Agenda packet — Seal Beach City Council, August 11, 2025 (part 3 of 3)

Includes copyrighted material of Insurance Services Office, Inc., with its permission.

POLICY #: TC2J - CAP - 8EO86819 ( AOS), TJ -BAP -8E086820 Attachment Code: D522094 Certificate ID: 19405943

COMMERCIAL AUTO
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

BLANKET ADDITIONAL INSURED - PRIMARY AND

NON- CONTRIBUTORY WITH OTHER INSURANCE
This endorsement modifies insurance provided under the following:

BUSINESS AUTO COVERAGE FORM

PROVISIONS
1 The following is added to Paragraph A.1. c., Who Is
An Insured, of SECTION II - COVERED AUTOS
LIABILITY COVERAGE:

This includes any person or organization who you
are required under a written contract or agreement
between you and that person or organization, that
is signed by you before the " bodily injury" or
property damage" occurs and that is in effect
during the policy period, to name as an additional
insured for Covered Autos Liability Coverage, but
only for damages to which this insurance applies
and only to the extent of that person' s or
organization' s liability for the conduct of another
insured".

2. The following is added to Paragraph B. 5., Other
Insurance of SECTION IV - BUSINESS AUTO
CONDITIONS:

Regardless of the provisions of paragraph a. and
paragraph d. of this part 5. Other Insurance, this
insurance is primary to and non- contributory with
applicable other insurance under which an
additional insured person or organization is the first
named insured when the written contract or
agreement between you and that person or
organization, that is signed by you before the
bodily
injury" or " property damage" occurs and that is in
effect during the policy period, requires this
CA T4 74 02 16 © 2016 The Travelers Indemnity Company. All rights reserved. Page 1 of 1 Includes copyrighted material of Insurance Services Office, Inc. with its permission.

Attachment Code: D522252 Certificate ID: 19405943
Notification to Others of Cancellation
Policy No. Eff. Date of Pol. Exp. Date of Pol. Eff. Date of End. Producer No. AWL Prem Return Prem. 47 - GLO- 307584 5/ 1/ 2023 5/ 1/ 2024
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

This endorsement modifies insurance provided under the:

Commercial General Liability Coverage Part
Liquor Liability Coverage Part
Products/Completed Operations Liability Coverage Part
A. If we cancel this Coverage Part( s) by written notice to the first Named Insured for any reason other than nonpayment of premium, we will mail or deliver a copy of such written notice of cancellation:

1. To the name and address corresponding to each person or organization shown in the Schedule below; and

2. At least 10 days prior to the effective date of the cancellation, as advised in our notice to the first Named Insured, or the longer number of days notice if indicated in the Schedule below.

B. If we cancel this Coverage Part( s) by written notice to the first Named Insured for nonpayment of premium, we will mail or deliver a copy of such written notice of cancellation to the name and address corresponding to each person or organization shown in the Schedule below at least 10 days prior to the effective date of such cancellation.

C. If notice as described in Paragraphs A. or B. of this endorsement is mailed, proof of mailing will be sufficient proof of such notice.

SCHEDULE
Name and Address of Other Person( s) / Organization( s):

Number of
Days Notice:

Those persons and organizations as stated in a certificate of 30 Insurance, on file with the insurer, as of the date of
Cancellation.

All other terms and conditions of this policy remain unchanged.

Includes copyrighted material of Insurance Services Office, Inc., with its permission.

Attachment Code: D522107 Certificate ID: 19405943
POLICY NUMBER: TC2J - CAP - 8EO86819 ( AOS), TJ - BAP - 8EO86820 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

DESIGNATED PERSON OR ORGANIZATION - NOTICE OF

CANCELLATION OR NONRENEWAL PROVIDED BY US
This endorsement modifies insurance provided under the following:

ALL COVERAGE PARTS INCLUDED IN THIS POLICY

SCHEDULE
CANCELLATION: Number of Days Notice: 30
WHEN WE DO NOT RENEW ( Nonrenewal): Number of Days Notice: 30

PERSON OR
ORGANIZATION:

ANY PERSON OR ORGANIZATION TO WHOM YOU

HAVE AGREED IN A WRITTEN CONTRACT THAT

NOTICE OF CANCELLATION OR NONRENEWAL OF
THIS POLICY WILL BE GIVEN, BUT ONLY IF:

1. YOU SEE TO IT THAT WE RECEIVE A

WRITTEN REQUEST TO PROVIDE SUCH NOTICE,

INCLUDING THE NAME AND ADDRESS OF SUCH

PERSON OR ORGANIZATION, AFTER THE FIRST

NAMED INSURED RECEIVES NOTICE FROM US OF
THE CANCELLATION OF THIS POLICY; AND

2. WE RECEIVE SUCH WRITTEN REQUEST AT
LEAST 14 DAYS BEFORE THE BEGINNING OF

THE APPLICABLE NUMBER OF DAYS SHOWN IN
THIS ENDORSEMENT.

ADDRESS:

THE ADDRESS FOR THAT PERSON OR

ORGANIZATION INCLUDED IN SUCH
WRITTEN REQUEST FROM YOU TO US.

PROVISIONS
A. If we cancel this policy for any legally permitted
reason other than nonpayment of premium, and a
number of days is shown for Cancellation in the
Schedule above, we will mail notice of
cancellation to the person or organization shown
in such Schedule. We will mail such notice to the
address shown in the Schedule above at least the
number of days shown for Cancellation in such
Schedule before the effective date of cancellation.

B. If we do not renew this policy for any legally
permitted reason other than nonpayment of
premium, and a number of days is shown for
When We Do Not Renew ( Nonrenewal) in the
Schedule above, we will mail notice of
nonrenewal to the person or organization shown
in such Schedule. We will mail such notice to the
address shown in the Schedule above at least the
number of days shown for When We Do Not
Renew ( Nonrenewal) in such Schedule before the
effective date of nonrenewal.

WORKERS COMPENSATION
AND

EMPLOYERS LIABILITY POLICY
ENDORSEMENT WC 99 06 R3 ( 00)
POLICY NUMBER: UB - 3P635310 ( AOS); UB - 3P533004 ( MA, WI)

NOTICE OF CANCELLATION

TO DESIGNATED PERSONS OR ORGANIZATIONS
The following is added to PART SIX - CONDITIONS:

Notice of Cancellation To Designated Persons Or Organizations If we cancel this policy for any reason other than non- payment of premium by you, we will provide notice of such cancellation to each person or organization designated in the Schedule below. We will mail or deliver such notice to each person or organization at its listed address at least the number of days shown for that person or organization before the cancellation is to take effect.

You are responsible for providing us with the information necessary to accurately complete the Schedule below. If we cannot mail or deliver a notice of cancellation to a designated person or organization because the name or address of such designated person or organization provided to us is not accurate or complete, we have no responsibility to mail, delivery or otherwise notify such designated person or organization of the cancellation.

SCHEDULE
Name and Address of Designated Persons or Organizations:

Name: Any person or organization with whom you have agreed in a written contract that notice of cancellation of this policy will be given, but only if:

1. You see to it that we receive a written request to provide such notice, including the name and address of such person or organization, after the first Named Insured receives notice from us of the cancellation of this policy; and

2. We receive such written request at least 14 days before the beginning of the applicable number of days shown in this endorsement.

Address: The address for that person or organization included in such written request from you to us.

Number of Days Notice: 30
ALL OTHER TERMS AND CONDITIONS OF THIS POLICY REMAIN UNCHANGED.

Attachment Code: D522055 Certificate ID: 19405943

BERKSHIRE HATHAWAY SPECIALTY INSURANCE

ENDORSEMENT
This endorsement, effective 12: 01 AM: 5/ 1/ 2023
Forms a part of Policy No.: 47 - GLO- 307584
Issued to: SEE ATTACHED CERTIFICATE
By: Berkshire Hathaway Specialty Insurance Company

WAIVER OF RIGHTS OF RECOVERY

AGAINST OTHERS TO US
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY POLICY

COMMERCIAL UMBRELLA LIABILITY POLICY

COMMERCIAL RETAINED LIMIT LIABILITY POLICY

PRODUCTS/ COMPLETED OPERATIONS LIABILITY POLICY

SCHEDULE
Name Of Person Or Organization:

Any person or organization that requires you to waive your rights of recovery, in a written and executed contract or agreement with you that is executed prior to the " occurrence" or " offense".

The following Condition is added to the policy:

We waive any right of recovery we may have against the person or organization shown in the Schedule above because of payments we make for injury or damage arising out of your ongoing operations or " your work' done under a written and executed contract with that person or organization and included in the " products -completed operations hazard". This waiver applies only to the person or organization shown in the Schedule above. The Transfer of Rights of Recovery condition in the policy is deleted to the extent of the waiver provided in this endorsement for the person or organization shown in the Schedule above.

All other terms and conditions of this policy remain unchanged.

Page 11 ends

Attachment Code: D522017 Certificate ID: 19405943
POLICY NUMBER: TC2J - CAP - 8EO86819 ( AOS); TJ - BAP - 8E086820; [ ICAUPOL31]

COMMERCIAL AUTO
CA 04 44 03 10
THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY

WAIVER OF TRANSFER OF RIGHTS OF RECOVERY

AGAINST OTHERS TO US (WAIVER OF SUBROGATION)
This endorsement modifies insurance provided under the following:

BUSINESS AUTO COVERAGE FORM

BUSINESS AUTO PHYSICAL DAMAGE COVERAGE FORM

GARAGE COVERAGE FORM

MOTOR CARRIER COVERAGE FORM

TRUCKERS COVERAGE FORM
With respect to coverage provided by this endorsement, the provisions of the Coverage Form apply unless modified by the endorsement.

This endorsement changes the policy effective on the inception date of the policy unless another date is indicated.

Named Insured: STANTEC CONSULTING SERVICES INC.

Endorsement Effective Date: 5/ 1/ 2023

SCHEDULE
Name( s) Of Person( s) Or Organization( s):

WHERE REQUIRED BY WRITTEN CONTRACT
Information required to complete this Schedule, if not shown above, will be shown in the Declarations.

The Transfer Of Rights Of Recovery Against Others To Us Condition does not apply to the person( s) or organization( s) shown in the Schedule, but only to the extent that subrogation is waived prior to the accident" or "loss" under a contract with that person or organization.

CA 04 44 03 10
Re: Stantec Consulting Services Professional Services Agreement This agreement was originally scheduled for March 13, 2023, Council Meeting, at that time, the City Council continued the item until the March 27, 2023, meeting. The agreement was approved with an effective date of March 27, 2023; however, the 2.0 Term - List the agreement commencement date as March 15, 2023. For record keeping purposes, the commencement date is March 27, 2023. We did not want to alter the contract after Council approval.

Dated: June 7, 2023
Agenda Item G

AGENDA STAFF REPORT
DATE: August 11, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, City Manager
FROM: Alexa Smittle, Community Development Director
SUBJECT: Amendment 3 to the Professional Services Agreement with Holistic System Integration Solutions
________________________________________________________________ SUMMARY OF REQUEST:

That the City Council adopt Resolution 7684:

1. Approving Amendment 3 to the Professional Services Agreement with Holistic System Integration Solutions to approve an increase in compensation of $15,000 for continued post-implementation support of Tyler Technologies’ Enterprise Permitting and Licensing (EPL) Land Management Software System for a revised total not-to-exceed amount of $35,000; and,

2. Directing the City Manager to execute Amendment 3 on behalf of the City.

BACKGROUND AND ANALYSIS:

Holistic System Integration Solutions (Holistic) has been assisting the City of Seal Beach (City) with providing support services for Tyler Technologies’ (Tyler) EPL Land Management Software System. Holistic ensured a smooth transition and optimal functionality of the newly implemented system and has been instrumental in ongoing support of the Tyler system with services including system configuration, comprehensive testing, development of operating procedures, and provision of various remote services.

The initial Agreement, along with Amendment 1 and 2, have designated a budget of $20,000 for Holistic to deliver transitional support services through December 31, 2025. As the City has advanced, it has experienced a decline in vendor support services. Amendment 3 would augment the project scope for an additional $15,000 for a total not-to-exceed amount of $35,000 for the continuation of support services to ensure system stability and optimization through December 31, 2025.

Page 2 ends

ENVIRONMENTAL IMPACT:

The proposed professional services agreement amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State CEQA Guidelines which states that CEQA only applies to projects that have potential for causing a significant effect on the environment. Approval of the Professional Services Agreement Amendment 3 will not have a significant effect on the environment.

LEGAL ANALYSIS:

This item has been reviewed and approved as to form.

FINANCIAL IMPACT:

Adequate funding is available in Fund 103-300-0231-51303, a fee-based revenue source for technology needs.

STRATEGIC PLAN:

Implementation of a new permitting system was included in the 2021 Strategic Plan.

RECOMMENDATION:

That the City Council adopt Resolution 7684:

2. Directing the City Manager to execute Amendment 3 on behalf of the City.

SUBMITTED BY: NOTED AND APPROVED:

Alexa Smittle Patrick Gallegos
Alexa Smittle, Community
Development Director
Patrick Gallegos, City Manager
Prepared by: Megan Coats, Management Analyst

Page 3 ends

ATTACHMENTS:

A. Resolution 7684
B. Amendment 3 to the Professional Services Agreement with Holistic System Integration Solutions
C. Amendment 2 to the Professional Services Agreement with Holistic System Integration Solutions
D. Amendment 1 to the Professional Services Agreement with Holistic System Integration Solutions
E. Original Professional Services Agreement with Holistic System Integration Solutions
RESOLUTION 7684

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL APPROVING
AND AUTHORIZING AMENDMENT 3 TO THE PROFESSIONAL

SERVICES AGREEMENT WITH HOLISTIC SYSTEM INTEGRATION

SOLUTIONS INCREASING THE TOTAL COMPENSATION BY
$15,000
WHEREAS, the City of Seal Beach (City) and Holistic System Integration Solutions (Consultant) are parties to that certain Professional Services Agreement approved on September 23, 2024, for Post-Go-Live Transition Services (collectively the “Agreement”); and,
WHEREAS, the Consultant has been instrumental in the successful launch and ongoing support of the Tyler Technologies system, providing services including system configuration, comprehensive testing, development of operating procedures, and various services; and,
WHEREAS, the City faces significant changes in the support structure from Tyler, necessitating a proactive approach to ensure continued system stability and optimization; and,
WHEREAS, City and Consultant have determined that additional funding of $15,000 is necessary for the continued support services.

NOW, THEREFORE, the Seal Beach City Council does resolve, declare, determine, and order as follows:

Section 1. The City Council hereby approves to amend the Professional Services Agreement for Post-Go-Live Transition Services, approving an increase in compensation of $15,000 for a revised total not-to-exceed amount of $35,000.

Section 2. The Council hereby directs the City Manager to execute Amendment 3 on behalf of the City.

PASSED, APPROVED and ADOPTED by the Seal Beach City Council at a regular meeting held on the 11
th day of August 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 7684 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 11
th day of August 2025.

Gloria D. Harper, City Clerk

PROFESSIONAL SERVICES AGREEMENT
Amendment No. 3
for
Post-Go-Live Transition Services
Between
City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
&
Holistic System Integration Solutions
P.O. Box 6313
La Quinta, CA 92248
(760) 861-6532
This Amendment No. 3, dated August 11, 2025, amends that certain agreement (Agreement) made as of September 23, 2024 by and between the City of Seal Beach (City), a California charter city, and Holistic System Integration Solutions (Consultant), a sole proprietorship (collectively, “the Parties”).
2 of 3

RECITALS
A. City and Consultant are parties to the Agreement, pursuant to which Consultant provides post-go-live professional services to support implementation of the Tyler Enterprise, Permitting and Licensing software system.

B. City and Consultant wish to amend the Agreement for Consultant to increase the executed agreement for an additional $15,000 for continued support.

AMENDMENT NO. 3
NOW, THEREFORE and in consideration of the foregoing and of the mutual covenants and promises herein set forth, the parties agree to amend the Agreement as follows:

Section 1. Section 3.0 (Payment) of the September 1, 2024 Agreement is hereby amended to increase by $15,000, the contract amount to $35,000, to read as follows:

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 $35,000 (thirtyfive thousand dollars) for the Term.

Section 3. All references to the term “Agreement” throughout Sections

1.0 through 35.0 inclusive, of the Agreement are hereby modified to include the this Amendment No. 3, dated August 11, 2025, as if all of those terms are fully set forth therein.

Section 4. Except as expressly modified or supplemented by this Amendment No. 3, all other provisions of the Agreement shall remain unaltered and in full force and effect.

Section 4. The person executing this Amendment No. 3 on behalf of Consultant warrants that he or she is fully authorized to execute this Amendment No. 3 on behalf of said Party, and that by his or her execution, Consultant is formally bound to the provisions of this Amendment No. 3.

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
By:_________________________
Patrick Gallegos,
City Manager
Attest:

By:_________________________
Gloria D. Harper, City Clerk
Approved as to Form:

By:_________________________
Nicholas Ghirelli, City Attorney
CONSULTANT: Holistic Systems
Integration Solutions, a Sole
Proprietorship
By: __________________________
Name: Angelica Zarco
Its: President

PROFESSIONAL SERVICES AGREEMENT
Amendment No. 1
for
Post-Go- Live Transition Services
Between

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11. E
11 12Cisp FR 27 19\ i
City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
Holistic System Integration Solutions
P. O. Box 6313
La Quinta, CA 92248
760) 861- 6532
This Amendment No. 1, dated December 9, 2024, amends that certain agreement Agreement) made as of August 26, 2024 by and between the City of Seal Beach ( City), a California charter city, and Holistic System Integration Solutions ( Consultant), a sole proprietorship ( collectively, " the Parties").

RECITALS
A. City and Consultant are parties to the Agreement, pursuant to which Consultant provides post- go- live professional services to support implementation of the Tyler Enterprise, Permitting and Licensing software system.

B. City and Consultant wish to amend the Agreement for Consultant to extend the executed document from September 1, 2024, for a seven month extension to conclude on June 30, 2025, and to increase the executed agreement for an additional $ 15, 000 for continued support.

AMENDMENT NO. 1
NOW, THEREFORE and in consideration of the foregoing and of the mutual covenants and promises herein set forth, the parties agree to amend the Agreement as follows:

Section 1. Section 2. 0 ( Term) of the September 1, 2024 Agreement is hereby amended for a seven month extension to expire June 30, 2025, to read as follows:

The term of this Agreement shall commence on
September 1, 2024 and shall remain in full force and
effect until June 30, 2025 unless sooner terminated as
provided in Section 5. 0 of this Agreement.

