HomeMy WebLinkAbout05-17-2012 Council Agenda PacketCity Council Agenda
CouncilPresident
Cl inton J .Olivier
CouncilMembers
Oli ver L.B aines III
Andreas Borgeas
L ee Brand
Sa l Qu intero
La rry Weste r lund
Blong Xiong •Acting Presiden t
City Attorney
James C .Sanchez
City Cleril
Yvonne spence~,;C;M;C;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;~~~~~~
CityManager
Mark scott;;;;;;;;;;;;;;;:
Themeetingroomisaccessibletothephysicallydisabled ,andtheservicesofatranslatorcan be madeavailable.
Requests for additional accommodations for the disabled ,signers,assistive listening devices.or translators
should be made one week prior to the meeting .P lease call City Clerk's Office a t 62 1-7650.
The City Counc il we lcomes yo u 10 the Counc il Chambers ,located in City Hall 2nd Floor,2600 Fresno Street,Fresno CA 93721 .
May 17, 2012
8 :30 A.M.ROll CAll
Invocat ion by Reverend Dr.Paul Binion,Senior Pastor .of the W estside Church of God
Pledge of Allegiance to the Flag
Ceremonial Presentations:
Proclamation of ·ST EVE ALCALA DAyo -Co uncil President Olivier
Th e age nda and r elated s t af f re ports are ava ilable on (www.fresno.goY)as we ll as i n t he Office of t he City Clerk.
T he Co uncil meeti ng ca n also be h eard live at t he sa me we b s ite address,and v iewed live on Cab le Channel 96
f rom 8:30 a.m.and re-pla yed beginning at 8:00 p .m .
PROCESS:For each matter con sidered b y t he Council there w ill first b e a s taff presentation followed
by a presentation f rom the involved i ndividuals,if p resent.Testi mony fro m t ho se i n attendance will
then be taken.All te stimony will be li mited to three minutes per person.If you wo uld li ke to s peak fill
o ut a Speak er Request Fonn availab le from the City Clerk's Office and in the Council Chambers .The
three li ghts on th e podium next to th e m icrophon e will ind icate the amo unt of time remaining for the
s peaker.
T he g reen li ght o n the podium will be turned on when the speaker b egi n s .T he yellow li ght will come on
with o ne minute remaining. The s peaker s hould be completing t he testimony by t he time the red li ght
co mes o n and t ones sound,ind icating t hat ti me has expired.A co u ntdown of ti me remaining to speak
is al so d isplayed o n t he l arge screen be hind th e Cou nc il dais.
Fo llowing i s a ge neral s chedu le of items for Co un c il con sidera tion and action.T he City Council may
c o ns id er and act on an agenda item in any o rder it deems appropriate.Act ual ti med item s may be
heard later but not before t he tim e s et on age nda.Persons i nterested i n an item li sted o n t he ag enda
are advised to be nresent throuahout the meetina to ens ure their er eeence when the it em is ca lled.
May 17 , 2 012 ·SUBJECT TO MAYOR 'S VETO OR RECONSIOERATIO N
AND MAY BE AMENOED AT ANYTIME
Page 1
Ap prove Co uncil m inutes of M ay 3 ,20 12
Action Taken:
A pprove Ci ty o f F resno C ultural A rts Properties (COFCAP)m inutes of A pril 19 an d 26, 2012 - Bai nes ,O livier,
Swearengin
Action Taken:
Cou ncilmember Repo rts a nd Co mments
Action Taken:
A pprove Agenda
Action Taken:
Adopt Co nsent Ca len dar
Action Taken:
1 .[C ONSENT CALENDARI
All Consent Ca lendar items a re considered to be rout ine and w ill be treated a s one agenda item.The
Consent Ca lendar w ill be enacted by one motion.Public comment on the Consent Ca lendar is li mited to
three (3)minutes per speaker.There w ill be no s eparate discussion of these items unless requested by a
Cou nc ilmember,in wh ich event the item w ill be removed from the Consent Ca lenda r a nd w ill be cons idered
as time a llows.
A.Documents pertaining to Fr esno Police D epartment 's Ho me la nd Security Gr ant Prog ram - Pol ice
Dep art m ent
1 .Au thorize acce ptance o f fi scal year 20 11 Cycle State Homeland Security F unds in th e a moun t of
$180,000,s ubgranted fr om th e State of Californ ia Emergency M anagem ent Agency
A ction Taken:
2.*RESOLUTION -ss"am e nd ment to A nnua l Appro priations Reso lut ion (AA R) No.20 1 1~133
a ppropria ti ng $30,000 i nto th e fi scal yea r 20 12 budget fo r the Fresno Po lice Depa rt ment's Homeland
Secu rity Gran t prog ram.(Requ ires 5 affirmative vote s)
A ction Taken:
B.Docum ents perta ining to the Fresno Police D epartment's M obile C ommand C ente r (MCC)-Police
Depa rtment
1.A pprove a Findi ng o f Exemption p ursuant to Sec tion 1506 1(b)(3)(Ge neral Rule Exemption) o f t he
Califo rnia Environm enta l Q uality Act Gu ide lines for the upgrades, repairs an d tech nology
e nha ncements to the Po lice Depa rtme nt's M obile Co mmand Ce nter (MCC)
Action Taken:
2 .Awa rd a contract to P ublic Sa fety Innovations,Inc.,of Go ld R iver,California to prov ide upg rades,
repairs a nd technology en hancements to the Po lice Department's M obile Co mmand Ce nter (MCC)in
the amo unt of $168 ,400 .Fu nding provi ded f rom t he U.S.D epartment of Homeland Security through
the 2 007 Pub l ic Safe ty Interoperab le Com munications (PSIC)gra nt
Action Taken:
C.A pprove a n ag ree ment with Prec is ion C ivil Eng ineer ing (PC E),Inc .of Fresno, C alifo rn ia in th e am ou nt of
$6 1,350 ,wi th a co ntingency a mount of $6 ,000 fo r a total f ee of $6 7,350 for th e design of p lans a nd g eneral
co nstructio n co ntract d ocu m ent s for t he m edian island land scape and irrigati on pr oject, as w ell as
a uthorization for th e Publi c Wo rks Directo r o r hi s designee to s ig n t he a greement on th e C ity 's be ha lf
(C ityw ide)- Public W orks Department
Action Taken:
D.Approve Co nt ract Cha nge Ord er No .1 1 for a ti me ex te ns io n to Gol den State Ut ilit y Co mpany for Intelligent
Tr anspo rta tion Sys tem C lovis Avenue f rom American to D akota Ave nues (Prop erty l o cated i n Districts 4
and 5)-Pub lic W orks De partment
Action Taken:
M ay 17,2012 'SUBJECT TO MAYOR'S VETO OR RECON SIDERATI ON
AND MAY BE AMENDED AT ANYT IME
Page 2
1,ICONSENT CALENOAR CONTINUEDI
E. "RESOL UTION -73rd amendme nt to the Annua l Appropriatio n R es olut io n (AAR) No .20 11-133 ap propriating
$1 56,200 in t he Park s,Aft er Sc hool,Re c reation and C ommunity Servi ces D epa rtment to co nduc t the
Informa l Sc ience Program for Clovis U nifie d Sc hool Dis trict ,Fresn o C ounty O ffice o f Educ ation,Fresn o
Un ified School District, a nd St. Ant hony's Elementary Sc hoo l runn ing t hrough Ju ne 3 0, 2 0 12 (Requ ires 5
affirmative vo tes)(Property l ocated i n Distr icts 2,3,5 and 7)-PARe S
Action Taken:
F. "RESOL UT IO N - 74th a me ndment to the Ann ual Appropriation Re sol ut ion (AAR) No.2011 -133 a ppropriating
$1 30,000 from the Califo rnia Endowm ent Building Hea lthy C omm un itie s Gra nt i n the Park s ,A fter Scho ol,
Recreati on an d Co m m u nity Se rvices Dep artme nt for recreation an d c ultural arts progra ms at Holmes and
Romain Neighborhood Park s (Requires 5 affirm at ive vo tes)(Properly l ocated i n Di stricts 5 and 7)-
PAR CS
A ction Taken :
G.*RE SOL UTI ON -76th amendment to the Annua l App rop riat ion Re solution (AAR)No .201 1-13 3 app rop riating
$1 30,000 of C DBG-R f unds for the vario us Pa rks improve m ent projects ;appropriating $145,200 of N SP
f und s for staff admi nistrati on costs; and authorizing the City Manager to s ign all imp lementing documents as
a pproved to form by t he C ity A ttorne y (Req uires 5 affirmative votes)-F ina nce Dept./Budget Div ision
A ction Taken :
H .App rove a n a greement wi th Brooks -R ansom As sociates in the am ount of $7 8,000 for the preparation of
construction do cu m e nts for t he Schoettl er Convention Ce nt er reroof a nd HVAC u pgrade proje ct,as well a s
authorization for the P ublic Work s Dir ector o r his d esignee to sign t he ag ree m e nt on t he City's beh alf
(Property l ocated in Distri ct 3)-Publi c Works Depart ment
A ction Taken :
I.Documents perta ining to sa le of a s ma ll a bandoned water well parc el wh ic h is so uth of Butl er Ave nue a nd
east of Chestnut A venue (Pro perty l ocated i n Distr i ct 5) -Publi c W o rks Department
1.Ad opt F inding of No Possibilit y of S ignif icant Effect pu rsuant to CEQA Gu idelines Secti on 150 61(b )
(3)and Ca tego ric al Exemption pu rsuant to CEQA Guid elines Section 15312 for th e sale o f a s ma ll
a bandoned wate r w ell parcel whi ch is o n t he so uth s ide of Butler A venue a nd eas t o f Chestnut
Av enue,AP N 4 73-020-18T,to th e a djacent pr operty o wner Fresno Pac ifi c Univ ersity
A ction Taken:
2.Appr ove the sa le of a s mall abandoned water w ell par cel w hich is so uth of Butler Av enue a nd e ast of
Ch estnu t A venue known a s A PN 4 73-020-18T to th e a djacent property owner Fres no Pacific
Un iv ersity
Action Taken:
J .RESOLUTION -T o permane ntly s us pend expe nd iture s o n new app lication u nder t he Muni c ipal R estoration
Zone Appli cation -De ve lopment and Resource Ma nageme nt De partment
Ac tion Taken :
K .App rove th e fi rst a me ndme nt w ith Bla ir C hurch &Flyn n Con sul t ing Engineers ,a California C orpo rat ion of
Clovis Cal ifo rnia ,for des ign se rvices of the sewer re habilitation project in Harrison Ave n ue fo r a net inc reas e
of $8 ,500 and n o ad dit io nal day s a nd a uth orize the Dire cto r of P ublic Util ities to s ign the agr eement on behalf
of the City (Property l ocated i n Di st ri ct 3) -Depa rt ment of P ublic Utilities
Ac tion Taken:
L.RESO LUTION -approving the s umm ary vac a tio n of a po rti on of a w ater ma in e asement o n the W almart
pr ope rty a t E.Kings Cany o n Road and $.A dler Ave nu e (Property located in District 5) -P ublic W orks
D epartmen t
Ac tion Taken :
ICONT E ST ED CONSE NT CALE NDAR I
May 17,2012 'SUB JECT TO MA YOR'S V ETO OR RECONSIDERATION
A ND MA Y BE A MENDED AT ANYT IME
Page 3
[S CHEDULED COUNCIL HEARINGS AND MATTER ~
10:00 A.M.
10:30 A.M.
H EAR ING to co nsider adop tion of resol uti ons related to t he d esigna tion o f the G eo rge H.Wa lley
re sidence located a t 1338 N Street ,the Blacks Pack age Store located at 755 Van N ess A ven ue,and
the Droge Building located at 802 Van Ness Avenue to the Local Register of Historic Resources
(Prop erty l o ca t e d In District 3)-D eve lo pm ent and Re sou rce Ma nageme nt D epart ment
a.*RESOLUTION -Designating t he George H .Wa lley re s id ence located at 1338 N Street , to the
Local Reg ister of H istor ic Re sources
A ction Taken :
b.*RESOLUTION -De signating the Blacks Package Store located at 755 Van Ness Ave nu e to t he
Loc a l Register of H istoric R esources
A ction Taken :
c .*RESOLUTION -De s ignating t he Drog e Building loc ate d at 8 02 Van N ess A venue to t he Loca l
Registe r of Histo ric R esou rces
A ction Taken:
P ENERAL ADMINISTRATIONI
A.Acc e pt C ity o f F res no Co mprehe nsi ve A nnu a l F in anc i al Re port (CA F R)fo r fi scal ye ar 2 011 -F inance
Departme nt
Action Taken:
B .Docu m ent pert a ini ng to t he H igh S pe e d Rail Proj e ct -Public W orks Departm ent
1.~R ESOLUTION -67 th amend ment to th e An nual Approp riation Resol uti on (AAR)No. 2 011-13 3
appropriati ng $295 ,000 in Prop ositio n 1A fu nds fo r eng inee ring a nd pla n review for the High S peed Rail
(HSR) Project u nde r the Master Cooperat ive Agre eme nt (Requires 5 affirmative votes)
Action Taken:
C.Docu ments perta i ning to t he A shla n A venue gr ind a nd overlay from B lac kstone Av enue to First S treet proje ct
(Property loc ated in District 4 and 7) - P ubl ic W orks Departm en t
1.Adopt f inding of Categorica l Exemption pe r staff determ ination ,pu rsua nt to S ectio n
1530 1 C lass 1 (c )of the CEQA Guid e line s,for t he Ash la n Ave nue g rind a nd o verlay from B lac k stone
Avenu e to F irst Str eet proj ect
A ction Taken:
2.Aw ard a co nstruction co ntract with Age e Con str uction C o rpo rati on o f Clovis,Ca lif ornia ,in the am ount
of $607,0 97 for th e As hlan Av en ue grind a nd o verla y fro m Blackstone Av enue to Fir st Str eet p roj ect
Action Taken:
D .Docum ent pertain ing to expan sio n o f the F re s no R eg iona l Co mp rehensive R es identia l Retrofit Program und er
exist ing Co ntract No.4 00-09-032 w ith the California Ene rgy Commission -Develo pment a nd Reso urce
Man age ment D epartment
1."RES OLUTION -7 5th am endment to the A nnual Appropri ation Re solut ion (AA R) No. 2 011-133
a ppr opriating $500 ,00 0 of U .S. Depa rtment of Ene rgy ,Energy Effic ie ncy a nd Co nse rvatio n Block G rant
Fu nding from t he California Energy C omm iss ion for implem entatio n of the Fresno Regional
Comp rehensive Residential Retrofit Program in F re s no ,Mad era,Kern ,T ulare, a nd Kings Co u nti es
(Requires 5 affirmative vot es)
A ction Taken:
E .B ILL -(For introduction)•Amend ing Sec t ion 6·804 o f t he F resno Muni cipal Co de relati ng to the in spectio n o f
backflow prevent io n d evic es -Depa rtment o f Public Utilitie s
A ction Taken:
May 17 ,2012 'SUBJECT T O MAYOR'S VETO OR RECONSIDERATION
AND MA Y BE AMENDED AT AN YTIME
Page.4
10 :30 A.M.IGENERAL ADMINISTRATION CONTINUEDI
F.Adopt Fi nd ing o f Ca tego rical Exe mption ,pursuant to A rticle 19,Sec tion 15332/C lass 32 (in -fill d evelop m ent),of
t he Ca liforn ia E nvironm e ntal Qu a lit y Ac t G uidelines and ap prove a $733 ,025 Home Investm e nt Pa rtn ers hi ps
P rogra m ag reement with Fult on Co urt Partners,L LC,fo r ac quisition an d rehabilitatio n of t he Fu lton Co urt
A partments ,a 't O-unit affo rdab le mu lti -family housin g bun ga low cou rt loca ted at 142 N.Ful to n Aven ue in t he
Lowell Ne ighbo rhood (P rop erty l oc at ed In District 3)-Deve lopment an d Resource Ma nagem e nt Departm ent
Action Taken:
10 :45 A .M.F ITY C OUNC l q
A.Co ns ide r Charter Re view Co mmittee recommendations,Item s 1 - 55 - Cou ncil Pres ident Oliv ier
Council wilf take action on items 15 25 and are fisted as follows :
15.Whether Council shou ld have the exclus ive aut hority to appoi nt a nd remove thei r re spe ctive Co un ci l
a ss istants (§500)(Con tinued from th e m eetin g o f 5/3/2012)
A ction Tak en:
16.Whether the Charter s hou ld provide t hat the Co uncil Presidency is based o n a rotati onal s ystem
wi th m ajority c onfirmation
A ction Taken:
17. Wh et her t he City 's camp aign co ntrib ution policy s hould be mod ified (§309)
A ction Tak en:
18 .Whethe r th e C harter s hould inc l ude a provi sion o bligating C ity employees to repo rt s uspec ted illeg a l
activities to t he City Atto rney 's O ffi ce or C ity Manage r 's O ffice
A ction Tak en:
19 .W hether the Ma yor s ho uld be ab le to m a intain separate legat co unsel
A cti on Tak en:
2 0.Wh ether a p rovisio n s ho u ld be inc lu ded in t he C harter whi c h wou ld enable C o uncil to d irect th e City
Co ntrolle r to r es pon d to fi n ancial inq uiries posed by C ouncil w ithout pro cessing s uch inquiri es throug h
t he City Manager,as s uming s uch inq uiries w ou ld not pose an unr easonable b urde n o n sta ff or
ot herwise inte rfere w ith t he City Manage r's admi nistrativ e se rvice und er Sec tion 706
A c tion Taken:
21 .Wh ethe r t he C ity Contro lle r s hall s ubm it d irectly to Co unc il a q uarterly f in ancial statement (§309)
A c tion Taken:
22 .W hether the C ontroller s ho u ld ce rtif y;1)th e s pecific funding sou rce(s)for a ll newly c rea ted prog ra ms;
a nd 2)the re liabi lity o f funding for the life of t he program.In the c ase o f def unding ,wh ere the m o nies
a re tran sferred.
A ction Taken :
23 .Wh ether the organ izational structure a nd role of the R DA a nd t he C ity s hould be e xamined to eliminate
redu ndan cies in servi ces a nd d eve lop a m ore efficient m odel for revita lizatio n
A ction Taken :
***IT E M S 24 -55 a re th ose p ro posed by v ariou s Co mm issioners, C oun cil m embers, c itizens a nd
o rganization:
24.Wheth er the Cha rter s hould provide fo r reverse a ucti ons for City purchasin g .
Action Taken:
25.W he ther the C harter s hould include a provision fo r a Co uncil f ina nc ia l/budg et staff perso n a ppointed by
and re port ing to Co uncil
A ction Tak en:
***Coun c il m ay a lso d isc uss It ems 1 -14 and 15-55 as th ey re late t o Items 15 -25. Eac h m eeting
h ereafter,Co uncil will consider 1 1 item s at a time,in n u merical order until a ll it ems h ave b een
considered.(Pl ease n ote:s om e p o rtio ns o f th e Cha rter R eview Co mmi ttee r ec omm endations are
s ubjec t t o May or's v eto .)
