Agenda packet — City Council and Concurrent Authorities, August 20, 2024 (part 9 of 9)

EXHIBIT 2
Page | 2
(DEC. 2021) rev 1.18.22

8. DELAYS. CONTRACTOR shall notify the CITY promptly of any expected delay in performance of services. However, CONTRACTOR shall not be liable for delays in performance beyond reasonable control.

9. ARPA GUIDELINES – CONTRACTOR AS SUBRECIPIENT
CONTRACTOR is classified as a Subrecipient under ARPA, which is an entity that receives a subaward from the CITY to carry out a program on behalf of the CITY using SLFRF funds. As a beneficiary of SLRFR funds from the CITY, CONTRACTOR must comply with the ARPA guidelines in order to be eligible for a grant. The guidelines, titled Compliance and Reporting Guidelines: State and Local Fiscal Recovery Funds, as amended by Treasury (the “Guidelines”), are incorporated into this AGREEMENT by reference. The Guidelines can be found at https://home.treasury.gov/policyissues/coronavirus/assistance-for-state-local-and-tribal-governments/state-and-local-fiscal-recoveryfunds/recipient-compliance-and-reporting-responsibilities. In ensuring compliance with these Guidelines, CONTRACTOR serves as a first line of defense against fraud, waste, and abuse of federal money.

As further described in the Guidelines, CONTRACTOR will generally be subject to the requirements of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards, 2 CFR Part 200. This includes, but is not limited to,
A. The implementation of internal controls and effective monitoring to ensure compliance with 2 CFR Part 200, including generally identifying direct and indirect costs and treating each cost consistently in like circumstances.

B. Ensuring that procurements using SLFRF funds, or payments under procurement contracts using such funds, are consistent with the procurement standards set forth in the Uniform Guidance at 2 CFR § 200.317 through 2 CFR § 200.327, as applicable.

C. If CONTRACTOR expends more than $750,000 in Federal awards during its fiscal year, submitting to an audit under the Single Audit Act and its implementing regulation at 2 CFR Part 200, Subpart F.

The CITY may request detailed expenditure information from CONTRACTOR in order for CITY to comply with its own reporting obligations. CONTRACTOR will be required to promptly provide any requested information to the CITY, even after the award term has expired. Among other things, the CITY may require information about the structure and objectives of the PROGRAM and information about how many individuals have been served by CONTRACTOR.

Page 127 of 143 ends

EXHIBIT G
EXHIBIT 2
Page | 3
(DEC. 2021) rev 1.18.22
Exhibit G

APPENDIX II

CONTRACT PROVISIONS UNDER FEDERAL AWARD

FEDERAL FUNDS
Federal regulations (2 C.F.R. § 200.326 and 2 C.F.R. Part 200, Appendix II) require the City to include certain contract clauses in this agreement.

The US Department of Homeland Security (DHS) – Federal Emergency Management Agency (FEMA) recommends other certain contract clauses be included.

Based on the table below, any clause identified with a check mark () next to it is hereby incorporated into this contract agreement. The full language of each clause can be found in this EXHIBIT G.

CONTRACT TYPES

1. Construction Contracts

1.1 Equal Employment Opportunity

1.2 Davis Bacon Act

1.3 Copeland “Anti-Kickback” Act

2. All Contracts

2.1 Contract Work Hours and Safety Standards Act

2.2 Clean Air Act and Federal Water Pollution Control Act

2.3 Debarment and Suspension

2.4 Byrd Anti-Lobbying Amendment

2.5 Procurement of Recovered Materials

2.6 Access to Records

2.7 DHS Seal, Logo, and Flags

2.8 Compliance with Federal Law, Regulations and Executive Orders

2.9 No Obligation by Federal Government

2.10 Program Fraud and False or Fraudulent Statements or Related Acts
Checked provisions are hereby incorporated into the
contract agreement.

Following are the FEMA requirement or recommendation
clauses listed above for contract incorporation.

Check ()
Applicable
Clauses
Construction

1.1 1.2

1.3 Check ()
Applicable
Clauses
All Contracts

2.1 2.2

2.3 

2.4 

2.5 

2.6 

2.7 

2.8 

2.9 

2.10 

Page 128 of 143 ends

EXHIBIT 2
Page | 4
(DEC. 2021) rev 1.18.22

1.1 Equal Employment Opportunity
Requirement for construction work
During the performance of this contract, the contractor agrees as follows:
(1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin. Such action shall include, but not be limited to the following:

Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.
(2) The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin. (3) The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information. (4) The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment. (5) The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor. (6) The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders. (7) In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.
(8) The contractor will include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor.

The contractor will take such action with respect to any subcontract or purchase order as the

Page 129 of 143 ends

EXHIBIT 2
Page | 5
(DEC. 2021) rev 1.18.22
administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:

Provided, however, that in the event a contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.

The applicant further agrees that it will be bound by the above equal opportunity clause with respect to its own employment practices when it participates in federally assisted construction work: Provided, that if the applicant so participating is a State or local government, the above equal opportunity clause is not applicable to any agency, instrumentality or subdivision of such government which does not participate in work on or under the contract.

The applicant agrees that it will assist and cooperate actively with the administering agency and the Secretary of Labor in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the rules, regulations, and relevant orders of the Secretary of Labor, that it will furnish the administering agency and the Secretary of Labor such information as they may require for the supervision of such compliance, and that it will otherwise assist the administering agency in the discharge of the agency's primary responsibility for securing compliance.

The applicant further agrees that it will refrain from entering into any contract or contract modification subject to Executive Order 11246 of September 24, 1965, with a contractor debarred from, or who has not demonstrated eligibility for, Government contracts and federally assisted construction contracts pursuant to the Executive Order and will carry out such sanctions and penalties for violation of the equal opportunity clause as may be imposed upon contractors and subcontractors by the administering agency or the Secretary of Labor pursuant to Part II, Subpart D of the Executive Order. In addition, the applicant agrees that if it fails or refuses to comply with these undertakings, the administering agency may take any or all of the following actions: Cancel, terminate, or suspend in whole or in part this grant (contract, loan, insurance, guarantee); refrain from extending any further assistance to the applicant under the program with respect to which the failure or refund occurred until satisfactory assurance of future compliance has been received from such applicant; and refer the case to the Department of Justice for appropriate legal proceedings.

1.2 Compliance with Davis-Bacon Act
Requirement for construction work
a. All transactions regarding this contract shall be done in compliance with the Davis-Bacon Act (40 U.S.C. 3141- 3144, and 3146-3148) and the requirements of 29 C.F.R. pt. 5 as may be applicable. The contractor shall comply with 40 U.S.C. 3141-3144, and 3146-3148 and the requirements of 29 C.F.R. pt. 5 as applicable.
b. Contractors are required to pay wages to laborers and mechanics at a rate not less than the prevailing wages specified in a wage determination made by the Secretary of Labor. c. Additionally, contractors are required to pay wages not less than once a week.

1.3 Compliance with the Copeland “Anti-Kickback” Act
Requirement for construction work > $2k
a. Contractor. The contractor shall comply with 18 U.S.C. § 874, 40 U.S.C. § 3145, and the requirements of 29 C.F.R. pt. 3 as may be applicable, which are incorporated by reference into this contract. b. Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clause above and such other clauses as FEMA may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all of these contract clauses.

Page 130 of 143 ends

EXHIBIT 2
Page | 6
(DEC. 2021) rev 1.18.22
c. Breach. A breach of the contract clauses above may be grounds for termination of the contract, and for debarment as a contractor and subcontractor as provided in 29 C.F.R. § 5.12.

2.1 Compliance with Contract Work Hours and Safety Standards Act Requirement for contracts > $100k plus mechanics & laborers (1) Overtime requirements. No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such workweek.
(2) Violation; liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (b)(1) of this section the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (b)(1) of this section, in the sum of $27 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (b)(1) of this section. (3) Withholding for unpaid wages and liquidated damages. The (write in the name of the Federal agency or the loan or grant recipient) shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (b)(2) of this section.
(4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (b)(1) through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (b)(1) through (4) of this section.

2.2 Clean Air Act and the Federal Water Pollution Control Act Requirement for contracts > $150k
Clean Air Act

1. The contractor agrees to comply with all applicable standards, orders or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.

2. The contractor agrees to report each violation to the City of Stockton and understands and agrees that the City of Stockton will, in turn, report each violation as required to assure notification to the Federal Emergency Management Agency, and the appropriate Environmental Protection Agency Regional Office.

3. The contractor agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.

Page 131 of 143 ends

EXHIBIT 2
Page | 7
(DEC. 2021) rev 1.18.22
Federal Water Pollution Control Act

1. The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.

2. The contractor agrees to report each violation to the City of Stockton_ and understands and agrees that the City of Stockton will, in turn, report each violation as required to assure notification to the Federal Emergency Management Agency, and the appropriate Environmental Protection Agency Regional Office.

3. The contractor agrees to include these requirements in each subcontract exceeding $150,000 financed in whole or in part with Federal assistance provided by FEMA.

2.3 Debarment and Suspension
(1) This contract is a covered transaction for purposes of 2 C.F.R. pt. 180 and 2 C.F.R. pt. 3000. As such, the contractor is required to verify that none of the contractor’s principals (defined at 2 C.F.R. § 180.995) or its affiliates (defined at 2 C.F.R. § 180.905) are excluded (defined at 2 C.F.R. § 180.940) or disqualified (defined at 2 C.F.R. § 180.935).
(2) The contractor must comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, and must include a requirement to comply with these regulations in any lower tier covered transaction it enters into.
(3) This certification is a material representation of fact relied upon by _City of Stockton_______. If it is later determined that the contractor did not comply with 2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C, in addition to remedies available to (insert name of recipient/subrecipient/applicant), the Federal Government may pursue available remedies, including but not limited to suspension and/or debarment.
(4) The bidder or proposer agrees to comply with the requirements of2 C.F.R. pt. 180, subpart C and 2 C.F.R. pt. 3000, subpart C while this offer is valid and throughout the period of any contract that may arise from this offer. The bidder or proposer further agrees to include a provision requiring such compliance in its lower tier covered transactions.

2.4 Byrd Anti-Lobbying Amendment, 31 U.S.C. § 1352 (as amended) Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, officer or employee of Congress, or an employee of a Member of Congress in connection with obtaining any Federal contract, grant, or any other award covered by 31 U.S.C. § 1352.

Each tier shall also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the recipient who in turn will forward the certification(s) to the awarding agency.

Required Certification. If applicable, contractors must sign and submit to the non-federal entity the following certification found at APPENDIX A, 44 C.F.R. PART 18:

Page 132 of 143 ends

EXHIBIT 2

Page | 9
(DEC. 2021) rev 1.18.22

2.5 Procurement of Recovered Materials
In the performance of this contract, the Contractor shall make maximum use of products containing recovered materials that are EPA-designated items unless the product cannot be acquired—

1. Competitively within a timeframe providing for compliance with the contract performance schedule;

2. Meeting contract performance requirements; or

3. At a reasonable price.

Information about this requirement, along with the list of EPA-designated items, is available at EPA’s Comprehensive Procurement Guidelines web site:
https://www.epa.gov/smm/comprehensive- procurement-guideline-cpg-program The Contractor also agrees to comply with all other applicable requirements of Section 6002 of the Solid Waste Disposal Act.

2.6 Access to Records
The following access to records requirements apply to this contract:
(1) The Contractor agrees to provide the City of Stockton City Manager, the FEMA Administrator, the Comptroller General of the United States, or any of their authorized representatives access to any books, documents, papers, and records of the Contractor which are directly pertinent to this contract for the purposes of making audits, examinations, excerpts, and transcriptions. (2) The Contractor agrees to permit any of the foregoing parties to reproduce by any means whatsoever or to copy excerpts and transcriptions as reasonably needed. (3) The Contractor agrees to provide the FEMA Administrator or his authorized representatives access to construction or other work sites pertaining to the work being completed under the contract. (4) In compliance with the Disaster Recovery Act of 2018, the City of Stockton and the Contractor acknowledge and agree that no language in this contract is intended to prohibit audits or internal reviews by the FEMA Administrator or the Comptroller General of the United States.

2.7 DHS Seal, Logo and Flags
The contractor shall not use the DHS seal(s), logos, crests, or reproductions of flags or likenesses of DHS agency officials without specific FEMA pre-approval

2.8 Compliance with Federal Law, Regulations, and Executive Orders This is an acknowledgement that FEMA financial assistance will be used to fund all or a portion of the contract. The contractor will comply with all applicable Federal law, regulations, executive orders, FEMA policies, procedures, and directives.

2.9 No Obligation by Federal Government
The Federal Government is not a party to this contract and is not subject to any obligations or liabilities to the non-Federal entity, contractor, or any other party pertaining to any matter resulting from the contract.

2.10 Program Fraud and False or Fraudulent Statements or Related Acts The Contractor acknowledges that 31 U.S.C. Chap. 38 (Administrative Remedies for False Claims and Statements) applies to the Contractor’s actions pertaining to this contract.

Page 134 of 143 ends

EXHIBIT 2
Bond Number: GRCA65839

BOND FOR FAITHFUL PERFORMANCE
KNOW ALL MEN BY THESE PRESENTS:

That we, SORACCO, INC., a STATE OF CALIFORNIA CORPORATION, as Principal and Granite Re, Inc. dba Granite Surety Insurance CompanY, a corporation, organized and existing under the laws of the State of Minnesota and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City of Stockton, a municipal corporation, duly created and existing under and by virtue of the laws of the State of California, as obligee, in the just and full sum of FOUR HUNDRED FIFTY-FOUR THOUSAND SIX HUNDRED SIXTY-THREE AND 00/100 DOLLARS ($454,663.00), in lawful money of the United States of America (being 100% of the contract price) for the payment whereof well and truly to be made to the said CITY, the said Principal and Surety bind themselves, their successors and assigns, jointly and severally, firmly by these presents.

The condition of the foregoing obligation is such that the above bounded Principal has simultaneously entered into a contract with the CITY, to do and perform the following work, to wit:

INSTALLATION OF FIVE CONTACTLESS PARK RESTROOMS
PROJECT NO. WP22016
NOW, THEREFORE, if the above bounded Principal, CONTRACTOR, Company or
Corporation or its subcontractor, shall well and truly perform the work contracted to be done under said contract, then this obligation to be null and void; otherwise, to remain in full force and effect.