Section 2. Section 3. 0 ( Payment) of the September 1, 2024 Agreement is hereby amended to increase by $ 15, 000, the contract amount to $ 20, 000, to read as follows:

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$ 20, 000 ( twenty thousand dollars) for the Term.

Section 3. All references to the term " Agreement" throughout Sections 1 . 0 through 35. 0 inclusive, of the Agreement are hereby modified to include the this Amendment No. 1, dated December 9, 2024, as if all of those terms are fully set forth therein.

Section 4. Except as expressly modified or supplemented by this Amendment No. 1, all other provisions of the Agreement shall remain unaltered and in full force and effect.

Section 4. The person executing this Amendment No. 1 on behalf of Consultant warrants that he or she is fully authorized to execute this Amendment 2 of 3
No. 1 on behalf of said Party, and that by his or her execution, Consultant is formally bound to the provisions of this Amendment No. 1.

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 CONSULTANT: Holistic Systems
Integration Solutions, a Sole
Proprietorship
By:

Patrick Gallegos;- interim City - By:

Manager
V`j
Name: Angelica Zarco
Atte yf Its: President
co
By: cam co
Gloria . rper, 5A.

Q• CA[ IFO t
Approved as to Form:

By: 7.

Ntithoias Ghirelli, City Attorney
3 of 3
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HOLISTIC SYSTEM INTEGRATION SOLUTIONS
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viktios=irmiver..-‘ -
Proposal:

City of Seal Beach
Consulting Assistance for Implementation of
Tyler' s EnerGov Civic Services Software
Angelica Zarco
fFSEALe\
P. O. Box 6313 F''•
La Quinta, CA. 92248 9C:\
Office ( 760) 861- 6532
0 — —
azarco@holisticsystemint. com
CA _ ` P;
r
t/PORN-.
www. holisticsystem- int. com

Page 1 ends

November 4, 2024
Alexa Smittle
Community Development Director
City of Seal Beach, California
asmittleasealbeachca. c ov
RE: Consulting services for post- implementation support of Tyler' s EnerGov, Community Development Software System
Dear Ms. Smittle.

Holistic System Integration Solutions is pleased to submit this proposal to the City of Seal Beach Community Development Department, to provide post-implementation support of Tyler' s, EnerGov Civic Services Software. Implementation of the City' s new permitting system occurred on August 19'", 2024. The City desires to engage post- implementation support services for a period of up to one ( 1) year.

Holistic looks forward to working with the City of Seal Beach to develop a model for efficient business operations that safely delivers development services to its customers. Thank you for consideration of our proposal.

Sincerely,
Holistic System Integration Solutions
Angelica Zarco
President/ CEO

Page 2 ends

SCOPE OF WORK
Provide post- implementation support of Tyler' s. Enterprise Permitting software system to include the following:

Configuration/ Business Process Integration
Fee Schedule/ Structure configuration
System Reports Development Coordination ( Forms/ Documents/ Reports) GIS Coordination
Testing
Develop Standard Operating Procedures ( SOP' s)
Develop Training materials
Ticket creation to report system issues, monitoring and follow through to resolution Conduct one- on- one and/ or group sessions with City staff Remote support services via phone/ video conference

Page 3 ends

QUALIFICATIONS

HOLISTIC SYSTEM INTEGRATION SOLUTIONS

OUR PURPOSE
Based in Riverside County, Holistic System Integration
Solutions is dedicated to providing smart holistic solutions for PEOPLE
software implementation and process integration.

Holistic' s in- depth understanding of land management systems, 1601111 comprehensive knowledge of municipal land development processes and proven system implementation/ integration cut TURF experience, paired with our client' s desires to achieve future system goals and capitalize on their investment while delivering exceptional customer service, ensures seamless and streamlined collaborations. TECHNOLOGY
Holistic has developed streamlined solutions that utilize a holistic approach to system design and integration by balancing four major elements that are key to successful system implementation— People, Culture, Process, and Technology.

This approach delivers system integration on a global scale while taking- into- account and minimizing adverse impacts to the organization.

EXECUTION STRATEGY
Our success is attributed to an execution strategy that incorporates the Lean Six Sigma, DMAIC ( Define, Measure, Analyze. Improve, Control) method to software implementation/ integration. The DMAIC approach allows them to continually identify and apply improvements to business processes through software system design that result in enhanced system performance.

Change management strategies are also built into our programs to assist with the least impactful introduction of end- users to their new land management environment. This approach is imperative to organizational health.

SERVICES PROVIDED ( all of which may be provided remotely) RFP Development Develop Training Materials and Conduct Staff Training Software System Implementation ( New or Upgrade) Vendor issue creation to report system issues. monitoring Software Configuration/ Integration
and follow through to resolution
Workflow Development, Design and Automation Conduct one- on- one and/ or group sessions with staff Fee Schedule/ Structure Calculations
Remote support services via phone/ video conference
System Reports Development Coordination •
On- site and/ or remote project management/ support
Forms/Documents/Reports)
services
GIS Implementation Coordination
Electronic plan review software Implementation/ integration System Testing
Develop Process/ Project Action Team' s to achieve project goals
Streamlined Strategies for Data Mapping/ Migration

Page 4 ends

Develop Standard Operating Procedures( SOP' s) Develop performance metrics and key performance indicators( KPI' s) for increased productivity
Holistic System Integration Solutions Experience

CITY OF SAN CLEMENTE
The City of San Clemente' s Information Technology Division utilized Holistic System Integration Solutions to supplement their efforts during a staff transitional period and implementation/ integration of a new GIS module. Holistic' s ability to provide uninterrupted services while implementing a complex GIS module to their existing land management system resulted in a successful partnership. Services provided to the City included the following:

Review, analysis, coordination. testing and implementation of a new GIS module to their existing land management system.

Review, analysis, coordination and validation of the City' s, County and Fire GIS data and migration into existing land management system.

Developed Standard Operating Procedures for City Staff use at implementation.

Developed roadmap and made recommendations to implement electronic plan review.

Developed reporting methods for Clean Oceans Annual Jurisdictional Runoff report and Park Ranger program.

Provided configuration and system support services:

CITY OF MEDFORD ( OR)
Holistic quickly became a critical element to a successful implementation of a complex system for the City of Medford. The knowledge and resources provided were extremely hardworking and competent. We could not have achieved success without these resources."
Barbara Madruga
The City of Medford procured Holistic System Integration Solutions to assist them with a complex implementation of a new software system just three months prior to their scheduled Go- Live date. Holistic addressed and fast- tracked resolutions for concerns surrounding their anticipated Go- Live schedule. Our assistance lead to a successful implementation. Services provided to the City included the following:

Conducted analysis of project timeline and task evaluation, identified critical stops and developed plan of action to accomplish scheduled tasks for successful Go- live.

Conducted business process and workflow analysis, made recommendations for streamlining and standardizing opportunities and configured in system.

Conducted analysis of TRAKiT system for configuration needs, accuracy and made configuration adjustments in accordance with desired workflows and business processes.

Conducted data migration analysis and developed streamlined methods for mapping and migration to new system.

Conducted GIS analysis and made recommendations for effective system implementation Developed SOPs and conducted training to staff in all modules

Page 5 ends

Implemented mobile inspection platform and conducted training for inspection staff Made recommendations for system preparedness and roll- out to public

CITY OF COACHELLA
Holistic conducted an in- depth System Needs Analysis of the City of Coachella' s existing land management software system ( Eden) and processes surrounding their land development activities which included impacts to water & sewer Utilities and Environmental Compliance Departments. The analysis provided them with the ability to measure existing software system capabilities against newer, more sophisticated systems and identified process improvement/ streamlining opportunities which will allow them to make informed decisions about future procurement of a new software system.

Services provided to the City included the following:

Conducted comprehensive system needs analysis of various systems used, including the City' s existing Eden land management system, and evaluated based on capability. efficiency and accessibility in comparison with newer land management systems available in today' s market.

Conducted comprehensive business process review of land development activities and made recommendations for standardizing and streamlining opportunities.

Coordinated software vendor demonstrations and prepared system cost comparison.

Provided the City with a menu of short- term, mid- term and long-term next steps and made recommendations for actionable goals based on priority.

Provided roadmap for actionable items with realistic timelines for execution.

CITY OF LA QUINTA
The City of La Quinta sought to implement an on-line land management system for the Design& Development Department. Angelica Zarco ( Systems Integration Manager), spearheaded implementation of the City' s new land management software system, TRAKiT, which included strategic planning, streamlining, standardizing, implementation and integration of processes and systems for the Design and Development Department.

Responsibilities included the following:

Development, configuration and implementation of the City' s software system ( TRAKiT) utilized for all development related, business license and Short- Term Vacation Rental application, review, processing and payment activities for both over the counter and online functionality.

Implemented the City' s online, electronic plan review, GIS and mobile inspection platforms.

Engaged with City Staff to understand complex business processes, developed workflows, identified process improvements, streamlining opportunities, standardized business processes and integrated with relative software.

Developed Standard Operating Procedures and User Guides and conducted training for all modules.

Oversaw the City' s Short- Term Vacation Rental Program which involved revamping the marketing and branding of the program.

Development of complex key performance indicators to measure business and system performance.

Page 6 ends

Angelica Zarco - Project Manager/ President, Holistic SIS Business Process Review, Workflow Development, Streamlining and Standardizing for Improved Business Continuity, Configuration, SOP Development & Training
Certifications
Intermediate Project Management- Microsoft Project; Lean Six Sigma— Lean Management
Angelica has 14 years of municipal government experience with 10+ years directly related to Community Development. She was also employed as a Project Manager for 3 years with a major Southern California land development company where she managed large- scale tract home development projects. Her experience in both public and private land development sectors has granted her a unique perspective to the land management software implementation and integration process. She is able to utilize her knowledge and experience from behind both sides of the counter to accurately, efficiently and effectively interpret and deploy land management systems based on the critical business needs of cities and customers alike. Angelica was responsible for the successful implementation of the City of La Quinta' s Design and Development Department' s land management system, which included Permit, Project, Business License, AEC and GIS modules. She also implemented electronic plan review, mobile inspection and the eTRAKiT online platform which consisted of 82 land development application types. Angelica developed methods to successfully measure key performance indicators for business process and system performance. The implementation process included:

Establishing comprehensive strategic plans for implementation / integration of the Department' s software system and various project initiatives including project budgets and schedule development adherence.

Managing. assigning, and directing activities of various Project Action Teams ( PAT' s).

Developing, configuring, and implementing the City' s TRAKiT software system Conducting stakeholder workshops for eTRAKiT online permitting software.

Working with City Staff to understand their business processes, developing process workflows, and identifying process improvement opportunities prior to their integration into TRAKiT.

Developing and implementing standard operating procedures ( SOPs) and user manuals, as well as City policies and best management practices ( BMP' s) Conducting effective staff training utilizing SOP' s and effective training materials

Page 7 ends

References
Agency Contact Phone Number Email Address
Holistic References
City of Medford, Oregon Barbara Madruga,
541. 774. 2064 blmadruga@cityofinedford. org
Technology& Innovation Director
City of San Clemente, Brian Brower,
California Information Technology Manager 949. 361. 8259 browerb@san- clemente. org Fee Information
Cost of Services/ Hour Price Total Project Cost
Time and Materials— Contract Duration( Up to 1 Year) 125/ hour 15, 000 To be billed in Increments of no less than 30 minutes per task
TOTAL CONTRACT AMOUNT 15, 000 l

Page 8 ends

HOLISTIC SYSTEM INTEGRATION SOLUTIONS
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Proposal:

City of Seal Beach
Consulting Assistance for Implementation of
Tyler' s EnerGov Civic Services Software
Angelica Zarco
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P. O. Box 6313 F,9y
La Quinta, CA. 92248 V nS
Office ( 760) 861- 6532
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Page 1 ends

November 4, 2024
Alexa Smittle
Community Development Director
City of Seal Beach, California
asmittleasealbeachca. gov
RE: Consulting services for post- implementation support of Tyler' s EnerGov, Community Development Software System
Dear Ms. Smittle,
Holistic System Integration Solutions is pleased to submit this proposal to the City of Seal Beach Community Development Department, to provide post-implementation support of Tyler' s, EnerGov Civic Services Software. Implementation of the City' s new permitting system occurred on August 19' h, 2024. The City desires to engage post- implementation support services for a period of up to one( 1) year.

Sincerely,
Holistic System Integration Solutions
Angelica Zarco
President/ CEO

Page 2 ends

SCOPE OF WORK
Provide post- implementation support of Tyler' s, Enterprise Permitting software system to include the following:

Page 3 ends

QUALIFICATIONS

HOLISTIC SYSTEM INTEGRATION SOLUTIONS

OUR PURPOSE
Based in Riverside County, Holistic System Integration
Solutions is dedicated to providing smart holistic solutions for PEOPLE
software implementation and process integration.

Holistic' s in- depth understanding of land management systems, lor • comprehensive knowledge of municipal land development processes and proven system implementation/ integration 401 PROCESS experience, paired with our client' s desires to achieve future system
exceptional
goals
customer
and capitalize
service,
on
ensures
their investment
seamless and
while
streamlined
delivering fl/A
collaborations. TECHNOLOGY
Holistic has developed streamlined solutions that utilize a holistic approach to system design and integration by balancing four major elements that are key to successful system implementation— People, Culture, Process, and Technology.

This approach delivers system integration on a global scale while taking- into-account and minimizing adverse impacts to the organization.

EXECUTION STRATEGY
Our success is attributed to an execution strategy that incorporates the Lean Six Sigma, DMAIC ( Define, Measure, Analyze, Improve, Control) method to software implementation/ integration. The DMAIC approach allows them to continually identify and apply improvements to business processes through software system design that result in enhanced system performance.

SERVICES PROVIDED ( all of which may be provided remotely) RFP Development Develop Training Materials and Conduct Staff Training Software System Implementation ( New or Upgrade) Vendor issue creation to report system issues. monitoring Software Configuration/ Integration
and follow through to resolution
Workflow Development, Design and Automation
Conduct one- on- one and/ or group sessions with staff
Fee Schedule/ Structure Calculations
Remote support services via phone/ video conference
System Reports Development Coordination •
On- site and/ or remote project management/ support
Forms/ Documents/Reports)
services
Electronic plan review software Implementation/ integration GIS Implementation Coordination
Develop Process/ Project Action Team' s to achieve project System Testing
goals
Streamlined Strategies for Data Mapping/ Migration

Page 4 ends

Develop Standard Operating Procedures( SOP' s) Develop performance metrics and key performance indicators( KPI' s) for increased productivity
Holistic System Integration Solutions Experience

Review, analysis, coordination, testing and implementation of a new GIS module to their existing land management system.

Review, analysis, coordination and validation of the City' s. County and Fire GIS data and migration into existing land management system.

Developed Standard Operating Procedures for City Staff use at implementation.

Developed roadmap and made recommendations to implement electronic plan review.

Developed reporting methods for Clean Oceans Annual Jurisdictional Runoff report and Park Ranger program.

Provided configuration and system support services:

Conducted analysis of project timeline and task evaluation, identified critical stops and developed plan of action to accomplish scheduled tasks for successful Go-live.

Conducted business process and workflow analysis, made recommendations for streamlining and standardizing opportunities and configured in system.

Conducted analysis of TRAKiT system for configuration needs, accuracy and made configuration adjustments in accordance with desired workflows and business processes.

Conducted data migration analysis and developed streamlined methods for mapping and migration to new system.

Conducted GIS analysis and made recommendations for effective system implementation Developed SOPs and conducted training to staff in all modules

Page 5 ends

Implemented mobile inspection platform and conducted training for inspection staff Made recommendations for system preparedness and roll- out to public

Services provided to the City included the following:

Conducted comprehensive system needs analysis of various systems used, including the City' s existing Eden land management system, and evaluated based on capability, efficiency and accessibility in comparison with newer land management systems available in today' s market.

Conducted comprehensive business process review of land development activities and made recommendations for standardizing and streamlining opportunities.

Coordinated software vendor demonstrations and prepared system cost comparison.

Provided the City with a menu of short- term, mid- term and long- term next steps and made recommendations for actionable goals based on priority.

Provided roadmap for actionable items with realistic timelines for execution.

CITY OF LA QUINTA
The City of La Quinta sought to implement an on- line land management system for the Design & Development Department. Angelica Zarco ( Systems Integration Manager), spearheaded implementation of the City' s new land management software system, TRAKiT, which included strategic planning, streamlining, standardizing, implementation and integration of processes and systems for the Design and Development Department.

Responsibilities included the following:

Implemented the City' s online, electronic plan review, GIS and mobile inspection platforms.

Developed Standard Operating Procedures and User Guides and conducted training for all modules.

Oversaw the City' s Short- Term Vacation Rental Program which involved revamping the marketing and branding of the program.

Development of complex key performance indicators to measure business and system performance.

Page 6 ends

Angelica Zarco - Project Manager/ President, Holistic SIS Business Process Review, Workflow Development, Streamlining and Standardizing for Improved Business Continuity, Configuration, SOP Development & Training
i4
Certifications
Intermediate Project Management- Microsoft Project; Lean Six Sigma— Lean Management
Angelica has 14 years of municipal government experience with 10+ years directly related to Community Development. She was also employed as a Project Manager for 3 years with a major Southern California land development company where she managed large- scale tract home development projects. Her experience in both public and private land development sectors has granted her a unique perspective to the land management software implementation and integration process. She is able to utilize her knowledge and experience from behind both sides of the counter to accurately, efficiently and effectively interpret and deploy land management systems based on the critical business needs of cities and customers alike. Angelica was responsible for the successful implementation of the City of La Quinta' s Design and Development Department' s land management system. which included Permit, Project, Business License, AEC and GIS modules. She also implemented electronic plan review, mobile inspection and the eTRAKiT online platform which consisted of 82 land development application types. Angelica developed methods to successfully measure key performance indicators for business process and system performance. The implementation process included:

Managing, assigning, and directing activities of various Project Action Teams ( PAT' s).

Developing, configuring, and implementing the City' s TRAKiT software system Conducting stakeholder workshops for eTRAKiT online permitting software.

Working with City Staff to understand their business processes, developing process workflows, and identifying process improvement opportunities prior to their integration into TRAKiT.

