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Home My WebLink About FULL PACKET_2018-07-3MINUTES OF THE REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA JUNE 19, 2018 CLOSED SESSION MEETING CALLED TO ORDER COUNCIL CHAMBER 22 CIVIC CENTER PLAZA 5:14 P.M. ATTENDANCE COUNCILMEMBERS Present: MIGUEL A. PULIDO, Mayor MICHELE MARTINEZ, Mayor Pro Tem (5:16 p.m._ VICENTE SARMIENTO JOSE SOLORIO SAL TINAJERO (5:17 p.m.) JUAN VILLEGAS COUNCILMEMBERS Absent: P. DAVID BENAVIDES STAFF Present: RAUL GODINEZ, II, City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council PUBLIC COMMENTS - None COUNCIL RECESSED to Room 147 for Closed Session discussion at 5:14 P.M. CLOSED SESSION ITEMS - The Brown Act permits legislative bodies to discuss certain matters without members of the public present. The City Council finds, based on advice from the City Attorney, that discussion in open session of the following matters will prejudice the position of the City in existing and anticipated litigation: 1. CONFERENCE WITH LABOR NEGOTIATOR pursuant to Government Code Section 54957.6(a): Agency Negotiators: Peter Brown, Liebert Cassidy and Steven V. Pham, Executive Director of Human Resources CITY COUNCIL MINUTES 1 JUNE 19, 2018 10A-1 Employee Organizations: • Santa Ana Police Officers Association (POA) • Service Employees' International Union (SEIU) Part -Time 2. CONFERENCE WITH LEGAL COUNSEL -EXISTING LITIGATION pursuant to paragraph (1) of subdivision (d) of Section 54956.9 of the Government Code: a. Orange County Catholic Worker, et al. v. Orange County, et al.., U.S. District Court (Central District of California), Case No. SA CV 18 -0155 -DOC (KESx) b. Theresa Le v. City of Santa Ana, et al., Orange County Superior Court, Case No. 30-2018-00988425-C U -C R-CJC CLOSED SESSION REPORT - The City Attorney will report on any action(s) to be taken at the Regular Meeting which will begin immediately following the Closed Session Meeting. ADJOURNED CLOSED SESSION AND CONVENED TO THE REGULAR OPEN SESSION. AT 6:23 P.M. CITY COUNCIL MINUTES 2 JUNE 19, 2018 10A-2 CALLED TO ORDER REGULAR OPEN MEETING COUNCIL CHAMBER 22 CIVIC CENTER PLAZA SANTA ANA, CA 6:25 P.M. ATTENDANCE COUNCILMEMBERS Present: MIGUEL A. PULIDO, Mayor MICHELE MARTINEZ, Mayor Pro Tem P. DAVID BENAVIDES (7:51 P.M.) VICENTE SARMIENTO JOSE SOLORIO SAL TINAJERO JUAN VILLEGAS PLEDGE OF ALLEGIANCE INVOCATION CEREMONIAL PRESENTATIONS COUNCILMEMBERS Absent: STAFF Present: RAUL GODINEZ, II, City Manager SONIA R. CARVALHO, City Attorney MARIA D. HUIZAR, Clerk of the Council MAYOR PULIDO BOB BARNETT, POLICE CHAPLAIN • PROCLAMATION presented by COUNCILMEMBER VILLEGAS declaring the rights of all students to equity in arts learning. • PROCLAMATION presented by COUNCILMEMBER SARMIENTO FOR BENAVIDES naming June as Alzheimer's and Brain Awareness Month. CLOSED SESSION REPORT - There was no reportable action. PUBLIC COMMENTS • Ginelle Hardy, urged City Council to allow Planning Commissioner Phil Becerra to serve the remaining term. CITY COUNCIL MINUTES 3 JUNE 19, 2018 10A-3 • Carl Benninger, expressed support for Commissioner Becerra and expressed opposition to proposed action. • Tish Leon, opined that Commissioner Becerra being punished for asking questions regarding new restaurant, Cevicheria. • Mike Tardiff, opposed to removal of commissioner, should be justifiable. CONSENT CALENDAR ITEMS MOTION; Approve staff recommendations on the following Consent Calendar items 10A through 29A, with the following modifications: • Mayor Pulido pulled Agenda Item 13C for Councilmember Benavides to attend meeting; • Councilmember Sarmiento pulled Agenda Item 19D; • Councilmember Solorio pulled Agenda Items 13A and 13B for joint consideration with 13A and 13B; and • Clerk of the Council noted that Agenda Item 20A - requires five affirmative votes and held off until five members present for consideration. MOTION: Villegas VOTE: AYES: NOES: ABSTAIN ABSENT: MINUTES SECOND: Sarmiento Pulido, Sarmiento, Solorio, Villegas (4) None (0) None (0) Benavides, Martinez, Tinajero (3) ADMINISTRATIVE MATTERS 10A. MINUTES FROM THE REGULAR MEETING OF JUNE 5, 2018 {STRATEGIC PLAN NO. 5, 1 } — Clerk of the Council Office MOTION: Approve Minutes. CITY COUNCIL MINUTES 4 JUNE 19, 2018 10A-4 ORDINANCES/SECOND READING 11A. ADOPT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA UPDATING SOLAR STREAMLINING ORDINANCE FOR SOLAR ENERGY SYSTEMS, ESTABLISH REVISED MAXIMUM FEES FOR SOLAR ENERGY SYSTEMS, AND ESTABLISH MAXIMUM PERMIT FEES FOR THERMAL ENERGY SYSTEMS, EXTENDING APPLICABILITY OF LIMITS ON SOLAR ENERGY SYSTEM FEES AND EXTENDING REPEAL DATE TO JANUARY 1, 2025 {STRATEGIC PLAN NO. 5, 11 - Clerk of the Council Office Placed on first reading at the June 5, 2018 City Council meeting and approved by a vote of 5-0 (Martinez and Sarmiento absent). Published in the Orange County Reporter on June 8, 2018. MOTION: Place ordinance on second reading and adopt. ORDINANCE NO. NS -2950 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING CHAPTER 8 OF THE SANTA ANA MUNICIPAL CODE UPDATING SOLAR STREAMLINING ORDINANCE FOR SOLAR ENERGY SYSTEMS AGENDA ITEMS 13A -13C CONSIDERED OUT OF ORDER, MISCELLANEOUS ADMINISTRATION 19A. CONFIRMATION OF CLOSED SESSION ACTION(S) — None 19B. EXCUSED ABSENCES — None 19C. STRATEGIC PLAN MONTHLY REPORT FOR MAY 2018 (STRATEGIC PLAN NO. 5, 1) — City Manager's Office The Strategic Plan Monthly Reports are available on the City's website at: http://www. santa-ana. o rg/strategic-planning/. MOTION: Receive and file. ** Councilmember Tinajero teleconferenced at 7:14 p.m. and participated in the meeting from Residence Inn Weston Ft. Lauderdale, 2605 Weston Road, Weston, FL 33331. CITY COUNCIL MINUTES 5 JUNE 19, 2018 10A-5 Councilmember Sarmiento, asked how requests for proposals were drafted and availability of funds included in proposal; opined funds and resources to address homelessness is the primary role of the County; noted that in -lieu funds ordinance drafted to ensure larger inventory of affordable housing to possibly avoid homelessness; asked if time sensitive matter. Motion to table consideration until the County solves the homeless problem, seconded by Councilmember Solorio. Executive Director of Community Development Mendoza, noted funds are being reserved to deal with homelessness and possibility of funds being used in the future; noted that in -lieu funds are the most flexible use of funds; deadline to release is July 1St City Manager Godinez, commented that proposal discussed with County would allow possibility of acquiring property, funding source may help start process. Noted that proposal would allow for a 90 day continued review of proposals. Housing Manager Brown, noted that continuance would limit the $6 million vouchers. Mayor Pulido, requested reconsideration to allow for some projects to continue. Councilmember Sarmiento, willing to reconsider motion to allow the in -lieu funds maintain original purpose which is affordable housing. City Attorney Carvalho, mentioned that potential consideration may be to use in - lieu funds to provide different types of affordable housing and may be in the form of a shelter or alternative housing project; $6.1 million bid out and additional $3.1 million in 90 days after negotiations with the County. AMENDED MOTION: Authorize the Community Development Agency to release a Fiscal Year 2018 — 2019 Request for Proposals seeking proposals to develop affordable rental and ownership project(s) in the City of Santa Ana with funding from the HOME Investment Partnerships Program, Community Development Block Grant Program, Project Based Voucher Program, and Housing Successor Agency Fund; including the $3.1 million. MOTION: Sarmiento SECOND: Solorio VOTE: AYES: Pulido, Sarmiento, Solorio, Tinajero, Villegas (5) NOES: None (0) CITY COUNCIL MINUTES 6 JUNE 19, 2018 10A-6 ABSTAIN: None (0) ABSENT: Benavides, Martinez (2) AGENDA ITEM 20A CONSIDERED OUT OF ORDER. MOTION: Approve appropriation adjustments. (Requires five affirmative votes) 1. APPROPRIATION ADJUSTMENT - Recognizing additional Housing Choice Voucher Program funds in the amount of $2,771,060 in revenue account (nos. 13618002-52000 and 13718002-52000) and appropriating the same amount to expenditure accounts (nos. 13618760 -various and 13718760 - various). 2. APPROPRIATION ADJUSTMENT - Recognizing additional HOME Investment Partnerships Program funds in the amount of $6,083 in revenue account (no. 13018002-52000) and appropriate same to reserve appropriation account (no. 13018780-69011). MOTION: Solorio SECOND: Tinajero VOTE: AYES: Pulido, Sarmiento, Solorio, Tinajero, Villegas (5) NOES: None (0) ABSTAIN: None (0) ABSENT: Benavides, Martinez (2) SPECIFICATIONS — PURCHASE OF EQUIPMENT AND SERVICES 22A. AWARD PURCHASE ORDER TO GUARANTY CHEVROLET MOTORS INC. FOR A CHEVROLET SILVERADO CREW LEADER TRUCK - SPEC. NO. 18 - CITY COUNCIL MINUTES 7 JUNE 19, 2018 10A-7 005 {STRATEGIC PLAN NO. 6, 2) — Finance and Management Services Agency; and Public Works Agency MOTION: Authorize a one-time purchase and payment of purchase order to Guaranty Chevrolet Motors Inc., for the procurement of one Chevrolet Silverado truck with a low profile WorkPod insert in the amount of $52,659.20, subject to non -substantive changes approved by the City Manager and City Attorney. 22B. AWARD PURCHASE ORDER TO MCCAIN, INC. FOR TRAFFIC SIGNAL CABINETS - SPEC. NO. 18-039 STRATEGIC PLAN NO. 6, 1C) — Finance and Management Services Agency; and Public Works Agency MOTION: Authorize a one-time purchase and payment of purchase order to McCain, Inc. for the purchase of seven traffic signal control cabinets in an amount not to exceed $53,400, subject to nonsubstantive changes approved by the City Manager and City Attorney. AGREEMENTS 25A. APPROVAL OF VARIOUS HISTORIC PROPERTY PRESERVATION AGREEMENTS (STRATEGIC PLAN NO. 5, 2; 5, 3) — Planning and Building Agency MOTION: Authorize the City Manager and Clerk of the Council to execute the attached Mills Act agreements with the below -referenced property owners for the Identified structures, subject to non -substantive changes approved by the City Manager and City Attorney. CITY COUNCIL MINUTES 8 JUNE 19, 2018 10A-8 Property Owner(s) Historic Prop. Pres. Agmt. No. Address Vote by HRC Agmt. No. 1. Santo Puzzo Jr. 2017-54 1110 W. 6:0 (Nguyen & 2018-152 & Carol H. Frank Sixteenth Tardif absent) St. 2. Eric W. Wittman 2017-56 1615 N. 6:0 (Nguyen 2018-153 Freeman & Tardif Lane absent) 3. Randy J. & Maria 2017-58 1815 N. 6:0 (Nguyen 2018-154 G. Hamilton Heliotrope & Tardif Dr. absent) 4. Mark Phillip & 2017-67 2377 N. 5:0 (Nguyen 2018-155 Marilyn Bernaudo Flower St. & Tardif Delgado absent; CITY COUNCIL MINUTES 8 JUNE 19, 2018 10A-8 Murashie abstained) 25B. APPROVE AN AGREEMENT WITH HCI ENVIRONMENTAL & ENGINEERING SERVICE FOR POLICE DEPARTMENT FIRING RANGE CLEANING {STRATEGIC PLAN NO. 1, 3A) — Police Department MOTION: Authorize the City Manager and Clerk of the Council to execute a three-year agreement with HCI Environmental & Engineering Service for police firing range cleaning and ventilation system filter replacement, for the period of July 1, 2018, through June 30, 2021, in an amount not to exceed $204,518, which includes a 10 percent contingency ($18,593), subject to non -substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-156). 25C. APPROVE AMENDMENT TO AGREEMENT WITH LINEAR SYSTEMS FOR ANNUAL MAINTENANCE AND SUPPORT OF POLICE DIGITAL IMAGING SYSTEM {STRATEGIC PLAN NO. 1, 3A) — Police Department MOTION: Authorize the City Manager and Clerk of the Council to execute a two-year amendment to the existing agreement with Linear Systems for the maintenance and support of the Digital Imaging Management System (DIMS), for the period of July 1, 2018 through June 30, 2020, in an amount not to exceed $20,000 per year for two years, plus a $10,000 contingency, subject to non -substantive changes approved by the City Manager and City Attorney. This $50,000 amount is being added to the original agreement amount of $23,000, for a total not to exceed agreement amount of $73,000 (Agmt. No. 2018-157). 25D. APPROVE AN AGREEMENT WITH SERCO INC. TO PROVIDE PARKING ENFORCEMENT SERVICES FOR THE POLICE DEPARTMENT {STRATEGIC PLAN NO. 1, 51 — Police Department MOTION: Authorize the City Manager and the Clerk of the Council to execute a two-year agreement for the period of July 1, 2018 through June 30, 2020, with the option of three (3) one-year extensions, with Serco Inc. for parking enforcement services in the amount of $1,324,780.16, including a 10 percent ($120,434.56) contingency, subject to non -substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018- 158). 25E. APPROVE AGREEMENTS FOR ON-CALL ENGINEERING SERVICES (NON - GENERAL FUND) {STRATEGIC PLAN NO. 6, 1 G) — Public Works Agency CITY COUNCIL MINUTES 9 JUNE 19, 2018 10A-9 MOTION: 1. Authorize the City Manager and Clerk of the Council to execute agreements with each of the firms listed below, to provide on-call engineering services for general engineering projects for a -three year term expiring June 18, 2021, with one, two-year extension exercisable by the City Manager and the City Attorney, for a total aggregate amount not to exceed $2,000,000 for the term of the entire contract and subject to nonsubstantive changes approved by the City Manager and the City Attorney (Agent. No. 2018-159). a. Kimley-Horn b. Huitt-Zollars c. CSG d. Anderson Penna e. NV5 f. TAIT g. Mark Thomas h. Wllldan I. Stantec 2. Authorize the City Manager and Clerk of the Council to execute agreements with each of the firms listed below, to provide on-call engineering services for water resources projects for a three-year term expiring June 18, 2021, with one, two-year extension exercisable by the City Manager and the City Attorney, for a total aggregate amount not to exceed $1,200,000 for the term of the entire contract and subject to nonsubstantive changes approved by the City Manager and the City Attorney (Agmt. No. 2018-160). a. Kimley-Horn b. Tetra Tech, Inc. c. Huitt-Zollars d. NV5 e. Willdan 25F. AUTHORIZE FIRST AMENDED AGREEMENT FOR SALES AND USE TAX REVENUE AUDITING AND CONSULTING SERVICES WITH MUNISERVICES, LLC {STRATEGIC PLAN NO. 4, 2A) — Finance and Management Services Agency MOTION: Authorize the City Manager and Clerk of the Council to execute a First Amended Agreement ("Amended Agreement") with MuniServices, LLC ("MuniServices") for Sales and Use Tax Revenue Auditing and Consulting Services for a period of two and one-half (2%) years. Amended Agreement to become effective July 1, 2018 through December 31, 2020 for a stated amount, subject to an annual CPI adjustment of not less than CITY COUNCIL MINUTES 10 JUNE 19, 2018 10A-10 two percent (2%) or greater than four percent (4%), not to exceed a total amount of $12,000 annually; plus 15% of recovered sales tax revenues over the life of the Amended Agreement, with a contingency of up to $100,000 to cover other consulting services subject to non -substantive changes approved by the City Manager and the City Attorney (Agmt. No. 2018-161). 25G. APPROVE PURCHASE AGREEMENT FOR REAL PROPERTY ACQUISITION FOR LOCATED AT 1241 WEST SAINT ANNE PLACE (APN 015-215-10) FOR BRISTOL STREET IMPROVEMENTS PHASE 4 (PROJECT NO. 116741, NON - GENERAL FUND) {STRATEGIC PLAN NOS. 6, 1G; 3, 2C} — Public Works Agency MOTION: Authorize the City Manager and Clerk of the Council to execute Purchase Agreement with Qwan Capital for the real property located at 1241 West Saint Anne Place (APN 015-215.10) for Partial Acquisition, temporary construction easement, and goodwill (if any) in the amount of $20,500 subject to nonsubstantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-162). 25H. AWARD YOUTH PROVIDER AGREEMENTS TO THE ORANGE COUNTY CHILDREN'S THERAPEUTIC ARTS CENTER, THE ORANGE COUNTY CONSERVATION CORPS, AND THE SANTA ANA PUBLIC LIBRARY FOR PROGRAM YEAR 2018-2019 {STRATEGIC PLAN NO. 2, 4}— Community Development Agency MOTION: Authorize the City Manager and Clerk of Council to execute contracts and memorandum of understanding for a total amount of $484,445 with the following Youth Service Providers for a one-year term beginning July 1, 2018 through June 30, 2019 subject to final funding notification for Grant Year 2018 from the United States Department of Labor and the California Employment Development Department and allow non -substantive changes approved by the City Manager and City Attorney: 1. Orange County Children's Therapeutic Arts Center - $184,000 - To provide occupational skills training in the areas of office administration, mental health paraprofessional, and childcare worker certification, job preparation, paid work experience, tutoring, mentoring, counseling, and supportive services, for 22 youth (Agent. No. 2018-163); 2. Orange County Conservation Corps - $180,000 - To provide alternative secondary education that leads to a high school diploma, credential training in forklift operator, safe food handling, customer service, computer software, job preparation, paid work experience, post - CITY COUNCIL MINUTES 11 JUNE 19, 2018 10A-11 secondary education resources, and support services for 22 youth (Agmt. No. 2018-164); 3. Santa Ana Public Library - $120,445 - To provide post -secondary occupational skills training in the areas of digital technology, computer maintenance and repair, paid work experience, leadership development, tutoring, and mentoring for 15 youth (Agmt. No. 2018- 165). 251. APPROVE AN AGREEMENT WITH COMMUNITY SENIORSERV INC. FOR SENIOR MEALS PROGRAMS {STRATEGIC PLAN NO. 5, 6E) — Parks, Recreation and Community Services Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Community SeniorServ, Inc. for Senior Meals Programs in the amount of $90,290 for the period from the effective date of the agreement through June 30, 2019, subject to non -substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-166). 25J. APPROVE AN AGREEMENT WITH MARIPOSA LANDSCAPE, INC. FOR LANDSCAPE SERVICES AT PACIFIC ELECTRIC PARK AND ROOSEVELT - WALKER COMMUNITY CENTER {STRATEGIC PLAN NO. 6, 113) — Parks, Recreation and Community Services Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Mariposa Landscape, Inc. to provide landscape maintenance services at Pacific Electric Park and Roosevelt -Walker Community Center for an amount not to exceed $17,667.03, which includes a ten percent contingency, for a term from July 1, 2018 through January 31, 2019, with two, one-year renewal options for amounts not to exceed $32,600.70 and $34,643.40, respectively, which include a ten percent contingency, for a total agreement amount of $84,911.13, subject to non - substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-167). 25K. APPROVE AN AGREEMENT WITH SUPERIOR PROPERTY SERVICES, INC. FOR HARDSCAPE PAVEMENT CLEANING AND INFECTIOUS WASTE REMOVAL SERVICES IN THE SANTA ANA CIVIC CENTER (STRATEGIC PLAN NO. 6, 1 B) — Parks, Recreation and Community Services Agency MOTION: Authorize the City Manager and Clerk of the Council to execute an agreement with Superior Property Services, Inc. to provide hardscape pavement cleaning and infectious waste removal services for an annual amount not to exceed $274,656, which includes a 20% contingency, for a CITY COUNCIL MINUTES 12 JUNE 19, 2018 10A-12 term from July 1, 2018 through June 30, 2020, with two, one-year renewal options, subject to non -substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-168). 25L. APPROVE AGREEMENT WITH OCCU-MED, LTD. FOR MEDICAL SERVICES FOR CITY EMPLOYEES AND PRE-EMPLOYMENT ASSESSMENTS {STRATEGIC PLAN NO. 7, 5E) — Human Resources Department MOTION: Authorize the City Manager and Clerk of Council to execute an agreement with Occu-Med Ltd., subject to non -substantive changes approved by the City Manager and City Attorney, to provide comprehensive medical services to City employees and pre-employment assessments for prospective employees for the period of July 1, 2018 through June 30, 2019, in the amount not to exceed $115,000 (Agent. No. 2018-169). 25M. AUTHORIZE FOURTH AMENDED AGREEMENT FOR MERCHANT PAYMENT SERVICES WITH ISYS MERCHANT SOLUTIONS, LLC (FORMERLY TRANSFIRST, LLC) {STRATEGIC PLAN NO. 4, 1; 7, 5F) — Finance and Management Services Agency MOTION: Authorize the City Manager and Clerk of the Council to execute a one-year amended agreement with TSYS Merchant Solutions, LLC, ("TSYS") effective July 1, 2018 through June 30, 2019, with two, one-year extension options at the election of the City, for an amount not to exceed $165,000 annually subject to non -substantive changes approved by the City Manager and City Attorney (Agmt. No. 2018-170). MISCELLANEOUS - BUDGET 29A. APPROVE DONATION AGREEMENTS WITH VARIOUS ORGANIZATIONS TO SUPPORT COMMUNITY EVENTS AND PROGRAMS {STRATEGIC PLAN NO. 5, 4) — City Council MOTION: Authorize the City Manager and Clerk of the Council to execute agreements with various organizations in support of their community events and programs, subject to nonsubstantive changes approved by the City Manager and the City Attorney, as follows: 1. Approve a donation for the Memorial Park Neighborhood Association to support the Day of Good Deeds Community Clean -Up event on June 30, 2018, in the amount of $500 in City services credit (Mayor Pro Tem Martinez). CITY COUNCIL MINUTES 13 JUNE 19, 2018 10A-13 2. Authorize the City Manager and Clerk of the Council to execute agreements with various organizations in support of their community events and programs, subject to non -substantive changes approved by the City Manager and the City Attorney, as follows: • Charitable Ventures of Orange County for Memorial Park Neighborhood Association in support of community services and events, free to the community, in a one-time donation amount of $1,383.19 (Councilmember Sarmiento); • Madison Park Neighborhood Association in support of the 5k walk-a-thon, various community services and events that promote healthier life choices, in a one-time donation amount of $883.19 (Councilmember Sarmiento); • Orange County Children's Therapeutic Arts Center in support of the Digital Arts Summer Camp that will teach youth technology skills, arts, and leadership, in a one-time donation amount of $1,000 (Councilmember Sarmiento); • Santa Ana Kiwanis Club Foundation in support of services for youth and youth with disabilities that promote education and self -empowerment throughout the City of Santa Ana, in a one-time donation amount of $1,000 (Councilmember Sarmiento); • Charitable Ventures of Orange County for Santa Anita Neighborhood Association in support of the event that took place June 15, 2018 at the Santa Anita Center in celebration of the neighborhoods positive progress, in a one-time donation amount of $1,000 (Councilmember Solorio); • Crime Survivors Inc. in support of the Victims of Violent Crime: Art of Healing Classes, Self -Defense, and additional supportive services, in a one-time donation amount of $1,575 (Councilmember Solorio); • Natis House dba Neutral Ground in support of the youth intervention and prevention program that provides mediation and supportive services for at -risk youth in Santa Ana, in a one-time donation amount of $1,000 (Councilmember Solorio); • Natis House dba Neutral Ground in support of the youth intervention and prevention program that provides mediation and supportive services for at -risk youth in Santa Ana, in a one-time donation amount of $250 (Councilmember Villegas); • Orange County Fire Authority Foundation in support of the OCFA Fire Explorers Program that provide community services, mentoring for youth, CITY COUNCIL MINUTES 14 JUNE 19, 2018 1 OA -14 and acquire information about human service careers, in a one-time donation amount of $750 (Councilmember Villegas); • Santa Ana Public Schools Foundation in support of on-going services for the Santa Ana Unified School District Explorers Program that promotes career -oriented programming in the area of law enforcement for youth in Santa Ana, in a one-time donation amount of $500 (Councilmember Villegas); • Southland Integrated Services, Inc. in support of on-going services for the Senior Citizen Community Center as well as a free community event held June 16, 2018, in a one-time donation amount of $425 (Councilmember Villegas); • Rainmaker Effect, Inc. in support of the Rainmaker Effect Leaders Program that provides high school students with leadership and character building skills as well as mentors, in a one-time donation amount of $1,000 (Councilmember Tinajero); • KidWorks Community Development Corporation in support of the Building Bridges of Unity Community Resource Fair held May 12, 2018, free to the community, that promoted safety, quality of life, and access to resources, in a one-time donation amount of $500 (Councilmember Sarmiento); • Community Engagement Inc. in support of Cunao's EI Cancion del Inmigrante at the Bowers Museum that occurred May 12, 2018 an event free to the community that promotes arts and culture, in a one-time donation amount of $7,500 (Mayor Pulido); • Madison Park Neighborhood Association in support of the 5k walk-a-thon, various community services and events that promote healthier life choices, in a one-time donation amount of $500 (Councilmember Benevides). **END OF CONSENT CALENDAR** REGULAR BUSINESS CALENDAR 1111.14[•l:l;laIi' ejalkliGPimWimr'law,nilw7*2werk61 T47:I7ellytiiljuili ml 75A-1. PUBLIC HEARING — ADOPT THE FISCAL YEAR 2018-2019 CITY BUDGET {STRATEGIC PLAN NO. 4, 2A} — Finance and Management Services CITY COUNCIL MINUTES 15 JUNE 19, 2018 10A-15 Legal Notice published in the Orange County Reporter on May 25, 2018 and June 1, 2018. Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent). The following spoke on the matter; • Claudio W. Gallegos on behalf of Congressman Lou Correa, encouraged City Council to continue funding of the legal defense fund for deportation defense. Expressed support for establishment of this fund. • Lindsay Toczylowski, Executive Director of Immigrant Defenders Law Center, noted funds allowed the opening of an office in Santa Ana, program servicing 10 families, and all families served are residents of Santa Ana. Urged City Council to continue funding program. • Tania Sawczuk, opined Santa Ana is part of a growing network of jurisdictions around the country dedicated to ensuring all members of the community have access to due process and a fair day in court. Noted Vera Institute for Justice will continue to provide ongoing data driven evaluations of the program to ensure accountability for the public dollars spent. • Cynthia Felix, staff attorney for Immigrant Defenders Law Center, read a letter from her client to the City Council. Noted addition of two new referrals from Santa Ana residents. • Carlos Perea, expressed support for universal representation and immigrant legal defense fund. Opined program is an important service fund for the community. • Alexis Teodoro, urged City Council to approve option "A" including no cuts in funding. Opined city should invest in transformative restorative justice like practices. • Gwen Barrios, opined City should approve budget option "A" which includes youth and immigrant family services. • Citlali Ruiz, address City Council to request support for budget option "A" and invest in youth and universal representation. • Roger Valeneva Ricardez, expressed support for budget option "A" and to invest in youth and immigrant families by using cannabis revenue. • Emily Peraza, urged City Council to approve budget option "A" Hearing closed. Council discussion ensued. Councilmember Solorio, asked how many of the families being serviced are Santa Ana residents, DACA applicants, and veterans. Noted budget incorporates City Council input, restores youth programs, and projected adult use commercial cannabis revenue. Directed staff to use all future legal defense dollars towards Santa Ana residents with priority to DACA members or veterans. City Manager Godinez, noted anticipated commercial cannabis revenue is being placed in reserve account and staff would provide City Council with spending plan for review and approval. CITY COUNCIL MINUTES 16 JUNE 19, 2018 10A-16 Councilmember Villegas, expressed opposition to funding the legal defense fund, possibility of others asking for legal representation in other areas of law, and program is not open to everyone. Councilmember Sarmiento, opined not all items are addressed in budget, services to residents is diminishing, and expressed support for budget. Noted previous city investment and matching funds received from Vera Foundation towards legal defense fund. Ci7101�C�1��A 1. Approve the use of unassigned fund balance ("one-time monies") from the General Fund up to $10.2 million. This will result in a General Fund Budget of $264,561,084 for Fiscal Year 2018-19. Passage of the proposed One -Time funding for Fiscal Year 2018-19, will be the second consecutive year if authorization of One -Time monies is utilized. In accordance, with the City Council adopted Budget and Financial Policy (dated June 6, 2017), the policy only allows for use of One -Time funding for two consecutive years. (Requires five affirmative votes.) 2. Place ordinance on first reading and authorize publication of title. ORDINANCE NO. NS -2951 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROPRIATING MONIES TO THE SEVERAL OFFICES, AGENCIES, AND DEPARTMENTS OF THE CITY FOR FISCAL YEAR BUDGET PERIOD COMMENCING JULY 1, 2018 *Councilmember Villegas opposed to funding legal defense program.* 3. Adopt a Seven -Year Capital Improvement Program (CIP) beginning fiscal year 2018-19 through fiscal Year 2024-25 per Orange County Transportation Authority (OCTA) Measure M2 eligibility requirement. 4. Adopt a resolution. RESOLUTION NO. 2018-039 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA TO AMEND RESOLUTION NO. 2015-026 TO EFFECT CERTAIN CHANGES TO THE CITY'S BASIC CLASSIFICATION AND COMPENSATION PLANS MOTION: Villegas* VOTE: AYES: NOES: SECOND: Tinajero Pulido, Sarmiento, Solorio, Tinajero, Villegas (5) None (0) None (0) CITY COUNCIL MINUTES 17 JUNE 19, 2018 10A-17 ABSENT: Benavides, Martinez (2) 75A-2. PUBLIC HEARING — ADOPT THE FISCAL YEAR 2018-2019 MISCELLANEOUS FEE SCHEDULE {STRATEGIC PLAN 4, 2A} — Finance and Management Services Legal Notice published in the Orange County Reporter on May 25, 2018 and June 1, 2018. Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent). Mayor Pulido opened the Hearing. The following spoke on the matter: Laura Perez, expressed concern over prostitution activity in her neighborhood. Urged City Council to address issue. The Hearing Closed. Councilmember Villegas, commented on number of police vacancies and previous attempts to address prostitution issue. Councilmember Solorio, noted increase in service calls for prostitution issue; need to fill police vacancies, expansion of vice unit, and comprehensive approach to address prostitution. MOTION: Adopt a resolution. RESOLUTION NO. 2018-040 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING A UNIFORM SCHEDULE OF MISCELLANEOUS FEES FOR FISCAL YEAR 2018-2019 MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Tinajero Pulido, Sarmiento, Solorio, Tinajero, Villegas (5) None (0) None (0) Benavides, Martinez (2) CITY COUNCIL MINUTES 18 JUNE 19, 2018 10A-18 75A-3. APPROVE PRE -PAYMENT FOR THE CITY'S ANNUAL UNFUNDED ACTUARIAL LIABILITY TO CALIFORNIA PUBLIC RETIREMENT SYSTEM — SAFETY PLAN FOR FISCAL YEAR 2018-19 (STRATEGIC PLAN NO. 4, 2D) — Finance and Management Services Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent). Approve the pre -payment for the City's annual Unfunded Actuarial Liability to California Public Employees Retirement System (CaIPERS) — Safety Plan for fiscal year 2018-19 in the amount of $18,690,264. 75A-4. ADOPT A RESOLUTION ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FISCAL YEAR 2018-19, AS REQUIRED BY STATE LAW (GANN LIMIT) {STRATEGIC PLAN NO. 4, 1D)— Finance and Management Services Adopt resolution. RESOLUTION NO. 2018-041 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING THE APPROPRIATION LIMIT OF THE CITY OF SANTA ANA FOR FISCAL YEAR 2018 2019 MOTION: Approve Item 75A-3 and 75A-4 as proposed. MOTION: Sarmiento SECOND: Villegas VOTE: AYES: Pulido, Sarmiento, Solorio, Tinajero, Villegas (5) NOES: None (0) ABSTAIN: None (0) ABSENT: Benavides, Martinez (2) *Councilmember Benavides arrived at 7:51 p.m. 75B. PUBLIC HEARING — APPEAL NO. 2018-02 OF CONDITIONAL USE PERMIT NO. 2018-01 TO APPROVE THE CONDITIONAL USE PERMIT ALLOWING THE OPERATION OF A K-12 SCHOOL FOR CITRUS SPRINGS CHARTER SCHOOL LOCATED AT 2121 NORTH GRAND AVENUE, CITRUS SPRINGS CHARTER SCHOOL — APPLICANT {STRATEGIC PLAN NO. 3, 2) — Planning and Building Agency CITY COUNCIL MINUTES 19 JUNE 19, 2018 10A-19 Planning Commission motion to approve Conditional Use Permit (CUP) No. 2018-01 on March 12, 2018 failed by a vote of 2-4 (Bacerra, McLoughlin, Mendoza and Verino dissented, Alderete absent). Legal Notice published in the Orange County Reporter May 25, 2018 and notices mailed on said date. Continued at the request of the applicant at the June 5, 2018 City Council Meeting. Mayor Pulido opened the Hearing. The following spoke on the matter: • Stefanie Phillips, Santa Ana Unified School District Superintendent, expressed interest in City Council denying appeal. Opined English learners with disabilities and struggling students would be better served in local public schools; Charter school will be unable to meet the needs of students with disabilities, and addition of days would impact traffic and quality of life of Santa Ana residents. • Dr. Alfonso Jimenez, Deputy Superintendent of Educational Services, expressed interest in City Council denying conditional use permit. Expressed concern over the viability of the program in the city. • John Palacio, addressed City Council to request the city to honor the Planning Commission's decision. Opined Sierra Intermediate School will be impacted, difficulty for special needs students, English learners, or struggling students to only meet two days a week. • Barbara Pearson, President of Santa Ana Educators Association, urged City Council to deny appeal. Opined Charter school lacks knowledge of the most basic elements of education and educational process. • Mike Tardif, opined staff is still supportive of applicant's request, Planning Commission has made no changes to recommendations outlined in the original staff report, and commission only briefly discussed finding. Expressed support for granting conditional use permit. • Monica Lopez, Principle of Citrus Charter School Santa Ana Student Center, noted school has been located at site since the 1960's, Charter is authorized by Orange County Office of Education, and is fully accredited by Western Association of Schools and Colleges. Opined charter offers families a variety of learning options including opportunity to work with California credentialed teachers and to choose the right combination of personalized learning programs. Requested City Council to approve conditional use permit. • Amy Podratz, Assistance Superintendent for Springs Charter Schools, presented City Council with 200 letters from parents and students in support of appeal. • George Urch, opined this is not an argument over charter schools versus public schools, decision should be based upon merits of application, and charter has met the requirements. • Cecilia Iglesias, expressed support for school choice, parents, and staff decision that conditional use permit is valid. Echoed statements made by George Urch. Opined need to look at facts and issues. CITY COUNCIL MINUTES 20 JUNE 19, 2018 1 OA -20 City Attorney Carvalho, noted when City Council sits in review of a conditional use permit, it is a quasi -adjudicative body, not as a legislative body, and must rely on evidence to support decision. Councilmember Villegas, expressed concern over traffic study. Noted school has twice the amount of parking needed, amount of students will not increase, and timing of traffic study issue. Councilmember Sarmiento, asked staff to explain land use issues that were before the Planning Commission, staff position and recommendation, and if any public funds will be used towards campus. Opined there is a net zero impact or growth. Planning Manager Neal noted planning commission was concerned over traffic, planning staff approval recommendation, and provided review of changes requested by school. Indicated no additional students will be added and confirmed no public funds being used. Councilmember Solorio, expressed support to uphold planning commission decision. Noted any decision made today on conditional use permit would carry on with the land. Opined approval would lead to more traffic and growth. Further discussion ensued. Councilmember Benavides, asked staff if current conditional use permit has a student cap, any potential cap increase, and questioned need for conditional use permit when no student increase is being requested. Further discussion ensued. Mayor Pulido, asked if a student cap may be placed. Opined need to define conditional use permit. Councilmember Tinajero, asked how students with disabilities, English learners, and struggling students will succeed with courses with only two days a week. Further discussion ensued. Councilmember Solorio supports Option 3 to uphold the Planning Commission's decision because CUP run with the land. Councilmember Solorio supports Option 3 to uphold the Planning Commission's decision and Councilmember Tinajero seconded. Councilmember Benavides conveyed that he would not support Option 3. Councilmember Villegas made a substitute motion to support Option 2 with a cap on the number of students of 180. MOTION: .Adopt resolution (Option 2) with conditions including cap on number of students of 180. CITY COUNCIL MINUTES 21 JUNE 19, 2018 1 OA -21 RESOLUTION NO. 2018-042 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING APPEAL NO. 2018-02 AND REVERSING THE PLANNING COMMISSION'S DENIAL OF CONDITIONAL USE PERMIT NO. 2018-01 AS CONDITIONED AND ADDING ADDITIONAL CONDITIONS TO ALLOW THE OPERATION OF A K-12 SCHOOL FOR CITRUS SPRINGS CHARTER SCHOOL LOCATED AT 2121 NORTH GRAND AVENUE MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: RESOLUTIONS SECOND: Tinajero Benavides, Pulido, Sarmiento, Tinajero, Villegas (5) Solorio (1) None (0) Martinez (1) 55A. ADOPT A RESOLUTION AUTHORIZING BRISTOL STREET URBAN GREENING GRANT PROGRAM APPLICATION (STRATEGIC PLAN NO. 5,6F) — Public Works Agency MOTION: Adopt resolution. RESOLUTION NO. 2018-043 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING APPLICATIONS FOR GRANT FUNDS FOR CALIFORNIA CLIMATE INVESTMENTS URBAN GREENING PROGRAM MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN ABSENT: SECOND: Tinajero Benavides, Pulido, Sarmiento, Solorio, Tinajero, Villegas (6) None (0) None (0) Martinez (1) CITY COUNCIL MINUTES 22 JUNE 19, 2018 1 OA -22 55B. ADOPT A RESOLUTION TO MAINTAIN MEASURE M2 FUNDING ELIGIBILITY BY APPROVING A PAVEMENT MANAGEMENT PLAN UPDATE {STRATEGIC PLAN NO. 6, 1A, B, F, G} —Public Works Agency MOTION: Adopt resolution. RESOLUTION NO. 2018-044 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CONCERNING THE STATUS AND UPDATE OF THE PAVEMENT MANAGEMENT PLAN FOR THE MEASURE M2 (M2) PROGRAM MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Villegas Benavides, Pulido, Sarmiento, Solorio, Tinajero, Villegas (6) None (0) None (0) Martinez (1) 55C. ADOPT A RESOLUTION AUTHORIZING SETTLEMENT OF LIABILITY CLAIMS AND LITIGATED MATTERS FOR UP TO $50,000 AND WORKER'S COMPENSATION CLAIMS FOR UP TO $150,000 AND REPEAL RESOLUTION NO. 2015-041 {STRATEGIC PLAN NO. 4, 11 — Human Resources Department MOTION: Adopt resolution. RESOLUTION NO. 2018-045 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING CITY STAFF TO SETTLE LIABILITY CLAIMS AND/OR PENDING LITIGATION AGAINST THE CITY UP TO FIFTY THOUSAND DOLLARS AND WORKERS' COMPENSATION CLAIMS FOR UP TO ONE HUNDRED AND FIFTY THOUSAND DOLLARS AND REPEALING RESOLUTION 2015-041 MOTION: Benavides VOTE: AYES NOES: s SECOND: Sarmiento Benavides, Pulido, Sarmiento, Solorio, Tinajero, Villegas (6) None (0) None (0) CITY COUNCIL MINUTES 23 JUNE 19, 2018 1 OA -23 ABSENT: Martinez (1) 55D. GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 6, 2018; REQUESTING BOARD OF SUPERVISORS OF THE COUNTY OF ORANGE TO CONSOLIDATE CITY OF SANTA ANA GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION; AND SUBMISSION OF A PROPOSED CHARTER AMENDMENT REGARDING BY WARD ELECTIONS FOR VOTER CONSIDERATION {STRATEGIC PLAN NO. 5, 1) — Clerk of the Council Office Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent) Councilmember Solorio, expressed support for ward based election only if it includes drawing of new lines in order to abide with the spirit of California Voters Rights Act. Councilmember Sarmiento, expressed concern over pending litigation and lack of discussion. MOTION: Continue consideration of matter to the July 3, 2018 City Council meeting. MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN ABSENT: SECOND: Pulido Benavides, Pulido, Sarmiento, Solorio, Tinajero, Villegas (6) None (0) None (0) Martinez (1) r nF nRnFR CITY COUNCIL MINUTES 24 JUNE 19, 2018 1 OA -24 138. 13C. CHANGE `WARD t4 PLANNING COMMISSION APPOINTMENT, REMOV Pursuant to Santa Ana Charter Section 901, a board or commission member may be removed by the City Council by the affirmative votes of a majority of the Council. MOTION: Approve Agenda Items 13A through 13C. MOTION: Benavides SECOND: Sarmiento VOTE: AYES: Benavides, Pulido, Sarmiento, Solorio, Tinajero (5) NOES: Villegas (1) ABSTAIN: None (0) ABSENT: Martinez (1) CLERK OF THE COUNCIL TO ADMINISTER OATH OF OFFICE TO THE FOLLOWING NEWLY APPOINTED MEMBERS: • YENNI DIAZ, BOARD OF PARKS AND RECREATION AND • ANA URZUA, COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION Councilmember Tinajero, conference call disconnected at approximately 8:45 pm. 65A. REVIEW AND APPROVE THE CITY COUNCIL RECOGNITION POLICY {STRATEGIC PLAN NO. 1-71 — City Manager's Office Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent) CITY COUNCIL MINUTES 25 JUNE 19, 2018 1 OA -25 Councilmember Sarmiento, noted item was previously continued for efficiency purposes, limiting councilmember speaking time, and limiting Councilmember presentations. Clerk of the Council Huizar, noted policy presently includes one presentation per councilmember, councilmember comment limit included in decorum resolution; and closed session end time to be discussed at next Legislative Council Committee. MOTION; Review and approve the modified City Council Recognition Policy. MOTION: Sarmiento VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Solorio Benavides, Pulido, Sarmiento, Solorio, Villegas (5) None (0) None (0) Martinez, Tinajero (2) Councilmember Tinajero, conference call reconnected at approximately 8:52 pm. 65B. APPROVE SUBMISSION TO THE VOTERS AT THE NOVEMBER 6, 2018 MUNICIPAL ELECTION: A SALES TAX MEASURE FOR MUNICIPAL SERVICES (STRATEGIC PLAN NO. 4.3.) — City Manager's Office Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent) Councilmember Benavides, requested staff to clarify timing and deadline to act. Clerk of the Council Huizar, noted resolutions to place item on ballot must take place no later than the July 17 council meeting (August 7, 2018 to be canceled). City Manager Godinez, noted item only gives direction to bring back resolution. Mayor Pulido, opined need to continue item, to create analysis, and continue further discussions. Directed staff to consider a half cent sales tax in staff recommendation and to communicate with council. Further discussion ensued. Councilmember Sarmiento, opined council must come to a decision and not continue item. Further discussion ensued. CITY COUNCIL MINUTES 26 JUNE 19, 2018 1 OA -26 Councilmember Solorio, directed staff to consider possible revenue enhancement options. Opined research and outreach has been inadequate, polling not shared with council, and need for better communication with council. Further discussion ensued. Councilmember Tinajero, opined need to vote on item and responsibility to place item on ballot to allow community to choose what direction to take. Further discussion ensued. Councilmember Villegas, opined current reduced services to residents, possible future cuts, and need to have residents make the decision. Further discussion ensued. Councilmember Benavides, directed staff to provide financial impact on three quarter cent tax, to include a sunset provision, and to provide economic development options. The following spoke on the matter: • Peter A. Katz, noted City Council took vote on issue without public input. Opined Council is placing burden on the backs of the people who live and work in the city. MOTION: Continue consideration of matter to the July 3, 2018 and direct staff to provide analysis and options including a penny sales tax increase. MOTION: Pulido VOTE: AYES: NOES: ABSTAIN ABSENT: SECOND: Sarmiento Benavides, Pulido, Sarmiento, Tinajero, Villegas (5) Solorio (1) None (0) Martinez (1) *Councilmember Tinajero left the meeting at 9:21 p.m. and did not return. 65C. COUNCILMEMBER REQUEST TO REVIEW PLANNING COMMISSION ITEM REGARDING SITE PLAN REVIEW NO. 2017-09 AND DENSITY BONUS AGREEMENT NO. 2017-02 TO ALLOW CONSTRUCTION OF AN AFFORDABLE RENTAL RESIDENTIAL COMMUNITY WITHIN THE METRO EAST MIXED USE OVERLAY DISTRICT AT 2110, 2114, AND 2020 EAST FIRST STREET, AMG & ASSOCIATES, APPLICANTS {STRATEGIC PLAN NOS. 3, 2; 5, 31 — Planning and Building Agency CITY COUNCIL MINUTES 27 JUNE 19, 2018 1 OA -27 The following spoke on the matter: • Michael M., Senior Vice President of Finance for Jamboree Corporation, opined providing as many affordable housing as possible is a solution to the housing crises, project represents that goal, and project will provide significant number of homes to working families and seniors. Noted project contains retail space. Mayor Pulido, asked if project generates any city revenue. Opined need to analyze how much revenue projects generate to ensure its revenue neutral and to help carry the burden of city services. Further discussion ensued. Councilmember Benavides, inquired if council can deliberate and discuss decision by planning commission to assign density bonus. Opined need to be mindful of applicant, potential delays, and need for consideration of impact in a compact area. Further discussion ensued. Councilmember Solorio, asked staff to clarify if project requires additional entitlements or any procedural discretionary items needed. Expressed concern over creating unnecessary hurdles for development projects. Further discussion ensued. MOTION: Direct staff to set as Public Hearing for consideration. MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: *Motion failed 3-2. SECOND: Pulido Benavides, Pulido, Sarmiento (3) Solorio, Villegas (2) None (0) Martinez, Tinajero (2) 65D. REVIEW AND PROVIDE DIRECTION ON PROPOSED CHARTER AMENDMENTS FROM THE COUNCIL AD HOC COMMITTEE {STRATEGIC PLAN NO. 5, 11 — City Manager's Office, City Attorney's Office and Clerk of the Council Office Councilmember Benavides, asked staff to provide recommendation on items to be considered. Directed staff to simplify item and bring back to City Council. Further discussion ensued. CITY COUNCIL MINUTES 28 JUNE 19, 2018 1 OA -28 City Attorney Carvalho, noted item is an administrative clean up to remove archaic provisions, conflicting provisions with municipal code, and to address larger policy issues. Councilmember Sarmiento, echoed statements made by City Attorney Carvalho. Further discussion ensued. Councilmember Villegas, opined need to discuss item and shorten list. Councilmember Solorio, echoed statements made by City Attorney Carvalho. Further discussion ensued. City Manager, opined process should focus on different parts of the charter at every election so as to not confuse voters. MOTION: 1. Receive report from the Ad Hoc Committee. 2. Direct staff to provide analysis and necessary documents to place proposed Charter amendments on the ballot for November 2018 election for consideration including modernization of the Boards and Commissions by removing from the Charter and placing in the Santa Ana Municipal Code, and reforming the Campaign/Gift provisions. MOTION: Solorio VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Pulido Benavides, Pulido, Sarmiento, Solorio, Villegas (5) None (0) None (0) Martinez, Tinajero (2) *Councilmember Sarmiento left the meeting at 9:58 p.m. and did not return. COUNCIL AGENDA ITEMS Pursuant to Santa Ana Charter Section 411, any member of the City Council may place items on the City Council Agenda to be considered by the City Council. 85A. DISCUSS AND DIRECT STAFF TO PREPARE AN EMERGENCY ORDINANCE ON PERMANENT SUPPORTIVE HOUSING AND IDENTIFY CITY COUNCIL MINUTES 29 JUNE 19, 2018 1 OA -29 POTENTIAL SITES; AND AN EMERGENCY ORDINANCE AND IDENTIFY KEY SITES FOR MOTEL CONVERSION (Mayor Pro Tem Martinez) Continued from the June 5, 2018 City Council Meeting by a 6-0 vote (Martinez absent) MOTION: Continue consideration of matter. MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: SECOND: Pulido Benavides, Pulido, Solorio, Villegas (4) None (0) None (0) Martinez, Sarmiento, Tinajero (3) 8513. DISCUSS OPTIONS ON POTENTIAL UPDATES TO THE HOUSING OPPORTUNITY ORDINANCE IN ORDER TO MAXIMIZE IMPACT ON THE INTENT OF THE ORDINANCE AND DIRECT STAFF TO DO ANALYSIS AND DRAFT AMENDMENTS TO ANY NEW POTENTIAL CHANGES FOR COUNCIL CONSIDERATION (Mayor Pro Tem Martinez and Councilmember Benavides) Councilmember Benavides, noted city approved housing opportunity ordinance to ensure steps are taken to continue to develop accessible affordable housing. Asked staff what triggers housing opportunity ordinance and impact of general plan update. MOTION: Request that staff analyze the implications of the Housing Opportunity Ordinance with the General Plan update and return with recommendations. MOTION: Benavides VOTE: AYES: NOES: ABSTAIN: ABSENT: WORK STUDY SESSION SECOND: Solorio Benavides, Pulido, Solorio, Villegas (4) None (0) None (0) Martinez, Sarmiento, Tinajero (3) CITY COUNCIL MINUTES 30 JUNE 19, 2018 1 OA -30 WS. DRAFT ORDINANCE - WORKER COOPERATIVE (SMALL BUSINESS ORDINANCE) — Community Development Agency Continued matter. COMMENTS PUBLIC COMMENTS • Raul Nolasco, informed City Council of potential danger from pedestrian sidewalk on Civic Center. Opined need of guard rail to protect pedestrians. • Paul Maag, addressed City Council to request an immediate moratorium on all zoning change requests and general plan amendments allowing additional housing in Santa Ana. • Dale Helving, expressed opposition to 2525 Main Street development. Informed City Council of public awareness campaign. • Michael O'Valle, President of Park Santiago Neighborhood Association, opined project will cause a lot of traffic, creates a nuisance, and taking away of professional office space will be detrimental to Santa Ana. • Frank Lopez, expressed opposition to 2525 Main Street development. • Genelle Johnson, opined 2525 Main Street development will cause traffic problems and will severely negatively impact neighborhood. Urged City Council to oppose development. • Irma Macias, thanked City Council for approving funds to allow additional park clean up days. Opined need to add zoo positions. • William "Billy" Leigh, urged City Council to consider the voice of the Santiago residents. • Kelly Medina, expressed opposition to 2525 Main Street development. • Stephen Gorgone, opined development will overload surrounding area and urged City Council to make this a priority. 90A. CITY MANAGER'S COMMENTS City Manager Godinez, informed City Council as to securing of $4 million for automated water meter infrastructure. Opined funds will allow city to modernize water metering and billing system. noted upcoming eight annual 4th of July celebration at Centennial Park and Works Center relocation. 90B. CITY COUNCILMEMBER COMMENTS Councilmember Solorio: • Expressed concern of illegal fireworks in the City. Councilmember Villegas: • Congratulated Chief Black for promotion to Assistance Chief of the Orange County Fire Authority. CITY COUNCIL MINUTES 31 JUNE 19, 2018 1 OA -31 Councilmember Benavides: • Commented that 4t" of July event is a wonderful event for the community; staff to promote the event and to have a proactive approach in maintaining city streets safe. Note: Mayor Pro Tem Martinez attended Latino Caucus Midyear Board Retreat in Oakland, CA from June 15-16, 2018. ADJOURNED- 10:32 P.M. - The next meeting of the City Council is scheduled for Tuesday, July 3, 2018 at 5:00 p.m. for the Closed Session Meeting immediately followed by the Regular Open Business Meeting at 5:45 p.m. in the Council Chamber, 22 Civic Center Plaza, Santa Ana, California. Maria D. Huizar, Clerk of the Council FUTURE AGENDA ITEMS • Policy on Use of General Reserve and Enterprise Funds • Amendment to Metro East Mixed -Use Overlay District • Jail Reuse Study CITY COUNCIL MINUTES 32 JUNE 19, 2018 1 OA -32 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: ORDINANCE SECOND READING: ADOPTION OF CITY BUDGET FISCAL YEAR 2018-2019 (STRATEGIC PLAN NO. 5,1) 'W ild �.VI CI1JhLANAGER RECOMMENDED ACTION Place ordinance on second reading and adopt. DISCUSSION [OR =1[3.(61X910111U9 LW11341@ I" APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 151 Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER On June 19, 2018, the following ordinance was introduced for first reading and City Council authorized publication of title by a vote of 5-0 (Benavides and Martinez absent): ORDINANCE NO. NS -2951 - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROPRIATING MONIES TO THE SEVERAL OFFICES, AGENCIES, AND DEPARTMENTS OF THE CITY FOR FISCAL YEAR BUDGET PERIOD COMMENCING JULY 1, 2018 In summary, adoption of the ordinance will provide funding of $549 148 058 for Fiscal Year 2018- 2019 to provide city services such a promote economic development and such as Water, Sewer, and Sanitation the Capital Improvement Program. STRATEGIC PLAN ALIGNMENT s parks, recreation and library programs and public safety; updating of the City's General Plan; public works' activities services; and citywide infrastructure improvements through Approval of this item supports the City's efforts to meet Goal #5 - Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). 11 A-1 Second Reading Ordinance: Adoption of FY 2018-2019 City Budget July 3, 2018 Page 2 FISCAL IMPACT There is no fiscal impact associated with this action. 2) Maria D. Huizar Clerk of the Council EXHIBIT: Ordinance No. NS -2951 11 A-2 LS 6.5.18 ORDINANCE NO. NS-XXXX AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROPRIATING MONIES TO THE SEVERAL OFFICES, AGENCIES, AND DEPARTMENTS OF THE CITY FOR FISCAL YEAR BUDGET PERIOD COMMENCING JULY 1, 2018 THE CITY COUNCIL OF THE CITY OF SANTA ANA DOES ORDAIN AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines, and declares as follows: A. The City Manager has prepared and submitted to the City Council, pursuant to Section 605 of the City Charter, a proposed budget for expenditures for the fiscal year commencing July 1, 2018. B. In accordance with Section 606 of the City Charter, a public hearing has been held upon the proposed budget of expenditures after notice of such public hearing had been published in the manner prescribed in Section 606 of the City Charter. C. The proposed budget of expenditures duly submitted and considered as herein stated, together with any supplemental revisions and amendments thereto, was approved, adopted, and fixed by the City Council as the budget of the City for fiscal year 2018-2019, commencing July 1, 2018, in the amounts and for the funds, purposes, functions, department activities, and programs as therein set forth, including the Seven -Year Capital Improvement Program Plan update per Orange County Transportation Authority Measure M2 eligibility requirement. The adopted budget, including any supplemental revisions and amendments, together with a copy of the appropriation ordinance, shall be placed in the official files of the Clerk of the Council. Section 2. There are hereby appropriated to the several offices, agencies, and departments of the City, being the respective object and purposes specified in that certain document entitled " Fiscal Year 2018-2019 City Budget", a copy of which is on file in the Office of the Clerk of the Council, out of the various funds of the City for fiscal year 2018-2019, the several amounts stated as proposed expenditures from such funds, respectively, in those columns of the Budget that are headed "FY 18-19". Each aggregate of expenditures so specified in the Budget for the fiscal year for each program shall be deemed to be an appropriation for a single object and purpose within the meaning of Section 609 of the City Charter, except that as to any office, department, Ordinance No. NS - Page 1 of 4 11 A-3 or agency of the City for which more than one program is designated in Section 2 (General Fund Operating Budget) of the Budget, the aggregate expenditure authorized for all programs in Section 2 of each such office, department, or agency shall be deemed to be an appropriation for a single object and purpose within the meaning of Section 609 of the City Charter. Section 3. The appropriations hereby made shall constitute the maximum expenditures authorized for the several offices, agencies, and departments opposite which the amounts of such appropriations are shown in the Budget. Section 4. No warrant shall be issued or indebtedness incurred for any purpose that exceeds the unexpended balance of the appropriations established by this ordinance, unless such appropriation shall have been amended or supplemented by the City Council in the manner set forth in Section 609 of the City Charter. The City Manager is hereby authorized to make revisions between the items included within any such appropriation if, in his/her opinion, such revisions are necessary and proper. Section 5. In accordance with Governmental Accounting Standards Board Statement 54, the City Manager or his/her designee is hereby authorized, as of the date of this ordinance, to allocate assigned governmental funds' balances to specific programs and activities as deemed necessary and proper. Section 6. The Executive Director of Finance and Management Services is hereby authorized to transfer monies in accordance with the Interfund Transfers listed in the Budget in such amounts and at such times during the fiscal year as he/she may determine necessary to the competent operation and control of City business, except that no such transfer shall be made in contravention of State law or City ordinance or exceed in total the amount stated herein or as amended by the City Council. Section 7. One certified copy of this appropriation ordinance together with a certified copy of each amendment thereto shall be transmitted by the Clerk of the Council to the Executive Director of Finance and Management Services. Section 8. The City Council of the City of Santa Ana hereby adopts the updated Seven -Year Capital Improvement Program, as set forth in the 2018-2019 City Budget. Section 9. Upon and from the effective date of this ordinance, expenditures of monies appropriated hereby are authorized beginning July 1, 2018. Section 10. The Clerk of the Council shall cause the title of this ordinance to be published as required by law. Section 11. All presently applicable documentation pertaining to the number, titles, qualifications, powers, duties, or compensation of officers or employees of the City, which has been previously approved by resolution or order of the City Council and Ordinance No. NS - Page 2 of 4 11 A-4 which. is currently on file with the Executive Director of Human Resources, is incorporated herein and is hereby approved. The City Manager is authorized to create, alter, or abolish any position of employment, or the number, title, qualifications, powers, duties, or compensation thereof, when such action is appropriate to promote the efficiency of the City administrative organization; provided, however, that no such action shall be effective unless and until approved by resolution or order of the City Council. ADOPTED this day of June, 2018. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By:.,� Lisa Storck Assistant City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Ordinance No. NS - Page 3 of 4 Councilmembers Councilmembers Councilmembers Councilmembers 11 A-5 Miguel A. Pulido Mayor CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council do hereby attest to and certify the attached Ordinance No. NS- to be the original ordinance adopted by the City Council of the City of Santa Ana on , 2018, and that said ordinance was published in accordance with the Charter of the City of Santa Ana. Date Ordinance No. NS - Page 4 of 4 Clerk of the Council City of Santa Ana 11 A-6 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 CLERK OF COUNCIL USE ONLY: TITLE: APPROVED RECEIVE AND FILE PUBLIC WORKS ❑ As Recommended AGENCY STATUS OF PROJECTS - E]Amended ❑ OOrrdinance on 16' Reading MONTHLY CAPITAL IMPROVEMENT ❑ Ordinance on 2nd Reading PROGRAM EXECUTIVE REPORT FOR ❑ Implementing Resolution JUNE 2018 ❑ Set Public Hearing For (STRATEGIC PLAN NO. 5, 1) e— J CIT ANAGER RECOMMENDED ACTION CONTINUED TO FILE NUMBER Receive and file the Public Works Agency Status of Projects - Monthly Capital Improvement Program Executive Report for June 2018. DISCUSSION The June 2018 Capital Improvement Program (CIP) Executive Summary (Exhibit 1) provides Public Works Agency activity in alignment with the City's Strategic Plan. The report includes tasks, next steps, outcomes, and percentage completed for each project. The CIP Executive Summary Schedule is available on the City's website at: The following remarks are provided to note significant matters related to CIP projects: Traffic Signal Head Upgrades The Traffic Signal Head Upgrades project involves replacing the colored (Red, Yellow, Green) traffic signal LED lights from nonstandard 8 -inch -diameter lamps to larger, more visible 12 -inch - diameter lamps. Nonstandard lamps will be replaced citywide to improve safety and serve as a countermeasure to collisions involving rear -end- and right -angle -type collisions. See Exhibit 2 for the project location map. The project total cost is $655,600 and is 100% funded by federal -aid highway funds through the Highway Safety Improvement Program (Cycle 7). STRATEGIC PLAN ALIGNMENT This item supports the City's efforts to meet Goal #5 – Community Health, Livability, Engagement & Sustainability, Objective #1 (establish a comprehensive community engagement initiative to 19C-1 Monthly CIP Executive Report for June 2018 July 3, 2018 Page 2 expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT There is ro fiscal impact associated with this item. EN Fuad SwellE., P.L.S. Executive Dir for Public Works gency FSMIEG Exhibits: 1. CIP — Executive Summary Schedule may be reviewed at: http://www.santa-ana.ora/pwa/documents/ExecutiveMonthlyCIPJune2018 pdf 2. Location Map: Traffic Signal Head Upgrades Project 19C-2 111 1111111111111111-1 If�IllfI UU{�llRIIIlf�IIf�I{IVIIQi a a1 it J-1 J aj 0888',888$ 88$88 N,88 8 8$88 888$8885 ¢gqS5��ggRRgga�g�'g5� ggQQgQ Q gg¢g pp ¢4yyQQQQ¢g¢p m maBun.X n.Ni .h � o 9 F'w H a 3niemn nn .nm pati °Ca vi uiu a± °7 O N N V m W� N N N W T QjbNNN NNN NN S o N a N u N V V T ��rv�'.i .idvmN wN.n 10N N�w Nm yNrmm .. 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LU -- 8 § : •[ � � �§d � 2 a !�| ■,**k«#*■ z § | ####!!!!m# # a!!\{!!)£! | 2 § f E to toLU § § m ! �- 2�L'!}/ |k � �� ! /!m»■� 1§C- 19C-8 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE CONTRACT AWARD TO VANTAGE COMPANY FOR SANTA ANA POLICE DEPARTMENT ATRIUM PANEL RETROFIT PROJECT AND VARIOUS CONSTRUCTION PROJECTS (SPEC. NO. 18-051) (STRATEGIC PLAN NO. 6,2) r MANAGER RECOMMENDED ACTION APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER 1. Authorize a one-time purchase and payment of purchase order to Vantage Company to reinforce the wood paneling in two atriums of the Police Department in an amount not to exceed $24,800, subject to non -substantive changes approved by the City Manager and City Attorney. 2. Establish a blanket order contract with Vantage Company for the period of July 1, 2018 to June 30, 2019 for various construction projects for the Facilities Maintenance Department in an amount not to exceed $25,000, subject to non -substantive changes approved by the City Manager and City Attorney. DISCUSSION The construction of the Santa Ana Police Department Administrative Building and Holding Facility was completed in 1997. The Administrative building has two large indoor atrium corridors that are four stories high. Along the perimeter of each atrium are heavy commercial wood grain laminate panels. Due to the age of the building, much of the adhesive securing the panels has deteriorated. In February 2018, a panel became loose and fell to the bottom floor from the second floor. An inspection of the panels revealed that other panels may not be secure. Staff recommends that each panel be reinforced to avoid any safety issues that may arise from seismic activity or other building age related issues. Staff determined that a contractor with specialized equipment is necessary to carry out the repairs and to secure the panels at the required heights. Four vendors inspected repair needs of the atriums: All American, Quality Woodworks, Bizal- Hoff, and Vantage Company. The scope of the project includes securing 420 "C" shaped panels and 336 "L" shaped panels, utilizing a scissor lift to reach the higher panels. The fasteners will then be concealed with laminate caps or conceal plugs of the same laminate color. Reputable construction contractors, selected on their hh Igvel.of expertise and past projects with the City, Award of Purchase Order to Vantage Company July 3, 2018 Page 2 were invited to submit a proposal by April 30, 2018. Two of the four contractors, Bizal-Hoff and Vantage Company, submitted proposals. Bizal-Hoff proposing $59,500 for the project and Vantage Company proposing $24,800. All American was a formal no bid and Quality Woodworks was unresponsive. Additionally, Vantage Company is utilized throughout the year by the facilities maintenance department for various construction projects. The purchase to reinforce the wood paneling in the two atriums of the Police Department along with the blanket contract will exceed the $25,000 aggregate limit for the fiscal year. In order to carry out these purchases for the fiscal year, staff recommends a blanket contract in the amount of $25,000. