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HomeMy WebLinkAbout2022/04/26 Post-Meeting Agenda Packet REGULAR MEETING OF THE CITY COUNCIL **POST AGENDA** Date:Tuesday, April 26, 2022, 5:00 p.m. Location:Council Chambers, 276 Fourth Avenue, Chula Vista, CA View the Meeting Live in English & Spanish: chulavistaca.gov/councilmeetings AT&T U-verse ch. 99 (San Diego County) & Cox ch. 24 (Chula Vista) in English only Welcome to your City Council Meeting PUBLIC COMMENTS: Public comments may be submitted to the City Council in the following ways: In-Person. The community is welcome to make public comments at this City Council meeting. Comments via eComment (instructions below) are encouraged. • Submit an eComment: Visit www.chulavistaca.gov/councilmeetings, locate the meeting and click the comment bubble icon. Select the item and click "Leave Comment." eComments can be submitted until the conclusion of public comments for the item and are viewable online upon submittal. If you have difficulty submitting eComments, email comments to: cityclerk@chulavistaca.gov • HOW TO WATCH: Live stream is available at www.chulavistaca.gov/councilmeetings. To switch the video to Spanish, please click on "ES" in the bottom right hand corner. Meetings are available anytime on the City's website (English and Spanish). ACCESSIBILITY: Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk’s Office at cityclerk@chulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at least forty-eight hours in advance of the meeting. SPEAKER TIME LIMITS: The time allotted for speakers may be adjusted by the Mayor. - Five minutes* for specific items listed on the agenda - Three minutes* for items NOT on the agenda (called to speak during Public Comments) - A group of individuals may select a spokesperson to speak on their behalf on an agenda item, waiving their option to speak individually on the same item. Generally, five minutes are allotted per person, up to a limit of 30 minutes, although the limits may be adjusted. Members of the group must be present. *Individuals who use a translator will be allotted twice the amount of time. GETTING TO KNOW YOUR AGENDA Agenda Sections: CONSENT CALENDAR items are routine items that are not expected to prompt discussion. All items are considered for approval at the same time with one vote. Councilmembers and staff may request items be removed and members of the public may submit a speaker slip if they wish to comment on an item. Items removed from the Consent Calendar are discussed after the vote on the remaining Consent Calendar items. PUBLIC COMMENT provides the public with an opportunity to address the Council on any matter not listed on the agenda that is within the jurisdiction of the Council. In compliance with the Brown Act, the Council cannot take action on matters not listed on the agenda. PUBLIC HEARINGS are held on matters specifically required by law. The Mayor opens the public hearing and asks for presentations from staff and from the proponent or applicant involved (if applicable) in the matter under discussion. Following questions from the Councilmembers, the Mayor opens the public hearing and asks for public comments. The hearing is closed, and the City Council may discuss and take action. ACTION ITEMS are items that are expected to cause discussion and/or action by the Council but do not legally require a Public Hearing. Staff may make a presentation and Councilmembers may ask questions of staff and the involved parties before the Mayor invites the public to provide input. CLOSED SESSION may only be attended by members of the Council, support staff, and/or legal counsel. The most common purpose of a Closed Session is to avoid revealing confidential information that may prejudice the legal or negotiating position of the City or compromise the privacy interests of employees. Closed sessions may be held only as specifically authorized by law. Council Actions: RESOLUTIONS are formal expressions of opinion or intention of the Council and are usually effective immediately. ORDINANCES are laws adopted by the Council. Ordinances usually amend, repeal or supplement the Municipal Code; provide zoning specifications; or appropriate money for specific purposes. Most ordinances require two hearings: an introductory hearing, generally followed by a second hearing at the next regular meeting. Most ordinances go into effect 30 days after the final approval. PROCLAMATIONS are issued by the City to honor significant achievements by community members, highlight an event, promote awareness of community issues, and recognize City employees. 2022/04/26 City Council Post Agenda Page 2 of 667 Pages 1.CALL TO ORDER 2.ROLL CALL 3.PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE 4.SPECIAL ORDERS OF THE DAY 4.1.Oaths of Office Timothy Aufmuth - Commission on Aging Ed Flores - Safety Commission 4.2.Update by Regional Sustainability San Diego County Program Manager Murtaza H. Baxamusa on Local Policy Opportunity Analysis "A Partnership to Move the Region to Zero Carbon" 11 4.3.Presentation of a Proclamation Proclaiming April 27 through April 28, 2022 as the Day of Remembrance in the City of Chula Vista 5.CONSENT CALENDAR (Items 5.1 through 5.9) All items listed under the Consent Calendar are considered and acted upon by one motion. Anyone may request an item be removed for separate consideration. RECOMMENDED ACTION: Council approve the recommended action on the below consent calendar items. 5.1.Approval of Meeting Minutes 89 RECOMMENDED ACTION: Approve the minutes dated: August 24, September 14, and 28, 2021 5.2.Waive Reading of Text of Resolutions and Ordinances RECOMMENDED ACTION: Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. 5.3.Consideration of Requests for Excused Absences RECOMMENDED ACTION: Consider requests for excused absences as appropriate. 2022/04/26 City Council Post Agenda Page 3 of 667 5.4.Temporary Road Closure: Approve a Temporary Closure of Park Way for a Weekly Third Avenue Village Farmers Market from Third Avenue to Fourth Avenue on Sundays from 7 a.m. to 4 p.m. 122 Report Number: 22-0115 Location: Within the Third Avenue Village on Park Way from Third Avenue to Fourth Avenue Department: Economic Development and City Manager Environmental Notice: The Project qualifies for a Categorical Exemption pursuant to the California Environmental Quality Act State Guidelines Section 15301 Class 1 (Existing Facilities), Section 15304 Class 4 (Minor Alterations to Land), and Section 15061(b)(3). RECOMMENDED ACTION: Adopt a resolution approving a temporary closure of the westbound lane of Park Way, north of the median, for a weekly Third Avenue Village Farmers Market from Third Avenue to Fourth Avenue on Sundays from 7 a.m. to 4 p.m. through April 30, 2023, subject to conditions of approval, and waiving all City fees. 5.5.Contract Award: Award a Contract to Iteris, Inc. to Perform Traffic Signal Retiming Services 133 Report Number: 22-0107 Location: East of I-805 Department: Engineering Environmental Notice: The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act State Guidelines. RECOMMENDED ACTION: Adopt a resolution awarding a professional services contract to Iteris, Inc. to perform traffic signal retiming services for the portion of Chula Vista generally east of Interstate 805. 5.6.Agreement and Reallocation: Amend the American Rescue Plan Act Spending Plan, Authorize an Amendment and Subrecipient Agreement with SBCS for the Domestic Violence Program, and Reallocate Funds for that Purpose 164 Report Number: 22-0116 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the CEQA State Guidelines. 2022/04/26 City Council Post Agenda Page 4 of 667 RECOMMENDED ACTION: Approve a resolution (1) amending the American Rescue Plan Act (“ARPA”) Spending Plan; (2) approving a subrecipient agreement with the SBCS Domestic Violence Program; and (3) reallocating funds for that purpose. 5.7.Contract: Approve Contract with Ace Parking, Inc. for Third Avenue Parking District Management and Enforcement for Fiscal Year 2022 185 Report Number: 22-0122 Location: Third Avenue boarded between E Street, Del Mar Ave, H Street and Garrett Avenue Department: Finance Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution waiving the competitive bidding process as outlined in Municipal Code Section 2.56.070.B.3, and approving an agreement with Ace Parking, Inc. 5.8.Aerial Truck Purchase: Approval of the Purchase of One Pierce Arrow XT 107’ Tractor Drawn Aerial through Measure P 209 Report Number: 22-0129 Location: No specific geographic location Department: Fire Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution approving the purchase of one Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) in compliance with the Measure P Expenditure Plan. 5.9.Measure A Public Safety Expenditure Plan: Amend the Measure A Public Safety Expenditure Plan to Purchase Five Vehicles for the Police Department 214 Report Number: 22-0132 Location: No specific geographic location Department: Police Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. 2022/04/26 City Council Post Agenda Page 5 of 667 RECOMMENDED ACTION: Adopt a resolution approving the amended Measure A Public Safety Expenditure Plan, to purchase five vehicles for the Police Department and amending the Fiscal Year 2022 expenditure budget for the Measure A Sales Tax Fund to fund the vehicles out of the Measure A fund. (4/5 Vote Required) 6.PUBLIC COMMENTS The public may address the Council on any matter within the jurisdiction of the Council but not on the agenda. 7.PUBLIC HEARINGS The following item(s) have been advertised as public hearing(s) as required by law. 7.1.Community Facilities District Annexation: Election Regarding Annexation of Otay Ranch Village 3 Neighborhood R-20 into Community Facilities District 97-2 222 Report Number: 22-0064 Location: Located generally near the intersection of Main Street and Heritage Road, as shown more particularly on the annexation map Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Conduct the public hearing and adopt resolutions: A) Making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors within proposed Annexation No. 12 to Community Facilities District (“CFD 97-2”), Improvement Area “C,” and B) Declaring the results of the special election relating to the levy of special taxes within Annexation No. 12 to CFD 97-2, Improvement Area “C.” 7.2.Community Facilities District Annexation: Election Regarding Annexation of Otay Ranch Village 3 Neighborhood R-20 into Community Facility District 18M 265 Report Number: 22-0094 Location: Located generally near the intersection of Main Street and Heritage Road, as shown more particularly on the annexation map Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. 2022/04/26 City Council Post Agenda Page 6 of 667 RECOMMENDED ACTION: Conduct the public hearing and adopt resolutions: A) Making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors within proposed Annexation No. 1 to CFD 18M; and B) Declaring the results of the special election relating to the levy of special taxes within Annexation No. 1 to CFD 18M. 7.3.Municipal Code Amendment: Amend the Chula Vista Municipal Code Related to Allowing Two-Unit Developments and Urban Lot Splits, as Required by Senate Bill 9, Recent State Legislation adopted to Increase Housing Opportunities 301 Report Number: 22-0095 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: To place the above ordinance on first reading, heading read, text waived. The motion was carried by the following vote: 7.4.Military Equipment Policy: Consideration of Approving the Chula Vista Police Department’s Military Equipment Policy 336 Report Number: 22-0123 Location: No specific geographic location Department: Police Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: To place the above ordinance on first reading, heading read, text waived. The motion was carried by the following vote: 2022/04/26 City Council Post Agenda Page 7 of 667 7.5.Sewer Rates: Consider Increase to Sewer Rates and Resolution Adopting Sewer Rate Increases and Approving Other Sewer Rate Study Recommendations 399 Report Number: 22-0007 Location: No specific geographic location Department: Engineering Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Adopt a resolution: (1) accepting the Sewer Rate Study (Study); (2) approving the Study’s recommendations for fiscal years 2021/22 through 2025/26; (3) adopting increased sewer rates and approving amendments to the Master Fee Schedule; (4) authorizing the pass-through of all future fees and charges imposed for wholesale charges for sewage treatment or wastewater treatment; (5) approving amendments to City Council Policy 220-04; (6) authorizing an increase to the service charge revenue allocations to the Sewerage Facilities Replacement Fund; and (7) appropriating 6 million dollars from the Trunk Sewer Capital Fund to the Sewer Service Revenue Fund to fund Metro capital expenses. (4/5 Vote Required) 7.6.Vacation of Streets: Approve Vacations of a Portion of Marina Parkway and a Portion of G Street as Part of the Bayfront Development Location: Portions of the existing Marina Pkwy. and G St. Department: Economic Development Environmental Notice: The Project was adequately covered in previously certified Final Environmental Impact Report UPD#83356-EIR-658; SCH No. 2005081077 for the Chula Vista Bayfront Master Plan. RECOMMENDED ACTION: This item has been continued to the 5/10/2022 meeting. 8.ACTION ITEMS The following item(s) will be considered individually and are expected to elicit discussion and deliberation. 2022/04/26 City Council Post Agenda Page 8 of 667 8.1.Contract Amendment: Approve an Amendment to the Contract with the Board of Administration and CalPERS for Local Safety Police Officer’s Association Classic Members to Make an Additional Contribution Pursuant to Government Code Section §20516 604 Report Number: 22-0120 Location: No specific geographic location Department: Human Resources Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: A) Adopt a resolution of intention to approve an amendment to the contract between the Board of Administration, California Public Employees’ Retirement System (CalPERS) and the City of Chula Vista to provide a mandatory employee contribution for all classic Local Safety members of the Chula Vista Police Officers’ Association of 1% of salary effective July 1, 2022, as provided under Government Code §20516, and B) introduce an ordinance approving an amendment to the contract between the Board of Administration, California Public Employees’ Retirement System (CalPERS) and the City of Chula Vista to provide a mandatory employee contribution for all classic Local Safety members of the Chula Vista Police Officers Association of 1% of salary as provided under Government Code §20516. (First Reading) 8.2.San Diego Community Power: Presentation by San Diego Community Power Chief Operating Officer Cody Hooven Regarding the Residential Power Launch in Chula Vista 621 Report Number: 22-0128 Location: No specific geographic location Department: Economic Development Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. RECOMMENDED ACTION: Hear the presentation. 9.CITY MANAGER’S REPORTS 10.MAYOR’S REPORTS 2022/04/26 City Council Post Agenda Page 9 of 667 10.1.Ratification of Appointment to the Following Boards & Commissions:637 Beatrice Zamora-Aguilar - Cultural Arts Commission Daniel Zavala - Cultural Arts Commission Arnold Luke - Safety Commission William Sallee - Measure A Citizens Oversight Committee 11.COUNCILMEMBERS’ COMMENTS 12.CITY ATTORNEY'S REPORTS 13.CLOSED SESSION Announcements of actions taken in Closed Sessions shall be made available by noon on the next business day following the Council meeting at the City Attorney's office in accordance with the Ralph M. Brown Act (Government Code 54957.7) 13.1.Conference with Legal Counsel Regarding Existing Litigation Pursuant to Government Code Section54956.9(d)(1): A) Name of case: Diana Watts, et al. v. City of Chula Vista, et al., San Diego Superior Court, Case No. 37-2019-00054127-CU-PO-CTL. B) Name of case: City of Chula Vista and Chula Vista Redevelopment Agency Successor Agency v. Keely Bosler, in her official capacity as California State Director of Finance; Tracy M. Sandoval, in her official capacity as San Diego Auditor-Controller; Sacramento Superior Court Case No. 34-2019-80003123 and Court of Appeal, Third Appellate District, Court No. C094237. 14.ADJOURNMENT in memory of Harry Rosen a Holocaust Survivor, to the regular City Council meeting on May 3, 2022 at 5:00 p.m. in the Council Chambers. Materials provided to the City Council related to an open session item on this agenda are available for public review, please contact the Office of the City Clerk at cityclerk@chulavistaca.gov or (619) 691-5041. Sign up at www.chulavistaca.gov to receive email notifications when City Council agendas are published online. 2022/04/26 City Council Post Agenda Page 10 of 667 San Diego Regional Decarbonization Framework Summary for Policy Makers March 2022 DRAFT – NOT FOR CITATION Item 4.1 2022/04/26 City Council Post Agenda Page 11 of 667 DRAFT – NOT FOR CITATION 1 Project Team Project Director Gordon C. McCord Director, SDG Policy Initiative School of Global Policy and Strategy, University of California San Diego (UC San Diego) Project Manager Elise Hanson, UC San Diego San Diego County Representatives Sarah Aghassi, Deputy Chief Administrative Officer, Land Use and Environment Group (LUEG) Murtaza Baxamusa, Program Manager for Regional Sustainability, LUEG Rebeca Appel, Program Coordinator, LUEG Nicole Boghossian Ambrose, Group Program Manager, LUEG RDF Technical Analysis Chapter Authors: Study Approach Ryan Jones, Evolved Energy Research Geospatial Analysis of Renewable Energy Production Emily Leslie, Montara Mountain Energy Joseph Bettles, UC San Diego Accelerating Deep Decarbonization in the Transportation Sector Katy Cole, Fehr & Peers Chelsea Richer, Fehr & Peers Eleanor Hunts, Fehr & Peers Decarbonization of Buildings Asa Hopkins, Synapse Energy Economics Philip Eash-Gates, Synapse Energy Economics Jason Frost, Synapse Energy Economics Shelley Kwok, Synapse Energy Economics Jackie Litynski, Synapse Energy Economics Kenji Takahashi, Synapse Energy Economics Item 4.1 2022/04/26 City Council Post Agenda Page 12 of 667 DRAFT – NOT FOR CITATION 2 Natural Climate Solutions and other Land Use Considerations Elise Hanson, UC San Diego Emily Leslie, Montara Mountain Energy Employment Impacts through Decarbonization in the San Diego Region Robert Pollin, PERI, University of Massachusetts Amherst Jeannette Wicks-Lim, PERI, University of Massachusetts Amherst Shouvik Chakraborty, PERI, University of Massachusetts Amherst Gregor Semieniuk, PERI, University of Massachusetts Amherst Key Policy Considerations for the San Diego Region Joseph Bettles, UC San Diego Gordon C. McCord, UC San Diego David G. Victor, UC San Diego Emily Carlton, UC San Diego Local Policy Opportunity Analysis Scott Anders, Energy Policy Initiatives Center, University of San Diego Nilmini Silva Send, Energy Policy Initiatives Center, University of San Diego Joseph Kaatz, Energy Policy Initiatives Center, University of San Diego Yichao Gu, Energy Policy Initiatives Center, University of San Diego Marc Steele, Energy Policy Initiatives Center, University of San Diego The San Diego Region as a Model Elena Crete, UN Sustainable Development Solutions Network (SDSN) Julie Topf, UN Sustainable Development Solutions Network (SDSN) Appendix A: Summary of Statewide Energy System Modeling Ryan Jones, Evolved Energy Appendix B: Review of Authority for Local Jurisdictions and Agencies to Influence and Regulate GHG Emissions Joseph Kaatz, Energy Policy Initiatives Center, University of San Diego Acknowledgements: The RDF team thanks David Victor for his advisory role across the project, as well as Joseph Bettles, Tyler Spencer, Emily Carlton, and Elissa Bozhkov for research and editorial support. Item 4.1 2022/04/26 City Council Post Agenda Page 13 of 667 DRAFT – NOT FOR CITATION 3 Summary for Policy Makers The global scientific consensus is unequivocal: the world is in the midst of a climate crisis and our window to meaningfully reduce greenhouse gas emissions (GHGs) is closing.i Human activities and influence have warmed the atmosphere, ocean, and land through rapid accumulations of GHGs in the atmosphere and the ocean, causing rapid and alarming changes. Global agreements, like the Paris Climate Agreement, and California executive orders recognize the immediacy of decarbonization required across industries. Where past diplomatic efforts have failed to achieve enough progress on climate change, regional models of problem-solving that account for both global commitments and local needs can emerge as a more effective approach. The San Diego Regional Decarbonization Framework (RDF) Technical Analysis provides technical and policy pathways to decarbonization in the medium-term to inform near-term policy-making in regional, county, and city governments. The report models science-based pathways to net zero carbon emissions for the region by 2045, which is consistent with the Paris Climate Agreement and with State mandates. The pathways can provide a shared vision for the San Diego region towards collectively reducing net GHG emissions such that they align with State goals for net zero. This report is a technical analysis of how different se ctors in the energy system can contribute to decarbonization, but it does not identify the “right” pathway and instead shows multiple ways forward to highlight tradeoffs, co-benefits, decision points, risks, and synergies. This analysis is meant to be constantly updated as technologies evolve or as uncertainties are resolved or clarified, and the report explores policy processes that will help jurisdictions in the region learn about uncertainties and adjust strategies in light of new information. Study Framework and Key Policy Considerations This report looks at ways to reduce carbon emissions in San Diego’s regional energy system, which is defined as the total production and consumption of energy in the electric power, transportation, and buildings sectors, to align with State and national pathways to reach net zero. By “net zero,” this report means that human-caused carbon dioxide (CO2) emissions from the energy system equal human-caused CO2 removal and storage and therefore do not i Intergovernmental Panel on Climate Change (IPCC), “Climate Change 2022: Impacts, Adaptation, and Vulnerability. Summary for Policymakers.” WGII Sixth Assessment Report, February 2022. Available at: https://report.ipcc.ch/ar6wg2/pdf/IPCC_AR6_WGII_FinalDraft_FullReport.pdf Item 4.1 2022/04/26 City Council Post Agenda Page 14 of 667 DRAFT – NOT FOR CITATION 4 contribute net emissions to the atmosphere.ii The RDF Technical Analysis does not rely on offsets outside the San Diego region to reach net zero targets. It is important to note that there are emissions from other sectors, such as waste, that were not included in this analysis. The RDF Technical Analysis’s decarbonization pathways were modeled from larger national and State deep decarbonization scenarios to ensure that the San Diego regional pathways are aligned with Statewide pathways to decarbonization. Evolved Energy Research (EER) developed these regional models under five model cases (sometimes referred to as scenarios).iii The models of deep decarbonization, which is the process of drastically reducing carbon dioxide and other greenhouse gas emissions throughout the economy, allow for quantitative comparative analyses of regional policy options and decarbonization outcomes in different sectors. An example of EER’s modeling outputs for the energy sector show how the different model cases will affect Statewide decarbonization in both the total installed electricity capacity required (Figure 1) and the energy and industry CO2 emissions that occur through 2050 (Figure 2). Using these downscaled models is also important because local energy and transportation systems are interconnected with other regions and states, so regional jurisdictions should move in unison with other regional and state jurisdictions as they decarbonize. Figure 1. Results for the total installed electricity capacity required in California to reach net zero Statewide emissions by 2050 under five different model scenarios in the EER model. More information about the EER model, downscaling, and model cases is available in Appendix A. ii Note that the energy system modeling only considers CO2 emissions, where the natural climate solutions and Climate Action Plan analyses consider other greenhouse gases as well, including methane, nitrous oxides, ozone, etc. These GHGs are converted to their “carbon dioxide equivalent” (CO2e) for easier comparison. iii More details on the model cases can be found in Chapter 1 and Appendix A. Item 4.1 2022/04/26 City Council Post Agenda Page 15 of 667 DRAFT – NOT FOR CITATION 5 Figure 2. Results for CO2 emissions from energy and industrial processes in California from the EER model. Colors above the x-axis represent positive emissions, and colors below represent offsetting negative emissions. The black line indicates net CO2 emissions. “Product and bunkered CO2“ is either CO2 that ends up sequestered in materials (e.g., asphalt sequesters CO2 during its production) or CO2 reductions not counted in current inventories (e.g., interstate aviation emissions reductions are not included in a single state’s emis sions accounting, but intrastate aviation is). Experts in renewable energy production, transportation, and buildings modeled technically feasible decarbonization pathways for the region to create a science-based roadmap of regional decarbonization to net zero emissions by mid-century. These models focused on proven, scalable technologies for decarbonizing the region’s largest GHG emitters (Figure 3) that are within the jurisdiction of local governments and agencies. Thus, technologies that are still in experimental or early phases were not included because they cannot immediately be deployed at scale by regional authorities. Similarly, resource deployments in State and federal waters were not included except to give context to the resource availability in the San Diego region. Item 4.1 2022/04/26 City Council Post Agenda Page 16 of 667 DRAFT – NOT FOR CITATION 6 Figure 3. Region-wide estimates of the emissions of carbon dioxide equivalent (CO2e) measured in million metric tons. The “other” category includes emissions from industrial sources, off-road transportation, waste, aviation, water, etc., which were not considered in the RDF Technical Analysis. Note that 2035 values account for the impacts of certain State and federal actions. Source: the SANDAG 2021 Regional Plan’s Appendix X, available here: https://sdforward.com/docs/default-source/2021-regional-plan/appendix-x---2016-greenhouse-gas-emissions- inventory-and-projections-for-the-san-diego-region.pdf?sfvrsn=8444fd65_2 Additionally, the RDF Technical Analysis highlights uncertainties in the decarbonization process and the need for ongoing planning processes that can adapt as the technology and policy landscapes evolve. For example, increased renewable energy availability from Imperial County or Mexico may affect the San Diego region’s renewable energy mix, which could avoid the need to build higher-cost renewable energy infrastructure locally. Similarly, State and/or Federal development of offshore wind could reduce the need for land -based renewable infrastructure development in the San Diego region. Therefore, the decision -making systems developed from the RDF Technical Analysis’s findings should allow for continuous updating as technology and policy landscapes change. Key Policy Considerations Successful decarbonization will require technical solutions as well as policy strategies that can adapt with scientific advances as well as local political and economic conditions. The RDF technical analysis provides the best assessment of least cost and most effective near-term solutions for reducing emissions in each sector. These “low-regrets” actions will be robust decarbonization actions in the near-term regardless of how uncertainty is resolved, but whether they are the best pathways over the long term is still unknown. Effective learning and policy adjustment requires that local actors – both leaders and people on the front-line – first Item 4.1 2022/04/26 City Council Post Agenda Page 17 of 667 DRAFT – NOT FOR CITATION 7 implement solutions and then engage in systematic and continuous review of results to drive meaningful learning about what works and what doesn’t. The “best” solutions and pathways can and should evolve over time as science and technology advance and as local actors learn what is effective in the San Diego context. The RDF Technical Analysis proposes region-wide institutional governance that can facilitate continued collaboration and learning across jurisdictions.iv Organized into a Regional Steering Committee, Sector Working Groups, and Front-Line Advisors, this structure would bring together knowledgeable government officials, planning bodies, regulators, industry stakeholders, experts, and front-line workers in each sector from across the region to test, evaluate, and adjust solutions and goals. Such a structure is necessary because achieving the big changes and rapid learning needed to address climate change is a collective action problem. Individually, local jurisdictions and agencies in the San Diego region have a limited degree of direct authority over the full suite of actions needed to decarbonize (though some m ay have more indirect influence). Region-wide cooperation can increase their effectiveness through clear, credible, and consistent policy signals, joint problem-solving and pooling of experience about what does and does not work, and increased leverage and capacity from combined resources. As discussed in Chapters 7 and 8, examples of regional cooperation could include setting county-wide incentives to motivate action, collecting and tracking data, conducting analyses, providing support to develop and implement policies, and convening stakeholders and working groups to develop regional strategies and monitor progress. A formal mechanism, such as a Regional Climate Action JPA, could facilitate such cooperation and, in doing so, help scale strategic thinking and decision-making around decarbonization. Figure 4 outlines an institutional process through which regional governance, informed by the technical solutions proposed in the RDF and ongoing engagement with stakeholders, can drive meaningful learning in each sector. Within this institutional process, the RDF Technical Analysis also proposes two strategies for engaging with actors and agencies outside the region to maximize impact within the region. First, regional decarbonization leaders will need to engage continually with outside agencies, especially at the state level, to influence policies that affect local efforts (e.g., renewable energy regulations). Second, local leaders should take advantage of the county’s technology -focused private sector and multiple university communities to establish the San Diego region as a test bed for pilot and demonstration projects. While regional-scale investments in innovation alone are not likely to have dramatic impacts on technological readiness across all sectors, local testing and deployment of technologies developed outside the county can contribute to the global effort to push the frontier of science on climate solutions. In addition to driving local iv More information on collaboration and learning across jurisdictions is available in Chapter 7. Item 4.1 2022/04/26 City Council Post Agenda Page 18 of 667 DRAFT – NOT FOR CITATION 8 emissions reductions, external engagement is an opportunity to bring outside resources and attention from State and federal policymakers to the region, with potential positive effects on the local economy. Figure 4. RDF Technical Analysis as part of an Integrated Decarbonization Framework and an institutional structure. This structure could include regional governance bodies for the San Diego region and a conference of governments, for example. In sum, the RDF proposes institutionalizing a highly transparent, cooperative process for eliciting new information about "what works" with deep decarbonization, comparing best practices within the county, and engaging outside the region with policymakers, industry stakeholders, and other experts contributing to the evolution of the national strategy. This is important not just to maximize local emissions reductions, but also for San Diego to influence State and federal climate policy and become an effective leader for other jurisdictions. Given that the San Diego region makes up just 0.08% of global emissions, generating followership is vital for the region to truly make an impact on mitigating climate change. Item 4.1 2022/04/26 City Council Post Agenda Page 19 of 667 DRAFT – NOT FOR CITATION 9 Decarbonizing Electricity The RDF Technical Analysis identifies low-impact, high-quality, and technically feasible areas for renewable energy infrastructure development in the San Diego region and neighboring Imperial County. Electricity emissions accounted for approximately 20% of the 2016 Regional Greenhouse Gas Emissions Inventory for the San Diego region and are the second largest emissions source in the region (Figure 3). Decarbonizing electricity production will require substantial deployment of new renewable resources. Siting renewable energy infrastructure and facilities can have significant impacts on the environment and will require new and upgraded transmission infrastructure. The San Diego region has sufficient available land area for wind and solar generation to approach a fully decarbonized energy system in line with the California-wide system model under the least-cost scenario. However, meeting standards for reliability will require significant, but uncertain, investments in a suite of additional resources, including excess intermittent and flexible generation, storage, and demand-side management. The region can produce the projected 2050 energy demand with local utility-scale onshore wind and solar development. However, demand for energy may be higher or lower than the renewable energy supply at a given time (for example at night or on cloudy days), so investments in additional energy storage infrastructure are necessary to supply reliable renewable energy to the region. However, the costs of these additional resources, such as batteries and pum ped storage hydropower, are highly uncertain. The RDF Technical Analysis creates multiple site-selection scenarios for renewable energy infrastructure to inform decision-making. These scenarios include least-cost scenarios, scenarios that include Imperial County (including its geothermal potential), scenarios with different mixes of wind and solar resources (both distributed and utility scale), and brownfield sites. The primary scenarios selected utility-scale renewable energy sites from lowest to highest cost, while additional scenarios prioritize different policy goals such avoiding high conservation value lands, lands with high monetary value, lands with high carbon sequestration potential, and lands that were not already deemed developable. All scenarios include infrastructure costs expressed as the levelized cost of energy (LCOE), which is a way to compare costs across energy projects. The analysis includes the following renewable energy development scenarios:v 1. Least-cost, high local capacity (San Diego county only) (Figure 5); 2. Least-cost, high transmission deliverability (San Diego and Imperial counties) (Figure 6); v See sections 2.4.5 and 2.4.6 for descriptions of the data and methods for site and candidate project area selection. See sections 2.5.1 and 2.5.2 for scenario results, discussion, and maps. Item 4.1 2022/04/26 City Council Post Agenda Page 20 of 667 DRAFT – NOT FOR CITATION 10 3. Minimized environmental impact (avoids areas of high conservation value) (Figure 7); 4. Minimized loss of land that has high monetary value (avoids high monetary value land) (see Chapter 2, Section 2.5.2 for figure); 5. Minimized loss of lands that naturally sequester high levels of carbon (avoids land with natural carbon sequestration potential) (see Chapter 2, Section 2.5.2 for figure); 6. Maximized development of areas that are developable (includes lands that are vacant or slated for redevelopment) (see Chapter 2, Section 2.5.2 for figure); and 7. Midrange scenario (includes a combination of developable areas in the region and nearby areas with transmission upgrades, nearby geothermal, rooftop solar, and brownfield solar and brownfield wind) (Figure 8). Figure 5. CPA Scenario 1: San Diego region only. This analysis selects utility-scale solar and onshore wind resources from lowest to highest cost to meet projected energy demand. The three panels show the build out required by each year that would allow the region to approach full energy decarbonization by 2050. Lighter colors represent Candidate Project Areas (CPAs) that would be built earlier because they are less expensive. Blue colors are wind resources and orange/red colors are solar resources. This scenario has an average LCOE of $40.65 per megawatt hour (MWh). Item 4.1 2022/04/26 City Council Post Agenda Page 21 of 667 DRAFT – NOT FOR CITATION 11 Figure 6. CPA Scenario 2: San Diego and Imperial counties. This analysis selects solar, onshore wind, and geothermal resources from lowest to highest cost to meet projected energy demand. These maps show build out over three time periods where colors represent build out year (lighter colors are earlier) and resources (red/orange for solar, blue for wind, and green for geothermal). The inset shows the Jacumba Hot Springs area site selection by 2050 and the area that includes the proposed/planned Jacumba Valley Ranch (JVR) sites. This scenario has an average LCOE of $42.04 per megawatt hour (MWh). Figure 7. CPA Scenario 3: Restrict land with high conservation value. This scenario minimizes impacts to areas of high conservation value and other areas that are environmentally sensitive or important. It does not meet regional energy demand and is relatively more expensive (with an average LCOE of $84.5 per MWh). Item 4.1 2022/04/26 City Council Post Agenda Page 22 of 667 DRAFT – NOT FOR CITATION 12 The midrange scenario utilizes a mix of proven, scalable technologies that are within the jurisdictions of San Diego county, Imperial county, or regional entities to build in order to meet regional demand both in the near-term (2025) and by mid-century (shown in Figure 8). The technologies include brownfield infrastructure development (solar and wind infrastructure built on currently or formerly contaminated sites); utility-scale solar and wind in both San Diego and Imperial counties; rooftop and infill solar (where “infill solar” is defined as solar projects built in dense, urban settings); and geothermal (which is a clean, firm power source). Figure 8. CPA Scenario 7: Mid-range Scenario 2050. This figure shows sites selected to meet the 2050 electricity demand under the mid-range scenario. In this scenario, the 2050 annual generation from new renewable sources is as follows: 12% rooftop solar, 23% brownfield solar, 0.1% brownfield wind, 6% utility scale solar on developable land in San Diego county, 0.4% utility scale wind on developable land in San Diego, 38% Imperial solar, 21% Imperial geothermal. The addition of rooftop solar and brownfield resources together results in 35% reduction in land area impacts. It meets regional energy demand but has a high average cost (average LCOE of $109/MWh) partly because of the high costs of rooftop and brownfield development. There are some commonalities across scenarios in the results, suggesting that these might be “low-regret” renewable energy infrastructure options. These geospatial analyses have demonstrated that rooftop and infill solar can bring co-benefits to communities, and, along with brownfield development, these are low-regret strategies. Despite their relatively high costs compared to utility-scale development, they have low impacts on the environment, agriculture, and rural communities, and they have high job training opportunities near homes and urban centers. Given the high commercial interest and the relative location near planned or Item 4.1 2022/04/26 City Council Post Agenda Page 23 of 667 DRAFT – NOT FOR CITATION 13 existing renewable sites, the models selected the JVR renewable area in most scenarios. This area is favored by Statewide planning proceedings, including those by the California Independent Systems Operator (CAISO) (which is California’s grid operator) and the California Public Utilities Commission (CPUC) and may represent a low-regret scenario for utility-scale build-out. All scenarios require careful consideration of environmental justice issues and a deeper understanding of the effects that these energy developments will have on communities of concern, low-income communities, and/or disadvantaged communities. Significant solar and geothermal availability in Imperial Count y is a large potential resource for San Diego that may require upgrades to the transmission network. As renewable energy infrastructure is developed in neighboring areas - such as Imperial County, Mexico, or State waters - the site selection scenarios will change in iterative energy supply and demand analyses. Similarly, as new technologies and permitting make additional renewable energy resources available (e.g., offshore wind, wave energy, etc.), the scenarios will need to be updated to account for the energy supply from those novel resources. This framework is flexible enough to account for additional renewable energy demand as it becomes available. The region should coordinate with State agencies to ensure the reliability of the system. The San Diego region is a part of a larger energy system network, so coordination across agencies will be crucial to decision-making, planning, and implementation of renewable energy infrastructure into the future. For example, there is a State-level Integrated Resource Plan (IRP) proceeding at the CPUC. Load Serving Entities (LSEs) throughout the State are Parties to this proceeding, and local LSEs, such as San Diego Gas and Electric (SDG&E) and Community Choice Aggregators (CCAs), are required to submit their procurement plans on an annual basis. These submittals help the State anticipate potential reliability issues, and they help the CAISO plan transmission upgrades which may be needed to accommodate LSE plans and to meet climate goals. To the extent that LSE plans include local distributed generation, rooftop solar, community solar, equity-eligible contractor projects, or other specifications, this information should be indicated in LSE submissions to the CPUC. Additionally, City Council members and other government officials often serve on CCA boards and participate in procurement planning and target setting. Board members can help ensure that LSE plans are implemented for consistency with regional GHG reduction targets, as well as with State targets. This is especially important where local targets are more ambitious than State targets. Beyond the IRP, there are additional State agency proceedings which could benefit from input from local players (e.g., the CPUC Resource Adequacy proceeding, CAISO Transmission Planning Process, and the CAISO Local Capacity Requirements proceeding). In the Resource Adequacy proceeding, CPUC staff conduct analyses to ensure the reliability of the electric power grid. In the Transmission Planning Process, the CAISO conducts analyses to ensure reliability, policy compliance, and cost-effectiveness of the planned transmission system upgrades. In the Local Capacity Item 4.1 2022/04/26 City Council Post Agenda Page 24 of 667 DRAFT – NOT FOR CITATION 14 Requirements proceeding, the CAISO takes a more local approach to reliability analysis than other proceedings. For example, Section 3.3.10 of the CAISO 2022 Local Capacity Technical Study is devoted to the San Diego-Imperial Valley region. Load Serving Entities such as SDG&E and SDCP and CEA should coordinate on procurement, resource adequacy and other issues addressed in these proceedings. The State requires a fully decarbonized electricity system by 2045 and has requirements for rooftop solar on certain new buildings. Nevertheless, there are additional opportunity areas to decarbonize beyond the State goals. Electricity decarbonization is the most common CAP measure analyzed and on average contributes more GHG reductions than any other measure. Most CAPs include a measure to form or join a CCA program, but there are opportunities to increase CCA participation and for CCAs to commit to 100% carbon-free energy prior to the State 2045 deadline. Additionally, there are local opportunities to enhance or complement State rooftop solar requirements by adopting reach codes (or local codes that go beyond State requirements) and evaluating mandates or incentives for energy storage systems paired with rooftop solar to decrease marginal emissions during the electric system’s peak GHG emission and to increase reliability. Additional work would be needed to make carbon-free electricity supply more accessible. Historically, rooftop solar has been installed in higher-income neighborhoods and/or in areas with higher levels of homeownership. Numerous options exist to address the inequitable distribution of solar installations, including targeted incentives and financing. Additionally, CCA programs can maximize participation in the Disadvantaged Communities Green Tariff Program, subsidize customers in income-qualified discount programs to opt-up to 100% carbon-free electricity service options, and support inclusive financing for energy upgrades. Legal authority to regulate energy production:vi Jurisdictions in the San Diego region have the authority to require levels of carbon-free electricity supply through CAPs and to procure carbon-free electricity supplies through a CCA and can therefore supply more carbon-free energy than required by State agencies. However, State and/or federal agencies or entities still regulate local energy supplies for reliability, which complicates fully decarbonizing the electricity supply with renewable energy. Additionally, local jurisdictions are also authorized to support alternatively fueled thermal power plants and related infrastructure that can provide low- or zero-emission electricity to meet reliability and air quality requirements (e.g., green hydrogen production and/or power plants). Local jurisdictions are also authorized to increase distributed generation through CCAs and reach codes, and to streamline permitting. Further vi See Chapter 8, section 8.7 “Decarbonize the Electricity Supply” and Appendix B for further discussion of legal authority. Item 4.1 2022/04/26 City Council Post Agenda Page 25 of 667 DRAFT – NOT FOR CITATION 15 regulating most fossil-fueled thermal power plants emissions is limited given current State regulation and uncertainty over federal preemption. Decarbonizing Transportation The transportation sector is the largest contributor to regional GHG emissions. In 2016, on- road transportation emitted almost half of regional emissions. In 2035, emissions from on-road transportation are projected to account for about 41% of the total projected emissions (Figure 3).vii Statewide legislation, executive orders, and agency targets have set goals for GHG reductions in the transportation sector and the San Diego region has implemented several measures to reduce regional transportation GHG emissions, which have included a variety of vehicle miles traveled (VMT) reduction strategies and vehicle electrification strategie s. The region has a strong policy foundation for reducing emissions related to transportation. However, current commitments through CAPs and other policies are inconsistent with the levels of reductions required by State executive orders for carbon neutral ity. Even the best CAP commitments to reduce on-road transportation emissions through VMT reduction, EV adoption, and fuel efficiency strategies, if applied to the whole region, are not projected to achieve the State’s zero emissions goals. Opportunity areas exist to accelerate EV adoption and VMT reduction based on existing regional policies and patterns of vehicle ownership, travel behavior, and land use development. These opportunity areas include CAP measures to reduce VMT and to reduce vehicle emissions. Current policies and consumer, driver, and developer behaviors are already increasing EV adoption and reducing VMT. However, there are additional opportunity areas to accelerate regional transportation decarbonization. To reduce VMT, jurisdictions can enhance transit and active transportation (biking and walking), and encourage smart growth, urban connectivity, and density by changing zoning to promote mixed-use developments, and disincentivizing parking.viii To reduce emissions, jurisdictions can identify areas for traffic calming measures, establish anti-idling requirements (especially around schools), and provide driver behavior incentives. Further, local jurisdictions have the opportunity to affect vehicle retirement, which can be prioritized in communities of concern to rapidly reduce the air pollution burden in those communities. Finally, local governments can increase use of alternative, low-carbon fuels and EVs, particularly for medium-and heavy-duty vehicles, in vii See Chapter 8, section 8.5 for a detailed analysis of CAP commitments as they relate to transportation. Note that this value includes projected EV sales changes but does not include CAP measures. viii Opportunities to increase density in in-fill areas have been identified in Chapter 3. More details on how to reduce VMT are in Chapter 8. Item 4.1 2022/04/26 City Council Post Agenda Page 26 of 667 DRAFT – NOT FOR CITATION 16 existing and future fleets. Figure 9 shows a menu of policy opportunities to increase EV adoption, illustrating policy options that range in both effectiveness (i.e., how good the policy is at increasing EV adoption) and breadth (i.e., how many people it can reach). Figure 9. A spectrum of policy options to accelerate EV adoption. Policies are likely to be more effective moving right and are likely to have a broader application moving down. Thus, the bottom right is predicted to be the most effective and to have the broadest application of the policy measure shown where the top left is predicted to be the least effective and to have the narrowest application of the policy measures shown. Multiple opportunities for regional collaboration and coordination exist. The nature of on- road transportation and of existing institutional frameworks that coordinate transportation decisions suggests that regional collaboration on transportation decarbonization will be more effective than individual CAP measures. CCAs provide an example of a local mechanism, usually through Joint Powers Agreements (JPAs), that can support transportation electrification by developing programs to locally incentivize EV uptake beyond State and federal programs. Similarly, other regional transportation decarbonization may be identified which can promote local funds for transportation decarbonization. Additionally, local jurisdictions can collaborate to assess the equity impacts of EV use versus increasing use of mass transit in various communities, and to align regional transportation equity analyses (e.g., SANDAG’s equity analyses) with CAP equity analyses (e.g., the City of San Diego’s equity analyses). Item 4.1 2022/04/26 City Council Post Agenda Page 27 of 667 DRAFT – NOT FOR CITATION 17 Legal authority to regulate transportation decarbonization:ix Local jurisdictions and agencies in the San Diego region have broad authority over transportation, based both on locally derived land use authority over planning and development and delegated authority from the State and the federal governments. These authorities can be limited or preempted by State or federal laws, as is the case with regulating fuels and tailpipe emissions. Additionally, local jurisdictions can establish climate change policies and regulations to reduce GHGs from transportation in general plans (GPs), CAPs, zoning, or transit-oriented development regulations. Further, they can require infrastructure for fuel switching in buildings (e.g., EV charging equipment), build supporting infrastructure in public right-of-ways or on public land, and support alternative fuel production and infrastructure, such as hydrogen. Local jurisdictions can regulate their own fleets through purchasing, maintaining, or changing their fleets. They also have the authority to regulate indirect transportation emissions to keep local emissions in line with federal and State air quality standards. State statutes and regulations create an opportunity to align local action that decreases costs for implementation by bringing State fun ded projects to the region, particularly in communities of concern, and deploying technology developed by State or federal funding. Finally, jurisdictions appear to have more legal authority through land use, transportation infrastructure siting, delegated authority, and taxation powers to reduce transportation GHGs, than represented by commitments in CAPs. Additional work by local jurisdictions would be needed to assess the limits of their authority to increase on -road transportation GHG reductions. Decarbonizing Buildings The RDF Technical Analysis studies the building mix and associated emissions from the region’s infrastructure and building sector. Direct emissions from buildings come from on-site fossil fuel combustion and contribute to regional GHG emissions, so this chapter focuses on decarbonizing buildings by eliminating their fossil fuel-based emissions by 2045. The analysis focuses on electrifying systems that are responsible for end-use emissions, like space and water heating, and using lower-carbon fuels, like biomethane and hydrogen, where electrification is not yet feasible. The analysis considers three modeled pathways to reach a carbon-free building sector by 2050: a pathway that emphasizes high electrification of fossil-fuel systems, a pathway where heat pumps are highly efficient when electrified, and a pathway where low -carbon fuels are used to reduce emissions while a slower adoption of electrification occurs.x ixSee Chapter 8, section 8.5 “Decarbonize Transportation” and Appendix B for further discussion of legal authority. x More details on the modeled pathways are available in Chapter 4, section 4.4 and elsewhere in the chapter. Item 4.1 2022/04/26 City Council Post Agenda Page 28 of 667 DRAFT – NOT FOR CITATION 18 Replacing fossil fuel-based space heating and water heating systems with electric systems should be a primary policy focus for building emission reductions. Space heating and water heating represent large shares of emissions from buildings in the San Diego region because they tend to rely on natural gas (Figure 10), so replacing these systems, as well as other fossil fuel- based systems like ovens and dryers, with electric versions will have large impacts on building decarbonization. Space and water heating are especially conducive to electrification because heat pump technologies available for both uses are more efficient than natural gas systems, providing more heating per unit of energy input. For building temperature regulation, electric heat pumps offer both heating and cooling from the same unit, making them ideal for homes that do not yet have air conditioning. Water heaters produce the most emissions in buildings, so replacing them with electrified versions will have outsized emissions reductions for the costs. Finally, this analysis finds that costs do not differ substantially between new construction and the addition of electric units and retrofitting old appliances. Thus, regional policies should support increasing adoption of efficient heat pump -based space and water heating systems in both new and existing buildings. Additionally, policies aimed at replacing fossil-fuel based space and water heating systems should focus on increasing uptake among low-income residents and rental building owners through assistance. Such policies would address some historic inequities in housing quality, environmental injustice, health disparities due to indoor air pollution, and/or utility costs and would ensure that low-income residents and renters are not excluded from building decarbonization goals and that they are not left paying increasingly higher gas rates. Figure 10. Residential space and water heating energy use by fuel type (% of customer accounts) in the San Diego region. Source: DNV GL Energy Insights. 2021. 2019 California Residential Appliance Saturation Study (RASS). Item 4.1 2022/04/26 City Council Post Agenda Page 29 of 667 DRAFT – NOT FOR CITATION 19 There are several near-term actions that are low-regret for building decarbonization. First, setting “electrification-ready” or “all-electric” standards for new construction and major renovations through building energy codes will reduce costs associated with transitioning away from fossil fuels. Second, some existing fossil fuel equipment systems will only turn over once by 2050. Replacing end-of-life fossil fuel heating systems with electrified systems is low-hanging fruit. This is a near-term priority. Third, improved data gathering is a low-cost, foundational action for future policy development. More data on building emissions and decarbonization will better inform decision makers as they craft policies to address the building sector’s contributions to a net zero region. Low-carbon gaseous fuels can be used for hard-to-electrify end uses, though research and piloting are required. Some building systems are hard to electrify, so one way to reduce GHG emissions from those systems is to use fuels that do not emit net GHGs into the atmosphere. Similarly, such fuels can be used for these or other systems prior to electrifying them. Low- carbon gaseous fuels could include biomethane and/or hydrogen. However, each of these alternate fuels have cost and efficiency trade-offs as well as uncertainties, so more research and piloting will be necessary before implementation. The gas utility’s risk of not recovering its investment in assets (that is, its stranded cost risk) can be mitigated by minimizing unnecessary extensions or replacements of the gas pipeline system and by accelerating depreciation of existing utility assets. Phasing out end-use natural gas consumption in buildings can lead to stranded natural gas assets, defined as infrastructure such as a natural gas pipeline that has stopped being used before reaching the end of its useful life. For companies like SDG&E, stranded assets represent potential financial losses because of the high capital costs of creating or replacing gas infrastructure. Mitigating these stranded assets will be an important policy consideration. One tool is to minimize unnecessary extension or replacement of gas pipeline infrastructure. SDG&E invests in natural gas assets when it extends pipes to serve new customers and when it replaces old or damaged pipes and other assets. Policies like requiring all new construction to be fully electric would mitigate stranded asset losses for new pipe investments going to new customers, but this would not mitigate losses from investing in replacing aging infrastructure. Exploring and piloting non -pipeline alternatives to both new and replacement infrastructure, including electrifying end uses instead of replacing infrastructure, could identify opportunities to mitigate risk. CAPs have relatively few measures to electrify buildings and the GHG impact of the measures is relatively low, despite their importance to regional decarbonization. Only six CAPs include measures related to building electrification and the GHG reductions in CAPs associated wi th efficiency and electrification are relatively low. Compared to the level of electrification needed Item 4.1 2022/04/26 City Council Post Agenda Page 30 of 667 DRAFT – NOT FOR CITATION 20 in both new and existing buildings as outlined in Chapter 4, the CAP measures fall short of the level of building decarbonization in the RDF Technical Analysis pathways. Policies for decarbonizing new and existing buildings are crucial. 80% of the buildings that will exist in 2050 already exist, so decarbonizing these buildings will be critical to decarbonizing the building sector. While State building codes regulate alterations and additions to certain existing buildings, local policies could further encourage or require energy efficiency and electrification in many other existing buildings.xi Decarbonizing municipal buildings may be a low-regret policy because implementing cost effective measures and electrifying those buildings may help reduce operating costs and modeling these actions may encourage owners of homes and businesses to act. There is an opportunity and a need to assess social equity considerat ions of building decarbonization policies. In the context of building decarbonization, there are several aspects of equity to consider, including the high proportion of renters in communities of concern, the relative lack of data and analysis related to equity and building-related policies, and potential cost implications of building decarbonization policies, particularly electrification. Additional work would be needed to develop the capacity and tools to understand and address the equity implications of building and other decarbonization policies in the San Diego region. Legal authority to regulate building decarbonization:xii Local jurisdictions have the authority to regulate GHG emissions from building end-use of fossil fuels and other energy sources, which is the primary means of decarbonizing buildings. Local jurisdictions also act with delegated authority over the built environment to require more stringent energy codes, directly regulate air pollution emissions from buildings, and procure alternate energy supplies in public buildings. Additional authority may come from the California Environmental Quality Act (CEQA) by setting a more stringent threshold to determine environmental impact. Local governments are preempted from establishing energy efficiency appliance standards, regulating natural gas supply, transmission, and storage, and high global warming potential refrigerants (e.g., HFCs). xi See Chapter 8, section 8.6, for more details on examples of local authorities decarbonizing existing buildings. Also see Chapter7 section 7.3.1 for a local example. xii See Chapter 8, section 8.6 “Decarbonize Buildings” and Appendix B for further discussion of legal authority. Item 4.1 2022/04/26 City Council Post Agenda Page 31 of 667 DRAFT – NOT FOR CITATION 21 Natural Climate Solutions The RDF Technical Analysis investigates the natural climate solutions (NCSs) available in the San Diego region and their potential to naturally sequester and store CO 2 and other GHGs. NCSs are processes that protect or enhance natural and working lands’ (NWLs) ability to capture and store GHGs from the atmosphere through plants and soils. “Working lands” include agricultural lands like orchards, vineyards, pastures, etc. “Sequestration” is an annual measure of how many GHGs are removed from the atmosphere and “storage” is the total amount of GHGs that have been sequestered. Carbon storage in the region (Figure 11) is important because there are ways to prevent stored carbon from being released into the atmosphere, as occurs when land use changes from NWLs to urban areas, for example. By understanding a landscape’s carbon storage and sequestration potential, areas with high levels of stored carbon can be prevented from emitting their carbon into the atmosphere and areas with high sequestration potential can be protected. Figure 11. Total stored carbon (measure in metric tons of carbon dioxide equivalent per hectare, or MT CO 2e ha-1) estimates for the San Diego region. Warmer colors represent larger carbon stock estimates, cooler colors represent lower stock estimates, and white represents no carbon stock. Item 4.1 2022/04/26 City Council Post Agenda Page 32 of 667 DRAFT – NOT FOR CITATION 22 Regional NWLs sequester and store large amounts of carbon dioxide, but they do not sequester enough to account for human-caused emissions. NWLs can act as stronger net sinks than they currently do, though this will require investments in bolstering NCSs and minimizing carbon emissions from land and land use activities. To accurat ely account for net carbon land use emissions, local data need to be collected and integrated into regional carbon calculations. The region can expand annual carbon sequestration and long-term carbon storage through investing in NCSs that both increase natural sequestration and that reduce emissions from the land, such as investing in “carbon farming,” restoring and expanding “blue carbon” habitats, planting trees and other plants in urban areas, preventing wildfires, and planting trees in NWLs. Local data can improve NCS policies and management techniques and thus increase regional sequestration. The most effective and inexpensive NCS in the San Diego region is to avoid land use change by protecting natural and working lands, except where land use change is required for other decarbonization actions, like siting renewable energy infrastructure. Existing natural and working lands are natural carbon sinks, so preventing these lands from changing into urban or built-up areas will allow for 1) continued annual sequestration and 2) prevention of one-time emissions from vegetation removal, soil disturbance, etc. This report estimates that natural annual sequestration in NWLs may be up 2 million metric tons (MMT) of CO2 under ideal circumstances and that there may be 58 MMT of CO2 stored in vegetation, woody debris, leaf litter, and soils, some of which would be released with land use change. The annual sequestration in NWLs is important to continue to build natural CO2 storage. Natural sequestration was not included in the RDF technical analysis of emissions given the focus on the energy system. Land use change will be necessary to install utility-scale renewable energy infrastructure, which will support decarbonization, and to allow housing development. It will be important to minimize land use change in the areas with the largest natural carbon stores and with the highest sequestration potential and to protect areas with high co-benefits (such as areas that provide air and water quality improvements, biodiversity protection, and public health outcome improvements). Other important regional NCSs considered by the RDF Technical Analysis may be less effective and/or more expensive for carbon sequestration, although they yield important co -benefits. These include carbon farming (farming practices that increase carbon sequestration and storage and minimize GHG emissions on agricultural lands), wetland protection and expansion/restoration, and urban forestry. Large-scale habitat restoration and reforestation, which were not considered in this report, are expensive and may not be effective. Wildfire prevention will also be important for emissions and numerous other economic and social reasons. Other NCS options require significant capital investments and are likely to have sm aller short-term sequestration returns than preservation. Item 4.1 2022/04/26 City Council Post Agenda Page 33 of 667 DRAFT – NOT FOR CITATION 23 NCSs offer quantifiable co-benefits beyond decarbonization. Each of the analyzed NCSs offer numerous quantifiable co-benefits. These co-benefits include, but are not limited to, improved air and water quality, improved public health outcomes, biodiversity protection, ecosystem functioning protection, increased shading in urban areas, decreased water and fertilizer requirements on farms and rangelands, improved aesthetics in urban areas, and the potential to increase environmental justice. These co-benefits should be considered when crafting and implementing policies in order to build ecological, economic, and social resilience. Equity must be a central consideration for all NCS decisions. NCSs should be viewed through the lens of both decarbonization and equity. Whenever possible, communities of concern should be prioritized for urban greening, tree planting, climate farming, and habitat restoration because these NCSs have outsized co-benefits of improving air and water quality as well as human health. Historically, these communities have received less investment and have borne disproportionate levels of environmental harm. All efforts should be made to actively address these historic inequities. The only quantified CAP measure relevant to this pathway is urban tree planting, but there are opportunities to implement additional NCSs in a collaborative way. Additional measures are possible under local land use authority. Tree planting measures contribute on average just over 1% of local GHG reductions in CAPs. These can be enhanced through jurisdictional collaboration. Additional NCS CAP measures are possible under existing authority and can contribute to land conservation, preservation, and restoration on natural and working lands. Private landowners and tribal governments can also preserve land, test and fund pilot proj ects for carbon removal and storage and collaborate with public agencies. Collectively, there is an opportunity to expand protections for natural and working lands to fulfill the new SB 27 (2021) mandate that calls for the creation of natural and working l and carbon removal and storage projects. There are also opportunities to include local data in land management and planning as well as in CAPs. For instance, CAPs can utilize the California Air Resource Board’s (CARB’s) carbon accounting methodology in natural and working lands and universities’ data to create stronger goals and measures. Additionally, the region can implement regular carbon accounting and track changes in carbon in natural and working lands over time to understand how carbon stocks are being preserved and whether net emissions occurred due to changes in land use. Legal authority to regulate negative emissions from natural climate solutions and land use:xiii It is unclear if local jurisdictions’ ability to use their authority over land use, z oning, land preservation, and agricultural easements extends to activities on private natural and working xiii See Chapter 8, section 8.8 “Natural Climate Solutions” and Appendix B for further discussion of legal authority. Item 4.1 2022/04/26 City Council Post Agenda Page 34 of 667 DRAFT – NOT FOR CITATION 24 land beyond land use designation that would affect GHG emissions or sequestration. The region’s land use jurisdiction is further complicated because it is composed of federal, State, tribal, and privately held land, submerged land, and waters. Various statutes and agencies regulate the different land types, with none focused on GHG emissions or sequestration as it relates to land use. State land use and regulating agencies also operate with a wide range of statutory mandates, which apply to lands under multiple jurisdictions and impact GHG emissions and accounting. California's statutes and executive orders require State land use agencies to account for GHG emissions from natural and working lands. Additionally, these State agencies are beginning to assess and regulate carbon removal and storage on these lands with significant targets in 2030. An opportunity exists for local jurisdictions to work with landowners and managers to achieve State, regional, and local goals related to natural and working lands. Employment Impacts of Decarbonization for the San Diego Region The RDF Technical Analysis calculates the net change in jobs in the energy sector in resp onse to the central case of the modeled decarbonization pathways from the EER model. The analysis focuses on employment changes from 2021 -2030, following California’s Jobs and Climate Action Plan for 2030, to inform workforce development strategies. Additi onally, this report analyzes overall average annual job creation from 2020 -2050, based on the full timeline in the EER model. For phasing out fossil fuels and modeling associated job losses, the analysis focuses on the 2021-2030 period, where the central case of the EER model estimates modest reductions in fossil fuel-based activities. This is primarily due to the model’s estimates of steady natural gas consumption and a 20% decrease in oil consumption by 2030, relative to current consumption levels. The RDF Technical Analysis focuses on the quantitative impacts to employment as a result of deep decarbonization efforts in the energy, building, and transportation sectors and informs a report by Inclusive Economicsxiv on workforce development strategies. Between 2021 – 2030, the regional decarbonization pathways would generate an average of nearly 27,000 jobs per year in the San Diego region. Through the creation of direct, indirect, and induced jobs, the RDF Technical Analysis estimates that the decarbonization pathways will create 27,000 jobs per year for the region.xv Table 1 shows that expenditures on energy xiv To access the Inclusive Economics report titled “Putting San Diego County on the High Road: Climate Workforce Recommendations for 2030 and 2050,” please visit the County of San Diego’s engagement platform and select the report for download or for commenting at https://engage.sandiegocounty.gov/rdf. xv For a more detailed accounting of these jobs, please refer to Chapter 6, s ection 6.3. Item 4.1 2022/04/26 City Council Post Agenda Page 35 of 667 DRAFT – NOT FOR CITATION 25 demand will create approximately 13,500 jobs between 2021 and 2030. Table 2 shows that expenditures on energy supply will create approximately 13,500 jobs between 2021 and 2030. The RDF Technical Analysis estimates that no workers in the region’s fossil fuel -based industries will have to experience job displacement before 2030, even with contractions in fossil fuel demand. The energy supply mix in the EER model suggests that there will be small to no changes in the consumption of fossil fuels before 2030.xvi This suggests that there will not be job losses in the oil and gas sectors in the San Diego region prior to 2030. San Diego County and local governments should begin now to develop a viable set of just transition policies for the workers in the community who will experience job displacement between 2031 – 2050. After 2030, the EER model’s central case estimates large contractions in both oil and gas. The model predicts 95% contraction rates in oil and 75% in gas by 2050. It is important for regional governments to begin to develop policies for a just transition for these workers now so that they can transition into jobs of equivalent or better quality in the clean energy economy or elsewhere. The costs of a just transition will be much lower if the transition is able to proceed steadily rather than through a series of episodes. Under a steady transition, the proportion of w orkers who will retire voluntarily in any given year will be predictable, which will avoid the need to provide support for a much larger share of workers at any given time. The rate of the transition from fossil fuel to renewable energy-based jobs will impact the equity and fairness of the transition. Sudden changes and contractions would potentially result in sudden job losses, where steady changes and contractions would potentially result in fewer job losses as employees could transition to new jobs or could voluntarily retire. Geothermal production of the five sites identified in Imperial County would generate 1,900 jobs per year over a 10-year period. Chapter 2 identifies five areas for geothermal energy production in Imperial County. This chapter’s analysis finds that there will be 1,900 jobs created per year in the Southern California region over a 10-year period for the development and operation of these five geothermal power plants. Some of these jobs may be created in the San Diego region. xvi Details on the EER model’s Central Case, which was used here, can be found in Appendix A. Item 4.1 2022/04/26 City Council Post Agenda Page 36 of 667 DRAFT – NOT FOR CITATION 26 Table 1 Average number of jobs created in the San Diego region annually through energy demand expenditures from 2021-2030, by subsectors and technology. Figures assume 1 percent average annual productivity growth. Investment Area Average Annual Expenditure Direct Jobs Indirect Jobs Direct Jobs + Indirect Jobs Induced Jobs Direct Jobs + Indirect Jobs + Induced Jobs Vehicles $7.7 billion 3,427 1,427 4,854 1,508 6,362 HVAC $897.0 million 1,345 699 2,044 764 2,808 Refrigeration $761.9 million 1,315 491 1,806 711 2,517 Appliances $188.6 million 143 77 220 78 298 Construction $113.4 million 263 149 412 146 558 Lighting $106.6 million 177 95 272 100 372 Manufacturing $45.7 million 40 32 72 27 99 Other commercial and residential $38.9 million 59 30 89 33 122 Agriculture $17.2 million 144 21 165 45 210 Mining $2.4 million 1 1 2 1 3 TOTAL $9.9 billion 6,914 3,022 9,936 3,413 13,349 Source: IMPLAN 3.1 Table 2 Average number of jobs created in the San Diego region annually through energy supply expenditures from 2021-2030, by subsectors and technology. Figures assume 1 percent average annual productivity growth. Investment Area Average Annual Expenditure Direct Jobs Indirect Jobs Direct Jobs + Indirect Jobs Induced Jobs Direct Jobs + Indirect Jobs + Induced Jobs Fossil fuels $4.4 billion 2,538 3,777 6,315 3,805 10,120 Clean renewables $629.5 million 1,488 601 2,089 848 2,937 Transmission and storage $45.9 million 34 17 51 31 82 Additional supply technologies $45.1 million 118 35 153 57 210 Other investments $4.5 million 10 3 13 6 19 TOTAL $5.1 billion 4,188 4,433 8,621 4,747 13,368 Source: IMPLAN 3.1 Item 4.1 2022/04/26 City Council Post Agenda Page 37 of 667 DRAFT – NOT FOR CITATION 27 Local Policy Opportunityxvii The RDF Technical Analysis assesses current GHG reduction commitments in Climate Action Plans (CAPs) to determine if additional activity would be needed to put the region on a trajectory to meet decarbonization goals. Additionally, it identifies opportunities for local jurisdictions in the region to take further action to support the decarbonization pathways for energy production, transportation, buildings, and natural climate solutions. To do this, several novel analyses were conducted. First, it analyzes the authority of local governments and agencies to influence and regulate GHG emissions and summarizes the authority of key federal, State, and local agencies, and key legislation and regulation at the federal and State levels to help to clarify the ability of local governments to act to reduce GHG emissions.xviii Second, it reviews all CAPs in the region to determine how often a given measure was included in CAPs, the relative GHG impacts of CAP commitments, and the integration of social equity considerations.xix Third, it does a scenario analysis to estimate the total regional GHG reductions that would result from all adopted and pending CAP s’ commitments. It then estimates the potential GHG impact of a scenario that applies the best CAP commitments to all jurisdictions.xx This scenario analysis takes the CAP commitment for a given CAP policy category – say goals for planting trees in urban or rural areas – that will produce the single greatest relative GHG reductions and then applies that commitment to every jurisdiction in the San Diego region, regardless of current or planned commitments in that category. This may be considered the upper limit of potential GHG reductions from current CAP commitments. Finally, this chapter uses the results from these analyses, in addition to results from other research and analyses, to identify opportunities for further local action and regional collaboration in each of the four decarbonization pathways.xxi Local jurisdictions have the authority to influence and regulate GHG emissio ns. Local governments can influence and regulate GHG emissions by accelerating State statutory targets and policies, adopting ordinances to go beyond State law, and using unique authority to adopt and implement policies. Local authority comes from both con stitutionally derived power, which is a broad authority to promote public health, safety, or the general welfare of the community, xvii See Chapter 8 for more details. xviii See Appendix B for more details. xix See Chapter 8, section 8.3 for an overview and sections 8.5-8.8 for sector specific findings. These are also used to illustrate the gap between the deep decarbonization goals in Chapters 2 through 5 and the regional CAP commitments. xx See section 8.4. xxi These opportunities were included in each relevant section for this Executiv e Summary, but they are included in the sector specific section in Chapter 8. Item 4.1 2022/04/26 City Council Post Agenda Page 38 of 667 DRAFT – NOT FOR CITATION 28 and delegated authority from State statutes. The full extent of a local jurisdiction’s power to regulate GHG emissions is unknown.xxii Current CAP commitments are insufficient to reach decarbonization goals. Current local CAP GHG reduction commitments for transportation, electricity, and buildings contribute a relatively small portion of the total reductions needed to reach net zero GHG emissions in 2045 (Figure 12). Even if the most aggressive CAP measures are applied to all jurisdictions in the region, significant emissions would remain, mostly from natural gas building end -uses and on- road transportation (Figure 12). Figure 12. This graph shows the projected GHG emissions in the San Diego region from electricity, natural gas, and on-road transportation in each of the scenarios analyzed. The reference scenario, where there are no CAP commitments, only shows reductions based on State and federal laws, mandates, actions, and goals. The Current CAP Commitments scenario shows the remaining GHG emissions from a subset of total emissions if all current CAPs were applied in full as written. The Best CAP Commitment Scenario shows the remaining GHG emissions if the best CAP commitment from each policy category is applied to every jurisdiction in the region, regardless of current CAP commitments. This graph shows that no analyzed scenario will allow the region to reach net zero emissions by 2050. Note that these analyses assume no new State and federal laws, mandates, actions, and goals, and that current ones do not change at any point in this period. Further, these analyses do not include all GHG emissions for the region. xxii See section 8.2 and Appendix B for a more detailed discussion of authority. Item 4.1 2022/04/26 City Council Post Agenda Page 39 of 667 DRAFT – NOT FOR CITATION 29 Opportunities exist for more jurisdictions to adopt additional CAP measures and strengthen existing measures. Based on the comparative analysis of CAPs, there is an opportunity for more jurisdictions to adopt CAP measures that are already adopted by some jurisdic tions in the region. Similarly, based on the scenario analysis of the combined GHG impacts of CAP measures, there is an opportunity for most jurisdictions to strengthen their existing CAP measures, especially in the transportation and building sectors. The se sectors produce large GHG emissions (Figure 13, right), but on average represent disproportionately low emissions reductions in CAPs in 2035 (Figure 13, left). Figure 13. This graph shows the average contribution of each decarbonization pathway to the total GHG reduction from local CAP measures in 2035 (left) and the distribution of 2016 regional emissions by emission source (right). It shows that emissions from transportation (blue, right side) account for nearly half of regional emissions, but on average corresponding reductions from CAP commitments only represent slightly more than a quarter of local GHG reductions in CAPs (blue, left side). Similarly, electricity accounts for about a quarter of regional emissions (dark orange, right side) but associated reductions contribute on average just under half of GHG reductions from CAP commitments. Note that because emissions associated with buildings come from both onsite natural gas combustion and electricity production, the building decarbonization portio n of the bar is shaded to show both light and dark orange to correspond with both natural gas buildings (light orange) and the electricity supply (dark orange). Additional work would be needed to integrate social equity into climate planning. Based on a preliminary review, the integration of social equity in adopted and pending CAPs is limited, inconsistent, and lacks specificity. Additional work would be needed to develop the capacity and tools to understand and address the equity implications of all deca rbonization policies in the San Diego region, including data collection and analysis; regional guidance documents; and regional working groups to coordinate, advise, track, and monitor how equity is being addressed in climate planning. Item 4.1 2022/04/26 City Council Post Agenda Page 40 of 667 DRAFT – NOT FOR CITATION 30 The San Diego Region as a Model Although the San Diego region only accounts for 0.08% of global emissions, the decarbonization efforts undertaken by the region can have a measurable impact on global emissions by generating followership among others and sharing durable innovations that can be expanded and replicated. San Diego should actively seek to make its efforts visible and communicate lessons learned in national and international fora. The creation of the San Diego Regional Decarbonization Framework can serve as a case study for other jurisdictions across the U.S. and globally to learn from and adapt in their own long-term decarbonization planning endeavors. In addition to showcasing this effort alongside various national and international fora,xxiii the UN Sustainable Development Solutions Network (SDSN) is producing a Guidebook that will serve as a toolkit for other municipalities, universities, and communities to follow the process undertaken by the County of San Diego in their own decarbonization processes. SDSN is working to share the RDF within three horizontal levels across its networks. SDSN will share the RDF and its key findings in national meetings and fora in the United States, international groups and consortiums, and the United Nations. For example, the pro ject was presented during the Innovate4Cities Conference in October 2021 and the inputs of this event will serve to inform the 2022 IPCC Sixth Assessment Report on impact, adaptation, and vulnerability to global climate change. These global consortiums provide an opportunity to showcase the results of this project and San Diego as a model to the world. With access to these audiences, the RDF can help inform global roadmaps and pathways to net zero. A Guidebook for Regional Decarbonization is being prepared for use by local jurisdictions to aid in creating unique decarbonization frameworks. This Guidebook will provide background information as well as specific steps and advice on logistics, methodology, stakeholder engagement, long-term planning, and more. Although the resources within this Guidebook are relevant and applicable to decarbonization framework project teams beyond the US, frameworks being created in the context of emerging economies will likely use different approaches, perspectives, and strategies in climate action planning. This Guidebook will be free and available online at UC San Diego’s SDG Policy Initiative’s website (http://sdgpolicyinitiative.org/guidebook/) as a way to facilitate the creation of regional decarbonization frameworks and provide a practical roadmap for jurisdictions to work toward net-zero goals. xxiii Chapter 9 and Appendix C present extensive lists of US and global consortiums that San Diego Count y and other jurisdictions with decarbonization frameworks can connect with, attend, and join the networks of in order to disseminate their findings across different scales. Item 4.1 2022/04/26 City Council Post Agenda Page 41 of 667 Marco Regional de Descarbonización de San Diego Resumen para formuladores de políticas BORRADOR: NO CITAR Marzo de 2022 Item 4.1 2022/04/26 City Council Post Agenda Page 42 of 667 BORRADOR: NO CITAR 1 Equipo del proyecto Director del proyecto Gordon C. McCord Director de Iniciativa de políticas globales de San Diego Facultad de Estrategia y Política Global, Universidad de California en San Diego (UC San Diego) Gerente del proyecto Elise Hanson, UC San Diego Representantes del Condado de San Diego Sarah Aghassi, directora administrativa adjunta, Grupo de Uso del Suelo y Medioambiente (LUEG), Murtaza Baxamusa, gerente del programa de Sustentabilidad Regional, LUEG Rebeca Appel, coordinadora del programa, LUEG Nicole Boghossian Ambrose, gerente del programa del g rupo, LUEG Autores de los capítulos de análisis técnico del Marco Regional de Descarbonización de San Diego (RDF) Enfoque del estudio Ryan Jones, Evolved Energy Research Análisis geoespacial de producción de energía renovable Emily Leslie, Montara Mountain Energy Joseph Bettles, UC San Diego Aceleración de la descarbonización profunda en el sector del transporte Katy Cole, Fehr & Peers Chelsea Richer, Fehr & Peers Eleanor Hunts, Fehr & Peers Descarbonización de edificios Asa Hopkins, Synapse Energy Economics Philip Eash-Gates, Synapse Energy Economics Jason Frost, Synapse Energy Economics Shelley Kwok, Synapse Energy Economics Jackie Litynski, Synapse Energy Economics Kenji Takahashi, Synapse Energy Economics Item 4.1 2022/04/26 City Council Post Agenda Page 43 of 667 BORRADOR: NO CITAR 2 Soluciones climáticas naturales y otras consideraciones del uso de tierras Elise Hanson, UC San Diego Emily Leslie, Montara Mountain Energy Impactos en el empleo por la descarbonización en la región de San Diego Robert Pollin, PERI, Universidad de Massachusetts Amherst Jeannette Wicks-Lim, PERI, Universidad de Massachusetts Amherst Shouvik Chakraborty, PERI, Universidad de Massachusetts Amherst Gregor Semieniuk, PERI, Universidad de Massachusetts Amherst Consideraciones de políticas clave para la región de San Diego Joseph Bettles, UC San Diego Gordon C. McCord, UC San Diego David G. Victor, UC San Diego Emily Carlton, UC San Diego Análisis de oportunidades de políticas locales Scott Anders, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego Nilmini Silva Send, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego Joseph Kaatz, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego Yichao Gu, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego Marc Steele, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego La región de San Diego como modelo Elena Crete, Red de Soluciones para el Desarrollo Sostenible (Sustainable Development Solutions Network, SDSN) de las Naciones Unidas Julie Topf, Red de Soluciones para el Desarrollo Sostenible (Sustainable Development Solutions Network, SDSN) de las Naciones Unidas Anexo A: Resumen del modelado del sistema de energía a nivel estatal Ryan Jones, Evolved Energy Anexo B: Revisión de autoridades de las agencias y las jurisdicciones locales para modificar y regular las emisiones de GEI Joseph Kaatz, Centro de Iniciativas de Políticas Energéticas, Universidad de San Diego Agradecimientos: El equipo del RDF le agradece a David Victor por su asesoramiento durante el proyecto y a Joseph Bettles, Tyler Spencer, Emily Carlton y Elissa Bozhkov por su apoyo investigativo y editorial. Item 4.1 2022/04/26 City Council Post Agenda Page 44 of 667 BORRADOR: NO CITAR 3 Resumen para formuladores de políticas El consenso científico mundial es claro: el mundo está atravesando una crisis climática, y nuestra posibilidad de reducir de manera significativa las emisiones de gases de efecto invernadero (GEI) se está agotando.i Las actividades y la influencia humanas han calentado la atmósfera, el océano y la tierra a través de la rápida acumulación de GEI en la atmósfera y en el océano, y han causado cambios alarmantes y veloces. Los acuerdos mundiales, como el Acuerdo Climático de París, y las ordenanzas de California reconocen la necesidad inmediata de descarbonización en todas las industrias. En los sitios donde los esfuerzos diplomáticos anteriores no han podido alcanzar un avance sobre el cambio climático, los modelos regionales de solución de problemas que abarcan los compromisos a nivel mundial y las necesidades locales pueden emerger como un enfoque más efectivo. El análisis técnico del Marco Regional de Descarbonización de San Diego (RDF) ofrece alternativas técnicas y políticas para lograr la descarbonización en el mediano plazo para colaborar con la formulación de políticas de corto plazo de gobiernos regionales, del condado y de las ciudades. El informe modela alternativas sobre la base de la ciencia para lograr cero emisiones de carbono netas para la región en 2045, lo que coincide con el Acuerdo Climático de París y con los mandatos estatales. Las alternativas brindan una visión compartida para la región de San Diego con el objetivo de lograr una reducción colectiva de las emisiones de GEI netas, de manera de alcanzar el objetivo estatal de lograr cero emisiones netas. Este informe es un análisis técnico de cómo los diferentes sectores en el sistema de energía pueden contribuir a la descarbonización, pero no identifica la alternativa “correcta”. Muestra, en cambio, múltiples maneras de destacar las ventajas, los beneficios, los puntos de decisión, los riesgos y las sinergias. Este análisis siempre debe estar actualizado, a medida que las tecnologías evolucionen o a medida que las incertidumbres se resuelvan o aclaren. El informe explora los procesos de políticas que ayudarán a las jurisdicciones en la región a conocer las incertidumbres y adaptar las estrategias a la luz de nueva información. Marco de estudio y consideraciones de políticas clave Este informe aborda las formas de reducir las emisiones de carbono en el sistema energético de San Diego, que se define como la producción y el consumo totales de energía en los sectores de energía eléctrica, el transporte y la construcción, para cumplir con los objetivos nacionales y estatales de lograr cero emisiones netas. Cuando este informe menciona “cero emisiones netas”, se refiere a que las emisiones de dióxido de carbono (CO₂) causadas por el humano a partir del sistema de energía equivalen a la eliminación y el almacenamiento de CO₂ causados por el humano, por lo tanto, no contribuyen con las i Panel Intergubernamental sobre Cambio Climático (Intergovernmental Panel on Climate Change, IPCC), “Climate Change 2022: Impacts, Adaptation, and Vulnerability. Summary for Policymakers”. WGII Sixth Assessment Report, febrero de 2022. Disponible en: https://report.ipcc.ch/ar6wg2/pdf/IPCC_AR6_WGII_FinalDraft_FullReport.pdf Item 4.1 2022/04/26 City Council Post Agenda Page 45 of 667 BORRADOR: NO CITAR 4 emisiones netas a la atmósferaii. El análisis técnico del RDF no se vale de los resultados fuera de la región de San Diego para alcanzar sus objetivos de cero emisiones netas. Es importante aclarar que hay emisiones que provienen de otros sectores, como los desechos, que no se incluyeron en este análisis. Figura 1. Resultados para el total de la capacidad de electricidad instalada requerida en California para alcanzar las cero emisiones netas a nivel estatal en 2050, según cinco escenarios modelo diferentes en el modelo de EER. En el Anexo A se encuentra disponible más información sobre el modelo de EER, las adaptaciones y los casos modelo. Las alternativas de descarbonización del análisis técnic o del RDF se elaboraron a partir de situaciones de descarbonización profunda estatales y nacionales de mayor tamaño, para garantizar que las alternativas para la región de San Diego sean consistentes con las alternativas de descarbonización a nivel estatal. Evolved Energy Research (EER) desarrolló estos modelos regionales según cinco casos modelo (a los que se suele hacer referencia como “escenarios”)iii. Los modelos de descarbonización profunda —la cual consiste en el proceso de reducir de manera drástica las emisiones de gases de efecto invernadero y dióxido de carbono en todos los sectores industriales— permiten los análisis comparativos cuantitativos de las opciones de políticas regionales y de los resultados de la descarbonización en diferentes sectores. Un ejemplo de los aportes de los modelos de EER para el sector energético muestra cómo los diferentes casos modelo afectan la descarbonización a nivel estatal en la capacidad de electricidad instalada total necesaria (Figura 1) y las emisiones de CO₂ de la industria y la energía hasta 2050 (Figura 2). Usar estos modelos adaptados también es importante porque los sistemas de transporte y de energía local están interconectados con otras regiones y otros estados, de manera que las jurisdicciones regionales deben marchar al unísono de las actividades de descarbonización de otras jurisdicciones estatales y regionales. ii Tenga en cuenta que el modelado del sistema de energía solo considera las emisiones de CO₂ , y las soluciones climáticas naturales y los análisis del Plan de Acción Climática también consideran otros gases de efecto invernadero, incluidos el metano, los óxidos nitrosos, el ozono, y demás. Estos GEI se convierten a su “equivalente de dióxido de carbono” (CO2e) para una comparación más sencilla. iii En el Capítulo 1 y el Anexo A se encuentran más detalles sobre los casos modelo. Item 4.1 2022/04/26 City Council Post Agenda Page 46 of 667 BORRADOR: NO CITAR 5 Figura 2. Resultados de las emisiones de CO2 provenientes de procesos industriales y energéticos en California a partir del modelo de EER. Los colores que se encuentran por encima del eje x representan las emisiones positivas, y los colores por debajo del eje x representan las emisiones negativas resultantes. La línea negra indica las emisiones de CO2 netas. “El CO2 de productos o provistos de carbón” es el CO2 que termina atrapado en los materiales (p. ej., el asfalto atrapa el CO2 durante su producción) o las reducciones de CO2 no contabilizadas en los inventarios actuales (p. ej., las reducciones de emisiones provenientes de la aviación interestatal no están incluidas en la contabilización de las emisiones estatales individualizadas, pero sí las de la aviación intraestatal). Los expertos en la producción de energía renovable, el transporte y la construcción modelaron alternativas de descarbonización factible en términos técnicos para que la región cree un mapa de ruta con base en la ciencia de descarbonización regional para al canzar las cero emisiones netas para mediados de siglo. Estos modelos se enfocaron en tecnologías probadas y escalables para descarbonizar las emisiones de GEI más importantes de la región (Figura 3) que se encuentran dentro de la jurisdicción de los gobiernos y las agencias locales. Por tanto, no se incluyeron las tecnologías que aún se encuentran en las primeras etapas o en la fase experimental, porque las autoridades no pueden implementarlas a escala con inmediatez. De igual manera, tampoco se incluyeron las implementaciones de recursos en aguas federales y estatales, excepto para dar contexto a la disponibilidad de recursos en la región de San Diego. Item 4.1 2022/04/26 City Council Post Agenda Page 47 of 667 BORRADOR: NO CITAR 6 Figura 3. Los cálculos de las emisiones del equivalente de dióxido de carbono (CO2e) de toda la región medidas en millones de toneladas métricas. La “otra” categoría incluye emisiones de fuentes industriales, transporte todo terreno, desechos, aviació n, agua, y demás, que no se consideraron en el análisis técnico del RDF. Tenga en cuenta que los valores de 2035 representan el impacto de ciertas acciones federales y estatales. Fuente: Anexo X del Plan Regional SANDAG 2021, disponible aquí: https://sdforward.com/docs/default-source/2021-regional-plan/appendix-x ------------- 2016-greenhouse-gas-emissions- inventory-and-projections-for-the-san-diego-region.pdf?sfvrsn=8444fd65_2 Además, el análisis técnico del RDF destaca las incertidumbres en el proceso de descarbonización y la necesidad de procesos de planificación continuos que se puedan adaptar conforme a la evolución de los escenarios políticos y tecnológicos. Por ejemplo, la disponibilidad de energía renovable del Condado de Imperial o México puede afectar la combinación de energías renovables de la región de San Diego, lo cual podría evitar tener que construir infraestructura de energía renovable local más costosa. De igual manera, el desarrollo federal y estatal de vientos de alta mar podría reducir la necesidad de desarrollar infraestructura renovable con base en tierra en la región de San Diego. Por tanto, el desarrollo de sistemas de toma de decisiones a partir de los descubrimientos del análisis técnico del RDF debe permitir la actualización continua conforme a los cambios de los escenarios políticos y tecnológicos. Consideraciones de políticas clave La descarbonización exitosa requerirá soluciones técnicas y estrategias de políticas que puedan adaptarse a los avances científicos y a las condiciones políticas y económicas locales. El análisis técnico del RDF brinda el mejor asesoramiento sobre las soluciones de corto plazo más económicas y más efectivas para reducir las emisiones en cada sector. Estas acciones de “bajo riesgo” serán acciones de descarbonización sólidas en el corto plazo, independientemente de cómo se resuelvan las incertidumbres, pero aún se desconoce si son las mejores alternativas a largo plazo. El ajuste de políticas y el aprendizaje efectivo requieren que los actores locales, tanto los líderes como las personas en primera línea, primero implementen las soluciones y luego participen de una revisión sistemática y Item 4.1 2022/04/26 City Council Post Agenda Page 48 of 667 BORRADOR: NO CITAR 7 continua de los resultados para impulsar el aprendizaje significativo sobre lo que funciona y lo que no funciona. Las “mejores” soluciones y alternativas pueden —y deben— evolucionar con el tiempo, conforme al avance de la tecnología y de la ciencia, y a medida que los a ctores aprendan lo que es efectivo en el contexto de San Diego. El análisis técnico del RDF propone una gobernanza institucional para toda la región que pueda facilitar la colaboración continua y el aprendizaje en todas las jurisdicciones iv. Compuesta por un Comité Directivo Regional, Grupos de Trabajo de los Sectores y Asesores de primera línea, esta estructura integra a funcionarios de gobierno reconocidos, organismos de planificación, entes reguladores, partes interesadas de la industria, expertos y trabajadores de primera línea en cada sector y de toda la región para probar, evaluar y ajustar soluciones y metas. Tal estructura es necesaria porque lograr grandes cambios y un rápido aprendizaje necesario para abordar el cambio climático es un problema de acción colectiva. Desde la perspectiva individual, las agencias y jurisdicciones locales en la región de San Diego tienen un grado limitado de autoridad directa sobre todo el conjunto de acciones necesarias para descarbonizar (aunque algunas pueden tener más influencia indirecta). La cooperación de toda la región puede aumentar su efectividad a través de señales de políticas consistentes, claras y confiables, de solución conjunta de problemas, una combinación de experiencias sobre lo que funciona y lo que no funciona, un apalancamiento aumentado y una mayor capacidad de recursos combinados. Como analizamos en los Capítulos 7 y 8, los ejemplos de cooperación regional pueden incluir la implementación de incentivos en todo el condado para motivar acciones, recabar y rastrear datos, hacer análisis, brindar apoyo para desarrollar e implementar políticas y reunir partes interesadas y grupos de trabajo para desarrollar estrategias regionales y controlar los avances. Un mecanismo formal, como los Acuerdos Conjuntos de Energía (Joint Power Agreements, JPA) de Acción Climática Regional, pueden facilitar esa cooperación y, al hacerlo, pueden ayudar a escalar el pensamiento estratégico y la toma de decisiones sobre la descarbonización. La Figura 4 describe un proceso institucional a través del cual el gobierno regional, que cuenta con información sobre las soluciones técnicas propuestas en el RDF, y la participación continua con las partes interesadas pueden promover el aprendizaje significativo en cada sector. Dentro de este proceso institucional, el análisis técnico del RDF también propone dos estrategias para participar con actores y agencias fuera de la región y así maximizar el impacto dentro de la región. En primer lugar, los líderes de descarbonización regionales necesitarán trabajar continuamente en conjunto con agencias externas, sobre todo a nivel estatal, para influir en las políticas que afectan los esfuerzos locales (p. ej., normas de energía renovable). En segundo lugar, los líderes locales deben aprovechar el sector privado enfocado en la tecnología del condado y de las múltiples comunidades universitarias para establecer a la región de San Diego como un banco de pruebas para proyectos piloto y de demostración. Mientras que las inversiones solo en innovación a escala regional no tienen demasiadas posibilidades de impactar drásticamente en la disponibilidad tecnológica en todos los sectores, las pruebas locales y el desarrollo de tecnologías desarrolladas fuera del condado pueden contribuir al esfuerzo global de desafiar los límites de la ciencia en cuanto a las soluciones climáticas. Además de impulsar la reducción iv En el Capítulo 7 se encuentra disponible más información sobre la colaboración y el aprendizaje en todas las jurisdicciones. Item 4.1 2022/04/26 City Council Post Agenda Page 49 of 667 BORRADOR: NO CITAR 8 de emisiones locales, la participación externa es una oportunidad para incluir recursos externos y para llamar la atención de formuladores de políticas estatales y federales en la región, con posibles efectos positivos en la economía local. Figura 4. El análisis técnico del RDF como parte de un Marco Integrado de Descarbonización y una estructura institucional. Esta estructura podría incluir organismos gubernamentales regionales para la región de San Diego y una conferencia de gobiernos, por ejemplo. En resumen, el RDF propone la institucionalización de un proceso cooperativo y muy transparente para obtener nueva información sobre “lo que funciona” con la descarbonización, al comparar las mejores prácticas dentro del condado y participar fuera de la región con formuladores de políticas, partes interesadas de la industria y otros expertos que contribuyen con la evolución de la estrategia nacional. No solo es importante reducir al máximo las emisiones locales, sino también que San Diego influya en las políticas climáticas federales y estatales y se convierta en un líder efectivo para otras jurisdicciones. Dado que la región de San Diego representa solo el 0,08 % de las emisiones de todo el mundo, es de vital importancia generar un grupo de seguidores para que la región logre un impacto verdadero en la mitigación del cambio climático. Item 4.1 2022/04/26 City Council Post Agenda Page 50 of 667 BORRADOR: NO CITAR 9 Descarbonización de la electricidad El análisis técnico del RDF identifica las áreas de bajo impacto, de alta calidad y factibles en tér minos técnicos para el desarrollo de infraestructura de energía renovable en la región de San Diego y en el Condado de Imperial vecino. Las emisiones de electricidad representaron aproximadamente el 20 % del Inventario de Emisiones de Gases de Efecto Invernadero para la región de San Diego en 2016 y son la segunda fuente de emisiones más importante de la región (Figura 3). Descarbonizar la producción de electricidad requerirá la implementación sustancial de nuevos recursos renovables. Establecer instalaciones e infraestructura de energía renovable puede tener un impacto significativo sobre el medioambiente y requerirá infraestructura de transmisión nueva y mejorada. La región de San Diego tiene suficientes tierras disponibles para la generación de energía so lar y eólica para lograr un sistema de energía totalmente descarbonizado, en línea con el modelo del sistema aplicado en todo California en el escenario más económico. No obstante, cumplir con las normas de confiabilidad requerirá inversiones importantes p ero inciertas, dentro de un conjunto de recursos adicionales que incluye la gestión según la demanda, el almacenamiento y la generación flexible e intermitente excedente. La región puede producir la demanda de energía proyectada para 2050 con el desarrollo de fuentes de energía solar y eólica en tierra a escala local. Sin embargo, la demanda de energía puede ser mayor o menor que el suministro de energía renovable en un momento determinado (por ejemplo, por la noche o en días nublados). Por lo tanto, son necesarias las inversiones en otras infraestructuras de almacenamiento de energía para proveer a la región de energía renovable confiable. No obstante, los costos de estos recursos adicionales, como energía hidroeléctrica de almacenamiento por bombeo y baterías, son muy inciertos. El análisis técnico del RDF crea múltiples escenarios de selección de sitios para infraestructura de energía renovable para tomar decisiones informadas. Estos escenarios incluyen aquellos con los costos más bajos, aquellos que incluyen al Condado de Imperi al (con su potencial geotermal), aquellos con diferentes combinaciones de fuentes de energía solar y eólica (distribuidas y a escala de servicio público) y los sitios en zonas abandonadas. Los escenarios principales seleccionaron sitios de energía renovable a escala de servicio público, desde los costos más bajos hasta los más altos, mientras que los demás escenarios priorizaron las diferentes metas de políticas que intentan, por ejemplo, evitar las tierras de alto valor de conservación, tierras de alto val or monetario, tierras con alto potencial de captura de carbono y tierras que aún no se consideran desarrollables. Todos los escenarios incluyen costos de infraestructura expresados como el costo de energía nivelado (levelized cost of energy, LCOE), que refiere a un modo de comparar los costos de los proyectos de energía. Este análisis incluye los siguientes escenarios de desarrollo de energía renovable:v 1. Costos más bajos, alta capacidad local (solo en el condado de San Diego). (Figura 5). 2. Costos más bajos, alta entrega de transmisión (condados de San Diego y de Imperial). (Figura 6). v Ver secciones 2.4.5 y 2.4.6 para leer las descripciones de los datos y los métodos para la selección del sitio y el área candidata para el proyecto. Ver secciones 2.5.1 y 2.5.2 para leer sobre los resultados, el análisis y los mapas de los escenarios. Item 4.1 2022/04/26 City Council Post Agenda Page 51 of 667 BORRADOR: NO CITAR 10 3. Impacto ambiental minimizado (evita áreas de alto valor de conservación). (Figura 7). 4. Menos pérdidas de tierras con alto valor monetario (evita tierras de alto valor monetario). (Ver Capítulo 2, Sección 2.5.2 para ver la figura). 5. Menos pérdidas de tierras que, naturalmente, capturan altos niveles de carbono (evita las tierras con potencial natural de captura de carbono). (Ver Capítulo 2, Sección 2.5.2 para ver la figura). 6. Desarrollo maximizado de áreas desarrollables (incluye tierras vacías o asignadas para su redesarrollo). (Ver Capítulo 2, Sección 2.5.2 para ver la figura). 7. Escenario de rango medio (incluye una combinación de áreas desarrollables en la región y en áreas vecinas con mejoras de transmisión, energía geotermal, energía solar para tejados y energía solar y eólica en zonas abandonadas). (Figura 8). Figura 5. Escenario de CPA 1: solamente en la región de San Diego. Este análisis selecciona fuentes de energía solar y eólica en tierra a escala de servicio público desde los costos más bajos hasta los más altos para satisfacer la demanda de energía proyectada. Los tres paneles muestran la cantidad acumulada requerida cada año que le podría permitir a la región alcanzar la descarbonización total de la energía para 2050. Los colores más claros representan las áreas candidatas para el proyecto (Candidate Project Areas, CPA) que se acumularían antes porque son más económicas. Los colores azules representan los recursos de energía eólica, y los colores anaranjados y rojos representan los recursos de energía solar. Este escenario tiene un LCOE promedio de 40,65 USD por megavatio hora (MWh). Item 4.1 2022/04/26 City Council Post Agenda Page 52 of 667 BORRADOR: NO CITAR 11 Figura 6. Escenario de CPA 2: Condados de San Diego y de Imperial. Este análisis selecciona fuentes de energía solar, eólica en tierra y geotermal desde los costos más bajos hasta los más altos para satisfacer la demanda de energía proyectada. Estos mapas muestran la acumulación durante tres períodos de tiempo. Los colores representan la acumulación por año (los colores más claros representan las acumulaciones más rápidas en el tiempo) y las fuentes de energía (anaranjado y rojo para la energí a solar, azul para la energía eólica y verde para la energía geotermal). El recuadro muestra la selección del sitio del área de Jacumba Hot Springs en 2050 y el área que incluye los sitios de Jacumba Valley Ranch (JVR) propuestos o planificados. Este escenario tiene un LCOE promedio de 42,04 USD por megavatio hora (MWh). Figura 7. Escenario de CPA 3: tierra restringida con un alto valor de conservación. Este escenario minimiza el impacto sobre las áreas con alto valor de conservación y sobre otras áreas que son ambientalmente sensibles o importantes. No logra satisfacer la demanda de energía regional y es relativamente más costosa (con un LCOE promedio de 84,5 USD por MWh). Item 4.1 2022/04/26 City Council Post Agenda Page 53 of 667 BORRADOR: NO CITAR 12 El escenario de rango medio utiliza una combinación de tecnologías probadas y escalables que se encuentran dentro de las jurisdicciones del condado de San Diego, del condado de Imperial o de otras entidades regionales, con el fin de satisfacer la demanda tanto en el corto plazo (año 2025) y para la mitad de siglo (se muestra en la Figura 8). Estas tecnologías incluyen el desarrollo de infraestructura de áreas abandonadas (infraestructura de energía solar o eólica construida sobre sitios que antes estaban contaminados); energía eólica y solar a escala de servicio público en los condados de San Diego e Imperial; energía solar en tejados o de relleno (“energía solar de relleno” hace referencia a los proyectos de energía solar construidos en entornos urbanos de alta densidad demográfica) y energía geotermal (una fuente de energía estable y limpia). Figura 8. Escenario de CPA 7: escenario de rango medio en 2050. Esta figura muestra los sitios seleccionados para satisfacer la demanda de electricidad en 2050 en un escenario de rango medio. En este escenario, en 2050, la generación de energía anual proveniente de fuentes de energía renovable nuevas será como se detalla a continuación: 12 % de energía solar en tejados; 23 % de energía solar en áreas abandonadas; 0,1 % de energía eólica en áreas abandonadas; 6 % de energía solar a escala de servicio público en tierras desarrollables del condado de San Diego; 0,4 % de energía eólica a escala de servicio público en tierras desarrollables del condado de San Diego; 38 % de energía solar en el condado de Imperial y 21 % de energía geotermal en el condado de Imperial. La suma de las fuentes de energía solar en tejados y en áreas abandonadas resulta en la reducción del 35 % del impacto en las tierras. Satisface la demanda regional de energía, pero tiene costos promedio altos (LCOE promedio de 109 USD por MWh) en parte, por los altos costos del desarrollo de generación de energía en tejados y en áreas abandonadas. Existen algunas semejanzas en los resultados de todos los escenarios, lo que sugiere que estas pueden ser opciones de infraestructura de energía renovable de “bajo ri esgo”. Estos análisis geoespaciales demostraron que la energía solar en tejados y de relleno pueden ofrecer beneficios a las comunidades y, junto con el desarrollo de las áreas abandonadas, son estrategias de bajo riesgo. A pesar de los costos relativamente altos en comparación con el desarrollo a escala de servicio público, tienen un bajo impacto sobre el medioambiente, la agricultura y las comunidades rurales, y suponen grandes oportunidades de formación laboral cerca de zonas residenciales y centros urbanos. Dado el alto interés comercial y la ubicación relativamente cercana a los sitios de energía renovable planificada o existentes, Item 4.1 2022/04/26 City Council Post Agenda Page 54 of 667 BORRADOR: NO CITAR 13 los modelos seleccionaron el área de energía renovable de JVR en la mayoría de los escenarios. Esta área se ve favorecida por los procedimientos de planificación para todo el estado, incluidos los del Operador de Sistemas Independientes de California (California Independent Systems Operator, CAISO) y la Comisión de Servicios Públicos de California (California Public Utilities Commission, CPUC), y pueden representar un escenario de bajo riesgo para la acumulación a escala de servicio público. Todos los escenarios requieren una consideración a conciencia sobre los asuntos de justicia ambiental y un conocimiento más profundo de los efectos que tendrán estos desarrollos de energía sobre las comunidades en cuestión, las comunidades de bajos ingresos o las comunidades vulnerables. La disponibilidad de energía geotermal o solar significativa en el condado de Imperial es una fuente con un gran potencial para San Diego que puede requerir mejoras en la red de transmisión. Debido a que la infraestructura de energía renovable se desarrolla en las áreas contiguas, como el condado de Imperial, México o las aguas estatales, los escenarios de selección de sitios cambiarán en los análisis de demanda y suministro de energía iterativa. De igual manera, a medida que las nuevas tecnologías y los permisos pongan a disposición recursos energéticos renovables adicionales (por ejemplo, energía eólica marítima, energía de las olas, etc.), será necesario actualizar los escenarios para tener en cuenta el suministro de energía de esos nuevos recursos. Este marco es lo suficientemente flexible como para dar cuenta de la demanda adicional de energía renovable a medida que esté disponible. La región debe articular con las agencias del Estado para garantizar la confiabilidad del sistema. La región de San Diego es parte de una red de sistemas de energía más grande, por lo que la articulación entre las agencias será crucial para la toma de decisiones, la planificación y la implementación de la infraestructura de energía renovable en el futuro. Por ejemplo, existe un Plan de Recursos Integrados (IRP) a nivel estatal en proceso en la CPUC. Las entidades proveedoras de carga (LSE) de todo el estado son parte de este procedimiento, y las LSE locales, como San Diego Gas and Electric (SDG&E) y Community Choice Aggregators (CCA), deben presentar sus planes de adquisiciones anualmente. Estas presentaciones ayudan al estado a anticipar posibles problemas de confiabilidad y ayudan a CAISO a planificar las actualizaciones de transmisión que pueden ser necesarias para adaptarse a los planes de LSE y cumplir con los objetivos climáticos. Esta información se debe indicar en las presentaciones de la LSE a la CPUC en la medida en que los planes de la LSE incluyan la generación distribuida local, la energía solar en tejados, la energía solar comunitaria, los proyectos de contratistas elegibles para acciones u otras especificaciones. Además, los miembros del Concejo Municipal y otros funcionarios gubernamentales a menudo prestan servicio en las juntas de CCA y participan en la planificación de adquisiciones y el establecimiento de objetivos. Los miembros de la junta pueden ayudar a garantizar que los planes de LSE se implementen de manera consistente con los objetivos regionales de reducción de GEI, así como con los objetivos estatales. Esto es especialmente importante cuando los objetivos locales son más ambiciosos que los estatales. Más allá del IRP, existen procedimientos de agencias estatales adicionales que podrían beneficiarse de los aportes de los actores locales (por ejemplo, el procedimiento de adecuación de recursos de la CPUC, el proceso de planificación de transmisión de CAISO y el procedimiento de requisitos de capacidad local de CAISO). En el procedimiento de adecuación de recursos, el personal de la CPUC realiza algunos análisis para garantizar la confiabilidad de la red eléctrica. En el proceso de planificación de transmisión, CAISO realiza algunos análisis para garantizar la confiabilidad, el cumplimiento de la política y la rentabilidad de las mejoras planificadas del sistema de transmisión. En el procedimiento de requisitos de capacidad local, CAISO adopta un enfoque Item 4.1 2022/04/26 City Council Post Agenda Page 55 of 667 BORRADOR: NO CITAR 14 más local que otros procedimientos para el análisis de confiabilidad. Por ejemplo, la Sección 3.3.10 del Estudio técnico de capacidad local CAISO 2022 está dedicada a la región de San Diego-Imperial Valley. Las entidades proveedoras de carga, como SDG&E, SDCP y CEA, deben coordinar las adquisiciones, la adecuación de los recursos y otros temas abordados en estos procedimientos. El estado requiere un sistema eléctrico completamente descarbonizado para 2045 y tiene requisitos de energía solar en tejados en ciertos edificios nuevos. Sin embargo, existen áreas de oportunidad adicionales para descarbonizar más allá de las metas estatales. La descarbonización de la electricidad es la medida más común y más analizada del CAP y, en promedio, contribuye a más reducciones de GEI que cualquier otra medida. La mayoría de los CAP incluyen una medida para formar o unirse a un programa CCA, pero existen oportunidades para aumentar la participación de CCA y para que los CCA se comprometan con una energía 100 % libre de carbono antes de la fecha límite estatal de 2045. Además, existen oportunidades locales para mejorar o complementar los requisitos estatales de energía solar en tejados mediante la adopción de códigos de alcance (o códigos locales que van más allá de los requisitos estatales) y la evaluación de mandatos o incentivos para sistemas de almacenamiento de energía combinados con energía solar en tejados para reducir las emisiones marginales durante el pico de emisión de GEI del sistema eléctrico y aumentar la confiabilidad. Se necesitaría trabajo adicional para hacer que el suministro de electricidad libre de carbono sea más accesible. Históricamente, la energía solar en tejados se instaló en vecindarios de mayores ingresos o en áreas con mayores niveles de propiedades. Existen numerosas opciones para abordar la distribución desigual de las instalaciones solares, incluidos los incentivos y la financiación específicos. Además, los programas de CCA pueden maximizar la participación en el programa de tarifas ecológicas para comunidades desfavorecidas, subsidiar a los clientes en programas de descuento calificados por ingresos para optar por opciones de servicio de electricidad 100 % libre de carbono y apoyar el financiamiento inclusivo para actualizaciones de energía. Autoridad legal para regular la producción de energía:vi Las jurisdicciones en la región de San Diego tienen la autoridad para exigir niveles de suministro de electricidad libre de carbono a través de un CAP y para adquirir suministros de electricidad libre de carbono a través de un CAP. Por lo tanto, pueden suministrar más energía libre de carbono de la requerida por las agencias del estado. Sin embargo, las agencias o entidades estatales o federales todavía regulan los suministros de energía locales para garantizar su confiabilidad, lo que complica la descarbonización total del suministro eléctrico con energía renovable. Además, las jurisdicciones locales también están autorizadas para respaldar plantas de energía térmica de combustible alternativo e infraestructura relacionada que puedan proporcionar electricidad de baja o cero emisiones para cumplir con los requisitos de confiabilidad y calidad del aire (por ejemplo, producción de hidrógeno verde o plantas de energía). Las jurisdicciones locales también están autorizadas para aumentar la generación distribuida a través de CCA y códigos de alcance, y para simplificar los permisos. La regulación adicional de la mayoría de las emisiones de las centrales térmicas de combustibles fósiles es limitada dada la regulación estatal actual y la incertidumbre sobre la prioridad federal. vi Ver el Capítulo 8, sección 8.7 “Descarbonizar el suministro de electricidad” y el Anexo B para obtener más información sobre la autoridad legal. Item 4.1 2022/04/26 City Council Post Agenda Page 56 of 667 BORRADOR: NO CITAR 15 Descarbonización del transporte El sector del transporte es el mayor contribuyente a las emisiones regionales de GEI. En 2016, el transporte terrestre emitió casi la mitad de las emisiones regionales. En 2035, se prevé que las emisiones del transporte terrestre representen aproximadamente el 41 % del total de las emisiones proyectadas (Figura 3).vii La legislación a nivel estatal, los decretos ejecutivos y los objetivos de las agencias establecieron metas para la reducción de GEI en el sector del transporte, y la región de San Diego implementó varias medidas para reducir las emisiones de GEI del transporte regional que incluyeron una variedad de estrategias de reducción de millas vehiculares recorridas (MVR) y estrategias de electrificación de vehículos. La región tiene una sólida base política para reducir las emisiones relacionadas con el transporte. Sin embargo, los compromisos actuales a través de los CAP y otras políticas no son coherentes con los niveles de reducción requeridos por los decretos ejecutivos estatales para la neutralidad de carbono. Incluso los mejores compromisos del CAP para reducir las emisiones del transporte terrestre a través de la reducción de MVR, la adopción de VE y las estrategias de eficiencia de combustible, si se aplican a toda la región, no se prevé que alcancen las metas de cero emisiones del estado. Existen áreas de oportunidad para acelerar la adopción de VE y la reducción de MVR en función de las políticas y los patrones regionales existentes de propiedad de vehículos, el comportamiento de viaje y el desarrollo del uso del suelo. Estas áreas de oportunidad incluyen medidas de CAP para reducir las MVR y las emisiones de los vehículos. Las políticas actuales y los comportamientos de los consumidores, conductores y desarrolladores ya están aumentando la adopción de VE y reduciendo las MVR. Sin embargo, existen áreas de oportunidad adicionales para acelerar la descarbonización del transporte regional. Para reducir las MVR, las jurisdicciones pueden mejorar el tránsito y el transporte activo (uso de bicicleta y caminar) y fomentar el crecimiento inteligente, la conectividad urbana y la densidad al cambiar la zonificación para promover desarrollos de uso mixto y desincentivar el estacionamiento.viii Para reducir las emisiones, las jurisdicciones pueden identificar áreas para las medidas de reducción del tráfico, establecer requisitos de prohibición de dejar en marcha el motor con el vehículo parado (especialmente alrededor de las escuelas) y proporcionar incentivos para el comportamiento de los conductores. Además, las jurisdicciones locales tienen la oportunidad de modificar el retiro de vehículos, lo que puede priorizarse en las comunidades de interés para reducir rápidamente la carga de contaminación del aire en esas comunidades. Finalmente, los gobiernos locales pueden aumentar el uso de vehículos eléctricos y combustibles alternativos bajos en carbono, particularmente para vehículos medianos y pesados, en flotas existentes y futuras. La Figura 9 muestra un menú de oportunidades de políticas para aumentar la adopción de VE, con opciones de políticas que varían tanto en efectividad (es decir, qué tan buena es la política para aumentar la adopción de VE) como en amplitud (es decir, a cuántas personas puede llegar). vii Ver el Capítulo 8, sección 8.5 para consultar un análisis detallado de los compromisos del CAP en relación con el transporte. Tenga en cuenta que este valor incluye los cambios en las ventas de VE proyectados, pero no incluye las medidas de CAP. viii Las oportunidades para aumentar la densidad en las áreas de relleno se identificaron en el Capítulo 3. Se encuentran más detalles sobre cómo reducir las MVR en el Capítulo 8. Item 4.1 2022/04/26 City Council Post Agenda Page 57 of 667 BORRADOR: NO CITAR 16 Figura 9. Una variedad de opciones de políticas para acelerar la adopción de VE. Es probable que las políticas sean más efectivas hacia la derecha y que tengan una aplicación más amplia hacia abajo. Por lo tanto, se predice que la parte inferior derecha será la más efectiva y tendrá la aplicación más amplia de la medida que se muestra, mientras que la parte superior izquierda será la menos efectiva y tendrá la aplicación más limitada de las medidas que se muestran. Existen muchas oportunidades de colaboración y de articulación regional. La naturaleza del transporte terrestre y de los marcos institucionales existentes que coordinan las decisiones de transporte sugiere que la colaboración regional en la descarbonización del transporte será más efectiva que las medidas CAP individuales. Los CCA son un ejemplo de un mecanismo local, generalmente a través de los Acuerdos de poderes conjuntos (JPA), que pueden apoyar la electrificación del transporte mediante el desarrollo de programas para incentivar localmente la adopción de VE más allá de los programas estatales y federales. De igual manera, se puede identificar otra descarbonización del transporte regional que puede promover fondos locales para la descarbonización del transporte. Además, las jurisdicciones locales pueden colaborar para evaluar los impactos de equidad del uso de VE frente al aumento del uso del transporte público en varias comunidades, y para alinear los análisis de equidad de transporte regional (por ejemplo, los análisis de equidad de SANDAG) con los análisis de equidad de CAP (por ejemplo, los análisis de equidad de la ciudad de San Diego). Item 4.1 2022/04/26 City Council Post Agenda Page 58 of 667 BORRADOR: NO CITAR 17 Autoridad legal para regular la descarbonización del transporte:ix Las jurisdicciones y agencias locales en la región de San Diego tienen amplia autoridad sobre el transporte, basada tanto en la autoridad de uso del suelo derivada localmente sobre la planificación y el desarrollo como en la autoridad delegada del estado y los gobiernos federales. Estas autoridades pueden ser limitadas o anuladas por las leyes estatales o federales, como es el caso de la regulación de los combustibles y las emisiones de los tubos de escape. Además, las jurisdicciones locales pueden establecer políticas y regulaciones de cambio climático para reducir los GEI del transporte en planes generales (GP), CAP, zonificación o regulaciones de desarrollo orientadas al tránsito. Además, pueden requerir infraestructura para el cambio de combustible en edificios (por ejemplo, equipos de carga de VE), construir infraestructura de apoyo en derechos de paso públicos o en terrenos públicos, y apoyar la producción e infraestructura de combustibles alternativos como el hidrógeno. Las jurisdicciones locales pueden regular sus propias flotas mediante la compra, el mantenimiento o el cambio de sus flotas. También tienen la autoridad de regular las emisiones indirectas del transporte para mantener las emisiones locales en línea con los estándares de calidad del aire federales y estatales. Los estatutos y reglamentos estatales crean una oportunidad para alinear la acción local que reduce los costos de implementación al traer proyectos financiados por el estado a la región, particularmente en las comunidades de interés, y al implementar tecnología desarrollada por fondos estatales o federales. Por último, las jurisdicciones parecen tener más autoridad legal a través del uso del suelo, la ubicación de la infraestructura de transporte, la autoridad delegada y los poderes fiscales para reducir los GEI del transporte que la representada por los compromisos en los CAP. Se necesitaría trabajo adicional por parte de las jurisdicciones locales para evaluar los límites de su autoridad y aumentar las reducciones de GEI del transporte terrestre. Descarbonización de edificios El análisis técnico del RDF estudia el conjunto de edificios y de emisiones asociadas a ellos del sector de la infraestructura y la construcción de la región. Las emisiones directas de los edificios provienen de la combustión de combustibles fósiles en el lugar y contribuyen a las emisiones regionales de GEI, por lo que este capítulo se centra en la descarbonización de los edificios mediante la eliminación de sus emisiones de combustibles fósiles para 2045. El análisis se centra en la electrificación de los sistemas que son responsables de las emisiones por uso final, como el calentamiento de espacios y agua, y el uso de combustibles bajos en carbono, como el biometano y el hidrógeno, en los que la electrificación aún no es factible. El análisis considera tres modelos para alcanzar un sector de la construcción libre de carbono para 2050: un modelo que enfatiza la alta electrificación de los sistemas de combustibles fósiles, un modelo en el que las bombas de calor son altamente eficientes cuando están electrificadas y un modelo en el que se utilizan combustibles bajos en carbono para reducir las emisiones mientras se produce una adopción más lenta de la electrificación.x ix Ver el Capítulo 8, sección 8.5 “Descarbonizar el transporte” y el Anexo B para obtener más información sobre la autoridad legal. x En el Capítulo 4, sección 4.4 y en otras partes del capítulo, se encuentran más detalles sobre los modelos. Item 4.1 2022/04/26 City Council Post Agenda Page 59 of 667 BORRADOR: NO CITAR 18 Reemplazar los sistemas de calentamiento de agua y calefacción de espacios basados en combustibles fósiles con sistemas eléctricos debe ser un enfoque principal de la política para la reducción de emisiones en los edificios. La calefacción de espacios y el calentamiento de agua representan una gran parte de las emisiones de los edificios en la región de San Diego porque tienden a depender del gas natural (Figura 10). Por esta razón, reemplazar estos sistemas, así como otros sistemas basados en combustibles fósiles como hornos y secadoras, con las versiones eléctricas tendrá un gran impacto en la descarbonización de los edificios. En particular, el calentamiento de espacios y agua son propicios para la electrificación porque las tecnologías de bombas de calor disponibles para ambos usos son más eficientes que los sistemas de gas natural, y proporcionan más calefacción por unidad de aportación de energía. Para la regulación de la temperatura de edificios, las bombas de calor eléctricas ofrecen calefacción y refrigeración desde la misma unidad, lo que las hace ideales para hogares que aún no tienen aire acondicionado. Los calentadores de agua producen la mayor cantidad de emisiones en los edificios, por lo que reemplazarlos con versiones electrificadas provocará reducciones de emisiones descomunales por los costos. Por último, este análisis concluye que los costos no difieren en gran medida entre la construcción nueva y la adición de unidades eléctricas y el reacondicionamiento de electrodomésticos viejos. Por lo tanto, las políticas regionales deben apoyar la creciente adopción de sistemas eficientes de calentamiento de agua y espacios con bombas de calor, tanto en edificios nuevos como existentes. Además, las políticas destinadas a reemplazar los sistemas de calentamiento de agua y espacio con combustibles fósiles deben centrarse en aumentar la aceptación entre los residentes de bajos ingresos y los propietarios de edificios de alquiler a través de la asistencia. Tales políticas abordarían algunas desigualdades históricas en la calidad de la vivienda, la injusticia ambiental, las disparidades de salud debido a la contaminación del aire interior o los costos de los servicios públicos y garantizarían que los residentes e inquilinos de bajos ingresos no queden excluidos de los objetivos de descarbonización de edificios y que no sigan pagando tarifas de gas cada vez más altas. Figura 10. Uso de energía para calefacción de los espacios residenciales y agua por tipo de combustible (% de cuentas de clientes) en la región de San Diego. Fuente: DNV GL Energy Insights. 