No prepayment or delay in payment and no change, extension, addition or alteration of any provision of said contract, or in said plans or specifications agreed to between the said CONTRACTOR and the said CITY, and no forbearance on the part of the said CITY shall operate to relieve any Surety or Sureties from liability on this bond, EXHIBIT 2 Page 135 of 143
and consent by said Surety is hereby given, and the said Surety hereby waives the provisions of Sections 2819 and 2845 of the Civil Code of the State of California.

SIGNED AND SEALED on ----------------
APPROVED AS TO SURETY:

APPROVED AS TO FORM & CONTENT:

LORI M. ASUNCION

OFFICE OF THE CITY ATTORNEY
By:---------- DEPUTY CITY ATTORNEY
��o, Inc.
. -
• -- -- - ,._
.-
'
..., - ...,
.-:.

Granite Re, Inc. dba Granite Surety Insurance Company
SURETY
� Z:::s
By:----------
Kenneth D. Whittongton, ATTORNEY-IN-F-:ACT
EXHIBIT 2 Page 136 of 143
A hotary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of the document.

ACKNOWLEDGMENT OF PRINCIPAL
, 20 'L1 before me'{ -\!'f't)OV\c\ei �l)\u��y appeared Here insert Name and Title of Officer , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

State of Oklahoma
County of Oklahoma
I certify under the PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signatur�Q, �
Signature of Notary
Q)k
Public �

ACKNOWLEDGMENT OF SURETY
On this day of June, 2024 before me personally come(s) Kenneth D. Whittington, Attorney-in-Fact of Granite Re, Inc. OBA Granite Surety Insurance Company with whom I am personally acquainted, and who, being by me duly sworn, says that he reside(s) in Oklahoma City, Oklahoma that he is the Attorney-in-Fact of Granite Re, Inc. OBA Granite Surety Insurance Company, the company described in and which executed the within instrument; that he know(s) the corporate seal of such Company; and that the seal affixed to the within instrument is such corporate seal and that it was affixed by order of the Board of Directors of said company, and he signed said instrument as Attorney(s)-in-Fact of the said Company by like order.

GR-34 (CA) Ed. 01-22
EXHIBIT 2 Page 137 of 143

ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
validity of that document.

State of California
County of San Joaquin
before me V.Fernandez, Notary Public
'-------------------
(insert name and title of the officer)
personally appeared _Ri_ h_ c_ a_r_d_A_._So_ r__a _c_ co_J_r._--- __--_--_-_-_--_-_- -_-_--_ --_-_
--_-_--_--_---__-_--_--_-_--_--_--_--_-_--_-_
--___ who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
........ i V. FERNANDEZ
Notary Public• California z
San Joaquin County !
Commission 112420140
y Comm. Expires Oct 9, 2026
EXHIBIT 2 Page 138 of 143

BOND FOR LABOR AND MATERIAL
KNOW ALL MEN BY THESE PRESENTS:

That we, SORACCO, INC., a STATE OF CALIFORNIA CORPORATION, as P . . I d Granite Re, Inc. dba Granite Surety Insurance Company . . d d . . nncIpa an ____________ , corporation, organize an existing under the laws of the State of Minnesota and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City of Stockton, a municipal corporation, duly created and existing under and by virtue of the laws of the State of California, and unto any and all material suppliers, persons, companies, or corporations furnishing materials, provisions, provender or other supplies used in, upon, for or about the performance of the work contemplated to be executed or performed under the contract hereinafter mentioned, and all persons, companies, or corporations renting or hiring teams, or implements of machinery, for or contributing to said work and all persons who perform work or labor upon the same, and all persons who supply both work and materials, and whose claims have not been paid by the contractor, company or corporation in the just and full sum of FOUR HUNDRED FIFTY-FOUR THOUSAND SIX HUNDRED SIXTY-THREE AND 00/100 DOLLARS ($454,663.00) in lawful money of the United States of America (being 100% of the contract price) for the payment whereof well and truly to be made to said CITY and to said persons jointly and severally, the said principal and Surety bind themselves, their successors and assigns, jointly and severally, firmly by these presents.

The condition of the foregoing obligations is such that the above bounden Principal has simultaneously entered into a contract of even date herewith, with the CITY, to do and perform the following work, to-wit:

INSTALLATION OF FIVE CONTACTLESS PARK RESTROOMS
PROJECT NO. WP22016
NOW, THEREFORE, if the above bounden Principal, CONTRACTOR, Company or Corporation or its subcontractor, fail to pay for all materials, provisions, provender, or other supplies, or teams, used in, upon, for or about the performance of the work contracted to be done, or for any work or labor done thereon of any kind, the Surety on EXHIBIT 2 Page 139 of 143
this bond will pay the same, in an amount not exceeding the sum specified in this bond, provided that any and all claims hereunder shall be filed and proceedings had in connection therewith as required by the provisions of Division 3, Part 4, Title 15, Chapter 5, Article 1 of the Civil Code of California, provided that in case suit is brought upon this bond, a reasonable attorney's fee shall be awarded by the Court to the prevailing party in said suit; said attorney's fee to be fixed as costs in said suit, and to be included in the judgment therein rendered.

No prepayment or delay in payment and no change, extension, addition or alteration of any provision of said contract or in said plans or specifications agreed to between the said CONTRACTOR and the said CITY and no forbearance on the part of the said CITY shall operate to relieve any surety or sureties from liability on this bond, and consent to make such alterations without further notice to or consent by any such surety is hereby given, and the said sureties hereby waive the provisions of Sections 2819 and 2845 of the Civil Code of the State of California.

SIGNED AND SEALED on ------------------
.-
Saracco, Inc. ...:.

APPROVED AS TO SURETY: �-
Granite Re, Inc. dba Granite Surety Insurance Company
SURETY
APPROVED AS TO FORM & CONTENT:

LORI M. ASUNCION

OFFICE OF THE CITY ATTORNEY
By ��:5-
By: ________ _
Kenneth D. Whittington, ATTORNEY-IN:.FACT

DEPUTY CITY ATTORNEY
EXHIBIT 2 Page 140 of 143
A -nofary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of the document.

ACKNOWLEDGMENT OF PRINCIPAL
State of ti<) Q \ rIYCV\\ C<,,,
County otS.,C), AA ,r\tA �v: On this \ i-\1ay of e✓
IQ\ - t Mow A-A� �-X-ll-C-c,o 2sx-F
Name of Signer
,., ,1 , 1 ./ �I ,11)\le,_
, 20 �· before me \J • \-t'! )'\��Y�rsonally appeared
Here insert· me an itle of Offi er
, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

State of Oklahoma
County of Oklahoma
I certify under the PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature � �� kJ? .�
Signature of Notary Public

State of California
County of San Joaquin
b f V Fernandez Notary Public ---
--
-------- e ore me, • ,
(insert name and title of the officer)
personally appeared -------------------- Richard A. Soracco Jr. ------------ -------- ---
----------
---
--
-----
-
--------------
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.
(Seal)
········� V. FERNANDEZ
Notary Public· California z
San Joaquin County �
Commission # 2420140 -
y Comm. Expires Oct 9, 2026
EXHIBIT 2 Page 142 of 143
GRANITE RE, INC. DBA GRANITE SURETY INSURANCE COMPANY

GENERAL POWER OF ATTORNEY
Know all Men by these Presents:

That GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY, a corporation organized and existing under the laws of the State of MINNESOTA and having its principal office at the City of OKLAHOMA CllY in the State of OKLAHOMA does hereby constitute and appoint:

KENNETH D. WHITTINGTON; KYLE MCDONALD its true and lawful Attorney-in-Fact(s) for the following purposes, to wit:

To sign its name as surety to, and to execute, seal and acknowledge any and all bonds, and to respectively do and perform any and all acts and things set forth in the resolution of the Board of Directors of the said GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY a certified copy of which is hereto annexed and made a part of this Power of Attorney; and the said GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY through us, its Board of Directors, hereby ratifies and confirms all and whatsoever the said:

KENNETH D. WHITTINGTON; KYLE MCDONALD may lawfully do in the premises by virtue of these presents.

In Witness Whereof, the said GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY has caused this instrument to be sealed with its corporate seal, duly attested by the signatures of its President and Assistant Secretary, this 31st day of July, 2023.

ST ATE OF OKLAHOMA
COUNTY Of OKLAHOMA
SS:

Kenneth D. Whitti ton, President
i,J /t// ;,--t/h}
Kylei'P. McDonald, Assistant Secretary
On this 31st day of July, 2023, before me personally came Kenneth D. Whittington, President of the GRANITE RE, INC. DBA GRANITE SURETY INSURANCE COMPANY and Kyle P. McDonald, Assistant Secretary of said Company, with both of whom I am personally acquainted, who being by me severally duly sworn, said, that they, the said Kenneth D. Whittington and Kyle P. McDonald were respectively the President and the Assistant Secretary of GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY, the corporation described in and which executed the foregoing Power of Attorney; that they each knew the seal of said corporation; that the seal affixed to said Power of Attorney was such corporate seal, that it was so fixed by order of the Board of Directors of said corporation, and that they signed their name thereto by like order as President and Assistant Secretary, respectively, of the Company.

My Commission Expires:

April 21, 2027
Commission#: 11003620
Notary Public
GRANITE RE, INC.

Certificate
THE UNDERSIGNED, being the duly elected and acting Assistant Secretary of GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY, a Minnesota Corporation, HEREBY CERTIFIES that the following resolution is a true and correct excerpt from the July 15, 1987, minutes of the meeting of the Board of Directors of GRANITE RE, INC. DBA GRANITE SURElY INSURANCE COMPANY and that said Power of Attorney has not been revoked and is now in full force and effect. "RESOLVED, that the President, any Vice President, the Assistant Secretary, and any Assistant Vice President shall each have authority to appoint individuals as attorneys-in-fact or under other appropriate titles with authority to execute on behalf of the company fidelity and surety bonds and other documents of similar character issued by the Company in the course of its business.

On any instrument making or evidencing such appointment, the signatures may be affixed by facsimile. On any instrument conferring such authority or on any bond or undertaking of the Company, the seal, or a facsimile thereof, may be impressed or affixed or in any other manner reproduced; provided, however, that the seal shall not be necessary to the validity of any such instrument or undertaking."
IN WITNESS WHEREOF, the undersigned has subscrib�_dJrjs Q�r�tifiq5-e and affixed the corporate seal of the Corporation this --
' 2024 •
:::-/�� .. : � i; ·-
.
/\-:·-\
;:.:
_
GR-40 (CA) Ed. 08-23
§ -
•-A·
� .
_?.':.···�·· --�--
Kylef)McDonald, Assistant Secretary
EXHIBIT 2 Page 143 of 143
City of Stockton
Legislation Text
File #: 24-0772, Version: 1
ACCEPT THE SINGLE AUDIT AND INDEPENDENT AUDITORS’ REPORTS AND THE REPORT ON INTERNAL CONTROLS FOR THE YEAR ENDED JUNE 30, 2023

RECOMMENDATION
It is recommended that the City Council accept by motion the Single Audit and Independent Auditors’ Reports and the Report on Internal Control Related Matters Identified in the Audit for the year ended June 30, 2023.

Summary
Presented for the City Council’s review is the City of Stockton’s Single Audit and Independent Auditors’ Reports (Attachment A) for the year ended June 30, 2023. On August 12, 2024, the Audit Committee received, reviewed, and accepted these audit reports. The Single Audit report identifies six (6) new findings or questioned costs. Staff recommends that Council adopt the motion as proposed.

DISCUSSION
Background
The Single Audit and Independent Auditors’ Reports (Attachment A) is an annual audit of federal awards or pass-through of federal awards to the City.

The Report on Internal Controls provides a review of the City’s financial reporting systems and procedures that are used to ensure accurate financial statements. An internal control is designed to provide reasonable assurance that the City meets its objectives regarding the reliability of financial reporting, effectiveness, and efficiency of operations and compliance with applicable laws and regulations. The auditor considers the City’s internal control over financial reporting during the design of audit procedures for financial statements. The auditors do not express any opinion on the effectiveness of the City’s internal controls.

This information was presented to the Council Audit Committee on August 12, 2024.

Present Situation
With an influx of COVID-19 related Federal stimulus funds, the City’s expenditures of federal awards increased significantly by $136.7 million in Fiscal Year (FY) 2021-22 to $145.6 million in FY 2022-23.

Program and administrative staff have not increased sufficiently to properly administer the increase in federal awards and the variety of new programs. Each new program has a separate set of regulations to be followed. Examples of new programs include American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Funds, Water Infrastructure Finance and Innovation City of Stockton Page 1 of 5 Printed on 8/16/2024
powered by Legistar™
File #: 24-0772, Version: 1
(WIFIA), California Wastewater and Water Arrearage Payment Programs, and Emergency Rental Assistance passed through the State of California.

The Single Audit report identifies six (6) new findings or questioned costs summarized below:
2023-001 Internal Control Over Financial Reporting - Prior Year Adjustments, Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit Condition:

During the year ended June 30, 2023, the City reported several corrections impacting the Net Position and Fund Balances:

1. The Governmental Activities Net Position was adjusted by $(34,536,104) due to corrections on unavailable revenue and unearned revenue.

2. The Special Revenue Fund Balance was adjusted by $(38,524,453) due to corrections on unavailable revenue, unearned revenue, and revenue recognition.

3. The Other Governmental Fund Balance was adjusted by $621,346 due to corrections on revenue recognition. During the audit, we noted stale receivables and payables to be reconciled from the subsidiary ledgers to the general ledgers.

The City has experienced significant delays in the preparation and issuance of the Single Audit required under Uniform Guidance. Due to the delay in issuance of the Single Audit report, the Data Collection Form was not submitted in a timely manner.

City’s Corrective Actions:

The City has experienced significant turnover in key positions over the last fiscal year. Also, the City went through an accounting software change; the City is in the process of reconciling stale accounts and identifying how the issues occurred. The grants identified in the above finding were passed through from State agencies. The City has expended these funds in compliance with the State grant requirements. The City has hired a grant manager to assist with the periodic reconciliation of grants to the general ledger as well as establishing policies and procedures to cover this annual process. 2023-002 Internal Control Over Preparation of Schedule of Expenditures of Federal Awards Condition:

During the audit, the City provided multiple rounds of revisions to the Schedule of Expenditures of Federal Awards (“Schedule”). One significant revision included adding the Homekey Program Round 1, which was passed through the State of California, amounting to $2,779,929. This program had been excluded from the Schedule in previous years.