M ay 17, 2 012 'SU B J ECT TO MAYOR'S V ETO O R R ECONSIDERATION
A ND MA Y BE AM ENDED AT A NYTIME
Page 5
10:45 A .M.~IT Y COUNCIL CONTINUED I
B.*RESOLUTION -Approve t he "High Speed Rail Business Impact Initiative"f ramework and direct staff
to return to Council with deta iled a nd specific policies for fast-track entitlement and land use
processing,possible modification of loca l regulations and establis h permitting and entitlement
timelines for properties affected by high speed rail-Councilmember Westerlund
A ction Taken:
11:00 A.M. (CLOSED SESSIONI
1.CO NFERENCE WITH LEGAL COUNSEL·EXISTING LITIGATION -Government Code Section
54956.9,Subdivision (a)
Case Names:
a.C ity of Fresno v.Robert Benny Rodriguez
b.City of Fresno v.Unnamed juvenile
c .City of Fresno v.John M.Aranda
d.C ity of Fresno v.Unnamed 5 150 S uspect
e.City o f Fre s no v.Jess Paz
f .C ity of Fresno v. Raymond Sepeda
A ction Taken :
2.CONFERENCE WITH LEGAL COUNSEL·EXI STING LITI GATION -Government Code Section
54956.9,Subdivision (a)
Case Name(s):
a. City of Fresno v .AIG Financia l Products Corp.,et al.
b .Bass,James v .City of Fres no ,et al.
c . City of Clovis,City of Fowler,City of Fresno, City of Kerman,City of Sanger v.County of
Fresno,Office of the Fresno County Auditor-Controller Treasurer-T ax Collector,Vicki Crow
d.City of Fresno v. County of Fresno (Friant Ranc h Project)
e.Concerned Cit izens of W est Fresno v .City of Fresno,and Darling Internatio nal,lnc.,a
Delaware Corporation
f .Fresno Co.Fire Protection District v.City of Fresno
g .Fresno Rock Taco v.Cit y of Fresno
h.Friends of Roeding Park,e t al .v.C ity of Fresno, et al.
i .Garcia,Joe Jr.,et ai,v.City o f Fresno;et a l.
l-Green,Michael v .City of Fresno,et al.
k J B Development v.Cit y of Fresno
I.Kashian Group,LTD v.City of Fresno ,et a l.
m.Lanfranco, S uzanne v.City of Fresno,et a l
n.Leal, Carlos v.C ity of Fresno
o .City of Fresno v.Lee,Dae Song,et al.
p.Lee,Dae,et at v,City of Fresno (Gottschalks)
q .Manfredi,Michael v.City of Fresno
r.Nevarez,Robert, et al. v.C ity of Fresno , et al.
s .Ortiz, Jose,et al.v .City of Fresno ,et al
t.City of Fresno v.O versig ht Board , etc.
u.Sellers,Larry v.City of Fresno,et a l.
v .Wade,Deon v.C ity of Fresno,et al.
A ction Tak en:
3 .CONFERENCE WITH LEG AL CO U NSE L ~EX IS T ING LITIGATION -Government Code Section
54956.9 ,Subdivision (a)
a .Case Name:City of Fresno v .various parties related to San Joaquin Riverbottom Trail
A cti on Tak en:
May 17, 2012 'SUBJ ECT TO MAYOR'S VET O OR RECO NSIDERATION
A ND MA Y B E AM ENDED AT AN YTIME
Page 6
11:00 A .M.[C L OSED SES SION CONTINUEDI
4 .CONFERENCE WITH L EGAL CO UNSEL-EXISTING LITI GATION - Gove rnment Code Sectio n
54956.9,Sub d ivisio n (a)
1. Case Nam e: Kashian Group ,LTD v. City of Fresno et a l.;Suz anne Lanfra nco,
e t al. v.C ity o f Fresno et a t
A ction Taken:
5.CO NFERENCE WI TH LEGAL COUNSEL·DECIDING WH ETHER TO INITIATE LITI GATION ·
Government Code Sectio n 54956.9,S ubdivision (c)
3 .Case N ame:Potentia l litigat ion ag ainst t he Fres no Co unty Loca l A gency
Formation Co m mission ("lAFCO")a nd Real Pa r ty in I nte rest G ranville Ho m es ,lnc.,
r egarding purp orted a pprova l a nd r eco rd atio n o f t he "C hestnut-Coppe r N O. 1
Reo rqanizatio n"a nd "W illow -Coppe r No,1 Reorga nizatio n"
A ction Taken:
6.CO NFERENCE WI TH L EGAL COUNSEL·ANTI CIPATED LITIGATION -Governmen t Code
Sect ion 54956.9,S ubdivision (b)
a. Case Name: Pinedale Cou nty Wa ter District v. Ci ty of Fresno
A ction Taken:
PLEASE NOTE:SC HEDULED A ND UN SCHEDULED CO MMUNICATIONS A RE NOT SC HEDULED FOR A
SPECIFIC TIME AND MAY B E HEARD ANY TIME DURIN G T HE MEE TING
SC HEDULED COMMUNICATION -
1.A ppearance by J eff rey Roberts o f Gr anville Homes to d iscuss t he Westl ake Envi ronm ental Impact
Report (EIR)a nd related entitlement processing sc hedu le
UNS CHEDULED COMMUNICATION - Mem bers of the public may add ress the Council regard ing items that
are no t listed on th e agenda a nd withi n th e subject matte r j u risdiction of the Cou nc il.Each perso n is limited to a
t hree (3)minute present ation.A nyo ne w ishing to be placed on an age nda for a spec ified topic sho uld contact
t he City Cle rk's Office at least te n (10)days prior to the desi red date. Cou ncil action o n u nscheduled ite ms ,if
any .sha ll be limited to refer ring the item to staff for a report a nd possible sched uling on a f utu re Co uncil
agen da .
[S CHEDUL ED COUNC I L HEARINGS A ND MATTERSI
June 7 -10:1 5 A .M.
June 21-10:00 A.M.
Ju n e 21·10 :20 A.M .
Jun e 26 -10:00A .M.
J une 26·10:20 A.M .
May 24 ·
May 3 1 -
J un e 7 -
10:0 0 A.M .TEFR A H EARIN G re: the Ter races at San Joaquin Gardens
NO MEETING -MEMORIAL DAY
10:0 0 A .M. CO NTI NUED HEARING to consi der Rezone Applicatio n No. R·11·0 16 and environmenta l
find ings ,filed by Wi lliam G avello ,pertaining to approximately 0.86 acres of property located on
the north side o f W.Whites Bridge Avenue between N.Fruit and N.Thorne Ave nues (Prope rly
l o cated in District 3)
HEARING re:Rezone App lication No. R-11·0 17,Plan Amendment No. A·1 1·011,filed by Steven
Spencer
HEARING to adopt resol utions and ordinance to anne x territory and levy a specia l tax regarding
City of Fresno Community Facilities District No. 11,Annexation No. 45 (Final Tract Map No.
6000 )(Located in District 6) (south s ide of Nees between Chestnut and Willow)
HEARING re:Notice of Intent to adopt resolution of necessity to acquire certain real prope rty
or interest in real pro perty by eminent domain location :299 1 E Nees Avenue, Clovis, CA
AP N:4 04-072·1 0S owner:Donald E.Jackley and Anita Jackley
HEAR IN G to provide future annexation of territory to CFD No. 16
H EAR I NG to a dopt a resolution ordering the vacation of approximate ly 155 feet of "L" Street
southeast of Ven tura Street (Prope rly loc at ed in Distric t 3)
May 17,2012 'S UB JECT TO MAYOR'S V ETO O R RECO NSIDERATION
A ND MAY B E A MENDED AT ANYT IME
Pag e 7
UNOFFICIAL COPY
Fresno, California
May 3, 2012
The City Council met in regular session at the hour of 8:30 a.m. in the Council Chamber, City Hall, on the day above written.
Present:
Absent:
Andreas Borgeas
Lee Brand
Sal Quintero
Larry Westerlund
Blong Xiong
Clinton Olivier
Oliver Baines III
Councilmember
Councilmember
Councilmember
Councilmember
Acting Council President
Council President
Councilmember
Mark Scott, City Manager
Bruce Rudd,Assistant City Manager
Dave Hale,Chief Assistant City Attorney
Yvonne Spence, City Clerk
Yolanda Salazar,Assistant City Clerk
Pastor George Kayajanian of the First Church of Promise gave the invocation and President Olivier led the Pledge of
Allegiance.
CONGRATULATIONS TO THE YOUTH AMBASSADORS WHO WILL BE TRAVELING TO MUENSTER,GERMANY -
COUNCILMEMBER WESTERLUND
Continued to June 24, 2012.
PROCLAMATION OF "COMCAST CARES DAY" - ACTING PRESIDENT XIONG
Not presented.
UPDATE ON DOWNTOWN ACTIVITIES BY KATE BORDERS,PRESIDENT AND CEO OF DOWNTOWN FRESNO
PARTNERSHIP
Report made.
PROCLAMATION OF "OLDER AMERICANS MONTH" -PRESIDENT OLIVIER
PROCLAMATION OF "BIKE MONTH" -MAYOR AND CITY COUNCIL
PROCLAMATION OF "HEPATITIS B AWARENESS WEEK"-ACTING PRESIDENT XIONG
PROCLAMATION OF "SALVATION ARMY WEEK"-COUNCILMEMBER BRAND
The above proclamations were read and presented.
PRESENTATION OF P.R.I.D.E. TEAM CERTIFICATES FOR THE SPRING QUARTER
Certificates of Commendation were presented to Nancy Cabrera of the City Attorney's Office; Cheryl Bums of the City
Clerk/City CouncillMayor Offices; Shur Vangyi of the DARM Department;Yolanda Smith of the Finance Department;Barton
Burkhart,Keith Sipe and William Veiga of the Fire Department;Darlene Christiansen, Roberta Cope and Art Martin of Fresno Area
Express (FAX); Bryce Hubbell of Information Services Department;Christopher Bernal and Irma Yepez of the PARCS Department;
Jennifer Misner of the Personnel Services Department;Lennie Lujan, See Xiong,(2 -0)Steven Viveros and Desiree Perry of the
Police Department;Robert Andersen,Carla Negrete,Nick Contreras and Cindy Elkins of the Public Utilities Department;and Ann
Lillie, Cher Yang and John Castro of the Public Works Department. A reception was held immediately following.
159-118 5/3/12
RECESS - 9:38 A.M. - 10:03 A.M.
APPROVE MINUTES OF APRIL 26, 2012:
On motion of Councilmember Borgeas,seconded by Acting President Xiong, duly carried,RESOLVED,the City Council
minutes of April 26, 2012,approved as submitted
APPROVE CITY OF FRESNO CULTURAL ARTS PROPERTIES (COFCAP)MINUTES OF APRIL 19 and 26, 2012
(Members Baines,Olivier and Swearengin only)
Laid over to May 17,2012.
COUNCIL MEMBER REPORTS AND COMMENTS:
Councilmember Westerlund reported/commented on the second RDA Oversight Board meeting yesterday including the
FMFCD/Library disagreement,the May 14
th court hearing and the judge's concern with the Library as the representative,the
agreement to sit with eight members in the spirit of cooperation,Doug Vagim continuing to serve as temporary chairman,enforceable
obligations and what the chair and secretary will be looking for, the lack of a city attorney at the meeting and the need/importance of
having a city attorney present to vigorously represent the RDA Successor Agency -- not the Oversight Board,and the decision made to
meet only on Mondays from 3pm to 6 or 7pm.Chief Assistant City Attorney Hale and Assistant City Attorney Sloan addressed the
issue of potential conflict with the city attorney office representing the Oversight Board (with Mr. Hale stating his office would
continue to represent the Successor Agency),and procedure for appeals/reconsideration ofO.B.actions.Councilmember Westerlund
also reported on meeting with the Commanding Officer of the l44th Fighter Wing and encouraged members to accept the invitation for
a tour of the facility and to get a briefing on the conversion process of the F-16s to F-15s as he and Councilmember Brand did.
Councilmember Quintero (1)invited everyone to attend the annual Blessing of the Bikes event for motorcycles at St.Helen's
Church stating 800 to 1,000 motorcyclists participate from throughout the state and expanded further on the nationally recognized
event; and (2)acknowledged city employees and Grizzlies and S.F. Giants fans/season ticket holders Karen Norris and Lorraine
Kuroda who he saw on TV while watching the Grizzlies game.
Councilmember Brand reinforced Councilmember Westerlund's comments on the l44th Fighter Wing and added the facility
had changed so much since he had last been there, his experience on the flight simulator was the highlight of his visit, and encouraged
all Council members to visit.
APPROVE AGENDA:
(I-B)APPROVE THE HOMELESSNESS PREVENTION AND RAPID RE-HOUSING PROGRAM (HPRP)SUB-GRANTEE
AMENDED AGREEMENTS,SUBJECT TO CITY ATTORNEY APPROVAL AS TO FORM,TO REVISE FUNDING AMOUNTS
AND TO REVISE TERMINATION DATES AS FOLLOWS:
#1 AMENDMENT NO.1 TO THE AGREEMENT WITH THE MARJAREE MASON CENTER,INC., TO DECREASE THE
HPRP AGREEMENT FUNDING AMOUNT BY $30,000, AND REVISE THE AGREEMENT TERMINATION DATE TO JULY
10,2012
,.#2 AMENDMENT NO.1 TO THE AGREEMENT WITH CENTRAL CALIFORNIA LEGAL SERVICES,TO DECREASE THE
HPRP AGREEMENT FUNDING AMOUNT BY $28,544.39,AND REVISE THE AGREEMENT TERMINATION DATE TO
mLY 10, 2012
#3 AMENDMENT NO.3 TO THE AGREEMENT WITH THE HOUSING AUTHORITIES OF THE CITY AND COUNTY OF
FRESNO,TO INCREASE THE HPRP AGREEMENT FUNDING AMOUNT BY $58,544.39,AND REVISE THE AGREEMENT
TERMINATION DATE TO JULY 10, 2012
#4 AMENDMENT NO.1 TO THE AGREEMENTS WITH ANGELS OF GRACE FOSTER FAMILY AGENCY,ASPIRANET,
WESTCARE,FRESNO COUNTY EOC, AND HOUSING AUTHORITIES OF THE CITY AND COUNTY OF FRESNO (HMIS),
TO REVISE THE AGREEMENT TERMINATION DATE TO JULY 10, 2012
City Clerk Spence advised the correct termination date for the agreements was July 20
th and not July 10
th •So noted.
159-119 5/3/12
(10:45 a.m,"B")RESOLUTION -APPROVING THE "HIGH SPEED RAIL BUSINESS IMPACT INITIATNE",AND
ESTABLISHING THE "HIGH SPEED RAIL RELOCATION DIVISION OF THE CITY OF FRESNO"AND A CITY POLICY
FOR STREAMLINED TIMELINES AND GUIDELINES FOR ENTITLEMENT AND LAND USE PROCESSING FOR
PROPERTIES AFFECTED BY HIGH SPEED RAIL -COUNCILMEMBER WESTERLUND
Removed from the agenda by Councilmember Westerlund who stated the resolution was still being worked on and upon
question stated hopefully the item would be ready for the next meeting.
On motion ofCouncilmember Westerlund, seconded by Acting President Xiong, duly carried,RESOLVED,the AGENDA
hereby approved,as amended,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand, Quintero,Westerlund,Xiong Olivier
None
Baines
ADOPT CONSENT CALENDAR:
Councilmember Westerlund pulled Item I-F from the Consent Calendar for separate discussion/action after the 10:00 a.m.
item.
(I-A)APPROVE AN AGREEMENT WITH MARK THOMAS &COMPANY,INC., IN THE AMOUNT OF $68,788, WITH A
CONTINGENCY AMOUNT OF $9,000, FOR A COMBINED TOTAL OF $77,788, FOR THE DESIGN OF PLANS AND
GENERAL CONSTRUCTION CONTRACT DOCUMENTS FOR THE HERNDON AVENUE AUXILIARY LANE FROM STATE
ROUTE 41 TO FRESNO STREET, AND AUTHORIZE THE PUBLIC WORKS DIRECTOR OR DESIGNEE TO EXECUTE THE
AGREEMENT ON BEHALF OF THE CITY
(I-B)APPROVE THE HOMELESSNESS PREVENTION AND RAPID RE-HOUSING PROGRAM (HPRP)SUB-GRANTEE
AMENDED AGREEMENTS,SUBJECT TO CITY ATTORNEY APPROVAL AS TO FORM, TO REVISE FUNDING AMOUNTS
AND TO REVISE TERMINATION DATES AS FOLLOWS:
#1 AMENDMENT NO. 1 TO THE AGREEMENT WITH THE MARJAREE MASON CENTER,INC., TO DECREASE THE
HPRP AGREEMENT FUNDING AMOUNT BY $30,000, AND REVISE THE AGREEMENT TERMINATION DATE TO JULY
20,2012
#2 AMENDMENT NO.1 TO THE AGREEMENT WITH CENTRAL CALIFORNIA LEGAL SERVICES,TO DECREASE THE
HPRP AGREEMENT FUNDING AMOUNT BY $28,544.39,AND REVISE THE AGREEMENT TERMINATION DATE TO
IDLY 20,2012
#3 AMENDMENT NO.3 TO THE AGREEMENT WITH THE HOUSNG AUTHORITIES OF THE CITY AND COUNTY OF
FRESNO, TO INCREASE THE HPRP AGREEMENT FUNDING AMOUNT BY $58,544.39,AND REVISE THE AGREEMENT
TERMINATION DATE TO JULY 20,2012
#4 AMENDMENT NO.1 TO THE AGREEMENTS WITH ANGELS OF GRACE FOSTER FAMILY AGENCY,ASPIRANET,
WESTCARE,FRESNO COUNTY EOC, AND HOUSONG AUTHORITIES OF THE CITY AND COUNTY OF FRESNO (HMIS),
TO REVISE THE AGREEMENT TERMINATION DATES TO JULY 20,2012
(1-C)APPROVE SUBMISSION OF THE SUBSTANTIAL AMENDMENT TO THE FY 2011-2012 ANNUAL ACTION PLAN
INCORPORATING THE APPLICATION FOR SECOND ALLOCATION OF EMERGENCY SOLUTION GRANT (ESG)
FUNDING IN THE AMOUNT OF $188,161
(I-D)RESOLUTION NO. 2012-76 -DEDICATING CITY-OWNED PROPERTY FOR PUBLIC STREET PURPOSES ON THE
NORTH SIDE OF W.GETTYSBURG AVENUE EAST OF N. VISTA AVENUE (UNNERSALLY ACCESSffiLE PARK)
(I-E)ACTIONS RELATING TO CONSTRUCTION OF PLAYGROUND IMPROVEMENTS AT ROMAIN PARK
#1 RESOLUTION NO. 2012-77 -APPROVING ACCEPTANCE OF $87,000 IN GRANT FUNDS FROM THE CHILDREN AND
FAMILIES COMMISSION OF FRESNO COUNTY (FIRST 5 FRESNO COUNTY), AND AUTHORIZING THE ASSISTANT
CITY MANAGER/INTERIM PARCS DIRECTOR TO EXECUTE AND SUBMIT ALL NECESSARY DOCUMENTS
#2 RESOLUTION NO. 2012-78 - 71
sT AMENDMENT TO AAR 2011-133 APPROPRIATING $87,000 OF FIRST 5 FRESNO
COUNTY GRANT FUNDS INTO THE PARCS DEPARTMENT FOR PLAYGROUND IMPROVEMENTS AT ROMAIN PARK
159-120 5/3/12
On motion of Councilmember Westerlund, seconded by Councilmember Brand, duly carried, RESOLVED, the above
entitled CONSENT CALENDAR hereby adopted, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
(10:00 A.M.)PRESENTATIONIREPORT BY CLOVIS UNIFIED SCHOOL DISTRICT ON THEIR 50
th ANNIVERSARY AND
UPCOMING CHANGES TO THEIR PROGRAMS AND THE DISTRICT -COUNCILMEMBER WESTERLUND
Councilmember Westerlund introduced the item and stated Clovis Unified celebrated their 50
th anniversary this past year and
congratulated them, advised 40%of the district's students were Fresno residents, stated the district was an outstanding one with many
awards and accolades and was a shining star in the Central Valley's educational world, and introduced Janet Young,Superintendent of
the Clovis Unified School District. Ms. Young introduced district officials in attendance, submitted a packet of written materials to
Council which contained information on how the district serves its students, student achievement, where students reside, and types of
programs/events/activities/facilities that serve the students and the greater Fresno area, and shared information and numbers on the
district and students, displaying a map to illustrate. Upon the request of Councilmember Westerlund Ms. Young expanded on
Measure 'A'which will be on the June ballot, and Councilmembers Westerlund, Brand, Xiong and President Olivier spoke in support
of Measure 'A'and the district, thanked the Board of Trustees for the open relationship/partnership,and thanked Ms. Young for her
presentation. There was no further discussion.
