Agenda packet — Tulare City Council, February 4, 2025

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City of Tulare
City Council
Meeting Agenda
Tulare Public Library & Council Chamber Tuesday, February 4, 2025 491 North M Street, Tulare CA 93274 6:00 p.m. Special Meeting www.tulare.ca.gov 7:00 p.m. Regular Meeting
Mission Statement
To promote a quality of life making Tulare the most desirable community in which to live, learn, play, work, worship and prosper.

Regular City Council meetings are held on the first and third Tuesdays of the month in the Council Chamber located in the Tulare Public Library at 491 North M Street, Tulare, subject to cancellation.

Additional meetings of the City Council may be called as needed.

Members of the public may attend meetings in person or access the meeting live via YouTube. For those that wish to provide public comment while not physically in attendance, you may call (559) 366-1849 during Public Comment. Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting.

Members of the public may address the City Council on matters within the jurisdiction of the City of Tulare.

A person desiring to address the City Council is encouraged to complete a public comment card and provide to the city clerk prior to the start of the meeting. Comments are limited to three minutes per speaker unless extended by the Council. Depending upon the extent of the agenda and number of persons desiring to speak on an issue, the mayor may, at the beginning of the item, limit the time for individual comments. When invited by the mayor to speak, please approach the lectern and begin your comments by stating your name and city of residence.
• All remarks shall be addressed to the Council as a body and not to any member thereof. • No person, other than the City Council and person having the floor, shall be permitted to enter into any discussion, either directly or through a member of the City Council, without the permission of the mayor.
• No question shall be asked of a councilmember or a member of City staff except through the mayor.
• Questions and comments from the public shall be limited to the subject under consideration, except for those items introduced under Public Comment. • No person shall engage in disorderly or boisterous conduct which disturb, disrupt, impede, or otherwise render the orderly conduct of the meeting infeasible. Persons engaging in such conduct may be subject to ejection of the meeting pursuant to Government Code Sections 54954.3 and 54957.95.

Pursuant to the Americans with Disabilities Act, persons with a disability who require a disability-related modification or accommodation in order to participate in a meeting, including auxiliary aids or services, may request such modification from the City Clerk’s Office at (559) 684-4200. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to the meeting.

City of Tulare YouTube Channel: https://www.youtube.com/@cityoftulare3805 Documents related to items on the agenda are accessible on the City’s website at www.tulare.ca.gov. Copies are also available for public inspection at the City Clerk’s Office located at City Hall, 411 E. Kern Avenue, Second Floor, during normal business hours.

Councilmembers
Patrick Isherwood, Mayor
Steve Harrell, Vice Mayor
Jose Sigala
Terry A. Sayre
Dennis A. Mederos
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NOTICE IS HEREBY GIVEN that a special meeting of the City Council of the City of Tulare is hereby called pursuant to section 54956 of the California Government Code.

1. CALL TO ORDER

2. PUBLIC COMMENT PERTAINING TO CLOSED SESSION ITEMS - Comments are limited to items to be discussed in closed session. Speaker will be allowed three minutes each per item. For those that wish to provide public comment while not physically in attendance, you may call (559) 366-1849. Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting.

3. RECESS TO CLOSED SESSION TO DISCUSS THE FOLLOWING

3.1 Conference with Legal Counsel - Existing Litigation (Gov. Code § 54956.9) Name of Case: VCU297860 Jathan Quiroz, a minor, by and through his Guardian ad Litem Javier Quiroz v. City of Tulare

3.2 Conference with Legal Counsel - Existing Litigation (Gov. Code § 54956.9) Name of Case: VCU317258 People of the State of California, Ex Rel. Rob Bonta, Attorney General of the State of California v. City of Tulare

3.3 Conference with Legal Counsel - Existing Litigation (Gov. Code § 54956.9) Name of Case: VCU317197 Laborers International Union of North America, Local Union 294, an organized labor union v. City of Tulare

4. RECONVENE FROM CLOSED SESSION

5. CLOSED SESSION REPORT - This is the time for Council to publicly report specified closed session action and the vote taken on those actions, if any.

6. ADJOURNMENT
7:00 p.m. Regular Meeting

7. CALL TO ORDER

8. PLEDGE OF ALLEGIANCE AND INVOCATION - Susan Henard, Senior Pastor of River Valley Church, to deliver an invocation.

9. PROCLAMATIONS & RECOGNITIONS

9.1 Proclamation for Black History Month.

10. PUBLIC COMMENT - Members of the public wishing to comment on any item not appearing on the agenda may address the City Council at this time. State law prevents Council from acting on any matter not on the agenda; however, your comments may be referred to staff for follow up. This is also the time for the public to comment on items listed under the Consent Calendar or to request an item from the Consent Calendar be pulled for discussion purposes. Comments related to Public Hearing and General Business items will be heard at the time those items are discussed. In fairness to all who wish to speak, public comment is limited to a total of fifteen minutes with each speaker allowed three minutes, unless otherwise extended by Council. Please begin your comments by stating your name and providing your city of residence. For those that wish to provide public comment while viewing the meeting online, you 6:00 p.m. Special Meeting
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may call (559) 366-1849. Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting.

11. COMMUNICATIONS - Communications are to be submitted to the City Manager’s Office ten days prior to a Council meeting to be considered for this section of the agenda. No action will be taken on matters listed under Communications; however, the Council may direct staff to schedule issues raised during Communications for a future meeting.

12. COUNCIL REPORTS AND ITEMS OF INTEREST

13. CONSENT CALENDAR - All matters listed under the Consent Calendar are considered by the Council to be routine and will be enacted in one motion without discussion. If discussion is desired, that item may be removed and considered separately.

13.1 Waive the reading of ordinances and approve reading by title only.

Recommended Action: Approve the reading by title only of all ordinances and that further reading of such ordinances by waived.

13.2 Approval of City Council Meeting Minutes.

Recommended Action: Approve the minutes of the special and/or regular meeting of January 21, 2025. [M. Hermann]

13.3 Local Agency Investment Fund Authorization.

13.4 Personal Protective Equipment (PPE) Cleaning Facility.

Recommended Action: Authorize the establishment of an Other General Fund CIP Fund appropriation of up to $100,000 and a transfer from the General Fund to the Other General Fund CIP Fund in the same amount, using unassigned General Fund fund balance for building modifications to create a Personal Protective Equipment (PPE) Cleaning Facility at Fire Station

61. [M. Ott]

13.5 Purchase of 2025 Ford Police Interceptors.

13.6 City Council Travel Expense and Community Improvement Budget Policy.

Recommended Action: Adopt a resolution establishing guidelines for use of City Council Travel Budget and Community Improvement Budget. [M. Hermann]

14. PUBLIC HEARING - Comments related to Public Hearing items are limited to three minutes per speaker, for a maximum of thirty minutes per item, unless otherwise extended by Council. For those that wish to provide public comment while viewing the meeting online, you may call (559) 366-1849.

Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting.

14.1 Farmland Mitigation Ordinance Revisions.

Recommended Action: Adopt Zone Amendment No. 757 approving revisions to the City of Tulare’s Farmland Mitigation Ordinance (Chapter 10.222 of the City of Tulare Municipal Code). [M. Anaya]
Environmental: The proposed Zoning Ordinance Amendment is exempt from Environmental Review under the California Environmental Quality Act (CEQA), pursuant to Section Agenda Packet for February 4, 2025 Page 3
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15061(B)(3). The purpose of the ordinance is to mitigate impacts to farmland. The proposed revisions would still require this mitigation but shifts more responsibility for it to the city by collecting in-lieu fees for more projects.

15. GENERAL BUSINESS - Comments related to General Business items are limited to three minutes per speaker, for a maximum of thirty minutes per item, unless otherwise extended by Council. For those that wish to provide public comment while viewing the meeting online, you may call (559) 366-1849.

Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting.

15.1 Update on Mooney Boulevard and Cross Avenue Intersection.

Recommended Action: Receive an update regarding the Mooney Boulevard and Cross Avenue intersection. [M. Miller]

15.2 Temporary Encampment Facility Operational Plan and Related Costs.

15.3 City of Tulare Budget Policies & Practices Amendment.

Recommended Action: Adopt a resolution approving the proposed amendment to the City of Tulare Budget Policies & Practices “Long-Term Financial Planning” section, which includes: 1) consolidating the General Fund Reserve Account policy and General Fund Contingency Reserve into a single reserve; 2) setting a target range for the consolidated reserve of between seventeen and thirty-three percent of a single fiscal year’s budgeted General Fund operating expenditures; 3) establishing a replenishment schedule for the Reserve for if it falls below its minimum target level; and 4) designating $15.3 million of current General Fund unassigned fund balance, which is equal to approximately twenty-five percent of fiscal year 2025 General Fund operating expenditures, as the General Fund Contingency Reserve, to classify it as committed fund balance as defined by the Governmental Accounting Standards Board in its Statement Number 54 (GASB 54). [M. Roberts]

15.4 City of Tulare Investment Policy Amendment.

Recommended Action: Approve the proposed amendment to the City of Tulare Statement of Investment Policy. [M. Roberts]

16. FUTURE AGENDA ITEMS

16.1 Initiation of Collaborative Process to Consider Roundabout at Cartmill & West.

Recommended Action: Direct staff to add to a future agenda or take no action.

Submitted by: Councilmember Mederos

17. STAFF UPDATES

18. ADJOURNMENT
The next regularly scheduled meeting of the Tulare City Council is Tuesday, February 18, 2025, at 7:00 p.m. in the Council Chamber, 491 North M Street, Tulare.

AFFIDAVIT OF POSTING AGENDA
I hereby certify, in conformance with Government Code Sections 54954.2 and 54956, this agenda was posted in the kiosk at the front of City Hall, 411 E. Kern Avenue, as well as on the City of Tulare’s website (www.tulare.ca.gov).

POSTED: Friday, January 31, 2025 Melissa Hermann, Chief Deputy City Clerk Agenda Packet for February 4, 2025 Page 4

OFFICE OF THE CITY MANAGER
To: Mayor and City Council Members
From: Marc Mondell, City Manager
Subject: February 4, 2025 Agenda Memo
Date: January 31, 2025
Time estimates are provided as part of the Council’s effort to manage its time at Council meetings. Listed times are estimates only and are subject to change at any time, including while the meeting is in progress.

The Council, by consensus, reserves the right to use more or less time on any item, to change the order of items, and/or to continue items to another meeting. Items may be heard before or after the time estimated on the agenda. This may occur to best manage the time at a meeting or to adapt to the participation of the public.
6:00 p.m. Special Meeting

1. CALL TO ORDER

3. RECESS TO CLOSED SESSION TO DISCUSS THE FOLLOWING

3.1 Conference with Legal Counsel - Existing Litigation (Gov. Code § 54956.9) Name of Case: VCU297860 Jathan Quiroz, a minor, by and through his Guardian ad Litem Javier Quiroz v. City of Tulare

4. RECONVENE FROM CLOSED SESSION

5. CLOSED SESSION REPORT - This is the time for Council to publicly report specified closed session action and the vote taken on those actions, if any.

6. ADJOURNMENT
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7:00 p.m. Regular Meeting

7. CALL TO ORDER

8. PLEDGE OF ALLEGIANCE AND INVOCATION - Susan Henard, Senior Pastor of River Valley Church, to deliver an invocation.

9. PROCLAMATIONS & RECOGNITIONS [Time Estimate: 7:05 p.m.]

9.1 Proclamation for Black History Month.

10. PUBLIC COMMENT - Members of the public wishing to comment on any item not appearing on the agenda may address the City Council at this time. State law prevents Council from acting on any matter not on the agenda; however, your comments may be referred to staff for follow up. This is also the time for the public to comment on items listed under the Consent Calendar or to request an item from the Consent Calendar be pulled for discussion purposes. Comments related to Public Hearing and General Business items will be heard at the time those items are discussed. In fairness to all who wish to speak, public comment is limited to a total of fifteen minutes with each speaker allowed three minutes, unless otherwise extended by Council. Please begin your comments by stating your name and providing your city of residence. For those that wish to provide public comment while viewing the meeting online, you may call (559) 366-1849. Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting. [Time Estimate: 7:10 p.m.]

12. COUNCIL REPORTS AND ITEMS OF INTEREST [Time Estimate: 7:25 p.m.]

13.1 Waive the reading of ordinances and approve reading by title only.

Recommended Action: Approve the reading by title only of all ordinances and that further reading of such ordinances be waived.

13.2 Approval of City Council Meeting Minutes.

Recommended Action: Approve the minutes of the special and/or regular meeting of January 21, 2025. [M. Hermann]

13.3 Local Agency Investment Fund Authorization.

Recommended Action: Adopt a resolution authorizing certain City of Tulare officials to direct Local Agency Investment Fund (LAIF) transactions and to execute and deliver LAIF documents and rescinding Resolution 15-07. [M. Roberts]
Summary: A portion of the City’s investments are held in LAIF. The City must designate, by resolution, the titles of its officers who are authorized to direct transactions in LAIF and execute and deliver documents necessary for administration of the City’s LAIF account(s). Currently, the City Manager, Assistant City Manager, and Chief Financial Officer (Director of Finance/Treasurer) are listed as the authorized officers.

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In addition to specifying the titles of the officers authorized to direct transactions and execute and deliver documents, the City must provide LAIF with the names of the officers holding the titles. With the upcoming vacancy in the Assistant City Manager position due to Josh McDonnell’s retirement, it is necessary to remove Mr. McDonnell from the list of authorized persons. To ensure continuity of the City’s ability to expeditiously direct transactions and execute and deliver important LAIF documents, a sufficient number of officers must be authorized to perform these actions in the absence of one or more of the other authorized officers.

This item requests approval of the officers holding the titles below as those authorized to direct LAIF transactions and to execute and deliver LAIF documents.

Fiscal Impact & Funding Source(s): There is no fiscal impact associated with this action.

Legal Review: This item does not require legal review.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

13.4 Personal Protective Equipment (PPE) Cleaning Facility.

61. [M. Ott]
Summary: Over the past few years, the California Division of Occupational Safety and Health (Cal/OSHA) has successfully amended Title 8 Regulation, section 3402.3; Selection, Inspection, and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting to provide a higher level of safety and protection for firefighters (FF) and the PPE they utilize in emergency response. This requirement changes how the fire service cleans and inspects the FF PPE in the state of California. Cal/OSHA has formally adopted the National Fire Protection Association (NFPA) 1851, Standard on Selection, Care, and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting, 2014 Edition as the authoritative standard on PPE selection, inspection, and maintenance.

Currently, TFD has an Independent Service Provider (ISP) who is able to inspect, clean, and repair PPE in a manner that meets the requirements of Cal/OSHA and NFPA 1851. TFD has been using this provider for a handful of years. TFD has been meeting the minimum NFPA requirement for PPE advance cleaning and inspection of the coats and pants at least one time a year with our ISP at a cost of approximately $11K annually. With the 12 new SAFER FFs, this will increase to $13K annually. If we factor in the other PPE items, helmet, hoods, boots, and gloves with the 12 SAFER FFs, that cost increases to $25K annually.

The adoption of the NFPA by Cal/OSHA requires a more robust cleaning schedule with more frequent cleanings based on hazardous engagements. TFD currently has a PPE extractor (industrial washer) which can wash some of the PPE, but it provides limited capacity to clean an entire shift’s FF gear in a timely manner that technically does not meet the requirements of NFPA 1851. Additionally, TFD does not have the other necessary equipment to properly clean and decontaminate boots, helmets, gloves, hoods, and self-contained breathing apparatus (SCBAs) equipment.

Furthermore, the second identifiable problem with the new Cal/OSHA & NFPA requirement that directly affects TFD is that the department shall advance clean and inspect all PPE after it is Agenda Packet for February 4, 2025 Page 7
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exposed to a hazardous situation or elements or products of combustion. Based on calendar year 2023 call data, if we look at all fires, focusing house, sheds, cars, trash, dumpsters, and homeless materials, TFD engaged in a total of 216 fires. Each fire is mitigated with a different number of FF’s. For example, a structure fire will have 11 FF’s, whereas a dumpster might only have 2 FFs. With 216 fires utilizing 2-11 FFs, coupled with the PPE that would need to be shipped and cleaned following Cal/OSH & NFPA requirements, our estimated cost would reach $246K annually.

TFD would like to construct a proper PPE cleaning facility and purchase the associated equipment to do our own in-house advance cleaning and inspection. The NFPA allows for fire departments to conduct the advance cleaning and inspection, with the proper equipment, training, and certification. Presently, TFD has two members who have been trained and certified by our PPE manufacturer on the advance cleaning and inspection of PPE. All TFD lacks is the facility and equipment to conduct such a program.

TFD and Facilities Maintenance followed the city’s purchasing policy and requested three quotes from vendors who can conduct this required construction. Bid where reviewed and vendors are listed below.

Supreme Construction, Inc. of Tulare, Ca has provided a bid to enclose an area at Fire Station 61 that is currently used to house fire apparatus, and construct two exterior walls with personnel access doors at a cost of $24,745.00.

Flash Plumbing, of Fresno, Ca. has provided a bid to construct all necessary plumbing improvements to ensure that the PPE extractors (washers) are supplied with adequate water that meets temperature requirements, and to construct a sewer connection for the discharge of wastewater, at a cost of $23,855.00.

The City of Tulare Facilities Maintenance Division will install electrical, HVAC, flooring, and other ancillary details and finishing at a cost of $12,000.00.

Additional funding in the amount of approximately $40,000.00 will be utilized to procure proper NFPA certified extractors, appliances, work benches, advance inspection equipment, pressure testing devices, and PPE drying equipment from several vendors. The equipment costs are within the amount that the Fire Chief is authorized to execute in accordance with the City of Tulare’s purchasing policy.

The complete cost for this project will pay for itself within the first 6 months of operation, as TFD will no long need to send PPE to outside contractors for advance cleaning and inspection.

Furthermore, improving TFD’s ability to ensure that firefighters are equipped with properly cleaned gear will provide invaluable long-term impacts for their health and safety.

Fiscal Impact & Funding Source(s): The transfer of from General Fund to the Other General CIP Fund requires the use of unassigned fund balance of $100,000.

Legal Review: This item does not require legal review.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

13.5 Purchase of 2025 Ford Police Interceptors.

Recommended Action: Award the purchase of 11 new/unused 2025 Ford Police Interceptor Utility (K8A) AWD vehicles to National Auto Fleet Group of Watsonville, CA using Sourcewell Contract No. 091521-NAF in the amount of $597,061.85. [T. Whitfield] Agenda Packet for February 4, 2025 Page 8
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Summary: The City is a member of Sourcewell, which is a national public service agency that provides for cooperative purchasing for government agencies. Through the Sourcewell Contract No. 091521-NAF, staff is requesting authorization to purchase 11 new/unused 2025 Ford Police Interceptor Utility vehicles from National Auto Fleet Group, of Watsonville, CA in the amount of $597,061.85.

There are adequate funds in the budget to cover this purchase. Staff does not anticipate receiving these units at a minimum of 6 months from now. With the long lead time to obtain vehicles once ordered, staff is requesting to order these units now while the window to place orders is open.

The Sourcewell purchasing contract is available to agencies nationwide and is therefore very competitive and very limited. Due to time constraints to issue a purchase order to secure vehicle orders, the City Manager approved the issuance of a purchase order to secure the build of the vehicles. If the City Council does not approve this item, the build will be cancelled, and we will have to wait for availability of the 2026 model year Police Utility Interceptors.

Fiscal Impact & Funding Source(s): The cost for each unit is $54,278.35 with a total cost of $597,061.85. The remaining funds for each vehicle will be used to fully outfit the units for service. This appropriation requires the use of Fund 604 – Equipment Replacement Fund - unassigned fund balance in the amount of $880,000. These vehicles and the requested appropriation will satisfy the FY 2025/26 budget request for PD Interceptor replacement and new units.

Legal Review: This item does not require legal review.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table. If this request is denied, staff will cancel the order of the 11 2025 Ford Police Inceptor Utility vehicles.

13.6 City Council Travel Expense and Community Improvement Budget Policy.

Recommended Action: Adopt a resolution establishing guidelines for use of City Council Travel Budget and Community Improvement Budget. [M. Hermann] Summary: In 2016, the City Council adopted Resolution 16-21 which established guidelines for councilmembers to attend conferences, meetings, seminars, and events that serve a demonstrable public purpose and necessity and charging expenses. This policy was amended in 2018 by adoption of Resolution 18-02 which increased the amount for councilmembers to use on travel expenses as well as authorizing the use of unexpended funds for discretionary purposes, considered on a case-by-case basis.

Since the established and amended guidelines, the Council established a separate Community Improvement budget for each councilmember to expend for discretionary purposes. Staff has included guidance in the proposed policy to address Council’s Community Improvement budget (Section XV) to help guide Council in appropriate uses for these funds. The policy provides that Council shall coordinate all requests for use of their Community Improvement funds with the City Manager’s Office. It also states that each use does not require Council approval; however, Agenda Packet for February 4, 2025 Page 9
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a report will be provided no less than once per year showing the current balance and use of each councilmember’s budget.

The proposed policy also provides guidance in regard to travel for councilmembers in their official capacity when representing the City of Tulare. Notable changes include the following:
• Removal of the mention of account numbers and budgeted amounts as the account numbers will be changing when the new financial system come online and reference to these numbers is not necessary. Budgeted amounts may change from year to year as the Council sets these amounts during the budget process.
• The previous policy stated that future travel will be placed on an agenda for Council to consider and approve at a public meeting. This has not been the practice for many years, so the proposed policy no longer requires the approval of Council prior to councilmembers attending conferences, seminars, etc.
• The previous policy limited each councilmember to attend only two fundraising events each year. The proposed policy removes this restriction. • The proposed policy includes a provision for violations of the policy.

In addition to the proposed policy, councilmembers shall comply with Administrative Policy CM16 Travel Policy, except where superseded by the proposed policy. Any expenditures that are not described in these policies or the Internal Revenue Service reimbursable rates, must be approved by the City Council at a public City Council meeting before the expense is incurred (Government Code § 53232.3(f)).

Fiscal Impact & Funding Source(s): There is no fiscal impact associated with this action.

Legal Review: The policy was reviewed by the City Attorney’ Office.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting. [Time Estimate: 7:40 p.m.]

14.1 Farmland Mitigation Ordinance Revisions.

Recommended Action: Adopt Zone Amendment No. 757 approving revisions to the City of Tulare’s Farmland Mitigation Ordinance (Chapter 10.222 of the City of Tulare Municipal Code). [M. Anaya]
Summary: In 2020, the City of Tulare adopted a farmland mitigation ordinance that requires mitigation when agricultural land outside the city limits and within the Tulare Urban Development Boundary is converted to non-agricultural use. The City’s current farmland mitigation ordinance provides that payment of an in-lieu fee is allowed as an alternative to the acquisition of mitigation land for conversion of parcels smaller than 20 acres, when direct acquisition of mitigation land is not feasible.

Since the farmland mitigation ordinance was adopted in 2020, the City has found that some applicants seeking approval to convert and develop ag land for urban uses have had difficulty finding landowners willing to sell conservation easements on land that meets the requirements of the ordinance, in addition to uncertainties related to cost and time required to record the required conservation easements. For that reason, the city wants to revise its farmland Agenda Packet for February 4, 2025 Page 10
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mitigation program to provide more options for applicants. One of those, is to extend the in-lieu fee option to parcels larger than 20 acres. The proposed amendments to Chapter 10.222 of the City of Tulare Municipal Code would allow this option, in addition to revisions to improve clarity and implementation of the ordinance.

Included with this staff report is a report by NBS affirming the establishment of an in-lieu fee for farmland mitigation purposes, as well as potential ways the city would use the funds collected to place conservation easements on farmland the city owns and would not need for other future needs, or to acquire additional farmland to establish conservation easements.

Planning Commission Recommendation
On January 13, 2025, the Planning Commission voted 5-0 to recommend that the City Council adopt Zone Amendment No. 757 approving revisions to the City of Tulare’s Farmland Mitigation Ordinance (Chapter 10.222 of the City of Tulare Municipal Code).

Fiscal Impact & Funding Source(s): Anticipated revenue from the collection of the in-lieu fee for farmland mitigation, currently proposed at $6,900 per acre, which would be used to pay for the establishment of farmland conservation easements on city-owned property and acquire new farmland, along with paying for land trusts or city staff to set-up, monitor, and report on the established easements. An account would have to be established to track the flow of revenue and expenditures for this program.

Legal Review: The proposed ordinance revisions have been reviewed by the City Attorney.

Environmental: The proposed Zoning Ordinance Amendment is exempt from Environmental Review under the California Environmental Quality Act (CEQA), pursuant to Section 15061(B)(3). The purpose of the ordinance is to mitigate impacts to farmland. The proposed revisions would still require this mitigation but shifts more responsibility for it to the city by collecting in-lieu fees for more projects.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table. If denied or tabled, it will affect the City’s ability to address the concerns raised by some applicants, and as directed by the City Manager, to make modifications to this Municipal Code chapter that would increase flexibility for applicants while still allowing the City to comply with farmland conservation goals and farmland conversion mitigation requirements.

Please note that there will be approximately a 20-second delay in broadcast for viewers. When calling in, mute the device used for viewing the meeting. [Time Estimate: 8:00 p.m.]

15.1 Update on Mooney Boulevard and Cross Avenue Intersection.

Recommended Action: Receive an update regarding the Mooney Boulevard and Cross Avenue intersection. [M. Miller]
Summary: Staff will provide a verbal update on this topic. There is not a staff report associated with this item.

Fiscal Impact & Funding Source(s): There is no fiscal impact associated with this action.

Legal Review: This item does not require legal review.

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Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

15.2 Temporary Encampment Facility Operational Plan and Related Costs.

Recommended Action: Approve a new twelve-month operational plan and budget for the Temporary Encampment Facility; and authorize the City Manager and/or his designee(s) to establish the necessary contracts and/or grant agreements to fulfill the operational plan and related budget expectations where feasible. [M. Mondell] Summary: The temporary encampment facility may continue to serve as a primary point of access to basic amenities and services for unhoused people from the City. Though after two years of operation, it is recommended that the City Council consider a range of operation plans and adjust the service levels and corresponding local financial commitments to sustain this facility through at least December 2025. As such, the temporary encampment facility may continue to afford benefits for unhoused people and the overall community until a point at which the future emergency shelter is able to function at or near full capacity.

Background – Current Operations and Expenses
The City’s temporary encampment facility began operation in February 2022. Over the two years of operation the number of unhoused people residing at the facility ranged from 110 to 200 in any given month. The total guest population has averaged about 125 people since July 2024. City staff observe regular interest with the facility among other unhoused people within the City as well as a consistent number of registered guests exiting the facility on a monthly basis.

The Community Services Department led day-to-day operations of the encampment, together with input and support from staff within the Public Works; Community Development; Office of Safety, Compliance & Facilities; Fire; and Police Departments, respectively. Based on contract and billing information, staff prepared Table 1 to illustrate the array of City and grant funded services available to guests of the encampment. Attachment 1 offers a table with information on a basic and professional service’s type, average monthly cost, funding source, and anticipated end date when applicable. Through December 2024, the total cost per month of operating the encampment with diverse basic and professional client services is about $108,470. About sixty-three percent of this total cost is paid through state and federal grants including the Encampment Resolution Funding (ERF), Homeless Housing and Assistance Program (HHAP), Community Development Block Grant (CDBG), and Homeless Housing Incentive Program (HHIP) sources. All services provided through grants will subside at different points between March and July of this year.

Plan A involves a continuation of the current services, those administered by the City and thirdparty entities with minimal programmatic and budget changes. Plan B represents a shift to largely the provision of basic services, where the City is responsible, if not entirely, for the delivery and related costs of services. Plan C will maintain most of the basic services, though will require adjustments to each professional client service to alter their scope and minimize related expenses.

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Table 2 – Overview of Different Operational Plans (Detailed Version within Attachment 2) Service Name
Plan A –
Maintain All
Current Services
Plan B –
Provide Largely
Basic Services
Plan C -
Mix of Basic and
Professional Services
with Modifications
Total Monthly Cost by
Option
$108,470.00 $48,370.00 $68,758.00
Annual Cost by Option $1,301,640.00 $580,440.00 $825,096.00 In addition to consideration of three different plans, City staff also prepared cost estimates for increasing on-site staffing and establishing a guest and visitor check-in system at the encampment. Table 3 provides a brief overview of different staffing options as well as the approximate cost to construct a new building to be placed at one of the encampment entrances.