City’s Corrective Actions:

The City has experienced significant turnover in key positions over the last fiscal year. The City has hired a grant manager to assist with the periodic reconciliation of grants to the general ledger as well as establishing policies and procedures over the annual process. In addition, the grant manager will City of Stockton Page 2 of 5 Printed on 8/16/2024
powered by Legistar™
File #: 24-0772, Version: 1
review for pass through funding from the state to ensure proper reporting. Finance staff can review this as part of the grant master workflow.
2023-003 Allowable Costs/Cost Principles - Internal Controls Over Payroll Expenditures Condition:

Emergency Solutions Grant Program:

The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program.

Community Development Block Grants-Entitlement Grants Cluster:

Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs that were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs.

City’s Corrective Actions:

The City of Stockton has performed a review of the data for payroll and performed isolated testing in fiscal year 2023-24 that concludes the issues have been corrected. The City has hired a grant manager to assist with the periodic reconciliation of grants to the general ledger as well as establishing policies and procedures over the annual process. Finance and Payroll staff will communicate and work with the grant contacts to ensure proper documentation is maintained and allocation of salaries charged by program are approved and documented. 2023-004 Eligibility - Internal Control over Eligibility Condition:

During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The city failed to collect the zero-income attestation document from applicant. The amount of income shown in documents uploaded by applicant was different from the amount shown in application/system, check box for income verification was not ticked off by supervisor though the verification was completed. However, we recalculated those five applicants’ income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit.

City’s Corrective Actions:

At the time of Emergency Rental Assistance Program (ERAP) implementation, the guidance provided by U.S. Treasury was continuously evolving and the ERAP team was navigating a complex social and economic crisis. Residents became unemployed, had income reductions as direct result of the pandemic, and/or had limited access to technology to complete application documents. Prior to official guidance recommending the use of an attestation form, some applicants provided written City of Stockton Page 3 of 5 Printed on 8/16/2024
powered by Legistar™
File #: 24-0772, Version: 1
statements that they did not have any income. Furthermore, these applications were accompanied by eviction notices. These households were clearly at risk of experiencing homelessness or housing instability, which constitutes an “eligible household” as defined by 15 USC 9058a (k)(3)(A)(ii). This section of the U.S. Code states that a “household can demonstrate a risk of experiencing homelessness or housing instability” by providing a “past due utility or rent notice or eviction notice.” While the portal used to intake, review, and approve applications shows occasional inconsistencies with income verification boxes not checked off, all of the sampled cases were verified to be under the income threshold, provided an eviction notice, past due rent notice, and/or signed a written statement that they had zero income. Although certain boxes were not checked within the portal, all cases were verified through diligent and compassionate coordination with households requesting support.

Furthermore, a risk assessment by the State's Housing & Community Development for the 2021 Program Year evaluated the City's risk profile as Low Risk.

All program expenditures were concluded in fiscal year 2022-23. This was one-time funding. There will be some administrative costs related to the grant in fiscal year 2023-24, but no additional funding was received, therefore eligibility requirements will not be direct material in fiscal year 2023-24. 2023-005 Reporting - Internal Control and Compliance over reporting Condition:

As a result of our test work, we noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2023.

City’s Corrective Actions:

This is pandemic-related funding with limited guidance on reporting requirements. However, the City has tracked all expenditures and retained documentation for allowable costs. The City will maintain supporting documentation when a federal or grantor agency allows for an extension or removes any reporting requirement. The City will centralize reporting requirements to assist in verifying compliance is met.
2023-006 Special Tests and Provisions - Internal Control and Compliance Over Obligations, Expenditures, and Payment Requirements
Condition:

During our audit, we noted that the ESG Grant Fund obligated to sub-recipients under obligation testing were outside of the obligation timeframe of 180 days in case of ESG and 240 days in case of ESG CV without further justifications.

In addition, we noted two (2) out of seven (7) samples selected for payment requirements testing were outside of 30 days window without further justifications.

City’s Corrective Actions:

The City concurs that during the height of the pandemic there were multiple sources of funds that City of Stockton Page 4 of 5 Printed on 8/16/2024
powered by Legistar™
File #: 24-0772, Version: 1
needed to be expended at a rapid pace. The City's subrecipients were overwhelmed with providing services and the City at times did not enter into contracts within the 180 days or pay out on invoices within 30 days. Since this occurrence, the City has implemented policies and procedures to provide award letters and process payments within 30 days or document why the payment cannot be made given the documentation provided.

FINANCIAL SUMMARY
There is no financial impact associated with accepting these reports.

Attachment A - 2023 Single Audit and Independent Auditors’ Reports City of Stockton Page 5 of 5 Printed on 8/16/2024
powered by Legistar™
City of Stockton
Stockton, California
Single Audit
and Independent Auditors’ Reports
For the Year Ended June 30, 2023

ATTACHMENT A

ATTACHMENT A
City of Stockton
Single Audit Report
For the Year Ended June 30, 2023
Table of Contents
Page
Independent Auditors’ Reports:

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................................................. 1 Report on Compliance for Each Major Federal Program;
Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ........................................................ 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 6 Notes to the Schedule of Expenditures of Federal Awards ........................................................................................ 9 Schedule of Findings and Questioned Costs ............................................................................................................ 10

ATTACHMENT A
This page intentionally left blank.

ATTACHMENT A
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Stockton, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 13, 2024.

Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as items 2023-001 and 2023-002 that we consider to be material weaknesses.

ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California

Page 2 ends

2 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are require to be reported under Government Auditing Standards.

City’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Santa Ana, California
March 13, 2024

ATTACHMENT A
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF

FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
Independent Auditors’ Report
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Stockton, California’s (the “City”) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to City’s federal programs.

ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California

Page 2 ends

4 Auditors’ Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.  Obtain an understanding of City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Other Matters
The results of our auditing procedures disclosed instances of noncompliance which are required to be reported in accordance with the Uniform Guidance and which are described in the accompanying schedule of findings and questioned costs as items 2023-005 and 2023-006. Our opinion on each major federal program is not modified with respect to these matters.

Government Auditing Standards requires the auditor to perform limited procedures on City’s response to the noncompliance findings identified in our audit described in the accompanying schedule of findings and questioned costs. City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

Report on Internal Control Over Compliance
Our consideration of internal control over compliance was for the limited purpose described in the Auditors’ Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance and therefore, material weaknesses or significant deficiencies may exist that were not identified.

However, as discussed below, we did identify certain deficiencies in internal control over compliance that we consider to be material weaknesses and significant deficiencies.

ATTACHMENT A
To the Honorable Mayor and Members of City Council
of the City of Stockton
Stockton, California

Page 3 ends

5 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as item 2023-004 to be a material weakness.

A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. We consider the deficiencies in internal control over compliance described in the accompanying schedule of findings and questioned costs as items 2023-003, 2023-005 and 2023-006 to be significant deficiencies.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Government Auditing Standards requires the auditor to perform limited procedures City’s response to the internal control over compliance findings identified in our compliance audit described in the accompanying schedule of findings and questioned costs. The City’s response was not subjected to the other auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

Report on the Schedule of Expenditures of Federal Awards Required by Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated March 13, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming our opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain other procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditure of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Santa Ana, California
August 12, 2024, except for the Schedule of Expenditures of Federal Awards, which is as of March 13, 2024.

ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2023
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 6 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Housing and Urban Development
Direct Program:

CDBG - Entitlement Grants Cluster:

Community Development Block Grants/Entitlement Grants 14.218 B-19-MC-06-0026 $ 117,761 $ - Community Development Block Grants/Entitlement Grants 14.218 B-20-MC-06-0026 1,717,163 58,185 Community Development Block Grants/Entitlement Grants 14.218 B-21-MC-06-0026 76,365 76,365 Community Development Block Grants/Entitlement Grants 14.218 B-22-MC-06-0026 609,934 - Community Development Block Grants/Entitlement Grants 14.218 Program Income 2,530,547 954,048 COVID 19 - Community Development Block Grant Program 14.218 B-20-MW-06-0026 268,076 159,500 Neighborhood Stabilization Program 14.218 B-08-MN-060009 1,007 - Neighborhood Stabilization Program 14.218 B-11-MN-060009 1,007 - Total Community Development Block Grants/Entitlement Grants 5,321,860 1,248,098 Total CDBG - Entitlement Grants Cluster: 5,321,860 1,248,098 Emergency Solutions Grant Program 14.231 E-21-MC-06-0026 38,506 27,167 Emergency Solutions Grant Program 14.231 E-22-MC-06-0026 46,533 27,408 COVID 19 - Emergency Solutions Grant Program 14.231 E-20-MW-06-0026 889,971 800,135 Total Emergency Solutions Grant Program 975,010 854,710 HOME Investment Partnership Program 14.239 M-17-MC-06-0221 42,563 - HOME Investment Partnership Program 14.239 M-18-MC-06-0221 40,022 - HOME Investment Partnership Program 14.239 M-20-MC-06-0221 35,837 - HOME Investment Partnership Program 14.239 M-22-MC-06-0221 11,791 - COVID 19 - HOME Investment Partnership Program 14.239 M-21-MP-06-0221 43,873 - Total HOME Investment Partnership Program 174,086 -
Total U.S. Department of Housing and Urban Development 6,470,956 2,102,808 U.S. Department of Justice
Direct Program:

COVID 19 - Coronavirus Emergency Supplemental Funding Program 16.034 2020-VD-BX-1296 42,348 - Total Coronavirus Emergency Supplemental Funding 42,348 - Community-Based Violence Prevention Program 16.123 2020-PB-BX-0021 31,683 - Total Community-Based Violence Prevention Program 31,683 - Edward Byrne Memorial Justice Assistance Grant Program 16.738 2019-DJ-BX-0623 61,074 42,874 Edward Byrne Memorial Justice Assistance Grant Program 16.738 2020-DJ-BX-0458 116,750 36,206 Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-21-GG-01198-JAGX 178,029 146,646 Edward Byrne Memorial Justice Assistance Grant Program 16.738 15PBJA-22-GG-02064-JAGX 16,840 - Total Edward Bryne Memorial Justice Assistance Grant Program 372,693 225,726 Byrne Discretionary Grants Program 16.753 15PBJA-22-GG-00124-BRND 410,914 - Total Byrne Discretionary Grants Program 410,914 -
Total U.S. Department of Justice 857,638 225,726
U.S. Department of Transportation
Pass-Through State of California Department of Transportation:

Highway Planning and Construction:
19-20 ST Resurfac on Fed 20.205 STPL-5008(190) 20,357 - West Lane Ped Access Imp 20.205 HSIPL-5008(136) 3,324 - Bus Rapid Transit V 20.205 CML-5008(188) 424,582 -
Bus Rapid Transit 1-B 20.205 CML-5008(149) 619,561 -
Install/Upgrade Bike FAC 20.205 CML-5008(150) 1,492 -
Thornton @ Hammer & Lower Sac 20.205 CML-5008(156) 11,867 - Bridge Rehab/Replacement 20.205 BPMPL-5008(157) 18,646 - Hawk Ped Signal Install 7 20.205 HSIPL-5008(151) 81,544 - Guardrail, Transition Rail 20.205 HSIPL-5008(152) 12,948 - Federal Grantor/Pass-Through Grantor
Program Title

ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2023
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Department of Transportation (Continued)
Pass-Through State of California Department of Transportation (Continued):

Highway Planning and Construction Cluster (Continued):

Miner Ave Comp St Impr Ph1 20.205 ATPL-5008(158) 16,483 - Hunter St Diet/Bike Instl 20.205 HSIPL-5008(155) 362,437 - West Ln Traf Sig Control Sys 20.205 CML-5008(165) 24,684 - Hugh Friction Treatment 20.205 HSIPL-5008(153) 36,982 - Bear Creek/Piley Slough Bike 20.205 CML-5008(175) 908,400 - Closing Gaps to School 20.205 ATPCML-5008(178) 53,636 - HSIP 8-Convt Signal Fr Ped 20.205 HSIP-5008(166) 1,263,179 - HSIP 8-Raised Med @ Pacific 20.205 HSIPL-5008(164) 1,013,022 - HSIP 8-Raised Med @ El Dorado 20.205 HRRRL-5008(163) 273,423 - HSIP 8-Road Diet @ El Dorado 20.205 HSIPL-5008(162) 239,313 - Lincoln/ 8th Roundabout 20.205 CML-5008(176) 865,504 -
March Ln Ebmud Bike & Ped 20.205 ATPCML-5008(179) 870,883 - Moutauban/Hammertown Rnd 20.205 CML-5008(174) 183,780 - Pacific/March Intrsec Mod 20.205 CML-5008(181) 6,484 -
Realtime Traffic Flow Monitor 20.205 CML-5008(180) 238,545 - Tam O'Shanter/Knickerbock 20.205 CML-5008(173) 6,379 -
Bridge rehab & replacement 20.205 BPMP-5008(201) 2,183 - HSIP 9-LT El Dorado/March 20.205 HSIPL-5008(183) 21,332 - HSIP 9-LT Airport/Hazeltn 20.205 HSIPL-5008(184) 20,336 - HSIP 9-Sidewlk Med Mlk Bl 20.205 HSIPL-5008(186) 309,617 - HSIP 9-Rec Rpd Flsh Bcons 20.205 HSIPL-5008(185) 224,163 - Transp Mgmt Ctr Equip Upg 20.205 CMSTPL-5008(191) 70,497 - Arch-airport Rd Ts 20.205 CML-5008(192) 31,856 -
Alpine & Alvarado 3-Wy Ts 20.205 CML-5008(193) 64,083 - West Lane Quene Cutter 20.205 STPLR-7500(289) 72,502 -
HSIP 8-Install Guardrails 20.205 HSIPL-5008(168) 495 -
Total Highway Planning and Construction 8,374,519 -
Pass-Through State of California Office of Traffic Safety:

Highway Safety Cluster:

State and Community Highway Safety 20.600 PT22087 26,006 - State and Community Highway Safety 20.600 PT23181 139,917 - Total State and Community Highway Safety 165,923 -
Total Highway Safety Cluster 165,923 -
Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT22087 105,489 - Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 PT23181 163,683 - Total Minimum Penalties for Repeat Offenders for Driving While Intoxicated 269,172 - Total U.S. Department of Transportation 8,809,614 -
U.S. Treasury
Pass-Through State of California Department of Housing and Community Development:

COVID 19 - Coronavirus Relief Fund (Homekey Round 1) 21.019 20-HK-00067 2,779,929 2,779,929 Total Coronavirus Relief Fund 2,779,929 2,779,929
Direct Program:

COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 N/A 14,381,078 - Pass-Through State of California Department of Housing and Community Development:

COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 21.027 22-HK-17482 2,253,916 2,253,916 Total COVID 19 - Coronavirus State and Local Fiscal Recovery Funds 16,634,994 2,253,916 Emergency Rental Assistance Program:

Direct Program:

Emergency Rental Assistance Program 21.023 N/A 127,350 - Emergency Rental Assistance Program 21.023 N/A 189,046 - Emergency Rental Assistance Program 21.023 N/A 157,845 - Total Emergency Rental Assistance 474,241 -
Total U.S. Treasury 19,889,164 5,033,845
Federal Grantor/Pass-Through Grantor
Program Title

ATTACHMENT A
City of Stockton
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended June 30, 2023
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 8 Assistance Amount
Listing Grant Award Federal Provided to
Number Number Expenditures Subrecipients
U.S. Small Business Administration
Direct Program:

Congressional Earmarks Initiative 59.059 SBAHQ22I0043 283 - Total U.S. Small Business Administration 283 -
U.S. Environmental Protection Agency
Direct Program:

Brownfields Assessment and Cleanup Cooperative 66.818 99T74401 186,954 - Water Infrastructure Finance and Innovation (WIFIA) 66.958 N/A 108,000,000 - Total U.S. Environmental Protection Agency 108,186,954 - U.S. Department of Homeland Security
Direct Program:

Assistant to Firefighters Grant (AFG) 97.044 EMW-2018-FO-04270 13,899 - Staffing for Adequate Fire and Emergency Response (SAFER) 97.083 EMW-2020-FF-01451 1,370,743 - Total U.S. Department of Homeland Security 1,384,642 -
Total Expenditures of Federal Awards $ 145,599,251 $ 7,362,379 Federal Grantor/Pass-Through Grantor
Program Title

ATTACHMENT A
City of Stockton
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2023
9 Note 1 – Reporting Entity
The financial reporting entity consists of the primary government, City of Stockton, California (the “City”), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

The City Council acts as the governing body and is able to impose its will on the following organizations, establishing financial accountability:
 The Stockton Public Financing Authority
 Fiduciary Component Unit:
 Successor Agency of the Former Redevelopment Agency of the City of Stockton Note 2 – Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of City under programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the “Uniform Guidance”). Because the Schedule presents only a selected portion of the operations of City, it is not intended to and does not present the financial position of the City. Negative amounts reflected in the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.

The Schedule also includes $2,779,929 of federal award activity from prior years that was not included in the City’s previously issued Single Audit Reports. For more information, refer to the current year finding 2023-002.

Note 3 – Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Note 4 – Indirect Cost Rate
The City has not elected to use the 10 percent de-minimis indirect rate as allowed under Uniform Guidance.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2023
10 Section I – Summary of Auditors’ Results
Financial Statements
Types of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP: Unmodified Internal control over financial reporting:
 Material weakness(es) identified? 2023-001 and 2023-002  Significant deficiency(ies) identified? None noted
Noncompliance material to financial statements noted? No Federal Awards
Internal control over major federal programs:
 Material weakness(es) identified? 2023-004
 Significant deficiency(ies) identified? 2023-003, 2023-005 and 2023-006
Type of auditors’ report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)? Yes
Identification of major federal programs:

Assistance Listing Federal
Number(s) Name of Federal Program or Cluster Expenditures

14.218 Community Development Block Grants/Entitlement Grants $ 5,321,860

14.231 Emergency Solutions Grants Program 975,010

21.019 COVID 19 - Coronavirus Relief Fund (Homekey Round 1) 2,779,929

21.027 Coronavirus State and Local Fiscal Recovery Funds 16,634,994

66.958 Water Infrastructure Finance and Innovation (WIFIA) 108,000,000

97.083 Staffing for Adequate Fire and Emergency Response (SAFER) 1,370,743 Total Expenditures of All Major Federal Programs $ 135,082,536 Total Expenditures of Federal Awards $ 145,599,251
Percentage of Total Expenditures of Federal Awards 92.78% Dollar threshold used to distinguish between type A and type B programs: $1,127,978 Auditee qualified as low-risk auditee under 2 CFR 500.520? No

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
11 Section II – Financial Statements Findings
A. Current Year Findings– Financial Statement Findings
2023-001 – Internal Control Over Financial Reporting – Prior Year Adjustments, Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit Criteria:

Management is responsible for the preparation and fair presentation as well as the accuracy of its financial statements including disclosures in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. As part of satisfying that responsibility, management should ensure complete year-end closing and diligently produce reliable and accurate financial information.

Generally accepted auditing standards defined internal control as a process – affected by the Members of City Council, management, and other personnel – designed to provide reasonable assurance regarding the achievement of objectives in the following categories:
 Reliability of financial reporting
 Effectiveness and efficiency of operations, and
 Compliance with applicable laws and regulations.

In essence, accounting policies and procedures would aid the City in providing training for accounting personnel, communicating and providing a source of reference to approved policies, and maintaining consistency of recording financial transactions.

Management is responsible for providing timely and accurate financial information. Since the City has expended over $750,000 of expenditures of federal awards, Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Aware (“Uniform Guidance”), states the City is required to submit the Data Collection Form and the reporting package to the Federal Audit Clearinghouse and the State Controller’s Office, which include the Basic Financial Statements of the City, within the earlier of 30 days after receipt of auditor’s report, or nine months after the end of the audit period.

Condition:

During the year ended June 30, 2023, the City reported several corrections impacting the Net Position and Fund Balances:

1. The Governmental Activities Net Position was adjusted by $(34,536,104) due to corrections on unavailable revenue and unearned revenue.

2. The Special Revenue Fund Balance was adjusted by $(38,524,453) due to corrections on unavailable revenue, unearned revenue, and revenue recognition.

3. The Other Governmental Fund Balance was adjusted by $621,346 due to corrections on revenue recognition.

During the audit, we noted stale receivables and payables to be reconciled from the subsidiary ledgers to the general ledgers.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
12 Section II – Financial Statements Findings (Continued) A. Current Year Findings– Financial Statement Findings (Continued) 2023-001 – Internal Control Over Financial Reporting – Prior Year Adjustments, Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit (Continued) Condition (Continued):

Cause:

There is no formal process in place to conduct periodic review and reconciliation of the grant revenue between advance funding grants and reimbursement grants. Furthermore, detailed review and reconciliation of the general ledger balances from the old financial system (HTE) to the current financial system (MUNIS) is incomplete.

Context and Effect:

A prior period adjustment is reported as noted in the Condition. Without further reviewing and reconciling the time of the transition from the old financial system to the Munis, stale receivables and payables could result in material misstatement of the financial statements.

The City is neither in compliance with Uniform Guidance nor is it meeting its current demands for external financial reporting.

Recommendation:

We recommend the City evaluate its staff size for Finance Division. We also recommend the City update and follow its policy to review and reconcile the unavailable revenue related to grants. The policy and procedures should also include the year-end closing procedures and the accounts to be reconciled in accordance with Governmental Accounting Standards Board Statements and provide training to staff to properly perform the reconciliation and closing.

In addition, the policy and procedures should include critical due dates and develop a listing of assignment, including department coordinated items, based on available resources to meet those due dates.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
13 Section II – Financial Statements Findings (Continued) A. Current Year Findings– Financial Statement Findings (Continued) 2023-002 – Internal Control Over Preparation of Schedule of Expenditures of Federal Awards Criteria:
2 CFR 200.302(b)(1) states that the nonfederal entity must identify in its accounts all federal awards received and expended, as well as the federal programs under which they were received. Federal program and award identification must include, as applicable, the assistance listing title and number, the federal award identification number and year, the name of the federal agency, and the name of the pass-through entity, if any. This information enables the auditee to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards.

Pursuant to Code of Federal Regulation §200.510 Financial statements:

All auditees must:
(a) Financial statements. The auditee must prepare financial statements that reflect its financial position, results of operations or changes in net assets, and, where appropriate, cash flows for the fiscal year audited. The financial statements must be for the same organizational unit and fiscal year that is chosen to meet the requirements of this part. However, non-Federal entity-wide financial statements may also include departments, agencies, and other organizational units that have separate audits in accordance with § 200.514(a) and prepare separate financial statements.
(b) Schedule of expenditures of Federal awards. The auditee must also prepare a schedule of expenditures of Federal awards for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.

While not required, the auditee may choose to provide information requested by Federal awarding agencies and pass-through entities to make the schedule easier to use. For example, when a Federal program has multiple Federal award years, the auditee may list the amount of Federal awards expended for each Federal award year separately. At a minimum, the schedule must:
(1) List individual Federal programs by Federal agency. For a cluster of programs, provide the cluster name, list individual Federal programs within the cluster of programs, and provide the applicable Federal agency name. For R&D, total Federal awards expended must be shown either by individual Federal award or by Federal agency and major subdivision within the Federal agency. For example, the National Institutes of Health is a major subdivision in the Department of Health and Human Services. (2) Provide total Federal awards expended for each individual Federal program and the assistance listing number or other identifying number when the assistance listing number information is not available. For a cluster of programs also provide the total for the cluster.

Pursuant to Code of Federal Regulation §200.514 Scope of audit:

The auditor must determine whether the financial statements of the auditee are presented fairly in all material respects in accordance with generally accepted accounting principles. The auditor must also determine whether the schedule of expenditures of Federal awards is stated fairly in all material respects in relation to the auditee's financial statements as a whole.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
14 Section II – Financial Statements Findings (Continued) A. Current Year Findings– Financial Statement Findings (Continued) 2023-002 – Internal Control Over Preparation of Schedule of Expenditures of Federal Awards (Continued) Condition:

During the audit, the City provided multiple rounds of revisions to the Schedule of Expenditures of Federal Awards (“Schedule”), which impacted the major program determination and the type A and type B threshold calculation.

During our review of the Schedule provided by the City, we noted the Homekey Program Round 1, passed through the State of California in the amount of $2,779,929 was excluded from the Schedule in the previous years.

Cause:

There was insufficient communication between the Finance Division and project managers overseeing the federal programs and inadequate training to correctly identify funding sources.

Context and Effect:

With a vacancy in the grants department and the receipt of unprecedented COVID relief pass-through funding, the departments faced challenges due to insufficient knowledge of proper reporting processes. The multiple rounds of revisions to the Schedule could potentially impact the determination on the major programs to be tested and also lead to the wrong determination.

Recommendation:

We recommend frequent communication between the Finance Division and other departments in identifying federal programs. In addition, we recommend the City provide more training to both grant management staff and finance staff to enhance the skill in identifying pass through programs and ensure the accuracy and completeness of the Schedule.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
15 Section II – Financial Statements Findings (Continued) B. Prior Year Findings – Financial Statement Findings
2022-001 – Internal Control Over Financial Reporting – Prior Year Adjustments, Year-End Closing, Reconciliation, and Delay in Issuance of the Single Audit Condition:

During the year ended June 30, 2023, the Successor Agency to the Redevelopment Agency reported a correction of cash with fiscal agent in the amount of $1,868,468 and the adjustment resulted in the net position restatement from $(59,008,834) to $(60,877,302).

During the audit, we noted stale receivable and payable to be reconciled from the subsidiary ledgers to the general ledgers.

Recommendation:

We recommend the City evaluate its staff size for Finance Division. We also recommend the City update and follow its policy to review and reconcile the general ledger. The policy and procedures should also include the year-end closing procedures and the accounts to be reconciled in accordance with Governmental Accounting Standards Board Statements and provide training to staff to properly perform the reconciliation and closing.

Status:

This finding is still applicable for the year ended June 30, 2023 See current year finding 2023-001.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
16 Section II – Financial Statements Findings (Continued) B. Prior Year Findings – Financial Statement Findings (Continued) 2022-002 – Internal Control Over Preparation of Schedule of Expenditures of Federal Awards Condition:

During our review of the Schedule of Expenditures of Federal Awards (“Schedule”) provided by the City, we noted the Emergency Rental Assistance Program, passed through the State of California in the amount of $18,614,118 were excluded in the Schedule.

During the audit, there were multiple rounds of revisions to the Schedule that were provided by the City. Included in the revision was the Federal related expenditures for the American Rescue Plan Act, that passed through the California State Water Resource Control Board, in the amount of $3,599,667, which was initially excluded from the Schedule.

Recommendation:

Status:

This finding is still applicable for the year ended June 30, 2023 See current year finding 2023-002.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
17 Section III – Federal Awards Finding and Questioned Costs A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit 2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program:

Assistance Listing Number: 14.231
Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218
Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):

Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must:
 Be incorporated into the organization’s official records;  Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort);
 Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and
 Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies).

Condition:

Emergency Solutions Grant Program
The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program.

Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
18 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures (Continued) Cause:

The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process.

Effect or Potential Effect:

The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities.

Questioned Costs:

None.

Context:

See condition above for the context of the finding.

Identification as a Repeat Finding, If Applicable:

Not applicable.

Recommendation:

We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
19 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-004 – Eligibility – Internal Control Over Eligibility Identification of the Federal Program:

Assistance Listing Number: 21.023
Assistance Listing Title: Emergency Rental Assistance Program Federal Agency: Department of Treasury
Pass-Through Entity: State of California Department of Finance Federal Award Identification Number: N/A
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):

Pursuant to the May 2023 Compliance Supplement, Eligibility:

This approach to eligibility was implemented in accordance with 15 USC 9058a, for ERA 1 in 15 USC 9058a(c)(2)(C)(ii) concerning documentation of payments to households, 15 USC 9058a(f)(2)(A) and (B) of the Act concerning signature requirements for applications and documentation required for tenants, 15 USC 9058a (k)(1) concerning area median income determinations, and 15 USC 9058a (k)(3)(A)(I) and (II) concerning eligible household determinations and attestation requirements. This treatment is further explained in the ERA FAQs; 15 USC 9058a; and the Treasury, Department of Justice and Department of Housing and Urban Development joint letter issued August 27, 2021 (https://home.treasury.gov/system/files/136/EvictionMoratorium-Joint-Letter.pdf).

To the extent that a grantee has established and consistently followed its own reasonable procedures for implementing an eligibility determination process, consistent with Treasury’s guidance, it is not Treasury’s expectation that grantees should seek additional documentation from a beneficiary after the initial determination of eligibility has been completed, including for those determined to be eligible using self-attestation, categorical eligibility, or fact-specific proxies in qualifying circumstances. Testing of individual household eligibility-related documentation should be limited to material already collected by the grantee during application as much as possible to avoid imposing undue burden on households that remain at risk of housing instability.

Condition:

During our audit, we noted five (5) samples out of nine (9) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification. The city failed to collect the zero income attestation document from applicant. The amount of income shown in documents uploaded by applicant was different from the amount shown in application/system, check box for income verification was not ticked off by supervisor though the verification was completed. However, we recalculated those five applicants’ income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit.

