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City Council Agenda 05-08-2017MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, APRIL 24, 2017 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Black at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Dieringer, Mirsch, Pieper, Wilson and Mayor Black. Councilmembers Absent: None. Others Present: Raymond R. Cruz, City Manager. Mike Jenkins, City Attorney. Yolanta Schwartz, Planning Director. Terry Shea, Finance Director. Heidi Luce, City Clerk. Jim Walker, Budget Consultant. Battalion Chief Kirby Neese, Los Angeles County Fire Department. James Aichele, 14 Crest Road West. OPEN AGENDA - PUBLIC COMMENT WELCOME Battalion Chief Kirby Neese, Los Angeles County Fire Department introduced himself stating that effective April 1st, he is the new Chief assigned to Battalion 14 which serves the City of Rolling Hills. Councilmember Pieper asked Battalion Neese to direct his personnel to be vigilant in enforcement of brush clearance and dead vegetation removal. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of April 10, 2017. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of March 2017. RECOMMENDATION: Approve as presented. Councilmember Dieringer moved that the City Council approve the items on the consent calendar as presented. Councilmember Pieper seconded the motion, which carried without objection. COMMISSION ITEMS None. PUBLIC HEARINGS None. OLD BUSINESS None. NEW BUSINESS None. -1- At the suggestion of the City Manager and hearing no objection, Mayor Black stated that Matters from Staff will be taken before Matters from the City Council. MATTERS FROM STAFF QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING MARCH 31, 2017. Finance Director Shea presented the investment report for the quarter ending March 31, 3017. He stated that interest income is up compared to the same quarter of the previous year and the balance in the CERBT investment is up over $200,000 in the six years since the investment was made. In response to Councilmember Dieringer, Finance Director Shea noted that there was a typographical error on circle page 5 on the investment report and it will be corrected going forward. The quarterly investment report for the quarter ending March 31, 2017 was received and filed. FY 2017/2018 BUDGET PREPARATION DOCUMENTS 1) FY 2016/2017 YEAR-END REVENUE AND EXPENDITURE PROJECTIONS 2) FY 2017/2018 CONSUMER PRICE INDEX (CPI) ADJUSTMENT FOR BUDGET AND SOLID WASTE COLLECTION SERVICES The City's Budget Consultant Jim Walker reviewed the Fiscal Year 2017/2018 budget preparation documents including the FY 16/17 revenue and expenditure projections which are on track to end with an approximate $200,000 budget surplus before transfers; and the proposed 1.1% CPI increase for refuse service and 2.7% CPI increase to be used for budget preparation purposes. The budget preparation documents were received and filed. CONSIDERATION AND APPROVAL OF THE CITY OF ROLLING HILLS INVESTMENT POLICY; FINANCIAL, BUDGET AND DEBT POLICIES; FUND BALANCE POLICY; AND RESOLUTION NO. 953 — ASSET CAPITALIZATION POLICY. Finance Director Shea stated that as part of the budget preparation process and during the audit process the City's financial policies are reviewed and based on that review, there are no recommended changes for the coming year. Councilmember Dieringer suggested changing the language for the Capital Improvement Fund to make it clearer that the fund is not being eliminated, Following brief discussion, Councilmember Dieringer moved as such and the motion failed for lack of a second. Councilmember Pieper moved that the City Council approve the policies as presented. Mayor Pro Tem Wilson seconded the motion, which carried without objection. DISCUSSION CONCERNING THE CONSIDERATION OF CHANGING THE RATE FOR THE CITY OF ROLLING HILLS BUILDING PERMIT RELATED FEES AND OTHER FEE • CHANGES. City Manager Cruz presented the staff report on proposed changes to building permit related fees and other miscellaneous fees. He stated that the Finance/Budget/Audit Committee discussed the fees and recommends lowering the multiplier for County building permit related fees to 2.25% as well as lowering several other development related fees. He stated that bases on staff's evaluation, the current fees do not cover the cost associated with providing those services and the proposed reduction in the building permit multiplier would result in an approximate $46,966 decrease in revenue He stated that staff's concern with lowering the fees is that in times of an economic downturn, this would result in a significant decrease in revenue for the city recognizing that the city have very limited revenue sources. Councilmember Mirsch commented that she conceded to the recommended fee decreases given that the City does have a revenue surplus each year. Councilmember Dieringer expressed concern over lowering the fees and suggested that instead, the City should use the surplus to fund the City's ADA compliance efforts so that the risk of lawsuits is reduced. She further commented that the City should also maintain healthy reserves so that in the event of an emergency or unforeseen expense, the city is not at risk of bankruptcy. Councilmembers Pieper and Wilson expressed support for lowering the fees. Councilmember Dieringer moved that the City Council leave the fees as is and not make any of the proposed decreases to the fees. The motion failed for lack of a second. Following further discussion, Councilmember Mirsch moved that the City Council direct staff to prepare Minutes City Council Meeting 04-24-17 -2- a resolution amending the following planning and development related fees: Lighting ordinance modification Preparation of Negative Declaration or MND Environmental Impact Report Final Parcel/Tract Map Zoning violation and construction penalty fee Parks and Recreation Fee $375 $50 (plus State Fees) Consultant fee only County fee only $1,500 Each new residential dwelling shall pay 2% of first $100,000 of construction valuation plus .25% of such valuation over $100, 000 and that the City Council keep the following fees at the amount currently listed: View Impairment — Review by Committee on $2,000 Trees and Views processing fee Building Permit, Plumbing Permit, Mechanical Permit and Electrical Permit 2.5 times County fee Councilmember Pieper seconded the motion. Following brief discussion, the motion carried without objection. DISCUSSION AND CONSIDERATION OF DEVELOPING AN ORDINANCE TO REGULATE DRONES IN THE CITY OF ROLLING HILLS. City Manager Cruz stated that this matter was agenized for discussion and consideration at the request of the Mayor and upon having received several complaints regarding drones. Councilmember Pieper expressed concern that it would be very difficult to enforce a law regulating drones. City Attorney Jenkins commented that if the City Council were to direct staff to prepare an ordinance based on the example provide from the City of Hermosa Beach, he would suggest eliminating the permitting requirement. Mayor Black asked for public comment. Jim Aichele, 14 Crest Road West addressed the City Council in support of the City Council adopting an ordinance to regulate drones. Following brief discussion, no action was taken. Consideration of this matter was tabled until the May 8, 2017 meeting of the City Council. The City Council was provided a DRAFT ordinance from the City of Hermosa Beach to review for discussion at the next meeting. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS DISCUSSION AND POSSIBLE DIRECTION TO FORMALLY OPPOSE SB 231 (HERTZBERG) CONCERNING THE RIGHTS TO VOTE ON TAXES ACT. (ORAL) Councilmember Dieringer informed the City Council that there is pending legislation that could limit voters' rights to vote on fees that are added to the tax bill and suggested that the City submit a letter in opposition to the proposed legislation. Councilmember Pieper commented that he is not in favor of the City taking a position on pending legislation. Following brief discussion, Councilmember Dieringer moved that the City Council direct staff to prepare a letter opposing SB 231 for the Mayor's signature per the example provided by the City of Glendora as amended. Councilmember Mirsch seconded the motion, which carried with Councilmember Pieper opposed. DISCUSSION AND CONSIDERATION OF 2017/2018 APPOINTMENTS TO THE CITY COUNCIL FINANCE/BUDGET/AUDIT COMMITTEE AND PERSONNEL COMMITTEE. (ORAL) Mayor Black recommended that Councilmember Mirsch and himself remain on the Finance/Budget/Audit Committee; and Councilmembers Dieringer and Pieper be appointed to the Personnel Committee. Mayor Black called for a motion. Councilmember Wilson moved that the City Council appoint Councilmember Mirsch and Mayor Black to Minutes City Council Meeting 04-24-17 -3- i • the Finance/Budget/Audit Committee; and appoint Councilmembers Dieringer and Pieper to the Personnel Committee. Councilmember Dieringer seconded the motion, which carried with Councilmembers Mirsch and Pieper opposed. CLOSED SESSION None. ADJOURNMENT Hearing no further business before the City Council, Mayor Black adjourned the meeting at 8:03 p.m. The next regular meeting of the City Council is scheduled to be held on Monday, May 8, 2017 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, Heidi Luce City Clerk Approved, James ;1 k, M.D. MayorL j Minutes City Council Meeting 04-24-17 -4- CITY OF ROLLING HILLS PROOF OF SERVICE BY MAIL AND POSTING STATE OF CALIFORNIA ss COUNTY OF LOS ANGELES I am a citizen of the United States. I am over the age of eighteen years and not a party to the within proceeding; my business address is 2 Portuguese Bend Road, Rolling Hills, California. On the 21st day of April, 2017, I serve the within City Council Meeting 04/24/2017 Regular Meeting a copy of which is annexed hereto and made a part hereof, and the person, or persons, named below were emailed or mailed the agenda: E -MAILED MAILED Interacted RH Web site listSery Interested parties ies DropBox City Attorney CouncilMembers Dieringer, Pieper, Black, Mirsch and Wilson DELIVERED City Manager City Council Also posted at City Hall, at www.Rolling-Hills.org and PDF's in DropBox. I declare under penalty of perjury, that the foregoing is true and correct. Executed on the 21st day of April, 2017 at Rolling Hills, California. Ewa Nikodem Administrative Assistant Rafie geeed INCORPORATED JANUARY 24, 1957 AGENDA REGULAR MEETING NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 CITY COUNCIL CITY OF ROLLING HILLS MONDAY, APRIL 24, 2017 7:00 P.M. Next Resolution No. 1206 Next Ordinance No. 352 1. CALL TO ORDER 2. ROLL CALL 3. OPEN AGENDA - PUBLIC COMMENT WELCOME This is the appropriate time for members of the public to make comments regarding the items on the consent calendar or items not listed on this agenda. Pursuant to the Brown Act, no action will take place on any items not on the agenda. 4. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of April 10, 2017. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Financial Statement for the Month of March 2017. RECOMMENDATION: Approve as presented. 5. COMMISSION ITEMS NONE. 6. PUBLIC HEARINGS NONE. 7. OLD BUSINESS NONE. 8. NEW BUSINESS NONE. Page 1 of 2 9. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS A. DISCUSSION AND POSSIBLE DIRECTION TO FORMALLY OPPOSE SB 231 (HERTZBERG) CONCERNING THE RIGHTS TO VOTE ON TAXES ACT. (ORAL) B. DISCUSSION AND CONSIDERATION OF 2017/2018 APPOINTMENTS TO THE CITY COUNCIL FINANCE/BUDGET/AUDIT COMMITTEE AND. PERSONNEL COMMITTEE. (ORAL) 10. MATTERS FROM STAFF A. QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR . THE QUARTER ENDING MARCH 31, 2017. B. FY 2017/2018 BUDGET PREPARATION DOCUMENTS 1) FY 2016/2017 YEAR-END REVENUE AND EXPENDITURE PROJECTIONS 2) FY 2017/2018 CONSUMER PRICE INDEX (CPI) ADJUSTMENT FOR BUDGET AND SOLID WASTE COLLECTION SERVICES C. CONSIDERATION AND APPROVAL OF THE CITY OF ROLLING HILLS INVESTMENT POLICY; FINANCIAL, BUDGET AND DEBT POLICIES; FUND BALANCE POLICY; AND RESOLUTION NO. 953 — ASSET CAPITALIZATION POLICY. D. DISCUSSION CONCERNING THE CONSIDERATION OF CHANGING THE RATE FOR THE CITY OF ROLLING HILLS BUILDING PERMIT RELATED FEES AND OTHER FEE CHANGES. E. DISCUSSION AND CONSIDERATION OF DEVELOPING AN ORDINANCE TO REGULATE DRONES IN THE CITY OF ROLLING HILLS. 11. CLOSED SESSION NONE. 12. ADJOURNMENT Next meeting: Monday, May 8, 2017 at 7:00 p.m. in the Council Chamber, Rolling Hills City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Public Comment is welcome on any item prior to City Council action on the item. Documents pertaining to an agenda item received after the posting of the agenda are available for review in the City Clerk's office or at the meeting at which the item will be considered. In compliance with the Americans with Disabilities Act (ADA), if you need special assistance to participate in this meeting due to your disability, please contact the City Clerk at (310) 377-1521 at least 48 hours prior to the meeting to enable the City to make reasonable arrangements to ensure accessibility and accommodation for your review of this agenda and attendance at this meeting. City Council Agenda 04/24/17 Page 2 of 2 DRAFT Agenda Item No. 4-A Meeting Date: 04/24/17 MINUTES OF A REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS, CALIFORNIA MONDAY, APRIL 10, 2017 CALL TO ORDER A regular meeting of the City Council of the City of Rolling Hills was called to order by Mayor Black at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. ROLL CALL Councilmembers Present: Dieringer, Mirsch, Pieper, Wilson and Mayor Black. Councilmembers Absent: None. Others Present: Raymond R. Cruz, City Manager. Mike Jenkins, City Attorney. Terry Shea, Finance Director. Julia Stewart, Assistant Planner. Heidi Luce, City Clerk. Marilyn Lyon, SBCCOG/SBESC. Judy Yamato, 5 Sagebrush Lane. OPEN AGENDA - PUBLIC COMMENT WELCOME None. CONSENT CALENDAR Matters which may be acted upon by the City Council in a single motion. Any Councilmember may request removal of any item from the Consent Calendar causing it to be considered under Council Actions. A. Minutes - Regular Meeting of March 27, 2017. RECOMMENDATION: Approve as presented. B. Payment of Bills. RECOMMENDATION: Approve as presented. C. Consideration of a recommendation from the Traffic Commission to approve a request from the Palos Verdes Art Center for a Homes Tour on April 28 and 29, 2017 to feature two Rolling Hills homes and one Rolling Hills garden located at 2 Johns Canyon Road, 7 Johns Canyon Road and 35 Crest Road West. RECOMMENDATION: Approve as presented. D. City Council Finance/Budget/Audit Committee meeting notes of March 27, 2017 RECOMMENDATION: Receive and file. 0 DRAFT E. Consideration and Approval of the 2017/2018 City Council Committee Assignments. RECOMMENDATION: Approve as presented. F. ORDINANCE NO. 351 — AN ORDINANCE OF THE CITY OF ROLLING HILLS AMENDING TITLE 15 (BUILDINGS AND CONSTRUCTION) OF THE CITY OF ROLLING HILLS MUNICIPAL CODE BY ADOPTING BY REFERENCE TITLE 32 OF LOS ANGELES COUNTY CODE (FIRE CODE), RATIFYING THE MORE RESTRICTIVE FIRE STANDARDS CONTAINED IN THAT CODE, AND DELEGATING ENFORCEMENT OF THE FIRE CODE IN THE CITY TO THE FIRE CHIEF. RECOMMENDATION: Second reading, waive full reading and adopt Ordinance. Councilmember Dieringer asked that Item 4E be removed from the consent calendar for individual consideration. Hearing no objection, Mayor Black so ordered. Councilmember Wilson moved that the City Council approve the remaining items on the consent calendar as presented. Councilmember Dieringer seconded the motion, which carried without objection. PRESENTATION Silver Level Energy Leader Partnership Certificate from Southern California Edison /South Bay Cities Council of Governments Presented by: Marilyn Lyon, Public Affairs, Environmental Services Analyst South Bay Cities Environmental Services Center/SBCCOG On behalf of Southern California Edison and South Bay Cities Council of Governments, Marilyn Lyon presented the City Council with a Silver Level Energy Leader Partnership Certificate in recognition of the City's progress in energy savings initiatives. COMMISSION ITEMS RESOLUTION NO. 2017-02 — A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF ROLLING HILLS GRANTING APPROVAL FOR A SITE PLAN REVIEW FOR GRADING AND CONSTRUCTION OF A NEW RESIDENCE AND A SWIMMING POOL AND CONDITIONAL USE PERMITS FOR CONSTRUCTION OF A STABLE AND CORRAL, TENNIS COURT, AND GUESTHOUSE IN ZONING CASE NO. 914, 11 UPPER BLACKWATER CANYON ROAD, (LOT 99-B-RH), (AUTHOR HOME LLC/CHOWDHURY). AND CONSIDERATION OF A RECOMMENDATION FROM THE TRAFFIC COMMISSION TO APPROVE OF A NEW DRIVEWAY APRON AT 11 UPPER BLACKWATER CANYON ROAD. Mayor Black recused himself from consideration of this item due to the proximity of his property to the subject property, left the dais and took a seat in the audience. Assistant Planner Stewart reviewed the applicant's request for site plan review for grading and construction of a new residence with a basement and swimming pool; and for a conditional use permit to construct a stable, corral, tennis court and Minutes City Council Meeting 04-10-17 DRAFT guesthouse as well as various other amenities in Zoning Case No. 914 at 11 Upper Blackwater Canyon Road. She stated that the disturbance is proposed at 34.74% and grading is proposed at 43,220 cu. yds. with total export of 1,542 both of which fall within the acceptable limits under the Zoning Code. She further stated that at is meeting of January 26, 2017 the Traffic Commission reviewed and recommended approval of new driveway apron serving the property. Ms. Stewart reviewed the concerns raised by neighbors regarding the project including visibility and noise associated with the tennis court, the location and visibility of the stable and drainage. She stated that to address the concerns regarding visibility, the applicant enhanced the landscaping plan by adding additional trees; and relocated the stable further into the interior of the property and away from the concerned neighbor's property. She further stated that to address the concern regarding visibility and noise from the tennis court, the applicant included enhanced landscaping and is proposing a rubberized court surface; and to address the concern regarding drainage, the applicant revised the drainage plan to follow the more natural drainage courses along the side of the property. She stated that an additional correspondence was received today form one of the concerned neighbors and it has been placed on the dais. Brief discussion ensued concerning the landscaping plan and the proposed drainage and ways to measure and address noise from the tennis court. Mayor Pro Tem Wilson called for comments from the public. James Black, 3 Appaloosa Lane addressed the City Council in support of the project and encouraged the City Council to receive and file the Resolution. Judy Yamato, 5 Sagebrush Lane addressed the City Council to express concern regarding visibility and noise from the tennis court and guest house and that their privacy will be impacted if the proposed landscape screening is not sufficient. Following brief discussion, Councilmember Pieper moved that the City Council receive and file Planning Commission Resolution No. 2017-02 granting approval of the applicant's request in Zoning Case No. 914 at 11 Upper Blackwater Canyon Road and further approve the new driveway apron per the Traffic Commission's recommendation. Councilmember Mirsch seconded the motion, which carried with Mayor Pro Tem Wilson opposed. Mayor Black returned to the dais. PUBLIC HEARINGS None. OLD BUSINESS None. Minutes City Council Meeting 04-10-17 DRAFT NEW BUSINESS STATUS REPORT REGARDING COMPLIANCE WITH CITY COUNCIL RESOLUTION NO. 1203 CONCERNING AZUL, THE DOG OWNED BY DR. JEFFREY OSTRIKER AT 27 CABALLEROS ROAD WITH REGARD TO THE CONFINEMENT RESTRICTIONS IMPOSED ON AZUL. City Manager Cruz reported that per the conditions imposed by City Council Resolution 1203, the dog Azul remains confined to the property at 27 Caballeros Road. He stated that the kennel structure has been constructed and upon inspection, found to be in compliance with the Resolution. He further stated that there have been no further complaints against the dog. Following brief discussion, the report was received and filed. No further action was taken. DISCUSSION AND CONSIDERATION OF FISCAL YEAR 2017/2018 BUDGET PRIORITIES. City Manager Cruz reviewed the proposed fiscal year 2017/18 budget priorities which include a traffic speed survey as required to allow for radar enforcement in the City; ADA transition plan; and an update to the General Plan. He stated that staff is recommending that the City Council consider developing a fund balance commitment to put money aside for the General Plan update in the coming years. Following brief discussion, the report was received and filed. No further action was taken. CONSIDERATION OF PROFESSIONAL SERVICES AGREEMENT WITH ROGERS, ANDERSON, MALODY AND SCOTT, LLP FOR PROVIDING THE CITY OF ROLLING HILLS ACCOUNTING, FINANCE AND TREASURY SERVICES. City Manager Cruz presented the staff report stating that the City's contract with RAMS to provide the City's accounting, finance and treasury services ends on July 15, 2017. As allowed in 3.04.070 in the Rolling Hills Municipal code, the City Manager can make a determination to keep an existing contractual service provider if the contractor has demonstrated competence and the professional qualifications necessary for the satisfactory performance of the services required. He stated that he believes that RAMS meets these criteria and recommends that they continue providing the City's financial services in order to maintain the continuity of this important internal service that keeps the City functioning smoothly. He further stated that, staff is comfortable with RAMS as its fmancial services provider; and since it is a vital service where trust is the most important element in performing this service, staff could find no good operational or financial reason to change it. He stated that RAMS has demonstrated an excellent track record managing the financial and human resources components for the City over the last five years. Mr. Cruz stated that staff recommends RAMS continue its services beginning on July 16, 2017 through July 15, 2020 as a 3 -year contract with a provision for continuing RAMS' services at the City's option for two additional years through July 15, 2022. He stated that the proposed agreement includes modest annual cost adjustments over the five-year contract; and the costs are commensurate to the funds the City currently budgets for financial services. Following brief discussion, Councilmember Mirsch moved that the City Council approve the agreement with Rogers, Anderson, Malody and Scott, LLP for providing the City of Rolling Hills accounting finance Minutes City Council Meeting 04-10-17 DRAFT and treasury services as presented and direct the City Manager to execute the agreement effective July 16, 2017 through July 15, 2020 with an option to extend the contract through July 15, 2022. Mayor Pro Tem Wilson seconded the motion, which carried without objection. DISCUSSION AND CONSIDERATION OF UPDATING THE CITY'S TECHNOLOGY UTILIZATION POLICY TO MAKE IT APPLICABLE TO CITY COUNCILMEMBERS AND COMMISSIONERS; AND SETTING UP AN EXCHANGE SERVER IN ORDER TO AID IN COMPLIANCE WITH THE CITY'S E-MAIL RETENTION POLICY. City Clerk Luce presented the staff report stating that based on direction given at the February 13, 2017 City Council meeting staff is proceeding with creating separate e-mail