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Strategic Plan Goal # 6 — Community Facilities & Infrastructure, Objective # 2 (address deferred maintenance on City buildings and equipment). FISCAL IMPACT Funds in the amount of $24,800 are available in the FY 2018-2019 PD Building and Facilities account (01114403-62300) and in the Finance Management Building Maintenance account (07310100-62300) in the amount of $25,000. a entin Chief of Police Santa Ana Police Department r APPROVED AS TO FUNDS AND ACCOUNT: Francisco Gutierrez0�3 Executive Director Finance and Management Services Agency 22A-2 REQUEST FOR COUNCIL ACTION lte"d6P1Z11iLmi'd:1aIII ILI leidAIl=9 JULY 3, 2018 TITLE: ACCEPT CONSTRUCTION COMPLETION FOR THE THORNTON PARK LIGHTING PROJECT (PROJECT NO. 16-2655) (STRATEGIC PLAN NO. 6, 1B & 1G) V-*49- ClayANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Accept the work as completed for the construction of the Thornton Park Security Lighting Project. On September 5, 2017, the City Council awarded a_ construction contract to California Professional Engineering, Inc., with a base contract amount of $94,500 and a construction contingency of $18,900. The project installed new energy efficient LED light fixtures and vandal - resistant security light concrete poles at Thornton Park (Exhibit 1). The intent of the lighting design was to both enhance security lighting while also increasing the current lighting levels of the existing parking lot. During the course of the project, Parks, Recreation & Community Services Agency (PRCSA) staff requested an additional light fixture in the park. Public Works Agency Staff determined that an additional light fixture would enhance the overall lighting and added the installation to the project. The quantities were adjusted to compensate the contractor for the additional light fixture, conduit, and wiring. The final accounting demonstrates that despite the additional lighting, the final contract expenditure remained within the City Council authorized limits. The following table is a summary of the authorized project funds and the final expenditures including the added work. 23A-1 Construction Completion: Thornton Park Security Lighting Project July 3, 2018 Page 2 AUTHORIZED FUNDS - —............. --------------------- — Construction Contract Award ... ................ j $94,500 — - ----.-. Contingency $18,900 _.... ........ TOTAL AUTHORIZED $113,400 CONSTRUCTION EXPENDITURES _I Construction Contract .-$94,5 - ................. Quantity Adjustments • Additional fixture, conduit & wiring $1,830 - $1,830 ---..... .. FINAL COST CONSTRUCTION $96,330 Balance of Funds Remaining (Unexpended) $17,070 Unexpended funds automatically return to the unallocated fund balance. This project was funded by Capital Outlay and Residential Development District 4 Funds and any unexpended funds will be reprogrammed by the PRCSA. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy B (equitably maintain existing streets and associated assets in a state of good repair so they are clean, safe and aesthetically pleasing for all users); and Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment Plan [e.g., neighborhood streets, traffic improvements, etc.]). ENVIRONMENTAL IMPACT There are no environmental impacts associated with the recommended action. FISCAL IMPACT no fiscal impacts related with the acceptance of these improvements. J Executi a Director Public orks Agency FS/EWG/AC/TC/MO Exhibit 1: Location Map 23A-2 N F-1,; F ® PROJECT LOCATION SEGERSTOWAV GARWGEDR EXHIBIT 1 SANTA ANA THORNTON PARK SECURITY LIGHTING (PROJECT 16-2555) ^ CITY COUNCIL PWA na oa AGENDA DATE: July 3, 2018 23A-3 PAGE 1 OF 1 23A-4 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: CLERK OF COUNCIL USE ONLY: JULY 3, 2018 TITLE: APPROVED ACCEPT CONSTRUCTION COMPLETION ❑ As Recommended OF THE ALLEY IMPROVEMENTS IN THE ❑ As Amended EASTSIDE NEIGHBORHOOD PROJECT [I Ordinance on 1R' Reading ❑ Ordinance on 2n° Reading (PROJECTS 17-6891,16-6865,15-6842) ❑ Implementing Resolution (STRATEGIC PLAN NO. 6, 1B & 1 G) ❑ Set Public Hearing For CONTINUED TO FILE NUMBER CIT MANAGER RECOMMENDED ACTION Accept the construction completion of Alley Improvements in the Eastside Neighborhood project. DISCUSSION On September 5, 2017, the City Council awarded a construction contract to Harry H. Joh Construction, Inc., with a base contract amount of $377,621 and a construction contingency of $56,644. The improvements include concrete pavement and alley approaches to enhance safety, surface drainage, and appearance of the surrounding neighborhood. The project was designed and bid for seven alleys within the Eastside Neighborhood. Through efficient construction management, staff realized savings and used favorable unit pricing to construct an additional alley in the project area (Exhibit 1). The added alley was already designed, shovel -ready for construction, and scheduled for construction as soon as funding became available. Since there were sufficient funds authorized for construction, staff was able to expedite the additional alley and added it to the project. The final cost accounting demonstrates that contract expenditures remained within the authorized limits. The following table is a summary of the authorized project funds and the final expenditures including the additional work. AUTHORIZED FUNDS i u ----.. _ -.-.-.-._.-.... Construction Contract Award $377,621 Contingency $56 644 TOTAL AUTHORIZED $434,265 2313-1 Construction Completion: Eastside Alley Improvements Project July 3, 2018 Page 2 CONSTRUCTION EXPENDITURES Construction Contract $377,621 — _ — — -- Alley_Improvements - Construction Quantity Adjustment $26,305 -......--- E$403,926 FINAL COST CONSTRUCTION-fE Balance of Funds Remaining (Unexpended) $30,339 This project was funded by Gas Tax and Measure M2 fairshare funds, therefore unexpended funds automatically return to the unallocated fund balance and are available for the next eligible projects as identified in the City's Capital Improvement Program. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy B (equitably maintain existing streets and associated assets in a state of good repair so they are clean, safe and aesthetically pleasing for all users); and Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment Plan [e.g., neighborhood streets, traffic improvements, etc.]). ENVIRONMENTAL IMPACT There are no environmental impacts associated with the recommended action. FISCAL IMPACT are no fiscal impacts related with the acceptance of the improvements. D Fuad Seiss, PE, PL: Execut a Director Public Works Agency FS/EWG/AC/TC/MO Exhibit 1: Location Map 23B-2 mw--M- 23B-4 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: ACCEPT CONSTRUCTION COMPLETION FOR THE EDINGER AVENUE AND WILLITS/SULLIVAN LANDSCAPE IMPROVEMENTS PROJECT (PROJECT NOS. 16-7521,16-7522) (STRATEGIC PLAN NO. 6, 1G) CI TANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1e Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Accept the construction completion of the Edinger Avenue and Willits/Sullivan Landscape Improvements Project. DISCUSSION On October 3, 2017, the City Council awarded a construction contract to Aramexx Construction, for the Edinger Avenue and Willits/Sullivan Landscape Improvement Project. This community beautification project consisted of planting drought -tolerant landscape and installing related irrigation systems at two locations. The first location was on West Edinger Avenue between Mohawk Drive and the Santa Ana River, and the second location was a 3,000 -square -foot area adjacent to the southeast corner of the Willits/Sullivan Corridor (Exhibit 1). The base contract was $64,950 plus a contingency of $19,485, for a maximum construction authorization of $84,435. The final construction accounting was performed and all expenditures are within the City Council authorized limit. The following table is a summary of authorized and expended funds: AUTHORIZED FUNDS ( J Construction Contract Award $64,950 Contingency $19,485_i TOTAL AUTHORIZED $84,435 23C-1 Construction Completion July 3, 2018 Page 2 Edinger Avenue and Willits/Sullivan Landscape Improvements Project CONSTRUCTION EXPENDITURES — -------- Construction Contract $64,9501 --f Change Order#1: Installation of backflow preventer cage $1,653 1 -- - - — ...................— ...i.- Change Order #2: Additional plants and signs $3,630 - 1 FINAL COST CONSTRUCTION --- ------- — $70,233 ----------------- -- _.........._... _.. ................-- -- Unexpended Funds Funds $14,202 The cost extras (Change Order #1, #2) were for staff -requested protection of water backflow devices to prevent vandalism and to add more planting to improve beautification. The project was funded by Community Development Block Grant (CDBG) Funds. Unexpended funds automatically revert to the unallocated CDBG fund balance. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment Plan [e.g., neighborhood streets, traffic improvements, etc.]). ENVIRONMENTAL IMPACT There are no environmental impacts associated with the recommended action. FISCAL IMPACT no fiscal impacts related with the acceptance of the improvements. Fuad Swiss, PE, PL Executiv Director Public W rks Agency Exhibit 1: Location Map 23C-2 N Z Q. W WILLITS ST ECT SITE WILLITS/SULLIVAN LANDSCAPE IMPROVEMENTS Qat PROJECT SITE I W EDINGER AVE EDINGER AVE LANDSCAPE IMPROVEMENTS SANTA ANA City COUnCII PROJECT NOS.16-7521 & 16-7522: PWA Agenda Date EDINGER AVE & WILLITS/SULLIVAN \� July 3, 2015 LANDSCAPE IMPROVEMENTS vusucwawcspcvxa "e-13 13 O D 23C-4 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: APPROVE REVISED COST ANALYSIS FOR GRANT -FUNDED SAFE ROUTES TO SCHOOL ENHANCEMENTS AT WASHINGTON ELEMENTARY [PROJECT NO. 16-6872, ATPL-5063 (161)] (STRATEGIC PLAN NOS. 6, 1B & 1G) r I 4 iw' CIT ANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2"d Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Approve a revised cost analysis for the grant -funded project, Safe Routes to School Enhancements at Washington Elementary, to utilize additional project grant funding available for traffic safety enhancements, resulting in a net increase of $146,000 in the project contingency budget. On July 8, 2016, the California Transportation Commission (CTC) granted State funds in the amount of up to $723,000 for Active Transportation Program (ATP) enhancements to install traffic safety improvements on City streets adjacent to Washington Elementary (Exhibit 1). The project consists of traffic signal improvements and bulb -outs designed to improve safety and mobility of pedestrians in the area by narrowing the roadway which shortens the distance for school children and pedestrians to cross the street, and which slows down vehicles. On December 6, 2016, the City Council awarded a construction contract to California Professional Engineering, Inc., in the amount of $457,712. The total project delivery cost of $572,141 included $457,712 for the construction contract; $68,657 for administration, inspection, and testing; and a construction contingency of $45,772. The project includes bulb -outs near Garnsey Street at Anahurst Street to make crossing Anahurst Street safer for pedestrians. During construction of the bulb -outs, staff is recommending improving the entire intersection, which was not foreseen. These improvements will not only repair needed sidewalk and pavement, but will also produce improved quality and drivability of the roadway. In addition, staff is also recommending installation of bio-swales, to reduce area flooding. If the additional funding is authorized, staff will coordinate the additional improvement before the contractor demobilizes. The cost of the recommended additional work would be completed within the project budget in the amount not to exceed $146,000. 2313-1 Revise Cost Analysis for Safe Routes to School Enhancements for Washington Elementary July 3, 2018 Page 2 Staff is recommending Council approval of a revised Project Cost Analysis that increases the construction contingency by $146,000, for a total project delivery not to exceed $718,141. The actual costs of the additional work will be approved as needed by staff authorization of change orders. Any approval for cost extras will be to allow for constructing the additional work as described above within the existing project grant funds. The following table summarizes the available funds and the revised requested authorization: AVAILABLE GRANT FUNDS (CTC) $723,000 AUTHORIZED FUNDS TO DELIVER PROJECT $572,141 Construction Contract $457,712 Administration, Inspection, Testing $68,657 Construction Contingency $45,772 I I Added Contract Contingency for Change Order Work $146,000 REVISED TOTAL I $718,141 As shown in the table above and in the revised Project Cost Analysis (Exhibit 2), there are sufficient funds available for the added request and any unexpended grant funds will remain available for future projects within the CTC. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy B (equitably maintain existing streets and associated assets in a state of good repair so they are clean, safe and aesthetically pleasing for all users) and Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans. ENVIRONMENTAL IMPACT In accordance with the California Environmental Quality Act, the recommended actions are exempt from further review. Categorical Exemption Environmental Review No. 2014-116 was filed for this project. 23D-2 Revise Cost Analysis for Safe Routes to School Enhancements for Washington Elementary July 3, 2018 Page 3 FISCAL IMPACT As indicated in the revised Cost Analysis (Exhibit 2), the estimated total construction delivery cost of this project is now $718,141, which includes construction, contract administration, inspection, testing, and an increased authorized contingency of $191,772. Funding is available in the Active Transportation Program Fund (Account No. 14817613-66220, Project 166872) for expenditure in Fiscal Year 2018-19. I I APPROVED AS TO FUNDS & ACCOUNTS: F Fuadweiss, PE, PLS ez Francisco Gutierrez Execut ve Director Executive Director 149 Public orks Agency Finance & Management Services Agency Exhibits: 1. Location Map 2. Revised Cost Analysis 23D-3 SWAW City Council i�1 Agenda Date Project No. 16-6872.1 Safe Routesto School PWA Enhancement for �J EXHIBIT Washington Momonlary N=W%U. v 23D-4 COST ANALYSIS CONSTRUCTION OF THE PROJECT NO. 16-6872: SAFE ROUTES TO SCHOOL ENHANCEMENTS AT WASHINGTON ELEMENTARY Approved by Council on December 6, 2016 Construction Contract $ 457,711.75 Contract Administration $ 28,398.00 Inspection and Testing $ 40,259.25 40,259.25 Contingencies $ Contingencies $ 45,772.00 146,000.00 TOTAL ESTIMATED CONSTRUCTION COSTS $ 572,141.00 Revised Cost Analysis Construction Contract $ 457,711.75 Contract Administration $ 28,398.00 Inspection and Testing $ 40,259.25 Contingencies $ 45,772.00 Additional contingencies this Action $ 146,000.00 TOTAL ESTIMATED CONSTRUCTION COSTS $ 718,141.00 EXHIBIT 2 2301-5 23D-6 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: APPROVE A FOURTH AMENDMENT TO AGREEMENT WITH WESTBOUND COMMUNICATIONS FOR "READY OC" EMERGENCY PREPAREDNESS AND "IF YOU SEE SOMETHING, SAY SOMETHINGT""' PUBLIC AWARENESS CAMPAIGNS (STRATEGIC PLAN NO. 1, 6) MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute a fourth amendment, extending the term with Westbound Communications, Inc. for consultant services in the continuance of the Ready OC Emergency Preparedness Campaign and the "If You See Something, Say Something TM" Public Awareness Campaignfor the period of June 16, 2018 through September 30, 2018, subject to non -substantive changes approved by the City Manager and City Attorney. No additional funding is being requested, as funding needed to complete the additional milestones for the revised term are included in the current $1,500,000 agreement amount. DISCUSSION The United States Department of Homeland Security has developed the Urban Area Security Initiative (UASI) funding program. UASI provides funds to local emergency first responders to enhance security and overall preparedness against acts of terrorism. The City of Anaheim has fiscal responsibility for the FY16 UASI grant for the Anaheim/Santa Ana Urban Area which encompasses the 34 jurisdictions in Orange County. With oversight by the Santa Ana Police Department Homeland Security Division, Westbound Communications, Inc. will continue to expand and update the current Ready OC and "If You See Something, Say Something'"""" Campaigns and existing websites. Westbound Communications, Inc. will perform several functions including, but not limited to, plan and execute several multi- media events, expand outreach into social media venues, produce and deliver Public Service Announcement videos, execute radio station advertisements, and continue to support the core advisory and business partnership group. 25A-1 Fourth Amendment to agreement with Westbound Communications July 3, 2018 Page 2 On June 16, 2015, the Council approved agreement A-2015-112 with Westbound Communications to provide public outreach and promotional services for the Emergency Preparedness & Public Awareness Campaigns. The agreement included a one year term with two one-year options, contingent upon the receipt of FY15 and FY16 UASI Grant awards, for a total not to exceed of $1,500,000. Milestones for year one of the contract totaled $355,000; year 2 totaled $396,000 plus an $18,000 contingency; and, year three totaled $425,000 plus a $20,000 contingency. The options to extend the Agreement, as previously approved by the Council, were exercised, however, it was determined that the parties required an additional three (3) month term to complete the final requirements for the Agreement. This fourth amendment will utilize the remaining funds totaling $37,000. This amounts includes $20,000 of the unused contingency and $17,000 of the remaining not to exceed budget, covering the period of June 16, 2018 through September 30, 2018. Westbound Communications, Inc. brings valuable expertise and institutional knowledge to both campaigns as the initial creators, and primary creative directors since the inception of ReadyOC and "If You See Something, Say Something TM". This includes all branding, strategies, micro - campaigns, and established media relationships with organizations such as the Los Angeles Angels of Anaheim, iHeart Media, and the Anaheim Ducks National Hockey team. This fourth amendment will extend the term of the agreement and provide additional services based on anticipated promotional events, and support for multiple micro -campaigns and successful community outreach platforms STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 1 Community Safety, Objective #6, (enhance Public Safety integration, communications and community outreach). FISCAL IMPACT Funds in the amount of $37,000 are available for the extension of this agreement in the FY2016 UASI Grant Program fund accounts (no. 12514491-62300-17423001186-3492) & (no. 1254491- 62300-17423001186-3498), fiscal year 2018-2019. a entin Chief of Police Santa Ana Police Department Exhibit: 1. Amendment APPROVED AS TO FUNDS AND ACCOUNTS: �t Q�l Lat A Francisco Gutierrez Executive Director Finance & Management Services Agency 25A-2 FOURTH AMENDMENT TO CONSULTANT AGREEMENT WITH WESTBOUND COMMUNICATIONS THIS FOURTH AMENDMENT TO THE ORIGINAL CONSULTANT AGREEMENT is entered into this 3RD day of July 2018, by and between Westbound Communications ("Consultant"), and the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. On June 16, 2015, the City entered into Agreement # A-2015-112 with Consultant to provide Services in the field of public outreach and promotional services related to the ReadyOC (ROC) Emergency Preparedness Campaign and the "If You See Something, Say Something" (S4) Campaign and related matters for the term of June 16, 2015 through June 16, 2016. B. On June 14, 2016, the parties entered into a First Amendment of the Agreement # A-2015- 112-001 wherein the scope of services was amended to address services to be provided pursuant to fiscal year 2015 funding, per Exhibits A and B to the First Amendment; amend the language on the certifications; and exercised its option to extend the term of the original agreement for an additional one year until June 15, 2017. C. The parties entered into a Second Amendment to the Original agreement to amend the scope of services to be provided pursuant to fiscal year 2016 funding; amend the language on the certifications; and exercise its option to extend the terms of the original Agreement until June 15, 2018. D. On May 10, 2017, the Parties entered into a Third Amendment to the Agreement to revise the scope of services with a deadline for the additional services to be completed by May 31, 2017. The Agreement, per the terms of the Second Amendment, expired on June 15, 2018. E. The parties discovered in early June 2018, that the project required additional time to complete and have continued their work on this project since June 15, 2018. The parties desire to extend the term of the Agreement to allow for the continuation and completion of the services. The parties also desire to amend the scope for the purpose of detailing the final combined services to the Agreement. This continuation of the term will involve no additional funding. The parties agree and understand that this will be the final amendment to the Agreement and no additional amendments will be forthcoming after the expiration of this Agreement. THE PARTIES THEREFORE AGREE: 1. Section 1, SCOPE OF SERVICES, shall be amended to include the services detailed in the attached "FYI 6 ReadyOC Statement of Work Extension Covering June 16 -September 30, 2018", attached hereto as Exhibit A-2 and incorporated by reference to the Fourth Amendment to this Agreement. 2. Section 3, Term, shall be amended to reflect the continuation of the term of the Agreement 25A-3 from June 16, 2018 and continue through September 30, 2018. Except as hereinabove modified in this Fourth Amendment, the terms of the Agreement and any prior Amendments shall remain in full force and effect. In the event of any conflict between the terms of this Fourth Amendment and the terms of the Agreement and the prior Amendments, the terms of this Fourth Amendment shall control. IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment to the Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM: Sonia R. Carvalh , City Attorney y: Tamara Bogosian Assistant City Attorney RECOMMENDED FOR APPROVAL: DAVID VALENTIN Chief of Police CITY OF SANTA ANA RAUL GODINEZ 11 City Manager WESTBOUND COMMUNICATIONS, INC. SCOTT SMITH President & CEO Page 2 of 2 25A-4 I CM ill OTFTAV� FY16 READYOC STATEMENT OF WORK EXTENSION COVERING JUNE 16 - SEPTEMBER 30, 2018 General Information: The following Statement of Work (SOW) defines the principle activities and responsibilities of all parties for public outreach services to support the ReadyOC (ROC) Emergency Preparedness Campaign during the period June 16 through September 30, 2018. This extension is being added onto the FYI SOW. This extension shall stand as an agreement between the City of Santa Ana (herein after Santa Ana) and Westbound Communications (herein after WBC) for the contracted period. WBC will supply the following services: o ROC Website Management o Site content updating o Social media content updating o Site optimization o Site maintenance o ROC Advertising and Promotional Communications o Social media outreach o Media/corporate promotions o Publicity services o Public Information Outreach Support for ROC Program o Multimedia production and outreach o Citizen and faith -based outreach o Project Administration Services No deviation of this SOW will be allowed without written consent from the Santa Ana Project Manager. Nevertheless, Santa Ana recognizes that projects of this magnitude will likely encounter various unforeseeable events that may cause tasks to overlap or change, and such change will be permissible with the written approval of the Santa Ana Project Manager. This SOW is contingent upon both WBC and Santa Ana fulfilling their respective responsibilities as defined in the Agreement and within this document. Contents The following are included with this SOW: • Task Descriptions • Project Change Order • Project Schedule • Milestone Payment Schedule, 25A-5 General Project Management Responsibilities Project management occurs throughout the project and is involved in every task. The overall project management activities are listed here for reference. Westbound Responsibilities: a. Maintain project communications with Santa Ana's Project Manager. b. Manage the efforts of the WBC staff and coordinate WBC activities with the Santa Ana Project Manager. c. Conduct on-site status meetings with Santa Ana's Project Manager on a monthly basis or when reasonably required at the discretion of Santa Ana to discuss project status. d. Provide timely responses, within ten (10) business days, to issues raised by Santa Ana's Project Manager. e. Prepare and submit Task Completion Letter(s) with appropriate invoices to Santa Ana's Project Manager. Santa Ana Responsibilities: a. Maintain project communications with the WBC Project Manager. b. Manage the efforts of ROC involved staff and coordinate ROC activities with the WBC Project Manager. c. The Project Manager must ensure that personnel have ample time, resources, and expertise to carry out their respective tasks and responsibilities. d. The Project Manager or his designee will participate in status meetings with the WBC Project Manager on a monthly basis or as may otherwise be reasonably required to discuss project status. e. Provide timely responses, within ten (10) business days, to issues raised by the WBC Project Manager. f. Liaison with all Santa Ana -provided third -party vendors and associated systems. g. Ensure acceptable Change Orders are approved by authorized signature(s). h. Ensure acceptable Task Completion Letter(s) are approved by the Project Manager or his designee. i. Ensure timely payment of invoices. j. Ensure WBC access to server and network equipment and work areas on a 247 basis, with pre -authorization for off -hours. SOW Format: Each task includes the following: Title, Objective, Task Description, Responsibilities and Completion Criteria. The tasks are depicted on the project schedule. All parties recognize that the SOW is not formatted chronologically with contractual obligations defaulting to the Project Schedule unless otherwise noted. TASK 11-A: READYOC STAKEHOLDER MEETING AND UPDATES Objective: Manage campaign updates, administration and promotions to the Steering Committee and Santa Ana Project Manager through activities including, but not limited to a single meeting to be held during this extension period, monthly activity reporting, programming documentation, regular communications and presentation to Steering Committee and corresponding agency partners. 25A-6 Task Description: Provide campaign and promotion updates to the Santa Ana Project Manager through daily and weekly phone calls, emails and meetings (as needed or requested). Manage the ongoing reporting and measurement of campaign data including event impressions, media coverage, social media impressions and website traffic, among others. Maintain weekly and monthly communication with the Steering Committee, including one in-person meeting. Responsibilities: WBC shall: a. Coordinate, manage and participate in one Steering Committee meeting b. Provide daily, weekly and monthly campaign and promotion updates to the Santa Ana Project Manager c. Manage the reporting of campaign measurement d. Manage ongoing expense tracker, budget and campaign schedule e. Submit task completion letters with task invoices to the Santa Ana Project Manager Santa Ana shall: a. Approve campaign progress, updates and promotions b. Support and facilitate partnering and sponsorship efforts with Steering Committee Completion Criteria: This task is considered complete upon completion of administrative deliverables. TASK 11-B: ROC EMERGENCY PREPAREDNESS BUCKET LIST Objective: Plan, develop and implement concept, distributing a minimum of 600 branded five -gallon ROC emergency preparedness buckets to Orange County community members at events scheduled during July and August 2018 Task Description: Maintain the existing Preparedness Bucket List program momentum that encourages Orange County residents to add preparedness to their "bucket list" — i.e. making sure residents receive a bucket and begin gathering emergency kit items. The ROC -branded buckets will be selectively promoted and distributed to OC community members as a demonstration of a simple preparedness step with suggestions included of what key emergency kit items to place within it. Along with serving as a tangible action step toward preparedness, the bucket concept offers numerous promotional opportunities via the website, social media and other ROC communication channels. An initial quantity of 600 branded buckets will be distributed. Responsibilities: WBC shall: a. Plan and develop the program with approval from the Santa Ana Project Manager in alignment with the ROC Steering Committee b. Execute the program in accordance with approved plans Santa Ana shall: a. Approve initiative concepts and materials b. Support and facilitate partnering and sponsorship efforts 25A-7 Completion Criteria: This task is considered complete upon the distribution of a minimum of 600 buckets and when the Santa Ana Project Manager signs the task completion letter (distribution occurs throughout the contract period). TASK 11-C: READY FOX ASSEMBLIES PROGRAM Objective: Continue implementation of the successful Ready Fox/Promise to Prepare school educational programming. This will be accomplished through a multitude of activities, including securing assemblies to take place during the fall 2018 semester. Task Description: Handle all aspects of programming, materials development and distribution, school assemblies and other activities/events. Activities and assignments include: a. Elementary School Assembly Program - extend and implement elementary school assembly program and promotion throughout Orange County, seeking to secure a minimum of 8 assemblies to take place during the fall 2018 semester. L This encompasses scheduling, supporting and promoting assemblies leveraging Officer John Reed or another professional speaker with elementary schools throughout Orange County. ii. Tasks include booking assemblies, managing the annual calendar, promoting events through OCDE, school districts and individual school sites, capturing, posting and distributing video, photos and other content, creating and distributing information kits, and more. b. OCDE & School Districts Communication Program - develop and disseminate communications that promote ROC and P2P emergency preparedness initiatives to and through the county (OCDE) and school districts. Responsibilities: WBC shall: a. Develop the initiative and seek plan approval from the Santa Ana Project Manager in alignment with the ROC Steering Committee Santa Ana shall: a. Approve plan and activities Completion Criteria: This task is considered complete upon delivery of a schedule for presentations secured for the fall 2018 semester. TASK 11-D: COMMUNITY & CITIZENS OUTREACH (SUMMER/FALL 20171 Objective: Develop and implement ongoing community and citizens' outreach at targeted community, emergency preparedness, faith -based and other designated events and/or presentation venues, seeking to reach and engage with hundreds of thousands of citizens and community members. 25A-8 Task Description: Calendar, staff and manage up to 8 community (ex. Cypress Community Festival on 7/28) and emergency preparedness (ex. Dana Point Disaster Preparedness Academy on 8/7) events to targeted community organizations/groups. Activities include: a. Master Community & Citizen Events Calendar - create and manage a master calendar for events that ROC will participate in and/or staff in support of emergency preparedness outreach efforts and the P2P initiative. b. Event Promotion & Staffing - promote and staff (as appropriate) up to 8 community events throughout Orange County that are aligned with the Master Community & Citizen Events Calendar. Event activities may include table displays, team presentations, ROC/P2P materials and giveaway distribution and more. Responsibilities: WBC shall: a. Develop the outreach and seek plan approval from the Santa Ana Project Manager in alignment with the ROC Steering Committee b. Execute the outreach in accordance with the approved plan Santa Ana shall: a. Approve plan and promotional elements Completion Criteria: This task is considered complete upon the completion of the calendared event outreach and when the Santa Ana Project Manager signs the task completion letter. Objective: Update, manage, host and maintain the ReadyOC.org website and provide recommendations for updates to improve the user experience and functionality. Also update, manage and maintain campaign social media channels, Twitter, Facebook, Instagram and YouTube, 24/7 during this two month period. Task Description: Handle all aspects of website and social media updates, optimization, hosting, maintenance, management and metrics/reporting needs in accordance with ROC approved processes and protocols. a. Web Hosting Service — coordinate and maintain third party hosting service for website b. Quality Check — implement a quality check of all links, content and verbiage of the ReadyOC.org website to ensure content is up-to-date for visitors c. Social Media Content - create and share engaging photo, video and relevant preparedness content via social media channels daily, tracking the impressions weekly 25A-9 d. Manage and Enhance ROC Smartphone App — track downloads weekly, send monthly push notifications, update technical features and enhance smartphone app for Apple and Android mobile and tablet products with a new feature such improvement navigation and database functionality. e. App Promotion Plan & Program — develop and implement plan to promote and drive app downloads. This will include a mix of publicity, advertising, video, website, social media and other offline and online marketing elements. Responsibilities: WBC shall: a. Develop the initiative, elements and seek plan approval from the Santa Ana Project Manager in alignment with the ROC Steering Committee Santa Ana shall: a. Approve web elements, collateral materials and social media plan Completion Criteria: This task is considered complete upon the completion of the contract period and when the Santa Ana Project Manager signs the task completion letter. TASK 11-F: PROMOTIONAL MATERIALS Objective: Develop, produce and update ROC and P2P promotional materials for use in all programming as appropriate. Task Description: Handle design, writing, production and distribution of all materials supporting ROC and P213 initiatives. a. ROC/P2P Branded Buckets Responsibilities: WBC shall: a. Develop all materials and seek approval from the Santa Ana Project Manager in alignment with the ROC Steering Committee b. Produce materials in accordance with Steering Committee approvals Santa Ana shall: a. Approve materials Completion Criteria: This task is considered complete upon the order or delivery of the promotional materials, given requirements in some instances for upfront payment, and when the Santa Ana Project Manager signs the task completion letter. Completion is planned to occur by August 2018. 25A-10 AV W IV^ CO) ^yd `` IL m c 0 w N d T N O co d E 0 a d co T C U O V w Nd I.L C 0 .y C d K W co T LL 25A-11 P. ssssss N N N N N N 6 d 2 d a d d d d d d d 0 0 0 0 0 0 0 0 0 0 S0 In O O O O U Z Q K z O w K rZ a a O F Q O � _ O � Q �m a m M Z W Q H m W a O m W R y Z¢ fA Q J N O V p C Q W y Q U J N W X F h 0 Z W O Y O uO � F- o m Qm C? C? W W Y Y Y Y Y Y 25A-11 P. FY16 S4 STATEMENT OF WORK EXTENSION COVERING JUNE 16 -- SEPTEMBER 30, 2018 General Information: The following Statement of Work (SOW) defines the principle activities and responsibilities of all parties for public outreach services to support the "If You See Something, Say Something" (S4) initiative for Orange County during the period of June 16 through September 30, 2018. This extension period is being added onto the FYI SOW. This scope of work shall stand as an agreement between the City of Santa Ana (hereinafter Santa Ana) and Westbound Communications (hereinafter WBC). WBC will supply the following services: o Marketing Support for S4 Program o Citizen and community outreach o Promotional partnering o Event marketing o Project Administration Services o S4 Microsite and Social Media Platform Management o Site maintenance management o Social media content development and outreach o Social media maintenance management No deviation of this SOW will be allowed without written consent from the Santa Ana Project Manager. Nevertheless, Santa Ana recognizes that projects of this magnitude will likely encounter various unforeseeable events that may cause tasks to overlap or change, and such change will be permissible with the approval of Santa Ana Project Manager. This SOW is contingent upon both WBC and Santa Ana fulfilling their respective responsibilities as defined in the Agreement and within this document. Contents The following are included with this SOW: • Task Descriptions • Project Change Order • Project Schedule • Milestone Payment Schedule General Project Management Responsibilities Project management occurs throughout the project and is involved in every task. The overall project management activities are listed here for reference. Westbound Responsibilities: 25A-12 a. Maintain project communications with Santa Ana's Project Manager. b. Manage the efforts of the WBC staff and coordinate WBC activities with the Santa Ana Project Manager. c. Provide timely responses, within ten (10) business days, to issues raised by Santa Ana's Project Manager. d. Prepare and submit, no later than the fifth business day of each month, a status report that includes: the accomplishments of the previous month, activities planned for the current month and any update to the project schedule. e. Prepare and submit project Change Proposals to Santa Ana's Project Manager as necessary. f. Prepare and submit Task Completion Letter(s) to Santa Ana's Project Manager as necessary. Santa Ana Responsibilities: k. Maintain project communications with the WBC Project Manager. I. Manage the efforts of S4 involved staff and coordinate S4 activities with the WBC Project Manager. m. The Project Manager must ensure that their personnel have ample time, resources and expertise to carry out their respective tasks and responsibilities. n. The Project Manager or his designee will participate in the status meeting with the WBC Project Manager on a monthly basis or as may otherwise be reasonably required to discuss project status. o. Provide timely responses, within ten (10) business days, to issues raised by the WBC Project Manager. p. Liaison with all Santa Ana -provided third -party vendors and associated systems. q. Ensure acceptable Change Orders are approved by authorized signature(s). r. Ensure acceptable Task Completion Letter(s) are approved by the Project Manager or his designee. s. Ensure timely payment of invoices. SOW Format: Each task includes the following: Title, Objective, Task Description, Responsibilities and Completion Criteria. The tasks are depicted on the project schedule. All parties recognize that the SOW is not formatted chronologically with contractual obligations defaulting to Project Schedule unless otherwise noted. TASK 8-A: S4 STAKEHOLDER MEETING & PROMOTIONS Objective: Manage campaign updates, administration and promotions to the Steering Committee and Santa Ana Project Manager through activities including, but not limited to a meeting to take place during August 2018. Task Description: 25A-13 Provide campaign and promotion updates to the Santa Ana Project Manager through daily and weekly phone calls, emails and meetings (as needed or requested). Manage the ongoing reporting and measurement of campaign data including event impressions, media coverage, social media impressions and website traffic, among others. Responsibilities: WBC shall: a. Coordinate, manage and participate in one Steering Committee meeting b. Provide daily, weekly and monthly campaign and promotion updates to the Santa Ana Project Manager c. Manage the weekly and monthly reporting of campaign measurement d. Submit task completion letters with task invoices to the Santa Ana Project Manager Santa Ana shall: a. Approve campaign progress, updates and promotions b. Support and facilitate partnering and sponsorship efforts with Steering Committee Santa Ana shall: a. Approve campaign progress, updates and promotions Completion Criteria: This task is considered complete upon completion of administrative deliverables and when the Santa Ana Project Manager signs the completion letter for the task. TASK 8-13: S4 MOBILE APP PROMOTION Objective: Update, manage, maintain and track the campaign's mobile app content, platform and performance 24/7 in accordance with approved processes and protocols. In addition, support promotional efforts that encourage and drive downloads. Task Description: Maintain the campaign's mobile app through daily and weekly management, maintenance and measurement. Responsibilities: WBC shall: a. Update content as appropriate b. Manage the hosting of the mobile app platform Santa Ana shall: a. Approve app updates, management activities, and promotional support materials Completion Criteria: The task is considered complete upon the completion of deliverables and when the Santa Ana Project Manager signs the task completion letter in September 2018. TASK 8-C: S4 SOCIAL MEDIA & MICROSITE MANAGEMENT 10 25A-14 Objective: Update, manage and maintain the campaign's social media channels technical and content platforms 24/7, all in accordance with the approved processes and protocols for each medium. In addition, update, manage and maintain the KeepOCSafe.org microsite technical and content platforms. The microsite will continue to support the campaign's public awareness and engagement activities. Task Description: Maintain the campaign's Twitter, Instagram and YouTube social media platforms through daily and weekly content updates, management, maintenance and measurement. This includes, but is not limited to, content research and updates, social media plan and protocol and tracking. Create and implement at least one Animoto or other video/photo presentation/meme. Host, maintain and refresh the KeepOCSafe.org microsite through weekly and monthly technical and content platform updates. These include, and are not limited to, event and backpack display schedules, photos, media coverage, link updates and more. Responsibilities: WBC shall: a. Share content including, but not limited to, videos, graphics, links and photos, via the campaign's Twitter, Instagram and YouTube platforms a minimum of 10 times a week b. Host the KeepOCSafe.org microsite. c. Manage one technical and content microsite platform update a month. Santa Ana shall: a. Approve microsite updates and management activities, along with social media platform elements. Completion Criteria: The task is considered complete upon the completion of deliverables and when the Santa Ana Project Manager signs the task completion letter in September 2018. TASK 8-D: S4 CITIZENS & COMMUNITY OUTREACH Objective: Continue to conduct community and citizens' outreach to secure the campaign's presence at events via installation of the giant red backpack or comparable approved promotional display and through program -branded materials/signage (ex. T -stands, flyers, posters, signs, window clings, etc.) that are customized and hand -delivered to select countywide venues, community events or facilities. The aim for all outreach is to build on existing awareness campaign awareness. Task Description: Secure a minimum of 4 total venues/events for display (backpack, panda, T -stands). Activities include: 25A-15 ii a. Community & Citizen Events Calendar— create and manage a master annual calendar for all display installation and materials distribution. This includes research and venue/event solicitation for the campaign. b. Secure Future Backpack Installations — outreach to key locations and secure at least two future backpack installations. Responsibilities: WBC shall: a. Develop the outreach and seek plan approval from the ROC Steering Committee. b. Execute the outreach in accordance with the approved plan. Santa Ana shall: a. Approve plan and promotional elements Completion Criteria: This task is considered complete upon the completion of the calendared event outreach and when the Santa Ana Project Manager signs the task completion letter. 12 25A-16 d s N c m E a m c O r N O O r O N O M L d E d Q d N r.. c Re N c O C d K W w r U. 25A-17 M O O O O N N N N n n n n 0C C 0 C 0 0 o 0 e N fA N fA N fA (O lA O O N • yi z w w a a w z O O LL = F U 3 Q W 0 � a � ao 0 o w F z o a z w rc O m a a O U ca O 6 Q y O O a m U O Y Y Y Y F F f F OF 25A-17 M 25A-18 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: AWARD AGREEMENT TO STANTEC FOR A WATER AND SEWER COST OF SERVICE STUDY (NONGENERAL FUND) (STRATEGIC PLAN NO. 6, 1 H} i .,i/ ; 4F c RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and Clerk of the Council to execute an agreement with Stantec to conduct a water and sewer cost of service study for a three-year period beginning July 3, 2018 and expiring July 2, 2021, with provisions for up to two one-year renewal options exercisable by the City Manager and City Attorney, in an amount not to exceed $158,000, including a $138,912 project fee and a contingency of $19,088 for the term of the agreement, subject to nonsubstantive changes approved by the City Manager and City Attorney. DISCUSSION On February, 17, 2015, at the conclusion of a comprehensive rate study, the City Council adopted a five fiscal -year rate plan covering FY 14/15 through FY 18/19 for the City's water and sewer services. The final rate adjustment of the current five fiscal -year plan is scheduled to take effect on July 1, 2018. To comply with California Proposition 218 requirements, as well as to ensure the continued success and financial stability of the water and sewer enterprises, it is necessary to perform a new cost of service study for the next five years. Since the adoption of the current rate plan, staff has completed detailed infrastructure master plan documents that clearly define the capital infrastructure needs for the water and sewer systems. The recommendations of these infrastructure master plans, along with water and sewer enterprise financial statements, reserve policies, and projected community consumption demands and needs, will be studied by the consultant. The consultant will be tasked with establishing a cost recovery, financing, and rate plan for the next five years that is prudent, affordable, and equitable. By completing these efforts, the City will be able to accomplish water and sewer infrastructure investment objectives and ensure the continued provision of award-winning drinking water and reliable sewer collection services for years to come. Staff prepared a Request for Proposals (RFP) which was advertised on the City's Planet Bids website, as well as the City website. Eight proposals were received and evaluated by a selection 2513-1 Award Agreement to Stantec for a Water and Sewer Cost of Service Study July 3, 2018 Page 2 committee based on criteria as outlined in the RFP. Listed below are the responding firms and their respective scores: FIRM Location Preliminary Lechowicz + Tseng Municipal Consultants Oakland 60.3 The top three scoring firms were invited to interview with staff and provide a presentation on their firm, proposal, and approach for meeting the City's needs. At the conclusion of the presentations and interviews, staff ranked the firms as follows: Rank FIRM Location 1 Stantec Walnut Creek 2 Black & Veatch Kansas City 3 Raftelis Los Angeles In accordance with the RFP, staff recommends awarding a contract to Stantec (Exhibit 1). Their proposal and presentation demonstrated a high technical competency and experience performing similar services. The proposal contained a clear path toward achieving City goals and objectives as required by the RFP. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy H (complete water/waste water rate study to ensure adequate resources to capture critical long-term capital needs). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. 25B-2 Score Black & Veatch Kansas City 89.5 Raftelis Los Angeles 83.8 Stantec Walnut Creek 82.6 Robert D. Niehause, Inc. Santa Barbara 77.9 NBS Temecula 75.5 FG Solutions New York City 73.5 Municipal and Financial Services Group Annapolis 71.6 Lechowicz + Tseng Municipal Consultants Oakland 60.3 The top three scoring firms were invited to interview with staff and provide a presentation on their firm, proposal, and approach for meeting the City's needs. At the conclusion of the presentations and interviews, staff ranked the firms as follows: Rank FIRM Location 1 Stantec Walnut Creek 2 Black & Veatch Kansas City 3 Raftelis Los Angeles In accordance with the RFP, staff recommends awarding a contract to Stantec (Exhibit 1). Their proposal and presentation demonstrated a high technical competency and experience performing similar services. The proposal contained a clear path toward achieving City goals and objectives as required by the RFP. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy H (complete water/waste water rate study to ensure adequate resources to capture critical long-term capital needs). ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. 25B-2 Award Agreement to Stantec for a Water and Sewer Cost of Service Study July 3, 2018 Page 3 FISCAL IMPACT Funds are budgeted and will be available in the Water Administration and Engineering Account (No. 06017645-62300). Funds are estimated to be spent as follows: Fiscal Year Amount FY 2018/19 $113,912 FY 2019/20 $15,000 FY 2020/21 $10,000 TOTAL $138,912 APPROVED AS TO FUNDS AND ACCOUNTS: Fuad iss, Francisco Gutierrez Executi a Director Executive Director Public or ks Agency Finance & Management Services Agency Exhibit: 1. Agreement 25B-3 25B-4 AGREEMENT TO PERFORM COST OF SERVICE STUDY FOR WATER AND SEWER ENTERPRISES THIS AGREEMENT is made and entered into this 3rd -day of July, 2018 by and between Stantec ("Corisultant'), and the City of Santa Ana, a charter city and municipal corporation organized and existing. under the Constitution and laws of the State of California (" City's. RECITALS A. On December 21, 2017, the City issued Request for Proposal No. 17-142, by which it sought a consultant to perform a cost of service study for the City's water and sewer enterprises. B: Consultant submitted a responsive proposal that was selected by the City. Consultant represents that it is able and willing to provide the services described in the scope of work that was included in RFP No. 17-142 and addendum thereto. C. In undertaking the performance of this Agreement,. Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional contracting fain in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall perform the services that were described in the scope of work that was included in RFP No. 17-142 and as more specifically delineated in Consultant's proposal, which is attached as Exhibit A and incorporated in full. 2. COMPENSATION a. City agrees to pay, and Consultant agrees to accept as total payment for its services under this Agreement, the rates and charges identified in Exhibit B. The total sum to be expended under the term of this Agreement, including any extension periods, shall not exceed $158,000. This sum is comprised of (1) the base amount of $138,912 and (2) a contingency in the amount of $19,088 for additional services at the City's sole discretion. b. Payment by City shall be made within forty-five (45) days following receipt ofproperinvoice evidencing work performed, subject to City accounting procedures. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals and Scope of Work, which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above and terminate on July 2, 2021, unless terminated earlier in accordance with Section 17, below. The tern of this Agreement may be extended for up to two 1 -year periods upon awriting executed by the City Manager and City Attorney. FP�age I of 8 LSCS I 1 4. PREVAILING WAGES Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws'), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. If the services being performed are part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. Consultant shall defend, indemnify and hold the City, its elected officials, officers, employees and agents free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws. 5. INDEPENDENT CONTRATOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 6. OWNERSHIP OF MATERIALS This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require all subconsultants to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were provided to Consultant by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 7 INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subconsultants, if any, to obtain and maintain insurance as described below: a, Commercial General Liability Insurance. Consultant shall maintain commercial general liability insurance naming the City, its officers, employees, agents, volunteers and representatives as additional insured(s) and shall include, but not be limited to protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of Consultant's operations in the performance of this Agreement, including, without limitation, acts Page 2 of 8 25B-6 involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $1,000,000 per occurrence, with $2,000,000 in the aggregate. Such insurance shall (a) name the City, its officers, employees, agents, volunteers and representatives as additional insured(s); (b) be primary with respect to insurance or self-insurance programs maintained by the City; and (c) contain standard separation of insureds provisions. b. Business automobile liability insurance, or equivalent form, with a combined single limit of not less than $1,000,000 per occurrence. Such insurance shall include coverage for owned, hired and non -owned automobiles. C. Worker's Compensation Insurance. In accordance with the California Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. d. If Consultant is or employs a Iicensed professional such as an architect or engineer: Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim with $2,000,000 in the aggregate. e. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i) Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii) Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved by the City. (iii) Certificates and policies shall state that the policies shall not be cancelled or reduced in coverage or changed in any other material aspect, by consultant, without thirty (30) days prior written notice to the City. (iv) Consultant shall supply City with a fully executed additional insured endorsement. f. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 8. INDEMNIFICATION Consultant agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from liability: (1) for personal injury, damages, Page 3 of 8 25B-7 just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Consultant or its subconsultants, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Consultant further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant. 9. INTELLECTUAL PROPERTY INDEMNIFICATION Consultant shall defend, indemnify and hold harmless the City, its officers, agents, representatives, and employees against any and all liability, including costs, and attorney's fees, for infringement of any United States' letters patent, traiemark, or copyright contained in the work product or documents provided by Consultant to the City pursuant to this Agreement. 10. RECORDS Consultant shall keep records and invoices in connection with the work to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 11. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation Page 4 of 8 r of confidentiality, (d) is required to be disclosed by operation of law, or (e) is independently developed by the Consultant without reference to information disclosed by the City. 12. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interest and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 13. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Sox 1988 Santa Ana, CA 92702-1988 Fax 714-647-6956 Executive Director Public Works Agency City of Santa Ana 20 Civic Center Plaza (M-21) P.O. Box 1988 Santa Ana, CA 92702 Fax 714-647-5635 To Consultant: Stantec 1340 Treat Ave. Suite 300 Walnut Creek, CA 94597 A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these timeframes, weekends, federal, state, County or City holidays shall be excluded. 14. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant regarding the subject matter herein, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments Page 5 of 8 25B-9 hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 15. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 16. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 17. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 18. NON -]DISCRIMINATION Consultant shall not discriminate because of race, color, creed, relation, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities or in connection with any activities under this Agreement. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. Page 6 of 8 25B-10 19. JURISDICTION -VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 20. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 21. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: MARIA D. HUIZAR Clerk of the Council APPROVED AS TO FORM SONIA R. CARVALHO City Attorney By: n M. Funk Assistant City Attorney CITY OF SANTA ANA RAUL GODINEZ II City Manager :K�7►Fylf�ftl7cl� Y Name: Title: Page 7 of 8 25B-11 FOR APPROVAL Edwin "William" Galvez, P.E. Acting Executive Director Public Works Agency Page 8 of 8 25B-12 EXHIBIT A PROJECT PROPOSAL 25B-13 a PTI - 5B-14 A. Cover Letter.....................................................................1 B. Agreement Statement..................................................... 2 C. Firm & Team Experience ................................................ 3 OurTeam.............................................................................. 4 D. Understanding of Need .................................................. 6 Project Understanding...........................................................6 Scope.................................................................................... 7 Task I. Water, Recycled Water and Sanitary Sewer System Evaluation.............................................................7 Task ll. Cost of Service Rate Model and Scenario Development...................................................................... 8 Task III. Cost of Service Report ......................................11 Task IV. Public Meetings and Presentations .................. 11 Task V. Contract Kickoff Meeting....................................12 Task VI. Project Management & Coordination................12 Task VII. Midterm Review...............................................12 Task VIII. Value -Added Related Services ....................... 12 E. Relevant Project Experience ........................................ 13 F. Schedule.........................................................................19 G. References..................................................................... 20 Appendix: Resumes..........................................................21 25B-15 A. Cover Letter ® Stantec City of Santa Ana Attn: Cesar Barrera Public Works Agency, City Corporation Yard 215 South Center Avenue, Building A Santa Ana CA 92703 Re: RFP No. 17-142 — Water and Sewer Enterprise Cost of Service Study Dear Mr. Barrera and Members of the Selection Committee: January 23, 2018 We are pleased to present this proposal to conduct a water and sewer cost of service study for the City of Santa Ana (City). Our team understands that the success of your utility is often Judged on how well you avoid financial turmoil and legal challenges while you continue to invest in your assets and deliver great services. A financial plan and rate analysis from Stantec helps you identify difficulties in advance, analyze your options and plot the course for a safe arrival at your future. Our project team is uniquely qualified to assist the City in this Important study. Our Project Manager, Mark Hildebrand, has 16 years of utility rate consulting experience in California. He is also an expert in the legal landscape for water rate -setting in California and has had articles published on the implications of Proposition 218 on utility rate making. He will serve as your main point of contact during proposal evaluation as well as during the project. Our Regional Advisor, John Moynier, is based in our Irvine office, and has a long history of working as a trusted advisor to local public utilities, including a number of Orange County water and wastewater agencies. We have teamed with CV Strategies (a frequent partner to Stantec on similar projects) to provide translation services and potentially provide public outreach (as a value-added service if requested by the City). Mr. Hildebrand and a number of his colleagues are currently serving on the AWWA Rates and Charges Committee where they are actively involved In developing the industry standards for rate setting, as published in AW WA's Manual Mt — Principles of Water Rates, Fees and Charges. This experience means we bring industry best practices to our approach to the City in the form of financial forecasting, cost of service, and rate making. Stantec Consulting Services Inc. (Stantec) is a publicly traded corporation, and Mr. Hildebrand has the authority to make legally binding commitments for Stantec. If you have any questions, please do not hesitate to contact us. Sincerely, ark Rildebrand Project Manager & Contracting Authority Mark.Hildebrand@Stantec.com 1340 Treat Ave. Suite 300 Walnut Creek, CA 94597 (510) 316-0621 City of Santa Ana California I water and Sewer Enterprise Cost of Sw&e Study 25B-17 FMM7 B. Agreement Statement We have reviewed the Standard Agreement Included In the RFP and accept the terms and conditions as written. r' Csy at Saha Ana, CalUmMa I Weta end Sewer Erdaprlse Cost otSmIce Study 25B-19 stem s C. Firm & Team Experience At Stantec we're financial and management consultants, designers, engineers, scientists, and project managers, innovating together at the intersection of community, creativity, and client relationships. Balancing these priorities results in projects that advance the quality of life in communities across the globe. For the City of Santa Ana, members of our Financial Services Practice will complete all work for the study. We have completed well over 1,000 financial and rate related studies for clients around the country. Our group includes 34 professionals with a range of experience In the municipal financial sector, totaling over 300 years of experience. We have seven consultants with over 20 years of Industry experience. The combination of our diverse backgrounds and experience has made us who we are today— a trusted source of independent and objective financial management consulting to local governments and utilities throughout the country. City of Santa Ana, cathode I Water and Sewer Enterprise Cost or Service Study 25B-21 Start% 3 It is this deep bench of experience that brings value to your project. As a group, we work together and learn from each other's experiences. This sharing of knowledge and expertise will be brought to your project as well. You can be assured that our team will develop a comprehensive and balanced solution to this study. Our Team We are pleased to present the City with a complete and well-rounded project team, including experts in the field of water, sewer and recycled rate design, cost of service and the requirements of Proposition 218. Our carefully selected team has a depth of experience in each service requested by the City. We have structured our project team with members who are particularly strong in: • Multi -Year Financial Management Plans. Our financial planning platform was designed for systems of similar size operated by local government agencies, including capital and operations & maintenance expense budgeting, grant funding, and financial best practices relative to reserve policies, capital funding (debt levels), and rate adjustments. • Cost -based Rates. We develop rates that clearly allocate costs to customers based on real design criteria and usage characteristics. Our approach will yield fair and equitable rates for each class of customer. • Robust and Defensible Rate Design. We lead the Industry in rate structure concepts that address specific local policy objectives (such as conservation, affordability, and fixed cost recovery/revenue stability) while conforming to accepted industry practice and legal precedent. This is something that we've been doing since well before the infamous San Juan Capistrano decision (Prop 218 court case). • Rate Structures that Promote Conservation while maintaining financial stability, and are founded in the strength of multiple years of your entire billing database, notjust a "representative sample" as often used in less diligent approaches. • The clarity of our communications are second to none. In addition, we are prepared to team with CV Strategies, which is a well-established strategic communications firm that is known for their compelling public outreach campaigns on water and wastewater issues. They possess the skills on how to captivate target audiences in creative and engaging ways with otherwise complex information. Our Financial Services practice has over 30 professional consultants qualified to provide the requested services to the City in the rare situation that a substitute team member be required. Moreover, we have team members who will dedicate a significant portion of their time to quality assurance and quality control reviews in order to provide internal auditing of the work products we prepare for the City. The organization chart and corresponding table outline the key members of our team and their role in providing the requested services. Resumes are presented in the appendix. Cdy d Sada Ana. California I water and Sewer Enterprise Cost of Service Study 25B-22 Sanac a City of Dixon Regional Advisor Ir Project Manager John Moynier I Mark Hildebrand Public Outreach Erin Gilhuly Quality Advisor cv strategies Andrew Burnham Sr. Project Consultant Benjamin Stewart Financial Analyst Katie Morrissey Team Member Role in.ProjpctDevoted to CityysStudy Responsibilitfies Main point of contact for the City and Mark Hildebrand Project Manager 50 %p all contract -related matters; lead cortsalt'aml at alf meetirs@Vftufto presentations. John Moynier Regional Advisor 10% Client services relationship and local knowledge. Quality control reviews with team for - orAndrew An. drewBurnham Quality Advisor. 