2021. 2019 Estudio de saturación de electrodomésticos residenciales de California (RASS). Item 4.1 2022/04/26 City Council Post Agenda Page 60 of 667 BORRADOR: NO CITAR 19 Existen varias acciones a corto plazo que son relativamente beneficiosas para la descarbonización de edificios. En primer lugar, establecer estándares “listos para la electrificación” o “totalmente eléctricos” para construcciones nuevas y renovaciones importantes a través de códigos de energía para edificios reducirá los costos asociados con la transición de los combustibles fósiles. En segundo lugar, algunos sistemas de equipos de combustibles fósiles existentes solo funcionarán una vez para 2050. El reemplazo de los sistemas de calefacción de combustibles fósiles al final de su vida útil con sistemas electrificados es una opción al alcance de la mano. Esta es una prioridad a corto plazo. En tercer lugar, la recopilación mejorada de datos es una acción fundamental de bajo costo para el desarrollo de políticas futuras. Más datos sobre las emisiones de los edificios y la descarbonización informarán mejor a los encargados de tomar las decisiones a medida que elaboran políticas para abordar las contribuciones del sector de la construcción a una región de cero emisiones netas. Los combustibles gaseosos bajos en carbono se pueden utilizar para usos finales difíciles de electrificar, aunque se requiere investigación y pruebas piloto. Algunos sistemas de construcción son difíciles de electrificar, por lo que una forma de reducir las emisiones de GEI de esos sistemas es usar combustibles que no emitan GEI netos a la atmósfera. De igual manera, dichos combustibles pueden utilizarse para estos u otros sistemas antes de electrificarlos. Los combustibles gaseosos bajos en carbono podrían incluir biometano o hidrógeno. Sin embargo, cada uno de estos combustibles alternativos tiene compensaciones de costo y eficiencia, pero también presentan incertidumbres, por lo que se necesitarán más investigaciones y pruebas piloto antes de la implementación. El riesgo de la compañía de gas de no recuperar su inversión en activos (es decir, su riesgo de costos de transición) se puede mitigar minimizando las extensiones o reemplazos inneces arios del sistema de gasoductos y acelerando la depreciación de los activos de servicios públicos existentes. La eliminación gradual del consumo de gas natural de uso final en los edificios puede dar lugar a activos de transición de gas natural, definidos como una infraestructura, por ejemplo, un gasoducto de gas natural que ha dejado de utilizarse antes de llegar al final de su vida útil. Para empresas como SDG&E, los activos de transición representan posibles pérdidas financieras debido a los altos costos de capital para crear o reemplazar la infraestructura de gas. Mitigar estos activos de transición será una importante consideración de políticas. Una herramienta para hacerlo es minimizar la extensión o el reemplazo de la infraestructura de gasoductos innecesaria. SDG&E invierte en activos de gas natural al extender tuberías para brindar servicio a nuevos clientes y al reemplazar tuberías viejas o dañadas y otros activos. Las políticas como exigir que todas las construcciones nuevas sean completamente eléctricas mitigarían las pérdidas de activos de transición por nuevas inversiones en tuberías para nuevos clientes, pero esto no mitigaría las pérdidas de invertir en el reemplazo de infraestructura obsoleta. La exploración y la puesta a prueba de alternativas distintas de los oleoductos a la infraestructura nueva y de reemplazo, incluida la electrificación de los usos finales en lugar de reemplazar la infraestructura, podrían identificar oportunidades para mitigar el riesgo. Los CAP tienen relativamente pocas medidas para electrificar edificios y el impacto de GEI de las medidas de bajo riesgo, a pesar de su importancia para la descarbonización regional. Solo seis CAP incluyen medidas relacionadas con la electrificación de edificios, y las reducciones de GEI en los CAP asociados con la eficiencia y la electrificación son relativamente bajas. En comparación con el nivel de Item 4.1 2022/04/26 City Council Post Agenda Page 61 of 667 BORRADOR: NO CITAR 20 electrificación necesario tanto en los edificios nuevos como en los existentes, como se describe en el Capítulo 4, las medidas del CAP no alcanzan el nivel de descarbonización de los edificios en los modelos del análisis técnico del RDF. Las políticas sobre la descarbonización de edificios nuevos y existentes son fundamentales. El 80 % de los edificios que existirán en 2050 ya existen, por lo que descarbonizar estos edificios será fundamental para descarbonizar el sector de la construcción. Si bien los códigos de construcción estatales regulan las modificaciones y adiciones a ciertos edificios existentes, las políticas locales podrían alentar o exigir aún más la eficiencia energética y la electrificación en muchos otros edificios existentes.xi La descarbonización de los edificios municipales puede ser una política de bajo riesgo porque la implementación de medidas rentables y la electrificación de esos edificios puede ayudar a reducir los costos operativos y el modelado de estas acciones puede alentar a actuar a los propietarios de viviendas y negocios. Existe la oportunidad y la necesidad de evaluar las consideraciones de equidad social de desarrollo de políticas de descarbonización. En el contexto de la descarbonización de edificios, hay varios aspectos de equidad a considerar, entre los que se incluyen la alta proporción de inquilinos en comunidades de interés, la falta relativa de datos y análisis relacionados con la equidad y las políticas relacionadas con la construcción, y las posibles consecuencias de costo de políticas de descarbonización de edificios, particularmente en electrificación. Se necesitaría trabajo adicional para desarrollar la capacidad y las herramientas para comprender y abordar las consecuencias de equidad en construcción y otras políticas de descarbonización en la región de San Diego. Autoridad legal para regular la descarbonización de los edificios:xii Las jurisdicciones locales tienen la autoridad para regular las emisiones de GEI del uso final de combustibles fósiles y otras fuentes de energía en edificios, que es el medio principal para descarbonizar edificios. Las jurisdicciones locales también actúan con autoridad delegada sobre el entorno construido para exigir códigos de energía más estrictos, regular directamente las emisiones contaminantes del aire de los edificios y procurar suministros de energía alternativos en los edificios públicos. La autoridad adicional puede provenir de la Ley de Calidad Ambiental de California (CEQA) al establecer un umbral más estricto para determinar el impacto ambiental. Se evita que los gobiernos locales establezcan estándares de electrodomésticos de eficiencia energética, regulen el suministro, la transmisión y el almacenamiento de gas natural y los refrigerantes con alto potencial de calentamiento global (por ejemplo, los HFC). xi Ver el Capítulo 8, sección 8.6 para obtener más detalles sobre ejemplos de autoridades locales que pusieron en marcha la descarbonización en edificios existentes. Ver el Capítulo 7, sección 7.3.1 para leer sobre un ejemplo local. xii Ver Capítulo 8, sección 8.6 “Descarbonizar edificios” y el Anexo B para obtener más información sobre la autoridad legal. Item 4.1 2022/04/26 City Council Post Agenda Page 62 of 667 BORRADOR: NO CITAR 21 Soluciones climáticas naturales El análisis técnico del RDF investiga las soluciones climáticas naturales (NCS) disponibles en la región de San Diego y su potencial para capturar y almacenar de forma natural CO2 y otros GEI. Las NCS son procesos que protegen o mejoran la capacidad de las tierras naturales y de trabajo (NWL) para capturar y almacenar GEI de la atmósfera a través de plantas y suelos. Entre las “tierras de trabajo” se incluyen las tierras agrícolas como los huertos, los viñedos, los pastizales, y demás. La “captura” hace referencia a la medida anual de cómo se eliminan muchos GEI de la atmósfera, y “almacenamiento” hace referencia a la cantidad total de GEI que se capturó. El almacenamiento de carbono en la región (Figura 11) es importante porque existen formas de evitar que el carbono almacenado se libere a la atmósfera, como ocurre cuando el uso del suelo cambia de las tierras de trabajo a áreas urbanas, por ejemplo. Al comprender el potencial de almacenamiento y captura de carbono de un espacio, se puede evitar que las áreas con altos niveles de carbono almacenado emitan su carbono a la atmósfera y se puedan proteger las áreas con alto potencial de captura. Figura 11. Estimaciones de carbono almacenado total (medidas en toneladas métricas de dióxido de carbono equivalente por hectárea, o t CO2e ha-1) para la región de San Diego. Los colores más cálidos representan las estimaciones de existencias de carbono más grandes, los colores más fríos representan las estimaciones de existencias más bajas y el blanco representa que no hay existencias de carbono. Item 4.1 2022/04/26 City Council Post Agenda Page 63 of 667 BORRADOR: NO CITAR 22 Las NWL regionales capturan y almacenan grandes cantidades de dióxido de carbono, pero no lo suficiente como para dar cuenta de las emisiones causadas por el hombre. Las NWL pueden actuar como sumideros netos más fuertes de lo que lo hacen actualmente, aun que esto requerirá inversiones para reforzar las NCS y minimizar las emisiones de carbono del suelo y las actividades de uso del suelo. Para contabilizar con precisión las emisiones netas de carbono del uso de la tierra, se deben recopilar datos locales e integrarlos en los cálculos regionales de carbono. La región puede ampliar la captura de carbono anual y el almacenamiento de carbono a largo plazo mediante la inversión en NCS que aumentan la captura natural y reducen las emisiones del suelo. Estas pueden incluir la inversión en “cultivo de carbono”, la restauración y expansión de los hábitats de “carbono azul”, la plantación de árboles y otras plantas en áreas urbanas, la prevención de incendios forestales y la plantación de árboles en las NWL. Los datos locales pueden mejorar las políticas y las técnicas de gestión de NCS y, por lo tanto, aumentar la captura regional. La NCS más efectiva y económica en la región de San Diego es evitar el cambio de uso de la tierra mediante la protección de las tierras naturales y de trabajo, excepto cuando se requiere un cambio de uso de la tierra para otras acciones de descarbonización, como la ubicación de infraestructura de energía renovable. Las tierras naturales y de trabajo existentes son sumideros naturales de carbono, por lo que evitar que estas tierras se conviertan en zonas urbanas o edificadas permitirá 1) una captura anual continuada y 2) evitará las emisiones puntuales a causa de la eliminación de la vegetación, la alteración del suelo, y demás. Este informe estima que la captura anual natural en las NWL puede ser de hasta 2 millones de toneladas métricas (t) de CO2 en circunstancias ideales y que puede haber 58 millones de toneladas métricas de CO2 almacenadas en la vegetación, los restos leñosos, la hojarasca y los suelos, algunas de las cuales se liberarían con el cambio de uso del suelo. Es importante la captura anual en las NWL para aumentar el almacenamiento natural de CO2. La captura natural no se incluyó en el análisis técnico de las emisiones del RDF, ya que se centró en el sistema energético. El cambio en el uso del suelo será necesario para instalar la infraestructura de energía renovable a escala de servicios, que apoyará la descarbonización y permitirá el desarrollo de viviendas. Será importante minimizar el cambio de uso del suelo en las zonas con mayor cantidad de reservas naturales de carbono y con mayor potencial de retención, así como proteger las zonas con grandes beneficios colaterales (como las zonas que proporcionan mejoras en la calidad del aire y del agua, la protección de la biodiversidad y mejoras en los resultados de salud pública). Otras NCS regionales importantes consideradas por el análisis técnico del RDF serían menos efectivas o más costosas para la captación de carbono, aunque produc en importantes beneficios secundarios. Entre ellas se encuentran la agricultura del carbono (prácticas agrícolas que aumentan la captura y el almacenamiento de carbono y minimizan las emisiones de GEI en las tierras agrícolas), la protección y la expansión o restauración de los humedales y la silvicultura urbana. La restauración de hábitats a gran escala y la reforestación, que no se consideraron en este informe, son costosas y pueden no ser eficaces. La prevención de incendios forestales también será importante por las emisiones y por muchas otras razones económicas y sociales. Otras opciones de NCS requieren importantes inversiones de capital y es probable que tengan un rendimiento de captura a corto plazo menor que la preservación. Item 4.1 2022/04/26 City Council Post Agenda Page 64 of 667 BORRADOR: NO CITAR 23 Las NCS ofrecen beneficios secundarios cuantificables más allá de la descarbonización. Cada una de las NCS en estudio ofrece numerosos beneficios secundarios cuantificables. Estos beneficios secundarios incluyen, entre otros, la mejora de la calidad del aire y del agua, la mejora de los resultados en materia de salud pública, la protección de la biodiversidad, la protección del funcionamiento de los ecosistemas, el aumento de la sombra en las zonas urbanas, la disminución de las necesidades de agua y de fertilizantes en las explotaciones agrícolas y en los pastizales, la mejora de la estética en las zonas urbanas y el potencial para aumentar la justicia medioambiental. Estos beneficios secundarios deben contemplarse a la hora de elaborar y aplicar las políticas con el fin de aumentar la resiliencia ecológica, económica y social. La equidad debe ser una prioridad en todas las decisiones sobre las NCS. Las NCS deben contemplarse desde el punto de vista de la descarbonización y la equidad. Siempre que sea posible, se debe dar prioridad a las comunidades afectadas por el reverdecimiento urbano, la plantación de árboles, la agricultura climática y la restauración de hábitats, ya que estas NCS tienen beneficios secundarios extraordinarios al mejorar la calidad del aire y del agua, así como la salud humana. En el pasado, estas comunidades recibieron menos inversiones y soportaron niveles desequilibrados de daños ambientales. Se debe hacer todo lo posible para abordar de forma activa estas desigualdades históricas. La única medida cuantificada del PAC relevante para esta vía es la plantación de árboles urbanos, pero existen oportunidades para aplicar otras NCS de forma colaborativa. Es posible aplicar otras medidas en el marco de la autoridad local de uso del suelo. Las medidas de plantación de árboles contribuyen en promedio a algo más del 1 % de las reducciones locales de GEI en los CAP. Estas medidas pueden mejorarse mediante la colaboración jurisdiccional. Las medidas adicionales de los CAP de NCS son posibles bajo la autoridad existente y podrían contribuir a la conservación, preservación y restauración de la tierra en tierras naturales y de trabajo. Los propietarios privados y los gobiernos tribales también pueden preservar la tierra, evaluar y financiar proyectos piloto de eliminación y almacenamiento de carbono y colaborar con los organismos públicos. En forma conjunta, existe la oportunidad de ampliar las protecciones de las tierras naturales y de trabajo para cumplir el nuevo mandato del SB 27 (2021) que exige la creación de proyectos de eliminación y almacenamiento de carbono en este tipo de tierras. También existen oportunidades para incluir datos locales en la gestión y planificación de las tierras, así como en los CAP. Por ejemplo, los CAP pueden utilizar la metodología de contabilización del carbono de la Junta de Recursos del Aire de California (CARB) en las tierras naturales y de trabajo y los datos de las universidades para crear medidas y objetivos más sólidos. Además, la región puede llevar a cabo una contabilización periódica del carbono y controlar los cambios de este elemento en los terrenos naturales y de trabajo con el paso del tiempo para comprender cómo se conservan las reservas de carbono y si se producen emisiones netas debido a los cambios en el uso del suelo. Autoridad legal para regular las emisiones negativas de las soluciones climáticas naturales y del uso de la tierra: xiii No está claro si las jurisdicciones locales tienen la autoridad para decidir sobre el uso de la tierra, la zonificación, la preservación de la tierra y las servidumbres agrícolas, además de las xiii Ver el Capítulo 8, sección 8.8 “Soluciones climáticas naturales” y el Anexo B para obtener más información sobre la autoridad legal. Item 4.1 2022/04/26 City Council Post Agenda Page 65 of 667 BORRADOR: NO CITAR 24 actividades en las tierras naturales y de trabajo privadas más allá de la designación del uso de la tierra que afectaría a las emisiones o a la captación de GEI. La jurisdicción del uso de la tierra de la región es aún más complicada porque está compuesta por tierras federales, estatales, tribales y privadas, tierras sumergidas y aguas. Varios estatutos y agencias regulan los distintos tipos de tierra, pero ninguno se centra en las emisiones o la captación de GEI en relación con el uso de la tierra. Las agencias estatales de regulación y uso del suelo también operan con un gran número de obligaciones legales que se aplican a las tierras pertenecientes a múltiples jurisdicciones y que afectan a las emisiones y a la contabilización de los GEI. Los reglamentos y decretos ejecutivos de California exigen a las agencias estatales de uso del suelo que contabilicen las emisiones de GEI de las tierras naturales y de trabajo. Además, estas agencias estatales están empezando a evaluar y regular la eliminación y el almacenamiento de carbono en estas tierras con objetivos significativos en 2030. Existe una oportunidad para que las jurisdicciones locales trabajen con los propietarios y administradores de tierras para lograr los objetivos estatales, regionales y locales relacionados con las tierras naturales y de trabajo. Impactos de la descarbonización en el empleo en la región de San Diego El análisis técnico del RDF calcula el cambio neto en los puestos de trabajo del sector energético en respuesta al caso central de las vías de descarbonización modeladas a partir del modelo EER. El análisis se centra en los cambios en el empleo entre 2021 y 2030, de acuerdo con el Plan de Acción para el Empleo y el Clima de California para 2030, e informa sobre las estrategias de desarrollo de la fuerza laboral. Además, este informe analiza la generación media anual de empleo entre 2020 y 2050, sobre la base del calendario completo del modelo EER. Para la eliminación progresiva de los combustibles fósiles y el modelado de las pérdidas de empleo asociadas, el análisis se centra en el periodo 2021-2030, en el que el caso central del modelo EER estima reducciones limitadas de las actividades a base de combustibles fósiles. En principio, esto se debe a las estimaciones del modelo de un consumo constante de gas natural y una disminución del 20 % del consumo de petróleo para 2030, en relación con los niveles de consumo actuales. El análisis técnico del RDF se centra en los impactos cuantitativos sobre el empleo como resultado de los esfuerzos de descarbonización profunda en los sectores de la energía, la construcción y el transporte, y sirve de base para un informe de Inclusive Economicsxiv sobre las estrategias de desarrollo de la fuerza laboral. Entre 2021 y 2030, las vías de descarbonización regional generarían una media de casi 27 000 empleos al año en la región de San Diego. A través de la creación de puestos de trabajo directos, indirectos e inducidos, el análisis técnico del RDF estima que las vías de descarbonización crearán 27 000 puestos de trabajo al año para la región.xv En la tabla 1 se observa que los gastos en la demanda de energía generarán cerca de 13 500 empleos entre 2021 y 2030. En la tabla 2 se observa que el suministro de energía generará cerca de 13.500 empleos entre 2021 y 2030. xiv Para acceder al informe de Inclusive Economics “Putting San Diego County on the High Road: Climate Workforce Recommendations for 2030 and 2050”, puede consultar la plataforma de Compromiso del condado de San Diego y seleccionar el informe para descargar o comentar en https://engage.sandiegocounty.gov/rdf. xv Para obtener una contabilización más detallada de estas actividades, ver el Capítulo 6, sección 6.3. Item 4.1 2022/04/26 City Council Post Agenda Page 66 of 667 BORRADOR: NO CITAR 25 Según el análisis técnico del RDF, ningún trabajador de las industrias relacionadas con los combustibles fósiles de la región tendrá que experimentar un desplazamiento de puestos de trabajo antes de 2030, incluso con la contracción de la demanda de combust ibles fósiles. La combinación de suministros energéticos en el modelo EER sugiere que habrá pocos o ningún cambio en el consumo de combustibles fósiles antes de 2030.xvi Esto indica que no habrá pérdidas de puestos de trabajo en los sectores del petróleo y el gas en la región de San Diego antes de 2030. El condado de San Diego y los gobiernos locales deberían comenzar ahora mismo a desarrollar un conjunto de políticas viables de transición justa para los trabajadores de la comunidad que experimentarán el desplazamiento de puestos de trabajo entre 2031 y 2050. Después de 2030, se estima que el modelo EER prevé una fuerte contracción tanto en el sector del petróleo como en el del gas. El modelo predice tasas de contracción del 95 % en el petróleo y del 75 % en el gas para 2050. Es fundamental que los gobiernos regionales empiecen a desarrollar políticas para una transición justa para estos trabajadores que les permitan acceder a puestos de trabajo equivalentes o de mejor calidad en la economía de las energías limpias o en otros lugares. Los costos de una transición justa serán mucho más bajos si la transición se lleva a cabo de manera constante y no por etapas. Con una transición constante, la proporción de trabajadores que se jubilarán de forma voluntaria en un año determinado será prede cible, lo que evitará la necesidad de prestar apoyo a una parte mucho mayor de trabajadores en un momento dado. El ritmo de la transición de los empleos en el sector de los combustibles fósiles a los empleos que se basan en las energías renovables repercutirá en la equidad y la justicia de la transición. Los cambios y las contracciones repentinas provocarían una pérdida repentina de puestos de trabajo, mientras que los cambios y las contracciones constantes supondrían una pérdida menor de puestos de trabajo, ya que los empleados podrían hacer la transición a nuevos puestos de trabajo o podrían jubilarse por voluntad propia. La producción geotérmica de los cinco emplazamientos que se identificaron en el condado de Imperial generaría 1900 puestos de trabajo al año durante un periodo de 10 años. En el Capítulo 2 se identifican cinco áreas para la producción de energía geotérmica en el condado de Imperial. El análisis de este capítulo concluye que se crearán 1900 puestos de trabajo al año en la región del sur de California durante un período de 10 años para el desarrollo y la operación de estas cinco plantas de energía geotérmica. Algunos de estos puestos de trabajo podrían surgir en la región de San Diego. xvi Los detalles sobre el Caso Central del modelo EER, que se utilizó aquí, están disponibles en el Anexo A. Item 4.1 2022/04/26 City Council Post Agenda Page 67 of 667 BORRADOR: NO CITAR 26 Tabla 1 Promedio de puestos de trabajo creados en la región de San Diego anualmente a través de los gastos de demanda de energía de 2021-2030, por subsectores y tecnología. Las cifras suponen un crecimiento medio anual de productividad del 1 %. Área de inversión Promedio de gasto anual Empleos directos Empleos indirectos Empleos directos + Empleos indirectos Empleos inducidos Empleos directos + Empleos indirectos + Empleos inducidos Vehículos USD 7.7 millones 3,427 1,427 4,854 1,508 6,362 HVAC USD 897.0 millones 1,345 699 2,044 764 2,808 Refrigeración USD 761.9 millones 1,315 491 1,806 711 2,517 Electrodomésticos USD 188.6 millones 143 77 220 78 298 Construcción USD 113.4 millones 263 149 412 146 558 Iluminación USD 106.6 millones 177 95 272 100 372 Fabricación USD 45.7 millones 40 32 72 27 99 Otro comercial y residencial USD 38.9 millones 59 30 89 33 122 Agricultura USD 17.2 millones 144 21 165 45 210 Minería USD 2.4 millones 1 1 2 1 3 TOTAL USD 9.9 millones 6,914 3,022 9,936 3,413 13,349 Fuente: IMPLAN 3.1 Tabla 2 Promedio de puestos de trabajo creados en la región de San Diego anualmente a través de los gastos de suministro de energía de 2021-2030, por subsectores y tecnología. Las cifras suponen un crecimiento medio anual de productividad del 1 %. Área de inversión Promedio de gasto anual Empleos directos Empleos indirectos Empleos directos + Empleos indirectos Empleos inducidos Empleos directos + Empleos indirectos + Empleos inducidos Combustibles fósiles USD 4.4 millones 2,538 3,777 6,315 3,805 10,120 Renovables limpias USD 629.5 millones 1,488 601 2,089 848 2,937 Transmisión y almacenamiento USD 45.9 millones 34 17 51 31 82 Tecnologías de suministro adicionales USD 45.1 millones 118 35 153 57 210 Otras inversiones USD 4.5 millones 10 3 13 6 19 TOTAL USD 5.1 millones 4,188 4,433 8,621 4,747 13,368 Fuente: IMPLAN 3.1 Item 4.1 2022/04/26 City Council Post Agenda Page 68 of 667 BORRADOR: NO CITAR 27 Oportunidades de políticas localesxvii En el análisis técnico del RDF se evalúan los compromisos actuales de reducción de GEI en los Planes de Acción Climática (CAP) para determinar la necesidad de actividades adicionales para situar a la región en una trayectoria que permita alcanzar los objetivos de descarbonización. Además, identifica oportunidades para que las jurisdicciones locales de la región tomen medidas adicionales que apoyen las vías de descarbonización para la producción de energía, el transporte, los edificios y las soluciones climáticas naturales. Para ello, se llevaron a cabo varios análisis novedosos. En primer lugar, se analiza la autoridad de los gobiernos y los organismos locales para influir y regular las emisiones de GEI y se resume la autoridad de los principales organismos federales, estatales y locales, así como la legislación y la reglamentación clave a nivel federal y estatal para aclarar la capacidad de los gobiernos locales en materia de reducción de las emisiones de GEI.xviii En segundo lugar, se evalúan todos los CAP de la región para determinar la frecuencia con la que se incluyó una medida determinada en los CAP, los impactos relativos en los GEI de los compromisos de los CAP y la integración de las consideraciones de equidad social.xix En tercer lugar, se realiza un análisis de escenarios para estimar las reducciones regionales totales de GEI resultantes de todos los compromisos de los CAP adoptados y pendientes. Luego, se calcula el posible impacto en materia de GEI de un escenario que aplique los mejores compromisos del CAP a todas las jurisdicciones.xx Este análisis de escenarios toma el compromiso del CAP para una categoría determinada de sus políticas, por ejemplo, los objetivos de plantación de árboles en zonas urbanas o rurales, que producirá la mayor reducción relativa de GEI y, luego, aplica ese compromiso a todas las jurisdicciones de la región de San Diego, sin tener en cuenta los compromisos actuales o previstos en esa categoría. Esto se puede considerar como el límite superior de las reducciones posibles de GEI a partir de los compromisos actuales del CAP. Por último, este capítulo utiliza los resultados de estos análisis, además de los resultados de otras investigaciones y análisis, para identificar oportunidades para una mayor acción local y colaboración regional en cada una de las cuatro vías de descarbonización.xxi Las jurisdicciones locales tienen autoridad para influir y regular las emisiones de GEI. Los gobiernos locales pueden influir y regular las emisiones de GEI mediante la aceleración de los objetivos y las políticas reglamentarias del estado, la adopción de ordenanzas que vayan más allá de la legislación estatal y el uso de una autoridad única para adoptar y aplicar políticas. La autoridad local proviene tanto del poder derivado de la Constitución, que es una autoridad amplia para promover la salud pública, la seguridad o el bienestar general de la comunidad, como de la autoridad delegada por las leyes del estado. Se desconoce el alcance total del poder de una jurisdicción local para regular las emisiones de GEI.xxii xvii Ver el Capítulo 8 para obtener más detalles. xviii Ver el Anexo B para obtener más detalles. xix Ver el Capítulo 8, sección 8.3 para leer sobre la visión general y las secciones 8.5-8.8 para ver los resultados específicos del sector. También se utilizan para ilustrar el desfase entre los objetivos de descarbonización profunda de los Capítulos 2 a 5 y los compromisos regionales de los PAC. xx Ver la sección 8.4. xxi Estas oportunidades se incluyeron en cada sección relevante para este Resumen Ejecutivo, pero se incluyen en la sección específica del sector en el Capítulo 8. Item 4.1 2022/04/26 City Council Post Agenda Page 69 of 667 BORRADOR: NO CITAR 28 Los compromisos actuales del CAP son insuficientes para alcanzar los objetivos de descarbonización. Los compromisos actuales de reducción de GEI del CAP para el transporte, la electricidad y los edificios contribuyen a una parte relativamente pequeña de las reducciones totales necesarias para alcanzar las emisiones netas de GEI en 2045 (Figura 12). Incluso si las medidas más agresivas del CAP se aplicaran a todas las jurisdicciones de la región, seguirían existiendo emisiones considerables, en su mayoría procedentes de los usos finales de los edificios con gas natural y del transporte por carretera (Figura 12). Figura 12. En este gráfico se muestran las emisiones de GEI previstas en la región de San Diego procedentes de la electricidad, el gas natural y el transporte por carretera en cada uno de los escenarios analizados. El escenario de referencia, en el que no hay compromisos del CAP, solo muestra las reducciones establecidas por las leyes, reglamentos, acciones y objetivo s estatales y federales. El escenario de los compromisos actuales del CAP muestra las emisiones de GEI restantes de un subconjunto de las emisiones totales si todos los CAP actuales se aplicaran en su totalidad tal y como están escritos. El escenario del mejor compromiso del CAP muestra las emisiones de GEI restantes si se aplica el mejor compromiso del CAP de cada categoría política a todas las jurisdicciones de la región, sin importar los compromisos actuales del CAP. En este gráfico se observa que ningún escenario analizado permitirá que la región alcance las cero emisiones netas en 2050. Cabe señalar que estos análisis suponen que no hay nuevas leyes, reglamentos, acciones ni objetivos estatales y federales, y que los actuales no cambian en ningún momento de este período. Además, estos análisis no incluyen todas las emisiones de GEI de la región. xxii Ver la sección 8.2 y el Anexo B para leer sobre un análisis más detallado de la autoridad. Item 4.1 2022/04/26 City Council Post Agenda Page 70 of 667 BORRADOR: NO CITAR 29 Existen oportunidades para que más jurisdicciones adopten medidas adicionales de CAP y refuercen las existentes. Según el análisis comparativo de los CAP, existe la oportunidad de que más jurisdicciones adopten medidas CAP que ya adoptan algunas jurisdicciones de la región. Del mismo modo, sobre la base del análisis del escenario de los impactos combinados de GEI de las medidas de CAP, hay una oportunidad para que la mayoría de las jurisdicciones fortalezcan sus medidas de CAP existentes, sobre todo en los sectores del transporte y construcción. Estos sectores producen grandes emisiones de GEI (Figura 13, a la derecha), pero en promedio representan reducciones de emisiones sumamente bajas en los CAP en 2035 (Figura 13, a la izquierda). Figura 13. Este gráfico muestra la contribución media de cada vía de descarbonización a la reducción total de GEI de las medidas locales de los CAP en 2035 (a la izquierda) y la distribución de las emisiones regionales de 2016 por fuente de emisión (a la derecha). Muestra que las emisiones del transporte (azul, a la derecho) representan casi la mitad de las emisiones regionales pero, en promedio, las reducciones correspondientes de los compromisos del CAP solo representan algo más de una cuarta parte de las reducciones locales de GEI en los CAP (azul, a la izquierda). Del mismo modo, la electricidad representa alrededor de una cuarta parte de las emisiones regionales (naranja oscuro, a la derecho), pero las reducciones asociadas contribuyen por término medio a algo menos de la mitad de las reducciones de GEI de los compromisos de los CAP. Cabe señalar que, dado que las emisiones asociadas a la construcción proceden tanto de la combustión de gas natural in situ como de la producción de electricidad, la parte de la barra correspondiente a la descarbonización de los edificios está sombreada para mostrar tanto el naranja claro como el naranja oscuro, a fin de que se corresponda tanto con los edificios de gas natural (en naranja claro) como con el suministro de electricidad (en naranja oscuro). Sería necesario un trabajo adicional para integrar la equidad social en la planificación climática. Según un examen preliminar, la integración de la equidad social en los CAP adoptados y pendientes es limitada, incoherente y carece de especificidad. Se necesitaría trabajo adicional para desarrollar la capacidad y las herramientas para comprender y abordar las implicaciones de la equidad de todas las políticas de descarbonización en la región de San Diego, incluida la recopilación y el análisis de datos; documentos de orientación regional; y grupos de trabajo regionales para coordinar, asesorar, seguir y supervisar cómo se está abordando la equidad en la planificación climática. Item 4.1 2022/04/26 City Council Post Agenda Page 71 of 667 BORRADOR: NO CITAR 30 La región de San Diego como modelo Aunque la región de San Diego solo representa el 0,08 % de las emisiones globales, los esfuerzos de descarbonización que se emprendieron en la región tienen un impacto medible en las emisiones globales, al generar un seguimiento entre otros y compartir inn ovaciones duraderas que pueden ampliarse y reproducirse. San Diego debería visibilizar sus esfuerzos y comunicar las lecciones aprendidas en los foros nacionales e internacionales. La creación del Marco Regional de Descarbonización de San Diego sirve como caso de estudio para que otras jurisdicciones de EE. UU. y del resto del mundo aprendan de él y lo adapten a sus propios esfuerzos de planificación de la descarbonización a largo plazo. Además de mostrar este esfuerzo en diversos foros nacionales e internacionales,xxiii la Red de Soluciones para el Desarrollo Sostenible de las Naciones Unidas (SDSN) está elaborando una Guía que servirá de herramienta para que otros municipios, universidades y comunidades sigan el proceso emprendido por el Condado de San Diego en sus propios procesos de descarbonización. La SDSN está trabajando para compartir el RDF en tres niveles horizontales a través de sus redes. La SDSN compartirá el RDF y sus principales conclusiones en reuniones y foros nacionales en los Estados Unidos, en grupos y consorcios internacionales y en las Naciones Unidas. Por ejemplo, el proyecto se presentó durante la Conferencia Innovate4Cities en octubre de 2021 y las aportaciones de este evento servirán para informar el Sexto Informe de Evaluación del IPCC de 2022 sobre el impacto, la adaptación y la vulnerabilidad al cambio climático global. Estos consorcios mundiales ofrecen la oportunidad de mostrar al mundo los resultados de este proyecto y a San Diego como modelo. Con el acceso a estas audiencias, el RDF es útil para informar sobre las hojas de ruta y los caminos globales hacia las cero emisiones netas. Se está preparando una Guía de Descarbonización Regional para que las jurisdicciones locales puedan crear sus propios marcos de descarbonización. Esta guía proporcionará información de fondo, así como pasos específicos y consejos sobre logística, metodología, participación de las partes interesadas, planificación a largo plazo, y demás. Aunque los recursos de esta guía son relevantes y aplicables a los equipos de proyectos de marcos de descarbonización fuera de Estados Unidos, los marcos que se están creando en el contexto de las economías emergentes probablemente utilizarán diferentes enfoques, perspectivas y estrategias en la planificación de la acción climática. Esta guía será gratuita y estará disponible en línea en el sitio web de la Iniciativa de Políticas de ODS de la Universidad de California en San Diego (http://sdgpolicyinitiative.org/guidebook/) para facilitar la creación de marcos regionales de descarbonización y proporcionar una hoja de ruta práctica para que las jurisdicciones trabajen hacia los objetivos de cero emisiones netas. xxiii En el Capítulo 9 y el anexo C se presentan listas extensas de consorcios estadounidenses y mundiales con los que el condado de San Diego y otras jurisdicciones con marcos de descarbonización pueden conectarse, asistir y unirse a las redes para difun dir sus resultados en diferentes escalas. Item 4.1 2022/04/26 City Council Post Agenda Page 72 of 667 Re gional Decarbonization Framework A collaborative effort to lower the region's carbon footprint Murtaza H. Baxamusa, PhD, AICP Land Use &Environment Group City Council,City of Chula Vista April 26,2022 2022/04/26 City Council Post Agenda Page 73 of 667 2 Regional Decarbonization Framework 2022/04/26 City Council Post Agenda Page 74 of 667 Three Guiding Principles 1 DATA-DRIVEN APPROACH 2 COMMUNITY OUTREACH 3 REGIONAL COLLABORATION 32022/04/26 City Council Post Agenda Page 75 of 667 Technical Report led by UC San Diego Workforce Development Study by Inclusive Economics Implementation Pathways The components of the Integrated Regional Decarbonization Framework Integrated Regional Decarbonization Framework 42022/04/26 City Council Post Agenda Page 76 of 667 Technical Pathways &Workforce Nov 2021 Policy & Program Development Mar 2022 Implementation Future Board Direction Timeline Workforce Development Study Implementation Pathways Contract with UC San Diego Team Define Scope: Energy Modeling Sector- Specific Data Modeling and Analysis RDF 1st Draft Released Draft Local Policy Opportunity Analysis RDF 2nd Draft Released PROGRAM DETAILSJuly 2021 Modeling Platfor m 52022/04/26 City Council Post Agenda Page 77 of 667 Public Outreach Plan Community Meetings 5 total: March 24 April 19 May 17 June 28 July 26 Sector Workshops 5 total: April 7 April 14 April 21 April 28 May 5 Speaker Series 4 depending on availability of guest speakers: June 2 June 16 July 7 July 21 Direct Engagement Meetings & Presentations One-on-one meetings/ presentations Ongoing through late summer Pop-Up Community Events Various opportunities to educate a general audience Ongoing through late summer Regional Convenings for Implementation Events with public officials and stakeholders on implementation pathways Ongoing through late summer 62022/04/26 City Council Post Agenda Page 78 of 667 New Engagement Tool Learn about the project, ask questions, comment directly on draft documents, and connect with the project team Documents available for comment through May 31, 2022 72022/04/26 City Council Post Agenda Page 79 of 667 RDF Technical Report 82022/04/26 City Council Post Agenda Page 80 of 667 Four Decarbonization Pathways TRANSPORTATION BUILDINGS ELECTRICITY LAND USE 92022/04/26 City Council Post Agenda Page 81 of 667 Key Takeaways — Decarbonization Pathways Geospatial analysis of energy 10 Transportation Buildings Natural climate solutions 2022/04/26 City Council Post Agenda Page 82 of 667 Policies Analysis of Local Climate Action Plans Assumes all Climate Action Plans (CAPs)are achieving the commitments Not intended to evaluate, score, or rank any particular CAP First study of its kind in the region 112022/04/26 City Council Post Agenda Page 83 of 667 Key Takeaways — Local Policies Analysis Numerous opportunities and examples exist for further local action. Opportunities also exist for regional collaboration. Local commitments are not sufficient to meet our GHG emission goals Local jurisdictions have legal authority to do more. 122022/04/26 City Council Post Agenda Page 84 of 667 Workforce Study Board directed a comprehensive "green jobs"plan Modelled after the State of California’s Jobs and Climate Action plan Putting San Diego County on the High Road: Climate Workforce Recommendations for 2030 and 2050 13 Putting California on the High Road: A Jobs and Climate Action Plan for 2030 Dr. Carol Zabin 2022/04/26 City Council Post Agenda Page 85 of 667 Green Jobs Analysis: Putting San Diego County on the High Road What is a “High Road”Job? Family-supporting wages and benefits High standards for health and safety Long-term career pathways Worker protections including the right to organize JOB QUALITY Access and entry-points to good jobs for local workers Training to support advancement JOB ACCESS 142022/04/26 City Council Post Agenda Page 86 of 667 EQUITY EQUITY Regional Colla bor ation BUILDINGSTRANSPORTATION LAND USEELECTRICITY 152022/04/26 City Council Post Agenda Page 87 of 667 Re gional Decarbonization Framework A collaborative effort to lower the region's carbon footprint Murtaza H. Baxamusa, PhD, AICP Land Use &Environment Group City Council,City of Chula Vista April 26,2022 2022/04/26 City Council Post Agenda Page 88 of 667 1 SPECIAL MEETING OF THE HOUSING AUTHORITY MEETING JOINTLY WITH THE CITY COUNCIL OF THE CITY OF CHULA VISTA Meeting Minutes August 24, 2021, 5:00 p.m. Council Chambers, 276 Fourth Avenue, Chula Vista, CA Present: Councilmember Cardenas, Councilmember Galvez, Deputy Mayor McCann, Councilmember Padilla, Mayor Casillas Salas Also Present: City Manager Kachadoorian, City Attorney Googins, City Clerk Bigelow, Assistant City Clerk Turner The City Council minutes are prepared and ordered to correspond to the City Council Agenda. Agenda items may be taken out of order during the meeting. The agenda items were considered in the order presented. _____________________________________________________________________ 1. CALL TO ORDER A regular meeting of the City Council and a special meeting of the Housing Authority of the City of Chula Vista was called to order at 5:05 p.m. in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. Mayor Casillas Salas announced, pursuant to AB 23, that she and each Councilmember would receive $50 for their attendance at that Housing Authority meeting, held simultaneously with the City Council meeting. 2. ROLL CALL City Clerk Bigelow called the roll. 3. PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE 2022/04/26 City Council Post Agenda Page 89 of 667 2 Councilmember Padilla led the Pledge of Allegiance. 4. SPECIAL ORDERS OF THE DAY 4.1 COVID-19 Update by the City of Chula Vista Emergency Services Manager Marlon King Emergency Services Manager King gave a presentation on the item and responded to questions of the Council. 4.2 Presentation of a Proclamation Commending Miss Kalea Pitel as Miss Chula Vista 2020 Mayor Casillas Salas read the proclamation and Councilmember Galvez presented it to Miss Pitel. 4.3 Presentation of a Proclamation Proclaiming Thursday, September 9, 2021 as San Diego Gives Day in the City of Chula Vista Mayor Casillas Salas read the proclamation and Councilmember Cardenas presented it to Candy Cuevas and Adrianna O'Donnell, representing San Diego Gives. 5. CONSENT CALENDAR (Items 5.1 through 5.12) Councilmember McCann stated he would abstain from voting on Item # 5.5 due to a potential property-related conflict of interest. City Attorney Googins announced that a revised resolution for Item # 5.8 had been distributed to the Council, and that action on the item would be with respect to the revised document. Moved by Mayor Casillas Salas Seconded by Councilmember Cardenas To approve the recommended action appearing below consent calendar Items 5.1 through 5.4 and 5.6 through 5.12. The headings below were read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) Moved by Mayor Casillas Salas Seconded by Councilmember Cardenas 2022/04/26 City Council Post Agenda Page 90 of 667 3 To approve the recommended action appearing below consent calendar Item 5.5. The heading below was read, text waived. The motion carried by the following vote: Yes (4): Councilmember Cardenas, Councilmember Galvez, Councilmember Padilla, and Mayor Casillas Salas Abstain (1): Councilmember McCann Result, Carried (4 to 0) 5.1 Waive Reading of Text of Resolutions and Ordinances Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. 5.2 Electronic Claim Filing: Amend Chula Vista Municipal Code Chapter 1.34 to Allow Claims to be Filed Electronically in Accordance with SB 1473 (Local Government Omnibus Act of 2020) Adopt an ordinance amending Chula Vista Municipal Code chapter 1.34 to allow claims to be filed electronically and updating the delegate for rejecting, approving, compromising or settling claims to the City Manager or her designee. ORDINANCE NO. 3511 OF THE CITY OF CHULA VISTA AMENDING VARIOUS SECTIONS OF CHULA VISA MUNICIPAL CODE CHAPTER 1.34, “CLAIMS REQUIREMENTS AND PROCEDURES,” TO ALLOW FOR ELECTRONIC CLAIMS FILINGS AND CHANGE THE DELEGATE FOR CLAIMS HANDLING FROM RISK MANAGER TO CITY MANAGER OR HER DESIGNEE (SECOND READING AND ADOPTION) 5.3 Contract Amendment: Increase the 2020 Redistricting Commission Consultants Contracts for Outreach and Demographer Due to the Extended Timeline-Related U.S. Census Delays Caused by COVID-19 Adopt a resolution increasing the contract amount for National Demographics Corporation from $72,250 to $86,000 and Southwest Strategies from $50,000 to $86,750. RESOLUTION NO. 2021-158 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AMENDMENTS TO THE CONSULTANT SERVICES AGREEMENTS FOR REDISTRICTING DEMOGRAPHIC CONSULTANT SERVICES BETWEEN THE CITY AND NATIONAL DEMOGRAPHICS CORPORATION AND FOR REDISTRICTING 2022/04/26 City Council Post Agenda Page 91 of 667 4 OUTREACH CONSULTANT SERVICES BETWEEN THE CITY AND SOUTHWEST STRATEGIES, LLC 5.4 Grant Acceptance & Appropriation: Accept Grants to be Used for Costs Associated with Parks & Recreation Facilities and Programs Adopt a resolution accepting grants from multiple sources in the amount of $13,000 to be used for costs associated with parks and recreation facilities and programs, and appropriating funds for that purpose. RESOLUTION NO. 2021-159 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING MULTIPLE GRANTS IN A TOTAL AMOUNT OF $13,000 FOR COSTS ASSOCIATED WITH PARKS & RECREATION FACILITIES AND PROGRAMS AND AMENDING THE FY2020/2021 COMMUNITY SERVICES DEPARTMENT BUDGET TO APPROPRIATE THESE FUNDS (4/5 VOTE REQUIRED) 5.5 Grant Acceptance: Accept Federal and State Funds for a Second Emergency Rental Assistance Program Award and Enter into a Contractor/Service Provider Agreement with SBCS Corporation for the Administration of the Program Adopt resolutions: A) Authorizing the acceptance of an the American Rescue Plan Act of 2021 allocation from the United States Department of Treasury for an Emergency Rental and Utility Assistance Program and appropriating funds for that purpose; B) Authorizing participation in the State Rental Assistance Program-2, authorizing the City Manager or designee to execute a standard agreement with the State of California Department of Housing and Community Development (HCD) for the implementation of a State rental assistance program pursuant to the American Rescue Plan Act of 2021 and Assembly Bill AB 832 and appropriating funds for that purpose; and C) Waiving the competitive bidding requirements pursuant to Chula Vista Municipal Code Section 2.56.070(b)(3) and authorizing the City Manager or designee to enter into an Agreement with SBCS Corporation to provide an Emergency Rental and Utility Assistance Program funded by State and Federal American Rescue Plan Act of 2021 allocations. A) RESOLUTION NO. 2021-160 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING AN ACCEPTANCE OF AN ALLOCATION FROM THE AMERICAN RESCUE PLAN ACT OF 2021 FROM THE UNITED STATES DEPARTMENT OF TREASURY FOR AN EMERGENCY RENTAL ASSISTANCE PROGRAM (ERA2) AND 2022/04/26 City Council Post Agenda Page 92 of 667 5 APPROPRIATING FUNDS FOR THAT PURPOSE (4/5 VOTE REQUIRED) B) RESOLUTION NO. 2021-161 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING PARTICIPATION IN THE STATE RENTAL ASSISTANCE PROGRAM-2, AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE A STANDARD AGREEMENT WITH THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (HCD) FOR THE IMPLEMENTATION OF A STATE RENTAL ASSISTANCE PROGRAM PURSUANT TO AMERICAN RESCUE PLAN ACT OF 2021 AND ASSEMBLY BILL 832, AND APPROPRIATING FUNDS FOR THAT PURPOSE (4/5 VOTE REQUIRED) C) RESOLUTION NO. 2021-162 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING COMPETITIVE BIDDING REQUIREMENTS PURSUANT TO CHULA VISTA MUNICIPAL CODE SECTION 2.56.070(B)(3) AND AUTHORIZING THE CITY MANAGER OR DESIGNEE TO ENTER INTO AN AGREEMENT WITH SBCS CORPORATION TO PROVIDE AN EMERGENCY RENTAL AND UTILITY ASSISTANCE PROGRAM FUNDED BY STATE AND FEDERAL AMERICAN RESCUE PLAN ACT OF 2021 ALLOCATIONS 5.6 Park Approval: Approve the Draft Park Master Plan for the Civic Park P-2 in Millenia and the Name “Montage Park” Adopt a resolution approving the draft Master Plan for the 1.62 -acre Civic Park P-2 in Millenia and the name “Montage Park.” RESOLUTION NO. 2021-163 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE PARK MASTER PLAN FOR THE 1.62 - ACRE P-2 PUBLIC NEIGHBORHOOD PARK, LOCATED IN MILLENIA, AND APPROVING THE PARK NAME, “MONTAGE PARK” 5.7 Grant Acceptance: Accept a Grant for the Homeless Housing Assistance and Prevention Program, Appropriation of Said Grant, and Extend the Declaration of Shelter Crisis Adopt resolution A) accepting $179,000 from the Regional Task Force on the Homeless for the Homeless Housing Assistance and Prevention Program Grant, and appropriating funds for that purpose , and B) extending the declaration of Shelter Crisis. 2022/04/26 City Council Post Agenda Page 93 of 667 6 A) RESOLUTION NO. 2021-164 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) AUTHORIZING THE ACCEPTANCE OF A $179,000 HOMELESS HOUSING ASSISTANCE PROGRAM (HHAP) GRANT FROM THE REGIONAL TASK FORCE ON THE HOMELESS; (2) APPROVING AGREEMENTS WITH THE REGIONAL TASK FORCE ON THE HOMELESS AND WITH NATIONAL CITY AND THE ALPHA PROJECT TO IMPLEMENT THE CHULA VISTA-NATIONAL CITY REGIONAL HOMELESS PROGRAM; AND (3) APPROPRIATING FUNDS THEREFOR (4/5 VOTE REQUIRED) B) RESOLUTION NO. 2021-165 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA EXTENDING THE DECLARATION OF A SHELTER CRISIS WITHIN THE MEANING OF GOVERNMENT CODE SECTION 8698 5.8 Chula Vista Bayfront: Approve the Bayfront Phase 1A Early Work Implementation and Right-of-Entry Agreement Between the City, the San Diego Unified Port District, the Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC Adopt a resolution approving the Chula Vista Bayfront Project Phase 1A Early Work Implementation and Right-of-Entry License Agreement by and among the San Diego Unified Port District, the City, the Chula Vista Bayfront Facilities Financing Authority, and RIDA Chula Vista, LLC. RESOLUTION NO. 2021-166 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE CHULA VISTA BAYFRONT PROJECT PHASE 1A EARLY WORK IMPLEMENTATION AND RIGHT-OF-ENTRY LICENSE AGREEMENT BETWEEN THE SAN DIEGO UNIFIED PORT DISTRICT, THE CITY, THE CHULA VISTA BAYFRONT FACILITIES FINANCING AUTHORITY, AND RIDA CHULA VISTA, LLC 5.9 Grant Acceptance and Appropriation: Accept Funds from the AARP 2021 Community Challenge Grant to Implement a “We Are Chula Vista” Cultural Arts Project, Featuring Older Adults on an Online Portal and Light Pole Banners Adopt a resolution accepting grant funds in the amount of $11,038 from the AARP Community Challenge grant to implement goals in the respect, inclusion and social participation section of the Age-Friendly Action Plan, and appropriating funds for that purpose (4/5 vote required). RESOLUTION NO. 2021-167 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACCEPTING GRANT FUNDS IN THE AMOUNT OF 2022/04/26 City Council Post Agenda Page 94 of 667 7 $11,038 FROM THE AARP COMMUNITY CHALLENGE GRANT TO IMPLEMENT GOALS IN THE RESPECT, INCLUSION AND SOCIAL PARTICIPATION SECTION OF THE AGE-FRIENDLY ACTION PLAN, AND AMENDING THE FISCAL YEAR 2021/22 DEVELOPMENT SERVICES BUDGET TO REFLECT THE APPROPRIATION OF THESE FUNDS (4/5 VOTE REQUIRED) 5.10 Investment Report: Quarter Ending June 30, 2021 Accept the investment report for the quarter ending on June 30, 2021. 5.11 Measure P: Approve a Transfer of $1.6 Million from CIP DNR0219 to CIP GGV0237 in the Fiscal Year 2021/22 Measure P Fund for the Citywide Telecommunications Project Adopt a resolution approving adjustments to the Fiscal Year 2021/22 Measure P Spending Plan and appropriating funds to Measure P Project GGV0237 Enterprise Phone System (4/5 vote required). RESOLUTION NO. 2021-168 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A TRANSFER OF $1.6 MILLION FROM CIP DRN0219 TO CIP GGV0237 IN THE MEASURE P FUND FOR THE CITYWIDE TELECOMMUNICATIONS PROJECT (4/5 VOTE REQUIRED) 5.12 Contract Award: Approve License Agreement with Veritone to Provide a Software Application to Capture Stop Data as Mandated by the Racial and Identity Profiling Act (RIPA) Adopt a resolution approving a license agreement with Veritone to collect data for the Racial and Identity Profiling Act (RIPA). RESOLUTION NO. 2021-169 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING LICENSE AGREEMENT WITH VERITONE TO PROVIDE SOFTWARE APPLICATION TO CAPTURE STOP DATA AS MANDATED BY THE RACIAL AND IDENTITY PROFILING ACT (RIPA) 6. PUBLIC COMMENTS Nathan and Stacy Meyers, Chula Vista residents submitted written communications and spoke in support of an amendment to Municipal Code section 6.04.060 to allow mini pigs in the City. Heidi Paris spoke in support of allowing mini pigs in the City and regarding family-established businesses on Third Avenue. 2022/04/26 City Council Post Agenda Page 95 of 667 8 At the request of Councilmember Galvez there was consensus of the Council to direct staff to return with a report regarding Municipal Code section 6.04.060 and allowing mini pigs in the City. 7. PUBLIC HEARINGS 7.1 Action Plan Amendment: U.S. Department of Housing and Urban Development (HUD) Grants Annual Action Plan Amendment, Reallocating HOME and CDBG Funds to Different Projects Notice of the hearing was given in accordance with legal requirements, and the hearing was held on the date and no earlier than the specified in the notice. Mayor Casillas Salas opened the public hearing. There being no members of the public who wished to speak, Mayor Casillas Salas closed the public hearing. Management Analyst Davis spoke regarding the item. Moved by Councilmember Galvez Seconded by Councilmember McCann To adopt Resolution No. 2021-170. The heading below was read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-170 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AMENDMENT TO THE 2020-2021 ANNUAL ACTION PLAN TO REALLOCATE AVAILABLE FUNDING FROM THE U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, AND APPROPRIATING FUNDS FOR THAT PURPOSE (4/5 VOTE REQUIRED) 8. ACTION ITEMS 8.1 Grant Acceptance: Accept Grant Funds from the U.S. Department of Health and Human Services, Authorize the City Manager to enter into 2022/04/26 City Council Post Agenda Page 96 of 667 9 Agreements and a MOU to Implement the "San Diego Advancing Minority Health Literacy Program", and Appropriate Grant Funds Acting Housing Manger Kurz and Blanca Melendrez representing UCSD Center for Community Health gave a presentation on the item. Moved by Councilmember McCann Seconded by Councilmember Cardenas To adopt Resolution No. 2021-171. The heading below was read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-171 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA: (A) AUTHORIZING THE ACCEPTANCE OF A $4,000,000 “ADVANCING HEALTH LITERACY (AHL) TO ENHANCE EQUITABLE COMMUNITY RESPONSES TO COVID-19” GRANT FROM THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; (B) AUTHORIZING THE CITY MANAGER TO NEGOTIATE AND ENTER INTO AGREEMENTS WITH UNIVERSITY OF CALIFORNIA AT SAN DIEGO AND SAN DIEGO STATE UNIVERSITY TO IMPLEMENT THE “SAN DIEGO ADVANCING MINORITY HEALTH LITERACY PROGRAM (SD-AMHLP)”; (C) AUTHORIZING THE CITY MANAGER TO ENTER INTO A MEMORANDUM OF UNDERSTANDING WITH PARTICIPATING JURISDICTIONS AND PARTNERS; AND (D) APPROPRIATING FUNDS FOR THESE PURPOSES (4/5 VOTE REQUIRED) 8.2 Affordable Housing Financial Assistance: Consideration of Conditional Approval of a Residual Receipt Loan for the Development of a 200-unit Affordable Housing Development, Columba Apartments, in Otay Ranch Millenia City Attorney Googins announced that a revised resolution for the item had been distributed to the Council, and that action on the item would be with respect to the revised document. Management Analyst Dorado gave a presentation on the item. Moved by Mayor Casillas Salas Seconded by Councilmember McCann 2022/04/26 City Council Post Agenda Page 97 of 667 10 To adopt Resolution No. 2021-004 of the Housing Authority. The heading below was read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-004 OF THE HOUSING AUTHORITY AS THE SUCCESSOR HOUSING ENTITY TO THE CITY OF CHULA VISTA AND THE CITY COUNCIL OF THE CITY OF CHULA VISTA CONDITIONALLY APPROVING FINANCIAL ASSISTANCE From THE HOME INVESTMENT PARTNERSHIP ACT (HOME) PROGRAM IN AN AMOUNT NOT -TO- EXCEED $2,000,000 AND UP TO $1,000,000 FROM THE CITY'S LOW AND MODERATE INCOME HOUSING ASSET FUND TO CHELSEA INVESTMENT CORPORATION OR AN AFFILIATED DEVELOPER (MILLENIA II CIC, LP) FOR A NEW 200-UNIT AFFORDABLE HOUSING DEVELOPMENT KNOWN AS COLUMBA APARTMENTS TO BE LOCATED IN THE OTAY RANCH MILLENIA MASTER PLAN COMMUNITY 8.3 American Rescue Plan Approval: Accept Grant Funds, Add Positions to the General Fund and Appropriate Funds for that Purpose Deputy City Manager Crockett gave a presentation on the item and responded to questions of the Council. Council discussion ensued. Moved by Mayor Casillas Salas Seconded by Councilmember McCann To adopt Resolution No. 2021-172 and 2021-173. The heading below was read, text waived. The motion carried by the following vote Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) A) RESOLUTION NO. 2021-172 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE ACCEPTANCE OF CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS ESTABLISHED BY THE AMERICAN RESCUE PLAN ACT OF 2021 2022/04/26 City Council Post Agenda Page 98 of 667 11 ALLOCATION OF $28,767,625 FROM THE UNITED STATES DEPARTMENT OF TREASURY AND APPROPRIATING FUNDS IN FISCAL YEAR 2021/22 (4/5 VOTE REQUIRED) B) RESOLUTION NO. 2021-173 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE AUTHORIZED POSITION COUNTS IN VARIOUS DEPARTMENTS WITH A NET INCREASE IN AUTHORIZED STAFFING 9. CITY MANAGER’S REPORTS City Manager Kachadoorian announced recent awards received by the City. 10. MAYOR’S REPORTS 10.1 Ratification of Appointment of Rafael J. Torres to the Wildlife Advisory Group, Southeast Representative Mayor Casillas Salas made an announcement regarding the COIVD-19 vaccination clinics at City Hall. She reported on her attendance at the following recent events: meeting with Congresswoman Sara Jacobs; Chamber Mixer at Ivey Park Senior Facility; reception for Father Joaquin Martinez, the new president of Mater De High School; Rotary Club meeting; the Lemon Festival; reception for Dr. Mark Sanchez, new Southwestern College President; Pride Flag raising; meeting with new Tijuana Mayor, Montserrat Caballero and Mexican Counsel General Carlos Gutierrez; South Bay Pride; and the inaugural ride of the first segment of the mid-coast trolley. Moved by Councilmember Cardenas Seconded by Councilmember Padilla To ratify the above appointment. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) Mayor Casillas Salas made an announcement regarding the COIVD-19 vaccination clinics at City Hall. She reported on her attendance at the following recent events: meeting with Congresswoman Sara Jacobs; Chamber Mixer at Ivey Park Senior Facility; reception for Father Joaquin Martinez, the new president of Mater De High School; Rotary Club meeting; the Lemon Festival; reception for Dr. Mark Sanchez, new 2022/04/26 City Council Post Agenda Page 99 of 667 12 Southwestern College President; Pride Flag raising; meeting with new Tijuana Mayor, Montserrat Caballero and Mexican Counsel General Carlos Gutierrez; South Bay Pride; and the inaugural ride of the first segment of the mid-coast trolley. 11. COUNCILMEMBERS’ COMMENTS Councilmember Galvez thanked the Council for the referral to staff to consider mini pigs as pets. She reported on her attendance at the following recent events: a visit to Urban Wood; Public Servants Appreciation day at Funeraria del Angel; Chamber Mixer at Ivy Park senior facility; Arts in the Park; Lemon Festival; Broadway walk with Chamber President Todd Galarneau, Chamber Acting General Manager Marcy Weaver and Republic Services, Account Manager Giovanna Castro; Pride Flag raising; Boards and Commissions Night; Southwestern College Performing Arts opening and welcoming of the new President Dr. Mark Sanchez; Filipino American Retirees of Southern California annual picnic; Eastlake Chula Vista Rotary event on Chula Vista's tall ship Bill of Rights; and the inaugural ride of the first segment of the mid -coast trolley. Councilmember Cardenas reported on her attendance at South Bay Pride. At the request of Councilmember Padilla there was consensus of the Council to support consideration a resolution to support the Protecting the Right to Organize Act (PRO). Councilmember McCann thanked business owners on Third Avenue for their participation in the Lemon Festival and reported on his attendance at the following recent events: Arts in the Park; Public Servants Appreciation day at Funeraria del Angel; Chamber Mixer at Ivy Park senior facility; and Boards and Commissions Night. Councilmember McCann spoke regarding the 20th Anniversary of 9/11 and expressed gratitude and appreciation to our po lice and firefighters. 12. CITY ATTORNEY'S REPORTS There were none. 13. CLOSED SESSION Pursuant to Resolution No. 13706 and Council Policy No. 346 -03, Official Minutes and records of action taken during Closed Sessions are maintained by the City Attorney. City Attorney Googins announced that the Council would convene in closed session to discuss the items listed below. 2022/04/26 City Council Post Agenda Page 100 of 667 13 Mayor Casillas Salas recessed the meeting at 6:49 p.m. The Council convened in Closed Session at 7:00 p.m., with all members present. 13.1 Conference with Legal Counsel Regarding Existing Litigation Pursuant to Government Code Section 54956.9(d)(1) A) Evelia DiCiero v. City of Chula Vista, San Diego Superior Court, Case No. 37-2019-00058975--CU-PO-CT; and ACTION: Pending Finalization of Settlement B) In Re National Prescription Opiate Litigation; United States District Court, Southern District of Ohio; Case No. 17-md-2804 ACTION: No Reportable Action 14. ADJOURNMENT The meeting was adjourned at 7:10 p.m. Minutes prepared by: Tyshar Turner, Assistant City Clerk _________________________ Kerry K. Bigelow, MMC, City Clerk 2022/04/26 City Council Post Agenda Page 101 of 667 1 REGULAR MEETING OF THE CITY COUNCIL Meeting Minutes September 14, 2021, 5:00 p.m. Council Chambers, 276 Fourth Avenue, Chula Vista, CA Present: Councilmember Cardenas, Councilmember Galvez, Deputy Mayor McCann, Councilmember Padilla, Mayor Casillas Salas Also Present: City Manager Kachadoorian, City Attorney Googins, City Clerk Bigelow, Assistant City Clerk Turner Councilmember Padilla participated in this meeting via teleconference. All votes were taken by roll call. The City Council minutes are prepared and ordered to correspond to the City Council Agenda. Agenda items may be taken out of order during the meeting. The agenda items at this meeting were considered in the order presented. _____________________________________________________________________ 1. CALL TO ORDER A regular meeting of the City Council of the City of Chula Vista was called to order at 5:06 p.m. via teleconference and in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. 2. ROLL CALL City Clerk Bigelow called the roll. 3. PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE A video tribute honoring 9/11 victims and first responders was played. 2022/04/26 City Council Post Agenda Page 102 of 667 2 Mayor Casillas Salas led the Pledge of Allegiance and called for a moment of silence in remembrance of the victims of 9/11. Police Chief Kennedy spoke regarding the video tribute created by the Chula Vista Police Foundation. 4. SPECIAL ORDERS OF THE DAY 4.1 Presentation of a Proclamation to Interim President Ricardo Campos Proclaiming Sunday, September 19, 2021 as San Diego Loyal Day in the City of Chula Vista Mayor Casillas Salas read the proclamation and Councilmember Cardenas presented it to Mr. Campos. 4.2 Presentation of a Proclamation to Lorena Montes Proclaiming September 2021 as Ovarian Cancer Awareness Month. Mayor Casillas Salas read the proclamation and Councilmember Galvez presented it to Lorena Montes. 5. CONSENT CALENDAR (Items 5.1 through 5.6) Mayor Casillas Salas announced that Item 5.5 would be removed fro m the Consent Calendar at the request of Councilmember Galvez. Moved by Mayor Casillas Salas Seconded by Councilmember Galvez To approve the recommended action appearing below consent calendar Items 5.1 through 5.4 and 5.6. The headings below were read, te xt waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) 5.1 Waive Reading of Text of Resolutions and Ordinances Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. 5.2 Consideration of Requests for Excused Absences Consider requests for excused absences as appropriate. 2022/04/26 City Council Post Agenda Page 103 of 667 3 5.3 Agreement Award: Approve Agreement to Provide a Compost Program and Educational Services Adopt a resolution approving an agreement with the Living Coast Discovery Center to provide compost program site maintenance and educational services. RESOLUTION NO. 2021-174 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE COMPETITIVE BID REQUIREMENT; APPROVING THE AGREEMENT WITH THE LIVING COAST DISCOVERY CENTER TO PROVIDE COMPOST PROGRAM SITE MAINTENANCE AND COMPOST PROGRAM EDUCATIONAL SERVICES FOR THE CITY OF CHULA VISTA 5.4 Grant Agreement and Appropriation: Approve Agreement with Urban Corps of San Diego County for Grants and appropriate $111,480 for Brush Clearance in the City’s Wildland-Urban Interface Adopt a resolution approving an agreement with Urban Corps of San Diego County for grants obtained by the Urban Corps from the California Fire Safe Council for $83,055 and from the California State Coastal Conservancy for $315,809 for brush clearance in the City’s wildland -urban interface, and appropriating funds for that purpose RESOLUTION NO. 2021-175 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN AGREEMENT WITH THE URBAN CORPS OF SAN DIEGO COUNTY FOR FIRE PROTECTION SERVICES TO BE FUNDED IN PART WITH AN $83,055 CALIFORNIA FIRE SAFE COUNCIL BRUSH MANAGEMENT GRANT AND A $315,809 CALIFORNIA STATE COASTAL CONSERVANCY FIRE REDUCTION TO HABITABLE STRUCTURES GRANT; AND APPROPRIATING FUNDS FOR CITY’S CONTRIBUTION THEREFOR (4/5 VOTE REQUIRED) 5.6 Ratification of Appointment: City Manager’s Appointment of the Director of Finance – Sarah Schoen Adopt a resolution ratifying the City Manager’s appointment of Sarah Schoen as the Director of Finance. RESOLUTION NO. 2021-176 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA RATIFYING THE CITY MANAGER’S APPOINTMENT OF THE DIRECTOR OF FINANCE – SARAH SCHOEN ITEM REMOVED FROM CONSENT CALENDAR 2022/04/26 City Council Post Agenda Page 104 of 667 4 5.5 Animal Regulations: Amending Title 6 of the Chula Vista Municipal Code to Allow the Keeping of One Miniature Pig Per Dwelling Unit Councilmember Galvez spoke regarding the item. Stacey Myers submitted written communication in support of staff's recommendation but did not wish to speak. Moved by Councilmember Galvez Seconded by Councilmember Cardenas Place an ordinance on first reading amending Title 6, Animals, of the Chula Vista Municipal Code to restore subsection 6.04.060.C, allowing the keeping of one miniature pig per dwelling unit. Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) ORDINANCE OF THE CITY OF CHULA VISTA AMENDING TITLE 6 OF THE CHULA VISTA MUNICIPAL CODE TO ALLOW THE KEEPING OF ONE MINIATURE PIG PER DWELLING UNIT (FIRST READING) 6. PUBLIC COMMENTS 6.1 Public Comments Received for 9/14/2021 John Moore, City of San Diego resident, spoke regarding COVID -19 vaccine. Justin Akers, Chula Vista resident, submitted written communications in support of adding speed bumps to G street. 7. ACTION ITEMS 7.1 Waste Collection Rate Adjustment: Approving a Rate Adjustment for Waste Collection in Order to Cover the Costs of Compliance with Organic Waste Reduction Regulations (SB 1383) Environmental Services Manager Medrano and Matt Kross representing Republic Services, gave presentations on the item and responde d to questions of the Council. The following members of the public submitted written documentation in support of staff's recommendation: 2022/04/26 City Council Post Agenda Page 105 of 667 5  James O'Callaghan, representing the South County Economic Development Council  Margaret Leonard, Chula Vista resident John Richeson submitted comments in opposition to staff's recommendation. The following members of the public submitted written communication expressing a neutral position on staff's recommendation:  Christine Antoine  Edward Legaspi Moved by Mayor Casillas Salas Seconded by Councilmember McCann To adopt Resolution No. 2021-177. The heading below was read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-177 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN INCREASE IN MAXIMUM WASTE COLLECTION RATES IN ORDER TO COVER THE COSTS OF COMPLIANCE WITH STATE REGULATION SB1383 7.2 Employee Compensation and Bargaining Agreement: Approve a Memorandum of Understanding with Association of Chula Vista Employees (“ACE”); an Amended Compensation Summary for Unrepresented Employees; and a Revised Compensation Schedule for Certain Groups Human Resources Director Chase spoke regarding the item. Moved by Mayor Casillas Salas Seconded by Councilmember Galvez To adopt Resolution Nos. 2021-178 through 2021-180. The headings below were read, text waived. The motion carried by the following vote: 2022/04/26 City Council Post Agenda Page 106 of 667 6 Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-178 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A MEMORANDUM OF UNDERSTANDING (“MOU’) BETWEEN THE CITY OF CHULA VISTA AND THE ASSOCIATION OF CHULA VISTA EMPLOYEES (“ACE”) RELATED TO COMPENSATION AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT; AND AUTHORIZING THE CITY MANAGER, AS SET FORTH HEREIN, TO EXECUTE THE AFOREMENTIONED MOU AND ANY ADDITONAL DOCUMENTS WHICH MAY BE NECESSARY OR REQUIRED TO IMPLEMENT SAID MOU RESOLUTION NO. 2021-179 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE AMENDED COMPENSATION SUMMARY FOR UNREPRESENTED EMPLOYEES INCLUDING AUTHORIZATION FOR THE MAYOR TO EXECUTE ANY NECESSARY CONTRACT AMENDMENTS TO IMPLEMENT SAID AMENDED COMPENSATION SUMMARY RESOLUTION NO. 2021-180 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE REVISED FISCAL YEAR 2021-2022 COMPENSATION SCHEDULE EFFECTIVE SEPTEMBER 10, 2021, AS REQUIRED BY CALIFORNIA CODE OF REGULATIONS, TITLE 2, SECTION 570.5 8. CITY MANAGER’S REPORTS There were none. 9. MAYOR’S REPORTS 9.1 Ratification of Appointment of James Clark to the International Friendship Commission Moved by Councilmember Cardenas Seconded by Councilmember McCann To ratify the appointment of James Clark to the International Friendship Commission. The motion carried by the following vote: 2022/04/26 City Council Post Agenda Page 107 of 667 7 Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) Mayor Casillas Salas spoke regarding the following events: San Diego County Hispanic Chamber of Commerce mixer at Las Tres Catrinas; La Raza Lawyers Association judicial reception; Chicano Federation and San Diego Loyal Soccer Camp, Summer on Third Avenue event, Pints for Paws fundraiser for the Animal Care Facility, opening of a little free library in Lauderbach Park sponsored by Supervisor Nora Vargas, and a preview of the trolley's mid-coast extension. She congratulated Marisa Bejarano on becoming a Superior Court judge and Saint Rose on its 100 -year anniversary. At the request of Mayor Casillas Salas, there was consensus of a majority of the Council to make a referral to staff to present a draft ordinance for Council consideration regarding the impacts of the expiration of AB832 and the Ellis Act, related to evictions. Councilmember McCann stated he would abstain from registering a position on the consensus due to a potential property-related conflict of interest. Mayor Casillas Salas spoke regarding outgoing Policy Aide Albert Velasquez. 10. COUNCILMEMBERS’ COMMENTS Councilmember Padilla stated that his office would issue a statement regarding the science behind vaccinations and spoke of the importance of the public hearing accurate information regarding public health. He encouraged those with questions to visit the Food and Drug Administration website. Councilmember Galvez echoed Councilmember Padilla's comments regarding the importance of accurate public health information and stated additional information was available on the Center for Disease Control website. She spoke regarding her attendance at the following recent events: Short -term vacation rental outreach event: Chicano Federation and San Diego Loyal Soccer camp; free library ribbon-cutting event at Lauderbach Park; visit to Brain Balance, an innovative achievement center; Chula Vista Police Department Evening with Heroes event; demolition of the Loma Verde recreation center; and the International Park(ing) Day event on Third Avenue. She encouraged people to vote in the September 14 election. 2022/04/26 City Council Post Agenda Page 108 of 667 8 Deputy Mayor McCann spoke regarding September 11 and about the following recent events: revival of the Eastlake Farmer's Market; Kiwanis Bowl; a nd the September 11 Chula Vista Police Department Foundation dinner. Councilmember Cardenas spoke regarding Suicide Awareness Day. She thanked Work for Hope for its work at Los Ninos park and congratulated Supervisor Nora Vargas on being the first Latina to chair a Board of Supervisors meeting and her declaration of San Diego County's reproductive freedom. She spoke regarding the opening of the free little library at Lauderbach Park and the upcoming Loyal soccer game. 10.1 Councilmember Padilla: Consideration of a Resolution in Support of House of Representatives Bill 842, the Protecting the Right to Organize Act of 2021 Councilmember Padilla spoke regarding the item. Moved by Councilmember Padilla Seconded by Mayor Casillas Salas To adopt Resolution No. 2021-181. The heading below was read, text waived. The motion carried by the following vote: Yes (4): Councilmember Cardenas, Councilmember Galvez, Councilmember Padilla, and Mayor Casillas Salas No (1): Councilmember McCann Result, Carried (4 to 1) RESOLUTION NO. 2021-181 OF THE COUNCIL OF THE CITY OF CHULA VISTA IN SUPPORT OF HOUSE BILL 842, THE PROTECTING THE RIGHT TO ORGANIZE ACT OF 2021 11. CITY ATTORNEY'S REPORTS There were none. 12. CLOSED SESSION Pursuant to Resolution No. 13706 and Council Po licy No. 346-03, Official Minutes and records of action taken during Closed Sessions are maintained by the City Attorney. Deputy City Attorney Silva announced that the Council would convene in closed session to discuss the items listed below. 2022/04/26 City Council Post Agenda Page 109 of 667 9 Mayor Casillas Salas recessed the meeting at 7:07 p.m. The Council convened in Closed Session at 7:15 p.m., with all members present. 12.1 Conference with Legal Counsel Regarding Existing Litigation Pursuant to Government Code Section 54956.9(d)(1) A) Name of case: Arturo Castanares v. City of Chula Vista, San Diego Superior Court, Case No. 37-2021-00017713-CU-MC-CTL. Action: No Reportable Action B) Name of Case: In Re National Prescription Opiate Litigation; United States District Court, Southern District of Ohio; Case No. 17-md-2804 Action: No reportable action 13. ADJOURNMENT The meeting was adjourned at 7:45 p.m. Minutes prepared by: Tyshar Turner, Assistant City Clerk _________________________ Kerry K. Bigelow, MMC, City Clerk 2022/04/26 City Council Post Agenda Page 110 of 667 1 REGULAR MEETING OF THE CITY COUNCIL Meeting Minutes September 28, 2021, 5:00 p.m. Council Chambers, 276 Fourth Avenue, Chula Vista, CA Present: Councilmember Cardenas, Councilmember Galvez, Deputy Mayor McCann, Councilmember Padilla, Mayor Casillas Salas Also Present: City Manager Kachadoorian, City Attorney Googins, City Clerk Bigelow, Assistant City Clerk Turner, Simon Silva Councilmember Padilla participated in this meeting via teleconference. All votes were taken by roll call. The City Council minutes are prepared and ordered to correspond to the City Council Agenda. Agenda items may be taken out of order during the meeting. The agenda items at this meeting were considered in the order presented except for Item 8.2, which was heard after Item 4.6, and Item 5.7 which was heard after Public Comment. _____________________________________________________________________ 1. CALL TO ORDER A regular meeting of the City Council of the City of Chula Vista was called to order at 5:02 p.m. via teleconference and in the Council Chambers, located in City Hall, 276 Fourth Avenue, Chula Vista, California. 2. ROLL CALL City Clerk Bigelow called the roll. 3. PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE 2022/04/26 City Council Post Agenda Page 111 of 667 2 Deputy Mayor McCann led the Pledge of Allegiance. 4. SPECIAL ORDERS OF THE DAY 4.1 Oath of Office - James Clark, International Friendship Commission City Clerk Bigelow administered the oath of office to Commissioner Clark and Councilmember Cardenas presented him with a certificate of appointment 4.2 COVID-19 Update by the City of Chula Vista Emergency Services Manager Marlon King Emergency Services Manager King gave a presentation on the item and responded to questions of the Council. 4.3 Presentation by the Marine Corps League in Recognition of the Chula Vista Fire Department and Chula Vista Veteran, Roger Cazares, for Years of Assistance on the Toys for Tots Campaign A representative from the Marine Corps League spoke regarding the Toys for Tots Campaign and recognized the Fire Department and Mr. Cazares for their assistance with the program. 4.4 Recognition of the 2021 International Mixed Martial Arts Federation's Youth Mixed Martial Arts Champions from Chula Vista's One Legacy Training Center: Abigail Alvarez, David Daniels, Gavin Mitchell, Elijah Nehme, and Omar Rodriguez Mayor Casillas Salas recognized the mixed martial arts champions; Councilmember Cardenas, Councilmember Galvez, and Deputy Mayor McCann presented them with City of Champions medals. 4.5 Presentation of a Proclamation proclaiming Wednesday, October 6, 2021 as Clean Air Day in the City of Chula Vista Mayor Casillas Salas read the proclamation and virtually presented it to Environmental Sustainability Manager Wisniewski. 4.6 Presentation by County of San Diego Staff Regarding Potential Board of Supervisor Action to Authorize Microenterprise Home Kitchen Operations (MEHKOs) in San Diego County Heather Buonomo and Brian Johnson, representing the County of San Diego, gave a presentation on the item and responded to questions of the Council. 2022/04/26 City Council Post Agenda Page 112 of 667 3 Mayor Casillas Salas recessed the meeting at 6:31 p.m. The Council reconvened at 6:37 p.m., with all members present. 5. CONSENT CALENDAR (Items 5.1 through 5.7) Mayor Casillas Salas stated she would abstain from voting on Item 5.6 due to a potential property-related conflict of interest; Item 5.7 was removed from the Consent Calendar at the request of members of the public. Moved by Councilmember Galvez Seconded by Mayor Casillas Salas To approve the recommended action appearing below Consent Calendar Items 5.1 through 5.4. The headings below were read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) Moved by Councilmember Galvez Seconded by Mayor Casillas Salas To approve the recommended action appearing below Consent Calendar Item 5.5. The heading below was read, text waived. The motion carried by the following vote: Yes (4): Councilmember Cardenas, Councilmember Galvez, Councilmember Padilla, and Mayor Casillas Salas No (1): Councilmember McCann Result, Carried (4 to 1) Moved by Councilmember Galvez Seconded by Mayor Casillas Salas To approve the recommended action appearin g below Consent Calendar Item 5.6. The heading below was read, text waived. The motion carried by the following vote: 2022/04/26 City Council Post Agenda Page 113 of 667 4 Yes (4): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, and Councilmember Padilla Abstain (1): Mayor Casillas Salas Result, Carried (4 to 0) 5.1 Waive Reading of Text of Resolutions and Ordinances Approve a motion to read only the title and waive the reading of the text of all resolutions and ordinances at this meeting. 5.2 Consideration of Requests for Excused Absences Consider requests for excused absences as appropriate. 5.3 Animal Regulations: Amending Title 6 of the Chula Vista Municipal Code to Allow the Keeping of One Miniature Pig Per Dwelling Unit Adopt an ordinance amending Title 6, Animals, of the Chul a Vista Municipal Code to restore subsection 6.04.060.C, allowing the keeping of one miniature pig per dwelling unit. ORDINANCE NO. 3512 OF THE CITY OF CHULA VISTA AMENDING TITLE 6 OF THE CHULA VISTA MUNICIPAL CODE TO ALLOW THE KEEPING OF ONE MINIATURE PIG PER DWELLING UNIT (SECOND READING AND ADOPTION) 5.4 Acquisition/Financing Agreement: Consider Adoption of Agreement Relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) Nicole Remiker submitted written communication in support of the item. Adopt a resolution approving an Acquisition/Financing Agreement relating to California Municipal Finance Authority Community Facilities District No. 2021-11 (Otay Ranch Village 8 West) and authorize related actions. RESOLUTION NO. 2021-183 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING AN ACQUISITION/FINANCING AGREEMENT RELATING TO CALIFORNIA MUNICIPAL FINANCE AUTHORITY COMMUNITY FACILITIES DISTRICT NO. 2021-11 (CITY OF CHULA VISTA – OTAY RANCH VILLAGE 8 WEST) AND AUTHORIZING RELATED ACTIONS 2022/04/26 City Council Post Agenda Page 114 of 667 5 5.5 Consideration of Appointment of Members to the Christopher Columbus Statue Task Force Adopt a resolution approving the appointment of members Brianna Conser, Angela Elliot, John Elliot, Nicole Enriquez, Roberto Hernandez, Lee Kohse, Paola Martinez-Montes, Lorise Maynard, Ricardo Medina, Erica Pinto, Grace Sardina, and Bea Zamora to the Columbus Statue Task Force. RESOLUTION NO. 2021-184 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE APPOINTMENT OF MEMBERS TO THE COLUMBUS STATUE TASK FORCE 5.6 Reimbursement Grant Program: Authorize the City’s Payment of Sewer Capacity Fees on Behalf of Businesses that have Received Approval for Reimbursement under the City’s Sidewalk Café Grant Program Adopt a resolution authorizing the City’s payment of sewer capacity fees on behalf of businesses that have received approval under the City’s reimbursement grant program for the reimbursement of design, permitting, and construction costs for sidewalk cafés. RESOLUTION NO. 2021-185 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING CITY’S PAYMENT OF SEWER CAPACITY FEES ON BEHALF OF BUSINESSES THAT HAVE RECEIVED APPROVAL UNDER THE CITY’S REIMBURSEMENT GRANT PROGRAM FOR SIDEWALK CAFÉS ITEM REMOVED FROM CONSENT CALENDAR 5.7 Master Fee Schedule Amendment: Amending Chapter 4, General Business Fees, of the City’s Master Fee Schedule to Modify Cannabis-Related Fees The following members of the public spoke in support of staff's recommendation on the item:  Carol Green, Chula Vista resident  Becky Rapp Moved by Mayor Casillas Salas Seconded by Councilmember Cardenas 2022/04/26 City Council Post Agenda Page 115 of 667 6 To adopt Resolution No. 2021-186. The heading below was read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) RESOLUTION NO. 2021-186 OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING CHAPTER 4 (GENERAL BUSINESS FEES) OF THE CITY’S MASTER FEE SCHEDULE TO ESTABLISH CANNABIS- RELATED FEE 6. PUBLIC COMMENTS 6.1 Public Comments Received for 9/28/2021 Howard Freelove spoke in opposition to mask and COVID vaccine mandates. Angelica Orozco expressed concern regarding the COVID vaccine. John Serrano, Chula Vista resident, expressed concern regarding the condition of his street. Christina Resendez, Chula Vista resident, expressed concern regarding vehicle safety in the area of Quintard Street. Luis Castro, Chula Vista resident, expressed concern regarding the end of the eviction moratorium. Cesar H, Chula Vista resident, expressed concern regarding pedestrian safety in the area of City Hall. Dale Mandible, Chula Vista resident, expressed concern regarding pedestrian safety in the area of City Hall. Millicent Scott, Chula Vista resident, expressed concern regarding sewage odors and in support of a bus stop in her neighborhood. Theresa Acerro, Chula Vista resident, submitted written documentation regarding ambulance transport in the City. 7. PUBLIC HEARINGS 7.1 Year-End Accomplishments Report: Federal Housing and Urban Development Block Grant Programs 2022/04/26 City Council Post Agenda Page 116 of 667 7 Notice of the hearing was given in accordance with legal requirements, and the hearing was held on the date and no earlier than the specified in the notice. Senior Management Analyst Davis gave a presentation on the item and responded to questions of the Council. Mayor Casillas Salas opened the public hearing. There being no members of the public who wished to speak, Mayor Casillas Salas closed the public hearing. Council discussion ensued. 8. ACTION ITEMS 8.1 Middle-Income Housing Programs: Report and Discussion of Middle - Income Housing Programs Proposed by the California Statewide Communities Development Authority and the California Municipal Finance Authority Acting Housing Manager Kurz and Senior Management Analyst Dorado gave a presentation on the item. Mayor Casillas Salas spoke regarding staff developing a policy that protected the City. Deputy Mayor McCann spoke in support of pursuing a JPA and d irected staff to consider the associated fees and to seek a qualified partner. Councilmember Padilla spoke regarding the importance of developing standards and thresholds and encouraged staff to continue their due diligence in developing the framework. Councilmember Cardenas spoke regarding adding tenant protections to the policy and suggested handling it on a case -by-case basis. Councilmember Galvez suggested developing a framework that would allow residents the opportunity to purchase the property at the 15-year mark for the original valuation. Development Services Director Allen confirmed with the Council that the policy should include how windfall dollars would be spent and related restrictions. The following members of the public spoke in support of middle-income housing programs: 2022/04/26 City Council Post Agenda Page 117 of 667 8  John Penkower  Lauren Seaver  John Stoeker 8.2 Microenterprise Home Kitchen Operations: Consider Opposing County of San Diego Authorization of Microenterprise Home Kitchen Operations within San Diego County Heather Buonomo and Brian Johnson, representing the County of San Diego, gave a presentation on the item under Item 4.6 and responded to questions of the Council. Council discussion ensued. Moved by Councilmember Galvez Seconded by Councilmember McCann To table the item for future discussion not later than the end of October. Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) 8.3 Interim Urgency Ordinance: Prohibition of Uses in Conflict with Land Use Amendment and Rezoning Initiation IR19-0026 Kyle Strong, representing Collins Aerospace, gave a presentation on the item and stated that Collins Aerospace was prepared to work with the City on a mutually agreeable specific plan that includes a variety of uses. Council discussion ensued Mayor Casillas Salas recessed the meeting at 8:43 p.m. The meeting reconvened at 8:53 p.m. with all members present. Emil Wohl, representing Wohl Property Group, spoke regarding collaboratively working with the City to determine appropriate uses for the property. Council discussion ensued City Attorney Googins spoke regarding the nature of the proposed urgency ordinance. 2022/04/26 City Council Post Agenda Page 118 of 667 9 Richard Schulman, attorney to the applicant, provided a response to City Attorney Googins. Moved by Councilmember Padilla Seconded by Mayor Casillas Salas To adopt Urgency Ordinance No. 3513, heading read, text waived. The motion carried by the following vote: Yes (5): Councilmember Cardenas, Councilmember Galvez, Councilmember McCann, Councilmember Padilla, and Mayor Casillas Salas Result, Carried (5 to 0) ORDINANCE NO. 3513 OF THE CITY OF CHULA VISTA ESTABLISHING AN INTERIM URGENCY ORDINANCE PROHIBITING USES IN CONFLICT WITH LAND USE AMENDMENT AND REZONING INITIATION IR19-0026 ON THE COLLINS AEROSPACE/UNITED TECHNOLOGY COMPANY CAMPUS THEREBY ENACTING A MORATORIUM NECESSARY TO PROTECT THE PUBLIC SAFETY, HEALTH AND WELFARE (4/5 VOTE REQUIRED) 9. CITY MANAGER’S REPORTS There were none. 10. MAYOR’S REPORTS Mayor Casillas Salas announced that the Fire Department offers free vaccinations every Thursday at City Hall. She also announced National Voter's Day and encouraged the community to register to vote. Mayor Casillas Salas spoke regarding the following recent events: the Loma Ve rde Recreation Center demolition; meeting with Allen School 3rd graders; El Grito; Latino Leaders Luncheon; San Diego Loyals Soccer Game; the League of California Cities conference; and the Camp Bashor grand opening. She congratulated Jose Barajas on the soft opening of Mmm... Cakes. Mayor Casillas Salas announced that due to the pandemic the City would not host the Starlight Parade and that she and Councilmember Galvez would work with TAVA on other holiday festivities. 11. COUNCILMEMBERS’ COMMENTS Councilmember Galvez spoke regarding the following recent events: Swear-in ceremony for USIBWC Commissioner Maria-Elena Giner; Sesame Place tour ; 2022/04/26 City Council Post Agenda Page 119 of 667 10 Loma Verde Recreation Center demolition; El Grito; Chula Vista Women's Club Annual Bunco fundraiser; Eastlake Rotary Club's Night in Sevilla fundraiser; Fleet Reserve's annual barbecue; Bill of Right's Talk Like a Pirate Day; Goodwill Annual Recognition Luncheon; meeting with the Kiwanis; Centennial 21 -01 Fire Academy graduation; Bingo at Club Amistad; Hilltop and Bonita Vista High Schools' Climate Strike from Friendship Park to City Hall; Camp Bashor grand opening and San Diego Regional Policy & Innovation Center forum. At the request of Councilmember Galvez there was consensus of the Council to use the City's logo for Junior Achievement of San Diego and Chula Vista Elementary school district's "My City" program. Councilmember McCann spoke regarding the following recent events: Loma Verde Recreation Center demolition; Sesame Place tour; Elks Club Chili Cook - Off; Camp Bashor grand opening; and SANDAG meeting. He thanked Kevin Mc Peak, pastor of Eastlake Church, for delivering the speech at the Centennial 21 - 01 Fire Academy graduation. Councilmember McCann requested data on Bike Safety from the City Manager. Councilmember Cardenas spoke regarding the following recent events: Loma Verde Recreation Center demolition; El Grito, and the SANDAG meeting. Councilmember Padilla spoke regarding the following recent events: League of California Cities Conference and a meeting with Lieutenant Governor Kounalakis. 12. CITY ATTORNEY'S REPORTS There were none. 13. CLOSED SESSION Pursuant to Resolution No. 13706 and Council Policy No. 346 -03, Official Minutes and records of action taken during Closed Sessions are maintained by the City Attorney. City Attorney Googins announced that the Council would convene in closed session to discuss the items listed below. Mayor Casillas Salas recessed the meeting at 9:27 p.m. The Council convened in closed session at 9:45 p.m., with all members present. 13.1 Conference with Labor Negotiators Pursuant to Government Code Section 54957.6 2022/04/26 City Council Post Agenda Page 120 of 667 11 Agency designated representatives: Maria Kachadoorian, Glen Googins, Courtney Chase, Kelley Bacon, Simon Silva, Sarah Schoen, and Tanya Tomlinson Employee organizations: ACE, IAFF, MM/PR, NS-IAFF, POA, WCE and unrepresented employees ACTION: No Reportable Action 14. ADJOURNMENT The meeting was adjourned at 10:55 p.m. Minutes prepared by: Tyshar Turner, Assistant City Clerk _________________________ Kerry K. Bigelow, MMC, City Clerk 2022/04/26 City Council Post Agenda Page 121 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Temporary Road Closure: Approve a Temporary Closure of Park Way for a Weekly Third Avenue Village Farmers Market from Third Avenue to Fourth Avenue on Sundays from 7 a.m. to 4 p.m. Report Number: 22-0115 Location: Within the Third Avenue Village on Park Way from Third Avenue to Fourth Avenue Department: Economic Development and City Manager Environmental Notice: The Project qualifies for a Categorical Exemption pursuant to the California Environmental Quality Act State Guidelines Section 15301 Class 1 (Existing Facilities), Section 15304 Class 4 (Minor Alterations to Land), and Section 15061(b)(3). Recommended Action Adopt a resolution approving a temporary closure of the westbound lane of Park Way, north of the median, for a weekly Third Avenue Village Farmers Market from Third Avenue to Fourth Avenue on Sundays from 7 a.m. to 4 p.m. through April 30, 2023, subject to conditions of approval, and waiving all City fees. SUMMARY The Third Avenue Village Association, under the management of New City America, has proposed to bring back a new Farmers Market as a weekly event on Sundays which would require a closure of the westbound lane of Park Way, north of the median, between Third Avenue and Fourth Avenue on Sundays from 7 a.m. to 4 p.m. The Farmers Market would be operated with management oversight by Third Avenue Village Association, or its successor agency, in coordination with the City. The Farmers Market would be subject to conditions of approval. In addition, Council adoption of the resolution would waive all City fees related to the temporary street closure and authorize the City Manager to extend the street closure for up to three additional one-year increments through April 30, 2026. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Categorical Exemption pursuant to State CEQA Guidelines Section 15301 Class 1 (Existing Facilities), Section 15304 Class 4 (Minor Alterations to Land), and Section 15061(b)(3) because it can be seen with certainty that there is no 2022/04/26 City Council Post Agenda Page 122 of 667 P a g e | 2 possibility that the activity in question may have a significant effect on the environment. Thus, no furth er environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable DISCUSSION Starting in 1994, a weekly Farmers Market occurred in the Third Avenue Village and was a staple in the community for a 22-year period, with operations ceasing in 2017. The Third Avenue Village Association (TAVA), under the management of New City America, has proposed to bring back a new Farmers Market as a weekly event on Sundays with a closure of the westbound lane of Park Way, north of the median, between Third Avenue and Fourth Avenue on Sundays from 7 a.m. to 4 p.m. TAVA’s request is included as Attachment 1. While this window includes vendor setup and takedown, the Farmers Market itself would take place from 10 a.m. to 2 p.m. California Vehicle Code section 21101(e) authorizes temporary closures of a portion of any street for local special events when the closing is necessary for the safety and protection of persons that would use that portion of the street during the temporary closing. Here, the proposed temporary closure described above would be necessary for the safety and protection of patrons of the Farmers Market. The Farmers Market would be operated at the location identified in Attachment 3 hereto with management oversight by TAVA, or its successor agency, in coordination with the City. TAVA has engaged Catt Fields White, Founder and CEO of San Diego Markets, to operate the event on a weekly basis. An experienced Farmers Market operator, Catt Fields White with San Diego Markets developed the Little Italy Saturday Mercato in 2008 and has provided management services since then to Little Italy's two weekly markets, and to multiple other weekly farmers markets in the region. Staff recommends that the City Council adopt the resolution to approve a temporary street closure of the westbound lane of Park Way, north of the median, from Third Avenue to Fourth Avenue, subject to conditions of approval (see Attachment 2), and waive all City fees related to the temporary street closure, including those for traffic control and special events. City Council’s adoption of the resolution would allow for a Farmers Market on Sundays for a one-year period through April 30, 2023, after which the City Manager or designee could consider extending the Farmers Market and associated temporary street closure for three additional one-year increments through April 30, 2026. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Councilmembers and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. 2022/04/26 City Council Post Agenda Page 123 of 667 P a g e | 3 CURRENT-YEAR FISCAL IMPACT Expenditures associated with the street closure are nominal and include staff time in the amount of $225 to review and process a traffic control plan. ONGOING FISCAL IMPACT There is no ongoing fiscal impact associated with the street closure. ATTACHMENTS 1. Correspondence from Third Avenue Village Association 2. Conditions of Approval 3. Farmers Market Map Staff Contact: Eric Crockett, Deputy City Manager Kevin Pointer, Senior Economic Development Specialist Amy Conrad, Communications & Special Events Coordinator 2022/04/26 City Council Post Agenda Page 124 of 667 THIRD AVENUE VILLAGE ASSOCIATION 353 Third Avenue  Chula Vista, CA, 91910  619.422.1982  ThirdAvenueVillage.org Facebook, Instagram & Twitter: ThirdAveVillage  #ThirdAveVillage March 4, 2022 Kevin Pointer Senior Economic Development Specialist City of Chula Vista Via Email: kpointer@chulavistaca.gov RE: Third Avenue Village Farmers’ Market Dear Mr. Pointer, At the February 2022’s Board Meeting, the Third Avenue Village Association’s (TAVA) Board authorized staff to work with the City of Chula Vista and San Diego Markets (SDM) to reinstate a weekly farmers’ market. The Third Avenue Village Farmers’ Market is owned by TAVA and managed by our consultant, Catt White with SDM. We are looking to kick-off the new market on Sunday, May 1, 2022, from 10:00am to 2:00pm and continue with the Market year-round, rain-or-shine. The TAVA Board of Directors authorize Catt White and her staff to act on TAVA’s behalf in the planning and implementation of the Third Avenue Village Market. If you have any questions, please contact me at dominic@newcityamerica.com. Thank you for your time and support. Sincerely, Dominic Li Mandri District Manager Third Avenue Village Association 2022/04/26 City Council Post Agenda Page 125 of 667 Exhibit A Third Avenue Village Association Weekly Farmers Market Conditions of Approval 1. The weekly street closure shall be permitted on Park Way from Third Avenue to Fourth Avenue, more particularly delineated in the attached sketch designated as Exhibit B attached hereto and by this reference made part hereof. The street closure shall be permitted through April 30, 2023 unless revoked by the City of Chula Vista. The purpose of the street closure is to accommodate the Third Avenue Village Farmers Market. At the end the approximately 1-year period, the Farmers Market shall be evaluated by the City Manager or his/her designee. The City Manager or his/her designee may extend the duration of the street closure for three additional one-year periods through April 30, 2026. 2. With the exception of signage, all vendors and vendor activities are to take place within the confines of the Third Avenue Village Farmers Market as listed below. Additional vendors or activities require approval of the City Manager or his/her designee prior to participation in the Farmers Market. Approved Vendors and Activities A. Certified Farmers Market Vendors approved by the County Agricultural Commissioner, where certified farmers offer for sale only those items grown themselves. The Farmers Market must comply with Direct Marketing Regulations as provided in the California Code of Regulations Title 3, Chapter 3, Group 4, Article 6.5. B. Food products and handcrafted goods will be offered, generally made by the seller, with vendors to be selected and qualified by Third Avenue Village Association, its assigns, or its successor agency. C. Promotional and/or Marketing activities that enhance the Farmers Market but do not detract from the Village business environment. D. Third Avenue Village Association, including successor agency, merchants and businesses in good standing may sell or demonstrate merchandise and services that conform to the Farmers Market vendor criteria, and are currently sold within their Village business establishments. E. Food items may be sold by permitted vendors selected by Third Avenue Village Association, its assigns or successor agency, staff to complement the Farmers Market experience. All packaged and prepared food vendors shall abide by all applicable regulations and must hold a current San Diego County Department of Environmental Health and Quality Temporary Food Facility and/or Cottage Food Permit, and General Business Liability insurance to sell food items within the Farmers Market. F. One booth shall be reserved for use by City of Chula Vista for city purposes. 3. Third Avenue Village Association, or its successor agency, shall provide, setup, maintain, and remove all signs, barricades, temporary traffic control devices related to the Farmers Market and 2022/04/26 City Council Post Agenda Page 126 of 667 Exhibit A street closure in a timely manner. Setup shall begin no earlier than 7:00 a.m. and breakdown shall be completed no later than 4:00 p.m. All traffic control devices, signs and barricades shall be provided at the expense of Third Avenue Village Association or its successor agency, and shall conform to the California Manual on Traffic Control Devices (CA MUTCD) requirements and be approved by the City Traffic Engineer in the form of an annual Traffic Control Plan. 4. Third Avenue Village Association, or its successor agency, will be responsible for coordination with appropriate City of Chula Vista departments and staff and implementation of all activities and regulations related to the street closure and Farmers Market in accordance with all Local, County, State and Federal Requirements. 5. Third Avenue Village Association, or its successor agency, shall be responsible for insuring the Farmers Market event subject to the approval of the Risk Manager and agrees to name the City of Chula Vista as additionally insured. 6. Trash, recycling and organics shall be disposed of pursuant to Chula Vista Municipal Code Sections 8.24 and 8.25. 2022/04/26 City Council Post Agenda Page 127 of 667 HW CERTIFIED MARKET 50’50’50’ 20’ FIRE LANE 20’ FIRE LANE P PARK WAY PARK WAY G STREETFOURTH AVENUETHIRD AVENUEGARRETT AVENUE20’50’ 1,265’ 20’ RESTROOMS PARK WAY AQUATIC CENTER MEMORIAL PARK EVERY SUNDAY (STARTING MAY 1, 2022) 10:00AM TO 2:00PM YEAR-ROUND / RAIN-OR-SHINE PARK WAY BETWEEN THIRD & FOURTH AVENUES 2022/04/26 City Council Post Agenda Page 128 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE TEMPORARY STREET CLOSURE OF THE WESTBOUND LANE OF PARK WAY, NORTH OF THE MEDIAN, FROM THIRD AVENUE TO FOURTH AVENUE, FOR THE WEEKLY THIRD AVENUE VILLAGE FARMERS MARKET ON SUNDAYS FROM 7 A.M. TO 4 P.M. THROUGH APRIL 30, 2023 WHEREAS, the City Council of the City of Chula Vista established a Business Improvement Area on November 16, 1971, which created the Downtown Business Association; and WHEREAS, on October 3, 1995, the City Council approved Resolution 18052 adopting Negative Declaration IS-95-30 and approving the closure of a portion of Center Street on Thursday afternoons between March 1996 and October 1996 for a Certified Farmers Market; and WHEREAS, on October 15, 1996, the City Council approved Resolution 18710 to expand the temporary closure of Center Street and added a portion of Church Avenue to accommodate the Certified Farmers Market on Thursday afternoons subject to certain conditions; and WHEREAS, on July 10, 2001, a new Property and Business Improvement District was formed by a vote of property owners for a five-year period; and WHEREAS, on June 20, 2006, the Property and Business Improvement District was renewed by a vote of property owners for a ten-year period; and WHEREAS, on June 14, 2016, the Property and Business Improvement District was again renewed by a vote of property owners for a ten-year period; and WHEREAS, the City Council had previously approved the temporary closure of Center Street to accommodate the Farmers Market since its original approval until it ceased operations in 2017; and WHEREAS, Third Avenue Village Association has indicated an interest in commencing a new Farmers Market starting on Sunday, May 8, 2022 through April 30, 2023, with possible extensions as provided in this Resolution; and WHEREAS, California Vehicle Code section 21101(e) authorizes the temporary closure of a portion of any street for local special events when the closing is necessary for the safety and protection of persons that would use that portion of the street during the temporary closing; and WHEREAS, the proposed temporary street closure described in this Resolution is necessary for the safety and protection of patrons of the Farmers Market; and 2022/04/26 City Council Post Agenda Page 129 of 667 WHEREAS, adoption of the resolution would authorize the City Manager or designee to extend the temporary street closure for the Farmers Market, in the same manner and to the extent provided in this Resolution, for up to three (3) additional one-year increments through April 30, 2026. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it: 1. Approves the temporary street closure of the westbound lane of Park Way, north of the median, from Third Avenue to Fourth Avenue, for a weekly Farmers Market on Sundays from 7:00 a.m. to 4:00 p.m. through April 30, 2023, subject to conditions of approval substantially in the form provided in Exhibit A, which is attached hereto and incorporated herein. 2. Finds that the is necessary for the safety and protection of patrons of the Farmers Market. 3. Waives all City fees associated with the temporary street closure for the Farmers Market. 4. Authorizes the City Manager or designee to extend the temporary street closure for the Farmers Market, in the same manner and to the same extent provided in this Resolution, for up to three (3) additional one-year increments through April 30, 2026. Presented by Approved as to form by Eric C. Crockett Glen R. Googins Deputy City Manager City Attorney 2022/04/26 City Council Post Agenda Page 130 of 667 Exhibit A Third Avenue Village Association Weekly Farmers Market Conditions of Approval 1. The weekly street closure shall be permitted on Park Way from Third Avenue to Fourth Avenue, more particularly delineated in the attached sketch designated as Exhibit B attached hereto and by this reference made part hereof. The street closure shall be permitted through April 30, 2023 unless revoked by the City of Chula Vista. The purpose of the street closure is to accommodate the Third Avenue Village Farmers Market. At the end the approximately 1-year period, the Farmers Market shall be evaluated by the City Manager or his/her designee. The City Manager or his/her designee may extend the duration of the street closure for three additional one-year periods through April 30, 2026. 2. With the exception of signage, all vendors and vendor activities are to take place within the confines of the Third Avenue Village Farmers Market as listed below. Additional vendors or activities require approval of the City Manager or his/her designee prior to participation in the Farmers Market. Approved Vendors and Activities A. Certified Farmers Market Vendors approved by the County Agricultural Commissioner, where certified farmers offer for sale only those items grown themselves. The Farmers Market must comply with Direct Marketing Regulations as provided in the California Code of Regulations Title 3, Chapter 3, Group 4, Article 6.5. B. Food products and handcrafted goods will be offered, generally made by the seller, with vendors to be selected and qualified by Third Avenue Village Association, its assigns, or its successor agency. C. Promotional and/or Marketing activities that enhance the Farmers Market but do not detract from the Village business environment. D. Third Avenue Village Association, including successor agency, merchants and businesses in good standing may sell or demonstrate merchandise and services that conform to the Farmers Market vendor criteria, and are currently sold within their Village business establishments. E. Food items may be sold by permitted vendors selected by Third Avenue Village Association, its assigns or successor agency, staff to complement the Farmers Market experience. All packaged and prepared food vendors shall abide by all applicable regulations and must hold a current San Diego County Department of Environmental Health and Quality Temporary Food Facility and/or Cottage Food Permit, and General Business Liability insurance to sell food items within the Farmers Market. F. One booth shall be reserved for use by City of Chula Vista for city purposes. 3. Third Avenue Village Association, or its successor agency, shall provide, setup, maintain, and remove all signs, barricades, temporary traffic control devices related to the Farmers Market and 2022/04/26 City Council Post Agenda Page 131 of 667 Exhibit A street closure in a timely manner. Setup shall begin no earlier than 7:00 a.m. and breakdown shall be completed no later than 4:00 p.m. All traffic control devices, signs and barricades shall be provided at the expense of Third Avenue Village Association or its successor agency, and shall conform to the California Manual on Traffic Control Devices (CA MUTCD) requirements and be approved by the City Traffic Engineer in the form of an annual Traffic Control Plan. 4. Third Avenue Village Association, or its successor agency, will be responsible for coordination with appropriate City of Chula Vista departments and staff and implementation of all activities and regulations related to the street closure and Farmers Market in accordance with all Local, County, State and Federal Requirements. 5. Third Avenue Village Association, or its successor agency, shall be responsible for insuring the Farmers Market event subject to the approval of the Risk Manager and agrees to name the City of Chula Vista as additionally insured. 6. Trash, recycling and organics shall be disposed of pursuant to Chula Vista Municipal Code Sections 8.24 and 8.25. 2022/04/26 City Council Post Agenda Page 132 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Contract Award: Award a Contract to Iteris, Inc. to Perform Traffic Signal Retiming Services Report Number: 22-0107 Location: East of I-805 Department: Engineering Environmental Notice: The Project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act State Guidelines. Recommended Action Adopt a resolution awarding a professional services contract to Iteris, Inc. to perform traffic signal retiming services for the portion of Chula Vista generally east of Interstate 805. SUMMARY After undergoing a Request for Proposal solicitation process, Staff has selected Iteris, Inc. to provide professional services for the retiming of 99 traffic signal locations generally located east of Interstate 805 as part of CIP TRF0400 (the “Project”; Attachment 1). The Project will update signal timing standards at all project locations and improve signal coordination along key corridors which will enhance safety and improve travel times for road users in the City of Chula Vista. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed project for compliance with the California Environmental Quality Act (CEQA) and has determined that the project qualifies for a Class 1 Categorical Exemption pursuant to Section 15301 (Existing Facilities) of the State CEQA Guidelines because the project involves negligible or no expansion of an existing use. Thus, no further environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION 2022/04/26 City Council Post Agenda Page 133 of 667 P a g e | 2 The Project was initiated to address recent changes to the California Manual on Uniform Traffic Control Devices (CA-MUTCD). The manual specifies provisions in signal timing standards of yellow/red clearance times and pedestrian “WALK” and “DON’T WALK” intervals. The Project will implement these standards at 99 traffic signals on the easterly portions of the City (CIP TRF0404 updated the timing at a majority of the traffic signals in the westerly portions of the City). This work will ensure the subject intersections’ signal timing is up to current standards in order to enhance safety and improve the efficiency and flow of traffic in the City. As part of the Project, the timing of the pedestrian phases which include the “WALK” and “DON’T WALK” intervals will be reviewed and updated, if needed, to provide sufficient time for pedestrians to begin crossing and finish crossing the street. The yellow times will also be reviewed and updated to ensure that minimum State standards are met providing adequate warning to motorists that their green interval is terminating, and right-of-way assignment is about to change. In addition, the red clearance interval, which follows the yellow interval, will also be reviewed and updated, if recommended, at these 99 intersections. The updated signal timing parameters are expected to enhance safety and improve efficiency at the Project locations. The Project also includes a comprehensive analysis of the current timing along major corridors east of I-805. The Project will improve the coordination between signals along major streets and therefore represents benefits to some of the City’s most heavily traveled corridors such as East H Street, Telegraph Canyon Road, Otay Lakes Road, and Olympic Parkway. These streets represent critical travel routes for Chula Vista residents commuting to and from the freeway and to the eastern extents of Chula Vista. Optimizing the coordination of signals will help improve traffic flow and reduce stops and delays for motorists. Fewer stops, less vehicle idling, and improved traffic flows will result in fewer Greenhouse Gas (GHG) emissions in direct support of the City’s Climate Action Plan. To achieve the objectives of the Project, Staff advertised a Request for Proposals (RFP) for services on December 10, 2021, in accordance with Chula Vista Municipal Code Section 2.56.110. On January 19, 2022, the City received five (5) proposals from the following interested firms: Ranking Consulting Firm 1 Iteris 2 STC Traffic 3 Advantec 4 TJKM 5 KOA A selection committee evaluated and scored each proposal, and determined that Iteris, Inc. was the most qualified to complete the Project. Therefore, Staff recommends awarding the subject contract to Iteris, Inc. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found that, Mayor Casillas Salas has real property holdings within 1,000 feet, but beyond 500 feet, of the boundaries of the property which is the subject of this action. Staff has determined that, pursuant to California Code of Regulations Title 2, sections 18700 and 18702.2(a)(8), this item does not present a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.) for the above-identified member. 2022/04/26 City Council Post Agenda Page 134 of 667 P a g e | 3 Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT Sufficient funding to cover this contract and City staff costs is included in capital improvement project TRF0400. Therefore, there is no additional impact to the TransNet and Traffic Signal Fund. Project costs are summarized below: FUNDS REQUIRED FOR PROJECT (TRF0400) A. Contract Amount $355,729 B. Traffic Engineering Staff Costs $25,879 Total Funds Required to Complete Project $381,608 AVAILABLE FUNDING (TRF0400) TransNet - TRF0400 $271,649 Traffic Signal – TRF0400 $109,959 TOTAL FUNDS AVAILABLE FOR CONSTRUCTION $381,608 ONGOING FISCAL IMPACT Upon completion of the project, the improvements will require only routine City operation and maintenance efforts. ATTACHMENTS 1. Project Location Map 2. 2-Party Agreement Staff Contact: Paul Oberbauer, Senior Civil Engineer, Department of Engineering and Capital Projects 2022/04/26 City Council Post Agenda Page 135 of 667 SEE MAP 15Y35SEE MAP 15Y55!(!(!(!(!(!(!(!(Chula VistaSan DiegoNational CityNational CityNational CitySAN DIEGOOTAYBONITAPALM CITYHARBOR SIDE CASTLE PARKCHULA VISTASUNNY VISTA LYNWOOD HILLSE H StMain StSweetwater RdOtay Lakes RdBonita RdOlympic PkwyTelegraph Canyon RdE 30th StO t a y V a lle y R d Hig h land A ve Orange AveH e ritag e R d B ey e r Wa y E 24th StBeyer B lvd N a tio na l C ity Blvd 19th StEuclid AveBr oa d w a y Reo D r Saturn BlvdBonita Rd•|}54§¤ƒ805§¤ƒ5§¤ƒ5§¤ƒ805Palm AveOcean View Hills Pkw3rd A ve 4th AveE J StF StE StI StG StH StH illtop Dr K StL St2nd Av e E Palomar StJ StPalomar StBr oa d way B a y Blvd M e lr o s e A v e D StO le a n d e r A v e Naples St1 st A v e E Naples StE L StC StE Orange AveIndu s t rial Blv d Brandywine Ave5t h A ve Ps o R a nc h ero Hollister StOrange AveBonita RdPlaza Bonita RdD Ave Bonita Mesa RdMe di ca l Cen te r Dr Telegraph Canyon RdMarina PkwyValley Vista RdE 24th StW illow StW Naples StValley RdV a ll ey V is t a W a y Bonita RdH St1 st Ave L StBay Blvd5th Ave 4th AveBonita RdL StI StC StJ StBroadw a y 5 th Ave Date:01/02/2018SEE MAP 15Y44SEE MAP 16Y41 San DiegoMEXICOCALIFORNIA ROAD SYSTEM2345678910123456789101B C D E F G H JAKB C D E F G H JAK› MAP 15Y45FUNCTIONAL CLASSIFICATION SYSTEMOTHER PRINCIPAL ARTERIALMINOR ARTERIALMAJOR COLLECTORLOCALOTHER FWY OR EXPWYINTERSTATE 134572MINOR COLLECTOR 6San DiegoMileFeet0 0.25 0.5 0.75 10 1,000 2,000 3,000 4,000 5,000 STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION In Cooperation With The FEDERAL HIGHWAY ADMINISTRATION AND LOCAL AGENCIESCOUNTY BOUNDARYCITY BOUNDARYRAILROADSIGN ROUTESINTERSTATEU.S.£⁄3STATE||1§¤ƒ59697114115INT. ID INTERSECTION NAME 143 Bonita & Lynwood Dr 98 Bonita & Willow St 100 Bonita & Allen School Rd 197 Bonita & Billy Casper Wy 101 Bonita & Otay Lakes Rd 93 East H &Hidden Vista Dr 140 East H & Terra Nova Dr 133 East H & Del Rey Bl 111 East H & Paseo Del Rey 129 Paseo Del Rey & Plaza Ct 132 East H & Avila Wy 130 East H & Tiera Del Rey 131 Tierra Del Rey & Costco Dwy 113 East H & Paseo Ranchero 114 East H & Buena Vista Wy 115 East H & Southwestern College 117 Otay Lakes Rd & Bonita Vista HS 116 Otay Lakes Rd & Ridgeback 228 Otay Lakes Rd & Bonita Vista MS 112 Otay Lakes Rd & Avenida Del Rey 122 Otay Lakes Rd & Camino Del Cerro Grande 102 Otay Lakes Rd & Allen School Ln 193 Paseo Del Rey & East J 153 Paseo Ranchero & East J 156 Telegraph Canyon & Canyon Plaza 96 Telegraph Canyon & Oleander 97 Telegraph Canyon & Paseo Del Rey 98 Telegraph Canyon & Medical Ctr 141 Telegraph Canyon & Paseo Ladera 144 Telegraph Canyon & Paseo Ranchero 147 Telegraph Canyon & Buena Vista 94 E Orange & Melrose Av 800 Olympic & I-805 SB 801 Olympic & I-805 NB 163 Olympic & Oleander Av 165 Olympic & Concord Wy 162 Olympic & Brandywine Av 171 Olympic & Heritage Rd 931401331291111321311301131021221121142281161171931531441711569814116216380180016594147214398100197101VICINITY & PROJECT LOCATION MAP2022/04/26 City Council Post Agenda Page 136 of 667 SEE MAP 16Y31SEE MAP 16Y51SAN DIEGOE H StOlympic PkwyOtay Lakes RdHun te Pk w y l a Media R d Telegraph Canyon RdOtay Lakes RdEastlake PkwyProctor Valley RdBirch RdE Palomar StWu es te R d la Me dia RdEastlake DrMt Miguel RdWu e s te R d •|}125•|}125Date 03/29/12SEE MAP 15Y45SEE MAP 16Y42 San DiegoMEXICOCALIFORNIA ROAD SYSTEM2345678910123456789101B C D E F G H JAKB C D E F G H JAK› MAP 16Y41FUNCTIONAL CLASSIFICATION SYSTEMOTHER PRINCIPAL ARTERIALMINOR ARTERIALMAJOR COLLECTORLOCALOTHER FWY OR EXPWYINTERSTATE 134572MINOR COLLECTOR 6San DiegoMileFeet0 0.25 0.5 0.75 10 1,000 2,000 3,000 4,000 5,000SIGN ROUTESINTERSTATEU.S.£⁄3STATECOUNTY4567D2||1§¤ƒ5 STATE OF CALIFORNIA DEPARTMENT OF TRANSPORTATION In Cooperation With The FEDERAL HIGHWAY ADMINISTRATION AND LOCAL AGENCIESCOUNTY BOUNDARYCITY BOUNDARYRAILROAD118255135150175123145221INT. ID INTERSECTION NAME 118 East H & Otay Lakes Rd 150 East H & Baron Wy 119 East H & Auburn Wy 120 East H & Corral Canyon 159 East H & Eastlake Dr 266 East H & SR125 SB 267 East H & SR125 NB 198 Proctor Valley & East H 250 Proctor Valley & San Miguel Shops 241 Proctor Valley & Rocking Horse 240 Proctor Valley & Lane Av 239 Proctor Valley & Hunte Pkwy 227 Mt Miguel Rd & Proctor Valley Rd 255 Otay Lakes & Elmhurst St 135 Otay Lakes & Gotham St 173 Otay Lakes & Apache Dr 128 Otay Lakes & La Media 148 Otay Lakes & Rutgers Av 134 Otay Lakes & Saint Claire 220 Otay Lakes & Town Center W. 270 Otay Lakes & SR125 SB 271 Otay Lakes & SR125 NB 145 Otay Lakes & Town Center E. 123 Otay Lakes & Eastlake Pkwy 157 Otay Lakes & Lane Av 208 Otay Lakes & Fenton St 158 Otay Lakes & Hunte Pkwy 221 Eastlake Dr & Miller Dr 188 Eastlake Pkwy & Fenton St 223 Lane Ave & Fenton St 160 Eastlake Pkwy& Greensgate Dr 177 Eastlake Pkwy & Clubhouse Dr 186 Eastlake Pkwy & Trinidad Cove 202 Eastlake Pkwy & Corte Vista 203 Eastlake Pkwy & Caminito Positano 189 Olympic & Otay Ranch HS 190 Olympic & Santa Venetia St 175 Olympic & La Media Rd 176 Olympic & E Palomar St 268 Olympic & SR125 SB 269 Olympic & SR125 NB 201 Olympic & Town Center Dr 185 Olympic & Eastlake Pkwy 200 Olympic & Exploration Falls Dr 204 Olympic & Winding Walk St 181 Olympic & Hunte Pkwy 211 La Media & Santa Venetia St 235 La Media & Birch Rd 236 Birch & Magdalena Av 251 Birch & Mater Dei Dr 261 Birch & SR125 SB 262 Birch & SR125 NB 256 Birch & Millenia Ave 257 Birch & Orion Ave257256261262251236235211190176268269201185200204158203202186177160128173148134220270271157208223188120159266267227198241240239119250189181VICINITY & PROJECT LOCATION MAP2022/04/26 City Council Post Agenda Page 137 of 667 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CRESTRIDGE RDW I L D O A TS L N O L D 94 B R ID G E UPLAND STCOTTONWOODSPRINGS LNARAPAHO STSANVICENTE BLDON PICO RDEL CAN T O D R EUBANK LNVIA ORANGE WYSAN MIGUEL RDIVANHO STCUYAMACA AVBUENA VISTA AVMARIA AVSWEE T WATER SPR I NGS BL GLEN DRHELIX STLOUISA DRROGERS RDFAIRHILL DRMAYA STDIVERSION DRH ELIX STWILLOW GLEN DROLIVE DROLD CAMPO RDCAMPO RDSOUTH BONITA STM IL L A R RA NCH R D P RD 1 0 1 2 P RO C T O R V ALL E Y R DCALLE LOSARBOLESJAMACHA BLCREST DRTHIS MAP/DATA IS PROVIDED WITHOUT WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.This product may contain information from the SANDAG Regional Information System which cannot be reproduced without the written permission of SANDAG. 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Full text of this legal notice can be found at: http://www.sangis.org/Legal_Notice.htmA B C D EFG HJK10987654321J K10987654321ACBDCounty of San DiegoEFGHMAP 16Y31SEE MAP 16Y32 SEE MAP 16Y21SEE MAP 15Y35SEE MAP 16Y41Maintained RoadsPRD RoadsPrivate RoadsCity Roads with County AssetsZ RoadsRoad Station LocationRoad Maintenance Station BoundariesStreet District BoundariesHighwayRailroadsUrban/Rural (Caltrans)Active QuarriesStreamsLakes%&’(•|}4567InterstateStateCountyMap Printed: 1/30/20200 2,000 4,000 6,0001,000Feet1 inch = 2,000 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D E LLLL AAAA M AAAAAA RRRRRR KKKKNOOOOOOLLLLLLV((LLI((!!!!EWWWDDRRRRHILLLLLLLLTTTOOOOOOONSSSSSEERRRRVIICCCCCCERRRDDDB AAAA !((!!!!RRRR BBBBBB !!!!((((((((!!!!!!!!!!!!!!!!!!!!!!!III TTTTTT RRRR DT LEDGESIDESTT((!!!!!!VISTATTDRC O U N T R Y T R A I L SFONDOOORRRRRRDDDNNNOOORRRTTTEEEMESADRR!((!!!!!!YCRSSTEELECANYONRRDDDSOUTHCCCCC((((((((((!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!OOOOOO!!!!!!RRDOBAAAAAAAVVVVAAAAAAAAAPRRRRRD99000000!!!((((((((((!!!!!!!!!!!!!!!!HHHHHEEEAAATTTTTAAAAAHHHEEERWOODDREEEEEELMDALEDRSSSSSSIIIIEEEEEERRRRRRRRAAAAAABBBBONITATTSTTHELIXSTTT!((!!!!!SSRRRRRR55555444LAMARSTBRRRRRRABHAMSTROTHGARDDDDRRRRRRDDIVYSTC AA LL A VAA O D R GGGGGGGGGGG!!!!!!!!((((((((((((((((!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!OOOLFCREEEEEESSSSSSSSSS!!!!!!(((((((((((((!!!!!!!!!!!!!!!!!!!TTTTRRRRRRIDDDDGGGGGGEEEEERRRRRRDDDDL N O LL D 9 4 BBBBB RR ID G E UUPLAANNDSTCOOOOOTTTTTTTTOOOONNNWWOODSSPRINGSLNARAPAPPHOSTS((!!ANVICENTTEBLDONPICORDE LC A N T O D R EEUUBBANKLNNNNNNVVIAAAOOOOOORANGEWYSSAANNNNNMMIGUELRRDDIVAVVNHOSTCUYAYYMACAAAVVVVVVVBUENAVISTATTAVMARIIAAAVS W E E T W AAAAAAWW TTTTAAAAAA E R S P R I N G S B L GLENDR((!!!!!!HHHHEEEEEEELLLLLLIIIIIXXXXXXSSTUISADRFAFFIRRHHILLDRMMMMMMAAAAYYYYAAAAAAAAAYYYYYSSSSSSTDIVERSIONDRHHHH !!!!!!((((((!!!!!!!!!!!!EEEELIXSTSWILLOWGLENDRLIVEDRROLDCAMMPOORDCCAAAAMMMMPPPPOOOOORRRDDDSOOUUUUTTTHHHHHHBBBBBOOONITTTTAAAAAAAA!!((!!!TTTTTSTM IL L A R R A N C H R D P R D 1 0 1 2 CALLELOSSS!!!!!!((((((!!!!!!!!!!!!ARBOLESJAMAACCCHHAABBLLCRESTDRR4474444444444444444444!!!((!((((!!!!!!(((((((((((!!!!!!!!(((((((!!!!!!!!!!!(((((((!!!!!!!!!!!((((((!!!!!!!!!!!!!!!!!!!(((!!!!!!((((!!!!!!!!(((((!!!!!!!!!!!(!!((((((((!!!!!!!!(((((((!!!!!!!!!!!!!!!((!!!!!!!!!((!!!!!!((((!!!((!!!!!!(((((!!!!!!CCJJCCCC!!!!PAAAAOOOOOOO44444444IIIEEEEEECCRRRRSELLLLEDV E LARATVVVVVACQRINEEEEEEIIIIIGGG((!!!!!!!YEEEWCRAAAAAAAAA !!!!!!NNNNNNNNN(((((!!!!SBTSSTTTTT(((((!!!!HHHHHH((((((((((((!!!!!!!!!!!!!!!!OOOOMKKKRMSSSIETMMMMOO REEEEEEDARRRRPAAAAAAPVOOOOSSSSSS((((((!!!!!!!!AAAAAALLLCTYC TABHAMSTC S L NOUISALINT. ID INTERSECTION NAME 248 San Miguel Ranch & Avenida Altamira 247 San Miguel Ranch & Avenida Loretta 263 San Miguel Ranch & SR125 SB 264 San Miguel Ranch & SR125 NB 224 Mt Miguel & Avenida Belterra 226 Mt Miguel & Paseo Veracurz 225 Mt Miguel & Calle La Marina VICINITY & PROJECT LOCATION MAP2022/04/26 City Council Post Agenda Page 138 of 667 Adaptive Int. ID Name Controller Program Version Controller Type Protocol 93 093 East H/Hidden Vista Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 94 094 East Orange/Melrose McCain 233 RV 2.1E 170E QuicComm 96 096 Crest/Oleander/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 97 097 Elks/Paseo Del Rey/Telegraph CynTrafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 98 098 Medical Center/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 99 099 Bonita/Willow McCain 2033 1.4 2070E QuicComm 100 100 Allen School/Bonita McCain 233 RV 2.1E 170E QuicComm 101 101 Bonita/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 102 102 Allen School/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 111 111 East H/Paseo Del Rey Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 112 112 Avenida Del Rey/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 113 113 East H/Paseo Ranchero Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 114 114 Buena Vista/East H Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 115 115 East H/Southwestern College Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 116 116 Canyon/Otay Lakes/Ridgeback Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 117 117 Bonita Vista HS/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 118 118 East H/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 119 119 Auburn/East H McCain 2033 1.4 2070E QuicComm 120 120 Corral Canyon/East H/Rutgers McCain 233 RV 2.1E 170E QuicComm 122 122 Cerro Grande/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 123 123 Eastlake Parkway/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 128 128 La Media/Otay Lakes/Tele Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 129 129 Paseo Del Rey/Plaza Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 130 130 East H/Tierra Del Rey Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 131 131 Costco/Tierra Del Rey Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 132 132 East H/Avila Wy Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 133 133 Del Rey/East H Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 134 134 Otay Lakes/St Claire McCain 233 RV 2.1E 170E QuicComm 135 135 Gotham/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 140 140 East H/Terra Nova Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 141 141 Paseo Ladera/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 143 143 Bonita/Lynwood/Plaza Bonita McCain 233 RV 2.1E 170E QuicComm 144 144 Paseo Ranchero/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 145 145 Otay Lakes/Village Center East McCain 233 RV 2.1E 170E QuicComm 147 147 Buena Vista/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 148 148 Otay Lakes/Rutgers McCain 233 RV 2.1E 170E QuicComm 150 150 Bonita Vista HS/East H Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 153 153 East J/Paseo Ranchero Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 155 155 Clubhouse/Hunte McCain 233 RV 2.1E 170E QuicComm 156 156 Canyon Plaza/Telegraph Cyn Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 157 157 Lane/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 158 158 Hunte/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 159 159 East H/Eastlake Dr McCain 233 RV 2.1E 170E QuicComm 160 160 Eastlake/Greensgate McCain 233 RV 2.1E 170E QuicComm 162 162 Brandywine/Olympic McCain 233 RV 2.1E 170E QuicComm 163 163 Oleander/Olympic McCain 233 RV 2.1E 170E QuicComm 164 164 Hunte/Greensview/King Creek McCain 233 RV 2.1E 170E QuicComm 165 165 Concord/Olympic McCain 233 RV 2.1E 170E QuicComm 171 171 Heritage/Olympic McCain 233 RV 2.1E 170E QuicComm 173 173 Apache/Miracosta/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 175 175 La Media/Olympic McCain 233 RV 2.1E 170E QuicComm 176 176 East Palomar/Olympic McCain Omni eX 1.11 2070 ATC NTCIP 177 177 Clubhouse/Eastlake McCain 233 RV 2.1E 170E QuicComm 181 181 Hunte/Olympic McCain 233 RV 2.1E 170E QuicComm 185 185 Eastlake/Olympic McCain 233 RV 2.1E 170E QuicComm 186 186 Eastlake/Trinidad Cove McCain 233 RV 2.1E 170E QuicComm 188 188 Eastlake/Fenton McCain 233 RV 2.1E 170E QuicComm 189 189 High School/Olympic McCain 233 RV 2.1E 170E QuicComm 190 190 Olympic/Santa Venetia McCain 233 RV 2.1E 170E QuicComm 193 193 East J/Paseo Del Rey McCain 233 RV 2.1E 170E QuicComm 197 197 Billy Casper/Bonita McCain 233 RV 2.1E 170E QuicComm 198 198 East H/Miguel/Proctor Valley McCain 233 RV 2.1E 170E QuicComm 200 200 Exploration Falls/Olympic McCain 233 RV 2.1E 170E QuicComm 201 201 Olympic/Town Center McCain 233 RV 2.1E 170E QuicComm 202 202 Eastlake/Corte Vista McCain 233 RV 2.1E 170E QuicComm 203 203 Eastlake/Caminito Positano McCain 233 RV 2.1E 170E QuicComm 204 204 Olympic/Windingwalk McCain 233 RV 2.1E 170E QuicComm 208 208 Fenton/Otay Lakes McCain 233 RV 2.1E 170E QuicComm 211 211 La Media/Santa Venetia McCain 233 RV 2.1E 170E QuicComm 220 220 Otay Lakes/Village Ctr West McCain 233 RV 2.1E 170E QuicComm 221 221 Eastlake/Miller McCain 233 RV 2.1E 170E QuicComm 223 223 Fenton/Lane McCain 233 RV 2.1E 170E QuicComm Controller Equipment Inventory 2022/04/26 City Council Post Agenda Page 139 of 667 Adaptive Int. ID Name Controller Program Version Controller Type Protocol Controller Equipment Inventory 224 224 Ave Belterra/Mt Miguel McCain 233 RV 2.1E 170E QuicComm 225 225 Calle La Marina/Mt Miguel McCain 233 RV 2.1E 170E QuicComm 226 226 Mt Miguel/Paseo Veracruz McCain 233 RV 2.1E 170E QuicComm 227 227 Mt Miguel/Proctor Valley (N)McCain 233 RV 2.1E 170E QuicComm 228 228 Bonita Vista MS/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 234 234 Hunte/So Greensview McCain 233 RV 2.1E 170E QuicComm 235 235 Birch/La Media McCain 233 RV 2.1E 170E QuicComm 236 236 Birch/Magdalena McCain 233 RV 2.1E 170E QuicComm 239 239 Hunte/Proctor Valley McCain 233 RV 2.1E 170E QuicComm 240 240 Lane/Proctor Valley McCain 233 RV 2.1E 170E QuicComm 241 241 Proctor Valley/Rocking Horse McCain 233 RV 2.1E 170E QuicComm 242 242 Duncan Ranch/Proctor Valley McCain 233 RV 2.1E 170E QuicComm 247 247 Ave Loretta/San Miguel Ranch McCain 233 RV 2.1E 170E QuicComm 248 248 Ave Altamira/San Miguel Ranch McCain 233 RV 2.1E 170E QuicComm 250 250 Proctor Valley/SM Ranch Shops McCain 233 RV 2.1E 170E QuicComm 251 251 Birch/Mater Dei McCain 233 RV 2.1E 170E QuicComm 255 255 Elmhurst/Otay Lakes Trafficware Patriot + Synchrogreen V76 2070 ATC NTCIP 256 256 Birch/Millenia McCain 233 RV 2.1E 170E QuicComm 257 257 Birch/Orion McCain 233 RV 2.1E 170E QuicComm 261 261 Birch/SR125 SB McCain 233 RV 2.1E 170E QuicComm 262 262 Birch/SR125 NB McCain 233 RV 2.1E 170E QuicComm 263 263 S Miguel Ranch/SR125 SB McCain 233 RV 2.1E 170E QuicComm 264 264 S Miguel Ranch/SR125 NB McCain 233 RV 2.1E 170E QuicComm 266 266 East H/SR125 SB McCain 233 RV 2.1E 170E QuicComm 267 267 East H/SR125 NB McCain 233 RV 2.1E 170E QuicComm 268 268 Olympic/SR125 SB McCain 233 RV 2.1E 170E QuicComm 269 269 Olympic/SR125 NB McCain 233 RV 2.1E 170E QuicComm 270 270 Otay Lakes/SR125 SB McCain 233 RV 2.1E 170E QuicComm 271 271 Otay Lakes/SR125 NB McCain 233 RV 2.1E 170E QuicComm 800 800 I805/SB Ramp -C8 170E - 801 801 I805/NB Ramp -C8 170E - 2022/04/26 City Council Post Agenda Page 140 of 667 1 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 CITY OF CHULA VISTA CONSULTANT SERVICES AGREEMENT WITH ITERIS, INC. TO PROVIDE PROFESSIONAL SERVICES FOR TRAFFIC SIGNAL RETIMING OF 99 LOCATIONS (CIP PROJECT NO. TRF0400) This Agreement is entered into effective as of April 26, 2022 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“City”) and ITERIS, INC., a Delaware Corporation (“Consultant”) (collectively, the “Parties” and, individually, a “Party”) with reference to the following facts: RECITALS WHEREAS, City requires professional engineering services in the signal retiming of 99 traffic signal locations; and WHEREAS, the project is to improve coordination between signals and update pedestrian and vehicle clearance times to current State standards through optimized signal timing; and WHEREAS, in order to procure these services the City solicited proposals in accordance with Chula Vista Municipal Code Section 2.56.110 for “professional services”, advertised on December 10, 2021 a Request for Proposals (RFP), received five (5) proposals on January 19, 2022, and selected Consultant as the most qualified amongst those submitting; and WHEREAS, Consultant warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Consultant to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] 2022/04/26 City Council Post Agenda Page 141 of 667 2 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 OBLIGATORY PROVISIONS NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and Consultant hereby agree as follows: 1. SERVICES 1.1 Required Services. Consultant agrees to perform the services, and deliver to City the “Deliverables” (if any) described in the attached Exhibit A, incorporated into the Agreement by this reference, within the time frames set forth therein, time being of the essence for this Agreement. The services and/or Deliverables described in Exhibit A shall be referred to herein as the “Required Services.” 1.2 Reductions in Scope of Work. City may independently, or upon request from Consultant, from time to time, reduce the Required Services to be performed by the Consultant under this Agreement. Upon doing so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction. 1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinances governing procurement and purchasing authority, City may request Consultant provide additional services related to the Required Services (“Additional Services”). If so, City and Consultant agree to meet and confer in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistent with the rates and terms already provided therein. Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this Agreement. 1.4 Standard of Care. Consultant expressly warrants and agrees that any and all Required Services hereunder shall be performed in accordance with the highest standard of care exercised by members of the profession currently practicing under similar conditions and in similar locations. 1.5 No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Consultant of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Consultant or its subcontractors. 1.6 Security for Performance. In the event that Exhibit A Section 4 indicates the need for Consultant to provide additional security for performance of its duties under this Agreement, Consultant shall provide such additional security prior to commencement of its Required Services in the form and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney. 1.7 Compliance with Laws. In its performance of the Required Services, Consultant shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal Code. 1.8 Business License. Prior to commencement of work, Consultant shall obtain a business license from City. 1.9 Subcontractors. Prior to commencement of any work, Consultant shall submit for City’s information and approval a list of any and all subcontractors to be used by Consultant in the performance of the Required Services. Consultant agrees to take appropriate measures necessary to ensure that all subcontractors and 2022/04/26 City Council Post Agenda Page 142 of 667 3 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 personnel utilized by the Consultant to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Consultant under this Agreement, Consultant shall ensure that each and every subcontractor carries out the Consultant’s responsibilities as set forth in this Agreement. 1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Date or Consultant’s commencement of the Required Services hereunder, and shall terminate when the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly survive termination shall remain in effect. 2. COMPENSATION 2.1 General. For satisfactory performance of the Required Services, City agrees to compensate Consultant in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2. 2.2 Detailed Invoicing. Consultant agrees to provide City with a detailed invoice for services performed each month, within thirty (30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All charges must be presented in a line item format with each task separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed, the amount invoiced to date, and the remaining amount available under any approved budget. Consultant must obtain prior written authorization from City for any fees or expenses that exceed the estimated budget. 2.3 Payment to Consultant. Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall pay Consultant for the invoice amount within thirty (30) days. Payment shall be made in accordance with the terms and conditions set forth in Exhibit A and section 2.4, below. At City’s discretion, invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced. 2.4 Retention Policy. City shall retain ten percent (10%) of the amount due for Required Services detailed on each invoice (the “holdback amount”). Upon City review and determination of Project Completion, the holdback amount will be issued to Consultant. 2.5 Reimbursement of Costs. City may reimburse Consultant’s out-of-pocket costs incurred by Consultant in the performance of the Required Services if negotiated in advance and included in Exhibit A. Unless specifically provided in Exhibit A, Consultant shall be responsible for any and all out-of-pocket costs incurred by Consultant in the performance of the Required Services. 2.6 Exclusions. City shall not be responsible for payment to Consultant for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of Consultant, its agents, employees, or subcontractors. 2.7 Payment Not Final Approval. Consultant understands and agrees that payment to the Consultant or reimbursement for any Consultant costs related to the performance of Required Services does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver of any violation by Consultant of the terms of 2022/04/26 City Council Post Agenda Page 143 of 667 4 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 this Agreement. If City determines that Consultant is not entitled to receive any amount of compensation already paid, City will notify Consultant in writing and Consultant shall promptly return such amount. 3. INSURANCE 3.1 Required Insurance. Consultant must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section. 3.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the Required Insurance must be disclosed to and approved by City in advance of the commencement of work. 3.3 Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers ’ Compensation Insurance, insurance issued by the State Compensation Fund is also acceptable. 3.4 Subcontractors. Consultant must include all sub-consultants/sub-contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating separate coverage for those not under its policies. Any separate coverage for sub-consultants must also comply with the terms of this Agreement. 3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified as required in Exhibit B or as may otherwise b e specified by City’s Risk Manager.. The general liability additional insured coverage must be provided in the form of an endorsement to the Consultant’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude Products/Completed Operations coverage. 3.6 General Liability Coverage to be “Primary.” Consultant’s general liability coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance provided by Consultant and in no way relieves Consultant from its responsibility to provide insurance. 3.7 No Cancellation. No Required Insurance policy may be canceled by either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Consultant must procure and put into effect equivalent coverage(s). 3.8 Waiver of Subrogation. Consultant’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurance policy under this Agreement. In addition, Consultant waives any right it may have or may obtain to subrogation for a claim against City. 3.9 Verification of Coverage. Prior to commencement of any work, Consultant shall furnish City with original certificates of insurance and any amendatory endorsements necessary to demonstrate to City that Consultant has obtained the Required Insurance in compliance with the terms of this Agreement. The words 2022/04/26 City Council Post Agenda Page 144 of 667 5 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 “will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims -made form, the following requirements also apply: a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement. b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Consultant must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review. 3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Consultant’s obligations under this Agreement, including Indemnity. 3.12 Additional Coverage. To the extent that insurance coverage provided by Consultant maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained. 4. INDEMNIFICATION 4.1. General. To the maximum extent allowed by law, Consultant shall protect, defend, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Consultant, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Consultant, its employees, agents or officers, or any third party. 4.2. Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defined by California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8. 2022/04/26 City Council Post Agenda Page 145 of 667 6 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 4.3 Costs of Defense and Award. Included in Consultant’s obligations under this Section 4 is Consultant’s obligation to defend, at Consultant’s own cost, expense and risk, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Consultant shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any and all related le gal expenses and costs incurred by any of them. 4.4. Consultant’s Obligations Not Limited or Modified. Consultant’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Consultant. Furthermore, Consultant’s obligations under this Section 4 shall in no way limit, modify or excuse any of Consultant’s other obligations or duties under this Agreement. 4.5. Enforcement Costs. Consultant agrees to pay any and all costs City incurs in enforcing Consultant’s obligations under this Section 4. 4.6 Survival. Consultant’s obligations under this Section 4 shall survive the termination of this Agreement. 5. FINANCIAL INTERESTS OF CONSULTANT. 5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and consultants performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700). In order to assure compliance with these requirements, Consultant shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference. 5.2 Disclosures; Prohibited Interests. Independent of whether Consultant is required to file a Form 700, Consultant warrants and represents that it has disclosed to City any economic interests held by Consultant, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Consultant warrants and represents that it has not employed or retained any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, to solicit or secure this Agreement. Further, Consultant warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Consultant further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Consultant or Consultant’s subcontractors. Consultant further agrees to notify City in the event any such interest is discovered wheth er or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability. 6. REMEDIES 6.1 Termination for Cause. If for any reason whatsoever Consultant shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Consultant shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving five (5) days written notice to Consultant. Such notice shall identify the Default and the Agreement termination date. If Consultant notifies City of its intent to cure such Default prior 2022/04/26 City Council Post Agenda Page 146 of 667 7 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City may grant Consultant up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Consultant shall immediately provide City any and all ”Work Product” (defined in Section 7 below) prepared by Consultant as part of the Required Services. Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Consultant may be entitled to compensation for work satisfactorily performed prior to Consultant’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default. 6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Consultant of such termination or suspension at least fifteen (15) days prior to the effective date thereof. Upon receipt of such notice, Consultant shall immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof. Consultant shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement. 6.3 Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this Section, Consultant hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6. 6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Consultant shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 6.5 Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in San Diego County, State of California. 6.6 Service of Process. Consultant agrees that it is subject to personal jurisdiction in California. If Consultant is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Consultant irrevocably consents to service of process on Consultant by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing. 7. OWNERSHIP AND USE OF WORK PRODUCT All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance 2022/04/26 City Council Post Agenda Page 147 of 667 8 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Consultant in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Consultant, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Consultant shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 8. GENERAL PROVISIONS 8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties. 8.2 Assignment. City would not have entered into this Agreement but for Consultant’s unique qualifications and traits. Consultant shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion. 8.3 Authority. The person(s) executing this Agreement for Consultant warrants and represents that they have the authority to execute same on behalf of Consultant and to bind Consultant to its obligations hereunder without any further action or direction from Consultant or any board, principle or officer thereof. 8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart. 8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. 8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Consultant agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of sub- contractors/sub-consultants. 8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carr y out the provisions of this Agreement and the intentions of the Parties. 8.8 Independent Contractor. Consultant is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volu nteers shall have control over the conduct of Consultant or any of Consultant’s officers, employees, or agents (“Consultant Related Individuals”), except as set forth in this Agreement. No Consultant Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or 2022/04/26 City Council Post Agenda Page 148 of 667 9 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 any other payroll tax with respect to any Consultant Related Individuals; instead, Consultant shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Co nsultant shall not at any time or in any manner represent that it or any of its Consultant Related Individuals are employees or agents of City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner. 8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing. 8.10 Electronic Signatures. Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic Signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time. (End of page. Next page is signature page.) 2022/04/26 City Council Post Agenda Page 149 of 667 10 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 SIGNATURE PAGE CONSULTANT SERVICES AGREEMENT IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Consultant agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the Effective Date. ITERIS, INC. CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ Scott Carlson MARY CASILLAS SALAS Vice President, Alternative Delivery MAYOR ATTEST BY: ________________________________ Kerry K. Bigelow, MMC City Clerk APPROVED AS TO FORM BY: ________________________________ Glen R. Googins City Attorney 2022/04/26 City Council Post Agenda Page 150 of 667 11 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 EXHIBIT A SCOPE OF WORK AND PAYMENT TERMS 1. Contact People for Contract Administration and Legal Notice A. City Contract Administration: Jerard Madrigal 276 Fourth Ave Building B (619) 476-2355 jmadrigal@chulavistaca.gov For Legal Notice Copy to: City of Chula Vista City Attorney 276 Fourth Avenue, Chula Vista, CA 91910 619-691-5037 CityAttorney@chulavistaca.gov B. Consultant Contract Administration: ITERIS, INC. 1700 Carnegie Ave, #100 Santa Ana, CA 92705 (949) 270-9400 contracts@iteris.com For Legal Notice Copy to: Iteris Legal Department 1700 Carnegie Avenue, Suite 100 Santa Ana, CA 92705 (949) 270-9400 iteris-legal@iteris.com 2. Required Services A. General Description: Consultant is to provide engineering services in area-wide signal retiming of 99 signalized locations which aims to accomplish three key objectives: (1) optimize coordination between signals, (2) update pedestrian and red/yellow clearance times per California Manual Uniform Traffic Control Devices (CA-MUTCD) standards, and (3) provide bicycle timing calculations. B. Detailed Description: TASK 1 – PROJECT COORDINATION Subtask 1.1. Kickoff Meeting Consultant strongly believes that excellent project management and continuous project communication are essential in the successful completion of any project. Thus, at the initiation of the project, Mr. Jason Xu will lead a project kick-off meeting with the City, either in-person or virtually. As part of this meeting, communication channels and protocols will be established, the scope of work, schedule, and budget will be discussed, necessary 2022/04/26 City Council Post Agenda Page 151 of 667 12 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 information will be gathered, and a thorough understanding of the goals of the project will be obtained. The coordination protocol will also be set up. Subtask 1.2. Progress Meetings Consultant will facilitate and lead monthly meetings at the City or via conference call to include City staff, other stakeholders and agency officials as needed to ensure thoroughness of direction to the team, and accuracy of the project deliverables. These meetings will cover project activities, address any issues as they arise, and coordinate activities such as scheduling of additional meetings, and preparation and reviews of deliverables. Consultant will send out agendas prior to each meeting and will distribute notes and action items to invitees following the dates of these meetings. Consultant will maintain a cumulative log of Action Items from all meetings. Consultant will attend up to six (6) on-site meetings; one (1) of which will be reserved for definition of the “before” and “after” studies. Consultant will also be available to attend Council meetings to present project findings and solutions. As a proactive way to manage the project schedule and budget, Consultant management is scheduled to conduct an internal project review meeting with each PM monthly. The internal review includes checking the current project status against the project schedule to ensure that projects are kept on schedule and on budget. A proposed project schedule for this project is provided at the end of this section. Mr. Bernard Li, QA/QC Lead, will also be responsible for the overall Quality Control/Quality Assurance (QC/QA) aspect of this project. Within this role, he will work closely with PM to ensure QC procedure be fully executed and to review the products prior to delivery to the City for review and approval. Deliverables • Kick-off Meeting • Progress Meetings • Meeting Agendas and Minutes TASK 2 – DATA COLLECTION • The data collection task includes the gathering of all information needed to deliver optimized signal timing and synchronization for the project area. Consultant will coordinate with the City to obtain existing timing sheets, signal plans, collision data, and speed surveys. Subtasks 2.1 and 2.2. ADT and Turning Movement Counts Consultant team will collect and document 2-day 24-hour bidirectional vehicle counts at 20 locations that are preselected in Attachment C of RFP. Consultant will coordinate with the City Staff to review and finalize the list of ADT locations prior to scheduling the field work. ADT counts will be documented in 15-minute bins and submitted in the format that is predefined in Attachment C of RFP. Prior to conducting traffic counts, Consultant will use ClearGuide to identify and confirm if traffic patterns have returned to the “new” normal condition. Once confirmed and with agencies’ concurrence, Consultant’s subconsultant, AimTD will conduct 24-hour ADT counts at the finalized 20 preselected locations. AimTD was Consultant team for traffic data collect for TRF404 Retiming Project and is very familiar with the City’ requirements and procedure. These ADT counts will help identify the peaking characteristics of each segment and identify proposed peak periods for the collection of turning movement counts as well as signal synchronization periods. Consultant will update citywide ADT map using the data collected under this task if needed. Based on the peak hours identified by the ADT data, Consultant team will collect and document 1-day weekday turning movement counts (TMCs) at 72 intersections which include 3-hour AM peak, 2-hour Midday Peak, and 3-hour PM peak. The weekend TMC will also be collected at 62 of the 72 locations to cover 2-hour 2022/04/26 City Council Post Agenda Page 152 of 667 13 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 peak of Saturday traffic. AimTD will then conduct weekday and weekend turning movement counts at all study intersections using video cameras mounted on signal poles. These recordings can be conducted during the same week(s) as the ADT counts with the appropriate set-up to capture queues. Therefore, once the ADT data is analyzed, the turning movement count videos can be processed immediately to ensure turning movement counts will be representative of the ADT data and provide another layer of quality control. Bike and pedestrian counts will be included in separate columns of traffic count sheets. Consultant understands the impact of the COVID-19 pandemic on traffic volumes, that are not representative of typical conditions, and will apply adjustment factors to the counts if determined as necessary. Subtasks 2.3 and 2.4. Field Investigation and Measurements After receiving City provided documents and files, Consultant team will conduct field work and signal inventory at each intersection to take digital pictures, measure crosswalk distances, applicable grades, and collect intersection phasing and factors that may affect the deployment of signal synchronization. The pedestrian crossing distances and applicable grades will be measured at 54 intersections as identified in Attachment D of RFP. As part of this project, Consultant will recommend the bicycle minimum green in accordance with CA MUTCD Table 4D- 109 (CA) and industry practices. The bicycle turning path will be identified and measured at all 99 intersections using Google Earth and tabulated in an Excel spreadsheet. Subtask 2.5. Field Review Documentation During the field review, Consultant will monitor existing traffic conditions for any corridor issues during the peak periods. Consultant will prepare a technical memorandum that will detail the findings of the field work, summarize all data collected, and identify any low-cost improvements if there is any. Detailed inventory documents will be prepared to ensure City staff will have an appropriate record of existing equipment and infrastructure. Consultant will submit a field review report summarizing the findings. Deliverables • Turning Movement Count Reports • ADT Counts Reports • Field Review Inventory Forms • Field Review Technical Memorandum TASK 3 – SIGNAL TIMING DEVELOPMENT • Subtask 3.1. Model Development & Analysis (99 Locations) The intersection features and traffic data collected in Task 2 will be used to prepare and calibrate a traffic model that encompasses the project roadway network. The traffic models will be developed using Synchro version 10 or 11 per City’s preference. The congestion hotspot data, queuing condition, and other field observations will be used to calibrate and verify the Synchro models, which will serve as the baseline condition for the evaluation of optimization options and common cycle alternatives. Consultant will use a GIS shapefile as the background in Synchro to develop the base roadway configuration. The intersection numbering will be consistent with signal ID to assist production of timing sheets or per City’s preference. Once traffic models have been developed and calibrated, Consultant will develop a concise technical memorandum for Concept of Optimization that assesses all feasible operational patterns for each time. It documents the strategy and the objectives for how traffic will be managed in all direction, considering special traffic generators and congestion hotspots. Special considerations will be given to the before and after conditions of COVID-related traffic changes. Although the primary signal retiming goal is to maximize the number of successive greens for motorists along the primary coordinate band or between adjacent coordinated bands, 2022/04/26 City Council Post Agenda Page 153 of 667 14 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 considerations will be given to all transportation modes to ensure the improvement of both safety and efficiency. Based upon City’s review comments on concept of optimization, Consultant will conduct detailed analysis for common cycle lengths, phasing sequence, and green band/delay optimization. Consultant will develop optimized signal timing plans for each of the intersections along the study corridors. Timing parameters, including cycle lengths, splits, and offsets, will be thoroughly evaluated to produce plans for AM, Midday, PM, and Weekend conditions. The Consultant methodology to optimize a study corridor is shown in the inset to the right. Once City staff approve the existing Synchro files and basic timing parameters, Consultant will first complete the analysis to generate the most efficient grouping and cycle length for each peak. A technical memorandum will be developed to summarize the preliminary recommended signal groupings, traffic progression strategies and cycle lengths, including minimum cycle length requirements based on pedestrian crossing times and other restrictions like at Caltrans signals. Upon the City’s approval of the cycle length recommendations, Consultant will perform a detailed optimization for the corridors for all peaks. This will include the development of the optimal offset values, phasing s equence, and splits. A separate Synchro network with proposed timing recommendations will be developed for each of the peak periods for City review and approval. Cycle length selection is a critical step in developing signal coordination plans. A longer cycle length may provide better progression along the corridors but could increase side street delay and queuing. Consultant has developed a unique iterative methodology to determine ideal cycle lengths for each study intersection. Extensive project studies show this capacity-based methodology provides more accurate results than purely delay-based methodologies adopted by the Highway Capacity Manual and Synchro software. Consultant will use the calculated cycle lengths to develop optimized signal timing plans for all project intersections. TruTraffic will be used to augment the coordination green band on each project corridor. The SimTraffic simulation will then be carefully observed to identify areas needing special operational analysis. Locations noted to have existing cross coordination will be analyzed for split and sequence optimization unless otherwise approved by the City to evaluate whether a different cycle length is recommended. Our vast experience in Chula Vista allows us to provide value-added services and additional solutions. These include the development of school/holiday season timing plans and reviews by in-house traffic responsive/adaptive experts to ensure the optimized plans serve the project goals and objectives for this project. Subtask 3.2. Basic Timing Parameters Prior to conducting any signal timing coordination optimizations, Consultant will first perform vehicle and pedestrian basic timing analysis for all project intersections identified in the scope. The calculation of recommended basic timing parameters will be based upon the data collected from Task 2, the Data Collection Task, and in compliance with the latest version of the California Manual of Uniform Traffic Control Devices (CA MUTCD) and the City’s timing preference. The timing parameters to be reviewed include the following at a minimum: • Minimum Green • Bicycle Minimum Green • Yellow Change Interval • Red Clearance Interval • Pedestrian Walk Time • Pedestrian Clearance (Flash Don’t Walk) Time Subtask 3.3. Adaptive Signal Parameters (28 Locations) Variable and unpredictable traffic volume changes can pose major challenges for traffic signal operation and traffic control systems, especially with the uncertainties of post-COVID conditions. In addition to standard practice in time-based signal coordination, Consultant will conduct the following services to review and optimize the adaptive timings using the City’s existing ATMS.now/SynchroGreen Central System: 2022/04/26 City Council Post Agenda Page 154 of 667 15 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 System Assessment – Prior to the optimization of any system parameters, Consultant will first review and document the existing Intersection Database (timing data that control how SynchroGreen calculates phase allocation/split, period/cycle, and start time/offset), signal grouping and Section Database, adaptive controller status at each of the 28 Trafficware V76 controllers, SynchroGreen settings, and detection alarms or constant error messages if any. Based on system assessment and our past SynchroGreen operation experience, Consultant will identify and propose the finetuning revisions to SynchroGreen settings for City staff’s review which include: • Minimum/Maximum Cycle • Minimum/Maximum Split • Rate of Change • Minimum/Maximum Green Band • Storage Phases Based on City approval, Consultant will implement and verify the optimized settings through ATMS.now and in the field. The figure to the right includes a screenshot of the system settings that Mr. Xu and his team members have set up in one of SynchroGreen adaptive control systems which has been monitored by Consultant since July 2020. Base Plan Implementation – SynchroGreen requires a valid coordination pattern in order to operate. Based on optimized timing plans developed under Task 3.1, Consultant will enter the optimized base plans either using the current pattern numbers or unused pattern slots per City’s preference. The base plans define the cycle, offset, splits and phase sequencing at each signal where SynchroGreen provide adaptive control. The following will be verified during the implementation: • Cycle Length is the same throughout the corridor segments per designed plans • Cycle length and offset are consistent with optimized Synchro models. Make sure the proposed offsets are programed using correct offset reference point, so it touches a phase-ring structure barrier • Assigned splits are valid at intersections with moderate to high pedestrian crossing demands in particular • Testing of adaptive patterns by using Coordination Diagnostic tool Critical Movement Optimization – SynchroGreen allows operator to choose one of the following optimization modes to define overall operation objective and preference for the prevailing traffic patterns or critical turning movements: • Balanced Mode • Progression Mode • Critical Movement Mode By default, SynchroGreen equitably distributes green time based upon arriving traffic demand, while providing reasonable mainline progression bandwidth. Progression mode is typically implemented to favor the traffic flow along the arterials over the side streets. However, Consultant found that Critical Movement Mode should be evaluated at those “hot spots” where certain turning movements are near or at capacity and need to be served with higher priority. Critical Movement Mode can be implemented in conjunction with a separate zone in SynchroGreen to provide special operation under the same adaptive control system. One of the most recently applications Consultant implemented is at an intersection of two major crossing arterials in the Orange County which is in proximity to the freeway ramp signals of SR-57 that are not connected to the city’s SynchroGreen system. Due to the construction of this freeway interchange, traffic operation along crossing arterial became higher priority over corridor progression. Consultant set up separate SynchroGreen zone with critical movement path that helped achieve the queuing management goals between the Caltrans and city’s signals during the construction while maintaining acceptable progression along the corridor. For this project, Consultant will work with the City staff to identify and recommend the locations that are suitable for a better operation under Critical 2022/04/26 City Council Post Agenda Page 155 of 667 16 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 Movement Mode. Based upon the City’s approval, Consultant will assist the City in the implementation and verification of the new operation mode. Subtask 3.4. LPI Timing by Others Coordination (16 Locations) We understand that the LPI will be implemented at 85 intersections within Chula Vista through a separate project to increase the visibility of pedestrians to turning vehicles and subsequently, to reduce conflicts between pedestrians and turning vehicles. As part of previous TRF404 Retiming Project, Consultant programmed LPI intervals in the optimized Synchro models for 69 of these 85 intersections to make sure the implemented coordination cycles are sufficient to accommodate the planned LPI intervals. Consultant also included the LPI analysis in the basic timing optimization and recommended that 5-second LPI for the crosswalks where the peak hour pedestrian volume is higher than 50 per hour and 3 seconds for the other locations with low to moderate crossing demands. Consultant also demonstrated alternative ways of Synchro coding of LPI and applied the one that is not the most convenient but yields the most accurate operational impacts in SimTraffic simulation. For this project, Consultant will use the same LPI modeling and analysis methodologies and further streamline the timing process by using our Signal Timing Data Input/QC Spreadsheet tool to automatically calculate the split/forceoff parameters with the considerations of LPI. Consultant will also assist the City in updating the timing sheets and datafile (if applicable) to include the LPI parameters and finetuning of implemented coordination timing plans. Consultant will submit the timing sheets and datafile and address up to two rounds of review comments. Consultant will be available for any additional round of City review and addressing comments on time-and-material basis. Subtask 3.5. Draft Timing Report and Timing Sheets (99 Locations) Upon the City’s approval of the optimized timing, implementation-ready timing sheets in the City’s preferred format (e.g., Excel, PDF, Synchro printouts, etc.) will be generated to include updated basic timing, coordinated timing changes, updated time-of-day schedules, and updated preemption settings if necessary. Under previous TRF404 Retiming Project, Consultant worked with the City staff to develop and confirm the new format of timing sheets which help expedite the production and review of timing sheets for this project. Deliverables • Basic Timing and Proposed Cycle Length Technical Memorandum • Synchro File for the Existing Conditions • Technical memorandum of System Assessment at SynchroGreen Adaptive Control Signals • Technical memorandum of Timing Implementation at SynchroGreen Adaptive Control Signals • Synchro File for Optimized Timing Plans • Draft and Final Timing Sheets • Response to Comments Matrix TASK 4 – FIELD IMPLEMENTATION AND FINE TUNING (99 LOCATIONS) We consider implementation to be the most critical phase of a signal retiming project. To accommodate such an extensive network, Mr. Xu will lead our implementation team that is staffed with qualified specialists fully trained in signal retiming projects. Consultant separates the act of implementation and fine turning to ensure each intersection is operating as planned prior to any fine-tuning efforts. Consultant staff will implement proposed timing values into the City’s Transparity and ATMS.now central systems for online signals and into field controllers directly for offline signals. This will also be used as an opportunity to evaluate additional parameters, such as pedestrian adjustment intervals under coordination plans. Consultant will provide at least two (2) field team and one (1) central ATMS operator in TMC or through VPN. Each field team consists of one engineer 2022/04/26 City Council Post Agenda Page 156 of 667 17 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 driving along the corridor for coordination finetuning and one signal specialist that stop by each signal to confirm the designed timings have been appropriately implemented and accommodate all turning movements to minimize the changes of civilian complaints. Consultant will develop and submit an Implementation Plan to document the staged procedure of implementation and field finetuning. The Plan will include the review procedure of timing data input through central systems as well as at controllers. The plan should also specify the QC procedure to ensure the consistency between controller timings, central database, and final timing sheets. Deliverables • Timing Implementation and QA/QC Plan • Implementation and Fine-Tuning Technical Memo TASK 5 – POST IMPLEMENTATION Subtask 5.1. Post Implementation Comment Review Following implementation of the coordination plans, Consultant will initiate a Post Implementation Meeting with City staff to present implementation results and discuss any concerns and remaining task items. Based upon the acceptance of implemented timing plans, Consultant will provide continual monitoring services for up to three (3) months to address the comments received from City staff or citizens and conduct finetuning and field verification to ensure optimum signal operation for all roadway users. Subtask 5.2. Final Timing Sheets and Final Signal Timing Reports Upon completion of the field fine-tuning and resolution of all comments, Consultant will revise the timing values and deliver updated final timing sheets, reflecting the final signal timing i mplemented at all project locations. Consultant will update the timing sheet in each cabinet and provide the City with an additional hard copy and an electronic version as records. Subtask 5.3. Final Synchro File In addition, Consultant will provide final Synchro files reflecting the final signal timing implemented at all project locations, to the satisfaction of the City engineer. Deliverables • Post Implementation Meeting • Response to Comments Matrix • Final Timing Sheets • Final Synchro Files • Final Checklist of Finetuning Timing Plans • Updated USB datafiles TASK 6 – BEFORE AND AFTER TRAFFIC STUDY Instead of tradition travel time studies, Consultant will use Consultant ClearGuide, the data analytics system, to conduct a travel time comparison “before” and “after” the implementation of new timing plans along four(4) key corridors per the discussion with City staff for up to 64 directional arterial miles. The following additional services will be included: • Real-time travel time and speed data and graphical charts for 18 months • Arterial performance quarterly report for predefined corridors for 18 months Additionally, Consultant will perform a travel time “before” study using Tru-Traffic 10.0 software, a GPS unit, and the floating car method along Telegraph Canyon Road/Otay Lakes Road between I-805 in the west and 2022/04/26 City Council Post Agenda Page 157 of 667 18 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 Eastlake Parkway in the east. A minimum of five (5) runs will be conducted in each direction to obtain a statistically valid estimation for the weekday AM and PM peaks. The travel time studies will be conducted before and after the implementation of proposed timing plans. Measures of effectiveness (MOE) will be compiled from Tru-Traffic field data as supplementary to the ClearGuide studies. During the “before” and “after” floating car runs, Consultant will collect the travel time videos along Telegraph Canyon Road/Otay Lakes Road corridor to illustrate the operational improvement along peak direction. Two (2) video clips will then be processed to depict the project results through an easy to understand before-and-after study tool that can be shared with management, officials and the public via the City’s website demonstrating the effectiveness of signal synchronization. Consultant will then submit a Final Report to document project background, signal modeling and synchronization, project benefits, travel time before and after comparison with reference to the MOE elements and a cost -benefit analysis, potential low-cost improvements, and findings. To assist the presentation to the public, a two-page Fact Sheet will also be submitted to present a summary of this project, statistical comparison, and informational graphics. Deliverables • Draft and Final Project Report and a Project Fact Sheet • Quarterly Monitoring Technical Memorandum • Before and after study Tru-Traffic Files • Before and after study Comparison Video Clips TASK 7 – ADDED VALUE SERVICE Subtask 7.1. Additional Signals Consultant team’s past signal synchronization experience and knowledge of Chula Vista signal timing practice enable more efficient development and implementation of optimized timing plans. This allows us to include signal retiming at additional signals without extra cost. Consultant proposes to include the following intersections in the signal retiming study of this project: • H Street and I-805 NB and SB ramps • H Street from 4th Avenue to Hilltop if different cycle lengths are determined to synchronize the signals at I-805 ramps and to address the bottleneck at H Street and Hilltop Drive • E Street and I-805 NB and SB ramps • L Street and Nacion Avenue In addition, Consultant is committed to evaluating school traffic conditions and developing separate timing plans for impacted intersections. As part of this scope of work Consultant will evaluate the impacts from school traffic and provide special timing plans for the impacted intersections during school hours. Based on the preliminary review, it is anticipated to be required at eight (8) locations within the project area. 3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin on the “Effective Date” and end on June 1, 2023 for completion of all Required Services. 4. Compensation: A. Form of Compensation ☒ Time and Materials. For performance of the Required Services by Contractor/Service Provider as identified in Section 2.B., above, City shall pay Contractor/Service Provider for the productive hours of time spent by 2022/04/26 City Council Post Agenda Page 158 of 667 19 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 Contractor/Service Provider in the performance of the Required Services, at the rates or amounts as indicated below and as detailed and quantified in Exhibit A1: Iteris (Consultant per hour) Project Manager - $255 Principal-in-Charge - $323 Senior Advisor and QA/QC - $330 Task Lead/Senior Engineer - $230 Project Engineer - $175 Associate Engineer - $130 Assistant Engineer/Admin - $110 Lin Consulting (Subconsultant per hour) Principal QA/QC - $210 Senior Project Engineer - $200 Transportation Engineer - $140 AimTD (Subconsultant Lump Sum) Task 2.1 Turning Movement Counts (72 Locations) - $24,723 Task 2.2. Average Daily Counts (20 Locations) - $2,520 B. Reimbursement of Costs ☒ None, the compensation includes all costs Notwithstanding the foregoing, the maximum amount to be paid to the Consultant for services performed through June 1, 2023 shall not exceed $355,729.00 . 5. Special Provisions: ☒ Permitted Sub-Consultants: LIN Consulting, Inc. and AimTD, LLC. ☒ Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for one (1) additional terms, defined as a one-year increment or end on June 1, 2024. The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on behalf of the City. 2022/04/26 City Council Post Agenda Page 159 of 667 20 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 EXHIBIT A1 INSERT COST BREAKDOWN BY TASK 2022/04/26 City Council Post Agenda Page 160 of 667 21 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 EXHIBIT B INSURANCE REQUIREMENTS Consultant shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x). Type of Insurance Minimum Amount Form ☒ General Liability: Including products and completed operations, personal and advertising injury $2,000,000 per occurrence for bodily injury, personal injury (including death), and property damage. If Commercial General Liability insurance with a general aggregate limit is used, either the general aggregate limit must apply separately to this Agreement or the general aggregate limit must be twice the required occurrence limit Additional Insured Endorsement or Blanket AI Endorsement for City* Waiver of Recovery Endorsement Insurance Services Office Form CG 00 01 *Must be primary and must not exclude Products/Completed Operations ☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and property damage Insurance Services Office Form CA 00 01 Code 1-Any Auto Code 8-Hired Code 9-Non Owned ☒ Workers’ Compensation Employer’s Liability $1,000,000 each accident $1,000,000 disease policy limit $1,000,000 disease each employee Waiver of Recovery Endorsement ☒ Professional Liability (Errors & Omissions) $1,000,000 each occurrence $2,000,000 aggregate Other Negotiated Insurance Terms: NONE 2022/04/26 City Council Post Agenda Page 161 of 667 22 City of Chula Vista Agreement No.: 2022-022 Consultant Name: ITERIS, INC. Rev. 9/15/20 EXHIBIT C CONSULTANT CONFLICT OF INTEREST DESIGNATION The Political Reform Act1 and the Chula Vista Conflict of Interest Code2 (“Code”) require designated state and local government officials, including some consultants, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, consultants designated to file the Form 700 are also required to comply with certain ethics training requirements.3 ☒ A. Consultant IS a corporation or limited liability company and is therefore EXCLUDED4 from disclosure. ☐ B. Consultant NOT a corporation or limited liability company and disclosure designation is as follows: APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at .) Name Email Address Applicable Designation Enter Name of Each Individual Who Will Be Providing Service Under the Contract – If individuals have different disclosure requirements, duplicate this row and complete separately for each individual Enter email address(es) ☐ A. Full Disclosure ☐ B. Limited Disclosure (select one or more of the categories under which the consultant shall file): ☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7. Justification: ☐ C. Excluded from Disclosure 1. Required Filers Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Consultant,” pursuant to FPPC Regulation 18700.3, must file a Form 700. 2. Required Filing Deadlines Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement. 3. Filing Designation The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Consultant will provide. Notwithstanding this designation or anything in the Agreement, the Consultant is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2. Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the consultant’s requirement to comply with the disclosure requirements set forth in the Code. Completed by: Jerard Madrigal 1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040. 3 Cal. Gov. Code §§53234, et seq. 4 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not incl ude corporation or limited liability compan y). 2022/04/26 City Council Post Agenda Page 162 of 667 C:\Program Files\eSCRIBE\TEMP\16232192020\16232192020,,,Resolution - 22-0107.docx RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY AND ITERIS, INC. TO PROVIDE TRAFFIC SIGNAL RETIMING SERVICES WHEREAS, the City of Chula Vista Improvement Program (“CIP”) Project TRF0400 (the “Project”) requires professional engineering services for the retiming of 99 traffic signal locations in eastern Chula Vista; and WHEREAS, in order to procure these services, staff solicited proposals in accordance with Chula Vista Municipal Code Section 2.56.110 for “professional services” and advertised on December 10, 2021 a Request for Proposals; and WHEREAS, staff received five (5) proposals on January 19, 2022 and selected Iteris, Inc. as the most qualified among the proposers submitting; and WHEREAS, staff recommends award of a contract to Iteris, Inc.to provide services required for the development and implementation of signal timing at each project location, which includes project coordination, field data collection, traffic controller and central programming, documentation, model development, and traffic study. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it approves the City of Chula Vista Consultant Services Agreement with Iteris, Inc. to Provide Professional Services for Traffic Signal Retiming of 99 Locations (CIP Project No. TRF0400), in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes and directs the Mayor to execute same. Presented by William S. Valle Director of Engineering & Capital Projects/City Engineer Approved as to form by Glen R. Googins City Attorney 2022/04/26 City Council Post Agenda Page 163 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Agreement and Reallocation: Amend the American Rescue Plan Act Spending Plan, Authorize an Amendment and Subrecipient Agreement with SBCS for the Domestic Violence Program, and Reallocate Funds for that Purpose Report Number: 22-0116 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Notwithstanding the foregoing, the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the CEQA State Guidelines. Recommended Action Approve a resolution (1) amending the American Rescue Plan Act (“ARPA”) Spending Plan; (2) approving a subrecipient agreement with the SBCS Domestic Violence Program ; and (3) reallocating funds for that purpose. SUMMARY On May 10, 2021, the U.S. Department of the Treasury announced the launch of the Coronavirus State and Local Fiscal Recovery Funds (“SLFRF”), established by the ARPA of 2021, to provide $350 billion in emergency funding for eligible state, local, territorial, and Tribal governments. The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each jurisdiction to meet local needs: including support for households, small businesses, impacted industries, essential workers, and the communities hardest hit by the crisis. On August 24, 2021, the City Council approved the appropriation of $28.76 million from the ARPA funds, including an appropriation of $14 million from the ARPA account into Governmental Funds and the addition of 10.0 positions to the General Fund. This item seeks to amend the Spending Plan by reallocating $200,000 from the Revenue Recovery Category to the Public Health Category, more specifically, delivering assistance to victims of domestic violence and 2022/04/26 City Council Post Agenda Page 164 of 667 P a g e | 2 authorizing a $200,000 Subrecipient Agreement with the SBCS Corporation’s (“SBCS”) Domestic Violence Program. ENVIRONMENTAL REVIEW The proposed activity has been reviewed for compliance with CEQA and it has been determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)3) of the State CEQA Guidelines, the activity is not subject to CEQA. Although environmental review is not required at this time, once the scope of potential project(s) has been defined, environmental review will be required for each project and the appropriate environmental determination will be made. Notwithstanding the foregoing, it has also been determined that the activity qualifies for an Exemption pursuant to Section 15061(b)(3) of the California Environmental Quality Act State Guidelines. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION ARPA established the SLFRF to assist governments to bolster their response to the COVID-19 pandemic and its economic impacts by setting the following goals:  Support urgent COVID-19 response efforts to continue to decrease spread of the virus and bring the pandemic under control.  Replace lost public sector revenue to strengthen support for vital public services and help retain jobs.  Support immediate economic stabilization for households and businesses.  Address systemic public health and economic challenges that have contributed to the inequal impact of the pandemic on certain populations. With the launch of the SLFRF, the Treasury released further details on how these funds can be used to respond to acute pandemic response needs, fill revenue shortfalls among these governments, and support the communities and populations hardest-hit by the COVID-19 pandemic. Eligible jurisdictions have been able to access this funding to address immediate pandemic response needs, such as: basic emergency needs, bringing back jobs, and laying the groundwork for a strong and equitable recovery. These funds present a significant opportunity for our community to meaningfully address the pandemic’s disproportionate toll on people of color, people with disabilities, immigrant communities, low-income households, and other historically marginalized groups, including the homeless population. On August 21, 2021, City Council approved the formal Spending Plan in the amount of $28.7 million which represented the first round of ARPA funds received in May 2021. Subsequent to the initial allocation, three Spending Plan Amendments have been approved as critical needs increase and are identified in response to the pandemic. The Amendments include:  Amendment No. 1: Jacobs and Cushman San Diego Food Bank allocation of $100,000 to provide food distribution services. 2022/04/26 City Council Post Agenda Page 165 of 667 P a g e | 3  Amendment No. 2: Alpha Project, Take Back the Streets, allocation of $100,000 to provide job training and placement to previously homeless individuals.  Amendment No. 3: Homeless Supportive Services allocation in the amount of $100,000 to support the City’s Homeless Outreach Team to provide a continuum of services for homeless, at risk and low-income households. This proposed Amendment No. 4, would provide $200,000 of ARPA funds and approve an associated Agreement with SBCS Domestic Violence Program (the “Program”) to continue providing therapeutic counseling and crisis intervention services to adult and children victims of family violence . The table below reflects the new proposed allocation of ARPA funds. The Program provides a Domestic Violence Response Team (“DVRT”) for emergency responses via a 24-hour assistance hotline with access to:  Emergency shelters;  Strengths-based Assessments and Safety Planning for victims and their children;  Individual counseling and group/family counseling;  Unique therapeutic pre-school (Mi Escuelita); and  On-going case management and support for victims. Category FY 2022 FY 2023 Total Revenue Recovery 32,000,000$ Governmental Funds 13,800,000$ 18,200,000$ ** Public Health 19,935,250$ HVAC (GGV0261)9,000,000$ 9,500,000$ COVID Testing/Vaccinations 667,625$ 567,625$ SBCS Domestic Violence Services 200,000$ * Negative Economic Impacts 300,000$ Jacobs and Cushman San Diego Food Bank 100,000$ -$ Alpha Project - Take Back the Streets 100,000$ Homeless Supportive Services 100,000$ Premium Pay to Essential Workers 1,000,000$ 500,000$ 1,500,000$ Economic Development 2,900,000$ Small Business Grants 2,600,000$ -$ Choose Chula 100,000$ -$ Curb/Sidewalk Café Grant 200,000$ -$ Infrastructure 900,000$ Broadband Design (GGV0263)900,000$ -$ TOTAL 28,767,625$ 28,767,625$ 57,535,250$ ARPA Funding Recommendation * Public Health: New Program Allocation of $200,000 **Revenue Recovery/Economic Development: Reduction to University Innovation Center/Recruitment from $550,000 to $350,000 2022/04/26 City Council Post Agenda Page 166 of 667 P a g e | 4 The DVRT serves as the entry point for many victims to get the assistance they need to re-build safe, stable, and healthy lives for themselves and their children. All clients also have access to SBCS’ other programs including emergency and transitional housing, financial self-sufficiency services, and/or job development. The ARPA funds will assist SBCS to maintain and respond to a greater volume of calls, which has increased significantly since the start of the pandemic. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current year fiscal impact to the General Fund as a result of this action. All costs associated with the program are covered by available ARPA funds. Approval of the resolution reallocates $200,000 in ARPA funds that have been previously appropriated. ONGOING FISCAL IMPACT There is no ongoing fiscal impact to the General Fund as a result of this action. All costs associated with the program are covered by available ARPA funds. ATTACHMENTS 1. Subrecipient Agreement – SBCS Domestic Violence Program Staff Contact: Angélica Davis, Senior Management Analyst Tiffany Allen, Director of Development Services 2022/04/26 City Council Post Agenda Page 167 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA (1) APPROVING A FOURTH AMENDMENT TO THE AMERICAN RESCUE PLAN ACT SPENDING PLAN AND AUTHORIZING THE CITY MANAGER, AS SET FORTH IN THIS RESOLUTION, TO EXECUTE ANY REQUIRED DOCUMENTS OR AGREEMENTS WHICH MAY BE NECESSARY TO IMPLEMENT SAID AMENDMENT, (2) AUTHORIZING THE CITY MANAGER OR DESIGNEE TO EXECUTE AN AGREEMENT WITH SBCS CORPORATION FOR THE DOMESTIC VIOLENCE SERVICES PROGRAM, AND (3) REALLOCATING FUNDS THEREFOR WHEREAS, on March 11, 2021, the United States Congress passed the American Rescue Plan Act of 2021 (“ARPA”) – CDFA 21.027, which provides fiscal relief funds to State and Local Governments, and other program areas aimed at mitigating the continuing effects of the COVID-19 Pandemic; and WHEREAS, ARPA is intended to provide support to local governments in responding to the impact of COVID-19 and in their efforts to contain COVID-19 in their communities, residents, and businesses; and WHEREAS, ARPA includes State and Local Fiscal Recovery Funds to support urgent COVID response efforts to decrease the spread of the virus; to replace lost public sector revenue to strengthen support for vital public services; to support immediate economic stabilization for households and businesses; and to address systemic public health and economic challenges that have contributed to inequal impacts of the pandemic on certain populations; and WHEREAS, the United States Department of Treasury has adopted the interim final rule as guidance regarding the use of ARPA Funds; and WHEREAS, the City of Chula Vista will receive $57,535,251 in two tranches with $28,767,625 provided in May 2021 and the remaining $28,767,625 to be received twelve months later; and WHEREAS, the City Council intends to expend a portion of the first tranche of the City’s ARPA Funds in accordance with Federal Law and guidance, for the current critical needs and priorities including services to victims of domestic violence; and WHEREAS, Staff has determined that SBCS Corporation (“SBCS”) is experienced and staffed in a manner such that they can prepare and deliver the services required by the City; and WHEREAS, SBCS through their Domestic Violence Program will continue to provide 2022/04/26 City Council Post Agenda Page 168 of 667 therapeutic counseling and crisis intervention services to adult and children victims of family violence including those impacted due to the pandemic; and WHEREAS, in order for an outside agency or City Department to receive and operate a federally funded activity, they must formally enter into a Subrecipient Agreement. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula Vista that it hereby amends The American Rescue Plan Act Spending Plan and reallocates funds within the American Rescue Plan Act 2021 Fund (Fund 268) as follows: Revenue Recovery: Governmental Funds ($200,000) Public Health: Domestic Violence Program $200,000 BE IT FURTHER RESOLVED that City Council authorizes the City Manager or designee to execute any required documents or agreements necessary to implement said amendment and a Subrecipient Agreement with SBCS Corporation in the amount of $200,000 for the Domestic Violence Program. Presented by Approved as to form by ____________________________ _______________________________ Tiffany Allen Glen R. Googins Director of Development Services City Attorney 2022/04/26 City Council Post Agenda Page 169 of 667 1 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 CITY OF CHULA VISTA CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT WITH SBCS DOMESTIC VIOLENCE PROGRAM TO PROVIDE DOMESTIC VIOLENCE VICTIM SERVICES DUE TO THE PUBLIC HEALTH EMERGENCY WITH RESPECT TO THE CORONAVIRUS DISEASE 2019 (COVID-19) This Agreement is entered into effective as of April 26, 2022 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“City”) and SBCS Domestic Violence Program, a California non- profit corporation (“Contractor/Service Provider”) (collectively, the “Parties” and, individually, a “Party”) with reference to the following facts: RECITALS WHEREAS, on March 11, 2021, the United States Congress passed the American Rescue Plan Act of 2021 (ARPA), which provides fiscal relief funds to State and Local Governments, and other program areas aimed at mitigating the continuing effects of the COVID-19 Pandemic; and,; and, WHEREAS, ARPA is intended to provide support to local governments in responding to the impact of COVID-19 and in their efforts to contain COVID-19 in their communities, residents, and businesses; and, WHEREAS, ARPA includes State and Local Fiscal Recovery Funds to support urgent COVID response efforts to decrease the spread of the virus; to replace lost public sector revenue to strengthen support for vital public services; to support immediate economic stabilization for households and businesses; and to address systemic public health and economic challenges that have contributed to inequal impacts of the pandemic on certain populations; and, WHEREAS, the City of Chula Vista will receive $57,535,251 in two tranches with $28,767,625 provided in May 2021 and the remaining $28,767,625 to be received twelve months later; and, WHEREAS, the City Council intends to expend a portion of the first tranche of the City’s ARPA Funds in accordance with Federal Law and guidance, for the current critical needs and priorities including the provision of food services; and, WHEREAS, the Catalog of Federal Domestic Assistance Number for the ARPA is 21.027; and, WHEREAS, City is in need of a service provider to administer its Domestic Violence program (including, but not limited to, therapeutic counseling and crisis intervention) on the City’s behalf; and, WHEREAS, Contractor/Service Provider is duly licensed and/or has the necessary qualifications to provide such services for the Project; and, WHEREAS, The Parties desire to establish the terms for the City to retain the Contractor/Service Provider in order to provide the services described herein; and, WHEREAS, Contractor/Service Provider warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Contractor/Service Provider to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] 2022/04/26 City Council Post Agenda Page 170 of 667 2 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 OBLIGATORY PROVISIONS NOW, THEREFORE, in consideration of the above recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and Contractor/Service Provider hereby agree as follows: 1. SERVICES 1.1 Required Services. Contractor/Service Provider agrees to perform the services, and deliver to City the “Deliverables” (if any) described in the attached Exhibit A, incorporated into the Agreement by this reference, within the time frames set forth therein, time being of the essence for this Agreement. The services and/or Deliverables described in Exhibit A shall be referred to herein as the “Required Services.” 1.2 Reductions in Scope of Work. City may independently, or upon request from Contractor/Service Provider, from time to time, reduce the Required Services to be performed by the Contractor/Service Provider under this Agreement. Upon doing so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating a corresponding reduction in the compensation associated with the reduction. 1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinances governing procurement and purchasing authority, City may request Contractor/Service Provider provide additional services related to the Required Services (“Additional Services”). If so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistent with the rates and terms already provided therein. Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this Agreement. 1.4 Standard of Care. Contractor/Service Provider expressly warrants and agrees that any and all Required Services hereunder shall be performed in accordance with the highest standard of care exercised by members of the profession currently practicing under similar conditions and in similar locations. 1.5 No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Contractor/Service Provider of responsibility for complying with all laws, codes, industry standards, and liabilit y for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Contractor/Service Provider or its subcontractors. 1.6 Security for Performance. In the event that Exhibit A Section 4 indicates the need for Contractor/Service Provider to provide additional security for performance of its duties under this Agreement, Contractor/Service Provider shall provide such additional security prior to commencement of its Required Services in the form and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney. 1.7 Compliance with Laws. In its performance of the Required Services, Contractor/Service Provider shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal Code. 2022/04/26 City Council Post Agenda Page 171 of 667 3 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 1.8 Business License. Prior to commencement of work, Contractor/Service Provider shall obtain a business license from City. 1.9 Subcontractors. Prior to commencement of any work, Contractor/Service Provider shall submit for City’s information and approval a list of any and all subcontractors to be used by Contractor/Service Provider in the performance of the Required Services. Contractor/Service Provider agrees to take appropriate measures necessary to ensure that all subcontractors and personnel utilized by the Contractor/Service Provider to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Contractor/Service Provider under this Agreement, Contractor/Service Provider shall ensure that each and every subcontractor carries out the Contractor/Service Provider’s responsibilities as set forth in this Agreement. 1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Date or Contractor/Service Provider’s commencement of the Required Services hereunder, and shall terminate when the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly survive termination shall remain in effect. 2. COMPENSATION 2.1 General. For satisfactory performance of the Required Services, City agrees to compensate Contractor/Service Provider in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2. 2.2 Detailed Invoicing. Contractor/Service Provider agrees to provide City with a detailed invoice for services performed each month, within thirty (30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All charges must be presented in a lineitem format with each task separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed, the amount invoiced to date, and the remaining amount available under any approved budget. Contractor/Service Provider must obtain prior written authorization from City for any fees or expenses that exceed the estimated budget. 2.3 Payment to Contractor/Service Provider. Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall pay Contractor/Service Provider for the invoice amount within thirty (30) days. Payment shall be made in accordance with the terms and conditions set forth in Exhibit A and section 2.4, below. At City’s discretion, invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced. 2.4 Retention Policy. City shall retain ten percent (10%) of the amount due for Required Services detailed on each invoice (the “holdback amount”). Upon City review and determination of Project Completion, the holdback amount will be issued to Contractor/Service Provider. 2.5 Reimbursement of Costs. City may reimburse Contractor/Service Provider’s out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services if negotiated in advance and included in Exhibit A. Unless specifically provided in Exhibit A, Contractor/Service Provider shall be responsible for any and all out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services. 2022/04/26 City Council Post Agenda Page 172 of 667 4 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 2.6 Exclusions. City shall not be responsible for payment to Contractor/Service Provider for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of Contractor/Service Provider, its agents, employees, or subcontractors. 2.7 Payment Not Final Approval. Contractor/Service Provider understands and agrees that payment to the Contractor/Service Provider or reimbursement for any Contractor/Service Provider costs related to the performance of Required Services does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver of any violation by Contractor/Service Provider of the terms of this Agreement. If City determines that Contractor/Service Provider is not entitled to receive any amount of compensation already paid, City will notify Contractor/Service Provider in writing and Contractor/Service Provider shall promptly return such amount. 3. INSURANCE 3.1 Required Insurance. Contractor/Service Provider must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreement by this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section. 3.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the Required Insurance must be disclosed to and approved by City in advance of the commencement of work. 3.3 Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers’ Compensation Insurance, insurance issued by the State Compensation Fund is also acceptable. 3.4 Subcontractors. Contractor/Service Provider must include all sub-Contractor/Service Providers/sub- contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating separate coverage for those not under its policies. Any separate coverage for sub-Contractor/Service Providers must also comply with the terms of this Agreement. 3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified as required in Exhibit B or as may otherwise be specified by City’s Risk Manager.. The general liability additional insured coverage must be provided in the form of an endorsement to the Contractor/Service Provider’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude Products/Completed Operations coverage. 3.6 General Liability Coverage to be “Primary.” Contractor/Service Provider’s general liability coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is 2022/04/26 City Council Post Agenda Page 173 of 667 5 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 wholly separate from the insurance provided by Contractor/Service Provider and in no way relieves Contractor/Service Provider from its responsibility to provide insurance. 3.7 No Cancellation. No Required Insurance policy may be canceled by either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Contractor/Service Provider must procure and put into effect equivalent coverage(s). 3.8 Waiver of Subrogation. Contractor/Service Provider’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurance policy under this Agreement. In addition, Contractor/Service Provider waives any right it may have or may obtain to subrogation for a claim against City. 3.9 Verification of Coverage. Prior to commencement of any work, Contractor/Service Provider shall furnish City with original certificates of insurance and any amendatory endorsements necessary to demonstrate to City that Contractor/Service Provider has obtained the Required Insurance in compliance with the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims-made form, the following requirements also apply: a. The “Retro Date” must be shown and must be before the date of this Agreement or the beginning of the work required by this Agreement. b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Contractor/Service Provider must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review. 3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Contractor/Service Provider’s obligations under this Agreement, including Indemnity. 3.12 Additional Coverage. To the extent that insurance coverage provided by Contractor/Service Provider maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained. 2022/04/26 City Council Post Agenda Page 174 of 667 6 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 4. INDEMNIFICATION 4.1. General. To the maximum extent allowed by law, Contractor/Service Provider shall protect, defend, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Contractor/Service Provider, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Contractor/Service Provider, its employees, agents or officers, or any third party. 4.2. Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defined by California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8. 4.3 Costs of Defense and Award. Included in Contractor/Service Provider’s obligations under this Section 4 is Contractor/Service Provider’s obligation to defend, at Contractor/Service Provider’s own cost, expense and risk, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Contractor/Service Provider shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any and all related legal expenses and costs incurred by any of them. 4.4. Contractor/Service Provider’s Obligations Not Limited or Modified. Contractor/Service Provider’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Contractor/Service Provider. Furthermore, Contractor/Service Provider’s obligations under this Section 4 shall in no way limit, modify or excuse any of Contractor/Service Provider’s other obligations or duties under this Agreement. 4.5. Enforcement Costs. Contractor/Service Provider agrees to pay any and all costs City incurs in enforcing Contractor/Service Provider’s obligations under this Section 4. 4.6 Survival. Contractor/Service Provider’s obligations under this Section 4 shall survive the termination of this Agreement. 5. FINANCIAL INTERESTS OF CONTRACTOR/SERVICE PROVIDER. 5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and Contractor/Service Providers performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700). In order to assure compliance with these requirements, Contractor/Service Provider shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference. 2022/04/26 City Council Post Agenda Page 175 of 667 7 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 5.2 Disclosures; Prohibited Interests. Independent of whether Contractor/Service Provider is required to file a Form 700, Contractor/Service Provider warrants and represents that it has disclosed to City any economic interests held by Contractor/Service Provider, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Contractor/Service Provider warrants and represents that it has not employed or retained any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, to solicit or secure this Agreement. Further, Contractor/Service Provider warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Contractor/Service Provider further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Contractor/Service Provider or Contractor/Service Provider’s subcontractors. Contractor/Service Provider further agrees to notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability. 6. REMEDIES 6.1 Termination for Cause. If for any reason whatsoever Contractor/Service Provider shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Contractor/Service Provider shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving five (5) days written notice to Contractor/Service Provider. Such notice shall identify the Default and the Agreement termination date. If Contractor/Service Provider notifies City of its intent to cure such Default prior to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City may grant Contractor/Service Provider up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Contractor/Service Provider shall immediately provide City any and all” Work Product” (defined in Section 7 below) prepared by Contractor/Service Provider as part of the Required Services. Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Contractor/Service Provider may be entitled to compensation for work satisfactorily performed prior to Contractor/Service Provider’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default. 6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Contractor/Service Provider of such termination or suspension at least fifteen (15) days prior to the effective date thereof. Upon receipt of such notice, Contractor/Service Provider shall immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof. Contractor/Service Provider shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement. 2022/04/26 City Council Post Agenda Page 176 of 667 8 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 6.3 Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this Section, Contractor/Service Provider hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6. 6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Contractor/Service Provider shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 6.5 Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in San Diego County, State of California. 6.6 Service of Process. Contractor/Service Provider agrees that it is subject to personal jurisdiction in California. If Contractor/Service Provider is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Contractor/Service Provider irrevocably consents to service of process on Contractor/Service Provider by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing. 7. OWNERSHIP AND USE OF WORK PRODUCT All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance of the Required Services (collectivel y “Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Contractor/Service Provider in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Contractor/Service Provider, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Contractor/Service Provider shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 8. GENERAL PROVISIONS 8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties. 8.2 Assignment. City would not have entered into this Agreement but for Contractor/Service Provider’s unique qualifications and traits. Contractor/Service Provider shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion. 2022/04/26 City Council Post Agenda Page 177 of 667 9 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 8.3 Authority. The person(s) executing this Agreement for Contractor/Service Provider warrants and represents that they have the authority to execute same on behalf of Contractor/Service Provider and to bind Contractor/Service Provider to its obligations hereunder without any further action or direction from Contractor/Service Provider or any board, principle or officer thereof. 8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart. 8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. 8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Contractor/Service Provider agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the performance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of sub-contractors/sub-Contractor/Service Providers. 8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the Parties. 8.8 Independent Contractor. Contractor/Service Provider is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall have control over the conduct of Contractor/Service Provider or any of Contractor/Service Provider’s officers, employees, or agents (“Contractor/Service Provider Related Individuals”), except as set forth in this Agreement. No Contractor/Service Provider Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or any other payroll tax with respect to any Contractor/Service Provider Related Individuals; instead, Contractor/Service Provider shall be solely responsible for the payment of same and shall hold the City harmless with respe ct to same. Contractor/Service Provider shall not at any time or in any manner represent that it or any of its Contractor/Service Provider Related Individuals are employees or agents of City. Contractor/Service Provider shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner. 8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party shall be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addr esses identified in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing. (End of page. Next page is signature page.) 2022/04/26 City Council Post Agenda Page 178 of 667 10 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 SIGNATURE PAGE CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Contractor/Service Provider agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the Effective Date. SBCS DOMESTIC VIOLENCE PROGRAM CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ KATHRYN LEMBO MARIA V. KACHADOORIAN EXECUTIVE DIRECTOR CITY MANAGER APPROVED AS TO FORM BY: ________________________________ Glen R. Googins City Attorney 2022/04/26 City Council Post Agenda Page 179 of 667 11 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 EXHIBIT A SCOPE OF WORK AND PAYMENT TERMS 1. Contact People for Contract Administration and Legal Notice A. City Contract Administration: Angelica Davis, Senior Management Analyst 276 4th Avenue, Bldg C. Chula Vista, CA 91910 619-691-5036 adavis@chulavistaca.gov For Legal Notice Copy to: City of Chula Vista City Attorney 276 Fourth Avenue, Chula Vista, CA 91910 619-691-5037 CityAttorney@chulavistaca.gov B. Contractor/Service Provider Contract Administration: SBCS DOMESTIC VIOLENCE PROGRAM 430 F St, Chula Vista, CA 91910 (619) 420-3620 Vbrew@csbcs.org For Legal Notice Copy to: Same as above 2. Required Services A. General Description: As a partner to the Law Enforcement Specialized Units Program, SBCS will continue to operate the Domestic Violence Response Team (DVRT), and staff bilingual, Domestic Violence Advocates and DVRT Associates, co-located at the Chula Vista Police Department (CVPD), who will provide 24 hour/7 day officer accompaniment/response to Domestic Violence (DV) calls for service (DVRT); conduct outreach and referral, and provide resources and support for DV victims and their children (including assistance with emergency food, clothing and shelter); assist with the development and provision of training for CVPD officers/investigators relative to the unique needs of DV victims; assist with the review and revision of officer/investigator and advocate protocols; and each advocate will serve as the agency’s point of contact for the program and with the police department to ensure interagency accountability. SBCS is a DV service provider with nearly 50 years’ experience working with victims within the Chula Vista community. In addition to operating the DVRT, SBCS also provides regular roll-call training for all CVPD officers working in the DV/Child Protection Unit. These training topics cover DV basics including power and control, the dominant aggressor, and crime scene investigation. As needs arise, additional training is provided. In the past, SBCS has conducted trainings around the increased lethality of DV cases, as well as trauma -informed care. Recently, all sworn CVPD personnel received updated training on investigating domestic violence related 2022/04/26 City Council Post Agenda Page 180 of 667 12 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 strangulations. This training was facilitated by the District Attorney's office; and CVPD helped write the curriculum which is being used throughout the entire County of San Diego. Finally, the SBCS Domestic Violence Program will also provide therapeutic counseling and crisis intervention services to adult and children victims of family violence in the City of Chula Vista B. Detailed Description: Contractor/Service Provider shall follow the same certifications as the City when it comes to the use of Coronavirus Relief Funds from the CARES Act. Contractor/Service Provider shall perform the following tasks: Task Description Deliverables Completion Date 1 The SBCS Domestic Violence Program will provide therapeutic counseling and crisis intervention services to adult and children victims of family violence in the City of Chula Vista April 26, 2023 3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin April 26, 2022 and end on April 26, 2023 for completion of all Required Services. 4. Compensation: A. Form of Compensation For the performance of the Required Services to City’s satisfaction, City shall pay Contractor/Service Provider up to $200,000 for staffing, benefits, supplies, equipment and indirect costs expended by April 26, 2023, as detailed on Attachment D. Contractor/Service Provider shall invoice City for such costs and services. Notwithstanding the foregoing, the maximum amount to be paid to the Contractor/Service Provider for costs and services performed through April 26, 2023 shall not exceed $200,000. 5. Special Provisions: INSTRUCTIONS. ☒ None 2022/04/26 City Council Post Agenda Page 181 of 667 13 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 EXHIBIT B INSURANCE REQUIREMENTS Contractor/Service Provider shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x). Type of Insurance Minimum Amount Form ☒ General Liability: Including products and completed operations, personal and advertising injury $2,000,000 per occurrence for bodily injury, personal injury (including death), and property damage. If Commercial General Liability insurance with a general aggregate limit is used, either the general aggregate limit must apply separately to this Agreement or the general aggregate limit must be twice the required occurrence limit Additional Insured Endorsement or Blanket AI Endorsement for City* Waiver of Recovery Endorsement Insurance Services Office Form CG 00 01 *Must be primary and must not exclude Products/Completed Operations ☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and property damage Insurance Services Office Form CA 00 01 Code 1-Any Auto Code 8-Hired Code 9-Non Owned ☒ Workers’ Compensation Employer’s Liability $1,000,000 each accident $1,000,000 disease policy limit $1,000,000 disease each employee Waiver of Recovery Endorsement Other Negotiated Insurance Terms: None. 2022/04/26 City Council Post Agenda Page 182 of 667 14 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 EXHIBIT C CONTRACTOR/SERVICE PROVIDER CONFLICT OF INTEREST DESIGNATION The Political Reform Act1 and the Chula Vista Conflict of Interest Code2 (“Code”) require designated state and local government officials, including some Contractor/Service Providers, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, Contractor/Service Providers designated to file the Form 700 are also required to comply with certain ethics training requirements.3 ☒ A. Contractor/Service Provider IS a corporation or limited liability company and is therefore EXCLUDED4 from disclosure. ☐ B. Contractor/Service Provider is NOT a corporation or limited liability company and disclosure designation is as follows: APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.) Name Email Address Applicable Designation Enter Name of Each Individual Who Will Be Providing Service Under the Contract – If individuals have different disclosure requirements, duplicate this row and complete separately for each individual Enter email address(es) ☐ A. Full Disclosure ☐ B. Limited Disclosure (select one or more of the categories under which the Contractor shall file): ☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7. Justification: ☐ C. Excluded from Disclosure 1. Required Filers Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form 700. 2. Required Filing Deadlines Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement. 3. Filing Designation The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Contractor/Service Provider will provide. Notwithstanding this designation or anything in the Agreement, the Contractor/Service Provider is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2. Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the Contractor’s requirement to comply with the disclosure requirements set forth in the Code. Completed by: Angelica Davis, DSD-Housing Sr Management Analsyt 1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040. 3 Cal. Gov. Code §§53234, et seq. 4 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who participates in making a governmental decision; “individual” does not include corporation or limited liability company). 2022/04/26 City Council Post Agenda Page 183 of 667 15 City of Chula Vista Agreement No.: 2022-0265 Consultant Name: SBCS Domestic Violence Program Rev. 10/24/17 EXHIBIT D BUDGET 2022/04/26 City Council Post Agenda Page 184 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Contract: Approve Contract with Ace Parking, Inc. for Third Avenue Parking District Management and Enforcement for Fiscal Year 2022 Report Number: 22-0122 Location: Third Avenue boarded between E Street, Del Mar Ave, H Street and Garrett Avenue Department: Finance Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required Recommended Action Adopt a resolution waiving the competitive bidding process as outlined in Municipal Code Section 2.56.070.B.3, and approving an agreement with Ace Parking, Inc. SUMMARY The agreement between the City and Ace Parking for parking management and enforcement services was amended in July 2020 to extend services until June 2021. Due to unexpected delays and changes in staffing, the Finance Department would like to extend the current arrangement to allow time to complete an RFP (Request for Proposal) solicitation. Ace Parking scope of work will remain the same, and the Finance Department would like to enter a stop-gap contract with ACE independently through the end of fiscal year 2022 to allow services to continue until completion of the RFP process. The RFP solicitation for parking management and enforcement service for fiscal year 2023 has been advertised and posted. ENVIRONMENTAL REVIEW The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. 2022/04/26 City Council Post Agenda Page 185 of 667 P a g e | 2 BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable DISCUSSION Chula Vista Municipal Code Section 10.62.010.B authorizes the City to contract with a duly qualified company approved by the Chief of Police to provide enforcement of infraction violations of specified chapters of the Chula Vista Municipal Code: 10.52, stopping, standing, and parking; 10.56, parking meters, parking meter zones and permit parking; and 10.60, loading zones. The City has contracted for parking management and enforcement services in the Downtown Parking District since 2009. The City Council awarded Ace Parking the initial contract for parking management and enforcement services in the Downtown Parking District in 2009, and Ace Parking has provided these services since. The Downtown Parking District is the only parking district in which the City contracts for parking enforcement. The Downtown Parking District is bordered by E Street, Del Mar Avenue, H Street and Garrett Avenue. It provides approximately 1,500 parking spaces through surface parking lots, street metered spaces, and a parking structure. The agreement between the City and Ace Parking for parking management and enforcement services was amended in July 2020 to extend services until June 2021. Due to unexpected delays and changes in staffing, the Finance Department would like to extend the current arrangement to allow time to complete an RFP (Request for Proposal) solicitation. Ace Parking scope of work will remain the same, and the Finance Department would like to enter a stop-gap contract with ACE independently through the end of fiscal year 2022 to allow services to continue until completion of the RFP process. It is anticipated that the revenues generated in the Downtown Parking District are sufficient to cover the $275,000 expense of the contract that is appropriated in the Parking Meter Fund. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found that, Mayor Salas has real property holdings within the boundaries of the property which is the subject of this action. However, to the extent that any decision would have a reasonably foreseeable financial effect on the member’s real property, the effect would be nominal, inconsequential, or insignificant. Consequently, pursuant to California Code of Regulations Title 2, sections 18700 and 18702(b), this item does not present a real property-related conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT The expenditures for this agreement are appropriated in the Parking Meter Fund. It is anticipated that the revenues generated in the Downtown Parking District are sufficient to cover the $275,000 expense of the contract. ONGOING FISCAL IMPACT None. 2022/04/26 City Council Post Agenda Page 186 of 667 P a g e | 3 ATTACHMENTS Attachment 1: ACEParking2PrtyAgrmtFY22 – Two Party Agreement with Ace Parking Inc. Staff Contact: Meya Alomar, Finance Department 2022/04/26 City Council Post Agenda Page 187 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND ACE PARKING FOR PARKING MANAGEMENT AND ENFORCEMENT SERVICES WHEREAS, the City requires professional services in order to manage and enforce parking in the City’s Downtown Parking District – including enforcing infraction violations of the Chula Vista Municipal Code related to parking, loading zones and meters, collecting parking meter revenues, and maintaining parking meters; and WHEREAS, in order to procure these services Contractor/Service Provider was chosen based on Contractor/Service Provider’s unique qualifications, including currently managing the Downtown Parking District; therefore, pursuant to Municipal Code 2.56.070.B.3. it is in the best interest of the City to waive the competitive bid process and award this Agreement to Contractor/Service Provider; and WHEREAS, the Downtown Parking District was established in 1963 and consists of approximately 1,500 spaces. The Downtown Parking District includes on-street individually metered spaces, multi-space meters located in eight public parking lots, one free public parking structure, and non-metered spaces; and WHEREAS, the expense of the contract will be funded by the Parking Meter Fund and will be offset by revenue generated in the parking district; and WHEREAS, Contractor/Service Provider warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Contractor/Service Provider to City in accordance with the time frames and the terms and conditions of the subject Agreement. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it approves the Agreement to Provide Parking Management and Enforcement Services between the City and Ace Parking, in the form presented, with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City, and authorizes and directs the Mayor to execute same. Presented by: Sarah Schoen Director of Finance Approved as to form by: Glen R. Googins City Attorney 2022/04/26 City Council Post Agenda Page 188 of 667 1 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 CITY OF CHULA VISTA CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT WITH ACE PARKING TO PROVIDE PARKING MANAGEMENT AND ENFORCEMENT SERVICES This Agreement is entered into effective as of July 1, 2021 (“Effective Date”) by and between the City of Chula Vista, a chartered municipal corporation (“City”) and ACE PARKING, A California Corporation) (“Contractor/Service Provider”) (collectively, the “Parties” and, individually, a “Party”) with reference to the following facts: RECITALS WHEREAS, City requires professional services in order to manage and enforce parking in the City’s Downtown Parking District – including enforcing infraction violations of the Chula Vista Municipal Code related to parking, loading zones and meters, collecting parking meter revenues, and maintaining parking meters; and WHEREAS, in order to procure these services Contractor/Service Provider was chosen based on Contractor/Service Provider’s unique qualifications, including currently managing the Downtown Parking District; therefore, pursuant to Municipal Code 2.56.070.B.3. it is in the best interest of the City to waive the competitive bid process and award this Agreement to Contractor/Service Provider; and WHEREAS, the Downtown Parking District was established in 1963 and consists of approximately 1,500 spaces. The District includes on-street individually metered spaces, multi-space meters located in eight public parking lots, one free public parking structure, and non-metered spaces; and WHEREAS, Contractor/Service Provider warrants and represents that it is experienced and staffed in a manner such that it can deliver the services required of Contractor/Service Provider to City in accordance with the time frames and the terms and conditions of this Agreement. [End of Recitals. Next Page Starts Obligatory Provisions.] DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 189 of 667 2 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 OBLIGATORY PROVISIONS NOW, THEREFORE, in consideration of the above Recitals, the covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, City and Contractor/Service Provider hereby agree as follows: 1. SERVICES 1.1 Required Services. Contractor/Service Provider agrees to perform the services, and deliver to City the “Deliverables” (if any) described in the attached Exhibit A, incorporated into the Agreement by this reference, within the time frames set forth therein, time being of the essence for this Agreement. The services and/or Deliverables described in Exhibit A shall be referred to herein as the “Required Services.” 1.2 Reductions in Scope of Work. City may independently, or upon request from Contractor/Service Provider, from time to time, reduce the Required Services to be performed by the Contractor/Service Provider under this Agreement. Upon doing so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating a correspon ding reduction in the compensation associated with the reduction. 1.3 Additional Services. Subject to compliance with the City’s Charter, codes, policies, procedures and ordinances governing procurement and purchasing authority, City may request Contractor/Service Provider provide additional services related to the Required Services (“Additional Services”). If so, City and Contractor/Service Provider agree to meet and confer in good faith for the purpose of negotiating an amendment to Exhibit A, to add the Additional Services. Unless otherwise agreed, compensation for the Additional Services shall be charged and paid consistent with the rates and terms already provided therein. Once added to Exhibit A, “Additional Services” shall also become “Required Services” for purposes of this Agreement. 1.4 Standard of Care. Contractor/Service Provider expressly warrants and agrees that any and all Required Services hereunder shall be performed in accordance with the highest standard of care exercised b y members of the profession currently practicing under similar conditions and in similar locations. 1.5 No Waiver of Standard of Care. Where approval by City is required, it is understood to be conceptual approval only and does not relieve the Contractor/Service Provider of responsibility for complying with all laws, codes, industry standards, and liability for damages caused by negligent acts, errors, omissions, noncompliance with industry standards, or the willful misconduct of the Contractor/Service Provider or its subcontractors. 1.6 Security for Performance. In the event that Exhibit A Section 4 indicates the need for Contractor/Service Provider to provide additional security for performance of its duties under this Agreement, Contractor/Service Provider shall provide such additional security prior to commencement of its Required Services in the form and on the terms prescribed on Exhibit A, or as otherwise prescribed by the City Attorney. 1.7 Compliance with Laws. In its performance of the Required Services, Contractor/Service Provider shall comply with any and all applicable federal, state and local laws, including the Chula Vista Municipal Code. 1.8 Business License. Prior to commencement of work, Contractor/Service Provider shall obtain a business license from City. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 190 of 667 3 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 1.9 Subcontractors. Prior to commencement of any work, Contractor/Service Provider shall submit for City’s information and approval a list of any and all subcontractors to be used by Contractor/Service Provider in the performance of the Required Services. Contractor/Service Provider agrees to take appropriate measures necessary to ensure that all subcontractors and personnel utilized by the Contractor/Service Provider to complete its obligations under this Agreement comply with all applicable laws, regulations, ordinances, and policies, whether federal, state, or local. In addition, if any subcontractor is expected to fulfill any responsibilities of the Contractor/Service Provider under this Agreement, Contractor/Service Provider shall ensure that each and every subcontractor carries out the Contractor/Service Provider’s responsibilities as set forth in this Agreement. 1.10 Term. This Agreement shall commence on the earlier to occur of the Effective Dat e or Contractor/Service Provider’s commencement of the Required Services hereunder, and shall terminate when the Parties have complied with all their obligations hereunder; provided, however, provisions which expressly survive termination shall remain in effect. 2. COMPENSATION 2.1 General. For satisfactory performance of the Required Services, City agrees to compensate Contractor/Service Provider in the amount(s) and on the terms set forth in Exhibit A, Section 4. Standard terms for billing and payment are set forth in this Section 2. 2.2 Detailed Invoicing. Contractor/Service Provider agrees to provide City with a detailed invoice for services performed each month, within thirty (30) days of the end of the month in which the services were performed, unless otherwise specified in Exhibit A. Invoicing shall begin on the first of the month following the Effective Date of the Agreement. All char ges must be presented in a line item format with each task separately explained in reasonable detail. Each invoice shall include the current monthly amount being billed, the amount invoiced to date, and the remaining amount available under any approved bu dget. Contractor/Service Provider must obtain prior written authorization from City for any fees or expenses that exceed the estimated budget. 2.3 Payment to Contractor/Service Provider. Upon receipt of a properly prepared invoice and confirmation that the Required Services detailed in the invoice have been satisfactorily performed, City shall pay Contractor/Service Provider for the invoice amount within thirty (30) days. Payment shall be made in accordance with the terms and conditions set forth in Exhibit A and section 2.4, below. At City’s discretion, invoices not timely submitted may be subject to a penalty of up to five percent (5%) of the amount invoiced. 2.4 Retention Policy. City shall retain ten percent (10%) of the amount due for Required Services detailed on each invoice (the “holdback amount”). Upon City review and determination of Project Completion, the holdback amount will be issued to Contractor/Service Provider. 2.5 Reimbursement of Costs. City may reimburse Contractor/Service Provider’s out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services if negotiated in advance and included in Exhibit A. Unless specifically provided in Exhibit A, Contractor/Service Provider shall be responsible for any and all out-of-pocket costs incurred by Contractor/Service Provider in the performance of the Required Services. 2.6 Exclusions. City shall not be responsible for payment to Contractor/Service Provider for any fees or costs in excess of any agreed upon budget, rate or other maximum amount(s) provided for in Exhibit A. City DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 191 of 667 4 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 shall also not be responsible for any cost: (a) incurred prior to the Effective Date; or (b) arising out of or related to the errors, omissions, negligence or acts of willful misconduct of Contractor/Service Provider, its agents, employees, or subcontractors. 2.7 Payment Not Final Approval. Contractor/Service Provider understands and agrees that payment to the Contractor/Service Provider or reimbursement for any Contractor/Service Provider costs related to the performance of Required Services does not constitute a City final decision regarding whether such payment or cost reimbursement is allowable and eligible for payment under this Agreement, nor does it constitute a waiver of any violation by Contractor/Service Provider of the terms of this Agreement. If City determines that Contractor/Service Provider is not entitled to receive any amount of compensation already paid, City will notify Contractor/Service Provider in writing and Contractor/Service Provider shall promptly return such amount. 3. INSURANCE 3.1 Required Insurance. Contractor/Service Provider must procure and maintain, during the period of performance of Required Services under this Agreement, and for twelve months after completion of Required Services, the policies of insurance described on the attached Exhibit B, incorporated into the Agreem ent by this reference (the “Required Insurance”). The Required Insurance shall also comply with all other terms of this Section. 