addresses for each City Councilmember and Commissioner. She stated that in doing so, staff recommends that the City's technology utilization policy, which addresses e-mail retention, be updated to include these e-mail addresses and that the exchange server license be updated as well at one time cost of $1,600 to provide for automatic deletion of e-mail messages to ensure compliance with the policy. Following brief discussion, Councilmember Mirsch moved that the City Council approve the updated Technology Utilization Policy as presented to make it applicable to City Councilmembers and Commissioners set up an Exchange server to aid in compliance with the City's e-mail retention policy. Councilmember Dieringer seconded the motion, which carried without objection. MATTERS FROM THE CITY COUNCIL AND MEETING ATTENDANCE REPORTS DISCUSSION AND POTENTIAL DIRECTION AFTER THE CITY COUNCIL MASON TO THE TENNIS CLUB PROVIDES A STATUS REPORT ON THE TENNIS COURT IMPROVEMENT PROJECT, CONSTRUCTION MANAGER AND PROCEDURE TO NAME THE COURTS AFTER AN INDIVIDUAL. (ORAL REPORT) Councilmember Pieper reported on the status of the tennis court improvement project. He stated that both the City and Rolling Hills Community Association (RHCA) believe it would be advantageous to hire a project management consultant to prepare the bid specification and manage the project with the City and RHCA sharing the costs for that service. Staff was asked to get costs for the consultant and bring the matter back to the City Council for further consideration. No action was taken. OTHER MATTERS FROM THE CITY COUNCIL Councilmember Pieper requested that an item be agendized to discuss traffic citations and the possiblity of the citations being written in such a way to allow for traffic school. Mayor Pro Tem Wilson expressed concern regarding the incident involing the out of control truck that occurred last week. He indicated that he would like to research the matter further and may ask later for an item to be agendized to discuss the matter at a later date. Councilmember Mirsch requested that an item be agendized to discuss the bulky item and greenwaste pick ups to address the issues surrounding people putting the items out early. Mayor Black requested that an item be agendized to discuss adopting a drone policy. Minutes City Council Meeting 04-10-17 DRAFT ITEM REMOVED FROM CONSENT CALENDAR: CONSIDERATION AND APPROVAL OF THE 2017/2018 CITY COUNCIL COMMITTEE ASSIGNMENTS. Councilmember Dieringer stated that she would like to be considered for appointment to the Personnel Committee. Following brief discussion, Councilmember Mirsch moved that the City Council approve the City Council Committee assignments as presented with the exception of the Budget/Finance/Audit Committee and Personnel Committee. Councilmember Dieringer seconded the motion, which carried without objection. Consideration of the two committees assignment not approved was continued to the April 24, 2017 meeting of the City Council. MATTERS FROM STAFF None. CLOSED SESSION None. ADJOURNMENT Hearing no further business before the City Council, Mayor Black adjourned the meeting at 8:18 p.m. The next regular meeting of the City Council is scheduled to be held on Monday, April 24, 2017 beginning at 7:00 p.m. in the City Council Chamber at City Hall, 2 Portuguese Bend Road, Rolling Hills, California. Respectfully submitted, Heidi Luce City Clerk Approved, James Black, M.D. Mayor Minutes City Council Meeting 04-10-17 CHECK CHECK NO. DATE 24779 04/18/2017 24780 04/18/2017 24781 04/18/2017 24782 04/18/2017 24783 04/18/2017 24784 04/18/2017 24785 04/18/2017 24786 04/18/2017 24787 04/18/2017 24788 04/18/2017 24789 04/18/2017 24790 04/18/2017 24791 04/18/2017 24792 04/18/2017 24793 04/18/2017 24794 04/18/2017 24795 04/18/2017 24796 04/18/2017 24797 04/18/2017 24798 04/18/2017 24799 04/18/2017 24800 04/18/2017 24801 04/18/2017 24802 05/01/2017 24803 05/01/2017 24804 05/01/2017 24805 05/01/2017 * PR LINK 4/14/2017 * PR LINK 4/14/2017 cry f,eieng �✓r� Agenda Item No: 4-B Mtg. Date: 04/24/17 INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CALIF. 90274 (310) 377-1521 FAX: (310) 377-7288 04/24/2017 - CHECK RUN PAYEE CABALLEROS DEL RANCHO PALOS CITY OF RANCHO PALOS VERDES COUNTY OF LOS ANGELES DAILY BREEZE FOUNTAINHEAD CONSULTING INC. IIMC JENKINS & HOGIN, LLP KONICA MINOLTA BUSINESS LA COUNTY SHERIFF'S DEPARTMENT LOS ANGELES TIMES MARTIN & CHAPMAN CO. OPUS BANK PACIFIC COAST LANDSCAPE REMOTE SATELLITE SYS INTL ROLLING HILLS ESTATES SOUTHERN CALIFORNIA EDISON THE GAS COMPANY TYLER TECHNOLOGIES, INC. VOIDED CHECK VOIDED CHECK VOIDED CHECK VANTAGEPOINT TRANSFER AGENTS USCM CALPERS DELTA DENTAL STANDARD INSURANCE COMPANY VISION SERVICE PLAN PR LINK - PAYROLL PROCESSINC PR LINK - PAYROLL 8 & PR TAXES DESCRIPTION 2016-2017 EXPENDITURES RADAR UNIT MAINTENANCE ANIMAL CONTROL KENNEL MARCH 2017 LEGAL PUBLICATIONS IN PVP NEWS IT CONSULTING APRIL 2017 ANNUAL MEMBERSHIP DUES 6/2018 ATTORNEY SERVICE FEES MARCH 2017 MONTHLY MAINT 3/12/17 - 4/11/17 LAW ENFORCEMENT SRVCS MARCH 2017 NEWSPAPER SUBCRIPTION THRU 11/5/17 MINUTE BOOK PAPER OFFICE SUPPLIES, APA DUES, ASST PLANNER CONFERENCE MAINTENANCE APRIL 2017 SATELLITE PHONES MAY 2017 TRAFFIC OFFICER 10/03 - 12/16/16 SCE PRELIMINARY DESIGN &ENGINEERING STUDY GAS, 3/8/17 - 4/6/17 CURRENT FINANCIAL SOFTWARE MAINT TIL 5/31/18 DEFERRED COMP 04/14/17 DEFERRED COMP 04/14/17 HEALTH INSURANCE MAY 2017 DENTAL INSURANCE MAY 2017 LIFE INSURANCE MAY 2017 VISION INSURANCE MAY 2017 PROCESSING FEE PAY PERIOD - MARCH 29, 2017 THROUGH APRIL 11, 2017 I, Raymond R. Cruz, City Manager of Rolling Hills, California certify that the above demands are accurate and there is available in the General Fund a balance of $125,293.24for the payment of a ve items. Cr'Raymond Cruz, City Manager * Previously Disbursed AMOUNT 5,000.00 62.87 851.21 346.68 516.00 160.00 13,190.70 84.36 25,735.10 308.07 692.59 1,894.48 565.00 97.90 881.44 50,000.00 50.06 1,305.72 364.00 998.00 7,965.43 681.72 240.16 113.30 53.95 18,134.50 $ 125,293.24 112,104.79 0 Printed on Recycled Paper CITY OF ROLLING HILLS BALANCE SHEET March 31, 2017 MUNICIPAL GENERAL& DEFO5rr COI'S& COMMUN, SELF- REFUSE TRAFFIC TRANSIT UTILITY CAPITAL FIIND FUND CLEEP FACILITIES INSUR. COLLECT. SAFETY PROP A,C,M FUND & TDA ASSETS Cash &Cash Equivalents $ 4,545,567 S 1,771 $ 126,048 5 16,258 $ 260,374 $ 342,678 S (1.073) 5 13,454 5 1,264,677 Cash & Cash Equivalents - Capital Project Fund - - •- • Poppy Trail Grading Bond • 305,000 Accounts Receivable 5,493 222.332 94,352 Prepaid Expense & Deposits 6,738 - - - TOTAL ASSETS 5 4.5.57.798 S 306,771 $ 126.048 5 16,258 $ 482,706 5 437.030 $ (1,073) S 13,454 5 1.264,677 LIABILITIES Accounts & Contract Payable 5 9,155 S $ $ $ - $ 188,995 $ $ S Employees Benefits Payable 4,124 - - - Deposits 18,852 306,771 Deferred Revenues 14.012 - TOTAL LIABILITIES 46,143 306,771 188,995 FUND BALANCE Unassigned Fund Balance 4,511,655 126.048 16,258 482.706 248,035 (1.073) $ 13,454 1,264,677 TOTAL UNASSIGNED FUND BALANCE 4,511.655 126.048 16.258 482,706 248,035 (1,073) 13,454 1,264,677 TOTAL UNASSIGNED FUND BALANCE h LIABILITIES. $ 4,557.798 S 306,771 S 126,048 S 16,258 S 482,706 S 437,030 $ (1,073) S 13,454. S 1,264,677 COMPOSITION OF CASII Petty Cash $ 1,500 OPUS Bank • Checking Account 26,917 OPUS Bank - Interest Checking Account 1,008,458 OPUS Bank • Money Market 482,040 Calif. State Local Agency Investment Fund 4,555,839 Malaga Bank -Preferred Bank - CD's 495,000 $ 6,569,754 Prepared By: Terry nee Director Approv Raymond R. Crux, City Mannger Data 4f-ir /7 Date -/��Y�! 2 BEGINNING YTD OF YEAR TOTAL TOTAI. $ 6,569,754 $ 6,891,267 305,000 305,000 322,177 185,238 6,738 37,436 S 7.203,669 S 7,418.941 198,150 S 454,364 4.124 18,305 325.623 325,574 14.012 14,012 541,909 812.255 6.661.760 6.606.686 6,661.760 6,606.686 S 7.203 669 5 7.418 941 CITY OF ROLLING HILLS SUMMARY STATEMENT OF REVENUES AND EXPENDITURES Actual Compared to Annual Budget July 1, 2016 to March 31, 2017 Fund GENERAL Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CITIZENS' OPTION FOR PUBLIC SAFETY (COPS) Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue CAPITAL IMPROVEMENT FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue COMMUNITY FACILITIES Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue MUNICIPAL SELF INSURANCE Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue REFUSE COLLECTION Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRAFFIC SAFETY Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TRANSIT - PROPOSITION A, C, M & TDA Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue UTILITY FUND Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue TOTAL ALL FUNDS Revenues Expenditures Net Revenue before transfers Transfers in (out) Net Revenue This Year This Year Better Last Year (Worse) Annual Remaining Budget & Adj. Budget $ 986,853 1,094,193 $ 1,122,810 $ (135,957) 1,016,154 (78,039.00) 1,956,600 $ 969,747 1,866,260 772,067 (107,340) 18,000 106,656 (213,996.00) (15,455) 33,455 90,340 197,680 (344,050) (362,050) (89,340) 91,201 (180,541.00) (253,710) (164,370) 129,324 97,672 114,618 14,706.00 78,273 (19,399) 115,125 - (14,199) 164,000 66,328 31,652 - 36,345 (4,693) - - (48,875) (80,527) - 0 31,652 36,345 (4,693) (48,875) (80,527) - 2,024 • - - 354 (1,670) 100 100 62,700 60,676 (2,024) - (354) (1,670) - - (62,600) (60,576) 62,600 62,600.00 (2,029 354 (1,679 - 2,024 - 235 235 6,000 6,000.00 - (235) 235 (6,000) (6,000.00) - (235) 235 (6,000) (6,000.00) 586,196 571,131 577,168 9,028 771,900 185,704 566,985 141462 761,508 190,377 15,065 (18,000) 10,183 4,882 (18,000) - 10,392 (4,673) (24,000) (6,000) (2,93 (7,817) 4,882 (13,608) (10,673) 32,932 - 32,932 34,005 35,439 1,434 50 (32,882) 55,500 21,495 (1,073) (35,439) 34,366 33,455 (33,455) (55,450) (54,377) 55,450 55,450 (1,073) (1,9841_ 911 - 1,073 64,604 190,770 63,499 1,105 - (190,770), 85,786 21,182 190,000 (770.00) (126,166) 63,499 (189,665) (104,214) 21,952 (26,1662_ - 63,499 (189,665)_ (104,214 21,952 28,170 - - 28,170 33,800 33,800 - (28,170.00) 150,000 150,000.00 28,170 - (33,800) - 61,970 - - (150,000) (178,170.00) 250,000 250,000.00 28,170 (33,800) 61,970 100,000 71,830.00 1,828,078 1,989,795 1,878,094 (50,016) 1,731,240 (258,5551 2,929,561 1,101,482 3,255,968 1,266,173 (161,716) 146,855 (308,571) (326,407) (164,691) $ (161,716) $ 146,855 $ (308,571) $ (326,407) $ (164,691) 0 4/18/2017 Flush this attempt to hike taxes down the drain: Editorial LA Daily News (http://www.dailynews.com) Flush this attempt to hike taxes down the drain: Editorial By The Editorial Board, LA Daily News Thursday, February 9, 2017 Agenda Item No: 9-A Mtg. Date: 04/24/17 California voters have said emphatically, and repeatedly, that they want to vote on tax increases, but some lawmakers just don't want to hear it. A new bill by state Sen. Robert Hertzberg, D -Van Nuys, could lead to significantly higher property tax bills without voter approval. Senate Bill 231 would accomplish this by changing the legal definition of "sewer service" to include stormwater, allowing local governments to charge property owners for the construction and operation of stormwater management projects. Under Proposition 218, passed by voters in 1996, citizens have the right to vote on taxes, fees and assessments, with three exceptions: trash, water and sewer service. A 2002 state appeals court ruling said stormwater was not included in these exceptions. Consequently, taxes, fees and assessments for stormwater projects must be approved by two-thirds of voters. Sen. Hertzberg thinks the court got it wrong, so SB231 would simply redefine "sewer" and "sewer service" to include stormwater and storm drains. The cost could be considerable. Under federal and state law, state regulators require cities in California to comply with a special permit to discharge stormwater through storm drain systems. The MS4 permit, as it's known, mandates stormwater capture and the reduction of pollutants. A California Supreme Court ruling last year indicated that parts of this permit may be a state mandate, meaning the state would have to pay for it, unless local agencies have the means to pay for it themselves. By changing the definition of "sewer," Hertzberg's bill would give them the means: higher taxes with no need for voter approval. The cost of stormwater permit compliance for cities in L.A. County alone has been estimated at $20 billion. Property tax bills could rise by hundreds or thousands of dollars to pay for it. This is Hertzberg's second attempt to pass a bill redefining "sewer" to get around the requirements of Proposition 218. Last August, SB 1298 was on the verge of passing when it was derailed by a surge of opposition from taxpayers and many local government officials. It doesn't smell any better now. Californians have the right to vote on taxes. There should be no confusion about the meaning of that. URL: http://www.dailynews.com/opinion/20170209/flush-this-attempt-to-hike-taxes-down-the-drain-editorial © 2017 LA Daily News (http://www.dailynews.com) http://www.dailynews.com/opinion/20170209/flush-this-attempt-to-hike-taxes-down-the-drain-editorial&template=printart 1/1 THIS PAGE INTENTIONALLY LEFT BLANK 4/17/2017 Bill Text - SB-231 Local govemment: fees and charges. C( G`11 �12t( LEGISLATIVE INFORMATION Home Bill Information California Law Publications Other Resources My Subscriptions i My Favorites SB-231 Local government: fees and charges. (2017-2018) SHARE THIS. SENATE BILL Date Published: 02/02/2017 09:00 PM CALIFORNIA LEGISLATURE— 2017-2018 REGULAR SESSION Introduced by Senator Hertzberg February 02, 2017 No. 231 An act to amend Section 53750 of, and to add Section 53751 to, the Government Code, relating to local government finance. LEGISLATIVE COUNSEL'S DIGEST SB 231, as introduced, Hertzberg. Local government: fees and charges. Articles XIII C and XIII D of the California Constitution generally require that assessments, fees, and charges be submitted to property owners for approval or rejection after the provision of written notice and the holding of a public hearing. Existing law, the Proposition 218 Omnibus Implementation Act, prescribes specific procedures and parameters for local jurisdictions to comply with Articles XIIIC and XIII D of the California Constitution and defines terms for these purposes. This bill would define the term "sewer" for these purposes. The bill would also make findings and declarations relating to the definition of the term "sewer" for these purposes. Vote: majority Appropriation: no Fiscal Committee: no Local Program: no THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 53750 of the Government Code is amended to read: 53750. For purposes of Article XIII C and Article XIII D of the California Constitution and this article: article, the following words have the following meanings, and shall be read and interpreted in light of the findings and declarations contained in Section 53751: (a) "Agency" means any local government as defined in subdivision (b) of Section 1 of Article XIII C of the California Constitution. (b) "Assessment" means any levy or charge by an agency upon real property that is based upon the special benefit conferred upon the real property by a public improvement or service, that is imposed to pay the capital https://leginfo.legislature.ca.gov/faces/biliTextClientxhtml?bill_id=201720180SB231 1/4 4/17/2017 Bill Text - SB-231 Local government: fees and charges. cost of the public improvement, the maintenance and operation expenses of the public improvement, or the cost of the service being provided. "Assessment" includes, but is not limited to, "special assessment," "benefit assessment," "maintenance assessment," and "special assessment tax." (c) "District" means an area that is determined by an agency to contain all of the parcels that will receive a special benefit from a proposed public improvement or service. (d) "Drainage system" means any system of public improvements that is intended to provide for erosion control, for landslide abatement, or for other types of water drainage. (e) "Extended," when applied to an existing tax or fee or charge, means a decision by an agency to extend the stated effective period for the tax or fee or charge, including, but not limited to, amendment or removal of a sunset provision or expiration date. (f) "Flood control" means any system of public improvements that is intended to protect property from overflow by water. (g) "Identified parcel" means a parcel of real property that an agency has identified as having a special benefit conferred upon it and upon which a proposed assessment is to be imposed, or a parcel of real property upon which a 'proposed property -related fee or charge is proposed to be imposed. (h) (1) "Increased," when applied to a tax, assessment, or property -related fee or charge, means a decision by an agency that does either of the following: (A) Increases any applicable rate used to calculate the tax, assessment, fee, or charge. (B) Revises the methodology by which the tax, assessment, fee, or charge is calculated, if that revision results in an increased amount being levied on any person or parcel. (2) A tax, fee, or charge is not deemed to be "increased" by an agency action that does either or both of the following: (A) Adjusts the amount of a tax, fee, or charge in accordance with a schedule of adjustments, including a clearly defined formula for inflation adjustment that was adopted by the agency prior to November 6, 1996. (B) Implements or collects a previously approved tax, fee, or charge, so long as the rate is not increased beyond the level previously approved by the agency, and the methodology previously approved by the agency is not revised so as to result in an increase in the amount being levied on any person or parcel. (3) A tax, assessment, fee, or charge is not deemed to be "increased" in the case in which the actual payments from a person or property are higher than would have resulted when the agency approved the tax, assessment, fee, or charge, if those higher payments are attributable to events other than an increased rate or revised methodology, such as a change in the density, intensity, or nature of the use of land. (i) "Notice by mail" means any notice required by Article XIII C or XIII D of the California Constitution that is accomplished through a mailing, postage prepaid, deposited in the United States Postal Service and is deemed given when so deposited. Notice by mail may be included in any other mailing to the record owner that otherwise complies with Article XIII C or XIII D of the California Constitution and this article, including, but not limited to, the mailing of a bill for the collection of an assessment or a property -related fee or charge. (j) "Record owner" means the owner of a parcel whose name and address appears on the last equalized secured property tax assessment roll, or in the case of any public entity, the State of California, or the United States, means the representative of that public entity at the address of that entity known to the agency. (k) "Sewer" means services and systems provided by all real estate, fixtures, and personal property owned, controlled, operated, or managed in connection with or to facilitate sewage collection, treatment, or disposition for sanitary or drainage purposes, including lateral and connecting sewers, interceptors, trunk and outfall lines, sanitary sewage treatment or disposal plants or works, drains, conduits, outlets for surface or storm waters, and any and all other works, property, or structures necessary or convenient for the collection or disposal of sewage, industrial waste, or surface or storm waters. "Sewer system" shall not include a sewer system that merely collects sewage on the property of a single owner. (k) https://leginfo.legislature.ca.gov/faces/billTextClientxhtml?bill_id=201720180SB231 2/4 4/17/2017 Bill Text - SB-231 Local government fees and charges. (/) "Registered professional engineer" means an engineer registered pursuant to the Professional Engineers Act (Chapter 7 (commencing with Section 6700) of Division 3 of the Business and Professions Code). (m) "Vector control" means any system of public improvements or services that is intended to provide for the surveillance, prevention, abatement, and control of vectors as defined in subdivision (k) of Section 2002 of the Health and Safety Code and a pest as defined in Section 5006 of the Food and Agricultural Code. {m) (n) "Water" means any system of public improvements intended to provide for the production, storage, supply, treatment, or distribution of water from any source. SEC. 2. Section 53751 is added to the Government Code, to read: 53751. The Legislature finds and declares all of the following: (a) The ongoing, historic drought has made clear that California must invest in a 21st century water management system capable of effectively meeting the economic, social, and environmental needs of the state. (b) Sufficient and reliable funding to pay for local water projects is necessary to improve the state's water infrastructure. (c) Proposition 218 was approved by the voters at the November 5, 1996, statewide General Election. Some court interpretations of the law have constrained important tools that local governments need to manage storm water and drainage runoff. (d) Storm waters are carried off in storm sewers, and careful management is necessary to reduce pollution. But a court decision has excluded storm water from those provisions of Proposition 218 that apply to property - related fees for sewer and water, preventing many important projects from being built. (e) The court of appeal in Howard Jarvis Taxpayers Ass'n v. City of Salinas (2002) 98 Cal.App.4th 1351 concluded that the term "sewer," as used in Proposition 218, is "ambiguous" and declined to use the statutory definition of the term "sewer system" which was part of the then -existing law as Section 230.5 of the Public Utilities Code. (f) The court in Howard Jarvis Taxpayers Ass'n v. City of Salinas (2002) 98 Cal.App.4th 1351 failed to follow long-standing principles of statutory construction by disregarding the plain meaning of the term "sewer." Courts have long held that statutory construction rules apply to initiative measures, including in cases that apply specifically to Proposition 218 (see People v. Bustamante (1996) 57 Cal.App.4th 693, Keller v. Chowchilla Water Dist. (2000) 80 Cal.App.4th 1006). When construing statutes, courts look first to the words of the statute, which should be given their usual, ordinary, and commonsense meaning (People v. Mejia (2012) 211 Cal.App.4th 586, 611). The purpose of utilizing the plain meaning of statutory language is to spare the courts the necessity of trying to divine the voters' intent by resorting to secondary or subjective indicators. The court in Howard Jarvis Taxpayers Ass'n v. City of Salinas (2002) 98 Cal.App.4th 1351 asserted its belief as to what most voters thought when voting for Proposition 218, but did not cite the voter pamphlet or other accepted sources for determining legislative intent. Instead, the court substituted its own judgment for the judgment of voters. (g) Numerous sources predating Proposition 218 reject the notion that the term "sewer" applies only to sanitary sewers, including, but not limited to: (1) Section 230.5 of the Public Utilities Code. _ (2) Section 23010.3, which was first added by Chapter 1193 of the Statutes of 1963. (3) The Street Improvement Act of 1913 (repealed by Chapter 346 of the Statutes of 1963). (4) The California Supreme Court stated in Los Angeles County Flood Control