REGULAR MEETING AGENDA Tuesday, February 16, 2021 6

City Council/CSA/CPFA/CHA Agenda Tuesday February 16, 2021

REGULAR MEETING AGENDA

125 E. College Street, Covina, California

Council Chamber of City Hall/Virtual Meeting

Tuesday, February 16, 2021

IMPORTANT NOTICE

This meeting is being conducted utilizing teleconferencing and electronic means consistent with

State of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19

pandemic. In accordance with the Executive Order N-29-20, the Council Chamber will be closed

to the public. As always, the public may view the meeting live on the City’s website at

www.covinaca.gov or on local cable television, Spectrum channel 29 and Frontier Channel 42.

To view from the website, hover over the Departments & Services tab until the drop-down menu

appears and click on City Council Video Library under the City Council header. A live banner

will appear at the start of the meeting.

Meeting Assistance Information: In compliance with the Americans with Disabilities Act, if you

need special assistance to participate in this meeting, please contact the City Clerk’s Office at

[email protected] or 626-384-5430. Notification 48 hours prior to the meeting will enable

the City to make reasonable arrangements to ensure accessibility to this meeting.

Submission of Public Comments: For those wishing to make public comments on non-agenda

and agenda items you may submit comments via email or by phone.

Email: Please submit your comments to [email protected] by 6:00 p.m., Tuesday,

February 16, 2021. Please enter “PUBLIC COMMENT” (and the agenda item number if

applicable) in the subject line. Public Comments will be forwarded to Council for review prior

to the meeting.

Phone: Please email your name and number to [email protected] prior to the close of the public comment period or the close of the comment period for the specific agenda item you wish to provide comment on. Please enter “PUBLIC COMMENT” (and the agenda item number if applicable) in the subject line. Staff will call you at the appropriate time.

CITY COUNCIL/SUCCESSOR AGENCY TO THE COVINA

REDEVELOPMENT AGENCY/COVINA PUBLIC FINANCING

AUTHORITY/COVINA HOUSING AUTHORITY

JOINT MEETING—CLOSED SESSION

6:30 PM


CALL TO ORDER

ROLL/CALL Council/Agency/Authority Members: Walter Allen, III, Patricia Cortez, John C. King, Mayor Pro

Tem/Vice-Chair Jorge A. Marquez and Mayor/Chair Victor Linares

PUBLIC COMMENTS For those wishing to make public comments on closed session items please submit your comments by email to [email protected] by 6:00 p.m., Tuesday, February 16, 2021. Please enter “PUBLIC COMMENT – Closed Session” in the subject line. Public Comments will be forwarded to Council for review prior to the meeting. State Law prohibits the Council/Agency/Authority Members from taking action on any item not on the agenda. Individual speakers are limited to five minutes each, unless, for good cause, the Mayor/Chairperson amends the time limit.

CLOSED SESSION The City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing

Authority/Covina Housing Authority will adjourn to closed session for the following: A. Government Code § 54957.6 – CONFERENCE WITH LABOR NEGOTIATORS

Agency

Designated

Representatives:

Anita Agramonte, Administrative Services Director

Suzanne Stone, Human Resources Manager

Employee

Organizations:

American Federation of State, County and Municipal

Employees (AFSCME); Police Association of Covina (PAC);

Police Management Group (PMG); and Police Supervisors of

Covina (PSC)

B. Government Code § 54957.6 – CONFERENCE WITH LABOR NEGOTIATORS

Agency

Designated

Representatives:

Anita Agramonte, Administrative Services Director

Suzanne Stone, Human Resources Manager

Unrepresented

Employees:

Mid-Management, Supervisory and Professional, and

Confidential and technical Employees; and Executive

Employees (excluding the City Manager)

RECESS

CITY COUNCIL/SUCCESSOR AGENCY TO THE COVINA

REDEVELOPMENT AGENCY/COVINA PUBLIC FINANCING

AUTHORITY/COVINA HOUSING AUTHORITY

JOINT MEETING—OPEN SESSION

7:30 PM

RECONVENE AND CALL TO ORDER

ROLL CALL


PLEDGE OF ALLEGIANCE

Led by Councilmember Allen

INVOCATION

Given by Covina Police Chaplain Chuck Cannizzaro

PRESENTATIONS - NONE.

PUBLIC COMMENTS For those wishing to make public comments on non-agenda and agenda items you may submit comments

via email or by phone. Email: Please submit your comments to [email protected] by 6:00 p.m., Tuesday, February 16, 2021.

Please enter “PUBLIC COMMENT” (and the agenda item number if applicable) in the subject line. Public

Comments will be forwarded to Council for review prior to the meeting.

Phone: Please email your name and number to [email protected] prior to the close of the public comment period or the close of the comment period for the specific agenda item you wish to provide comment on. Please enter “PUBLIC COMMENT” (and the agenda item number if applicable) in the subject line. Staff will call you at the appropriate time. State Law prohibits the Council/Agency/Authority Members from taking action on any item not on the agenda. Individual speakers are limited to five minutes each, unless, for good cause, the Mayor/Chairperson amends the time limit.

COUNCIL/AGENCY/AUTHORITY COMMENTS Council/Agency/Authority Members wishing to make any announcements of public interest or to request

that specific items be added to future Council/Agency/Authority agendas may do so at this time.

CITY MANAGER COMMENTS

CONSENT CALENDAR All matters listed under consent calendar are considered routine, and will be enacted by one motion. There

will be no separate discussion on these items prior to the time the Council/Agency/Authority votes on them,

unless a member of the Council/Agency/Authority requests a specific item be removed from the consent

calendar for discussion. CC 1. Minutes

Staff Recommendation:

Approve the Minutes of the February 2, 2021, Regular Meeting of the City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public Financing Authority/Housing Authority. 2021 02 02 Minutes CC DRAFT

CC 2. Payment of Demands


Approve Payment of Demands in the amount of $2,422,831.89. Agenda Report - Payment of Demands Jan 15 - Jan 28, 2021 - Pdf

mailto:[email protected]


CC 3. Monthly Investment Report of the Treasurer to the City Council and Successor Agency

to the Covina Redevelopment Agency for January 2021


Receive and File. Agenda Report - Monthly Investment Report Ended January 31, 2021 - Pdf

CC 4. Citywide Bus Stop Improvement Project - Final Acceptance and Filing Notice of

Completion


1. Accept the work performed by E.C. Construction Co.;

2. Authorize the City Clerk to file a Notice of Completion for the Citywide Bus Stop

Improvement Project; and

3. Adopt Resolution CC 2021-07 to amend the Fiscal Year 2021-2025 Capital

Improvement Program to increase funding by $135,731 for the Citywide Bus Stop

Improvement Project and appropriate the necessary funds from available Proposition

A Local Return Fund Balance. Agenda Report - Citywide Bus Stop Improvement Project NOC - Pdf

CC 5. Badillo Street Improvements & San Bernardino Road Rehabilitation Project – Award

of Contract to Sequel Contractors Inc. for an Amount Not-to-Exceed $1,653,130


1. Approve plans and specifications for the Badillo Street Improvements & San

Bernardino Road Rehabilitation Project;

2. Award the Contract for the Badillo Streets Improvements & San Bernardino Road

Rehabilitation Project to Sequel Contractors Inc. as the lowest responsive and

responsible bidder in an amount not-to-exceed $1,653,130 and authorize the City

Manager to execute the Contract; and

3. Authorize a contingency amount of 10%, or $165,313, for any unforeseen

construction expenses. Agenda Report - Badillo St Improvements & San Bernardino Rd Rehab Project –

Award of Contract - Sequel Contractors Inc - Pdf CC 6. Approval of Resolution CC 2021-08 to Submit an Application Under the Statewide

Park Development and Community Revitalization Program


Adopt Resolution CC 2021-08 approving the submittal of an application for state

grant funds under the Proposition 68 Statewide Park Development and Community

Revitalization Program for Wingate Park. Agenda Report - Resolution CC 2021-08 Statewide Park Development and

Community Revitalization Program - Pdf CC 7. Comprehensive Annual Financial Report (CAFR) for Fiscal Year Ended June 30, 2020


Receive and file the following reports for Fiscal Year ended June 30, 2020:


• the Comprehensive Annual Financial Report (CAFR) and related Auditor

Communications

• the Independent Accountants' Report on Agreed-Upon Procedures Applied to

Appropriations Limit Agenda Report - CAFR FY Ended June 30, 2020 - Pdf

CC 8. Fiscal Year 2020-21 Mid-Year Budget Update and Adjustments Resolution CC 2021-

09


Staff recommends that the City Council take the following actions:

1. Adopt Resolution CC 2021-09 authorizing budget adjustments for Fiscal Year

2020-21 and receive and file the Fiscal Year 2020-21 Mid-Year Budget

Update; and

2. Adopt Resolution CC 2021-13 amending the Executive Compensation Rules

to add the Deputy City Manager Classification. Agenda Report - Resolution CC 2020-14 FY 2019-20 Mid Year Adjustments - Pdf

CC 9. Revise the Existing Water Utility Superintendent Job Description to Ensure the State

Water Resources Control Board Certificates Meet the City's Water Operating Permit

Requirements and are Relevant to the Required Job Duties


That the City Council approve the request to revise the existing Water Utility

Superintendent Job Description/Specification to ensure the required State Water

Resources Control Board (SWRCB) certifications meet the City's water operating

permit requirements and are relevant to the required job duties. Agenda Report - Water Utility Superintendent - Pdf

CC 10. Consideration of Sending a Letter In Support of the Restoration of Congressional

Earmarks


Direct staff to send a letter in support of the restoration of congressional earmarks. Agenda Report - Letter of Support - Congressional Earmarks - Pdf

CONTINUED PUBLIC HEARING CPH 1. Consideration of Resolutions CC 2021-xx, CC 2021-xx, and CC 2021-xx,

Authorizing Annexation of Territory to City of Covina Community Facilities

District No. 2007-1 (Public Services) (Annexation No. 27), and to Call and Hold

a Special Election (135 E. Badillo Street, Covina)


1. City Council to open the public hearing and consider public testimony; and

2. Continue the public hearing to the meeting of March 16, 2021. Agenda Report - CFD Annexation 27 - Pdf


PUBLIC HEARINGS PH 1. Public Hearing to Consider a Substantial Amendment to the Fiscal Year (FY)

2020-2021 Community Development Block Grant (CDBG) Program Budget for

the “LACDA/City Small Business Grant Assistance Program”


1. Open the public hearing and receive public testimony;

2. Close the public hearing;

3. Adopt Resolution CC 2021-12, approving termination of CDBG Project CV-1043-

19 "CV Emergency Assistance to Microenterprises" program; funding for New Forty-

Sixth Year Community Development Block Grant 2020-2021 project, "LACDA/City

Small Business Grant Assistance Program", as Project Numbers CV1100-20 and

602299-20, and reduction of CDBG Project D96164-20 "Residential Rehabilitation",

and amending the FY 2020-2021 Community Development Budget to reflect these

changes; and

4. Authorize the City Manager or his designee to execute documents related to the FY

2020-2021 CDBG and CDBG-CV funds. Agenda Report - Amendment to FY 2020-21 CDBG Program Budget for

“LACDA/City Small Business Grant Assistance Program” - Pdf PH 2. Resolution CC 2021-06 for General Plan Amendment (GPA) 20-003 to Change

Two Parcels from Low Density Residential to General Commercial; and

Ordinance 21-02 for Zone Changes (ZCH) 20-001 and 20-002 to Change Two

Parcels from C-1 Commercial Zone (Neighborhood Stores) to C-2 Commercial

Zone (Neighborhood Shopping Center) at 101 S. Azusa Ave. and 905 E. Wingate

St., and Zoning Code Amendment (ZCA) 20-005 to Eliminate the C-1

Commercial Zone (Neighborhood Stores)


Adopt Resolution CC 2021-06 for General Plan Amendment (GPA) 20-003 to change

two parcels from Low Density Residential to General Commercial, and making a

determination of exemption under CEQA; and Waive full reading, read by title only,

and introduce the first reading Ordinance 21-02, “An Ordinance of the City Council

of City of Covina California, approving Zone Changes (ZCH) 20-001 and 20-002, to

change the zoning classification for two parcels from C-1 Commercial Zone

(Neighborhood Stores) to C-2 Commercial Zone (Neighborhood Shopping Center)

(APN: 8428-023-001 and 8442-006-023) approving Zoning Code Amendment (ZCA)

20-005 to delete Chapter 17.36, C-1 Commercial Zone, of the Covina Municipal Code

in its entirety, and making a determination of exemption under CEQA”. Agenda Report - PH GPA 20-003, ZCH 20-001 and 002, ZCA 20-005 Wingate &

Azusa - Pdf PH 3. Resolution CC 2021-10, Approving a Mitigated Negative Declaration (MND) as

Adequately Prepared in Accordance with California Environmental Quality Act

(CEQA), the Required Findings Under CEQA and the Mitigation Monitoring

and Reporting Program for GPA 19-00, TTM 83202 and SPR 20-004, and

Approving General Plan Amendment (GPA) 19-002, Amending the Land Use


Map of the Covina General Plan to Change the Land Use Designation from

School to High Density Residential for a 0.72-Acre Property, Located at 342

South Fourth Avenue – APN: 8444-010-900; and Resolution CC 2021-11,

Approving Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-

004, a Residential Subdivision for Condominium Purpose and the Development

of the Property for 10-Unit Townhouses on Approximately 0.72 Acres of Land

Zoned RD Residential Zone (Multiple-Family), Located at 342 South Fourth

Avenue – APN: 8444-010-900


Adopt Resolution CC 2021-10 approving a Mitigated Negative Declaration (MND)

as adequately prepared in accordance with California Environmental Quality Act

(CEQA), the required findings under CEQA and the Mitigation Monitoring and

Reporting Program for GPA 19-00, TTM 83202 and SPR20-004, and approving

General Plan Amendment (GPA) 19-002, amending the Land Use Map of the Covina

General Plan to change the Land Use designation from School to High Density

Residential for a 0.72-acre property, located at 342 South Fourth Avenue – APN:

8444-010-900; and Adopt Resolution CC 2021-11, approving Tentative Tract Map

(TTM) 83203 and Site Plan Review (SPR) 20-004, a residential subdivision for

condominium purpose and the development of the property for 10-unit townhouses on

approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family),

located at 342 South Fourth Avenue – APN: 8444-010-900. Agenda Report - PH Resolutions CC 2021-10 & 2021-11 342 S Fourth Ave - Pdf

PH 4. Public Hearing for Consideration of Adopting Resolution CC 2021-14 Amending

Existing Water Rates


1. That the City Council conduct the Public Hearing and if it is determined that a

majority protest does not exist adopt Resolution CC 2021-14 establishing a new five-

year schedule of water rates within the areas serviced by the City’s Water Division to

address wholesale water cost increases and future water system capital improvement

needs; and

2. Close Public Hearing and adopt new five-year schedule of water rates within the

areas serviced by the City’s Water Division. Agenda Report - Resolution CC 2021-14 Amending Existing Water Rates - Pdf

CONTINUED BUSINESS - NONE.

NEW BUSINESS - NONE.

ADJOURNMENT

The Covina City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public

Financing Authority/Covina Housing Authority will adjourn to its next regular meeting of the

Council/Agency/Authority scheduled for Tuesday, March 2, 2021, at 6:30 p.m. for closed session

and at 7:30 p.m. for open session inside the Council Chamber at City Hall, located at 125 East

College Street, Covina, California, 91723.


The Covina City Clerk’s Office does hereby declare that, in accordance with California Government Code Section 54954.2(a), the agenda for the Tuesday, February 16, 2021, meeting was posted on February 11, 2021, on the City’s website and near the front entrances of: 1) Covina City Hall, 125 East College Street, Covina; and 2) the Covina Public Library, 234 N. Second Avenue, Covina.

If you challenge in court any discussion or action taken concerning an item on this agenda, you may be limited to raising only

those issues you or someone else raised during the meeting or in written correspondence delivered to the City at or prior to the

City’s consideration of the item at the meeting.

MATERIALS RELATED TO AN ITEM ON THIS AGENDA, AND SUBMITTED TO THE CITY COUNCIL AFTER

PUBLICATION OF THE AGENDA, ARE AVAILABLE TO THE PUBLIC IN THE CITY CLERK’S OFFICE AT 125 E.

COLLEGE STREET, COVINA.

COUNCIL/CSA/CPFA/CHA MINUTES Page 1 of 6 Tuesday, February 2, 2021

MINUTES OF FEBRUARY 2, 2021

REGULAR MEETING OF THE COVINA CITY COUNCIL/SUCCESSOR AGENCY TO

THE COVINA REDEVELOPMENT AGENCY/COVINA PUBLIC FINANCING

AUTHORITY/COVINA HOUSING AUTHORITY HELD IN THE COUNCIL CHAMBER

OF CITY HALL, 125 EAST COLLEGE STREET, COVINA, CALIFORNIA/VIRTUAL

MEETING

This meeting was conducted utilizing teleconferencing and electronic means consistent with State

of California Executive Order N-29-20 dated March 17, 2020, regarding the COVID-19 pandemic.

CLOSED SESSION – None.

CALL TO ORDER

Mayor Linares called the Council/Agency/Authority meeting to order at 7:30 p.m. with all

Councilmembers present.

Mayor Linares announced that no closed session was held and that the meeting was being

conducted in a virtual setting using Zoom and that members of the public may view and listen to

the meting live on the City’s website at covinaca.gov or on cable television Spectrum channel 29

or Frontier channel 42.

ROLL CALL

Councilmembers Present: Walter Allen, III, Patricia Cortez, John C. King, Mayor Pro

Tem/Vice-Chair Jorge A. Marquez, Mayor/Chair Victor Linares.

Councilmembers Absent: None.

Elected Members Present: City Clerk Mary Lou Walczak.

Elected Members Absent: City Treasurer Geoffrey Cobbett.

Staff Members Present: City Manager Chris Marcarello, City Attorney Candice K. Lee,

Police Chief John Curley, Administrative Services Director Anita Agramonte, Community

Development Director Brian Lee, Parks & Recreation/Library Services Director Lisa Evans,

Public Works Director Andy Bullington, Assistant to the City Manager Angel Carrillo, and Chief

Deputy City Clerk Nicole Alvarez.

PLEDGE OF ALLEGIANCE

Mayor Pro Tem Marquez led the Pledge of Allegiance.

INVOCATION

Councilmember John King gave the invocation.

ITEM NO. CC 1


PRESENTATIONS

A. Police Chief Curley Retirement Acknowledgement

City Manager Marcarello gave a brief presentation, highlighting the career of Police Chief Curley.

City Manager Marcarello congratulated Police Chief Curley on a well-deserved retirement. City

Council, Director of Government Affairs Brian Johsz, on behalf of Athens Services, Vernon Police

Chief Tony Miranda on behalf of the Los Angeles County Police Chiefs Association, Phil Ramirez,

on behalf of the Covina Police Volunteers, Los Angeles County Assistant Fire Chief Mike Inman,

Covina Police Captain Povero and Covina Police Captain Walczak on behalf of the Police

Management Group, provided heartfelt comments as they recalled their memories with Police

Chief Curley, wished him well on his new position with Foothill Transit, and thanked Police Chief

Curley’s wife and daughters for their sacrifice.

Police Chief Curley was presented with two plaques: one plaque was presented by Phil Ramirez,

on behalf of the Covina Police Volunteers, in appreciation for his guidance and leadership with

the volunteer program; and the other plaque was presented by Mayor Linares, on behalf of City

Council, which memorialized his time here at the City of Covina.

Police Chief Curley said a few words regarding his retirement and expressed his thanks and

appreciation for all those he has worked with and his friends and family that have supported him.

Two videos were shared: the first video highlighted Police Chief Curley’s career with the City of

Covina; and the second video was of coworkers, colleagues and community members thanking

him for his many years of dedicated service to the City of Covina, congratulating him on his

retirement, and wishing him well.

Councilmember King provided words of admiration to Police Chief Curley.

Police Chief Curley’s daughter, on behalf of her and her sister, commented that their dad has been

great at balancing his home life and work life and it’s clear that he excels in all areas of his life

and expressed how very proud they are of their dad.

Police Chief Curley’s wife, Bobbi, expressed her pride in her husband and thanked City Manager

Marcarello, City Council, Honorable Mayor, the Covina Police Department, and the community

for all their support.

PUBLIC COMMENTS

Public comments were provided via email which were read aloud by Chief Deputy City Clerk

Alvarez and City Clerk Walczak. The comments are summarized below.

Phyllis Meadow commented on Police Chief Curley’s retirement, wished him many successful,

healthy and productive years, and gave him sincere thanks for his many years of service.

Evan Clark requested that City Council represent all community members regardless of their

religious beliefs, to support religious freedom, religious diversity and inclusivity, and to reject

sectarian gifts.


Brienne Bennett commented against invocations and requested that City Council represent all

community members regardless of their religious beliefs, to support religious freedom, religious

diversity and inclusivity.

Sabrina Loesh commented against religion and religious reference in City Council meetings.

Jonathan Hawes requested that City Council call out the crimes of Andre Quintero and Team El

Monte’s embezzlement of $10 million form the El Monte Promise Foundation scholarship fund

and protect the vulnerable residents.

Jolie Key commented in support of opening up Council meetings to all belief and non-belief

systems, or to separate from religion completely.

Arul Teimouri commented against invocations and distribution of religious books to members of

the council and questioned if it is acceptable to give gifts to members of the Council.

Neil Polzin implored City Council to implement a $4/hour increased wage for essential workers

including grocery workers and restaurant and other food workers/servers; requested that Council

add additional restrictions to Covina and at the very minimum send a clear message that Covina

stands with public health mandates; expressed his hope that the Mayor would wear a mask to

Council meetings; and asked the City Attorney to review and offer recommendations to correct

the clear endorsement of religion.

Lauren Polzin commented against offering bibles in the role of a city official.

CITY MANAGER COMMENTS

City Manager Marcarello informed that the Covina Police Department has resumed overnight

parking enforcement but will be taking a phased approach with issuing warnings first, and how to

purchase parking permits. City Manager Marcarello commented regarding the roll-out of vaccines.

COUNCIL/AGENCY/AUTHORITY COMMENTS

Councilmember Allen gave another shout out to Police Chief Curley for being iconic.

Councilmember Allen commented regarding the public comments provided tonight and clarified

that City Council were not given bibles as the public comments suggested, but were given candy

regarding a pantry that gives food out to the homeless.

Councilmember Cortez also commented regarding the public comments made tonight and clarified

that City Council did not pass out bibles, but chocolates.

Councilmember King agreed with Councilmember Cortez’ comments and indicated that different

groups/different cultures have come in to share many different things with City Council and City

Council has always treated everyone with the utmost respect and do not treat anyone differently

because of their beliefs or their approach.

Mayor Pro Tem Marquez also confirmed the items given were chocolates and indicated he’ll reach

out to the City Attorney and City Manager regarding invocations.


Mayor Linares commented that today is about Police Chief Curley and the great police chief he

has been and he tipped his hat off to him and thanked him once again for his service. Mayor Linares

commented that he has spoken to a lot of senior residents and that City Council, staff and the City

Manager have been working hard to work with some health care providers to have a site in Covina

where they can get COVID testing and hopefully vaccines. Mayor Linares expressed his thanks to

Covina resident Barbara Baker for her help and huge support in helping Covina residents make

appointments to get vaccines. He thanked the residents for their support and urged the residents to

stay safe in light of the Super Bowl.

CONSENT CALENDAR

A motion was made by Mayor Pro Tem Marquez, seconded by Councilmember King, to approve

Consent Calendar items CC 1 – 6 as presented.

Motion approved by roll call vote for Consent Calendar items CC 1 – 6 as follows:

AYES: ALLEN, CORTEZ, KING, MARQUEZ, LINARES

NOES: NONE

ABSTAIN: NONE

ABSENT: NONE

CC 1. City Council/Successor Agency to the Covina Redevelopment Agency/Covina Public

Financing Authority/Covina Housing Authority approved the Minutes of the January

19, 2021, Regular Meeting of the City Council/Successor Agency to the Covina

Redevelopment Agency/Covina Public Financing Authority/Housing Authority. CC 2. City Council/Successor Agency to the Covina Redevelopment Agency approved the

Payment of Demands in the amount of $2,995,137.77.

CC 3. City Council accepted the work performed by SKY JTC Corporation; and authorized

the City Clerk to file a Notice of Completion for the Metrolink Parking Station

Improvements Project. CC 4. City Council authorized the reorganization of the Administrative Services Department

Finance Division and took the following actions:

A. Adopted Resolution CC-2021-05 to Amend the Mid-Management,

Supervisory and Professional, and Confidential and Technical Employees

Compensation Rules to Reinstate the Finance Manager classification,

including Job Description and Salary Schedule and reclassify the current

Accounting Supervisor to the Finance Manager position.

B. Reclassified the current Management Analyst to the Senior Management

Analyst position.

C. Reclassified the current Accountant to the Senior Accountant position.

D. Replaced the Part Time Account Clerk II with a Part Time Administrative

Technician position. CC 5. City Council rejected all Bids received for the Covina Park Walking / Bike Trail

Project; and authorized staff to re-advertise the project for bids. CC 6. City Council adopted Resolution CC 2021-03 appropriating donations from The

Champion Family Foundation in the amount of $10,000 for police equipment and

installation and increased the Police Department Fiscal Year budget 2020-21 by the

same amount.


PUBLIC HEARINGS – None.

CONTINUED BUSINESS

CB 1. Authorization to File Validation Action and Authorization of Issuance of Pension

Obligation Bonds The agenda report was presented by Administrative Services Director Agramonte.

Kevin Hale from Orrick provided a brief overview of the validation process.

There were no public comments.

A motion was made by Councilmember King, seconded by Councilmember Cortez, to:

1. Adopt Resolution CC 2021-04 of the City of Covina providing for the issuance of one or

more series of City of Covina taxable Pension Obligation Bonds and authorizing a Trust

Agreement, a validation action and other matters relating thereto; and

2. Authorize the City to issue Pension Obligation Bonds to refund its CalPERS Unfunded

Accrued Liability in an amount not to exceed $74 million and to pay associated costs of

issuance; and

3. Authorize the City to file judicial validation proceedings related the issuance of such

Pension Obligation Bonds.

Motion approved by roll call vote for Continued Business item CB 1 as follows:


NOES: NONE

ABSTAIN: NONE

ABSENT: NONE

CB 2. Consideration of Survey Feedback from FM3 Research Inc. Related to the Public

Opinion Community Survey on Cannabis and General Community Topics


That the City Council review feedback from the public opinion community survey and

provide additional direction.

A PowerPoint presentation regarding the City of Covina Community and Cannabis Issues Survey

was presented by FM3 Research Senior Vice President Rick Sklarz.

Discussion and questions included question development, population sample size, survey format

to include individual or multiple issues, and knowledge of sample group.

Assistant to the City Manager Carrillo gave a report on behalf of the ad-hoc committee, including

a list of steps for Council’s consideration and further direction.

A public comment was received via email from Dennis Kies which was read by Chief Deputy City

Clerk Alvarez. The comment is summarized below.

Dennis Kies expressed his concerns over the recent “City of Covina Community Issues” survey.


Mayor Linares clarified that today City Council is not taking any action on marijuana in the City

of Covina and that City Council is only receiving feedback from the ad-hoc committee and survey.

Mayor Linares also advised that there will be community outreach.

Discussion included, ad-hoc committee perspective, appreciation for ad-hoc committee and FM3

Research team, concern for public safety, five steps recommended by the ad-hoc committee,

gathering more information, community outreach, and local control.

A motion was made by Councilmember Cortez, seconded by Councilmember King, to take the

following steps:

1. Community outreach – Conduct up to four information and outreach sessions to gain

additional feedback on cannabis programs and uses;

2. Review cannabis programs developed in other communities – Evaluate entitlement

processes, land use constraints and operating guidelines and draft local program guidelines;

3. Public safety review – Engage with police stakeholders in other communities where

cannabis programs have been adopted;

4. Federal regulatory environment – Engage with Federal representatives to evaluate potential

legislative efforts to amend existing regulations; and

5. Joint discussion with Planning Commission – Conduct a joint study session to review

public opinion survey feedback and evaluate cannabis uses.

Motion approved by roll call vote for Continued Business item CB 2 as follows:


NOES: NONE

ABSTAIN: NONE

ABSENT: NONE

NEW BUSINESS – None.

ADJOURNMENT

At 9:59 p.m., the meeting of the Covina City Council/Successor Agency to the Covina

Redevelopment Agency/Covina Public Financing Authority/Covina Housing Authority was

adjourned to its next regular meeting of the Council/Agency/Authority on Tuesday, February 16,

2021, at 6:30 p.m. for closed session and 7:30 p.m. for open session in the Council Chamber of

City Hall located at 125 East College Street, Covina, CA 91723.

Respectfully Submitted:

__________________________________________

Georgianna Nicole Alvarez, CMC, CPMC

Chief Deputy City Clerk

Approved this 2nd day of February, 2021:

_____________________________________

Victor Linares, Mayor/Chair

CC Regular Meeting AGENDA ITEM REPORT

ITEM NO. CC 2

Meeting: CC Regular Meeting - Feb 16 2021 Title: Payment of Demands Presented By: Geoffrey Cobbett, City Treasurer

Anita Agramonte, Administrative Services Director Recommendation: Approve Payment of Demands in the amount of $2,422,831.89. EXECUTIVE SUMMARY / BACKROUND: Attached is a list of warrants and demands which are being presented for approval and are summarized as follows: Accounts Payable Warrants January 15, 2021 - January 28, 2021 CITY checks/EFTs $ 1,324,337.30 CITY payroll $ 1,042,946.16 CITY voids $ - Worker's Comp $ 16,205.73 $ 2,383,489.19 SACRA checks/EFTs $ 1,459.42 SACRA payroll $ 37,883.28 $ 39,342.70 TOTAL checks/EFTs $2,422,831.89 DISCUSSION: The attached reports have been reviewed by the City Treasurer and by the Administrative Services Director. FISCAL IMPACT: Sufficient funding is available and the related costs are included in the Fiscal Year 20/21 Adopted Budget. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): N/A. ATTACHMENTS: Attachment A - Check Register January 15, 2021 - January 28, 2021 Respectfully submitted,

Page 2 of 6

CITY OF COVINA

Check Register

Jan 15 - Jan 28, 2021

Check # Check Date Vendor Name Amount

5638 01/15/2021 283 BANK OF THE WEST 17,613.73

5639 01/21/2021 1405 ICMA RETIREMENT TRUST-457 3,208.04

5640 01/21/2021 4003 MidAmerica 1,544.77

5641 01/21/2021 2033 NATIONWIDE RETIREMENT SOLUTIONS 8,455.00

20369 01/21/2021 788 COVINA, CITY OF 38,337.84

20370 01/21/2021 789 COVINA-FSA, CITY OF 641.57

subtotal EFT/wires/direct deposits $69,800.95

104341 01/20/2021 4565 3SI SECURITY SYSTEMS, INC. 456.00

104342 01/20/2021 23 ABORTA BUG INC 125.00

104343 01/20/2021 4983 Ad Valorem Records,Inc. 4,931.00

104344 01/20/2021 219 AT&T 71.47

104345 01/20/2021 219 AT&T 55.12

104346 01/20/2021 254 AZUSA LIGHT & WATER 83.95

104347 01/20/2021 269 BAKER AND TAYLOR INC 257.68

104348 01/20/2021 333 BERLITZ LANGUAGES, INC. 100.00

104349 01/20/2021 3929 BOOT BARN INC 546.36

104350 01/20/2021 411 BRODART CO 17.88

104351 01/20/2021 749 THE COUNSELING TEAM 560.00

104352 01/20/2021 783 CITY OF COVINA WATER 304.36

104353 01/20/2021 970 EDISON CO 1,102.42

104354 01/20/2021 4990 Elizabeth Ann Ramirez 6,000.00

104355 01/20/2021 3584 ENTERPRISE SECURITY INC 2,262.88

104356 01/20/2021 5053 ENVIRONMENTAL SCIENCE ASSOCIATES 12,387.57

104357 01/20/2021 1055 FEDEX 12.25

104358 01/20/2021 4455 FRONTIER 760.82

104359 01/20/2021 1156 THE GAS COMPANY 4,930.88

104360 01/20/2021 3163 GENTRY BROTHERS INC 7,561.23

104361 01/20/2021 1204 GOLDEN STATE WATER COMPANY 173.02

104362 01/20/2021 1241 GRAND PRINTING 261.29

104363 01/20/2021 1463 J.G. TUCKER AND SON 594.91

104364 01/20/2021 1754 LOWE'S COMPANIES INC 89.47

104365 01/20/2021 1792 MANNING & MARDER KASS, 24,257.30

104366 01/20/2021 5057 MedCove Urgent Care, APC 600.00

104367 01/20/2021 3810 MYERS & SONS HI-WAY SAFETY INC 33,019.39

104368 01/20/2021 99999 ADRIANNE ROSE 78.76

104369 01/20/2021 99999 BENNY KING NG 45.99

104370 01/20/2021 99999 ELIZABETH HUAPE 47.24

104371 01/20/2021 99999 JASMINE HAMILTON 125,000.00

104372 01/20/2021 99999 JENNIFER GARCIA - HAMILTON 125,000.00

104373 01/20/2021 99999 JOY SPEER 43.33

104374 01/20/2021 99999 LUCY SALAZAR 52.49

104375 01/20/2021 99999 MESTOR MARIANO 193.92

104376 01/20/2021 99999 RADER REALTORS INC 19.54

104377 01/20/2021 99999 RAYANNE HERNANDEZ 125,000.00

104378 01/20/2021 99999 REDFINNOW BORROWER LLC 24.84

104379 01/20/2021 99999 REMI HERNANDEZ 0.00

104380 01/20/2021 99999 SHEUNGYI CHAN 33.80

104381 01/20/2021 99999 SOTOCO CORPORATION 2,400.00

104382 01/20/2021 99999 THE COCHRAN FIRM - CALIFORNIA 150,000.00

Attachment A Page 1 of 4Page 3 of 6

CITY OF COVINA

Check Register

Jan 15 - Jan 28, 2021


104383 01/20/2021 4688 PCAM, LLC 34,694.67

104384 01/20/2021 2294 PR DIAMOND PRODUCTS INC 1,105.00

104385 01/20/2021 2335 PYRO-COMM SYSTEMS INC 135.00

104386 01/20/2021 3796 RICHARDS, WATSON & GERSHON 2,585.00

104387 01/20/2021 2619 SGV EXAMINER 1,313.50

104388 01/20/2021 5052 SKY JTC CORPORATION 71,417.20

104389 01/20/2021 5059 T & M Products, Inc. 270.00

104390 01/20/2021 2855 TIME WARNER CABLE 252.40

104391 01/20/2021 2955 US BANK 1,000.00

104392 01/20/2021 99999 REMI HAMILTON 125,000.00

104393 01/21/2021 68 AFLAC ACCT# YQ792 WORLDWIDE HEADQUARTERS 4,050.04

104394 01/21/2021 68 AFLAC ACCT# YQ792 WORLDWIDE HEADQUARTERS 152.36

104395 01/21/2021 69 AFSCME 619.15

104396 01/21/2021 69 AFSCME 40.00

104397 01/21/2021 3846 CLEA 600.25

104398 01/21/2021 3846 CLEA 110.25

104399 01/21/2021 775 COVINA POLICE ASSOCIATION 2,800.00

104400 01/21/2021 878 DELTA DENTAL OF CALIFORNIA 7,992.31

104401 01/21/2021 878 DELTA DENTAL OF CALIFORNIA 610.10

104402 01/21/2021 4710 Fidelity Security Life Insurance Company 876.41

104403 01/21/2021 4710 Fidelity Security Life Insurance Company 47.84

104404 01/21/2021 1106 FRANCHISE TAX BOARD 583.10

104405 01/21/2021 1247 GREAT WEST LIFE & ANNUITY 3,387.79

104406 01/21/2021 3795 PRE-PAID LEGAL SERVICES, INC 156.92

104407 01/21/2021 3795 PRE-PAID LEGAL SERVICES, INC 26.90

104408 01/21/2021 2235 PERS LONG TERM CARE PROGRAM 125.69

104409 01/21/2021 4255 RELIASTAR LIFE INSURANCE COMPANY 4,028.81

104410 01/21/2021 3045 WASHINGTON NATIONAL INSURANCE COMPANY 66.75

104411 01/27/2021 4835 ABBA TERMITE & PEST CONTROL, INC 125.00

104412 01/27/2021 4188 ACCO ENGINEERED SYSTEMS 2,638.59

104413 01/27/2021 32 ACE-1 AUTO SERVICE 1,605.79

104414 01/27/2021 4983 Ad Valorem Records,Inc. 2,617.45

104415 01/27/2021 4374 ADMINSURE, INC 6,491.94

104416 01/27/2021 84 AIRGAS-WEST 170.00

104417 01/27/2021 3789 SYNCB/AMAZON 183.48

104418 01/27/2021 219 AT&T 1,162.34

104419 01/27/2021 219 AT&T 21.93

104420 01/27/2021 254 AZUSA LIGHT & WATER 1,613.52

104421 01/27/2021 304 BAXTER'S FRAME WORKS 517.20

104422 01/27/2021 4643 Bear Electrical Solutions, Inc. 35,128.85

104423 01/27/2021 3771 BLACK & WHITE EMERGENCY VEHICLES 14,011.67

104424 01/27/2021 381 BOOMERANG BLUEPRINT 510.95

104425 01/27/2021 4279 BOSS JANITORIAL SERVICES 5,677.35

104426 01/27/2021 475 CALIBER POOL AND SPA SVC 771.75

104427 01/27/2021 477 STATE OF CA 2,664.34

104428 01/27/2021 477 STATE OF CALIFORNIA 564.30

104429 01/27/2021 536 CARQUEST AUTO PARTS 25.83

104430 01/27/2021 4854 CEJ Engineers, Inc. 10,867.00

104431 01/27/2021 600 CERTIFIED UNDERCAR PARTS 115.70


CITY OF COVINA

Check Register

Jan 15 - Jan 28, 2021


104432 01/27/2021 649 CINTAS CORP #693 434.36

104433 01/27/2021 4714 CIR, Inc. 17,449.61

104434 01/27/2021 654 CITRUS CAR WASH 89.95

104435 01/27/2021 700 COLLEY FORD 1,097.11

104436 01/27/2021 703 COMBINED GRAPHICS 52.92

104437 01/27/2021 749 THE COUNSELING TEAM 600.00

104438 01/27/2021 766 ATHENS SERVICES 5,371.38

104439 01/27/2021 849 DAPEER ROSENBLIT & LITVAK LLP 11,944.00

104440 01/27/2021 3701 DEPARTMENT OF JUSTICE 147.00

104441 01/27/2021 885 DEPT OF MOTOR VEHICLES 88.00

104442 01/27/2021 4886 DG Collision LLC 1,263.34

104443 01/27/2021 4292 DUDEK 240.00

104444 01/27/2021 962 SUPERIOR COURT OF CALIFORNIA, CNTY OF LA 69.00

104445 01/27/2021 962 SUPERIOR COURT OF CALIFORNIA, CNTY OF LA 4,777.50

104446 01/27/2021 970 EDISON CO 110.27

104447 01/27/2021 970 EDISON CO 473.64

104448 01/27/2021 4965 Environment Planning Development Solutions, Inc. 33,377.97

104449 01/27/2021 4682 Evan Brooks Associates, Inc. 3,112.50

104450 01/27/2021 1055 FEDEX 13.99

104451 01/27/2021 4860 Francisco Clemente 992.25

104452 01/27/2021 4455 FRONTIER 107.02

104453 01/27/2021 1156 THE GAS COMPANY 93.04

104454 01/27/2021 4883 Glendora Employment Agency, Inc 1,513.89

104455 01/27/2021 5042 GoGov, Inc. 20,160.00

104456 01/27/2021 4650 GOLDEN BELL PRODUCTS, INC. 11,500.00

104457 01/27/2021 1235 GRAINGER 602.76

104458 01/27/2021 1275 HAAKER EQUIPMENT CO 1,295.96

104459 01/27/2021 1361 HOLLIDAY ROCK CO INC 123.48

104460 01/27/2021 1364 HOME DEPOT CREDIT SERVICES 1,329.65

104461 01/27/2021 3988 LANDSCAPE WAREHOUSE 84.66

104462 01/27/2021 5039 Image Property Services LLC 3,692.29

104463 01/27/2021 4349 Intelli-Tech 3,193.00

104464 01/27/2021 1441 INTERSTATE BATTERY SYSTEM OF EAST SAN GABRIEL 61.17

104465 01/27/2021 4077 INTERWEST CONSULTING GROUP INC 12,603.75

104466 01/27/2021 1463 J.G. TUCKER AND SON 115.65

104467 01/27/2021 3749 JCL TRAFFIC SERVICES 108.57

104468 01/27/2021 1498 JNL CREATIONS 385.88

104469 01/27/2021 1505 JOHNNY'S POOL SERVICE 220.26

104470 01/27/2021 1571 KING BOLT CO 69.41

104471 01/27/2021 1612 LA CNTY DEPT OF PUBLIC WORKS 8,695.08

104472 01/27/2021 1617 LOS ANGELES COUNTY CLERK 225.00

104473 01/27/2021 1619 LA CNTY SHERIFF'S DEPT 1,323.50

104474 01/27/2021 1698 LEXIPOL LLC 2,700.00

104475 01/27/2021 1792 MANNING & MARDER KASS, 14,816.25

104476 01/27/2021 4874 MARIA E. VELOSCO BEDRAN 1,889.42

104477 01/27/2021 4717 Merchants Landscape Services, Inc. 19,081.00

104478 01/27/2021 4833 Michael R. Hillmann 3,445.00

104479 01/27/2021 1933 MISSION LINEN SUPPLY 22.88

104480 01/27/2021 4360 MOORE IACOFANO GOLTSMAN, INC. 332.50


CITY OF COVINA

Check Register

Jan 15 - Jan 28, 2021


104481 01/27/2021 2091 O REILLY AUTO PARTS 319.06

104482 01/27/2021 4824 Occu-Med, Ltd. 591.00

104483 01/27/2021 2104 OFFICE DEPOT 76.93

104484 01/27/2021 99999 DAWN A. SMITH 2,404.88

104485 01/27/2021 99999 DOMINIQUE PEREZ 2,850.00

104486 01/27/2021 99999 JOLANDA CHRISTIANSEN 25.00

104487 01/27/2021 99999 SUNBELT CONTROLS 45.00

104488 01/27/2021 99999 THERESA MULLALY 240.00

104489 01/27/2021 99999 WINFRIED BIGGS 25.00

104490 01/27/2021 4662 OverDrive, Inc 6,000.00

104491 01/27/2021 2163 PACIFIC PARKING SYS INC 1,100.00

104492 01/27/2021 2255 PHONE SUPPLEMENTS 1,026.49

104493 01/27/2021 2309 PROFESSIONAL ACCOUNT MANAGEMENT LLC 3,738.22

104494 01/27/2021 2345 QUILL 78.94

104495 01/27/2021 2415 REPUBLIC MASTER CHEFS 419.97

104496 01/27/2021 3796 RICHARDS, WATSON & GERSHON 28,568.73

104497 01/27/2021 4350 RKA Consulting Group 433.75

104498 01/27/2021 4857 Robert Andrew Nava 7,952.00

104499 01/27/2021 2510 S & S WORLDWIDE INC 18.64

104500 01/27/2021 2542 SAN GABRIEL VALLEY WATER ASSOCIATION 25.00

104501 01/27/2021 2581 SCHOLASTIC INC. EDUCATION 6,141.44

104502 01/27/2021 2719 SPARKLETTS 25.26

104503 01/27/2021 4928 Springstead & Associates, Inc. 4,000.00

104504 01/27/2021 2757 STEVEN ENTERPRISES INC 1,126.33

104505 01/27/2021 2804 TAG AMS INC 175.00

104506 01/27/2021 2852 THREE VALLEY MUN WATER DISTR 5,200.82

104507 01/27/2021 2855 TIME WARNER CABLE 35.24

104508 01/27/2021 2903 TRI-XECUTEX CORP 265.95

104509 01/27/2021 4813 JOHNSON CONTROLS FIRE PROTECTION LP 1,308.91

104510 01/27/2021 2935 UNDERGROUND SERVICE ALERT 83.82

104511 01/27/2021 4764 UniFirst Corporation 741.09

104512 01/27/2021 2966 V & V MANUFACTURING 28.61

104513 01/27/2021 4065 VERIZON BUSINESS SERVICES 2,678.96

104514 01/27/2021 3052 WATERLINE TECHNOLOGIES INC 320.38

104515 01/27/2021 3621 WAXIE ENTERPRISES INC 1,737.19

104516 01/27/2021 3078 THOMSON REUTERS - WEST PAYMENT CENTER 376.96

104517 01/27/2021 3137 Y TIRE SALES 2,358.83

104518 01/27/2021 3152 YWCA 961.93

subtotal checks 1,255,995.77$

voids (prior to current mo.) -$

payroll (1/21/2021) 1,080,829.44$

workers' compensation 16,205.73$

TOTAL checks/EFTs $2,422,831.89



ITEM NO. CC 3

Meeting: CC Regular Meeting - Feb 16 2021 Title: Monthly Investment Report of the Treasurer to the City Council and Successor Agency to

the Covina Redevelopment Agency for January 2021 Presented By: Geoffrey Cobbett, City Treasurer

Anita Agramonte, Administrative Services Director Recommendation: Receive and File. EXECUTIVE SUMMARY / BACKROUND: Pursuant to Government Code Section 53600 et seq. and Section 4.0 of the City of Covina’s Investment Policy, a monthly investment report must be provided to the City Council and City Manager, containing detailed information of all securities, investments of the City. DISCUSSION: The attached monthly report for the City reflects the portfolio balances for the month ended January 31, 2021. The report is in conformity with the City’s Investment Policy as well as Government Code 53607. There are

sufficient funds to meet the pooled expenditure requirements for all City funds for the next 6 months. FISCAL IMPACT: None to receive and file. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): None. ATTACHMENTS: Attachment A - Monthly Investment Report - signed Attachment A-1 - Total Investment Portfolio Attachment A-2 - Investment Transaction Summary Attachment A-3 - City LAIF Statement Attachment A-4 - Successor Agency LAIF Statement Respectfully submitted,

MONTHLY INVIBTNIENTREPORTREPORTTO THE CITY COUNCIL

FOR THE MO NTI-I ENDED JANUARY 31, 2021

TOTAL INVESTMENT BALANCE AS OF 12/31/2020 $48,970,8l9.42

TRANSFERS IN 6.300.000.00

TRANSFERS OUT (l.500.000.00)

INTEREST 54.13X.l9

GAIN OR (LOSS) ON SALE OF INVESTMENTS

CASH BALANCE‘ _

I/31/2021 $53,824,957.6I

ANALYSIS OF CASH AND INVESTMENT BALANCE - BOOK VALUE

PUBLIC TRUST ADVISORS NVESTMENT PORTFOLIO ATTACHNTENT A-1 19,78l,14l.63

US BANK MONEY MARKET ATTACHMENT A-1 308.237.03LOCAL AGENCY INVESTMENT FUND - CITY ATTACI-DVIENT A-3 32.212.169.13LOCALAGENCY INVESTMENT FUND - SACRA ATTACHMENT A-4 1.523.409.82TOTAL INVESTMENT BALANCE $S3,824,957.6l

Respect?xlly submitted,

Geo?iey CobbéttCity Treasurer

Attachment A

Page 2 of 6

Purch date Dated Qty

Market Price Per

Share Total Original Cost

Value Total Market Value Coupon CUSIP Maturity Issuer

03/28/18 2,250 100.265000 224,639.65 225,596.25 2.3750 9128284B3 3/15/2021 US Treasury

05/31/19 6,250 100.344000 626,513.67 627,150.00 2.2500 912828C57 3/31/2021 US Treasury

01/15/19 8,000 100.456000 796,937.50 803,648.00 2.3750 9128284G2 4/15/2021 US Treasury

07/30/18 8,500 100.719000 846,712.89 856,111.50 2.6250 9128284P2 5/15/2021 US Treasury

01/15/19 8,000 100.930000 801,687.50 807,440.00 2.6250 9128284T4 6/15/2021 US Treasury

09/25/18 8,750 101.152000 868,642.58 885,080.00 2.6250 912828Y20 7/15/2021 US Treasury

09/25/18 8,750 101.641000 871,274.41 889,358.75 2.7500 9128285A4 9/15/2021 US Treasury

12/20/18 8,000 101.336000 788,031.25 810,688.00 2.1250 912828F21 9/30/2021 US Treasury

05/31/19 5,750 101.398000 574,371.09 583,038.50 2.0000 912828F96 10/31/2021 US Treasury

12/20/18 8,000 102.172000 803,843.75 817,376.00 2.8750 9128285L0 11/15/2021 US Treasury

01/15/19 8,000 102.188000 802,125.00 817,504.00 2.6250 9128285R7 12/15/2021 US Treasury

03/28/19 5,550 101.836000 553,525.78 565,189.80 2.1250 912828G87 12/31/2021 US Treasury

05/31/19 7,250 101.965000 724,490.23 739,246.25 2.0000 912828SF8 2/15/2022 US Treasury

02/15/19 1,500 101.898000 147,152.34 152,847.00 1.8750 912828W55 2/28/2022 US Treasury

03/28/19 5,550 102.523000 557,775.00 569,002.65 2.3750 9128286H8 3/15/2022 US Treasury

07/11/19 3,950 101.898000 393,626.76 402,497.10 1.7500 912828J76 3/21/2022 US Treasury

04/08/20 6,100 100.307000 609,097.20 611,872.70 0.3750 3133ELWD2 4/8/2022 Federal Farm Credit BKs

09/12/19 3,550 102.031000 356,234.18 362,210.05 1.6250 912828WZ9 4/30/2022 US Treasury

10/30/19 4,850 102.191000 487,595.51 495,626.35 1.8750 912828X47 4/30/2022 US Treasury

10/30/19 4,850 102.164000 486,250.39 495,495.40 1.7500 912828XR6 5/31/2022 US Treasury

08/28/19 7,750 102.231000 781,629.88 792,290.25 1.7500 9128286Y1 6/15/2022 US Treasury

02/15/19 9,500 102.832000 937,902.34 976,904.00 2.1250 912828XG0 6/30/2022 US Treasury

10/30/19 4,850 102.375000 486,212.50 496,518.75 1.7500 9128287C8 7/15/2022 US Treasury

09/12/19 4,250 102.137000 423,804.69 434,082.25 1.5000 912828YA2 8/15/2022 US Treasury

11/27/19 6,250 102.332000 625,488.28 639,575.00 1.6250 912828TJ9 8/15/2022 US Treasury

11/27/19 6,250 103.063000 629,809.57 644,143.75 1.8750 912828M49 10/31/2022 US Treasury

03/04/20 1,600 102.668000 162,918.75 164,268.80 1.5000 912828Z29 1/15/2023 US Treasury

08/28/19 7,750 103.234000 783,143.55 800,063.50 1.6250 912828P38 1/31/2023 US Treasury

03/04/20 2,850 102.523000 289,408.59 292,190.55 1.3750 912828Z86 2/15/2023 US Treasury

02/21/20 5,250 102.615000 524,034.00 538,728.75 1.3750 3130AJ7E3 2/17/2023 Federal Home Loan

04/21/20 6,100 100.475000 608,475.00 612,897.50 0.3750 3137EAEQ8 4/20/2023 FHLMC

05/07/20 6,100 100.504000 609,743.80 613,074.40 0.3750 3137EAER6 5/5/2023 FHLMC

06/09/20 6,000 100.281000 598,044.00 601,686.00 0.3000 3133ELG81 6/8/2023 Federal Farm Credit BKs

Subtotal Securities 19,781,141.63$ 20,123,401.80$

US Bank Mmkt 308,237.03$ 308,237.03$

20,089,378.66$ 20,431,638.83$ Total Value of Portfolio

The purpose is to demonstrate compliance with the city's adopted Investment Policy. This is a required report per Government Code section 53646(b). The investment portfolio as presented is in compliance with the City’s adopted Investment Policy.

Attachment A-1CITY OF COVINA

Public Trust AdvisorsInvestment Portfolio as of

January 2021

S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Investment Reports\20-21\January 2021\January 2021 Investment Report Attachment A-1Page 3 of 6

Qty Purch Date Maturity

Share Price at

Purch Date

Original Cost

Value

Net Trade

Amount

Gain / (Loss)

on Purchase Issuer CUSIP Held by

NO TRANSACTIONS IN JANUARY

Total - - -

Qty Purch Date Maturity

Sale / Maturity

Date

Share Price at Sale

/ Maturity Date

Original Cost

Value

Par Value at

Sale/Maturity

Gain / (Loss)

on Sale /

Redemption

Earnings

Since

Purchase Issuer CUSIP Held by

NO TRANSACTIONS IN JANUARY

Total - - - -

CITY OF COVINAInvestment Transaction Summary

for the Month Ended January 31 2021

Purchased Investments

Sold/Matured Investments

S:\Covina_PVT\Finance_PVT\Investments - City & CRA\Monthly Investment Reports\20-21\January 2021\January 2021 Investment Report Attachment A-2

Page 4 of 6

Local Agency Investment Fund P.O. Box 942809Sacramento, CA 94209-0001(916) 653-3001

February 02, 2021

LAIF HomePMIA Average Monthly Yields

CITY OF COVINA

CITY TREASURER 125 E. COLLEGE STREET COVINA, CA 91723-2199

Account Number: 98-19-219

January 2021 Statement

Tran Type Definitions

Effective Date

Transaction Date

TranType Confirm

Number

Web Confirm Number Authorized Caller Amount

1/4/2021 1/4/2021 RD 1662870 1623012 THERESA FRANKE 1,100,000.00 1/15/2021 1/14/2021 QRD 1665452 N/A SYSTEM 34,803.82 1/20/2021 1/20/2021 RW 1666192 1626341 THERESA FRANKE -1,500,000.00 1/22/2021 1/21/2021 RD 1666375 1626526 THERESA FRANKE 3,700,000.00 1/28/2021 1/27/2021 RD 1666728 1626883 THERESA FRANKE 1,500,000.00

Account Summary

Total Deposit: 6,334,803.82 Beginning Balance: 27,377,365.31

Total Withdrawal: -1,500,000.00 Ending Balance: 32,212,169.13

Page 1 of 1LAIF Regular Monthly Statement

2/2/2021https://laifms.treasurer.ca.gov/RegularStatement.aspx

Attachment A-3Page 5 of 6

Local Agency Investment Fund P.O. Box 942809Sacramento, CA 94209-0001(916) 653-3001

February 02, 2021

LAIF HomePMIA Average Monthly Yields

S/A CITY OF COVINA FOR COVINA REDEVELOPMENT AGENCY FINANCE DIRECTOR 125 EAST COLLEGE STREET COVINA, CA 91723-2199

Account Number: 65-19-007

January 2021 Statement

Tran Type Definitions

Effective Date

Transaction Date

Tran Type Confirm

Number

Web Confirm Number Authorized Caller Amount

1/15/2021 1/14/2021 QRD 1664513 N/A SYSTEM 2,404.90

Account Summary

Total Deposit: 2,404.90 Beginning Balance: 1,521,004.92

Total Withdrawal: 0.00 Ending Balance: 1,523,409.82

Page 1 of 1LAIF Regular Monthly Statement

2/2/2021https://laifms.treasurer.ca.gov/RegularStatement.aspx

Attachment A-4Page 6 of 6


ITEM NO. CC 4

Meeting: CC Regular Meeting - Feb 16 2021 Title: Citywide Bus Stop Improvement Project - Final Acceptance and Filing Notice of

Completion Presented By: Andy Bullington, Director of Public Works Recommendation: 1. Accept the work performed by E.C. Construction Co.;

2. Authorize the City Clerk to file a Notice of Completion for the Citywide Bus Stop Improvement Project; and 3. Adopt 2021CCResolution -07 2021Year Fiscal the amend to -2025 Capital Improvement Program to increase funding by $135,731 for the Citywide Bus Stop Improvement Project and appropriate the necessary funds from available Proposition A Local Return Fund Balance.

EXECUTIVE SUMMARY: Accept the work performed by E.C. Construction Co. and authorize the City Clerk to file a Notice of Completion (Attachment A) for the Citywide Bus Stop Improvement Project. Adopt Resolution CC 2021-07 (Attachment B) to amend the FY2021-2025 to increase funding by $135,731 for the Citywide Bus Stop Improvement Project and appropriate the necessary funds from available Proposition A Fund Balance. BACKGROUND: On September 3, 2019, the City Council approved a budget appropriation of $700,000 for the Citywide Bus Stop Improvement Project from the Proposition A fund balance to upgrade 98 City of Covina bus stops with safety enhancements, ADA accessibility, and modern amenities in order to improve the user experience for local bus riders. The culmination of these efforts targets the ultimate replacement of all existing City bus stop amenities transitalong located other Works Publiccomplement to projects - and arterials oriented neighborhoods. On December 17, 2019, staff requested that the City Council reject all initial bids submitted on December 3, 2019 for the Citywide Bus Stop Improvement Project in response to the City receiving two bids, one from Gentry Brothers, Inc. in the amount of $1,076,700 and the other from AP Construction, Inc. in the amount of $1,839,335, with the lowest bid amount approximately 65% higher than the Engineer's estimate of $650,000. The City Council approved the rejection of all bids and authorized staff to rebid the transit shelter component of the project while concurrently working with prospective vendors to directly procure all other street furniture and appurtenances in an effort to expedite project completion. Following a new public bidding process initiated in January 2020 to install 35 new transit shelters and perform additional sitework within pertinent bus stop zones, the City received two bids, one from E.C. Construction Co. in the amount of $657,060 and the other from AP Construction, Inc. in the amount of $1,331,350. As such, a contract was awarded on February 4, 2020 for the Citywide Bus Stop Improvement Project to E.C. Construction Co. as the lowest responsive and responsible bidder in an amount not-to-exceed $657,060 with a contingency amount of $65,706 also approved to supplement any unforeseen site conditions during construction. All work

including the installation of 35 new steel bus shelters outfitted with solar lighting units as well as the repair of approximately 11,000 square feet of concrete sidewalk located within the bus stop zones has been completed and a final inspection of all locations was performed by City staff in late January 2021. DISCUSSION: During construction, the need for additional work, not included in the original scope of work, was identified by the City. As a result, the City Engineer reviewed and approved the following change orders, increasing the overall contract in the amount of $720,370.26: Change Order No. 1 Change Order No. 1 increased the overall contract amount by $24,085 due to ADA Improvements and Concrete Sitework at various bus stops – Quantity Adjustments Based on Field Measurements. Change Order No. 2 Change Order No. 2 increased the overall contract amount by $4,884.69 pursuant to a redesign of the COVINA metal insert located on each bus shelter Change Order No. 3 Change Order No. 3 increased the overall contract amount by $29,228 as a result of additional concrete sidewalk and curb / gutter repairs needed at various bus stop locations for safety precautions Change Order No. 4 Change Order No. 4 increased the overall contract amount by $5,112.57 to perform additional sitework at Citrus Ave and Arrow Highway after discovering subsurface railway ties in the Right-of-Way. FISCAL IMPACT: An appropriation of $1,052,095 to the Department of Public Works, Transportation Proposition A, Buildings and Structures budget (account no. 2400-TO01-55100-P2014) was approved by the City Council on February 4, 2020. As a result of the project carrying over into FY 2021, project contingency and ancillary funds in the amount of $135,731 for equipment, force labor and contract expenses were not carried over; as such, City staff is requesting that Resolution CC 2021-07 be approved in order to reallocate project funds in FY 2021 to the Citywide Bus Stop Improvement Project. Moreover, the following table presents a summary of available funding sources and actual construction, City labor and procurement costs: Citywide Bus Stop Improvement Project Approved Budget $1,052,950.00 Construction Contract – E.C. Construction Co. (+ contingency) $722,766.00 Total Contract Expenditures (including 4 Change Orders) <$720,370.26> Remaining Contract Balance $2,395.74 Other Citywide Bus Stop Project Expenditures in FY20 & FY21 Project Advertising - Reproduction & Bids <$1,705.88> Design and Bid Documents - Robert Nava Design <$10,800.00> 87 Trash Receptacles - Victor Stanley, Inc. <$126,239.44> 24 Steel Benches - Keystone Ridge Designs <$25,019.62> 45 Pole-mounted Solar Lights - Urban Solar <53,587.31>

Page 2 of 6

61 Bus Benches, Refurbish and Paint - Hawk Industry <$12,200.00> Other Miscellaneous Expenses (supplies, etc.) <1,127.80> City Labor and Ancillary Expenses <$99,503.95> Total - Other Citywide Bus Stop Project Expenditures <$330,184.00> Current Project Funds Available in FY21 $557,343.44 Existing Project Expenditures / Encumbrances in FY21 <$693,074.00> Funding Allocation Needed in FY21 for Project Completion $135,731.00 CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): This project has been determined to be categorically exempt under CEQA in accordance with Title 14, Chapter 3, Class 1, Sections 15301 and 15302. This exemption includes the minor alteration of existing public facilities involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The project involves negligible or no expansion of an existing use. ATTACHMENTS: Attachment A - NOC - Citywide Bus Stop Improvement Project Attachment B - Resolution CC 2021-07 Respectfully submitted,

Page 3 of 6

ATTACHMENT A

RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO:

NAME City of Covina

STREET ADDRESS 125 E College Street

CITY Covina

STATE CA

ZIP CODE 91723

SPACE ABOVE THIS LINE FOR RECORDER’S USE

NOTICE OF COMPLETION Notice pursuant to Civil Code Section 3093, must be filed within 10 days after completion. (See reverse side for complete requirements.) Notice is hereby given that:

1. The undersigned is owner or corporate officer of the owner of the interest or estate stated below in the property hereinafter described: 2. The full name of the owner is The City of Covina .

3. The full address of the owner is 125 E College Street, Covina, CA 91723 .

4. The nature of the interest or estate of the owner is: In fee.

(If other than Fee, strike “in fee” and insert, for example, “purchaser under contract of purchase”, or “Lessee”)

5. The full names and full addresses of all persons, if any, who hold title with the undersigned as joint tenants or as tenants in common are:

NAMES ADDRESSES

6. The full names and full addresses of all the predecessors in interest of the undersigned, if the property was transferred subsequent to

the commencement of the work or improvements herein referred to: NAMES

ADDRESSES

7. A work of improvement on the property hereinafter described was completed on: January 28, 2021 . The work done was:

Citywide Bus Stop Improvement Project

8. The names of the contractor, if any, for such work improvement was:

E.C. Construction Co. February 4, 2020 (If no contractor for work of improvement as a whole, insert “None”) (Date of Contract)

9. The property on which said work of improvement was completed in the City of: Covina County of Los Angeles , State of CA , and is described as follows: Citywide Bus Stop

Improvement Project .

10. The street address of said property is Various City Locations .

(If no street address has been officially signed, insert “None”.)

Dated February 2, 2021

(Signature of Owner of corporate officer of Owner named in paragraph 2, or his agent)

VERIFICATION I, the undersigned, say: I am

the City Engineer The declarant of the foregoing Notice of

Completion;

(President of, Manager of, Partner of, Owner of)

I have read said Notice of Completion and know the contents thereof; the same is true to my own knowledge. I declare under penalty of perjury that the foregoing is true and correct. Executed on February 16 , , 2021 at Covina , California .

(Personal signature of the individual of the individual who is swearing that the contents of the Notice of Completion are true.)

Page 4 of 6

RESOLUTION CC 2021-07

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA, TO AMEND THE FISCAL YEAR 2021-2025 CAPITAL

IMPROVEMENT PROGRAM AND THE FISCAL YEAR 2020-2021

BUDGET TO REFLECT AN APPROPRIATION OF $135,731.00 FROM

AVAILABLE PROPOSITION A FUND BALANCE TO INCREASE

FUNDING FOR THE CITYWIDE BUS STOP IMPROVEMENT PROJECT

AND INCREASE THE FISCAL YEAR 2021 PROPOSITION A CAPITAL

IMPROVEMENT BUDGET (ACCOUNT NO. 2400-TO01-55100-P2014) IN

THE AMOUNT OF $135,731.00 FOR EXPENDITURES ON THE

CITYWIDE BUS STOP IMPROVEMENT PROJECT

WHEREAS, the City of Covina is a municipal corporation duly organized and existing

pursuant to the Constitution and laws of the State of California (“City); and

WHEREAS, the Fiscal Year 2021 Operating Budget and 2021 Capital Improvement

Program Budget were approved on June 16, 2020; and

WHEREAS, the approved Operating Budget and Capital Improvement Program Budget

are in accordance with all applicable ordinances of the City and all applicable statutes of the State;

and

WHEREAS, the reallocation of the appropriations between departmental activities may

be made by the City Manager and amendments (increases/decreases) to the adopted 2021 Capital

Improvement Program budget shall be by approval and Resolution of the City Council; and

WHEREAS, on June 16, 2020, the City Council adopted Resolution CC 2020-46

approving the Fiscal Year 2021-2025 Capital Improvement Program and the Fiscal Year 2021

Capital Improvement Program Budget; and

WHEREAS, the Department of Public Works proposes to supplement Fiscal Year 2021

project costs for the Citywide Bus Stop Improvement Project with Proposition A Local Return

funds previously approved by the City Council in Fiscal Year 2020; and

WHEREAS, the City of Covina wishes to allocate additional funds for the completion of

the Citywide Bus Stop Improvement Project in Fiscal Year 2021.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA,

CALIFORNIA DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Amend the Fiscal Year 2021-2025 Capital Improvement Program and the

Fiscal Year 2020-2021 Budget as follows:

Increase funding for the Citywide Bus Stop Improvement Project in the amount of

$135,731.00 from available Proposition A Fund Balance to the Citywide Bus Stop Improvement

Project (account no. 2400-TO01-55100-P2014).

Page 5 of 6

nalvarez

Typewritten Text

Attachment B

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Resolution CC 2021-07 Page 2 of 2

SECTION 2. The City Clerk shall certify to the passage and adoption of this resolution

and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 16th day of February, 2021.

City of Covina, California

BY:

VICTOR LINARES, Mayor

ATTEST:

______________________________________

GEORGIANNA NICOLE ALVAREZ


CERTIFICATION

I, Georgianna Nicole Alvarez, Chief Deputy City Clerk of the City of Covina, do hereby certify

that Resolution CC 2021-07 was duly adopted by the City Council of the City of Covina at a

regular meeting held on the 16th day of February, 2021, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:

__________________________________

GEORGIANNA NICOLE ALVAREZ,


Page 6 of 6


ITEM NO. CC 5

Meeting: CC Regular Meeting - Feb 16 2021 Title: Badillo Street Improvements & San Bernardino Road Rehabilitation Project – Award of

Contract to Sequel Contractors Inc. for an Amount Not-to-Exceed $1,653,130 Presented By: Andy Bullington, Director of Public Works

Rafael M. Fajardo, City Engineer Recommendation: 1. Approve plans and specifications for the Badillo Street Improvements & San

Bernardino Road Rehabilitation Project; 2. Award the Contract for the Badillo Streets Improvements & San Bernardino Road Rehabilitation Project to Sequel Contractors Inc. as the lowest responsive and responsible bidder in an amount not-to-exceed $1,653,130 and authorize the City Manager to execute the Contract; and 3. Authorize a contingency amount of 10%, or $165,313, for any unforeseen construction expenses.

EXECUTIVE SUMMARY: As part of the City’s Fiscal Year 2020-21 Capital Improvement Program, the City Council approved the Badillo Street Improvements & San Bernardino Road Rehabilitation Project which is comprised of pavement AC overlay, sidewalk repairs, curb ramps, curb and gutter, miscellaneous concrete work, median landscape beautification, a bioswale, striping and other appurtenances. The project limits encompass approximately one-and-a-half (1 1/2) miles of street rehabilitation on Badillo Street from Citrus Avenue to Azusa Avenue, and San Bernardino Road from Hollenbeck Avenue to Azusa Avenue. Following a public bidding process, it has been determined that the lowest responsive and responsible bidder for the project is Sequel Contractors Inc. As such, it is recommended that a Contract (Attachment A) be awarded for the Badillo Street Improvements & San Bernardino Road Rehabilitation Project to Sequel Contractors Inc. as the lowest responsive and responsible bidder in an amount not-to-exceed $1,653,130 and authorize the City Manager to execute the Contract. BACKGROUND: Badillo Street and San Bernardino Road are both east-west bound collector roads that are up to 70-feet wide in certain locations. These roadways handle a range of moderate to heavy vehicle traffic levels due to their proximity to the I-10 San Bernardino Freeway and the roads are frequently used as a bypass to traverse through the City. The Badillo Street Improvements & San Bernardino Road Rehabilitation Project is also a continuation of the Department of Public Works’ efforts to supplement the citywide pavement rehabilitation program.

According to the current Pavement Management Program, these particular sections of roadway have a Pavement Index Condition in the mid-40s. The Pavement Management Program identifies and evaluates current pavement conditions and also determines the root causes of deterioration by rating the pavement conditions from 0 to 100. The project will subsequently result in a complete resurfacing of Badillo Street from Citrus Avenue to Azusa Avenue as well as San Bernardino Road from Hollenbeck Avenue to Azusa Avenue.

DISCUSSION: A Notice Inviting Bids was published in the San Gabriel Valley Examiner on Thursday, January 14th & January 21st. In addition, the Notice Inviting Bids was sent to McGraw Hill Construction/FW Dodge Company (Green Sheets). Sealed bids were accepted in the Office of the City Clerk until 10:00 am on Tuesday, January 26th, 2021. Beginning at 10:00 a.m. on January 26th, 2021, the City Clerk publicly opened and read nine (9) sealed bids with the following results: Rank Bidder Location Total Base Bid Amount 1 Sequel Contractors, Inc. Santa Fe Springs, CA $1,653,130.00 2 Sully Miller, Contracting Co. Brea, CA $1,671,000.00 3 Hardy & Harper, Inc. Lake Forest, CA $1,711,000.00 4 EC Construction, Inc. South El Monte, CA $1,721,637.25 5 Gentry Brothers, Inc. Irwindale, CA $1,851,012.50 6 RJ Noble Company Orange, CA $1,887,440.00 7 Excel Paving, Inc. Long Beach, CA $1,870,440.00 8 All American Asphalt. Inc. Corona, CA $1,984,444.00 9 Onyx Paving, Co. Anaheim, CA $2,112,000.00 Staff has reviewed all bid documents for compliance and has evaluated the Contractor’s professional

background and recently completed projects for competency. As a result, staff recommends the award of contract to the lowest bidder, Sequel Contractors Inc. given that this firm has completed major road reconstruction projects for a number of public agencies in Southern California. FISCAL IMPACT: The Badillo Street Improvements & San Bernardino Road Rehabilitation Project is included in the adopted Fiscal Year 2020-21 Capital Improvement Program with an original project budget as follows: Badillo Street Improvements Project Amount Account

Prop C Local Return $200,000 24052200-55310-P2018 Sewer $150,000 63002700-55310-P2018 SB-1 RMRA $923,113 23102200-55310-P2018 Environmental $150,000 62005550-55310-P2018 Total $1,423,113 San Bernardino Road Street Rehabilitation Project Amount Account

Prop C Local Return $527,633 24052200-55310-P2102 Sewer $50,000 63002700-55310-P2102 Total $577,633 PROJECT EXPENSES Description Amount Base Bid (Sequel Contractors, Inc.) $1,653,130 Contingency Allowance $165,313

Page 2 of 55

CIR, Inc. Construction Inspection $65,000 Willdan (Pavement Analysis & Testing) $21,160 Total Fiscal Impact $1,904,603 SOURCE OF PROJECT FUNDS Badillo Street Amount Account Prop C Local Return $200,000 24052200-55310-P2018 Sewer $150,000 63002700-55310-P2018 SB-1 RMRA $923,113 23102200-55310-P2018 Environmental $150,000 62005550-55310-P2018 San Bernardino Road Amount Account Prop C Local Return $431,490 24052200-55310-P2102 Sewer $50,000 63002700-55310-P2102 Total $1,904,603 CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): This project has been determined to be categorically exempt under CEQA in accordance with Title 14, Chapter 3, Class 1, Sections 15301 and 15302. This exemption includes the minor alteration of existing public facilities involving negligible or no expansion of use beyond that existing at the time of the lead agency's determination. The project involves negligible or no expansion of an existing use. ATTACHMENTS: Attachment A - Construction Contract Attachment B - CIR, Inc. Conststruction Inspection Services Proposal Attachment C - Willdan Material and Compaction Testing Proposal Attachment D - Bid Summary Respectfully submitted,

Page 3 of 55

CONTRACT

CITY OF COVINA CONTRACT FOR BADILLO STREET IMPROVEMENTS PROJECT & SAN BERNARDINO

ROAD REHABILITATION PROJECT

THIS CONTRACT (“Contract”) is made and entered this 16th day of February, 2021 by and between the CITY OF COVINA, a California municipal corporation (“City”) and Sequel Contractors Inc., a California corporation (“Contractor”). Contractor’s California State Contractor’s license number is 397682; Class A. Contractor’s DIR registration number is 1000002240.

In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1. Contract Documents. The Contract Documents consist of this Contract, the Notice Inviting Bids, Instructions to Bidders, Bid (including documentation accompanying the Bid and any post-Bid documentation submitted before the Notice of Award), the Bonds, permits from regulatory agencies with jurisdiction, General Provisions, Special Provisions, Plans, Standard Plans, Standard Specifications, Reference Specifications, Addenda, Change Orders, and Supplemental Agreements. The Contract Documents are attached hereto and incorporated herein by reference. In the event of any conflict between the terms of this Contract and any incorporated documents, the terms of this Contract shall control.

2. Scope of Services. Contractor shall perform the Work in a good and workmanlike manner for the project identified as Badillo Street Improvements Project and San Bernardino Road Rehabilitation Project (“Project”), as described in this Contract and in the Contract Documents.

3. Compensation. In consideration of the services rendered hereunder, City shall pay Contractor an amount not to exceed One Million Six Hundred Fifty-Three Thousand One Hundred Thirty Dollars ($1,653,130) in accordance with the prices as submitted in the Bid, attached hereto as Exhibit “A” and incorporated herein by this reference.

4. Incorporation by Reference. All of the following documents are attached hereto and incorporated herein by this reference: Workers’ Compensation Certificate of Insurance, Additional Insured Endorsement (Comprehensive General Liability), Additional Insured Endorsement (Automobile Liability), and Additional Insured Endorsement (Excess Liability).

5. Antitrust Claims. In entering into this Contract, Contractor offers and agrees to assign to City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. § 15) or under the Cartwright Act (Cal. Bus. & Prof. Code, § 16700 et seq.) arising from purchases of goods, services, or materials pursuant to the Contract. This assignment shall be made and become effective at the time City tenders final payment to Contractor without further acknowledgment by the parties.

6. Prevailing Wages. City and Contractor acknowledge that the Project is a public work to which prevailing wages apply.

7. Workers’ Compensation. California Labor Code Sections 1860 and 3700 provide that every contractor will be required to secure the payment of compensation to its employees. In accordance with the provisions of California Labor Code Section 1861, by signing this Contract, the Contractor certifies as follows:

ATTACHMENT APage 4 of 55

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

8. Trenches and Other Excavations. If this Project involves the digging trenches or other excavations that will extend deeper than four (4) feet below the surface, Contractor shall promptly, and before the following conditions are disturbed, notify City, in writing, of any: (1) material that Contractor believes may be material that is hazardous waste, as defined in Section 25117 of the Health and Safety Code, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; (2) subsurface or latent physical conditions at the site differing from those indicated by information about the site made available to proposers prior to the deadline for submitting proposals; and (3) unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in this Contract.

9. Titles. The titles used in this Contract are for convenience only and shall in no way define, limit or describe the scope or intent of this Contract or any part of it.

10. Authority. Any person executing this Contract on behalf of Contractor warrants and represents that he or she has the authority to execute this Contract on behalf of Contractor and has the authority to bind Contractor to the performance of its obligations hereunder.

11. Entire Agreement. This Contract, including the Contract Documents and any other documents incorporated herein by specific reference, represents the entire and integrated agreement between City and Contractor. This Contract supersedes all prior oral or written negotiations, representations or agreements. This Contract may not be modified or amended, nor any provision or breach waived, except in a writing signed by both parties that expressly refers to this Contract.

12. Counterparts. This Contract may be executed in counterpart originals, duplicate originals, or both, each of which is deemed to be an original for all purposes.

IN WITNESS WHEREOF, the parties hereto have executed the Contract the day and year first above written.

[SIGNATURE PAGE FOLLOWS]


CITY OF COVINA

By: Mayor

ATTEST: APPROVED AS TO FORM:

By: By: City Clerk City Attorney

Dated: (“CONTRACTOR”)

By:

Printed Name:

Title:

By:

Printed Name:

Title:


EXHIBIT A BID DOCUMENT



































300 Spectrum Center Drive

Suite 400

Irvine, CA 92618

[email protected]

Phone: 949-257-1051

January 31, 2021

City of Covina

Rafael Fajardo, P.E.

City Engineer

125 East College Street

Covina, CA 91723

Dear Mr. Fajardo,

Thank you for the opportunity to submit this proposal for inspection services for the upcoming Badillo

Street Improvement Project and San Bernardino Road Street Project.

The following Exhibits are enclosed:

Exhibit A- Scope of work

Exhibit B- Fee schedule

Respectfully submitted,

Ian A. Nicholas

Ian A. Nicholas

President

ATTACHMENT BPage 41 of 55


Exhibit A

SCOPE OF WORK

CIR, Inc. will provide a Public Works Inspector for the Badillo Street Project and San Bernardino Road

Street Project . Inspector tasks include the following:

1. Perform Quality Assurance monitoring, and surveillances of the Construction Contractors

activities to assure compliance with the design criteria and requirements and the Construction

Contractors Project Plans.

2. Review construction document transmittal, i.e. shop drawings.

3. Attend regular progress review meetings with the Construction Contractors to ascertain job

progress and identify and resolve problems.

4. Maintain an accurate and current record of daily construction progress. Such record shall include

daily reports.

5. Maintain shop drawing logs.

6. Review improvement project plans and measure for PCC/AC quantities.

7. Resolve field conditions.

Exhibit B

Proposed Fee

Proposed lump sum fee to not exceed $65,000.00, including overtime.

Said project is for 90 calendar days. Working hours are 7:00am to 5:00pm Monday through Friday.

ATTACHMENT BPage 42 of 55

ATTACHMENT CPage 43 of 55












City of Covina

Public Works Department - Engineering Division

Badillo Street Improvements Project - San Bernardino Road Rehabilitation Project

Item Description Quantity Unit Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total Unit Price Total

Badillo Street

1 Mobilization, Clearing, Grubbing and Unclassified Excavation 1 LS 75,000.00$ 75,000.00$ 144,500.00$ 144,500.00$ 206,800.00$ 206,800.00$ 35,000.00$ 35,000.00$ 329,747.50$ 329,747.50$ 182,000.00$ 182,000.00$ 194,000.00$ 194,000.00$ 249,904.00$ 249,904.00$ 224,000.00$ 224,000.00$

2 NPDES/SWPPP Preparation and Compliance 1 LS 5,000.00$ 5,000.00$ 10,000.00$ 10,000.00$ 20,000.00$ 20,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 5,000.00$ 18,000.00$ 18,000.00$ 46,000.00$ 46,000.00$ 13,000.00$ 13,000.00$ 5,192.50$ 5,192.50$

3 Disposal of Waste Materials 1 LS 137,000.00$ 137,000.00$ 2,817.50$ 2,817.50$ 3,000.00$ 3,000.00$ 25,000.00$ 25,000.00$ 5,000.00$ 5,000.00$ 21,000.00$ 21,000.00$ 500.00$ 500.00$ 23,000.00$ 23,000.00$ 3,000.00$ 3,000.00$

4 2" Cold Mill Existing A.C. Pavement 360,000 SF 0.22$ 79,200.00$ 0.20$ 72,000.00$ 0.26$ 93,600.00$ 0.25$ 90,000.00$ 0.30$ 108,000.00$ 0.16$ 57,600.00$ 0.20$ 72,000.00$ 0.22$ 79,200.00$ 0.24$ 86,400.00$

5 Construct 1" A.C. D-PG 64-10 Leveling Course 2,250 TON 80.00$ 180,000.00$ 80.00$ 180,000.00$ 83.00$ 186,750.00$ 92.30$ 207,675.00$ 70.00$ 157,500.00$ 85.50$ 192,375.00$ 78.00$ 175,500.00$ 78.00$ 175,500.00$ 80.80$ 181,800.00$

6 Construct 1.5" ARHMC GG-C (PG 64-16) 3,375 TON 85.00$ 286,875.00$ 91.00$ 307,125.00$ 86.00$ 290,250.00$ 98.70$ 333,112.50$ 82.00$ 276,750.00$ 95.00$ 320,625.00$ 83.00$ 280,125.00$ 86.00$ 290,250.00$ 90.90$ 306,787.50$

7 Remove 6-inches of existing pavement and replace it with 4 inches of

AC B PG 64-10 Base Course500 SF 15.00$ 7,500.00$ 10.00$ 5,000.00$ 12.00$ 6,000.00$ 14.52$ 7,260.00$ 4.00$ 2,000.00$ 15.25$ 7,625.00$ 9.00$ 4,500.00$ 15.00$ 7,500.00$ 12.00$ 6,000.00$

8Sawcut, Remove, and Replace 8” Curb and Gutter Per SPPWC 120-2

A2-8(200), Match Existing480 LF 75.00$ 36,000.00$ 51.00$ 24,480.00$ 70.00$ 33,600.00$ 70.00$ 33,600.00$ 60.00$ 28,800.00$ 47.00$ 22,560.00$ 83.00$ 39,840.00$ 97.00$ 46,560.00$ 69.00$ 33,120.00$

9Sawcut, Remove, and Replace 8” Curb and 6" Gutter Per SPPWC

120-2 A2-8(200), Match Existing1,300 LF 65.00$ 84,500.00$ 53.00$ 68,900.00$ 60.00$ 78,000.00$ 60.00$ 78,000.00$ 60.00$ 78,000.00$ 44.00$ 57,200.00$ 70.00$ 91,000.00$ 85.00$ 110,500.00$ 65.00$ 84,500.00$

10Sawcut, Remove, and Replace 4" Thk Concrete Sidewalk per

SPPWC 112-2 and 113-2, Match Existing5,000 SF 8.00$ 40,000.00$ 9.25$ 46,250.00$ 8.00$ 40,000.00$ 8.00$ 40,000.00$ 8.00$ 40,000.00$ 9.00$ 45,000.00$ 12.00$ 60,000.00$ 9.00$ 45,000.00$ 8.25$ 41,250.00$

11Sawcut, Remove, and Replace PCC Driveway Approachs per

SPPWC 110-2 Types A, B Or C.150 SF 10.00$ 1,500.00$ 11.00$ 1,650.00$ 12.00$ 1,800.00$ 12.50$ 1,875.00$ 9.00$ 1,350.00$ 16.00$ 2,400.00$ 26.00$ 3,900.00$ 10.00$ 1,500.00$ 15.00$ 2,250.00$

12Remove, Dispose and Construct Cross Gutter/Spandrel per SPPWC

Std. Plan 122-2.600 SF 17.00$ 10,200.00$ 27.00$ 16,200.00$ 19.00$ 11,400.00$ 15.00$ 9,000.00$ 12.00$ 7,200.00$ 23.25$ 13,950.00$ 25.00$ 15,000.00$ 25.00$ 15,000.00$ 16.00$ 9,600.00$

13Remove, Dispose and Construct PCC Curb Ramp per SPPWC Std

Plan 111-5 Case A Type 1.16 EA 3,750.00$ 60,000.00$ 4,300.00$ 68,800.00$ 4,000.00$ 64,000.00$ 4,000.00$ 64,000.00$ 4,000.00$ 64,000.00$ 5,900.00$ 94,400.00$ 4,500.00$ 72,000.00$ 6,100.00$ 97,600.00$ 5,000.00$ 80,000.00$


Plan 111-5 Case D Type 2.2 EA 3,000.00$ 6,000.00$ 4,300.00$ 8,600.00$ 4,000.00$ 8,000.00$ 4,000.00$ 8,000.00$ 4,000.00$ 8,000.00$ 5,800.00$ 11,600.00$ 4,700.00$ 9,400.00$ 4,000.00$ 8,000.00$ 5,000.00$ 10,000.00$

15 Adust Existing utilities valve can and cover to Finish Surface 47 EA 100.00$ 4,700.00$ 110.00$ 5,170.00$ 450.00$ 21,150.00$ 10.00$ 470.00$ 75.00$ 3,525.00$ 100.00$ 4,700.00$ 450.00$ 21,150.00$ 150.00$ 7,050.00$ 300.00$ 14,100.00$

16 Adjust Existing Manhole Frame & Cover to Finished Surface 2 EA 2,000.00$ 4,000.00$ 1,000.00$ 2,000.00$ 1,550.00$ 3,100.00$ 1,620.00$ 3,240.00$ 1,600.00$ 3,200.00$ 1,650.00$ 3,300.00$ 700.00$ 1,400.00$ 1,200.00$ 2,400.00$ 3,000.00$ 6,000.00$

17 Street Thermoplastic Striping, Markings, and Signage. Match Existing in Kind. 1 LS 38,000.00$ 38,000.00$ 56,000.00$ 56,000.00$ 40,000.00$ 40,000.00$ 50,751.00$ 50,751.00$ 40,000.00$ 40,000.00$ 53,000.00$ 53,000.00$ 43,000.00$ 43,000.00$ 51,000.00$ 51,000.00$ 96,000.00$ 96,000.00$

18 Landscape and Irrigation 1 LS 200,000.00$ 200,000.00$ 230,000.00$ 230,000.00$ 175,000.00$ 175,000.00$ 180,000.00$ 180,000.00$ 300,000.00$ 300,000.00$ 291,000.00$ 291,000.00$ 263,000.00$ 263,000.00$ 210,000.00$ 210,000.00$ 338,000.00$ 338,000.00$

Badillo Street - Sub Total 1,255,475.00$ 1,249,492.50$ 1,282,450.00$ 1,171,983.50$ 1,458,072.50$ 1,398,335.00$ 1,392,315.00$ 1,432,964.00$ 1,528,000.00$

San Bernardino Road

19 2" Cold Mill Existing A.C. Pavement 111,000 SF 0.22$ 24,420.00$ 0.24$ 26,640.00$ 0.26$ 28,860.00$ 0.28$ 31,080.00$ 0.30$ 33,300.00$ 0.17$ 18,870.00$ 0.20$ 22,200.00$ 0.22$ 24,420.00$ 0.24$ 26,640.00$

20 Construct 2" ARHMC GG-C (PG 64-16) 1,415 TON 85.00$ 120,275.00$ 90.50$ 128,057.50$ 86.00$ 121,690.00$ 134.25$ 189,963.75$ 81.00$ 114,615.00$ 98.00$ 138,670.00$ 81.00$ 114,615.00$ 86.00$ 121,690.00$ 90.90$ 128,623.50$

21Construct 8"-14" variable PCC Curb and Gutter Per SPPWC Std Plan

120-.260 SF 30.00$ 7,800.00$ 52.00$ 13,520.00$ 70.00$ 18,200.00$ 70.00$ 18,200.00$ 60.00$ 15,600.00$ 55.50$ 14,430.00$ 87.00$ 22,620.00$ 105.00$ 27,300.00$ 69.00$ 17,940.00$

22Construct 8"-14" variable PCC Curb Only Per SPPWC Std Plan 120-.

160 21.00$ 3,360.00$ 54.00$ 8,640.00$ 50.00$ 8,000.00$ 50.00$ 8,000.00$ 50.00$ 8,000.00$ 52.50$ 8,400.00$ 49.00$ 7,840.00$ 102.00$ 16,320.00$ 65.00$ 10,400.00$

23Sawcut, Remove, and Replace 4" Thk Concrete Sidewalk per

SPPWC 112-2 and 113-2, Match Existing2,500 SF 8.00$ 20,000.00$ 9.25$ 23,125.00$ 8.00$ 20,000.00$ 9.00$ 22,500.00$ 8.00$ 20,000.00$ 9.00$ 22,500.00$ 12.00$ 30,000.00$ 9.00$ 22,500.00$ 8.25$ 20,625.00$

24Sawcut, Remove, and Replace PCC Driveway Approachs per

SPPWC 110-2 Types A, B Or C.1,000 SF 10.00$ 10,000.00$ 10.25$ 10,250.00$ 12.00$ 12,000.00$ 12.00$ 12,000.00$ 9.00$ 9,000.00$ 16.00$ 16,000.00$ 15.00$ 15,000.00$ 10.00$ 10,000.00$ 15.00$ 15,000.00$

25Remove, Dispose and Construct 8 inches PCC Pavement per

SPPWC Std Plan 132-3.4,800 SF 16.00$ 76,800.00$ 11.00$ 52,800.00$ 14.00$ 67,200.00$ 16.00$ 76,800.00$ 12.00$ 57,600.00$ 23.25$ 111,600.00$ 21.00$ 100,800.00$ 25.00$ 120,000.00$ 16.00$ 76,800.00$


Plan 111-5 as indicated on the Plans14 EA 3,750.00$ 52,500.00$ 4,300.00$ 60,200.00$ 4,000.00$ 56,000.00$ 4,000.00$ 56,000.00$ 4,000.00$ 56,000.00$ 4,950.00$ 69,300.00$ 4,600.00$ 64,400.00$ 8,400.00$ 117,600.00$ 5,000.00$ 70,000.00$

27 Adust Existing utilities valve can and cover to Finish Surface 35 EA 100.00$ 3,500.00$ 110.00$ 3,850.00$ 450.00$ 15,750.00$ 100.00$ 3,500.00$ 75.00$ 2,625.00$ 100.00$ 3,500.00$ 450.00$ 15,750.00$ 150.00$ 5,250.00$ 300.00$ 10,500.00$

28 Adjust Existing Manhole Frame & Cover to Finished Surface 7 EA 2,000.00$ 14,000.00$ 775.00$ 5,425.00$ 1,550.00$ 10,850.00$ 1,620.00$ 11,340.00$ 600.00$ 4,200.00$ 1,650.00$ 11,550.00$ 700.00$ 4,900.00$ 1,200.00$ 8,400.00$ 3,000.00$ 21,000.00$

29 Street Thermoplastic Striping, Markings, and Signage. Match Existing in Kind. 1 LS 15,000.00$ 15,000.00$ 28,000.00$ 28,000.00$ 30,000.00$ 30,000.00$ 40,000.00$ 40,000.00$ 17,000.00$ 17,000.00$ 28,000.00$ 28,000.00$ 32,000.00$ 32,000.00$ 27,000.00$ 27,000.00$ 63,000.00$ 63,000.00$

30 Landscape and Irrigation 1 LS 50,000.00$ 50,000.00$ 61,000.00$ 61,000.00$ 40,000.00$ 40,000.00$ 80,000.00$ 80,000.00$ 55,000.00$ 55,000.00$ 46,000.00$ 46,000.00$ 65,000.00$ 65,000.00$ 51,000.00$ 51,000.00$ 123,471.50$ 123,471.50$

San Bernardino Road - Sub Total 397,655.00$ 421,507.50$ 428,550.00$ 549,383.75$ 392,940.00$ 488,820.00$ 495,125.00$ 551,480.00$ 584,000.00$

Total Bid Price 1,653,130.00$ 1,671,000.00$ 1,711,000.00$ 1,721,367.25$ 1,851,012.50$ 1,887,155.00$ 1,887,440.00$ 1,984,444.00$ 2,112,000.00$

Excel Paving #7Gentry Brothers #5 All American #8 Onyx Paving Co #9

Bid Opening January 26, 2021 at 10:00 am

Base Bid Sequel Contractors #1 Sully Miller #2 Hardy & Harper #3 R.J Noble Company #6EC Construction #4

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ATTACHMENT D

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ITEM NO. CC 6

Meeting: CC Regular Meeting - Feb 16 2021 Title: Approval of Resolution CC 2021-08 to Submit an Application Under the Statewide Park

Development and Community Revitalization Program Presented By: Andy Bullington, Director of Public Works

Lisa Evans, Director of Parks and Recreation Rafael M. Fajardo, City Engineer Sharon Gallant, Environmental Services Manager

Recommendation: Adopt Resolution CC 2021-08 approving the submittal of an application for state grant funds Communityand Development Park the 68 Proposition under StatewideRevitalization Program for Wingate Park.