Cause:

The City did not have proper internal controls in place to review the process performed.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
20 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-004 – Eligibility – Internal Control Over Eligibility (Continued) Effect or Potential Effect:

The City could potentially be out of compliance with the eligibility requirement due to the error in executing the internal control procedures.

Questioned Costs:

None.

Context:

See condition above for the context of the finding.

Identification as a Repeat Finding, If Applicable:

Yes. See prior year finding 2022-003.

Recommendation:

We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
21 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-005 – Reporting – Internal Control and Compliance over Reporting Information of the Federal Program(s):

Assistance Listing Number: 14.218
Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A
Federal Award Identification Number: B-20-MW-06-0026
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation):

The OMB Compliance Supplement requires that reports submitted to the Federal awarding agency include all activity of the reporting period, are supported by underlying accounting information and are presented in accordance with program requirements.

Pursuant to Guidance on Section 15011 of the CARES Act requires that recipients of $150,000 or more of CARES Act funding submit, not later than 10 days after the end of each calendar quarter, a report containing:
information regarding the amount of funds received; the amount of funds obligated or expended for each project or activity; a detailed list of all such projects or activities, including a description of the project or activity; and detailed information on any subcontracts or subgrants awarded by the recipient. This report is limited to Community Development Block Grants/Entitlement Grants Cluster - COVID-19 funding and does not include other Community Development Block Grants/Entitlement Grants Cluster funds that may be used to address coronavirus. Grantees and subrecipients have reported data meeting the Section 15011 requirements at usaspending.gov. The Pandemic Response Accountability Committee (PRAC), an independent oversight committee within the Council of the Inspectors General on Integrity and Efficiency, has determined that the data reported in usaspending.gov has fulfilled these reporting requests. (“Section 15011 Report”).

Condition:

As a result of our test work, we noted that the City did not submit any of the four (4) quarterly Section 15011 Reports for the year ended June 30, 2023.

Cause:

The City was not aware of the Section 15011 CARES reporting.

Effect or Potential Effect:

Delay in filing and not filing the reports resulted in noncompliance with the compliance requirements, which can result in errors going undetected by management.

Questioned Costs:

None.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
22 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-005 – Reporting – Internal Control and Compliance over Reporting (Continued)

Context:

See condition above for the context of the finding.

Identification as a Repeat Finding, If Applicable:

Not Applicable.

Recommendation:

We recommend that the City conduct thorough research on the reports needed to be submitted and contact the grantor if there is any confusion. When a report cannot be submitted by the due date, the City should request an extension from the funding agency and maintain a record of the approval.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
23 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-006 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements
Identification of the Federal Program:

Pursuant to May 2023 Compliance Supplement, Special Tests and Provisions – Obligation, Expenditures and Payment Requirements –
Obligation-ESG. Funds allocated to metropolitan cities, urban counties, and territories. Within 180 days after the date that HUD signs the grant agreement (or a grant amendment for reallocation of funds) with a metropolitan city, urban county, or territory, the recipient must obligate all of the grant amount, except the amount for its administrative costs.

ESG-CV funds must be obligated by the recipient in accordance with 24 CFR 576.203(a)(1) and (2), except as provided below. The applicable period for obligating ESG-CV funds begins on the date HUD signed the recipient’s grant agreement for the first allocation of ESG-CV funds. The obligation deadlines below apply to the both the first and second allocation of ESG-CV funds. HUD is also providing further flexibility for recipients (including states and non-states) to provide additional time to identify entities that have capacity and expertise to mitigate the impacts of coronavirus, including those who have not previously or recently received ESG funding. a. Recipients that are metropolitan cities, urban counties, or territories may have up to 240 days from the date HUD signs the grant agreement to obligate ESG-CV funds. Recipients must maintain in their program records a description of any changes the recipient implemented to identify and select new subrecipients.

Payments to Subrecipients. The recipient must pay each subrecipient for allowable costs within 30 days after receiving the subrecipient’s complete payment request. This requirement also applies to each subrecipient that is a unit of general-purpose local government (24 CFR section 576.203).

Condition:

In addition, we noted two (2) out of seven (7) samples selected for payment requirements testing were outside of 30 days window without further justifications.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
24 Section III – Federal Awards Finding and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2023-006 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements (Continued)
Cause:

The City does not have formal policies and procedures in place to obligate the funds within the required timeframe nor complete the subrecipient’s payment request within 30 days. In addition, the City did not have procedures in place to timely request grantor extensions and/or document exceptions that are outside of uniform guidance.

Effect or Potential Effect:

The exceptions noted resulted in noncompliance.

Questioned Costs:

None.

Context:

See condition above for the context of the finding.

Identification as a Repeat Finding, If Applicable:

Yes. See prior year finding 2022-006.

Recommendation:

We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely.

Views of Responsible Officials:

Management concurs with the finding.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
25 Section III – Federal Awards Finding and Questioned Costs (Continued) B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit 2022-003 – Eligibility – Internal Control Over Eligibility Identification of the Federal Program:

During our audit, we noted four (4) samples out of forty (40) samples selected for the eligibility requirement testing with internal control deficiency related to the income eligibility verification The application reviewer made errors on data input and reported those applicants’ income as zero instead of the actual income provided by the applicants. However, we recalculated those four (4) applicants’ income based on the income verification support provided and those applicants were eligible to receive the grant subsidy based on the income limit.

Recommendation:

We recommend the City enhance its internal control by implementing policies and procedures over eligibility requirement.

Status:

Internal control issues on eligibility noted again during the audit for the year ended June 30, 2023. Finding carried forward. Refer to finding 2023-004.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
26 Section III – Federal Awards Finding and Questioned Costs (Continued) B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2022-004 – Procurement and Suspension, and Debarment – Internal Control over Verification Against the System for Award Management (“SAM”)
Identification of the Federal Program (s):

Assistance Listing Number: 20.205
Assistance Listing Title: Highway Planning and Construction Federal Agency: Department of Transportation
Pass-Through Entity: State of California Department of Transaction Federal Award Identification Number: Refer to the Schedule Assistance Listing Number: 21.027
Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: Department of Treasury
Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Condition:

During our audit, we noted that the City did not have documentation on verifying the vendors against the SAM to ensure that they were not suspended or debarred from federally funded purchases.

Recommendation:

We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely.

Status:

The finding was resolved during the year ended June 30, 2023.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
27 Section III – Federal Awards Finding and Questioned Costs (Continued) B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2022-005 – Reporting – Internal Control and Compliance over Reporting Identification of the Federal Program:

Assistance Listing Number: 66.958
Assistance Listing Title: Water Infrastructure Finance and Innovation (WIFIA) Federal Agency: United Statements Environmental Protection Agency Pass-Through Entity: N/A
Federal Award Identification Number: N/A
Condition:

During the audit, we noted that the City was not aware of the reporting requirements from the loan agreements and only filed the Construction Reporting.

Recommendation:

We recommended the City establish internal control procedures to monitor compliance requirements to make sure the required reports are filed properly and timely.

Status:

The finding was resolved during the year ended June 30, 2023.

ATTACHMENT A
City of Stockton
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2023
28 Section III – Federal Awards Finding and Questioned Costs (Continued) B. Prior Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) 2022-006 – Special Tests and Provisions – Internal Control and Compliance over Obligation, Expenditure, Payment Requirements
Identification of the Federal Program:

During our audit, we noted two (2) out of nine (9) samples selected for obligation testing were outside of the obligation without further justifications.

In addition, we noted three out of forty samples selected for payment requirements testing were outside of 30 days window without further justifications.

Recommendation:

We recommended the City establish internal control procedures to monitor compliance requirements to ensure the subrecipient’s payment requests are processed timely.

Status:

The City was not in compliance with obligation requirement deadlines and payment requirement deadline.

Finding carried forward into fiscal year 2023. Refer to finding 2023-006.

ATTACHMENT A
City of Stockton
Legislation Text
File #: 24-0816, Version: 1

FIREWORKS TASK FORCE PRESENTATION

RECOMMENDATION
This is an informational item only. No action to be taken.

Summary
The Stockton Fire Department will provide an informational presentation on Fireworks Task Force activities over the 4th of July holiday.

No action to be taken.

City of Stockton Page 1 of 1 Printed on 8/16/2024
powered by Legistar™
2024

FIREWORKS TASK FORCE

SUMMARY
City Council Meeting
August 20, 2024
Agenda Item 15.1

INCIDENT ACTION PLAN
• The focus of this task force was to educate the public, enforce applicable laws prohibiting the possession and sale of illegal fireworks, assist patrol with fireworksrelated calls for service and confiscation of illegal fireworks. • A collaboration between Stockton Fire Department, Police Department, and City of Stockton Code Enforcement

PUBLIC EDUCATION EVENTS
The Fire Prevention Bureau teamed up with community services to host 4 public firework safety outreach events before the 4th of July holiday:
• June 25th – Arnold Rue Community Center
• June 26th – Seifert Community Center
• June 27th – Stribley Community Center
• June 28th – Van Buskirk Community Center

EDUCATION

PROVIDED
Virtual Safe
Operator Training for
fireworks stand
operators
Booth inspections &
public awareness
Magnetic signs for
Fire Prevention
vehicles
Facebook postings in
English, Spanish, &
Vietnamese
Information
regarding the Social
Host Ordinance
Banners posted at
firehouses

COMPLAINTS RECEIVED
0 50
100
150
200
250
300
2021 2022 2023 2024
Ask Stockton Nail 'Em

SOCIAL HOST CITATIONS
58 91
41 2022 2023 2024
Date Stockton Fire Code Enforcement Total
6/28 1 0 1
6/29 1 1 2
6/30 2 0 2
7/1 1 0 1
7/2 2 3 5
7/3 1 3 4
7/4 17 8 25
7/5 0 1 1
Grand Total 25 16 41
2024 Breakdown

FIRE DEPARTMENT INCIDENTS
2023 2024 % Change 2023 2024 % Change
Calls to ECD 1,122 1,065 - 5% Building Fires 2 9 350%
Dispatched Calls 760 704 - 7% Vehicle Fires 10 8 -20%
Grass / Brush and Dumpster Fires 109 136 25%
2023 2024 % Change
Calls to ECD 445 587 32%
Dispatched Calls 287 418 46%
7/4 0800-0800 hrs
7/1 - 7/3 6/28 - 7/5

CITY OF STOCKTON INCIDENTS
Date Range: 6/28 – 7/5
2022 2023 2024 2022 2023 2024
Building Fires 5 2 9 Confiscated 134 pounds 0 225 pounds Vehicle Fires 4 10 8 Calls For Service 162 122 110
Grass/Brush and Dumpster Fires 118 109 136 Total Arrests 0 0 0 Social Host Citations 58 55 25 Social Host Citations 0 0 0 2022 2023 2024
Social Host Citations N/A 36 16
Fire Incidents Police Incidents
Code Enforcement Incidents

IMPLEMENTED ITEMS TO REDUCE ILLEGAL

FIREWORKS
• Implementation of the city ordinance (social host)
• City sponsored fireworks show
• Increased size of the fireworks taskforce
• Using Code Enforcement and Fire Prevention staff for patrol • Increased social media and prevention activity (starting June1st)

CONSIDERATION

FOR THE FUTURE
• State Fire Marshal’s office to increase statewide
enforcement and education
• Use aerial devices like drones to capture illegal firework activity
• Multi-family dwelling exceptions (re-write code language) • County pockets (have county adopt social host)
• Rewards to individuals that provide info that leads to arrest
• Increase social host citation amount
• Parking lots, parks or open areas (how to give citations) • Focus taskforce to the night of July 4th
• Amnesty fireworks turn in program
QUESTIONS?
City of Stockton
Legislation Text
File #: 24-0817, Version: 1

COMPLAINT AND REQUEST FOR CENSURE HEARING REGARDING ALLEGED VIOLATION OF COUNCIL POLICY 5.10

RECOMMENDATION
This Complaint and Request for Censure Hearing is presented to the City Council for its review and consideration of whether the censure process will move forward regarding an alleged violation of Council Policy 5.10.

Summary
On August 2, 2024, Councilmembers Blower and Villapudua submitted a letter to the Interim City Clerk filing a complaint pursuant to Council Policy 4.08 (Attachment A- Letter) requesting a censure hearing regarding an alleged policy violation by Councilmember Padilla.

In accordance with Council Policy 4.08.020(2), the four councilmembers that did not submit the complaint and were not the subject of the complaint are asked to consider whether the censure process should not move forward (Attachment B- Council Policy 4.08).

Absent a unanimous vote by those four councilmembers that the censure process should not move forward, the Mayor shall appoint a Council Ad Hoc Committee pursuant to Council Policy 4.08.020(2), which will review the allegations of the complaint, follow the process under Council Policy 4.08, and prepare a report and recommendation on the complaint to the full Council.

DISCUSSION
Background
Council Policy Manual Chapter 4.08 (Council Censure) establishes a process for the censure of councilmembers in connection with an alleged violation of law or serious violation of City policies.

Under the policy, any two members of the City Council may submit, in writing to the City Clerk, a complaint and request for a censure hearing.

On August 2, 2024, Councilmembers Blower and Villapudua submitted a complaint to the Interim City Clerk under Council Policy 4.08, alleging that Councilmember Padilla violated Council Policy 5.10 (Attachment C- Council Policy 5.10). The letter further requested that a censure hearing be placed on the next regular meeting agenda in accordance with Council Policy 4.08.020 (1).

In accordance with Council Policy 4.08.020 (2) and (3), notification of the complaint and request was sent to Councilmember Padilla on August 2, 2024 and the matter was placed on the agenda for the next regular council meeting.

City of Stockton Page 1 of 2 Printed on 8/16/2024
powered by Legistar™
File #: 24-0817, Version: 1
Present Situation
Council Policy Manual Chapter 4.08 (Council Censure) establishes a process for the censure of councilmembers in connection with an alleged violation of law or serious violation of City policies.

The process begins with a complaint submitted by two councilmembers to the City Clerk and a decision by uninvolved councilmembers as to whether the process will move forward.

At this initial step in the process, neither argument nor evidence is required. Instead, the City Council is tasked with deciding whether the process will continue. Under the policy, the four councilmembers that did not submit the complaint and were not the subject of the complaint are asked to consider and decide whether the censure process should not move forward.

Absent a unanimous vote that the censure process not proceed, the Mayor shall appoint a Council Ad Hoc Committee to review the complaint.