10% data and models; quality assurance reviews of the, methodologies utilized. Backup Project Manager. Lead modeler and working at the Benjamin Stewart Sr. Project Consultant 60% direction of the Project Manager to prepare deliverables. Working at the direction of the Sr. Katie Morrissey Financial Analyst 60% Consultant to assist with data entry and other modeling tasks. Public Outreach As -needed public engagement, Erin Gilhuly Subconsuitant 30% community relations and Image enhancement services. City of Saha Ana CarderNa I Water and Sewer Enterprise Cast of Save Study 25B-23 stantec 5 C, D. Understanding of Need This section presents our understanding of the requested study, an outline of our anticipated approach including tasks that will be completed, and suggestions for value -add services that our team can provide. Projecf Understanding The City of Santa Ana was incorporated in 1886 and has a population of approximately 334,000. The City's Water and Sewer Enterprises are operated through the Department of Public Works. The Water Enterprise serves potable and reclaimed water to residential, commercial, industrial, institutional and irrigation customers. The majority of the City's water supply comes from local groundwater (as managed by OCWD) while about 30 — 35% is imported water that Is purchased from the Metropolitan Water District of Southern California (MWD). The City purchases (then sells) recycled water from OCWD, whose costs are billed both annually and regularly. The Sewer Enterprise collects and transports all sanitary flow to the Orange County Sanitation District (OCSD), which bills customers separately for treatment services on the property tax roll. The last Water, Sewer and Recycled water rate study was completed in 2014 and included a comprehensive analysis of the systems' rehabilitation and replacement needs. The current study (to be completed by September 2018) will independently review the cost -of -service basis of the current rates and implement a new 5 -year rate schedule by July 2019. This current cost -of -service review will focus on the balance of fixed versus variable revenue and compliance with applicable (and evolving) law. Similar to other utilities in Orange County, as well as the rest of the State, the water demand in Santa Ana has declined for a myriad of reasons. Regardless of the cause of those declines, Stantec understands that the City desires a financial plan and rate structure that protects the City from the revenue swings that can accompany changes in water demand. The City's current water rates collect less than 20% of revenue through a fixed source, which is relatively low compared to the rest of the industry. As part of this study, and at no additional cost, Stantec will examine the benefits of adopting drought rates as a hedge against unknown future water demands (see Task II.c). Stantec will recommend any adjustments that are necessary to financially and legally protect the City and its ratepayers. The rate plan will equitably provide for all utility costs while minimizing financial Impacts to customers. As a nationally -recognized water and wastewater engineering firm, Stantec is uniquely positioned to help the City to frame the value of proposed water system improvements and replacements and how those costs will benefit customers. As part of this study, Stantec will evaluate existing O&M costs and project future costs based on current levels as well as any changes in service levels. We will work with City staff to determine if existing O&M costs are aligned with the levels of service to customers. Again, Stantec is uniquely positioned to evaluate the City's service levels and costs through our proprietary benchmarking database (see Task Il.e). This study will also take a close look at the City's water rate structure within the context of California law, especially In light of the San Juan Capistrano court case which has "raised the bar" on the level of CityofSanleAna. Cardomla I Weler end Sewer Enterprba Castor Service Study 25B-25 Slan&C 6 explanation required from rate reports. For example, in reviewing the Citys 2014 water rate study report (1) there doesn't appear to be a justification for the per-unit charge for multifamily residences, (2) the OCWD "pass-through" formula isn't explained, and (3) the recycled water rates (which are lower than potable water rates) are not fully explained. While it is possible that all of these elements have an equitable basis, there is insufficient documentation. And Insufficient documentation is the root cause of most successful Proposition 218 lawsuits. At Stantec, we are proud to say that we have been providing thorough and defensible deliverables (ultimately the "administrative record" in court) since before the San Juan Capistrano case made it the "new standard". Finally, because we recognized that this engagement includes a mid-term review (Task VII), we will be particularly attentive to developing financial models that can be efficiently populated with updated O&M and capital spending data (as is part of the standard added value that we provide to our clients). Scope Based on our understanding of the City and the requested services, we propose to complete the following tasks. The schedule in Section F and the Fee in Section H correspond with these tasks. Task I. Water, Recycled Water and Sanitary Sewer System Evaluation To initialize the study we will submit a data request to the City. Shortly thereafter, we will conduct a Project Kickoff Meeting with staff to: ✓ Discuss key issues, roles and responsibilities ✓ Confirm study objectives and further explore project drivers such as revenue stability ✓ Confirm data requirements and discuss the data already received ✓ Finalize the project schedule, including key milestone dates and deliverables Once all data has been received, we will review it in detail. This will include a review of master plan documents, historical performance, financial data, prior studies, capital plans, budgets and service agreements. Follow-up calls with staff will be made to ensure full understanding of all data received. We will perform a detailed review of the data pertaining to the water, recycled water and sewer enterprises. Based on our review of all applicable data, Stantec shall Identify any cost of service gaps or discrepancies between the existing rate structures, the projected maintenance, operations and capital spending plans and the effects of drought and associated reduced water consumption demands. This summary will also identify the strategy that Stantec proposes to use to address any cost of service gaps identified. Meetings Kickoff Meeting Deliverables Existing Cost of Service Summary Technical Memo (print and electronic) City of Santa Ma, Califomia I Water and Sewer Enterprise Coll of Service Study 25B-26 Stantec 7 Task II. Cost of Service Rate Model and Scenario Development Task II will be the bulk of our financial analysis, during which we will identify revenue requirements, analyze cost of service, and develop rate design alternatives for the water, recycled water, and sewer systems, as well as evaluate the City's miscellaneous fees, assess service levels, and conduct benchmarking/surveying. Task Il.a - Revenue Requirements We use our revenue sufficiency and financial planning module to develop a 10 -year financial management plan for both enterprise funds, including projected annual revenue requirements and rate adjustments. This module allows examination of historical operating expenses, growth and consumption trends, alternative capital improvement spending levels, debt service coverage ratios, levels of operating and capital reserves, and other financial policies/goals that affect the revenue requirements of the funds. Demand Projections. In addition to evaluating financial goals and objectives, we will also evaluate alternative demand projections, cost escalation factors, changes in usage patterns, elasticity of customer demand in response to rate increases, and other variables that could affect the financial performance of the enterprises, including separately identifying portions of the utility system revenues that fund utility system operating costs. One item of particular importance is the projection of volumetric sales. Water use patterns are influenced by price signals, and change in customer behavior can also be affected by other non -price factors, such as rainfall (as evidenced by the recent drought), conservation programs (as evidenced by reactions to the Governor's drought declaration in 2015), and economic conditions (as evidenced by the recent recession). We will analyze probable ranges of demand changes in response to different degrees of rate increases, weather patterns, rate structure changes, etc. Capital Spending Scenarios. Our tools are particularly adept and showing the rate impact of comparative capital spending scenarios. Our team is equally adept at examining the age and condition of your system to understand whether the currently level of capital spending is sufficient to keep pace with the depreciation of the system's assets. We will work with staff to develop a series of comparative capital spending scenarios that can be presented to stakeholders for consideration. Funding Plan. For all scenarios reviewed, the financial planning module will develop a funding plan, including the identification of the amount, timing, and type of borrowing required as may be necessary (debt scenarios). We will examine each enterprise fund's use of debt financing for capital improvements and assess the impact of current levels of debt financing, as well as building a financing scenario to support the City in maintaining a proper balance for debt coverage and rate stabilization overthe study period. Ofty d Santa Ana, Calil mia I Water and Sewer Enterprise Cost of Service Study 25B-27 StaNec 8 Reserves. Closely related to this analysis is an examination of adequacy of reserves for operating and capital projects. Adequate reserves are fundamental to achieving financial stability, and can help some systems to avoid sudden or disruptive rate adjustments in the face of unanticipated operating or capital needs. We will examine each enterprises' fund balances and incorporate these balances and alternative reserve policies into the interactive planning process and the conversations we will have regarding financial sustainability. Stantec will work interactively with City staff to validate our financial planning findings during a Financial Planning Validation Workshop. Task Il.b - Cost of Service We Identify the most appropriate Prop 218 -compliant cost -of -service allocation methodologies and rate structures based upon available data, legal requirements, system configuration, service agreements, resources, customer base, demand and usage characteristics, local practice, and public policy objectives. We then customize the cost allocation module to employ the identified methodologies and concepts best suited for each utility system. We will evaluate the behavior of various customer classes and discuss option, as appropriate, of adding a customer class or combining existing customer classes. At the conclusion of the cost allocation portion of the analysis, we compare the resulting allocation of revenue requirements to the revenue generated by the current rates for each customer class. To the extent current revenue recovery levels are not in line with the results of the cost of service allocation analysis, we evaluate alternative levels of revenue recovery by class of customer within the rate structure analysis that would better comport with the identified cost of service allocations. Stantec will work interactively with City staff to validate our cost of service findings during a Cost of Service Workshop. Task Il.c - Rate Design We will review of the City's current rate structures and collaborate with City staff to understand the options of alternative rate structures. The rate structure will be evaluated (including a review and analysis of current block sizes and seasonal rate differentials) to determine if they may better serve the City's fiscal stability and/or public policy objectives relating to fixed cost recovery, economic development, and affordability, while ensuring a fair and equitable distribution of costs, and conformance to accepted industry practice, legal precedent, and terms of any service agreements. As part of this effort, we will be evaluating the distribution of costs between the fixed and variable components of the rate structure, and will make recommendations that are consistentwith your cost recovery objectives. In addition to standard rates, Stantec proposes to develop a drought rate schedule for the City. Drought rates are alternative rate schedules that are adopted and then implemented in the event of a drought (as declared by City Council). Drought rates are a powerful tool against revenue shortfalls during droughts. Interestingly, drought rates don't always involve a change in the unit rate for water, but rather sometimes the adjustment is to the allocation of water for various tiered rates. City of Santa Ana, California I Wale mil Sewer Enterprise Cort of Service Smdy 25B-28 Sweec 9 A critical element to evaluating a rate design option is understanding the sensitivity of rate revenue to changes in key variables such as water consumption, the cost of supply water, regulatory requirements, and economic conditions. Stantec's rate design models are adept at running sensitivity analysis because we use comprehensive billing data which allows us to incorporate features such as price elasticity of demand. By combining the concepts of conservation -based tiered rates with affordability concepts, Stantec has been able to lower the monthly bill for low water user, even In the face of general rate revenue increases. Stantec's review of the City rate design will also include an assessment of the current formula that Is utilized to pass-through costs from water purveyors. Stantec will make adjustments as necessary and capture the formula in a "Pass-through adjustment calculator" in MS Excel. Affordability—The City has also requested strategies to provide rates that reduce the economic impact of utility costs on elderly or low-income customers. Stantec leads the industry in our focus on the affordability challenge that is facing water utilities. Stantec has found innovative and legal approaches to rate design that will fiscally reward consumers for conserving water while collecting revenue for the City's conservation program from those who are wasteful. We have also developed a unique approach to evaluating the affordability of your rates — WARlTm for weighted average residential index. This approach allows our clients to examine concerns at micro levels throughout their service area and tailor programs to meet the needs of their low-income residents. Stantec will work with City staff to finalize rate structure decisions during a Rate Design Workshop. Task Il.d - Evaluate Miscellaneous Fees During this portion of the study, we will review the City's existing fees and utility operations to determine if the fees are appropriate and whether any additional fees or charges are warranted to compensate the enterprises for services rendered, based upon our knowledge of accepted national and local practices. Task Il.e - Survey and Benchmarking Stantec will conduct a survey that provides a clear comparison of the existing and proposed rates to the rates being charged by all other utilities within Orange County. In our experience, we have found that such surveys are invaluable for communicating with City Council and the public. As a value -add (and for no additional cost), we propose to conduct a benchmarking analysis that compares key operations metrics to similar utilities in the area based on published and proprietary Industry metrics and researched performance data. Stantec has developed the largest reliable database of utility financial metrics in the United States from over 500 agencies. Called UtilitiWise, we use this data to benchmark our clients' financial performance to industry averages or their peers. These data give our clients perspective on what 'good" looks like in our unique municipal water sector. Utilitiwise also allows us to prepare a comparison of current utility system costs relative to service levels. Benchmarking can be used to assess performance objectively; expose potential areas for improvement; identify effective processes or management strategies, with a view to their adoption; and test whether tactics have been successful. C ty of Soma Ana Cardorma I Water and Sewer Enterprise Cost or Service Study 25B-29 Swim 10 Financial Planning Workshop Cost of Service Workshop Rate Design Workshop Preliminary results as presented in Workshop handouts Pass-through adjustment calculator in MS Excel Utility Survey (to be documented in final report) Benchmarking Results (to be documented in final report Task III. Cost of Service Report Stantec produces detailed and transparent documentation of our analysis. And the reason that we spend extra time on our reports Isn't just for our clients; we also do it for our own peace of mind. The final report to a rate study becomes a tremendously Important legal document that will play a pivotal role in the outcome of any legal challenges that may be levied against the City (which is an increasingly common occurrence these days). We will first prepare a draft for your review, and once comments are received, we will incorporate them Into a final report. The report provides a simplified and straightforward synopsis of the analysis, and includes appendices that contain a series of graphs, charts, and tables that provide the supporting details of the study described in the body of the report. The report will include a stand-alone Executive Summary for distribution, which often serves as an effective communication tool with stakeholders. As previously mentioned, our Report will include results from the utility survey, as well as relevant benchmarking results. In addition to the report, we will also prepare a Proposition 218 Notification (in English, Spanish and Vietnamese). N/A Defiverables Draft Report Final Report Proposition 218 Compliant Notices (3 languages) Task IV. Public Meetings and Presentations Public support for rate changes depends on whether or not the public perceives the rates as fair. This perception depends, amongst other things, on the clarity of presentations and discussions at public hearings. Minor misunderstandings of the underlying rationale for a selected approach can cause disproportionate dissatisfaction with the proposed rates. By engaging the Council at the beginning of the project and then again in the finalization of the rate design will give these community leaders an advance understanding of the rates and make subsequent public discourse less confused Prop 218 Process. Stantec will assist the City with the rate approval process, Including presentations to Council, preparing testimonies for rate hearings, and presenting at those rate hearings. The presentations are critical not just to comply with Prop 218 noticing requirements, but also to generate acceptance of the study recommendations. City of Sarda Ana Cal'don la I Water and sexy Enterprise Cost of Sero Study 25B-30 CV Strategies will assist staff in the preparation of the Prop 218 Notification letter, including having the notification prepared in English, Spanish and Vietnamese. Participation in and general pu Copies of press Task V. Contract Kickoff Meeting to six (6) meetings with staff, Mayor, Council As requested by the RFP, Stantec will attend one (1) Contract Kickoff meeting at the City's Corporate Yard, at which City staff will share contact information, safety and security protocols. Contract Kick -Off Meeting with City Staff Final Protect Schedule Task VI. Project Management & Coordination Mark Hildebrand will manage our project team, including scheduling, invoicing, and all meetings and deliverables. We will invoice the City on a monthly basis and will include a summary of the tasks, results and progress as part of each invoice. Task VII. Midterm Review Following the initial study completed In the tasks above, we will perform a midterm review in either year 2 or 3 of the implemented 5 -year rate plan. This will include an update to the revenue requirements and a review of the cost of service and rate design elements to evaluate the performance at that point in time. Should adjustments be required, we will provide the necessary documentation, including Proposition 218 notices. The review will Include an addendum to the initial report. Stantec's financial models will be highly tailored to the City's financial reports, therefore updating the models with new financial data during the midterm review will be efficient and repeatable. Task VIII. Value -Added Related Services Stantec offers a variety of rate -related services that are included in our basic price proposal and described in the text above. This includes utilization of our Utilitiwise database (see Task II.e) and development of drought rates (see Task Il.c). Our proposed team includes CV Strategies to provide translation services for the Proposition 218 Notification. In addition, CV Strategies Is available to provide additional customer education or to develop an outreach program. These services would be in addition to Stantec's standard (top quality) engagement of Council over the course of the project. Cly d sate Arq Calimda I water aid Sewer ENerprise Cost of Service study 25B-31 Stmuec 12 E. Relevant Project Experience The following pages provide descriptions of key projects completed for public agencies in California within the past five years. Presented thereafter is a table that present a selection of similar experience with rate studies and revenue programs for clients in California and throughout the county. Dates of Service: 2015 — Present Project Team: Mark Hildebrand, Matt Freiberg, Ben Stewart Client Contact: Joone Lopez, General Manager;jlopez@mnwd.com; (949) 448-4071; 27500 La Paz Rd. Laguna Niguel, CA 9287 Moulton Nigel, CA Comprehensive Water, Sewer and Recycled Water Rate Study The Moulton Niguel Water District is a retail water, wastewater and recycled water purveyor located in Orange County, CA. The district indirectly purchases wholesale water that originates from Colorado River California Aqueduct. In 2014, the state of California issued drought state of emergency declarations in response to record -low water levels in California's rivers and reservoirs, thereby Impacting the cost of imported water and the availability of water supplies. Our team worked with the district to develop budget based water rates, recycled water rates, and wastewater rates that would enable the district to (1) recover projected operating cost increases; (2) continue to repair and replace the district's aging infrastructure; (3) maintain the financial stability of the utilities; (4) avoid the depletion of reserves; and (5) comply with regulatory and legal requirements. Moulton Niguel's water rates are budget -based rates. Residential customers are given an indoor and an outdoor water budget for the first two tiers, respectively, and then three additional tiers which are used to fund the conservation program and peaking costs. Commercial customers' water budgets are calculated based on a three-year rolling average of monthly water use. Irrigation and recycled water customers' water budgets are calculated in the same manners as residential outdoor water budgets. Stantec calculated a monthly fire protection charge for properties with private fire suppression systems. In response to the drought, Stantec helped the district shape water shortage rates that complement the district's water shortage contingency plan, which adjusts customers' assigned water budgets during specified stages. During Stages 2-5, any customer who uses water In excess of their calculated water budget is required to pay a unit -based administrative penalty in addition to the standard volumetric charge. The wastewater rates were structured to recover the costs to operate and maintain the wastewater collection system and to pay wholesale costs for treating and disposing of its wastewater. City of Santa Ana. Catifonda I Water and Sewer Enterprise Cwt of Service Study 2513-33 Stantec 13 Dates of Service: 2014 — Present Project Team: Mark Hildebrand, Matt Freiberg, Ben Stewart, Efin Gilhuly (CV Strategies) Client Contact: Kay Godbey, Director of Finance; kgodbey@cvwd.org; (760) 398-2661 ext. 2240; 75515 Hovley Lane, East Palm Desert, CA 92260 Coachella Valley Water District, CA Potable Water, Recycled Water, Canal Water, Sewer, and Replenishment Program Rate Study Coachella Valley Water District (CVWD) is a large and complex utility that services 1,000 square miles of California land and providing a myriad of utility services, including the delivery of Irrigation and domestic (potable) water, collecting and recycling wastewater, managing stormwater, and importing water to replenish its groundwater basin. Stantec been working collaboratively with CVWD staff and the District's Board for over 3 years to develop a series of recommendations that have overhauled the manner in which the District charges its customers for services. A comprehensive was needed to address the historical complexities of the (then) existing rates, which were based on decades of undocumented Board policy decisions, interdepartmental agreements for cost sharing, legal intricacies tied to water rights, service area acquisitions, the sharing of mitigation costs among utilities due to past legal action, and aquifers that have a poorly understood hydraulic relationship. Recommendations included the elimination (simplification) of different service areas rates, the merging of three separate replenishment programs into a single program and fund, strengthening the cost -of -service foundation for all rates, and the use of more transparent rate charge methodologies for capacity charges. Armed with robust rates, Coachella Valley Water District can now focus its attention on providing outstanding service to its customers and delivering its ambitious capital program. When our work first began, the District's primary goal was to fund their long-term needs. With the value brought by Stantec, the District how has the peace of mind of equitable and transparent rates, robust rate revenue, fair allocation of costs among its various utilities, and improved relations with its customer base. City of Santa Ana, Cardania I Water and Sever Enterprise Cost of Service Study 25B-34 Stantec 14 City of Bakersfield, CA Water Rate Study Dates of Service: 2017 Project Team: Mark Hildebrand, Matt Freiberg, Ben Stewart Client Contact: Mr. Nelson Smith, Finance Director; nsmith@bakersfieldcity.us; (661) 326- 3740; 1600 Truxtun Ave. Bakersfield, CA 93301 The City of Bakersfield (City) engaged Stantec Consulting to study the finances of the City's Domestic Water Fund and develop recommendations for updating the Domestic Water Rates. The study was primarily a long-range financial plan with recommended rate revenue adjustments in response to changes in drinking water regulations (see below), and also Included recommendations regarding cost of service, rate design, and financial policies for the Domestic Water Fund. In early March 2017, the State Water Resources Control Board Division of Drinking Water (DDW) issued a Notice of Proposed Rulemaking for a new maximum contaminant level for the synthetic organic chemical 1,2,3-trichloropropane (TCP). The City was expected to begin treatment of TCP at 41 wells for a capital cost of approximately $55 million (the majority of which would be financed with two Water Revenue Bonds) and an estimated additional $5 million in annual operating costs. In order to evaluate the long-term financial sustainability of the Domestic Water Fund, Stantec evaluated the utilitys revenues and expenses in a five-year financial plan. In addition to accounting for operating costs, capital spending, and projected debt service, the financial plan also accounts for non - rate revenue, reserve targets, and financial performance metrics (specifically, the debt service coverage ratio). Notably, this project was completed in 3 weeks. This means that Stantec created a financial model that mirrored the entire Domestic Water Fund, met with city staff on several occasions, developed recommendations, and wrote a report in 15 business days. This project is a testament to the efficiency of our finance team, the effectiveness of our tools, and our willingness to be responsive to our clients' needs. My of Santa Ana Calitomia I Water and Sever Enterprise Cost of Service Study 25B-35 Stamm IS --� Dates of Service: 206 - 2017 S Project Team: Mark Hildebrand, Dave Hyder Client Contact: Mr. Chad Blais, Public Works Director, cblais@ci.norco.ca.us; a4? (951) 270-5678 2870 Clark Avenue Norco, CA 92860 City of Norco, CA Water and Sewer Rate Analysis The City of Norco provides water and sewer service to a population of approximately 25,000 in Riverside County. In addition to retail potable water services, the City also provides wholesale water services to the Santa Ana River Water Company and uses a regional approach as a cost effective way to treat wastewater. Stantec completed a rate study and subsequent updates that addresses the revenue volatility experienced by the City during the recent drought. The City's goal was to ensure stable revenue for Its fixed costs. Our team conduct a rate study, including rates designed to fund the utility's long-term projected cost of providing services.while also providing a reasonable and prudent balance of revenue stability, and complying with the substantive requirements of California Constitution Article XIII D, Section 6 (Prop 218). It was determined that Norco would implement a relatively high fixed charge and uniform rates in order to ensure stable revenue. Cry of Santa Ana CaUfomia I Water aM Sewer Enterprise Cost of Service Study 25B-36 Stanteo 16 Dates of Service: 2016 - Present Project Team: Mark Hildebrand, Matt Freiberg, Ben Stewart, Edn Gilhuly (CV Strategies) Client Contact: Mr. Steve Wickstrum, General Manager, swickstrum@casitaswater.com, (805) 649-2251, 1055 Ventura Avenue Oak View, CA 93022 Casitas Municipal Water District, California Water Rate Study We recently completed a comprehensive water rate study for the District, inclusive of a multi-year financial plan, cost of service allocation, and rate structure analysis. Using the financial module of our Interactive modeling system, we developed several alternative multi-year financial management plans and corresponding water rate revenue adjustment plans which we reviewed in interactive work sessions with District staff. Aside from the detailed financial planning, cost of service and rate design analysis, Stantec remained focused on the District concern that the previous rate failed to communicate the underlying reasoning for the rate recommendations. Our team was proactive in directly engaging the Board to develop the basis for the financial planning assumption and the rate design policies. Credibility was achieved through the clarity of our recommendations and the transparency of our process. Finally, we reviewed the District's existing rate structure and developed modifications to ensure that the District rate structure conformed to the requirements of Proposition 218. Stantec was able to meet this standard while also while achieving the District's policy objectives. As part of this study we teamed with a communications firm that held special outreach meetings with stakeholders and customers of concern. Ultimately the rate recommendations were adopted unanimously by the Board, with the consensus being that the presentation of the information and the project report was the best that the Board had seen for a rate study. City of Santa Ana, Calftnia I Water and Sewer Entegnise Cast of Service Study Stm@c 17 25B-37 CA Casitas Mmicipal Water District O O • • • 0 • • • O 0 • CA Cityof Alameda 0 • • 0 0 • • • • • • • CA Cilyof Bakersfield • 0 O • 0 • O • CA Cilyof Coachella 0 0 0 • 0 O O O • • • • • 0 • CA City of Corona 0 0 • • O 0 • • • O O • CA Fugerton • • • • O • • • 0 0 CA City of Greenfield o • • • o • 0 • 0 0 CA City of Huntington Beach 0 • • • 0 0 • • • o CA Cilyof Merced • • • • 0 O 0 • O 0 CA Cilyof Newport Beach 0 • • • O 0 • • • CA Cilyof Norco • 0 0 0 0 • 0 • • • • 0 CA City of Pomona • 0 • 0 0 0 0 • • • 0 0 • CA Cityof Richmond • • • 0 0 0 • • 0 0 CA CityofRidgecrest 0 • • 0 O o • • o • CA City of San Diego • • 0 0 0 O o • • CA City of Ville 0 0 • O 0 • 0 • 0 0 • • CA Coachella Valley Water District • 0 • • 0 0 O • • 0 0 • 0 CA Eastern Municipal Water District • • 0 0 0 0 0 • O CA Indian Wells Valley Water District 0 0 0 0 •• 0 e 0 a CA Indio Water Authority 0 0 0 0 0. 0 0••• 0 0 0• CA Moulton Mquel Water District 0 0 • • • • 0 • 0 • 0 • CA Ross Valley Sanilalion District • • 0 • • CA Soquel Creek Water District • 0 0 0 0 0 • • • 0 0 0 CA West Valley SanBation District 0 • 0 0 0 0 0 CA Western Municipal Water District O 0 0 • 0 O OR Cilyof MIwaukie • 0 0 0 AZ City of Peoria 0 0 0 0 0 0 0 AZ City of Tempe 0. 0 0•• 0 0 0 0 0 AZ Town of Gilbert 0 0 0 O 0 0 0 0 0 0 NM Albuquerque-BemalOo Co. Water Auth. 0 0 0 0 0 0 0 0 0 0 0 0 NM City of Las Cruces 0 0. 0 0 0 0 0 0 0 City of Santa Ana. California I Water and Sewer Enterprise Cost of Service Study staalec 18 25B-38 F. Schedule Based on the scope of services and tasks identified herein, we have prepared the following project schedule. We have the capacity and available resources to complete this study within this timeframe. We have dedicated the necessary personnel to make the City and this study a top priority. The schedule below presents a slightly more accelerated timeline than the City has stated in Addendum #1 to the RFP. Please note that the cost of service report will be completed before the City's September 2018 deadline. This will allow ample time for the Proposition 218 Hearing process before the rate implementation date of July 1, 2019. As part of our Contract Kickoff Meeting in early March, we will collaborate with City staff and management to develop a final project schedule. The Midterm Review (Task VII) will be conducted in either Year 2 or 3 of the rate structure plan. Any additional services identified as part of Task VIII will be conducted following the completed of the services identified above. Gly of Santa Ana, califomia I Water and Sewer Er ferprlse Cosl of Servce Study 25B-40 Suntee 19 w G. References This section includes references for 3 public entities for which our team has performed similar work within the past five (5) years. Ms. Joone Lopez General Manager, Moulton Niguel Water District ilooez(a)mnwd.com (949) 448-4071 27500 La Paz Rd. Laguna Niguel, CA 9267 Ms. Kay God bey Director of Finance, Coachella Valley Water District kgodbey(@cvwd.org (760) 398-2661 ext. 2240 75515 Hovley Lane East Palm Desert, CA 92260 Mr. Nelson Smith Finance Director, City of Bakersfield, CA nsmith(o)bakersfieldcitv.us (661) 326-3740 1600 Truxtun Ave. Bakersfield, CA 93301 City of Santa Ma, Cawonva I Waley and Sever Enterprise Cost W Sere Study 25B-42 swtec M a m tz �J <D N =3 sr. N Appendix: Resumes Resumes for all project team members identified in Section C are presented on the following pages. City d Santa Ana, Caldomla I Wale and Seater Enterprise Cost of Service Study 25B-44 Stanlac 21 Education MESM, University of California Santa Barbara BS, University of California Berkeley Qualifications S Memberships American Water Works Association (AW WA) Water Environment Federation (WEF) Cal -Nevada Section of the AW WA and WEF Change Management Certification Mark Hildebrand Project Manager Mark is a finance and rate consultant who bridges the disciplines of financial analysis, business strategy, and organizational optimization. He has performed scores of water, wastewater, and recycled water rate studies for both large and small utilities. Mr. Hildebrand is an expert In Proposition 218 and California's legal requirements regarding utility rate-setfing. He has been published by the AW WA Journal for articles addressing the challenges of conservation pricing in California. Other specialties include utility privatization, strategic business planning, alternative project delivery (APD), organizational assessments, and change management. Mr. Hildebrand is currently involved in projects for the City of Ridgecrest, the City of Bakersfield and several projects in area of Riverside County. Publications b Presentations AW WA's Annual Conference and Exhibit. Can Conservation Rates be Tied to the Cost to Serve?, 2017. AWWA CA— NEV Spring Symposium. Altemative Experiences: Lessons learned from alternative project delivery (APD) in California, 2012. Utility Management Conference. Cost -of -Service Based Conservation Rates — Evolving from Art to Science, 2017. AW WA Annual Conference and Exposition. Removing the shackles from Rate Design: Lessons learned from CTA v. City of San Juan Capistrano, 2015. Utility Management Conference. Do the Right Thing: Selecting the Right Project Delivery Method, 2018. Proceedings, Annual Conference of the California Stormwater Quality Association (CASQA). Stornwater Program Funding Options and Restrictions, 2010. Journal of the American Water Works Association, Vol. 101, No. 4 (Lead Author). Conservation Rates Made Legal: Water Budgets and California Law, 2009. cry of Saha Ana Califmia I Water end Sewer Enterprise Cost of Servte Study 25B-45 Project Experience Moulton Niguel Water District, California Project Manager in delivering a water, sewer and recycled water financial plan, cost -of -service analysis, and water budget based rate design project Work Included conforming large volumes of billing data for water budget -based rates, developing financial models, revenue sufficiency evaluation, debt and bond Issuance evaluation (financial strategy), long term financial forecasting, drought rale policies. Coachella Valley Water District, California Mark Is currently Project Manager for a water, sewer, recycled water, canal (rogation) water, and replenishment program rate study. The scope of work includes a 10 -year financial plan, cost -of - service analysis, and water budget rate design. Analysis specifically targets the District's debt strategy, a drought surcharge policy, and restructuring historical Irrigation water rates. All work are respecting the requirements of Prop 218. Client: Cashes Municipal Water District Project Manager In delivering a comprehensive waterfinancial plan, cost -of -service analysis and rale design project for this mixed agricultural community. One of the project challenges was the California drought that ended In 2017 for most of the state but persisted in this small community due to its microciimate and hydraulic isolation. The scope Included a number of Board meeting and working sessions, as well as signlficantpublicoutreach. City of Ridgecrest, California Project Manager for a historic sewer rates study which has positioned the City to be able to debt -finance a new wastewater treatment facility to replace an aging treatment plant The study included the development of Capacity Charges, which will support the funding of extra capacity being Included in the new treatment facility. Mr. Hildebrand is currently advising the city h matters regarding the terms of the lease contract held with the Navy for the property under the WWTP, and assisting with a business case evaluation of relocating the plant to a new location and the potential development of reclaimed water. City of Bakersfield, California Project Manager in delivering a highly expedited water rate study in response to the financial demands of meeting regulatory requirements associated with trichloropropane In drinking water. This rate study was completed in about 3 weeks, which Included financial modeling and a comprehensive financial planning report City of Santa Ana, Callrom%I water mid sewer Enterprise Cwt of Service Study City of Coachella, California Project Manager in delivering a comprehensivewater and sewer financial planning, cost -of -service analysis and rate design project for this desert community. One of the project challenges was the change In regulations for Chromium VI in drinking water, which threatened the affordability of the utility's water services. City of Alameda, California Mark was the Project Manager fora Sewer Service rate study which dynamically Incorporated the uncertain costs of a future Sanitary Sewer Improvement Plan. Based on capital spending projections, Red Oak calculated legally defensible and financially sustainable sewer fees. The long-range finance plan optimized the use of available revenues while meeting reserve targets. Council members unanimously approved the recommended rates. SoqueI Creek Water District, California Project Manager in delivering a comprehensive water cost -of - service analysis and rate design project to address significant reductions In water sales. Examined a variety of scenarios to provide a cost -basis for listed rates, consistent with the requirements of Prop 218, Eastern Municipal Water District, California Eastern Municipal Water District retained Red Oak to develop and help implement a water budget rate structure. City of San Diego, California Project Manager to develop a budget -based rate structure for the Citys irrigation customers. Western Municipal Water District, California Advised the district on the feasibility of water budget -based water rates for the District Topics Included case studies from other water districts, political feasibility, data management, legal considerations such as Prop. 218, and customer equity. City of Greenfield, California Lead consultant for this comprehensive water and wastewater uttlfty rates including a survey, financial models and rate recommendations based on best and defensible practices. City of Norco, California Proposition 218 expert for a comprehensive water, sewer and recycled water rate study for the City. Casitas Municipal Water District, California Project Manager for a comprehensive water utility rate study, 25B-46 stwec 73 Education Bachelors of Business Administration, Lake Superior State University, Sault Ste. Marie, Michigan, 2000 Memberships Rales and Charges Committee, American Water Works Association Financial Accounting & Management Controls Committee, American Water Works Association Management Committee, Water Environment Federation Government Finance Officers Association, Florida Section Utility Resource Management Committee, National Association of Clean Water Agencies Andrew Burnham Quality Advisor Mr. Burnham is the Vice President and Global Practice Leader of Financial Services at Stantec. Andy has extensive experience in personally conducting as well as overseeing cost of service allocations, long-term financial planning analyses, and development of alternative rate structures for a variety of utility systems, Including water, wastewater, reclaimed water, stormwater, solid waste, recycling, electric, and natural gas. He has been recognized as an industry expert as part of providing testimony in utility rate -related regulatory proceedings in multiple states and territories (including Florida, Michigan, Arizona, and the United States Virgin Islands), as well as before the Federal Energy Regulatory Commission. He has led over 500 studies for 150+ local governments, and has supported our clients in the issuance of $1 billion of bonds for projects in the past 5 years. Mr. Burnham is currently serving on multiple AWWA and WEF Committees, and was actively involved in the recent update to AWWA Manual M1 — Principles of Water Rates, Fees and Charges, notably in regards to outside -city retail rates, wholesale rates, and reuse rates. Project Experience City of Galveston, Texas (Project Manager) Mr. Burnham served as the Project Manager for the Cdy for a comprehensive water and sewer rate study. He developed alternative multi-year financial management plans and notably also assisted the City in making substantial rate structure changes designed to promote affordability for low volume users, conservation for higher volume users, and enhance conformance with accepted industry practices. City of Tempe, Arizona (Project Manager) Mr. Burnham served as the Project Manager on a recent Water and Sewer Rate Study for the City. The study Included the development of several alternative multi-year financial plans and corresponding plans of annual rate adjustments. We also completed a detailed cost of service allocation analysis and rate design study, which resulted In recommendations for adjustments to enhance specific linkages to cost of service, and consider reasonable Irrigation for larger lots sizes while continuing to provide affordability and conservation pricing for excessive use. Finally, we participated in multiple special-purpose stakeholder meetings to educate the community on the process and the new rate structure. City d Sada Ana, Cell mda t Wale and Sewn Edwpr'se Con of Sevice Study 25B-47 stance N Orange Water & Sewer Authority, North Carolina (Project Manager) Mr. Burnham has served as Project Manager for OWASA for water, wastewater, and reclaimed water financial consulting services for nearly ten years. He has conducted several studies including several long-term financial plans, detailed cost allocation to support rate design, evaluation of affordability for low-income users, and bond feasibility studies. City of Manistee • Cost of Service Rate Study, Michigan (Project Manager) Mr. Burnham served as project manager for a comprehensive water and sewer cost of service rate study for the City (which had no record of having ever conducted a formal rale study). A detailed cost of service allocation to determine the proper allocation of costs between 1) the water and sewersystems, and 2) the users of each system located within and outside of the City (which ultimately reflected the use of the utility basis of ratemaking for outside city users) was conducted. Multiple presentations were made to various customer groups (notably outside City users). Union County, North Carolina (Project Manager) Mr. Burnham has served as Project Manager for the County's water & sewer financial planning model and bond feasibility study. He developed the financial planning model to simulate the utility system's particular financial dynamics over a 10 -year planning horizon, including the specific financlal structure and flow of funds associated with the Bond Feasibility Study. Pinellas County, Florida (Project Manager) Mr. Burnham has served as the Project Manager for the County for nearly ten years, Including a comprehensive Water, Wastewater and Solid Waste Rate Study and several annual updates. During these studies, Mr. Burnham has used our FAMS•XL model to develop ten year financial plans for each of the separate water, sewer and solid waste enterprise funds. He has also conducted a benchmarking analysis of selected cost categories, asslsted County staff in evaluating the underlying cost of operations, and conducted detailed cost allocation and overhead studies for the Utilities Department Town of Gilbert, Arizona (Project Manager) Mr. Burnham served as the Project Manager for a comprehensive Water, Sewer, Redaimed Water, Environmental Services (Sanitation), and Stormwater hate Study (Study) for the Town. As pad of the study, for each utility system, we performed a revenue sufllclencyanalysis, detailed cost of service allocation, and rate structure analysis. We developed several modifications to the Town's existing rate structures, notably Including a new inclining block water rate structura. City of Santa Ana, CaOfo-nla I water and SewerEnlerprlseCasr of SmIce Study r Publications & Presentations Paying for Stormwater - Engaging the Community. American Public Works Association Annual Conference (PWX), Orlando, FL, 2017. Can Conservation Rates be Tied to the Cost to Serve?. American Water Works Association Annual Conference & Exposition, Philadelphia, PA, 2017. Reclaimed Water Expansion: An Approach that Makes Sense. American Water Works Association Annual Conference & Exposition, Philadelphia, PA, 2017. Cc -Author, Long -Term Financial Modeling and SustainabllityAnalysis. Florida Governmental Finance Officers Association School of Government, Sarasota, FL, 2013. Features of Successful Inclining Block Water Conservation Rate Structures. Texas Water Conservation Association Annual Meeting, Austin, TX, 2015. Tackling Utility Rates the Right Way. Michigan Municipal League Annual Convention, Marquette, MI, 2014. Reclaimed Water Cost of Service Studies, an Advanced Example. Water Reuse Symposium, Seattle, WA, 2015. High Level Rate Making. Florida Water Environment Association Chapter Luncheon, Sarasota, FL, 2014. Water & Sewer Rate Studies. Michigan Governmental Finance Officers Association, Lansing, MI, 2015. Cost -of Service Based Conservation Rates, Evolving from Art to Science. Utility Management Conference, Tampa, FL, 2017. Rate and Fee Panel Discussion, a National Financial Perspective. AWWA Michigan Sector, Northville, MI, 2017. Utility Ratemaking & Management. North Carolina Government Finance Officers Association Summer Conference, Wrightsville Beach, NC, 2010. slanlac 25 Education Master of Arts, Computer Assisted Cartography (GIS), University of California, Los Angeles, 1983 Bachelor of Arts, Conservation and Analysis of Ecosystems, University of California, Los Angeles, California, 1981 Certifications & Training Land Use and Environmental Planning, University of California, Davis, CA, 2000 Business Administration, UC Davis, Davis, CA, 2004 Registrations Certified Floodplain Manager #08-03663, 'Association of State Floodplain Managers Certified Environmental Specialist #1404143, The Academy of Board Certified Environmental Professionals Memberships Water Resources Chair, National Association of Environmental Professionals Member, Association of State Floodplain Managers Member, American Water Resources Association Water/Flood Committees, Water Resources Chair, Sacramento Metropolitan Chamber of Commerce Member, Environmental & Water Resources Institute Member, Association of California Water Agencies Member, Society of American Military Engineers (National) Member, Groundwater Resources Association of California John Moynier Regional Advisor John has over 30 years of experience In the water infrastructure, environmental, emergency management and water resources planning fields. John has split his career between the public and private sectors, and currently plays a key role in expanding our North American wide capabilities, providing leadership for water resource planning, environmental analysis, and floodplain management programs. John Is a recognized expert In analyses conducted under the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA), as well the integration of floodplain management, water infrastructure and water resource planning. John has a strong background in local water/ wastewater agency operations and management, as well as stakeholder outreach and public involvement activities, and is a Certified Floodplain Manager (CFM), as well as a Certified Environmental Planner (CEP). John is a nationally -recognized expert in emergency planning, including risk assessment and mitigation planning. Prior to entering the private sector, John had a lengthy career in operations and management with a local water/ wastewater utility. John currently serves on the Board of Directors for the Floodplain Management Association (FMA), representing California, Nevada, and Hawaii, and is serves as the Water Resources Chair for the National Association of Environmental Professionals (NAEP). He is also active with the Association of California Water Agencies, the Environmental Water Resources Institute, American Water Resources Association, and Mountain Counties Water Resources Association, and is an experienced public speaker. CAy of Santa Ana, Cafdomia I Water and Sewer Enteryfse Cost of Sevice Study 25B-49 sw&n 26 Project Experience Annexation EIR, Orange County Water District, (Technical Lead) John served as Technical Lead for an EIR prepared for the Orange County Water District's (OCWD) efforts to annex additional sections of Irvine Ranch Water District, the City of Anaheim and Yorba Linda Water District Into the District's boundaries. Integrated Regional Water Management Plan, San Timoteo Watershed Management Authority (STWMA)`, Banning, California (Project Manager) John served as Project Manager for the San Timoteo Watershed Management Authority (STWMA)'s Integrated Regional Water Management Plan (IRWMP). San Vicente Dam Raise EIRIEIS, San Diego County Water Authority", San Diego, (Project Director) John served as Project Director for an EIR/EIS prepared for the San Diego County Water Authority (SDCWA)'s San Vicente Dam Raise and Carry-over Storage Project When completed, this project will double the height of the existing dam and add 150,000 acre-feet of additional carryover storage capacity. Long Term Facilities Plan Programmatic EIR, Orange County Water District', (Project Manager) John served as Project Manager for a Program EIR prepared for the Orange County Water District's (OCWD) Long Term Facilities Plan (LTFP). The purpose of the LTFP was to propose innovative long-term alternatives to maximize the beneficial use of all sources of water available to the Groundwater Basin. On -Call Services Related to Water, Wastewater and Stormwater Services, City of Pasadena, Pasadena, California (Principal) John is serving as PIC for an on-call contract to provide water, wastewater and stormwaler engineering and planning services for the City of Pasadena Department of Public Works, Water & Power division. Integrated Regional Water Management Plan (IRWMP), Los Angeles County", Los Angeles, California (Project Director) John served as Project Director for development of the LA County Integrated Regional WaterManagement Pian. On -Call Services Related to Hydrogeological Services, Sonoma County Water Agency, Sonoma County, California (Principal -In -Charge) City of S%Me Ana. Ceraomia I Water end Sewer Enterprise Cost d Servlco Study John is serving as PIC for an on-call contract to provide hydrogeological services for the SCWA. Chorro Reservoir Dredging Feasibility Plan and Dam Emergency Action Plan, California Department of Corrections and Rehabilitation, San Luis Obispo County, California (Principal -in -Charge) John Is serving as PIC fa project to consider the feasibility of dredging sediment from the existing Chorro Reservoir to restore the original storage capacity. The project also Includes the preparation of a Dam Emergency Action Plan (EAP) per the requirements of the State Division of Safety of Dams (DSOD) Agricultural Irrigation Conservation Program, South San Juaquln Irrigation District, Manteca, California (Principal) John is PIC for a comprehensive program fo Implement an advance water conservation program for the District that Includes converting the existing irrigation delivery system to a pressurized, micro -spray and drip delivery system. On -Call Services Related to Water, Wastewater and Stormwater Services, City of Pasadena, Pasadena, California (Principal -in -Charge) John is serving as PIC for an on-call contract to provide water, wastewater and stormwater engineering and planning services for the City of Pasadena Department of Public Works. Toxicity Reduction Evaluation (TRE), California Department of Corrections and Rehabilitation, Tracy, California (Task Manager) John served as Task Manager for the preparation of a Toxicity Reduction Evaluation (TRE) for the Deuel Vocational Institution WWfP. Upper San Joaquin River Watershed Management Plan, Southern California Edison, Fresno County, California (Project Manager) John served as Project Manager for watershed planning program utilizing real time simulation (RTS) modeling to optimize operation of a large hydro -electric project San Joaquin Facilities Program, SFPUC, Central Valley, California (Environmental Compliance Manager) John served as the Environmental Compliance Manager for the SFPUC's San Joaquin Facilities Program, which included Installation of a fourth pipeline, as well as Improvements to existing facilities in the lower San Joaquin Valley. 25B-50 Stantec v Education MS— Mineral .& Energy Economics, Colorado School of Mines, 2015 MS — Environmental Engineering, University of Nebraska —Lincoln, 2011 BS — Civil Engineering, University of Nebraska — Lincoln, 2009 Qualifications & Memberships Graduate ResearchfTeaching Assistant, Colorado School of Mines, 2013-2015 Graduate Research Assistant, University of Nebraska -Lincoln, 2009- 2011 Member — American Water Works Association (AW WA), 2015 Project Performance Excellence Award, Tetra Tech, 2012 Benjamin Stewart Senior Project Consultant Benjamin works as a consultant in the Financial Services group of Stantec. Benjamin has over seven years of experience assisting clients in developing long term financial plans, assessing affordability impacts to rale payers, and evaluating capital investment alternatives in various business case evaluations and feasibility studies. Additionally, Benjamin has worked with clients developing system development fees, and conducting cost allocation plans and miscellaneous fees studies. Benjamin's diverse background in engineering and economics provides a well-rounded understanding of utility operations and capital planning combined with economic evaluations and financial planning. Specializations Cash flow modelling Infrastructure and construction cost estimating Data management and analysis Project evaluation and due diligence Stochastic simulation models Project management Project Experience City of Merced, California Consultant responsible for researching and summarizing viable methods of apportioning special benefits to individual parcels in the development of a special assessment district As the City plans for continued development, a Special Assessment District is to be formed to fund capital projects required to provide sewer service to the new parcels, Our guidance was provided tooulinethe procedure for forming the District Benefit apportionment methods compliant with CA Proposition 218 were identified and proposed to assist in the formation of the new District City of Sema Ma, California I Water aW Sewer Enterprise Cost of Ser ce Study 25B-51 stalft za Project Experience, Continued. City of Coachella, Califomia Consultant responsible for development of cost allocation plans for the City-wide budget and for the Water Authority and Sanitary District budgets. The City's cost allocation plans were conducted to be compliant with OMB Circulars A-87 and A-122. Outcomes of the City-wide and departmental cost allocation plans were incorporated into the Miscellaneous Fees Study in determination of a fully -burdened multiplierfor hourly costs. The City's miscellaneous fees schedule was then reviewed and modified per discussions with City staff In an effort to fully recovered costs associated with providing services to customers, Northeast Ohio Regional Sewer District, Ohio Consultant responsible for developing and updating financial planning models. Financial planning models were developed to evaluate multiple capital, operating, and financing scenarios within the District's CSO program to determine the impact on debt financing and necessary rale increases. Also responsible for review of Cost of Service model and rate development. Findings were summarized in technical reports and multiple presentations to Inform the District stag and board of the findings of the study. Recommended rate Increases were ultimately adopted by the District City of Akron, Ohio Consultant responsible for modeling and analyzing financial impacts of multiple capital plans and alternative financing scenarios for the City's CSO program and related capital costs. By working closely with engineering staff and City finance staff, scenados were modeled to vary project timing and loan financing terms to balance the needs for timely completion of the program, environmental Impact, and economic efficiency. Modeling efforts focused on identifying and measuring Impacts on the utility, and rate payers from changes to capital plans and loan terms. Southgate Water & Sanitation District, Colorado Consultant responsible for updating financial planning models with audited actual numbers, updated budgets, and revised projections. Bond Issues and rate projections were then revised based on updates to financial plans. Results of the update were summarized In a presentation to the district board of directors. Upper Blackstone Water Pollution Abatement District, Massachusetts Consultant responsible for updating financial planning models and summarizing findings in technical memorandum as part of a City of Santa Ana. California I W afar and Sev arErterprlseCost or Sake Study Financial Capability Assessment and Integrated Planning project to assess capital spending requirements and potential rate increases for the local water and sewer ut1des. City of Aurora, Colorado Consultant responsible for developing a business case evaluation model to evaluate economic feasibility of eight different alternative means to deriver non -potable reuse water to litigation customers. The model was developed in close collaboration with engineering staff to incorporate capital and operational costs Into the cash flow based on phases of development projected in the area. Benefits were simulated as direct benefits consisting of revenue from the sale of reuse water, and Indirect benefits monetizing reduced supply from freshwater sources, and reduced treatment costs by avoiding supply of potable water to irrigation customers. The model was developed to allow for efficient presentation and modification of Inputs and results to allow for discussions and Iterations of changes to the underlying assumptions. Results of the business case evaluation were ultimately presented to the client in a technical memo and summary presentation. City of Omaha, Nebraska Consultant responsible for developing, updating, and customizing financial planning models. Financial plans were developed to evaluate multiple capital, operating, and financing scenarios within the City's CSO program to assess the Impact on debt financing and necessary rate increases. The financial planning model was ultimately customized to the City's purposes and was licensed to the City following a comprehensive training workshop conducted with City Public Works and Finance Departnentstaff. Responsibilities also Included development of a financial capability assessment (FCA) prepared N accordance with USEPA FCA guidance. A WARI'm affordability analysis was developed in conjunction with the FCA to analyze affordability impacts to rate payers at the census tract level. 