EXECUTIVE SUMMARY / BACKROUND: Proposition 68 was passed by voters June 2018 which authorized $4 billion of general obligation bonds to fund the creation and development of state and local parks, environmental protection projects, water infrastructure projects, and flood protection projects. Of that, $650,275,000 was allocated to the Statewide Park Program (SPP), a competitive grants program that aims to create new parks and new recreation opportunities in critically underserved communities across California. The previous three rounds of SPP were funded through Proposition 84 (2006 Bond Act). Over one hundred new parks were created and twenty existing parks were improved throughout California. For SPP Round 4, a project must involve either development or a combination of acquisition and development to: 1) create a new park, 2) expand an existing park, or 3) renovate an existing park. The program specifically focuses on low-income communities or communities with a critical lack of park space. Therefore, a project is only eligible if it is located in a community with less than 3 acres per 1,000 residents or the median household income is less than $51,026. The Community FactFinder Report, which is used by the grant program to determine eligibility, determined that the community surrounding the project site has 1.01 park acres per 1000 residents, which is considered very low. The low park acreage per resident underpins the critical need for improved open green space. The City is interested in submitting an online application to fund renovations for Wingate Park which is located in an underserved area that will benefit from the development of new park facilities. With improved park facilities and amenities at Wingate Park, the City can create or expand recreational activities and provide a vital green space to residents for significant cultural and community gatherings that will strengthen community life. DISCUSSION: The final grant guidelines for Round 4 of the program were released in July 2020, however due to the pandemic, the online application deadline was changed to March 12, 2021. City staff is working with a grant writing consultant, Inland Engineer Services, Inc., to prepare an application for the Statewide Park Program Grant. As part of the application requirements, a resolution must be approved by the local jurisdiction’s

governing body authorizing submission of a grant application.

Inland Engineering, will prepare and submit the SPP grant application for extensive renovations for Wingate Park. The project scope includes developing the park’s underused spaces into a skate park, pickle ball court, and

would include lighting/beautification improvements as well as reconstructing playground equipment to be compliant with the Americans with Disabilities Act (ADA). These renovations will have numerous benefits and provide a vibrant green space with accessible and safe equipment that will lead to the improvement of physical and psychological health as well as strengthening the community and improving quality of life. The City is pursuing funding through the SPP grant program for the design and construction phases of the project. Community involvement is central to the grant program. City staff and Inland Engineering will be diligently conducting outreach to ensure the community is included in the planning and design of this project while following the program’s guidelines. FISCAL IMPACT: The SPP does not require any matching funds. The City does not anticipate contributing any local match dollars. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): The grant program does require that all projects are in compliance with CEQA. A Notice of Exemption or a Notice of Determination must be filed by the County Clerk. ATTACHMENTS: Attachment A - Resolution CC 2021-08 Wingate Park Prop 68 Respectfully submitted,

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CALIFORNIA, APPROVING AN APPLICATION FOR PROPOSITION 68

STATEWIDE PARK DEVELOPMENT AND COMMUNITY

REVITALIZATION PROGRAM GRANT FUNDS

WHEREAS, the State Department of Parks and Recreation has been delegated the

responsibility by the Legislature of the State of California for the administration of the Statewide

Park Development and Community Revitalization Grant Program, setting up necessary procedures

governing the application; and

WHEREAS, said procedures established by the State Department of Parks and Recreation

require the Applicant to certify by resolution the approval of the application before submission of

said application to the State; and

WHEREAS, successful Applicants will enter into a contract with the State of California

to complete the Grant Scope project.


CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. Approves the filing of an application for the Wingate Park Multi-Benefit

Project.

SECTION 2. Certifies that said Applicant has or will have available, prior to

commencement of any work on the project included in this application, the sufficient funds to

complete the project.

SECTION 3. Certifies that if the project is awarded, the Applicant has or will have

sufficient funds to operate and maintain the project.

SECTION 4. Certifies that the Applicant has reviewed, understands, and agrees to the

General Provisions contained in the contract shown in the Grant Administration Guide.

SECTION 5. Delegates the authority to the Director of Public Works to conduct all

negotiations, sign and submit all documents, including, but not limited to applications, agreements,

amendments, and payment requests, which may be necessary for the completion of the Grant

Scope.

SECTION 6. Agrees to comply with all applicable federal, state and local laws,

ordinances, rules, regulations and guidelines.

SECTION 7. Will consider promoting inclusion per Public Resources Code §80001(b)(8

A-G).



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Attachment A

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BY:


ATTEST:



CERTIFICATION








Dated:



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ITEM NO. CC 7

Meeting: CC Regular Meeting - Feb 16 2021 Title: Comprehensive Annual Financial Report (CAFR) for Fiscal Year Ended June 30, 2020 Presented By: Anita Agramonte, Administrative Services Director

Theresa Franke, Accounting Supervisor Recommendation: Receive and file the following reports for Fiscal Year ended June 30, 2020:

• the Comprehensive Annual Financial Report (CAFR) and related Auditor Communications

• the Independent Accountants' Report on Agreed-Upon Procedures Applied to Appropriations Limit

EXECUTIVE SUMMARY: Annually, the Finance Division of the Administrative Services Department prepares and publishes the City's Comprehensive Annual Financial Report (CAFR) following the completion of an independent and certified audit. Attached is the June 30, 2020 CAFR and related reports. The CAFR is an extensive report summarizing the financial activities of the City that occurred from July 1, 2019 through June 30, 2020. BACKGROUND:

(GASBoard Standards Accounting Governmental the prepared compliancein is CAFRThe with B) requirements and attached hereto as Attachment A. Pursuant to GASB guidelines, the City's CAFR is divided into three sections: Introductory, Financial, and Statistical. The Introductory Section provides a brief overview of the City and contains a Letter of Transmittal, Organizational Chart and List of Principal Officials. The Financial Section contains the Independent Auditors' Report, Management's Discussion and Analysis (MD&A), and the Basic Financial Statements including Notes to the Financial Statements. The Statistical Section presents a variety of reports useful in analyzing the City's financial and operational history as well as evaluating the City's financial stability. DISCUSSION: The audit firm of CliffordLarsonAllen LLP has issued an unmodified ("clean") opinion on the financial statements as presented in the CAFR for the fiscal year ended June 30, 2020. This means that their examination, testing and audit procedures allowed them to conclude that the financial statements present fairly the financial position of the City. This is the best opinion the City can receive from its auditors. In addition, the independent auditors annually perform procedures to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution which requires that California cities establish an annual appropriations limit (the "Gann Limit"). Their findings are reflected on the Appropriations Limit Worksheet No. 6 as detailed in Attachment B. In conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Uniform Guidance, the auditors also perform an annual single audit when required. In Fiscal Year ended June 30, 2020, a Single Audit was not required.

Additionally, the Auditor Letter to the City Council attached hereto as Attachment C provides information about the auditor's responsibilities under generally accepted Government Auditing Standards, as well as information related to the planned scope and timing of the audit. FISCAL IMPACT: None. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): Not applicable. ATTACHMENTS: Attachment A - Comprehensive Annual Financial Report for FY ended June 30, 2020 Attachment B - 2020 Appropriations Limit Report Attachment C - Auditor Letter to City Council Respectfully submitted,

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CITY OF COVINA, CALIFORNIA Comprehensive Annual Financial Report

For The Fiscal Year Ended June 30, 2020

Victor Linares, Mayor

Jorge A. Marquez Patricia Cortez Mayor Pro Tem Council Member

Walter Allen, III John C. King Council Member Council Member

Chris Marcarello, City Manager

Prepared by the City of Covina Administrative Services Department-Finance Division

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Attachment A

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CITY OF COVINA, CALIFORNIA

Comprehensive Annual Financial Report

For the fiscal year ended June 30, 2020

Victor Linares Mayor

Jorge A. Marquez Mayor Pro Tem

Walter Allen, III Council Member

Chris Marcarello City Manager

Prepared by the City of Covina Administrative Services Department-Finance Division

Patricia Cortez Council Member

John C. King Council Member

Page 4 of 200


COMPREHENSIVE ANNUAL FINANCIAL REPORT

WITH REPORT ON AUDIT BY INDEPENDENT

CERTIFIED PUBLIC ACCOUNTANTS

FOR THE YEAR ENDED JUNE 30, 2020

PREPARED BY:

ADMINISTRATIVE SERVICES DEPARTMENT – FINANCE DIVISION

Page 5 of 200

Page 6 of 200

CITY OF COVINA Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2020 Table of Contents

Page Number

INTRODUCTORY SECTION:

Elected and Administrative Officials i Letter of Transmittal iii Organization Chart xiii

FINANCIAL SECTION:

Independent Auditors’ Report 1

Management’s Discussion and Analysis (Required Supplementary Information) 3

Financial Statements: Government-Wide Financial Statements:

Statement of Net Position 17 Statement of Activities 18

Fund Financial Statements: Governmental Funds: Balance Sheet 20

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 21

Statement of Revenues, Expenditures and Changes in Fund Balances 22 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures

and Changes in Fund Balances to the Statement of Activities 23

Proprietary Fund: Statement of Net Position 24 Statement of Revenues, Expenses and Changes in Fund Net Position 25 Statement of Cash Flows 26

Fiduciary Funds: Statement of Fiduciary Net Position 28 Statement of Changes in Fiduciary Net Position 29

Notes to the Financial Statements 31

REQUIRED SUPPLEMENTARY INFORMATION:

Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous) 75 Schedule of Contributions - CalPERS (Miscellaneous) 76 Schedule of Proportionate Share of the Net Pension Liability (Safety) 77

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Page Number

REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED):

Schedule of Contributions (Safety) 78 Schedule of Changes in the Net OPEB Liability and Related Ratios 79 Other Postemployment Benefits (OPEB) Schedule of Contributions 80 Budgetary Comparison Schedules:

General Fund 81 Measure R 82

Note to Required Supplementary Information 83

SUPPLEMENTARY INFORMATION:

Other Governmental Funds: Description of Other Governmental Funds 85

Combining Balance Sheet 88 Combining Statement of Revenues, Expenditures and Changes in Fund Balances 94 Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:

Community Development Block Grant Fund 100 Prop A Fund 101 Law Enforcement Fund 102 Narcotics Seizure Fund 103 State Gas Tax Fund 104 Prop C Fund 105 Air Quality Fund 106 Municipal Parking District Fund 107 Lighting Assessment District Fund 108 Landscaping Assessment District Fund 109 Community Facilities District Fund 110 Shoppers Lane Parking District Fund 111 Measure M Fund 112 TDA Grant Fund 113 Other Grants Fund 114 Road Maintenance and Rehabilitation Act Fund 115 PEG Access Television Fund 116 Housing Authority 117 Measure W 118

Capital Projects Funds: General Projects Fund 119 Covina Revitalization Projects Fund 120 Park Development Fund 121 Transportation Fund 122

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Page Number

SUPPLEMENTARY INFORMATION (CONTINUED):

Internal Service Funds: Description of Internal Service Funds 123 Combining Statement of Net Position 125 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 126 Combining Statement of Cash Flows 127

Agency Funds: Description of Agency Funds 129 Combing Statement of Fiduciary Assets and Liabilities 131 Combining Statement of Change in Fiduciary Assets and Liabilities 132

STATISTICAL SECTION (UNAUDITED):

Description of Statistical Section Contents 133 Net Position by Component 134 Changes in Net Position 135 Fund Balances of Governmental Funds 138 Changes in Fund Balances of Governmental Funds 139 General Governmental Tax Revenues by Source 141 Assessed Value of Taxable Property 142 Assessed Value of Taxable Property by Use 143 Property Tax Rates 144 Principal Property Owners 145 Property Tax Levies and Collections 146 Ratios of Outstanding Debt by Type 147 Ratios of Net General Bonded Debt Outstanding 148 Direct and Overlapping Governmental Activities Bonded Debt 149 Legal Debt Margin Information 150 Pledged-Revenue Bond Coverage - Water Utility Fund Certificates of Participation and Revenue Bonds 151 Pledged-Revenue Bond Coverage - Sewer Fund Revenue Bonds 152 Demographic and Economic Statistics 153 Principal Employers 154 Operating Indicators by Function 155 Full-Time Equivalent City Government Employees by Function 157 Capital Asset Statistics by Function 158 Continuing Disclosure - Water System 159

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Page Number

SUPPLEMENTARY INFORMATION (CONTINUED):

Internal Service Funds: Description of Internal Service Funds 123 Combining Statement of Net Position 125 Combining Statement of Revenues, Expenses and Changes in Fund Net Position 126 Combining Statement of Cash Flows 127

Agency Funds: Description of Agency Funds 129 Combing Statement of Fiduciary Assets and Liabilities 131 Combining Statement of Change in Fiduciary Assets and Liabilities 132

STATISTICAL SECTION (UNAUDITED):

Description of Statistical Section Contents 133 Net Position by Component 134 Changes in Net Position 135 Fund Balances of Governmental Funds 138 Changes in Fund Balances of Governmental Funds 139 General Governmental Tax Revenues by Source 141 Assessed Value of Taxable Property 142 Assessed Value of Taxable Property by Use 143 Property Tax Rates 144 Principal Property Owners 145 Property Tax Levies and Collections 146 Ratios of Outstanding Debt by Type 147 Ratios of Net General Bonded Debt Outstanding 148 Direct and Overlapping Governmental Activities Bonded Debt 149 Legal Debt Margin Information 150 Pledged-Revenue Bond Coverage - Water Utility Fund Certificates of Participation and Revenue Bonds 151 Pledged-Revenue Bond Coverage - Sewer Fund Revenue Bonds 152 Demographic and Economic Statistics 153 Principal Employers 154 Operating Indicators by Function 155 Full-Time Equivalent City Government Employees by Function 157 Capital Asset Statistics by Function 158 Continuing Disclosure - Water System 159 Continuing Disclosure - Wastewater System 160

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Page 11 of 200

INTRODUCTORY SECTION

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CITY OF COVINA, CALIFORNIA Elected and Administrative Officials

2019-2020

Elected Officials

Mayor:

Victor Linares

Mayor Pro Tem:

Jorge A. Marquez

Council Members:

Walter Allen, III

Patricia Cortez

John C. King

City Clerk:

Mary Lou Walczak

City Treasurer:

Geoffrey Cobbett

Administrative Staff

City Manager: *

Chris Marcarello

City Attorney: *

Candice Lee

Administrative Services Director:

Anita Agramonte

Police Chief:

John Curley

Fire Chief: **

Daryl L. Osby

Public Works Director (Interim):

Andy Bullington

Parks and Recreation Director:

Lisa Evans

Community Development Director:

Brian Lee

Chief Deputy City Clerk:

Nicole Alvarez

* Appointed by City Council

** Appointed by Los Angeles County Fire District

Term Expires

March 2021

March 2021

March 2024

March 2022

March 2022

March 2022

March 2022

Date of Hire

January 2017

May 2015

July 2016

January 1993

February 2011

June 2018

July 1989

June 2015

May 2015

iPage 14 of 200

February 8, 2021

Honorable Mayor and City Council City of Covina Covina, California

The Comprehensive Annual Financial Report for the City of Covina (City), California, as of June 30, 2020 and for the year then ended, is submitted herewith. Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to present fairly the financial position, results of operations and cash flows of the various funds of the City. All disclosures necessary to enable the reader to gain an understanding of the City’s financial activities have been included.

The financial statements are the responsibility of the City’s management. Completeness and reliability of the information contained in this report is based upon a comprehensive framework of internal controls that is established for this purpose. The costs of internal control should not exceed the anticipated benefits. The objective of internal controls is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements.

The Management’s Discussion and Analysis (MD&A) interprets the financial reports by analyzing trends and by explaining changes, fluctuations, and variations in the financial data. In addition, the MD&A is intended to disclose any known significant events or decisions that affect the financial condition of the City. MD&A complements this letter of transmittal and should be read in conjunction with it.

Independent Audit. City policy requires that its financial statements be audited by a certified public accountant. CliftonLarsonAllen LLP, Certified Public Accountants, have issued an unqualified (“clean”) opinion on the City’s financial statements for the fiscal year ended June 30, 2020. The auditor’s report on the basic financial statements and required supplementary information is included in the financial section of this report.

The City is legally required to undergo an annual single audit in conformity with the provisions of the Single Audit Act of 1984 and the U.S. Office of Management and Budget Uniform Guidance, Audits of State and Local Governments, if total federal grant expenditures exceed $750,000 in a single year. The City of Covina is a recipient of federal, state and county assistance, and for Fiscal Year 2019-20 it will not be subject to the requirements of a Single Audit as it did not have Federal expenditures greater than the $750,000 threshold.

iiPage 15 of 200

Profile of the City of Covina

The City is a mature, suburban city located twenty-three miles east of downtown Los Angeles in the eastern portion of the San Gabriel Valley. The City encompasses an area of approximately seven square miles and is virtually built out. The current population is 48,846 according to the State of California Department of Finance.

The City is a general law city, incorporated in 1901. The City Council is composed of five members elected biannually at large to four year alternating terms. The Mayor and Mayor Pro Tem are selected by the City Council annually.

The City has a Council/Manager form of government. The City Manager is appointed by the City Council to manage the daily affairs of the City and to implement policies established by the City Council.

This report includes all the funds of the City. The City provides a full range of services including police and fire protection (via a contract with the Los Angeles County Fire Department); construction and maintenance of highways, streets and infrastructure; library and recreational services; public transportation; planning and economic development; housing; and administrative services. In addition to general municipal activities, the City provides water and sewer services.

The Council is required to adopt a final budget by June 30th of each fiscal year. The annual budget serves as the foundation for the City’s financial planning and control. The budget is prepared by fund, program (e.g., public safety), and activity (e.g., police patrol). Department heads may transfer resources within each activity as needed. The City Manager may transfer resources between activities within a fund. Transfers between funds require approval from the City Council.

In accordance with the reporting entity definition of the Governmental Accounting Standards Board, the City has included the Covina Public Financing Authority, the Successor Agency for the former Covina Redevelopment Agency (as of February 1, 2012), and the Covina Housing Authority in the financial report.

Several state and county agencies, as well as school districts, provide services to the City but do not meet the established criteria for inclusion, and accordingly are excluded from this report.

Economic Condition and Outlook

Much of the local development of the City occurred during the post-World War II building boom, which took place from the late 1940’s through the 1960’s. Prior to the building boom, the City was a major citrus producing area.

The character of the City is one of predominantly low to medium density residential and low-intensity commercial and light industrial uses. Single-family residential properties are the most common use. In addition, there are many commercial establishments, particularly community and neighborhood shopping centers, and a relatively large number of small to medium-sized professional offices and light manufacturing operations. The local economy is based on a variety of service, retail, and light manufacturing businesses as well as government agencies.

iiiPage 16 of 200

The City’s economy always has been healthy, though relatively small in population and area. The City consistently ranks high in retail sales tax generation and sales tax per capita among San Gabriel Valley cities. This is primarily due to the mix of retail businesses located in the City as well as a voter-approved transaction and use tax measure which increased the sales tax rate from 9.5% to 10.25%. Fiscal year 2019-20 represents the first full year that this increase was effective. Despite being in the middle of the well-established San Gabriel Valley, Covina retains a small-town atmosphere. The nearby San Bernardino, Foothill, and Orange Freeways, and the Southern California Regional Rail Authority Metrolink Commuter Rail Line link the City to other areas of metropolitan Los Angeles.

Long-term Financial Planning

As part of a financial strategic plan, the City Council developed the following budget policy guidelines for budgetary and financial planning purposes:

Program - Base Budget

1. Appropriations

Each program will identify activities and the recommended appropriations

Identify recurring vs. nonrecurring appropriations

Identify general vs. restricted appropriations

Continuing appropriations for year-end

Encumbrances and contractual commitments

Grant, restricted donation and capital project appropriations are considered life-

cycle appropriations

All other appropriations shall lapse at year-end unless carried forward by City

Council action

2. Estimated Revenues

Estimated revenues will be identified by fund, program and activity

Fund types include general, special revenue, debt service, capital projects, enterprise and

internal service

Identify recurring vs. nonrecurring revenues

Identify general revenues vs. restricted revenues

3. Fund Balances/Working Capital

Program-base budget will calculate available fund balances and/or working capital

available in the various funds

ivPage 17 of 200

Program-base budget will establish adequate reserves

Capital needs

Offset economic hard times

Stabilize fluctuations in cash flow requirements

Emergency Situations

General Fund

Minimum of 20% of operating expenses-reserve exclusive of risk management

requirements

Excess reserves will be assigned for nonrecurring activities or capital improvements

Maintain general liability and worker’s compensation reserves based on actuarial

recommendations

Restricted Funds

Reserves can be used for only restricted purposes

Excess reserves can be restricted for recurring and nonrecurring activities or capital

improvements depending on the nature of the fund

Program – Base Budget Will Link Resources with Results

1. Identifying community needs for essential services

2. Describing the programs required to provide the essential services

3. Identifying the purpose of activities performed in delivering services

4. Establishing goals and objectives which define the nature and level of services required

5. Identifying resources required to perform program activities and accomplish goals and

objectives

6. Setting standards to measure and evaluate

Output and outcomes of program activities

Accomplishment of program activities

Staffing levels

Program activity revenue and appropriations

o Make budgetary and financial decisions on conservative estimates of revenues,

expenditures and other financing sources and uses

o The greater the uncertainty and/or volatility of the budgetary and financial estimates,

the more conservative the estimates

vPage 18 of 200

Program Base Budget-Change in Service

1. The base budget is the required appropriation level needed to maintain the previous year

budget service level

2. Change in service is the proposed increase or decrease in service level in the program-based

budget activity

3. Increase in services shall be offset with new revenue or a corresponding decrease in other

program services

4. Grants shall not have a negative impact on General Fund services

5. Future operating grants will not be funded by the General Fund unless there is a new

revenue source or decrease in other program services

Program – Base Budget Shall Be Balanced On a Long-Term Basis

1. Ongoing and recurring costs shall be funded with ongoing and recurring revenues

2. One-time and nonrecurring costs shall be funded with excess ongoing revenues, available

one-time revenues or excess reserves

3. One-time or nonrecurring revenues shall not fund ongoing cost

4. Current costs shall be recognized and funded in the current year, not deferred or funded in

future years

5. Maintain current full costs providing City services

6. The General Fund shall try to maintain a minimum $100,000 operating contingency for

unanticipated events

7. Make conscious decisions about cost recovery and/or general tax subsidy of those services

that benefit only a portion of the tax paying public

Infrastructure Maintenance

1. Identify preventive maintenance of infrastructure to minimize future expenditure

2. Amortize capital costs

Replacing or expanding existing facilities and equipment

With respect to equipment, rates shall be established to recover the replacement cost of

each item at the end of its useful life

Facilities shall be amortized to cover ongoing maintenance and cyclical repairs, and for

the replacement or expansion of major structures

viPage 19 of 200

viiPage 20 of 200

CITYOFCOVINA

ORGANIZATIONALCHART

FISCALYEAR2019-2020

CITIZENS

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viii

Page 21 of 200

FINANCIAL SECTION

Page 22 of 200


Page 23 of 200

CliftonLarsonAllen LLP CLAconnect.com

1

INDEPENDENT AUDITORS’ REPORT

The Honorable Mayor and Members of City Council of the City of Covina

Covina, California

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Covina (the City) as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Page 24 of 200

2

Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Covina as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 23 to the financial statements, the City made a restatement to beginning net position. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the miscellaneous plan schedule of changes in the net pension liability and related ratios and the schedule of contributions, the safety plan schedule of proportionate share of the net pension liability and the schedule of contributions, the other post-employment benefit plan schedule of changes in the net OPEB liability and related ratios and the schedule of contributions - OPEB and the budgetary comparison schedules for the General Fund and Measure R Special Revenue Fund, identified as Required Supplementary Information (RSI) in the accompanying table of contents, be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the RSI in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the RSI because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s financial statements. The introductory section, the combining and individual fund financial statements and schedules (supplementary information) and statistical section are presented for purposes of additional analysis and are not a required part of the financial statements. The supplementary information, as listed in the table of contents, is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Page 25 of 200

3

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated February 8, 2021, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

CliftonLarsonAllen LLP

Irvine, California February 8, 2021

Page 26 of 200

4


Page 27 of 200

Management’s Discussion and Analysis

5

The following discussion and analysis of the City of Covina’s (City) financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2020. This report is prepared in conjunction with the accompanying transmittal letter and basic financial statements and notes.

FINANCIAL HIGHLIGHTS

The assets of the City exceeded its liabilities at the close of the fiscal year by $98,658,676. The Governmental Activities have a deficit unrestricted net position of $44,202,396. Business-type Activities have unrestricted net position of $17,719,110.

The City’s net position for governmental and business-type activities decreased by $1,422,902 or 1.42% from the previous fiscal year.

The total cost of all City activities was $69,681,558 for the current fiscal year. Net cost of all activities was $39,484,425.

During the current fiscal year, the City’s governmental activities net expenditures exceeded net revenues by $2,205,989.

In the City’s business-type activities, net revenues exceeded net expenditures by $783,087.

The total fund balance of the City’s governmental funds was $31,354,279 at the close of the fiscal year. This includes $14,272,459 fund balance of the General Fund, $3,167,653 of which is unassigned and is available for spending at the City’s discretion (see note 14 of Notes to the Financial Statements).

General Fund revenues and other financing sources (uses) exceeded expenditures by $4,241,520 for the fiscal year.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. The report also contains required supplementary information and other supplementary information in addition to the basic financial statements.

Government-wide Financial Statements The government-wide financial statements are designed to provide a broad overview of the City’s finances, in a manner similar to private-sector business.

Statement of Net Position The Statement of Net Position presents information on all of the City’s assets, deferred outflows, liabilities and deferred inflows, the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

Statement of Activities The Statement of Activities presents information showing how the City’s net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Page 28 of 200

Management’s Discussion and Analysis (Continued)

6

Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) and from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities include General Government, Public Safety, Public Works, Culture and Recreation, Community Development, Transit, Redevelopment and Housing, and Interest on Long-Term Debt. The business-type activities include Water Utility, Environmental Protection, and Sewer.

The government-wide financial statements include not only the City itself (known as the primary government) but also the blending of the legally separate Covina Public Financing Authority, and Covina Housing Authority for which the City is financially accountable. These component units are therefore included as an integral part of the primary government.

Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided in three categories: governmental funds, proprietary funds, and fiduciary funds.

Governmental Funds Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating the City’s near-term financing requirements.

The focus of governmental funds is narrower than that of the government-wide financial statements; it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This will provide a better understanding of the long-term impact of the City’s near-term financing decisions. The Governmental Fund Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate the comparison between governmental funds and governmental activities.

The City maintains twenty-four individual governmental funds. Information is presented separately in the governmental funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances for the General and Measure R funds which are considered to be major funds. Information from the other non-major governmental funds is combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the supplementary information section of the report.

The City adopts an annual appropriated budget for all of the governmental funds. Budgetary comparison schedules have been provided in the required supplementary information section for the general and major special revenue fund to demonstrate compliance with the budget. Budgetary comparison schedules have been provided in the supplementary information section for the remaining major and non-major governmental funds.

Proprietary Funds The City maintains two different types of proprietary funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City’s enterprise funds account for the Water Utility, Environmental Protection and Sewer. Internal service funds are used to accumulate and allocate costs internally among various City functions. The City’s internal service funds account for Information Technology, Central Equipment, Workers’ Compensation, and Public Liability. These services predominately benefit governmental and have been allocated within the governmental activities in the government-wide financial statements.

Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the Water Utility, Environmental Protection and Sewer. Water and Sewer funds are considered to be major funds of the City. Conversely, all Central Equipment, Information Technology, Workers’ Compensation, and Public Liability internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds is provided in the form of combining statements in the supplementary information section of this report.

Page 29 of 200


7

Fiduciary Funds Fiduciary funds (private purpose trust fund) are used to account for the assets and activities for which the City acts as trustee. The Statement of Fiduciary Net Position reports the assets and liabilities of the fund and the net position is reported as “held in trust for others”.

The government-wide financial statements exclude fiduciary funds.

Notes to the Financial Statements The Notes to the Financial Statements provide additional information that is essential to the full understanding of the data provided in the government-wide and fund financial statements.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

Total Net Position Net position reflects the excess of assets over liabilities and may serve over time as a useful indicator of the City’s financial position.

As detailed in the Government-Wide Financial Statements-Statement of Net Position, the City’s total net position for governmental and business-type activities was $98.7 million at the close of the fiscal year, which is a decrease of $1.4 million or 1.42% from the previous fiscal year.

The largest portion of that net position, $110.7 million, is in capital assets (land, buildings and structures, infrastructure, and machinery and equipment) less any related debt outstanding used to acquire those assets. Capital assets are acquired for the purpose of providing services and infrastructure and are unavailable for future spending. Resources needed to repay related debt outstanding must be provided from other sources before liquidating capital assets to satisfy these liabilities.

Additionally, $14.5 million of the City’s total net position represents resources that are subject to external restrictions such as public safety, transit, and capital projects. Those restrictions are designated by certain federal, state, and local statutes and may not be used by the City for ongoing obligations to citizens and creditors. This leaves the City with a deficit unrestricted net position of $26.5 million.

Governmental Activities This analysis focuses on the net position and changes in net position of the City’s governmental activities, as presented in the Statement of Net Position.

The net position of the governmental activities represents 55.28% of the City’s total net position. As reflected in the following table, restricted governmental activities net position decreased by $2.6 million (15.15%) from the previous fiscal year. This portion of net position is subject to external restrictions relating to public safety, public works, culture and recreation, transit and redevelopment and housing.

2020 2019

Current and other assets 44,698,963$ 46,661,260$

Capital assets 86,455,238 84,702,076

Deferred outflows 12,221,282 12,185,709

Total Assets and deferred outflows 143,375,483 143,549,045

Long-term liabilities outstanding 80,611,670 77,438,263

Other liabilities 4,239,811 6,685,672

Deferred inflows 3,983,279 3,995,798

Total Liabilities and deferred inflows 88,834,760 88,119,733

Net position:

Net Investment in capital assets 84,273,491 84,857,338

Restricted 14,469,628 17,053,339

Unrestricted (44,202,396) (46,481,365) Total net position 54,540,723$ 55,429,312$

Governmental Activites Net Position

The following table compares fiscal year changes in revenues and expenses in governmental activities that comprise net position, as found in the Statement of Activities.

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8

Revenues 2020 2019

Program revenues:

Charges for services 7,287,624$ 7,783,444$

Operating grants and contributions 8,081,089 7,962,987

Capital grants and contributions 245,420 4,308,857

General revenues:

Property taxes 13,812,070 13,123,606

General sales tax 9,296,400 9,315,358

Transaction and use tax 6,579,486 1,438,519

Utility users taxes 4,523,187 4,590,983

Other taxes 2,601,067 2,456,836

Investment earnings 620,835 883,542

Gain/(Loss) on sale of capital assets 54,268 15,129

Miscellaneous 49,645 12,562

Total Revenues 53,151,091 51,891,823

Expenses

General government 3,356,218 2,082,578

Public safety 33,529,788 29,863,536

Public works 8,539,877 7,468,025

Culture and recreation 4,630,583 4,434,960

Community development 2,382,311 1,738,982

Transit 2,068,390 1,176,235

Redevelopment and housing 598,363 492,737

Interest on long term debt 251,550 287,459

Total expenses 55,357,080 47,544,512

Increase (Decrease) in net position before transfers

Change in net position (2,205,989) 4,347,311

Beginning net position 55,429,312 57,204,473

Restatements 1,317,400 (6,122,472)

Ending net position 54,540,723$ 55,429,312$

Governmental Activities Change in Net Position

As reflected above, the City’s net expenditures exceeded net revenues of governmental activities by $2.2 million. Compared to the previous year, 2020 revenues show an increase of $1.3 million while expenses increased by $7.8 million.

The majority of the revenue increase is due to an increase in transaction and use tax of $5.1 million which results from the adoption of a voter approved transaction and use tax measure effective April 1st, 2019 as well as a recent court decision increasing the collection of sales tax related to online purchases. Property taxes increased by $688,000 due in part to the disposal of redevelopment properties for which the City received 15%. The $4.1 million decrease in Capital grants is comprised mostly of $1.7 million in Culture and recreation and $2.1 million in Transit received in 2019 for construction of the Senior Center, Bikeway and Grand Ave projects.

A large part of the general government cost increase is COVID-19 related costs, including salaries and supplies of $796,000. The City has submitted claims for reimbursement from the State and Federal governments; associated funding received will be reflected in Fiscal Year 2020-2021. Increased public safety costs include an increase of $1.2 million in fire protection services, $1.6 million in pension costs, and $430,000 increase in unfunded pension liabilities.

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9

Net expenses are good indications of the extent to which the services provided by the City are financed from taxes paid by the citizens (general revenues) as opposed to recovering the cost of these services with user fees and other contributions (program revenues). Transit and Redevelopment and Housing program revenues are sufficient to cover related expenses. Due to increased salary and plan check fee service costs, Community Development required additional funding from General Revenues. COVID-19 related costs required that General government also be financed in part by general revenues. In addition, Public Safety, Public Works and Culture and Recreation expenses are financed primarily from general revenues. Expenses and associated program revenues for each governmental function are reflected on the following table.

As reflected on the following graph, taxes, operating grants and contributions, and charges for services provide 95.3% of the overall revenue sources of the governmental activities. Taxes include property, sales, utility users and other taxes (transient occupancy, property transfer, business license and franchise). The City is committed to maximizing the use of both operating and capital grants.

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

GeneralGovernment

Public Safety Public Works Culture &Recreation

CommunityDevelopment

Transit Redevelopment& Housing

Interest on longterm debt

Expenses and Program Revenues-Governmental Activities

Expenses

ProgramRevenues

Charges for Service13.80%

Operating Grants and Contributions

12.27%Capital Grants and

Contributions3.31%

Property Taxes25.99%

Sales Taxes17.49%

Transaction and use tax

12.38%

Utility Users Taxes8.51%

Other Taxes4.89%

Other Revenues1.36%

Revenue Sources-Governmental Activities

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10

The next graph demonstrates governmental activity expenditures by function/program. Note that public safety and public works represent 76% of the governmental activities’ expenditures; this is consistent with the City’s highest priority of citizen safety and well-being. Culture and recreation represent 8% of governmental activities as the City is committed to providing valuable programs to the community.

Business-type Activities The analysis of business-type activities focuses on the net position and changes in net position of the City’s Water Utility, Environmental Protection, and Sewer functions. The following table summarizes the business-type net position for fiscal years 2019 and 2020. Current year detail can be found in the Government-Wide Financial Statements, Statement of Net Position.

2020 2019

Current and other assets 31,212,623$ 42,269,856$

Capital assets 47,943,365 36,879,191

Deferred outflows of resources 1,635,944 693,995

Total assets and deferred outflows 80,791,932 79,843,042

Long-term liabilities outstanding 34,211,883 33,382,251

Other liabilities 2,153,532 1,704,639

Deferred inflows of resources 308,564 103,886

Total liabilities 36,673,979 35,190,776

Net positionNet Investment in capital assets 26,398,843 18,856,666

Restricted - 7,122,938

Unrestricted 17,719,110 18,672,662

Total net position 44,117,953$ 44,652,266$

Business-Type Activities Net Position

General government 6%

Public safety 61%

Public works 15%

Culture and recreation 8%

Community development 4%

Transit 4%

Redevelopment and housing 1%

Interest on long term debt 1%

Functions/Program Expenditures-Governmental Activities

Page 33 of 200


11

The net position of the business-type activities represents 44.72% of the City’s total net position and decreased by $534,000 from the previous year. The revenue and expense activity which generated the change in business type net position is reflected on the following table.

2020 2019RevenuesProgram Revenues:

Charges for services 14,583,000$ 13,699,879$ Operating grants and contributions - - Capital grants and contributions - -

General revenues-investment earnings 524,565 1,048,380 Total Revenues 15,107,565 14,748,259

ExpensesWater Utility 10,318,472 10,289,222 Environmental Protection 1,176,992 1,195,439 Sewer 2,829,014 2,444,970

Total Expenses 14,324,478 13,929,631 Change in net position before transfers 783,087 818,628 Transfers in (out) - -

Change in net position 783,087$ 818,628$

Business-type Change in Net Position

As reflected above, the City’s business-type program revenues (charges for services) exceeded program expenses by $259,000. Total business-type program revenues increased by $359,000 from the prior fiscal year. This reflects a $1.1 million increase in water service charges as well as a reduction in environmental protection service charges of $187,000. General revenues have decreased by $524,000 due predominately to the reduced valuation of the City’s investment in Covina Irrigating Company.

Water and Sewer charges for services were sufficient to cover both operating and interest expenses for the respective functions during the fiscal year. The revenue reduction in Environmental charges for services contributed to a $173,000 deficit in environmental protection activities.

Total business-type expenses increased by $395,000 from the previous fiscal year; a major factor is an increase of $384,000 in sewer expenses which includes OPEB liability cost allocation of $348,000 which previously had not been allocated to enterprise funds.

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12

Expenses and associated program revenues for each business-type function are reflected on the following table.

As reflected on the following chart, charges for services are the major source providing revenue to be used for business-type activity operating and capital maintenance costs. Water Utility Charges for Services include water sales, service fees, connection fees and other miscellaneous charges. Environmental protection charges include fees for refuse and recycling services, compressed Natural Gas (CNG), and permit fees for storm water and industrial waste. Sewer charges for services include fees established to recover the cost of operating the sewer system throughout the City. Other revenues reflect investment earnings.

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

Expenses

ProgramRevenues

Expenses and Program Revenues-Business-type Activities

Water Utility Environmental Protection

Sewer

Charges for services, 97%

Other revenues, 3%

Revenues by Source - Business-type Activities

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13

The next chart demonstrates business-type activity expenditures by function/program. Water comprises the majority of expenditures, which includes water source and supply resale, administration, and depreciation.

FINANCIAL ANALYSIS OF THE CITY FUNDS

The City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The fund financial statements focus on individual parts of City government, reporting City operations in more detail than government-wide statements.

Governmental Funds The focus of governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. This information assesses the City’s financing requirements. Unassigned fund balance is a measure of the City’s net resources available for designation or spending at the end of the fiscal year.

As of June 30, 2020, the City’s governmental funds reported combined fund balances of $31,354,279, an increase of $2.4 million from the prior fiscal year. There is $2,335,441 of Unassigned fund balance available for designation and/or future spending at the City’s discretion. The remaining fund balance is nonspendable, restricted, committed or assigned and is not available for spending at the City’s discretion, as detailed in Note 14 of Notes to the Financial Statements.

The following is a summary of fund balances of the governmental funds for fiscal years 2015-2020:

*Certain balances have been restated due to prior period adjustments.

Water utility 72%

Environmental protection

8%

Sewer 20%

Expenses by Function/Program - Business-type Activities

2015* 2016* 2017 2018* 2019 2020

Unassigned $(58,040) $(46,555) $(27,396) $(53,943) $(1,685,799) $2,335,441

Nonspendable, restricted,committed or assigned

$21,338,935 $18,051,907 $26,478,451 $33,950,566 $30,654,468 $29,018,838

Total $21,280,895 $18,005,352 $26,451,055 $33,896,623 $28,968,669 $31,354,279

‐$5,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

Fund Balances of Governmental Funds

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The General Fund is the chief operating fund of the City. As displayed in the Governmental Fund Financial Statements-Balance Sheet, the fund balance of the General Fund at the end of Fiscal Year 2019-20 was $14.3 million and is classified as follows: $2.6 million non-spendable, $8 million committed, $428,000 restricted, $26,000 assigned, and $3.2 million unassigned. In keeping with the City Council’s Reserve Policy, the $8 million in committed fund balance represents the City’s Emergency Contingency Reserve and represents 20% of General Fund expenditures. Additionally, the unassigned fund balance in the General Fund represents 7.9% of total General Fund expenditures.

The fund balance of the General Fund increased by $4.2 million during the fiscal year which is primarily attributable to the voter approved Transaction and Use Sales Tax measure.

The Measure R fund is a major fund of the City. The total fund balance of this fund is $41,000 which is restricted and not available for spending at the City’s discretion. Compared to the previous year, the Measure R fund reflects a decrease of $3.4 million due to Total Road Improvement Program (“TRIP”) project expenses.

Proprietary Funds The City’s proprietary funds financial statements provide the same type of information found in the government-wide statements, but provide detail specific to the City’s water utility, environmental and sewer enterprises.

Unrestricted net position of the Water Utility fund decreased to $10.3 million in the fiscal year from $14.8 million in the prior year. Environmental Protection fund unrestricted net position decreased to $984,000 from $1.3 million in the prior year. Although the Sewer enterprise fund balance remained relatively unchanged, unrestricted net position of the fund increased to $4.5 million from $4.2 million in the prior year. Other factors concerning the finances of these three funds are addressed in the discussion of the business-type activities.

General Fund Budgetary Highlights Appropriation differences between the original budget and the final budget are $652,000 which represents a 1.6% increase. The increases include appropriation carryovers from the prior fiscal year of $154,000 and mid-year adjustments of $259,000. Of those amounts, $94,000 was carried over for Public Safety and $203,000 was adjusted in mid-year for Community Development-Planning and Code enforcement.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets The City’s investment in capital assets for governmental and business-type activities as of June 30, 2020, is $134.4 million (net of accumulated depreciation). Capital assets include buildings and structures, improvements other than buildings, domain infrastructure, water system infrastructure, sanitary sewer infrastructure, machinery and equipment, and construction in progress. The following table is a summary of capital assets (net of accumulated depreciation) at June 30, 2020 and 2019.

Page 37 of 200


15

Total capital assets, net of depreciation, increased from the prior year by $12.8 million. This is due largely to water system infrastructure in business-type activities, net of $12.4 million depreciation. Decreases in Construction in progress reflects projects completed in the course of the year which were reclassified to completed capital asset accounts. Note 8 of Notes to the Financial Statements provide additional capital asset information.

Debt Administration At the end of the fiscal year, the City had total long-term debt outstanding of $114.8 million. This includes notes, capital lease, revenue bonds payable, other post-employment benefits and net pension liabilities. The following is summary of the outstanding debt (net of unamortized charges) at June 30, 2020 and 2019:

2020 2019Governmental activitiesCompensated absences 3,762,261$ 3,803,544$ Claims and judgments 7,247,000 7,138,000 Certificates of participation payable (COP) 5,279,627 5,471,187 Capital lease payable 244,087 496,571 Section 108 loan 2,250,000 2,375,000 Postemployment benefit obligation 5,025,398 6,415,602 Net pension liability 56,803,297 51,738,359

Total governmental activities 80,611,670 77,438,263

Business-type activities

Compensated absences 490,965 438,250

Capital lease payable 2,206,909 2,549,111

Revenue bonds payable 21,443,255 23,407,697

Postemployment benefit obligation 1,781,318 - Net pension liability 8,289,436 6,987,193

Total business-type activities 34,211,883 33,382,251

Total outstanding debt 114,823,553$ 110,820,514$

Outstanding Debt(net of unamortized charges)

2020 2019Governmental activitiesLand $10,887,853 $10,902,638Buildings and structures 26,918,363 17,869,644 Improvements other than buildings 5,338,546 5,704,293 Public domain infrastructure 36,403,407 30,562,347 Sanitary sewer infrastructure 1,842,291 1,907,028 Machinery and equipment 3,277,073 3,699,641

Construction in progress 1,787,705 14,056,485

Total governmental activities 86,455,238 84,702,076

Business-type activitiesLand 377,408 377,408 Buildings and structures 9,005,735 9,188,109 Improvements other than buildings 536,742 192,831 Water system infrastructure 36,647,618 24,235,175 Machinery and equipment 1,288,804 1,126,355

Construction in progress 87,058 1,759,313

Total business-type activities 47,943,365 36,879,191

Total capital assets 134,398,603$ 121,581,267$

Capital Assets (net of depreciation)

Page 38 of 200


16

The increase in long-term debt from 2019 to 2020 in governmental activities was $3.2 million which reflects an increase in the net pension liability offset by a decrease in OPEB costs which were allocated to business-type activities in 2020. Business-type activities liabilities increased by $830,000 primarily due to the increased net pension liabilities and the allocation of OPEB costs. These cost increases were offset by decreases in capital leases payable and revenue bonds payable.

The Covina Public Financing Authority maintains an “AA” rating from Standard and Poor’s for the water and an “AA-” rating for the wastewater revenue bonds.

Additional information on the City’s long-term debt and other long-term liabilities can be found in Note 13 of the Notes to the Financial Statements.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

The City applied sound budgeting practices and considered new residential and retail development in formulating a balanced budget for Fiscal Year 2020-21. Prudent, cost-saving budget practices will continue into future years.

The conservative budget policies put in place by Council direction, emphasized by the City Manager and supported by staff, as well as the voter approved transaction and use tax measure have enabled the City of Covina to remain fiscally solvent. As reflected on Note 14 of Notes to the Financial Statements, the City’s emergency contingency reserve is $8 million, or 20% of General Fund expenditures, which meets the Council’s goal as set forth in the City’s budget policy.

The City continues to be cautiously conservative in revenue and expenditure projections. With that in mind, the Fiscal Year 2020-21 budget projects an overall increase in revenues in comparison to Fiscal Year 2019-20. The bulk of the increase is in the Other Revenues category and is mainly attributed to the final payment of the loan between the City and the Former Redevelopment Agency in the amount of $1.6 Million, as well as a couple of other one time funding sources projected to generate approximately $650,000 in one time general fund revenues. This increase is partially offset by projected decreases in tax revenues of approximately $1.4 million. Additional decreases are projected in the Intergovernmental, Charges for Services, and Fines and Forfeitures revenue categories.

Due to the Economic impacts of the COVID-19 Pandemic, the General Fund Expenditure budget figures represent an austerity budget, only including the funding necessary to maintain essential City services in the upcoming Fiscal Year. Department budgets reflect slight increases attributed to increases in PERS unfunded liability costs, and negotiated MOU adjustments, as well as the increase in the City's Fire Contract with Los Angeles County. To arrive at the recommended budget figures, each department has made reductions to supplies, contracted services and travel and training budgets. Additionally, a hiring freeze is recommended, requiring City Manager approval prior to filling any currently vacant positions.

The use of general fund reserves in the amount of $579,262 is recommended to balance the Fiscal Year 2020-21 budget. Staff recommends continued monitoring of the economic impacts of COVID-19, and Quarterly budget updates to the City Council, including any recommended amendments to both revenue and expenditure projections. Additionally, staff is pursuing several strategies to address the use of General Fund reserves, including a retirement incentive program, the issuance of pension obligation bonds to normalize retirement cost increases, potential MOU adjustments, and potential modifications to the Fire Contract with Los Angeles County. It is hoped that these alternatives could help to reduce the use of General Fund reserves and will be discussed with the City Council in the coming months.

REQUESTS FOR INFORMATION

This financial report is intended to provide a general overview of the City’s finances. A copy of the financial report is available for review at the Covina Public Library, 234 North Second Avenue, Covina, California, 91723. You may also find a copy of the report online at www.covinaca.gov. Questions concerning any of the information provided in this report should be addressed to City of Covina Finance Division, 125 East College Street, Covina, California, 91723.

Page 39 of 200

Governmental Business-Type

Activities Activities Total

ASSETS:Cash and investments 31,833,147$ 15,208,204$ 47,041,351$ Cash and investments - restricted - 4,594,016 4,594,016 Cash with fiscal agent 2,789,287 1,018,747 3,808,034 Receivables:

Interest 85,659 - 85,659 Accounts 526,471 3,644,936 4,171,407 Due from other governments 4,047,105 36,270 4,083,375 Other 488,625 - 488,625 Loans and notes 280,955 - 280,955

Internal balances 1,564,413 (1,564,413) - Inventories 41,987 52,491 94,478 Prepaids and deposits 934,007 3,961 937,968 Due from successor agency 2,107,307 2,107,307 Investment in Covina Irrigating Company: - 8,218,411 8,218,411 Capital assets:

Not being depreciated 12,675,558 464,466 13,140,024 Being depreciated, net 73,779,680 47,478,899 121,258,579

TOTAL ASSETS 131,154,201 79,155,988 210,310,189

DEFERRED OUTFLOWS OF RESOURCES:Deferred amount on refunding - 110,625 110,625 OPEB related 1,252,089 446,562 1,698,651 Pension related 10,969,193 1,078,757 12,047,950

TOTAL DEFERRED OUTFLOWS OF RESOURCES 12,221,282 1,635,944 13,857,226

LIABILITIES:Accounts payable 2,223,009 1,045,432 3,268,441 Deposits payable 675,278 754,724 1,430,002 Accrued liabilities 751,426 83,764 835,190 Interest payable 46,942 254,310 301,252 Due to other governments 280,468 - 280,468 Unearned revenue 262,688 15,302 277,990 Noncurrent liabilities

Due within one year 1,632,288 1,699,067 3,331,355 Due in more than one year: 17,150,687 22,442,062 39,592,749

Long-term liabilitiesNet pension liability 56,803,297 8,289,436 65,092,733 Net other post-employment benefit liability 5,025,398 1,781,318 6,806,716

TOTAL LIABILITIES 84,851,481 36,365,415 121,216,896

DEFERRED INFLOWS OF RESOURCES:Deferred amount on refunding - 42,475 42,475 OPEB related 497,206 178,985 676,191 Pension related 3,486,073 87,104 3,573,177

TOTAL DEFERRED INFLOWS OF RESOURCES 3,983,279 308,564 4,291,843

NET POSITION:Net investment in capital assets 84,273,491 26,398,843 110,672,334 Restricted for:

Public safety 399,619 - 399,619 Public works 4,276,386 - 4,276,386 Culture and recreation 431,782 - 431,782 Transit 5,086,668 - 5,086,668 Redevelopment and housing 4,275,173 - 4,275,173

Unrestricted (deficit) (44,202,396) 17,719,110 (26,483,286)

TOTAL NET POSITION 54,540,723$ 44,117,953$ 98,658,676$

CITY OF COVINA

STATEMENT OF NET POSITION

June 30, 2020

See accompanying notes to financial statements.17Page 40 of 200

Program RevenuesOperating Capital

Charges for Grants and Grants andExpenses Services Contributions Contributions

Governmental Activities:General government 3,356,218$ 2,162,262$ 387,687$ -$ Public safety 33,529,788 1,521,571 1,373,250 - Public works 8,539,877 684,035 2,092,436 189,840 Culture and recreation 4,630,583 507,771 179,881 - Community development 2,382,311 1,349,738 - 44,642 Transit 2,068,390 180,644 3,014,747 10,938 Redevelopment and housing 598,363 881,603 1,033,088 - Interest on long term debt 251,550 - - -

Total governmental activities 55,357,080 7,287,624 8,081,089 245,420

Business-type activities:Water utility 10,318,472 10,673,985 - - Environmental protection 1,176,992 1,003,527 - - Sewer utility 2,829,014 2,905,488 - -

Total business-type activities 14,324,478 14,583,000 - -

Total 69,681,558$ 21,870,624$ 8,081,089$ 245,420$

General revenues:Taxes:

Property taxes (net of pass-through payments)General sales taxTransaction and use taxTransient occupancy taxesProperty transfer taxesBusiness license taxesUtility users taxesFranchise taxes

Investment earningsMiscellaneousGain on sale of capital assets

Total general revenues

Change in net position

Net position - beginning of year, as restated

Net position - end of year

CITY OF COVINA

STATEMENT OF ACTIVITIES

For the year ended June 30, 2020

Functions/programs


Net (Expense) Revenue andChanges in Net Assets

Governmental Business-TypeActivities Activities Total

(806,269)$ -$ (806,269)$ (30,634,967) - (30,634,967)

(5,573,566) - (5,573,566) (3,942,931) - (3,942,931)

(987,931) - (987,931) 1,137,939 - 1,137,939 1,316,328 - 1,316,328 (251,550) - (251,550)

(39,742,947) - (39,742,947)

- 355,513 355,513 - (173,465) (173,465) - 76,474 76,474

- 258,522 258,522

(39,742,947) 258,522 (39,484,425)

13,812,070 - 13,812,070 9,296,400 - 9,296,400 6,579,486 - 6,579,486

130,831 - 130,831 212,485 - 212,485 347,110 - 347,110

4,523,187 - 4,523,187 1,910,641 - 1,910,641

620,835 524,565 1,145,400 49,645 - 49,645 54,268 - 54,268

37,536,958 524,565 38,061,523

(2,205,989) 783,087 (1,422,902)

56,746,712 43,334,866 100,081,578

54,540,723$ 44,117,953$ 98,658,676$

19Page 42 of 200

Other TotalGeneral Governmental Governmental

Fund Measure R Funds Funds

Cash and investments 6,458,972$ -$ 18,201,194$ 24,660,166$ Cash and investments with fiscal agent - 2,789,287 - 2,789,287 Receivables:

Interest 85,659 - - 85,659 Utility user tax 488,625 - - 488,625 Accounts 360,489 - 84,976 445,465 Loans - - 280,955 280,955

Due from other governments 3,574,003 - 473,102 4,047,105 Due from other funds 2,946,560 - - 2,946,560 Due from successor agency 1,692,088 - 415,219 2,107,307 Prepaid expenditures 929,466 - 1,159 930,625

TOTAL ASSETS 16,535,862$ 2,789,287$ 19,456,605$ 38,781,754$

LIABILITIES:Accounts payable 993,759$ 88,346$ 1,090,225$ 2,172,330$ Accrued liabilities 659,094 - 67,100 726,194 Deposits payable 231,044 - 443,739 674,783 Due to other funds - 2,660,138 286,422 2,946,560 Due to other governments - - 280,468 280,468 Advances from other funds 100,570 - - 100,570 Unearned revenue 262,086 - 602 262,688

TOTAL LIABILITIES 2,246,553 2,748,484 2,168,556 7,163,593

DEFERRED INFLOWS OF RESOURCES:Unavailable revenue 16,850 - 247,032 263,882

FUND BALANCES (Note 14):Nonspendable 2,621,554 - 1,159 2,622,713 Restricted 428,079 40,803 17,872,070 18,340,952 Committed 8,029,233 - - 8,029,233 Assigned 25,940 - - 25,940 Unassigned 3,167,653 - (832,212) 2,335,441

TOTAL FUND BALANCES 14,272,459 40,803 17,041,017 31,354,279

TOTAL LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES 16,535,862$ 2,789,287$ 19,456,605$ 38,781,754$

CITY OF COVINA

BALANCE SHEETGOVERNMENTAL FUNDS

June 30, 2020

RESOURCES AND FUND BALANCES

ASSETS

LIABILITIES, DEFERRED INFLOWS OF


Fund balances for governmental funds 31,354,279$

Amounts reported for governmental activities in the Statement of Net Position aredifferent because:

Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore are not reported in the fund financial statements. This amount does not include $1,261,255 of internal service funds net capital assets.

Capital assets not being depreciated 12,675,558$ Capital assets being depreciated 186,391,961 Accumulated depreciation (113,873,536) 85,193,983

Long-term liabilities applicable to the City’s governmental activities are not due andpayable in the current period and accordingly are not reported as fund liabilities.All liabilities, both current and long-term, are reported in the Statement of NetPosition. Balances at June 30, 2020 are:

Loan payable (2,250,000) Bonds payable (5,060,000) Bond premium (219,627) Compensated absences (3,522,464) Accrued interest (42,744) (11,094,835)

Pension and OPEB related debt applicable to the City’s governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities.Deferred outflows of resources and deferred inflows of resources related to pensionsand OPEB are only reported in the Statement of Net Position as the changes in these amounts affect only the government-wide statements for governmental activities.

Deferred outflows of resources - pension related 10,623,542 Deferred inflows of resources - pension related (3,458,163) Net pension liability (54,147,228) Deferred outflows of resources - OPEB related 1,109,777 Deferred inflows of resources - OPEB related (440,167) Net OPEB liability (4,457,718) (50,769,957)

Internal Service funds are used by management to charge the costs of certainactivities involved in rendering services to departments within the City. Theassets and liabilities of the internal service funds are included in governmentalin the Statement of Net Position. (406,629)

Receivables that are measurable but not available are recorded as deferred inflowsof resources under the modified accrual basis of accounting. 263,882

Net position of governmental activities 54,540,723$

CITY OF COVINA

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEETTO THE STATEMENT OF NET POSITION

June 30, 2020


Other TotalGeneral Governmental Governmental

Fund Measure R Funds FundsREVENUES:

Property taxes 13,652,273$ -$ 160,547$ 13,812,820$ Sales tax, intergovernmental 15,875,886 - - 15,875,886 Transient occupancy taxes 130,831 - - 130,831 Property transfer taxes 212,485 - - 212,485 Business license taxes 345,952 - 1,168 347,120 Utility user taxes 4,523,187 - - 4,523,187 Franchise taxes 1,910,641 - - 1,910,641 Licenses and permits 999,449 - - 999,449 Intergovernmental 782,968 589,962 7,114,252 8,487,182 Charges for services 3,659,558 - 352,130 4,011,688 Fines and forfeits 907,080 - - 907,080 Special assessments - - 1,414,617 1,414,617 Investment earnings 639,433 47,737 743,328 1,430,498 Other 710,713 - 27,975 738,688

TOTAL REVENUES 44,350,456 637,699 9,814,017 54,802,172

EXPENDITURES:Current:

General government 2,593,801 - - 2,593,801 Public safety 29,184,458 - 188,455 29,372,913 Public works 2,292,017 - 2,182,227 4,474,244 Culture and recreation 3,834,866 - 91,399 3,926,265 Community development 2,238,650 - 9,125 2,247,775 Transit - - 1,734,472 1,734,472 Redevelopment and housing - - 567,340 567,340

Capital outlay - 3,656,792 3,328,661 6,985,453 Debt service:

Principal retirement - 180,000 125,000 305,000 Interest and fiscal charges 2,375 190,947 58,814 252,136

TOTAL EXPENDITURES 40,146,167 4,027,739 8,285,493 52,459,399

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 4,204,289 (3,390,040) 1,528,524 2,342,773

OTHER FINANCING SOURCES (USES):Transfers in 101,000 - 1,094,374 1,195,374 Transfers out (106,606) - (1,088,768) (1,195,374) Sale of Property 42,837 - - 42,837

TOTAL OTHER FINANCING SOURCES (USES) 37,231 - 5,606 42,837

NET CHANGE IN FUND BALANCE 4,241,520 (3,390,040) 1,534,130 2,385,610

FUND BALANCES - BEGINNING OF YEAR 10,030,939 3,430,843 15,506,887 28,968,669

FUND BALANCES - END OF YEAR 14,272,459$ 40,803$ 17,041,017$ 31,354,279$

CITY OF COVINA

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCESGOVERNMENTAL FUNDS



Net change in fund balances - total governmental funds 2,385,610$

Amounts reported for governmental activities in the Statement of Activities aredifferent because:

Governmental funds report capital outlays as expenditures and do not include capital contributions. However, in the Statement of Activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense and capital contributions are recognized as revenue. This is the amount by which capital outlay exceeded depreciation expense in the current period and the amount of capital contributions received. This does not include internal service funds activity of $118,872 in additions and $316,564 in depreciation expense.

Capital outlay 6,958,351$ Deletions (35,987) Depreciation expense (4,970,910) 1,951,454

The issuance of long-term debt provides current financial resources to governmental funds,while the repayment of the principal of long-term debt consumes the current financialresources of governmental funds. Neither transaction, however, has any effect on netposition. Also, governmental funds report the effect of premiums, discounts andsimilar items when the debt is first issued, whereas these amounts are deferred andamortized in the Statement of Activities. These amounts are the net effect of thesedifferences in the treatment of long-term debt and related items.

Principal payments 305,000 Amortization premium on bonds 11,560 316,560

Pension expense reported in the governmental funds includes the annual requiredcontributions. In the Statement of Activities, pension expense includes the changein the net pension liability, and related changes in pension amounts for deferredoutflows of resources and deferred inflows of resources. (4,076,286)

Other postemployment benefit expense reported in the governmental funds includes payment of premiums for the current year. In the Statement of Activities, OPEBexpense includes the change in the net other postemployment benefit liability and OPEB related deferred inflows of resources. (491,334)

Accrued interest is interest due on long-term debt payable. This is the net change inaccrued interest for the current period.

Changes in interest payable for the current year (6,776)

Internal service funds are used by management to charge costs of activities involved inrendering services to departments within the City. The changes in net position of theinternal service funds are included in the Statement of Activities. (621,248)

Compensated absences are not reported in the governmental funds until such amountsbecome due and payable. 29,950

Certain revenues in the governmental funds are deferred because they are not collectedwithin the prescribed time period after year-end. However, the revenues are included onthe accrual basis used in the government-wide statements. This amount represents thechange during the fiscal year. (1,693,919)

Change in net position of governmental activities (2,205,989)$

TO THE STATEMENT OF ACTIVITIES


CITY OF COVINA

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OFREVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES


Governmental

Activities

Total Internal

Nonmajor Enterprise Service

ASSETS: Water Utility Sewer Funds Funds FundsCURRENT ASSETS:

Cash and investments 6,363,956$ 6,619,812$ 2,224,436$ 15,208,204$ 7,172,981$ Cash and investments restricted - 4,594,016 - 4,594,016 - Cash and investments with fiscal agent 996,932 21,815 - 1,018,747 - Accounts receivable, net 3,426,510 - 218,426 3,644,936 81,006 Due from other governments - 33,009 3,261 36,270 - Prepaid expenses 59 59 3,843 3,961 3,382 Inventories 52,491 - - 52,491 41,987

TOTAL CURRENT ASSETS 10,839,948 11,268,711 2,449,966 24,558,625 7,299,356

NONCURRENT ASSETS:Investment in Covina Irrigating Company 8,218,411 - - 8,218,411 - Advance to General Fund 100,570 - - 100,570 - Capital assets:

Capital assets, not depreciated 401,525 24,117 38,824 464,466 - Capital assets, depreciated, net 39,334,289 7,249,449 895,161 47,478,899 1,261,255

TOTAL NONCURRENT ASSETS 48,054,795 7,273,566 933,985 56,262,346 1,261,255

TOTAL ASSETS 58,894,743 18,542,277 3,383,951 80,820,971 8,560,611

DEFERRED OUTFLOWS OF RESOURCES:Deferred amount on refunding - 110,625 - 110,625 - Deferred amount on OPEB plans 323,020 69,791 53,751 446,562 142,313 Deferred amount on pension plans 714,139 229,144 135,474 1,078,757 345,651

TOTAL DEFERRED OUTFLOWS OF RESOURCES 1,037,159 409,560 189,225 1,635,944 487,964

LIABILITIES:CURRENT LIABILITIES:

Accounts payable 782,081 216,263 47,088 1,045,432 50,679 Accrued liabilities 63,235 11,758 8,771 83,764 25,232 Deposits payable 498,019 - 256,705 754,724 495 Interest payable 201,625 52,685 - 254,310 4,198 Unearned revenue 15,302 - - 15,302 - Compensated absences 119,989 22,443 26,934 169,366 58,685 Capital lease payable 359,070 - - 359,070 244,087 Revenue bonds payable 345,631 825,000 - 1,170,631 -

TOTAL CURRENT LIABILITIES 2,384,952 1,128,149 339,498 3,852,599 383,376

NONCURRENT LIABILITIES:Compensated absences 228,299 65,545 27,755 321,599 181,112 Capital lease payable 1,847,839 - - 1,847,839 - Revenue bonds payable 12,062,624 8,210,000 - 20,272,624 - Claims payable - - - - 7,247,000 Net OPEB liability 1,288,511 278,395 214,412 1,781,318 567,680 Net pension liability 5,487,624 1,760,799 1,041,013 8,289,436 2,656,069

TOTAL NONCURRENT LIABILITIES 20,914,897 10,314,739 1,283,180 32,512,816 10,651,861

TOTAL LIABILITIES 23,299,849 11,442,888 1,622,678 36,365,415 11,035,237

DEFERRED INFLOWS OF RESOURCES:Deferred amounts on OPEB plans 129,468 27,973 21,544 178,985 57,040 Deferred amounts on pension plans 57,663 18,502 10,939 87,104 27,910 Deferred amount on refunding 42,475 - - 42,475 -

TOTAL DEFERRED INFLOWS OF RESOURCES 229,606 46,475 32,483 308,564 84,950

NET POSITION:Net investment in capital assets 26,075,107 2,965,022 933,985 29,974,114 1,261,255 Unrestricted 10,327,340 4,497,452 984,030 15,808,822 (3,332,867)

TOTAL NET POSITION 36,402,447$ 7,462,474$ 1,918,015$ 45,782,936 (2,071,612)$

Some amounts reported for business-type activities in the statement of activities are differentto reflect the consolidation of internal service fund activities related to enterprise funds (1,664,983)

NET POSITION OF BUSINESS-TYPE ACTIVITIES 44,117,953$

CITY OF COVINA

STATEMENT OF NET POSITIONPROPRIETARY FUNDS

June 30, 2020

Business-Type Activities


GovernmentalActivities

Total InternalNonmajor Enterprise Service

Water Utility Sewer Funds Funds FundsOPERATING REVENUES:

Water sales 10,337,630$ -$ -$ 10,337,630$ -$ Charges for services and motor pool charges - - - - 3,619,663 Environmental fees - - 1,003,527 1,003,527 402,564 Sewer fees - 2,905,488 - 2,905,488 - Fire line fees 336,355 - - 336,355 -

TOTAL OPERATING REVENUES 10,673,985 2,905,488 1,003,527 14,583,000 4,022,227

OPERATING EXPENSES:General and administrative 1,539,142 2,367,418 532,627 4,439,187 3,315,793 Vehicle and equipment operation - - - - 1,006,920 Utility billing 368,364 - - 368,364 - Customer service 537,518 - - 537,518 - Sales promotion 414 - - 414 - Source and supply 3,067,435 - - 3,067,435 - Production and storage 1,093,228 - - 1,093,228 - Transmission and distribution 1,535,521 - - 1,535,521 - Street sweeping - - 5,964 5,964 - Environmental services - - 217,490 217,490 - Industrial waste - - 27,625 27,625 - Waste management - - 371,081 371,081 - Depreciation 1,276,414 179,627 22,205 1,478,246 316,564

TOTAL OPERATING EXPENSES 9,418,036 2,547,045 1,176,992 13,142,073 4,639,277

OPERATING INCOME (LOSS) 1,255,949 358,443 (173,465) 1,440,927 (617,050)

NONOPERATING REVENUES (EXPENSES):Investment income 215,158 261,476 47,931 524,565 - Interest expense (785,340) (281,969) - (1,067,309) (4,198) Investment loss - CIC (115,096) - - (115,096) -

TOTAL NONOPERATING REVENUES(EXPENSES) (685,278) (20,493) 47,931 (657,840) (4,198)

CHANGE IN NET POSITION 570,671 337,950 (125,534) 783,087 (621,248)

NET POSITION AT BEGINNING OF YEAR, AS RESTATED 35,831,776 7,124,524 2,043,549 (1,450,364)

NET POSITION AT END OF YEAR 36,402,447$ 7,462,474 1,918,015$ (2,071,612)$

Some amounts reported for business-type activities in the statements of activities are differentto reflect the consolidation of internal service fund activities related to enterprise funds -

783,087$



CITY OF COVINA

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITIONPROPRIETARY FUNDS




Water Utility Sewer Funds Funds FundsCASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from user departments 8,514,598$ 2,914,433$ 1,018,529$ 12,447,560$ 4,044,035$ Cash payments to suppliers of goods and services (4,688,374) (354,055) (376,388) (5,418,817) (2,449,429) Cash payments to employees for services (2,724,111) (1,245,255) (527,546) (4,496,912) (1,379,507)

NET CASH PROVIDED BYOPERATING ACTIVITIES 1,102,113 1,315,123 114,595 2,531,831 215,099

CASH FLOWS FROM NONCAPITALFINANCING ACTIVITIES:

Cash received from other funds 319,856 - - 319,856 -

NET CASH PROVIDED BY NONCAPITALFINANCING ACTIVITIES 319,856 - - 319,856 -

CASH FLOWS FROM CAPITAL ANDRELATED FINANCING ACTIVITIES:

Acquisition of capital assets (11,432,134) (1,006,465) (103,821) (12,542,420) (118,272) Debt issued - 9,930,000 9,930,000 - Debt refunded (10,740,000) (10,740,000) - Principal paid (672,202) (895,000) - (1,567,202) (252,484) Interest and debt issuance costs (802,282) (397,203) - (1,199,485) -

NET CASH USED BY CAPITAL ANDRELATED FINANCING ACTIVITIES (12,906,618) (3,108,668) (103,821) (16,119,107) (370,756)

CASH FLOWS FROM INVESTING ACTIVITIES:Investment income 215,158 297,535 47,931 560,624 -

NET INCREASE (DECREASE) INCASH AND CASH EQUIVALENTS (11,269,491) (1,496,010) 58,705 (12,706,796) (155,657)

CASH AND CASH EQUIVALENTS ATBEGINNING OF YEAR 18,630,379 12,731,653 2,165,731 33,527,763 7,328,638

CASH AND CASH EQUIVALENTS ATEND OF YEAR 7,360,888$ 11,235,643$ 2,224,436$ 20,820,967$ 7,172,981$

CASH AND CASH EQUIVALENTS:Current Assets:

Cash and investments 6,363,956$ 6,619,812$ 2,224,436$ 15,208,204$ 7,172,981$ Cash and investments restricted - 4,594,016 - 4,594,016 - Cash and investments with fiscal agent 996,932 21,815 - 1,018,747 -

TOTAL CASH AND CASH EQUIVALENTS 7,360,888$ 11,235,643$ 2,224,436$ 20,820,967$ 7,172,981$

(Continued)


CITY OF COVINA

STATEMENT OF CASH FLOWSPROPRIETARY FUNDS





Water Utility Sewer Funds Funds FundsRECONCILIATION OF OPERATING INCOME

TO NET CASH PROVIDED BYOPERATING ACTIVITIES:

Operating income (loss) 1,255,949$ 358,443$ (173,465)$ 1,440,927$ (617,050)$ Adjustments to reconcile operating income (loss)

to net cash provided by operating activities:Depreciation 1,276,414 179,627 22,205 1,478,246 316,564

Changes in operating assets, deferred outflows ofresources, liabilities and deferred inflows of resources:

(Increase) decrease in accounts receivable (2,159,387) 1,070 15,002 (2,143,315) 21,808 (Increase) decrease in due from other governments - 7,875 (3,261) 4,614 - (Increase) decrease in inventory of materials 22,088 - - 22,088 - (Increase) decrease in prepaid items (59) (59) (3,843) (3,961) 20,780 (Increase) decrease in deferred outflows

of resources on OPEB plan 93,753 20,257 15,601 129,611 41,305 (Increase) decrease in deferred outflows

of resources on pension plans (212,140) (120,682) (51,940) (384,762) (124,485) Increase (decrease) in accounts payable 238,580 140,793 8,778 388,151 (1,587) Increase (decrease) in accrued liabilities 14,974 4,384 2,291 21,649 - Increase (decrease) in deposits payable 32,119 - 81,754 113,873 495 Increase (decrease) in unearned revenue 15,303 - - 15,303 - (Increase) decrease in deferred inflows

of resources of OPEB plan (25,770) (5,568) (4,288) (35,626) (11,353) (Increase) decrease in deferred inflows

of resources pension plans 14,707 9,221 3,791 27,719 8,985 Increase (decrease) in compensated absences 28,088 34,965 (10,338) 52,715 (11,333) Increase (decrease) in net OPEB liability 74,038 15,997 12,321 102,356 32,619 Increase (decrease) in net pension liability 433,456 668,800 199,987 1,302,243 429,351 Increase (decrease) in claims payable - - - - 109,000

NET CASH PROVIDED BY OPERATING ACTIVITIES 1,102,113$ 1,315,123$ 114,595$ 2,531,831$ 215,099$

CITY OF COVINA

STATEMENT OF CASH FLOWSPROPRIETARY FUNDS



(CONTINUED)


Private- AgencyPurpose Trust Funds

ASSETS:Cash and investments 3,594,507$ 625$ Cash and investments - fiscal agent 2,919,253 - Accounts receivable 29,457 1,090 Interest receivable 5,518 - Prepaid expenses 19,068 - Land held for resale 2,691,502 - Capital assets, not being depreciated 148,881 -

TOTAL ASSETS 9,408,186 1,715$

DEFERRED OUTFLOWS OF RESOURCES:Deferred amount on refunding 74,212 -$

TOTAL DEFERRED OUTFLOWS 74,212 -

LIABILITIESAccounts payable and accrued liabilities 285,717 - Accrued liabilities 4,460 - Due to association - 1,715 Interest payable 44,659 - Noncurrent liabilities (Note 21):

Due within one year 2,615,870 - Due in more than one year 11,121,454 -

TOTAL LIABILITIES 14,072,160 1,715$

DEFERRED INFLOWS OF RESOURCES:Deferred amount on refunding 168,888

TOTAL DEFERRED INFLOWS OF RESOURCES 168,888

NET POSITION:Held for dissolution of community redevelopment agency (4,758,650)$

CITY OF COVINA

FIDUCIARY FUNDS

June 30, 2020

STATEMENT OF FIDUCIARY NET POSITION


Private-Purpose Trust

ADDITIONS:Property tax revenue 4,766,653$ Charges for services 164,375 Investment earnings 214,185 Sale of property 171,105

TOTAL ADDITIONS 5,316,318

DEDUCTIONS:General and administrative 306,932 Interest and fiscal charges 593,914 Program expenses 287,315

TOTAL DEDUCTIONS 1,188,161

CHANGE IN NET POSITION 4,128,157

NET POSITION - BEGINNING OF YEAR (8,886,807)

NET POSITION - END OF YEAR (4,758,650)$

CITY OF COVINA

STATEMENT OF CHANGES IN FIDUCIARY NET POSITIONFIDUCIARY FUNDS



30


Page 53 of 200

CITY OF COVINA Notes to Financial Statements June 30, 2020

31

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Financial Reporting Entity The financial statements of the City of Covina (City) include the financial activities of the City, the Covina Public Financing Authority and the Covina Housing Authority. Their financial operations are closely related, and the City Council has a continuing responsibility over the entities. The responsibility is determined based on budget adoption, taxing authority, funding and appointments of the governing board. Blended component units, although legally separate entities, are part of the City’s operations and therefore data from these units are combined with data of the City. Since the City Council acts as the Board of Directors and can impose its will on the Covina Public Financing Authority and the Covina Housing Authority, the City is the primary government and the other two entities are component units. Additionally, since the governing boards of the City and the two other component units are the same, there is a potential for the component units to provide specific financial benefits to or impose specific financial burdens on the City. Therefore, the financial statements of the City and the two component units are blended. The City of Covina was incorporated in 1901 as a General Law City. The City provides a broad range of services to its citizens, including general government, public safety, streets, sanitation and health, culture and park facilities and social services. The Covina Redevelopment Agency (Agency) was established in 1969, pursuant to the State of California, Health and Safety Code, Section 33000. Its purpose is to prepare and carry out plans for the improvement, rehabilitation and development of blighted areas within the territorial limits of the City of Covina. On June 28, 2011, Assembly Bill X1 26 (AB X1 26), the Dissolution bill was enacted. On December 29, 2011, the California Supreme Court upheld the constitutionality of AB X1 26, and all redevelopment agencies in California were dissolved by operation of law effective February 1, 2012. The legislation provides for successor agencies and oversight boards that are responsible for overseeing the dissolution process and wind down of redevelopment activity. On January 11, 2012, the City adopted a resolution declaring its intent to serve as the Successor Agency and on January 30, 2012, the City Council adopted a resolution to retain the Housing assets and functions of the former redevelopment agency and the Housing Authority of the City will serve as the Housing Successor Agency. The Successor Agency to the Covina Redevelopment Agency (SACRA) was created to serve as a custodian for the assets and to wind down the affairs of the former Agency. The SACRA is a separate public entity from the City, subject to the direction of an Oversight Board. In general, the SACRA’s assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, the SACRA will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former Agency until all enforceable obligations of the former Agency have been paid in full and all assets have been liquidated. Based upon the nature of the SACRA’s custodial role, the SACRA is reported in a fiduciary fund (private-purpose trust fund). The Covina Public Financing Authority (Authority) is a joint powers authority organized pursuant to the State of California Government Code, Section 6500. The Authority exists under a Joint Exercise of Power Agreement between the City of Covina and the Covina Redevelopment Agency. Its purpose is to facilitate financing for public capital improvements of the City and the Agency.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) A. Financial Reporting Entity (Continued)

The Covina Housing Authority (Housing Authority) was formed January 25, 2011, in order to continue to achieve the goals established by the Housing Element of the general plan. A housing authority collaborates with public, private and nonprofit entities agencies for the purpose of providing sanitary and safe housing for people of very low, low or moderate income within a city or county’s territorial jurisdiction. The core activities of many housing authorities are primarily to build, acquire, own, manage and maintain residential rental units and to provide financial assistance for rentals or ownership in the private real estate market. A housing authority is governed by the state Housing Authority Law, and for purposes of major federal funding, if any is received, regulations of the U.S. Department of Housing and Urban Development (HUD). Further, a housing authority is not required under the Housing Authority Law to seek HUD or any other type of outside funding. On January 30, 2012, the City Council adopted a resolution to retain the Housing assets and functions of the dissolved Agency and the Housing Authority of the City will serve as the Housing Successor Agency. The activity is reflected in the Housing Authority Special Revenue Fund. The accounting policies of the City, the Authority and the Housing Authority conform to accounting principles generally accepted in the United States of America as applicable to governments. The following is a summary of the more significant policies.

B. Government-Wide and Fund Financial Statements

The accompanying financial statements are presented on the basis prescribed in Governmental Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. The financial statements of the City are as follows: Government-Wide Financial Statements The Statement of Net Position and Statement of Activities report information on all the activities of the primary government (including its blended component units). The City of Covina has no discretely presented component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a function or segment. Taxes and other items not properly included among program revenues are reported as general revenues. Fund Financial Statements Separate financial statements of the City, including blended component units, are provided for major individual governmental, proprietary and fiduciary funds, which include the private-purpose trust fund and agency fund. The fiduciary funds are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary funds statements. With this measurement focus, all assets, deferred outflows of resources, liabilities and deferred inflows of resources associated with the operation of the City are included on the statement of net position. Net position (assets plus deferred outflows of resources less liabilities less deferred inflows of resources) are segregated into net investment in capital assets (net of related debt), restricted and unrestricted components. The Statement of Activities and Statement of Revenues, Expenses and Changes in Fund Net Position of Proprietary Funds present increases (revenues) and decreases (expenses) in net total position. Revenues are recorded when earned and expenses are recorded when a liability is incurred regardless of the timing of the related cash flows. Under this determination, unbilled service receivables are recorded at fiscal year end. Nonexchange transactions are typically described as taxes, fines and certain grants and donations. In a nonexchange transaction, a government gives (or receives) value without directly receiving (or giving) equal value in return. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Government fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets, current liabilities and current deferred inflows of resources generally are included on the balance sheet. Operating statements of these funds’ present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in fund balance. Under the modified accrual basis of accounting, revenues are recognized when they become susceptible to accrual (i.e., when they become measurable and available to finance expenditures of the current period or soon enough thereafter to be used to pay liabilities of the current period). For this purpose, the City considers revenues including property taxes to be available if they are collected within 60 days of the end of the current fiscal period. Certain grant revenues are available if they are collected within months of the end of the current fiscal period. Expenditures are recorded when the related fund liability is incurred, except for unmatured principal and interest on long-term debt, claims and judgments and compensated absences, which are recognized only when due and payable at fiscal year end. General capital asset acquisitions and debt service principal payments are reported as expenditures in governmental funds. Proceeds from long-term debt and acquisitions under capital leases are reported as other financing sources. Property taxes, charges for services, grant revenues and investment earnings are susceptible to accrual and have been recognized as revenues of the current fiscal period. Licenses and permits and fines and forfeitures are not susceptible to accrual because they are not measurable until received in cash. Grant revenues earned but not received are recorded as a receivable, and grants received before the related revenue recognition criteria have been met are reported as unearned revenues.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued) The City reports the following major governmental funds: General Fund - This fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. Measure R Fund – This special revenue fund is established to account for monies received from Measure R allocation, which can be used for major street resurfacing, rehabilitation and reconstruction; pothole repair; left turn signals; bikeway; pedestrian improvements; streetscapes; signal synchronizations; and transit operations. The City reports the following major proprietary funds: Water Utility Fund - This enterprise fund is used to account for general and administrative, utility billing, customer service, sales promotion, source and supply, production and storage and transmission and distribution operations. Sewer Fund - This enterprise fund accounts for the operation and maintenance of the wastewater system within the City’s boundaries. Nonmajor Funds - This enterprise fund accounts for the general and administrative, environmental services, industrial waste and waste management operations. Additionally, the City reports the following fund types: Special Revenue Funds - These funds are used to account for specific revenue sources that are legally restricted or otherwise assigned for specific purposes. Capital Projects Funds - These funds are used to account for capital expenditures funded by various sources Internal Service Funds - These funds account for the central equipment, management information systems, workers’ compensation and general liability services provided to other departments of the City. Agency Funds - These funds are used to account for funds in which the City is acting as an agent for another agency. The agency funds are reported using the accrual basis of accounting. Private-Purpose Trust Fund - This fund is to account for custodial responsibilities that are assigned to SACRA with the passage of AB X1 26 and was established on February 1, 2012. The fund accounts for the receipt of property tax revenues pursuant to the dissolution of the Agency and expenses incurred pursuant to the recognized obligation payment schedule (ROPS) approved by the State Department of Finance. This fund follows the accrual basis of accounting.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Measurement Focus, Basis of Accounting and Financial Statement Presentation (Continued)

As a rule, the effect of interfund activity has been eliminated from the government-wide statements. Exceptions to this general rule are charges for the City water utility, sewer services and environmental services and indirect general government expenses to other functions and funds of the City. Elimination of the water utility, sewer service charges and environmental service charges would distort the direct costs and program revenues reported for the various functions concerned. Expenses reported in various funds include allocated indirect general government expenses.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses from operations generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Water Utility, Sewer and nonmajor (Environmental) enterprise funds and the City’s internal service funds are charges to customers for sales and services. The Water Utility recognizes as operating revenue capital improvement fees intended for construction and rehabilitation of the water system. Operating expenses for enterprise and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as needed.

D. New Accounting Pronouncements

Current Year Standards In May 2020, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authority Guidance, which was effective immediately. This statement provided temporary relief to governments and other stakeholders in light of the COVID-19 pandemic and postponed the effective dates of certain provisions in Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later. In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. Paragraph 4 of this statement requires that for purposes of determining whether a primary government is financially accountable for a potential component unit, except for a potential component unit that is a defined contribution pension plan, a defined contribution OPEB plan, or an other employee benefit plan (for example, certain Section 457 plans), the absence of a governing board should be treated the same as the appointment of a voting majority of a governing board if the primary government performs the duties that a governing board typically would perform.

Paragraph 5 of this statement also requires that the financial burden criterion in paragraph 7 of Statement No. 84, Fiduciary Activities, be applicable to only defined benefit pension plans and defined benefit OPEB plans that are administered through trusts that meet the criteria in paragraph 3 of Statement No. 67, Financial Reporting for Pension Plans, or paragraph 3 of Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, respectively.

The requirements of these paragraphs did not impact the City.

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D. New Accounting Pronouncements (Continued) Pending Accounting Standards GASB has issued the following statements, which may impact the City’s financial reporting requirements in the future: In January 2017, GASB issued Statement No. 84, Fiduciary Activities. This statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria generally is on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. An activity meeting the criteria should be reported in a fiduciary fund in the financial statements. This statement also provides for recognition of a liability to the beneficiaries in a fiduciary fund when an event has occurred that compels the government to disburse fiduciary resources. Events that compel a government to disburse fiduciary resources occur when a demand for the resources has been made or when no further action, approval, or condition is required to be taken or met by the beneficiary to release the assets. The requirements of this statement are effective for reporting periods beginning after December 15, 2019, and early application is encouraged.

In June 2017, GASB issued Statement No. 87, Leases. This statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset for leases with a term of more than 12 months. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities. For leases with a term of 12 months or less, lessees and lessors should recognize short-term lease payments as outflows of resources or inflows of resources, respectively, based on the payment provisions of the lease contract. The requirements of this statement are effective for reporting periods beginning after June 15, 2021, and early application is encouraged. In August 2018, GASB issued Statement No. 90, Majority Equity Interests – an amendment of GASB Statements No. 14 and No. 61. This statement defines a majority equity interest and specifies that a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term endowments) or permanent fund. Those governments and funds should measure the majority equity interest at fair value. For all other holdings of a majority equity interest in a legally separate organization, a government should report the legally separate organization as a component unit, and the government or fund that holds the equity interest should report an asset related to the majority equity interest using the equity method. This statement also requires that a component unit in which a government has a 100% equity interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the government acquired a 100% equity interest in the component unit.

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D. New Accounting Pronouncements (Continued) Pending Accounting Standards (Continued) The requirements of this statement are effective for reporting periods beginning after December 15, 2019, early application is encouraged. The requirements should be applied retroactively, except for the provisions related to (1) reporting a majority equity interest in a component unit and (2) reporting a component unit if the government acquires a 100% equity interest. Those provisions should be applied on a prospective basis. In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The requirements of this statement are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. Early application is encouraged. Assets and liabilities resulting from SBITAs should be recognized and measured using the facts and circumstances that existed at the beginning of the fiscal year in which this statement is implemented. In June 2020, GASB issued Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—an amendment of GASB Statements No. 14 and No. 84, and a supersession of GASB Statement No. 32. Paragraph 6 through 9 of this statement requires that a Section 457 plan be classified as either a pension plan or an other employee benefit plan depending on whether the plan meets the definition of a pension plan and clarifies that Statement 84, as amended, should be applied to all arrangements organized under IRC Section 457 to determine whether those arrangements should be reported as fiduciary activities. The requirements of paragraph 6 through 9 of this statement are effective for fiscal years beginning after June 15, 2021. Earlier application of these requirements is encouraged and permitted.

This statement supersedes the remaining provisions of Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, as amended, regarding investment valuation requirements for Section 457 plans. As a result, investments of all Section 457 plans should be measured as of the end of the plan’s reporting period in all circumstances. The requirements of paragraph 3 of this statement are effective for reporting periods beginning after June 15, 2021. Earlier application of those requirements is encouraged and permitted.

E. Encumbrances

Encumbrance accounting, under which purchase orders, contracts and other commitments for the expenditures of funds are recorded, is employed in governmental funds. Amounts encumbered in the current year are treated as restricted, committed or assigned fund equity since they do not constitute expenditures or liabilities. At fiscal year end, encumbrances outstanding are shown as restricted or assigned fund balance.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

G. Cash and Cash Equivalents

The City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. All cash and investments, except for cash and investments with fiscal agents, are pooled with the City’s pooled cash and investments and are therefore considered cash equivalents.

H. Investments

Investments are stated at fair value using quoted market prices. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Investment elements, including interest and changes in fair value, are aggregated and reported as investment earnings in the financial statements.

I. Inventories and Prepaid Items

Inventories are priced at the lower of cost or market on a first-in, first-out basis. The inventories consist primarily of water parts, vehicle and equipment parts and gasoline. Inventories of governmental funds are considered immaterial and are recorded as expenditures when purchased under the purchases method. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements utilizing the consumption method.

J. Compensated Absences

The City permits employees to accumulate earned but unused vacation and sick pay benefits. All vacation pay and a portion of the sick pay are accrued when incurred in the government-wide and proprietary fund financial statements.

K. Capital Assets

Capital assets, which include property, plant, equipment and infrastructure assets (roads, bridges, sidewalks, water, sewer and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with a cost of more than $5,000 (more than $1,000 for certain vehicles and information technology equipment) and an estimated useful life of more than two years. Such assets are recorded at historical or estimated historical cost. Contributed and donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend the life of the asset are not capitalized.

Major capital outlays and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets is included as part of the capitalized value of the assets constructed in the enterprise funds.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Capital Assets (Continued)

Property, plant and equipment of the City is depreciated using the straight-line method over the following estimated useful lives:

Type of Asset Life in Years Buildings and structures 20 - 40 years Improvements other than buildings 20 years Public domain infrastructure 15 - 50 years Water system infrastructure 20 - 50 years Sanitary sewer system infrastructure 20 - 50 years Machinery and equipment 5 - 20 years L. Leased Property

The City receives some of its operating revenues in the form of rent payments from lessees of the parcels of land. The period of these leases could range from three to five years. The rent paid by each lessee is a set monthly amount determined by the lease agreement. All leases are cancellable.

The City owns and leases certain properties located in the City to various tenants. The following is a list of properties and tenants:

Lease TermLessee Address Leased Type of Property Beginning/Ending RentVerizon Wireless 3047 N. Roycove Dr. Communications Site 7/1/00-7/1/20 1,576$ Sprint/Nextel** 3047 N. Roycove Dr. Communications Site 4/30/19-4/30/24 3,328 T-Mobile 3047 N. Roycove Dr. Communications Site 11/14/19-11/14/24 2,496 The Mena co. dba Giovanni's 114 E. Italia Commercial 6/15/18-6/15/21 1,509 Bank of America 212 E. Badillo St. ATM Site 12/4/18-12/3/23 4,312 AT&T 559 N. Citrus Communications Site 9/3/18-9/3/23 3,163 Verizon Wireless 701 N. Sunflower Communications Site 8/23/18-8/23/23 3,105

**Sprint/Nextel actually 1 company

M. Capitalization of Leases

Certain leases have been capitalized, where appropriate, in accordance with the GASB Statement No. 13, Accounting for Leases.

N. Claims and Judgments

The accrual for workers’ compensation and general liability claims is based upon an actuarial review of the past experience which has been modified for current trends and information. While the ultimate amount of losses incurred through June 30, 2020 is dependent on future developments, based on information from the plan administrators, City management believes that the aggregate accrual is adequate to cover such losses, including amounts for incurred but not reported.

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NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Pensions

For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City’s California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported as fair value. CalPERS audited financial statements are publicly available reports that can be obtained on the CalPERS’s website under Forms and Publications.

P. Other Postemployment Benefits (OPEB) For purposes of measuring the net OPEB liability and deferred outflows/inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s plan (OPEB Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis. For this purpose, benefit payments are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Q. Net Position

Net position in the statement of net position is categorized as net investment in capital assets, restricted and unrestricted.

Net Investment in Capital Assets - This category groups all capital assets into one component of net position. Accumulated depreciation and the outstanding balances of debt (including discounts and premiums) that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted Net Position - This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law or enabling legislation. Unrestricted Net Position - This category represents net position of the City not restricted for any project or other purpose.

R. Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to future periods and will not be recognized as an outflow of resources (expense) until that time. The City has the following items that qualify for reporting in this category:

Deferred loss on refunding, net of accumulated amortization, results from the difference in the

carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

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R. Deferred Outflows/Inflows of Resources (Continued)

Deferred outflows related to pensions and OPEB equal to employer contributions made after the measurement date of the net pension liability.

Deferred outflows related to pensions for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

Deferred outflows related and OPEB resulting from the net difference in projected and actual earnings

on investments of the pension plans’ and OPEB fiduciary net position. These amounts are amortized over five years.

Deferred outflows from pensions and OPEB resulting from changes in assumptions. These amounts

are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions and retiree healthcare benefits through the plans.