The presented costs are either expressed as monthly or one-time occurrences. Altogether, these options, if selected, involve an additional expense to the City in excess of the total estimated cost of a particular operational plan.

Table 3 – Additional Staffing and Service Options
Option 1 – Two Additional
Encampment Attendants
Achieves 24-hour on-site staffing
for guest relations and
supervision; Similar duties to that
of current Attendant
$10,609 per month
Option 2 – Additional ThirdParty Security Guard Service Extend daily security guard shift
to 14-hours per day from 4:00 PM
to 6:00 AM, with 24 hour shifts on
weekends $10,750 per month
Option 3 – Build a Check-In
Station
Staffed by City and/or third-party
personnel, a new modular
building will be added next to a
single entrance with the goal to
regulate guest and visitor access
$7,000 of one-time
construction costs
To-date, City staff have not secured a significant amount of federal and/or state grants to offset basic and/or professional client services for guests of the temporary encampment through December 2025. During future City Council meetings, Council members will review, and may approve, the obligation of one or more grants for the provision of particular services, such as the provision of case management and interim housing beds for unhoused people with behavioral health needs. For example, staff will bring a proposal involving Behavioral Health Bridge Housing (BHBH) Program funds within the next one to two months for Council’s consideration. A proposal for the BHBH Program may only reimburse the City and a service Agenda Packet for February 4, 2025 Page 13
Tulare City Council Page 10
Agenda Memo - February 4, 2025
provider for expenses relating to behavioral health assessment, housing navigation, and operating costs of interim housing. The temporary encampment does not provide emergency, interim, or permanent housing. As such, the City may only expect a minimal application of BHBH to general operating costs of the temporary area, such as $100,000 to $200,000 for third-party professional staff delivering a BHBH eligible program for particular guests of the temporary encampment. The overall fiscal impact of the BHBG Program and other grant sources will vary depending on the operational plan and additional options approved by City Council. Staff contend that less than half of the total expenses over a twelve-month period will be reimbursable to a grant program.

Fiscal Impact & Funding Source(s): City Temporary Encampment Area (Fund 601) Legal Review: This item does not require legal review as presented. Depending on City Council action, the City Attorney may review new or extended contracts and service agreements as part of fulfilling an operational plan.

Alternative Action: 1) Approve with changes: City Manager and designee(s) will implement an operational plan with modifications to one or several of the individual services within or in addition to an operational plan; 2) Deny: City Manager and designee(s) will oversee existing contracts and service agreements related to the temporary encampment until their term and/or budget expires without future actions to renew and extend basic and/or professional services; or 3) Table: Reschedule consideration of this item to a future City Council meeting.

15.3 Amendment of the City of Tulare Budget Policies & Practices.

General Fund Reserve Account
Under council direction a 25% general fund reserve is maintained. This 25% is equal to 4 months of operating expenditure which also includes debt service.

General Fund Contingency Reserve
Contingency Reserve funds help mitigate the effects of unanticipated situations natural disasters, severe, unforeseen events, as well as any California Public Employees’ Retirement System (CalPERS) liabilities. The Contingency Reserve also serves as backup liquidity to the Risk Management Fund if this need were to arise. The Contingency Reserve is funded at a level at least equal to 1% of annual operating expenditures and transfers out. All uses of the Contingency Reserve must be approved by the City Council.

Agenda Packet for February 4, 2025 Page 14
Tulare City Council Page 11
Agenda Memo - February 4, 2025
Any such uses are to be repaid to the Contingency Reserve over a period of no more than three years.

The General Fund Reserve Account policy does not reflect a stated purpose for the reserve, allowing for broad interpretation as to its use. Conversely, the General Fund Contingency Reserve policy is somewhat comprehensive with respect to that reserve’s possible emergency applications and includes CalPERS liabilities and Risk Management back-up liquidity funding as eligible uses as well. Due to the lack of defined uses of one of the reserves and the wideranging uses of the other, consolidation of the reserves is warranted. Therefore, staff recommends replacing these reserves with a single reserve which may be utilized for all financial emergencies which may befall the General Fund. The proposed consolidated reserve will be named “General Fund Contingency Reserve,” preserving the name of the current reserve as it best succinctly describes the reserve’s purpose.

In addition to preparing for fiscal emergencies, it may, at times, be necessary to set aside funds for large-scale purchases. For this reason, staff also recommends including such a provision in the policy for the new General Fund Contingency Reserve. However, with the essentially allencompassing purpose of the new, consolidated reserve, no specificity regarding its uses, e.g., for CalPERS liabilities or back-up Risk Management Fund liability, is necessary; therefore, such specifics will not be reflected in the policy.

The proposed amendment establishes a target range for the consolidated reserve of between seventeen percent and thirty-three percent of a single fiscal year’s budgeted General Fund operating expenditures. This target range affords the City the flexibility to employ a portion of the funds in times of temporary or short-term urgent need and to augment the reserve when a budgetary surplus exists or when operating results generate surplus fund balance, while remaining in compliance with the policy. The lower end of the recommended range (i.e., seventeen percent) meets the Government Finance Officers Association’s minimum unrestricted budgetary fund balance recommendation for general-purpose governments, and the mid-point of the range is equivalent to the current General Fund Reserve account requirement, twenty-five percent.

A replenishment schedule is recommended, to ensure the reserve is restored within a reasonable timeframe should it fall below its minimum target level, with a “sliding scale” dependent upon the extent to which the reserve has been reduced.

Finally, staff recommends formally designating $15.3 million of current General Fund unassigned fund balance, approximately twenty-five percent of fiscal year 2025 General Fund operating expenditures, as the General Fund Contingency Reserve, to classify it as committed fund balance as defined in GASB 54. GASB 54 defines committed fund balance as including, “amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority.” Fiscal Impact & Funding Source(s): The recommended amendment to the Budget Policies & Practices “Long-Term Financial Planning” section and designation of $15.3 million to the General Fund Contingency Reserve as committed fund balance will have no fiscal impact.

However, improving the City’s reserve policies and designating the General Fund Contingency Reserve will strengthen the City’s ability to withstand financial emergencies.

Legal Review: This item does not require legal review.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

Agenda Packet for February 4, 2025 Page 15
Tulare City Council Page 12
Agenda Memo - February 4, 2025

15.4 City of Tulare Investment Policy.

Recommended Action: Approve the proposed amendment to the City of Tulare Statement of Investment Policy. [M. Roberts]
Summary: The City’s Statement of Investment Policy was last updated December 15, 2015.

City staff and the City’s investment manager & advisor have reviewed the policy and recommend it be revised as reflected in the attached Exhibit “A” to this staff report. The revision is intended to ensure the policy aligns closely with California Government Code Section 53601 regarding investment of surplus funds.

Fiscal Impact & Funding Source(s): There is no fiscal impact associated with this action.

Legal Review: This item does not require legal review.

Alternative Action: 1) Approve with changes; 2) Deny; or 3) Table.

16. FUTURE AGENDA ITEMS - NONE SUBMITTED [Time Estimate: 9:30 p.m.]

16.1 Initiation of Collaborative Process to Consider Roundabout at Cartmill & West.

Recommended Action: Direct staff to add to a future agenda or take no action.

Submitted by: Councilmember Mederos

17. STAFF UPDATES [Time Estimate: 9:35 p.m.]

18. ADJOURNMENT [Time Estimate: 9:40 p.m.]
The next regularly scheduled meeting of the Tulare City Council is Tuesday, February 18, 2025, at 7:00 p.m. in the Council Chamber, 491 North M Street, Tulare.

Agenda Packet for February 4, 2025 Page 16
WHEREAS, Black History Month, estab,lished in 1926 by Carter G. Woodson, is celebrated every February in recognition of achievements by Black Americans and all people of African descent in the United States; and
WHEREAS, the observance of Black History Month provides opportunities to gain a deeper understanding of African American History and acknowledge the centuries of struggles for equality and freedom; and
WHEREAS, it is essential that each of us learns about and condemns the injustices and inequities that Black and African Americans continue to experience and endure, but moreover that each of us participate in reform etforts; and
WHEREAS, the observance of Black History Month serves as a reminder of the ongoing need to combat racism and strive toward a society that embodies its democratic principles; and WHEREAS, the contributions of African Americans have been vital to the formation of our nation, and the theme for Black History Month 2025 "African Americans and Labo/' highlights the crucial role Black workers have played in shaping our nation's economy and society; and WHEREAS, the City of Tulare is proud to honorthe history and contributions of African Americans in our community, throughout our state, and nation.

NOW, THEREFORE, we, the City Council of the City of Tulare, do hereby proclaim the month of February 2025 as
Black History Month
in the City of Tulare and urge all citizens to reflect upon and celebrate the achievements of African Americans throughout history, and to continue working toward being an inclusive community in which all citizens are respected and recognized for their contributions to society.

Dated this 4th day of February 2025
Patrick lsherwood, Mayor
T
Ntunh fr, ffvl,ttou
Dennis A. Mederos, Gouncilmember
Agenda Packet for February 4, 2025 Page 17
City of Tulare Page 1 of 6

CITY OF TULARE

CITY COUNCIL MEETING MINUTES
Tulare Public Library & Council Chamber
491 North M Street, Tulare
Tuesday, January 21, 2025
6:00 p.m. Special Meeting
7:00 p.m. Regular Meeting
Proper notice of this meeting was given pursuant to Government Code Section 54954.2 and 54956.

COUNCIL PRESENT: Mayor Patrick Isherwood
Vice Mayor Steve Harrell
Councilmember Jose Sigala
Councilmember Terry A. Sayre
Councilmember Dennis A. Mederos
STAFF PRESENT: City Manager Marc Mondell; City Attorney Mario U. Zamora; Chief Deputy City Clerk Melissa Hermann; Assistant City Manager Josh McDonnell; Chief Financial Officer Mark Roberts; City Engineer Michael Miller; Public Works Director Trisha Whitfield; Community Services Director Chris Orr; Police Chief Fred Ynclan; Fire Chief Michael Ott; Human Resources Director Shonna Oneal; Community Development Director Mario Anaya; Chief Technology Officer Jason Bowling; Safety, Compliance & Facilities Officer Manny Correa; Senior Management Analyst Gladys Gonzalez

1. CALL TO ORDER
Mayor Isherwood called to order the special meeting of the Tulare City Council at 6:01 p.m. in the Council Chamber located at 491 North M Street.

2. PUBLIC COMMENT PERTAINING TO CLOSED SESSION ITEMS
There were no public comments.

3. RECESS TO CLOSED SESSION TO DISCUSS THE FOLLOWING

3.1 Conference with Legal Counsel - Anticipated Litigation Significant exposure to litigation pursuant to Gov. Code § 54956.9(d)(2): 1 case Council recessed to closed session at 6:02 p.m.

4. RECONVENE FROM CLOSED SESSION
Council reconvened from closed session at 7:19 p.m.

5. CLOSED SESSION REPORT
City Attorney Mario U. Zamora advised there was no reportable action.

6. ADJOURNMENT
Mayor Isherwood adjourned the special meeting at 7:19 p.m.

Item #: 13.2
Consent
Agenda Packet for February 4, 2025 Page 18
City Council Meeting Minutes Tuesday, January 21, 2025
City of Tulare Page 2 of 6

7. CALL TO ORDER
Mayor Isherwood called to order the regular meeting of the City Council at 7:19 p.m. in the Council Chamber located at 491 North M Street.

8. PLEDGE OF ALLEGIANCE AND INVOCATION
Chief Ynclan led the Pledge of Allegiance, and an invocation was given by Nick Anthony, Spiritual Care Pastor of Tulare First Baptist Church.

9. PROCLAMATIONS & RECOGNITIONS

9.1 Recognize Members of the Tulare Athletic Boxing Club for Achievements. Mayor Isherwood provided certificates of recognition to Jazmin Guerrero, Adrian Espinoza, Josue Ceja, and Patrick Ayers.

10. PUBLIC COMMENT
Patricia Rocha, Curator and Director of the Tulare Historical Museum, addressed the Council in regard to the recent press release on the partnership of Cyclum and the City of Tulare in developing at the Mefford Field Airport. Ms. Rocha expressed concern over the preservation of the Mefford Field Hangar and offered assistance in the design and redevelopment process. City Manager Marc Mondell provided clarification on the project.

Euler Torres addressed the Council in regard to the recent raids occurring and questioned whether the City is cooperating and/or participating in these raids. Mr. Torres also expressed his excitement for the completion of the new amphitheater.

11. COMMUNICATIONS
City Manager Marc Mondell advised there were no communications.

12. COUNCIL REPORTS AND ITEMS OF INTEREST
Council reported out on recent events and discussed items of interest.

13. CONSENT CALENDAR
Item 13.6 was removed from the Consent Calendar by Council.

It was moved by Councilmember Sigala, seconded by Vice Mayor Harrell, and unanimously carried to approve the items on the Consent Calendar as presented except for item 13.6.

13.1 Waive the reading of ordinances and approve reading by title only.

Recommended Action: Approve the reading by title only of all ordinances and that further reading of such ordinances be waived.

13.2 Approval of City Council Meeting Minutes.

Recommended Action: Approve the minutes of the special and/or regular meeting of January 7, 2025. [M. Hermann]

13.3 Second Reading and Adoption of Ordinance 2025-02.

Recommended Action: Adopt Ordinance 2025-02 to adopt the Tulare City Police Department Policy regarding the use and inventory of military equipment as required in Assembly Bill 481. [J. Hamlin]
Agenda Packet for February 4, 2025 Page 19
City Council Meeting Minutes Tuesday, January 21, 2025
City of Tulare Page 3 of 6

13.4 Acceptance of Grant and Administrative Agreement for Cycle Park.

Recommended Action: Adopt a resolution authorizing the City Manager to accept a grant (G24-03-04-G01) offer from the State of California Off Highway Motor Vehicle Recreation Division (OMHV) to the Tulare Cycle Park operating expenses not to exceed $459,199 for the year 2025 and to sign all applicable paperwork thereof. [M. Correa]

13.5 Police Department Access Controls and Lobby Reconfiguration.

Recommended Action: Authorize the establishment of a Technology CIP appropriation of $79,703 and use of Technology CIP for purchase and installation of Access Controls for the Police Department; and authorize the City Manager to sign a contract for $72,457 for the purchase and installation of Access Controls for the Police Department with NTM Productions of Visalia California, utilizing the cooperative purchasing agreements “CA Entity PEPPM Contract #535122-190; Authorize the City Manager or designee to approve contract change orders up to 10%, or $7,246, of the original contract amount. [J. Bowling]

13.7 Notice of Completion for Public Works Offsite Storm Drain Improvements.

Recommended Action: Accept as complete the required public works offsite storm drain improvements for the Cartmill Commons commercial development located at the southwest corner of Cartmill Avenue and Akers Street (a.k.a., Gem Street); authorize the City Engineer to sign a Notice of Completion (NOC); and direct the City Clerk to file the NOC with the Tulare County Recorder’s Office. [M. Miller]

13.8 Grants of Easement for 709 Academy Avenue.

Recommended Action: Authorize the City Manager to execute Grants of Easement from Cheryl Bickel, Trustee of The David C. Safina and Loyce Safina Trust dated November 21, 2005, for public utility and pedestrian access purposes along the north frontage of 709 Academy Avenue (APN-170-161-027); and authorize the City Manager or his designee to sign the Certificate of Acceptance for the same. [M. Miller]

13.9 Police Department Citizen Complaint Review Board Annual Report.

Recommended Action: Accept the Police Department Citizen Complaint Review Board annual report for calendar year 2024. [J. Stanley]

13.10 Purchase of One Chevrolet Truck for the Police Department.

Recommended Action: Award the purchase of one new/unused 2025 Chevrolet Silverado 1500 truck to National Auto Fleet Group, of Watsonville, CA using Sourcewell Contract No. 091521-NAF in the amount of $51,027.99, which includes all fees, tax, and shipping. [T. Whitfield]

13.11 Allocation of Housing and Homelessness Incentive Program (HHIP) Grant.

Recommended Action: Approve the allocation of one-time Housing and Homelessness Incentive Program (HHIP) grant funds in the amount of $147,000 to an existing shower and hygiene services provider under the Encampment Resolution Funding Second Round Project according to the terms and conditions of the HHIP Program and those specified in Tulare County Agreement No. PA15478. [M. Anaya]

13.12 Cartmill Commons Offsite Storm Dain Improvements Oversize Agreement.

Recommended Action: Authorize the City Manager to execute an oversized construction reimbursement agreement with UG2 Tulare CA, LP, a Delaware Limited Partnership for construction costs associated with the Cartmill Commons commercial development that are eligible for reimbursement in accordance with Chapter 8.64 of the Municipal Code, subject only to minor conforming and clarifying changes acceptable to the City Attorney and City Manager; authorize a transfer from the Storm Drain Facilities Development Impact Fee Fund (Fund 301) to the General Fund (Fund 001) of $406,649.30; and Agenda Packet for February 4, 2025 Page 20
City Council Meeting Minutes Tuesday, January 21, 2025
City of Tulare Page 4 of 6
authorize the establishment of $406,649.30 appropriation in the General Fund Oversize Liability – Principal (001-4751-8206) account for the payment of the reimbursement attributable to new growth. [M. Miller]

13.13 Memorandum of Understanding with Tulare Police Officers Union.

Recommended Action: Adopt the Three-Year Memorandum of Understanding (July 1, 2024 through June 30, 2027) by and between the City of Tulare and the Tulare Police Officers Union (TPOU). [S. Oneal; M. Zamora]

13.14 Salary Schedule Amendment.

Recommended Action: Adopt a resolution amending the City’s 2024/25 salary schedule. [S. Oneal; M. Zamora]

13.15 City Manager Marc Mondell Employment Agreement.

Recommended Action: Approve the Third Amendment to the Employment Agreement with City Manager Marc Mondell. [M. Zamora]

ITEM(S) PULLED FROM CONSENT CALENDAR

13.6 Parking Lot Sub-Lease Modification Agreement.

Recommended Action: Approve a sub-lease modification agreement between Dennis A.

Mederos and Cathy M. Mederos, Husband and Wife, individually and doing business as DAMCO Investments; and authorize the City Manager to execute all necessary documents on behalf of the City. [M. Correa]
Council Action: Councilmember Mederos pulled this item to recuse himself due to a conflict of interest stating he is a party to the agreement. Mr. Mederos stepped down from the dais and addressed the Council in regard to this item providing history on the original agreement. It was moved by Councilmember Sigala, seconded by Councilmember Sayre, and carried 4 to 0 (Councilmember Mederos recused) to approve the item as presented.

14. GENERAL BUSINESS

14.1 Downtown Tulare Property-Based Improvement District.

Recommended Action: Receive a presentation by NBS Consulting regarding the Downtown Tulare Property-Based Improvement District (PBID) and appoint a committee to assist with outreach efforts.

Presented By: City Manager Marc Mondell; Senior Management Analyst Gladys Gonzalez; NBS Consultants Sandra Burkhart and Michelle Angerich-Valentine Public Comment: There were no public comments.

Council Action: It was moved by Councilmember Mederos, seconded by Vice Mayor Harrell, and unanimously carried to approve the item as presented including the appointment of a committee to assist with outreach efforts to include Mayor Isherwood, who would serve as chair, a member of the Chamber of Commerce, a member of the Tulare Downtown Association, Senior Management Analyst Gladys Gonzalez, and City Manager Marc Mondell.

14.2 Southeast Tulare Transportation Infrastructure Improvements.

Recommended Action: Receive report regarding anticipated transportation infrastructure improvements in the southeast portion of the City.

Presented By: City Engineer Michael Miller
Public Comment: Patty Rocha addressed the Council in regard to the intersection of Mooney Boulevard and Cross Avenue and the issue of pedestrian safety.

Council Action: This item was informational; therefore, there was no action taken.

Agenda Packet for February 4, 2025 Page 21
City Council Meeting Minutes Tuesday, January 21, 2025
City of Tulare Page 5 of 6

14.3 Loan Agreement with International Agri-Center.

Recommended Action: Approve the proposed Loan Agreement, Promissory Note, Security Agreement, and Short Form Deed of Trust and Assignment of Rents between the City of Tulare and International Agri-Center and authorize the City Manager to execute all necessary documents.

Presented By: City Manager Marc Mondell; City Attorney Mario U. Zamora Public Comment: There were no public comments.

Council Action: Councilmember Sigala inquired as to why Tulare County Association of Governments (TCAG) could not loan the money to the Agri-Center directly. City Manager Marc Mondell stated that, from his discussions with TCAG, it was made clear to him that TCAG would only loan the money to the City, not to the private party. It was moved by Councilmember Mederos and seconded by Vice Mayor Harrell to approve the item as presented. Mayor Isherwood called for a roll call vote. The motion passed 5 to 0 as follows:

Ayes: Councilmember Mederos, Vice Mayor Harrell, Councilmember Sayre, Councilmember Sigala, Mayor Isherwood
Noes: None

14.4 Council Representation on Local and Regional Boards and Committees.

Recommended Action: Approve appointments of the City Council representatives to local and regional boards and committees.

Presented By: Chief Deputy City Clerk Melissa Hermann
Public Comment: There were no public comments.

Council Action: It was moved by Councilmember Mederos, seconded by Councilmember Sayre, and unanimously carried to approve the following appointments:

Board/Committee Sigala Sayre Harrell Mederos Isherwood
Agri-Center Board Liaison X
Tulare County Council of Cities X
Tulare County Association of
Governments (TCAG) X Alt.

Tulare County Local Agency
Formation Commission (LAFCo) X* X*
Tulare Downtown Association Board
of Directors X
City Employee Health Insurance
Committee X
City Investment Committee X
Teens-On-Board Liaison X
Tulare Irrigation District Joint Comm. X*
Mid-Kaweah Groundwater
Sustainability Agency (MKGSA)
Board
Alt. X*
Tulare County Task Force on
Homelessness X Alt.

Tulare County Economic
Development Corporation Board of
Directors (City Manager is primary)
Alt.

Agenda Packet for February 4, 2025 Page 22
City Council Meeting Minutes Tuesday, January 21, 2025
City of Tulare Page 6 of 6
Board/Committee Sigala Sayre Harrell Mederos Isherwood
Tulare County Regional Transit
Agency Board of Directors X Alt.

San Joaquin Valley Unified Air
Pollution Control District Citizens
Advisory Committee
X*
San Joaquin Valley Special City
Selection Committee X
Tulare County City Selection
Committee (mayor selects alternate) X

15. FUTURE AGENDA ITEMS

15.1 Changing SR137 Route from M Street to Inyo to O Street to Inyo.

Recommended Action: Direct staff to add to a future agenda or take no action.

Submitted By: Vice Mayor Harrell
Council Action: It was the consensus of Council to have staff add this item to a future agenda.

16. STAFF UPDATES
Staff provided updates on department activities.

17. RECESS TO CLOSED SESSION TO DISCUSS THE FOLLOWING ITEMS

17.1 Conference with Labor Negotiators (Govt. Code § 54957.6) Agency Designated Representatives: City Manager Mondell, Assistant City Manager McDonnell, Human Resources Director Oneal, City Attorney Zamora Employee Organization: Police Department Management Group Council recessed to closed session at 9:40 p.m.

18. RECONVENE FROM CLOSED SESSION
Council reconvened from closed session at 10:15 p.m.

19. CLOSED SESSION REPORT
Mayor Isherwood advised there was no reportable action.

20. ADJOURNMENT
Seeing no further business to discuss, Mayor Isherwood adjourned the regular meeting at 10:15 p.m.

These meeting minutes were approved by the Council on February 4, 2025.

Patrick Isherwood, President of the Council
and Ex-Officio Mayor
ATTEST:

Marc Mondell, City Clerk
________________________________
By Melissa Hermann, Chief Deputy City Clerk
Agenda Packet for February 4, 2025 Page 23
Staff Report
Meeting: City Council
Date: February 4, 2025
Department: Finance
Submitted by: Mark Roberts, Chief Financial Officer
Agenda Title: Local Agency Investment Fund Authorization

RECOMMENDED ACTION
Adopt a resolution authorizing certain City of Tulare officials to direct Local Agency Investment Fund (LAIF) transactions and to execute and deliver LAIF documents and rescinding Resolution 15-07.

SUMMARY
A portion of the City’s investments are held in LAIF. The City must designate, by resolution, the titles of its officers who are authorized to direct transactions in LAIF and execute and deliver documents necessary for administration of the City’s LAIF account(s). Currently, the City Manager, Assistant City Manager, and Chief Financial Officer (Director of Finance/Treasurer) are listed as the authorized officers.

In addition to specifying the titles of the officers authorized to direct transactions and execute and deliver documents, the City must provide LAIF with the names of the officers holding the titles. With the upcoming vacancy in the Assistant City Manager position due to Josh McDonnell’s retirement, it is necessary to remove Mr. McDonnell from the list of authorized persons. To ensure continuity of the City’s ability to expeditiously direct transactions and execute and deliver important LAIF documents, a sufficient number of officers must be authorized to perform these actions in the absence of one or more of the other authorized officers.

This item requests approval of the officers holding the titles below as those authorized to direct LAIF transactions and to execute and deliver LAIF documents.

FISCAL IMPACT & FUNDING SOURCES
There is no fiscal impact associated with this action.

LEGAL REVIEW
This item does not require legal review.

ALTERNATIVE ACTION

1. Approve with changes

2. Deny

3. Table

ATTACHMENTS

1. Resolution
Reviewed/Approved: MM
Item #: 13.3
Consent
Agenda Packet for February 4, 2025 Page 24
RESOLUTION 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TULARE

AUTHORIZING CERTAIN CITY OF TULARE OFFICIALS TO DIRECT LOCAL AGENCY

INVESTMENT FUND (LAIF) TRANSACTIONS AND TO EXECUTE AND DELIVER LAIF DOCUMENTS AND RESCINDING RESOLUTION 15-07
WHEREAS, the Local Agency Investment Fund (LAIF) is established in the State Treasury under Government Code Section 16429.1 et seq. for the deposit of money of a local agency for purposes of investment by the State Treasurer; and
WHEREAS, the City Council of the City of Tulare hereby finds that the deposit and withdrawal of money in the Local Agency Investment Fund in accordance with Government Code Section 16429.1, et seq. for the purpose of investment as provided therein is in the best interests of the City of Tulare; and
WHEREAS, on March 17, 2015, the City Council of the City of Tulare adopted Resolution 15-07 authorizing the deposit and withdrawal of City of Tulare monies in the California State Treasurer’s LAIF; and
WHEREAS, adoption of Resolution 15-07 also authorized the City of Tulare officers and their successors who may direct transactions in LAIF and execute and deliver documents necessary for administration of the City’s LAIF account(s); and WHEREAS, the list of City of Tulare officers authorized to direct LAIF transactions and to execute and deliver LAIF documents was last updated on November 20, 2023; and WHEREAS, since November 20, 2023, the titles of some of the officers authorized to direct LAIF transactions and to execute and deliver LAIF documents and the individuals holding the offices authorized to perform said actions has changed; and WHEREAS, to ensure continuity of the City’s ability to expeditiously direct transactions and execute and deliver important LAIF documents, a sufficient number of officers must be authorized to perform these actions in the absence of one or more of the other authorized officers.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tulare, as follows:

Section 1. The City Council of the City of Tulare hereby authorizes the deposit and withdrawal of City of Tulare monies in the Local Agency Investment Fund in the State Treasury in accordance with Government Code Section 16429.1, et seq. for the purpose of investment as provided herein.

Section 2. The following City of Tulare officers holding the titles specified herein below or their successors in office are each hereby authorized to order the deposit or withdrawal of monies in the Local Agency Investment Fund and may execute and deliver any and all documents necessary or advisable in order to effectuate the purposes of this resolution and the transactions contemplated hereby:

Agenda Packet for February 4, 2025 Page 25
Resolution 2025-XX

Page 2 ends

Marc Mondell, City Manager ________________________________ Signature
Assistant City Manager (Vacant as of
February 8, 2025)
________________________________
Signature
Mark Roberts, Chief Financial Officer (Finance
Director/Treasurer)
________________________________
Signature
Melanie Gaboardi, Assistant Finance Director ________________________________ Signature
Section 3. This Resolution shall be effective immediately upon its adoption and shall remain in full force and effect until rescinded by the City Council by resolution and a copy of the resolution rescinding this Resolution is filed with the State Treasurer’s Office.