25B-52 stmtN 29 Education Master of Science in Finance, 2017, Florida State University, Tallahassee, FL Bachelor of Science in Finance, 2016, Florida State University, Tallahassee, FL Specializations Long -Term Financial Plan Development Rate Studies System Valuation & Feasibility Analysis Utility Implementation Reserve Fund Balance Projections Customer, Demand, and Revenue Forecasts Katie Morrissey Financial Analyst Ms. Morrissey is a financial analyst for Stantec with experience in populating and customizing the long-term financial planning modules of our FAMS-XL modeling system. She has superior financial, business and analytical skills and has provided our clients with exemplary financial analysis based on application of sound financial and economic concepts. Project Experience Collier County, FL Ms. Morrissey serves as the Project Analyst for the implementation of a Slonnwaler utility in Collier County. Using our financial model, she is developing several multi-year financial management plans corresponding to the level of stonnwaler management the County needs, which we are reviewing in interactive work sessions with County staff. Pasco County, FL — FGUA Lindrick System Ms. Morrissey serves as the Project Analyst for the valuation of FGUA Lindrick Utility system that Pasco County is Intending to acquire. This Includes the development of a model with three different methods of valuation analysis and several acquisition funding options that are being reviewed during interactive work sessions with County staff. City of Burlington, NC Ms. Morrissey has served as the Project Analyst for the City during which she conducted a revenue sufficiency analysts for the water and sewer system. Using our financial model, she developed several multi-year financial management plans through the construction of a scenario cost analysis related to the funding of the City's capital Improvement program and corresponding water and sewer rate adjustment plans. She also participated In interactive work sessions to review the analyses with City staff. Prince William County Service Authority, VA Ms. Morrissey has served as the Project Analyst for a fund balance study for the Authority, in which she developed a multi-year target reserve fund balance range model. This includes a detailed analysis of the Authorilys water and sewer fixed assets and associated cost characteristics, which have been reviewed with Authority staff. City of Salve Ana, California I Waler and Sewer Enteryrue Cost of Service Study 25B-53 Stankc 30 CVSTR CIES Education Bachelor of Arts Degree in Broadcast Journalism, University of Southern California — Los Angles Awards b Appointments Pacific Southwest Chapter Emmy, Best Newscast Winner— June 2004 Pacific Southwest Chapter Emmy Nominee— Best Newscast June 2005 Communicator Award Winner for Breaking News — January 2006 Bill Stout Memorial Award of Excellence Winner— March 2006 Best Spot News Coverage Winner— March 2006 Mark Twain Associated Press Award Nominee, Best Newscast— March 2006 Pacific Southwest Chapter Emmy Nominee — Best Newscast April 2006 Erin Gilhuly CV Strategies - Public Outreach Subconsultant An Emmy award winning journalist with nearly 25 years in the communications industry, Erin Gilhuly is the President and Founder of CV Strategies, a strategic communications and public engagement fine based In Southern California, serving corporate, government and non-profit clients across the U.S. Erin is responsible for managing all day -today operations and serving as the lead communications strategist for all clients. As an active member of the CA -NV Section of the American Water Works Association, Erin maintains a pulse on the water Industry and its communication challenges and opportunities. Erin has lead the communications and public affairs support team for myriad of water districts, municipalities and nonprofit organizations across the state for more than eight years. Erin is a master trainer and talented mediator. She has provided strategic guidance to numerous water purveyors through the Proposition 218 process leading workshops and providing key messaging strategies to gain positive public perception. Her insights into the minds of reporters and editors are often one step ahead of the story of the day, offering a highly valuable service that is difficult to match. Specializations • Responsible for developing lead messaging strategy and execution methodology for clients. • Specialist in all forms of communication campaigns including conventional publicity efforts, whisper strategies and crisis communications. • Skilled at multiple audience management using public relations, community relations and government relations as well as guerilla tactics. ' Skilled at presenting balanced combination of media to clients Including television, print, online and social media. Responsible for oversight and direction for all client messaging organization. City of Santa An% Califomia I Water and Sewer Enterprise Coal of Service Study 25B-54 Vlr?�A Design with community in mind 25B-55 EXHIBrr B FEESCHEDULE PROPOSAL 25B-56 H. FEE This section includes the fee -related elements requested by the RFP. I. Water, Recycled Water, and Sanitary Sewer System Evaluation 0 13 0 17 4 2 36 $ 6.801 It. Cost of Service Rate Model and Scenario Development 3 68 0 121 155 2 349 $ 57.398 111. Reports - 1: 28 0" 12 34 1 76 $13,538 I V. Public Meetings & Presentations 0 23 40 4 4 0 71 $ 13.491 V. Kickoff Meeting .. 0 2 . 0. 0 0. 0 2, $ 498 VI. Project Management 8 Coordination included in tasks above Total for Cost of Service Report Tasks: 4 134 40 154 197 5 534 $ 91,726 _ Estimaled Urect Expenses' $ 4,500 Fee for Cost of Service Report $96,226 VII. Midterm Review 0 -. 13 0 16 24 - 0 ' 53 Includes a 10%mark-up Fee for Additional Services (Item VIII) Additional services requested outside the scope of services outlined herein will be charged at the hourly rates presented below, plus expenses. This includes the value-added services outlined in the proposal. Hourly Rates The following table presents Stantec's current billing rates. All expenses will be charged at cost plus a 10% markup. � _j ,K• Director $317 Principal $249 Managing Consultant $195 Senior Consultant $170 Consultant $156 $135 Senior Analyst Analyst —-----_- --- — $121 _-- Administrative Public Outreach $95 $165 City of Santa Ma, Calilannia I Water and Sewer Enterprise Curl of Serve Study Stm 2 25B-57 City of Santa Ana CV ST R A T E G I E S PRECISION � PERCEPTIONS Rates Outreach Cost Menu - June 2018 INITIATIVE -COST OU REACFI"f?LANrK .'! �.. .3 b ra ° 10_,. .l 656 ® Awre—tg,tneati'ri'g5 witt3 manaagemeab, finance, and customer service Staff D Assessment of resources 0 Media landscape. evaluation ❑ Develop working ;outreach plan D Create public meeting,schedule and timeline A Finalize outreach budget W6 eaw.u,.- z yr ,.-_ MEDIA RE'ATION9 PORT,n�� '� e-, -g' D Develop public meeting presentation Work with media asneeded.before hearing ❑ Press release and media toolkit TARGETED'STAKEHOLDERfOUTREA KI, ri ;10 f$1'r650 g`"; ❑ Identify stakeholder concerns _ -�- 0 Build targeted outreach materials for large users and other Impacted groups Conductlargo [�sart tuAcp_geeseptatipn WEB SUFP_ORT 125 I, -❑ Create bill estimator web tool _ ❑ Create web page to host bill estimator, press release, presentations %nncn raccici:noRnc_ ,'sn; 't '`. enlocnv' ❑ Facilitate, film and log footage for video ❑ Write script incorporating message plan, footage and staff input _ ❑_Produce series of videos reflecting key messages arid encouraging raffia ear education, SOCIAL=MEDIA M%iNAG'E - — — _--------- ❑ Provide social media supportas needed ❑ Determine social media action plan ❑ Develop social media tools GOl LATERAL DEVELOPMENT .' ❑ Build Frequently Asked Questions list p Develop outreach collateral 25B-58 City of Santa Ana CV ST R A T E G I E S PRECISION . PERCEPTION` Rates Outreach Cost Menu - June 2018 -o Create timelinefor pdnting and mailing of notice ❑ Develop Prop 218 notice incoordination with staff 1 Develop Prop 218 messaging and talking points � t----D -- -Draft talkingpoints for staff and board -on Prop 218 notice -- - --.__.____----- COM UNITY MEETING FACILITATION'' 25$4-1`25 `` �0 Develop public presentation materials- . — — 0;Develop community meeting presentation, advertisements ❑ Hold 2-3 community meetings WM�,iWs UPFORT' El Create board cards. i 'Produce board update j ❑ Prepare public hearing material presentation i ❑ Hearing preparation for board and staff i „-0, Produce rate'hearing POST IMPLEMENTATION OUTRM-C. — 20 $3306 -- I ❑ Update.press -- relea--sean— --d.fa---ct----sheet---- -- — ----- ---- -- Draft messaging for customer service after hearing 0 Work with staff on shadow billing or new billguide j ❑ Determine appropriate on-bill/insert messaging ❑ Continue outreach an rate change i ❑ Message department conservation resources to customers- -___ 0_ Help prepare customer service representatives on new billingyquestions TOTAL = $33.825 25B-59 25B-60 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: APPROVE AN AGREEMENT WITH JONES & MAYER FOR SPECIAL LEGAL COUNSEL SERVICES RELATED TO MUNICIPAL LITIGATION (STRAGIC PLAN NO. 1, 3, 4, 5) II I RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Authorize the City Manager and the Clerk of the Council to execute an agreement with Jones & Mayer, Attorneys at Law, for legal services related to municipal law and litigation, for a three year term from July 1, 2018 until June 30, 2021, for a maximum amount to be spent of $250,000 subject to non -substantive changes approved by the City Manager and the City Attorney. The City of Santa Ana operates a City Attorney's Office with a contract City Attorney providing services to the City. This system reflects a best value as it allows for subject matter expertise. There are eight (8) attorneys on staff that are supported by outside counsel for litigation and complex matters. In order to provide effective and efficient legal counsel, staff recommend outside firms to minimize conflicts and provide valuable assistance. The law firm of Jones & Mayer has provided special legal counsel to the City in the past for varied services including receivership actions when needed. The law firm shall provide service at a rate of $250 per hour for attorneys and $125 per hour for paralegals. The law firm represents multiple municipal and public entities throughout the State of California and shall provide legal services in matters regarding municipal law. This agreement is a professional services agreement and is exempt from procurement as allowable under Santa Ana Municipal Code Section 2-807. The City Attorney oversees this Agreement and will assign work based on need and expertise. 25C-1 Agreement For Special Legal Counsel Services with Jones & Mayer July 3, 2018 Page 2 STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #1 Community Safety, Goal #3 Economic Development, Goal #4. Government Financial Stability, and Goal #5 Community Health, Livability, Engagement and Sustainability. FISCAL IMPACT The special legal counsel services will be paid out of the Liability Fund (account no. 08009051- 62302) FY 2018-19 $125,000 FY 2019-20 $75,000 FY 2020-21 $50,000 APPROVED AS TO FUNDS AND ACCOUNTS: Q ss;INe1-, 111 a RI Caalho Francisco Gutierrez rnb/ City Attorney Executive Director A Finance & Management Services Agency Steven Pha Executive Dir ctor Human Resources Exhibit — 1. Legal Services Agreement with Jones & Mayer 25C-2 SPECIAL LEGAL COUNSEL SERVICES AGREEMENT This AGREEMENT, made and entered into this 3rd day of July, 2018, by and between Jones and Mayer, Attorneys at Law ("Attorneys"), and the City of Santa Ana, a charter city and municipal corporation duly organized and existing under the constitution and laws of the State of California ("City"). RECITALS A. City desires to employ Attorneys to assist the in-house attorneys for the City ("City Attorney") in the provision of legal services to the City, and B. Attorneys represent that they are licensed to practice law in the State of California, have special experience and knowledge in the field of municipal law. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. RETENTION OF ATTORNEYS City hereby agrees to and does retain Attorneys, for the compensation hereinafter specified, to assist the City Attorney with general advice for transactional matters, legal review, and litigation and on a case-by-case basis when urgent matters arise. Attorneys accept said retention and agree to perform, in a timely and efficient manner, all such services as may be requested by the City Attorney. Attorneys shall confirm their acceptance of work requested by City in writing by e-mail or letter. 2. COMPENSATION FOR SERVICES RENDERED a. City agrees to compensate Attorneys, and Attorneys agree to accept from City, as and for payment in full for all services for the foregoing services, at the rate of $250 an hour for all attorneys and $125 an hour for paralegal work. Time will be billed in 1/10th of an hour increments. b. The total sum to be expended under this Agreement shall not exceed $250,000 during the term of this Agreement. C. City agrees to reimburse Attorneys for out-of-pocket expenses, including but not limited to, mileage, expert witness fees, copying costs, service of process, and mail services authorized by the City Attorney in connection with the performance of duties under this Agreement. Copying charges will be reimbursed at the rate of 10 cents per page. Any costs in excess of $5,000 require City Attorney approval prior to incurring the expense. All expenses must have supporting documentation submitted with the invoice. 3. METHOD OF PAYMENT Attorneys shall submit a monthly statement specifying the services performed, dates and number of hours, and an itemization of expenses related thereto with supporting documentation (i.e. receipts, invoices, copy of check, etc). 4. CONTROL OF LEGAL MATTERS Attorneys agree that each and every matter or proceeding in which they undertake to assist the City Attorney, as aforesaid, shall be and remain 25C-3 under, and subject to the control and direction of said City Attorney at all stages, and that they shall at all times keep the City Attorney informed of all matters pertaining thereto. City will keep Attorneys informed of all significant developments in matters relating to any representation undertaken by Attorneys. Attorneys further agree, if and when their retention hereunder is terminated by City, as hereinafter specified, they shall return to City Attorney any and all files then in their possession concerning each and every matter or proceeding in which they represented the City pursuant to this Agreement. 5. REPORTING REQUIREMENTS Attorneys agree to keep the City Attorney, Director of Personnel, and any other person(s) designated by the City Attorney, informed of significant events in the Actions, including but not limited to trial date, filing of motions for summary judgment, hearing date for motion for summary judgment, settlement conference date, and mediation date. Attorneys also agree to provide the following reports: a. 45 day initial evaluation of case and budget; and b. Pre-trial report 90 days before trial; 6. TERM The term of this Agreement shall commence on July 1, 2018 and terminate on June 30, 2021, unless terminated earlier pursuant to Section 15 below. The term of this Agreement may be extended upon a writing executed by both parties, including the City Manager and the City Attorney for the City. 7. INDEPENDENT CONTRACTORS It is mutually agreed by and between the parties that, in the performance of their covenants hereunder, Attorneys are and shall be independent contractors, and not officers or employees of City. 8. INSURANCE Attorneys shall provide to the City Attorney proof of Professional Liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim, and maintain such insurance throughout the term of this Agreement. If Attorneys fail or refuse to produce and maintain the insurance required by this section, or fail or refuse to famish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not affect Attorneys' right to be paid for its time and materials expended prior to notification of termination. 9. INDEMNIFICATION Attorneys agree to and shall indemnify and hold harmless the City, its officers, agents, employees, and representatives from liability for personal injury, damages, restitution, judicial or equitable relief to the extent caused by Attorneys' negligent or wrongful performance or conduct related to this Agreement. 10. CONFIDENTIALITY If Attorneys receive from the City information, which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Attorneys agree that it shall not use or disclose such information except in the performance of this Agreement, and further agree to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other 2 25C-4 means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Attorneys, disclosed in a publicly available source; (c) is in rightful possession of the Attorneys without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Attorneys without reference to information disclosed by the City. 11. CONFLICT OF INTEREST CLAUSE Attorneys covenant that it presently has no interests and shall not have interests, direct or indirect, that would conflict in any manner with performance of services specified under this Agreement. 12. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, California 92702-1988 Facsimile (714) 647-6956 Courtesy Copy: City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 Facsimile (714) 647-6515 To Attorneys: Kimberly Hall Barlow, Esq. Jones & Mayer, Attorneys at Law 3777 N. Harbor Blvd. Fullerton, CA 92835 Facsimile: (714) 446-1448 A party may change its address by giving notice in writing to the other party. Thereafter, any notice, tender, demand, delivery, or other communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 25C-5 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Attorneys, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Attorneys. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Attorneys or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any parties, which are not embodied herein. 14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Attorneys, Attorneys may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject of this Agreement performed by City personnel or by other Attorneys retained by City. 15. TERMINATION This Agreement may be terminated by City at any time. In such event, Attorneys shall be entitled to receive and the City shall pay Attorneys compensation for all services performed by Attorneys prior to receipt of such notice oftemrination. As a condition of such payment, Attorneys shall deliver to the City all files and records generated under this Agreement as of such date. Attorneys may terminate this agreement, subject to their obligation to provide written reasonable notice of at least thirty (30) days to arrange alternative representation. In such case, City agrees to secure new counsel as quickly as possible and to cooperate fully in the substitution of the new counsel as counsel of record in in the Actions. 16. DISCRIMINATION Attorneys shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Attorneys affirm that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 17. JURISDICTION— VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. MISCELLANEOUS PROVISIONS Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. 4 25C-6 19. COUNTERPARTS; SIGNATURES This Agreement may be executed in counterparts, secured via facsimile transmission or otherwise, each of which shall be deemed to be an original. Photocopies of any executed counterpart shall have the same force and effect as an original. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. ATTEST: Maria D. Huizar Clerk of the Council RECOMMENDED FOR APPROVAL: U ` R. 0&1 L'2 .L -- SONIA R. CARVALHO City Attorney Office APPROVED AS TO FORM: SONIA R. CARVALHO City Attom By: / u Sandra . Schwarzmann Senior Assistant City Attorney a)Iwas]2.YA11I06/\ Raul Godinez II City Manager JONES & MAYER By: Name: Kimberly Hall Barlow, Esq. Title: Partner 25C-7 25C-8 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JUNE 5, 2018 TITLE: GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 6, 2018; REQUESTING BOARD OF SUPERVISORS OF THE COUNTY OF ORANGE TO CONSOLIDATE CITY OF SANTA ANA GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION; AND SUBMISSION OF A PROPOSED CHARTER AMENDMENT REGARDING BY WARD ELECTIONS FOR VOTER CONSIDERATION (STRATEGIC PLAN NO. 5, 1) CltVMANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: -[• o ❑ As Recommended ❑ As Amended ❑ Ordinance on 16' Reading ❑ Ordinance on 2n° Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO JUN 19.20181 JU)1 u 31018 FILE NUMBER Adopt a resolution giving notice and requesting the Board of Supervisors of the County of Orange to consolidate the 2018 Statewide General Election on November 6, 2018 with the City of Santa Ana General Municipal Election for certain officers and proposed City Charter Amendment regarding By -Ward Based Elections. 2. Adopt a resolution establishing a charge for candidates' statements to be submitted to the electorate in the November 2018 General Municipal Election. 3. Adopt a resolution to approve title of Charter Amendment and proposed language for consideration by voters, 4. Adopt resolution authorize the filing of Arguments and Rebuttals. 5. Submittal of Impartial Analysis for voter consideration. 6. Direct Clerk of the Council to publish legal notices as required by law. DISCUSSION In order to conduct an election, State law and the City Charter require the City Council to adopt a resolution calling for a general municipal election. The subject resolution establishes November 6, 2018 as the date for the election of the Mayor and Members of Wards 2, 4 and 6 of the City Council. 55A-1 2018 General Municipal Election and Charter Amendment June 5, 2018 Page 2 Pursuant to Section 10403 of the California Elections Code, the City Council is required to formally request consolidation of the City's General Municipal Election with the Statewide Election. The subject resolution fulfills this requirement by requesting that the Board of Supervisors of Orange County consolidate the general elections for the purpose of electing a Mayor and Councilmembers for Wards 2, 4 and 6 and proposed City Charter Amendment on Ward Based Elections to be held on November 6, 2018 and authorizes the Board of Supervisors to canvass the election returns. Also, candidates for Mayor and the City Council may choose to have a candidate's statement mailed to each voter as part of the Voter Information Pamphlet. As an added option, the County of Orange Registrar of Voters Office offers a 200 and 400 word option and further have the option to print or simply post an electronic copy of the statement on their website. Candidate statements are produced at the candidates' option, not mandated, and the election code allows the Council to establish a charge to be levied against candidates in order to recover the cost of printing, handling and mailing these statements. The Orange County Registrar of Voters estimated cost for the Candidate Statement as follow: Print in voter's pamphlet and electronic copy of Candidate Statement in Registrar of Voter's Office website in English, Spanish, Vietnamese, Korean and Chinese: • 200 Words $1,546.00 • 400 Words $2,775.00 Electronic cop v of Candidate Statement in Registrar of Voter's Office website in English, Spanish, Vietnamese, Korean and Chinese: • 200 Words $494.55 • 400 Words $672.55 Additionally, the City Council directed staff to bring forth a Charter Amendment regarding ward - based elections. Said matter has been discussed recently by the City Council on February 20, 2018, and March 6, 2018. In summary, the City of Santa Ana currently utilizes an at -large election system, which allows electors from the entire City to elect each of the six (6) Councilmembers and the Mayor; the councilmembers must be nominated by electors in their respective ward. The proposed Charter Amendment proposes a Ward -Based Election System in which councilmember are both nominated and elected by electors in that Ward. The California Elections Code requires the adoption of the attached resolutions in order to place a ballot measure before the voters at a special municipal election and must be submitted to the Registrar of Voters at least 88 days in advance of the election (refer to Exhibit 1). In addition to calling for the election, a resolution may be approved to permit the filing of written arguments in favor of or against such measure by members of the City Council, any individual voter eligible to vote on the measure, a bona fide association of such citizens or any combination thereof, and establishes deadlines for submission of such arguments to the Clerk of the Council. The Elections Code specifies that members of the Council would be given preference and priority, if authorized by the City Council. The subject resolution would give that authorization to any member of the Council desiring to submit an argument. 55A-2 2018 General Municipal Election and Charter Amendment June 5, 2018 Page 3 The procedures for filing ballot arguments are detailed in the Elections Code. The Election Code procedures, as well as general guidelines for preparing arguments will be provided in a notice prepared by the Clerk of the Council and posted following final adoption of the resolution calling for the election. Also, whenever a City measure qualifies to be on a ballot, the City Council may direct the City Attorney to prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure (Elections Code §9280). The analysis is printed in the Voter Information Pamphlet preceding the arguments for and against the measure. City Attorney had previously prepared the Impartial Analysis and will be submitted for inclusion in the ballot. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT The cost to consolidate the General Municipal Election for candidate and Charter Amendment measure is estimated to be $275,000. Funds for these administrative costs are available in the Clerk of the Council, Contractual Services account no. 01107031 62300, FY 2018-2019. APPROVED AS TO FUNDS AND ACCOUNTS: 'p. Maria D. Huizar Francisco Gutierrez Clerk of the Council Executive Director Finance and Management Services Agency Exhibits: 1. Resolution Calling Election & Consolidating 2. Resolution with proposed Charter Amendment language 3. Resolution Establishing Estimated Candidate Statement Cost 4. Resolution authorizing the filing of Arguments and Rebuttals 55A-3 55A-4 EXHIBIT 1 RESOLUTION NO.2018-XXXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR AND GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 6, 2018 TO ELECT CERTAIN MUNICIPAL OFFICERS AND FOR SUBMISSION TO THE VOTERS OF THE QUESTION OF WHETHER CITY CHARTER SECTION 400 SHALL BE AMENDED REQUIRING CITY COUNCILMEMBER ELECTION FROM HIS OR HER RESIDENCY WARD AND ONLY BY REGISTERED VOTERS OF THAT WARD, INSTEAD OF CITY COUNCILMEMBER ELECTION BY THE REGISTERED VOTERS OF THE ENTIRE CITY AND REQUESTING THE BOARD OF SUPERVISORS OF ORANGE COUNTY CONSOLIDATE THE CITY'S GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general municipal election of the City of Santa Ana will be held on November 6, 2018, for the purposes of electing the Mayor and Councilmembers from Wards 2, 4, and 6. B. The City Council adopted Resolution No. 2018 -XXX submitting to the voters the question relating to a proposed amendment to the City Charter regarding changing from at -large election of City Councilmembers to a by -ward election of City Councilmembers. C. There will be a statewide general election held on November 6, 2018. D. It is desirable that the general municipal election of the City of Santa Ana on November 6, 2018 be consolidated with the statewide general election to be held on the same date and; that within the City of Santa Ana, the precincts, polling places and charter amendment be the same, and that the Board of Supervisors of the County of Orange canvass the returns of both elections, in all respects as if there were only one election. E. The Clerk of Council is authorized, instructed, and directed to give further notice of the election, in time, form and manner as required by law. Resolution 2018 -XXX Page 1 of 3 55A-5 Section 2: That pursuant to the requirement of Section 10403 of the Elections Code of the State of California, the Board of Supervisors of the County of Orange is hereby requested to consent to and order consolidation of the November 6, 2018 general municipal election of the City of Santa Ana for the purpose of electing the Mayor and Councilmembers from City Wards 2, 4, and 6 and the proposed Charter amendment with the statewide general election to be held on the same date. The election will be held and conducted in accordance with the provisions of law regulation the statewide election. Section 3: The Board of Supervisors of the County of Orange is hereby authorized to canvass the returns of said special municipal election pursuant to Section 10411 of the Elections Code of the State of California. Section 4: The City of Santa Ana recognizes the additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County of Orange for any such costs. Section 5: The Clerk of Council is hereby directed to file a certified copy of this Resolution with the Board of Supervisors of the County of Orange and a certified copy of this Resolution with the Registrar of Voters of the County of Orange. Section 6: This Resolution shall take effect immediately upon its adopting by the City Council, and the Clerk of Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of July, 2018. APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By:4-o-L A Laura A. Rossini Senior Assistant City Attorney y Miguel A. Pulido Mayor Resolution 2018 -XXX Page 2 of 3 AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers - Councilmembers Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2018- to be the original resolution adopted by the City Council of the City of Santa Ana on July_, 2018. Date: Resolution 2018 -XXX Page 3 of 3 55A-7 Clerk of the Council City of Santa Ana y • EXHIBIT 2 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA SETTING FORTH THE LANGUAGE OF A BALLOT TITLE FOR A CITY CHARTER AMENDMENT REGARDING WHETHER CITY CHARTER SECTION 400 SHALL BE AMENDED REQUIRING CITY COUNCILMEMBER ELECTION FROM HIS OR HER RESIDENCY WARD AND ONLY BY REGISTERED VOTERS OF THAT WARD, INSTEAD OF CITY COUNCILMEMBER ELECTION BY REGISTERED VOTERS OF THE ENTIRE CITY TO BE INCLUDED ON THE BALLOT FOR THE 2018 GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 6, 2018 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. Changing from at -large City Councilmember elections to ward -based City Councilmember elections requires a Charter amendment approved by the voters. Section 2. The City Council has considered the issue of changing from at -large City Councilmember elections to by -district City Councilmember elections and has determined that the voters of the City of Santa Ana should decide whether City Councilmembers should be elected using the by -ward voting method rather than the at - large voting method. Section 3. There is a general municipal election scheduled for November 6, 2018. Section 4. The California Elections Code directs that the City Council approve the form of the ballot question to be submitted to the voters and the City Council of the City of Santa Ana desires, on its own motion, to submit to the voters of the City a question relating to whether City of Santa Ana Charter section 400 shall be amended requiring City Councilmember election from his or her residency ward and only by registered voters of that ward, instead of City Councilmember elections by registered voters of the entire City, Section 5. Under the provisions of the Charter of the City of Santa Ana and the California Elections Code, at the General Municipal Election to be held on November 6, 2018, the following proposed amendments to the City Charter shall be submitted to the voters: Resolution No. 2018 -XXX Page 1 of 3 55A-9 Measure _ .... YES Shall City of Santa Ana Charter section 400 be amended requiring City Councilmember election from his or her residency ward and only by registered voters of that ward, instead of City Councilmember elections NO by registered voters of the entire City? Section 3. The text of the Charter amendment to Charter section 400 to be submitted to the voters is attached as Exhibit A and Incorporated by reference. Section 4. The vote requirement for the measure to pass is a majority (50% + 1) of the votes cast. Section 5. The City Clerk is hereby directed to transmit a copy of the measure set forth in Section 2 above to the City Attorney, who shall prepare an impartial analysis of the measure in accordance with Section 9280 of the Elections Code. The impartial analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the City Council. In addition, the Clerk of the Council is directed to fix a deadline for submission of arguments and rebuttals for or against the measure pursuant to Sections 9223 and 9285 of the Elections Code, the provisions of which are hereby adopted by the City Council. Section 6. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of July, 2018. APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: &wy>, Laura A. Rossini Senior Assistant City Attorney Miguel A. Pulido Mayor 55A-10 Resolution No. 2018 -XXX Page 2 of 3 AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers: Councilmembers: Councilmembers: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2018 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July_, 2018. Date: Maria D. Huizar, Clerk of the Council Resolution No. 2018 -XXX Page 3 of 3 55A-11 Exhibit A -City of Santa Ana Charter Section 400 (Deleted language is stricken and new language is in red) Sec. 400. - Number, selection and terms of members. The City Council shall consist of seven (7) members elected at the times and in the manner provided in this charter, each of whom, except for the mayor, shall serve a term of four (4) years. The term of each member shall begin at 6:00 p.m. on the second Tuesday of December following certification of election results, and each shall serve except as otherwise provided for in this charter, until his or her successor is elected and qualified. Each office of councilmember shall be a separate office and one (1) of such offices shall be assigned to each of the wards of the City. Councilmembers shall be residents of their respective wards, and nominated and elected only by the voters of their respective wards. The Mayor shall be elected from the City at large. Candidates fGF each AffirP of Gounpilmember other thaR the mayoF shall be nominated from. SuGh eleGt6FS of the City, bUt all GGu 'I ti shall h 1 neo ©€ he City at targe. 55399.00002\30632997.1 55A-12 EXHIBIT 3 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA ESTABLISHING A SYSTEM FOR CANDIDATES WHOSE STATEMENTS ARE SUBMITTED TO THE ELECTORATE IN THE 2018 GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 6, 2018 TO PAY THE PRO RATA SHARE OF THE COST OF INCLUSION OF THEIR STATEMENT IN VOTER PAMPHLETS AND/OR ELECTRONIC COPY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Section 13307(d) of the Elections Code of the State of California authorizes the governing body of any local agency to require each candidate filing a statement to pay in advance to the local agency his or her estimated pro rata share as a condition of having his or her statement included in the voter's pamphlet or electronically distributed. B. Prior to the period in which candidate statements may be filed, the Orange County Registrar of Voters Office estimates the total cost of translating, posting electronic copy on the Registrar of Voters website, printing, handling, and/or mailing the candidates' statements and determines the approximate cost of the pro rata share of each candidate filing a statement based upon such estimate, as follow: Print in voters pamphlet and electronic copy of Candidate Statement in Registrar of Voters Office website in English, Spanish, Vietnamese, Korean and Chinese: • 200 Words $1,546.00 • 400 Words $2,775.00 Electronic copy of Candidate Statement in Registrar of Voter's Office website in English, Spanish, Vietnamese, Korean and Chinese: • 200 Words $494.55 • 400 Words $672.55 The payment in advance by each such candidate of his or her prorated share shall be a condition of having his or her statement included in the voter's pamphlet, and/or electronic posting. Resolution No. 2018 -XXX Page 1 of 3 55A-13 Section 2. The City Council hereby approves the process whereby: A. Prior to the period in which candidates' statements may be filed, the Clerk of the Council shall prepare a written notice distributed to all candidates at the time of issuance of the nomination papers, informing them that payment of the pro rata share amount must be made at the same time as the candidate's nomination papers as prescribed by the California Elections Code. B. The Clerk of the Council's receipt for the payment shall include a written notice that the estimate is just an approximation of the actual cost that varies from one election to another election and may be significantly more or less than the estimate, depending on the actual number of candidates filing statements. Accordingly, the Clerk of the Council shall not be bound by the estimate and may, on a pro rata basis, bill the candidate for additional actual expense or refund any excess paid depending on the final actual cost. In the event of underpayment, the Clerk of the Council may require the candidate to pay the balance of the cost incurred. In the event of overpayment, the Clerk of the Council shall prorate the excess amount among the candidates and refund the excess amount paid within 30 days of the election. Section 3. The Clerk of the Council shall provide each candidate or the candidate's representative a copy of this Resolution at the time when nominating petitions are issued by the Clerk. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this _ day of July, 2018. APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Rawl -o— X NIV 'LVLL. Laura Rossini, Senior Assistant City Attorney Resolution No. 2018 -XXX Page 2 of 3 55A-14 Miguel A. Pulido Mayor AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2018 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July_, 2098. Date: 55A-15 Maria D. Huizar, Clerk of the Council Resolution No. 2618 -XXX Page 3 of 3 55A-16 EXHIBIT 4 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR PROPOSED AMENDMENT TO THE SANTA ANA CHARTER REGARDING WHETHER CITY CHARTER SECTION 400 SHALL BE AMENDED REQUIRING CITY COUNCILMEMBER ELECTION FROM HIS OR HER RESIDENCY WARD AND ONLY BY REGISTERED VOTERS OF THAT WARD, INSTEAD OF CITY COUNCILMEMBER ELECTION BY REGISTERED VOTERS OF THE ENTIRE CITY BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general municipal election of the City of Santa Ana will be held on November 6, 2018, at which there will be submitted to the qualified electors of the City a Charter Amendment measure related to whether the City of Santa Ana Charter section 400 shall be amended requiring City Councilmember election from his or her residency ward and only by registered voters of that ward instead of City Councilmember election by registered voters of the entire City. B. That pursuant to the requirements at Section 9282 of the Elections Code of the State of California, the legislative body may authorize any member(s) of the City Council to write arguments for or against any measure. Section 2: The City Council, as the legislative body of the City of Santa Ana, hereby authorizes the Clerk of the Council to give preference and priority to any member or members of the City Council (up to five members), then to voters as set forth in California Elections Code section 9287, to file a written argument for or against the City measures set forth above, and to change said argument until and including the date fixed by the Clerk of the Council after which no arguments for or against said City measure may be submitted. Resolution 2018 -XXX 55A-17 Page 1 of 2 Section 3: This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this _ day of July, 2018. Miguel A. Pulido Mayor APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney By: c aav,,g,, A. RI S Laura A. Rossini Senior Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2018 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July_, 2018. Date: Maria D. Huizar, Clerk of the Council 55A-18 Resolution age 2 of 2 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: DIRECT STAFF TO PLACE PROPOSED CHARTER AMENDMENT REGARDING MODERNIZATION OF BOARDS AND COMMISSIONS, CAMPAIGN AND GIFT LIMITS AND QUALIFICATIONS OF THE FINANCE DIRECTOR ON THE NOVEMBER 6, 2018 ELECTION BALLOT; APPROVE RESOLUTIONS CALLING FOR SPECIAL ELECTION; AUTHORIZE AND DESIGNATE CITY COUNCILMEMBERS TO FILE ARGUMENT AND REBUTTAL STATEMENTS; AND OTHER ELECTION RELATED ACTIONS(STRATEGIC PLAN NO. 5, 1) V CI ANAGER RECOMMENDED ACTIONS: CLERK OF COUNCIL USE ONLY: 1777iiPT�it ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Review proposed Charter Amendment regarding the modernization of Boards and Commissions, Campaign and Gift Limit, and qualifications of the Finance Director provisions in the Charter by moving to the Santa Ana Municipal Code for uniformity and consistency in applicability. Options for consideration: 1. Table matter. 2. Direct staff to include these and other provisions of the Charter on the 2018 General Municipal Election on November 6, 2018. 3. Direct staff to move forward with placing modernization of Charter provisions as provided for in staff report, and approve actions accordingly. a. Adopt resolutions. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR AND GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 6, 2018 TO ELECT CERTAIN MUNICIPAL OFFICERS AND FOR SUBMISSION TO THE VOTERS OF THE QUESTION OF WHETHER THE CITY CHARTER SHOULD BE AMENDED TO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS; CREATE 5gQ[rISESTENCY IN THE MUNICIPAL CODE Proposed Charter Amendments July 3, 2018 Page 2 of 6 REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFICATIONS FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE AND REQUESTING THE BOARD OF SUPERVISORS OF ORANGE COUNTY CONSOLIDATE THE CITY'S GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION ii. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA SETTING FORTH THE LANGUAGE OF A BALLOT TITLE REGARDING WHETHER THE CITY CHARTER SHOULD BE AMENDED TO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS; CREATE CONSISTENCY IN THE MUNICIPAL CODE REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFICATIONS FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE TO BE INCLUDED ON THE BALLOT FOR THE 2018 GENERAL ELECTION TO BE HELD ON NOVEMBER 6, 2018 iii. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR PROPOSED AMENDMENTS TO THE SANTA ANA CHARTER REGARDING WHETHER THE CITY CHARTER SHOULD BEAMENDEDTO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS; CREATE CONSISTENCY IN THE MUNICIPAL CODE REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFICATION FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE. b. Authorize the filing of Arguments and Rebuttals. Designate up to five (5) Councilmembers to author an Argument and Rebuttal statement. c. Direct City Attorney to prepare Impartial Analysis. d. Direct Clerk of the Council to publish legal notices as required by law. DISCUSSION On June 19, 2018, the City Council directed staff to prepare documents needed to place the modernization of the boards and commissions in addition to the campaign and gift limit provisions among any others that staff believes are inconsistent for voter consideration. Staff has prepared accordingly. The following chart provides sections for consideration: 55B-2 Proposed Charter Amendments July 3, 2018 Page 3 of 6 CHARTER SECTION(S) DISCUSSION Article IX: Charter lists three boards/commissions and the balance are in the Municipal Code. Removal from Charter and placement in Muni Remove Boards and Code creates consistency and flexibility for Council and members of Commissions from Charter the public. Charter Amendment would allow for efficiency in reorganizing or restructuring Boards and Commissions. Section 425 and Section Campaign provisions are inconsistent with State code that can be 1107: revised by a majority vote of the Council. Campaign and Gift Provisions Section 704: Finance Director works for City Manager and qualifications should Qualifications of Finance be in job description. Charter does not address other directors. Director Charter provisions that would be amended: 1. Article IX in the Charter - Boards and Commissions Sec. 900. — Established (a) The City Council shall establish appointive boards and commissions by ordinance and shall specify in such ordinances the powers and duties of each. 2. Campaign and Gift Provisions Sec. 425. - Disqualification due to campaign contributions. A councilmember shall not participate in, nor use his or her official position to influence, a decision of the City Council if it is reasonably foreseeable that the decision will have a material financial effect, apart from its effect on the public generally or a significant portion thereof, on a recent major campaign contributor. As used herein, "recent major campaign contributor" means a person who has made campaign contributions totaling two hundred fifty dollars ($250.00) or more to the councilmember or to any campaign committee controlled by the councilmember in the twelve-month period immediately preceding the date of the decision. The mayor is a councilmember for purposes of this section. Sec. 1107. - Gifts to officers and employees prohibited. It shall be unlawful for any person or organization that is financially interested in any decision pending action by any agency, officer or employee of the City, or in any contract to which the City is a party to make any gifts aggregating in value more than twenty-five dollars ($25.00) in any one calendar month to any officer, or employee of the City. No person or organization shall be deemed 55B-3 Proposed Charter Amendments July 3, 2018 Page 4 of 6 to have a financial interest in a decision or contract by reason of any interest which is shared by a significant portion of the general public. No gift is unlawful which is similarly made or offered to a significant portion of the general public. Any person who makes, acts as the agent or intermediary in the making of, or arranges for the making of, any gift which is unlawful hereunder is guilty of a misdemeanor. Any officer or employee who receives any gift which he knows, or reasonably should know, is unlawful hereunder is guilty of a misdemeanor. 3. Qualifications of Finance Director Sec. 704. - Director of finance; qualifications, powers and duties. To become eligible for the position of director of finance, the person appointed by the City Manager shall be qualified to administer and direct an integrated department of finance. The director of finance shall have power and be required to: (a) Have charge of the administration of the financial affairs of the City under the direction of the City Manager; (b) Supervise and be responsible for the disbursement of all moneys and have control over all expenditures to insure that budget appropriations are not exceeded; (c) Supervise a system of financial internal control including the auditing of all purchase orders before issuance, the auditing and approving before payment of all invoices, bills, payrolls, claims, demands, or other charges against the City, and, with the advice of the City Attorney, when necessary, determine the regularity, legality, and correctness of such charges; (d) Settle claims, demands, or other charges, including the issuing of warrants therefor; (e) Maintain general and cost accounting systems for the City government and each of its offices, departments, and other agencies; keep separate accounts for the items of appropriation contained in the City budget, each of which accounts shall show the amount of appropriations, the amounts paid therefrom, the unpaid obligations against it, and the unencumbered balance; and require reports of the receipts and disbursements from each receiving and expending agency of the City government; to be made daily or at such intervals as he may deem expedient; (f) Submit to the City Council through the City Manager a monthly statement of all receipts and disbursements and other financial data in sufficient detail to show the exact financial condition of the City, and, as of the end of each fiscal year, submit a complete financial statement and report; (g) Administer the license and business tax program of the City; (h) Direct treasury administration for the City, including the receiving and collecting of revenues and receipts from whatever source; have custody of all public funds belonging to or under the control of the City or any office, department, or other agency of the City government; and deposit all funds coming into his hands in such depository as may be designated by resolution of the City Council, or, if no such resolution be adopted, by the City Manager, in compliance with all of the provisions of the state constitution and laws of the state governing the handling, depositing, and securing of public funds; (i) Direct centralized purchasing and a property control system for the City government under rules and regulations to be prescribed by ordinance. In addition, the City Council may consider adding any other provisions in the Charter for voter consideration, including: 1. Mayor's Signature Authority 2. Stabilization Fund 55B-4 Proposed Charter Amendments July 3, 2018 Page 5 of 6 3. Investigations 4. Civil Services Position of Police Chief 5. General Plan to be Updated 2 years after each U.S. Census 6. Code of Ethics to Apply to all Officers and Department Heads Requirements for Calling a Special Election on June 5, 2018 The California Elections Code requires the adoption of the attached resolutions in order to place a ballot measure before the voters at a special municipal election and must be submitted to the Registrar of Voters at least 88 days in advance of the election (refer to Exhibit 1). In addition to calling for the election, a resolution may be approved to permit the filing of written arguments in favor of or against such measure by members of the City Council, any individual voter eligible to vote on the measure, a bona fide association of such citizens or any combination thereof, and establishes deadlines for submission of such arguments to the Clerk of the Council. The Elections Code specifies that members of the Council would be given preference and priority, if authorized by the City Council. The subject resolution would give that authorization to any member of the Council desiring to submit an argument (refer to Exhibit 3). The procedures for filing ballot arguments are detailed in the Elections Code. The Election Code procedures, as well as general guidelines for preparing arguments will be provided in a notice prepared by the Clerk of the Council and posted following final adoption of the resolution calling for the special election. Also, whenever a City measure qualifies to be on a ballot, the City Council may direct the City Attorney to prepare an impartial analysis of the measure showing the effect of the measure on the existing law and the operation of the measure (Elections Code §9280). The analysis is printed in the Voter Information Pamphlet preceding the arguments for and against the measure. City Attorney may be directed to prepare the Impartial Analysis for inclusion in the ballot. STRATEGIC PLAN Approval of this item allows us to meet Goal #5. Community Health, Livability, Engagement & Sustainability, Priority #1, Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities. FISCAL IMPACT The County Registrar of Voters office has estimated that the additional cost of adding a ballot measure to the City's consolidated general municipal election would be approximately $17,000. Funds for these administrative costs are available in the Clerk of the Council, Contractual Services account no. 01107031 62300, FY 2018-2019. 55B-5 Proposed Charter Amendments July 3, 2018 Page 6 of 6 APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance & Management Services Agency Attachments: 1. Resolution Calling for the Election 2. Resolution on Setting Language of Charter Amendment 3. Resolution Authorizing filing of Arguments and Rebuttals 55B-6 17:610)110kNCO] 01104 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR AND GIVING NOTICE OF A GENERAL MUNICIPAL ELECTION TO BE HELD IN THE CITY OF SANTA ANA ON NOVEMBER 6, 2018 TO ELECT CERTAIN MUNICIPAL OFFICERS AND FOR SUBMISSION TO THE VOTERS OF THE QUESTION OF WHETHER THE CITY CHARTER SHOULD BE AMENDED TO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS; CREATE CONSISTENCY IN THE MUNICIPAL CODE REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFIFCATIONS FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE AND REQUESTING THE BOARD OF SUPERVISORS OF ORANGE COUNTY CONSOLIDATE THE CITY'S GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: , Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general municipal election of the City of Santa Ana will be held on November 6, 2018, for the purposes of electing the Mayor and Councilmembers from Wards 2, 4, and 6. B. The City Council adopted Resolution No. 2018 -XXX submitting to the voters the question relating to a proposed amendment to the City Charter regarding whether the City Charter should be amended to modernize and remove outdated language to reflect changes or conflicts in the City or State law concerning gifts and campaign contributions and designated City funds; Create consistency in the Municipal Code regarding Boards and Commissions; and Move the qualification for the Finance Director to the Municipal Code. C. There will be a statewide general election held on November 6, 2018. D. It is desirable that the general municipal election of the City of Santa Ana on November 6, 2018 be consolidated with the statewide general election to be held on the same date and; that within the City of Santa Ana, the precincts, polling places and charter amendment be the same, and that the Board of Exhibit 1 Resolution 2018 -XXX Page 1 of 3 55B-7 Supervisors of the County of Orange canvass the returns of both elections, in all respects as if there were only one election. E. The Clerk of Council is authorized, instructed, and directed to give further notice of the election, in time, form and manner as required by law. Section 2: That pursuant to the requirement of Section 10403 of the Elections Code of the State of California, the Board of Supervisors of the County of Orange is hereby requested to consent to and order consolidation of the November 6, 2018 general municipal election of the City of Santa Ana for the purpose of electing the Mayor and Councilmembers from City Wards 2, 4, and 6 and the proposed Charter amendments with the statewide general election to be held on the same date. The election will be held and conducted in accordance with the provisions of law regulation the statewide election. Section 3: The Board of Supervisors of the County of Orange is hereby authorized to canvass the returns of said special municipal election pursuant to Section 10411 of the Elections Code of the State of California. Section 4: The City of Santa Ana recognizes the additional costs will be incurred by the County by reason of this consolidation and agrees to reimburse the County of Orange for any such costs. Section 5: The Clerk of Council is hereby directed to file a certified copy of this Resolution with the Board of Supervisors of the County of Orange and a certified copy of this Resolution with the Registrar of Voters of the County of Orange. Section 6: This Resolution shall take effect immediately upon its adopting by the City Council, and the Clerk of Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of July, 2018. Miguel A. Pulido Mayor Resolution 2018 -XXX Page 2 of 3 55B-8 APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Laura A. Rossini Senior Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2018- to be the original resolution adopted by the City Council of the City of Santa Ana on July _, 2018. Date: Resolution 2018 -XXX Page 3 of 3 55B-9 Clerk of the Council City of Santa Ana 55B-10 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA SETTING FORTH THE LANGUAGE OF A BALLOT TITLE REGARDING WHETHER THE CITY CHARTER SHOULD BE AMENDED TO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS; CREATE CONSISTENCY IN THE MUNICIPAL CODE REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFIFCATIONS FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE TO BE INCLUDED ON THE BALLOT FOR THE 2018 GENERAL ELECTION TO BE HELD ON NOVEMBER 6, 2018 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. By Resolution No. 2018 -XXX, the City Council of the City of Santa Ana has called for a its general election to be held on November 6, 2018 and submitted to the voters an amendment to sections of the Santa Ana City Charter. Section 2. The California Elections Code directs that the City Council approve the form of the ballot question to be submitted to the voters and the City Council of the City of Santa Ana desires, on its own motion, to submit to the voters of the City a question relating to whether the City Charter should be amended to modernize and remove outdated language to reflect changes or conflicts in the City or State law concerning gifts and campaign contributions and designated city funds; create consistency in the municipal code regarding boards and commissions; and move the qualifications for the finance director to the municipal code to be submitted to the voters at the General Election to be held on Tuesday, November 6, 2018. Section 3. The ballot question for the amendment called for in Resolution No. 2018 -XXX shall be proposed as follows, with identification as determined in accordance with the California Elections Code: Exhibit 2 Resolution No. 2018 -XXX Page 1 of 3 55B-11 Measure _ .... YES Shall the Charter be amended to: modernize and remove outdated language to reflect changes or conflicts in the City or State law concerning gifts and campaign contributions and designated City funds; create consistency in the Municipal Code regarding boards or NO commissions; and move the qualifications for the Finance Director to the Municipal Code? Section 4. The text of the amendments to article IX, section 425, section 610, section 704, and section 1107 of the Santa Ana City Charter to be submitted to the voters are attached as Exhibit A and incorporated by reference. Section 5. The vote requirement for the measure to pass is a majority (50% + 1) of the votes cast. Section 6. The City Clerk is hereby directed to transmit a copy of the measure set forth in Section 3 above to the City Attorney, who shall prepare an impartial analysis of the measure in accordance with Section 9280 of the Elections Code. The impartial analysis shall include a statement indicating whether the measure was placed on the ballot by a petition signed by the requisite number of voters or by the City Council. In addition, the Clerk of the Council is directed to fix a deadline for submission of arguments and rebuttals for or against the measure pursuant to Sections 9223 and 9285 of the Elections Code, the provisions of which are hereby adopted by the City Council. Section 7. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this day of July, 2018. r': aaWelvL"19tri73i] M Sonia R. Carvalho City Attorney Laura A. Rossini Senior Assistant City Attorney Miguel A. Pulido Mayor Resolution No. 2018 -XXX 55B-1 2 Page 2 of 2 AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers: Councilmembers: Councilmembers: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2018 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July _, 2018. Date: Maria D. Huizar, Clerk of the Council Resolution No. 2018 -XXX Page 3 of 3 55B-13 Exhibit A- Charter Amendments (deletions underlined and additions in red) ARTICLE IX. - APPOINTIVE BOARDS AND COMMISSIONS Sec. 900. - Established; enumerated. The ;ity Council shall establish following enumerated appointive boards and commissions by ordinance and shall specify in such ordinance are here established and shall have the powers and duties of each. contained in this article: (a) Board of recreation and parks (b) Planning commission (c) Personnel board The City Council may create by ordinance such other appointive boards or commissions as in its judgment are required and may grant to them powers and duties as are consistent with the provisions of this charter. The City Council by motion adopted by the affirmative votes of at least a maiority of its members may appoint from time to time temporary committees as deemed advisable to render counsel and advice to the appointing authorities on any designated matters or subjects within the jurisdiction of such authorities. Sec. 901. — , Appointments, removals vacancies terms (a) Except as otherwise specified in this charter, the member of each of the appointive boards and commissions shall be appointed and may be removed by the Cjty Council, subject in both appointment and removal by the affirmative votes of a maiority of the members For boards or commissions having at least seven (7) members, the City Council shall select seven (7) members from nominations made by the council member (or the mayor in the case of the city-wide seat) whose term coincides with that board or commission seat as determined by the City Council in accordance with subsection (e) below, together with nominations from any other member of the Council. All other appointments shall be as determined by this Charter, or by the City Council from time to time Beginning with terms starting after the 2006 General Election, at least fifty -percent (50%) of those persons nominated from time to time by a council member shall be residents of the ward represented by such council member. At the request of a council member, this rule may be waived by a 2/3 vote of the City Council for any one appointment if the requesting member is unable to find a qualified and acceptable ward resident to nominate For purposes of this rule, residency is only required at the time of nomination (b) Vacancies from whatever cause arising shall be filled in the same manner. Upon a vacancy occurring leaving an unexpired portion of a term any appointment to fill such vacancy shall be for the unexpired portion of such term All terms shall begin on the same date as City Councilmember terms as provided in section 400 of this Charter. 55B-14 (e) The City Council shall determine which members of such boards and commissions City Council shall desianate seven (7) board and commission seats by ward and one required. Sec. 901.1. — Reserved. Prohibition aaainst serving as treasurer for campaign committee. 55B-15 mayor or councilmember shall be eligible for appointment to any appointive board or commission. Sec. 902. — I r Appropriations therefor. The City Council shall include in its annual budget such appropriations of funds as in its opinion shall be sufficient for the efficient and proper functioning of such appointive boards and commissions. Sec. 903.