Deferred outflows from pensions from changes in proportion and differences between the employer’s

contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plan.

In addition to liabilities, the statement of net position and the governmental funds balance sheet will report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to future periods and will not be recognized as an inflow of resources (revenue) until that time. The City has the following items that qualify for reporting in this category:

Deferred gain on refunding, net of accumulated amortization, results from the difference in the

carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

Deferred inflows related and OPEB for differences between expected and actual experience. These amounts are amortized over a closed period equal to the average of the expected remaining service lives of all employees that are provided with pensions through the plans.

Deferred inflows from pensions for changes in assumptions and from changes in proportion and differences between the employer’s contributions and the employer’s proportionate share of contributions. These amounts are amortized over a closed period equal to the average expected remaining service lives of all employees that are provided with pensions through the plan.

Deferred inflows related to pensions resulting from the net difference in projected and actual earnings

on investments of the pension plans net position. These amounts are amortized over five years.

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NOTE 2 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Excess of Charges over Appropriations

For the fiscal year ended June 30, 2020, expenditures exceeded appropriations in the following programs:

Variance withBudget Actual Final Budget

Measure R Special Revenue Fund 4,023,445$ 4,027,739$ (4,294)$ Other Governmental Funds:

Shoppers Lane Parking District SpecialRevenue Fund 7,400 7,717 (317)

Funds with deficit balances were as follows:

AmountOther Governmental Funds:

Measure W Special Revenue Fund (244,323)$ Park Development Capital Projects Fund (535,664)

The deficit in these funds be will reduced by transfers from the general fund or from receipt of grant revenues. NOTE 3 - CASH AND INVESTMENTS The City is following the requirements associated with GASB Statement No. 40, Deposit and Investment Risk Disclosures. More commonly referred to as GASB 40, this statement adds to and changes financial statement disclosure requirements for cash and investments of local governments. GASB 40 amends GASB Statement No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements, to address common deposit and investment risks related to credit risk, interest rate risk and foreign currency risk. As an element of interest rate risk, this statement requires certain disclosures of investments that have fair values with a high sensitivity to interest rate changes.

Cash and investments as of June 30, 2020, are classified in the accompanying financial statements as follows:

Business- Private-Governmental Type Purpose Trust

Activities Activities Fund Agency TotalStatement of net position:

Cash and investments 31,833,147$ 15,208,204$ 3,594,507$ 625$ 50,636,483$ Cash and investments - restricted - 4,594,016 - - 4,594,016 Cash and investments with fiscal agent 2,789,287 1,018,747 2,919,253 - 6,727,287

Total cash and investments 34,622,434$ 20,820,967$ 6,513,760$ 625$ 61,957,786$

Cash and investments as of June 30, 2020:consist of the following:Cash on hand 7,935$ Deposits with financial institutions 8,378,777 Deposits with fiscal agent 6,727,287 Investments 46,843,787

Total cash and investments 61,957,786$

Fiduciary Funds

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NOTE 3 - CASH AND INVESTMENTS Authorized Investments The table on the following page identifies the investment types that are authorized for the City by the California Government Code and the City’s investment policy. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Covina Covina Covina CovinaCGC Policy CGC Policy CGC Policy CGC Policy

Mutual funds (money market funds) N/A N/A 20% 10% 10% None AAA AAABankers acceptance 180 days 180 days 40% 20% 30% None None PrimeCommercial paper 270 days 180 days 25% 15% 10% None A PrimeCertificates and time deposits 5 years 2 years 30% 10% None None None NoneCorporate notes 5 years 2 years 30% 10% None None A AA-U.S. Treasury securities 5 years 5 years None 30% None None None NoneU.S. Agency securities 5 years 5 years None 30% None 10% None NoneLocal Agency Investment Fund (LAIF) N/A N/A None None None None None None

RatingMinimum Credit

Maximum

Maximum Maturity PortfolioPercentage of

IssuerInvestment in One

Maximum

Investments Authorized by Debt Agreements Investment of debt proceeds and reserves held by bond trustees are governed by the debt agreements, rather than the general provisions of the California Government Code. The City and SACRA bond reserves are held in money market mutual funds, U.S. treasury securities and the State of California Local Investment Pool. Interest Rate Risk Changes in interest rates could adversely affect the fair market values of an investment. The interest rate risk is monitored by the City by measuring the weighted average maturity of its portfolio. Generally, the longer the maturity of an investment, the greater sensitivity of its fair market value to changes in market interest rates. The City manages its exposure to declines in market values by limiting the weighted average maturity of its investments to less than 24 months. The investments held by bond trustees are primarily invested in highly liquid money market mutual funds, and thus are not highly sensitive to interest rate fluctuations. The following table provides information concerning interest rate risk as of June 30, 2020.

12 Months 13 to 36 25 to 60 More than 60Fair Value or Less Months Months Months

Investment type:State investment pool (LAIF) 26,435,829$ 26,435,829$ -$ -$ -$ U.S. Agency securities 2,975,506 - 2,975,506 - - U.S. Treasury securities 17,331,303 3,346,879 13,984,424 - - Money market mutual funds 101,149 101,149 - - - Held by bond trustee:

Money market mutual funds 6,727,287 6,727,287 - - -

Total 53,571,074$ 36,611,144$ 16,959,930$ -$ -$

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NOTE 3 - CASH AND INVESTMENTS (CONTINUED) Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Certain investments, such as obligations, which are backed by the full faith and credit of the United States Government, are exempt from credit rating disclosures. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy or debt agreements and the actual rating from Standard & Poor’s as of fiscal year end for each investment type:

Minimum Not RequiredCredit to be Rated or

Fair Value Rating AAA AA+ A+ Not RatedInvestment type:

State investment pool (LAIF) 26,435,829$ N/A -$ -$ -$ 26,435,829$ U.S. Agency securities 2,975,506 N/A - 2,975,506 - - U.S. Treasury securities 17,331,303 N/A - - - 17,331,303 Money market mutual funds 101,149 A 101,149 - - - Held by bond trustee:

Money market mutual funds 6,727,287 A 6,727,287 - - -

Total 53,571,074$ N/A 6,828,436$ 2,975,506$ -$ 43,767,132$

Concentration of Credit Risk The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There are no investments in any one issuer (other than U.S. Treasury securities, money market mutual funds and external investment pools) that represent 5% or more of total City investments. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law. The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2020, all the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts.

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NOTE 3 - CASH AND INVESTMENTS (CONTINUED) Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon its pro rata share of the fair value provided by LAIF for the entire LAIF portfolio. The balance available for withdrawal is based on LAIF accounting records and recorded on an amortized basis. Fair Value Measurements The City categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the assets. Level 1 inputs are quoted prices in active markets for identical assets, Level 2 inputs are quoted prices for similar assets in active markets and Level 3 inputs are significant unobservable inputs. The City pool investment has the following recurring fair value measurements as of June 30, 2020:

Quoted Prices in SignificantActive Markets Other Significant

for Identical Observable UnobservableFair Value Assets (Level 1) Input (Level 2) Inputs (Level 3)

Debt securities:U.S. Agency securities 2,975,506$ -$ 2,975,506$ -$ U.S. Treasury securities 17,331,303 - 17,331,303 -

Total Investments Measured at Fair Value 20,306,809 -$ 20,306,809$ -$

Investments:State investment pool (LAIF)* 26,435,829 Money market mutual funds* 6,828,436

Total Pooled Investments 53,571,074$

* Not subject to fair value measurement hierarchy.

Fair Value Measurements Using

Investment by Fair Value Level

NOTE 4 - INTERFUND TRANSACTIONS

A. Interfund Balances

Operating receivables between funds are classified as due from or due to other funds. Negative individual fund cash and investment balances are offset by a due from other funds in the General Fund with a due to other funds set up in those funds owing the General Fund.

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NOTE 4 - INTERFUND TRANSACTIONS (CONTINUED)

A. Interfund Balances (Continued) The following are due from and due to balances as of June 30, 2020:

Payable Fund AmountGeneral Measure R Special Revenue Fund 2,660,138$

Other Governmental Funds 286,422 2,946,560$

Receivable Fund

Interfund Transfers Transfers between funds are generally subsidies from one fund to another fund, funding of workers compensation and general liability reserves and reimbursement for expenditures incurred. The following are the interfund transfers for fiscal year ended June 30, 2020.

Transfers Out Fund AmountGeneral Other Governmental Funds 101,000$ Other Governmental Funds General 106,606 Other Governmental Funds Other Governmental Funds 987,768

Total 1,195,374$

Transfers In Fund

B. Advances To/Advances from Other Funds

Advances to/from other funds are noncurrent interfund loans and are offset by a nonspendable fund balance indication in applicable governmental funds to indicate they are not in spendable form. The following are advances to/from other funds as of June 30, 2020:

Payable Fund AmountWater Utility General 100,570$

Receivable Fund

C. Internal Balances

Internal balances represent the net interfund receivables and payables remaining after elimination of all such balances within governmental and business-type activities.

NOTE 5 - PROPERTY TAXES Property taxes are attached as an enforceable lien on property as of January 1. Taxes are levied in September and are payable in two installments on November 1 and February 1 and are delinquent after December 10 and April 10, respectively. Any unpaid amounts at the end of the fiscal year are recorded as property taxes receivable. The County of Los Angeles bills and collects the property taxes and subsequently remits the amount due to the City of Covina in installments during the year. Historically, the City has received substantially all of the taxes levied within two years from the date they are levied.

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NOTE 5 - PROPERTY TAXES (CONTINUED) The County is permitted by State Law (Article XIII A of the California Constitution) to levy taxes at 1% of full market value (at time of purchase) and can increase the property’s value no more than 2% per year. The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period.

NOTE 6 - NOTES RECEIVABLE The former Agency entered into agreement with Covina Gardens, KBS, L.P., a California Limited Partnership (Developer) to effectuate the Redevelopment Plan for the Covina Revitalization Project No. 1 by providing for the rehabilitation of residential rental housing development existing on a site acquired by the Developer which will maintain the supply and availability of low and moderate income housing, including very low-income units. The former Agency provided assistance to the Developer in the form of notes secured by a second deed of trust in the amount not to exceed $4,742,000. The interest rate range is 2% per year, and notes receivable are due in 55 years. At June 30, 2020, the City has recorded an allowance for the balance of $5,168,368 for principal of $4,742,000 and accrued interest of $426,368 as management is not certain if this amount will be collected. During the fiscal year, the City received accrued interest of $420,665. NOTE 7 - LOANS RECEIVABLE The City’s Community Development Block Grant (CDBG) program provides low-income housing and economic assistance to qualifying households and businesses. The loans do not require monthly repayment. In addition to CDBG loans, first-time homebuyer loans made by the former Covina Redevelopment Agency are now administered by the Housing Authority. The loans for the first-time homebuyer and for down payment assistance bear interest from 1.5% to 6.875%. The first-time home buyer loans are forgiven after 45 consecutive years of occupying the home purchased, while the down payment assistance is forgiven after 20 years of occupying the home purchased. The housing rehabilitation program loan is secured by a deed of trust on the property and is due upon sale or transfer of the title of the property. The outstanding balance as of June 30, 2020, of all loans was $1,830,344. Due to the forgiveness feature of these loans the City has established an allowance for uncollectible loans in the amount of $1,549,876.

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NOTE 8 - CAPITAL ASSETS Governmental Activities Capital asset activity for the fiscal year ended June 30, 2020, was as follows:

BalanceJuly 1, 2019 Balanceas restated Additions Deletions June 30, 2020

Governmental activities:Capital assets, not depreciated:

Land 10,902,638$ -$ 14,785$ 10,887,853$ Construction in progress 14,056,485 7,151,978 19,420,758 1,787,705

Total capital assets, not depreciated 24,959,123 7,151,978 19,435,543 12,675,558

Capital assets, depreciated:Buildings and structures 29,913,555 9,734,775 39,648,330 Improvements other than buildings 10,525,566 47,274 - 10,572,840 Public domain infrastructure 114,034,538 9,164,154 - 123,198,692 Sanitary sewer infrastructure 6,221,681 - 6,221,681 Machinery and equipment 11,691,963 399,200 576,147 11,515,016

Total capital assets, depreciated 172,387,303 19,345,403 576,147 191,156,559

Less accumulated depreciation for:Buildings and structures 12,043,911 686,056 12,729,967 Improvements other than buildings 4,821,273 413,021 - 5,234,294 Public domain infrastructure 83,472,191 3,323,094 - 86,795,285 Sanitary sewer infrastructure 4,314,653 64,737 - 4,379,390 Machinery and equipment 7,992,322 800,566 554,945 8,237,943

Total accumulated depreciation 112,644,350 5,287,474 554,945 117,376,879

Total capital assets, depreciated, net 59,742,953 14,057,929 21,202 73,779,680

Total capital assets, net 84,702,076$ 21,209,907$ 19,456,745$ 86,455,238$

Depreciation expense was charged to the following categories:

Governmental activities:General government 284,866$ Public safety 380,487 Public works 3,571,997 Culture and recreation 423,404 Transit 310,156 Internal service funds charged to programs 316,564

Total governmental activities 5,287,474$

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NOTE 8 - CAPITAL ASSETS (CONTINUED) Business-Type Activities

Balance BalanceJuly 1, 2019 Additions Deletions June 30, 2020

Business-type activities:Capital assets, not depreciated:

Land 377,408$ -$ -$ 377,408$ Construction in progress 1,759,313 12,233,828 13,906,083 87,058

Total capital assets, not depreciated 2,136,721 12,233,828 13,906,083 464,466

Capital assets, depreciated:Buildings and structures 12,478,080 64,997 - 12,543,077 Improvements other than buildings 305,692 362,840 - 668,532 Water system infrastructure 36,127,376 13,478,243 - 49,605,619 Machinery and equipment 3,022,059 308,595 2,371 3,328,283

Total capital assets, depreciated 51,933,207 14,214,675 2,371 66,145,511

Less accumulated depreciation for:Buildings and structures 3,289,971 247,371 - 3,537,342 Improvements other than buildings 112,861 18,929 - 131,790 Water system infrastructure 11,892,201 1,065,800 - 12,958,001 Machinery and equipment 1,895,704 146,146 2,371 2,039,479

Total accumulated depreciation 17,190,737 1,478,246 2,371 18,666,612

Total capital assets, depreciated, net 34,742,470 12,736,429 - 47,478,899

Total capital assets, net 36,879,191$ 24,970,257$ 13,906,083$ 47,943,365$

Depreciation expense was charged to the following categories. Business-type activities:

Water utility 1,276,414$ Sewer 179,627 Nonmajor fund - Environmental protection 22,205

Total business-type activities 1,478,246$

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NOTE 9 - PENSION PLANS The following is a summary of pension related items for the year ended June 30, 2020:

Deferred DeferredPension Outflows Inflows PensionLiability of Resources of Resources Expense

CalPERS Miscellaneous 29,743,218$ 3,870,674$ (312,539)$ 4,705,709$ CalPERS Safety 35,349,515 8,177,276 (3,260,638) 6,181,700

65,092,733$ 12,047,950$ (3,573,177)$ 10,887,409$

Pension liabilities are liquidated from the related employees home program, with the majority funded out of the General Fund.

A. General Information about the Pension Plans

Plan Descriptions All qualified permanent and probationary employees are eligible to participate in the City’s Safety (police) cost sharing defined benefit plan and the Miscellaneous (all other) Plan, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of service. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit or the Optional Settlement 2W Death Benefit. Safety members can receive a special death benefit if the member dies while actively employed and the death is job related. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

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NOTE 9 - PENSION PLANS (CONTINUED)

A. General Information about the Pension Plans (Continued)

Benefits Provided (Continued) The Plans’ provisions and benefits in effect at the measurement date of June 30, 2019 are summarized as follows:

Prior to On or AfterHire date January 1, 2013 January 1, 2013Benefit formula 2.5%@55 2.0%@62Benefit vesting schedule 5 Years of service 5 Years of serviceBenefit payments Monthly for life Monthly for lifeRetirement age 50 - 55 50 - 62Monthly benefits, as a %

of eligible compensation 2.0% - 2.7% 2.0% - 2.7%Required employee contribution rates 8.00% 6.50%Required employer contribution rates:

Normal cost rate 10.144% 6.750%Payment of unfunded liability 1,651,966$ -$

On or after January 1, 2011

Prior to and prior to On or AfterHire date December 31, 2010 January 1, 2013 January 1, 2013Benefit formula 3.0%@50 3%@55 2.7%@57Benefit vesting schedule 5 Years of service 5 Years of service 5 Years of serviceBenefit payments Monthly for life Monthly for life Monthly for lifeRetirement age 50 - 55 50 - 55 50 - 57Monthly benefits, as a %

of eligible compensation 3% 2.4% - 3% 2.0% - 2.7%Required employee contribution rates 9.00% 9.00% 12.25%Required employer contribution rates:

Normal cost rate 22.346% 20.416% 12.965%Payment of unfunded liability 1,062,088$ -$ -$

Safety

Miscellaneous

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A. General Information about the Pension Plans (Continued)

Employees Covered At the measurement date of June 30, 2019, the following employees were covered by the benefit terms for the Miscellaneous Plan:

MiscellaneousInactive employees or beneficiaries currently receiving benefits 227 Inactive employees entitled to but not yet receiving benefits 296 Active employees 100

Total 623

Contributions Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions.

B. Net Pension Liability The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2019, using an annual actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is shown on the following page.

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B. Net Pension Liability (Continued) Actuarial Assumptions The total pension liabilities in the June 30, 2018, actuarial valuations were determined using the following actuarial assumptions:

Miscellaneous SafetyValuation Date June 30, 2018 June 30, 2018Measurement Date June 30, 2019 June 30, 2019Actuarial Cost Method Entry-Age Normal Entry-Age Normal

Cost Method Cost MethodActuarial Assumptions:

Discount Rate 7.15% 7.15%Inflation 2.50% 2.50%Projected Salary Increase (1) (1)Mortality Rate Table (2) (2)Post-Retirement Benefit Increase (3) (3)

(1) Varies by entry age and service.(2)

(3)

The mortality table used was developed based on CalPERS-specific data. The probabilitiesof mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to2015. Pre-retirement and post-retirement morality rates include 15 years of projectedmortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.For more details on this table, please refer to the CalPERS Experience Study and Review ofActuarial Assumptions report from December 2017 that can be found on the CalPERSwebsite. The less of contract COLA or 2.50% until Purchasing Power Protection Allowance Floor onpurchasing power applies, 2.50% thereafter.

Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short term (first 10 years) and the long term (11+ years) using a building-block approach. Using the expected nominal returns for both short term and long term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

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B. Net Pension Liability (Continued) Long-Term Expected Rate of Return (Continued) The expected real rates of return by assets class are as follows:

Assumed Real Return Real Return

Asset Years YearsAllocation 1 - 10 (b) 11+ (c)

Global Equity 50.00% 4.80% 5.98%Fixed Income 28.00% 1.00% 2.62%Inflation Assets 0.00% 0.77% 1.81%Private Equity 8.00% 6.30% 7.23%Real Assets 13.00% 3.75% 4.93%Liquidity 1.00% 0.00% -0.92%

Total 100.00%

(a)

(b) An expected inflation of 2.0% was used for this period.(c) An expected inflation of 2.92% was used for this period.

Asset Class (a)

In the CalPERS CAFR, fixed income is included in global debt securities; liquidity is included inshort-term investments; and inflation assets are included in both global equity securities and globaldebt securities.

Discount Rate The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Subsequent Events There were no subsequent events that would materially affect the results in this disclosure.

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NOTE 9 - PENSION PLANS (CONTINUED) C. Changes in the Net Pension Liability

The changes in the net pension liability for the Miscellaneous Plan are as follows:

Total Plan Net PensionPension Fiduciary LiabilityLiability Net Position (Asset)

Balance at June 30, 2018(Measurement Date) 90,462,241$ 63,762,991$ 26,699,250$

Changes in the Year:Service cost 1,380,689 - 1,380,689 Interest on the total pension liability 6,507,596 - 6,507,596 Differences between expected

and actual experience 2,271,369 - 2,271,369 Changes in assumptions - - - Changes in benefit terms - - Plan to plan resource movement - - - Contribution - employer - 2,386,884 (2,386,884) Contribution - employee - 656,805 (656,805) Net investment income - 4,117,352 (4,117,352) Administrative expenses - (45,503) 45,503 Other miscellaneous expense - 148 (148) Benefit payments, including refunds - -

of employee contributions (4,817,247) (4,817,247) -

Net Changes 5,342,407 2,298,439 3,043,968

Balance at June 30, 2019

(Measurement Date) 95,804,648$ 66,061,430$ 29,743,218$

Increase (Decrease)

Proportionate Share of Net Pension Liability As of June 30, 2020 (measurement date of June 30, 2019), the City reported $35,349,515 for its proportionate share of the net pension liability for the Safety Plan.

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NOTE 9 - PENSION PLANS (CONTINUED) C. Changes in the Net Pension Liability (Continued)

Proportionate Share of Net Pension Liability (Continued) The City’s net pension liability for the Safety Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2019, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. The City’s proportionate share of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Safety Plan as of the measurement dates ended June 30, 2018 and 2019 was as follows:

SafetyProportion - June 30, 2018 0.545820%Proportion - June 30, 2019 0.566270%Change - Increase (Decrease) 0.020450% Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:

Miscellaneous Safety1% Decrease 6.15% 6.15%Net Pension Liability 42,582,111$ 52,600,573$

Current Discount Rate 7.15% 7.15%Net Pension Liability 29,743,218$ 35,349,515$

1% Increase 8.15% 8.15%Net Pension Liability 19,236,435$ 21,206,348$ Pension Plan Fiduciary Net Position Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

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D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2020, the City recognized pension expense of $4,705,709 and $6,181,700 for the Miscellaneous and Safety Plans, respectively. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Deferred Deferred DeferredOutflows Inflows Outflows Inflows

of Resources of Resources of Resources of ResourcesPension contributions subsequent

to measurement date 2,794,762$ -$ 2,758,911$ -$ Differences between expected and actual experience 1,075,912 - 2,308,004 - Change in assumptions - - 1,448,915 (282,754) Change in employer’s proportion and differences

between the employer’s contributions and the employer’s proportionate share of contributions - - 1,661,446 (2,491,591)

Net differences between projected and actualearnings on plan investments - (312,539) - (486,293)

Total 3,870,674$ (312,539)$ 8,177,276$ (3,260,638)$

Miscellaneous Safety

$2,794,762 and $2,758,911 reported as deferred outflows of resources related to contributions subsequent to the measurement date, for the Miscellaneous and Safety Plans, respectively, will be recognized as a reduction of the net pension liability in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

YearEnding

June 30, Miscellaneous Safety2021 1,343,512$ 2,001,790$ 2022 (552,326) (229,797) 2023 (99,047) 291,117 2024 71,234 94,617 2025 - -

Thereafter - -

Payable to the Pension Plan At June 30, 2020, the City had no outstanding amount of contributions to the pension plan required for the year ended June 30, 2020.

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NOTE 10 - COMPENSATED ABSENCES For governmental funds, accumulated vacation and sick leave benefits payable at June 30, 2020, was $3,522,464. The short-term portion of $1,007,956 and long-term portion of 2,514,508 is not accounted in the governmental funds but is included in the governmental activities of the government-wide statements. Accumulated vacation and sick leave of $239,797, of which $58,685 represents the current portion, is recorded in the individual internal service funds and governmental activities of the government-wide financial statements. For enterprise funds, accumulated vacation and sick leave amounted to $490,965 of which $169,366 represents the current portion. The total amount is recorded within the respective proprietary funds and business-type activities of the government-wide statements. NOTE 11 - RISK MANAGEMENT Workers’ Compensation and General Liability The City has a program of insurance for any liability to City employees arising under the workers’ compensation laws for the State of California. By this action, the City will pay all claims up to $500,000. Amounts in excess of $500,000, up to $150,000,000, are covered through an excess commercial insurer. There are no claims that exceed insurance coverage over the last three years. The City established general liability and workers’ compensation internal service funds. The funds have cash and investments of $4,331,228 and $945,034, respectively, which have been internally restricted for payment of outstanding workers’ compensation and general liability claims. Actual settlements accrued are accounted for in the appropriate fund. Estimates for all remaining outstanding claims, including an estimate for incurred but not reported claims (IBNR), are not accounted for in the individual funds but are reported in the governmental activities of the government-wide statements under claims and judgments. At June 30, 2020, total actual and estimated claims and judgments payable were as follows: General liability 1,038,000$ Workers’ compensation 6,209,000

Total 7,247,000$

The following are changes in the claims and judgments liability for fiscal years 2020 and 2019:

2020 2019Claims and judgements, beginning of fiscal year 7,138,000$ 7,682,193$ Claims incurred (including IBNRs) 696,013 5,256,370 Claims paid (587,013) (5,800,563)

Claims and judgements, end of fiscal year 7,247,000$ 7,138,000$

Fiscal Year Ended June 30

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NOTE 12 - CAPITALIZED LEASE OBLIGATIONS Water Equipment The City entered into a capital lease with Bank of America for water equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the inception date in the City’s capital assets. The future minimum lease obligation and the net present value of these payments as of June 30, 2020, are as follows:

FiscalYears Ending

June 30 Amount2021 462,228$ 2022 462,228 2022 462,228 2024 462,228 2025 462,228 2026 231,114

Total minimum lease payments 2,542,254 Less: amount representing interest (335,345)

Present value of minimum lease payment 2,206,909$

The value of the assets acquired by the capital lease was $1,747,963 as of June 30, 2020, net of accumulated depreciation of $3,019,208. Public Safety Radio The City entered into a capital lease with Motorola Solutions, LLC for radio equipment. This lease agreement qualifies as a capital lease for accounting purposes and, therefore, has been recorded at the present value of future minimum lease payments as of the inception date in the City’s capital assets. The future minimum lease obligation and the net present value of these payments as of June 30, 2020, are as follows:

FiscalYears Ending

June 30 Amount2021 252,484$

Total minimum lease payments 252,484 Less: amount representing interest (8,397)

Present value of minimum lease payment 244,087$

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NOTE 13 - LONG-TERM LIABILITIES The following is a summary of changes in the long-term liabilities for the fiscal year ended June 30, 2020:

Balance Balance CurrentJuly 1, 2019 Additions Deletions June 30, 2020 Portion

Governmental activities:Other long-term liabilities

Compensated absences 3,803,544$ 1,052,159$ 1,093,442$ 3,762,261$ 1,066,641$ Claims and judgments 7,138,000 696,013 587,013 7,247,000 -

Other debtCertificates of participation payable (COP) 5,240,000 - 180,000 5,060,000 185,000 Unamortized premium on COP 231,187 - 11,560 219,627 11,560

Direct borrowings and placementsCapital lease payable 496,571 - 252,484 244,087 244,087 Section 108 loan 2,375,000 - 125,000 2,250,000 125,000

Total long-term liabilities, net 19,284,302$ 1,748,172$ 2,249,499$ 18,782,975$ 1,632,288$

Balance Balance Current

July 1, 2019 Additions Deletions June 30, 2020 PortionBusiness-type activities:Other long-term liabilities

Compensated absences 438,250$ 274,190$ 221,475$ 490,965$ 169,366$ Direct borrowings and placements

Capital lease payable 2,549,111 - 342,202 2,206,909 359,070 Other debt

Revenue bonds payable 23,360,000 9,930,000 11,965,000 21,325,000 1,165,000 Unamortized premium on revenue bonds 123,886 - 5,631 118,255 5,631 Unamortized discount on revenue bonds (76,189) - 76,189 - -

Total long-term liabilities, net 26,395,058$ 10,204,190$ 12,610,497$ 24,141,129$ 1,699,067$

Internal service funds predominately serve the governmental funds. Accordingly, long-term liabilities for these funds are included as part of the above totals for governmental activities. Claims and judgments, compensated absences, net pension liability and net OPEB liability for the governmental activities are generally liquidated by the General Fund and Internal Service Funds. Governmental Activities Transportation Revenue Certificates of Participation, Series 2017 A In August 2017, $5,625,000 of 2017 Series A certificates of participation bonds were issued to provide funding to repair, upgrade or re-construct residential streets that are in poor to fair condition. The bonds mature annually through 2039, in amounts ranging from $175,000 to $355,000. Interest rates vary from 2.0% to a maximum of 5.0% and are payable semiannually on December 1 and June 1. At June 30, 2020, the outstanding balance of these bonds was $5,060,000.

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NOTE 13 - LONG-TERM LIABILITIES (CONTINUED) Governmental Activities (Continued) Transportation Revenue Certificates of Participation, Series 2017 A (Continued) The total debt service requirements to maturity with respect to the certificates included in the governmental-type activities are as follows:

FiscalYears Ending

June 30 Principal Interest Total2021 185,000$ 179,238$ 364,238$ 2022 195,000 169,988 364,988 2023 205,000 160,238 365,238 2024 215,000 149,988 364,988 2025 220,000 145,688 365,688

2026-2030 1,200,000 628,800 1,828,800 2031-2035 1,480,000 354,050 1,834,050 2036-2039 1,360,000 107,813 1,467,813

5,060,000$ 1,895,803$ 6,955,803$

Section 108 Loan Payable The County of Los Angeles provided funds under an interim agreement to loan $2,500,000 to the City to provide funds for Covina Senior and Community Center. The advance under the interim agreement was replaced by a Section 108 loan under the Community Development Block Grant Program of the Department of Housing and Urban Development. The City makes annual principal amount of $125,000 commencing August 1, 2018 and annually thereafter and semiannual interest payments on August 1 and February 1 each Year. At June 30, 2020, the outstanding loan balance was $2,250,000.

FiscalYears Ending

June 30 Principal Interest Total2021 125,000 66,995 191,995$ 2022 125,000 63,795 188,795 2023 125,000 60,596 185,596 2024 125,000 57,369 182,369 2025 125,000 54,065 179,065

2026-2030 625,000 217,518 842,518 2031-2035 625,000 119,016 744,016 2036-2038 375,000 20,009 395,009

2,250,000$ 659,363$ 2,909,363$

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NOTE 13 - LONG-TERM LIABILITIES (CONTINUED) Business-Type Activities Revenue Bonds Payable, Sewer Enterprise Fund Wastewater Sewer Revenue Bonds - 2009 In July 2009, $15,750,000 of revenue bonds were issued to provide funds for the acquisition and construction of improvements to improve and increase capacity to the City’s wastewater enterprise. The outstanding amount of $10,740,000 2009 Bonds were redeemed on October 1, 2019 from proceeds from the 2019 Taxable Wastewater Revenue Refunding Bonds and reserve funds from the 2009 Bonds. Wastewater Sewer Revenue Bonds – 2019 Taxable Wastewater Revenue Refunding Bonds In August 2020, the City, issued $9,930,000 2019 Taxable Wastewater Revenue Refunding Bonds (2019 Bonds) for the purpose of refunding the Sewer Revenue Bonds issued in 2009 and paying issuance costs related to the 2019 Bonds. Proceeds from the 2019 Bonds and reserve funds from the 2009 Bonds were deposited in a redemption fund to redeem the outstanding amount of $10,740,000 2009 Bonds on October 1, 2019. As a result of the refunding, the City realized a net cash flow saving of $2,875,389 and an economic gain (difference between present value of old debt and new debt) of $2,536,558. Interest on the 2019 Bonds is payable semi-annually on October 1 and April 1 of year at rates ranging from 1.966% to 2.686% with principal payable October 1 commencing October 1, 2019. The 2019 Bonds are not subject to optional redemption prior to their stated maturities. A reserve fund has not been established for the 2019 Bonds. The bonds are secured by a pledge of the net revenues received by the City for the sewer fees. Net Revenues will be equal to 120% of the fiscal year debt service if there is a transfer from a rate stabilization fund. Net revenues without the inclusion of a transfer from the rate stabilization fund will be at least equal to 100% of the fiscal year debt service requirement. Total principal and interest remaining to be paid on the bonds is $10,194,820. Principal and interest paid for the current fiscal year and total customer net revenues were $1,025,239 and $2,905,488. The total debt service requirements to maturity with respect to the certificates included in the business-type activities are as follows:

FiscalYears Ending

June 30 Principal Interest Total2021 825,000$ 202,631$ 1,027,631$ 2022 840,000 186,054 1,026,054 2023 855,000 168,768 1,023,768 2024 870,000 150,861 1,020,861 2025 885,000 132,088 1,017,088

2026-2029 4,760,000 319,418 5,079,418

9,035,000$ 1,159,820$ 10,194,820$

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NOTE 13 - LONG-TERM LIABILITIES (CONTINUED) Business-Type Activities (Continued) Revenue Bonds Payable, Water Enterprise Fund On December 10, 2010, the City issued $15,000,000 of Revenue Bonds with an interest rate of 2.0% - 5.0% to refund $1,290,000 outstanding 1999 Certificate of Participation bonds and to finance various capital projects amounting to $12,715,285. Accordingly, the refunded bonds were considered to be defeased and the liabilities for those bonds were removed from the proprietary fund statement of net position. The Authority executed and delivered the certificates. The Authority, pursuant to a trust agreement, assigned all of its rights to the trustee for the benefit of the owners of the certificates. Each certificate represents a proportionate interest in an installment sale agreement of the improvement project financed with the original certificates between the City and the Authority as a seller. Under the agreement, the City has covenanted that it will prescribe, revise and collect such charges for the services and facilities of its municipal water system which will produce gross revenues that will generate net revenues equal to 1.25 times the installment payments in each fiscal year. A reserve fund is established in the amount of maximum annual installment payments from certificate proceeds for the benefit of the owners of the certificates. Since the Authority is not at-risk for the installment sale payments and the certificates are to be repaid from resources generated by the Water Utility Enterprise Fund, the certificates are recorded as long-term debt in the Water Utility Enterprise Fund. The bonds are secured by a pledge of the net revenues received by the City for water sales. Total principal and interest remaining to be paid on the bonds is $20,533,472. Principal and interest paid for the current year and total customer net revenues were $988,713 and $10,337,630, respectively. Interest is payable semiannually on April 1 and October 1 of each year at rates of interest ranging from 2.0% to 5.0%. Payment of principal on the bonds began on October 1, 2011, and is due on October 1 each year until 2040. The outstanding balance as of June 30, 2020 was $12,290,000. The total debt service requirements to maturity with respect to the certificates included in the business-type activities are as follows:

FiscalYears Ending

June 30 Principal Interest Total2021 340,000$ 645,312$ 985,312$ 2022 355,000 631,412 986,412 2023 370,000 614,600 984,600 2024 390,000 594,650 984,650 2025 410,000 573,650 983,650

2026-2030 2,385,000 2,518,485 4,903,485 2031-2035 3,080,000 1,804,338 4,884,338 2036-2040 4,020,000 835,175 4,855,175

2040 940,000 25,850 965,850

12,290,000$ 8,243,472$ 20,533,472$

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NOTE 14 - FUND BALANCES As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the City is bound to honor constraints on the specific Purposes for which amounts in the funds can be spent. As of June 30, 2020, fund balances for governmental funds are made up of the following: Nonspendable Fund Balance - Nonspendable fund balance includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The not in spendable form criterion includes items that are not expected to be converted to cash (for example, inventories, prepaid amounts and due from successor agency in the General Fund). Restricted Fund Balance - Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. Committed Fund Balance - Committed fund balance includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-making authority, the City Council. Commitments may be changed or lifted only by the City Council taking the same formal action that imposed the constraint originally (for example: resolution and ordinance). Ordinance is the highest level of the City Council’s approval. Assigned Fund Balance - Assigned fund balance comprises amounts intended to be used by the City for specific purposes that are neither restricted nor committed. Intent is expressed by (1) the City Council or (b) a body (for example: a budget or finance committee) or official to which the City Council has delegated through its fund balance policy the authority to assign amounts to be used for specific purposes. Assigned amounts also include all residual amounts in governmental funds (except negative amounts) other than the General Fund, that are not classified as nonspendable, restricted or committed. Unassigned Fund Balance - Unassigned fund Balance is the residual classification for the General Fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is depleted in the order of restricted, committed, assigned and unassigned. The City Council adopted a Reserve Policy. The policy aims to help reduce the negative impact on the City in times of economic uncertainty and potential losses of funding from other governmental agencies. City reserves are restricted for one-time purposes. The policy establishes minimum requirements for General Fund nondepartmental reserves and provides guidelines for the use of these funds.

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NOTE 14 - FUND BALANCES (CONTINUED) General Fund Nondepartmental Reserve Requirements Appropriation for contingencies is maintained at 20% of total General Fund net appropriations for one-time emergencies and economic uncertainties. Excess fund balance at year-end must first be used to replenish the reserve amount at the 20% level.

General NonmajorFund Measure R Governmental Total

NonspendableDue from successor agency 1,692,088$ -$ -$ 1,692,088$ Prepaid expenses 929,466 - 1,159 930,625

Total 2,621,554 - 1,159 2,622,713

RestrictedRedevelopment and housing - - 4,275,145 4,275,145 Community development - - 2,062,256 2,062,256 Law enforcement 114,130 - 538,994 653,124 Street and transportation projects - 40,803 8,359,730 8,400,533 Air quality projects - - 111,913 111,913 Assessment districts - - 1,295,090 1,295,090 Culture and recreation 313,949 - 677,403 991,352 Other capital projects - - 551,539 551,539

Total 428,079 40,803 17,872,070 18,340,952

CommittedEmergency contingency 8,029,233 - - 8,029,233

AssignedOther capital projects 25,940 - - 25,940

Total 25,940 - - 25,940

Unassigned 3,167,653 - (832,212) 2,335,441

Total 14,272,459$ 40,803$ 17,041,017$ 31,354,279$

NOTE 15 - CONTINGENCIES The City is involved in several pending lawsuits of a nature common to many similar jurisdictions. City management estimates that potential claims against the City, not covered by insurance, will not have a material adverse effect on the financial position of the City.

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NOTE 16 - JOINT VENTURE The Covina Irrigating Company (the Company) is a nonprofit mutual water company. The purpose of the Company is to develop, distribute, supply or deliver water at cost for irrigation and domestic uses of its stockholders. The governing board of directors consists of nine directors which are elected by the stockholders. The City’s investment in the Company has been recorded on the equity method of accounting and is shown as an “investment in joint venture” in the Water Utility Enterprise Fund. The City invested in the Company’s shares solely to ensure that present and future water supply will be maintained at an adequate level. The City’s equity share is 42.18%. Complete financial statements for Covina Irrigating Company can be obtained from the Company. Summarized audited information for the fiscal year ended June 30, 2020, is as follows:

Operating revenues 12,401,793$ Operating expenses (12,498,780)

Operating income (96,987)

Nonoperating income (loss) (175,818)

Net income (272,805)$

Total assets 27,987,187$

Total liabilities 9,385,414$ Total fund equity 18,601,773

Total liability and fund equity 27,987,187$

The difference of the acquisition cost of shares by the City over the corresponding percentage of net position acquired at the time of acquisition is considered goodwill. The City is also a participant in several cost-sharing agreements with other governmental units. There is no significant financial interest or ongoing financial responsibility on the part of the City with these agreements. NOTE 17 - OTHER POSTEMPLOYMENT BENEFITS (OPEB) A. General Information about the OPEB Plan

Plan Description The City provides retiree medical benefits under the CalPERS health plan which provides medical insurance benefits to eligible retirees and their spouses in accordance with various labor agreements. This plan is a single-employer defined benefit plan and does not issue separate financial statements. Copies of the CalPERS’s annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. Eligible employees that do not participate in the CalPERS health plan are eligible to receive monthly payments from the City. These benefits are accounted for under the OPEB liability.

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NOTE 17 - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) A. General Information about the OPEB Plan (Continued)

Eligibility Employees are eligible for retiree health benefits if they retire from the City on or after age 50 (unless disabled) and are eligible for a PERS pension. The benefits are available only to employees who retire from the City. Membership of the plan consisted of the following at the June 30, 2019, measurement date: Active plan members 162 Inactive employees or beneficiaries currently receiving benefit payments 137

Total 299

Contributions The contribution requirements of plan members and the City are established and may be amended by the City and the City Council. The City must agree to make a defined monthly payment toward the cost of each retiree’s overage.

B. Net OPEB Liability

The City’s net OPEB liability was measured as of June 30, 2019, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2018 rolled forward to June 30, 2019 using standard update procedures. Actuarial Assumptions The total OPEB liability in the June 30, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2018Funding Method Entry-age normal cost, level percent of payDiscount Rate 3.17%Investment Rate of Return 4.50% per year net of expensesInflation 3.00%Aggregate Payroll Increases 2.75%Mortality Rate 2014 CalPERS Mortality for Active Safety Employees

2014 CalPERS Mortality for Retired Safety Employees2014 CalPERS Active Mortality for Miscellaneous

Healthcare Trend Rate 6.0% in 2018 trending to 5.0% for 2028 and later

Change in Assumptions:Discount Rate 4.50% - 3.65%Inflation 2.75% - 3.00%Healthcare Trend 4% for 1 year; 6% in 2018 to 5% in 2028 and later

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NOTE 17 - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) B. Net OPEB Liability (Continued)

Long-Term Expected Rate of Return The long-term expected rate of return on OPEB plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. The calculated investment rate of return was set equal to the expected ten-year compound (geometric) real rate of return plus inflation (rounded to the nearest 25 basis point where appropriate). The table below reflects the long-term expected real rate of return by asset class (based on published capital market assumptions).

Assumed Asset Real RateAsset Class Allocation of Return

Broad U.S. Equity 20% 4.40%U.S. Fixed 75% 1.50%Cash Equivalents 5% 0.10%Total 100%

Discount Rate GASB 75 generally requires that a blended discount rate be used to measure the Total OPEB Liability. The long-term expected return on plan investments may be used to discount liabilities to the extent that the plan’s Fiduciary Net Position (fair market value of assets) is projected to cover benefit payments and administrative expenses. A 20-year high quality (AA/Aa or higher) municipal bond rate must be used for periods where the Fiduciary Net Position is not projected to cover benefit payments and administrative expenses. Determining the discount rate under GASB 75 will often require that the actuary perform complex projections of future benefit payments and asset values. This has resulted in a blended discount rate of 3.17%, which takes into account the long-term expected rate of return of 4.5% and the Bond Buyer 20-Bond GO Index municipal bond rate of 3.13%. Change in Assumptions The discount rate was changed from 3.65% to 3.17% and the healthcare trend rate was changed to 5.9% in 2019 decreasing to 5% in 2028 for the June 30, 2019 measurement period.

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NOTE 17 - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED)

C. Change in the Net OPEB Liability

The changes in the net OPEB liability are as follows:

Total OPEB Plan Fiduciary Net OPEBLiability Net Position Liability/(Asset)

(a) (b) (c) = (a) - (b)Balance at June 30, 2018 (Measurement Date)+A71 6,906,415$ 490,813$ 6,415,602$

Changes Recognized for the Measurement Period:Service cost 271,591 - 271,591 Interest on the total OPEB liability 253,720 - 253,720 Changes of benefit terms - - - Differences between expected and actual experience - - - Changes of assumptions 355,233 - 355,233 Contribution from the employer - 457,669 (457,669) Net investment income - 34,489 (34,489) Administrative expenses - (2,728) 2,728 Benefit payments (457,669) (457,669) -

Net changes during July 1, 2018 to June 30, 2019 422,875 31,761 391,114

Balance at June 30, 2019 (Measurement Date) 7,329,290$ 522,574$ 6,806,716$

Increase (Decrease)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (2.17%) or one percentage point higher (4.17%) than the current discount rate:

Discount Rate Current Discount Rate-1% Discount Rate +1%

7,644,121$ 6,806,716$ 6,096,291$

Plan’s Net OPEB Liability (Asset)

The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were calculated using a healthcare cost trend rate that is one percentage point lower or one percentage point higher than the current discount rate:

1% Decrease Current Trend 1% Increase(4.90% (5.90% (6.90%

Decreasing to 4.0%) Decreasing to 5.0%) Decreasing to 6.0%)Net OPEB Liability 6,269,001$ 6,806,716$ 7,482,088$

Subsequent Events

There were no subsequent events that would materially affect the results presented in this disclosure.

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NOTE 17 - OTHER POSTEMPLOYMENT BENEFITS (OPEB) (CONTINUED) D. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB

For the year ended June 30, 2020, the City recognized OPEB expense of $604,620. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred DeferredOutflows Inflows

of Resources of ResourcesOPEB contributions subsequent to measurement date 510,755$ -$ Differences between actual and expected experience - (676,191) Change in assumptions 1,186,705 - Net differences between projected and actual earnings 1,191

Total 1,698,651$ (676,191)$

The change in assumptions and differences between actual and expected experience are amortized over the expected average remaining service life. The expected average remaining service life for the 2019 measurement period is 4.6 years. $510,755 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability in the year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as OPEB expense as follows:

YearEnding

June 30, Amount2021 101,396$ 2022 101,396 2023 101,394 2024 98,419 2025 86,899

Thereafter 22,201

E. Payable to the OPEB Plan At June 30, 2020, the City had no outstanding amount of contributions to the OPEB plan required for the year ended June 30, 2020.

NOTE 18 - REBATABLE ARBITRAGE The Successor Agency of the former Covina Redevelopment Agency is obligated to calculate arbitrage rebates on all tax allocation bonds. There was no rebatable arbitrage liability.

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NOTE 19 - RELATED PARTY TRANSACTIONS The City entered into an agreement with Covina Irrigating Company (CIC) for the pumping, treating and delivering the water to City reservoirs. During the fiscal year, the City paid $2,716,861 to the Covina Irrigating Company for the services of pumping, treating and delivery of water. NOTE 20 - ENCUMBRANCES The City uses encumbrances to control expenditure commitments for the year and to enhance cash management. Encumbrances represent commitments related to contracts not yet performed and purchase orders not yet filled (executory contracts; and open purchase orders). Commitments for such expenditure of monies are encumbered to reserve a portion of applicable appropriations. Encumbrances still open at year end are not accounted for as expenditures and liabilities but, rather, as restricted or assigned governmental fund balance. As of June 30, 2020, total governmental fund encumbrance balances for the City are as follows: General fund 40,078$ Nonmajor governmental fund 2,818,166

Total governmental funds 2,858,244$

NOTE 21 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY (SACRA) The assets and liabilities of the former Redevelopment Agency were transferred to the Successor Agency of the Covina Redevelopment Agency on February 1, 2012, as a result of the dissolution of the former Redevelopment Agency. The City is acting in a fiduciary capacity for the assets and liabilities. Disclosure related to capital assets and long-term liabilities are as follows: Long-Term Liabilities Long-term liability activity for the year ended June 30, 2020, was as follows:

Balance Balance CurrentJuly 1, 2019 Additions Deletions June 30, 2020 Portion

Advances from City of Covina 2,173,371$ -$ 66,064$ 2,107,307$ -$ Compensated absences 41,220 17,068 11,055 47,233 14,685 Tax allocation bonds 12,791,600 - 2,100,621 10,690,979 2,485,979 Accreted interest 373,140 33,615 384,379 22,376 - Unamortized premium on

tax allocation bonds 984,635 - 115,206 869,429 115,206

Total long-term liabilities, net 16,363,966$ 50,683$ 2,677,325$ 13,737,324$ 2,615,870$

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NOTE 21 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY (SACRA) (CONTINUED) Long-Term Liabilities (Continued) Tax Allocation Revenue Bonds of 2004 Series B On November 1, 2004, the Agency issued $9,610,000 Tax Allocation Revenue Bonds of 2004, Series B. Interest is payable semiannually on June 1 and December 1 of each year at rates of interest ranging from 2.74% to 3.94%. The bonds are taxable and payment of principal on the bonds began December 1, 2005, and they are due on December 1 each year until 2023. The outstanding principal balance as of June 30, 2020 was $1,395,000. Tax Allocation Revenue Refunding Bonds of 2013, Series E On December 24, 2013, the Successor Agency of the former Covina Redevelopment Agency issued (through the County of Los Angeles Redevelopment Refunding Authority) 2013E Tax Allocation Revenue Refunding Bonds in the amount of $12,151,600. The purpose of the issue was to refund and defease the 1997 B Revenue Bonds and 2002 A Revenue Bonds plus accreted interest thereon. The proceeds from this issue plus any reserve funds remaining for the 1997 B and 2002 A bonds was used to fund an escrow account which will be used to redeem the 1997 B and 2002 A bonds on January 22, 2014. The redemption price was equal to 100% of the 1997 B and 101% of the accreted value of the 2002 E. The 2013 bonds are issued as $9,460,000 in serial bonds with a maturity date of December 1, 2023. These bonds carry interest at 3-5%. Also issued was $1,756,600 in Capital Appreciation Bonds with final maturity of December 1, 2020. Interest rates are 3.5-4%. The bonds are secured by tax revenues generated within the project area and as allocated for the payment of the debt by the County of Los Angeles per recognized obligation schedule. As a result of the refunding the Agency realized a net savings in the amount of $3,136,892 and an economic gain (difference between present value of new debt versus old debt) of $1,441,851. The outstanding principal balance of the bonds at June 30, 2020, is $8,860,979. The accreted interest amount outstanding on the Capital appreciation bonds is $22,376. Tax Allocation Revenue Refunding Bonds of 2014, Series E On December 17, 2014, the Successor Agency of the former Covina Redevelopment Agency issued (through the County of Los Angeles Redevelopment Refunding Authority) 2014A Tax Allocation Revenue Refunding Bonds in the amount of $6,985,000. The purpose of the issue was to refund and defease the 1997 A Revenue Bonds and 2004 A Revenue Bonds. The proceeds from this issue plus any reserve funds remaining for the 1997 A and 2004 A bonds was used to fund an escrow account which was used to redeem the 1997 A and 2004 A bonds on January 8, 2015. The redemption price was equal to 100% of the 1997 A Revenue Bonds 2004 A Revenue Bonds. The 2014 bonds were issued as $6,985,000 in serial bonds with a maturity date of December 15, 2023. These bonds carry interest at 2-5%. The bonds are secured by tax revenues generated within the project area and as allocated for the payment of the debt by the County of Los Angeles per recognized obligation schedule.

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NOTE 21 - SUCCESSOR AGENCY TRUST FOR ASSETS OF THE FORMER REDEVELOPMENT AGENCY (SACRA) (CONTINUED) Long-Term Liabilities (Continued) Tax Allocation Revenue Refunding Bonds of 2014, Series E (Continued) As a result of the refunding the Agency realized a net savings in the amount of $2,014,490 and an economic gain (difference between present value of new debt versus old debt) of $464,664. The outstanding principal balance of the bonds at June 30, 2020, is $435,000. Debt Service requirements to maturity with respect to SACRA’s Tax Allocation Bonds are as follows:

FiscalYear Ending

June 30 Principal Interest Total2021 2,485,979$ 499,091$ 2,985,070$ 2022 2,630,000 347,849 2,977,849 2023 2,765,000 211,679 2,976,679 2024 2,810,000 70,944 2,880,944

10,690,979$ 1,129,563$ 11,820,542$

NOTE 22: CONTINGENCIES On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of an outbreak of a new strain of coronavirus (the “COVID-19 outbreak”) and the risks that is posed to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the City’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on the City’s financial condition, liquidity, operations and workforce. The City cannot estimate the length or gravity of the impact of the COVID-19 outbreak at this time; however, if the pandemic continues, it may have a material effect on the City’s results of future operations and financial position in fiscal year 2021.

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NOTE 23: RESTATEMENT OF NET POSITIONS

Governmental Business-type

Activities Activities Totals

Net position at July 1, 2019, as originally reported 55,429,312$ 44,652,266$ 100,081,578$

To allocate the net OPEB liability and relateddeferred outflows and inflows of resources to theEnterprise Funds as of the beginning of the year 1,317,400 (1,317,400) -

Net position at July 1, 2019, as restated 56,746,712$ 43,334,866$ 100,081,578$

Water Sewer Nonmajor Internal Enterprise Enterprise Enterprise Service

Fund Fund Fund Funds

Net position at July 1, 2019, as originally reported 36,784,714$ 7,330,415$ 2,202,120$ (1,030,528)$

To allocate the net OPEB liability and relateddeferred outflows and inflows of resources to theEnterprise and Internal Service Funds as of the beginning of the year (952,938) (205,891) (158,571) (419,836)

Net position at July 1, 2019, as restated 35,831,776$ 7,124,524$ 2,043,549$ (1,450,364)$

NOTE 24: SUBSEQUENT EVENT On December 1, 2020, the City through a private placement financed debt in the amount of $18,883,578 to provide $5,000,000 in funds for capital projects related to the water enterprise, deposit $13,284,326 in an escrow fund to refund in advance the 2010 Water Revenue Bonds with the remaining funds were used for costs of issuance. The interest rate on the debt is 1.97% with interest and principal payable April 1 and October 1 each year commencing April 1, 2021 through October 1, 2040.

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REQUIRED SUPPLEMENTARY INFORMATION

Page 98 of 200


Page 99 of 200

Fiscal year ended June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015Measurement period June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014Total Pension Liability:

Service cost 1,380,689$ 1,347,039$ 1,152,992$ 1,486,092$ 1,420,544$ 1,399,079$ Interest on total pension liability 6,507,596 6,146,087 5,977,026 6,066,839 5,848,966 5,596,243 Differences between expected and

actual experience 2,271,369 90,424 (3,886,390) (362,755) 269,486 - Changes in assumptions - (479,050) 5,024,331 - (1,428,592) - Changes in benefits - - - - - - Benefit payments, including refunds

of employee contributions (4,817,247) (4,633,255) (4,314,593) (4,154,693) (4,028,300) (3,984,640)

Net Change in Total Pension Liability 5,342,407 2,471,245 3,953,366 3,035,483 2,082,104 3,010,682

Total Pension Liability - Beginning of Year 90,462,241 87,990,996 84,037,630 81,002,147 78,920,043 75,909,361

Total Pension Liability - End of Year (a) 95,804,648$ 90,462,241$ 87,990,996$ 84,037,630$ 81,002,147$ 78,920,043$

Plan Fiduciary Net Position:Contributions - employer 2,386,884$ 2,064,731$ 1,424,175$ 1,410,961$ 1,599,026$ 1,453,480$ Contributions - employee 656,805 666,102 565,326 578,334 781,508 865,295 Plan to plan resource movement - (148) 24,693 - 9,481 - Net investment income 4,117,352 5,103,206 6,234,088 296,745 1,328,803 8,890,960 Benefit payments (4,817,247) (4,633,255) (4,314,593) (4,154,693) (4,028,300) (3,984,640) Administrative expense (45,355) (274,830) (84,138) (35,892) (66,233) -

Net Change in Plan Fiduciary Net Position 2,298,439 2,925,806 3,849,551 (1,904,545) (375,715) 7,225,095

Plan Fiduciary Net Position - Beginning of Year 63,762,991 60,837,185 56,987,634 58,892,179 59,267,894 52,042,799

Plan Fiduciary Net Position - End of Year (b) 66,061,430$ 63,762,991$ 60,837,185$ 56,987,634$ 58,892,179$ 59,267,894$

Net Pension Liability - Ending (a)-(b) 29,743,218$ 26,699,250$ 27,153,811$ 27,049,996$ 22,109,968$ 19,652,149$

Plan fiduciary net position as a percentage of the total pension liability 68.95% 70.49% 69.14% 67.81% 72.70% 75.10%

Covered payroll 7,646,268 6,130,981 8,782,015$ 8,497,600$ 7,967,419$ 7,967,419$

Net pension liability as percentage of covered payroll 388.99% 435.48% 309.20% 318.33% 277.50% 246.66%

Notes to Schedule:

Benefit Changes:

Changes in Assumptions:From fiscal year June 30, 2015 to June 30, 2016:

From fiscal year June 30, 2016 to June 30, 2017:There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:There were no significant changes in assumptions.

There were no changes in assumptions.

* Fiscal year 2015 was the first year of implementation and therefore only six years are shown

From fiscal year June 30, 2019 to June 30, 2020:

There were no changes in benefits.

GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction forpension plan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discountrate of 7.65% used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense.

CITY OF COVINA

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

Last Ten Fiscal Years*

75Page 100 of 200

Fiscal year ended June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015

Actuarially determined contribution 2,794,762$ 2,386,725$ 1,424,175$ 1,430,571$ 1,599,026$ 1,453,480$

Contributions in relation to theactuarially determined contributions (2,794,762) (2,386,725) (2,078,674) (1,430,571) (1,599,026) (1,453,480)

Contribution deficiency (excess) -$ -$ (654,499)$ -$ -$ -$

Covered payroll 7,996,049$ 7,646,268$ 6,130,981$ 8,782,015$ 8,497,600$ 7,967,419$

Contributions as a percentage of covered payroll 34.95% 31.21% 33.90% 16.29% 18.82% 18.24%

Notes to Schedule:

Valuation Date June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 June 30, 2013 June 30, 2012

Methods and Assumptions Used to Determine Contribution Rates:Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry ageAmortization method (1) (1) (1) (1) (1) (1)Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year

SmoothedMarket Method

Inflation 2.75% 2.75% 2.75% 2.75% 2.75% 2.75%Salary increases (2) (2) (2) (2) (2) (2)Investment rate of return 7.375% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)Retirement age (4) (4) (4) (4) (4) (4)Mortality (5) (5) (5) (5) (5) (5)

Level percentage of payroll, closedDepending on age, service and type of employmentNet of pension plan investment expense, including inflationThe valuation for June 30, 2012, 2013, 2014 and 2015 (applicable to fiscal years ended June 30, 2015, 2016, 2017 and 2018,

respectively) included the same actuarial assumptions; 50 years (2%@55, 2.7%@55), 52 years (2%@62)Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study

adopted by the CalPERS Board.

* Fiscal year 2015 was the first year of implementation and therefore only six years are shown

CITY OF COVINA

SCHEDULE OF CONTRIBUTIONS – CALPERS


(1)

(5)

(2)(3)(4)

76Page 101 of 200


Measurement period June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014

Plan’s proportion of the net pension liability 0.56627% 0.54852% 0.56064% 0.56696% 0.46197% 0.41430%

Plan’s proportionate share of the net pension liability 35,349,515$ 32,026,302$ 30,950,899$ 26,302,740$ 19,035,092$ 15,540,223$

Plan’s covered payroll 6,548,655$ 6,325,051$ 6,325,051$ 6,672,936$ 6,433,232$ 6,575,024$

Plan’s proportionate share of the net pension liability as a percentage of covered payroll 539.80% 506.34% 489.34% 394.17% 295.89% 236.35%

Plan’s proportionate share of the fiduciary net position as a percentage of the Plan’s total pension liability 75.26% 85.14% 85.14% 79.48% 81.50% 84.45%

Notes to Schedule:

Benefit Changes:There were no changes in benefits.

Changes in Assumptions:From fiscal year June 30, 2015 to June 30, 2016:

From fiscal year June 30, 2016 to June 30, 2017:There were no changes in assumptions.

From fiscal year June 30, 2017 to June 30, 2018:The discount rate was reduced from 7.65% to 7.15%.

From fiscal year June 30, 2018 to June 30, 2019:There were no significant changes in assumptions.

There were no changes in assumptions.

* Fiscal year 2015 was the first year of implementation and therefore only six years are shown.

From fiscal year June 30, 2019 to June 30, 2020:

CITY OF COVINA

SCHEDULE OF PROPORTIONATE SHARE OF THE NET PENSION LIABILITY


GASB 68, paragraph 68 states that the long-term expected rate of return should be determined net of pension plan investment expense but without reduction for pensionplan administrative expense. The discount rate of 7.50% used for the June 30, 2014 measurement date was net of administrative expenses. The discount rate of 7.65%used for the June 30, 2015 measurement date is without reduction of pension plan administrative expense

Safety

77Page 102 of 200


Contractually required contribution (actuarially determined) 2,758,911$ 2,360,587$ 1,969,480$ 1,730,321$ 1,549,717$ 1,241,075$

Contributions in relation to theactuarially determinedcontributions (2,758,911) (2,360,587) (1,969,480) (1,730,321) (1,549,717) (1,241,075)

Contribution deficiency (excess) -$ -$ -$ -$ -$ -$

Covered payroll 6,490,821$ 6,548,655$ 6,325,051$ 6,325,051$ 6,672,936$ 6,433,232$

Contributions as a percentage of covered payroll 42.50% 36.05% 31.14% 27.36% 23.22% 19.29%

Notes to Schedule:

Valuation Date 6/30/2017 6/30/2016 6/30/2015 6/30/2014 6/30/2013 6/30/2012

Methods and Assumptions Used to Determine Contribution Rates:Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry ageAmortization method (1) (1) (1) (1) (1) (1)Asset valuation method Fair Value Fair Value Fair Value Fair Value Fair Value 15-Year

SmoothedMarket Method

Inflation 2.75% 2.75% 2.75% 2.75% 2.75% 2.75%

Salary increases (2) (2) (2) (2) (2) (2)Investment rate of return 7.375% (3) 7.375% (3) 7.50% (3) 7.50% (3) 7.50% (3) 7.50% (3)

Retirement age (4) (4) (4) (4) (4) (4)Mortality (5) (5) (5) (5) (5) (5)

(1) Level percentage of payroll, closed(2) Depending on age, service and type of employment(3) Net of pension plan investment expense, including inflation(4) 3% at 50/55 and 2.7% at 57(5) Mortality assumptions are based on mortality rates resulting from the most recent CalPERS Experience Study

adopted by the CalPERS Board.

* Fiscal year 2015 was the first year of implementation and therefore only six years are shown.

CITY OF COVINA

SCHEDULE OF CONTRIBUTIONS


Safety

78Page 103 of 200

Fiscal year end 6/30/2020 6/30/2019 6/30/2018

Measurement date 6/30/2019 6/30/2018 6/30/2017

Total OPEB Liability:Service cost 271,591$ 173,634$ 155,856$ Interest on total OPEB liability 253,720 285,949 287,858 Difference between expected and actual experience - (963,933) - Change in assumptions and other inputs 355,233 1,264,415 - Benefit payments, including refunds and the

implied subsidy benefit payments (457,669) (411,596) (413,635) Net Change in Total OPEB Liability 422,875 348,469 30,079

Total OPEB Liability - Beginning of Year 6,906,415 6,557,946 6,527,867 Total OPEB Liability - End of Year (a) 7,329,290 6,906,415 6,557,946

Plan Fiduciary Net Position:Contributions - employer 457,669 411,596 413,635 Net investment income 34,489 9,519 18,600 Administrative expenses (2,728) (2,630) (2,372) Benefit payments, including refunds and the

implied subsidy benefit payments (457,669) (411,596) (413,635) Net Change in Plan Fiduciary Net Position 31,761 6,889 16,228

Plan Fiduciary Net Position - Beginning of Year 490,813 483,924 467,696 Plan Fiduciary Net Position - End of Year (b) 522,574 490,813 483,924

Net OPEB Liability - Ending (a)-(b) 6,806,716$ 6,415,602$ 6,074,022$

Plan fiduciary net position as a percentage of thetotal OPEB liability 7.13% 7.11% 7.38%

Covered - employee payroll 17,042,879 13,316,004 12,959,615$

Net OPEB liability as percentage of covered - employee payroll 39.94% 48.18% 46.87%

Notes to Schedule:

Benefit Changes:

Changes in Assumptions:

* Fiscal year 2018 was the first year of implementation and therefore only three years are shown.

The fiscal year ended June 30, 2018 is the first year of implementation. For fiscal year ended June 30, 2020, discount rate was changed to3.17% from 3.65%, inflation rate remained 3.0% and health care trend was changed to 5.9% in 2019 decreasing to 5% in 2028.

There were no changes in benefits.

CITY OF COVINA

OTHER POSTEMPLOYMENT BENEFITS (OPEB)SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS


79Page 104 of 200

Fiscal year ended 6/30/2020 6/30/2019 6/30/2018

Actuarially determined contribution 511,353$ 497,668$ 409,995$

Contributions in relation to the actuarially determined contributions (511,353) (497,668) (409,995)

Contribution deficiency (excess) -$ -$ -$

Covered employee payroll 18,127,870 17,042,879 13,316,004$

Contributions as a percentage of covered employee payroll 2.82% 2.92% 3.08%

Notes to Schedule:

Valuation Date 6/30/2018 6/30/2018 6/30/2017

Methods and Assumptions Used to Determine Contribution Rates:Actuarial cost methodAmortization method

Discount rate 3.17% 3.65% 4.50%Inflation 3.00% 3.00% 2.75%Mortality rate (1) (1) (1)Healthcare trend rate (2) (2) (2)

(1) 2014 CalPERS Mortality Rate for Active Safety, Retired Safety and Active Miscellaneous(2) 5.9% for 2019, trending to 5% by 2028 and later

* Fiscal year 2018 was the first year of implementation and therefore only three years are shown.

CITY OF COVINA

OTHER POSTEMPLOYMENT BENEFITS (OPEB)SCHEDULE OF CONTRIBUTIONS


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Variance with

Final Budget

Positive

Original Final Actual (Negative)

BUDGETARY FUND BALANCE, JULY 1 10,030,939$ 10,030,939$ 10,030,939$ -$

Resources (inflows):

Property taxes 12,653,000 13,003,000 13,652,273 649,273

Sales tax, intergovernmental 14,235,000 14,635,000 15,875,886 1,240,886

Transient occupancy taxes 240,000 240,000 130,831 (109,169)

Property transfer taxes 200,000 200,000 212,485 12,485

Business license taxes 342,000 342,000 345,952 3,952

Utility user taxes 4,600,000 4,500,000 4,523,187 23,187

Franchise taxes 1,520,000 1,920,000 1,910,641 (9,359)

Licenses and permits 1,190,800 1,190,800 999,449 (191,351)

Intergovernmental 700,960 712,174 782,968 70,794

Charges for services 4,211,654 4,256,954 3,659,558 (597,396)

Fines and forfeits 955,000 955,000 907,080 (47,920)

Investment earnings 156,000 156,000 639,433 483,433 Sale of property - - 42,837 42,837 Miscellaneous 961,230 626,111 710,713 84,602

Transfers in 104,131 119,131 101,000 (18,131)

Amounts available for appropriation 52,100,714 52,887,108 54,525,232 1,638,124

Charges to appropriations (outflows):

Current:

General government 1,586,122 1,651,122 2,593,801 (942,679)

Public safety 30,481,057 30,656,591 29,184,458 1,472,133

Public works 2,579,890 2,656,522 2,292,017 364,505

Culture and recreation 4,468,214 4,518,610 3,834,866 683,744

Community development 2,100,747 2,384,955 2,238,650 146,305

Debt service:

Principal retirement 100,341 100,341 - 100,341

Interest and fiscal charges 458 458 2,375 (1,917)

Transfers out 104,312 104,312 106,606 (2,294)

Total charges to appropriation 41,421,141 42,072,911 40,252,773 1,820,138

BUDGETARY FUND BALANCE, JUNE 30 10,679,573$ 10,814,198$ 14,272,459$ 3,458,261$

CITY OF COVINA

BUDGETARY COMPARISON SCHEDULEGENERAL FUND


Budgeted Amounts

See accompanying note to required supplementary information.81Page 106 of 200

Variance withFinal Budget

Final Positive Budget Actual (Negative)

BUDGETARY FUND BALANCE, JULY 1 3,430,843$ 3,430,843$ -$ Resources (inflows):

Intergovernmental 616,562 589,962 (26,600) Investment earnings 31,317 47,737 16,420

Amounts available for appropriation 4,078,722 4,068,542 (10,180)

Charges to appropriations (outflows):Capital outlay 3,652,007 3,656,792 (4,785) Debt service:

Principal retirement 180,000 180,000 - Interest and fiscal charges 191,438 190,947 491

Total charges to appropriation 4,023,445 4,027,739 (4,294)

BUDGETARY FUND BALANCE, JUNE 30 55,277$ 40,803$ (14,474)$

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULEMEASURE R SPECIAL REVENUE FUND


See accompanying note to required supplementary information.82Page 107 of 200

CITY OF COVINA Note to Required Supplementary Information June 30, 2020

83

NOTE 1 - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information

The City follows these procedures in establishing the budgetary data reflected in the financial statements: 1. City departments submit budget and service requests to the City Manager. The City Manager prepares a

recommended budget to be presented to the City Council.

2. The annual budget is adopted by the City Council on or before June 30 of each fiscal year after holding public hearings to receive input for the general operation of the City. The operating budget includes proposed expenditures and the means of financing them.

3. The appropriated budget is prepared by fund, program and activity. Departments may make appropriation

transfers within activities. The City Manager is authorized to make appropriation transfers between activities within funds excluding the contingency appropriation. The City Council approves total budgeted appropriations and any amendments between funds and the use of contingency appropriation. This appropriated budget covers City expenditures in all governmental funds. Actual expenditures may not exceed budgeted appropriations at the fund level. Budget figures used in the accompanying financial statements are the original budget including prior year carryovers and the final budget including current year amendments.

4. Formal budgetary integration is employed as a management control device during the year. Commitments

for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Encumbrances at year end lapse, and then are added to the following year’s budgeted appropriations.

5. Annual budgets for governmental funds are adopted on a basis consistent with accounting principles

generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items. No budgetary comparisons are presented for the proprietary funds, as the City is not legally required to adopt budgets for this fund type.

6. Appropriation for capital projects and certain grants and contributions authorized but not constructed or

completed during the year lapse at year end, and then are included as part of appropriations in the following years’ annual budget.

7. Under Article XIIIB of the California Constitution (the Gann Spending Limitation), the City is restricted

as to the amount of annual appropriations from proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates, revised fee schedules or other refund arrangements.

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SUPPLEMENTARY INFORMATION

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Other Governmental Funds Non-Major Governmental Funds

85

Special revenue funds account for revenues derived from specific taxes or other earmarked revenue sources. They are usually required by statute or local ordinance and /or resolution to finance particular functions, or activities. Non-major special revenue governmental funds of the City are as follows: Community Development Block Grant Fund is a special revenue fund that accounts for the funding from the Department of Housing and Urban Development (HUD) in the form of a Community Block Grant (CDBG) program. The program has specific federal guidelines and all CDBG fund expenditures are monitored for compliance with both federally mandated rules and regulations and County of Los Angeles regulations. Proposition A Transit Fund accounts for the receipts of the City’s share of the 1/2 cent sales tax levied in Los Angeles County for local transit uses. Law Enforcement Fund accounts for federal and state local law enforcement grants and subventions to finance certain police activities. Narcotic Seizure Fund accounts for receipts and disbursements associated with the federal, state and local narcotic seizure programs. State Gas Tax Fund accounts for money apportioned by state statutes of the State of California to provide financing for street maintenance and improvements. Proposition C Local Return Fund accounts for financial activities for the City’s share of Proposition C monies; designated for transportation related activities. Air Quality Improvement Fund accounts for the motor vehicle fee for air and environmental improvements. Municipal Parking District Fund accounts for receipts and expenditures for electricity, lot maintenance and engineering services in the various municipal parking lots. Lighting Assessment District Fund accounts for special assessment collections from benefited properties for street lighting energy and maintenance. Landscaping Assessment District Fund accounts for special assessment collections from benefited properties for landscape maintenance activities. Community Facilities District Fund accounts for special assessment collections from benefited properties for community facilities maintenance activities. Shoppers Lane Parking District Fund accounts for certain business tax registrations to finance parking maintenance and improvements in Shoppers Lane. Measure M Fund accounts for monies received from Measure M allocation, which can be used to major street resurfacing, rehabilitation and reconstruction; pothole repair; left turn signals; bikeway; pedestrian improvements; streetscapes; signal synchronizations; and transit operations. TDA Grant Fund accounts for monies received from the California State Transit Development Act of 1971 on a per capita basis to California cities for transit and non-transit related purposes that comply with regional transition plans, which can be used for construction of pedestrian and bicycle facilities. Other Grants Fund accounts for the various state grant monies for various programs of the City.

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Other Governmental Funds Non-Major Governmental Funds

87

Road Maintenance and Rehabilitation Act Fund accounts for the deferred maintenance on the state highway system and the local street and road system. PEG access Television Fund accounts for the fees received from the cable operators for administration and improvement to any public, educational, and government access television. Measure W accounts for the tax collected to provide a safe, clean water program. Housing Authority Fund administers the housing assets, liabilities, duties, and obligations related to the housing activities retained by the City following the dissolution of the Covina Redevelopment Agency. This fund receives the majority of its revenues form collections and interest on loans. Capital projects funds are used to finance and account for the acquisition and construction of major capital facilities other than those financed by other governmental type and proprietary funds. Non-major capital projects governmental funds of the City are as follows: General Projects Fund accounts for major infrastructure and general improvements not accounted for in other governmental and proprietary funds. Covina Revitalization Projects Fund accounts for the proceeds from the issuance of 2004 Taxable Tax Allocation Bonds used for the Covina Revitalization Project No. One project cost. Park Development Fund accounts for federal and state grant monies used for parkland acquisition and development. Transportation Fund accounts for one-half percent sales tax to finance transportation programs and improvements. Financial resources include various grants from State and Federal funding sources to provide enhanced transit opportunities.

Page 115 of 200

CommunityDevelopment LawBlock Grant Proposition A Enforcement

Cash and investments 2,607$ 2,592,342$ 229,075$ Receivables:

Accounts - 6,461 - Loans 280,468 - -

Due from other governments 29,318 - 11,795 Due from successor agency - - - Prepaid expenditures - - -

TOTAL ASSETS 312,393$ 2,598,803$ 240,870$

LIABILITIES:Accounts payable 31,313$ 288,532$ 17,872$ Accrued liabilities 612 3,705 669 Deposits payable - - - Due to other governments 280,468 - - Due to other funds - - - Unearned revenue - - -

TOTAL LIABILITIES 312,393 292,237 18,541

DEFERRED INFLOWS OF RESOURCES:Unavailable revenue - - 11,795

FUND BALANCES (DEFICITS):Nonspendable - - - Restricted for:

Redevelopment and housing - - - Community development - - - Law enforcement - - 229,945 Transportation and street projects - 2,306,566 - Air quality projects - - - Assessment districts - - - Culture and recreation - - - Other capital projects - - -

Unassigned - - (19,411)

TOTAL FUND BALANCES (DEFICITS) - 2,306,566 210,534

TOTAL LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES 312,393$ 2,598,803$ 240,870$

CITY OF COVINA

COMBINING BALANCE SHEETNON-MAJOR GOVERNMENTAL FUNDS

June 30, 2020

ASSETS

LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES

88Page 116 of 200

Air Municipal LightingNarcotics State Gas Quality Parking AssessmentSeizure Tax Proposition C Improvement District District

189,089$ 799,443$ 1,729,815$ 96,616$ 763,268$ 41,597$

- - - 15,297 2,228 - - - - - - - - - - - 2,194 1,304 - - - - - - - - - - - -

189,089$ 799,443$ 1,729,815$ 111,913$ 767,690$ 42,901$

4$ 6,285$ 17,805$ -$ 5,488$ 16,070$ - - 44,473 - 201 - - - - - - 9,625 - - - - - - - - - - - - - - - - - -

4 6,285 62,278 - 5,689 25,695

- - - - - -

- - - - - -

- - - - - - - - - - - -

189,085 - - - - - - 793,158 1,667,537 - - - - - - 111,913 - - - - - - 762,001 17,206 - - - - - - - - - - - - - - - - - -

189,085 793,158 1,667,537 111,913 762,001 17,206

189,089$ 799,443$ 1,729,815$ 111,913$ 767,690$ 42,901$

89Page 117 of 200

Landscaping Community Shoppers LaneAssessment Facilities Parking

District District District

Cash and investments 336,818$ 176,255$ 18,301$ Receivables:

Accounts - - 405 Loans - - -

Due from other governments 1,169 5,092 - Due from successor agency - - - Prepaid expenditures - - -

TOTAL ASSETS 337,987$ 181,347$ 18,706$

LIABILITIES:Accounts payable 6,102$ -$ -$ Accrued liabilities 2,328 - - Deposits payable 9,625 3,500 - Due to other governments - - - Due to other funds - - - Unearned revenue - - 602

TOTAL LIABILITIES 18,055 3,500 602

DEFERRED INFLOWS OF RESOURCES:Unavailable revenue - - -

FUND BALANCES (DEFICITS):Nonspendable - - - Restricted for:

Redevelopment and housing - - - Community development - - - Law enforcement - - - Transportation and street projects - - - Air quality projects - - - Assessment districts 319,932 177,847 18,104 Culture and recreation - - - Other capital projects - - -

Unassigned - - -

TOTAL FUND BALANCES (DEFICITS) 319,932 177,847 18,104

TOTAL LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES 337,987$ 181,347$ 18,706$

CITY OF COVINA


(CONTINUED)

June 30, 2020

ASSETS


90Page 118 of 200

Road PEGTDA Other Rehabilitation Access

Measure M Grant Grants and Maintenance Television

1,120,301$ -$ -$ 1,669,090$ 397,048$

- 6,128 35,415 - 19,042 - - - - - - - 102,961 129,269 - - - - - - - - 1,131 - -

1,120,301$ 6,128$ 139,507$ 1,798,359$ 416,090$

42,337$ -$ 5,088$ -$ 2,412$ 6,202 - 2,524 - -

- - - - - - - - - - - 6,128 54,570 - - - - - - -

48,539 6,128 62,182 - 2,412

- - 45,237 - -

- - 1,131 - -

- - - - - - - 63,771 - - - - - - -

1,071,762 - - 1,798,359 - - - - - - - - - - - - - - - 413,678 - - - - - - - (32,814) - -

1,071,762 - 32,088 1,798,359 413,678

1,120,301$ 6,128$ 139,507$ 1,798,359$ 416,090$

91Page 119 of 200

TotalHousing Special

Authority Measure W Revenue Funds

Cash and investments 3,902,988$ -$ 14,064,653$ Receivables:

Accounts - - 84,976 Loans 487 - 280,955

Due from other governments - - 283,102 Due from successor agency 415,219 - 415,219 Prepaid expenditures 28 - 1,159

TOTAL ASSETS 4,318,722$ -$ 15,130,064$

LIABILITIES:Accounts payable 27,776$ 18,599$ 485,683$ Accrued liabilities 6,386 - 67,100 Deposits payable 9,387 - 32,137 Due to other governments - - 280,468 Due to other funds - 225,724 286,422 Unearned revenue - - 602

TOTAL LIABILITIES 43,549 244,323 1,152,412

DEFERRED INFLOWS OF RESOURCES:Unavailable revenue - - 57,032

FUND BALANCES (DEFICITS):Nonspendable 28 - 1,159 Restricted for:

Redevelopment and housing 4,275,145 - 4,275,145 Community development - - 63,771 Law enforcement - - 419,030 Transportation and street projects - - 7,637,382 Air quality projects - - 111,913 Assessment districts - - 1,295,090 Culture and recreation - - 413,678 Other capital projects - -

Unassigned - (244,323) (296,548)

TOTAL FUND BALANCES (DEFICITS) 4,275,173 (244,323) 13,920,620

TOTAL LIABILITIES, DEFERRED INFLOWS OFRESOURCES AND FUND BALANCES 4,318,722$ -$ 15,130,064$

ASSETS


CITY OF COVINA


(CONTINUED)

June 30, 2020

92Page 120 of 200

TotalCovina Total Non-Major

General Revitalization Park Capital GovernmentalCapital Projects Development Transportation Projects Funds

1,764,499$ 1,998,485$ 373,557$ -$ 4,136,541$ 18,201,194$

- - - - - 84,976 - - - - - 280,955 - - 190,000 - 190,000 473,102

- - 415,219 - - - - - 1,159

1,764,499$ 1,998,485$ 563,557$ -$ 4,326,541$ 19,456,605$

57,769$ -$ 546,773$ -$ 604,542$ 1,090,225$ - - - - - 67,100

49,154 - 362,448 - 411,602 443,739 - - - - - 280,468 - - - - - 286,422 - - - - - 602

106,923 - 909,221 - 1,016,144 2,168,556

- - 190,000 - 190,000 247,032

- - - - - 1,159

- - - - - 4,275,145 - 1,998,485 - - 1,998,485 2,062,256

119,964 - - - 119,964 538,994 722,348 - - - 722,348 8,359,730

- - - - - 111,913 - - - - - 1,295,090

263,725 - - - 263,725 677,403 551,539 - - - 551,539 551,539

- - (535,664) - (535,664) (832,212)

1,657,576 1,998,485 (535,664) - 3,120,397 17,041,017

1,764,499$ 1,998,485$ 563,557$ -$ 4,326,541$ 19,456,605$

93Page 121 of 200

CommunityDevelopment LawBlock Grant Proposition A Enforcement

REVENUES:Property taxes -$ -$ -$ Business license taxes - - - Intergovernmental 292,455 974,228 176,432 Charges for services - 142,684 - Special assessments - - - Investment earnings - 60,187 4,628 Miscellaneous - 10,377 -

TOTAL REVENUES 292,455 1,187,476 181,060


Public safety - - 89,926 Public works - - - Culture and recreation - - - Community development - - - Transit - 1,734,472 - Redevelopment and housing 108,641 - -

Capital outlay - - - Principal retirement 125,000 - - Interest 58,814 - -

TOTAL EXPENDITURES 292,455 1,734,472 89,926

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES - (546,996) 91,134

OTHER FINANCING SOURCES (USES):Transfers in - - - Transfers out - - -

TOTAL OTHER FINANCING SOURCES (USES) - - -

NET CHANGE IN FUND BALANCES - (546,996) 91,134

FUND BALANCES (DEFICITS) - BEGINNING OF YEAR - 2,853,562 119,400

FUND BALANCES (DEFICITS) - END OF YEAR -$ 2,306,566$ 210,534$

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCES - OTHER SPECIAL REVENUE FUNDS


94Page 122 of 200

Air Municipal LightingNarcotics State Gas Quality Parking AssessmentSeizure Tax Proposition C Improvement District District

-$ -$ -$ -$ 160,547$ -$ - - - - - -

17,426 1,108,300 787,743 104,560 - - - - 37,960 - 82,102 - - - - - - 130,427

4,244 18,341 37,307 1,924 620 - - - - - - -

21,670 1,126,641 863,010 106,484 243,269 130,427

14,897 - - - - - - 1,428,508 - 100,270 217,758 235,910 - - - - - - - - - - - - - - - - - - - - - - - - - - 515,585 - - - - - - - - - - - - - - -

14,897 1,428,508 515,585 100,270 217,758 235,910

6,773 (301,867) 347,425 6,214 25,511 (105,483)

- - - - - 100,000 - - - - - -

- - - - - 100,000

6,773 (301,867) 347,425 6,214 25,511 (5,483)

182,312 1,095,025 1,320,112 105,699 736,490 22,689

189,085$ 793,158$ 1,667,537$ 111,913$ 762,001$ 17,206$

95Page 123 of 200

Landscaping Community Shoppers LaneAssessment Facilities Parking

District District DistrictREVENUES:

Property taxes -$ -$ -$ Business license taxes - - 1,168 Intergovernmental - - - Charges for services - - 9,648 Special assessments 193,021 176,053 - Investment earnings - - - Miscellaneous - - -

TOTAL REVENUES 193,021 176,053 10,816


Public safety - - - Public works 160,250 826 7,717 Culture and recreation - - - Community development - - - Transit - - - Redevelopment and housing - - -

Capital outlay - - - Principal retirement - - - Interest - - -

TOTAL EXPENDITURES 160,250 826 7,717

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 32,771 175,227 3,099

OTHER FINANCING SOURCES (USES):Transfers in - - - Transfers out - (86,000) -

TOTAL OTHER FINANCING SOURCES (USES) - (86,000) -

NET CHANGE IN FUND BALANCES 32,771 89,227 3,099

FUND BALANCES (DEFICITS) - BEGINNING OF YEAR 287,161 88,620 15,005

FUND BALANCES (DEFICITS) - END OF YEAR 319,932$ 177,847$ 18,104$

CITY OF COVINA


(CONTINUED)


96Page 124 of 200

Road PEGTDA Other Maintenance and Access

Measure M Grant Grants Rehabilitation Television

-$ -$ -$ -$ -$ - - - - -

663,774 6,128 314,794 846,526 - - - - - 79,736 - - - - -

22,685 - - 30,606 - - - 1,040 - -

686,459 6,128 315,834 877,132 79,736

- - 83,632 - - 30,104 884 -

- - 73,739 - 17,660 - - 9,125 - - - - - - - - - - - -

465,583 10,388 16,690 - - - - - - - - - - - -

465,583 10,388 213,290 884 17,660

220,876 (4,260) 102,544 876,248 62,076

- - - - - - - - - -

- - - - -

220,876 (4,260) 102,544 876,248 62,076

850,886 4,260 (70,456) 922,111 351,602

1,071,762$ -$ 32,088$ 1,798,359$ 413,678$

97Page 125 of 200

TotalHousing SpecialAuthority Measure W Revenue Funds

REVENUES:Property taxes -$ -$ 160,547$ Business license taxes - - 1,168 Intergovernmental 2,925 - 5,295,291 Charges for services - - 352,130 Special assessments - - 499,501 Investment earnings 502,816 - 683,358 Miscellaneous - - 11,417

TOTAL REVENUES 505,741 - 7,003,412


Public safety - - 188,455 Public works - - 2,182,227 Culture and recreation - - 91,399 Community development - - 9,125 Transit - - 1,734,472 Redevelopment and housing 458,699 - 567,340

Capital outlay - 244,323 1,252,569 Principal retirement - - 125,000 Interest - - 58,814

TOTAL EXPENDITURES 458,699 244,323 6,209,401

EXCESS OF REVENUES OVER(UNDER) EXPENDITURES 47,042 (244,323) 794,011

OTHER FINANCING SOURCES (USES):Transfers in 6,606 - 106,606 Transfers out (15,000) - (101,000)

TOTAL OTHER FINANCING SOURCES (USES) (8,394) - 5,606

NET CHANGE IN FUND BALANCES 38,648 (244,323) 799,617

FUND BALANCES (DEFICITS) - BEGINNING OF YEAR 4,236,525 - 13,121,003

FUND BALANCES (DEFICITS) - END OF YEAR 4,275,173$ (244,323)$ 13,920,620$

CITY OF COVINA


(CONTINUED)


98Page 126 of 200

TotalCovina Total Non-Major

General Revitalization Park Capital GovernmentalCapital Projects Development Transportation Projects Funds

-$ -$ -$ -$ -$ 160,547$ - - - - - 1,168

277,590 28,813 29,253 1,483,305 1,818,961 7,114,252 - - - - - 352,130

915,116 - - - 915,116 1,414,617 - 59,970 - - 59,970 743,328

16,558 - - - 16,558 27,975

1,209,264 88,783 29,253 1,483,305 2,810,605 9,814,017

- - - - - 188,455 - - - - - 2,182,227 - - - - - 91,399 - - - - - 9,125 - - - - - 1,734,472 - - - - - 567,340

214,892 170,045 1,664,158 26,997 2,076,092 3,328,661 - - - - - 125,000 - - - - - 58,814

214,892 170,045 1,664,158 26,997 2,076,092 8,285,493

994,372 (81,262) (1,634,905) 1,456,308 734,513 1,528,524

- - 987,768 - 987,768 1,094,374 - (987,768) - - (987,768) (1,088,768)

- (987,768) 987,768 - - 5,606

994,372 (1,069,030) (647,137) 1,456,308 734,513 1,534,130

663,204 3,067,515 111,473 (1,456,308) 2,385,884 15,506,887

1,657,576$ 1,998,485$ (535,664)$ -$ 3,120,397$ 17,041,017$

99Page 127 of 200



BUDGETARY FUND BALANCE, JULY 1 -$ -$ -$ Resources (inflows):

Intergovernmental 559,236 292,455 (266,781)

Amounts available for appropriation 559,236 292,455 (266,781)

Charges to appropriations (outflows):Redevelopment and housing 373,236 108,641 264,595 Debt service:

Principal 82,935 125,000 (42,065) Interest and fiscal charges 121,065 58,814 62,251

Total charges to appropriation 577,236 292,455 284,781

BUDGETARY FUND BALANCE, JUNE 30 (18,000)$ -$ 18,000$

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULE


COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM SPECIAL REVENUE FUND

100Page 128 of 200




Intergovernmental 990,983 974,228 (16,755) Charges for services 276,199 142,684 (133,515) Investment earnings 10,800 60,187 49,387 Miscellaneous - 10,377 10,377


Charges to appropriations (outflows):Transit 2,954,891 1,734,472 1,220,419

Total charges to appropriation 2,954,891 1,734,472 1,220,419

BUDGETARY FUND BALANCE, JUNE 30 1,176,653$ 2,306,566$ 1,129,913$

CITY OF COVINA


PROPOSITION A SPECIAL REVENUE FUND


101Page 129 of 200



BUDGETARY FUND BALANCE, JULY 1 119,400$ 119,400$ -$ Resources (inflows):

Intergovernmental 228,363 176,432 (51,931) Investment earnings - 4,628 4,628


Charges to appropriations (outflows):Public Safety 201,585 89,926 111,659


BUDGETARY FUND BALANCE, JUNE 30 146,178$ 210,534$ 64,356$

CITY OF COVINA


LAW ENFORCEMENT SPECIAL REVENUE FUND


102Page 130 of 200




Intergovernmental - 17,426 17,426 Investment earnings - 4,244 4,244

Amounts available for appropriation 182,312 203,982 21,670

Charges to appropriations (outflows):Public safety 14,938 14,897 41

Total charges to appropriation 14,938 14,897 41


CITY OF COVINA


NARCOTICS SEIZURE SPECIAL REVENUE FUND


103Page 131 of 200




Intergovernmental 1,078,595 1,108,300 29,705 Investment earnings 10,714 18,341 7,627

Amounts available for appropriation 2,184,334 2,221,666 37,332

Charges to appropriations (outflows):Public works 2,230,605 1,428,508 802,097

Total charges to appropriation 2,230,605 1,428,508 802,097

BUDGETARY FUND BALANCE, JUNE 30 (46,271)$ 793,158$ 839,429$

CITY OF COVINA


STATE GAS TAX SPECIAL REVENUE FUND


104Page 132 of 200




Intergovernmental 821,994 787,743 (34,251) Charges for services 37,958 37,960 2 Investment earnings 12,308 37,307 24,999


Charges to appropriations (outflows):Capital outlay 1,773,538 515,585 1,257,953

Total charges to appropriation 1,773,538 515,585 1,257,953

BUDGETARY FUND BALANCE, JUNE 30 418,834$ 1,667,537$ 1,248,703$

CITY OF COVINA


PROP C SPECIAL REVENUE FUND


105Page 133 of 200






Charges to appropriations (outflows):Public works 225,401 100,270 125,131



CITY OF COVINA


AIR QUALITY IMPROVEMENT SPECIAL REVENUE FUND


106Page 134 of 200




Property taxes 104,039 160,547 56,508 Charges for services 75,744 82,102 6,358 Investment earnings 217 620 403





CITY OF COVINA


MUNICIPAL PARKING SPECIAL REVENUE FUND


107Page 135 of 200



BUDGETARY FUND BALANCE (DEFICIT), JULY 1 22,689$ 22,689$ -$ Resources (inflows):

Special assessments 130,423 130,427 4 Transfers in 100,000 100,000 -

Amounts available for appropriation 253,112 253,116 4



BUDGETARY FUND BALANCE (DEFICIT), JUNE 30 14,736$ 17,206$ 2,470$

CITY OF COVINA


LIGHTING ASSESSMENT SPECIAL REVENUE FUND


108Page 136 of 200




Special assessments 190,727 193,021 2,294





CITY OF COVINA


LANDSCAPING ASSESSMENT SPECIAL REVENUE FUND


109Page 137 of 200




Special assessments 88,274 176,053 87,779


Charges to appropriations (outflows):Public works 2,800 826 2,800 Transfers out 85,474 86,000 (526)



CITY OF COVINA


COMMUNITY FACILITIES DISTRICT ASSESSMENT SPECIAL REVENUE FUND


110Page 138 of 200




Business license taxes 2,000 1,168 (832) Charges for services 8,339 9,648 1,309

Amounts available for appropriation 25,344 25,821 477

Charges to appropriations (outflows):Public works 7,400 7,717 (317)

Total charges to appropriation 7,400 7,717 (317)

BUDGETARY FUND BALANCE, JUNE 30 17,944$ 18,104$ 160$

CITY OF COVINA


SHOPPERS LANE PARKING DISTRICT SPECIAL REVENUE FUND


111Page 139 of 200






Charges to appropriations (outflows):Capital outlay 1,223,836 465,583 758,253

Total charges to appropriation 1,223,836 465,583 758,253

BUDGETARY FUND BALANCE, JUNE 30 325,745$ 1,071,762$ 746,017$

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULEMEASURE M SPECIAL REVENUE FUND


112Page 140 of 200




Intergovernmental 35,350 6,128 (29,222)


Charges to appropriations (outflows):Capital outlay 36,433 10,388 26,045


BUDGETARY FUND BALANCE, JUNE 30 3,177$ -$ (3,177)$

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULETDA GRANT SPECIAL REVENUE FUND


113Page 141 of 200



BUDGETARY FUND BALANCE, JULY 1 (70,456)$ (70,456)$ -$ Resources (inflows):

Intergovernmental 697,980 314,794 (383,186) Miscellaneous 3,500 1,040 (2,460)


Charges to appropriations (outflows):Public safety 179,081 83,632 95,449 Public works 42,249 30,104 12,145 Culture and recreation 80,960 73,739 7,221 Community development 350,000 9,125 340,875 Capital outlay 86,889 16,690 70,199


BUDGETARY FUND BALANCE (DEFICIT), JUNE 30 (108,155)$ 32,088$ 140,243$

CITY OF COVINA


OTHER GRANTS SPECIAL REVENUE FUND


114Page 142 of 200






Charges to appropriations (outflows):Public works 2,325,358 884 2,324,474

Total charges to appropriation 2,325,358 884 2,324,474

BUDGETARY FUND BALANCE, JUNE 30 (553,247)$ 1,798,359$ 2,351,606$

CITY OF COVINA


ROAD MAINTENANCE AND REHABILITATION SPECIAL REVENUE FUND


115Page 143 of 200




Charges for services 50,000 79,736 29,736


Charges to appropriations (outflows):Culture and recreation 28,241 17,660 10,581



CITY OF COVINA


PEG ACCESS TELEVISION SPECIAL REVENUE FUND


116Page 144 of 200




Intergovernmental 2,925 2,925 - Investment earnings - 502,816 502,816 Transfers in 46,245 6,606 (39,639)


Charges to appropriations (outflows):Current:

Redevelopment and housing 2,489,669 458,699 2,030,970 Transfers out 15,000 15,000 -

Total charges to appropriation 2,504,669 473,699 2,030,970

BUDGETARY FUND BALANCE, JUNE 30 1,781,026 4,275,173 2,494,147

CITY OF COVINA


HOUSING AUTHORITY SPECIAL REVENUE FUND


117Page 145 of 200



BUDGETARY FUND BALANCE, JULY 1 -$ -$ -$ Resources (inflows):

Intergovernmental 750,000 - (750,000)

Amounts available for appropriation 750,000 - (750,000)

Charges to appropriations (outflows):Capital outlay 750,000 244,323 505,677


BUDGETARY FUND BALANCE, JUNE 30 -$ (244,323)$ (244,323)$

CITY OF COVINA


MEASURE W PROJECTS FUND


118Page 146 of 200


Final PositiveBudget Actual (Negative)


Intergovernmental 77,626 277,590 199,964

Special assessments - 915,116 915,116

Miscellaneous - 16,558 16,558

Amounts available for appropriation 740,830 1,872,468 1,131,638

Charges to appropriations (outflows):

Capital outlay 438,198 214,892 223,306



CITY OF COVINA

BUDGETARY COMPARISON SCHEDULE GENERAL PROJECTS FUND CAPITAL PROJECTS FUND


SUPPLEMENTARY INFORMATION

119Page 147 of 200




Investment earnings - 59,970 59,970


Charges to appropriations (outflows):Capital outlay 2,216,927 170,045 2,046,882 Transfers out 728,760 987,768 (259,008)

Total charges to appropriation 2,945,687 1,157,813 1,787,874


CITY OF COVINA


COVINA REVITALIZATION CAPITAL PROJECTS FUND


120Page 148 of 200


Positive Original Budget Actual (Negative)

BUDGETARY FUND BALANCE, JULY 1 111,503$ 111,503$ 111,503$ -$ Resources (inflows):

Intergovernmental 1,190,000 1,190,000 29,253 (1,160,747) Transfers in 728,760 728,760 987,768 259,008

Amounts available for appropriation 2,030,263 2,030,263 1,128,524 (901,739)

Charges to appropriations (outflows):Capital outlay 2,421,583 2,421,583 1,664,158 757,425

Total charges to appropriation 2,421,583 2,421,583 1,664,158 757,425

BUDGETARY FUND BALANCE, JUNE 30 (391,320)$ (391,320)$ (535,634)$ (144,314)$

Budgeted Amounts

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULE - MAJOR FUND

PARK DEVELOPMENT CAPITAL PROJECTS FUND


121Page 149 of 200


PositiveOriginal Final Actual (Negative)

BUDGETARY FUND BALANCE, JULY 1 (1,456,308)$ (1,456,308)$ (1,456,308)$ -$ Resources (inflows):

Intergovernmental 2,733,597 3,730,348 1,483,305 (2,247,043)

Amounts available for appropriation 1,277,289 2,274,040 26,997 (2,247,043)

Charges to appropriations (outflows):Capital outlay 2,733,597 2,265,504 26,997 2,238,507

Total charges to appropriation 2,733,597 2,265,504 26,997 2,238,507

BUDGETARY FUND BALANCE, JUNE 30 (1,456,308)$ 8,536$ -$ (8,536)$

Budgeted Amounts

CITY OF COVINA

SUPPLEMENTARY INFORMATIONBUDGETARY COMPARISON SCHEDULE - MAJOR FUND

TRANSPORTATION FUND CAPITAL PROJECTS FUND


122Page 150 of 200

Internal Service Funds

123

The internal service funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis. Generally accepted accounting principles (GAAP) requires statement of net position items, and revenues and expenses of individual internal service funds be consolidated with the government-wide statement of net position and activities. GAAP still requires internal service funds to be presented in the financial statements. The following are the individual internal service funds of the City: Management Information Systems Fund accounts for the accumulation and allocation of costs associated with data processing and electronic information technology. Central Equipment Fund accounts for the rental of motor vehicles to other departments and related costs. Workers’ Compensation Fund accounts for worker’s compensation to other departments. General Liability Fund accounts for general liability charges to other departments and related costs.