Page 7 ends

References
Agency Contact Phone Number Email Address
Holistic References
City of Medford, Oregon Barbara Madruga,
Technology& Innovation Director
541. 774. 2064 blmadruga@cityofinedford. org
City of San Clemente, Brian Brower,
California Information Technology Manager 949. 361. 8259 browerb@san- clemente. org Fee Information
Cost of Services/ Hour Price Total Project Cost
Time and Materials— Contract Duration( Up to 1 Year) 125/ hour 15, 000 To be billed in Increments of no less than 30 minutes per task
TOTAL CONTRACT AMOUNT 15, 000

Page 8 ends

PROFESSIONAL SERVICES AGREEMENT
for
Post- Go- Live Transition Services
between
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City of Seal Beach
211 - 8th Street
Seal Beach, CA 90740
Holistic System Integration Solutions
P. O. Box 6313
La Quinta, CA 92248
760) 861- 6532
This Professional Service Agreement (" the Agreement") is made as of August 26, 2024, to be effective as of September 1, 2024 ( the " Effective Date"), by and between Holistic System Integration Solutions (" Consultant"), a sole proprietorship, and the City of Seal Beach ('`City"), a California charter city, ( collectively, the Parties").

RECITALS
A. City desires certain professional services for post-go-live for Tyler Enterprise, Permitting and Licensing software system.

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 information technology 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.

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, Consultant hereby covenants that it shall follow the customary professional standards in performing all Services. 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 standards of care. The acceptance of Consultant' s 2 of 19
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 September 1, 2024 and shall remain in full force and effect until November 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 $ 5, 000 ( five thousand dollars) for the Original 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. Angelica Zarco is the Consultant' s primary representative for purposes of this Agreement. Angelica Zarco 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: Holistic System Integration Solutions
P. O. Box 6313
La Quinta, CA 92248
Attn: Angelica Zarco

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 4 of 19
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 5 of 19
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 any and all liability, damages, claims, costs and expenses of any nature to the extent arising from, caused by, or relating to Consultant' s personnel practices. or to the extent arising from, caused by or relating to the violation 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. Consultant' s indemnifications and obligations under this Section shall survive the expiration or termination 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 ( with legal counsel approved by City, whose approval shall not be unreasonably withheld), 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 any and all liability, 6 of 19
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 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 7 of 19
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.

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.
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14. 0 Prohibition Against Assignment or Delegation
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 free access to such records, 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. , within 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. 2. 5 Cyber Security & Privacy Liability Insurance. Service Provider shall procure and maintain Cyber Security and Privacy Liability insurance with limits of $ 1, 000, 000 per occurrence and $ 2, 000, 000 general aggregate which shall include the following coverage:
a. Liability arising from the theft, dissemination and/or use of confidential or personally identifiable information; including credit monitoring and 10 of 19
regulatory fines arising from such theft, dissemination, or use of confidential information.
b. Network security liability arising from the unauthorized use of, access to, or tampering with computer systems, including hacker or denial of service attacks.
c. Liability arising from the failure of technology products ( software) required under the contract for Service Provider to properly perform the services intended.
d. Electronic Media Liability arising from personal injury, plagiarism or misappropriation of ideas, domain name infringement or improper deeplinking or framing, and infringement or violation of intellectual property rights.
e. Liability arising from the failure to render professional services.

If coverage is maintained on a claims- made basis, Service Provider shall maintain such coverage for an additional period of three ( 3) years following termination of the contract. Required Endorsements — a 30- day notice of cancellation.

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.

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 11 of 19
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;

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.

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 12 of 19
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.

17. 13. Broader Coveraqe/ 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 13 of 19
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 acts or omissions 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 of the Indemnitees' choice, 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 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 14 of 19
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, 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.
15 of 19

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 Governing 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.

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. 16 of 19

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, noncontractual, 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
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. 17 of 19

30. 0 Non- Appropriation 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
u 1 •

31. 1. Citv' s Cooperation. City shall prbvjde Cohsul an with al pe inent Data, documents and other requested information as is reasonably avarfa le 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
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 18 of 19
by his or her execution, the Consultant is formally bound to the provisions of this Agreement.

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 CONSULTANT: Holistic Systems
Integration Solutions, a Sole
it Proprietorship
By:

J' IF'. Ingram, City Manage By:

Name: Angelica Zarco
Its: President
Attest:

Please note, two signatures required
for corporations pursuant to California
By: \.;
r
g A Corporations Code Section 313 from
oria I. Harp: , i y Clerk each of the following categories: ( i) the chairperson of the board, the president
or any vice president, and ( ii) the
Approved as to Form: secretary, any assistant secretary, the chief financial officer or any assistant
treasurer of such corporation.)
By:

Nicholas Ghirelli, City Attorney PROOF OF AUTHORITY TO BIND

CONTRACTING PARTY REQUIRED
19 of 19

EXHIBIT A
Consultant' s Proposal
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Proposal:

City of Seal Beach
Consulting Assistance for Implementation of
Tyler' s EnerGov Civic Services Software
Angelica Zarco
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Page 1 ends

SCOPE OF WORK
Provide continued Implementation support of Tyler' s, Enterprise Permitting and Lisencing software system to include the following:

Configuration/ Business Process Integration
Workflow Development
Fee Schedule/ Structure configuration
System Reports Development Coordination ( Forms/ Documents/ Reports) GIS Coordination
Testing
Data mapping guidance for data migration
Develop Standard Operating Procedures ( SOP' s)
Develop Training materials
Conduct Staff training
Ticket creation to report system issues. monitoring and follow through to resolution Conduct one- on- one and/ or group sessions with City staff Remote support services via phone/ video conference
On- site project management/ support services— To be scheduled and agreed upon between City and HSIS Electronic Plan Review Implementation/ integration
Develop Process/ Project Action Team' s to accomplish project goals Optional Services
Attend bi- weekly team meeting( s) via phone/ video conference SQL/ Cognos/ Crystal Report Writer services
O Coordinate temporary services to be directly contracted by City GIS Consultant
Coordinate temporary services to be directly contracted by City

Page 3 ends

Holistic System Integration Solutions Experience

Review, analysis, coordination, testing and implementation of a new GIS module to their existing land management system.

Review, analysis, coordination and validation of the City' s, County and Fire GIS data and migration into existing land management system.

Developed Standard Operating Procedures for City Staff use at implementation.

Developed roadmap and made recommendations to implement electronic plan review.

Developed reporting methods for Clean Oceans Annual Jurisdictional Runoff report and Park Ranger program.

Provided configuration and system support services:

Conducted business process and workflow analysis, made recommendations for streamlining and standardizing opportunities and configured in system.

Conducted analysis of TRAKiT system for configuration needs, accuracy and made configuration adjustments in accordance with desired workflows and business processes.

Conducted data migration analysis and developed streamlined methods for mapping and migration to new system.

Conducted GIS analysis and made recommendations for effective system implementation Developed SOPs and conducted training to staff in all modules Implemented mobile inspection platform and conducted training for inspection staff Made recommendations for system preparedness and roll- out to public

Page 5 ends

Angelica Zarco - Project Manager/ President, Holistic SIS Business Process Review. Workflow Development, Streamlining and Standardizing for Improved Business Continuity, Configuration, SOP Development & Training
Certifications
Intermediate Project Management- Microsoft Project: Lean Six Sigma— Lean Management
Angelica has 14 years of municipal government experience with 10+ years directly related to Community Development. She was also employed as a Project Manager for 3 years with a major Southern California land development company where she managed large- scale tract home development projects. Her experience in both public and private land development sectors has granted her a unique perspective to the land management software implementation and integration process. She is able to utilize her knowledge and experience from behind both sides of the counter to accurately. efficiently and effectively interpret and deploy land management systems based on the critical business needs of cities and customers alike. Angelica was responsible for the successful implementation of the City of La Quinta' s Design and Development Department' s land management system. which included Permit, Project, Business License, AEC and GIS modules. She also implemented electronic plan review, mobile inspection and the eTRAKiT online platform which consisted of 82 land development application types. Angelica developed methods to successfully measure key performance indicators for business process and system performance. The implementation process included:

Establishing comprehensive strategic plans for implementation / integration of the Department' s software system and various project initiatives including protect budgets and schedule development adherence.

Managing, assigning, and directing activities of various Project Action Teams( PAT' s) Developing, configuring, and implementing the City' s TRAKiT software system Conducting stakeholder workshops for eTRAKiT online permitting software.

Working with City Staff to understand their business processes, developing process workflows, and identifying process improvement opportunities prior to their integration into TRAKiT.

Page 7 ends

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.

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Page 1 ends

August 22, 2024
Alexa Smittle
Community Development Director
City of Seal Beach, California
asmittle@sealbeachca. gov
RE: Consulting services for post- implementation support of Tyler' s EnerGov, Community Development Software System
Dear Ms. Smittle,
Holistic System Integration Solutions is pleased to submit this proposal to the City of Seal Beach Community Development Department, to provide post- implementation support of Tyler' s, EnerGov Civic Services Software.

The City of Seal Beach implemented Tyler' s Enterprise, Permitting and Licensing software system.

Implementation of the software is aligned with the City Council' s strategic objective for Community Development to improve business processes. The City of Seal Beach desires to receive postimplementation support of their Community Development software system through the end of September, 2024.

Sincerely,
Holistic System Integration Solutions
Angelica Zarco
President/ CEO

Page 2 ends

SCOPE OF WORK
Provide continued Implementation support of Tyler' s, Enterprise Permitting and Lisencing software system to include the following:

Configuration/ Business Process Integration
Workflow Development
Fee Schedule/ Structure configuration
System Reports Development Coordination ( Forms/ Documents/ Reports) GIS Coordination
Testing
Data mapping guidance for data migration
Develop Standard Operating Procedures ( SOP' s)
Develop Training materials
Conduct Staff training
Ticket creation to report system issues. monitoring and follow through to resolution Conduct one- on- one and/ or group sessions with City staff Remote support services via phone/ video conference
On- site project management/ support services— To be scheduled and agreed upon between City and HSIS Electronic Plan Review Implementation/ integration
Develop Process/ Project Action Team' s to accomplish project goals Optional Services
Attend bi- weekly team meeting( s) via phone/ video conference SQL/ Cognos/ Crystal Report Writer services
c Coordinate temporary services to be directly contracted by City GIS Consultant
Coordinate temporary services to be directly contracted by City

Page 3 ends

QUALIFICATIONS

HOLISTIC SYSTEM INTEGRATION SOLUTIONS

OUR PURPOSE
Based in Riverside County, Holistic System Integration
Solutions is dedicated to providing smart holistic solutions for PEOPLE
software implementation and process integration.

Holistic' s in- depth understanding of land management systems. comprehensive knowledge of municipal land development
processes and proven system implementation/ integration cut 1', PF experience, paired with our client' s desires to achieve future system goals and capitalize on their investment while delivering exceptional customer service, ensures seamless and streamlined collaborations. TECHNOLOGY
Holistic has developed streamlined solutions that utilize a holistic approach to system design and integration by balancing four major elements that are key to successful system implementation— People, Culture, Process. and Technology.

This approach delivers system integration on a global scale while taking- into- account and minimizing adverse impacts to the organization.

EXECUTION STRATEGY
Our success is attributed to an execution strategy that incorporates the Lean Six Sigma, DMAIC ( Define, Measure, Analyze. Improve. Control) method to software implementation/ integration. The DMAIC approach allows them to continually identify and apply improvements to business processes through software system design that result in enhanced system performance.

SERVICES PROVIDED ( all of which may be provided remotely) RFP Development Develop Training Materials and Conduct Staff Training Software System Implementation ( New or Upgrade) Vendor issue creation to report system issues. monitoring Software Configuration/ Integration
and follow through to resolution
Workflow Development, Design and Automation
Conduct one- on- one and/ or group sessions with staff
Fee Schedule/ Structure Calculations
Remote support services via phone/ video conference
System Reports Development Coordination •
On- site and/ or remote project management/ support
services
Forms/ Documents/ Reports)
GIS Implementation Coordination
Electronic plan review software Implementation/ integration System Testing
Develop Process/ Project Action Team' s to achieve project goals
Streamlined Strategies for Data Mapping/ Migration
Develop performance metrics and key performance
Develop Standard Operating Procedures( SOP' s) indicators( KPI' s) for increased productivity

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Holistic System Integration Solutions Experience

CITY OF SAN CLEMENTE
The City of San Clemente' s Information Technology Division utilized Holistic System Integration Solutions to supplement their efforts during a staff transitional period and implementation/integration of a new GIS module. Holistic' s ability to provide uninterrupted services while implementing a complex GIS module to their existing land management system resulted in a successful partnership. Services provided to the City included the following:

Review, analysis, coordination. testing and implementation of a new GIS module to their existing land management system.

Review, analysis, coordination and validation of the City' s. County and Fire GIS data and migration into existing land management system.

Developed Standard Operating Procedures for City Staff use at implementation.

Developed roadmap and made recommendations to implement electronic plan review.

Developed reporting methods for Clean Oceans Annual Jurisdictional Runoff report and Park Ranger program.

Provided configuration and system support services:

Conducted analysis of project timeline and task evaluation, identified critical stops and developed plan of action to accomplish scheduled tasks for successful Go- live.

Conducted business process and workflow analysis, made recommendations for streamlining and standardizing opportunities and configured in system.

Conducted analysis of TRAKiT system for configuration needs, accuracy and made configuration adjustments in accordance with desired workflows and business processes.

Conducted data migration analysis and developed streamlined methods for mapping and migration to new system.

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CITY OF COACHELLA
Holistic conducted an in- depth System Needs Analysis of the City of Coachella' s existing land management software system ( Eden) and processes surrounding their land development activities which included impacts to water& sewer Utilities and Environmental Compliance Departments. The analysis provided them with the ability to measure existing software system capabilities against newer, more sophisticated systems and identified process improvement/ streamlining opportunities which will allow them to make informed decisions about future procurement of a new software system.

Services provided to the City included the following:

Conducted comprehensive system needs analysis of various systems used, including the City' s existing Eden land management system. and evaluated based on capability, efficiency and accessibility in comparison with newer land management systems available in today' s market.

Conducted comprehensive business process review of land development activities and made recommendations for standardizing and streamlining opportunities.

Coordinated software vendor demonstrations and prepared system cost comparison.

Provided the City with a menu of short-term, mid- term and long-term next steps and made recommendations for actionable goals based on priority.

Provided roadmap for actionable items with realistic timelines for execution.

CITY OF LA QUINTA
The City of La Quinta sought to implement an on- line land management system for the Design & Development Department. Angelica Zarco ( Systems Integration Manager). spearheaded implementation of the City' s new land management software system, TRAKiT. which included strategic planning, streamlining. standardizing, implementation and integration of processes and systems for the Design and Development Department.

Responsibilities included the following:

Development, configuration and implementation of the City' s software system ( TRAKiT) utilized for all development related, business license and Short-Term Vacation Rental application, review, processing and payment activities for both over the counter and online functionality.

Implemented the City' s online, electronic plan review, GIS and mobile inspection platforms.

Engaged with City Staff to understand complex business processes, developed workflows. identified process improvements, streamlining opportunities, standardized business processes and integrated with relative software.

Developed Standard Operating Procedures and User Guides and conducted training for all modules.

Oversaw the City' s Short- Term Vacation Rental Program which involved revamping the marketing and branding of the program.

Development of complex key performance indicators to measure business and system performance.

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Managing. assigning. and directing activities of various Project Action Teams ( PAT' s).

Developing, configuring, and implementing the City' s TRAKiT software system Conducting stakeholder workshops for eTRAKiT online permitting software.

Working with City Staff to understand their business processes. developing process workflows, and identifying process improvement opportunities prior to their integration into TRAKiT.

Developing and implementing standard operating procedures ( SOPs) and user manuals. as well as City policies and best management practices ( BMP' s) Conducting effective staff training utilizing SOP' s and effective training materials

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References
Agency Contact Phone Number Email Address
Holistic References
City of Medford, Oregon Barbara Madruga,
Technology& Innovation Director
541. 774. 2064 blmadruga© cityofmedford. org
City of San Clemente, Brian Brower,
California Information Technology Manager 949. 361. 8259 browerb@san- clemente. org Fee Information
Cost of Services/ Hour Price Total Project Cost
Holistic— 40 hours 125/ hour 5, 000
TOTAL CONTRACT AMOUNT 5, 000

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Agenda Item H

AGENDA STAFF REPORT
DATE: August 11, 2025
TO: Honorable Mayor and City Council
THRU: Patrick Gallegos, City Manager
FROM: Iris Lee, Director of Public Works
SUBJECT: Proposition 218 Protest Public Hearing – Water Rate and Sewer Rate Adjustments
________________________________________________________________ SUMMARY OF REQUEST:

1. That the City Council conduct a public hearing to accept comments on the proposed water and sewer rate adjustments; and,

2. Upon the conclusion of the public hearing, that the City Council adopt Resolution 7668 responding to timely filed written objections to the proposed water and sewer rates pursuant to the requirements of Assembly Bill 2257; and,

3. Upon the conclusion of the public hearing, provided a majority protest against the proposed water rates does not exist, that City Council adopt Resolution 7669 establishing the water rates, effective August 1, 2025; and,

4. Upon the conclusion of the public hearing, provided a majority protest against the proposed sewer rates does not exist, that City Council adopt Resolution 7670 establishing the sewer rates, effective August 1, 2025; and,

BACKGROUND AND ANALYSIS:

Background:

The City’s Water and Sewer utilities are funded by fees received from the ratepayers, also known as Water Enterprise and Sewer Enterprise funds, respectively. The majority of associated expenditures, such as operating and maintenance costs, capital improvements, and reserves are funded through rate-funded revenues, and not the General Fund.

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Rates are regularly evaluated as part of the City’s annual budgeting process to ensure projected revenues are sufficient to cover all Water and Sewer utilityrelated expenditures. The City’s last rate adjustment and cost of service study was approved in February 2021; however, the rates are no longer sufficient to balance ongoing operating costs.

The City retained Raftelis Financial Consultants, Inc. (Raftelis) to conduct a Water and Wastewater Financial Plan and Rate Study (2025 Financial Plan), utilizing the existing rate structures, to develop a financial plan and proposed rates for the water and sewer utilities. The objective of the 2025 Financial Plan is to ensure revenues are sufficient to pay or provide for operation and maintenance, capital improvement projects, adequate debt service coverage ratios, and sufficient reserves. The 2025 Financial Plan considered reserve policies, capital investment requirements for the aging infrastructure to ensure system reliability, inflationary cost increases, current and future State mandates, and health and safety requirements. On May 12, 2025, an overview of the draft 2025 Financial Plan, including analysis results and recommendations for proposed water and sewer rate adjustments, was presented to the City Council.

Water Utility System:

The City owns and maintains a water system and is responsible for ensuring safe and reliable water for potable and fire protection use. These essential services are accomplished through a strategic combination of highly qualified operators and administrative support staff, which includes City departments such as the Public Works Department, City Manager’s Office, City Clerk’s Office, and the Finance Department. Together, the water system’s two (2) reservoirs, two (2) booster stations, four (4) production wells, 73.5 miles of pipeline, and over 5,300 services are properly maintained.