District v. Southern California Edison Co. (1958) 51 Cal.2d 331, that "no distinction has been made between sanitary sewers and storm drains or sewers." (5) The term, "sewer" has been used interchangeably to refer to both sanitary and storm sewers in many other cases, including, but not limited to, County of Riverside v. Whitlock (1972) 22 Cal.App.3d 863, Ramseier v. https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB231 3/4 4/17/2017 Bill Text - SB-231 I ncal government: fees and charges. Oakley Sanitary Dist. (1961) 197 Cal.App.2d 722, and Torson v. Fleming (1928) 91 Cal.App. 168. (6) Dictionary definitions of sewer, which courts have found to be an objective source for determining common or ordinary meaning, including Websters (1976), American Heritage (1969), and Oxford English Dictionary (1971). (h) Prior legislation has affirmed particular interpretations of words in Proposition 218, specifically Assembly Bill 2403 of the 2013-14 Regular Session (Chapter 78 of the Statutes of 2014). (i) The Legislature reaffirms and reiterates that the definition found in Section 230.5 of the Public Utilities Code is the definition of "sewer" or "sewer service" that should be used in the Proposition 218 Omnibus Implementation Act. https://leginfo.legislature.ca.gov/faces/billTextClientxhtml?bill_id=201720180SB231 ® 4/4 0 e11 MEM TASHA CERDA, Mayor DAN MEDINA, Mayor Pro Tem MARK E. HENDERSON, Councilmember ART KASKANIAN, Councilmember RODNEY G. TANAKA, Councilmember 1700 WEST 162"d STREET / GARDENA, CALIFORNIA 90247-3732 / PHONE (310) 217-9503 FAX NO: (310) 217-9694 / WEB SITE: tvwtv.cityofgardena.orq ELECTED and ADMINISTRATIVE OFFICES - CITY MANAGER April 14, 2017 The Honorable Robert Hertzberg California State Senate - 18th District State Capitol, Room 4038 Sacramento, CA 95814 Subject: OPPOSITION TO SENATE BILL 231 Dear Senator Hertzberg: MINA SEMENZA, City Cleric J. INGRID TSUKIYAMA, City Treasurer MITCHELL G. LANSDELL, City Manager PETER L. WALLIN, City Attorney The City of Gardena (City) appreciates your interest in developing funding resources for stormwater-related programs. It is aware of the enormous cost cities are required to bear to implement Watershed Management Programs (WMPs) mandated by the Los Angeles Regional Water Quality Control Board — estimated to be $20 billion over twenty (20) years. For Gardena, the cost would be a conservative $10 million per year over this period. For this and other reasons provided below, the City cannot support this bill. Of most concern, SB 231 proposes to expand the Public Utilities Code definition of sewer to include stormwater. In doing so, it would avoid the need for a local government to pass a stormwater tax by a two-thirds vote of the people as is required by Proposition 218, the Right to Vote on Taxes Act — a Constitutional Amendment. Instead, passage would only require a majority of property owners (more than 50%) to oppose it. Defeating the tax measure would be extremely difficult. Protest vote ballots must be mailed to a location determined by the local government. Ballots often go un-noticed when sent to the property owner's home or business. In some cases, ballots are sent to incorrect addresses or to places where the property owners no longer reside. In many cases, the property owner may not even be aware of the protest vote procedure. Further, the ballots may not be printed in the primary language of the property owner (citizenship is not a requirement for this type of vote). There is also the matter of equitability. Should a stormwater tax measure succeed because a majority of property owners did not send in ballots opposing it, the increase in property tax is likely to be passed on to renters (residential and business). The City is aware that the County of Los Angeles is considering a stormwater fee through a parcel tax. Were SB 231 enacted into law, it would enable the County to adopt the stormwater tax through a protest vote. It may not stop there, as well. Your bill defines local government to include more than just counties and cities. It also includes special districts. The County's flood control district falls under this category. The district could also use the protest vote to increase the flood control assessment on properties because State Senator Robert Hertzberg City of Gardena Opposition to Senate Bill 231 April 14, 2017 Page 2 flood control is associated with stormwater runoff. The County Sanitation District could also propose another property tax for capital and maintenance costs of a stormwater- related project. The City is not opposed to the stormwater tax simply because it is generally against taxes. In this case, it is simply a bad tax. The stormwater tax is needed to help cities pay for WMPs, whose purpose is to force them to capture and store groundwater as a hedge against the drought. But cities are not in the business of storing groundwater. That task belongs to water agencies that have expertise in this area. Further, a few days ago, Governor Brown declared that the drought in California is over. Still another justification for the WMPs is that they would improve water quality. There is no evidence of that. Further, it appears that the Regional Board overestimated the severity of the water quality problem in the Los Angeles Basin. Many of the pollutants it once claimed impaired water bodies in Los Angeles County are in the process of being eliminated as pollutants of concern. Furthermore, Gardena and other cities in the South Bay drain into the Dominguez Channel, which only flows when it rains. The same is true for Reach 4 of the Los Angeles River where, Senator, your field office is located. It is obvious that neither fish nor people can swim in a dry river or channel. Nor can they do so when it rains. For one thing, it is illegal to even enter a flood control channel or river during dry weather and, definitely dangerous to swim in one during a storm event because of the risk of injury and death. Any fish caught in a flowing channel or river is likely to perish either as a result of being hit by particles traveling downstream towards the ocean or moving from a fresh to a salt -water environment. In closing, the City of Gardena appreciates the time you have taken to understand its opposition to your bill and, in the final analysis, hopes you can appreciate why. Should you have any questions, please contact me. Sincerely, MITCHELL G. LANSDELL City Manager MGL: nw c: Mayor Tasha Cerda and Council Members - City of Gardena Executive Director Jacki Bacharach - South Bay Cities Council of Governments Council Member Margaret Clark - City of Rosemead State Senator Mike McGuire State Senator Jim Beall State Senator Janet Nguyen State Senator Ed Hernandez State Senator Ricardo Lara State Senator John Moorlach State Senator Ben Allen State Senator Steven Bradford State Assembly Member Autumn Burke State Assembly Member Al Muratsuchi CITY OF GLENDORA CITY HALL (626) 914-8200 March 22, 2017 Honorable Robert Hertzberg Senate District 18 State Capitol Building — Room 4038 Sacramento, CA 95814 Via Fax: (916) 651-4918; (818) 901-5562 116 East Foothill Blvd., Glendora, California 91741 www.ci.glendora.ca.us Re: SB 231(Hertzberg) —Notice of Opposition Dear Senator Hertzberg, The City Council of the City of Glendora last year voiced its opposition to the effort to expand the definition of sewer within Proposition 218 enabling legislation to include stormwater management and infrastructure which was sought through SB 1298 (Hertzberg). That bill failed to pass the legislature after significant opposition by various interest groups that pointed out the many hurdles it created and thus uncertainty that cities would face should it have been relied upon as a funding tool. We continue to appreciate your acknowledgement of the challenges which cities are facing with the daunting costs related to the LA Co. 2012 MS4 Permit, and we appreciate the desire to assist us by providing a funding source for the costs. SB 231 once again attempts to expand the definition of sewer service to encompass stormwater management. If SB 231 is adopted, those costs can then be added to property assessments by using the ballot protest vote rather than a vote at the ballot box. While we agree that more flexibility is needed along with funding from the State, we oppose SB 231 because we strongly believe it violates the intent of Prop 218, The Right to Vote Act, in which citizens clearly voted to have the right to vote on taxes, charges, fees and assessments. Proposition 218 was adopted by the voters of the State and any carving out of services or areas from its oversight can only be done by the voters themselves and not through legislative process. Sincerely, CITY OF GLENDORA Afte Gene Murabito Mayor PRIDE OF T. E FOOTHILLS Senator Bob Hertzberg RE: SB 231 March 22, 2017 C: Glendora City Council Assemblymember Blanca E. Rubio — 486 District - Fax: (916) 319-2048 Senator Anthony Portantino — 25th District — Fax: (916) 651-4925 Jennifer Quan, Regional Public Affairs Manager (via email) Meg Desmond, League of California Cities, mdesmond@cacities.org California Contract Cities -- Fax: (562) 222-8135 Independent Cities Association — Fax: (310) 321-7810 Joe A. Gonsalves & Son (via email) Page Two TO: FROM: THRU: SUBJECT: geek INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310)377-1521 FAX (310) 377-7288 Agenda Item No: 10-A Mtg. Date: 04/24/17 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL TERRY SHEA, FINANCE DIRECTOR RAYMOND R. CRUZ, CITY MANAGER QUARTERLY SCHEDULE OF INVESTMENTS REPORT FOR THE QUARTER ENDING MARCH 31, 2017. DATE: APRIL 24, 2017 ATTACHMENTS: SCHEDULE OF INVESTMENTS DASH BOARD REPORT CARD LIQUIDITY CALCULATION INVESTMENT ALLOCATIONS SUMMARY REPORT BY QUARTER Attached you will find the City's quarterly investment report for review. Pursuant to the City Council's direction, it is agendized under "Matters from Staff" in order that it receives an appropriate level of review by the City Council. Below are Cash and Yield comparative date from the third quarter as of March 31, 2017 to the second quarter as of December 31, 2016 and Year to Date Interest Income comparative data from the third quarter as of March 31, 2017 to the third quarter as of March 31, 2016. The Portfolio has been diversified by investment instrument and maturity between Money Market, LAIF, and FDIC insured Certificates of Deposits. Also, the Ca1PERS CERBT Strategy 1 OPEB Irrevocable Trust results for the third quarter as of March 31, 2017 and Fiscal Year to Date FY 2016/2017. Cash & Yield Comparative Data 3rd Quarter FY 2016/2017 to 2nd Quarter FY 2016/2017: 3rd Quarter 2nd Quarter FY 2016/17 FY 2016/17 Variance Active Deposits $ 6,541,337 $ 6,433,520 $ 107,817 Inactive Deposits 28,417 149,767 (121,350) Total Cash $ 6,569,754 $ 6,583,287 '$ (13,533) s Portfolio Yield at Cost 0.784% 0.706% 0.078% 0 YTD Interest Income Comparative Data 3rd Quarter FY 2016/2017 to 3rd Quarter FY 2015/2016: Annual Interest - Budget Total YTD Interest Earned Over (Under) Budget % of Annual Budget 3rd Quarter FY 2016/17 $ 30,475 20,077 $ (10,398) > - s 65.88 % 3rd Quarter FY 2015/16 $ 14,000 11,381 $ (2,619) 81.29 % Ca1PERS CERBT Strategy 2 OPEB Irrevocable Trust results for the third quarter as of March 31, 2017 and Fiscal Year to Date FY 2016/2017. Beginning Balance Contribution Investment Earnings Administrative Expense Ending Balance 3rd Quarter FY 2016/17 $ 517,585 18,204 (111) Fiscal YTD FY 2016/17 $ 513,094 22,917 (333) $ 535,678 $ 535,678 Note: Original Contribution December 2011 $354,733. We are pleased to answer any questions you may have. RC Investment Report cover memo.doc CITY OF ROLLING HILLS SCHEDULE OF INVESTMENTS as of March 31, 2017 BOOK VALUE FAIR VALUE PAR PRICE (MARKET PURCHASE MATURITY INVESTMENT INSTITUTION VALUE Cal COST VALUE) YIELD DATE DATE ACTIVE DEPOSITS Money Market OPUS $ 482,040 $ 482,040 $ 482,040 0.150% Interest Checking OPUS $ 1,008,458 $ 1,008,458 $ 1,008,458 0.850% 01/12/17 01/12/18 %ofTotal 22.79% 22.79% LAIF STATE TREASURY $ 4,555,839 $ 4,555,839 $ 4,555,839 0.821% %ofTotal 69.65% 69.65% Malaga Bank - CD Malaga Bank $ 245,000 $ 245,000 $ 245,000 0.600% 09/14/16 09/13/17 Preferred Bank - CD Preferred Bank $ 250,000 $ 250,000 $ 250,000 1.250% 06/27/16 01/12/18 %of Total 7.57% 7.57% ACTIVE DEPOSITS TOTALS 6,541,337 6,541,337 6,541,337 0.784% INACTIVE DEPOSITS CHECKING OPUS $ 26,917 $ 26,917 $ 26,917 %of Total 94.72% 94.72% PETTY CASH — N/A $ 1,500 $' 1,500 $ 1,500 5.28% 5.28% % of Total INACTIVE DEPOSITS TOTALS GRAND TOTAL CASH $28,417 $28,417 $28,417 $6,569,754 NOTES: (1) Investment portfolio is in compliance with investment policy established by City Council. (2) The City has the ability to meet all expenditure requirements for the next six months. (3) LAIF fair market value is only provided in June of each year. Date a, Finance Director Raym.' d R. Cruz, City Mana �l / jJ(17 CITY OF ROLLING HILLS DASH BOARD REPORT CARD as of March 31, 2017 JUNE JUNE JULY AUGUST SEPT OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH FY 2014-15 FY 2015-16 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016-17 FY 2016.17 FY 2016-17 FY 2016-17 I. CASH FLOW ACTIVE DEPOSITS Book Value Price @ Cost OPUS Bank -Money Market $ 494,883 $ 89,247 $ 79,016 5 51,954 $ 220,627 S 163,939 $ 160,422 5 384,021 $ 661,558 S 721,669 $ 482,040 OPUS Bank- Interest Checking - 1,003,049 1,003,567 1,004,157 1,004,694 1,005,248 1,005,786 1,006,406 1,007,112 1,007,730 1,008,458 LAIF 2,545,123 5,259,443 4,790,701 4,793,969 4,543,969 4,548,093 4,548,093 4,548,093 4,555,839 4,555,839 4,555,839 Malaga Bank CDARS - CD'S 2,455,000 - - - - - Malaga Bank/Preferred Bank -CD'S 245,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 ACTIVE DEPOSITS TOTALS $ 5,740,006 $ 6,846,739 $ 6,368,284 5 6,345,080 $ 6,264,290 5 6,212,280 5 6,209,301 5 6,433,520 5 6,719,509 $ 6,780,238 $ 6,541,337 INACTIVE DEPOSITS Opus Bank -Checking 5 330,109 5 18,311 $ 106,944 $ 30,288 $ 14,182 5 68,209 5 46,549 $ 148,267 5 54,829 5 67,810 Petty Cash 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 INACTIVE DEPOSITS TOTALS $ 331,609 $ 19,811 5 108,444 $ 31,788 $ 15,682 $ 69,709 $ 48,049 $ 149,767 $ 56,329 $ 69,310 GRAND TOTAL CASH 5 6,071,615 5 6,866,550 5 6,476,728 5 6,376,868 $ 6,279,972 $ 6,281,989 $ 6,257,350 5 6,583,287 $ 6,775,838 $ 6,849,548 26,917 1,500 $ 28,417 S 6,569,754 Active Deposits ^ From Previous Month $ (651,003) $ (100,466) $ (478,455) $ (23,204) S (80,790) S (52,010) $ (2,979) $ 224,219 5 285,989 $ 60,729 $ (238,901) IL LIQUIDITY CALCULATION Liquidity $ 4,653,502 $ 4,794,590 $ 4,732,307 5 4,732,307 5 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 $ 4,732,307 Average Cash Balance $ 5,508,178 $ 6,099,387 5 6,139,716 $ 6,172,894 $ 6,201,875 $ 6,237,491 $ 6,275,342 $ 6,319,888 $ 6,364,242 5 6,442,565 5 6,419,249 Emergency Reserve Per Policy 5 696,300 5 809,248 $ 809,248 $ 809,248 5 809,248 $ 809,248 $ 809,248 5 807,904 $ 807,904 $ 807,904 $ 807,904 Six Month Cash Reserve $ 1,386,376 $ 948,193 $ 1,137,239 51,178,995 $ 1,190,780 $ 1,175,432 $ 1,166,759 $ 1,189,736 $ 1,203,110 $ 1,214,087 $ 1,283,136 Available Reserve for Longer Term Investment 5 4,353,630 $ 5,898,546 $ 5,231,045 $ 5,166,085 5 5,073,510 $ 5,036,848 5 5,042,542 S 5,243,784 $ 5,516,399 $ 5,566,151 $ 5,258,201 III: PORTFOLIO DIVERSIFICATION DIVERSIFICATION BY INSTRUMENT Money Market 8.62% 1.30% 1.24% 0.82% 3.52% 2.64% 2.58% 5.97% 9.85% 10.64% 7.37% Interest Checking 0.00% 14.65% 15.76% 15.83% 16.04% 16.18% 16.20% 15.64% 14.99% 14.86% 15.42% LAIN 44.34% 76.82% 75.23% 75.55% 72.54% 73.21% 73.25% 70.69% 67.80% 67.19% 69.65% Treasury Bills 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Certificates of Deposit 47.04% 7.23% 7.77% 7.80% 7.90% 7.97% 7.97% 7.70% 7.36% 7.31% 7.57% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% DIVERSIFICATION BY MAURITY Less Than 90 Days 90 Days - 13 Weeks Six Months - 26 Weeks One Year - 52 Weeks 52.96% 78.12% 76.47% 80.23% 76.06% 75.85% 75.83% 76.66% 76.66% 77.84% 77.02% 0.00% 0.00% 3.85% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 47.04% 18.23% 15.76% 15.83% 19.95% 20.13% 20.14% 19.45% 19.45% 18.48% 19.16% 0.00% 3.65% 3.93% 3.94% 3.99% 4.02% 4.03% 3.89% 3.89% 3.68% 3.82% 100.00% 100.00% 100.01% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% IV. PORTFOLIO PERFORMANCE MEASURES Yield at Cost Month 0.314% 0.601% 0.611% 0.635% 0.637"/0 0.620% 0.68090 0.706% 0.712% 0.725% 0.784% BENCHMARKS 6 Month CD 0.27 0.29 0.29 0.3 0.32 0.38 0.41 0.50 0.65 0.71 0.71 1 Year CD 1.02 1.13 1.14 1.15 1.18 1.20 1.22 1.25 1.26 1.24 1.24 90 Day T -Bill 0.02 0.3 0.3 0.3 0.3 0.35 0.35 - 0.35 0.56 0.74 0.74 2 Year Treasury 0.69 0.67 0.67 0.68 0.68 0.70 - 0.70 0.71 1.20 1.31 1.31 10 Year Treasury 2.36 1.50 1.50 1.49 1.50 1.49 1.52 1.55 2.12 2.49 2.49 AnnuallnterestBudget $ 13,550 $ 14,000 S 15,475 $ 15,475 $ 15,475 $ 15,475 5 15,475 5 15,475 $ 15,475 5 30,475 5 30,475 Money Market $ 615 $ 6,057 $ 9 $ 19 $ 30 $ 52 74 105 170 253 327 Interest Checking (2) 542 1,150 1,692 2,258 2,802 3,441 4,161 4,783 5,527 MalagaBankPreferredBanks-CD'S 8,011 4,760 260 752 1,022 741 1,010 1,539 1,539 1,811 LAIF 4,956 6,563 4,664 4,664 4,664 12,411 12,411 12,411 LAIF Mark to Market (Net) - - - - - - - - - Total YTD Interest Earned $ 13,582 $ 17,380 $ 551 $ 1,429 5 2,475 5 7,997 $ 8,282 5 9,221 $ 18,282 5 18,986 5 20,077 Over/(Under) Annual Budget $ 32 5 3,380 5 (14,924) $ (14,046) 5 (13,000) $ (7,478) $ (7,193) 5 (6,254) $ 2,807 $ (11,489) $ (10,398) %ofAnnualBudget 100.24% 124.14% 3.56% 9.23% 15.99% 51.67% 53.52% 59.58% 118.14% 62.309 65.88% CITY OF ROLLING HILLS LIQUIDITY CALCULATION BASED ON FISCAL YEAR 2016-2017 ACTUAL/CASH BUDGET FORECAST as of March 31, 2017 MONTHLY CASH BALANCES Month OPUS July $ 1,189,527 $ August 1,086,399 Sept 1,239,503 Oct 1,237,396 Nov 1,212,757 Dec 1,538,694 Jan 1,723,499 Feb 1,797,209 March 1,517,415 April (c) 500,230 May 1,465,719 June 1,110,607 T -Bill (1) $ 15,618,955 (2) $ LAIF $ 4,793,968 4,793,968 4,543,969 4,548,093 4,548,093 4,548,093 4,555,839 4,555,839 4,555,839 4,009,443 5,259,443 5,259,443 - (2) $ 55,972,031 Average $ 1,301,580 $ Notes: $ 4,664,336 Lowest Balance Highest Expense (a) $ 4,754,673 (b) $ 522,596 (d) Liquidity Calculation (2) MALAGA - CD's CDARS - CD's $ 495,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 495,000 245,000 (a) 245,000 495,000 $ 5,440,000 Total Cash By Month $ 6,478,495 6,375,367 6,278,472 6,280,489 6,255,850 6,581,787 6,774,338 6,848,048 6,568,254 4,754,673 6,970,162 6,865,050 $ 77,030,986 453,333 (e) $ (e) Average Monthly Cash Balance Less 40% Emergency Reserve Available Investment Liquidity 6,419,249 Expenditures By Month (b) $ 522,596 181,728 140,945 107,046 125,127 506,268 136,431 148,082 286,179 132,131 Average 127,383 Cash Balance 152,355 (e) $ 6,419,249 (1) $ 2,566,271 Lowest Deposits (c) $ 500,230 (d) (1) Actual/Forecast Cash Budget FY 2016/17 (2) Monthly Bank Reconciliations (3) Per Investment Policy FY 15/16 General Fund Audited Revenue $2,019,759 X 40% = $807,904 (4) Six Month Cash Reserve based on FY 16/17 Actual/Forecasted Annual Expenditures divided by two. $ 213,856 Six Month Liquidity Cash Reserve $ 4,732,307 (4) $ 1,283,136 (d) $ 4,732,307 (e) $ 6,419,249 - (3) (807,904) $ 4,732,307 $ 5,611,345 INVESTMENT ALLOCATIONS SUMMARY as of March 31, 2017 Investment Type Book Value Less Than 90-180 181-360 One Two Three Price @ Cost 90 Days Days Days Year Years Years Money Market 7.37% $ 482,040 $ 482,040 $ $ $ $ $ LAIF 69.65% 4,555,839 4,555,839 - - Interest Checking 15.42% 1,008,458 1,008,458 - CD'S 7.57% 495,000 245,000 250,000 Total Active Deposits 100.00% $ 6,541,337 $ 5,037,879 $ $ 1,253,458 $ 250,000 $ Cash Six Month Active Cash Reserve Cash Liquidity Deposits Reserve Per Policy Reserve Liquidity FY 15/16 Cash Budget $ 4,732,307 $ 6,541,337 $ 1,809,030 $ 807,904 $ 1,283,136 Maturity Investment Allocation Less Than 90 Days 77.02% 90 Days - 13 Weeks 0.00% Six Months - 26 Weeks 19.16% One Year - 52 Weeks 3.82% Two Years - 104 Weeks 0% Three Years - 156 Weeks 0% 100.00% TO: FROM: BY: SUBJECT: ge't Ra (lief qiee4 INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No: 10-B Mtg. Date: 04/24/17 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL RAYMOND R. CRUZ, CITY MANAGER TERRY SHEA, FINANCE DIRECTOR FY 2017/18 BUDGET PREPARATION DOCUMENTS 1) FY 2016/2017 YEAR-END REVENUE AND EXPENDITURE PROJECTIONS 2) FY 2017/2018 CONSUMER PRICE INDEX (CPI) ADJUSTMENT FOR BUDGET AND SOLID WASTE COLLECTION SERVICES DATE: APRIL 24, 2017 ATTACHMENTS: FY 2016/2017 Year -End Revenue and Expenditure Projections February 27, 2017 Letter from Allied Waste Consumer Price Index Table RECOMMENDATION Included for your information are the FY 2016/2017 Year-end Revenue and Expenditure projections for the General Fund, staff's validation of Allied Waste Services' request for an annual CPI increase of 1.10% and March 2017 Consumer Price Index Table. This report is for informational purposes, recommended to be "received and filed". BACKGROUND/DISCUSSION Year -End Projections Attached is the Finance Department's revenue and expenditure projections for the fiscal year ending June 30, 2017. This budget to actual report is through February 2017. We are projecting total General Fund Revenues of $1,964,067 which is $7,467 higher than the amended Budget amount of $1,956,600. The increased revenues are primarily Property Tax and Proposition A Exchange Funds. For General Fund Expenditures we are projecting $1,736,630 which is $129,097 lower than the amended budget amount of $1,865,727. The decrease is due primarily to the following: City Administration Department projected savings associated with Codification and Election expense; Planning & Development Department projected savings associated with Storm Water Management, Building Inspection expense and Special Project Study & Consultant expense; and Non -Department projected savings associated with unspent Contingency. We are projecting a surplus of $227,437 before all operating transfers. Consumer Price Index Attached from Allied Waste, in conformance with its Franchise Agreement, is a letter identifying (requesting) an annual CPI increase for fiscal year (FY) 2017/18. Staff has reviewed and confirmed that the CPI of 1.10% for a corresponding increase in FY 2017/18 is accurate. The applicable sections of the Franchise Agreement are as follows: Section 1.17 CPI "CPI" means the Consumer Price Index for All Urban Consumers (CPI -U) for the Los Angeles - Riverside -Orange County area. Section 11.5 Adjustment of Service Fees Beginning on July 1, 2011, and on each July 1 thereafter during the Term of this Agreement, Allied may request, and the City shall grant, an annual adjustment to the service fees shown in Exhibit A (or those service fees then in effect at the time of the requested adjustment). Each service fee adjustment shall be effective on July 1. Allied shall notify City of its request to adjust service fees no later than March 1 prior to the effective date of the adjustment. If Allied fails to so notify City by March 1, City shall not be obligated to adjust the service fees for the next Agreement Year. Service fees shall be annually adjusted at the same rate of change as the annual percentage change in the CPI up to five percent (5.0%) and subject to Section 11.10. If the annual percentage change in the CPI is zero or less than zero, the service fees shall not be adjusted. In addition, where appropriate for preparing the FY 2017/18 budget (e.g., where/if necessary for some contracts, materials and supplies and cost -of -living adjustments), staff is projecting a May -to -May CPI of 2.7%. CONCLUSION In conclusion, it is recommended that the City Council receive and file the proposed FY 16/17 Year-end Projections for the General Fund and FY 17/18 CPI adjustment information for budget and solid waste collection services. This report is for informational purposes and, the FY 2017/18 budget will reflect the CPI in the projected expenditures where appropriate. TS:RC:hl Bdgt CPI — CC Staff Report.docx 4/20/2017 10:21 AM CITY OF ROLLING HILLS GENERAL FUND REVENUES & EXPENDITURES FISCAL YEAR 2016-17 PROJECTIONS FINAL VARIANCE FAVORABLE ADJUSTED % ACTUAL PROJECTED (UNFAVORABLE) ANNUAL BUDGET JULY TO MARCH TO BUDGET VS BUDGET USED FEB JUNE PROJECTED PROJECTED FY 16/17 THRU FEB FY 16/17 FY 16/17 FY 16/17 FY 16/17 GENERAL FUND REVENUES & EXPENDITURES SUMMARY GENERAL FUND REVENUES TAXES $ 966,800 60.13% $ 581,358 424,500 $ 1,005,858 $ 39,058 OTHER AGENCIES 197,000 50.25% 98,984 98,000 196,984 (16) LICENSES & PERMITS 601,900 35.51% 213,724 361,850 575,574 (26,326) USE OF PROPERTY & MONEY 90,950 65.55% 59,621 29,318 88,939 (2,011) EXCHANGE FUNDS 56,250 - - 56,250 56,250 - OTHER REVENUES 43,700 34.35% 15,011 25,450 40,461 (3,239) TOTAL REVENUES GENERAL FUND EXPENDITURES 01 CITY ADMINISTRATION $ 1,956,600 49.51% $ 968,699 5 995,368 5 1,964,067 $ 7,467 EMPLOYEE SALARIES S 314,300 62.11% 5 195,218 $ 113,000 $ 308,218 $ 6,082 EMPLOYEE BENEFITS 135,717 72.89% 98,919 46,500 145,419 (9,702) TOTAL PERSONNEL 450,017 65.36% 294,138 159,500 453,638 (3,621) MATERIALS & SUPPLIES 85,400 54.52% 46,561 31,465 78,026 7,374 CONTRACTUAL SERVICES 86,800 55.32% 48,019 32,882 80,901 5,899 CAPITAL OUTLAY 10,000 87.68% 8,768 - 8,768 1,233 01 TOTAL CITY ADMINISTRATION $ 632,217 62.87% $ 397,486 $ 223,847 621,333 10,884 05 FINANCE MATERIALS & SUPPLIES 160 383.75% 614 - 614 (454) CONTRACTUAL SERVICES 110,400 54.00% 59,619 47,040 106,659 3,741 CAPITAL OUTLAY 20,000 0.00% - 20,000 20,000 - 05 TOTAL FINANCE $ 130,560 46.13% $ 60,233 $ 67,040 $ 127,273 $ 3,287 15 PLANNING & DEVELOPMENT EMPLOYEE SALARIES $ 197,400 61.89% $ 122,163 5 69,055 $ 191,218 $ 6,182 EMPLOYEE BENEFITS 79,950 63.43% 50,713 26,314 77,027 2,923 TOTAL PERSONNEL 277,350 62.33% 172,876 95,369 268,245 9,105 MATERIALS & SUPPLIES 10,000 28.34% 2,834 750 3,584 6,416 CONTRACTUAL SERVICES 443,000 37.75% 167,223 226,200 393,423 49,577 CAPITAL OUTLAY - - - - 15 TOTAL PLANNING & DEVELOPMENT $ 730,350 46.95% S 342,933 $ 322,319 5 665,252 S 65,098 25 LAW ENFORCEMENT S 247,600 48.64% $ 120,439 $ 111,350 5 231,789 $ 15,811 65 NON -DEPARTMENT $ 62,900 35.51% $ 22,338 5 17,600 S 39,938 $ 22,962 75 CITY PROPERTIES $ 62,100 47.58% 5 29,545 $ 21,500 5 51,045 $ 11,055 GENERAL FUND TOTAL EXPENDITURES $ 1,865,727 52.15% $ 972,974 S 763,656 S 1,736,630 $ 129,097 NET REVENUES BEFORE TRANSFERS $ 90,873 $ (4,275) $ 231,712 5 227,437 5 136,564 TRANSFERS $ (344,050) -4.65% $ 16,000 5 (360,050) 5 (344,050) $ NET REVENUE(DEFICIT) AFTER TRANSFERS 5 (253,177) $ 11,725 5 (128,338) $ (116,613) $ 136,564 City of Rolling Hills 2016-2017 Yearend Budget Projections 4/20/2017 10:21 AM CITY OF ROLLING IIILLS GENERAL FUND REVENUES & EXPENDITURES FISCAL YEAR 2016-17 PROJECTIONS FINAL VARIANCE FAVORABLE ADJUSTED % ACTUAL PROJECTED (UNFAVORABLE) ANNUAL BUDGET JULY TO MARCH TO BUDGET VS BUDGET USED FEB JUNE PROJECTED PROJECTED FY 16/17 THRU FEB FY 16/17 FY 16/17 FY 16/17 FY 16/17 GENERAL FUND REVENUES & EXPENDITURES DETAIL GENERAL FUND REVENUES 4001 TAXES: 401 Property Taxes $ 916,700 60.54% $ 555,005 $ 405,000 $ 960,005 $ 43,305 405 Sales Tax 3,300 158.67% 5,236 4,500. 