Page 151 of 200

124


Page 152 of 200

ManagementInformation Central Workers’ General

Systems Equipment Compensation Liability TotalASSETS:

CURRENT ASSETS:Cash and cash equivalents 623,266$ 1,263,453$ 4,341,228$ 945,034$ 7,172,981$ Accounts receivable - 36,575 5,901 38,530 81,006 Prepaid expenses 3,060 138 - 184 3,382 Inventories - 41,987 - - 41,987

TOTAL CURRENT ASSETS 626,326 1,342,153 4,347,129 983,748 7,299,356

NONCURRENT ASSETS:Capital assets:

Being depreciated, net 466,521 794,734 - - 1,261,255 TOTAL NONCURRENT ASSETS 466,521 794,734 - - 1,261,255

TOTAL ASSETS 1,092,847 2,136,887 4,347,129 983,748 8,560,611

DEFERRED OUTFLOWS OF RESOURCES:OPEB related 56,993 53,239 16,723 15,358 142,313 Pension related 139,731 121,926 32,127 51,867 345,651

TOTAL DEFERRED OUTFLOW OFRESOURCES 196,724 175,165 48,850 67,225 487,964

LIABILITIES:CURRENT LIABILITIES:

Accounts payable 8,595 32,943 1,338 7,803 50,679 Accrued liabilities 10,585 9,653 2,202 2,792 25,232 Interest payable 4,198 - - - 4,198 Deposits payable - - - 495 495 Compensated absences payable 12,390 31,691 7,387 7,217 58,685 Capital lease payable 244,087 - - - 244,087

TOTAL CURRENT LIABILITIES 279,855 74,287 10,927 18,307 383,376

NONCURRENT LIABILITIES:Compensated absences payable 53,780 123,283 2,865 1,184 181,112 Claims and judgements - - 6,209,000 1,038,000 7,247,000 Net OPEB liability 227,344 212,370 66,706 61,260 567,680 Net pension liability 1,073,730 936,911 246,869 398,559 2,656,069

TOTAL NONCURRENT LIABILITIES 1,354,854 1,272,564 6,525,440 1,499,003 10,651,861

TOTAL LIABILITIES 1,634,709 1,346,851 6,536,367 1,517,310 11,035,237

DEFERRED INFLOWS OF RESOURCES:OPEB related 22,843 21,339 6,703 6,155 57,040 Pension related 11,283 9,845 2,594 4,188 27,910

TOTAL DEFERRED INFLOWS OFRESOURCES 34,126 31,184 9,297 10,343 84,950

NET POSITION:Net investment in capital assets 466,521 794,734 - - 1,261,255 Unrestricted (845,785) 139,283 (2,149,685) (476,680) (3,332,867)

TOTAL NET POSITION (379,264)$ 934,017$ (2,149,685)$ (476,680)$ (2,071,612)$

INTERNAL SERVICE FUNDS

June 30, 2020

CITY OF COVINA

COMBINING STATEMENT OF NET POSITION

125Page 153 of 200

ManagementInformation Central Workers’ General

Systems Equipment Compensation Liability TotalOPERATING REVENUES:

Charges for services 1,160,544$ 882,865$ 1,035,599$ 540,655$ 3,619,663$ Motor pool charges - 402,564 - - 402,564

TOTAL OPERATING REVENUES 1,160,544 1,285,429 1,035,599 540,655 4,022,227

OPERATING EXPENSES:General and administrative 1,375,321 185,554 925,580 829,338 3,315,793 Vehicle and equipment operation - 1,006,920 - - 1,006,920 Depreciation 85,420 231,144 - - 316,564

TOTAL OPERATING EXPENSES 1,460,741 1,423,618 925,580 829,338 4,639,277

OPERATING INCOME (LOSS) (300,197) (138,189) 110,019 (288,683) (617,050)

NONOPERATING REVENUES (EXPENSES):Interest expense (4,198) - - - (4,198)

NONOPERATING REVENUES (EXPENSES) (4,198) - - - (4,198)

INCOME (LOSS) BEFORE TRANSFERS (304,395) (138,189) 110,019 (288,683) (621,248)

CHANGES IN NET POSITION (304,395) (138,189) 110,019 (288,683) (621,248)

TOTAL NET POSITION - BEGINNING OF YEAR, AS RESTATED (74,869) 1,072,206 (2,259,704) (187,997) (1,450,364)

TOTAL NET POSITION - END OF YEAR (379,264)$ 934,017$ (2,149,685)$ (476,680)$ (2,071,612)$

CITY OF COVINA

COMBINING STATEMENT OF REVENUES, EXPENSESAND CHANGES IN NET POSITION

INTERNAL SERVICE FUNDS


126Page 154 of 200

Management Information Central Workers’ General

Systems Equipment Compensation Liability TotalCASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from user departments 1,160,544$ 1,264,735$ 1,036,741$ 582,015$ 4,044,035$ Payments to suppliers of goods or services (626,840) (569,181) (689,736) (563,672) (2,449,429) Payments to employees (581,779) (491,151) (87,261) (219,316) (1,379,507)

NET CASH PROVIDED (USED) BYOPERATING ACTIVITIES (48,075) 204,403 259,744 (200,973) 215,099

CASH FLOWS FROM CAPITAL ANDRELATED FINANCING ACTIVITIES:

Principal paid on capital lease (252,484) - - - (252,484) Acquisition of capital assets (4,923) (113,349) - - (118,272)

NET CASH USED BY CAPITAL ANDRELATED FINANCING ACTIVITIES (257,407) (113,349) - - (370,756)

NET INCREASE (DECREASE) IN CASHAND CASH EQUIVALENTS (305,482) 91,054 259,744 (200,973) (155,657)

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 928,748 1,172,399 4,081,484 1,146,007 7,328,638

CASH AND CASH EQUIVALENTS - END OF YEAR 623,266$ 1,263,453$ 4,341,228$ 945,034$ 7,172,981$

(Continued)

CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDS


127Page 155 of 200

Management Information Central Workers’ General

Systems Equipment Compensation Liability TotalRECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:

Operating income (loss) (300,197)$ (138,189)$ 110,019$ (288,683)$ (617,050)$ Adjustments to reconcile operating income (loss)

to net cash provided by operating activities:Depreciation and amortization 85,420 231,144 - - 316,564

(Increase) decrease in operating assets and deferred outflows of resources:

Accounts receivable - (20,694) 1,142 41,360 21,808 Prepaids and deposits (3,060) 17,905 6,119 (184) 20,780 Deferred outflows of resources - OPEB related 16,542 15,453 4,853 4,457 41,305 Deferred outflows of resources - pension related (51,158) (39,188) (6,139) (28,000) (124,485)

Increase (decrease) in operating liabilities and deferred inflows of resources:

Accounts payable and accrued liabilities (3,867) 22,574 386 (20,680) (1,587) Deposits payable - - - 495 495 Compensated absences payable 14,050 783 (12,722) (13,444) (11,333) Net OPEB liability 13,063 12,203 3,833 3,520 32,619 Net pension liability 181,975 103,894 (14,784) 158,266 429,351 Claims payable - - 168,000 (59,000) 109,000 Deferred inflows of resources - OPEB related (4,547) (4,247) (1,333) (1,226) (11,353) Deferred inflows of resources - pension related 3,704 2,765 370 2,146 8,985

TOTAL ADJUSTMENTS 252,122 342,592 149,725 87,710 832,149

NET CASH PROVIDED (USED) BYOPERATING ACTIVITIES (48,075)$ 204,403$ 259,744$ (200,973)$ 215,099$

(CONTINUED)


CITY OF COVINA

COMBINING STATEMENT OF CASH FLOWSINTERNAL SERVICE FUNDS

128Page 156 of 200

Agency Funds

129

Agency funds are used to account for assets held by the City as trustee or agent for individuals, private organizations, or other governmental units or funds. Downtown District Fund accounts for funds collected and disbursed by the City on behalf of the Downtown District Association members. Prospero Park District Fund accounts for funds collected and disbursed by the City on behalf of the Prospero Park District Association members.

Page 157 of 200

130


Page 158 of 200

TotalDowntown Prospero Agency

District Park District FundsASSETS:

Cash and investments 500$ 125$ 625$ Accounts receivable 990 100 1,090

TOTAL ASSETS 1,490$ 225$ 1,715$

LIABILITIES:Due to association 1,490$ 225$ 1,715$

TOTAL LIABILITIES 1,490$ 225$ 1,715$

CITY OF COVINA

COMBINING STATEMENT OF FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS

June 30, 2020

131Page 159 of 200

Balance BalanceJuly 1, 2019 Additions Deletions June 30, 2020

ASSETS:Cash and investments 1,000$ 8,933$ 9,433$ 500$ Accounts receivable 1,152 - 162 990

TOTAL ASSETS 2,152$ 8,933$ 9,595$ 1,490$

LIABILITIES:Due to association 2,152$ 8,933$ 9,595$ 1,490$

TOTAL LIABILITIES 2,152$ 8,933$ 9,595$ 1,490$

ASSETS:Cash and investments 375$ 5,626$ 5,876$ 125$ Receivables 236 - 136 100

TOTAL ASSETS 611$ 5,626$ 6,012$ 225$

LIABILITIES:Due to association 611$ 5,626$ 6,012$ 225$

TOTAL LIABILITIES 611$ 5,626$ 6,012$ 225$

ASSETS:Cash and investments 1,375$ 14,559$ 15,309$ 625$ Accounts receivable 1,388 - 298 1,090

TOTAL ASSETS 2,763$ 14,559$ 15,607$ 1,715$

LIABILITIES:Due to association 2,763$ 14,559$ 15,607$ 1,715$

TOTAL LIABILITIES 2,763$ 14,559$ 15,607$ 1,715$

TOTALS

PROSPERO PARK DISTRICT

CITY OF COVINA

COMBINING STATEMENT OF CHANGES IN FIDUCIARY ASSETS AND LIABILITIESAGENCY FUNDS


DOWNTOWN DISTRICT

132Page 160 of 200

STATISTICAL SECTION

Page 161 of 200


Page 162 of 200

Statistical Section

133

This part of the City of Covina’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. FINANCIAL TRENDS These schedules contain trend information to help the reader understand how the City’s financial performance and well-being have changed over time. 134 REVENUE CAPACITY These schedules contain information to help the reader assess the City’s significant local revenue source, the property tax. 141 DEBT CAPACITY These schedules contain information to help the reader assess the affordability of the City’s current levels of outstanding debt and the ability to issue additional debt in the future. 147 DEMOGRAPHIC AND ECONOMIC INFORMATION These schedules offer demographic and economic indicators to help the reader understand the environment within which the City’s financial activities take place. 153 OPERATING INFORMATION These schedules contain service and infrastructure data to help the reader understand how the information in the City’s financial report relates to the services the City provides and the activities it performs. 155 DEBT CONTINUING DISCLOSURE These schedules contain information that complies with continuing disclosure requirements of each bond issued. 159

Page 163 of 200

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Governmental activities

Net investment in capital assets 87,695,682$ 78,351,025$ 74,270,261$ 72,284,235$ 70,723,029$ 70,757,663$ 74,371,948$ 74,766,840$ 84,857,338$ 84,273,491$

Restricted 16,560,218 10,950,627 15,229,058 21,146,284 18,702,053 19,641,871 26,984,607 25,867,749 17,053,339 14,469,628

Unrestricted 9,671,194 11,892,631 11,385,702 8,634,314 (29,330,744) (35,598,486) (39,202,847) (43,430,116) (46,481,365) (44,202,396) Total governmental activities net position 113,927,094$ 101,194,283$ 100,885,021$ 102,064,833$ 60,094,338$ 54,801,048$ 62,153,708$ 57,204,473$ 55,429,312$ 54,540,723$

Business-type activities


Restricted 2,901,716 - - - - - 4,353,289 5,613,256 7,122,938 -

Unrestricted 5,644,744 14,357,963 11,741,520 22,391,275 20,749,710 24,142,448 24,413,236 20,585,317 18,672,662 17,719,110 Total business-type activities net position 22,727,524$ 27,518,563$ 30,550,325$ 35,647,405$ 34,516,294$ 38,043,462$ 43,100,428$ 43,833,638$ 44,652,266$ 44,117,953$

Total net position


Restricted 19,461,934 10,950,627 15,229,058 21,146,284 18,702,053 19,641,871 31,337,896 31,481,005 24,176,277 14,469,628

Unrestricted 15,315,938 26,250,594 23,127,222 31,025,589 (8,581,034) (11,456,038) (14,789,611) (22,844,799) (27,808,703) (26,483,286) Total net position 136,654,618$ 128,712,846$ 131,435,346$ 137,712,238$ 94,610,632$ 92,844,510$ 105,254,136$ 101,038,111$ 100,081,578$ 98,658,676$

Fiscal Year


Net Position by Component

Last Ten Fiscal Years

(accrual basis of accounting)

($40,000,000)

($20,000,000)

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total net position-invested in capital assets, net of related debtTotal net position-restrictedTotal net position-unrestricted

134

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2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Expenses

Governmental activities:

General government 3,262,195$ 1,154,723$ 1,923,009$ 879,859$ 1,188,341$ 4,618,977$ 5,786,202$ 1,370,482$ 2,082,578$ 3,356,218$

Public safety 20,665,646 22,538,712 24,363,654 25,353,602 25,102,323 25,297,988 26,080,895 30,549,274 29,863,536 33,529,788

Public works 5,718,211 7,645,492 6,246,958 7,349,352 8,136,978 6,934,750 6,548,405 6,792,606 7,468,025 8,539,877

Culture and recreation 3,852,381 4,099,860 4,322,897 4,769,656 4,782,738 3,552,984 3,451,383 5,027,721 4,434,960 4,630,583

Community development 1,008,595 903,125 1,738,855 1,305,545 829,728 1,553,499 1,135,194 2,246,788 1,738,982 2,382,311

Transit 1,771,250 1,498,359 1,393,213 1,255,368 1,289,230 1,017,689 1,260,117 1,212,960 1,176,235 2,068,390

Redevelopment and housing 16,726,583 4,076,392 1,792,779 433,609 537,470 217,808 349,820 1,042,797 492,737 598,363

Interest on long-term debt 1,676,987 427,087 49,654 21,131 - - - - 287,459 251,550

Total governmental activities expenses 54,681,848 42,343,750 41,831,019 41,368,122 41,866,808 43,193,695 44,612,016 48,242,628 47,544,512 55,357,080

Business-type activities:

Water utility 8,366,225 8,156,273 9,276,555 9,757,890 8,776,576 8,369,874 8,056,727 12,815,344 10,289,222 10,318,472

Environmental protection 3,044,628 1,026,776 770,164 946,778 1,159,693 940,492 867,142 1,109,212 1,195,439 1,176,992

Sewer utility 1,246,067 916,194 1,272,822 1,564,254 1,729,052 1,575,182 1,429,207 1,757,186 2,444,970 2,829,014

Total business-type activities expenses 12,656,920 10,099,243 11,319,541 12,268,922 11,665,321 10,885,548 10,353,076 15,681,742 13,929,631 14,324,478 Total expenses 67,338,768$ 52,442,993$ 53,150,560$ 53,637,044$ 53,532,129$ 54,079,243$ 54,965,092$ 63,924,370$ 61,474,143$ 69,681,558$

Program revenues


Charges for services:

General government 2,171,397$ 1,537,347$ 356,673$ 482,450$ 435,274$ 338,362$ 290,160$ 2,232,037$ 2,192,160$ 2,162,262$

Public safety 630,938 1,552,076 1,957,506 2,506,468 1,712,553 1,490,083 1,443,134 1,769,892 1,727,746 1,521,571

Public works 488,132 764,276 556,466 579,193 1,510,331 623,693 796,475 733,029 802,080 684,035

Culture and recreation 1,084,791 776,590 798,562 1,184,544 807,829 794,192 793,114 785,814 834,854 507,771

Community development 669,205 820,232 1,167,001 1,245,885 495,395 1,138,415 1,266,266 1,968,358 1,771,843 1,349,738

Transit 239,177 287,568 328,136 316,429 297,094 315,887 242,912 214,650 226,255 180,644

Redevelopment and housing 979,816 389,969 28,710 973,329 60,961 320,620 302,665 263,574 228,506 881,603

Operating grants and contributions 3,922,703 4,827,008 5,597,878 5,131,366 8,232,955 5,216,063 10,563,152 7,540,661 7,962,987 8,081,089

Capital grants and contributions 846,430 1,154,676 611,661 1,483,056 1,595,869 2,428,605 8,209,341 2,579,102 4,308,857 245,420

Total governmental activities program revenues 11,032,589 12,109,742 11,402,593 13,902,720 15,148,261 12,665,920 23,907,219 18,087,117 20,055,288 15,614,133

(Continued)


Changes in Net Position



Fiscal Year

135

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(Continued)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


Charges for services:

Water utility 8,872,848 10,515,236 10,902,689 13,337,157 11,349,263 10,436,434 11,011,015 11,138,975 9,586,220 10,673,985

Environmental protection 3,191,529 1,227,298 925,221 1,317,849 1,240,317 1,159,700 1,313,194 1,170,122 1,190,124 1,003,527

Sewer utility 1,464,430 1,750,240 2,263,321 2,213,642 2,596,319 2,683,503 2,760,749 2,833,092 2,923,535 2,905,488

Operating grants and contributions - - - 1,554 - - - - - -

Capital grants and contributions - - - 366,180 - - - - - -

Total business-type activities program revenues 13,528,807 13,492,774 14,091,231 17,236,382 15,185,899 14,279,637 15,084,958 15,142,189 13,699,879 14,583,000 Total program revenues 24,561,396$ 25,602,516$ 25,493,824$ 31,139,102$ 30,334,160$ 26,945,557$ 38,992,177$ 33,229,306$ 33,755,167$ 30,197,133$

Net (expense) revenue

Governmental activities (43,649,259)$ (30,234,008)$ (30,428,426)$ (27,465,402)$ (26,718,547)$ (30,527,775)$ (20,704,797)$ (30,155,511)$ (27,489,224)$ (39,742,947)$

Business-type activities 871,887 3,393,531 2,771,690 4,967,460 3,520,578 3,394,089 4,731,882 (539,553) (229,752) 258,522 Total net expense (42,777,372)$ (26,840,477)$ (27,656,736)$ (22,497,942)$ (23,197,969)$ (27,133,686)$ (15,972,915)$ (30,695,064)$ (27,718,976)$ (39,484,425)$

General revenues


Property taxes 18,602,045$ 13,383,113$ 13,323,781$ 11,725,280$ 12,913,803$ 12,564,219$ 11,642,704$ 12,575,318$ 13,123,606$ 13,812,070$

Sales taxes 4,978,892 5,323,574 5,835,052 5,643,574 6,569,382 7,929,069 9,164,440 8,950,753 9,315,358 9,296,400

Transaction and use tax - - - - - - - - 1,438,519 6,579,486

Transient occupancy taxes 317,594 316,609 395,589 349,310 99,716 482,727 327,570 388,491 240,946 130,831

Property transfer taxes 92,818 124,226 132,670 157,945 159,795 223,766 200,253 236,899 217,332 212,485

Business license taxes 337,613 373,299 259,692 415,362 326,818 328,716 337,626 348,793 372,756 347,110

Utility user taxes 4,722,506 4,553,173 5,065,228 5,055,632 5,033,846 4,632,448 4,689,894 4,573,428 4,590,983 4,523,187

Franchise taxes 3,238,200 1,314,343 1,465,788 1,480,237 1,549,731 1,447,780 1,449,399 1,594,522 1,625,802 1,910,641

Intergovernmental 227,618 24,598 - - - - - - - -

Investment earnings 1,035,569 250,604 337,358 473,543 641,993 193,209 226,671 144,176 883,542 620,835

Transfers in/out (24,383) 6,653 26,880 (33,927) - - 18,900 - - -

Gain on sale of land held for resale 55,176 - - - - - - - - -

Gain on sale of capital assets - 10,105 6,614 - - 32,551 - - 15,129 54,268

Miscellaneous - - - - - - - - 12,562 49,645

Extraordinary loss - (11,674,077) - - - - - - - -

Total governmental activities 33,583,648 14,006,220 26,848,652 25,266,956 27,295,084 27,834,485 28,057,457 28,812,380 31,836,535 37,536,958


Investment earnings 173,150 70,596 60,157 17,894 19,330 111,555 206,823 366,249 594,051 524,565

Investment earnings - CIC 506,864 1,333,565 226,795 809,727 2,109 21,524 137,161 906,514 454,329 -

Miscellaneous - - - - - - - - - -

Transfers in/out 24,383 (6,653) (26,880) 33,927 - - (18,900) - - - Total general revenues 34,288,045$ 15,403,728$ 27,108,724$ 26,128,504$ 27,316,523$ 27,967,564$ 28,382,541$ 30,085,143$ 32,884,915$ 38,061,523$

(Continued)





Fiscal Year

136

Page 166 of 200

(Continued)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Change in net position

Governmental activities (10,065,611)$ (16,227,788)$ (3,579,774)$ (2,198,446)$ 576,537$ (2,693,290)$ 7,352,660$ (1,343,131)$ 4,347,311$ (2,205,989)$

Business-type activities 1,576,284 4,791,039 3,031,762 5,829,008 3,542,017 3,527,168 5,056,966 733,210 818,628 783,087 Total changes in net position (8,489,327)$ (11,436,749)$ (548,012)$ 3,630,562$ 4,118,554$ 833,878$ 12,409,626$ (609,921)$ 5,165,939$ (1,422,902)$





Fiscal Year

($20,000,000)

($15,000,000)

($10,000,000)

($5,000,000)

$0

$5,000,000

$10,000,000

$15,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Change in net position-governmental activities Change in net position-business-type activities

137

Page 167 of 200

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General fundReserved

Unreserved

Nonspendable $ 648,802 $ 621,981 $ 28,941 $ 28,094 $ 3,354,570 $ 753,534 $ 3,247,152 $ 3,116,097 $ 2,620,620 $ 2,621,554

Restricted - 20,259 24,564 7,436,731 21,359 347,012 395,420 448,927 385,692 428,079

Committed 172,777 234,540 533,004 21,359 6,699,720 6,483,613 2,656,872 3,708,388 6,981,901 8,029,233

Assigned 501,835 473,342 478,106 1,680,892 979,197 - 442,472 1,561,848 42,726 25,940

Unassigned 10,284,466 9,187,601 10,580,310 - - (675,402) - - - 3,167,653

Total general fund 11,607,880$ 10,537,723$ 11,644,925$ 9,167,076$ 11,054,846$ 6,908,757$ 6,741,916$ 8,835,260$ 10,030,939$ 14,272,459$

All other governmental fundsReserved

Unreserved, reported in:

Special revenue funds

Capital projects funds

Nonspendable -$ -$ -$ -$ -$ -$ -$ -$ 5,631$ 1,159$

Restricted 47,292,721 10,103,939 7,070,982 8,879,178 8,945,660 10,265,504 18,465,625 24,623,938 20,506,425 17,912,873

Assigned 1,886,710 856,857 953,958 1,497,633 1,338,429 877,646 1,270,910 491,368 111,473 -

Unassigned (1,961,140) (259,217) (353,128) (21,099) (58,040) (46,555) (27,396) (53,943) (1,685,799) (832,212)

Total all other governmental funds 47,218,291$ 10,701,579$ 7,671,812$ 10,355,712$ 10,226,049$ 11,096,595$ 19,709,139$ 25,061,363$ 18,937,730$ 17,081,820$

CITY OF COVINA, CALIFORNIAFund Balances of Governmental Funds

Last Ten Fiscal Years(modified accrual basis of accounting)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Fund balances-general fund Fund balances-all other governmental funds

138

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2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Revenues

Taxes 26,517,007$ 32,305,233$ 25,706,551$ 26,934,344$ 24,578,908$ 26,901,523$ 27,608,725$ 27,811,886$ 28,668,204$ 30,925,091$ 36,812,970$

Licenses and permits 408,891 538,623 609,209 878,549 756,173 965,527 888,120 1,128,331 1,698,138 1,307,877 999,449

Intergovernmental 5,494,624 4,996,751 6,006,293 5,178,331 7,338,277 6,062,377 7,850,431 12,122,236 7,968,101 9,388,149 8,487,182

Charges for services 3,358,721 3,696,406 3,181,384 2,658,584 2,748,519 2,850,307 2,746,174 2,484,969 4,713,987 5,000,622 4,011,688

Fines and forfeits 736,304 717,102 824,561 871,237 828,444 559,409 862,009 930,478 907,304 926,644 907,080

Special assessments 781,307 768,407 674,336 645,752 725,365 944,194 524,949 590,948 634,282 533,047 1,414,617

Investment earnings 1,184,170 1,006,602 243,762 3,304 186,627 206,047 193,209 226,671 380,716 1,281,892 1,430,498

Gain on land held for resale - 55,176 - - - - - - - - -

Miscellaneous 449,220 426,682 714,743 296,007 1,369,723 3,766,447 240,998 550,247 723,058 570,700 738,688

Total revenues 38,930,244 44,510,982 37,960,839 37,466,108 38,532,036 42,255,831 40,914,615 45,845,766 45,693,790 49,934,022 54,802,172

Expenditures

General government 3,785,471 3,562,834 1,819,595 274,806 503,430 232,379 3,928,177 3,476,163 2,235,447 1,790,386 2,593,801

Public safety 21,397,265 20,360,999 22,267,322 23,842,820 24,415,716 24,617,224 23,721,228 23,283,514 26,571,782 28,302,062 29,372,913

Public works 2,053,646 1,740,182 2,783,422 2,448,294 3,183,073 4,377,357 3,109,378 3,762,770 4,753,148 4,091,454 4,474,244

Culture and recreation 3,634,507 3,546,556 3,826,564 4,262,425 4,546,531 4,602,280 3,245,947 3,254,141 3,923,981 4,282,219 3,926,265

Community development 923,801 993,778 890,511 1,762,768 1,289,508 832,898 1,543,411 1,202,281 1,890,189 1,852,180 2,247,775

Transit 996,078 1,535,572 1,240,701 1,125,086 980,911 1,020,243 746,109 957,374 764,864 887,211 1,734,472

Redevelopment and housing 4,268,367 15,567,011 3,880,732 491,540 466,232 490,745 265,742 287,877 1,005,353 517,758 567,340

Capital outlay 3,213,996 572,305 2,744,828 890,079 2,823,296 3,419,189 5,030,166 1,175,943 2,617,687 15,518,582 6,985,453

Debt service:

Principal 5,190,621 2,930,724 3,017,434 553,477 579,404 - - - 210,000 300,000 305,000

Interest and fiscal charges 1,840,054 1,644,364 685,036 48,115 23,501 - - - 155,078 233,481 252,136

Bond issuance costs - - - - - - - - - 45,544 -

Payment to refunded

bond account - - - - - - - - - - -

Total expenditures 47,303,806 52,454,325 43,156,145 35,699,410 38,811,602 39,592,315 41,590,158 37,400,063 44,127,529 57,820,877 52,459,399

Excess of revenues over

(under) expenditures (8,373,562) (7,943,343) (5,195,306) 1,766,698 (279,566) 2,663,516 (675,543) 8,445,703 1,566,261 (7,886,855) 2,342,773

(Continued)

CITY OF COVINA, CALIFORNIAChanges in Fund Balances of Governmental Funds

Last Ten Fiscal Years (modified accrual basis of accounting)

139

Page 169 of 200

(Continued)

Other financing sources (uses) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Transfers in 5,508,798$ 3,620,017$ 4,134,433$ 544,408$ 977,149$ 2,161,548$ 2,317,808$ 1,373,629$ 1,186,303$ 2,422,806$ 1,195,374$

Transfers out (10,332,955) (3,885,400) (3,949,780) (517,528) (1,202,753) (2,415,967) (2,317,808) (1,373,629) (1,186,303) (3,861,325) (1,195,374)

Capital leases 486,788 - - - - - - - - - -

Loan Proceeds 2,310,000 - - - - - - - - - -

Tax allocation bonds issued - - - - - - - - - - -

Proceeds from debt issuance - - - - - - - - 5,625,000 2,500,000 -

Premium on debt issuance - - - - - - - - 254,307 - -

Payment to refunded bond account - - - - - - - - - - -

Gain (loss) on sale and disposal - - - - 720,376 - - - - - 42,837

of capital assets - - - - - - - - - - -

Total other financing

sources (uses (2,027,369) (265,383) 184,653 26,880 494,772 (254,419) - - 5,879,307 1,061,481 42,837

Extraordinary loss from dissolution

of Redevelopment Agency - - (32,576,216) - - - - - - Net changes in fund balances (10,400,931)$ (8,208,726)$ (37,586,869)$ 1,793,578$ 215,206$ 2,409,097$ (675,543)$ 8,445,703$ 7,445,568$ (6,825,374)$ 2,385,610$

Debt service as a percentage of

noncapital expenditures 15.9% 8.8% 9.2% 1.7% 1.7% 0.0% 0.0% 0.0% 0.9% 1.4% 1.2%

CITY OF COVINA, CALIFORNIAChanges in Fund Balances of Governmental Funds

Last Ten Fiscal Years (modified accrual basis of accounting)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

$(40,000,000)

$(30,000,000)

$(20,000,000)

$(10,000,000)

$-

$10,000,000

$20,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Changes in Fund Balances Debt Service as a Percentage to Noncapital Expenditures

140

Page 170 of 200

Fiscal Transient Property Business Utility Franchise

Year Property Taxes (1) Sales Taxes Occupancy Taxes Transfer Taxes License Taxes Users Taxes Taxes Total

2011 18,617,610 4,978,892 317,594 92,818 337,613 4,722,506 3,238,200 32,305,233

2012 13,701,328 5,323,574 316,609 124,226 373,299 4,553,173 1,314,343 25,706,552

2013 13,779,975 5,835,052 394,909 132,670 260,722 5,065,228 1,465,788 26,934,344

2014 11,725,280 5,643,574 100,878 157,945 415,362 5,055,632 1,480,237 24,578,908

2015 12,913,803 6,569,382 348,148 159,795 326,818 5,033,846 1,549,731 26,901,523

2016 12,564,219 7,929,069 482,727 223,766 328,716 4,632,448 1,447,780 27,608,725

2017 11,642,704 9,164,440 327,570 200,253 337,626 4,689,894 1,449,399 27,811,886

2018 12,575,318 8,950,753 388,491 236,899 348,793 4,573,428 1,594,522 28,668,204

2019 13,123,395 10,753,877 240,946 217,332 372,756 4,590,983 1,625,802 30,925,091

2020 13,812,820 15,875,886 130,831 212,485 347,120 4,523,187 1,910,641 36,812,970

(1) Includes both City property tax and Redevelopment Agency tax allocations up to 2012. Property tax in-lieu motor vehicle licenses are not included in amounts prior to fiscal year 2006.

CITY OF COVINA, CALIFORNIAGeneral Governmental Tax Revenues by Source

Last Ten Fiscal Years(modified accrual basis of accounting)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Property Taxes Sales Taxes Transient Occupancy Taxes Property Transfer Taxes Business License Taxes Utility Users Taxes Franchise Taxes

141

Page 171 of 200

Total

Fiscal Effective

Year Secured Nonunitary Unsecured Total Rate (2)

2011 3,919,278,191 401,800 138,965,796 4,058,645,787 1.3943%

2012 3,998,495,677 401,800 141,788,741 4,140,686,218 1.3968%

2013 4,019,604,449 401,800 135,484,540 4,155,490,789 1.4036%

2014 4,168,222,632 401,800 129,212,504 4,297,836,936 1.4047%

2015 4,391,097,348 401,800 136,165,789 4,527,664,937 1.4125%

2016 4,622,530,801 401,800 136,586,370 4,759,518,971 1.4548%

2017 4,833,140,987 656,500 129,151,190 4,962,948,677 1.4552%

2018 5,126,757,001 656,500 125,505,161 5,252,918,662 1.4801%

2019 5,368,832,086 53,800 130,846,429 5,499,732,315 1.4645%

2020 5,681,534,627 53,800 132,250,317 5,813,838,744 1.4974%

(1) Net of exemptions

Source: Los Angeles County/Hdl Companies

CITY OF COVINA, CALIFORNIAAssessed Value of Taxable Property


Assessed Value (1)

(2) Because of California's complicated taxing structure where different values are taxed at different rates due to Proposition 13 and Redevelopment dissolution statutes, we have used an effective rate. The rate has been calculated by dividing total revenue for the government preparing the statistical section by the total revenue base.

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

$4,500,000,000

$5,000,000,000

$5,500,000,000

$6,000,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Secured assessed value Nonunitary assessed value Unsecured assessed value

142Page 172 of 200

Total

Fiscal Effective

Year Residential Commercial Industrial Other Total Rate (2)

2011 2,859,945,639 772,436,342 212,367,095 213,896,711 4,058,645,787 1.3943%

2012 2,890,966,936 778,029,259 211,825,282 259,864,741 4,140,686,218 1.3968%

2013 2,930,723,686 780,928,877 217,974,525 225,863,701 4,155,490,789 1.4036%

2014 3,051,809,271 794,611,256 228,672,928 222,743,481 4,297,836,936 1.4047%

2015 3,259,575,794 813,796,268 223,545,046 230,747,829 4,527,664,937 1.4125%

2016 3,429,044,663 855,846,637 228,745,403 245,882,268 4,759,518,971 1.4548%

2017 3,577,650,675 901,743,008 232,619,329 250,935,665 4,962,948,677 1.4552%

2018 3,790,868,304 923,889,405 237,982,559 300,178,394 5,252,918,662 1.4801%

2019 3,999,408,804 943,988,485 248,088,436 308,246,590 5,499,732,315 1.4645%

2020 4,236,209,336 996,423,215 261,497,564 319,708,629 5,813,838,744 1.4974%

(1) Net of exemptions


CITY OF COVINA, CALIFORNIAAssessed Value of Taxable Property by Use


Assessed Value (1)


$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

$4,000,000,000

$4,500,000,000

$5,000,000,000

$5,500,000,000

$6,000,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Residential Commercial Industrial Other

143Page 173 of 200

Community Vehicle Total

Fiscal Basic Flood School College Water Parking Effective

Year Levy (2) General Control Total District (3) District (4) District District Rate (5)

2011 1.0000 0.0000 0.0000 0.0000 0.2516 0.0515 0.0037 0.0875 1.3943

2012 1.0000 0.0000 0.0000 0.0000 0.2547 0.0509 0.0037 0.0875 1.3968

2013 1.0000 0.0000 0.0000 0.0000 0.2577 0.0549 0.0035 0.0875 1.4036

2014 1.0000 0.0000 0.0000 0.0000 0.2713 0.0425 0.0035 0.0875 1.4047

2015 1.0000 0.0000 0.0000 0.0000 0.2770 0.0446 0.0035 0.0875 1.4125

2016 1.0000 0.0000 0.0000 0.0000 0.3258 0.0380 0.0035 0.0875 1.4548

2017 1.0000 0.0000 0.0000 0.0000 0.3162 0.0481 0.0035 0.0875 1.4553

2018 1.0000 0.0000 0.0000 0.0000 0.3431 0.0460 0.0035 0.0875 1.4801

2019 1.0000 0.0000 0.0000 0.0000 0.3267 0.0467 0.0035 0.0875 1.4645

2020 1.0000 0.0000 0.0000 0.0000 0.3368 0.0695 0.0035 0.0875 1.4974

(1) Per $100 of assessed value

Revenue Augmentation Fund ($0.242) and other agencies ($0.082).(3) Azusa Unified School District, Charter Oak Unified School District and Covina Valley Unified School District.(4) Citrus Community College District and Mt. San Antonio Community College District.

Source: Los Angeles County/Hdl Companies.


CITY OF COVINA, CALIFORNIAProperty Tax Rates (1)

Direct and Overlapping GovernmentsLast Ten Fiscal Years

County

(2) Basic levy for City ($0.154), County ($0.338), Covina Valley Unified School District ($0.184), Educational.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Basic Levy County School District Mt. San Antonio Water District Vehicle Parking Dist

144Page 174 of 200

CITY OF COVINA, CALIFORNIAPrincipal Property Owners

June 30, 2020

Percentage of Percentage of

Taxable Total Taxable Taxable Total Taxable

Primary Assessed Assessed Assessed Assessed

Taxpayer Use Value Rank Value (1) Value Rank Value (1)

Ikea Property Inc Commercial 69,799,712$ 1 1.20% 68,726,528$ 1 1.18%

KIR Covina Limited Partnership Commercial 55,325,137 2 0.95% 54,240,347 2 0.93%

Covina Grand Apartments LLC Residential 53,266,717 3 0.92% 52,223,197 3 0.90%

Citrus Valley Health partners Inc Institutional 52,157,600 4 0.90% 46,676,309 5 0.80%

Vista Pointe Grand Apartments LLC Residential 48,108,114 5 0.83% 46,789,091 4 0.80%

UIMC Covina LLC Commercial 37,501,832 6 0.65% 32,000,000 7 0.55%

FNL of Covina Partners LLC Commercial 33,238,937 7 0.57% 32,587,200 6 0.56%

LVGEM Hotel Corporation Commercial 32,439,795 8 0.56% 30,150,300 8 0.52%

Time Warner Inc Commercial 28,869,844 9 0.50% 28,525,472 9 0.49%

CCP Covina 4003 LP Institutional 28,628,685 10 0.49% 28,067,340 10 0.48%

0.00%

0.00%

0.00%

Total 439,336,373$ 7.57% 419,985,784$ 7.21%

(1) Total assessed valuation of taxable property exclusive of exemptions.


2020 2019

Principal Property Owners

0

50000000

100000000

150000000

200000000

250000000

300000000

2020 2019

Institutional Commercial Industrial Residential

145Page 175 of 200

Percent of

Percent of Total Tax

Fiscal Total Tax Current Tax Current Taxes Delinquent Tax Total Tax Collections to

Year Levy (2) Collections Collected Collections Collections Total Tax Levy

2011 4,708,050 4,570,061 97.1% 7,093 4,577,154 97.2%

2012 4,905,372 4,901,258 99.9% 6,561 4,907,819 100.0%

2013 5,152,608 4,965,009 96.4% 6,505 4,971,514 96.5%

2014 5,195,545 5,095,292 98.1% 5,745 5,101,037 98.2%

2015 5,276,198 5,403,432 102.4% 6,191 5,409,623 102.5%

2016 5,553,269 5,809,940 104.6% (9,333) 5,800,607 104.5%

2017 5,815,150 5,996,355 103.1% 11,769 6,008,124 103.3%

2018 6,154,437 6,485,903 105.4% 98,063 6,583,966 107.0%

2019 6,483,113 6,548,523 101.0% 87,221 6,635,744 102.4%

2020 6,795,929 6,868,907 101.1% 70,619 6,939,526 102.1%

(1) Includes only City general property taxes of the General Fund and Municipal Parking District Special Revenue Fund (2) Includes secured and unsecured property tax levies exclusive of homeowner exemption, supplemental roll and in-lieu motor vehicle licenses.Source: Los Angeles County.


Property Tax Levies and Collections (1)


$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Tax Collections Current Tax Collections Total Tax Levy

146Page 176 of 200

Percentage of Percentage of

Fiscal Tax Allocation Certificates of Revenue Capital Section 108 Certificates of Revenue Capital Personal Debt

Year Bonds (2) Participation Bonds Notes Leases Loan Participation Bonds Leases Total Income (1) Per Capita (1)

2011 34,112,825 - 1,455,412 543,360 310,752 - - 30,842,494 4,963,503 72,228,346 1.63% 0.07%

2012 - - 993,608 - 212,881 - - 30,167,457 4,665,191 36,039,137 3.26% 0.13%

2013 - - 506,804 - 109,404 - - 28,556,637 4,355,402 33,528,247 3.70% 0.14%

2014 - - - - - - - 28,342,757 4,033,567 32,376,324 3.88% 0.15%

2015 - - - - - - - 27,419,747 3,764,539 31,184,286 4.00% 0.16%

2016 - - - - - - - 26,466,734 3,482,249 29,948,983 4.14% 0.16%

2017 - - - - - - - 25,483,722 3,186,043 28,669,765 4.38% 0.17%

2018 - 5,657,747 - - 496,571 - - 24,465,710 2,875,237 33,495,265 3.77% 0.15%

2019 - 5,471,187 - - 496,571 2,375,000 - 23,407,697 2,549,111 34,299,566 3.88% 0.14%

2020 - 5,279,627 - - 244,087 2,250,000 - 21,443,255 2,206,909 31,423,878 4.36% 0.16%

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

(1) See Demographic Statistics on page 153.(2) Due to the dissolution of the Covina Redevelopment Agency, the debt related to tax allocation bonds is no longer reported in this table.

Outstanding Debt by Type-Last Ten Fiscal Years

CITY OF COVINA, CALIFORNIARatios of Outstanding Debt by Type


Business

Governmental Activities Activities

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Tax Allocation Bonds Revenue Bonds Notes Capital Leases Certificates of Participation Section 108 Loan

147

Page 177 of 200

Percentage of

Taxable

Less Amounts Assessed

Fiscal Tax Allocation Available in Debt Valuation (1)

Year Bonds Service Fund Total of Property Per Capita (2)

2011 34,112,825 1,418,394 32,694,431 0.81% 0.15%

2012 - - - 0.00% 0.00%

2013 - - - 0.00% 0.00%

2014 - - - 0.00% 0.00%

2015 - - - 0.00% 0.00%

2016 - - - 0.00% 0.00%

2017 - - - 0.00% 0.00%

2018 - - - 0.00% 0.00%

2019 - - - 0.00% 0.00%

2020 - - - 0.00% 0.00%

Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements.(1) See Assessed Value of Taxable Property-Last Ten Fiscal Years on page 142.(2) See Demographic Statistics on page 153.(3) Due to the dissolution of the Covina Redevelopment Agency, Tax Allocation Bonded Debt is no longer reportedon this schedule.

CITY OF COVINA, CALIFORNIARatios of Net General Bonded Debt Outstanding


0

0.002

0.004

0.006

0.008

0.01

0.012

0.014

2011 2012 2013 2014 2015 2016 2017 2018 2019

Percentage of Taxable Assessed Valuation of Property Per Capita

148Page 178 of 200

CITY OF COVINA, CALIFORNIADirect and Overlapping Governmental Activities Bonded Debt

As of June 30, 2020

Net GeneralActivities Bonded Percentage Amountand Capital Lease Applicable to Applicable to

Jurisdiction Debt Outstanding City of Covina(2) City of CovinaDirect-City of Covina (1) 244,087$ 100.000% 244,087$ Overlapping: Water District: Metropolitan Water District 18,151,752 0.359% 65,105 College: Citrus CCD DS Refunding Bond Series 2013 13,130,302 0.340% 44,693 Citrus CCD DS 2004 Series 2014D 18,696,403 0.340% 63,639 Citrus CCD DS 2004, 2015 Series E 9,805,000 0.340% 33,374 Citrus CCD DS Ref Bonds 2015 Series A 45,435,000 0.340% 154,652 Mt. San Antonio CCD DS 2008 Series 13A 161,708,000 5.913% 9,561,270 Mt. San Antonio CCD DS 2008 Series 2013B 3,805,000 5.913% 224,977 Mt. San Antonio CCD DS 2013 Series A 23,500,000 5.913% 1,389,479 Mt. San Antonio CCD DS 2013 Series B 27,185,000 5.913% 1,607,361 Mt. San Antonio CCD DS 2008 Series 2015C 10,870,000 5.913% 642,708 Mt. San Antonio CCD DS 2015 Ref Bonds 17,365,000 5.913% 1,026,736 Mt. San Antonio CCD DS 2018 Series 2019A 401,245,000 5.913% 23,724,316 School District: Azusa Unified 2002 Series 2007 28,920,359 1.404% 405,971 Azusa Unified Refund Bond 2002 Series 2011 12,150,000 1.404% 170,556 Azusa Unified 2014 Series A 24,135,000 1.404% 338,796 Azusa Unified Refund Bond 2016 20,930,000 1.404% 293,806 Azusa Unified 2014 Series B 750,000 1.404% 10,528 Azusa Unified 2014 Series C 47,635,000 1.404% 668,679 Charter Oak Unified 2012 Series A 24,840,000 38.543% 9,574,085 Charter Oak Unified 2015 Ref Bonds 8,845,000 38.543% 3,409,130 Charter Oak Unified 2012 Series B 11,720,000 38.543% 4,517,241 Charter Oak Unified Ref 2017 10,000,000 38.543% 3,854,301 Covina Valley Unified 2001 Series B 9,447,069 41.952% 3,963,189 Covina Valley Unified 2001 Refund 2010 Ser A 1,935,000 41.952% 811,762 Covina Valley Unified 2012 Series A 4,815,000 41.952% 2,019,966 Covina Valley Unified 2013 Ref Bonds 11,865,000 41.952% 4,977,548 Covina Valley Unified 2012 Series B 36,145,000 41.952% 15,163,377 Covina Valley Unified 2012 Series C 31,490,000 41.952% 13,210,534 Covina Valley Unified 2012 Series C 29,380,000 41.952% 12,325,356 Covina Valley Unified 2016 Ref Bonds 14,000,000 41.952% 5,873,213 Covina Valley Unified 2012 Series D 58,690,000 41.952% 24,621,347

Subtotal overlapping debt 144,747,694

Total direct and overlapping debt 144,991,781$

Amount Applicable to City of Covina


(1) Includes governmental activities debt reported in the Ratios of Oustanding Debt by Type on page 147.(2) The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimatedby determining the portio of another governmental unit's taxable assessed value that is whithin the city's boundaries and dividing it byeach unit's total taxable assessed value.

0.001683454

0.265347487

0.732520033

0.000449025

School District

Water District

College

Direct-City of Covina

149Page 179 of 200

Total Debt Limitation- Total Debt Fiscal Assessed Add Assessed 15% of Total Applicable LegalYear Value Exemptions Value Assessed Value to Limitation Debt Margin

2011 4,058,645,787 160,679,668 4,219,325,455 632,898,818 - 632,898,818

2012 4,140,686,218 127,379,664 4,268,065,882 640,209,882 - 640,209,882

2013 4,155,490,789 166,019,257 4,321,510,046 648,226,507 - 648,226,507

2014 4,297,836,936 171,312,269 4,469,149,205 670,372,381 - 670,372,381

2015 4,527,664,937 180,062,301 4,707,727,238 706,159,086 - 706,159,086

2016 4,759,518,971 183,697,385 4,943,216,356 741,482,453 - 741,482,453

2017 4,962,948,677 196,055,673 5,159,004,350 773,850,653 - 773,850,653

2018 5,252,918,662 91,194,219 5,344,112,881 801,616,932 - 801,616,932

2019 5,499,732,315 184,378,433 5,684,110,748 852,616,612 - 852,616,612

2020 5,813,838,744 149,727,735 5,963,566,479 894,534,972 - 894,534,972

CITY OF COVINA, CALIFORNIALegal Debt Margin Information


Assessed Valuations Legal Debt Margin

0

100000000

200000000

300000000

400000000

500000000

600000000

700000000

800000000

900000000

1E+09

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Legal debt margin Debt limitation

150Page 180 of 200


Water Utility Fund Certificates of Participation and Revenue BondsLast Ten Fiscal Years

Net Revenue

Fiscal Gross Operating Available for

Year Revenues (1) Expenses (2) Debt Service Principal Interest Total Coverage

2011(3) 8,905,849 6,580,727 2,325,122 180,000 722,912 902,912 2.58

2012 10,545,532 6,387,102 4,158,430 425,000 748,263 1,173,263 3.54

2013 10,933,333 8,501,999 2,431,334 250,000 740,263 990,263 2.46

2014 13,339,122 8,771,194 4,567,928 255,000 731,412 986,412 4.63

2015 11,350,293 6,924,720 4,425,573 265,000 710,708 975,708 4.54

2016 10,506,025 6,394,614 4,111,411 280,000 710,113 990,113 4.15

2017 11,148,725 7,238,966 3,909,759 290,000 698,713 988,713 3.95

2018 11,350,497 8,484,444 2,866,053 300,000 685,413 985,413 2.91

2019 9,876,708 8,319,258 1,557,450 315,000 671,613 986,613 1.58

2020 10,889,143 8,141,622 2,747,521 330,000 658,713 988,713 2.78

(1) Total revenues (including investment earnings) excluding joint venture investment income and gain on sale of capital assets.(2) Total operating expenses exclusive of depreciation.(3) Includes revenue bonds issued in this year.

Pledged-Revenue Bond Coverage

Debt Service Requirements

$-

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

2011(3) 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Revenue Available for Debt Service Total Debt Service Requirements

151Page 181 of 200


Sewer Fund Revenue BondsLast Ten Fiscal Years

Net Revenue

Fiscal Gross Operating Available for

Year Revenues (1) Expenses (2) Debt Service Principal Interest Total Coverage

2011 1,585,281 435,948 1,149,333 - 784,658 784,658 1.46

2012 1,788,503 164,835 1,623,668 250,000 682,806 932,806 1.74

2013 2,285,996 522,657 1,763,339 625,000 671,867 1,296,867 1.36

2014 2,229,571 784,732 1,444,839 640,000 656,056 1,296,056 1.11

2015 2,614,619 919,254 1,695,365 660,000 642,063 1,302,063 1.30

2016 2,720,240 785,109 1,935,131 675,000 619,781 1,294,781 1.49

2017 2,818,015 661,138 2,156,877 695,000 598,363 1,293,363 1.67

2018 2,967,675 1,013,663 1,954,012 720,000 574,469 1,294,469 1.51

2019 3,193,723 1,721,983 1,471,740 745,000 547,900 1,292,900 1.14

2020 3,166,964 2,367,418 799,546 895,000 397,205 1,292,205 0.62

(1) Total revenues (including investment earnings) excluding gain on sale of capital assets.(2) Total operating expenses exclusive of depreciation.

Pledged-Revenue Bond Coverage

Debt Service Requirements

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

$2,200,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Net Revenue Available for Debt Service Total Debt Service Requirements

152Page 182 of 200

K-12 School

Year Population (1) Enrollment (2)

2011 47,796 20,1152012 48,038 19,6592013 48,357 18,5242014 48,619 17,8642015 48,640 17,4322016 49,291 16,8602017 49,011 16,8062018 49,006 16,6272019 48,876 16,2942020 48,846 16,200

Personal Per Capita

Income(3) PersonalYear ($ Thousand) Income(3)

2011 1,175,121 23,621 2012 1,174,673 24,453 2013 1,241,808 25,680 2014 1,256,801 25,850 2015 1,248,346 25,665 2016 1,240,869 25,174 2017 1,256,462 25,636 2018 1,262,424 25,760 2019 1,330,564 27,223 2020 1,368,680 28,020

Unemployment

Year Rate (4)

2011 8.4% 2012 7.3% 2013 7.2% 2014 6.1% 2015 6.8%2016 8.0%2017 6.3%2018 5.1%2019 4.9%2020 4.7%

(1) State Department of Finance.(2) State Department of Education-Covina Valley and Charter Oak Unified School Districts.(3) HdL, Coren & Cone.(4) State Employment Development Department.

CITY OF COVINA, CALIFORNIADemographic and Economic Statistics




0

10000

20000

30000

40000

50000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Population K-12 School Enrollment

$21,000

$22,000

$23,000

$24,000

$25,000

$26,000

$27,000

$28,000

$29,000

$1,050,000

$1,100,000

$1,150,000

$1,200,000

$1,250,000

$1,300,000

$1,350,000

$1,400,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

($ M

illi

on)

Personal Income Per Capita Personal Income

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

153Page 183 of 200

Employer Employees Rank

Percentage

of Total City

Employment Employees Rank

Percentage

of Total City

Employment

Covina Valley Unified School District 1,530 1 9.57% 1,418 1 8.71%

Citrus Valley Health Partners-Intercommunity 1,002 2 6.26% 1,014 2 6.23%

Charter Oak Unified School District 578 3 3.61% 625 3 3.84%

Ikea U.S. West, Inc. 325 4 2.03% 283 5 1.74%

Lereta, LLC 251 5 1.57% 237 8 1.46%

City of Covina 239 6 1.49% 259 6 1.59%

Wal-Mart 238 7 1.49% 296 4 1.82%

Vitas Innovative Hospice Care 221 8 1.38% 230 9 1.41%

Charter Homehealth 353 9 2.21%

The Home Depot 211 10 1.32%

4,948 30.94% 4,362 26.80%

CITY OF COVINA, CALIFORNIAPrincipal EmployersAs of June 30, 2020

2020 2019

Source: City of Covina Finance Department, Covina Valley and Charter Oak School Districts and Citrus Valley Medical Center.

154Page 184 of 200

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Total Total Total Total Total Total Total Total Total Total

General government 26.00 27.00 30.00 29.50 23.56 20.56 28.00 25.50 26.50 27.00

Public safety 93.50 91.00 94.00 94.50 99.50 100.50 112.00 99.50 98.50 98.50

Public works 26.50 28.00 25.50 26.50 19.50 19.50 25.00 21.80 21.80 22.80

Culture and recreation 38.50 65.50 57.00 56.50 43.18 43.41 30.94 21.95 22.47 21.93

Community development 2.00 2.50 6.00 5.00 14.50 16.50 7.00 6.50 7.50 9.50

Transit 1.50 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Redevelopment and housing 5.50 3.50 - - - - - - - -

Water utility 12.50 12.00 10.00 12.00 14.00 14.00 14.00 14.00 14.00 14.00

Environmental protection 3.00 3.50 2.50 3.50 3.75 3.75 4.00 3.50 4.00 4.00

Central equipment 4.50 4.50 4.00 4.50 5.50 5.50 3.00 3.00 3.00 3.00

Management information systems 4.50 4.50 5.00 5.50 6.00 6.00 1.00 - 2.00 2.00

Risk management and public liability - - - - - - - - - 1.00

Total full-time equivalent positions 218.00 243.00 235.00 238.50 230.49 230.72 225.94 196.75 200.77 204.73

Source: Finance Department Budget

CITY OF COVINA, CALIFORNIAFull-time Equivalent City Government Employees by Function


General government ,

27.00

Public safety , 98.50

Public works , 22.80 Culture and

recreation , 21.93 Community

development , 9.50

Transit , 1.00

Redevelopment and housing

Water utility , 14.00

Environmental protection , 4.00

Central equipment , 3.00

Management information systems ,

2.00 Risk management and public liability , 1.00

Fiscal Year 2020

155

Page 185 of 200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General GovernmentFinance: Payroll checks issued 4,174 4,175 4,291 6,961 7,038 7,694 7,569 7,369 7,566 7,811 7,557 Accounts payable checks issued 9,290 9,283 8,591 7,498 7,093 6,374 5,729 5,281 5,296 5,500 5,153 Purchase orders issued 7,259 7,054 2,715 921 707 506 538 453 440 461 465 Community Development Block Grant (CDBG): Businesses assisted 3 4 6 6 2 4 - - - - - Jobs created 24 9 4 13 14 12 - - - - - Houses rehabilitated 1 - 7 3 6 4 3 2 1 - - Housing: Transitional House-Number of people served 15 23 14 18 14 17 17 22 11 14 13 Covenants-Monitoring affordable units 483 483 487 504 460 460 460 460 460 460 449

Public SafetyPolice: Physical arrests 3,160 3,041 3,070 2,805 2,322 2,987 2,038 676 3,005 2,746 2,406 Parking violations 15,537 11,900 11,786 12,603 10,831 9,367 8,380 10,062 3,035 8,955 12,678 Traffic violations 6,976 5,874 5,772 5,449 4,475 3,314 1,711 5,426 12,063 1,598 1,355 Fire: Number of calls answered 3,919 3,856 3,996 4,306 4,283 4,643 4,751 4,681 4,641 10,679 11,083 Inspections 2,250 1,066 802 2,319 2,279 2,279 1,389 2,583 1,472 2,843 2,383

Culture and RecreationParks and Recreation: Leaders-in-Training participants 61 67 73 67 54 75 57 66 51 36 12 Youth sports participants 2,890 2,594 2,240 1,863 1,945 1,312 916 1,199 1,130 934 746 Leisure lifestyle classes participants 7,900 7,350 6,398 6,555 6,694 5,920 6,457 5,041 4,520 4,028 2,593 Cultural excursion program participants 478 530 494 543 489 580 565 595 406 468 326 Summer evening event attendees 25,950 27,250 25,950 25,000 25,000 25,000 25,000 16,975 17,170 10,100 9,200 Senior service participants (fee based) 3,202 2,296 1,036 1,248 939 Senior nutrition program meals served 15,530 15,920 15,522 15,539 16,565 18,336 14,641 12,798 11,642 11,628 19,088 Special events 53,000 53,000 53,000 53,000 53,000 53,000 50,000 50,000 50,000 45,000 40,000 Aquatic participants 7,780 7,911 8,244 9,620 10,716 8,750 6,446 8,134 6,011 5,850 3,884 Day Camp Participants 745 842 682 580 402 Library: Circulation Books/Audiobooks/CD'S 151,051 144,535 134,775 126,668 127,254 111,236 102,019 100,913 99,434 97,548 67,451 DVD's 12,740 13,351 11,255 9,729 9,065 7,500 5,806 4,987 4,141 3,314 1,928 Toys 978 2,588 3,436 4,241 2,784

E-books 1,381 3,201 4,466 Total Circulation 163,791 157,886 146,030 134,993 136,319 118,736 108,803 108,488 108,392 108,303 76,629 Gate Count 279,949 234,562 240,350 230,478 222,129 206,514 194,182 189,432 189,021 187,098 120,381

Computer Services Number of hours 22,804 16,172 14,787 14,220 14,976 13,860 10,782 10,374 12,825 12,891 6,298 Number of users 24,194 20,941 19,860 18,156 20,772 18,751 13,946 13,190 19,848 19,581 10,323 Library Cards City Residents - Newly Issued 2,558 2,221 2,219 2,125 2,197 1,760 1,520 1,427 1,413 1,364 963 Non-City Residents - Newly Issued 2,327 2,202 2,580 2,682 2,713 2,118 1,679 1,594 1,257 1,198 865 Total Number of Current Library Cards (2) (2) (2) (2) 25,031 28,909 32,108 35,129 37,927 40,087 32,824 Library materials added Books 5,236 2,729 2,797 3,169 4,903 3,439 2,580 2,866 2,475 1,827 1,600 CDs 287 183 112 120 86 298 222 196 131 198 156 Audiobooks 185 131 97 115 159 128 88 83 129 87 54 DVD's 394 263 232 194 221 181 150 215 155 212 154 Toys 119 99 97 67 27 Total Materials Added 6,102 3,306 3,238 3,598 5,369 4,046 3,159 3,459 2,987 2,391 1,991 Library Programs/Services Storytime participants 1,297 1,911 4,318 2,339 2,060 1,397 1,756 1,649 1,542 1,662 1,317 Adult/Young Adult program participants 1,260 690 700 540 895 423 464 470 536 902 869 Children's program participants 1,693 1,486 1,602 1,582 3,222 3,014 4,264 5,351 7,343 7,264 5,171 Summer Reading Program participants 859 1,096 890 890 702 620 705 799 848 1,076 350 Joint Summer Reading program participants 671 951 1,006 1,079 1,079 811 1,153 1,468 1,818 1,806 Accelerated Reader (AR) Testing Program Participants 1,861 2,665 In-N-Out Cover-to-Cover Reading Program 181 202 240 252 274 244 366 Outreach (Class Visits on and off-site, number of participants 546 1,227 591 Homework Help Tutors (2) 21* 23* 16* 21* 12* 11 15 10 - - Homework Help Participants (2) 677 1,132 1,410 1,120 738 997 529 418 - -

Library volunteer hours (3) 8,640 10,826 11,454 12,065 11,766 13,535 14,251 13,754 8,693 5,877 2,224


Operating Indicators by Function (1)


156Page 186 of 200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020


Operating Indicators by Function (1)


Literacy Number of tutors (2) (2) 37 36 29 27 23 23 22 20 16 Number of adults served (2) (2) 91 105 101 97 79 79 92 83 81 Number of children served (2) (2) 46 40 52 37 31 39 43 44 31 Reference Questions Adult/Circulation 17,985 11,354 9,808 12,055 20,907 20,436 21,418 22,561 20,281 20,778 15,607 Childrens 14,396 8,005 9,135 6,885 8,862 6,918 6,650 5,738 7,839 8,312 6,090 Total Reference Questions 32,381 19,359 18,943 18,940 29,769 27,354 28,068 28,299 28,120 29,090 21,697

PlanningPlanning reviews 336 320 465 254 281 610 1,733 1,820 1,911 283 156 Permits issued 443 400 422 1,911 2,204 2,253 1,344 1,411 1,482 71 - Inspections (2) (2) (2) 416 471 531 192 230 242 - -

BuildingBuilding reviews 336 320 336 350 450 503 1,362 561 792 820 842 Permits issued 443 400 1,080 1,060 1,599 1,658 3,494 1,514 894 3,927 3,290 Inspections 3,682 3,400 5,441 5,375 6,078 6,029 4,464 3,038 5,137 4,265 4,506

Transit Average daily parking customers (station & structure paid) 765 742 886 823 821 845 747 (2) (2) 666 40 Average monthly parking customers (structure paid) 1,296 688 608 433 Dial-A-Cab participants (monthly average) 1,432 1,515 1,639 1,981 1,920 1,918 1,158 1,454 1,584 1,722 1,468 Subsidized bus passes (monthly average) 75 77 60 44 53 53 28 52 48 50 30

Code EnforcementTotal Inspections 7,991 10,034 13,919 5,591 4,601 4,434 1,840 1,902 2,956 834 2,113 Signs removed from public right of way 575 528 3,516 661 1,053 1,083 522 233 153 294 278 Industrial Waste Inspections 12 593 488 133 724 413 1 2 220 176 138

Water UtilityAverage daily consumption (gallons) 5,510,880 5,445,095 4,816,719 5,048,319 5,125,309 4,450,897 3,944,447 4,398,752 5,000,000 5,760,000 3,600,000 Meter reads 51,926 54,423 101,008 102,768 106,430 103,851 103,490 (2) 2,291 (2) 2,061 Meter replacements 849 168 73 14 74 6 88 (2) 32 77 28 Consumer responses 2,593 1,715 7,298 7,975 4,765 12,703 5,805 (2) 350 590 727 Service line repairs 99 87 99 83 111 62 48 (2) 59 43 33 Main line repairs 48 43 46 57 38 34 45 (2) 49 70 69

Street MaintenanceTraffic sign remove/replace/install 787 244 565 1,392 234 92 185 153 118 102 201 Potholes repaired 1,782 1,928 1,502 2,415 2,738 4,058 3,629 4,645 3,802 5,390 6,379 Curb painted (lf) 42,446 27,653 51,424 22,884 10,117 15,436 17,860 37,370 16,960 75,262 26,788 Utility cuts repaired 104 81 24 5 15 - (2) (2) 20 73 87 Trees trimmed 375 703 352 305 474 799 2,163 231 255 129 158

Equipment MaintenancePreventative maintenance service 359 478 568 536 475 492 367 325 284 291 302 Safety inspections 372 474 626 564 516 563 425 371 320 319 327 New Tires (2) (2) 142 145 127 122 82 117 98 121 115 Tire repairs 327 243 253 248 282 315 177 183 164 167 122 Work orders completed (2) (2) 1,243 1,194 1,043 1,345 829 681 631 646 657

Environmental ProtectionRefuse collected (tons/month) 2,642 2,559 2,601 2,242 2,222 2,334 2,363 2,482 2,450 2,416 1,825 Recyclables collected (tons/month) 193 192 198 188 188 188 192 185 162 162 200 Green waste collected (tons/month) 546 542 536 525 483 469 463 462 457 469 366 Compressed natural gas sold (gallon equivalents) 25,462 22,704 19,093 13,865 59,351 28,080 33,845 30,999 30,182 29,045 14,427

(1) Information provided by various departments(2) Information not available.(3) Combination of Homework Help volunteer hours and Total volunteer hours.* Revised

157Page 187 of 200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

General governmentBuildings-civic center 1 1 1 1 1 1 1 1 1 1 1

Public safetyPolice: Stations 1 1 1 1 1 1 1 1 1 1 1 Patrol units 26 26 27 26 24 23 23 20 20 20 21 Fire stations 3 3 3 3 3 3 3 3 3 3 3

Public worksArterial streets (miles) 35 35 35 35 35 35 35 35 35 35 47Residential streets (miles) 82 82 82 82 82 81 87 81 81 81 80Curb and gutter (miles) 240 240 240 240 240 240 230 230 230 230 230Sidewalk (square feet) 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000 1,001,000Traffic signals 60 60 60 60 60 60 65 65 65 65 70Sanitary sewer (miles) 121 121 121 121 121 121 121 121 121 121 120Storm water catch basins 71 71 71 82 82 82 82 71 112 112 112Street trees 9,576 9,563 9,347 9,325 9,325 9,325 9,465 9,485 9,473 9,501 9,266Parking structure (spaces) 125 125 125 125 125 125 110 110 110 110 110

Culture and recreationParks and recreation: Park acreage 53 53 53 53 53 51 54 54 54 54 54 Parks 8 8 8 8 8 9 9 9 9 9 9 Horse-walking trails 1 1 1 1 1 1 1 1 1 1 1 Nature trails 1 1 1 1 1 1 1 1 1 1 1 Playground areas 8 8 8 8 8 8 9 9 9 9 9 Swimming pools 2 2 2 2 2 2 2 2 2 2 2 Softball fields 3 3 3 3 3 3 3 3 3 3 3 Baseball fields 3 3 3 3 3 3 3 3 3 3 3 Basketball courts 10 10 10 10 10 10 10 10 10 10 10 Roller hockey rinks 2 2 2 2 2 2 2 2 2 2 2 Tennis courts 3 3 3 3 3 3 3 3 3 3 3 Buildings and centers 12 12 12 12 12 12 13 13 13 13 13 Library buildings 1 1 1 1 1 1 1 1 1 1 1

TransitParking structure (vehicle spaces) 655 655 655 655 655 655 665 665 665 665 663 Parking lot (secured bicycle spaces) 36 36 36 36 36 - 40 40 40 56 16 Transit vehicles 5 5 5 5 5 5 5 5 5 5 5

HousingTransitional housing 1 1 1 1 1 1 1 1 1 1 1

Water utilityWater tanks 8 8 8 9 9 9 9 9 9 9 9 Pump stations 6 6 6 7 7 7 6 6 6 7 7 Water mains (miles) 102 102 102 102 102 102 102 102 102 102 102 Service meters 8,437 8,703 8,552 8,650 8,650 8,650 8,633 8,623 8,623 8,600 8,640 Fire hydrants 1,043 1,057 1,057 1,059 1,059 1,059 992 1,059 1,059 1,132 1,096

(1) Information provided by various departments for last nine fiscal years. There are no capital asset

statistics available for community development and environmental protection.(2) Information not available.


Capital Asset Statistics by Function (1)


158Page 188 of 200

6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020Water Purchased (in acre-feet) Covina Irrigating Company (CIC) 5,303.01 6,059.89 5,868.75 4,686.30 4,429.00 4,166.26 4,756.72 5,068.03 5,035.22 5,106.32 Three Valley Muni Water Dist(MWD) 148.50 - 238.50 1,427.10 931.00 467.20 198.00 62.70 - -

Total Purchased 5,451.51 6,059.89 6,107.25 6,113.40 5,360.00 4,633.46 4,954.72 5,130.73 5,035.22 5,106.32 Potable Water Sold (in acre-feet) 5,418.59 5,410.57 5,479.33 5,738.46 4,986.00 4,418.34 4,508.53 4,909.82 4,720.74 4,620.64 Change from previous year -14.18% -0.15% 1.27% 4.73% -13.11% -11.39% 2.04% 8.90% -3.85% -2.12%Population 47,796 48,038 48,357 48,619 49,002 48,984 49,011 49,006 48,876 48,846 Cost of CIC Water $/a-f 425.00$ 425.00$ 450.00$ 475.00$ 475.00$ 495.00$ 495.00$ 530.00$ 530.00$ 495.00$ Cost of MWD Water $/a-f 754.00 793.00 849.00 875.00 879.41 906.76 981.67 987.00 987.00 987.00

Number of Water Accounts(1)8,532 8,606 8,583 8,635 8,550 8,638 8,642 8,656 8,701 8,506

6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020Operating RevenueCharges for Services 8,872,848 10,515,236 10,902,689 13,337,157 10,896,780 10,436,434 11,011,015 11,138,975 9,586,220 10,673,985

Operating ExpensesSource & supply 3,194,055 2,943,016 3,325,059 3,944,941 3,146,588 2,707,841 2,849,099 3,190,768 3,116,482 3,067,435 Production & storage 511,794 507,877 645,858 497,422 556,304 911,509 1,072,317 2,224,760 928,941 1,093,228 Transmission & distribution 1,207,591 1,423,143 1,531,620 1,394,900 1,732,307 613,017 1,604,822 1,790,159 1,096,437 1,535,521 Customer acct & collections 640,413 857,370 1,182,150 1,082,024 1,061,295 1,363,414 1,474,373 1,347,476 1,304,399 906,296 Administrative & general 1,026,874 655,696 835,384 904,636 638,819 798,833 238,355 (68,719) 1,872,999 1,539,142 Depreciation 1,056,167 783,715 779,081 867,235 957,051 953,511 964,403 1,006,332 1,131,906 1,276,414

Total Operating Expenses 7,636,894 7,170,817 8,299,152 8,691,158 8,092,364 7,348,125 8,203,369 9,490,776 9,451,164 9,418,036

Net Revenues 1,235,954 3,344,419 2,603,537 4,645,999 2,804,416 3,088,309 2,807,646 1,648,199 135,056 1,255,949

1999 Bond Installment Payments 218,555 - - - - - - - - - 2010 Bond Installment Payments 192,308 1,173,262 990,262 986,413 710,708 990,113 988,713 985,413 986,613 988,713

Coverage 3.01 2.85 2.63 4.71 3.95 3.12 2.84 1.67 0.14 1.27

6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021*Minimum Charge:

5/8" & 3/4" 30.87$ 31.90$ 33.24$ 33.24$ 33.24$ 33.24$ 33.24$ 33.24$ 33.24$ 1" 45.71 47.33 49.44 49.44 49.44 49.44 49.44 49.44 49.44

1-1/2" 70.43 73.04 76.43 76.43 76.43 76.43 76.43 76.43 76.43 2" 108.54 111.80 115.15 115.15 115.15 115.15 115.15 115.15 115.15 3" 203.52 209.63 215.92 215.92 215.92 215.92 215.92 215.92 215.92 4" 339.18 349.36 359.84 359.84 359.84 359.84 359.84 359.84 359.84 6" 678.39 698.74 719.70 719.70 719.70 719.70 719.70 719.70 719.70 8"

Charge per hunderd cubic feet (hcf):Single Family (0-16 ccf) 2.49 2.58 2.71 2.71 2.71 2.71 2.71 2.71 2.71 Single Family (17+ ccf) 2.77 2.88 3.02 3.02 3.02 3.02 3.02 3.02 3.02 Multi-Family (0-12 ccf) 2.49 2.58 2.71 2.71 2.71 2.71 2.71 2.71 2.71 Multi-Family (13+ ccf) 2.71 2.82 2.96 2.96 2.96 2.96 2.96 2.96 2.96

Commercial/Institutional 2.89 3.01 3.16 3.16 3.16 3.16 3.16 3.16 3.16 Industrial/Manufacturing 2.51 2.61 2.74 2.74 2.74 2.74 2.74 2.74 2.74 Irrigation/Landscaping 2.89 3.01 3.16 3.16 3.16 3.16 3.16 3.16 3.16

City/Miscellaneous 2.52 2.62 2.75 2.75 2.75 2.75 2.75 2.75 2.75 Capital Improvements Projects Fee:

5/8" & 3/4" 2.54 2.54 2.54 2.54 2.54 2.54 2.54 2.54 2.54 1" 6.36 6.36 6.36 6.36 6.36 6.36 6.36 6.36 6.36

1-1/2" 12.72 12.72 12.72 12.72 12.72 12.72 12.72 12.72 12.72 2" 32.55 32.55 32.55 32.55 32.55 32.55 32.55 32.55 32.55 3" 61.03 61.03 61.03 61.03 61.03 61.03 61.03 61.03 61.03 4" 101.71 101.71 101.71 101.71 101.71 101.71 101.71 101.71 101.71 6" 203.43 203.43 203.43 203.43 203.43 203.43 203.43 203.43 203.43 8"

Private Fire Standby Service:4" 20.08 20.88 21.71 21.71 21.71 21.71 21.71 21.71 21.71 6" 58.33 60.66 63.09 63.09 63.09 63.09 63.09 63.09 63.09 8" 124.32 129.29 134.46 134.46 134.46 134.46 134.46 134.46 134.46

10" 223.56 232.50 241.80 241.80 241.80 241.80 241.80 241.80 241.80 * Information presented is current as of 12/22/20

Customer Type of Business Consumption (in acre-feet)

% of total consumption Revenue

% of total water sales

Covina School District Governmental 112.71 2.44% $185,328.42 2.21%Inter-Comm Health SVC Commercial 79.68 1.72% $116,580.73 1.39%Charter Oak Unified School Dist Governmental 58.82 1.27% $85,114.08 1.02%Covina 023-Woods 206 LP Multiple Family 58.70 1.27% $85,196.66 1.02%City of Covina Governmental 38.54 0.83% $1,714.62 0.02%Miracle Mile Properties LP Multiple Family 31.95 0.69% $43,358.22 0.52%Lvgem Hotel Corporation Commercial 28.39 0.61% $45,576.04 0.54%Spruell, Rosario O. Multiple Family 27.69 0.60% $37,462.55 0.45%Olive Tree Apts Multiple Family 24.11 0.52% $10,693.13 0.13%Rayne Soft Water Svc Commercial 19.18 0.42% $23,459.12 0.28%

TOTALS 479.77 10.38% 634,484$ 7.57%

GRAND TOTAL CONSUMPTION 4,620.64 GRAND TOTAL SALES 8,383,891$

(1) Information obtained from Water information system(2) Information obtained from Covina Comprehensive Annual Financial Report

Water System Fund Revenues and Expenses(2)

Water Rates(1)

Largest Water Accounts(1)

City of Covina, CaliforniaContinuing Disclosure

Water System

Summary of Operations

159Page 189 of 200

6/30/2011 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/2020Operating RevenueSpecial Assessments 1,464,430 1,750,240 2,263,321 2,213,642 2,596,318 2,683,503 2,760,749 2,833,092 2,923,535 2,905,488

Operating ExpensesGeneral & Administrative 435,948 164,835 522,657 784,732 919,254 785,109 661,138 1,013,663 1,721,983 2,367,418 Depreciation 25,461 28,319 42,314 110,795 167,735 167,735 167,735 167,735 168,680 179,627

Total Operating Expenses 461,409 193,154 564,971 895,527 1,086,989 952,844 828,873 1,181,398 1,890,663 2,547,045

Net Revenues 1,003,021 1,557,086 1,698,350 1,318,115 1,509,329 1,730,659 1,931,876 1,651,694 1,032,872 358,443

2009 Bond Installment Payments 685,931 932,806 1,296,869 1,296,056 1,298,981 1,294,781 1,293,363 1,294,469 1,292,900 266,966 2019 Ref Bond Installment Payments 1,025,239

Coverage 1.46 1.67 1.31 1.02 1.16 1.34 1.49 1.28 0.80 1.34

6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 6/30/20208.62 8.62 10.36 10.57 10.88 11.21 11.45 11.45

(1) Monthly Rates

City of Covina, CaliforniaContinuing Disclosure

Wastewater System

Sewer Fund Revenues and Expenses

Sewer Rates (1)

160Page 190 of 200

CITY OF COVINA

APPROPRIATIONS LIMIT WORKSHEET NO. 6

WITH INDEPENDENT ACCOUNTANTS’ REPORT

ON AGREED-UPON PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEET NO. 6

FOR THE YEAR ENDED JUNE 30, 2020

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INDEPENDENT ACCOUNTANTS’ REPORT ON AGREED-UPON PROCEDURES

APPLIED TO APPROPRIATIONS LIMIT WORKSHEET NO. 6

Honorable Mayor and Members of the City Council of the City of Covina

Covina, California

We have performed the procedures enumerated below to the accompanying Appropriations Limit Worksheet No. 6 of the City of Covina, California (the City) for the year ended June 30, 2020. These procedures, which were agreed to by the City and the League of California Cities (as presented in the League publication entitled “Article XIII-B Appropriations Limit Uniform Guidelines”) were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The City’s management is responsible for the Appropriations Limit Worksheet No. 6. The sufficiency of the procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures performed and our findings were as follows:

1. We obtained the completed Worksheet No. 6 for the year ended June 30, 2020, and compared thelimit and annual adjustment factors included in that worksheet to the limit and annual adjustmentfactors that were adopted by resolution of the City Council. We also compared the population andinflation options included in the aforementioned worksheet to those that were selected by arecorded vote of the City Council.

No exceptions were noted as a result of performing this procedure.

2. For the accompanying Appropriations Limit Worksheet No. 6, we added last year’s limit to thetotal adjustments, and compared the resulting amount to this year’s limit. We also recalculated theadjustment factor and the adjustment for inflation and population, and compared results to theamounts on Worksheet No. 6.


3. We compared the prior year appropriations limit presented in the accompanying AppropriationsLimit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for theprior year.


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2

This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the America Institute of Certified Public Accountants. We were not engaged to, and did not, conduct an examination or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriation limit for the base year, as defined by the League publication entitled “Article XIIIB Appropriations Limitation Uniform Guidelines.” This report is intended solely for the use of the City Council and management of the City of Covina, California, and is not intended to be, and should not be, used by anyone other than these specified parties.

CliftonLarsonAllen LLP Irvine, California February 8, 2021

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3

CITY OF COVINA

APPROPRIATIONS LIMIT WORKSHEET NO. 6

For the year ended June 30, 2020 Appropriations limit for fiscal year ended June 30, 2019 (Note 2) $ 103,018,129 Adjustment factors for the fiscal year ended June 30, 2020 (Note 2): Inflation Population Factor Factor Combined

(Note 3) (Note 4) Factor 1.0385 0.9999 1.0384 x 0.0384 Adjustment for inflation and population 3,955,896 Appropriations limit for fiscal year ended June 30, 2020 $ 106,974,025 See accompanying notes to appropriations limit worksheet No. 6.

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4

CITY OF COVINA

NOTES TO APPROPRIATIONS LIMIT WORKSHEET NO. 6

For the year ended June 30, 2020 1. PURPOSE OF LIMITED PROCEDURES REVIEW

Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to an agreed-upon procedures review in connection with the annual audit.

2. METHOD OF CALCULATION

Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed at Notes 3 and 4 below.

3. INFLATION FACTORS

A California governmental agency may adjust its appropriations limit by either the annual percentage change in the 4th quarter per capita personal income (which percentages are supplied by the State Department of Finance), or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction. The factor adopted by the City of Covina for the fiscal year 2019-2020 represents the annual percentage change for per capita personal income.

4. POPULATION FACTORS

A California governmental agency may adjust its appropriations limit by either the annual percentage change of the jurisdiction’s own population, or the annual percentage change in population in the County where the jurisdiction is located. The factor adopted by the City for fiscal year 2019-2020 represents the annual percentage change in population for the County of Los Angeles.

5. OTHER ADJUSTMENTS

A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City of Covina had no such adjustments for the year ended June 30, 2020.

Page 195 of 200


1

To the Honorable City Council of the City of Covina

Covina, California

We have audited the financial statements of the governmental activities, business-type activities, each major fund and aggregate remaining fund information of the City of Covina, California (the City), for the year ended June 30, 2020. Professional standards require that we provide you with information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our planning letter to you dated May 20, 2020. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters

Qualitative Aspects of Accounting Practices

Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year ended 2020. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected.

The most sensitive estimates affecting the City’s financial statements were as follows:

a. The annual required contributions, pension expense, net pension liability andcorresponding deferred outflows of resources and deferred inflows of resources forthe City’s public defined benefit plans with CalPERS are based on actuarialvaluations provided by CalPERS.

b. The actuarily determined contributions, OPEB expense, net OPEB liability, andcorresponding deferred outflows of resources and deferred inflows of resources forthe City’s OPEB plan are based on certain actuarial assumptions and methodsprepared by an outside consultant.

Page 196 of 200

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Significant Audit Matters (Continued) Qualitative Aspects of Accounting Practices

c. Management’s estimate of the claims payable liabilities related to general liability and

worker’s compensation claims are based on actuarial assumptions and methods prepared by an outside actuary.

We evaluated the key factors and assumptions used to develop these estimates in determining that they were reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were reported in Note 9 regarding CalPERS defined benefit plans, Note 11 regarding claims payable, Note 17 regarding the City’s other post-employment benefit plan and Note 23 related to the restatement of net position. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The following material misstatements detected as a result of audit procedures were corrected by management:

We proposed an adjustment to allocate a portion of the net OPEB liability to the Enterprise Funds, which resulted in a restatement of beginning net positions that, in our judgment, had a significant effect on the City’s financial reporting process.

Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated February 8, 2021.

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3

Significant Audit Matters (Continued) Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters We applied certain limited procedures to management’s discussion and analysis, the miscellaneous plan schedule of changes in the net pension liability and related ratios and the schedule of contributions, the safety plan schedule of proportionate share of the net pension liability and the schedule of contributions, the other post-employment benefit plan schedule of changes in the net OPEB liability and related ratios and the schedule of contributions - OPEB and the budgetary comparison schedules for the General Fund and Measure R Special Revenue Fund, which are required supplementary information (RSI) that supplements the financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI. We were engaged to report on the combining and individual fund financial statements and schedules (supplementary information), which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance.

Page 198 of 200

4

Restriction on Use This information is intended solely for the information and use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

CliftonLarsonAllen LLP Irvine, California February 8, 2021

Page 199 of 200

DESCRIPTION ASSET LIABILITY NET POSITION REVENUE EXPENSE

Waived AJE #1Governmental Activities

Net OPEB Liability 6,649 Deferred Outflows - OPEB 8,419 Deferred Inflows - OPEB (2,315) Expense - OPEB (12,753)

Other AggregateNet OPEB Liability (3,676) Deferred Outflows - OPEB (4,655) Deferred Inflows - OPEB 1,280 Expense - OPEB 7,051

Water Enterprise FundNet OPEB Liability 1,877 Deferred Outflows - OPEB 2,377 Deferred Inflows - OPEB (653) Expense - OPEB (3,601)

Sewer Enterprise FundNet OPEB Liability (7,157) Deferred Outflows - OPEB (9,063) Deferred Inflows - OPEB 2,491 Expense - OPEB 13,729

TOTAL WAIVED ADJUSTING JOURNAL ENTRIES (2,922) (1,504) - - 4,426

OVERALL NET POSITION EFFECT 4,426

DEBIT (CREDIT)

City of CovinaWaived Adjusting Journal Entries

June 30, 2020

To record the estimated impact to the net OPEB liability and related accounts utilizing FY 19/20 allocation percentages instead of FY 18/19.

Page 200 of 200


ITEM NO. CC 8

Meeting: CC Regular Meeting - Feb 16 2021 Title: Fiscal Year 2020-21 Mid-Year Budget Update and Adjustments Resolution CC 2021-09 Presented By: Anita Agramonte, Administrative Services Director

Michael Flores Jr, Management Analyst Recommendation: Staff recommends that the City Council take the following actions:

1. Adopt Resolution CC 2021-09 authorizing budget adjustments for Fiscal Year 2020-21 and receive and file the Fiscal Year 2020-21 Mid-Year Budget Update; and

2. Adopt Resolution CC 2021-13 amending the Executive Compensation Rules to add the Deputy City Manager Classification.

EXECUTIVE SUMMARY: The Mid-Year Budget Update provides an update on the status of the City's finances. The report includes recommended budget revisions as well as year-end revenue and expenditure projections. BACKGROUND: The Fiscal Year 2020-21 General Fund Budget was presented with $39,568,968 in revenues and $40,148,230 in expenditures. A deficit of approximately $579,262 in the General Fund was projected for FY 2020-21, and the use of General Fund reserves was recommended to fund the deficit. The adopted budget utilized $5,163,000 in Transaction and Use Tax funds. The originally adopted budget has been amended over the past several months to include prior year carryovers and additional appropriations authorized by the City Council. Factoring in these amendments and additional appropriations, the current General Fund revenue budget totals $39,630,968 while the budgeted expenditures total $40,449,089. DISCUSSION: As a part of the Mid-Year report, staff has analyzed year to date revenues and expenditures as compared to the budget and identified accounts requiring adjustments. General Fund: The table below summarizes the original Fiscal Year 2020-21 General Fund adopted budget:

The following table summarizes the current Fiscal Year 2020-21 General Fund budget, revised to include any budget resolutions approved by the City Council to date, including encumbrance carryovers:

General Fund Revenues: The table below summarizes Fiscal Year 2020-21 General Fund revenues. The table includes adopted and revised figures, recommended Mid-Year adjustments as well as year-end figures indicating projected Fiscal Year 2020- outcomes. revenue21 proareIncreases andTax Use/ Transactions Tax, Sales jected in Intergovernmental revenues which includes the CARES Act funding the City received. These increases are partially offset by a decrease in Franchises and Other Taxes, as well as Charges for Services revenues.

General Fund Expenditures: The following table summarizes Fiscal Year 2020-21 General Fund expenditures by department. The table includes year to date expenditures as of December 2020, recommended Mid-Year adjustments as well as projected year-end expenditure figures for Fiscal Year 2020-21.