Section 4. Resolution 15-07, which previously authorized the signatories for the City LAIF account, is hereby rescinded.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Tulare this 4th day of February 2025, by the following vote:

Ayes:

Noes:

Absent:

Abstain:

Patrick Isherwood, President of the Council
and Ex-Officio Mayor
ATTEST:

Marc Mondell, City Clerk
By Melissa Hermann, Chief Deputy City Clerk
Agenda Packet for February 4, 2025 Page 26
Staff Report
Meeting: City Council
Date: February 4, 2025
Department: Fire
Submitted by: Michael Ott, Fire Chief
Agenda Title: Personal Protective Equipment (PPE) Cleaning Facility

RECOMMENDED ACTION
Authorize the establishment of an Other General Fund CIP Fund appropriation of up to $100,000 and a transfer from the General Fund to the Other General Fund CIP Fund in the same amount, using unassigned General Fund fund balance for building modifications to create a Personal Protective Equipment (PPE) Cleaning Facility at Fire Station 61.

SUMMARY
Over the past few years, the California Division of Occupational Safety and Health (Cal/OSHA) has successfully amended Title 8 Regulation, section 3402.3; Selection, Inspection, and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting to provide a higher level of safety and protection for firefighters (FF) and the PPE they utilize in emergency response. This requirement changes how the fire service cleans and inspects the FF PPE in the state of California.

Cal/OSHA has formally adopted the National Fire Protection Association (NFPA) 1851, Standard on Selection, Care, and Maintenance of Protective Ensembles for Structural Fire Fighting and Proximity Fire Fighting, 2014 Edition as the authoritative standard on PPE selection, inspection, and maintenance.

Furthermore, the second identifiable problem with the new Cal/OSHA & NFPA requirement that directly affects TFD is that the department shall advance clean and inspect all PPE after it is exposed to a hazardous situation or elements or products of combustion. Based on calendar year 2023 call data, if we look at all fires, focusing house, sheds, cars, trash, dumpsters, and homeless materials, TFD engaged in a total of 216 fires. Each fire is mitigated with a different number of FF’s. For example, a structure fire will have 11 FF’s, whereas a dumpster might only have 2 FFs. With 216 fires utilizing 2-11 FFs, coupled with the PPE that would need to be shipped and cleaned following Cal/OSH & NFPA requirements, our estimated cost would reach $246K annually.

TFD would like to construct a proper PPE cleaning facility and purchase the associated equipment to do our own in-house advance cleaning and inspection. The NFPA allows for fire departments to conduct the advance cleaning and inspection, with the proper equipment, training, and certification. Presently, TFD Item #: 13.4
Consent
Agenda Packet for February 4, 2025 Page 27
has two members who have been trained and certified by our PPE manufacturer on the advance cleaning and inspection of PPE. All TFD lacks is the facility and equipment to conduct such a program.

The City of Tulare Facilities Maintenance Division will install electrical, HVAC, flooring, and other ancillary details and finishing at a cost of $12,000.00.

The complete cost for this project will pay for itself within the first 6 months of operation, as TFD will no long need to send PPE to outside contractors for advance cleaning and inspection. Furthermore, improving TFD’s ability to ensure that firefighters are equipped with properly cleaned gear will provide invaluable long-term impacts for their health and safety.

FISCAL IMPACT & FUNDING SOURCES
The transfer of from General Fund to the Other General CIP Fund requires the use of unassigned fund balance of $100,000.

LEGAL REVIEW
This item does not require legal review.

ALTERNATIVE ACTION

1. Approve with changes

2. Deny

3. Table

ATTACHMENTS

1. Supreme Constructions, Inc. of Tulare, Ca proposal

2. Flash Plumbing of Fresno, Ca proposal.

Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 28

PROPOSAL
PROPOSAL NO. Q-115-24
DATE

PLANS BY

ENGINEERING BY
BILL TO: SITE: City of Tulare
3981 South K St
Tulare, CA 93274
ITEM #
1 2
Special Terms:

Ex TOTAL: $24,745.00 cludes plans, engineering, permit fees, special inspections and all other trades or services either meant or implied. Non prevailing wage rates. Price includes necessary freight and sales tax unless noted otherwise.

EXCLUDES ALL PLUMBING, ELECTRICAL, OR CONCRETE
$1,245.00
one active door with closer and panic hardward, other door inactive with flush bolt locks.

Supply and install 3" vinyl backed insulation between new wall siding and girts at each new wall. low eave side wall of the building, with a height of roughly 15', and the east wall slopes up to 17' to the south corner of the wall. Price includes clips, girts, base angle (installed on existing concrete), wall siding with two toned stacked wainscot panels at ±42" a.f.f., trims, and (1) 8070 double man door with

DESCRIPTION AMOUNT
Supply and install metal building style horizontal girts on existing open bay, at north and east walls. $23,500.00 East wall measures roughly 29'-6" and the north wall measures roughly 21'-0". The north wall is the FD61 Enclosure Peter Aranzazu [email protected] Eric White None
City of Tulare
3981 South K St
Tulare, CA 93274
(559) 679-5916

JOB NAME CONTACT CONTACT VIA SALESMAN
September 17, 2024
None
Supreme Construction, Inc.
1067 South Q Place
Tulare, CA 93274
Lic.# 931367
Office: (559) 234-2070
Fax: (559) 562-6287
***.supremegc.com
Agenda Packet for February 4, 2025 Page 29

PROPOSAL
PROPOSAL NO. Q-115-24
DATE

PLANS BY

ENGINEERING BY
BILL TO: SITE: City of Tulare
3981 South K St
Tulare, CA 93274
Terms and Conditions
General Notes
Acceptance of Proposal:

Customer Signature:

Date:

By signing below, you acknowledge that the information provided in this document is true and accurate, that it meets the standards of your request, and that you wish to enter into a contract with Supreme Construction, Inc. Any item not specifically stated in the scope of work has not been calculated in the total price and will not be included. Supreme Construction, Inc. is not responsible for errors or omissions in the owner's design or provided plans, and will not be held liable for damage or repair expense to any un-marked underground lines or obstructions. If this proposal is accepted, a contract will be drafted by Supreme Construction, Inc. that must be signed by both the customer and Supreme Construction, Inc.

Thank you for the opportunity to provide this proposal. The price shown reflect current market value based on the date submitted.

Final prices may vary depending on when material is purchased for this project.

Please return a signed proposal to [email protected] or fax to (559) 562-6287. Call (559) 679-0540 with questions.

Eric White
City of Tulare
3981 South K St
(559) 679-5916

1. Above quotation includes all necessary sales tax, if applicable.

2. Quotation is subject to change and/or withdrawal if not accepted within 30 days, and all quotations are vulnerable to material price increases based on purchase date.

3. Modifications in any form to this proposal without written approval from Supreme Construction, Inc. will render this proposal to be void.

4. Required liability insurance, auto insurance and works compensation is provided by Supreme Construction Inc. Additional coverage to be paid by Owner or GC.

5. Excludes all Bonds.

6. Excludes compliance with labor requirements made by owner with any labor union.

7. Payments are to be paid within 30 days. Outstanding invoices will incur a 2% per month interest charge.

8. Failure to make payments in accordance with these terms may be subject to interest, costs, and legal fees incurred in enforcing timely payment. In those instances, the customer to fully reimburse Supreme Construction, Inc. of any additional costs incurred.

9. This quotation shall be governed by, and construed in accordance with, the laws of the State of California. With respect to any suit, action or proceeding arising out of or related to this quotation, the parties hereto submit to the jurisdiction and venue of the Superior Court in the County of Tulare, State of California. The prevailing party in any suit, action or proceeding arisign out of or related to this quotation shall be entitled to reasonable attorneys' fees and costs.

10. This quotation supresedes any and all other prior agreements, either oral or in writing, between the parties hereto regarding the information set forth herein.

1. Excludes all other trades or services not included in this quotation, either meant or implied.

2. Customer to provide all necessary information available to them for existing site conditions.

3. Errors or omissions by the customer can be handled in the form of a change order.

4. Excludes permit fees and special inspections.

5. Supreme Construction, Inc. is not responsible for costs incurred from damage to any unmarked or unidentified underground line damaged during construction.

6. Customer responsible to set up their own accounts with Southern California Edison, PG&E, AT&T, Comcast, Verizon, or any other utility provider.

7. Unless otherwise noted, quotation not figured as prevailing wage, weekend or overtime work. Change order will be issued if required.

8. Unless otherwise noted, quotation excludes all fire suppression, fire sprinklers, water storage, fire extinguishers, or any other requirements required by Fire Dept.

9. Unless otherwise noted, quotation excludes all offsite work.

10. Unless otherwise noted, quotation excludes all tenant improvements.

11. Requirements from utility providers may alter overall costs if their final design differs from those quoted. Change order will be issued if required.

12. If applicable, provided quotation alternatives must be identified upon acceptance of this quotation.

September 17, 2024
None
FD61 Enclosure Peter Aranzazu [email protected]
None
Tulare, CA 93274

JOB NAME CONTACT CONTACT VIA SALESMAN
Supreme Construction, Inc.
1067 South Q Place
Tulare, CA 93274
Lic.# 931367
Office: (559) 234-2070
Fax: (559) 562-6287
***.supremegc.com
Agenda Packet for February 4, 2025 Page 30

FLASH PLUMBING

SOLUTIONS INC
4263 W Belmont Ave
LICENSE NO. 1115114 Fresno CA 93722
DIR NO. PW-LR1001119680 Tel: 559-367-4154
ATTENTION: PETER
DATE: 10/22/2024
PROPOSAL #109 PROJECT: TULARE FIRE STATION
LOCATION: 800 S Blackstone Tulare CA
93274

SCOPE:
• Patch concrete
• Cut concrete as necessary
• Install 4’’ sewer line to new laundry about 120 feet
• Connect to existing sewer line
• Run camara if is necessary
• Install new electric tankless water weather
• Hot and cold water in copper pipe type (L)
• Vent thought exterior wall
• Install 4’’ clean out with G5 box
• Waste in cast iron pipe
• No-hub heavy duty bands
Agenda Packet for February 4, 2025 Page 31
EXCLUSIONS: DEMO,ELECTRIC,DRYWALL,PAINT

BID AMOUNT -----------------------------------------------------------------23,855.00.

Above quotations are tax included and are subject to acceptance with 30 days unless an extension is mutually agreed to between the general contractor and the sub-contractor. Any additions alternation or deletions to this bid from may make this bid null and void if awarded the contract the undersigned can and will upon request of and at the expense of the general contractor at the established charge therefore furnish a faithful performance bond and labor and materials bond with an authorized surety company.

Flash Pluming is to supply all labor and material for completion of work described above.

Sincerely,
Jesus Garcia
. X______________________
Signature
Agenda Packet for February 4, 2025 Page 32
Staff Report
Meeting: City Council
Date: February 4, 2025
Department: Public Works - Fleet Maintenance
Submitted by: Trisha Whitfield, Public Works Director
Agenda Title: Purchase of 2025 Ford Police Interceptors

RECOMMENDED ACTION
Award the purchase of 11 new/unused 2025 Ford Police Interceptor Utility (K8A) AWD vehicles to National Auto Fleet Group of Watsonville, CA using Sourcewell Contract No. 091521-NAF in the amount of $597,061.85.

SUMMARY
The City is a member of Sourcewell, which is a national public service agency that provides for cooperative purchasing for government agencies. Through the Sourcewell Contract No. 091521-NAF, staff is requesting authorization to purchase 11 new/unused 2025 Ford Police Interceptor Utility vehicles from National Auto Fleet Group, of Watsonville, CA in the amount of $597,061.85.

The FY 2025/26 budget will include the purchase of 11 new Police Interceptor replacement vehicles with a budget of $80,000 per unit. Due to the size of the patrol vehicle fleet and the need to keep the fleet current, the PD requests to replace seven units a year. This current fiscal year, three new police officer positions were approved for the PD. We need to order new units for those officers. The final unit being purchased is for the replacement of one unit that was totaled in an accident (Unit #3153). The cost of this unit will be covered by insurance proceeds. There are adequate funds in the budget to cover this purchase. Staff does not anticipate receiving these units at a minimum of 6 months from now. With the long lead time to obtain vehicles once ordered, staff is requesting to order these units now while the window to place orders is open.

FISCAL IMPACT & FUNDING SOURCE(S)
The cost for each unit is $54,278.35 with a total cost of $597,061.85. The remaining funds for each vehicle will be used to fully outfit the units for service. This appropriation requires the use of Fund 604 – Equipment Replacement Fund - unassigned fund balance in the amount of $880,000. These vehicles and the requested appropriation will satisfy the FY 2025/26 budget request for PD Interceptor replacement and new units.

LEGAL REVIEW
This item did not require legal review.

ALTERNATIVE ACTION

1. Approve with changes

2. Deny

3. Table
If this request is denied, staff will cancel the order of the 11 2025 Ford Police Inceptor Utility vehicles.

Item #: 13.5
Consent
Agenda Packet for February 4, 2025 Page 33

ATTACHMENTS

1. National Auto Fleet Group Quote for the replacement units Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 34
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Agenda Packet for February 4, 2025 Page 37
Agenda Packet for February 4, 2025 Page 38
Agenda Packet for February 4, 2025 Page 39
Agenda Packet for February 4, 2025 Page 40
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Agenda Packet for February 4, 2025 Page 42
Staff Report
Meeting: City Council
Date: February 4, 2025
Department: City Manager
Submitted by: Melissa Hermann, Chief Deputy City Clerk
Agenda Title: City Council Travel Expense and Community Improvement Budget Policy

RECOMMENDED ACTION
Adopt a resolution establishing guidelines for use of City Council Travel Budget and Community Improvement Budget.

SUMMARY
In 2016, the City Council adopted Resolution 16-21 which established guidelines for councilmembers to attend conferences, meetings, seminars, and events that serve a demonstrable public purpose and necessity and charging expenses. This policy was amended in 2018 by adoption of Resolution 18-02 which increased the amount for councilmembers to use on travel expenses as well as authorizing the use of unexpended funds for discretionary purposes, considered on a case-by-case basis.

Since the established and amended guidelines, the Council established a separate Community Improvement budget for each councilmember to expend for discretionary purposes. Staff has included guidance in the proposed policy to address Council’s Community Improvement budget (Section XV) to help guide Council in appropriate uses for these funds. The policy provides that Council shall coordinate all requests for use of their Community Improvement funds with the City Manager’s Office. It also states that each use does not require Council approval; however, a report will be provided no less than once per year showing the current balance and use of each councilmember’s budget.

The proposed policy removes this restriction.
• The proposed policy includes a provision for violations of the policy.

In addition to the proposed policy, councilmembers shall comply with Administrative Policy CM-16 Travel Policy, except where superseded by the proposed policy. Any expenditures that are not described in these policies or the Internal Revenue Service reimbursable rates, must be approved by the City Council at a public City Council meeting before the expense is incurred (Government Code § 53232.3(f)).

FISCAL IMPACT & FUNDING SOURCES
There is no fiscal impact associated with this action.

Item #: 13.6
Consent
Agenda Packet for February 4, 2025 Page 43

LEGAL REVIEW
The policy was reviewed by the City Attorney’s Office.

ALTERNATIVE ACTION

1. Approve with changes

2. Deny

3. Table

ATTACHMENTS

1. Resolution

2. Administrative Policy CM-16
Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 44
RESOLUTION 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TULARE

ESTABLISHING GUIDELINES FOR USE OF COUNCIL TRAVEL BUDGET AND

COMMUNITY IMPROVEMENT BUDGET
WHEREAS, the Tulare City Council may attend local, regional, and state conferences, meetings, seminars, and events of benefit to the City; and WHEREAS, on June 7, 2016, the City Council adopted Resolution 16-21 which established guidelines for members to attend conferences, meetings, seminars, and events that serve a demonstrable public purpose and necessity and charging expenses related thereto to the appropriate account; and
WHEREAS, on February 6, 2018, the City Council adopted Resolution 18-02 amending Resolution 16-21; and
WHEREAS, since the established and amended guidelines, a Community Improvement budget has been added for each councilmember which require guidelines.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tulare, as follows:

Section 1. Resolution 16-21 and 18-02 are hereby repealed.

Section 2. The City Council hereby adopts the Travel Expense and Community Improvement Budget Policy as provided in Exhibit A attached.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Tulare this 7th day of January 2025, by the following vote:

Ayes:

Noes:

Absent:

Abstain:

Terry A. Sayre, President of the Council and
Ex-Officio Mayor
ATTEST:

Marc Mondell, City Clerk
By Melissa Hermann, Chief Deputy City Clerk
Agenda Packet for February 4, 2025 Page 45
Resolution 2025-XX

Page 2 ends

EXHIBIT A
Travel Expense and Community Improvement Budget Policy
I. POLICY STATEMENT
The purpose of this policy is to establish the guidelines applicable for official travel by elected City Councilmembers and to comply with California Government Code § 53232.2. Travel by City Councilmembers is an appropriate activity and expense when performed for a public purpose.

Official travel shall be limited to events from which the City derives specific benefits through attendance of a councilmember and shall be supported. Councilmembers shall be reimbursed for actual and necessary expenses incurred in the performance of these official duties.

This policy also establishes guidelines for use of councilmembers’ Community Improvement Budgets.

II. COMPLIANCE
This policy, and any changes thereto, shall be adopted by City Council at a public meeting pursuant to California Government Code § 53232.2(b).

All documents related to reimbursable expenditures are public records subject to disclosure under the California Public Records Act. Any personal information, including credit card numbers contained on any receipts, may be redacted before publicly releasing such records.

When considering potential travel activities, members of the City Council shall ensure that California Open Meeting (Brown Act) requirements are not violated.

City Councilmembers shall comply with Administrative Policy CM-16 Travel Policy, except where superseded by this policy. Any expenditures that are not described in these policies or the Internal Revenue Service reimbursable rates, must be approved by the City Council at a public City Council meeting before the expense is incurred (Government Code § 53232.3(f)).

III. QUALIFYING TRAVEL EXPENSE OCCURRENCES
For purposes of this policy, the types of occurrences that qualify councilmembers to receive reimbursement of actual and necessary travel expenses include:

A. Communicating with representatives of regional, state, national government, international governments, and Sister City counterparts, their various agencies and entities on issues of interest and/or impact to the City, as well as communicating on City adopted or authorized policy positions.

B. Attending educational seminars and trainings designed to improve City Councilmembers’ skills and information levels.

C. Participating in regional, state, and national organizations whose activities and conferences affect the City’s interests (e.g., League of California Cities).

D. Attending City-sponsored or community events, excluding political events.

IV. COUNCILMEMBER TRAVEL EXPENSE ALLOTMENT
A. Travel Expense Allotment: Each councilmember will be provided funds, on an annual basis as part of the adoption of the annual City budget, to cover expenses associated with attending local, regional, and state conferences, meetings, seminars, and events that serve a demonstrable purpose and necessity. Councilmembers will only receive funds from the travel expense allotment for actually incurred travel expenses. Remaining funds Agenda Packet for February 4, 2025 Page 46
Resolution 2025-XX

Page 3 ends

in each councilmembers’ travel expense allotment at the end of the fiscal year will not be rolled over into the next fiscal year.

B. Exceeding Travel Expense Allotment: Any travel that will cause a councilmember to exceed their allotment must be approved by a majority vote of the City Council prior to expending travel funds.

C. City Councilmember Travel Expense Allotment Distribution: Allotments may be adjusted and agreed upon by City Council during the annual budget process. All councilmembers shall receive an equal budgeted travel expense allotment.

V. COORDINATION OF TRAVEL
Coordination of all City Council travel for conferences, meetings, seminars, and events shall be made through the City Manager’s Office, including, but not limited to conference registration, hotel accommodations, airline, rental or fleet vehicle, mileage reimbursement, qualified expense reimbursements, processing of per diem, event RSVP, ticket purchases, etc.

VI. REPORTS AT CITY COUNCIL MEETINGS
At each regular meeting of the City Council, councilmembers shall briefly report on meetings attended at the City’s expense (Government Code § 53232.3(d)).

Quarterly, the City Manager’s Office shall provide a report at a City Council meeting that includes the current balances and past use of the travel funds for each councilmember.

VII. TRANSPORTATION
Councilmembers engage in travel to attend various meetings to which they have been appointed, educational seminars, meetings of other government and non-government agencies on which they sit as the City of Tulare representative, and to attend various local community functions and events as part of the City’s outreach efforts. Councilmembers may request reimbursement for expenses related to transportation (mileage reimbursement) through the City Manager’s Office.

VIII. MEALS
Councilmembers shall be entitled to reimbursement for meals and associated gratuities in compliance with the rates and policies established for City employees per Administrative Policy CM-16 Travel Policy; however, councilmembers are required to submit original itemized receipts documenting meal expenses in order to be eligible for reimbursement (Government Code § 53232.3(c)).

IX. LODGING
For overnight travel related to attending events, conferences, seminars, or meetings, the City shall pay for hotel accommodations for those dates specified in the program/invite, including one night in advance for purpose of early morning program start time, if applicable. Extra hotel accommodations are at the sole expense of the councilmember.

X. GOVERNMENT AND GROUP RATES
Councilmembers shall use government and group rates offered by a provider of transportation or lodging services for travel and lodging when available (Government Code § 53232.2(e)). If the group rate is not available at the time of booking, councilmembers shall use comparable lodging that is consistent with the Internal Revenue Service rates for reimbursement.

Agenda Packet for February 4, 2025 Page 47
Resolution 2025-XX

Page 4 ends

XI. UPGRADED ACCOMMODATIONS
Costs related to any request to upgrade travel accommodations over conference rate, the Internal Revenue Service rates, or economy fares (hotel, room preference, airfare, etc.) shall be borne by the requesting councilmember by reimbursement to the City.

XII. OFFICIAL REPRESENTATION
Councilmembers provide official City representation and support at events such as at retirement and separation functions; awards functions; special ceremonies; non-profit fundraising events where the proceeds of the event benefit a civic, cultural, or charitable organization providing services for the benefit of Tulare residents and/or businesses that foster the City’s overall livability; and similar activities; and as such may incur necessary meals and food-related expenses. In such cases, the individual acting in their official capacity and the expense of the councilmember and significant other is incurred for the benefit of the City and is reimbursable at full cost, if the City has not already purchased admission tickets for the councilmember and significant other. The City will not cover donation tickets in lieu of attending the event.

XIII. TRAVEL EXPENSE FORM
In order to receive reimbursements, councilmembers must complete and submit the Travel Expense Form (assistance provided by the City Manager’s Office) and be in compliance with the following pursuant to Government Code § 53232.3(b-c):

A. Travel Expense Forms should be submitted within a reasonable time after incurring the expense, not to exceed 60 days.

B. Travel Expense Forms shall be accompanied by all the receipts documenting each expense except as provided for below.

C. By signing the Travel Expense Form, the councilmember shall certify that the expenses for which reimbursement is sought were incurred on behalf of the City in the performance of official duties and that they are in compliance with this policy and the City’s Administrative Policy CM-16 Travel Policy.

In the event that a receipt, invoice, cancelled check, or other documentation is lost, the councilmember shall make a good faith effort to obtain a duplicate copy. If documentation cannot be obtained, the councilmember may complete a Missing Receipt Form to document the details of the expense and describe how the expense was necessary to the performance of their official duties. It is understood that the use of a Missing Receipt Form shall be for rare, infrequent circumstances and shall not be abused. A Missing Receipt Form will not be accepted for expenditures over $100.00.

XIV. ETHICS TRAINING
Since councilmembers receive salary and reimbursements for actual and necessary expenses incurred in the performance of official duties, all councilmembers shall receive at least two hours of training in general ethics principles and ethics laws relevant to their public service every two years.

XV. COMMUNITY IMPROVEMENT BUDGET
The City Council Community Improvement Budget is used to provide a benefit to the community.

Examples of use include providing roll-off bins for a clean-up project, purchasing signs for memorial intersections, and donating funds to a certified non-profit for a specific use in the community (must show proof of certified non-profit status).

Agenda Packet for February 4, 2025 Page 48
Resolution 2025-XX

Page 5 ends

A. Councilmembers shall coordinate with the City Manager’s Office when considering use of their Community Improvement Budget.

B. Use of these funds does not require Council approval; however, a report shall be provided to the City Council at a public meeting no less than once per fiscal year showing the current balance and use of each Community Improvement Budget.

XVI. POLICY VIOLATIONS
Violations of this policy, including falsifying expense reports, may result in any or all of the following (Government Code § 53232.4):

A. Loss of reimbursement privileges.

B. Demand for restitution to the City.

C. Any other applicable state or federal penalties, including criminal prosecution.

Agenda Packet for February 4, 2025 Page 49

OFFICE OF THE CITY MANAGER
Policy Title: Travel Policy Effective Date: 01/23/17
Policy No.: 17-02 Revision Date: 8/16/11 No. 92-03
Sections: 1 - 5 Revision Date: n/a
Reviewed by: TST Revision Date: n/a

1. PURPOSE.

From time to time, city employees are required to attend conferences, meetings, training seminars, certification institutes, etc., which apply directly to the management and operation of Tulare city government. The city recognizes the value and importance of such meetings that relate either to representing city interests before other agencies or the business sector, and provide the opportunity for the exchange of ideas and training as it relates to the performance of city duties. This policy sets forth guidelines and establishes uniform practices and policies regarding expenditures associated with these cities business activities.

2. AUTHORITY.

The City Manager may exempt any city employee from the provisions of this policy should be it be determined that an exemption is warranted by extraordinary circumstances or operating requirements.

3. APPLICATION.

This policy is applicable to all city employees and legislative members. The expenses incurred by spouses or guests who choose to attend a conference shall be paid by the employee. There are, from time to time, meetings or social events where an employee’s spouse/guest is invited and expected to attend and participate. In those cases, costs associated with the spouse/guest attendance shall be paid for by the City of Tulare.

Written authorization from the Department Head shall be secured in advance when spouse/guest expenses will be incurred.

4. TRAVEL TYPES.

Examples of types of travel that are covered by this policy are as follows:
• Attendance at Department approved events, conferences, conventions, hearings, trainings, educational or work related seminars, or other meeting. • Participation in regional, state or national organizations whose activities affect the City’s interests.
• Other such Department approved activities requiring travel, which is clearly necessary, and in the best interest of the City.

CITY OF TULARE, CALIFORNIA

ADMINISTRATIVE POLICIES
Policy Number: CM-16
----- CM-16
Agenda Packet for February 4, 2025 Page 50
Administrative Policy No. 17-02

Page 2 ends

5. POLICY.

Budget appropriations constitute approval of travel where travel advance or reimbursement will be required. Unanticipated, but necessary, travel and related expenditures shall be approved by the City Manager in advance. Out of state travel by city employees may be permitted; however, authorization will be granted on a “case-bycase” basis by the City Manager. Requests for attendance at out of state conferences, which are not approved in the annual budget, must be submitted to the City Manager, in writing, through the department head, with appropriate information regarding why attendance is required, mode of transportation, and anticipated total cost.

Overnight travel requiring city paid expenditures under option 1, 2 or 3 is to be approved in advance by the Department Head or their designee and routed to the City Manager’s Office via email for final approval and processing to Finance.

The submitting Department is responsible for making all related travel arrangements once approval has been given.

Transportation: Employees attending city business related meetings by automobile are encouraged to use a city vehicle, if available.

Employees wishing to use their personal vehicle must comply with City Administrative Policy 87-01 in regard to proof of insurance.

Employees using personal vehicles to attend city related conferences and meetings shall receive mileage reimbursement at the prevailing Internal Revenue Service approved rate in effect at the time.

Department Head Car Allowance/Mileage: Department Heads or any other employee who receive a monthly vehicle allowance in lieu of a staff vehicle shall use their personal vehicle for all travel, which is 25 miles one way from City Hall. When traveling one way further than 25 miles, the Department Head may use a City vehicle or request mileage reimbursement at the prevailing Internal Revenue Service approved rate in effect at the time, with no adjustment made to the actual business miles traveled. Claims for eligible mileage shall be submitted to the City Manager for Approval, and then forwarded to the Finance Department for processing.

Requests for Cash Advance: Requests for cash advance for conference related expenses are to be submitted to the Finance Department in accordance with the regular accounts payable schedule (i.e. no later than 5 p.m., Friday, for checks to be distributed every other Friday).
----- CM-16
Agenda Packet for February 4, 2025 Page 51
Administrative Policy No. 17-02

Page 3 ends

Options for Paying for Conference Expenses
Option 1: All allowed expenses incurred will be paid using a city-issued credit card.