9,736 6,436 410 Real Estate Transfer Tax 46,800 45.12% 21,118 15,000 36,118 (10,682) 4001 Total 966,800 60.13% 581,358 424,500 1,005,858 39,058 4030 OTHER AGENCIES 420 Motor Vehicle in Lieu Tax -VLF 197,000 50.25% 98,984 98,000 196,984 (16) 4050 LICENSES & PERMITS 440 Building & Other Permit Fees 537,600 33.83% 181,852 340,000 521,852 (15,748) 450 Variance, Planning & Zoning Fees 44,000 48.84% 21,491 12,000 33,491 (10,509) 455 Animal Control Fees 1,300 39.23% 510 350 860 (440) 460 Franchise Fees 19,000 51.95% 9,871 9,500 19,371 371 4050 Total 601,900 35.51% 213,724 361,850 575,574 (26,326) 4060 FINES & VIOLATIONS 480 Fines & Traffic Violations 13,300 57.40% 7,634 6,500 14,134 834 5000 USE OF PROPERTY & MONEY 600 City Hall Leasehold RHCA 60,950 66.66% 40,632 20,318 60,950 670 Interest Earned 30,000 63.30% 18,989 9,000 27,989 (2,011) 5000 Total 90,950 65.55% 59,621 29,318 88,939 (2,011) 6000 CHARGES FOR SERVICES 601 Reimbursement GA M&O - RHCA 602 Reimbursement PW M&O - RHCA 9,000 61.47% 5,533 3,400 8,933 (68) 6000 Total 9,000 61.47% 5,533 3,400 8,933 (68) 6500 EXCHANGE FUNDS 620 Proposition A 56,250 56,250 56,250 6700 OTHER REVENUE - 650 PSAF & COPS 800 74.13% 593 200 793 (7) 655 Burglar Alarm Responses 600 83.33% 500 350 850 250 675 Miscellaneous 20,000 3.76% 752 15,000 15,752 (4,248) 6700 Total 21,400 8.62% 1,845 15,550 17,395 (4,005) TOTAL GENERAL FUND REVENUES $ 1,956,600 49.51% $ 968,699 $ 995,368 $ 1,964,067 $ 7,467 City of Rolling Hills 2016-2017 Yearend Budget Projections 4/20/2017 10:21 AM CITY OF ROLLING HILLS GENERAL FUND REVENUES & EXPENDITURES FISCAL YEAR 2016-17 PROJECTIONS GENERAL FUND EXPENDITURES 01 CITY ADMINISTRATION FINAL VARIANCE FAVORABLE ADJUSTED % ACTUAL PROJECTED (UNFAVORABLE) ANNUAL BUDGET JULY TO MARCH TO BUDGET VS BUDGET USED FEB JUNE PROJECTED PROJECTED FY 16/17 THRU FEB FY 16/17 FY 16/17 FY 16/17 FY 16/17 7001 Employee Salaries 702 Salaries Full Time 5 314,300 62.11% $ 195,218 $ 113,000 $ 308,218 $ 6,082 703 Salaries Part Time - - - - - 7001 Total 314,300 62.11% 195,218 113,000 308,218 6,082 7005 Employee Benefits 710 Retirement CalPERS - Employer 34,950 74.95% 26,196 8,000 34,196 754 711 Retirement CaIPERS - Employee - - 715 Workers Compensation Insurance 6,600 66.52% 4,390 2,200 6,590 10 716 Group Insurance 43,900 85.06% 37,342 17,500 54,842 (10,942) 717 Retiree Medical 17,467 76.67% 13,393 6,000 19,393 (1,926) 718 Employer Payroll Taxes 25,100 46.67% 11,713 10,000 21,713 3,387 719 Deferred Compensation 5,300 80.86% 4,286 2,000 6,286 (986) 720 Auto Allowance 2,400 66.67% 1,600 800 2,400 - 7005 Total 135,717 72.89% 98,919 46,500 145,419 (9,702) 7500 Materials & Supplies 740 Office Supplies & Expense 18,000 62.99% 11,339 7,500 18,839 (839) 745 Equipment Leasing Costs 2,800 99.97% 2,799 150 2,949 (149) 750 Dues & Subscriptions 11,300 90.50% 10,227 500 10,727 573 755 Conference Expense 9,150 13.04% 1,193 7,000 8,193 957 757 Meeting Expense 1,300 . 165.38% 2,150 100 2,250 (950) 759 Training & Education 3,500 0.00% 2,500 2,500 1,000 761 Auto Mileage 500 24.35% 122 125 247 253 765 Postage 13,000 34.62% 4,500 7,000 11,500 1,500 770 Telephone 5,800 49.77% 2,887 2,000 4,887 913 775 City Council Expense 6,000 57.69% 3,461 1,000 4,461 1,539 776 Miscellaneous Expenses 10 (10) - 780 Minutes Clerk Meetings 4,800 66.92% 3,212 1,600 4,812 (12) 785 Codification 6,050 9.09% 550 1,000 1,550 4,500 790 Advertising 451 451 (451) 795 Other General Administrative Expense 3,200 114.41% 3,661 1,000 4,661 (1,461) 7500 Total 85,400 54.52% 46,561 31,465 78,026 7,374 8000 Contractual Services 801 City Attorney 65,000 56.97% 37,030 30,000 67,030 (2,030) 802 Legal Expenses - Other 3,000 1.90% 57 500 557 2,443 820 Website 6,000 69.12% 4,147 1,382 5,529 471 850 Election Expense City Council 5,000 0.00% 1,017 1,017 3,983 890 Consulting Fees 7,800 73.95% 5,768 1,000 6,768 1,032 8000 Total 86,800 55.32% 48,019 32,882 80,901 5,899 9000 Capital Outlay 950 Capital Outlay - Equipment 3,000 4,893 (4,893) - 3,000 948 Capital Outlay - City Hall Improvements 7,000 8,768 8,768 (1,768) 955 Disaster Emergency - Equipment 3,875 (3,875) - - 9000 Total 10,000 8,768 - 8,768 1,233 01 TOTAL CITY ADMINISTRATION $ 632,217 62.87% $ 397,486 $ 223,847 $ 621,333 $ 10,884 City of Rolling Hills - 2016-2017 Yearend Budget Projections 4/20/2017 10:21 AM CITY OF ROLLING BILLS GENERAL FUND REVENUES & EXPENDITURES FISCAL YEAR 2016-17 PROJECTIONS FINAL VARIANCE FAVORABLE ADJUSTED % ACTUAL PROJECTED (UNFAVORABLE) ANNUAL BUDGET JULY TO MARCH TO BUDGET VS BUDGET USED FEB JUNE PROJECTED PROJECTED FY 16/17 THRU FEB FY 16/17 FY 16/17 FY 16/17 FY 16/17 05 FINANCE 7500 Materials & Supplies 750 Dues & Subscriptions $ 160 383.75% $ 614 $ $ 614 $ (454) 776 Miscellaneous Expenses - - - - 7500 Total 160 383.75% 614 614 (454) 8000 Contractual Services 810 Annual Audit 19,000 82.84% 15,740 1,040 16,780 2,220 890 Consulting Fees 91,400 48.01% 43,879 46,000 89,879 1,521 8000 Total 110,400 54.00% 59,619 47,040 106,659 3,741 9000 Capital Outlay 950 Capital Outlay - Equipment 9000 Total Capital Outlay 05 TOTAL FINANCE 15 PLANNING & DEVELOPMENT 20,000 20,000 20,000 20,000 20,000 20,000 $ 130,560 46.13% $ 60,233 $ 67,040 $ 127,273 $ 3,287 7001 Employee Salaries 702 Salaries Full Time $ 178,400 57.89% $ 103,273 $ 69,055 $ 172,328 $ 6,072 703 Salaries Part Time 19,000 99.42% 18,890 - 18,890 110 7001 Total 197,400 61.89% 122,163 69,055 191,218 6,182 7005 Employee Benefits 710 Retirement Ca1PERS - Employer 21,550 59.71% 12,868 10,300 23,168 (1,618) 711 Retirement CaIPERS - Employee - - - 715 Workers Compensation Insurance 4,100 66.51% 2,727 1,364 4,091 9 716 Group Insurance 28,300 61.07% 17,282 8,650 25,932 2,368 718 Employer Payroll Taxes 15,500 65.52% 10,156 5,100 15,256 244 719 Deferred Compensation 6,900 88.12% 6,080 - 6,080 820 720 Auto Allowance 3,600 44.44% 1,600 900 2,500 1,100 7005 Total 79,950 63.43% 50,713 26,314 77,027 2,923 7500 Materials & Supplies 758 Planning Commission Meeting 3,500 23.83% 834 650 1,484 2,016 776 Miscellaneous Expenses 2,200 90.91% 2,000 100 2,100 100 750 Dues & Subscriptions 150 0.00% - - 150 755 Conference Expense 1,400 0.00% 1,400 759 Training & Education 2,750 0.00% 2,750 7500 Total 10,000 28.34% 2,834 750 3,584 6,416 8000 Contractual Services 802 Legal Expense -Other 13,000 67.09% 8,722 4,000 12,722 278 872 Property Development - Legal Expense 35,000 48.77% 17,070 20,000 37,070 (2,070) 878 Build Inspection LA County/Willdan 221,000 19.46% 43,004 150,000 193,004 27,996 881 Storm Water Management 141,500 67.03% 94,852 40,000 134,852 6,648 882 Variance & CUP Expense 6,000 59.58% 3,575 2,200 5,775 225 884 Special Project Study & Consultant 26,500 0.00% - 10,000 10,000 16,500 8000 Total 443,000 37.75% 167,223 226,200 393,423 49,577 9000 Capital Outlay 950 Capital Outlay - Equipment 9000 Total Capital Outlay 15 TOTAL PLANNING & DEVELOPMENT $ 730,350 46.95% $ 342,933 $ 322,319 $ 665,252 $ 65,098 City of Rolling Hills 2016-2017 Yearend Budget Projections 4/20/2017 10:21 AM CITY OF ROLLING HILLS GENERAL FUND REVENUES & EXPENDITURES FISCAL YEAR 2016-17 PROJECTIONS FINAL VARIANCE FAVORABLE ADJUSTED % ACTUAL PROJECTED (UNFAVORABLE) ANNUAL BUDGET JULY TO MARCH TO BUDGET VS BUDGET USED FEB JUNE PROJECTED PROJECTED FY 16/17 THRU FEB FY 16/17 FY 16/17 FY 16/17 FY 16/17 25 LAW ENFORCEMENT 8200 Law Enforcement 830 Law Enforcement $ 211,600 47.95% $ 101,456 $ 101,500 $ 202,956 $ 8,644 833 Other Law Enforcement Expenses 8,000 12.14% 971 3,000 3,971 4,029 837 Wild Life Management & Pest Control 23,000 67.75% 15,582 4,500 20,082 2,918 838 Animal Control Expense 5,000 48.58% 2,429 2,350 4,779 221 8200 Total 247,600 48.64% 120,439 111,350 231,789 15,811 25 TOTAL LAW ENFORCEMENT $ 247,600 48.64% $ 120,439 $ 111,350 $ 231,789 $ 15,811 65 NON -DEPARTMENT 7500 Materials & Supplies 776 Miscellaneous Expenses 901. South Bay Community Organization 985 Contingency 7500 Total $ 4,100 60.98% 25,000 0.00% 29,100 2,500 $ 1,600 8,000 4,100 8,000 17,000 8.59% 2,500 9,600 12,100 17,000 8000 Contractual Services 895 Insurance & Bond Expense 18,300 65.74% 12,031 6,000 18,031 269 896 Insurance Other - 8000 Total 18,300 65.74% 12,031 6,000 18,031 269 8500 Community Promotion 915 Community Recognition 9,500 74.67% 7,094 7,094 2,406 916 Civil Defense Expense 1,500 47.53% 713 - 713 787 917 Emergency Preparedness 4,500 0.00% - 2,000 2,000 2,500 8500 Total 15,500 50.37% 7,807 2,000 9,807 5,693 65 TOTAL NON -DEPARTMENT 75 CITY PROPERTIES $ 62,900 35.51% $ 22,338 $ 17,600 $ 39,938 $ 22,962 8000 Contractual Services 925 Utilities $ 22,000 73.02% $ 16,065 $ 8,000 $ 24,065 $ (2,065) 930 Repairs & Maintenance 14,500 51.34% 7,444 5,000 12,444 2,056 932 Area Landscaping 25,600 23.58% 6,036 8,500 14,536 11,064 8000 Total 62,100 47.58% 29,545 21,500 51,045 11,055 9000 Capital Outlay 946 Building & Equipment 9000 Total 75 TOTAL CITY PROPERTIES ` $ 62,100 47.58% $ 29,545 $ 21,500 $ 51,045 $ 11,055 131 GENERAL FUND TOTAL EXPENDITURES $ 1,865,727 52.15% $ 972,974 $ 763,656 $ 1,736,630 $ 129,097 NET REVENUES BEFORE TRANSFERS $ 90,873 $ (4,275) $ 231,712 $ 227,437 $ 136,564 699 Fund Transfers (OUT) IN Traffic Safety Fund $ (55,450) 0.00% $ $ (55,450) $ (55,450) $ - Capital Improvement Fund 0.00% Underground Utility Fund (250,000) 0.00% (250,000) (250,000) Community Facilities Fund (62,600) 0.00% (62,600) (62,600) Refuse Collection Fund 24,000 66.67% 16,000 8,000 24,000 699 Total (344,050) -4.65% 16,000 (360,050) (344,050) NET REVENUE(DEFICIT) AFTER TRANSFERS $ (253,177) $ 11,725 $ (128,338) $ (116,613) $ 136,564 City of Rolling Hills 2016-2017 Yearend Budget Projections EPUBLIO SAC'S February 27, 2017 4905 5. San Pedro St., Gardena, CA 90248 o 800.299.898 reaubiicservices.com City of Rolling Hills Attn: Raymond Cruz 2 Portuguese Bend Road Rolling Hills, CA Re: Petition for Rate Adjustment Related to Trash Collection Services Dear Mr. Cruz, As per the agreement between the City of Rolling Hills and Allied Waste Services for the collection of waste, made and entered into on April 26, 2010 by and between the City Council of the City of Rolling Hills and ALLIED WASTE SERVICES OF NORTH AMERICA, LLC, a subsidiary of Republic Services, Inc., we are hereby requesting a rate adjustment. Section 11.5 of the agreement states, Allied Services, Inc. is entitled to request an Annual CPI adjustment. Based on the U.S. Department of Labor Bureau of Labor Statistics, the All Urban Consumers Price Index for the Los Angeles -Riverside -Orange County Area (CPI), we calculated a 12 -month period for July 1, 2015 - July 1, 2016 adjustment date, Based on those calculations stated in the section, we are able to determine adjustment for the service commencing July 1, 2017 is requested a 1.10% increase. Should there be any .questions concerning this request, please do not hesitate to call me directly at 310-436-7310. Samuel A. Peinia Municipal Relationship Manager, Gardena Hauling Division SPena@RepublicServices.com U 4I1ED STa?lS vl:PMt1'MENI or LA1sc)R Bureau of Labor Statistics Con :uiner PAce Index -All Urban Consumers Woe Id: CUURA 421SA0 Ho t Seasonally Ad)ueled Area: Los Anuolea-RlyereideOrenge Co un ty, CA Item: All hems Base Palott 1962. 84e 100 8111 on Property Tax BIB Annual Base Betake Foe (per year) 810ed Directly to Customer On -Ca ll Bulky Item Collection h Excess of O ne Item prYeer (per Item) On -Call Brush Co llection In ECM! of One Load per Year (pr load) Emrerpe mry Services Disposal Tipping Fee et Sunshine Canyon La ndfil (pr ton) Rolle Box Se rvice Fee (Includes c oat of dis posal) (per load) Hare Carat Yea r Annual Monthly 685 2011 700,987 58.413,96 2012 717,442 59,798.80 2013 731,313 60,942.74 2014 741,007 81,755,80 2015 765,980 02,998. 31 2010 700,397 03,081,41 2017 774,789 84,584.10 $ 25.22 $ 370.32 $ 25.81 $ 387.21 $ 20. 31 $ . 394.70 $ 20.06 $ 390.98 $ $ 408.01 27.20 $ 27 .57 $ 413.00 8 27.87 9 418,15 $ 42. 37 $ 370. 32 $ 43.37 r $ 44.21 $ 307.21 $ 304.70 $ 44. 80 $ 399.98 9 $ 400.01 45.70 $ 48 .33 $ 413.60 $ 48.84 $ 410 .15 1.09% 1.10 % 1 .10 % 1.10 % City of Rolling Hills Proposed Adjusted Rates, Effective July lst, 2017 1 Sonde* Fees Bill on Property Tax Bill Proposed Adjusted Rates $ 1,131.05 Annual Base Service Fee (per year) Billed Directly to Customer On -Call Bulky Item Collection in Excess of One Item per Year (per item) $ 27.87 On -Call Brush Collection In Excess of One Load per Year (per load) $ 418.15 Emergency Services Disposal Tipping Fee at Sunshine Canyon Landfill(per ton) $ 46.84 Rolloff Box Service Fee (includes cost of disposal) (per load) $ 418.15 11, Table 16. Consumer Price Index for All Urban Consumers (CPI -U): Selected areas, by expenditure category and commodity and service group -Continued (1982-84=100, unless otherwise noted) Monthly cities and pricing schedule 11 Item and group Cleveland - Akron, OH 2 Dallas - Fort Worth, TX Los Angeles- Riverside - Orange County, C A3 Index Mar. 2017 Percent change from - Mar. Jan. 2016 2017 Index Mar. 2017 Percen change from - Mar. Jan. 2016 2017 Index Mar. 2017 Percent fror Mar. 2016 change Jan. 2017 Expenditure category All items 6 222.849 1.3 0.3 223.782 2.2 0.3 254.525 2.7 0.9 All items (1967=100) 714.113 - - 701.993 - - 751.980 Food and beverages 6 250.214 -.2 .4 251.844 .9 .2 254.571 1.0 .5 Food 6 254.614 -.4 .5 246.342 .8 .3 254.820 1.0 .6 Food at home 240.982 -1.6 .3 217.199 -.3 .1 256.216 -.4 .4 Food away from home 7 279.358 1.4 .7 291.101 1.9 .4 249.274 2.9 .9 Alcoholic beverages 7 199.377 2.1 -.6 323.677 1.7 -.6 235.876 1.3 -1.5 Housing 6 207.623 1.7 .1 211.429 4.9 .8 285.975 4.2 .4 Shelter 242.235 2.0 -.1 233.220 5.9 1.1 327.750 4.8 .7 Rent of primary residence 6 8 240.779 2.4 .1 246.079 6.4 .4 343.624 5.0 .7 Owners' equivalent rent of residences 8 9 237.318 2.5 .2 249.231 5.3 .8 339.317 4.7 .5 Owners' equivalent rent of primary residence 8 9 237.318 2.5 .2 249.231 5.3 .8 339.298 4.7 .5 Fuels and utilities 194.592 2.8 3.4 219.103 4.0 -1.7 303.031 3.0 -.6 Household energy 157.572 2.1 3.2 198.187 3.6 -2.5 260.921 1.6 -1.3 Energy services 8 155.759 1.8 3.1 194.793 3.5 -2.7 259.884 1.7 -1.1 Electricity 8 164.916 -9.2 5.5 184.397 .6 .0 302.157 .5 .1 Utility (piped) gas service 8 126.922 27.6 -.8 201.776 20.0 -13.4 208.109 5.7 -4.9 Household fumishings and operations 114.921 • -2.0 -2.8 124.180 -1.6 1.5 116.522 .0 -.5 Apparel6 136.930 -4.2 5.5 111.420 -.9 5.6 112.197 -2.7 5.9 Transportation 6 191.063 .1 .1 197.464 1.8 -1.4 197.847 4.0 2.8 Private transportation 190.969 -.1 -.3 199.128 1.8 -1.1 193.043 4.2 2.8 Motor fuel 228.180 15.3 -2.3 202.844 17.0 -2.0 233.940 12.3 7.4 Gasoline (all types) 225.717 15.2 -2.3 201.735 16.9 -2.0 228.870 12.1 7.5 Gasoline, unleaded regular 10 212.654 15.5 -2.1 193.879 17.1 -2.0 229.217 12.2 7.6 Gasoline, unleaded midgrade 10 11 240.583 13.4 -3.7 214.738 16.8 -1.9 219.494 12.3 7.6 Gasoline, unleaded premium 10 246.478 13.4 -3.3 216.956 14.2 -2.0 219.062 11.5 7.1 Medical care 6 6.4 .0 Recreation 12 .1 Education and communication 12 .6 Other goods and services 6 -.9 Commodity and service group 445.113 120.320 125.043 414.741 6.2 -1.0 -.6 .0 1.4 -1.1 -.9 432.217 111.333 136.285 391.596 .2 .5 -4.2 1.1 1.7 1.5 -3.4 1.0 465.952 106.272 142.117 390.346 3.7 -.6 -2.0 .2 All items 6 222.849 1.3 .3 223.782 2.2 .3 254.525 2.7 .9 Commodities 188.244 .5 .1 171.987 .7 .4 176.116 .8 1.4 Commodities less food and beverages 157.105 1.0 -.1 136.401 .5 .6 135.189 .6 2.0 Nondurables less food and beverages 205.836 4.1 .2 168.601 4.6 1.1 177.662 2.5 3.6 Durables 105.859 -2.9 -.4 108.838 -3.8 -.1 93.543 -2.7 -.8 Services 257.873 1.9 .4 274.394 3.2 .3 324.306 3.6 .6 Special aggregate indexes All items less medical care 6 212.641 .8 .3 213.681 2.4 .2 245.352 2.6 .9 All items less shelter 217.229 1.0 .4 220.079 .5 -.1 222.476 1.3 1.0 Commodities less food 158.787 1.1 -.1 141.164 .6 .5 139.522 .7 1.9 Nondurables 227.993 1.6 .3 206.503 2.6 .6 217.027 1.7 1.9 Nondurables less food 204.925 3.9 .1 175.770 4.4 1.0 183.253 2.4 3.2 Services less rent of shelter 9 280.211 1.6 .8 331.681 .2 -.7 328.376 2.0 .5 Services less medical care services 244.809 1.7 .4 258.783 3.6 .2 312.048 3.6 .7 Energy 6 185.088 7.5 .7 201.905 9.8 -2.2 245.165 7.7 3.7 All items less energy 228.622 .9 .2 229.667 1.7 .5 257.164 2.3 .7 All items less food and energy 6 224.285 1.1 .2 226.864 1.8 .6 257.903 2.6 .7 See footnotes at end of table. 53 E CPI Detailed Report -March 2017 TO: FROM: BY: SUBJECT: DATE: ge4 atiRsai&t, geek INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 10-C Mtg. Date: 04/24/17 HONORABLE MAYOR AND CITY COUNCIL RAYMOND R. CRUZ, CITY MANAGER TERRY SHEA, FINANCE DIRECTO CONSIDERATION OF THE CITY OF ROLLING HILLS INVESTMENT POLICY; FINANCIAL, BUDGET AND DEBT POLICIES; FUND BALANCE POLICY AND RESOLUTION NO. 953 - ASSET CAPITALIZATION POLICY. APRIL 24, 2017 ATTACHMENTS: INVESTMENT POLICY FINANCIAL, BUDGET AND DEBT POLICIES FUND BALANCE POLICY RESOLUTION NO. 953 - ASSET CAPITALIZATION POLICY RECOMMENDATION At its meeting of March 27, 2017 the City Council Finance/Budget/Audit Committee reviewed the Investment Policy, the Financial, Budget and Debt Policies, Fund Balance Policy and Resolution No. 953 - Asset Capitalization Policies as attached. With no changes identified as being necessary, the policies are recommended to be approved as presented. THIS PAGE INTENTIONALLY LEFT BLANK D CITY OF ROLLING HILLS ADMINISTRATIVE POLICY/PROCEDURES INVESTMENT POLICY Original Version Effective: 09/24/2007 Current Version Effective: 04/25/2016 See end of document for complete policy history. 1.0 Policy It is the policy of the City of Rolling Hills to protect, preserve and maintain the assets of the City. It shall invest public funds in a manner that will provide the highest investment return commensurate with maximum security while meeting the cash flow demands of the City and conforming to all State and Local statutes governing the investment of public funds. 2.0 Scope The City follows the practice of pooling cash and investments of all funds, except for funds in the City's employee deferred compensation plan. Funds contained in the City's pool are designated the "General Portfolio." These funds are accounted for in the Financial Statements of the City and include: The General Fund . All Special Revenue Funds All Capital Projects Funds All Enterprise Funds All Internal Service Funds All Trust and Agency Funds The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The City's deferred compensation plans assets are with Nationwide Retirement Solutions and ICMA Retirement Corporation. The Nationwide Retirement Solutions and ICMA Retirement Corporation invests employee account assets in various investment options as directed by the individual employee. Accordingly, these assets are neither controlled by the City nor subject to this investment policy. 3.0 Prudence The City holds to the "prudent investor standard" in that all investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived and acting as a fiduciary of the public trust. The prudent investor standard set forth in Section 53600.3 of the Government Code states: "When investing, reinvesting, purchasing, acquiring, exchanging, selling or managing public funds, a trustee shall act with care, skills, prudence and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a like capacity and familiarity with those matters would use in the conduct of funds of a like character and with the like aims to safeguard the principle and maintain the liquidity needs of the agency." INVESTMENT POLICY 4/25/2016 4.0 Objectives The primary objectives, in priority order, of the City of Rolling Hills' investment activities shall be: 4.1. Safety: Safety of principal is the foremost objective of the investment program. "Safety" means that the overall value of City funds shall not be diminished in the process of securing and investing those funds or over the duration of the investments. 4.2. Liquidity: The City of Rolling Hills' investment portfolio will remain sufficiently liquid to enable the City to meet all operating requirements which might be reasonably anticipated. The liquidity of each type of investment is included in its description in the "Authorized Investments" section of this policy. 