Page 2 of 17

The recommended expenditure Mid-Year adjustments include increases Non-Departmental which is reflective of the Internal Service Fund charges, which were initially projected to be unfunded, necessitating the use of reserves to fund costs including Workers Compensation, Central Equipment and Information Technology. Additionally, increases are projected in the Police Department budget relating to indirect costs, overtime costs, consulting costs, and vehicle repairs. Increases in Public Works and Community Development are attributed to indirect costs and consulting costs. Lastly, adjustments in Parks and Recreation reflect overall decreases due to the inability to hold classes and programs due to COVID-19. Fund Balances: The following table illustrates the General Fund budget including all the recommended Mid-Year adjustments. The General Fund remains balanced with the use of Transaction/Use Tax revenues.

All of the recommended General Fund Mid-Year adjustments are summarized in Resolution 2021-09 and detailed in Exhibit A. Staffing: In fall 2020, the City completed a retirement incentive program in order to reduce operating expenses. The program was funded utilizing salary/benefit monies included in the Fiscal Year 2020/21 Budget and resulted in no additional budget appropriations. Following the program’s completion, departments developed

reorganization plans with a goal of meeting current service needs and retaining cost savings. In some cases, these plans recommend a reduction in manpower and the reclassification of existing job classifications to assume additional functions and higher levels of responsibility. The following departments have submitted changes for Council consideration. Administration: With the retirement of the Senior Economic Development Manager, as proposed, the Assistant to the City Manager would be reclassified to Deputy City Manager to reflect additional duties that have been assumed in

Page 3 of 17

recent months. This includes ongoing coordination between the Community Development Department and Administrative ofsupport licensebusiness refine processes,Division FinanceDepartment Services to housing/homeless services programs (navigation center development, coordination with COG/County) and economic development initiatives, including the recent social media initiative that was developed with the Covina Chamber of Commerce. The incremental cost for the proposed reclassification is $13,088 in FY 2022 and will be offset by salary savings from a vacant Senior Economic Development Manager classification in the Low/Moderate Housing Fund. Public Works: Recently with the retirement of the Executive Assistant to the Director of Public Works some staff in the Public Works Department have stepped up and taken on additional duties and responsibilities. Accordingly, an assessment of workloads and levels of responsibility was conducted and a reclassification of the current Management Analyst to Senior Management Analyst is recommended. This classification has assumed key responsibilities and additional duties like managing the Regional Water Quality Control Board reporting program, coordinating the annual Environmental Services budget preparation, development review and plan checking, Clean Power grants and reporting. Accordingly, it is recommended to reclassify the Environmental Management Analyst position to the Senior Management Analyst role. The additional annual cost for this reclassification is $6,966 of which $6,618 is proposed to be funded equally by the Water and Environmental Service Funds. Other Funds: There are several adjustments recommended in various Special Revenue Funds, Capital Projects Funds, Enterprise Funds, and Internal Service Funds. Most of the adjustments represent housekeeping items including cleanup on Transportation Funds, Environmental, Sewer Fund, Indirect Cost Allocation, and additional Library Literacy grant funding, as well as, Workers Compensation, Public Liability and Central Equipment fund adjustments to reflect full funding of these activities. These adjustments and corrections are further detailed in Exhibit A to Resolution 2021-09. FISCAL IMPACT: The recommended Mid-Year adjustments are detailed in Exhibit A to Resolution 2021-09 and represent a revenue increase of $2,985,114 and an expenditure decrease of $630,101. General Fund revenues are projected to increase by $2,148,114 while expenditures are projected to increase by $1,329,993. The General Fund continues to be balanced with the use of $6,000,000 in Transaction/Use Tax revenues. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): None. ATTACHMENTS: Attachment A - Resolution CC 2021-09 Including Exhibit A - FY 2020-21 Mid-Year Adjustments Summary Attachment B - Resolution CC 2021-13 Including Exhibit A (Deputy City Manager Job Description) & Exhibit B (Executive Salary Schedule 2 16 2021) Respectfully submitted,

Page 4 of 17



CALIFORNIA, AUTHORIZING FISCAL YEAR 2020-2021 MID-YEAR

BUDGET ADJUSTMENTS

WHEREAS, on June 16, 2020, the City Council of Covina adopted Resolution CC 2020-

45 adopting the Fiscal Year 2020-2021 Budget for the City of Covina/Covina Public Financing

Authority/Covina Housing Authority; and

WHEREAS, certain programs included in the Fiscal Year 2020-2021 Budget will have

revenue and expenditures which may vary from the adjusted budget; and

WHEREAS, the City Council desires that the Fiscal Year 2020-2021 Budget be adjusted

for each of these programs to assure budgetary compliance; and

WHEREAS, the cost center adjustments are reported in Exhibit A of this Resolution.



SECTION 1. That the budget adjustments to the City of Covina Fiscal Year 2020-2021

Budget are adopted as listed in Exhibit A and the City Manager is authorized to implement the

same.



APPROVED and PASSED this 16th day of February 2021.


BY:


ATTEST:



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Attachment A


CERTIFICATION



regular meeting held on the 16th day of February 2021, by the following vote:





Dated:



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General Fund

Proposed Revenue Adjustments

Account

Amount Increase /

(Decrease)

General

General - Sales Tax 1010-0000-40200 1,278,000.00

General - Trans Occu 1010-0000-40300 (114,000.00)

General - BusReg-Tax 1010-0000-40500 50,000.00

General - Fran-Tow 1010-0000-40870 36,000.00

General - Fran-Other 1010-0000-40890 (9,000.00)

General - Late Fees 1010-0000-48780 (31,000.00)

General - Transfer-GF 1010-0000-49110 837,000.00

Emergency Services - COVID

Local Governement Relief 1010-1650-42101-COVID 603,108.00

Police Department

Admin - Gain on Sale of Property 1010-1000-48700 1,600.00

Patrol - Court Fine 1010-1130-44100 (150,000.00)

Traffic - School Dis 1010-1200-42500 16,000.00

Police Training - POST Sub 1010-1440-42117 (8,500.00)

Patrol - School Res Off Rev 1010-PP40-42500 (135,000.00)

Animal Control Lic 1010-1800-41100 (38,000.00)

Crime Prevention-AB 109 Realignment 1010-CP20-42113 42,506.00

Public Works

Engineering Permits 1010-2100-41300 6,500.00

Parks & Recreation

Donations 1010-3600-48100 (10,000.00)

Youth Sports Fees - Soccer 1010-RS03-43314 (28,600.00)

Youth Sports Fees - Basketball 1010-RS05-43314 (17,000.00)

Pee Wee Recreation Fees 1010-RS11-43317 (20,000.00)

Donations 1010-RS26-48100 (14,000.00)

Leisure Lifestyle Fees 1010-RS32-43315 (165,000.00)

Cultural Excursion Fees 1010-RS33-43316 (12,000.00)

Aquatics Fees 1010-AQ02-43350 (70,000.00)

Aquatics Fees 1010-AQ05-43350 16,000.00

Library

Library Late Charges 1010-3900-43388 (13,500.00)

City of CovinaFY 2020-21 Mid-Year Adjustments Summary

Exhibit APage 7 of 17


Community Development

Planning - Zoning/Sub 1010-4010-43410 (100,000.00)

Building Insp - Building Permits 1010-4100-41200 45,000.00

Building Insp - Electrical Permits 1010-4100-41220 20,000.00

Building Insp - Mechanical Permits 1010-4100-41260 35,000.00

Building Insp - Plan Review 1010-4100-43400 50,000.00

Code Enf - Fines 1010-4200-44800 15,000.00

Code Enf - Other 1010-4200-48990 32,000.00

Total General Fund Revenue Adjustments 2,148,114.00

Special General Fund

Transaction and Use Tax 1095-0000-40205 837,000.00

Proposed Expenditure Adjustments

Account

Amount Increase /

(Decrease)

City Clerk/Records Management

Other Professional Fees 1010-0700-51990 4,550.00

General Insurance

Indirect Cost Allocation 1010-0880-58900 2,428.28

Police Department


Overtime 1010-1110-50030 10,000.00


Maintenance - Motor Vehicles 1010-1130-52450 5,000.00

Emergency Services - COVID

COVID-19 Costs 1010-1650-5XXXX 317,558.27

Public Works






Parks and Recreation

Regular Full-Time Salaries 1010-3000-50010 (91,330.00)

Regular Part-Time Salaries 1010-3000-50015 (10,000.00)

PERS Contribution 1010-3000-50130 (10,000.00)

Postage 1010-3000-53300 (10,000.00)

Promotional Advertising 1010-3000-53500 (22,000.00)




Overtime 1010-3600-50030 (37,500.00)

Equipment Rentals 1010-3600-52690 (22,680.00)

Overtime 1010-3610-50030 (16,500.00)

Regular Part-Time Salaries 1010-RS03-50015 (13,000.00)



Recreation Program Fees 1010-RS26-51600 (14,000.00)

Instructor Fees 1010-RS32-51350 (115,500.00)

Recreation Program Fees 1010-RS33-51600 (8,000.00)

Recreation Program Fees 1010-AQ02-51600 (71,300.00)

Recreation Program Fees 1010-AQ05-51600 14,000.00

Community Development

Admin - Consulting Fees 1010-4000-51005 20,000.00


Planning - Consulting Fees 1010-4010-51005 50,000.00

Building Insp - Plan Check/Inspection 1010-4100-51560 22,000.00

Library


Regular Part-Time Salaries 1010-LS01-50015 (19,000.00)




Library Services 1010-3900-58390 (18,654.00)

Financial Services Prvd

Transfer-Internal Service Fund 1010-9900-59170 1,360,659.93

Total General Fund Expenditure Adjustments 1,329,993.48

Special General Fund

Transfer-To G/F 1095-0000-59110 837,000.00



Account

Amount Increase /

(Decrease)

Special Revenue Funds

Proposed Revenue Adjustments

Literacy Program

Library Services - Rev 2800-3900-42186 37,834.00

Workforce Literacy Program

Other State Grants 2807-3900-42190 3,320.00

Capital Projects

Parks CIP

Transfer-Special Revenue Fund 4600-3400-49120-P1601 4,000.00


Central Equipment

Transfer - General Fund 7010-6010-49110 (476,000.00)

Workers' Compensation

Transfer - Enterprise Fund 7360-0000-49160 (22,340.07)

Transfer - General Fund 7360-0860-49110 (884,659.93)

Public Liability

Property Damage Charges 7370-0870-43026 85,000.00

Internal Service Charges 7370-0870-48900 242,828.00

Proposed Expenditure Adjustments

LMIH Bond Area 1-Parks

Transfer-Capital Projects Fund 2053-3400-59140-P1601 4,000.00

2004 Series B Tax Allocation Bonds Fund

Consulting Fees 2055-4400-51005-18066 70,000.00

State Gas Tax

Street Infrastructure 2300-2200-55310-P1702 (156,580.23)

Traffic Signal Modification 2300-2200-55340-P1704 (413,558.61)

Street Infrastructure 2300-2200-55310-P2009 (100,000.00)



Prop A

Other Professional Fees 2400-4350-51990 (10,000.00)

Improvements-Not Bldgs/Structures 2400-4350-55200 (150,000.00)

Other Professional Fees 2400-TO01-51990 (50,000.00)

Other Professional Fees 2400-TO13-51990 (100,000.00)

Prop C

Consulting Fees 2405-2100-51005 (12,200.00)

Street Infrastructure 2405-2200-55310 125,000.00

Measure M

Sign Repairs 2420-2200-54770-MUTCD (75,000.00)

Street Infrastructure 2420-2200-55310 (293,308.90)

Improvements-Not Bldgs/Structures 2420-3400-55200-P2101 125,000.00

Literacy Program

Special Supplies 2800-3900-54350 22,500.00

Library Literacy Grant 2800-3900-58390 18,654.00

Enterprise Funds

Water Utility


Transfer - Internal Service Fund 6010-5000-59170 14,789.17

Environmental



Sanitary Sewer




Workers' Compensation

Workers' Comp - Administrators 7360-0860-51310 25,000.00

Medical Fees 7360-0860-51330 180,000.00

Liability & WC Claim Pmt 7360-0860-53000 70,000.00

General Insurance 7360-0860-53010 (202,000.00)

Public Liability

Legal Fees 7370-0870-51200 100,000.00


Liability & WC Claim Pmt 7370-0870-53000 200,000.00




CALIFORNIA, AMENDING THE EXECUTIVE COMPENSATION

RULES TO ADD THE DEPUTY CITY MANAGER CLASSIFICATION

WHEREAS, the City of Covina is a municipal corporation duly organized and existing

pursuant to the Constitution and laws of the State of California; and

WHEREAS, the Administrative Services Department desires to amend the Executive

Compensation Rules to add the classification of Deputy City Manager.



SECTION 1. The City Council approves and authorizes the Human Resources Manager

to add the Deputy City Manager classification as follows:

A. Effective February 16, 2021, the classification of Deputy City Manager shall be

added and shall be designated as Executive Management, and the Job Description

shall be as described in Exhibit A attached hereto;

B. The monthly salary range shall be as reflected in Exhibit B: Executive Salary

Schedule Effective February 16, 2021 as attached hereto;



BY:


ATTEST:

___________________________________________



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Attachment B

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CERTIFICATION








Dated:



EXHIBITS:

Exhibit A: Deputy City Manager Job Description

Exhibit B: Executive Salary Schedule Effective February 16, 2021

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Exhibit A

CITY OF COVINA

DEPUTY CITY MANAGER

DEFINITION:

As an executive member of the City’s Administration Department and under general supervision,

manages, directs and coordinates highly complex programs and projects; serves as a member of the City

Manager’s executive team; and provides highly responsible and professional staff assistance to the City

Manager.

DISTINGUISHING CHARACTERISTICS:

The Deputy City Manager is the administrative level class responsible for the overall planning,

organizing, and administration of the City’s operations, legislative affairs, economic development, and

public information and is expected to perform the full scope of professional duties. This classification is

distinguished from the next higher classification of Assistant City Manager in that the latter is responsible

for the overall management of the city and may act as City Manager in the City Manager’s absence. The

incumbent is considered to be a public administrative generalist and may be assigned specific activities

within the broad range of City operations. Such assignments may include the on-going administration of

certain programs and projects which are of special concern to the City Manager or not confined to any

specific City departments. Along with the City Manager and Assistant City Manager, the Deputy City

Manager provides leadership for the development and implementation of a shared vision, strategy, policy,

and goals for all City activities.

SUPERVISION RECEIVED/EXERCISED:

Receives administrative direction from the City Manager and Assistant City Manager. Exercises direct

and indirect supervision over assigned staff.

ESSENTIAL FUNCTIONS: (include but are not limited to the following)

Assists the City Manager in the general administration of city operations, neighborhood services

and public information functions, goal setting, legislative affairs, high level economic

development activities and negotiations

Provides support to the City Manager in response to requests and ongoing projects involving the

City Council, City committees and other local organizations

Responds to inquiries and provides information regarding City policies, procedures, and other

general information relating to City operations

Facilitates communication among constituents, City staff and the City Council and helps to

ensure consistent implementation of Council policies and decisions

Assists the City Manager in representing the City in relations with the community, advisory com-

mittees, local, state, and federal elected offices and agencies, and other professional organizations

Facilitates the development of community networks to address quality of life issues; may handle

concerns and complaints from residents and businesses

Class specifications are only intended to present a descriptive summary of the range of duties and responsibilities that are

associated with specified positions. Therefore, specifications may not include all duties performed by individuals within a

classification. In addition, specifications are intended to outline the minimum qualifications necessary for entry into the class

and do not necessarily convey the qualifications of incumbents within the position.

Page 14 of 17

DEPUTY CITY MANAGER

Page 2

Page 2 of 3

Coordinates the annual goal setting process involving the City Council, City Departments and

input from the community at-large. Tracks the progress and provides timely reports on the City’s

annual goal-setting efforts

Coordinates with City departments to ensure timely responses and an overall cohesive approach

to a Citywide public information, community outreach and marketing program

Provides strategic direction and develops goals, objectives, policies and procedures for the City's

public information program

Oversees community relations efforts and maintains communications with the media and

community organizations

Performs public and media relations duties; responds to inquiries and requests for information

from the media, governmental agencies, and members of the public; researches and composes

press releases, social media and website content, articles, presentations, and related public

announcements

Takes the lead on the City’s legislative platform adopted annually by the City Council

Tracks bills at the local, county, state and federal level to ensure the City’s position is expressed

Prepares appropriate letters in support or in opposition consistent with the City’s legislative

platform and City position

City representative for various organizations such as: Independent Cities Association, California

Contract Cities Organization, League of California Cites at the Division, State and Federal Level

Manages contracts and serves as the City’s liaison with outside agencies and any other contracts

and agreements that may fall under the City Manager’s Office

May serve as a member of the City’s management team for collective bargaining negotiations

May act with the authority of the City Manager in an atmosphere of close communication and

shared responsibility

Establishes positive working relationships with representatives of community-based

organizations, other agencies, City management and staff, and the public

Performs other duties as assigned

PHYSICAL, MENTAL AND ENVIRONMENTAL WORKING CONDITIONS:

Work is performed primarily in a standard office setting; incumbents may be required to work extended

hours including evenings and weekends from time-to-time. Position requires prolonged sitting, standing,

walking, reaching, twisting, turning, kneeling, bending, squatting, and stooping in the performance of

daily activities. The position also requires grasping, repetitive hand movement and fine coordination in

using a computer keyboard. Additionally, the position requires near vision in reading correspondence,

statistical data and using a computer. Acute hearing is required when providing phone and personal

service. Strong attention to detail and sound cognitive abilities and ability to verbally communicate in

order to accurately and effectively exchange information. The need to lift, drag and push files, paper and

documents in light to moderate amounts of weight is also required.

Some of these requirements may be accommodated for otherwise qualified individuals requiring and

requesting such accommodations.

QUALIFICATIONS: (The following are minimal qualifications necessary for entry into the

classification.)

Education and/or Experience:

Any combination of education and experience that has provided the knowledge, skills and

abilities necessary for a Deputy City Manager. A typical way of obtaining the required

qualifications is to possess the equivalent of six years of responsible local governmental

administrative or managerial experience in a public administration setting, including two years of

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DEPUTY CITY MANAGER

Page 3

Page 3 of 3

supervisory experience and graduation from a four-year college/university with a bachelor’s

degree in public or business administration or a related field. A Master’s degree in a related field

is highly desirable.

License/Certificate:

Possession of, or ability to obtain and maintain, a valid Class C California driver’s license and a

satisfactory driving record.

KNOWLEDGE/ABILITIES/SKILLS: (The following are a representative sample of the KAS’s

necessary to perform essential duties of the position.)

Knowledge of:

Thorough knowledge of innovative approaches to public administration and understanding of

motivating and working in an atmosphere of teamwork; considerable knowledge of the operations

typical of municipal services and experience with creative community building and problem-

solving; awareness and sensitivity about working in a diverse community to achieve lasting

results.

Ability to:

Ability to communicate clearly and concisely, both orally and in writing; develop and maintain

close relationships of trust with other staff, City Council and community stakeholders; be a

catalyst and an agent of positive change to implement the City’s vision; perform complex

professional administrative and analytical work requiring sensitivity to issues; analyze, research

and prepare complex reports on a variety of subjects; represent the City in a variety of meetings;

act as liaison to other City personnel, other agencies, and the public; respond to emergency and

problem situations in an effective manner; understand, explain and apply policies and procedures;

plan, organize, train, evaluate and direct work of assigned staff; perform mathematical

calculations quickly and accurately; interpret, explain and apply applicable laws, codes and

regulations; read, interpret and record data accurately; organize, prioritize and follow-up on work

assignments; work independently and as part of a team; make sound decisions within established

guidelines; analyze unusual situations and resolve them through application of management

principles and practices; follow written and oral directions; and observe safety principles and

work in a safe manner.

Skill to:

Operate standard office equipment including a computer and variety of word processing and

software applications, including financial and accounting programs; deal constructively with

conflict and develop effective resolutions; assist in developing new policies impacting department

operations/procedures; supervise the work of assigned staff; and apply knowledge, principles and

techniques of sound government policy.

Created: 02/16/21

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CITY OF COVINA

EXECUTIVE SALARY SCHEDULE

February 16, 2021

JOB CODE DESCRIPTION MONTHLY ANNUAL HOURLY

8010 ASSISTANT CITY MANAGER

MINIMUM 12,360.34$ 148,324.02$ 71.31$

MAXIMUM 16,100.82$ 193,209.81$ 92.89$

8020 ASSISTANT TO THE CITY MANAGER

MINIMUM 7,639.94$ 91,679.33$ 44.08$

MAXIMUM 9,999.85$ 119,998.17$ 57.69$

8000 CHIEF OF POLICE

MINIMUM 14,169.31$ 170,031.75$ 81.75$

MAXIMUM 18,547.18$ 222,566.14$ 107.00$

8030 DEPUTY CITY MANAGER

MINIMUM 10,200.00$ 122,400.00$ 58.85$

MAXIMUM 13,261.00$ 159,132.00$ 76.51$

8040 DIRECTOR OF COMMUNITY DEVELOPMENT

MINIMUM 9,892.73$ 118,712.75$ 57.07$

MAXIMUM 15,033.78$ 180,405.36$ 86.73$

8063 DIRECTOR OF ADMINISTRATIVE SERVICES

MINIMUM 11,708.98$ 140,507.72$ 67.55$

MAXIMUM 15,918.12$ 191,017.44$ 91.84$

8065 DIRECTOR OF HUMAN RESOURCES

MINIMUM 10,393.56$ 124,722.67$ 59.96$

MAXIMUM 13,936.64$ 167,239.72$ 80.40$

8090 DIRECTOR OF PARKS AND RECREATION

AND LIBRARY SERVICES

MINIMUM 10,393.56$ 124,722.67$ 59.96$

MAXIMUM 13,936.64$ 167,239.72$ 80.40$

8011 DIRECTOR OF PUBLIC WORKS

MINIMUM 11,708.98$ 140,507.72$ 67.55$

MAXIMUM 15,918.12$ 191,017.44$ 91.84$

1 Exhibit BPage 17 of 17


ITEM NO. CC 9

Meeting: CC Regular Meeting - Feb 16 2021 Title: Revise the Existing Water Utility Superintendent Job Description to Ensure the State

Water Resources Control Board Certificates Meet the City's Water Operating Permit Requirements and are Relevant to the Required Job Duties

Presented By: Andy Bullington, Director of Public Works Suzanne Stone, Human Resources Manager

Recommendation: That the City Council approve the request to revise the existing Water Utility Superintendent Job Description/Specification to ensure the required State WaterResources Control Board (SWRCB) certifications meet the City's water operating permit requirements and are relevant to the required job duties.

EXECUTIVE SUMMARY: Currently, the City requires the Water Utility Superintendent to maintain a Treatment certification, Level 3 (T3) and a Distribution certification, Level 5 (D5) from the SWRCB. However, the D5 and T3 certifications are greater than what the State has requires of the City to operate our water system and at this level of certification, it reduces our ability to find qualified applicants for this position. BACKGROUND: On September 18, 2018, this position was reclassified from Water Utility Manager as part of an overall reorganization in Public Works that was approved by City Council (CC 8). However, the City is now aware that the certifications are not in line with the operating permit issued by SWRCB for the City's water system which creates obstacles for recruiting and filling this vacant position with a qualified and competent incumbent. Moreover, developing a succession plan within the organization is critical to the Department and the City. The excess certification requirements impact effective recruiting and succession planning for Public Works. DISCUSSION: Public Works is seeking to fill this vacant position to oversee operations in the water division, thereby providing better service to the public and ensuring adequate staffing is established at the management level to conduct and oversee higher level planning and projects. FISCAL IMPACT: The Water Utility Superintendent position was being underfilled with a part time Special Projects Coordinator position, which is now vacant and will not be filled. Salary savings from the vacant position will be used to cover the salary for the Water Utility Superintendent position. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): N/A. ATTACHMENTS: Attachment A - Water Utility Superintendent (rev 02 16 21)

Respectfully submitted,

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CITY OF COVINA

WATER UTILITY SUPERINTENDENT

DEFINITION:

Under general direction, plans, organizes, coordinates and directs the activities and operations of the Water Division, including the treatment, storage and distribution of water, performance and maintenance of municipal water system infrastructure in compliance with applicable regulatory requirements, customer service and meter reading, capital improvement projects, and financial functions; provides highly responsible and complex administrative and technical support to the Director of Public Works; and performs related duties as required.

DISTINGUISHING CHARACTERISTICS: The Water Utility Superintendent is the managerial level class responsible for the administration and long-term planning for the Water Division in compliance with applicable regulatory requirements, including water operations, treatment and maintenance; and personnel, financial, capital improvement project management. This classification is distinguished from the next lower classification of Water Systems Supervisor or Water Distribution Supervisor by its overall responsibility for the Water Division.

SUPERVISION RECEIVED/EXERCISED: Receives direction from the Public Works Director. Exercises supervision over lower level Public Works Department supervisory, field and technical staff.

ESSENTIAL FUNCTIONS:

(include but are not limited to the following)

• Oversees the operation of the Water Division functions, program, and operations. Maintains full regulatory compliance in all areas of the Water Division.

• Organizes and directs the supervision of daily water treatment and distribution, and infrastructure maintenance activities; reviews activities to ensure compliance with Federal, State, and local laws and regulations.

• Directs the preparation and submittal of detailed water quality reports to various Federal, State, and local regulatory agencies; monitors and evaluates the effectiveness and efficiency of customer service levels and product delivery methods.

• Develops and administers the Water Division budget; forecasts the funds needed for staffing, equipment, materials, and supplies; prepares water rates, fees and charges;

Class specifications are only intended to present a descriptive summary of the range of duties and responsibilities that are associated with specified positions. Therefore, specifications may not include all duties performed by individuals within a classification. In addition, specifications are intended to outline the minimum qualifications necessary for entry into the class and do not necessarily convey the qualifications of incumbents within the position.

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Water Utility Superintendent Page 2

approves expenditures and implements budgetary adjustments as appropriate and necessary to meet the end result.

• Maintains current electronic technology associated to the water industry; Supervisory Control and Data Acquisition (SCADA); customer billing; water usage; work orders; statistics or any other related technical aspect.

• Establishes goals, objectives, schedules, and methods of water treatment, distribution and quality; makes recommendations and assists in the development of long range plans; conducts special studies to determine areas of improvements and/or new programs; assists in feasibility studies and implements programs as directed.

• Provides staff assistance and support to the Director of Public Works; prepares, reviews, and presents staff reports including those for City Council meetings and memoranda, letters, documents, transmittal of electronic data and documents as necessary for dissemination to City Council, City Manager, department heads and utility supervisors and employees, regulatory agencies, industry contacts, vendors, consultants, and customers.

• Reviews customer inquiries, complaints, changes to service levels, and driver route logs; approves billing memoranda to ensure division maintains proper procedures, accuracy, and responsiveness to customers; responses by telephone or in person to citizen inquiries, requests, and complaints; implement remedial actions as required.

• Represents the Department at public meetings and participates in dissemination of public information related to water treatment and distribution activities, capital projects, and financial operations. Attends and participates in professional group meetings; stays abreast of new trends, innovations, rules and regulations related to the water industry.

• Assists the Engineering Division in the preparation and review of plans and specifications for new development and enhanced opportunities for water system improvements. Maintains awareness of water infrastructure construction best practices and industry standards.

• Coordinates the preparation of detailed specifications for the purchase of water treatment and distribution equipment and supplies; implements maintenance management program; administers agreements with consultants, engineers, contractors and vendors, including development of work scope, costs, and detail sufficient to issue bids, requests for proposals, agreements, and purchase requisitions; tracks all agreements and purchase orders; reviews and prepares invoicing; acts as project manager including coordination and technical review.

• Reads and interprets drawings, blueprints, and specifications; inspects completed projects, systems, and installations for compliance with plans and specifications as prepared.

• Prepares, maintains, and presents maintenance and operations logs, progress reports, regulatory reports and other special reports as requested, ensuring compliance with regulatory requirements.

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• Selects, trains, motivates and evaluates assigned personnel; provides or coordinates staff training; works with employees to correct deficiencies and administers appropriate corrective action if needed; recommends and implements employee discipline.

• Assists in the review of plans and service requirements for proposed residential and commercial development ensuring incorporation of specified construction requirements.

• Serves as representative of the City in relations, negotiations, and information exchange with Federal, State, and local regulatory agencies.

• Implements and oversees safety programs and protocols; ensures safety training is completed as required; Investigates and reviews accidents involving Water Division personnel and equipment.

• Maintains industry contacts and remain informed regarding local, State, and Federal changes in water policy and requirements, including regional developments and their potential political, operational, and economic impacts to the City's system.

• Performs other related duties and responsibilities as assigned. PHYSICAL, MENTAL, AND ENVIRONMENTAL WORKING CONDITIONS:

While performing the duties of this class an employee is regularly required to sit; talk or hear, in person and by telephone; use hands and fingers to handle, feel or operate standard office equipment; and reach with hands and arms. Specific vision abilities required by this job include close vision and the ability to adjust focus to read and operate office equipment as necessary during the course of the work assignments. The employee is frequently required to walk and stand to inspect work sites. While performing the duties, employees of this class are regularly required to use written and oral communication skills; read and interpret schematic data, narrative and statistical information and document; analyze and solve problems; use math and apply new information or skills; perform highly detailed work on multiple, concurrent tasks; work under deadlines; and interact with staff, vendors, contractors, regulators, agencies, committees, organizations, entities and the public encountered in the course of the work. The employee periodically works in the field, exposed to the outdoors and all weather conditions. Employee is occasionally exposed to fumes, dust, dirt, and construction site conditions. Employee is required to attend meetings and travel within and outside City limits during normal work hours and periodically on evenings and on weekends and at any time during emergency call outs. QUALIFICATIONS: (The following are minimal qualifications necessary for entry into the classification.)

Education and/or Experience:

Any combination of education and experience that would provide the required knowledge, abilities and skills is qualifying. A typical way to obtain the qualifications would be:

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A Bachelor’s degree from an accredited college or university with major course work in civil engineering, business or public administration chemistry, or a related field, is highly desirable. Five (5) years of increasingly responsible water system operation, maintenance development and regulatory compliance of municipal utility systems experience, including two (2) years of administrative or supervisory responsibility.

License/Certificate:

• Possession of, or ability to obtain, a valid Class C California driver's license.

• Possession of a Grade D4 Water Distribution Operator Certificate issued by the California State Water Resources Control Board is required. A Grade D5 is desirable.

• Possession of a Grade T2 Water Treatment Operator Certificate issued by the California State Water Resources Control Board, is required. A Grade T3is desirable.

KNOWLEDGE/ABILITIES/SKILLS: (The following are a representative sample of the KAS’s necessary to perform essential duties of the position.)

Knowledge of: Principles of water utility organization and management. Principles and practices of water system development, treatment, operation and maintenance, and construction. Contractual agreements and application. Principles and practices of program development and administration; municipal budget preparation and administration. Principles of supervision, training, and performance evaluation; principles and procedures of record keeping; principles of business letter writing and report preparation; office procedures, methods, and equipment including computers and applicable software applications such as word processing, spreadsheets, and databases; pertinent federal, state, and local laws, codes, and regulations.

Ability to:

Oversee and participate in the management of a comprehensive water system. Motivate staff and delegate work efficiently and effectively. Plan, organize and direct the work of water operations. Select, supervise, train and evaluate staff. Participate in the development and administration of divisions’ objectives and procedures and develop related policies. Prepare compliance reports for local, state and federal agencies. Read and review engineering plans and specifications. Prepare and administer large program budgets. Prepare clear and concise administrative and financial reports. Research, analyze and evaluate new service delivery methods and techniques. Operate office equipment including computers and supporting software applications. Understand water wholesaler operations, and maintain interaction and relationship. Understand hydraulics and mathematics as related to water distribution and treatment in a utility system. Work with regulatory agencies and representatives on a wide variety of requirements and issues. Keep up-to-date on federal, state and local safety rules and regulations and assess appropriate safety needs. Prepare clear and concise reports; communicate clearly and concisely, both orally and in writing; and establish and maintain effective working relationships with those contacted in the course of work.

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Skill to:

Operate an office computer and related software, including SCADA; safely and effectively operate a variety of equipment, tools and vehicles used in construction, maintenance and repair activities.

Created: 09/18/2018

Revised: 02/16/2021

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ITEM NO. CC 10

Meeting: CC Regular Meeting - Feb 16 2021 Title: Consideration of Sending a Letter In Support of the Restoration of Congressional

Earmarks Presented By: Chris Marcarello, City Manager Recommendation: Direct staff to send a letter in support of the restoration of congressional earmarks. EXECUTIVE SUMMARY / BACKROUND: Currently, earmarks are banned in the federal budget by internal policies instituted by the Senate and House of Representatives. In the past, earmarks have been used for vital community needs throughout the country. Locally, earmarks have funded ground water cleanup projects, health care facilities, mental health programs and transportation projects. Through prior work of local delegation, the San Gabriel Basin Water Quality Authority (WQA) has been able to leverage federal funding for capital costs and associated treatment and remediation costs to prevent or reduce the contamination of groundwater that serves as a source of drinking water. This funding is crucial in the efforts to remediate the Main San Gabriel Basin. In addition, federal earmarks have been leveraged to access state funding as well as to settle costly litigation. Through these settlements, those responsible for the contamination have contributed $730 million towards the cost of cleanup. However, the WQA has not received an appropriation form the san Gabriel Basin Restoration Fund in over a decade due to the ban on earmarks. DISCUSSION: A letter was received from the San Gabriel Basin Water Quality Authority regarding support for the restoration of congressional earmarks. Staff is recommending that City Council direct staff to send a letter of support. Respectfully submitted,


ITEM NO. CPH 1.

Meeting: CC Regular Meeting - Feb 16 2021 Title: Consideration of Resolutions CC 2021-xx, CC 2021-xx, and CC 2021-xx, Authorizing

Annexation of Territory to City of Covina Community Facilities District No. 2007-1 (Public Services) (Annexation No. 27), and to Call and Hold a Special Election (135 E. Badillo Street, Covina)

Presented By: Brian K. Lee, AICP, Director of Community Development Recommendation: 1. City Council to open the public hearing and consider public testimony; and

2. Continue the public hearing to the meeting of March 16, 2021.

EXECUTIVE SUMMARY / BACKROUND: At the December 1, 2020, City Council meeting, the Council adopted the boundary map showing territory proposed to be annexed as Annexation No. 27, and declared its intention to authorize the annexation of that territory to Community Facilities District (CFD) No. 2007-1 (Public Services). The purpose of the CFD is to finance the public safety and park services that are provided to the territory within the District beyond that provided by the City generally. In Fiscal Year 2020-2021, it has been determined that the cost of these services, for each additional multi-family residential home, will be $542.68 per year. This program has been conceived with the intention that all future residential development, which results in a net increase of non-exempted residential units, would be required to annex to the CFD. The project at 135 E. Badillo Street, Covina, has a total of ten (10) new residential units. The special tax will be applicable to ten (10) residential units in Annexation No. 27. DISCUSSION: The purpose of the public hearing is to 1) authorize the annexation of territory to the CFD (Annexation No. 27); 2) call and hold an election of property owners within the CFD, and 3) authorize the levy of a special tax within Annexation No. 27 to the CFD. The related resolutions are hereby presented to the City Council, pursuant to the Conditions of Approval for ten (10) multi-family residential units to be built at 135 E. Badillo Street, Covina, California. Pursuant to the Conditions of Approval for development of a multi-family development at 135 E. Badillo Street, Covina, the applicant agreed to annex to the CFD, or to pay an in lieu fee based on the financial impact on Police, Fire, Emergency, and Parks services. The builder opted to annex into the CFD. Under the proposed CFD, in Fiscal Year 2020-2021, any newly constructed, non-exempted multi-family residential units are charged $542.68 per year for the following services: police, fire protection and suppression, paramedic services, and park maintenance. This Special Tax appears on the annual Property Tax bill for each unit. The Special Tax authorized by the CFD shall be levied on all units for which building permits were issued on or before May 1 of the preceding fiscal year. FISCAL IMPACT: The “Special Tax” authorized by the proposed Community Facilities District (CFD) will generate $5,426.80 annually, based on ten (10) multi-family residential units at the FY 2020-2021 tax rate of $542.68 per multifamily unit and will be deposited to Account No. 2740-4800-45800. The Special Tax shall be used to pay for the following additional services in the District: police, fire protection and suppression, paramedic services,

and park maintenance. The Special Tax will increase annually by the greater of two percent (2.00%), or the percentage change in the Consumer Price Index. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Californiathe under “project” anot does constituteof annexation the that determined has Staff the

Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15378(b)(4) because such annexation involves the creation of a government funding mechanism which does not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. ATTACHMENTS: Attachment A - Resolution CC 2021-xx Attachment B - Resolution CC 2021-xx Attachment C - Resolution CC 2021-xx Respectfully submitted,

Page 2 of 27

RESOLUTION CC 2021-XX


CALIFORNIA, AUTHORIZING THE ANNEXATION OF TERRITORY

TO COMMUNITY FACILITIES DISTRICT NO. 2007-1 (ANNEXATION

NO. 27) AND AUTHORIZING THE LEVY OF A SPECIAL TAX AND

SUBMITTING THE LEVY OF TAX TO THE QUALIFIED ELECTORS

WHEREAS, this Council, on December 1, 2020, adopted Resolution CC 2020-105

(hereafter referred to as the “Resolution of Intention”) stating its intention to annex territory to

City of Covina Community Facilities District No. 2007-1 (Public Services) (“CFD No. 2007-1”),

pursuant to the Mello-Roos Community Facilities Act of 1982, as amended (the “Act”); and

WHEREAS, a copy of the Resolution of Intention, which states the authorized services

to be provided and financed by CFD No. 2007-1, and a description and map of the proposed

boundaries of the territory to be annexed to CFD No. 2007-1 (“Annexation No. 27”), is on file

with the City Clerk and the provisions thereof are fully incorporated herein by this reference as if

fully set forth herein; and

WHEREAS, on the 16th of March, 2021, this Council held a noticed public hearing as

required by the Act and the Resolution of Intention relative to the proposed annexation of

territory to CFD No. 2007-1; and

WHEREAS, at said hearing all interested persons desiring to be heard on all matters

pertaining to the annexation of territory to CFD No. 2007-1 and the levy of said special taxes

within the area proposed to be annexed were heard and a full and fair hearing was held; and

WHEREAS, prior to the time fixed for said hearing, written protests had not been filed

against the proposed annexation of territory to CFD No. 2007-1 by (i) 50% or more of the

registered voters, or six registered voters, whichever is more, residing in CFD No. 2007-1, or (ii)

50% or more of the registered voters, or six registered voters, whichever is more, residing in the

territory proposed to be annexed to CFD No. 2007-1, or (iii) owners of one-half or more of the

area of land in the territory within CFD 2007-1 and not exempt from special tax, or (iv), owners

of one-half or more of the area of land in the territory proposed to be annexed to CFD No. 2007-

1 and not exempt from the special tax; and

WHEREAS, a boundary map for Annexation No. 27 to CFD No. 2007-1 has been filed

with the County Recorder of the County of Los Angeles, which map shows the territory to be

annexed in these proceedings, and a copy thereof is on file with the City Clerk.



SECTION 1. Recitals. The above recitals are all true and correct.

SECTION 2. Authorization. All prior proceedings taken by this Council with respect to

CFD No. 2007-1 and the proposed annexation of territory thereto have been duly considered and

are hereby determined to be valid and in conformity with the Act.

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SECTION 3. Boundaries. The description and map of the boundaries of the territory to

be annexed to CFD No. 2007-1, on file with the City Clerk, are hereby finally approved, are

incorporated herein by reference, and shall be included within the boundaries of CFD No. 2007-

1, and said territory is hereby annexed to CFD No. 2007-1, subject to voter approval of the levy

of the special taxes therein as hereinafter provided.

SECTION 4. Services. The services which CFD No. 2007-1 is authorized to finance are

in addition to those provided in or required for the territory within CFD No. 2007-1 and the

territory to be annexed to CFD No. 2007-1 and will not be replacing services already available.

A general description of the services to be financed is as follows:

PUBLIC SERVICES

New police services, fire protection and suppression services, paramedic

services, and park maintenance, including but not limited to (i) the costs of

contracting services, (ii) related facilities, equipment, vehicles,

ambulances, fire apparatus and supplies, (iii) the salaries and benefits of

City staff that directly provide police services, fire protection and

suppression services, paramedic services, and park maintenance

respectively, and (iv) City overhead costs associated with providing such

services within CFD No. 2007-1. The Special Tax provides only partial

funding for Public Services.

SECTION 5. Special Taxes. It is the intention of this City Council that, except where

funds are otherwise available, a special tax sufficient to pay for said services to be provided in

CFD No. 2007-1 and the territory proposed to be annexed as part of Annexation No. 27, secured

by recordation of a continuing lien against all non-exempt real property in Annexation No. 27,

will be levied annually within the boundaries of Annexation No. 27 from and after the

annexation of such property to CFD No. 2007-1. The special taxes shall be those as originally

authorized through the formation of CFD No. 2007-1 and adopted by Ordinance of this

legislative body, and no changes or modifications are proposed in the special taxes from those as

originally set forth and made applicable to CFD No. 2007-1.

For particulars as to the rate and method of apportionment of the proposed special tax

(the “RMA”), reference is made to the attached and incorporated Exhibit “A,” which sets forth in

sufficient detail the method of apportionment to allow each landowner or resident within

Annexation No. 27 to clearly estimate the maximum annual amount that said person will have to

pay on said special tax.

SECTION 6. Election. The provisions of the Resolution of Intention of the City, each

as heretofore adopted by this Council, are by this reference incorporated herein as if fully set

forth herein.

(a) Pursuant to the provisions of the Act, the proposition of the levy of

the special tax within Annexation No. 27 shall be submitted to the voters

within Annexation No. 27 at an election called therefore as hereinafter

provided. This Council hereby finds that twelve (12) or more persons have

not been registered to vote within Annexation No. 27 for each of the 90

days preceding the close of the hearing heretofore conducted and

Page 4 of 27


concluded by this Council for the purposes of these annexation

proceedings. Accordingly, and pursuant to Section 53326 of the Act, this

Council finds that for purposes of these proceedings the qualified electors

are the landowners within Annexation No. 27 and that the vote shall be by

said landowners, each having one vote for each acre or portion thereof

such landowner owns in Annexation No. 27.

(b) Pursuant to Section 53326 of the Act, the election shall be

conducted by mail ballot under applicable sections of the California

Elections Code, commencing with Section 4000 of said code with respect

to elections conducted by mail. The Council called a special election to

consider the measures described and incorporated in the ballot, attached as

Exhibit “B,” which election was held on March 16, 2021, (hereafter

referred to as “Election Day”). The City Clerk was the election official to

conduct the election and provided each landowner in the territory to be

annexed to CFD No. 2007-1, a ballot in the form of Exhibit “B”, which

form is hereby approved. The City Clerk has accepted the ballots of the

qualified electors received prior to 7:30 p.m. on Election Day, whether

received by mail or by personal delivery.

(c) This Council hereby further finds that the provision of Section

53326 of the Act requiring a minimum of 90 days to elapse before said

election is for the protection of voters, has been waived by the voters and

the date for the election hereinabove specified is established accordingly.



APPROVED and PASSED this ___ day of _________, 2021.


BY:


ATTEST:

___________________________________________



Page 5 of 27


CERTIFICATION


that Resolution CC 2021-XX was duly adopted by the City Council of the City of Covina at a

regular meeting held on the ____ day of ______________, 2021, by the following vote:





Dated:

____________________________________________



Page 6 of 27

Resolution CC 2021-XX Exhibit A

EXHIBIT A

FIRST AMENDED RATE AND METHOD OF APPORTIONMENT

Page 7 of 27


FIRST AMENDED

RATE AND METHOD OF APPORTIONMENT

CITY OF COVINA

COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES)

A special tax as hereinafter defined shall be levied on and collected for Community Facilities District No. 2007-1 (Public Services) of the City of Covina (“CFD No. 2007-1”) each Fiscal Year, commencing in Fiscal Year 2007-2008, in an amount determined by the City Council of the City of Covina through the application of the appropriate Special Tax for “Developed Property,” as described below. All of the real property in CFD No. 2007-1, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent, and in the manner herein provided.

A. DEFINITIONS

The terms hereinafter set forth have the following meanings:

“Act” means the Mello-Roos Communities Facilities Act of 1982 as amended, being Chapter 2.5, Division 2 of Title 5 of the Government Code of the State of California.

“Administrative Expenses” means any actual ordinary and necessary expense of the City of Covina, or designee thereof or both, to carry out the administration of CFD No. 2007-1 related to the determination of the amount of the levy of the Special Tax, the collection of the Special Tax including the expenses of collecting delinquencies, the payment of a proportional share of salaries and benefits of any City employee whose duties are directly related to the administration of CFD No. 2007-1, fees and expenses for counsel, Special Tax consultant and other consultants hired by the City in relation to CFD No. 2007-1, costs associated with responding to public inquiries regarding CFD No. 2007-1, and costs otherwise incurred in order to carry out the authorized purposes of CFD No. 2007-1.

“Affordable Housing” means any Unit within CFD No. 2007-1 that is subject to a written and recordable covenant, deed restriction, resale restriction, regulatory agreement or similar agreement with either the City of Covina or the Redevelopment Agency of the City of Covina, which restricts the amount of rent for that Unit to “affordable rent” (as that term is defined in California Health and Safety Code Section 50053) for a period of not less than fifty-five (55) years, or which restricts the purchase price for that Unit to “affordable housing cost” (as that term is defined in California Health and Safety Code Section 50052.5) for a period of not less than forty-five (45) years. A Unit shall no longer be considered Affordable Housing following the expiration or termination of the applicable covenant, restriction or agreement.

“Annual Escalation Factor” means for the Special Tax, the greater of (i) two percent (2.00%), or (ii) the percentage change in the Consumer Price Index for the Calendar Year ending in December of the prior Fiscal Year.

“Assessor’s Parcel” means a lot or parcel of land designated on an Assessor’s Parcel Map with an assigned Assessor’s Parcel number within the boundaries of CFD No. 2007-1.

Page 8 of 27


“Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by Assessor’s Parcel number.

“Base Year” means Fiscal Year ending June 30, 2008.

“Boundary Map” means the map of the boundaries for CFD No. 2007-1, as approved by the City Council, and recorded with the County in maps of assessments and community facilities districts.

“Building Permit” means a permit for new construction for a residential dwelling Unit. For purposes of this definition, “Building Permit” shall not include permits for construction or installation of retaining walls, utility improvements, or other such improvements not intended for human habitation.

“Calendar Year” means the period commencing January 1 of any year and ending the following December 31.

“CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirements and providing for the levy and collection of the Special Tax.

“CFD No. 2007-1” means Community Facilities District No. 2007-1 (Public Services) established by the City under the Act.

“City” means the City of Covina.

“City Council” means the City Council of the City, acting as the Legislative Body of CFD No. 2007-1, or its designee.

“Consumer Price Index” means the index published by the U.S. Department of Labor, Bureau of Labor Statistics for all urban consumers in the Los Angeles-Riverside-Orange County area.

“County” means the County of Los Angeles.

“Developed Property” means all Assessor’s Parcels within CFD No. 2007-1 for which Building Permits were issued on or before May 1 preceding the Fiscal Year for which the Special Tax is being levied, provided that a Final Map was created on or before January 1 of the prior Fiscal Year and that each such Assessor's Parcel is associated with a Lot, as determined reasonably by the City and/or CFD administrator.

“Exempt Property” means all Assessor’s Parcels within CFD No. 2007-1 designated as being exempt from the Special Tax as determined in Section F.

“Final Map” means a subdivision of property evidenced by the recordation of a final map, parcel map, or lot line adjustment, pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or the recordation of a condominium plan pursuant to California Civil Code 1352 that creates individual lots for which Building Permits may be issued without further subdivision.

Page 9 of 27


“Fiscal Year” means the period commencing on July 1 of any year and ending the following June 30.

“Lot” means an individual legal lot created by a Final Map for which a Building Permit could or has been issued.

“Maximum Special Tax” means the Maximum Special Tax determined in accordance with Section C, which can be levied by CFD No. 2007-1 in any Fiscal Year on Taxable Property within CFD No. 2007-1.

“Mixed-Use Property” means all Assessor’s Parcels of Developed Property for which Building Permit(s) have been issued for purposes of constructing Non-Residential Property and Residential Property. Residential Units on Mixed-Use Property shall be classified as Multi-Family Residential.

“Multi-Family Residential” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing a residential structure consisting of two or more residential Units that share common walls, including, but not limited to, duplexes, triplexes, town homes, condominiums, apartment Units, and residential Units on Assessor’s Parcels that are considered Mixed-Use Property.

“Non-Residential Property” means all Assessor’s Parcels for which a Building Permit was issued for any type of non-residential use.

“Public Property” means any property within the boundaries of CFD No. 2007-1 that is owned by or irrecoverably dedicated to the City, the federal government, the State of California, the County, CFD No. 2007-1, or other public agency. For purposes of this definition, property owned by the Redevelopment Agency of the City of Covina is not considered Public Property and any property owned by the Redevelopment Agency will be subject to the levy of a Special Tax in accordance with Sections C and D herein.

“Public Services” means new police services, fire protection and suppression services, paramedic services, and park maintenance, including but not limited to (i) the costs of contracting services, (ii) related facilities, equipment, vehicles, ambulances, fire apparatus and supplies, (iii) the salaries and benefits of City and Fire District staff that directly provide police services, fire protection and suppression services, paramedic services, and park maintenance, and (iv) City and Fire District overhead costs associated with providing such services within CFD No. 2007-1. The Special Tax provides only partial funding for police, fire protection services, paramedic services, and park maintenance.

“Special Tax” means any special tax authorized to be levied by CFD No. 2007-1 pursuant to the Act to fund the Special Tax Requirement.

“Single-Family Residential” means all Assessor’s Parcels of Developed Property for which a Building Permit has been issued for purposes of constructing one single-family residential dwelling Unit.

“Taxable Property” means all Assessor’s Parcels within CFD No. 2007-1 that are not exempt from the levy of the Special Tax.

Page 10 of 27


“Tax Class” means any of the classes listed in Table 1 below.

“Undeveloped Property” means all Assessor’s Parcels within CFD No. 2007-1 for which Building Permits have not been issued and that is not classified as Approved Property or Public Property.

“Unit” means any separate residential dwelling unit in which a person or persons may live, which comprises an independent facility capable of conveyance separate from adjacent residential dwelling units and is not considered to be for commercial or industrial use.

B. CLASSIFICATION OF ASSESSOR’S PARCELS

Each Fiscal Year, beginning with Fiscal Year 2007-2008, each Assessor’s Parcel within CFD No. 2007-1 shall be classified as Developed Property or Exempt Property. In addition, each Fiscal Year, beginning with Fiscal Year 2007-2008, each Assessor’s Parcel of Developed Property shall be further classified as Single-Family Residential, Multi-Family Residential, or Mixed-Use Property.

C. MAXIMUM ANNUAL SPECIAL TAX

The Maximum Special Tax for each Assessor’s Parcel classified as Single-Family Residential, Multi-Family Residential, and Mixed-Use Property in Fiscal Year 2007-2008 shall be equal to the Maximum Special Tax set forth in Table 1.

TABLE 1 MAXIMUM ANNUAL SPECIAL TAX RATES

Fiscal Year 2007-2008

Tax Class Description Maximum Special Tax

1 Single-Family Residential $527 per Unit

2 Multi-Family Residential $395 per Unit

3 Mixed-Use Property $395 per Unit

For each subsequent Fiscal Year following the Base Year, the Maximum Special Tax for each Assessor’s Parcel classified as Developed Property shall be adjusted by the Annual Escalation Factor.

Multiple Tax Classes

In some instances an Assessor’s Parcel may contain more than one Tax Class. The Maximum Special Tax levied on such Assessor’s Parcel shall be the sum of the Maximum Special Tax that can be imposed on all Tax Classes located on that Assessor’s Parcel.

D. METHOD OF APPORTIONMENT OF SPECIAL TAX

Commencing with Fiscal Year 2007-2008, and for each subsequent Fiscal Year, the Special Tax shall be levied on each Assessor’s Parcel of Developed Property at the applicable Maximum Special Tax as set forth in Section C.

Page 11 of 27


E. TERMINATION OF SPECIAL TAX

The Special Tax shall be levied in perpetuity to fund Public Services provided to CFD No. 2007-1.

F. EXEMPTIONS

The City shall classify as Exempt Property: (i) Public Property, (ii) Non-Residential Property,

(iii) Undeveloped Property, (iv) Affordable Housing, or (v) Assessor’s Parcels with public or

utility easements making impractical their utilization for other purposes than those set forth in the

easement.

G. APPEALS

Any property owner claiming that the amount or application of the Special Tax is not correct may file a written notice of appeal with the City Council not later than twelve months after having paid the first installment of the Special Tax that is disputed. A representative(s) of CFD No. 2007-1 shall promptly review the appeal, and if necessary, meet with the property owner, consider written and oral evidence regarding the amount of the Special Tax, and rule on the appeal. If the representative’s decision requires that the Special Tax for an Assessor’s Parcel be modified or changed in favor of the property owner, a cash refund shall not be made, but an adjustment shall be made to the Special Tax on that Assessor’s Parcel in the subsequent Fiscal Year(s).

H. MANNER OF COLLECTION

The annual Special Taxes shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that CFD No. 2007-1 may collect the Special Taxes at a different time or in a different manner if necessary to meet its financial obligations.

Page 12 of 27

Resolution CC 2021-XX Exhibit B

EXHIBIT B

SAMPLE BALLOT

Page 13 of 27


Page 14 of 27



CALIFORNIA, CALLING A SPECIAL ELECTION AND SUBMITTING

TO THE VOTERS OF ANNEXATION NO. 27 OF CITY OF COVINA

COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES)

PROPOSITIONS REGARDING THE ANNUAL LEVY OF SPECIAL

TAXES WITHIN ANNEXATION NO. 27 TO FINANCE PUBLIC

SERVICES, AND THE ESTABLISHMENT OF AN APPROPRIATIONS

LIMIT

WHEREAS, pursuant to Section 53339.7 of the California Government Code the City

Council (hereafter referred to as the “City Council”) of the City of Covina (the “City”) has

adopted the resolution authorizing the annexation of territory to City of Covina Community

Facilities District No. 2007-1 (Public Services), County of Los Angeles, State of California

(“CFD No. 2007-1”); and

WHEREAS, by that resolution, the City Council called a special election on the

propositions to be submitted to the voters of the territory proposed to be annexed to CFD No.

2007-1 (“Annexation No. 27”) with respect to the levy of special taxes therein for the financing

of public services within CFD No. 2007-1; and

WHEREAS, pursuant to Section 53326 of the California Government Code, it is

necessary that the City Council submit to the voters of Annexation No. 27 the annual levy of

special taxes on taxable property within Annexation No. 27; and

WHEREAS, pursuant to Section 53325.7 of the California Government Code and the

provisions of said Code, the City Council may also submit to the voters of Annexation No. 27 a

proposition for the establishment of an appropriations limit for Annexation No. 27; and

WHEREAS, twelve (12) or more registered voters have not resided within the territory

of Annexation No. 27 for each of the ninety (90) days preceding March 16, 2021.



SECTION 1. Findings. The City Council finds that: (i) the foregoing recitals are true

and correct; (ii) 12 persons have not been registered to vote within the territory to be annexed to

CFD No. 2007-1 for each of the 90 days preceding the close of the public hearing on March 16,

2021; (iii) pursuant to Section 53326 of the California Government Code, as a result of the

findings set forth in clause (ii) above, the vote in the special election called by this resolution

shall be by the landowners of the territory to be annexed to CFD No. 2007-1, whose property

would be subject to the special taxes if they were levied at the time of the election, and each

landowner shall have one vote for each acre, or portion thereof, which he or she owns within

Annexation No. 27 which would be subject to the proposed special taxes if they were levied at

the time of the election; (iv) the owners of all of the land in Annexation No. 27 by written

consent (a) waived the time limits set forth in Section 53326 of the California Government Code

Page 15 of 27

nalvarez

Typewritten Text

Attachment B


for holding the election called by this resolution and the election on the propositions (b)

consented to the holding of the election on March 16, 2021, (c) waived notice and mailed notice

of the time and date of the election, (d) waived an impartial analysis by the City Attorney of the

ballot propositions pursuant to Section 9280 of the California Elections Code and arguments and

rebuttals pursuant to Sections 9281 to 9287, inclusive, and 9295 of that Code, and mailing of a

statement pursuant to Section 9401 of that Code, and (e) waived a synopsis of the measures to be

included in the official ballot for said elections pursuant to Section 12111 of that Code; and (v)

the City Clerk (hereafter referred to as the “City Clerk”) has consented to the holding of the

election on March 16, 2021.

SECTION 2. Call of Election. The City Council hereby calls and schedules an election

for March 16, 2021, on the proposition of the annual levy of special taxes on taxable property

within Annexation No. 27 to CFD No. 2007-1 to finance public services within the CFD No.

2007-1, and on the proposition of the establishment of an appropriations limit for Annexation

No. 27 to CFD No. 2007-1.

SECTION 3. Propositions. The propositions to be submitted to the voters of

Annexation No. 27 at such special election shall be as follows:

Proposition A: Shall special taxes be levied annually on taxable property within the territory to

be annexed into the City of Covina Community Facilities District No. 2007-1 (Public Services),

County of Los Angeles, State of California (“Annexation No. 27”); and collected so long as the

special taxes are needed to pay for police services, fire protection and suppression services,

paramedic services, and park maintenance at the special tax rates and pursuant to the method of

apportioning the special taxes set forth in Exhibit “B” to the Resolution of Intention, Resolution

No. 07-6578, adopted by the City Council of the City of Covina on May 1, 2007, and as

amended by Resolution No. 09-6743?

Proposition B: Shall an appropriations limit, as defined by subdivision (h) of Section 8 of

Article XIIIB of the California Constitution, be established for Annexation No. 27 to the City of

Covina Community Facilities District No. 2007-1 (Public Services), County of Los Angeles,

State of California, in the amount of $100,000 per annum?

The First Amended Rate and Method of Apportionment is attached as Exhibit A.

SECTION 4. Conduct of Election. Except as otherwise provided in Section 5 hereof,

the special election shall be conducted by the City Clerk in accordance with the provisions of the

California Elections Code governing mail ballot elections of cities, and in particular the

provisions of Division 4 (commencing with Section 4000), of that Code, insofar as they may be

applicable.

SECTION 5. Election Procedures. The procedures to be followed in conducting the

special election on (i) the proposition with respect to the levy of special taxes on taxable property

within Annexation No. 27 to CFD No. 2007-1 to pay for public services, and (ii) the proposition

with respect to the establishment of an appropriations limit for Annexation No. 27 to CFD No.

2007-1 in the amount of $100,000 per annum shall be as follows:

Page 16 of 27


(a) Pursuant to Section 53326 of the California Government

Code, ballots for the special election shall be distributed to the qualified

electors by the City Clerk by mail or by personal service.

(b) Pursuant to applicable sections of the California Elections

Code governing the conduct of mail ballot elections of cities, and in

particular Division 4 (commencing with Section 4000) of that Code with

respect to election conducted by mail, the City Clerk, or designated

official, shall mail or deliver to each qualified elector an official ballot in

the appropriate form, and shall also mail or deliver to all such qualified

electors a ballot pamphlet, instructions to voter, and a return identification

envelope addressed to the City Clerk for the return of voted official

ballots.

(c) The official ballot to be mailed or delivered by the City

Clerk to each landowner-voter shall have printed or typed thereon the

name of the landowner-voter and the number of votes to be voted by the

landowner-voter.

(d) The return identification envelope mailed or delivered by

the City Clerk to each landowner-voter shall have printed or typed thereon

the following: (i) the name of the landowner, (ii) the address of the

landowner, (iii) a declaration under penalty of perjury stating that the

voter is the landowner or the authorized representative of the landowner

entitled to vote the enclosed ballot and is the person whose name appears

on the identification envelope, (iv) the printed name and signature of the

voter, (v) the address of the voter, (vi) the date of signing and place of

execution of the declaration, and (vii) a notice that the envelope contains

an official ballot and is to be opened only by the City Clerk.

(e) The information to voter form to be delivered by the City

Clerk to the landowner-voter shall inform them that the official ballot

shall be returned to the City Clerk properly voted as provided thereon and

with the certification appended thereto properly completed and signed in

the sealed return identification envelope with the certification thereon

completed and signed and all other information to be inserted thereon

properly inserted by 7:30 p.m. on the 16th day of March, 2021; provided

that if all qualified electors have voted, the election shall be closed with

the concurrence of the City Clerk.

(f) Upon receipt of the return identification envelope, which

are returned prior to the voting deadline on the date of the election, the

City Clerk shall canvass the votes cast in the election, and shall file a

statement with the City Council as to the results of such canvass and the

election on each proposition set forth in the official ballot.



Page 17 of 27


APPROVED and PASSED this ____ day of _________, 2021.


BY:


ATTEST:

___________________________________________



CERTIFICATION



regular meeting held on the ____ day of _________, 2021, by the following vote:





Dated:

____________________________________________



Page 18 of 27


EXHIBIT A

FIRST AMENDED RATE AND METHOD OF APPORTIONMENT

(Please see Exhibit A to Resolution CC 2021-XX, Attachment A, in this same packet)

Page 19 of 27



CALIFORNIA, MAKING CERTAIN FINDINGS, CERTIFYING THE

RESULTS OF AN ELECTION AND ADDING PROPERTY TO

COMMUNITY FACILITIES DISTRICT NO. 2007-1 (PUBLIC SERVICES),

ANNEXATION NO. 27

WHEREAS, the City Council of the City of Covina (the “City Council”), has previously

formed a Community Facilities District pursuant to the provisions of the “Mello-Roos Community

Facilities Act of 1982”, being Chapter 2.5, Part 1, Division 2, Title 5 of the Government Code of

the State of California, said Article 3.5 thereof. The existing Community Facilities District being

designated as Community Facilities District No. 2007-1 (Public Services) (hereafter referred to as

CFD No. 2007-1); and,

WHEREAS, the City Council initiated proceedings to annex certain territory to Community

Facilities District No. 2007-1 (Public Services), Annexation No. 27 (hereafter referred to as

“Annexation No. 27”); and

WHEREAS, at this time the unanimous consent to the annexation of Annexation No. 27

has been received from the property owner or owners of such territory; and

WHEREAS, twelve (12) or more registered voters have not resided within the territory of

Annexation No. 27 for each of the ninety (90) days preceding March 16, 2021, therefore, pursuant

to the Act the qualified electors of Annexation No. 27 shall be the “landowners” of Annexation

No. 27 as such term is defined in Government Code Section 53317(f) and each such landowner

who is the owner of record, or the authorized representative thereof, shall have one vote for each

acre or portion of an acre of land that she or he owns within; and

WHEREAS, the time limit specified by the Act for conducting an election to submit the

levy of the special taxes on the property within Annexation No. 27 to the qualified electors of

Annexation No. 27 and the requirements for impartial analysis and ballot arguments have been

waived with the unanimous consent of the qualified electors of Annexation No. 27; and

WHEREAS, the City Council adopted on March 16, 2021 a resolution entitled “Resolution

of the City Council of the City of Covina, California, Calling a Special Election and Submitting to

the Voters of Annexation No. 27 of City of Covina Community Facilities District No. 2007-1

(Public Services) Propositions Regarding the Annual Levy of Special Taxes within Annexation

No. 27 to Finance Public Services, and the Establishment of an Appropriations Limit” (the

“Resolution Calling Election”), calling for a special election (the “Special Election”) of the

qualified electors within Annexation No. 27; and

WHEREAS, pursuant to the terms of said resolution, which are by this reference

incorporated herein, the Special Election was held on March 16, 2021, and the City Clerk has on

file a Certificate of Election Official and Statement of Votes Cast (the “Certificate”), a copy of

which is attached hereto as Exhibit A and by this reference incorporated herein; and

WHEREAS, the measures voted upon did receive the favorable 2/3’s vote of the qualified

electors, and the City Council desires to declare the results of the Special Election; and

Page 20 of 27

nalvarez

Typewritten Text

Attachment C


WHEREAS, a map showing the territory to be annexed and designated as Annexation No.

27 (hereafter referred to as the “Annexation Map”), a copy of which is attached as Exhibit B hereto

and incorporated herein by this reference, and a list of Properties to be annexed and landowners, a

copy of which is attached as Exhibit C hereto and incorporated herein by this reference, has been

submitted to the City Council.



SECTION 1. Recitals. The above recitals are all true and correct.

SECTION 2. Findings. This City Council does hereby determine as follows:

(a) The unanimous consent to the annexation of Annexation No. 27 to

CFD No. 2007-1 has been given by all of the owners within Annexation No.

27 and such consent shall be kept on file in the Office of the City Clerk.

(b) Twelve (12) or more registered voters have not resided within the

territory of Annexation No. 27 for each of the ninety (90) days preceding

March 16, 2021, therefore, pursuant to the Act the qualified electors of

Annexation No. 27 shall be the “landowners” of such Annexation No. 27 as

such term is defined in Government Code Section 53317(f).

(c) Pursuant to the Certificate, the qualified electors of Annexation No.

27 have unanimously voted in favor of the levy of special taxes within

Annexation No. 27 upon its annexation to CFD No. 2007-1 and the

establishment of an appropriations limit for Annexation No. 27.

SECTION 3. Annexed Area. The boundaries and parcels of territory within Annexation

No. 27 and on which special taxes will be levied in order to pay for the costs and expenses of

authorized public services are shown on the Annexation Map as submitted to and hereby approved

by this City Council.

SECTION 4. Declaration of Annexation. The City Council does hereby determine and

declare that Annexation No. 27 is now added to and becomes a part of CFD No. 2007-1. The City

Council, acting as the legislative body of CFD No. 2007-1, is hereby empowered to levy the

authorized special tax within Annexation No. 27.

SECTION 5. Notice. Immediately upon adoption of this Resolution, notice shall be given

as follows:

An Amendment to the Notice of Special Tax Lien (Notice of Annexation) shall

be recorded in the Office of the County Recorder no later than fifteen (15) days

after the date of adoption of this Resolution.



Page 21 of 27


APPROVED and PASSED this ___ day of ___________, 2021.


BY:


ATTEST:

___________________________________________



CERTIFICATION



regular meeting held on the ___ day of _________, 2021, by the following vote:





Dated:

____________________________________________



Page 22 of 27


EXHIBIT A

CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST

Page 23 of 27


CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST

STATE OF CALIFORNIA )

COUNTY OF LOS ANGELES ) ss.

CITY OF COVINA )

The undersigned, ELECTION OFFICIAL OF THE CITY OF COVINA, COUNTY OF LOS

ANGELES, STATE OF CALIFORNIA, DOES HEREBY CERTIFY that pursuant to the

provisions commencing with Section 53326 of the Government Code of the State of California, I

did canvass the returns of the votes cast at the

CITY OF COVINA

COMMUNITY FACILITIES DISTRICT NO. 2007-1

(PUBLIC SERVICES)

ANNEXATION NO. 27

SPECIAL ELECTION

in the City, held on March 16, 2021.

I FURTHER CERTIFY that this Statement of Votes Cast shows the whole number of votes cast

in the area proposed to be annexed, Annexation No. 27 to Community Facilities District No. 2007-

1 (Public Services) of the City of Covina for or against the Measure are full, true and correct.

NUMBER OF ELIGIBLE VOTES: 1

VOTES CAST ON PROPOSITION A: YES

NO

VOTES CAST ON PROPOSITION B: YES

NO

WITNESS my hand this ____ day of __________, 2021.

_____________________________________

City Clerk

City of Covina

Page 24 of 27


EXHIBIT B

ANNEXATION MAP

Page 25 of 27

Resolution CC 2021-XX Exhibit C

EXHIBIT C

LIST OF PROPERTIES TO BE ANNEXED

Page 26 of 27

Resolution CC 2021-XX Exhibit C

LIST OF PROPERTIES TO BE ANNEXED

ANNEXATION NO. 27

ASSESSOR PARCEL NO(S) 8445-009-046

Vesting Tract No.

N/A

Address

135 East Badillo Street, Covina, CA

Landowner

WLM-DC4, LLC

370 E. Rowland Street

Covina, CA 91723

Page 27 of 27


ITEM NO. PH 1

Meeting: CC Regular Meeting - Feb 16 2021 Title: Public Hearing to Consider a Substantial Amendment to the Fiscal Year (FY) 2020-2021

Community Development Block Grant (CDBG) Program Budget for the “LACDA/City

Small Business Grant Assistance Program” Presented By: Brian K. Lee, Director of Community Development Recommendation: 1. Open the public hearing and receive public testimony;

2. Close the public hearing; 3. Adopt Resolution CC 2021-12, approving termination of CDBG Project CV-1043-19 "CV Emergency Assistance to Microenterprises" program; funding for New Forty-Sixth Year Community Development Block Grant 2020-2021 project, "LACDA/City Small Business Grant Assistance Program", as Project Numbers CV1100-20 and 602299-20, and reduction of CDBG Project D96164-20 "Residential Rehabilitation", and amending the FY 2020-2021 Community Development Budget to reflect these changes; and 4. Authorize the City Manager or his designee to execute documents related to the FY 2020-2021 CDBG and CDBG-CV funds.

EXECUTIVE SUMMARY / BACKROUND: As a municipality with a population below 50,000, the City of Covina (City) is ineligible to receive CDBG funding directly from United States Department of Housing and Urban Development (HUD). Instead, the City receives CDBG funds from the Los Angeles County Development Authority (LACDA) through the Urban County Program. Under this program, LACDA applies to HUD for CDBG funding, and then divides the funding amongst its sub-recipients such as the City. The City’s CDBG funding is accounted for under the

Community Development Department budget. All changes approved by the City Council are presented to the LACDA for approval and processing. In early January 2021, the LACDA notified Participating Cities of an opportunity to participate in the “LACDA/City Small Business Grant Assistance Program” which will be administered by LACDA on behalf of

Participating Cities, who will carry out their own outreach to direct the grant funds exclusively to local businesses. Through the LACDA, grants of up to Ten Thousand Dollars ($10,000) will be made available to businesses that either provide goods and services to residents in a low- and moderate-income service area (LMA) or to businesses that create or retain jobs for low- and moderate-income persons (LMJ) in response to the economic decline of the COVID-19 pandemic. This funding can be used to hire new positions and to re-hire employees who were laid off due to the COVID-19 pandemic. In order to fund this opportunity for Covina businesses, it is proposed that unallocated funds previously approved for use in the Residential Rehabilitation program (D96164-20) ($45,582) as well as funds that were not expended in the CDBG CV Emergency Assistance to Microenterprises program (CV 1043-19) in the amount of $57,267 be used to fund opportunities for approximately ten Covina businesses to qualify for economic development grants. A total of $102,849 is proposed for this project, which allows for personnel and non-personnel expenses.

DISCUSSION: Termination of CDBG CV 1043-19, “CV Emergency Assistance to Microenterprises Program” The CDBG CV Emergency Assistance to Microenterprises Program was originally funded in the amount of $70,848, and provided two separate outreach opportunities for microenterprises in the City to apply for grant funds. Due to the limitation of this CARES Act funding, three Covina businesses qualified for the grant. As a result, $57,267 remains unexpended in this program. At the September 15, 2020, City Council meeting, it was determined that “any unspent remaining balance of the Emergency Assistance to Microenterprises Program will be transferred to the Emergency Rental Assistance Program”. In the intervening period, the City has partnered

with the LACDA and 211 Los Angeles in the LA County Covid-19 Rent Relief Program, providing increased rental assistance to Covina residents. Due to the shift in available programs, it is proposed that instead of transferring the unused funds to the City Emergency Rental Assistance Program, that it be used to partially fund the “LACDA/City Small Business Grant Assistance Program”. New Proposed Project “LACDA/City Small Business Grant Assistance Program” The new project “LACDA/City Small Business Grant Assistance Program” (“SBG Program”) will be funded in

the amount of $100,000, which would allow for up to ten $10,000 grants. The grants will be made available to businesses that either provides goods and services to residents in a low- and moderate-income service area (LMA) or to businesses that create or retain jobs for low- and moderate-income persons (LMJ). Due to the limited number of LMA in the City of Covina, it is most likely that participating Covina businesses will qualify by the creation or retainage of jobs for low- and moderate-income persons. The program will be funded using City of Covina CDBG and CDBG-CV funds, and administered by the LACDA. Program parameters are established by the LACDA. The grant funds can be used for operational expenses of the business such as:

• Employee payroll; • Working capital to continue operations; • Payment of outstanding business expenses; and • Adaptive practices needed to remain open (i.e. equipment and supplies for physical distancing).

Eligible Businesses

• Small Businesses with less than 500 employees impacted by COVID-19; • Restaurants, coffee shops, bakeries, cafés, gastropubs, salons, barbers and other grooming businesses,

gyms, day spas, and fitness studios; • Retail and commercial stores such as local markets, consumer goods, electronics, appliances, health and

sporting goods, furniture, clothing and shoes, books, and music stores; • Active business license in the City or County, as applicable; • No unresolved City, municipal, or health code violations; • Business in continuous operation in the City for at least two years; and • Not on the attached list of ineligible businesses.

The number of businesses assisted through the LACDA will be based on the amount allocated by the City, and fulfillment of the public benefit standards based on the specified national objective.

Ineligible Businesses The LACDA has established a list of twenty-five types of businesses that are ineligible for the SBG program. The list is attached as Attachment A, and includes businesses with active health code violations, non-profit organizations; massage parlors and bail bond services, corporate-owned fast food restaurants, life insurance companies, and adult businesses, among others.

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Funding Source Participating cities can use available CDBG-CV and unallocated CDBG funds for the SBG Program. On December 15, 2020, $45,582 of then-unallocated funds was approved as additional funding to the existing FY 20-21 Residential Rehabilitation project D96164-20 budget of $26,847, for a total revised budget of $72,429 for use after Covid-19 restrictions are lifted. This funding opportunity to offer grants to local businesses was presented in January 2021. To fund this opportunity, it is proposed that the unallocated funds previously approved for use in the Residential Rehabilitation program (D96164-20), $45,582, be redirected for use in the SBG Program. As discussed above, it is proposed that $57,267 of unexpended CDBG CV Emergency Assistance to Microenterprises project funds (CV 1043-19) be used to fund the SBG Program. A total of $102,849 is proposed for this project, which will allow up to ten (10) economic development grants through the LACDA. A separate Exhibit A must be developed by the LACDA and approved by the City for each funding source.

Application Process LACDA will provide a website, and flyers which each City will adapt for their City outreach efforts. A link will be provided for the Covina website where local businesses can complete a pre-screening form to request grant funds. The application period will be open for five (5) days to ensure that eligible businesses have a reasonable opportunity to submit their initial application. After the five-day period, a lottery will be conducted and selected businesses will be requested to complete a comprehensive application form. The LACDA will work with the selected businesses for each Participating City to execute an agreement and issue checks to business owners. It is anticipated that the application period will be in early March 2021.

LACDA Proposed Timeline and Due Dates (Subject to Change)

Finance Advisory Commission Recommendation It is customary to take new proposed CDBG projects to the Finance Advisory Commission (FAC) to consider a recommendation to the City Council. Due to the short time-line for participation in this program, it is not possible to present to the FAC prior to presentation to the City Council. A report will be made to the FAC at their next scheduled meeting, tentatively scheduled for mid-February 2021. Substantial Change to the CDBG FY 20-21 Program/Public Noticing The start of a new program and the termination of an existing program mid-year constitutes a Substantial Change to the CDBG program, as the action constitutes a Substantial Amendment to the existing CDBG Action Plan. Under current HUD guidelines a Substantial Change requires a five-day public noticing period. A public notice has been printed in the local newspaper which identifies projected use of funds for the Forty-Sixth Fiscal

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Year (July 1, 2020-June 30, 2021) for submission to the U.S. Department of Housing and Urban Development. that references a virtual public hearing on February 16, 2021, at 7:30 pm in the Council Chamber of City Hall to consider the start of a new project, “LACDA/City Small Business Grant Assistance Program” and the

termination of CDBG CV Emergency Assistance to Microenterprises, Project CV 1043-19. See Attachment C. Table 1: Program Funding Recap

FISCAL IMPACT: $102,849 in federal CDBG and CDBG-CV funds is available for re-programming under fund 2100, as detailed in attached Resolution CC 2021-12. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): This activity will not result in a reasonably foreseeable change to the physical environment; it is exempt from CEQA under State CEQA Guidelines 15061 (b) (2) and (3) and does not constitute a project. ATTACHMENTS: Attachment A - LACDA Listing of Ineligible Businesses Attachment B - Resolution CC 2021-12 Attachment C - Public Hearing Notice Respectfully submitted,

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LACDA City Small Business Grant Program Ineligible Businesses

- Any national chain that is not locally franchised - Massage parlors and bail bond services - Corporate-owned fast-food restaurants (franchisees are eligible, as stated in prior Eligible Business

Section) - Check cashing, bars, liquor stores, smoke/cannabis shops, firearms retailers, pawnshops - Non-profit organizations - Real estate salespersons - Financial businesses primarily engaged in the business of lending, such as banks, finance companies - Passive businesses owned by developers and landlords that do not operate an active business or occupy

the assets acquired, improved, or operated with the grant proceeds (except Eligible Passive Companies under § 120.111)

- Life insurance companies - Businesses located in a foreign country (businesses in the U.S. owned by aliens may qualify) - Pyramid sale distribution plans. (i.e. Amway, Herbalife, Mary Kay) - Businesses deriving more than one-third of gross annual revenue from legal gambling activities - Businesses engaged in any illegal activity - Private clubs and businesses which limit the number of memberships for reasons other than capacity - Government-owned entities (except for businesses owned or controlled by a Native American tribe) - Businesses principally engaged in teaching, instructing, counseling or indoctrinating religion or religious

beliefs, whether in a religious or secular setting - Loan packagers earning more than one-third of their gross annual revenue from packaging SBA loans - Businesses with an Associate who is incarcerated, on probation, on parole, or has been indicted for a

felony or a crime of moral turpitude - Businesses in which the participating city or LACDA, or any of its Associates owns an equity interest - Multi-national or publicly traded businesses are not eligible for this program - Adult businesses which:

(1) Present live performances of a prurient sexual nature; or (2) Derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature

- Business or owner listed on the Federal Excluded Parties List (EPLS) maintained on www.sam.gov - Business that does not have an active business license showing the business address is located in the

participating city - Business that has any active City, municipal or health code violations (open, unresolved code cases, etc.) - Business owner that is the subject of unresolved findings of noncompliance related to previous

Community Development Block Grant (CDBG) assistance

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https://www.law.cornell.edu/cfr/text/13/120.111

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=9722d4cebaa073c18365b9e2e72c5b3c&term_occur=999&term_src=Title:13:Chapter:I:Part:120:Subpart:A:Subjgrp:192:120.110

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=65275783be94fc057482a5c6db5dc505&term_occur=999&term_src=Title:13:Chapter:I:Part:120:Subpart:A:Subjgrp:192:120.110

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=c13f7d4c18dbbdcf58585809aa7123a7&term_occur=999&term_src=Title:13:Chapter:I:Part:120:Subpart:A:Subjgrp:192:120.110

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=c13f7d4c18dbbdcf58585809aa7123a7&term_occur=999&term_src=Title:13:Chapter:I:Part:120:Subpart:A:Subjgrp:192:120.110

http://www.sam.gov/

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CALIFORNIA, APPROVING TERMINATION OF CDBG PROJECT CV

1043-19 “CV EMERGENCY ASSISTANCE TO MICROENTERPRISES”

PROGRAM; AUTHORIZING FUNDING FOR ONE NEW FORTY-SIXTH

YEAR COMMUNITY DEVELOPMENT BLOCK GRANT FISCAL YEAR

2020-2021 PROGRAM, “LACDA/CITY SMALL BUSINESS GRANT

ASSISTANCE PROGRAM”, PROJECT NUMBERS CV1100-20 AND

602299-20, AND AUTHORIZING A DECREASE TO THE FY 2020-2021

RESIDENTIAL REHABILITATION PROGRAM, PROJECT D96164-20,

AND AMENDING THE COMMUNITY DEVELOPMENT BUDGET FOR

FISCAL YEAR 2020-2021

WHEREAS, the Community Development Block Grant (CDBG) Program has operated

since 1974 to provide local governments with the resources necessary to meet the needs of persons

of low-and moderate-income; and

WHEREAS, the City of Covina contracts with the Los Angeles County Community

Development Authority (LACDA) for the disbursement of Community Development Block Grant

Funds, through the Urban County Program; and

WHEREAS, the budget for the City of Covina for fiscal year commending July 1, 2020,

and ending June 30, 2021, was approved on June 16, 2020; and

WHEREAS, the approved budget is in accordance with all applicable ordinances of the

City and all applicable statutes of the State; and

WHEREAS, the reallocation of the appropriations between departmental activities may

be made by the City Manager and amendments (increases/decreases) to the adopted budget shall

be by approval and Resolution of the City Council; and

WHEREAS, the City of Covina wishes to authorize new Project numbers CV1100-20 and

602299-20, “LACDA/City Small Business Grant Assistance Program” utilizing CDBG funds and

CDBG-CV funds which are available for programming to be budgeted at this time; and

WHEREAS, the “LACDA/City Small Business Grant Assistance Program” will be

administered by LACDA on behalf of the City and other participating cities, and program

parameters will be set by LACDA; and

WHEREAS, City staff will carry out the outreach to local City businesses; and

WHEREAS, the City of Covina wishes to terminate an existing program, Project CV

1043-19, CV Emergency Assistance to Microenterprises; and

WHEREAS, the actions referenced herein constitute a revision to the FY 2020-2021

CDBG Action Plan; and

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WHEREAS, the City Council has conducted a Public Hearing with the required prior

notice, to provide the public with an opportunity to comment on the proposed revision, a

Substantial Amendment the 2020-2021 Action Plan.



SECTION 1. The City Council approves new mid-year project numbers CV1100-20 and

602299-20 “LACDA/City Small Business Grant Assistance Program” in the amount of $102,849,

of which $100,000 will be available for grant funds to be administered by LACDA and $2,849

will be available for related City personnel expenses.

SECTION 2. The City Council hereby terminates CDBG-CV Project CV 1043-19 “CV

Emergency Assistance to Microenterprises”, resulting in a decrease of $57,267 and authorizes a

decrease to Project D96164-20 “Residential Rehabilitation” of $45,582, and instructs staff to

submit the necessary documentation to the Los Angeles County Development Authority.

SECTION 3. The City Council authorizes City staff to amend the FY 2020-2021 City of

Covina operating budget and establish the necessary accounts as follows:

Account Number Description Project Name Amount

2100-4750-42050-

20299

Intergovernmental/CDBG LACDA/City Small

Business Grant

Assistance Program

-$2,849

2100-4750-50010-

20299

Personnel LACDA/City Small

Business Grant

Assistance Program

$2,849

SECTION 4. The City Manager or his designee is authorized to execute documents related

to the Fiscal Year 2020-2021 CDBG program.





BY:


ATTEST:



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CERTIFICATION



regular meeting held on the 16th of February, 2021, by the following vote:





Dated:

_______________________________________



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San Gabriel Valley Examiner1160 Englewild Dr.Glendora, CA 91741626-852-3374

City of CovinaAttn: City Clerk124 E. College St.Covina, CA 91723

PROOF OF PUBLICATION(201 5.5 C.C.P.)

STATE OF CALIFORNIACounty of Los Angeles

I am a resident of the county aforesaid. I amover the age of eighteen years, I am not aparty to the above-entitled matter. I am theprincipal clerk of the Publisher of the SanGabriel Valley Examiner, an adjudicatednewspaper of general circulation printed andpublished weekly in the City of Glendora,County of Los Angeles. The San Gabriel ValleyExaminer has been adjudged a newspaper ofgeneral circulation by the Superior Court ofthe County of Los Angeles, State of California,under the date of July 19, 1999, case NumberKS 005341. The notice, of which the annexedis a true printed copy, has been published ineach regular and entitled issue of saidnewspaper and not any supplement thereof onthe following dates to wit:

February 4, 2021

I declare under penalty of perjury that theforegoing is true and correct.

Executed in the City of Glendora, Los AngelesCounty, CaliforniaOn this 4th day of February 2021.

Signature

CITY OF COVINANOTICE OF PUBLIC HEARING

CONSIDERATION OF SUBSTANTIAL AMENDMENT TO THE 2020-2021COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ACTION PLAN FOR THE

“LACDA/CITY SMALL BUSINESS GRANT ASSISTANCE PROGRAM”

NOTICE IS GIVEN that the Covina City Council will conduct a VIRTUAL PUBLIC HEARING viateleconference on Tuesday, February 16, 2021, at 7:30 p.m. in the Council Chambers of Covina CityHall, 125 East College Street, Covina. The public is invited to review the City of Covina’s proposedrevision to the Community Development Block Grant (CDBG) Consolidated Plan (Action Plan) whichidentifies projected use of funds for the Forty-Sixth Fiscal Year (July 1, 2020-June 30, 2021), for submissionto the U.S. Department of Housing and Urban Development. This revision reports on a SubstantialAmendment to the 2020-2021 Action Plan.

City of Covina Project CV1043-19, CV Emergency Assistance to MicroenterprisesCancelled CDBG-CV Funding Allocation: $57,267

This cancelled project previously provided funding to qualified microenterprises for business rent andutilities.

Los Angeles County Development Authority/City Small Business Grant Assistance Program ProjectCV1100-20

Proposed CDBG Funding Allocation: $102,849This proposed project will create jobs for low- and moderate-income persons by funding payroll forbusinesses in response to the economic decline of the COVID-19 pandemic. This funding can beused to hire new positions and to re-hire employees who were laid off due to the COVID-19pandemic.

This proposed new project will provide grants up to $10,000 to for-profit businesses in the City of Covinathat create or retain jobs for low- and moderate-income persons (LMJ) as allowed under CFR Title 24,Part 570.203 pursuant to LACDA program guidelines. The project qualifies under the CDBG category oflow-mod limited clientele; a minimum of fifty-one percent (51%) of the jobs created under this programwill be restricted to persons from low-to moderate income families.

All interested citizens are invited to attend the virtual public hearing to provide input or submit writtencomments on the proposed revisions to the Fiscal Year 2020-2021 CDBG Program Budget for the“LACDA/City Small Business Grant Assistance Program” to the City Clerk on or before the scheduledhearing date.

Due to the COVID-19 pandemic public health orders, which limit in-person public meetings, this meetingis being conducted utilizing teleconferencing and electronic means consistent with State of CaliforniaExecutive Orders. The public may view the meeting live on the City’s website at www.covinaca.gov or onlocal cable television, Spectrum channel 29 and Frontier Channel 42. To view from the website, hoverover the Departments & Services tab until the drop-down menu appears and click on City Council VideoLibrary under the City Council header. A live banner will appear at the start of the meeting.

Submission of Public Comments: For those wishing to make public comments on this item, you maysubmit comments via email or by phone. If emailing comments, please submit your comments [email protected] by 6:00 p.m., Tuesday, February 16, 2021. Please enter “PUBLIC COMMENT(CDBG)” in the subject line. Public Comments will be forwarded to Council for review prior to themeeting.

If you wish to participate by phone, please email your name and phone number to [email protected] to the close of the public hearing. Please enter “PUBLIC COMMENT (CDBG)” in the subject line.Staff will call you at the appropriate time.

Further information may be obtained by contacting the CDBG Division of the Community DevelopmentDepartment at (626) 384-5443.

Georgianna Nicole AlvarezChief Deputy City Clerk

Publish in the San Gabriel Valley Examiner on February 4, 2021. #CB02

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Attachment C

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ITEM NO. PH 2

Meeting: CC Regular Meeting - Feb 16 2021 Title: Resolution CC 2021-06 for General Plan Amendment (GPA) 20-003 to Change Two

Parcels from Low Density Residential to General Commercial; and Ordinance 21-02 for Zone Changes (ZCH) 20-001 and 20-002 to Change Two Parcels from C-1 Commercial Zone (Neighborhood Stores) to C-2 Commercial Zone (Neighborhood Shopping Center) at 101 S. Azusa Ave. and 905 E. Wingate St., and Zoning Code Amendment (ZCA) 20-005 to Eliminate the C-1 Commercial Zone (Neighborhood Stores)

Presented By: Brian Lee, Director of Community Development Recommendation: Adopt Resolution CC 2021-06 for General Plan Amendment (GPA) 20-003 to change

two parcels from Low Density Residential to General Commercial, and making a determination of exemption under CEQA; and Waive full reading, read by title only, and introduce the first reading Ordinance 21-02, “An Ordinance of the City Council of City

of Covina California, approving Zone Changes (ZCH) 20-001 and 20-002, to change the zoning classification for two parcels from C-1 Commercial Zone (Neighborhood Stores) to C-2 Commercial Zone (Neighborhood Shopping Center) (APN: 8428-023-001 and 8442-006-023) approving Zoning Code Amendment (ZCA) 20-005 to delete Chapter 17.36, C-1 Commercial Zone, of the Covina Municipal Code in its entirety, and making a determination of exemption under CEQA”.

EXECUTIVE SUMMARY / BACKROUND: On December 22, 2020, the Planning Commission recommended approval to the City Council of applications General Plan Amendment (GPA 20-003), Zone Changes (ZCH) 20-001 and 20-002 and Zoning Code Amendment (ZCA) 20-005. The City-initiated projects intended to update the Zoning Code and resolve inconsistencies between the General Plan Land Use Map and the Zoning Map. The City received no comments in regards to these proposals. The Planning Commission voted 5-0 recommending approval of GPA 20-003, ZCHs 20-001 and 20-002, and ZCA 20-005 to the City Council through the adoption of Resolution CC 2021-06 (Attachment A) and Ordinance 21-02 (Attachment B). DISCUSSION: General Plan Amendment A General Plan Amendment is necessary to resolve the inconsistency between the General Plan Land Use Map and the Zoning Map. The General Plan Land Use designation for the two subject sites is currently Low Density Residential. Staff proposes to amend the General Plan Land Use Map from Low Density Residential to General Commercial consistent with the current uses and the proposed zone changes. Zone Changes The Zone Change request is pursuant to Section 17.80.090(A). According to Section 17.06, a Zone Change is a change in the zoning map, changing any property from one zone to another. There are only two sites (parcels) within the City that are zoned C-1 (Neighborhood Stores), located at 905 E. Wingate St. and 101 S. Azusa Ave. Both sites are corner lots at busy intersections (Grand Avenue and San Bernardino Road, Azusa Avenue and Badillo Street) and abut single-family zones and residences. Staff proposes to change the zoning of these two sites from C-1 Commercial Zone (Neighborhood Store) to C-2 Commercial Zone (Neighborhood Shopping Center).