Based on Raftelis’ detailed financial plan analysis, the February 2021 rate adjustments are no longer sufficient to balance the operating costs due to:

1. Increased wholesale import and groundwater costs;

2. Aging infrastructure and deferred maintenance;

3. Overall inflationary impacts; and,

4. On-going introduction of new legislation.

Water Enterprise Fund Reserve Policy:

The water rates have been constructed with a financial plan that corrects the structural deficit and sufficiently funds operations, capital and reserves. A reserve policy was set based on the types of risk the utility faces. • Operating Reserves – to cover day-to-day expenses and maintain sufficient funds to cover operating cash flows, periods of reduced water sales, or unforeseen costs.
o Minimum: 20% of Operating & Maintenance expenditures

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o Target: 25% of Operating & Maintenance expenditures
• Capital Replacement Reserves – to cover a portion of upcoming annual capital expenditures and mitigate unexpected capital needs. o Minimum: 25% of average 5 - year CIP
o Target: 25% of average 5 - year CIP
Proposed Water Debt:

To maintain effective operations, it is necessary to secure Water utility revenue through low-interest State Revolving Loans and market-debt loans. This approach ensures ongoing expenditures can be sustained until the anticipated rate-generated revenues come into effect.

Staff will continue to pursue external funding sources to reduce debt issuances, if possible.

FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Market Debt
Issuance $25M
State Loan (SRF) $2.5M $1M $3M $3M
Wholesale Water Purchase Cost Pass-Through:

The City purchases water from wholesale agencies and has no control over those charges. The City has estimated future wholesale rates; however, if wholesale rates are higher than predicted, the City may pass-through the increase in wholesale water purchase costs as allowable by Government Code Section 53756.

The pass-through amount will not exceed the increase in cost. The pass-through will be calculated as the increase in wholesale water purchase costs divided by annual water use.

Water Bill Components:

Water rates have two (2) components – 1) fixed charges; and 2) variable volumetric charges. Fixed charges are a function of meter size and are charges without respect to use. Volumetric charges are calculated based on the amount of water used multiplied by the rate per unit. The unit is measured in hundred cubic feet (HCF), which is approximately 748 gallons.

Proposed Water Rates:

Current water rate structures will remain the same. That is, a fixed charge by meter size, plus a volumetric rate that is generally broken down into the following:
• A two-tiered Single-Family Residential, Multi-Family Residential, and Leisure World customer class based on consumption; and,

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• A single-tiered rate structure for Commercial, Irrigation, Sunset Aquatic Park, and City customer class based on consumption.

Although the overall rate structure will not change, the amount of the fixed charge, which is based on meter size, is proposed to increase for the Leisure World community based upon a recent evaluation of its meter infrastructure. The City’s engineering consultant, AKM Consulting Engineers (AKM), conducted an independent evaluation of the meter size for the Leisure World community. In an opinion dated April 1, 2025, AKM concluded that the two (2), existing 12-inch service meters serving Leisure World are appropriately sized to account for the community’s “peak hour and maximum day demand plus fire flow.” Beginning with the City’s last rate update in 2021, Leisure World’s fixed rate charge was based on one (1), six-inch meter in accordance with an earlier analysis of Leisure World’s effective flow demand. However, AKM has provided a current and different analysis of the cost of providing service to the Leisure World community.

The tables below illustrate the proposed rate and charge increases for the next five (5) years, subject to pass throughs for increases in the cost to purchase wholesale water. These adjustments were calculated by forecasting revenue, expenses and reserves to establish adequate cost-to-debt ratio.

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Proposed Water Fixed Charges ($/bi-monthly)

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Proposed Water Volumetric Charges ($/hcf)
* Multi-Family tier allocations are determined by multiplying the hcf definition shown above (17 hcf) by the number of dwelling units for a given account. For example, the tier allocation for a Multi-Family Residential (MFR) account with two dwelling units would be equal to 17 hcf X 2 dwelling units = 34 hcf bi-monthly. ** Leisure World tier allocations are determined in the same manner as MFR, by multiplying dwelling units by the individual allocation of 17 hcf.

Sewer Utility System:

The City also owns and maintains a Wastewater (also known as Sewer) collections system. This system consists of 181,000 linear feet of pipeline, approximately 800 manholes, and six (6) pump stations. Similar to the Water Utility System, the Sewer Utility System is supported by technical and administrative staff through a rate-supported Sewer Enterprise fund.

Sewer Enterprise Fund Reserve Policy:

The sewer rates have been constructed with a financial plan that corrects the structural deficit and sufficiently funds operations, capital and reserves. A reserve policy was set based on the types of risk the utility faces. • Operating Reserves – to cover day-to-day expenses and maintain sufficient funds to cover operating cash flows, periods of reduced revenue, or unforeseen costs.
o Minimum: 25% of Operating & Maintenance expenditures
o Target: 25% of Operating & Maintenance expenditures
• Capital Replacement Reserves – to cover a portion of upcoming annual capital expenditures and mitigate unexpected capital needs. o Minimum: 25% of average 5 - year CIP

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o Target: 25% of average 5 - year CIP
Proposed Sewer Debt:

The required Sewer Utility revenue to properly sustain operations will require market-debt issuance. This will allow expenditures to continue while the proposed rate-generated revenues catch up.

Staff will continue to pursue more favorable external funding sources to reduce debt issuance, if possible.

FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Market Debt
Issuance $6M $4M $4M
Sewer Bill Components:

Sewer Rates have two (2) components – 1) fixed charges; and 2) variable volumetric charges. Fixed charges are a function of customer classification and are charges without respect to use. The City does not measure wastewater flow, but instead estimates flows based on water use by applying a return-to-sewer factor (RTS) to non-residential water use. Volumetric charges, therefore, are calculated based on the amount of water used multiplied by the rate per unit.

Proposed Sewer Rates:

The current sewer rate structures will remain the same. • Single Family Residential: fixed charge;
• Other Customer Classes: fixed charge plus volumetric rate based on water consumption.

The table below illustrates the proposed rate and charge increases for the next five (5) years. These adjustments were calculated by forecasting revenue, expenses and reserves to establish adequate cost-to-debt ratio.

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Proposed Sewer Fixed Charges ($/bi-monthly &
Volumetric Charges ($/hcf of water)
Proposition 218 Requirements:

Water and sewer rate adjustments are subject to Proposition 218’s (California Constitution Article XIIII D) public hearing and majority protest procedures. On May 12, 2025, City Council set a public hearing on the proposed water and sewer rate adjustments for July 14, 2025, and directed staff to initiate the Proposition 218 majority protest process for the proposed water and sewer rate adjustments in compliance with Proposition 218.

At the conclusion of the public hearing, the City Clerk will complete the tabulation of all written protests received from record property owners receiving water or

Page 9 ends

sewer service, water customers and sewer customers, including those received during the public hearing. Only one (1) protest will be counted per parcel in determining the existence of a majority protest. The City Clerk will then report on the results to the City Council.

If, according to the final tabulation, the written protests submitted against the water rate adjustments represent more than 50% of all the parcels in the City receiving water service, a majority protest exists, and the City Council shall not impose the water rate increase. If the final tabulation of written protests represents less than 50% of all the parcels in the City receiving water service, the City Council could consider implementing the water rate increases effective August 1, 2025, and on July 1 for each year from 2026 through 2029.

If, according to the final tabulation, the written protests submitted against the sewer rate adjustments represent more than 50% of all the parcels in the City receiving sewer service, a majority protest exists, and the City Council shall not impose the sewer rate increase. If the final tabulation of written protests represents less than 50% of all the parcels in the City receiving sewer service, the City Council could consider implementing the sewer rate increases effective August 1, 2025, and on July 1 for each year from 2026 through 2029.

Exhaustion of Administrative Remedies Procedure:

The State of California Legislature enacted Assembly Bill 2257 (Exhaustion of Administrative Remedies Procedure) (AB 2577), effective January 1, 2025, which assists local agencies in avoiding litigation by having an opportunity to address or resolve any written objections before making a final decision to impose or adjust water and sewer rates. AB 2257 added Sections 53759.1 and 53759.2 to the Government Code and establishes a formal written objection procedure requiring persons and entities to timely raise, in writing, specific Proposition 218 concerns about proposed water and sewer rate adjustments or be barred from filing litigation alleging noncompliance with Proposition 218.

On May 12, 2025, City Council adopted Resolution 7645 establishing an Exhaustion of Administration Remedies Procedure pursuant to AB 2577. The Notice of Public Hearing includes the substantive and procedural requirements for submitting a written objection to the proposed water and sewer rates in accordance with the requirements of AB 2257. As set forth in the Notice of Public Hearing, the City set July 7, 2025 at 5:00 p.m., as the deadline for the submittal of written objections, which date is at least 45 days after the notice was mailed as required by AB 2257.

The City Clerk received three (3) timely submitted written objections pursuant to AB 2577. Copies of the three (3) written objections are set forth in Exhibit A of proposed Resolution 7668. Pursuant to AB 2257, the City Council must respond in writing to timely submitted written objections. The City’s written responses to each timely objection are set forth in Exhibit B of the same Resolution. In accordance with AB 2257, the responses include the grounds for which a

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challenge is not resulting in amendments to the proposed water and sewer rate adjustments and explain the substantive basis for retaining or altering the proposed water and sewer rate adjustments in response to each objection. In considering the responses, the City Council must determine the following: (1) whether the objections and the responses warrant clarifications to the proposed water and/or sewer rates; (2) whether to reduce the proposed water and/or sewer rates; (3) whether to further review before making a determination on whether clarification or reduction is needed; and (4) whether to proceed with the Public Hearing.

ENVIRONMENTAL IMPACT:

This item is not subject to the California Environmental Quality Act (CEQA) because CEQA does not apply to the establishment, modification, structuring, restructuring, or approval of water and sewer rates under Public Resources Code Section 21080(b)(8). The proposed rates are proposed to meet operating expenses, purchase necessary supplies and equipment, meet financial reserve needs, and fund capital projects necessary to maintain service within the existing service area. Furthermore, it is not a “project” as defined under Section 15378(b) of the state CEQA Guidelines. This item is also exempt from CEQA pursuant to Section 15061(b)(3) of the Guidelines because it can be seen with certainty that the approval of Water and Sewer Utility Rates will not have a significant effect on the environment.

LEGAL ANALYSIS:

The City Attorney has approved the resolutions as to form.

FINANCIAL IMPACT:

The anticipated increase in water and sewer revenue required to sustain proper utility operations, is summarized below:

Projected Water Utility Revenue Adjustment
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Projected
Revenue
Adjustment
$2.67M $2.23M $595k $625k $660k
Projected Sewer Utility Revenue Adjustment
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Projected
Revenue
Adjustment
$800k $665k $535k $565k $195k
STRATEGIC PLAN:

This item is not applicable to the Strategic Plan.

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RECOMMENDATION:

1. That the City Council conduct a public hearing to accept comments on the proposed water and sewer rate adjustments; and,

SUBMITTED BY: NOTED AND APPROVED:

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

A. Resolution 7668 – Responding to Written Objections
B. Resolution 7669 – Approving Water Rates
C. Resolution 7670 – Approving Sewer Rates
RESOLUTION 7668

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL

RESPONDING TO TIMELY FILED WRITTEN OBJECTIONS TO
PROPOSED ADJUSTMENTS TO THE RATES FOR THE CITY’S

WATER AND SEWER SERVICE CHARGES PURSUANT TO THE
REQUIREMENTS OF STATE ASSEMBLY BILL 2257
WHEREAS, the City of Seal Beach maintains a municipal Water Utility that provides water services and a municipal Sewer Utility that provides wastewater (sewer) collection services to residents and businesses; and, WHEREAS, the City’s Water Utility and Sewer Utility operational and capital improvement costs have increased substantially since the last rate adjustment, and are estimated to continue increasing significantly; and, WHEREAS, the City’s currently established water and sewer rates are not adequate to meet increasing operations and maintenance and capital improvements costs without compromise to system operations; and, WHEREAS, on June 12, 2023, the City retained Raftelis Financial Consultants, Inc. to conduct a Water and Wastewater Financial Plan and Rate Study (2025 Financial Plan) to analyze the cost of providing water and sewer services and recommend appropriate water and sewer rate adjustments; and, WHEREAS, on May 12, 2025, an overview of the draft 2025 Financial Plan, including recommendations for proposed water and sewer rate adjustments were presented to the City Council; and,
WHEREAS, in order to adjust the water and sewer rates, the City must comply with Article XIIID of the Constitution, more commonly known as Proposition 218; and,
WHEREAS, on September 25, 2024, Governor Newsom approved State Assembly Bill 2257 (AB 2577), effective January 1, 2005, which added Sections 53759.1 and 53759.2 to the California Government Code; and, WHEREAS, AB 2257 creates an exhaustion of administrative remedies requirement that, if implemented by a local public agency, requires persons and entities to submit a written objection that specifies the grounds for alleging noncompliance of proposed water and sewer rates with Proposition 218 prior to the deadline established by the local public agency, or be barred from any right to challenge the water and sewer rates through a legal proceeding; and, WHEREAS, on May 12, 2025, City Council adopted Resolution 7645 to provide for an exhaustion of administrative remedies requirement pursuant to AB 2257 in connection with the proposed water and sewer rate adjustments and set July 7, 2025 at 5:00 p.m., as the deadline for the submittal of written objections; and, WHEREAS, on May 12, 2025, City Council adopted Resolution 7644 setting a public hearing on the proposed water and sewer rate adjustments on July 14, 2025 (the “Public Hearing”), and directing staff to initiate the Proposition 218 majority protest process for the proposed water and sewer rate adjustments; and, WHEREAS, in accordance with the requirements of AB 2257 and Proposition 218, the City provided mailed notice of the Public Hearing, which notice includes, among other information, the substantive and procedural requirements for submitting a written objection to the proposed water and sewer rate adjustments and a statement that the failure to timely object in writing to the proposed water and sewer rate adjustments bars any right to challenge the proposed rate adjustments through a legal proceeding; and,
WHEREAS, the City complied with the provisions set forth in AB 2257 for establishing an exhaustion of remedies requirement in connection with the proposed water and sewer rate adjustments, including, among other things, providing not less than 45 days from the date of the mailing the notice of the Public Hearing for persons and entities to submit a written objection to the proposed water and sewer rate adjustments; and,
WHEREAS, as of the July 7, 2025, 5:00 p.m. deadline for submitting written objections, the City received three (3) written objections to the proposed water rate adjustments and/or the proposed sewer rate adjustments, which objections are set forth in Exhibit A, attached hereto and incorporated herein (Objections); and, WHEREAS, this Resolution, as required by AB 2577, responds in writing to the Objections, and the responses to the Objections are set forth in Exhibit B, attached hereto and incorporated herein (Responses); and,
WHEREAS, each Response includes the grounds for which a challenge is not resulting in amendments to the proposed water rate adjustments and/or proposed sewer rate adjustments, as applicable, and an explanation of the substantive basis for retaining or altering the proposed water rate adjustments and/or proposed sewer rate adjustments, as applicable in response to the Objection.

NOW, THEREFORE, the Seal Beach City Council does resolve, declare, determine and order as follows:

Section 1. The City Council finds the Recitals set forth in this Resolution are true and correct and are incorporated by reference.

Section 2. The City Council hereby adopts the Responses set forth in Exhibit B, attached hereto.

Section 3. In considering the Responses, the City Council determined (1) whether the Objections and the Responses warrant clarifications to the proposed water rate adjustments and/or proposed sewer rate adjustments; (2) whether to reduce the proposed water rates and/or proposed sewer rates; (3) whether to undertake further review before making a determination on whether clarification or reduction is needed; and (4) whether to proceed with the Public. If any part of this Ordinance or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or their application and, to this end, the provisions of this Ordinance are severable.

Section 4. If any provision of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or their application and, to this end, the provisions of this Resolution are severable.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 11th day of August 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 7668 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 11
th day of August 2025.

Gloria D. Harper, City Clerk
Exhibit A – Written Objections (redacted)
Exhibit B – Responses to Written Objections

EXHIBIT A
Written Objections (redacted)
City of Seal Beach June 19, 2025
Office of the City Clerk
211 Eighth Street
Seal Beach, CA 90740
Please register my NO vote to this outrageously high water and wastewater rate hike.

Water rate structures that exclude a flat "door fee" service charge often appear to promote conservation or fairness by charging only by meter size and usage. However, in practice, they can be deeply inequitable for several reasons.

Moreover, in areas that are not metered, like the 6,608 homes in Leisure World, the inequity is ever worse. This study is such an example of inequity and does not meet Prop 218 standards requiring equitable billing.

1. Essential Infrastructure Costs Are Shared by All: Every customer, regardless of how much water they use, benefits from access to a maintained, functioning water system—pipes, treatment plants, emergency readiness, meter reading, billing systems, and more. These fixed costs do not vary with usage and must be covered to ensure a reliable water supply. Without a flat door fee, these infrastructure costs are unfairly shifted onto single family homes and higher usage customers, even though low-usage customers benefit equally from the availability of service.

2. Low Users Don’t Pay Their Fair Share: While it may seem equitable to charge multi-family based only on meter size and consumption, very low users—including vacant properties, second homes, or seasonal short-term rentals—still rely on the water system being ready to serve them at any time. Without a door fee, these properties contribute little or nothing toward the fixed costs of maintaining that readiness.

3. Cost Burden Shifts to Families and Low-Income Households: Meter size flat rates with volume usage systems often shift the cost burden onto single ¾” – 1” meters and larger households, which may include low-income or multigenerational families. These households may have higher water use due to basic needs (cooking, hygiene, laundry) but not necessarily the ability to pay more. A flat door fee ensures all users contribute a fair minimum amount, rather than penalizing single family dwellings and those who may use slightly more water due to family size or circumstance.

4. Discourages System Equity and Resilience Investments: Utilities trying to fund projects for equity—like replacing lead pipes, expanding access, or supporting affordability programs—need stable revenue.

Without base door fees, funding such initiatives becomes harder, exacerbating disparities for families and vulnerable populations.

Having reviewed the new wastewater rate hikes, it is obvious that once again, the single-family dwelling is subsidizing others. If single family homes can be charged a flat fee on sewer, so should every dwelling unit using our sewer system. Multi-family homes once again are being subsidized by single family residences.

Also, Sunset Aquatic Park is the sole user of their sewer system and yet to upgrade their system, all of Seal Beach is being charged. Again, this is not equitable. I oppose the deeply flawed and inequitable rate increase on the grounds that it has single family dwellings supporting multi-family units and Sunset Aquatic Park. Prop 218 requires that no segment of our population subsidize another. This study falls short of that goal on both Water and Wastewater.

While I agree our infrastructure needs work, until the billing is equitable, I oppose.