4.3. Return on Investment (Yield):The City of Rolling Hills investment portfolio shall be designed with the objective of attaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow characteristics of the portfolio. In general, the California Government Code limits authorized investments to those classes of securities which have lower risk (and therefore lower yields) than other higher risk investment choices. In each investment transaction, the anticipated return on investment is subordinate to the preceding requirement of credit and investment risk. 5.0 Delegation of Authority The City Council has the authority to select financial institutions for the City' investment and bank accounts. The City Council has designated the City Council Finance / Budget Committee, the City Manager, and the City Finance Director with the responsibility for decisions and operations for the following investment and operating bank accounts: Operating Bank Accounts • Local Agency Fund administered by the Treasurer of the State of California • Money market savings accounts • Checking accounts Certificates of Deposits/Negotiable Certificates of Deposits or Time Deposits Certificates of Deposits, Negotiable Certificates of Deposit or Time Deposits with commercial banks and /or savings and loan associations issued by a nationally or state -chartered bank, a savings association, or a federal association (as defined by Section 5102 of the Financial Code), a state or federal credit union with maturities ranging from 30 days to three years. INVESTMENT POLICY 2 4/25/2016 6.0 Ethics and Conflicts of Interest: Officers and employees involved in the investment process are required by the City of Rolling Hills' and State Government Code Section 81000 to disclose annually to the City Council any material financial interests in financial institutions that conduct business with the City and further to disclose any large personal financial / investment positions that could be related to the performance of the City, particularly with regard to the time of purchase and sales, as part of the City's conflict of interest reporting requirements. Said employees are also prohibited from accepting gifts proffered as a direct result of being employees of the City. 7.0 Authorized Financial Dealers, Institutions and Portfolio Managers: The Finance Director will maintain a list of financial institutions authorized to provide investment services, including portfolio management. No public deposit shall be made except in a qualified public depository as established by State law. Financial institutions authorized to provide investment services to the City, including portfolio management, shall utilize security broker / dealers who are duly licensed and authorized to provide investment services in the State of California. Anyone providing financial services to the City, including portfolio management must adhere to the City's investment policies as adopted by the City Council. 8.0 Authorized and Suitable Investments: The surplus funds of the City may be invested in any of the following list of eligible securities. Surplus funds are defined as those funds not immediately needed for City operations excepting those minimum balances required by the City's banks as compensation for services rendered to the City, or such other funds as otherwise determined by the Finance Director or City Manager. The list of eligible securities is drawn from the approved investments contained in the California Government Code Sections 53600 et seq., limited further by the provisions of this policy. For eligibility as a City investment, the following restrictions should be added to those contained in the California Government Code Sections 53601 et seq. They are: 8.1 U.S. Treasury Bonds, Notes & Bills — "Strips" and "Cubes" The principal and interest portions of U.S. Treasury securities are issued by the Federal Government. Frequently, broker / dealers make a market in these securities by separating the principal and interest components and marketing them separately. The principal portions of their "stripped" securities are marketed at deep discounts. "Strips" and "Cubes" do not provide income streams during the term of the investment, but rather pay a "par" amount at maturity. This makes these investments somewhat more volatile than standard U.S. Treasury securities. The City will not invest in "strips" or "cubes." 8.2 U.S. Government Agencies There are numerous government agencies listed which issue debt instruments but many lack the liquidity necessary to fit the City's portfolio requirements possibly including, for example, the issues of Federal Farm Credit Bank, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Federal Home Loan Bank, and the Student Loan Mortgage Corporation. The City will not purchase these government agency securities. INVESTMENT POLICY 3 t; 1 4/25/2016 8.3 Repurchase Agreements A repurchase agreement is a contractual agreement between a financial institution or dealer and the City in which the City lends its funds to the financial institution or dealer for a certain number of days at a stated rate of interest. In return, the City takes title to securities as • collateral until the funds and interest are repaid. The City will not enter into repurchase agreements. 8.4 Medium Term Corporate Notes The City will not purchase medium term corporate notes. 8.5 Commercial Paper and Corporate Bonds The City will not purchase commercial paper or corporate bonds. 8.6 Prohibited Investments The list of eligible securities contained in the California Government Code is extensive and includes a number of categories which are not suitable investments for City funds because of limitations in the liquidity of the instruments or the interest rates obtainable thereon. The categories in the list which have such limitations are: The notes or bonds or any obligations of the State of California or of any local agency or district of the State of California. Notes, bonds or other obligations issued by any other state or the Commonwealth of Puerto Rico. The city shall not invest any funds pursuant to Section 53600, et. Seq., in any security that could result in zero interest accrual if held to maturity. 9.0 Collateralization: All City of Rolling Hills' investments shall be collateralized as required by the State Government Code. 10.0 Maximum Maturities: To the extent possible, the City of Rolling Hills will match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, the City will not directly invest in securities maturing more than one (3) years from the date of purchase. 11.0 Internal Control: The City's external auditor with the support from the Finance Director shall annually conduct an independent review of the internal controls. Additionally, the City's external auditor with support from the Finance Director will annually perform a financial audit. Both may be conducted at the same time, when the City's annual financial audit performed. The external auditor will be an independent certified public accountant who performs his work under generally accepted auditing standards as adopted by the Auditing Standards Board (ASB) of the American Institute of Certified Public Accountants. INVESTMENT POLICY 4 ((p 4/25/2016 12.0 Performance Standards: The investment portfolio shall be designated with the objective of obtaining a rate of return throughout budgetary and economic cycles, commensurate with the investment risk constraints and the cash flow needs of the City. 13.0 Investment Policy Adoption: The City Council shall consider and adopt a written Investment Policy annually and accept quarterly Investment Reports as provided in Government Code Section 53646 et al. Policy Administrative History: Adopted September 24, 2007 Revised and Adopted February 23, 2009 Revised and Adopted March 8, 2010 Reviewed and Adopted February 28, 2011 Reviewed and Adopted May 14, 2012 Reviewed and Adopted April 22, 2013 Reviewed and Adopted March 24, 2014 Reviewed and Adopted April 27, 2015 Reviewed and Revised April 25, 2016 INVESTMENT POLICY 5 4/25/2016 THIS PAGE INTENTIONALLY LEFT BLANK CITY OF ROLLING HILLS ADMINISTRATIVE POLICY/PROCEDURES FINANCIAL, BUDGET AND DEBT POLICIES Original Version Effective: 09/24/2007 Current Version Effective: 04/25/2016 See end of document for complete policy history. Policy Framework: The purpose of the Financial, Budget and Debt Policies is to guide the City Council and other City officials in developing sustainable, balanced budgets and managing the City's finances in a prudent manner consistent with best practices. The City's commitment to adopting and operating within a balanced budget is a core financial value and policy of the City. The City of Rolling Hills Financial Policies represents the City's framework for planning and management of the City's fiscal resources. Adherence to the Financial Policies promote sound financial management which can lead to unqualified annual audits, provide assurance to the taxpayers that tax dollars are being collected and spent per City Council direction and provide a minimum of unexpected impacts upon taxpayers and users of public services. The City Council Finance / Budget Committee shall serve as the City's audit committee for the purpose of recommending the selection of an auditor to the City Council, meeting with the City Auditor, reviewing the annual audit and necessary financial statements, responding to conflicts between management and the auditor and responding to fraudulent activities. The City Council will conduct a competitive process for the selection of the independent external auditor every 5 years in conformance with GOFA standards commencing in 2015. Any non- audit work performed by the independent external auditor, if allowed, will be done under a separate contract approved by the City Council. The City Manager shall be responsible for developing and, as appropriate, implementing and managing these policies as well as subsidiary policies that execute the City's Financial Policies. The City's Financial Policies shall be in conformance with all state and federal laws, generally accepted accounting principles (GAAP) and standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). 1. Financial Reporting Entity: The City of Rolling Hills was incorporated in 1957 under the general laws of the State of California. The City operates under the Council -Manager form of government. The City Council consists of five members elected at large for overlapping four-year terms. The Mayor and Mayor Pro-Tem are selected from the City Council members and serve a one-year term. The City Council appoints a City Manager, City Attorney and City Treasurer. In addition, the City Council appoints the members of advisory Commissions and Committees. The City, directly or by contract, provides municipal services as authorized by statute. Services provided include: • Public safety through the Los Angeles County Sheriff and Fire Department • Refuse collection by contract with a private hauler • Water through California Water Service Company FINANCIAL POLICIES 1 4/25/2016 • Sewer through Los Angeles County Sanitation Districts • Recreation • Public improvements • Planning and zoning • General administrative and support services 2. Financial Reporting Policies: The City's accounting and financial reporting systems will be maintained in conformance with all state and federal laws, generally accepted accounting principles (GAAP) and standards of the Governmental Accounting Standards Board (GASB) and the Government Finance Officers Association (GFOA). Further, the City will make every attempt to implement all changes to governmental accounting practices at the earliest practical time. • The financial report should be in conformity with GAAP, demonstrate compliance with finance related legal and contractual provisions, disclose thoroughly with detail sufficient to minimize ambiguity and potential for misleading interferences. • An annual audit will be performed by an independent public accounting firm with an audit opinion to be included with the City's published Comprehensive Annual Financial Report. • The City's budget should satisfy criteria as a financial and programmatic policy document, as a comprehensive financial plan, as an operations guide for all organizational units and as a communications device for all significant budgetary issues, trends, and resource choices. • The City shall evaluate the fiscal impact of proposed changes in employee benefits to be provided. Prior to assuming liability for expanded benefits, a viable funding plan with estimates of long term impacts shall be incorporated into the analysis. • The City shall endeavor to avoid committing to new spending for operating or capital improvement purposes until an analysis of all current and future cost implications is completed. • The City shall endeavor to maintain cash reserves sufficient to fully fund the next present value of accruing liabilities, obligations to employees for vested payroll and benefits and similar obligations as they are incurred. • The City shall prepare and present to the City Council monthly interim revenue and expenditure reports and a Mid -Year Review to allow evaluation of potential discrepancies from budget assumptions. 3. Internal Control Accounting Policies: To provide a reasonable basis for making management's required representations concerning the finances of the City. • Accounting Records — Maintain accounting records in accordance with Generally Accepted Accounting Principles (GAAP). • Monthly Posting — Post a monthly record, which maintains each month's activities separate and distinct from another month's work. This provides visibility in locating errors and fixing corrections. Accounting ledgers will be reviewed and reconciled on a FINANCIAL POLICIES 4/25/2016 monthly basis to supporting documentation — Cash Receipts, Accounts Payable, Payroll and Monthly Journal Entries. • Sequential Number — Sequentially numbered instruments will be used for checks and cash receipts. Pre -numbered receipts are controlled and accounted for by an individual with no accounting handling responsibilities. The City's pre -numbered checks and pre - numbered cash receipts should be safeguarded in the Vault. All copies of voided receipt forms are retained, accounted for, and documented. • Audit Trail — The City's accounting records and systems shall provide an audit trail (e.g. paper document) that allows for the tracing of each transaction from its original document to completion. 4. Operating Management Policies: The budget process is intended to weigh all competing requests for City resources within expected fiscal constraints. Requests for new, on -going programs made outside the budget process will be discouraged. • Budget development will consider multi -year implications of current decisions and allocations and use conservative revenue forecasts. • Revenues will not be dedicated for specific purposes, unless required by law or Generally Accepted Accounting Practices (GAAP). All non -restricted revenues will be deposited in the General Fund (or other designated fund as approved by the City Manager) and appropriated by the City Council. • Current revenues will fund current expenditures. City revenues will be managed to protect programs from short-term fluctuations that impact expenditures. • The City will endeavor to identify entrepreneurial solutions to cover or recover costs of operating program. • The City shall strive to avoid returning to the City Council for new or expanded appropriations during the fiscal year. Exceptions may include emergencies, unforeseen impacts, mid -year adjustments or new opportunities. Additional personnel will be requested after service needs have been thoroughly examined and is substantiated for new program initiatives or policy directives. • All non -Enterprise user fees and charges will be evaluated at least every three years to determine the direct and indirect cost recovery rate. The analysis will be presented to the City Council. • The City shall endeavor to maintain adequate cash reserves to fund 100% replacement of capital equipment. Replacement costs will be based upon equipment Iifecycle financial analysis developed by the Finance Director and approved by the City Manager. • Balanced revenue and expenditure forecasts will be prepared to examine the City's ability to absorb operating costs due to changes in the economy, service demands, and capital improvements. The forecast will be updated annually and include a four-year outlook. FINANCIAL POLICIES 3 4/25/2016 • Cash and investment programs will be maintained in accordance with the Government Code and the adopted investment policy will ensure that proper controls and safeguards are maintained. City funds will be managed in a prudent and diligent manner with an emphasis on safety of principal, liquidity, and financial return on principal, in that order. Pursuant to State law, the City, at least annually, revises and the City Council affirms a detailed investment policy. 5. Capital Management Policies: • Capital improvement projects are defined as infrastructure or equipment purchases or construction which results in a capitalized asset and having a useful (depreciable) life of at least one year with a cost of $5,000 or more per the City's resolution Number 953. • The Finance Department shall utilize the straight-line method of calculating depreciation over the estimated useful life for all classes of assets. • The capital improvement plan will attempt to include, in addition to current operating maintenance expenditures, adequate funding to support, repair and replace deteriorating infrastructure and avoid a significant unfunded liability. • Capital improvement Iifecycle costs will be coordinated with the development of the City's operating budget. Future operating, maintenance, and replacement costs associated with new capital improvements will be forecast, matched to available revenue sources and be included in the operating budget. Capital project contract awards or purchases will include a fiscal impact statement disclosing the expected operating impact of the project or acquisition and when such cost is expected to occur. 6. Reserve Policies: It is the goal of the City to obtain and maintain a General Fund operating reserve (Rainy day fund) in the form of cash, of at least 40% of prior year audited annual General Fund revenues to cover normal seasonal cash flow variations, as well as unforeseen emergency or catastrophic impacts upon the City. • One-time revenue windfalls should be designated as a reserve or used for one-time expenditures. The funds should not be used for on -going operations. For purposes of this policy, one-time revenue windfalls shall include: CaIPERS rebates Tax revenue growth in excess of 10% in a single year Unexpected revenues (e.g., litigation settlement) Any other revenues the City Council may elect to designate as extraordinary • All unexpended General Funds from the prior fiscal year will be deposited in the General Fund Reverse Fund (Rainy Day Fund.) • The City will strive to maintain the Municipal Self -Insurance Fund with a July 1 balance of $500,000. • The City will strive to transfer $250,000 annually into the Utilities Fund for the purpose of building up the necessary balance for underground projects. • Enterprise Fund (e.g., for refuse collection) user fees and charges will be examined annually to ensure that they recover all direct and indirect costs of the service, provide FINANCIAL POLICIES 4 % 4/25/2016 for capital improvements and maintenance and maintain adequate reserves. Moreover, maintenance of cash reserves will provide a de facto rate stabilization plan. Rate increases shall be approved by the City Council following formal noticing and public hearing. Rate adjustments for enterprise operations will be based on five-year financial plans unless a conscious decision is made to the contrary. The current cash reserves shall be $175,000. 7. Budget Policies: The function of the City of Rolling Hills is primarily administrative. A. Categories of Funds • The City's annual budget contains thirteen different funds managed in conformance with the City's Fund Balance Policy: General Fund Community Facility Fund Self -Insurance Fund Refuse Fund Traffic Fund Transit Fund - Proposition A Transit Fund - Proposition C Transit Fund — Measure R Capital Projects Fund Citizens Options for Public Safety Fund (COPS) Fund California Law Enforcement Equipment Program (CLEEP) Fund. Utility Fund OPEB (Post -Employment Benefits Other Than Pensions) Fund • Each fund is considered to be a separate accounting entity for budgeting and financial reporting purposes. • The operations of each fund are accounted for by providing a separate set of self - balancing accounts which are comprised of each fund's assets, liabilities, equity, revenues and expenditures, as appropriate. • The City resources are allocated to and for individual funds based upon the purpose of the spending activities. • All funds and reserves will be evaluated annually for long-term adequacy and use requirements in conjunction with development of the City's long-term budget assumptions. B. Operating Budget Guidelines • The Budget is detailed - Expenditures are authorized line by line, item by item. Line items are used to limit precisely the amount and narrowly define what can be spent. • The Budget is annual - The annual budget period is from July 1 to June 30. The time span of the authority to spend is restricted to one year. Each year the regular cycle of budgeting is repeated. • The budget is comprehensive — The budget is prepared for all funds expended by FINANCIAL POLICIES 5 4/25/2016 the City. • The City adopts a budget by June 30 of each year. • Comparative Data - Comparative data from the prior year is presented in the annual budget in order to provide an understanding of changes in the City's financial position and operation. • Public Hearing - The City Council reviews a tentative budget and adopts the final budget. A public hearing is conducted to receive comments prior to adoption. C. Financial Review Throughout the fiscal year, monthly financial reports comparing actual amounts with budgeted amounts are prepared by the Finance Director and submitted to the City Manager and members of the City Council. As these reports are reviewed, attention is drawn to variances between budgeted amounts and actual amounts. D. Budgeted Revenues & Expenditures The City reviews fees and charges to keep pace with the cost of providing the service. 