Zoning Code Amendment As discussed under the Zone Changes, there are only two sites currently zoned C-1. With the proposed Zone Changes changing the zoning for the two sites from C-1 Commercial Zone to C-2 Commercial Zone, there is no need to maintain the C-1 Commercial zone. Besides, C-1 Commercial Zone has not been amended since the original 1964 Municipal Code was adopted and has proven to be a restrictive zone today. The uses permitted in the C-1 zone are limited and not up-to-date to meet the City's current neighborhood commercial demands. After studying the two zones, the staff determined that eliminating the C-1 Commercial Zone would not significantly impact the two sites. The C-2 Commercial Zone allows more commercial uses, such as restaurants and offices, but given the limited lot size and building floor area for the two sites, they will attract less intensive commercial use. More intensive uses, such as alcohol sales and automobile service stations, would require a conditional use permit and public hearing before the Planning Commission. FISCAL IMPACT: None. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): Community Development Department staff has determined that the proposed General Plan Amendment, Zone Changes, and Zoning Code Amendment are categorically exempt from the requirements of the California Environmental Quality Act (CEQA) Guidelines. Section 15061(b)(3), the general rule exemption, states that an activity is not subject to CEQA where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The proposed projects do not authorize new developments that will create significant environmental impacts. The proposed zone change will not create any public health or safety hazards or have a significant impact on the resources or services within the area of the subject parcels, such as water, sanitary services, surrounding roadways and intersections, schools, and existing agricultural uses. Community Development Department staff determines that there is no substantial evidence that the proposed zone change will have a significant effect on the environment. ATTACHMENTS: Attachment A - Resolution CC 2021-06 Attachment B - Ordinance 21-02 Attachment C - Resolution No. 2020-035 PC Respectfully submitted,

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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, APPROVING GENERAL PLAN AMENDMENT (GPA) 20-003, TO AMEND THE GENERAL PLAN MAP, CHANGING THE LAND USE DESIGNATIONS FOR TWO PARCELS FROM LOW DENSITY RESIDENTIAL TO GENERAL COMMERCIAL, LOCATED AT 905 E. WINGATE ST. (APN: 8428-023-001) AND 101 S. AZUSA AVE. (APN: 8442-006-023) AND MAKING A DETERMINATION OF EXEMPTION UNDER CEQA WHEREAS, Government Code Section 65350 et seq. authorizes cities to prepare, adopt

and amend General Plans; and

WHEREAS, City staff initiated and prepared an update to the Land Use Map of the Covina General Plan attached hereto as Exhibit A, which proposes to change the General Plan Land Use designation from Low Density Residential to General Commercial for two parcels located at 101 S. Azusa Avenue (APN: 8442-006-023), and 905 E. Wingate Street (APN: 8424-023-001); and

WHEREAS, the staff report and supporting materials accompanying this resolution are found to be true, are adopted as Facts and Findings, and are incorporated by reference in this resolution; and

WHEREAS, on December 22, 2020, the Planning Commission held a duly noticed public hearing on GPA 20-003, as prescribed by law, at which time City Staff and interested persons had an opportunity to and did testify either in support of or against this matter; and

WHEREAS, at the conclusion of the Planning Commission hearing and after due

consideration of the testimony, the Planning Commission adopted Resolution No. 20-0035 PC, recommending approval of the Resolution by the City Council; and

WHEREAS, the City Council, at a regular meeting, considered this Resolution on

February 16, 2021, at a duly noticed public hearing, as prescribed by law, at which time the City Staff and interested persons had an opportunity to and did testify either in support or against this matter; and

WHEREAS, all legal prerequisites prior to adoption of this Resolution have occurred. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA,


SECTION 1. California Environmental Quality Act Findings. The City Council makes the following environmental findings and determinations in connection with the approval of the proposed General Plan Amendment (GPA) 20-003: Community Development Department staff determined that the proposed General Plan Amendment, as set forth in Exhibit “A” to this Resolution, is exempt from the requirements of CEQA pursuant to CEQA Guidelines (14 Cal. Code Regs. § 15000 et seq.) Section 15061(b)(3) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. The

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Attachment A


activity is covered by the common sense exemption that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The City Council has reviewed Community Development Department staff’s determination of exemption, and based on its own independent judgment, concurs in staff’s determination that the proposed General Plan Amendment is exempt from CEQA.

SECTION 2. The City Council has reviewed the proposed changes to the Land Use Map, the Planning Commission hearing input and reports, and all evidence received by the Planning Commission and at the City Council hearings, and all documents and evidences are hereby incorporated by reference into this Resolution. After giving full consideration to all evidence presented at the public hearing, both oral and written, and after being fully informed, the City Council does hereby find and decide that the proposed General Plan Amendment is consistent with the public interest and with the City’s General Plan for the following reasons:

a. The proposed Amendment reduces inconsistencies between the General Plan and

the Zoning Map under the Land Use Element Section I. B.2.j of the General Plan; and

SECTION 3. After giving full consideration to all evidence presented at the public hearing, and in consideration of the findings stated in Section 2 of this Resolution, the City Council hereby approves General Plan Amendment (GPA) 20-003, as set forth in Exhibit A to this Resolution.

SECTION 4. The documents and materials that constitute the record of proceedings on which these findings and this Resolution are based are located at the City Clerk’s Office located at 125 E. College Street, Covina, CA 91723. The custodian of these records is the City Clerk.

SECTION 5. Effective Date. This Resolution shall be effective upon adoption. SECTION 6. Certification. The City Clerk shall certify to the passage and adoption of

this Resolution and shall enter the same in the Book of Original Resolutions.


City of Covina, California BY:


ATTEST: ___________________________________________ GEORGIANNA NICOLE ALVAREZ Chief Deputy City Clerk

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CERTIFICATION I, Georgianna Nicole Alvarez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2021-06 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 16th day of February, 2021, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Dated:

_________________________________________ GEORGIANNA NICOLE ALVAREZ


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Resolution CC 2021-06 Exhibit A

EXHIBIT “A”

GENERAL PLAN LAND USE MAP

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EXHIBIT A-1 (101 S Azusa)

EXISTING: Low Density Residential

PROPOSED: General Commercial

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EXHIBIT A-2 (905 E Wingate)

PROPOSED: General Commercial

EXISTING: Low Density Residential

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ORDINANCE 21-02

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, APPROVING ZONE CHANGES (ZCH) 20-001 AND 20-002, TO CHANGE THE ZONING CLASSIFICATION FOR TWO PARCELS FROM C-1 COMMERCIAL ZONE (NEIGHBORHOOD STORES) TO C-2 COMMERCIAL ZONE (NEIGHBORHOOD SHOPPING CENTER) (APN: 8428-023-001 AND 8442-006-023), APPROVING ZONING CODE AMENDMENT (ZCA) 20-005, TO DELETE CHAPTER 17.36, C-1 COMMERCIAL ZONE, OF THE COVINA MUNICIPAL CODE IN TIS ENTIRETY, AND MAKING A DETERMINATION OF EXEMPTION UNDER CEQA

WHEREAS, Government Code Section 65800 et seq. authorizes the adoption and administration of zoning laws, ordinances, rules and regulations by cities as a means of implementing the General Plan; and

WHEREAS, Chapters 17.06 and 17.80 of the Covina Municipal provides the procedures and administration of amendments and changes to the Zoning Map; and

WHEREAS, City staff prepared draft Ordinance 21-02, which proposes to amend the

Official Zoning Map of the City of Covina by changing the Zoning Classification from C-1 Commercial Zone (Neighborhood Stores) to C-2 Commercial Zone (Neighborhood Shopping center) for two parcels located at 101 S. Azusa Avenue (APN: 8442-006-023), and 905 E. Wingate Street (APN: 8424-023-001); and

WHEREAS, CMC Section 17.80.050 provides that any recommendation by the Planning

Commission for an amendment shall require an affirmative vote of not less than two-thirds of the total voting members after at least one public hearing and must be filed with the City Council, together with a report of findings, hearings, and other supporting data, within thirty (30) days after the conclusion of the public hearing; and

WHEREAS, notice of the public hearing for the General Plan Amendment, Zone Changes and Zoning Code Amendment was published in the San Gabriel Valley Examiner on February 4, 2021, in accordance with CMC Section 17.80.120 B. 1. All persons whose names and addresses appear on the latest available assessment roll of the County of Los Angeles, as owning property within 300 feet from the exterior boundaries of the subject properties were mailed the public hearing notices in accordance with CMC Section 17.80.120 B. 2.; and

WHEREAS, Sections 17.80.080 to 17.80.130 of the Covina Municipal Code (CMC) have been complied with in the consideration of Zone Changes (ZCHs) 20-001 and 20-002 and Zoning Code Amendment (ZCA) 20-005; and

WHEREAS, on November 24, 2020, the Planning Commission held a duly noticed public hearing on ZCHs 20-001 and 20-002 and ZCA 20-005, as prescribed by law, at which time City Staff an interested persons had an opportunity to and did testify either in support of or against this matter. Following the receipt of public testimony, the Planning Commission continued the item and the hearing to the Planning Commission’s regular meeting date of December 8, 2020. On

Page 9 of 28

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Ordinance 20-02 Page 2 of 4

December 8, 2020, the Planning Commission held a continued public hearing, at which time City Staff an interested persons had an opportunity to and did testify either in support of or against this matter. Following the receipt of public testimony, the Planning Commission continued the item and the hearing to the Planning Commission’s regular meeting date of December 22, 2020. On December 22, 2020, the Planning Commission held a continued public hearing, at which time City Staff an interested persons had an opportunity to and did testify either in support of or against this matter; and

WHEREAS, on February 16, 2021 the City Council of the City of Covina held a duly noticed public hearing as prescribed by law to consider the proposed Zone Changes (ZCH) 20-001 and 20-002 and Zoning Code Amendment (ZCA) 20-005. The City Council considered any comments received prior to or at the public hearing, at which time staff presented its report, and interested persons had an opportunity to and did testify either in support or in opposition to proposed Zone Changes and Zoning Code Amendment. Following consideration of the entire record of information received at the public hearing, the City Council closed the public hearing on that same date; and

WHEREAS, all legal prerequisites prior to adoption of this Ordinance have occurred. THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES

ORDAIN AS FOLLOWS: SECTION 1. On December 22, 2020, the Planning Commission held a duly noticed

continued public hearing regarding the proposed Zone Changes and Zoning Code Amendment, and following the receipt of public testimony, closed the hearing and adopted Resolution No. 20-035 PC, recommending that the City Council approve the proposed Zoning Code Amendment and Zone Changes by adoption of this Ordinance.

SECTION 2. On February 16, 2021, the City Council conducted a duly noticed public

hearing regarding the proposed Zone Changes and Zoning Code Amendment, and following the receipt of public testimony, closed the hearing.

SECTION 3. The City Council, based on its own independent judgement, has determined

that pursuant to the requirements of the California Environmental Quality Act (CEQA) and the state CEQA Guidelines, the proposed Zone Changes 20-001 and 20-002, and Zoning Code Amendment 20-005 are projects that would not directly or indirectly cause physical change as a result of discretionary approval. Section 15061 (Review for Exemption) requires that the Lead Agency make a determination whether the project is exempt from CEQA prior to an initial study. The proposed zone changes and zoning code amendment are not in conjunction with plans or permit applications that will either construct or demolish structures. Approval of the zone does not authorize developments that may have a significant effect on the environment. Per Section 15061(b)(3) of the CEQA Guidelines, the project is exempt from CEQA since it is not a project that would have potential for causing a significant effect on the environment.

SECTION 4. The City Council of the City of Covina does hereby find, determine and

declare that the proposed Zone Change complies with the General Plan objectives and policies:

Page 10 of 28


a. The proposed Zone Changes and Zoning Code amendment reduces inconsistencies between the General Plan and the Zoning Map under the Land Use Element Section I. B.2.j of the General Plan; and

b. The proposed Zone Changes and Zoning Code amendment is a procedure matter to achieve internal consistency between General Plan and Zoning Ordinance including Zoning Map as allowed by Section V Programs/Implementation Measures B1 of the Land Use Element.

SECTION 5. Zone Changes Approval. The City Council of the City of Covina does

hereby approve Zone Changes (ZCH) 20-001 and 20-002, amending the Official Zoning Map to change the Zoning Classification for the two parcels (APNs: 8442-006-023 and 8428-023-001) from C-1 Commercial Zone (Neighborhood Stores) to C-2 Commercial Zone (Neighborhood Shopping Center). Further, the City Council hereby directs the Director of Community Development to cause the amendment of the Official Zoning Map of the City of Covina to reflect ZCHs 20-001 and 20-002, attached hereto as Exhibit “A”.

SECTION 6. Zoning Code Amendment. Chapter 17.36, C-1 Commercial Zone

(Neighborhood Stores), of Title 17 of the Covina Municipal Code is hereby deleted in its entirety and amended to read as follows: “Chapter 17.36 Reserved”.

SECTION 7. Severability. If any section, subsection, sentence, clause, phrase, or portion

of this Ordinance is for any reason held to be invalid or unenforceable by a court of competent jurisdiction, the remaining portions of this Ordinance shall nonetheless remain in full force and effect. The City Council hereby declares that it would have adopted each section, subsection, sentence, clause, phrase, or portion of this Ordinance, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions of this Ordinance be declared invalid or unenforceable.

SECTION 8. Savings Clause. Neither the adoption of this Ordinance nor the repeal or

amendment by this Ordinance of any ordinance or part or portion of any ordinance previously in effect in the City or within the territory comprising the City, shall in any manner affect the prosecution for the violation of any ordinance, which violation was committed prior to the effective date of this Ordinance, nor be construed as a waiver of any license, fee or penalty or the penal provisions applicable to any violation of such ordinances.

SECTION 9. Effective Date. This Ordinance shall go into effect and be in full force and

effect at 12:01 a.m. on the 31st day after its passage. SECTION 10. Zoning Map. Section 17.06.050 of the CMC provides that the City Clerk

record all amendments and changes to the zoning map within 48 hours after such amendments or changes become effective.

SECTION 11. Certification. The City Clerk shall certify to the passage and adoption of

this Ordinance and shall cause this Ordinance to be published within 15 days after its passage, in accordance with Section 36933 of the Government Code.

SECTION 12. Notification. Within 30 days of the effective date of this Ordinance, the

Page 11 of 28


City Clerk shall notify the Los Angeles County Assessor of passage and adoption of this Ordinance in accordance with Section 65863.5 of the Government Code.

PASSED, APPROVED and ADOPTED this __ day of _____, 2021.


BY: VICTOR LINARES, Mayor

ATTEST: ________ GEORGIANNA NICOLE ALVAREZ Chief Deputy City Clerk APPROVED AS TO FORM: ___________ CANDICE K. LEE, City Attorney

CERTIFICATION

I, Georgianna Nicole Alvarez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Ordinance 21-02 was introduced for first reading at a regular meeting on the __ day of _____, 2021. Thereafter, said Ordinance was duly approved and adopted at a regular meeting of said City Council on the __ day of _____, 2021, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Dated:

GEORGIANNA NICOLE ALVAREZ Chief Deputy City Clerk

Page 12 of 28

Ordinance 20-02 Exhibit A

EXHIBIT “A”

ZONING MAP

Page 13 of 28


EXHIBIT A-1 (101 S Azusa)

EXISTING: C‐1 Commercial Zone (Neighborhood Stores)

PROPOSED: C‐2 Commercial Zone (Neighborhood Shopping Center)

Page 14 of 28


EXHIBIT A-2 (905 E Wingate)

PROPOSED: C‐2 Commercial Zone (Neighborhood Shopping Center)

EXISTING: C‐1 Commercial Zone (Neighborhood Stores)

Page 15 of 28

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ITEM NO. PH 3

Meeting: CC Regular Meeting - Feb 16 2021 Title: 2021CCResolution - as(MND)Declaration NegativeMitigated Approving 10, a

Adequately Prepared in Accordance with California Environmental Quality Act (CEQA), the Required Findings Under CEQA and the Mitigation Monitoring and Reporting Program for GPA 19-00, TTM 83202 and SPR 20-004, and Approving General Plan Amendment (GPA) 19-002, Amending the Land Use Map of the Covina General Plan to Change the Land Use Designation from School to High Density Residential for a 0.72-Acre F342 at LocatedProperty, South ourth Avenue – 8444APN: -010- and900; Resolution CC 2021-11, Approving Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, a Residential Subdivision for Condominium Purpose and the Development of the Property for 10-Unit Townhouses on Approximately 0.72 Acres of Land Zoned RD Residential Zone (Multiple-Family), Located at 342 South Fourth Avenue – APN: 8444-010-900

Presented By: Brian K. Lee, Director of Community Development Recommendation: Adopt Resolution CC 2021-10 approving a Mitigated Negative Declaration (MND) as

adequately prepared in accordance with California Environmental Quality Act (CEQA), the required findings under CEQA and the Mitigation Monitoring and Reporting Program for GPA 19-00, TTM 83202 and SPR20-004, and approving General Plan Amendment (GPA) 19-002, amending the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue – APN: 8444-010-900; and Adopt Resolution CC 2021-11, approving Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, a residential subdivision for condominium purpose and the development of the property 10for - townhouses land ofacres 0.72 unit on zonedapproximately RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue – APN: 8444-010-900.

EXECUTIVE SUMMARY / BACKROUND: On January 12, 2021, the Planning Commission held the public hearing to consider the proposed project. The Planning Commission did not receive any comments from the public at the hearing. After the close of public hearing and deliberation, the Planning Commission in an unanimous vote adopted Resolution 2021-001 PC, recommending that the City Council adopt the Mitigated Negative Declaration (MND) including the Mitigation Measures And Monitoring Program (MMRP), and approve the General Plan Amendment (GPA) 19-002, Tentative Tract Map (TTM) 83203, and Site Plan Review (SPR) 20-004 with an added condition. DISCUSSION: At the January 12, 2021 public hearing, a member of the Planning Commission raised a concern about the project site having a strong tie to Covina Union High School. Historically, the site and its building were used by Southern California Edison as a warehouse and pole yard from 1920s through 1953. Covina Union High School used the former Edison building as a “business office” between 1953 and 1960, where the Tri-Community Adult School began in 1960. As a result, the Planning Commission added a condition of approval requiring the Applicant to install a historic plaque on a decorative pedestal within the Puente Street frontage. The historic plaque will provide a short story on the site ties to Covina Union High School, subject to the

Director of Community Development review and approval. The Applicant stated that he agreed with the added condition of approval at the public hearing. With respect to the General Plan Amendment, the Planning Commission stated that they agreed with the staff in changing the land use designation from “School” to “High

Density Residential” for consistency purpose between General Plan and Zoning. The Planning Commission

concurred with staff that the proposed project, a 10-unit townhouses, complied with the development standards and design guidelines for the RD Residential Zone (Multiple-family). Attached for the City Council reference is the January 12, 2021 staff report as Attachment B. FISCAL IMPACT: The project will have recurring annual fiscal impacts of revenue from property tax, community facilities district, and other taxes and service fees. There is a one-time investment by the applicant including infrastructure construction, development impact fees, and permit fees. CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): In accordance with CEQA, the City of Covina has completed an Initial Study to determine whether the project may have a significant effect on the environment. The Initial Study, which reflects the independent judgment of the City, concludes that the project will not have a significant effect on the environment. The City has therefore prepared a Mitigated Negative Declaration (MND), to be considered by the Planning Commission and City Council. Pursuant to Section 15072 of the CEQA guidelines, the project site is not on any of the lists enumerated under Section 65962.5 of the Government Code. The MND identifies that the proposed project would result in no impact or less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources, and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND. The Notice of Intent to adopt the MND was published in the San Gabriel Valley Examiner on September 3, 2020, and the MND was released for a 20-day public comment period beginning on September 3, 2020 and ending on September 23, 2020. There was no comment letter received for the draft MND. The Final MND has been completed in accordance with the requirements of the State CEQA Guidelines (14 Cal. Code Regs. Section 15000 et. seq). ATTACHMENTS: Attachment A - Area Map Attachment B - PC Staff Report Attachment C - Resolution No. 2021-001 PC Attachment D - Resolutions CC 2021-10 & 2021-11 Respectfully submitted,

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EXHIBIT A

Area Map

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Attachment A

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GPA 19-002 TTM 83203 SPR 20-004

----------376.17 Feet

AREA MAP

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EXHIBITB

January 12, 2021 Planning Commission Staff Report

With Development Plans and

Initial Study/Mitigated Negative Declaration

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Attachment B

CITY OF COVINA

PLANNING COMMISSION AGENDA REPORT ITEM NUMBER PH 1

January 12, 2021

TO: Chairman and Members of the Planning Commission

FROM: Brian K. Lee, AICP, Director of Community Development

SUBJECT: Mitigated Negative Declaration (MND), adopting an MND as adequately prepared in accordance with California Environmental Quality Act (CEQA) and adoption of the required findings under CEQA and the Mitigation Monitoring and Reporting Program for General Plan Amendment (GPA) 19-002, Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, for the proposed 1 0-unit townhouse development; and General Plan Amendment (GPA) 19-002, amending the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue- APN: 8444-0 1 0-900; and Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, approving a residential subdivision for condominium purpose and the development of the property for 10-unit townhouses on approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue- APN: 8444-010-900.

SITE AND PROJECT INFORMATION

A. Project Information:

Request: Applicant: Property Owner: Location:

Recommend approval of GPA, TTM and SPR Mihran Jaghlassian Ara Tchghlassian 342 South Fourth Avenue

Assessor Parcel Map No: 8444-010-900 (8444-0 1 0-028 new APN as of May 2020)

B. Table 1: Site and Surrounding Land Uses

General Plan r,':··~i. Zoning .;_;.,: <~ ,,.,~;·~ Existing Uses ··~· "' -•'

Site School RD-1250 Unoccupied structures, formerly Tri-Communi!Y_ Adult School

North High Density RD-1250 Multi-family residences Residential (HDR)

South School R-1-7500; RD-3000 Covina Valley Unified School District, District Field

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East High Density RD-1250 Multi-family residences Residential (HDR)

West Low Density R-1-7500 Single-family residences Residential (LDR)

C. Site Characteristics: The project site is approximately 31,500 square feet (0.72 acres) in size and located at the northeast corner of South Fourth Avenue and West Puente Street. The north side of the project site is an existing alley. The project site contained two vacant buildings and a parking area. Covina Valley Unified School District formerly owned the project site and used it for the Tri-Community Adult Education Program. Currently, the project site is fenced for security reasons and prevent nuisance problems.

~ALYSIS

A. Background: Around March 2019, the applicant submitted a pre-application review and a General Plan Amendment for a proposed 17-unit residential development on the subject site. Staff provided comments on the intensity of the proposed 17-unit residential development and the need to comply with the various development standards and design guidelines. The applicant worked with staff in presenting different residential concepts to ensure the project complies with all the development standards and design guidelines. In February 2020, the applicant formally submitted the Site Plan Review application, and in October 2020, the Tentative Tract Map application for the subdivision of the units as condominiums. The final development proposal is for a 1 0-unit townhouse project with attached 3-car garage.

B. General Plan Amendment (GPA) 19-002: The General Plan Land Use Designation for the project site is "School," and the Zoning Classification is RD-1250. As a result, a General Plan Amendment is necessary to change the Land Use Designation from "School" to "High Density Residential" for consistency purpose and allow residential development on the project site. The proposed 1 0-unit townhouse project's density is about 13.8 units per acre and is within the density range of the High Density Residential at 15 to 22 units per acre. According to Section V Programs/Implementation Measure of the General Plan Land Use Element, the City is responsible for administering the programs to ensure land use consistency as follows:

• Consistency between General Plan and Other Plans/Documents. Where necessary, the Planning Division will ensure consistency between the revised Land Use Element and these other germane plans/documents such as Zoning Text and Map, Subdivision Ordinance, to name a few (Section V- B2)

• Maintenance of City Departments/Divisions Responsible for Land Use Matters. Maintain departments/divisions to, among other things, appropriately administer and monitor the General Plan, Zoning Ordinance, and Design Guidelines. (Section V - B6)

C. Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 19-021:

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1. Development Standards and Project Data. The following Table 2 illustrates the proposed project compliance with RD Residential Zone (Multiple-Family) Development Standards Section 17.28 and Parking Section 17.72 of the Covina Municipal Code:

T bl 2 Ch t 17 28 a e - ap1er . Development Standards Minimum Requirement · Proposed Pro~~~~-~~W/i~~ ~ (RDZone) ... • ,1t ... ~

Lot Size Lot area 7,200 sf 31,500 squarefeet Lot dimensions 60 ft width and 120 ft 180feet by 175feet

length Development Denslty Population density RD-1250: No less than 1 One unit per 3,150 sf

unit per 1 ,250 sf

Land covera_g_e Maximum35% 34.6% Yards/Setbacks Front yard 25 feet 25ft

Second floor setback 40 feet 40feel Street Side yard 12.5 feet 12.5 feel Interior Side yard 1 0 feet (two-story)_ 10feel Rear yard 25 feet 25feetf2r building

garage 5 feet 5(eet f2r_garag_e Building Height Maximum 35 feet 27 feel Parkin2

Three bedroom 2-car garage 3-car garage for 9 units and 2-car garage for Unit 10

Guest parking 1 space/5 units 3 spaces provided Op_en Spaces (Private and Common) Usable yard area Required 15% of site ( 4, 725 sf) 5,100 sf(15.3% of site) Private usable

Ground Floor patio 200 sf/unit 200 sf/unit (9) & 240 sf(l)= 2040sf

Second Floor balcony 120 sf/unit No balcony proposed Common Usable 400 sf 3,060sf Amenities Laundry facilities Private laundry space Complied

contained within the unit Storage 1 7 5 cubic feet storage area 175 cubic feet within garage

with a minimum dimension of four feet

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2. Site Plan, Access, and Circulation. The proposed project is a townhouse product. Building A is a cluster of 5 units and fronts onto W Puente Street. Building B is a duplex, and Building Cis a triplex. Both buildings front the alley. Each unit includes an attached 3-car space garage except for Unit 10. The main driveway into the project is off S. Fourth A venue, and it provides access to the garages. The north side of the project site is an existing alley. It provides access for 3 guest parking spaces and access to a 2-car garage for Unit 10. Continuous pedestrian walkways are proposed along the W. Puente Street frontage and S. Fourth Avenue frontage in addition to public sidewalk. A pedestrian walkway is proposed for the paseo open space between Buildings B and C, which also provides access to the centralized trash enclosure area. Another pedestrian walkway is proposed along the east side of the project site for access to the alley.

3. Unit Size and Parking. The proposed unit size is 1,400 square feet for Units 1 through 9, and 1,250 square feet for Unit 10. All the townhouse unit is three bedrooms. Unit 1 through 9 has an attached 3-car garage, while Unit 10 has an attached 2-car garage. There are three (3) guest parking spaces located off the alley. The project meets and exceeds the number of required parking spaces.

4. Building Design: The proposed townhouses are one and two-story in height. The front portion of the unit is one-story and transitioned to two-story. The one- and two-story townhouse design provides a proper horizontal and vertical step-back, which allows for changes in roof form and height, thus, creating architectural interest. The architectural style is Mediterranean with red Spanish style roof, stucco building walls, roof rafter tails and enhanced window sills. A 5-foot high garden stucco wall defines the front patio area and provides for privacy.

FACTS OF FINDINGS FOR THE PROJECT

A. Finding of Facts for Tentative Tract Map: Per Subdivision Ordinance CMC Section 16.02.050, the Planning Commission is a recommending body to the City Council for the Tentative Tract Map application. Although the Site Plan Review application is subject to Planning Commission review and approval, in this case, staff recommends that the Planning Commission forward the decision for both the Tentative Tract Map and Site Plan Review to the City Council for review and final action. To recommend the project's approval, the Planning Commission must make the following facts to support the findings per Subdivision Ordinance CM Section 16.08.120.

1. The proposed subdivision is consistent with the general plan and any applicable specific plan for the area.

Findings of Facts: The General Plan Land Use Designation for the project site is "School," and the Zoning Classification is RD-1250. The approval of a General Plan Amendment changing the Land Use Designation from "School" to "High Density Residential" will make the project consistent with the General Plan and allow the residential development on the project site. The proposed 1 0-unit townhouse project's density is about 13.8 units per acre and is within the density range of the High Density Residential at 15 to 22 units per acre.

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Section V Programs/Implementation Measure of the General Plan Land Use Element requires the City to administer the programs to ensure land use consistency. Therefore, the proposed subdivision with the approval of the General Plan Amendment will be consistent with the General Plan.

2. The design or improvement of the proposed subdivision is consistent with the general plan and any applicable specific plan for the area.

Findings of Facts: The Land Use Element ofthe General Plan Policy C2a (8), (9) and (10) "encourage the construction of owner-occupied housing, medium to high density complexes be developed in appropriately designated areas and replace old, deteriorating structures and whenever possible, encourage lot consolidation for apartment, condominium, and townhouse ... " With its design and improvements, the project will redevelop a vacant, deteriorating site and create additional for-sale owner-occupied housing. The project, with its design and improvements, will meet the Land Use Policy 3. Therefore, the project design and its improvements are consistent with the general plan and any applicable specific plan for the area.

3. The subdivision is physically suitable for the type and proposed density of development proposed by the tentative map.

Findings of Facts: The overall project design meets the minimum standards and complies with the applicable RD Residential Zone Development Standards Section 17 .28, Parking Section 17.72 of the Covina Municipal Code and 2009 Design Guidelines with respect to density, yards, setbacks, building height, percentage of landscaping, parking and floor area ratio as illustrated in Table 2 of the staff report.

4. The design of the subdivision and proposed improvements, with the conditions of approval, are not likely to cause significant environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

Findings of Facts: In accordance with CEQA, the City of Covina has completed an Initial Study to determine whether the project may have a significant effect on the environment. The Initial Study, which reflects the City's independent judgment, concludes that the project will not have a significant effect on the environment. Therefore, the City has prepared a Mitigated Negative Declaration (MND). The MND identifies that the proposed project would result in no impact or less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources, and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND. Therefore, the subdivision will not

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be likely to cause significant environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

5. The design of the subdivision and the type of improvements are not likely to cause serious public health problems.

Findings of Facts: North and east side of the project site are existing multi-family development. West of the project site are existing single family houses but physically separated by a public street. South of the site is the Covina Valley Unified School District's sport field that may have intensive sport events. Therefore, the subdivision design and the type of improvements are not likely to cause serious public health problems.

6. The design of the subdivision provides for future passive or natural heating and cooling opportunities in the subdivision to the extent feasible.

Findings of Facts: The design of the subdivision and the residential units must have passive solar cooling and heating for the buildings in compliance with the latest Title 24 of the Uniform Building Code.

7. The design of the subdivision and the type of improvements will not conflict with easements acquired by the public at large for access through or use of property within the proposed subdivision, or the design of the alternate easements which are substantially equivalent to those previously acquired by the public will not be provided.

Findings of Facts: The subdivision design will not conflict with existing City rights-of-way or other public access easements. The project will dedicate 3 feet for the public alley toward the north side and 7 feet along W. Puente Street. Public Works staff stated there is no requirement for street widening and physical improvement for the 7-foot dedication along W. Puente street. There are no alternate or potential easements that would be affected by the proposed project.

8. The subdivision is consistent with the City's parkland dedication requirements (Quimby Act).

Findings of Facts: The proposed project is subject to Parkland Impact Fee to the City, pursuant to the City's Quimby Act Ordinance (CMC Chapter 16.28).

9. The subdivider is able to demonstrate that a sufficient water supply will be available to serve the subdivision, in accordance with California Government Code Section 66473.7. (Ord. 05-1915 § 1, 2005.)

Findings of Facts: According to the City's Public Works Department, the City has sufficient capacity to provide water to serve the subdivision without negative impact to other properties in the City, based on Covina's 2015 Urban Water Management Plan.

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B. Findings for Site Plan Review (CMC Section 17.64.07Q): To recommend approval of the Site Plan Review (SPR) application, the Planning Commission must make the findings listed under CMC 17.64.070 and as listed below.

1. All provisions of this title are complied with and so arranged that traffic congestion is avoided, pedestrian and vehicular safety and welfare are protected, with no adverse effect to surrounding properties. In so doing so, use of land and/or buildings are designed in harmony with abutting properties in the same district by considering the following: buildings, structures and improvements, vehicle ingress, egress and internal circulation, setbacks, building height, location of service, walls, and landscape materials.

Fact: The project, with the approval of the General Plan Amendment and the Tentative Tract Map, allow the opportunity to redevelop a vacant deteriorated property with new residential development, thus adding new housing units to the City. City staff has reviewed the project design against the applicable RD Residential Zone (Multi-Family) Development Standards Section 17.28, Parking Section 17.72 of the Covina Municipal Code and 2009 Design Guidelines. The project demonstrated compliance with the various codes and standards, as illustrated in Table 2 of the staff report, such as density, setbacks, building height, landscaping, access and circulation, and site improvements. The project, with its improvements, will have no adverse effect to the surrounding properties.

2. The project design conforms to the general plan, the design guidelines, transportation demand management regulations, and any specific plan or guidelines applicable to the project;

Fact: The project demonstrated compliance with the various codes and standards, including Design Guidelines as illustrated in Table 2 of the staff report, such as setbacks, parking, building height, amount of landscaping and site improvements. Therefore, the project design with the approval of the General Plan Amendment and the subdivision map, together with the conditions of approval, conform to the general plan, the design guidelines, transportation demand management regulations, and applicable specific plan or guidelines.

3. The project design is harmonious, consistent and complete within itself and functionally and visually compatible with neighboring structures and the area in which it is located;

Fact: The project is a 1 0-unit townhouse development, and the units are similar to existing multi-family units to the north and east sides of the project site. The one- and two-story design of the townhouse provide visual compatibility to the neighboring residential character. Therefore the project design is harmonious, consistent, and complete within itself and functionally and visually compatible with neighboring structures and the area in which it is located.

4. The development will constitute an adequate environment for the intended use by sustaining the desirability and stability of the neighborhood and community;

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Fact: The project will provide additional for-sale owner-occupied units to the City. Therefore, the project and the intended use will sustain the desirability and stability of the neighborhood and community.

5. Proposed lighting is so arranged as to reflect lighting away from adjoining properties;

Fact: Any exterior lighting on the building must be hooded and erected to reflect away from adjoining properties. A detailed lighting plan is required for compliance with the Zoning Code and Design Guidelines' applicable safety, security, and design-related provisions.

6. Proposed signs will not by size, location, color, or lighting, interfere with traffic or limit visibility;

Fact: Any proposed signage is not a part of this review and approval. Any sign requires a separate sign permit application and sign plans that must show compliance with Covina's Sign Ordinance.

7. Utility and street improvements.

Fact: The applicant is required to underground utilities and complies with street improvements required by the Department of Public Works (Engineering, Traffic, and Environmental Services.)

PUBLIC HEARING NOTICE AND NOTIFICATION

The applicant was given a copy of the staff report, and all property owners within a radius of at least 300 feet from the overall project site were mailed notices of the Planning Commission public hearing on December 23, 2020, more than ten (1 0) days before the hearing as required by law. In addition, the public hearing notice was published in the San Gabriel Valley Examiner newspaper on December 31, 2020.

ENVIRONMENTAL DETERMINATION

In accordance with CEQA, the City of Covina has completed an Initial Study to determine whether the project may have a significant effect on the environment. The Initial Study, which reflects the independent judgment of the City, concludes that the project will not have a significant effect on the environment. The City has therefore prepared a Mitigated Negative Declaration (MND), to be considered by the Planning Commission and City Council. Pursuant to Section 15072 of the CEQA guidelines, the project site is not on any of the lists enumerated under Section 65962.5 of the Government Code.

The MND identifies that the proposed project would result in no impact or less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and

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water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources, and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND. The Notice of Intent to adopt the MND was published in the San Gabriel Valley Examiner on September 3, 2020, and the MND was released for a 20-day public comment period beginning on September 3, 2020 and ending on September 23, 2020. There was no comment letter received for the draft MND. The Final MND has been completed in accordance with the requirements of the State CEQA Guidelines (14 Cal. Code Regs. Section 15000 et. seq).

RECOMMENDATION

Staff recommends that the Planning Commission adopt Resolution No. 2021-001 PC, recommending issuance of a Mitigated Negative Declaration and approval of GPA 19-002, TTM 83203 and SPR 20-004 with conditions to the City Council.

EXHIBITS

1. Area Map 2. Application Materials 3. 300-foot Radius Map and Notification List 4. Development Plans (reductions) 5. Existing and Proposed General Plan Amendment (map) 6. Resolution No. 2021-001 PC recommending approval of GPA, TTM and SPR to City

Council with Draft City Council Resolutions for GP A, TTM and SPR 7. Mitigated Negative Declaration (MND)

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EXHIBIT 5

EXISTING AND PROPOSED LAND USE DESIGNATION

Page 41 of 80

INITIAL STUDY I

MITIGATED NEGATIVE DECLARATION

Fourth Avenue Residential Development Project

https://www.covinaca.gov/pc/project/342-s-fourth-ave-project/

Page 42 of 80

EXlllBIT C

Planning Commission Resolution No. 2021-001 PC

Page 43 of 80

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Attachment C

RESOLUTION NO. 2021-001 PC

A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF COVINA, CALIFORNIA, RECOMMENDING THAT THE CITY COUNCIL MAKE ENVIRONMENTAL FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, ADOPT A MITIGATED NEGATIVE DECLARATION, AND ADOPT A MITIGATION MONITORING AND REPORTING PROGRAM; APPROVE GENERAL PLAN AMENDMENT (GPA) 19-002, AMENDING THE LAND USE MAP OF THE COVINA GENERAL PLAN TO CHANGE THE LAND USE DESIGNATION FROM SCHOOL TO IDGH DENSITY RESIDENTIAL; AND, APPROVE TENTATIVE TRACT MAP (TTM) 83203 AND SITE PLAN REVIEW (SPR) 20-004, A RESIDENTIAL SUBDIVISION FOR CONDOMINIUM PURPOSE AND THE DEVELOPMENT OF A 10-UNIT TOWNHOUSE PROJECT ON APPROXIMATELY 0.72 ACRES OF LAND, LOCATED AT 342 SOUTH FOURTH AVENUE - APN 8444-010-028 (8444-010-900 PREVIOUS APN NUMBER)

WHEREAS, Ara Tchghlassian (the""Applicant") has submitted the following land use entitlements, which are collectively referred to as the "Project":

1. General Plan Amendment (GPA) 19-002, to amend the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue- APN: 8444-010-900.

2. Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, to approve a residential subdivision for condominium purpose and the development of the property for a 10-unit townhouse project on approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue- APN: 8444-010-900.

WHEREAS, the Project is considered a "project" as defined by the California Environmental Quality Act (Cal. Pub. Resources Code, § 21000 et seq.) (CEQA) and the State CEQA Guidelines (14 Cal. Code Regs. § 15000 et seq.) (CEQA Guidelines);

WHEREAS, pursuant to CEQA, the City is the lead agency for the Project. The City subsequently contracted for the independent preparation of environmental review for the Project, including all necessary technical studies and reports;

WHEREAS, in September 2020 the City completed an Initial Study in accordance with CEQA to determine whether the Project may have a significant effect on the environment. The Initial Study, which reflects the independent judgment of the City, concluded that the Project will not have a significant effect on the environment with the incorporation of mitigation measures. The City has therefore prepared a Mitigated Negative Declaration (MND) to be considered by the Planning Commission and City Council. Pursuant to Section 15072 of the CEQA Guidelines, the

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'') Project site is not on any of the lists enumerated under Government Code Section 65962.5; and

~ '!

WHEREAS, the MND identifies that the proposed project would result in no impact or less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population ~d housing, recreation, transportation and traffic, tribal cultural resources, and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND; and

WHEREAS, early in the Project review process, and pursuant to Senate Bill 18 and Assembly Bill 52 (Required Consultation with Native Americans), staff sent early Project consultation letters to ten Native American tribes on January 13, 2020. Staff received one response from the Gabrieleno Band of Mission Indians-Kizh Nation, and conducted a consultation meeting with Kizh Nation on February 3, 2020. A representative ofKizh Nation stated there is not a need for mitigation. Consultation with Kizh nation was concluded on April 13, 2020 via email; and

WHEREAS, a Notice of Intent to adopt the MND was published in the San Gabriel Valley Examiner on September 3, 2020, and the MND was released for a 20-day public comment period beginning on September 3, 2020, and ending on September 23, 2020. No comment letters were received during the MND review period; and

WHEREAS, on December 31, 2020, a notice of a public hearing in the San Gabriel Valley Examiner before the Planning Commission was also sent to all property owners within 300 feet of the Project site; and

WHEREAS, on January 12, 2021, at the duly noticed meeting as prescribed by law, the Planning Commission considered the proposed Project and any comments received prior to or at the public hearing, at which time City staff presented its report, and interested persons had an opportunity to and did testify either in support or in opposition to the proposed Project and the Final MND and the MMRP; and

WHEREAS, all legal prerequisites prior to adoption of this Resolution have occurred.

NOW, THEREFORE, THE PLANNING COMMISSION OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. California Environmental Quality Act Findings for Adoption of Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program. Based on the entire record, and reviewing the MND and written comments thereon, and considering all oral and written information regarding the Project and MND presented before and at the Planning Commission's hearing on January 12,2021, the Planning Commission hereby fmds, determines, and resolves as follows:

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. "~ a. The above recitals are true and correct, and the Planning Commission hereby , incorporates them into this Resolution by this reference;

b. Public agencies and interested members of the public have been afforded ample notice and opportu:nity to comment on the MND and the Project;

c. The Project has been environmentally reviewed pursuant to the provisions of CEQ A and the State CEQA Guidelines;

d. The Planning Commission has reviewed and considered the MND, and the written comments thereon, and, based on the whole record before it, the Planning Commission hereby recommends that the City Council make the following findings: find that the MND was prepared for the proposed Project in compliance with CEQA; find that, with the incorporation of mitigation measures, there is no substantial evidence that the Project will have a significant effect on the environment; and, fmd that the MND reflects the independent judgement and analysis of the City Council, and adopt the MND and MMRP for the proposed Project

SECTION 2. Planning Commission Recommendation for Project Approval. After giving full consideration to all evidence presented at the public hearing and in consideration of the findings stated in the attached City Council Resolutions (as listed below), the Planning Commission of the City of Covina does hereby recommend that the City Council of the City of Covina adopt the Resolutions attached hereto as Attachments "A-1" and "A-2," adopting the MND and MMRP for the Project and approving GPA 19-002, TTM 83203 and SPR 20-004:

1. Council Draft Resolution CC 2021-XXX, A Resolution of the City Council of the City of Covina, California, Making Environmental Findings Pursuant to the California Environmental Quality Act, Adopting a Mitigated Negative Declaration, and Adopting a Mitigation Monitoring and Reporting Program and Approving General Plan Amendment (GPA) 19-002 amending consider amending the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue- APN: 8444-010-028 (8444-010-900 previous number); and

2. Council Draft Resolution CC 2021-XXX, A Resolution of the City Council of the City of Covina, California, Making Environmental Findings Pursuant to the California Environmental Quality Act, Adopting a Mitigated Negative Declaration, and Adopting a Mitigation Monitoring and Reporting Program, and Approving Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, for residential subdivision for condominium purpose and the development of the property for a 1 0-unit townhouse project on approximately 0. 72 acres of land zoned RD Residential Zone (MultipleFamily), located at 342 South Fourth Avenue APN: 8444-010-028 (8444-010-900 previous number).

SECTION 3. The documents and materials that constitute the record of proceedings on which these findings and this Resolution are based are located at the City Clerk's Office or the Community Development Department, Planning Division, located at 125 E. College Street,

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Covina, CA 91723 or at www.covinaca.gov. The custodian of these records is the City Clerk.

SECTION 4. The Secretary shall certify the adoption of this Resolution. ' I ' I ft

PASSED, APPROVED AND ADOPTED by the members of the Planning Commission of Covina this 12th day of January, 2021.

c~ CITY OF COVINA PLANNING COMMISSION

I hereby certify that the foregoing is a true copy of a Resolution adopted by the Planning Commission of the City of Covina at a regular meeting thereof held on the 12th. day of January, 2021, by the following vote of the Planning Commission:

AYES: NOES: ABSENT: ABSTAIN:

HODAPP, CONNORS, MANNING, MCKEENIN, ZERMENO NONE NONE

ONE

4

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Attachment D

Resolution CC 2021-10 and Resolution CC 2021-11

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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, MAKING ENVIRONMENTAL FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, ADOPTING A MITIGATED NEGATIVE DECLARATION, AND ADOPTING A MITIGATION MONITORING AND REPORTING PROGRAM; AND, APPROVING GENERAL PLAN AMENDMENT (GPA) 19-002, CHANGING THE LAND USE DESIGNATION FROM SCHOOL TO HIGH DENSITY RESIDENTIAL FOR A 0.72-ACRE PROPERTY, LOCATED AT 342 SOUTH FOURTH AVENUE - APN: 8444-010-028 (8444-010-900 PREVIOUS NUMBER) WHEREAS, Ara Tchghlassian (the “Applicant”) has submitted the following land use

entitlements, which are collectively referred to as the “Project”:

1. General Plan Amendment (GPA) 19-002, to amend the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue – APN: 8444-010-900.

2. Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, to approve a residential subdivision for condominium purpose and the development of the property for a 10-unit townhouse project on approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue – APN: 8444-010-900; and

WHEREAS, the Project is considered a “project” as defined by the California

Environmental Quality Act (Cal. Pub. Resources Code, § 21000 et seq.) (CEQA) and the State CEQA Guidelines (14 Cal. Code Regs. § 15000 et seq.) (CEQA Guidelines); and

WHEREAS, pursuant to CEQA, the City is the lead agency for the Project. The City

subsequently contracted for the independent preparation of environmental review for the Project, including all necessary technical studies and reports; and

WHEREAS, in September 2020 the City completed an Initial Study in accordance with

CEQA to determine whether the Project may have a significant effect on the environment. The Initial Study, which reflects the independent judgment of the City, concluded that the Project will not have a significant effect on the environment with the incorporation of mitigation measures. The City has therefore prepared a Mitigated Negative Declaration (MND) to be considered by the Planning Commission and City Council. Pursuant to Section 15072 of the CEQA Guidelines, the Project site is not on any of the lists enumerated under Government Code Section 65962.5; and

WHEREAS, the MND identifies that the proposed project would result in no impact or

less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources,

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and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND; and

WHEREAS, early in the Project review process, and pursuant to Senate Bill 18 and Assembly Bill 52 (Required Consultation with Native Americans), staff sent early Project consultation letters to ten Native American tribes on January 13, 2020. Staff received one response from the Gabrieleno Band of Mission Indians-Kizh Nation, and conducted a consultation meeting with Kizh Nation on February 3, 2020. A representative of Kizh Nation stated there is not a need for mitigation. Consultation with Kizh nation was concluded on April 13, 2020 via email; and

WHEREAS, a Notice of Intent to adopt the MND was published in the San Gabriel Valley

Examiner on September 3, 2020, and the MND was released for a 20-day public comment period beginning on September 3, 2020, and ending on September 23, 2020. No comment letters were received during the MND review period; and




WHEREAS, local governments are authorized by Government Code Section 65350 et seq.

to prepare, adopt and amend general plans; and

WHEREAS, the staff report and supporting materials accompanying this resolution are found to be true, are adopted as Facts and Findings, and are incorporated by reference in this resolution; and

WHEREAS, the City Council, at a regular meeting, considered this Resolution on February 16, 2021, at a duly noticed public hearing, as prescribed by law, at which time the City Staff and interested persons had an opportunity to and did testify either in support or against this matter; and



SECTION 1. California Environmental Quality Act Findings. The City Council has independently reviewed and considered the contents of the Final MND prior to rendering a decision on the Project. The City Council hereby finds that the Final MND reflects the independent

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judgment of the City. None of the information presented to the Planning Commission or City Council has deprived the public of a meaningful opportunity to comment upon an environmental impact of the Project or a feasible mitigation measure or alternative that COVINA has declined to implement. The City Council further finds that substantial evidence in light of the whole record supports the conclusion, as found in the Final MND that the Project will not result in any significant effect on the environment following the incorporation of mitigation measures. Therefore, the City Council finds that the Project will not have a significant effect on the environment and hereby adopts the MND, and the Mitigation Monitoring and Reporting Program for the proposed Project, incorporated herein by this reference, and imposes each mitigation measure as a condition of Project approval.

SECTION 2. The City Council has reviewed the proposed changes to the Land Use Map, the Planning Commission hearing input and reports, and all evidence received by the Planning Commission and at the City Council hearings, and all documents and evidences are hereby incorporated by reference into this Resolution. After giving full consideration to all evidence presented at the public hearing, both oral and written, and after being fully informed, the City Council does hereby find and decide that the proposed General Plan Amendment is consistent with the public interest and with the City’s General Plan for the following reasons:

a. The proposed Amendment increase opportunities for in-fill development, and

redevelopment of deteriorating properties, particularly of housing creation and rehabilitation and economic development purposes under the Land Use Element Section III C.1.a.6 of the General Plan; and

SECTION 3. After giving full consideration to all evidence presented at the public

hearing, and in consideration of the findings stated in Section 2 of this Resolution, the City Council hereby approves General Plan Amendment (GPA) 19-002, amending the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue – APN: 8444-010-028 (844-010-900 Previous Number) as set forth in Exhibit A to this Resolution.

SECTION 4. The City Council hereby directs the Director of Community Development to prepare and file a Notice of Determination with the County Clerk pursuant to Section 15075 of the California Code of Regulations.

SECTION 5. The documents and materials that constitute the record of proceedings on

which these findings and this Resolution are based are located at the City Clerk’s Office located at 125 E. College Street, Covina, CA 91723. The custodian of these records is the City Clerk.

SECTION 6. Effective Date. This Resolution shall be effective upon adoption. SECTION 7. Certification. The City Clerk shall certify to the passage and adoption of


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BY:


ATTEST: GEORGIANNA NICOLE ALVAREZ Chief Deputy City Clerk

CERTIFICATION I, Georgianna Nicole Alvarez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2020-10 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 16th of February, 2021, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Dated:


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EXHIBIT A – GPA 19-002 Amending Land Use Designation from School to High Density Residential

Proposed Land Use Designation - High Density Residential

Existing Land use Designation - School

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A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, MAKING ENVIRONMENTAL FINDINGS PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT, ADOPTING A MITIGATED NEGATIVE DECLARATION, AND ADOPTING A MITIGATION MONITORING AND REPORTING PROGRAM; AND, APPROVING TENTATIVE TRACT MAP (TTM) 83203 AND SITE PLAN REVIEW (SPR) 20-004, A RESIDENTIAL SUBDIVISION FOR CONDOMINIUM PURPOSE AND THE DEVELOPMENT OF A 10-UNIT TOWNHOUSE PROJECT ON APPROXIMATELY 0.72 ACRES OF LAND, LOCATED AT 342 SOUTH FOURTH AVENUE - APN 8444-010-028 (8444-010-900 PREVIOUS APN NUMBER)

WHEREAS, Ara Tchghlassian (the “Applicant”) has submitted the following land use

entitlements, which are collectively referred to as the “Project”:

1. General Plan Amendment (GPA) 19-002, to amend the Land Use Map of the Covina General Plan to change the Land Use designation from School to High Density Residential for a 0.72-acre property, located at 342 South Fourth Avenue – APN: 8444-010-900.

2. Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, to approve a residential subdivision for condominium purpose and the development of the property for a 10-unit townhouse project on approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue – APN: 8444-010-900; and

WHEREAS, the Project is considered a “project” as defined by the California

Environmental Quality Act (Cal. Pub. Resources Code, § 21000 et seq.) (CEQA) and the State CEQA Guidelines (14 Cal. Code Regs. § 15000 et seq.) (CEQA Guidelines); and

WHEREAS, pursuant to CEQA, the City is the lead agency for the Project. The City

subsequently contracted for the independent preparation of environmental review for the Project, including all necessary technical studies and reports; and

WHEREAS, in September 2020 the City completed an Initial Study in accordance with

CEQA to determine whether the Project may have a significant effect on the environment. The Initial Study, which reflects the independent judgment of the City, concluded that the Project will not have a significant effect on the environment with the incorporation of mitigation measures. The City has therefore prepared a Mitigated Negative Declaration (MND) to be considered by the Planning Commission and City Council. Pursuant to Section 15072 of the CEQA Guidelines, the Project site is not on any of the lists enumerated under Government Code Section 65962.5; and

WHEREAS, the MND identifies that the proposed project would result in no impact or

less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources,

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and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND; and

WHEREAS, early in the Project review process, and pursuant to Senate Bill 18 and Assembly Bill 52 (Required Consultation with Native Americans), staff sent early Project consultation letters to ten Native American tribes on January 13, 2020. Staff received one response from the Gabrieleno Band of Mission Indians-Kizh Nation, and conducted a consultation meeting with Kizh Nation on February 3, 2020. A representative of Kizh Nation stated there is not a need for mitigation. Consultation with Kizh nation was concluded on April 13, 2020 via email; and

WHEREAS, a Notice of Intent to adopt the MND was published in the San Gabriel Valley

Examiner on September 3, 2020, and the MND was released for a 20-day public comment period beginning on September 3, 2020, and ending on September 23, 2020. No comment letters were received during the MND review period; and




WHEREAS, the City Council, at a regular meeting, considered this Resolution on February 16, 2021, at a duly noticed public hearing, as prescribed by law, at which time the City Staff and interested persons had an opportunity to and did testify either in support or against this matter; and


CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. Environmental Findings. The City Council has independently reviewed

and considered the contents of the Final MND prior to rendering a decision on the Project. The City Council hereby finds that the Final MND reflects the independent judgment of the City. None of the information presented to the Planning Commission or City Council has deprived the public of a meaningful opportunity to comment upon an environmental impact of the Project or a feasible mitigation measure or alternative that COVINA has declined to implement. The City Council further finds that substantial evidence in light of the whole record supports the conclusion, as found in the Final MND that the Project will not result in any significant effect on the environment following the incorporation of mitigation measures. Therefore, the City Council finds that the Project will not have a significant effect on the environment and hereby adopts the MND, and the

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Mitigation Monitoring and Reporting Program for the proposed Project, incorporated herein by this reference, and imposes each mitigation measure as a condition of Project approval.

SECTION 2. Tentative Tract Map. After giving full consideration to all evidence

presented at the public hearing, both oral and documentary, and after being fully informed, the City Council does hereby find and decide, with regards to Tentative Tract Map (TTM) 83203, and pursuant to Covina Municipal Code (CMC) Section 16.08.140 that TTM 83203 should be approved because:

1. The proposed subdivision is consistent with the general plan and any applicable

specific plan for the area. Findings of Facts: The General Plan Land Use Designation for the project site is

"School," and the Zoning Classification is RD-1250. The approval of a General Plan Amendment changing the Land Use Designation from "School" to "High Density Residential" will make the project consistent with the General Plan and allow the residential development on the project site. The proposed 10-unit townhouse project's density is about 13.8 units per acre and is within the density range of the High Density Residential at 15 to 22 units per acre. Section V Programs/Implementation Measure of the General Plan Land Use Element requires the City to administer the programs to ensure land use consistency. Therefore, the proposed subdivision with the approval of the General Plan Amendment will be consistent with the General Plan.

2. The design or improvement of the proposed subdivision is consistent with the general

plan and any applicable specific plan for the area. Findings of Facts: The Land Use Element of the General Plan Policy C2a (8), (9) and

(10) “encourage the construction of owner-occupied housing, medium to high density complexes be developed in appropriately designated areas and replace old, deteriorating structures and whenever possible, encourage lot consolidation for apartment, condominium, and townhouse…" With its design and improvements, the project will redevelop a vacant, deteriorating site and create additional for-sale owner-occupied housing. The project, with its design and improvements, will meet the Land Use Policy 3. Therefore, the project design and its improvements are consistent with the general plan and any applicable specific plan for the area.

3. The subdivision is physically suitable for the type and proposed density of development

proposed by the tentative map. Findings of Facts: The overall project design meets the minimum standards and

complies with the applicable RD Residential Zone Development Standards Section 17.28, Parking Section 17.72 of the Covina Municipal Code and 2009 Design Guidelines with respect to density, yards, setbacks, building height, percentage of landscaping, parking and floor area ratio as illustrated in Table 2 of the staff report.

4. The design of the subdivision and proposed improvements, with the conditions of

approval, are not likely to cause significant environmental damage or substantially and

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avoidably injure fish or wildlife or their habitat. Findings of Facts: In accordance with CEQA, the City of Covina has completed an

Initial Study to determine whether the project may have a significant effect on the environment. The Initial Study, which reflects the City's independent judgment, concludes that the project will not have a significant effect on the environment. Therefore, the City has prepared a Mitigated Negative Declaration (MND). The MND identifies that the proposed project would result in no impact or less than significant impacts in the following environmental impact categories: aesthetics, agricultural and forestry resources, air quality, geology and soils, greenhouse gas emissions, hazards and hazardous materials, hydrology and water quality, land use and planning, mineral resources, population and housing, recreation, transportation and traffic, tribal cultural resources, and utilities and service systems. With the incorporation of mitigation measures identified in the MND, the potentially significant impacts of the proposed project in the following categories would be reduced below a level of significance: biological resources, cultural resources, and noise. No significant and unmitigable impacts have been identified in the MND. Therefore, the subdivision will not be likely to cause significant environmental damage or substantially and avoidably injure fish or wildlife or their habitat.

5. The design of the subdivision and the type of improvements are not likely to cause

serious public health problems.

Findings of Facts: North and east side of the project site are existing multi-family development. West of the project site are existing single-family houses but physically separated by a public street. South of the site is the Covina Valley Unified School District's sport field that may have intensive sport events. Therefore, the subdivision design and the type of improvements are not likely to cause serious public health problems.

6. The design of the subdivision provides for future passive or natural heating and cooling

opportunities in the subdivision to the extent feasible. Findings of Facts: The design of the subdivision and the residential units must have

passive solar cooling and heating for the buildings in compliance with the latest Title 24 of the Uniform Building Code.

7. The design of the subdivision and the type of improvements will not conflict with

easements acquired by the public at large for access through or use of property within the proposed subdivision, or the design of the alternate easements which are substantially equivalent to those previously acquired by the public will not be provided.

Findings of Facts: The subdivision design will not conflict with existing City rights-

of-way or other public access easements. The project will dedicate 3 feet for the public alley toward the north side and 7 feet along W. Puente Street. Public Works staff stated there is no requirement for street widening and physical improvement for the 7-foot dedication along W. Puente street. There are no alternate or potential easements that

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would be affected by the proposed project. 8. The subdivision is consistent with the City's parkland dedication requirements (Quimby

Act). Findings of Facts: The proposed project is subject to Parkland Impact Fee to the City,

pursuant to the City’s Quimby Act Ordinance (CMC Chapter 16.28). 9. The sub divider is able to demonstrate that a sufficient water supply will be available

to serve the subdivision, in accordance with California Government Code Section 66473.7. (Ord. 05-1915 § 1, 2005.)

Findings of Facts: According to the City’s Public Works Department, the City has sufficient capacity to provide water to serve the subdivision without negative impact to other properties in the City, based on Covina’s 2015 Urban Water Management Plan.

SECTION 3. Site Plan Review. After giving full consideration to all evidence presented

at the public hearing, both oral and documentary, and after being fully informed, the City Council does hereby find and decide, with regards to Site Plan Review (SPR) 20-004, pursuant to CMC Section 17.64.070, that SPR 20-004 should be approved because:

1. All provisions of this title are complied with and so arranged that traffic congestion is

avoided, pedestrian and vehicular safety and welfare are protected, with no adverse effect to surrounding properties. In so doing so, use of land and/or buildings are designed in harmony with abutting properties in the same district by considering the following: buildings, structures and improvements, vehicle ingress, egress and internal circulation, setbacks, building height, location of service, walls, and landscape materials. Fact: The project, with the approval of the General Plan Amendment and the Tentative Tract Map, allow the opportunity to redevelop a vacant deteriorated property with new residential development, thus adding new housing units to the City. City staff has reviewed the project design against the applicable RD Residential Zone (Multi-Family) Development Standards Section 17.28, Parking Section 17.72 of the Covina Municipal Code and 2009 Design Guidelines. The project demonstrated compliance with the various codes and standards, as illustrated in Table 2 of the staff report, such as density, setbacks, building height, landscaping, access and circulation, and site improvements. The project, with its improvements, will have no adverse effect to the surrounding properties.

2. The project design conforms to the general plan, the design guidelines, transportation

demand management regulations, and any specific plan or guidelines applicable to the project; Fact: The project demonstrated compliance with the various codes and standards, including Design Guidelines as illustrated in Table 2 of the staff report, such as setbacks, parking, building height, amount of landscaping and site improvements.

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Therefore, the project design with the approval of the General Plan Amendment and the subdivision map, together with the conditions of approval, conform to the general plan, the design guidelines, transportation demand management regulations, and applicable specific plan or guidelines.

3. The project design is harmonious, consistent and complete within itself and functionally and visually compatible with neighboring structures and the area in which it is located; Fact: The project is a 10-unit townhouse development, and the units are similar to existing multi-family units to the north and east sides of the project site. The one- and two-story design of the townhouse provide visual compatibility to the neighboring residential character. Therefore, the project design is harmonious, consistent, and complete within itself and functionally and visually compatible with neighboring structures and the area in which it is located.

4. The development will constitute an adequate environment for the intended use by sustaining the desirability and stability of the neighborhood and community; Fact: The project will provide additional for-sale owner-occupied units to the City. Therefore, the project and the intended use will sustain the desirability and stability of the neighborhood and community.

5. Proposed lighting is so arranged as to reflect lighting away from adjoining properties; Fact: Any exterior lighting on the building must be hooded and erected to reflect away from adjoining properties. A detailed lighting plan is required for compliance with the Zoning Code and Design Guidelines' applicable safety, security, and design-related provisions.

6. Proposed signs will not by size, location, color, or lighting, interfere with traffic or limit visibility; Fact: Any proposed signage is not a part of this review and approval. Any sign requires a separate sign permit application and sign plans that must show compliance with Covina's Sign Ordinance.

7. Utility and street improvements pursuant to CMC 17.64.120 and 17.64.130. Fact: The applicant is required to underground utilities and complies with street improvements required by the Department of Public Works (Engineering, Traffic, and Environmental Services.)

SECTION 4. Record of Proceedings. The documents and materials that constitute the

record of proceedings on which these findings and this Resolution are based are located at the City Clerk’s office or the Community Development Department, Planning Division, located at 125 E. College Street, Covina, CA 91723 or at www.covinaca.gov. The custodian of these records is the

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City Clerk. SECTION 5. City Council Action on Tentative Tract Map (TTM) 83203. Based on

the findings stated above, the City Council of the City of Covina does hereby approve Tentative Tract Map (TTM) 83203, subject to the Conditions of Approval and the Mitigation Measures from the MMRP contained in Exhibit “A”, attached herein and incorporated by this reference as though set forth in full. The Mitigation Measures from the MMRP are hereby adopted as additional Conditions of Approval for this Project.

SECTION 6. City Council Action on Site Plan Review (SPR) 20-004. Based on the

findings stated above, the City Council of the City of Covina does hereby approve Site Plan Review (SPR) 20-004 subject to the Conditions of Approval and the Mitigation Measures from the MMRP contained in Exhibit “A”, attached herein and incorporated by this reference as though set forth in full. The Mitigation Measures from the MMRP are hereby adopted as additional Conditions of Approval for this project.

SECTION 7. This Resolution shall become effective upon adoption. SECTION 8. Certification. The City Clerk shall certify to the passage and adoption of



City of Covina, California BY:


ATTEST: GEORGIANNA NICOLE ALVAREZ Chief Deputy City Clerk

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CERTIFICATION

I, Georgianna Nicole Alvarez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2021-11 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 16th day of February, 2021, by the following vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: Dated:


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EXHIBIT “A” TENTATIVE TRACT MAP (TTM) 83203 AND SPR 20-004 APN: 8444-010-028 (8444-010-900 PREVIOUS NUMBER)

CONDITIONS OF APPROVAL AND MITIGATION MONITORING AND REPORTING PROGRAM

Development Application(s): Resolution CC 2021-11, issuing a Mitigated Negative Declaration, and approving Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004, a residential subdivision for condominium purpose and the development of the property for a 10-unit townhouse project on approximately 0.72 acres of land zoned RD Residential Zone (Multiple-Family), located at 342 South Fourth Avenue.

ALL OF THE FOLLOWING CONDITIONS APPLY TO THE PROJECT APPLICANT SHALL CONTACT THE PLANNING DIVISION AT 626-384-5450, FOR COMPLIANCE WITH THE FOLLOWING CONDITIONS: A. TIME LIMITS:

1. Tentative Tract Map (TTM) 83203 and Site Plan Review (SPR) 20-004: Approval of this TTM and SPR will expire two (2) years from the date of Project approval if the Final Tract Map is not recorded unless otherwise extended pursuant to applicable laws. The Applicant may apply to extend the expiration date for a maximum period of six (6) years. Each extension shall not exceed one (2) year upon written request to the Director of Community Development a minimum of thirty (30) days prior to expiration. The request must be approved by the Planning Commission prior to expiration of the TTM and SPR under applicable laws.

2. Tentative Tract Map 83202 and Site Plan Review 20-004 shall not take effect unless and until the City Council approves General Plan Amendment (GPA) 19-002.

B. GENERAL REQUIREMENTS:

1. This approval will not be effective for any purposes until the Applicant has filed with

the Planning Division an affidavit stating that it is aware of and agrees to accept all of the conditions of this approval as set forth herein, within ten (10) calendar days from the date of approval.

2. Install a plaque on a decorative pedestal within the West Puente Street frontage. The plaque shall contain a story board on the site’s historic ties to Covina Union High School. The placement, the final design and material of the historic plaque shall be submitted for Director of Community Development review and approval, prior to

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issuance of building permit. (ADDED by Planning Commission on January 12, 2021 public hearing)

3. All conditions of approval and the environmental Mitigation Monitoring and

Reporting Program (“MMRP”) contained in City Council Resolution CC 2021-11 shall apply to the Project.

4. Copies of the signed City Council Resolution CC 2021-11 and MMRP shall be included on the plans (full size) for submittal of plan check. The full size sheet(s) are for information only to all parties involved in the construction/grading activities and are not required to be wet sealed/stamped by a licensed Engineer/Architect.

5. The Applicant shall pay any applicable Fish and Game fees as shown below. All checks

are to be made payable to Los Angeles County Clerk. a) Notice of Determination Processing fee of $75; and b) MND fee of $2,555.25.

5. To the fullest extent permitted by law, the Applicant agrees to and shall fully

indemnify, hold harmless, and defend, the City and its respective elected and appointed officials, officers, members, agents, employees, and representatives (each an “Agent” and collectively “Agents”) from any and all claims, suits, causes of action, fines, penalties, proceedings, damages, injuries or losses of any name, kind or description, specifically including attorneys’ fees (collectively, “Claim(s)”), arising in any way out of or challenging the validity of Project, the MND, or the CEQA Determination. The Applicant’s indemnification obligation shall include, but not be limited to, actions to attack, set aside, void, or annul any approval, should it occur, related to the Project, the MND, or the CEQA Determination, including actions invoking Planning and Zoning Law or CEQA. The Applicant shall reimburse the City for any court costs and attorneys’ fees that the City may be required by a court to pay as a result of such Claim(s). The City may, at its sole and absolute discretion, participate in the defense of any such Claim(s) undertaken by the Applicant, or (b) retain separate counsel whose attorneys’ fees and costs shall be paid by the Applicant. Such participation in the defense of such Claim(s) or the retention of separate counsel by the City shall not relieve the Applicant of its obligations under these indemnity related Conditions of Approval.

6. The City shall promptly provide written notice to the Applicant of any Claim(s). The

City shall take all necessary and reasonable steps to provide such notice to the Applicant in a timely fashion and in a manner that will not result in any substantial prejudice to the Applicant’s ability to defend the relevant Claim(s). Such notice shall contain a copy of any relevant pleadings filed in connection with the relevant Claim(s). The City and the Applicant shall coordinate and cooperate in their defense activities, whether the City is participating in defense undertaken by the Applicant or is retaining separate counsel. As used in this Condition, cooperation does not include the City having to take any action or make any decision that the City does not believe, in the exercise of its good faith judgment, is in its own best interest. Unless expressly

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provided to the contrary, nothing in this Condition shall be construed in a manner that requires the City to exercise its discretion in a particular manner.

7. The Applicant may not resolve such Claim(s) without the City’s prior written consent.

In all events, the City shall have the right to resolve any such Claim(s) in any manner, in its discretion, provided, however, the Applicant’s consent shall be required (and may be granted or withheld in the Applicant’s discretion) if the resolution of the Claim(s) shall require a payment by the Applicant or limit the Applicant’s rights under the Project. The Applicant’s obligation to pay the cost of any such Claim(s), including judgment, post-judgment motions, and any and all appeals, shall extend until any Claim is completely concluded, judgment is entered and completely satisfied.

8. Within twenty (20) days after notification by the City of the receipt of any Claim(s),

the Applicant shall deposit with the City cash or other security in the amount of fifty thousand dollars ($50,000), satisfactory in form to the City Attorney, guaranteeing indemnification or reimbursement to the City of all costs and fees related to any action triggering these indemnity Conditions of Approval. If the City is required to draw on that cash or security to indemnify or reimburse itself for such costs or fees, the Applicant shall restore the deposit to its original amount within fifteen (15) calendar days after notice from the City that replenishment is required. Additionally, if at any time the City Attorney determines that an additional deposit or additional security in an amount not to exceed an additional fifty thousand dollars ($50,000) is necessary to secure the obligations of these indemnity related Conditions of Approval. The Applicant shall provide such additional payment or security within fifteen (15) calendar days of notice from the City Attorney.

9. The Applicant shall indemnify, defend, save and hold the City and its Agents, harmless

from any and all claims, damages of any kind and litigation that may arise from the Applicant’s or the Applicant’s agents, contractors, subcontractors, agents, or employees’, whether such operations be by the Applicant or by any of the Applicant’s agents, contractors or subcontractors or by any one or more persons directly or indirectly employed by or acting as agent for the Applicant or any of the Applicant’s agents, contractors or subcontractors.

10. All indemnity provisions, as set forth above, shall survive termination of the Project

and shall continue to be the liability and obligation of the Applicant, binding upon the Applicant, until the final resolution of all Claims, and shall survive the completion, partial completion, or abandonment of the Project.

11. The Applicant shall reimburse the City for all fees and costs for special review of these

applications by both (i) the City’s retained planning, engineering, and related consultants and (ii) the Covina City Attorney’s Office through an executed Reimbursement Agreement. Such special review includes, but is not limited to, review of the Project’s compliance with Conditions of Approval, plan check process, review of CC&Rs, etc.

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12. Mitigation measures are required for the Project. The Applicant is responsible for the cost of implementing said measures, including monitoring and reporting. The Applicant shall be required to post cash, letter of credit or other form(s) of guarantee acceptable to the Director of Community Development, prior to issuance of building permits, in the event and to the extent necessary to guarantee satisfactory performance and completion of all mitigation measures. These funds may be used by the City to retain consultants and/or pay City staff time to monitor and report on the mitigation measures. Failure to complete all actions required by the MMRP shall be considered grounds to delay issuance of building permits until such time as completion of the required actions has occurred.

13. The Project site and all improvements thereon, including landscaping, must be

maintained in a sound, healthy, and attractive condition reasonably free of weeds, visible deterioration, graffiti, debris and/or other conditions that violate the Covina Municipal Code (CMC).

14. The costs and expenses of any code enforcement activities, including, but not limited

to, attorneys' fees, caused by the Applicant's violation of any condition or mitigation measure imposed hereunder or any provision of the CMC must be paid by the Applicant.

15. Approval of the TTM and SPR shall not waive the Applicant’s obligation for

compliance with all other applicable sections of the CMC, the Covina Design Guidelines, and all other applicable plans and non-City laws.

16. The existing plaque within West Puente street frontage and generally at the corner of

West Puente and South Fourth Avenue shall be maintained in place. Add a plaque to commensurate the site is near the original location of the Covina Union High School and was used as a “business office” for the Covina Union High School District in 1960. The final placement and design of the plaque shall be submitted for the Director of Community Development review and approval, prior to issuance of building permits.

C. TENTATIVE TRACT MAP (TTM) 83203

1. The Project is required to annex into Community Facilities District 2007-01 (the "CFD") for the purpose of financing the Project's proportionate share of the cost for police response, fire and emergency medical response, and park services. The Applicant shall petition the City to annex to the City’s existing CFD under the California Mello-Roos Community Facilities Act (Gov. Code, § 53311 et seq.) (the “Act"). The Applicant agrees to cooperate and not to oppose annexation to the CFD for purposes set forth above. This annexation shall be completed prior to issuance of building permits for the production units

Alternatively, at the Applicant's option, in lieu of annexation to the CFD as set forth above, the Applicant may make a lump sum payment to the City (“In Lieu Payment") representing the Project's proportionate share of the cost for police response, fire and emergency medical response, and park services. The In Lieu Payment shall be

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calculated based upon the net present value of the special tax that would be levied upon the Project under the CFD over the term of the CFD special tax. The In Lieu Payment must be paid not later than prior to release of occupancy for the first lot/dwelling unit including the model homes, within the Project.

2. The Project shall be annexed into the existing Landscape District and Lighting District,

which shall be completed prior to recordation of the Final Tract Map. 3. The Project shall be subject to Park (Quimby) Impact fees to the City for public

parkland in accordance with CMC Chapter 16.28 (Park Dedication and In-Lieu Fee Regulations). The City’s parkland dedication requirement is three (3) acres of property for every 1,000 persons residing within the City to be devoted to local park and recreational purposes. Using the City’s dwelling unit occupancy factor of 3.02 persons per household for owner-occupied dwelling units, the proposed 10-unit subdivision will generate a population of persons, requiring a parkland dedication of 0.09 acres (10 x 3.02 x .003); or, payment of an in-lieu fee of $54,000.00 (0.09 acres x $610,000.00)

6. Residential Development Impact Fees for the Project shall be paid, prior to release of

occupancy for each dwelling unit. The Applicant shall contact the Director of Community Development, or his/her designee, for calculation of the Residential Development Impact Fees prior to issuance of any permits for the Project.

7. Street names for the private drive aisle and display of building addresses for the Project shall be submitted to the Community Development Department for review and approval prior to recordation of the Final Tract Map. The installation of private street name signs and display of building address shall comply with City’s design standards.

8. Competitive access for communications providers shall be provided.

D. SITE DEVELOPMENT

1. The Project site shall be developed and maintained in accordance with the approved

plans on file with the Community Development Department, all representations of record made by the Applicant, the Conditions contained herein, the applicable provisions of the CMC and the applicable provisions of the Covina Design Guidelines.

2. Final plans incorporating all Conditions of Approval shall be submitted to the Director

of Community Development, or his/her designee, for review and approval prior to issuance of grading permits.

3. Any changes to the approved plans shall be submitted to the Director of Community

Development, or his/her designee, for review and approval prior to making changes to the plans.

4. Graffiti on the Project site shall be removed within seventy-two (72) hours.

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5. A complete building materials illustration board, describing material, brands, types, and applicable reference numbers shall be submitted to the Planning Division of the Community Development Department. Minor modifications in elevation details and/or colors may be submitted with detailed drawings and/or information to the Director of Community Development, or his/her designee, for review and approval prior to or during the subsequent Plan Check process.

6. All site, precise grading landscape, and irrigation, and street improvement-plans shall

be coordinated for consistency, prior to issuance of any building permits for production units.

7. All ground mounted utility appurtenances such as transformers, AC condensers, etc.

shall be adequately screened using a combination of concrete or masonry walls, and or landscaping to the reasonable satisfaction of the Director of Community Development, or his/her designee.

8. The Applicant shall contact the U.S. Postal Service to determine the appropriate type

and location of mailboxes. The final placement of the mailboxes shall be submitted to the Director of Community Development, or his/her designee, for review and approval prior to issuance of Certificates of Occupancy for the production units.

9. During construction and following Project completion, all grading and all exterior

drainage on the Project site shall conform to all applicable requirements of the Public Works Department.

10. The Applicant shall prepare and record CC&Rs for the Project. The CC&Rs shall

establish a Homeowner’s Association (HOA) and/or Property Owner’s Association (POA) for the Project and shall be submitted to the Directors of Public Works and Community Development, or their designees, and the City Attorney for review and approval of the provisions required by these Conditions to be included therein for the City’s benefit. The Applicant shall reimburse the City for all fees and costs associated with the review of the Project-related CC&Rs by the City Attorney’s Office. The CC&Rs shall be recorded with the Final Tract Map, prior to the issuance of building permits for any production units. The CC&Rs shall grant the City the right, but not the obligation, to enforce their terms as these relate to the provisions required by these Conditions to be included therein for the City’s benefit. The CC&Rs shall include provisions: (i) prohibiting the storage of recreational vehicles and watercrafts in all parking areas; (ii) requiring residents and/or homeowners to park their personal vehicles in the garage; and (iii) requiring that the property management company for the HOA and/or POA to enforce the provisions of the CC&Rs that are included therein for the City’s benefit. The HOA and/or POA shall submit a list of names and addresses of its officers to the Planning Division of the Community Development Department on or before January 1 of each and every year and whenever said information changes.

11. Prior to issuance of a certificate of occupancy for the final production unit, any

temporary sales and/or construction office buildings/trailers shall be removed from the Project site.

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12. Any proposed model home complex or sales trailer for the Project shall be subject to

the Administrative Conditional Use Permit Process set forth in CMC Section 17.62.190. The application for the model home complex or sale trailer shall address the concerns of street improvements, temporary and overflow parking, separation from construction activities, security fencing, signage, temporary and/or permanent landscaping.

13. The Applicant shall submit a Phasing Plan illustrating the anticipated number and

sequence of each development phase. 14. A complete exterior lighting plan, including photometric printout, shall be submitted

for review and approval, prior to issuance of building permits for any production units. The plan shall illustrate light fixture features, locations, height, and the compliance with applicable City Code provisions on illumination, design, and lighting orientation/glare prevention and the minimum one-foot candle standard where applicable.

15. All building and site improvements along with landscaping and irrigation must be

installed in accordance with approved plans and information on file with the Planning, Building, and Engineering Divisions, and the irrigation systems must be fully operational upon issuance of Certificates of Occupancy for production units. Furthermore, during construction, all on-site landscaped areas must be maintained reasonably free of weeds and debris.

16. The Project site must be clean and reasonably free of trash and construction debris, and

all construction equipment must be removed from the Project site prior to issuance of the last Certificate of Occupancy for the production units.

17. Grading

a. Grading of the Project site shall be in accordance with the most recent edition of the adopted California Building Code, City Grading Standards, and accepted grading practices, as adopted by the City. The Rough Grading Plan and Precise Grading and Drainage Plan(s) shall be in substantial conformance with the approved conceptual grading and drainage plan.

b. A soils report shall be prepared by a qualified engineer licensed by the State of California to perform such work. Two copies will be provided at grading and drainage plan submittal for review. Plans shall implement design recommendations per said report.

c. A geologic report shall be prepared by a qualified engineer or engineering geologist and submitted at the time of application for Grading and Drainage Plan review.

d. The Precise Grading and Drainage Plan, appropriate certifications and compaction reports shall be completed, submitted, and approved by the Building and Safety Official prior to the issuance of Building Permits.

e. This Project shall comply with the applicable accessibility requirements of the most recent edition of the California Building Code adopted by the City.

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E. LANDSCAPING AND WATER EFFICIENT REQUIREMENTS

1. All landscape or planter areas shown on the approved landscape plan shall be constructed such that they can remain landscaped in perpetuity. These areas shall not be paved or used for storage or any similar purpose inconsistent with the intent of this approval, and the Project’s CC&Rs shall reflect this condition.

2. Detailed on-site and off-site landscape and irrigation plans shall be submitted to the

Director of Community Development or his/her designee for review and approval, prior to issuance of building permits. The landscape and planter areas shall conform to applicable standards and requirements of the City’s Water Efficient Landscape Regulations and the July 2015 Updated Model State Water Efficient Landscape Ordinance of the State of California Water Commission.

3. The final design of the perimeter landscaping along West Puente Street and South

Fourth Avenue street frontages, including walls, landscaping and sidewalks, shall be included in the required detailed landscape and irrigation plans and shall be submitted to the Director of Community Development (or his/her designee) and the City Engineer for review and approval, and coordinated for consistency with the any parkway landscaping plan.

4. Landscaping and irrigation systems shall be required to be installed within the public-

right-way on the perimeter of the Project, which requires the removal of sidewalk and replacement with parkway and sidewalk, to the satisfaction of the City Engineer. The installed landscaping and irrigation systems shall be continuously maintained by the Applicant for the duration of the Project construction.

5. Final design of the recreation facilities including, but not limited to, the recreation

building, kiosk for US Mail Boxes, any other accessory structures, landscaping, hardscape, walls and fencing, wall mounted and ground mounted lighting fixtures, etc., shall be submitted to the Director of Community Development for review and approval prior to issuance of the first building permit for the production units.

6. Any proposed fence or wall shall be of decorative materials such as wrought iron, split

face block, or bricks. Final design of fences and walls along the Project site boundary and ground level patio area shall be submitted to the Director of Community Development for review and approval prior to issuance of any building permits for production units.

7. Street trees shall be provided within the parkway strip along West Puente Street and

South Fourth Avenue street frontages at approximately twenty (20) feet on center and with a minimum of 24-inch box size trees, and subject to the Director of Community Development’s and City Engineer’s review and approval.

F. CONSTRUCTION MITIGATION AND MANAGEMENT PLAN

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1. All construction must comply with the below-noted construction mitigation plan and the City Noise Ordinance.

2. The Applicant shall prepare a construction mitigation and management plan to mitigate

noise as well as other construction-related impacts. The construction-related activities shall conform to the following requirements that address potential noise and other construction-related impacts:

a. The construction mitigation plan shall address the following areas: 1) site

supervision, 2) construction access and schedule, 3) delivery/haul route and traffic control, 4) material storage and staging, 5) construction parking, 6) work hours, 7) noise reduction, 8) erosion control, 9) dust and mud control, 10) debris cleanup, 11) street sweeping, 12) pedestrian and neighborhood safety, 13) Project contact-related signage, and 14) subcontractor education and security measures.

b. Provide contact information for Qualified Storm Water Practitioner (QSP) and Qualified Storm Water Developer (QSD).

c. Construction-related activities, including grading activities, shall be prohibited between 6:00 pm and 7:00 am on Monday through Friday, and between 5:00 pm and 8:00 am on Saturday, and all day on Sundays and Holidays (except by special permit).

d. All construction equipment shall be in proper operating condition and shall be fitted with standard factory noise attenuation features. All equipment shall further be properly maintained to help assure that no additional significant noise, due to worn or improperly maintained parts, would be generated.

e. The Applicant and/or his/her representative(s) shall frequently monitor for and, if detected, remove any and all graffiti on and/or repair damaged or vandalized construction-related fencing and/or related elements as quickly as feasible.

f. Loud noise generating activities such as crushing concrete pavement will be restricted to 7:00 am – 6:00 pm on Monday through Friday. Signs (multiple) shall be posted on site stating the days and hours of construction allowed, prohibiting “drinking, loitering and music” at all times, and including phone listings for community concerns.

g. View-obscuring construction fencing shall be provided around the entire Project site. Construction entries shall have gates with view-obscuring material.

h. Comply with SWPPP. Provide contact information for Qualified Storm Water Practitioner (QSP) and Qualified Storm Water Developer (QSD).

3. At least thirty (30) days prior to the commencement of any Project-related grading, the

Applicant and/or his/her representative(s) shall notify the occupants of all residential and institutional properties that lie within five hundred (500) feet of the Project site of the general parameters of the impending grading and construction activities.

4. The approved construction mitigation and management plan shall be distributed to all

contractors and subcontractors, and shall be maintained on-site through the duration of construction.

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APPLICANT SHALL CONTACT THE BUILDING & SAFETY DIVISION AT 626-384-5460, FOR COMPLIANCE WITH THE FOLLOWING CONDITIONS: G. BUILDING AND SAFETY DIVISION

1. Submit 8 sets of complete plans including any proposed utilities and earthwork/grading. The Project must comply with the 2019 edition of the California Building Standards and 2019 edition of the Energy Code as adopted by the City.

2. Two sets each of any structural and energy calculations shall be submitted with the

above mentioned plans. All calculations must bear an original signature from the documented author.

3. This Project must comply with applicable federal and state accessibility requirements

to and throughout the buildings. Include compliance methods and structural details on the plans.

4. Demolition activities require an asbestos containing materials (ACM) survey.

(SCAQMD RULE 1403). The ACM report shall be prepared by an accredited testing laboratory in accordance with applicable South Coast Air Quality Management District (SCAQMD) rules and regulations. Proof of notification to the SCAQMD, Office of Operations, shall be submitted to the Building and Safety Division of the Community Development Department with the relevant permit application for all demolition activities. Contact SCAQMD at the following address or number for more information: SCAQMD Headquarters, 21865 Copley Drive, Diamond Bar, CA, (909) 396-2381. Once any demolition activity has adhered to the applicable notification requirements of the SCAQMD, a formal demolition plan and permit must be obtained from the Building and Safety Division.

5. The Applicant shall pay the applicable SB 50 development impact fees to the School

District prior to issuance of the first building permit for production units. 6. Construction activity within five hundred (500) feet of a residential zone is prohibited

between the hours of 6:00 pm and 7:00 am on Monday through Friday, between the hours of 5:00 pm and 8:00 am on Saturday, and all day on Sunday and Holidays, unless otherwise permitted.

APPLICANT SHALL CONTACT THE PUBLIC WORKS DEPARTMENT AT 626-384-5490, FOR COMPLIANCE WITH THE FOLLOWING CONDITIONS: H. PUBLIC WORKS - ENGINEERING DIVISION

1. Prior to issuance of any permits, the applicant shall submit a Precise Grading Plans for the project showing building footprints, pad elevations, finished grades, driveways, walkways, parking areas, drainage routes, retaining walls, erosion control measures, and other pertinent information in accordance with Appendix J of the California Building Code, latest edition for review and approval of the City Engineer.

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2. The applicant shall submit a Soils and Geologic Report to the satisfaction of the City

Engineer. 3. Prior to the issuance of a Grading Permit, the applicant shall submit a temporary erosion

control plan to the satisfaction of the City Engineer. The erosion control shall be installed and operable at all times.

4. Improvement Plans and Construction:

a. The applicant shall reconstruct the existing pavement, curb and gutter, and sidewalk

on Puente Street and Fourth Avenue within the limits of the development to the satisfaction of the City Engineer. The minimum pavement section shall be 4” AC over 6” AB.

b. The applicant shall obtain a public works permit for all work in or adjacent to the public right-of-way (ROW). All work within the public ROW shall be in accordance with applicable standards of the City of Covina, i.e. Standard Specifications for Public Works Construction (Green Book), and the Work Area Traffic Control Handbook (WATCH), and further that construction equipment ingress and egress be controlled by a plan approved by the City Engineer.

c. Due to construction, the Applicant shall be responsible for any repairs within the limits of the Project Site development, including streets and paving, curbs and gutters, sidewalks, and street lights, as determined by the City Engineer.

d. The applicant shall reconstruct and widen the pavement section on the south half of the alley to the satisfaction of the City Engineer. The minimum pavement section shall be 4” AC over 4” AB.

5. The applicant shall dedicate an additional three and one-half (3 1/2) feet along the south

side of the public alley for alley widening purposes. 6. The Applicant shall provide drainage improvements to carry runoff of storm water in

the area proposed to be developed, and for contributing drainage from adjoining properties to the reasonable satisfaction of the City Engineer and in accordance with all applicable federal, state and local laws and regulations and City’s Subdivision Ordinance (CMC Chapter 16). The proposed drainage improvements shall be based on a detailed hydrology study conforming to the current Los Angeles County Methodology. The proposed on-site storm drain improvements shall be privately maintained by each property owner.

7. The Applicant shall install sewer improvements for the proposed Project in accordance

with City Standards and to the satisfaction of the City Engineer. 8. Prior to issuance of any building permits, the Applicant shall verify that any required

sewer connection fees have been paid to the City of Covina and the County of Los Angeles Department of Public Works, Sewer Maintenance District.

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9. Prior to issuance of any building permits, the Applicant shall verify that the proposed Project has been annexed into the Los Angeles County Sanitation District.

10. The Applicant shall install water improvements for the proposed Project in accordance

with City Standards and to the satisfaction of the City Engineer and the Water Department.

11. The Applicant shall obtain a Demolition Permit from the Building and Safety

Department prior to removing any existing structure on the property. 12. The applicant shall install fire water improvements for the proposed project in

accordance with City and Fire Department standards and to the satisfaction of the City Engineer and the Water Department.

I. PUBLIC WORKS – ENVIRONMENTAL SERVICES DIVISION

1. Townhouse Residential Refuse Collection – Submit a detailed design for placement of the trash and recycling barrels for each townhouse unit, and the travel route of the collection truck to minimize the need for traveling in reverse.

2. Mixed-Use Building Residential and Retail Trash Enclosures – Submit a detailed

design of the trash enclosure areas that include, but are not limited to, the interior dimensions, the number of trash bins that can be accommodated within the trash enclosure areas and the travel route of how a collection truck will be able to service all the trash bins located within the enclosures. The detailed design shall be submitted to the Directors of Public Works and Community Development for review and approval prior to issuance of building permits.

3. LID – Project qualifies as a Low Impact Development, and must incorporate storm

water capture. LID Plan approval is required before issuance of grading permits. 4. SWPPP – Project disturbs at least 1 acre, and requires a Storm Water Pollution

Prevention Plan (SWPPP). SWPPP must be reviewed and approved by the City prior to posting on SMARTS.

5. C&D – Seventy-five percent (75%) of construction and demolition debris must be

recycled, per City Ordinance No. 18-03. Forms and a security deposit will be required.

APPLICANT SHALL CONTACT THE POLICE DEPARTMENT AT 626-384-5623, FOR COMPLIANCE WITH THE FOLLOWING CONDITIONS: J. POLICE DEPARTMENT

1. Parking lot light fixtures and wall mounted light fixtures shall be of LED. Detailed plans to show compliance shall be submitted to Police Department and the Planning Division for review and approval prior to issuance of permit and prior to installation.

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This Condition of Approval shall be accomplished on or before issuance of building permits.

2. Wayfinding signage shall be provided and submitted to Police Department and the

Planning Division for review and approval. Wayfinding signage shall have lighting as well. This Condition of Approval shall be accomplished on or before issuance of building permits.

3. Signage stating Vehicle Code is enforceable must be posted at all entrances so that

guests/visitors are aware of what will be enforced on the property. Police Department to review signage. This Condition of Approval shall be accomplished prior to issuance of building permit.

4. All landscaping should follow the two (2) foot (6) six foot rule. All landscaping should

be ground cover, two feet or less and lower tree canopies should be at six (6) feet. This increases natural surveillance and eliminates hiding areas within landscaping. Tree canopies should not interfere with or block the lighting along sidewalks or parking lots. This creates shadows and areas of concealment. Planters will use plant species with limited growth. This is to insure that maintenance does not become an issue and surveillance from the building is maintained.

K. LOS ANGELES COUNTY FIRE DEPARTMENT – FIRE PREVENTION DIVISION

1. Final Map requirements. The Project was cleared for public hearing by Los Angeles County Fire Department with conditions. The Applicant must comply with all Conditions of Approval set forth in the December 30, 2020 letter from the Los Angeles County Fire Department, Land Development Unit.

APPLICANT SHALL CONTACT THE PLANNING DIVISION AT 626-384-5450, FOR COMPLIANCE WITH THE MMRP: L. MITIGATION MONITORING AND REPORTING PROGRAM (MMRP) FOR MND California Public Resources Code Section 21081.6, requires that a lead or responsible agency adopt a Mitigation Monitoring and Reporting Plan (MMRP) when approving or carrying out a project when an MND identifies measures to reduce potential adverse environmental impacts. As lead agency for the Project, the City is responsible for adoption and implementation of the MMRP prepared and adopted for the Project. The MMRP is attached and will be in place and effective throughout all phases of the Project. The City will be responsible for administering the MMRP and ensuring that all parties comply with its provisions. The City may delegate monitoring activities to staff, consultants, or contractors. The City will also ensure that monitoring is documented through periodic reports and that deficiencies are promptly corrected. The designated environmental monitor will track and document compliance.