Sincerely,
Ellery Deaton
Water/Wastewater Bill Payer

1 Iris Lee
From: Brandon DeCriscio
Sent: Monday, July 7, 2025 11:53 AM
To: Iris Lee; Patrick Gallegos
Subject: FW: Written Protest - Exhaustion of Administrative Remedies FYI…
Apologies if this is a duplicate and Gloria has already sent it.

Thank you,
Brandon DeCriscio
Deputy City Clerk
(562) 431-2527 x 1306
From: Theresa Miller
Sent: Monday, July 7, 2025 11:32 AM
To: Brandon DeCriscio <[email protected]>
Subject: Fwd: Written Protest - Exhaustion of Administrative Remedies Please confirm receipt of this email.

Thnak you.
---------- Forwarded message ---------
From: Theresa Miller
Date: Mon, Jul 7, 2025 at 11:27 AM
Subject: Written Protest - Exhaustion of Administrative Remedies To: Gloria Harper <[email protected]>
Cc: Joe Kalmick <[email protected]>, Lisa Landau <[email protected]>, <[email protected]>, <[email protected]>, Nathan Steele <[email protected]>
Theresa Miller

July 7, 2025

2 City Clerk
City of Seal Beach
211 Eighth Street
Seal Beach, CA 90740

Re: Written Protest and Objection to Proposed Water and Sewer Rate Increases Under Proposition 218 – Exhaustion of Administrative Remedies

Dear City Clerk and Members of the City Council:

I am the record property owner of , located within the City of Seal Beach. I hereby submit this written protest and formal objection to the proposed water and sewer rate increases scheduled for a public hearing on July 14, 2025, pursuant to the Proposition 218 notice issued by the City.

This written protest constitutes an objection to the proposed rates under Article XIII D, Section 6 of the California Constitution. Furthermore, this submission serves as a formal notice of exhaustion of administrative remedies. I intend this protest to fully preserve my right to challenge the proposed rate increases in any future legal or administrative forum.

My specific objections include, but are not limited to, the following:

1. The proposed water and sewer rates appear to exceed the proportional cost of service attributable to my property, in violation of Proposition 218.

2. The City has failed to clearly demonstrate that the revenues derived from the increased water and sewer rates will not be used for purposes other than those for which the fees are charged.

3. The notice provided to ratepayers lacks sufficient detail to determine whether the methodology used in the rate study is consistent with constitutional requirements.

4. The public process surrounding these changes lacks transparency and may not meet the standards required by the California Constitution and Government Code.

I respectfully request that the City Council reject the proposed water and sewer rate increases and direct staff to revise the rate structure in compliance with applicable law.

Please confirm receipt of this objection and ensure it is included in the record of the public hearing.

Sincerely,
Theresa Miller

EXHIBIT B
Responses to Written Objections
Response to Ellery Deaton Written Objection, dated June 19, 2025 Comment #1

1. Essential Infrastructure Costs Are Shared by All: Every customer, regardless of how much water they use, benefits from access to a maintained, funcƟoning water system—pipes, treatment plants, emergency readiness, meter reading, billing systems, and more. These fixed costs do not vary with usage and must be covered to ensure a reliable water supply. Without a flat door fee, these infrastructure costs are unfairly shiŌed onto single family homes and higher usage customers, even though low-usage customers benefit equally from the availability of service.

Response #1
The City agrees that every customer benefits from the City’s water system regardless of how much water they use and that fixed costs must be covered to ensure a reliable water supply. The City does not agree that, without a “flat door fee”, infrastructure costs are unfairly shifted from low-usage customers to higher usage customers. For purposes of this response, the City has assumed that a “flat door fee” refers to a fixed water charge that is the same for each dwelling unit (e.g., home, apartment, condo) regardless of how much water used.

The City’s water and sewer charges are property-related fees, meaning that they are governed by Proposition 218, which was approved by California voters in 1996 and added Article XIII D to the California Constitution. Article XIII D imposes substantive requirements for property-related fees, including a requirement that the amount of the fee imposed on any parcel shall not exceed the proportional cost of the service attributable to that parcel.

This means that the City’s cost of providing water and sewer service must be allocated among the parcels in the City in a reasonable manner that does not result in one or more customers unfairly subsidizing another customer or customers. Proposition 218 requires rate structuring on the basis of parcels, rather than units.

To assist the City in ensuring that the water and sewer charges, as proposed to be modified and increased, meet the substantive requirements of Proposition 218, the City hired Raftelis, a rate consultant. Raftelis prepared a Water and Wastewater Financial Plan and Rate Study, dated June 17, 2025 (the “2025 Financial Plan”). Except as noted therein and below, the 2025 Financial Plan uses the cost-of-service analysis and rate structure design that Raftelis completed in 2020 (the “2020 Study”). In 2021, the City’s water and sewer rates were set on the basis of the 2020 Study in compliance with the Proposition 218 proportionality requirement. The rate design set forth in the 2020 Study is consistent with the rate setting principles established by the American Water Works Association in the Manual M1: Principles of Water Rates, Fees and Charges, Seventh Edition (“Manual”).

The 2025 Financial Plan relies on the rate design in the 2020 Study, with the exception that the amount of the fixed charge for the Leisure World community is proposed to increase based upon a recent evaluation of its meter infrastructure. The City’s engineering consultant, AKM Consulting Engineers (“AKM”), conducted an independent evaluation of the meter size for the Leisure World community. In an opinion dated April 1, 2025, AKM concluded that the two existing 12-inch service meters serving Leisure World are appropriately sized to account for the community’s “peak hour and maximum day demand plus fire flow.” Beginning with the City’s last rate adjustment in 2021, Leisure World’s fixed rate charge was based on one 6-inch meter in accordance with an earlier analysis of Leisure World’s eƯective flow demand. However, AKM has provided a current and diƯerent analysis of the cost of providing service to the Leisure World community.

Raftelis’ water cost-of-service analysis allocates costs to each parcel based on:
1) Water use;
2) Number of meters (if a customer has more than one); and, 3) Meter size.

The fixed charge recovers a portion of infrastructure costs and recovers those costs in proportion to meter size, which is an industry standard. The fixed charges do not shift costs from low use customers onto single family homes and higher use customers because the rate structure ensures that the charges take into account the diƯerent demands that each residential customer places on the City’s water system in proportion to meter size. The fixed charge is based on the premise that the meter size is proportional to potential infrastructure use. A meter of a certain size has the potential to demand a certain volume of water, and the water system infrastructure is sized accordingly. Larger meters can demand more water and therefore customers pay in proportion to the potential flow through the meter.

A flat door fee would mean that an unmetered dwelling unit (i.e., a door) would be subject to the costs that are recovered in the fixed charge as though it had a meter. The fixed charge (often called a Ready to Serve Charge) recovers three types of costs shown below. Set forth below is an explanation of why the rate structure does not recover these costs on a “per door” basis.

1. Customer billing costs - Customer billing costs involve answering customer calls, sending paper bills and reading customer meters and since only metered customers get a bill (the apartment owner/manager gets a bill for the meters serving the complex) these costs are not charged on a per door basis.

2. Meter maintenance costs - Since dwelling units in an apartment do not have a meter, meter maintenance costs are not charged on a per door basis.

3. Fixed capacity (infrastructure) costs – Since an entire apartment complex’s potential demand is reflected in the meter size serving it and the meter’s associated hydraulic capacity, these costs are allocated in proportion to the meter (or meters) serving a complex and not charged on a per door basis.

The single-family class and all customer classes are paying their proportional share of the costs of each of these three items. It is an industry standard and in alignment with the substantive requirements of Proposition 218 for property-related fees to recover infrastructure costs through both the fixed charge (in proportion to meter size) and the volumetric rate. Recovering a portion of infrastructure costs in proportion to actual volumetric use ensures that high volume users pay in proportion to actual use as opposed to potential use.

Rate setting is a complex process, and it is possible that a variety of rate structures could meet Proposition 218’s requirement that the amount of the water or sewer charge imposed on any parcel shall not exceed the proportional cost of the service attributable to the parcel. To transition to a flat per door rate would require a new rate study and cost-ofservice analysis to support such rate structure. However, for the reasons discussed above, it is unlikely that a new study and analysis could support a flat per door rate structure as meeting Proposition 218’s proportionality requirement.

Comment #2

2. Low Users Don’t Pay Their Fair Share: While it may seem equitable to charge multi-family based only on meter size and consumption, very low users—including vacant properƟes, second homes, or seasonal short-term rentals—sƟll rely on the water system being ready to serve them at any Ɵme.

Without a door fee, these properƟes contribute liƩle or nothing toward the fixed costs of maintaining that readiness.

Response #2
The “very low users” mentioned above – vacant properties, second homes or seasonal short-term rentals – pay the fixed charge (Ready to Serve Charge) even if they did not use water. This is how they contribute towards the fixed costs of the system and pay their fair share. Very low users are paying their proportional cost of service covered by the fixed charge, as described in Responses #1.

Comment #3

3. Cost Burden Shifts to Families and Low-Income Households: Meter size flat rates with volume usage systems oŌen shiŌ the cost burden onto single ¾” – 1” meters and larger households, which may include low-income or mulƟgeneraƟonal families. These households may have higher water use due to basic needs (cooking, hygiene, laundry) but not necessarily the ability to pay more. A flat door fee ensures all users contribute a fair minimum amount, rather than penalizing single family dwellings and those who may use slightly more water due to family size or circumstance.

Response #3
See Response #1.

Comment #4

4. Discourages System Equity and Resilience Investments: Utilities trying to fund projects for equity—like replacing lead pipes, expanding access, or supporƟng affordability programs—need stable revenue. Without base door fees, funding such initiatives becomes harder, exacerbaƟng dispariƟes for families and vulnerable populations.

Response #4
Stable revenue is a function of the proportion of revenue collected from the fixed charge (Ready to Serve Charge) out of total revenue (fixed plus volumetric). This would only change if the City purposefully increased the proportion of revenue derived from the fixed charge.

In other words, adding a “per door” charge, without increasing the proportion of fixed revenue would not impact revenue stability. It would only redistribute the proportion of fixed revenue that each class or customer pays. Stable revenue can be achieved regardless of “door” charges.

Comment #5
Having reviewed the new wastewater rate hikes, it is obvious that once again, the single-family dwelling is subsidizing others. If single family homes can be charged a flat fee on sewer, so should every dwelling unit using our sewer system. MulƟ-family homes once again are being subsidized by single family residences.

Response #5
Single-family homes are paying their fair share, in accordance with the rate structure which allocates costs in proportion to parameters described in Response #1 and in alignment with Proposition 218.

The 2020 Study allocated costs between single-family and multi-family customers based on a Return to Sewer (RTS) factor, ensuring that each customer class pays in proportion to its usage. Therefore, single-family homes are not subsidizing multi-family properties.

Because sewer discharge from single-family homes tends to be more consistent and predictable compared to other customer classes, it was determined that a flat rate was appropriate and equitable approach for single-family homes.

Comment #6
Also, Sunset Aquatic Park is the sole user of their sewer system and yet to upgrade their system, all of Seal Beach is being charged. Again, this is not equitable
Response #6
Water - The fixed charge for the Sunset Aquatic Park meter size is higher than the fixed charge for other customers with the same meter size. This is to recover the added capital cost associated with the water line feeding Sunset Aquatic Park.

Sewer – Sunset Aquatic Park has a separate sewer service equity charge and sewer capital equity charge to recover added cost associated with the sewer service.

Based on the foregoing responses, the City Council determines that the objections described herein do not warrant (1) clarifications to the proposed water rates or sewer rates; (2) a reduction to the proposed water rates or sewer rates, (3) further review, or (4) delaying the public hearing on the proposed water and sewer rate adjustments.

Response to Eugenya Yasnogorodsky Written Objection, received June 10, 2025 Comment #1
Response #1
Comment noted.

Comment #2
Response #2
Your concern regarding the personnel cost inflator is noted. The 8% annual personnel cost projection is a comprehensive estimate that includes merit increases, cost of living adjustments (COLAs), retirement costs, insurance, and other legally obligated personnelrelated expenses. This projection is based on recent cost trends and anticipated future obligations and is necessary to maintain service levels and staƯing required for utility operations.

Additionally, the claim that this personnel inflator is applied to capital improvement projects is incorrect. Capital costs are modeled separately with their own inflators—5% for FY 2025-26, 4% for FY 2026-27, and 3% annually thereafter.

Response to Theresa Miller Written Objection, received July 7, 2025 Comment #1
The proposed water and sewer rates appear to exceed the proportional cost of service attributable to my property, in violation of Proposition 218.

Response #1
The comment asserts that the proposed water and sewer rates appear to exceed the proportional cost of service attributable to the commenter’s property, but does not include any specific information regarding alleged noncompliance with Proposition 218. However, the City notes that the City’s water and sewer charges are propertyrelated fees, meaning that they are governed by Proposition 218, which was approved by California voters in 1996 and added Article XIII D to the California Constitution.

Article XIII D imposes substantive requirements for property-related fees, including a requirement that the amount of the fee imposed on any parcel shall not exceed the proportional cost of the service attributable to that parcel. This means that the City’s cost of providing water and sewer service must be allocated among the parcels in the City in a reasonable manner that does not result in one or more customers unfairly subsidizing another customer or customers. Proposition 218 requires rate structuring on the basis of parcels, rather than units.

To assist the City in ensuring that the water and sewer charges, as proposed to be modified and increased, meet the substantive requirements of Proposition 218, including that the amount of the fee imposed on any property does not exceed the proportional cost of the water and sewer services attributable to the parcel, the City hired Raftelis, a rate consultant. Raftelis prepared a Water and Wastewater Financial Plan and Rate Study, dated June 17, 2025 (the “2025 Financial Plan”). The 2025 Financial Plan uses the cost-of-service analysis and rate structure design that Raftelis completed in 2020 (the “2020 Study”). In 2021, the City’s water and sewer rates were set on the basis of the 2020 Study in compliance with the Proposition 218 proportionality requirement. The rate design set forth in the 2020 Study is consistent with the rate setting principles established by the American Water Works Association in the Manual M1: Principles of Water Rates, Fees and Charges, Seventh Edition (“Manual”).

Raftelis’ cost-of-service analysis allocates costs to each customer class based on:
1) Water use/water discharged to the sewer;
2) Number of meters (if a customer has more than one); and, 3) Meter size.

Comment #2
The City has failed to clearly demonstrate that the revenues derived from the increased water and sewer rates will not be used for purposes other than those for which the fees are charged.

Response #2
The comment does not include any specific information alleging that the revenues derived from the proposed water and sewer rates will be used for purposes other than those for which the fees are charged.

The City strictly complies with all applicable laws that govern the use of water and sewer utility revenues. Revenues collected from water and sewer rates are legally restricted and are accounted for in separate enterprise funds, entirely distinct from the City’s General Fund. These funds have their own accounting code structure to ensure transparency and proper tracking of all revenues and expenditures. By law, and as a matter of City policy, these revenues can only be used for the costs of providing water and sewer services, including operations, maintenance, capital improvements, and system reinvestment.

The City of Seal Beach undergoes an independent annual financial 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.

Comment #3
The notice provided to ratepayers lacks suƯicient detail to determine whether the methodology used in the rate study is consistent with constitutional requirements.

Response #3
The Notice of Public Hearing to Consider Proposed Water and Sewer Rate Adjustments (“Notice”) was prepared in accordance with the requirements of Proposition 218, and contains all the necessary information required by law. Optional supplemental information was also included to better explain the rate adjustment process and described the City’s water and sewer infrastructure.

As noted in the Notice, the reasons for the proposed rate adjustments, the basis upon which they were calculated, and the amount of the proposed rates are described in more detail in the 2025 Financial Plan and the 2020 Study posted on the City’s webpage at utilityratestudy.sealbeachca.gov and available for review at the City Clerk’s OƯice.

Comment #4
The public process surrounding these changes lacks transparency and may not meet the standards required by the California Constitution and Government Code.

Response #4
The comment does not include any specific information regarding an alleged lack of transparency or how the public process does not meet the requirements of Proposition 218 and only states that the “public process may not meet the standards required by the California Constitution and Government Code”. However, the City notes that the public process for considering the proposed water and sewer rates fully complies with Proposition 218. As described in the Notice of Public Hearing, which was mailed to record owners and customers of record at least 45 days prior to the deadline for submitting written objections, the City will respond to all timely submitted written objections, consider all timely submitted written protests and all testimony at the public hearing, and determine whether there is a majority protest prior to considering approval of the proposed rates.

RESOLUTION 7669

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
ESTABLISHING RATES FOR THE CITY’S WATER SERVICE
CHARGES EFFECTIVE ON AUGUST 1, 2025, JULY 1, 2026,
JULY 1, 2027, JULY 1, 2028, AND JULY 1, 2029
WHEREAS, the City of Seal Beach maintains a municipal Water Utility that provides water services to residents and businesses; and, WHEREAS, on February 22, 2021, City Council adopted Resolution 7114 to adjust water rates; and,
WHEREAS, the City’s Water Utility operational and capital improvement costs have increased substantially since the last rate adjustment, and are estimated to continue increasing significantly; and,
WHEREAS, the City’s currently established water rates are not adequate to meet increasing operations and maintenance and capital improvements costs without compromise to system operations; and,
WHEREAS, on June 12, 2023, the City retained Raftelis Financial Consultants, Inc. to conduct a Water and Wastewater Financial Plan and Rate Study to analyze the cost of providing water and sewer services, and recommend appropriate water and sewer rate adjustments (2025 Financial Plan); and,
WHEREAS, on May 12, 2025, an overview of the draft 2025 Financial Plan, including recommendations for proposed water rate adjustments was presented to the City Council; and,
WHEREAS, in order to adjust the water rates, the City must comply with Article XIIID of the California Constitution, more commonly known as Proposition 218; and,
WHEREAS, on May 12, 2025, City Council adopted Resolution 7644 setting a public hearing on the proposed water and sewer rate adjustments on July 14, 2025 (Public Hearing), and directing staff to initiate the Proposition 218 majority protest process for the proposed water and sewer rate adjustments; and, WHEREAS, the City provided mailed notice of the Public Hearing in accordance with the requirements of Proposition 218 and held the Public Hearing on July 14, 2025; and,
WHEREAS, at the Public Hearing, the City Council considered the 2025 Financial Plan and heard and considered all oral testimony and written protests and materials submitted regarding the proposed water rate adjustments; and, WHEREAS, following the conclusion of the Public Hearing, in conformity with Proposition 218, the City Council determined that no majority protest against the proposed water rates exist (i.e., written protests against the proposed water rates submitted and not withdrawn do not represent a majority of the parcels (50% +1) that receive water service).