8. Debt Management Policies: The City will seek to avoid incurring debt. While the City is disposed to funding capital improvements and expenditures on a cash basis, the City will consider, and when necessary, enter into debt financing for citywide public improvement projects such as sewers and utility undergrounding. • Lease Equipment - Office Equipment has been leased on a monthly basis with the expense incurred at the time of payment. Policy Administrative History: Adopted September 24, 2007 Revised and Adopted March 24, 2008 Revised and Adopted February 23, 2009 Revised and Adopted March 8, 2010 Reviewed and Adopted February 28, 2011 Revised and Adopted May 23, 2011 Reviewed and Adopted May 14, 2012 Reviewed and Adopted April 22, 2013 Revised and Adopted September 9, 2013 Reviewed and Adopted March 24, 2014 Reviewed and Adopted April 27, 2015 Reviewed and Revised April 25, 2016 FINANCIAL POLICIES 6 4/25/2016 CITY OF ROLLING HILLS ADMINISTRATIVE POLICY/PROCEDURES FUND BALANCE POLICY Original Version Effective: 05/23/2011 Current Version Effective: 03/24/2014 See end of document for complete policy history. PURPOSE To establish a Fund Balance Policy tailored to the needs of the City to insure against unanticipated events that would adversely affect the financial condition of the City and jeopardize the continuation of necessary public services. This policy will ensure the City maintains adequate Unrestricted Fund Balance, Retained Earnings, Cash & Investments and reserves in City's various funds to provide the capacity to: (1) provide sufficient cash flow liquidity to finance its operations for approximately a minimum of six months., (2) offset significant economic downturns or revenue shortfalls, (3) provide funds for unforeseen expenditures related to emergencies, and (4) other such uses as determined by the City Council. DEFINITIONS > Nonspendable Fund Balance — consists of funds that cannot be spent due to their form (e.g. inventories and prepaids) or funds that legally or contractually must be maintained intact. > Restricted Find Balance — consists of funds that are mandated for specific purpose by external parties, constitutional provisions or enabling legislation. > Committed Fund Balance — consists of funds that are set aside for a specific purpose by the city's highest level of decision making authority (City Council). Formal action must be taken prior to the end of the fiscal year. The same formal action must be taken to remove or change the limitations placed on the funds. > Assigned Fund Balance — consists of funds that are set aside with the intent to be used for a specific purpose by the city's highest level of decision making authority or a body or official that has been given the authority to assign funds. Assigned funds cannot cause a deficit in unassigned fund balance. > Unassigned Fund Balance — consists of excess funds that have not been classified in the previous four categories. All funds in this category are considered spendable resources. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls. For purposes of developing a Fund Balance Policy, the focus is on Unrestricted Fund Balance, which can be defined as: Total Fund Balance Less: Nonspendable Fund Balance Less: Restricted Fund Balance Unrestricted Fund Balance FUND BALANCE POLICY 1 3/24/2014 POLICY The City will establish and maintain minimum reservations of Unrestricted Fund Balance, Retained Earnings and Cash & Investments in each of the various governmental, -proprietary, and trust & agency funds of the City. For purpose of initially establishing the balance and maintaining hereafter, the City shall retain the minimum requirements for each fund. Additional funds will be retained in the Unassigned Fund Balance to the extent available to reach target levels. FUND BALANCE GOALS • GENERAL FUND - In the General Fund, there shall be maintained an Unrestricted Fund Balance equivalent to a minimum of 100% of the originally adopted budgeted annual operating expenditures (excluding onetime expenditures greater than $25,000) before transfers plus any City Council approved Committed or Assigned Fund Balance. This is considered the minimum level necessary to adequately provide for: 1. Economic uncertainties, local disasters, and other financial hardships or downturns in the local or national economy. 2. Contingencies for unseen operating or capital needs. 3. Cash flow requirements. • SPECIAL REVENUE FUNDS — Special Revenue Funds such as MTA Transit Funds, COPS and CLEEP are created to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes. No specific reservation of Fund Balance is created by virtue of enactment of this policy. The amount of any reservation of Fund Balance shall be governed by the legal authority underlying the creation of the individual funds. The Community Facilities Fund shall maintain a minimum Unrestricted Fund Balance of 100% of originally adopted budgeted annual expenditures before transfers plus any City Council approved Committed or Assigned Fund Balance. The Traffic Safety Fund Balance is zeroed out at the end of each fiscal year. • CAPITAL PROJECTS FUND — The Capital Improvement Fund is in the process of being closed and no specific reservation of Fund Balance is created by virtue of enactment of this policy. The Utility Fund shall maintain a minimum Unrestricted Fund Balance of 100% of originally adopted budgeted annual expenditures before transfers plus any City Council approved Committed or Assigned Fund Balance. ENTRPRISE FUND — The Refuse Collection Fund shall be self-supporting without need of General Fund resources. • INTERNAL SERVICE FUND — The Municipal Self Insurance Fund shall maintain a minimum of 100% of the City's California Joint Powers Insurance Authority (JPIA) liability insurance costs over a rolling five year period beginning with fiscal years FY 2006/2007. This would include annual contributions and retrospective deposits. The minimum Unrestricted Fund Balance for FY 2011/2012 would be $180,000. This would not include funding events not covered under the JPIA's Memorandum of Coverage. Those events would still require a transfer from the General Fund. FUND BALANCE POLICY 2 3/24/2014 • OPEB FUND — The Trust & Agency Fund for the GASB 45 Other Post Employment Benefits (OPEB Fund) shall maintain a minimum Cash & Investments with Fiscal Agents balance equal to 100% of the latest 30 -year actuarial estimate in the CaIPERS California Employer's Retiree Benefit Trust (CERBT). As of the end of FY 2011/2012 this balance is $354,733. ANNUAL REVIEW Compliance with the provisions of this policy shall be reviewed as part of the annual budget adoption process. Policy Administrative History: Adopted May 23, 2011 Revised and Adopted October 24, 2011 Reviewed and Adopted April 22, 2013 Reviewed and Adopted March 24, 2014 FUND BALANCE POLICY 3 3/24/2014 THIS PAGE INTENTIONALLY LEFT BLANK RESOLUTION NO. 953 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ESTABLISHING AN ASSET CAPITALIZATION POLICY WHEREAS, Government Accounting Standards Board (GASB) Statement No. 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, requires State and Local Government to include the original cost of fixed assets in the statement of net assets as part of the government -wide financial statements; and WHEREAS, an asset capitalization policy is necessary to establish a reasonable capitalization threshold for all types of assets and this policy should facilitate depreciating those assets over their estimated useful lives; and WHEREAS, a capitalization threshold is the monetary part of the criteria by which an organization determines whether an asset should be reported on the balance sheet; and WHEREAS, the Office of Management and Budget (OMB) Circular A-87, Cost Principles for State and Local and Indian Tribal Governments, Attachment B, section 19(a)(2) and 19(d) allows property costing up to $5,000 to be charged to federal grants as supplies, rather than capital outlay without specific awarding agency approval; and WHEREAS, depreciation represents the recognition of the cost of an asset over time, by calculating its estimated loss in value during each accounting period; and WHEREAS, GASB Statement No. 34 allows local government to use any established depreciation method; NOW, THEREFORE, BE IT RESOLVED that in accordance with GASB Statement No. 34, the City of Rolling Hills Finance Department will: • Capitalize all assets purchased which have a normal life of at least one year with a per -unit cost of $5,000 or more; and • Capitalize all site and building improvements with a cos of $5,000 or more; and • Utilize the straight-line method of depreciation over estimated useful life for all classes of assets. PASSED, APPROVED AND ADOPTED THIS 28 MAYO ATTEST: k.th RN, DEPUTY CITY CLERK Resolution No. 953. STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) §§ CITY OF ROLLING HILLS) ) I certify that the foregoing Resolution No. 953 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ESTABLISHING AN ASSET CAPITALIZATION POLICY was approved and adopted at a regular meeting of the City Council on June 28, 2004, by the following roll call vote: AYES: Councilmembers Black, Hill, Lay, Mayor Pro Tem Pernell and Mayor Heinsheimer. NOES: None. ABSENT: None. ABSTAIN: None. and in compliance with the laws of California was posted at the following: - Administrative Offices DEPUTY CITY CLERK Resolution No. 953 -2- 64 al Rollie, qteld INCORPORATED JANUARY 24, 1957 TO: NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 10-D Mtg. Date: 04/24/17 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: RAYMOND R. CRUZ, CITY MANAGER TERRY SHEA, FINANCE DIRECTOR SUBJECT: DISCUSSION CONCERNING THE CONSIDERATION OF CHANGING THE RATE FOR THE CITY OF ROLLING HILLS BUILDING PERMIT RELATED FEES AND OTHER FEE CHANGES DATE: APRIL 24, 2017 ATTACHMENT: Comparable Cities Table FY 15-16 Revenue Table for Building Permit Related Fees FY 15-16 Building Permit Revenue Table Less City Costs Rolling Hills General Fund Historical and Expenditure Trends Resolution 1149 (Fees) RECOMMENDATION Staff recommends the City of Rolling Hills maintain its fees associated with Building, Plumbing, Mechanical, and Electrical Permit and related fees at 2.5 times the amount set forth in the Los Angeles County Building Code for each fee, and keep all other fees as listed on the Schedule of Fees and Charges at the same level. ALTERNATIVES A. The City of Rolling Hills reduce its fees associated with Building, Plumbing, Mechanical, and Electrical Permit and related fees to 2.25 times the amount set forth in the Los Angeles County Building Code for each fee, and other fee changes as indicated below, as requested by the Finance/Budget/Audit Committee members. OR B. Other alternative that the City Council deems appropriate. BACKGROUND During the FY 2015/16 and FY 16/17 budget preparation process, the Finance/Budget/Audit Committee and City Council, at the request of then Councilmember Black, considered lowering the City's Building Permit related fees due to the recent run of significant surplus budget years. Councilmember Black proposed that the Building Permit related fees be reduced from 2.5 times the County of Los Angeles County rate for Building Permit related fees to 2.25 times However, both years the request was considered but the City Council decided to leave the fees unchanged. For FY 17/18, the Committee on March 27, 2017 again considered a reduction in these fees at the urging of Mayor Black. He this time proposed the multiplier be reduced from 2.5 times the County Fee to 2 times. However, after significant discussion, the Committee members agreed to recommend the multiplier be 2.25 times the County Fee. Mayor Black then recommended the following fees be changed with ' Committee Member Mirsch's agreement that included the following: Park & Recreation Fund Fee from .5% of the valuation over $100,000 to .25% of the valuation over $100,000; Environmental Impact Report for City consultant fee plus 20% to just the City consultant fee; Final Parcel or Tract Map from County Fees plus 20% to just the County Fees; Lighting Ordinance Modification fee from $750 to $375; Planning and Zoning Applications involving illegal or "as built" structures or grading that require Planning Commission review from $2,500 to $1,500; and Preparation of Negative Declaration from $1,000 to $50 plus fee charged by Department of Fish & Wildlife. Mayor Black also proposed to lower the fees associated with the View Ordinance from $2,000 to $250 to encourage residents to come forward and make view complaints. However, .Committee Member Mirsch recommended against lowering those fees at this time because she is aware of the significant staff time and legal fees that are associated with view cases, and the City never comes close of recouping its fees for the services provided. The City Council is now asked to determine if the present schedule of fees should be retained as recommended by City staff, consider some or all the fee changes of the Budget Committee, or develop a different recommendation. DISCUSSION In 1982, the City Council enacted a rate that is 2.5 times that of the County of Los Angeles for Building Permit related fees. Building Permit related fees and Property Taxes are the two biggest sources of revenue for the City of Rolling Hills. The vast majority of the City's activities and staff work revolve around development. By State statute, a fee cannot be set higher than the costs associated to the services provided. The Finance Director made a calculation for his analysis in the report utilizing the FY 2015/16 actual revenues for Building Permit and Planning/Zoning/Subdivision Code fees together, and concluded that they do not cover the costs of the City's development related activities. Therefore, it was recommended by the Finance Director that the City's Building Permit related fees not be amended on that point alone. To. provide the City Council a comparison of what other cities that utilize the Los Angeles County Building and Safety Department to provide plan check and construction inspection services, attached is a table that illustrates what each municipality charges for their Building Permit related fees. It also illustrates all the significant General Fund fees and taxes that finance most of these cities municipal government services. Although Rolling Hills' multiplier is in the range of what these cities pay for Building Permit fees, its property tax percentage return is the lowest. Furthermore, all the other cities have more General Fund revenue sources to pay for its municipal government services. For most of these cities, sales taxes are its most significant revenue. However, for those cities business license fees or franchise fees can also be large revenue sources. It is believed the City's Building Permit related fees are at an appropriate rate, especially since the City does not include any additional fees or taxes that other cities do to raise revenue. As stated before, at least 50% of all the City's resources are invested in some manner to planning, building and zoning activities. For FY 15/16, Building Permit and other related fees collectively brought in $607,469 in revenue, but the staff time and overhead costs associated with development conservatively calculated were $705,311 in expenditures. Thus, the City took in $97,842 in revenue less than it needed to cover its development related costs. The Finance/Budget/Audit Committee members are proposing that the City decrease the Building Permit related fees by decreasing the multiplier to 2.25 times that of the County fee and a few other development/planning related fees. They believe that the Rolling Hills residents are already paying enough in property taxes and that should offset the need for higher Building Permit and the other fees that are recommended to be cut. It is true that all Rolling Hills residents are paying high property taxes, but unfortunately the City only receives 6.5 cents on every dollar paid which is not enough to cover all of the General Fund municipal government expenditures. The City has had surplus budgets since FY 2012-13, but for FY 2016-17 staff is projecting a deficit of $116,000 after transfers to other funds. Although the City has a robust fund balance that is estimated to be $4,310,284 at the end of FY 16-17, it is relatively small compared to foreseen and unforeseen expenses that could be significant such as: ADA compliance of the civic center, Tennis Court Project, View Ordinance legal expenses and associated election, General Plan update, Safety Element Update, storm water retention and clean up projects, unfunded State and Federal mandates, a natural disaster, sudden economic/building downturn and law suit costs. Furthermore, this is the first year of employing the new Assistant Planner for a full fiscal year and staff will need to continue accounting for the new costs associated with this position. Therefore, lowering the Building Permit related fees or any other fee is believed not prudent when balancing a lot of fiscal unknowns. FISCAL IMPACT Since the Building Permit related fees represent such a large percentage of the City's development fees, adjusting them could be very risky because they are economy sensitive. If the City Council were to adjust them lower, this could have a negative impact to the entire governmental budget. Based on utilizing FY 2015/16 revenues, it was calculated that a .25 drop in the multiplier in the building related fees would be approximately $46,966 in lost City revenue. For the other proposed fee changes, staff was unable to determine the effect the changes would have on revenues. It is however clear that the City would not be receiving cost recovery of the staff time it takes to do this work. Furthermore, some of these fees were developed with intended policy implications such as to encourage residents to come forth to either legalize unpermitted activities or have an opportunity to request clarification. CONCLUSION The City of Rolling Hills has set its Building Permit related fees linked to the County with the same formula for over 35 years. It is clear the Building Permit fees do not cover all the costs of the services provided for development. The other fees up for reduction also now will not recover the cost of the services. The City's revenues are very limited, but the City's prudent fiscal policies have made its governmental budgets very stable. Spending time and resources to potentially change the Building Permit related fees is very risky in an unstable local government financing environment. Although the City could absorb this loss in good times, it is always much more difficult to raise fees when there is a recession or building downturn. Due to the reasons stated above, the Staff recommends that the City Council not make any adjustments to its Building Permit or any other fees. RC:hl BuildingFees_staffrpt.docx SIGNIFICANT GENERAL FUND REVENUES OF COMPARABLE CITIES CITY BUILDING PERMIT MULTIPLIER PROPERTY TAX SALES TAX FRANCHISE FEES BUSINESS LICENSE TAX /FEES TRAINSIENT OCCUPANCY TAX USER FEES NEW CONST. TAX UTILITY USER TAX TICKET TAX CASINO TAX MINING TAX FINES CHANDLER GRAVEL FEE Artesia 2 x x x x x x Carson 1.5 6.74 Cents x x x x x x x Commerce 3 7 Cents x x x x x C Irwindale 2 10 Cents x x x x I La Canada Flintridge 1.5 7 Cents x x x x Lomita 2 18 Cents x x x x x x Roiling "Hills* 2.5 6.5 Cents Rolling Hills Estates 3** x x x x x x *Rolling Hills does receive nominal sales taxes, franchise fees and fines that add up together less that 1% of the Gerneral Fund. **Rolling Hills Estates utilizes primarily the 3 times multiplier except for very small projects (e.g. water heater change outs) when the 2 times multiplier is utilized. I --In Irwindale, the Mining tax represents 17% of General Fund Budget. C --In Commerce, Casino tax represents 40% of General Fund Budget. Rev. 5/8/14 City of Rolling Hills Los Angeles County Building Permit Fees Fiscal Year 2015-16 Fiscal Year 2015-16 July August September October November December January February Permits Building $ 5,168.00 $ 10,575.30 $ 8,806.80 $ 19,939.00 $ 6,417.30 $ 34,444.35 $ 4,187.70 $ 817.80 $ 17,084.50 $ 9,804.80 $ 9,358.90 $ 12,412.50 $ 139,016.95 Electrical 1,265.50 1,610.20 6,076.30 8,165.80 - 2,468.00 481.70 120.70 821.90 - 2,331.70 2,885.30 26,227.10 Mechanical - 490.30 2,346.00 863.40 912.10 962.10 449.40 2,318.30 8,341.60 Plumbing 113.80 2,122.90 2,545.40 1,067.60 269.60 2,471.20 113.80 647.60 2,421.00 11,772.90 Sewer 397.80 150.30 399.80 399.80 - - 1,347.70 Swimming Pool 6,365.60 5,327.40 - 2,160.60 4,184.80 3,722.20 3,183.70 24,944.30 Grading 907.10 1,963.60 - - - 2,174.90 907.10 5,952.70 14,217.80 22,240.00 20,174.30 31,128.80 6,417.30 38,892.05 5,901.10 5,984.40 22,205.00 9,804.80 17,416.90. 23,220.80 217,603.25 Plan Check Building 5,253.70 38,037.01 9,950.40 78,391.81 424.60 17,297.60 553.60 5,816.00 7,226.70 2,095.10 6,568.30 18,589.20 190,204.02 Electrical - 284.00 - - 284.00 Mechanical Plumbing Grading 995.00 2,510.00 - 4,651.50 - 369.47 - 4,786.50 995.00 14,307.47 Misc 529.60 8,621.10 5,571.90 6,398.90 442.00 1,564.50 771.00 1,018.00 12,240.90 4,426.80 1,518.80 4,156.60 47,260.10 Energy 6,778.30 49,168.11 15,522.30 89,726.21 866.60 19,231.57 1,324.60 6,834.00 24,254.10 6,521.90 9,082.10 22,745.80 252,055.59 $ 20,996.10 $ 71,408.11 $ 35,696.60 $ 120,855.01 $ 7,283.90 $ 58,123.62 $ 7,225.70 $ 12,818.40 $ 46,459.10 $ 16,326.70 $ 26,499.00 $ 45,966.60 469,658.84 Multiplier 2.50 Fees 187,863.54 Multiplier 2.25 March April May June Total 422,692.96 Difference between 2.50 and 2.25 $ 46,965.88 City of Rolling Hills Building Permit Revenues Less City Costs Fiscal Year 2015-16 Fiscal Year 2015/16 Actual Amounts Total Building Permit & Related Revenues LA County/Willdan Costs (Direct costs) $ 607,469 (190,793) 416,676 City Costs Planning Salaries (179,266) Planning Benefits (55,602) Planning - Other (120,918) City Administration Salaries 30% (92,216) City Administration Benefits 30% (35,705) Overhead 25% (supplies, leasing,postage,utilities) (15,750) Finance 10% (10,627) City Attorney 10% (4,434) Total Allocated costs (514,518) Net Revenues Overhead Costs $ (97,842) Office Supplies 25% $ 4,117 Equipment Leasing 25% 827 Postage 25% 3,411 Telephone 25% 1,506 Utilities 25% 5,889 $ 15,750 City of Rolling Hills - General Fund Historical Revenue & Expenditure Trends - FY 2016/17 Budget Amounts. ;$3,940,480 $4,000,000 .. $3,758,602 $3,645,167 $3,500,000 $3,000,000 $2,500,000 $3,321,129 $3,110,058$3,340,4: `$3 160,286 •.++'' $2,011,297 $2,000,000 $1,767,537_ $1,644,162 r-✓" $1,500,000 --, -- k -y $1,497,431 $1,578,562 $1,502,107 $1,396,196 $1,437,199 $1,000,000 $1,176,930$1'311'317$1,3961196$1,497,431$1,437,199$1,578,562 1,176,930 1,311,317 „ . $1,463,120 $500,000 I ........ .. ... _ _ . _. $1, 697,941 ;5,81,5,92 $1,502,538 $1,620,797 $1,972,182 $2,023,119 1,740,7 $1,481,983 $4,600,994 $4,372,689 -'—Fund Balance —D—Revenues .--Expenditures $1,956, 600 $2,019,759 •�,-''$1,866,260 $1,502,876 $1,540,403 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014.15 2015-16 2016-17 Fiscal years 2005/06 to 2015/16 are actual amounts, FY 2016/17 is the adopted budget amounts RESOLUTION NO.1149 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ESTABLISHING AND MODIFYING ROLLING HILLS MISCELLANEOUS FEES RELATED TO PLANNING AND DEVELOPMENT ACTIVITIES, ADDING THOSE FEES TO THE EXISTING SCHEDULE OF is , AND RESCINDING CITY COUNCIL RESOLUTION NO. 1119. THE CITY COUNCIL OF THE CITY OF ROLLING HILLS DOES HEREBY RESOLVE AS FOLLOWS: SeLtion 1: The following fees are established and charged for applications for processing discretionary cases for Planning, Zoning and Subdivisions and shall be paid by, the applicant prior to submission for public hearing, pursuant In Title 16 (Subdivision) and Title 17 (Zoning) of the Rolling Hills Municipal Code: A. Site Plan Review $ 1,500 B. Conditional Use Permit $1,500 C. Variance $1,250 D. Variance, Minor $ 750 1. Minor deviation into required yard setback, not exceeding 5' and attached to main residential structure E. ' Multiple discretionary reviews; Most expensive fee for the first review and 1/2 fee for second review. No cost for third or more reviews. F. Lighting Ordinance Modification $ 750 G. Outdoor Lighting Audit $150 (initiated by resident) H. Time extension $ 200 L Zone Change $ 2,000 J. General Plan Amendment $ 2,000 K. Zoning/Subdivision Code Amendment $ 2,000 L Discretionary Approval Modification $ 2/3 of original application fee M. Appeal Fee $ 2/3 of original application fee N. City Council and Planning $ 375 Fee to be credited if Commission interpretation results in filing of a formal and miscellaneous reviews application to City Council or Planning Commission O. Environmental Review fees for discretionary permits 1. Preparation and Staff Review $ 200 of Initial Study 2. Preparation of Negative $1,000 (plus fee charged by CA Declaration or Mitigated Department of Fish and Game, if Negative Declaration applicable, as adjusted annually) New and amended provisions are hi bold Resolution No. 1149 1 P. Environmental. Impact Reports Consultant fee, plus 20% Q. County Clerk Processing Fee County fee R. Lot Line Adjustment $ 1,500, plus County fee S. Tentative Parcel/Tract Map $ $1,500, plus County fees plus 20% T. Final Parcel/Tract-Map County fee plus 20% U. Zoning violation and construction $ 2,500 penalty fee 1. Applications for illegal or "as built" grading or construction or non-compliance with approved plans for projects that require Planning Commission review. Fee is charged in addition to the discretionary application review fee. V. Stop work order $ 200 1. Fee charged for each additional "stop work order" that is issued beyond the original stop work order for illegal construction and grading activity W. Service Request County fee plus 20% (For services provided by L.A. County not included in the General Services Agreement) • • X. Appeal of Zone Clearance $ 375 Y. Stable Use Permit $ 375 (For stables under 800 sq ft considered by the Planning Commission) Z. Major Remodel Review $375 (For remodels of more than 50% demolition) Section 2. The following fees are established and charged for applications for processing View Impairment and Traffic Commission cases: A. View Impairment . 