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Table 6-1. Mitigation Monitoring and Reporting Program

Mitigation Monitoring and Reporting Program

Mitigation Measure

Mitigation Monitoring Verification of Compliance

Implementing Period

Implementing Party

Enforcing Agency

Comments Date

Initials

Biological Resources

MM-BIO-1: Initiation of construction activities (i.e., initial vegetation clearing) should avoid the migratory bird nesting season (February 15 through August 31), to reduce any potential significant impact to birds that may be nesting on the project site. If construction activities must be initiated during the migratory bird-nesting season, an avian nesting survey must be conducted for protected migratory birds, raptors, and active nests. A qualified biologist shall survey the construction zone and a 250-foot radius surrounding the construction zone in areas that are accessible visually. The avian nesting survey shall be performed by a qualified wildlife biologist within 72 hours prior to the start of construction in accordance with the Migratory Bird Treaty Act and California Fish and Game Code.

If an active bird nest is found, the nest shall be flagged and mapped on the construction plans along with an appropriate no disturbance buffer, which will be determined by the biologist based on the species’ sensitivity to disturbance (typically 50 feet for common, urban-adapted species, 300 feet for other passerine species, and 500 feet for raptors and special-status species). The nest area shall be avoided until the nest is

Prior to construction; during construction (if active nests are identified)

Contractor/ builder; qualified biologist

City of Covina Planning Division

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Implementing Period

Implementing Party

Enforcing Agency

Comments Date

Initials

vacated and the juveniles have fledged. The nest area shall be demarcated in the field with flagging and stakes or construction fencing. A qualified biologist (with the ability to stop work) shall serve as a construction monitor during those periods when construction activities will occur near active nest areas to ensure that no inadvertent impacts on these nests occur.

Cultural Resources

MM-CUL-1: In the event that archaeological resources (sites, features, or artifacts) are unearthed during ground-disturbing activities associated with the proposed project, the contractor shall cease all earth-disturbing activities within 100 feet of the discovery and shall retain a qualified archaeologist meeting the Secretary of the Interior’s Professional Qualification Standards. The archaeologist shall evaluate the significance of the find and determine whether or not additional study is warranted. Construction activities may continue in other areas. Depending upon the significance of the find under the California Environmental Quality Act (CEQA) (14 CCR 15064.5(f); California PRC Section 21082), the archaeologist may simply record the find and allow work to continue. If the discovery proves significant under CEQA, additional work, such as preparation of an archaeological treatment plan, testing, data recovery, and/or monitoring may be warranted.

Ground-disturbing construction activities

Contractor/ builder; qualified archaeologist


MM-CUL-2: In accordance with Section 7050.5 of the California Health and Safety Code, if human remains are found, the County Coroner shall be immediately notified of the discovery and a qualified archaeologist will be contacted. No further excavation or

Construction

Contractor/ builder; qualified archaeologist;


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Implementing Period

Implementing Party

Enforcing Agency

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disturbance of the site or any nearby area reasonably suspected to overlie adjacent remains shall occur until the County Coroner has determined, within two working days of notification of the discovery, the appropriate treatment and disposition of the human remains. If the County Coroner determines that the remains are, or are believed to be, Native American, he or she shall notify the Native American Heritage Commission (NAHC) in Sacramento within 24 hours. In accordance with California Public Resources Code, Section 5097.98, the NAHC must immediately notify those persons it believes to be the most likely descendent from the deceased Native American. The most likely descendent shall complete their inspection within 48 hours of being granted access to the site. The most likely descendent would then determine, in consultation with the property owner, the disposition of the human remains. Upon discovery, a qualified archaeologist will be retained to ensure proper implementation of the treatment agreed upon by the most likely descendant and property owner.

County Coroner

Geology and Soils

MM-GEO-1: In the event that paleontological resources (e.g., fossils) are unearthed during grading, a qualified paleontologist shall be retained by the contractor and construction shall be temporarily halted and/or diverted to allow recovery of paleontological resources. The area of discovery will be roped off with a 50-foot radius buffer. Once documentation and collection of the find is completed, the paleontologist will remove the rope and allow grading to recommence in the area of the find.

Grading phase of construction

Contractor/ builder; qualified paleontologist


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Noise

MM-NOI-1: Construction activities shall take place during the permitted times and days per Chapter 9.40.110 of the City’s Municipal Code. The applicant shall ensure that construction activities are limited to the hours of 7:00 a.m. to 8:00 p.m. Monday through Saturday and shall not occur during other hours or on Sundays or public holidays. This condition shall be listed on the project’s final design to the satisfaction of the City EngineerinDepartment.

Construction

Project applicant; contractor/ builder


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Implementing Period

Implementing Party

Enforcing Agency

Comments Date

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MM-NOI-2: The City of Covina shall require the applicant to adhere to the following measures as a condition of approving the grading permit:

The project contractor shall, to the extent feasible, schedule construction activities to avoid the simultaneous operation of construction equipment so as to minimize noise levels resulting from operating several pieces of high noise level emitting equipment.

All construction equipment, fixed or mobile, shall be equipped with properly operating and maintained mufflers. Enforcement shall be accomplished by random field inspections by applicant personnel during construction activities, to the satisfaction of the City Engineering Department.

Construction noise reduction methods such as shutting off idling equipment, construction of a temporary noise barrier, maximizing the distance between construction equipment staging areas and adjacent residences, and use of electric air compressors and similar power tools, rather than diesel equipment, shall be used where feasible.

During construction, stationary construction equipment shall be placed such that emitted noise is directed away from or

Construction

Project applicant; contractor/ builder


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shielded from sensitive receptors.

Construction hours, allowable workdays, and the phone number of the job superintendent shall be clearly posted at all construction entrances to allow surrounding property owners to contact the job superintendent if necessary. In the event the City receives a complaint, appropriate corrective actions shall be implemented and a report of the action provided to the reporting party.

MM-NOI-3: An interior noise analysis shall be conducted by the project applicant for the proposed dwelling units along Puente Street prior to issuance of building permits. Installation of mechanical ventilation systems or air conditioning systems and sound-rated windows shall be required if the interior noise analysis shows that impacts are above the state and City’s 45 dBA Ldn interior standard. The interior noise analysis shall substantiate that the resulting interior noise levels will be less than the noise standard.

Prior to the issuance of building permits

Project applicant


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ITEM NO. PH 4

Meeting: CC Regular Meeting - Feb 16 2021 Title: Public Hearing for Consideration of Adopting Resolution CC 2021-14 Amending Existing

Water Rates Presented By: Andy Bullington, Director of Public Works Recommendation: 1. That the City Council conduct the Public Hearing and if it is determined that a majority

protest does not exist adopt Resolution CC 2021-14 establishing a new five-year schedule of water rates within the areas serviced by the City’s Water Division to address

wholesale water cost increases and future water system capital improvement needs; and 2. Close Public Hearing and adopt new five-year schedule of water rates within the areas serviced by the City’s Water Division.

EXECUTIVE SUMMARY: At the December 1, 2020 City Council meeting, the City Council authorized staff to proceed with noticing all existing City water customers and provide public outreach materials related to the required Proposition 218 process (Attachment F). Notices were mailed to all water customers on December 21, 2020 and staff subsequently conducted a virtual ZOOM meeting on January 5, 2021 at 5:30 p.m. The additional presentation of the water rate study and proposed rate increase was intended to systematically walk through the methodology and reasoning for the proposed request in water rate increases and provide the City’s water customers an

opportunity to ask questions and provide feedback prior to the schedule hearing. BACKGROUND: Prior Water Rate History At the June 15, 2010 City Council meeting, the City Council adopted Resolution No. 10-6847 which established a five-year schedule of water rates within the areas serviced by the City’s Water Division. The fees,

as established, became effective July 1, 2010 and increased each year until the five-year rate schedule ended on June 30, 2015. Since July 2015, there has not been a water rate increase and there has not been an update to the Water Master Plan or an evaluation of water rates until recently to ensure the charges to our customers are sufficient to provide adequate financial stability for the City's water system. During the span of time since the last rate increase, several factors have incrementally increased the cost to provide service including, but not limited to, the rising cost of imported water, the escalating cost of replacing aging infrastructure and increased regulatory and operational demands. As such, the current rate structure is insufficient to effectively and prudently operate the system in 2021 and beyond. Without revenue adjustments or expenditure decreases, the City’s water utility will struggle to meet its debt coverage and potentially result in

technical default in FY 2022 as depicted in the Revenue Adjustments and Debt Coverage Comparative Charts (Attachment A). Based on the analysis contained in the report, the data supports and recommends a rate increase of 4% annually for a 5-year period starting February 21, 2021 with the final increase taking effect on January 1, 2025, refinancing existing bonds, and the issuance of $5.5 million in additional bonds in FY 2022. Staff presented this information to the Finance Advisory Commission at their September 9, 2020 meeting where they unanimously recommended that the City Council review and approve the proposed five-year rate schedule.

DISCUSSION: About the City’s Water Rates The City’s water rates are comprised of both a fixed and variable component. The fixed rate portion is set

based on meter size and includes a capital improvement and monthly service charges. The variable rate portion is charged based on consumption in a two-tier structure. Additionally, some commercial and industrial customers pay a fire service charge to maintain a separate fire service and detector check valve at their property for fire prevention services. Since the City does not pump its own water, it derives its water supply from external sources including local groundwater produced and treated by Covina Irrigating Company and imported water from water wholesalers (including Three Valleys Municipal Water District and Upper San Gabriel Valley Municipal Water District). Over time, the cost of producing these water resources has increased resulting in upward pressure on local water retailers in the San Gabriel Valley. Additionally, over the last several years, the City has undertaken an aggressive capital improvement program including the rehabilitation of water mains, sewer mains and roadways. These efforts have resulted in the coordinated replacement of nearly 25 miles of water and road infrastructure. In order to continue these investments in the local water system, it is prudent that the City review its water rates to ensure that appropriate funding is dedicated to capital infrastructure for water. Water Billing System Changeover

midIn - Watercompany, billing waterits from Global received City the 2019, November noticeResources/Fathom, that it would cease operations in early December. Immediately following this notice, the City mailed postcard notices to customers in an effort to share news of this unforeseen situation. The City also posted outreach updates on its website and social media accounts to keep customers informed of any additional information. On December 17, 2019, the City Council authorized a new agreement with AVR to take over billing services. Since that time, both City staff and AVR have worked to transition accounts to a new billing platform. This process typically is a planned 6-month effort that includes setting up the new system, verifying customer accounts/charge amounts, running sample bills and completing system audits to ensure that bills are accurate. However, in this situation, Fathom’s abrupt closure forced the City to expedite this process without sufficient time to adequately assess options and to implement a smooth conversion to a new system. Since the billing changeover, the City has worked to minimize impacts on its customers including waiving late fees, service shut-offs and developing payment plans for customers. In early 2020, the customer service function of water billing was brought in-house to help ensure responsive customer service, generate cost savings and allow the City to retain greater control over this important function of the water enterprise. Integration to the AVR/City system has progressed well since this time and as of Fall 2020, customers have been transitioned to the new billing system. Water Enterprise Fund Balance As noted on page 37 in the City’s Water Rate Study (Attachment B), the projected fund balance for the water

enterprise will be $4 million by the end of Fiscal Year 2021. Combining wholesale water cost increases and the need to continue upgrades to our local water infrastructure, it is projected that a status quo approach will result in the fund balance dipping to roughly $2.5 million at the end of Fiscal Year 2022 and entering a negative position in subsequent years. Considering this scenario, the City can evaluate a few alternatives that will ensure the water enterprise’s financial health, including expenditure reductions (deferring planned capital

improvements) or increasing revenues (rate increases), among others. It should be noted that the City is

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currently working to refinance outstanding indebtedness in the water enterprise that will generate significant interest rate savings, thereby reducing ongoing expenditures. It is expected that this opportunity will be considered by the City Council in early 2021. Rate Study City staff, in cooperation with Civiltec Engineering Services and Raftelis (who specializes in water and wastewater rate studies), completed an intensive analysis of the Water Utility operational and capital needs in relation to its current rate structure (Attachment B). This type of analysis is normally done every five-years and is designed to evaluate current rates, and if necessary, recommend a rate structure that responds to cost of service, system improvements, and forecasted economic pressure. The study involved a comprehensive review of the City’s current water rate structure, long-term financial plan, cost requirements, and alternative rate structures to determine proposed water rates that are in line with the City’s policy objectives. The study’s goals included:

• Adequately recovering all costs to maintain the City’s water system • Fund capital improvement projects necessary to efficiently operate the water system • Evaluate alternative rate structures and tier definitions • Minimizing customer impacts due to changes in rate structure

A Cost of Service (COS) rate methodology was utilized to ensure that the proper revenue requirements are applied to all customer classes and tiers based on their proportion of usage in and burden on the water system. Survey of Neighboring Agencies A rate survey was completed to compare the City’s water rates with neighboring communities. The survey

contemplates a change in the City’s existing rate structure, as follows:

Tier Current - SF and MF Proposed - SF Proposed - MF Tier 1 16 CCF 14 CCF Uniform Rate Tier 2 More than 16 CCF More than 14 CCF

*Average SF usage is 14 CCF The survey includes a comparison of two types of single-family properties, one with water usage of 14 hundred cubic feet (CCF) of usage and another with water usage of 15 CCF of usage. The 14 CCF property would fall into Tier 1 of the City’s rate structure at $2.86 per CCF while the 15 CCF property would fall into Tier 2 of the rate structure at $3.36 per CCF. Local Agency Water Rate Comparison for a Single-Family Residence ¾ Meter Size (included in Attachment E). Staff Recommendation That the City Council conduct the public hearing and if it is determined that a majority protest does not exist close the public hearing, open regular session and adopt Resolution CC 2021-14 (Attachment G) establishing a new five-year schedule of water rates within the areas serviced by the City’s Water Division to address

wholesale water cost increases and future water system capital improvement needs. FISCAL IMPACT: Water service rates are established to cover the cost of providing daily water service to consumers, fire protection capabilities, and appurtenant capital infrastructure improvements. Adopting rates that provide the necessary revenues to meet these financial challenges benefits all users of the water system and will allow the City to meet the service demands of our customers. The failure to adopt rates that provide the necessary financial resources to secure adequate water supply and/or maintain the storage and delivery system will have a catastrophic fiscal impact on the City and the community as a whole.

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The analysis contained in the report indicates that if the current rate structure remains in place with no increases, the City will have to provide General Fund assistance in the future to meet debt servicing requirements. The recommended Consumption Rate Adjustments (Attachment C) and Customer Bill Impacts (Attachment D) are outlined in corresponding attachments. In addition, water rate comparison with neighboring communities for your review and consideration is provided (Attachment E). CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT): The actions proposed herein have been reviewed for compliance with the California Environmental Quality Act (CEQA) and are exempt per Section 15061 (b) (3). The actions are covered by the general rule that CEQA only applies to projects that have the potential for causing a significant effect on the environment. The contents of this memo will not result in any significant effect on the environment. ATTACHMENTS: Attachment A - Revenue Adjustments and Debt Coverage Comparative Charts Attachment B - Covina Water Cost of Service and Rate Study Attachment C - Proposed 5-year Consumption Rates Final 8-20 - sc Attachment D - Proposed Customer Rate Impacts Final 8-20 - sc Attachment E - Local Water Agency Rates 2020 AB 8-2020 - sc Attachment F - Notice of Public Hearing for Water Rate Increase Attachment G - Resolution CC 2021-14 Respectfully submitted,

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Attachment A: Revenue Adjustments and Debt Coverage Comparative Charts

Debt Coverage (No Revenue Adjustments)

This Chart shows debt coverage with no revenue adjustments in graphical format. Without revenue

adjustments, the City’s water utility will not meet its debt coverage target of 125%, potentially resulting in

technical default in FY 2022.

Debt Coverage (Proposed Adjustments) In contrast this chart shows the proposed debt service coverage under the proposed revenue adjustments of 4% per year. Debt service coverage is projected to exceed targets for all years of the study.

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Water Cost of Service and Rate StudyAugust 2020

CITY OFCOVINA

Attachment B

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Attachment B

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445 S. Figueroa Street, Suite 2270Los Angeles, CA 90071www.raftelis.com

August 26, 2020

Mr. Andy BullingtonDirector of Public WorksCity of Covina125 East College StreetCovina, CA 91723

Subject: Water Cost of Study and Rate Study Report

Dear Mr. Bullington:

Raftelis is pleased to provide this report to the City of Covina Public Works Department Water Utility (City) forthe Water Cost of Service and Rate Study. This report presents the analyses, rationales, and methodologies utilizedin the study to determine water rates that meet the requirements of California Constitution Article XIII D, Section6 (commonly referred to as “Proposition 218”).

The study involved a comprehensive review of the City’s current water rate structure, long-term financial plan, costrequirements, and alternative rate structures to determine proposed water rates that are in line with the City’spolicy objectives. The main objectives that informed the study include:» Adequately recovering all costs to maintain the City’s financial sufficiency» Evaluating alternative rate structures and tier definitions» Minimizing customer impacts due to changes in rate structure» Proposing new connection fees that are equitable to both existing and future users of the City’s water

system

We are confident that the proposed rates developed during this study are fair and equitable for the City’s customersand are compliant with Proposition 218. It was a pleasure working with you and your team, and we wish toexpress our gratitude for the support you and other City staff provided to us during the study. If you have anyquestions, please do not hesitate to call me at 626-827-8931.

Sincerely,Raftelis

Sudhir Pardiwala Nancy PhanExecutive Vice President Senior Consultant

Attachment B

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C IT Y O F C OV IN A – W A T E R R E P O R T i

Table of Contents1. Executive Summary .................................................................................................................................. 1Study Background ........................................................................................................................1City Background ...........................................................................................................................1Current Rates ...............................................................................................................................1Legal Framework ..........................................................................................................................2Process and Approach .................................................................................................................3Results and Recommendations....................................................................................................5Proposed Rates............................................................................................................................5Proposed Connection Fees ..........................................................................................................62. Financial Plan ............................................................................................................................................. 7Customer Accounts and Usage ....................................................................................................7Revenues ...................................................................................................................................12O&M Expenses...........................................................................................................................16Debt Service ...............................................................................................................................22Capital Projects...........................................................................................................................22Recommended Reserve Policy ..................................................................................................23Current Financial Plan (Status Quo) ...........................................................................................23Proposed Financial Plan.............................................................................................................273. Cost of Service Analysis ....................................................................................................................... 32Process and Approach ...............................................................................................................32Revenue Requirement................................................................................................................32Functionalization and Allocation of Expenses.............................................................................33Peaking Factors..........................................................................................................................34Equivalent Meters .......................................................................................................................35Operating Allocation ...................................................................................................................37Capital Allocation........................................................................................................................37Revenue Offset Allocation ..........................................................................................................38Units of Service...........................................................................................................................41Unit Cost Derivation....................................................................................................................44Cost of Service by Customer Class ............................................................................................474. Rate Design and Derivation ................................................................................................................. 49Rate Design................................................................................................................................49Monthly Service charge ..............................................................................................................49Monthly Fire Service Charge ......................................................................................................50Consumption Rate ......................................................................................................................50Proposed Water Rates ...............................................................................................................53Customer Impacts.......................................................................................................................565. Connection Fees ...................................................................................................................................... 57

Attachment B

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C IT Y O F C OV IN A – W A T E R R E P O R T ii

Objectives and Regulatory Requirements ..................................................................................57Calculation Methodologies..........................................................................................................57Equity Buy-In Methodology.........................................................................................................58Appendix ......................................................................................................................................................... 61

Attachment B

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C IT Y O F C OV IN A – W A T E R R E P O R T iii

List of TablesTable 1-1: Current Fixed Charges ($/meter or line size)...............................................................2Table 1-2: Current Consumption Rates ($/CCF) ..........................................................................2Table 1-3: Proposed Service charges ($/meter size)....................................................................5Table 1-4: Proposed Fire Line Service Charges ($/line size)........................................................5Table 1-5: Proposed Consumption Rates ($/CCF) .......................................................................6Table 1-6: Proposed Connection Fees .........................................................................................6Table 2-1: Customer Account Growth...........................................................................................7Table 2-2: Customer Demand Growth ..........................................................................................7Table 2-3: Projected Customer Accounts .....................................................................................8Table 2-4: Projected Customer Usage (CCF).............................................................................11Table 2-5: Current Fixed Charges ($/meter or line size).............................................................12Table 2-6: Current Consumption Rates ($/CCF) ........................................................................12Table 2-7: Calculated Rate Revenues ........................................................................................13Table 2-8: Revenue Escalation Factors......................................................................................14Table 2-9: Projected Revenues ..................................................................................................15Table 2-10: Expense Escalation Factors ....................................................................................16Table 2-11: Water Production by Source....................................................................................17Table 2-12: Water Supply Unit Cost by Source ..........................................................................17Table 2-13: Water Supply Cost by Source..................................................................................18Table 2-14: Projected O&M Expenses........................................................................................19Table 2-15: Existing Debt Service...............................................................................................22Table 2-16: Inflated Capital Project Costs ..................................................................................22Table 2-17: Proposed Capital Financing Plan ............................................................................22Table 2-18: Projected Financial Plan (No Revenue Adjustments) ..............................................24Table 2-19: Projected Ending Balances (No Revenue Adjustments)..........................................25Table 2-20: Proposed Revenue Adjustments .............................................................................27Table 2-21: Projected Financial Plan (Proposed Adjustments)...................................................28Table 2-22: Projected Ending Balances (Proposed Adjustments) ..............................................29Table 3-1: Proposed Revenue Requirement ..............................................................................33Table 3-2: System Peaking Factor Allocations ...........................................................................34Table 3-3: Peaking Factors by Customer Class .........................................................................35Table 3-4: Equivalent Meters......................................................................................................36Table 3-5: Equivalent Private Fire Lines .....................................................................................36Table 3-6: Equivalent Public Fire Lines ......................................................................................37Table 3-7: Operating Cost Allocation ..........................................................................................39Table 3-8: Capital Cost Allocation...............................................................................................40Table 3-9: Revenue Offset Allocation .........................................................................................40Table 3-10: Units of Service .......................................................................................................42Table 3-11: Fire Capacity Estimates...........................................................................................44Table 3-12: Adjustments to Cost of Service................................................................................44

Attachment B

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C IT Y O F C OV IN A – W A T E R R E P O R T iv

Table 3-13: Unit Cost of Service by Cost Component ................................................................46Table 3-14: Proposed Cost of Service by Customer Class.........................................................48Table 4-1: Monthly Service charge Calculation ..........................................................................49Table 4-2: Monthly Fire Service Charge Calculation ..................................................................50Table 4-3: Water Supply Usage Allocation Percentage ..............................................................50Table 4-4: Water Supply Cost Allocation Percentage .................................................................50Table 4-5: Water Supply Unit Cost by Source ............................................................................51Table 4-6: Water Supply Unit Cost by Customer Class ..............................................................52Table 4-7: Peaking Unit Cost by Customer Class.......................................................................52Table 4-8: Consumption Rate Calculation ..................................................................................53Table 4-9: Proposed Monthly Service charges ($/meter size) ....................................................53Table 4-10: Proposed Monthly Fire Service Charges ($/line size) ..............................................54Table 4-11: Proposed Consumption Rates ($/CCF) ...................................................................55Table 4-12: Single Family Customer Impacts (5/8” and 3/4" Meter) ...........................................56Table 5-1: Value of Existing Assets ............................................................................................58Table 5-2: Value of Existing System ...........................................................................................59Table 5-3: EMU Calculation........................................................................................................59Table 5-4: Equity Buy-In Fee Calculation for One EMU..............................................................60Table 5-5: Calculation of Proposed Connection Fees by Meter Size..........................................60Table 0-1: Operating Percent Allocation .....................................................................................61Table 0-2: Operating Cost Allocation ..........................................................................................66Table 0-3: Detailed Asset Valuation Calculations .......................................................................71

List of FiguresFigure 2-1: Debt Coverage (No Revenue Adjustments) .............................................................26Figure 2-2: Financial Plan (No Revenue Adjustments) ...............................................................26Figure 2-3: Projected Ending Balances (No Revenue Adjustments) ..........................................27Figure 2-4: Debt Coverage (Proposed Adjustments) ..................................................................30Figure 2-5: Financial Plan (Proposed Adjustments)....................................................................30Figure 2-6: Projected Ending Balances (Proposed Adjustments) ...............................................31

Attachment B

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C IT Y O F C OV IN A – W A T E R R E P O R T 1

1 Executive SummaryStudy BackgroundThe City of Covina Public Works Department Water Utility (City) engaged Civiltec Engineering to develop awater master plan including a rate study. Raftelis, as a member of the Civiltec team, was contracted to conduct thecost of service and rate study for its water utility in early 2018. The City last updated its water rates in FY 2015.The City wants to ensure that its rates will adequately fund the capital improvements recommended in the masterplan and fairly, and equitably recover costs for providing water service to its customers.

The major objectives that informed the study include the following:» Ensure revenue sufficiency to fund operating and maintenance (O&M) costs, capital improvement plan(CIP) costs, and reserve requirements» Evaluate alternative rate structures and tier definitions for Single Family Residential (SFR) and Multi-Family Residential (MFR) customers» Minimize customer impacts due to changes in rate structure» Develop rates that are fair, equitable, and defensible» Develop proposed connection fees that reflect the cost of serving future users of the City’s water system

This executive summary provides an overview of the study and its results, including recommendations forproposed water rates beginning January 1, 2021. The study period is between FY 20211 through FY 2025.

City BackgroundThe City’s water utility provides, high-quality water to a majority of the population of approximately 48,000 peopleresiding in the city of Covina, California. Some of the City’s residents are serviced by the following waterpurveyors: City of Azusa, Golden State Water Company, Suburban Water Company, and Valencia Heights WaterCompany.

The water utility relies on purchased water from the Covina Irrigating Company (CIC) and Three ValleysMunicipal Water District (TVMWD) to provide water to its customers. The CIC is the primary water source forthe water utility, and water is obtained from the Main San Gabriel Water Basin and from the San Gabriel River.TVMWD is the City’s secondary, or back-up, water source which serves water purchased from the MetropolitanWater District of Southern California (MWD).

Current RatesThe City’s current water rates include the following components:» Monthly service charge by meter size» Monthly CIP charge by meter size» Monthly fire service charge by private fire line size» Two-tiered consumption rate for SFR and MFR customers by hundred cubic feet (CCF) of water usage» Uniform consumption rates for non-residential customer classes by CCF of water usage

1 FY 2021 is the year starting July 1, 2020 and ending June 30, 2021.

Attachment B

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Table 1-1 shows the current fixed charges, which include the monthly service charge, monthly CIP charge, andmonthly fire service charge.

Table 1-1: Current Fixed Charges ($/meter or line size)A B C D E

Line Meter/Line Size Service Charge CIP Charge Fire Service Charge1 5/8" and 3/4" $33.24 $2.54 N/A2 1" $49.44 $6.36 N/A3 1-1/2" $76.43 $12.72 N/A4 2" $115.15 $32.55 $21.715 3" $215.92 $61.03 $63.096 4" $359.84 $101.71 $134.467 6" $719.70 $203.43 $241.808 8" N/A N/A $241.809 10" N/A N/A $241.80

Table 1-2 shows the current consumption rates by customer class and tiers. SFR and MFR customers are chargedbased on a two-tiered rate structure. All non-residential customers are charged a uniform rate by customer classbased on total CCF of water usage.

Table 1-2: Current Consumption Rates ($/CCF)A B C D

Line Customer Class Monthly Tiers(CCF)

Consumption Rate

1 Single Family2 Tier 1 0-16 CCF $2.713 Tier 2 17+ CCF $3.024 Multi-Family5 Tier 1 0-12 CCF $2.716 Tier 2 13+ CCF $2.967 Commercial/Institutional $3.168 Industrial/Manufacturing $2.749 Irrigation/Landscaping $3.1610 City/Miscellaneous $2.7511 Construction $2.37

Legal Framework2

The rate-making process, especially for water agencies in California, begins with reviewing the legal requirementsand framework currently in place. The major legal requirements include Proposition 218 and Article X, Section 2of the California Constitution, which are outlined in the following sections.

2 Raftelis does not practice law nor does it provide legal advice. The above discussion provides a general review ofapparent state institutional constraints and is labeled “legal framework” for literary convenience only. The City shouldconsult with its legal counsel for clarification and/or specific review of any of the above or other matters.

Attachment B

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California Constitution – Article XIII D, Section 6 (Proposition 218)

Proposition 218 was enacted by voters in 1996 to ensure, in part, that fees and charges imposed for ongoingdelivery of a service to a property (“property-related fees and charges”) are proportional to, and do not exceed, thecost of providing service. Water service fees and charges are property-related and subject to the provisions ofProposition 218.

The principal requirements, as they relate to public water service fees and charges, are as follows:1. Revenues derived from a property-related charge imposed by a public agency shall not exceed the costs

required to provide the property-related service.2. Revenues derived by the fee or charge shall not be used for any purpose other than that for which the fee or

charge was imposed.3. The amount of the fee or charge imposed upon any parcel shall not exceed the proportional cost of service

attributable to the parcel.4. No fee or charge may be imposed for a service unless that service is actually used or immediately available

to the owner of property.5. A written notice of the proposed fee or charge shall be mailed to the record owner of each parcel not less

than 45 days prior to a public hearing, when the agency considers all written protests against the charge.

As stated in the American Water Works Association’s (AWWA) Principles of Water Rates, Fees, and Charges: Manualof Water Supply Practices M1, Seventh Edition (M1 Manual), “water rates and charges should be recovered fromclasses of customers in proportion to the cost of serving those customers.” Proposition 218 requires that water ratescannot be “arbitrary and capricious,” meaning that the rate-setting methodology must establish a clear nexusbetween costs and the rates charged.

California Constitution – Article X, Section 2

Article X, Section 2 of the California Constitution was established in 1976 and states the following:

“It is hereby declared that because of the conditions prevailing in this State the general welfare requires that the water resources ofthe State be put to beneficial use to the fullest extent of which they are capable, and that the waste or unreasonable use orunreasonable method of use of water be prevented, and that the conservation of such waters is to be exercised with a view to thereasonable and beneficial use thereof in the interest of the people and for the public welfare.”

Article X, Section 2 of the California Constitution institutes the need to preserve the State’s water supplies and todiscourage the wasteful or unreasonable use of water by encouraging conservation. As such, public agencies areconstitutionally mandated to maximize the beneficial use of water, prevent waste, and encourage conservation.

Process and ApproachThe process and approach Raftelis utilized in the study to determine water rates is informed by the City’s policyobjectives, the current water system and rates, and the legal requirements in California (namely, Proposition 218).The resulting financial plan, cost of service analysis, and rate design process take all factors into consideration andfollow five key steps, outlined below, to determine proposed rates that fulfill the City’s objectives, meet industrystandards, and comply with relevant regulations.

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Step 1: Long-Term Financial Plan

The first step of the study is to develop a long-term financial plan that projects the water utility’s revenues,expenses, capital project financing, annual debt service, and reserve funding. The financial plan is used todetermine the revenue adjustment, which allows the water utility to recover adequate revenues to fund expensesand reserves.

Step 2: Revenue Requirement Determination for Test Year

After completing the long-term financial plan, the rate-making process can begin by determining the revenuerequirement for the test year, also known as the rate-setting year. The test year for this study is FY 2021. Therevenue requirement should sufficiently fund the utility’s O&M costs, annual debt service, CIP costs, and reservefunding as projected based on the utility’s FY 2021 budget.

Step 3: Cost of Service Analysis

The annual cost of providing water service, or the revenue requirement, is then distributed to customer classes andtiers commensurate with their use of and burden on the system. A cost of service analysis involves the followingsteps:

1. Functionalize costs – the different components of the revenue requirement are categorized into functionssuch as supply, transmission and distribution (T&D), customer service and billing, etc.

2. Allocate to cost causation components – the functionalized costs are then allocated to cost causationcomponents such as supply, base delivery, peaking, etc.

3. Develop unit costs – unit costs for each cost causation component are determined using units of service,such as total usage, peaking units, equivalent meters, number of customers, etc. for each component.

4. Distribute cost components – the cost components are allocated to each customer class and tier using theunit costs in proportion to their demand and burden on the system.

A cost of service analysis considers both the average water demand and peak demand. Peaking costs are incurredduring periods of peak consumption, most often coinciding with summertime water usage. There are additionalcapacity-related costs associated with designing, constructing, operating, maintaining, and replacing facilities tomeet peak demand. These peaking costs are allocated to the different customer classes based on each respectiveclass’s water consumption patterns. The patterns of usage impose additional costs for the utility and are used todetermine the expense of the peaking-related facilities.

Step 4: Rate Design and Calculation

After allocating the revenue requirement to each customer class and tier, the rate design and calculation processcan begin. Rates do more than simply recover costs; within the legal framework and industry standards, properlydesigned rates should support and optimize for the City’s policy objectives. Rates also act as a public informationtool in communicating these policy objectives to customers. This process also includes a rate impact analysis for allproposed water rates and sample customer bill impacts.

Step 5: Administrative Record Preparation and Rate Adoption

The final step in a rate study is to develop the administrative record in preparation for the rate adoption process.The administrative record, also known as the study report, documents the results of the rate study and presents the

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methodologies, rationale, justifications, and calculations utilized to determine the proposed rates. A thorough andmethodological administrative record serves two important functions: maintaining defensibility in a stringent legalenvironment and communicating the rate adoption process to customers and important stakeholders.

Results and RecommendationsOne key objective for the study is to evaluate alternative rate structures and tier definitions. Raftelis worked closelywith City staff to develop various rate structures and analyze the impacts of those alternatives. Therecommendations for changes to the rate structure are as follows:» SFR Tier 1: change tier width based on average monthly usage of 14 CCF» MFR consumption rates: recommend uniform rate for MFR customers due to lack of dwelling unit data» CIP charge: eliminate CIP charge and recover capital-related costs through the service charge and

consumption rates based on results of cost of service analysis

Additionally, Raftelis recommends that the City implement a 4.0 percent revenue adjustment each year starting inJanuary of 2021 and in January of every year thereafter. The City’s current water rates are only sufficient to coverO&M expenses; the revenue adjustment will allow the City to adequately fund annual debt service and a portion ofits CIP through water rates.

Proposed RatesTable 1-3, Table 1-4, and Table 1-5 show the proposed five-year rate schedule for the monthly meter charges,monthly fire line service charges, and consumption rates, respectively.

Table 1-3: Proposed Service charges ($/meter size)Line Meter Size Current Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 5/8" and 3/4" $35.78 $36.22 $37.67 $39.18 $40.75 $42.382 1" $55.80 $56.74 $59.01 $61.38 $63.84 $66.403 1-1/2" $89.15 $103.65 $107.80 $112.12 $116.61 $121.284 2" $147.70 $162.30 $168.80 $175.56 $182.59 $189.905 3" $276.95 $349.95 $363.95 $378.51 $393.66 $409.416 4" $461.55 $622.64 $647.55 $673.46 $700.40 $728.427 6" $923.13 $1,376.19 $1,431.24 $1,488.49 $1,548.03 $1,609.96

Table 1-4: Proposed Fire Line Service Charges ($/line size)Line Fire Line Size Current Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 2" $21.71 $20.09 $20.90 $21.74 $22.61 $23.522 3" $63.09 $45.24 $47.05 $48.94 $50.90 $52.943 4" $134.46 $88.60 $92.15 $95.84 $99.68 $103.674 6" $241.80 $244.24 $254.01 $264.18 $274.75 $285.745 8" $241.80 $512.69 $533.20 $554.53 $576.72 $599.796 10" $241.80 $916.49 $953.15 $991.28 $1,030.94 $1,072.18

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CIT Y O F C OV IN A – W AT E R R E P O RT 6

Table 1-5: Proposed Consumption Rates ($/CCF)

Line Customer ClassMonthly

Tiers(CCF)

Current Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 Single Family2 Tier 1 0-14 CCF $2.71 $2.86 $2.98 $3.10 $3.23 $3.363 Tier 2 15+ CCF* $3.02 $3.36 $3.50 $3.64 $3.79 $3.954 Multi-Family5 Uniform Rate $2.89** $2.99 $3.11 $3.24 $3.37 $3.516 Commercial/Institutional $3.16 $3.01 $3.14 $3.27 $3.41 $3.557 Industrial/Manufacturing $2.74 $3.01 $3.14 $3.27 $3.41 $3.558 Irrigation/Landscaping $3.16 $3.05 $3.18 $3.31 $3.45 $3.599 City/Miscellaneous $2.75 $3.01 $3.14 $3.27 $3.41 $3.55

* Current Single Family first tier is 0-16 CCF and second tier is for use greater than 16 CCF** Current Multi-Family rate is shown as the blended rate of the two-tiered rates

Proposed Connection FeesTable 1-6 shows the newly proposed connection fees by meter size to be assessed for each new connection to the City’s water system.

Table 1-6: Proposed Connection Fees

A B C D

Meter SizeRated

CapacityEMU Ratio

CapacityCharge

Source/Notes:

AWWA M1Table B-2

Column A /30 GPM

$2,451 xColumn B

5/8" or 3/4" 30 1.00 $2,451

1" 50 1.70 $4,166

1 1/2" 100 3.30 $8,087

2" 160 5.30 $12,989

3" 350 11.70 $28,673

4" 630 21.00 $51,464

6" 1,400 46.70 $114,447

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2 Financial PlanThis section of the report describes the City’s long-term financial plan for the water utility, which includes customer and usage projections, rate and non-rate revenues, O&M and capital expenses, and reserve funding. The financial plan determines the overall revenue adjustments required to maintain theCity’s financial sufficiency. Numbers shown in this section of the report are rounded. Therefore, hand calculations based on the displayed numbers, suchas summing or multiplying, may not equal the exact results shown in this report.

Customer Accounts and UsageCity staff provided customer accounts and water usage data for FY 2017 and account and demand growth projections for all customer classes are basedupon the master plan. Table 2-1 shows the customer account growth projections, which is utilized to project meter counts and water usage for eachcustomer class. Table 2-2 shows the customer water demand growth projections, which is used to project water usage. It is expected that usage demandper account will remain constant at the current level each year.

Table 2-1: Customer Account GrowthA B C D E F G H

Line Customer Class FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Single Family 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%2 Multi-Family 0.2% 0.2% 0.2% 0.2% 0.2% 0.2%3 Commercial/Institutional 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%4 Industrial/Manufacturing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%5 Irrigation/Landscaping 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%6 City/Miscellaneous 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

Table 2-2: Customer Demand GrowthA B C D E F G H

Line Customer Class FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Single Family 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%2 Multi-Family 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%3 Commercial/Institutional 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%4 Industrial/Manufacturing 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%5 Irrigation/Landscaping 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%6 City/Miscellaneous 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

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Table 2-3 shows the projected customer accounts for the study period by customer class and meter size. City staff provided meter counts for FY 2017,which is used to project customer data for FY 2018 and beyond based on the customer account growth projections in Table 2-1 for each respectivecustomer class. The City expects a small amount of growth in its residential customer classes, which include SFR and MFR customers, and noadditional growth in non-residential classes.

Total accounts (Line 87) is equal to the sum of total water meters (Line 65) and total fire lines (Line 85).

Table 2-3: Projected Customer AccountsA B C D E F G H I J

Line Customer Class/MeterSize

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY2025

1 Single Family2 5/8" and 3/4" 5,815 5,827 5,838 5,850 5,862 5,873 5,885 5,8973 1" 814 816 817 819 821 822 824 8254 1-1/2" 39 39 39 39 39 39 39 405 2" 13 13 13 13 13 13 13 136 3" 0 0 0 0 0 0 0 07 4" 0 0 0 0 0 0 0 08 6" 0 0 0 0 0 0 0 09 Total 6,681 6,694 6,708 6,721 6,735 6,748 6,762 6,7751011 Multi-Family12 5/8" and 3/4" 162 162 163 163 163 164 164 16413 1" 353 354 354 355 356 357 357 35814 1-1/2" 76 76 76 76 77 77 77 7715 2" 46 46 46 46 46 46 47 4716 3" 5 5 5 5 5 5 5 517 4" 0 0 0 0 0 0 0 018 6" 0 0 0 0 0 0 0 019 Total 642 643 645 646 647 648 650 6512021 Commercial/Institutional22 5/8" and 3/4" 447 447 447 447 447 447 447 44723 1" 193 193 193 193 193 193 193 193

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A B C D E F G H I JLine Customer Class/Meter

SizeFY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY2025

24 1-1/2" 120 120 120 120 120 120 120 12025 2" 123 123 123 123 123 123 123 12326 3" 13 13 13 13 13 13 13 1327 4" 9 9 9 9 9 9 9 928 6" 2 2 2 2 2 2 2 229 Total 907 907 907 907 907 907 907 9073031 Industrial/Manufacturing32 5/8" and 3/4" 25 25 25 25 25 25 25 2533 1" 14 14 14 14 14 14 14 1434 1-1/2" 3 3 3 3 3 3 3 335 2" 4 4 4 4 4 4 4 436 3" 0 0 0 0 0 0 0 037 4" 0 0 0 0 0 0 0 038 6" 0 0 0 0 0 0 0 039 Total 46 46 46 46 46 46 46 464041 Irrigation/Landscaping42 5/8" and 3/4" 14 14 14 14 14 14 14 1443 1" 13 13 13 13 13 13 13 1344 1-1/2" 19 19 19 19 19 19 19 1945 2" 18 18 18 18 18 18 18 1846 3" 0 0 0 0 0 0 0 047 4" 0 0 0 0 0 0 0 048 6" 0 0 0 0 0 0 0 049 Total 64 64 64 64 64 64 64 645051 City/Miscellaneous52 5/8" and 3/4" 12 12 12 12 12 12 12 1253 1" 9 9 9 9 9 9 9 954 1-1/2" 22 22 22 22 22 22 22 2255 2" 36 36 36 36 36 36 36 36

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A B C D E F G H I JLine Customer Class/Meter

SizeFY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY2025

56 3" 1 1 1 1 1 1 1 157 4" 4 4 4 4 4 4 4 458 6" 0 0 0 0 0 0 0 059 Total 84 84 84 84 84 84 84 846061 Construction62 Hydrant 7 7 7 7 7 7 7 763 Total 7 7 7 7 7 7 7 76465 Total - Meters 8,431 8,446 8,460 8,475 8,490 8,505 8,519 8,5346667 Fire - Commercial68 2" 3 3 3 3 3 3 3 369 3" 0 0 0 0 0 0 0 070 4" 60 60 60 60 60 60 60 6071 6" 63 63 63 63 63 63 63 6372 8" 12 12 12 12 12 12 12 1273 10" 2 2 2 2 2 2 2 274 Total - Fire - Commercial 140 140 140 140 140 140 140 1407576 Fire - Residential77 2" 9 9 9 9 9 9 9 978 3" 1 1 1 1 1 1 1 179 4" 11 11 11 11 11 11 11 1180 6" 1 1 1 1 1 1 1 181 8" 0 0 0 0 0 0 0 082 10" 0 0 0 0 0 0 0 083 Total - Fire - Residential 22 22 22 22 22 22 22 228485 Total - Fire Lines 162 162 162 162 162 162 162 16286 Total - Accounts 8,593 8,608 8,622 8,637 8,652 8,667 8,682 8,696

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Table 2-4 shows the projected customer usage data in CCF for the study period. The customer account growth projections and customer demandgrowth projections in Table 2-1 and Table 2-2, respectively, are utilized to project FY 2017 water usage data in FY 2018 and beyond. The total waterusage is shown as CCF (Line 20) and acre-feet (AF) (Line 23). One AF of water is equal to approximately 435.6 CCF.

Table 2-4: Projected Customer Usage (CCF)A B C D E F G H I J

Line Customer Class FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Single Family2 Tier 1 841,509 843,192 844,878 846,568 848,261 849,958 851,658 853,3613 Tier 2 269,853 270,393 270,933 271,475 272,018 272,562 273,107 273,6544 Total - Single Family 1,111,362 1,113,585 1,115,812 1,118,044 1,120,280 1,122,520 1,124,765 1,127,01556 Multi-Family7 Tier 1 87,159 87,333 87,508 87,683 87,858 88,034 88,210 88,3878 Tier 2 281,117 281,679 282,243 282,807 283,373 283,939 284,507 285,0769 Total - Multi-Family 368,276 369,013 369,751 370,490 371,231 371,974 372,717 373,4631011 Commercial/Institutional 444,453 444,453 444,453 444,453 444,453 444,453 444,453 444,45312 Industrial/Manufacturing 5,922 5,922 5,922 5,922 5,922 5,922 5,922 5,92213 Irrigation/Landscaping 28,875 28,875 28,875 28,875 28,875 28,875 28,875 28,87514 City/Miscellaneous 27,353 27,353 27,353 27,353 27,353 27,353 27,353 27,35315 Construction 4,984 4,984 4,984 4,984 4,984 4,984 4,984 4,9841617 Fire - Commercial 840 840 840 840 840 840 840 84018 Fire - Residential 0 0 0 0 0 0 0 01920 Total - Usage (CCF) 1,992,065 1,995,024 1,997,989 2,000,961 2,003,938 2,006,921 2,009,910 2,012,90521 Excluding Fire 1,991,225 1,994,184 1,997,149 2,000,121 2,003,098 2,006,081 2,009,070 2,012,0652223 Total - Usage (AF) 4,573 4,580 4,587 4,594 4,600 4,607 4,614 4,62124 Excluding Fire 4,571 4,578 4,585 4,592 4,598 4,605 4,612 4,619

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RevenuesTable 2-5 and Table 2-6 shows the City’s current fixed charges and consumption rates, respectively. The fixed charges include a monthly service chargeand CIP charge based on meter size and a monthly fire service charge based on fire line size. Consumption rates are charged to each customer class andtier for each CCF of water usage.

Table 2-5: Current Fixed Charges ($/meter or line size)A B C D E

Line Meter/Line Size Meter Charge CIP Charge Fire Service Charge1 5/8" and 3/4" $33.24 $2.54 N/A2 1" $49.44 $6.36 N/A3 1-1/2" $76.43 $12.72 N/A4 2" $115.15 $32.55 $21.715 3" $215.92 $61.03 $63.096 4" $359.84 $101.71 $134.467 6" $719.70 $203.43 $241.808 8" N/A N/A $241.809 10" N/A N/A $241.80

Table 2-6: Current Consumption Rates ($/CCF)A B C D


Consumption Rate

1 Single Family2 Tier 1 0-16 CCF $2.713 Tier 2 17+ CCF $3.024 Multi-Family5 Tier 1 0-12 CCF $2.716 Tier 2 13+ CCF $2.967 Commercial/Institutional $3.168 Industrial/Manufacturing $2.749 Irrigation/Landscaping $3.1610 City/Miscellaneous $2.7511 Construction $2.37

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To accurately project rate revenues for FY 2020 and beyond in Table 2-7, the current water rates in Table 2-5 and Table 2-6 are multiplied by theprojected meter count and water usage data in Table 2-3 and Table 2-4 to calculate rate revenues.

For example, SFR service charge revenues (Line 2) are calculated by multiplying the SFR meter counts (Table 2-3, Lines 2-8) by the current monthlyservice charge (Table 2-5, Column C) by 12 billing periods in a year. SFR consumption rate revenues (Line 25) are calculated by multiplying SFR waterusage in each tier (Table 2-4, Lines 2-3) by the consumption rate for each tier (Table 2-6, Column D, Lines 2-3).

Table 2-7 shows the calculated rate revenues by customer class and rate component for FY 2020 and beyond.

Table 2-7: Calculated Rate RevenuesA B C D E F G H

Line Calculated Rate Revenues FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Service Charge2 Single Family $2,867,586 $2,873,321 $2,879,068 $2,884,826 $2,890,595 $2,896,3773 Multi-Family $421,951 $422,795 $423,641 $424,488 $425,337 $426,1884 Commercial/Institutional $662,642 $662,642 $662,642 $662,642 $662,642 $662,6425 Industrial/Manufacturing $26,557 $26,557 $26,557 $26,557 $26,557 $26,5576 Irrigation/Landscaping $55,595 $55,595 $55,595 $55,595 $55,595 $55,5957 City/Miscellaneous $99,912 $99,912 $99,912 $99,912 $99,912 $99,9128 Total - Meter Charge $4,134,243 $4,140,822 $4,147,414 $4,154,020 $4,160,638 $4,167,270910 CIP Charge11 Single Family $251,399 $251,902 $252,406 $252,910 $253,416 $253,92312 Multi-Family $65,369 $65,500 $65,631 $65,762 $65,894 $66,02613 Commercial/Institutional $120,103 $120,103 $120,103 $120,103 $120,103 $120,10314 Industrial/Manufacturing $3,851 $3,851 $3,851 $3,851 $3,851 $3,85115 Irrigation/Landscaping $11,350 $11,350 $11,350 $11,350 $11,350 $11,35016 City/Miscellaneous $24,087 $24,087 $24,087 $24,087 $24,087 $24,08717 Total - CIP Charge $476,158 $476,792 $477,427 $478,063 $478,700 $479,3391819 Fire Service Charge20 Fire - Commercial $321,016 $321,016 $321,016 $321,016 $321,016 $321,01621 Fire - Residential $23,847 $23,895 $23,943 $23,991 $24,039 $24,08722 Total - Fire Service Charge $344,863 $344,911 $344,959 $345,007 $345,054 $345,10323

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A B C D E F G HLine Calculated Rate Revenues FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 202524 Consumption Rates25 Single Family $3,107,840 $3,114,055 $3,120,283 $3,126,524 $3,132,777 $3,139,04326 Multi-Family $1,072,585 $1,074,730 $1,076,879 $1,079,033 $1,081,191 $1,083,35427 Commercial/Institutional $1,404,471 $1,404,471 $1,404,471 $1,404,471 $1,404,471 $1,404,47128 Industrial/Manufacturing $16,226 $16,226 $16,226 $16,226 $16,226 $16,22629 Irrigation/Landscaping $91,245 $91,245 $91,245 $91,245 $91,245 $91,24530 City/Miscellaneous $75,221 $75,221 $75,221 $75,221 $75,221 $75,22131 Total - Consumption Rates $5,767,588 $5,775,949 $5,784,326 $5,792,721 $5,801,132 $5,809,5603233 Total - Rate Revenues $10,722,852 $10,738,474 $10,754,126 $10,769,810 $10,785,525 $10,801,271

Table 2-8 shows the revenue escalation factors to project future non-rate revenues (Line 1) and interest income (Line 2) for FY 2021 and beyond. Non-rate revenues, which include meter installation fees, customer service fees, and other miscellaneous revenues are expected to remain stable over thestudy period. The reserve interest rate is based on the rate provided by City staff. The City invests a portion of its water utility reserves, and the reserveinterest rate represents a composite return on total reserves.

Table 2-8: Revenue Escalation FactorsA B C D E F G

Line Revenue Escalation Factors FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Non-Rate Revenues 0.0% 0.0% 0.0% 0.0% 0.0%2 Reserve Interest Rate 0.5% 0.5% 0.5% 0.5% 0.5%

Table 2-9 shows the projected revenues for the study period. Revenues for FY 2021 are projected based on the calculated rate revenues in Table 2-7 andrevenue escalation factors in Table 2-8 for all non-rate revenues.

The water sales revenue (Line 9) is equal to the monthly service charge and consumption rate revenues (Table 2-7, Lines 8 and 31). The CIP chargerevenues (Line 3) are equal to the monthly CIP charge revenues for all customer classes (Table 2-7, Line 17). Similarly, the fire service charge revenues(Line 10) are equal to the monthly fire service charge revenues (Table 2-7, Line 22).

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Table 2-9: Projected Revenues

A B C D E F G

Line RevenuesProjected -

FY 2021Projected -

FY 2022Projected -

FY 2023Projected -

FY 2024Projected -

FY 20251 Advance Reimbursements $100,000 $100,000 $100,000 $100,000 $100,0002 Interest on Advances-Genl Fund $500 $500 $500 $500 $5003 Transfer-Enterprise Fund $2,500,000 $0 $0 $0 $04 Water CIP- Interest-I $22,737 $15,674 $5,124 ($9,580) ($29,530)5 Water CIP-Production Water Cap $300,000 $477,427 $478,063 $478,700 $479,3396 Water Interest-I $0 $0 $0 $0 $07 Water Meter Installation Fees $15,000 $15,000 $15,000 $15,000 $15,0008 Water-Customer Service Meter I $1,500 $1,500 $1,500 $1,500 $1,5009 Water-Customer Service Meter R $25,000 $25,000 $25,000 $25,000 $25,00010 Water-Customer Service Water R $0 $0 $0 $0 $011 Water-Customer Service Water-O $55,000 $55,000 $55,000 $55,000 $55,00012 Water-Production Water-Othe $0 $0 $0 $0 $013 Water-Production Water-Reta $10,250,000 $9,931,740 $9,946,740 $9,961,770 $9,976,83014 Water-Trans and Dist Fire Line $200,000 $344,959 $345,007 $345,054 $345,10315 Water-Trans and Dist Water-Oth $40,000 $40,000 $40,000 $40,000 $40,00016 Total - Revenues $13,509,737 $11,006,800 $11,011,933 $11,012,945 $11,008,741

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O&M ExpensesTable 2-10 shows the expense escalation factors used to reasonably project future expenses for FY 2021 andbeyond. City staff provided input to ensure reasonable and accurate escalation factors, which are used to projectthe O&M expense budget, water supply costs, and capital project costs.

The fixed and variable escalation factors are utilized to project the O&M budget based on the cost function. Forexample, variable costs, which are defined as costs that vary with water demand, are inflated firstly by anescalation factor from Lines 1-7 and then secondly by the variable escalation factor in Line 10. The variableescalation factor (Line 10) is equal to the percent change in water demand from Table 2-4. Fixed costs do not varywith water demand and are simply escalated by the escalation factors in Lines 1-7.

Table 2-10: Expense Escalation FactorsA B C D E F G

Line Expense Escalation Factors FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 General 3.0% 3.0% 3.0% 3.0% 3.0%2 Salaries 3.0% 3.0% 3.0% 3.0% 3.0%3 Benefits 5.0% 5.0% 5.0% 5.0% 5.0%4 Utilities 5.0% 5.0% 5.0% 5.0% 5.0%5 Water 5.0% 5.0% 5.0% 5.0% 5.0%6 Capital 4.0% 4.0% 4.0% 4.0% 4.0%7 Non-Inflated 0.0% 0.0% 0.0% 0.0% 0.0%89 Fixed Escalation 0.0% 0.0% 0.0% 0.0% 0.0%10 Variable Escalation 0.1% 0.1% 0.1% 0.1% 0.1%

Table 2-11 shows the amount of water produced by source, as provided by City staff. The water loss percentage(Line 1) is used to calculate the amount of water that must be produced (Line 4) to support the utility’s waterdemand (Line 3). The water demand is equal to the total usage for all customer classes in AF (Table 2-4, Line 23).Water production is calculated as follows:

Water demand (Line 3) / [100% - Water loss percentage (Line 1)] = Water production (Line 4)

The amount of water purchased (Lines 6-12) is shown for each source of water based on data provided by Citystaff. The purchased amount (Line 12) is greater than the water production requirement (Line 4). The Citypurchases reserve water from CIC at the wholesale rate and keeps the water stored in the groundwater basin. Thiswater is available to be used in years where the City water demand exceeds the City’s water rights.

The various sources of water include:» Covina Irrigating Company stocks, leases, and purchases from lease pool» Grand Avenue Well production rights to CIC» Purchased water from Three Valleys Municipal Water District (TVMWD)

The City is projecting no purchases from TVMWD over the planning period.

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Table 2-11: Water Production by SourceA B C D E F G

Line Water Production FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Water Loss 5.7% 5.7% 5.7% 5.7% 5.7%23 Water Demand (AF) 4,594 4,600 4,607 4,614 4,6214 Water Production (AF) 4,872 4,879 4,887 4,894 4,90156 Water Purchase (AF)7 CIC Stock 4,430 4,430 4,430 4,430 4,4308 Grand Avenue Well to CIC 360 360 360 360 3609 CIC Leased 567 567 567 567 56710 CIC Lease Pool 210 210 210 210 21011 TVMWD 0 0 0 0 012 Total - Water Purchase (AF) 5,567 5,567 5,567 5,567 5,567

Table 2-12 shows the water supply unit cost by source. City staff provided unit costs per AF for each source for FY2021; the unit costs for the remainder of the study are projected annually based on the water expense escalationfactor (Table 2-10, Line 5). The CIC leased water and purchased water from the lease pool includes twocomponents: a lease cost and a production cost charged per AF of water produced from each respective source.The lease cost is based on 540 shares of CIC Leased and 200 shares of CIS Lease Pool.

Table 2-12: Water Supply Unit Cost by SourceA B C D E F G

Line Unit Costs by Source FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Unit Cost ($/AF)2 CIC Stock $520 $546 $573 $602 $6323 Grand Avenue Well to CIC $375 $394 $413 $434 $4564 CIC Leased5 Lease Cost $325 $341 $358 $376 $3956 Production Cost $520 $546 $573 $602 $6327 CIC Lease Pool8 Lease Cost $325 $341 $358 $376 $3959 Production Cost $520 $546 $573 $602 $63210 TVMWD $1,119 $1,175 $1,234 $1,295 $1,360

Table 2-13 shows the water supply cost based on the purchased amount from each source (Table 2-11, Lines 7-11)and the unit cost for each source (Table 2-12, Lines 2-10). For example, the water supply cost for CIC leased wateris as follows:

Water purchased from CIC Leased (Table 2-11, Line 9) x CIC Leased production cost (Table 2-12, Line 5) + CIC Leased leasecost (Table 2-12, Line 6) x 540 shares = Water supply cost for CIC Leased (Table 2-13, Line 4)

The water supply cost for the CIC lease pool is similarly calculated based on 200 shares.

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Table 2-13: Water Supply Cost by SourceA B C D E F G

Line Supply Cost by Source FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Water Supply Cost2 CIC Stock $2,303,600 $2,418,780 $2,539,719 $2,666,705 $2,800,0403 Grand Avenue Well to CIC $135,000 $141,750 $148,838 $156,279 $164,0934 CIC Leased $470,340 $493,857 $518,550 $544,477 $571,7015 CIC Lease Pool $174,200 $182,910 $192,056 $201,658 $211,7416 TVMWD $0 $0 $0 $0 $07 Total - Water Supply Cost $3,083,140 $3,237,297 $3,399,162 $3,569,120 $3,747,57683 Other Supply Costs10 Improvement Charge, paid to

CIC $51,975 $54,574 $57,302 $60,168 $63,17611 Capacity Charge, paid to CIC $121,226 $127,287 $133,652 $140,334 $147,35112 Assessment Charge, paid to SG

Basin Water Quality Authority $6,000 $6,300 $6,615 $6,946 $7,29313 Monthly Fee, paid to

TVMWD $64,000 $67,200 $70,560 $74,088 $77,79214 Contingency $200,000 $210,000 $220,500 $231,525 $243,10115 Total - Other Supply Costs $443,201 $465,361 $488,629 $513,061 $538,7141617 Total Supply Cost $3,526,341 $3,702,658 $3,887,791 $4,082,181 $4,286,290

Table 2-14 shows the projected O&M expense budget for the study period. City staff provided the FY 2021 budget.For FY 2022 and beyond, O&M expenses are inflated based on the expense escalation factors in Table 2-10. Thewater supply cost (Line 52) is derived from the water supply cost calculations (Table 2-13, Line 17).

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Table 2-14: Projected O&M ExpensesA B C D E F G

Line O&M ExpensesProjected -

FY 2021Projected -

FY 2022Projected -

FY 2023Projected -

FY 2024Projected -

FY 20251 Transfer-Enterprise Fund $2,500,000 $0 $0 $0 $02 Water-Water Admin Reg Full-T $349,105 $359,578 $370,365 $381,476 $392,9213 Water-Water Admin Reg Part-T $44,500 $45,835 $47,210 $48,626 $50,0854 Water-Water Admin Overtime $1,200 $1,236 $1,273 $1,311 $1,3515 Water-Water Admin Medicare C $5,695 $5,980 $6,279 $6,593 $6,9226 Water-Water Admin PERS Cont- $39,688 $41,672 $43,756 $45,944 $48,2417 PERS Unfunded Liability Exp-ER $414,072 $434,776 $456,514 $479,340 $503,3078 Water-Water Admin Group Heal $5,709 $5,994 $6,294 $6,609 $6,9399 Water-Water Admin Group Life $641 $673 $707 $742 $77910 Water-Water Admin Group LTD $2,431 $2,553 $2,680 $2,814 $2,95511 Water-Water Admin Group Flex $44,079 $46,283 $48,597 $51,027 $53,57812 Water-Water Admin Workers Co $7,144 $7,501 $7,876 $8,270 $8,68413 Water-Water Admin Consulting $100,000 $103,000 $106,090 $109,273 $112,55114 Water-Water Admin Other Prof $32,107 $33,070 $34,062 $35,084 $36,13715 Water-Water Admin Maint-Offi $315 $324 $334 $344 $35516 Water-Water Admin Dues and S $10,490 $10,805 $11,129 $11,463 $11,80717 Water-Water Admin Conference $300 $309 $318 $328 $33818 Water-Water Admin Postage $3,300 $3,399 $3,501 $3,606 $3,71419 Water-Water Admin Motor Pool $5,792 $5,966 $6,145 $6,329 $6,51920 Legal Notices and Publications $750 $773 $796 $820 $84421 Water-Water Admin Office Acc $16,050 $16,532 $17,027 $17,538 $18,06422 Buildings and Structures $22,000 $22,660 $23,340 $24,040 $24,76123 Improvements-Not Bldgs/Structr $5,000 $5,150 $5,305 $5,464 $5,62824 Computer Hardware and Software $20,500 $21,115 $21,748 $22,401 $23,07325 Water-Water Admin Public Wor $208,400 $214,652 $221,092 $227,724 $234,55626 Water-Water Admin Yard Cente $57,300 $59,019 $60,790 $62,613 $64,49227 Indirect Cost Allocation $498,670 $513,630 $529,039 $544,910 $561,25728 Water-Utility Billing Reg Full $74,833 $77,078 $79,390 $81,772 $84,22529 Water-Utility Billing Reg Part $13,537 $13,943 $14,361 $14,792 $15,23630 Water-Utility Billing Medicare $1,289 $1,353 $1,421 $1,492 $1,56731 Water-Utility Billing PERS Con $8,593 $9,023 $9,474 $9,947 $10,44532 Water-Utility Billing Group He $1,387 $1,456 $1,529 $1,606 $1,68633 Water-Utility Billing Group Li $153 $161 $169 $177 $18634 Water-Utility Billing Group LT $522 $548 $576 $604 $63435 Water-Utility Billing Group Fl $10,948 $11,495 $12,070 $12,674 $13,30736 Water-Utility Billing Workers $5,249 $5,511 $5,787 $6,076 $6,38037 Other Professional Fees $96,030 $98,911 $101,878 $104,935 $108,08338 Water-Utility Billing Postage $300 $309 $318 $328 $33839 Water-Customer Service Reg Ful $260,214 $268,020 $276,061 $284,343 $292,87340 Regular Part-Time Employees $111,820 $115,175 $118,630 $122,189 $125,85441 Water-Customer Service Overtim $16,000 $16,480 $16,974 $17,484 $18,00842 Water-Customer Service Medicar $4,305 $4,520 $4,746 $4,984 $5,233

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A B C D E F G


FY 2021Projected -

FY 2022Projected -

FY 2023Projected -

FY 2024Projected -

FY 202543 Water-Customer Service PERS Co $29,880 $31,374 $32,943 $34,590 $36,31944 Water-Customer Service Group H $4,676 $4,910 $5,155 $5,413 $5,68445 Water-Customer Service Group L $2,330 $2,447 $2,569 $2,697 $2,83246 Water-Customer Service Group F $29,973 $31,472 $33,045 $34,697 $36,43247 Water-Customer Service Workers $16,400 $17,220 $18,081 $18,985 $19,93448 Water-Customer Service Maint-O $2,250 $2,318 $2,387 $2,459 $2,53249 Water-Customer Service Motor P $27,205 $28,021 $28,862 $29,728 $30,61950 Administrative Charges $56,905 $58,612 $60,371 $62,182 $64,04751 Water-Customer Service Clothin $3,050 $3,142 $3,236 $3,333 $3,43352 Water-Source and Supply Resale $3,526,341 $3,702,658 $3,887,791 $4,082,181 $4,286,29053 Water-Production Reg Full-T $359,500 $370,285 $381,394 $392,835 $404,62054 Water-Production Reg Part-T $16,547 $17,043 $17,555 $18,081 $18,62455 Water-Production Overtime $46,000 $47,380 $48,801 $50,265 $51,77356 Water-Production Medicare C $6,120 $6,426 $6,747 $7,085 $7,43957 Water-Production PERS Cont- $41,281 $43,345 $45,512 $47,788 $50,17758 Water-Production Group Heal $8,348 $8,765 $9,204 $9,664 $10,14759 Water-Production Group Life $921 $967 $1,015 $1,066 $1,11960 Water-Production Group LTD $2,506 $2,631 $2,763 $2,901 $3,04661 Water-Production Group Flex $59,975 $62,974 $66,122 $69,429 $72,90062 Water-Production Workers Co $25,703 $26,988 $28,338 $29,754 $31,24263 Testing Fees $20,460 $21,074 $21,706 $22,357 $23,02864 Water-Production Other Prof $72,500 $74,675 $76,915 $79,223 $81,59965 Water-Production Electric U $296,481 $305,375 $314,537 $323,973 $333,69266 Water-Production Telephone $12,353 $12,724 $13,105 $13,498 $13,90367 Water-Production Lawn/Lands $30,340 $31,250 $32,188 $33,153 $34,14868 Water-Production Maint-Buil $94,687 $97,528 $100,453 $103,467 $106,57169 Water-Production Maint-Pwr/ $103,000 $106,090 $109,273 $112,551 $115,92770 Water-Production Employee T $6,000 $6,180 $6,365 $6,556 $6,75371 Water-Production Motor Pool $28,528 $29,384 $30,265 $31,173 $32,10972 Water-Production Licenses a $1,400 $1,442 $1,485 $1,530 $1,57673 Water-Production Clothing/E $2,344 $2,414 $2,487 $2,561 $2,63874 Water-Production Chemicals/ $58,000 $60,991 $64,136 $67,443 $70,92075 Water-Production Lumber and $1,000 $1,030 $1,061 $1,093 $1,12676 Water-Production Small Tool $6,600 $6,798 $7,002 $7,212 $7,42877 Water-Trans and Dist Reg Full- $407,967 $420,206 $432,812 $445,797 $459,17078 Water-Trans and Dist Overtime $78,000 $80,340 $82,750 $85,233 $87,79079 Water-Trans and Dist Medicare $7,740 $8,127 $8,533 $8,960 $9,40880 Water-Trans and Dist PERS Cont $46,847 $49,189 $51,649 $54,231 $56,94381 Water-Trans and Dist Group Hea $10,581 $11,110 $11,666 $12,249 $12,86182 Water-Trans and Dist Group Lif $1,167 $1,225 $1,287 $1,351 $1,41883 Water-Trans and Dist Group LTD $2,844 $2,986 $3,136 $3,292 $3,45784 Water-Trans and Dist Group Fle $82,876 $87,020 $91,371 $95,939 $100,73685 Water-Trans and Dist Workers C $29,729 $31,215 $32,776 $34,415 $36,13686 Water-Trans and Dist Other Pro $30,200 $31,106 $32,039 $33,000 $33,990

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A B C D E F G


FY 2021Projected -

FY 2022Projected -

FY 2023Projected -

FY 2024Projected -

FY 202587 Water-Trans and Dist Telephone $5,900 $6,077 $6,259 $6,447 $6,64188 Water-Trans and Dist Maint-Wat $189,950 $195,649 $201,518 $207,563 $213,79089 Water-Trans and Dist Maint-Fir $30,000 $30,900 $31,827 $32,782 $33,76590 Water-Trans and Dist Maint-Oth $15,000 $15,450 $15,914 $16,391 $16,88391 Water-Trans and Dist Employee $10,000 $10,300 $10,609 $10,927 $11,25592 Water-Trans and Dist Motor Poo $165,108 $170,061 $175,163 $180,418 $185,83193 Water-Trans and Dist Clothing/ $13,080 $13,472 $13,877 $14,293 $14,72294 Shop Materials $4,500 $4,635 $4,774 $4,917 $5,06595 Cement and Concrete Supplies $33,436 $34,439 $35,472 $36,536 $37,63396 Water-Trans and Dist Small Too $8,900 $9,167 $9,442 $9,725 $10,01797 Fiscal Agent Fees $4,690 $4,831 $4,976 $5,125 $5,27998 Regular Full-Time Employees $340,680 $350,900 $361,427 $372,270 $383,43899 Medicare Contribution $5,530 $5,807 $6,097 $6,402 $6,722100 PERS Contribution-Employer $38,760 $40,698 $42,733 $44,870 $47,113101 Group Health Insurance $8,540 $8,967 $9,415 $9,886 $10,380102 Group Life Insurance $950 $998 $1,047 $1,100 $1,155103 Group LTD Insurance $2,360 $2,478 $2,602 $2,732 $2,869104 Group Flex Benefits $60,090 $63,095 $66,249 $69,562 $73,040105 Workers Compensation $1,571 $1,650 $1,732 $1,819 $1,910106 Consulting Fees $50,000 $51,500 $53,045 $54,636 $56,275107 Software Lease Fees $48,600 $50,058 $51,560 $53,107 $54,700108 Maint-Buildings/Structures $65,000 $66,950 $68,959 $71,027 $73,158109 Bank Service Charges $56,260 $57,948 $59,686 $61,477 $63,321110 Other $500 $515 $530 $546 $563111 Electric Utilities $16,157 $16,965 $17,813 $18,704 $19,639112 Water-Utility Billing Overtime $500 $515 $530 $546 $563113 Water-Customer Service Telepho $3,032 $3,123 $3,217 $3,313 $3,413114 Total - O&M Expenses $11,877,067 $9,752,071 $10,143,013 $10,550,604 $10,975,589

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Debt ServiceTable 2-15 shows the City’s existing debt service obligations, which includes debt service for water bonds issued in2010.

Table 2-15: Existing Debt ServiceA B C D E F G

Line Debt Service FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 2010 Water Bonds $985,313 $986,413 $984,600 $984,650 $983,6504 Total - Debt Service $985,313 $986,413 $984,600 $984,650 $983,650

Capital ProjectsCity staff worked with CIVILTEC Engineering, Inc. (CIVILTEC) to develop a long-term CIP, shown in Table2-16. The capital project costs for FY 2022 and beyond are inflated using the capital escalation factor (Table 2-10,Line 6).

Table 2-16: Inflated Capital Project CostsA B C D E F G

Line Capital Projects FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Grand Avenue Main Replacement Project $0 $0 $3,515,200 $3,655,808 $02 Citrus Avenue Main Replacement $1,500,000 $0 $0 $0 $03 Badillo Street Main Replacement $650,000 $0 $0 $0 $04 Badillo Street Services Replacement $250,000 $0 $0 $0 $05 Pannels Replacement $200,000 $0 $0 $0 $06 Rowland Street Services Replacement $0 $364,000 $0 $0 $07 Services, Valve and Hydrants Replacement Project $0 $0 $0 $0 $584,9298 Scada Station Design $30,000 $0 $0 $0 $09 San Joaquin Rambling Road Main Replacement $0 $0 $0 $0 $4,679,43410 Total - Capital Projects $2,630,000 $2,444,000 $3,515,200 $3,655,808 $5,264,364

Table 2-17 shows the proposed capital financing plan for the study period. The City plans to fund only a portion ofits CIP (Line 2) to minimize customer impacts and maintain reserve balances. The total funded CIP (Line 3) isfunded through water rate revenues.

Table 2-17: Proposed Capital Financing PlanA B C D E F G

Line Capital Financing Plan FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Total Capital Projects $2,630,000 $2,444,000 $3,515,200 $3,655,808 $5,264,3642 CIP to Fund 75% 75% 75% 75% 75%3 Total Funded Capital Projects $1,972,500 $1,833,000 $2,636,400 $2,741,856 $3,948,27345 Rate Funded $1,972,500 $0 $0 $0 $1,598,5296 Unfunded $657,500 $611,000 $878,800 $913,952 $1,316,091

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Recommended Reserve PolicyThe City does not currently have an adopted reserve policy for its water utility. Having adequate reserves isessential to prudent fiscal management. A sound reserve policy will help the City mitigate against cash flow risks,prepare for unexpected expenses and asset failure, and fund capital project costs upfront.

The recommended reserve policy used to benchmark the water utility’s financial position consists of fourcomponents: operating, capital, rate stabilization, and emergency. The operating reserves allow the City to meet itsworking capital requirements and any unexpected increases in operating expenses that may arise during the year.The capital reserve policy is recommended to fund capital projects and construction contracts upfront. Ratestabilization reserves are often equal to a percentage of annual water sales, which the City can utilize to mitigateany changes to the revenues resulting from reduced sales and reduce or smooth out rate increases. Emergencyreserves provide safety capital to fund critical assets in emergency situations or natural disasters.

For this study, Raftelis recommends the following:» Operating: 3 months of O&M expenses» Capital: 5-year average CIP costs» Rate Stabilization: 5 percent of annual water sales revenues» Emergency: $1.5 million

Current Financial Plan (Status Quo)Table 2-18 shows the operating financial plan with no revenue adjustments. Revenues (Line 16) are from Table2-9, O&M expenses and water supply costs (Lines 19-20) are from Table 2-14, existing debt service (Line 21) isfrom Table 2-15, and rate funded capital costs (Line 23) are from Table 2-17.

Net operating revenue (Line 26) is equal to revenues (Line 16) less O&M expenses and water supply costs (Lines19-20). The net operating revenue is positive for all years, which shows that the City’s current revenues aresufficient to cover its O&M expenses. Net cash flow (Line 27) is net operating revenue less debt service and capitalproject costs (Lines 21-23). Net cash flow is negative for all years, which signifies that current revenues are notsufficient to fund capital costs.

Debt service coverage (Line 29) is calculated by dividing net operating revenue (Line 26) by annual debt service(Line 21). The projected debt service coverage falls below the target coverage of 1.25 starting in FY 2023 if the Citydoes not implement any revenue adjustments.

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Table 2-19 shows the projected fund balances with no revenue adjustments. Due to the negative cash flow in allyears (Table 2-18, Line 27), the City is drawing down its water fund reserves and will not meet recommendedreserve targets during the planning period.

Table 2-18: Projected Financial Plan (No Revenue Adjustments)A B C D E F G

Line Projected Financial Plan FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Revenues2 Rate Revenues $10,750,000 $10,754,126 $10,769,810 $10,785,525 $10,801,27134 Revenue Adjustments5 FY 2021 - 0.0% $0 $0 $0 $0 $06 FY 2022 - 0.0% $0 $0 $0 $0 $07 FY 2023 - 0.0% $0 $0 $0 $08 FY 2024 - 0.0% $0 $0 $09 FY 2025 - 0.0% $0 $010 Total - Revenue Adjustments $0 $0 $0 $0 $01112 Total Rate Revenues $10,750,000 $10,754,126 $10,769,810 $10,785,525 $10,801,27113 Transfers In $2,500,000 $0 $0 $0 $014 All Other Operating Revenues $237,000 $237,000 $237,000 $237,000 $237,00015 Interest Income $22,737 $15,674 $5,124 ($9,580) ($29,530)16 Total - Revenues $13,509,737 $11,006,800 $11,011,933 $11,012,945 $11,008,7411718 Expenses19 O&M Expenses (less Water Supply Cost) $8,350,726 $6,049,413 $6,255,222 $6,468,423 $6,689,30020 Water Supply Cost $3,526,341 $3,702,658 $3,887,791 $4,082,181 $4,286,29021 Existing Debt Service $985,313 $986,413 $984,600 $984,650 $983,65022 Proposed Debt Service $0 $0 $0 $0 $023 Rate Funded Capital Projects $1,972,500 $1,833,000 $2,636,400 $2,741,856 $3,948,27324 Total - Expenses $14,834,879 $12,571,484 $13,764,013 $14,277,110 $15,907,5122526 Net Operating Revenue $1,632,670 $1,254,729 $868,921 $462,341 $33,15227 Net Cash Flow ($1,325,142) ($1,564,684) ($2,752,079) ($3,264,165) ($4,898,771)2829 Calculated Debt Coverage 1.66 1.27 0.88 0.47 0.0330 Debt Coverage Target 1.25 1.25 1.25 1.25 1.25

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Table 2-19: Projected Ending Balances (No Revenue Adjustments)A B C D E F G

Line Water Fund Projected Balances FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Beginning Balance $5,314,103 $3,988,960 $2,424,276 ($327,803) ($3,591,968)23 Sources of Funds4 Rate Revenues $10,750,000 $10,754,126 $10,769,810 $10,785,525 $10,801,2715 Transfers In $2,500,000 $0 $0 $0 $06 All Other Operating Revenues $237,000 $237,000 $237,000 $237,000 $237,0007 Debt Proceeds $0 $0 $0 $0 $08 Interest Income $22,737 $15,674 $5,124 ($9,580) ($29,530)9 Total - Sources of Funds $13,509,737 $11,006,800 $11,011,933 $11,012,945 $11,008,7411011 Uses of Funds12 O&M Expenses $11,877,067 $9,752,071 $10,143,013 $10,550,604 $10,975,58913 Debt Service $985,313 $986,413 $984,600 $984,650 $983,65014 Capital Projects $1,972,500 $1,833,000 $2,636,400 $2,741,856 $3,948,27315 Total - Uses of Funds $14,834,879 $12,571,484 $13,764,013 $14,277,110 $15,907,5121617 Ending Balances $3,988,960 $2,424,276 ($327,803) ($3,591,968) ($8,490,739)1819 Reserve Target20 Operating $2,969,267 $2,438,018 $2,535,753 $2,637,651 $2,743,89721 Capital $2,626,406 $3,570,224 $3,203,624 $3,203,624 $3,203,62422 Rate Stabilization $537,500 $537,706 $538,490 $539,276 $540,06423 Emergency $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,00024 Total $7,633,172 $8,045,948 $7,777,868 $7,880,551 $7,987,585

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Figure 2-1 shows debt coverage with no revenue adjustments in graphical format. Without revenue adjustments,the City’s water utility will not meet its debt coverage target of 1.25, potentially resulting in technical default in FY2023.

Figure 2-1: Debt Coverage (No Revenue Adjustments)

Figure 2-2 shows the financial plan in graphical format. The grey bars represent the O&M expenses, which includewater supply costs. The yellow bars represent annual debt service for the 2010 water bonds, and the rate fundedcapital costs are shown as blue bars. The green bars, which represent net cash flow, are negative for all years of thestudy, signifying that the City is drawing down reserves for all years. The blue line shows current revenues withoutrevenue adjustments, which are not sufficient to fund all operating and capital costs.

Figure 2-2: Financial Plan (No Revenue Adjustments)

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Figure 2-3 shows the City’s projected water fund ending balances as the blue bars and the recommended reservetarget as the orange line. The City’s water reserves are decreasing significantly over the study period withoutrevenue adjustments, falling below the recommended reserve target in FY 2024.

Figure 2-3: Projected Ending Balances (No Revenue Adjustments)

Proposed Financial PlanAs shown in the previous section, the City will fall below its debt service coverage target and recommended reservetargets without revenue adjustments. Table 2-20 shows the recommended revenue adjustments to meet all targetsfor each year of the study period, fund O&M expenses, and a portion of capital-related costs.

Table 2-20: Proposed Revenue AdjustmentsA B C D

Line Year Month Revenue Adjustment1 FY 2021 January 4.0%2 FY 2022 January 4.0%3 FY 2023 January 4.0%4 FY 2024 January 4.0%5 FY 2025 January 4.0%

To mitigate customer impacts and maintain adequate reserves, the City plans to refinance the existing $11.95million 2010 water bonds in early 2021 and issue an additional $5.5 million in new debt to fund its capital projectcosts. The proposed financial plan includes an additional $4.5 million in debt to be issued in FY 2024 to fundcapital expenses. The City is planning to apply for grants and Water Infrastructure Finance and Innovation Act(WIFIA) loans to mitigate the need for the second debt issue.

Table 2-21 shows the proposed financial plan with the revenue adjustments shown in Table 2-20. The net cashflow (Line 27) is still negative for all years of the study, which results in the reduction of the City’s water fundbalances over time to align more closely with the recommended reserve targets. Calculated debt coverage (Line 29)is well above target (Line 30) for all years.

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Table 2-22 shows the projected fund balances with revenue adjustments. The City will meet recommended reservetarget levels for all years of the study, while slowly reducing its initial reserve levels each year. The proposedrevenue adjustments allow the City’s water utility to be financially sufficient, while aiming to minimize customerimpacts.

Table 2-21: Projected Financial Plan (Proposed Adjustments)A B C D E F G

Line Projected Financial Plan FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Revenues2 Rate Revenues $10,750,000 $10,754,126 $10,769,810 $10,785,525 $10,801,27134 Revenue Adjustments5 FY 2021 - 4.0% $215,000 $430,165 $430,792 $431,421 $432,0516 FY 2022 - 4.0% $223,686 $448,024 $448,678 $449,3337 FY 2023 - 4.0% $232,973 $466,625 $467,3068 FY 2024 - 4.0% $242,645 $485,9989 FY 2025 - 4.0% $252,71910 Total - Revenue Adjustments $215,000 $653,851 $1,111,789 $1,589,369 $2,087,4081112 Total Rate Revenues $10,965,000 $11,407,977 $11,881,599 $12,374,893 $12,888,67913 Transfers In $2,500,000 $0 $0 $0 $014 All Other Operating Revenues $237,000 $237,000 $237,000 $237,000 $237,00015 Interest Income $23,264 $31,044 $37,695 $40,149 $39,23016 Total - Revenues $13,725,264 $11,676,021 $12,156,294 $12,652,043 $13,164,9081718 Expenses19 O&M Expenses (less Water Supply) $8,350,726 $6,049,413 $6,255,222 $6,468,423 $6,689,30020 Water Supply Cost $3,526,341 $3,702,658 $3,887,791 $4,082,181 $4,286,29021 Existing Debt Service $985,313 $0 $0 $0 $022 Proposed Debt Service $0 $948,780 $948,780 $1,193,451 $1,193,45123 Rate Funded Capital Projects $1,972,500 $0 $0 $0 $1,598,52924 Total - Expenses $14,834,879 $10,700,851 $11,091,793 $11,744,054 $13,767,5692526 Net Operating Revenue $1,848,197 $1,923,950 $2,013,281 $2,101,439 $2,189,31927 Net Cash Flow ($1,109,616) $975,170 $1,064,501 $907,988 ($602,660)2829 Calculated Debt Coverage 1.88 2.03 2.12 1.76 1.8330 Debt Coverage Target 1.25 1.25 1.25 1.25 1.25

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Table 2-22: Projected Ending Balances (Proposed Adjustments)A B C D E F G

Line Water Fund Projected Balances FY 2021 FY 2022 FY 2023 FY 2024 FY 20251 Beginning Balance $5,314,103 $4,204,487 $8,497,657 $6,925,758 $9,501,89023 Sources of Funds4 Rate Revenues $10,965,000 $11,407,977 $11,881,599 $12,374,893 $12,888,6795 Transfers In $2,500,000 $0 $0 $0 $06 All Other Operating Revenues $237,000 $237,000 $237,000 $237,000 $237,0007 Debt Proceeds $0 $5,151,000 $0 $4,410,000 $08 Interest Income $23,264 $31,044 $37,695 $40,149 $39,2309 Total - Sources of Funds $13,725,264 $16,827,021 $12,156,294 $17,062,043 $13,164,9081011 Uses of Funds12 O&M Expenses $11,877,067 $9,752,071 $10,143,013 $10,550,604 $10,975,58913 Debt Service $985,313 $948,780 $948,780 $1,193,451 $1,193,45114 Capital Projects $1,972,500 $1,833,000 $2,636,400 $2,741,856 $3,948,27315 Total - Uses of Funds $14,834,879 $12,533,851 $13,728,193 $14,485,910 $16,117,3131617 Ending Balances $4,204,487 $8,497,657 $6,925,758 $9,501,890 $6,549,4861819 Reserve Target20 Operating $2,969,267 $2,438,018 $2,535,753 $2,637,651 $2,743,89721 Capital $714,206 $1,658,024 $1,658,024 $1,658,024 $1,658,02422 Rate Stabilization $548,250 $570,399 $594,080 $618,745 $644,43423 Emergency $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,00024 Total $5,731,722 $6,166,441 $6,287,857 $6,414,420 $6,546,355

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Figure 2-4 shows the proposed debt service coverage under the proposed revenue adjustments of 4% per year. Debtservice coverage is projected to exceed targets for all years of the study.

Figure 2-4: Debt Coverage (Proposed Adjustments)

Figure 2-5 shows the operating financial plan with proposed revenue adjustments. The net cash flow shown asgreen bars below the X-axis, represent drawdown off the reserves whereas above the X-axis it supplements thereserves.

Figure 2-5: Financial Plan (Proposed Adjustments)

Figure 2-6 shows the projected water fund ending balances with the proposed revenue adjustments. The City isexpected to meet or exceed its recommended reserve target levels for all years of the study.

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Figure 2-6: Projected Ending Balances (Proposed Adjustments)

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3 Cost of Service AnalysisThis section of the report will document the cost of service (COS) analysis process for the City’s water utility. Thegoal of a COS analysis is to allocate the revenue requirement to all customer classes and tiers based on theirproportion of usage in and burden on the system. Numbers shown in this section of the report are rounded.Therefore, hand calculations based on the displayed numbers, such as summing or multiplying, may not equal theexact results shown in this report.

Process and ApproachThe first step in the COS analysis process is to determine the revenue requirement, which is based on the results ofthe financial plan and the proposed revenue adjustments. The framework and methodology utilized to develop theCOS analysis and apportion the revenue requirement to each customer class and tier is informed by the processesoutlined in the M1 Manual.

COS analyses are tailored specifically to meet the unique needs of each utility. However, there are four distinctsteps in every analysis to recover costs from customer classes in accurate, equitable, and defensible manner:

1. Cost functionalization: O&M expenses and capital assets are categorized by their function in the system.Functions include supply, production, T&D, customer service, billing, etc.

2. Cost causation component allocation: the functionalized costs are then allocated to cost causationcomponents based on their burden on the system. The cost causation components include supply, peaking,delivery, meter, customer, etc. The revenue requirement is allocated accordingly to the cost causationcomponents and results in the total revenue requirement for each cost causation component.

3. Unit cost development: the revenue requirement for each cost causation component is divided by theappropriate units of service to determine the unit cost for each cost causation component.

4. Revenue requirement distribution: the unit cost is utilized to distribute the revenue requirement for eachcost causation component to customer classes and tiers based on their individual service units. The City’scustomer classes include SFR, MFR, commercial/industrial, irrigation/landscaping, etc.

Revenue RequirementTable 3-1 shows the revenue requirement, which is equal to the total revenue required from rates, for FY 2021, thetest or rate-setting year. The revenue requirement is split into the Operating and Capital categories (Columns C andD), which are then allocated based on O&M expenses and capital assets, respectively.

The revenue requirement is calculated using the FY 2021 expenses (Lines 1-7), which includes O&M expenses,water supply cost, existing debt service, and rate funded capital projects. The revenue offsets (Lines 9-13) are thevarious miscellaneous, non-rate revenues that can are used to offset the revenue requirement. The adjustments areto annualize the rate increase (Line 16) due to the mid-year proposed revenue adjustment occurring in January andto adjust for the cash balance (Line 17), which is equal to the net cash flow for FY 2021 (Table 2-21, Column D,Line 27). The final revenue requirement (Line 20) is calculated as follows:

Revenue requirements (Line 7) - Revenue offsets (Line 13) - Adjustments (Line 18)

The total revenue requirement excluding revenue offsets is shown in Line 21, as it is referenced in subsequentreport subsections to determine cost allocations.

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Table 3-1: Proposed Revenue Requirement

A B C D ELin

eRevenue Requirement (FY 2021) Operating Capital Total

1 Revenue Requirements2 O&M Expenses (less Water Supply Cost) $8,350,726 $0 $8,350,7263 Water Supply Cost $3,526,341 $0 $3,526,3414 Existing Debt Service $0 $985,313 $985,3135 Proposed Debt Service $0 $0 $06 Rate Funded Capital Projects $0 $1,972,500 $1,972,5007 Total - Revenue Requirements $11,877,067 $2,957,813 $14,834,87989 Revenue Offsets10 Transfers In $0 $2,500,000 $2,500,00011 All Other Operating Revenues $237,000 $0 $237,00012 Interest Income $23,264 $0 $23,26413 Total - Revenue Offsets $260,264 $2,500,000 $2,760,2641415 Less Adjustments16 Adjustments to Annualize Rate Increase ($215,000) $0 ($215,000)17 Adjustments for Cash Balance $1,109,616 $0 $1,109,61618 Total - Less Adjustments $894,616 $0 $894,6161920 Total Revenue Required from Rates $10,722,188 $457,813 $11,180,00021 Without Revenue Offsets $10,982,451 $2,957,813 $13,940,264

Functionalization and Allocation of ExpensesAfter determining the revenue requirement, the next step in a COS analysis is to allocate the O&M expenses andcapital assets to the following functions:» Administration – represents costs of administration of the water utility» Billing – represents costs of meter reading, billing and collecting charges from water customers» Customer Service – represents costs of providing customer service to water customers» Supply – represents costs of procuring water supplies from CIC and TVMWD» Production – represents costs of water production» Storage – represents costs of storing water in tanks, reservoirs, etc.» Pumping – represents costs of pumping water to customers» T&D – represents costs of the T&D system» Pipelines – represents costs of purchasing, operating, repair, and maintenance of pipelines» Fire Hydrants – represents costs of public fire protection» Treatment – represents costs of water treatment» Capital – represents capital-related costs including fiscal agent fees» General – represents costs for general operational expenses which cannot be categorized under any of the

above

The functionalization of costs allows for the allocation of costs to the cost causation components, which include:» Supply – costs associated with procuring water supplies from CIC and TVMWD

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» Base Delivery – costs associated with providing water under average conditions» Peaking (Max Day and Max Hour) – costs associated with providing water under peak demand conditions» Meter – costs associated with purchasing, maintaining, and servicing water meters» Customer – costs associated with customer service and billing» Offset – revenue offsets with no direct association to rates, such as interest income» General – costs that do not have any direct cost causation

Peaking costs are divided into maximum day (Max Day) and maximum hour (Max Hour) demand. The Max Daydemand is the maximum amount of water used in a single day in a year. The Max Hour demand is the maximumusage in an hour on the Max Day. Different facilities, such as distribution and storage facilities, are designed tomeet the peaking demands of customers. Therefore, peaking costs, also known as extra capacity costs, areassociated with meeting peak customer demand.

Peaking FactorsTable 3-2 shows the system-wide peaking factors used to derive the cost component allocation bases for BaseDelivery, Max Day, and Max Hour costs. The Base Delivery, or Base use is considered average daily demandduring the year, which has been normalized to a factor of 1.00 (Column C, Line 1). The Max Day peaking factor(Column C, Line 2) represents that the Max Day demand is 1.60 times greater than the average daily demand.Similarly, the Max Hour peaking factor (Column C, Line 3) shows that the Max Hour demand is 2.70 timesgreater than average demand.

The allocation bases (Columns D to F) are calculate using the equations outlined in this section. Columns arerepresented in these equations as letters, and rows are represented as numbers. For example, Column D, Line 2 isshown as D2.

The Max Day allocations are calculated as follows:» Base Delivery: C1 / C2 x 100% = D2» Max Day: (C2 - C1) / C2 x 100% = E2

The Max Hour allocations are calculated as follows:» Base Delivery: C1 / C3 x 100% = D3» Max Day: (C2 - C1) / C3 x 100% = E3» Max Hour: (C3 - C2) / C3 x 100% = F3

The average between Max Day and Max Hour (Line 4) is equal to the average of the allocation bases for Max Day(Columns D to F, Line 2) and Max Hour (Columns D to F, Line 3).