Council Policy 4.08.020(2) states in relevant part:
“…Councilmembers who made the complaint shall not serve on the ad hoc committee. In even numbered years, the ad hoc committee shall be the Mayor and two Councilmembers from Districts 2, 4, or 6...”
The three councilmembers from Districts 2, 4, and 6 were not involved in submitting the complaint.

Therefore, the Mayor may appoint any two councilmembers from Districts 2, 4, or 6 to serve on the Council Ad Hoc Committee.

Once established, the Council Ad Hoc Committee will review the complaint and prepare a report and recommendation regarding the alleged violation to the full Council.

FINANCIAL SUMMARY
There is no direct financial impact to this action.

Attachment A - Letter
Attachment B - Council Policy 4.08
Attachment C - Council Policy 5.10
City of Stockton Page 2 of 2 Printed on 8/16/2024
powered by Legistar™
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
Attachment A
CHAPTER 4.08

COUNCIL CENSURE
§ 4.08.010. Policy.
§ 4.08.020. Procedures.
1) In order to deter violations of law and serious violations of adopted City policies, the City Council may take formal action against its members for such misconduct in the form of censure.
2) Censure is a formal Resolution of City Counsel reprimanding one of its own members for specified conduct, generally a violation of law or of City policy where the violation of policy is considered to be a serious offense.
3) Censure should not follow an occasional error in judgment, which occurs in good faith and is unintentional.
4) Censure carries no fine or suspension of the rights of the member as an elected official but a censure is a punitive action that serves as a punishment for wrongdoing. 1) Any two members of the City Council may submit, in writing to the City Clerk, a complaint and request for a censure hearing concerning an alleged violation of law or serious violation of City policies by another member. The complaint shall provide specific allegations and any supporting evidence of specific conduct alleged to violate existing law or adopted City policies. The City Clerk shall place this matter on an agenda at a regular City Council meeting.
2) At that meeting, the Councilmembers who did not submit the complaint and the Councilmember who is not the subject of the censure complaint may, by unanimous vote, direct the censure hearing not proceed. Otherwise, the Mayor shall appoint a Council ad hoc committee to review the complaint as set forth in subsection 4 below. Councilmembers who made the complaint shall not serve on the ad hoc committee. In even numbered years, the ad hoc committee shall be the Mayor and two Councilmembers from Districts 2, 4, or 6. In odd numbered years, the ad hoc committee shall be the Mayor and two Councilmembers from Districts 1, 3, or 5. If the Mayor is either one of the Councilmembers who submitted the complaint or is the subject of the censure complaint, the Vice-Mayor shall serve on the committee and make the other appointment as provided above. If both the Mayor and the Vice-Mayor have submitted the complaint, the Councilmember with the longest tenure (and who is not the subject of the complaint) shall serve on the committee and make the appointment as provided above. If two or more Councilmembers have the same longest tenure, the Councilmembers shall draw straws as to who will serve on the committee and make the other appointment. The make up of the ad hoc committee as described above is the general rule; depending on which Councilmembers have made the complaint and/or which Councilmember is the subject of the complaint, the make up of the ad hoc committee is flexible.
3) A copy of the complaint and request for censure shall be provided to the accused Councilmember as soon as possible following receipt, but in no event less than 72 hours prior City of Stockton, CA
§ 4.08.010 § 4.08.020
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment B
to the meeting of the ad hoc committee at which the complaint and request for a censure hearing will be considered.
4) The ad hoc committee shall review the allegations of the complaint, conduct whatever investigation into the allegations of the complaint is necessary, and prepare a report and recommendation on the complaint to the full City Council. 5) The ad hoc committee shall be staffed by the administrative support staff as may be necessary to assist in its investigation and report to the Council. 6) Upon completion of its review of the complaint and any investigation, the committee shall determine if, considering all the facts and evidence, there are reasonable grounds to believe or not believe that the alleged violation of law or serious violation of adopted City policy occurred. The ad hoc committee shall make a written report to the Council stating the specific law or policy alleged to have been violated, and summarizing the complaint, evidence, and the results of any additional investigation. The ad hoc committee shall also make a recommendation to the Council that the complaint is supported by sufficient evidence of a violation of law or serious violation of adopted City policy to warrant a censure hearing, or, alternatively, that the complaint is not supported by sufficient evidence of a violation of law or serious violation of adopted City policy to warrant a Council censure hearing. 7) If the ad hoc committee determines that the allegations are supported and a censure hearing is warranted, the committee shall direct the City Clerk to forward its report and recommendation to the entire City Council and set the matter for a public censure hearing before the City Council. If the ad hoc committee concludes that the allegations are not supported and a censure hearing is not warranted, the ad hoc committee shall direct the City Clerk to forward the committee's report and recommendation to the entire City Council and no further action on the complaint will be taken unless a City Council majority directs during Council Communications the matter to be placed on its agenda for further consideration. 8) If a public hearing is set before the City Council, prior to any formal action by the City Council to censure a member, there person against whom censure is sought is entitled to due process of law, which requires notice, an opportunity to be heard, including the opportunity to refute evidence against him/her.
9) The hearing shall be far enough in advance to give the member subject to censure adequate time to review the allegations and evidence against him or her and prepare a defense, but no longer than 30 days from the date of the ad hoc committee's recommendation. 10) At the hearing, the member shall be given an opportunity to be heard. 11) A City Council decision to censure requires the adoption of a Resolution making findings, based on substantial evidence that the member has engaged in conduct that constitutes a violation of law or a serious violation of an adopted City policy. The resolution must be affirmed by at least four affirmative votes of the Council. The accused Councilmember shall not participate in the City Council's deliberations after the public hearing is closed or in any vote by the City Council on the proposed censure.

City of Stockton, CA
§ 4.08.020 § 4.08.030
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment B
§ 4.08.030. Responsibilities.

City Clerk: Place allegations of policy violations on agenda for City Council meeting.

Mayor: Appoint a Council ad hoc committee to review complaint.

City Councilmembers: Determine whether censure hearing should proceed. If selected, serve on ad hoc committee to review complaint.
§ 4.08.040. Relevant authority.

The authority for a City Council to censure one of its own members stems from State law.

Government Code Section 36813 provides for a legislative body to establish rules for the conduct of its proceedings.
§ 4.08.050. Related administrative directive, city policy, city procedure.

None applicable.
§ 4.08.060. Related forms, documents, or links.

None applicable.
§ 4.08.070. Frequently asked questions.

None applicable.
§ 4.08.080. Update history.
12/17/13 - Adopted by Resolution No. 2013-12-17-1213
1/26/16 - Amended by Resolution No. 2016-01-26-1203
City of Stockton, CA
§ 4.08.030 § 4.08.080
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment B
CHAPTER 5.10

MAYOR AND COUNCIL DISCRETIONARY FUNDING
§ 5.10.010. Policy.
1) SCOPE
This policy only applies to discretionary funding allocated by the Mayor and Council to be expended by the Mayor and Council in fiscal years when discretionary funding is explicitly adopted in the annual operating budget.

A) This policy shall apply when City Councilmembers act in their official capacity as members of the Council.

B) This policy shall apply when City Councilmembers are requesting funds from their discretionary spending allocations.
2) PURPOSE
A) The City hereby expressly acknowledges its responsibility to wisely administer limited public resources and to expend them only when there will be a substantial benefit to the City and its residents. To conserve City resources and keep expenses within community standards for public officials, expenditures shall adhere to the rules and guidelines set forth in this policy and shall govern reimbursement to City Councilmembers for actual and necessary expenses incurred in the performance of official duties.

B) Authorized Expenses
Expenses incurred by Councilmembers in connection with sponsorship for activities or events constitute authorized and reimbursable expenses under the following conditions:
i) Has a community benefit.
ii) Cannot be religious or political in nature.
iii) Cannot be a personal benefit.

C) Reimbursement for Mileage
i) Communication or meeting with constituents.
ii) Attend local events that have a community benefit
iii) Attend City-sponsored events.
iv) Events and meetings shall not be political or religious in nature.

D) Membership Reimbursement
i) Has a community benefit.
ii) Cannot be personal benefit.

City of Stockton, CA
§ 5.10.010 § 5.10.010
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment C
§ 5.10.020. Process.
3) COMPLIANCE WITH LAWS
Councilmembers should be aware that some expenditures may be subject to reporting under the Political Reform Act and other laws. In addition, all agency expenditures are public records subject to disclosure under the Public Records Act. 4) POLICY VIOLATIONS
A) Violations of this policy, including falsifying expense reports, may result in any or all of the following:
i) Loss of reimbursement privileges;
ii) A demand for restitution to the City;
iii) Reporting the expense to State and Federal tax authorities as income to the Councilmember;
iv) Civil penalties of up to $1,000.00 per day and three times the value of the resources used;
v) Criminal prosecution of misuse of public resources.

B) Violations of this policy are to be addressed by majority vote of the Mayor and Council in public session.
1) COMPLIANCE WITH CITY PROCESSES
A) Requests to expend funds through this policy will be subject to the guidelines and limitations established through the City's internal financial policies and processes.

B) Requests to expend funds through this policy will be processed administratively in accordance with the City's internal financial policies and processes.

C) Requests to expend funds will be reviewed by the City Attorney's Office and City Manager's Office for compliance with the City's internal financial policies and practices. 2) TIMELINE FOR REQUEST FOR PAYMENT/REIMBURSEMENT
A) Councilmembers must submit their request for payment 30 days prior to the expense being incurred. The request should be accompanied with letter or invoice documenting the event.

B) Councilmember must submit their request for reimbursement for expenses within 30 days incurring the expense. The request must be accompanied by an expense report, receipts, and documentation.

C) The 30-day timelines referenced above are based upon when complete documentation is provided.

D) Staff will communicate with the requesting Mayor or Councilmember if there are City of Stockton, CA
§ 5.10.010 § 5.10.020
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment C
§ 5.10.030. Responsibilities.

Mayor and Councilmembers: Compliance with policy; compliance with requirements of internal policies and processes; provide requests and backup documentation to the City Manager's Office.

City Attorney's Office: Review requests for compliance with City policies and processes.

City Manager's Office: Review requests for compliance with City policies and processes; prepare and forward requests for expenditures to the Administrative Services Department.

Administrative Services Department: Process requests for expenditures forwarded from the City Manager's Office.
§ 5.10.040. Relevant authority.

Approved by Motion.
§ 5.10.050. Related administrative directive, city policy, city procedure.

Administrative Directive – Purchasing – Contracts-25, FIN-30; Council Policy – City Council Travel and Expenses – Title 2, Chapter 2.04; Administrative Directive – Travel and Expense Policy – Title 17, Chapter 17.11; Administrative Directive – Vehicles-Privately Owned on City Business – FIN-10. § 5.10.060. Related forms, documents, or links.

Owner's Operator's Mileage Report:
http://cosintranet/Intranet/forms/files/Monthly_Mileage.pdf Owner's Operator's Mileage Report:
http://cosintranet.ci.stockton.ca.us/Intranet/DailyMileageReimb § 5.10.070. Frequently asked questions.

None applicable.
§ 5.10.080. Update history.
09/27/16 - Adopted by Resolution No. 2016-09-27-1204
10/03/17 - Amended by Resolution No. 2017-10-03-1104
anticipated delays in the 30-day timeline due to unusual volume or technical challenges for City staff to complete the request within the standard timeframe.

City of Stockton, CA
§ 5.10.020 § 5.10.080
Downloaded from https://ecode360.com/ST5019 on 2024-08-14 Attachment C
City of Stockton
Legislation Text
File #: 24-0709, Version: 1

CONDUCT A PUBLIC HEARING AND ESTABLISH AN UNDERGROUND UTILITY DISTRICT

ALONG LOWER SACRAMENTO ROAD

RECOMMENDATION
It is recommended that the City Council:

1. Conduct a public hearing to determine whether public necessity, health, safety, or welfare requires the formation of an Underground Utility District along Lower Sacramento Road bound between Pixley Slough and Bear Creek.

2. Adopt a resolution authorizing the establishment of an Underground Utility District along Lower Sacramento Road bound between Pixley Slough and Bear Creek.

3. Authorize the City Manager to approve the filing of Notice of Exemption No. NOE65-23 under the California Environmental Quality Act for the Underground Utility District along Lower Sacramento Road.

4. Authorize the City Clerk to notify all affected utilities and real property owners within the Underground Utility District along Lower Sacramento Road by mail of the adoption of the resolution within 10 days of its adoption.

It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this resolution.

Summary
Pacific Gas & Electric (PG&E) is mandated by the California Public Utilities Commission (CPUC), under Tariff Rule 20, to budget monies for communities to convert overhead facilities to underground.

These undergrounding projects are commonly known as Rule 20A projects. As of March 2024, the City accumulated approximately $4.8 million in PG&E credits that can be used to relocate eligible overhead powerlines and communication utilities underground for eligible priority project(s) in the City of Stockton. PG&E typically takes the lead on Rule 20A projects and uses the credits to fund the design, construction, and administration costs.

The Lower Sacramento Road Widening and Bridge Replacements project is a priority project for Public Works that will require undergrounding of existing electrical and communication utilities. The limit of the project is between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road. The project will generally widen the existing roadway from two to four/six lanes and was included in the 2019-24 Five-Year Capital Improvement Plan (CIP).

City of Stockton Page 1 of 4 Printed on 8/16/2024
powered by Legistar™
File #: 24-0709, Version: 1
The CPUC Rule 20A guidelines require the City to establish an Underground Utility District and to determine the public interest the undergrounding would satisfy. Establishment of a District will enable staff, PG&E, and other utilities to start the process of relocating facilities underground in coordination with the construction of the Lower Sacramento Road Widening and Bridge Replacements project.

On July 9, 2024, by Resolution No. 2024-07-09-1215, Council authorized the City Clerk to notify all affected property owners and respective utilities of the time and place of the hearing. Owners within the proposed district were notified of the August 20, 2024, public hearing, and a notice was published in The Record on August 9, 2024.

DISCUSSION
Background
PG&E is mandated by the CPUC, under Tariff Rule 20A, to budget monies for communities to convert overhead facilities to underground. The CPUC Rule 20A program defines the policies and procedures for conversion for overhead power lines and other equipment to underground facilities where there is a public interest to do so. These undergrounding projects are commonly known as Rule 20A projects. As of March 2024, the City accumulated approximately $4.8 million in PG&E Rule 20A work credits that can be used to relocate eligible overhead powerlines and communication utilities underground within the City. PG&E typically takes the lead on Rule 20A projects and uses the credits to fund the design, construction, and administration costs. The City takes the lead in relocating any street lighting attached to PG&E utility poles that will be undergrounded. Existing funds of $154,314.32 are available in the Measure K and Gas Tax funded Rule 20A Street Lighting Capital Project, Project No. WT15021. Additional funding will be budgeted as part of the City’s FiveYear CIP.