NOW, THEREFORE, the Seal Beach City Council does resolve, declare, determine and order as follows:

Section 1. The City Council finds the Recitals set forth in this Resolution are true and correct and are incorporated herein by reference.

Section 2. The City Council hereby repeals Resolution 7114 and adopts the following water rates, subject to potential pass-through of increases in wholesale water purchase costs:

Proposed Water Fixed Charges ($/bi-monthly)
Proposed Water Volumetric Charges ($/hcf)
* Multi-Family and Leisure World tier allocations are determined by multiplying the hcf by the number of dwelling units for a given account.

Section 3. The City purchases water from the Orange County Water District and Municipal Water District of Orange County and has no control over the charges from these wholesale agencies. As part of the 2025 Financial Plan, the City estimated future wholesale costs. However, if wholesale costs are higher than predicted, the City may pass through to customers the increase in wholesale water purchase costs. The pass-through will be calculated based on the increase in wholesale water purchase costs compared to projected wholesale costs included in the 2025 Financial Plan, divided by customer annual volumetric water use. Notice of any adjustment to passthrough costs will be provided 30 days or more before the effective date of the adjustment.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 11th day of August 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 7669 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 11th day of August 2025.

Gloria D. Harper, City Clerk
RESOLUTION 7670

A RESOLUTION OF THE SEAL BEACH CITY COUNCIL
ESTABLISHING RATES FOR THE CITY’S WASTEWATER
(SEWER) SERVICE CHARGES EFFECTIVE ON AUGUST 1, 2025,
JULY 1, 2026, JULY 1, 2027, JULY 1, 2028, AND JULY 1, 2029 WHEREAS, the City of Seal Beach maintains a municipal Sewer Utility that provides sewer services to residents and businesses; and, WHEREAS, on February 22, 2021, the City Council adopted Resolution 7115 to adjust the rates for the City’s wastewater (sewer) service charges; and, WHEREAS, the City’s Sewer Utility operational and capital improvement costs have increased substantially since the last rate adjustment, and are estimated to continue increasing significantly; and,
WHEREAS, the City’s currently established sewer rates are not adequate to meet increasing operations and maintenance and capital improvements costs without compromise to system operations; and,
WHEREAS, on June 12, 2023, the City retained Raftelis Financial Consultants, Inc. to conduct a Water and Wastewater Financial Plan and Rate Study to analyze the cost of providing water and sewer services, and recommend appropriate water and sewer rate adjustments (2025 Financial Plan); and,
WHEREAS, on May 12, 2025, an overview of the draft 2025 Financial Plan, including recommendations for proposed sewer rate adjustments was presented to the City Council; and,
WHEREAS, in order to adjust the sewer rates, the City must comply with Article XIIID of the California Constitution, more commonly known as Proposition 218; and,
WHEREAS, on May 12, 2025, City Council adopted Resolution 7644 setting a public hearing on the proposed water and sewer rate adjustments on July 14, 2025 (the “Public Hearing”), and directing staff to initiate the Proposition 218 majority protest process for the proposed water and sewer rate adjustments; and, WHEREAS, the City provided mailed notice of the Public Hearing in accordance with the requirements of Proposition 218 and held the Public Hearing on July 14, 2025; and,
WHEREAS, at the Public Hearing, the City Council considered the 2025 Financial Plan and heard and considered all oral testimony and written protests and materials submitted regarding the proposed sewer rate adjustments; and, WHEREAS, following the conclusion of the Public Hearing, in conformity with Proposition 218, the City Council determined that no majority protest against the proposed water rates exist (i.e., written protests against the proposed sewer rates submitted and not withdrawn do not represent a majority of the parcels (50% +1) that receive sewer service).

NOW, THEREFORE, the Seal Beach City Council does resolve, declare, determine and order as follows:

Section 1. The City Council finds the Recitals set forth in this Resolution are true and correct and are incorporated herein by reference.

Section 2. The City Council hereby repeals Resolution 7115 and adopts the following sewer rates:

Proposed Sewer Fixed Charges ($/bi-monthly & Volumetric Charges ($/hcf of water) Section 3. If any provision of this Resolution or its application is deemed invalid by a court of competent jurisdiction, the City Council intends that such invalidity will not affect the effectiveness of the remaining provisions or their application and, to this end, the provisions of this Resolution are severable.

PASSED, APPROVED AND ADOPTED by the Seal Beach City Council at a regular meeting held on the 11th day of August 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 7670 on file in the office of the City Clerk, passed, approved, and adopted by the City Council at a regular meeting held on the 11th day of August 2025.

Gloria D. Harper, City Clerk
City of Seal Beach
Proposed Water and Wastewater Rate
Adjustment
Public Hearing – August 11, 2025
Revised Financial
Plan- City Council
Workshop #1
2/26/25
Informational
Open House #2
6/14/2025
Financial
Analysis
Commenced
June 2023
Public Hearing
Rates Proposed
No Action Taken
2/12/2024
Timeline – Where We’ve Been
2023
Financial Plan
Presented
December 2023
City
Implemented
Final Rate
Increase from
Prior Rate
Adoption
1/1/2025
City Council
Workshop #2
3/26/25
TODAY
Public
Hearing
7/14/25
2024 2025
Informational
Open House #1
6/4/2025
City Council
Meeting
5/12/25
2 Community
Information
Sessions
3 Fire Station No. 48
3131 N. Gate Road, Seal Beach

1. Wednesday, June 4, 2025

2. Saturday, June 14, 2025
What do my rates pay for?
Utility rates fund operations, maintenance, repairs, debt payments, emergency reserves, and forward-looking capital improvement projects.

Water
• Imported water and
groundwater replenishment
• 73 miles of pipelines,
downtown has 120-year-old
pipe
• 4 groundwater wells
• 2 reservoirs
Sewer
• 34 miles of sewer mains
• 25% severe condition
• Over 100-year-old pipes
• 6 pump stations
• 800 manholes
4 Water and Sewer Utilities Are Not Covering Expenses
Inflation: Post Covid-19 reached highest rate since 1981 and has impacted operational and capital project costs
Rain: FY 2023 and 2024 were wet years; net result is decreased revenue; $600k lower revenue than anticipated each year
Wholesale Water Costs: Increased OCWD water wholesale costs (partly due to PFAS), MWDOC – Import water wholesaler
Both OCWD and MWDOC have had or are proposing 2 years of double-digit rate increases and historically increases have been in the mid single digits Aging Infrastructure / Deferred Maintenance
Sewer: Not meeting required debt coverage ratio, charges were reduced by 25% in the last study
5 Why Rate
Increases are
Needed:
6 Water
Water Infrastructure
7 Phase
Lampson Well Treatment System
About Purpose & Benefits
Project Timeline
Financials
Constraints
Treatment system to remove nuisance odor,
allowing increased pumping capacity. May need to
import water at double the cost of groundwater if not
producing at capacity.
• Construction: FY 2025-2027
• Design is complete. Soliciting for construction bids. • $4.5 M
• OCWD Producers Loan
• Lampson Well must be fully operational before the
rehabilitation of the Bolsa Chica Well, which currently supplies the majority of the City's groundwater
Lampson Well, the City’s newest built in 2011,
produces a nuisance odor caused by naturally
occurring H2S.
8 LCWA Water Main Lining
About Purpose & Benefits
Project Timeline
Project will reline the transmission line to provide
water to southerly part of City to provide the
necessary fire flow.

Transmission line crossing Los Cerritos
Wetlands/Hellman Ranch that has experienced
several recent breaks.

Phase
Financials
Constraints
• Construction: FY 2025-2026
• Design is complete
• Coastal Development Permit complete
• Coordinating construction with LCWA
• $2.5M Construction Value
• Anticipated SRF funding, pending rate approval
• Environmentally sensitive habitat
• Must be constructed with wetlands restoration –
Fall 2025
9 Beverly Manor Pump Station
About Purpose & Benefits
Project Timeline
Pump station upgrade including new pumps,
discharge piping, emergency generator, Variable
Frequency Drives, and electric controls. Without
Beverly Manor in full operation, system may not
maintain adequate pressure and fire flow.

Constructed in 1969, the booster station is
responsible for connecting Beverly Manor
Reservoir to the distribution system.

Phase
Financials
• Construction: FY 2026-28
• Design is substantially completed
• Production well in service. Fully manual operation.
• $8M Construction Value
• Anticipated SRF Funding
Constraints
• Antiquated system with no supporting parts for maintenance • Inability to fully pump reservoir water to distribution system Navy Reservoir Rehabilitation
About Purpose & Benefits
Project Timeline
Tank provides necessary water storage to address
water demand fluctuations, including emergency
needs
Navy Reservoir, constructed in 1963, has a
usable storage capacity of 2.5 million gallons.

Project will rehabilitate reservoir that has
deteriorated due to corroded steel tank coating,
will also rebuild the booster pumps.

Phase
Financials
• Construction: FY 2026-28
• Assessment is completed.
• Next phase is design.
• $1.8 M
Constraints
• Timely completion to prevent further corrosion,
which can lead to tank failure
Water Infrastructure Replacement
& Compliance Program
About Purpose & Benefits
Project Timeline
Replace aging infrastructure to improve reliability,
meet regulatory compliance, and increase capacity
to meet fire flow and pressure needs. Mainline
emergency repairs are costly and will cause service
disruptions.

Program helps fund on-going state and federal
regulatory compliance efforts, and methodically
and systematically improves the aging water
infrastructure, in particular areas that have
shown deterioration and need for capacity.

Phase
Financials
• Ongoing
• Ongoing, especially 100-year-old pipes
• $500,000 to $1M annually
Constraints
• 30,000 linear feet of pipeline that is past its useful life identified in 2012. Thirteen years later, this
number is higher.

Bolsa Chica Well Rehabilitation
About Purpose & Benefits
Project Timeline
Well improvements include replacing pumps,
generators, motors, and a water treatment system.

Pump failure may lead to water imports, which is
double the cost of groundwater.

The project will rehabilitate the groundwater well
site that was built in 1979.

Phase
Financials
• Construction: FY 2027-29
• Design is completed.
• $4 M
Constraints
• Lampson Well needs to be fully operational before
this well can be shutdown
Advanced Metering Infrastructure
About Purpose & Benefits
Project Timeline
AMI provides numerous benefits, including:

1. Reduces in-person manual reading

2. Complies with ongoing water efficiency and conservation mandates

3. Provides on-demand customer user interface (i.e., leak detection) Existing manual meters are at the end or have
surpassed serviceable life, warranting
replacement. AMI (Advanced Metering
Infrastructure) is a two-way communication
system to collect detailed metering information.

Phase
Financials
• Construction: FY 2026-28
• Preliminary Study - Completed
• Next phase is design
• Water Enterprise - $4 M
• BOR Grant – $2M
Constraints
• Not billing for water provided
• Eliminate manual/in-person meter reading
• Multi-year process
SCADA Improvement Upgrade
About Purpose & Benefits
Project Timeline
Supports operations and management monitoring
and automation, to better address and respond to
emergencies and reduce in-person response under
time-sensitive constraints. Used to optimize energy
use.

SCADA – Supervisory Control and Data
Acquisition for Water and Sewer Systems.

Phase
Financials
• In Progress
• Implementation at select locations
• On-going & in progress
• $50k/year Water
• $50k/year Sewer
Constraints
• Replacement of antiquated equipment for
compatibility
Photos is for demonstration purposes only.

Seal Way Water/Sewer Upgrade
About Purpose & Benefits
Project Timeline
Upsize pipe from 6-inch to 8-inch to meet demands.

Has had frequent water main breaks that can lead
to service interruption, and sewer blockages that
can lead to overflows.

Area has frequent blockage and sewer cleaning
needs. CCTV shows sewer mainline
delamination. One of the older water/sewer
mainlines in the city.

Phase
Financials
• Construction: FY 2033-34
• Planned
• $2.2 M Water
• $2.2 M Sewer
Constraints
• Concrete alley, tight working quarters, high
water table
6th Street Alley Water/Sewer Replacement
About Purpose & Benefits
Project Timeline
Address sewer line offset and delamination,
manhole upgrade, and waterline upsizing to meet
demands. Delamination and/or offset in the lines will
lead blockages & service interruptions.

CCTV identified issues. Pipe joint sections can
shift, sink, or be invaded by roots causing them
to become unaligned with the rest of the pipe.

Phase
Financials
Constraints
• Construction: FY 2033
• Design is completed
• Project on hold
• $2.0M Water
• $2.6M Sewer
• Concrete alley, tight working quarters, high water
Photos are for demonstration purposes only. table
Lampson Transmission/CPE
Waterline Improvements
About Purpose & Benefits
Project Timeline
Increase the volume of water that can be delivered
from Lampson Well and improve water pressure
throughout the city.

Upsizing Lampson Avenue transmission main to
maintain pressure during peak demands. Project
will run the span of Lampson Avenue from Seal
Beach Boulevard to easterly City limits, in
phases.

Phase
Financials
Constraints
• Phase I Construction: FY 2029-31
• Planned
• $3.3 M for Lampson Transmission Phase I
• $2.2M for Lampson Transmission Phase II
• $2.2M for CPE Waterline Improvements
• TBD
College Park West Water System Improvements
About Purpose & Benefits
Project Timeline
Establish an additional connection point to the
College Park West neighborhood to provide an
alternate water supply in the event of an
emergency.

Installation of a new emergency interconnection
transmission line to enhance system reliability
and provide greater failover capability,
minimizing the risk of service disruption in an
emergency.

Phase
Financials
Constraints
• Phase I Construction: FY 2028-29
• Planned
• $3.3 M Water for Phase I
• Negotiations with neighboring water agencies for
emergency intertie
Allocation to Cost Causation Components

SUPPLY EXTRA CAPACITY
(Peaking Costs)

CONSERVATION METER

MAINTENANCE

CUSTOMER

SERVICE
Cost of Service
20 Volumetric Rate ($/HCF) Fixed Charge by Meter Size
BASE

DELIVERY /
COSTS
Water Financial Outlook Without Revenue
Increases (or bond issuances)
In the red before paying for capital expenses
21 FY 2024 FY 2025 FY 2026 FY 2027
Projected Total Revenue $6,488,889 $6,909,669 $7,049,657 $7,049,899 Personnel $2,017,372 $1,551,794 $1,675,937 $1,810,012
Maintenance and Operations $1,632,896 $2,250,908 $2,376,601 $2,465,225 Water Purchase Costs $2,562,447 $3,074,071 $3,230,820 $3,410,563 Subtotal Expenses $6,212,715 $6,876,772 $7,283,358 $7,685,799 Debt Service $103,850 $117,000 $0 $0
Cashflow $172,323 ($84,103) ($233,701) ($635,900)
Water Financial Plan Scenarios
Scenario 1 Scenario 2
Revenue Adjustments
5-Year Increase
FY 2026 38%
FY 2027 23%
FY 2028 5%
FY 2029 5%
FY 2030 5%
Total CAGR 96.5%
FY 2026 29%
FY 2027 15%
FY 2028 8%
FY 2029 7%
FY 2030 6%
Total CAGR 81.7%
CIP $44M
Does more projects sooner
$34M
Pushes out projects
Grants/Loans/Market Debt $25M Market Debt
$9.5M SRF Loan
$4.4M OCWD Loan
$19M Market Debt
$9.5M SRF Loan
$4.4M OCWD Loan
22 Revenue adjustments show increased revenue above prior year revenue Water - Recommended CIP
23 WATER - SCENARIO 1 - RECOMMENDED CIP FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total Encumbered Rollover Projects $431,300 $0 $0 $0 $0 $0 $431,300 O-WT-1 Water Infrast. Replacement & Compliance Program $0 $500,000 $500,000 $500,000 $500,000 $500,000 $2,500,000 WT2701 Navy Reservoir Rehabilitation $0 $300,000 $1,500,000 $0 $0 $0 $1,800,000 WT1801 SCADA Improvement Upgrade Project $0 $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 WT1603 Bolsa Chica Water Well Rehabilitation $0 $0 $4,000,000 $0 $0 $0 $4,000,000 WT2401 Seal Way Sewer/Water Upgrade $0 $0 $150,000 $2,000,000 $0 $0 $2,150,000 WTXXXX Leisure World Well Reestablishment $0 $0 $0 $3,000,000 $3,000,000 $0 $6,000,000 SS1902 6th Street Alley Water/Sewer Replacement $0 $0 $0 $2,000,000 $0 $0 $2,000,000 WT1704 Lampson Ave Trans Main Repl. (to Seal Bch Blvd) $0 $0 $0 $0 $300,000 $3,000,000 $3,300,000 WT2102 College Park East Waterline Improvements $0 $0 $0 $0 $200,000 $2,000,000 $2,200,000 WT2301 College Park West Water System Improvements $0 $0 $0 $0 $0 $200,000 $200,000 Subtotal $431,300 $850,000 $6,200,000 $7,550,000 $4,050,000 $5,750,000 $24,831,300 WT1902 Lampson Well Treatment System $0 $5,072,863 $0 $0 $0 $0 $5,072,863 WT0904 Beverly Manor Water Pump Station Rehabilitation $0 $0 $2,000,000 $3,000,000 $3,000,000 $0 $8,000,000 WT2103 LCWA Watermain Lining $0 $2,500,000 $0 $0 $0 $0 $2,500,000 Subtotal - SRF and OCWD Loan Projects $0 $7,572,863 $2,000,000 $3,000,000 $3,000,000 $0 $15,572,863 WT2001 Advanced Metering Infrastructure $0 $40,000 $2,000,000 $2,000,000 $0 $0 $4,040,000 Total $431,300 $8,462,863 $10,200,000 $12,550,000 $7,050,000 $5,750,000 $44,444,163 FY 2025 to FY 2030 Year CIP $44,444,163
Bi-monthly Fixed Charge & Leisure World
Assumptions (Shown for Illustrative Purposes)
• Certain costs centers: Meter
Maintenance and Capacity are
allocated to customers classes based
on the number and size of meters
• Prior assumption: Leisure World (LW)
needed the equivalent of one 6” meter
• Revised to 2 – 12” meters
• LW would no longer be charged for
their 4 private fire accounts
• LW bi-monthly fixed charge = $14,916
equates to a $2.26 increase per
dwelling unit
24 1/1/2025
Fixed Charges
with LW
Fixed Charges
with LW
Scenario 1
Difference
Scenario 2
Difference
Meter Size Current 1 - 6" Meter 2 - 12" Meters $ $
5/8'' $52.38 $72.28 $70.68 ($1.60) ($1.50)
3/4'' $52.38 $72.28 $70.68 ($1.60) ($1.50)
1" $77.92 $107.53 $104.87 ($2.66) ($2.49)