Expenses shall include: registration and materials for the classes or conference attended, lodging, meals, incidentals including parking, baggage handling, taxi, etc. Using this option requires itemized receipts for all expenses incurred to be submitted upon return from the trip. If a receipt is lost or unavailable, a signed affidavit will be required for missing documentation. Petty cash reimbursement may be made in circumstances where a credit card may not be accepted (i.e. parking meters, etc.).

Option 2: Registration, class materials, and lodging can be placed on a city credit card. A Per Diem cash advance may be obtained for meals for travel beginning/ending as shown on the below schedule. Conference registration must be submitted to determine which meals are included in the conference. Per Diem shall be determined by the allowed Federal Government (IRS) rate with 20% allowed for breakfast, 30% allowed for lunch and 50% allowed for dinner when calculating meals that are not included in registration. In this option, receipts will be required for the items charged on the city credit card. Receipts are not required for meals included in the Per Diem. Any meal or incidental expense in excess of the Per Diem allowance will not be reimbursed.

Meals Departure on Initial Day
of Travel
Return on Final Day of
Travel
Breakfast Before 7:00 a.m. After 10:00 a.m.

Lunch Before 11:00 a.m. After 2:00 p.m.

Dinner Before 4:00 p.m. After 7:00 p.m.

Meals included in registration fees or hotel rates are not eligible for per diem (a continental breakfast does not constitute a meal).

Gratuities for meals are included in the per diem rates and are not reimbursed separately.

Option 3: Using this option, the employee may elect a Per Diem cash allowance to cover the cost of lodging, meals, and all incidentals. Meal Per Diem shall be handled the same as in option 2. No receipts are required under this option. Class or conference registration and materials will be paid using a city credit card. Lodging, meals, and incidental expenses in excess of the Per Diem amount will not be reimbursed.
----- CM-16
Agenda Packet for February 4, 2025 Page 52
Administrative Policy No. 17-02

Page 4 ends

Qualified Expenditures: It shall be the duty of each staff member who travels at city expense to do so in a practical and economical manner. NO ALCOHOLIC BEVERAGES ARE TO BE CLAIMED OR WILL BE REIMBUSED BY THE CITY.

Qualified Expenditures shall be considered for the following:

Registration Parking Fees
Lodging* Toll Bridges
Meals Mileage where appropriate
Tips (not to exceed 20%) Business related hotel phone calls Bus/Taxi/Rapid Transit & other fares Baggage handling
related to conference/meeting activity
*Lodging arrangements should be practical and economical. As a guide, lodging, as much as possible, should be similar to the current Federal Government (IRS) guidelines: Employees staying at “Conference” hotel and receiving the discounted conference rate shall be allowed to exceed these guidelines, but are not exempt from any other items in the travel policy.

A Transient Occupancy Tax waiver (California travel only) should always be requested at the hotel. If it is denied, a notation should be made on the waiver form, which then should be attached to the expense form.

Meals: Reimbursement for meals shall be made only when travel extends for a minimum of six (6) hours except when specifically approved otherwise by the Department Director.

Reimbursement shall be at the current per diem rate established by the U.S. Government General Services Administration (GSA).

Meals provided by common carriers (e.g. airline, train, bus) or included in registration fees or hotel rates (i.e., if a Traveler attends a conference where lunch is provided, no reimbursement will be provided for the lunch meal) are not eligible for per diem reimbursements. A continental breakfast does not constitute a meal. Gratuities for meals are included in the per diem rates and are not reimbursed separately.

Lodging: Reimbursement of lodging is limited to the actual cost of a single room. When making arrangements for lodging, the government, group, conference or promotional rates shall be requested. The City will not reimburse the traveler for luxury upgrades (e.g. ocean views, suites, etc.) When lodging at a conference facility is full, lodging at a comparable hotel shall be acceptable.

Expense Form: After returning from an authorized conference, meeting, or seminar, the attending employee(s) utilizing option 1 or 2 above shall complete, with twenty (20 working days a “travel expense form” provided by the City of Tulare. The completed form is to be submitted to the department head, then to the Finance Director for processing.

Both the itemized and total paid receipts must be submitted for all meals. ----- CM-16
Agenda Packet for February 4, 2025 Page 53
Administrative Policy No. 17-02

Page 5 ends

Extended Personal Travel: Travelers who combine personal travel with business travel must identify and pay for the personal segment of the trip. Reimbursement for car rental and airport parking must be prorated to allow reimbursement for only those costs associated with City business.

Public Records Requirement: All documents related to reimbursable City travel expenditures are public records and may be subject to disclosure under the California Public Records Act (Government Code §6250-6270).

The City’s Records Retention Schedule requires that travel reports and supporting documents be retained for two (2) years.

Paul Melikian, Interim City Manager Date
----- CM-16
Agenda Packet for February 4, 2025 Page 54
Staff Report
Meeting: City Council
Date: February 4, 2025
Department: Community Development - Planning
Submitted by: Mario Anaya, Community Development Director Agenda Title: Farmland Mitigation Ordinance Revisions

RECOMMENDED ACTION
Adopt Zone Amendment No. 757 approving revisions to the City of Tulare’s Farmland Mitigation Ordinance (Chapter 10.222 of the City of Tulare Municipal Code).

SUMMARY
In 2020, the City of Tulare adopted a farmland mitigation ordinance that requires mitigation when agricultural land outside the city limits and within the Tulare Urban Development Boundary is converted to non-agricultural use. The City’s current farmland mitigation ordinance provides that payment of an inlieu fee is allowed as an alternative to the acquisition of mitigation land for conversion of parcels smaller than 20 acres, when direct acquisition of mitigation land is not feasible.

One of those, is to extend the in-lieu fee option to parcels larger than 20 acres. The proposed amendments to Chapter 10.222 of the City of Tulare Municipal Code would allow this option, in addition to revisions to improve clarity and implementation of the ordinance.

FISCAL IMPACT & FUNDING SOURCE(S)
Anticipated revenue from the collection of the in-lieu fee for farmland mitigation, currently proposed at $6,900 per acre, which would be used to pay for the establishment of farmland conservation easements on city-owned property and acquire new farmland, along with paying for land trusts or city staff to set-up, monitor, and report on the established easements. An account would have to be established to track the flow of revenue and expenditures for this program.

LEGAL REVIEW
The proposed ordinance revisions have been reviewed by the City Attorney.

ENVIRONMENTAL
The proposed Zoning Ordinance Amendment is exempt from Environmental Review under the California Environmental Quality Act (CEQA), pursuant to Section 15061(B)(3). The purpose of the ordinance is to Item #: 14.1
Public Hearing
Agenda Packet for February 4, 2025 Page 55
mitigate impacts to farmland. The proposed revisions would still require this mitigation but shifts more responsibility for it to the city by collecting in-lieu fees for more projects.

ALTERNATIVE ACTION

1. Recommend Approval with Changes

2. Recommend Denial

3. Table
If denied or tabled, it will affect the City’s ability to address the concerns raised by some applicants, and as directed by the City Manager, to make modifications to this Municipal Code chapter that would increase flexibility for applicants while still allowing the City to comply with farmland conservation goals and farmland conversion mitigation requirements.

ATTACHMENTS

1. Proposed Changes to Chapter 10.222 of Tulare Municipal Code

2. NBS Report

3. Ordinance
Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 56
CHAPTER 10.222: FARMLAND MITIGATION
Section

10.222.010 Title.

10.222.020 Purpose and intent.

10.222.030 Objectives.

10.222.040 Definitions.

10.222.050 Mitigation obligation.

10.222.060 Optional mitigation alternatives.

10.222.070 Requirements for mitigation land and agricultural conservation easements.

10.222.080 Requirements for qualified entities.

10.222.090 Approval and completion.

10.222.100 Miscellaneous.
§ 10.222.010 Title.

This chapter may be cited as the "Farmland Mitigation Ordinance" of the City of Tulare. (Ord. 2020-03, passed 2-18-2020)
§ 10.222.020 Purpose and intent.

The purpose of this chapter is to set forth the specific criteria and guidelines, consistent with the City of Tulare (Tulare) General Plan policies for the mitigation of agricultural land converted to nonagricultural uses, within the city's urban development boundary (UDB) and outside the city limits. The intent of this chapter is to protect the City of Tulare's agricultural lands from conversion to nonagricultural uses. (Ord. 2020-03, passed 2-18-2020)
§ 10.222.030 Objectives.

The objectives of this chapter are as follows:
(A) Protect agriculture as a crucial component of Tulare's economy and cultural heritage; (B) Protect and preserve agricultural lands from the effects of urban encroachment; (C) Balance the need for agricultural land conservation with other public goals in Tulare, including the need for housing, commercial, industrial, and infrastructure development; and (D) Foster coordination and cooperation by the City of Tulare with the County of Tulare, Local Agency Formation Commission, and neighboring cities, including the City of Visalia, to facilitate an integrated and comprehensive regional approach to agricultural land conservation. (Ord. 2020-03, passed 2-18-2020)
Agenda Packet for February 4, 2025 Page 57
§ 10.222.040 Definitions.

Except where the context of this chapter otherwise expressly requires, the following definitions shall govern the construction of this chapter. Furthermore, the definition of a word or phrase applies to any of that word's or phrase's variants. For the purpose of this chapter, the following definitions shall apply.

ADJUSTMENT FOR INFLATION. For costs other than the purchase price of agricultural conservation easements, adjustment for inflation refers to adjustments to reflect increases in the Consumer Price Index applicable to Tulare. For the purchase price of agricultural conservation easements, adjustment for inflation refers to adjustment to reflect increases in the House Price Index applicable to Tulare, as compiled by the Office of Federal Housing Enterprise Oversight.

AGRICULTURAL CONSERVATION EASEMENT. A perpetual easement or servitude, comparable to a conservation easement, as provided for in§§ 815 to 816 of the Cal. Civil Code, or an open space easement, provided for in §§ 51070 to 51097 of the Cal. Gov't Code, limiting the use of the encumbered land to agricultural and accessory uses, which easement or servitude is used to satisfy the mitigation obligation imposed by this chapter.

AGRICULTURAL DESIGNATION. Land that is within the City of Tulare or within the City of Tulare's Urban Development Boundary and is labeled as Open Space/Agriculture per the latest City of Tulare General Plan Land Use Map, or land within the County of Tulare designated for agricultural use in the latest Tulare County General Plan Land Use Map.

AGRICULTURAL LAND. Land, residing within the UDB of the City of Tulare, but outside the city's incorporated limits, which is either currently in agricultural use or substantially undeveloped and capable of agricultural use.

AGRICULTURAL USE. Use of land to produce food, fiber, or livestock for commercial purposes.

AGRICULTURAL ZONE. Land that is within the City of Tulare and is labeled as Open Space/Agriculture per the latest City of Tulare Zoning Map, or land within the County of Tulare zoned for agricultural use in the latest Tulare County Zoning Map.

APPLICANT. Any natural person, joint venture, joint stock company, partnership, association, club, company, corporation, business, trust, or organization seeking approval or authorization from the City of Tulare on an application or permit for property which is outside the Tulare city limits at the time the ordinance codified in this chapter becomes effective.

CHAPTER. Chapter includes all sections and provision within this Farmland Mitigation Ordinance.

CITY COUNCIL. The City Council of the City of Tulare.

CONVERSION. Those conversions of land requiring mitigation as identified in § 10.222.040.

CRITICAL FARMLAND. Land designated "Prime," "Farmland of Statewide Importance," "Unique Farmland," or "Grazing Land" by the California Department of Conservation as shown on their latest Important Farmland Map.

FALLOW. Removal of land from agricultural production regardless of whether the fallowing or removal from agricultural production is temporary or long term or fallowed under a voluntary removal program.

LEGAL PARCEL. A parcel of land lawfully subdivided in accordance with the Subdivision Map Act, whether or not a Certificate of Compliance has been issued for the parcel. The existence of a distinct Assessor's Parcel Number for a parcel does not, by itself, demonstrate that it is a legal parcel.

LEGISLATIVE BODY. A jurisdiction's decision-making body.

MITIGATION LAND. Land encumbered by an agricultural conservation easement or under an alternative mitigation option approved by the legislative body pursuant to § 10.222.060 to satisfy the mitigation obligation imposed by this chapter.

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QUALIFIED ENTITY. An entity qualified and approved to hold agricultural conservation easements in compliance with § 10.222.080 of this chapter.

SMALL PROJECT. A development project that is less than twenty acres in size. A small project does not include one phase or portion of a larger project greater than twenty acres that is subject to a master, specific, or overall development plan.

SUBSTANTIALLY SURROUNDED. An area is considered to be substantially surrounded if a minimum of 51% of the border of the subject property is bordered by urban development, including rural residential development or public services.
(Ord. 2020-03, passed 2-18-2020)
§ 10.222.050 Mitigation obligation.

This chapter and the following mitigation obligations shall apply to the conversion to a nonagricultural use of one or more acres of Critical farmland, as defined in this chapter, regardless of the General Plan land use designation or zoning applicable to the land. (A) As mitigation for the conversion of critical farmland, the applicant shall arrange for the imposition of an agricultural conservation easement on no less than one acre of mitigation land for each acre of land proposed for conversion. The applicant shall convey, or arrange for the conveyance of, such agricultural conservation easement to a qualified entity. The mitigation land shall be comparable to the land proposed for conversion, as provided in § 10.222.070 of this chapter. (B) For the purposes of calculating the mitigation obligation under§ 10.222.0SO(A), the area requiring mitigation shall be the full area of the legal parcel affected by conversion and not merely any lesser portion of the parcel that may be sought to be developed or converted to another use at the time conversion is proposed.
(C) The applicant shall pay to the qualified entity an administrative fee sufficient to compensate for all administrative costs reasonably necessary for the qualified entity to acquire and hold the agricultural conservation easement and implement this chapter, including all of the following:
(1) Establishment of an endowment to provide for monitoring, administration, enforcement, and all other services necessary to ensure that the conservation purposes of the agricultural conservation easement are maintained in perpetuity; and
(2) The qualified entity's administrative costs in evaluating the mitigation land and reviewing and accepting the agricultural conservation easement.
(D) It is the applicant's responsibility to identify, propose for approval mitigation land, and arrange for imposition of an agricultural conservation easement that satisfies the requirements in § 10.222.070 of this chapter.
(E) Nothing in this chapter shall be construed to compel an applicant for conversion to convey to the City of Tulare or to a qualified entity an agricultural conservation easement in property owned by the applicant.
(F) The mitigation obligation set forth in this chapter shall not apply to a legal parcel that is less than one acre in area. However, this exemption shall not apply to a parcel that is one phase or portion of a larger project. The City of Tulare may disallow the use of this exemption if it finds that the subject property has been subdivided into one-acre or smaller parcels in whole or in part to avoid the mitigation obligation.

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(G) The following public uses are exempt from the mitigation obligation imposed by this chapter:
public parks or public recreational facilities, permanent natural open space, and trails and developed open space that are open to the public.
(H) Projects designed solely to preserve, create, or enhance wildlife habitat on agricultural land shall be exempt from the mitigation obligation in this chapter. (I) At its sole option, an applicant may choose to arrange for the imposition of an agricultural conservation easement on a larger area of land than the area of land proposed for conversion and thereby generate a mitigation credit equal to the excess net acreage encumbered with the easement. (J) Any excess area encumbered with the agricultural conservation easement shall fully comply with all requirements of this chapter and shall be comparable to the land proposed for conversion to the same degree as the portion of the land offered to satisfy the mitigation obligation in this chapter, including, but not limited to, the requirements for mitigation land in § 10.222.070 and the review and approval process in § 10.222.090.
(K) The administrative fee paid by an applicant choosing to create mitigation credits shall include the acreage covered by the mitigation credits. The applicant may pass that fee through to a later purchaser of the credits.
(L) Mitigation credits created under this chapter may be conveyed and used as provided in §

10.222.060.
(M) The qualified entity shall maintain a ledger indicating:
(1) The amount of credits created under this section;
(2) The holder of those credits;
(3) The administrative fees paid by the creator of the credits attributable to the mitigation land covered by the credits; and
(4) Any subsequent transactions involving those credits. (N) Exemptions. The following land uses are exempt from the mitigation requirements of this article:
(1) The following projects: permanently affordable housing, public schools, community farms & gardens, land conserved in a natural state and habitat for native plants or wildlife, and public trails or parks.
(2) Small projects, as defined in Section 10.222.040.
(4) (Ord. 20-03, passed 2-18-2020)
§ 10.222.060 Optional mitigation alternatives.

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(B) Payment of an in-lieu fee is available only for conversion of legal parcels that are smaller than 20 acres.
(C) To obtain authorization to pay an in-lieu fee, the applicant must also demonstrate one of the following:
(1) No qualified entity exists;
(2) The applicant has met with all qualified entities and all such entities have certified in writing to the City of Tulare that they are unable or unwilling to assist with the acquisition of an agricultural conservation easement; or
(3) Working with a qualified entity, the applicant has made at least one good faith offer to purchase an agricultural conservation easement, but all such offers have been declined by the potential seller or sellers.
(D)(B) Any in-lieu fee shall include each of the following components:
(1) The purchase price of an agricultural conservation easement in mitigation land that complies with all of the requirements in § 10.222.070. This component shall be adjusted for inflation based on estimate of the time required to acquire mitigation land following payment of the fee. (2) All transaction costs associated with acquisition of the agricultural conservation easement. (3) An amount sufficient to endow the cost of monitoring, administering, and enforcing the agricultural conservation easement in perpetuity.
(4) The applicant's pro rata share of the qualified entity's administrative costs in implementing the in-lieu fee program.
(5) A reasonable amount to cover additional contingencies. (E)(C) In no event shall the in-lieu fee established pursuant to this section exceed a reasonable estimate of the total of:
(1) The cost of acquiring and managing the agricultural conservation easement that the applicant would otherwise be required to create to satisfy its mitigation obligation under this chapter; and (2) The cost of administering the in-lieu fee.
(F)(D) In-lieu fees received by the qualified entity shall be expended solely for the purpose of acquiring and managing agricultural conservation easements in mitigation land that meets the criteria set forth in
§ 10.222.070, and funding the qualified entity's cost of implementing the in-lieu fee program. (G)(E) If authorized by the City of Tulare, an applicant for conversion of critical farmland may satisfy the mitigation obligation set forth in this chapter by acquiring mitigation credits created under§ 10.222.050(1), (J) and (K), which are permitted to be passed through to another purchaser. (H)(F) The city, in conjunction with a qualified entity, shall make available to any applicant who requests it, the ledger of mitigation credits provided for in § 10.222.050(M). The City of Tulare shall have no further responsibility for facilitating any private transaction involving mitigation credits.
(I)(G) Mitigation credits may be used to satisfy the mitigation obligation created by this Agenda Packet for February 4, 2025 Page 61
chapter only after the City CouncilCommunity Development Director or designee has made the findings required by § 10.222.070 with respect to the land proposed for conversion and the mitigation land covered by the mitigation credits.
(J)(H) An applicant choosing to use mitigation credits to comply with this chapter shall pay the qualified entity administering the credits a fee in the amount equivalent to the inflation adjustment on the administrative fee that the creator of the mitigation credits originally paid pursuant to §

10.222.050(K), if in fact the creator of the mitigation credits passed through the administrative fee for the creation of the credits to a future purchaser of those credits. (K)(I) An applicant proposing conversion of critical farmland may propose an alternative method of mitigation for review and approval by the City CouncilCommunity Development Director or designee subject to satisfying all of the following criteria:
(1) The proposed mitigation must result in permanent protection of mitigation land; I (2) The applicant must bear all costs of reviewing, approving, managing, and enforcing the mitigation;
(3) The proposed mitigation must be in substantial compliance with the requirements for mitigation land and agricultural conservation easements set forth in § 10.222.070; and (4) The proposed mitigation must be in all respects at least as protective of agricultural land as the mitigation required by this chapter.
(L)(J) The mitigation obligation imposed by this chapter is that set forth in § 10.222.050. Each alternative mitigation option in this section (§ 10.222.060) is wholly optional and made available solely for the applicant's convenience. Under no circumstances shall the City of Tulare require any applicant to implement any such alternative mitigation option, if applicant is willing to implement the mitigation obligations imposed in § 10.222.050.
(Ord. 20-03, passed 2-18-2020)
§ 10.222.070 Requirements for mitigation land and agricultural conservation easements. (A) Agricultural conservation easements in mitigation land shall be held in perpetuity by a qualified entity as defined in § 10.222.080.
(8B) Mitigation land shall be comparable in nature to the agricultural land proposed for conversion. A mitigation land is deemed comparable in nature if it complies with the below requirement under§

10.222.0?0(C).
(C) The City CouncilCommunity Development Director or designee shall not approve proposed mitigation for conversion of Critical Farmland unless it finds that the mitigation land complies with each of the following requirements:
(1) The mitigation land is located in the San Joaquin Valley, outside of any city's limits or sphere of influence, with preference given to mitigation land within ten miles of the City of Tulare limits. (2) The legislative body having jurisdiction where the mitigation land is located has adopted a resolution approving the use of the land as mitigation. (3)(2) The mitigation land is subject to an agricultural designation in the General Plan and zoned for agricultural use. Any legal nonconforming use of the mitigation land has been or will be Agenda Packet for February 4, 2025 Page 62
abandoned prior to execution of the agricultural conservation easement, or if maintained, will not interfere with agricultural use of the mitigation land. (43) The mitigation land consists of one or more legal parcels of at least ten net acres in size, exclusive of the area occupied by any existing home and the area of any road or right-ofway easement, unless the land proposed for conversion is smaller than ten acres. (5) An appraisal shows that the value of the agricultural conservation easement in the mitigation land is at least as high as that of an agricultural conservation easement in the land proposed for conversion. Appraisal shall be prepared by a licensed appraiser with experience in agricultural land appraisal.
(6) (4)The soil quality of the mitigation land has the agricultural productive capacity at least equal to that of the critical farmland proposed for conversion. (7)(5) The available water supply for the mitigation land is at least equal to that of the land proposed for conversion in terms of quantity, quality, and security. (8)(6) The mitigation land is not already subject to an encumbrance or interest that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use, such as a conservation easement, open space easement, flowage easement, avigation easement, long term agricultural lea,ise, profit, or an interest in the subsurface estate that would preclude development of the surface estate. A contract entered pursuant to the Land Conservation Act, Cal.

Gov't Code § 51200 et seq. (Williamson Act) shall not constitute an encumbrance for purposes of this section. However, this is not to prevent the stacking of an agricultural conservation easement, with other encumbrances, easements, or interests in the property, so long as the multiple encumbrances do not contradict or prevent the effectiveness of each independent encumbrance for which the land is conserved in perpetuity.
(9)(7) There are no physical conditions or contamination on the mitigation land that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use. (10)(8) The mitigation land has no existing home, unless the land proposed for conversion includes an existing home.
(11)(9) The mitigation land is not owned by any public agency. (D) The City CouncilCommunity Development Director or designee shall not approve proposed mitigation land unless it finds that the agricultural conservation easement complies with each of the following requirements:
(1) The type of agricultural related activity allowed on the mitigation land is specified in the easement and is at least as restrictive as the requirements of the City of Tulare's Open Space/Agriculture (A) Zoning District.
(2) The agricultural conservation easement prohibits all residential, commercial, or industrial development and any other land uses or activities that substantially impair or diminish the agricultural productive capacity of the mitigation land or that are otherwise inconsistent with the conservation purposes of this chapter.
(3) The agricultural conservation easement prohibits the landowner from entering into any additional easement, servitude, or other encumbrance that could prevent or impair the potential agricultural use of the mitigation land.
(4) The agricultural conservation easement limits the construction of structures to those designed Agenda Packet for February 4, 2025 Page 63
to facilitate agricultural use of the property, except that this division shall not prohibit replacement of an existing home allowed by§ 10.222.070(C)(10).
(5) The easement provides that the mitigation land will retain water rights at least equal to that of the land proposed for conversion in terms of quantity, quality, and security. (6) The agricultural conservation easement will be either obtained from a willing seller or voluntarily conveyed by the applicant.
(7) Any existing easement, other than a right-of-way easement, deed of trust, or other servitude or encumbrance on the mitigation land shall be subordinated to the agricultural conservation easement.
(8) The agricultural conservation easement shall be approved by the qualified entity that will hold the easement and executed by all parties with an interest in the mitigation land. (9) The agricultural conservation easement is in recordable form and contains an accurate legal description of the mitigation land.
(10) The agricultural conservation easement names the qualified entity as an intended beneficiary and authorizes it to enforce all terms of the easement. (11) The agricultural conservation easement recites that it is intended to saSqtisfy the mitigation obligation imposed by this chapter and that it is subject to the requirements set forth in this chapter.
(12) If the agricultural conservation easement is an instrument other than a conservation easement created under§§ 815 to 816 of the Cal. Civil Code or an open space easement created under§§ 51070 to 51097 of the Cal. Gov't Code, both the qualified entity and the City of Tulare have certified that the easement will run with the land and bind successor owners of the mitigation land in perpetuity.
(13) The agricultural conservation easement provides that if the qualified entity holding the easement ceases to exist, ownership of the easement shall pass to another qualified entity. (14) The agricultural conservation easement has been approved as to form by the City of Tulare. (E) Division (D) does not prevent inclusion in an agricultural conservation easement of requirements that are more protective of agricultural use than the requirements set forth in that division.
(F) Before approving any alternative mitigation option, the City CouncilCommunity Development Director or designee shall determine that such option is consistent with the requirements in§

10.222.070(C) and§ 10.222.070(0).
(G) After the City CouncilCommunity Development Director or designee has approved an agricultural conservation easement, the easement shall not be amended without further approval by the City CouncilCommunity Development Director, approval as to form by the City Attorney, and compliance with any approval requirements imposed by the Attorney General of the State of California for the amendment.
(H) If a court issues a judgement declaring that the purposes of this chapter and of an agricultural conservation easement can no long,er be fulfilled by enforcement of that easement, the qualified entity holding that easement may extinguish the easement by selling it to the fee owner of the mitigation land, if the following requirements are met:

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(1) Either the action was contested and the judgement was not entered pursuant to stipulation, or the City of Tulare was a party to the action and stipulated to the judgement; and (2) The qualified entity shall use the proceeds of sale to acquire an agricultural conservation easement in other mitigation land in compliance with this chapter. (Ord. 20-03, passed 2-18-2020)
§ 10.222.080 Requirements for qualified entities.
(A) To be considered a qualified entity, an entity must be a nonprofit public benefit corporation, operating within the state of California, the state or any city, county, city and county, district, or other state or local governmental entity, if otherwise authorized to acquire and hold title to real property and if the conservation easement is voluntarily conveyed, a federally recognized California Native American tribe or a nonfederally recognized California Native American tribe that is on the contact list maintained by the Native American Heritage Commission to protect a California Native American prehistoric, archaeological, cultural, spiritual, or ceremonial place, if the conservation easement is voluntarily conveyed, and that is qualified to hold conservation easements under § 815.3 of the Cal.

Civil Code and in compliance with the requirements of§ 65965 et seq. of the Cal. Gov't Code, and be approved by the City CouncilCommunity Development Director or designee for the purpose of holding and managing agricultural conservation easements. (B) In considering whether to approve an entity as a qualified entity, the City CouncilCommunity Development Director or designee shall consider the following criteria:
(1) Whether the entity's principal purpose includes holding and administering easements for the purposes of conserving and maintaining lands in agricultural production; (2) Whether the entity has an established record of holding and administering easements for the purposes of conserving and maintaining lands in agricultural production; (3) The extent and duration of the entity's involvement in agricultural land conservation within the San Joaquin Valley, specifically Tulare County;
(4) Whether the entity has been accredited by the Land Trust Accreditation Commission; (5) Whether the entity is a member in good standing of an established and widely recognized California statewide association of land trusts; and
(6) Any other information or requirements the city finds relevant under given circumstances. (C) No qualified entity shall sell, lease, hypothecate, or encumber any interest in any mitigation land without the prior approval of the City CouncilCommunity Development Director or designee. (D) A qualified entity shall use fees provided by an applicant solely for purposes of acquiring, administering, monito9ring, and enforcing agricultural conservation easements acquired pursuant to this chapter.
(E) If a qualified entity intends or reasonably expects to cease operations, it shall assign any agricultural conservation easements it holds to another qualified entity. (F) The qualified entity shall monitor the use of all mitigation land subject to agricultural conservation easements held by the entity and enforce compliance with the terms of those agricultural conservation easements.