3.2 Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions relating to the Required Insurance must be disclosed to and approved by City in advance of the commencement of work. 3.3 Standards for Insurers. Required Insurance must be placed with licensed insurers admitted to transact business in the State of California with a current A.M. Best’s rating of A V or better, or, if insurance is placed with a surplus lines insurer, insurer must be listed on the State of California List of Eligible Surplus Lines Insurers (LESLI) with a current A.M. Best’s rating of no less than A X. For Workers’ Compensation Insurance, insurance issued by the State Compensation Fund is also acceptable. 3.4 Subcontractors. Contractor/Service Provider must include all sub-Contractor/Service Providers/sub- contractors as insureds under its policies and/or furnish separate certificates and endorsements demonstrating separate coverage for those not under its policies. Any separate coverage for sub-Contractor/Service Providers must also comply with the terms of this Agreement. 3.5 Additional Insureds. City, its officers, officials, employees, agents, and volunteers must be named as additional insureds with respect to any policy of general liability, automobile, or pollution insurance specified as required in Exhibit B or as may otherwise be specified by City’s Risk Manager.. The general liability additional insured coverage must be provided in the form of an endorsement to the Contractor/Service Provider’s insurance using ISO CG 2010 (11/85) or its equivalent; such endorsement must not exclude Products/Completed Operations coverage. 3.6 General Liability Coverage to be “Primary.” Contractor/Service Provider’s general liability coverage must be primary insurance as it pertains to the City, its officers, officials, employees, agents, and volunteers. Any insurance or self-insurance maintained by the City, its officers, officials, employees, or volunteers is wholly separate from the insurance provided by Contractor/Service Provider and in no way relieves Contractor/Service Provider from its responsibility to provide insurance. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 192 of 667 5 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 3.7 No Cancellation. No Required Insurance policy may be canceled by either Party during the required insured period under this Agreement, except after thirty days’ prior written notice to the City by certified mail, return receipt requested. Prior to the effective date of any such cancellation Contractor/Service Provider must procure and put into effect equivalent coverage(s). 3.8 Waiver of Subrogation. Contractor/Service Provider’s insurer(s) will provide a Waiver of Subrogation in favor of the City for each Required Insurance policy under this Agreement. In addition, Contractor/Service Provider waives any right it may have or may obtain to subrogation for a claim against City. 3.9 Verification of Coverage. Prior to commencement of any work, Contractor/Service Provider shall furnish City with original certificates of insurance and any amendatory endorsements necessary to demonstrate to City that Contractor/Service Provider has obtained the Required Insurance in compliance with the terms of this Agreement. The words “will endeavor” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents, or representatives” or any similar language must be deleted from all certificates. The required certificates and endorsements should otherwise be on industry standard forms. The City reserves the right to require, at any time, complete, certified copies of all required insurance policies, including endorsements evidencing the coverage required by these specifications. 3.10 Claims Made Policy Requirements. If General Liability, Pollution and/or Asbestos Pollution Liability and/or Errors & Omissions coverage are required and are provided on a claims -made form, the following requirements also apply: a. The “Retro Date” must be shown, and must be before the date of this Agreement or the beginning of the work required by this Agreement. b. Insurance must be maintained, and evidence of insurance must be provided, for at least five (5) years after completion of the work required by this Agreement. c. If coverage is canceled or non-renewed, and not replaced with another claims-made policy form with a “Retro Date” prior to the effective date of this Agreement, the Contractor/Service Provider must purchase “extended reporting” coverage for a minimum of five (5) years after completion of the work required by this Agreement. d. A copy of the claims reporting requirements must be submitted to the City for review. 3.11 Not a Limitation of Other Obligations. Insurance provisions under this section shall not be construed to limit the Contractor/Service Provider’s obligations under this Agreement, including Indemnity. 3.12 Additional Coverage. To the extent that insurance coverage provided by Contractor/Service Provider maintains higher limits than the minimums appearing in Exhibit B, City requires and shall be entitled to coverage for higher limits maintained. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 193 of 667 6 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 4. INDEMNIFICATION 4.1. General. To the maximum extent allowed by law, Contractor/Service Provider shall protect, defend, indemnify and hold harmless City, its elected and appointed officers, agents, employees and volunteers (collectively, “Indemnified Parties”), from and against any and all claims, demands, causes of action, costs, expenses, (including reasonable attorneys’ fees and court costs), liability, loss, damage or injury, in law or equity, to property or persons, including wrongful death, in any manner arising out of or incident to any alleged acts, omissions, negligence, or willful misconduct of Contractor/Service Provider, its officials, officers, employees, agents, and contractors, arising out of or in connection with the performance of the Required Services, the results of such performance, or this Agreement. This indemnity provision does not include any claims, damages, liability, costs and expenses arising from the sole negligence or willful misconduct of the Indemnified Parties. Also covered is liability arising from, connected with, caused by or claimed to be caused by the active or passive negligent acts or omissions of the Indemnified Parties which may be in combination with the active or passive negligent acts or omissions of the Contractor/Service Provider, its employees, agents or officers, or any third party. 4.2. Modified Indemnity Where Agreement Involves Design Professional Services. Notwithstanding the forgoing, if the services provided under this Agreement are design professional services, as defined by California Civil Code section 2782.8, as may be amended from time to time, the defense and indemnity obligation under Section 1, above, shall be limited to the extent required by California Civil Code section 2782.8. 4.3 Costs of Defense and Award. Included in Contractor/Service Provider’s obligations under this Section 4 is Contractor/Service Provider’s obligation to defend, at Contractor/Service Provider’s own cost, expense and risk, any and all suits, actions or other legal proceedings that may be brought or instituted against one or more of the Indemnified Parties. Subject to the limitations in this Section 4, Contractor/Service Provider shall pay and satisfy any judgment, award or decree that may be rendered against one or more of the Indemnified Parties for any and all related legal expenses and costs incurred by any of them. 4.4. Contractor/Service Provider’s Obligations Not Limited or Modified. Contractor/Service Provider’s obligations under this Section 4 shall not be limited to insurance proceeds, if any, received by the Indemnified Parties, or by any prior or subsequent declaration by the Contractor/Service Provider. Furthermore, Contractor/Service Provider’s obligations under this Section 4 shall in no way limit, modify or excuse any of Contractor/Service Provider’s other obligations or duties under this Agreement. 4.5. Enforcement Costs. Contractor/Service Provider agrees to pay any and all costs City incurs in enforcing Contractor/Service Provider’s obligations under this Section 4. 4.6 Survival. Contractor/Service Provider’s obligations under this Section 4 shall survive the termination of this Agreement. 5. FINANCIAL INTERESTS OF CONTRACTOR/SERVICE PROVIDER. 5.1 Form 700 Filing. The California Political Reform Act and the Chula Vista Conflict of Interest Code require certain government officials and Contractor/Service Providers performing work for government agencies to publicly disclose certain of their personal assets and income using a Statement of Economic Interests form (Form 700). In order to assure compliance with these requirements, Contractor/Service Provider shall comply with the disclosure requirements identified in the attached Exhibit C, incorporated into the Agreement by this reference. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 194 of 667 7 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 5.2 Disclosures; Prohibited Interests. Independent of whether Contractor/Service Provider is required to file a Form 700, Contractor/Service Provider warrants and represents that it has disclosed to City any economic interests held by Contractor/Service Provider, or its employees or subcontractors who will be performing the Required Services, in any real property or project which is the subject of this Agreement. Contractor/Service Provider warrants and represents that it has not employed or retained any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, to solicit or secure this Agreement. Further, Contractor/Service Provider warrants and represents that it has not paid or agreed to pay any company or person, other than a bona fide employee or approved subcontractor working solely for Contractor/Service Provider, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. Contractor/Service Provider further warrants and represents that no officer or employee of City, has any interest, whether contractual, non-contractual, financial or otherwise, in this transaction, the proceeds hereof, or in the business of Contractor/Service Provider or Contractor/Service Provider’s subcontractors. Contractor/Service Provider further agrees to notify City in the event any such interest is discovered whether or not such interest is prohibited by law or this Agreement. For breach or violation of any of these warranties, City shall have the right to rescind this Agreement without liability. 6. REMEDIES 6.1 Termination for Cause. If for any reason whatsoever Contractor/Service Provider shall fail to perform the Required Services under this Agreement, in a proper or timely manner, or if Contractor/Service Provider shall violate any of the other covenants, agreements or conditions of this Agreement (each a “Default”), in addition to any and all other rights and remedies City may have under this Agreement, at law or in equity, City shall have the right to terminate this Agreement by giving five (5) days written notice to Contractor/Service Provider. Such notice shall identify the Default and the Agreement termination date. If Contractor/Service Provider notifies City of its intent to cure such Default prior to City’s specified termination date, and City agrees that the specified Default is capable of being cured, City may grant Contractor/Service Provider up to ten (10) additional days after the designated termination date to effectuate such cure. In the event of a termination under this Section 6.1, Contractor/Service Provider shall immediately provide City any and all ”Work Product” (defined in Section 7 below) prepared by Contractor/Service Provider as part of the Required Services. Such Work Product shall be City’s sole and exclusive property as provided in Section 7 hereof. Contractor/Service Provider may be entitled to compensation for work satisfactorily performed prior to Contractor/Service Provider’s receipt of the Default notice; provided, however, in no event shall such compensation exceed the amount that would have been payable under this Agreement for such work, and any such compensation shall be reduced by any costs incurred or projected to be incurred by City as a result of the Default. 6.2 Termination or Suspension for Convenience of City. City may suspend or terminate this Agreement, or any portion of the Required Services, at any time and for any reason, with or without cause, by giving specific written notice to Contractor/Service Provider of such termination or suspension at least fifteen (15) days prior to the effective date thereof. Upon receipt of such notice, Contractor/Service Provider shall immediately cease all work under the Agreement and promptly deliver all “Work Product” (defined in Section 7 below) to City. Such Work Product shall be City's sole and exclusive property as provided in Section 7 hereof. Contractor/Service Provider shall be entitled to receive just and equitable compensation for this Work Product in an amount equal to the amount due and payable under this Agreement for work satisfactorily performed as of the date of the termination/suspension notice plus any additional remaining Required Services requested or approved by City in advance that would maximize City’s value under the Agreement. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 195 of 667 8 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 6.3 Waiver of Claims. In the event City terminates the Agreement in accordance with the terms of this Section, Contractor/Service Provider hereby expressly waives any and all claims for damages or compensation as a result of such termination except as expressly provided in this Section 6. 6.4 Administrative Claims Requirements and Procedures. No suit or arbitration shall be brought arising out of this Agreement against City unless a claim has first been presented in writing and filed with City and acted upon by City in accordance with the procedures set forth in Chapter 1.34 of the Chula Vista Municipal Code, as same may be amended, the provisions of which, including such policies and procedures used by City in the implementation of same, are incorporated herein by this reference. Upon request by City, Contractor/Service Provider shall meet and confer in good faith with City for the purpose of resolving any dispute over the terms of this Agreement. 6.5 Governing Law/Venue. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Any action arising under or relating to this Agreement shall be brought only in San Diego County, State of California. 6.6 Service of Process. Contractor/Service Provider agrees that it is subject to personal jurisdiction in California. If Contractor/Service Provider is a foreign corporation, limited liability company, or partnership that is not registered with the California Secretary of State, Contractor/Service Provider irrevocably consents to service of process on Contractor/Service Provider by first class mail directed to the individual and address listed under “For Legal Notice,” in section 1.B. of Exhibit A to this Agreement, and that such service shall be effective five days after mailing. 7. OWNERSHIP AND USE OF WORK PRODUCT All reports, studies, information, data, statistics, forms, designs, plans, procedures, systems and any other materials or properties produced in whole or in part under this Agreement in connection with the performance of the Required Services (collectively “Work Product”) shall be the sole and exclusive property of City. No such Work Product shall be subject to private use, copyrights or patent rights by Contractor/Service Provider in the United States or in any other country without the express, prior written consent of City. City shall have unrestricted authority to publish, disclose, distribute, and otherwise use, copyright or patent, in whole or in part, any such Work Product, without requiring any permission of Contractor/Service Provider, except as may be limited by the provisions of the Public Records Act or expressly prohibited by other applicable laws. With respect to computer files containing data generated as Work Product, Contractor/Service Provider shall make available to City, upon reasonable written request by City, the necessary functional computer software and hardware for purposes of accessing, compiling, transferring and printing computer files. 8. GENERAL PROVISIONS 8.1 Amendment. This Agreement may be amended, but only in writing signed by both Parties. 8.2 Assignment. City would not have entered into this Agreement but for Contractor/Service Provider’s unique qualifications and traits. Contractor/Service Provider shall not assign any of its rights or responsibilities under this Agreement, nor any part hereof, without City’s prior written consent, which City may grant, condition or deny in its sole discretion. 8.3 Authority. The person(s) executing this Agreement for Contractor/Service Provider warrants and represents that they have the authority to execute same on behalf of Contractor/Service Provider and to bind DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 196 of 667 9 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 Contractor/Service Provider to its obligations hereunder without any further action or direction from Contractor/Service Provider or any board, principle or officer thereof. 8.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed such a counterpart. 8.5 Entire Agreement. This Agreement together with all exhibits attached hereto and other agreements expressly referred to herein, constitutes the entire Agreement between the Parties with respect to the subject matter contained herein. All exhibits referenced herein shall be attached hereto and are incorporated herein by reference. All prior or contemporaneous agreements, understandings, representations, warranties and statements, oral or written, are superseded. 8.6 Record Retention. During the course of the Agreement and for three (3) years following completion of the Required Services, Contractor/Service Provider agrees to maintain, intact and readily accessible, all data, documents, reports, records, contracts, and supporting materials relating to the per formance of the Agreement, including accounting for costs and expenses charged to City, including such records in the possession of sub-contractors/sub-Contractor/Service Providers. 8.7 Further Assurances. The Parties agree to perform such further acts and to execute and deliver such additional documents and instruments as may be reasonably required in order to carry out the provisions of this Agreement and the intentions of the Parties. 8.8 Independent Contractor. Contractor/Service Provider is and shall at all times remain as to City a wholly independent contractor. Neither City nor any of its officers, employees, agents or volunteers shall have control over the conduct of Contractor/Service Provider or any of Contractor/Service Provider’s officers, employees, or agents (“Contractor/Service Provider Related Individuals”), except as set forth in this Agreement. No Contractor/Service Provider Related Individuals shall be deemed employees of City, and none of them shall be entitled to any benefits to which City employees are entitled, including but not limited to, overtime, retirement benefits, worker's compensation benefits, injury leave or other leave benefits. Furthermore, City will not withhold state or federal income tax, social security tax or an y other payroll tax with respect to any Contractor/Service Provider Related Individuals; instead, Contractor/Service Provider shall be solely responsible for the payment of same and shall hold the City harmless with respect to same. Contractor/Service Provider shall not at any time or in any manner represent that it or any of its Contractor/Service Provider Related Individuals are employees or agents of City. Contractor/Service Provider shall not incur or have the power to incur any debt, obligation or liability whatsoever against City, or bind City in any manner. 8.9 Notices. All notices, demands or requests provided for or permitted to be given pursuant to this Agreement must be in writing. All notices, demands and requests to be sent to any Party sha ll be deemed to have been properly given or served if personally served or deposited in the United States mail, addressed to such Party, postage prepaid, registered or certified, with return receipt requested, at the addresses identified in this Agreement at the places of business for each of the designated Parties as indicated in Exhibit A, or otherwise provided in writing. 8.10 Electronic Signatures. Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Electronic Signature means any electronic sound, symbol, or process attached to or logically associated with a record and executed and adopted by a Party with the intent to sign such record, DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 197 of 667 10 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 including facsimile or email electronic signatures, pursuant to the California Uniform Electronic Transactions Act (Cal. Civ. Code §§ 1633.1 to 1633.17) as amended from time to time. (End of page. Next page is signature page.) DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 198 of 667 11 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 SIGNATURE PAGE CONTRACTOR/SERVICE PROVIDER SERVICES AGREEMENT IN WITNESS WHEREOF, by executing this Agreement where indicated below, City and Contractor/Service Provider agree that they have read and understood all terms and conditions of the Agreement, that they fully agree and consent to bound by same, and that they are freely entering into this Agreement as of the Effective Date. ACE PARKING CITY OF CHULA VISTA BY:________________________________ BY: ________________________________ Keith Jones MARY CASILLAS SALAS Ace Parking, Principal MAYOR ATTEST BY: ________________________________ Kerry K. Bigelow, MMC City Clerk APPROVED AS TO FORM BY: ________________________________ Glen R. Googins City Attorney https://chulavistaca-my.sharepoint.com/personal/mshirey_chulavistaca_gov/Documents/Covid-19 Work From Home/Parking/Agreements/ACE/ACEParking2PrtyAgrmtFY22-4.4.22- Final.docx DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 199 of 667 12 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 EXHIBIT A SCOPE OF WORK AND PAYMENT TERMS 1. Contact People for Contract Administration and Legal Notice A. City Contract Administration: Meya Alomar 276 Fourth Avenue, Chula Vista, CA 91910 619-858-5688 malomar@chulavistaca.gov For Legal Notice Copy to: City of Chula Vista City Attorney 276 Fourth Avenue, Chula Vista, CA 91910 619-691-5037 CityAttorney@chulavistaca.gov B. Contractor/Service Provider Contract Administration: ACE PARKING 645 Ash Street, San Diego, CA 92101 619-233-6624 kjones@aceparking.com For Legal Notice Copy to: Keith Jones, Ace Parking 645 Ash Street, San Diego, CA 92101 619-233-6624 kjones@aceparking.com 2. Required Services A. General Description: Ace Parking will provide parking management and enforcement services for the Downtown Parking District in order to enforce Chula Vista Municipal Code section 10.62, issue parking citations, collect parking meter revenues, and maintain parking meters. B. Detailed Description: Ace Parking will provide parking management and enforcement services for the Downtown Parking District in order to enforce Chula Vista Municipal Code section 10.62, issue parking citations, collect parking meter revenues, and maintain parking meters. Services and Staffing Ace Parking will be responsible for the following: DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 200 of 667 13 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 Hours of Operation and Staffing – Ace Parking will enforce Chula Vista Municipal Code 10.62 by issuing parking citations, collecting parking meter revenues and maintaining parking meters. Enforcement operating hours are Monday through Saturday from 9:00 a.m. – 6:00 p.m. At a minimum Contractor/Service Provider will ensure there is one (1) Enforcement Officer on patrol during metered parking operating hours. Enforcement will be consistent with scheduled shifts and routes. An Operations Manager will complete every management responsibility of the parking operation including staffing, training, tracking and collections. Enforcement Strategies – Contractor/Service Provider will provide consistent enforcement with regularly scheduled shifts and routes. Contractor will take a proactive approach to the parking enforcement and maintenance tasks. The Operations Manager will regularly review enforcement officer’s activity to make sure the average numbers of citations are being issued. Ace will continue to utilize Duncan’s handheld ticket issuing units to issue violations and upload data to a central server. Duncan Solutions is an approved subcontractor to consultant that provides services for the issuance, collection, appeals, and back office processing of parking citations. Contractor will use Galaxy 8 Note Handheld Ticket Issuance Device. Duncan's AutoPROCESS™ citation processing system is the foundation of the comprehensive, turnkey parking management solution that manages the entire parking citation lifecycle, including citation processing, administrative appeals, permit processing, payment processing, scofflaw identification, enhanced enforcement sanctions such as DMV registration holds, booting, towing, and tax intercept programs, and all activities in between. Storefront Office - Contractor operates a storefront office at 321 3rd Avenue in downtown Chula Vista. This office is open to the public Monday through Thursday from 10am to 2pm and handles all of the public inquiries for the Downtown Parking District. Customer Service Hotline (1-800-925-7275) - In addition to the storefront, contractor will provide the public a hotline number to call and communicate directly with Ace Parking. Enforcement Routing and Coverage Procedures - The GEM car is currently being used for circulation around the enforcement area. Ace will continue to use the GEM car. Ace may recommend the replacement of this vehicle in the future. It will be the City's financial responsibility to replace the vehicle if both parties agree the vehicle needs to be replaced. Enforcement Staff will patrol on the GEM car and on foot while patrolling the off-street facilities. Enforcement Staff will patrol designated routes with staggered-time schedules. Their primary responsibility will be enforcing parking laws and regulations. Ace will continue to patrol the existing routes and can make adjustments as needed depending on demand. Meter Cash Collections - Contractor will collect the cash from the meters Monday thru Thursday. Collection hours will vary between 6am to 10am. Routes will also vary for the safety of the collection officer and security of the funds. Contractor will use collection systems that are fully "sealed", eliminating access to the money collected. The staff collecting the cash will differ from enforcement staff and be trained to perform light maintenance and cleaning of the machines during their rounds. Bank Deposits - Ace will deposit the cash from the coin collection at least three times per week and transmit the funds for citations and permits to the City's account on a monthly basis. The monthly deposit will occur no later than the 15th of the month and will be accompanied by the monthly settlement report. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 201 of 667 14 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 Equipment Maintenance - Contractor will perform light maintenance on the equipment including wiping dirt and debris, cleaning credit card portals, and other parts of the machine. Meter Repair- Performance Measures The City and Ace agree that the following performance standards will be met:  Monday through Saturday from 9:00 am to 6:00 pm (when staff is onsite) meters and multi space pay stations will be repaired within 1 hour of being notified of a malfunction  Should Ace staff assess that parts will be needed to repair the meter or pay station, notification of pending repair will be posted (meter will be bagged and tagged appropriately) and meter or pay station will be repaired within one business day of receipt of parts Enforcement Hand-held Units and Software - Citations will continue to be issued by Contractor and the Duncan wireless hand-held devices. The data will be uploaded to a central server and tracked in Contractor's our database to allow designated City staff access to view citation reports and accounting. Contractor will supply all parts and cost to be charged back to the City at no additional markup during the term the contract. Personnel Staffing Plan Contractor will staff a Parking Enforcement officer onsite 6 days per week from 9am until 6pm. In addition, Ace will have an Operations Manager overseeing the operation. One officer will work Monday through Thursday and another officer will work Friday and Saturday. They will begin patrol no later than 30 minutes after the start of their shift and will continue their patrol until at least 30 minutes before the end of their shift. Operations Manager - will oversee the entire parking enforcement program. The Operations Manager will develop annual budgets, manage the staff schedules, provide and improve effective revenue and enforcement tracking procedures and overall general operations. Customer service and effectively responding to and resolving problems will be a key function of the Operations Manager. Upon City's request, the Contractor will be available for quarterly meetings or as needed with City’s Contract Administrators to ensure Ace Parking is performing at expected levels, to identify other opportunities and review financial results for the parking enforcement. Ace believes the regular interaction between the city officers and our operations team can only improve communication and the working relationships. In addition to the Operations Manager, three part-time staff members will be utilized. These staff members will be used in the following way: Enforcement Officer - will be responsible for all aspects of the parking enforcement. They will circulate around the on-street parking and enforced lots in the Downtown District. During each circulation, the enforcement staff will perform light maintenance (trash removal and sweeping). Between circulations, the enforcement personnel will complete citation administrative procedures. Ace enforcement staff member must meet the following criteria: 1. Be at least 18 years of age. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 202 of 667 15 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 2. Be able to read, write and speak the English language and must be able to write intelligible reports. 3. Have the ability to give and follow oral/written instructions in English. 4. The ability to speak a second language, such as Spanish is highly desirable, but not required. 5. Physically and mentally capable of performing parking enforcement duties. 6. Have the ability to remain calm and use good judgment and initiative in a confrontational or emergency situation. 6. Have the ability to establish and maintain effective working relationships with the public, downtown business owners and City personnel. 7. Possess a high school diploma or equivalent. 8. Possess a valid class “C” State of California driver’s license. (On-site personnel only) 9. Pass a background check which includes DMV and criminal. Collector - The Collector will retrieve coins from all 500 individual and 8 multi space meters, bring it to the office and with the assistance of the Enforcement Officer (dual custody) will transfer the coins from the sealed collection cart to deposit bags and deliver to the bank. This person will complete light cleaning of the meters and ensure they are all in working order. The Collector will perform month end reconciliations with the City of Chula Vista Finance Department on all deposited coins. The Collector will work Monday through Thursday 5am-10am. The Collector is also responsible for staffing the store front in Chula Vista on Tuesdays and Thursdays from 10am-12pm and to be available to the public for questions and appeals. Appeals Administrator - Due to the high volume of citations issued each month, amount of public inquiries, number of appeals and general questions an Appeals Administrator is required. This employee works Monday – Friday during business hours and is responsible for: 1. Speaking to the majority of the public in fluent Spanish (A very large percent of callers speak only Spanish) 2. Helping public use online payment system 3. Helping public use online appeal system 4. Helping public use pay by phone system 5. Any customer service issues regarding the parking operation including suggestions, complaints, machine failures etc. 6. Collecting and filing all public appeals 7. Determining the outcome of all public appeals 8. Public communication/ customer service during non-store front hours DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 203 of 667 16 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 9. Reporting pay station and meter failures to the enforcement staff for rep air 10. Schedules Administrative hearings with the City of Chula Vista 11. Elevates the appeal to management if there are other / elevated circumstances of the appeal for consideration Conflict Resolution - Contractor will respond to any citizen complaint within 24 hours. Ace will provide an administrator that answers these calls and can ensure issues are addressed and resolved timely. In-service Personnel Training Provided by Contractor All Contractor employees that provide service to the City must be trained through the Ace Learning Lot. Training includes but is not limited to expectations on the job, service standards, safety on the job, familiarity with the work site and city codes and the use of Ace Parking’s proprietary systems and City systems. Parking Enforcement Training - After completing orientation, each team member will receive InMotion! On- The-Job Training at their job location. For a minimum of five days, a certified trainer will walk the new employee through their daily roles and responsibilities. In addition, a special safety training, driver training and radio training are conducted for enforcement officers. Before Enforcement Officers are allowed to work on their own, they must demonstrate to their instructor that they are comfortable and confident with the following tasks: 1. Executing established methods, practices, and procedures associated with parking control and enforcement. 2. Public contact protocol. 3. Procedures and precautions related to safe operation of vehicles and familiarity with California driving laws. 4. Knowledge of assigned patrol areas in the Downtown District. 5. Observe and report any suspicious looking vehicles or activity. 6. Enforce the municipal codes; provides information on parking laws to the public. 7. Enforce mandated Chula Vista Municipal Codes as they pertain to parking and the Downtown District 8. Be able to void incorrect citations and record them appropriately 9. Use a vehicle to patrol and to enforce parking laws and regulations. 10. Make court appearances as required. 11. Report damaged or inoperative traffic control equipment and hazards such as broken sidewalks and pavement, etc. 12. Maintain records and prepare legible reports including logging Daily Activity Reports. 13. Report any irregular or hazardous circumstances to the police station. DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 204 of 667 17 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 14. Explain parking regulations and provides information to the public; makes and keeps records and reports of actions taken in the line of duty. 15. Build and maintain positive working relationships with coworkers, other City employees and the public using principles of good customer service. Personal Safety Training - Employees undergo a brief personal safety training which teaches employees the following: 1. Never jump in front of a moving vehicle to stop it. 2. Do not stand behind stopped vehicles. They may not be able to see you if they back up. 3. Be aware of your surroundings at all times. 4. Make yourself visible to other drivers. 5. Never stand in the way of traffic. 6. Always wear a reflective vest Vehicle Safety & Use - Any employee who drives a vehicle for Ace Parking must complete the following training on a one-on-one basis with a certified trainer before starting their job. This training should be conducted throughout an 8-hour shift. Any additional training that a driver receives is at the discretion of the site manager and certified trainer. The site-specific driver training familiarizes drivers with procedures and safety hazards at each location. There is a vehicle-specific drivers manual, based on the Vehicle Operation Manual. Managers, supervisors, or certified trainers review the manual with the driver before the driver operates a vehicle. In addition, the driver will accompany a manager, supervisor, or certified trainer on a ride along before operating a vehicle. Defensive Driving Video - The defensive driving video is a generic training video provided by Ace’s insurance carriers. It is designed to remind drivers of general defensive driving techniques that they will utilize when operating a company-owned vehicle. Training Materials – the following training materials will be provided by Ace Parking: 1. Vehicle Operation Manual 2. Vehicle Inspection Report 3. Chubb issued Defensive Driving video 4. Chubb issued Defensive Driving workbook 5. “In the event of an accident” kit Customer Service Training (Semi-Annual Requirement) - Throughout the year, Ace Parking’s Training and Development department visits all locations for mandatory customer service training. Customer service training DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 205 of 667 18 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 is also part of the onboard/orientation procedure. Additionally, many of Ace Parking’s clients have site specific or corporate training programs, which they ask our staff to participate in. Subcontractor Ace Parking will subcontract with Duncan Solutions for the following: Handheld Writing Units, Backend Processing Software, and Adjudication software. 3. Term: In accordance with Section 1.10 of this Agreement, the term of this Agreement shall begin March 1, 2021 and end on June 30, 2022 for completion of all Required Services. 4. Compensation: SELECT ONE OF THE FOLLOWING OPTIONS THEN DELETE ANY OPTION THAT IS NOT APPLICABLE, AS WELL AS THESE INSTRUCTIONS A. Form of Compensation ☒ Time and Materials. For performance of the Required Services by Contractor/Service Provider as identified in Section 2.B., above, City shall pay Contractor/Service Provider for the productive hours of time spent by Contractor/Service Provider in the performance of the Required Services, at the rates or amounts as indicated below: Enter Applicable Hourly Rates B. Reimbursement of Costs ☒ None, the compensation includes all costs Notwithstanding the foregoing, the maximum amount to be paid to the Contractor/Service Provider for services performed through June 30, 2022 shall not exceed $250,000. 5. Special Provisions: . ☒ Permitted Sub-Contractor/Service Providers: Duncan Solutions ☐ Security for Performance: None ☐ Notwithstanding the completion date set forth in Section 3 above, City has option to extend this Agreement for Zero additional terms, defined as a one-year increment or N/A. The City Manager or Director of Finance/Treasurer shall be authorized to exercise the extensions on behalf of the City. If the City exercises an option to extend, each extension shall be on the same terms and conditions contained herein, provided that the amounts specified in Section 4 above may be increased by up to N/A for each extension. The City shall give written notice to Contractor/Service Provider of the City’s election to exercise the extension via the Notice of Exercise of Option to Extend document. Such notice shall be provided at least 30 days prior to the expiratio n of the term. ☒ None DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 206 of 667 19 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 EXHIBIT B INSURANCE REQUIREMENTS Contractor/Service Provider shall adhere to all terms and conditions of Section 3 of the Agreement and agrees to provide the following types and minimum amounts of insurance, as indicated by checking the applicable boxes (x). Type of Insurance Minimum Amount Form ☒ General Liability: Including products and completed operations, personal and advertising injury $2,000,000 per occurrence for bodily injury, personal injury (including death), and property damage. If Commercial General Liability insurance with a general aggregate limit is used, either the general aggregate limit must apply separately to this Agreement or the general aggregate limit must be twice the required occurrence limit Additional Insured Endorsement or Blanket AI Endorsement for City* Waiver of Recovery Endorsement Insurance Services Office Form CG 00 01 *Must be primary and must not exclude Products/Completed Operations ☒ Automobile Liability $1,000,000 per accident for bodily injury, including death, and property damage Insurance Services Office Form CA 00 01 Code 1-Any Auto Code 8-Hired Code 9-Non Owned ☒ Workers’ Compensation Employer’s Liability $1,000,000 each accident $1,000,000 disease policy limit $1,000,000 disease each employee Waiver of Recovery Endorsement Other Negotiated Insurance Terms: NONE DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 207 of 667 20 City of Chula Vista Agreement No.: 2021-093 Service Provider Name: ACE PARKING Rev. 2/4/21 EXHIBIT C CONTRACTOR/SERVICE PROVIDER CONFLICT OF INTEREST DESIGNATION The Political Reform Act1 and the Chula Vista Conflict of Interest Code2 (“Code”) require designated state and local government officials, including some Contractor/Service Providers, to make certain public disclosures using a Statement of Economic Interests form (Form 700). Once filed, a Form 700 is a public document, accessible to any member of the public. In addition, Contractor/Service Providers designated to file the Form 700 are also required to comply with certain ethics training requirements.3 ☒ A. Contractor/Service Provider IS a corporation or limited liability company and is therefore EXCLUDED4 from disclosure. ☐ B. Contractor/Service Provider is NOT a corporation or limited liability company and disclosure designation is as follows: APPLICABLE DESIGNATIONS FOR INDIVIDUAL(S) ASSIGNED TO PROVIDE SERVICES (Category descriptions available at www.chulavistaca.gov/departments/city-clerk/conflict-of-interest-code.) Name Email Address Applicable Designation Enter Name of Each Individual Who Will Be Providing Service Under the Contract – If individuals have different disclosure requirements, duplicate this row and complete separately for each individual Enter email address(es) ☐ A. Full Disclosure ☐ B. Limited Disclosure (select one or more of the categories under which the Contractor shall file): ☐ 1. ☐ 2. ☐ 3. ☐ 4. ☐ 5. ☐ 6. ☐ 7. Justification: ☐ C. Excluded from Disclosure 1. Required Filers Each individual who will be performing services for the City pursuant to the Agreement and who meets the definition of “Contractor/Service Provider,” pursuant to FPPC Regulation 18700.3, must file a Form 700. 2. Required Filing Deadlines Each initial Form 700 required under this Agreement shall be filed with the Office of the City Clerk via the City's online filing system, NetFile, within 30 days of the approval of the Agreement. Additional Form 700 filings will be required annually on April 1 during the term of the Agreement, and within 30 days of the termination of the Agreement. 3. Filing Designation The City Department Director will designate each individual who will be providing services to the City pursuant to the Agreement as full disclosure, limited disclosure, or excluded from disclosure, based on an analysis of the services the Contractor/Service Provider will provide. Notwithstanding this designation or anything in the Agreement, the Contractor/Service Provider is ultimately responsible for complying with FPPC regulations and filing requirements. If you have any questions regarding filing requirements, please do not hesitate to contact the City Clerk at (619)691-5041, or the FPPC at 1-866-ASK-FPPC, or (866) 275-3772 *2. Pursuant to the duly adopted City of Chula Vista Conflict of Interest Code, this document shall serve as the written determination of the Contractor’s requirement to comply with the disclosure requirements set forth in the Code. Completed by: Victor De La Cruz 1 Cal. Gov. Code §§81000 et seq.; FPPC Regs. 18700.3 and 18704. 2 Chula Vista Municipal Code §§2.02.010-2.02.040. 3 Cal. Gov. Code §§53234, et seq. 4 CA FPPC Adv. A-15-147 (Chadwick) (2015); Davis v. Fresno Unified School District (2015) 237 Cal.App.4th 261; FPPC Reg. 18700.3 (Consultant defined as an “individual” who p articipates in making a governmental decision; “individual” does not include corporation or limited liability company). DocuSign Envelope ID: CB728C40-8E41-49D3-A14F-A5C1C2C94AB8 2022/04/26 City Council Post Agenda Page 208 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Aerial Truck Purchase: Approval of the Purchase of One Pierce Arrow XT 107’ Tractor Drawn Aerial through Measure P Report Number: 22-0129 Location: No specific geographic location Department: Fire Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution approving the purchase of one Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) in compliance with the Measure P Expenditure Plan. SUMMARY The Chula Vista Fire Department delivers Fire, Rescue and Emergency Medical Services to Chula Vista residents, visitors, and employees daily. Emergency response service delivery is provided with several different types of apparatus, including triple combination pumped/fire engines, aerial ladder trucks, a heavy rescue, brush engines and command vehicles. The Fire Department continues to replace fire apparatus as part of the initial phase of the City’s 10-year Measure P Expenditure Plan specific to the Fire Department’s fire apparatus replacement plan. The Fire Department is requesting authorization to purchase one (1) Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) through its sole source agreement with South Coast Fire Equipment to replace the existing Aerial Truck that will be transitioned into our reserve fleet. 2022/04/26 City Council Post Agenda Page 209 of 667 P a g e | 2 ENVIRONMENTAL REVIEW The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION The purchase of one (1) Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) is in compliance with the Measure P Expenditure Plan. DISCUSSION The Fire Department responds to Fire, Rescue and Emergency Medical incidents both within the City and surrounding jurisdictions. In addition, the Fire Department provides mutual aid assistance throughout the State of California on a reimbursable basis. These emergency services are provided with each of the apparatus in our fleet. As part of the Fire Department’s continued execution of the City’s 10-year Measure P Expenditure Plan specific to the fire apparatus and equipment replacements, the replacement of one (1) Aerial Truck is necessary. The replacement of this aerial truck is the continued effort to remain in alignment with the City’s 10-year Measure P expenditure plan. These efforts are significant and provide for improved overall quality, reliability, cost effectiveness and safety of the fire apparatus fleet. The Fire Facility Master Plan includes an addendum that details the recommended apparatus replacement cycles to include 10 to 12 years of frontline service, plus 5 years of reserve service, for a total service life of 17 years. National Fire Protection Association (NFPA) Standard 1901 on Automotive Fire Apparatus and other National Fleet Maintenance Organizations recommend large vehicle replacements based on several criteria to include years of service, mileage, maintenance costs, functional obsolescence, and inability to obtain prior parts as well as technology and safety improvements. The current aerial ladder truck being replaced that will be transitioned into reserve status has served 5 years to date on the frontline service. The current reserve aerial ladder that will subsequently be surveyed out of the Fire Departments fleet has been in service for 20 years. The manufacturing lead time for an aerial ladder truck is approximately 20-24 months, which would put the years of service for the current aerial ladder truck at 7 years and the reserve truck at 22 years. The service life of our reserve trucks exceeds current City policy of total service life of 17 years of service. The reserve truck is regularly placed into service for a variety of operations needs. This truck being in service creates a larger burden on Public Works and the mechanics for the increased maintenance needed. The replacement of this aerial ladder truck at 5 years of service (7 years of service once the apparatus is received) will move this truck into our reserve fleet, therefore replacing our reserve truck that has exceeded its total service life. This purchase is a sole source purchase with South Coast Fire Equipment for the Pierce manufactured fire apparatus, pursuant to Chula Vista Municipal Code section 2.56.070.B.4 (unique compatibility requirements). The Fire Department uses Pierce Manufacturing to purchase frontline operational emergency response vehicles for several critical reasons: 2022/04/26 City Council Post Agenda Page 210 of 667 P a g e | 3 1. Equipment Standardization: providing the same type of emergency response apparatus is critical to provide a standard approach to training all personnel. This ensures that our personnel can operate fire apparatus at a competent level while under duress of emergency response. 2. Safety: Fire personnel are consistently moved from one fire station to another. Maintaining a fleet of fire apparatus that operate consistently throughout our fleet ensures driver/operators and firefighters can operate and locate equipment in an efficient and timely manner while working in emergency situations. The purchase of these new fire apparatus will continue to improve the overall quality, reliability, cost effectiveness and safety of the City’s fire apparatus fleet. The Fire Department has received a quote from South Coast for the purchase of one (1) Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) for the quoted purchase price of $1,876,620.39, but if ordered before May 1, 2022, would result in a discount of $99,934 or a quoted purchase price of $1,776,686.39. The Fire Department is recommending a 5% overage of the quoted purchase price without the discount to account for any change order needs in the manufacturing processes, bringing the total authorized amount to $1,970,452 to be purchased using the Fire Department Vehicle/Apparatus allocations in the Measure P Expenditure Plan. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no fiscal impact to the General Fund. The total cost to purchase one (1) Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) will be funded through the Measure P fund. ONGOING FISCAL IMPACT There is no ongoing fiscal impact to the General Fund. These apparatuses are replacements rather than additions to our fleet, therefore any fuel and maintenance costs both for the frontline engines and engines being moved into the reserve fleet will be included in the Department’s ongoing operational budget. ATTACHMENTS Attachment 1: South Coast Fire Equipment Pierce Arrow XT 107’ Tractor Drawn Aerial Proposal Staff Contact: Emily Folker, Harry Muns, Pete Mercado 2022/04/26 City Council Post Agenda Page 211 of 667 Extension One(1 ) 1,721,733.00$ 99,934.00$ 1,621,799.00$ Sales Tax @ 8.750%150,651.64$ Performance Bond 4,218.25$ Consortium Fee Not Applicable -$ California Tire Fee 17.50$ 1,776,686.39$ 660-720 South Coast Fire Equipment, Inc. Tim Olley Sales Representative PROPOSAL FOR FURNISHING FIRE APPARATUS April 13, 2022 CHULA VISTA FIRE DEPARTMENT 276 Forth Ave. Chula Vista CA. 91910 1,721,733.00$ 99,934.00$ Customers price after discount 1,621,799.00$ The undersigned is prepared to provide for you, our customer, upon an order being placed by you, for final acceptance by South Coast Fire Equipment, Inc., at its corporate office in Ontario, California, the apparatus and equipment herein named and for the following prices: Each Said apparatus and equipment are to be built by the manfacturer and shipped in accordance with 150,651.64$ 4,218.25$ 17.50$ TOTAL PURCHASE PRICE 1,776,686.39$ PLEASE NOTE THE FOLLOWING ABOUT THIS QUOTATION: Payment options are available and are included under separate cover. One of these options may save your department a significant amount of money! -$ and regulations in effect at the time of bid, and with all National Fire Protection Association (NFPA) the specifications hereto attached, delays due to strikes, war or international conflict, failures to The specifications herein contained shall form a part of the final contract and are subject to obtain chassis, materials, or other causes beyond our control not preventing, within about Chula Vista calender days after receipt of this order and the acceptance thereof at our office in Ontario, California, and to be delivered to you at Pierce Arrow XT 107' Tractor Drawn Aerial (TDA) as per enclosed proposal for delivery sum of Discount if ordered by:5/1/2022 guidelines for Automotive Fire Apparatus as published at time of bid, except as modified by customer specifications. Any increased costs incurred by the first party because of future changes in or additions to said DOT or NFPA standards will be passed along to the customer as an addition to the price set forth above. Unless accepted within 30 days from the specified date, the right is reserved to withdraw this proposition. Respectfully Submitted, changes desired by the purchaser, provided such alterations are interlined prior to the acceptance by the company of the order to purchase, and provided such alterations do not materially affect the cost of the construction of the apparatus. The proposal for fire apparatus conforms with all Federal Department of Transportation (DOT) rules 2022/04/26 City Council Post Agenda Page 212 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA WAIVING THE COMPETITIVE BIDDING REQUIREMENT AND APPROVING THE PURCHASE OF ONE PIERCE ARROW XT 107’ TRACTOR DRAWN AERIAL (TDA) TO BE PURCHASED THROUGH THE MEASURE P EXPENDITURE PLAN WHEREAS, the Chula Vista Fire Department delivers Fire, Recue and Emergency Medical Services to Chula Vista residents, visitors, and employees every day; and WHEREAS, emergency response services are provided with several different types of fire apparatus, including triple combination pumpers/engines, aerial ladder trucks, heavy rescue, brush engines and command vehicles; and WHEREAS, the Fire Department continues to replace fire apparatus as part of the City’s 10-year Measure P Expenditure Plan specific to fire apparatus replacements; and WHEREAS, the Fire Department continues to move toward compliance with the recommended fire apparatus replacement cycles identified in the Council-approved Fire Department Fire Facility Master Plan (“Master Plan”); and WHEREAS, The Fire Department is recommending a sole source purchase with South Coast Fire Equipment for the acquisition of one Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) for the price of $1,970,452 in order to replace fire apparatus as contemplated in the Master Plan. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it waives the competitive bidding requirement pursuant to Chula Vista Municipal Code section 2.56.070.B.4, sole source. BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista that it approves a purchase agreement between the City and South Coast Fire Equipment for the acquisition of one Pierce Arrow XT 107’ Tractor Drawn Aerial (TDA) through the Measure P Expenditure Plan, in the form presented with such minor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk and authorizes and directs the Mayor to execute same. Presented by Approved as to form by Harry Muns Glen R. Googins Fire Chief City Attorney 2022/04/26 City Council Post Agenda Page 213 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Measure A Public Safety Expenditure Plan: Amend the Measure A Public Safety Expenditure Plan to Purchase Five Vehicles for the Police Department Report Number: 22-0132 Location: No specific geographic location Department: Police Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution approving the amended Measure A Public Safety Expenditure Plan to purchase five vehicles for the Police Department and amending the Fiscal Year 2022 expenditure budget for the Measure A Sales Tax Fund to fund the vehicles out of the Measure A fund. (4/5 Vote Required) SUMMARY The Police Department is proposing to amend the Measure A Public Safety Expenditure Plan to add the following vehicle equipment beginning FY2021-22, in accordance with the Police Department ongoing operational needs:  1.0 patrol vehicle to address a shortage of vehicles for uniformed supervisor positions previously added through Measure A.  2.0 unmarked management vehicles for a Police Captain and a new PIO Sergeant, previously added through Measure A.  2.0 vans to address a shortage of vehicles following the expansion of the Crime Laboratory and the Property & Evidence unit. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; 2022/04/26 City Council Post Agenda Page 214 of 667 P a g e | 2 therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION During its regular meeting held on April 14, 2022, the Measure A Citizens’ Oversight Committee (COC) recommended City Council approval of funding five vehicles for the Police Department in fiscal year 2021/2022, based on available fund balance in the Measure A Sales Tax Fund. The COC voted unanimously in favor of Measure A funding for these five vehicles. DISCUSSION With the successful passage of the Measure A Sales Tax, staff is continuing to implement the Public Safety Expenditure Plan (PSEP). To date, Measure A has provided funding for a total of 41 new sworn and 24 civilian positions in the Police Department, as outlined in the chart below. Figure 1. Police Department Public Safety Expenditure Plan as of 1/1/2022 Position FY19 FY20 FY21 FY22 Total POLICE CAPTAIN 1.0 1.0 POLICE LIEUTENANT 1.0 1.0 POLICE SERGEANT 3.0 3.0 1.0 7.0 POLICE AGENT 1.0 2.0 3.0 2.0 8.0 PEACE OFFICER 4.0 6.0 14.0 24.0 SWORN FTE TOTAL 5.0 11.0 21.0 4.0 41.0 CIVILIAN BACKGROUND INVESTIGATOR 1.0 1.0 COMMUNITY SERVICE OFFICER 2.0 2.0 DIGITAL FORENSICS TECHNICIAN II 2.0 2.0 FORENSICS SPECIALIST 1.0 1.0 INFORMATION TECHNOLOGY TECHNICIAN 1.0 1.0 COMMUNICATIONS CENTER MANAGER 1.0 1.0 POLICE DISPATCHER 2.0 5.0 7.0 PROPERTY & EVIDENCE SPECIALIST 3.0 3.0 PROPERTY & EVIDENCE SUPERVISOR 1.0 1.0 PUBLIC INFORMATION SPECIALIST 1.0 1.0 SR. POLICE RECORDS SPECIALIST 3.0 3.0 SR. POLICE TECHNOLOGY SPECIALIST 1.0 1.0 CIVILIAN FTE TOTAL 4.0 10.0 2.0 8.0 24.0 POLICE DEPARTMENT TOTAL 9.0 21.0 23.0 12.0 65.0 As a matter of routine formula, Measure A funding requests have already included most of the costs involved in providing necessary equipment, including vehicles, for most positions. As it relates to vehicles, most positions that have been authorized by Measure A have been in classifications or units that utilize a pooled vehicle arrangement, whereby a small group of employees share a small pool of vehicles (rather than each employee being assigned a vehicle on an individual basis). The pooled vehicle arrangement is sufficient for 2022/04/26 City Council Post Agenda Page 215 of 667 P a g e | 3 positions that are spread across a variety of shifts, such as patrol shifts, and for positions that primarily work in an office setting and do not require vehicles at all times, such as police detectives and some administrative positions. The pooled vehicle arrangement saves taxpayer resources by reducing expenditures while maintaining operational effectiveness, and also helps reduce ecological impacts by limiting expansion of the vehicle fleet unnecessarily. As it relates to vehicles for Measure A positions, the Police Department’s funding requests already included a designated formula to add vehicles at a ratio of 1:3 (one vehicle to every three sworn positions). But some positions are unique. The pooled vehicle arrangement is not appropriate for positions where a vehicle is required as a function of the to the duties and responsibilities of the position. For these unique positions, an individually-assigned vehicle is necessary to maintain operational efficiency and effectiveness. In addition, civilian positions were never included in the designated 1:3 formula since the majority of civilian positions do not require a vehicle. Here again, some positions are unique and an individually-assigned vehicle, or the expansion of a pool of vehicles, is necessary for these unique positions. While most positions that have been added will continue to utilize the pooled vehicle strategy, a limited number of positions previously added by Measure A were unique and cannot effectively operate with a pooled vehicle. The vehicles for these positions include the following:  Patrol sergeant vehicle: Between Fiscal Years 2020-2021, Measure A funding was authorized to add 4.0 patrol sergeants. In Fiscal Year 2021, Measure A funding was also authorized to expand the Police Department’s Homeless Outreach Team (HOT) by adding one 1.0 Police Agent and 1.0 Peace Officer. Funding to expand HOT Team vehicles was not included in the original request. In order to meet the unique vehicle needs of the HOT Team, the Police Department reassigned an existing vehicle that was originally intended to supplement the fleet of patrol sergeant vehicles. The Police Department is now seeking funding to replace the reassigned patrol sergeant vehicle.  Captain vehicle: In Fiscal Year 2022, Measure A funding was authorized to add 1.0 Police Captain. Funding to provide a vehicle for this position was not included in the original funding request. The roll of a Police Captain requires unique mobility and flexibility to respond to community needs or to command field incidents or investigations at any time, necessitating an individually-assigned vehicle. The Police Department is seeking funding to acquire a vehicle for the previously-authorized Police Captain.  PIO sergeant vehicle: In Fiscal Year 2020, Measure A funding was authorized to add 1.0 Police Sergeant that was originally anticipated to provide additional supervision of a growing School Resource Officer (SRO) Unit. Since then a number of circumstances included a pandemic that impacted schools, a variety of cultural and fiscal circumstances in the community and within sch ool districts, and changing community expectations has resulted in a reduction of school district funding that typically offsets the majority of SRO personnel costs. At the same time, communications with school districts indicated reduced support for the size and role of the SRO unit. As a result this combination of factors, the size of the SRO unit was not expanded as anticipated and the Police Sergeant position was no longer necessary. In the aftermath of a number of events between 2020- 2022, changing community expectations made clear the need to dedicate additional resources to increase transparency, improve public communication and engagement, and enhance relationship- building and trust-building initiatives. The Police Sergeant position was re-designated to meet this growing and evolving need by assigning the position as a full-time Public Information Officer. The 2022/04/26 City Council Post Agenda Page 216 of 667 P a g e | 4 roll of the Public Information Sergeant requires mobility and flexibility to respond to field incidents and community meetings at all hours of the day and night, necessitating an individually-assigned vehicle. The Police Department is seeking funding to acquire a vehicle for the Public Information Sergeant  Crime Laboratory van and Evidence Control Unit van: The Police Department’s Crime Laboratory and Evidence Control Unit (ECU) is responsible for the collection, management, maintenance and analysis of more than 40,000 evidence transactions each year. The Crime Laboratory was staffed by 2.0 full-time Forensic Specialists, and the ECU was staffed by 2.0 full-time and 3.0 part-time hourly Property and Evidence Specialists. The units were not meeting federal standards for the management and maintenance of thousands of items of evidence. In Fiscal Year 2022, Measure A funding was authorized to increase the size of the Police Department’s Crime Laboratory and ECU by adding 1.0 Forensic Specialist, 1.0 Property & Evidence Supervisor and 3.0 Property & Evidence Specialists. The Police Department’s typical programming for vehicles funded by Measure A was designed for sworn personnel only. As a result, the unique vehicle needs of the expanded Crime Laboratory and ECU were not included in the original funding request. These units manage the transport and control of evidence to and from major incident scenes, a variety of crime laboratories, evidence handling centers and other locations in our region. In order to meet the needs of the expanded Crime Lab and ECU, the Police Department is seeking funding to expand the small pool of vehicles currently available to the combined units. The total costs to purchase and outfit the five vehicles are outlined in the table below. Figure 2. Cost of Five Proposed Vehicles 5 Police Vehicles FY 21/22 Impact Patrol Sergeant vehicle $86,900 Police Captain vehicle $67,238 PIO Sergeant vehicle $67,238 Crime Laboratory Van $35,200 Evidence Control Unit Van $63,800 Total Vehicle Purchase & Outfitting $320,376 Because the vehicles will be purchased during the end of fiscal year 2022, the estimated vehicle maintenance costs (approximately $19,872 per year) will be effective in fiscal year 2023. The Police Department is requesting funding authorization to provide additional vehicles to these unique positions and units. The Police Department had also developed a new strategy so that future position requests that are deemed inappropriate for the 1:3 formula for vehicles acquisition, will include the costs for procur ement and maintenance of additional vehicles. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not 2022/04/26 City Council Post Agenda Page 217 of 667 P a g e | 5 applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT The charts below show the net impact for Measure A in fiscal year 2021/2022 for the proposed vehicles. Category Current FY22 PSEP Amendments Updated FY22 PSEP Beginning Police Department Funds Available $17,838,009 Sales Tax Revenue $12,718,496 $12,718,496 COPS Grant Funding $239,583 $239,583 REVENUE TOTAL $12,958,079 $0 $12,958,079 Personnel Expenses $9,768,893 $9,768,893 Supplies & Services $739,956 $739,956 Police Vehicles & Maintenance $196,094 $320,376 $516,470 City Support Staff $476,944 $476,944 Transfer Out: Pension Obligations $1,010,736 $1,010,736 EXPENSE TOTAL $12,192,623 $320,376 $12,512,999 NET FISCAL IMPACT $765,456 ($320,376) $445,080 Ending Police Department Available Funds $18,283,088 ONGOING FISCAL IMPACT Attachment 1 (Public Safety Expenditure Plan as of 4-14-2022) shows the amended Measure A PSEP, which includes the five proposed vehicles and associated ongoing vehicle maintenance costs estimated at approximately $19,872 per year. ATTACHMENTS Attachment 1: Police Department Public Safety Expenditure Plan as of 4-14-2022 Staff Contact: Captain Phil Collum, Police Department 2022/04/26 City Council Post Agenda Page 218 of 667 Intended Public Safety Spending PlanUpdated April 18, 2022Est. One‐half cent Sales Tax RevenuesPhase I ‐ Critical NeedsFiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Total2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 EstimatePolice Department Spending PlanEst. Beginning Police Department Funds Available 18,596,931$     18,575,491$     18,220,358$     17,523,697$     16,554,320$     16,293,545$     16,055,305$     15,643,296$     14,895,235$     13,649,579$     Estimated 1/2 cent Sales Tax Revenues 12,803,452$     13,083,840$     13,345,517$     13,612,427$     13,884,676$     14,162,370$     14,445,617$     14,734,529$     15,029,220$     15,329,804$     140,431,452$     COPS Grant Funding 250,000$           83,334$              ‐$                     ‐$                     ‐$                     ‐$                     ‐$                     ‐$                     ‐$                     ‐$                    333,334$             Estimated Funds Available ‐ Police Department 31,650,383$     31,742,665$     31,565,875$     31,136,124$     30,438,996$     30,455,915$     30,500,922$     30,377,825$     29,924,455$     28,979,383$      Proposed ExpendituresPeace Officers          4,602,506$        4,768,999$        4,904,927$        5,048,781$        5,201,104$        5,365,711$        5,549,873$        5,745,539$        5,953,568$        6,175,039$        53,316,047$       Police Agents 1,578,517          1,634,839          1,680,592          1,728,969          1,780,170          1,835,572          1,897,847          1,963,933          2,034,185          2,108,964          18,243,588$       Police Sergeants 1,554,642          1,608,700          1,651,863          1,697,396          1,745,450          1,797,400          1,855,866          1,917,745          1,983,373          2,053,021          17,865,456$       Police Lieutenant 260,159             268,935             275,796             283,006             290,592             298,778             308,007             317,746             328,037             338,925             2,969,981$         Police Captain 290,267             310,812             330,170             350,967             373,314             397,524             424,133             452,709             483,402             516,374             3,929,672$         Sworn ‐ non‐personnel costs 91,816               96,407               101,227             106,288             111,603             117,183             123,042             129,194             135,654             142,437             1,154,852$         Civilian Background Investigator 99,076               101,305             103,576             105,914             108,397             111,033             113,909             116,873             119,930             123,083             1,103,096$         Community Services Officer 170,491             174,474             178,542             182,735             187,186             191,906             197,042             202,343             207,816             213,469             1,906,004$         Digital Forensics Technician II 209,017             215,360             220,117             225,011             230,211             235,732             241,761             247,973             254,377             260,979             2,340,538$         Forensics Specialist 112,806             116,197             118,712             121,297             124,045             126,965             130,159             133,447             136,835             140,326             1,260,789$         Information Technology Technician 101,326             104,413             106,738             109,130             111,671             114,368             117,312             120,347             123,476             126,702             1,135,483$         Police Comm Systems Manager 160,667             163,977             167,333             170,775             174,439             178,335             182,615             187,015             191,539             196,191             1,772,886$         Police Dispatcher 785,757             803,361             820,781             838,694             857,695             877,835             899,767             922,357             945,632             969,618             8,721,497$         Property & Evidence Specialist 247,626             255,381             261,402             267,606             274,191             281,172             288,762             296,592             304,680             313,035             2,790,447$         Property & Evidence Supervisor 103,008             106,138             108,488             110,906             113,475             116,203             119,182             122,251             125,415             128,678             1,153,744$         Public Information Specialist 110,677             113,984             116,457             119,001             121,703             124,572             127,706             130,934             134,261             137,690             1,236,985$         Police Technology Specialist 147,093             150,181             153,316             156,534             159,957             163,595             167,584             171,688             175,909             180,253             1,626,110$         Sr Police Records Specialist 255,174             263,130             269,277             275,613             282,333             289,458             297,213             305,217             313,476             322,008             2,872,899$         Civilian Non‐Personnel Costs 21,953               23,051               24,203               25,413               26,684               28,018               29,419               30,890               32,435               34,056               276,122$             2% personnel cost savings (215,776)            (223,204)            (229,362)            (235,847)            (242,719)            (250,123)            (258,375)            (267,094)            (276,318)            (286,087)            (2,484,905)$        Computers and other equipment100,000             100,000             100,000              ‐                       ‐                       ‐                       ‐                       ‐                       ‐                       ‐                      300,000$             Police Vehicles, Outfitting, Maint., Fuel, etc. 137,088             138,747             271,069             542,925             325,529             168,491             170,415             316,070             615,217             376,189             3,061,740$         Drone Pilot In Command contractual costs 569,619             581,011             592,631             604,484              ‐                       ‐                       ‐                       ‐                       ‐                       ‐                      2,347,745$         Transfer Out: Pension Obligations 1,101,254          1,155,465          1,213,866          1,235,739          1,267,746          1,299,793          1,332,676          1,366,275          1,388,382          793,255             12,154,451$       Reimbursement for Support Staff (IT, Fin, HR, City Attorney) 480,129             490,644             500,457             510,466             520,675             531,089             541,711             552,545             563,596             574,868             5,266,179$         Total Police Department Proposed Expenditures13,074,892$     13,522,306$     14,042,178$     14,581,804$     14,145,451$     14,400,610$     14,857,626$     15,482,589$     16,274,876$     15,939,073$     146,321,407$     Est. Ending Police Department Available Funds 15,306,768$     14,839,782$     14,013,153$     12,908,869$     12,757,182$     12,455,152$     11,928,889$     11,024,588$     9,580,860$        9,055,542$        Reserve Contribution (25% of Operating Budget) 3,268,723$        3,380,577$        3,510,545$        3,645,451$        3,536,363$        3,600,153$        3,714,406$        3,870,647$        4,068,719$        3,984,768$        Est. Ending Police Department Available Funds including Reserves18,575,491$     18,220,358$     17,523,697$     16,554,320$     16,293,545$     16,055,305$     15,643,296$     14,895,235$     13,649,579$     13,040,310$     Assumptions:FY 2022 Sales Tax Revenue projection from HdL; 2% escalator per year starting in Fiscal year 2025.Salary projections reflect the most recent MOU agreements and assume 2% annual increase for every year there after.Phase I ‐ Critical Needs FundingAmounts budgeted in the Intended Public Safety Spending Plan may differ from the City's Annual Budget due to personnel costing estimates in the Annual Budget is based on individual employees projected salaries and benefits, and theIntended Public Safety Spending Plan are estimates that are based on positions. 2022/04/26 City Council Post Agenda Page 219 of 667 Intended Public Safety Spending PlanUpdated April 18, 2022Est. One‐half cent Sales Tax RevenuesPhase I ‐ Critical NeedsFiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Total2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 EstimateFlex benefit projections assume 10% annual increase.PERS projections based on most recent CalPERS Valuation Report.Workers Comp projections assume 5% annual increase for sworn positions and 3% annual increase for civilian positions.Personnel cost projections assume 2% vacancy savings due to attrition.Reimbursement for Support Staff is based on 3.75% of Measure A Sales Tax revenues..2022/04/26 City Council Post Agenda Page 220 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING THE AMENDED MEASURE A PUBLIC SAFETY EXPENDITURE PLAN TO PURCHASE FIVE VEHICLES FOR THE POLICE DEPARTMENT AND APPROPRIATING FUNDS THEREFOR WHEREAS, on February 27, 2018 the City Council approved Ordinance 3415 (“Ordinance”) that added Chapter 3.34 to Title 3 of the Chula Vista Municipal Code, establishing a one-half cent General Transactions and use Tax to be administered by the California Department of Tax and Fee administration; and WHEREAS, concurrently the City Council adopted a spending plan expressing its intention to expend any new sales tax revenues generated in the Ordinance on public safety (the “Intended Public Safety Expenditure Plan”); and WHEREAS, the Ordinance was placed on the ballot for the June 2018 election as “Measure A,” subject to approval by an affirmative, simple majority vote of the people as required by law; and WHEREAS, on June 5, 2018, the voters of the City of Chula Vista approved Measure A authorizing a one-half cent sales tax on retail sales within the City; and WHEREAS, on April 14, 2022, City staff presented to the Measure A Citizens Oversight Committee (COC) a proposed amendment to the Intended Expenditure Plan to purchase five (5) vehicles for the Police Department; and WHEREAS, the Measure A COC voted unanimously to recommend City Council approval of the five vehicles. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it (1) approves the amended Measure A Public Safety Expenditure Plan, in the form presented, to purchase five vehicles for the Police Department, and (2) amends the Fiscal Year 2022 Expenditure Budget for the Measure A Sales Tax Fund to fund the vehicles from the Measure A fund. Presented by Approved as to form by Chief Roxana Kennedy Glen R. Googins Police Department City Attorney 2022/04/26 City Council Post Agenda Page 221 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Community Facilities District Annexation: Election Regarding Annexation of Otay Ranch Village 3 Neighborhood R-20 into Community Facilities District 97-2 Report Number: 22-0064 Location: Located generally near the intersection of Main Street and Heritage Road, as shown more particularly on the annexation map. Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Conduct the public hearing and adopt resolutions: A) Making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors within proposed Annexation No. 12 to Community Facilities District (“CFD 97-2”), Improvement Area “C,” and B) Declaring the results of the special election relating to the levy of special taxes within Annexation No. 12 to CFD 97-2, Improvement Area “C.” SUMMARY In June 2021, the City Council approved amendments to the Otay Ranch Village 3 Sectional Planning Area (“SPA”) Plan. One of the amendments was to expand the Village 3 SPA boundaries to add an adjacent property (Neighborhood R-20) owned by the Flat Rock Land Company, LLC (“Developer”) an affiliate of HomeFed Corporation. A Tentative Map (“TM”) condition of approval required Neighborhood R-20 to be annexed into two existing maintenance Community Facility Districts (“CFDs”) for long-term maintenance of landscaping, open space and lands within the Otay Ranch Preserve. The Developer has requested that the City conduct proceedings to consider annexing Neighborhood R-20 into Improvement Area “C” of CFD 97-2 (“Preserve Maintenance District”). On March 15, 2022, the City took the first step in the annexation process by declaring its intention to annex the territory and calling a public hearing relating thereto. Tonight’s actions are the next steps in the formal proceedings to annex the territory within Otay Ranch Village 3 (referred to as “Annexation No. 12”) into CFD 2022/04/26 City Council Post Agenda Page 222 of 667 P a g e | 2 97-2 and Improvement Area “C” thereof: (a) conducting a public hearing pertaining to the proposed annexation, and (b) immediately following such public hearing, conducting an election of the qualified electors of Annexation No. 12 regarding the authorization to levy special taxes within Annexation No. 12 and, following the canvass of the ballots received, declaring the results of such election. Special taxes levied within Improvement Area “C” fund the costs of the Resource Monitoring Program as well as Preserve Operations and Maintenance consistent with the requirements of the Otay Ranch Resource Management Plan Phases I and II, plus a pro-rata share of Administrative Expenses of CFD 97-2. The City has retained the services of Willdan Financial Services as special tax consultant and Best, Best and Krieger LLP as legal counsel to provide assistance during the proceedings. Tonight’s action will complete the formal proceedings to annex Annexation No. 12 to CFD 97-2 and Improvement Area “C” thereof. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with CEQA and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION The City Council formed CFD 97-2 in July of 1998 to establish a long-term financing mechanism to monitor and maintain open space within the Otay Ranch Preserve. CFD 97-2 initially was divided into two Improvement Areas – Improvement Area “A” and Improvement Area “B.” Improvement Area “A” and Improvement Area “B” both fund the costs of the Resource Monitoring Program. Improvement Area “B” also funds costs associated with Preserve Operations and Maintenance. Improvement Area “C” pays for both the Resource Monitoring Program and Preserve Operations and Maintenance and was formed to include lands not originally contemplated to be included within the territory of CFD 97-2. Property to be Annexed Neighborhood R-20 in Otay Ranch Village 3 (Tentative Map CVT-20-0005) is owned by the Developer and is proposed to be annexed into CFD 97-2 and developed with 116 multi-family units. Staff has reviewed the proposed annexation boundary map and has found it acceptable and ready for approval by City Council. The annexation map is included as Attachment 1. Proposed Special Tax The rate and method of apportionment of the special taxes authorized to be levied within the existing boundaries of CFD 97-2 has four categories of taxation, as follows:  All developed Single-Family and Multi-Family Residences for which a building permit has been issued are taxed based on the square footage of the structure. Developed Industrial and Commercial parcels are taxed on the acreage of the Parcel. 2022/04/26 City Council Post Agenda Page 223 of 667 P a g e | 3  All final-mapped residential, industrial and commercial parcels for which a building permit has not been issued are taxed based on the acreage of the parcel.  Property not categorized as Developed or Final Mapped Property is taxed based on the acreage of the parcel.  Exempt property includes all publicly owned parcels and Homeowner’s Association parcels. These are not subject to the special tax. The proposed maximum special tax rates in the rate and method of apportionment were determined at the time of formation of CFD 97-2 in 1998. Maximum Special Taxes The approved maximum special tax rates for Fiscal Year 2021-2022 for Improvement Area “C” of CFD 97-2 are as follows: Table 1 – Maximum Special Tax for Monitoring Special Tax Category Maximum Special Tax (Monitoring) Category I – Residential (per square foot) $0.0085 Category I – Non-Residential (per acre) $138.72 Category II – Final Mapped Property (per acre) $138.72 Category III – Undeveloped Property (per acre) $89.54 Table 2 – Maximum Special Tax for Operations & Maintenance Special Tax Category Maximum Special Tax (Operations & Maintenance) Category I – Residential (per square foot) $0.0136 Category I – Non-Residential (per acre) $220.23 Category II – Final Mapped Property (per acre) $220.23 Category III – Undeveloped Property (per acre) $142.14 Annually, the City determines the amount that must be generated from the special taxes to meet budgeted costs plus operating reserves for Improvement Area “C.” The special taxes will first be levied against developed parcels to satisfy this amount. If insufficient special tax revenue is generated, the special taxes will then be levied against vacant land within Improvement Area “C,” starting with the Final Mapped Property. If the City determines that the amount that must be generated from special taxes in any fiscal year is less than the maximum special tax authorized to be levied on the developed parcels, the actual rate of the special taxes to be levied in that specific year will be reduced accordingly. The maximum rates for special taxes shown in the above tables are proposed to be increased each fiscal year, beginning Fiscal Year 2022-23, by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers (CPI-U, All Items) or zero percent (0%), whichever is greater. The special taxes are proposed to be collected in the same manner and at the same time 2022/04/26 City Council Post Agenda Page 224 of 667 P a g e | 4 as ordinary ad valorem property taxes; provided, however, that the administrator of CFD 97-2 may directly bill the special tax and may collect special taxes at a different time or in a different manner if necessary. Description of Tonight’s Proceedings Tonight’s hearing is being held in accordance with Section 53339.5 et seq. of the California Government Code. The first step in tonight’s proceeding is the public hearing. If the owners of one-half or more of the area of land in the territory included in the existing CFD 97-2 or Annexation No. 12 submit written protests against the annexation, the City will be prohibited from continuing proceedings for at least one year. Otherwise, the City may submit the question to the qualified electors in Annexation No. 12, which would be the property owner. The property owner has waived time limitations and requirements to comply with the Elections Code, as authorized in the CFD Law. Tonight’s action completes Annexation No. 12. There are two resolutions for this action item, which if approved would do the following: A) A Resolution making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors is the formal action making determinations relating to the annexation, setting forth specific information about the annexation, and calling an election relating to the levy of special taxes within Annexation No. 12. B) A Resolution declaring results of the special election provides for the approval of the certificate of the City Clerk, acting as election official, relating to the canvass of votes on the annexation and, if the qualified electors approve the annexation, the Resolution would formally approve and authorize the annexation and the levy of special taxes within Annexation No. 12. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There are no current year fiscal impacts to the General Fund or Development Services Fund as a result of this action. All costs of this annexation to the district are being borne by the developer and the on-going administration will be funded entirely by the district. ONGOING FISCAL IMPACT There is no ongoing fiscal impact to the General Fund or Development Services Fund as a result of this action. All costs of this annexation to the district are being borne by the developer and the on-going administration will be funded entirely by the district. ATTACHMENTS 2022/04/26 City Council Post Agenda Page 225 of 667 P a g e | 5 1. Boundary Map for CFD 97-2, Improvement Area C, Annexation No. 12 2. Rate of Method of Apportionment (“RMA”) for CFD 97-2, Improvement Area C, Annexation No. 12 Staff Contact: Kimberly Vander Bie, Associate Planner, Development Services Kimberly Elliott, Facilities Finance Manager, Development Services Tiffany Allen, Director, Development Services 2022/04/26 City Council Post Agenda Page 226 of 667 2022/04/26 City Council Post Agenda Page 227 of 667 1 Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 97-2 (PRESERVE MAINTENANCE DISTRICT ) Improvement Area C Annexation No. 12 A Special Tax of Community Facilities District No. 97 -2 (Preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Annexation No. 11 of Improvement Area “C” of the CFD and collected each Fiscal Year commencing with Fiscal Year 2022-2023 in an amount determined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property within Annexation No. 11 of Improvement Area “C” of the CFD, 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: "Acre or Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments 2022/04/26 City Council Post Agenda Page 228 of 667 2 of the Special Taxes; and any other costs required to administer Area C of the CFD as determined by the City. "Assessor's Parcel" or “Parcel” means a lot or parcel shown in an Assessor's Parcel Map with an assigned assessor's parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by assessor's parcel number. "Building Square Foot or Square Footage" means the square footage as shown on an Assessor’s Parcel’s building permit of Residential Property excluding garages or other structures not used as living space. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD" means Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista. "City" means the City of Chula Vista. "City Clerk" means the City Clerk for the City of Chula Vista or his or her designee. "City Manager" means the City Manager for the City of Chula Vista or his or her designee. "Community Purpose Facility Property" or "CPF Property" means all Assessor’s Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council" means the City Council of the City of Chula Vista, acting as the legislative body of the CFD. "County" means the County of San Diego, California. "Developed Property" means all Taxable Property for which a building permit was issued prior to the March 1st preceding the Fiscal Year in which the Special Tax is being levied. "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but which is not classified as Developed Property. "Final Subdivision Map" means a subdivision of property creating residential or non-residential buildable lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which 2022/04/26 City Council Post Agenda Page 229 of 667 3 building permits may be issued without further subdivision and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area C" or "Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property. "Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. "Operating Fund" means a fund that shall be maintained within the CFD for each Fiscal Year to pay for Resource Monitoring and/or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement" means for any Fiscal Year an amount equal to the Resource Monitoring Fund Requirement and the Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance" means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement" means for any Fiscal Year an amount equal to the budgeted costs for Preserve Operations and Maintenance plus a pro -rata share of the budgeted Administrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property" means any property within the boundaries of Area C of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub -association. "Public Property" means any property within the boundaries of Area C of the CFD that is, at the time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund" means a fund that shall be maintained for the CFD each Fiscal Year to provi de necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance" means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. 2022/04/26 City Council Post Agenda Page 230 of 667 4 "Reserve Fund Requirement" means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential dwelling unit. "Resource Management Plan" means the Otay Ranch Phase 1 Resource Management Plan also referred to as “The Otay Ranch Resource Management Plan” dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4, 1996, as both such plans may be amended from time to time. "Resource Monitoring Program" means those described in Attachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement" means for any Fiscal Year an amount for each Improvement Area equal to the Improvement Area’s fair share of the budgeted costs of the Resource Monitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Improvement Area C’s “fair share” shall be based on Improvement Area C’s percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax" means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for Area C to: (i) pay the Resource Monitoring Fund Requirement, and Preserve Operations and Maintenance Fund Requirement, less the Operating Fund Balance, and (ii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iii) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Area C of the CFD that are not exempt from the Special Tax pursuant to law or as defined below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the definitions above, all Taxable Property within Annexation No. 11 of Improvement Area “C” of the CFD shall be classified as Category I, Category II, Category III or Exempt as defined in Section C. The Taxable Property shall further be classified as Developed Property, Final Map Property or Undeveloped Property and shall be subject to Special Taxes pursuant to Sections C and D below. Developed Property shall be further assigned to a Land Use Class as specified in Table 1. 2022/04/26 City Council Post Agenda Page 231 of 667 5 C. MAXIMUM SPECIAL TAX RATE CATEGORY I Category I includes Developed Property within the District (“Category I”). The Maximum Special Tax for the Resource Monitoring Program and Preserve Operations and Maintenance for Fiscal Year 2021-2022 on Developed Property are the rates set forth in Ta ble 1 below. For Residential Property, the Special Tax shall be levied based upon Building Square Footage and for Non-Residential Property shall be levied based on Acreage. TABLE 1 Maximum Special Tax for Category I Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Description Resource Monitoring Operation & Maintenance Total Residential $0.0085/sq ft $0.0136/sq ft $0.0221/sq ft Non-Residential $138.72/acre $220.23/acre $358.95/acre CATEGORY II Category II includes each Assessor’s Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classified as a Developed Parcel (“Category II”). The Maximum Special Tax for the Resource Monitoring Program, and Preserve Operations and Maintenance approved for Fiscal Year 2020-2021 on each Assessor’s Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). TABLE 2 Maximum Special Tax for Category II Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Resource Monitoring Operation & Maintenance Total $138.72/acre $220.23/acre $358.95/acre CATEGORY III Category III includes each Assessor’s Parcel of Taxable Property within the District not subject to Special Tax under any other category (“Category III”). 2022/04/26 City Council Post Agenda Page 232 of 667 6 The Maximum Special Tax approved for Fiscal Year 2021-2022 on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portion of an Acre). TABLE 3 Maximum Special Tax for Category III Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Resource Monitoring Operation & Maintenance Total $89.54/acre $142.14/acre $231.68/acre EXEMPT CATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right-of-way, unmanned utility easements which make utilization for other than the purpose set forth in th e easement impractical, common areas, private streets and parks, and open space lots (“Exempt Category”). SPECIAL CASES In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class and be considered “Special Case”. The Maximum Special Tax that may be levied on an Assessor’s Parcel identified as Special Case shall be the sum of the Maximum Special T ax levies that may be levied on all Land Use Classes located on that Assessor’s Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. ANNUAL ESCALATION OF MAXIMUM SPECIAL TAX The Maximum Special Tax as shown in the tables abo ve that may be levied on each Assessor’s Parcel in Improvement Area C, Annexation No. 11, shall be increased each Fiscal Year beginning in Fiscal Year 2021-2022 and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers (CPI-U, All Items) or zero percent (0%), whichever is greater. D. METHOD OF APPORTIO NMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2022-2023, and for each following Fiscal Year, the Council shall levy the Improvement Area C, Annexation No. 11, Special Tax at the rates established pursuant to steps 1 through 4 below so that the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1: Determine the revenue which could be generated by Parcels assigned to Category I by multiplying the Building Square Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for the Resource Monitoring Program, and 2022/04/26 City Council Post Agenda Page 233 of 667 7 Preserve Operations and Maintenance for Parcels and adding to that the maximum revenue which could be generated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per Acre for the Resource Monitoring Program, and Preserve Operations and Maintenance. Step 2: If the total revenue as calculated in Step 1 is greater than the estimated Special Tax Liability for Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3: If the total revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category II, OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4: If the total revenue as calculated in Step 1 and 3 is less than the Special Tax Liability, for Improvement Area C, a Special Tax shall be levied upon each Parc el within Improvement Area C classified as Category III. The Special Tax for Parcels assigned the Category III shall b e calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcel in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portio n of the Special Tax Liability not related to delinquent Special Taxes to be collected from all Parcels in Category II I according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent (10%) 2022/04/26 City Council Post Agenda Page 234 of 667 8 annually up to the Maximum Special Tax as a conseque nce of delinquency or default by the owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied on their Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Administ rator determines that an error has occurred; the CFD Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If following such consultation and action, if any, by the CFD Administrator, the landowner or resident believes such error still exists; such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax levied on such Assessor’s Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of the CFD, a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the ann ual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. 2022/04/26 City Council Post Agenda Page 235 of 667 9 Attachment A Description of Preserve Operations and Maintenance Preserve Operations and Maintenance includes the maintenance, operation and management of the public or private property within boundaries of the Otay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i) Preserve Maintenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimm ings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (ii) Security. Development, implementation and ongoing provision of security programs to: enforce "no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off-road traffic; and maintain fences and trails. (iii) Preserve improvements: Acquire equipment and/or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be mod ified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource Management Plan. 2022/04/26 City Council Post Agenda Page 236 of 667 10 Attachment B Description of Resource Monitoring Implement the annual biota monitoring and reporting program consistent with the Resource Management Plan to identify changes in the quality and quantity of preserve resources including wildlife species, sensitive plants and sensitive habitat types. The above description of the Resource Monitoring is general in nature. The actual monitoring and reporting program may be modified from time to time as necessary in order to effectively provide such services consistent with the requirements of the Resource Management Plan. 2022/04/26 City Council Post Agenda Page 237 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), MAKING CERTAIN DETERMINATIONS AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS OF CERTAIN TERRITORY PROPOSED TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) AND IMPROVEMENT AREA “C” THERETO (ANNEXATION NO. 12) WHEREAS, the City Council of the City of Chula Vista (“City Council”), formed a Community Facilities District (“CFD”) and designated certain improvement areas therein pursuant to the terms and 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 (the “Act”), and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the “District”) and the Improvement Areas were designated as IMPROVEMENT AREA “A,” IMPROVEMENT AREA “B” and IMPROVEMENT AREA “C” of such District; and WHEREAS, the City Council, at the request of the owner of that property known as Otay Ranch Village 3 located within the Otay Ranch planning area, initiated proceedings pursuant to the Community Facilities District Law to annex such territory to the District and Improvement Area “C” thereto; and WHEREAS, notice of a public hearing relating to the annexation of such territory to the District and Improvement Area “C,” the extent of the territory to be annexed, the furnishing of certain public services and all other related matters has been given; and WHEREAS, the territory proposed to be annexed is known and designated as Community Facilities District No. 97-2 (Preserve Maintenance District), Improvement Area “C,” Annexation No. 12 (the “Territory”); and WHEREAS, it has now been determined that written protests have not been received by 50% or more of the registered voters residing either within the Territory or Improvement Area “C” and/or property owners representing more than one-half (1/2) or more of the area of land within the Territory or within Improvement Area “C”; and WHEREAS, inasmuch as there have been less than twelve (12) persons registered to vote 2022/04/26 City Council Post Agenda Page 238 of 667 Resolution No. 2022-___ Page No. 2 within the Territory for each of the 90 preceding days, this legislative body desires to submit t he levy of the required special tax to the landowners of the Territory, such landowners being the qualified electors as authorized by law. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, AS FOLLOWS: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Determinations. It is determined by this City Council that: (a) all minor defects in the proceedings are hereby corrected as authorized by Section 53323 of the Government Code of the State of California; (b) all proceedings prior hereto were valid and taken in conformity with the requirements of law, and specifically the provisions of the Community Facilities District Law, and this finding is made pursuant to the provisions and authorization of Section 53325.1 of the Government Code of the State of California; (c) the annexation of the Territory to the District and Improvement Area “C” as proposed conforms with the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts; (d) less than twelve (12) registered voters have resided within the Territory for each of the ninety (90) days preceding the close of the public hearing and, consequently, the qualified electors shall be the landowners of the Territory and each landowner who is the owner of record as of the close of the public hearing, 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 the Territory; (e) the time limit specified by the Community Facilities District Law for conducting an election to submit the levy of the special taxes to the qualified electors of the Territory and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of the Territory; (f) the City Clerk, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution annexing the Territory to the District and Improvement Area “C” thereto; and (g) the public services described in Section 4 herein proposed to be financed from the proceeds of special taxes to be levied within the Territory are necessary to meet increased demands placed upon the City as a result of development and/or rehabilitation occurring in the Territory. 2022/04/26 City Council Post Agenda Page 239 of 667 Resolution No. 2022-___ Page No. 3 SECTION 3. Boundaries of the Territory. The boundaries and parcels of land in the Territory and in which the public services are to be provided and on which special taxes will be levied in order to pay the costs and expenses for such public services are generally described as follows: All that Territory proposed to be annexed to the District and Improvement Area “C” thereto, as such property is shown on a map as previously approved by this legislative body, such map entitled “Annexation Map No. 12 of Community Facilities District No. 97-2 (Preserve Maintenance District), City Of Chula Vista, County Of San Diego, State Of California” (the “Annexation Map”), a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. The Annexation Map was filed in the Office of the San Diego County Recorder on March 29, 2022, in Book 49, Page 97 of Maps of Assessment and Community Facilities Districts and as Document No. 2022- 7000105. SECTION 4. Description of Services. The services that are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area “C” are certain services which are in addition to those services that were provided in or required for Improvement Area “C” prior to the formation of the District and the designation of Improvement Area “C” and did not replace services already available in the District or Improvement Area “C” at the time of formation of the District and the designation of Improvement Area “C”. A general description of the services authorized to be financed by the District within Improvement Area “C” is as follows: The monitoring, maintenance, operation and management of public property in which the City has a property interest and which conforms to the requirements of the Ordinance or private property within the Otay Ranch Preserve which is required by the Preserve Owner/Manager to be maintained as open space or for habitat maintenance or both. Such property may be located outside the boundaries of the District and outside the jurisdictional boundaries of the City of Chula Vista. Such services shall not include the maintenance, operation and/or management of any property owned, maintained, operated and/or managed by the federal and/or state government as open space, habitat maintenance and/or for any other purpose. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide such monitoring, maintenance, operation and management of such public property. The same types of services which are authorized to be financed by the District from the proceeds of special taxes levied within Improvement Area “C” are the types of services to be 2022/04/26 City Council Post Agenda Page 240 of 667 Resolution No. 2022-___ Page No. 4 financed from the proceeds of special taxes levied within the Territory. If and to the extent possible such services shall be provided in common within the District and the Territory. SECTION 5. Special Tax. Except where funds are otherwise available, a special tax sufficient to pay for such services and related incidental expenses authorized by the Community Facilities District Law, secured by recordation of a continuing lien against all non - exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit “A” (the “Improvement Area ‘C’ Rate and Method”), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the same services in Improvement Area “C,” except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the services in the Territory is higher or lower than the cost of providing those services i n Improvement Area “C.” Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Improvement Area “C” Rate and Method. The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer. The maximum special tax rate in Improvement Area “C” shall not be increased as a result of the annexation of the Territory to Improvement Area “C.” SECTION 6.. Election. The proposition related to the levy of the special tax shall be submitted to the qualified electors of the Territory, such electors being the landowners, with each landowner having one (1) vote for each acre or portion thereof of land which he or she owns within such annexed territory. The special election shall be held on April 26, 2022, immediately following the adoption of this Resolution, and such election shall be a special election to be conducted by the City Clerk (hereinafter “Election Official”). If the proposition for the levy of the special tax receives the approval of more than two-thirds (2/3) of the votes cast on the proposition, the special tax may be levied as provided for in this Resolution. SECTION 7. Ballot. The ballot proposal to be submitted to the qualified electors at the election shall generally be as follows: 2022/04/26 City Council Post Agenda Page 241 of 667 Resolution No. 2022-___ Page No. 5 PROPOSITION A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 97-2, IMPROVEMENT AREA “C” ANNEXATION NO. 12 AUTHORIZATION FOR SPECIAL TAX LEVY Shall Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista be authorized to levy special taxes within the territory identified as Annexation No. 12 to Improvement Area “C” of such District pursuant to the rate and method of apportionment of special taxes (the “Improvement Area “C” Rate and Method”) attached to this ballot to finance the authorized services and administrative expenses and to fund and replenish a reserve fund, all as provided for in the Improvement Area “C” Rate and Method. SECTION 8. Vote. The appropriate mark placed in box adjacent to the word “YES” shall be counted in favor of the adoption of the proposition, and the appropriate mark placed in the box adjacent to the word “NO” in the manner as authorized, shall be counted against the adoption of such proposition. SECTION 9. Election Procedure. This City Council hereby authorizes the Election Official to take any and all steps necessary for the holding of such election and ratifies any such steps previously taken by such Election Official which were necessary for the holding of such election. Such Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of such election, and such services shall include, but not be limited to the following: (a) Prepare and furnish to the election officers necessary election supplies for the conduct of the election. (b) Cause to be printed the requisite number of official ballots, tally sheets and other necessary forms. (c) Furnish and address official ballots for the qualified electors of the Territory. (d) Cause the official ballots to be mailed and/or delivered, as required by law. (e) Receive the returns of the election. (f) Sort and assemble the election material and supplies in preparation for the canvassing of the returns. (g) Canvass the returns of the election. (h) Furnish a tabulation of the number of votes given in the election. (i) Make all arrangements and take the necessary steps to pay all costs of the election incurred as a result of services performed 2022/04/26 City Council Post Agenda Page 242 of 667 Resolution No. 2022-___ Page No. 6 for the District and pay costs and expenses of all election officials. (j) Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. PRESENTED BY: APPROVED AS TO FORM BY: ____________________________ ________________________________ Tiffany Allen Glen R. Googins Director of Development Services City Attorney 2022/04/26 City Council Post Agenda Page 243 of 667 EXHIBIT “A” Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 97-2 (PRESERVE MAINTENANCE DISTRICT) Improvement Area C Annexation No. 12 A Special Tax of Community Facilities District No. 97 -2 (Preserve Maintenance District) of the City of Chula Vista ("CFD") shall be levied on all Assessor's Parcels in Annexation No. 12 of Improvement Area “C” of the CFD and collected each Fiscal Year commencing with Fiscal Year 2022-2023 in an amount determined through the application of the rate and method of apportionment of the Special Tax set forth below. All of the real property within Annexation No. 12 of Improvement Area C of the CFD, 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: "Acre or Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor's Parcel Map, or if the land area is not shown on an Assessor's Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other cond ominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footage of an Assessor's Parcel is equal to the Acreage multiplied by 43,560. "Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. "Administrative Expenses" means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator the reof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments 2022/04/26 City Council Post Agenda Page 244 of 667 Resolution No. 2022-___ Page No. 8 of the Special Taxes; and any other costs required to administer Area C of the CFD as determined by the City. "Assessor's Parcel" or “Parcel” means a lot or parcel shown in an Assessor's Parcel Map with an assigned assessor's parcel number. "Assessor's Parcel Map" means an official map of the Assessor of the County designating parcels by assessor's parcel number. "Building Square Foot or Square Footage" means the square footage as shown on an Assessor’s Parcel’s building permit of Residential Property excluding garages or other structures not used as living space. "CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. "CFD" means Community Facilities District No. 97-2 (Preserve Maintenance District) of the City of Chula Vista. "City" means the City of Chula Vista. "City Clerk" means the City Clerk for the City of Chula Vista or his or her designee. "City Manager" means the City Manager for the City of Chula Vista or his or her designee. "Community Purpose Facility Property" or "CPF Property" means all Assessor’s Parcels which are classified as community purpose facilities and meet the requirements of City of Chula Vista Ordinance No. 2883. "Council" means the City Council of the City of Chula Vista, acting as the legislative body of the CFD. "County" means the County of San Diego, California. "Developed Property" means all Taxable Property for which a building permit was issued prior to the March 1st preceding the Fiscal Year in which the Special Tax is being levied. "Final Map Property" means any residential lot or non-residential lot created by a Final Subdivision Map, but which is not classified as Developed Property. "Final Subdivision Map" means a subdivision of property creating residential or non-residential buildable lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.), or recordation of a condominium plan pursuant to California Civil Code 1352, that creates individual lots for which 2022/04/26 City Council Post Agenda Page 245 of 667 Resolution No. 2022-___ Page No. 9 building permits may be issued without further subdivision and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. "Fiscal Year" means the period starting July 1 and ending on the following June 30. "Improvement Area C" or "Area C" means Improvement Area C of the CFD, as identified on the boundary map for the CFD as amended from time to time. "Land Use Class" means any of the classes listed in Table 1, Table 2, or Table 3. "Maximum Special Tax" means the maximum Special Tax, determined in accordance with Section C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property. "Non-Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. "Operating Fund" means a fund that shall be maintained within the CFD for each Fiscal Year to pay for Resource Monitoring and/or Preserve Operations and Maintenance activities and Administrative Expenses. "Operating Fund Balance" means the amount of funds in the Operating Fund at the end of the preceding Fiscal Year. "Operating Fund Requirement" means for any Fiscal Year an amount equal to the Resource Monitoring Fund Requirement and the Preserve Operations and Maintenance Fund Requirement for the current Fiscal Year in which Special Taxes are levied. "Preserve Operations and Maintenance" means those activities described in Attachment A hereto which is incorporated herein by this reference. "Preserve Operations and Maintenance Fund Requirement" means for any Fiscal Year an amount equal to the budgeted costs for Preserve Operations and Maintenance plus a pro-rata share of the budgeted Administrative Expenses of the District for the current Fiscal Year in which Special Taxes are levied. "Property Owner Association Property" means any property within the boundaries of Area C of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub -association. "Public Property" means any property within the boundaries of Area C of the CFD that is, at t he time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. "Reserve Fund" means a fund that shall be maintained for the CFD each Fiscal Year to provide necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. "Reserve Fund Balance" means the amount of funds in the Reserve Fund at the end of the preceding Fiscal Year. 2022/04/26 City Council Post Agenda Page 246 of 667 Resolution No. 2022-___ Page No. 10 "Reserve Fund Requirement" means an amount equal to up to 100% of the Operating Fund Requirement for any Fiscal Year. "Residential Property" means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential dwelling unit. "Resource Management Plan" means the Otay Ranch Phase 1 Resource Management Plan also referred to as “The Otay Ranch Resource Management Plan” dated October 28, 1993, and the Otay Ranch Phase 2, Resource Management Plan dated June 4, 1996, as both such plans may be amended from time to time. "Resource Monitoring Program" means those activities described in Attachment B hereto which is incorporated herein by this reference. "Resource Monitoring Fund Requirement" means for any Fiscal Year an amount for each Improvement Area equal to the Improvement Area’s fair share of the budgeted costs of the Resource Monitoring Program plus a pro rata share of the budgeted Administrative Expenses of the CFD for the current Fiscal Year in which Special Taxes are levied. Impr ovement Area C’s “fair share” shall be based on Improvement Area C’s percentage of the total acreage within the Otay Ranch General Development Plan Planning Area for which a Resource Monitoring Program funding mechanism has been established. "Special Tax" means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor's Parcel of Developed Property and Undeveloped Property in Area C to fund the Special Tax Requirement. "Special Tax Requirement" means that amount required in any Fiscal Year for Area C to: (i) pay for Administrative Expenses as defined above, (ii) pay the Resource Monitoring Fund Requirement, and Preserve Operations and Maintenance Fund Requirement, less the Operating Fund Balance, and (iii) pay any amounts required to establish or replenish the Reserve Fund to the Reserve Fund Requirement; (iv) pay for reasonably anticipated delinquent Special Taxes based on the delinquency rate for Special Taxes levied in the previous Fiscal Year. "State" means the State of California. "Taxable Property" means all of the Assessor's Parcels within the boundaries of Area C of the CFD that are not exempt from the Special Tax pursuant to law or as defined below. "Undeveloped Property" means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year using the definitions above, all Taxable Property within Annexation No. 12 of Improvement Area “C” of the CFD shall be classified as Category I, Category II, Category III or Exempt as defined in Section C. The Taxable Property shall further be classified as Developed Property, Final Map Property or Undeveloped Property and shall be subject to Special T axes pursuant to Sections C and D below. Developed Property shall be further assigned to a Land Use Class as specified in Table 1. 2022/04/26 City Council Post Agenda Page 247 of 667 Resolution No. 2022-___ Page No. 11 C. MAXIMUM SPECIAL TAX RATE CATEGORY I Category I includes Developed Property within the District (“Category I”). The Maximum Special Tax for the Resource Monitoring Program and Preserve Operations and Maintenance for Fiscal Year 2021-2022 on Developed Property are the rates set forth in Table 1 below. For Residential Property, the Special Tax shall be levied based upon Buildin g Square Footage and for Non-Residential Property shall be levied based on Acreage and levied pro rata for any portion of an Acre. TABLE 1 Maximum Special Tax for Category I Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Description Resource Monitoring Preserve Operation & Maintenance Total Residential $0.0085/sq ft $0.0136/sq ft $0.0221/sq ft Non-Residential $138.72/acre $220.23/acre $358.95/acre CATEGORY II Category II includes each Assessor’s Parcel of Taxable Property within the District for which a Final Map has been recorded, but which is not classified as a Developed Parcel (“Category II”). The Maximum Special Tax for the Resource Monitoring Program, and Preserve Operations and Maintenance approved for Fiscal Year 2021-2022 on each Assessor’s Parcel in Category II is the rate set forth in Table 2 below (said amount to be levied pro rata for any portion of an Acre). TABLE 2 Maximum Special Tax for Category II Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Resource Monitoring Preserve Operation & Maintenance Total $138.72/acre $220.23/acre $358.95/acre CATEGORY III Category III includes each Assessor’s Parcel of Taxable Property within the District not subject to Special Tax under any other category (“Category III”). 2022/04/26 City Council Post Agenda Page 248 of 667 Resolution No. 2022-___ Page No. 12 The Maximum Special Tax approved for Fiscal Year 2021-2022 on Taxable Property within Category III is the rate set forth in Table 3 below (said amount to be levied pro rata for any portion of an Acre). TABLE 3 Maximum Special Tax for Category III Community Facilities District No. 97-2 Improvement Area C (Fiscal Year 2021-2022) Resource Monitoring Preserve Operation & Maintenance Total $89.54/acre $142.14/acre $231.68/acre EXEMPT CATEGORY The Exempt Category includes each property owned, conveyed or irrevocably offered for dedication to a public agency, or land which is in the public right -of-way, unmanned utility easements which make utilization for other than the purpose set forth in the easement impractical, common areas, private streets and parks, and open space lots (“Exempt Category”). SPECIAL CASES In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class and be considered “Special Case”. The Maximum Special Tax that may be levied on an Assessor’s Parcel identified as Special Case shall be the sum of the Maximum Special Tax levies that may be levied on all Land Use Classes located on that Assessor’s Parcel. The CFD Administrator shall determine the allocation to each Land Use Class. ANNUAL ESCALATION OF MAXIMUM SPECIAL TAX The Maximum Special Tax as shown in the tables above that may be levied on each Assessor’s Parcel in Improvement Area C, Annexation No. 11, shall be increased each Fiscal Year beginning in Fiscal Year 2021-2022 and thereafter by a factor equal to the annual percentage change in the San Diego Metropolitan Area Consumer Price Index for All Urban Consumers (CPI -U, All Items) or zero percent (0%), whichever is greater. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2022-2023, and for each following Fiscal Year, the Council shall levy the Improvement Area C, Annexation No. 12, Special Tax at the rates established pursuant to steps 1 through 4 below so that the amount of the Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied each Fiscal Year as follows: Step 1: Determine the revenue which could be generated by Parcels assigned to Category I by multiplying the Building Square Footage for Parcels classified as Residential Parcels by the Maximum Special Tax per Building Square Foot for the Resource Monitoring Program, and Preserve Operations and Maintenance for Parcels and adding to that the maximum revenue 2022/04/26 City Council Post Agenda Page 249 of 667 Resolution No. 2022-___ Page No. 13 which could be generated by multiplying the total acres for Parcels classified as Non-Residential Parcels by the Maximum Special Tax per Acre for the Resource Monitoring Program, and Preserve Operations and Maintenance. Step 2: If the total revenue as calculated in Step 1 is greater than the estimated Special Tax Liability for Improvement Area C, reduce the Special Tax for each Parcel proportionately so that the Special Tax levy for the Fiscal Year is equal to the Special Tax Liability for the Fiscal Year. Step 3: If the total revenue as calculated in Step 1 is less than the Special Tax Liability for Improvement Area C, a Special Tax shall be levied upon each Parcel within Improvement Area C, classified as Category II. The Special Tax for Parcels assigned to Category II shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Categor y II, OR The Maximum Special Tax rate for Parcels assigned to Category II. Step 4: If the total revenue as calculated in Step 1 and 3 is less than the Special Tax Liability, for Improvement Area C, a Special Tax shall be levied upon each Parcel within Impr ovement Area C classified as Category III. The Special Tax for Parcels assigned the Category III shall be calculated as the lesser of: The Special Tax Liability for Improvement Area C as determined by the City, less the total revenue generated for all Parcels under Step 1 and 3 above, divided by the total Acres for all Parcels within Improvement Area C assigned to Category III, OR The Maximum Special Tax rate for Parcels assigned to Category III and within Improvement Area C. However, in the event it is determined that the Special Tax Liability for Improvement Area C includes delinquent Special Taxes from Parcels in Category III from the prior Fiscal Year, the City shall determine the amount of delinquent taxes that arose from such Parcels and identify the owner(s). The amount of delinquent Special Taxes, if any, that arose from the applicable owner(s) shall first be divided by the total Category III Acres owned by such owner(s) and collected from the applicable owner(s) with the remaining portion of the Special Tax Liability not related to delinquent Special Taxes to be collected from all Parcels in Category III according to the procedure set forth in the preceding paragraph. Notwithstanding the above, under no circumstances will the Special Tax levied agains t any Assessor’s Parcel of Residential Property or Multi-Family Property for which an occupancy permit for private residential use has been issued be increased by more than ten percent (10%) annually up to the Maximum Special Tax as a consequence of delinq uency or default by the 2022/04/26 City Council Post Agenda Page 250 of 667 Resolution No. 2022-___ Page No. 14 owner of any other Assessor's Parcel within Area C of the CFD. E. APPEALS Any landowner or resident who pays the Special Tax and believes that the amount of the Special Tax levied on their Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error. If following such consultation, the CFD Ad ministrator determines that an error has occurred; the CFD Administrator may amend the amount of the Special Tax levied on such Assessor’s Parcel. If following such consultation and action, if any, by the CFD Administrator, the landowner or resident believes such error still exists; such person may file a written notice with the City Clerk of the City appealing the amount of the Special Tax levied on such Assessor’s Parcel. Upon the receipt of any such notice, the City Clerk shall forward a copy of such notice to the City Manager who shall establish as part of the proceedings and administration of the CFD, a special three-member Review/Appeal Committee. The Review/Appeal Committee may establish such procedures, as it deems necessary to undertake the review of any such appeal. The Review/Appeal Committee shall interpret this Rate and Method of Apportionment and make determinations relative to the annual administration of the Special Tax and any landowner or resident appeals, as herein specified. The decision of the Review/Appeal Committee shall be final and binding as to all persons. F. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of Area C of the CFD or as otherwise determined appropriate by the CFD Administrator. G. TERM OF SPECIAL TAX Taxable Property in Improvement Area C of the CFD shall remain subject to the Special Tax in perpetuity. 2022/04/26 City Council Post Agenda Page 251 of 667 Resolution No. 2022-___ Page No. 15 Attachment A Description of Preserve Operations and Maintenance Preserve Operations and Maintenance includes the maintenance, operation and management of the public or private property within boundaries of the Otay Ranch Preserve, as such boundaries may be modified from time to time, required by the Resource Management Plan to be maintained as open space or habitat preservation land or both. Such maintenance, operations and management shall include, but not be limited to, the following: (i) Preserve Maintenance. Development, implementation and ongoing provision of programs to maintain, operate and manage preserve habitat values through: cultivation, irrigation, trimming, spraying, fertilizing, and/or treatment of disease or injury; removal of trimmings, rubbish, debris and other solid waste; maintenance of trails; removal and control of exotic plant species (weeds); and control of cowbirds through trapping. (ii) Security. Development, implementation and ongoing provision of security programs to: enforce "no trespassing" rules; curtail activities that degrade resources, such as grazing, shooting, and illegal dumping; remove trash, litter, and other debris; control access; prohibit off -road traffic; and maintain fences and trails. (iii) Preserve improvements: Acquire equipment and/or install improvements necessary to maintain, operate and manage the open space and habitat preservation land described above. The above description of the Preserve Operations and Maintenance is general in nature. The actual maintenance, operations and management of the open space and habitat preservation land within the Otay Ranch Preserve may be modified from time to time as necessary in order to effectively provide such services in compliance with the requirements of the Resource Management Plan. 2022/04/26 City Council Post Agenda Page 252 of 667 Resolution No. 2022-___ Page No. 16 Attachment B Description of Resource Monitoring Implement the annual biota monitoring and reporting program consistent with the Resource Management Plan to identify changes in the quality and quantity of preserve resources including wildlife species, sensitive plants and sensitive habitat types. The above description of the Resource Monitoring is general in nature. The actual monitoring and reporting program may be modified from time to time as necessary in order to effectively provide such services consistent with the requirements of the Resource Management Plan. 2022/04/26 City Council Post Agenda Page 253 of 667 1 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), DECLARING THE RESULTS OF A SPECIAL ELECTION IN THAT TERRITORY DESIGNATED AS COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT), IMPROVEMENT AREA “C” ANNEXATION NO. 12 AND ADDING SUCH TERRITORY TO SUCH IMPROVEMENT AREA (ANNEXATION NO. 12) WHEREAS, the City Council of the City of Chula Vista, has previously undertaken proceedings to annex that territory known as Otay Ranch Village 3 located within the Otay Ranch to an existing Community Facilities District (“CFD”) and an Improvement Area designated therein pursuant to the terms and 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 (the “Act”) and the City of Chula Vista Community Facilities Distric t Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). This Community Facilities District and the Improvement Area are referred to as COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) (the “District”) and IMPROVEMENT AREA “C” respectively and such territory proposed to be annexed is referred to as ANNEXATION NO. 12 (the “Territory”); and, WHEREAS, this City Council did call for and order to be held an election to submit to the qualified electors of the Territory a proposition relating to the levy of special taxes within the Territory; and, WHEREAS, at this time said election has been held and the measure voted upon and such measure did receive the favorable 2/3's vote of the qualified electors, and this City Council desires to declare the results of the election in accordance with the provisions of the Elections Code of the State of California and to order that the Territory be added to the District and Improvement Area “C” thereof. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, acting as the Legislative Body of Community Facilities District No. 97 -2 (Preserve Maintenance District), AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. This City Council hereby receives and approves the CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST, as submitted by the City Clerk, 2022/04/26 City Council Post Agenda Page 254 of 667 2 acting in her capacity as the Election Official, said Statement setting forth the number of votes cast in the election, the measure voted upon, and the number of votes given for and/or against the measure voted upon. A copy of said Certificate and Statement is attached hereto, marked Exhibit “A,” referenced and so incorporated. SECTION 3. The City Clerk is hereby directed, pursuant to the provisions of the Elections Code of the State of California, to enter in the minutes the results of the election as set forth in said STATEMENT OF VOTES CAST. SECTION 4. This City Council does hereby determine and declare that the Territory is now added to and becomes a part of the District and Improvement Area “C” thereof. The City Council hereby further determines that the City Council is now authorized to levy the special taxes within the Territory as approved and authorized by the qualified electors of the Territory. PREPARED BY: APPROVED AS TO FORM BY: Tiffany Allen Glen R. Googins Director of Developmental Services City Attorney 2022/04/26 City Council Post Agenda Page 255 of 667 A-1 EXHIBIT “A” CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) The undersigned, ELECTION OFFICIAL OF THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, DOES HEREBY CERTIFY that pursuant to the provisions of Section 53326 of the Government Code and Division 12, commencing with Section 17000 of the Elections Code of the State of California, I did canvass the returns of the votes cast at the CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 97-2 (PRESERVE MAINTENANCE DISTRICT) IMPROVEMENT AREA “C” ANNEXATION AREA NO. 12 SPECIAL ELECTION in said City, held April 26, 2022. I FURTHER CERTIFY that this Statement of Votes Cast shows the whole number of votes cast in the Territory of the District in said City, and the whole number of votes cast for the Measure in the Territory of the District in said City, and the totals as shown for the Measure are full, true and correct. I. TOTAL NUMBER OF VOTES CAST: __________________ II. VOTES CAST ON PROPOSITION A: YES NO WITNESS my hand and Official Seal this ________ day of __________________, 2022. __________________________________ CITY CLERK ELECTION OFFICIAL CITY OF CHULA VISTA STATE OF CALIFORNIA 2022/04/26 City Council Post Agenda Page 256 of 667 April 26 , 2022 1 City Council Meeting Item 7.1 Otay Ranch Village 3 CFD Annexation No. 97 -2 Improvement Area C, Annexation No. 12 2022/04/26 City Council Post Agenda Page 257 of 667 SURROUNDING USES Otay Landfill Sesame Place / Amphitheatre Village 3 Quarry MSCP Preserve Area Industrial Otay River Valley / Preserve Area Industrial / Residential 2022/04/26 City Council Post Agenda Page 258 of 667 ▪June 2021 Council approved amendments to the Otay Ranch Village 3 SPA Plan ▪Added Neighborhood R-20 NEIGHBORHOOD R-20 PARCEL2022/04/26 City Council Post Agenda Page 259 of 667 ▪TM condition requires Neighborhood R -20 to be annexed into CFD 97-2 for long-term maintenance of open space and lands within the Otay Ranch Preserve ▪The City Council’s action on 3.15.22 initiated formal proceedings (Resolution of Intention) to annex R-20 into CFD 97-2 (Preserve Maintenance District), Improvement Area “C”, Annexation No. 12 COUNCIL’S ACTION ON 3/15/222022/04/26 City Council Post Agenda Page 260 of 667 BOUNDARY MAP2022/04/26 City Council Post Agenda Page 261 of 667 An election of the qualified electors of CFD 97-2, Annexation No. 12 was conducted regarding the authorization to levy special taxes within the annexation area LANDOWNER ELECTION2022/04/26 City Council Post Agenda Page 262 of 667 ▪Conduct a public hearing ▪Canvass the ballots received and declare the results of the election TONIGHT’S ACTIONS2022/04/26 City Council Post Agenda Page 263 of 667 RECOMMENDATION Approve resolutions: A.Authorizing submittal of levy of special taxes to the qualified electors of certain territory proposed to be annexed to CFD No. 97-2, Improvement Area “C”, Annexation No. 12 B.Declaring the results of a special election in that territory designated as CFD No. 97-2, Improvement Area “C”, Annexation No. 12 and adding such territory to such improvement area2022/04/26 City Council Post Agenda Page 264 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Community Facilities District Annexation: Election Regarding Annexation of Otay Ranch Village 3 Neighborhood R-20 into Community Facility District 18M Report Number: 22-0094 Location: Located generally near the intersection of Main Street and Heritage Road, as shown more particularly on the annexation map Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (“CEQA”) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Conduct the public hearing and adopt resolutions: A) Making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors within proposed Annexation No. 1 to CFD 18M; and B) Declaring the results of the special election relating to the levy of special taxes within Annexation No. 1 to CFD 18M. SUMMARY In June 2021, the City Council approved amendments to the Otay Ranch Village 3 Sectional Planning Area (“SPA”) Plan. One of the amendments was to expand the Otay Ranch Village 3 SPA boundaries to add an adjacent property (Neighborhood R-20) owned by the Flat Rock Land Company, LLC (“Developer”) an affiliate of HomeFed Corporation. A Tentative Map (“TM”) condition of approval required Neighborhood R- 20 to be annexed into two existing maintenance Community Facility Districts (“CFDs”) for long-term maintenance of landscaping, open space and lands within the Otay Ranch Preserve. The Developer has requested that the City conduct proceedings to consider annexing Neighborhood R-20 into Community Facilities District No. 18M (“Otay Ranch Village 3”) (“CFD 18M”). On March 15, 2022, the City took the first step in the annexation process by declaring its intention to annex the territory and calling a public hearing relating thereto. Tonight’s actions are the next steps in the formal proceedings to annex Neighborhood R-20 of Otay Ranch Village 3 (referred to as “Annexation No. 1”) into 2022/04/26 City Council Post Agenda Page 265 of 667 P a g e | 2 CFD No. 18M: (a) conducting a public hearing pertaining to the proposed annexation, and (b) immediately following such public hearing, conducting an election of the qualified electors of Annexation No. 1 regarding the authorization to levy special taxes within Annexation No. 1 and, following the canvass of the ballots received, declaring the results of such election. Special taxes levied within CFD 18M fund the costs of maintenance and replacement of certain landscaping, stormwater facilities, walls, fences, and trails, as more particularly described below. The City has retained the services of Willdan Financial Services as special tax consultant and Best, Best and Krieger LLP as legal counsel to provide assistance during the proceedings. Tonight’s action will complete the formal proceedings to annex Annexation No. 1 to CFD 18M. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with CEQA and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION Background The Council formed CFD 18M in November of 2016 to fund the costs for maintenance and replacement of (a) landscaping, including without limitation trees, slopes, parkways, and medians; (b) facilities that are directly related to storm water quality control; (c) walls and fencing; and (d) trails within Otay Ranch Village 3 master planned community, in addition to certain administrative expenses. Property to be Annexed Neighborhood R-20 in Otay Ranch Village 3 (Tentative Map CVT-20-0005) is owned by the Developer and is proposed to be annexed into CFD 18M and developed with 116 multi-family units. Staff has reviewed the proposed annexation boundary map and has found it acceptable and ready for approval by City Council. The annexation map is included as Attachment 1. Proposed Special Tax The rate and method of apportionment calculates the total annual special tax for each parcel based on budgeted costs for labor, water, and asset replacement, as described more fully below and in the rate and method of apportionment. CFD 18M has four categories of taxation, as follows:  Single-Family Detached Property  Single-Family Attached Property  Multi-Family Property  Non-Residential Property 2022/04/26 City Council Post Agenda Page 266 of 667 P a g e | 3 The proposed maximum special tax rates in the rate and method of apportionment were determined at the time of formation of CFD 18M in 2016. Maximum Special Taxes Typically, a community facilities district levies a special tax each year that is equal to the total cost of the services or facilities to be provided in that year. For CFD 18M, the maximum special tax in each year is calculated based on the “Maximum Special Tax Basis,” which is a formula to consider various cost components including labor, water, and asset replacement, and calcu late total actual costs for services funded by CFD 18M. The Fiscal Year 2021-2022 Maximum Special Tax Basis is described and calculated in the table below: Land Use Class Maximum Special Tax Basis for Labor Maximum Special Tax Basis for Water Maximum Special Tax Basis for Asset Replacement Maximum Special Tax Basis Single-Family Detached Property $1,038.98 $409.79 $287.40 $1,736.17 Single-Family Attached Property $831.18 $327.83 $229.92 $1,388.94 Multi-Family Property $83.11 $32.77 $23.00 $138.87 Non-Residential Property $4,155.93 $1,639.17 $1,149.67 $6,944.77 The maximum special tax for Fiscal Year 2021-22 is equal to the Fiscal Year 2021-22 Maximum Special Tax Basis. The Maximum Special Tax Basis is proposed to increase in subsequent years based on the components in the table above, as follows: i. The annual percentage change of the Maximum Special Tax Basis for Labor shall be equal to the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); and ii. The annual percentage change of the Maximum Special Tax Basis for Water shall be equal to the annual percentage change in the Otay Water District Commodity Rate; and iii. The annual percentage change of the Maximum Special Tax Basis for Asset Replacement shall be equal to the annual percentage change in the Engineering News Record Construction Cost Index for the Los Angeles Area. Although the maximum special tax for Fiscal Year 2021-22 is equal to the Fiscal Year 2021-22 Maximum Special Tax Basis, this may not always be the case. To protect against volatility in the maximum special tax, the maximum special tax will increase by a minimum of 2% and by no more than 6% in any year. This will help make the maximum special tax more predictable for property owners. 2022/04/26 City Council Post Agenda Page 267 of 667 P a g e | 4 The special taxes are proposed to be collected in the same manner and at the same time as ordinary ad valorem property taxes; provided, however, that the administrator of CFD 18M may directly bill the special tax and may collect special taxes at a different time or in a different manner if necessary. Description of Tonight’s Proceedings Tonight’s hearing is being held in accordance with Section 53339.5 et seq. of the California Government Code. The first step in tonight’s proceeding is the public hearing. If the owners of one-half or more of the area of land in the territory included in the existing CFD 18M or Annexation No. 1 submit written protests against the annexation, the City will be prohibited from continuing proceedings for at least one year. Otherwise, the City may submit the question to the qualified electors in Annexation No. 1, which would be the property owner. The property owner has waived time limitations and requirements to comply with the Elections Code, as authorized in the CFD Law. Tonight’s action completes Annexation No. 1. There are two resolutions for this action item, which if approved would do the following: A) The Resolution making certain determinations and authorizing submittal of the levy of special taxes to the qualified electors is the formal action making determinations relating to the annexation, setting forth specific information about the annexation, and calling an election relating to the levy of special taxes within Annexation No. 1. B) The Resolution declaring results of the special election provides for the approval of the certificate of the City Clerk, acting as election official, relating to the canvass of votes on the annexation and, if the qualified electors approve the annexation, the Resolution would formally approve and authorize the annexation and the levy of special taxes within Annexation No. 1. DECISION-MAKER CONFLICT Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property-related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for purposes of the Political Reform Act (Cal. Gov’t Code §87100, et seq.). Staff is not independently aware, and has not been informed by any City Councilmember, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There are no current year fiscal impacts to the General Fund or Development Services Fund as a result of this action. All costs of this annexation to the district are being borne by the developer and the on-going administration will be funded entirely by the district. ONGOING FISCAL IMPACT There is no ongoing fiscal impact to the General Fund or Development Services Fund as a result of this action. All costs of this annexation to the district are being borne by the developer and the on-going administration will be funded entirely by the district. 2022/04/26 City Council Post Agenda Page 268 of 667 P a g e | 5 ATTACHMENTS 1. Boundary Map for CFD 18M, Annexation No. 1 2. Rate of Method of Apportionment (“RMA”) for CFD 18M, Annexation No. 1 Staff Contact: Kimberly Vander Bie, Associate Planner, Development Services Kimberly Elliott, Facilities Finance Manager, Development Services Tiffany Allen, Director, Development Services 2022/04/26 City Council Post Agenda Page 269 of 667 2022/04/26 City Council Post Agenda Page 270 of 667 1 Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 18M (Otay Ranch Village 3) Annexation No. 1 A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels of Taxable Property within the boundaries of Community Facilities District No. 18M (Otay Ranch Village 3) of the City of Chula Vista and collected each Fiscal Year commencing with Fiscal Year 2022-23 in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 18M, 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: “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. Th e square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments of the Special Taxes; and any other costs required to administer the CFD as determined by the City. “Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned assessor’s parcel number. “Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by assessor’s parcel number. “CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. 2022/04/26 City Council Post Agenda Page 271 of 667 2 “CFD No. 18M” or “CFD” means Community Facilities District No. 18M (Otay Ranch Village 3) of the City of Chula Vista. “City” means the City of Chula Vista. “Community Purpose Facility Property” or “CPF Property” means all Assessor’s Parcels which are classified as community purpose facilities and meet the requirements of City Ordinan ce No. 2883. “Construction Cost Index” means, for any Fiscal Year, the applicable Construction Cost Index for the City of Los Angeles as set forth in the Engineering News Record for July of such Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Consumer Price Index for Urban Wage Earners and Clerical Workers” or “CPI-W” means the applicable CPI-W as set forth by the United States Department of Labor, Bureau of Labor Statistics for July of such Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Council” means the City Council of the City, acting as the legislative body of the CFD. “County” means the County of San Diego, California. “Developed Property” means all Taxable Property for which a building permit was issued prior to the March 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “DU” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units. “Exempt Property” means all Assessor’s Parcels within CFD No. 18M that are exempt from the Special Taxes pursuant to law or Section F herein. “Final Subdivision Map” means a subdivision of property creating residential or non-residential buildable lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.), or 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 and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. “Fiscal Year” means the period starting July 1 and ending on the following June 30. “Land Use Class” means any of the classes listed in Table 1. “Maximum Special Tax Basis” means the amount determined in accordance with Section C below that represents the actual costs associated with providing the Services funded by CFD No. 18M. “Maximum Special Tax” means the maximum Special Tax, determined in accordance with Section C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property. 2022/04/26 City Council Post Agenda Page 272 of 667 3 “Multi-Family Property” means all Assessor’s Parcels of Residential Property consisting of two or more for-rent Dwelling Units that share common walls, including, but not limited to, apartments and townhomes that are not for sale to an end user and are under common management . “Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. “Otay Water District Commodity Rate” means the maximum rate charged by the Otay Water District for recycled water on July 1st of any Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Property Owner Association Property” means any property within the boundaries of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. “Public Property” means any property within the boundaries of the CFD that is, at the time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. “Reserve Fund” means a fund that shall be maintained for the CFD each Fisc al Year to provide necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variat ions in annual Special Tax levies. “Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential dwelling unit (s). “Services” means those authorized services that may be funded by CFD No. 18M pursuant to the Act, as amended, including, without limitation, those services authorized to be funded by CFD No. 18M as set forth in the documents adopted by the City Council at the time CFD No. 18M was formed. “Single Family Attached Property” means all Assessor’s Parcels of for-sale Residential Property consisting of one or more Dwelling Unit(s) that share common walls with one or more other Dwelling Unit(s), including, but not limited to, duplexes, triplexes, townhomes, and condominiums. “Single Family Detached Property” means all Assessor’s Parcels of Residential Property consisting of a single Dwelling Unit. “Special Tax” means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor’s Parcel of Developed Property and Undeveloped Property in CFD No. 18M to fund the Special Tax Requirement. “Special Tax Requirement” means the amount, as determined by the CFD Administrator, for any Fiscal Year to: (i) pay the costs of providing the Services during such Fiscal Year, (ii) pay Administrative Expenses associated with the Special Tax, (iii) establish or replenish the Reserve Fund, (iv) pay incidental expenses related to the Services as authorized pursuant to the Act, (v) fund an amount equal to a reasonable estimate of delinquencies expected to occur in the Fiscal Year in which the Special Tax will be levied (“Estimated Special Tax Delinquency Amount”) and 2022/04/26 City Council Post Agenda Page 273 of 667 4 (vi) fund the shortfall, if any, in the Special Tax revenues collected in the preceding Fiscal Year necessary to fund the Special Tax Requirement for Services for such Fiscal Year where such shortfall resulted from delinquencies in the payment of Special Taxes in such Fiscal Year that exceeded the Estimated Special Tax Delinquency Amount included in the Special Tax Requirement for Services for such Fiscal Year, less (vii) any funds available in the Reserve Fund or other funds associated with CFD No. 18M. “State” means the State of California. “Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD No. 18M of the CFD that are not exempt from the Special Tax pursuant to law or as defined below. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year, beginning with Fiscal Year 2022-23, using the definitions above, each Assessor’s Parcel within CFD No. 18M shall be classified by the CFD Administrator as Taxable Property or Exempt Property. In addition, each such Fiscal Year, each Assessor’s Parcel of Taxable Property shall be further classified by the CFD Administrator as Developed Property or Undeveloped Property. Developed Property shall be further assigned to a Land Use Class as specified in Table 1. The Land Use Class of each Assessor’s Parcel of Residential Property or Non-Residential Property shall be determined based on the records of the County Assessor or other such information provided by the City. Commencing with Fiscal Year 2022-23 and for each subsequent Fiscal Year, Developed Property shall be subject to the levy of Special Taxes pursuant to Section C below. In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on such Assessor’s Parcel shall be the sum of the Maximum Special Taxes for all Land Use Classes located on that Assessor’s Parcel. C. MAXIMUM SPECIAL TAX RATE 1. Developed Property The Maximum Special Tax for any Assessor’s Parcel classified as Developed Property shall be determined by reference to Table 1 and the paragraphs that follow Table 1. 2022/04/26 City Council Post Agenda Page 274 of 667 5 TABLE 1 Maximum Special Tax Basis for Developed Property Community Facilities District No. 18M (Fiscal Year 2021-22) Land Use Class Maximum Special Tax Basis for Labor Maximum Special Tax Basis for Water Maximum Special Tax Basis for Asset Replacement Maximum Special Tax Basis Single Family Detached Property $ 1,038.98 $409.79 $287.40 $1,736.17 Single Family Attached Property $831.18 $327.83 $229.92 $1,388.94 Multi-Family Property $83.11 $32.77 $23.00 $138.87 Non-Residential Property $4,155.93 $1,639.17 $1,149.67 $6,944.77 The Maximum Special Tax Basis shall be equal to the sum of Maximum Special Tax Basis for Labor, Maximum Special Tax Basis for Water and Maximum Special Tax Basis for Asset Replacement as shown in Table 1 above. In determining the Maximum Special Tax Basis, the components of the Maximum Special Tax Basis for each Land Use Description shall be increased in the 2022-23 Fiscal Year, and each Fiscal Year thereafter, as follows: i. the annual percentage change of the Maximum Special Tax Basis for Labor shall be equal to the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); and ii. the annual percentage change of the Maximum Special Tax Basis for Water shall be equal to the annual percentage change in the Otay Water District Commodity Rate; and iii. the annual percentage change of the Maximum Special Tax Basis for Asset Replacement shall be equal to the annual percentage change in the Engineering News Record Construction Cost Index for the Los Angeles Area. The Fiscal Year 2021-22 Maximum Special Tax shall be equal to the Fiscal Year 2021-22 Maximum Special Tax Basis. In each subsequent Fiscal Year, the Maximum Special Tax shall be increased by an amount not less than two percent (2%) and not greater than six percent (6%) that results in a minimal absolute difference from the Maximum Special Tax Basis for that Fiscal Year. 2022/04/26 City Council Post Agenda Page 275 of 667 6 2. Other Property Types No Special Tax shall be levied on Undeveloped Property or Exempt Property. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2022-23, and for each subsequent Fiscal Year, the CFD Administrator shall levy the Special Tax on all Taxable Property of CFD No. 18M until the total amount of Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property within CFD No. 18M up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax Requirement. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within the CFD by more than ten percent (10%) above what such Special Tax would have been in the absence of delinquencies . E. PREPAYMENT OF THE SPECIAL TAX The Special Tax shall be levied in perpetuity for the purpose of financing ongoing authorized Services and therefore may not be prepaid. F. EXEMPTIONS The City Council shall classify as Exempt Property: (i) Public Property, (ii) Property Owner Association Property, (iii) CPF Property, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easement, including but not limited to property designated for open space, trails, pathways, parks or park and recreation related facilities, and (v) property reasonably designated by the City or CFD Administrator as Exempt Property due to deed restrictions, conservation easement, or similar factors. G. APPEALS Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation, the CFD Administrator determ ines that an error has occurred, then the CFD Administrator shall take any of the following actions, in order of priority, in order to correct the error: (i) Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date, (ii) Require the CFD to reimburse the landowner for the amount of the overpayment to the extent of available CFD funds, or (iii) Grant a credit against, eliminate or reduce the future Special Taxes on the landowner ’s 2022/04/26 City Council Post Agenda Page 276 of 667 7 Assessor’s Parcel(s) in the amount of the overpayment. If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the City Council. Upon the receipt of such notice, the City Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the City Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error. The City Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the City Council or designee shall be final. H. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a differe nt time or in a different manner if necessary to meet the financial obligations of the CFD or as otherwise determined appropriate by the CFD Administrator. I. TERM OF SPECIAL TAX Taxable Property in the CFD shall remain subject to the Special Tax in perpetuity. 2022/04/26 City Council Post Agenda Page 277 of 667 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, ACTING AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3), MAKING CERTAIN DETERMINATIONS AND AUTHORIZING SUBMITTAL OF LEVY OF SPECIAL TAXES TO THE QUALIFIED ELECTORS OF CERTAIN TERRITORY PROPOSED TO BE ANNEXED TO COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3) (ANNEXATION NO. 1) WHEREAS, the City Council of the City of Chula Vista (“City Council”), formed a Community Facilities District pursuant to the terms and 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 (the “Act”), and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). The Community Facilities District has been designated as COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3) (the “District”); and WHEREAS, the City Council, at the request of the owner of that property known as Otay Ranch Village 3 located within the Otay Ranch, initiated proceedings pursuant to the Community Facilities District Law to annex such territory to the District; and WHEREAS, notice of a public hearing relating to the annexation of such territory to the District, the extent of the territory to be annexed, the furnishing of certain public services and all other related matters has been given; and WHEREAS, the territory proposed to be annexed is known and designated as Community Facilities District No. 18M (Otay Ranch Village 3) Annexation No. 1 (the “Territory”); and WHEREAS, it has now been determined that written protests have not been received by 50% or more of the registered voters residing either within the Territory or the District and/or property owners representing more than one-half (1/2) or more of the area of land within the Territory or the District; and WHEREAS, inasmuch as there have been less than twelve (12) persons registered to vote within the Territory for each of the 90 preceding days, this legislative body desires to submit the levy of the required special tax to the landowners of the Territory, such landowners being the qualified electors as authorized by law. 2022/04/26 City Council Post Agenda Page 278 of 667 Resolution No. 2022-___ Page No. 2 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, AS FOLLOWS: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Determinations. It is determined by this City Council that: (a) all minor defects in the proceedings are hereby corrected as authorized by Section 53323 of the Government Code of the State of California; (b) all proceedings prior hereto were valid and taken in conformity with the requirements of law, and specifically the provisions of the Community Facilities District Law, and this finding is made pursuant to the provisions and authorization of Section 53325.1 of the Government Code of the State of California; (c) the annexation of the Territory to the District as proposed conforms with the City of Chula Vista Statement of Goals and Policies Regarding the Establishment of Community Facilities Districts; (d) less than twelve (12) registered voters have resided within the Territory for each of the ninety (90) days preceding the close of the public hearing and, consequently, the qualified electors shall be the landowners of the Territory and each landowner who is the owner of record as of the close of the public hearing, 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 the Territory; (e) the time limit specified by the Community Facilities District Law for conducting an election to submit the levy of the special taxes to the qualified electors of the Territory and the requirements for impartial analysis and ballot arguments have been waived with the unanimous consent of the qualified electors of the Territory; (f) the City Clerk, acting as the election official, has consented to conducting any required election on a date which is less than 125 days following the adoption of any resolution annexing the Territory to the District; and (g) the public services described in Section 4 herein proposed to be financed from the proceeds of special taxes to be levied within the Territory are necessary to meet increased demands placed upon the City as a result of development and/or rehabilitation occurring in the Territory. SECTION 3. Boundaries of the Territory. The boundaries and parcels of land in the Territory and in which the public services are to be provided and on which special taxes will 2022/04/26 City Council Post Agenda Page 279 of 667 Resolution No. 2022-___ Page No. 3 be levied in order to pay the costs and expenses for such public services are generally described as follows: All that Territory proposed to be annexed to the District, as such property is shown on a map as previously approved by this legislative body, such map entitled “Annexation Map No. 1 of Community Facilities District No. 18M (Otay Ranch Village 3), City Of Chula Vista, County Of San Diego, State Of California” (the “Annexation Map”), a copy of which is on file in the Office of the City Clerk and shall remain open for public inspection. The Annexation Map was filed in the Office of the San Diego County Recorder on March 29, 2022, in Book 49, Page 98 of Maps of Assessment and Community Facilities Districts and as Document No. 2022-7000106. SECTION 4. Description of Services. The services that are authorized to be financed by the District from the proceeds of special taxes levied therein are certain services which are in addition to those services that were provided in or required for the District prior to the formation of the District and did not replace services already available in the District at the time of formation of the District. A general description of the services authorized to be financed by the District is as follows: The maintenance and replacement of (a) landscaping, including without limitation trees, slopes, parkways, and medians; (b) facilities that are directly related to storm water quality control; (c) walls and fencing; and (d) trails within Otay Ranch Village 3 master planned community, in addition to certain administrative expenses. The District shall finance all direct, administrative and incidental annual costs and expenses necessary to provide such monitoring, maintenance, operation and management of such public property. The same types of services which are authorized to be financed by the District from the proceeds of special taxes levied therein are the types of services to be financed from the proceeds of special taxes levied within the Territory. If and to the extent possible such services shall b e provided in common within the District and the Territory. SECTION 5. Special Tax. Except where funds are otherwise available, a special tax sufficient to pay for such services and related incidental expenses authorized by the Community Facilities District Law, secured by recordation of a continuing lien against all non- exempt real property in the Territory, will be levied annually within the boundaries of such Territory. For further particulars as to the rate and method of apportionment of the proposed special tax, reference is made to the attached and incorporated Exhibit “A” (the “Rate and Method”), which sets forth in sufficient detail the method of apportionment to allow each landowner or resident within the proposed Territory to clearly estimate the maximum amount that such person will have to pay. 2022/04/26 City Council Post Agenda Page 280 of 667 Resolution No. 2022-___ Page No. 4 The special tax proposed to be levied within the Territory shall be equal to the special tax levied to pay for the same services in the District, except that a higher or lower special tax may be levied within the Territory to the extent that the actual cost of providing the services in the Territory is higher or lower than the cost of providing those services in the District. Notwithstanding the foregoing, the special tax may not be levied at a rate which is higher than the maximum special tax authorized to be levied pursuant to the Rate and Method. The special taxes herein authorized, to the extent possible, shall be collected in the same manner as ad valorem property taxes and shall be subject to the same penalties, procedure, sale and lien priority in any case of delinquency as applicable for ad valorem taxes. Any special taxes that may not be collected on the County tax roll shall be collected through a direct billing procedure by the Treasurer. The maximum special tax rate in the District shall not be increased as a result of the annexation of the Territory to the District. SECTION 6.. Election. The proposition related to the levy of the special tax shall be submitted to the qualified electors of the Territory, such electors being the landowners, with each landowner having one (1) vote for each acre or portion thereof of land which he or she owns within such annexed territory. The special election shall be held on April 26, 2022, immediately following the adoption of this Resolution, and such election shall be a special election to be conducted by the City Clerk (hereinafter “Election Official”). If the proposition for the levy of the special tax receives the approval of more than two-thirds (2/3) of the votes cast on the proposition, the special tax may be levied as provided for in this Resolution. SECTION 7. Ballot. The ballot proposal to be submitted to the qualified electors at the election shall generally be as follows: PROPOSITION A CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 18M, ANNEXATION NO. 1 AUTHORIZATION FOR SPECIAL TAX LEVY Shall Community Facilities District No. 18M (Otay Ranch Village 3) of the City of Chula Vista be authorized to levy special taxes within the territory identified as Annexation No. 1 to the District pursuant to the rate and method of apportionment of special taxes (the “Rate and Method”) attached to this ballot to finance the authorized services and administrative expenses and to fund and replenish a reserve fund, all as provided for in the Rate and Method. SECTION 8. Vote. The appropriate mark placed in box adjacent to the word “YES” shall be counted in favor of the adoption of the proposition, and the appropriate mark 2022/04/26 City Council Post Agenda Page 281 of 667 Resolution No. 2022-___ Page No. 5 placed in the box adjacent to the word “NO” in the manner as authorized, shall be counted against the adoption of such proposition. SECTION 9. Election Procedure. This City Council hereby authorizes the Election Official to take any and all steps necessary for the holding of such election and ratifies any such steps previously taken by such Election Official which were necessary for the holding of such election. Such Election Official shall perform and render all services and proceedings incidental to and connected with the conduct of such election, and such services shall include, but not be limited to the following: (a) Prepare and furnish to the election officers necessary election supplies for the conduct of the election. (b) Cause to be printed the requisite number of official ballots, tally sheets and other necessary forms. (c) Furnish and address official ballots for the qualified electors of the Territory. (d) Cause the official ballots to be mailed and/or delivered, as required by law. (e) Receive the returns of the election. (f) Sort and assemble the election material and supplies in preparation for the canvassing of the returns. (g) Canvass the returns of the election. (h) Furnish a tabulation of the number of votes given in the election. (i) Make all arrangements and take the necessary steps to pay all costs of the election incurred as a result of services performed for the District and pay costs and expenses of all election officials. (j) Conduct and handle all other matters relating to the proceedings and conduct of the election in the manner and form as required by law. PRESENTED BY: APPROVED AS TO FORM BY: Tiffany Allen Glen R. Googins Director of Developmental Services City Attorney 2022/04/26 City Council Post Agenda Page 282 of 667 EXHIBIT A Rate and Method of Apportionment of Special Tax City of Chula Vista Community Facilities District No. 18M (Otay Ranch Village 3) Annexation No. 1 A Special Tax as hereinafter defined shall be levied on all Assessor’s Parcels of Taxable Property within the boundaries of Community Facilities District No. 18M (Otay Ranch Village 3) of the City of Chula Vista and collected each Fiscal Year commencing with Fiscal Year 2022-23 in an amount determined by the CFD Administrator through the application of the procedures described below. All of the real property within CFD No. 18M, 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: “Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Subdivision Map, other final map, other parcel map, other condominium plan, or functionally equivalent map or instrument recorded in the Office of the County Recorder. The square footage of an Assessor’s Parcel is equal to the Acreage multiplied by 43,560. “Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, Part 1, Division 2 of Title 5 of the Government Code of the State of California. “Administrative Expenses” means the actual or estimated costs incurred by the City, acting for and on behalf of the CFD as the administrator thereof, to determine, levy and collect the Special Taxes, including salaries of City employees and a proportionate amount of the City’s general administrative overhead related thereto, and the fees of consultants and legal counsel providing services related to the administration of the CFD; the costs of collecting installments of the Special Taxes; and any other costs required to administer the CFD as determined by the City. 2022/04/26 City Council Post Agenda Page 283 of 667 Resolution No. 2022-___ Page No. 7 “Assessor’s Parcel” or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned assessor’s parcel number. “Assessor’s Parcel Map” means an official map of the Assessor of the County designating parcels by assessor’s parcel number. “CFD Administrator” means an official of the City, or designee thereof, responsible for determining the Special Tax Requirement and providing for the levy and collection of the Special Taxes. “CFD No. 18M” or “CFD” means Community Facilities District No. 18M (Otay Ranch Village 3) of the City of Chula Vista. “City” means the City of Chula Vista. “Community Purpose Facility Property” or “CPF Property” means all Assessor’s Parcels which are classified as community purpose facilities and meet the requirements of City Ordinance No. 2883. “Construction Cost Index” means, for any Fiscal Year, the applicable Construction Cost Index for the City of Los Angeles as set forth in the Engineering News Record for July of such Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Consumer Price Index for Urban Wage Earners and Clerical Workers ” or “CPI-W” means the applicable CPI-W as set forth by the United States Department of Labor, Bureau of Labor Statistics for July of such Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Council” means the City Council of the City, acting as the legislative body of the CFD. “County” means the County of San Diego, California. “Developed Property” means all Taxable Property for which a building permit was issued prior to the March 1st preceding the Fiscal Year in which the Special Tax is being levied. “Dwelling Unit” or “DU” means each separate residential dwelling unit that comprises an independent facility capable of conveyance or rental separate from adjacent residential dwelling units. “Exempt Property” means all Assessor’s Parcels within CFD No. 18M that are exempt from the Special Taxes pursuant to law or Section F herein. “Final Subdivision Map” means a subdivision of property creating residential or non-residential buildable lots by recordation of a final subdivision map or parcel map pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.), or 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 and is recorded prior to March 1 preceding the Fiscal Year in which the Special Tax is being levied. “Fiscal Year” means the period starting July 1 and ending on the following June 30. 2022/04/26 City Council Post Agenda Page 284 of 667 Resolution No. 2022-___ Page No. 8 “Land Use Class” means any of the classes listed in Table 1. “Maximum Special Tax Basis” means the amount determined in accordance with Section C below that represents the actual costs associated with providing the Services funded by CFD No. 18M. “Maximum Special Tax” means the maximum Special Tax, determined in accordance with Section C below that may be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property. “Multi-Family Property” means all Assessor’s Parcels of Residential Property consisting of two or more for-rent Dwelling Units that share common walls, including, but not limited to, apartments and townhomes that are not for sale to an end user and are under common management. “Non-Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for a structure or structures for non-residential use. “Otay Water District Commodity Rate” means the maximum rate charged by the Otay Water District for recycled water on July 1st of any Fiscal Year. In the event that this rate is no longer published or provided, the CFD Administrator shall choose a comparable rate to use in its place. “Property Owner Association Property” means any property within the boundaries of the CFD that is owned by, or irrevocably dedicated as indicated in an instrument recorded with the County Recorder to, a property owner association, including any master or sub-association. “Public Property” means any property within the boundaries of the CFD that is, at the time of the CFD formation, expected to be used for any public purpose and is owned by or dedicated to the federal government, the State, the County, the City or any other public agency. “Reserve Fund” means a fund that shall be maintained for the CFD each Fiscal Year to provide necessary cash flow for the first six months of each Fiscal Year, working capital to cover monitoring, maintenance and repair cost overruns and delinquencies in the payment of Special Taxes and a reasonable buffer to prevent large variations in annual Special Tax levies. “Residential Property” means all Assessor’s Parcels of Developed Property for which a building permit(s) has been issued for purposes of constructing one or more residential dwelling unit(s). “Services” means those authorized services that may be funded by CFD No. 18M pursuant to the Act, as amended, including, without limitation, those services authorized to be funded by CFD No. 18M as set forth in the documents adopted by the City Council at the time CFD No. 18M was formed. “Single Family Attached Property” means all Assessor’s Parcels of for-sale Residential Property consisting of one or more Dwelling Unit(s) that share common walls with one or more other Dwelling Unit(s), including, but not limited to, duplexes, triplexes, townhomes, and condominiums. “Single Family Detached Property” means all Assessor’s Parcels of Residential Property consisting of a single Dwelling Unit. 2022/04/26 City Council Post Agenda Page 285 of 667 Resolution No. 2022-___ Page No. 9 “Special Tax” means the Special Tax levied pursuant to the provisions of sections C and D below in each Fiscal Year on each Assessor’s Parcel of Developed Property and Undeveloped Property in CFD No. 18M to fund the Special Tax Requirement. “Special Tax Requirement” means the amount, as determined by the CFD Administrator, for any Fiscal Year to: (i) pay the costs of providing the Services during such Fiscal Year, (ii) pay Administrative Expenses associated with the Special Tax, (iii) establish or replenish the Reserve Fund, (iv) pay incidental expenses related to the Services as authorized pursuant to the Act, (v) fund an amount equal to a reasonable estimate of delinquencies expected to occur in the Fiscal Year in which the Special Tax will be levied (“Estimated Special Tax Delinquency Amount ”) and (vi) fund the shortfall, if any, in the Special Tax revenues collected in the preceding Fiscal Year necessary to fund the Special Tax Requirement for Services for such Fiscal Year where such shortfall resulted from delinquencies in the payment of Sp ecial Taxes in such Fiscal Year that exceeded the Estimated Special Tax Delinquency Amount included in the Special Tax Requirement for Services for such Fiscal Year, less (vii) any funds available in the Reserve Fund or other funds associated with CFD No. 18M. “State” means the State of California. “Taxable Property” means all of the Assessor’s Parcels within the boundaries of CFD No. 18M of the CFD that are not exempt from the Special Tax pursuant to law or as defined below. “Undeveloped Property” means, for each Fiscal Year, all Taxable Property not classified as Developed Property. B. ASSIGNMENT TO CATEGORIES OF SPECIAL TAX Each Fiscal Year, beginning with Fiscal Year 2022-23, using the definitions above, each Assessor’s Parcel within CFD No. 18M shall be classified by the CFD Administrator as Taxable Property or Exempt Property. In addition, each such Fiscal Year, each Assessor ’s Parcel of Taxable Property shall be further classified by the CFD Administrator as Developed Property or Undeveloped Property. Developed Property shall be further assigned to a Land Use Class as specified in Table 1. The Land Use Class of each Assessor’s Parcel of Residential Property or Non-Residential Property shall be determined based on the records of the County Asse ssor or other such information provided by the City. Commencing with Fiscal Year 2022-23 and for each subsequent Fiscal Year, Developed Property shall be subject to the levy of Special Taxes pursuant to Section C below. In some instances, an Assessor’s Parcel of Developed Property may contain more than one Land Use Class. The Maximum Special Tax levied on such Assessor’s Parcel shall be the sum of the Maximum Special Taxes for all Land Use Classes located on that Assessor’s Parcel. 2022/04/26 City Council Post Agenda Page 286 of 667 Resolution No. 2022-___ Page No. 10 C. MAXIMUM SPECIAL TAX RATE 1. Developed Property The Maximum Special Tax for any Assessor’s Parcel classified as Developed Property shall be determined by reference to Table 1 and the paragraphs that follow Table 1. TABLE 1 Maximum Special Tax Basis for Developed Property Community Facilities District No. 18M (Fiscal Year 2021-22) Land Use Class Maximum Special Tax Basis for Labor Maximum Special Tax Basis for Water Maximum Special Tax Basis for Asset Replacement Maximum Special Tax Basis Single Family Detached Property $ 1,038.98 per unit $409.79 per unit $287.40 per unit $1,736.17 per unit Single Family Attached Property $831.18 per unit $327.83 per unit $229.92 per unit $1,388.94 per unit Multi-Family Property $83.11 per unit $32.77 per unit $23.00 per unit $138.87 per unit Non-Residential Property $4,155.93 per Acre $1,639.17 per Acre $1,149.67 per Acre $6,944.77 per Acre The Maximum Special Tax Basis shall be equal to the sum of Maximum Special Tax Basis for Labor, Maximum Special Tax Basis for Water and Maximum Special Tax Basis for Asset Replacement as shown in Table 1 above. In determining the Maximum Special Tax Basis, the components of the Maximum Special Tax Basis for each Land Use Description shall be increased in the 2022-23 Fiscal Year, and each Fiscal Year thereafter, as follows: i. the annual percentage change of the Maximum Special Tax Basis for Labor shall be equal to the annual percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); and ii. the annual percentage change of the Maximum Special Tax Basis for Water shall be equal to the annual percentage change in the Otay Water District Commodity Rate; and iii. the annual percentage change of the Maximum Special Tax Basis for Asset Replacement shall be equal to the annual percentage change in the Engineering News Record Construction Cost Index for the Los Angeles Area. 2022/04/26 City Council Post Agenda Page 287 of 667 Resolution No. 2022-___ Page No. 11 The Fiscal Year 2021-22 Maximum Special Tax shall be equal to the Fiscal Year 2021-22 Maximum Special Tax Basis. In each subsequent Fiscal Year, the Maximum Special Tax shall be increased by an amount not less than two percent (2%) and not greater than six percent (6%) that results in a minimal absolute difference from the Maximum Special Tax Basis for that Fiscal Year. 2. Other Property Types No Special Tax shall be levied on Undeveloped Property or Exempt Property. D. METHOD OF APPORTIONMENT OF THE SPECIAL TAX Commencing with Fiscal Year 2022-23, and for each subsequent Fiscal Year, the CFD Administrator shall levy the Special Tax on all Taxable Property of CFD No. 18M until the total amount of Special Tax levied equals the Special Tax Requirement. The Special Tax shall be levied Proportionately on each Assessor’s Parcel of Developed Property within CFD No. 18M up to 100% of the applicable Maximum Special Tax to satisfy the Special Tax Requirement. Notwithstanding the above, under no circumstances will the Special Tax levied against any Assessor’s Parcel of Residential Property for which an occupancy permit for private residential use has been issued be increased as a consequence of delinquency or default by the owner of any other Assessor’s Parcel within the CFD by more than ten percent (10%) above what such Special Tax would have been in the absence of delinquencies. E. PREPAYMENT OF THE SPECIAL TAX The Special Tax shall be levied in perpetuity for the purpose of financing ongoing authorized Services and therefore may not be prepaid. F. EXEMPTIONS The City Council shall classify as Exempt Property: (i) Public Property, (ii) Property Owner Association Property, (iii) CPF Property, (iv) Assessor’s Parcels with public or utility easements making impractical their utilization for other than the purposes set forth in the easem ent, including but not limited to property designated for open space, trails, pathways, parks or park and recreation related facilities, and (v) property reasonably designated by the City or CFD Administrator as Exempt Property due to deed restrictions, co nservation easement, or similar factors. G. APPEALS Any landowner who pays the Special Tax and claims the amount of the Special Tax levied on his or her Assessor’s Parcel is in error shall first consult with the CFD Administrator regarding such error not later than thirty-six (36) months after first having paid the first installment of the Special Tax that is disputed. If following such consultation, the CFD Administrator determines that an error has occurred, then the CFD Administrator shall take any of t he following actions, in order of priority, in order to correct the error: 2022/04/26 City Council Post Agenda Page 288 of 667 Resolution No. 2022-___ Page No. 12 (i) Amend the Special Tax levy on the landowner’s Assessor’s Parcel(s) for the current Fiscal Year prior to the payment date, (ii) Require the CFD to reimburse the landowner for the amount o f the overpayment to the extent of available CFD funds, or (iii) Grant a credit against, eliminate or reduce the future Special Taxes on the landowner ’s Assessor’s Parcel(s) in the amount of the overpayment. If following such consultation and action by the CFD Administrator the landowner believes such error still exists, such person may file a written notice of appeal with the City Council. Upon the receipt of such notice, the City Council or designee may establish such procedures as deemed necessary to undertake the review of any such appeal. If the City Council or designee determines an error still exists, the CFD Administrator shall take any of the actions described as (i), (ii) and (iii) above, in order of priority, in order to correct the error. The City Council or designee thereof shall interpret this Rate and Method of Apportionment of Special Tax for purposes of clarifying any ambiguities and make determinations relative to the administration of the Special Tax and any landowner appeals. The decision of the City Council or designee shall be final. H. MANNER OF COLLECTION Special Taxes levied pursuant to Section D above shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided that the CFD Administrator may directly bill the Special Tax, may collect Special Taxes at a different time or in a different manner if necessary to meet the financial obligations of the CFD or as otherwise determined appropriate by the CFD Administrator. I. TERM OF SPECIAL TAX Taxable Property in the CFD shall remain subject to the Special Tax in perpetuity. 2022/04/26 City Council Post Agenda Page 289 of 667 1 RESOLUTION NO. __________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, ACTING IN ITS CAPACITY AS THE LEGISLATIVE BODY OF COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3), DECLARING THE RESULTS OF A SPECIAL ELECTION IN THAT TERRITORY DESIGNATED AS COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3), ANNEXATION NO. 1 AND ADDING SUCH TERRITORY TO THE DISTRICT (ANNEXATION NO. 1) WHEREAS, the City Council of the City of Chula Vista (the “City Council”), has previously undertaken proceedings to annex that territory known as Otay Ranch Village 3 located within the Otay Ranch to an existing Community Facilities District pursuant to the terms and 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 (the “Act”) and the City of Chula Vista Community Facilities District Ordinance enacted pursuant to the powers reserved by the City of Chula Vista under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California (the “Ordinance”) (the Act and the Ordinance may be referred to collectively as the “Community Facilities District Law”). This Community Facilities District are referred to as COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3) (the “District”), and such territory proposed to be annexed is referred to as ANNEXATION NO. 1 (the “Territory”); and WHEREAS, this City Council did call for and order to be held an election to submit to the qualified electors of the Territory a proposition relating to the levy of special taxes within the Territory; and WHEREAS, at this time said election has been held and the measure voted upon and such measure did receive the favorable 2/3's vote of the qualified electors, and this City Council desires to declare the results of the election in accordance with the provisions of the Elections Code of the State of California and to order that the Territory be added to the District. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, acting as the Legislative Body of Community Facilities District No. 18M (Otay Ranch Village 3), AS FOLLOWS: SECTION 1. The above recitals are all true and correct. SECTION 2. This City Council hereby receives and approves the CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST, as submitted by the City Clerk, acting in her capacity as the Election Official, said Statement setting forth the number of votes cast in the election, the measure voted upon, and the number of votes given for and/or against the 2022/04/26 City Council Post Agenda Page 290 of 667 2 measure voted upon. A copy of said Certificate and Statement is attached hereto, marked Exhibit “A,” referenced and so incorporated. SECTION 3. The City Clerk is hereby directed, pursuant to the provisions of the Elections Code of the State of California, to enter in the minutes the results of the election as set forth in said STATEMENT OF VOTES CAST. SECTION 4. This City Council does hereby determine and declare that the Territory is now added to and becomes a part of the District. The City Council hereby further determines that the City Council is now authorized to levy the special taxes within the Territory as approved and authorized by the qualified electors of the Territory. PREPARED BY: APPROVED AS TO FORM BY: Tiffany Allen Glen R. Googins Director of Developmental Services City Attorney 2022/04/26 City Council Post Agenda Page 291 of 667 A-1 EXHIBIT “A” CERTIFICATE OF ELECTION OFFICIAL AND STATEMENT OF VOTES CAST STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) The undersigned, ELECTION OFFICIAL OF THE CITY OF CHULA VISTA, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, DOES HEREBY CERTIFY that pursuant to the provisions of Section 53326 of the Government Code and Division 12, commencing with Section 17000 of the Elections Code of the State of California, I did canvass the returns of the votes cast at the CITY OF CHULA VISTA COMMUNITY FACILITIES DISTRICT NO. 18M (OTAY RANCH VILLAGE 3) ANNEXATION AREA NO. 1 SPECIAL ELECTION in said City, held April 26, 2022. I FURTHER CERTIFY that this Statement of Votes Cast shows the whole number of votes cast in the Territory of the District in said City, and the whole number of votes cast for the Measure in the Territory of the District in said City, and the totals as shown for the Measure are full, true and correct. I. TOTAL NUMBER OF VOTES CAST: __________________ II. VOTES CAST ON PROPOSITION A: YES NO WITNESS my hand and Official Seal this ________ day of __________________, 2022. __________________________________ CITY CLERK ELECTION OFFICIAL CITY OF CHULA VISTA STATE OF CALIFORNIA 2022/04/26 City Council Post Agenda Page 292 of 667 April 26, 2022 1 City Council Meeting Item 7.2 Otay Ranch Village 3 CFD Annexation No. 18M Annexation No. 1 2022/04/26 City Council Post Agenda Page 293 of 667 SURROUNDING USES Otay Landfill Sesame Place / Amphitheatre Village 3 Quarry MSCP Preserve Area Industrial Otay River Valley / Preserve Area Industrial / Residential 2022/04/26 City Council Post Agenda Page 294 of 667 ▪June 2021 Council approved amendments to the Otay Ranch Village 3 SPA Plan ▪Added Neighborhood R-20 NEIGHBORHOOD R-20 PARCEL2022/04/26 City Council Post Agenda Page 295 of 667 ▪TM condition requires Neighborhood R -20 to be annexed into CFD 18M for long -term maintenance of landscaping ▪The City Council’s action on 3.15.22 initiated formal proceedings (Resolution of Intention) to annex R-20 into CFD 18M, Annexation No. 1 COUNCIL’S ACTION ON 3/15/222022/04/26 City Council Post Agenda Page 296 of 667 BOUNDARY MAP2022/04/26 City Council Post Agenda Page 297 of 667 An election of the qualified electors of CFD 18M, Annexation No. 1 was conducted regarding the authorization to levy special taxes within the annexation area LANDOWNER ELECTION2022/04/26 City Council Post Agenda Page 298 of 667 ▪Conduct a public hearing ▪Canvass the ballots received and declare the results of the election TONIGHT’S ACTIONS2022/04/26 City Council Post Agenda Page 299 of 667 RECOMMENDATION Approve resolutions: A.Authorizing submittal of levy of special taxes to the qualified electors of certain territory proposed to be annexed to CFD No. 18M, Annexation No. 1 B.Declaring the results of a special election in that territory designated as CFD No. 18M, Annexation No. 1 and adding such territory to such improvement area 2022/04/26 City Council Post Agenda Page 300 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Municipal Code Amendment: Amend the Chula Vista Municipal Code Related to Allowing Two-Unit Developments and Urban Lot Splits, as Required by Senate Bill 9, Recent State Legislation adopted to Increase Housing Opportunities Report Number: 22-0095 Location: No specific geographic location Department: Development Services Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Conduct the public hearing and place an ordinance on first reading to amend various sections in the Chula Vista Municipal Code related to allowing two-unit developments and urban lot splits, in accordance with Senate Bill 9. (First Reading) SUMMARY On August 30, 2021, the California legislature adopted Senate Bill 9 (“SB 9”) and on September 16, 2021, it was signed into law by Governor Newsom. The bill took effect on January 1, 2022 and seeks to provide more housing opportunities to address the critical housing shortage in the state by establishing a state-mandated local program. As a result, all California jurisdictions must comply with the requirements of the bill whether or not local jurisdictions pass ordinances implementing SB 9’s requirements. The new law requires jurisdictions to ministerially approve two-unit developments on single-family residentially zoned lots as well as allowing an owner of a single-family zoned property to split their single- family zoned lot into two single-family zoned lots of relatively equal size. Development of up to two dwelling units would then be allowed on both lots resulting from the split, for a total capacity of four dwelling units where there used to be only one unit allowed. The four dwelling unit cap also applies if Accessory Dwelling Units and Junior Accessory Dwelling Units are proposed. 2022/04/26 City Council Post Agenda Page 301 of 667 P a g e | 2 This hearing is being held to consider a draft ordinance which implements SB 9. ENVIRONMENTAL REVIEW The Director of Development Services reviewed the proposed legislative act ion for compliance with the California Environmental Quality Act (“CEQA”) and determined that the action is not a “Project” as defined under Section 15378 of the CEQA State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the Director of Development Services has also determined that the action is not a “Project” pursuant to Government Codes Sections 65852.21(j) and 66411.7(n). BOARD/COMMISSION/COMMITTEE RECOMMENDATION On April 13, 2022, the City of Chula Vista Planning Commission recommended adoption of the SB 9 Ordinance amendments by a vote of 5-0-0. DISCUSSION SB 9 addresses two separate issues: the development of up to two units on single -family zoned lots (“Two- Unit Developments”) and the division of existing single-family zoned parcels into two new single-family zoned lots via a parcel map (“Urban Lot Splits”). SB 9 allows local jurisdictions to pass their own ordinance which both codifies the requirements of the state law as well as establishes objective standards by which Two-Unit Developments and Urban Lot Splits may occur. So long as the City’s objective development and zoning standards do not physically preclude the construction of up to two units on a lot or preclude each unit from being constructed at a minimum of 800 square feet (“sf”), then the City can establish objective criteria for the program. Likewise, such objective development or zoning criteria must allow a property owner to split their single-family zoned lot into two lots, each with a minimum of 1,200 sf. To comply with the requirements of SB 9, staff has drafted an ordinance amending Chula Vista Municipal Code (“CVMC”) Chapters 18.18 (Tentative Parcel Maps) and 19.58 (Uses), and Sections 5.68.050 (Short-Term Rentals – Eligibility), 19.22.020 (R-E – Residential Estate Zone – Permitted Uses) and 19.24.020 (R-1 – Single- Family Residential Zone – Permitted Uses) (the “Proposed Ordinance”). The following are some of the major provisions of SB 9 which are reflected in the Proposed Ordinance:  Applicability – Two-Unit Developments and Urban Lot Split parcel maps are allowed on any single - family zoned parcel which: o Can accommodate the resulting second unit o Can accommodate a second lot with a minimum size of 1,200 sf o Is not subject to an historic designation o Would not require the elimination of affordable housing units o Have not already been split by the allowances set forth in SB 9  Number of units and parcels – no more than two dwelling units may be developed on a single-family zoned lot. Any parcel to be divided through the Urban Lot Split parcel map process must be a minimum of 2,400 sf in area. Any lot created through an Urban Lot split parcel map cannot be less than 40% of the original lot’s size. If a parcel is split through the Urban Lot Split parcel map process, 2022/04/26 City Council Post Agenda Page 302 of 667 P a g e | 3 both resulting parcels may have a Two-Unit Development on them for a total of four dwelling units across the two parcels.  Accessory Dwelling Units and Junior Accessory Dwelling Units – if a parcel is split through the Urban Lot split parcel map process, and both resulting parcels have Two-Unit Developments on them, no Accessory Dwelling Units (“ADUs”) or Junior Accessory Dwelling Units (“JADUs”) may be permitted. If, however, a property owner does not split the parcel and wishes to combine the benefits of SB 9’s Two-Unit Development and ADU/JADU ordinances, no more than four units, in any combination, may be permitted on a single-family lot.  Demolition – the provisions of SB 9 cannot be invoked if the resulting Two-Unit Development would require the demolition of 25% or more of the existing exterior structural walls, unless local demolition ordinances allow, or the existing units have not been inhabited by a tenant in the last three years.  Housing – the provisions of SB 9 cannot be invoked if the development of the parcels would require the demolition or alteration of housing that restricts rents to levels affordable to persons and families of moderate, low, or very low income; housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power; or housing that has been occupied by a tenant in the last three years.  Setbacks – new units shall comply with the underlying front yard and street-side setbacks as set forth in the CVMC for single-family zones; side and rear yard setbacks shall have a maximum of four feet or the setback for the zone, whichever is less.  Easements and Access – a parcel created through an Urban Lot Split parcel map subdivision shall provide necessary easements required for the provision of public services and facilities to the newly created lot and shall provide access to or adjoin the public right-of-way for the newly created lot.  Parking – one off-street parking space per unit may be required unless the lot is within one-half mile of a high-quality transit corridor or transit stop, or on the same block as a car share vehicle.  Occupancy and Short-Term Rentals – an applicant for an Urban Lot Split parcel map must sign an affidavit stating that they intend to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of said Urban Lot Split parcel map. Per SB 9, any unit created through the Two-Unit Development process must be used for residential purposes only and if rented, must be rented for a term of 30-days or longer. These provisions preclude units created through the Two-Unit Development process from being used for commercial purposes or being operated as Short-Term Rentals.  Covenant – Staff has included a provision in the proposed ordinance requiring property owners to record a covenant against their property detailing the owner occupancy requirements, as well as the permitted sizes and attributes of the units and parcels, and minimum rental restrictions. 2022/04/26 City Council Post Agenda Page 303 of 667 P a g e | 4  Housing Element Inventory – the number of dwelling units constructed, and the number of Urban Lot Split applications received pursuant to this ordinance shall be included in the Housing Element reporting process during the 2021-2029 Housing Element cycle. Conclusion Staff recommends that the City Council place the Proposed Ordinance amending CVMC Chapters 18.18 and 19.58; and Sections 5.68.050, 19.22.020 and 19.24.020 on first reading. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the California Political Reform Act (Cal. Gov’t. Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current fiscal year impact to the General Fund or Development Services Fund as a result of the adoption and implementation of the Proposed Ordinance. ONGOING FISCAL IMPACT All future costs incurred processing Two-Unit Developments and Urban Lot Splits will be borne by the project applicants, resulting in no net fiscal impact to the General Fund or Development Services Fund. SB 9 was designed to encourage additional residential development in single-family zoned neighborhoods. As this development occurs, the City’s General Fund will be incrementally impacted, with fiscal impacts varying by project. While additional revenues can be expected based upon the valuation of the improvements constructed and the resulting ad valorem property taxes, as well as sales tax generated by the discretionary spending of additional residents, these revenues will likely be offset by the associated increase in demand for City services. Net impacts are not anticipated to be significant but will be difficult to quantify. ATTACHMENT 1. Map of R-1 and R-E zones Staff Contact: D. Todd Philips, Planning Manager, Development Services Tiffany Allen, Director of Development Services 2022/04/26 City Council Post Agenda Page 304 of 667 ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA VISTA AMENDING CHULA VISTA MUNICIPAL CODE CHAPTERS 18.18 (TENTATIVE PARCEL MAPS) AND 19.58 (USES); AND SECTIONS 5.68.050 (SHORT-TERM RENTALS – ELIGIBILITY REQUIREMENTS), 19.22.020 (R-E – RESIDENTIAL ESTATE ZONE – PERMITTED USES) AND 19.24.020 (R-1 – SINGLE- FAMILY RESIDENCE ZONE – PERMITTED USES) TO IMPLEMENT SENATE BILL 9 WHEREAS, in January 2022, the State of California Legislature (the “Legislature”) enacted Senate Bill 9 (SB 9) that established new provisions for two-unit residential developments and urban lot split subdivisions in single-family residential zones; and WHEREAS, the Legislature is increasingly concerned about the lack of supply of housing units in the State of California; and WHEREAS, the Legislature found and declared that ensuring access to affordable housing is a matter of statewide concern and not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution; and WHEREAS, the provisions of SB 9 apply to all jurisdictions, including charter cities; and WHEREAS, SB 9 requires jurisdictions to adopt the objective standards provided therein to amend local single-family residential zoning and Tentative Parcel Map Ordinances to allow for two-unit residential developments and urban lot split subdivisions in single-family residential zones; and WHEREAS, certain provisions of Chula Vista Municipal Code (CVMC) Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone) and 19.58 (Uses) are not in compliance with SB 9; and WHEREAS, the City of Chula Vista staff therefore recommends amending CVMC Chapters 5.68, 18.18, 19.22, 19.24, and 19.58 to be in compliance with SB 9; and WHEREAS, the City of Chula Vista Planning Commission held an advertised public hearing on the proposed amendments to CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family 2022/04/26 City Council Post Agenda Page 305 of 667 Ordinance No. ________ Page 2 Residence Zone), and 19.58 (Uses), and voted X-X-X-X to adopt Resolution No. XX-XXX and thereby recommended that the City Council adopt an Ordinance amending Chapters 5.68, 18.18, 19.22, 19.24, and 19.58 of the Chula Vista Municipal Code; and WHEREAS, the City Council reviewed the proposed legislative action for compliance with the California Environmental Quality Act (“CEQA”) and determined that the action is not a “Project” as defined under Section 15378 of the CEQA State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the City Council has also determined that the action is not a “Project” pursuant to Government Codes Sections 65852.21(j) and 66411.7(n); and WHEREAS, the City Council set a time and place for a hearing on the subject amendments to CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone), and 19.58 (Uses), and notice of said hearing, together with its purpose, was given by its publication in a newspaper of general circulation in the City at least ten days prior to the hearing; and WHEREAS, the City Council held a duly noticed public hearing to consider said ordinance amending CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R- E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone), and 19.58 (Uses), at the time and place as advertised in the Council Chambers, 276 Fourth Avenue, and said hearing was thereafter closed. NOW, THEREFORE, the City Council of the City of Chula Vista does hereby ordain as follows: Section I. Chula Vista Municipal Code Section 5.68.050 is hereby amended to add Subsection 5.68.050(H), as follows: H. The Dwelling Unit shall not have been developed or converted as part of a Two-Unit Residential Development or Urban Lot Split Parcel Map pursuant to Section 19.58.450 of this Code. Section II. Chula Vista Municipal Code Chapter 18.18 is hereby amended to add Section 18.18.140 as follows: 18.18.140 – Tentative Parcel Map – Urban Lot Split Parcel Map Subdivision No person shall create an urban lot split subdivision except by the filing of an urban lot split parcel map approved pursuant to Section 19.58.450 and the Subdivision Map Act. Maps shall be titled “Urban Lot Split Parcel Map.” 2022/04/26 City Council Post Agenda Page 306 of 667 Ordinance No. ________ Page 3 Section III. Chula Vista Municipal Code Section 19.22.020 is hereby amended to add Subsection 19.22.020(C), as follows: C. Notwithstanding Section 19.22.020(A), two-unit residential developments pursuant to Section 19.58.450. Section IV. Chula Vista Municipal Code Section 19.24.020 is hereby amended to add Subsection 19.24.020(E), as follows: E. Notwithstanding Section 19.24.020(A), two-unit residential developments pursuant to Section 19.58.450. Section V. Chula Vista Municipal Code Title 19 is hereby amended to add Section 19.58.450 as follows: 19.58.450 – Two-Unit Residential Developments and Urban Lot Split Parcel Maps in Single- Family Zones A. The purpose of this section is to provide regulations for the establishment of two-unit residential developments and urban lot split parcel maps in single-family zones, to define the approval process for such two-unit residential developments and urban lot split parcel maps in compliance with, inter alia, California Government Code Section 65852.21. Two-unit residential developments and urban lot split parcel maps in single-family zones are potential sources of affordable housing and shall be deemed consistent with the General Plan and zoning designation of the lot as provided. B. For the purposes of this section, the following words are defined: “Objective development standards” means standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by the City of Chula Vista, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. “Objective subdivision standards” means standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent 2022/04/26 City Council Post Agenda Page 307 of 667 Ordinance No. ________ Page 4 and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by the City of Chula Vista, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. “Objective zoning standards” means standards that involve no personal or subjective judgment by a public official and are uniformly verifiable by reference to an external and uniform benchmark or criterion available and knowable by both the development applicant or proponent and the public official prior to submittal. These standards may be embodied in alternative objective land use specifications adopted by the City of Chula Vista, and may include, but are not limited to, housing overlay zones, specific plans, inclusionary zoning ordinances, and density bonus ordinances. “Two-unit residential development” means a development which proposes no more than two new residential units or proposes to add one new residential unit with one existing residential unit on a single parcel in accordance with this Chapter. “Unit” means any dwelling unit, including, but not limited to, a unit or units created pursuant to Section 65852.21, a primary dwelling, an accessory dwelling unit as defined in Section 65852.2, or a junior accessory dwelling unit as defined in Section 65852.22. “Urban Lot Split Parcel Map” means a parcel map which seeks to subdivide an existing single- family zoned parcel to create no more than two new single-family zoned parcels of approximately equal lot area provided that one parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision. “Urban Lot Split Subdivision” means a subdivision of an existing single-family zoned parcel to create no more than two new single-family zoned parcels of approximately equal lot area provided that one parcel shall not be smaller than 40 percent of the lot area of th e original parcel proposed for subdivision. C. Two-Unit Residential Development in Single-Family Zones – A proposed housing development containing no more than two residential units within a single-family residential zone shall be considered ministerially, without discretionary review or a hearing, if the proposed housing development meets all of the following requirements: 1. The two-unit residential development would not require demolition or alteration of any of the following types of housing: a. Housing that is subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to persons and families of moderate, low, or very low income. 2022/04/26 City Council Post Agenda Page 308 of 667 Ordinance No. ________ Page 5 b. Housing that is subject to any form of rent or price control through a public entity’s valid exercise of its police power. c. Housing that has been occupied by a tenant in the last three years. 2. The parcel subject to the proposed housing development is not a parcel on which an owner of residential real property has exercised the owner’s rights under Chapter 12.75 (commencing with Section 7060) of Division 7 of Title 1 to withdraw accommodations from rent or lease within 15 years before the date that the development proponent submits an application. 3. The proposed housing development does not allow the demolition of more than 25 percent of the existing exterior structural walls, unless the housing development has not been occupied by a tenant in the last three years. 4. The development is not located within a historic district or property included on the State Historic Resources Inventory, as defined in Section 5020.1 of the Public Resources Code, or within a site that is designated or listed as a city or county landmark or historic property or district pursuant to a city or county ordinance. 5. The proposed housing development shall be prohibited if it is on a parcel that qualifies under the prohibitions listed in paragraph (2) of subdivision (a) of Government Code section 65852.21 or any successor provision thereof. Types of prohibited parcels include: a. A coastal zone, as defined in Division 20 (commencing with Section 30000) of the Public Resources Code; b. Prime farmland or farmland of statewide importance; c. Wetlands; d. Within a high fire hazard severity zone; e. Hazardous waste site; f. Within a delineated earthquake fault zone; g. Within a special flood hazard area subject to inundation by the 1 percent annual flood (100-year flood) unless it meets one of the following; 2022/04/26 City Council Post Agenda Page 309 of 667 Ordinance No. ________ Page 6 i. Subject to a Letter of Map Revision prepared by the Federal Emergency Management Agency and issued to the local jurisdiction; ii. Meets Federal Emergency Management Agency requirements to meet minimum flood plain management criteria of the National Flood Insurance Program pursuant to Part 59 (commencing with Section 59.1) and Part 60 (commencing with Section 60.1) of Subchapter B of Chapter I of Title 44 of the Code of Federal Regulations; h. Within a regulatory floodway as determined by the Federal Emergency Management Agency in any official maps published by the Federal Emergency Management Agency, unless the development has received a no-rise certification in accordance with Section 60.3(d)(3) of Title 44 of the Code of Federal Regulations. i. Lands identified for conservation in an adopted natural community conservation plan, habitat conservation plan, or other adopted natural resource protection plan; j. Habitat for protected species identified as candidate, sensitive, or species of special status by state or federal agencies, fully protected species, or species protected by the federal Endangered Species Act of 1973 (16 U.S.C. Sec. 1531 et seq.), the California Endangered Species Act (Chapter 1.5 (commencing with Section 2050) of Division 3 of the Fish and Game Code), or the Native Plant Protection Act (Chapter 10 (commencing with Section 1900) of Division 2 of the Fish and Game Code); k. Lands under conservation easement. D. Development Standards for Two Unit Residential Development in Single-Family Zones – Two-unit residential developments in single-family zones shall be subject to the following requirements and objective development standards: 1. Number and Size of Units – a. If a parcel includes an existing single-family home, one additional unit may be developed pursuant to this section. b. If a parcel does not include an existing single-family home, or if an existing single- family home is proposed to be demolished in connection with the creation of a two- unit residential development, two units may be developed pursuant to this section. 2022/04/26 City Council Post Agenda Page 310 of 667 Ordinance No. ________ Page 7 c. No more than four units, including primary dwelling units, accessory dwelling units, and/or junior accessory dwelling units may exist on a single-zoned residential parcel on which an Urban Lot Split Parcel Map as been approved. 2. Parking - Off-street parking of up to one space per unit is required, except in either of the following instances: l. The parcel is located within one-half mile walking distance of either a high-quality transit corridor, as defined in subdivision (b) of Section 21155 of the Public Resources Code, or a major transit stop, as defined in Section 21064.3 of the Public Resources Code. m. There is a car share vehicle located within one block of the parcel. 3. Setbacks - a. No setback shall be required for an existing structure or a structure constructed in the same location and to the same dimensions as an existing structure. b. For all other dwelling units proposed in connection with a two-unit residential development, a minimum setback of four feet, or the applicable setback for the zone district, whichever is less, is required from the rear and side property lines. c. Units may be adjacent or connected if the structures meet building code safety standards and are sufficient to allow separate conveyance. 4. Design - When a two-unit residential development dwelling unit is proposed on a parcel with an existing single-family dwelling unit, the new unit(s) shall utilize the same exterior materials and colors as the existing dwelling unit to the extent practical. 5. Accessory Dwelling Unit Development Exemptions – If an applicant for a dwelling unit developed under Section 19.58.022 (Accessory Dwelling Units) of this Code seeks to convert the dwelling unit to a two-unit development pursuant to this Section, any and all development exemptions granted to the dwelling unit pursuant to Sections 19.58.022.C.9 and 19.58.022.C13 shall be null and void subject to the final decision of the Director of Development Services. 6. Short-Term Rental Prohibition - Dwelling units created pursuant to this section shall have rental terms of thirty (30) days or longer and shall not be considered eligible for Short- Term Rental pursuant to Section 5.68.050. 2022/04/26 City Council Post Agenda Page 311 of 667 Ordinance No. ________ Page 8 E. Urban Lot Split Parcel Map in Single-Family Zones – A proposed parcel map for an urban lot split within a single-family residential zone shall be considered ministerially, without discretionary review or a hearing, if the proposed parcel map meets all of the following requirements: 1. The parcel map subdivides an existing parcel to create no more than two new parcels of approximately equal lot area provided that one parcel shall not be smaller than 40 percent of the lot area of the original parcel proposed for subdivision. 2. Both newly created parcels are no smaller than 1,200 square feet. 3. The parcel being subdivided meets all the following requirements: a. The parcel is located within a single-family residential zone as defined in Sections 19.22 (R-E – Residential Estate Zone) and 19.24 (R-1 – Single-Family Residence Zone). b. The parcel subject to the proposed urban lot split complies with all provisions of Sections 19.58.450 C. and 19.58.450 D. c. The parcel has not been established through prior exercise of an urban lot split as provided for in this section. d. Neither the owner of the parcel being subdivided, nor any person acting in concert with the owner, has previously subdivided an adjacent parcel using an urban lot split as provided for in this section. e. The parcel conforms to all applicable objective requirements of the Subdivision Map Act [Division 2 (commencing with Section 66410)], except as otherwise expressly provided in this section. 4. Any parcel created by this section shall be used for residential purposes only. 5. All easements required for the provision of public services and facilities shall be dedicated or conveyed by an instrument in a form acceptable to the Director of Development Services Department, or their designee. 6. Units constructed on an Urban Lot Split Subdivision approved pursuant to this Chapter shall be subject to and comply with the minimum setback requirements specified in Section 19.58.450 D. 3. 2022/04/26 City Council Post Agenda Page 312 of 667 Ordinance No. ________ Page 9 7. Parking spaces for new units constructed on an Urban Lot Split Subdivision approved pursuant to this Chapter shall be provided in accordance with Chapter 19.58.450 D.2. 8. Prior to the issuance of a building permit, the property owner shall record a covenant with the County Recorder’s Office, the form and content of which is satisfactory to the Director of Development Services and City Attorney, or their designees. The covenant shall notify future owners of the owner occupancy requirements, the approved size and attributes of the units, and minimum rental period restrictions. The covenant shall also reflect the number of units approved and provide that no more than two total units may be permitted on any single parcel created using the Urban Lot Split Parcel Map procedures. If an Urban Lot Split Parcel Map was approved, the covenant shall provide that no variances shall be permitted other than those code deviations expressly allowed by this Chapter. This covenant shall remain in effect so long as a two-unit residential development exists on the parcel. 9. The Urban Lot Split Subdivision shall comply with all requirements of the City’s Subdivision Ordinance and the California Subdivision Map Act except as expressly modified by this Chapter. 10. An applicant for an Urban Lot Split Parcel Map shall sign an affidavit, the form and content of which is satisfactory to the Director of Development Services and City Attorney, or their designees, stating that the applicant intends to occupy one of the housing units as their principal residence for a minimum of three years from the date of the approval of the Urban Lot Split Parcel Map. This subdivision shall not apply to an applicant that is a “community land trust,” as defined in clause (ii) of subparagraph (C) of paragraph (11) of subdivision (a) of Section 402.1 of the Revenue and Taxation Code, or is a “qualified nonprofit corporation” as described in Section 214.15 of the Revenue and Taxation Code. 11. Notwithstanding Government Code Section 66411.1, the City shall not impose regulations that require dedications of rights-of-way or the construction of offsite improvements for the parcels being created as a condition of issuing a parcel map for an urban lot split pursuant to this section. 12. Preliminary Title Report - There shall be filed with each Urban Lot Split Parcel Map, a current preliminary title report of the property being subdivided or altered. 13. Additional Subdivisions Prohibited - No further subdivision of parcels created using the Urban Lot Split Parcel Map or Urban Lot Split Subdivision procedures of this Chapter shall be permitted. 14. The parcels created by this section shall have access to, provide access to, or adjoin the public right-of-way. 2022/04/26 City Council Post Agenda Page 313 of 667 Ordinance No. ________ Page 10 F. Application of Objective Standards - Development proposed on lots created by an Urban Lot Split Subdivision shall comply with all objective zoning standards, objective subdivision standards, and objective design review standards applicable to the parcel based on the underlying zoning including but not limited to: Title 18 and Chapters 19.22, and 19.24; provided, however, that the application of such standards shall be reduced if the standards would have the effect of physically precluding the construction of two units on either of the resulting parcels created pursuant to this chapter or would result in a unit size of less than 800 square feet. Any waivers or reductions of development standards shall be the minimum waiver or reduction necessary to avoid physically precluding two units of 800 square feet, and no additional variances shall be permitted. No waivers or reductions to applicable requirements regarding size, height, off-street parking, or setbacks shall be approved unless the applicant demonstrates to the Director of Development Service’s satisfaction that there is no other way to physically accommodate two 800-square foot units on the site. G. Denial of Two-Unit Residential Development and/or Urban Lot Split Parcel Map - The Development Services Department shall not approve an Urban Lot Split Parcel Map under any of the following circumstances: 1. The land proposed for division is a lot or parcel which was part of an Urban Lot Split Parcel Map that the City previously approved. 2. The subdivision proposes creation of more than two lots or more than four units total among the two lots. 3. The Development Services Department finds that the Urban Lot Split Parcel Map does not meet the requirements of this code or that all approvals or permits required by this code for the project have not been given or issued. 4. The urban lot split’s failure to comply with applicable, objective requirements imposed by the Subdivision Map Act and this Code. Any decision to disapprove an Urban Lot Split Parcel Map shall be accompanied by a finding identifying the applicable, objective requirements imposed by the Subdivision Map Act and this Code. 5. A proposed two-unit residential development and/or an Urban Lot Split Subdivision may be denied if the Director of Development Services, or their designee, makes a written finding, based upon a preponderance of the evidence, that the proposed housing development project or urban lot split would have a specific, adverse impact, as defined and determined in paragraph (2) of subdivision (d) of Section 65589.5 of the Government Code, upon public health and safety or the physical environment and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact. 2022/04/26 City Council Post Agenda Page 314 of 667 Ordinance No. ________ Page 11 Section VI. Severability If any portion of this Ordinance, or its application to any person or circumstance, is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionality shall not affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any other person or circumstance. The Planning Commission of the City of Chula Vista hereby declares that it is the intent of the body to have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional. Section VII. Construction The City Council of the City of Chula Vista intends this Ordinance to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. Section VIII. Effective Date This Ordinance shall take effect and be in force on the thirtieth day after its final passage. Section IX. Publication The City Council of Chula Vista shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted according to law. Presented by: Approved as to form by: ____________________________ ____________________________ Tiffany Allen Glen R. Googins Director of Development Services City Attorney 2022/04/26 City Council Post Agenda Page 315 of 667 RESOLUTION NO. RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF CHULA VISTA RECOMMENDING THAT THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPT AN ORDINANCE AMENDING CHULA VISTA MUNICIPAL CODE CHAPTERS 5.68 (SHORT-TERM RENTALS), 18.18 (TENTATIVE PARCEL MAPS), 19.22 (R-E – RESIDENTIAL ESTATES ZONE), 19.24 (R-1 – SINGLE- FAMILY RESIDENCE ZONE), AND 19.58 (USES) TO IMPLEMENT THE PROVISIONS OF SENATE BILL 9 WHEREAS, in January 2022, the State of California Legislature (the “Legislature”) enacted Senate Bill 9 (“SB 9”) that established new provisions for two-unit residential developments and urban lot split subdivisions in single-family residential zones; and WHEREAS, the Legislature is increasingly concerned about the lack of supply of housing units in the State of California; and WHEREAS, the Legislature found and declared that ensuring access to affordable housing is a matter of statewide concern and not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution; and WHEREAS, the provisions of SB 9 apply to all jurisdictions, including charter cities; and WHEREAS, SB 9 requires jurisdictions to adopt the objective standards provided therein to amend local single-family residential zoning and Tentative Parcel Map Ordinances to allow for two-unit residential developments and urban lot split subdivisions in single-family residential zones; and WHEREAS, certain provisions of Chula Vista Municipal Code (“CVMC”) Chapters 5.68 (Short- Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single- Family Residence Zone), and 19.58 (Uses) are not in compliance with SB 9; and WHEREAS, the City of Chula Vista staff therefore recommends amending CVMC Chapters 5.68, 18.18, 19.22, 19.24, and 19.58 to be in compliance with SB 9; and WHEREAS, the Director of Development Services reviewed the proposed legislative action for compliance with the California Environmental Quality Act (“CEQA”) and determined that the action is not a “Project” as defined under Section 15378 of the CEQA State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. In addition, notwithstanding the foregoing, the Director of Development Services has also determined that the action is not a “Project” pursuant to Government Codes Sections 65852.21(j) and 66411.7(n); and WHEREAS, the Director of Development Services set the time and place for a hearing on the subject amendments to CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone), and 19.58 (Uses), and notice of said hearing, together with its purpose, was given by its publication in a newspaper of general circulation in the City at least ten days prior to the hearing; and 2022/04/26 City Council Post Agenda Page 316 of 667 WHEREAS, the Planning Commission held a duly noticed public hearing to consider said amendments to CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone), and 19.58 (Uses) at the time and place as advertised in the Council Chambers, 276 Fourth Avenue, and said hearing was thereafter closed. NOW, THEREFORE, BE IT RESOLVED that the City of Chula Vista Planning Commission does hereby recommend that the City Council of the City of Chula Vista adopt an ordinance amending CVMC Chapters 5.68 (Short-Term Rentals), 18.18 (Tentative Parcel Maps), 19.22 (R-E – Residential Estates Zone), 19.24 (R-1 – Single-Family Residence Zone), and 19.58 (Uses) to implement the provisions of SB 9. BE IT FURTHER RESOLVED THAT a copy of this Resolution be transmitted to the City Council. Presented by: Approved as to form by: _________________________ _____________________ Tiffany Allen Glen R. Googins Director of Development Services City Attorney PASSED AND APPROVED BY THE PLANNING COMMISSION OF THE CITY OF CHULA VISTA, CALIFORNIA, this _____ day of ____________, 2022, by the following vote, to-wit: AYES: NOES: ABSENT: ABSTAIN: ________________________ Max Zaker, Chair ATTEST: _______________________ Patricia Salvacion, Secretary 2022/04/26 City Council Post Agenda Page 317 of 667 J H L I FE G K MAIN P A L O M A RTHIRDFOURTHBAYD O LYM PICN A P L E S HILLTOPC I-805 FREEWAYB O N ITA BROADWAYSECONDO X F O R DFIRST ORANGE OTAY LAKES M O S S I-5 FREEWAYMELROSELA MEDIAOLEANDERFIFTHTELEGRAPH CANYONNACIONS R -5 4 F R E E W A Y INDUSTRIALBRANDYWINECORRAL CANYON BUENA VISTA RANCHO DEL REY H E R I T A G E PASEO LADERAPLAZA BONITA T E R R A N O V A BIRCHPASEO RANCHERORUTGERS P A S E O D E L R E Y BEYERMEDICAL CENTERR I D G E B A C K DEL REY3 0 T H S R-1 2 5 T O LL R O A D M A R I N A THIRD EXTHIGHLAND WOODLAWNE A S T L A K E AVENIDA DEL REYR I E N S T R A C SR-54 FREEWAY FIFTHNACIONHERITAGEI-805 FREEWAYI-5 FREEWAYBEYER NORTHSB 9: R-1 and R-E Zones in the City of Chula Vista Parcel LUI Zones R1 RE Otay Landfill 2022/04/26 City Council Post Agenda Page 318 of 667 Senate Bill 9: Two-Unit Developments and Urban Lot Splits April 26, 2022 1 Chula Vista City Council 2022/04/26 City Council Post Agenda Page 319 of 667 December 16, 2020 –“Building Opportunities for All” Senate Housing Package Introduced August 30, 2021 –CA Legislature Adopts SB 9 September 16, 2021 –Governor Newsom signs SB 9 into law January 1, 2022 –SB 9 effective throughout California April 13, 2022 –City of Chula Vista Planning Commission; passed 5-0-0 April 26, 2022 –City of Chula Vista City Council Agenda Item 7.3 2SB 9 HISTORY2022/04/26 City Council Post Agenda Page 320 of 667 SB 9 allows homeowners to: •Create a duplex on a single-family residential zoned parcel •Create a detached two-unit development on a single-family residential zoned parcel •Subdivide their existing single-family residential zoned property via an urban lot split •Sell one of the newly created parcels from the subdivision of the original parcel 3SB 9’s PURPOSE2022/04/26 City Council Post Agenda Page 321 of 667 California Jurisdictions must: 1.Ministerially approve two-unit developments in single-family residential zones 2.Ministerially approve urban lot splits in single- family residential zones 3.Allow for up to a total of four units on single- family residential parcels, subject to size and other statutory qualifications 4SB 9’s REQUIREMENTS2022/04/26 City Council Post Agenda Page 322 of 667 California Jurisdictions cannot: Utilize non-objective zoning or development standards to prevent a two-unit development or urban lot split Require an otherwise eligible two-unit development or urban lot split to go through a discretionary decision-making process 5SB 9’s REQUIREMENTS2022/04/26 City Council Post Agenda Page 323 of 667 SB 9 is not applicable in: •100-year flood zone •Floodway •Conservation Lands •Protected Habitat •Lands Under a Conservation Easement •Coastal Zone •Prime farmland •Wetlands •High fire severity zones •Hazardous waste sites •Delineated earthquake fault zones 6SB 9 EXEMPTIONS2022/04/26 City Council Post Agenda Page 324 of 667 SB9 only applies to municipal and county governments and not to HOAs. •AB670 (ADUs) specifically applied the ADU regulations to HOAs •SB9 would have had to follow AB670’s lead and expressly require HOAs to adhere to SB9’s requirements •Some HOAs may already prohibit lot splits, while others may need to amend their CC&Rs •Senate President pro tempore Atkin’s office has confirmed SB9 does not apply to HOA communities 7HOAs and CCRs2022/04/26 City Council Post Agenda Page 325 of 667 8R-1 and R-E ZONES2022/04/26 City Council Post Agenda Page 326 of 667 9 SFR SFR ADU JADU SB 9 and ADUs2022/04/26 City Council Post Agenda Page 327 of 667 10 SFR SFR ADU JADU 2022/04/26 City Council Post Agenda Page 328 of 667 RECOMMENDATION Conduct a public hearing and place an ordinance on first reading to amend Chula Vista Municipal Code,Chapters 18.18 and 19.58;and Sections 5.68.050, 19.22.020,and 19.24.020. 112022/04/26 City Council Post Agenda Page 329 of 667 BACKUP SLIDES 122022/04/26 City Council Post Agenda Page 330 of 667 13R-1, R-E and SFR ZONES2022/04/26 City Council Post Agenda Page 331 of 667 BUILDING OPPORTUNITIES FOR ALL SB 5 (Atkins, Caballero, McGuire, Roth, Rubio, Skinner, Wiener) -Senate Housing Bond –Enacts the Affordable Housing Bond Act of 2022 which places a $6.5 billion dollar bond before the voters on the November 2022 ballot to fund affordable rental housing and homeownership programs. In Committee. SB 6 (Caballero) -The Neighborhood Homes Act –Authorizes residential development on existing lots currently zoned for commercial office and retail space such as strip malls or large “big box” retail spaces. This bill requires the development of residential units be at a minimum density to accommodate affordable housing and abide by existing local planning and development ordinances. In Committee. SB 7 (Atkins) -The Housing + Jobs Expansion & Extension Act –Seeks to improve the California Environmental Quality Act (CEQA) process by extending and expanding provisions of AB 900, which streamlined paperwork and expedited legal challenges to large, multi-benefit housing, energy, and manufacturing projects. This bill extends the 2021 ‘sunset’ of AB 900, which created jobs and investment in the state, through 2026. Signed by Governor –5/20/21. 142022/04/26 City Council Post Agenda Page 332 of 667 SB 8 (Skinner) -Extends the provisions of SB 330, the Housing Crisis Act of 2019, until 2030. This bill adds clarifying language to ensure the intent of SB 330 to streamline the production of housing that meets a local jurisdiction’s existing zoning and other rules is met. Signed by Governor –9/16/21. SB 9 (Atkins) -California Housing Opportunity & More Efficiency (HOME) Act - Promotes neighborhood-scale residential development by streamlining the process for a homeowner to create a duplex or subdivide an existing lot in residential areas. This bill builds on the successful approach of Accessory Dwelling Units (ADUs) and expands options for homeowners who wish to be part of the solution in solving California’s housing crisis. Signed by Governor –9/16/21. SB 10 (Wiener) -Senate Bill 10 allows cities to upzone areas close to job centers, transit, and existing urbanized areas to allow up to ten units without having to go through the lengthy CEQA process. SB 10 will make it easier for cities to build housing affordable to young people and working families. Signed by Governor –9/16/21. 15BUILDING OPPORTUNITIES FOR ALL2022/04/26 City Council Post Agenda Page 333 of 667 SB 290 (Skinner) -Senate Bill 290 improves and clarifies the state’s Density Bonus statute to ensure it achieves its intended outcome of increasing affordable housing production. This bill will make it easier to build density bonus projects and provides incentives to build affordable housing for low-income students. Signed by Governor –9/28/21. SB 330 (Durazo) -Senate Bill 330 provides flexibility to community college districts to utilize joint occupancy agreements to create affordable workforce and student housing. Signed by Governor –10/06/21. SB 477 (Wiener) -Senate Bill 477 expands California’s housing data collection so the state and public can better understand the impact of state housing laws and determine the progress made by various cities and counties in meeting regional housing goals. Vetoed by Governor –10/5/21. 16BUILDING OPPORTUNITIES FOR ALL2022/04/26 City Council Post Agenda Page 334 of 667 SB 478 (Wiener) -Senate Bill 478 allows construction of small multifamily projects (3-10 units) in areas already zoned for multifamily housing, by ensuring that artificially low floor-area ratio regulation do not stop otherwise allowable projects. This bill also opens up small, legally created parcels for development. Signed by Governor –9/28/21. SB 791 (Cortese) -Senate Bill 791 creates a technical assistance unit within the Department of Housing and Community Development that will provide assistance to local agencies to help them plan, finance, and develop affordable housing on their surplus land. Signed by Governor –9/28/21. 17BUILDING OPPORTUNITIES FOR ALL2022/04/26 City Council Post Agenda Page 335 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Military Equipment Policy: Consideration of approving the Chula Vista Police Department’s Military Equipment Policy Report Number: 22-0123 Location: No specific geographic location Department: Police Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Conduct the public hearing and place an ordinance on first reading approving the Police Department’s Military Equipment Policy. (First Reading) SUMMARY On September 30, 2021, the Governor of the State of California approved Assembly Bill (AB) 481, “Funding, Acquisition and Use of Military Equipment,” which is codified in Chapter 12.8 of the California Government Code, Sections 7070 to 7075. This Chapter requires a law enforcement agency to obtain annual approval of a military equipment policy by its governing body before it may seek funding for, acquire new, or use existing military equipment. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION 2022/04/26 City Council Post Agenda Page 336 of 667 P a g e | 2 Not applicable. DISCUSSION On September 30, 2021 the Governor of the State of California approved AB 481, requiring law enforcement agencies to obtain approval of a military equipment policy by the applicable governing body. The Police Department is required to seek approval of this military equipment use policy from the governing body at a regular open meeting prior to the Department taking certain actions relating to the funding, acquisition, or use of military equipment, as defined. The bill allows the governing body to approve the policy only if it determines that the military equipment meets specified standards. The policy is subject to annual review by the governing body to determine whether, based on annual military equipment report, the standards set forth in the approving policy have been met. The governing body may renew the authorizing policy, disapprove authorization for particular military equipment where standards have not been met, or require modifications to this military equipment use policy to address any non-compliance with standards. The bill requires publication of the agency’s military equipment use policy and the annual military equipment report on the agency’s website. The Chula Vista Police Department posted the proposed Military Equipment Policy, designated as Number 714 in its Department Policy Ma nual, on its website on March 28, 2022, 30 days before submitting the policy to the Chula Vista City Council for its consideration and approval on April 26, 2022, as required by California Government Code Section 7071(b), and the Department’s webpage also provided a link for public comments and questions on the proposed policy. The Chula Vista Police Department’s Military Equipment Policy, which is 9 pages with a 28-page attachment listing the Department’s military equipment with photos, meets all the requirements of California Government Code 7070(d). Specifically, it is a written document that governs the Department’s use of military equipment; describes each type of military equipment by quantity and capability, expected lifespan and manufacturer product description; addresses the purposes and authorized use for each type of listed equipment; addresses fiscal impact, including initial cost and annual maintenance costs; addresses the legal and procedural rules that govern authorized use and training required before use to ensure the full protection of the public’s welfare, safety, civil rights and civil liberties; requires compliance with the policy, addresses mechanisms to ensure compliance with the policy and sanction for policy violations; and addresses the procedures for registering public complaints, concerns and questions and timely response to same. Additionally, the Police Department’s Military Equipment Policy meets all the requirements of California Government Code Section 7071(d)(1)(A)-(D): (A) the Department’s military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; (B) the Department’s proposed military equipment policy will safeguard the public’s welfare, safety, civil rights and civil liberties; (C) the Department’s existing military equipment was purchased pursuant to the City’s existing procurement requirements and best-practice protocols and is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety; and (D) prior military equipment uses complied with existing Department policies as well as the proposed military equipment policy, any future such uses will be evaluated according to the military equipment policy in effect at the time, 2022/04/26 City Council Post Agenda Page 337 of 667 P a g e | 3 and corrective action will be taken to remedy any future nonconforming uses and to ensure future compliance. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the 500-foot rule found in California Code of Regulations Title 2, section 18702.2(a)(11), is not applicable to this decision for purposes of determining a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current-year fiscal impact approving the Police Department’s Military Equipment Policy. ONGOING FISCAL IMPACT The Police Department’s Military Equipment Inventory is outlined in Attachment A of the proposed Military Equipment Policy. During the budget process, ongoing maintenance or repair of this equipment will be included in the proposed budget. If any additional appropriations are required for this equipment, then City staff will seek Council approval at that time. ATTACHMENTS Attachment 1: Proposed Military Equipment Policy (CVPD Policy 714) Staff Contact: Captain Dan Peak, Police Department 2022/04/26 City Council Post Agenda Page 338 of 667 2022/04/26 City Council Post Agenda Page 339 of 667 2022/04/26 City Council Post Agenda Page 340 of 667 2022/04/26 City Council Post Agenda Page 341 of 667 2022/04/26 City Council Post Agenda Page 342 of 667 2022/04/26 City Council Post Agenda Page 343 of 667 2022/04/26 City Council Post Agenda Page 344 of 667 2022/04/26 City Council Post Agenda Page 345 of 667 2022/04/26 City Council Post Agenda Page 346 of 667 2022/04/26 City Council Post Agenda Page 347 of 667 2022/04/26 City Council Post Agenda Page 348 of 667 2022/04/26 City Council Post Agenda Page 349 of 667 2022/04/26 City Council Post Agenda Page 350 of 667 2022/04/26 City Council Post Agenda Page 351 of 667 2022/04/26 City Council Post Agenda Page 352 of 667 2022/04/26 City Council Post Agenda Page 353 of 667 2022/04/26 City Council Post Agenda Page 354 of 667 2022/04/26 City Council Post Agenda Page 355 of 667 2022/04/26 City Council Post Agenda Page 356 of 667 2022/04/26 City Council Post Agenda Page 357 of 667 2022/04/26 City Council Post Agenda Page 358 of 667 2022/04/26 City Council Post Agenda Page 359 of 667 2022/04/26 City Council Post Agenda Page 360 of 667 2022/04/26 City Council Post Agenda Page 361 of 667 2022/04/26 City Council Post Agenda Page 362 of 667 2022/04/26 City Council Post Agenda Page 363 of 667 2022/04/26 City Council Post Agenda Page 364 of 667 2022/04/26 City Council Post Agenda Page 365 of 667 2022/04/26 City Council Post Agenda Page 366 of 667 2022/04/26 City Council Post Agenda Page 367 of 667 2022/04/26 City Council Post Agenda Page 368 of 667 2022/04/26 City Council Post Agenda Page 369 of 667 2022/04/26 City Council Post Agenda Page 370 of 667 2022/04/26 City Council Post Agenda Page 371 of 667 2022/04/26 City Council Post Agenda Page 372 of 667 2022/04/26 City Council Post Agenda Page 373 of 667 2022/04/26 City Council Post Agenda Page 374 of 667 2022/04/26 City Council Post Agenda Page 375 of 667 ORDINANCE NO. ORDINANCE OF THE CITY OF CHULA VISTA APPROVING THE CHULA VISTA POLICE DEPARTMENT’S MILITARY EQUIPMENT POLICY WHEREAS, on September 30, 2021, the Governor of the State of California approved AB 481, “Funding, Acquisition and Use of Military Equipment,” which is codified in Chapter 12.8 of the California Government Code, Sections 7070 to 7075; and WHEREAS, this Chapter requires a law enforcement agency to obtain annual approval of a military equipment policy by its governing body before it may seek funding for, acquire new, or use existing military equipment, as defined; and WHEREAS, this Chapter requires a local law enforcement agency to develop a written policy that addresses military equipment use, description, purpose and authorized use, fiscal impact, legal and procedural rules for authorized use, required training, mechanisms to ensure policy compliance, and procedures for public complaints, concerns, and questions (Cal Gov. Code Section 7070(d)); and WHEREAS, this Chapter requires a law enforcement agency to post the proposed military equipment policy on its website 30 days before holding a public hearing for the governing body to consider the policy for approval (Cal. Gov. Code Section 7071(b)); and WHEREAS, this Chapter requires the governing body to consider the proposed policy at a regular meeting held in compliance with the Ralph M. Brown Act, and if approved, adopt the military equipment policy in an ordinance after making the determinations required in California Government Code Section 7071(d)(1)(A)-(D); and WHEREAS, this Chapter imposes annual ongoing requirements on law enforcement agencies: a) a law enforcement agency must post on its website an annual report with specified content within one year of initial governing body approval of its military equipment policy; b) within 30 days of releasing the annual report a law enforcement agency must hold a community meeting to discuss and answer questions on the annual report; and c) the law enforcement agency must post the military equipment annual report on its website for as long as it uses the military equipment (Cal. Gov. Code Section 7072); and WHEREAS, this Chapter imposes annual ongoing requirements on governing bodies: a) after initial adoption of an ordinance approving a military equipment policy, a governing body must at least annually review the ordinance; b) at a regular meeting held in compliance with the Ralph M. Brown Act, the governing body must vote on whether to renew the military equipment ordinance; and c) based on a law enforcement agency’s annual report published pursuant to Cal. Gov. Code Section 7072, determine whether each type of military equipment identified in the report has complied with the standards set forth in Cal. Gov. Code Section 7071(d)(1)(A)-(D). 2022/04/26 City Council Post Agenda Page 376 of 667 Ordinance Page 2 NOW THEREFORE the City Council of the City of Chula Vista does hereby ordain as follows: Section I. Determinations A. The Chula Vista Police Department posted the proposed Military Equipment Policy, designated as Number 714 in its Department Policy Manual, on its website on March 28, 2022, 30 days before submitting the policy to the Chula Vista City Council for its consideration and approval on April 26, 2022, as required by California Government Code Section 7071(b), and the Department’s webpage also provided a link for public comments and questions on the proposed policy. B. The Chula Vista Police Department’s Military Equipment Policy, which is 9 pages with a 28-page attachment listing the Department’s military equipment with photos, meets all the requirements of California Government Code 7070(d). Specifically, it is a publicly released written document that governs the Department’s use of military equipment; describes each type of military equipment by quantity and capability, expected lifespan and manufacturer product description; addresses the purposes and authorized use for each type of listed equipment; addresses fiscal impact, including initial cost and annual maintenance costs; addresses the legal and procedural rules that govern authorized use and training required before use to ensure the full protection of the public’s welfare, safety, civil rights and civil liberties; requires compliance with the policy, addresses mechanisms to ensure compliance with the policy and sanction for policy violations; and addresses the procedures for registering public complaints, concerns and questions and timely response to same. C. The City Council of the City of Chula Vista, having carefully reviewed the staff report, proposed policy and ordinance, staff presentation and public input on the proposed military policy and ordinance in its regular public meetings on April 26, 2022, hereby makes the following determinations as required by California Government Code Section 7071(d)(1)(A)-(D): (A) the Department’s military equipment is necessary because there is no reasonable alternative that can achieve the same objective of officer and civilian safety; (B) the Department’s proposed military equipment policy will safeguard the public’s welfare, safety, civil rights and civil liberties; (C) the Department’s existing military equipment was purchased pursuant to the City’s existing procurement requirements and best-practice protocols and is reasonably cost effective compared to available alternatives that can achieve the same objective of officer and civilian safety; and (D) prior military equipment uses complied with existing Department policies as well as the proposed military equipment policy, any future such uses will be evaluated according to the military equipment policy in effect at the time, and corrective action will be taken to remedy any future nonconforming uses and to ensure future compliance. D. The City Council of the City of Chula Vista held a duly noticed public hearing to consider this Ordinance at the time and place advertised in the Council Chambers, 276 Fourth Avenue, and said hearing was thereafter closed. 