Fund
3 Property Tax
Sales Tax
Utility Users Tax
Charges for Services
Fines & Forfeitures
Hotel Tax (TOT)
74%
89%
Property Tax,
$15.4 M, 35%
Sales and Use
Tax, $11.9 M,
27%
Utility Users Tax,
$5.1 M, 12%
Charges for Services,
$3.1 M, 7%
Fines and Forfeitures,
$1.6 M, 4%
Transient Occupancy Tax,
$1.9 M, 4%
Other Revenue, $5. M,
11%
FISCAL YEAR 2024-25
Mid-Year Budget Update
Property Tax
Seal Beach Assessed Valuation
• $7.6 Billion Orange County Assessor
• 6,494 Parcels
• 5.01% change from FY 2023-24/County 5.41%
• Median Single-Family Home Sales $1.6 M
• Property Tax $15.4 M
• 35% of General Fund
• Stable Revenue Source
• .15 of $1.00
• On Budget
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Sales Tax
Sales Tax Components $11.9 M:
• Largest Consumer Goods and Restaurants
• 3Q24 Seal Beach down -4.6%
• Receipts under from the same time as last year
• Lower Restaurants, Hotels, Count Pool, Food and
Drugs, Fuel
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Utility Users Tax (UUT)
UUT $5.1 M Budget 12%:
• Electric, Natural Gas, Telecommunications
• Lowered in 2014
• General Government
• On Budget
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Charges for Services
Charges for Services 7.1% $3.1 M:
• A fee collected to pay for services
related to the activity.
• Subsidized by General Fund
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Fines and Forfeitures
• Municipal Code Violations
• Vehicle Code Violations
• Unclaimed Property
• Parking Citation Revenue
Reduction
• No Animal Control Citations –
Warnings
• Unanticipated Increase in Animal
Control Calls
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Transient Occupancy Tax (TOT)
TOT $1.6 M:
• 3 Hotels
• The Pacific Inn
• Ayres
• Hampton
• Continues to exceed all historic levels
• 46 Short Term Rentals
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
FY 2024-25 General Fund Expenditures
10 Regular Salaries,
$10.3 M, 23%
Retirement , $5.6 M,
13%
Other Pay &
Benefits, $4.8 M,
11%
Maintenance &
Operations, $23.3 M,
53%
FISCAL YEAR 2024-25

PROPOSED BUDGET
FY 2024-25 Mid-Year General Fund Update
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
USES, BY TYPE ADOPTED BUDGET YTD-ACTUAL % ADOPTED BUDGET YTD-ACTUAL % 01-REGULAR SALARIES 10,044,256 4,462,556 44% 10,269,416 4,873,918 47% 02-OTHER PAY AND BENEFITS 4,874,982 2,149,903 44% 4,780,729 2,416,169 51% 03-RETIREMENT 4,959,523 3,812,827 77% 5,608,884 4,565,247 81% 04-MAINTENANCE AND OPERATIONS 20,127,015 10,881,495 54% 21,324,656 10,901,969 51% 05-CAPITAL OUTLAY 10,000 10,000 100% - -
06-DEBT EXPENSE 91,807 45,905 50% 91,811 - 0%
TOTAL OPERATING EXPENDITURES 40,107,583 21,362,686 53% 42,075,496 22,757,303 54% 07-TRANSFERS OUT 15,330,789 1,022,393 7% 12,253,396 (141,226) -1% TOTAL EXPENDITURES & USES 55,438,372 22,385,079 40% 54,328,892 22,616,077 42% FY 2023-2024 FY 2024-2025
Maintenance and Operations
• Fire Services
• West Comm
• Legal Services
• Contract Services, Training,
Supplies under budget
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
CC Discretionary,

0.05m, 0% Supplies/Dues/Training,

0.26m, 1%
Rental/Lease
Equipment, 0.13m,
1%
Contract
Professional, 4.20m,
20%
Fire Services,

7.10m, 33%
West Comm,

0.96m, 5%
Insurance/Workers
Comp, 2.81m, 13%
Legal, 0.58m, 3%
Maintenance,

0.21m, 1%
Equipment, Materials,
other, 2.65m, 12%
IT Services, 1.17m,
5%
Refuse, 1.30m, 6%
Salaries and Benefits
• Most Positions Filled Compared to
last year
• Remaining on Budget
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Seal Beach Revitalization Plan
Payment To CalPERS

COMPLETE
Lifeguard HQ
Connectivity Complete
Radios/Aerial Vehicle
Jet Skis and Upfitting
License Plate Reader
& Emergency Bypass
CDTFA Measure GG
City Fleet
Fleet Feasibility – Complete
Two Police Cars – Emergency Backhoe – Lifeguard Truck
Grant Writing &
IT Assessment
Revenue Opportunities
Business License Survey
Operational Assessment/Class
and Comp
Personnel Equity
Grant Assistance
OCTA Grant and Matching Funds
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE
Mid-Year Updates
15 FISCAL YEAR 2024-25
Mid-Year Budget Update
Public Works Permit Fund
Water Portal Special Departmental
Insurance Proceeds Vehicle Purchases
Fire Risk Reduction and Brush Cleaning
McGaugh Gym Cost Sharing
Next Steps
• Start Planning Now
• Look for Alternative Funding Options and
Seek New Revenue Opportunities
• Budget Development
• March 24 – Budget Study Session
• May 6 and 8 – Public Budget Workshops
Jan Feb Mar Apr May June
Revenue and Expense Projections
Personnel Budget Development
Departmental Budget Preparation
Department CIP Preparation
City Manager Review
Preliminary Budget Preparation
Public Input and Engagement
City Council Review
Budget Adoption
Budget Development Timeline
Fiscal Outlook
• High inflation/Interest Rates?
• US Economic Policy
• Unemployment low/high?
• Reductions in Revenues
• Expenditures Outpacing
Revenues
FISCAL YEAR 2024-25

MID-YEAR BUDGET UPDATE

18 FISCAL YEAR
2024-25
Mid-Year Budget

Seal Beach City CouncilMarch 10, 2025

Seal Beach City Council
March 10, 2025