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(G) On or before December 31 of each year after a qualified entity is approved by the City CouncilCommunity Development Director, the entity shall provide to the City of Tulare Planning Division an annual report describing the activities undertaken by the entity under this chapter. That report shall describe the status of the mitigation land and/or agricultural conservation easements held by the entity, including a summary of all action taken to enforce its agricultural conservation easements, and an accounting of the use of administrative and in-lieu fees remitted to it by applicants.
(Ord. 20-03, passed 2-18-2020)
§ 10.222.090 Approval and completion.
(A) All mitigation proposed by an applicant to comply with this chapter, including any alternative mitigation option proposed by the applicant, shall be reviewed by the Planning Commission for consistency with the terms and purposes of this chapter. The Planning Commission shall recommend approval, conditional approval, or disapproval to the City Council. The Planning Commission shall not recommend approval of the proposed mitigation unless it finds that mitigation to be consistent with the requirements for mitigation land and agricultural conservation easements set forth in § 10.222.070. (B) The City Council shall consider the Planning Commission's recommendation and shall either approve, conditionally approve, or disapprove the proposed mitigation. (C) The City of Tulare shall not issue any permit or other approval for any project involving a conversion subject to the mitigation obligation under this chapter unless the City Council has previously approved proposed mitigation in compliance with this chapter. Issuance of any such permit or approval shall be conditioned on the applicant's completion of mitigation in compliance with §

10.222.090(0D) and (E).
(D) The applicant for conversion must complete all required mitigation prior to the earliest of either:
(1) Approval of any parcel map or final subdivision map; or (2) Issuance of any building, grading, or encroachment permit allowing for installation of underground utilities; or
(2)(3) Where changes are made that are irreversible and prohibitive of the converted farmland to be returned to agriculturally productive use.
(E) Mitigation shall be deemed complete when the approved agricultural conservation easement has been recorded and the applicant has paid the required administrative fee. However, if the applicant elects to seek approval of an alternative mitigation option, mitigation shall be deemed complete when the City of Tulare provides the applicant with a letter indicating that mitigation is complete.
(Ord. 20-03, passed 2-18-2020)
§ 10.222.100 Miscellaneous.
(A) The provisions of this chapter shall only apply to the extent that their application would not violate the constitution or laws of the United States, or of the State of California. The City Council shall apply the chapter to avoid such unconstitutionality or illegality. (B) If any portion of this chapter is held to be unconstitutional, such decision shall not affect the Agenda Packet for February 4, 2025 Page 66
validity of the remaining portions of this chapter. The City Council declares that it would have enacted this chapter and each section, division, paragraph, sentence, clause, or phrase thereof even if a portion of the chapter were declared unconstitutional.
(C) Nothing in this chapter shall be construed to abridge or narrow the City of Tulare's police powers. The City Council retains its full power and discretion its ability to deny a proposed conversion on the basis that the proposed conversion is inconsistent with the public health, safety, or welfare because of the loss of agricultural land or otherwise, which the city is tasked with safeguarding. (Ord. 20-03, passed 2-18-2020)
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3. Potential for City-Owned Mitigation Land Bank
Based on the experience of both the City of Tulare and the City of Dixon, it appears that the only effective way to acquire conservation easements to provide agricultural land mitigation for new development in Tulare may be for developers or the City to acquire agricultural land outright and then place conservation easements on that land.

If the City were to create a mitigation land bank covered by conservation easements, it could allow developers to acquire rights to land within the land bank to satisfy the City's farmland mitigation requirements by paying in-lieu fees to the City. One proposed change to the City's farmland mitigation ordinance would allow the City to serve as a "qualified entity" to acquire and hold agricultural conservation easements.

If the City holds land in a mitigation land bank, that land could be leased to agricultural producers and the income generated by the leases would serve as an endowment to maintain the easements in perpetuity and potentially provide funds for other purposes such as restoration and/or improvements to critical habitat in the vicinity of Tulare.

For the City to carry out such a program, the in-lieu fees would have to be set at a level that would cover the cost of outright land purchases so that additional mitigation land could be acquired as portions of the land bank are committed to developers. Implementation of California's Sustainable Groundwater Management Act (SGMA) was enacted in 2014. The planning deadline for first round of Groundwater Sustainability Plans was January 31, 2020. SGMA may limit the value of agricultural land that does not have access to water sources other than groundwater and create opportunities for the City to purchase qualifying agricultural land at prices that would make such a program feasible.

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4. Existing City-Owned Farm Land
The greatest obstacle to creation of a mitigation land bank by the City would be the up-front cost of the initial land purchases. Fortunately, the City of Tulare owns a substantial amount of agricultural land near its wastewater treatment plant. A portion of that land is set aside for future expansion of the plant, but those holdings include 586.47 acres that would not be needed for future plant expansion and could be set aside as an initial mitigation land bank. (See the map of those holdings on the next page.) The City could grant a conservation easement on that land and then make mitigation land within the land bank available to developers to satisfy the City's farmland mitigation requirement in exchange for the payment of in-lieu fees.

Over time, the City could use those in-lieu fees to acquire additional agricultural land to expand the program as needed.

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5. Amount of In-Lieu Fee
Another question that must be answered in establishing a mitigation land bank is, how would the amount of the in-lieu fee be set? In 2024, the City engaged a local commercial real estate broker, Craig Smith & Associates, to survey sales of farmland in the vicinity of Tulare and compile a list of comparable sales.

In a letter to the City Manager, Craig Smith & Associates provided a list of five sales of open row crop land.

Of the five, there was one sale for $6,837 per acre and one for $12,999 per acre. The other three sales were in the $9,500 to $10,000 per acre range. (The letter from Craig Smith & Associates showing the comparable farmland sales is attached at the end of this report.) Based on the prices for comparable land sales shown above, we recommend that Tulare set its in-lieu fee at a minimum of $6,900 per acre, which approximates the lowest price per acre shown in the comparable sales report.

The other similar farmland mitigation program we are aware of in California is in the City of Dixon, CA. The agricultural land mitigation in-lieu fee in Dixon is currently set at $6,410 per acre plus a 2.5% administration fee.

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ORDINANCE 2025-XX

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TULARE
REPEALING AND REENACTING CHAPTER 10.222 (FARMLAND MITIGATION) OF THE

TULARE MUNICIPAL CODE
WHEREAS, the City Council of the City of Tulare, at a regular meeting held February 4, 2025, considered a request to revise Zoning Ordinance Section 10.222; and WHEREAS, the City Council of the City of Tulare determined that the proposed amendment is in the public interest; and
WHEREAS, the City Council of the City of Tulare determined that the proposed amendments are consistent and compatible with the general plan and implementation programs which may be affected; and
WHEREAS, the City Council of the City of Tulare determined that the proposed request will not be detrimental to the public health, safety, and welfare or be materially injurious to properties or improvements in the vicinity; and
WHEREAS, at a duly noticed public hearing on January 13, 2025, the Planning Commission of the City of Tulare reviewed and recommended that the City Council adopt Zone Amendment No. 757 approving revisions to the City of Tulare’s Farmland Mitigation Ordinance (Chapter 10.222 of the City of Tulare Municipal Code); and WHEREAS, the proposed Zone Amendment is exempt from Environmental Review under the California Environmental Quality Act (CEQA), pursuant to Sections 15061(b)(3) - Common Sense Exemption.

NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Tulare as follows:

SECTION 1. Chapter 10.222 of the Tulare Municipal Code is hereby repealed and reenacted and shall read as follows:

Chapter 10.222: Farmland Mitigation
Section

10.222.010 Title.

10.222.020 Purpose and intent.

10.222.030 Objectives.

10.222.040 Definitions.

10.222.050 Mitigation obligation.

10.222.060 Optional mitigation alternatives.

10.222.070 Requirements for mitigation land and agricultural conservation easements.

10.222.080 Requirements for qualified entities.

10.222.090 Approval and completion.

10.222.100 Miscellaneous.

10.222.010 Title.

This chapter may be cited as the “Farmland Mitigation Ordinance” of the City of Tulare.

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10.222.020 Purpose and intent.

The purpose of this chapter is to set forth the specific criteria and guidelines, consistent with the City of Tulare (Tulare) General Plan policies for the mitigation of agricultural land converted to non agricultural uses, within the city's urban development boundary (UDB) and outside the city limits. The intent of this chapter is to protect the City of Tulare's agricultural lands from conversion to non agricultural uses.

10.222.030 Objectives.

The objectives of this chapter are as follows:
(A) Protect agriculture as a crucial component of Tulare's economy and cultural heritage; (B) Protect and preserve agricultural lands from the effects of urban encroachment; (C) Balance the need for agricultural land conservation with other public goals in Tulare, including the need for housing, commercial, industrial, and infrastructure development; and
(D) Foster coordination and cooperation by the City of Tulare with the County of Tulare, Local Agency Formation Commission, and neighboring cities, including the City of Visalia, to facilitate an integrated and comprehensive regional approach to agricultural land conservation.

10.222.040 Definitions.

AGRICULTURAL CONSERVATION EASEMENT. A A perpetual easement or servitude, comparable to a conservation easement, as provided for in§§ 815 to 816 of the Cal. Civil Code, or an open space easement, provided for in §§ 51070 to 51097 of the Cal. Gov't Code, limiting the use of the encumbered land to agricultural and accessory uses, which easement or servitude is used to satisfy the mitigation obligation imposed by this chapter.

AGRICULTURAL USE. Use of land to produce food, fiber, or livestock for commercial purposes.

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CHAPTER. Chapter includes all sections and provision within this Farmland Mitigation Ordinance.

CITY COUNCIL. The City Council of the City of Tulare.

CONVERSION. Those conversions of land requiring mitigation as identified in § 10.222.040.

LEGISLATIVE BODY. A jurisdiction's decision-making body.

QUALIFIED ENTITY. An entity qualified and approved to hold agricultural conservation easements in compliance with § 10.222.080 of this chapter.

10.222.050 Mitigation obligation.

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(A) As mitigation for the conversion of critical farmland, the applicant shall arrange for the imposition of an agricultural conservation easement on no less than one acre of mitigation land for each acre of land proposed for conversion. The applicant shall convey, or arrange for the conveyance of, such agricultural conservation easement to a qualified entity. The mitigation land shall be comparable to the land proposed for conversion, as provided in § 10.222.070 of this chapter. (B) For the purposes of calculating the mitigation obligation under § 10.222.050(A), the area requiring mitigation shall be the full area of the legal parcel affected by conversion and not merely any lesser portion of the parcel that may be sought to be developed or converted to another use at the time conversion is proposed. (C) The applicant shall pay to the qualified entity an administrative fee sufficient to compensate for all administrative costs reasonably necessary for the qualified entity to acquire and hold the agricultural conservation easement and implement this chapter, including all of the following:
(1) Establishment of an endowment to provide for monitoring, administration, enforcement, and all other services necessary to ensure that the conservation purposes of the agricultural conservation easement are maintained in perpetuity; and
(2) The qualified entity's administrative costs in evaluating the mitigation land and reviewing and accepting the agricultural conservation easement. (D) It is the applicant's responsibility to identify, propose for approval mitigation land, and arrange for imposition of an agricultural conservation easement that satisfies the requirements in § 10.222.070 of this chapter.
(E) Nothing in this chapter shall be construed to compel an applicant for conversion to convey to the City of Tulare or to a qualified entity an agricultural conservation easement in property owned by the applicant.
(F) The mitigation obligation set forth in this chapter shall not apply to a legal parcel that is less than one acre in area. However, this exemption shall not apply to a parcel that is one phase or portion of a larger project. The City of Tulare may disallow the use of this exemption if it finds that the subject property has been subdivided into one-acre or smaller parcels in whole or in part to avoid the mitigation obligation. (G) The following public uses are exempt from the mitigation obligation imposed by this chapter: public parks or public recreational facilities, permanent natural open space, and trails and developed open space that are open to the public. (H) Projects designed solely to preserve, create, or enhance wildlife habitat on agricultural land shall be exempt from the mitigation obligation in this chapter. (I) At its sole option, an applicant may choose to arrange for the imposition of an agricultural conservation easement on a larger area of land than the area of land proposed for conversion and thereby generate a mitigation credit equal to the excess net acreage encumbered with the easement.
(J) Any excess area encumbered with the agricultural conservation easement shall fully comply with all requirements of this chapter and shall be comparable to the land Agenda Packet for February 4, 2025 Page 84
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proposed for conversion to the same degree as the portion of the land offered to satisfy the mitigation obligation in this chapter, including, but not limited to, the requirements for mitigation land in § 10.222.070 and the review and approval process in § 10.222.090. (K) The administrative fee paid by an applicant choosing to create mitigation credits shall include the acreage covered by the mitigation credits. The applicant may pass that fee through to a later purchaser of the credits.
(L) Mitigation credits created under this chapter may be conveyed and used as provided in § 10.222.060.
(M) The qualified entity shall maintain a ledger indicating:
(1) The amount of credits created under this section;
(2) The holder of those credits;
(3) The administrative fees paid by the creator of the credits attributable to the mitigation land covered by the credits; and
(4) Any subsequent transactions involving those credits. (N) Exemptions. The following land uses are exempt from the mitigation requirements of this article:
(1) The following projects: permanently affordable housing, public schools, community farms & gardens, land conserved in a natural state and habitat for native plants or wildlife, and public trails or parks.
(2) Small projects, as defined in Section 10.222.040.

10.222.060 Optional mitigation alternatives.

As an alternative to providing the mitigation required by this chapter, the applicant may choose to seek approval to implement one of the following alternative mitigation options. (A) As authorized by the City of Tulare, an applicant for conversion of critical farmland may satisfy the mitigation obligation set forth in this chapter by paying to a qualified entity a fee in lieu ("in-lieu fee") of conveying an agricultural conservation easement. (B) Any in-lieu fee shall include each of the following components:
(1) The purchase price of an agricultural conservation easement in mitigation land that complies with all of the requirements in § 10.222.070. This component shall be adjusted for inflation based on estimate of the time required to acquire mitigation land following payment of the fee.
(2) All transaction costs associated with acquisition of the agricultural conservation easement.
(3) An amount sufficient to endow the cost of monitoring, administering, and enforcing the agricultural conservation easement in perpetuity. (4) The applicant's pro rata share of the qualified entity's administrative costs in implementing the in-lieu fee program.
(5) A reasonable amount to cover additional contingencies. (C) In no event shall the in-lieu fee established pursuant to this section exceed a reasonable estimate of the total of:
(1) The cost of acquiring and managing the agricultural conservation easement that the applicant would otherwise be required to create to satisfy its mitigation obligation under this chapter; and
(2) The cost of administering the in-lieu fee.

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(D) In-lieu fees received by the qualified entity shall be expended solely for the purpose of acquiring and managing agricultural conservation easements in mitigation land that meets the criteria set forth in § 10.222.070 and funding the qualified entity's cost of implementing the in-lieu fee program.
(E) If authorized by the City of Tulare, an applicant for conversion of critical farmland may satisfy the mitigation obligation set forth in this chapter by acquiring mitigation credits created under§ 10.222.050(1), (J) and (K), which are permitted to be passed through to another purchaser.
(F) The city, in conjunction with a qualified entity, shall make available to any applicant who requests it, the ledger of mitigation credits provided for in § 10.222.050(M). The City of Tulare shall have no further responsibility for facilitating any private transaction involving mitigation credits.
(G) Mitigation credits may be used to satisfy the mitigation obligation created by this chapter only after the Community Development Director or designee has made the findings required by § 10.222.070 with respect to the land proposed for conversion and the mitigation land covered by the mitigation credits.
(H) An applicant choosing to use mitigation credits to comply with this chapter shall pay the qualified entity administering the credits a fee in the amount equivalent to the inflation adjustment on the administrative fee that the creator of the mitigation credits originally paid pursuant to § 10.222.050(K), if in fact the creator of the mitigation credits passed through the administrative fee for the creation of the credits to a future purchaser of those credits.
(I) An applicant proposing conversion of critical farmland may propose an alternative method of mitigation for review and approval by the Community Development Director or designee subject to satisfying all of the following criteria:
(1) The proposed mitigation must result in permanent protection of mitigation land; (2) The applicant must bear all costs of reviewing, approving, managing, and enforcing the mitigation;
(3) The proposed mitigation must be in substantial compliance with the requirements for mitigation land and agricultural conservation easements set forth in §

10.222.070; and
(4) The proposed mitigation must be in all respects at least as protective of agricultural land as the mitigation required by this chapter. (J) The mitigation obligation imposed by this chapter is that set forth in § 10.222.050. Each alternative mitigation option in this section (§ 10.222.060) is wholly optional and made available solely for the applicant's convenience. Under no circumstances shall the City of Tulare require any applicant to implement any such alternative mitigation option, if applicant is willing to implement the mitigation obligations imposed in § 10.222.050.

10.222.070 Requirements for mitigation land and agricultural conservation easements. (A) Agricultural conservation easements in mitigation land shall be held in perpetuity by a qualified entity as defined in § 10.222.080.
(B) Mitigation land shall be comparable in nature to the agricultural land proposed for Agenda Packet for February 4, 2025 Page 86
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conversion. A mitigation land is deemed comparable in nature if it complies with the below requirement under§ 10.222.070(C).
(C) The Community Development Director or designee shall not approve proposed mitigation for conversion of Critical Farmland unless it finds that the mitigation land complies with each of the following requirements:
(1) The mitigation land is located in the San Joaquin Valley, outside of any city's limits or sphere of influence, with preference given to mitigation land within ten miles of the City of Tulare limits.
(2) The mitigation land is subject to an agricultural designation in the General Plan and zoned for agricultural use. Any legal nonconforming use of the mitigation land has been or will be abandoned prior to execution of the agricultural conservation easement, or if maintained, will not interfere with agricultural use of the mitigation land.
(3) The mitigation land consists of one or more legal parcels of at least ten net acres in size, exclusive of the area occupied by any existing home and the area of any road or right-of-way easement, unless the land proposed for conversion is smaller than ten acres.
(4) The soil quality of the mitigation land has the agricultural productive capacity at least equal to that of the critical farmland proposed for conversion. (5) The available water supply for the mitigation land is at least equal to that of the land proposed for conversion in terms of quantity, quality, and security. (6) The mitigation land is not already subject to an encumbrance or interest that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use, such as a conservation easement, open space easement, flowage easement, avigation easement, long term agricultural lease, profit, or an interest in the subsurface estate that would preclude development of the surface estate. A contract entered pursuant to the Land Conservation Act, Cal. Gov't Code § 51200 et seq. (Williamson Act) shall not constitute an encumbrance for purposes of this section. However, this is not to prevent the stacking of an agricultural conservation easement, with other encumbrances, easements, or interests in the property, so long as the multiple encumbrances do not contradict or prevent the effectiveness of each independent encumbrance for which the land is conserved in perpetuity.
(7) There are no physical conditions or contamination on the mitigation land that would legally or practicably prevent converting the land, in whole or in part, to a nonagricultural use.
(8) The mitigation land has no existing home, unless the land proposed for conversion includes an existing home.
(D) The Community Development Director or designee shall not approve proposed mitigation land unless it finds that the agricultural conservation easement complies with each of the following requirements:
(1) The type of agricultural related activity allowed on the mitigation land is specified in the easement and is at least as restrictive as the requirements of the City of Tulare's Open Space/Agriculture (A) Zoning District.
(2) The agricultural conservation easement prohibits all residential, commercial, or industrial development and any other land uses or activities that substantially impair or diminish the agricultural productive capacity of the mitigation land or that are otherwise inconsistent with the conservation purposes of this chapter.

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(3) The agricultural conservation easement prohibits the landowner from entering into any additional easement, servitude, or other encumbrance that could prevent or impair the potential agricultural use of the mitigation land. (4) The agricultural conservation easement limits the construction of structures to those designed to facilitate agricultural use of the property, except that this division shall not prohibit replacement of an existing home allowed by §

10.222.070(C)(10).
(5) The easement provides that the mitigation land will retain water rights at least equal to that of the land proposed for conversion in terms of quantity, quality, and security.
(6) The agricultural conservation easement will be either obtained from a willing seller or voluntarily conveyed by the applicant.
(7) Any existing easement, other than a right-of-way easement, deed of trust, or other servitude or encumbrance on the mitigation land shall be subordinated to the agricultural conservation easement.
(8) The agricultural conservation easement shall be approved by the qualified entity that will hold the easement and executed by all parties with an interest in the mitigation land.
(9) The agricultural conservation easement is in recordable form and contains an accurate legal description of the mitigation land.
(10) The agricultural conservation easement names the qualified entity as an intended beneficiary and authorizes it to enforce all terms of the easement. (11) The agricultural conservation easement recites that it is intended to satisfy the mitigation obligation imposed by this chapter and that it is subject to the requirements set forth in this chapter.
(12) If the agricultural conservation easement is an instrument other than a conservation easement created under §§ 815 to 816 of the Cal. Civil Code or an open space easement created under §§ 51070 to 51097 of the Cal. Gov't Code, both the qualified entity and the City of Tulare have certified that the easement will run with the land and bind successor owners of the mitigation land in perpetuity.
(13) The agricultural conservation easement provides that if the qualified entity holding the easement ceases to exist, ownership of the easement shall pass to another qualified entity.
(14) The agricultural conservation easement has been approved as to form by the City of Tulare.
(E) Division (D) does not prevent inclusion in an agricultural conservation easement of requirements that are more protective of agricultural use than the requirements set forth in that division.
(F) Before approving any alternative mitigation option, the Community Development Director or designee shall determine that such option is consistent with the requirements in§ 10.222.070(C) and§ 10.222.070(D).
(G) After the Community Development Director or designee has approved an agricultural conservation easement, the easement shall not be amended without further approval by the Community Development Director, approval as to form by the City Attorney, and compliance with any approval requirements imposed by the Attorney General of the State of California for the amendment.

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(H) If a court issues a judgement declaring that the purposes of this chapter and of an agricultural conservation easement can no longer be fulfilled by enforcement of that easement, the qualified entity holding that easement may extinguish the easement by selling it to the fee owner of the mitigation land, if the following requirements are met:
(1) Either the action was contested and the judgement was not entered pursuant to stipulation, or the City of Tulare was a party to the action and stipulated to the judgement; and
(2) The qualified entity shall use the proceeds of sale to acquire an agricultural conservation easement in other mitigation land in compliance with this chapter.

10.222.080 Requirements for qualified entities.
(A) To be considered a qualified entity, an entity must be a nonprofit public benefit corporation, operating within the state of California, the state or any city, county, city and county, district, or other state or local governmental entity, if otherwise authorized to acquire and hold title to real property and if the conservation easement is voluntarily conveyed, a federally recognized California Native American tribe or a nonfederally recognized California Native American tribe that is on the contact list maintained by the Native American Heritage Commission to protect a California Native American prehistoric, archaeological, cultural, spiritual, or ceremonial place, if the conservation easement is voluntarily conveyed, and that is qualified to hold conservation easements under § 815.3 of the Cal. Civil Code and in compliance with the requirements of§ 65965 et seq. of the Cal. Gov't Code, and be approved by the Community Development Director or designee for the purpose of holding and managing agricultural conservation easements.
(B) In considering whether to approve an entity as a qualified entity, the Community Development Director or designee shall consider the following criteria:
(1) Whether the entity's principal purpose includes holding and administering easements for the purposes of conserving and maintaining lands in agricultural production;
(2) Whether the entity has an established record of holding and administering easements for the purposes of conserving and maintaining lands in agricultural production;
(3) The extent and duration of the entity's involvement in agricultural land conservation within the San Joaquin Valley, specifically Tulare County; (4) Whether the entity has been accredited by the Land Trust Accreditation Commission;
(5) Whether the entity is a member in good standing of an established and widely recognized California statewide association of land trusts; and (6) Any other information or requirements the city finds relevant under given circumstances.
(C) No qualified entity shall sell, lease, hypothecate, or encumber any interest in any mitigation land without the prior approval of the Community Development Director or designee.
(D) A qualified entity shall use fees provided by an applicant solely for purposes of acquiring, administering, monitoring, and enforcing agricultural conservation easements acquired pursuant to this chapter.
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agricultural conservation easements it holds to another qualified entity. (F) The qualified entity shall monitor the use of all mitigation land subject to agricultural conservation easements held by the entity and enforce compliance with the terms of those agricultural conservation easements.
(G) On or before December 31 of each year after a qualified entity is approved by the Community Development Director, the entity shall provide to the City of Tulare Planning Division an annual report describing the activities undertaken by the entity under this chapter. That report shall describe the status of the mitigation land and/or agricultural conservation easements held by the entity, including a summary of all action taken to enforce its agricultural conservation easements, and an accounting of the use of administrative and in-lieu fees remitted to it by applicants.

10.222.090 Approval and completion.
(A) All mitigation proposed by an applicant to comply with this chapter, including any alternative mitigation option proposed by the applicant, shall be reviewed by the Planning Commission for consistency with the terms and purposes of this chapter. The Planning Commission shall recommend approval, conditional approval, or disapproval to the City Council. The Planning Commission shall not recommend approval of the proposed mitigation unless it finds that mitigation to be consistent with the requirements for mitigation land and agricultural conservation easements set forth in § 10.222.070. (B) The City Council shall consider the Planning Commission's recommendation and shall either approve, conditionally approve, or disapprove the proposed mitigation. (C) The City of Tulare shall not issue any permit or other approval for any project involving a conversion subject to the mitigation obligation under this chapter unless the City Council has previously approved proposed mitigation in compliance with this chapter.

Issuance of any such permit or approval shall be conditioned on the applicant's completion of mitigation in compliance with § 10.222.090(D) and (E). (D) The applicant for conversion must complete all required mitigation prior to the earliest of either:
(1) Approval of any parcel map or final subdivision map; or (2) Issuance of any building, grading, or encroachment permit allowing for installation of underground utilities; or
(3) Where changes are made that are irreversible and prohibitive of the converted farmland to be returned to agriculturally productive use. (E) Mitigation shall be deemed complete when the approved agricultural conservation easement has been recorded and the applicant has paid the required administrative fee.

However, if the applicant elects to seek approval of an alternative mitigation option, mitigation shall be deemed complete when the City of Tulare provides the applicant with a letter indicating that mitigation is complete.

10.222.100 Miscellaneous.
(A) The provisions of this chapter shall only apply to the extent that their application would not violate the constitution or laws of the United States, or of the State of California. The City Council shall apply the chapter to avoid such unconstitutionality or illegality.

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(B) If any portion of this chapter is held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this chapter. The City Council declares that it would have enacted this chapter and each section, division, paragraph, sentence, clause, or phrase thereof even if a portion of the chapter were declared unconstitutional. (C) Nothing in this chapter shall be construed to abridge or narrow the City of Tulare's police powers. The City Council retains its full power and discretion its ability to deny a proposed conversion on the basis that the proposed conversion is inconsistent with the public health, safety, or welfare because of the loss of agricultural land or otherwise, which the city is tasked with safeguarding.

SECTION 2. If any section, subsection, sentence, clause, or phrase of this ordinance is, for any reason, held to be invalid or unconstitutional, such decision shall not affect the validity of the other remaining portions of this ordinance. The City Council hereby declares that it would have passed this ordinance and each section, subsection, sentence, clause, or phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, or phrases be declared invalid or unconstitutional.

SECTION 3. Pursuant to Section 15 of the Charter of the City of Tulare, it is ordered that a summary of this ordinance be issued in a daily newspaper of general circulation in the City of Tulare for one day and that the ordinance be available in at least one public place at the City offices. This ordinance shall be in full force and effect 30 days from and after the date of its adoption.

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Tulare this XX day of XXXX 202X.

Patrick Isherwood, President of the Council
and Ex-Officio Mayor
ATTEST:

Marc Mondell, City Clerk
By Melissa Hermann, Chief Deputy City Clerk
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Staff Report
Meeting: City Council
Date: February 4, 2025
Department: City Manager
Submitted by: Marc Mondell, City Manager
Agenda Title: Temporary Encampment Facility Operational Plan and Related Costs

RECOMMENDED ACTION
Approve a new twelve-month operational plan and budget for the Temporary Encampment Facility; and authorize the City Manager and/or his designee(s) to establish the necessary contracts and/or grant agreements to fulfill the operational plan and related budget expectations where feasible.