- 1 : ,i -.,d Existing boards and commissions. Members of existing appointive boards and commissions at the time this charter takes effect shall continue in office and shall perform their duties until other provisions shall have been made as provided in this charter for the performance of such duties and for the discontinuance of such boards or commissions. Sec. 904. —Reserved Meetings; chairman. The election of each chairman and vice-chairman shall be held at the meetings of the respective boards and commissions during the month of July of each year. The board or commission, in the event of a vacancy in the office of the chairman or vice-chairman shall elect one of its members for the unexpired term. The chairman shall have the responsibility for informing the City Council of board commission or committee actions or inactions and the reasons therefor. Each board or commission other than the personnel board shall hold a regular meeting at least once a month with reasonable provision for attendance by the public The City Manager shall designate a secretary for the recording of minutes for each of such boards and commissions, who shall keep a record of its proceedings and transactions. Each board and commission shall prescribe rules and regulations governing its operations which shall be consistent with this charter and shall be filed with the Clerk of the Council for public inspection. The personnel board shall meet monthly, provided there is business on the agenda to come before it. In the event no business is placed on the board's agenda before the Friday preceding the tentative Wednesday meeting date no meeting need be held; provided however, that in no event shall more than three (3) months intervene between meetings of such board. Sec. 905. — ! I. Compensation. The members of appointive boards and commissions shall receive such compensation, if any, as may be prescribed by ordinance and may receive reimbursement for necessary traveling and other expenses when on official duty of the City when such expenditure has been so authorized by the board or commission and subject to rules and regulations prescribed by ordinance on order of the City Council Sec. 906. —' _ Attendance of witnesses; oaths and affirmations. Each appointive board or commission shall have the same power as the City Council to compel the attendance of witnesses to examine them under oath and to compel the production of evidence before it. Each member of any such board or commission shall 55B-16 have the power to administer oaths and affirmations in anv investigation or proceeding pending before such board or commission. Sec. 907. — Board of recreation and parks—Membershi The members of the board of recreation and parks shall be appointed from the qualified electors of the City. Seven (7) members shall be appointed as required by this charter. One additional member shall be appointed by the governing board of each school district operating one or more elementary schools located within the City of Santa Ana except that there shall not be more than four (4) such additional members. If more than four (4) school districts operate elementary schools within the City, appointment of the additional members shall be made by the governing boards of those districts having the largest assessed value of property lying within the City of Santa Ana No member of the board of recreation and parks shall hold any paid office or employment in the Citv government. Sec. 908. — Same—Powers and duties. The board of recreation and parks shall have power and be required to: (a) Consider matters that may be referred to it by the City Council the City Manager, or the director of recreation and parks and render such counsel and advice in regard thereto as may be requested by the referring authorities: and consider all matters regarding programs, usages or services of the department of recreation and parks other than administrative matters: (b) By its own motion make such studies and investigations as it may deem necessary for the formulation of recreation and park policies or to determine the wisdom and efficacy of the policies plans and procedures dealing with recreation and park matters and report its findings and recommendations to the City Council the City Manager, or the director of recreation and parks or to any or all such authorities as it may see fit: (c) Recommend to the City Council and the City Manager as to the acceptance or rejection of offers of donations of money, personal property, or real estate to be used for recreation and park programs: and additionally, it shall make recommendations on the sale, transfer, or usage of existing or future park property; (d) Consider the annual budget during the process of its preparation by the director of recreation and parks and make recommendations with respect thereto to the Citv Manager and the City Council (e) Solicit to the fullest extent possible the cooperation of school authorities and other public and private agencies concerned with recreation and park programs of the City. Sec. 909. — Reserved Planning commission—Membership. The planning commission shall consist of seven (7) members to be appointed by the City Council from the qualified electors of the City, and no member of said commission shall hold any paid office or employment in the City government 55B-17 Sec. 910. — Reserved. Planning commission—Powers and duties The planning commission shall have power and be required to (a) Periodically review the City's General Plan: (b) Make studies and plans for future civic land use including use as public recreation facilities: (c) Annually review the City's capital improvement program solely for consistency with the General Plan (d) Exercise such functions as to land subdivisions zoning and other City planning as may be prescribed by ordinance (e) By its own motion make such studies and investigations as it may deem necessary for the formulation of planning and land use policies and report its findings and recommendations to the City Council or the City Manager, or to both such authorities, as it may see fit. Sec. 911. — Personnel board—Membership. The personnel board shall consist of seven (7) members to be appointed by the Citv Council from the qualified electors of the City. None of the members shall be removed from office without reasonable and sufficient cause in accordance with procedures as provided by ordinance. None of the members shall hold public office or employment in the city government or be a candidate for any other public office or position be an officer of any local state or national partisan political club or organization or while a member of the personnel board or for a period of one (1) year after he has ceased for any reason to be a member, be eligible for appointment to any salaried office or employment in the service of the City. Sec. 912. — Reserved. Same—Powers and duties. The personnel board shall have power and be required to: (a) Hear appeals pertaining to the disciplinary suspension demotion or dismissal of any officer or employee having permanent status in any office position or employment in the civil service and as otherwise provided for in the civil service rules and regulations; (b) Consider matters that may be referred to it by the City Council or the Citv Manager and render such counsel and advice in regard thereto as may be requested by the referring authorities: (c) By its own motion make such studies and investigations as it may deem necessary for the formulation of civil service policies or to determine the wisdom and efficacy of the policies plans and procedures dealing with civil service matters and report its findings and recommendations to the City Manager or the City Council, or to both such authorities as it may see fit• 55B-18 (d) Conduct public hearings on all proposed amendments to or repeal of civil service rules and regulations in the manner as prescribed by ordinance and advise the council of its findings in such matters within sixty (60) days Sec. 425. i. – Disqualification due to campaign contributions A councilmember shall not participate in no use his or her official position to influence a decision of the City Council if it reasonably foreseeable that the decision will have a material financial effect apart from its effect on the public generally or a significant portion thereof, on a recent major campaign contributor. As used herein "recent major campaign contributor" means a person who has made campaign contributions totally tow hundred fifty dollars ($250.00) or more to the councilmember of to any campaign committee controlled by the councilmember in the twelve-month period immediately preceding the date of the decision The mayor is a councilmember for the purposes of this section. Sec. 610. - Funds—General fund; stabilization fund All money paid into the City treasury shall be credited to and kept in separate funds in accordance with the provisions of this charter, state law, or ordinance For the purpose of this charter, the "General Fund" is established as a medium of control and accounting for City activities other than activities authorized or contemplated by special funds All revenues and receipts which are not by this charter, state law, or ordinance pledged for special purposes shall be credited to the general fund The City Council shall maintain a revolving fund to be known as the "Stabilization Fund" for the purpose of placing the payment of running expenses of the City during the fiscal year on a cash basis. A reserve shall be built up in this fund from any available sources in an amount which the City Council deems sufficient with which to meet all lawful demands against the City for the first five (5) months or other necessary period of the succeeding fiscal year prior to the receipt of ad valorem tax revenues Transfers may be made by the City Council from such fund to any other fund or funds of such sum or sums as may be required for the purpose of placing such funds, as nearly as possible on a cash basis. All moneys so transferred from the stabilization fund shall be returned thereto before the end of the fiscal year. Sec. 704. – Director of finance; qualifications powers and duties To become eligible for the position of director of finance the person appointed by the Cid Manager shall be qualified to administer and direct an integrated department of finance The director of finance shall have power and be required to 55B-19 (a) Have charge of the administration of the financial affairs of the City under the direction of the City Manager: (b) Supervise and be responsible for the disbursement of all moneys and have control over all expenditures to insure that budget appropriations are not exceeded; (c) Supervise a system of financial internal control including the auditing of all purchase orders before issuance the auditing and approving before payment of all invoices, bills, payrolls, claims, demands, or other charges against the City, and with the advice of the City Attorney, when necessary, determine the regularity legality, and correctness of such charges: (d) Settle claims, demands or other charges including the issuing of warrants therefor: (e) Maintain general and cost accounting systems for the City government and each of its offices, departments, and other agencies; keep separate accounts for the items of appropriation contained in the City budget, each of which accounts shall show the amount of appropriations the amounts paid therefrom the unpald obligations against it and the unencumbered balance: and require reports of the receipts and disbursements from each receiving and expending agency of the City govemment to be made daily or at such intervals as he may deem expedient (f) Submit to the City Council through the City Manager a monthly statement of all receipts and disbursements and other financial data in sufficient detail to show the exact financial condition of the City, and as of the end of each fiscal year, submit a complete financial statement and report: (g) Administer the license and business tax program of the City' (h) Direct treasury administration for the City, including the receiving and collecting of revenues and receipts from whatever source; have custody of all public funds belonging to or under the control of the City or any office department or other agency of the Citv government: and deposit all funds coming into his hands in such depository as may be designated by resolution of the City Council, or, if no such resolution be adopted by the City Manager, in compliance with all of the provisions of the state constitution and laws of the state governing the handling depositing and securing of public funds; (i) Direct centralized purchasing and a property control system for the City government under rules and regulations to be prescribed by ordinance. Sec. 1107. — Reserved. Gifts to officers and employees prohibited It shall be unlawful for any person or organization that is financially interested in any decision pending action by any agency, officer or employee of the City, or in any contract to which the City is a party to make any gifts aggregating in value more than 55B-20 twenty-five dollars ($25.00) in any one calendar month to any officer, or employee of the City. No person or organization shall be deemed to have a financial interest in a decision or contract by reason of any interest which is shared by a significant portion of the general public. No gift is unlawful which is similarly made or offered to a significant portion of the general public. Any person who makes acts as the agent or intermediary in the making of, or arranges for the making of, any gift which is unlawful hereunder is guilty of a misdemeanor. Any officer or employee who receives any gift which he knows or reasonably should know, is unlawful hereunder is guilty of a misdemeanor. 55B-21 55B-22 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AUTHORIZING WRITTEN ARGUMENTS FOR PROPOSED AMENDMENTS TO THE SANTA ANA CHARTER REGARDING WHETHER THE CITY CHARTER SHOULD BE AMENDED TO MODERNIZE AND REMOVE OUTDATED LANGUAGE TO REFLECT CHANGES OR CONFLICTS IN THE CITY OR STATE LAW CONCERNING GIFTS AND CAMPAIGN CONTRIBUTIONS AND DESIGNATED CITY FUNDS CREATE CONSISTENCY IN THE MUNICIPAL CODE REGARDING BOARDS AND COMMISSIONS; AND MOVE THE QUALIFICATION FOR THE FINANCE DIRECTOR TO THE MUNICIPAL CODE. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1: The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general municipal election of the City of Santa Ana will be held on November 6, 2018, at which there will be submitted to the qualified electors of the City a Charter Amendment measure related to whether the City Charter should be amended to modernize and remove outdated language to reflect changes or conflicts in the City or State law concerning gifts and campaign contributions and designated City funds; Create consistency in the Municipal Code regarding Boards and Commissions; and Move the qualification for the Finance Director to the Municipal Code. B. That pursuant to the requirements at Section 9282 of the Elections Code of the State of California, the legislative body may authorize any members) of the City Council to write arguments for or against any measure. Section 2: The City Council, as the legislative body of the City of Santa Ana, hereby authorizes the Clerk of the Council to give preference and priority to any member or members of the City Council (up to five members), then to voters as set forth in California Elections Code section 9287, to file a written argument for or against the City measures set forth above, and to change said argument until and including the date fixed by the Clerk of the Council after which no arguments for or against said City measure may be submitted. Exhibit 3 Resolution 2018 -XXX Page 1 of 2 55B-23 Section 3: This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this _ day of July, 2018. Miguel A. Pulido Mayor APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: Laura A. Rossini Senior Assistant City Attorney AYES: Councilmembers: NOES: Councilmembers: ABSTAIN: Councilmembers: NOT PRESENT: Councilmembers: CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify that the attached Resolution No. 2018 -XXX to be the original resolution adopted by the City Council of the City of Santa Ana on July___L, 2018. Date: Maria D. Huizar, Clerk of the Council Resolution 2018 -XXX 55B-24 Page 2 of 2 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: DIRECT STAFF TO PLACE A PROPOSED BALLOT MEASURE FOR A SALES AND USE TAX MEASURE FOR GENERAL MUNICIPAL SERVICES FOR PUBLIC CONSIDERATION AT THE NOVEMBER 6, 2018 GENERAL MUNICIPAL ELECTION; APPROVE RESOLUTION, AUTHORIZE AND DESIGNATE CITY COUNCILMEMBERS TO FILE ARGUMENT; DIRECT CITY ATTORNEY TO FILE IMPARTIAL ANALYSIS; AND OTHER RELATED DOCUMENTS CALLING FOR A GENERAL MUNICIPAL ELECTION AND CONSOLIDATING IT WITH THE STATEWIDE GENERAL ELECTION (STRATEGIC PLAN NO. 5, 1) KW4r�4:� ClANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: rivii-06TWC ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Direct staff to place a ballot measure for the November 6, 2018 General Municipal Election for the submission to the qualified voters of a proposed ordinance regarding a general sales tax measure and approve actions and other related documents accordingly. Adopt Resolution of the City Council of the City of Santa Ana Calling for the Placement on the Ballot of a Measure for the November 6, 2018 General Municipal Election for the Submission to the Qualified Voters of a Proposed Ordinance Regarding a General Sales Tax Measure and Providing for the Filing of Argument and Rebuttal Statements Options for Consideration for the Santa Ana Neighborhood Safety and Essential City Services Protection Measure: a. 1.5% add on sales and use tax b. 1.5% add on sales and use tax through 2030, and reduced to 1.0% in 2031 c. 1.0% add on sales and use tax 2. Request that the Board of Supervisors of Orange County Consolidate the City's General Municipal Election with the Statewide General Election. 3. Authorize the filing of Arguments and "uttall Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 2 a. Designate up to five (5) Councilmembers to author an Argument and Rebuttal statement. 4. Direct the City Attorney to prepare Impartial Analysis 5. Direct Clerk of the Council to publish legal notices as required by law. Staff recommends the City Council approved Option 1 a, and 2 thru 5. DISCUSSION At the February 5, 2018, Special City Council Meeting, Staff identified a structural deficit in the City's proposed 2018-19 General Fund budget and five-year forecast. The City's financial forecast has identified a budget deficit moving into the foreseeable future. This is a result of expenditures outpacing revenue growth. To address these deficits, Staff identified a plan that includes expenditure reductions, transformational program delivery changes and potential revenue enhancements in order to continue to provide programs and services to the community. Given this precarious financial position, and the cuts that were made in staffing following the Great Recession, any changes would almost certainly require significant level of service reductions and or eliminations. This represents a less than desired outcome. In the City's ongoing effort to evaluate costs and revenue, the following actions have taken place: • Contracted out the City's fire department • Contracted out maintenance functions where feasible • Modernized the Utility User Tax • Evaluated and adjusted the City's miscellaneous fee schedule • Reduced all non-essential personnel • Invested in technology enhancements to reduce ongoing costs On March 20, 2018, the Mayor and City Council authorized staff to enter into agreements to evaluate revenue generating opportunities to meet the City's needs in addressing the projected deficit for the current fiscal year and for future fiscal years. As such, the City entered into a consulting agreement with MuniServices on May 1, 2018, to evaluate two revenue measures: 1) sales and use tax and 2) adult -use and commercial cannabis tax. The scope of work also included strategy consulting services from GrassrootsLabs and polling services from FM3. Consideration of the adult -use and commercial cannabis tax is provided as a separate ballot measure and directly tied to the ordinances approved by the City Council in November 2017 and early 2018. At the June 19, 2018 Council Meeting, the City Council voted to direct the City Manager and Staff to prepare add on sales tax options, the required resolutions, documents and guidelines necessary to proceed with a ballot measure. At that meeting, the City Council requested that staff brief members of the City Council to provide information on different sales tax increments, sunset alternatives, other revenue options, methods to ensure fiscal transparency, economic development opportunities, and information on how new revenue would be allocated to programs and services for the community. 55C-2 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 3 Staff met with members of the City Council to provide additional information on the proposed Neighborhood Safety and Essential City Services Protection Measure. This included information regarding the need for additional new on-going revenues, projected revenues based on a variety of add on sales and use tax increments, community needs and priorities, and the results of the poll conducted by FM3. The briefings provided an opportunity to present Staffs recommendation for the Santa Ana Neighborhood Safety and Essential City Services Protection Measure to be placed on the November 2018 ballot, which would generate the requisite funds to maintain and enhance programs and services to the community. What is Sales and Use Tax? Sales tax is imposed on retail transactions for tangible personal property. The Use tax is imposed on consumers of tangible personal property that is used, consumed, or stored. Sales tax is not applicable to several general categories including: 1) Necessities of life (food products, unless heated, health related, housing), 2) General public benefit (alternate energy, museums, public art exhibits), 3) Industry benefit (transportation related such as motor vehicle fuel, entertainment industry); 4) Exclusions by definition (admission charges, sales price/gross receipts); and 5) Other exemptions, exclusions or credits (full list of exemptions is available al https://www.cdtfa.ca.gov/formspubs/pub6l.pd . A general-purpose tax measure requires approval from the majority of the voters (50% plus 1) to implement such a tax. The sales and use tax is a common method used by various cities to generate additional revenue for city programs and services. Orange County Cities with an Add On Sales and Use Tax In 2016, voters in five other Orange County cities approved or reaffirmed six add on sales and use tax measures. The following cities currently have an add on sales and use tax in Orange County: City Increment Sales & Use Tax Rate Fountain Valley 1.0% 8.75% Westminster 1.0% 8.75% Stanton 1.0% 8.75% La Palma 1.0% 8.75% La Habra 0.5% 8.25% Additionally, there are several other cities in Orange County that are currently evaluating sales and use tax ballot measures for this upcoming November 2018 election cycle. 55C-3 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 4 Consumer Response to Add On Sales and Use Tax Consumers spending patterns are generally not impacted by local sales tax rates. Staff conducted a survey of the Orange County cities that have a local add on sales and use tax and validated that passage of add on sales tax measures has not led to a decline in sales tax revenue. Additionally, when the tax revenue addresses city needs such as homelessness, public safety, quality of life and infrastructure, consumers do not comparison shop for sales tax rates. If the Santa Ana Neighborhood Safety and Essential City Services Protection Measure is approved, staff anticipates launching an enhanced Shop Local campaign with an emphasis on the benefits of local purchases on the economy and the services consumers will receive as a result of keeping their spending within the City of Santa Ana. Revenue Estimates The City Council, at the June 19, 2018, Council meeting, requested estimates on the anticipated revenue that may be generated at various add on sales and use tax increments. The chart below outlines general estimates, which represent a full year of revenue, for consideration: Increment Annual Est. 1 '% cent $60 million 1 cent $40 million * cent $30 million * cent $20 million State law establishes regulations on add on sales and use tax measures and the increments that are allowed to be considered, in this case, the City Council may consider a ballot measure in increments of one quarter cent. The maximum sales tax rate allowed is 10.25% in the state. Staff recommends a penny and a half add on sales and use tax measure which provides the greatest opportunity to address community needs while addressing the City's long-term financial stability. The proposed measure, if approved, would be a full percent below the ceiling established by the State. Based on the majority approval of the add on sales and use tax measure by the Santa Ana voters in November of 2018, it is anticipated that the additional new revenue would commence in the spring of 2019. Programs and Services the New Revenue will Fund If the Santa Ana Neighborhood Safety and Essential City Services Protection Measure is approved by the voters, new revenues generated will go to providing public safety, addressing homelessness, providing deferred maintenance at parks and other City facilities, equipment replacement, capital improvements, youth programming, library services, code enforcement and general municipal services. Additionally, the new add on sales tax revenue will support city needs and priorities as identified in the May 1, 2018, City Council Meeting 2018-19 Trial Budget Presentation. This included funding for 55C-4 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 5 the Quality of Life Team (QOLT) to address homelessness, leveraging economic development, advancing police officer recruitments, furthering Enterprise Fund compliance, addressing service delivery challenges, and augmenting investments in technology to streamline local government. Transparency and Accountability There are additional considerations that the Mayor and City Council may add to the ballot measure to enhance transparency and accountability. These include annual independent audits, an oversight review committee, an online open checkbook, mid -year fiscal review, and delineating and tracking the new add on sales tax revenue and corresponding allocation to be evaluated as part of the annual budget. Annual independent audits are currently performed in accordance with the Governmental Account Standards Board guidelines and are available on the City's website for the public's review. If a requirement for an independent audit is added to the ballot measure, a separate audit would be performed specific to the add on sales tax to ensure that new revenues are properly collected and that expenditures are reviewed and consistent with governmental accounting practices. An oversight review committee typically reviews on an annual basis the revenue receipts and expenditures of local add on sales tax, status and performance of the programs and services that are funded from the proceeds of the new revenues, and prepare reports for City Council consideration. The City has had an open checkbook on its' City website since 2015. This provides a mechanism for any interested party to review the City's expenditures at any time through a convenient online system at no cost. As an enhancement, staff could place a specific portion of the open checkbook system to be made available for the new sales tax revenue and expenditures. Staff is recommending that the above referenced transparency and accountability elements be included for consideration by the voters. It is the goal of the City to promote transparency and accountability in all efforts and will continue to enact best practices to ensure fiscal stability moving forward. Sunset Options A sunset clause is a provision that can be added to a ballot measure to end the effect of a tax. Typically, sunset options are exercised in cases where the revenue is utilized to help address temporary or term specific needs, or finance capital investments. When revenue from a ballot measure, such as the initiative being proposed, funds operating costs, a sunset provision can have unintended consequences. This is most evident when providing enhanced services that must later be eliminated or drastically cut. In Orange County, three cities have a sunset clause in their add on sales tax. The cities of Fountain Valley and La Habra both have a 20 -year sunset, while the city of Westminster has a 5 year sunset. However, staff has included an option with a provision to sunset 0.5% from the 1.5% proposed increase after about eleven years, for the City Council's consideration. 55C-5 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 6 Staff anticipates that the new revenue will be utilized to meet current and future public safety needs, addressing homelessness, youth programing, infrastructure needs and essential city services, thus Staff is not recommending a sunset clause at this time. . Other Revenue Considerations and Mitigating Development Costs In addition to the revenue measure, the City is looking for opportunities to spur economic growth and enhance its future revenue base. The City's Economic Development Division is focusing on an array of initiatives that promote investment opportunities, business retention and attraction, revenue generating projects, and workforce services. This includes developing a community branding strategy, scheduled to be completed by the end of summer 2018 that promotes and markets Santa Ana as an ideal place to do business, live and play. The Economic Development Divisions' efforts of business attraction and retention are designed to ensure that new and existing businesses continue to thrive in Santa Ana. With the adoption of the City ordinance to allow new cannabis related businesses, Staff has identified several industrial buildings for inquiring cannabis companies looking to grow their footprint. Support for these new cannabis related businesses will help increase revenues related to the Cannabis industry for the City. In order to provide the City with additional Economic Development options, Staff is in the process of finalizing a property disposition policy that will allow the sale of City owned property for revenue enhancement opportunities from the proceeds of the sale, development, and community benefits. In an effort to demonstrate the positive impacts of new development, the Planning & Building Agency has begun including a section titled Economic Development Benefits on the Planning Commission staff reports. The objective is to identify the economic benefits for each new proposed development. The economic benefits of each development project will vary depending on the type of use, but generally the reports will capture estimates of: new jobs, projected sales tax revenue, and the increases in property evaluations, infrastructure impacts, and core service impacts. This is an evolving process and other information may be collected for informational analysis and to contribute towards the formation of future public policy. The Public Works Agency is the lead department on a study that is currently underway to evaluate the City's Development Impact Fees (DIF). The primary objective of a DIF program is to ensure that new development pays the capital costs associated with growth. Currently, there are DIFs to mitigate general impacts to infrastructure such as parks, library, transportation, sewer, and storm drainage systems. Other 2018 Initiatives and Impacts to Santa Ana Rate Pavers In addition to the proposed ballot measure, there are other City of Santa Ana related initiatives on the November 6, 2018 ballot. This includes potential ballot measures for charter modernization, conversion to district elections, and an adult use & commercial cannabis tax. The Santa Ana Unified School District is also considering a school bond measure in November 2018. 55C-6 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 7 Additionally, there are other potential considerations such as the Poseidon Desalination Plant that would impact water rates locally, possible gas tax repeal on the November 2018 ballot, potential rate increases for utility service, and the reduction of local sanitation rates. Staff Recommendation Staff recommends that the City Council provide direction to staff and adopt the resolutions necessary to place the Santa Ana Neighborhood Safety and Essential City Services Protection Measure before the voters of Santa Ana. By placing the measure on the ballot the City Council is not endorsing or taking a position, but rather asking the voters of Santa Ana to lend their voice to the future of the City and the type of service levels they would like to receive moving forward. If adopted, the City would have an add on sales and use tax of one and half percent, of which 100% of the revenue generated would remain locally for Santa Ana to provide programs and services for the community. In order to provide for transparency and accountability to the Santa Ana community, staff is recommending that the ballot measure include annual independent audits, an oversight review committee, an online open checkbook, and to include revenues into the annual budget. If approved by the voters, the City would be in a position to continue to provide much needed programs and services and look to enhance the quality of life and wellbeing of the current and future community of Santa Ana. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT The County Registrar of Voters office has estimated that the additional cost of adding a ballot measure to the City's consolidated general municipal election would be approximately $16,500. Funds for these administrative costs are available in the Clerk of the Council, Contractual Services account no. 01107031 62300, FY 2018-2019. APPROVED AS TO FUNDS AND ACCOUNTS: ASN�� Francisco Gutierrez Executive Director Finance and Management Services Agency 55C-7 55C-8 Proposed Add on Sales and Use Tax Measure for Municipal Services for Public Consideration on the November 2018 Ballot July 3, 2018 Page 8 Exhibit: 1. Resolution of the City Council for the City of Santa Ana Calling for the Placement on the Ballot of a Measure for the November 6, 2018 General Municipal Election For the Submission to the Qualified Voters of a Proposed Ordinance Regarding a General Sales Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (1 % percent) 2. Resolution of the City Council for the City of Santa Ana Calling for the Placement on the Ballot of a Measure for the November 6, 2018 General Municipal Election For the Submission to the Qualified Voters of a Proposed Ordinance Regarding a General Sales Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (1.5% until 2030 and then reduced to 1.0%) 3. Resolution of the City Council for the City of Santa Ana Calling for the Placement on the Ballot of a Measure for the November 6, 2018 General Municipal Election For the Submission to the Qualified Voters of a Proposed Ordinance Regarding a General Sales Tax Measure; and Providing for the Filing of Argument and Rebuttal Statements. (1.5%) 55C-9 55C-10 RESOLUTION NO. 2018 -XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR THE PLACEMENT ON THE BALLOT OF A MEASURE FOR THE NOVEMBER 6, 2018 GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE REGARDING A GENERAL SALES TAX MEASURE; AND PROVIDING FOR THE FILING OF ARGUMENT AND REBUTTAL STATEMENTS WHEREAS, pursuant to California Elections Code section 9222, the City Council has authority to place measures on the ballot to be considered at a General Municipal Election; and WHEREAS, pursuant to the law of the State of California, the City Council has called and ordered to be held in the City of Santa Ana, California, on Tuesday, November 6, 2018, a General Municipal Election; and WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of Santa Ana ("City'), subject to approval by a majority vote of the qualified voters of the City voting in an election on the issue, to levy a transactions and use tax pursuant to the Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general purposes and projects; and WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by Proposition 218 effective November, 1996, requires that the measure proposing a general tax be submitted to the voters at an election consolidated with a regularly scheduled general election for members of the governing body of the local government; and WHEREAS, pursuant to California Constitution Article XIII C, section 2 and Elections Code section 10201, the City has determined to submit a proposition to enact an ordinance establishing a transactions and use tax to the voters at the City's next regular election; NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve as follows: Section 1. The City Council herebyfinds and determines that the foregoing recitals are true and correct and are hereby incorporated by reference. Section 2. Under the provisions of the California Elections Code, the following proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters at the General Municipal Election to be held on November 6, 2018: Exhibit 1 55C-11 Yes To maintain effective 9-1-1 emergency response services by retaining firefighters, police officers, and paramedics; addressing homelessness/housing concerns and services; fixing potholes/streets; maintaining parks, after school programs, senior services, graffiti removal and unrestricted general revenue purposes; No shall the measure be adopted approving an ordinance establishing a one (1.0%) percent sale tax providing approximately $40 million dollars annually until ended by voters, requiring annual audits, citizens oversight, all funds only for Santa Ana? Section 3. Should said measure be approved by the requisite vote, the ordinance attached hereto as Exhibit A and incorporated by this reference shall be enacted. Section 4. That the text of the Ordinance to be submitted to the voters is attached to this Resolution as Exhibit "A" and incorporated herein by this reference ("Ordinance"). Section 5. That pursuant to Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Ordinance to the City Attorney to prepare an impartial analysis of the Ordinance which shall not exceed 500 words in length. Section 6. That pursuant to Elections Code Section 9282, the City Council may file a written argument in favor of the Ordinance in accordance with Article 4, Chapter 3, Division 9 of the Elections Code and may change the argument as allowed by law. Section 7. That pursuant to Elections Code Section 9287, if more than one argument for or more than one argument against the Ordinance is submitted to the City Clerk within the time prescribed by law, he or she shall select one of the arguments in favor and one of the arguments against the Ordinance for printing and distribution to the voters, giving preference in such selection in the following order: The City Council, or a member or members of the City Council authorized by the City Council. 2. Bona fide associations of citizens. 3. Individual voters who are eligible to vote on the Ordinance. 55C-12 Section 8. That pursuant to Elections Code Sections 9220 and 9285, when the City Clerk has selected the arguments for and against the Ordinance which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the Ordinance to the author or authors of the argument against, and copies of the argument against the Ordinance to the author or authors of the argument in favor. The author or authors may submit a rebuttal argument to the direct argument not exceeding 250 words. Rebuttal arguments shall be printed in the same manner as the direct arguments and shall immediately follow the direct argument which it seeks to rebut. All previous resolutions providing for the filing of rebuttal arguments for City measures are repealed, and this Section shall only apply to the election on the Ordinance to be held on November 6, 2018. Section 9. In accordance with Section 10002 of the Elections Code, the Board of Supervisors Orange County is hereby requested to consent to the Registrar of Voters rendering election services to the City as may be requested by the City Clerk of said City, the County of Orange to be reimbursed in full for such services as are performed. The Board of Supervisors of Orange County is also requested to consent and agree to the consolidation of the General Election with any other election occurring on November 6, 2018, and the City hereby consents to any such consolidation. Section 10. The election services which the City requests of the Registrar of Voters, or such other official as may be appropriate to perform, and which such officer is hereby authorized and directed to perform if the said Board of Supervisors consents, include: the preparation, printing and mailing of sample ballots and polling place cards, the establishment or appointment of precincts, polling places, and election officers, opening and closing of polling places, and making such publications as are required by law in connection therewith; the furnishing of ballots, voting booths and other necessary supplies or materials for polling places, the canvassing of the returns of the election and the furnishing of the results of such canvassing to the City Clerk, and the performance of such other election services as may be requested by said City Clerk. Section 11. That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m, of the same day when the polis shall be closed, pursuant to California Elections Code Section 10242 and Section 14212, except as provided in California Elections Code Section 14401 or any other provision of law. Section 12. All persons qualified to vote at municipal elections in the City on the day of the election herein provided for shall be qualified to vote on the Ordinance hereby submitted at the General Municipal Election. Section 13. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding general municipal elections in the City. 55C-13 Section 14. Notice of the time and place of holding the General Municipal Election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. Section 15. The City Clerk shall receive the canvass as it pertains to the General Municipal Election, and shall certify the results to this City Council, as required by law. Section 16. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional. Section 17. Pursuant to California Elections Code section 9295, this Resolution and the attached Ordinance will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the sample ballot. The examination period will end on the day that is seventy-five (75) days prior to the date set for the election. Section 18. This Resolution shall take effect immediately upon its adoption by a majority of the City Council. Section 19. The City Clerk of the City of Santa Ana is hereby directed to certify to the passage and adoption of this Resolution and to file a certified copy of this Resolution with the Board of Supervisors of Orange County and the Registrar of Voters of Orange County at least eighty-eight (88) days before the date of the election. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa Ana, California, at its regular meeting held on the _ day of July, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor 55C-14 ATTEST: Maria D. Huizar City Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Attorney 55C-15 EXHIBIT A ORDINANCE NO. NS AN ORDINANCE OF THE CITY OF SANTA ANA ADDING ARTICLE VII TO CHAPTER 35 OF THE SANTA ANA MUNICIPAL CODE RELATED TO A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION The City Council of the City of Santa Ana does ordain as follows: Section 1. Authority. The City Council and the Voters of the City of Santa Ana enact this Ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the California Constitution and Section 7285.9 of the California Revenue and Taxation Code. Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana Municipal Code to read as follows: ARTICLE VII.- TRANSACTIONS AND USE TAX Sec. 35-200. - Short title. This chapter shall be known as the "Transactions and Use Tax" and shall be applicable in the incorporated territory of the City of Santa Ana ("city"). Sec. 35-201. - Definitions. For the purpose of this article the fallowing words terms shall have the meaning given in this section: "In the city" means and includes all territory within the city limits. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the later of the adoption of this article and the approval by the voters of the city of a measure approving the imposition of an increased transactions and use tax; provided that, if the city shall not have entered into a contract with the California Department of Tax and Fee Administration as required by section 35-203. prior to such date, the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Sec. 35-202 - Purpose. This article of the Santa Ana Municipal Code has been adopted for the following purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: 55C-16 (1) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2, which authorizes the city to adopt this tax. This article shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. (2) To adopt a retail transactions and use tax that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not Inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. (3) To adopt a retail transactions and use tax that imposes a tax and provides a measure therefor that can be administered and collected by the State Board of Equalization in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes. (4) To adopt a retail transactions and use tax that can be administered in a manner that will, to the greatest degree possible, be consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue and Taxation Code, and thereby minimize the cost of collecting city transactions and use taxes, and at the same time minimize the burden of record keeping upon Persons Subject to taxation under the provisions thereof. Sec. 35-203. - Contract with state. Prior to the operative date, the city shall contract with the California Department of Tax and Fee Administration to perforin all functions incidental to the administration and operation of this transactions and use tax ordinance. If the city has not contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. The city council may make any technical amendments to this article required by the California Department of Tax and Fee Administration, except for any changes affecting the tax rate, tax methodology, or its manner of collection. Sec. 35-204. - Imposition of transactions and use tax — Rate. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the city 55C-17 at the rate of one percent (1.0%) of any gross receipts of the retailer from the sale of all tangible personal property sold at retail in the city on and after the operative date of this chapter. Sec. 35-205. - Place of sale. For the purposes of this article, all retail sales are consummated at the place of business of the retailer, unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration. Sec. 35-206. - Imposition of use tax — Use tax rate. An excise tax is hereby imposed on the storage, use, or other consumption in the city of tangible personal property purchased from any retailer on or after the operative date of this chapter, at the rate of one percent (1.0%) of the sales price of the property subject to the tax. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. Sec. 35-207. - Adoption of provisions of state law— Generally. Except as otherwise provided in the article and except insofar as they are inconsistent with the provisions of Part 1,6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with § 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this article as though fully set forth herein. Sec. 35-208. - Adoption of provisions of state law — Limitations; Limitations on collection of use taxes. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: (1) Wherever the State of California is named or referred to as the taxing agency, the name of this city shall be substituted therefor. However, the substitution shall not be made when: (A) The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California; 55C-18 (B) The result of that substitution would require action to be taken by or against this city or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this article. (C) In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: (i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the state under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; (ii) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. (D) In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. (2) The word "city' shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. Sec. 35-209 - Permit not required. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this article. Sec. 35-210. - Exemptions and exclusions. (1) Measure of Tax. There shall be excluded from the measure of the transactions and use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state -administered transactions or use tax. (2) Transactions Tax Exemptions. There are exempted from the computation of the amount of transactions tax the gross receipts from: 55C-19 (A) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. (B) Sales of property to be used outside the city which is shipped to a point outside the city, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the city shall be satisfied: (i) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out -of -city address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and (ii) With respect to commercial vehicles, by registration to a place of business out -of -city and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. (C) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date. For the purposes of subsections (2)(C) and (2)(D) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. (3) Use Tax Exemptions. There are exempted from the use tax imposed by this article, the storage, use or other consumption in this city of tangible personal property: 55C-20 (A) The gross receipts from the sale of which have been subject to a transactions tax under any state -administered transactions and use tax ordinance. (B) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. (C) If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date. For the purposes of subsections (3)(C) and (3)(D) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. (4) Exemption from Collection of Use Tax. Except as provided in subsection (5), a retailer engaged in business in the city shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the city or participates within the city in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the city or through any representative, agent, canvasser, solicitor, subsidiary, or person in the city under the authority of the retailer. (5) Retailer Not Exempt from Collection of Use Tax. "A retailer engaged in business in the city' shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect 55C-21 use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the city. (6) Credit Against Use Tax for Transactions Tax Paid Elsewhere. Any person subject to use tax under this article may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1,6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Sec. 35-211. - Adoption of amendments to state law. All amendments subsequent to the effective date of this article to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this article, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this article. Sec. 35-212.- Enjoining collection prohibited. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against the State or the city, or against any officer of the State or the city, to prevent or enjoin the collection hereunder, or Parts 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. Sec. 35-213. —Termination. The authority set forth in this article to impose a retail transactions and use tax shall continue until such authority is terminated by the voters of the City in the manner provided by law. Sec. 35-214. - Oversight committee. The City Council shall, by resolution establish as citizen oversight committee to act in an advisory role to the City Council in reviewing the annual revenue and expenditures of funds from the tax authorized by this article. The resolution shall establish the committee members' terms, qualifications and duties, and the committee's scope of authority. Sec. 35-215. - Annual Audit. An annual audit of the revenue generated by the sales and use tax and the expenditures made will be conducted by an independent certified public accountant. 55C-22 Sec. 35-216. - Annual Expenditures Disclosure. The City of Santa Ana will publically disclose on an annual basis a list of expenditures made with sales and use tax monies for the preceding fiscal year. SECTION 2. Effective Date. Pursuant to the California Constitution Article XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters voting in the election on Measure " vote in favor of the adoption of such measure, this ordinance shall be deemed valid and binding and shall be considered adopted upon the date that the vote is declared by the City Council, and shall go into effect ten (10) days after that date. SECTION 3. Severability. If any section, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining provisions of this Ordinance. The People of the City of Santa Ana hereby declare that they would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance be enforced. SECTION 4. Certification/Summary. Following the City Clerk's certification that the citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance and the City Clerk shall cause the same to be entered in the book or original ordinance of said City; and shall cause the same, or a summary thereof, to be published as required by law. PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this Wh day of November, 2018. ATTEST: City Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Attorney Mayor 55C-23 55C-24 RESOLUTION NO. 2018 -XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR THE PLACEMENT ON THE BALLOT OF A MEASURE FOR THE NOVEMBER 6, 2018 GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE REGARDING A GENERAL SALES TAX MEASURE AND PROVIDING FOR THE FILING OF ARGUMENT AND REBUTTAL STATEMENTS WHEREAS, pursuant to California Elections Code section 9222, the City Council has authority to place measures on the ballot to be considered at a General Municipal Election; and WHEREAS, pursuant to the law of the State of California, the City Council has called and ordered to be held in the City of Santa Ana, California, on Tuesday, November 6, 2018, a General Municipal Election; and WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of Santa Ana ("City"), subject to approval by a majority vote of the qualified voters of the City voting in an election on the issue, to levy a transactions and use tax pursuant to the Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general purposes and projects; and WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by Proposition 218 effective November, 1996, requires that the measure proposing a general tax be submitted to the voters at an election consolidated with a regularly scheduled general election for members of the governing body of the local government; and WHEREAS, pursuant to California Constitution Article XIII C, section 2 and Elections Code section 10201, the City has determined to submit a proposition to enact an ordinance establishing a transactions and use tax to the voters at the City's next regular election; NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve as follows: Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct and are hereby incorporated by reference. Section 2. Under the provisions of the California Elections Code, the following proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters at the General Municipal Election to be held on November 6, 2018: Exhibit 2 55C-25 Yes To maintain effective 9-1-1 response; retaining firefighters and police officers; addressing homelessness; fixing streets; maintaining parks, youth and senior services, and unrestricted general revenue purposes; shall the sales tax be increased one and one half (1.5%) percent until 2030 providing approximately $60 million dollars No annually, then reduced in 2031 to one (1 %) percent providing approximately $40 million dollars annually, until ended by voters, requiring annual audits, citizens oversight and for Santa Ana use only? Section 3. Should said measure be approved by the requisite vote, the ordinance attached hereto as Exhibit A and incorporated by this reference shall be enacted. Section 4. That the text of the Ordinance to be submitted to the voters is attached to this Resolution as Exhibit "A" and incorporated herein by this reference ("Ordinance"). Section 5. That pursuant to Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Ordinance to the City Attorney to prepare an impartial analysis of the Ordinance which shall not exceed 500 words in length. Section 6. That pursuant to Elections Code Section 9282, the City Council may file a written argument in favor of the Ordinance in accordance with Article 4, Chapter 3, Division 9 of the Elections Code and may change the argument as allowed by law. Section 7. That pursuant to Elections Code Section 9287, if more than one argument for or more than one argument against the Ordinance is submitted to the City Clerk within the time prescribed by law, he or she shall select one of the arguments in favor and one of the arguments against the Ordinance for printing and distribution to the voters, giving preference in such selection in the following order: 1. The City Council, or a member or members of the City Council authorized by the City Council. 2. Bona fide associations of citizens. 3. Individual voters who are eligible to vote on the Ordinance. 55C-26 Section 8. That pursuant to Elections Code Sections 9220 and 9285, when the City Clerk has selected the arguments for and against the Ordinance which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the Ordinance to the author or authors of the argument against, and copies of the argument against the Ordinance to the author or authors of the argument in favor. The author or authors may submit a rebuttal argument to the direct argument not exceeding 250 words. Rebuttal arguments shall be printed in the same manner as the direct arguments and shall immediately follow the direct argument which it seeks to rebut. All previous resolutions providing for the filing of rebuttal arguments for City measures are repealed, and this Section shall only apply to the election on the Ordinance to be held on November 6, 2018. Section 9. In accordance with Section 10002 of the Elections Code, the Board of Supervisors Orange County is hereby requested to consent to the Registrar of Voters rendering election services to the City as may be requested by the City Clerk of said City, the County of Orange to be reimbursed in full for such services as are performed. The Board of Supervisors of Orange County is also requested to consent and agree to the consolidation of the General Election with any other election occurring on November 6, 2018, and the City hereby consents to any such consolidation. Section 10, The election services which the City requests of the Registrar of Voters, or such other official as may be appropriate to perform, and which such officer is hereby authorized and directed to perform if the said Board of Supervisors consents, include: the preparation, printing and mailing of sample ballots and polling place cards, the establishment or appointment of precincts, polling places, and election officers, opening and closing of polling places, and making such publications as are required by law in connection therewith; the furnishing of ballots, voting booths and other necessary supplies or materials for polling places, the canvassing of the returns of the election and the furnishing of the results of such canvassing to the City Clerk, and the performance of such other election services as may be requested by said City Clerk. Section 11. That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m. of the same day when the polls shall be closed, pursuant to California Elections Code Section 10242 and Section 14212, except as provided in California Elections Code Section 14401 or any other provision of law. Section 12. All persons qualified to vote at municipal elections in the City on the day of the election herein provided for shall be qualified to vote on the Ordinance hereby submitted at the General Municipal Election. Section 13. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding general municipal elections in the City. 55C-27 Section 14. Notice of the time and place of holding the General Municipal Election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. Section 15. The City Clerk shall receive the canvass as it pertains to the General Municipal Election, and shall certify the results to this City Council, as required by law. Section 16. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional. Section 17. Pursuant to California Elections Code section 9295, this Resolution and the attached Ordinance will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the sample ballot. The examination period will end on the day that is seventy-five (75) days prior to the date set for the election. Section 18. This Resolution shall take effect immediately upon its adoption by a majority of the City Council. Section 19, The City Clerk of the City of Santa Ana is hereby directed to certify to the passage and adoption of this Resolution and to file a certified copy of this Resolution with the Board of Supervisors of Orange County and the Registrar of Voters of Orange County at least eighty-eight (88) days before the date of the election. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa Ana, California, at its regular meeting held on the _ day of July, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor 55C-28 ATTEST: Maria D. Huizar City Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Attorney 55C-29 EXHIBITA ORDINANCE NO. AN ORDINANCE OF THE CITY OF SANTA ANA ADDING ARTICLE VII TO CHAPTER 35 OF THE SANTA ANA MUNICIPAL CODE RELATED TO A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION The City Council of the City of Santa Ana does ordain as follows: Section 1. Authority, The City Council and the Voters of the City of Santa Ana enact this ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the California Constitution and Section 7285.9 of the California Revenue and Taxation Code. Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana Municipal Code to read as follows: CHAPTER 35- TAXATION ARTICLE VII. - TRANSACTIONS AND USE TAX. Sec. 35-200. - Short title. This article shall be known as the "Transactions and Use Tax" and shall be applicable in the incorporated territory of the City of Santa Ana ("city"). Sec. 35-201. - Definitions. For the purpose of this article the following words terms shall have the meaning given in this section: "In the city" means and includes all territory within the city limits. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the later of the adoption of this chapter and the approval by the voters of the city of a measure approving the imposition of an increased transactions and use tax; provided that, if the city shall not have entered Into a contract with the California Department of Tax and Fee Administration as required by section 35-203, prior to such date, the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Sec. 35-202. - Purpose. This article of the Santa Ana Municipal Code has been adopted for the following purposes, and directs that the provisions hereof be interpreted 55C-30 in order to accomplish those purposes: (1) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2, which authorizes the city to adopt this tax. This article shall be operative if a majority of the electors voting on the measure vote to. approve the Imposition of the tax at an election called for that purpose. (2) To adopt a retail transactions and use tax that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. (3) To adopt a retail transactions and use tax that imposes a tax and provides a measure therefor that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes. (4) To adopt a retail transactions and use tax that can be administered in a manner that will, to the greatest degree possible, be consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue and Taxation Code, and thereby minimize, the cost of collecting city transactions and use taxes, and at the same time minimize the burden of record keeping upon persons subject to taxation under the provisions thereof. Sec. 35-203. - Contract with state. Prior to the operative date, the city shall contract with the California Department of Tax and Fee Administration to perform all functions incidental to the administration and operation of this transactions and use tax ordinance. If the city has not contracted with the California Department of Tax and Fee Administration prior to the operative date, itshall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. The city council may make any technical amendments to this chapter required by the California Department of Tax and Fee Administration, except for any changes affecting the tax rate, tax methodology, or its manner of collection. 55C-31 Sec. 35-204. - Imposition of transactions and use tax — Rate For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the city at the rate of one and one half percent (1.5%) of any gross receipts of the retailer from the sale of all tangible personal property sold at retail in the city on and after the operative date of this article until December 31, 2030 and then at the rate of one percent (1 %) until ended by the voters. Sec. 35-205. - Place of sale. For the purposes of this article, all retail sales are consummated at the place of business of the retailer, unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration. Sec. 35-206.- Imposition of use tax — Use tax rate. An excise tax is hereby imposed on the storage, use, or other consumption in the city of tangible personal property purchased from any retailer on or after the operative date of this article, at the rate of one and one-half of one percent (1.5%) of the sales price of the property subject to the tax until December 31, 2030 and then at the rate of one percent (1 %) of the sales price of the property subject to the tax. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. Sec. 35-207. - Adoption of provisions of state law — Generally. Except as otherwise provided in the article and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with § 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this article as though fully set forth herein. Sec. 35-208. - Adoption of provisions of state law — Limitations; Limitations on collection of use taxes. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: 55C-32 (1) Wherever the State of California is named or referred to as the taxing agency, the name of this city shall be substituted therefor. However, the substitution shall not be made when: (A) The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California; (B) The result of that substitution would require action to be taken by or against this city or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this article. (C) In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to: (i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the state under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; (ii) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. (D) In Sections 6701, 6702 (except in the last sentence thereof), 6711, 6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. (2) The word "city" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. Sec. 35-209. - Permit not required. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this article. Sec. 35-210. - Exemptions and exclusions. (1) Measure of Tax. There shall be excluded from the measure of the transactions and use tax the amount of any sales tax or use tax 55C-33 imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state -administered transactions or use tax. (2) Transactions Tax Exemptions. There are exempted from the computation of the amount of transactions tax the gross receipts from: (A) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. (B) Sales of property to be used outside the city which is shipped to a point outside the city, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the city shall be satisfied: (i) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out -of -city address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and (ii) With respect to commercial vehicles, by registration to a place of business out -of -city and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. (C) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date. For the purposes of subsections (2)(C) and (2)(D) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which 55C-34 any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised, (3) Use Tax Exemptions. There are exempted from the use tax imposed by this chapter, the storage, use or other consumption in this city of tangible personal property: (A) The gross receipts from the sale of which have been subject to a transactions tax under any state -administered transactions and use tax ordinance. (B) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.1 of the Revenue and Taxation Code of the State of California. (C) If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee Is obligated to lease the property for an amount fixed by a lease prior to the operative date. For the purposes of subsections (3)(C) and (3)(D) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. (4) Exemption from Collection of Use Tax. Except as provided in subsection (5), a retailer engaged in business in the city shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the city or participates within the city in making the sale of the property, including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the city or through any representative, agent, canvasser, solicitor, subsidiary, or person in the city under the authority of the retailer. 55C-35 (5) Retailer Not Exempt from Collection of Use Tax. "A retailer engaged in business in the city" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the city. (6) Credit Against Use Tax for Transactions Tax Paid Elsewhere. Any person subject to use tax under this chapter may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Sec. 35-211. - Adoption of amendments to state law. All amendments subsequent to the effective date of this chapter to Part 1 of division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this article, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this article. Sec. 35-212. - Enjoining collection prohibited. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against the State or the city, or against any officer of the State or the city, to prevent or enjoin the collection hereunder, or Parts 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. Sec. 35-213. — Termination. The authority set forth in this Article VII to impose a retail transactions and use tax shall continue until such authority is terminated by the voters of the City in the manner provided by law. Sec. 35-214. - Oversight committee. The City Council shall, by resolution establish as citizen oversight committee to act In an advisory role to the City Council In reviewing the annual revenue and expenditures of funds from the tax authorized by this article. The 55C-36 resolution shall establish the committee members' terms, qualifications and duties, and the committee's scope of authority. Sec. 35-215. - Annual Audit. An annual audit of the revenue generated by the sales and use tax and the expenditures made will be conducted by an independent certified public accountant. Sec. 35-216. - Annual Expenditures Disclosure. The City of Santa Ana will publically disclose on an annual basis a list of expenditures made with sales and use tax monies for the preceding fiscal year. Sec. 35-217. — Sunset Provision. On December 31, 2030, the rate of one and one half percent (1.5%) will be reduced to one percent (1 %) until ended by the voters. SECTION 2. Effective Date. Pursuant to the California Constitution Article XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters voting in the election on Measure " " vote in favor of the adoption of such measure, this ordinance shall be deemed valid and binding and shall be considered adopted upon the date that the vote is declared by the City Council, and shall go into effect ten (10) days after that date. SECTION 3. Severability. If any section, sentence, clause or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining provisions of this Ordinance. The People of the City of Santa Ana hereby declare that they would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance be enforced. SECTION 4. Certification/Summary. Following the City Clerk's certification that the citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance and the City Clerk shall cause the same to be entered in the book or original ordinance of said City; and shall cause the same, or a summary thereof, to be published as required by law. PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6t' day of November, 2018. Mayor 55C-37 ATTEST: Maria D. Huizar City Clerk APPROVED AS TO FORM: Sonia R. Carvalho ./ City Attorney 55C-38 RESOLUTION NO. 2018 -XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR THE PLACEMENT ON THE BALLOT OF A MEASURE FOR THE NOVEMBER 6, 2018 GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE REGARDING A GENERAL SALES TAX MEASURE AND PROVIDING FOR THE FILING OF ARGUMENT AND REBUTTAL STATEMENTS WHEREAS, pursuant to California Elections Code section 9222, the City Council has authority to place measures on the ballot to be considered at a General Municipal Election; and WHEREAS, pursuant to the law of the State of California, the City Council has called and ordered to be held in the City of Santa Ana, California, on Tuesday, November 6, 2018, a General Municipal Election; and WHEREAS, Revenue and Taxation Code section 7285.9 authorizes the City of Santa Ana ("City"), subject to approval by a majority vote of the qualified voters of the City voting in an election on the issue, to levy a transactions and use tax pursuant to the Transactions and Use Tax Law at a rate of 0.125% or any multiple thereof for general purposes and projects; and WHEREAS, Section 2(b) of Article XIII C of the California Constitution, added by Proposition 218 effective November, 1996, requires that the measure proposing a general tax be submitted to the voters at an election consolidated with a regularly scheduled general election for members of the governing body of the local government; and WHEREAS, pursuant to California Constitution Article XIII C, section 2 and Elections Code section 10201, the City has determined to submit a proposition to enact an ordinance establishing a transactions and use tax to the voters at the City's next regular election; NOW, THEREFORE the City Council of the City of Santa Ana does hereby resolve as follows: Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct and are hereby incorporated by reference. Section 2. Under the provisions of the California Elections Code, the following proposed amendment to the Santa Ana Municipal Code shall be submitted to the voters at the General Municipal Election to be held on November 6, 2018: Exhibit 3 55C-39 Yes To maintain effective 9-1-1 emergency response services by retaining firefighters, police officers, and paramedics; addressing homelessness/housing concerns and services; fixing potholes/streets; maintaining parks, after school programs, senior services, graffiti removal and unrestricted general revenue purposes; No shall the measure be adopted approving an ordinance establishing a one and one half (1.5%) percent sales tax providing approximately $60 million dollars annually until ended by the voters, requiring annual audits, citizen oversight, all funds only for Santa Ana? Section 3. Should said measure be approved by the requisite vote, the ordinance attached hereto as Exhibit A and incorporated by this reference shall be enacted. Section 4. That the text of the Ordinance to be submitted to the voters is attached to this Resolution as Exhibit "A" and incorporated herein by this reference ("Ordinance"). Section 5. That pursuant to Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Ordinance to the City Attorney to prepare an impartial analysis of the Ordinance which shall not exceed 500 words in length. Section 6. That pursuant to Elections Code Section 9282, the City Council may file a written argument in favor of the Ordinance in accordance with Article 4, Chapter 3, Division 9 of the Elections Code and may change the argument as allowed by law. Section 7. That pursuant to Elections Code Section 9287, if more than one argument for or more than one argument against the Ordinance is submitted to the City Clerk within the time prescribed by law, he or she shall select one of the arguments in favor and one of the arguments against the Ordinance for printing and distribution to the voters, giving preference in such selection in the following order: The City Council, or a member or members of the City Council authorized by the City Council, 2. Bona fide associations of citizens. 3. Individual voters who are eligible to vote on the Ordinance. 55C-40 Section 8, That pursuant to Elections Code Sections 9220 and 9285, when the City Clerk has selected the arguments for and against the Ordinance which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the Ordinance to the author or authors of the argument against, and copies of the argument against the Ordinance to the author or authors of the argument in favor. The author or authors may submit a rebuttal argument to the direct argument not exceeding 250 words. Rebuttal arguments shall be printed in the same manner as the direct arguments and shall immediately follow the direct argument which it seeks to rebut. All previous resolutions providing for the filing of rebuttal arguments for City measures are repealed, and this Section shall only apply to the election on the Ordinance to be held on November 6, 2018. Section 9. In accordance with Section 10002 of the Elections Code, the Board of Supervisors Orange County is hereby requested to consent to the Registrar of Voters rendering election services to the City as may be requested by the City Clerk of said City, the County of Orange to be reimbursed in full for such services as are performed. The Board of Supervisors of Orange County is also requested to consent and agree to the consolidation of the General Election with any other election occurring on November 6, 2018, and the City hereby consents to any such consolidation. Section 10. The election services which the City requests of the Registrar of Voters, or such other official as may be appropriate to perform, and which such officer is hereby authorized and directed to perform if the said Board of Supervisors consents, include: the preparation, printing and mailing of sample ballots and polling place cards, the establishment or appointment of precincts, polling places, and election officers, opening and closing of polling places, and making such publications as are required by law in connection therewith; the furnishing of ballots, voting booths and other necessary supplies or materials for polling places, the canvassing of the returns of the election and the furnishing of the results of such canvassing to the City Clerk, and the performance of such other election services as may be requested by said City Clerk. Section 11. That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m. of the same day when the polls shall be closed, pursuant to California Elections Code Section 10242 and Section 14212, except as provided in California Elections Code Section 14401 or any other provision of law. Section 12. All persons qualified to vote at municipal elections in the City on the day of the election herein provided for shall be qualified to vote on the Ordinance hereby submitted at the General Municipal Election. Section 13. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding general municipal elections in the City. 55C-41 Section 14. Notice of the time and place of holding the General Municipal Election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. Section 15. The City Clerk shall receive the canvass as it pertains to the General Municipal Election, and shall certify the results to this City Council, as required by law. Section 16. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional. Section 17. Pursuant to California Elections Code section 9295, this Resolution and the attached Ordinance will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the sample ballot. The examination period will end on the day that is seventy-five (75) days prior to the date set for the election. Section 18. This Resolution shall take effect immediately upon its adoption by a majority of the City Council. Section 19. The City Clerk of the City of Santa Ana is hereby directed to certify to the passage and adoption of this Resolution and to file a certified copy of this Resolution with the Board of Supervisors of Orange County and the Registrar of Voters of Orange County at least eighty-eight (88) days before the date of the election. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa Ana, California, at its regular meeting held on the ^ day of July, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor 55C-42 ATTEST: Maria D. Huizar City Clerk APPROVED AS TO FORM: Aw-U, A. g Sonia R. Carvalho City Attorney 55C-43 EXHIBIT A ORDINANCE NO. AN ORDINANCE OF THE CITY OF SANTA ANA ADDING ARTICLE VII TO CHAPTER 35 OF THE SANTA ANA MUNICIPAL CODE RELATED TO A TRANSACTIONS AND USE TAX TO BE ADMINISTERED BY THE CALIFORNIA DEPARTMENT OF TAX AND FEE ADMINISTRATION The City Council of the City of Santa Ana does ordain as follows: Section 1. Authority. The City Council and the Voters of the City of Santa Ana enact this Ordinance in accordance with the authority granted to cities by Article XI, Section 7 of the California Constitution and Section 7285.9 of the California Revenue and Taxation Code. Section 2. Addition of article. Article VII is hereby added to Chapter 35 of the Santa Ana Municipal Code to read as follows: ARTICLE VII.- TRANSACTIONS AND USE TAX Sec. 35-200. - Short title. This article shall be known as the "Transactions and Use Tax" and shall be applicable in the incorporated territory of the City of Santa Ana ('city"). Sec. 35-201. - Definitions. For the purpose of this article the following words terms shall have the meaning given in this section: "In the city" means and includes all territory within the city limits. "Operative Date" means the first day of the first calendar quarter commencing more than 110 days after the later of the adoption of this chapter and the approval by the voters of the city of a measure approving the imposition of an increased transactions and use tax; provided that, if the city shall not have entered into a contract with the California Department of Tax and Fee Administration as required by section 35-203. prior to such date, the operative date shall be the first day of the first calendar quarter following the execution of such a contract. Sec. 35-202 - Purpose. This article of the Santa Ana Municipal Code has been adopted for the following purposes, and directs that the provisions hereof be interpreted in order to accomplish those purposes: 55C-44 (1) To impose a retail transactions and use tax in accordance with the provisions of Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code and Section 7285.9 of Part 1.7 of Division 2, which authorizes the city to adopt this tax. This article shall be operative if a majority of the electors voting on the measure vote to approve the imposition of the tax at an election called for that purpose. (2) To adopt a retail transactions and use tax that incorporates provisions identical to those of the Sales and Use Tax Law of the State of California insofar as those provisions are not inconsistent with the requirements and limitations contained in Part 1.6 of Division 2 of the Revenue and Taxation Code. (3) To adopt a retail transactions and use tax that imposes a tax and provides a measure therefor that can be administered and collected by the California Department of Tax and Fee Administration in a manner that adapts itself as fully as practicable to, and requires the least possible deviation from, the existing statutory and administrative procedures followed by the California Department of Tax and Fee Administration in administering and collecting the California State Sales and Use Taxes. (4) To adopt a retail transactions and use tax that can be administered in a manner that will, to the greatest degree possible, be consistent with the provisions of Parts 1.6 of Division 2 of the said Revenue and Taxation Code, and thereby minimize the cost of collecting city transactions and use taxes, and at the same time minimize the burden of record keeping upon persons subject to taxation under the provisions thereof. Sec. 35-203. - Contract with state. Prior to the operative date, the city shall contract with the California Department of Tax and Fee Administration to pertomi all functions incidental to the administration and operation of this transactions and use tax ordinance. If the city has not contracted with the California Department of Tax and Fee Administration prior to the operative date, it shall nevertheless so contract and in such a case the operative date shall be the first day of the first calendar quarter following the execution of such a contract. The city council may make any technical amendments to this article required bythe California Department of Tax and Fee Administration, except for any changes affecting the tax rate, tax methodology, or its manner of collection. Sec. 35-204. - Imposition of transactions and use tax — Rate. For the privilege of selling tangible personal property at retail, a tax is hereby imposed upon all retailers in the incorporated territory of the city 55C-45 at the rate of one and a half percent (1.5%) of any gross receipts of the retailer from the sale of all tangible personal property sold at retail in the city on and after the operative date of this chapter. Sec. 35-205. - Place of sale. For the purposes of this article, all retail sales are consummated at the place of business of the retailer, unless the tangible personal property sold is delivered by the retailer or his agent to an out-of-state destination or to a common carrier for delivery to an out-of-state destination. The gross receipts from such sales shall include delivery charges, when such charges are subject to the state sales and use tax, regardless of the place to which delivery is made. In the event a retailer has no permanent place of business in the state or has more than one place of business, the place or places at which the retail sales are consummated shall be determined under rules and regulations to be prescribed and adopted by the California Department of Tax and Fee Administration. Sec. 35-206. - Imposition of use tax— Use tax rate. An excise tax is hereby imposed on the storage, use, or other consumption in the city of tangible personal property purchased from any retailer on or after the operative date of this article, at the rate of one and a half percent (1.5%) of the sales price of the property subject to the tax. The sales price shall include delivery charges when such charges are subject to state sales or use tax regardless of the place to which delivery is made. Sec. 35-207. - Adoption of provisions of state law — Generally. Except as otherwise provided in the article and except insofar as they are inconsistent with the provisions of Part 1.6 of Division 2 of the Revenue and Taxation Code, all of the provisions of Part 1 (commencing with § 6001) of Division 2 of the Revenue and Taxation Code are hereby adopted and made a part of this article as though fully set forth herein. Sec. 35-208. - Adoption of provisions of state law — Limitations; Limitations on collection of use taxes. In adopting the provisions of Part 1 of Division 2 of the Revenue and Taxation Code: (1) Wherever the State of California is named or referred to as the taxing agency, the name of this city shall be substituted therefor. However, the substitution shall not be made when: (A) The word "State" Is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California; 55C-46 (A) The word "State" is used as a part of the title of the State Controller, State Treasurer, State Board of Control, State Board of Equalization, State Treasury, or the Constitution of the State of California; (B) The result of that substitution would require action to be taken by or against this city or any agency, officer, or employee thereof rather than by or against the California Department of Tax and Fee Administration, in performing the functions incident to the administration or operation of this article. (C) In those sections, including, but not necessarily limited to sections referring to the exterior boundaries of the State of California, where the result of the substitution would be to; (i) Provide an exemption from this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not otherwise be exempt from this tax while such sales, storage, use or other consumption remain subject to tax by the state under the provisions of Part 1 of Division 2 of the Revenue and Taxation Code, or; (ii) Impose this tax with respect to certain sales, storage, use or other consumption of tangible personal property which would not be subject to tax by the state under the said provision of that code. (D) In Sections 6701, 6702 (except in the last sentence thereof), 6711,-6715, 6737, 6797 or 6828 of the Revenue and Taxation Code. (2) The word "city" shall be substituted for the word "State" in the phrase "retailer engaged in business in this State" in Section 6203 and in the definition of that phrase in Section 6203. Sec. 35-209 - Permit not required. If a seller's permit has been issued to a retailer under Section 6067 of the Revenue and Taxation Code, an additional transactor's permit shall not be required by this article. Sec. 35-210. - Exemptions and exclusions. (1) Measure of Tax. There shall be excluded from the measure of the transactions and use tax the amount of any sales tax or use tax imposed by the State of California or by any city, city and county, or county pursuant to the Bradley -Burns Uniform Local Sales and Use Tax Law or the amount of any state -administered transactions or use tax. 55C-47 (2) Transactions Tax Exemptions. There are exempted from the computation of the amount of transactions tax the gross receipts from: (A) Sales of tangible personal property, other than fuel or petroleum products, to operators of aircraft to be used or consumed principally outside the county in which the sale is made and directly and exclusively in the use of such aircraft as common carriers of persons or property under the authority of the laws of this State, the United States, or any foreign government. (B) Sales of property to be used outside the city which is shipped to a point outside the city, pursuant to the contract of sale, by delivery to such point by the retailer or his agent, or by delivery by the retailer to a carrier for shipment to a consignee at such point. For the purposes of this paragraph, delivery to a point outside the city shall be satisfied: (i) With respect to vehicles (other than commercial vehicles) subject to registration pursuant to Chapter 1 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, and undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code by registration to an out -of -city address and by a declaration under penalty of perjury, signed by the buyer, stating that such address is, in fact, his or her principal place of residence; and (ii) With respect to commercial vehicles, by registration to a place of business out -of -city and declaration under penalty of perjury, signed by the buyer, that the vehicle will be operated from that address. (C) The sale of tangible personal property if the seller is obligated to furnish the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) A lease of tangible personal property which is a continuing sale of such property, for any period of time for which the lessor is obligated to lease the property for an amount fixed by the lease prior to the operative date. For the purposes of subsections (2)(C) and (2)(D) of this section, the sale or lease of tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. 55C-48 (3) Use Tax Exemptions. There are exempted from the use tax imposed by this article, the storage, use or other consumption in this city of tangible personal property: (A) The gross receipts from the sale of which have been subject to a transactions tax under any state -administered transactions and use tax ordinance. (B) Other than fuel or petroleum products purchased by operators of aircraft and used or consumed by such operators directly and exclusively in the use of such aircraft as common carriers of persons or property for hire or compensation under a certificate of public convenience and necessity issued pursuant to the laws of this State, the United States, or any foreign government. This exemption is in addition to the exemptions provided in Sections 6366 and 6366.9 of the Revenue and Taxation Code of the State of California. (C) If the purchaser is obligated to purchase the property for a fixed price pursuant to a contract entered into prior to the operative date. (D) If the possession of, or the exercise of any right or power over, the tangible personal property arises under a lease which is a continuing purchase of such property for any period of time for which the lessee is obligated to lease the property for an amount fixed by a lease prior to the operative date. For the purposes of subsections (3)(C) and (3)(D) of this section, storage, use, or other consumption, or possession of, or exercise of any right or power over, tangible personal property shall be deemed not to be obligated pursuant to a contract or lease for any period of time for which any party to the contract or lease has the unconditional right to terminate the contract or lease upon notice, whether or not such right is exercised. (4) Exemption from Collection of Use Tax. Except as provided In subsection (5), a retailer engaged in business in the city shall not be required to collect use tax from the purchaser of tangible personal property, unless the retailer ships or delivers the property into the city or participates within the city in making the sale of the property, Including, but not limited to, soliciting or receiving the order, either directly or indirectly, at a place of business of the retailer in the city or through any representative, agent, canvasser, solicitor, subsidiary, or person in the city under the authority of the retailer. (5) Retailer Not Exempt from Collection of Use Tax. "A retailer engaged in business in the city" shall also include any retailer of any of the following: vehicles subject to registration pursuant to Chapter 1 55C-49 (commencing with Section 4000) of Division 3 of the Vehicle Code, aircraft licensed in compliance with Section 21411 of the Public Utilities Code, or undocumented vessels registered under Division 3.5 (commencing with Section 9840) of the Vehicle Code. That retailer shall be required to collect use tax from any purchaser who registers or licenses the vehicle, vessel, or aircraft at an address in the city. (6) Credit Against Use Tax for Transactions Tax Paid Elsewhere. Any person subject to use tax under this article may credit against that tax any transactions tax or reimbursement for transactions tax paid to a district imposing, or retailer liable for a transactions tax pursuant to Part 1.6 of Division 2 of the Revenue and Taxation Code with respect to the sale to the person of the property the storage, use or other consumption of which is subject to the use tax. Sec. 35-211. - Adoption of amendments to state law. All amendments subsequent to the effective date of this article to Part 1 of Division 2 of the Revenue and Taxation Code relating to sales and use taxes and which are not inconsistent with Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, and all amendments to Part 1.6 and Part 1.7 of Division 2 of the Revenue and Taxation Code, shall automatically become a part of this article, provided however, that no such amendment shall operate so as to affect the rate of tax imposed by this article. Sec. 35-212.- Enjoining collection prohibited. No injunction or writ of mandate or other legal or equitable process shall issue in any suit, action, or proceeding in any court against the State or the city, or against any officer of the State or the city, to prevent or enjoin the collection hereunder, or Parts 1.6 of Division 2 of the Revenue and Taxation Code, of any tax or any amount of tax required to be collected. Sec. 35-213. — Termination. The authority set forth in this article to impose a retail transactions and use tax shall continue until such authority is terminated by the voters of the City in the manner provided by law. Sec. 35-214. - Oversight committee. The City Council shall, by resolution establish as citizen oversight committee to act in an advisory role to the City Council in reviewing the annual revenue and expenditures of funds from the tax authorized by this article. The resolution shall establish the committee members' terms, qualifications and duties, and the committee's scope of authority. 55C-50 Sec. 35-215. - Annual Audit. An annual audit of the revenue generated by the sales and use tax and the expenditures made will be conducted by an independent certified public accountant. Sec. 35-216. - Annual Expenditures Disclosure. The City of Santa Ana will publically disclose on an annual basis a list of expenditures made with sales and use tax monies for the preceding fiscal year. SECTION 2. Effective Date, Pursuant to the California Constitution Article XIIIC(2)(b) and California Elections Code 9217, if the requisite number of qualified voters voting in the election on Measure " " vote in favor of the adoption of such measure, this ordinance shall be deemed valid and binding and shall be considered adopted upon the date that the vote is declared by the City Council, and shall go Into effect ten (10) days after that date. SECTION 3. Severability. If any section, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of a court of competent jurisdiction, such decision shall not affect the validity of the remaining provisions of this Ordinance. The People of the City of Santa Ana hereby declare that they would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance be enforced. SECTION 4. Certification/Summary. Following the City, Clerk's certification that the citizens of Santa Ana have approved this Ordinance, the Mayor shall sign this Ordinance and the City Clerk shall cause the same to be entered in the book or original ordinance of said City; and shall cause the same, or a summary thereof, to be published as required by law. PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6th day of November, 2018. ATTEST: Maria D. Huizar City Clerk Mayor 55C-51 APPROVED AS TO FORM: Sonia R. Carvalho City Attorney 55C-52 REQUEST FOR' COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: DIRECT STAFF TO PLACE A PROPOSED COMMERCIAL CANNABIS BUSINESS LICENSE TAX MEASURE FOR PUBLIC CONSIDERATION ON THE NOVEMBER 6, 2018 BALLOT; APPROVE RESOLUTION, AUTHORIZE AND DESIGNATE CITY COUNCILMEMBERS TO AUTHOR AND FILE ARGUMENT IN FAVOR; AND OTHER RELATED DOCUMENTS CALLING FOR GENERAL MUNICIPAL ELECTION ACCORDINGLY (STRATEGIC PLAN NO. 5, 1) � r CITY 0, NAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Direct staff to move forward with placing a commercial cannabis business license tax measure on the ballot as provided for in staff report, and approve actions accordingly. Adopt Resolution of the City Council of the City of Santa Ana Calling for a General Municipal Election on November 6, 2018 and the Placement on the Ballot of a Measure for the November 6, 2018 General Municipal Election for the Submission to the Qualified Voters of a Proposed Ordinance Regarding a Commercial Cannabis Business License Tax and Requesting that the Orange County Board of Supervisors Consolidate the City's General Municipal Election with the Statewide General Election to Take Place on November 6, 2018; and Providing for the Filing of Argument and Rebuttal Statements 2. Authorize the filing of Arguments and Rebuttal Statements a. Designate up to five (5) Councilmembers to author an Argument and Rebuttal Statement. 3. Direct City Attorney to prepare Impartial Analysis. 4. Direct Clerk of the Council to publish legal notices as required by law. DISCUSSION On November 4, 2014, Santa Ana voters approved Santa Ana's Medical Marijuana Regulatory Program ordinance ("Measure BB") with an overwhelming 66% approval, making Santa Ana the first jurisdiction in Orange County to license and relate riedical marijuana collectives. The Ordinance Proposed Commercial Cannabis Business Taxation Ballot Measure for Public Consideration on the November 2018 Ballot July 3, 2018 Page 2 (NS -2864), codified in sections of chapters 18 (regulations) and 21 (taxation) of the Santa Ana Municipal Code (SAMC), resulting in the passage of this measure regulated the location, operation and establishment of medical marijuana collectives in the city of Santa Ana. The ordinance provided for the establishment/permitting of 20 medical marijuana collectives and proposed to address the proliferation of illegal marijuana dispensaries throughout the City. This also provided the City with a mechanism to close illegal dispensaries and address associated public health and safety concerns due to a lack of resources. Following the adoption of Measure BB, the City established an implementation plan, enforcement program, administrative policies, and best practices. In November 2016, the majority of voters in California (57%) and in Santa Ana (52%) approved Proposition 64, the California marijuana legalization initiative, also known as the Adult Use of Marijuana Act (AUMA). The AUMA immediately legalized the possession, use, and cultivation of up to six mature cannabis plants at a residence for personal use. Following Proposition 64's passage, the California legislature adopted SB 94 which merged and streamlined many of the standards and license types for medicinal- and adult -use cannabis. Both Proposition 64 and SB 94 provide for the following types of commercial cannabis activities: • Laboratory Testing • Manufacturing/Processing • Distribution (Wholesale) • Cultivation • Retail • Microbusiness Significance and Enforcement Background Following the passage of Proposition 64, local jurisdictions such as the City of Santa Ana (City) were required to adopt an ordinance to establish a regulatory framework for cannabis related activities. If the City failed to adopt an ordinance on commercial cannabis activities by January 1, 2018, the local jurisdictions risked reduced control over local land decisions and commercial cannabis businesses may have been able to operate without requiring local approvals. On November 21, 2017, the City Council adopted an ordinance that created a new chapter (Chapter 40) to regulate adult -use retail cannabis business activities. The City and its community have benefited from the successes brought by Measure BB. Through Measure BB, the City has been able to responsibly allow and regulate the medicinal cannabis retail industry. Measure BB has generated significant revenue through gross receipts taxes that have funded enforcement efforts by the Santa Ana Police Department, Code Enforcement, the City Attorney's Office, and the Finance & Management Services Agency. Of the roughly 120 illegal dispensaries open prior to Measure BB, 85 percent were successfully shutdown and additional properties are in receivership in an effort to close outstanding illegal operators. In 2017 alone, the enforcement efforts effectively closed 67 illegal dispensary locations. 55D-2 Proposed Commercial Cannabis Business Taxation Ballot Measure for Public Consideration on the November 2018 Ballot July 3, 2018 Page 3 Current Regulations Related to Marijuana/Cannabis Since its adoption in late 2017, the ordinance has been modified twice in March and April 2018 to allow laboratory testing and non -retail commercial cannabis business activities, including distribution, manufacturing, and cultivation, respectively. The chart below outlines the major regulation elements for Medical Marijuana and Adult Use Cannabis activities in the City of Santa Ana. Topic Permitted Cannabis Uses Retail Sale — Adult Use Testing for quality control purposes — Adult and Medicinal Indoor Cultivation — Adult and Medicinal Manufacturing Distribution • Medicinal Use Retail Sales will continue to be regulated by Measure BB • All other uses will be regulated through Chapter 40 Prohibited Cannabis Uses Outdoor Cultivation — Adult and Medicinal Microbusinesses — Adult and Medicinal Permitted Zoning Districts M-1 Light Industrial M-2 Heavy Industrial Cannabis Businesses are prohibited in all other zoning districts. Maximum Number of A maximum number of permits will be issued for the various Permits types of licenses. 30 Retail Sale—Adult No cap Testing for quality control purposes — Adult and Medicinal No cap Indoor Cultivation —Adult and Medicinal No cap Manufacturing No cap Distribution • It is anticipated that a business may hold permits for multiple uses. • Testing facilities cannot hold any other license. • 20 Medicinal Retail Sale permits to continue under Measure BB Separation Requirements 1,000 feet From schools, parks or existing residential zoning districts 500 feet Between retail cannabis businesses No separation Between non -retail cannabis businesses 5501-3 Proposed Commercial Cannabis Business Taxation Ballot Measure for Public Consideration on the November 2018 Ballot July 3, 2018 Page 4 Direction to Pursue a Ballot Measure for Cannabis Uses Following the adoption of the ordinances to regulate Adult Use and Commercial Cannabis, the City Council directed staff to prepare a ballot measure for consideration by the voters to tax the newly allowed uses for the November 6, 2018 ballot. Due to the timing with the passage of Prop 64 and SB 94, there was insufficient time to prepare a ballot measure for adoption by the voters at a primary or general election. Thus, staff recommended that in the interim, any cannabis operators that choose to begin business operations would be required to enter into an Operating Agreement with the City. The Operating Agreement provided for implementation of a community benefits programs, outlined operating requirements, and provided a mechanism to collect fees. Proposed Tax and Structure When Measure BB was approved by the voters, a gross receipts business license tax was assessed on dispensaries that were permitted to operate in the City. This structure was utilized as the sale of medical marijuana could be captured through the receipt of sale, similar to other type retail uses. To date there are 19 medical marijuana operators in the City. Most opened during calendar years 2016 and 2017, as operator tenant improvements took longer than anticipated. This delay resulted in reduced tax revenue and original revenue projections had to be adjusted. Staff is recommending new adult use and commercial cannabis, create a base rate utilizing square footage or a gross receipts rate; with only the higher of the two being collected. This will ensure that licenses that are issued will generate a minimum revenue for the City. Additionally, by establishing a base rate for the retail type uses, it encourage operators to begin utilizing a license and delaying their operation from opening. Every cannabis business, excepting a qualified "nonprofit organization," shall pay a separate business license tax at a rate of up to ten (10) percent of the gross receipts generated or otherwise received for each branch establishment or separate property location of the business or a rate of up to $35.00 per gross square foot for each branch establishment or separate property location of the business, whichever is greater. The gross receipts/gross square footage tax shall be initially set based on cannabis business activity at the rates set forth below: Commercial Cannabis Business Activity Gross Receipts Gross Square Rate Footage Rate Adult -use Cannabis Retail Business 8% $ 25.00 Cultivation 6% $ 10.00 55D-4 Proposed Commercial Cannabis Business Taxation Ballot Measure for Public Consideration on the November 2018 Ballot July 3, 2018 Page 5 Distribution 6% $ 4.00 Manufacturing 6% $ 10.00 Testing Facility or Testing Laboratory 5% $ 1.50 As a part of the Fiscal Year 2018/2019 Proposed Budget, staff incorporated the revenue projections from the Operating Agreements and the proposed ballot measure. If the proposed ballot measure is approved by the voters, the Operating Agreements would be modified to eliminate the fee provision. Additionally, allocation of the commercial cannabis has been appropriated 1/3 to youth services reserve appropriations, 1/3 to enforcement reserve appropriations, and 1/3 to the general fund and administration. Staff Recommendation Staff recommends City Council approve adding the commercial cannabis business license tax measure for public consideration on the November 2018 ballot. This ballot measure, if approved by the voters, will ensure that the revenues generated by the sale and allowable use activities, will be collected and allocated appropriately. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT The County Registrar of Voters office has estimated that the additional cost of adding a ballot measure to the City's consolidated general municipal election would be approximately $18,000. Funds for these administrative costs are available in the Clerk of the Council, Contractual Services account no. 01107031 62300, FY 2018-2019. APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director Finance and Management Services Agency 55D-5 55D-6 Proposed Commercial Cannabis Business Taxation Ballot Measure for Public Consideration on the November 2018 Ballot July 3, 2018 Page 6 Exhibits: 1. Resolution of the City Council of the City of Santa Ana Calling for a General Municipal Election on November 6, 2018 and the Placement on the Ballot of a Measure for the November 6, 2017 General Municipal Election for the Submission to the Qualified Voters of a Proposed Ordinance Regarding a Commercial Cannabis Business License Tax and Requesting that the Orange County Board of Supervisors Consolidate the City's General Municipal Election with the Statewide General Election to Take Place on November 6, 2018; and Providing for the Filing of Argument and Rebuttal Statements; and Proposed Ordinance of the City of Santa Ana City Council Adding Article XIII to Chapter 21 of the City of Santa Ana Municipal Code Related to a Commercial Cannabis Business License Tax Imposed for General Municipal Purposes, Subject to the Approval of a Majority of the Voters Voting at the General Municipal Election Held on November 6, 2018. 55D-7 55D-8 LAR 7.3.18 RESOLUTION NO. 2018 -XXX RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CALLING FOR A GENERAL MUNICIPAL ELECTION ON NOVEMBER 6, 2018 AND THE PLACEMENT ON THE BALLOT OF A MEASURE FOR THE NOVEMBER 6, 2018 GENERAL MUNICIPAL ELECTION FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF A PROPOSED ORDINANCE REGARDING A COMMERCIAL CANNABIS BUSINESS LICENSE TAX AND REQUESTING THAT THE ORANGE COUNTY BOARD OF SUPERVISORS CONSOLIDATE THE CITY'S GENERAL MUNICIPAL ELECTION WITH THE STATEWIDE GENERAL ELECTION TO TAKE PLACE ON NOVEMBER 6, 2018; AND PROVIDING FOR THE FILING OF ARGUMENT AND REBUTTALSTATEMENTS BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. A general municipal election of the City of Santa Ana will be held on November 6, 2018, for the purposes of electing the Mayor and Councilmembers from Wards 2, 4, and 6. B. There will be a statewide general election held on November 6, 2018. C. It is desirable that the general municipal election of the City of Santa Ana on November 6, 2018 be consolidated with the statewide general election to be held on the same date and; that within the City of Santa Ana, the precincts, polling places and charter amendment be the same, and that the Board of Supervisors of the County of Orange canvass the returns of both elections, in all respects as if there were only one election. D. The Clerk of Council is authorized, instructed, and directed to give further notice of the election, in time, form and manner as required by law. Section 2. The California Elections Code directs the City Council approve the form of the ballot question to be submitted to the voters and the City of Santa Ana desires, on its own motion, to submit to the voters a question of whether the City should place on the ballot a measure for a proposed Ordinance regarding a commercial cannabis business license tax, to be submitted to the voters at the General Election to be held on Tuesday, November 6, 2018. 55D-9 Section 3. The ballot question for the proposed Ordinance shall be as follows, with identification as determined in accordance with the California Elections Code: MEASURE # I Yes Shall Chapter 21 of the Santa Ana Municipal Code be amended to enact both a gross square footage tax of between 25 cents to $35.00 and a gross receipts tax rate up to 10% for cultivating, manufacturing, distributing, selling or testing cannabis and related products to raise between $8 to $12 million to fund public safety, No parks, youth and senior services, among other general City services? Section 4. Should said measure be approved by the requisite vote, the Ordinance adding Article XIII to Chapter 21 attached hereto as Exhibit A and incorporated by this reference shall be enacted. Section 5. That the text of the Ordinance to be submitted to the voters is attached to this Resolution as Exhibit A and incorporated herein by this reference ("Ordinance"). Section 6. That pursuant to Elections Code Section 9280, the City Council hereby directs the City Clerk to transmit a copy of the Ordinance to the City Attorney to prepare an impartial analysis of the Ordinance which shall not exceed 500 words in length. Section 7. That pursuant to Elections Code Section 9282, the City Council may file a written. argument in favor of the Ordinance in accordance with Article 4, Chapter 3, Division 9 of the Elections Code and may change the argument as allowed by law. Section 8. That pursuant to Elections Code Section 9287, if more than one argument for or more than one argument against the Ordinance is submitted to the City Clerk within the time prescribed by law, he or she shall select one of the arguments in favor and one of the arguments against the Ordinance for printing and distribution to the voters, giving preference in such selection in the following order: 1. The City Council, or a member or members of the City Council authorized by the City Council. 2. Bona fide associations of citizens. 3. Individual voters who are eligible to vote on the Ordinance. 55D-10 Section 9. That pursuant to Elections Code Sections 9220 and 9285, when the City Clerk has selected the arguments for and against the Ordinance which will be printed and distributed to the voters, the City Clerk shall send copies of the argument in favor of the Ordinance to the author or authors of the argument against, and copies of the argument against the Ordinance to the author or authors of the argument in favor. The author or authors may submit a rebuttal argument to the direct argument not exceeding 250 words. Rebuttal arguments shall be printed in the same manner as the direct arguments and shall immediately follow the direct argument which it seeks to rebut. All previous resolutions providing for the filing of rebuttal arguments for City measures are repealed, and this Section shall only apply to the election on the Ordinance to be held on November 6, 2018. Section 10. In accordance with Section 10002 of the Elections Code, the Board of Supervisors Orange County is hereby requested to consent to the Registrar of Voters rendering election services to the City as may be requested by the City Clerk of said City, the County of Orange to be reimbursed in full for such services as are performed. The Board of Supervisors of Orange County is also requested to consent and agree to the consolidation of the General Election with any other election occurring on November 6, 2018, and the City hereby consents to any such consolidation. Section 11. The election services which the City requests of the Registrar of Voters, or such other official as may be appropriate to perform, and which such officer is hereby authorized and directed to perforrn if the said Board of Supervisors consents, include: the preparation, printing and mailing of sample ballots and polling place cards, the establishment or appointment of precincts, polling places, and election officers, opening and closing of polling places, and making such publications as are required by law in connection therewith; the furnishing of ballots, voting booths and other necessary supplies or materials for polling places, the canvassing of the returns of the election and the furnishing of the results of such canvassing to the City Clerk, and the performance of such other election services as may be requested by said City Clerk. Section 12, That the polls for the election shall be open at seven o'clock a.m. of the day of the election and shall remain open continuously from that time until eight o'clock p.m. of the same day when the polls shall be closed, pursuant to California Elections Code Section 10242 and Section 14212, except as provided in Califomia Elections Code Section 14401 or any other provision of law. Section 13. All persons qualified to vote at municipal elections in the City on the day of the election herein provided for shall be qualified to vote on the Ordinance hereby submitted at the General Municipal Election. Section 14. In all particulars not recited in this Resolution, the election shall be held and conducted as provided by law for holding general municipal elections in the City. 55D-11 Section 15, Notice of the time and place of holding the General Municipal Election is given and the City Clerk is authorized, instructed and directed to give further or additional notice of the election, in the time, form and manner as required by law. Section 16. The City Clerk shall receive the canvass as it pertains to the General Municipal Election, and shall certify the results to this City Council, as required by law. Section 17. If any section, subsection, sentence, clause, phrase or provision of this Resolution or the application thereof to any person or circumstances is held invalid or unconstitutional by any court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity of any other provision or applications, and to this end the provisions of this Resolution are declared to be severable. The City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause, phrase or provision thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases or provisions thereof be declared invalid or unconstitutional. Section 18. Pursuant to California Elections Code section 9295, this Resolution and the attached Ordinance will be available for public examination for no fewer than ten (10) calendar days prior to being submitted for printing in the sample ballot. The examination period will end on the day that is seventy-five (75) days prior to the date set for the election, Section 19. This Resolution shall take effect immediately upon its adoption by a majority of the City Council. Section 20. 'The City Clerk of the City of Santa Ana is hereby directed to certify to the passage and adoption of this Resolution and to file a certified copy of this Resolution with the Board of Supervisors of Orange County and the Registrar of Voters of Orange County at least eighty-eight (88) days before the date of the election. PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa Ana, California, at its regular meeting held on the _ day of July, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor 55D-12 ATTEST: Maria D. Huizar City Clerk APPROVED AS TO FORM: Sonia R. Carvalho City Attorney By: 80"..x • 1n. - Laura A. Rossini Senior Assistant City Attorney 55D-13 Exhibit A CITY OF SANTA ANA PROPOSED ORDINANCE NO. NS - AN ORDINANCE OF THE CITY OF SANTA ANA CITY COUNCIL ADDING ARTICLE XIII TO CHAPTER 21 OF THE CITY OF SANTA ANA MUNICIPAL CODE RELATED TO A COMMERCIAL CANNABIS BUSINESS LICENSE TAX IMPOSED FOR GENERAL MUNICIPAL PURPOSES, SUBJECT TO THE APPROVAL OF A MAJORITY OF THE VOTERS VOTING AT THE GENERAL MUNICIPAL ELECTION HELD ON NOVEMBER 6, 2018 WHEREAS, in November 2016, the California Marijuana Legalization Initiative, also known as the Adult Use of Marijuana Act (AUMA or Proposition 64) was approved by the voters of the State of California. The AUMA legalized recreational marijuana. WHEREAS, in 2017, the Governor signed into law Senate Bill 94 also known as Medicinal and Adult -Use Cannabis Regulation and Safety Act (MAUCRSA) establishing state regulations and licensing for retail sales, manufacturing, distribution, delivery and testing of adult -use (also called recreational) marijuana. WHEREAS, on November 9, 2017, the City Council created Chapter 40 of the Santa Ana Municipal Code, allowing adult -use commercial cannabis retail businesses in the city, and amended certain sections of Chapters 18 and 21 of the Santa Ana Municipal Code to ensure consistency with State law and Chapter 40. Since 2014, the City has allowed medicinal marijuana collectives/cooperatives to operate within the City pursuant to regulations set forth in Chapter 18 and Chapter 21 of the Santa Ana Municipal Code. WHEREAS, on March 20, 2018, the City Council adopted Ordinance NS -2941 and NS -2942, allowing and regulating commercial cannabis testing laboratories. WHEREAS, on May 1, 2018, the City Council adopted Ordinance NS -2944 allowing and regulating commercial cannabis manufacturing, distribution, and cultivation. WHEREAS, a general business license tax based on the gross receipts derived from commercial cannabis businesses and gross square footage would generate essential funds for protecting vital City services and facilities and place such businesses on more equal footing with existing City businesses, including medical marijuana businesses which already pay a business license tax; and WHEREAS, the City Council is authorized to impose general and special taxes in order to fund municipal services and facilities, subject to requisite voter approval as set forth in Government Code section 53720. 5501-14 NOW, THEREFORE, the City of Santa Ana City Council does hereby ordain as follows: SECTION 1. Recitals. The above recitals are hereby found to be true and accurate and are incorporated into this Ordinance by this reference. SECTION 2. Amendment. Article XIII is hereby added to Chapter 21 of the City of Santa Ana Municipal Code to read in full as set forth in Exhibit A-1, attached hereto and incorporated by reference. SECTION 3. Voter Approval. Article XIII as added to Chapter 21 of the Santa Ana Municipal Code by this proposed Ordinance shall impose a general tax as defined by Government Code section 53723, and therefore must be approved by a majority of voters voting in an election on the tax. Approval of this Ordinance is therefore subject to and conditioned upon the approval by the voters of the imposition of the general tax imposed by this Ordinance. If a majority of the voters voting in the election do not vote in favor of the imposition of the tax, this ordinance shall not take effect. SECTION 4. Severability. If any provision of this Ordinance or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions of applications of the Ordinance that can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. This City Council hereby declares that it would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof and intends that the invalid portions should be severed and the balance of the Ordinance be enforced. SECTION. 6. Effective Date. After its adoption by the voters, this Ordinance shall be in full force and effect ten (10) days after the vote is declared by the legislative body, pursuant to the provisions of Elections Code sections 9217 and 15400 and as provided by law. PASSED, APPROVED, and ADOPTED by the People of the City of Santa Ana this 6th day of November, 2018. ATTEST: Maria D. Huizar Clerk of Council Miguel A. Pulido Mayor 5501-15 APPROVED AS TO FORM: Sonia R. Carvalho City Attorney 55D-16 EXHIBIT A-1 ARTICLE XIII. COMMERCIAL CANNABIS BUSINESSES Sec. 21-132. Purpose. This article is required for the purpose of fixing the rate of taxation for commercial cannabis businesses including delivery, distribution, manufacturing, cultivation, testing and retail sales of cannabis and related products. This article does not apply to medical marijuana collectives/cooperatives (also referred to as medicinal cannabis retail businesses) which are subject to a business license tax under article XII of this chapter. The taxes required to be paid under this article are declared to be required pursuant to the taxing power of the City of Santa Ana solely for the purpose of obtaining revenue and are not regulatory permit fees. Sec. 21-133. Commercial cannabis businesses—Annual business license tax assessment. Every person engaged in a "commercial cannabis business" or "commercial cannabis activity' shall pay an annual business license tax as outlined below. This article shall not apply to medical marijuana cooperatives/collectives also referred to as medicinal cannabis retail businesses which are governed by article XII of this chapter or to personal cultivation as defined in section 18-611(n) of this code. (a) For each branch establishment or separate property location of a commercial cannabis business transacted and carried on in the city, and for each separate type of commercial cannabis business conducted at the same location, the higher of the two (2) following tax rates shall be due to the city for each monthly reporting period: (1) Up to ten percent (10%) of each dollar of gross receipts received or generated for each monthly reporting period. (2) Up to $35.00 per square foot (annual tax rate) prorated monthly to one - twelfth (1/12th) of the annual tax rate amount. (b) These tax rates shall not be adjusted for inflation pursuant to section 21-121 of this chapter. (c) Notwithstanding the tax rates imposed herein under subsection (a), the city council may, in its discretion, at any time by resolution implement any lower tax rate it deems appropriate, and may by resolution increase such tax rate from time to time, not to exceed the maximum rates established by subsection (a). 55D-17 (d) As of the operative date of this article, the business license gross receipts tax rates and square footage tax rates application to specific commercial cannabis business activities shall be established as follows: Commercial Cannabis Business Gross Receipts Gross Square Activity Tax Rate Footage Tax Rate Adult -use Cannabis Retail 8% $ 25.00 Business (including Delivery) Cultivation 6% $ 10.00 Distribution 6% $ 4.00 Manufacturing 6% $ 10.00 Testing Facility or Testing 5% $ 1.50 Laboratory Commercial cannabis businesses not having a fixed place of business within the city but conducting regular, non -incidental commercial cannabis business activities within the city shall be subject to the gross receipts tax rate(s) as set out in the table above based on the category/categories of commercial cannabis activity conducted. However, such out-of-town commercial cannabis businesses shall not be subject to any gross square footage tax rate(s). (e) As part of the annual gross receipts/square footage tax(es) imposed by this article, each commercial cannabis business located within the city shall pay a minimum basic rate of two thousand dollars ($2,000.00) annually for each branch establishment or separate property location of the commercial cannabis business transacted and carried on in the city, and for each separate type of commercial cannabis business conducted at the same location. Commercial cannabis businesses having no fixed place of business within the city shall be exempted from this requirement. (f) In the event the city should in the future permit additional categories of commercial cannabis business activity, as may from time to time be licensed by the State of California, such categories of commercial cannabis activates shall be subject to the same maximum tax rates as imposed herein. The city may by ordinance of the city council initially set the required gross receipts/gross square footage tax rates based on category of cannabis business activity at lesser rates as may be deemed appropriate by the city council. `a 55D-18 (g) For purposes of this article, a commercial cannabis business is not considered to be a business or person having a "specified exemption" or "specified exclusion" from business license taxation as set forth in sections 21-48 and 21-49 of this chapter. (h) For purposes of this article any person claiming an exemption from the gross receipts tax rate component of the combined gross receipts/square footage tax imposed under this article on the basis of a claim of being a qualified "nonprofit organization" shall have the burden of substantiating their claim to the same extent and in the same manner as a marijuana collective/cooperative in accordance with section 21-127(a)(6) of this chapter. (i) Cannabis businesses shall not pass the taxes imposed by this article through to an adult -use cannabis retail business customer or commercial cannabis business customer in any fashion except as part of the basic product sales andlor service price. Q) Definitions. For purposes of this article, the following terms have the following meanings: (1) "Adult -Use cannabis retail business" as defined in section 40-2(4) of this code. (2) "Commercial Cannabis Activity" as defined in section 40-2(9) of this code. (3) "Commercial cannabis business" as defined In section 40-2(10) of this code excluding medical marijuana collectives/cooperatives also referred to as medicinal cannabis retail sales. (4) "Cultivation" as defined in section 40-2(11) of this code. (5) "Delivery" as defined in section 40-2(13) of this code. (6) "Distribution" as defined in section 40-2(16) of this code. (7) "Gross receipts" — section 21-3 of this chapter notwithstanding, "gross receipts" for the purposes of this article shall mean: (A) Transfer of title or possession, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration including any monetary consideration for cannabis, including, but not limited to, membership dues, reimbursements provided by members, regardless of form, or the total amount of cash or in-kind contributions, including all operating costs related to the growth, cultivation, manufacturing, distribution, testing, or provision of cannabis or any transaction related thereto. (B) Anything else of value obtained by an a cannabis business; 3 5501-19 (C) The total amount of the sale price of all sales and services; (D) The total amount charged or received for the performance of any act, service or employment of whatever nature it may be, whether or not such service, act or employment is done as a part of or in connection with the sale of goods, wares, or merchandise (whether at wholesale or retail), for which a charge is made or credit allowed, including all refunds, cash credits and properties of any amount or nature; (E) Any amount for which credit is allowed by the seller to the purchaser without any deduction therefrom, on account of the cost of the property sold, the cost of materials used, the labor or service cost, interest paid or payable, losses, or any other expense whatsoever; provided that cash discounts allowed or payment on sales shall not be included; (F) The amount of any federal manufacturer's or importer's excise tax Included in the price of property sold, even though the manufacturer or importer is also the retailer thereof and whether or not the amount of such tax is stated as a separate charge. (G) The amount of any California state cannabis excise tax or state cannabis cultivation tax regardless of whether or not the amount of such excise tax or cultivation tax is included in the price of the product or stated to customers as a separate charge, (H) "Gross receipts" shall not include the following: I. The amount of any federal tax imposed on orwith respect to retail or wholesale sales or the sale of services whether imposed upon the cannabis business or the consumer whenever the amount of federal tax is authorized by law to be stated and passed through to customers as a separate charge. ii. Any California state, county, or city sales or use tax, including any add-on, district, or transaction and use tax, required by law to be included in or added to the purchase price and collected from the consumer or purchaser, or such part of the sales price of any property previously sold and returned by the purchaser to the seller which is refunded by the seller by way of cash or credit allowances given or taken as part payment on any property so accepted for resale; or ill. The amount of the sale price of business personal property (all property owned or leased by a cannabis business operator used in the operation cannabis business activities, including but not 4 55D-20 limited to: furniture, fixtures, and business equipment); real property, including land, buildings and other improvements. iv. The amount of equity contributions, investments, and/or loan proceeds to cannabis business' operation, and/or proceeds from the sale or transfer.of cannabis business' retail or commercial cannabis business. (1) "Gross receipts" shall be calculated without any deduction on account of any of the following: 1. The cost of tangible or intangible property sold or bartered; ii. The cost of materials or products used, labor or service cost, interest paid, losses, or other expense; Ill. The cost of transportation of cannabis, or other property or product; iv. The amount of any federal or state income orfranchise taxes; and v. Any other business costs or expenses, unless otherwise specifically exempted. (8) "Manufacturing" as defined in section 40-2(22) of this code. (9) "Retail businesses" as defined in section 40-2(40) of this code. (10) "Gross Square foot" or "gross square footage" for the purposes of this article shall mean: (A) The gross number of square feet comprising a commercial cannabis business' property location (as confirmed by the corresponding "approved building set" or "approved certificate of occupancy' on file with the City of Santa Ana Planning and Building Agency) whichever is the greater of any square footage indicated. (B) In the case of commercial cannabis businesses licensed by the state to engage in cultivation "gross square foot" or "gross square footage" shall mean the aggregate sum of the number of square feet comprising all areas of the premises under "canopy", whether such sum is greater or lesser than the gross square footage as stated in the "approved building set" or "approved certificate of occupancy'. "Canopy," shall mean the designated area(s) of a premise that will contain mature plants at any point in time. Canopy shall be calculated In square feet and measured using clearly identifiable boundaries of all area(s) that will contain mature plants at any point in time, including all of the space(s) within the boundaries. Canopy may be j 5501-21 noncontiguous, but each unique area included in the total canopy calculation shall be separated by an identifiable boundary which includes interiorwalls, shelves, greenhouse walls, hoop house walls, garden benches, hedgerows, fencing, garden beds, or garden plots; and if mature plants are being cultivated using a shelving system, the surface area of each level shall be included in the total canopy calculation. (11) "Testing Facility' or "Testing Laboratory' as defined in section 40-2(44) of this code. (12) "Wholesale" as defined in section 40-(46) of this code. (k) Modification, repeal or amendment. The city council may repeal the ordinance codified in this article, or amend it in a manner which does not result in an increase in the tax or taxes imposed herein, without further voter approval. The city council may likewise by ordinance adopt and add additional provisions to any other article of this chapter and relate them to this article, or amend any existing provisions of any article of this chapter as they may already relate to this article in any manner which does not result in an increase in the tax or taxes imposed herein, without further voter approval. If the city council repeals said ordinance or any provision of this article, it may subsequently reenact it without voter approval, as long as the reenacted ordinance or section does not result in an increase in the tax or taxes imposed herein. (1) Administration—Rules, regulations and guidelines. In order to aid in the city's collection of taxes due under this article and to ensure that all commercial cannabis businesses are taxed consistently to the best of the city's ability, the collector, with the concurrence of the city attorney, may promulgate rules, regulations, and guidelines, to implement and administerthis article including, but not limited to rules, regulations, and guidelines harmonizing other provisions of this chapter with the provisions of this article in any manner not inconsistent with the intent of this article and which does not result in an increase in the tax or taxes imposed herein. The collector may also, with the concurrence of the city attorney, interpret or clarify the methodology of the tax, or any definition applicable to the tax, so long as such interpretation or clarification (even if contrary to some prior interpretation or clarification) is not inconsistent with the language of this article. (m) Occasional transactions—Exemptions. (1) The provisions of this article shall not apply to persons having no fixed place of business within the city who come into the city for the purpose of transacting a specific item of commercial cannabis business at the request of a specific client or customer, incidental to a commercial cannabis business principally established elsewhere, provided that such 0 55D-22 person does not come into the city for the purpose of transacting such business on more than three (3) days during any calendar year. (2) For any person not having a fixed place of business within the city who comes into the city for the purpose of transacting commercial cannabis business activities, the business license tax(es) payable by such person may be apportioned by the collector in accordance with this chapter. (n) Reporting and remittance. 