1.5" $150.93 $208.28 $202.85 ($5.43) ($5.08)
2" $228.33 $315.10 $306.50 ($8.59) ($8.03)
3" $406.25 $560.63 $544.72 ($15.91) ($14.87)
4" $675.94 $932.80 $906.18 ($26.62) ($24.88)
6" $1,331.01 $1,836.79 $1,783.70 ($53.10) ($49.64)
8" $2,128.92 $2,937.91 $2,852.83 ($85.08) ($79.53)
10" $3,047.29 $4,205.26 $4,083.10 ($122.16) ($114.19)
12" NA NA $7,458.19 NA NA
2" Aquatic Park $344.58 $475.52 $476.01 $0.49 $0.45
Aquatic Park includes a capital surcharge due to under sea pipelines Scenario 1
Proposed Water Bi-Monthly 5-Year fixed
Charges (assumes 2 -12” meter for LW)
25 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Water 1/1/2025 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Bi-monthly Fixed Charges
All Customers
5/8'' $52.38 $70.68 $86.94 $91.29 $95.85 $100.64
3/4'' $52.38 $70.68 $86.94 $91.29 $95.85 $100.64
1" $77.92 $104.87 $128.99 $135.44 $142.21 $149.32

1.5" $150.93 $202.85 $249.51 $261.99 $275.09 $288.84
2" $228.33 $306.50 $377.00 $395.85 $415.64 $436.42
3" $406.25 $544.72 $670.00 $703.50 $738.68 $775.61
4" $675.94 $906.18 $1,114.60 $1,170.33 $1,228.84 $1,290.28 6" $1,331.01 $1,783.70 $2,193.95 $2,303.64 $2,418.82 $2,539.77 8" $2,128.92 $2,852.83 $3,508.98 $3,684.43 $3,868.65 $4,062.08 10" $3,047.29 $4,083.10 $5,022.21 $5,273.32 $5,536.99 $5,813.84 12" Leisure World $1,331.01 $7,458.19 $9,173.58 $9,632.26 $10,113.87 $10,619.56 2" Aquatic Park $344.58 $476.01 $585.49 $614.76 $645.50 $677.78 Private Fire Charges
4" $54.42 $75.10 $92.37 $96.99 $101.84 $106.93
6" $158.07 $218.14 $268.31 $281.72 $295.81 $310.60
8" $336.86 $464.87 $571.79 $600.38 $630.39 $661.91
10" $605.79 $835.99 $1,028.27 $1,079.68 $1,133.67 $1,190.35 12" NA $1,350.35 $1,660.94 $1,743.98 $1,831.18 $1,922.74 Proposed Water Volumetric Rates ($ / hcf)
26 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
1/1/2025 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029
Volumetric Rates ($ /hcf)
Residential
Tier 1 $3.77 $5.20 $6.40 $6.72 $7.06 $7.41
Tier 2 $3.99 $5.51 $6.77 $7.11 $7.47 $7.84
Multi-Family Residential & Leisure World
Tier 1 $3.77 $5.20 $6.40 $6.72 $7.06 $7.41
Tier 2 $3.94 $5.44 $6.69 $7.02 $7.37 $7.74
Commercial $3.77 $5.20 $6.40 $6.72 $7.06 $7.41
Irrigation $3.86 $5.33 $6.55 $6.88 $7.22 $7.58
City $3.82 $5.27 $6.48 $6.81 $7.15 $7.51
Aquatic Park $4.27 $5.89 $7.25 $7.61 $7.99 $8.39
Water – Modified CIP
(Absolute Minimum Required Projects)
27 WATER - SCENARIO 2 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total FYE 2024 Rollover Projects into FY 2025 $431,300 $0 $0 $0 $0 $0 $431,300 O-WT-1 Water Infrast. Replacement & Compliance Program $0 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $5,000,000 WT2701 Navy Reservoir Rehabilitation $0 $300,000 $1,500,000 $0 $0 $0 $1,800,000 WT1801 SCADA Improvement Upgrade Project $0 $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 WT1603 Bolsa Chica Water Well Rehabilitation $0 $0 $0 $0 $2,000,000 $2,000,000 $4,000,000 WTXXXX Leisure World Well Reestablishment $0 $0 $0 $0 $0 $3,000,000 $3,000,000 Subtotal $431,300 $1,350,000 $2,550,000 $1,050,000 $3,050,000 $6,050,000 $14,481,300 WT1902 Lampson Well Treatment System $0 $5,072,863 $0 $0 $0 $0 $5,072,863 WT0904 Beverly Manor Water Pump Station Rehabilitation $0 $0 $2,000,000 $3,000,000 $3,000,000 $0 $8,000,000 WT2103 LCWA Watermain Lining $0 $2,500,000 $0 $0 $0 $0 $2,500,000 Subtotal - SRF and OCWD Loan Projects $0 $7,572,863 $2,000,000 $3,000,000 $3,000,000 $0 $15,572,863 WT2001 Advanced Metering Infrastructure $0 $40,000 $2,000,000 $2,000,000 $0 $0 $4,040,000 Total $431,300 $8,962,863 $6,550,000 $6,050,000 $6,050,000 $6,050,000 $34,094,163 FY 2025 to FY 2030 Year CIP $34,094,163
Modified Option Water Bi-Monthly 5-Year fixed
Charges (assumes 2 -12” meter for LW)
28 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Water 1/1/2025 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Bi-monthly Fixed Charges
All Customers
5/8'' $52.38 $66.07 $75.98 $82.06 $87.81 $93.08
3/4'' $52.38 $66.07 $75.98 $82.06 $87.81 $93.08
1" $77.92 $98.03 $112.73 $121.75 $130.28 $138.09

1.5" $150.93 $189.62 $218.07 $235.51 $252.00 $267.12
2" $228.33 $286.51 $329.49 $355.85 $380.76 $403.60
3" $406.25 $509.19 $585.57 $632.42 $676.69 $717.29
4" $675.94 $847.08 $974.14 $1,052.07 $1,125.72 $1,193.26 6" $1,331.01 $1,667.37 $1,917.47 $2,070.87 $2,215.83 $2,348.78 8" $2,128.92 $2,666.78 $3,066.79 $3,312.14 $3,543.98 $3,756.62 10" $3,047.29 $3,816.81 $4,389.33 $4,740.48 $5,072.31 $5,376.65 12" Leisure World $1,331.01 $6,971.79 $8,017.56 $8,658.96 $9,265.09 $9,821.00 2" Aquatic Park $344.58 $444.96 $511.71 $552.64 $591.33 $626.81 Private Fire Charges
4" $54.42 $70.20 $80.73 $87.19 $93.29 $98.89
6" $158.07 $203.91 $234.50 $253.26 $270.98 $287.24
8" $336.86 $434.55 $499.73 $539.71 $577.49 $612.14
10" $605.79 $781.47 $898.69 $970.58 $1,038.53 $1,100.84 12" NA $1,262.29 $1,451.63 $1,567.76 $1,677.51 $1,778.16 Modified Option Water Volumetric Rates ($ / hcf)
29 FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
1/1/2025 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029
Volumetric Rates ($ /hcf)
Residential
Tier 1 $3.77 $4.86 $5.59 $6.04 $6.46 $6.85
Tier 2 $3.99 $5.15 $5.92 $6.39 $6.84 $7.25
Multi-Family Residential & Leisure World
Tier 1 $3.77 $4.86 $5.59 $6.04 $6.46 $6.85
Tier 2 $3.94 $5.08 $5.84 $6.31 $6.75 $7.16
Commercial $3.77 $4.86 $5.59 $6.04 $6.46 $6.85
Irrigation $3.86 $4.98 $5.73 $6.18 $6.62 $7.01
City $3.82 $4.93 $5.67 $6.12 $6.55 $6.94
Aquatic Park $4.27 $5.51 $6.33 $6.84 $7.32 $7.76
30 Sewer
31 Sewer Infrastructure
Sunset Aquatic Park Pump Station
About Purpose & Benefits
Project Timeline
Project will provide additional capacity and pump
station upgrades. Overflows from this system would go
directly into the Anaheim Bay and City would be fined.

Due to previous force main failures, current flow
is diverted to 2 - 2” mains across the Bolsa
Chica Channel.

Phase
Financials
• Construction: FY 2027-29
• Planned
• $2.7 M construction value
• Sunset Aquatic Park Equity Fund
Constraints
• Force mains are undersized and frequently have blockages • Coordination with Huntington Beach to receive wastewater 32 Pump Station #35
About Purpose & Benefits
Project Timeline
Project will provide emergency sewage by-pass,
mechanical/electrical upgrades, and emergency
back-up power generation. This a very important
pump station – an outage would cause sewer
backups in the southern part of the City.

Originally constructed in 1973, and subsequently
upgraded. PS #35 is the main sewer station that
serves the Hill, Bridgeport, Naval Weapons
Station, Old Town.

Financials
• Phase I - Under construction
• Phase II – FY 29/30
• $1.6 M construction value
• $3.3 M Phase II
Constraints
• Critical system to transport wastewater to OCSan
regional system
• Noticeable increase of Fats, Oils, Grease (FOG)
discharge
Adolfo Lopez and Boeing Pump Stations
About Purpose & Benefits
Project Timeline
Project will rehabilitate components and evaluate
the feasibility of constructing a parallel force main.

Pump station and electrical failures may result in
wastewater leaching and system overflow, which
can potentially be a substantial water quality fine.

Adolfo Lopez Station was constructed in 2005; the Boeing Pump Station was constructed in 2003. Both stations are reaching a point where more frequent failures and repairs are needed, in particular electrical components.

Furthermore, settling and corrosion is apparent in the
piping and wet wells.

Phase
Financials
• FY 2027-29
• Planned
• $1.7M Adolfo Lopez
• $1.7M Boeing
Constraints
• Force mains are original and near end of
serviceable life.
• Electrical repair requires frequent contractor callouts.

Sewer Mainline Improvement Program
About Purpose & Benefits
Project Timeline
Program will address structural and capacity
deficiencies, manhole upgrades, and point repairs.

The sewer system is on average 80 years old. Inability
to properly convey wastewater may result in blockages,
overages, and ultimately a health hazard.

Continuous repair of sewer infrastructure per
CCTV assessment to address deficiencies (e.g.,
cracks, offsets, delamination, capacity, flow).

Phase
Financials
• Ongoing
• CCTV Analysis (2023)
• Next target area – The Hill/Old Town
• $500,000 to $750,000 annually
Constraints
• On-going CCTV/cleaning per state requirements
• Aging infrastructure that was not built for existing
demands
Sewer Financial Outlook Without
Revenue Increases
• A debt service coverage ratio of 1.2 means the City has promised bondholders to set rates so that net cashflow (before CIP expenses) is about $650k (positive) • Revenue is decreasing due to lower interest earned in cash balances • Does not include capital projects
36 FY 2024 FY 2025 FY 2026 FY 2027
Projected Total Revenue $2,625,899 $2,589,328 $2,477,265 $2,410,373 Personnel $1,451,291 $1,319,707 $1,425,284 $1,539,306
Maintenance and Operations $758,140 $1,146,858 $1,204,201 $1,240,327 Subtotal Expenses $2,209,430 $2,466,565 $2,629,484 $2,779,633 Revenue Less Expenses $416,469 $122,763 ($152,219) ($369,260) Debt Service $545,583 $545,623 $545,183 $544,263
Cashflow ($129,114) ($422,860) ($697,402) ($913,523)
Sewer Financial Plan Scenarios
Scenario 1 Scenario 2
Revenue Adjustments
5-Year Increase
FY 2026 34%
FY 2027 21%
FY 2028 14%
FY 2029 13%
FY 2030 4%
Total CAGR 117.2%
FY 2026 34%
FY 2027 20%
FY 2028 9%
FY 2029 8%
FY 2030 7%
Total CAGR 102.5%
CIP (today’s $) $19.2M
• Does more projects
sooner, compared to
scenario 2
$15.7M
• Pushes out projects
Debt $14 M Market Debt $15 M Market Debt
37 34% is needed in the 1st year to meet debt covenants! Revenue adjustments show increased revenue above prior year revenue Proposed Sewer CIP
38 SEWER - SCENARIO 1 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total FYE 2023 Encumbered Rollover Projects $3,645,000 $0 $0 $0 $0 $0 $3,645,000 O-SS-2 Sewer Mainline Improvement Program $0 $500,000 $500,000 $500,000 $500,000 $500,000 $2,500,000 SS2303 Sunset Aquatic Park & Forcemain Upgrade $0 $200,000 $2,500,000 $0 $0 $0 $2,700,000 WT2401 Seal Way Sewer/Water Upgrade $0 $0 $150,000 $2,000,000 $0 $0 $2,150,000 WT1801 SCADA Improvement Upgrade Project $0 $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 SS1902 6th Street Alley Water/Sewer Replacement $0 $0 $0 $2,600,000 $0 $0 $2,600,000 SSXXXX Adolfo Lopez Pump Station & Forcemain Upgrade $0 $0 $0 $0 $0 $200,000 $200,000 SS2204 Boeing Pump Station & Forcemain Upgrade $0 $0 $0 $200,000 $1,500,000 $0 $1,700,000 SSXXXX Pump Station 35 Upgrades - Phase 2 $0 $0 $0 $0 $300,000 $3,000,000 $3,300,000 SSXXXX 1st Street Pump Station & Forcemain Upgrade $0 $0 $0 $0 $0 $150,000 $150,000 Total $3,645,000 $750,000 $3,200,000 $5,350,000 $2,350,000 $3,900,000 $19,195,000 FY 2025 to FY 2030 CIP $19,195,000
Proposed Sewer Bi-Monthly
5-Year Rates & Charges
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Fixed Charge Current 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Single-Family Residential
Fixed Charge $48.04 $64.37 $77.89 $88.80 $100.34 $104.35 Customers with a Fixed Charge and
Volumetric Rate Current 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Multi-Family Residential
Fixed Charge $1.22 $1.63 $1.98 $2.26 $2.55 $2.65
Volumetric Rate ($/hcf) $4.00 $5.36 $6.49 $7.39 $8.35 $8.69 Commercial and City
Fixed Charge $1.22 $1.63 $1.98 $2.26 $2.55 $2.65
Volumetric Rate ($/hcf) $4.00 $5.36 $6.49 $7.39 $8.35 $8.69 Leisure World
Fixed Charge $1.22 $1.63 $1.98 $2.26 $2.55 $2.65
Flat Rate $2,198.06 $2,945.40 $3,563.93 $4,062.89 $4,591.06 $4,774.70 Navy
Sewer Meter Fixed Charge $1.22 $1.63 $1.98 $2.26 $2.55 $2.65 Sewer Meter Volumetric ($/hcf) $0.24 $0.32 $0.39 $0.44 $0.50 $0.52 Aquatic Park
Fixed Charge $1.22 $1.63 $1.98 $2.26 $2.55 $2.65
Volumetric Charge ($/hcf) $4.00 $5.36 $6.49 $7.39 $8.35 $8.69 Sewer Service Equity Charge $997.50 $1,336.65 $1,617.35 $1,843.78 $2,083.47 $2,166.80 Sewer Capital Equity Charge $1,322.00 $1,771.48 $2,143.49 $2,443.58 $2,761.24 $2,871.69 39 Modified Option Sewer CIP
40 SEWER - SCENARIO 2 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 Total FYE 2024 Projects rolled over into FYE 2025 $3,645,000 $0 $0 $0 $0 $0 $3,645,000 O-SS-2 Sewer Mainline Improvement Program $0 $750,000 $750,000 $750,000 $750,000 $750,000 $3,750,000 SS2303 Sunset Aquatic Park & Forcemain Upgrade $0 $200,000 $2,500,000 $0 $0 $0 $2,700,000 WT1801 SCADA Improvement Upgrade Project $0 $50,000 $50,000 $50,000 $50,000 $50,000 $250,000 SS2204 Boeing PS & Forcemain Upgrade $0 $0 $0 $200,000 $1,500,000 $0 $1,700,000 SSXXXX PS#35 Upgrades - Phase 2 $0 $0 $0 $0 $300,000 $3,000,000 $3,300,000 SSXXXX Adolfo Lopez PS & Forcemain Upgrade $0 $0 $0 $0 $0 $200,000 $200,000 SSXXXX 1st Street PS & Forcemain Upgrade $0 $0 $0 $0 $0 $150,000 $150,000 Total $3,645,000 $1,000,000 $3,300,000 $1,000,000 $2,600,000 $4,150,000 $15,695,000 FY 2025 to FY 2030 CIP $15,695,000
41 Modified Option Sewer Bi-Monthly 5-Year Rates
& Charges
FYE 2026 FYE 2027 FYE 2028 FYE 2029 FYE 2030
Fixed Charge Current 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Single-Family Residential
Fixed Charge $48.04 $64.37 $77.25 $84.20 $90.94 $97.30
Customers with a Fixed Charge and
Volumetric Rate Current 8/1/2025 7/1/2026 7/1/2027 7/1/2028 7/1/2029 Multi-Family Residential
Fixed Charge $1.22 $1.63 $1.96 $2.14 $2.31 $2.47
Volumetric Rate ($/hcf) $4.00 $5.36 $6.43 $7.01 $7.57 $8.10 Commercial and City
Fixed Charge $1.22 $1.63 $1.96 $2.14 $2.31 $2.47
Volumetric Rate ($/hcf) $4.00 $5.36 $6.43 $7.01 $7.57 $8.10 Leisure World
Fixed Charge $1.22 $1.63 $1.96 $2.14 $2.31 $2.47
Flat Rate $2,198.06 $2,945.40 $3,534.48 $3,852.58 $4,160.79 $4,452.05 Navy
Sewer Meter Fixed Charge $1.22 $1.63 $1.96 $2.14 $2.31 $2.47 Sewer Meter Volumetric ($/hcf) $0.24 $0.32 $0.39 $0.42 $0.45 $0.49 Aquatic Park
Fixed Charge $1.22 $1.63 $1.96 $2.14 $2.31 $2.47
Volumetric Charge ($/hcf) $4.00 $5.36 $6.43 $7.01 $7.57 $8.10 Sewer Service Equity Charge $997.50 $1,336.65 $1,603.98 $1,748.34 $1,888.21 $2,020.38 Sewer Capital Equity Charge $1,322.00 $1,771.48 $2,125.78 $2,317.10 $2,502.46 $2,677.64 42 Bi-Monthly
Customer Bill Impacts
Proposed First Year Combined Water & Sewer
Bill Impacts (Bi-Monthly)
43 Proposed Multi-Year Combined Residential Water
& Sewer Bill Impacts (Annual & Bi-Monthly)
44 Proposed Leisure World - Combined Water &
Sewer Bill Impacts (Annual)
45 ≈$19 bi-monthly
increase per dwelling
unit or $9.51 monthly
for first year
Modified Option First Year Combined Water &
Sewer Bill Impacts (Bi-Monthly)
46 Modified Option Multi-Year Combined Residential
Water & Sewer Bill Impacts (Bi-Monthly)
47 Modified Option Leisure World - First Year Combined
Water & Sewer Bill Impacts (Bi-Monthly)
48 ≈$15.20 bimonthly increase
per dwelling unit or
$7.60 monthly
Summary
• Proposed revenue increases will restore the utilities’ financial health so the City can:
› Continue to deliver safe, reliable water and sewer services › Maintain and upgrade aging infrastructure
› Maintain good credit standing and be able to issue debt • Consequences of delaying:
› $222k/month for water and $67k/month for sewer
› Projects may be affected if delayed
– LCWA Watermain Lining and Beverly Manor Well assume an SRF loan – Lampson Well Treatment System assumes an OCWD Producers Loan – Need to demonstrate that the City can pay current and future loans back › WW enterprise remains in technical default
• The rate study follows standard rate setting practice and uses available data to determine the cost to serve each class
49 50
Myths
Myth Busters
• Myth 1: The Water & Sewer Enterprise Funds will subsidize the General Fund.
o FACT: By law, revenues generated by water and sewer rates may only be used for costs of providing water and sewer services. • Myth 2: Nothing was done with the revenue from the last rate study. o FACT: On the contrary, many of the projects identified in the 2020 Rate Study have already been designed. However, due to various external factors, construction has been delayed. As a result, funding through debt issuance has not yet been pursued since the projects have not moved into the construction phase.
51 Myth Busters
• Myth 3: The CIP schedules are not attainable.
o FACT: While the Option 1 CIP schedule is ambitious, it is not unattainable—many of the projects are already designed and considered "shovel ready." Option 2 includes fewer projects, making its completion timeline even more manageable.
• Myth 4: Delays won't have an impact.
o FACT: Each month of delay is approximately $300k of revenue loss that could have been used towards enhancing your utility. Also, delays jeopardize external funding opportunities to help augment burden to rate payers and construction windows.
• Myth 5: The rates are subsidizing future developments. o FACT: The rates fund current system needs to keep your water and sewer systems reliable today. They are not designed to subsidize or fund future developments.
52 53
Summary of Objections
and Responses
54 AB 2257
• Established a formal written objection procedure for ratepayers to raise specific legal concerns
• Must include specific grounds for alleging noncompliance of the proposed rates with Proposition 218
• Designed to address disputes during public participation period • Permits agency to resolve issues during participation period • Creates an exhaustion of administrative remedies procedure • Requires ratepayers to bring a specific legal objection prior to the deadline established as part of the rate setting process to preserve their ability to file a legal challenge
54 AB 2257 Objection Tally
55 Written Objections Received 3
As of the 5 p.m. deadline on July 7, 2025, the City received:
56 Objection Letter #1
a. Object to proposed water and wastewater rates, citing inequity in the rate structure based on:
o Fixed charges are not “per door,”
o Lower use parcels unfairly pay less,
o Burden on those without ability to pay (i.e. fixed- and low-income, large families) o Lack of per door fees leads to unstable revenues
b. Object to wastewater rates, citing the charge for Single-Family customers are subsidizing others
c. Object to Sunset Aquatic Park sewer rates, citing all other customers are subsidizing Aquatic Park
Written Objections Summary
Objection Letter #3
a. Proposed rates are excessive and not proportional to her property b. Object to proposed rates, stating they appear to exceed proportional cost of service to the objector’s property.
c. Object that the City has not demonstrated that the revenues will be used exclusively for each utility d. The notice lacks sufficient detail to determine if the methodology is consistent with Constitutional requirements, citing detailed financial analysis and rate modeling was not available to the public e. The public process lacked transparency
57 Objection Letter #2
a. Object to proposed rates, citing they are excessive
b. Object that the proposed rates circumvent Proposition 13 c. Object to personnel compensation increases, citing they are unjustified d. Object to public process, citing lack of transparency Written Objections Summary
Response Summary
The City acknowledges residents' concerns about proposed water and sewer rate increases but asserts that they are necessary, legally compliant, based on detailed studies, and designed to ensure the longterm reliability and equitable funding of essential water and wastewater services. • Written Objections did not demonstrate noncompliance with Proposition 218; therefore, the publicly noticed and available proposed rates, 2025 Financial Plan and 2020 Cost of Service Study Report stand.
• Water and Sewer revenues are restricted and accounted for in Water Enterprise and Sewer Enterprise Funds, separate from the City’s General Fund. Rate revenues pay for water and sewer expenses only.
• The City undergoes an independent annual financial audit to ensure compliance with generally accepted accounting principles in which expenditures from utility Enterprise Funds are noted. • Written Responses to the Written Objections are included in the City’s Administrative Record and included in the Public Hearing agenda packet.
58 Response Summary – 5 Themes