SUMMARY
The temporary encampment facility may continue to serve as a primary point of access to basic amenities and services for unhoused people from the City. Though after two years of operation, it is recommended that the City Council consider a range of operation plans and adjust the service levels and corresponding local financial commitments to sustain this facility through at least December 2025. As such, the temporary encampment facility may continue to afford benefits for unhoused people and the overall community until a point at which the future emergency shelter is able to function at or near full capacity.

The Community Services Department led day-to-day operations of the encampment, together with input and support from staff within the Public Works; Community Development; Office of Safety, Compliance & Facilities; Fire; and Police Departments, respectively. Based on contract and billing information, staff prepared Table 1, included on Attachment 1, to illustrate the array of City and grant funded services available to guests of the encampment. Table 1 provides information on the basic and professional service’s type, average monthly cost, funding source, and anticipated end date when applicable. Through December 2024, the total cost per month of operating the encampment with diverse basic and professional client services is about $108,470. About sixty-three percent of this total cost is paid through state and federal grants including the Encampment Resolution Funding (ERF), Homeless Housing and Assistance Program (HHAP), Community Development Block Grant (CDBG), and Homeless Housing Incentive Program (HHIP) sources. All services provided through grants will subside at different points between March and July of this year.

To establish a plan and budget for the temporary encampment facility between now and the opening of the City’s emergency shelter, City Management and staff prepared three, though not exclusive, operational plans for City Council to consider. The ongoing demand to address unsheltered homelessness and the forthcoming change to grant financed services require that City staff receive proper direction on how to operate the temporary encampment facility through an additional period of time. Table 2 presents three plans (e.g. A, B, C) that are distinguishable by the type and degree of services. See Attachment 2 to review details and compare the plans. Plan A involves a continuation of the current services, those administered by the City and third-party entities with minimal programmatic and budget changes. Plan B represents a shift to largely the provision of basic services, where the City is responsible, if not entirely, for the delivery and related costs of services. Plan C will maintain most of Item #: 15.2
General Business
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the basic services, though will require adjustments to each professional client service to alter their scope and minimize related expenses.

Table 2 – Overview of Different Operational Plans (Detailed Version within Attachment 2) Service Name
Plan A –
Maintain All Current
Services
Plan B –
Provide Largely Basic
Services
Plan C -
Mix of Basic and
Professional Services
with Modifications
Total Monthly Cost
by Option
$108,470.00 $48,370.00 $68,758.00
Annual Cost by
Option
$1,301,640.00 $580,440.00 $825,096.00
In addition to consideration of three different plans, City staff also prepared cost estimates for increasing on-site staffing and establishing a guest and visitor check-in system at the encampment. Table 3 provides a brief overview of different staffing options as well as the approximate cost to construct a new building to be placed at one of the encampment entrances. The presented costs are either expressed as monthly or one-time occurrences. Altogether, these options, if selected, involve an additional expense to the City in excess of the total estimated cost of a particular operational plan.

During future City Council meetings, Council members will review, and may approve, the obligation of one or more grants for the provision of particular services, such as the provision of case management and interim housing beds for unhoused people with behavioral health needs. For example, staff will bring a proposal involving Behavioral Health Bridge Housing (BHBH) Program funds within the next one to two months for Council’s consideration. A proposal for the BHBH Program may only reimburse the City and a service provider for expenses relating to behavioral health assessment, housing navigation, and Agenda Packet for February 4, 2025 Page 93
operating costs of interim housing. The temporary encampment does not provide emergency, interim, or permanent housing. As such, the City may only expect a minimal application of BHBH to general operating costs of the temporary area, such as $100,000 to $200,000 for third-party professional staff delivering a BHBH eligible program for particular guests of the temporary encampment. The overall fiscal impact of the BHBG Program and other grant sources will vary depending on the operational plan and additional options approved by City Council. Staff contend that less than half of the total expenses over a twelve-month period will be reimbursable to a grant program.

FISCAL IMPACT & FUNDING SOURCE(S)
City Temporary Encampment Area (Fund 601)

LEGAL REVIEW
This item does not require legal review as presented. Depending on City Council action, the City Attorney may review new or extended contracts and service agreements as part of fulfilling an operational plan.

ALTERNATIVE ACTION

1. Approve with changes: City Manager and designee(s) will implement an operational plan with modifications to one or several of the individual services within or in addition to an operational plan.

2. Deny: City Manager and designee(s) will oversee existing contracts and service agreements related to the temporary encampment until their term and/or budget expires without future actions to renew and extend basic and/or professional services.

3. Table: Reschedule consideration of this item to a future City Council meeting.

ATTACHMENTS

1. Table 1 – Overview of Current Services and Related Costs Related to the Temporary Encampment Facility

2. Table 2 – Overview of Different Operational Plans and Their Estimated Costs (Detailed Version) Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 94
Service Type Average
Monthly Cost
Funding
Source
Service End
Date (if
applicable)
Notes
Electricity $ 462.00 City
Solid Waste
Removal $ 4,176.00 City
Three six-yard bins serviced five
times per week; ERF-2 Grant
covered $41,040 in expenses
through October 2024
Water and Sewer
Fees City Not currently tracked
Portable Restrooms
and Handwashing
Stations $ 7,765.00 City
10 individual restrooms and 2
handwashing stations serviced 2
times per week; $74,520 of ERF2 grant funds exhausted through August 2024
Third-Party Waste
Collection &
Disposal Service $ 3,943.00 City
2 days per month with heavy
equipment and a contractor
clearing drive paths, rows, and
vacant sites
Third-Party Security
Guard Service $ 5,612.00 City
One security guard with a nine
hour daily shift from the evening
to early monring.

Donation
Coordination and
Gap Food Service
with Salt+Light $ 1,600.00 City
Assist City staff with developing
a monthly food service calendar
as well as sorting and
distribution of donations
Guest Supplies $ 9,850.00 City
Includes regularly replenishment
of tents, sleeping bags, dog
leashes, trash bags, and other
items.

Facility
Maintenance $ 900.00 City
Includes repairs of water faucets,
fencing, signage, equipment, and
additional cleaning service
Encampment
Attendant $ 5,612.00 City
One full-time contract employee
managing all day-to-day
registration, guest relationship,
cleanup, etc.

Office Supplies $ 50.00 City
Replenish paper, pens, tools, and
gear for contract staff
Case Management
and Housing
Navigation Service
with Kings Tulare
Homeless Alliance $ 11,000.00 ERF-2 Grant 4/30/2025
Involves two full-time employees
with an added guest
transportation role
Table 1 1
Agenda Packet for February 4, 2025 Page 95
Case Management
and Housing
Navigation Service
with Kings View $ 8,000.00 ERF-2 Grant 7/31/2025
Involves one and a half full-time
employees
Case Management
and Housing
Navigation Service
with Salt+Light
Works $ 7,500.00 CDBG Grant 6/30/2025
Involves one and a half full-time
employees
Food and Palliative
Supplies Service
with Salt+Light
Works $ 18,000.00 ERF-2 Grant 3/31/2025
Involves about three full-time
employees preparing a menu,
coordinating volunteers, and
managing an inventory for 120
guests at 3 days per of service
weekly
Shower and Hygiene
Service with Clean
the World $ 24,000.00 HHIP Grant 3/31/2025
Involves one and a half full-time
employees managing all
operations and maintenance of a
four stall shower trailer with 3
days of service per week
Subtotal - Monthly
Costs to City
General Fund
$ 39,970.00
Subtotal - Monthly
Costs Covered by
Grants
$ 68,500.00
Total Monthly Costs 108,470.00 $
Monthly Cost Per
Guest $ 868
Table 1 2
Agenda Packet for February 4, 2025 Page 96
Service Type
Plan A -
Maintain All
Current
Services
Plan B - Provide
Largely Basic
Services
Plan C - Mix of
Basic &
Professional
Services with
Changes
Notes
Utilities (eletricity,
waste removal, etc) Yes Yes Yes
Portable Restrooms
and Handwashing
Stations
Yes Yes Yes
Third-Party Waste
Collection &
Disposal Service
Yes Yes No
For Option C - City assumes
responsibility for all
encampment cleanup
Third-Party Security
Guard Service
Yes Yes No
For Option C - City will disband
use of an overnight security
guard and implement alternative
staffing
Donation
Coordination and
Gap Food Service
with Salt+Light
Works
Yes No No
For Options B and C - City and/or
volunteers manage all donations
and fulfill gaps in food service
where feasible
Guest Supplies
Yes Yes Yes
Includes regularly replenishment
of tents, sleeping bags, dog
leashes, trash bags, and other
items.

Facility
Maintenance
Yes Yes Yes
Includes repairs of water faucets,
fencing, signage, equipment, and
additional cleaning service
Encampment
Attendant
Yes Yes Yes
One full-time contract employee
managing all day-to-day
registration, guest relationship,
cleanup, etc.

Office Supplies Yes Yes Yes Replenish paper, pens, tools, and gear for contract staff
Case Management
and Housing
Navigation Services
Yes No Yes
For Option B - renewal of this
service will not occur; For Option
C - presume one to two full time
employees from a single
organization
Food and Palliative
Supplies Service
Yes Yes Yes
For Options B and City - presume
a change to staffing level and
menu to achieve 5 days of
service per week
Table 2 1
Agenda Packet for February 4, 2025 Page 97
Shower and Hygiene
Service
Yes No Yes
For Option B - renewal of this
service will not occur; For Option
C - presume a change to staffing
level and scope to achieve 2 to 3
days of service per week
Total Estimated
Monthly Cost by
Plan
$ $ 48,370.00 68,758.00 108,470.00 $
Total Estimated 12-
Month Cost by Plan $ $ 580,440.00 825,096.00 1,301,640.00 $ Notes - "Yes" indicates that a service is available in a particular plan; "No" indicates that a service is excluded in a particular plan
Table 2 2
Agenda Packet for February 4, 2025 Page 98
Staff Report
Meeting: City Council
Date: February 4, 2025
Department:

Submitted by:

Agenda Title:

Finance
Mark Roberts, Chief Financial Officer
City of Tulare Budget Policies & Practices Amendment

RECOMMENDED ACTION
Adopt a resolution approving the proposed amendment to the City of Tulare Budget Policies & Practices “Long-Term Financial Planning” section, which includes: 1) consolidating the General Fund Reserve Account policy and General Fund Contingency Reserve into a single reserve; 2) setting a target range for the consolidated reserve of between seventeen and thirty-three percent of a single fiscal year’s budgeted General Fund operating expenditures; 3) establishing a replenishment schedule for the Reserve for if it falls below its minimum target level; and 4) designating $15.3 million of current General Fund unassigned fund balance, which is equal to approximately twenty-five percent of fiscal year 2025 General Fund operating expenditures, as the General Fund Contingency Reserve, to classify it as committed fund balance as defined by the Governmental Accounting Standards Board in its Statement Number 54 (GASB 54).

BACKGROUND & DISCUSSION
Currently, the “Long-Term Financial” section of the City’s Budget Policies & Practices includes a “General Fund Reserve Account” policy and a “General Fund Contingency Reserve” policy. The policies read as follows:

General Fund Reserve Account
Under council direction a 25% general fund reserve is maintained. This 25% is equal to 4 months of operating expenditure which also includes debt service.

General Fund Contingency Reserve
Contingency Reserve funds help mitigate the effects of unanticipated situations natural disasters, severe, unforeseen events, as well as any California Public Employees’ Retirement System (CalPERS) liabilities. The Contingency Reserve also serves as back-up liquidity to the Risk Management Fund if this need were to arise. The Contingency Reserve is funded at a level at least equal to 1% of annual operating expenditures and transfers out. All uses of the Contingency Reserve must be approved by the City Council. Any such uses are to be repaid to the Contingency Reserve over a period of no more than three years.

The General Fund Reserve Account policy does not reflect a stated purpose for the reserve, allowing for broad interpretation as to its use. Conversely, the General Fund Contingency Reserve policy is somewhat comprehensive with respect to that reserve’s possible emergency applications and includes CalPERS liabilities and Risk Management back-up liquidity funding as eligible uses as well. Due to the lack of defined uses of one of the reserves and the wide-ranging uses of the other, consolidation of the reserves is warranted. Therefore, staff recommends replacing these reserves with a single reserve which may be utilized for all financial emergencies which may befall the General Fund. The proposed consolidated reserve will be named “General Fund Contingency Reserve,” preserving the name of the current reserve as it best succinctly describes the reserve’s purpose.

In addition to preparing for fiscal emergencies, it may, at times, be necessary to set aside funds for largescale purchases. For this reason, staff also recommends including such a provision in the policy for the new General Fund Contingency Reserve. However, with the essentially all-encompassing purpose of the Item #: 15.3
General Business
Agenda Packet for February 4, 2025 Page 99
new, consolidated reserve, no specificity regarding its uses, e.g., for CalPERS liabilities or back-up Risk Management Fund liability, is necessary; therefore, such specifics will not be reflected in the policy.

This target range affords the City the flexibility to employ a portion of the funds in times of temporary or short-term urgent need and to augment the reserve when a budgetary surplus exists or when operating results generate surplus fund balance, while remaining in compliance with the policy. The lower end of the recommended range (i.e., seventeen percent) meets the Government Finance Officers Association’s minimum unrestricted budgetary fund balance recommendation for general-purpose governments, and the mid-point of the range is equivalent to the current General Fund Reserve account requirement, twenty-five percent.

GASB 54 defines committed fund balance as including, “amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority.”

FISCAL IMPACT
The recommended amendment to the Budget Policies & Practices “Long-Term Financial Planning” section and designation of $15.3 million to the General Fund Contingency Reserve as committed fund balance will have no fiscal impact. However, improving the City’s reserve policies and designating the General Fund Contingency Reserve will strengthen the City’s ability to withstand financial emergencies.

LEGAL REVIEW
This item does not require legal review.

ALTERNATIVE ACTION

1. Approve

2. Deny

3. Table

ATTACHMENTS

1. Resolution

2. Exhibit A - Budget Policies & Practices “Long-Term Financial Planning” section reflecting the recommended amendment to the General Fund Reserve Account and General Fund Contingency Reserve policies

3. Exhibit B - Administrative Policy CM-10 Budget Policies & Practices Reviewed/Approved: MM
Agenda Packet for February 4, 2025 Page 100
RESOLUTION 2025-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TULARE

APPROVING AMENDMENT OF THE CITY OF TULARE BUDGET POLICIES & PRACTICES “LONG TERM FINANCIAL PLANNING” SECTION AND DESIGNATION OF $15.3 MILLION

AS THE GENERAL FUND CONTINGENCY RESERVE
WHEREAS, City staff has reviewed the “Long-Term Financial Planning” section of City of Tulare Budget Policies & Practices; and
WHEREAS, staff has determined said section reflects two reserves, the General Fund Reserve Account and the General Fund Contingency Reserve, which are of a similar nature; and WHEREAS, due to their similar nature, consolidation of these reserves into a single reserve is warranted; and
WHEREAS, establishing a target range for the consolidated reserve of between seventeen and thirty-three percent of a single fiscal year’s budgeted General Fund operating expenditures affords the City the flexibility to employ a portion of the funds in times of temporary or short-term urgent need and to augment the reserve when a budgetary surplus exists or when operating results generate surplus fund balance, while remaining in compliance with the policy; and
WHEREAS, establishing a replenishment schedule for the reserve will ensure the reserve is restored within a reasonable timeframe should it fall below its minimum target level; and WHEREAS, formally designating $15.3 million of current General Fund unassigned fund balance, which is approximately twenty-five percent of fiscal year 2025 General Fund operating expenditures, as the General Fund Contingency Reserve will classify it as committed fund balance as defined by the Governmental Accounting Standards Board in its Statement Number 54, ensuring its funds may be used only for specific purposes determined by a formal action of the City Council.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Tulare, as follows:

Section 1. The City of Tulare Budget Policies & Practices “Long-Term Financial Planning” section is hereby amended as reflected in Exhibit “A” attached hereto, 1) consolidating the General Fund Reserve Account policy and General Fund Contingency Reserve into a single reserve (“Reserve”), 2) setting a target range for the Reserve of between seventeen and thirtythree percent of a single fiscal year’s budgeted General Fund operating expenditures, 3) establishing a replenishment schedule for the Reserve for if it falls below its minimum target level, and 4) designating $15.3 million of current General Fund unassigned fund balance, which is equal to approximately twenty-five percent of fiscal year 2025 General Fund operating expenditures, as the General Fund Contingency Reserve, to classify it as committed fund balance as defined by the Governmental Accounting Standards Board in its Statement Number 54.

Agenda Packet for February 4, 2025 Page 101
Resolution 2025-XX

Page 2 ends

PASSED, APPROVED, AND ADOPTED by the City Council of the City of Tulare this 4th day of February 2025, by the following vote:

Ayes:

Noes:

Absent:

Abstain:

Patrick Isherwood, President of the Council
and Ex-Officio Mayor
ATTEST:

Marc Mondell, City Clerk
By Melissa Hermann, Chief Deputy City Clerk
Agenda Packet for February 4, 2025 Page 102
Exhibit A
Administrative Policies
Policy Title: Budget Policies & Practices
Policy No.: CM-10
Effective Date: 6/4/13
Revision Date: 5/28/20
Revision Date: 2/4/25

2. POLICY
Long-Term Financial Planning
General Fund Reserve Account
Under council direction a 25% general fund reserve is maintained. This 25% is equal to 4 months of operating expenditure which also includes debt service.

General Fund Contingency Reserve
Contingency Reserve funds help mitigate the effects of unanticipated situations natural disasters, severe, unforeseen events, as well as any California Public Employees’ Retirement System (CalPERS) liabilities. The Contingency Reserve also serves as back-up liquidity to the Risk Management Fund if this need were to arise. The Contingency Reserve is funded at a level at least equal to 1% of annual operating expenditures and transfers out. All uses of the Contingency Reserve must be approved by the City Council. Any such uses are to be repaid to the Contingency Reserve over a period of no more than three years.

The purpose of the General Fund Economic Contingency Reserve is to strengthen the City’s ability to withstand financial emergencies, such as those that may result from national disasters, economic downturns, and revenue shortfalls or unanticipated expenditures of a non-recurring nature, and to accumulate funds for large-scale purchases.

The City shall strive to maintain the General Fund Economic Contingency Reserve at an amount equal to between sixteen percent (16%) and thirty-three percent (33%) of a single year’s budgeted General Fund operating expenditures. As used in this this policy, “operating expenditures” is defined as all expenditures, except those of a capital nature or restricted by funding source, plus operating subsidies provided to other funds. The actual amount of the reserve shall be determined each year as part of the budgeting process and shall be annually reported to the City Council as part of or in conjunction with the Annual Comprehensive Financial Report (ACFR); however, nothing in this policy shall prevent determining or reporting on the level of the reserve at other times during the year.

If the General Fund Economic Contingency Reserve balance falls below its minimum target level, the City shall strive to restore it to the minimum target level through budgetary or other Agenda Packet for February 4, 2025 Page 103
Exhibit A
means. Unless otherwise noted in this policy, the following guidelines will be used to restore the reserve.
 If the reserve is drawn down to 75-99% of its minimum target level, it shall be restored to 100% over a 1- to 3-year period.
 If the reserve is drawn down to 50-74% of its minimum target level, it shall be restored to 100% over a 3- to 5-year period.
 If the reserve is drawn down below 50% of its minimum target level, it shall be restored to 100% over a 5- to 7-year period.

These guidelines may be suspended, in whole or part, if financial or economic circumstances are determined by the City Manager to prevent meeting any or all of the timelines.

Once established or increased, the reserve’s balance shall become committed fund balance, as defined by Governmental Accounting Standards Board Statement Number 54, within the General Fund and, as such, shall require Council approval for all transfers and expenditures therefrom.

Agenda Packet for February 4, 2025 Page 104
Policy Number: CM-10

OFFICE OF THE CITY MANAGER
Policy Title: Budget Policies and Practices Effective Date: 6/4/2013 Policy No.: 13-02 CM-10 Revision Date: 5/28/2020
Sections: N/A Revision Date: n/a
Reviewed by: City Manager; City Council Revision Date: n/a

1. PURPOSE.

The City of Tulare budget and financial policies are subject to California State law, the Tulare City charter, generally accepted accounting principles (GAAP), and City Council adopted ordinances and resolutions. The standards set by these authorities establish budget calendar dates, provide for budget control, describe the budget amendment process after budget adoption, and identify appropriate methods for budgeting, accounting, and reporting. The City’s resources and appropriations policies are extensions of the laws established by the State of California through the City Council and follow GAAP for local governments and budgeting practices.

Budget practices and policies are reviewed to ensure that current financial practices are in place. Areas for future policy development and updates may include post-retirement benefits and a periodic review and update of the City’s existing reserve policies.

2. POLICY.

Budget Practices - Budget Process and Calendar
The budget process enables the City Council to make resource allocation decisions, including choices about staffing, technology, equipment, and priorities to be addressed in the coming fiscal year. The City of Tulare’s Annual Operating Budget is adopted by the City Council by June 30 each year. Although the City Council first reviews the budget in May, the City Manager’s Office, the Finance Department, and other departments begin to prepare it at least six months prior. Throughout the year, staff provides quarterly revenue projections and updates on the City’s financial performance, and continues to assess City needs. In producing the budget, the Budget Team receives input from the public, City Council, and staff.

In November or December, the City Manager provides an update to the City Council on the current year’s budget and outlines policy issues facing the City. Together, they establish objectives for the upcoming year. At the mid-year budget review that typically takes place in February, the City Council provides feedback and direction regarding proposed priorities for the future programming of General Fund resources. With this direction and the Finance Department’s revenue projections, each department prepares a proposed budget. The Budget Team works closely with department managers to ensure that budgets reflect the City Council’s interests, priorities, and goals.

CITY OF TULARE, CALIFORNIA

ADMINISTRATIVE POLICIES
Agenda Packet for February 4, 2025 Page 105
Administrative Policy No. 13-02 CM-10

Page 2 ends

Several weeks before the budget is adopted, the City Manager presents the budget for the coming year to the City Council along with information on current year accomplishments and future year goals. Copies of the proposed budget documents are available to the public at public hearings, and they are also available in the City Clerk’s Office, and on the City’s website. Included in the City Manager’s presentation are an update of the City’s financial position and long-range plan; a review of the national, State, and local economies; a discussion of financial policies; and an update on department activities.

After reviewing the proposed budget and receiving public comment at public hearings, the City Council may direct staff to revise the proposed budget. On or before June 30, the City Council votes to adopt the budget, including any revisions to the proposed budget.

At any time after the adoption of the budget, the City Council may amend or supplement the budget.

Upon final adoption by the City Council, the budget becomes the legal authorization for the various departments to expend resources, subject to conditions established by the City Manager and City Council. Through a resolution adopted by the City Council, the City Manager is authorized to transfer appropriations as needed from any account in the budget to any other accounts within the same fund to meet overall budget requirements.

Citizen Participation
Citizens of Tulare participate in the budget planning process in various ways, such as participating on Council-appointed boards and commissions, attending budget study sessions and public hearings, or meeting with City staff.

Public hearings for the budget adoption typically occur at the end of May and the beginning of June. Citizens have the opportunity to speak about budget issues at these hearings and at any City Council meeting during the year.

Other Major Planning Processes
The budget is one of three major citywide planning tools. The General Plan, which governs land use and development, and the Capital Improvement Program (CIP) are the other two. Each planning process informs the others, and together they enable coordinated planning for operating City services, maintaining the City’s investment in public infrastructure, and developing land consistently with community interests.

The City of Tulare’s current general plan was adopted on October 7, 2014. This document can be referred to as a city’s “Constitution” for growth and development and the policy foundation upon which all development and land use decisions are based.

The Tulare General Plan establishes a twenty-five-year vision for the community based on technical and legal requirements, extensive discussions with the community, and policymaker input.

The CIP planning process takes place every year and is a planning tool to look at a fiveyear window of projects. The amount of General Fund to be transferred to the CIP is determined in the annual Operating Budget process, and may vary annually from the Agenda Packet for February 4, 2025 Page 106
Administrative Policy No. 13-02 CM-10

Page 3 ends

amount projected as revenue in the CIP. The General Fund capital plan involves transfers for general capital needs and a specific transfer for Information Technology capital replacement and other technology needs.

Basis of Budgeting
Revenues: The City receives revenues from a variety of sources. Property tax and sales tax comprise approximately 48% of the General Fund, but are controlled by the State Legislature. The City receives the balance of its revenues from local taxes, fees, charges for services, and transfers from other funds for General Fund services. Revenue projections for the coming budget year are comprised of the estimated actual revenue projected for the current year, and estimation based on past growth and prior year actual.

The City has a long-standing practice of dedicating one-time revenues to fund a variety of one-time projects. Increases in the General Fund associated with one-time revenues are not programmed for ongoing operations in the multi-year forecasts. This ensures that future revenues and expenditures are reasonably projected.

Sales Tax Budgeting. Basing long term programs and service plans on one-year revenue spikes can lead to funding challenges when sales taxes fall off. Therefore, the City will budget its sales tax related revenues (5% regular Bradley-Burns Act taxes and the 1% sales tax repayment from property taxes that was part of the “Triple Flip”, and its own Measure “I” sales tax) on the basis of a rolling 5-year average of four past actual fiscal year receipts and the estimates for the year before the fiscal year for which the budget is being prepared.

When actual revenues are actually received above the budgeted rolling average it will be used for one-time issues. For example, the one-time highs could be used in whole or in part for funding deficiencies in the City’s capital replacement accounts for high cost vehicles and equipment (for example, fire apparatus) and building capital replacement (for example roofs and HVAC systems). This way the one-time money is programmed only after it is actually received.

One Time Receipts. “One-time receipts” are those revenues or other receipts in excess of $100,000 which are otherwise unrestricted, and which are only expected to be received on one occasion or on more than one occasion but at uncertain or irregular intervals.

Upon City Council designation of a particular receipt as a “one-time receipt,” one hundred percent of said proceeds will be allocated to backfill any deficit first, with any remainder allocated to the following uses in the percentages shown:
• Thirty percent (30%) to streets, roadway and other transportation infrastructure for capital repairs; and
• The lesser of twenty percent (20%) or the amount needed to eliminate a computed vehicle/equipment funding deficit to the fleet replacement fund to be allocated among General Fund related vehicles and equipment classes; and • Ten percent (10%) to the General Fund base reserve until such time as the reserve is equal to 25% of General Fund expenditures and operating transfers out for Agenda Packet for February 4, 2025 Page 107
Administrative Policy No. 13-02 CM-10

Page 4 ends

operating purposes and at such time as the 25% of General Fund base reserve goal is met then zero percent (0%) to such purpose; and
• Twenty percent (20%) to be appropriated for technology, capital projects, retrofits, and similar activities that are able to demonstrate a return on investment in the form of hard cost savings to the City and
• Twenty percent (20%) council discretion.

Designated “one-time receipts” will not be budgeted for ongoing programs, salaries, and annually reoccurring costs that are highly likely to repeat in the future.

Expenditures: The City budgets at the governmental fund level, and funds are grouped for budget presentation. Major fund groups include the General Fund, Special Revenue funds, Debt Service, Enterprise Funds Internal Service Funds and Capital funds. While all funds budgeted are included in the operating budget, this document focuses on the General Fund, which contains the majority of the City’s discretionary resources for basic services such as police, fire, and parks, library and recreation services. Departmental base budgets for a given budget year are determined by the following process:

Starting with the adopted budget for the prior year -
Reducing the adopted prior year budget for any one-time appropriations the department received;
Implement any increase or decreases associated with negotiated bargaining unit agreements or with contracts and services;
Implementing any necessary service reductions or enhancements determined by the City Manager.

City funds are budgeted on the modified accrual basis of accounting. This method recognizes revenues when they become measurable and available to finance expenditures of the period. Expenditures are recorded when the related fund liability is incurred with the exception of principal and interest on long-term debt, which are recorded when due.

Basis of Budgetary Accounting
The basis of budgetary accounting that follows describes how the City presents the estimated revenues, budgeted expenditures and expenses, and capital asset purchases in this budget. This description can help the reader understand the differences and similarities in the budget presentation of such financial elements compared to how they are presented in other City publications, such as the City’s CIP or its annual Comprehensive Annual Financial Report (CAFR).

The City uses a “fixed budget” presentation which establishes a spending cap at the fund level, with departmental budgetary guidelines. Department budgets cannot be exceeded without special authorization.

The budget is generally prepared on the same basis of accounting used by the City in its CAFR. This terminology comes from the accounting standards used for governments which are established by the Governmental Accounting Standards Board (GASB). These Agenda Packet for February 4, 2025 Page 108
Administrative Policy No. 13-02 CM-10

Page 5 ends

standards constitute generally accepted accounting principles (GAAP) for local governments.