CONTESTED CONSENT CALENDAR:
(1-F)ACTIONS RELATING TO THE GETTYSBURG AVENUE BIKE LANE PROJECT FROM FRESNO STREET TO
WINERY AVENNUE
#1 ADOPT FINDING OF CATEGORICAL EXEMPTION PURSUANT TO CEQA (MINOR ALTERATION TO LAND)
#2 AWARD A CONSTRUCTION CONTRACT FOR THE PROJECT TO INTERMOUNTAIN SLURRY SEAL, INC., OF
WATSONVILLE,CA IN THE AMOUNT OF $328,000
Councilmember Westerlund thanked staff for their work on the project and efforts to address issues,(3 -0)and spoke to
a district meeting where some concerns were still expressed, to modifications that were made to the plan, and to his desire to get back
to his constituents to inform them ofthe changes and made a motion to continue this item to May 24
th stating the bids were good until
May 25
th .
On motion ofCouncilmember Westerlund, seconded by President Olivier, duly carried, RESOLVED,Item I-F continued to
May 24, 2012, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
(10:30 a.m,"A")ACTIONS RELATING TO THE HIGH SPEED RAIL (HSR)PROJECT
#1 RESOLUTION -67TH AMENDMENT TO AAR 2011-133 APPROPRIATING $295,000 IN PROPOSITION lA FUNDS FOR
ENGINEERING AND PLAN REVIEW FOR THE HSR PROJECT UNDER THE MASTER COOPERATIVE AGREEMENT
(Failed adoption due to the need (or five (5)affirmative votes)
#2 APPROVE A MEMORANDUM OF UNDERSTANDING (MOD) WITH THE CALIFORNIA HSR AUTHORITY PROVIDING
FOR PAYMENT OF $295,000 TO THE CITY OF FRESNO FOR COSTS INCURRED IN PERFORMING THE TASKS NEEDED
TO DEVELOP A MASTER COOPERATIVE AGREEMENT FOR THE HSR PROJECT (Approved)
City Engineer Mozier reviewed the issue as contained in the staff report as submitted, and stated time was of the essence
from the HSR Authority's perspective in the bid process and recommended approval.
159-121 5/3/12
Upon questions of Councilmember Westerlund Mr.Mozier explained the scope of engineering work and how impacts to city
streets, traffic signals, and sewer and water would be addressed, and advised additional environmental work was not part of this
equation.Councilmember Westerlund made a motion to approve staffs recommendation,which motion was seconded by Acting
President Xiong.Councilmember Brand presented questions and comments relative to how much staff time had been expended on this
project over the past two years,amount spent on consulting contracts,if any funds have been spent on public relations/voter surveys,
request staffprovide an accounting on reimbursements received so far,whether enough has been done to accommodate businesses,the
amount of time/money/effort being spent on a project that mayor may not be completed,and the number of changes over the past two
years and this being a critique of the HSR Authority and not the city of Fresno, with Mr.Mozier, ACM Rudd and City Manager Scott
responding and/or clarifying issues throughout.Acting President Xiong stated he did not necessarily disagree with Councilmember
Brand in terms of raising questions but stated this was about investment and very importantly the City being reimbursed for it work.
On motion of Councilmember Westerlund,seconded by Acting President Xiong, duly carried,RESOLVED,the above
entitled Resolution failed due to the need for five (5)affirmative votes, and the Memorandum of Understanding with the California
High Speed Rail Authority providing for payment of $295,000 to the City of Fresno for costs incurred in performing the tasks needed
to develop a Master Cooperative Agreement for the High Speed Rail project hereby approved, by the following vote:
Ayes
Noes
Absent
Brand,Quintero,Westerlund,Xiong,
Borgeas,Olivier
Baines
Councilmember Westerlund and Chief Assistant City Attorney Hale noted the AAR failed but the Memorandum of
Understanding passed and there was now an approved contract without an appropriation.Mr.Scott stated this was a very important
policy issue that the Council was failing to deal with, and upon question ofCouncilmember Westerlund Mr. Rudd stated the contract
had not yet been executed with the HSR Authority.Councilmember Westerlund stated there was $295,000 worth of work that could
be done, the contract was approved but it would not be executed until there was funding for it, and recommended staff bring the
resolution back for consideration at the next meeting.Councilmember Brand stated members can have their reservations about HSR
but clarified this vote was mainly a mechanical one to reimburse the City for its work, and stated in the end a decision on HSR will be
made at either the state or federal level and Council had a responsibility to its citizens and businesses and this was a step in that
direction.Briefdiscussion ensued on reconsidering the matter and it was determined to bring the resolution back at the next meeting.
(10:30 a.m,"B")ACTIONS RELATING TO PHASE I RENOVATIONS OF EXISTING FIRE STATION NO.4
#1 ADOPT FINDING OF A CATEGORICAL EXEMPTION PURSUANT TO CEQA (EXISTING FACILITIES)
#2 AWARD A CONSTRUCTION CONTRACT FOR THE PROJECT TO MARKO CONSTRUCTION GROUP IN THE
AMOUNT OF $839,360
#3 RESOLUTION NO. 2012-79 - 63
RD AMENDMENT TO AAR 2011-133 APPROPRIATING $650,000 TO THE FIRE
DEPARTMENT FOR THE FIRE STATION NO.4 RENOVATION PROJECT
Project Manager Bernard reviewed the issue and recommended approval, all as contained in the staff report as submitted.
Councilmember Westerlund left the meeting at 11:10a.m. during the presentation and returned in the afternoon session.
President Olivier spoke briefly in support of the project and stated this was about public safety and made a motion to approve
staffs recommendation,which motion was seconded by Councilmember Brand. Upon question of Acting President Xiong ACM
Rudd stated the concerns he raised about the previous company were not applicable in this case.
On motion of President Olivier,seconded by Councilmember Brand, duly carried,RESOLVED,the above entitled CEQA
finding hereby adopted, a construction contract for the project awarded to Marko Construction Group as recommended,and the above
entitled Resolution No. 2012-79 hereby adopted, by the following vote:
Ayes
Noes
Absent
Borgeas,Brand, Quintero, Xiong, Olivier
None
Baines,Westerlund
159-122 5/3/12
(10:30 a.m,"C")AWARD A CONTRACT TO JSA ADVERTISING IN THE AMOUNT OF $363,245 FOR PROFESSIONAL
INFORMATION SERVICES FOR THE DEPARTMENT OF PUBLIC UTILITIES
Assistant Public Utilities Director Andersen reviewed the issue and recommended approval, all as contained in the staff
report as submitted.
Speaking to the issue were Barbara Hunt, 2475 S. Walnut, who requested Council make wise decisions on all issues;
Attorney David Weiland with the law firm of Dowling Aaron, Inc., representing Catalyst Marketing, who spoke in opposition to
staff's recommendation,expanded on issues/concerns they identified with regard to the selection process (4 -0),and submitted a
voluminous amount of written material into the record, on file in the office of the City Clerk; Mark Astone, CEO of Catalyst, opposed
to staff recommendation/unfair process/JSA non-compliant/request Council reject staff recommendation and award contract to
Catalyst as the low bidder; Vern Crowe, Senior Account Leader with Catalyst, opposed to staffrecommendationlconcerns with the
process; Bruce Batti, President of Jeffrey Scott Agency (JSA), who spoke to the complaint letter stating very serious allegations were
made and stated JSA played by the same exact rules/support for staff recommendation; and Riviera Semra, 211 E. Weldon, who stated
she wanted to see a detailed plan on how this money will be spent/questioned if a public relations firm was needed/need to see
qualifications of firm selected.
Public Utilities Director Wiemiller responded to questions of Councilmember Brand relative to whether private PR firms
have always been used to advertise for enterprise departments, what the specific objectives were of the advertising campaign,if other
cities use private PR firms, return on investment/if there was a cost benefit to education/outreach,if advertising could be done
internally, and what Mr.Wiemiller's position was/if staff supported the committee's recommendation for JSA. Mr. Wiemiller added
there was no manipulation or bias in this process and explained, and clarified issues relative to the social media adjustment. Upon
Councilmember Brand's request Chief Assistant City Attorney Hale stated this was an informal bid process under Administrative
Order 6-19 and explained how it did not rise to the level of the more formalized bid process.
Acting President Xiong presented comments and questions at length relative to process, importance of transparency, the
informal bid process, the $50,000 provision,if bidders were aware of the flexibility to change the scope of work, what the incentive
would be for bidders if the scope of work can be changed,if flexibility is offered to all parties for fairness/transparency,if Catalyst's
claim that criteria was different was true, and numerous questions continuing on the process, the flexibility clause, and fairness, with
Mr. Hale and Purchasing Manager McDonald responding and clarifying issues.(5 -0)At this point proceedings were interrupted
for a lunch break.
..LUNCH RECESS - 12:12 P.M.- 1:48 P.M.
Proceedings continued with ACM Rudd speaking to process and the questions/concerns raised by Acting President Xiong,
and stated the City had used the RFP process many times, it was not unusual, and commercial solid waste was a good example of an
RFP and elaborated on the process and what was considered. Acting President Xiong stated he appreciated the flexibility offered but
stated it needed to be offered across the board at the same time and in the same manner to all, and stated his dilemma was criteria,
discrepancies, cost differences, and ability of the other parties to take out the social media component, and again spoke to the
importance of transparency for everyone, with Mr. Rudd responding.Councilmember Quintero presented questions relative to JSA's
bid price with and without the social media component,if social media was asked for in the RFP,if JSA offered it as an option,if
JSA's price of $363,245 covered everything that was asked for, and what the issue was if JSA complied, with Mr. Wiemiller, Acting
President Xiong and Mr. Astone responding.
Upon call for a motion Councilmember Brand noted the lack of enthusiasm and also confusion and upon his question Mr.
Rudd confirmed this matter was delayed before and recommended another delay so staff could go back and negotiate with all the
vendors, review the social media aspect and clarify if it is or is not included, and return in two weeks with a recommendation.
On motion of Councilmember Brand, seconded by Councilmember Quintero, duly carried, RESOLVED,Item 10:30 a.m,
"C"continued two weeks, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Xiong, Olivier
None
Baines, Westerlund
159-123 5/3/12
(11:00 A.M.)CLOSED SESSION -CONFERENCE WITH LEGAL COUNSEL
('A')EXISTING LITIGATION -CASE NAME:STEVEN CLARK V. CITY OF FRESNO,ET AL.,FRESNO SUPERIOR
COURT CASE
The City Council met in closed session in Room 2125 at the hour of2:09 p.m. to consider the above matter and reconvened
in regular open session at 2:22 p.m. No announcements were made.
(10:30 a.m."D")AUTHORIZE A JOINT AGREEMENT,ACCEPT THE BYRNE JUSTICE ASSISTANCE GRANT (JAG)
PROGRAM AWARD FOR $278,744 FROM THE U.S.DEPARTMENT OF JUSTICE,BUREAU OF JUSTICE,FOR THE CITY
AND COUNTY OF FRESNO,AND AUTHORIZE THE EXECUTION OF ALL RELATED DOCUMENTS
Police Grant Manager Garcia reviewed the issue and recommended approval, all as contained in the staff report as submitted.
Speaking to and in support of the issue were Barbara Hunt, 2475 S. Walnut; and ''Rusty'',homeless.
On motion of Councilmember Quintero,seconded by President Olivier, duly carried,RESOLVED,a joint agreement
between the City and County ofFresno to receive funds from the 2012 Edward Byrne Justice Assistance Grant (JAG)program hereby
authorized,and the Police Chief authorized to execute all related documents, by the following vote:
Ayes
Noes
Absent
Borgeas,Brand,Quintero, Xiong, Olivier
None
Baines,Westerlund
(10:45 a.m,"A")CONSIDER CHARTER REVIEW COMMITTEE RECOMMENDATIONS,ITEMS 1 - 55 -PRESIDENT
OLIVIER -COUNCIL ACTION ON ITEMS 5- 15 AS FOLLOWS:
#5 WHETHER THE CITY SHOULD REQUIRE A FISCAL IMPACT REPORT THAT INCLUDES A DETAILED FINANCIAL
ANALYSIS OF WAGE AND BENEFIT COSTS AND AN ACTUARIAL REPORT IF DEEMED NECESSARY BY THE CITY
MANAGER,FOR ALL MEMORANDUM OF UNDERSTANDING (MOD)LABOR AGREEMENTS
#6 WHETHER THE COUNCIL SHOULD AFFIRM,BY MAJORITY VOTE, THE HIRING OF THE CITY MANAGER AND
HIS/HER COMPENSATION CONTRACT,ASSUMING REASONABLE AFFIRMATION NOT BE WITHHELD
#7 WHETHER THE CHARTER CLEARLY IDENTIFIES THE JURISDICTIONAL AUTHORITY TO ORGANIZE AND
STRUCTURE ADMINISTRATIVE DEPARTMENTS LIES WITH THE MAYOR,SUBJECT TO COUNCIL CONFIRMATION
#8 WHETHER THE CHARTER SHOULD REQUIRE ANNUAL BUDGETS TO BE IN A TWO (2)YEAR FORMAT AND ALSO
INCLUDE EXTENDED PROJECTIONS
#9 WHETHER THE MAYOR SHALL RELEASE THE PROPOSED BUDGET TO THE COUNCIL AT LEAST SIXTY (6) DAYS
RATHER THAN THIRTY (30) DAYS PRIOR TO THE BEGINNING OF EACH FISCAL YEAR (SECTION 1203)
#10 WHETHER THE MAYOR'S VETO POWERS SHOULD EXTEND TO ALL LEGISLATIVE LAND USE DECISIONS
(SECTION 605( c) (2)
#11 WHETHER THE MAYOR SHOULD HAVE VETO AUTHORITY OVER THE DECISIONS OF THE CIVIL SERVICE
BOARD (SECTION 1002)
#12 WHETHER A SEPARATE ENTITY INSTEAD OF THE COUNCIL SHOULD ESTABLISH COUNCIL AND MAYOR
COMPENSATION (SECTION 308)
#13 WHETHER A PROVISION SHOULD BE INCLUDED IN THE CHARTER,AS A COUNTERPART TO SECTION 706,
THAT WOULD PROVIDE THAT THE MAYOR,CITY MANAGER AND STAFF SHALL NOT INTERFERE WITH THE
EXECUTION BY THE CITY COUNCIL AND OF ITS LEGISLATIVE POWERS AND DUTIES (RELATED TO SECTION 500
ETSEQ.)
#14 WHETHER A PROVISION SHOULD BE INCLUDED IN THE CHARTER THAT INFORMATION REQUESTS BY
COUNCIL BE RESPONDED TO BY STAFF IN A TIMELY FASHION RELATIVE TO THE TIME SENSITIVITY OF THE
SUBJECT MATTER AND THAT THE RESPONSE BE SUFFICIENTLY DETAILED TO PROVIDE AN ADEQUATE ANSWER
#15 WHETHER COUNCIL SHOULD HAVE THE EXCLUSIVE AUTHORITY TO APPOINT AND REMOVE THEIR
RESPECTIVE COUNCIL ASSISTANTS (SECTION 500)
159-124 5/3/12
Councilmember Westerlund arrived at 2:29 p.m.President Olivier opened public comment on Items #5 through #15.
Barbara Hunt, 2475 S. Walnut, and ''Rusty'',Districts 1 through 7, spoke to the importance of the Charter,to Charter
amendments,and to the high speed rail project.
#5 WHETHER THE CITY SHOULD REQUIRE A FISCAL IMPACT REPORT THAT INCLUDES A DETAILED FINANCIAL
ANALYSIS OF WAGE AND BENEFIT COSTS AND AN ACTUARIAL REPORT IF DEEMED NECESSARY BY THE CITY
MANAGER,FOR ALL MEMORANDUM OF UNDERSTANDING (MOD)LABOR AGREEMENTS
Councilmember Borgeas noted the Charter Review Committee (CRC)stated this was a policy issue and already addressed in
the Labor Management Act. Upon Councilmember Borgeas'request ChiefAssistant City Attorney Hale expanded on the memo from
City Attorney Sanchez addressing powers and authorities of the Council to establish supermajority votes and binding future Councils.
Upon question Councilmember Brand stated he felt Council should vote on each item, and as to this issue stated he agreed it
was already addressed in existing policy, it did not rise to the Charter level, and made a motion to not move this forward.
Councilmember Westerlund seconded the motion and agreed Council needed to take a vote on each item to affirmatively say 'yes'or
'no'to further Charter consideration.
On motion of Councilmember Brand,seconded by Councilmember Westerlund,duly carried,RESOLVED,Item #5 dropped
from further Charter ballot consideration,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand, Quintero,Westerlund,Xiong,Olivier
None
Baines
#6 WHETHER THE COUNCIL SHOULD AFFIRM,BY MAJORITY VOTE, THE HIRING OF THE CITY MANAGER AND
HIS/HER COMPENSATION CONTRACT,ASSUMING REASONABLE AFFIRMATION NOT BE WITHHELD
Councilmember Brand stated this item did not rise to the level of ballot consideration and made a motion to drop it,which
motion was seconded by President Olivier.Councilmember Borgeas stated he had similar inclinations but was hoping to at least
discuss the issue,whereupon discussion ensued among Councilmembers Borgeas, Brand, City Manager Scott and Acting President
Xiong on Council having this authority with the City Controller and what the rationale was for not having that same authority with the
City Manager,the Strong Mayor Form of Government working well,if Council should at least affirm the City Manager's
compensation,the difficulties in hiring a City Manager/good candidates being opposed to go through such a public process and vote,
Council making affirmations in closed session, the issue/question being if Mayors in this form of government should have to go
through such a process with their key appointments,(6 -0)and Council's affirmation with the Controller appointment being more
of a formality.Councilmember Westerlund stated the CRC unanimously agreed this was unnecessary and he did not feel it was worth
the cost ofputting it on the ballot.
On motion of Councilmember Brand,seconded by President Olivier, duly carried,RESOLVED,Item #6 dropped from
further Charter ballot consideration,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand, Quintero,Westerlund,Xiong,Olivier
None
Baines
#7 WHETHER THE CHARTER CLEARLY IDENTIFIES THE JURISDICTIONAL AUTHORITY TO ORGANIZE AND
STRUCTURE ADMINISTRATIVE DEPARTMENTS LIES WITH THE MAYOR,SUBJECT TO COUNCIL CONFIRMATION
Councilmember Brand stated this issue was discussed for about two years and was never clear to anyone one way or the other
and would not be any clearer to the public and made a motion to drop it, which motion was seconded by Acting President Xiong.
Councilmember Borgeas stated the issue needed to be resolved precisely because there was ambiguity,and spoke to the uncertainty
that was expressed in the past on whether the Mayor could create administrative departments (DCR).
159-125 5/3/12
City Manager Scott stated this was the only item he and the Mayor put on this list,clarified they were not "hung up" on the
idea that the Charter had to be amended but felt there needed to be some philosophical understanding among everyone,and stated the
issue was the need for the executive branch to have the primacy role as it relates to organizing staff,elaborating on his comments
throughout.Councilmember Borgeas agreed and stated he felt this was Charter worthy as it made no sense the way it was written,and
made a motion to accept the CRC's recommendation.President Olivier noted a motion was already on the floor,upon question of
Councilmember Borgeas Councilmember Brand stated the problem with placing this on the ballot was cost and how to tie ballot issues
together but acknowledged this was a worthwhile subject to discuss further and withdrew his motion on the floor.Councilmember
Borgeas made a motion to move this item into the Charter hopper for further ballot discussion given the jurisdictional ambiguities and
past fights, and the motion was seconded by Councilmember Brand.
Councilmember Westerlund agreed this was an important issue but stated Council was not going to clear up all the
ambiguities in the Charter at this time, and stressed cost was a factor right now and that was why he asked the City Attorney for the
criteria for stringing or not stringing all the ballot issues together. Upon question Chief Assistant City Attorney Hale stated his office
researched the issue but had not finalized the response and advised the conclusion was that multiple Charter amendments,even though
they may not be related to each other, could be grouped together in terms of one question.Councilmember Westerlund stated three or
four items had already moved forward and he was concerned about the cost and spending more time discussing these issues again
when there may be no money to place even one item on the ballot, and relative to this item acknowledged there was some ambiguity
there but he felt everyone could come to an understanding and suggested adopting a policy resolution laying out the jurisdictional
authority,stated while he has been on the Council he could not recall this coming up directly and being a big enough issue to have a
fight or debate over, and stated at the end ofthe day the City Manager and Mayor were the executive branch and it was incumbent on
them to make organizational/structural recommendations and he would not support the motion.Acting President Xiong agreed with
Councilmember Westerlund and stated this was a policy issue for future discussion.