2022/04/26 City Council Post Agenda Page 377 of 667 Ordinance Page 3 Section II. Action The City Council of the City of Chula Vista in this Ordinance hereby approves the Chula Vista Police Department’s Military Equipment Policy. Section III. Severability If any portion of this Ordinance, or its application to any person or circumstance, is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionality shall not affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any other person or circumstance. The City Council of the City of Chula Vista hereby declares that it would have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional. Section III. Construction The City Council of the City of Chula Vista intends this Ordinance to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. Section IV. Effective Date This Ordinance shall take effect and be in force on the thirtieth day after its final passage. Section V. Publication The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted according to law. Presented by Approved as to form by _____________________________________ ____________________________________ Roxana Kennedy Glen R. Googins Chief of Police City Attorney 2022/04/26 City Council Post Agenda Page 378 of 667 City Council Adoption of CVPD’s Military Equipment Use Policy As Required By CA Assembly Bill 481 (AB 481) CHULA VISTA POLICE DEPARTMENT Presented by 2022/04/26 City Council Post Agenda Page 379 of 667 GOAL OF THIS PRESENTATION •To outline and explain the current uses for military-style equipment utilized by the Chula Vista Police Department. •To describe the need and importance for this equipment, which is to maintain public safety and provide the highest quality of police service to our community. •To seek Chula Vista City Council approval for continued use of this equipment as required by AB 481. 22022/04/26 City Council Post Agenda Page 380 of 667 INTRODUCTIONS Captain Dan Peak, Investigations Division / SWAT Sergeant James Petray, PSU / SWAT 32022/04/26 City Council Post Agenda Page 381 of 667 WHAT IS MILITARY EQUIPMENT? •Commonly used police equipment that was recently redefined by the California State Legislature under AB 481. •This includes command vehicles, drones, less lethal tools, and other equipment already being used by the CVPD. •None of the equipment used by the CVPD was obtained from the military and we do not participate in the federal 1033 Surplus Military Equipment Program. 42022/04/26 City Council Post Agenda Page 382 of 667 WHY IS THIS EQUIPMENT IMPORTANT? •To protect life and safeguard the community. •To de-escalate and bring a safe resolution to critical incidents. •To properly equip our officers so they can safely perform their jobs. 52022/04/26 City Council Post Agenda Page 383 of 667 CHULA VISTA POLICE EQUIPMENT GUIDELINES Military equipment, as defined by AB 481, shall only be used under the following circumstances: •The employee has completed all applicable training, including Peace Officer Standards and Training (POST) courses or any other training required by law. •This equipment is used because there is no reasonable alternative that can achieve the same objective for both community and officer safety. 62022/04/26 City Council Post Agenda Page 384 of 667 WE VALUE AND RESPECT HUMAN LIFE The overall purpose of this equipment is de-escalation, safety, and the preservation of human life 72022/04/26 City Council Post Agenda Page 385 of 667 UNMANNED AERIAL SYSTEMS (UAS) •Our Department UAS inventory contains 29 drones (13 models). •It is the policy of the CVPD to utilize UAS for official law enforcement purposes only, and in the manner that respects the privacy of our community, pursuant to State and Federal Law. •Our UAS program has been safely operating drones since 2018. 82022/04/26 City Council Post Agenda Page 386 of 667 UNMANNED ROBOT The Chula Vista Police Department possesses one Robot: ROBOTEX AVATAR III. •Provides officers with the ability to remotely search dangerous locations and communicate with armed or violent subjects. •SWAT team and trained sworn personnel have been using the robot since 2013. 92022/04/26 City Council Post Agenda Page 387 of 667 COMMAND AND CONTROL VEHICLES Freightliner M2-106 Freightliner M2 106 Chassis (custom build) The Chula Vista Police Department has two mobile command vehicles. We have utilized mobile command vehicles since 2006. 102022/04/26 City Council Post Agenda Page 388 of 667 ARMORED RESCUE VEHICLE The Chula Vista Police Department possesses one armored rescue vehicle: the Lenco Bearcat G2. •The vehicle can be used during critical incidents where ballistic protection will provide a safe advantage to the community and officers. •The vehicle does not contain any mounted weapons. •The Department has utilized this vehicle since 2011. Additionally, the SWAT team has used an armored rescue vehicle of some sort for several decades. 112022/04/26 City Council Post Agenda Page 389 of 667 40MM LAUNCHERS •The Chula Vista Police Department possesses five less lethal 40mm launchers. These launchers are equipped to deploy 40mm Specialty Impact Munitions (SIMS). •The purpose of these tools are to limit the escalation of conflict. These tools minimize the potential for lethal force. •The SWAT team has used this type of equipment since the early 1980’s. 122022/04/26 City Council Post Agenda Page 390 of 667 40MM MUNITIONS The Chula Vista Police Department possesses several types of 40mm munitions. These munitions fall into two categories: 1.Chemical agents 2.Less-lethal impact munitions (foam/sponge/stingball) Note: The SWAT team has used these types of munitions since the early 1980’s.132022/04/26 City Council Post Agenda Page 391 of 667 CHEMICAL AGENTS (HAND -HELD CANISTERS) •Chemical agent canisters release a smoke irritant to produce temporary discomfort and encourage compliance during a critical incident. •Chemical agents are deployed exclusively by SWAT and Mobile Field Force officers as a method of de- escalation. •The SWAT team has used this type of equipment since the early 1980’s. 142022/04/26 City Council Post Agenda Page 392 of 667 LESS LETHAL LAUNCHERS The Department has utilized less lethal launchers since the early 2000’s. Paintball launchers (similar to commercial paintball guns) Beanbag launchers 152022/04/26 City Council Post Agenda Page 393 of 667 DIVERSIONARY DEVICES “FLASHBANGS” •Diversionary devices are serialized, steel bodied, and non-bursting canisters that emit a loud noise and bright light when deployed. •Diversionary devices are distraction tools used to increase officer safety. •Use of diversionary devices are limited to specially trained SWAT officers. •The SWAT team has used diversionary devices since the early 1980’s. 162022/04/26 City Council Post Agenda Page 394 of 667 LONG -RIFLE (NON -ISSUED) The Department has one Smith and Wesson M&P brand long-rifle in its inventory. •This is a precision rifle, and it is used to address a deadly threat with more accuracy and at a greater distance than a handgun. •Only SWAT officers who have trained and qualified with this weapon can deploy it. •The Department has used this weapon since 2015. Additionally, the SWAT team has utilized this type of equipment since the 1970’s. 172022/04/26 City Council Post Agenda Page 395 of 667 •A specially designed bolt or barrel that when placed into a firearm discharges designated SIM paint marking rounds. •Used exclusively in training scenarios and cannot fire conventional ammunition. •This type of training equipment has been used since the early 2000’s. SIM BARREL CONVERSION KITS FOR TRAINING PURPOSES ONLY 182022/04/26 City Council Post Agenda Page 396 of 667 IN CLOSING •The Chula Vista Police Department respectfully asks the City Council to certify the continued use of the safety equipment outlined in this presentation and further detailed in our proposed Military Equipment Policy. •Each piece of equipment is crucial for the Department’s ability to maintain public safety. 192022/04/26 City Council Post Agenda Page 397 of 667 THANK YOU 2022/04/26 City Council Post Agenda Page 398 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Sewer Rates: Consider Increase to Sewer Rates and Resolution Adopting Sewer Rate Increases and Approving Other Sewer Rate Study Recommendations Report Number: 22-0007 Location: No specific geographic location Department: Engineering Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Adopt a resolution: (1) accepting the Sewer Rate Study (Study); (2) approving the Study’s recommendations for fiscal years 2021/22 through 2025/26; (3) adopting increased sewer rates and approving amendments to the Master Fee Schedule; (4) authorizing the pass-through of all future fees and charges imposed for wholesale charges for sewage treatment or wastewater treatment; (5) approving amendments to City Council Policy 220-04; (6) authorizing an increase to the service charge revenue allocations to the Sewerage Facilities Replacement Fund; and (7) appropriating 6 million dollars from the Trunk Sewer Capital Fund to the Sewer Service Revenue Fund to fund Metro capital expenses. (4/5ths vote required) SUMMARY The City completed a comprehensive review of its sewer rates, conducted on behalf of the City by Willdan Financial Services (Willdan). The purpose of the review was to ensure that sewer rates will continue to provide adequate funding for the cost of wastewater treatment services outsourced to the City of San Diego’s Metropolitan Wastewater Sewerage System (Metro), the cost of operating and maintaining the city’s sewer collection system, investment in the infrastructure needed to provide the service consistent with applicable federal, state, and local laws, and ensure adequate reserves. The independent financial consultant, Willdan, prepared the 2021 “Sewer Cost of Service Rate Study” (Study) after reviewing the current and projected sewer expenses and revenues. The purpose of the review was to develop a 10-year financial plan with the focus on the first 5-years, identifying the revenues and other 2022/04/26 City Council Post Agenda Page 399 of 667 P a g e | 2 adjustments required to meet the costs of operating and maintaining an adequate sewer system and generate sufficient revenue for the systems objectives. The specific Study recommendations include the following: (1) increasing sewer rates to fund the costs of service; (2) implementing pass through rate adjustments for the expenses from City of San Diego Metropolitan Wastewater (Metro); (3) rescinding the US EPA Permit Renewal Liability Reserve (Permit Reserve) category; (4) increasing the service charge revenue allocations to the Sewerage Facilities Replacement Fund; and (5) allocating $6 million from the Trunk Sewer Capital Fund for payment of a portion of the Metro capital expenses in FY2022/23. The proposed amended Master Fee Schedule Chapter 12-200 and Policy 220-04 updates are also recommended for approval. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION BACKGROUND The City provides sewer service to about 50,000 residential and commercial customers. Monthly sewer rates charged to system users (customers) are the primary source of revenue to operate and maintain the sewer system and are used for this purpose. Sewer rate revenue provides funding for operation and maintenance of the City-owned sewer collection and conveyance facilities, capital projects, debt service, administration, as well as costs related to prudent long-term operation and financial management of the utility system, such as maintaining adequate reserves and planning for contingencies. Since the City does not operate its own wastewater treatment facilities, sewer rate revenue is used to pay for wastewater treatment provided by the City of San Diego Metropolitan Wastewater Authority (Metro). The City provides wastewater services as a self-supporting utility enterprise. The revenue generated by the collection of sewer fees is solely used to cover sewer related expenses, including the cost of operating and maintaining the wastewater infrastructure (sewer pipelines, maintenance holes, pump stations, etc.) owned by the City, charges for wastewater treatment services outsourced to Metro, the cost of system improvement projects and the administrative costs such as billing services. As described in more detail in this report several recommendations are proposed for the 5-year Study period (FY2021/22-FY2025/26) to address the regional system expenses, aging infrastructure, and increases in overall expenses. These recommendations include the following: (1) increasing the sewer rates to fund the costs of service; (2) implementing pass through rate adjustments for the expenses from City of San Diego Metropolitan Wastewater (Metro); (3) rescinding the US EPA Permit Renewal Liability Reserve (Permit Reserve) category; (4) increasing the service charge revenue allocations to the Sewerage Facilities Replacement Fund; and (5) allocating $6 million from the Trunk Sewer Capital Fund to the Sewer Service Revenue Fund for payment of a portion of the Metro 2022/04/26 City Council Post Agenda Page 400 of 667 P a g e | 3 capital expenses in FY2022/23. An update to the Master Fee Schedule Chapter 12-200 and City Council Policy 220-04 are also recommended for approval. Ordinance 3155 allows the existing sewer rate to remain unchanged if fiscally prudent. After staff evaluated the enterprise funds and revenues, sewer rates have remained unchanged since July 1, 2018. As outlined in more detail below, staff now recommends implementing increases to the City’s sewer rates in accordance with the Study’s recommendations. BASIS OF SEWER RATE INCREASE In 2021, a financial rate study was completed by Willdan, an independent third-party financial consultant, to evaluate the financial condition of the sewer utility, specifically the ability of current sewer rates to generate sufficient revenue to cover the costs of the sewer utility. The proposed sewer rate increases are needed to fund the operation of the sewer utility, including costs to fund future capital expenditures, increased costs related to operations and maintenance and increasing payments for tre atment costs from the City of San Diego’s Metro. In order to meet the projected costs identified in the Study, the proposed rate changes include zero change through June 30, 2022, followed by a rate increase of 4.5% starting July 1, 2022, an additional increase of 5% starting July 1, 2023, an additional increase of 5% starting July 1, 2024, and an additional increase of 5.5% starting July 1, 2025. SEWER SERVICE CHARGE The City’s Sewer Service Charge represents the ongoing charges to the sewer customers for use of the sewer. The Sewer Service Charge is structured around a fixed service charge and a variable commodity charge. The fixed service charge of the fee helps stabilize revenues from year to year, improving the utility’s ability to plan financially. The variable commodity charge of the rate is established based on volume of potable water usage with a rate of return component to account for water not returning to the sewer. Water usage is metered by the property’s water supplier. The rate of return was established in a prior rate study for the City’s different customer classes. Subsequent rate studies provided reviews of the rate formulas and no recommendation has been made for rate of return adjustments. The rate of return is 90% for all customer classes except for multifamily. All multifamily potable water rate of return to sewer is assumed to be 79% except for mobile homes which are at 84%. For the variable commodity charge, monthly usage along with the rate of return to the sewer is used. The City uses the winter average, or the average of the lowest two consecutive winter months (November through April), for single family residential customers to represent the monthly water consumption. This is a commonly used metric to represent indoor water usage in California. The sewer billing equation used to calculate fees for single family residential customers is as follows: The sewer service charge revenue goes into one of two sewer funds (1) Sewerage Facilities Replacement Fund – used for capital projects (rehabilitation and replacement of the sewer) and (2) Sewer Services 2022/04/26 City Council Post Agenda Page 401 of 667 P a g e | 4 Revenue Fund – used mainly for the operations and maintenance of the system including the treatment of sewage by the City of San Diego. Note that the storm drain fee is included in the bills with the sewer service charge, but is a separate fee which was not evaluated in this study. The details of the storm drain fee can be found in the City’s Master Fee Schedule. Additionally, there are other sewer revenues and sewer funds which were not evaluated in the Study because they are one-time fees (e.g. physically connecting to the system or the cost to purchase capacity in the system). SEWER STUDY RECOMMENDATIONS In December of 2018, the City retained Willdan to prepare the “Sewer Cost of Service Rate Study” completed in July 2021 (Study) (Attachment A). The Study made several recommendations for revenue projections to meet the utility’s projected obligations during the next five fiscal years (FY2021/2022 to FY2025/2026). Additionally, the Study included projections over a ten-year period to provide for the continued fiscal health of the utility. Before reviewing each recommendation, the Study evaluated the ability of the current revenues to meet projected expenses. The Study identified an annual deficit of $6 to $9 million and that the fund balance decrease would not meet the minimum reserve targets required. The Study proposes the following recommendations to meet projected expenses and reserve targets while stabilizing rates: 1. Increase the sewer rates to adequately fund the costs of service 2. Implement pass through rate adjustments for the expenses from City of San Diego Metropolitan Wastewater (Metro) 3. Rescind the US EPA Permit Renewal Liability Reserve (Permit Reserve) category 4. Increase the service charge revenue allocations to the Sewerage Facilities Replacement Fund 5. Allocation of $6 million from the Trunk Sewer Capital Fund to the Sewer Service Revenue Fund for payment of a portion of the Metro capital expenses in FY2022/23 Increase the Sewer Service Charge (Sewer Rates) The costs to provide sewer service have increased due to several factors including higher energy, construction, material, and labor costs. As such, additional revenue is required from the sewer service charges and the Study proposes the increases necessary to adequately cover the increased costs to be 4.5% to 5.5% per year starting July 1, 2022. The proposed increases are included Table 2 (Study Table 4-7). Table 2. CURRENT AND PROPOSED SEWER RATES FY2020/21 TO FY 2025/26 (Study Table 4-7) 2022/04/26 City Council Post Agenda Page 402 of 667 P a g e | 5 Metro Cost Pass Through or Direct Cost Recovery The final proposed recommendation is to implement a Metro Pass Through or Direct Cost Recovery for the City of San Diego Metro Costs. The reason for the direct recovery is to ensure that actual costs are reflected more accurately and timely in the sewer rates. In prior rate studies, City of San Diego expenses were projected and set for the entire rate study period (up to 5-years). The proposed recommendation for direct cost recovery allows for annual adjustments for the City of San Diego actual billings. Each year the actual City of San Diego billing costs will be compared with the projected costs included in the rate study. 2022/04/26 City Council Post Agenda Page 403 of 667 P a g e | 6 Differences will be reflected in a rate adjustment the following year. This ensures that rates remain smooth, reducing large spikes at the end of the rate period in 2026. Most of the sewer utilities using the Metro facilities have already adopted this approach which is commonly referred to as a pass through. Customers will be noticed at least 30 days prior to the changes. Removal of the Permit Reserve The Permit Reserve Category was established on December 17, 2013, by City Council Resolution No. 2013- 265, approving Policy 220-04, to ensure adequate monies would be available to fund the anticipated capital needs by Metro associated with maintaining the Point Loma Wastewater Treatment Plant (PLWWTP). At the time the reserve was established, Metro’s PLWWTP permit waiver was being considered for renewal. If denied, Metro would need to develop and implement improvements to achieve secondary treatment level at PLWWTP. If the waiver was not granted, the estimated costs of adding secondary level treatment was expected to be over $1 billion in capital costs (2013 preliminary estimate). Of this, Chula Vista would be responsible for about 10%. In addition, the timing for when Chula Vista’s share of their capital costs would be required by Metro was still uncertain. By actively establishing a reserve and planning for the upgrades to the regional treatment plant or alternative, Chula Vista would be in a stronger financial position to afford such costs while mitigating impacts to rate payers. In the time since this reserve was established, the capital improvements need for the PLWWTP permit waiver have been identified and cost sharing established. Additionally, the City of San Diego provided five‐year projections for the City’s anticipated contributions. The City of San Diego’s annual five‐year cost projections eliminates the need for the City to maintain a large cash reserve on hand. For the Rate Study and proposed rate increases, the City’s share of the Metro upgrade costs is included. Another reason for eliminating the reserve category is that the Study’s proposed recommendations include pass-through rate adjustments to account for fluctuations in Metro Costs. The pass through rate adjustments are described in more detail later in this report. Adoption of the resolution would also approve changes to City Council Policy Number 220-04, Sewer Service Revenue Fund Reserve Policy to remove the Permit Reserve category. The proposed changes to the policy can be found in Attachment B. 2. Increase Allocations to the Sewerage Facilities Replacement Fund The Study recommended that annual revenues into the Sewerage Facilities Replacement (SFR) Fund equal annual depreciation to ensure monies would be available for the system’s capital needs. The prior Study included an annual revenue target of about 50% of annual depreciation. The increase in allocation of revenue to the SFR Fund was recommended over a ten-year period to maintain rate stability. An adequately funded repair, rehabilitation and replacement program helps to ensure a well‐functioning, more reliable system with minimal costly unanticipated major repairs. The recommended allocation is shown in Table 1. Table 1. Fund Allocation for Sewer Service Charge (Study Table 4-6) 2022/04/26 City Council Post Agenda Page 404 of 667 P a g e | 7 3. Money from Trunk Sewer Capital Fund The Trunk Sewer Capital Fund represents revenue from capacity fees; the cost for new customers to buy into the sewer system. Per Chula Vista Municipal Code 3.14.010, the Trunk Sewer Capital Fund can be used for enlargement of sewer facilities and planning of area‐wide sewage treatment and/or reclamation systems or facilities. With City Council approval, the money can be used for construction of sewage collection or treatment facilities. The cash balance of the Trunk Sewer Capital Fund as of June 30, 2020 was $64.8 million. The Study recommended that $6 million be used from the Trunk Sewer Capital Fund to pay for the capital project expenses during the Study Period to offset the amount used from the Sewer Service Revenue Fund. Staff is recommending that the $6 million be used the first year of the rate approval, FY 2022/23. Authorization of the use of the $6 million in FY2022/23 for the regional capital Metro expenses requires a 4/5ths vote by City Council. The use of the money from the Trunk Sewer Capital Fund meets the criteria of the fund use and is critical to ensuring the minimum reserve levels can be maintained. REGIONAL RATE COMPARISON Chula Vista’s sewer rates remain some of the lowest in the region. While acknowledging that every agency’s cost for operating its wastewater collection system varies in accordance with its unique characteristics (size, age of system, etc.), Graph 1 compares the residential sewer bills from sewer utilities in the region. Shown are current rates for an average single-family sewer customer consuming 7 hundred cubic feet of water per month, for 2021. Both the current and proposed Chula Vista rates are included in the graph. Customers can have some influence on their individual sewer bill by actively monitoring and cons erving potable water usage. Residential customers with volume rates based on the winter average benefit from conserving during the winter months of November through April. Graph 1. Regional Monthly Single-Family Residential Bill (Average Water Consumption, 7 HCF) 2022/04/26 City Council Post Agenda Page 405 of 667 P a g e | 8 The graph was updated in September 2021. The proposed effective date for the proposed rate increases is July 1, 2022. IMPACT TO RATE PAYER The impact to the ratepayer would vary depending on their individual water consumption. The following is a sample bill calculation showing the actual dollar increase per year as the new rates are implemented. The sample calculation in Table 3 reflects three different customer classes (single family, multi-family, and commercial). Table 3. SAMPLE SEWER CHARGES USING PROJECTED RATES COMMUNITY OUTREACH Hard copy mailers. A formal Proposition 218 Notice of Public Hearing in both English and Spanish was mailed on November 22, 2021 to sewer customers based on billing record addresses. Notices went to both t he service address and the owners addresses. The Sewer Rate Public Hearing date of February 8, 2022, noticed 2022/04/26 City Council Post Agenda Page 406 of 667 P a g e | 9 in the November mailing was delayed after determining the use of owner addresses from County Tax Assessor Records is a more reliable means of reaching property owners. A revised Proposition 218 Notice of Public Hearing was mailed using addresses from official County Tax Assessor Records. It was cross referenced with all the addresses in the initial mailing and both addresses from the Tax Assessor received a notice and addresses from the initial mailing received the second notice both. The mailing was sent February 10, 2022, which included 4 weeks to review and re -mail any undeliverable parcels, while ensuring the 45-day notice period would apply to re-mailing. Return mail received from the second mailing was reviewed and reasonable efforts were made to remail with a corrected address or forwarding address. Corrected and/or forwarded mail was sent out prior to March 11, 2022, more than 45 days prior to the Public Hearing on April 26, 2022. Copies of the first and second mailing are included in Attachment C. All notices were sent in both English and Spanish. Informational Meetings. Public outreach meetings were held virtually on December 8 and 14, 2021, to ensure the safety of the public and staff. Details of the informational meetings were included in notices mailed on November 22, 2021, on the City’s website (www.chulavistaca.gov/SewerRates) social media, and the City’s calendar. The events were advertised in the Star News on December 10. Website Presence. The City’s website (www.chulavistaca.gov/SewerRates), which is available in over 100 different languages through a site toggle, was updated with: 1. Notices of the sewer rate increase in English and Spanish 2. Instructions on how to file a protest and sample protest forms 3. Public information event links 4. Frequently Asked Questions 5. Water conservation information A copy of the website is included as Attachment D. Newspaper. Information on the Sewer Rate increase and public outreach events in December was published in the December 10, 2021 Star News. Social Media. Several social media information postings were offered regarding the sewer rate information events and Public Hearing. REGULATORY COMPLIANCE The City’s ability to increase sewer fees is governed by Proposition 218, which requires written notice of (i) the location, time and date of the public hearing; (ii) the amount of the proposed fee increase; and (iii) the reasons and basis for the proposed fee increase. The City provided written notice to the affected property owners and rate payers. The notice included information on the public outreach meetings, frequently asked questions, sample calculations and information on how to obtain assistance from City staff regarding questions related to the proposed increase. A copy of the notices for the February 8, 2022 Public Hearing and the April 26, 2022 Public Hearing are included in Attachment C. Proposition 218 requires that the City hold a “majority protest” public hearing prior to implementing an increase. If written protests are submitted for a majority of the affected parcels, the rate increase shall not be implemented. The number of accounts served by the sewer system is 49,828 as of June 2021. Note that 2022/04/26 City Council Post Agenda Page 407 of 667 P a g e | 10 sewer customer numbers only increase due to the City’s requirements to connect to the sewer. Thus, under Proposition 218, a majority protest would exist if written protests were submitted by property owners or customers on behalf of at least 24,915 parcels (a simple majority). Based on Ordinance 2736, delinquent sewer accounts may have a lien placed on their property to ensure the payment of the sewer bills. To ensure this remains an available option for delinquencies, the owners of the properties were provided with the Proposition 218 Notice in addition to billed customers. All property owners within the jurisdictional area of the City of Chula Vista were noticed using official San Diego County Tax Assessor addresses. AMENDMENT OF MASTER FEE The City’s existing sewer service charges are set forth in the City’s Master Fee Schedule. As these sewer service charges are amended, the Master Fee Schedule 12-200 would be amended accordingly (Attachment E). AMENDMENT OF POLICY 220-04 SEWER SERVICE REVENUE FUND RESERVE POLICY The City’s reserve policy for the sewer service revenue fund is set forth in Policy 220-04. As the recommendation is to rescind the Permit Reserve category, Policy 220-04 would be amended accordingly (Attachment B). DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no impact to the Sewer Fund in the current fiscal year (FY2021/22) as approval of this action will affect sewer rate revenues for FY2022/23 through FY2025/26. ONGOING FISCAL IMPACT The proposed rate increase is crucial to the City’s ability to operate and maintain the City’s wastewater collection system in a manner that continues the current high level of service. Approval of this action will increase sewer rate revenues for FY2022/23 through FY2025/26 to ensure sewer expenses are covered and reserves met. ATTACHMENTS Attachment A – Sewer Cost of Service Rate Study 2021 Attachment B – Proposed Revisions Policy 220-04 Sewer Service Revenue Fund Reserve Policy Attachment C - Proposition 218 Notices 2022/04/26 City Council Post Agenda Page 408 of 667 P a g e | 11 Attachment D – Website Posting Attachment E – Proposed Revisions Master Fee Schedule Staff Contact: William Valle, Director of Engineering and Capital Projects/City Engineer & Beth Gentry, Sr. Civil Engineer 2022/04/26 City Council Post Agenda Page 409 of 667 City of Chula Vista, California Report Sewer Rate Study 2022/04/26 City Council Post Agenda Page 410 of 667          i Rate Study – Final Report July 21, 2021   TABLE OF CONTENTS TABLE OF CONTENTS ...................................................................................................................................... i  Section 1 – Executive Summary ..................................................................................................................... 1  1.1  Study Overview ....................................................................................................................................... 1  1.2  Financial Planning Period ........................................................................................................................ 1  1.3  Financial Management Goals of the City ................................................................................................ 2  1.4  Findings and Recommendations ............................................................................................................ 4  Section 2 ‐ Introduction ................................................................................................................................. 7  2.1  Introduction ............................................................................................................................................ 7  2.2  Goals and Objectives .............................................................................................................................. 7  2.3  Overview of the Rate Study Process ....................................................................................................... 7  2.4  Organization of this Report .................................................................................................................... 8  2.5.  Reliance on Data ..................................................................................................................................... 9  Section 3 – Overview of Financial Planning Principles, Processes, and Issues ............................................... 10  3.1  Introduction .......................................................................................................................................... 10  3.2  The Revenue Sufficiency Process .......................................................................................................... 10  3.2.1  Determination of the Revenue Requirements ............................................................................. 11  3.3  Determination of Revenue Requirements ............................................................................................ 12  3.4  Financial Management Goals of the City .............................................................................................. 12  3.4.1  Cash Reserve Targets .................................................................................................................... 13  Section 4 – Financial Plan Development and Results ................................................................................... 16  4.1  Revenue Sufficiency Analysis ................................................................................................................ 16  4.1.1  General Methodology .................................................................................................................. 16  4.1.2  Data Items .................................................................................................................................... 17  4.1.3  FY 2020‐21 Beginning of Year Cash Balance ................................................................................. 17  4.1.4  Interest Earnings ........................................................................................................................... 18  4.1.5  FY 2020‐21 Adopted Budget ......................................................................................................... 18  4.1.6  Rate Revenue Projections ............................................................................................................ 18  4.1.7  Regional Wastewater Disposal Costs/Metro Costs ...................................................................... 19  4.1.8  Capital Improvements Plan (CIP) .................................................................................................. 19  2022/04/26 City Council Post Agenda Page 411 of 667          ii Rate Study – Final Report July 21, 2021   4.1.9  General Assumptions ................................................................................................................... 20  Section 5 – Conclusions and Recommendations .......................................................................................... 32  5.1  Conclusions ................................................................................................................................... 32  5.2  Recommendations ........................................................................................................................ 32    Appendices:   Appendix A – Financial Plan Summary   Appendix B – Reserve Fund Policies   Appendix C – Cash Balances   Appendix D – System Growth Estimates   Appendix E – Interest Earnings Assumptions   Appendix F – Metro Cost Projections   Appendix G – Cost Escalation Factors   Appendix H – ENR 20 Cities Index  2022/04/26 City Council Post Agenda Page 412 of 667        1 | Page    Section 1 – Executive Summary The City of Chula Vista (City) provides sewer service to a population of approximately 275,000. The City’s  sewer enterprise fund is self‐supporting and funds operations and maintenance (O&M) costs, capital  projects including routine repair and replacement of aging system components of the sewer system.  Sewer user rate revenue provides stable secure revenue for the utility and is the primary revenue source.  Revenue from sewer user rates cannot be used for any other general or special purpose. The main  objective of this study was to develop a ten‐year financial plan with a focus on the first five years, that  evaluated the sufficiency of projected revenue over the ten‐year projection period to cover the costs of  operating and maintaining the utility. The financial plan includes recommended rate revenue adjustments  to ensure continued revenue sufficiency and stability. These are discussed in further detail in the body of  this report.  The five‐year plan is covered in the balance of this report while the full ten‐year plan can be  found in the appendices.  1.1 Study Overview The City contracted with Willdan Financial Services (“Willdan”), to complete a sewer rate study comprised  of the following objectives:    Ten‐Year Financial Plan with a Five‐Year Focus: Identify the revenues required by the utility to  meet the respective annual costs of operation and system maintenance.   Recommendations for potential rate increases: Identify where adjustments in future rates may  be necessary to generate sufficient revenue for system objectives and costs.  1.2 Financial Planning Period This study develops a 10‐year financial plan but focuses on the current year plus the first 5‐years (fiscal  years 2021‐22 through fiscal year 2025‐26), identifying costs such as operating expenses (including costs  related  to  the  San  Diego  Metropolitan  Wastewater  Authority  Point  Loma  Treatment  Plant),  capital  improvement costs and debt financing (should future debt be issued). In addition, a broader outlook (fiscal  years 2021‐22 through fiscal year 2029‐30) is reviewed and included to ensure appropriate reserve  balances are met based on industry standards and the City of Chula Vista’s fiscal policies.  2022/04/26 City Council Post Agenda Page 413 of 667        2 | Page    1.3 Financial Management Goals of the City The establishment of specific financial management goals of a utility is a key step in developing financial  plans that are consistent in approach, based on sound policies, and that will ensure the financial health of  the utility remains strong.  The City has established reserve policies for the sewer utility to help ensure  financial stability as well as the continued ability to provide sewer service.  The City maintains the  following sewer utility funds:   Sewer Services Revenue Fund (Fund 414) – The fund is mainly for operations and maintenance of  system assets but can also be used to meet capital and planning needs.    Sewer Facilities Replacement (SFR) (Fund 428) – This fund is for capital projects related to the  rehabilitation and replacement of the City’s collection system.   Trunk Sewer Capital Fund (Fund 413) – This fund includes capacity fees paid to the City and  represents the cost of buying into the system for new customers or increased flows. The funds  are to be used to pay the costs and expenses associated with repairing or replacing large trunk  sewer facilities and to enhance the sewer system. With City Council’s approval this fund can be  used for regional treatment facilities.   Sewer Income Fund (Fund 411) – Revenue deposited into this fund is used to pay for lateral  connection infrastructure associated with new connections to the system. New customers pay for  the cost of the connection. Revenues collected for this fund cover the City’s cost to construct the  public wastewater system for new properties through permit fees.  These costs are calculated  separately.  This fund was not included in the study evaluation.     Sewer Development Impact Fee Fund (Sewer DIF) (Fund 430) – These funds cover capital projects  triggered by new development, including infill or redevelopment. The revenues and expenses  associated with DIF related projects in this fund are DIF funds and are addressed in separate  studies and not included in this study.   Strom Drain Fee (Fund 301) – These funds are used to operate and maintain the City’s storm  drainage system.  This fund was not included in the study.  Target reserve policies have been identified within individual funds that the City strives to achieve and  maintain.  The current financial management goals of the City are described below in terms of cash reserve  targets. By meeting the cash reserve targets (identified below) the implication is that the revenues and  expenses are also balanced.   2022/04/26 City Council Post Agenda Page 414 of 667        3 | Page    Cash Reserve Targets – Sewer Revenue Fund (Fund 414)  In December 2013, City Council approved a reserve policy for the Sewer Services Revenue Fund or Fund  414, which includes five reserve categories; summarized in Table 1‐1.  Table 1‐1   Summary of Reserve Policy for the Sewer Service Revenue Fund (Fund 414)  Reserve Purpose Minimum Balance Maximum Balance  Working Capital   Manage differences in  revenue and expense  cycles   90 days of operating  expenses ($9.6  million in 2021)   125% of minimum  balance ($12.0  million in 2021)  Rate  Stabilization   Protect against  unforeseen fluctuations  in revenues or expenses   90 days of operating  expenses ($9.6  million in 2021)    125% of minimum  balance ($12.0  million in 2021)  Emergency   Provide funding for  emergency asset  replacement and  insurance deductibles   5% of operating  expenses ($1.9  million in 2021)   125% of minimum  balance ($2.4  million in 2021)  Vehicle  Replacement   Levelize cost impacts of  vehicle replacement  needs   2% of operating expenses ($779 thousand in  2021)  EPA Permit  Renewal Liability   Accrue funding for  PLWTP upgrade  (recommended scenario)   Prior annual transfer target $1.8 million   Recommended for removal  As of June 30, 2020, Fund 414 had a balance of $48.1 million.  Cash Reserve Targets – Sewer Facilities Replacement (SFR) (Fund 428)  As of June 30, 2020, the Sewer Facilities Replacement Fund (Fund 428) or SFR had a balance of $13.6  million. The generally accepted industry standard reserve target for this type of fund is based on the  annual revenues with the target collection equal to the annual depreciation of its infrastructure.  Revenue  equal to annual depreciation helps to ensure that infrastructure is kept reliable as system components  age and can help prevent significant unexpected repairs which can be more costly than routine repair and  replacements  of  aging  system  components  paid  for  from  an  adequately  funded  annual  capital  replacement and rehabilitation reserve. The last rate study set a target for the fund at starting point of  54% of the annual depreciation.  The Sewer Fund depreciation for FY 2019‐20 was $6.5M (per the 2020 Comprehensive Annual Financial  Report (CAFR) page 46). The revenue collected for this fund  in FY 2019‐20 was $2.4 million which  represents 36.9% of annual depreciation. This amount falls short both of the goal of matching annual  2022/04/26 City Council Post Agenda Page 415 of 667        4 | Page    depreciation as well as the recommended target from the prior study1. To achieve the target of 54% of  annual depreciation the City would have needed to generate $3.7 million in revenues.  Cash Reserve Targets – Trunk Sewer Capital Fund (Fund 413)  The Trunk Sewer Capital Fund represents revenues collected and held from the payment of fees to offset  the cost to buy into the City of Chula Vista’s sewer system. These funds can be used for enlargement of  sewer facilities and planning of area‐wide sewage treatment and/or reclamation systems or facilities. With  City Council approval, the money can be used for construction of sewage collection or treatment facilities.  The available cash balance of the Trunk Sewer Capital Fund as of June 30, 2020 was $64.8 million. Since  the fund represents the cost to buy into the sewer system, no cash reserve target exists.  1.4 Findings and Recommendations In  developing  the  financial  plan  for  the  sewer  utility,  it  was determined  that  if  the  following  recommendations are implemented, the sewer rates charged to customers can remain unchanged for  Fiscal Year 2021‐22 followed by moderate annual increases between 4.5% to 5.5% for the remaining 9  years of the study period (through Fiscal year 2029‐30).  The recommendations are:  1. Implement Metro Costs Pass Through – The California Government Code Section 53756 allows for  adjustments that pass through the increases and decreases in wholesale charges for sewage  treatment.   2. Rescind  the  Permit  Liability  Reserve  (or  EPA  Liability  Reserve or  EPA  Reserve)  ‐  The  implementation of the Metro Costs Pass Through along with other factors described in more  detail in later sections allow for the removal of the EPA Liability Reserve.  The amount of revenue  collected to meet this reserve was targeted at $1.8 million based on assumptions from the 2013  Rate Study.  Removal of this reserve amount allows for more available cash and makes possible  the stabilization of customer rates.  3. Increase the Allocation of the Service Charge Revenue to SFR Fund – The reserve goal of the SFR  fund was increased to meet industry standards.  The last rate study had a goal of meeting  approximately half of the industry reserve standards.  Under the revised goal, more money is  needed for this fund on an annual basis.  Thus, the percent of the service charges going into the    1 City of Chula Vista Sewer Cost-of-Service Rate Study November 2013 Prepared by FCS Group. 2022/04/26 City Council Post Agenda Page 416 of 667        5 | Page    SFR fund from the service charges collected from the customers increases. This also means that  less service charge revenue is allocated to Fund 414.  4. Request Council authorize the use of Trunk Sewer Capital Reserve Fund – The Trunk Sewer Capital  Reserve Fund can be used for capital expenses of the sewer system with City Council approval.   The City is working to keep sewer rates reasonable and fair in compliance with Proposition 218.   In the last two years of the five‐year study FY 2024‐25 and FY 2025‐26, the released reserve  amount from the EPA Liability Reserve has been depleted and with expenses outpacing revenues  the reserve targets cannot be met without large increases to rates.  Thus, it is recommended that  with City Council approval, money from Fund 413 be used to pay for regional capital sewer  expenses charged by Metro.  The result is that less money is needed from Fund 414 to pay for the  City of San Diego Metro costs and the fund can maintain the target balances.  As noted in Table 1‐1, the EPA permit reserve is recommended for removal.  When this reserve was initially  adopted, (with an initial target of $1.8 million) an assumption was made that the City of San Diego would  cash fund the capital costs associated with the Point Loma Wastewater Treatment Plant upgrades for  secondary treatment. The reserve was intended to offset the City’s share of the upgrade costs. In the time  since the reserve was established, the City of San Diego has provided the Participating Agencies (on an  annual basis) five‐year projections for the Agencies contributions. In these projections, San Diego is  showing  their  own  debt  servicing.  San  Diego’s  change  in  approach  to  funding  the  treatment  plant  upgrades eliminates the need for the City to maintain a large cash reserve on hand to pay their one‐time  share of capital costs. Instead, the City’s share of the upgrade costs is budgeted annually in the financial  plan. Another reason for eliminating the reserve is that this study recommends a pass‐through adjustment  mechanism to account for annual fluctuations in Metro Costs which are beyond the City’s control. The  pass through is discussed in more detail later in this report.  It is recommended that the City update the cashflow portion of this study each year.  This will help to  ensure projected revenue remains on track over time and is sufficient to fund projected expenses going  forward.  This is important as assumptions made during this analysis may change and have a material  impact on the analysis.  A summary of the projected rate revenue increases, fund goals and cash balances  are illustrated in Table 1‐2.     2022/04/26 City Council Post Agenda Page 417 of 667        6 | Page        Table 1‐2  Projected Rate Revenue Increases and Cash Balances  Fiscal Years Ending June 30  Fiscal Year  Sewer Rate  Revenue  Increases  Target  Balance (1)  SSR Fund  414  Actual  Ending  Balance  SSR Fund  414  Target  Revenues  SFR Fund  428  Actual  Revenues  SFR Fund  428  Actual  Ending  Balance  TSC Fund  413  (In Thousands)  2021‐22  0.0%  $21,535  $37,661  $7,135  $1,801  $64,837  2022‐23  4.5%  22,055  33,503  7,345  2,306  64,837  2023‐24  5.0%  22,579  30,016  7,563  2,871  64,837  2024‐25  5.0%  23,108  33,721  7,786  3,536  58,837  2025‐26  5.5%  24,324  31,720  8,016  4,303  58,837  (1) It is assumed that in FY 2021‐22 the recommendations are implemented.  One  recommendation is the removal of the EPA Liability Reserve which is why the actual ending  balance for Fund 414 appears to be large compared to the target balance in Fund 414.  It should be noted that the City’s current sewer rates developed through the cost‐of‐service analysis in  the prior report2  appear reasonable and meet the requirements of Proposition 218. A more detailed  summary of the rate study is presented in the balance of this report.       2 City of Chula Vista Sewer Cost-of-Service Rate Study November 2013 Prepared by FCS Group. 2022/04/26 City Council Post Agenda Page 418 of 667        7 | Page      Section 2 - Introduction 2.1 Introduction Willdan Financial Services (“Willdan”) was retained by the City of Chula Vista, California (“City”) to conduct  a Sewer Rate and Financial Study (“Rate Study”) for the City’s sewer utility (“Utility”). This report details  the results of the Rate Study analysis for the forecast period, from the current year through the next five  years, fiscal year (FY) 2021‐22 through FY 2025‐26, the results of which are presented in this Rate Study  Report.  The results of the Rate Study include a 10‐year financial plan and suggested rate adjustments designed to  provide revenue necessary to over time be sufficient to fund the ongoing operating, maintenance and  capital costs necessary to operate the City’s sewer utility, including the costs of treatment incurred by the  City  from  the  San  Diego  Metropolitan  Wastewater  Authority,  while  striving  to  meet  the  financial  requirements and goals set forth by the City for the sewer enterprise fund.  Based on discussion with City staff, this report presents the recommended financial plan and adjustments  to meet the City’s objectives.  2.2 Goals and Objectives The primary goal of the Rate Study was to develop a financial plan that evaluated the adequacy of the  current revenue streams to meet ongoing costs (operations & maintenance and capital), and to maintain  industry standard financially prudent cash reserves. More specifically the Rate Study was undertaken to:   Conduct  the  analysis  in  accordance  with  industry  standards  consistent  Water  Environment  Federation (“WEF”) guidelines; and   Develop a financial plan consistent with industry standards and best practices while recognizing  the needs specific to the City.  2.3 Overview of the Rate Study Process The study involved a determination of the adequacy of system revenues to meet system expenses during  the study forecast period. The result of this analysis, known as the Revenue Sufficiency Analysis, is an  assessment of the ability of the existing revenue stream from sewer service charges (rates) to meet the  2022/04/26 City Council Post Agenda Page 419 of 667        8 | Page    projected financial requirements of the system during the forecast period and, to the extent required, the  identification of the magnitude and timing of any required rate adjustments.    2.4 Organization of this Report This Rate Study presents an overview of the financial planning concepts employed in the development of  the analysis contained here. The analysis is followed by a discussion of the data, assumptions and results  associated  with  each  component  of  the  analysis.  Finally,  appendices  with  detailed  schedules  are  presented for further investigation and insight into the data, assumptions and calculations which drive  the results presented in this Rate Study. The report is organized as follows:  •  Section 1 – Executive Summary  •  Section 2 – Introduction  •  Section 3 – Overview of Financial Planning Principles, Processes, and Issues  •  Section 4 – Financial Plan Development and Results  •  Section 5 – Conclusions and Recommendations  •  Appendix A – Financial Plan Summary   Appendix B – Reserve Fund Policies   Appendix C – Cash Balances   Appendix D – System Growth Estimates   Appendix E – Interest Earnings Assumptions   Appendix F – Metro Cost Projections   Appendix G – Cost Escalation Factors   Appendix H – ENR 20 Cities Index  The following abbreviations are used throughout this report:  CAFR – Comprehensive Annual Financial Report  CIP – Capital Improvement Plan  ENR CCI – Engineering News Record Construction Cost Index  FY – Fiscal Year  DSC – Debt Service Coverage  2022/04/26 City Council Post Agenda Page 420 of 667        9 | Page    Metro – City of San Diego Metropolitan Wastewater  O&M – Operations and Maintenance Expense  PLWTP – Point Loma Wastewater Treatment Plant  PUD – City of San Diego Public Utilities Department  SFR – Sewerage Facility Replacement   USEPA – United States Environmental Protection Agency 2.5. Reliance on Data During this project, the City (and/or its representatives) provided Willdan with a variety of technical  information, including capital cost and demographic data. This data was used by Willdan in the process of  developing the financial plans and recommended rate adjustments. Willdan did not independently assess  or test for the accuracy of such data, historic or projected, but worked with City staff to better verify and  understand the data and its sources and ensure it was incorporated appropriately into the analysis. We  believe it to be the best available information at the time of the study.      2022/04/26 City Council Post Agenda Page 421 of 667        10 | Page    Section 3 – Overview of Financial Planning Principles, Processes, and Issues 3.1 Introduction The rate study process for the sewer utility begins with a determination of the adequacy of system  revenues to meet system expenses during the study forecast period. The result of this analysis, known as  the Revenue Sufficiency Analysis, is an assessment of the ability of the existing revenue stream to meet  the projected financial requirements of the system during the forecast period and, to the extent required,  the identification of the magnitude and timing of any required rate adjustments.  3.2 The Revenue Sufficiency Process In order to determine whether existing rates and charges will generate sufficient revenue to meet the  fiscal requirements of the sewer utility, a calculation of the annual rate revenue requirements must be  completed. A Revenue Sufficiency Analysis compares the sufficiency of revenues under existing rates to  meet forecasted costs for operations and maintenance expenses (O&M), debt service (if applicable), and  capital, as well as the accumulation and maintenance of reasonable cash reserves.  The purpose of the  comparison is to determine the adequacy of the existing rates to recover the utility’s costs. The analysis  of the maintenance of the cash reserves includes an examination of the projected reserve balance as  compared to the objectives outlined in the City’s reserve policies.   The  process  employed  in  the  Revenue  Sufficiency  Analysis  involves a rigorous review of operating,  maintenance and capital budgets for the utility, and results in the identification of revenue requirements  of the system, such as operating expenses, capital expenses (minor and major), transfers in and out, and  the  maintenance  of  both  restricted  and  unrestricted  reserves  at  appropriate  levels.  These  revenue  requirements are then compared to the total sources of funds available during each year of the forecast  period to determine the adequacy of projected revenues to meet projected revenue requirements. To the  extent that the existing revenue stream is projected to be insufficient to meet the annual revenue  requirements of the system during the projection period, a series of recommended rate revenue increases  are calculated which if enacted, would provide revenue sufficient to meet those needs.      2022/04/26 City Council Post Agenda Page 422 of 667        11 | Page    3.2.1 Determination of the Revenue Requirements Considerations in Setting Revenue Requirements There are a multitude of considerations, ranging from financial and policy, to political to legal that must  be analyzed or discussed during the revenue requirements process of a rate analysis. This section provides  an overview of the considerations that are reviewed during this process.   Capital Budgeting and Financing Capital needs are identified in the City’s Sewer Capital Improvement Plan (CIP) which is updated on an  annual basis. As part of its budget and planning process, the City identified capital improvements that are  necessary for the continued operation of the sewer system. Capital improvement projects typically use  money from the Sewer Facility Replacement Fund which receives revenue from a portion of the sewer  service charges. Capital Funding: Debt vs. PAYGO The selection of the appropriate funding strategy for capital projects is primarily a policy decision between  use of cash (“Pay‐as‐you‐go financing” or PAYGO), the issuance of debt, or a combination. PAYGO is the  use or build‐up of cash to fund capital improvements. With debt financing, capital improvements are  funded with borrowed funds (usually through the issuance of bonds) with the obligation of repayment,  typically with interest, in future years. Development of an optimal capital financial plan depends on the  definition of optimal. Each funding mechanism has a different impact on sewer rates in the short and long  run, different net present values, risks, and legal obligations. Due to the borrowing costs associated with  debt, cash funding can be cheaper in the end (by not having to incur interest costs on borrowed money);  however, debt typically ensures greater generational equity for larger and longer lasting capital projects  (by contributing to annual debt payments, new customers who connect to the system help pay for the  infrastructure that was installed prior to their arrival, but still benefits them)3.   The City, as is typical for a public utility, operates its sewer utility on a “cash basis”. Under the “cash basis”  approach, revenues and expenses are recognized at the time physical cash is received or paid out.    3 Willdan Financial Services is not advising or recommending any action be taken by the recipient of this information with respect  to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the  structure, timing, terms and other similar matters concerning such financial products or issues).  The issuance, timing and structure  of new debt issues should be evaluated by the City and their financial advisor.  2022/04/26 City Council Post Agenda Page 423 of 667        12 | Page    Revenue requirements are determined for a specified period of time (in the case of the City an annual  fiscal year), by summing the total anticipated expenses to be paid out during the fiscal year. Where cash  flows  and  balances  are  insufficient,  the  revenue  requirements  analysis  recommends  the  needed  additional cash flows to meet all funding goals. The two primary categories of expenses are as follows:  • Operations  and  Maintenance  (O&M)  expenses,  such  as  salaries  and  benefits  of  City  utility  personnel, third party costs such as treatment costs billed to the City from the San Diego Metro  Wastewater Authority, transfers out, and reserves; and  • Capital expenses, such as the annual capital improvement program.   3.3 Determination of Revenue Requirements In order to complete the revenue sufficiency process, it is first necessary to identify the utility’s costs  (revenue requirements).   The process started by identifying the sewer funds, their target balances based on best practices and/or  the City’s fiscal policies, and their actual balances at the beginning of the projection period. There are five  sewer funds and a storm drainage fund, each set up with a different purpose, and which are briefly  described above in Section 1.3.    Sewer Funds   Sewer Services Revenue Fund (Fund 414)    Sewer Facilities Replacement (SFR) (Fund 428)   Trunk Sewer Capital Fund (Fund 413)   Sewer Income Fund (Fund 411) – Not included in this study      Sewer Development Impact Fee Fund (Sewer DIF) (Fund 430) – Not included in this study   Storm Drain Fee Fund (Fund 301) – Not included in this study  3.4 Financial Management Goals of the City The establishment of specific financial management goals of a utility is a key step in developing financial  plans that are consistent in approach, based on sound policies, and that will ensure the financial health of  the utility remains strong. The City has established reserve policies for the sewer utility to help ensure  financial stability as well as the continued ability to provide sewer service. The City maintains the following  sewer utility funds:  2022/04/26 City Council Post Agenda Page 424 of 667        13 | Page     Sewer Service Revenue Fund (Fund 414) – Used to account for a portion of monies collected from  the monthly sewer charge and is used for any and all sewer related activities.   Trunk Sewer Capital Reserve Fund (413) – Used to account for sewerage facility participation fees  received to develop or modify property which will increase the volume of flow to the City’s sewer  system. The funds are to be used to pay the costs and expenses associated with repairing or  replacing large trunk sewer facilities to enhance the capacity of the sewer system.   Sewer Replacement Fund (428) – Funded via a portion of the monthly sewer service charge.   Monies in the fund are restricted for the purpose of paying the costs and expenses associated  with the upgrade or replacement of sewerage facilities.  Target reserve policies have been identified within individual funds that the City strives to achieve and  maintain.  The current financial management goals of the City are described below in terms of cash reserve  targets. By meeting the cash reserve targets (identified below) the implication is that the revenues and  expenses are also balanced.    3.4.1 Cash Reserve Targets Cash Reserve Targets – Sewer Revenue Fund (Fund 414)  In December 2013, City Council approved a reserve policy for the Sewer Services Revenue Fund, which is  summarized in Table 3‐1.  The City’s full reserve policies can be found in Appendix B.    2022/04/26 City Council Post Agenda Page 425 of 667        14 | Page      Table 3‐1   Summary of Reserve Policy for the Sewer Service Revenue Fund (Fund 414)  Reserve Purpose Minimum Balance Maximum Balance  Working Capital   Manage differences in  revenue and expense  cycles   90 days of operating  expenses ($9.6  million in 2021)   125% of minimum  balance ($12.0  million in 2021)  Rate Stabilization   Protect against  unforeseen  fluctuations in  revenues or expenses   90 days of operating  expenses ($9.6  million in 2021)    125% of minimum  balance ($12.0  million in 2021)  Emergency   Provide funding for  emergency asset  replacement and  insurance deductibles   5% of operating  expenses ($1.9  million in 2021)   125% of minimum  balance ($2.4  million in 2020)  Vehicle  Replacement   Levelize cost impacts  of vehicle replacement  needs   2% of operating expenses ($779 thousand in  2021)  EPA Permit  Renewal Liability   Accrue funding for  PLWTP upgrade  (recommended  scenario)   Prior annual transfer target $1.8 million    Recommended for removal      As of June 30, 2020, Fund 414 had a balance of $48.1 million.  As noted in Table 3‐1, the EPA permit reserve is recommended for removal.  When this reserve was initially  adopted, an assumption was made that the City of San Diego woul d cash fund the capital costs associated  with the Point Loma Wastewater Treatment Plant upgrades for secondary treatment. The reserve was  intended to offset the City’s share of the upgrade costs. In th e time since the reserve was established, the  City of San Diego has provided the Participating Agencies (on an annual basis) with five‐year projections  for the Agencies contributions. The City of San Diego’s annual five‐year cost projections to Participating  Agencies eliminates the need for the City to maintain a large cash reserve on hand to pay their one‐time  share of capital costs. Instead, the City’s share of the upgrade costs is currently proposed to be budgeted  annually in the financial plan. Another reason for eliminating the reserve is that this study recommends a  pass‐through to account for fluctuations in Metro Costs. The pass through is discussed in more detail later  in this report.     2022/04/26 City Council Post Agenda Page 426 of 667        15 | Page    Cash Reserve Targets – Sewer Facilities Replacement (SFR) (Fund 428)  As of June 30, 2020, the Sewer Facilities Replacement Fund (Fund 428) or SFR had a balance of $13.6  million. The generally accepted industry standard reserve target for this type of fund is based on the  annual revenues with the target annual revenue equal to the annual depreciation of its infrastructure.  Revenue equal to annual depreciation helps to ensure that infrastructure is reliable as system components  age and can help prevent significant unexpected repairs which can be more costly than an adequately  funded annual capital replacement and rehabilitation.  The last rate study set initiated a target for the  fund at starting point of 54% of the annual depreciation.  The Sewer Fund depreciation for FY 2019‐20 was $6.5M (per the 2020 CAFR page 45). The revenue  collected for this fund in FY 2019‐20 was $2.4 million which represents 36.9% of annual depreciation.  To  achieve the target of 54% of annual depreciation the City would have needed to generate $3.7 million in  revenues.  Cash Reserve Targets – Trunk Sewer Capital Fund (Fund 413)  The Trunk Sewer Capital Fund represents funds from fees paid to offset the cost to buy into the City’s  sewer system and can be used for enlargement of sewer facilities and planning of area‐wide sewage  treatment and/or reclamation systems or facilities. With City Council approval, the money can be used for  construction of sewage collection or treatment facilities. The cash balance of the Trunk Sewer Capital  Fund as of June 30, 2020 was $64.8 million. Since the fund represents the cost to buy into the sewer  system, no cash reserve target exists. The 2014 Wastewater Master Plan included an analysis of the  capacity fee; no additional evaluation of this fee was included in this study.    2022/04/26 City Council Post Agenda Page 427 of 667        16 | Page    Section 4 – Financial Plan Development and Results 4.1 Revenue Sufficiency Analysis The scope of this study included the development of a sewer financial plan for a 10‐year planning period  with a focus on the current year plus a 5‐year planning period encompassing FY 2021‐22 through FY 2025‐ 26. While a longer‐range view (10 years) was taken to allow the  City to plan for the future, the assumptions  made as of the date of this report will change in the future and some of the changes in assumptions may  be significant.  The City’s sewer utility financials should be reviewed and updated regularly (at a minimum  on an annual basis) to make adjustments based on changes in the underlying assumptions on which the  financial plan was built.  4.1.1 General Methodology The City operates its sewer utility on a cash basis as is typical for a public utility. Under the cash basis  approach, revenues and expenses are recognized at the time physical cash is received or paid out.  Revenue requirements are determined for a specified period of time (in the case of the City an annual  fiscal year), by summing the total anticipated expenses to be paid out during the fiscal year. Where cash  flows  and  balances  are  insufficient,  the  revenue  requirements  analysis  recommends  the  needed  additional cash flows to meet funding goals.   The primary categories of expenses are as follows:   Operations and Maintenance;    Anticipated debt service;   Targeted reserves; and   Capital expenses.   It should be noted that one of the City’s primary expenses included in operations and maintenance is the  cost  to  treat  wastewater  at  the  City  of  San  Diego  Metropolitan Wastewater  facilities  (Metro).  This  accounts for approximately 65% of the City’s overall wastewater expenses.  The primary categories of revenue are as follows:   Sewer Service Charges  2022/04/26 City Council Post Agenda Page 428 of 667        17 | Page     Capacity Fees4   Licenses and Permits   Revenues From Use of Money and Property  In the development of the revenue projections, certain parameters are utilized including growth in  customers and flows.   The  City’s  budget  documents  are  used  as  the  baseline  for  revenues and expenses, which are then  projected over a planning horizon. Growth assumptions and prudent financial planning are fundamental  in ensuring adequate rate revenue to promote financial stability.  4.1.2 Data Items Key data items reviewed, discussed and incorporated into the Revenue Sufficiency Analysis were:    FY 2020‐21 beginning of year cash balances;    Interest earnings;   FY 2020‐21 adopted budgets;    Rate Revenue projections;   Regional Wastewater Disposal Costs/Metro Costs   Capital improvement needs based on City’s plans; and   General assumptions related to:     System growth;   Operations and Maintenance (O&M) Escalation Factors.  A discussion of the use of each of the above data items is presented below.   4.1.3 FY 2020-21 Beginning of Year Cash Balance To better understand the balance of available funds the City’s utility had on hand to start the forecast  period, a review of the cash balance as of the beginning of FY 2020‐21 was conducted and discussed with    4 The capacity fees are paid into the Trunk Sewer Capital Reserve Fund (Fund 413).  2022/04/26 City Council Post Agenda Page 429 of 667        18 | Page    City staff. A summary of the cash balances (cash on hand) assoc iated with the sewer utility enterprise fund  for the beginning of FY 2020‐21, as adjusted for use in this analysis, are summarized in Table 4‐1 below.   Table 4‐1  Beginning Cash Balance  Fiscal Year Beginning July 1, 2020  Description Sewer Service  Revenue  Fund (414)  Sewerage  Facility  Replacement  Fund (428)  Trunk Sewer:  Capital  Reserve Fund  (413)  Cash Balance  $48,147,276  $13,605,982  $64,836,569  The sewer utility enterprise fund for the end of FY 2019‐20 and therefore the beginning of FY 2020‐21, as  adjusted for use in this analysis, is $126,589,827, and is comprised of the cash balances of Fund 414 –  Sewer Service Revenue Fund, Fund 428 – Sewerage Facility Replacement (SFR) Fund and Fund 413 – Trunk  Sewer: Capital Reserve Fund. The cash balance of Fund 414 includes the targeted reserves (working capital  and  rate  stabilization,  emergency  and  vehicle  replacement)  identified  by  City  policy  and  discussed  previously. The cash balance in Fund 413 ($64,836,569) is intended to be used for capital projects to  enlarge sewer facilities and planning for area wide sewage or water reclamation projects and with City  Council approval can be used for planning, design, or construction of sewage collection or treatment or  water reclamation.  A further description of cash balances can be found in Appendix C.  4.1.4 Interest Earnings Through discussions with the City’s finance department a 1.0% interest earnings rate was identified as  being the appropriate rate to calculate interest earnings on the utility’s cash balance (Appendix E).  4.1.5 FY 2020-21 Adopted Budget Staff provided Willdan with the FY 2020‐21 Budget, including associated line‐item detail. The line‐item  budgeted expenses for FY 2020‐21 were used as the basis for the projection of future budgetary line‐items  for the remainder of the forecast period. Cost escalation factors were reviewed by staff and were used to  project line‐item costs beyond the FY 2020‐21 budget. Those factors were applied based on individual  line‐item cost classifications.  4.1.6 Rate Revenue Projections For financial planning purposes the financial plan is projected using FY 2020‐21 budgeted revenues as the  starting point. Charges for services were escalated through the study period by system growth and any  2022/04/26 City Council Post Agenda Page 430 of 667        19 | Page    anticipated rate revenue increases.  Other revenues were escalated based on system growth while  investment earnings fluctuate from year to year based on cash balances and an assumed interest earnings  rate of 1.0%.  4.1.7 Regional Wastewater Disposal Costs/Metro Costs The City of San Diego Public Utilities Department (PUD) in January 2019, authorized a five‐year financial  outlook as a guide to long range planning for their Water and Sewer Revenue Funds (Appendix F). Table  5.4  of  the  document  identifies  the  PUD’s  revenue  projections  from the Joint Power’s Authority  Participating Agencies. The City of Chula Vista’s share represents about 32% of the total cost contribution  from all the Participating Agencies. However, PUD’s agreement with Chula Vista obligates the City to pay  their percentage of actual costs for service and capital expens es. If projected expenditures associated with  the Participating Agencies increase or decrease, this will ultimately be offset by increased or decreased  revenue  from  the  Participating  Agencies.  Note  that  Chula  Vista’s  cost  contribution  represents  approximately 10% to 12% of the total Metro wastewater expenses.     A portion of the Metro costs are related to capital investment of the treatment system. As discussed  previously, the City’s Fund 413 with Council approval can be used for the construction of sewage collection  or treatment or water reclamation purposes. The financial plan developed for the City projects the need  for revenue increases in years 2 through 10 of 4.5% to 5.5% per year and assumes the use of $6 million of  Capital Reserve Fund balance in FY 2024‐25. It is recommended that rate revenue increases be further  evaluated for the next 5‐year period. Without a rate increase, and assuming the current recommendations  are implemented with the balance of Fund 413 drawing down over years 6 through 10 of the Financial  Plan. These additional drawdowns that would be necessary from Fund 413 would exceed the balance that  is projected for the fund; thus, the balance is not adequate to support the continued drawdown.    4.1.8 Capital Improvements Plan (CIP) The financial plans contained herein do not anticipate any debt funding of the City’s CIP. The CIP was  provided in current day dollars and has been escalated for future years using a 3‐year compound annual  average (2017‐2019) of the Engineering News Record Construction Cost Index (ENR CCI) at an inflationary  rate of 2.95% (Appendix H). The CIP in current day dollars for FY 2020‐21 through FY 2029‐30 totals  $30,370,000. The value of the CIP with the annual inflator applied for FY 2020‐21 through FY 2029‐30  totals $36,671,351. A summary table of the CIP (in inflated dollars) for the FY 2020‐21 through FY 2025‐ 2022/04/26 City Council Post Agenda Page 431 of 667        20 | Page    26 forecast period is presented below in Table 4‐2. The project specific CIP is presented in Schedules A‐6,  in Appendix A.  Generally  accepted  industry  standard  best  practices  suggest  that  a  utility  should  make  an  annual  investment in its infrastructure equivalent to annual depreciation, to ensure aging system components  are repaired or replaced on a routine basis, to help minimize breakdowns or failures of deteriorated and  old systems. The Sewer Fund depreciation as identified on page 46 of the FY 2019‐20 CAFR was $6.5  million.    The  prior  study 5  targeted  replacement  funding  of  aging  infrastructure  at  54%  of  annual  system  depreciation expense of $4.0 million by FY 2018‐19 (page 2). The projected Sewer Facilities Replacement  (SFR) Fee revenue in FY 2018‐19 was $3.9 million (page 9). This study recommends increasing the amount  of the collected revenue going into the SFR Fund from the fees to achieve the annual depreciation funding  amount over a 10‐year period, (based on the projections in this study, it is achieved in FY 2029‐30. With  the recommendation to increase the sewer services fee paid by the customer over time, the effect is a  compounding of the increased amount portion of those charges for service going into the SFR Fund (Fund  428).  It is possible to decrease the percentage of charges for service going into the Sewer Service Revenue  Fund because the Trunk Sewer Capital Reserve Fund (Fund 413) can be used to pay the capital expenses  incurred by Metro which are currently being paid from Fund 414.        4.1.9 General Assumptions In order to develop the financial and rate projections, certain assumptions were made with regard to  elements of the revenue sufficiency analysis. A summary of those assumptions is presented below.        5 City of Chula Vista Sewer Cost-of-Service Rate Study November 2013 Prepared by FCS Group Table 4‐2  Capital Improvement Plan (escalated dollars)  Fiscal Years Ending June 30 ($ thousands)  FY 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26  Sewer $2,650  $3,798 $3,404 $3,505 $3,608  $3,715  Note: Values are rounded to the nearest $1,000  2022/04/26 City Council Post Agenda Page 432 of 667        21 | Page    4.1.9.1. System Growth The City anticipates average annual growth of sewer system customers of approximately 1.20% per year  through  2024  based  on  Table  3  in  the  City’s  Chula  Vista  2019  Annual  Residential  Growth  Forecast  (Appendix D). The model assumes a direct correlation between customer growth and service charge  revenue growth. In other words, it is assumed that service charge revenues will also grow by 1.20% per  year. Since a portion of the revenue collected is based on the volume of potable water consumption,  water conservation initiatives could result in service charge revenue not increasing at the same rate as  customer growth or it may even decrease. The City should continue to monitor the impact of conservation  and adjust revenue projections accordingly.  While this study did project system growth, it did not re‐ evaluate customer classifications or characteristics (assumptions of volume and strength of flow) nor did  it project growth to specific customer categories, but rather applied general growth assumptions to all  customer classes.  4.1.9.2. O&M Escalation Factors Willdan worked with City staff (finance department) to identify reasonable cost escalation factors to be  applied to operations and maintenance expenses in recognition of increasing costs over time.  The City’s finance department identified personnel related cost escalation factors of 2% for salaries, 5%  for health insurance/flex benefits and an average of 4% for pension benefits. In examining the individual  components,  the  weighted  average  cost  escalation  factor  is  3%, based  on  historical  line‐item  costs  projected for the future using the respective escalation factors (the calculation can be found in Appendix  G).  The City projects supplies and services costs to increase by 8% in 2021, 7% in 2022 and by 2% per year  thereafter.   Utility costs (electricity as an example) are projected to increase at a rate of 5% per year.  Metro costs are projected to increase at 6% per year after the FY 2023‐24 cost estimate based on the  projected cost increase between FY 2022‐23 and FY 2023‐24.  All other O&M expenses are projected to increase at a rate of 2% per year.    4.1.9.3. Results of the Revenue Sufficiency Analysis After a review of the above‐mentioned data elements, the Revenue Sufficiency Analysis was completed  and is presented herein with recommendations incorporated to show the stabilization of sewer funds.   2022/04/26 City Council Post Agenda Page 433 of 667        22 | Page    The first step in the analysis was to develop the 5‐year financial plan for the City’s sewer funds under  current operations.  Table 4‐3 provides a summary of the current operations from a financial perspective.  Table 4‐3  Fiscal Years Ending June 30 ($ thousands)    Budget Projected  Line  20‐21 21‐22 22‐23 23‐24 24‐25 25‐26  SERVICE REVENUE FUND – FUND 414   Expenditures        1 Operations and Maintenance Expenses (OE)              2   Personnel Services  $4,860 $5,005  $5,156  $5,310   $5,470  $5,862  3   Capital (Vehicle Replacement & Other Capital)  1,730  1,764  1,799  1,835   1,872  1,910  4   Regional Wastewater Disposal/ Metro Costs  25,595  24,595  25,195  25,795   26,394  27,978  5   Other Expenses  6,740 6,876 7,013 7,154 7,297 7,443  6 Total Expenditures  38,925  38,240  39,163  40,094  41,033  43,193   Revenue Under Existing Rates              7    Charges for Service Revenue   $32,520  $32,942  $33,358  $33,699   $34,441  $35,199  8    Other Revenue  605 993 945 891 839 781  9 Total Revenue Under Existing Rates  33,125  33,935  34,304  34,590 35,280  35,979  10 Difference Rev. Over/(Under) Exp. (5,800)  (4,306)  (4,860)  (5,504)  (5,753)  (7,214)  11 Cash Balance at the Beginning of the Year (1)  $48,147  $42,347  $38,041  $33,182  $27,687 $21,925  12 Cash Balance After Rev. Less Exp.   $42,347  $38,041  $33,182  $27,687  $21,925 $14,711   Minimum Reserve Targets (2)         13    Working Capital (90 Days of O&E)  $9,598  $9,466  $9,694  $9,924  $10,157  $10,650  14    Rate Stab. (90 Days of O&E)  9,598  9,466  9,694  9,924  10,157  10,650  15    Emergency (5% of O&E)  1,946  1,919  1,966  2,012   2,060  2,160  16    Vehicle Replace, (2% of O&E)   779  768  786  805   824  864  17    EPA Reserve (3)  27,142 30,885 34,629 38,372 42,116 42,116  18 Total Minimum Reserve Targets $49,063  $52,504  $56,770  $61,038   $65,313  $66,440  SEWERAGE FACILITY REPLACEMENT FUND – FUND 428   Expenditures              19   Capital Improvement Program (Escalated) $2,650  $3,798  $3,404  $3,505  $3,608  $3,715  20    Expenses  153 156 159 162 166 166  21 Total Expenditures 2,803  3,954  3,563  3,667   3,774  3,881   Revenue Under Existing Rates         22    Sewer Facility Replacement Charge (4)  $1,405  $1,423  $1,441  $1,456   $1,488  $1,521  23    Other Revenues (Interest Earnings)  52 151 132 124 121 125  24 Total Revenue Under Existing Rates  1,457  1,574  1,573  1,580   1,609  1,645  25 Difference Rev. Over/(Under) Exp. (1,343)  (2,376)  (1,987)  (2,084)  (2,162)  (2,235)  26 Cash Balance at the Beginning of the Year (1) $13,606  $12,262  $9,886  $7,899   $5,815  $3,653  27 Cash Balance After Rev. Less Exp.  $12,262  $9,886  $7,899  $5,815   $3,653  $1,418  28 Annual Depreciation Funding Target (5)  $6,930 $7,135 $7,345 $7,563 $7,786 $8,016  (1) Cash balances are from GL032 SSRS Report; Munis Balance sheet report  (2) Ongoing annual target, but not an annual contribution.  (3) Goal of 20% of 11.69% of Point Loma WWTP Upgrade by 2024/25  (4) Based on prior study projection for FY 2018‐19 escalated in future years for system growth  (5) Annual depreciation target is based on FY 2019‐20 CAFR plus annual CIP expenditures  (6) Note: Values are rounded to nearest $1,000  2022/04/26 City Council Post Agenda Page 434 of 667        23 | Page      As noted in Table 4‐3, under the current scenario, expenditures in Fund 414 exceed revenues for FY 2020‐ 21 through FY 2024‐25 (see line 10), and as a result, the projected cash balance continues to decline, (see  line 12). In comparing the projected end of year cash balance in line 12 with the minimum target reserve  balance in line 18, the cash balance falls below minimum target reserves beginning in FY 2020‐21. In  examining the financials of Fund 428, the allocation of service charges for facility replacement (line 22)  does not meet the annual depreciation funding target (line 28) for any year of the study period.    4.1.9.4. Revenue Sufficiency Analysis After a review of the abovementioned data elements and the completion of the initial Revenue Sufficiency  Analysis, recommendations were developed to achieve a more stab ilized sewer fund. As indicated in Table  4‐4 there are rate revenue increases projected for the 5‐year period ending FY 2025‐26 based on the  current projections of revenues and expenses.  Revenue increases of 4.5% to 5.5% per year are anticipated  to be necessary throughout the period. However, as mentioned previously, the assumptions used in the  development of the financial plan herein will change in the future, so the City may want to conduct  another comprehensive study in 3 to 5 years to ensure that rate revenue is sufficient to meet ongoing  costs.  The City is recommended to review the financial results and cash balances at least annually and make  adjustments as needed to maintain the financial integrity and viability of the sewer utility. In addition to  the revenue increases are proposed through FY 2029‐30 a shift in the allocation of service charge revenue  between the sewer operating fund (Fund 414) and the sewerage facility replacement fund (Fund 428) is  proposed and discussed in greater detail in the balance of this report. The proposed financial plan  incorporating non‐rate increase recommendations is presented in Table 4‐5.     2022/04/26 City Council Post Agenda Page 435 of 667        24 | Page    Table 4‐4  Projected Rate Revenue Increases and Cash Balances  Fiscal Years Ending June 30  Fiscal Year  Sewer Rate  Revenue  Increases  Target  Balance (1)  SSR Fund 414  Actual Ending  Balance SSR  Fund 414  Target  Revenues  SFR Fund  428  Actual  Revenues  SFR Fund  428  Actual  Ending  Balance  TSC Fund  413  (In Thousands)  2021‐22  0.0%  $21,535  $37,661  $7,135  $1,801  $64,837  2022‐23  4.5%  22,055  33,503  7,345  2,306  64,837  2023‐24  5.0%  22,579  30,016  7,563  2,871  64,837  2024‐25  5.0%  23,108  33,721  7,786  3,536  58,837  2025‐26  5.5%  24,324  31,720  8,016  4,303  58,837  (1) It is assumed that in FY 2021‐22 the recommendations are implemented.  One recommendation is the  removal of the EPA Liability Reserve which is why the actual ending balance for Fund 414 appears to be  large compared to the target balance in Fund 414.     2022/04/26 City Council Post Agenda Page 436 of 667        25 | Page    Table 4‐5  Proposed Financial Plan FY 2019‐20 Through FY 2024‐25  Fiscal Years Ending June 30 ($ thousands)    Budget Projected  Line  20‐21 21‐22 22‐23 23‐24 24‐25 25‐26      Charges for Service Rate Increase (per customer) 0.0% 0.0% 4.5% 5.0% 5.0% 5.5%  SERVICE REVENUE FUND – FUND 414    Expenditures            Operations and Maintenance Expenses (OE)              1   Personnel Services  $4,860 $5,005  $5,156  $5,310   $5,470  $5,862  3   Capital (Vehicle Replacement & Other Capital)  1,730  1,764  1,799  1,835   1,872  1,910  3   Regional Wastewater Disposal/ Metro Costs (1)  25,595  24,595  25,195  25,795   26,394  27,978  4   Other Expenses  6,740 6,876 7,013 7,154 7,297 7,443  5 Total Expenditures  38,925  38,240  39,163  40,094  41,033  43,193   Projected Revenue              6    Charges for Service Revenue   $32,520  $32,564  $34,060  $35,704   $37,858  $40,238  7    Other Revenue  605 991 945 904 880 864  8 Total Revenue Under New Rates  33,125  33,555  35,004  36,608  38,738  41,192  9 Difference Rev. Over/(Under) Exp. (5,800)  (4,686)  (4,159)  (3,486)  (2,295)  (2,001)  10 Transfers in From Fund 413 (2)  0  0  0  0  6,000  0  11 Net Cashflow after Transfers In (5,800) (4,686) (4,159) (3,486) 3,705 (2,001)  12 Cash Balance at the Beginning of the Year (3)  $48,147  $42,347  $37,661  $33,503  $30,016 $33,721  13 Cash Balance After Rev. ‐ Exp. + Transfers $42,347  $37,661  $33,503  $30,016  $33,721 $31,720   Minimum Reserve Targets           14    Working Capital (90 Days of OE)  $9,598  $9,429  $9,657  $9,886 $10,118  $10,650  15    Rate Stab. (90 Days of OE)  9,598  9,429  9,657  9,886  10,118  10,650  16    Emergency (5% of OE)  1,946  1,912  1,958  2,005   2,052  2,160  17    Vehicle Replace, (2% of OE)   779 765 783 802  821 864  18 Total Minimum Reserve Targets $21,921  $21,535  $22,055  $22,579   $23,108  $24,324  SEWERAGE FACILITY REPLACEMENT FUND – FUND 428   Expenditures              19   Capital Improvement Program (Escalated) $3,887  $2,350  $3,798  $3,404  $3,505  $3,715  20    Expenses  150 153 156 159 162 125  21 Total Expenditures 4,037  2,803  3,954  3,563   3,667  4,428   Revenue Under New Rates           22    Sewer Facility Replacement Charge (4)  $1,405  $1,801  $2,306  $2,871   $3,536  $4,303  23    Other Revenues (Interest Earnings)  52 151 132 124 121 125  24 Total Revenue Under New Rates  1,457  1,953  2,438  2,995  3,657  4,428  25 Difference Rev. Over/(Under) Exp. (1,343)  (1,998)  (1,122)  (669)  (114) 547  26 Cash Balance at the Beginning of the Year (1) $13,606  $12,263  $10,265  $9,142   $8,473  $8,359  27 Cash Balance After Rev. Less Exp.  $12,263  $10,265  $9,142  $8,473   $8,359  $8,906  28 Annual Depreciation Funding Target  $6,930  $7,135  $7,345  $7,563 $7,786  $8,016  (1) Reflects “true up” costs from FY 2018‐19 and forms the basis for future year values  (2) Transfers from the Trunk Sewer Capital Reserve (Fund 413) are shown for simplicity.  It will be used to pay the capital portions of  Metro expenses directly.  (3) Cash balances are from GL032 SSRS Report; Munis Balance sheet report  (4) Allocation of Fund 428 increases annually to match the annual system depreciation by FY 2029‐30  (5) Annual depreciation target is based on FY 2019‐20 CAFR escalated by the annual CIP inflation rate of 2.95%  (6) Note: Values are rounded to nearest $1,000    2022/04/26 City Council Post Agenda Page 437 of 667        26 | Page    Table 4‐5 provides a summary of the projected annual revenue requirements for the sewer utility under  the proposed financial plan. As was the case in Table 4‐3, the proposed scenario results in a deficit  between anticipated revenues and anticipated expenses (see line 9) of an average of $3.7 million per year  between FY 2020‐21 and FY 2025‐26. Following the end of the prior rate study period in FY 2018‐19, no  rate increases were implemented, and budgeted expenditures outpaced revenues. As an example, for the  FY 2020‐21 budget, expenditures exceeded revenues by $5.8 million (line 9), with a reliance on the existing  cash balance to absorb the deficit between revenues and expenditures.  The annual deficit is less pronounced in the recommended plan (Table 4‐5 line 9) compared to the current  scenario (Table 4‐3 line 10) as a result of the recommended rate revenue increases.  The deficit is higher  than otherwise would be as a result of the recommended change in the allocation of service charge  revenue between the Sewer Services Revenue Fund (Fund 414) and the Sewerage Facility Replacement  Fund (Fund 428) as described above in Section 4.1.7.4.  Table 4‐6 illustrates the recommended gradual  shift  in  the  allocation  of  revenues  between  the  Sewer  Services Revenue  and  Sewerage  Facility  Replacement Funds (Funds 414 and 428).  The current (FY 2020‐21) and proposed (FY 2021‐22 through FY 2025‐26) fees are shown in Table 4‐7. The  proposed allocation of charges to the Service Revenue Fund (414) and Sewerage Facility Replacement  Fund (Fund 428) respectively are detailed below in Figure 1. The change in allocation of charges and in  turn revenue, is intended to move closer to meeting the goal of collecting annual revenue equal to annual  depreciation (current depreciation escalated by the CIP escalation factor of 2.95% per year) into Fund 428  and is discussed in the following section: Recommendations Based on the Revenue Sufficiency Analysis.  An examination of line 22 demonstrates a gradual increase in Sewer Facility Replacement Charge revenue  towards the target of matching annual depreciation over a ten‐year period.  The decrease in revenue into the Sewer Services Revenue Fund (Fund 414) means more money is needed  to meet the minimum reserve target (line 18) in FY 2023‐24 and FY 2024‐25.  Since Trunk Sewer Capital  Reserve Fund (Fund 413) can be used to fund regional capital projects with City Council approval, it is  recommended to be used to pay a portion of the capital expenses charged by Metro as shown in line 10.   Although it is shown as a transfer, the amount will be paid directly from Trunk Sewer Capital Reserve Fund  (Fund 413) without a formal transfer.  With these actions as described in the Recommendations section  the adjusted cash balance (line 13) meets the Minimum Reserve Targets (line 18).     2022/04/26 City Council Post Agenda Page 438 of 667        27 | Page      Table 4‐6  Fund Allocation for Sewer Service Charges  Fiscal Years Ending June 30      Budget Projected  19‐20 20‐21 21‐22 22‐23 23‐24 24‐25 25‐26  Sewer Service Revenue Fund 414 96% 96% 95% 94%  93%  91% 90% Sewerage Facility Replacement Fund 428 4%4%5%6% 7% 9%10% Total 100% 100% 100% 100%  100%  100% 100% The proposed rates for customers during the five‐year Study period are shown in Table 4‐7.  Note that  rates may vary if the wholesale wastewater treatment charges change from San Diego and the Metro  Pass Through is applied.  The fund distribution for the monthly fixed sewer charge in the top half of  Table 4‐7 is detailed further in Figure 4.1 below.  All of the revenue collected from the volumetric charge  goes into the Sewer Service Revenue Fund (Fund 414).     2022/04/26 City Council Post Agenda Page 439 of 667        28 | Page      Table 4‐7  Proposed Rates  Fiscal Years Ending June 30    Meter Size  $/Month  20‐21 21‐22 22‐23 23‐24 24‐25 25‐26  Monthly Fixed Service Charge  Single Family $14.53  $14.53  $15.18 $15.94 $16.74  $17.66 All Others      5/8‐inch 14.53  14.53  15.18 15.94 16.74  17.66 ¾‐inch 14.53  14.53  15.18 15.94 16.74  17.66 1‐inch 28.49  28.49  29.77 31.26 32.82  34.63 1 ½‐inch 51.77  51.77  54.10 56.80 59.64  62.93 2‐inch 79.68  79.68  83.27 87.43 91.80  96.85 3‐inch 154.15  154.15  161.08 169.14 177.59  187.36 4‐inch 237.91  237.91  248.62 261.05 274.10  289.17 6‐inch 470.61  470.61  491.79 516.38 542.20  572.02 8‐inch 936.01  936.01  978.13 1,027.04 1,078.39  1,137.70 Volume Charge $/HCF (1)  Residential      Single Family $4.26  $4.26  $4.45 $4.67 $4.91  $5.18 Multi‐Family 4.26  4.26  4.45 4.67 4.91  5.18 Mobile Homes 4.26  4.26  4.45 4.67 4.91  5.18 Non‐Residential      Commercial ‐ Low 4.26  4.26  4.45 4.67 4.91  5.18 Commercial – Med 6.02  6.02  6.29 6.61 6.94  7.32 Commercial – High 9.59  9.59  10.02 10.52 11.05  11.66 Special Users Varies  Varies  Varies Varies Varies  Varies (1) HCF – Hundred Cubic Feet  Note – Rate include the Sewer Service Charge and Sewer Facilities Replacement Fee.  The rates do not include the  Storm Drain Fee.  2022/04/26 City Council Post Agenda Page 440 of 667        29 | Page    While Table 4‐7 presents the proposed rates through FY 2025‐26, Table 4‐8 provides an illustration of the  impact to a typical residential monthly bill (assuming 7 HCF of water flow).  Table 4‐8  Residential Monthly Bill impacts  Fiscal Year Monthly Bill  Difference From  Prior Year  2021‐22  $41.37 n/a 2022‐23  43.22 1.85 2023‐24  45.36 2.15 2024‐25  47.67 2.32 2025‐26  50.29 2.62 As noted in Table 4‐8, the typical residential monthly bill over the 5‐year period FY 2021‐22 through FY  2025‐26 is projected to increase from $41.37 to $50.29 a total increase over the five‐year study period of  $8.93 per month or an average annual increase of $1.79 per month. As discussed previously, this study  recommends both increases in the City’s service charges to customers as well as a reallocation of the  portion of service charge allocated to Fund 414 and to Fund 28.       2022/04/26 City Council Post Agenda Page 441 of 667        30 | Page      Figure 4‐1 – Existing and Recommended Monthly Fixed Service Charge Sewer Facilities Sewer Facilities Sewer FacilitiesFixed Charge Sewer Service Replacement Fee Sewer Service Replacement Fee Sewer Service Replacement Feeper Month Charge (Fund 414) (SFR) (Fund 428) Total Charge (Fund 414) (SFR) (Fund 428) Total Charge (Fund 414) (SFR) (Fund 428) TotalSingle Family $9.43 $5.10 $14.53$8.94 $5.59 $14.53 $9.23 $5.95 $15.18All Others5/8‐inch $9.43 $5.10 $14.53 $8.94 $5.59 $14.53 $9.23 $5.95 $15.183/4‐inch 9.43 5.10 14.53 8.94 5.59 14.53 9.23 5.95 15.181‐inch 15.74 12.75 28.49 14.9213.57 28.49 18.10 11.68 29.771 1/2‐inch 26.27 25.50 51.77 24.89 26.88 51.77 32.88 21.21 54.102‐inch 38.88 40.80 79.68 36.8542.83 79.68 50.61 32.65 83.273‐inch 72.55 81.60 154.15 68.7585.39 154.15 97.91 63.17 161.084‐inch 110.41 127.50 237.91 104.63 133.28 237.91 151.12 97.49 248.626‐inch 215.61 255.00 470.61 204.33 266.28 470.61 298.93 192.85 491.798‐inch 426.00 510.01 936.01 402.77 533.24 936.01 594.56 383.57 978.13Sewer Facilities Sewer Facilities Sewer FacilitiesFixed Charge Sewer Service Replacement Fee Sewer Service Replacement Fee Sewer Service Replacement Feeper Month Charge (Fund 414) (SFR) (Fund 428) Total Charge (Fund 414) (SFR) (Fund 428) Total Charge (Fund 414) (SFR) (Fund 428) TotalSingle Family $9.58 $6.36 $15.94$9.94 $6.80 $16.74 $10.36 $7.30 $17.66All Others5/8‐inch $9.58 $6.37 $15.94 $9.94 $6.80 $16.74 $10.36 $7.30 $17.663/4‐inch 9.58 6.37 15.94 9.94 6.80 16.74 10.36 7.30 17.661‐inch 18.78 12.48 31.26 19.4813.34 32.82 20.31 14.32 34.631 1/2‐inch 34.12 22.68 56.80 35.40 24.24 59.64 36.90 26.02 62.932‐inch 52.52 34.91 87.43 54.4937.31 91.80 56.80 40.05 96.853‐inch 101.60 67.53 169.14 105.4172.18 177.59 109.87 77.49 187.364‐inch 156.81 104.23 261.05 162.70 111.40 274.10 169.58 119.59 289.176‐inch 310.19 206.18 516.38 321.83 220.36 542.20 335.45 236.57 572.028‐inch 616.96 410.08 1,027.04 640.11 438.28 1,078.39 667.19 470.51 1,137.70NOTE 1: All volume rate revenue is captured in Fund 414 Sewer Service ChargeNOTE 2: Storm fees are a separate charge and are not discussed in this report or included in the fee structureFixed Charges ‐ Existing to FY 2020‐21 Fixed Charges ‐ FY 2021‐22 Fixed Charges ‐ FY 2022‐23Fixed Charges ‐ FY 2023‐24 Fixed Charges ‐ FY 2024‐25 Fixed Charges ‐ FY 2025‐262022/04/26 City Council Post Agenda Page 442 of 667        31 | Page    4.1.9.5. Proposition 218 Compliance In conducting the study, the City’s current sewer rate structure developed through the cost‐of‐service  analysis in the prior report6 appear reasonable and meet the requirements of Proposition 218. They are  based upon relative strengths and flows from specific customer categories in the City of Chula Vista, and  the proportional costs of serving those customers based upon these factors.  The current study relied  upon  the  assumptions  and  data  of  volume  of  discharge  (flow)  and  strength  characteristics  as  was  identified in the prior report.  This includes maintaining the existing customer classes:   Single Family   Multifamily   Commercial – Low   Commercial – Medium   Commercial ‐ High  It should, however, be noted that the City’s Low‐Income Policy with respect to rates was not evaluated as  part of this study or this report.      6 City of Chula Vista Sewer Cost-of-Service Rate Study November 2013 Prepared by FCS Group. The report is available at: https://www.chulavistaca.gov/departments/public-works/services/sewer/sewer-rate 2022/04/26 City Council Post Agenda Page 443 of 667        32 | Page    Section 5 – Conclusions and Recommendations 5.1 Conclusions The study was comprised of a longer‐term 10‐year financial analysis but focused on the shorter‐term 5‐ year period.  Based on current assumptions rate revenue increases are projected to be necessary in fiscal  year 2021‐22.  While no new rate revenue increases are needed in the first year, the analysis described in  this report indicates that the City’s existing charges for service revenue alone will not be sufficient to meet  the ongoing operations and maintenance expenses on an annual basis.  Rate increases are projected for  years 2 through 10 of the study period, in addition to the use of Trunk Sewer: Capital Reserve Fund (413)  funds to pay for some of the regional capital costs billed by Metro.   A revised allocation of service charge  revenues between the Sewer Service Revenue Fund and the Sewerage Facility Replace Fund (428), will  help to provide the opportunity for rate increases to be phased in over time in smaller increments while  still achieving the City’s financial policies rather than the need for more immediate larger increases.  5.2 Recommendations The following recommendations were incorporated into the proposed financial plan (Table 4‐5) in order  to meet the outlined goals of Funds 414 and 428.  Elimination of the EPA Reserve  As previously discussed in the Financial Management Goals of the City section, it is recommended that  the City eliminate the current EPA reserve. The assumptions that were made at the time the reserve was  established (primarily the City of San Diego’s cash funding of treatment upgrades) have changed. The City  of San Diego is projected to finance its capital upgrade costs through borrowing and has factored the  financing costs into the Metro Cost projections for the City of Chula Vista and other participating agencies.  The City’s share of upgrade costs is therefore projected to be paid through annual charges assessed by  the City of San Diego eliminating the need for a large cash reserve to pay a one‐time lump sum fee for the  City’s proportionate share of the upgrades. If the EPA reserve were to remain in place the total minimum  reserve target would be significantly higher than is being recommended. The higher reserve would place  additional pressure on future rate increases to achieve the higher target reserve.     2022/04/26 City Council Post Agenda Page 444 of 667        33 | Page    Allocation of Service Charge Revenue  As identified in the Financial Management Goals of the City section, it is recommended that the City’s  Sewer Facility Replacement Charge revenue on an annual basis be at a minimum, equivalent to annual  depreciation of system assets. The allocation of service charge revenue to Fund 428 is recommended to  increase incrementally over time in order to match annual system depreciation by FY 2029‐30 (the current  plan achieves the goal in FY 2029‐30). An adequately funded repair and replacement program helps to  ensure a well‐functioning and more reliable system. An annual replacement and rehabilitation program  also helps to minimize costly unanticipated major repairs. The recommended allocation was shown  previously in Table 4‐6.     Stabilize Revenues and Expenses  In both Tables 4‐3 and 4‐5, the expenditures of Fund 414 exceed revenues on an annual basis. As noted  in Table 4‐5, the difference between revenues and expenditures increases as a result of the updating the  allocation of service charge revenue to Fund 428 to meet industry standards. While expenses exceed  revenues initially, by FY 2029‐30, with the proposed recommendations, revenues exceed expenditures  while meeting the minimum reserve policies and goals.  Revenue increases are currently projected in 9  years of the financial plan, based on current assumptions. As assumptions become clearer (for example  the direction on Metro funding) a more comprehensive update should be undertaken in the next 3 to 5  years. The ongoing draw down of cash balance requires the use of additional funds in FY 2024‐25. The  Trunk Sewer Capital Fund (Fund 413) had a balance of $64.8 million as of June 30, 2020, which can be  used for sewer treatment or collection capital costs with City Council approval. A portion of this cash  balance could be used to pay Metro capital costs. If City Council approves the use of Fund 413 to pay for  the portion of Metro capital costs, the draw down from Fund 414 would be less, allowing the stated goals  to meet the reserve targets in later years.   Metro Cost Pass Through  The Metro Costs projections used in the development of the financial plan were provided to the City by  the City of San Diego. The City of San Diego Public Utilities D epartment which operates the Metro facilities,  provided projected contributions for the Participating Agencies in January 2019, and an update of the  projections at the May 2020 Metro Technical Advisory Committee Meeting. The increases equate to  approximately 2.5% per year through FY 2024‐25 and are reflected in the financial plan.    2022/04/26 City Council Post Agenda Page 445 of 667        34 | Page    While the financial plan incorporates the best available Metro Cost data as provided by the City of San  Diego there is the potential that the actual costs assessed to the City may change in the future. This could  be the result of a change in the City of San Diego’s operating costs or a result of a change in flows and  strength transmitted by the City to Metro for treatment. Every year the City receives a “true up” of Metro  costs based on the projected flows and Metro Costs compared to the actual flows and strength and costs  incurred by the City. These costs could be materially different from what was projected in the financial  plan, which would have an adverse effect on cashflows and reserves. While the best available information  has  been  incorporated,  if  actual  costs  increase  or  decrease  from  projections,  we  recommend  the  implementation of a pass‐through adjustment for the costs to City customers in order to maintain the  financial  integrity  of  the  utility.  The  fixed  and  volume  rates should  be  increased  appropriately,  commensurate with the increase or decrease in Metro Costs.  As noted previously, a portion of the fixed  charge provides funding for the Sewerage Facility Replacement (Fund 428), and this portion of the charge  would not change based on Metro costs.  California Government Code Section 53756 allows agencies to  authorize automatic adjustments that pass‐through increases or decreases in wholesale wastewater  treatment charges when the wholesaler is a public agency (i.e. the City of San Diego).  The City of Chula  Vista, as the agency implementing the pass through, must initially go through the Proposition 218 process  and authorize the pass through which can remain in effect for a maximum of five years.  Notice of any  adjustment within the approved period shall be given not less than 30 days before the effective date of  the adjustment and follow subdivision (a) of Section 53755 of the California Government Code.  Financial Reviews  It is recommended that the City update the revenue sufficiency analysis portion of this study each year to  ensure  projected  revenue  continues  to  be  sufficient  to  fund  projected  expenses  going  forward  as  assumptions made during this analysis may change and have a material impact upon the analysis.   2022/04/26 City Council Post Agenda Page 446 of 667 APPENDIX A  Financial Plan  2022/04/26 City Council Post Agenda Page 447 of 667 Table 1Summary of Annual Cash Balance and Target Reserve PolicyLine NoDescription2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Sewer Service Revenue (Fund 414)1 Balance at the Beginning of the Fiscal Year$48,147,276 $42,347,015 $37,661,464 $33,502,711 $30,016,240 $33,721,373 $31,720,461 $30,291,340 $29,494,572 $29,394,5842 Annual Revenues33,125,000 33,554,797 35,004,444 36,607,538 38,738,118 41,191,977 43,805,391 46,589,104 49,553,261 52,285,5983 Annual Expenses38,925,261 38,240,348 39,163,197 40,094,008 41,032,986 43,192,890 45,234,511 47,385,872 49,653,249 52,043,287 4 Transfers In- - - - 6,000,000 - - - - - 5 Policy Target Reserve21,920,787 21,535,078 22,054,781 22,578,968 23,107,754 24,324,105 25,473,846 26,685,387 27,962,261 29,308,213 6 Policy Reserve Maximum27,206,358 26,727,646 27,372,661 28,023,240 28,679,527 30,189,167 31,616,135 33,119,804 34,704,560 36,375,050 Sewerage Facilities Replacement Fund (Fund 428)7 Balance at the Beginning of the Fiscal Year$13,605,982 $12,262,708 $10,264,651 $9,142,391 $8,472,914 $8,359,024 $8,905,985 $10,216,119 $12,403,430 $15,594,8008 Annual Revenues1,456,726 1,952,624 2,438,105 2,994,598 3,656,931 4,427,650 5,303,906 6,297,478 7,421,336 9,269,9229 Annual Expenses2,800,000 3,950,682 3,560,365 3,664,075 3,770,820 3,880,689 3,993,772 4,110,166 4,229,967 4,174,010 Trunk Sewer Capital Reserve Fund (Fund 413)10 Balance at the Beginning of the Fiscal Year$64,836,569 $64,836,569 $64,836,569 $64,836,569 $64,836,569 $58,836,569 $58,836,569 $58,836,569 $58,836,569 $58,836,569City of Chula Vista, CAFinancial Plan SummaryA-12022/04/26 City Council Post Agenda Page 448 of 667 Table 2Projected Operating Results - Sewer Service Revenue Fund (Fund 414)LineBudgetProjectedNo.Description2021202220232024202520262027202820292030Sources of Funds1Beginning-of-Year Cash (1)$48,147,276 $42,347,015 $37,661,464 $33,502,711 $30,016,240 $33,721,373 $31,720,461 $30,291,340 $29,494,572 $29,394,584Sewer Utility Related Revenues (Table 3)2 Charges for Services Revenue - Fund 414$32,520,000$32,563,766$34,059,562$35,703,782$37,858,393$40,328,352$42,953,089 $45,741,707$48,703,784$51,271,2323 Revenues Not From Charges for Services605,000 991,031 944,882 903,757 879,725 863,626 852,302 847,397 849,476 868,165 4 Total Sewer Utility Related Revenues$33,125,000 $33,554,797 $35,004,444 $36,607,538 $38,738,118 $41,191,977 $43,805,391 $46,589,104 $49,553,261 52,139,397$ 5 Total Sewer Revenues$33,125,000 $33,554,797 $35,004,444 $36,607,538 $38,738,118 $41,191,977 $43,805,391 $46,589,104 $49,553,261 52,285,598$ Operating Expenses (Table 4)6 Administration$38,925,261 $38,240,348$39,163,197$40,094,008$41,032,986$43,192,890$45,234,511 $47,385,872$49,653,249 52,043,287$ 7 Total Operating Expenses (OE)$38,925,261 $38,240,348 $39,163,197 $40,094,008 $41,032,986 $43,192,890 $45,234,511 $47,385,872 $49,653,249 52,043,287$ 8 Net Result of Operations($5,800,261) ($4,685,551) ($4,158,753) ($3,486,470) ($2,294,867) ($2,000,912) ($1,429,120) ($796,768) ($99,988)$242,311Non-Operating Expenses9 Existing Debt Service000000000010 Other Miscellaneous000000000011 Total Non-Operating Expenses$0$0$0$0$0$0$0$0$0-$ 12 Net Available After Operations($5,800,261) ($4,685,551) ($4,158,753) ($3,486,470) ($2,294,867) ($2,000,912) ($1,429,120) ($796,768) ($99,988)$242,311Other Cash Inflows/(Uses of Funds)13 New Debt Service$0 $0 $0 $0 $0 $0 $0 $0 $0 $014 Transfers In From Fund 413 - Trunk Sewer: Capital Reserve Fund (2)00006,000,0000000015 Total Other Cash Inflows/(Uses of Funds)$0 $0 $0 $0 $6,000,000 $0 $0 $0 $0 $016 Net Available After Other Uses($5,800,261) ($4,685,551) ($4,158,753) ($3,486,470)$3,705,133($2,000,912) ($1,429,120) ($796,768) ($99,988)$242,31117End-of-Year Cash$42,347,015$37,661,464$33,502,711 $30,016,240$33,721,373$31,720,461 $30,291,340$29,494,572$29,394,584$29,636,89518Target Cash - Working Capital and Rate Stabilization (180 Days of OE)19,196,019 18,858,25419,313,35819,772,38820,235,44521,300,60322,307,43023,368,37524,486,53425,665,18319Target Cash - Emergency Reserve (5% of OE)1,946,2631,912,0171,958,1602,004,7002,051,649 2,159,6442,261,7262,369,2942,482,6622,602,16420Target Cash - Vehicle Replacement Reserve (2% of OE)778,505 764,807783,264801,880820,660863,858904,690947,717993,065 1,040,86621Target Cash - Reserve21,920,78721,535,07822,054,781 22,578,96823,107,75424,324,10525,473,84626,685,38727,962,261 29,308,213Max Cash Reserve - 125% of Working Capital, Rate Stabilization and Emergency Reserves + Vehicle Replacement$27,206,358 $26,727,646 $27,372,661 $28,023,240 $28,679,527 $30,189,167 $31,616,135 $33,119,804 $34,704,560 $36,375,050City of Chula Vista, CAFinancial Plan SummaryA-22022/04/26 City Council Post Agenda Page 449 of 667 Table 3 Revenues - Sewer Service Revenue Fund (Fund 414)LineBudget (1)Future Year EscalationProjected (2021 Dollars Escalated for Growth & Revenue Increases)No.Description2021Factors202220232024202520262027202820292030SEWER OPERATING FUND REVENUESCharges for Services1 Charges for Services Revenue - Fund 414$32,520,000 (2)$32,563,766 $34,059,562 $35,703,782 $37,858,393 $40,328,352 $42,953,089 $45,741,707 $48,703,784 $51,271,232Revenue Other Than Charges for Services2 Licenses and Permits40,000 2.00%40,519 41,031 41,451 42,363 43,295 44,247 45,221 46,215 47,232 3 Use of Money & Property (2)- (3)378,184 324,283 276,814 238,990 208,794 183,064 163,436 150,468 153,779 4 Reimb CIP Projects- 2.00%- - - - - - - - - 5 Transfers In - Other150,000 2.00%151,945 153,868 155,440 158,860 162,355 165,927 169,577 173,308 177,121 6Other415,000 (2)420,383 425,700 430,052 439,513 449,182 459,064 469,163 479,485 490,034 - - - - - - - - - - Transfers In7 Transfers In From Fund 413 - Trunk Sewer: Capital Reserve Fund (4)- - - - 6,000,000 - - - - - 8 Total Sewer Operating Fund Revenues 33,125,000$ $33,554,797 $35,004,444 $36,607,538 $44,738,118 $41,191,977 $43,805,391 $46,589,104 $49,553,261 52,285,598$ (1) FY 2020-21 values are from Munis Report; Budget to Actuals (GL003)(2) Revenues Other Than Charges for Services are assumed to increase at the rate of growth after FY 2019-20. Growth projections are included in Table 7(3) Includes Investment Earnings City Pool and Change in Fair Value of Investments. Interest is calculated by applying a 1.0% interest rate to the average beginning and ending (beginning fund balance plus revenues excluding interest less use of funds) annual fund balance(4) A transfer from the Trunk Sewer Capital Reserve Fund (Fund 413) is shown for simplicity. It will be used to pay the capital portion of the Metro expenses directly.City of Chula Vista, CAFinancial Plan SummaryA-32022/04/26 City Council Post Agenda Page 450 of 667 Table 4 Expenses - Sewer Service Revenue Fund (Fund 414)LineBudget (1)Future Year Escalation (2)Projected (2019 Dollars Escalated for Inflation)No. Description2021 Factors 2022 2023 2024 2025 2026 2027 2028 2029 2030OPERATING EXPENSESAdministration1Personnel Services (2)$4,859,6673.00%$5,005,457 $5,155,621 $5,310,289 $5,469,598 $5,633,686 $6,038,316 $6,219,465 $6,406,049 $6,598,2312 Additional Salaries 03.00%0000228,75700003 Supplies and Services2,986,179 8.00%3,045,903 3,106,821 3,168,957 3,232,336 3,296,983 3,362,923 3,430,181 3,498,785 3,568,760 4Regional Wastewater Disposal Metro Costs (3)23,994,998 6.00%24,594,873 25,194,748 25,794,623 26,394,498 27,978,168 29,656,858 31,436,269 33,322,446 35,321,792 5 Reconciliation of Regional Wastewater Disposal Metro Costs1,600,0002.38%- - - - - - - - - 6 Other Expenses75,000 2.00%76,500 78,030 79,591 81,182 82,806 84,462 86,151 87,874 89,632 7 Capital (Vehicle Replacement & Other Capital)1,729,547 2.00%1,764,138 1,799,421 1,835,409 1,872,117 1,909,560 1,947,751 1,986,706 2,026,440 2,066,969 8 Utilities331 5.00%348 365 383 402 422 444 466 489 513 9 Internal Services Charges316,705 2.00%323,039 329,500 336,090 342,812 349,668 356,661 363,794 371,070 378,492 10 Transfers Out3,298,234 2.00%3,364,199 3,431,483 3,500,112 3,570,115 3,641,517 3,714,347 3,788,634 3,864,407 3,941,695 11 Project Expenditures (Non-CIP and CIP)64,600 2.00%65,892 67,210 68,554 69,925 71,324 72,750 74,205 75,689 77,203 12 TOTAL OPERATING EXPENSES$38,925,261$38,240,348 $39,163,197 $40,094,008 $41,032,986 $43,192,890 $45,234,511 $47,385,872 $49,653,249 $52,043,287(1) FY 2020-21 Budget from Munis Report (GL001 FY 2020)(2) Escalation factor for personnel services reflects weighted average escalation factors for salaries, health benefits and pensions as provided by the City's finance department and calculated below(3) Projections for FY 2021 through FY 2025 are based on the City of San Diego low cost projections as summarized in the PUD Wastewater Rate Model May 2020, and can be found in the Metro Technical Advisory Committee meeting minutes for May 2020. Projections beyond FY 2025 assume an annual 6% increase.City of Chula Vista, CAFinancial Plan SummaryA-42022/04/26 City Council Post Agenda Page 451 of 667 Table 5 Revenues - Sewerage Facility Replacement Fund (Fund 428)LineBudget (1)Future Year EscalationProjected (2021 Dollars Escalated for Growth & Revenue Increases)No.Description2021Factors202220232024202520262027202820292030Charges for Services1 Charges for Services Revenue - Fund 428$1,405,000 (2)$1,801,238 $2,306,126 $2,870,501 $3,535,669 $4,303,140 $5,169,032 $6,144,045 $7,239,952 $9,047,8642 Use of Money & Property51,726 (3)151,387 131,979 124,097 121,262 124,509 134,874 153,432 181,384 222,057 3 Other Revenue- (4)- - - - - - - - - 4 Total Sewerage Replacement Fee Revenue1,456,726 1,952,624 2,438,105 2,994,598 3,656,931 4,427,650 5,303,906 6,297,478 7,421,336 9,269,922 (1) FY 2020-21 values are from Munis Report; Budget to Actuals (GL003)(2) Represents SRF component of Charges for Services - 2021 based on allocation to meet a $19 mill fund balance in FY 2025. Allocaton for FY 2021-2 and beyond were adjusted to match annual system depreciation by FY 2028-29(3) Includes Investment Earnings City Pool and Change in Fair Value of Investments. Interest is calculated by applying a 1.0% interest rate to the average beginning and ending (beginning fund balance plus revenues excluding interest less use of funds) annual fund balance(4) Revenues Other Than Charges for Services are assumed to increase at the rate of growth after FY 2019-20. Growth projections are included in Table 7City of Chula Vista, CAFinancial Plan SummaryA-52022/04/26 City Council Post Agenda Page 452 of 667 Table 6Capital Improvement PlanLineNo. Description 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030Wastewater Identified Projects1 J Street Junction Box Sewer Study $0 $0 $0 $0 $0 $0 $0 $0 $0 $02 Parkside Drive Lift Station Upgrades- - - - - - - - - - 3 Sewer Pipe Rehabilitation Program- 1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 1,550,000 4 Manhole Inspection Program- 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 5 Sewer Manhole Rehabilitation Program- 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 500,000 6 Sewer Access Road Rehabilitation Program - 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 350,000 7 Police Department Sewer Pump Station Relocation - 450,000 - - - - - - - - 8 City Hall Emergency Storage- - - - - - - - - - 9 Salt Creek Community Pump Station- - - - - - - - - - 10 Salt Creek interceptor Condition Assessment (Portions)- - - - - - - - - - 11 Poggi Canyon Sewer Improvements on Olympic Parkway at Concord Way- - - - - - - - - - 12 Sewer Pipeline Rehab- - - - - - - - - - 13 Agua Vista Pump Station Upgrades- - - - - - - - - - 14 J Street Sewer Junction Structure Improvement- - - - - - - - - - 15 Major Pump Maintenance or Upgrade (est. 1 PS every 5 years), based on Parkside ($1.5M), Yrs. 5-10- 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 400,000 16 CIP Advanced Planning- 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 17 Identified CIP2,650,000 - - - - - - - - - 17 Total Capital Project Costs$2,650,000 $3,480,000 $3,030,000 $3,030,000 $3,030,000 $3,030,000 $3,030,000 $3,030,000 $3,030,000 $3,030,00018 Esclation Factor0.00% 0.00% 0.00% 2.95% 2.95% 2.95% 2.95% 2.95% 2.95% 2.95%19 Total Escalated Capital Project Costs$2,650,000 $3,797,682 $3,404,305 $3,504,894 $3,608,455 $3,715,076 $3,824,848 $3,937,863 $4,054,218 $4,174,010City of Chula Vista, CAFinancial Plan SummaryA-62022/04/26 City Council Post Agenda Page 453 of 667 Table 7Projected Growth Rate2021202220232024202520262027202820292030Population281,344 284,993 288,598 291,548 297,962 304,517 311,217 318,063 325,061 332,212Increase in Population4,2453,6493,6052,9506,4146,5556,6996,8476,9977,151System Growth for Charges for Services Revenues (1) (2)1.53%1.30%1.26%1.02%2.20%2.20%2.20%2.20%2.20%2.20%(1) System growth is linked to estimated population growth and is assumed to directly translate to revenue growth. In other words a 1% increase in population is assumed to translate to a 1% increase in charges for services revenue. This may change as rates are revised and refined.