In the Required Supplementary Information section of the CAFR, the City compares actual revenues and expenditures for the accounting period to both the originally adopted budget and the final budget (the adopted budget with any adjustments) for estimated revenues and expenditure appropriations.

Expenditures are budgeted in the governmental funds on the modified accrual basis of accounting and expenses are budgeted in proprietary funds on the full accrual basis of accounting. The primary difference between the two bases of accounting is that “expenditures” emphasize the reporting of financial resource outflows (cash and cash-like resources) in the period in which they are disbursed, while “expenses” emphasize the matching of the obligation to disburse economic resources (cash and all other assets causing a change in fund net assets) to the period in which the obligation was incurred by the City.

Capital asset acquisitions are shown somewhat differently in the budget than in the CAFR. “Capital Assets” are used in the City’s operations, have an estimated useful life of more than one fiscal year, and cost $5,000 or more. These long-lived assets include land and buildings and their improvements, vehicles, machinery and equipment, and streets and sidewalks. The City’s planned capital asset purchases are shown in two places in the Budget: (1) in the departmental capital outlay for capital assets to be purchased from annual operating appropriations during the budgeted fiscal year, and (2) in the Capital Budget Summary (CIP) for capital assets to be acquired over several years or which involve particular financing plans. In the CAFR Fund Financial Statements, all capital asset acquisitions are reported in the governmental funds acquiring them as “Capital Outlay” on their operating statements, and in the proprietary funds, the acquiring funds report their acquisition as uses of cash on their statements of cash flow (the assets are also capitalized on their balance sheets).

Budget Account Structure
Budget transactions occur under an established account code structure organized by funding source (fund/fund number). An account code is comprised of eleven numbers, which represent the fund, department/division activity code, and object code. Object codes describe the transaction type within the fund and department.

Operating/Capital Expenditure Accountability
The annual budget sets appropriations by fund or with further allocation by department or program. At the fund level, expenditures may not legally exceed appropriations. The City Manager is authorized to transfer budgeted amounts between departments or programs within any fund. The City Council may adopt supplemental appropriations during the year.

Agenda Packet for February 4, 2025 Page 109
Administrative Policy No. 13-02 CM-10

Page 6 ends

Long-Term Financial Planning
Risk Management/Health Insurance
The City of Tulare uses a risk management program to reduce its workers’ compensation and general liability claim costs. The City participates in the Central San Joaquin Valley Risk Management Authority to provide processing of claims, pooling of claims exposure and excess insurance coverage, one for general liability coverage and one for workers’ compensation coverage. The joint powers authorities and the City rely on estimates prepared by professional actuaries to set aside funds adequate to meet potential losses.

The City covers losses up to $100,000 per claim and then claims are pooled after that to $500,000 for both coverages. Excess coverage provided by an additional joint powers authorities covers claims in excess of $500,000 for both general liability and workers’ compensation claims. Reserve funds are set as follows:

General Liability: a minimum of one-year premium in reserve plus an additional $250,000 set aside for Human Resources Contingency costs for attorney fees and hearing costs.”
Workers Compensation: a minimum of one-year premium in reserve.

The city may participate in an Authority to provide health insurance benefits to its employees. While in a risk pooling environment the city would follow the policy of the plan. The City’s policy is to set the reserve account at no less than four months’ worth of premium to handle any unanticipated increases that occur mid budget year.

Pension and Post-employment Benefits
The City provides pension and medical benefits for its public safety and non-safety employees through three contracts with CalPERS. The contracts include benefit levels negotiated by the City with its employee units and for which it has executed contract amendments. The plans also include some benefit levels approved by the State Legislature without contract amendment and funding mechanisms approved by the CalPERS Board of Administration.

Human Services Special Revenue Fund Contingency Reserve City Council policy is to maintain a Human Services Special Revenue Fund Contingency Reserve to help mitigate the effects of economic downturns and natural disasters, and to maintain flexibility in staffing or program levels during times of temporary decreases in grant or contract funding. The contingency reserve will be funded $50,000 initially. In future years calculations shall be done to look at the city’s potential liability in regards to cash outs at the separation of employment. Once complete liability is determined staff will recommend future funding allocations from both the general fund and all enterprise funds.

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General Fund Reserve Account
Under council direction a 25% general fund reserve is maintained. This 25% is equal to 4 months of operating expenditure which also includes debt service.

General Fund Contingency Reserve
Contingency Reserve funds help mitigate the effects of unanticipated situations natural disasters, severe, unforeseen events, as well as any California Public Employees' Retirement System (CalPERS) liabilities. The Contingency Reserve also serves as backup liquidity to the Risk Management Fund if this need were to arise. The Contingency Reserve is funded at a level at least equal to 1% of annual operating expenditures and transfers out. All uses of the Contingency Reserve must be approved by the City Council. Any such uses are to be repaid to the Contingency Reserve over a period of no more than three years.

General Fund Capital Asset Replacement Reserve
The General Fund Capital Asset Replacement Reserve provides a source of working capital for upgrading or replacing structures or non-vehicle related equipment.

Economic Incentive Reserve
The Economic Incentive Reserve is to be funded annually up at 1% of general fund operating transfers out. This reserve is used at the discretion of council to assist new development or existing businesses expand. Use of the Economic Development Application process adopted by council on March 6, 2012 (Resolution #12-22) applies to these funds.

Technology and System Improvement Reserve
The City Council will fund an annual contribution of ½% of the general fund and ¼% shall be charged to the Development Services funds and Utility funds, operating transfer out to the technology and system improvement reserve to provide a source of capital for the following:

Ongoing hardware and software acquisition
Technology investment
System improvement
This level of reserve is maintained to the extent market conditions and revenues permit.

All uses of the reserve must be approved by the City Manager and are budgeted as part of the capital improvement planning process.

Development Services Unallocated Fund Balance
When annual fee revenues exceed expenditures and amounts needed to maintain the Development Cost Center reserves at planned levels, the Development Services Department will evaluate the development fee structure during the subsequent fiscal year.

The evaluation will take into account equity to fee payers, changes in fee structures to encourage compliance with safety codes, economic forecasts for development and maintenance of responsive and high-quality customer services. The purpose of this Agenda Packet for February 4, 2025 Page 111
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evaluation will be to develop recommendations regarding possible reductions in fee levels that would be funded through use of the unallocated fund balance for the budget year that begins twelve months after the end of the fiscal year that results in an unallocated fund balance.

Election Reserve
The City of Tulare is required to pay fees for all Special and Council elections. In order to eliminate the increase and decrease in funding, a flat $20,000 per year contribution to the reserve and capped at $50,000 to smooth the fiscal impacts of every two years elections with the occasional special election.

Property Maintenance Reserve
The City of Tulare owns numerous buildings and property’s that are leased/rented out to private individuals. Leases/Agreements are individual the property. Rents collected from properties that are in excess of the direct costs for the buildings shall be held in a Property Maintenance Reserve to offset costs of repairs to those rental buildings/properties. Examples of repairs shall include roof repair/replacement, heating and air conditioning, painting, restroom repair. Reserves may also be used for weed abatement and maintenance of vacant property.

Debt Capacity, Issuance and Management
Short-Term Operating Debt
Current revenues will cover expenses associated with the day-to-day operations of the City. However, because the City receives the majority of its property tax revenues twice during the year, and sales tax revenues may fluctuate during the year, the City may experience temporary cash shortfalls. In order to finance these possible cash shortfalls, the City may incur short-term operating debt [typically, Tax and Revenue Anticipation Notes (TRANs)]. The amount of short-term operating debt will be based on cash flow projections for the fiscal year and will comply with applicable federal and State regulations. Operating revenues will be pledged to repay the debt, which will generally be repaid in one year or less. The costs of such borrowings will be minimized to the greatest extent possible.

Interfund Loans
The City Council and/or Board of Public Utilities to approve short-term loans of one year or less and long-term advances of ten years or less between City funds under the following terms and conditions:

1. The City Council and/or Board of Public Utilities are authorized to approve loans of one year or less and advances of ten years or less between City funds; provided, that such loans and advances comply with the interfund borrowing policy and that the City Manager and Finance Director concur that such loans and advances are in the financial best interests of the City under the existing circumstances.

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2. Each loan or advance approved by the City Council and/or Board of Public Utilities will be documented in a writing signed by the City Manager and the Finance Director that states all of the following:
a. The purpose for which the loan or advance is being made. b. The identification of both the lending and borrowing fund, or funds. c. The dollar amount of the loan or advance.
d. The maturity date on which all principal together with all accrued and unpaid interest will be due and payable.
e. The scheduled dates and amounts of all principal and interest installment payments.
f. The applicable nominal interest rate or discount rate. g. The borrowing fund’s right to make full prepayment at any time without penalty. h. The source or sources from which the borrowing fund or funds is expected to repay the loan or advance.

3. All loans and advances will be repaid by the borrowing funds. Because each loan or advance is expected to be free from risk of default, the Finance Director will establish the nominal interest rate or discount rate to be applied to each transaction using then prevailing interest rates on indebtedness of a comparable term issued by the Treasury Department of the United States of America.

4. No individual loan or advance approved by the City Council and/or Board of Public Utilities will exceed the sum of five million dollars ($5,000,000), and the total of all loans and advances so approved and outstanding at any one time will not exceed the sum of twenty million dollars ($20,000,000).

5. Although the loans and advances will be unsecured, an adequate source of repayment or refunding (including future external debt issuance) is to be identified. Under all circumstances, repayment of the loans will be subordinate to claims and encumbrances established by covenants related to any debt, regardless of issue date, issued into the external financial markets by the City of Tulare, the Tulare Public Financing Authority, or any of them (collectively, the City and/or its affiliated agencies).

6. No loans or advances will be made from a City fund that is reasonably likely during the contemplated term of the loan or advance to need the same cash to pay for projects or activities for which the lending fund originally received the cash. No loan or advance will be made that will either violate any law, or cause the City and/or its affiliated agencies to breach any restrictive covenant, contractual provision, or grant term. Any loan of developer impact fees will be reported in accordance with California Government Code Section 66006(G).

7. No loan or advance will be made involving any of the following: any funds holding State Gas Tax proceeds (including, without limitation, the Special Gas Tax Street Improvement Fund), any funds holding federal streets and highway monies, any Agenda Packet for February 4, 2025 Page 113
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funds holding revenues collected pursuant to voter-approved measures (including, without limitation, Proposition 1B funds and general obligation bond funds) or trust funds.

Long-Term Capital Debt
The long-term capital debt policy sets the parameters for issuing debt and provides guidance in the timing and structuring of long-term debt commitments. In addition to this policy, there is a separate policy for land-based financings (typically, Mello-Roos community facility districts and local improvement districts). The following provisions guide the City’s consideration of issuing long-term debt:

1. The City uses debt financing only for one-time capital improvement projects and unusual equipment purchases, and only under the following circumstances:
a. When the project is included in the City’s five-year capital improvement program and is in conformance with the City’s General Plan.
b. When the project is not included in the City’s five-year capital improvement program, but it is an emerging critical need whose timing was not anticipated in the five-year capital improvement program, or it is a project mandated immediately by State or federal requirements.
c. When the project’s useful life, or the projected service life of the equipment, will be equal to or exceed the term of the financing.
d. When there are designated revenues sufficient to service the debt, whether from project revenues, other specified and reserved resources, or infrastructure costsharing revenues. e. Debt financing (other than tax and revenue anticipation notes) is not considered appropriate for any recurring purpose such as current operating and maintenance expenditures.

2. The project priority process used in developing the City’s five-year capital improvement program, including criteria used in evaluating projects and project viability, is reviewed by the City Council as part of the annual update of the five-year capital improvement program.

3. The following criteria are used to evaluate pay-as-you-go versus long-term debt financing in funding capital improvements:
a. Factors that favor pay-as-you-go:
i. Current revenues and adequate fund balances are available. i. Project phasing is feasible.
ii. Debt levels would adversely affect the City’s credit rating. iii. Market conditions are unstable or present difficulties in marketing. b. Factors that favor long-term financing:

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i. Revenues available for debt service are considered sufficient and reliable so that
long-term financing can be marketed with an appropriate credit rating. ii. The project for which financing is being considered is of the type that will allow the City to maintain an appropriate credit rating. iii. Market conditions present favorable interest rates and demand for municipal financings.
iv. A project is mandated by State or federal requirements and current revenues and fund balances are insufficient to pay project costs. v. A project is immediately required to meet or relieve capacity needs. vi. The life of the project or asset financed is five years or longer.

4. The following are considered in evaluating appropriate debt levels:
a. General Fund-supported debt service will not exceed 7% of total General Fund budgeted expenditures and transfers out at the time of issuance. b. The General Fund may be used to provide back-up liquidity to improve the viability of a self-supported debt issue (i.e., not land-based financings), but only if the General Fund is not exposed to significant risk of loss of assets or impairment of liquidity. This evaluation of risk will consider such things as the following:
i. Volatility and collectability of the revenue source identified for repayment of the debt.
ii. The likelihood the General Fund will be reimbursed within one year for any payments it might potentially need to make in its role as back-up guarantor.

If the City Council determines the risk of loss of assets or impairment of liquidity to the General Fund to be relatively minimal, self-supported debt service for debt that relies on the General Fund as a back-up guarantor will not exceed 7% of General Fund budgeted expenditures and transfers out.

This limitation is separate from and in addition to the debt limitation for General Fund-supported debt service described in Section 4.a., above.

5. The costs of developing and maintaining a land-based long-term debt policy will be borne by the development community, which uses this type of financing.

6. The City will follow all State and federal regulations and requirements regarding bond provisions, issuance, taxation, and disclosure.

7. The adoption of resolutions of intent will be considered whenever bond issuance is contemplated to increase the flexibility related to funding costs related to the project (e.g., project development costs, architectural costs, studies, etc.).

8. Costs incurred by the City, such as bond counsel and financial advisor fees, printing, underwriters’ discount, and project design and construction costs, will be charged to the bond issue to the extent allowable by law.

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9. The City will seek credit enhancements, such as letters of credit or insurance, when necessary for cost-effectiveness.

10. The City will monitor compliance with bond covenants and adhere to federal arbitrage and disclosure regulations. Any instances of non-compliance will be reported to the City Council.

11. The City will seek to maintain its current bond rating and will ordinarily not consider long-term debt that, through its issuance, would cause the City’s bond rating to be lowered.

12. The City will maintain good communications with bond rating agencies about its financial condition and will follow a policy of full disclosure in every financial report and bond prospectus (Official Statement).

13. The City will generally conduct financings on a competitive basis; however, negotiated financings may be used where market volatility or the use of an unusual or complex financing or security structure is a concern with regard to marketability.

14. The City will select a financial advisor and/or investment banker and bond counsel on a competitive basis; these advisors will be retained for at least four years to provide continuity and allow them to develop an understanding of the City’s needs. Other outside service providers may be selected by developers or owners, subject to the City’s approval. Trustees and/or paying agents will be selected by competitive bid.

15. Interfund borrowing will be considered to finance high priority needs on a case-bycase basis, but only when planned expenditures in the fund making the loan would not be affected. Interfund borrowing may be used when it would reduce costs of interest, debt issuance, and/or administration.

16. The term of the long-term debt instrument will not exceed the useful life of the asset or forty years, whichever is less.

17. Bond proceeds will be invested in accordance with the provisions of the bond indenture. Funds set aside for debt service will only be used for that purpose.

18. In choosing the appropriate long-term debt instrument, cost, economic equity, political acceptability, and flexibility will be considered. Refunds will be considered to reduce interest costs or principal outstanding, or to eliminate restrictive debt covenants. Pooled financings with other government agencies will be considered, as appropriate.

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Financing Instruments
There are many different types of long-term debt instruments available. Depending on the specific circumstances, the City will consider using the following types of financing instruments:

1. General Obligation Bonds - Bonds backed by the full faith and credit of the City. The taxing power may be an unlimited ad valorem tax, subject to State law, or a limited tax, usually on real estate and personal property. A special rate is incorporated in the property tax bill annually to pay for debt service. A two-thirds voter approval is required for authorization. Because it is secured by a tax levy, this structure has strong marketability and lower interest costs.

2. Revenue Bonds - Bonds are secured by revenues generated by the facility that is financed or by dedicated user fees. Voter approval may or may not be required.

Planning is more complex because costs and revenues affect each other. Credit enhancement (e.g., insurance or letter of credit) may be needed because of the limited source of debt service payment.

3. Certificates of Participation - The City enters into a lease agreement with another party (a lessor, such as a joint powers authority) to lease an asset over a defined period of time at a prearranged annual payment. Voter approval is generally not required. Lease payments are made primarily from General Fund revenues. Current law requires the lessee to make lease payments only if the facility has beneficial use.

The legislative body has to appropriate annual debt service payments. For the security of the bondholders, a reserve fund is normally established and held by a trustee until all bonds are paid. Interest during project construction must be capitalized. An “asset transfer” structure, whereby an existing facility is used as security to finance construction or acquisition of another project, may be used for flexibility.

4. Assessment Bonds - Bonds are issued to develop facilities and basic infrastructure for the benefit of properties within the assessment district. Assessments are levied on properties benefited by the project. Voter approval is not required. Instead, a majority vote of the property owners with a majority of assessments is needed to authorize the issue. The issuer’s recourse for non-payment is foreclosure. This type of bond is normally not rated. The bonds may be issued under the provisions of the 1911, 1915 or Mello-Roos Bond Act, whichever is most appropriate.

5. Master Lease Agreements - The City enters into a lease agreement with a provider to lease equipment or facilities whose useful life is too short to finance with long-term debt. Various pieces and types of real and personal property from different vendors over a period of time can be acquired under one master lease agreement. Interest can be fixed or tied to an index. Financing costs are normally minimal, but the interest cost may be higher than with other instruments.

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6. Vendor-Financed Leases - A vendor of equipment acts as the lessor and investor, and holds the lease for its full term or may assign the lease. The motivating factor to the vendor is usually to encourage future sales of its product.

7. Marks-Roos Bonds - Bonds are issued by a joint powers authority to buy other bond issues. By pooling bond issues, marketability can be improved and administration costs are reduced.

8. Bond Anticipation Notes - Notes are issued to provide temporary financing, to be repaid by long-term financing. The bridge financing has a maximum maturity of three years.

Rob Hunt, City Manager Date
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Staff Report
Meeting: City Council
Date: February 4, 2025
Department: Finance
Submitted by: Mark Roberts, Chief Financial Officer
Agenda Title: City of Tulare Investment Policy Amendment

RECOMMENDED ACTION
Approve the proposed amendment to the City of Tulare Statement of Investment Policy.

SUMMARY
The City’s Statement of Investment Policy was last updated December 15, 2015. City staff and the City’s investment manager and advisor have reviewed the policy and recommend it be revised as reflected in the attached Exhibit “A” to this staff report. The revision is intended to ensure the policy aligns closely with California Government Code Section 53601 regarding investment of surplus funds.

FISCAL IMPACT & FUNDING SOURCES
There is no fiscal impact associated with this action.

LEGAL REVIEW
This item does not require legal review.

ALTERNATIVE ACTION

1. Approve with changes

2. Deny

3. Table

ATTACHMENTS

1. Exhibit A – City of Tulare Investment Policy (proposed)

2. Exhibit B – City of Tulare Statement of Investment Policy (current) Reviewed/Approved:

Item #: 15.4
General Business
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Exhibit A
1 CITY OF TULARE

INVESTMENT POLICY
1) PURPOSE
The purpose of this document is to establish policies and procedures to ensure effective and judicious management of the investments of the City of Tulare (“City”).

All City funds will be invested in accordance with this Investment Policy and California Government Code (“Government Code”) Sections 16429.1 et seq. and 53600 et seq. 2) SCOPE
This Investment Policy applies to all financial assets and investment activities of the City and the Successor Agency with the following exception(s):

Proceeds of debt issuance shall be invested in accordance with the City’s general investment philosophy as set forth in this policy; however, such proceeds are invested in accordance with permitted investment provisions of their specific bond indentures.

Pooling of funds: Except for cash in certain restricted and special funds, the City will consolidate cash and reserve balances from all funds to maximize investment earnings and to increase efficiencies with regard to investment pricing, safekeeping, and administration.

Investment income will be allocated to the various funds of the City based on their respective invested assets and in accordance with generally accepted accounting principles. 3) OBJECTIVES
The City has a fiduciary responsibility to maximize the productive use of all assets entrusted to its care and to invest and manage those public funds wisely and prudently. Therefore, the City shall strive to maintain the level of investment of all idle funds as near 100% as possible through projected cash flow determinations, investing in those investment vehicles deemed prudent and allowable under the laws of the State of California and the ordinances of the City of Tulare.

The objectives of the City’s investment program are, in order, safety, liquidity, and return.

1. Safety: Preservation of principal is the foremost objective of the City’s investment program. Investments shall be undertaken in a manner that seeks to ensure the preservation of capital in the overall portfolio.

2. Liquidity: The City's investment portfolio shall remain sufficiently liquid to allow the City to meet all operating requirements which may be reasonably anticipated.

3. Return: The City’s investment portfolio shall be managed with the objective of attaining a market average rate of return through budgetary and economic cycles, taking into account the City’s safety constraints and liquidity requirements and state and local law, ordinances, and resolutions that restrict the placement of short-term funds.

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2 4) PRUDENT INVESTOR STANDARD
Prudent Investor Standard: Management of the City’s investments is governed by the Prudent Investor Standard as set forth in Government Code Section 53600.3:
“…all governing bodies of local agencies or persons authorized to make investment decisions on behalf of those local agencies investing public funds pursuant to this chapter are trustees and therefore fiduciaries subject to the prudent investor standard. When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.” 5) PERFORMANCE EVALUATION
Investment performance is to be continually monitored and evaluated by the Chief Financial Officer. The City’s primary portfolio performance will be measured against an objective index with similar attributes to the City’s portfolio.
6) DELEGATION OF AUTHORITY
Authority to manage the City’s investment program is derived from Government Code Section 53600 et seq. Pursuant to City of Tulare Code of Ordinances Section 1.56.010, “The Finance Director of the City of Tulare shall, in addition to all other authority and all other duties, have the authority and duties of a Finance Director/Treasurer for the City of Tulare, and shall be in charge of the Treasury of the city.” The Chief Financial Officer of the City of Tulare serves as the Finance Director; therefore, the authority to manage the Treasury of the City, including the administration of this Investment Policy, is vested with the Chief Financial Officer.

No person may engage in an investment transaction except as provided under the terms of the policy and the procedures established by the Chief Financial Officer.

The City may engage the services of one or more external investment managers to assist in the management of the City’s investment portfolio in a manner consistent with this Investment Policy and the City’s objectives. Such external managers may be granted discretion to purchase and sell investment securities in accordance with this Investment Policy. In accordance with the Investment Advisors Act of 1940, managers must be registered with the Securities & Exchange Commission (SEC) before they can offer their securities in the public market.

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

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3 7) ETHICS & CONFLICT OF INTEREST
Officers and employees involved in the investment process shall refrain from personal business activity that conflicts with proper execution of the investment program or impairs their ability to make impartial investment decisions.
8) SAFEKEEPING/CUSTODY, DELIVERY, & COMPETITIVE TRANSACTIONS A. Third-Party Safekeeping: To protect against potential losses by collapse of individual securities dealers, and to enhance access to securities, interest payments and maturity proceeds, all securities owned by the City will be held in safekeeping by a third-party bank custodian, acting as agent for the City under the terms of a custody agreement executed by the bank and the City.

B. Delivery versus Payment: Settlement of all investment transactions will be completed on a delivery-versus-payment basis. All securities purchased or acquired shall be delivered to the City of Tulare by book entry, physical delivery, or by third party custodial agreement as required by Government Code Section 53601.

The only exception to the foregoing shall be depository accounts and securities purchases made with: (i) State of California’s Local Agency Investment Fund and other local government investment pools; (ii) non-negotiable certificates of deposit; and, (iii) money market mutual funds, since the purchased securities are not deliverable. Evidence of each these investments will be held by the City.

C. Competitive Transactions: All investment transactions will be conducted on a competitive basis which can be executed through a bidding process involving at least three separate brokers/financial institutions where applicable, or through the use of a nationally recognized trading platform.
9) DIVERSIFICATION
The City of Tulare will diversify its investments by security type and institution. It is the policy of the City of Tulare to diversify its investment portfolio. Assets shall be diversified to reduce the risk of loss resulting from over concentration of assets in a specific maturity, a specific issuer, or a specific class of securities. Diversification strategies shall be determined and revised periodically and approved by the City Manager and the City Council. In establishing specific diversification strategies, the following general policies and constraints shall apply:

A. Maturities selected shall provide for stability of income and liquidity.

B. Disbursement and payroll dates shall be covered through maturity investments and marketable securities.

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4 10)INTERNAL CONTROL
The Chief Financial Officer shall establish a system of written internal controls to regulate the City’s investment activities, including the activities of any subordinate officials acting on behalf of the City.

The investment portfolio and all related transactions shall be reviewed and balanced to the appropriate general ledger accounts by Department of Finance Staff on a monthly basis.

An independent analysis by the City’s external auditor shall be conducted annually as part of the annual audit to review internal control, account activity, and compliance with the Government Code and with policies and procedures and reported to City Council. 11) REPORTING
A. The Chief Financial Officer shall submit to City Council a monthly report of investment transactions.

B. The Chief Financial Officer shall render a quarterly investment report to the City Manager and City Council.

1. Except as provided in subsection 2, the quarterly report shall include the following information for each individual investment:
▪ type of investment instrument;
▪ issuer name;
▪ maturity date;
▪ par value;
▪ book value (purchase price);
▪ current market value and the source of the valuation.

2. For investments placed in the State of California’s Local Agency Investment Fund; in FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits, and other types of bank deposits in financial institutions located in California; in a county investment pool; or any combination of these, the Chief Financial Officer may provide the City Manager and City Council the most recent statement or statements received from these institutions in lieu of the information required by subsection 1 regarding investments in these institutions.

3. The quarterly report also shall (a) state compliance of the portfolio to the statement of Investment Policy, or manner in which the portfolio is not in compliance; (b) include a description of any of the City's funds, investments, or programs that are under the management of contracted parties, including lending programs; and (c) include a statement denoting the ability of the City to meet its expenditure Agenda Packet for February 4, 2025 Page 123

CITY OF TULARE INVESTMENT POLICY
5 requirements for the next six months, or provide an explanation as to why sufficient money shall, or may, not be available.

C. The Investment Policy shall be reviewed at least annually and, as necessary, adopted by the City Council to ensure its consistency with the overall objectives of safety, liquidity, and return, as well as its relevance to current law and financial and economic trends. 12) QUALIFIED BROKER-DEALERS
Whenever practical, a competitive bid process will be used for the purchase and sale of investments. It shall be the City’s policy to execute investment transactions only with broker/dealers and financial institutions deemed eligible by the Chief Financial Officer or the City's Investment Advisor if applicable, will be used to place all investment purchases. 13) AUTHORIZED INVESTMENTS
All investments shall be made in accordance with Government Code Sections 16429.1 et seq. and 53600 et seq. Within the investments permitted by the Government Code, the City seeks to further restrict eligible investments to the guidelines listed below. In the event a discrepancy is found between this Investment Policy and the Government Code, the more restrictive parameters will take precedence.

Where this section specifies a percentage limitation for a particular category of investment, that percentage is applicable only at the date of purchase. Where this section does not specify a limitation on the term or remaining maturity at the time of the investment, no investment shall be made in any security, other than a security underlying a repurchase agreement authorized by this section, that at the time of the investment has a term remaining to maturity in excess of five (5) years. Any investment held at the time this Investment Policy is adopted which does not meet the new policy guidelines may be held until maturity and shall be exempt from the current policy. At the time of the investment’s maturity or liquidation, such funds shall be reinvested only as provided in the current policy.

A. United States Treasury, notes, bonds, bills, or certificates of indebtedness, or those for which the full faith and credit of the United States are pledged for the payment of principal and interest.

B. Federal agency or United States government-sponsored enterprise obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises.

C. Registered state warrants or treasury notes or bonds of the State of California, including bonds payable solely out of revenues from a revenue-producing property owned, controlled, or operated by the state or by a department, board, agency, or authority of the state. The securities must be rated in a rating category of “A” or its equivalent or higher by a nationally recognized statistical rating organization (NRSRO).