1. Beginning as set forth in subsection (q) below, and monthly thereafter, each commercial cannabis business required to pay a tax or taxes based on gross receipts under this article (except qualified nonprofit organizations exempt from taxes measured by income or gross receipts), shall report to the city any gross receipts received during the preceding monthly reporting period. In addition, each cannabis business (including qualified nonprofit organizations) required to pay a tax or taxes based on square footage shall report to the city the gross square footage of the cannabis business' property location. Every cannabis business shall then compute the business license taxes at both the gross receipts rate and the gross square footage rate - prorated monthly to one -twelfth (1/12th) of the annual tax rate amount - and shall then remit to the city the amount of the higher of the two tax calculations due and owing during said period in accordance with section 21-133, subsection (d). In the case of a qualified nonprofit organization only the gross square footage computation shall be made and the amount of -such calculation shall represent the amount due and owing during said period. All reporting and remitting made shall be done in accordance with instructions from the collector and shall be made using forms provided or approved by the collector. 2. For purposes of this section, month shall mean calendar month and shall include any fraction of a month. Taxes shall begin to accrue on the date that a person or entity first receives a business license or other city permit to operate as a commercial cannabis business or upon the operative date of this article should a person or entity already possess a commercial cannabis business license or other city permit to operate as a commercial cannabis business. 3. The payment of the two thousand dollars ($2,000.00) minimum basic rate gross receipts tax required annually for each separate branch location or separate property location of the business in accordance with this section, shall be made annually prior to the beginning of the fiscal year beginning April first of the current year and expiring on the 31 st day of March of the following year. In the case of a new commercial cannabis business the minimum basic rate gross receipts tax shall be paid in advance prior to rl 55D-23 any new business activity being undertaken. Every new licensee shall pay in advance an amount equal to one-quarter ('/) of the annual minimum basic rate gross receipts tax, for each quarter and fraction of a quarter remaining during the period for which the new license is issued. (o) Delinquent date—Penalty. Any individual or entity who fails to pay the taxes required by this article when due shall be subject to penalties and interest as set forth in accordance with this chapter. The collector is not required to send a delinquency or other notice or bill to any person subject to the provisions of this article and failure to send such notice or bill shall not affect the validity of any tax or penalty due under the provisions of this article. (p) Business license tax certificate—Required. There are imposed upon all persons engaged in transacting and carrying on any commercial cannabis business activity In the city taxes in the amounts prescribed in this article. It shall be unlawful for any person, either for him or herself or for any other person, to commence, transact or cant' on any business in the city without first having procured a business license from the city under this chapter and having paid the taxes set forth in this article, and without complying with any and all applicable provisions contained in this chapter. The carrying on of any commercial cannabis business activity without complying with all the provisions of this article shall constitute a separate violation of this chapter for each and every day that such commercial cannabis activity is so carried on. (q) Classification of business license assessment type—Term and renewal. The business license issued to commercial cannabis businesses shall be classed as a gross receipts assessment type, issued for the same term of license as set forth in subsection 21-71(c) of this chapter and shall be subject to renewal in accordance with sections 21-72(c), 21-73(c), and 21-77. (r) Operative date. Upon the approval by the majority of the voters of the city at the November 6, 2018 general election, the taxes imposed by this article shall become operative and shall be applied by the collector upon all commercial cannabis businesses. Sec. 21-134. Payment of tax does not authorize unlawful business. (a) The payment of a business tax required by this article, and its acceptance by the city, shall not entitle any person to carry on any commercial cannabis business unless the person has complied with all of the requirements of this code and all other applicable laws, nor to carry on any commercial cannabis business In any building or on any premises in the event that such building or premises are situated in a zone or locality in which the conduct of such commercial cannabis business is in violation of any law. 0 55D-24 (b) No tax paid under the provisions of this article shall be construed as authorizing the conduct or continuance of any illegal or unlawful business, or any legal business in an illegal manner, or any business in violation of any ordinance of the city, state or federal law. Sec. 21-135. Single property location; multiple state licenses; separate city business licenses. Sections 21-7, 21-8, and 21-9 of this chapter notwithstanding, separate city business licenses, issuable to commercial cannabis businesses pursuant to this article, shall be required for each separate type of commercial cannabis business activity transacted and carried on at a single city property location for which a commercial cannabis business may seek licensure by the state, or for which a state license has been approved or issued. Sec. 21-136. Security for collection of commercial cannabis business' business license tax. To ensure compliance with business license tax payment requirements established pursuant to this article, the collector shall require, beginning on the operative date of this article, that each commercial cannabis business owner (including but not limited to each transferee, assignee, or purchaser of a commercial cannabis business subject to the business licensing requirements of this article) deposit within thirty (30) days such security (per individual business license) in a form acceptable to the collector in an amount not larger than the cannabis business owner's estimated average monthly tax liability as determined by the collector or the sum of 'ten -thousand dollars ($10,000.00), whichever is the greater. Each new city commercial cannabis business licensee shall upon obtaining their city business license(s) deposit a similar security per business license within thirty (30) days after commencing business. Sec. 21-137. Effect of state and federal reference/authorization. Unless specifically provided otherwise, any reference to a state or federal statute in this article or chapter (whether by direct citation or by definitional reference to another chapter of this code) shall mean such statute as it may be amended from time to time, provided that such reference to a statute herein shall not include any subsequent amendment thereto, or to any subsequent change of interpretation thereto by a state or federal agency or court of law with the duty to interpret such law, to the extent that such amendment or change of interpretation would require voter approval under California law, or to the extent that such change would result in a tax decrease. Only to the extent voter approval would otherwise be required or a tax decrease would result, the prior version of the statute (or Interpretation) shall remain applicable; for any application or situation that would not require voter approval or result in a decrease of a tax, provisions of the 55D-25 amended statute (or new interpretation) shall be applicable to the maximum possible extent. To the extent that the city's authorization to collect or impose any tax imposed under this article is expanded or limited as a result of changes in state or federal law, no amendment or modification of this article shall be required to conform the tax to those changes, and the tax shall be imposed and collected to the full extent of the authorization up to the full amount of the tax imposed under this article. Sec. 21-138. Violation deemed misdemeanor—Penalty. Any person violating any of the provisions of this article or any regulation or rule passed in accordance herewith, shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punishable by the maximum penalties provided for in California Penal Code Section 19. The penalties under this section are in addition to any other penalties available pursuant to this code. Sec. 21-139. Transferability of commercial cannabis business license. Section 21-67 of this chapter notwithstanding, business licenses issued to commercial cannabis businesses pursuant to this article shall be transferable or assignable upon presentation of a valid regulatory safety permit issued in the name of the transferee or assignee. Sec. 21-140. Severability. Should any provision of this article, or its application to any person or circumstance, be determined by a court of competent jurisdiction to be unlawful, unenforceable or otherwise void, that determination shall have no effect on any other provision of this article or chapter or the application of this article or chapter to any other person or circumstance and, to that end, the provisions hereof are severable. KC 55D-26 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: RECEIVE AND FILE THE REAL PROPERTY DISPOSITION POLICY {STRATEGIC PLAN NO. 3,5A) 1 RECOMMENDED ACTION Receive and file the Real Property Disposition Policy. DISCUSSION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1e Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Acquired for its municipal operations and various improvement projects, the City is an owner of substantial real property assets and interests. Over time, the need for these assets and interests can change, thereby creating an opportunity for their use for other purposes. By allowing remnant, unneeded, or marginally used City -owned real property assets to be employed for other purposes, the City and its residents can benefit from private improvements which provide property tax revenue and economic development opportunities, support non -City public uses such as schools, or support uses that provide substantial community benefits or opportunities for neighborhood beautification improvements. The purpose of this policy is to establish procedures whereby remnant, unneeded, or marginally used City -owned real property assets and interests are identified and recommended for disposition through sale, lease, easement, license, or agreement for use to public, private, and non-profit organizations, individuals, or other entities for economic development, public use, community use, community benefit uses, community beautification, or assemblage with adjacent real property. The intent of this policy is to provide an orderly, transparent, open, and fair process for public, private and non-profit organizations, individuals, and other entities to acquire remnant, unneeded, or marginally used real property assets and interests from the City while assuring that the City receives the best overall value for the real property interests conveyed. 60A-1 Real Property Disposition Policy July 3, 2018 Page 2 The Policy is comprised of seven (7) sections: • Background: This section includes a guiding policy to optimize sale price or lease rental; and allows for consideration of the value of special benefits. • Designation of Custodian of List of Real Properties Available for Disposition: This section designates the Clerk of the Council to function as the official custodian of the City's real property list that will be available for disposition and subject to this policy. This list will be made available to the public. • Process to Determine Real Property Interests Potentially Available for Disposition: This section establishes a Real Property Disposition Committee (RPDC), comprised of City staff, that will guide the process to review and recommend available City property for inclusion on the disposition list. The properties identified for disposition will need to satisfy several criteria as outlined in pages 2-3 of the Policy. • Classification of Real Property Interests for Disposition: During the process, the RPDC will include its recommendation to City Council a classification of the property into one or more categories (economic development potential; housing developing potential; public use potential for parks, recreation and open space; community use/benefit potential; neighborhood beautification potential; or adjacent owner assemblage). These classifications will inform preparation of disposition solicitations. • Provisions Related to Disposition to Non -Profit and Community Organizations and Entities: This section provides a process for non-profit and community organizations to formally affirm their interest in acquiring or leasing city property for community use, benefit or beautification projects. The purpose of this provision is to assist the City in determining the organizational capacity of these organizations to carry out their desired use of the property. • Requirements/Procedures for Sale of Real Property Assets and Interests: This section provides the disposition procedures and details on any special requirements before disposition such as the use of brokers, appraisal of the property and soliciting community input before the sale of the property. • Leasing of City Real Property: This section provides a process for the leasing of City owned property. The above sections outline the City's process for disposition of city -owned property and establishes the criteria for how the community can be involved in the process. On March 22, 2016, CDA staff met with the Equity for All Coalition, a group of non-profit community organizations, to review and solicit input on the draft disposition policy. On April 18, 2018, CDA staff met again to review the draft disposition policy with Equity for All Coalition and local residents. Upon receiving this input, several modifications were made to the Policy. This administrative policy will be reviewed by staff on an annual basis. 60A-2 Real Property Disposition Policy July 3, 2018 Page 3 STRATEGIC PLAN ALIGNMENT Approval of this item allows the City to meet Goal #3 (Economic Development), Objective 5 (Leverage private investment that results in tax base expansion and job creation citywide), Strategy A (Identify and market underutilized properties {city and non -city owned} for new development that will create new jobs and expand the City's tax base). FISCAL IMPACT There is no fiscal impact associated with this action. i VU, Steven A. Mendoza Executive Director Community Development Agency Exhibit: 1. Draft Real Property Disposition Policy 60A-3 60A-4 City of Santa Ana Administrative Policies and Procedures Executive Director, Community Development Agency Authorization Subject Date Number Anril 2018 REAL PROPERTY DISPOSITION POLICY Purpose The purpose of this policy is to establish procedures City -owned real property assets and interests are idi sale, lease, easement, license, or agreement fo`rus individuals, or other entities for economic develc benefit uses, community beautification, -or assembly ti. Intent The intent of this policy is to provide an orderly, tral and non-profit organizations,— individuals,', and of marginally used real property assets.and interests 1 the best overall value for the real property interests 1. BACKGROUND. Acquired for its municipal operatic substantial 'real _prop0ty;assets anc interests can`change, thereby creat remnant, unneeded, or marginally purposes, the City and its residents, revenue and economic developme support uses that provide substa beautification improvements.,, It is i real property assets and interests of Community Redevelopment Agency vhereby rem rnanf, unneeded, or marginally used itified and recommended for disposition through to public, private, and'non-profit organizations, ment, public use, community use, community ewith adjacent real property"?, pn\and fair process for public, private fo..acquire remnant, unneeded, or while assuring that the City receives 2ment projects, the City is an owner of the need for certain of these assets and ing an^opportunity for their use for other purposes. By allowing used City -owned real property assets to be employed for other can benefit from private improvements which provide property tax nt opportunities, support non -City public uses such as schools, or ntial community benefits or opportunities for neighborhood mportant to note that this Real Property Disposition Policy covers the City of Santa Ana and the Successor Agency to the Santa Ana but does not cover the real property assets and interests of the City of Santa Ana Successor Housing Agency, nor those of the City of Santa Ana held for affordable housing development purposes ("Housing Properties"). Disposition of Housing Properties is instead covered by the Affordable Housing Funds Policies and Procedures, published by the Housing Division of the Community Development Agency of the City, approved by the Santa Ana City Council on March 20, 2018. The City's basic guiding policy is to optimize the sale price or lease rental income from disposition of City -owned real estate assets and interests. Optimized sales price or lease/rental income shall be based EXHIBIT 1 60A-5 upon a current appraisal with a date of valuation not more than one (1) year prior to the date of City Council approval of any agreement to dispose of the real property. Subject to any limitations which may derive from the source of funds used to acquire a property, the following factors potentially influence a disposition decision and will be considered bythe City in addition to the basicguiding policy: 1.) the effect of prevailing economic conditions and market trends on the appraisal conclusion of value, and: 2.) the estimated value of any special benefits that may accrue from a sale, lease, or other agreement for use. •'1 2. DESIGNATION OF CUSTODIAN OF LIST OF REAL PROPERTIES -AVAILABLE FOR DISPOSITION Following adoption of this policy, the Clerk of the Council will function as the official custodian of the L list of City real properties available for disposition and subject,to.this policy and make the list available to the public. As properties are disposed of, or added -.to -the City's real property portfolio, the Clerk will be provided timely updates by the City Agency'disposing of the 'rea�l`pr perty, or adding property to the portfolio. r /' 3. PROCESS TO DETERMINE REAL PROPERTY INTERESTS POTENTIALLY AVAILABLE FOR DISPOSITION Several City Agencies possess expertise related to valuation and disposition of real property. This Disposition Policy establishes a Real Property Disposition Committee (RPDC) chaired by the City Manager (or his or her designee), comprised of •rep resentatives`of the Community Development Agency, Parks, Recreation,and Community Services Agency; -Planning, and Building Agency, and Public Works Agency. The function•of the RPDC is to review and recommend City -owned real property assets and interests for inclusion�on the list of properties available for disposition held by the Clerk of the Council. Recommendations feom the RDPC will be submitted to the City Council for approval. Meetings and deliberations -of -the RPDC will be noticed and conducted publicly. The agenda of the RPDC will allow for public comment. Real properties be made,a3ailable for�disposition subject to the below described review criteria. As part of its charge, the RPDC will review the City s real property inventory to determine which properties are remnant, surplus, unneeded,'or marginally used and therefore potentially available for disposition. A City owned property may be recommended for disposition by the RPDC if: • Disposition is required by the terms of the funding used to acquire the property. • The property is not currently used by a City department or does not support a municipal function. • The property is vacant and has no foreseeable use by the City. • The property is a non-performing or under -performing asset and greater value may be generated by its sale or lease. • Significant economic development opportunities may be generated by selling or leasing the property. • Disposition facilitates acquisition of real property required for a City project, or acquisition of other real property required for a City project. 7 • 1 M • In the opinion of the Executive Director of Parks, Recreation, and Community Services, the property does not provide significant park, recreation, or open space use opportunities, or if it does, no means of financing the development of the real property for park, recreation, or open space use is reasonably foreseeable. • Disposition has potential to support development of affordable housing, parks and open space, community benefit uses, or neighborhood beautification. Nothing in the foregoing shall preclude the ability of the City to dispose of or exchange real property acquired in connection with a specific project if the disposal or exchange facilitates acquisition of another real property or real property interest needed for the same, or a closely related project. Factors to be considered by the RPDC in determining whethi disposition include: • Will the City be relieved of potential liabilities a does not generate income or provide.pUblic�ben • Will new property tax be generated'by.the sale? • Will disposition stimulate the local economy by investment? • Does the property have grnater.,public benefit i • Will sale of the property generate greater econo lease is a feasible option? • ~`� should be recommended for maintaining a property that opportunities for private sector if retained than'if sold or leased? than a ground lease, if a ground 4. CLASSIFICATION OF REAL PROPERTY INTERESTS FOR DISPOSITION-) In addition to reviewing,and recommending City owned real property for disposition, the RPDC will also include in its recommendation to the City Council'a classification of the property into one or more of the following categories`(A thru F): A.) significant-economic'development.potential an example of,significant economic development potential would be a disposition that results in a development providing new employment, municipal income or tax revenue(s). B.) 'significant housing development potential an, example of significant housing development potential would be a disposition that results m a development}which helps the city meet its Regional Housing Needs Assessment (RHNA) targets. C.) significant public use potential, including for parks, recreation, or open space an example of,signifcant public use potential would be a disposition that results in development of usable, publicly accessible parks or open space. D.) significant community use/benefit potential an example of significant community use/benefit potential would be a disposition that results in development of a community garden, farmer's market, or other community uses benefitting residents. E.) significant neighborhood beautification potential an example of significant neighborhood beautification potential would be a disposition that allows a property to be landscaped, resulting in visual enhancement of the location and neighborhood. F.) assemblage potential with adjacent owner 60A-7 an example of assemblage potential with an adjacent owner would be a disposition that conveys an otherwise unusable remnant property for use by an adjacent owner and back on the property tax roll. 5. PROVISIONS RELATED TO DISPOSITIONS TO NON-PROFIT AND COMMUNITY ORGANIZATIONS AND ENTITIES The City values and supports the many community-based non-profit organizations, entities and neighborhood groups that work to make Santa Ana a better place. These groups represent potential City partners for community use, benefit, and beautification projects requiring real property. The purpose of the provisions described in this section is to identify,those organizations, entities, and i groups that may be interested in acquiring or otherwise obtaining use of City real property for community use, benefit, and beautification projects. The City will create and maintain a list of interested organizations through a Solicitation of Interest (SOI) process. The purpose of the SOI application process•is to determine the organizational capacity of applying community-based non-profit organizations ientities, and groups to own, lease, maintain, manage and operate real property for the desired program, project, o'r use. The list will be used to notify organizations, entities, and neighborhood groups of the availability\of City real property approved for disposition that has been designated as having significant communiybenefit/community use potential. The City recognizes that the number of community organizations changes over time so the SOI solicitation will be conducted as an", open recruitment" so that the list of organizations and entities maybe continuously refreshed over,time An application,form will be developed. Information requested may include, but is not limited to the following • Property sought;'for whatpu'rpose, and whetherfor'purchase or lease • Name of organization • Type of organization \ . • Age of.organization • Organizationahfinancial capacity • Experience with controlling and'managing red property • Description of how the organization,will handle property management • Description%of how property will be operated and maintained (Operations and Maintenance Plan) 6. REQUIREMENTS/PROCEDURES FOR SALE OF REAL PROPERTY ASSETS AND INTERESTS • Conformance with Provisions of the Municipal Code: Sections 2-706, 2-706.1, 2-706.2, 2-707, 2-708, 2-709, and 2-710 of the Santa Ana, CA Code of Ordinances govern sale of real property by the City (copy attached). Notably, Section 2-706 provides for sale to the highest bidder unless another method of sale is authorized by the City Council by not less than a 2/3 vote (See Sec. 2-709). Provisions contained in this Real Estate Disposition Policy provide additional guidance in the disposition of real property assets, but in the case of conflict, the Municipal code and its provisions govern. 4 • l m • • Conformance with Provisions of Government Code Sections 54220 thru 54233: California Government Code Sections 54220 thru 54233 requires that a local agency proposing to dispose of surplus property must first notify all governmental agencies operating within the City as to the availability of the property. The agencies are given 60 days to respond with an intent to acquire, if not, the property may be deemed cleared for public sale. (note: Government Code Sections 54220 thru 54233 requirements do not apply to disposition of real property that has not been used by the City and acquired or held for purposes of exchange or sale as a remnant in connection with implementation of a City project). • Community Comment Required Prior to Issuance,of Solicitation: Prior to the City Council approving properties for inclusion `on dhe list of properties available for disposition, or authorizing issuance of solici atio s\for disposition (e.g. Requests for Proposal, listing for sale or lease, etc.);`the,City shall conduct a noticed neighborhood meeting pursuant to Section 2-153; subsections (b) tl ru (g) of the Santa Ana Municipal Code (relevant portions of Ordinance,NS-2838 "Sunshine Ordinance") in orderto obtain neighborhood comment on the proposed disposition and,futurre use(s) of the real property in question."\ r • Special Requirements Rel: as park land often have sp original acquisition or site restricting use to park pu property.' • Appraisal and Authorizatic ,that-a property may be.so o Disposition•ofPark Land: Real property designated restrictions related to the source of funds used for the lopment.Such'restrictions can arise from covenants is and the source of,funds used to acquire the real of sale Jr. price-equal'to or greater than- \,(1) han`(1) year old) appraisal. Council: Upon approval by the City Council Iger is authorized to sell the property for a rice established by a current (less than one • _'M dthod of Sale: Properties•may be sold by any method allowed by the Municipal Code a"cl,this Policy. This includes direct negotiation, request for proposal, listing with a broker, sealed bid, 'auction or other appropriate method as recommended by the City Manager -arid approved by the City Council. As appropriate, disposition agreements shall includ'e.r asonable "clawback" provisions that provide the City the ability to regain ownership of 'a property as one remedy for non-performance by purchaser or lessee under a disposition agreement or lease. • Marketing: Properties offered for sale shall receive the widest possible exposure to the market. This may be accomplished through direct marketing techniques, such as requests for proposals (RFPs), advertising, exposure through the real estate media, posting the property on the multiple listing service or any other appropriate method. • Use of Proceeds: For transactions where the City retains disposition proceeds, the City Manager may recommend use of proceeds; however, the City Council retains approval 5 60A-9 discretion on use. Application of disposition proceeds toward "one time" expenditures, such as deferred maintenance in parks and community centers, and other possible one time uses, should be prioritized. • Use of Real Estate Brokers: Real estate brokers may be used to represent the City in the sale of its properties. Brokers will be selected for individual assignments through Requests for Proposals (RFP) or Requests for Qualifications (RFQ) and a subsequent bid or other methods that result in the City receiving the services of a qualified broker at the best value to the City. If the property is listed with a broker, the City reserves the right to exclude from the listing agreement potential buyers whose interest in purchasing a property has been made a part of.the record prior to the execution of the listing agreement. All brokerage arrangements shall conform to Section 2-707 of the Municipal Code. , Easements: The City will receive current -fair market value f easements or access rights previously -paid for by the City or, or reserved in a sale of City property. I as provided in the Municipal Code rider one of the following conditions: • • Negotiated Sales: Negotia and this Disposition Policy, o When a parcel is la o When the sale to a o When f intere<- sales are maybe a or other required =- --,aftera noticed oubl 7. LEASING OF�CITY REAL PROPERTTY , There may be opportunities for the'Cityto to the City. City property shall be consid apply: the removal of restrictive her governmental agency ous owner would'correct a site deficiency. peline or other right-of-way is no longer required, it s owner. ATestfictive pipeline easement of adequate 1.sements will be reserved from said sale. public and quasi -public agencies submit acquisition :horiied by a two-thirds (2/3) vote of the City Council ng perMunicipal Code Section 2-709. ase rather than sell its real property that results in a benefit -ed for leasing when one or more of the following criteria • The property is`noVrequired for current municipal use, but is to be held for possible future use and can be leasedas an interim measure. • The City requires substantial control over development, use and reuse of the property. • The property has the immediate potential of a high return to the City because of its high demand and type of use, such as commercial and industrial land. • The property can be efficiently utilized by a provider of services needed by the City. • The property can be leased to promote a substantial economic development opportunity. • The property can only be leased because of legal restraints. For example, property acquired with Land and Water Conservation funds or held as dedicated park land. Lessee Selection: Competitive offers for lease of City property shall be solicited in the open market. This may be accomplished through a number of marketing techniques, such as Request for Proposals 60A-10 (RFPs), a marketing subscription system, direct advertising, use of a Multiple Listing Service (MLS), listing with a broker, posting the property and any other appropriate means. In certain limited situations, the City may exclusively consider a single proposal for lease of City property. Potential lessees wishing to exclusively negotiate with the City must submit for City staff review a business case with sufficient justification as to how it is capable of optimizing the use of the property and return to the City, thereby negating the need for a competitive process. This information will be included when the lease transaction is presented for City Council approval. Leasehold proposals shall be evaluated in terms of: • the amount of consideration offered in the form of rent. e • the financial feasibility of the proposal. • the capability, expertise and experience of the potential leasehold development and operation. • if new development is proposed, a developmen plan development team and its qualifications. -. essee with respect to the proposed • the identity of each person or entity thaf, ill,have an interest in the'pr • special public benefits to be derived (if any').X a description of the lease. Rate of Return: The City shall obtain fair market rents for'its leases commensurate with the highest and best use of the property. The fair marke rent shall tie.based on an appraisal that complies with the definition of Market Rent found in the Uniform Standards sof Professional Appraisal Practice (USPAP) published by the Appraisal Foundation. Theappraisal shall be no more than six months old at the time the lease transaction is presented for City Council approval. If the cost of an appraisal is not justified by the anticipated"rents, tl e,city may choose,,an alte ative method to establish rent. City leases shall contain terms and conditions which will'sMain a fair rate of return throughoutthe duration of the lease. i Rental Terms, Rental terms may be negotiated on -the basis of fixed rates (flat rent leases) or percentages of the lessee's, gross income derived from business conducted on the property, with a provision foraminimum rental (percent ge leases). Flat Rate Leases \, • Market Rate Adjustments: 1Fldt rate leases shall provide for upward adjustment of rent at least every ten (10) year's,to current fair market rent. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. • Consumer Price Index Adjustments: Flat rate leases shall provide for upward adjustment of rent in the interval term between market rate adjustments by changes in the consumer price index. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. The index used for consumer price index adjustments will be the All Urban Consumers index for Los Angeles - Riverside - Orange County, California with a base year of 1982-84. If the U.S. Department of Labor indices are no longer published, another substitute index generally recognized as authoritative will be used. Flat rate leases may include pre- determined periodic increases to rent instead of consumer price index adjustments. These periodic increases would occur at least every five (5) years. 7 60A-11 Percentage Leases: • Minimum Rent: The minimum rent component for a new percentage lease shall be set at no less than eighty percent (80%) of the fair market rent as defined above. In certain cases, a portion of the minimum rent may be abated for new construction or redevelopment on the leasehold. The minimum rent shall be adjusted upward throughout the duration of the lease at intervals of not more than every five (5) years to reflect no less than eighty percent (80%) of the average annual rent actually paid or accrued during the three (3) years preceding the adjustment. In no event shall the adjusted minimum rent be less than the minimum rent in existence immediately preceding the adjustment. • Percentage Rates: Percentage leases shall provide for adjustment of percentages rates every ten (10) years to current fair market rates. For the purposes of determining fair market rent percentage rates, the City shall adopt and publish a schedule of benchmark percentage rates that will be updated to current market rates on a-0 e rio'd i cbasis by appraisal. The appraisal will be guided by prevailing market percentage rates -for similar operations primarily within the Southern California area. Rent Arbitration: Leases shall provide for binding {bitration when the City, and lessee cannot agree on the new rent for a rental period under review. The City and lessee shall each select a professional independent real estate appraiser who n -turn will selecta thirdindependent real estate appraiser to determine the fair market rent. If the two selected appraisers fail to mutually select a third appraiser, then the third appraiser shall be determined in•accorance with'the rules of the American Arbitration Association. The City and lessee shall pay the,cosf . .cost of,its own selected, appraiser and equally share the cost of the third appraiser: Appraisal Assumptions:, City leases shall include a definition of the fair market value to be used to set rent and identify the premise for that value. In establishing the fair market value of leased property, any appraisal shall consider the property s'a.fee simple absolute estate and as vacant and available for lease or•sale-forthe authorized purposes of the lease at the commencement of the rental period under review. Rates established for purposes'of.periodic percentage rental adjustments shall not consider any abatement as may be appropriate in a "new' development of vacant land. It shall also be assumed that all"re�quired regulatory approvals to permit the use authorized in the lease have been obtained. \ Lease Term: i • Short -Term Lease: %,The City Manager shall have the authority, without advertising, notice, or competitive bidding, and'upon such terms as he or she may deem proper, to lease any City property for a term of up to three (3) years (short-term lease). The City Council will be notified of a short-term lease not later than fifteen (15) days following its execution. A short-term lease may not be renewed without approval of the City Council. The City Manager may also execute rental agreements covering month-to-month tenant occupancy of City -owned residential housing. • Long -Term Lease:_A lease in excess of three (3) years requires a resolution passed by a majority vote of all members of the City Council. The length of lease term shall be based on the level of capital improvements to be made by the lessee and the economic life expectancy of the development. These factors can be determined utilizing cost estimating and economic life A' 8 60A-12 expectancy resources such as tables provided by Marshall Valuation Service. The City may consider other relevant information in determining if a longer lease term is warranted, such as if the proposed leasehold development is expected to generate above average returns to the City or significantly improve the quality of the property. Lease Amendments: Amendments to long-term leases require City Council approval. The City's agreement to an amendment may be contingent upon updating sections of the lease to incorporate current City standard lease provisions and an adjustment to fair market rent. Subleases: A lessee may sublease all or part of the leased property, approval by the City. No sublease shall be approved which would, under the master lease or for a use that is not consistent with use: City Manager may authorize subleases which meet the se �cond amendment of the master lease. Unless special circumstances exist, receive a minimum of fifty percent (50%) of the incremental gross from subleases. _ ,' Leasehold Financing. The City will not subordinate its leasehold by a lessee. The City Mani leasehold interest, which provide that property until the leasehold is fully develope appropriate steps to reviewthe proposed finan Maximum loan proceeds sKill`not be in exce "value' refers to the leasehold improvements; to a qualified sub -lessee subject to X e detrimental to the City's rights allowed by the master lease. The itions and which do not require leases shall provide for the City to rental revenues due to the lessee encumbra cn es placed against any approve, appropriate financial encumbrances of the roceeds are used for authorized improvement of the in,accordance with the lease. City staff shall take ig and insure that loan proceeds go into the leasehold. of seventy-five percent (75%) loan -to -value, where s determined by -a, lender's appraisal which has been reviewed and approved by City staff: The loan term shall not exceed the term of the lease. Loans or refinancing in the form of encumbra nces'against the lease for the purpose of reducing equity or financing the -sale of leasehoId. interes_t Will not be allowed until the property is fully developed for uses authorized in -the lease. After the property is•developed, such financing may be permitted so long as there js also substantial benefit to,be gained..'by the City. This may take the form of either a percentage share of the loan proceeds o'ban upward adjustment to the rent, either of which shall be based on commercially reasonable comparables found in the market. Leasehold Improvements: Leasehold improvements installed by lessees shall be removed at the lease termination without cosVto the, 'City, or will revert to the City, at the City's option. All leasehold improvements and alterations require prior written approval of the City Manager. Maintenance and Utilities Responsibility: City leases shall require the lessee to maintain all improvements on the property at its own expense and be responsible for the cost of all utilities. Leases for multi -tenanted space shall include specific requirements delineating appropriate responsibilities. Lease Audits: All percentage leases shall be subject to audit in the first year of operation to establish proper reporting procedures and at least once every three (3) years thereafter. More frequent audits may be made if appropriate. The City shall reserve the right to audit all other leases and agreements subject to this Policy. 60A-13 Leasehold Assignments: Requests for assignment of leasehold interest shall be evaluated on the same basis as the criteria used in evaluating a leasehold proposal. The City Manager may authorize assignments which do not require amendment of the master lease. Consent may be contingent on the payment of additional consideration to the City, either as a percentage share of the purchase price of the leasehold interest or an upward adjustment to the rent. Either of which shall be based on commercially reasonable comparables found in the market. If new financing is involved in the sale, the requirements of'Leasehold Financing' shall apply. Lease Extensions & Renewals: Requests from existing lessees for lease extensions or renewals may be considered if such proposals promote capital investment and,.redevelopment of City property. Whenever an existing lessee is seeking renewal of an expiring•I'ong=term lease, the City Manager will bring the issue before the applicable City Council Committee'with an appropriate recommendation. In addition to the criteria used to assess new lease proposals` City`staff•also will review the lessee's history with respect to: maintenance of the property; compliance with•.existing lease terms; prompt rent payments; and a rental return consistent with maximizing the property's full potential. The lessee must propose capital investment that: will increase tFie value or the useful life of the leasehold improvements by an amount more than can be reasonably amortized over the.remaining lease term; is not recurring in nature; and is at least ten percent\(10%)'orjmore of the. Value of the existing improvements. It specifically should, exclude expenditure"s to correct deferred Maintenance and expenditures for repairs to keep theexisting improvements in good condition. The length of any extended lease term shall be calculated'by the same method used for calculating the length of new leases. City's Interest in Leasehold Improvements: City lease agreem nts.provide the City the right to assume ownership of the leasehold,improvements at 6e end`of the lease The value of the City's interest in the leasehold improvements can be appraised usingwidelyaccepted appraisal methods. In the event the City grants.a-lessee a lease extension the City shall be compensated by an amount equal to the change in present value attributable.to the•deferral of its)interest in the leasehold improvements. This amount either can be paid.as`an upfront payment at the beginning of the extended term or amortized over time with appropriate interest applied. The City shall offset from the value of its interest in the leasehold improvements any increased economic benefit derived from an extended lease. The City shall not receive any compensation for its interest in the leasehold improvements on leases extended prior to the last twenty percent (20%) of the existing term. Security Deposits: The stariclar`d security deposit for a new lease agreement shall be equivalent to three (3) month's rent. The security deposit may take the form of cash, an instrument of credit or a faithful performance bond. For a lessee making a substantial investment in improvements, the security deposit will be refunded upon completion of the improvements. Transaction Processing Fees: The City may charge a transaction processing fee in accordance with the schedule of adopted fees. The fee may be waived for transactions that provide benefit to the City. Nothing in this section shall preclude the City from negotiating terms or conditions that may vary from these requirements should that be necessary or required under the particular circumstances of the proposed lease transaction. 10 60A-14 Attachment A— Municipal Code on Sale of Real Property Sec. 2-706. - Sale of real property—Procedure. After authorization by the council of the sale of a parcel of real property, a sale shall be scheduled and conducted by the director of public works or by his designated deputy. All sales shall be made to the highest bidder subject to final confirmation by the council. Notice that such sale is to be conducted shall be given by publication at least once in a newspaper of general circulation printed, published, and circulated in the city and by sending written notice to all persons who had requested notice and to all persons suggested by department heads as prospective bidders, such notice to be published and mailed`at least ten (10) days prior to the date of sale. .1` / Sealed bids may be required or oral bids may to purchase must be accompanied by a depos minimum bid in the form of cash, or by cashier's after any sealed bids are opened and any written t submit an oral bid provided that any bid may be 6, bid theretofore made by at least one (1) percent,c The successful bidder must deliver immediately statement of his bid signed by the bidder; togetl the amount of his bid. The deposit maybe in the is replaced before the close of business on the: or certified check. Failure -to deposit such�writte the bid price in the mariner stated may beacon check is not replaced'as,re'quired, a,forfeit of oni written statement of the bid, shall be required offered to the second highest bidderlof record. provided for. Sealed bids or written offers �f,.one'(1)`ppercent of the amount of the certified check. If oral bids are permitted, s are annou`nced;,any person present may garded which doe's`not exceed the highest such highest bid. form of ig the declaration�of sale, a written initial deposit of ten (10) percent of ersonal check provided such check ng business day by cash or by cashier's ement'of bid or said ten (10) percent of d, a�withdrawal of the bid. If a personal arcent of the sales price, as stated in the purchase of the property may then be (Code 1952; § 613 OrdNo. NS -1281 § 11 8=15-55; Oid?No. NS -1265, § 1, 8-4-75) J Sec. 2-706.1. `Same—Sale only to owners`of adjoining property. Upon the written recommendation of the city manager, the council may determine that the property being offered for sale can have real value only to a certain owner or owners of adjoining property and`bould be used by other persons only for the purpose of nuisance value to such owners of adjoining or abutting property. After such determination has been made as next hereinabove provided.for the council may by direct negotiation, provide for the sale of the real property covered thereUy, without compliance with the auction, public sale, or method of payment requirements in this article provided for. (Ord. No. NS -1265, § 2, 8-4-75) 11 60A-15 Sec. 2-706.2. - Same—Method of payment. Sales of real property shall be on an all cash basis with the following exception: Upon written recommendation of the city manager and approval by the council, a parcel of surplus real property may be sold on such credit terms as are deemed to be necessary in each case. After the required down payment has been made, the balance of the purchase price shall be secured by a note and deed of trust. The credit payment period shall not exceed fifteen (15) years from the date of execution of the trust deed. Interest shall be at the prevailing rate in the community allowed by the Federal Housing Administration (FHA) as of the date of the public sale, but shall not include any FHA mortgage insurance premium. (Ord. No. NS -1265, § 2, 8-4-75) Sec. 2-707. - Same—Broker listing; maximum commission; nonliability of city agent. The city council, when it determines that any real property owned by the city be disposed of, may authorize the director of public works,fo execute a written fisting contract to find bidders with a licensed real estate agent or broker, and,may specify that said property be placed in multiple listing. Said listing contract shall specify the maximum commission to be paid if the property is sold, which said commission shall in no case exceed six (6) percent of the sale price on property improved with a habitable building and shall in no case exceed ten (10) percent on unimproved property. No personal liability -shall attach to any agent of the city who signs any such contract on behalf of the city. (Code 1952, § 2615; Ord: ,No.' (Code § 1, 623-57; Ord. No. NS -1082,-§ 1, 6-21-71; Ord. No. NS - 1265, § 11, 8-4-75)x) Sec. 2-708. -Same—Paymentof commission;division of commission. In the event ari'agent covered by the contract, as out in section 2-707, procures a bidder who submits the highest,biid\and to whom the,sal'e is made and completed in due course, the commission provided in said contract shall be paid to said agent. In event an agent covered by the contract submits the highest written bid which conforms in all respects to the city's invitation to bid and the provisions of section 2-706; and an oral bid conforming to said requirements is made by a different, bidder and results in the sale being made and completed to said different oral bidder, then one-half(Y2) of the commission originally fixed shall be paid to the listing agent who procured the origiiinal`highest written conforming bid. If the successful oral bidder was procured and is represented by a licensed real estate agent or broker and the sale is made and completed, then the other one-half (%) of said commission shall be paid to such agent or broker. In cases where no listing contract exists and the successful bidder is represented by a licensed real estate broker, upon approval by the council, a full commission will be paid to such broker under the following conditions: (1) The buyer's written or oral bid must be submitted by the broker, (2) The broker must be designated as such in the buyer's purchase offer or in the written statement of his bid, and 12 ZI •. (3) The sale to the buyer must be consummated. (Code 1952, § 2616; Ord. No. NS -256, § 1, 6-3-57; Ord. No. NS -1265, § 5, 8-4-75) Sec. 2-709. - Exceptions. The provisions in this article regulating the sale of surplus city personal property or the sale of city real property shall not apply to any sale of such property made to any city, county, city and county, state or federal government, or any political subdivision of any of them, or to any nonprofit public benefit corporation formed or controlled by the city, or to any sale which is exempted from such provisions by two-thirds ( 2/3 ) vote of,tfie,city council after a duly noticed public hearing, and such sales may be made upon a basis of direct negotiations without the necessity for public auction or competitive bidding, when the.authority to so negotiate has been granted by the city council. (Code 1952, § 2614; Ord. No. NS -128, § 2, 8-15-55`,' Ord. No. NS -1006, §,27, 4-6-85) Sec. 2-710. - Exchange of real property. Upon written recommendation of the city manager; the council may authorize the exchange of any parcel of city -owned real propegf 'which has been/declared to be surplus to the city's needs for any other real property, whether -publicly or privately owned, for which the city has a public need. Upon such authorization,tan exchange maybe concluded by direct negotiation without compliance with the -auction orpublic sale requirements in this article provided for. (Ord. No. NS -1265, § 6,�8-4 75) 13 60A-17 o. 1 CORRESPONDENCE 60A-20 Orozco, Norma From: Huizar, Maria Sent: Thursday, June 28, 2018 9:02 AM To: Orozco, Norma Cc: Rojano, Michael Subject: Fwd: Real Property Disposition Policy Attachments: Real Property Disposition Policy (DRAFT- E4A Edits) .pdf,, ATT00001.htm. Please add as communication to agenda packet. Thank you. Sent from my iPhone Begin forwarded message: From: "Mendoza, Steven" <SMendoza(a),,santa-ana.org> Date: June 28, 2018 at 9:40:19 AM CDT To: "Huizar, Maria" <MHuizarna,santa-ana.org> Cc: "Sweiss, Fuad" <fsweiss(a,santa-ana.org>, "Morley, Marc" <MMorleyC santa-ana.org>, "Gabriel, Jason" <JGabrielAsanta-ana.org>, "Galvez, William E." <wegalvez(a,santa-ana.org> Subject: FW: Real Property Disposition Policy Good Morning Maria, I received the following email and attachment regarding next week's agenda item for the Real Property Disposition Policy. Sincerely, Steven From: Karen Romero Estrada Sent: Wednesday, June 27, 2018 7:53 PM To: Mendoza, Steven <SMendoza@santa-ana.org> Cc: Ana Urzua (SABHC) Subject: Re: Real Property Disposition Policy Good evening Steven, I hope this email finds you well. I have attached the Real Property Disposition Policy ("Policy") with edits from the Equity for All Coalition ("Coalition"), which are indicated in blue. The Coalition is a partnership of Santa Ana residents and community organizations working to ensure equitable planning and development. On October 6, 2016, the Coalition came before the Economic Development, Infrastructure, Budget and Technology Committee to express concerns regarding the sale of over 90 public parcels of land to the private market. Since then, we have worked with the City Council, City staff, and community members to identify community needs and help develop policies that prioritize community benefits in the development of city -owned land. Additionally, the coalition has been in communication with city staff and council members since March 22, 2018, when the Policy was first introduced at the Economic Development Infrastructure, Budget and Technology Committee, and we have presented the edits to council 60A-21 members since. We respectfully request our edits to be taken into consideration and incorporated into the policy. Thank you, Karen Karen Romero Estrada Research and Policy Analyst Orange County Communities Organized for Responsible Development Facebook I Twitter I YouTube 60A-22 City of Santa Ana Administrative Policies and Procedures Executive Director, Community Development Agency Authorization Subject j Date I Number I April 2018 REAL PROPERTY DISPOSITION POLICY Purpose The purpose of this policy is to establish procedures whereby remnant, unneeded, or marginally used City- owned real property assets and interests are identified and recommended for disposition through sale, lease, easement, license, or agreement for use to public, private, and non-profit organizations, individuals, or other entities for economic development, public use, community use, community benefit uses, community beautification, or assemblage with adjacent real property. Intent The intent of this policy is to provide an orderly, transparent, open, and fair process for public, private and non-profit organizations, individuals, and other entities to acquire remnant, unneeded, or marginally used real property assets and interests from the City while assuring that the City prioritizes community benefits for its residents and receives the best overall value for the real property interests conveyed. IMIMA[yC(e13e11P►G] Acquired for its municipal operations and various improvement projects, the City is an owner of substantial real property assets and interests. Over time, the need for certain of these assets and interests can change, thereby creating an opportunity for their use for other purposes. By allowing remnant, unneeded, or marginally used City -owned real property 60A-23 assets to be employed for other purposes, the City and its residents can benefit from private and public improvements which provide property tax revenue and economic development opportunities, support non -City public uses such as schools, or support uses that provide substantial community benefits, and positively impact the health, wellbeing, and livelihoods of City residents, or opportunities for neighborhood beautification improvements. It is important to note that this Real Property Disposition Policy covers real property assets and interests of the City of Santa Ana and the Successor Agency to the Santa Ana Community Redevelopment Agency, but does not cover the real property assets and interests of the City of Santa Ana Successor Housing Agency, nor those of the City of Santa Ana held for affordable housing development purposes ("Housing Properties"). Disposition of Housing Properties is instead covered by the Affordable Housing Funds Policies and Procedures, published by the Housing Division of the Community Development Agency of the City, approved by the Santa Ana City Council on March 20, 2018. The City's basic guiding policy is twofold: First, it is to optimize the sale price or lease rental income from disposition of City -owned real estate assets and interests. Optimized sales price or lease/rental income shall be based upon a current appraisal with a date of valuation not more than one (1) year prior to the date of City Council approval of any agreement to dispose of the real property. Subject to any limitationswhich may derive from the source of funds used to acquire a property, the following factors potentially influence a disposition decision and will be considered by the City in addition to the basic guiding policy: 1.) the effect of prevailing economic conditions and market trends on the appraisal conclusion of value, and: 2.) the estimated value of any special benefits that may accrue from a sale, lease, or other agreement for use. Second, the City recognizes that it plays an important role in stewarding publicly -owned real estate assets and interests in a way that serves the City's Vulnerable Residents, meaning those who are at -risk of or experiencing homelessness, displacement, unemployment or underemployment, low-wage jobs, poor health, and harmful environmental impacts. The City shall prioritize land disposition or leasing that provides substantial Community Benefits to City residents, especially its Vulnerable Residents. Community Benefits means the following: 1.) Affordable housing, with a focus on community -controlled, permanently affordable housing, for example a community land trust, 2.) Affordable, healthy food retail, 3.) Community health clinics, 4.) Renewable energy infrastructure, 5.) Public transportation, 6.) Green space, parks, and recreation centers, 7.) Affordable childcare, and 8.) Youth and senior facilities and services, and 60A-24 9.) Community agriculture 10.) Development of land by Community Land Trust. The City aims to achieve these outcomes first and foremost with local organizations that serve the City's Vulnerable Residents. 