In general, removing utility poles and relocating overhead facilities below ground improves safety and aesthetics of streets, sidewalks, neighborhoods, and civic areas. Potential hazards associated with downed lines or poles being situated close to vehicle travel areas are also eliminated. Rule 20A projects are typically identified by the City, in coordination with PG&E, and other utility providers.

Following this coordination, PG&E will, using available credits, replace its existing overhead electric facilities with underground electric facilities along the public street provided that the governing body of city has:

A. Determined that undergrounding the utilities is in the general public interest for one or more of the following reasons:

1. Undergrounding will avoid or eliminate an unusually heavy concentration of overhead electric facilities.

2. The street is extensively used by the general public and carries a heavy volume of pedestrian or vehicular traffic.

City of Stockton Page 2 of 4 Printed on 8/16/2024
powered by Legistar™
File #: 24-0709, Version: 1

3. The street adjoins or passes through a civic area, recreation area, or an area of unusual scenic interest to the general public.

4. The street is an arterial or major collector road defined in the City’s General Plan.

B. Adopt an ordinance which approves the formation of an underground district where existing utilities will be removed and relocated underground; specifies all property services will be ready to receive underground services; and PG&E can discontinue its overhead service.

On July 17, 1989, by Resolution No. 89-0469, Council adopted policies and procedures for a Master Plan of Underground Utility Districts with first priority given to major street widening and reconstruction projects by the City, and second priority given to areas of civic, scenic, or historic importance (Attachment A).

Staff has reviewed the 50-year Master Plan, together with current and future priority road projects and identified the Lower Sacramento Road Widening and Bridge Replacements project (generally between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road) as a priority project. This project is a key north-south primary arterial that serves as a primary connector to Lodi. San Joaquin County recently completed the widening of the Lower Sacramento Road segment north of Eight Mile Road including the undergrounding of aerial facilities. In addition, the Lower Sacramento Road Corridor is a project listed on the San Joaquin Council of Governments Measure K Strategic Plan. As such, the Lower Sacramento Road Corridor is a high priority for the establishment of an Undergrounding Utility District
Public Works issued a Request for Proposals for professional engineering services to complete a Precise Roadway Plan and to design the Lower Sacramento Road Widening and Bridge Replacements project. The limit of the project is between Royal Oaks Drive and Pixley Slough just north of Eight Mile Road. Design work is expected to start by the end of 2024. The project will generally widen the existing roadway from two to four/six lanes and include the reconstruction of the bridges over Pixley Slough and Bear Creek. The project was included in the 2019-24 Five-Year CIP.

Stockton Municipal Code (SMC) Chapter 13.36 Regulations and Procedures for the Removal of Overhead Utility Facilities and the Installation of Underground Facilities in Underground Utility Districts, establish regulations and procedures for the formation of Underground Utility Districts (Attachment B). In accordance with SMC section 13.36.020, a public hearing is required to determine whether public necessity, health, safety, or welfare requires the undergrounding of overhead facilities.

This also satisfies the CPUC Rule 20 requirement that the local government determines if a proposed Rule 20A project serves the public interest pursuant to a public hearing.

Present Situation
On July 9, 2024, by Resolution No. 2024-07-09-1215, Council authorized the City Clerk to notify all affected property owners and respective utilities of the time and place of the hearing. Owners within the proposed district were notified of tonight’s public hearing by mail based on the last equalized assessment roll.

After the public hearing, staff recommends Council adopt a resolution authorizing the establishment of an Underground Utility District along Lower Sacramento Road bound between Pixley Slough and City of Stockton Page 3 of 4 Printed on 8/16/2024
powered by Legistar™
File #: 24-0709, Version: 1
Bear Creek as shown on Exhibit 1 to the Resolution. This will enable staff, PG&E, and other utilities to start the process of undergrounding facilities in coordination with the construction of the Lower Sacramento Road Widening and Bridge Replacements project. Conversion of the electrical services on private property will be included in the Rule 20A project and undertaken at no cost to the property owners. Subsequent agreements will be required to finalize the details from the coordination with PG&E. Staff anticipates the undergrounding of Lower Sacramento Road to be completed as early as 2027.

The conversion of overhead utility distribution system facilities to underground is in conformance with the City’s General Plan, pursuant to California Government Code, Section 65402, and is categorically exempt from the requirements of California Environmental Quality Act (CEQA) as specified under Section 15302(d) of the CEQA Guidelines. The activities constitute a discretionary project under the City’s jurisdiction and qualify as a project that does not have a significant effect on the environment.

Staff recommends Council adopt a resolution authorizing the filing of Notice of Exemption No.

NOE65-23 under CEQA.

Public Notification
Notice of the Public Hearing was published in The Record on August 9, 2024. The notice is required to be published a minimum of 10 days prior to the public hearing.

FINANCIAL SUMMARY
The recommended actions to establish the district will enable staff, PG&E, and other utilities to coordinate and plan phasing of the conversions. As of March 2024, the City accumulated approximately $4.8 million in the Rule 20A account with the utility companies. Some costs, such as right-of-way acquisition and street light relocation, are not funded by Rule 20A and must be funded by the City. Subsequent coordination with utility companies will provide information needed to assist with an estimate of the cost to the City. Additional funding will be budgeted as part of the City’s FiveYear CIP. Efforts to obtain additional funding through PG&E’s Work Credit Reallocation Plan and grants are ongoing.

There is no additional impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended actions.

Attachment A - Master Plan of Underground Utility District Attachment B - SMC Chapter 13.36, sections 13.36.010 to 13.36.110 City of Stockton Page 4 of 4 Printed on 8/16/2024
powered by Legistar™

ATTACHMENT A

ATTACHMENT A
Stockton Municipal Code, Charter, and Civil Service Rules Up Previous Next Main Collapse Search Print No Frames
Municipal Code Title 13 PUBLIC SERVICES
Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE REMOVAL OF OVERHEAD UTILITY

FACILITIES AND THE INSTALLATION OF UNDERGROUND FACILITIES IN UNDERGROUND UTILITY

DISTRICTS

13.36.010 Definitions.

Whenever in this chapter the words or phrases hereinafter in this section defined are used, they shall have the respective meanings assigned to them in the following definitions:
“Commission” means the Public Utilities Commission of the State of California. “Person” means and include individuals, firms, corporations, partnerships, and their agents and employees. “Poles, overhead wires and associated overhead structures” means poles, towers, supports, wires, conductors, guys, stubs, platforms, crossarms, braces, transformers, insulators, cutouts, switches, communication circuits, appliances, attachments and appurtenances located aboveground within a district and used or useful in supplying electric, communication or similar or associated service. “Underground utility district” or “district” means that area in the City within which poles, overhead wires, and associated overhead structures are prohibited as such area is described in a resolution adopted pursuant to the provisions of Section 13.36.030.
“Utility” means and includes all persons or entities supplying electric, communication or similar or associated service by means of electrical materials or devices. (Prior code § 9-750)

13.36.020 Public hearing by Council.

The Council may from time to time call public hearings to ascertain whether the public necessity, health, safety or welfare requires the removal of poles, overhead wires and associated overhead structures within designated areas of the City and the underground installation of wires and facilities for supplying electric, communication, or similar or associated service. The City Clerk shall notify all affected property owners as shown on the last equalized assessment roll and utilities concerned by mail of the time and place of such hearings at least 10 days prior to the date thereof.

Each such hearing shall be open to the public and may be continued from time to time. At each such hearing all persons interested shall be given an opportunity to be heard. The decision of the Council shall be final and conclusive. (Prior code § 9-751)

13.36.030 Council may designate Underground Utility Districts by resolution.

If, after any such public hearing the Council finds that the public necessity, health, safety or welfare requires such removal and such underground installation within a designated area, the Council shall, by resolution, declare such designated area an Underground Utility District and order such removal and underground installation. Such resolution shall include a description of the area comprising such district and shall fix the time within which such removal and underground installation shall be accomplished and within which affected property owners must be ready to receive underground service. A reasonable time shall be allowed for such removal and underground installation, having due regard for the availability of labor, materials and equipment necessary for such removal and for the installation of such underground facilities, as may be occasioned thereby. (Prior code § 9-752)

13.36.040 Unlawful acts.

Whenever the Council creates an underground utility district and orders the removal of poles, overhead wires Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE RE... http://qcode.us/codes/stockton/view.php?topic=13-13_36&showAll=1&... 1 of 4 5/11/2017 10:39 AM

ATTACHMENT B
and associated overhead structures therein as provided in Section 13.36.030, it is unlawful for any person or utility to erect, construct, place, keep, maintain, continue, employ or operate poles, overhead wires and associated overhead structures in the district after the date when said overhead facilities are required to be removed by such resolution, except as said overhead facilities may be required to furnish service to an owner or occupant of property prior to the performance by such owner or occupant of the underground work necessary for such owner or occupant to continue to receive utility service as provided in Section 13.36.090, and for such reasonable time required to remove said facilities after said work has been performed and except as otherwise provided in this chapter. (Prior code § 9-753)

13.36.050 Exception, emergency or unusual circumstances.

Notwithstanding the provisions of this chapter, overhead facilities may be installed and maintained for a period, not to exceed 10 days, without authority of the City Engineer in order to provide emergency service. The City Engineer may grant special permission, on such terms as the City Engineer may deem appropriate, in cases of unusual circumstances, without discrimination as to any person or utility, to erect, construct, install, maintain, use or operate poles, overhead wires and associated overhead structures. (Prior code § 9-754)

13.36.060 Other exceptions.

This chapter or any resolution adopted pursuant to Section 13.36.030, shall, unless otherwise provided in such resolution, not apply to the following types of facilities:

A. Any municipal facilities or equipment installed under the supervision and to the satisfaction of the City Engineer.

B. Poles, or electroliers used exclusively for street lighting.

C. Overhead wires (exclusive of supporting structures) crossing any portion of a district within which overhead wires have been prohibited, or connecting to buildings on the perimeter of a district, when such wires originate in an area from which poles, overhead wires and associated overhead structures are not prohibited.

D. Poles, overhead wires and associated overhead structures used for the transmission of electric energy at nominal voltages in excess of 34,500 volts.

E. Overhead wires attached to the exterior surface of a building by means of a bracket or other fixture and extending from one location on the building to another location on the same building or to an adjacent building without crossing any public street.

F. Antennae, associated equipment and supporting structures, used by a utility for furnishing communication services.

G. Equipment appurtenant to underground facilities, such as surface mounted transformers, pedestal mounted terminal boxes and meter cabinets, and concealed ducts.

H. Temporary poles, overhead wires and associated overhead structures used or to be used in conjunction with construction projects. (Prior code § 9-755)

13.36.070 Notice to property owners and utility companies.

Within 10 days after the effective date of a resolution adopted pursuant to Section 13.36.030, the City Clerk shall notify all affected utilities and all persons owning real property within the district created by said resolution of the adoption thereof. Said City Clerk shall further notify such affected property owners of the necessity that, if they or any person occupying such property desire to continue to receive electric, communication, or similar or associated service, they or such occupant shall provide all necessary facility changes on their premises so as to receive such service from the lines of the supplying utility or utilities at a new location, subject to the applicable rules, regulations and tariffs of the respective utility or utilities on file with the Commission. Notification by the City Clerk shall be made by mailing a copy of the resolution adopted pursuant to Section 13.36.030, together with a copy of this chapter, Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE RE... http://qcode.us/codes/stockton/view.php?topic=13-13_36&showAll=1&... 2 of 4 5/11/2017 10:39 AM

ATTACHMENT B
to affected property owners as such are shown on the last equalized San Joaquin County assessment roll and to the affected utilities. (Prior code § 9-756)

13.36.080 Responsibility of utility companies.

If underground construction is necessary to provide utility service within a district created by any resolution adopted pursuant to Section 13.36.030, the supplying utility shall furnish that portion of the conduits, conductors and associated equipment required to be furnished by it under its applicable rules, regulations and tariffs on file with the Commission. (Prior code § 9-757)

13.36.090 Responsibility of property owners.

A. Every person owning, operating, leasing, occupying or renting a building or structure within a district shall construct and provide that portion of the service connection on his or her property between the facilities referred to in Section 13.36.080 and the termination facility on or within said building or structure being served, all in accordance with applicable rules, regulations and tariffs of the respective utility or utilities on file with the Commission. If the above is not accomplished by any person within the time provided for in the resolution enacted pursuant to Section 13.36.030, the City Engineer shall give notice in writing to the person in possession of such premises, and a notice in writing to the owner thereof as shown on the last equalized assessment roll, to provide the required underground facilities within 10 days after receipt of such notice.

B. The notice to provide the required underground facilities may be given either by personal service or by mail. In case of service by mail on either of such persons, the notice must be deposited in the United States mail in a sealed envelope with postage prepaid, addressed to the person in possession of such premises at such premises, and the notice must be addressed to the owner thereof as such owner’s name appears, and must be addressed to such owner’s last known address as the same appears on the last equalized assessment roll, and when no address appears, to General Delivery, City of Stockton. If notice is given by mail, such notice shall be deemed to have been received by the person to whom it has been sent within 48 hours after the mailing thereof. If notice is given by mail to either the owner or occupant of such premises, the City Engineer shall, within 48 hours after the mailing thereof, cause a copy thereof, printed on a card not less than eight (8) inches by 10 inches in size, to be posted in a conspicuous place on said premises.

C. The notice given by the City Engineer to provide the required underground facilities shall particularly specify what work is required to be done, and shall state that if said work is not completed within 30 days after receipt of such notice, the City Engineer will provide such required underground facilities, in which case the cost and expense thereof will be assessed against the property benefited and become a lien upon such property.

D. If upon the expiration of the 30-day period, the said required underground facilities have not been provided, the City Engineer shall forthwith proceed to do the work, provided; however, if such premises are unoccupied and no electric or communications services are being furnished thereto, the City Engineer shall in lieu of providing the required underground facilities, have the authority to order the disconnection and removal of any and all overhead service wires and associated facilities supplying utility service to said property. Upon completion of the work by the City Engineer, he or she shall file a written report with the City Council setting forth the fact that the required underground facilities have been provided and the cost thereof, together with a legal description of the property against which such cost is to be assessed. The Council shall thereupon fix a time and place for hearing protests against the assessment of the cost of such work upon such premises, which said time shall not be less than 10 days thereafter.