A motion of Councilmember Borgeas,seconded by Councilmember Brand, to move Item #7 into the hopper for further
Charter ballot consideration failed, by the following vote:
Ayes
Noes
Absent
Borgeas,Brand
Quintero,Westerlund,Xiong,Olivier
Baines
#8 WHETHER THE CHARTER SHOULD REQUIRE ANNUAL BUDGETS TO BE IN A TWO (2)YEAR FORMAT AND ALSO
INCLUDE EXTENDED PROJECTIONS
On motion of Councilmember Borgeas,seconded by Councilmember Brand,duly carried,RESOLVED,Item #8 dropped
from further Charter ballot consideration,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand,Quintero,Westerlund,Xiong,Olivier
None
Baines
#9 WHETHER THE MAYOR SHALL RELEASE THE PROPOSED BUDGET TO THE COUNCIL AT LEAST SIXTY (6) DAYS
RATHER THAN THIRTY (30) DAYS PRIOR TO THE BEGINNING OF EACH FISCAL YEAR (SECTION 1203)
On motion of Councilmember Brand,seconded by Councilmember Borgeas,duly carried,RESOLVED,Item #9 dropped
from further Charter ballot consideration,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand
Quintero,Westerlund,Xiong,Olivier
Baines
#10 WHETHER THE MAYOR'S VETO POWERS SHOULD EXTEND TO ALL LEGISLATIVE LAND USE DECISIONS
(SECTION 605( c) (2)
Councilmember Borgeas stated this item was put forth to have an intellectual exercise/discussion on the rationale for
curtailing the Mayor's powers and stated while going through the process he spoke with virtually everyone and was reminded of the
number of checks and balances there were in the process and he felt with the many safeguards in place this did not seem important.
159-126 5/3/12
On motion of Councilmember Brand, seconded by Acting President Xiong, duly carried, RESOLVED,Item #10 dropped
from further Charter ballot consideration, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
#11 WHETHER THE MAYOR SHOULD HAVE VETO AUTHORITY OVER THE DECISIONS OF THE CIVIL SERVICE
BOARD (SECTION 1002)
City Manager Scott stated for the record Mayor Swearengin was not seeking approval of this item.Councilmember Borgeas
spoke to a scenario where the City Manager terminates an employee for non-performance, the matter is reviewed by the Civil Service
Board (CSB), and the CSB decides the employee should be rehired, and stated the question was if the City Manager should be bound
by the decision of the CSB if he/she does not want to bring the employee back. City Manager Scott stated every once in awhile
something will happen when it is clear an employee should not be brought back after being directed to do so, and stated there was a lot
of discussion on this issue by the Charter Review Committee and staff:with all best efforts everyone involved just could not word
something that was narrow in focus that could be used, and as a result of that the group eventually gave up and felt it was best to move
on.Councilmember Brand stated he felt this matter was worthy of an intellectual discussion, there was clearly a financial impact on,
and liability to, the City in certain cases where offending employees were brought back and continued to offend and brought on
additional lawsuits, stated to not draw negative attention he felt it would be in the best interest of the City to not move this matter to
the next level and leave it as is, and made a motion to drop the item from future ballot consideration, which was seconded by
Councilmember Borgeas. Discussion ensued on the CSB having the final decision,ifMr.Scott felt the City Manager should have the
authority to reject the CSB's decision if he/she feels an employee should not come back,if there was a law/rule where the CSB
decision trumps the City Manager's decision, litigation being a recourse for the City, creation of the CSB/state law/ability to change
CSB rules,if there was any requirement for a board to review dismissals/reprimands,/disciplinary actions that the CSB reviews, and
the amount of research/time/work it would take to move this matter to the next level, with Mr.Scott, Personnel Services Director
Bond and Chief Assistant City Attorney Hale (whose microphone was not working/responses were not recorded)
responding/clarifying issues throughout.
On motion ofCouncilmember Brand, seconded by Councilmember Borgeas, du1ycarried, RESOLVED,Item #11 dropped
from further Charter ballot consideration, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
#12 WHETHER A SEPARATE ENTITY INSTEAD OF THE COUNCIL SHOULD ESTABLISH COUNCIL AND MAYOR
COMPENSATION (SECTION 308)
Councilmember Borgeas stated it did not seem right that the Council should be in charge of their own salary, stated the last
increase was not popular with the public and the perception was the fox guarding the hen house, and questioned if maybe the Civil
Service Board or some third entity with objective criteria to review Council/Mayor salaries every couple of years would be a better
scenario.
Councilmember Westerlund made a motion to drop this item and not move it into the hopper, which motion was seconded by
Councilmember Brand.Councilmember Westerlund advised there was a compensation commission in the past which was charged
with looking at whether salary increases should or should not happen and that commission failed each year to take up the matter and
the charge was eventually taken away from them, elaborated on what transpired the last two times Council dealt with the salary
increase issue, and added tying salaries to something was a cowardly way for pay raises, he felt elected officials should come up with
the intestinal fortitude to say when pay raises are warranted/necessary, and he felt 2, 3 or 4% increases would be appropriate in the
future when the city's environment is correct, with Councilmember Brand concurring.
On motion of Councilmember Westerlund, seconded by Councilmember Brand, duly carried, RESOLVED,Item #12
dropped from further Charter ballot consideration, by the following vote:
159-127 5/3/12
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
#13 WHETHER A PROVISION SHOULD BE INCLUDED IN THE CHARTER, AS A COUNTERPART TO SECTION 706,
THAT WOULD PROVIDE THAT THE MAYOR, CITY MANAGER AND STAFF SHALL NOT INTERFERE WITH THE
EXECUTION BY THE CITY COUNCIL AND OF ITS LEGISLATIVE POWERS AND DUTIES (RELATED TO SECTION 500
ET SEQ.)
(7 -0)Councilmember Borgeas stated every Charter he reviewed in California and beyond had the equivalent of Section
706, questioned why there was no counterpart that individuals shall not interfere in the legislative practices of the Council and if
Council wanted that balance ofpower, stated about three years ago this was a very "ripe and powerful"problem because of the access
to information when there were different folks in charge, and stated that kind of set the tone for the question of why the City Manager
had a non-interference clause when Council did not and if a counterpart should be created.
Councilmember Brand made a motion to drop this item from further consideration.Councilmember Westerlund seconded
the motion and responded to Councilmember Borgeas'question stating this was part of the foundation of our democracy, he did not
see how the Mayor/City Manager/staff could not interfere as they have to inform Council of the position on the executive side, and
Council has to deal with the stresses, the lobbying, and the information to come to conclusions based on that information and further
elaborated. Discussion ensued among Councilmembers Borgeas, Westerlund and Xiong on interpretation of Section 706, the
withholding of information being interference in Council's ability to legislate, and this being a relevant issue for discussion.
On motion of Councilmember Brand, seconded by Councilmember Westerlund, duly carried, RESOLVED,Item #13
dropped from further Charter ballot consideration, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Quintero, Westerlund, Xiong, Olivier
None
Baines
#14 WHETHER A PROVISION SHOULD BE INCLUDED IN THE CHARTER THAT INFORMATION REQUESTS BY
COUNCIL BE RESPONDED TO BY STAFF IN A TIMELY FASHION RELATIVE TO THE TIME SENSITIVITY OF THE
SUBJECT MATTER AND THAT THE RESPONSE BE SUFFICIENTLY DETAILED TO PROVIDE AN ADEQUATE ANSWER
Councilmember Borgeas stated information was the lifeblood of a legislative body and Council should have the ability to
articulate this in this fashion, and clarified this was not to penalize city managers and made a motion to place Item #14 in the Charter
hopper, which motion was seconded by Acting President Xiong.
Councilmembers Westerlund and Brand presented questions and comments relative to why the CRC felt this was
unnecessary as a Charter provision, support for limitations on what information is asked for and how it is asked for, the City
Manager's duty and responsibility to make sure staff is prioritizing and getting the work done,acknowledgment of challenges and this
concept being understood,staff's work and priorities, how "timely" can be defined, why Councilmember Borgeas felt this should
move forward, and support for moving this forward only for further discussion but the issue not rising to Charter level at the end, with
City Manager Scott and Councilmember Borgeas responding throughout.
On motion of Councilmember Borgeas, seconded by Acting President Xiong, duly carried, RESOLVED,Item #14 hereby
placed into the hopper for future ballot consideration, by the following vote:
Ayes
Noes
Absent
Borgeas, Brand, Westerlund, Xiong, Olivier
Quintero
Baines
#15 WHETHER COUNCIL SHOULD HAVE THE EXCLUSIVE AUTHORITY TO APPOINT AND REMOVE THEIR
RESPECTIVE COUNCIL ASSISTANTS (SECTION 500)
159-128 5/3/12
Councilmember Borgeas stated it was not true that Council members had jurisdiction over their respective Council assistants
and clarified Council had the ability to hire and fire only one staff member -- their Chief of Staff --and the City Manager had
administrative authority over any subsequent hire(s),and spoke to the history of the issue, stated this was a housekeeping matter and
very small but he felt everyone would agree it had significance and that Council members should be in charge of their own office, and
made a motion to place Item #15 in the Charter hopper,which motion was seconded by Acting President Xiong.
City Manager Scott stated he supported the CRC on this,advised as a practical matter he did not interview individuals that
Council was looking to hire as he trusted in Council to do that right, he was surprised to find out that past city manager's did interview
council assistant candidates,and stated the only thing he was interested in was the termination burden placed on Council and Council
having to ensure that their staff is following the same administrative regulations that all other city employees follow.
Councilmembers Westerlund,Quintero and Mr.Scott responded to questions and comments of President Olivier relative to
whether any past Council member had been thwarted in the hiring/firing of their staff council budgets and if members had the ability
to pay one assistant $100,000 a year or five assistants $20,000 a year, and non-support for the motion as precedent has shown respect
by the administration.
A motion of Councilmember Borgeas,seconded by Acting President Xiong to move Item #15 into the hopper for further
Charter ballot consideration failed, by the following tie vote:
Ayes
Noes
Absent
Borgeas,Brand,Xiong
Quintero,Westerlund,Olivier
Baines
Upon question and request of Councilmember Borgeas Chief Assistant City Attorney Hale stated it would be appropriate to
bring this item back for action by a full Council and President Olivier stated he would include Item #15 for a re-vote at the next
meeting.
UNSCHEDULED ORAL COMMUNICATIONS
Barbara Hunt spoke to (1) city issues she will address when she is elected mayor, and (2) funding for southwest Fresno.
"Rusty" spoke to high speed rail issues.
ADJOURNMENT
There being no further business to bring before the City Council,the hour of 4:08 p.m.having arrived and hearing no
objection,President Olivier declared the meeting adjourned.
Approved on the day of --",2012.
__________________---:ATTEST:_----::-:::-:-----=----=--=--_--,------,----_-=:---=::--::--_
Clinton Olivier,Council President Yolanda Salazar,Assistant City Clerk
159-129 5/3/12
UNOFFICIAL COPY
Fresno, California April 19, 2012
Scheduled joint meeting of the City of Fresno Cultural Arts Properties,Inc. (COFCAP) and the City Council, Council
Chamber, City Hall.
Present: Lee Brand
Larry Westerlund
Andreas Borgeas
Sal Quintero
Blong Xiong
Clint Olivier
Councilmember
Councilmember
Councilmember
Councilmember
Councilmember
COFCAP Member (Council President)
Absent: Ashley Swearengin
Oliver Baines
COFCAP Member (Mayor)
COFCAP Member (Successor Agency Chair)
Mark Scott, City Manager
Bruce Rudd,Assistant City Manager
Jim Sanchez,Assistant City Attorney
Yvonne Spence, City Clerk
Yolanda Salazar,Assistant City Clerk
APPROVE AGENDA:
(9:30 A.M.)[changed from 3:15 p.m.]JOINT MEETING OF THE CITY OF FRESNO CULTURAL ARTS PROPERTIES
CORPORATION (COFCAP)AND CITY COUNCIL
('A')RESOLUTION -FILLING THE VACANT POSITION ON THE COFCAP BOARD OF DIRECTORS WITH THE CHAIR
OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY (City action)
-AND-
('B')CONSIDER DOCUMENTS PERTAINING TO A PROPOSED 69-UNIT MIXED-USE RESIDENTIAL PROJECT
('PROJECT')LOCATED AT FULTON AND CALAVERAS STREETS
#1 APPROVE A PURCHASE AND SALE AGREEMENT BETWEEN THE COFCAP AND THE CITY FOR THE SALE OF 2.12
ACRES OF PROPERTY TO THE CITY (Joint action)
#2 APPROVE A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY AND FFDA PROPERTIES,LLC,
FOR DEVELOPMENT OF THE PROJECT (City action)
#3 APPROVE THE FIRST AMENDMENT TO"THE MASTER LEASE BETWEEN THE COFCAP AND THE CITY (Joint action)
City Clerk Spence advised both Items "A" and "B" were being continued to April 26, 2012, at 9:30 a.m.Councilmember
Westerlund added Item 'B'was the next step of the RFP/OPA that was entered into for the Metropolitan Museum properties and was
being continued because it was not possible to get a staff report prepared in a timely fashion working with all the stakeholders.
On motion ofCouncilmember Westerlund, seconded by Acting President Xiong, duly carried,RESOLVED,the AGENDA
hereby approved,as amended,by the following vote:
Ayes
Noes
Absent
Borgeas,Brand, Quintero, Westerlund, Xiong Olivier
None
Baines
Approved on the day of ---',2012.
Yolanda Salazar,Assistant City ClerkClint Olivier, COFCAP Member/Council President
__-::----:-_-,--------,----'ATTEST:----,-----,-...,.--,-_
COFCAP-15 4/19/12
This page intentionally left blank.
UNOFFICIAL COPY
Fresno,California April 26, 2012
The City of Fresno Cultural Arts Properties,Inc.(COFCAP)met in joint session with the City Council at the hour of 10:15
a.m. in the Council Chamber,City Hall, on the day above written.
Present:
Absent:
Lee Brand
Larry Westerlund
Oliver Baines
Sal Quintero
Blong Xiong
Clint Olivier
Ashley Swearengin
Andreas Borgeas
COFCAP Member
COFCAP Member
Councilmember
Councilmember
Councilmember
Council President
Mayor/COFCAP Member
Councilmember
Mark Scott, City Manager
Bruce Rudd,Assistant City Manager
Jim Sanchez,Assistant City Attorney
Yvonne Spence,City Clerk
Yolanda Salazar,Assistant City Clerk
APPROVE AGENDA:
(9:30 A.M.)JOINT MEETING WITH THE CITY COUNCIL
('A')RESOLUTION -FILLING THE VACANT POSITION ON THE COFCAP BOARD OF DIRECTORS WITH THE CHAIR
OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY (City action)
-AND-
('B')CONSIDER DOCUMENTS PERTAINING TO A PROPOSED 69-UNIT MIXED-USE RESIDENTIAL PROJECT
('PROJECT')LOCATED AT FULTON AND CALAVERAS STREETS
#1 APPROVE A PURCHASE AND SALE AGREEMENT BETWEEN THE COFCAP AND THE CITY FOR THE SALE OF 2.12
ACRES OF PROPERTY TO THE CITY (Joint action)
#2 APPROVE A DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY AND FFDA PROPERTIES,LLC,
FOR DEVELOPMENT OF THE PROJECT (City action)
#3 APPROVE THE FIRST AMENDMENT TO THE MASTER LEASE BETWEEN THE COFCAP AND THE CITY (Joint action)
City Clerk Spence advised staff was removing both items from the agenda.Councilmember Westerlund stated he understood
why Item "B"was being removed,relative to "A"stated when the RDA went away so did the representative on the COFCAP and the
position needed to be filled by the Successor Agency Chair,and upon his question City Manager Scott stated he had no objection to
Council taking action on "A".
On motion ofCouncilmember Westerlund,seconded by Councilmember Brand,duly carried,RESOLVED,the AGENDA
hereby approved,as amended,by the following vote:
Ayes
Noes
Absent
Baines,Brand,Quintero,Westerlund,Xiong Olivier
None
Borgeas
RECESS -10:18 A.M.-10:22 A.M.
COFCAP-16 4/26/12
(~:30 A.M.)JOINT MEETING WITH THE CITY COUNCIL
Councilmember Brand left the meeting at 10:22 a.m.
('A')RESOLUTION NO. 2012-73 - FILLING THE VACANT POSITION ON THE COFCAP BOARD OF DIRECTORS WITH
THE CHAIR OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY (City action)
City Attorney Sanchez stated this was a procedural housekeeping step to have the chair of the Successor Agency serve on the
COFCAP Board as opposed to what had previously been the Chair of the Redevelopment Agency.
Harley Turner presented questions relative to the Successor Agency (who the agency was and name of the agency), with
Councilmember Westerlund responding.
On motion of Councilmember Westerlund, seconded by Acting President Xiong, duly carried, RESOLVED, the above
entitled Resolution No. 2012-73 hereby adopted, by the following vote:
Ayes
Noes
Absent
Baines, Quintero, Westerlund, Xiong, Olivier
None
Borgeas, Brand
ADJOURNMENT
There being no further business to bring before the joint bodies, the hour of 10:25 a.m. having arrived and hearing no
objection, President Olivier declared the meeting adjourned.
Yolanda Salazar, Assistant City Clerk
___________-',2011.Approved on the _
..."....".-+-_--7\-::IH---hl----b!~~~=------.ATTEST:--------------------
COFCAP-17 4/26/12
CITYMANA ER ~~
DEPA
JERRY DYER,Chief of Police
Police Department
FROM:
May 17, 2012
City of
I!!!!!.,~~...~I~
APRIL30,2012rnE.g;~~~REPORT TO THE CI AGENDA ITEM NO.I A
COUNCIL MEETING 05/17/2012
APPROVED BY
BY:SHARON SHAFFER, Deputy Chief
Support Division
SUBJECT:AUTHORIZE ACCEPTANCE OF FISCAL YEAR 2011 CYCLE STATE HOMELAND
SECURITY FUNDS IN THE AMOUNT OF $180,000,SUBGRANTED FROM THE STATE
OF CALIFORNIA EMERGENCY MANAGEMENT AGENCY;ADOPT THE 69
th
AMENDMENT TO THE ANNUAL APPROPRIATIONS RESOLUTION (AAR) NO. 2011-133
APPROPRIATING $30,000 INTO THE FY2012 BUDGET, FOR THE FRESNO POLICE
DEPARTMENTS HOMELAND SECURITY GRANT PROGRAM. THE REMAINING FUNDS
WILL BE INCORPORATED IN THE FY2013 BUDGET.
RECOMMENDATIONS
It is recommended that the Council authorize the acceptance of fiscal year 2011 Cycle State Homeland
Security Grant program funds, for a total of $180,000.00, and approve the 69
th Amendment to AAR No. 2011-
133 to appropriate $30,000 into the FY2012 budget. The remaining funds will be incorporated in the FY2013
budget.
EXECUTIVE SUMMARY
The Fresno Police Department, through the 2011 cycle State Homeland Security Grant Program, has been
allocated $180,000.00 over a three year period for the purchase of equipment to support our first responders
and terrorism prevention efforts. The grant will fund the purchase of video security equipment to protect critical
infrastructure, and provide ballistic protection for the Special Weapons and Tactics (SWAT) team. In addition,
it will provide supplemental funding for employee salary to continue the Citizen Corps and Community
Emergency Response Team (C.E.R.T.) programs. There is no match requirement.
BACKGROUND
Following the September 11 terrorist attacks on the United States, the federal government established the
Department of Homeland Security (DHS) to manage the preparedness and prevention efforts of Federal, State
and Local agencies. DHS, through the California Emergency Management Administration (Ca EMA), provides
grant funding to state and local agencies to support prevention, preparedness, and response efforts focused
on large scale natural disasters or acts of terrorism.