2. DESIGNATION OF CUSTODIAN OF LIST OF REAL PROPERTIES AVAILABLE FOR DISPOSITION Following adoption of this policy, the Clerk of the Council will function as the official custodian of the list of City real properties available for disposition and subject to this policy and make the list available to the public. As properties are disposed of, or added to the City's real property portfolio, the Clerk will be provided timely updates by the City Agency disposing of the real property, or adding property to the portfolio. 3. PROCESS TO DETERMINE REAL PROPERTY INTERESTS POTENTIALLY AVAILABLE FOR DISPOSITION Several City Agencies possess expertise related to valuation and disposition of real property. This Disposition Policy establishes a Real Property Disposition Committee (RPDC) chaired by the City Manager (or his or her designee), comprised of not more than two representative of each of the following agencies: the Community Development Agency, Parks, Recreation and Community Services Agency, Planning and Building Agency, Public Works Agency, and six members of the public who will serve as Community Representatives and are appointed by the City Council to serve for two- year terms. Community Representatives are individuals and representatives of nonprofit organizations that work with the City's Vulnerable Residents, which include the following: The Kennedy Commission Latino Health Access Orange County Communities Organized for Responsible Development (OCCORD) EI Centro Cultural de Mexico KidWorks Habitat for Humanity Illumination Foundation The function of the RPDC is to review and recommend City -owned real property assets and interests for inclusion on the list of properties available for disposition, including sale or lease, held by the Clerk of the Council. Recommendations from the RDPC will be submitted to the City Council for approval. Meetings and deliberations of the RPDC will be noticed and conducted publicly. The agenda of the RPDC will allow for public comment. The RPDC will not submit a recommendation to the City Council without the approval of at least two thirds of the members of the entire RPDC. Real properties may be made available for disposition subject to the below described review criteria. As part of its charge, the RPDC will review the City's real property inventory to 60A-25 determine which properties are remnant, surplus, unneeded, or marginally used and therefore potentially available for disposition. A City owned property may be recommended for disposition by the RPDC if: Disposition is required by the terms of the funding used to acquire the property. • The property is not currently used by a City department or does not support a municipal function. • The property is vacant and has no foreseeable use by the City. • The property is a non-performing or under -performing asset and greater value may be generated by its sale or lease. • Significant economic development opportunities may be generated by selling or leasing the property. • Disposition facilitates acquisition of real property required for a City project, or acquisition of other real property required for a City project. • In the opinion of the Executive Director of Parks, Recreation, and Community Services, the property does not provide significant park, recreation, or open space use opportunities, or if it does, no means of financing the development of the real property for park, recreation, or open space use is reasonably foreseeable. • Disposition has potential to support development of affordable housing, parks and open space, community benefit uses, or neighborhood beautification. Nothing in the foregoing shall preclude the ability of the City to dispose of or exchange real property acquired in connection with a specific project if the disposal or exchange facilitates acquisition of another real property or real property interest needed for the same, or a closely related project. Factors to be considered by the RPDC in determining whether a property should be recommended for disposition include: • Will the City be relieved of potential liabilities and/or cost of maintaining a property that does not generate income or provide public benefit? • Will new property tax be generated by the sale? • Will disposition stimulate the local economy by providing opportunities for private sector investment? • Does the property have greater public benefit potential if retained than if sold or leased? • Will sale of the property generate greater economic value than a ground lease, if a ground lease is a feasible option? 4. CLASSIFICATION OF REAL PROPERTY INTERESTS FOR DISPOSITION In addition to reviewing and recommending City -owned real property for disposition, the RPDC will also include in its recommendation to the City Council a classification of the property into one or more of the following categories (A thru F): A.) significant economic development potential an example of significant economic development potential would be a disposition that results in a development providing new employment, municipal income or tax revenue(s). B.) significant housing development potential an example of significant housing development potential would be a disposition that results in a development which helps the city meet its Regional Housing Needs Assessment (RHNA) targets. C.) significant public use potential, including for parks, recreation, or open space an example of significant public use potential would be a disposition that results in development of usable, publicly accessible parks or open space. D.) significant community use/benefit potential an example of significant community use/benefit potential would be a disposition that results in development of a community garden, farmer's market, or other community uses benefitting residents. Community Benefits may be achieved through developing or increasing access to the following: 1.) Affordable housing, with a focus on community -controlled, permanently affordable housing, for example a community land trust, 2.) Affordable, healthy food retail, 3.) Community health clinics, 4.) Renewable energy infrastructure, 60A-27 5.) Public transportation, 6.) Green space, parks, and recreation centers, 7.) Affordable childcare, 8.) Youth and senior facilities and services, and 9.) Community agriculture 10.) Development of land by Community Land Trust. E.) significant neighborhood beautification potential an example of significant neighborhood beautification potential would be a disposition that allows a property to be landscaped, resulting in visual enhancement of the location and neighborhood. F.) assemblage potential with adjacent owner an example of assemblage potential with an adjacent owner would be a disposition that conveys an otherwise unusable remnant property for use by an adjacent owner and back on the property tax roll. No fewer than 75 percent of parcels classified in each calendar year shall be classified as having significant community use/benefit potential (D). At least 50 percent of the parcels classified as having significant community use/benefit potential in category (D) should be developed for these purposes. 5. PROVISIONS RELATED TO DISPOSITIONS TO NON-PROFIT AND COMMUNITY ORGANIZATIONS AND ENTITIES The City values and supports the many community-based non-profit organizations, entities and neighborhood groups that work to make Santa Ana a better place. These groups represent potential City partners for community use, benefit, and beautification projects requiring real property. The purpose of the provisions described in this section is to identify those organizations, entities, and groups that may be interested in acquiring or otherwise obtaining use of City real property for community use, benefit, and beautification projects. The City will create and maintain a list of interested organizations through a Solicitation of Interest (SOI) process. The purpose of the SOI application process is to determine the organizational capacity of applying community-based non-profit organizations, entities, and groups to own, lease, maintain, manage and operate real property for the desired program, project, or use. The list will be used to notify organizations, entities, and neighborhood groups of the availability of City real property approved for disposition that has been designated as having significant community benefit/community use potential. Any organization in the SOI process must demonstrate commitment to the provision of community benefits including affordable housing, open public space, public education, community health, youth services, supportive social services, community agriculture, public transportation, renewable energy infrastructure, community-based cooperative enterprise. The City must send a written offer to sell or lease the property to notify organizations, entities, and neighborhood groups, including nonprofit housing development entities and community land trusts, at least 60 days before notifying the public. The City recognizes that the number of community organizations changes over time so the SOI solicitation will be conducted as an 'open recruitment' so that the list of organizations and entities may be continuously refreshed over time. An application form will be developed. Information requested may include, but is not limited to the following: • Property sought, for what purpose, including the community use and benefit, and whether for purchase or lease • Name of organization • Type of organization • Age of organization • Description of commitment to the provision of community benefit(s) • Organizational financial capacity • Experience with controlling and managing real property • Description of how the organization will handle property management • Description of how property will be operated and maintained (Operations and Maintenance Plan) 6. REQUIREMENTS/PROCEDURES FOR SALE OF REAL PROPERTY ASSETS AND INTERESTS Conformance with Provisions of the Municipal Code: Sections 2-706, 2- 706.1, 2-706.2, 2-707, 2-708, 2-709, and 2-710 of the Santa Ana, CA Code of Ordinances govern sale of real property by the City (copy attached). Notably, Section 2-706 provides for sale to the highest bidder unless another method of sale is authorized by the City Council by not less than a 2/3 vote (See Sec. 2- 709). Provisions contained in this Real Estate Disposition Policy provide additional guidance in the disposition of real property assets, but in the case of conflict, the Municipal code and its provisions govern. 60A-29 • Conformance with Provisions of Government Code Sections 54220 thru 54233: California Government Code Sections 54220 thru 54233 requires that a local agency proposing to dispose of surplus property must first notify all governmental agencies operating within the City as to the availability of the property. The agencies are given 60 days to respond with an intent to acquire, if not, the property may be deemed cleared for public sale. (note: Government Code Sections 54220 thru 54233 requirements do not apply to disposition of real property that has not been used by the City and acquired or held for purposes of exchange or sale as a remnant in connection with implementation of a City project). Community Comment Required Prior to Issuance of Solicitation: Prior to the City Council approving properties for inclusion on the list of properties available for disposition, or authorizing issuance of solicitations for disposition (e.g. Requests for Proposal, listing for sale or lease, etc.), the City shall conduct a noticed neighborhood meeting pursuant to Section 2-153, subsections (b) through (h) of the Santa Ana Municipal Code (relevant portions of Ordinance NS -2838 "Sunshine Ordinance") in order to obtain neighborhood comment on the proposed disposition and future use(s) of the real property in question. • Special Requirements Related to Disposition of Park Land: Real property designated as park land often have special restrictions related to the source of funds used for the original acquisition or site development. Such restrictions can arise from covenants restricting use to park purposes and the source of funds used to acquire the real property. • Appraisal and Authorization of sale by City Council: Upon approval by the City Council that a property may be sold, the City Manager is authorized to sell the property for a price equal to or greater than a minimum price established by a current (less than one (1) year old) appraisal. • Method of Sale: Properties may be sold by any method allowed by the Municipal Code and this Policy. This includes direct negotiation, request for proposal, listing with a broker, sealed bid, auction or other appropriate method as recommended by the City Manager and approved by the City Council. As appropriate, disposition agreements shall include reasonable "clawback" provisions that provide the City the ability to regain ownership of a property as one remedy for non-performance by purchaser or lessee under a disposition agreement or lease. Marketing: Properties offered for sale shall receive the widest possible exposure to the market. This may be accomplished through direct marketing techniques, such as requests for proposals (RFPs), advertising, exposure through the real estate media, posting the property on the multiple listing service or any other appropriate method. 60A-30 • Use of Proceeds: For transactions where the City retains disposition proceeds, the City Manager may recommend use of proceeds; however, except as set forth herein, the City Council retains approval discretion on use. Application of disposition proceeds toward "one time" expenditures, such as deferred maintenance in parks and community centers, and other possible one time uses, should be prioritized. Beginning in 2019, 30 percent of all disposition proceeds shall be designated to [the creation of a new fund (Community Fund) to be administered by the Community Economic Development Agency, with the purpose of providing affordable housing for low, very low, and extremely low-income persons, expanding resident -owned micro -business enterprises, open recreational spaces.] These proceeds shall be used to develop projects that deliver Community Benefits for the City's Vulnerable Residents, meaning those who are at -risk of or experiencing homelessness, displacement, unemployment or underemployment, low- wage jobs, poor health, and harmful environmental impacts. Upon approval of the Policy and before 2019, City staff will follow up to create this community fund, in conjunction with Equity for All coalition. Fifteen percent of the Community Fund funding will be allocated towards the Universal Representation fund for legal defense (ordinance NS- XXX). • Use of Real Estate Brokers: Real estate brokers may be used to represent the City in the sale of its properties. Brokers will be selected for individual assignments through Requests for Proposals (RFP) or Requests for Qualifications (RFQ) and a subsequent bid or other methods that result in the City receiving the services of a qualified broker at the best value to the City. If the property is listed with a broker, the City reserves the right to exclude from the listing agreement potential buyers whose interest in purchasing a property has been made a part of the record prior to the execution of the listing agreement. All brokerage arrangements shall conform to Section 2-707 of the Municipal Code. • Easements: The City will receive current fair market value for the removal of restrictive easements or access rights previously paid for by the City or other governmental agency or reserved in a sale of City property. • Negotiated Sales: Negotiated sales are permitted as provided in the Municipal Code and this Disposition Policy, and may be approved under one of the following conditions: o When a parcel is landlocked. o When the sale to a contiguous owner would correct a site deficiency. o When a fee interest in a pipeline or other right-of-way is no longer required, it may be sold to a contiguous owner. A restrictive pipeline easement of adequate width or other required easements will be reserved from said sale. o When other governmental, public and quasi -public agencies submit acquisition proposals, or any sale is authorized by a two-thirds (2/3) vote of the City Council after a noticed public hearing per Municipal Code Section 2-709. 7. LEASING OF CITY REAL PROPERTY 60A-31 There may be opportunities for the City to lease rather than sell its real property that results in a benefit to the City and its residents. City property shall be considered for leasing when one or more of the following criteria apply: • The property is not required for current municipal use, but is to be held for possible future use and can be leased as an interim measure. • The City requires substantial control over development, use and reuse of the property. • The property has the immediate potential of a high return to the City because of its high demand and type of use, such as commercial and industrial land. • The property can be efficiently utilized by a provider of services needed by the City. The property can be leased to promote a substantial economic development opportunity or enable the provision or community benefit. • The property can only be leased because of legal restraints. For example, property acquired with Land and Water Conservation funds or held as dedicated park land. • The property can provide a substantial community use or benefit to City residents. Process to Determine Community Use/Benefit Classification of City -Owned Property Available for Lease: Upon ratification of this policy, on the first of every month, the City Manager shall provide the RPDC with a list of City -owned properties that are being considered for leasing. The RPDC shall review and recommend the City -owned properties that are classified as having significant community use or benefit potential. No fewer than 75 percent of properties reviewed by the RPDC in each calendar year shall be classified as having significant community use/benefit potential. Lessee Selection: For City -owned properties classified by the RPDC as having significant community use or benefit potential, the City shall first provide written notice of lease availability of these properties to nonprofit community organizations and entities described in Section 5, at least 60 days before notifying the public. After 60 days, competitive offers for lease of City property shall be solicited in the open market. This may be accomplished through a number of marketing techniques, such as Request for Proposals (RFPs), a marketing subscription system, direct advertising, use of a Multiple Listing Service (MLS), listing with a broker, posting the property and any other appropriate means. In certain limited situations, the City may exclusively consider a single proposal for lease of City property. Potential lessees wishing to exclusively negotiate with the City must submit for City staff review a business case with sufficient justification as to how it is capable of optimizing the use of the property and return to the City, thereby negating the need for a 60A-32 competitive process. This information will be included when the lease transaction is presented for City Council approval. Leasehold proposals shall be evaluated in terms of: • the amount of consideration offered in the form of rent. • the financial feasibility of the proposal. • the capability, expertise and experience of the potential lessee with respect to the proposed leasehold development and operation. • if new development is proposed, a development plan that includes a description of the development team and its qualifications. • the identity of each person or entity that will have an interest in the proposed lease. • community use and public benefits to be derived (if any). Rate of Return: The City shall obtain fair market rents for its leases commensurate with the highest and best use of the property. The fair market rent shall be based on an appraisal that complies with the definition of Market Rent found in the Uniform Standards of Professional Appraisal Practice (USPAP) published by the Appraisal Foundation. The appraisal shall be no more than six months old at the time the lease transaction is presented for City Council approval. If the cost of an appraisal is not justified by the anticipated rents, the City may choose an alternative method to establish rent. City leases shall contain terms and conditions which will sustain a fair rate of return throughout the duration of the lease. Rental Terms: Rental terms may be negotiated on the basis of fixed rates (flat rent leases) or percentages of the lessee's gross income derived from business conducted on the property, with a provision for a minimum rental (percentage leases). Flat Rate Leases: • Market Rate Adjustments: Flat rate leases shall provide for upward adjustment of rent at least every ten (10) years to current fair market rent. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. • Consumer Price Index Adjustments: Flat rate leases shall provide for upward adjustment of rent in the interval term between market rate adjustments by changes in the consumer price index. In no event shall the adjusted rent be lower than the rent in existence immediately preceding the adjustment. The index used for consumer price index adjustments will be the All Urban Consumers index for Los Angeles - Riverside - Orange County, California with a base year of 1982-84. If the U.S. Department of 60A-33 Labor indices are no longer published, another substitute index generally recognized as authoritative will be used. Flat rate leases may include pre -determined periodic increases to rent instead of consumer price index adjustments. These periodic increases would occur at least every five (5) years. Percentage Leases: Minimum Rent: The minimum rent component for a new percentage lease shall be set at no less than eighty percent (80%) of the fair market rent as defined above. In certain cases, a portion of the minimum rent may be abated for new construction or redevelopment on the leasehold. The minimum rent shall be adjusted upward throughout the duration of the lease at intervals of not more than every five (5) years to reflect no less than eighty percent (80%) of the average annual rent actually paid or accrued during the three (3) years preceding the adjustment. In no event shall the adjusted minimum rent be less than the minimum rent in existence immediately preceding the adjustment. • Percentage Rates: Percentage leases shall provide for adjustment of percentages rates every ten (10) years to current fair market rates. For the purposes of determining fair market rent percentage rates, the City shall adopt and publish a schedule of benchmark percentage rates that will be updated to current market rates on a periodic basis by appraisal. The appraisal will be guided by prevailing market percentage rates for similar operations primarily within the Southern California area. Rent Arbitration: Leases shall provide for binding arbitration when the City and lessee cannot agree on the new rent for a rental period under review. The City and lessee shall each select a professional independent real estate appraiser who in turn will select a third independent real estate appraiser to determine the fair market rent. If the two selected appraisers fail to mutually select a third appraiser, then the third appraiser shall be determined in accordance with the rules of the American Arbitration Association. The City and lessee shall pay the cost of its own selected appraiser and equally share the cost of the third appraiser. Appraisal Assumptions: City leases shall include a definition of the fair market value to be used to set rent and identify the premise for that value. In establishing the fair market value of leased property, any appraisal shall consider the property as a fee simple absolute estate and as vacant and available for lease or sale for the authorized purposes of the lease at the commencement of the rental period under review. Rates established for purposes of periodic percentage rental adjustments shall not consider any abatement as may be appropriate in a "new" development of vacant land. It shall also be assumed that all required regulatory approvals to permit the use authorized in the lease have been obtained. Lease Term: 60A-34 • A lease shall require a majority vote of all members of the City Council. The length of lease term shall be based on the sale price or lease rental income from disposition of City -owned real estate assets and interests and that provides substantial Community Benefits, as defined in Section I of the policy, to City residents, especially its Vulnerable Residents. Lease Amendments: Amendments to long term leases require City Council approval. The City's agreement to an amendment may be contingent upon updating sections of the lease to incorporate current City standard lease provisions and an adjustment to fair market rent. Subleases: A lessee may sublease all or part of the leased property to a qualified sub- lessee subject to approval by the City. No sublease shall be approved which would be detrimental to the City's rights under the master lease or for a use that is not consistent with uses allowed by the master lease. The City Manager may authorize subleases which meet these conditions and which do not require amendment of the master lease. Unless special circumstances exist, leases shall provide for the City to receive a minimum of fifty percent (50%) of the incremental gross rental revenues due to the lessee from subleases. Leasehold Financing: The City will not subordinate its fee interest to encumbrances placed against any leasehold by a lessee. The City Manager may approve appropriate financial encumbrances of the leasehold interest, which provide that all loan proceeds are used for authorized improvement of the property until the leasehold is fully developed in accordance with the lease. City staff shall take appropriate steps to review the proposed financing and insure that loan proceeds go into the leasehold. Maximum loan proceeds shall not be in excess of seventy-five percent (75%) loan -to -value, where "value" refers to the leasehold 60A-35 improvements, as determined by a lender's appraisal which has been reviewed and approved by City staff. The loan term shall not exceed the term of the lease. Loans or refinancing in the form of encumbrances against the lease for the purpose of reducing equity or financing the sale of leasehold interest will not be allowed until the property is fully developed for uses authorized in the lease. After the property is developed, such financing may be permitted so long as there is also substantial benefit to be gained by the City. This may take the form of either a percentage share of the loan proceeds or an upward adjustment to the rent, either of which shall be based on commercially reasonable comparables found in the market. Leasehold Improvements: Leasehold improvements installed by lessees shall be removed at the lease termination without cost to the City, or will revert to the City, at the City's option. All leasehold improvements and alterations require prior written approval of the City Manager. Maintenance and Utilities Responsibility: City leases shall require the lessee to maintain all improvements on the property at its own expense and be responsible for the cost of all utilities. Leases for multi -tenanted space shall include specific requirements delineating appropriate responsibilities. Lease Audits: All percentage leases shall be subject to audit in the first year of operation to establish proper reporting procedures and at least once every three (3) years thereafter. More frequent audits may be made if appropriate. The City shall reserve the right to audit all other leases and agreements subject to this Policy. Leasehold Assignments: Requests for assignment of leasehold interest shall be evaluated on the same basis as the criteria used in evaluating a leasehold proposal. The City Manager may authorize assignments which do not require amendment of the master lease. Consent may be contingent on the payment of additional consideration to the City, either as a percentage share of the purchase price of the leasehold interest or an upward adjustment to the rent. Either of which shall be based on commercially reasonable comparables found in the market. If new financing is involved in the sale, the requirements of 'Leasehold Financing' shall apply. Lease Extensions & Renewals: Requests from existing lessees for lease extensions or renewals may be considered if such proposals promote capital investment and redevelopment of City property. Whenever an existing lessee is seeking renewal of an expiring leng terra lease, the City Manager will bring the issue before the applicable City Council Committee with an appropriate recommendation. In addition to the criteria used to assess new lease proposals, City staff also will review the lessee's history with respect to: maintenance of the property; compliance with existing lease terms; prompt rent payments; and a rental return consistent with maximizing the property's full potential. The lessee must propose capital investment that: will increase the value or the useful life of the leasehold Z •. improvements by an amount more than can be reasonably amortized over the remaining lease term; is not recurring in nature; and is at least ten percent (10%) or more of the value of the existing improvements. It specifically should exclude expenditures to correct deferred maintenance and expenditures for repairs to keep the existing improvements in good condition. The length of any extended lease term shall be calculated by the same method used for calculating the length of new leases. City's Interest in Leasehold Improvements: City lease agreements provide the City the right to assume ownership of the leasehold improvements at the end of the lease. The value of the City's interest in the leasehold improvements can be appraised using widely accepted appraisal methods. In the event the City grants a lessee a lease extension, the City shall be compensated by an amount equal to the change in present value attributable to the deferral of its interest in the leasehold improvements. This amount either can be paid as an upfront payment at the beginning of the extended term or amortized over time with appropriate interest applied. The City shall offset from the value of its interest in the leasehold improvements any increased economic benefit derived from an extended lease. The City shall not receive any compensation for its interest in the leasehold improvements on leases extended prior to the last twenty percent (20%) of the existing term. Security Deposits: The standard security deposit for a new lease agreement shall be equivalent to three (3) month's rent. The security deposit may take the form of cash, an instrument of credit or a faithful performance bond. For a lessee making a substantial investment in improvements, the security deposit will be refunded upon completion of the improvements. Transaction Processing Fees: The City may charge a transaction processing fee in accordance with the schedule of adopted fees. The fee may be waived for transactions that provide benefit to the City. Nothing in this section shall preclude the City from negotiating terms or conditions that may vary from these requirements should that be necessary or required under the particular circumstances of the proposed lease transaction. 60A-37 Attachment A – Municipal Code on Sale of Real Property Sec. 2-706. - Sale of real property—Procedure. After authorization by the council of the sale of a parcel of real property, a sale shall be scheduled and conducted by the director of public works or by his designated deputy. All sales shall be made to the highest bidder subject to final confirmation by the council. Notice that such sale is to be conducted shall be given by publication at least once in a newspaper of general circulation printed, published, and circulated in the city and by sending written notice to all persons who had requested notice and to all persons suggested by department heads as prospective bidders, such notice to be published and mailed at least ten (10) days prior to the date of sale. Sealed bids may be required or oral bids may be provided for. Sealed bids or written offers to purchase must be accompanied by a deposit of one (1) percent of the amount of the minimum bid in the form of cash, or by cashier's or certified check. If oral bids are permitted, after any sealed bids are opened and any written bids are announced, any person present may submit an oral bid provided that any bid may be disregarded which does not exceed the highest bid theretofore made by at least one (1) percent of such highest bid. The successful bidder must deliver immediately following the declaration of sale, a written statement of his bid signed by the bidder, together with an initial deposit of ten (10) percent of the amount of his bid. The deposit may be in the form of a personal check provided such check is replaced before the close of business on the following business day by cash or by cashier's or certified check. Failure to deposit such written statement of bid or said ten (10) percent of the bid price in the manner stated may be considered a withdrawal of the bid. If a personal check is not replaced as required, a forfeit of one (1) percent of the sales price, as stated in the written statement of the bid, shall be required. The purchase of the property may then be offered to the second highest bidder of record. (Code 1952, § 2613; Ord. No. NS -128, § 1, 8-15-55; Ord. No. NS -1265, § 1, 8-4-75) Sec. 2-706.1. - Same—Sale only to owners of adjoining property. Upon the written recommendation of the city manager, the council may determine that the property being offered for sale can have real value only to a certain owner or owners of adjoining property and could be used by other persons only for the purpose of nuisance value to such owners of adjoining or abutting property. After such determination has been made as next hereinabove provided for, the council may by direct negotiation, provide for the sale of the real property covered thereby, without compliance with the auction, public sale, or method of payment requirements in this article provided for. (Ord. No. NS -1265, § 2, 8-4-75) Sec. 2-706.2. - Same—Method of payment. Sales of real property shall be on an all cash basis with the following exception: Upon written recommendation of the city manager and approval by the council, a parcel of surplus real property may be sold on such credit terms as are deemed to be necessary in each case. After the required down payment has been made, the balance of the purchase price shall be secured by a note and deed of trust. The credit payment period shall not exceed fifteen (15) years from the date of execution of the trust deed. Interest shall be at the prevailing rate in the community allowed by the Federal Housing Administration (FHA) as of the date of the public sale, but shall not include any FHA mortgage insurance premium. (Ord. No. NS -1265, § 2,8-4-75) Sec. 2-707. - Same—Broker listing; maximum commission; nonliability of city agent. The city council, when it determines that any real property owned by the city be disposed of, may authorize the director of public works to execute a written listing contract to find bidders with a licensed real estate agent or broker, and may specify that said property be placed in multiple listing. Said listing contract shall specify the maximum commission to be paid if the property is sold, which said commission shall in no case exceed six (6) percent of the sale price on property improved with a habitable building and shall in no case exceed ten (10) percent on unimproved property. No personal liability shall attach to any agent of the city who signs any such contract on behalf of the city. (Code 1952, § 2615; Ord. No. NS -256, § 1, 6-3-57; Ord. No. NS -1082, § 1, 6-21-71; Ord. No. NS -1265, § 11, 8-4-75) Sec. 2-708. - Same—Payment of commission; division of commission. In the event an agent covered by the contract, as set out in section 2-707, procures a bidder who submits the highest bid and to whom the sale is made and completed in due course, the commission provided in said contract shall be paid to said agent. In event an agent covered by the contract submits the highest written bid which conforms in all respects to the city's invitation to bid and the provisions of section 2-706, and an oral bid conforming to said requirements is made by a different bidder and results in the sale being made and completed to said different oral bidder, then one-half ('/z) of the commission originally fixed shall be paid to the listing agent who procured the original highest written conforming bid. If the successful oral bidder was procured and is represented by a licensed real estate agent or 60A-39 broker and the sale is made and completed, then the other one-half ('/z) of said commission shall be paid to such agent or broker. In cases where no listing contract exists and the successful bidder is represented by a licensed real estate broker, upon approval by the council, a full commission will be paid to such broker under the following conditions: (1) The buyer's written or oral bid must be submitted by the broker, (2) The broker must be designated as such in the buyer's purchase offer or in the written statement of his bid, and (3) The sale to the buyer must be consummated. (Code 1952, § 2616; Ord. No. NS -256, § 1, 6-3-57; Ord. No. NS -1265, § 5, 8-4-75) Sec. 2-709. - Exceptions. The provisions in this article regulating the sale of surplus city personal property or the sale of city real property shall not apply to any sale of such property made to any city, county, city and county, state or federal government, or any political subdivision of any of them, or to any nonprofit public benefit corporation formed or controlled by the city, or to any sale which is exempted from such provisions by two-thirds ( 2/3 ) vote of the city council after a duly noticed public hearing, and such sales may be made upon a basis of direct negotiations without the necessity for public auction or competitive bidding, when the authority to so negotiate has been granted by the city council. (Code 1952, § 2614; Ord. No. NS -128, § 2,8-15-55; Ord. No. NS -1006, § 27,4-6-85) Sec. 2-710. - Exchange of real property. Upon written recommendation of the city manager, the council may authorize the exchange of any parcel of city -owned real property which has been declared to be surplus to the city's needs for any other real property, whether publicly or privately owned, for which the city has a public need. Upon such authorization, an exchange may be concluded by direct negotiation without compliance with the auction or public sale requirements in this article provided for. (Ord. No. NS -1265, § 6, 8-4-75) REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: LEAGUE OF CALIFORNIA CITIES VOTING DELEGATE (STRATEGIC PLAN NO. 51 1) C Y MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 15' Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Designate Mayor Pro Tem Michele Martinez as a voting delegate and select up to two alternates for the League of California Cities' Annual Conference's General Assembly scheduled for September 14, 2018. BACKGROUND: The League of California Cities' (League) annual conference is scheduled from September 12-15, 2018, in Long Beach. Of particular significance at the conference, the annual League Business Meeting will request its membership to take action on conference resolutions. To expedite the conduct of business, every City is being requested to designate a voting representative and two alternates who will represent the City at the League Business Meeting. League bylaws indicate that each city is entitled to one vote and take a position on matters affecting municipal or League policy. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 - Community Health, Livability, Engagement & Sustainability, Objective #1 (Establish a comprehensive community engagement initiative to expand access to information and create opportunities for stakeholders to play an active role in discussing public policy and setting priorities). FISCAL IMPACT There is no fiscal impact associated with this action. ,--A A4',"� Maria D. Huizar Clerk of the Council Exhibit: 1. League of California Cities Correspondence — Designation of Voting Delegates and Alternates Ll11 o• l - fl 20 LEAGUE° 1400 K Street, Suite 400 • Sacramento, OF CALIFORNIA California 95814 YEARS Phone: 916.658.8200 Fax: 916.658.8240 I.: I; CITIES www.cacities.org Council Action Advised by July 31, 2018 May 17, 2018 TO: Mayors, City Managers and City Clerks RE: DESIGNATION OF VOTING DELEGATES AND ALTERNATES League of California Cities Annual Conference — September 12 - 14, Long Beach The League's 2018 Annual Conference is scheduled for September 12 —14 in Long Beach. An important part of the Annual Conference is the Annual Business Meeting (during General Assembly), scheduled for 12:30 p.m. on Friday, September 14, at the Long Beach Convention Center. At this meeting, the League membership considers and takes action on resolutions that establish League policy. In order to vote at the Annual Business Meeting, your city council must designate a voting delegate. Your city may also appoint up to two alternate voting delegates, one of whom may vote in the event that the designated voting delegate is unable to serve in that capacity. Please complete the attached Voting Delegate form and return it to the League's office no later than Friday, August 31, 2018. This will allow us time to establish voting delegate/alternate records prior to the conference. Please note the following procedures are intended to ensure the integrity of the voting process at the Annual Business Meeting. Action by Council Required. Consistent with League bylaws, a city's voting delegate and up to two alternates must be designated by the city council. When completing the attached Voting Delegate form, please attach either a copy of the council resolution that reflects the council action taken, or have your city clerk or mayor sign the form affirming that the names provided are those selected by the city council. Please note that designating the voting delegate and alternates must be done by city council action and cannot be accomplished by individual action of the mayor or city manager alone. Conference Registration Required. The voting delegate and alternates must be registered to attend the conference. They need not register for the entire conference; they may register for Friday only. To register for the conference, please go to our website: www.cacities.org. In order to cast a vote, at least one voter must be present at the Business Meeting and in possession of the voting delegate card. Voting delegates and alternates need to pick up their conference badges before signing in and picking up the voting delegate card at the Voting Delegate Desk. This will enable them to receive the special sticker on their name badges that will admit them into the voting area during the Business Meeting. Transferring Voting Card to Non -Designated Individuals Not Allowed. The voting delegate card may be transferred freely between the voting delegate and alternates, but only between the voting delegate and alternates. If the voting delegate and alternates find themselves unable to attend the Business Meeting, they may not transfer the voting card to another city official. • Seating Protocol during General Assembly. At the Business Meeting, individuals with the voting card will sit in a separate area. Admission to this area will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate. If the voting delegate and alternates wish to sit together, they must sign in at the Voting Delegate Desk and obtain the special sticker on their badges. The Voting Delegate Desk, located in the conference registration area of the Sacramento Convention Center, will be open at the following times: Wednesday, September 12, 8:00 a.m. — 6:00 p.m.; Thursday, September 13, 7:00 a.m. — 4:00 p.m.; and Friday, September 14, 7:30 a.m.- 11:30 a.m.. The Voting Delegate Desk will also be open at the Business Meeting on Friday, but will be closed during roll calls and voting. The voting procedures that will be used at the conference are attached to this memo. Please share these procedures and this memo with your council and especially with the individuals that your council designates as your city's voting delegate and alternates. Once again, thank you for completing the voting delegate and alternate form and returning it to the League's office by Friday, August 31. If you have questions, please call Kayla Curry at (916) 658-8254. Attachments: Annual Conference Voting Procedures Voting Delegate/Alternate Form �. 1 Annual Conference Voting Procedures One City One Vote. Each member city has a right to cast one vote on matters pertaining to League policy. 2. Designating a City Voting Representative. Prior to the Annual Conference, each city council may designate a voting delegate and up to two alternates; these individuals are identified on the Voting Delegate Form provided to the League Credentials Committee. Registering with the Credentials Committee. The voting delegate, or alternates, may pick up the city's voting card at the Voting Delegate Desk in the conference registration area. Voting delegates and alternates must sign in at the Voting Delegate Desk. Here they will receive a special sticker on their name badge and thus be admitted to the voting area at the Business Meeting. 4. Signing Initiated Resolution Petitions. Only those individuals who are voting delegates (or alternates), and who have picked up their city's voting card by providing a signature to the Credentials Committee at the Voting Delegate Desk, may sign petitions to initiate a resolution. 5. Voting. To cast the city's vote, a city official must have in his or her possession the city's voting card and be registered with the Credentials Committee. The voting card may be transferred freely between the voting delegate and alternates, but may not be transferred to another city official who is neither a voting delegate or alternate. 6. Voting Area at Business Meeting. At the Business Meeting, individuals with a voting card will sit in a designated area. Admission will be limited to those individuals with a special sticker on their name badge identifying them as a voting delegate or alternate. Resolving Disputes. In case of dispute, the Credentials Committee will determine the validity of signatures on petitioned resolutions and the right of a city official to vote at the Business Meeting. LEAALI U EO OF C]A CITIES CITY: 2018 ANNUAL VOTING DELEGATE/ALTERNATE FORM Please complete this form and return it to the League office by Friday, August 31, 2018. Forms not sent by this deadline may be submitted to the Voting Delegate Desk located in the Annual Conference Registration Area. Your city council may designate one voting delegate and up to two alternates. In order to vote at the Annual Business Meeting (General Assembly), voting delegates and alternates must be designated by your city council. Please attach the council resolution as proof of designation. As an alternative, the Mayor or City Clerk may sign this form, affirming that the designation reflects the action taken by the council. Please note: Voting delegates and alternates will be seated in a separate area at the Annual Business Meeting. Admission to this designated area will be limited to individuals (voting delegates and alternates) who are identified with a special sticker on their conference badge. This sticker can be obtained only at the Voting Delegate Desk. 1. VOTING DELEGATE Name: Title: 2. VOTING DELEGATE - ALTERNATE 3. VOTING DELEGATE - ALTERNATE Name: Title: PLEASE ATTACH COUNCIL RESOLUTION DESIGNATING VOTING DELEGATE AND ALTERNATES. KO ATTEST: I affirm that the information provided reflects action by the city council to designate the voting delegate and alternate(s). Name: E-mail Mayor or City Clerk Phone: (circle one) (signature) Date: Please complete and return by Friday, August 31, 2018 League of California Cities FAX: (916) 658-8240 ATTN: Kayla Curry E-mail: kcurry@cacities.org 1400 K Street, 4a' Floor (916) 658-8254 Sacramento, CA 95814 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: PUBLIC HEARING — RECOVERY OF UNCOLLECTED COSTS FOR ABATEMENT OF DANGEROUS AND ABANDONED BUILDINGS AND APPROVAL OF APPROPRIATION ADJUSTMENT (STRATEGIC PLAN NO. 5,4) 4 r CITt MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1s' Reading ❑ Ordinance on 2n1 Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution affirming the Fiscal Year 2017-2018 Dangerous and Abandoned Building Program Report and authorize the transmittal of uncollected Dangerous and Abandoned Building charges to the office of Auditor -Controller, County of Orange. 2. Approve an appropriation adjustment recognizing $28,332.87 in the Special Repair and Demolition Fund revenue account (no. 12116002-53507) for fiscal year 2018-19 and appropriating the same in the expenditure account (no. 12116540-62300). DISCUSSION The City's Dangerous and Abandoned Building (DABS) Program has proven to be an effective tool to abate dangerous and abandoned structures that create an attractive nuisance and may harbor illegal activity. The abatements are accomplished by boarding up the structures and in some cases demolishing the building. Property owners are notified and given 2 to 30 days to abate the illegal conditions. If the property owner does not correct the violations within the required timeframe, the City through its contractors, will perform the work. All property owners have been notified of the outstanding abatement costs and the scheduling of this public hearing. Each year, the City finds it necessary to seek legal recourse in order to recover the uncollected costs, which include staff related costs, expended for abatement of dangerous and abandoned properties. The City maintains a detailed account of all costs incurred in the abatement of the public nuisance pursuant to the municipal code. The outstanding charge for work performed on six parcels is $28,332.87 (Exhibit 1). The property owner information is provided in Exhibit 2. The most effective method of collection is to submit these charges to the office of the County Auditor/Controller in order that they may be placed as a lien on the property tax rolls. Charges must be submitted to the County of Orange by their deadline of August 10, 2018. 75A-1 Recovery of Uncollected Costs for Abatement of Dangerous and Abandoned Buildings and Approval of Appropriation Adjustment July 3, 2018 Page 2 STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal # 5 - Community Health Livability, Engagement and Sustainability, Objective # 4 (Support neighborhood vitality and livability). FISCAL IMPACT The recovered charge will result in a $ 28,332.87 deposited in the Special Repair and Demolition Fund (Account No. 12116002-53507). Approval of the appropriation adjustment will appropriate the $28,332.87 in Code Enforcement's Special Repair and Demolition Expenditure Fund (Account No. 12116540-62300). Minh Thai Executive Director Planning and Building Agency ER:rb S:RFCA107-03-18\PBA Uncollected Cost for Abatement DAB Exhibits: 1. Parcel Assessment Amounts 2. Property Owner Listing 3. Resolution APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez (15A) Executive Director Finance & Management Services Agency 75A-2 AC621-05A— Form 132 Special Assessment Add Transactions Jurisdiction 061 Santa Ana Type of Tax CC=2 Date July 3. 2018 PARCEL NUMBER 6-15 ASSESSMENT AMOUNT 16-23 010-121-43 $ 4,190.00 405-163-30 $ 2,698.20 398-132-01 $ 6,739.89 400-251-03 $ 2,619.25 403-185-11 $ 6,232.60 398-208-08 $ 5,852.93 TOTAL $ 28,332.87 EXHIBIT 1 75A-3 75A-4 PROPERTY OWNER LISTING FISCAL YEAR 2017-2018 ADDRESS PARCEL NO. OWNER/ADDRESS ASSESJMEN 1 Robert M. Canvin 941 W. Bishop St. AP# 010-121-43 941 W. Bishop $ 4,190.00 Santa Ana, CA 92703 Ramon V. Prado 1117 S. Main St. AP# 405-163-30 Bertha G. Prado $ 2,698.20 3455 S. Sheffield Road Santa Ana. CA 92704 Main State, LLC 1327 N. Main St. AP# 398-132-01 Christopher P. Ayayo, Agent for Svc. $ 6,739.89 3070 Bristol Street, Suite 120 1638 E. 170 St. AP# 400-251-03 Bill Perry, Agent for Service $ 2,619.25 1830 Port Taggart Place Newport Beach, CA 92620 1815 S. Main Street Law Office, LLC 1815 S. Main St. AP# 403-185-11 Mike Ditch, Agent for Service $ 6,232.60 32565 B Golden Lantern Street #316 310-312 S. Main St. AP# 398-208-08 Mike Ditch, Agent for Service 32565 B Golden Lantern Street #316 Dana Point. CA 92629 EXHIBIT 2 75A-5 $ 5,852.93 75A-6 LS 7.3.18 RESOLUTION NO 2018-xxx A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CONFIRMING THE COSTS OF SECURING AND/OR DEMOLITION OF VARIOUS STRUCTURES DECLARED TO BE PUBLIC NUISANCES; MAKING, CONFIRMING AND LEVYING ASSESSMENTS FOR SUCH COSTS; AND ORDERING SUCH COSTS TO BE RECORDED WITH THE ORANGE COUNTY RECORDER'S OFFICE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. The City's Dangerous and Abandoned Buildings (DABS) Program has proven to be an effective tool to abate dangerous and abandoned structures that create an attractive nuisance for children and provide harborage for illegal activity. The abatements are accomplished by board -ups and/or demolition. B. Pursuant to Section 17-40 of the Santa Ana Municipal Code, the Executive Director of the Planning and Building Agency has submitted an itemized report, a copy of which is on file with the Clerk of the Council, showing the costs of securing property and/or demolition of various structures carried out by the City of Santa Ana upon each individual lot or parcel of land where such work was done. C. The Executive Director of the Planning and Building Agency has given notice of the public hearing as required by law, in which the 3'd day of July, 2018, at the hour of 5:45 p.m. was fixed as the time, and 22 Civic Center Plaza, Santa Ana as the place, where any and all persons interested in said report might be heard. D. The City Council of the City of Santa Ana, at said time and place has received, heard, and considered said report and all objections by property owners liable to be assessed for the abatement, and directed such modification of said report as it has deemed necessary. Section 2. Each and every objection to said work and the costs thereof is hereby overruled; said report, a copy of which is on file with the Clerk of the Council, is hereby confirmed; the cost of abatement work done in front of or upon each lot or parcel of real property, as shown on Exhibits 1 and 2, which are incorporated by this reference as though fully set forth herein, and the amounts therein on such assessments shall become due thirty (30) days after the adoption of this Resolution. Exhibit 3 75A-7 LS 7.3. 18 Section 3. This Resolution shall take effect immediately upon its adoption by the City Council and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. Section 4. The Executive Director of Planning and Building Agency is hereby directed to file a certified copy of said report and this Resolution with the County Recorder's Office, the County Auditor, County Assessor, and County Tax Collector on or before August 10, 2018. Section 5. The County Auditor is requested to enter the assessments on the county tax rolls. Section 6. The County Tax Collector is requested to collect the assessment at the time and in the manner of ordinary municipal taxes. Section 7. The City of Santa Ana hereby certifies that the special assessments, special taxes, parcel taxes, charges and /or fees which are to be placed on the fiscal year 2017-2018 property tax roll have been duly adopted in accordance with State law and are legally valid. ADOPTED this _ day of July, 2018 APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: Lisa Storck Assistant City Attorney AYES: Councilmembers NOES: ABSTAIN NOT PRESENT: Councilmembers Councilmembers Councilmembers 75A-8 Miguel.A. Pulido Mayor LS 7.3.18 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2018- to be the original resolution adopted by the City Council of the City of Santa Ana on July_, 2018. Date: Clerk of the Council, City of Santa Ana 75A-9 AC621-05A — Form B2 LS 7.3.18 Jurisdiction 061 Santa Ana Special Assessment Add Transactions Type of Tax C_2 Date July 3. 2018 PARCEL NUMBER 6-15 ASSESSMENT AMOUNT 16.23 010-121-43 $ 4,190.00 405-163-30 $ 2,698.20 398-132-01 $ 6,739.89 400-251-03 $ 2,619.25 403-185-11 $ 6,232.60 398-208-08 $ 5,852.93 TOTAL $ 28,332.87 EXHIBIT 1 75A-10 LS 7.3.18 PROPERTY OWNER LISTING FISCAL YEAR 2017-2015 ADDRESS PARCEL NO. OWNER/ADDRESS ASSESSMENT Robert M. Canvin AP# 010-121-43 941 W. Bishop 941 W. Bishop St. Santa Ana, CA 92703 $ 4,190.00 Ramon V. Prado 1117 S. Main St. AP# 405-163-30 Bertha Prado $ 2,698.20 3455 S.. Sheffield Road Santa Ana, CA 92704 Main State, LLC 1327 N. Main St. AP# 398-132-01 Christopher P. Ayayo, Agent for Svc. $ 6,739.89 3070 Bristol Street, Suite 120 Costa Mesa, CA 92626 SANA Partners, LLC 1638 E. 17'^ St. AP# 400-251-03 Bill Perry, Agent for Service 1830 2,619.25 1830 Port Taggart Place Newport Beach, CA 92620 1815 S. Main Street Law Office, LLC Mike Ditch, Agent for Service 1815 S. Main St. AP# 403-185-11 32565 B Golden Lantern Street #316 $ 6,232.60 Dana Point, CA 92629 Le Sage Real Estate Partners; LLC 310-312 S. Main St. AP# 398-208-08 Mike Ditch, Agent for Service 32565 5,852.93 32565 B Golden Lantern Street #316 Dana Point, CA 92629 EXHIBIT 2 75A-11 75A-12 REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: JULY 3, 2018 TITLE: PUBLIC HEARING — RECOVERY OF UNCOLLECTED COSTS FOR WEED ABATEMENT PUBLIC NUISANCES FOR FISCAL YEAR 2017-2018 (STRATEGIC PLAN NO. 5,4E) iFY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: F17'T:ZeI9 ❑ As Recommended ❑ As Amended ❑ Ordinance on 10 Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution affirming the Fiscal Year 2017-2018 Weed Abatement Program Report and authorizing the transmittal of uncollected weed abatement charges and postings to the Office of Auditor -Controller, County of Orange, for collection. DISCUSSION The Public Works Agency operates a year-round program to maintain private properties free of weeds and rubbish. In accordance with Santa Ana Municipal Code Section 16-55, when unsightly or unsafe conditions are identified, City sanitation inspectors provide a courtesy notice to property owners with a 7 -day Notice to Clean Premises. If the property is not cleaned by the seventh day, a Notice of Abatement is posted and mailed indicating that the City will perform the abatement work through its own contractor after a 10 -day period. If the City performs the clean-up, property owners are notified of the charges and are provided an opportunity to submit payment to the City, averting a property assessment via the Orange County Auditor -Controller's Office. When a property is posted a second time within 12 months for the same violation, the City assesses a re - posting charge. Property owners have a minimum of 30 days and up to the time that the City submits the collection order to the County to make their payment(s). This year, there is $1,917.27 to date in outstanding charges for fourteen parcels cleaned by the City contractor and posted by City Staff (Exhibit 1). Filing a property assessment through the County is the most effective method of collecting the outstanding charges. The charges are placed on the corresponding property tax rolls and paid through regular property tax assessments to the County of Orange. If a property is in default, the charges are collected when the property changes ownership. The County deadline for inclusion is August 10, 2018. The total amount of outstanding charges is subject to change, due to payments received following the Council approval date but before the County deadline. The final charges will be submitted directly to the County for collection after affirmation by the Council. There is no County fee for this service. 7513-1 75B-2 Public Hearing — Weed Abatement Public Nuisance Report 2017-18 July 3, 2018 Page 2 ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #5 - Community Health, Livability, Engagement & Sustainability, Objective #4 (support neighborhood vitality and livability), Strategy E (implement innovative code enforcement practices and strategies to address critical livability issues citywide). FISCAL IMPACT All r� eunev s, collected will be deposited into the Sanitation Fund (Account No. 06817002-53710). Fuadeiss, P.E., P.L.S. Executi a Director Public orks Agency FS/PG Exhibit 1: Resolution APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez # , b g Executive Director Finance & Management Services Agency 75B-3 75B-4 jmf 6/8/18 RESOLUTION NO. 2018 -XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA CONFIRMING THE COSTS OF WEED, RUBBISH, AND GARBAGE ABATEMENT; MAKING, CONFIRMING, AND LEVYING ASSESSMENTS FOR SUCH COSTS; AND ORDERING A COPY OF THE REPORT THEREOF TO BE FILED WITH THE COUNTY AUDITOR, ASSESSOR, AND TAX COLLECTOR BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. Pursuant to Section 16-55 of the Santa Ana Municipal Code, the Executive Director of Public Works has submitted an itemized report, the Weed Abatement Program Report. A copy of this report is on file with the Clerk of the Council, attached as Attachment 1, and incorporated by reference as though fully set forth herein. The report sets forth the costs of the weed, rubbish, and garbage abatement actions carried out by the City of Santa Ana in front of or upon each individual lot or parcel of land where such work was done. B. The Executive Director of Public Works has given notice as required by law, that the 3rd day of July, 2018, at the hour of 5:45 p.m., or as soon as possible thereafter, is fixed as the time, and 22 Civic Center Plaza, Santa Ana, as the place, where any and all persons interested in said report may be heard. C. The City Council of the City of Santa Ana, at said time and place, received, heard, and considered said report and all objections thereto submitted by property owners liable to be assessed for the abatement, and directed such modification of said report as it has deemed necessary. Section 2. Each and every objection to said work and the costs thereof is hereby overruled; Attachment 1 is hereby made and confirmed as an assessment against such lots or parcels respectively. Said assessments are hereby levied, and shall constitute liens on the respective lots or parcels of real property as shown on said report until paid. Section 3. Pursuant to Section 16-58 of the Santa Ana Municipal Code, the Executive Director of Public Works shall file a certified copy of said report and this Resolution with the County Auditor, County Assessor, and County Tax Collector on or before August 10, 2018. Resolution No. 201 &XXX Page 1 of 4 75B-5 jmf 6/8/18 Section 4. The County Auditor is requested to enter each assessment on the county tax rolls. Section 5. The County Tax Collector is requested to collect each assessment at the time and in the manner of ordinary municipal taxes. Section 6. The City of Santa Ana hereby certifies that the special assessments, special taxes, parcel taxes, charges and/or fees which are to be placed on the fiscal year 2017-2018 property tax roll have been duly adopted in accordance with State law and are legally valid. Section 7. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. ADOPTED this _ day of APPROVED AS TO FORM: Sonia R. Carvalho, City Attorney By: 11V, fi ohn M. Funk Assistant City Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers 2018. Miguel A. Pulido Mayor 75B-6 Resolution No. 2018-)00( Page 2 of 4 jmf 6/8/18 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Clerk of the Council, do hereby certify the attached Resolution No. 2018- to be the original resolution adopted by the City Council of the City of Santa Ana on 2018. Date: Clerk of the Council City of Santa Ana 75B-7 Resolutfon No. 2018-M Page 3 of 4 Jmf 6018 ATTACHMENT CITY OF SANTA ANA FISCAL YEAR 2017-2018 WEED ABATEMENT PROGRAM REPORT Jurisdiction: Santa Ana Type of Tax: B8 AC62LOSA - FORM B2 Special Assessment Add Date: Transactions August, 2018 "m '10%41W,xt ESgas r "vtr rid;. Lit YY..r Z •4,�P r'N �F{fltk}i '$`,( '�^�`r'�4•\i�P Y� L ly�n%i �4 '� u4as2�iMfr `�,:{,:y 002-261-06 68.29 ;.r� t*xt+w r• "a.` �.y»yarts 3 003.113.08 66.06 003-120-44 66.06 007.271-01 68.29 010-053-16 66.06 013.071.01 68.29 014-232-03 66.07 109-521-18 68.29 144-341-07 68.29 198.182-20 66.06 198-182-35 61.19 398.101-03 66.06 398-471-07 68.29 408-103-29 1049.97 ReaolUUon No. 2018 -XXX Page 4 of 4 75B-8