(2) Growth rates are from the Annual Residential Forecast 2020 - 2024 (Sept 2019)City of Chula Vista, CAFinancial Plan SummaryA-72022/04/26 City Council Post Agenda Page 454 of 667 APPENDIX B  Reserve Fund Policies  2022/04/26 City Council Post Agenda Page 455 of 667 SUBJECT: Se ver Sen ice Re enue Fund Reserve POLICI' EFFECTIVE Polic}. NUAZBER DATE PAGE 220-04 12/17/li 1 of 4 ADOPTED Bl': 2013-26 DATED: December 17, 2013 PURPOSE: Public entities accumulate and maintain adequate reserves levels to help ensure both financial stabilih and the abilin to provide core services durins difficult times. Adequately funded reserves allow for: 1) funding infrastructure replacement, 2) economic uncertainties and other financial hazdships; 3) future debt and capital obligations, 4) cash flow requirements, 6) improved credit ratines, ) unfunded mandates including costl} regulaton requirements. BACKGROUI'D: The Cih's Sewer Enterprise Funds account for specific services funded directly bv fees and chazees users of the City's sewer s}stem. These funds are intended to be self-supporting as well as restricted and cannot be used for other City services. They account for revenues and expenses related to the City`s seHer proerams; including maintenance and e:pansion of the Cih's conve}ance svstem and payment of San Diego Metro vastewater treatment costs. The Sewer Service Revenue Enterprise Fund accounts for revenue collected from monthh seti er service chaz es for all properties that are connected to the Cit}'s sewer system. These funds can only be used for se er related operations and maintenance. The primary use of these funds is payment for the City's annual San Diego Metropolitan Sewer Capacity and to fund maintenance and operational costs associated ith the sewer collection system. The Govemment Finance Officers Association ( GFOA), an intemational or anization that promotes the professional financial manaeement of Qovemments for the public interest, recommends maintainina minimum reserve balances. A govemment's particular situation ma} require levels of reserves sienificantiv in ezcess of their recommended minimum levels. Cities ti ith hieher resen e levels are better positioned to protect public services during economic doumturns. GFOA recommends that in establishing a policy govemine the level of reserves or vorkine capital in enterprise funds; a eovemment should consider a variep of factors, including but not limited to the followin: The predictability of its revenues and the volatilin of its expendimres (i.e. hieher levels of reser es may be needed if sienificant revenue sources are subject to unpredictable fluctuations or if operating expenditures are highh olatile.) Liquidin (i.e. a disparity bet;een when financial resources actualh become available to mal:e paytnents and the average maturih of related liabilities may require that a higher level of resources be maintained). Designations (i.e. go emments ma w ish to maintain higher levels oF resen es to compensate for anv portion of available fund balance alreadv desienated for a specific purpose). Reserve Fund Policies B-1 2022/04/26 City Council Post Agenda Page 456 of 667 5UBJECT: Sewcr Sen ice Revenue Fund Resen e pOLICY EFFECTIVE Policy NUMBER DATE PAGE 220-04 12/17/ 13 2 of 4 ADOPTED BY: 2013-265 DATED: December 17, 2013 POLICY: This Policy establishes four distinct reserves within the Sewer Service Revenue Fund: 1. Working Capital and Rate Stabilization Resen e 2. Lmergency Reserve 3. Vehicle Replacement Reserve 4. U.S. Environmental Protection Agency (USEPA) Permit Renewal Liability Reserve Workine Capital and Rate Stabilization Reserve orking Capital and Rate Stabilization reserves in the Sewer Service Revenue Fund will be restricted to maintaining and operating the astewater collection system and paying treatment charges to City of San Dieeo Metropolitan Wastewater ("Metro"). The reserve will be funded from revenues accumulated in the Se ver Service Revenue Fund. It is intended to accommodate any natural variability in revenues and e penditures, includin potential disruptions of cash flo vs due to varied billing methodology, short tenn fluctuations and annual cycles. The reserve will also assist in addressing shortfalls which may occur due to unanticipated cost increases in labor or energy and other consumption based goods and services, such as wastewater treatment sen ices provided by Metro. The reserves represent unrestricted resources available for appropriation by the City Council addressing unforeseen needs for sewer services. The VVorking Capital and Rate Stabilization Reserves will assist the City in addressing the following items: Rate Stabilization — the reserves will allow the Ciry the flexibility to "smooth" rates and phase increases in over multiple years, which is prudent given the potential variability in the Citys payments to Metro. Revenue Collection Fluctuations - the resen es will be used to protect the City from natural fluctuations in revenue and e penditure cycles which is prudent given that the City bills customers at different points in time but incurs expenses continuously throughout the year. Rates of delinquencies—delays in collection of outstanding revenues. Payroll cycles — the timing of a fixed cash requirement for payroll, as related to the timing of re enue cycles. Unanticipated espenses - espenses whose characteristics make accurate estimation difficult, such as increases in wastewater treatment services provided by the City of San Diego, energy costs; labor benefits and other consumption based goods and services. The City shall maintain a Se er Revenue reserve equivalent to 90 days of operating expenditures and a Rate Stabilization reserve equivalent to 90 days of operating expenditures for a minimum combined rotal of 180 days and a masimum reserve balance of 125% of the minimum balance. Reserve Fund Policies B-2 2022/04/26 City Council Post Agenda Page 457 of 667 SUBJECT: Se rer Sen•ice Re enue Fund Reserve pOLIC1' EFFECTI E Polic} NUNIBER DATE PAGE 22p-0 12/17/13 3 of 4 ADOPTED BY: 2013-26 DATED: December 17, 2013 If funds are appropriated from the Se=er Re enue Workine Capital and Rate Stabilization Resen es, the funds should be replenished in the budset process during subsequent fiscal }eazs to the minimum reserve balance. If the maanitude of the event caused the Sewer Revenue Working Capital and a Stabilization Resen es to be less than 30 davs of the operating and maintenance budget, the Finance Director shall provide the Cih Council with a plan to incrementall replenish the reserves to the 180 da-s minimum resen e balance. Emereenc Reserve The Se er Sen ice Re enue Fund Emergency Reser e is necessan to secure funding for insurance deductibles, unforeseen liabilities/litieation and settlement costs related to the Cih`s asteH ater s}stem. The Cin shall maintain a minimum SeH er Sen ice Re enue Fund Emeraencv Reserve tareet level of of the operating and maintenance budset and a maximum reserve balance of 12% of the minimum balance. If funds are appropriated from the Se er Revenue Emergency Resen es due to unanticipated needs; the Finance Director shall pro ide the Cin Council + ith a plan to incrementally replenish the reserves to the minimum reserve balance. Vehicle Renlacement Reserve The Se ver Service Revenue Fund Vehicle Replacement Resenes represents monies set aside to fund the replacement of aeine ehicles. The allocation is funded from revenues accumulated in the Sewer Sen ice Revenue Fund. The City shall maintain a minimum Sewer Sen ice Fund Vehicle Replacement Reserve target of 2% of the operatine and maintenance budget This reserve +-ill ensure that ehicles utilized for seH er operations aze replaced as scheduled and available to deplo} as needed. To achieve a minimum impact to cost of services and rates, funds ill be included in the proposed budeet on an annual basis as identified in the Citv's Vehicle Replacement schedule. The cost of replacing all the vehides ti ill be a eraeed over the lifespan of the esistin2 fleet. This will eenerate a more normalized cost of sen ices by e enl} distributine re enue requirements on a year-to-veaz basis offsetting temporarv cash flo v deficiencies and a oid significant increases in rates charges to customers in the years the replacement cost aze incurred. USEPA Permit Renewal Liabiliri Reseme The Se er Service Re enue Fund USEPA Permit Rene i al Liabiliri Resen e will account for monies set aside to fund the Cin of San Diego n9etropolitan Waste ater costs related to the potential up rade of the Point Loma Waste+ater Treatment Plant (PLWTP) or other alternative for secondan treatment. The resen=e rill be funded from re enues accumulated in the Se er Sen ice Re enue Fund. Reserve Fund Policies B-3 2022/04/26 City Council Post Agenda Page 458 of 667 SUBJECT: Sewer Sen ice Re enue Fund Resen e pOLICY EFFECTIVE Policv NIJMBER DATE PAGE 220-04 12/17/13 4 of4 ADOPTED BY: 2013- 265 DATED: December 17, 2013 Metro's USEPA waiver expires in FY 2015 and may not be renewed. If denied, Mevo would need to develop and implement improvements to achieve secondary treatment level at PLWTP. Current cost estimates to establish full secondary treatment at PLWTP as well as possible altematives are all significant (>$1 Billion). As a contributing member to the regional treatment plant, the City of Chula Vista's share in the cost of any upgrade would be approximately 10 percent for the capital improvements and any increase in the overall treatment cost. It is eapected that Metro will have 10 vears after the eapiration of the USEPA waiver to institute secondary treatment or altemative. This reserve establishes a dedicated fund that will offset a poRion of the City's share of any obligation related to the PLWTP USEPA waiver. By actively planning for the PLWTP upgrade or alternative. the City will be in a stronger financial position to afford such costs while mitigating impacts to ratepayers. The Permit Renewal Liabilit} Reserve will be funded through annual contributions with the intent to reach a target balance of 20% of Chula Vista's share of the upgrade cost by FY 2024/25 (10 years after the e piration of the ti aiver). If substantial increases in Metro-related costs occur sooner than ezpected, the City may dra v do n reserve levels prior to FY 2024/25 to manage impacts to ratepayers. To be consistent with the City"s policy for managing balances for its other utility reserves, if funds are appropriated from the reserve before its intended use, the funds should be replenished in subsequent fiscal years. If the magnitude of the withdrawal is material, the Finance Director shall provide the City Council vith a plan to incrementally replenish the resemes. If the actual costs for the PLWTP upgrade or altemative are less than anticipated, any unspent reserves will be rolled into the Working Capital and Rate stabilization reserve and utilized to fund City sewer programs, including maintenance and e pansion of the City's conveyance system and payment of San Diego Metro wastewater treatment costs. Reserve Fund Policies B-4 2022/04/26 City Council Post Agenda Page 459 of 667 APPENDIX C  Fund Balances  2022/04/26 City Council Post Agenda Page 460 of 667 Fiscal Year 2019‐2020Fund 411Fund 413Fund 414 Fund 428 NotesSewer FundTrunk Sewer Capital Reserve  Sewer Service Sewer Facility Replacement End of Year Cash Balance2,231,746$                     64,836,569$                   48,147,276$            13,605,982$            GL032 GL Actuals ‐ 202000 to 202013 SSRS Report;Munis Balance Sheet ReportFund BalancesC-12022/04/26 City Council Post Agenda Page 461 of 667 APPENDIX D  System Growth Estimates  2022/04/26 City Council Post Agenda Page 462 of 667 ANNUAL RESIDENTIAL GROWTH FORECAST 2020 through 2024 September 2019 System Growth Estimates D-1 2022/04/26 City Council Post Agenda Page 463 of 667 2 INTRODUCTION As a component of the City of Chula Vista’s (“City”) Growth Management Program, the City’s Development Services Department provides annual residential growth forecasts looking out five years. This year’s growth forecast covers the period from January 2020 through December 2024. The growth forecast is provided to assist City departments and other service providers in assessing potential impacts that growth may have on maintaining compliance with threshold standards for each of the quality of life threshold topics established in Chula Vista Municipal Code Chapter 19.09, Growth Management, as listed below: 1. Air Quality and Climate Protection 2. Drainage 3. Fire and Emergency Medical Services 4. Fiscal 5. Libraries 6. Parks and Recreation 7. Police 8. Schools 9. Sewer 10. Traffic 11. Water The Chula Vista Growth Management Oversight Commission (GMOC) sends out on an annual basis the growth forecast and compliance questionnaires to City departments and service providers, soliciting information regarding past, current, and projected compliance with the quality of life threshold standards for the facilities and services listed above. The responses to the questionnaires form a basis for the GMOC’s annual report, which includes a set of recommendations to the City Council regarding threshold compliance and/or revisions to any of the City’s threshold standards. Recommendations may include such actions as adding or accelerating capital projects; hiring personnel; changing management practices; or slowing the pace of growth (such as a moratorium). The City Council ultimately decides what course of action to take. To prepare the growth forecast, the City requests that developers and builders provide residential projections for projects that have been or are undergoing the entitlement process, and that could potentially be approved and permitted for construction within the next five years. The numbers reflect consideration of the City’s standard entitlement process and permitting time frames, but do not reflect market or other economic conditions outside the City’s control. Therefore, the growth forecast is characterized as follows:  It does not represent a goal or desired growth rate;  It represents what may occur given a set of assumptions listed below under “Forecast Methods”;  It is produced by the City and is not necessarily endorsed by home builders; and  It assumes that market and economic conditions, as well as developer funding and resources, will consistently be synchronized to support the projections. This is a more liberal estimate to assess possible effects to the City’s threshold standards. System Growth Estimates D-2 2022/04/26 City Council Post Agenda Page 464 of 667 3 As shown in Table A, below, last year’s growth forecast estimated that 2,117 residential building permits would be issued in 2019. However, actual permits issued fell below projections, particularly for single-family units. Overall, permits to date, plus current fourth quarter projected permits are approximately 42% lower than the projections in last year’s Growth Forecast. Permits for single-family units fell more drastically, 72% below the 800 units projected. The majority of building activity in 2019 is occurring in the master planned communities east of Interstate 805. Table A Residential Land Use Type 2019 Projections from Previous Growth Forecast 2019 Actual and Updated Projection Difference Actual Permits Issued 1.1.19 Through 8.22.19 Fourth Quarter 2019 Projections Total % Single-family 800 149 79 228 -72% Multi-family 1,317 379 625 1,004 -24% TOTAL 2,117 528 704 1,232 -42% FORECAST SUMMARY In the forecast period covering calendar year 2020 through calendar year 2024, 6,077 residential units are projected to be permitted citywide, with an annual average of 1,215 housing units permitted per year (see Figure 1 and Tables 1 and 2). Building activity will continue to be concentrated in the master planned communities east of Interstate 805, with 93% of residential permits to be issued in eastern Chula Vista. Refer to Figure 2 for a map of the anticipated developments in the City during the forecast period. Table B Description Residential Unit Forecast Five Year (2020-2024) Per Year No. of Units % of Units No. of Units Western Chula Vista 406 7% 81 Eastern Chula Vista 5,671 93% 1,134 TOTAL 6,077 100% 1,215 These above developer-provided projections were averaged with the projected 10-year moving average of permits issued to present a growth forecast that “smooths out” annual fluctuations (Tables 3 and 4). Averaging the citywide developer projections and the 10-year moving average results in a blended projection of approximately 786 permits to be issued in 2020, increasing to 944 in 2024. The data presented in Table 3 provides a historical context for assessing and validating the developer-generated projections contained in Tables 1 and 2. System Growth Estimates D-3 2022/04/26 City Council Post Agenda Page 465 of 667 4 The following discussion and figures describe the context, conditions and assumptions behind the forecast. It should be noted that this forecast is a planning tool and not a prediction or specific expectation. FORECAST METHODS With input from developers, projections are derived by reviewing the status of project entitlements, including estimated project processing schedules for plan reviews, subdivision maps, and building plans. The forecast is predicated upon the following three assumptions: 1. Public policy regarding development remains unchanged; 2. The housing market remains stable; and 3. Projects follow normal project regulatory processing schedules. To provide context for the forecasted units to be constructed, the City uses several analyses that illustrate the range of possibilities in which development in the City could proceed. These methods are a combination of simple statistics and market absorption estimates provided by developers with consideration for typical permit progression through the City’s entitlement process. Table C Methodology Five Year (2020-2024) Residential Unit Forecast Citywide Developer Estimates and Permit Process Projection 6,077 Statistical (10-Year Simple Moving Average) Projection 4,741 Blended Projection (Average of Developer and Statistical Projections) 5,409 Developer Estimates and Permit Process Projection As part of the Growth Forecast preparation process, the City solicits estimates from developers in the City based on their permitting and construction schedules coupled with their understanding of market absorption conditions. The City then incorporates the status and progression of the units in the entitlement process into the anticipated schedule. In doing so, any unanticipated regulatory impacts to the schedules of planned projects can be accounted for. Typically, this results in some minimal deviations from the developers’ projected schedules. This projection indicates the permitting of a total of 6,077 residential units citywide between 2020 and 2024. System Growth Estimates D-4 2022/04/26 City Council Post Agenda Page 466 of 667 5 Statistical (10-Year Simple Moving Average) Projection As discussed above, the statistical method for projecting permitted units provides a readily- available estimate for future development accounting for the dynamics of approximately a full market cycle. Each future year’s citywide projected completed units are the average of the citywide completed units for the ten prior years, representing a 10-year simple moving average for completed dwelling units. This projection indicates the permitting of approximately 4,741 residential units between 2020 and 2024. As shown on Table 3, the moving average includes data from the preceding 10 years, which includes a period when development was significantly slowed by the national financial crisis and its aftermath. Therefore, although there are some variations year-by-year, the overall five-year projection based on the moving average is approximately 10% lower than developer projections. Blended Projection As previously discussed, the statistical and developer projections form the lower and upper bounds of future trends, respectively. For the purposes of this analysis, the mean of these projections (the Blended Projection) is interpreted as the most likely outcome and is used as the forecasted permit activity and population growth. As discussed in the “Statistical (10-Year Simple Moving Average) Projection” section above, approximately 4,741 total permitted units are projected between 2020 and 2024, based on the moving average, while 6,077 would be permitted based on developer projections. The average between the 10-year moving average and developer projections is 5,409 units between 2020 and 2024. Additional details can be found in Tables 3 and 4, and the light blue lines on Figure 3. Additional details can be found in Tables 3 and 4, and the light blue lines on Figure 3. Information regarding projected growth in the eastern and western portions of the City is presented in the paragraphs that follow. Eastern Chula Vista Most of the City’s growth has been and will continue to be in eastern Chula Vista (see Figure 2) for the next several years. Development is projected to be most active in Otay Ranch Villages 2, 3, 8 West, Planning Area 12, and Millenia through 2024 (see Table 1). Starting in January 2020, the remaining capacity for residential units projected to be permitted in eastern Chula Vista is approximately 16,897. If 6,077 units were to be permitted over the next five- year period, then approximately 10,820 units would remain. Assuming the continuation of the annual developer projection of 1,215 permits per year, the City’s residential capacity would be fully built out in approximately nine years after the analysis period of this growth forecast (i.e., 2033). However, this is a projection of long-term future growth based on a five-year-projection; this buildout estimate is subject to revision resulting from changes in economic conditions, updated vacancy and occupancy estimates, and/or future revisions to development plans. System Growth Estimates D-5 2022/04/26 City Council Post Agenda Page 467 of 667 6 Western Chula Vista Several projects in western Chula Vista are entitled but remain undeveloped, as indicated in Table D, below: Table D NAME/ADDRESS NUMBER OF ENTITLED UNITS MULTI-FAMILY 1262 Third Avenue Apartments 6 201 Third Avenue 23 230 Church Avenue Apartments 29 268 I Street Apartments 6 288 Center Street 29 305 E Street Apartments 52 354 Moss Street Townhomes 16 577 Fourth Avenue Residences 10 Bayfront–Pacifica 450 The Colony Condominiums 162 Flower Street Apartments 18 Fourth Avenue 4-Plex 4 Industrial Townhomes 42 Limon Apartments 3 Urbana (385 & 395 H Street) 135 Villas Nuevos Apartments 4 Vistas Chulitas 9 Vistas Del Mar 71 Woodlawn Avenue Apartments 4 SUBTOTAL 1,073 (99%) SINGLE-FAMILY 264-276 Palm Avenue Homes 4 635-641 E. Naples Homes 4 Date Street Residences 5 SUBTOTAL 13 (1%) TOTAL 1,086 The initial phase of development of the Bayfront–Pacifica units is projected to begin in 2021. It is assumed that buildout of Pacifica would occur after 2024. However, there is no clear indication when the other projects will move forward. From January 1 through August 22, 2019, 19 building permits were issued for accessory dwelling units (ADUs). Approximately 20 ADUs are expected to be permitted each year between 2020 and 2024. System Growth Estimates D-6 2022/04/26 City Council Post Agenda Page 468 of 667 7 CONSTRUCTION HISTORY Residential Several market cycles, including recessions, have contributed to a broad range in the number of building permits issued each decade since 1980, as indicated in Table E, below: Table E Decade Average Number of Building Permits Issued per Year 1980-1989 990 1990-1999 973 2000-2009 1,885 2010-2019* 913 * Existing permits through August 22, 2019 plus projections for fourth quarter of 2019 The following are notable characteristics of residential construction since the 1980s:  On an annual basis, the number of building permits issued for housing units in Chula Vista has fluctuated from a low of 195 in 1981 to a high of 3,525 in 2001.  The average number between 1980 and 2018 was 1,188 (see Table 3 and Figure 3).  Between 1984 and 1989, the average number of permits issued each year was 1,431.  There was a ten-year period of at least 1,000 permits issued annually between 1997 and 2006, averaging 2,254 units per year.  In 2001, 2003 and 2004, the annual permits issued exceeded 3,000.  Between 2007 and 2015, the number of building permits issued each year never exceeded 1,000 per year, due to the lingering effects of the housing and financial crisis.  Between 2016 and 2018, annual permits issued exceeded 1,000 and increased with each successive year.  The projected number of annual permits for 2019 is 1,035, which is a reduction from previous years. A significant cause of Chula Vista’s growth was, and continues to be, development of the master planned communities in eastern Chula Vista, including Rancho del Rey, Eastlake, Rolling Hills Ranch, San Miguel Ranch, and Bella Lago, which are mostly built out; and Otay Ranch, which has several thousand more units to be constructed. System Growth Estimates D-7 2022/04/26 City Council Post Agenda Page 469 of 667 8 Commercial and Industrial Commercial and industrial development in the City has been significantly outpaced by residential development but characterized by periodic upticks, typically due to the opening of retail centers. Commercial development in the City has recently accelerated with the development of the Millenia, Freeway Commercial, and Bayfront project areas. Approximately 1,600 hotel rooms are projected to be permitted in 2020 in the Chula Vista Bayfront Master Plan area. FORECASTED POPULATION This forecast focuses on the projected number of residential units as the primary indicator to measure future population increases. Western Chula Vista (as evidenced by U.S. Census data) has experienced growth in the form of demographic changes as the average household size increases. However, such growth is difficult to track on a year-to-year basis and is not reflected in this report’s future population forecast. The California State Department of Finance (DOF) estimated that Chula Vista had an average of 3.30 persons per household in 2019. Applying this rate to the residential units projected over the next five years using the City’s 10-year moving average, and assuming a 2019 year-end population of 277,099 and the 2019 DOF vacancy rate of 5.3%, Chula Vista can expect a total population of approximately 288,844 persons by the end of 2024 (see Figure 3, solid red line). Applying the developer’s projections to the same assumptions would result in a projected 2024 population of 294,252. Assuming the Blended Projection, the City’s population would be 291,548 by 2024. This represents an increase of approximately 14,450 residents, as compared to the estimated year-end population of 277,099 for 2019. This is only a rough estimate for planning purposes, as the vacancy rate, persons per unit factors, and the number of actual units completed will vary over time. System Growth Estimates D-8 2022/04/26 City Council Post Agenda Page 470 of 667 0.0 0.2 0.4 0.6 0.8 1.0 Figure 1 - Residential Building Permits Actual Issued 2004 - 2019 and Forecast 2020 - 2024 0 500 1000 1500 2000 2500 3000 3500 Eastern Chula Vista Western Chula Vista L:\Gabe Files\GMOC\2020\CV Res building permits statistics.pdf.9.1.19 Number of Units Actual Forecast 2020 2021 2022 2023 2024 1,654 3,300 1,0731,050 692829 631728 517 275325 576 1,180 798 658528 20 176 20 20170 868 1,610 1,364 1,171 1,777 200420052006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Thru 8/22/2019 System Growth Estimates D-9 2022/04/26 City Council Post Agenda Page 471 of 667 LIST OF CITYWIDE PROJECTS City of Chula Vista Boundary Toll Road CITY OF C H U L A V I S T A COUNTY O F S A N D I E G O Village2 Village1 Village3 Village6 Village7 Village9 Village10 Village8 - EastVillage8 - West University University Chula VIstaElite AthleteTraining Center Village11 PA-12 OtayRanchTownCenter EUCMillenia OTAYLANDFILL San MiguelRanch Rolling Hills Ranch BellaLago EastlakeGreens 805 Sweetwater Reservoir San Diego Bay L o w e r O t a y L a k e 54 125 5 L St K St J St H St G St E St F St D St C St Naples St Moss St Palomar St Oxsford St Orange Av Main StHi l l top D rFi rs t Av Second Av Thi rd Av Four th Av Fi f th Av Broadway E H St Telegraph Cany o n R d E P alom a r S t O lym p ic ParkwayH erita g e RdLa Med i a R d Bi r c h R d East l ake Pkwy Hunte P k w y P roctor Val l e y Rd Otay Lakes Rd Bayfront Pacifica Village 2 - Otay Ranch Village 3 North - Otay Ranch Village 4 - Otay Ranch Village 8 West - Otay Ranch Village 8 East - Otay Ranch EUC "Millenia" - Otay Ranch PA-12 Freeway Commercial - Otay Ranch L:\Gabe Files\GMOC\2020\Figure 2 - Residential Forecast Development Map.pdf.9.1.19 2 3 4 5 7 8 6 1 2 3 4 5 6 7 8 1 Figure 2 - Residential Development Forecast Map 2020- 2024 System Growth Estimates D-10 2022/04/26 City Council Post Agenda Page 472 of 667 2001, 3,525 2009, 275 2021, 1,786 2024, 888 2024, 288,844 2024,291,548 2024, 294,252 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 3600 3800 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Estimated Year-End PopulationAnnual Units IssuedFigure 3 - Historic and Projected Population Growth Historic Units 10-yr Avg Projected Units Developers' Projected Units Average of Projected Units Historic Population 10-yr Avg Projected Population Average of Projected Pop.Developers' Projected Pop. Montgomery Annex Note: Population increase assumed to occur at occupancy, which for the purposes of this analysis is assumed to lag issuance by one year. 2019 System Growth Estimates D-11 2022/04/26 City Council Post Agenda Page 473 of 667 0 250 500 750 1000 1250 1500 1750 2000 2250 2500 2750 2013 2014 2015 2016 2017 2018 2019P 2020P 2021P 2022P 2023PIssued Dwelling Units (DUs), Hotel Rooms, or 1,000 Commercial Square FeetFigure 4 - Historic and Projected Units Issued by Land Use Multi-Family (DUs)Single Family (DUs)Commercial/Industrial (1,000 SF)Hotel (Rooms) System Growth Estimates D-12 2022/04/26 City Council Post Agenda Page 474 of 667 SF MF SF MF SF MF SF MF SF MF SF MF SF MF OTAY RANCH Village 2 - Baldwin & Sons 21 12 83 180 35 258 50 427 47 350 91 332 306 1,547 Village 2 - HomeFed 0 0 0 0 0 0 62 0 10 0 0 0 72 0 Village 3 - Brookfield Homes (Alley Row Townhomes)0 0 0 0 0 0 0 0 0 37 0 10 0 47 Village 3 - Brookfield Homes (Haciendas)0 0 0 0 0 0 0 0 25 0 13 0 38 0 Village 3 - Brookfield Homes (Prado Front Load)12 0 24 0 0 0 0 0 25 0 19 0 68 0 Village 3 - Lenna Homes (Castellena)0 0 0 0 0 0 0 0 17 0 6 0 23 0 Village 3 - Lennar Homes (Indigo)4 0 4 0 0 0 0 0 20 0 6 0 30 0 Village 3 - Lennar Homes (Valencia)0 0 0 0 0 0 0 0 34 0 10 0 44 0 Village 3 - Shea Homes (Sierra)8 0 12 0 0 0 0 0 36 0 12 0 60 0 Village 3 - Shea Homes (Seville)6 0 37 0 0 0 0 0 36 0 12 0 85 0 Village 3 - TBD 0 0 0 0 24 0 20 120 0 0 0 164 44 284 Village 4 - Undetermined 23 25 0 100 0 100 0 27 0 0 0 0 0 227 Village 8 West - HomeFed 0 0 12 128 252 323 218 404 170 220 122 19 774 1,094 Village 8 East - Homefed 0 0 0 0 0 0 0 0 112 0 0 0 112 0 Village 10 - HomeFed 0 0 0 0 0 0 0 0 0 0 0 52 0 52 Planning Area 12 - Baldwin 0 0 0 78 0 618 0 36 0 32 0 0 0 764 Millenia Lot 15 (Vibe) - Lennar 0 92 0 0 0 0 0 0 0 0 0 0 0 0 Millenia Lot 17 (Boulevard) - Lennar 0 12 0 0 0 0 0 0 0 0 0 0 0 0 Millenia Lots 8 & 21 - Ryan Companies 0 480 0 0 0 0 0 0 0 0 0 0 0 0 Millenia (Element & Z) - Shea 0 4 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL BY UNIT TYPE 74 625 172 486 311 1,299 350 1,014 532 639 291 577 1,656 4,015 GRAND TOTAL ISSUE = Building permits projected to be issued 5-Year Forecast Table 1 EASTERN CHULA VISTA RESIDENTIAL DEVELOPMENT FORECAST 699 658 1,610 868 2024 2020-20242020 ISSUE 1,134Annual Average (2020-2024): 5,671 ISSUE 1,364 ISSUE 1,171 2022 ISSUE 2023 ISSUEEASTERN PROJECTS ISSUE ISSUE 2019 4th Q 2021 System Growth Estimates D-13 2022/04/26 City Council Post Agenda Page 475 of 667 SF MF SF MF SF MF SF MF SF MF SF MF SF MF Bayfront - Pacifica 0 0 0 0 0 156 0 0 0 150 0 0 0 306 Second Accessory Units 5 0 20 0 20 0 20 0 20 0 20 0 100 0 SUB-TOTAL 5 0 20 0 20 156 20 0 20 150 20 0 100 306 TOTAL ISSUE = Building Permits Projected to be Issued 2024 WESTERN CHULA VISTA RESIDENTIAL DEVELOPMENT FORECAST PROJECT 2019 4th Q 2020 2023 ISSUE 2021 Table 2 ISSUE 2022 ISSUE 40617017620 ISSUE ISSUE ISSUEISSUE 2020 - 2024 5-Year Forecast Annual Average (2020 - 2024):81 20 205 System Growth Estimates D-14 2022/04/26 City Council Post Agenda Page 476 of 667 1980 407 374 84,364 1981 195 496 86,597 2.6 1982 232 129 88,023 1.6 1983 479 279 89,370 1.5 1984 1,200 521 91,166 2.0 1985 1,048 1,552 116,325 27.6 2 1986 2,076 1,120 120,285 3.4 1987 1,168 2,490 124,253 3.3 1988 1,413 829 128,028 3.0 1989 1,680 1,321 134,337 4.9 1990 664 1,552 138,262 2.9 1991 747 701 141,015 2.0 1992 560 725 144,466 2.4 1993 435 462 146,525 1.4 1994 700 936 149,791 2.2 1995 833 718 153,164 2.3 1996 914 820 156,148 1.9 1997 1,028 955 162,106 3.8 1998 1,339 1,093 167,103 3.1 1999 2,505 1,715 174,319 4.3 2000 2,618 2,652 181,613 4.2 2001 3,525 3,222 191,220 5.3 2002 2,250 2,923 200,798 5.0 2003 3,143 2,697 208,997 4.1 2004 3,300 3,043 217,512 4.1 2005 1,654 2,525 224,006 3.0 2006 1,180 1,448 227,850 1.7 2007 576 837 231,157 1.5 2008 325 518 234,011 1.2 2009 275 398 244,269 4.4 2010 517 422 245,309 0.4 2011 728 631 250,349 2.1 2012 798 847 255,607 2.1 2013 631 777 259,811 1.6 2014 829 394 261,801 0.8 2015 692 657 263,611 0.7 2016 1,050 607 265,357 0.7 2017 1,073 809 267,503 0.8 2018 1,777 1,319 271,411 1.5 Table 3 HISTORIC AND PROJECTED HOUSING & POPULATION GROWTH 1980 - 2024 - Units Authorized for Construction (Issued) Units Completed (Final) Year End Population Estimate1 Annual Percentage ChangeCalendar Year Page 1 of 2 System Growth Estimates D-15 2022/04/26 City Council Post Agenda Page 477 of 667 Table 3 HISTORIC AND PROJECTED HOUSING & POPULATION GROWTH 1980 - 2024 Units Authorized for Construction (Issued) Units Completed (Final) Year End Population Estimate1 Annual Percentage ChangeCalendar Year 2019 4 1,035 274,644 1.2 2020 786 277,099 0.9 2021 1,358 281,344 1.5 2022 1,168 284,993 1.3 2023 1,154 288,598 1.3 2024 944 291,548 1.0 1,194 1,167 2.2 3 (1) Reflects Department of Finance (DOF) comprehensively revised population figures for the end of the referenced year. Projected future years reflect the average between developer projections and a rolling average of population growth. (2) Annexation of unincorporated community of Montgomery. (4) Permit data through 8/22/2019; remainder of calendar year projected. Population estimated based on permitted units x 3.30 persons per unit x 0.947 occupancy factor. (3) The annual average percentage is adjusted for the anomaly of the Montgomery Annexation. Average, 1980-2018 Page 2 of 2 System Growth Estimates D-16 2022/04/26 City Council Post Agenda Page 478 of 667 2020 678 277,380 893 276,818 786 277,099 2021 1,786 282,961 931 279,727 1,358 281,344 2022 1,384 287,287 951 282,699 1,168 284,993 2023 1,341 291,477 966 285,719 1,154 288,598 2024 888 294,252 1,000 288,844 944 291,548 6,077 4,741 5,409 (2) Units estimated based on 10-year moving average of permitted unit trend. Calendar Year Developer Unit Projections1 10-Year Moving Average Unit Projections2 Year-end Population3 Average of Developer Projections and 10-Year Moving Average Permits Year-end Population4 TOTAL Year-end Population3 PermitsPermits Table 4 POPULATION GROWTH PROJECTIONS 2020-2024 (3) Year-end population includes the increase in population resulting from development during that year, based on a projected City population of 277,099 for the end of 2019. Annual growth is estimated based on the number of units x 3.30 persons per unit x 0.947 growth factor. (4) Year-end population is an average of the population based on developer unit projections and 10-year moving average projections. (1) Units estimated based on developer projections. System Growth Estimates D-17 2022/04/26 City Council Post Agenda Page 479 of 667 Calendar Year Multi-Family Units Permitted Single Family Units Permitted 2013 387 225 162 0 2014 755 107 65 0 2015 420 57 68 0 2016 950 71 240 150 2017 510 563 193 135 2018 1,213 564 458 205 2019P 1,004 228 227 0 2020P 486 192 80 1600 2021P 1,455 331 120 270 2022P 1,014 370 400 0 2023P 789 552 120 250 2024P 577 311 80 152 Annual Average 797 298 Note: (E ) = estimated; (P) = projected Table 5 HISTORIC/PROJECTED NEW CONSTRUCTION, BY LAND USE Commercial/ Industrial 1,000 SF Permitted 184 Hotel Rooms Permitted 230 System Growth Estimates D-18 2022/04/26 City Council Post Agenda Page 480 of 667 APPENDIX E  Interest Earnings Assumptions  2022/04/26 City Council Post Agenda Page 481 of 667 1 Kevin Burnett From:Beth Gentry <bgentry@chulavistaca.gov> Sent:Thursday, November 21, 2019 6:02 PM To:Kevin Burnett Subject:FW: Rate Study - Review of Assumptions from Finance Hi Kevin,    Please use the new interest rate provided by D. Bilby below.    Thank you,  Beth    Beth Gentry P.E., Senior Civil Engineer  City of Chula Vista  Engineering & Capital Projects Department  bgentry@chulavistaca.gov  276 Fourth Avenue  Chula Vista, CA 91910  Office: (619) 476‐2402  Fax: (619) 691‐5171    From: David Bilby <dbilby@chulavistaca.gov>   Sent: Thursday, November 21, 2019 4:55 PM  To: Beth Gentry <bgentry@chulavistaca.gov>; Robert Beamon <Rbeamon@chulavistaca.gov>; Frank Rivera  <FRivera@chulavistaca.gov>; William Valle <WValle@chulavistaca.gov>; Edward Prendell <eprendell@chulavistaca.gov> Subject: RE: Rate Study ‐ Review of Assumptions from Finance    Hi Beth,    This email is specifically in response to item # 3 requested below.      My new interest earnings forecast for the next 5 years is 1%.      The following factors are included in this projection: the federal reserve has lowered the overnight rate 3 times in the  last 6 months with the dot plot showing 2 additional reductions projected in 2020 (this would bring the fed rate to a  range of 1‐1.25%); investments from 5 months ago were yielding 3.2%, now they are at 1.7%; probabilities of a recession  in the next 18 months have risen over the last 6 months; a high probability exists that the Fed will have to reduce rates  further to combat any economic downturns over the next 5 years; 10 year and 30 year treasury bond rates are trading  just above historic lows which puts pressure on short term securities; global yields have gone negative in several  European and Asian markets over the last 6 months and the president of the United States has voiced his displeasure  with our current interest rates and has demanded that we consider negative interest rates also.      Please let me know if you have any questions.    Thanks,    David Bilby, MSBA, CPFO  Director of Finance/Treasurer  Interest Earnings Assumptions E-1 2022/04/26 City Council Post Agenda Page 482 of 667 2 City of Chula Vista  Office (619) 409‐3818    From: Beth Gentry <bgentry@chulavistaca.gov>   Sent: Thursday, November 21, 2019 4:39 PM  To: Robert Beamon <Rbeamon@chulavistaca.gov>; Frank Rivera <FRivera@chulavistaca.gov>; William Valle  <WValle@chulavistaca.gov>; Edward Prendell <eprendell@chulavistaca.gov>; David Bilby <dbilby@chulavistaca.gov>  Subject: Rate Study ‐ Review of Assumptions from Finance    Hi David,    I appreciate your help in reviewing some of the assumptions for the Sewer Rate Study.    I am attaching the information electronically that I provided at the meeting.    In regards to the Item No. 1 on the Fund Balances, I understand that the audited numbers will be available in two  weeks.  For now, we will use the numbers previously provided by Ed Prendell but will look forward to having the  information updated after the audit. But when the audited information is available, please provide the information by  fund (similar to the previous email, attached).    For Items 2 through 4, as discussed, the numbers should be appropriate for the 5‐year Rate Study not a snap shot in  time.  They will be used to project out 10‐years but with the understanding that another rate study will be done to  update the 5‐year Study.     For Item No. 2, let me know what you are able to find from Meya regarding the historic delinquency rate.      For Item No. 3, please let me know what the interest assumption be, previous email attached with updated attachment.   For Item No. 4, please review and provide any updates to the previously provided escalation factors, previous email  attached.    Thank you in advance for your help.  Beth    Beth Gentry P.E., Senior Civil Engineer  City of Chula Vista  Engineering & Capital Projects Department  bgentry@chulavistaca.gov  276 Fourth Avenue  Chula Vista, CA 91910  Office: (619) 476‐2402  Fax: (619) 691‐5171    Interest Earnings Assumptions E-2 2022/04/26 City Council Post Agenda Page 483 of 667 APPENDIX F  Metro Cost Projections  2022/04/26 City Council Post Agenda Page 484 of 667 PUBLIC UTILITIES DEPARTMENT FISCAL YEAR 2020-2024 FIVE-YEAR FINANCIAL OUTLOOK Matthew Vespi Interim Director Lee Ann Jones-Santos Assistant Director Charles Modica Deputy Director Mark Gonzalez Program Manager JANUARY 2019 Metro Cost Projections F-1 2022/04/26 City Council Post Agenda Page 485 of 667 Disclaimer: The City files its disclosure documents, including official statements, audited financial statements, comprehensive annual financial reports, annual financial information, material event notices, and voluntary disclosures with the Municipal Securities Rule Making Board’s Electronic Municipal Market Access (“EMMA”) system. The PUD Five- Year Financial Outlook is not filed on EMMA and investors should not rely upon the PUD Five-Year Financial Outlook to make any investment decisions. The City will provide the PUD Five-Year Financial Outlook to the rating agencies, its bond insurers and other interested parties, and welcomes and encourages their careful review of this document. Readers are cautioned that the numbers presented in this document are the City’s best estimate for the next five years based on facts and factors currently known to the City and do not represent actual performance. No representation is made by the City that, as of the date this document is read, there is not a material difference between the City’s actual performance as of such date and the financial data presented in the PUD Five-Year Financial Outlook. Certain statements in this document constitute forward -looking statements or statements which may be deemed or construed to be forward-looking statements. Forward-looking statements involve, and are subject to known and unknown risks, uncertainties and other factors which could cause the City's actual results, performance (financial or operating) or achievements to differ materially from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. All forward-looking statements herein are expressly qualified in their entirety by the abovementioned cautionary statement. The City disclaims any obligation to update forward-looking statements contained in this document. Metro Cost Projections F-2 2022/04/26 City Council Post Agenda Page 486 of 667 TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................................. 1 Overview of the Water and Wastewater System ......................................................................................... 7 WATER SYSTEM ........................................................................................................................................... 10 Water System Revenues ......................................................................................................................... 10 Water Sales ......................................................................................................................................... 10 Water Capacity Charges ...................................................................................................................... 13 Revenue from Use of Property ........................................................................................................... 15 Other Revenue .................................................................................................................................... 15 Water System Expenditures .................................................................................................................... 16 Water Purchases ................................................................................................................................. 16 Personnel Expenditures ...................................................................................................................... 16 Supplies ............................................................................................................................................... 18 Contracts ............................................................................................................................................. 18 Information Technology ...................................................................................................................... 19 Energy & Utilities ................................................................................................................................ 20 Reserve Contributions ......................................................................................................................... 21 Other Expenditures ............................................................................................................................. 22 Water System Capital Improvement Program ........................................................................................ 23 WASTEWATER SYSTEM ............................................................................................................................... 26 Wastewater System Revenues ............................................................................................................... 26 Sewer Service Charges ........................................................................................................................ 26 Wastewater Capacity Charges ............................................................................................................ 28 Other Revenue .................................................................................................................................... 29 Wastewater System Expenditures .......................................................................................................... 31 Personnel Expenditures ...................................................................................................................... 31 Supplies ............................................................................................................................................... 32 Contracts ............................................................................................................................................. 33 Information Technology ...................................................................................................................... 34 Energy & Utilities ................................................................................................................................ 35 Reserve Contributions ......................................................................................................................... 35 Other Expenditures ............................................................................................................................. 36 Wastewater System Capital Improvement Program .............................................................................. 37 Metro Cost Projections F-3 2022/04/26 City Council Post Agenda Page 487 of 667 MISSION STATEMENT To provide reliable water utility services that protect the health of our communities and the environment VISION STATEMENT A world-class water utility for a world-class city Metro Cost Projections F-4 2022/04/26 City Council Post Agenda Page 488 of 667 EXECUTIVE SUMMARY The Public Utilities Department (PUD) Fiscal Year 2020-2024 Five-Year Financial Outlook (PUD Outlook) is provided to guide long-range planning and serve as the framework for the development of the Fiscal Year (FY) 2020 Proposed Budget for the Water and Sewer Revenue Funds. The purpose of this report is to provide an overview of the Public Utilities Department’s long-range needs and to guide programmatic decisions. The PUD Outlook focuses on the overall fiscal condition of the Water and Wastewater Systems, and assesses impacts to system revenues and expenditures from regional water and wastewater demands. It also lays out a funding strategy to finance major capital investments in water and wastewater system infrastructure and the construction of the Pure Water Program. The PUD Outlook quantifies new costs that are critical to accomplishing PUD’s strategic goals over the next five-year period. These goals include: Goal 1: Water Supply and Environmental Stewardship ➢ Water supply and conservation ➢ Carbon footprint and energy management Goal 2: Organization Excellence ➢ Rate structure optimization ➢ Safety ➢ Training and development ➢ Excellent organizational culture Goal 3: Community Engagement ➢ Stakeholder understanding and support ➢ Customer service strategies Goal 4: Infrastructure Management ➢ Asset management ➢ Infrastructure investment The PUD Outlook is not a budget. Its projections are consistent with those in PUD’s bond offering statements, and largely use a budgetary basis.1 Projected revenues and expenditures in any given year of the PUD Outlook may not correspond exactly to those in future Proposed Budgets. Nevertheless, the PUD Outlook can serve as a planning tool to assist in budget decisions and the allocation of resources to meet PUD’s strategic goals that are critical to providing the community with a high quality and reliable water supply. The PUD Outlook also provides the City Council, key stakeholders, and the public with information in advance of the budget meetings to facilitate an informed discussion during the development of the FY 2020 Budget. 1 Revenues, Operating Expenses, and Capital Expenses in the Outlook use a cash basis. Debt payments are based on a projected debt schedule. Metro Cost Projections F-5 2022/04/26 City Council Post Agenda Page 489 of 667 SUMMARY OF KEY FINANCIAL DATA This section presents a summary of the PUD FY 2020 through FY 2024 Outlook, and the overall financial condition of the Water and Wastewater System. Summary tables of revenues and operating expenses are provided along with expenses associated with PUD’s Capital Improvement Program (CIP), debt service payments, and reserve contributions. Further detail on CIP expenses and sources of funds for those expenses is also provided. Additional detail on each line-item in these summaries can be found in the corresponding sections of this report. Revenue projections include differing growth rates for each line-item. Baseline operating expenditures are those expenditures that are sufficient to allow PUD to continue maintaining its existing operations without expanding any operational programs. Critical operating expenditures are those associated with expanded operations for PUD; a significant portion of these critical operating expenditures are associated with Phase One of the Pure Water Program coming online. Water System Overall, the PUD Outlook for the Water System forecasts revenue to increase moderately over the next five years, primarily due to projected water rate increases in FY 2020 that have been approved by Council, as well as rate increases and that are expected to be needed in FYs 2021 through 2024 (see section on Water Systems Revenues). Other operating revenues are projected to increase slightly between FY 2020 and FY 2021 due to an increase in cash balances and associated interest earnings, but gradually decline over the following three years based on projected market fluctuations. PUD is projecting the receipt of approximately $11.5 million in Local Resource Program incentives from Metropolitan Water District for developing local water supplies, which accounts for the increase in other revenue in FY 2024. Baseline operating expenditures are projected to grow modestly over the next five years, but increases in critical operating expenditures are expected as PUD begins operations and maintenance of Phase 1 of the Pure Water Program as reflected in the table 1.1 below. Conversely, capital improvement program expenditures (CIP) begin gradually decreasing starting in FY 2022, as Phase 1 of the Pure Water Program nears completion. Water purchase expenses in FY 2024 decline due to Phase 1 coming on-line. PUD continues to pursue financing to fund the CIP, including the Pure Water Program, as illustrated on table 1.2 below. This Section Intentionally Left Blank Metro Cost Projections F-6 2022/04/26 City Council Post Agenda Page 490 of 667 Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024 Water Sales $598.1 $638.7 $678.4 $719.9 $761.1 Capacity Charges $14.4 $14.4 $14.4 $14.4 $14.4 Revenue from Use of Property $5.8 $5.8 $5.8 $5.8 $5.8 Other Revenue $18.3 $19.3 $18.8 $18.4 $31.8 TOTAL SYSTEM REVENUES $636.6 $678.2 $717.4 $758.5 $813.1 Salaries & Wages $49.0 $49.3 $49.6 $49.4 $49.4 Fringe Benefits $35.9 $36.8 $36.9 $37.0 $37.2 Water Purchases $268.8 $285.3 $299.9 $315.2 $286.4 Other Non-Personnel Expenditures $109.4 $113.6 $117.7 $121.8 $126.2 BASELINE OPERATING EXPENDITURES $463.2 $485.0 $504.1 $523.4 $499.1 CRITICAL OPERATING EXPENDITURES $4.8 $4.5 $22.1 $28.2 $37.0 Contribution to Capital Improvement Program (CIP)$82.4 $61.4 $65.0 $60.6 $61.7 Debt Service $90.6 $103.6 $122.3 $131.9 $148.5 (Use of) / Contributions to Reserves $0.0 $1.0 $4.2 $2.8 $2.6 NON-OPERATING EXPENDITURES $173.0 $165.9 $191.5 $195.3 $212.7 TOTAL EXPENDITURES $641.0 $655.4 $717.7 $746.9 $748.8 Impact to Fund Balance ($4.4) $22.7 ($0.3) $11.7 $64.3 Table 1.1 - Water System Fiscal Year 2020-2024 Financial Outlook Summary of Operating & Maintenance Key Financial Data ($ in Millions) Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024 Baseline CIP $249.1 $182.7 $149.5 $144.3 $144.0 Pure Water CIP $197.0 $281.5 $204.5 $106.0 $13.0 TOTAL CIP EXPENDITURES $446.1 $464.2 $354.0 $250.3 $157.0 SOURCES OF FUNDS Commercial Paper / Revenue Bonds $139.0 $111.6 $67.9 $135.0 $88.0 State Revolving Funds $54.0 $54.8 $59.2 $38.7 $7.3 WIFIA $170.7 $236.4 $161.9 $16.0 $0.0 Cash $82.4 $61.4 $65.0 $60.6 $61.7 FINANCING SOURCES $446.1 $464.2 $354.0 $250.3 $157.0 ($ in Millions) Table 1.2 - Water System Fiscal Year 2020-2024 Financial Outlook Summary of Capital Improvement Program Key Financial Data Metro Cost Projections F-7 2022/04/26 City Council Post Agenda Page 491 of 667 Wastewater System Overall, the PUD Outlook for the Wastewater System forecasts revenue to increase moderately over the next five years, primarily due to projected rate increases related to sewer service charges (see section on Wastewater Systems Revenues). Other operating revenues are projected to increase slightly from FY 2019, primarily due to wastewater system charges to Participating Agencies of the Metropolitan Wastewater System (further described in the PUD Outlook overview below) to reflect anticipated increases in shared costs of Pure Water Program expenses. Additional growth in other revenues is associated with projected increases in pooled investments. The PUD Outlook also anticipates the transfer of funds from the Rate Stabilization Fund to mitigate potential fluctuations in the rates in FYs 2020 through 2024. Baseline operating expenditures are projected to grow modestly over the next five years, but increases in critical operating expenditures are expected as PUD begins to prepare its operations and maintenance program for Phase 1 of the Pure Water Program as reflected in the table 1.3 below. Similar to the water system CIP, expenditures in the wastewater CIP begin decreasing in FY 2022, as Phase 1 of the Pure Water Program nears completion. PUD continues to pursue financing to fund the CIP, including the Pure Water Program, as illustrated on table 1.4 below. Table 1.3 - Wastewater System Fiscal Year 2020-2024 Financial Outlook Summary of Operating & Maintenance Key Financial Data ($ in Millions) Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024 Sewer Service Charges $271.4 $280.2 $295.0 $310.5 $328.4 Capacity Charges $16.3 $17.5 $17.5 $17.5 $17.5 Other Revenue $103.7 $107.6 $109.8 $113.3 $118.6 TOTAL SYSTEM REVENUES $391.4 $405.3 $422.3 $441.3 $464.5 Salaries & Wages $58.3 $58.9 $58.9 $58.9 $58.8 Fringe Benefits $42.2 $43.1 $43.3 $43.4 $43.6 Other Non-Personnel Expenditures $134.8 $140.2 $145.0 $149.8 $155.1 BASELINE EXPENDITURES $235.3 $242.2 $247.2 $252.1 $257.5 CRITICAL OPERATING EXPENDITURES $6.3 $7.0 $21.3 $23.1 $29.8 Contributions to Capital Improvement Program (CIP)$66.8 $97.1 $96.4 $34.3 $20.0 Debt Service $106.1 $105.3 $113.6 $124.0 $118.9 (Use of) / Contributions to Reserves (1)($5.0)($5.0)($11.7)($13.7)$2.3 NON-OPERATING EXPENDITURES $168.0 $197.4 $198.2 $144.6 $141.1 TOTAL EXPENDITURES $409.5 $446.6 $466.7 $419.8 $428.4 Impact to Fund Balance ($18.2) ($41.3) ($44.5) $21.5 $36.1 (1) Reflects use of Rate Stabilization Reserve to mitigate potential flucuations in rates and contributions to the Operating Reserve. Metro Cost Projections F-8 2022/04/26 City Council Post Agenda Page 492 of 667 This Section Intentionally Left Blank Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024 Baseline CIP $167.7 $125.5 $142.8 $128.4 $120.1 Pure Water CIP $190.0 $220.2 $124.5 $38.4 $5.9 TOTAL CIP EXPENDITURES $357.7 $345.7 $267.2 $166.8 $126.0 SOURCES OF FUNDS Revenue Bonds $0.0 $0.0 $145.0 $116.0 $90.0 State Revolving Funds $262.2 $232.6 $9.9 $0.6 $0.0 Capacity Fees $16.0 $16.0 $16.0 $16.0 $16.0 Grants $12.7 $0.0 $0.0 $0.0 $0.0 Cash $66.8 $97.1 $96.4 $34.3 $20.0 FINANCING SOURCES $357.7 $345.7 $267.2 $166.8 $126.0 Table 1.4 - Wastewater System Fiscal Year 2020-2024 Financial Outlook Summary of Capital Improvement Program Key Financial Data ($ in Millions) Metro Cost Projections F-9 2022/04/26 City Council Post Agenda Page 493 of 667 Report Outline The PUD Outlook is organized into two main sections: Water System and Wastewater System. The water system is comprised of the Water Utility Fund and the wastewater system is comprised of the Metropolitan and Municipal Sewer Funds, collectively known as the “Sewer Revenue Fund”. The PUD Outlook provides a brief overview of the water and wastewater systems and the impacts of the Pure Water Program. Each section also provides a discussion of baseline projections for revenues and expenditures, and upcoming critical operational expenditures that will require additional resources. Projected Capital Improvement Program (CIP) needs and financing options are also discussed. The Water System and Wastewater System sections of the PUD Outlook include projections for the next five years of ongoing revenues and expenditures, as displayed in Table 1.1 – Water System Fund Fiscal Year 2020-2024 Financial Outlook, and Table 1.3 Wastewater System Fiscal Year 2020-2024 Financial Outlook, respectively. ‘Baseline’ projections include expenditure adjustments necessary to support current service levels provided by PUD. Actual FY 2018 unaudited expenditures serve as the starting point for non-personnel baseline projections unless otherwise noted; personnel expenditure projections use the FY 2019 Adopted Budget as a starting point. As noted earlier , Outlook projections in any given year may not correspond exactly to the revenues and expenditures in future Proposed Budgets. Critical Operating Expenditures are largely associated with implementation of the Pure Water Program, but also include expenditures that have been preliminarily identified as necessary in meeting core water and wastewater service levels and PUD’s strategic goals. They are discussed within each expenditure category. All expenditures discussed in this report will be further refined during the FY 2020 budget development process. This Section Intentionally Left Blank Metro Cost Projections F-10 2022/04/26 City Council Post Agenda Page 494 of 667 Overview of the Water and Wastewater System The City of San Diego is a major metropolis and is ranked the eighth largest City in the United States and the second largest city in California. The City’s total population is estimated at 1.4 million. The City’s climate is semiarid with cycles of multi-year droughts. Average rainfall does not provide adequate local water supplies for the City, and is supplemented with water imported from outside the region. The City’s water and wastewater systems are maintained and operated by the City’s Public Utilities Department. The City provides water to not only the City of San Diego but to the cities of Del Mar, Coronado and Imperial Beach, primarily from two water sources: (1) local supplies, which provide on average 10 - 15% of water needs, and (2) the San Diego County Water Authority (CWA), which provides 85 - 90% of water needs. The City’s water system extends over 404 square miles, with average potable water deliveries of 155 million gallons per day (mgd), or 174,000 acre-feet per year (AFY). PUD’s extensive raw water system includes nine reservoirs, which capture local runoff from rainfall and store purchased imported water that is sent to the City’s three water treatment plants for treatment and distribution. Based on statistics provided by the San Diego Association of Governments (SANDAG), the City’s population is projected to increase by 22% over the next 20 years. PUD expects that this projected growth will increase demand for potable water by 18% to 22%, depending on the variables of future weather and conservation level assumptions. The City’s wastewater system owns and operates wastewater treatment plants that serve the City as well as other the agencies of other cities and districts outside San Diego City boundaries (Participating Agencies). The wastewater system serves over 2.2 million customers by providing wastewater collection, treatment, and disposal services. The wastewater system processes an average of 156 million gallons of sewage daily via a vast network of facilities which include an extensive collection system, regional wastewater treatment, cogeneration, and a biosolids production center. The wastewater system is comprised of two subsystems, the Municipal Sub-System and the Metropolitan Sub-System. The Municipal Sub-System is a municipal sewage collection system for the City’s residents and consists of all elements required for the collection and conveyance of wastewater gener ated by the service area, which currently consists of more than 275,000 accounts. The Metropolitan Sub - System is a regional sewage treatment and disposal system that serves the City and twelve other Participating Agencies near the City. The wastewater system covers approximately 450 square miles, including most of the City, and stretches from Del Mar and Poway to the north, Alpine and Lakeside to the east, and San Ysidro to the south. The communities and agencies served by the wastewater system form the third largest metropolitan area in the State, surpassed only by the Los Angeles and San Francisco metropolitan areas. The Point Loma Wastewater Treatment Plant serves as a regional treatment facility handling sanitary waste from both Muni and Metro customers. Additionally, the wastewater system operates and maintains two water reclamation plants (North City and South Bay), and a solids management facility (Metropolitan Biosolids Center). Metro Cost Projections F-11 2022/04/26 City Council Post Agenda Page 495 of 667 Regional Water Supply In any given year, the City will use local water supplies to meet 10 - 15% of demand, and relies on imported water from the County Water Authority (CWA) to meet the other 85 - 90% of demand. The CWA is a wholesale water agency that provided approximately 400,000 AF of imported and desalinated water to its member agencies in Fiscal Year 2018, including 155,000 AF supplied to PUD. CWA currently acquires the majority of its water from three main sources: conserved water from the Imperial Irrigation District, water from the Metropolitan Water District (MWD), and desalinated water. MWD obtains its water from the Colorado River through the United States Bureau of Reclamation, and from northern California via the State Water Project through the California Department of Water Resources (DWR). MWD is one of 29 public water agencies that have long-term contracts for water service from DWR, and it is the largest agency in terms of the number of people it se rves (approximately 19 million). The CWA is MWD’s largest customer, responsible on average for 19.5% of MWD’s annual revenues. Both CWA and MWD are developing storage and additional supplies, such as water transfers, to augment their imported water. PUD also maintains a recycled water system that supplies a portion of the San Diego region. That system is supplied by two water reclamation plants – the North City Water Reclamation Plant (NCWRP) and South Bay Water Reclamation Plant (SBWRP). The City supplies recycled water to retail customers and to three wholesale customers: the City of Poway, the Olivenhain Municipal Water District, and the Otay Water District. Recycled water usage is seasonal and is primarily used for irrigation. Customers also use the water for dust suppression or soil compaction at construction sites, in cooling towers, ornamental fountains, and for office building toilet and urinal flushing (dual plumbing). Participating Agencies Pursuant to the Regional Wastewater Disposal Agreement, the Metropolitan Sub-System provides “wholesale” treatment and disposal services, including some sewage transportation , to the cities of Chula Vista, Coronado, Del Mar, El Cajon, Imperial Beach, La Mesa, National City and Poway, the Lemon Grove Sanitation District, the Otay Water Dis trict, the Padre Dam Municipal Water District, and the County of San Diego (on behalf of Winter Gardens Sewer Maintenance District and the Alpine Lakeside and Spring Valley Sanitation Districts). These cities and districts are collectively referred to as the “Participating Agencies”. The Regional Wastewater Disposal Agreement requires the Participating Agencies to pay their respective share of planning, design and construction of Metropolitan Sub-System facilities, as well as costs relating to the operation and maintenance of the Metropolitan Sub-System. Since Fiscal Year 2011, these aggregate costs have consistently constituted approximately 33% of the total Metropolitan Sub-System costs. Between Fiscal Years 2014 and 2018, the department received, on average, approximately $65 million in System Revenues per fiscal year from the Participating Agencies. Pure Water Program The Pure Water Program will provide a safe, secure, and sustainable local drinking water supply for San Diego. Advanced water purification technology will be used to produce potable water from recycled water. The City and its regional partners face significant issues with water supply and Metro Cost Projections F-12 2022/04/26 City Council Post Agenda Page 496 of 667 wastewater treatment. The region’s reliance on imported water causes the water supply to be vulnerable to shortages and susceptible to price increases beyond the control of PUD. The Pure Water Program is a 20-year (2015-2035) multi-phased water and wastewater capital improvement program that is expected, upon full implementation by the end of calendar year 2035, to create 83 mgd of locally controlled water, which will provide one-third of the City’s total potable water needs. The Pure Water Program will divert treated water from the Point Loma Wastewater Treatment Plant’s outfalls and recycle a valuable and limited resource that is currently discharged to the ocean. Phase 1 of the program is expected to produce 30 mgd of purified drinking water by February 2024. This will allow the City to reduce the amount of water purchased in FY 2024 and beyond. In 2010, the City received a renewal of the Modified Permit for the Point Loma Plant and agreed to identify opportunities to maximize recycling wastewater for potable and non-potable uses. That permit expired in July 2015 and was administratively continued while the regulatory agencies completed work on the renewal application. In 2017 the Environmental Protection Agency (EPA), in conjunction with the California Regional Water Quality Control Board (RWQCB), issued the final approval renewing the Modified Permit (5th Renewal) and a waiver from secondary treatment standards for another five years. The permit took effect October 1, 2017 and expires on September 30, 2022. The 5th Renewal was based on compliance with Clean Water Act requirements, progress of the Pure Water Program, and a reduction in permitted emissions from the previous permit level. The Pure Water Program is designed to reduce discharge into the ocean from the Point Loma Plant while providing a new local source of potable water for the City. It is anticipated that continuation of the Pure Water Program will be reflected in future permits, which will eliminate the need for the City to make over $1.8 billion in upgrades to the Point Loma Plant that would otherwise be necessary. Phase 1 of the Pure Water Program includes the construction of the North City Pure Water Facility and the expansion of the existing North City Water Reclamation Plant. The designs for the North City Pure Water Phase 1 Projects are complete, and in November 2018 the City Council authorized PUD begin advertising for construction. Future phases include the potential expansion of the South Bay Water Reclamation Plant, as well as proposed Central Area facilities that would include both reclamation and purified water facilities. Phase 1 is estimated to cost approximately $1.48 billion. The Water and Wastewater Funds will share in these expenditures according to a cost allocation based on completed design and engineering studies. Based on the cost allocation between the water and wastewater systems, approximately $865 million is allocated to the Water Utility Fund and approximately $612 million is allocated to the Sewer Revenue. Phase 1 costs extends through FY 2024; water rates for Fiscal Year 2021 and beyond were not part of the 2016 Rate Case (discussed below). Projected Pure Water Program expenditures for both the Water and Sewer Utility Funds will be dependent on future rates, and PUD anticipates that additional rate capacity from each Fund will be necessary after Fiscal Year 2020. Metro Cost Projections F-13 2022/04/26 City Council Post Agenda Page 497 of 667 WATER SYSTEM This section discusses baseline revenue and expenditure projections, upcoming critical operational expenditures, projected capital improvement program needs and financing options for the next five years for the Water Utility Fund. Water System Revenues The primary revenue sources of the Water Utility Fund are generated fr om water sales, capacity fees, interest earnings, and rental income. This section discusses each revenue category, and includes a description of revenue sources, projected growth rates, and a discussion of future revenue streams and how they impact the Water Utility Fund. Water Sales Background. The majority of Water Utility Fund revenue is generated from water sales: water sales revenue makes up approximately 94% of the Water Utility Fund’s total revenue. City utility bills include water and sewer charges and storm drain fees, but only receipts from water sales are revenues to the Water Utility Fund. The water component is comprised of two parts: a fixed monthly service charge and a commodity charge that is based on the volume of water used. The fixed service charge is determined by the size of a customer’s meter, which provides an approximation of the amount of water the customer could have delivered to the customer’s property. The commodity charge is determined using a set rate based upon each hundred cubic feet (HCF) of water consumed. The City has a tiered commodity charge structure for single family residential (SFR) customers that is broken down by water usage within each rate block. The remaining retail customers – multi-family residential (MFR), Non-Residential, Temporary Construction and Irrigation – are billed under a uniform commodity charge for their respective customer classification. Cost of Service Study. The PUD last conducted a Cost of Service (COS) analysis in 2015, which produced a five-year rate case (the 2016 Rate Case). The 2016 Rate Case was based on comprehensive forecasted annual operations and maintenance costs, capital costs expenditures including the Pure Water Program, and purchased water costs from CWA that become effective in January during each fiscal year. The 2016 Rate Case covered Fiscal Years 2016 through 2020 and was approved by the City Council in November 2015. The rate case included projected rate increases of 9.8% on January 1, 2016, 6.4% on July 1, 2016, 6.4% on July 1, 2017, 5.0% on July 1, 2018 and 7.0% on July 1, 2019.2 The City is in the preliminary stages of reviewing the rate impacts of revenues and expenditures that are projected to begin in Fiscal Year 2021. The City has engaged Raftelis Financial Consultants, Inc. to assist in the preparation of the COS analysis. The analysis and Proposition 218 process are expected to be undertaken and completed in Fiscal Year 2020. New rates would be proposed to become effective in Fiscal Year 2021. This Outlook assumes preliminary water rate increases of 6.9% in FY 2021, 6.4% in FY 2022, 6.3% in FY 2023, and 6.0% in FY 2024 as detailed on Figure 2.1 below. Actual 2 These projected rate increases included both PUD’s costs as well as increases in CWA water rates. The approved 2016 Rate Case allowed PUD to pass through CWA rate increases up of up to 7.0% each year. Projected and actual CWA rate increases were lower than this 7.0% maximum, though CWA rate increases in FY 2017 and FY 2018 were higher than they were projected to be in the 2016 Rate Case. Actual CWA pass-through costs through FY 2019 are reflected on Figure 2.1 below. Metro Cost Projections F-14 2022/04/26 City Council Post Agenda Page 498 of 667 rate increase will be determined through a cost of service study and presented to the City Council for review and approval. CWA rate increase impacts to the City were projected to be 2.5% in Fiscal Year 2019, and 3.0% in Fiscal Year 2020. Because actual CWA pass through increases are lower than the projections for those years, PUD only passes through the actual CWA costs to its ratepayers. The actual pass through impacts are shown in Figure 2.1 below. The CWA pass through impact for Fiscal Year 2020 is currently projected to be 2.1%. Figure 2.1 – Water Service Charge Rate Increases. As discussed above, a portion of the projected rate adjustments are attributable to CWA pass -through costs. The remaining 4% is associated with increased PUD operating and capital costs. Roughly half of those needs – and half (2%) of the projected rate adjustments – are associated with capital and operational expenditures necessary for Phase 1 of Pure Water. Over the Outlook period, $806.1 million, or 48%, of Water Fund CIP needs are attributed to the Pure Water program (see “Water System Capital Improvement Program” section). $80.4 million, or 83%, of Critical Operating Expenditures are attributed to Pure Water program needs. Non-Pure Water Critical Operating Expenditures and increases in baseline expenditures total $104.0 million (see “Water System Expenditures” section). * The 2016 Rate Case projected an increase of 7.00% for FY 2020, but Public Utilities is only projecting a 6.1% increase based on CWA pass-through costs and Water System costs. ** Projected rates for FY 2021-2024 are preliminary projections that include forecasts for CWA pass-through costs, Water System Needs, and revenue necessary to comply with debt service covenants. Detailed forecasts and projections will be prepared in a full cost of service study. 5.30%4.26%4.26% 0.55% 4.50% 2.97%2.67% 1.60% 4.00%4.00%4.00%4.00%4.00% 2.10%2.90%2.40%2.30%2.00% 9.80% 7.23%6.93% 2.15% 6.10%6.90%6.40%6.30%6.00% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% FY 2016 FY 2017 FY 2018 FY 2019 FY 2020*FY 2021 FY 2022 FY 2023 FY 2024 Approved / Projected Water Rate Increases Water System Costs CWA Pass-Through Costs Projected Water System Cost**Projected CWA Pass-Through Costs** Metro Cost Projections F-15 2022/04/26 City Council Post Agenda Page 499 of 667 The following table displays the existing water rates for FY 2019. Forecast. The following table presents FY 2018 actuals, year-end projections for FY 2019 and the forecast for FY 2020 through FY 2024 for revenue from water sales. The FY 2019 projection includes the rate increase of 2.15% that went into effect August 1, 2018. The growth rates as shown in table 2.3 reflect overall revenue growth, and not actual water rate increases which were presented in Figure 2.1. Additionally, the financial projections in Table 2.3 below assume the proposed rate increases shown in Figure 2.1. Economic Trends. Although PUD continues to promote water conservation, the demand for water within the City’s service area is projected to increase as the population continues to grow and development expands. According to the City’s 2015 Urban Water Management Plan (2015 UWMP), single-family residential water use is projected to increase by 39 percent over the period of 2020 to Table 2.2 - Fiscal Year 2019 Water Rates (Effective August 1, 2018) Service Charge ($/month)Commodity Charge ($/HCF) Meter Rate Customer Class Rate 5/8"$24.74 Single Family 1 3/4"$24.74 Tier 1 (0-4 HCF)$4.95 1"$32.77 Tier 2 (5-12 HCF)$5.54 1.5"$51.13 Tier 3 (13-18 HCF)$7.92 2"$74.07 Tier 4 (19+ HCF)$11.13 3"$127.98 Multi Family $5.99 4"$204.83 Non-Residential2 $5.84 6"$395.23 Construction $6.75 8"$624.62 Irrigation $6.64 10"$893.02 12"$1,656.92 16"$2,880.76 1. Bi-Monthly Tiers = 2 x Monthly Tiers. 2. Non-Residential customers include Commercial, Industrial, and Outside City. Table 2.3 - Water Sales Revenue Five-Year Forecast ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Potable Water Growth Rate N/A 2.7%6.2%6.9%6.3%6.2%5.8% Projection $538.6 $550.4 $584.6 $625.2 $664.9 $706.3 $747.5 Other Water Sales (1) Growth Rate N/A 2.4%4.1%0.4%0.4%0.4%0.0% Projection $12.6 $12.9 $13.4 $13.5 $13.5 $13.6 $13.6 (1) Revenue figures for "Other Water Sales" include recycled water sales revenue figures. Metro Cost Projections F-16 2022/04/26 City Council Post Agenda Page 500 of 667 2040. Multifamily residential water use is forecasted to increase at 69 percent over the projection period of 2020 to 2040. The City’s Pure Water Program is expected to be crucial in meeting the City’s water demands and to reduce the impact of increases in the cost of imported water purchased from CWA. Over the past ten years, CWA’s water prices have more than doubled. Sensitivity Analysis. While these projections represent PUD’s best estimate of water sales revenues throughout the PUD Outlook period, actual results will depend on the factors discussed above. Assuming the above rates, declines or increases in water demand of just 1% can impact water sales revenue by approximately $4.5 million. The impact in revenue from potential rate increases ranges from $5.7 to $6.5 million for each percent added or subtracted from projected rate increases depending on the year in which rates are adjusted. Adjustments to projected rates in earlier years would compound this amount. Note that these factors may also impact each other: declines in water demand may necessitate larger rate increases, while increases in demand may partially offset the need for rate increases. The Department is also currently in the process of evaluating potential alternative water rate structures and expects to bring a report summarizing those alternatives to the City Council in early 2019. Water Capacity Charges Background. Capacity charges are development fees imposed on permits for new or expanded water connections, and are based on an estimate of the increase in water consumption as measured by equivalent dwelling units (EDUs). Capacity charge proceeds are used to construct, improve and expand the Water System to accommodate the additional business of such added dwellings or commercial or industrial units. Pursuant to State law, capacity charges can be used only to pay costs associated with capital expansion, bonds, contracts, or other indebtedness of the Water System related to expansion. Because capacity charges are primarily collected on the issuance of new construction permits within the City, revenues obtained from such charges vary based upon construction permitting activity. In February 2007, the City Council and Mayor approved increasing the capacity charge by 19.5% to $3,047 per EDU, which was estimated to provide full cost recovery for Water System expansion projects. The City will be undertaking a cost of service study to review existing capacity charge rates in calendar year 2019. Forecast. The following table presents average capacity charge revenue received between FY 2014 to FY 2018, FY 2019 Budget, and the forecast for FY 2020 through FY 2024. This revenue source represents 2.4 percent of the Water System’s overall revenue receipts. Table 2.5 - Capacity Charges Five-Year Forecast ($ in Millions) FY 2014-2018 Average FY 2019 Budget FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate 0.0%0.0% 4.0% 0.0% 0.0% 0.0% 0.0% Projection $15.5 $12.1 $14.4 $14.4 $14.4 $14.4 $14.4 Metro Cost Projections F-17 2022/04/26 City Council Post Agenda Page 501 of 667 Projected revenues for capacity charges use conservative growth estimates based on historical spending trends from FY 2014 through FY 2018 as shown in Figure 2.6 below. Average capacity fee revenue between FY 2014 and FY 2018 was approximately $15.5 million. Water capacity charges in FY 2019 were budgeted historically low and will be adjusted to reflect historical and projected revenue trends in the FY 2020 budget. Capacity charge revenue is conservatively projected at $14.4 million for FY 2020 through FY 2024. Economic Trends. As previously mentioned, water capacity charges are primarily based on new water connections related to new construction, and are directly influenced by population growth and residential and commercial development. The current population for the City of San Diego is 1.4 million. San Diego's population grew by approximately seven percent between the 2000 Census and the 2010 Census, for an aggregate increase of 84,000. As population continues to increase in the region, the demand for new single and multi-family housing is also expected to increase in order to meet population demands. Table 2.7 presents projected regional population and housing growth for the next 50 years. According to SANDAG, multi-family units will make up over half of the new housing that will need to be built over the next 30 years. As a result, SANDAG forecasts that 40 percent of the total units in the region will be multi-family by 2030. These trends are reflected in the City’s experiences: multi-family units approved and permitted in 2018 were up 150 percent in 2018, while single-family units permitted increased by 47 percent. Similarly, PUD saw significant increases in capacity charge revenues in FY $14.6 $15.8 $14.5 $15.3 $17.5 $12.1 $14.4 $14.4 $14.4 $14.4 $14.4 $0.0 $3.0 $6.0 $9.0 $12.0 $15.0 $18.0 $21.0 $24.0 FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024$ in millionsFigure 2.6 -Water Capacity Charge Revenue Forecast Capacity Charge Revenues Linear (Capacity Charge Revenues) Table 2.7 - Preliminary 2050 Regional Growth Forecast 2000 2020 2030 2040 2050 % Change 2000-2050 Population 1,223,400 1,542,324 1,690,232 1,819,810 1,947,184 49% Housing 469,689 577,416 629,694 675,928 722,718 44% Jobs (incl. military) 777,600 874,678 928,189 982,476 1,042,649 26% Metro Cost Projections F-18 2022/04/26 City Council Post Agenda Page 502 of 667 2018 - approximately 15% above FY 2017 amounts - largely related to residential developments. Though FY 2018 experienced an increase in building permits associated with multi and single-family units, the California Association of Realtors (C.A.R) is forecasting a modest decline in single family units due to a combination of high home prices and eroding affordability. Likewise, multi-family housing is expected to continuing growing until it reaches a peak in 2019 and then to level off as multi-family units under construction near completion. As a result, water capacity charge revenue is projected to remain flat for the next five years. Revenue from Use of Property Revenue from Use of Property includes revenues from non-agricultural lease of land, such as the San Diego Zoo Safari Park; storage by private companies on utility-owned lands; agricultural leases of land in San Pasqual Valley; and telecom leases for cell towers on utility -owned properties. The following table presents average revenue received from use of property between FY 2014 to FY 2018, FY 2019 year-end projections, and forecasted revenue for FY 2020 through FY 2024. This revenue source represents 0.8 percent of the Water Utilities overall revenue receipts. Revenues in this category can vary slightly each year as new lease agreements are entered into while other lease agreements expire. Overall, revenue in this category has declined slightly since FY 2014, and has remained relatively flat at $5.8 million since FY 2016. As a result, $5.8 million in Revenues from Use of Property is projected throughout the PUD Outlook period. Other Revenue The Other Revenue category includes refunds or reimbursements from private parties for damages to utility-owned equipment, buildings, or fire hydrants; refunds from vendors; reimbursements from services provided to other City departments / funds, receipts from the sale of recycled materials or equipment (paper, computers, metal); grant revenue, and interest earnings on pooled investments. The following table presents FY 2018 actuals, the FY 2019 year-end projection and forecasted revenue for FY 2020 through FY 2024. This revenue source represents 2.0 percent of the Water Utilities overall revenue receipts. Table 2.8 - Revenue from Use of Property Five-Year Forecast ($ in Millions) FY 2014-2018 Average FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A N/A 3.6% 0.0% 0.0% 0.0% 0.0% Projection $5.8 $5.6 $5.8 $5.8 $5.8 $5.8 $5.8 Metro Cost Projections F-19 2022/04/26 City Council Post Agenda Page 503 of 667 Other revenue in FY 2020 is projected to increase by 26.2% from FY2019 primarily due to an increase in unrestricted balances and associated interest earnings. Interest earning s are projected to slightly increase between FY 2020 and FY 2021, and then gradually decline over the next three years based on projected fluctuations in the market. However, the Department is projecting to receive approximately $11.5 million in Local Resource Program incentives from Metropolitan Water District for developing local water supplies, which accounts for the increase in revenue in FY 2024. WATER SYSTEM EXPENDITURES Water Utility Fund expenditures are comprised of both personnel and non-personnel expenditures including debt service and other non-discretionary payments. The largest single expenditure of the Water Utility Fund is for water purchases, representing approximately 50 percent of 2018 actual expenditures. These expenditures are therefore discussed separately. The following sections discuss in detail each expenditure category and include a description of the category, projected growth rates, and a discussion of critical strategic expenditures. Water Purchases The City currently imports approximately 85-90% of its water through the CWA. Water purchases contribute to the largest expense in the Water Utility Fund and make up approximately 50 percent of the Water Utility Fund’s expenditure budget. CWA charges a volumetric rate that includes both a commodity rate and a transportation rate. In addition to the volumetric charges the City pays for imported water, both CWA and MWD also levy fixed charges on their member agencies. The following table presents projected costs for purchasing water from CWA, and assumes that 5 percent of demand will be met with local water supplies in FY 2019, and 10 percent for FY 2020 through FY 2024.3 The decrease in growth rates beginning in FY 2021 reflects a decline in CWA’s projected pass through. Though the projected rate remains constant through FY 2024, the cost and amount of water purchased declines in FY 2024 as Phase 1 of the Pure Water Program is expected to be on line and providing 30 mgd of water by February 2024. Personnel Expenditures Personnel expenditures include salaries and wages and fringe benefits. Salaries and wages are comprised of regular salaries and wages, special pay, overtime, step increases, and vacation pay in lieu. Fringe benefits include pension payments or Actuarially Determined Contribution (ADC), flexible benefits, retiree health or Other Post-Employment Benefits (OPEB), workers’ compensation, 3 Rainfall in water year 2018 (October 1, 2017 – September 30, 2018) totaled 3.34 inches, 7 inches below San Diego’s historical average of 10.34 inches, and in FY 2019 the Department projects supplying only 5% of its water demand from local sources. Fiscal Years 2020 and thereafter assume more normal rainfall. Table 3.1 - Water Purchases - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Projection $230.7 $269.2 $268.8 $285.3 $299.9 $315.2 $286.4 Acre Feet Purchased 161,348 185,081 174,326 174,614 174,900 175,183 141,864 Metro Cost Projections F-20 2022/04/26 City Council Post Agenda Page 504 of 667 Supplemental Pension Savings Plan (SPSP), and other fringe benefits. The FY 2019 Adopted Budget for Water Fund salaries and wages was $46.6 million and included 784.18 full-time equivalents (FTE). The following table displays the FY 2019 through FY 2024 personnel expenditure projections by category. Adjustments within the salary and wages category incorporate only those expenditures associated with staff included in the FY 2019 Adopted Budget. Position adds identified for FY 2020-2024 to support critical expenditures are discussed below. Personnel expenditures are projected to increase through the PUD Outlook period primarily due to general salary and special pay increases, retiree healthcare benefits or OPEB, pension payments or ADC, and workers’ compensation expenditure increases. The PUD Outlook does not project for any impact of future MOUs with REOs, and therefore salary and wages forecasts are fixed to the last negotiated amounts. The City of San Diego Fiscal Year 2020-2024 Five-Year Financial Outlook for the General Fund includes a more detailed discussion of the various personnel expenditure components including projection methodologies and assumptions. Critical Operating Expenditures Table 3.3 above identifies additional personnel expenditures, including fringe benefits, for the addition of staff to support enhancements to the Customer Services Office Program, expansion of the Pure Water Program, expansion of Enterprise Asset Management (EAM), and improvements to procurement processes. The PUD Outlook also identifies the transfer of 3.50 full-time equivalents from the Water Utility Fund to the General Fund beginning in FY 2020 to support the facilities maintenance consolidation efforts. The identified funding needs for the Pure Water Program are for the operation and maintenance of new and expanding Pure Water facilities and staffing needs. A total of 45.00 full-time equivalent positions are anticipated to be required by Pure Water in FY 2023. Because most of the position Table 3.2 - Personnel Expenditures - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Budget FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Salary & Wages Projection $43.2 $46.6 $49.0 $49.3 $49.6 $49.4 $49.4 Fringe Benefits Projection $34.6 $34.2 $35.9 $36.8 $36.9 $37.0 $37.2 Table 3.3 - Critical Strategic Expenditures - Personnel Request FTE/Exp FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Customer Services Office FTE 4.00 4.00 4.00 4.00 4.00 Program Support Expense $311,918 $311,918 $311,918 $311,918 $311,918 Pure Water Program FTE 3.00 7.00 44.50 45.00 45.00 Support Expense 296,911 624,407 5,678,266 5,706,387 5,706,387 Facilities Maintenance FTE (3.50) (3.50) (3.50) (3.50) (3.50) Consolidation Expense (270,029) (270,029) (270,029) (270,029) (270,029) EAM Support FTE 0.47 0.47 0.47 0.47 0.47 Expense 47,521 47,521 47,521 47,521 47,521 Supply Chain Warehouse FTE 1.88 1.88 1.88 1.88 1.88 Staffing Expense 220,165 220,165 220,165 220,165 220,165 Total FTE 5.85 9.85 47.35 47.85 47.85 Total Expense $606,485 $933,981 $5,987,840 $6,015,961 $6,015,961 Metro Cost Projections F-21 2022/04/26 City Council Post Agenda Page 505 of 667 classifications identified by the Department’s consultant do not yet exist within the City, projected salary costs were based on industry estimates. Supplies The Supplies category includes costs for chemicals, water meters, pipe fittings, asphalt road materials, machine parts, and low value assets. The following table displays FY 2018 actuals and FY 2019 through FY 2024 projections for the Supplies category. The Supplies category includes various components. Each component has a different growth rate. Growth rates for each category are based on historical analysis and include other adjustments based on known and anticipated events. As a result, the 2.9 percent growth rate that was applied to the Supplies category for FY 2020 through FY 2024 represents a weighted growth rate that was calculated after applying the corresponding growth rate for each component. Critical Operating Expenditures Table 3.5 above identifies increased expenditures associated with the expansion of the Pure Water Program. These expenditures will be necessary as Pure Water facilities come online, and include chemical costs, consumables, pumps, and other materials necessary for operation and maintenance of facilities and equipment. Contracts Contracts are a non-personnel expense category that include the cost of contractual services, professional consultant fees, general government services billing, City services billings, flee t vehicle usage and assignment fees, rental expenses, security services, and other contractual expenses. The table below displays PUD’s FY 2018 actuals and FY 2019 through FY 2024 projections for the Contracts category. Table 3.5 - Critical Strategic Expenditures - Supplies Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion - $25,000 $4,961,096 $7,218,534 $10,462,192 Total Expense - $25,000 $4,961,096 $7,218,534 $10,462,192 Metro Cost Projections F-22 2022/04/26 City Council Post Agenda Page 506 of 667 The Contracts category includes various components that each has different applicable growth rates. Growth rates for each category are based on historical analysis and other adjustments based on known and anticipated events. As a result, the growth rate for the Contracts category represents a weighted growth rate that was calculated after applying the corresponding growth rate for each component. Critical Operating Expenditures Table 3.7 above identifies increased contractual expenditures associated with Phase 1 of the Pure Water Program, and the Water Infrastructure Finance Innovation Act (WIFIA loan annual service fee, as well as expenditures necessary for pump inspections and maintenance, Morena Reservoir outlet tower improvements, consulting services for financial review of the water services cost of service study. Information Technology The Information Technology category includes both discretionary expense s and non-discretionary allocations to the Water Utility Fund. The Information Technology category includes the costs related to hardware and software maintenance, help desk support, and other information technology (IT) services. Table 3.8 below displays the FY 2018 actuals and FY 2019 through FY 2024 projections for the Information Technology category. The projections include estimates of IT costs related to desktop support, networks, data -centers, applications, and systems critical to water treatment plant operations for FY 2019 through FY 2024. All other base IT costs are inflated by the California Consumer Price Index. Table 3.7 - Critical Strategic Expenditures - Contracts Request FTE/Exp FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expense $45,000 $150,000 $663,000 $1,612,200 $3,702,900 Expansion WIFIA Loan Service Expense 25,000 25,000 25,000 25,000 7,500 Fee Pump Inspection and Expense 500,000 - - - - Maintenance Program Morena Outlet Tower Expense 550,000 200,000 - - - Safety Improvements Cost of Service Study Expense 42,000 - - 300,000 387,887 Consulting Services Total Expense $1,162,000 $375,000 $688,000 $1,937,200 $4,098,287 Table 3.8 - Information Technology - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 8.9%7.3%6.4%1.9%0.3%2.5% Projection $5.7 $6.2 $6.6 $7.0 $7.2 $7.2 $7.4 Metro Cost Projections F-23 2022/04/26 City Council Post Agenda Page 507 of 667 Critical Operating Expenditures The Supervisory Control and Data Acquisition (SCADA) Water Distribution System monitors the water distribution facilities and detects and rectifies equipment malfunctions and operation problems. SCADA funding displayed above reflects upgrades needed to implement the next generation of SCADA in an enterprise environment. This is critical to ensuring that water treatment plant operations, public health and regulatory compliance are protected from any system vulnerabilities in older SCADA systems. Other major critical operating expenditures identified are PC replacements; the Treatment Plant Processing System, which is critical to managing and monitoring Water Treatment Plants; EAM Tracking software for costs associated with future maintenance and enhancements of the system, and Laboratory Information Management System (LIMS) which provides tracking and reporting of chemical and biological tests for compliance. Energy & Utilities The Energy and Utilities category includes the Water Fund’s costs for electricity, water services, fuel, and other utility and energy expenses. The following table displays FY 2018 actuals, and FY 2019 through FY 2024 projections for the Energy and Utilities category. The Energy and Utilities category includes various costs. Each cost component has a different applicable rate. Growth rates for energy are based on the Annual Energy Outlook 2018 report prepared by the U.S. Energy Information Administration. Water rates are determined by the Public Utilities Department approved by City Council and reflect the growth rates for potable water sales as presented in Table 2.3 – Water Sales Five-Year Forecast. As a result, the growth rate for the Energy and Utilities category represents a weighted growth rate that was calculated after applying the corresponding growth rate for each component. Table 3.9 - Critical Strategic Expenditures - Information Technology Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 LIMS Implementation $182,900 $108,125 $108,125 $108,125 $108,125 EAM Tracking Software 141,000 141,000 235,000 235,000 235,000 IT Infrastructure Network and Cloud Services 121,050 121,050 31,050 31,050 31,050 IT Roadmap - Modernization of Legacy Systems 180,000 180,000 180,000 180,000 180,000 PC Refresh - - - 675,000 - SCADA Water Distribution System 1,011,827 1,024,727 955,727 955,727 955,727 Treatment Plant Processing System 735,200 447,200 947,200 497,200 497,200 Total Expense $2,371,977 $2,022,102 $2,457,102 $2,682,102 $2,007,102 Table 3.10 - Energy & Utilities - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 0.7%3.2%4.1%3.9%3.6%3.9% Projection $13.5 $13.3 $13.7 $14.3 $14.9 $15.4 $16.0 Metro Cost Projections F-24 2022/04/26 City Council Post Agenda Page 508 of 667 Critical Operating Expenditures Table 3.11 above identifies increased energy and utility expenditures associated with the expansion of the Pure Water Program. These expenditures are necessary as new and expanding Pure Water facilities come online and include increased electricity, water, and natural gas expenditures necessary for the daily operation of facilities. Reserve Contributions The City has established accounts within the Water Utility Fund for four reserve funds: The Emergency Operating Reserve (Operating Reserve), the Secondary Purchase Reserve, the Rate Stabilization Fund Reserve (Rate Stabilization Fund), and the Emergency Capital Reserve (Capital Reserve). The Department maintain these reserve funds in accordance with the City’s reserve policy (the City Reserve Policy). As of June 30, 2018, the Water Utility Fund had estimated total reserves of approximately $130.5 million. Table 3.12 below details reserve targets and projected funding levels. Reserves are projected to be fully funded throughout the PUD Outlook period. The Water Fund Rate Stabilization Reserve Fund is funded above targeted levels; it can be used to provide one -time operating revenue to offset or mitigate the need for sudden or dramatic rate increases. This Outlook does not project use of the Water Fund Rate Stabilization Reserve over its period, but the potential to use the Rate Stabilization Reserve Fund does exist, and will be evaluated as part of the Cost of Service Study that will be prepared in 2019. Table 3.11 - Critical Strategic Expenditures - Energy & Utilities Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion - - $7,111,526 $9,956,136 $14,223,052 Total Expense - - $7,111,526 $9,956,136 $14,223,052 Metro Cost Projections F-25 2022/04/26 City Council Post Agenda Page 509 of 667 Other Expenditures Expenses included in this category are transfers out to other funds, capital expenses, estate taxes, and other miscellaneous expenditures. Debt service obligations, including bond, commercial p aper, state revolving fund (SRF) loan and WIFIA payments, are excluded from this category and are discussed in the Water System Capital Improvement Program section of this report. The following table displays FY 2018 actuals and FY 2019 through FY 2024 projections for the Other Expenditures category. Significant one-time expenditures identified and included in FY 2018 actuals include a one-time transfer to the Department’s newly established inventory fund and a one-time transfer of funds to reflect accounting corrections associated with the Stadium Wetland Mitigation Fund. Critical Operating Expenditures The table above identifies increased expenditures associated with the expansion of the Pure Water Program and the Van Nuys Canyon water main protection project. Pure Water Program expenditures include new laboratory equipment necessary for sampling analysis in support of the expanding program. This Section Intentionally Left Blank Table 3.13 - Other Expenditures - Baseline Expenditures ($ in Millions) FY 2018 Actuals1 FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 0.0%0.0%0.0%0.0%0.0%0.0% Projection1 $3.4 $1.5 $1.5 $1.5 $1.5 $1.5 $1.5 1. Figures exclude debt service payments on bonds, commercial paper, and state revolving fund (SRF) loans, and Water Infrastructure Innovation Act (WIFIA). Table 3.14 - Critical Strategic Expenditures - Other Expenditures Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion $155,000 $678,000 $892,800 $350,000 $150,000 Van Nuys Canyon Water Main Protection Project 500,000 500,000 - - - Total Expense $655,000 $1,178,000 $892,800 $350,000 $150,000 Metro Cost Projections F-26 2022/04/26 City Council Post Agenda Page 510 of 667 Water System Capital Improvement Program The Water System CIP is established to address current and future system needs in a cost-effective manner. The program’s principal drivers are: • implementation of the Pure Water Program; • improving infrastructure to reduce pipeline breaks and emergency repairs; • improving process technology; • expansion of the Water System to accommodate growth; and • compliance with the Federal Safe Drinking Water Act and the Division of Drinking Water (DDW) Compliance Order. Infrastructure improvements generally consist of water treatment plants, pipelines, reservoirs and pump stations, projects related to anticipated growth within the City’s service area, and projects required by or related to applicable State and Federal regulations and orders. The following table shows categories of projects with the estimated cost of expenditures contained in the CIP for the period of Fiscal Years 2020 through 2024. Table 4.1 - Summary of Projected CIP Projects(1)(2)(3) FY 2020 through FY 2024 Water CIP Projects FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 TOTAL (7) Pure Water Program (4)$197.0 $281.5 $204.5 $106.0 $17.1 $806.1 Transmission Pipelines $67.2 $55.7 $62.3 $63.7 $42.3 $291.3 Pipelines $64.3 $71.3 $36.8 $33.8 $46.4 $252.7 Storage Facilities (5)$9.4 $33.1 $38.3 $30.2 $35.0 $146.0 Water Treatment Plants $18.3 $6.5 $0.5 $0.3 $0.0 $25.6 Pump Stations $7.5 $2.7 $8.6 $7.9 $9.1 $35.8 SDG&E Relocation Advance (6)$48.2 $0.0 $0.0 $0.0 $0.0 $48.2 Ground Water Projects $0.5 $2.6 $0.0 $0.4 $1.2 $4.7 Recycled Water $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 Miscellaneous Projects (7)$33.6 $10.6 $2.9 $8.0 $5.9 $61.1 Total (8)$446.1 $464.2 $354.0 $250.3 $157.0 $1,671.6 ($ in Millions) (8) Figures may not add to total due to independent rounding. (1) Projections as of March 2018 for the Water System Baseline CIP and October 2018 for the Pure Water Program. (2) Amounts reflect the aggregate costs of all CIP projects required to satisfy the DDW Compliance Order as well as projects related thereto or necessary for the operation thereof. It is the Department’s expectation that the final awarding of cast iron distribution line replacement will be completed by Calendar Year 2021, thus fulfilling the requirements of the compliance order. For Fiscal Years 2020 through 2024, approximately 4% of the capital program is mandated by the DDW. (3) The projected amounts in Fiscal Year 2020 and onward reflect an annual inflation rate of 3.1% due to anticipated increases in construction costs over time and the expected execution of the CIP. (4) Projections are based on expected completion of the Pure Water Project Phase 1 by the end of February 2024 and include only the portion of the Pure Water Program attributable to the Water System. (5) Storage Facilities include treated and untreated water reservoirs. (7) Miscellaneous Projects include water security projects, solar projects, and the AMI Program. (6) Funding for the SDGE Relocation Advance in Fiscal Year 2020 will be provided by the Fiscal Year 2019 unallocated Fund Balance. Metro Cost Projections F-27 2022/04/26 City Council Post Agenda Page 511 of 667 Capital Improvement Financing Plan Table 4.2 below describes the projected sources of funds to finance the Water System CIP for Fiscal Years 2020 through 2024. As shown in Table 4.2, the PUD anticipates incurring approximately $658.0 million of additional debt obligations in Fiscal Years 2020 through 2024 for the Water System CIP and $683.0 million of additional obligations in Fiscal Years 2020 through 2024 for the Pure Water CIP. Capacity fees and cash are anticipated to fund an additional $331.0 million. The City anticipates to finance the costs of certain projects in the Water System Baseline CIP in the approximate amount of $214.1 million through SRF loans. This includes approximately $17 million from existing SRF loans for which the City has already applied and $204 million from loan s for which the City plans to apply. The proceeds from additional SRF loans will provide funding in Fiscal Years 2020 through 2024. SRF loans are one of the least expensive sources of financing available to the City. If the City is not awarded the additional SRF loans projected over this PUD Outlook period, it will have to evaluate using other financing sources that carry higher interest rates – potentially impacting water rates – and/or postponing various CIP projects. The City anticipates financing approximately $443.5 million of the Baseline Water System CIP through a combination of revenue bonds and commercial paper. It is expected that $14.4 million in funding for the Water System CIP per year will come from capacity fees in FYs 2020 through 2024. Any remaining costs of the Water System Baseline CIP are anticipated to be paid on a pay-as-you-go-basis. The Department anticipates financing up to $614 million of the Pure Water Project through the WIFIA Loan which will provide funding in Fiscal Years 2019 through 2023. The remainder of the projects for Phase 1 of the Pure Water Program are expected to be financed through revenue bonds, commercial Table 4.2 - Sources of Funds for the Water Capital Improvement Program (1) FY 2020 through FY 2024 Source of Funds FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 TOTAL Pure Water CIP Commercial Paper/Revenue Bonds $0.0 $0.0 $0.0 $85.0 $13.0 $98.0 WIFIA Loan (2)$170.7 $236.4 $161.9 $16.0 $0.0 $585.0 Cash $26.3 $45.1 $42.6 $5.0 $4.1 $123.1 Total $197.0 $281.5 $204.5 $106.0 $17.1 $806.1 Baseline CIP Commercial Paper/Revenue Bonds $139.0 $111.6 $67.9 $50.0 $75.1 $443.6 SRF Loans (3)$54.0 $54.8 $59.2 $38.7 $7.3 $214.1 Capacity Fees/Cash $56.1 $16.3 $22.3 $55.6 $57.5 $207.8 Total $249.1 $182.7 $149.5 $144.3 $139.9 $865.5 Total Funding $446.1 $464.2 $354.0 $250.3 $157.0 $1,671.6 ($ in Millions) (3) Includes proceeds from existing SRF loans (approximately $17 million), and additional proceeds through Fiscal Year 2023 (approximately $204 million) for SRF loans to be entered into. (1) Projects are based on expected completion of the Pure Water Project by the end of February 2024. (2) Assumes periodic draw on the WIFIA Loan. Instead of drawing on the WIFIA Loan, the City could also utilize bridge financing instruments (commercial paper notes and/or bond anticipation notes) for some or all of the construction expenses during this period. Metro Cost Projections F-28 2022/04/26 City Council Post Agenda Page 512 of 667 paper, and cash, which includes a State funding allocation of $30 million that is anticipated to be allocated across both Water and Sewer funds in FY 2020. This Section Intentionally Left Blank Metro Cost Projections F-29 2022/04/26 City Council Post Agenda Page 513 of 667 WASTEWATER SYSTEM This section discusses baseline revenue and expenditure projections, upcoming critical operational expenditures, projected capital improvement program needs and financing options for the next five years for the Wastewater System. The Wastewater System is comprised of the Metropolitan and Municipal Utility Funds, collectively known as the “Sewer Revenue Funds”. All revenue and expenditure projections, including CIP are presented as “Sewer Revenue Funds” in the following sections. Wastewater System Revenues The following section provides details of revenue projections for the Wastewater System Sewer Revenue Funds FY 2020-2024 Five-Year Financial Outlook. The primary revenue sources of the Wastewater System are generated from sewer service charges, capacity fees, interest earnings from the investments of available funds, and revenues from the Participating Agencies. This section will discuss in detail each revenue category and will include a description of the revenue source, projected growth rates, and a discussion of future revenue streams and how it impacts the Wastewater System. Sewer Service Charges The Department manages and operates the Sewer System with funds derived primarily from service charges that are deposited in the Sewer Revenue Funds and are used for the operation, maintenance and capital improvement of the Metropolitan Sub-System and the Municipal Sub-System. The City establishes fees based upon the costs incurred by the City to collect, treat and discharge wastewater and pay for required capital improvements. Sewer service charges are based on the characteristics of the wastewater discharged b y each sewer user. All sewer users are charged based upon the amount of flow, solids and organic material which they discharge into the Sewer System. As sewage discharge is not metered, water consumption is used to approximate each customer’s sewage flow. Sewer service charge revenues are comprised of two parts: a base fee and a sewer service charge (flow charge). The base fee is a fixed monthly service fee charged to all customers to recover certain fixed and indirect costs. Since the indirect costs are common to all users, the costs are shared equally by all user meters. The flow charge is based on the amount (flow) and strength of the wastewater discharged to the sewer system, and incorporates allowances for system return that differs by customer class. This adjustment factor recognizes that not all water consumed discharges to the wastewater system. The flow charge for both Single Family Residential (SFR) and Multi Family Residential (MFR) customers include a 95% return to sewer, while Commercial /Industrial (C/I) customers average a 73% return to sewer and vary depending on the type of business. Additionally, the flow charge for SFR customers is based on the least amount of water used during the previous winter and includes a water usage cap of 20 HCF. Metro Cost Projections F-30 2022/04/26 City Council Post Agenda Page 514 of 667 Table 5.1 below displays the existing sewer rates for FY 2019. Forecast. The following table shows the budget and year-end projection for FY 2019 and the forecast for FY 2020 through FY 2024 for revenue from sewer service charges. This revenue source represents approximately 65 percent of the Sewer Revenue Funds overall revenue receipts. The forecast assumes a 0.25 percent increase in accounts and reflects projected rate increases beginning in FY 2021 through FY 2024. Discussion. The Department last presented a wastewater rate case in 2006 (the 2006 Rate Case). The 2006 Rate Case covered four years and was based on comprehensive forecasted annual operations and maintenance costs including capital costs expenditures. The 2006 Rate Case covered Fiscal Years 2007 through 2010 and was approved by the City Council in February 2007. The rate case included rate increases of 8.75% on May 1, 2007, 8.75% on May 1, 2008, 7.00% on May 1, 2009, and 7.00% May 1, 2010. In May of 2018, The department conducted a FY 2018 Wastewater Financial Plan Study and Cost of Service Review Report (the Study) prepared by Raftelis Financial Consultants, Inc. (Raftelis). The objectives of the study were to review current wastewater rates and the cost of providing service to determine if rates need to increase or be adjusted based on revenue requirements and /or updated flow characteristics. The Study reviewed and developed a financial plan for the wastewater system to ensure financial sufficiency, meet operation and maintenance (O&M) costs, and ensure sufficient funding for capital improvements. Based on the Study, Raftelis found that existing wastewater revenues were sufficient and additional rate adjustments are not necessary to meet operating fund requirements for FY 2019 and FY 2020. Table 5.2 - Sewer Service Charge Five-Year Forecast ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A -1.4%0.25% 3.26% 5.26% 5.25% 5.78% Projection $274.6 $270.7 $271.4 $280.2 $295.0 $310.5 $328.4 Metro Cost Projections F-31 2022/04/26 City Council Post Agenda Page 515 of 667 However, construction of Phase 1 of the Pure Water Program is expected to begin in FY 2020 and projected rate increases are anticipated to be necessary to fund the Pure Water Program beyond FY 2020 in addition to the baseline CIP. Accordingly, this PUD Outlook assumes preliminary wastewater rate increases of 3% in FY 2021, 5% in FY 2022 and 2023, and 5.5% in FY 2024. Actual rate increase will be determined through a cost of service study and presented to the City Council for review. For more details on projected financing for the CIP, refer the Wastewater Capital Improvement program section of this report. Sensitivity Analysis. While these projections represent PUD’s best estimate of wastewater revenues throughout the PUD Outlook period, actual results will depend on the factors discussed above. The impact in revenue from potential rate increases ranges from $2.8 to $3.2 million for each percent added or subtracted from projected rate increases depending on the year in which sewer service charges are adjusted. Adjustments to projected rates in earlier years would compound this amount. Wastewater Capacity Charges Background. Capacity charges are development fees imposed on permits for new or expanded wastewater connections, and are based on an estimate of the increase in wastewater consumption as measured by equivalent dwelling units. Capacity charge proceeds are used to construct, improve and expand the Wastewater System to accommodate the additional business of such added dwellings or commercial or industrial units. As with water capacity charges, wastewater capacity charges can be applied only for the purpose of paying costs associated with capital expansion, bonds, contracts, or other indebtedness of the Wastewater System related to expansion. Because capacity charges are primarily collected on new construction within the City, revenues obtained from such charges vary based upon construction activity. In February 2007, the City Council and Mayor approved raising the capacity charge to $4,124 per Equivalent Dwelling Unit (“EDU”), which was estimated to provide for full cost recovery for Wastewater System expansion projects. The City will be undertaking a cost of service study in FY 2020 to review existing capacity rates. Forecast. The following table presents wastewater capacity charge revenue received between FY 2014 to FY 2018, FY 2019 Budget and the forecast for FY 2020 through FY 2024 for revenue from sewer capacity charges. This revenue source represents 5 percent of the Wastewater System’s overall revenue receipts. Projected revenues for wastewater capacity charges use conservative growth estimates based on spending trends from FY 2014 through FY 2018 as shown in Figure 1 below and projected construction FY 2014-2018 Average FY 2019 Budget FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A N/A 7.4% 0% 0% 0%-2.9% Projection $19.9 $16.3 $17.5 $17.5 $17.5 $17.5 $17.0 Table 5.3- Capacity Charges Five-Year Forecast ($ in Millions) Metro Cost Projections F-32 2022/04/26 City Council Post Agenda Page 516 of 667 permitting activity. Average wastewater capacity fee revenue between FY 2014 and FY 2018 was approximately $19.9 million. However, due to a projected decrease in the housing market beginning in FY 2020, wastewater capacity charge revenue was conservatively adjusted downward. The wastewater capacity charge budget for FY 2019 has been budgeted historically low and may be adjusted to reflect historical and projected revenue trends in the FY 2020 budget. Economic Trends. As previously mentioned, wastewater capacity charges are primarily based on new wastewater connections related to new construction and are directly influenced by population growth and residential and commercial development. As discussed in the Water Capacity Charges section of this report, San Diego's population has grown by approximately seven percent between the 2000 Census and the 2010 Census for an aggregate increase of 84,000. As population continues to increase in the region, the demand for new single and multi-family housing is also expected to increase in order to meet population demands. For a more detailed discussion on population and housing growth, refer to the Water Capacity Charges section of this report. Other Revenue The primary component of the Other Revenue category is revenues received from Participating Agencies for sewer system charges. These represent 70.1 percent of FY 2018 revenues in the Other Revenue category. The Other Revenue category also includes revenue received from the Water Utility Fund pertaining to the sales of reclaimed water, interest on pooled investments, reimbursements from services provided to other City departments / funds, grants revenue, and other miscellaneous revenues. The following table displays the FY 2019 through FY 2024 projections for the Other Revenue category. $20.30 $21.80 $18.40 $19.60 $19.50 $19.50 $17.50 $17.50 $17.50 $17.50 $17.00 $0.0 $3.0 $6.0 $9.0 $12.0 $15.0 $18.0 $21.0 $24.0 $27.0 FY 2014FY 2015FY 2016FY 2017FY 2018FY 2019FY 2020FY 2021FY 2022FY 2023FY 2024$ in millionsFigure 5.1 -Sewer Capacity Charge Revenue Forecast Capacity Charge Revenues Linear (Capacity Charge Revenues) Metro Cost Projections F-33 2022/04/26 City Council Post Agenda Page 517 of 667 No growth rate is applied to the Other Revenue category for the PUD Outlook period. However, revenues are projected to increase from FY 2020 through FY 2024 based on historical analysis and other adjustments made on known and anticipated events. The projected increases primarily consist of sewer system charges to Participating Agencies to reflect anticipated increases in shared costs of Pure Water Program expenses, and projected increases in pooled investments. Per their agreement with the City, Participating Agencies pay their actual costs for service and capital expenses; if projected expenditures associated with the Participating Agencies increase or decrease, this will ultimately be offset by increased or decreased revenue from the Participating Agencie s. This Section Intentionally Left Blank Table 5.4 - Other Revenue Five-Year Forecast ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Participating Agencies Growth Rate N/A 0.0%0.0%0.0%0.0%0.0%0.0% Projection $70.1 $75.0 $80.0 $85.0 $90.0 $95.0 $100.0 Other Revenue Growth Rate N/A 0.0%0.0%0.0%0.0%0.0%0.0% Projection $28.7 $17.5 $23.7 $22.6 $19.8 $18.3 $18.6 Metro Cost Projections F-34 2022/04/26 City Council Post Agenda Page 518 of 667 WASTEWATER SYSTEM EXPENDITURES The Wastewater System expenditures are comprised of both personnel and non-personnel expenditures including debt service and other non-discretionary payments. The following sections will discuss in detail each expenditure category and will include a description of the expenditure, projected growth rates, and a discussion of critical strategic expenditures. Personnel Expenditures Personnel expenditures includes the salaries and wages category as well as fringe benefits category. The salaries and wages category is comprised of regular salaries and wages, special pays, overtime, step increases, and vacation pay in lieu, whereas the fringe benefits category includ es pension payments or Actuarially Determined Contribution (ADC), flexible benefits, retiree health or Other Post- Employment Benefits (OPEB), workers’ compensation, Supplemental Pension Savings Plan (SPSP), and other fringe benefits. The FY 2019 Adopted Budget for the Sewer Funds salaries and wages was $55.3 million and included 871.74 full-time equivalents (FTE). The following table displays the FY 2019 through FY 2024 personnel expenditure projections by category. Adjustments within the salary and wages category incorporate only those expenditures associated with staff included in the FY 2019 Adopted Budget. Position additions identified for FY 2020-2024 to support critical strategic expenditures are discussed below. Personnel expenditures are projected to increase through the Outlook period primarily due to general salary and special pay increases, retiree healthcare benefits or OPEB, pension payments or ADC, and workers’ compensation expenditure increases. The PUD Outlook does not project for any impact of future MOUs with REOs, and therefore salary and wages forecasts are fixed to the last negotiated amounts. This Section Intentionally Left Blank Table 5.5 - Personnel Expenditures - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Budget FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Salary & Wages Projection $49.8 $55.3 $58.3 $58.9 $58.9 $58.9 $58.8 Fringe Benefits Projection $39.0 $40.2 $42.2 $43.1 $43.3 $43.4 $43.6 Metro Cost Projections F-35 2022/04/26 City Council Post Agenda Page 519 of 667 Critical Strategic Expenditures Table 5.6 above identifies increased personnel expenditures, including fringe benefits, for the addition of staff to support enhancements to the Customer Services Office Program, expansion of inventory asset management (EAM), and improvements to procurement processes. The PUD Outlook also identifies the transfer of 4.50 full-time equivalents from the Water Utility Fund to the General Fund beginning in FY 2020 to support the facilities maintenance consolidation efforts. The identified funding needs for the Pure Water Program are for the operation and maintenance of new and expanding Pure Water facilities and staffing needs. A total of 13.00 full-time equivalent positions were identified to be required by FY 2022. Because these position classifications identified by the Department’s consultant do not yet exist within the City, projected salary costs were based on industry estimates. Supplies The Supplies category includes costs for chemicals, machine parts, electrical materials, laboratory supplies, and pipe fittings. The following table displays the FY 2019 through FY 2024 projections for the Supplies category. The Supplies category includes various costs. Each cost component has a different applicable rate. Growth rates for each category are based on historical analysis, and other adjustments made on known and anticipated events. As a result, the growth rate for the Supplies category represents a weighted growth rate that was calculated after applying the correspondi ng growth rate for each component. Table 5.6 - Critical Strategic Expenditures - Personnel Request FTE/Exp FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Customer Services Office Program FTE 4.00 4.00 4.00 4.00 4.00 Support Expense $311,918 $311,918 $311,918 $311,918 $311,918 Facilities Maintenance Consolidation FTE (4.50) (4.50) (4.50) (4.50) (4.50) Expense (347,676) (347,676) (347,676) (347,676) (347,676) EAM Support FTE 0.53 0.53 0.53 0.53 0.53 Expense 53,588 53,588 53,588 53,588 53,588 Supply Chain Warehouse Staffing FTE 2.12 2.12 2.12 2.12 2.12 Expense 248,271 248,271 248,271 248,271 248,271 Pure Water Program Expansion FTE - - 13.00 13.00 13.00 Expense - - 1,636,751 1,636,751 1,636,751 Total FTE 2.15 2.15 15.15 15.15 15.15 Total Expense $266,101 $266,101 $1,902,851 $1,902,851 $1,902,851 Table 5.7 - Supplies - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 5.1%3.7%3.7%3.7%3.7%3.7% Projection $23.6 $24.8 $25.7 $26.6 $27.6 $28.6 $29.7 Metro Cost Projections F-36 2022/04/26 City Council Post Agenda Page 520 of 667 Critical Strategic Expenditures Table 5.8 identifies increased expenditures associated with the expansion of the Pure Water Program. These expenditures are necessary as new and expanding Pure Water facilities come online and include chemical costs, consumables, repair and replacement parts for eq uipment, and other materials necessary for operation and maintenance of facilities and equipment. Contracts Contracts are a non-personnel expense category that includes the cost of professional consultant fees, general government services billing, City services billings, fleet vehicle usage and assignment fees, contractual services, other contractual expenses. The following table displays the FY 2019 through FY 2024 projections for the Contracts category. The Contracts category includes various costs. Each cost component has a different applicable rate. Growth rates for each category are based on historical analysis, and other adjustments made on known and anticipated events. As a result, the growth rate for the Contracts category represents a weighted growth rate that was calculated after applying the corresponding growth rate for each component. Critical Strategic Expenditures Table 5.8 - Critical Strategic Expenditures - Supplies Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion 10,000 $5,000 $3,027,235 $4,327,993 $6,049,470 Total Expense 10,000 $5,000 $3,027,235 $4,327,993 $6,049,470 Table 5.9 - Contracts - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 3.5%3.5%3.5%3.6%3.6%3.6% Projection $75.7 $74.4 $77.1 $79.8 $82.7 $85.6 $88.7 Table 5.10 - Critical Strategic Expenditures - Contracts Request FTE/Exp FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expense -$ -$ $3,060,560 $5,549,460 $8,442,569 Expansion Digester Cleanings Expense 2,550,000 - 3,300,000 - 1,100,000 Participating Agencies -Expense - 3,600,000 4,000,000 3,000,000 3,000,000 True-Up Payments Cost of Service Study Consulting Expense - - - 300,000 377,881 Services Hale Avenue Resource Expense (600,000.00) (600,000.00) (600,000.00) (600,000.00) (600,000.00) Recovery Facility Payment Total Expense $1,950,000 $3,000,000 $9,760,560 $8,249,460 $12,320,450 Metro Cost Projections F-37 2022/04/26 City Council Post Agenda Page 521 of 667 The table above identifies increased contractual expenditures associated with Phase 1 of the Pure Water Program, various wastewater digester cleanings, true-up payments to Participating Agencies for their proportionate costs of the sewer system, and consulting services for financial review of the water services cost of service study. The PUD Outlook also identifies expenditure reductions of $600,000 beginning FY 2020 for contractual costs associated with Hale Avenue Resource Recovery Facility due to the completion of the project. Information Technology The Information Technology category includes both discretionary expense and non -discretionary allocations to the Sewer Revenue Funds. The Information Technology category includes the costs related to hardware and software maintenance, help desk support, and other information technology (IT) services. Table 5.11 below displays the FY 2019 through FY 2024 projections for the Information Technology category. The projections include estimates of IT costs related to desktop support, networks, data -centers, applications, and systems critical to wastewater treatment plant operations for FY 2019 through FY 2024, and all other base IT costs are inflated by the Calif ornia Consumer Price Index. Critical Strategic Expenditures Table 5.12 above identifies critical needs associated with maintaining and improving existing hardware and software. The expenditures identified in Table 5.12 primarily consist of costs associated with COMNET system support. COMNET serves as a communication network that utilizes a process control system to coordinate operations at different wastewater locations such as Point Loma Wastewater Treatment Plant, North City Reclamation Plant, and bio solid centers and pump station s. Other critical operating expenditures identified are PC replacements; funding to retire/modernize legacy systems (IT Roadmap) and for general IT needs/enhancements; EAM Tracking software for Table 5.11 - Information Technology - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 11.3%7.7% 11.1%2.2%1.0%2.7% Projection $7.3 $8.1 $8.7 $9.7 $9.9 $10.0 $10.3 Table 5.12 - Critical Strategic Expenditures - Information Technology Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 LIMS Implementation $182,900 $108,125 $108,125 $108,125 $108,125 EAM Tracking Software 159,000 159,000 265,000 265,000 265,000 IT Infrastructure Network and Cloud 147,950 147,950 37,950 37,950 37,950 Services IT Roadmap - Modernization of Legacy 220,000 220,000 220,000 220,000 220,000 Systems PC Refresh - - - 825,000 - COMNET System Support 2,920,437 2,716,333 2,716,333 2,716,333 2,716,333 IT Run the Business & Enhancements 359,890 359,890 359,890 359,890 359,890 Total Expense $3,990,177 $3,711,298 $3,707,298 $4,532,298 $3,707,298 Metro Cost Projections F-38 2022/04/26 City Council Post Agenda Page 522 of 667 costs associated with future maintenance and enhancements of the system, and Laboratory Information Management System (LIMS) which provides tracking and reporting of chemical and biological tests for compliance. Energy & Utilities The Energy and Utilities category includes the Water Fund’s costs for electricity, wa ter services, fuel, and other utility and energy expenses. The following table displays the FY 2019 through FY 2024 projections for the Energy and Utilities category. The Energy and Utilities category includes various costs. Each cost component has a dif ferent applicable rate. Growth rates for each category are based on the Annual Energy Outlook 2018 report prepared by the U.S. Energy Information Administration with the exception of sewer service charges, which are based on the 2006 cost of service study and projected rates. As a result, the growth rate for the Energy and Utilities category represents a weighted growth rate that was calculated after applying the corresponding growth rate for each component. Critical Strategic Expenditures Table 5.14 above identifies increased energy and utility expenditures associated with the expansion of the Pure Water Program. These expenditures are necessary as new and expanding Pure Water facilities come online and include expenditures for the Morena pump station, North City Water Reclamation Plant, and Metro Biosolids Center facilities. Reserve Contributions The City has established accounts within the Sewer Revenue Fund for three reserve funds: The Emergency Operating Reserve (Operating Reserve), the Rate Stabilization Fund Reserve (Rate Stabilization Fund), and the Emergency Capital Reserve (Capital Reserve). The Department operates these reserve funds in accordance with the City’s reserve policy (the City Reserve Policy). As of June 30, 2018, the Sewer Revenue Fund had estimated total reserves of approximately $114.5 million. Table 5.15 below details reserve targets and projected fund levels. Reserves are projected to be fully funded throughout the Outlook period. The Sewer Fund’s Rate Stabilization Reserve Fund is funded above targeted levels; it can be used to provide one -time operating revenue to offset or mitigate the need for sudden or dramatic rate increases. This PUD Outlook does project use of the Sewer Fund’s Table 5.13 - Energy & Utilities - Baseline Expenditures ($ in Millions) FY 2018 Actuals FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 2.0%2.8%3.5%3.5%3.3%3.7% Projection $19.9 $20.3 $20.9 $21.6 $22.4 $23.1 $24.0 Table 5.14 - Critical Strategic Expenditures - Energy & Utilities Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion - - $2,897,397 $4,093,075 $5,794,794 Total Expense - - $2,897,397 $4,093,075 $5,794,794 Metro Cost Projections F-39 2022/04/26 City Council Post Agenda Page 523 of 667 Rate Stabilization Reserve in FY 2020 ($5 million), FY 2021 ($5 million), FY 2022 ($15 million) and FY 2023 ($15 million) to absorb increasing costs. Actual use of the Rate Stabilization Reserve Fund will be evaluated as part of future Cost of Service Studies. Other Expenditures Expenses included in this category are transfers out to other funds, capital expenses, and other miscellaneous expenditures. Debt service obligations, including bond and state revolving fund (SRF) loan payments, are excluded from this category and are discussed in detail within the Wastewater System Capital Improvement Program section of this report. The following table displays the FY 2019 through FY 2024 projections for the Other Expenditures category. Significant one-time expenditures identified and included in the FY 2018 actuals include $2.0 million in expenditures for a one-time transfer to the department’s newly established inventory fund as part of the EAM project. Critical Strategic Expenditures The table above identifies increased expenditures associated with the expansion of the Pure Water Program. These expenditures include new laboratory equipment necessary for sampling analysis in support of the expanding program. Table 5.15 - Reserve Target Levels ($ in Millions) FY 2019 Projection Fiscal Year 2020 Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 Fiscal Year 2024 Operating Reserve Target ($)$47.8 $46.4 $47.9 $51.6 $52.9 $55.2 Operating Reserve Level ($)$48.3 $48.3 $48.3 $51.6 $52.9 $55.2 Rate Stabilization Fund Target ($)$18.0 $17.3 $17.6 $18.3 $19.3 $20.3 Rate Stabilization Fund Level ($)$75.3 $70.3 $65.3 $50.3 $35.3 $35.3 Capital Reserve Target ($)$10.0 $10.0 $10.0 $10.0 $10.0 $10.0 Capital Reserve Level ($)$10.0 $10.0 $10.0 $10.0 $10.0 $10.0 Table 5.16 - Other Expenditures - Baseline Expenditures ($ in Millions) FY 2018 Actuals(1) FY 2019 Projection FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Growth Rate N/A 0.0%0.0%0.0%0.0%0.0%0.0% Projection(1)$4.3 $2.5 $2.5 $2.5 $2.5 $2.5 $2.5 (1) Figures exclude debt service and state revolving fund (SRF) loan expenditure payments. Table 5.17 - Critical Strategic Expenditures - Other Expenditures Request FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Pure Water Program Expansion $65,000 - - $17,000 - Total Expense $65,000 - - $17,000 - Metro Cost Projections F-40 2022/04/26 City Council Post Agenda Page 524 of 667 Wastewater System Capital Improvement Program The Wastewater System CIP is established to address current and future system needs in a cost- effective manner. While operation and maintenance expenditures support day-to-day operations, the Wastewater System Capital Improvement Program (CIP) supports the infrastructure for reliable wastewater collection, treatment and replacement of existing wastewater assets. As a result, PUD has developed a long-term CIP that identifies future facility needs. Furthermore, in order to improve its aging infrastructure, the City works towards the replacement and rehabilitation of 45 miles of sewer pipeline each year. The Wastewater System’s CIP for this Outlook period includes improvements to the Wastewater System infrastructure, as well as Phase 1 of the multi-year Pure Water Program. The following table shows categories of projects with the estimated cost of expenditures contained in the CIP for the period of Fiscal Years 2020 through 2024. This Section Intentionally Left Blank Wastewater CIP Projects FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Total Pure Water Program (3)$190.0 $220.2 $124.5 $38.4 $5.9 $579.0 Trunk Sewers $14.3 $32.4 $48.7 $37.9 $24.6 $157.9 Muni Pump Station $0.3 $0.6 $7.6 $12.5 $29.9 $50.9 Sewer Pipelines $57.8 $45.5 $63.1 $57.1 $54.7 $278.2 Miscellaneous Projects $8.5 $3.2 $0.5 $4.1 $1.2 $17.5 SDG&E Relocation $33.6 $0.0 $0.0 $0.0 $0.0 $33.6 Sewer Treatment Plants $28.3 $32.5 $19.0 $8.3 $1.5 $89.7 Large Sewer Pump Station $24.8 $11.3 $3.8 $8.4 $8.2 $56.6 Total (4)$357.7 $345.7 $267.2 $166.8 $126.0 $1,263.4 (2) The projected amounts in Fiscal Years 2019 and onward reflect an annual inflation rate of 3.1% due to anticipated increases in construction costs over time and the expected execution of the CIP. (3) Projections are based on expected completion of the Pure Water Project by the end of February 2024 and include only the portion of the Pure Water Program attributable to the Wastewater System. (4) Figures may not add to total due to independent rounding. Table 5.18 - Summary of Projected CIP Projects (1) (2) FY 2020 through FY 2024 ($ in Millions) (1) Projections as of March 2018 for the Wastewater System Baseline CIP and October 2018 for the Pure Water Program. Metro Cost Projections F-41 2022/04/26 City Council Post Agenda Page 525 of 667 The Capital Improvement Financing Plan Table 5.19 below describes the projected sources of funds to finance the Wastewater System CIP for Fiscal Years 2020 through 2024. The Department anticipates financing up to $464 million for Wastewater’s portion of the Pure Water Project through low-interest State Revolving Fund (SRF) loans which will provide funding in Fiscal Years 2020 through 2022. The remainder of the costs for Phase 1 of the Pure Water Program are expected to be financed through revenue bond financing (short-term and/or long-term), and cash, which includes a State funding allocation of $30 million that will be allocated to both Water and Wastewater fund costs. The State funding allocation is anticipated to be available for encumbrance or expenditure through June 30, 2021. As noted in the discussion of the Water System CIP, SRF loans are one of the least expensive sources of financing available to the City. Financing from anticipated SRF loans represents a significant portion of funding for the Wastewater System CIP, and is anticipated to provide the majority of funding for Wastewater’s Pure Water expenses. If the City is not awarded the SRF loans projected over this Outlook period, it will need to seek financing sources that carry higher interest rates. Such financing sources could impact projected sewer service charge increases. The City has existing SRF loans which will be used to finance approximately $41 million of Wastewater System Baseline CIP in Fiscal Years 2020 through 2023. Additionally, the City anticipates financing approximately $318 million of the Wastewater System Baseline CIP through revenue bonds in Fiscal Years 2022 through 2024. It is expected that $16 million in funding for Wastewater System CIP will come from capacity fees in Fiscal Years 2020 thr ough 2024. Any remaining costs of the Wastewater System Baseline CIP will be paid on a pay-as-you-go-basis. Projected funding for Wastewater’s Pure Water and Baseline CIP is supported in Fiscal Years 2020 and 2021 by currently approved Wastewater rates, and by projected rates for Fiscal Years 2022 through 2024. Table 5.19 - Sources of Funds for the Wastewater Capital Improvement Program (1) FY 2020 through FY 2024 Source of Funds FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 TOTAL Pure Water CIP Revenue Bond Financing $0.0 $0.0 $25.0 $8.0 $0.0 $33.0 State Grants $12.7 $0.0 $0.0 $0.0 $0.0 $12.7 SRF $239.9 $218.6 $5.7 $0.0 $0.0 $464.2 Cash (62.6) (2)$1.6 $93.8 $30.4 $5.9 $69.1 Total $190.0 $220.2 $124.5 $38.4 $5.9 $579.0 Baseline CIP Revenue Bond Financing $0.0 $0.0 $120.0 $108.0 $90.0 $318.0 SRF Loans (3)$22.3 $14.0 $4.2 $0.6 $0.0 $41.0 Capacity Fees/Cash $145.4 $111.5 $18.6 $19.9 $30.1 $325.4 Total $167.7 $125.5 $142.8 $128.4 $120.1 $684.5 Total Funding $357.7 $345.7 $267.2 $166.8 $126.0 $1,263.4 (3) Includes proceeds from existing SRF loans (approximately $41 million), and additional proceeds through Fiscal Year 2024 (approximately $464 million) for SRF loans to be entered into. ($ in Millions) (1) Projects are based on expected completion of the Pure Water Project by the end of February 2024. (2) The negative amount in the FY 2020 Cash line is offsetting SRF proceeds for prior year Pure Water expenditures Metro Cost Projections F-42 2022/04/26 City Council Post Agenda Page 526 of 667 APPENDIX G  Cost Escalation Factors  2022/04/26 City Council Post Agenda Page 527 of 667 General Cost Escalators Non‐Public SafetyThese are the cost escalators included in the City's Long‐term Financial Plan.  