Under the State Homeland Security Grant Program, only Operational Areas (OA's) are eligible to apply for
funding. Fresno defined its operational area as the County of Fresno and all of its encompassing jurisdictions.
In developing the grant application, OA's must consider the needs of local units of government and applicable
volunteer organizations.The OA's must coordinate with their cities and special districts to utilize these funds in
a manner that will benefit the OA as a whole. Beginning with the 2003 grant cycle, OA's had to appoint an
Anti-Terrorism Approval Body (Approval Authority). This Approval Authority has the final determination on OA
allocation of grant funds. The Approval Authority in Fresno County consists of the following individuals:
REPORT TO THE CITY COUNCIL
SHSGP2011
May 17, 2012
Page 2
The Approval Authority in Fresno County consists of the following individuals:
• County Public Health Officer or designee responsible for Emergency Medical Services
• County Fire Chief or Chief of Fire Authority
• Municipal Fire Chief (selected by the Operational Area Fire Chiefs)
• County Sheriff
•Chief of Police (selected by the Operational Area Police Chiefs)
• Others can participate, but they cannot be voting members of this body.
Based on these rules, the Operational Area Police Chiefs elected Fresno Police Chief Jerry Dyer to be their
representative to the Approval Authority. Allocations for grant spending are submitted by each agency to the
discipline lead who then presents the request to the Approval Authority for approval or denial of grant funds.
Prior to the submission of the Initial Spending Implementation Plan (ISIP) to the State, the Approval Authority
as a whole votes on the items to be included by each discipline. After local approval the ISIP is then submitted
to the State for review and final approval.
After discussion by the Approval Authority of the prioritized needs of the OA, the Approval Authority voted to
allocate $180,000 in funding to the City of Fresno. This grant funding will be used to enhance and support
several programs and units within the Department, including the Specialized Weapons And Tactics (SWAT)
team. The funding will provide supplemental salary and continue the Citizen Corps and Community
Emergency Response Team (C.E.R.T.) programs.
FISCAL IMPACT
There is no fiscal impact.
JPDISSlsc
0510112012
Attachment: 69
th Amendment to Annual Appropriation Resolution No. 2011-133.
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO
ADOPTING THE 69TH AMENDMENT TO THE ANNUAL APPROPRIATION
RESOLUTION NO.2011-133 APPROPRIATING $30,000 FOR THE
FRESNO POLICE DEPARTMENTS HOMELAND SECURITY GRANT
PROGRAM
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO:
THAT PART III of the Annual Appropriation Resolution No. 2011-133 be and is hereby amended
as follows:
TO:POLICE DEPARTMENT
Homeland Security
Increase/(Decrease)
$ 30,000
THAT account titles and numbers requiring adjustment by this Resolution are as follows:
Homeland Security
Revenues:
Account: 33401 State-Grant
Fund: 22040
Org Unit: 156263
Total Revenues
Appropriations:
Account: 57411 New Machinery &Equipment
Fund: 22040
Org Unit: 156263
Total Appropriations
$ 30,000
$30000
$30,000
$30000
THAT the purpose is to appropriate $30,000 for the Fresno Police Department's Homeland
Security Grant Program.
- 1 -
K:IUSERSIDOCSIRESOSIFY 12 AARI12 69th HSGlI.HJF.docx4/19/20121 :51:01 PM
CLERK'S CERTIFICATION
STATE OF CALIFORNIA }
COUNTY OF FRESNO } ss.
CITY OF FRESNO }
I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing Resolution was
adopted by the Council of the City of Fresno, California, at a regular meeting thereof, held on the
____Dayof ,2012
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:--------------------
Mayor Approval/No Return:_
Mayor Veto:_
Council Override Veto:_
YVONNE SPENCE, CMC
City Clerk
-2-
,2012
,2012
,2012
,2012
K:IUSERSIDOCSIRESOSIFY 12 AARIl2 69th HSGl UUF.docx4/19/20121:51:01 PM
City of
~~II!!!'~...~I~
rnK::Q;~~~REPORT TO THE CITY COUNCIL
May 17,2012
FROM:JERRY P. DYER, Chief of Police
Police Department
KEITH L. FOSTER, Deputy Chief of Police
Investigative Services Division - Police Department
DEPAR
CITYMANAG~~
BY:RONALD W. GRIMM, Sergeant
Patrol Division - Police Department
SUBJECT:APPROVE A FINDING OF EXEMPTION PURSUANT TO SECTION 15061(b)(3) (GENERAL RULE
EXEMPTION) OF THE CALIFORNIA ENVIRONMENTAL QUALITY ACT GUIDELINES FOR THE
UPGRADES, REPAIRS, AND TECHNOLOGY ENHANCEMENTS TO THE POLICE DEPARTMENTS
MOBILE COMMAND CENTER (MCC).
AWARD A CONTRACT TO PUBLIC SAFETY INNOVATIONS, INC., OF GOLD RIVER,CALIFORNIA TO
PROVIDE UPGRADES, REPAIRS, AND TECHNOLOGY ENHANCEMENTS TO THE POLICE
DEPARTMENTS MOBILE COMMAND CENTER (MCC) IN THE AMOUNT OF $168,400, (BID FILE NO.
3115). FUNDING PROVIDED FROM THE U.S. DEPARTMENT OF HOMELAND SECURITY THROUGH
THE 2007 PUBLIC SAFETY INTEROPERABLE COMMUNICATIONS (PSIC) GRANT.
RECOMMENDATIONS
Staff recommends the following:
1. Adopt a finding of exemption pursuant to Section 15061(b)(3) (General Rule Exemption) of the California
Environmental Quality Act (CEQA) guidelines for the upgrades, repairs, and technology enhancements to the Police
Department's Mobile Command Center.
2. Authorize the Chief of Police to enter into a contract with Public Safety Innovations, Inc. to provide upgrades, repairs,
and technology enhancements to the Police Department's Mobile Command Center.
EXECUTIVE SUMMARY
The Police Department is seeking to award a contract to Public Safety Innovations, Inc. to provide much needed
upgrades, repairs, and technology enhancements to the Police Department's Mobile Command Center. The primary
focus of this project is to provide an interoperable communications capability to the MCC that is currently unavailable.
The department's current MCC lacks the modern technology needed for rapid interoperability with allied first responders
(law, fire, and EMS), as well as state, federal and military responders to a critical incident. PSIC grant funding has been
made available to enhance technology onboard our exlstlnq Mobile Command Center, thereby avoiding the need to
purchase a new communications vehicle.
BACKGROUND
In 2007, Council approved the application and subsequent award of grant funding from the Public Safety Interoperable
Communications (PSIC) grant, administered through the U.S. Department of Homeland Security.Approximately
$1,800,000 in PSIC funds were designated for projects within the city and county of Fresno to enhance interoperable
communications projects originally funded through the 2004 Urban Areas Security Initiatives (UASI) grant. The
enhancements to the Police Department's Mobile Command Center are being financed through this portion of the PSIC
grant funding, in the amount of $370,000.
Report to Council
Mobile Command Center Upgrades
May 17, 2012
Page 2
In 2009, Council authorized the Police Department to enter into a contract with RCC Consultants, Inc., to act as the
Project Management Office for interoperable communications projects within the city and county of Fresno, including the
enhancements, repairs, and upgrades to the Mobile Command Center.
The Police Department, working with the Purchasing Division and RCC Consultants, Inc., prepared plans and
specifications for this project. The advertisement date of this project (Two-Phase Bid Process) was 11/16/2011. The date
of public bid opening was 03/29/2012. The bids will expire 90 days after the bid opening, 06/27/2012. There was one bid
received for this project (although three companies were pre-qualified to bid on this project during Phase I, only one
company, Public Safety Innovations, Inc. submitted their bid within the allotted time).
Public Safety Innovations, Inc. was the sole responsive and responsible bidder, and submitted a bid in the amount of
$379,600. While $370,000 in federal grant funding was made available for this project, approximately $265,000 is actually
available for this contract (approximately $105,000 was used for consultant fees, interdepartmental costs to the
Purchasing Division and City Attorney, and equipment purchased outside this contract to be installed during this upgrade).
The submitted bid of $379,600 is 43% above the budget allocation of $265,000. The intended award amount of $168,400
is 36% under the original project budget allocation of $265,000.
During the contract award, the bid specifications allow the City to delete specific line items in the bid submitted by Public
Safety Innovations, Inc. The Police Department and RCC Consulting, Inc. reviewed the submitted bid and deleted a total
of $211,200 from the scope of work, leaving a total contract price of $168,400.
The Council may award a contract in the amount of $168,400 to Public Safety Innovations, Inc., and the project will be
completed within 180 days from the date of the Notice to Proceed.
The Council may reject the bid and modified contract price. If the bid and modified contract price are rejected, the
remainder of the federal grant funding will be forfeited, and the Police Department may be liable for expenditures already
submitted for reimbursement.
ENVIRONMENTAL FINDING
Staff has performed a preliminary environmental assessment of this project and has determined that it falls within the
General Rules Exemption set forth in CEQA Guidelines, Section 15061(b)(3), which states:
"The activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a
significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in
question may have a significant effect on the environment, the activity is not subject to CEQA".
"Significant effect on the environment" is defined as a substantial, or potentially substantial, adverse change in any of the
physical conditions within the area affected by the project, including land, air, water, minerals, flora, fauna, ambient noise,
and objects of historic or aesthetic significance. Since the Mobile Command Center is a towed vehicle without a power
source of its own, and the upgrades, repairs, and technology enhancements will either be internal to the vehicle or direct
replacements of existing equipment, there can be no "significant effect on the environment" as defined by CEQA.
FISCAL IMPACT
There is no fiscal impact to the general fund. Funding for this project is provided by the 2007 Public Safety Interoperable
Communications grant, which has already been awarded.
JPD:KLF/rwg
05/17/2012
Attachments:Fiscal Impact Statement & Bid Evaluation
EVALUATION OF BID PROPOSALS
FOR: MOBILE COMMAND CENTER UPGRADES
Page 1
BIDDER'S
Public Safety Innovation, Inc
2376 Gold Meadow Way
Gold River CA 95670
Bid File No. 3115
Bid Opening:3/29/2012
TOTAL NET BID AMOUNT
$379,600.00
Each bidder has agreed to allow the City ninety (90) days from date bids are opened to accept or reject
their bid proposal.Purchasing requests that you complete the following sections and return this bid
evaluation to the Purchasing Division at the latest by Wednesday,April 18. 2012,
5:00 P.M.
The Budget Allocation for this expenditure is $265,000. The bid price is 43%abovel6elew the Budget
Allocation.If the overage is greater than 10% or only one bid was received,give explanation:
Although three prospective bidders were prequalified to submit bids,only one of the three submittep
their bid within the allotted time. The second did not submit a bid at all,and the third submitted their bid
after the bid period closed (this bid was not opened and was returned to the vendor by the Purchasing
Department).
BACKGROUND OF PROJECT (To be completed by Evaluating Department/Division.Explain need for
project/equipment):
In 2002, the Fresno Police Department procured a new Mobile Command Center consisting ofa custom
38-foot 5th wheel trailer that serves as a standalone temporary command post used to respond tolarge
scale events and critical incidents.It provides workspace for MCC personnel as well as command staff,
operations staff,and technical support personnel as needed to support various operational scenarios.
The MCC was constructed by The Mattman Company of San Marcos, CA.
The original Mobile Command, Center, while well thought out for its time,lacked the interoperable
communications technology desperately needed in the post-9/11 environment.Incidents such as the
terrorist attacks on New York and Washington DC,hurricanes Katrina and Rita,and our own tragic
Minkler incident highlight the need for technology that allows all first responders to communicate in real
time regardless of the radio equipment being used by various agencies.
In 2007 the Police Department was awarded funding through the U.S.Department ofHomeland Security
and the U.S.Department of Commerce via the Public Safety Interoperable Communications (PS/C)
grant to improve interoperable communications among public safety agencies using disparate radio
systems.These agencies include all Law Enforcement,Fire and EMS providers in the Central San
Joaquin Valley. Three hundred and seventy thousand dollars ($370,000)was budgeted for material
repairs,modifications and technical upgrades to the Department's Mobile Command Center. The
technical upgrades would include radio equipment,computers,telephony,video and other technology
thatwould ensure interoperability among all first responders throughout the region,and would include
the ability to communicate with state,federal and military agencies as well.
K:IFORMSIEVALUATIONFORM
EVALUATION OF BID PROPOSALS
FOR:MOBILE COMMAND CENTER UPGRADES
Page 2
Bid File No. 3115
Bid Opening:3/29/2012
DEPARTMENT CONCLUSIONS AND RECOMMENDATION:
W Award a contract in the amount of $168,400 to Public Safety Innovation,Inc. as the
lowest responsive and responsible bidder.
Remarks:
This amount reflects the deletion of the following line items from the bid submitted by
Public Safety Innovation,Inc., as shown on the attached bid recap document:
Line 2:
Line 4:
Line 5e:
Line 6:
Line 8:
Repair of pneumatic extension mast ($7,200)
Removal of rear galley,conversion to operating position ($4,500)
Radio system ($175,000)
Communications Systems Training ($19,500)
Expense allowance for vendor site visit ($5,000)
U Reject all bids.Reason:
Department Head Approval
~Approve Dept.Recommendation
U Disapprove
U See Attachment
FINANCE DEPARTMENT
l:'J Approve Finance/Purchasing Recommendation
U Disapprove
CITY MANAGER
K:IFORMSIEVALUATIONFORM
FISCAL IMPACT STATEMENT
PROGRAM:
TOTAL OR ANNUALIZED
RECOMMENDATION CURRENT COST
Direct Cost $265.000 $265,000
Indirect Cost Q Q
TOTAL COST $265,000 $265,000
Additional
Revenue or Savings
Generated $265,000**$265,000**
Net City Cost Q Q
Amount Budgeted
(If none budgeted,
identify source)$265,000 $265,000
**Total expenditures for this project are reimbursed through the California Emergency
Management Agency (CaIEMA)with Public Safety Interoperable Communications (PSIC)
grant funds.
K:IFORMSIEVALUATIONFORM
CITYOF FRESNO
MOBILE COMMAND CENTER UPGRADE PROJECT
Bid File No. 3115
Public Safety Innovation
ITEM QUANTITY UNIT OF DESCRIPTION UNITS TOTAL UNITS TOTAL UNITS TOTALMEASURE
1 Lump Sum Repair and reinforcement of MCC roof Lump Sum $11,250.00 Lump Sum Lump Sum
2 Lump Sum Repair of pneumatic extension mast Lump Sum $7,200.00 Lump Sum Lump Sum
3 Lump Sum Conversion of forward storage area Lump Sum $17,750.00 Lump Sum Lump Sum
4 Lump Sum Removal of rear galley and coversion to operating position Lump Sum $4,500.00 Lump Sum Lump Sum
5 Lump Sum Total Communications Upgrades Consisting of Bid Items 5a through 5g below
5a Lump Sum TCP/IP Networking Lump Sum $42,450.00 Lump Sum Lump Sum
5b Lump Sum WAN Security Lump Sum $9,600.00 Lump Sum Lump Sum
5c Lump Sum Network Management Lump Sum $7,500.00 Lump Sum Lump Sum
5d Lump Sum Voice Telephony Service Lump Sum $32,000.00 Lump Sum Lump Sum
5e Lump Sum Radio System
Lump Sum $175,000.00 Lump Sum Lump Sum
5f Lump Sum Data Applications Lump Sum $13,000.00 Lump Sum
Lump Sum
5g Lump Sum Other Systems
Lump Sum $26,850.00 Lump Sum Lump Sum
6 Lump Sum Comuunication System Training Lump Sum $19,500.00 Lump Sum Lump Sum
7 Lump Sum Warranty and Support (1 Year)
Lump Sum $8,000.00 Lump Sum Lump Sum
8 Lump Sum
Expense Allowance for Work Progress Inspection Visits by City Lump Sum $5,000.00 Lump Sum $5,000.00 Lump Sum $5,000.00
Representatives
TOTAL NET BID AMOUNT
S 379,600.00 S 5,000.00 S 5,000.00
May 17,2012
AGENDA ITEM NO.I C
COUNCIL MEETING 5/17/12
APPR~V~'/jr
~"~~
DEPARTMENTDIRECTOR
FROM: PATRICK N. WIEMILLER, Director
Public Works Department
THROUGH: SCOTT KRAUTER, Assistant Director /:)
Public Works Department L7
BY: MARK M. JOHNSON, Public Works Manager ~
Public Works Department, Facilities and Major Projects Division
SUBJECT:APPROVE AN AGREEMENT WITH PRECISION CIVIL ENGINEERING (PCE), INC.
OF FRESNO, CALIFORNIA IN THE AMOUNT OF $61,350, WITH A CONTINGENCY
AMOUNT OF $6,000 FOR A TOTAL FEE OF $67,350 FOR THE DESIGN OF PLANS
AND GENERAL CONSTRUCTION CONTRACT DOCUMENTS FOR THE MEDIAN
ISLAND LANDSCAPE AND IRRIGATION PROJECT, AS WELL AS AUTHORIZATION
FOR THE PUBLIC WORKS DIRECTOR OR HIS DESIGNEE TO SIGN THE
AGREEMENT ON THE CITY'S BEHALF (CITYWIDE)
RECOMMENDATION
Staff recommends that the City Council approve an agreement with Precision Civil Engineering (PCE), Inc. of
Fresno, California in the amount of $61,350, with a contingency amount of $6,000 for a total fee of $67,350
for the design of plans and general construction contract documents for the Median Island Landscape and
Irrigation Project, as well as authorization for the Public Works Director Or his designee to sign the agreement
on the City's behalf.
EXECUTIVE SUMMARY )
/
The Agreement will allow PCE to design the Median Island Landscape and Irrigation Project to improve
existing median islands that have yet to develop landscape or irrigation. The project involves the design of
low volume irrigation systems with a low maintenance planting design consisting of trees planted on 50 foot
centers in existing medians. The first phase is proposing to improve eleven (11) existing median islands
throughout the city that have been constructed as a part of past development without landscape and
irrigation systems.
Funding for this project is included in the FY12 budget as Community Sanitation median island maintenance
operations funds.
BACKGROUND
The Public Works Department selected PCE in accordance with the City's qualification based selection
process, Administrative Order 6-19 to provide professional engineering and landscape architectural services
to complete the design of the project. Staff negotiated a fee of $61,350 for professional services to complete
for this phase of design of the project, bid support, and construction support. The agreement also includes an
REPORT TO THE CITY COUNCIL
Median Island and Landscape and Irrigation Project
May 17, 2012
Page 2
additional $6,000 (total amount will be $67,350) contingency to be used for any additional work outside of the
existing scope of services, and contingent on the Director's approval as set forth in the executed agreement.
The Median Island Landscape and Irrigation Project will enhance existing streetscapes by completing the
development of existing medians with landscape and irrigation systems. This project will also add the
benefits by completing gaps where median islands were installed but the landscaping was not a Condition of
Approval for adjacent developments.
The project involves the design of low volume sustainable irrigation systems with a low maintenance planting
design with tree planting at 50 foot on center at existing medians in accordance with AB 1881. The first
phase is proposing to improve the following median islands.
1. North FowlerAvenue between East Shields Avenue and East Fedora Avenue
2. East Shields Avenue between North FowlerAvenue and NorthTemperance Avenue
3. North Temperance Avenue between East Shields Avenue and Dakota Avenue
4. East Bullard Avenue between North ChestnutAvenue and North Willow Avenue
5. North Armstrong Avenue between East Inyo Street and North Burgan Avenue
6. North Clovis Avenue between East CaliforniaAvenue and East Church Avenue
7. East Jensen Avenue at SR 41
8. North BrawleyAvenue at West FountainWay
9. North BrawleyAvenue south of West Shaw Avenue
10. North Polk Avenue between West Herndon Avenue and West Warner Avenue
11. West Shields Avenue between North BrawleyAvenue and North Brunswick Avenue
The Public Works Department is requesting the approval of the Agreement with PCE and the authorization of
the Public Works Director or his designee to sign the agreement on the City's behalf. The agreement is for
the design and preparation of plans and specifications for construction of the Median Island Landscape and
Irrigation Project for a fee of $61,350 and a contingency amount not to exceed $6,000.00 for a total fee of
$67,350.