D. Registered treasury notes or bonds of any of the other 49 states in addition to California, including bonds payable solely out of the revenues from a revenue-producing property Agenda Packet for February 4, 2025 Page 124

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6 owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 states, in addition to California. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

E. Bonds, notes, warrants, or other evidences of indebtedness of a local agency within this state, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by the local agency, or by a department, board, agency, or authority of the local agency. The securities must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

F. Repurchase Agreements collateralized with securities authorized under Government Code, maintained at a level of at least 102% of the market value of the repurchase agreement. There are no limits on the dollar amount or percentage that the City may invest, provided that:
▪ securities used as collateral for repurchase agreements will be delivered to an acceptable third-party custodian;
▪ repurchase agreements are subject to a master repurchase agreement between the City and the provider of the repurchase agreement. The master repurchase agreement will be substantially in the form developed by the Securities Industry and Financial Markets Association (SIFMA);
▪ the maximum maturity does not exceed one year.

G. Reverse repurchase agreements or securities lending agreements may be utilized only when all the following conditions are met:

1. the security to be sold on reverse repurchase agreement or securities lending agreement has been owned and fully paid for by the City for a minimum of 30 days prior to sale;

2. the total of all reverse repurchase agreements and securities lending agreements on investments owned by the City does not exceed 20 percent of the market value of the portfolio;

3. the agreement does not exceed a term of 92 days, unless the agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security;

4. funds obtained or funds within the pool of an equivalent amount to that obtained from selling a security to a counterparty by way of a reverse repurchase agreement or securities lending agreement shall not be used to purchase another security with a maturity longer than 92 days from the initial settlement date of the reverse repurchase agreement or securities lending agreement, unless the reverse repurchase agreement or securities lending agreement includes a written codicil guaranteeing a minimum earning or spread for the entire period between the sale of a security using a reverse repurchase agreement or securities lending agreement and the final maturity date of the same security.

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7 Investments in reverse repurchase agreements, securities lending agreements, or similar investments in which the City sells securities prior to purchase with a simultaneous agreement to repurchase the security may only be made upon prior approval of the City Council and shall only be made with primary dealers of the Federal Reserve Bank of New York or with a nationally or state-chartered bank that has or has had a significant banking relationship with the City. The City may not invest more than 20% of its portfolio in reverse repurchase agreements and must always match its maturities to the reinvestment.

H. Bankers’ acceptances, otherwise known as bills of exchange or time drafts, that are drawn on and accepted by a commercial bank. Purchases of bankers' acceptances shall not exceed 180 days’ maturity or 40% of the City’s surplus moneys that may be invested pursuant to this section. However, no more than 30% of the City’s surplus moneys may be invested in the bankers’ acceptances of any one commercial bank.

Eligible bankers' acceptances are restricted to issuing financial institutions with shortterm paper rated in a rating category of “A-1” or its equivalent or higher by one NRSRO or long-term debt obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO.

I. Commercial paper of “prime” quality of the highest ranking or of the highest letter and number rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all the following conditions in either paragraph (1) or paragraph (2) below:

1. The entity meets the following criteria: (a) is organized and operating in the United States as a general corporation, (b) has total assets in excess of five hundred million dollars ($500,000,000), and (c) has debt other than commercial paper, if any, rated in a rating category of “A” or its equivalent or higher by a NRSRO.

2. The entity meets the following criteria: (a) is organized within the United States as a special purpose corporation, trust, or limited liability company, (b) has program-wide credit enhancements, including, but not limited to, overcollateralization, letters of credit, or surety bonds. (c) has commercial paper rated “A-1” or its equivalent or higher by a NRSRO.

Eligible commercial paper shall have a maximum maturity of 270 days or less. The City may invest no more than 25% of its surplus moneys that may be invested pursuant to this section in eligible commercial paper, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer. Under a provision sunsetting on January 1, 2026, no more than 40% of the City’s surplus moneys may be invested in commercial paper if the City’s investment assets under management are greater than $100,000,000. The City may invest no more than 5% of its total investment assets in any single issuer.

J. Medium-term notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States. Notes eligible for investment under this subsection must be rated in a rating category of “A” or its equivalent or higher by a NRSRO.

Purchases of medium-term notes shall not exceed 30% of the City’s surplus moneys Agenda Packet for February 4, 2025 Page 126

CITY OF TULARE INVESTMENT POLICY
8 that may be invested pursuant to this section, and the City may invest no more than 10% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

K. FDIC-insured or fully collateralized demand deposit accounts, savings accounts, market rate accounts, time certificates of deposits (TCDs) and other types of bank deposits in financial institutions located in California. The amount on deposit in any financial institution shall not exceed the shareholder’s equity. To be eligible to receive City deposits, the financial institution must have received a minimum overall satisfactory rating, under the Community Redevelopment Act, for meeting the credit needs of California Communities in its most recent evaluation. Bank deposits are required to be collateralized as specified under Government Code Section 53630 et. seq. The Treasurer, at his/her discretion, may waive the collateralization requirements for any portion that is covered by federal deposit insurance. The City shall have a signed agreement with any depository accepting City funds per Government Code Section 53649. There is no limit on the percentage of the portfolio that may be invested in bank deposits. However, a maximum of 30 percent of the portfolio may be invested in TCDs.

L. Negotiable Certificates of Deposit issued by a nationally- or state-chartered bank or a state or federal savings and loan association, a state or federal credit union, or by a federally- or state-licensed branch of a foreign bank. Amounts of negotiable certificates of deposit insured up to the FDIC limit do not require a credit rating. Any amount above the FDIC insured limit must be issued by institutions with short-term debt obligations rated in a rating category of “A-1” or its equivalent or higher by at least one NRSRO, or long-term obligations rated in a rating category of “A” or its equivalent or higher by a NRSRO. Purchases of negotiable certificates of deposit shall not exceed 30% of the City's surplus moneys that may be invested pursuant to this section.

M. Certificates of deposit placed through a deposit placement service that meet the requirements under Government Code Section 53601.8. The full amount of each deposit placed and the interest that may accrue on each such deposit shall at all times be insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration. Purchases of certificates of deposit placed through a deposit placement service shall not, in total, exceed 30 percent of the City’s surplus moneys that may be invested pursuant to this section.

N. State of California’s Local Agency Investment Fund (LAIF). Investment in LAIF may not exceed the amount permitted by LAIF.

O. Shares of beneficial interest issued by a joint powers authority organized pursuant to Government Code Section 6509.7 that invests in the securities and obligations authorized in Government Code Section 53601. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

1. The adviser is registered or exempt from registration with the Securities and Exchange Commission.

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CITY OF TULARE INVESTMENT POLICY
9 2. The adviser has not less than five years of experience investing in the securities and obligations authorized in this section.

3. The adviser has assets under management in excess of five hundred million dollars ($500,000,000)
The underlying pool of securities of which the shares are purchased must be rated in a rating category of “AAAm” or its equivalent or higher by a NRSRO.

P. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the SEC under the Investment Company Act of 1940 (15 USC Sec. 80a-1, et seq.). The purchase price of shares shall not exceed 20 percent of the investment portfolio of the City. To be eligible for investment pursuant to this subdivision, these companies shall have either:

1. attained the highest-ranking letter or numerical rating provided by not less than two of the three largest NRSRO or

2. retained an investment advisor registered or exempt from registration with the SEC with not less than five years’ experience managing money market mutual funds and with assets under management in excess of $500,000,000.

Q. A mortgage pass-through security, collateralized mortgage obligation, mortgagebacked or other pay-through bond, equipment lease-backed certificate, consumer receivable pass-through certificate, or consumer receivable-backed bond. Securities eligible for investment under this subsection not issued or guaranteed by an agency or issuer identified in subsection (A) or (B) of this Policy, the following limitations apply:

1. The security shall be rated in a rating category of “AA” or its equivalent or better by an NRSRO and have a maximum remaining maturity of five years or less.

2. Purchase of securities authorized by this subsection shall not exceed 20 % of the City’s surplus moneys that may be invested pursuant to this section.

3. The City may invest no more than 5% of its total investment assets in the assetbacked or commercial mortgage security of any single issuer.

R. Supranational obligations. Issues must be United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank and eligible for purchase and sale within the United States. The securities must be rated in a rating category of “AA” or its equivalent or higher by a NRSRO. No more than 30% of the City’s surplus moneys that may be invested pursuant to this section may be invested in this category. The City may invest no more than 10% of its total investment assets in the supranational obligations of any single issuer.
14) PROHIBITED INVESTMENTS
Any security type or structure not specifically approved by this policy is hereby specifically prohibited. Security types which are thereby prohibited include, but are not limited to, inverse Agenda Packet for February 4, 2025 Page 128

CITY OF TULARE INVESTMENT POLICY
10 floaters, derivatives, range notes, interest only strips that are derived from a pool of mortgages, or in any investment that could result in zero interest accrual if held to maturity. Under a provision sunsetting on January 1, 2026, securities backed by the US Government that could result in a zero- or negative-interest accrual if held to maturity are permitted. Trading securities for the sole purpose of speculating on the future direction of interest rates is prohibited.

Purchasing or selling securities on margin is prohibited. The purchase of foreign currency denominated securities is prohibited. Local governments that are not Qualified Institutional Buyers (QIB) as defined by the SEC are prohibited from purchasing Private Placement Securities. The SEC defines a QIB as having at least $100,000,000 in securities owned and invested.
15)INVESTMENT OF BOND PROCEEDS
Bond proceeds shall be invested in the securities permitted by the applicable bond documents. If the bond documents are silent as to the permitted investments, bond proceeds will be invested in the securities permitted by this policy. Notwithstanding the other provisions of this policy, the percentage or dollar portfolio limitations listed in elsewhere in this policy do not apply to bond proceeds. In addition to the securities listed in this Policy, bond proceeds may be invested in a structured investment product if approved by the Chief Financial Officer. 16) LEGISLATIVE
Any State of California legislative action that further restricts allowable maturities, investment type, or percentage allocations will be deemed to be incorporated into this Investment Policy and will supersede any and all applicable language.
17)INTEREST EARNINGS
All moneys earned and collected from investments authorized in this policy shall be allocated monthly to various fund accounts based on the pooled cash balance in each fund as a percentage of the entire pooled portfolio.

Agenda Packet for February 4, 2025 Page 129
11 GLOSSARY
Agency: Federal agency securities and /or
Government-sponsored enterprises.

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

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

California Local Government Debt: Is
bonds, notes, warrants, or other evidences of
indebtedness of any local agency within
California. California local government
debt is a permitted investment under the
California Government Code. The
Government Code does not specify
minimum credit ratings for local
government debt in which local agencies
may invest.

Certificate of Deposit (CD): A time
deposit with a specific maturity evidenced
by a certificate. Large-denomination CD’s
are typically negotiable.

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

Annual Comprehensive Financial Report
(ACFR): The official annual report for the
City of Tulare. It includes five combine
statements for each individual fund and
account group prepared in conformity with
GAAP. It also includes supporting
schedules necessary to demonstrate
compliance with finance-related legal and
contractual provisions, extensive
introductory material, and a detailed
Statistical Section.

Coupon: (a) The annual rate of interest that
a bond’s issuer promises to pay the
bondholder on the bond’s face value. (b) A
certificate attached to a bond evidencing
interest due on a payment date.

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

Debenture: A bond secured only by the
general credit of the issuer.

Delivery versus Payment: There are two
methods of delivery of securities: delivery
versus payment and delivery versus receipt.

Delivery versus payment is delivery of
securities with an exchange of money for the
securities. Delivery versus receipt is
delivery of securities with an exchange of a
signed receipt for the securities.

Derivatives: (1) Financial instruments
whose return profile is linked to, or derived
from, the movement of one or more
underlying index or security, and may
include a leveraging factor, or (2) financial
contracts based upon notional amounts
whose value is derived from an underlying
index or security (interest rates, foreign
exchange rates, equities or commodities).

Discount: The difference between the cost
price of a security and its maturity when
quoted at lower than face value. A security
selling below original offering price shortly
after sale also is considered to be at a
discount.

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CITY OF TULARE INVESTMENT POLICY
12 Diversification: Dividing investment funds
among a variety of securities offering
independent returns.

Federal Credit Agencies: Agencies of the
Federal government set up to supply credit
to various classes of institutions and
individuals, e.g., S&L’s, small business
firms, students, farmers, farm cooperatives,
and exporters.

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

Federal Funds Rate: The rate of interest at
which Fed funds are traded. This rate is
currently pegged by the Federal Reserve
through open-market operations.

Federal Home Loan Banks (FHLB):

Government sponsored wholesale banks
(currently 12 regional banks) which lend
funds and provide correspondent banking
services to member commercial banks, thrift
institutions, credit unions and insurance
companies. The mission of the FHLB is to
liquefy the housing related assets of its
members who must purchase stock in their
district Bank.

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

Federal Open Market Committee
(FOMC): Consists of seven members of
the Federal Reserve Board and five of the
twelve Federal Reserve and Presidents. The
President of the New York Federal Reserve
Bank is a permanent member, while the
other Presidents serve on a rotating basis.

The Committee periodically meets to set
Federal Reserve guidelines regarding
purchases and sales of Government
Securities in the open market as a means of
influencing the volume of bank credit and
money.

Federal Reserve System: The central bank
of the United States created by Congress and
consisting of a seven-member Board of
Governors in Washington, D.C., 12 regional
banks and about 5,700 commercial banks
that are members of the system.

Government National Mortgage
Association (GNMA or Ginnie Mae):

Securities influencing the volume of bank
credit guaranteed by GNMA and issued by
mortgage bankers, commercial banks,
savings and loan associations, and other
institutions. Security holder is protected by
full faith and credit of the US Government.

Ginnie Mae securities are backed by the
FHA, VA or FmHA mortgages. The term
“pass-throughs” is often used to describe
Ginnie Maes.

Issuer: Any corporation, government unit
or financial institution which borrows
money through the sale of securities.

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

Local Agency Investment Fund (LAIF):

A special fund in the State Treasury which
local agencies may use to deposit funds for
investment. All interest is distributed to
those agencies participating on a
proportionate share determined by the
amounts deposited and the length of time
they are deposited. Interest is paid quarterly
via direct deposit to the LAIF account. The
State keeps an amount for reasonable costs
of making the investments, not to exceed
one-quarter of one per cent of the earnings.

Local Government Investment Pool
(LGIP): The aggregate of all funds from
political subdivisions that are pooled
together for investment and reinvestment.

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

Master Repurchase Agreement: A written
contract covering all future transactions
between the parties to repurchase – reverse
repurchase agreements that establishes each
party’s rights in the transactions. A master
agreement will often specify, among other
things, the right of the buyer-lender to
liquidate the underlying securities in the
event of default by the seller-borrower.

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

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

Mutual Funds: Referred to in the
Government Code, Section 53601(l) as
“shares of beneficial interest issued by
diversified management companies.” The
Mutual Fund must be restricted by its bylaws to the same investments as the local agency by the Government Code. These
investments are Treasury issues, Federal
Agency issues, State of California and City
(within California) debt obligations, Bankers
Acceptances, Commercial Paper,
Certificates of Deposit, Negotiable
Certificates of Deposit, Repurchase
Agreements, Reverse Repurchase
Agreements, and Medium-Term Corporate
Notes. The quality rating and percentage
restrictions in each investment category
applicable to the local agency also apply to
the Mutual Fund.

Negotiable: Term used to designate a
security, the title to which is transferable by
delivery.

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

Open Market Operations: Purchases and
sales of government and certain other
securities in the open market by the New
York Federal Reserve Bank as directed by
the FOMC in order to influence the volume
of money and credit in the economy.

Purchases inject reserves into the bank
system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve’s
most important and most flexible monetary
policy tool.

Portfolio: Collection of securities held by
an investor.

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

Principal: Describes the original cost of a
security. It represents the amount of capital
or money which the investor pays for the
investment.

Prudent Person Rule: An investment
standard. In some states the law requires
that a fiduciary, such as a trustee, may invest
money only in a list of securities selected by
the custody state – the so-called legal list. In
other states the trustee may invest in a
security if it is one which would be bought
by a prudent person of discretion and
intelligence who is seeking a reasonable
income and preservation of capital.

Qualified Public Depositories: A financial
institution which does not claim exemption
from the payment of any sales or
compensating use or ad valorem taxes under
the laws of this state, which has segregated
for the benefit of the commission eligible
collateral having a value of not less than its
maximum liability and which has been
approved by the State to hold public
deposits.

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

Repurchase Agreement (RP or Repo): A
holder of securities sells these securities to
an investor with an agreement to repurchase
them at a fixed price on a fixed date. The
security “buyer” in effect lends the “seller”
money for the period of the agreement, and
the terms of the agreement are structured to
compensate him for this. Dealers use RP
extensively to finance their positions.

Exception: When the Fed is said to be doing
RP, it is lending money, that is, increasing
bank services.

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

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

Security: An investment instrument, other
than an insurance policy or fixed annuity,
issued by a corporation, government, or
other organization which offers evidence of
debt or equity.

Securities & Exchange Commission:

Agency created by Congress to protect
investors in securities transactions by
administering securities legislation.

SEC Rule 15C3-1: See Uniform Net
Capital Rule.

Structured Notes: Notes issued by
Government Sponsored Enterprises (FHLB,
FNMA, SLMA, etc.) and Corporations
which have imbedded options (e.g., call
features, step-up coupons, floating rate
coupons, derivative-based returns) into their
debt structure. Their market performance is
impacted by the fluctuation of interest rates,
the volatility of the imbedded options and
shifts in the shape of the yield curve.

Treasury Bills: A non-interest-bearing
discount security issued by the US Treasury
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CITY OF TULARE INVESTMENT POLICY
15 to finance the national debt. Most bills are
issued to mature in three months, six
months, or one year.

Treasury Notes: Medium-term couponbearing US Treasury securities issued as direct obligations of the US Government and
having initial maturities from two to ten
years.

Uniform Net Capital Rule: Securities &
Exchange Commission (SEC) requirement
that member firms as well as nonmember
broker-dealers in securities maintain a
maximum ratio of indebtedness to liquid
capital of 15 to 1; also called net capital rule
and net capital ratio. Indebtedness covers all
money owed to a firm, including margin
loans and commitments to purchase
securities, one reason new public issues are
spread among member of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.

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

Agenda Packet for February 4, 2025 Page 134
Revised 12/15/2015

CITY OF TULARE

STATEMENT OF INVESTMENT POLICY
Calendar Year 2016

PURPOSE
This statement is intended to provide guidelines for the prudent investment of the City’s temporary idle cash and to outline the policies for maximizing the efficiency of the City’s cash management system. The ultimate goal is to provide additional interest income revenues to City funds while protecting its pooled cash.

OBJECTIVE
The City’s cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible.

The City attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity. Investments shall be made which insure the following management objectives:

1. The safeguarding of assets.

2. The prevention or detection of errors and fraud.

3. The accuracy and completeness of the investment accounting records.

4. The timely preparation of reliable financial reports of the investment portfolio.

POLICY
The City of Tulare operates its temporary pooled idle cash investments under the prudent man rule (Civil Code Section 2261, et. seq,). This affords the City a broad spectrum of opportunities as long as the investment is deemed prudent and allowable under current legislation of the State of California (Government Code Section 53600 et. seq.).

INVESTMENT GUIDELINES
Criteria for selecting investments and the order of priority established shall be as follows:

1. Safety. Safety is the primary element in an investment strategy. The safety and risk associated with an investment refers to the preservation and protection of capital. The City only utilizes those investments that are considered safe.

2. Liquidity. This refers to the ability to convert an investment to cash with a minimal chance of losing some portion of principal. Liquidity is an important investment feature, especially when meeting the expenditure needs of the annual budget in a timely manner.

Investment Policy, Page 1 of 5
Exhibit B
Agenda Packet for February 4, 2025 Page 135
Investment Policy, Page 2 of 5

3. Yield. Yield is the annual rate of return on an investment, expressed as a percentage of the investment. Attempts should be made to obtain the highest yield possible, provided the criteria for safety and liquidity are met.

INVESTMENT INSTRUMENTS
The following are allowable instruments of investment for the City of Tulare with their corresponding definitions:

1. Time Certificates of Deposit (TCD). TCDs shall be made only with banks and savings and loan institutions which are insured by the FDIC. A standard form Contract for deposit is required for each TCD. The Treasurer may waive security for amounts insured by FDIC to a maximum of $100,000.00. Purchase of negotiable certificates of deposit shall not exceed 30% of the City’s investment funds.

2. Local Agency Investment Funds (LAIF). LAIF is managed by the State of California Treasurer’s office with total investments from any one individual agency not to exceed $50 million or the maximum as amended from time to time. No more than fifteen (15) transactions per month per account are allowed by LAIF. A minimum transaction is $5,000.00, thereafter in increments of $1,000.00.

3. Bankers Acceptances (BA). BAs are bills of exchange or time drafts which are drawn on and accepted by a commercial bank and are eligible for purchase by the federal reserve system. By its acceptance, the bank becomes primarily liable for the payment of the draft at its maturity. This bank liability makes the bankers acceptance a readily marketable instrument. The restrictions on the use of bankers acceptance areas follows:
a. Purchase of BAs may not exceed 180 (180) days maturity or 40% of the agency’s surplus funds.
b. No more than 30% of the City’s total investment in BAs may be invested in BAs of any one commercial bank.

4. Treasury Bonds and Notes. Treasury bonds and notes are obligations of the U.S.

Government which bear interest. Notes have maturities of two to ten years while bonds have longer maturities.

5. Treasury Bills (T-Bills). T-Bills are obligations of the U.S. Government with a maturity of one year or less. T-Bills bear no interest, but are sold at discount.

Agenda Packet for February 4, 2025 Page 136
Investment Policy, Page 3 of 5

6. Federally Sponsored Agency Securities. The City may invest funds in debt securities of the following United States Government sponsored agencies:
a. Government National Mortgage Association
b. Federal National Mortgage Association
c. Federal Home Loan Mortgage Corporation
d. Federal Home Loan Bank
e. Other similar agencies

7. Repurchase Agreements (Repos). Repurchase agreements represent agreements to purchase securities that will be repurchased at a future date for a specific price.

Investments in repos shall not exceed ninety (90) days. Physical delivery of the securities backing the repo or safekeeping documentation to a qualified safekeeping institution is required.

8. Medium Term Notes/Corporate Bonds. These notes have a maximum of five years maturity and are issued by corporations organized and operating within the United States. To be eligible for investment by the City, notes must be rated A or better by a nationally recognized rating service. Purchases of medium term notes may not exceed 30 per cent of the City’s surplus funds.

9. Mutual Funds. Mutual Funds are described in Section 53635 (k) of the Government Code as “Shares of Beneficial Interest issued by diversified management companies”...investing in securities and obligations as authorized by 53600 et. Seq.

In addition to specific restrictions in the Government Code, purchases of this investment type shall not exceed 15 per cent of the City’s surplus funds.

10.Passbook Savings Account Demand Deposits. Savings accounts shall be maintained only with banks and savings and loan institutions which are insured by FDIC.

11.Commercial Paper. Commercial Paper refers to prime quality, highest rated short term, unsecured, negotiable promissory notes issued by corporations, subject to the current provisions contained in Section 53635 (g) of the Government Code.

Purchases of this investment type may not exceed 25 per cent of the City’s surplus funds.

12.Zero Coupon Bonds. Zero Coupon Bonds may be purchased only for purposes of bond defeasance or future capital improvement projects.

13.Central San Joaquin Valley Risk Management Authority (CSJVRMA) Investment Pool.

As member city of the CSJVRMA, the City would like the opportunity to participate in its sponsored investment pool. The pool is managed by Chandler Asset Management and invests in agency instruments such as Federal Home Loan Bank, treasuries and high-grade corporate stock. Funds are available on demand, with interest paid quarterly.

Agenda Packet for February 4, 2025 Page 137
Investment Policy, Page 4 of 5
It is the policy of the City of Tulare that no City funds shall be invested, committed or otherwise obligated from and after the revised effective date of this policy, in the following types of securities:

1. Margin Account Purchases

2. Zero Coupon Bonds, if for trading purposes only
The following general criteria shall be used when investing City funds:

1. All investments of the City shall have the City of Tulare as the registered owner and shall be kept in the custody of the City or the trust department of its designated third party, safekeeping institution.

2. If securities are kept by a safekeeping institution, the City shall have access to buy and sell such securities independently of any broker. While in safekeeping, the City shall have on file from its designated bank a written statement that the City has a “perfected interest” in all securities held in the trust department. The trust department may be required to send the City a periodic statement of what is being held in safekeeping.

3. Investments shall be diversified among institutions, types of securities and maturity dates to maximum safety and yield with market conditions and to satisfy liquidity needs.

4. Investment shall not knowingly be made in any financial institution that practices or supports, directly or indirectly through its actions, discrimination on the basis of race, religion, color, creed, nationality or ethnic origin, age, sex or physical disability.

5. The Finance Director/Treasurer shall report monthly to the City Manager, the City Council, the Board of Public Utilities Commissioners, and the Tulare Redevelopment Agency the type of investments, financial institutions (issuers), rate of interest or yield, date of maturity, par value, cost of investment, and current market value (and source of market value) of all securities in the portfolio. In addition, the report shall also include those funds under management of contracted parties (fiscal agents, trustees, deferred compensation administrators, etc.). The report shall also state that the portfolio is in compliance with this statement of investment policy and shall include a statement that the city is able to meet its expenditure requirements for the next six months or explain why not.

6. Competitive bids/quotes are to be obtained and documented on all investments when practical.

7. Investments in and divestitures of securities other than TCD’s, LAIF, Bankers Acceptances, Treasury Notes and Bills, Repos, Medium Term Notes Mutual Funds, Passbook Savings Accounts, and Commercial Paper shall be approved by the Investment Review Committee prior to making the transaction.

Agenda Packet for February 4, 2025 Page 138
Investment Policy, Page 5 of 5

8. Section 53601 of the Government Code allows the investment of surplus funds in the City’s treasury in specified types of securities provided that, at the time of investment, the securities have a maturity of five years or less, unless the legislative body has granted express authority to make that investment either specifically or as a part of the Investment Policy approved by the legislative body no less than three months prior to the investment. It is a herein authorized as a part of the current investment policy to invest in securities with an estimated average life of five years or less, except for Commercial Paper which may not have a maturity of greater than 180 days. It is also authorized to invest in securities with a maturity greater than five years, but only when authorized by the City Council no less than three months prior to the investment.

9. The Statement of Investment Review Policy shall be presented to the City Council annually for review and adoption.

INVESTMENT REVIEW COMMITTEE
There is hereby established an Investment Review Committee. The membership of this committee shall consist of the Finance Director/Treasurer, the City Manager or his/her designee, the Mayor or his/her designee and the President of the Board of Public Utilities Commissioners or his/her designee. The purpose of this committee shall be to review investments, formulate investment strategy and insure adherence to this policy. This committee shall meet at least quarterly or more frequently when deemed necessary.

PHILOSOPHY OF INVESTMENT
The City strives to maintain the level of investment of all funds as near 100% as possible, utilizing the prioritized guidelines of safety, liquidity and yield. Cash management and investment transactions are the responsibility of the Finance Director/Treasurer. ___________________________
Darlene J. Thompson, CPA
Finance Director/Treasurer
February 02, 2016
Council review date
(effective date)
Agenda Packet for February 4, 2025 Page 139
City of Tulare
Agri-Center of the World

COUNCIL ITEM REQUEST FORM
The Council Item Request Form is for members of the City Council to submit written requests to the City Clerk’s Office for inclusion of an item on a future City Council meeting agenda. At the meeting where the initial written request is heard, discussion shall be limited to whether the item should be added to an agenda and a date, not the merit of the item. A majority vote of the City Council is required for the item to be added to a future Council meeting agenda for action. No more than 10 items may be submitted collectively for consideration by all councilmembers at any regular meeting of the Council, and in that regard, no individual councilmember may submit more than three items for consideration at any regular meeting of the Council. In the event more than 10 items are submitted collectively, no more than two items shall be accepted for consideration from any one councilmember.

NAME OF REQUESTING COUNCILMEMBER TODAY’S DATE AGENDA DATE

ITEM TITLE

BRIEF DESCRIPTION/BACKGROUND INFORMATION OF ITEM
Item #: 16.1
Future Agenda Item
Agenda Packet for February 4, 2025 Page 140

Tulare City CouncilFebruary 4, 2025

Tulare City Council
February 4, 2025