1. Necessity of Rate Increases - Objections did not provide specific information on alleged non-compliance with Proposition 218. Proposed rate increases are deemed essential and not arbitrary, driven by critical factors such as:
o Aging Infrastructure: The need for substantial investment in repairing, replacing, and modernizing old water and wastewater systems to ensure reliability, prevent failures, and meet public health standards.
o Regulatory Compliance: Adhering to increasingly stringent federal and state environmental and public health regulations, which require significant capital and operational adjustments. o Rising Operational Costs: Covering the increasing expenses for supplies, energy, chemicals, and maintenance necessary for daily system operation.
o Long-Term Financial Stability: Ensuring a stable financial foundation for the utility to meet current needs, fund future projects, and maintain reserves to avoid larger, unpredictable increases.
59 Response Summary – 5 Themes

2. Equity in Billing Structure:
• Fair Cost Allocation: While promoting conservation through use-based billing, the overall rate structure aims to recover fixed infrastructure costs equitably from all users. All customers with an account, even if they use no water, pay the fixed charge. A customer pays in proportion to their 1) water use (on average is about 70% of the bill), 2) number of meters, and 3) meter size.
• Fixed Cost Recovery: The proposed water fixed charge recovers the following costs:
o Customer Billing: only customers who get a bill cause this cost and therefore can be charged for it The following are proportional to meter size:
o Meter Maintenance: only customers with meters can be charged for it because the costs are associated with meter maintenance and meter reading
o Fixed Capacity (infrastructure): capacity costs are assessed in proportion to a customer’s meter size as meter size is proportional to potential water use that affects infrastructure needs. Potential demand to serve multi-family dwellings is reflected in their meter size. For example, a SFR ¾” meter fixed charge is currently $26/month compared to a MFR 4” meter fixed charge is $338/month.

Continued next slide
60 Response Summary – 5 Themes

2. Equity in Billing Structure Continued:
• Single Family subsidizing other classes: Single family class pays in proportion to their estimated sewer discharge • Subsidies and Sunset Aquatic Park: The City is committed to ensuring all customer classes, including multi-family units and specific users like Sunset Aquatic Park, contribute their fair share based on their use and impact on the system, in line with Proposition 218 which requires that no class subsidizes another. • The City implemented Sunset Aquatic Park charges specifically to address equity concerns:
o Water - The fixed charge for Sunset Aquatic Park is higher than the fixed charge for other customers with the same meter size. This is to recover the added capital cost associated with the water line feeding Sunset Aquatic Park.
o Sewer – Sunset Aquatic Park has a separate sewer service equity charge and sewer capital equity charge to recover the added costs associated with Sunset Aquatic Park sewer service. 61 Response Summary – 5 Themes

3. Justification for Personnel Compensation:

Staff compensation is a significant part of the operational budget for any utility, as it relies on skilled personnel to manage complex systems, maintain infrastructure, and ensure compliance.

The 8% annual personnel cost inflator is a comprehensive estimate that includes:
• merit increases,
• cost of living adjustments,
• retirement costs,
• insurance and
• other legally obligated personnel-related expenses.

It is based on recent cost trends and future obligations and is necessary to maintain service levels and staffing. The personnel inflator is not used to inflate capital improvement projects. There is a separate CIP inflator which is 5%, 4% , 3%, 3% and 3% for the 5-year proposed rates period. 62 Response Summary – 5 Themes

4. Compliance with Proposition 218 and Legal Standards:
o Prop 218 (User Fees) vs Prop 13 (Taxes): Water and wastewater charges are considered property related fees, not property taxes, meaning Proposition 13 (pertaining to property taxes) does not apply.
o Cost of Service Basis: All proposed rates are based on comprehensive, independent financial analysis and cost-of-service studies designed to ensure that revenues do not exceed the cost of service and that charges are proportional to the cost of serving each parcel, fulfilling Proposition 218 requirements.
o Restricted Funds: Revenues derived from these rates are legally restricted and exclusively dedicated to the operation, maintenance, and capital improvement of the water and sewer systems through each utility Enterprise Fund, separate from the General Fund. 63 Response Summary – 5 Themes

5. Transparency and Public Process:
• Adherence to Legal Process: The proposed rate adjustments followed the legally mandated Prop 218 process, including public notification and a Public Hearing. The Notice of Public Hearing provided an explanation of cost and inflation drivers, capital needs, how proposed rates were determined, and directed interested persons to the consultant's reports available on the website and from the City Clerk’s Office.
• Transparent Public Process Included:
o Multiple publicly-noticed City Council workshops (February 26, March 26, 2025) o Regular City Council Meetings (2023, 2024, 2025)
o Community information sessions (2023, 2024, 2025: June 4 and June 14). o Meetings and information sessions were promoted across various City communication channels (website, media releases, social media, e-newsletters, and within the Public Hearing Notice). 64 65
Proposition 218
Tally
Summary of Requests:

1. That the City Council conduct a public hearing to accept comments on the proposed water and sewer rate adjustments; and,

5. Receive and file the Water and Wastewater Financial Plan and Rate Study, prepared by Raftelis Financial Consultants, Inc., dated June 17, 2025, as presented to the City Council at this meeting and on file in the office of the City Clerk. 66 67
End of
Presentation
Revenue must be
used to cover the
costs for which
the charge was
imposed
The charge must
be for a service
that is actually
used or
immediately
available
The fee may not
exceed the
proportional cost
to serve the
parcel
Proposition 218 Requires:

Cannot collect
more than what
you need
Must send a
written notice to
customers no less
than 45 days
before a public
hearing
68 NOTE: Revenues collected from rates cannot be used for any other purpose.

Utility Enterprise Funds are separate from the General Fund.

AWWA – Issues
Facing the Water
Sector
69 Water & Sewer
Compared to
Other Goods
70 Textbook Fixed Charge Rate Setting
(Simplified for Discussion)
• Each customer has at least one meter and charges are based upon their use and meter size
• It is common to charge apartment complexes based on their meter/meters which serve the entire complex
71 Based on meters Based on “doors”
Extra Capacity $$$ $$$
Meter Maintenance $$ $$
Customer Service $ $
FY 2025 Total $2,400,000 $2,400,000
# of Equivalent Meters ≈ 7,800 # of Equivalent Meters
+ each “door”
(apartment/condo)
≈ 7,800 + (2,700 MFR
+ 6,600 LW) x 0.3
factor ≈ 10,590
Bi-monthly Fixed
Charge
≈$51.28 ≈$37.77
Combined (Water & Sewer) Bi-Monthly
Bill Impacts
Option 1 Option 2
Current Bill $168.50 $168.50
Proposed Bill
(First Year Increase) $228.96 $218.21
Bi-monthly Difference $60.46 $49.71
Proposed Bill
(5th Year Increase) $338.70 $314.01
Bi-monthly Difference
(5th Year) $170.20 $145.51
72 73

“The presentation talked about setting rates in proportion to land use or acreage, but unfortunately, sewer rates are based on estimated sewer discharge and that's how your rates are set for the sewer based on their estimated proportion of use of that pipeline, not on land use. Because you could have a big empty base with nobody on it and maybe they're not using a sewer. So, there's nothing better to set rates on than sewer use compared to estimating sewer use from land use.” “So, then it would be our opinion that they are being correctly charged.” "Yes."
no
wrong
again
the entire presentation was about water, the word sewer wasn't said once

250 ft 1,000 ft?
250 ft 10,000 ft?
250 ft 100,000 ft?
Myth: The Naval Weapons Station is being charged a fair share for water services because it's billed based on its usage.
fun fact, this should be one word if it's in reference to the show Myth 2: There is no better way to charge rates than based on usage.

FACT: While the NWS is billed according to its direct water usage, this approach overlooks the significant amount of frontage that the NWS occupies along the city's water lines (over 10% of all lines).

Since the frontage that the NWS occupies along the water lines cannot be developed, this results in higher bills for all other ratepayers, as the fixed costs are evenly spread over a smaller base of ratepayers.

FY 2030 Bimonthly
Naval Weapons Station Bill:
~$53,000
Average Seal Beach Resident Bill:
$338.70
~$53,000 / $338.70 = 157 Homes
157 x 25 Feet = 3,925 Feet
3,925 Feet
there is no better way to charge
rates than based on usage

M218
Water/Sewer

Fiduciary
“Fiduciary responsibility” refers to the legal and ethical obligation of a fiduciary to act in the best interests of their clients or beneficiaries. This includes prioritizing the needs of the client above personal interests and establishing a relationship based on trust.

Common fiduciaries include business partners, directors, trustees, and advisors, who are expected to uphold duties such as care, loyalty, good faith, confidentiality, and disclosure.

M218 Process
▪ Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees.

M218 Process
▪ Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees.
▪ “Special Benefit Assessments on real property must provide a specific benefit to the property (e.g., sewer or water
improvements) and be proportional to the benefit received. Local governments cannot use assessments for general services like police or fire.

M218 Process
▪ Proposition M218, approved by California voters in November 1996, significantly reformed local government finance by requiring voter approval for most local taxes, assessments, and property-related fees. ▪ “Special Benefit Assessments on real property must provide a specific benefit to the property (e.g., sewer or water improvements) and be proportional to the benefit received. Local governments cannot use assessments for general services like police or fire.
▪ “Fees for services like water, sewer, or refuse collection cannot exceed the cost of providing the service. Local governments must notify property owners and allow protests; a majority protest can block the fee. 
“Leisure World Doesn’t Pay Their Fair Share”

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system
▪ LW pays the same price for Fixed meter charge

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system
▪ LW pays the same price for Fixed meter charge
▪ LW pays the same Volume price

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system
▪ LW pays the same price for Fixed meter charge
▪ LW pays the same Volume price
▪ We divide our water bill by 6,800 apartments

“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system
▪ LW pays the same price for Fixed meter charge
▪ LW pays the same Volume price
▪ We divide our water bill by 6,800 apartments
▪ We built it. We paid for it. We own it. We maintain it. 
“Leisure World Doesn’t Pay Their Fair Share”
▪ History: Built between 1961 and 1964
▪ We built our own water distribution and sewer system
▪ LW pays the same price for Fixed meter charge
▪ LW pays the same Volume price
▪ We divide our water bill by 6,800 apartments
▪ We built it. We paid for it. We own it. We maintain it. ▪ LEISURE WORLD PAYS THEIR FAIR SHARE. END OF STORY

“Besides...”
▪ If Seal Beach wanted to change the way LW pays for water – “door fee” or some other mechanism
▪ Ballot Measure by all the voters in SB
▪ The utility users affected by this M218 process cannot impose new charges on LW
▪ The voters cannot “confiscate” LW’s water and sewer system ▪ This would be vigorously opposed by LW

Employee Compensation Myth’s

Employee Compensation Myth’s
▪ Myth: Employees are getting a 40%+ pay increase or an 8% pay increase

Employee Compensation Myth’s
▪ Myth: Employees are getting a 40%+ pay increase or an 8% pay increase
▪ Truth: Employee time that is attributable to running the utility business is paid for by the utility business.
▪ Billing, payables and collections – pay-as-you-go
▪ Maintenance by public works employees – pay-as-you-go ▪ Executive – a fixed percentage of their paycheck

Suggested Alternatives
▪ I have listened to many constituents who are concerned about increasing the water rates.

Suggested Alternatives
▪ Phase in the projects
▪ Use main street parking revenue or Measure GG revenue ▪ 50 years experience in construction or experience in
water/sewer systems, and so on...
▪ With so many suggestions from concerned citizens, we would be evaluating various options ad infinitum, never solving the problems, with no one on the “professional hook”

Professionals
▪ Iris Lee – Director of Public Works –
▪ 25 years of engineering experience
▪ 20+ years of water/sewer experience
▪ Certified Water Distribution Operator
▪ Registered Professional Civil Engineer
▪ Steve Gagnon
▪ 28 years experience engineering
▪ 16 years experience in financial planning and rate setting ▪ Series 50 Municipal Advisor
▪ Master of Environmental and Engineering

Professionals
▪ We hire experts. We pay experts. Experts who are educated, certified and experienced.
▪ Compared to a variety of suggestions from the well-meaning public
IMHO: To ignore the advice of the professionals we pay would be an irresponsible abdication of my fiduciary duty.


Not Just Empty Words
▪ Leisure World Cares Fund.
www.lwcaresfund.org

Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)


2024 Audited Results

Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. 
Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans.

Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans.
▪ In the last 2 years, there have been 3 major water main failures 
Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans.
▪ In the last 2 years, there have been 3 major water main failures ▪ Last year, all 3 pump stations were down at the same time. 
Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans. ▪ In the last 2 years, there have been 3 major water main failures and ▪ All 3 pump stations were down at the same time.
▪ Repairs on the pump stations are becoming more expensive because spare parts have to be custom made.

Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans. ▪ In the last 2 years, there have been 3 major water main failures and ▪ All 3 pump stations were down at the same time.
▪ Repairs on the pump stations are becoming more expensive because spare parts must be custom made.
▪ By not passing last year’s M218 water study, Seal Beach has incurred a $5.1 million loss in revenues.

Here’s My Logic
▪ First, the utility business lost $1.7 million in the last audited report that came out earlier this year. (FY 23/24)
▪ The utility Enterprise is losing money every single month. ▪ We are already in violation of our loan covenants on existing loans. ▪ In the last 2 years, there have been 3 major water main failures and ▪ All 3 pump stations were down at the same time.
▪ Repairs on the pump stations are becoming more expensive because spare parts have to be custom made.
▪ By not passing last year’s M218 water study, Seal Beach has lost $5.1 million in lost revenues.
▪ The longer we wait to do these capital improvement projects the more expensive they’ll get. 
Vote “YES” on Option 1
▪ I urge my colleagues to join me in doing what is best for the future of Seal Beach, insure our ability to access running water and flush our toilets,
▪ vote “YES” on Option 1

Seal Beach City CouncilAugust 11, 2025

Seal Beach City Council
August 11, 2025