FISCAL IMPACT
There is no impact to the General Fund for the project. The Project's funding source is the Community
Sanitation Funds that were budgeted FY 2012 for median island maintenance operations funds. Additional
funding for median island operations was approved by Council in FY 2012 from a Public Utility service
funding shift. Although these landscapes will increase the City's inventory of irrigated landscapes, the use of
low flow irrigation and trees only landscape design is intended to minimize the impact to future maintenance
budgets but still provide a landscaped median.
Attachments:
-Fiscal Impact Statement
-Consultant Agreement
FISCAL IMPACT STATEMENT
PROGRAM:MEDIAN ISLAND LANDSCAPE AND IRRIGATION PROJECT
RECOMMENDATION CURRENT COST
Direct Cost $61 ,350.00
Indirect Costs*:$28,000.00
Contract management,
design coordination, etc.,
(estimated)
TOTAL COST $89,350.00
Additional
Revenue or Savings
Generated -0-
Net City Cost $89,350.00
Amount Budgeted
(If none budgeted,
identify source):$89,350.00
*Indirect cost consists of the following:
Project Management $20,000.00
Printing,Purchasing,& misc.$8,000.00
Total $28,000.00
There is no impact to the General Fund for the project. The Project's funding source
is the Community Sanitation Funds that were budgeted FY 2012 for median island
maintenance operations funds.Additional funding for median island operations was
approved by Council in FY 2012 from a Public Utility service funding shift. Although
these landscapes will increase the City's inventory of irrigated landscapes,the use
of low flow irrigation and trees only landscape design is intended to minimize the
impact to future maintenance budgets but still provide a landscaped median.
This page intentionally left blank.
AGREEMENT
CITY OF FRESNO,CALIFORNIA
CONSULTANT SERVICES
THIS AGREEMENT is made and entered into effective the day of May, 2012, by
and between the CITY OF FRESNO, a California municipal corporation'(hereinafter referred to
as "CITY"), and PRECISION CIVIL ENGINEERING, INC., A California Corporation (hereinafter
referred to as "CONSULTANT").
RECITALS
WHEREAS, CITY desires to obtain professional Landscape Architecture services for the
design of plans and general construction contract documents for Median Island Landscape and
Irrigation,hereinafter referred to as the "Project;" and
WHEREAS,CONSULTANT is engaged in the business of furnishing technical and
expert services as a Civil Engineer &Landscape Architect and hereby represents that it desires
to and is professionally and legally capable of performing the services called for by this
Agreement; and
WHEREAS,CONSULTANT acknowledges that this Agreement is subject to the
requirements of Fresno Municipal Code Section 4-107 and Administrative Order No. 6-19; and
WHEREAS, this Agreement will be administered for CITY by its Department of Public
Works Director (hereinafter referred to as "Director")or his/her designee.
AGREEMENT
NOW,THEREFORE,in consideration of the foregoing and of the covenants, conditions,
and promises hereinafter contained to be kept and performed by the respective parties, it is
mutually agreed as follows:
1. Scope of Services.CONSULTANT shall perform the services described herein
and in Exhibit A to complete the Project more fully described in Exhibit.A.and this shall
include all work incidental to, or necessary to perform, such services even though not
specifically described in Exhibit A.The services of CONSULTANT shall consist of five Parts as
described below. A separate Notice to Proceed will be issued for each of the aforementioned
Parts. By entry into this Agreement and upon CITY'S issuance of a written "Notice to Proceed,"
CITY contracts for the services in Part One.CONSULTANT shall not perform any other Part of
the Agreement, and this Agreement shall not be a contract for any other Part, until further
performance is authorized by CITY'S issuance of a written "Notice to Proceed." It shall,
however, remain CONSULTANTS offer to perform all remaining parts described herein. In the
event CONSULTANT performs services without CITY'S prior written authorization,
CONSULTANT will not be entitled to compensation for such services.
(a) Part One. Schematic Design Phase.
(1)CONSULTANT shall review the description of the Project set forth
in Exhibit A and consult with designated representatives of CITY to ascertain the
requirements of the Project.
(2)CONSULTANT shall conduct studies and investigations as
necessary to confirm requirements of design including, but not limited to,(i)consulting
with the various utility agencies, and (ii) obtaining all information and data from the
DPW 18.1/12-10-10
-1-
respective responsible CITY department/division that is available in CITY'S records and
is required by CONSULTANT in connection with the consulting services including,but
not limited to, maps, surveys, reports,information,restrictions and easements.
CONSULTANTshall notify CITY if a topographicsurveyis required.
(3) CONSULTANT shall provide a preliminary evaluation of the
Project taking into consideration CITY'S estimate of the cost of construction
("Construction Budget") of $800,000.00, including alternative approaches to design and
constructionof the Project.
(4) Based upon the mutually agreed upon Project requirements and
any adjustments authorized by CITY in the Construction Budget,CONSULTANT shall
design and prepare schematic design drawings and other documents for review,
modification,if required, and acceptance by CITY staff sufficient to show the concept
and scope of the proposed Project and the scale and relationship of Project
components.
(5) CONSULTANT shall submit a preliminary estimate of construction
cost for review and acceptance by CITY. As used herein, "constructioncost" means the
cost of construction under the general construction contract and does not include
CONSULTANTS compensation as herein provided. Such estimate shall include,and
shall separately state, the cost of any add or deduct alternatives,the cost of any work
which may be let on a segregated bid basis and any equipment or fixtures which may be
incorporated in or excluded from the general constructioncontract as may be necessary
to stay within the Construction BUdget.
(6) CONSULTANT shall make as many submittals as may be
necessary or desirable to obtain the acceptance by CITY and shall assist CITY in
applying for and obtaining from applicable public agencies any approval permit, or
waiver required by law, which assistance shall include, but not be limited to, making
Project information available to CITY.
(7) CONSULTANT may not rely upon any as-builts provided by CITY,
but shall investigate the existing conditions and ascertain the adequacy of such as-builts
for CONSULTANT'S design. CONSULTANT shall bring to CITY'S attention any
discrepancies in the as-builts that are discovered by CONSULTANT. CITY makes no
representations regarding any as-builts.
(8) Services shall be undertaken and completed in a sequence
assuring expeditious completion. All services shall be rendered and deliverables
submitted within 30 calendar days from the issuance of a Notice to Proceed for this Part
unless an extension of time is approved in writing by the Director.Re-submittals,as
necessary to obtain the acceptance by CITY, shall be submitted to CITY within 10
calendar days from receipt of CITY'S comments unlessan extension of time is approved
in writing by the Director.
(b) Part Two. Design Development Phase.After review and acceptance of
the schematicdesign phase and issuanceof a written Noticeto Proceed with this PartTwo:
(1) Based upon the accepted schematic design documents and the
Construction BUdget,including authorized revisions thereto, CONSULTANT shall
DPW 18.1/12-10-10
-2-
prepare for review and acceptance by CITY the design development documents
consistingof drawings and other documentsto fix and describe the size and characterof
the Project as necessary to show treatment of significant details. In addition,
CONSULTANT shall provide outline specifications of the work as to kinds of materials,
systems, and other such design elements as may be required.Such design
developmentdocuments and specificationsshall be subjectto reviewand acceptance by
CITY.
(2) CONSULTANT shall submit a revised estimate of construction
cost for review and acceptance by CITY. The revised estimate shall include,but shall
separately state, the cost of any add or deduct alternates,any work which may be let on
a segregated bid basis, and any furnishings, equipment or fixtures which may be
incorporated in or excluded from the general constructioncontract as maybe necessary
to staywithin the Construction Budget,includingauthorized revisionsthereto.
(3) In the event that the revised estimate of construction cost exceeds
the preliminary estimate of construction cost previously accepted,excluding therefrom
any add alternate, any work which may be let on a segregated bid basis and any
furnishing, equipment or fixtures which was identified in Part 1 as that which may be
excludedfrom the general construction contract, CITY shall have the option of accepting
or rejectingthe revised estimate and CONSULTANTshall, at no additionalcost to CITY,
make such design changes as may be necessary to reduce the revised estimateso that
it shall not exceed the preliminary estimate of construction cost previouslyaccepted by
CITY. CITY shall not increase the scope of the Project except by modification of this
Agreement which shall include an agreed upon increase in CONSULTANTS
compensation.
(4) CONSULTANT shall make as many submittals as may be
necessary or desirable to obtain the acceptance by CITY and shall assist CITY in
applying for and obtaining from applicable public agencies any approval,permit, or
waiver required by law, which assistance shall include, but not be limited to, making
Project information availableto CITY.
(5) Services shall be undertaken and completed in a sequence
assuring expeditious completion.All services shall be rendered and deliverables
submitted within 21 calendar days from the issuance of a Notice to Proceed for this Part
unless an extension of time is approved in writing by the Director.Re-submittals,as
necessary to obtain the acceptance by CITY, shall be submitted to CITY within 10
calendar days from receipt of CITY'S comments unless an extension of time is approved
in writing by the Director.
(c) Part Three.Construction Document Phase. After reviewand acceptance
of the design development phase and issuance of a written Notice to Proceed with this Part
Three:
(1) CONSULTANT shall prepare from the accepted design
development documents, detailed plans and specifications setting forth the complete
work to be done, and the materials,workmanship,finishes and equipment,fixtures,and
site work required. CONSULTANT shall also prepare necessary bidding information,
general and special conditions of the general construction contract,technical
specifications of the general construction contract, and the bid proposal and general
DPW 18.1/12-10-10
-3-
construction contract forms. Such documents shall be subject to the review and
acceptance by CITY. CONSULTANT shall cooperate with, assist and be responsive to
CITY'S Purchasing Manager in preparation of all documents including,without limitation,
slip-sheeting final documents for printing when requested. CITY'S Standard
Specifications must be.used by CONSULTANT where possible. Finaldrawingsshall be
drawn, printed or reproduced by a process providing a permanent record in black on
vellum,tracing cloth, polyester base film, or high quality bond copy.Bid, general
conditions,contract and bond document forms or formats regularly used by CITY shall
be used by CONSULTANT unless the Director determines they would be impractical for
this Project. CONSULTANTshall be responsiblefor assuring that the special conditions,
technical specifications and any other documents prepared by CONSULTANT are
consistentwith any documents regularly used by CITY that are usedfor this Project.
(2) Upon request of CITY, CONSULTANT shall provide the
calculations used to determine the general construction contract quantities;and
structuralcalculationsfor the purpose of obtaining any building permits.
(3) CONSULTANT shall make as many submittals as may be
necessary or desirable to obtain the acceptance by CITY and shall assist CITY in
applying for and obtaining from applicable public agencies any approval,permit,report,
statement,or waiver required by law, which assistance shall include,but not be limited
to, making Project information availableto CITY.
(4) CONSULTANT shall provide CITY with 2 sets of completed plans
and 2 sets of completed specifications for review and final acceptance by CITY.Should
the plans and specifications as submitted by CONSULTANT not be accepted by CITY,
CONSULTANT shall revise the plans and specifications as needed to obtain final
acceptanceat no additionalcost to CITY.
(5) After acceptance of final corrections,if any,CONSULTANT shall
provide CITY with one set of accepted reproducible tracings and bid documentsfor the
Project. In addition, CONSULTANT shall provide CITY with one complete set of
CAD/System disk files of drawings and complete disk files of specifications in the
followingformat: AutoCAD Civil 3D 2009.
(6) CONSULTANT shall submit a final estimate of construction cost
for review and acceptance by CITY. Such estimateshall be calculated as of the date all
general construction contract documents are delivered to CITY in final form ready for
reproduction and advertising. Such estimate shall include, but shall separatelystate, the
cost of any add or deduct alternates, any work which may be let on a segregated basis,
and any equipment, or fixtures which may be incorporated in or excluded from the
general construction contract.
(7) In the event that the final estimate of construction cost exceeds
the revised estimate of construction cost previously accepted, excluding therefrom any
add alternate, any work which may be let on a segregated bid basis and anyfurnishings,
equipment or fixtures which was identified in the final revised estimate in Part 2 as that
which may be excluded from the general construction contract, CITY shall have the
option of accepting or rejecting the final estimate. If CITY elects to reject the final
estimate, CONSULTANTshall at no additional cost to CITY, make such designchanges
DPW 18.1/12-10-10
-4-
as may be necessary to reduce the final estimate so that it shall not exceedthe revised
estimateof construction cost previouslyacceptedby CITY.
(8) Services shall be undertaken and completed in a sequence
assuring expeditious completion. All services shall be rendered and deliverables
submittedwithin 15 calendar days from the issuanceof a Notice to Proceed for this Part
unless an extension of time is approved in writing by the Director.Re-submittals,as
necessary to obtain the acceptance by CITY, shall be submitted to CITY within 10
calendar days from receipt of CITY'S commentsunless an extension of time is approved
in writing by the Director.
(d) Part Four. Bidding Phase.After review and acceptance of the
construction document phase and if CITY elects to proceed to bid, which shall constitute a
written Noticeto Proceedwith this Part Four:
(1) CONSULTANT shall assist .CITY in obtaining bids.
CONSULTANT shall not communicate with potential bidders regarding this Project
without the express prior written authorization of CITY'S Purchasing Manager.
(2) CONSULTANT shall, within 7 calendar days of any request by
CITY, expeditiously draft and promptly provide addendum as determined by CITY to be
reasonableor necessary for the bidding process.
(3) If the lowest responsible bid received for the general construction
contract exceeds by 10% or more the final estimate of construction cost previously
accepted by CITY, excluding therefrom any add alternate, any work which may be let on
a segregated bid basis and any furnishings,equipment or fixtures which are excluded
from the general construction contract, CONSULTANTshall, within 14 calendar days of
any request by CITY, revise the plans and specifications as may be necessaryto stay
within 10% of such final estimate of construction cost, at no additional cost to CITY
provided such bid is received within 180 calendar days after completion of services in
Section 1(c) of this Agreement.CONSULTANT shall also submit such revised plans and
specifications,together with a new final estimateof construction cost, to CITYfor review
and acceptance. This procedure, using the latestaccepted final estimateof construction
cost, shall, upon written notice to CONSULTANT from the Director, be repeated until an
acceptable bid is received that does not exceed the accepted final estimate of
construction cost by more that 10%.
(e) Part Five.Construction Phase and General Construction Contract
Administration.The construction phase will begin with the award of the general construction
contract,which shall constitute a written Noticeto Proceedwith this Part Five, andwill terminate
when a Notice of Completion is filed. Upon award of a general construction contract for the
Project and under the direction of the Director through CITY'S designated Construction
Managerfor the Project:.
(1) CONSULTANT shall attend the pre-construction conference and,
if called upon by CITY, act on CITY'S behalf in discussing the various aspects of the
.construction phase.
(2) CONSULTANT shall review and recommend in writing to CITY
acceptance or non-acceptance of shop drawings,equipment and material submittals of
DPW 18.1/12-10-10
-5-
the general construction contractor as required by the general construction contract and
applicable laws and regulations in a timely manner.The period for CONSULTANT
review shall be as specified in the general construction contract,except if such period is
not so specified,the period shall be as determined in the pre-construction conference as
mutually agreed upon by CITY,CONSULTANT and the general construction contractor.
(3)CONSULTANT shall, at intervals appropriate to the state of
construction,familiarize itself with the progress and quality of the work and determine in
general if the work is proceeding in accordance with the general construction contract
documents,and keep CITY informed of the progress of the work. In the event that
CONSULTANTS visit to the site results in the discovery of any defect or deficiencies in
the work of the general construction contractor,CONSULTANT shall immediately advise
CITY and document,in writing, the work CONSULTANT deems substandard,and make
recommendations where appropriate to reject any work not conforming to the intended
design or specifications.Based on CONSULTANTS best knowledge,information and
belief,CONSULTANT shall provide CITY a general written assurance that the work
covered by a payment application meets the standards in the general construction
contract. As to technical aspects,CONSULTANT shall provide a written judgment of the
acceptability of the work for payment applications and final acceptance,subject to
CITY'S right to overrule CONSULTANT.
(4) Upon written request by CITY,CONSULTANT shall render
interpretations of the general construction contract documents necessary for the proper
execution or progress of the work.
(5) Upon written request by CITY,CONSULTANT shall render written
recommendations on change orders, claims,disputes or other questions arising out of
the general construction contract, in a timely manner.Recommendations by
CONSULTANT in favor of a change order that is consequently accepted by CITY shall
constitute approval by CONSULTANT who shall then approve the change order in
writing.CONSULTANT shall not unreasonably withhold written approval in the event
CITY accepts a change order that CONSULTANT recommended to be rejected. In the
event of any technical disputes,CONSULTANT shall provide CITY with
CONSULTANTS written interpretation of the contract documents.The period for
CONSULTANT review shall be as specified in the general construction contract,except
if such period is not so specified, the period shall be as determined in the pre-
construction conference as mutually agreed upon by CITY,CONSULTANT and the
general construction contractor.If CITY,CONSULTANT and the respecti.ve general
construction contractor are unable to mutually agree on such period for CONSULTANT
review, then CITY will make the determination and that determination will be final.
(6) Upon written request by CITY,CONSULTANT shall provide such
design and specification services as may be requested by CITY to implement change
orders necessary for clarification or interpretation of the general construction contract
documents or which may have resulted from errors or omissions by CONSULTANT.
(7)Where change orders arise as a result of an increase in the scope
of work or are due to unforeseeable conditions,the parties may modify this Agreement,
which modification shall include an agreed upon increase in CONSULTANTS
compensation.
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(8) Upon written request of CITY,CONSULTANT shall assist CITY in
the preparation of Progress Payment Estimates and other related construction reports.
(9)CONSULTANT shall provide CITY with two sets of original
as-grade plans wet-stamped and signed by the CONSULTANT'S Engineer of Record for
the Project submitted for final approval by the CITY's Building and Safety Services
Division of the Development and Resource Management Department.
(10)CONSULTANT shall prepare Record Drawings by updating the
accepted general construction documents in Part 3 to reflect all changes or deviations
that occurred during construction as reflected on or from each of the following: (i) the
general construction contractor provided red-lined plans, (ii) those furnished by the
CITY, (iii)CONSULTANT provided Request for Information responses, and (iv) any
CONSULTANT bulletins,amendments or clarifications.CONSULTANT shall provide
CITY with one set of vellum Record Drawings for the Project within 30 calendar days
from receipt of red-lined field markups unless an extension of time is approved in writing
by the Director.Re-submittals,as necessary to obtain the acceptance by CITY, shall be
submitted to CITY within 14 calendar days from receipt of CITY comments unless an
extension of time is approved in writing by the Director. In addition,CONSULTANT shall
provide CITY with one complete set of CAD/System disk files of Record Drawings in the
following format:AutoCAD Civil 3D 2009.
2.CITY'S responsibilities.CITY will:
(a)Provide,upon request and cooperation of CONSULTANT,access to, and
make all provisions necessary to,enter upon public or private lands as required for
CONSULTANT to perform such services and inspections as are required in development of the
Project;provided,however,if CITY is unable to obtain access to enter upon public or private
lands,CONSULTANT shall not be relieved from performing its services as to those public and
private lands that are accessible.If CONSULTANT notifies CITY that a topographic survey is
required by CONSULTANT in connection with the consulting services,then CITY will be
responsible for conducting the topographic survey.
(b)Manage and be responsible for all negotiations with owners in connection
with land or easement acquisition and provide all required title reports and appraisals.
(c) With the exception of preparing correspondence required for design, hold
all required special meetings,serve all public and private notices,receive and act upon all
protests,and perform all services customarily performed by owners as are necessary for the
orderly progress of the work and the successful completion of the Project, and pay all costs
incidental thereto.
(d)Select the testing laboratory and pay the cost of borings,samplings,and
other work involved in soils testing during construction.