1. Application Fee (includes costs of mediation) $1,000 2. Review by Committee on Trees and Views Processing fee $2,000 3. Environmental Review Fees A. Preparation and Staff Review of Initial Study $ 200 B. Preparation of Negative Declaration or $1,000 Is litigated Negative Declaration (plus fee charged by CA Department of Fish and game, if applicable, as adjusted annually) B. Traffic Commission Review 1. New driveways or other traffic $ 300 related items New and amended provisions are in bold Resolution No. 1149 2 Section 3. The following fees are established and charged for General Administration processing: A. General Plan $ 30 B. Zoning Code $ 25 C Subdivision Code $ 25 D. Meeting Tapes (Audio) $ 25 E. Budget $ 30 F. Zoning Map $ 3 G. Xeroxed copies, each page $ 0.25 H. False Alarms Fee for 1st incident involving a false alarm is waived 2nd $50 3rd $100 4t $150 5th $ 200 6th $ 250 Section 4. The following fees are established and shall be collected for each permit pursuant to Title 15, (Building and Construction) of the Rolling Hills Municipal Code: A. 1. BUILDING PERMIT Two and one-half times the amount set forth in the Building Code for each fee, table and schedule therein. 2. PARKS AND RECREATION Each new residential dwelling shall pay 2% of the first $100,000 of construction valuation, plus 0.5% of such valuation over $100,000. B. PLUMBING PERMIT Two and one-half times the amount set forth in the Plumbing Code for each fee, table and schedule therein. C. MECHANICAL PERMIT Two and one-half times the amount set forth in the Mechanical Code for each fee, table and schedule therein. ELECTRICAL PERMIT Two and one-half times the amount set forth in the Electrical Code for each fee, table and schedule therein. E. GEOTECHNICAL REPORT, 0.42% of the valuation of the proposed SITE AND PLAN REVIEW structures; however, minimum fee shall be $535.00 and the maximum fee shall be $3,58$.00 F. SOLAR AND PHOTOVOLTAIC The amount set forth in the Los SYSTEMS AND APPURTENANT Angeles County Building and EQUIPMENT Electrical Codes for each fee, table and schedule therein, plus $60.11 City administrative fee. Nero and amended provisions are in bold Resolution No: 1149 3 Section 5. Thefollowing fees are established and shall be collected for each permit pursuant to Title 15, (Building and Construction) of the Rolling Hills Municipal Code for review conducted by the City's contract building official,' other than Los Angeles County Department of Building and Safety: A. BUILDING PERMIT In addition to the provisions of Section 4 A.1 of this resolution, a 25% surcharge on Los Angeles County Department of Building and Safety -fees shall be charged for the alternative use of the City's contract building official: B. PLUMBING PERMIT In addition to the provisions of Section 4 B. of this resolution, a 25% surcharge on Los Angeles County Department of Building and Safety fees shall be charged for the alternative use of the City's contract building official. C. MECHANICAL PERMIT In addition to the provisions of Section 4 C of this resolution, a 25% surcharge on Los Angeles County Department of Building and Safety fees shall be charged for the alternative use of the City's contract building official. D. ELECTRICAL PERMIT In addition to the provisions of Section 4 D of this resolution, a 25% surcharge on Los Angeles County Department of Building and Safety fees shall be charged for the alternative use of the City's contract building official. E. GEOTECHNICAL REPORT, SITE AND PLAN REVIEW In addition tothe provisions of Section 4 E of this resolution, a 25% surcharge on Los Angeles County Department of Building and Safety fess shall be charged for the alternative use of the City's contract building official. P. SOLAR AND PHOTOVOLTAIC In addition to the provision of Section SYSTEMS AND APPURTENANT 4F of this resolution, a 25% surcharge EQUIPMENT on Los Angles County Department of Building and Safety fees,. plus $60.11 City administrative fee, shall be charged for the alternative use of the City's contract building official. Sed Lion 6. The following fees are established and shall be collected for each permit relating to construction and demolition waste: A. CONSTRUCTION AND $ 25 single project permit DEMOLITION PERMIT New and amended provisions are in kid Resolution No. 1149 4 Section 7. The new fees set forth do not exceed the estimated reasonable cost of providing such services. Section 8. The City Council Resolution No. 1119 is hereby rescinded. PASSED, APPROVED, AND ADOPTED this 22nd day of July 2013. ATTEST:. ckitteacu Heidi Luce Deputy City Clerk New and amended provisions are in bold Resolution No. 1149 5 STATE OF CALIFORNIA COUNTY OF LOS ANGELES CITY OP ROLLING HILLS ) §§ I certify that the foregoing Resolution No. 1149 entitled: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROLLING HILLS ESTABLISHING AND MODIFYING ML ELLENOUS FEES, ADDING THOSE FEES TO THE EXISTING SCHEDULE OF FEES, AND RESCINDING CITY COUNCIL RESOLUTION NO.1119. was approved and adopted at a regular meeting of the City Council on July 2Z 2013 by the following roll call vote: AYES: Councdmember Black, Dieringer, Lay, Pieper and Mayor Hill. NOES: None. ABSENT: None. ABSTAIN: None. and in compliance with the laws of California was posted at the following: Administrative Offices. New and amended provisions are in bold Resolution No. 1149 okitok HEIDI LUCE DEPUTY CITY CLERK 6 TO: FROM: SUBJECT: DATE: 8(4 Rail4t, qee4 INCORPORATED JANUARY 24, 1957 NO. 2 PORTUGUESE BEND ROAD ROLLING HILLS, CA 90274 (310) 377-1521 FAX (310) 377-7288 Agenda Item No.: 10-E Mtg. Date: 04/24/17 HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL RAYMOND R. CRUZ, CITY MANAGER f DISCUSSION AND CONSIDERATION OF DEVELOPING AN ORDINANCE TO REGULATE DRONES IN THE CITY OF ROLLING HILLS. APRIL 24, 2017 ATTACHMENT: League of California Cities Drone White Paper BACKGROUND Mayor Jim Black at the April 10th Council meeting asked that staff, at the next City Council meeting, place an item on the agenda to discuss if it wants to pursue drafting an ordinance to regulate drones. He received a recent call from a resident who felt that a neighbor was spying and harassing her family through the use of a drone. There, however, are a lot of issues when considering a drone ordinance that have unintended consequences for public safety and certain industries (e.g. real estate sales) that would need to be investigated. There are a lot of other agencies (FAA and State of California) considering pre-empting local governments abilities to regulate drones within their jurisdictions. Many cities in the State have enacted drone ordinances including two that our City Attorney has developed for the cities of West Hollywood and Hermosa Beach. DISCUSSION Americans are increasingly familiar with drones. These devices have become one of consumers most popular technology purchase; some estimate nearly one million new drones were purchased in 2016. Many consumer drones are controlled by tablet or smartphone, and feature high definition cameras. Commercially available drones are even more sophisticated, and are increasingly used for a variety of activities, including monitoring and inspection, news reporting, and search and rescue of missing persons. Although drones may offer society numerous benefits, the potential for information collection through filming, photography or other types of monitoring raises the potential for harm including invasion of privacy, identification, trespass and harassment. If the City does want to consider a drone ordinance, the League of California suggests the following: 1. Create rules rooted in a city's traditional land use or zoning powers. 2. Follow recommendations of the FAA, and tailor restrictions to traditional municipal authority. (e.g. Laws of general applicability related to nuisance or trespass) 3. Create reasonable time, manner and place restrictions to safeguard your citizens (e.g. No take off or landing in a residential zone from 10 pm to 9 am.) 4. Make it easy for operators to understand and be aware of local rules and be held accountable. 5. Create flexible rules to accommodate changing needs and technology. Since there are unresolved legal issues with drone regulation pertaining to FAA preemption; the City Attorney recommends the narrower the ordinance the better. Furthermore, a drone ordinance will be less susceptible to a legal challenge if no City permits were required. Enforcement of a drone ordinance will be a challenge, because finding the drone operator is not always easy. Other issues to consider will be if law enforcement will have the ability to impound violator's drones and what penalties should be issued. The City definitely will need the Sheriff Department's input if the City decides to move forward in its consideration of a drone ordinance. CONCLUSION The City Council needs to decide if it wants staff proceed to draft a drone ordinance. If City Council wants to move forward, they will also need to provide staff direction on what elements it wants included in the ordinance. RC:hl Traffic Enforcement Proposal.doc OF CALIFORNIA CITIES LEAGUE® Unmanned Aircraft Systems Policy Statement and Guidelines for Local Regulation Objective The purpose of this paper is to lay the foundation for an integrated regulatory framework for unmanned aerial systems (UAS), or drones, comprised of a seamless web of federal, state and local regulations that will work in harmony, complementing one another to ensure an effective regulatory approach that reduces risk and increases the positive uses of drones. This objective is particularly urgent given the active efforts in state legislatures across the country, including California, to strip cities of the ability to enact reasonable regulations that protect their residents and enable productive use of drones. While the efforts of the drone industry to achieve local pre-emption have so far failed here in California, the industry is engaged in a nationwide push, seeking to preempt cities in every state. We expect that the industry will continue to push for policies in Sacramento to eliminate local governments' ability to enact reasonable and common sense restrictions on behalf of their communities. Overview To accomplish the paper's objective of laying the foundation for reasonable regulation based on time, place and manner restrictions by for local governments, this paper will describe the broad existing authority of cities to address drone -related concerns and assess how local government regulations fit into an overall regulatory scheme for this technology. In addition, the League has compiled a variety of resources for cities, attached as appendices, which include the following: • Appendix A: FAA Guidance to Cities, Counties, and States • Appendix B: Do's and Do Not's of a Municipal Drone Ordinance Introduction As of this writing (February 2017), the impetus for this guidance from the viewpoint of California cities is twofold: (1) to preserve the authority of cities to address uniquely local concerns as drone operations increase dramatically, and (2) to enable cities to welcome the economic benefits of drone operations through narrowly -tailored and enforceable rules. In recent years, California cities have seen a significant rise in the number of drone -related incidents that illustrate the challenges cities will need to address now and in the future. In the past year, there have been numerous incidents in which drones interfered with first responders, including firefighting aircraft, air ambulance helicopters, and law enforcement helicopters.' Drone interference with firefighting aircraft reached such a level that in July 2016, the U.S. Department of the Interior confirmed that it was partnering with private sector entities on technology to help ground drones entering restricted airspace.2 Drones have crashed into power substations leaving entire neighborhoods without power. Drones have been seen flying over critical infrastructure without permission.4 Drones have been operated above police stations.5 Drones have flown over large public gatherings, falling from the sky, injuring children and damaging property.6 The drone industry has not released statistics about their failure rates, or the standards to which their products are built, meaning it is impossible to know if or when a drone will simply fall from the sky injuring people or property below. While federal law prevents drones from flying over unprotected people, there is no federal prohibition on flying over or adjacent to almost any other place (like roads, outside windows of apartments, schools, and single family homes, police stations, fire houses, etc.) meaning communities are at the mercy of falling or out -of -control drones, the reliability of whose construction is unknown. While some activities are prohibited by federal law, cities face a challenge in enforcing federal law or relying on existing law to address unsafe or reckless operation of this technology. Opponents of municipal regulations may argue that general conduct based rules like recklessness or general statutes like nuisance are enough. Yet cities across the nation have had substantial difficulty prosecuting cases using statutes of general applicability.8 1 In its recent Fact Sheet, the FAA stated that "incidents involving unauthorized and unsafe use of small, remote - controlled aircraft have increased from 238 sightings in all of 2014 to 780 through August of [20151. During this past summer, the presence of multiple UAS in the vicinity of wild fires in the western U.S. prompted firefighters to ground their aircraft on several occasions." See State and Local Regulation of Unmanned Aircraft (UAS) Fact Sheet, Federal Aviation Authority (December 17, 2015). 2 "As Sand Fire Rages, Feds Turn Up Heat in Fight Against Drones Interfering in Wildfires," CNBC (July 26, 2016) 3 Drone Hits West Hollywood Power Lines Causes Power Outage, ABC 7 (OcroBER 26, 2015), HTTP://ABC7.COM/NEWS/DRONE-HITS-WEST-HOLLYW oOD-POW ER-LI N ES-CAUSES-POWER-OUTAGE/1052589/ 4 Drone's Eye View in the South Bay, EASY READER NEWS (September 4, 2014) http://www.easvreadernews.com/86621/drones-eve-view-south-bay/. 5 Serna, Joseph, LAPD Seeks to Limit Civilian Drone Flights over Police Stations, LA TIMES (August 1, 2014), http://www.latimes.com/loca I/lanow/la-me-In-la pd-civi lia n-drone-hollywood-lot-20140801-story.html. 6 Weikel, Dan, 11 -month -old Girl Hit in Head by Crashing Drone; FAA Investigating, LA TIMES (September 15, 2015), http://www.latimes.com/local/la now/la-me-In-pasadena-drone-flight-20150916-storv.html. ' Citation: Micro UAS task force report 8 The City of Seattle, for example, recently required a 4 -day trial to prosecute someone for reckless endangerment, despite actual injuries inflicted after a drone flew over a parade, fell from the sky and struck two people. A local prohibition on flights over crowds or in certain downtown areas would have eliminated the need for a long, fact intensive trial and would have allowed the city to make it clear to operators that the conduct was prohibited. Similarly, the City of Los Angeles in prosecuting a person for violation of its drone ordinance, reviewed potential arguments that could be raised under the pre-emption doctrine, and opted to limit the charge to reckless operation of a drone endangering life or property. The jury's verdict was Not Guilty in that they found the defendant operated his drone recklessly, but that it did not rise to the level of endangering life or property. The City cited its concern with a speedy resolution and a desire not to have resources tied down contesting an appeal. Enforcement though, is only one part of the discussion. More important is the fact that cities have always had the authority to regulate certain kinds of conduct ranging from skateboards and bicycles on city streets and sidewalks, to the usage of heavy equipment, to the requirement that individuals obtain commercial film permits prior to operating in designated areas of the city at certain points in time. These are traditional police, land use, and zoning powers that protect the safety and tranquility of communities, ensure order, and provide for the general welfare. If a city has the power to make reasonable time, place and manner restrictions around 1st Amendment and 2nd Amendment rights, certainly drone operators can be expected to similarly abide by time, place and manner restrictions. There is no Constitutional right to fly a drone wherever and whenever someone wishes, especially not when property rights, privacy rights, public safety, nuisance protections and the police power are in conflict with that operation. Notwithstanding the challenges articulated above, the economic benefits and opportunities are enormous. Drone sales are skyrocketing and productive uses are increasing.9 Drones are saving money, saving time, and saving lives in cities across the country and across California. This is nowhere more true than in how cities and counties are using drones themselves. Police, fire, and other city agencies are using drones to enhance the ways they serve their citizens, including search and rescue activities, I° emergency medical response, 1 firefighting, accident investigation, and more. 12 Thus, cities have to weigh the real and immediate benefits of drone use against the safety, privacy, and nuisance concerns that often loom large. The task of balancing costs and benefits, however, does not rest solely on cities. Federal and state regulators have and will continue to play a role in articulating the rules that will help ensure safe drone operations. An appropriate role for Federal and state regulators, does not mean that preemption is the answer. On the contrary, local regulations can and should complement federal and state regulations in an integrated regulatory framework. This is a critical point because downtown San Francisco is very different from Oxnard, or Napa. State and federal regulators will never know on which sidewalk special coordination is needed prior to operating a drone, they won't know about local public gatherings, nor will they know which areas of town raise particular concerns. Cities, however, are quite adept at making these types of decisions based on local information and local context. In addition, in the event of drone incidents, it is local agency first responders (primarily police and fire) who will get the call. Local governments can and should enact ordinances to guide that response when local police and fire agencies are inevitably called upon. 9 See Selyukh, Alina, FAA Expects 600,000 Commercial Drones In The Air Within A Year, NPR, (August 29, 2016) http://www.n pr.org/sections/thetwo-way/2016/08/29/491818988/faa-expects-600-000-com mercia l -drones -in - the -air -within -a -year; Lowry, Joan, FAA Faces Big Drone Demand, TIMESUNION, (September 16, 2016) http://www.timesunion.com/news/article/FAA-faces-big-drone-demand-9228572.php; "Fact Sheet: New Commitments to Accelerate the Safe Integration of Unmanned Aircraft Systems", The White House, 2016. 10 Juarez, Leticia, Riverside County Sheriff's Dept. to use Drones in Search and Rescue, ABC NEWS 7 (April 1, 2016), http://a bc7.com/news/riverside-county-sheriffs-dept-to-use-drones-in-sea rch-a nd-rescue-missions/1273122/. 11 Starr, Michelle, Ambulance Drone Delivers Help to Heart Attack Victims, CNET (October 28, 2014), https://www.cnet.com/news/ambulance-drone-del ivers-hel p -to -heart -attack -victims/ 12 Stoltze, Sherrif Launches First Police Drones in LA County, SCPR (January 12, 204), http://www.scpr.org/news/2017/01/12/68076/sheriff-la u nches-first-police-drones-in-la-county/. 3 Finally, the technology that powers drones is rapidly evolving and, in fact, many of the challenges faced by cities today will be solved by the technology of tomorrow. Such technologies include advanced permitting systems, geo-fencing, detailed mapping systems built into the drones, and eventually air traffic management for drones (also known as Unmanned Traffic Management).13 This, then, is the task for cities: preserving the existing authority to adopt narrowly -tailored rules relating to drone operations consistent with their local police power and FAA guidance, while enabling the many benefits of drone technology. The League's objective is to arm cities to exercise their authority in a responsible and defensible fashion. Background Industry Advocates of Preemption In advocating before the U.S. Congress as well as the Federal Aviation Administration (FAA) and in various state legislatures around the country, some members of the UAS industry have argued that state and local regulations are completely pre-empted by the federal regulations promulgated by the FAA. The pre-emption of any other regulations in U.S. airspace, they argue, is total. In advancing this argument, the industry has claimed that any outdoor operation by a drone is effectively in the navigable airspace, and thus cities have no authority to regulate any activity by a drone. The reality as expressed by the FAA is somewhat different. The FAA has publicly staked out a more qualified form of pre-emption in the area of UAS regulation, both in its December 2015 fact sheet, as well as in its long awaited rules for drone operation, so-called Part 107 rules.14 For example, the FAA articulated a number of areas where state and local laws may be appropriate to regulate some of the concerns associated with drone operations, including: • "State law and other legal protections for individual privacy may provide recourse for a person whose privacy may be affected through another person's use of a UAS." • "State and local laws, such as trespassing, may provide a remedy for companies whose small UAS operations are deliberately interfered with by people entering the area of operation without permission." • "State law and other legal protections may already provide recourse for a person whose individual privacy, data privacy, private property rights, or intellectual property rights may be impacted by a remote pilot's civil or public use of a UAS." • "Property rights are beyond the scope of this rule. However, the FAA notes that, depending on the specific nature of the small UAS operation, the remote pilot in command may need to comply with State and local trespassing rules." 