Table 3-2: System Peaking Factor AllocationsA B C D E F G

Line Allocation Factor Peaking Factor Base Max Day Max Hour Total1 Base 1.00 100.0% 0.0% 0.0% 100.0%2 Max Day 1.60 62.5% 37.5% 0.0% 100.0%3 Max Hour 2.70 37.0% 22.2% 40.7% 100.0%4 Average Max Day&Max Hour 49.8% 29.9% 20.4% 100.0%

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Table 3-3 shows the peaking factors by customer class and tier (Column F), which are calculated by dividingmaximum month usage (Column D) by average month usage (Column E). The resulting peaking factor is used as aproxy for Max Day peaking factors because Max Day usage data at the customer level is not readily available3. Thetiers for SFR and MFR are the proposed tiers widths, with the first Tier equal to average usage for SFR. SFR andMFR4 customers have tier-specific peaking factors (Column F, Lines 2-3 and 5-6). All other customers are chargeda uniform rate and therefore have a class-specific peaking factor.

Table 3-3: Peaking Factors by Customer ClassA B C D E F


Max Month Average Month Peaking Factor

1 Single Family2 Tier 1 0-14 CCF 76,539 65,612 1.173 Tier 2 15+ CCF 50,174 27,001 1.864 Multi-Family5 Tier 1 0-14 CCF 8,553 8,361 1.026 Tier 2 15+ CCF 25,808 22,329 1.167 Commercial/Institutional 45,486 37,038 1.238 Industrial/Manufacturing 665 494 1.239 Irrigation/Landscaping 3,719 2,406 1.5510 City/Miscellaneous 4,138 2,279 1.2311 Construction 857 415 2.06

Equivalent MetersEquivalent meter units are used to allocate meter-related costs appropriately and equitably. Larger meters imposelarger demands; are more expensive to install, maintain, and replace than smaller meters; and commit a greatercapacity in the water system.

Equivalent meter units are based on meter hydraulic capacity and are calculated to represent the potential demandon the water system compared to a base meter size. A ratio of hydraulic capacity is calculated by dividing largermeter capacities by the base meter capacity. The base meter in this study is the 5/8” and 3/4" meters, the smallestmeter size, the City characterizes both meters together.

Table 3-4 shows the equivalent meters for the test year, FY 2021. The actual number of meters (Column E) isderived from the customer account projections for FY 2021 (Table 2-3, Column F) less hydrant meters.

The capacity in gallons per minute (gpm) is based on data from the M1 Manual (Column C). The capacity ratios(Column D) are calculated by dividing the capacity for each meter size by the capacity for the 3/4" meter. Theactual number of numbers (Column E) is multiplied by the capacity ratios (Column D) to determine the number ofequivalent meters (Column F).

3 This method of determining peaking factors is reasonable because we are interested in the relative peaking factors forthe different classes of customers.4 We investigated the option of tiered rates for MFR customers but decided to implement uniform rates .

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Table 3-4: Equivalent MetersA B C D E F

Line Meter Size Capacity (gpm) AWWA RatioNumber of

MetersEquivalent

Meters1 5/8" and 3/4" 30 1.00 6,511 6,5112 1" 50 1.70 1,403 2,3853 1-1/2" 100 3.30 280 9234 2" 160 5.30 240 1,2745 3" 350 11.70 19 2236 4" 630 21.00 13 2737 6" 1,400 46.70 2 938 Total - Meters 8,468 11,682

Similar to equivalent water meters, private fire line and public fire hydrant counts are also converted to equivalentlines based on fire line capacities. Table 3-5 shows the equivalent lines for private fire lines, and Table 3-6 showsthe equivalent lines for public fire hydrants. Private fire line counts are derived from the customer accountprojections for FY 2021 (Table 2-3, Column F, Lines 67-83). City staff provided public fire hydrant data.

The fire line capacity ratios are determined based on the Hazen-Williams equation for flow through pressureconduits, as explained in the M1 Manual. The flow potential is dependent on the diameter of the fire line raised tothe power of 2.63. Therefore, the fire line capacity ratio for each line size is normalized based on the capacity of a6” fire line.

For example, the equation used to calculate the fire ratio for a 4” meter is as follows:

(4” line / 6” line)2.63 = 0.34

The fire capacity ratio for a 6” public fire hydrant that is a compound of one 4.5” outlet and one 2.5” outlet iscalculated as follows:

(4.5” line / 6” line) 2.63 + (2.5” line / 6” line) 2.63 = 0.57

Table 3-5: Equivalent Private Fire LinesA B C D E

Line Fire Line SizeFire Capacity

RatioNumber of

LinesEquivalent

Lines1 2" 0.06 12 12 3" 0.16 1 03 4" 0.34 71 244 6" 1.00 64 645 8" 2.13 12 266 10" 3.83 2 87 Total - Fire Lines 162 123

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Table 3-6: Equivalent Public Fire LinesA B C D E

Line Hydrant Size Fire RatioNumber of

HydrantsEquivalent

Lines1 6": 1 x 4.5", 1 x 2.5" 0.57 1,035 5892 4": 1 x 2.5" 0.10 57 63 Total - Public Fire Hydrants 1,092 595

Operating AllocationTable 3-7 shows the allocation of O&M expenses to each cost component. O&M expenses are used in the COSanalysis to allocate the Operating revenue requirement without revenue offsets (Table 3-1, Column C, Line 21).The operating functions (Column B) are allocated based on a percentage (Lines 2-9) for each cost component basedon the nature of each function. Then the percentages for each cost component are multiplied by the O&M costs(Lines 11-19) to determine the total allocation of O&M expenses to each cost component (Line 20).

Administration and General costs are allocated fully to the General cost component (Column K) because thesecosts do not have a direct cost causation to the other cost components. Billing and Customer Service are allocatedfully to the Customer cost component (Column I) because these costs are incurred to provide billing and customerservice to water customers. Supply costs are allocated fully to the Supply cost component (Column D) becausethese are costs associated with procuring water from CIC and TVMWD.

Production facilities and the costs associated with them are designed to withstand Max Day demands and areallocated to the cost components based on the Max Day peaking factor allocations (Table 3-2, Line 2).Transmission and distribution facilities and the costs associated with those facilities are designed to withstand MaxHour demands. The operating costs associated with this function are allocated to the cost components based on theMax Hour peaking factor allocations (Table 3-2, Line 3). Capital costs are allocated based on the capital assetallocation (Table 3-8, Line 14).

The total O&M costs (Column L, Lines 11-18) are allocated to each of the cost components based on thepercentages described previously. This process results in the dollar amount of the O&M expenses in each costcomponent (Line 19). The proportion of costs in each cost component of the total O&M costs is equal to the O&Mallocation percentage (Line 20). Note that the total O&M cost is equal to the projected O&M expenses in FY 2021(Table 2-14, Column C, Line 114) and the operating revenue requirement (Table 3-1, Column C, Line 7).

A detailed operating cost allocation is shown in the Appendix of this report.

Capital AllocationTable 3-8 shows the allocation of capital assets to each cost component. Capital assets are utilized in COS analysesto allocate capital costs because annual capital project costs can fluctuate greatly from year to year. Capital assetsremain relatively stable and are more representative of the City’s investments in its water utility. The capital assetsare allocated in a similar manner to the O&M expenses: each capital function is allocated to each cost componentusing a percentage based on the nature of that function, then the allocation percentages for each function ismultiplied by the capital asset value for that function to determine the asset allocation for each cost component.

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City staff provided asset information and values in Replacement Cost Less Depreciation (RCLD). RCLD is oftenutilized in capital asset analyses because it is defensible; RCLD takes into consideration inflation and depreciationwhen valuing assets.

Storage and Treatment facilities are designed to provide service during periods of Max Day demand and areallocated based on the Max Day peaking factor allocations (Table 3-2, Line 2). Pumping facilities and FireHydrants are sized to accommodate service during the periods of highest demand and are allocated based on theMax Hour peaking factor allocations (Table 3-2, Line 3). Some pipelines are designed for Max Day, while othersare designed for Max Hour demands. Since the exact proportion between the different types of pipelines are notavailable, the average Max Day and Max Hour peaking factor allocations (Table 3-2, Line 4) are used to allocatePipeline-related assets.

The resulting capital asset allocation (Line 14) is used to allocate the Capital revenue requirement without revenueoffsets (Table 3-1, Column D, Line 21).

Revenue Offset AllocationTable 3-9 shows the revenue offset allocation to each cost component. Revenue offsets are miscellaneous, non-raterevenues that are used to offset the revenue requirement. A portion of these revenues are not directly linked to anyservice that the City provides to its water customers and can be used at the City’s discretion to provide offsets tospecific customer classes and tiers.

Interest income (Line 2) is one such revenue and is allocated to the Offset cost component to offset Tier 1 rates forresidential customers. Section 106 of the Water Code declares that the highest priority use of water is for domesticpurposes, with irrigation secondary. To meet the objectives of Article X, section 2, Water Code section 375 et seq.,a water purveyor may utilize its water rate design to incentivize the efficient use of water. Based on Article X,Section 2 of the California Constitution, public agencies are constitutionally mandated to maximize the beneficialuse of water, prevent waste, and encourage conservation. The beneficial use of water includes indoor usage, whichprovides clean water for drinking and sanitation to the City’s residents. Interest income is an offset for residentialTier 1 usage, the majority of which is for indoor uses.

The remaining revenue offsets (Line 3) are allocated to the cost components based on the O&M allocation (Table3-7, Line 23). Note that the total revenue offset amount (Column L, Line 7) is equal to the revenue offset portion ofthe revenue requirement (Table 3-1, Column E, Line 13) and the non-rate revenues for FY 2021 (Table 2-21,Column C, Lines 13-15).

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Table 3-7: Operating Cost AllocationA B C D E F G H I J K L

Line Operating Functions Rationale SupplyBase

DeliveryMaxDay

MaxHour

Meter Customer Offset General Total

1 Percent Allocation2 Administration General 100.0% 100.0%3 Billing Customer 100.0% 100.0%4 Customer Service Customer 100.0% 100.0%5 Meter Meter/Customer 100.0% 100.0%6 Supply Supply 100.0% 100.0%7 Production Max Day 62.5% 37.5% 100.0%8 T & D Max Hour 35.2% 21.1% 38.7% 100.0%9 General General 100.0% 100.0%10 Capital Capital 0.0% 49.0% 29.4% 18.9% 2.7% 0.0% 0.0% 0.0% 100.0%1112 Cost Allocation13 Administration $0 $0 $0 $0 $0 $0 $0 $1,405,973 $1,405,97314 Billing $0 $0 $0 $0 $0 $212,841 $0 $0 $212,84115 Customer Service $0 $0 $0 $0 $0 $251,421 $0 $0 $251,42116 Meter $0 $0 $0 $0 $130,107 $130,107 $0 $0 $260,21417 Supply $3,933,554 $0 $0 $0 $0 $0 $0 $0 $3,933,55418 Production $0 $558,363 $335,018 $0 $0 $0 $0 $0 $893,38119 T & D $0 $413,013 $247,808 $454,314 $58,691 $0 $0 $0 $1,173,82520 General $0 $0 $0 $0 $0 $0 $0 $3,741,168 $3,741,16821 Capital $0 $2,298 $1,379 $887 $126 $0 $0 $0 $4,69022 Total $3,933,554 $973,673 $584,204 $455,201 $188,925 $594,369 $0 $5,147,141 $11,877,06723 O&M Allocation 33.1% 8.2% 4.9% 3.8% 1.6% 5.0% 0.0% 43.3% 100.0%

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Table 3-8: Capital Cost AllocationA B C D E F G H I J K L

Line Capital Functions Rationale SupplyBase

DeliveryMax Day Max Hour Meter Customer Offset General Total

1 Percent Allocation2 Storage Max Day 62.5% 37.5% 100.0%3 Pumping Max Hour 37.0% 22.2% 40.7% 100.0%4 Pipelines Avg. MD/MH 47.3% 28.4% 19.4% 5.0% 100.0%5 Fire Hydrants Max Hour 37.0% 22.2% 40.7% 100.0%6 Treatment Max Day 62.5% 37.5% 100.0%7 Cost Allocation8 Storage $0 $14,510,938 $8,706,563 $0 $0 $0 $0 $0 $23,217,5009 Pumping $0 $4,675,926 $2,805,556 $5,143,519 $0 $0 $0 $0 $12,625,00010 Pipelines $0 $23,603,702 $14,162,221 $9,661,050 $2,496,157 $0 $0 $0 $49,923,13011 Fire Hydrants $0 $2,483,796 $1,490,278 $2,732,176 $0 $0 $0 $0 $6,706,25012 Treatment $0 $146,094 $87,656 $0 $0 $0 $0 $0 $233,75013 Total $0 $45,420,456 $27,252,273 $17,536,745 $2,496,157 $0 $0 $0 $92,705,630

14 Capital Asset Allocation 0.0% 49.0% 29.4% 18.9% 2.7% 0.0% 0.0% 0.0% 100.0%

Table 3-9: Revenue Offset AllocationA B C D E F G H I J K L

LineRevenue OffsetFunctions

Rationale SupplyBase

DeliveryMaxDay

MaxHour


1 Percent Allocation2 Interest Offset 100.0% 100.0%3 All Other Revenues O&M 33.1% 8.2% 4.9% 3.8% 1.6% 5.0% 0.0% 43.3% 100.0%4 Cost Allocation5 Interest $0 $0 $0 $0 $0 $0 $23,264 $0 $23,2646 All Other Revenues $906,464 $224,377 $134,626 $104,898 $43,537 $136,969 $0 $1,186,128 $2,737,0007 Total $906,464 $224,377 $134,626 $104,898 $43,537 $136,969 $23,264 $1,186,128 $2,760,264

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Units of ServiceThe next step in the COS analysis to determine the appropriate units of service to calculate the unit costs for eachcost component. Table 3-10 shows the units of service calculation for all customer classes and tiers.

The annual water usage in CCF (Column D) is equal to the projected customer demand in FY 2021 (Table 2-4,Column F, Line 21) less fire protection usage. The annual water usage for SFR and MFR customers (Column D,Lines 1-6) is equal to the total projected water usage in these classes for FY 2021. However, the estimated usage ineach tier is calculated based on the recommended Tier 1 width of 14 CCF, based on average SFR monthly usage.

The average daily use (Column E) is calculated by dividing the annual water usage for each customer class and tierby 365 days.

The Max Day capacity factors (Column F) are equal to the class- and tier-specific peaking factors (Table 3-3,Column F). The total Max Day capacity (Column G) is equal to the average daily use (Column E) multiplied bythe capacity factor (Column F). The Max Day extra capacity (Column H) is equal to the total Max Day capacity(Column G) less average daily use (Column E).

The Max Hour capacity factors (Column I) are calculated by multiplying the class- and tier-specific Max Daycapacity factors (Column F) by the proportional increase between the system-wide Max Day peaking factor (Table3-2, Column C, Line 2) and the system-wide Max Hour Peaking factor (Table 3-2, Column C, Line 3). The MaxHour capacity factors (Column I) are multiplied by the average daily use (Column E) to determine the total MaxHour capacity (Column J). The extra Max Hour capacity (Column K) is equal to the total Max Hour capacity(Column J) less the total Max Day capacity (Column G).

The equivalent meters (Column L, Lines 1-11) is from Table 3-4. The equivalent fire lines (Column L, Lines 12-13)is from Table 3-5. The number of customers for each customer class is equal to the projected number of customeraccounts for FY 2021 (Table 2-3, Column F) less Construction accounts. Construction customers only pay for theamount of water used and are charged separately for meters and therefore omitted in the customer calculations.

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Table 3-10: Units of ServiceA B C D E F G H I J K L M

Max Day Max Hour


Tiers(CCF)

AnnualUse

(CCF)

AverageDaily Use

(CCF/day)

CapacityFactor

TotalCapacity

(CCF/day)

ExtraCapacity

(CCF/day)

CapacityFactor

TotalCapacity

(CCF/day)

ExtraCapacity

(CCF/day)

EquivalentMeters /

LinesCustomers

1 Single Family 1,118,044 7,441 6,7212 Tier 1 14 792,083 2,170 1.17 2,531 361 1.97 4,272 1,740 0 03 Tier 2 14+ 325,961 893 1.86 1,659 766 3.14 2,800 1,141 0 04 Multi-Family 370,490 1,323 6465 Tier 1 14 100,937 277 1.02 283 6 1.73 477 194 0 06 Tier 2 14+ 269,553 739 1.16 854 115 1.95 1,440 587 0 07 Commercial/Institutional 444,453 1,218 1.23 1,497 280 2.08 2,527 1,029 2,258 9078 Industrial/Manufacturing 5,922 16 1.23 20 4 2.08 34 14 80 469 Irrigation/Landscaping 28,875 79 1.55 122 43 2.61 206 84 194 64

10 City/Miscellaneous 27,353 75 1.23 92 17 2.08 156 63 386 8411 Construction 4,984 14 2.06 28 15 3.48 48 19 0 012 Fire - Commercial 117 14013 Fire - Residential 5 2214 Total 2,000,121 5,480 7,087 1,608 11,960 4,873 11,805 8,630

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The Max Day and Max Hour extra capacity shown in Table 3-10 represents the extra capacity required in thewater system to serve customers under peak demands. However, these amounts only account for peaks asdemanded by customers and does not include additional capacity required for fire.

Table 3-11 shows the estimates for additional fire capacity, as outlined in the M1 Manual. The fire capacityestimate assumes a four-hour fire at 5,000 gallons per minute (Column C, Lines 1-2).

The cost to public fire is a percentage based on the proportion of equivalent public fire capacity compared to totalequivalent fire capacity (which includes private fire line capacity). The percentage is calculated as follows:

Equivalent public fire lines (Table 3-6, Column E, Line 3) / [Equivalent public fire lines + Equivalent private fire lines (Table3-5, Column E, Line 7)] = Percent allocated to Public Fire

The total Max Day capacity demanded for fire (Column C, Line 8) is calculated as follows, with lettersrepresenting columns and numbers representing rows:

C2 kgals/min * 60 min/hour * C1 hours * 1000 gals / 748 gals/CCF

The total Max Hour capacity demanded for fire (Column D, Line 8) is calculated as follows:

[D2 kgals/min * 60 min/hour * 24 hours/day * 1000 gals /748 gals/CCF] - C8 CCF

The total Max Day and Max Hour capacities demanded for fire are then allocated between public fire (Line 6) andprivate fire (Line 7) based on the previously calculated percentage (Line 3). The total fire capacity (Line 8) is thenadded to the system Max Day and Max Hour capacities (Table 3-10, Columns H and K, Line 14) to determine thetotal capacity (Line 10) required to meet customer demand and fire protection.

The percent allocation to public fire (Line 13) is equal to the public fire capacity (Line 6) divided by the totalcapacity (Line 10) for Max Day and Max Hour demands. The same methodology is used to determine the percentallocation to private fire (Line 14). These allocation percentages are used later in this section of the report toallocate a portion of Max Day and Max Hour costs to public and private fire protection.

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Table 3-11: Fire Capacity EstimatesA B C D

Line Fire Estimate Max Day Max Hour1 Hours for Fire 4.02 kgals/minute 5.0 5.03 Cost to Public Fire 82.9% 82.9%45 Capacity Demanded for Fire (CCF)6 Public Fire 1,330 6,6517 Private Fire 274 1,3708 Total Fire Capacity 1,604 8,0219 System Capacity 1,605 4,86510 Total Capacity 3,209 12,8871112 Percent Allocation to Fire13 Public Fire 41.5% 51.6%14 Private Fire 8.5% 10.6%

Unit Cost DerivationTable 3-12 shows the adjustments to the cost of service between certain cost components, namely, Base Deliveryand Peaking costs to the Meter component. A portion of Base Delivery and Peaking costs (which are fixed costs)are allocated to the Meter component to maintain the current fixed to variable revenue recovery percentage (Lines3-4) and to account for costs within the Base Delivery and Peaking cost components that are related to meterservicing, purchasing, or maintenance.

Table 3-12: Adjustments to Cost of ServiceA B C

Line Adjustments Percentage1 Base to Meter 12.5%2 Peak to Meter 95.0%3 Current Fixed Revenue 46.2%4 Proposed Fixed Revenue 46.3%

Table 3-13 shows the unit cost of service calculation for each cost component. The operating revenue requirement(Column L, Line 1) is allocated based on the O&M allocation (Table 3-7, Line 23) and is equal to the operatingrevenue requirement less revenue offsets (Table 3-1, Column C, Line 21). The capital revenue requirement(Column L, Line 2) is allocated based on the capital asset allocation (Table 3-8, Line 14) and is equal to the capitalrevenue requirement less revenue offsets (Table 3-1, Column D, Line 21). The revenue offsets (Column L, Line 3)for each cost component is from Table 3-9.

The total cost of service (Line 4) is calculated by adding the operating and capital revenue requirements andrevenue offsets for each cost component (Lines 1-3).

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The total cost of service is then adjusted in the five ways outlined:1. Allocation of General cost: General costs are allocated to the Base Delivery, Max Day, Max Hour, and

Meter cost components based on proportion of the cost of service for each of these components. TheSupply cost component is omitted because this represents only the cost of procuring water supply fromCIC and TVMWD.

2. Allocation to Public Fire: A portion of Max Day and Max Hour costs are allocated to Meter based on thepublic fire percent allocation (Table 3-11, Line 13). Public fire protection is a general benefit to allcustomers and is collected on the service charge.

3. Allocation to Private Fire: A portion of Max Day and Max Hour costs are allocated to Private Fire basedon the private fire percent allocation (Table 3-11, Line 14).

4. Allocation of Base to Meter: A portion of Base costs are allocated to Meter per Table 3-12.5. Allocation of Peak to Meter: A portion of Max Day and Max Hour costs are allocated to meter per Table

3-12.

The total adjusted cost of service (Line 10) is equal to the sum of the total cost of service (Line 4) and alladjustments (Lines 5-9) for each cost component. The total adjusted cost of service is then divided by each costcomponent’s units of service (Line 12) to determine the unit cost by cost component (Line 15).

The Supply and Base Delivery units of service (Columns C and D, Line 12) are equal to water usage in CCF(Table 3-10, Column D, Line 14). The Max Day and Max Hour units of service (Columns E and F, Line 12) areequal to the extra capacity for the respective cost components (Table 3-10, Columns H and K, Line 14). ThePrivate Fire, Meter, and Customer units of service (Columns G through I) are equivalent lines, equivalent meters,and customer bills per year, respectively. Equivalent lines, equivalent meters, and customer bills per year is equal tothe number of equivalent lines, equivalent meters, and customer accounts multiplied by 12 billing periods per year.

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Table 3-13: Unit Cost of Service by Cost ComponentA B C D E F G H I J K LLine

Cost of Service Allocation SupplyBase

DeliveryMax Day Max Hour

PrivateFire


1 Operating Rev Req $3,637,267 $900,333 $540,200 $420,914 $174,694 $549,599 $0 $4,759,443 $10,982,4512 Capital Rev Req $0 $1,449,159 $869,495 $559,517 $79,641 $0 $0 $0 $2,957,8133 Revenue Offsets ($906,464) ($224,377) ($134,626) ($104,898) ($43,537) ($136,969) ($23,264) ($1,186,128) ($2,760,264)4 Total - Cost of Service $2,730,803 $2,125,115 $1,275,069 $875,533 $0 $210,799 $412,631 ($23,264) $3,573,315 $11,180,0005 Allocation of General Cost $1,550,006 $930,004 $638,592 $153,751 $300,962 ($3,573,315) $06 Allocation to Public Fire ($913,294) ($781,058) $1,694,352 $07 Allocation to Private Fire ($188,128) ($160,889) $349,016 $08 Allocation of Base to Meter ($459,390) $459,390 $09 Allocation of Peak to Meter ($1,048,469) ($543,569) $1,592,037 $010 Total - Adj. Cost of Service $2,730,803 $3,215,731 $55,183 $28,609 $349,016 $4,110,329 $713,593 ($23,264) $0 $11,180,0001112 Unit of Service 2,000,121 2,000,121 1,608 4,873 1,470 140,184 103,562 893,020

13 Unit CCF CCF CCF/day CCF/dayequiv.line/yr

equiv.meter/yr

bills/yrCCF inTier 1

1415 Unit Cost $1.37 $1.61 $34.33 $5.87 $237.35 $29.32 $6.89 ($0.03)

16 Unit CCF CCF CCF/day CCF/dayequiv.

line/moequiv.

meter/mobills/mo CCF

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Cost of Service by Customer ClassTable 3-14 shows the cost of service by customer class and tier. The dollar amounts shown are calculated bymultiplying the unit cost by cost component (Table 3-13, Line 15) by the corresponding units of service for eachcustomer class or tier shown in Table 3-10.

Supply and Base Delivery costs are allocated to each customer class and tier based on the water usage in each classand tier. Max Day and Max Hour costs are allocated to each customer class based on the Max Day and Max Hourextra capacity demanded, respectively, from each customer class and tier. Private Fire costs are allocated tocustomers based on the number of equivalent fire lines for each customer class. Meter costs are allocated to eachcustomer class based on the number of equivalent meters in each class. Customer costs are allocated based on thenumber of customer bills in each class. Offsets (Column J) are reserved only for Residential Tier 1 usage and areallocated to SFR and MFR Tier 1 based on the usage in these tiers and the Offset unit cost (Table 3-13, Column J,Line 15).

For example, to calculate the Max Day cost of service for SFR Tier 1 (Column E, Line 2), the calculation is asfollows:

Max Day unit cost (Table 3-13, Column E, Line 15) x SFR Tier 1 Max Day extra capacity (Table 3-10, Column H, Line 2))

Note that the total cost of service (Column K, Line 14) is equal to the total revenue requirement (Table 3-1,Column E, Line 20).

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Table 3-14: Proposed Cost of Service by Customer Class

A B C D E F G H I J K

Line Customer Class SupplyBase

DeliveryMax Day Max Hour

PrivateFire

Meter Customer Offset Total

1 Single Family $2,618,086 $555,746 $6,532,8722 Tier 1 $1,081,445 $1,273,485 $12,406 $10,219 $0 $0 $0 ($20,634) $03 Tier 2 $445,041 $524,070 $26,310 $6,699 $0 $0 $0 $0 $04 Multi-Family $465,538 $53,404 $1,626,5685 Tier 1 $137,811 $162,284 $218 $1,142 $0 $0 $0 ($2,629) $06 Tier 2 $368,026 $433,379 $3,951 $3,446 $0 $0 $0 $0 $07 Commercial/Institutional $606,820 $714,578 $9,600 $6,044 $0 $794,307 $74,996 $0 $2,206,3458 Industrial/Manufacturing $8,085 $9,521 $128 $81 $0 $28,113 $3,804 $0 $49,7329 Irrigation/Landscaping $39,424 $46,424 $1,482 $494 $0 $68,330 $5,292 $0 $161,44510 City/ Miscellaneous $37,346 $43,977 $591 $372 $0 $135,956 $6,946 $0 $225,18711 Construction $6,805 $8,013 $498 $114 $0 $0 $0 $0 $15,43012 Fire - Commercial $0 $0 $0 $0 $333,404 $0 $11,576 $0 $344,98013 Fire - Residential $0 $0 $0 $0 $15,613 $0 $1,830 $0 $17,44314 Total $2,730,803 $3,215,731 $55,183 $28,609 $349,016 $4,110,329 $713,593 ($23,264) $11,180,000

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4 Rate Design and DerivationThis section of the report details the calculation of the proposed water rates that were developed in the study. Allrates shown in this section are rounded up to the nearest cent. Numbers shown in the tables in this section of thereport are rounded. Therefore, hand calculations based on the displayed numbers, such as summing or multiplying,may not equal the exact results shown in this report.

Rate DesignThe City’s current water rates include the following components:» Monthly service charge by meter size» Monthly CIP charge by meter size» Monthly fire service charge by private fire line size» Two-tiered consumption rate for SFR and MFR customers by CCF of water usage» Uniform consumption rate for non-residential customers by CCF of water usage

The proposed rate structure maintains most of the current rate components with the following proposed changes:» Eliminate monthly CIP charge and collect capital-related costs based on allocation of capital assets as part

of the monthly service charge» Update SFR Tier 1 width to 14 CCF per month based on average monthly SFR usage» Recommend a uniform consumption rate for MFR customers due to a lack of dwelling unit data

Since MFR customers can have large usage depending upon the number of dwelling units per account, most oftheir use would be billed on the second tier, therefore, it is more reasonable to have a uniform rate for them just likecommercial customers.

Monthly Service chargeTable 4-1 shows the monthly service charge calculation. The Meter unit cost (Table 3-13, Column H, Line 15) ismultiplied by the capacity ratio for each meter size (Column C) to determine the Meter component of the chargefor each meter size (Column D). The Customer component of the charge is equal to the Customer unit cost (Table3-13, Column I, Line 15) and is the same for all meter sizes. The proposed monthly service charge (Column F) isequal to the sum of the Meter and Customer components of the charge (Columns D and E) for each meter size.

Table 4-1: Monthly Service charge CalculationA B C D E F G H

Line Meter SizeCapacity

RatioMeter Customer

ProposedCharge

CurrentCharge

Difference($)

1 5/8" and 3/4" 1.00 $29.32 $6.89 $36.22 $35.78 $0.442 1" 1.70 $49.85 $6.89 $56.74 $55.80 $0.943 1-1/2" 3.30 $96.76 $6.89 $103.65 $89.15 $14.504 2" 5.30 $155.40 $6.89 $162.30 $147.70 $14.605 3" 11.70 $343.06 $6.89 $349.95 $276.95 $73.006 4" 21.00 $615.74 $6.89 $622.64 $461.55 $161.097 6" 46.70 $1,369.29 $6.89 $1,376.19 $923.13 $453.06

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Monthly Fire Service ChargeTable 4-2 shows the monthly fire service charge calculations for private fire customers. The Fire unit cost (Table3-13, Column G, Line 15) is multiplied by the fire capacity ratio (Column C) to determine the Fire capacitycomponent of the charge (Column D). The Customer component of the charge is equal to the Customer unit cost(Table 3-13, Column I, Line 15). The proposed monthly fire service charge (Column F) is equal to the sum of theFire capacity and Customer components of the charge (Columns D and E) for each meter size.

Table 4-2: Monthly Fire Service Charge CalculationA B C D E F G H

Line Fire Line SizeCapacity

RatioFire

CapacityCustomer

ProposedCharge

CurrentCharge

Difference ($)

1 2" 0.06 $13.20 $6.89 $20.09 $21.71 ($1.62)

2 3" 0.16 $38.34 $6.89 $45.24 $63.09 ($17.85)

3 4" 0.34 $81.71 $6.89 $88.60 $134.46 ($45.86)

4 6" 1.00 $237.35 $6.89 $244.24 $241.80 $2.44

5 8" 2.13 $505.79 $6.89 $512.69 $241.80 $270.89

6 10" 3.83 $909.59 $6.89 $916.49 $241.80 $674.69

Consumption RateThe consumption rate includes the Supply, Base Delivery, Max Day and Max Hour, and Offset components. Eachof these components ties into the proposed consumption rate differently.

For the Supply component, the unit cost by various sources of water is calculated to determine the cheapest sourceof water. Table 4-3 shows the water supply usage allocation percentage calculation based on the production ofwater (Column C) from each source for FY 2021 (Table 2-11, Column C, Lines 7-11). Table 4-4 shows the costallocation percentage calculation based on the total adjusted cost of water (Column C) from each source of waterfor FY 2021 (Table 2-13, Column C).

Table 4-3: Water Supply Usage Allocation PercentageA B C D

Line Water Supply Source Production (AF) Usage Allocation1 Grand Avenue Well to CIC 360 6.5%2 CIC Stock 4,430 79.6%3 CIC Leased 777 14.0%4 Total 5,567 100.0%

Table 4-4: Water Supply Cost Allocation PercentageA B C D

Line Water Supply Source Supply Cost Cost Allocation1 Grand Avenue Well to CIC $135,000 4.4%2 CIC Stock $2,303,600 74.7%3 CIC Leased $644,540 20.9%4 Total $3,083,140 100.0%

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Table 4-5 shows the calculation of Supply unit costs for each source of water: Grand Avenue Well, CIC Stock, andCIC Leased. Note that the Supply unit cost for all sources (Column F, Line 3) is equal to the Supply unit costcalculated in the COS analysis (Table 3-13, Column C, Line 15), which is calculated by dividing the total Supplycost of service (Column F, Line 2) by the total water usage for all customer classes (Column F, Line 1). The totalwater usage for each customer class is allocated to each source of water based on the usage allocation percentages(Table 4-3, Column D). The total Supply cost of service (Column F, Line 2) is allocated to each source of waterbased on the cost allocation percentages (Table 4-4, Column D). The Supply unit cost for each source (Line 3) iscalculated by dividing the total Supply cost of service for each source (Line 2) by the available supply in CCF foreach source (Line 1).

Table 4-5: Water Supply Unit Cost by SourceA B C D E F

Line Water Supply Cost

GrandAvenueWell to

CIC

CIC Stock CIC Leased Total

1 Available Supply (CCF) 129,341 1,591,617 279,162 2,000,1212 Total COS $119,572 $2,040,348 $570,883 $2,730,8033 Supply Unit Cost $0.92 $1.28 $2.04 $1.37

Table 4-6 shows the Supply unit cost by customer class and tier. The amount of available supply from each source(Table 4-5, Line 1) is allocated to each customer class based on its proportion of total water usage, resulting in thesame overall Supply unit cost for each customer class.

For the SFR and MFR customer classes with multiple tiers, the available supply is allocated between each tierbased on the cheapest sources of water. To encourage conservation and promote the beneficial use of water, Tier 1usage receives the cheapest source of water first (Grand Avenue Well), then the second cheapest (CIC Stock).These two sources of water are sufficient to serve all Tier 1 usage. The remainder of the second cheapest source ofwater (CIC Stock) is allocated to Tier 2. The remainder of Tier 2 usage is served by the most expensive source ofwater (CIC Leased). To calculate the unit cost for SFR Tier 1, the following equations are used, with lettersrepresenting columns and numbers representing rows:

[D2 x (Table 4-5, C3)] + [E2 x (Table 4-5, D3)] + [F2 x (Table 4-5, E3)] = H2H2 / C2 = I2

Table 4-7 shows the peaking unit cost by customer class and tier. The annual usage (Column C) is equal to theannual water usage for all classes (Table 3-10, Column D). The peaking costs (Column D) are equal to the sum ofthe Max Day and Max Hour costs for each customer class and tier (Table 3-14, Columns E and F). The peakingunit cost (Column E) is calculated by dividing the peaking costs (Column D) for each class and tier by the annualusage (Column C).

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Table 4-6: Water Supply Unit Cost by Customer ClassA B C D E F G H I

Line Customer ClassAnnual

Use(CCF)

GrandAvenue Well

to CIC

CICStock

CICLeased

TotalUse

(CCF)Total Cost

UnitCost

1 Single Family 1,118,044 72,300 889,695 156,048 1,118,044 $1,526,486 $1.372 Tier 1 792,083 72,300 719,782 (0) 792,083 $989,552 $1.253 Tier 2 325,961 0 169,913 156,048 325,961 $536,934 $1.654 Multi-Family 370,490 23,958 294,821 51,710 370,490 $505,837 $1.375 Tier 1 100,937 23,958 76,979 0 100,937 $120,831 $1.206 Tier 2 269,553 0 217,843 51,710 269,553 $385,007 $1.437 Commercial/Institutional 444,453 28,741 353,678 62,033 444,453 $606,820 $1.378 Industrial/Manufacturing 5,922 383 4,712 827 5,922 $8,085 $1.379 Irrigation/Landscaping 28,875 1,867 22,978 4,030 28,875 $39,424 $1.3710 City/Miscellaneous 27,353 1,769 21,766 3,818 27,353 $37,346 $1.3711 Construction 4,984 322 3,966 696 4,984 $6,805 $1.3712 Total 2,000,121 129,341 1,591,617 279,162 2,000,121 $2,730,803 $1.37

Table 4-7: Peaking Unit Cost by Customer ClassA B C D E

Line Customer Class Annual Use(CCF)

Peaking Costs Unit Cost

1 Single Family2 Tier 1 792,083 $22,624 $0.033 Tier 2 325,961 $33,008 $0.104 Multi-Family5 Tier 1 100,937 $1,360 $0.016 Tier 2 269,553 $7,396 $0.037 Commercial/Institutional 444,453 $15,644 $0.048 Industrial/Manufacturing 5,922 $208 $0.049 Irrigation/Landscaping 28,875 $1,975 $0.0710 City/Miscellaneous 27,353 $963 $0.0411 Construction 4,984 $612 $0.1212 Total 2,000,121 $83,791

Table 4-8 shows the consumption rate calculation for all customer classes and tiers. The Supply unit cost (Table4-6, Column I), Base Delivery unit cost (Table 3-13, Column D, Line 15), Peaking unit cost (Table 4-7, ColumnE), and Offset unit cost (Table 3-13, Column J, Line 15) for SFR and MFR Tier 1 (Column G, Lines 2 and 6)make up the various components of the proposed rate (Column H).

The MFR consumption rate includes a two-tiered rate (Lines 6-7) and the recommended uniform rate (Line 5).These two rate options are designed to recover the same amount of revenue from MFR customers. The Peakinguniform unit cost for MFR is calculated by dividing the total MFR peaking costs (Table 4-7, Column D, Lines 5-6)by the total MFR water usage (Table 4-7, Column C, Lines 5-6). The Offset uniform unit cost for MFR iscalculated by dividing the Offset amount for MFR (Table 3-14, Column J, Line 5) by total MFR water usage.

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Table 4-8: Consumption Rate CalculationA B C D E F G H I J


Tiers(CCF)

SupplyBase

DeliveryPeaking Offset

Proposed Rate

CurrentRate

Difference ($)

1 Single Family2 Tier 1 0-14 CCF $1.25 $1.61 $0.03 ($0.03) $2.86 $2.71 $0.153 Tier 2 >14 CCF $1.65 $1.61 $0.10 $0.00 $3.36 $3.02 $0.344 Multi-Family5 Uniform Rate $1.37 $1.61 $0.02 ($0.01) $2.996 Tier 1 0-14 CCF $1.20 $1.61 $0.01 ($0.03) $2.80 $2.71 $0.097 Tier 2 >14 CCF $1.43 $1.61 $0.03 $0.00 $3.07 $2.96 $0.118 Commercial/Institutional $1.37 $1.61 $0.04 $0.00 $3.01 $3.16 ($0.15)9 Industrial/Manufacturing $1.37 $1.61 $0.04 $0.00 $3.01 $2.74 $0.2710 Irrigation/Landscaping $1.37 $1.61 $0.07 $0.00 $3.05 $3.16 ($0.11)11 City/ Miscellaneous $1.37 $1.61 $0.04 $0.00 $3.01 $2.75 $0.2612 Construction $1.37 $1.61 $0.12 $0.00 $3.10 $2.37 $0.73

Proposed Water RatesTable 4-9, Table 4-10, and Table 4-11 shows the five-year rate schedule for implementation of monthly servicecharges, monthly fire service charges, and consumption rates, respectively. The proposed water rates forimplementation in January 2021 are from Table 4-1, Table 4-2, and Table 4-8. The following years’ rates arecalculated by escalating the January 2021 proposed rates by the revenue adjustment percentages shown in Table2-20 for each year of the study, rounded up to the nearest penny.

Table 4-9: Proposed Monthly Service charges ($/meter size)A B C D E F G H

Line Meter Size Current Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 20251 5/8" and 3/4" $35.78 $36.22 $37.67 $39.18 $40.75 $42.382 1" $55.80 $56.74 $59.01 $61.38 $63.84 $66.403 1-1/2" $89.15 $103.65 $107.80 $112.12 $116.61 $121.284 2" $147.70 $162.30 $168.80 $175.56 $182.59 $189.905 3" $276.95 $349.95 $363.95 $378.51 $393.66 $409.416 4" $461.55 $622.64 $647.55 $673.46 $700.40 $728.427 6" $923.13 $1,376.19 $1,431.24 $1,488.49 $1,548.03 $1,609.96

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Table 4-10: Proposed Monthly Fire Service Charges ($/line size)A B C D E F G

Line Fire Line Size CurrentCharge

Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 2" $21.71 $20.09 $20.90 $21.74 $22.61 $23.522 3" $63.09 $45.24 $47.05 $48.94 $50.90 $52.943 4" $134.46 $88.60 $92.15 $95.84 $99.68 $103.674 6" $241.80 $244.24 $254.01 $264.18 $274.75 $285.745 8" $241.80 $512.69 $533.20 $554.53 $576.72 $599.796 10" $241.80 $916.49 $953.15 $991.28 $1,030.94 $1,072.18

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Table 4-11: Proposed Consumption Rates ($/CCF)A B C D E F G H I


Tiers(CCF)

Current Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 Single Family2 Tier 1 0-14 CCF $2.71 $2.86 $2.98 $3.10 $3.23 $3.363 Tier 2 >14 CCF $3.02 $3.36 $3.50 $3.64 $3.79 $3.954 Multi-Family5 Uniform Rate $2.89* $2.99 $3.11 $3.24 $3.37 $3.516 Commercial/Institutional $3.16 $3.01 $3.14 $3.27 $3.41 $3.557 Industrial/Manufacturing $2.74 $3.01 $3.14 $3.27 $3.41 $3.558 Irrigation/Landscaping $3.16 $3.05 $3.18 $3.31 $3.45 $3.599 City/Miscellaneous $2.75 $3.01 $3.14 $3.27 $3.41 $3.55

*Current Multi-Family rate is shown as the blended rate of the two-tiered rates

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Customer ImpactsTable 4-12 shows the proposed bill impacts at various levels of usage for an SFR customer with a 5/8” or 3/4"meter; these customers make up approximately 68 percent of the City’s customer base.

The average usage (Line 4) is equal to the Tier 1 width for SFR customers. The average customer will see a $2.54increase in their water bill each month.

Table 4-12: Single Family Customer Impacts (5/8” and 3/4" Meter)A B C D E F

Line SFR Percentile of UsageMonthly

Usage(CCF)

ProposedBill

CurrentBill

Difference($)

1 10th Percentile 3 $44.80 $43.91 $0.892 30th Percentile 7 $56.24 $54.75 $1.493 50th Percentile 11 $67.68 $65.59 $2.094 Average 14 $76.26 $73.72 $2.545 70th Percentile 16 $82.98 $79.14 $3.846 80th Percentile 20 $96.42 $91.22 $5.207 90th Percentile 26 $116.58 $109.34 $7.24

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5 Connection FeesThis section of the report provides a brief overview of the regulatory requirements and objectives of connectionfees, a general overview of the methodologies used to calculate them, and the step-by-step process by whichRaftelis calculated the proposed connection fees for the City.

Objectives and Regulatory RequirementsThe primary objective of establishing a full cost-recovery connection fee is to provide an equitable means by whichnew (or increased) system users can pay for the costs of the potable water facilities required to serve them.Connection fees must be established based on a reasonable relationship to the needs and benefits brought about bythe development (or required increase in capacity). The basic statutory standards governing water and wastewaterconnection fees are embodied in California Government Code Section 66000 et seq. In particular, GovernmentCode Section 66013 contains requirements specific to determining water and wastewater connection fees includingthis direction found in Section 66013 (a):

“Notwithstanding any other provision of law, when a local agency imposes fees for water connections or sewerconnections, or imposes capacity charges, those fees or charges shall not exceed the estimated reasonable cost of providingthe service for which the fee or charge is imposed, unless a question regarding the amount the fee or charge in excess ofthe estimated reasonable cost of providing the services or materials is submitted to, and approved by, a popular vote oftwo-thirds of those electors voting on the issue.”

Section 66013 (c) also includes requirements about how connection fee revenue must be accounted for, specifically:

“A local agency receiving payment of a charge as specified in paragraph (3) of subdivision (b) shall deposit it in aseparate capital facilities fund with other charges received, and account for the charges in a manner to avoid anycommingling with other moneys of the local agency, except for investments, and shall expend those charges solely for thepurposes for which the charges were collected.”

Calculation MethodologiesThe process of calculating connection fees has two primary steps: determining the cost of capital improvementsneeded to serve new connections and allocating those costs equitably to various types of connections. In general,there are two separate calculation methodologies for calculating connection fees: the incremental cost methodologyand the buy-in methodology.

The City is essentially built out and new connections will primarily result from redevelopment. The City hascapacity in the existing system to serve new users and therefore the City’s connection fees will be calculated usingthe equity buy-in methodology. The methodology is used to determine the best measure of the unit cost of watercapacity needed to serve the demand created by new connections to the City’s water system. Buy-in is anappropriate methodology for agencies that have been built out and are mostly experiencing infill, as is the case withthe City. Brief descriptions of both methodologies follow:» In instances where infrastructure has been built in advance of growth and there is excess capacity available

to be utilized by new connections, the buy-in methodology is used. Under this methodology, growth funds

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its share of project costs that were previously funded by existing customers or financed through theissuance of debt.» The incremental costs methodology uses long-term CIP to determine growth’s share of planned projects.Projects solely involving routine maintenance or replacement of existing facilities are not included in thecharges, except in cases where replacement projects provide capacity needed to serve growth.

Equity Buy-In MethodologyOne of the challenges of providing water services is that infrastructure needed must be developed in advance ofgrowth and cannot be easily constructed in discrete increments. This means that current users often must payupfront for infrastructure requirements that can accommodate current and future development. In addition, thelevel of service definition associated with water can be challenging, as water service must meet regulatoryrequirements associated with drinking water. Also determining capacity can be problematic as water use canfluctuate monthly and customers have significantly changed their consumption patterns and different componentsof the system may have different capacities. To account for these factors, Raftelis has used the equity buy-inapproach based on equivalent meter units (EMUs).

The buy-in approach rests on the premise that new customers are entitled to service at the same price as existingcustomers. However, existing customers have already developed most if not all of the facilities that will serve newcustomers, including the costs associated with financing those services. Under this approach, new customers payan amount equal to the net investment already made by existing users. This net equity investment, or value of thesystem, is then divided by the current demand of the system. For water systems demand is most frequentlymeasured by EMUs. The goal of the buy-in is to maintain this level of service as growth occurs.

The value of the existing water system is calculated by determining the value of the City’s assets and subtractingthe City’s outstanding debt principal. Civiltec provided Raftelis with a summary of the City’s water-related assets,including estimated original value, year in service, remaining life, and replacement cost. The replacement cost ofthe City’s water-related assets represents the cost to replace all assets as new. Raftelis calculated the replacementcost less depreciation (RCLD) of the City’s water-related assets based on each asset’s year in service and remaininglife assuming straight line depreciation. For water pipelines however, no precise year in service was providedbecause the City’s water pipelines were installed at various times. Therefore, Raftelis estimated an average year inservice for water pipeline assets based on remaining life provided by Civiltec and an assumed 75-year useful life.Similarly, Raftelis estimated the RCLD of chloramine systems assuming a 50-year useful life and 30 years ofremaining life. The original value, replacement cost, and RCLD of the City’s water-related assets are shown belowin Table 5-1. Detailed calculations of each asset’s RCLD are also shown in the Appendix.

Table 5-1: Value of Existing Assets

Line Description Original Value Replacement Cost RCLD

1 Water Storage Tanks $13,343,750 $23,217,500 $9,754,350

2 Water Booster Pumps $6,601,000 $12,625,000 $4,638,108

3 Water Pipelines $17,481,370 $49,923,130 $24,086,665

4 Fire Hydrants $4,023,750 $6,706,250 $2,548,375

5 Chloramine Systems $168,300 $233,750 $135,575

6 Total $41,618,170 $92,705,630 $41,163,073

Attachment B

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Total System Value is calculated by subtracting outstanding debt principal from the Asset Valuation. Above,Raftelis found that the RCLD value of the current system is $41,163,073. The City provided Raftelis with itstotal outstanding debt principal, which amounts to $12,620,000. The resulting total existing System Valuecalculation is shown below in Table 5-2.

Table 5-2: Value of Existing System

Line Description Total Source/Notes

1 Total Assets Value: RCLD $41,163,073 Table 5-1, Line 5

2 Less Total Outstanding Debt Principal $12,620,000

3 Value of Existing System $28,543,073 Line 1 - Line 2

The equity buy-in fee per EMU is calculated by dividing the system’s total value by the number of connectedEMUs. The City’s current (FY 2019) total number of connected EMUs was calculated by using meterequivalency ratios. The City’s base meter size is ¾” or 5/8”.5 Raftelis used the larger of these two meters, ¾”as a basis for comparison. EMU ratios are calculated by dividing each meter’s rated capacity in gallons perminute (gpm) by the base meter’s rated capacity. Meter rated capacity is based on the AWWA M1 manual andwas previously shown in Table 3-4. Total connected EMUs were calculated by multiplying the number of totalconnected meters (excluding construction and fire lines) by each meter’s equivalent meter ratio as shown inTable 5-3Error! Reference source not found..

Table 5-3: EMU Calculation

Line Meter Size Rated Capacity EMU RatioTotal

MetersTotal EMUs

(A) (B) (C) (D)

Source/ Notes: AWWA M1Column A / 30GPM

Table 2-3,Column E

Column B xColumn C

1 5/8" or 3/4" 30 1.00 6,487 6,487

2 1" 50 1.70 1,398 2,377

3 1 1/2" 100 3.30 279 921

4 2" 160 5.30 240 1,273

5 3" 350 11.70 19 222

6 4" 630 21.00 13 273

7 6" 1,400 46.70 2 93

8 Total 8,439 11,647

The equity buy-in fee per EMU is calculated by dividing the Value of the Existing System by the number ofconnected EMUs. This results in the equity buy-in fee for one EMU, or a 5/8” or ¾” meter, which is shownin Table 5-4Error! Reference source not found..

5 Both meter sizes are subject to the same service charge rate and are proposed to pay the same connection fee as well.

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Table 5-4: Equity Buy-In Fee Calculation for One EMU

Line Description Total Source/Notes

1 Value of Existing System $28,543,073 Table 5-2, Line 3

2 Total EMUs 11,647Error! Reference sourcenot found. Table 5-3,Line 8

3 Equity Buy-In Charge per EMU $2,451 Line 2 / Line 3

Proposed connection fees for other meter sizes are shown in Table 5-5Error! Reference source not found..These fees are calculated by multiplying the equity buy-in fee for 1 EMU by the EMU ratio found in Table 5-3,column B.

Table 5-5: Calculation of Proposed Connection Fees by Meter Size

Meter SizeRated

CapacityEMU Ratio

CapacityCharge

(A) (B) (C)

Source/ Notes: AWWA M1Table B-2

Column A /30 GPM

$2,451 xColumn B

5/8" or 3/4" 30 1.00 $2,451

1" 50 1.70 $4,166

1 1/2" 100 3.30 $8,087

2" 160 5.30 $12,989

3" 350 11.70 $28,673

4" 630 21.00 $51,464

6" 1,400 46.70 $114,447

Attachment B

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AppendixTable 0-1: Operating Percent Allocation

A B C D E F G H I J K L

Line O&M Allocation Function SupplyBase

DeliveryMaxDay

MaxHour


1 Transfer-Enterprise Fund General 0% 0% 0% 0% 0% 0% 0% 100% 100%

2Water-Water Admin RegFull-T

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

3Water-Water Admin RegPart-T

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

4Water-Water AdminOvertime

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

5Water-Water AdminMedicare C

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

6Water-Water Admin PERSCont-

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

7PERS Unfunded LiabilityExp-ER

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

8Water-Water Admin GroupHeal

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

9Water-Water Admin GroupLife

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

10Water-Water Admin GroupLTD

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

11Water-Water Admin GroupFlex

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

12Water-Water AdminWorkers Co

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

13Water-Water AdminConsulting

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

14Water-Water Admin OtherProf

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

15Water-Water Admin Maint-Offi

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

16Water-Water Admin Duesand S

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

17Water-Water AdminConference

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

18Water-Water AdminPostage

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

19Water-Water Admin MotorPool

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

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DeliveryMaxDay

MaxHour


20Legal Notices andPublications

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

21Water-Water Admin OfficeAcc

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

22 Buildings and Structures General 0% 0% 0% 0% 0% 0% 0% 100% 100%

23Improvements-NotBldgs/Structr

General 0% 0% 0% 0% 0% 0% 0% 100% 100%

24Computer Hardware andSoftware

General 0% 0% 0% 0% 0% 0% 0% 100% 100%

25Water-Water Admin PublicWor

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

26Water-Water Admin YardCente

Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

27 Indirect Cost Allocation General 0% 0% 0% 0% 0% 0% 0% 100% 100%

28Water-Utility Billing RegFull

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

29Water-Utility Billing RegPart

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

30Water-Utility BillingMedicare

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

31Water-Utility Billing PERSCon

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

32Water-Utility Billing GroupHe

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

33Water-Utility Billing GroupLi

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

34Water-Utility Billing GroupLT

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

35Water-Utility Billing GroupFl

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

36Water-Utility BillingWorkers

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

37 Other Professional Fees Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

38Water-Utility BillingPostage

Billing 0% 0% 0% 0% 0% 100% 0% 0% 100%

39Water-Customer ServiceReg Ful

Meter 0% 0% 0% 0% 50% 50% 0% 0% 100%

40Regular Part-TimeEmployees

Customer Service 0% 0% 0% 0% 0% 100% 0% 0% 100%

41Water-Customer ServiceOvertim


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DeliveryMaxDay

MaxHour


42Water-Customer ServiceMedicar


43Water-Customer ServicePERS Co


44Water-Customer ServiceGroup H


45Water-Customer ServiceGroup L


46Water-Customer ServiceGroup F


47Water-Customer ServiceWorkers


48Water-Customer ServiceMaint-O


49Water-Customer ServiceMotor P


50 Administrative Charges Administration 0% 0% 0% 0% 0% 0% 0% 100% 100%

51Water-Customer ServiceClothin


52Water-Source and SupplyResale

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

53Water-Production Reg Full-T

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

54Water-Production Reg Part-T

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

55 Water-Production Overtime Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

56Water-Production MedicareC

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

57Water-Production PERSCont-

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

58Water-Production GroupHeal

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

59Water-Production GroupLife

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

60Water-Production GroupLTD

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

61Water-Production GroupFlex

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

62Water-Production WorkersCo

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

63 Testing Fees Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

Attachment B

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DeliveryMaxDay

MaxHour


64Water-Production OtherProf

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

65Water-Production ElectricU

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

66Water-ProductionTelephone

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

67Water-ProductionLawn/Lands

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

68Water-Production Maint-Buil

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

69Water-Production Maint-Pwr/

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

70Water-ProductionEmployee T

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

71Water-Production MotorPool

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

72Water-Production Licensesa

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

73Water-ProductionClothing/E

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

74Water-ProductionChemicals/

Supply 100% 0% 0% 0% 0% 0% 0% 0% 100%

75Water-Production Lumberand

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

76Water-Production SmallTool

Production 0% 63% 38% 0% 0% 0% 0% 0% 100%

77Water-Trans and Dist RegFull-

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

78Water-Trans and DistOvertime

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

79Water-Trans and DistMedicare

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

80Water-Trans and Dist PERSCont

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

81Water-Trans and DistGroup Hea

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

82Water-Trans and DistGroup Lif

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

83Water-Trans and DistGroup LTD

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

84Water-Trans and DistGroup Fle

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

Attachment B

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DeliveryMaxDay

MaxHour


85Water-Trans and DistWorkers C

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

86Water-Trans and Dist OtherPro

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

87Water-Trans and DistTelephone

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

88Water-Trans and DistMaint-Wat

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

89Water-Trans and DistMaint-Fir

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

90Water-Trans and DistMaint-Oth

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

91Water-Trans and DistEmployee

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

92Water-Trans and DistMotor Poo

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

93Water-Trans and DistClothing/

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

94 Shop Materials T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

95Cement and ConcreteSupplies

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

96Water-Trans and Dist SmallToo

T & D 0% 35% 21% 39% 5% 0% 0% 0% 100%

97 Fiscal Agent Fees Capital 0% 49% 29% 19% 3% 0% 0% 0% 100%

98Regular Full-TimeEmployees

General 0% 0% 0% 0% 0% 0% 0% 100% 100%

99 Medicare Contribution General 0% 0% 0% 0% 0% 0% 0% 100% 100%

100PERS Contribution-Employer

General 0% 0% 0% 0% 0% 0% 0% 100% 100%

101 Group Health Insurance General 0% 0% 0% 0% 0% 0% 0% 100% 100%

102 Group Life Insurance General 0% 0% 0% 0% 0% 0% 0% 100% 100%

103 Group LTD Insurance General 0% 0% 0% 0% 0% 0% 0% 100% 100%

104 Group Flex Benefits General 0% 0% 0% 0% 0% 0% 0% 100% 100%

105 Workers Compensation General 0% 0% 0% 0% 0% 0% 0% 100% 100%

106 Consulting Fees General 0% 0% 0% 0% 0% 0% 0% 100% 100%

107 Software Lease Fees General 0% 0% 0% 0% 0% 0% 0% 100% 100%

108 Maint-Buildings/Structures General 0% 0% 0% 0% 0% 0% 0% 100% 100%

109 Bank Service Charges General 0% 0% 0% 0% 0% 0% 0% 100% 100%

110 Other General 0% 0% 0% 0% 0% 0% 0% 100% 100%

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DeliveryMaxDay

MaxHour


111 Electric Utilities General 0% 0% 0% 0% 0% 0% 0% 100% 100%

112Water-Utility BillingOvertime


113Water-Customer ServiceTelepho


Table 0-2: Operating Cost AllocationA B C D E F G H I J K L



1 Transfer-Enterprise Fund General $0 $0 $0 $0 $0 $0 $0 $2,500,000 $2,500,000

2Water-Water Admin RegFull-T

Administration $0 $0 $0 $0 $0 $0 $0 $349,105 $349,105

3Water-Water Admin RegPart-T

Administration $0 $0 $0 $0 $0 $0 $0 $44,500 $44,500

4Water-Water AdminOvertime

Administration $0 $0 $0 $0 $0 $0 $0 $1,200 $1,200

5Water-Water AdminMedicare C

Administration $0 $0 $0 $0 $0 $0 $0 $5,695 $5,695

6Water-Water AdminPERS Cont-

Administration $0 $0 $0 $0 $0 $0 $0 $39,688 $39,688

7PERS UnfundedLiability Exp-ER

Administration $0 $0 $0 $0 $0 $0 $0 $414,072 $414,072

8Water-Water AdminGroup Heal

Administration $0 $0 $0 $0 $0 $0 $0 $5,709 $5,709

9Water-Water AdminGroup Life

Administration $0 $0 $0 $0 $0 $0 $0 $641 $641

10Water-Water AdminGroup LTD

Administration $0 $0 $0 $0 $0 $0 $0 $2,431 $2,431

11Water-Water AdminGroup Flex

Administration $0 $0 $0 $0 $0 $0 $0 $44,079 $44,079

12Water-Water AdminWorkers Co

Administration $0 $0 $0 $0 $0 $0 $0 $7,144 $7,144

13Water-Water AdminConsulting

Administration $0 $0 $0 $0 $0 $0 $0 $100,000 $100,000

14Water-Water AdminOther Prof

Administration $0 $0 $0 $0 $0 $0 $0 $32,107 $32,107

15Water-Water AdminMaint-Offi

Administration $0 $0 $0 $0 $0 $0 $0 $315 $315

Attachment B

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16Water-Water AdminDues and S

Administration $0 $0 $0 $0 $0 $0 $0 $10,490 $10,490

17Water-Water AdminConference

Administration $0 $0 $0 $0 $0 $0 $0 $300 $300

18Water-Water AdminPostage

Administration $0 $0 $0 $0 $0 $0 $0 $3,300 $3,300

19Water-Water AdminMotor Pool

Administration $0 $0 $0 $0 $0 $0 $0 $5,792 $5,792

20Legal Notices andPublications

Administration $0 $0 $0 $0 $0 $0 $0 $750 $750

21Water-Water AdminOffice Acc

Administration $0 $0 $0 $0 $0 $0 $0 $16,050 $16,050

22 Buildings and Structures General $0 $0 $0 $0 $0 $0 $0 $22,000 $22,000

23Improvements-NotBldgs/Structr

General $0 $0 $0 $0 $0 $0 $0 $5,000 $5,000

24Computer Hardware andSoftware

General $0 $0 $0 $0 $0 $0 $0 $20,500 $20,500

25Water-Water AdminPublic Wor

Administration $0 $0 $0 $0 $0 $0 $0 $208,400 $208,400

26Water-Water AdminYard Cente

Administration $0 $0 $0 $0 $0 $0 $0 $57,300 $57,300

27 Indirect Cost Allocation General $0 $0 $0 $0 $0 $0 $0 $498,670 $498,670

28Water-Utility Billing RegFull

Billing $0 $0 $0 $0 $0 $74,833 $0 $0 $74,833

29Water-Utility Billing RegPart

Billing $0 $0 $0 $0 $0 $13,537 $0 $0 $13,537

30Water-Utility BillingMedicare

Billing $0 $0 $0 $0 $0 $1,289 $0 $0 $1,289

31Water-Utility BillingPERS Con

Billing $0 $0 $0 $0 $0 $8,593 $0 $0 $8,593

32Water-Utility BillingGroup He

Billing $0 $0 $0 $0 $0 $1,387 $0 $0 $1,387

33Water-Utility BillingGroup Li

Billing $0 $0 $0 $0 $0 $153 $0 $0 $153

34Water-Utility BillingGroup LT

Billing $0 $0 $0 $0 $0 $522 $0 $0 $522

35Water-Utility BillingGroup Fl

Billing $0 $0 $0 $0 $0 $10,948 $0 $0 $10,948

36Water-Utility BillingWorkers

Billing $0 $0 $0 $0 $0 $5,249 $0 $0 $5,249

37 Other Professional Fees Billing $0 $0 $0 $0 $0 $96,030 $0 $0 $96,030

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38Water-Utility BillingPostage

Billing $0 $0 $0 $0 $0 $300 $0 $0 $300

39Water-Customer ServiceReg Ful

Meter $0 $0 $0 $0 $130,107 $130,107 $0 $0 $260,214

40Regular Part-TimeEmployees

Customer Service $0 $0 $0 $0 $0 $111,820 $0 $0 $111,820

41Water-Customer ServiceOvertim


42Water-Customer ServiceMedicar


43Water-Customer ServicePERS Co


44Water-Customer ServiceGroup H


45Water-Customer ServiceGroup L


46Water-Customer ServiceGroup F


47Water-Customer ServiceWorkers


48Water-Customer ServiceMaint-O


49Water-Customer ServiceMotor P


50 Administrative Charges Administration $0 $0 $0 $0 $0 $0 $0 $56,905 $56,905

51Water-Customer ServiceClothin


52Water-Source andSupply Resale

Supply $3,526,341 $0 $0 $0 $0 $0 $0 $0 $3,526,341

53Water-Production RegFull-T

Production $0 $224,688 $134,813 $0 $0 $0 $0 $0 $359,500

54Water-Production RegPart-T

Production $0 $10,342 $6,205 $0 $0 $0 $0 $0 $16,547

55Water-ProductionOvertime

Production $0 $28,750 $17,250 $0 $0 $0 $0 $0 $46,000

56Water-ProductionMedicare C

Production $0 $3,825 $2,295 $0 $0 $0 $0 $0 $6,120

57Water-Production PERSCont-

Production $0 $25,801 $15,480 $0 $0 $0 $0 $0 $41,281

58Water-Production GroupHeal

Production $0 $5,218 $3,131 $0 $0 $0 $0 $0 $8,348

59Water-Production GroupLife

Production $0 $576 $345 $0 $0 $0 $0 $0 $921

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60Water-Production GroupLTD

Production $0 $1,566 $940 $0 $0 $0 $0 $0 $2,506

61Water-Production GroupFlex

Production $0 $37,484 $22,491 $0 $0 $0 $0 $0 $59,975

62Water-ProductionWorkers Co

Production $0 $16,064 $9,639 $0 $0 $0 $0 $0 $25,703

63 Testing Fees Supply $20,460 $0 $0 $0 $0 $0 $0 $0 $20,460

64Water-Production OtherProf

Production $0 $45,313 $27,188 $0 $0 $0 $0 $0 $72,500

65Water-ProductionElectric U

Supply $296,481 $0 $0 $0 $0 $0 $0 $0 $296,481

66Water-ProductionTelephone

Production $0 $7,721 $4,632 $0 $0 $0 $0 $0 $12,353

67Water-ProductionLawn/Lands

Production $0 $18,963 $11,378 $0 $0 $0 $0 $0 $30,340

68Water-ProductionMaint-Buil

Production $0 $59,179 $35,508 $0 $0 $0 $0 $0 $94,687

69Water-ProductionMaint-Pwr/

Production $0 $64,375 $38,625 $0 $0 $0 $0 $0 $103,000

70Water-ProductionEmployee T

Production $0 $3,750 $2,250 $0 $0 $0 $0 $0 $6,000

71Water-Production MotorPool

Supply $28,528 $0 $0 $0 $0 $0 $0 $0 $28,528

72Water-ProductionLicenses a

Supply $1,400 $0 $0 $0 $0 $0 $0 $0 $1,400

73Water-ProductionClothing/E

Supply $2,344 $0 $0 $0 $0 $0 $0 $0 $2,344

74Water-ProductionChemicals/

Supply $58,000 $0 $0 $0 $0 $0 $0 $0 $58,000

75Water-ProductionLumber and

Production $0 $625 $375 $0 $0 $0 $0 $0 $1,000

76Water-Production SmallTool

Production $0 $4,125 $2,475 $0 $0 $0 $0 $0 $6,600

77Water-Trans and DistReg Full-

T & D $0 $143,544 $86,126 $157,898 $20,398 $0 $0 $0 $407,967

78Water-Trans and DistOvertime

T & D $0 $27,444 $16,467 $30,189 $3,900 $0 $0 $0 $78,000

79Water-Trans and DistMedicare

T & D $0 $2,723 $1,634 $2,996 $387 $0 $0 $0 $7,740

80Water-Trans and DistPERS Cont

T & D $0 $16,483 $9,890 $18,132 $2,342 $0 $0 $0 $46,847

81Water-Trans and DistGroup Hea

T & D $0 $3,723 $2,234 $4,095 $529 $0 $0 $0 $10,581

Attachment B

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82Water-Trans and DistGroup Lif

T & D $0 $411 $246 $452 $58 $0 $0 $0 $1,167

83Water-Trans and DistGroup LTD

T & D $0 $1,001 $600 $1,101 $142 $0 $0 $0 $2,844

84Water-Trans and DistGroup Fle

T & D $0 $29,160 $17,496 $32,076 $4,144 $0 $0 $0 $82,876

85Water-Trans and DistWorkers C

T & D $0 $10,460 $6,276 $11,506 $1,486 $0 $0 $0 $29,729

86Water-Trans and DistOther Pro

T & D $0 $10,626 $6,376 $11,689 $1,510 $0 $0 $0 $30,200

87Water-Trans and DistTelephone

T & D $0 $2,076 $1,246 $2,284 $295 $0 $0 $0 $5,900

88Water-Trans and DistMaint-Wat

T & D $0 $66,834 $40,101 $73,518 $9,498 $0 $0 $0 $189,950

89Water-Trans and DistMaint-Fir

T & D $0 $10,556 $6,333 $11,611 $1,500 $0 $0 $0 $30,000

90Water-Trans and DistMaint-Oth

T & D $0 $5,278 $3,167 $5,806 $750 $0 $0 $0 $15,000

91Water-Trans and DistEmployee

T & D $0 $3,519 $2,111 $3,870 $500 $0 $0 $0 $10,000

92Water-Trans and DistMotor Poo

T & D $0 $58,094 $34,856 $63,903 $8,255 $0 $0 $0 $165,108

93Water-Trans and DistClothing/

T & D $0 $4,602 $2,761 $5,062 $654 $0 $0 $0 $13,080

94 Shop Materials T & D $0 $1,583 $950 $1,742 $225 $0 $0 $0 $4,500

95Cement and ConcreteSupplies

T & D $0 $11,765 $7,059 $12,941 $1,672 $0 $0 $0 $33,436

96Water-Trans and DistSmall Too

T & D $0 $3,131 $1,879 $3,445 $445 $0 $0 $0 $8,900

97 Fiscal Agent Fees Capital $0 $2,298 $1,379 $887 $126 $0 $0 $0 $4,690

98Regular Full-TimeEmployees

General $0 $0 $0 $0 $0 $0 $0 $340,680 $340,680

99 Medicare Contribution General $0 $0 $0 $0 $0 $0 $0 $5,530 $5,530

100PERS Contribution-Employer

General $0 $0 $0 $0 $0 $0 $0 $38,760 $38,760

101 Group Health Insurance General $0 $0 $0 $0 $0 $0 $0 $8,540 $8,540

102 Group Life Insurance General $0 $0 $0 $0 $0 $0 $0 $950 $950

103 Group LTD Insurance General $0 $0 $0 $0 $0 $0 $0 $2,360 $2,360

104 Group Flex Benefits General $0 $0 $0 $0 $0 $0 $0 $60,090 $60,090

105 Workers Compensation General $0 $0 $0 $0 $0 $0 $0 $1,571 $1,571

Attachment B

Page 82 of 93





106 Consulting Fees General $0 $0 $0 $0 $0 $0 $0 $50,000 $50,000

107 Software Lease Fees General $0 $0 $0 $0 $0 $0 $0 $48,600 $48,600

108Maint-Buildings/Structures

General $0 $0 $0 $0 $0 $0 $0 $65,000 $65,000

109 Bank Service Charges General $0 $0 $0 $0 $0 $0 $0 $56,260 $56,260

110 Other General $0 $0 $0 $0 $0 $0 $0 $500 $500

111 Electric Utilities General $0 $0 $0 $0 $0 $0 $0 $16,157 $16,157

112Water-Utility BillingOvertime

Customer Service $0 $0 $0 $0 $0 $500 $0 $0 $500

113Water-Customer ServiceTelepho


114 Total - O&M Expenses $3,933,554 $973,673 $584,204 $455,201 $188,925 $594,369 $0 $5,147,141 $11,877,067

115 O&M Allocation 33% 8% 5% 4% 2% 5% 0% 43% 100%

Table 0-3: Detailed Asset Valuation CalculationsA B C D E F G H I J K

Line Asset TypeAssetDescription

Year inService

RemainingLife

OriginalValue

ReplacementCost

UsefulLife

AnnualDepreciation

AccumulatedDepreciation

RCLD

1 Water Storage TanksCharter Oak -Tank 1

1954 36 $2,700,000 $3,600,000 100 $36,000 $2,340,000 $1,260,000


1957 -11 $2,400,000 $3,300,000 50 $66,000 $4,092,000 $0


1964 -4 $2,400,000 $3,300,000 50 $66,000 $3,630,000 $0


2013 45 $2,700,000 $3,600,000 50 $72,000 $432,000 $3,168,000

5 Water Storage Tanks Cypress 1896 -22 $1,305,000 $1,740,000 100 $17,400 $2,140,200 $0

6 Water Storage Tanks Forestdale 2006 38 $20,000 $27,500 50 $550 $7,150 $20,350

7 Water Storage TanksRancho LaMerced

2010 42 $800,000 $1,100,000 50 $22,000 $198,000 $902,000

8 Water Storage TanksRancho Simi(Buried)

1988 70 $4,500,000 $6,000,000 100 $60,000 $1,860,000 $4,140,000

9 Water Storage Tanks Roycove 1993 25 $400,000 $550,000 50 $11,000 $286,000 $264,000

10 Water Booster Pumps Charter Oak 1 1992 4 $800,000 $1,000,000 30 $33,333 $900,000 $100,000

11 Water Booster Pumps Charter Oak 2 2010 22 $800,000 $1,000,000 30 $33,333 $300,000 $700,000

Attachment B

Page 83 of 93


A B C D E F G H I J K

Line Asset TypeAssetDescription

Year inService

RemainingLife

OriginalValue

ReplacementCost

UsefulLife

AnnualDepreciation

AccumulatedDepreciation

RCLD

12 Water Booster Pumps Cypress 1 1978 1 $400,000 $500,000 41 $12,195 $500,000 $0

13 Water Booster Pumps Cypress 2 1978 2 $800,000 $1,000,000 42 $23,810 $976,190 $23,810

14 Water Booster PumpsCypress FPNorth

2010 22 $800,000 $1,000,000 30 $33,333 $300,000 $700,000

15 Water Booster PumpsCypress FPSouth

2010 22 $800,000 $1,000,000 30 $33,333 $300,000 $700,000

16 Water Booster Pumps Forestdale 1 1982 1 $480,000 $600,000 37 $16,216 $600,000 $0

17 Water Booster Pumps Forestdale 2 2010 22 $800,000 $1,000,000 30 $33,333 $300,000 $700,000

18 Water Booster Pumps Forestdale 3 1982 2 $1,600,000 $2,000,000 38 $52,632 $1,947,368 $52,632

19 Water Booster Pumps Holt 1 2012 24 $1,000,000 $1,250,000 30 $41,667 $291,667 $958,333

20 Water Booster PumpsRancho laMerced 1

2011 23 $320,000 $400,000 30 $13,333 $106,667 $293,333

21 Water Booster PumpsRancho laMerced 2

2011 23 $320,000 $400,000 30 $13,333 $106,667 $293,333

22 Water Booster Pumps Rancho Simi 1 1988 1 $240,000 $300,000 31 $9,677 $300,000 $0

23 Water Booster Pumps Rancho Simi 2 1988 1 $240,000 $300,000 31 $9,677 $300,000 $0

24 Water Booster PumpsRoycove 1(Fire)

1993 5 $400,000 $500,000 30 $16,667 $433,333 $66,667

25 Water Booster Pumps Roycove 2 1993 5 $120,000 $150,000 30 $5,000 $130,000 $20,000



28 Water Pipelines 2-inch Size 1963 20 $120,240 $150,300 75 $2,004 $112,224 $38,076

29 Water Pipelines 3-inch Size 1963 20 $58,104 $72,630 75 $968 $54,230 $18,400

30 Water Pipelines 4-inch Size 1963 20 $1,110,304 $1,387,880 75 $18,505 $1,036,284 $351,596

31 Water Pipelines 6-inch Size 1973 30 $9,548,496 $11,935,620 75 $159,142 $7,320,514 $4,615,106





36 Water Pipelines 18-inch Size 1993 50 $957,312 $1,196,640 75 $15,955 $414,835 $781,805

37 Water Pipelines 24-inch Size 1993 50 $1,711,296 $2,139,120 75 $28,522 $741,562 $1,397,558

38 Fire Hydrants1,073 FireHydrants

1988 20 $5,365,000 $6,706,250 50 $134,125 $4,157,875 $2,548,375

39 Chloramine Systems 1998 30 N/A $233,750 50 $4,675 $98,175 $135,575

40 Total $72,628,504 $92,705,630 $1,543,766 $53,064,757 $41,163,073

Attachment B

Page 84 of 93

Attachment C: Proposed 5-year Consumption Rates

A B C D E F G H I

Line Customer Class

Monthly

Tiers

(CCF)

Current

(per CCF) Jan 2021 Jan 2022 Jan 2023 Jan 2024 Jan 2025

1 Single Family

2 Tier 1 0-14 CCF** $2.71 $2.86 $2.98 $3.10 $3.23 $3.36

3 Tier 2 >14 CCF $3.02 $3.36 $3.50 $3.64 $3.79 $3.95

4 Multi-Family

5 Uniform Rate

$2.89* $2.99 $3.11 $3.24 $3.37 $3.51

6 Commercial/Institutional

$3.16 $3.01 $3.14 $3.27 $3.41 $3.55

7 Industrial/Manufacturing

$2.74 $3.01 $3.14 $3.27 $3.41 $3.55

8 Irrigation/Landscaping

$3.16 $3.05 $3.18 $3.31 $3.45 $3.59

9 City/Miscellaneous

$2.75 $3.01 $3.14 $3.27 $3.41 $3.55

*Current Multi-Family rate is shown as the blended rate of the two-tiered rates

**Current Single Family Tier 1 is 0-16 CCF; this proposal sets the Tier at 0-14 CCF

Page 85 of 93

Attachment D: Proposed Rate Adjustment and Customer Impacts

Example of Single-Family Customer Impacts (5/8” or 3/4" Meter)

Proposed Rates to Current Rates

This chart shows the proposed bill impacts at various levels of usage for an SFR customer with a 5/8” or

3/4" meter; these customers make up approximately 68 percent of the City’s customer base. The average

usage (Line 4) is equal to the Tier 1 width for SFR customers. The average customer will see a $2.54

increase in their water bill each month.

A B C D E F

Line SFR Percentile of Usage

Monthly

Usage

(CCF)

Proposed

Bill

Current

Bill

Difference

($)

1 10th Percentile 3 $44.80 $43.91 $0.89

2 30th Percentile 7 $56.24 $54.75 $1.49

3 50th Percentile 11 $67.68 $65.59 $2.09

4 Average 14 $76.26 $73.72 $2.54

5 70th Percentile 16 $82.98 $79.76 $3.22

6 80th Percentile 20 $96.42 $91.84 $4.58

7 90th Percentile 26 $116.58 $109.96 $6.62

Page 86 of 93

Glendora

Monthly

Consumption CCF Unit Rate

Monthly 3/4 Meter + CIP

Charge Tier 1 Rates 0 -14 Per CCF

Tier 2 Rates 15+ Per

CCFTotal Charges

14 $2.69 $39.65 $37.66 $77.31

15 $4.26 $39.65 $41.92 $81.57

Golden State

Monthly





CCFTotal Charges

14 $3.50 $36.66 $49.00 $85.66

15 $4.88 $36.66 $53.88 $90.54

Rowland Water District

Monthly





CCFTotal Charges

14 $3.22 $49.10 $45.08 $94.18

15 $4.12 $49.10 $49.20 $98.30

Suburban Water System (West Covina)

Monthly




Proposed Tier 2 Rates

15+ Per HCFTotal Charges

14 $2.96 $53.15 $41.44 $94.59

15 $3.99 $53.15 $45.43 $98.58

City of Monrovia

Monthly



Charge

Proposed Tier 1 Rates 0 -14

Per HCF


CCFTotal Charges

14 $2.47 $51.02 $34.58 $85.60

15 $3.37 $51.02 $37.95 $88.97

City of Monterey Park

Monthly





CCFTotal Charges

14 $2.71 $46.16 $37.94 $84.10

15 $3.37 $46.16 $41.31 $87.47

City of Covina

Monthly


Proposed 3/4 Monthly Meter

+ CIP Charge Tier 1 Rates 0 -14 Per CCF


CCF

Total Proposed

Charges

14 $2.86 $36.22 $40.04 $76.26

15 $3.36 $36.22 $43.40 $79.62

Attachment E: Rate Comparison of City of Covina verses Local Area Purveyors

for a Single Family Residence with 3/4" Meter

Page 87 of 93

NOTICE OF PUBLIC HEARING OF THE CITY OF COVINA REGARDING

PROPOSED ADOPTION OF WATER SERVICE CHARGE INCREASES

NOTICE IS HEREBY GIVEN that the City of Covina will hold Public Hearing on February 16, 2021 at 7:30 p.m. to

consider the adoption of proposed increases to water service charges. Due to the COVID-19 pandemic public health orders,

which limit in-person public meetings, the public hearing will be held either in the City Council Chambers, located at 125

E. College Street, Covina, CA 91723, or in another manner specified in the meeting agenda. Please check the February 16,

2021 City Council agenda once it is posted on the City’s website for information as to how to participate in the City Council

meeting.

Additionally, on January 5, 2021 at 5:30 p.m. staff will conduct a virtual zoom presentation of the water rate study and

proposed rate increase and will be available to answer questions. To join the meeting please use the following link:

https://us02web.zoom.us/j/87537508817?pwd=US9EMG42OXpCTmgvRnZZNlR1b0ZLUT09 or you can call into the

meeting using the following phone number 1-669-900-6833 with meeting ID 875 3750 8817 and Pass Code 735803.

Basis upon which the Charge is Calculated. The City imposes a monthly charge for water services. The monthly charge

is comprised of: (1) a fixed service charge based on the size of the water meter; and (2) a variable use charge based on the

amount of water that a customer uses. The variable use charge is measured in hundred cubic feet (CCF). One (1) CCF

equals 748 gallons.

Reason for the Increase. The City conducted a study to determine the cost of providing water service to the City’s

customers. The study recommended that the City increase its current water service charges based upon increased costs for

purchased water, increased operating costs, capital program requirements, infrastructure maintenance and repair, capital

improvement bond requirements and reasonable reserve requirements.

Amount of Proposed Monthly Water Service Charges. The following tables provide the proposed increase for water

service charges for all customers, which would take effect on February 21, 2021. In addition, the City proposes to approve

a schedule of annual water increases effective on January 1, 2022, January 1, 2023, January 1, 2024, and January 1, 2025.

Monthly Fixed Service

Charge by Meter Size Current Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

5/8 and 3/4 inch $35.78 $36.22 $37.67 $39.18 $40.75 $42.38

1 inch $55.80 $56.74 $59.01 $61.38 $63.84 $66.40

1-1/2" inch $89.15 $103.65 $107.80 $112.12 $116.61 $121.28

2 inch $147.70 $162.30 $168.80 $175.56 $182.59 $189.90

3 inch $276.95 $349.95 $363.95 $378.51 $393.66 $409.41

4 inch $461.55 $622.64 $647.55 $673.46 $700.40 $728.42

6 inch $923.13 $1,376.19 $1,431.24 $1,488.49 $1,548.03 $1,609.96

Variable Use Charge by

Customer Class Current Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

Single Family

Tier 1 **: 0-14 CCF $2.71 $2.86 $2.98 $3.10 $3.23 $3.36

Tier 2: >14 CCF $3.02 $3.36 $3.50 $3.64 $3.79 $3.95

Page 88 of 93

https://us02web.zoom.us/j/87537508817?pwd=US9EMG42OXpCTmgvRnZZNlR1b0ZLUT09

nalvarez

Typewritten Text

Attachment F

nalvarez

Typewritten Text

Variable Use Charge by

Customer Class (Cont.) Current Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

Multi-Family

Uniform Rate 2.89 * $2.99 $3.11 $3.24 $3.37 $3.51

Commercial/Institutional $3.16 $3.01 $3.14 $3.27 $3.41 $3.55

Industrial/Manufacturing $2.74 $3.01 $3.14 $3.27 $3.41 $3.55

Irrigation/Landscaping $3.16 $3.05 $3.18 $3.31 $3.45 $3.59

City/Miscellaneous $2.75 $3.01 $3.14 $3.27 $3.41 $3.55

Construction $2.37 $3.10 $3.23 $3.36 $3.50 $3.64

* Current Multi-Family rate is shown as the blended rate of the two-tiered rates.

** Currently the first tier is 0-16 CCF and second tier is greater than 16 CCF per month.

The City also provides private fireline service to only specific customers. Therefore, the City has updated the fireline service

charge. Private fire service connections are typically associated with fire sprinkler systems. The fixed charge by meter size

will increase as shown in the tables below.

Fireline Service (Monthly Fixed Charge) are assessed to customers who have private fire service connections.

Monthly Fireline

Service Charge Current

Charge Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

2 inch $21.71 $20.09 $20.90 $21.74 $22.61 $23.52

3 inch $63.09 $45.24 $47.05 $48.94 $50.90 $52.94

4 inch $134.46 $88.60 $92.15 $95.84 $99.68 $103.67

6 inch $241.80 $244.24 $254.01 $264.18 $274.75 $285.74

8 inch $241.80 $512.69 $533.20 $554.53 $576.72 $599.79

10 inch $241.80 $916.49 $953.15 $991.28 $1,030.94 $1,072.18

Public Hearing and Protest Process

At the public hearing, the City Council will hear and consider all objections or protests to the proposed charges any property

owner or property tenant that is directly responsible for payment of water service charges may submit a written protest

against the proposed charges. A majority protest exists if at the end of the public hearing, there are written protests submitted

by the owners of a majority of the parcels subject to the proposed increase. No more than one written protest per parcel of

property will be counted in calculating a majority protest. The City Council cannot adopt the proposed increase if a majority

protest exists.

Written protests may be mailed or personally delivered to the City Clerk, Covina City Hall, 125 E. College Street, Covina,

CA 91723. To be counted, the protest must (1) be in writing, (2) state opposition to the proposed water charge increase, (3)

identify the parcel (by assessor’s parcel number or street address), (4) include the original signature of the water customer

submitting the protest, and (5) be received before the conclusion of the Public Hearing on February 16, 2021. To avoid

physical contact, the City strongly encourages you to submit your written protests by mail with sufficient time to arrive at

City Hall prior to the public hearing. Protests which are mailed to City Hall must arrive at City Hall prior to 5:30 pm on

February 16, 2021 to be counted. If you would like to personally deliver a written protest, please contact the City Clerk at

626-384-5430 to make arrangements for the personal delivery of the written protest. If you would like to submit a written

protest during the public hearing, you will need to deliver a copy of your written protest by e-mail to the City Clerk at

[email protected] and include “Written Protest” in the subject line. Written protests which are emailed to the City

Clerk during the public hearing must be received before the close of the public hearing to be counted. All written protests,

including those received by email during the public hearing, must include a signature of the owner to be counted.

For questions or additional information regarding the proposed increases to water service charges, you may call the Public

Works Department at (626) 384-5219.

Page 89 of 93




CALIFORNIA, INCREASING THE CITY'S WATER UTILITY SERVICE

RATES AND CHARGES EFFECTIVE FEBRUARY 21, 2021.

WHEREAS, the City or Covina ("City") operates a municipal water system that delivers

water to residential and commercial customers within the City's service area; and

WHEREAS, due to increasing costs or operating the water system including, but not

limited to, costs of purchasing water, costs for facilities and equipment maintenance, costs for

capital projects and financing, and costs for billing and account management, the current level of

water service rates and charges (hereinafter collectively referred to as "rates") is insufficient to

recover the total costs of operating the water system; and

WHEREAS, the City desires to pass-through the increased costs of operating the water

system to residential and commercial customers who directly use the water system; and

WHEREAS, the City proposes to increase its water service rates in accordance with

California Health & Safety Code, Section 5471 in an amount that corresponds to the amount

necessary for the acquisition, treatment, and delivery of water through the City's water system.

Therefore, the City Council finds, with respect to the revenue derived from the increased rates,

that (l) there is a reasonable relationship between the use of the rates increased herein and the

services for which they are imposed; (2) the revenue derived from the increased rates does not

exceed the amount necessary to provide the services; (3) the increased rates shall not be used for

any purpose other than that for which the rates are imposed; (4) the increased rates do not exceed

the proportional cost of the services attributable to each customer, and (5) the increased rates are

not levied for general governmental purposes; and

WHEREAS, pursuant to California Proposition 218 (Calif. Constitution, Article XIIID,

Section 6) and California Assembly Bill 1260 (Calif. Government Code, Section 53755) at least

45 days prior to the hearing on this Resolution, the City has mailed, postage prepaid, a notice of

the public hearing on the proposed water rate increase to the address to which the City customarily

mails the water service bill, for each identified parcel upon which the increased rates are being

proposed, and

WHEREAS, said notice identified: (l) the amount of the increased rate to be charged; (2)

the basis upon which the rate increase was calculated; (3) the reason for the rate increase; and (4)

the date, time, and location for the public hearing on the rate increase; and

WHEREAS, on February 16, 2021, at 7:30 p.m., the City Council conducted a duly noticed

public hearing at which time all those wishing to be heard were afforded an opportunity to be

heard, and at which time the City Council considered any and all written protests concerning the

proposed water rate increase; and

Page 90 of 93

fvelez

Typewritten Text

Attachment G


WHEREAS, the City did not receive written protests from a majority of the identified

parcels that would be subject to the proposed rate increase; and

WHEREAS, all other prerequisites to the adoption of this Resolution have occurred.



SECTION 1. Based on the written and verbal evidence presented to the City Council, the

amounts of the water service rates, as set forth in Exhibit "A", attached hereto and incorporated by

reference herein, are hereby approved and adopted by the City Council of the City of Covina. The

water service rates set forth herein shall become effective February 21, 2021.

SECTION 2. Pursuant to Section .21080(b)(8) of the Public Resources Code, and Section

15273(a) of the Guidelines for the Implementation of the California Environmental Quality Act

("CEQA"), further review under CEQA is not required because the City Council action increasing

water service rates within the City is for the purpose of (i) meeting water system operating

expenses, (ii) purchasing or leasing supplies, equipment, or materials for the water system, and

(iii) obtaining funds for capital projects necessary to maintain water system service. The City Clerk

is hereby directed to file a Notice of Exemption with the County Clerk within five (5) days

following the date of this Resolution.

SECTION 3. The City Clerk shall certify to the passage and adoption of this Resolution;

shall cause the same to be entered in the Book of Resolutions of the City of Covina; and shall make

a record of the passage and adoption thereof in the records of the proceedings of the City Council

of said City in the minutes of the meeting at which the same was passed and adopted.

SECTION 4. This Resolution shall take effect immediately.

SECTION 5. If any section, sub-section, sentence, clause, phrase or portion of this

Resolution is for any reason held to be invalid or unconstitutional by the decision of any court of

competent jurisdiction, such decision shall not affect the validity of the remaining portions of the

Resolution. The City Council hereby declares that it would have adopted the Resolution and each

section, sub-section, sentence, clause, phrase or portion thereof, irrespective of the fact that any

one or more sections, sub-sections, sentences, clauses, phrases or portions to be declared invalid

or unconstitutional.



BY:


Page 91 of 93


ATTEST:



CERTIFICATION



regular meeting held on the 16th of February, 2021, by the following vote:





Dated:

_______________________________________



Page 92 of 93


City of Covina Proposed Water Rates

2/21/2021 -1/1/2025

Monthly Service charges ($/meter size)

A B D E F G H

Line Meter Size Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

1 5/8" and 3/4" $36.22 $37.67 $39.18 $40.75 $42.38

2 1" $56.74 $59.01 $61.38 $63.84 $66.40

3 1-1/2" $103.65 $107.80 $112.12 $116.61 $121.28

4 2" $162.30 $168.80 $175.56 $182.59 $189.90

5 3" $349.95 $363.95 $378.51 $393.66 $409.41

6 4" $622.64 $647.55 $673.46 $700.40 $728.42

7 6" $1,376.19 $1,431.24 $1,488.49 $1,548.03 $1,609.96

Monthly Fire Service Charges ($/line size)

A B C D E F G

Line Fire Line Size Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

1 2" $20.09 $20.90 $21.74 $22.61 $23.52

2 3" $45.24 $47.05 $48.94 $50.90 $52.94

3 4" $88.60 $92.15 $95.84 $99.68 $103.67

4 6" $244.24 $254.01 $264.18 $274.75 $285.74

5 8" $512.69 $533.20 $554.53 $576.72 $599.79

6 10" $916.49 $953.15 $991.28 $1,030.94 $1,072.18

Proposed Consumption Rates ($/CCF)

Line Customer Class

Monthly

Tiers

(CCF)

Feb 21, 2021 Jan 1, 2022 Jan 1, 2023 Jan 1, 2024 Jan 1, 2025

1 Single Family

2 Tier 1 0-14 CCF $2.86 $2.98 $3.10 $3.23 $3.36

3 Tier 2 15+ CCF* $3.36 $3.50 $3.64 $3.79 $3.95

4 Multi-Family

5 Uniform Rate

$2.99 $3.11 $3.24 $3.37 $3.51

6 Commercial/Institutional

$3.01 $3.14 $3.27 $3.41 $3.55

7 Industrial/Manufacturing

$3.01 $3.14 $3.27 $3.41 $3.55

8 Irrigation/Landscaping

$3.05 $3.18 $3.31 $3.45 $3.59

9 City/Miscellaneous

$3.01 $3.14 $3.27 $3.41 $3.55

10 Construction $3.10 $3.23 $3.36 $3.50 $3.64

* Current Single Family first tier is 0-16 CCF and second tier is for use greater than 16 CCF

** Current Multi-Family rate is shown as the blended rate of the two-tiered rate

Page 93 of 93