The City does not have drafted policies for cost escalators.   Expenditure categories FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025Personnel CostsNotes:Salaries 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Assumes a 2% Increase beginning in FY2020 for all groups throughout forecast periodHealth Insurance/Flex benefits5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Assumes a 5% Miscellaneous Increase in Flex benefitsPensionNormal Costs (Personnel)1.8% 9.8% 2.8% 2.7% 2.8% 2.7%Projections based on 6/30/17 CalPERs Valuation Report.  See Pension tab for calculations. Unfunded Accrued Liability (UAL) 13.9% 8.5% 8.9% 6.8% 3.6% 4.9%Projections based on 6/30/17 CalPERs Valuation Report.  See Pension tab for calculations. Supplies and ServicesOperating Supplies8.0% 8.0% 7.0% 2.0% 2.0% 2.0%Assumes large increases in FY2020 to FY2022 related to increase in hourly wages.Contracts8.0% 8.0% 7.0% 2.0% 2.0% 2.0%Assumes large increases in FY2020 to FY2022 related to increase in hourly wages.IT Expenses2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Assumes a 2.0% increase per year, similar to assumption for Internal Service Funds.UtilitiesEnergy & Utilities5.0% 5.0% 5.0% 5.0% 5.0% 5.0%Assumes a 5.0% increase per year.CapitalEquipment (Capital not CIP)MiscellaneousAssumes a 2.0% increase per year.Other Expenses2.0% 2.0% 2.0% 2.0% 2.0% 2.0%Cost Escalation FactorsG-12022/04/26 City Council Post Agenda Page 528 of 667 CY_ORIGINAL_BUD20212022202320242025Salaries3,042,707.00 3,103,561 3,165,632 3,228,945 3,293,5243,359,394Health Insurance735,443.00 772,215                    810,826                   851,367              893,936             938,632                        pensions1,218,578.00 1,338,266                1,375,068               1,412,883          1,451,737          1,491,660                     Total4,996,728.00 5,214,042.35 5,351,526.67 5,493,194.83 5,639,196.51 5,789,686.47Percent Change ‐ All Costs4.35%2.64% 2.65% 2.66%2.67%Salaries Escalation2%2%2%2%2%Health Insurance Escalation5%5%5%5%5%Pension Escalation9.8%2.8%2.7%2.8%2.7%Cost Escalation FactorsG-22022/04/26 City Council Post Agenda Page 529 of 667 APPENDIX H  ENR 20‐Cities Index  2022/04/26 City Council Post Agenda Page 530 of 667 Cost Indices: ENR - 20 City Annual Average Year Construction Cost Index 2000 6,221 2001 6,342 2002 6,538 2003 6,695 2004 7,115 2005 7,446 2006 7,751 3 Year 2.95% Compound Average 2007 7,967 Annual Change 2008 8,310 2009 8,570 5 Year 3.20% Compound Average 2010 8,799 Annual Change 2011 9,070 2012 9,308 10 Year 2.90% Compound Average 2013 9,547 Annual Change 2014 9,806 2015 10,035 2016 10,338 2017 10,737 2018 11,062 2019 11,381 11/1/2019 ENR Cost Indexes % Change ENR 20 Cities Index H-1 2022/04/26 City Council Post Agenda Page 531 of 667 27368 Via Industria, Suite 200 Temecula, California 92590-4856 800.755.6864 | Fax: 888.326.6864 951.587.3500 | Fax: 951.587.3510 www.willdan.com 2022/04/26 City Council Post Agenda Page 532 of 667 ECT: Sewer Service Revenue Fund Reserve Policy ADOPTED BY: 2013-265 PURPOSE: POLICY EFFECTIVE NUMBER DATE PAGE 220-04 12/17/13 1 of 4 DATED: December 17, 2013 Public entities accumulate and maintain adequate reserves levels to help ensure both financial stability and the ability to provide core services during difficult times. Adequately funded reserves allow for: 1) funding infrastructure replacement, 2) economic uncertainties and other financial hardships; 3) future debt and capital obligations, 4) cash flow requirements, 6) improved credit ratings, 5) unfunded mandates including costly regulatory requirements. BACKGROUND: The City's Sewer Enterprise Funds account for specific services funded directly by fees and charges users of the City's sewer system. These funds are intended to be self-supporting as well as restricted and cannot be used for other City services. They account for revenues and expenses related to the City`s sewer programs; including maintenance and expansion of the City's conveyance system and payment of San Diego Metro wastewater treatment costs. The Sewer Service Revenue Enterprise Fund accounts for revenue collected from monthly sewer service charges for all properties that are connected to the City's sewer system. These funds can only be used for sewer related operations and maintenance. The primary use of these funds is payment for the City's annual San Diego Metropolitan Sewer Capacity and to fund maintenance and operational costs associated with the sewer collection system. The Government Finance Officers Association (GFOA), an international organization that promotes the professional financial management of governments for the public interest, recommends maintaining minimum reserve balances. A government's particular situation may require levels of reserves significantly in excess of their recommended minimum levels. Cities with higher reserve levels are better positioned to protect public services during economic downturns. GFOA recommends that in establishing a policy governing the level of reserves or working capital in enterprise funds; a government should consider a variety, of factors, including but not limited to the following: The predictability of its revenues and the volatility of its expenditures (i.e. higher levels of reserves may be needed if significant revenue sources are subject to unpredictable fluctuations or if operating expenditures are highly volatile.) Liquidity (i.e. a disparity between when financial resources actually become available to make payments and the average maturity of related liabilities ma}require that a higher level of resources be maintained). Designations (i.e. governments may wish to maintain higher levels of reserves to compensate for any portion of available fund balance already designated for a specific purpose). April 26, 2022 4/26/22 2022/04/26 City Council Post Agenda Page 533 of 667 BJECT: Sewer Service Revenue Fund Reserve Policy ADOPTED BY: 2013-265 POLICY: POLICY EFFECTIVE NUMBER DATE PAGE 220-04 12/17/13 2 of 4 DATED: December 17, 2013 This Policy establishes four distinct reserves within the Sewer Service Revenue Fund: 1. Working Capital and Rate Stabilization Reserve 2. Emergency Reserve 3. Vehicle Replacement Reserve 4. U.S. Environmental Protection Agency (USEPA) Permit Renewal Liability Reserve Working Capital and Rate Stabilization Reserve Working Capital and Rate Stabilization reserves in the Sewer Service Revenue Fund will be restricted to maintaining and operating the wastewater collection system and paying treatment charges to City of San Diego Metropolitan Wastewater ("Metro'). The reserve will be funded from revenues accumulated in the Sewer Service Revenue Fund. It is intended to accommodate any natural variability in revenues and expenditures, including potential disruptions of cash flows due to varied billing methodology, short tern fluctuations and annual cycles. The reserve will also assist in addressing shortfalls which may occur due to unanticipated cost increases in labor or energy and other consumption based goods and services, such as wastewater treatment services provided by Metro. The reserves represent unrestricted resources available for appropriation by the City Council addressing unforeseen needs for sewer services. The Working Capital and Rate Stabilization Reserves will assist the City in addressing the following items: Rate Stabilization — the reserves will allow the City the flexibility to "smooth" rates and phase increases in over multiple years, which is prudent given the potential variability in the City's payments to Metro. Revenue Collection Fluctuations - the reserves will be used to protect the City from natural fluctuations in revenue and expenditure cycles which is prudent given that the City bills customers at different points in time but incurs expenses continuously throughout the year. Rates of delinquencies — delays in collection of outstanding revenues. Payroll cycles — the timing of a fixed cash requirement for payroll, as related to the timing of revenue cycles. Unanticipated expenses - expenses whose characteristics make accurate estimation difficult, such as increases in wastewater treatment services provided by the City of San Diego, energy costs, labor benefits and other consumption based goods and services. The City shall maintain a Sewer Revenue reserve equivalent to 90 days of operating expenditures and a Rate Stabilization reserve equivalent to 90 days of operating expenditures for a minimum combined total of 180 days and a maximum reserve balance of 125% of the minimum balance. 4/26/22 April 26, 2022 2022/04/26 City Council Post Agenda Page 534 of 667 SUBJECT: Sewer Service Revenue Fund Reserve POLICY EFFECTIVE Policy NUMBER DATE PAGE 220-04 12/17/13 3 of 4 ADOPTED BY: 2013-265 DATED: December 17, 2013 If funds are appropriated from the Sewer Revenue Working Capital and Rate Stabilization Reserves. the funds should be replenished in the budget process during subsequent fiscal years to the minimum reserve balance. If the magnitude of the event caused the Sewer Revenue Working Capital and a Stabilization Reserves to be less than 30 days of the operating and maintenance budget. the Finance Director shall provide the City Council with a plan to incrementally replenish the reserves to the 180 days minimum reserve balance. Emergency Reserve The Sewer Service Revenue Fund Emergency Reserve is necessary to secure funding for insurance deductibles. unforeseen liabilities/litigation and settlement costs related to the City's wastewater System. The City shall maintain a minimum Sewer Service Revenue Fund Emergency Reserve target level of 5% of the operating and maintenance budget and a maximum reserve balance of 12' of the minimum balance. If funds are appropriated from the Sewer Revenue Emergency Reserves due to unanticipated needs; the Finance Director shall provide the City Council with a plan to incrementally replenish the reserves to the minimum reserve balance. Vehicle Replacement Reserve The Sewer Service Revenue Fund Vehicle Replacement Reserves represents monies set aside to fund the replacement of aging vehicles. The allocation is funded from revenues accumulated in the Sewer Service Revenue Fund. The City shall maintain a minimum Sewer Service Fund Vehicle Replacement Reserve target of 2% of the operating and maintenance budget. This reserve will ensure that vehicles utilized for sewer operations are replaced as scheduled and available to deploy as needed. To achieve a minimum impact to cost of services and rates, funds will be included in the proposed budget on an annual basis as identified in the City's Vehicle Replacement schedule. The cost of replacing all the vehicles will be averaged over the lifespan of the existing fleet. This will generate a more normalized cost of services by evenly distributing revenue requirements on a year-to-year basis offsetting temporary cash flow deficiencies and avoid significant increases in rates charges to customers in the years the replacement cost are incurred. USEPA Permit Renewal Liability Reserve The Sewer Service Revenue Fund USEPA Permit Renewal Liability Reserve will account for monies set aside to fund the City of San Diego Metropolitan Wastewater costs related to the potential upgrade of the Point Loma Wastewater Treatment Plant (PLWTP) or other alternative for secondary treatment. The reserve will be funded from revenues accumulated in the Sewer Service Revenue Fund. 4/26/22 April 26, 2022 2022/04/26 City Council Post Agenda Page 535 of 667 Sewer Service Revenue Fund Reserve POLICY EFFECTIVE Policy NUMBER DATE PAGE 220-04 12/17/13 4 of ADOPTED BY: 2013-265 DATED: December 17, 2013 Metro's USEPA waiver expires in FY 2015 and may not be renewed. If denied. Metro would need to develop and implement improvements to achieve secondary treatment level at PLWTP. Current cost estimates to establish full secondary treatment at PLWTP as well as possible alternatives are all significant (>$1 Billion). As a contributing member to the regional treatment plant, the City of Chula Vista's share in the cost of any upgrade would be approximately 10 percent for the capital improvements and any increase in the overall treatment cost. It is expected that Metro will have 10 years after the expiration of the USEPA waiver to institute secondary treatment or alternative. This reserve establishes a dedicated fund that will offset a portion of the City's share of any obligation related to the PLWTP USEPA waiver. By actively planning for the PLWTP upgrade or alternative, the City will be in a stronger financial position to afford such costs while mitigating impacts to ratepayers. The Permit Renewal Liability Reserve will be funded through annual contributions with the intent to reach a target balance of 20% of Chula Vista's share of the upgrade cost by FY 2024/25 (10 years after the expiration of the waiver). If substantial increases in Metro -related costs occur sooner than expected, the City may draw down reserve levels prior to FY 2024/25 to manage impacts to ratepayers. To be consistent with the City's policy for managing balances for its other utility reserves, if funds are appropriated from the reserve before its intended use, the funds should be replenished in subsequent fiscal years. If the magnitude of the withdrawal is material, the Finance Director shall provide the City Council with a plan to incrementally replenish the reserves. If the actual costs for the PLWTP upgrade or alternative are less than anticipated, any unspent reserves will be rolled into the Working Capital and Rate stabilization reserve and utilized to fund City sewer programs, including maintenance and expansion of the City's conveyance system and payment of San Diego Metro wastewater treatment costs. 2022/04/26 City Council Post Agenda Page 536 of 667 Page 1 of 4 NOTICE OF PUBLIC HEARING REGARDING PROPOSED SEWER RATES IN CHULA VISTA, CALIFORNIA The City of Chula Vista previously mailed out a “Notice of Public Hearing Regarding Proposed Sewer Rates in Chula Vista, California” for a public hearing scheduled on February 8, 2022 to consider the adoption of proposed changes to the sewer rates that were last modified on July 1, 2018. The public hearing previously scheduled for 5:00 P.M. on February 8, 2022 has been canceled and will now instead be held on April 26, 2022 at 5:00 P.M. Written protests previously submitted to the City need not be resubmitted and will be counted as valid protests for the rescheduled public hearing on April 26, 2022. Below, please find the full Notice of Public Hearing, to reflect the new April 26, 2022 hearing date and to provide notice of a 120-day requirement for commencement of any judicial action or proceeding to attack, review, set aside, void, validate, or annul an ordinance, resolution, or motion adopting a fee or charge for water or sewer service, or modifying or amending an existing fee or charge for water or sewer service. ***** NOTICE OF PUBLIC HEARING REGARDING PROPOSED SEWER RATES IN CHULA VISTA, CALIFORNIA Public Hearing Date & Time: Tuesday, April 26, 2022 5:00 P.M. How do you participate in the public hearing? This meeting of the City of Chula Vista (City) City Council will be held at City Hall, 276 Fourth Avenue, Chula Vista, CA 91910. Please check the final City Council meeting agenda, which will be published no later than 72 hours prior to the meeting. The agenda may be obtained online at www.chulavistaca.gov, by email to cityclerk@chulavistaca.gov, or by calling (619) 691-5041. Why are you receiving this notice? The City is mailing this notice to you because you are a sewer customer or are the owner of record of a property that receives sewer service. This notice describes proposed changes to the sewer rates that were last modified on July 1, 2018 and gives information about a public hearing that will be held on Tuesday, April 26, 2022, at 5:00xP.M, at City Hall, 276 Fourth Avenue, Chula Vista, CA 91910 concerning the proposed rate increases. If you are the property owner of record and you have a tenant that is responsible to pay sewer rate bills to the City, please forward this notice to the tenant. What do sewer rates fund? The City provides sewer service to about 50,000 residential and commercial customers. Monthly sewer rates charged to system users (customers) are the primary source of revenue to operate and maintain the sewer system and are used for this purpose. Sewer rate revenue provides funding for operation and maintenance of City-owned sewer collection and conveyance facilities, capital projects, debt service, administration, as well as costs related to prudent long-term operation and financial management of the utility system, such as maintaining adequate reserves and planning for contingencies. Since the City does not operate its own wastewater treatment facilities, sewer rate revenue is also used to pay for wastewater treatment provided by the City of San Diego Metropolitan Wastewater Authority (Metro). 2022/04/26 City Council Post Agenda Page 537 of 667 Page 2 of 4 Why are rate increases needed? In 2021, a financial rate study was completed by Willdan Financial Services, an independent third-party financial consultant, to evaluate the financial condition of the sewer utility, specifically the ability of current sewer rates to generate sufficient revenue to cover the costs of the sewer utility. The proposed sewer rate increases need to fund the operation of the sewer utility, including costs to fund future capital expenditures, increased costs related to operations and maintenance and increasing payments for third-party costs from the City of San Diego’s metropolitan wastewater treatment. In order to meet the projected costs identified in the financial rate study, the proposed rate changes include zero change through June 30, 2022, followed by rate increases of 4.5% from July 1, 2022 through June 30, 2023, 5% from July 1, 2023 through June 30, 2024, 5% from July 1, 2024 through June 30, 2025, and 5.5% from July 1, 2025 through June 30, 2026. The rate structure consists of a base charge and is fixed and a charge that varies based on water usage (volumetric charge). The structure of the rates with a fixed and volumetric charge is proposed to remain in place. The financial rate study projected expenses from Metro which currently comprises about 65% of the City’s sewer expenses. The actual and future expenses are not known or controlled by the City. These charges will be evaluated annually, and rate increases, or decreases will be passed through and applied to the sewer rates. Notice of future changes will be sent 30 days in advance of billing in compliance with Government Code Section 53756. The full financial rate study is available on the City’s website at www.chulavistaca.gov/SewerRates. How do you file a protest? If an owner or customer of record of a parcel subject to the proposed sewer rate increases wishes to oppose the increases, the owner or customer of record must submit a written protest against the proposed sewer rate increases. If written protests are filed by a majority of the affected property parcels, the proposed rate increases will not be adopted. A written protest to the proposed sewer rate increases must clearly state and contain the following information: (a) an opposition to the proposed change, (b) the street address or Assessor's Parcel Number for the parcel(s) affected by the proposed sewer rate increases, (c) an original signature and legibly printed name of the affected record owner or customer, a protest form can be printed from the City’s website (www.chulavistaca.gov/SewerRates). Written protests may be mailed, or hand delivered during business hours to the City Clerk at: 276 Fourth Ave., Chula Vista, CA 91910, hand delivered after business hours and deposited in the drop box located in front of the Finance Department main entrance at 276 Fourth Ave., Building A, Chula Vista, CA 91910, or hand delivered during the public hearing to City Council Chambers, located at City Hall, 276 Fourth Ave., Building A, Chula Vista, CA 91910. To be counted, written protests must be received by the City prior to the close of the above-noticed public hearing, including those written protests that are mailed to the City. Written protests that are post-marked prior to above-noticed public hearing date and time but not physically received by the City prior to the close of the above-noticed public hearing will not be counted. Faxed, emailed, or verbal protests will not be accepted as an original signature is required. 2022/04/26 City Council Post Agenda Page 538 of 667 Page 3 of 4 How to submit comments? The City Council welcomes your participation in its ratemaking and will consider all comments presented at the public hearing, including comments on the proposed rates, rate-making formulas, and the basis upon which rates are calculated in the financial rate study prepared by Willdan Financial Services. It will consider as-applied questions (how the rates apply to you or your property) as well as facial issues (how the rates apply to all customers). Comments can be submitted through the online eComment portal for a City Council meeting at www.chulavistaca.gov/councilmeetings or in person. Comments must be received prior to the time the City Council calls for the close of the commenting period. Although only written protests by a property owner or a customer subject to the charges will count toward a majority protest, the City Council welcomes all input, including oral and electronic comments from the community during the public hearing. Who should I call with questions? Questions can be sent via email to wastewater@chulavistaca.gov or (619) 476-5380. Are special accommodations available? Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk’s Office at cityclerk@chulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at least forty-eight hours in advance of the meeting. NOTE: In accordance with Government Code section 53759, any judicial action or proceeding to attack, review, set aside, void, validate, or annul an ordinance, resolution, or motion adopting a fee or charge for water or sewer service, or modifying or amending an existing fee or charge for water or sewer service, shall be commenced within 120 days of the effective date or the date of the final passage, adoption, or approval of the ordinance, resolution, or motion, whichever is later. 2022/04/26 City Council Post Agenda Page 539 of 667 Page 4 of 4 New sewer rates The proposed rates keep the basic fixed and volume rates and are intended to fund the projected increased expenses noted above. RATE START CURRENT AT APPROVAL July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 RATE INCREASE 0% 0% 4.5% 5% 5% 5.5% MONTHLY FIXED SERVICE CHARGE Single Family $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 All Others Meter Size: 5/8” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 3/4” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 1” $28.49 $28.49 $29.77 $31.26 $32.82 $34.63 Meter Size: 1 ½” $51.77 $51.77 $54.10 $56.80 $59.64 $62.93 Meter Size: 2” $79.68 $79.68 $83.27 $87.43 $91.80 $96.85 Meter Size: 3” $154.15 $154.15 $161.08 $169.14 $177.59 $187.36 Meter Size: 4” $237.91 $237.91 $248.62 $261.05 $274.10 $289.17 Meter Size: 6” $470.61 $470.61 $491.70 $516.38 $542.20 $572.02 Meter Size: 8” $936.01 $936.01 $978.13 $1,027.04 $1,078.39 $1,137.70 MONTHLY VOLUME CHARGE/HCF* Residential Single Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Multi-Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Mobile Homes $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Non-Residential Commercial - Low $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Commercial - Med $6.02 $6.02 $6.29 $6.61 $6.94 $7.32 Commercial - High $9.59 $9.59 $10.02 $10.52 $11.05 $11.66 Special Users Varies Varies Varies Varies Varies Varies *HCF means hundred cubic feet. Impact on your single-family home bill For a typical single-family home with a winter average water consumption of 7 HCF, the sewer bill would be: RATE START CURRENT AT APPROVAL July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 SEWER RATE $41.37 $41.37 $43.23 $45.39 $47.66 $50.28 RATE INCREASE $0.00 $0.00 $1.86 $2.16 $2.27 $2.62 2022/04/26 City Council Post Agenda Page 540 of 667 Page 1 of 4 AVISO DE AUDIENCIA PUBLICA SOBRE LAS TARIFAS PROPUESTAS DEL SERVICIO DE ALCANTARILLADO EN CHULA VISTA, CA La Ciudad de Chula Vista envió previamente por correo un “Aviso de Audiencia Pública sobre las Tarifas Propuestas del Servicio de Alcantarillado en Chula Vista, California” programada para el 8 de febrero del 2022 para considerar la adopción de los cambios propuestos a las tarifas del servicio de alcantarillado que se modificaron por última vez el 1 de julio del 2018. La audiencia pública previamente programada para las 5 p.m. del 8 de febrero del 2022 ha sido cancelada y ahora se llevará a cabo el 26 de abril del 2022 a las 5 p.m. Las protestas por escrito que fueron enviadas previamente a la Ciudad no necesitan reenviarse y se contarán como protestas válidas para la audiencia pública reprogramada para el 26 de abril del 2022. A continuación encontrará el Aviso de Audiencia Pública completo, que incluye la nueva fecha de la audiencia programada para el 26 de abril del 2022 y proporciona el aviso del requisito de 120 días para el inicio de cualquier acción judicial o proceso para impugnar, revisar, apartar, eliminar, validar o anular un reglamento, resolución o moción que adopte una tarifa o cargo por el servicio de agua o alcantarillado, o que modifique o enmiende una tarifa o cargo existente por el servicio de agua o alcantarillado. ***** AVISO DE AUDIENCIA PUBLICA SOBRE LAS TARIFAS PROPUESTAS DEL SERVICIO DE ALCANTARILLADO DE CHULA VISTA, CA Fecha y Hora de la Audiencia Pública: martes 26 de abril del 2022 a las 5:00 p.m. ¿Cómo puede participar en la audiencia pública? Esta sesión del Cabildo de la Ciudad de Chula Vista se llevará a cabo en las oficinas municipales, 276 Fourth Avenue, Chula Vista, CA. 91910. Favor de consultar la agenda final de la sesión de Cabildo de la Ciudad, que se publicará a más tardar 72 horas antes de la reunión. La agenda se puede obtener en línea en www.chulavistaca.gov, por correo electrónico en cityclerk@chulavistaca.gov, o llamando al (619) 691-5041. ¿Por qué recibió este aviso? La Ciudad le envió este aviso porque usted es un cliente o es el dueño registrado de una propiedad que recibe el servicio de alcantarillado. Este aviso describe los cambios propuestos a las tarifas del servicio de alcantarillado que se modificaron por última vez el 1 de julio del 2018 y brinda información de una audiencia pública sobre los aumentos de tarifas propuestos que se llevará a cabo el martes 26 de abril del 2022 a las 5:00 p.m., en las oficinas municipales, 276 Fourth Avenue, Chula Vista, CA 91910. Si usted es el dueño registrado de la propiedad y tiene un inquilino que es responsable del pago de las facturas del servicio de alcantarillado a la Ciudad, favor de reenviar este aviso al inquilino. ¿Qué financian las tarifas del servicio de alcantarillado? La Ciudad ofrece el servicio de alcantarillado a aproximadamente 50,000 clientes residenciales y comerciales. Las tarifas mensuales del alcantarillado que se cobran a los usuarios del sistema (clientes) son la principal fuente de ingresos para operar y mantener el sistema de alcantarillado y se utilizan para este propósito. Los ingresos obtenidos por las tarifas del servicio de alcantarillado proporcionan fondos para la operación y mantenimiento de las instalaciones de recolección y transporte del sistema de alcantarillado de la Ciudad, proyectos de capital, servicio de la deuda, administración, así como costos relacionados con la operación prudente a largo plazo y la gestión financiera del sistema de servicios públicos, como el mantenimiento adecuado de las reservas y la planificación para contingencias. Dado que la Ciudad no opera sus propias instalaciones de tratamiento de aguas residuales, los ingresos obtenidos por las tarifas del servicio de alcantarillado también se utilizan para pagar el tratamiento de aguas residuales proporcionado por la Autoridad Metropolitana de Aguas Residuales de la Ciudad de San Diego (Metro). 2022/04/26 City Council Post Agenda Page 541 of 667 Page 2 of 4 ¿Por qué son necesarios los aumentos de tarifas? En 2021, Willdan Financial Services, un consultor financiero externo independiente, llevó a cabo un estudio de tarifas financieras para evaluar la situación financiera del servicio de alcantarillado, específicamente la capacidad de las tarifas actuales de alcantarillado para generar ingresos suficientes para cubrir los costos del servicio de alcantarillado. Los aumentos propuestos en las tarifas del servicio de alcantarillado deben financiar la operación del servicio de alcantarillado, incluyendo los costos para financiar gastos futuros de capital, el aumento de los costos relacionados con la operación y mantenimiento, y el aumento de los pagos por costos a terceros del tratamiento de aguas residuales metropolitanas de la Ciudad de San Diego. Para cumplir con los costos proyectados que fueron identificados en el estudio de tarifas financieras, los cambios de tarifas propuestos incluyen cero cambios hasta el 30 de junio del 2022, seguido de aumentos de tarifas del 4.5% desde el 1 de julio del 2022 hasta el 30 de junio del 2023, 5% desde el 1 de julio del 2023 hasta el 30 de junio del 2024, 5% desde el 1 de julio del 2024 hasta el 30 de junio del 2025, y 5.5% desde el 1 de julio del 2025 hasta el 30 de junio del 2026. La estructura tarifaria consiste en un cargo base y es fijo, y un cargo que varía según el consumo de agua (carga volumétrica). Se propone mantener la estructura tarifaria con cargo fijo y volumétrico. El estudio de tarifas financieras proyectó los gastos de Metro, que actualmente comprende alrededor del 65% de los gastos del alcantarillado de la Ciudad. La Ciudad no conoce, ni controla los gastos actuales y futuros. Estos cargos se evaluarán anualmente y los aumentos o disminuciones de tarifas se transferirán y aplicarán a las tarifas del servicio de alcantarillado. Se enviará un aviso de futuros cambios 30 días previos a la facturación de conformidad con la Sección 53756 del Código de Gobierno. El estudio completo de tarifas financieras está disponible en la página de Internet de la Ciudad en www.chulavistaca.gov/SewerRates. ¿Cómo se presenta una protesta? Si un propietario o cliente que está registrado en una parcela que está sujeta a los aumentos propuestos de tarifas del servicio de alcantarillado desea oponerse a los aumentos, el propietario o cliente registrado debe presentar una protesta por escrito contra los aumentos propuestos en las tarifas del servicio de alcantarillado. Si la mayoría de las parcelas afectadas presentan protestas por escrito, no se adoptarán los aumentos de tarifas propuestos. Una protesta por escrito por los aumentos propuestos en las tarifas del servicio de alcantarillado debe contener de manera clara la siguiente información: (a) una oposición al cambio propuesto, (b) la dirección o el número de parcela (APN) afectada(s) por los aumentos propuestos a las tarifas del servicio de alcantarillado, (c) una firma original y el nombre impreso de manera legible del propietario o cliente del registro afectado, se puede imprimir un formulario de protesta desde la página de Internet de la Ciudad (www.chulavistaca.gov/SewerRates). Las protestas por escrito pueden enviarse por correo postal o ser entregadas personalmente durante el horario de servicio a la Oficina del Secretario de la Ciudad en: 276 Fourth Ave., Chula Vista, CA 91910, depositarse personalmente después del horario de servicio en el buzón ubicado frente a la entrada principal del Departamento de Finanzas en el 276 Fourth Ave., Edificio A, Chula Vista, CA 91910, o ser entregadas a mano durante la audiencia pública en la Sala de Cabildo de la Ciudad ubicada en las oficinas municipales, 276 Fourth Ave., Edificio A, Chula Vista, CA 91910. Para ser tomadas en cuenta, la Ciudad debe recibir las protestas por escrito antes del cierre de la audiencia pública que se menciona en este aviso, incluyendo las protestas por escrito que se envían por correo postal a la Ciudad. No se tomarán en cuenta las protestas por escrito que tengan un sello de envío previo a la fecha y hora de la audiencia pública mencionada en este aviso, pero que la Ciudad no haya recibido físicamente antes del cierre de la audiencia pública mencionada en este aviso. No se aceptarán protestas enviadas por fax, correo electrónico, o protestas verbales, ya que requieren incluir una firma original. 2022/04/26 City Council Post Agenda Page 542 of 667 Page 3 of 4 ¿Como enviar comentarios? El Cabildo de la Ciudad agradece su participación en la elaboración de las tarifas y tomará en cuenta todos los comentarios presentados en la audiencia pública, incluyendo los comentarios sobre las tarifas propuestas, las fórmulas de elaboración de las tarifas y la base sobre la cual se calculan las tasas en el estudio de tarifas financieras preparado por Willdan Financial Services. Considerará preguntas sobre su implementación (cómo se aplican las tarifas a usted o su propiedad), así como es inconstitucional de su faz (cómo se aplican las tarifas a todos los clientes). Los comentarios que se quieran presentar ante el Cabildo de la Ciudad se pueden enviar a través del portal de comentarios electrónicos en www.chulavistaca.gov/councilmeetings o en persona. Los comentarios deben recibirse antes de que el Cabildo cierre el periodo para comentarios. Aunque solo las protestas por escrito de un propietario o cliente sujeto a los cargos contarán para una protesta mayoritaria, el Cabildo de la Ciudad agradece todas las aportaciones de la comunidad, incluyendo comentarios orales y electrónicos que se presenten durante la audiencia pública. ¿A quién debo llamar si tengo preguntas? Las preguntas se pueden presentar por correo electrónico a wastewater@chulavistaca.gov o (619) 476-5380. ¿Estarán disponibles atenciones especiales? Se invita a las personas con discapacidades o necesidades especiales a solicitar modificaciones o adaptaciones que les permitan tener acceso y/o participar en una audiencia de la Ciudad, contactando directamente a la Oficina del Secretario de la Ciudad en cityclerk@chulavistaca.gov o al (619) 691-5041 (El Servicio de Retransmisión de California está disponible para personas con discapacidad auditiva llamando al 711) cuando menos cuarenta y ocho horas antes de la sesión. NOTA: De acuerdo con la sección 53759 del Código del Gobierno, cualquier acción o procedimiento judicial para impugnar, revisar, apartar, eliminar, validar o anular un reglamento, resolución o moción que adopte una tarifa o cargo por el servicio de agua o alcantarillado, o que modifique o enmiende una tarifa o cargo existente por el servicio de agua o alcantarillado, se iniciará dentro de los 120 días posteriores a la fecha de entrada en vigencia o la fecha de la aprobación final, adopción o aprobación del reglamento, resolución o moción, lo que ocurra más tarde. 2022/04/26 City Council Post Agenda Page 543 of 667 Page 4 of 4 Nuevas tarifas del servicio de alcantarillado Las tarifas propuestas mantienen las tarifas básicas fijas y por volumen, y están destinadas a financiar los gastos proyectados que se mencionaron anteriormente. . TASA DE INICIO ACTUAL PROPUESTA 1 julio 2022 1 julio 2023 1 julio 2024 1 julio 2025 TASA DE AUMENTO 0% 0% 4.5% 5% 5% 5.5% CARGO DE SERVICIO FIJO MENSUAL Unifamiliar $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Todos los demás Medidor: 5/8” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Medidor: 3/4” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Medidor: 1” $28.49 $28.49 $29.77 $31.26 $32.82 $34.63 Medidor: 1 ½” $51.77 $51.77 $54.10 $56.80 $59.64 $62.93 Medidor: 2” $79.68 $79.68 $83.27 $87.43 $91.80 $96.85 Medidor: 3” $154.15 $154.15 $161.08 $169.14 $177.59 $187.36 Medidor: 4” $237.91 $237.91 $248.62 $261.05 $274.10 $289.17 Medidor: 6” $470.61 $470.61 $491.70 $516.38 $542.20 $572.02 Medidor: 8” $936.01 $936.01 $978.13 $1,027.04 $1,078.39 $1,137.70 CARGO POR VOLUMEN MENSUAL/HCF* Residencial Unifamiliar $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Multifamiliar $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Casas Móviles $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 No Residencial Comercial - Bajo $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Comercial - Medio $6.02 $6.02 $6.29 $6.61 $6.94 $7.32 Comercial - Alto $9.59 $9.59 $10.02 $10.52 $11.05 $11.66 Usuarios especiales Varía Varía Varía Varía Varía Varía *HCF significa cien pies cúbicos. Impacto en la factura de su Vivienda unifamiliar Para una casa unifamiliar típica con un consumo promedio de agua de 7 HCF durante el invierno, la factura del servicio de alcantarillado sería: TASA DE INICIO ACTUAL PROPUESTA 1 julio 2022 1 julio 2023 1 julio 2024 1 julio 2025 TARIFA DE ALCANTARILLADO $41.37 $41.37 $43.23 $45.39 $47.66 $50.28 TASA DE AUMENTO $0.00 $0.00 $1.86 $2.16 $2.27 $2.62 2022/04/26 City Council Post Agenda Page 544 of 667 NOTICE OF PUBLIC HEARING REGARDING PROPOSED SEWER RATES IN CHULA VISTA, CALIFORNIA Public Hearing Date & Time: Tuesday, February 8, 2022 5:00 P.M. How do you participate in the public hearing? This meeting of the City of Chula Vista (City) City Council will be held at City Hall, 276 Fourth Avenue, Chula Vista, CA 91910. Please check the final City Council meeting agenda, which will be published no later than 72 hours prior to the meeting. The agenda may be obtained online at www.chulavistaca.gov, by email to cityclerk@chulavistaca.gov, or by calling (619) 691-5041. Why are you receiving this notice? The City is mailing this notice to you because you are a sewer customer or are the owner of record of a property that receives sewer service. This notice describes proposed changes to the sewer rates that were last modified on July 1, 2018 and gives information about a public hearing that will be held on Tuesday, February 8, 2022, at 5:00 P.M,, at City Hall, 276 Fourth Avenue, Chula Vista, CA 91910 concerning the proposed rate increases. If you are the property owner of record and you have a tenant that is responsible to pay sewer rate bills to the City, please forward this notice to the tenant. What do sewer rates fund? The City provides sewer service to about 50,000 residential and commercial customers. Monthly sewer rates charged to system users (customers) are the primary source of revenue to operate and maintain the sewer system and are used for this purpose. Sewer rate revenue provides funding for operation and maintenance of City-owned sewer collection and conveyance facilities, capital projects, debt service, administration, as well as costs related to prudent long-term operation and financial management of the utility system, such as maintaining adequate reserves and planning for contingencies. Since the City does not operate its own wastewater treatment facilities, sewer rate revenue is also used to pay for wastewater treatment provided by the City of San Diego Metropolitan Wastewater Authority (Metro). Why are rate increases needed? In 2021, a financial rate study was completed by Willdan Financial Services, an independent third party financial consultant, to evaluate the financial condition of the sewer utility, specifically the ability of current sewer rates to generate sufficient revenue to cover the costs of the sewer utility. The proposed sewer rate increases need to fund the operation of the sewer utility, including costs to fund future capital expenditures, increased costs related to operations and maintenance and increasing payments for third-party costs from the City of San Diego’s metropolitan wastewater treatment. In order to meet the projected costs identified in the financial rate study, the proposed rate changes include zero change through June 30, 2022, followed by rate increases of 4.5% from July 1, 2022 through June 30, 2023, 5% from July 1, 2023 through June 30, 2024, 5% from July 1, 2024 through June 30, 2025, and 5.5% from July 1, 2025 through June 30, 2026. The rate structure consists of a base charge and is fixed and a charge that varies based on water usage (volumetric charge). The structure of the rates with a fixed and volumetric charge is proposed to remain in place. The financial rate study projected expenses from Metro which currently comprises about 65% of the City’s sewer expenses. The actual and future expenses are not known or controlled by the City. These charges will be evaluated annually and rate increases or decreases will be passed through and applied to the sewer rates. Notice of future changes will be sent 30 days in advance of billing in compliance with Government Code Section 53756. The full financial rate study is available on the City’s website at www.chulavistaca.gov/SewerRates. 2022/04/26 City Council Post Agenda Page 545 of 667 How do you file a protest? If an owner or customer of record of a parcel subject to the proposed sewer rate increases wishes to oppose the increases, the owner or customer of record must submit a written protest against the proposed sewer rate increases. If written protests are filed by a majority of the affected property parcels, the proposed rate increases will not be adopted. A written protest to the proposed sewer rate increases must clearly state and contain the following information: (a) an opposition to the proposed change, (b) the street address or Assessor's Parcel Number for the parcel(s) affected by the proposed sewer rate increases, (c) an original signature and legibly printed name of the affected record owner or customer, a protest form can be printed from the City’s website (www.chulavistaca.gov/SewerRates). Written protests may be mailed or hand delivered during business hours to the City Clerk at: 276 Fourth Ave., Chula Vista, CA 91910, hand delivered after business hours and deposited in the drop box located in front of the Finance Department main entrance at 276 Fourth Ave., Building A, Chula Vista, CA 91910, or hand delivered during the public hearing to City Council Chambers, located at City Hall, 276 Fourth Ave., Building A, Chula Vista, CA 91910. To be counted, written protests must be received by the City prior to the close of the above-noticed public hearing, including those written protests that are mailed to the City. Written protests that are post-marked prior to above-noticed public hearing date and time but not physically received by the City prior to the close of the above-noticed public hearing will not be counted. Faxed, emailed, or verbal protests will not be accepted as an original signature is required. Will information events be available? Yes, the following information events are available virtually, to learn more about the proposed sewer rates, similar information will be presented at each meeting:  Wednesday, December 8, 2021 from 9:00 A.M. to 9:45 A.M.  Tuesday, December 14, 2021 from 6:00 P.M. to 6:45 P.M. Please check this website: www.chulavistaca.gov/SewerRates for information on the virtual meeting access. How to submit comments? The City Council welcomes your participation in its rate-making and will consider all comments presented at the public hearing, including comments on the proposed rates, rate-making formulas, and the basis upon which rates are calculated in the financial rate study prepared by Willdan Financial Services. It will consider as-applied questions (how the rates apply to you or your property) as well as facial issues (how the rates apply to all customers). Comments can be submitted through the online eComment portal for a City Council meeting at www.chulavistaca.gov/councilmeetings or in person. Comments must be received prior to the time the Mayor calls for the close of the commenting period. Although only written protests by a property owner or a customer subject to the charges will count toward a majority protest, the City Council welcomes all input, including oral and electronic comments from the community during the public hearing. Who should I call with questions? Questions can be sent via email to wastewater@chulavistaca.gov or (619) 476-5380. Are special accommodations available? Individuals with disabilities or special needs are invited to request modifications or accommodations to access and/or participate in a City meeting by contacting the City Clerk’s Office at cityclerk@chulavistaca.gov or (619) 691-5041 (California Relay Service is available for the hearing impaired by dialing 711) at least forty- eight hours in advance of the meeting. 2022/04/26 City Council Post Agenda Page 546 of 667 New sewer rates The proposed rates keep the basic fixed and volume rates and are intended to fund the projected increased expenses noted above. RATE START CURRENT AT APPROVAL July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 RATE INCREASE 0% 0% 4.5% 5% 5% 5.5% MONTHLY FIXED SERVICE CHARGE Single Family $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 All Others Meter Size: 5/8” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 3/4” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 1” $28.49 $28.49 $29.77 $31.26 $32.82 $34.63 Meter Size: 1 ½” $51.77 $51.77 $54.10 $56.80 $59.64 $62.93 Meter Size: 2” $79.68 $79.68 $83.27 $87.43 $91.80 $96.85 Meter Size: 3” $154.15 $154.15 $161.08 $169.14 $177.59 $187.36 Meter Size: 4” $237.91 $237.91 $248.62 $261.05 $274.10 $289.17 Meter Size: 6” $470.61 $470.61 $491.70 $516.38 $542.20 $572.02 Meter Size: 8” $936.01 $936.01 $978.13 $1,027.04 $1,078.39 $1,137.70 MONTHLY VOLUME CHARGE/HCF* Residential Single Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Multi-Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Mobile Homes $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Non-Residential Commercial - Low $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Commercial - Med $6.02 $6.02 $6.29 $6.61 $6.94 $7.32 Commercial - High $9.59 $9.59 $10.02 $10.52 $11.05 $11.66 Special Users Varies Varies Varies Varies Varies Varies *HCF means hundred cubic feet. Impact on your single-family home bill For a typical single-family home with a winter average water consumption of 7 HCF, the sewer bill would be: RATE START CURRENT AT APPROVAL July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 SEWER RATE $41.37 $41.37 $43.23 $45.39 $47.66 $50.28 RATE INCREASE $0.00 $0.00 $1.86 $2.16 $2.27 $2.62 2022/04/26 City Council Post Agenda Page 547 of 667 AVISO DE AUDIENCIA PUBLICA SOBRE LAS TARIFAS PROPUESTAS DEL SERVICIO DE ALCANTARILLADO EN CHULA VISTA, CA Fecha y Hora de la Audiencia Pública: martes 8 de febrero del 2022 5:00 P.M. ¿Cómo puede participar en la audiencia pública? La sesión de Cabildo de la Ciudad de Chula Vista se llevará a cabo en las oficinas municipales, 276 Fourth Avenue, Chula Vista, CA. 91910. Favor de consultar la agenda final de la sesión de Cabildo de la Ciudad, que se publicará a más tardar 72 horas antes de la reunión. La agenda se puede obtener en línea en www.chulavistaca.gov, por correo electrónico en cityclerk@chulavistaca.gov, o llamando al (619) 691-5041. ¿Por qué recibió este aviso? La Ciudad le envió este aviso porque usted es un cliente o es el dueño registrado de una propiedad que recibe el servicio de alcantarillado. Este aviso describe los cambios propuestos a las tarifas del servicio de alcantarillado que se modificaron por última vez el 1 de julio del 2018 y brinda información de una audiencia pública sobre los aumentos de tarifas propuestos que se llevará a cabo el martes 8 de febrero del 2022 a las 5:00 P.M., en las oficinas municipales, 276 Fourth Avenue, Chula Vista, CA 91910. Si usted es el dueño registrado de la propiedad y tiene un inquilino que es responsable del pago de las facturas del servicio de alcantarillado a la Ciudad, favor de reenviar este aviso al inquilino. ¿Qué financian las tarifas del servicio de alcantarillado? La Ciudad ofrece el servicio de alcantarillado a aproximadamente 50,000 clientes residenciales y comerciales. Las tarifas mensuales del alcantarillado que se cobran a los usuarios (clientes) son la principal fuente de ingresos para operar y mantener el sistema de alcantarillado y se utilizan para este propósito. Los ingresos obtenidos por las tarifas del servicio de alcantarillado proporcionan fondos para la operación y mantenimiento de las instalaciones de recolección y transporte del sistema de alcantarillado de la Ciudad, proyectos de capital, servicio de la deuda, administración, así como costos relacionados con la operación prudente a largo plazo y la gestión financiera del sistema de servicios públicos, como el mantenimiento adecuado de las reservas y la planificación para contingencias. Dado que la Ciudad no opera sus propias instalaciones de tratamiento de aguas residuales, los ingresos obtenidos por las tarifas del servicio de alcantarillado también se utilizan para pagar el tratamiento de aguas residuales proporcionado por la Autoridad Metropolitana de Aguas Residuales de la Ciudad de San Diego (Metro). ¿Por qué se necesitan los aumentos de tarifas? En 2021, Willdan Financial Services, un consultor financiero independiente, llevó a cabo un estudio de tarifas financieras para evaluar la situación financiera de la red de alcantarillado, específicamente la capacidad de las tarifas de alcantarillado actuales de generar ingresos suficientes para cubrir los costos de la red de alcantarillado. Los aumentos propuestos en las tarifas del servicio de alcantarillado deben financiar la operación de la red de alcantarillado, incluyendo los costos para financiar los gastos futuros de capital, el aumento de los costos relacionados con la operación y mantenimiento, y el aumento de los pagos a terceros por costos del tratamiento de aguas residuales metropolitanas de la Ciudad de San Diego. Para cumplir con los costos proyectados que fueron identificados en el estudio de tarifas financieras, los cambios de tarifas propuestos incluyen cero cambios hasta el 30 de junio del 2022, seguido de aumentos de tarifas del 4.5% desde el 1 de julio del 2022 hasta el 30 de junio del 2023, 5% desde el 1 de julio del 2023 hasta el 30 de junio del 2024, 5% desde el 1 de julio del 2024 hasta el 30 de junio del 2025, y 5.5% desde el 1 de julio del 2025 hasta el 30 de junio del 2026. La estructura tarifaria consiste en un cargo base y es fijo, y un cargo que varía según el uso de agua (carga volumétrica). Se propone que se mantenga la estructura tarifaria con cargo fijo y volumétrico. El estudio de tasas financieras proyectó los gastos de Metro, que actualmente comprenden alrededor del 65% de los gastos del alcantarillado de la Ciudad. La Ciudad no conoce, ni controla los gastos actuales y futuros. Estos cargos se evaluarán anualmente y los aumentos o disminuciones de tarifas se transferirán y aplicarán a las tarifas del servicio de alcantarillado. Se enviará un aviso de futuros cambios 30 días previos a la facturación de conformidad con la Sección 53756 del Código de Gobierno. El estudio completo de tarifas financieras está disponible en la página de Internet de la Ciudad en www.chulavistaca.gov/SewerRates. 2022/04/26 City Council Post Agenda Page 548 of 667 ¿Cómo se presenta una protesta? Si un cliente o propietario que está registrado en una parcela que está sujeta a los aumentos propuestos de tarifas del servicio de alcantarillado desea oponerse a los aumentos, el propietario o cliente registrado debe presentar una protesta por escrito contra los aumentos propuestos en las tarifas de alcantarillado. Si la mayoría de las parcelas afectadas presentan protestas por escrito, no se adoptarán los aumentos de tarifas propuestos. Una protesta por escrito contra los aumentos propuestos en las tarifas del servicio de alcantarillado debe contener de manera clara la siguiente información: (a) una oposición al cambio propuesto, (b) la dirección o el número de parcela (APN) afectada(s) por los aumentos propuestos a las tarifas del servicio de alcantarillado, (c) una firma original y el nombre impreso de manera legible del propietario o cliente del registro afectado, se puede imprimir un formulario de protesta desde la página de Internet de la Ciudad (www.chulavistaca.gov/SewerRates). Las protestas por escrito pueden enviarse por correo postal o ser entregadas personalmente durante el horario de servicio a la Oficina del Secretario de la Ciudad en: 276 Fourth Ave., Chula Vista, CA 91910, depositarse personalmente después del horario de servicio en el buzón ubicado frente a la entrada principal del Departamento de Finanzas en el 276 Fourth Ave., Building A, Chula Vista, CA 91910, o ser entregadas a mano durante la audiencia pública en la Sala de Cabildo de la Ciudad ubicada en las oficinas municipales, 276 Fourth Ave., Building A, Chula Vista, CA 91910. Para ser tomadas en cuenta, la Ciudad debe recibir las protestas por escrito antes del cierre de la audiencia pública que se menciona en este aviso, incluyendo las protestas por escrito que se envían por correo a la Ciudad. No se tomarán en cuenta las protestas por escrito que tengan un sello de envío previo a la fecha y hora de la audiencia pública mencionada en este aviso, pero que la Ciudad no haya recibido físicamente antes del cierre de la audiencia pública mencionada en este aviso. No se aceptarán protestas enviadas por fax, correo electrónico, o protestas verbales, ya que requieren incluir una firma original. ¿Estarán disponibles eventos de información pública? Si, los siguientes eventos de información pública estarán disponibles de manera virtual, para conocer más sobre las tarifas propuestas del servicio de alcantarillado, se presentará información similar en cada una de estas juntas:  Miércoles, 8 de diciembre del 2021, de las 9:00 A.M. a las 9:45 A.M.  Martes, 14 de diciembre del 2021, de las 6:00 P.M. a las 6:45 P.M. Favor de visitar: www.chulavistaca.gov/SewerRates para obtener información sobre el acceso a la junta virtual. ¿Como enviar comentarios? El Cabildo de la Ciudad agradece su participación en la elaboración de las tarifas y tomará en cuenta todos los comentarios presentados en la audiencia pública, incluyendo los comentarios sobre las tarifas propuestas, las fórmulas de elaboración de las tarifas y la base sobre la cual se calculan las tarifas en el estudio de tarifas financieras preparado por Willdan Financial Services. Se considerarán las preguntas aplicadas (cómo se aplican las tarifas a usted o a su propiedad), así como los problemas faciales (cómo se aplican las tarifas a todos los clientes). Los comentarios que se quieran presentar ante el Cabildo de la Ciudad se pueden enviar a través del portal de comentarios electrónicos en www.chulavistaca.gov/councilmeetings o en persona. Los comentarios deben recibirse antes de que la alcaldesa cierre el periodo para comentarios. Aunque solo las protestas por escrito de un propietario o cliente sujeto a los cargos contarán para una protesta mayoritaria, el Cabildo de la Ciudad agradece todas las aportaciones de la comunidad, incluyendo comentarios orales y electrónicos que se presenten durante la audiencia pública. ¿A quién debo llamar si tengo preguntas? Las preguntas se pueden presentar por correo electrónico a wastewater@chulavistaca.gov o por teléfono (619) 476-5380. ¿Estarán disponibles atenciones especiales? Se invita a las personas con discapacidades o necesidades especiales a solicitar modificaciones o adaptaciones que les permitan tener acceso y/o participar en una audiencia de la Ciudad, contactando directamente a la Oficina del Secretario de la Ciudad en cityclerk@chulavistaca.gov o llamando al (619) 691-5041 (El Servicio de Retransmisión de California está disponible para personas con discapacidad auditiva llamando al 711) cuando menos cuarenta y ocho horas antes de la sesión. 2022/04/26 City Council Post Agenda Page 549 of 667 Nuevas tarifas de alcantarillado Las tarifas propuestas mantienen las tarifas fijas básicas y por volumen, y están destinadas a financiar los gastos proyectados que se mencionaron anteriormente. TASA DE INICIO ACTUAL PROPUESTA 1 julio 2022 1 julio 2023 1 julio 2024 1 julio 2025 TASA DE AUMENTO 0% 0% 4.5% 5% 5% 5.5% CARGO MENSUAL FIJO POR SERVICIO Unifamiliar $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Todos los demás Medidor: 5/8” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Medidor: 3/4” $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Medidor: 1” $28.49 $28.49 $29.77 $31.26 $32.82 $34.63 Medidor: 1 ½” $51.77 $51.77 $54.10 $56.80 $59.64 $62.93 Medidor: 2” $79.68 $79.68 $83.27 $87.43 $91.80 $96.85 Medidor: 3” $154.15 $154.15 $161.08 $169.14 $177.59 $187.36 Medidor: 4” $237.91 $237.91 $248.62 $261.05 $274.10 $289.17 Medidor: 6” $470.61 $470.61 $491.70 $516.38 $542.20 $572.02 Medidor: 8” $936.01 $936.01 $978.13 $1,027.04 $1,078.39 $1,137.70 CARGO MENSUAL POR VOLUMEN/HCF* Residencial Unifamiliar $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Multifamiliar $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Casas Móviles $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 No Residencial Comercial - Bajo $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Comercial - Medio $6.02 $6.02 $6.29 $6.61 $6.94 $7.32 Comercial - Alto $9.59 $9.59 $10.02 $10.52 $11.05 $11.66 Usuarios Especiales Varía Varía Varía Varía Varía Varía *HCF significa cien pies cúbicos. Impacto en la factura de su vivienda unifamiliar Para una casa unifamiliar típica con un consumo promedio de agua de 7 HCF durante el inverno, la factura del servicio de alcantarillado sería: TASA DE INICIO ACTUAL PROPUESTA 1 julio 2022 1 julio 2023 1 julio 2024 1 julio 2025 TARIFA DE ALCANTARILLADO $41.37 $41.37 $43.23 $45.39 $47.66 $50.28 TASA DE AUMENTO $0.00 $0.00 $1.86 $2.16 $2.27 $2.62 2022/04/26 City Council Post Agenda Page 550 of 667 2022/04/26 City Council Post Agenda Page 551 of 667 2022/04/26 City Council Post Agenda Page 552 of 667 2022/04/26 City Council Post Agenda Page 553 of 667 2022/04/26 City Council Post Agenda Page 554 of 667 2022/04/26 City Council Post Agenda Page 555 of 667 2022/04/26 City Council Post Agenda Page 556 of 667 MASTER FEE SCHEDULE FEE BULLETIN Chapter 12 – Sewer Fees 12-200 Sewer Service Charges City of Chula Vista www.chulavistaca.gov 619.476.5380 In addition to other fees, assessments or charges provided by the Chula Vista Municipal Code or otherwise, the owner or occupant of any parcel of real property which said parcel is connected to the sewer system of the City and to a water system maintained by the Sweetwater Authority, California American Water District or the Otay Municipal Water District shall pay a sewer service charge as follows: METER SIZE FY 2014-15 $/MONTH FY 2015-16 $/MONTH FY 2016-17 $/MONTH FY 2017-18 $/MONTH FY 2018-19 $/MONTH MONTHLY FIXED SERVICE CHARGE Single Family $9.67 $10.93 $12.32 $13.67 $15.23 All Others 5/8 $8.97 $10.23 $11.62 $12.97 $14.53 3/4 $8.97 $10.23 $11.62 $12.97 $14.53 1 $15.60 $18.48 $21.66 $24.72 $28.49 1 ½ $26.64 $32.23 $38.41 $44.32 $51.77 2 $39.89 $48.72 $58.49 $67.82 $79.68 3 $75.23 $92.71 $112.07 $130.52 $154.15 4 $114.98 $142.20 $172.34 $201.05 $237.91 6 $225.40 $279.67 $339.76 $396.97 $470.61 8 $446.24 $554.61 $674.61 $788.83 $936.01 VOLUME CHARGE / HCF* Residential Single Family $3.86 $3.97 $4.07 $4.19 $4.26 Multi – Family $3.92 $4.03 $4.13 $4.25 $4.32 Mobile Homes $3.92 $4.03 $4.13 $4.25 $4.32 Non-Residential Commercial – Low $3.92 $4.03 $4.13 $4.25 $4.32 Commercial – Med $5.46 $5.62 $5.79 $5.98 $6.08 Commercial – High $8.60 $8.88 $9.17 $9.49 $9.65 Special Users Varies Varies Varies Varies Varies City of Chula Vista Engineering Department 276 Fourth Avenue, Chula Vista, CA 91910 April 2022 2022/04/26 City Council Post Agenda Page 557 of 667 MASTER FEE SCHEDULE FEE BULLETIN Chapter 12 – Sewer Fees 12-200 Sewer Service Charges City of Chula Vista www.chulavistaca.gov 619.476.5380 *HCF – Hundred Cubic Feet. Rates include Sewer Service Charge, Sewer Facilities Replacement Fee and Storm Drain Fee. RESIDENTIAL RATES 1. Single Family The sewer service charge for each single family dwelling unit serviced by a separate water meter is based on the lowest “Winter Average”, which is the lowest amount of water consumed during the preceding winter months (November through April). The rate shall be in accordance with the adopted rate schedule. Each single family dwelling will be charged a fixed service charge and a variable commodity rate. A rate of return (ROR) of 90% is assumed for all singe family dwelling units. Single Family Billing Formula Lowest “Winter Average” x 90% ROR x $ Sewer rate/ HCF + Fixed Service Charge = Monthly Sewer Charge 2. Multi – Family The sewer service charge for other parcels of real property used for domestic purposes and serviced by a water meter shall be a the prevailing rate per each one hundred cubic feet (HCF) of water usage by such parcel Each parcel will be charged a fixed service charge and a variable commodity charge. The fixed charge will be assessed for each meter that services the facility and will be dependent on the size of the meter. City of Chula Vista Engineering Department 276 Fourth Avenue, Chula Vista, CA 91910 April 2022 2022/04/26 City Council Post Agenda Page 558 of 667 December 2013 MASTER FEE SCHEDULE  FEE BULLETIN 12-200 Page 2 of 4 City of Chula Vista www.chulavistaca.gov 619.476.5380 A rate of return (ROR) of 79% is assumed for all multi-family dwellings and 84% for mobile homes. Multi – Family Billing Formula Total Meter Readings (Monthly) x ROR x HCF Rate for Sewage Class + Fixed Service Charge = Monthly Sewer Charge 3. Sewer Service Charge for Low Income Households Low Income Households (as defined in Fee Bulletin 1-100) including renters of property who are eligible to receive a reduced rate for monthly sewer service charges, shall be billed a commodity rate that is 70% of the prevailing rate. The Finance Department of the City shall make available the required application form and process all applications. Application will require the submittal of information on total household income, the number of persons in the household and the type of dwelling unit. Proof of total annual income shall be furnished. Requests for annual refunds shall be made by eligible households between August 1 and September 30 of each year for the past fiscal year beginning July and ending in June. The applicant will be notified of eligibility status within thirty (30) days of application and if eligible, the refund forwarded within ninety (90) days of application. COMMERCIAL & INDUSTRIAL RATES The sewer service charge for premises used for other than domestic purposes shall be at the prevailing rate per hundred cubic feet (HCF) of water usage. The non-residential sewer service charge shall consist of a fixed service charge and a variable commodity charge. The fixed charge will be assessed for each meter that serves the facility and will be dependent on the size of the meter. The variable commodity charge shall be based on the quantity and strength of the sewage generated using a rate of return (ROR) of 90% and two strength parameters: BOD – biochemical oxygen demand and TSS – total suspended solids concentrations Commercial Billing Formula Total Meter Readings (Monthly) x ROR x HCF Rate for Sewage Class + Fixed Service Charge = Monthly Sewer Charge 1. Rate of Return Unless otherwise established by an approved variance, wastewater discharge shall be assumed to be 90% of water consumed. Therefore, where commercial or industrial facilities are billed on the basis of wastewater discharge, the regular sewer service rate shall be multiplied by 0.90. 2. Wastewater Strength Wastewater strength categories will be determined using either Table 2-2 “City of Chula Vista Compilation of Published Data on Sewer User Strength classifications” (excerpted from the Wastewater User & Rate Restructuring by PBS&J dated May 2003) or actual sampling results, as determined by the City Engineer. Dischargers who believe that their total suspended solids concentration is sufficiently low to qualify for a different category of sewer service charge billing may apply to the City Manager in writing for a variance in accordance with Chula Vista Municipal Code Section 13.14.130. When there is a change in the rate payer, the category will be re-evaluated. TAX BILL Charges for single-family residential dwellings, multiple family dwelling and commercial industrial discharges collected on the Tax bill shall be based on a recent 12 month water usage period. HIGH VOLUME DISCHARGERS Premises that discharge over 25,000 gallons per day (gpd) are classified as high volume dischargers. These dischargers shall be billed bi- monthly by the City of Chula Vista. Wastewater discharge shall be assumed to be 90 percent of water consumed, unless established otherwise by an approved variance. The Sewer Service Charge is determined on an individual basis, and is comprised of a Fixed Service Charge (FSC) and a Variable Commodity Charge (VCC). The FSC is based on the water meter size and the VCC is calculated by multiplying the Sewer Rate by the Volume of Sewer Discharge 2022/04/26 City Council Post Agenda Page 559 of 667 City of Chula Vista www.chulavistaca.gov 619.476.5380 in hundred cubic feet (HCF). The Sewer Rate is determined by the strength of the discharge (Chemical Oxygen Demand (COD) and Total Suspended Solids (TSS)). The Sewer Service Charge is calculated as follows: FSC + VCC = Sewer Service Charge FSC = Based on the water meter size VCC = Sewer Rate ($/HCF) x Volume of Sewer Discharge (HCF) The Sewer Rate is subject to change. Said change is usually necessitated by the increase in the cost of wastewater treatment and the maintenance of the City’s sewer collection system. The Sewer Rate is reviewed on a yearly basis. SEWER SERVICE VARIANCE FEES The owner or occupant of any premises requesting a variance from the sewer service charges pursuant to the provisions of this section and the rules and regulations approved by resolution of the City Council shall pay a fee in the sum of $150.00 to cover the cost of investigation of said request; provided, however, that no fee shall be charged for a request for total exemption from the sewer service charge. In addition, a special handling charge to cover the cost of billing and inspection to be paid per building may be established in the resolution granting the variance, provided that the minimum such charge shall be in the sum of $3.75. 2022/04/26 City Council Post Agenda Page 560 of 667 The fee for an initial, annual renewal, or amended industrial wastewater discharge permit shall be based upon the Industrial User (IU) permit type. The IU permit types are naming conventions originating from the City of San Diego’s Industrial Wastewater Discharge Control Program (Program). The Program generally defines a SIU in accordance with Federal regulations, as an Industrial User that: 1. Types of Industrial User (IU) Permits – The IU permit types assigned through the City of San Diego’s Industrial Wastewater Discharge Control Program based on their approved Pretreatment Program. The Program generally defines a SIU in accordance with Federal regulations, as an Industrial User that: o Is subject to federal categorial pretreatment standards under 40 Code of Regulations (CFR) 403 o Any other industrial discharger that: • Discharges an average of 25,000 gallons per day or more of process wastewater to the publicly owned treatment works. • For groundwater remediation sites, the presence of free product or discharges >14,000 gallons per day have “reasonable potential” and are regulated as SIUs. INDUSTRIAL WASTEWATER DISCHARGE 2. Annual Permit Fee An administrative fee of $25 will be included in each bill in addition to the fee for each permit type to cover bill assembly, review and approval. 3. Compliance Charges Industries not in compliance with industrial wastewater discharge permit requirements shall pay a fee to recover the full cost including overhead of enforcing compliance. Starting Date Permit Type 7/1/22 7/1/23 7/1/24 7/1/25 SIU-Standard 2,250$ 4,500$ 6,749$ 8,999$ SIU-Complex 7,476$ 14,952$ 22,427$ 29,903$ Non-SIU/ Categorical 1,319$ 2,639$ 3,958$ 5,277$ Enhanced Source Control 651$ 1,302$ 1,952$ 2,603$ SIU – Standard Not complex SIU – Complex Typically includes production based, education campuses, hospitals, or facilities with 3 or more sewer connections. Class 2C, 3C, 4C, 2Z, 3Z, & 4Z facilities with a non-discharging categorical process Non-SIU / Categorical Process Includes non-SIU facilities that do not also have non-discharging categorical process and for which local requirements have been established or are required by the Pure Water NPDES permit adopted May 2020. Enhanced Source Control 2022/04/26 City Council Post Agenda Page 561 of 667 RESOLUTION NO.________ RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA: (1) ACCEPTING THE SEWER RATE STUDY; (2) APPROVING THE STUDY’S RECOMMENDATIONS FOR FISCAL YEARS 2021/22 THROUGH 2025/26, (3) ADOPTING INCREASED SEWER RATES AND APPROVING AMENDMENTS TO THE MASTER FEE SCHEDULE; (4) AUTHORIZING THE PASS-THROUGH OF ALL FUTURE FEES AND CHARGES IMPOSED FOR WHOLESALE CHARGES FOR SEWAGE TREATMENT OR WASTEWATER TREATMENT; (5) APPROVING AMENDMENTS TO CITY COUNCIL POLICY 220-04; (6) AUTHORIZES AN INCREASE TO THE SERVICE CHARGE REVENUE ALLOCATIONS TO THE SEWERAGE FACILITIES REPLACEMENT FUND; AND (7) APPROPRIATING 6 MILLION DOLLARS FROM THE TRUNK SEWER CAPITAL FUND TO THE SEWER SERVICE REVENUE FUND WHEREAS, on December 17, 2013, the City Council adopted City Council Resolution No. 2013-267, implementing a five-year rate plan commencing Fiscal Year 2014/15 and amending the Master Fee Schedule accordingly; and WHEREAS, on January 1, 2019, the City retained Willdan Financial Services to prepare the Sewer Rate Study (Study) which was completed in June 2021 (Exhibit 1); and WHEREAS, the purpose of the Study was to develop a 10-year financial plan with the focus on the first 5 years, identifying the revenues required to meet the costs of operating and maintaining an adequate sewer system and identifying adjustments needed to generate sufficient revenue for the systems objectives; and WHEREAS, the Study established the annual revenue needed to meet the utility’s existing and projected obligations for five years (FY 2021/22 to FY 2025/26) and developed a plan to provide for the continued fiscal health of the sewer utility; and WHEREAS, the Study recommendations include: (1) increase the sewer rates to fund the costs of sewer service, (2) implement pass-through rate adjustments for the expenses from City of San Diego Metropolitan Wastewater (Metro); (3) rescind the US EPA Permit Renewal Liability Reserve (Permit Reserve) category, (4) increase the service charge revenue allocations to the Sewerage Facilities Replacement Fund, and (5) allocate $6 million from the Trunk Sewer Capital Fund for payment of a portion of the Metro capital expenses in FY2022/23,; and Increases to Sewer Rates and Pass-Through Rate Adjustments for Metro Expenses 2022/04/26 City Council Post Agenda Page 562 of 667 WHEREAS, the Study’s recommendations include increases to the City’s Sewer Service Charges, as shown in Exhibit 2, which will be needed to meet projected costs of sewer service during the Study period (FY2021/22 to 2025/26); and WHEREAS, the Study analyzed proposed rate increases so that revenues derived from the proposed increased sewer service charges do not exceed the funds required to provide the property related service; and WHEREAS, the Study analyzed proposed rate increases so that sewer service charges proposed to be imposed upon any parcel as an incident of property ownership do not exceed the proportional costs of the service attributable to the parcel; and WHEREAS, sewer service charges imposed are for a service used by, or immediately available to, the owner of the property; and WHEREAS, staff intends to manage all revenues derived from the increased sewer service charges and ensure they shall not be used for any purpose other than that for which the charge was imposed; and WHEREAS, after staff’s review of the Study’s recommendations to increase the proposed rates, the City prepared and provided written notice by mail, in English and Spanish, of the proposed sewer rate increases to all record owners and sewer customers of each identified parcel upon which the increased rate is proposed for imposition and that the notice included the amount of the rate increase, the basis upon which the amount of the proposed rate increase was calculated, the reason for the proposed rate increase, together with the date, time, and location of the public hearing on the proposed rate increase (Exhibit 3); and WHEREAS, the Notice(s) of Public Hearing were mailed to the above record owners 45 days or more prior to the public hearing; and WHEREAS, mailed Notices(s) of Public Hearing that were returned were evaluated and City staff made reasonable efforts to re-mail; and WHEREAS, re-mailed Notices(s) of Public Hearing were mailed 45 days or more prior to the public hearing; and WHEREAS, the City Council held a public hearing on April 26, 2022 to consider the proposed increases to sewer service rates and any protests thereto; and WHEREAS, the City Council considered all protests to the proposed increases to sewer rates at said public hearing; and WHEREAS, the total number of protests against the proposed sewer rate increases were less than a majority of record owners of real property and other persons entitled to submit protests of such increases; and 2022/04/26 City Council Post Agenda Page 563 of 667 2022/04/26 City Council Post Agenda Page 564 of 667 WHEREAS, the Study recommends pass through rate adjustments for Metro costs associated with wholesale charges for sewage treatment; and WHEREAS, California Government Code Section 53756 permits agencies that provide sewer service to adopt a schedule of fees or charges authorizing automatic adjustments for a five- year period that pass through inflationary adjustments and/or changes in wholesale charges from other public agencies providing services such as wastewater treatment; and WHEREAS, the Metro wastewater treatment charges from the City of San Diego will be annually compared to the projected expenses and significant differences applied to the following year’s rates; and WHEREAS, in accordance with California Government Code 53756, notices of the changes as a result of the Metro Pass Through would be sent at least 30 days prior to billing; and WHEREAS, staff recommends that City Council adopt increases to the City’s sewer rates and approve an amendment to the City’s Master Fee Schedule, as recommended by the Study and shown in Exhibit 2, and authorizes and directs City staff to pass-through all future fees and charges imposed on the City by other entities related to wholesale charges for sewage treatment or wastewater treatment, as recommended in the Study; and Rescinding U.S. EPA Permit Renewal Liability Reserve WHEREAS, on December 17, 2013, the City Council adopted City Council Resolution No. 2013-265 creating a Sewer Service Revenue Fund Reserve Policy; and WHEREAS, one of the categories of the Sewer Service Revenue Fund Reserve Policy, the Permit Reserve Category, was established to ensure monies were set aside to fund the Metro costs associated with maintaining the wastewater treatment National Pollution Discharge Elimination System permit (Permit) (e.g. upgrade to secondary treatment of the Point Loma Wastewater Treatment Plant (PLWWTP) or equivalent alternative); and WHEREAS, the City of San Diego’s PLWWTP 2015 Permit waiver, which allows the PLWWTP to treat sewage going to the ocean at an advanced primary level as opposed to the secondary treatment level, was approved by regulators on the condition that the regional Pure Water Program be implemented; and WHEREAS, the City’s portion of the Pure Water expenses are included in the quarterly bills from Metro to the City; and WHEREAS, the basis for establishing the Permit Reserve category as a proactive measure is no longer needed for the City’s Permit Reserve category; and 2022/04/26 City Council Post Agenda Page 565 of 667 WHEREAS, the prior sewer rate study done in 2013 targeted revenue to the Sewerage Facilities Replacement Fund at about 50% of annual depreciation for infrastructure funding needs; and WHEREAS, the current Study recommends an increase in allocation of revenue to the Sewerage Facilities Replacement Fund to target annual revenues equal to annual depreciation and ensure that infrastructure is kept reliable as it shows signs of wear and/or failure; and WHEREAS, staff recommends that the City Council approve the increased allocation of revenue in accordance with the Study’s recommendation; and Increase Service Charge Revenue Allocations to the Sewerage Facilities Replacement Fund WHEREAS, the Study recommends the sewer service revenue allocation be increased to ensure the goals the Sewer Facilities Replacement Fund as outlined in the Study are adequate; and WHEREAS, staff recommends that the City Council approve increasing service charge revenue allocations to the Sewerage Faculties Replacement Fund in accordance with the Study’s recommendation; and Appropriation from Trunk Sewer Capital Fund to the Sewer Service Revenue Fund WHEREAS, on April 2, 1985, City Council adopted Ordinance No. 2107, approving the establishment of the Trunk Sewer Capital Reserve Fund which is used for paying all or part of the cost and expenses to plan and/or evaluate any future proposals for areawide sewage treatment and/or water reclamation systems or facilities; and WHEREAS, the Study recommends use of $6 million from the Trunk Sewer Capital Reserve Fund to pay for a portion of the regional Metro capital during the Study period; and WHEREAS, Staff recommends an appropriation of $6 million dollars from the Trunk Sewer Capital Reserve Fund to the Sewer Services Revenue Fund to be used on Metro related costs in FY 2022/23. NOW, THEREFORE, the City Council finds as follows: 1. A public hearing was held at the regular City Council on April 26, 2022 to consider the proposed increases to sewer rates. 2. Due notice of the public hearing on the proposed increases to sewer rates was given by mail to all record owners of real property in the City of Chula Vista as provided in Government Code Section 53755 and as required by Article 13D, Section 6 of the California Constitution (Proposition 218). 3. At the hearing, the City Council heard testimony for and against the proposed increases and was provided with a staff report recommending their approval. 4. Copies of the written protests were provided and available to the City Council. 5. All protests have been considered by the City Council. 2022/04/26 City Council Post Agenda Page 566 of 667 6. The total number of protests against the proposed sewer rate increases were less than a majority of record owners of real property and other persons entitled to submit protests of such increases. 7. On April 26, 2022, the City Council considered the proposed sewer rate increases and determined to approve increases as set forth below. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista that it: 1. Accepts the Sewer Rate Study (Study), which is attached hereto as Exhibit 1 and incorporated herein. 2. Approves the Study’s recommendations for Fiscal Years 2021/22 through 2025/26, which include: (1) increasing sewer rates to cover costs of sewer service during the Study period; (2) implementing a pass through for the expenses from Metro associated with wholesale charges for sewage treatment; (3) rescinding the US EPA Permit Renewal Liability Reserve (Permit Reserve) category of Sewer Service Revenue Fund Reserve Policy; (4) increasing the service charge revenue allocations to the Sewer Facilities Fund; (5) allocating $6 million from the Trunk Sewer Capital Fund for payment of a portion of the Metro capital expenses in FY2022/23);. 3. Adopts increases to sewer rates as provided in the Study and approves an amendment to Chapter 12-200 of the Master Fee Schedule, which is attached hereto as Exhibit 2 and incorporated herein, to implement the newly adopted sewer rates for Fiscal Years 2021/22 through 2025/26, effective immediately. 4. Authorizes and directs City staff to pass-through all future fees and charges imposed on the City of Chula Vista by other entities related to wholesale charges for sewage treatment or wastewater treatment, for a five-year period beginning July 1, 2022. 5. Approves an amendment to City Council Policy 220-04 (Sewer Service Revenue Fund Reserve Policy), which is attached hereto as Exhibit 4 and incorporated herein, to implement the Study’s recommendation to rescind the US EPA Permit Renewal Liability Reserve (Permit Reserve) category. 6. Authorizes an increase to the service charge revenue allocation to the Sewerage Facilities Replacement Fund as provided in the Study. 7. Appropriates 6 million dollars ($6,000,000) from the Trunk Sewer Capital Reserve Fund to the Sewer Service Revenue Fund to pay for Metro capital expenses during Fiscal Year 2022/23. Presented by Approved as to form by William Valle Glen R. Googins Director of Engineering and Capital Projects/ City Attorney City Engineer Exhibit 1: Sewer Cost of Service Rate Study 2021 Exhibit 2: Amended Master Fee Schedule Exhibit 3: Proposition 218 Notices 2022/04/26 City Council Post Agenda Page 567 of 667 Exhibit 4: Amended Policy 220-04 Sewer Service Revenue Fund Reserve Policy 2022/04/26 City Council Post Agenda Page 568 of 667 Proposed Sewer Rates 1 Website: www.chulavistaca.gov/SewerRates Email: wastewater@chulavistaca.gov Phone: 619-476-5380 Public Hearing Date April 26, 2022 @ 5pm Chula Vista City Hall (276 Fourth Ave, Chula Vista) 2022/04/26 City Council Post Agenda Page 569 of 667 Agenda Items •Public Outreach •Sewer Infrastructure Background •Overview of Expenses •Sewer Service Billing Components •Revenue and Expense Study (Sewer Rate Study) •Questions 22022/04/26 City Council Post Agenda Page 570 of 667 Public Outreach 32022/04/26 City Council Post Agenda Page 571 of 667 Public Outreach •Mailed notices (English and Spanish) •Public Outreach Information Meetings •City Newsletter posting •Social media posts •Website: www.chulavistaca.gov/SewerRates 42022/04/26 City Council Post Agenda Page 572 of 667 5 Date Action Oct. 22, 2021 Posted Sewer Rate Study & Prop. 218 Notice to www.chulavistaca.gov/SewerRates Nov. 22, 2021 Mailed Notice of Sewer Rate Increase (Proposition 218) Dec. 8, 2021 Virtual Public Outreach Meeting Dec. 14, 2021 Virtual Public Outreach Meeting Feb. 10, 2022 2nd Mailing of Notice of Sewer Rate Increase (Proposition 218) April. 26, 2022 Public Hearing @ 5pm at Chula Vista City Hall 276 Fourth Ave, Building A, Chula Vista, CA 2022/04/26 City Council Post Agenda Page 573 of 667 Sewer Infrastructure Background 62022/04/26 City Council Post Agenda Page 574 of 667 72022/04/26 City Council Post Agenda Page 575 of 667 Benefits of sewage collection and treatment •Promotes health by containing sewage •Betters the Environments by keeping sewage out of our water ways •Improves aesthetics by reducing odors and visual disturbances 82022/04/26 City Council Post Agenda Page 576 of 667 Chula Vista –Collection System Asset No. Pipelines 500 miles Maintenance Holes 15,000 Pump Stations 13 Flow meters 12 2022/04/26 City Council Post Agenda Page 577 of 667 10 San Diego – Transport & Treatment 2022/04/26 City Council Post Agenda Page 578 of 667 San Diego Regional Facilities •Point Loma Wastewater Treatment Plant & Outfall •4 Pump Stations •Metro Interceptors & Force Mains •North City Water Reclamation Plant •Metro Biosolids Center •South Bay Wastewater Treatment Plant & Water Reclamation Plant •Pure Water –Phase I & 2 112022/04/26 City Council Post Agenda Page 579 of 667 Overview of Expenses 122022/04/26 City Council Post Agenda Page 580 of 667 Chula Vista Costs (35% of total sewer costs) •Operations and Maintenance Expenses •Provide reliable infrastructure •Capital projects to protect environment 13Chula Vista Costs: $14.5M (Fiscal Year 2021-2022)2022/04/26 City Council Post Agenda Page 581 of 667 San Diego Costs (65% of total sewer costs) •Operations and Maintenance of Regional Facilities •Point Loma WWTP •South Bay Treatment Facilities •Metro Biosolids Center •Pipes, pump stations, etc. •Regional capital projects •Point Loma WWTP •Pipes, pump stations, & manholes •Pure Water Program 14San Diego Regional Costs: $24.5M (Fiscal Year 2021-2022)2022/04/26 City Council Post Agenda Page 582 of 667 Sewer Service Billing Components 152022/04/26 City Council Post Agenda Page 583 of 667 Sewer Charges Each sewer bill has two parts: •Fixed Charge •Volumetric Charge Rates vary based on customer classes: •Single Family •Multi-Family •Mobile Home •Commercial (low, medium, high strength) 162022/04/26 City Council Post Agenda Page 584 of 667 Single Family Residential Sewer Bill Fixed Charge Same charge for all Single-Family Homes Volumetric Charge Single family residential bills are based on water average or water use during winter (November 1 – April 30) and are set for the subsequent year. 172022/04/26 City Council Post Agenda Page 585 of 667 Winter Average (Single Family Only) •Winter averaging is a billing method developed to estimate the amount of water going to the sewer. •This method takes the lowest 2 months of water consumed in the winter or rainy season (November 1 through April 30 or 6 months) as the basis for billing sewer charges throughout the year. •Winter water usage better represents indoor water use which typically goes to the sewer whereas summer water use includes more water used for outdoor usage (e.g. landscaping, swimming pools, etc.). •The lowest consecutive 2-months of winter water usage is converted to a monthly usage and is further reduced by 10% to account for some water not going to the sewer. 182022/04/26 City Council Post Agenda Page 586 of 667 Monthly Single Family Sewer Bill Calculation 19 90% of Winter Average Volume Charge: $/Winter Ave Water Fixed Charge *Single Family Residential does not include multifamily residential (apartments, condos, etc.). Example: [90% x 7 HCF x $4.26/HCF] + $14.53 = $41.37 2022/04/26 City Council Post Agenda Page 587 of 667 Multifamily, Commercial, Industrial •Fixed charge: based on meter size •Volume Charge: based on monthly water usage and a Rate of Return (ROR) to the sewer 20 ROR x Monthly Water Usage Cost / Water [HCF] Fixed Charge Rate of Return (ROR) to the sewer: Multifamily: 79% Mobile Home Park: 84% Commercial/Industrial: 90% HCF = hundred cubic feet 2022/04/26 City Council Post Agenda Page 588 of 667 Revenues and Expenses Study (Sewer Rate Study) 212022/04/26 City Council Post Agenda Page 589 of 667 Sewer Rate Study –Willdan Financial Group •Independent and 3rd Party Study •10 and 5-year Financial Plan •Review included: •Operating and Maintenance expenses •Debt service •Capital Projects projections •Adequacy of Cash Reserves •San Diego Regional Expenses* 22 *San Diego Public Utilities Department 5-Year Financial Outlook published annually2022/04/26 City Council Post Agenda Page 590 of 667 Sewer Rate Study -Recommendations 1.Removal of US EPA Permit Renewal Liability Reserve 2.Implementation of City of San Diego Direct Cost Recovery 3.Annual increases of 4.5% to 5.5% (4 years) 232022/04/26 City Council Post Agenda Page 591 of 667 1. Remove the US EPA Permit Renewal Liability Reserve •Reason for Reserve in 2013 •Capital investments were needed to maintain the permit waiver •Costs were unknown •Financing was unknown •Today •Waiver was renewed on the condition of the water reuse project would be implemented, Pure Water Program •Cost Estimates are known and a maximum contractual amount included •San Diego is financing the capital expenses and including them in the quarterly bills •Reason for Removal •Costs are known •Chula Vista’s contribution is financed •Chula Vista’s contribution is included expense projects •Proposed rates include the financed costs 242022/04/26 City Council Post Agenda Page 592 of 667 2. Implement San Diego Direct Cost Recovery •City of San Diego bills for treatment expenses based on actual costs. •The rates shown include projected San Diego treatment expenses. •Each year the actual expenses will be known, and actual amount will be reflected in customer’s rates the following year. •Notice of changes provided 30-days in advance of billing. 25California Government Code allows pass through of changes in wholesale expenses from other public agencies2022/04/26 City Council Post Agenda Page 593 of 667 3. Proposed Sewer Rates Increases Start Date Sewer Rate Increase Upon Approval 0% July 1, 2022 4.5% July 1, 2023 5% July 1, 2024 5% July 1, 2025 5.5% 262022/04/26 City Council Post Agenda Page 594 of 667 Regional Monthly Sewer Bill –2021 Avg Residence 27$111.96 $65.58 $53.08 $49.82 $49.39 $48.75 $48.00 $47.64 $46.78 $43.23 $42.47 $41.37 $39.52 $34.56 $- $20 $40 $60 $80 $100 $120 2022/04/26 City Council Post Agenda Page 595 of 667 Typical Single Family Residential Bill 2022 2023 2024 2025 2026 Fixed Charge Volume Charge 28 $41.37 $43.22 $45.36 $47.67 $50.29 Rate Through July 1 of [Year] 2022/04/26 City Council Post Agenda Page 596 of 667 29 CURRENT FY2021-22 FY2022-23 FY2023-24 FY2024-25 FY2025-26 RATE INCREASE 0%0%4.5%5%5%5.5% Single Family $14.53 $14.53 $15.18 $15.94 $16.74 $17.66 All Others Meter Size: 5/8"$14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 3/4"$14.53 $14.53 $15.18 $15.94 $16.74 $17.66 Meter Size: 1"$28.49 $28.49 $29.77 $31.26 $32.82 $34.63 Meter Size: 1 1/2"$51.77 $51.77 $54.10 $56.80 $59.64 $62.93 Meter Size: 2"$79.68 $79.68 $83.27 $87.43 $91.80 $96.85 Meter Size: 3"$154.15 $154.15 $161.08 $169.14 $177.59 $187.36 Meter Size: 4"$237.91 $237.91 $248.62 $261.05 $274.10 $289.17 Meter Size: 6"$470.61 $470.61 $491.70 $516.38 $542.20 $572.02 Meter Size: 8"$936.01 $936.01 $978.13 $1,027.04 $1,078.39 $1,137.70 Residential Single Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Multi-Family $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Mobile Homes $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Non-Residential Commercial - Low $4.26 $4.26 $4.45 $4.67 $4.91 $5.18 Commercial - Med $6.02 $6.02 $6.29 $6.61 $6.94 $7.32 Commercial - High $9.59 $9.59 $10.02 $10.52 $11.05 $11.66 Special Users Varies Varies Varies Varies Varies Varies VOLUME CHARGE/HCF* MONTHLY FIXED SERVICE CHARGE *HCF - Hundred Cubic Feet Rates include the Sewer Service Charge and Sewer Facilities Replacement Fee. The rates do not include the Storm Drain Fee.2022/04/26 City Council Post Agenda Page 597 of 667 Questions 302022/04/26 City Council Post Agenda Page 598 of 667 Background Slides 312022/04/26 City Council Post Agenda Page 599 of 667 Sewer Variance Process •Written request to the City Manager •Application Fee of $150 to cover investigation costs •Residential –requires sufficient evidence to prove that the winter average does not correlate to the amount of sewage discharged •Non-residential –water consumption is not substantially discharged into the sewer system •Detailed in Chula Vista Municipal Code 13.14.130 322022/04/26 City Council Post Agenda Page 600 of 667 332022/04/26 City Council Post Agenda Page 601 of 667 342022/04/26 City Council Post Agenda Page 602 of 667 Master Fee Schedule 352022/04/26 City Council Post Agenda Page 603 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE Contract Amendment: Approve an Amendment to the Contract with the Board of Administration and CalPERS for Local Safety Police Officer’s Association Classic Members to Make an Additional Contribution Pursuant to Government Code §20516 Report Number: 22-0120 Location: No specific geographic location Department: Human Resources Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action A) Adopt a resolution of intention to approve an amendment to the contract between the Board of Administration, California Public Employees’ Retirement System (CalPERS) and the City of Chula Vista to provide a mandatory employee contribution for all classic Local Safety members of the Chula Vista Police Officers’ Association of 1% of salary effective July 1, 2022, as provided under Government Code §20516, and B) introduce an ordinance approving an amendment to the contract between the Board of Administration, California Public Employees’ Retirement System (CalPERS) and the City of Chula Vista to provide a mandatory employee contribution for all classic Local Safety members of the Chula Vista Police Officers Association of 1% of salary as provided under Government Code §20516. (First Reading) SUMMARY Per the Memorandum of Understanding (MOU) between the City of Chula Vista and the Chula Vista Police Officer’s Association (POA), effective May 4, 2021, an agreement was reached to provide Normal Cost Sharing for all Classic (Tier I & II) Local Safety Police members pursuant to Government Code Section 20516(a) to reach the CalPERS standard of equal sharing of normal costs that will require mandatory employee contributions of an additional 1% of salary starting July 1, 2022. In order to amend the City’s current CalPERS retirement contract and to meet the provisions of California Government Code §20516 (Employees Sharing Additional Cost), CalPERS requires specific procedures to be followed. The first step in the process is for the City Council to adopt a Resolution of Intention (Attachment 1) and an Ordinance (Attachment 2). The first reading of the Ordinance may occur at the same time as the 2022/04/26 City Council Post Agenda Page 604 of 667 P a g e | 2 adoption of the resolution. The second reading of the Ordinance will occur at the City Council meeting of May 17, 2022. Concurrently, CalPERS also requires that the impacted Classic (Tier I & II) members elect this change in a secret ballot election. A CalPERS employee election ballot will be distributed to the members for this purpose and must be certified by the City. Staff is requesting City Council’s approval to adopt the Resolution of Intention and Ordinance as required by CalPERS. ENVIRONMENTAL REVIEW The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION Not applicable. DISCUSSION The City of Chula Vista reached agreement with the Chula Vista Police Officers’ Association for successor Memoranda of Understanding (MOU) for the period May 4, 2021 through June 30, 2024. The MOU includes a cost sharing provision in which Classic (Tier I and Tier II) Local Safety Police CalPERS Members represented by POA contribute an additional 1% toward their CalPERS retirement benefits under Government Code §20516 effective July 1, 2022. Specifically, the Chula Vista Police Officer’s Association Memorandum of Understanding (Article 2.18(2)) states as follows: [Normal Cost Sharing] Tier I Employees will also contribute pursuant to Government Code (“GC”) section 20516(a) to reach the CalPERS standard of equal sharing of normal costs as follows: An additional 1% starting the first full pay period of July 2022 and an additional 1% (additional total 2%) starting the first full pay period of July 2023 for a total of 11% for the employee share. If a secret ballot election held in accordance with §20516(a) is not successful, employee contribution of 1% (July 2022) and 2% (July 2023) will be made to the employers’ contribution account pursuant to GC section 20516(f). [Normal Cost Sharing] Tier II Employees will also contribute pursuant to Government Code section 20516(a) to reach the CalPERS standard of equal sharing of normal costs as follows: An additional 1% starting the first full pay period of July 2022 and an additional 1% (additional total 2%) starting the first full pay period of July 2023 for a total of 11% for the employee share. If a secret ballot election held in accordance with §20516 is not successful, employee contribution of 1% (July 2022) and 2% (July 2023) will be made to the employers’ contribution account pursuant to GC section 20516(f). While the MOU furthermore states an additional 1% employee contribution to be effective in the first full pay period of July 2023, CalPERS requires that this additional contribution be brought forth for Council approval separately in the fiscal year prior to the contribution taking into effect. An amendment to the CalPERS contract will allow for the employee contribution rates to increase to 10% (currently 9%) effective July 1, 2022, for Classic Local Safety Police members represented by the POA. This action will shift 1% of expected costs from the City of Chula Vista to City Classic (Tier I & Tier II) Local Safety Police employees. In order to amend the City’s current CalPERS retirement contract and to meet the provisions of California Government Code §20516 (Employees Sharing Additional Cost), CalPERS requires specific procedures to be followed. The first step in the process is for the City Council to adopt a Resolution of Intention (Attachment 1) and an Ordinance (Attachment 2). A draft version of the contract amendment 2022/04/26 City Council Post Agenda Page 605 of 667 P a g e | 3 has also been included as an exhibit to the Resolution of Intention (Attachment 1). The first reading of the Ordinance may occur at the same time as the adoption of the resolution. The second reading of the Ordinance will occur at the City Council meeting of May 17, 2022. Concurrently, CalPERS also requires that the impacted Classic (Tier I & II) Local Safety Police members elect this change in a secret ballot election. A CalPERS employee election ballot will be distributed to the members for this purpose and must be certified by the City. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT There is no current year fiscal impact for this action. ONGOING FISCAL IMPACT The ongoing fiscal impact for this action, irrespective of the outcome of the membership vote as described in Article 2.18 of the POA MOU, will result in estimated employee contributions resulting in a decreased cost to the City in Fiscal Year 2023 at $129,474 and in Fiscal Year 2024 at $268,914. Costs will change as Tier 1 and Tier 2 employees promote, demote, retire, or change employment status. The costs will be incorporated into the baseline salary budgets of the respective funds in future fiscal years. The following table reflects the estimated employee contribution resulting in estimated costs by fund: ATTACHMENTS 1. Resolution of Intention – CalPERS Contract Amendment 2. Ordinance – CalPERS Contract Amendment Staff Contact: Courtney Chase, Director of Human Resources/Director of Risk Management Fund FY 2023 FY 2024 General Fund (111,808) (232,224) 2018 Measure A Sales Tax (16,313) (33,874) State Grants (1,353) (2,815) TOTAL ESTIMATED COSTS (129,474) (268,914) 2022/04/26 City Council Post Agenda Page 606 of 667 RESOLUTION NO. __________ RESOLUTION OF INTENTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION, CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM AND THE CITY OF CHULA VISTA TO PROVIDE A MANDATORY EMPLOYEE CONTRIBUTION FOR ALL CLASSIC LOCAL SAFETY MEMBERS OF THE CHULA VISTA POLICE OFFICERS’ ASSOCIATION OF ONE PERCENT OF SALARY EFFECTIVE JULY 1, 2022 WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and WHEREAS, the following is a statement of the proposed change: To provide Section 20516 (Employees Sharing Additional Cost) of 1% for classic local police members in the Chula Vista Police Officer’s Association NOW, THEREFORE, BE IT RESOLVED that the governing body of the City of Chula Vista does hereby give notice of intention to approve an amendment to the contract between the City of Chula Vista and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof. Presented by Courtney Chase Director of Human Resources/Risk Management Approved as to form by Glen R. Googins City Attorney Attachment Exhibit 2022/04/26 City Council Post Agenda Page 607 of 667 RESOLUTION OF INTENTION TO APPROVE AN AMENDMENT TO CONTRACT BETWEEN THE BOARD OF ADMINISTRATION CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM AND THE CITY COUNCIL CITY OF CHULA VISTA WHEREAS, the Public Employees' Retirement Law permits the participation of public agencies and their employees in the Public Employees' Retirement System by the execution of a contract, and sets forth the procedure by which said public agencies may elect to subject themselves and their employees to amendments to said Law; and WHEREAS, one of the steps in the procedures to amend this contract is the adoption by the governing body of the public agency of a resolution giving notice of its intention to approve an amendment to said contract, which resolution shall contain a summary of the change proposed in said contract; and WHEREAS, the following is a statement of the proposed change: To provide Section 20516 (Employees Sharing Additional Cost) of 1% for classic local police members in the Chula Vista Police Officer’s Association. NOW, THEREFORE, BE IT RESOLVED that the governing body of the above agency does hereby give notice of intention to approve an amendment to the contract between said public agency and the Board of Administration of the Public Employees' Retirement System, a copy of said amendment being attached hereto, as an "Exhibit" and by this reference made a part hereof. By:_________________________________ Presiding Officer _________________________________ Title ________________________________ Date adopted and approved (Amendment) CON-302 (Rev. 3/9/2016 rc) 2022/04/26 City Council Post Agenda Page 608 of 667 2022/04/26 City Council Post Agenda Page 609 of 667 2022/04/26 City Council Post Agenda Page 610 of 667 2022/04/26 City Council Post Agenda Page 611 of 667 2022/04/26 City Council Post Agenda Page 612 of 667 2022/04/26 City Council Post Agenda Page 613 of 667 2022/04/26 City Council Post Agenda Page 614 of 667 2022/04/26 City Council Post Agenda Page 615 of 667 ORDINANCE NO. ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AUTHORIZING THE AMENDMENT TO THE CONTRACT BETWEEN THE CITY AND THE BOARD OF ADMINISTRATION OF THE CALIFORNIA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM TO PROVIDE A MANDATORY EMPLOYEE CONTRIBUTION FOR ALL CLASSIC LOCAL SAFETY MEMBERS OF THE CHULA VISTA POLICE OFFICERS’ ASSOCIATION OF ONE PERCENT OF SALARY EFFECTIVE JULY 1, 2022 WHEREAS, the City Council is to amend the contract between the City of Chula Vista and the California Public Employees’ Retirement System to provide a mandatory employee contribution for all Local Safety Police Classic members of the Chula Vista Police Officers’ Association of 1% of salary effective July 1, 2022; and WHEREAS, the Public Employees’ Retirement Law (PERL) permits the participation of public agencies and their employees in the Public Employees’ Retirement System by the execution of a contract, and sets forth the procedure by which public agencies may elect to subject themselves and their employees to amendments of the PERL; and WHERES, one of the steps in the procedure to amend this contract is the adoption by the governing body of the public agency of an ordinance to approve an amendment to the contract. NOW THEREFORE the City Council of the City of Chula Vista does ordain as follows: Section I. The amendment to the contract between the City Council of the City of Chula Vista and the Board of Administration, California Public Employees’ Retirement System is hereby authorized, a copy of said amendment is attached hereto, marked Exhibit, and by which reference made a part hereof as though herein set out in full. Section II. Severability If any portion of this Ordinance, or its application to any person or circumstance, is for any reason held to be invalid, unenforceable or unconstitutional, by a court of competent jurisdiction, that portion shall be deemed severable, and such invalidity, unenforceability or unconstitutionalit y shall not affect the validity or enforceability of the remaining portions of the Ordinance, or its application to any other person or circumstance. The City Council of the City of Chula Vista hereby declares that it would have adopted each section, sentence, clause or phrase of this Ordinance, irrespective of the fact that any one or more other sections, sentences, clauses or phrases of the Ordinance be declared invalid, unenforceable or unconstitutional. Section III. Construction 2022/04/26 City Council Post Agenda Page 616 of 667 Ordinance Page 2 The City Council of the City of Chula Vista intends this Ordinance to supplement, not to duplicate or contradict, applicable state and federal law and this Ordinance shall be construed in light of that intent. Section IV. Effective Date This Ordinance shall take effect and be in force on the thirtieth day after its final passage. Section V. Publication The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same to be published or posted according to law. Presented by Approved as to form by _____________________________________ ___________________________________ Courtney Chase Glen R. Googins Director of Human Resources/ City Attorney Risk Management 2022/04/26 City Council Post Agenda Page 617 of 667 CalPERS Contract Amendment: Local Safety Police Classic Members’ Additional Retirement Contribution 2022/04/26 City Council Post Agenda Page 618 of 667 Background •Chula Vista Police Officer’s Association Memorandum of Understanding –May 4, 2021-June 30, 2024 •MOU includes cost sharing provision pursuant to Government Code section 20516 to reach the CalPERS standard of equal sharing of normal costs: ‣1% effective July 1, 2022 (Total of 10%) ‣Additional 1% employee contribution July 14, 2023 (Total 11%) 2022/04/26 City Council Post Agenda Page 619 of 667 Timeline For Implementation APRIL 26, 2022 Request Council approval for Resolution of Intention and 1st Reading of Ordinance to adopt CalPERS Contract Amendment APRIL 27 –May 10, 2022 Classic POA Members’ Employee Secret Ballot Election MAY 17, 2022 Return to Council approval for final adoption of Resolution and 2nd Reading of Ordinance July 1, 2022 Effective Date of Additional 1% Classic POA Employee Contribution 2022/04/26 City Council Post Agenda Page 620 of 667 v . 0 03 P a g e | 1 April 26, 2022 ITEM TITLE San Diego Community Power: Presentation by San Diego Community Power Chief Operating Officer Cody Hooven Regarding the Residential Power Launch in Chula Vista Report Number: 22-0128 Location: No specific geographic location Department: Economic Development Environmental Notice: The activity is not a "Project" as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required. Recommended Action Hear the presentation. SUMMARY San Diego Community Power will provide a presentation on their Phase 3 residential enrollment that will begin in May for Chula Vista. ENVIRONMENTAL REVIEW The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as d efined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required. BOARD/COMMISSION/COMMITTEE RECOMMENDATION The Sustainability Commission received a presentation on San Diego Community Power’s Residential launch in their March meeting. 2022/04/26 City Council Post Agenda Page 621 of 667 P a g e | 2 DISCUSSION No staff report associated with this item, presentation only. DECISION-MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site-specific and consequently, the real property holdings of the City Council members do not create a disqualifying real property-related financial conflict of interest under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT-YEAR FISCAL IMPACT No Current Year Fiscal Impact ONGOING FISCAL IMPACT No Ongoing Fiscal Impact ATTACHMENTS 1) San Diego Community Power Presentation Staff Contact: Cory Downs, Conservation Specialist. 2022/04/26 City Council Post Agenda Page 622 of 667 Residential Enrollment Update Chula Vista City Council April 26th, 2022 2022/04/26 City Council Post Agenda Page 623 of 667 2 Who is San Diego Community Power? 2022/04/26 City Council Post Agenda Page 624 of 667 3 How it Works 2022/04/26 City Council Post Agenda Page 625 of 667 4 Our Values Choice = Ratepayers Benefit:A monopoly has less incentive to invest in making its customers happy -if there's a choice between improving service and profit, the numbers will always win. SDCP is Local, Open, and Accountable:SDCP is fully transparent in its operations –all meetings and local, open to the public. Clear Path to 100% Renewable:SDCP is the first CCA to codify the goal to reach 100%renewable energy by 2035 or sooner in our founding agreement. Striving for Equity: We promote investment in Communities of Concern to ensure clean energy benefits for everyone, not just a few. 2022/04/26 City Council Post Agenda Page 626 of 667 5 Successes in 2021 •Transitioned from planning mode to a fully operational service provider in the last 12 months Built a core internal team Established a partnership with San Diego Gas & Electric Formed our Community Advisory Committee •Launched municipal and commercial and industrial service in March and June of 2021 Currently serving more than 70,000 customers representing more than 50% of forecasted eligible energy load Enrolled many Power100 Champions like San Diego International Airport and Illumina •Signed four long-term power purchase agreements with leading renewable energy providers to bring new generation and resiliency to the energy grid Projects will generate a combined 340 MW of solar energy and 220 MW of battery storage, designed to deliver power during evenings and help shift region’s reliance on natural gas 2022/04/26 City Council Post Agenda Page 627 of 667 6 Power Projects Long-term renewable projects •JVR Energy Park:90 MW Solar +70 MW Storage •IP Oberon: 150 MW Solar •Vikings Energy Farm: 100 MW Solar + up to 150 MW Storage •Duran Mesa, LLC: 50 MW Wind Other power programs •Net energy metering incentives •Feed-in tariff –incentives for communities of concern build out •Community Power Plan –in development starting with community needs assessment •Advocacy for ratepayers in regulatory and legislative arenas 390 Megawatts of solar and wind 4 Power Contracts 220 Megawatts of storage 2022/04/26 City Council Post Agenda Page 628 of 667 7 Compare Renewable Energy 31% 100% 50% 0%10%20%30%40%50%60%70%80%90%100% Power100 PowerOn* SDG&E Launch 2019 *SDCP’s PowerOn product is 50% Renewable + 5% carbon-free 2022/04/26 City Council Post Agenda Page 629 of 667 8 How Does SDCP Compare to SDG&E? •SDCP’s Board strives to maintain cost competitiveness while overall costs rise •Higher renewable content (50% SDCP vs 31% SDG&E) •Power100 program cost is significantly lower than SDG&E’s EcoChoice •Community Power Plan and other programs underway 2022/04/26 City Council Post Agenda Page 630 of 667 9 Phase 1 March 2021: 600+ Municipal accounts Phase 2 June 2021: 72,000+ Commercial & Industrial accounts* Phase 3 February 2022: Imperial Beach Residents Phase 3 March 2022: La Mesa Residents Phase 3 April 2022: Encinitas Residents Phase 3 May 2022: San Diego & Chula Vista Residents Phase 4 2023: San Diego County & National City Enrollment Schedule 2022/04/26 City Council Post Agenda Page 631 of 667 10 What’s (not) Changing What’s Not Changing •Billing (still one bill from SDG&E) •Service reliability (SDG&E still responsible) •Rate structures (rate schedules align with SDG&E offerings, including the Time-of - Use periods) •Discounts (e.g., CARE/FERA) •Your day-to-day •You don’t have to do a thing to enroll and receive cleaner energy! What’s Changing •Higher renewable energy •An effective customer service team •Competitive rates •Reinvesting back into the community •New programs addressing local needs 2022/04/26 City Council Post Agenda Page 632 of 667 11 Understanding Your Bill Online Bill Estimator Bill Explainer Video 2022/04/26 City Council Post Agenda Page 633 of 667 12 Getting the Word Out 2022/04/26 City Council Post Agenda Page 634 of 667 13 Public Engagement EventsOutreach and Engagement 2022/04/26 City Council Post Agenda Page 635 of 667 Thank you 2022/04/26 City Council Post Agenda Page 636 of 667 2022/04/26 City Council Post Agenda Page 637 of 667 2022/04/26 City Council Post Agenda Page 638 of 667 2022/04/26 City Council Post Agenda Page 639 of 667 2022/04/26 City Council Post Agenda Page 640 of 667 2022/04/26 City Council Post Agenda Page 641 of 667 2022/04/26 City Council Post Agenda Page 642 of 667 2022/04/26 City Council Post Agenda Page 643 of 667 2022/04/26 City Council Post Agenda Page 644 of 667 2022/04/26 City Council Post Agenda Page 645 of 667 2022/04/26 City Council Post Agenda Page 646 of 667 2022/04/26 City Council Post Agenda Page 647 of 667 2022/04/26 City Council Post Agenda Page 648 of 667 2022/04/26 City Council Post Agenda Page 649 of 667 2022/04/26 City Council Post Agenda Page 650 of 667 2022/04/26 City Council Post Agenda Page 651 of 667 2022/04/26 City Council Post Agenda Page 652 of 667 2022/04/26 City Council Post Agenda Page 653 of 667 2022/04/26 City Council Post Agenda Page 654 of 667 2022/04/26 City Council Post Agenda Page 655 of 667 2022/04/26 City Council Post Agenda Page 656 of 667 2022/04/26 City Council Post Agenda Page 657 of 667 2022/04/26 City Council Post Agenda Page 658 of 667 2022/04/26 City Council Post Agenda Page 659 of 667 2022/04/26 City Council Post Agenda Page 660 of 667 2022/04/26 City Council Post Agenda Page 661 of 667 2022/04/26 City Council Post Agenda Page 662 of 667 2022/04/26 City Council Post Agenda Page 663 of 667 2022/04/26 City Council Post Agenda Page 664 of 667 2022/04/26 City Council Post Agenda Page 665 of 667 2022/04/26 City Council Post Agenda Page 666 of 667 2022/04/26 City Council Post Agenda Page 667 of 667