(e)Conduct onsite inspection during construction to check quality and
quantity of work as conditions warrant and be responsible for assuring that the general
construction contractor carries out all construction work in accordance with the plans and
specifications.However,this does not release CONSULTANT from its responsibility to make
periodic site visits under Section 1(e) for the purpose of observing the work to determine its
general conformity with the plans and specifications and reporting its findings to CITY.
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(f)
CONSULTANT.
Prepare all change orders during construction in cooperation with
(g) Prepare all Progress Payment Estimates in cooperation with
CONSULTANTfollowing its general assurancethat the work covered by a paymentapplication
meets the standards in the general construction contract documents based upon
CONSULTANTS best knowledge, informationand belief.
(h) Pay, or cause to be paid,plan checkfees, conditional use permitfees and
site plan reviewfees.
(i) Arrange for and pay, or cause to be paid, any fees associated with
EnvironmentalImpact Reports or Statements.
(j)Give reasonably prompt consideration to all matters submitted by
CONSULTANT for acceptance to the end that there will be no substantial delays in
CONSULTANTS program of work. For an acceptance, approval,authorization,a request or
any direction to CONSULTANT to be binding upon CITY under the terms of this Agreement,
such acceptance,approval,authorization,request or direction must be in writing, duly
authorized by CITY and signed on behalfof CITY by the Director.
3. Compensation.
(a) CONSULTANTS sole compensation for satisfactory performance of all
services requiredor rendered pursuantto this Agreement shall be a total fee of $61,350.00,and
a contingency amount not to exceed $6,000.00 for any additional work rendered pursuant to
Subsection (d) below and authorized in writing by the Director. Such fees include all expenses
incurred by CONSULTANTin performanceof such services.
(b) Detailed statements shall be rendered monthly and will be payable in the
normal course of CITY business. Such statements shall be for an amount no greater than that
attributable to the Part upon which CONSULTANTis then engaged as provided in Section 3(c)
below.
(c) For purposes of determining the division of the total compensation to
CONSULTANT as provided in Section 3(a) above, or should performance of any succeeding
Part not be authorized by CITY as provided in Section 1 of this Agreement, it is agreed that the
total compensation shall be allocated to the five Parts of CONSULTANTS performance as
follows: Part 1 - 10%, Part 2 - 15%, Part 3 - 50%, Part 4 - 10% and Part 5 - 15%. Prior to the
award of a general construction contract for the Project, or should such contract not be
awarded,the approved Parts as providedabove shall be utilized for purposesof determiningthe
fee due to CONSULTANT.
(d) The parties may modify this Agreement to increase or decrease the
scope of services or provide for the rendition of services not required by this Agreement,which
modification shall include an adjustment to CONSULTANTS compensation. Any change in the
scope of services must be made by written amendment to the Agreement signed by an
authorized representativefor each party. CONSULTANTshall not be entitled to any additional
compensation if services are performed prior to a signed written amendment.Subsequent to
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the date of completion of Part Three,changes due to Code revisions or enactments adopted
after such date shall constitute additional work subject to this Section 3(d).
4.Termination.Remedies.Force Majeure.and Consolidation of Disputes.
(a) This Agreement shall terminate without any liability of CITY to
CONSULTANT upon the earlier of: (i)CONSULTANTS filing for protection under the federal
bankruptcy laws, or any bankruptcy petition or petition for receiver commenced by a third party
against CONSULTANT;(ii) 7 calendar days prior written notice with or without cause by CITY to
CONSULTANT;(iii)CITY'S non-appropriation of funds sufficient to meet its obligations
hereunder during any CITY fiscal year of this Agreement,or insufficient funding for the Project;
or (iv) expiration of this Agreement.
(b)Immediately upon any termination or expiration of this Agreement,
CONSULTANT shall (i)immediately stop all work hereunder;(ii)immediately cause any and all
of its subcontractors to cease work; and (iii) return to CITY any and all unearned payments and
all properties and materials in the possession of CONSULTANT that are owned by CITY.
Subject to the terms of this Agreement,CONSULTANT shall be paid compensation for services
satisfactorily performed prior to the effective date of termination.CONSULTANT shall not be
paid for any work or services performed or costs incurred which reasonably could have been
avoided.
(c) In the event of termination due to failure of CONSULTANT to satisfactorily
perform in accordance with the terms of this Agreement,CITY may withhold an amount that
would otherwise be payable as an offset to, but not in excess of,CITY'S damages caused by
such failure. In no event shall any payment by CITY pursuant to this Agreement constitute a
waiver by CITY of any breach of this Agreement which may then exist on the part of
CONSULTANT,nor shall such payment impair or prejudice any remedy available to CITY with
respect to the breach.
(d) Upon any breach of this Agreement by CONSULTANT,CITY may
(i)exercise any right,remedy (in contract, law or equity), or privilege which may be available to .
it under applicable laws of the State of California or any other applicable law; (ii) proceed by
appropriate court action to enforce the terms of the Agreement;and/or (iii)recover all direct,
indirect,consequential,economic and incidental damages for the breach of the Agreement.If it
is determined that CITY improperly terminated this Agreement for default, such termination shall
be deemed a termination for convenience.
(e)CONSULTANT shall provide CITY with adequate written assurances of
future performance,upon the request of the Director or his/her designee,in the event
CONSULTANT fails to comply with any terms or conditions of this Agreement.
(f)CONSULTANT shall be liable for default unless nonperformance is
caused by an occurrence beyond the reasonable control of CONSULTANT and without its fault
or negligence such as, acts of God or the public enemy, acts of CITY in its contractual capacity,
fires, floods,epidemics,quarantine restrictions,strikes,unusually severe weather,and delays of
common carriers.CONSULTANT shall notify the Director or his/her designee in writing as soon
as it is reasonably possible after the commencement of any excusable delay,setting forth the
full particulars in connection therewith,and shall remedy such occurrence with all reasonable
dispatch, and shall promptly give written notice to the Director or his/her designee of the
cessation of such occurrence.
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(g)CONSULTANT agrees that,notwithstanding any contrary provision in this
Agreement,any dispute arising from or relating to this Agreement (including, without limitation,
disputes based on contract, tort,equity or statute)may, at CITY'S option, be joined and
consolidated with any other dispute or disputes arising from or relating to the Project so that all
disputes arising from or relating to the Project may be resolved in a single proceeding.
CONSULTANT hereby specifically waives any objection it may otherwise have to such joinder
and consolidation and specifically consents to mediation,arbitration or any other dispute
resolution mechanism,forum or proceeding necessary to effectuate the joinder and
consolidation contemplated by this provision.
5.Confidential Information.Ownership of Documents and Copyright License.
(a)Any reports,information,or other data prepared or assembled by
CONSULTANT pursuant to this Agreement shall not be made available to any individual or
organization by CONSULTANT without the prior written approval of CITY. During the term of
this Agreement, and thereafter,CONSULTANT shall not,without the prior written consent of
CITY, disclose to anyone any Confidential Information. The term Confidential Information for
the purposes of this Agreement shall include all proprietary and confidential information of CITY,
including but not limited to business plans, marketing plans,financial information, designs,
drawings,specifications,materials,compilations,documents,instruments,models, source or
object codes and other information disclosed or submitted, orally, in writing, or by any other
medium or media. All Confidential Information shall be and remain confidential and proprietary
in CITY.
(b)Any and all original sketches, pencil tracings of working drawings, plans,
computations,specifications,computer disk files, writings and other documents prepared or
provided by CONSULTANT pursuant to this Agreement are the property of CITY at the time of
preparation and shall be turned over to CITY upon expiration or termination of the Agreement or
default by CONSULTANT.CONSULTANT grants CITY a copyright license to use such
drawings and writings.CONSULTANT shall not permit the reproduction or use thereof by any
other person except as otherwise expressly provided herein. CITY may modify the design
including any drawings or writings.Any use by CITY of the aforesaid sketches, tracings, plans,
computations,specifications,computer disk files, writings and other documents in completed
form as to other projects or extensions of this Project, or in uncompleted form, without specific
written verification by CONSULTANT will be at CITY'S sole risk and without liability or legal
exposure to CONSULTANT.CONSULTANT may keep a copy of all drawings and
specifications for its sole and exclusive use.
(c) If CONSULTANT should subcontract all or any portion of the services to
be performed under this Agreement,CONSULTANT shall cause each subcontractor to also
comply with the requirements of this Section 5.
(d) This Section 5 shall survive expiration or termination of this Agreement.
6.Professional Skill. It is further mutually understood and agreed by and between
the parties hereto that inasmuch as CONSULTANT represents to CITY that CONSULTANT and
its subcontractors,if any, are skilled in the profession and shall perform in accordance with the
standards of said profession necessary to perform the services agreed to be done by it under
this Agreement,CITY relies upon the skill of CONSULTANT and any subcontractors to do and
perform such services in a skillful manner and CONSULTANT agrees to thus perform the
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services and require the same of any subcontractors. Therefore, any acceptance of such
services by CITY shall not operate as a release of CONSULTANT or any subcontractors from
said professional standards.
7. Indemnification. To the furthest extent allowed by law, CONSULTANT shall
indemnify, hold harmless and defend CITY and each of its officers, officials, employees, agents
and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages
(whether in contract, tort or strict liability, including but not limited to personal injury, death at
any time and property damage), and from any and all claims, demands and actions in law or
equity (including reasonable attorney's fees and litigation expenses) that arise out of, pertain to,
or relate to the negligence, recklessness or willful misconduct of CONSULTANT, its principals,
officers, employees, agents or volunteers in the performance of this Agreement.
If CONSULTANT should subcontract all or any portion of the services to be performed
under this Agreement, CONSULTANT shall require each subcontractor to indemnify, hold
harmless and defend CITY and each of its officers, officials, employees, agents and volunteers
in accordance with the terms of the preceding paragraph.
This section shall survive termination or expiration of this Agreement.
8. Insurance.
(a) Throughout the life of this Agreement, CONSULTANT shall pay for and
maintain in full force and effect all insurance as required in Exhibit B or as may be authorized in
writing by CITY'S Risk Manager or his/her designee at any time and in his/her sole discretion.
(b) If at any time during the life of the Agreement or any extension,
CONSULTANT or any of its subcontractors fail to maintain any required insurance in full force
and effect, all services and work under this Agreement shall be discontinued immediately, and
all payments due or that become due to CONSULTANT shall be withheld until notice is received
by CITY that the required insurance has been restored to full force and effect and that the
premiums therefore have been paid for a period satisfactory to CITY. Any failure to maintain the
required insurance shall be sufficient cause for CITY to terminate this Agreement. No action
taken by CITY pursuant to this section shall in any way relieve CONSULTANT of its
responsibilities under this Agreement. The phrase "fail to maintain any required insurance" shall
include, without limitation, notification received by CITY that an insurer has commenced
proceedings, or has had proceedings commenced against it, indicating that the insurer is
insolvent.
(c) The fact that insurance is obtained by CONSULTANT shall not be
deemed to release or diminish the liability of CONSULTANT, including, without limitation, liability
under the indemnity provisions of this Agreement. The duty to indemnify CITY shall apply to all
claims and liability regardless of whether any insurance policies are applicable. The policy limits
do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT.
Approval or purchase of any insurance contracts or policies shall in no way relieve from liability
nor limit the liability of CONSULTANT, its principals, officers, agents, employees, persons under
the supervision of CONSULTANT, vendors, suppliers, invitees, consultants, sub-consultants,
subcontractors, or anyone employed directly or indirectly by any of them.
(d) Upon request of CITY, CONSULTANT shall immediately furnish CITY
with a complete copy of any insurance policy required under this Agreement, including all
endorsements, with said copy certified by the underwriter to be a true and correct copy of the
original policy. This requirement shall survive expiration or termination of this Agreement.
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(e) If CONSULTANT should subcontract all or any portion of the services to
be performed under this Agreement, CONSULTANT shall require each subcontractorto provide
insurance protection in favor of CITY and each of its officers, officials, employees, agents and
volunteers in accordance with the terms of this section, except that any required certificatesand
applicable endorsements shall be on file with CONSULTANT and CITY prior to the
commencement of any services by the subcontractor.
9. Conflict of Interest and Non-Solicitation.
(a) Prior to CITY'S execution of this Agreement, CONSULTANT shall
complete a City of Fresno conflict of interest disclosure statement in the form as set forth in
Exhibit C. During the term of this Agreement, CONSULTANT shall have the obligation and
duty to immediately notify CITY in writing of any change to the information provided by
CONSULTANT in such statement.
(b) CONSULTANT shall comply, and require its subcontractors to comply,
with all applicable (i) professional canons and requirements governing avoidance of
impermissible client conflicts; and (ii) federal, state and local conflict of interest laws and
regulations including, without limitation, California Government Code Section 1090 et. seq., the
California Political Reform Act (California Government Code Section 87100 et. seq.), the
regulations of the Fair Political Practices Commission concerning disclosure and disqualification
(2 California Code of Regulations Section 18700 et. seq.) and Section 4-112 of the Fresno
Municipal Code (Ineligibility to Compete). At any time, upon written request of CITY,
CONSULTANT shall provide a written opinion of its legal counsel and that of any subcontractor
that, after a due diligent inquiry, CONSULTANT and the respective subcontractor(s) are in full
compliance with all laws and regulations. CONSULTANT shall take, and require its
subcontractors to take, reasonable steps to avoid any appearance of a conflict of interest. Upon
discovery of any facts giving rise to the appearance of a conflict of interest, CONSULTANTshall
immediately notify CITY of these facts in writing.
(c) In performing the work or services to be provided hereunder,
CONSULTANT shall not employ or retain the services of any person while such person either is
employed by CITY or is a member of any CITY council, commission, board, committee, or
similar CITY body. This requirement may be waived in writing by the City Manager, if no actual
or potential conflict is involved.
(d) CONSULTANT represents and warrants that it has not paid or agreed to
pay any compensation, contingent or otherwise, direct or indirect, to solicit or procure this
Agreement or any rights/benefits hereunder.
(e) Neither CONSULTANT, nor any of CONSULTANTS subcontractors
performing any services on this Project, shall bid for, assist anyone in the preparation of a bid
for, or perform any services pursuant to, any other contract in connection with this Project.
CONSULTA~JT and any of its subcontractors shall have no interest, direct or indirect, in any
other contract with a third party in connection with this Project unless such interest is in
accordance with all applicable law and fully disclosed to and approved by the City Manager, in
advance and in writing.
(f) If CONSULTANT should subcontract all or any portion of the work to be
performed or services to be provided under this Agreement, CONSULTANT shall include the
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provisions of this Section 9 in each subcontract and require its subcontractors to comply
therewith.
(g) This Section 9 shall survive expiration or termination of this Agreement.
10. Recycling Program. In the event CONSULTANT maintains an office or operates
a facility(ies), or is required herein to maintain or operate same, within the incorporated limits of
the City of Fresno, CONSULTANT at its sole cost and expense shall:
(i) Immediately establish and maintain a viable and ongoing recycling program,
approved by CITY'S Solid Waste Management Division, for each office and
facility. Literature describing CITY recycling programs is available from CITY'S
Solid Waste Management Division and by calling City of Fresno Recycling
Hotline at (559) 621-1111.
(ii) Immediately contact CITY'S Solid Waste Management Division at
(559) 621-1452 and schedule a free waste audit, and cooperate with such
Division in their conduct of the audit for each office and facility.
(iii) Cooperate with and demonstrate to the satisfaction of CITY'S Solid Waste
Management Division the establishment of the recycling program in
paragraph (i) above and the ongoing maintenance thereof.
11. General Terms.
(a) Except as otherwise provided by law, all notices expressly required of
CITY within the body of this Agreement, and not otherwise specifically provided for, shall be
effective only if signed by the Director or his/her designee.
(b) Records of CONSULTANT'S expenses pertaining to the Project shall be
kept on a generally recognized accounting basis and shall be available to CITY or its authorized
representatives upon request during regular business hours throughout the life of.this
Agreement and for a period of three years after final payment or, if longer, for any period
required by law. In addition, all books, documents, papers, and records of CONSULTANT
pertaining to the Project shall be available for the purpose of making audits, examinations,
excerpts, and transcriptions for the same period of time. If any litigation, claim, negotiations,
audit or other action is commenced before the expiration of said time period, all records shall be
retained and made available to CITY until such action is resolved, or until the end of said time
period whichever shall later occur. If CONSULTANT should subcontract all or any portion of the
services to be performed under this Agreement, CONSULTANT shall cause each subcontractor
to also comply with the requirements of this paragraph. This Section 11 (b) shall survive
expiration or termination of this Agreement.
(c) Prior to execution of this Agreement by CITY, CONSULTANT shall have
provided evidence to CITY that CONSULTANT is licensed to perform the services called for by
this Agreement (or that no license is required). If CONSULTANT should subcontract all or any
portion of the work or services to be performed under this Agreement, CONSULTANT shall
require each subcontractor to provide evidence to CITY that subcontractor is licensed to
perform the services called for by this Agreement (or that no license is required) before
beginning work.
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(d)CONSULTANTS services pursuant to this Agreement shall be provided
under the supervision of Brad Greenbury,and he/she shall not assign another to supervise
CONSULTANTS performance of this Agreement without the prior written approval of the
Director.
12.Nondiscrimination.To the extent required by controlling federal, state and local
law,CONSULTANT shall not employ discriminatory practices in the provision of services,
employment of personnel, or in any other respect on the basis of race, religious creed, color,
national origin,ancestry,physical disability,mental disability,medical condition, marital status,
sex, age, sexual orientation,ethnicity,status as a disabled veteran or veteran of the Vietnam
era.Subject to the foregoing and during the performance of this Agreement,CONSULTANT
agrees as follows:
(a)CONSULTANT will comply with all applicable laws and regulations
providing that no person shall, on the grounds of race, religious creed, color, national origin,
ancestry,physical disability,mental disability, medical condition, marital status, sex, age, sexual
orientation,ethnicity,status as a disabled veteran or veteran of the Vietnam era be excluded
from participation in, be denied the benefits of, or be subject to discrimination under any
program or activity made possible by or resulting from this Agreement.
(b)CONSULTANT will not discriminate against any employee or applicant for
employment because of race,religious creed, color, national origin, ancestry, physical disability,
mental disability, medical condition,marital status, sex, age, sexual orientation,ethnicity, status
as a disabled veteran or veteran of the Vietnam era.CONSULTANT shall ensure that
applicants are employed,and the employees are treated during employment,without regard to
their race, religious creed, color, national origin, ancestry,physical disability, mental disability,
medical condition,marital status, sex, age, sexual orientation,ethnicity, status as a disabled
veteran or veteran of the Vietnam era. Such requirement shall apply to CONSULTANTS
employment practices including,but not be limited to, the following:employment,upgrading,
demotion or transfer;recruitment or recruitment advertising;layoff or termination;rates of payor
other forms of compensation;and selection for training, including apprenticeship.
CONSULTANT agrees to post in conspicuous places,available to employees and applicants for
employment,notices setting forth the provision of this nondiscrimination clause.
(c)CONSULTANT will, in all solicitations or advertisements for employees
placed by or on behalf of CONSULTANT in pursuit hereof, state that all qualified applicants will
receive consideration for employment without regard to race,religious creed, color, national
origin, ancestry,physical disability,mental disability, medical condition,marital status, sex, age,
sexual orientation,ethnicity,status as a disabled veteran or veteran of the Vietnam era.
(d)CONSULTANT will send to each labor union or representative of workers
with which it has a collective bargaining agreement or other contract or understanding,a notice
advising such labor union or workers'representatives of CONSULTANTS commitment under
this section and shall post copies of the notice in conspicuous places available to employees
and applicants for employment.
(e) If CONSULTANT should subcontract all or any portion 'of the services to
be performed under this Agreement,CONSULTANT shall cause each subcontractor to also
comply with the requirements of this Section 12.
13.Independent Contractor.
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(a) In the furnishing of the services provided for herein, CONSULTANT is
acting solely as an independent contractor. Neither CONSULTANT, nor any of its officers,
agents or employees shall be deemed an officer, agent, employee, joint venturer, partner or
associate of CITY for any purpose. CITY shall have no right to control or supervise or direct the
manner or method by which CONSULTANT shall perform its work and functions. However,
CITY shall retain the right to administer this Agreement so as to verify that CONSULTANT is
performing its obligations in accordance with the terms and conditions thereof.