E. The City Engineer shall forthwith, upon the time for hearing such protests having been fixed, give a notice in writing to the person in possession of such premises, and a notice in writing thereof to the owner thereof, in the manner hereinabove provided for the giving of the notice to provide the required underground facilities, of the time and place that the Council will pass upon such report and will hear protests against such assessment. Such notice shall also set forth the amount of the proposed assessment.

Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE RE... http://qcode.us/codes/stockton/view.php?topic=13-13_36&showAll=1&... 3 of 4 5/11/2017 10:39 AM

ATTACHMENT B
F. Upon the date and hour set for the hearing of protests, the Council shall hear and consider the report and all protests, if there be any, and then proceed to affirm, modify or reject the assessment.

G. If any assessment is not paid within five (5) days after its confirmation by the Council, the amount of the assessment shall become a lien upon the property against which the assessment is made by the City Engineer, and the City Engineer is directed to turn over to the Assessor and Tax Collector a notice of lien on each of said properties on which the assessment has not been paid, and said Assessor and Tax Collector shall add the amount of said assessment to the next regular bill for taxes levied against the premises upon which said assessment was not paid. Said assessment shall be due and payable at the same time as said property taxes are due and payable, and if not paid when due and payable, shall bear interest at the rate of six (6) percent per year. (Prior code § 9-758)

13.36.100 Responsibility of City.

City shall remove at its own expense all City-owned equipment from all poles required to be removed hereunder in ample time to enable the owner or user of such poles to remove the same within the time specified in the resolution enacted pursuant to Section 13.36.030. (Prior code § 9-759)

13.36.110 Extension of time.

In the event that any act required by this chapter or by a resolution adopted pursuant to Section 13.36.030 cannot be performed within the time provided on account of shortage of materials, war, restraint by public authorities, strikes, labor disturbances, civil disobedience, or any other circumstances beyond the control of the actor, then the time within which such act will be accomplished shall be extended for a period equivalent to the time of such limitation. (Prior code § 9-760)
View the mobile version.

Chapter 13.36 REGULATIONS AND PROCEDURES FOR THE RE... http://qcode.us/codes/stockton/view.php?topic=13-13_36&showAll=1&... 4 of 4 5/11/2017 10:39 AM

ATTACHMENT B
Resolution No.

STOCKTON CITY COUNCIL

RESOLUTION AUTHORIZING THE ESTABLISHMENT OF AN UNDERGROUND

UTILITY DISTRICT ALONG LOWER SACRAMENTO ROAD, APPROVING THE NOTICE OF EXEMPTION NO. NOE65-23 UNDER THE CALIFORNIA

ENVIRONMENTAL QUALITY ACT, AND AUTHORIZING THE CITY CLERK TO

NOTIFY ALL AFFECTED UTILITIES AND REAL PROPERTY OWNERS WITHIN THE

LOWER SACRAMENTO ROAD UNDERGROUND UTILITY DISTRICT OF THE

ADOPTION OF THIS RESOLUTION
On July 9, 2024, the City Council of the City of Stockton adopted Resolution No. 2024-07-09-1215 to set a public hearing to determine whether public necessity, health, safety, or welfare requires the formation of an Underground Utility District along Lower Sacramento Road bound between Pixley Slough and Bear Creek; and Notice of the public hearing that was held on August 20, 2024, was duly and regularly published in The Record in the time, form, and manner required by law as evidenced by the declaration on file with the City Clerk; and A Notice was mailed to all affected property owners based on the last equalized assessment roll and to all respective utilities concerned; and At the August 20, 2024, public hearing, the City Council afforded to every interested person an opportunity to make a protest either in writing or orally, and this City Council has considered each protest and all matters and things pertaining to the formation of an Underground Utility District along Lower Sacramento Road bound between Pixley Slough and Bear Creek were fully heard and considered by this Council; and The California Public Utilities Commission (CPUC) has authorized electric and telecommunication utilities to convert overhead utility lines and facilities to underground pursuant to Electric Rule 20 and Telecommunication Rule 32; and Pursuant to certain criteria, CPUC rules allow participating cities and counties to establish legislation authorizing the creation of underground utility districts within which existing overhead electric distribution and telecommunication distribution, and service facilities will be converted to underground; and
The City has adopted an ordinance, codified as Chapter 13.36 Regulations and Procedures for the Removal of Overhead Utility Facilities and the Installation of Underground Facilities in Underground Utility Districts of the Stockton Municipal Code (SMC), authorizing the City Council to designate areas within which all existing overhead poles, overhead wires and overhead equipment associated with the distribution of electric power, telecommunication services and cable television shall be removed and replaced with underground wires and facilities; and
The Director of Public Works for the City has consulted with the affected public utilities and such utilities have agreed that the proposed underground conversion district, as designated in this resolution meets the criteria established by the rules of the CPUC; and
PG&E notified the City each year regarding the allocation of work credits for conversion of overhead electric distribution lines and facilities to underground, known as Rule 20A allocations; and
The City’s Public Works Department consulted with PG&E and determined that the City has accumulated Rule 20A work credits and are sufficient to complete the proposed overhead to underground conversion project; and
Pursuant to SMC 16.72.230, Developers remain to be responsible for the cost of utility undergrounding for their new development adjacent to the project; and The City and the affected utilities have agreed that each utility shall complete the engineering of their respective portion of the Lower Sacramento Road Underground Utility District Conversion Project; and
The City and the affected utilities have agreed that PG&E shall be responsible for preparation of the trench profile and composite drawings and that PG&E shall be designated as “trench lead” to manage trenching, installation of substructures, and pavement restoration and such other work; and
The City and the affected utilities have agreed on a work schedule which meets their respective capabilities and have further agreed to waive any administrative fees, costs or special street restoration requirements for purposes of this project; and The City has received a Public Works Department recommendation that such Lower Sacramento Road Underground Utility District be formed between Pixley Slough and Bear Creek, and encompass 100 feet on either side of the centerline of Lower Sacramento Road, as identified by Exhibit 1 to this resolution be designated an underground utility district within which all existing overhead poles, overhead wires and overhead equipment associated with the distribution of electric power, telecommunication services and cable television shall be removed and replaced with underground wires and facilities; and
The City as Lead Agency under the California Environmental Quality Act (CEQA) has determined the proposed Lower Sacramento Road Underground Utility District is categorically exempt, under section 15302(d), from environmental review pursuant to the CEQA; now, therefore,

BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF STOCKTON, AS FOLLOWS:

1. Pursuant to SMC Chapter 13.36 Regulations and Procedures for the Removal of Overhead Utility Facilities and the Installation of Underground Facilities in Underground Utility Districts, the public interest requires the removal of all existing utility poles [excepting those poles supporting streetlights or traffic signals], overhead wires and associated overhead structures and installation of underground wires and facilities for supplying electric power, communication, or similar associated services within the areas as shown in Exhibit 1, which is attached and incorporated by this reference, with such area being designated as the Lower Sacramento Road Underground Utility District of the City of Stockton.

2. The Lower Sacramento Road Underground Utility District, is shown upon that certain map entitled “Lower Sacramento Road Underground Utility District” and meets the criteria established by the rules of the CPUC, as particularly described in Exhibit 1 which is attached and incorporated by this reference including:
a. The street or road or right-of-way is considered an arterial street or major collector as defined in the Governor’s Office of Planning and Research General Plan Guidelines.

3. The City Council approves and does hereby fix July 1, 2025, as the dates on which affected property owners must be ready to receive underground service and does hereby order the removal of all poles, overhead wires and associated overhead structures and the underground installation of wires and facilities for supplying electric, communication, or similar or associated service along Lower Sacramento Road within Lower Sacramento Road Underground Utility District on or before July 1, 2030.

4. The City Clerk is hereby authorized and instructed to notify all affected utilities and persons owning real property within Lower Sacramento Road Underground Utility District of the adoption of this resolution within ten (10) days after the date of such adoption. Said City Clerk shall further notify said property owners of the necessity that if they or any person occupying such property desire to continue to receive electric, communication, or other similar or associated service, they or such occupant shall, by the date fixed in this resolution, permit PG&E and their subcontractors to provide all necessary facility changes on the premises so as to receive such service from the lines of the supplying utility or utilities at a new location, subject to applicable rules, regulations, and tariffs of the respective utility or utilities on file with the CPUC. Such notification shall be made by mailing a copy of this resolution together with a copy of said Chapter 13.36 of the SMC to all affected property owners as such are shown on the last equalized assessment roll and to the affected utilities.

5. The utility companies, cable television services and other affected services shall commence work on installation of underground facility installation in Lower Sacramento Road Underground Utility District and that as each phase of the project is complete and ready for conversion from overhead to underground utility facilities, all fronting property owners shall be notified by first class letter, postage pre-paid, of the schedule for conversion of all utility service lines.

6. The electric utility shall use the underground conversion allocation computed pursuant to decisions of the CPUC for the purpose of providing to each premises requiring it in the Lower Sacramento Road Underground Utility District a maximum of one hundred feet of individual electric service trenching and conductor (as well as backfill, paving and conduit, if required) and each other serving utility shall provide serving utility shall provide service trenching and conductor in accordance with its rules and tariffs on file with the CPUC or as required by its Franchise Agreement with the City of Stockton.

7. City of Stockton selects the option that the entire cost to adapt the electric panels to receive underground service will be covered by the community’s Rule 20A allocation. However, the cost to bring any non-code compliant electrical panel to code will be borne by the respective property owner. PG&E is responsible for making all necessary modifications to property owner’s electric panels to enable them to receive underground service. The City is responsible for obtaining a signed right-of-entry for each property to enable PG&E’s contractor to complete the panel modifications.

8. Upon notification as specified in Section 4, all property owners in Lower Sacramento Road Underground Utility District shall have underground electrical entrance facilities installed and inspected pursuant to Building Codes within sixty (60) days and that should any property fail to install satisfactory underground electrical entrance facilities by the date specified in the notice, electric utility shall notify the Director of Public Works who shall, within thirty (30) days direct the electric utility in writing to discontinue electrical service to the property, without recourse, pursuant to Rule 11 until electrical entrance facilities are ready to accept underground electrical conductors and have passed the necessary inspection requirements.

9. Once all services have been converted from overhead to underground, the utility companies, cable television services and other affected services shall remove all poles (except as specified above) and associated overhead facilities in Lower Sacramento Road Underground Utility District no later than three (3) months after completion of all conversions within each phase.

10. The City Manager is authorized to approve the filing of Notice of Exemption No. NOE65-23 under CEQA for the Lower Sacramento Road Underground Utility District, a copy of which is attached as Exhibit 2 and incorporated by this reference.

11. The City Manager is hereby authorized to take whatever actions are necessary and appropriate to carry out the purpose and intent of this Resolution.

PASSED, APPROVED, and ADOPTED August 20, 2024 .

ATTEST: KEVIN J. LINCOLN II
Mayor of the City of Stockton

KATHERINE ROLAND, CMC, CPMC
Interim City Clerk of the City of Stockton
EXHIBIT 1

Public Hearing to Establish an
Underground Utility District on
Lower Sacramento Road
Council Meeting Date: August 20, 2024
Council Agenda Item 16.1
PG&E Rule 20A Program
In 1967, the California
Public Utility
Commission (CPUC)
created the Rule 20A
Tariff Program
Rule 20A Program
established a funding
mechanism to move
overhead electric and
telecommunication lines
underground
PG&E allocates a
portion of rates to
Rule 20A Program by
jurisdiction via Work
Credits
In 2017, the City
successfully completed the
Downtown Overhead
Facilities Underground
Project utilizing approx.
$10.5 million Work Credits
Current PG&E
allocation for
Stockton is approx.
$4.8 million
Formation of an
Underground Utility
District (UUD) is required
to utilize Rule 20A funds
Per SMC 13.36.020, a
Public Hearing and
Resolution are required
when forming the UUD
Lower Sacramento Road UUD
Local Agency in consultation with utilities must determine the UUD serves the “general public interest” in one or more of the following criteria:

A. Eliminates unusually heavy concentration of overhead lines B. Involves a street with high volume of public traffic C. Benefits a civic/public recreation area or area of unusual scenic interest
D. Involves a street that qualifies as an arterial or major collector Staff recommends forming the Lower Sacramento Road UUD which meets criteria B and D of the program.

Lower Sacramento Road UUD
Next Steps
• PG&E will serve as the lead agency
• Undergrounding within the UUD will be phased based on priorities and funding
• Anticipated completion by 2028 or 2029
• The Lower Sacramento Road Widening and Bridge
Replacements Project can begin construction while
undergrounding is underway
Recommendations:
• At the conclusion of the Public Hearing, adopt a Resolution establishing a Lower Sacramento Road UUD bound by Pixley Slough and Bear Creek.
• Approve the Notice of Exemption No. CE065-23 under the California Environmental Quality Act for the UUD.
• Authorize the City Clerk to notify all affected utility and real property owners within the District by mail of the adoption of the Resolution within ten (10) days of its adoption.

Questions?
City of Stockton
Legislation Text
File #: 24-0850, Version: 1

COUNCIL COMMITTEE/BOARD AND COMMISSION MINUTES

RECOMMENDATION
Information item only. No action required.

City of Stockton Page 1 of 1 Printed on 8/16/2024
powered by Legistar™

MINUTES

WATER ADVISORY GROUP
MEETING OF OCTOBER 4, 2023
Council Chamber - City Hall, 425 N. El Dorado Street, Stockton, California

1. CALL TO ORDER/ROLL CALL - 3:31 PM
Roll Call

Present:

Jill Stevenson
Kevin Kauffman
Jamie Guerrero
Jeff Sanguinetti

Absent:

Daniel Nuss.

2. PLEDGE TO THE FLAG
The Pledge of Allegiance was led by Chair Kauffman

3. PUBLIC COMMENT
None
Council CorresP.ondence - Public Comments

4. NEW BUSINESS
None

5. UNFINISHED BUSINESS
None

6. REPORTS/WRITTEN COMMUNICATIONS/ INFORMATIONAL ITEMS

6.1 23-0913 GROUNDWATER RECHARGE PROJECT
Informational Item only. No action taken.

Legislation Text
PowerPoint Presentation

6.2 23-0914 WATER METERS, METER READING EQUIPMENT, AND SOFTWARE Informational Item only. No action taken.

Legislation Text

City Council and Concurrent AuthoritiesAugust 20, 2024

City Council and Concurrent Authorities
August 20, 2024