13 Drone Advisory Committee, Introduction (posted on December 8, 2016), http://videos.sorenson media.com/FAA/DAC+Intro+v5/08231d21Be51fR410508361Tba21bc019464. 1414 C.F.R. Part 107 • "[H]obbyists or other third parties who do not have the facility owner's permission to operate UAS near or over the perimeter or interior of amusement parks and attractions may be violating State or local trespassing laws." Additional Guidance from the FAA In fact, in January of 2017, the FAA Administrator, Michael Huerta, appeared at the U.S. Conference of Mayors annual conference in Washington D.C. and indicated that state and local governments have substantial authority, that the rules for manned aviation do not necessarily apply to unmanned aircraft, and that a national conversation is necessary. That conversation has begun at the FAA's Drone Advisory Committee and because it may lead to state and local governments having greater authority, we expect the industry will be pushing hard for preemption this year as it may be their last chance. In addition to the general guidance provided in the Fact Sheet and the context of Part 107, the FAA, in response to queries from cities, counties, and states, has provided even more concrete statements of the scope of municipal authority. For specific guidance from the FAA on this point, please see the letters from the FAA attached as Appendix A: FAA Guidance to Cities, Counties, and States. State Preemption After unsuccessful efforts to effect federal preemption, certain interests within the UAS industry have pursued preemption at the state level. Opponents of municipal drone regulations commonly make an argument about an alleged "patchwork quilt" of laws. According to this argument, reasonable time, place, and manner restrictions relating to drones will be confusing for operators to understand. This argument also stems from federal precedent relating to airliners transiting flying across the country, which is entirely irrelevant when applied to drone operations which take place between homes and above city sidewalks where airliners have never operated. An argument about a patchwork is also an oversimplification and mischaracterization of the role municipalities play in an integrated regulatory environment. Different cities require different building and film permits: does this "patchwork" hamper construction? Some cities permit bicycles on certain sidewalks, while prohibiting them on others. Cities throughout California have, for decades, prohibited model aircraft in certain parks while allowing them in other parks. This is the essence of local control. The use of a loud or dangerous piece of equipment may make sense in a light commercial district, however the use of the same equipment in a residential neighborhood may require greater coordination or protections. The only elected officials who understand this context are local officials. While the patchwork argument is a strawman, it would be wise for cities to avoid enabling this argument (as discussed below). The rules that apply to automobiles or other ground -based vehicles are a useful example in this case. Drivers, commercial or recreational, are subject to a host of rules (federal, state or local) that govern when and where you can drive in a given community. Nonetheless, stop signs, traffic lights, speed limits and time -based restrictions (such as around schools) do not make it "confusing" or impossible to operate a car. Rather, it is those very rules, clearly conveyed to drivers, that allow cities to welcome vehicles. Cities know that if a safety risk emerges (e.g., an area where accidents are likely to happen or speeding habitually), they will have the flexibility to put a stop sign or change the speed limit. Similarly, cities can allow commercial driving knowing that they have the authority to restrict such activity if it poses a nuisance or hazard to citizens (for instance, limiting the hours when trash trucks may operate in a given neighborhood or the size of a vehicle that may operate on a certain road). Cities know that in crowded pedestrian areas, skateboarding, rollerblading, or bicycling may need to be prohibited, and on certain beaches and in certain parks even throwing a ball may be prohibited at certain times. The invention of drones didn't suddenly make local control unnecessary. On the contrary, it is an argument in favor of local control where cities can determine how to best to welcome the beneficial uses of drones while balancing the potential harms. Through this iterative discussion at the local level, the best policies will emerge. The answer to the fallacious "patchwork quilt" argument is for cities to narrowly tailor rules to their particular concerns and effectively communicate relevant rules to operators. For a discussion of this issue in greater detail, please see the League guidance attached as Appendix C: Do's and Do Not's of a Municipal Drone Ordinance. 6 Local Regulatory Framework Given the background above and the nature of this relatively new technology, local governments, in crafting a local regulatory framework, should strive to craft and enact regulations that accomplish the following objectives: 1) Are narrowly crafted so as to enhance public safety without being unduly restrictive. 2) Are a reasonable use of municipal police power under Article XI, Section 7 of the California Constitution. 3) Do not invite charges of federal pre-emption, based on the guidance provided by the Federal Aviation Administration.15 4) Are harmonized with state and local regulations to ensure an integrated and intelligible regulatory framework. 5) Encourage positive commercial and recreational uses of drones by providing clear guidelines. To that end, the League of California Cities has drafted a process for developing a city ordinance as well as guidance on the types of language that a city may consider using without increasing its litigation risk or incurring a preemption challenge upon enforcement. Guidelines for Local Regulation of Operation of Unmanned Aerial Vehicles. Ordinance Development Process 1. The governing body shall provide input to a working group of city officials, to be headed by the City Manager, or his or her designee, on the local regulatory and public safety priorities preserving municipal constitutional police powers that in the governing body's judgement must be incorporated into the local regulatory framework relating to the operation of UAS in the jurisdiction. a. These reserved police powers should include: 1) A specific prohibition against careless and reckless operations that endanger life or property.16 2) Designated take -off and landing zones for UAS within the city limits. 3) Permissible hours of operation. 4) Rules for operation of UAS during parades, public holiday celebrations or other city-wide civic events. 5) Rules for operation in parks, and on waterfront areas. 15 See "State and Local Regulation of Unmanned Aircraft Systems (UAS) Fact Sheet, released by the Office of the Chief Counsel of the Federal Aviation Administration, December 17, 2015. 16 Careless and reckless operations are specifically prohibited by Section 21407 of California's State Aeronautics Act. More importantly, the state, and by implication local district attorneys, can prosecute individuals for violation of this provision. However, careless and reckless operation may not be sufficient to obtain a conviction unless such operation rises to the level of endangering life or property. Local ordinances will likely have to be carefully worded so as to require a substantial danger of such an outcome, or include other language that meets a specific, heightened standard. 6) Rules for operation of UAS during local emergency conditions.17 7) Rules placing conditions on the operation of UAS in certain areas of the city (near police stations, schools, or busy pedestrian walkways) 8) Accountability measures to insure that operators are aware of and accountable to local rules. 9) The right to condition the ability to take off and land on receipt of a permit issued by the city, or submission of notice of UAS operations to the city under certain limited circumstances. 10) The right to enact and enforce rules of general applicability in a manner that addresses unsafe drone operations (trespass, nuisance, or noise) 11) Compliance with due process provisions (notice to the public and a comment period for the proposed ordinance prior to adoption) The working group shall develop a local regulatory framework for a draft ordinance governing the operation of UAS that reflects the priorities identified by the governing body. 2. The City Manager shall appoint the other members of the working group. It is recommended that the composition of the working group include the Chief of Police and the Fire Chief, or at a minimum, that they be consulted. 3. The development of the local regulatory framework shall include input from relevant community stakeholders, including but not limited to: local businesses, local drone clubs and other local model aviation organizations, local aviation associations, schools, local utilities, and if there is an airport of any size within five miles of the jurisdiction, the local airport authority. 4. Upon completion of the local regulatory framework, the City Manager shall review it and either approve it for submission to the City Attorney, or return it to the working group for revision. 5. Once a framework has been approved, the City Attorney shall then prepare a draft ordinance based on the framework. The draft ordinance shall be submitted to the working group for review prior to being submitted to the City Council. 6. Upon its completion, the draft ordinance shall be submitted to the City Council for approval. 7. Once approved by the City Council, the ordinance should be posted online on the City's website, to ensure that the public and in particular drone operators are on notice about the local regulations. 8. The UAS ordinance should be reviewed by the working group periodically for possible revision, which must be approved by the City Council. This may become necessary as the FAA further develops rules for either recreational or commercial UAS. 9. If revision is deemed necessary by the working group, the working group shall reconvene to determine what revisions may be necessary, if any. Steps 4 through 7 of these guidelines should be followed if any revisions are to be proposed to the UAS ordinance. 17 Prohibiting recreational UAS operations during local emergencies is clearly within the scope of cities' constitutional police power. 8 Agenda Item No.: 10-E Additional Information ORDINANCE NO. 16- Mtg. Date: 04/24/17 AN ORDINANCE OF THE CITY OF HERMOSA BEACH ADDING A NEW CHAPTER 9.38 TO THE HERMOSA BEACH MUNICIPAL CODE TO REGULATE DRONES, UNMANNED AIRCRAFT AND MODEL AIRCRAFT The City Council of the City of Hermosa Beach does hereby ordain as follows: Section 1. Chapter 9.38 is hereby added to Title 9 (Public Peace, Morals and Welfare) of the Hermosa Beach Municipal Code to read as follows: "Chapter 9.38 Drones, Unmanned Aircraft and Model Aircraft 9.38.010 Purpose and Findings. The operation of Unmanned Aircraft such as Model Aircraft and Civil Unmanned Aircraft Systems ("UASs"), commonly known as drones, can at times pose a hazard to full-scale aircraft in flight and to persons and property on the ground. Imposing community -based safety requirements on the operation of Model Aircraft and imposing restrictions on the operation of both Model Aircraft and Civil UASs consistent with Federal Aviation Rules and state law is necessary to mitigate such risks and to protect the public from the hazards associated with the operation of Unmanned Aircraft. 9.38.020 Definitions. The following words, phrases and terms as used in this chapter shall have the meanings indicated as follows: 1. "Unmanned Aircraft" shall mean an aircraft, including, but not limited to, an aircraft commonly known as a drone, that is operated without the possibility of direct human intervention from within or on the aircraft. 2. "Unmanned Aircraft System" shall mean an Unmanned Aircraft and associated elements, including, but not limited to, any communication links and components that control the Unmanned Aircraft. 3. "Person" shall mean shall mean any individual, partnership, corporation, or joint -venture. Ordinance No. 16 - Page 2 4. "Model Aircraft" shall mean an Unmanned Aircraft or Unmanned Aircraft System operated by any Person strictly for hobby or recreational purposes. 5. "Civil UAS" shall mean an Unmanned Aircraft or Unmanned Aircraft System operated by any Person for any purposes other than strictly hobby or recreational purposes, including, but not limited to, commercial purposes or in furtherance of, or incidental to, any business or media service or agency. 6. "Public UAS" shall mean an Unmanned Aircraft or Unmanned Aircraft System operated by any public agency for government related purposes. 9.38.030 Operating Permit Required. A. Generally. An operating permit shall be required for every Unmanned Aircraft and Unmanned Aircraft System operated in the City. No Person shall operate an Unmanned Aircraft or Unmanned Aircraft System in the City without first obtaining an operating permit and obtaining an identification number assigned by the City and submission of a copy of the Certificate of Aircraft Registration/Proof of Ownership issued by the Federal Aviation Administration. B. Applications. An application for a UAS operating permit shall be on a form provided by the City and show: 1. Name and phone number of the operator; 2. Make, model and serial or N -number of UAS to be permitted; 3. A description of proposed flight activity, including whether filming, taking of visual images and/or sound recording will occur; 4. Copy of Certificate of Aircraft Registration/Proof of Ownership issued by the Federal Aviation Administration; 5. A signed statement certifying that the applicant knows how to operate the UAS and is aware of and agrees to operate it in full compliance with its operating instructions and with the provisions of this chapter and any other federal or state laws governing its operations. 6. A signed statement acknowledging that only the applicant may operate the UAS in the City. 7. A signed indemnification clause protecting the City from liability. 8. Such other information as may be requested by the City. Ordinance No. 16 - Page 3 9. Payment of an application filing fee in an amount as set forth in the City's master fee resolution. The filing fee for a UAS found to be operating in the City without a permit shall be trebled. C. Placement. The permit sticker and identification number shall be placed on the body of the Unmanned Aircraft or Unmanned Aircraft System in a conspicuous location on the earth -facing surface of the device and in a manner clearly visible from the ground. Placement of stickers shall be subject to approval of the City or performed by the City. D. Issuance of permit. The permit will include a copy of the operating rules set forth in this chapter. Permits will be issued for a period of one year and may be renewed annually upon filing of a renewal application and payment of a renewal fee as set forth in the City's master fee resolution. A permit shall not be issued if the applicant is found to have operated the UAS in violation of Section 9.38.040 or renewed if grounds exist for revocation. E. Assignment. The permit is not assignable. No person other than the applicant may operate the UAS within the City. F. Revocation. The permit may be suspended or revoked if the City Manager, or his/her designee finds based on a preponderance of the evidence, after the permittee is afforded notice and an opportunity to be heard, that the permittee has violated any provision of this chapter. A decision by the City Manager may be appealed to the City Council; the decision of the Council shall be final. 9.38.040 Operating Requirements and Restrictions. A. No Person shall operate any Model Aircraft or Civil UAS within the City in a manner that interferes with manned aircraft, and Model Aircraft shall always give way to any manned aircraft. B. No Person shall operate any Model Aircraft within the City beyond the visual line of sight of the person operating the Model Aircraft. The operator must use his or her own natural vision (which includes vision corrected by standard eyeglasses or contact lenses) to observe the Model Aircraft. People other than the operator may not be used in lieu of the operator for maintaining visual line of sight. Visual line of sight means that Ordinance No. 16 - Page 4 the operator has an unobstructed view of the Model Aircraft. The use of vision -enhancing devices, such as binoculars, night vision goggles, powered vision magnifying devices, and goggles or other devices designed to provide a "first -person view" from the model, do not constitute the visual line of sight of the person operating the Model Aircraft. C. No Person shall operate any Model Aircraft or Civil UAS within the City other than during daylight hours defined as between official sunrise and official sunset for local time, unless proof of authorization to do so by the Federal Aviation Administration is provided to the City. D. No Person shall operate any Model Aircraft within the City more than 400 feet above the earth's surface, unless proof of authorization to do so by the Federal Aviation Administration is provided to the City. E. Excluding takeoff and landing, no Person shall operate any Model Aircraft or Civil UAS within the City closer than 25 feet to any individual, except the operator or the operator's helper(s). F. No Person shall operate any Model Aircraft or Civil UAS within the City in a manner that is prohibited by any federal or state statute or regulation governing aeronautics, including but not limited to Public Utilities Code Section 24107 and Federal Aviation Rule 91.13. G. No Person shall operate any Model Aircraft or Civil UAS within the City in violation of any temporary flight restriction or notice to airmen issued by the Federal Aviation Administration. H. No Person shall operate any Model Aircraft or Civil UAS within the City to capture, record or transmit any visual image or audio recording of any person or private real property located in the City under circumstances in which the subject person or owner of the subject real property has a reasonable expectation of privacy (including, but not limited to, inside a private office and inside a hotel room). This provision is intended to supplement, rather than duplicate, the prohibition against trespassing into the air space above the land of another person in order to capture any type of visual image or sound recording of a person engaging in a private, personal, or familial activity in a manner that is offensive to a reasonable person, pursuant to California Civil Code Section 1708.8. Ordinance No. 16 - Page 5 I. Unless authorized by federal law, no person shall knowingly and intentionally operate any Model Aircraft or Civil UAS on the grounds of, or less than 350 feet above ground level within the airspace overlaying, a public school in the City providing instruction in kindergarten or grades 1 to 12, inclusive, during school hours and without the written permission of the school principal or higher authority, or his or her designee, or equivalent school authority. J. Unless authorized by federal law, no person shall knowingly and intentionally use any Model Aircraft or Civil UAS to capture images of public school grounds in the City providing instruction in kindergarten or grades 1 to 12, inclusive, during school hours and without the written permission of the school principal or higher authority, or his or her designee, or equivalent school authority. K. No person shall operate any Model Aircraft or Civil UAS in a manner that interferes with firefighting, police activity or emergency response activity as detailed in California Penal Code Sections 148.2 and 402. L. No person shall operate any Model Aircraft or Civil UAS within the airspace overlaying the Civic Center complex or a City park or the beach during a scheduled special event unless authorized to do so in the special event permit. M. No person shall operate any Model Aircraft or Civil UAS within the City in a manner designed, intended or which serves to harass, stalk, vex, annoy, disturb, frighten, intimidate, injure, threaten, victimize or place in extreme mental or emotional distress any particular person, whether that person is located on public or private property. The conduct described in this paragraph includes, but is not limited to, using a Model Aircraft or Civil UAS to follow and film, video -record, live -stream or photograph a person who has not consented to such activity. 9.38.050 Violations. It shall be unlawful for any Person to violate or fail to comply with this chapter. Any Person violating the provisions of this chapter shall be guilty of a misdemeanor and subject to the provisions of Chapter 1.04 of this Code. Any UAS or Model Aircraft found to be operated in violation of this chapter may be impounded and held as evidence in any enforcement proceeding brought under this chapter. An impounded UAS or Model Ordinance No. 16 - Page 6 Aircraft will be returned at the conclusion of any enforcement proceeding upon payment to the City of an impound fee as set forth in the City's master fee resolution. 9.38.060 Exemptions. The permit requirement set forth in Section 9.38.030 of this chapter shall not apply to any Civil UAS operated pursuant to and in compliance with the terms and conditions of a valid City -issued film permit or special event permit with Federal Aviation Administration authorization or any Public UAS operated pursuant to, and in compliance with, the terms and conditions of any current and enforceable authorization granted by the Federal Aviation Administration. Section 2. This Ordinance was assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines (the Guidelines), and the environmental regulations of the City. The City Council hereby finds that under Section 15061(b)(3) of the State CEQA Guidelines, this Ordinance is exempt from the requirements of CEQA because it can be seen with certainty that the provisions contained herein would not have the potential for causing a significant effect on the environment. Section 3. If any section, subsection, subdivision, sentence, clause, phrase, or portion of this Ordinance or the application thereof to any person or place, is for any reason held to be invalid or unconstitutional by the final decision of any court of competent jurisdiction, the remainder of this Ordinance shall remain in full force and effect. Section 4. The City Clerk shall cause this Ordinance to be published at least once in a newspaper of general circulation published and circulated in the City within fifteen (15) days after its passage in accordance with Section 36933 of the Government Code, shall certify to the adoption of this Ordinance, and shall cause this Ordinance and her certification, together with proof of publication, to be entered in the Book of Ordinances of the Council of this City. PASSED, APPROVED AND ADOPTED THIS day of , 2016. MAYOR ATTEST: Ordinance No. 16 - Page 7 City Clerk