(b) This Agreement does not evidence a partnership or joint venture between
CONSULTANT and CITY.CONSULTANT shall have no authority to bind CITY absent CITY'S
express written consent. Except to the extent otherwise provided in this Agreement,
CONSULTANT shall bear its own costs and expenses in pursuit thereof.
(c) Because of its status as an independent contractor, CONSULTANT and
its officers, agents and employees shall have absolutely no right to employment rights and
benefits available to CITY employees. CONSULTANT shall be solely liable and responsible for
all payroll and tax withholding and for providing to, or on behalf of, its employees all employee
benefits including, without limitation, health, welfare and retirement benefits. In addition,
together with its other obligations under this Agreement, CONSULTANT shall be solely
responsible, indemnify, defend and save CITY harmless from all matters relating to employment
and tax withholding for and payment of CONSULTANT'S employees, includlnq, without
limitation, (i) compliance with Social Security and unemployment insurance withholding,
payment of workers' compensation benefits, and all other laws and regulations governing
matters of employee Withholding, taxes and payment; and (ii) any claim of right or interest in
CITY employment benefits, entitlements, programs and/or funds offered employees of CITY
whether arising by reason of any common law, de facto, leased, or co-employee rights or other
theory. It is acknowledged that during the term of this Agreement, CONSULTANT may be
providing services to others unrelated to CITY or to this Agreement.
14. Notices. Any notice required or intended to be given to either party under the
terms of this Agreement shall be in writing and shall be deemed to be duly given if delivered
personally, transmitted by facsimile followed by telephone confirmation of receipt, or sent by
United States registered or certified mail, with postage prepaid, return receipt requested,
addressed to the party to which notice is to be given at the party's address set·forth on the
signature page of this Agreement or at such other address as the parties may from time to time
designate by written notice. Notices served by United States mail in the manner above
described shall be deemed sufficiently served or given at the time of the mailing thereof.
15. Binding. Subject to Section 16 below, once this Agreement is signed by all
parties, it shall be binding upon, and shall inure to the benefit of, all parties, and each parties'
respective heirs, successors, assigns, transferees, agents, servants, employees and
representatives.
16. Assignment.
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(a) This Agreement is personal to CONSULTANT and there shall be no
assignment by CONSULTANT of its rights or obligations under this Agreement withoutthe prior
written approval of the City Manager or his/her designee. Any attempted assignment by
CONSULTANT,its successors or assigns, shall be null and void unless approved in writing by
the City Manageror his/her designee.
(b) CONSULTANT hereby agrees not to assign the payment of any monies
due CONSULTANT from CITY under the terms of this Agreement to any other individual(s),
corporation(s) or entity(ies). CITY retains the right to pay any and all monies due
CONSULTANTdirectly to CONSULTANT.
17. Compliance With Law. In providing the services required under this Agreement,
CONSULTANTshall at all times comply with all applicable laws of the United States, the State
of California and CITY, and with all applicable regulations promulgated by federal,state,
regional, or local administrative and regulatory agencies, now in force and as they may be
enacted,issued,or amended during the term of this Agreement.
18. Waiver. The waiver by either party of a breach by the other of any provision of
this Agreementshall not constitute a continuing waiver or a waiver of any subsequent breach of
either the sameor a different provision of this Agreement. No provisionsof this Agreementmay
be waived unless in writing and signed by all parties to this Agreement. Waiver of anyone
provision"hereinshall not be deemed to be a waiver of any other provisionherein.
19. Governing Law and Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California,excluding,
however, any conflict of laws rule which would apply the law of another jurisdiction. Venue for
purposes of the filing of any action regarding the enforcement or interpretation of this
Agreement and any rights and duties hereundershall be Fresno County,California.
20. Headings. The section headings in this Agreement are for convenience and
reference only and shall not be construed or held in any way to explain, modify or add to the
interpretationor meaning of the provisionsof this Agreement.
21. Severability. The provisions of this Agreement are severable. The invalidity,or
unenforceabilityof anyone provision in this Agreementshall not affect the other provisions.
22. Interpretation. The parties acknowledqe that this Agreement in its final form is
the result of the combined efforts of the parties and that, should any provision of this Agreement
be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this
Agreement in favor of or against either party, but rather by construing the terms in accordance
with their generallyaccepted meaning.
23. Attorney's Fees. If either party is required to commence any proceeding or legal
action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing
party in such proceeding or action shall be entitledto recoverfrom the other party its reasonable
attorney'sfees and legal expenses.
24. Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporatedinto and made a partof this Agreement.
25. Precedence of Documents. In the event of any conflict between the body of this
Agreement and any Exhibit or Attachment hereto, the terms and conditions of the body of this
DPW 18.1/12-10-10
-16-
Agreement shall control and take precedence over the terms and conditions expressed within
the Exhibit or Attachment. Furthermore, any terms or conditions contained within any Exhibit or
Attachment hereto which purport to modify the allocation of risk between the parties, provided
for within the body of this Agreement,shall be null and void.
26.Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall,wherever possible, be cumulative with all other remedies at law or in equity.
27. No Third Party Beneficiaries.The rights, interests, duties and obligations defined
within this Agreement are intended for the specific parties hereto as identified in the preamble of
this Agreement.Notwithstanding anything stated to the contrary in this Agreement, it is not
intended that any rights or interests in this Agreement benefit or flow to the interest of any third
parties.
28. Extent of Agreement.Each party acknowledges that they have read and fully
understand the contents of this Agreement.This Agreement represents the entire and
integrated agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations,representations or agreements,either written or oral. This
Agreement may be modified only by written instrument duly authorized and executed by both
CITY and CONSULTANT.
III
III
/11
DPW 18.1/12-10-10
-17-
IN WITNESS WHEREOF,the parties have executed this Agreement at Fresno,
California, the day and year first above written.
Precision Civil Engineering, Inc.,
~k
Name:~O-BN~"'-.£
Title:~JoG1::lr
[if corporation or LLC, Board
Chair, Pres. or Vice Pres.]
Patrick N.Wiemiller,Director
Department of Public Works
By:---
ATTEST:
REBECCA E.KUSCH
City Clerk
CITY OF FRESNO,
a California municipal corporation
By:__---.,..--'--_
Deputy
By:_
Name:_
No signature of City Attorney required.
Standard Document #DPW 18.1 has been
used without modification, as certified by
the undersigned.
Title:_
[if corporation or LLC, CFO,
Treasurer,Secretary or Assistant
Secretary.]
By:_
Kelly S. Riddle
Manager, Facilities &Major Projects
Department of Public Works
Any Applicable Professional License:
Number:_
Name:_-------------
Date of Issuance:_
REVIEWED BY:
Mark M. Johnson, Project Manager
Department of Public Works
Addresses:
CITY:
City of Fresno
Attention:Mark M. Johnson, Project
Manager
2101 "G" Street, Building A
Fresno, CA 93706
Phone: (559)621-1017
FAX: (559) 457-1160
CONSULTANT:
Precision Civil Engineering,Inc.
Attention: Ed Dunkel, Jr., President
1234 "a"Street
Fresno, CA 93721
Phone: (559)449-4500
FAX: (559)449-4515
Attachments:
1.
2.
3.
Exhibit A - Scope of Services
Exhibit B -Insurance Requirements
Exhibit C -Conflict of Interest Disclosure Form
DPW 18.1/12-10-10
-18-
Exhibit A
SCOPE OF SERVICE
Consultant Agreement between the City of Fresno ("City")
and PRECISION CIVIL ENGINEERING,INC.("Consultant")
Median Island Landscapeand IrrigationProject
PROJECT TITLE
Precision Civil Engineering (PCE), Inc. shall provide design related services on behalf of the
City, as well as a variety of other services during various phases of the project.The project
involves the irrigation and planting design services associated with median island tree planting
at 50' on center utilizing low volume irrigation systems only.
I. PROJECT LIMITS
The medianislandswithin the scope of work for this projectcomprise the following locations:
Fresno Median Islands Project·Northeast
1. North Fowler Avenue between East Shields Avenue and East Fedora Avenue,
(1) 185'&(1) 555' median
2. East Shields Avenue between North Fowler Avenue and North Temperance
Avenue, (1) 2,555' median
3. North Temperance Avenue between East Shields Avenue and DakotaAvenue,
(1)1,970'median
4. East Bullard Avenue between North Chestnut Avenue and North Willow
Avenue, (1) 1,335' median
The North Fowler Avenue and East Shields Avenue median sections are 21' wide, have
a curb and 18" stamped concrete bands installed and have a combined planted length
of 1,430'.The North Temperance Avenue and East Bullard Avenue median sections are
21' wide, have curbing only and a combined length of 3,305'. The medians are
essentiallyflat with no surface debris or existing plant material on site.
Fresno Median Islands Project·Southeast
1. North Armstrong Avenue between East Inyo Street and North Burgan Avenue,
(1) 910' median
2. North Clovis Avenue between East CaliforniaAvenue and East Church Avenue,
(1) 1,340' median
3. East Jensen Avenue at SR 41, (1) 1,180' median
North Armstrong Avenue is a 21' wide median which has curbing only with a 910' length
planter. North Clovis Avenue is a 21' wide median which has curbing and an 18" wide
stamped concrete band with a 1,340' length planter.East Jensen Avenue consists of
three separate medians with curbing only. The medians vary in width and have a total
IIPage
combined planter 1ength of 1,180'. The medians are essentially flat with no debris or
existing planting on site.
Fresno Median Islands Project·West
1. North Brawley Avenue at West Fountain Way, (1) 180' median
2. North Brawley Avenue south of West Shaw Avenue,(1)280'median
3. North Polk Avenue between West Herndon Avenue and West Warner Avenue,
(1) 130' median
4. West Shields Avenue between North Brawley Avenue and North Brunswick
Avenue (1) 2,280' median
The area at North Brawley Avenue at West Fountain Way and at North Brawley Avenue
south of the West Shaw Avenue median sections vary in width, have curbing only and a
combined planter length of 460'. The North Polk Avenue medians between West
Herndon and West Warner Avenues vary in width, have curbing only and a planter
length of 130'. The West Shields Avenue median is 21' wide with curbing only and a
planter length of 2,280'. The medians are essentially flat with no debris or existing plant
material on site.
II. PROJECTASSUMPTIONS•
1.No water service is currently available. The City will provide such service and will
be potable water. PCE will provide design service to include points of connection
up to the existing services for the contractor to coordinate connection as part of
the project.
2. No electrical service is available and the City of Fresno will provide such service.
PCE will provide design service to include points of connection up to the existing
services for the contractor to coordinate connection as part of the project.
3. No saw-cutting to the median island from the water and electrical services is
necessary.
4 ..The City will install an 18" wide band per City Standards in medians lacking this
improvement if needed. The plans·will identify existing 18" wide concrete bands
as well as future locations for an 18" wide concrete band to be installed by the
City.
5. The irrigation system will include an irrigation booster pump if necessary.
6. Minor clearing and grubbing may be required. Clearing and grUbbing plan sheets
will not be needed. If a clearing and grubbing sheet are needed an·additional
design cost will be added.
7. No slope stabilization fabric of any kind is required.
8. After the Schematic Design (30%) Phase is approved; the City will issue a Notice
to Proceed simultaneously for the Design Development (60%) and Construction
Document Phases (90%).
21Page
III. SCOPE OF WORK
The scope for design services for the plans based on the above median islands are as
follows:
Fresno Median Islands Project Limits I
1. Cover Sheet
2. Irrigation plans - (7 sheets)
3. Planting plans - (7 sheets)
4. Irrigation details and legend - (1 sheet)
5. Planting details, legends and AS 1881 MAWA and WUCOLS calculations - (1
sheet)
6. General, irrigation and planting notes - (1 sheet)
7. Additional services for bidding, comment review and construction observation
8. All sheets to be submitted on City of Fresno Standard size sheets
Fresno Median Islands Project Limits II
1. Cover Sheet
2. Irrigation plans - (4 sheets)
3. Planting plans - (4 sheets)
4. Irrigation details and legend - (1 sheet)
5. Planting details, legend and AS 1881 MAWA and WUCOLS calculations - (1
sheet)
6. General Irrigation and planting notes - (1 sheet)
7. Additional services for bidding comment review and construction observation
8.All sheets to be submitted on City of Fresno Standard size sheets
Fresno Median Islands Project Limits III
1. Cover Sheet
2. Irrigation plans - (2 sheets)
3. Planting plans - (2 sheets)
4. Irrigation details and legend - (1 sheet)
5. Planting details, legend and AS 1881 MAWA and WUCOLS calculations - (1
sheet)
6.· General Irrigation and planting notes - (1 sheet)
7. Additional services for bidding comment review and construction observation
8. All sheets to be submitted on City of Fresno Standard size sheets
A.Initial Information Gathering and Verification
1.Kickoff Meeting
Meet with the City of Fresno to establish the final scope of the project.
Discuss project obstacles and milestones.
31Page
2.Field Work
PCE will verify site conditions and utility locations to prepare the
necessary documents listed within this proposal. The City will provide
knowledgeable support personnel to assist during the field work process.
PCE will pot-hole each of the medians every 500 feet to a depth of 3 feet.
The location of the pot-holes and the results will be identified on the
plans.
PCE will collect and submit soil samples for soil fertility to J.M. Lord,
Dellavalle or other approved soils lab for fertility testing and amendment
recommendations. The samples will be collected at a maximum of 1 foot
depth in the pot-holed locations mentioned above.
B. 30%Schematic Design Phase Documents
Prepare irrigation and planting plans, details, legends and notes.
1.Drawings
2.Prepare preliminary engineers estimate
C. 90%Construction Documents
1. 60%Design Development and 90%Construction Document Phase
Drawings
Prepare 60%/90%Construction Drawings based on 30% Construction
Documents and comments provided by City. The 90% Construction
Drawings will be submitted to the City for final review prior to project
approval.
2. 90%Project Specifications.
Prepare Project Specifications utilizing the current City of Fresno
Standards, Specifications and Drawings. The specifications will include
all documentation necessary for the successful bidding and construction
of the project.
3.Engineer's Cost Estimate
Prepare Engineer's Cost Estimate to correspond with Bid Schedule within
the 90% Project Specifications. Estimate will include all items bid by the
Contractor necessary for the completion of the project.
D. 100%Construction Documents
1. 100%Construction Drawings
Prepare 100% Construction Drawings based on 60%/90%Construction
Documents and comments provided by City. The 100% Construction
Drawings will be deemed final and include all information necessary for
the successful bidding and construction of the project.
41Page
2. 100%Project Specifications
Prepare Project Specifications utilizing City of Fresno Standards.
Specifications will include all documentation necessary for the successful
bidding and constructionof the project.
3.Engineer's Cost Estimate
Prepare Engineer's Cost Estimateto correspondwith Bid Schedulewithin
the 100% Project Specifications.Estimatewill include all items bid by the
Contractor necessaryfor the completion of the project.
4.Agency Approval
Obtain approvals from the following governing agencies for the project
improvements: 1) Cityof Fresno.
E.Bidding and Construction Support
1.Project Bidding
Assist the City in preparing documents as necessary for the successful
bidding of the project.Attend Pre-Bid Meeting with Bidding Contractors
and City staff. Assist the City with the award of the project. Promptly
respond to bid questions and assist with clarifications during the bid
phase.
2.Construction Support
Respond to Requests for Information (RFI's), contractor submittals;
attend pre-construction and construction meetings as deemed
reasonable. Approval of as-built drawings set provided by landscape
contractor.
III. SERVICES NOT INCLUDED
In addition to the services described above, PCE can provide the follOWing services if
requested by the client:
1.Construction Staking
2.Construction observation/inspections
3.Construction management
IV. CITY RESPONSIBILITY
1. Environmentalrequirements includingbut not limitedto SWPPP, ErosionControl,
and SJVAPCD requirements
2. All necessary permitting and testingfees, unlessoutlined in the scope of work
herein.
SIPage
v.COMPENSATION
PCE will provide consulting services and project oversight for a lump sum amount not to exceed
$61,350.00 as detailed below:
Proposed Compensation
Scope of Work Amount
Consulting Services: Fresno Median $33,000.00
Islands Project -Northeast
Consulting Services: Fresno Median $16,050.00
Islands Project -Southeast
Consulting Services: Fresno Median
$10,700.00
Islands Project -West
Reimbursable,printing, soil fertility testing $1,600.00
and other project related expenses
Total:$61,350.00
6/Page
Exhibit B
INSURANCE REQUIREMENTS
Consultant Service Agreement between City of Fresno ("CITY)
and Precision Civil Engineering,Inc.("CONSULTANT")
Median Island Landscape and Irrigation
PROJECTTITLE
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. The most current version of Insurance Services Office (ISO)Commercial General
Liability Coverage Form CG 00 01, which shall include insurance for "bodily
injury," "property damage" and "personal and advertising injury" with coverage for
premises and operations, products and completed operations, and contractual
liability.
2. The most current version of Insurance Service Office (ISO) Business Auto
Coverage Form CA 0001,which shall include coverage for all owned, hired, and
non-owned automobiles or other licensed vehicles (Code 1- Any Auto).
3. Workers' Compensation insurance as required by the California Labor Code and
Employer's Liability Insurance.
4. Professional Liability (Errors and Omissions) insurance appropriate to
CONSULTANTS profession. Architect's and engineer's coverage is to be
endorsed to include contractual liability.
Minimum Limits of Insurance
CONSULTANT shall maintain limits of liability of not less than:
1. General Liability:
$1,000,000 per occurrence for bodily injury and property damage
$1,000,000 per occurrence for personal and advertising injury
$2,000,000 aggregate for products and completed operations
$2,000,000 general aggregate applying separately to the work performed under
the Agreement
2. Automobile Liability:
$1,000,000 per accident for bodily injury and property damage
3. Employer's Liability:
$1,000,000 each accident for bodily injury
$1,000,000 disease each employee
$1,000,000 disease policy limit
Page 1 of 3
4. Professional Liability (Errors and Omissions)
$1,000,000 per claim/occurrence
$2,000,000 policy aggregate
Umbrella or Excess Insurance
In the event CONSULTANT purchases an Umbrella or Excess insurance policy(ies) to meet the
"Minimum Limits of Insurance," this insurance policy(ies) shall "follow form" and afford no less
coverage than the primary insurance policy(ies).
Deductibles and Self-Insured Retentions
CONSULTANT shall be responsible for payment of any deductibles contained in any insurance
policy(ies) required hereunder and CONSULTANT shall also be responsible for payment of any
self-insured retentions. Any deductibles or self-insured retentions must be declared to, and
approved by, the CITY'S Risk Manager or his/her designee. At the option of the CITY'S Risk
Manager or his/her designee, either (i) the insurer shall reduce or eliminate such deductibles or
self-insured retentions as respects CITY, its officers, officials, employees, agents and
volunteers; or (ii) CONSULTANT shall provide a financial guarantee, satisfactory to CITY'S Risk
Manager or his/her designee, guaranteeing payment of losses and related investigations, claim
administration and defense expenses. At no time shall CITY be responsible for the payment of
any deductibles or self-insured retentions.
Other Insurance Provisions
The General Liability and Automobile Liability insurance policies are to contain, or be endorsed
to contain, the following provisions:
1. CITY, its officers, officials, employees, agents and volunteers are to be covered
as additional insureds.
2. The coverage shall contain no special limitations on the scope of protection
afforded to CITY, its officers, officials, employees, agents and volunteers.
3.CONSULTANTS insurance coverage shall be primary and no contribution shall
be required of CITY.
The Workers' Compensation insurance policy is to contain, or be endorsed to contain, the
following provision: CONSULTANT and its insurer shall waive any right of subrogation against
CITY, its officers, officials, employees, agents and volunteers.
If the Professional Liability (Errors and Omissions) insurance policy is written on a claims-made
form:
1. The "Retro Date"must be shown, and must be before the effective date of the
Agreement or the commencement of work by CONSULTANT.
2. Insurance must be maintained and evidence of insurance must be provided for at
least 5 years after any expiration or termination of the Agreement or,in the
alternative, the policy shall be endorsed to provide not less than a 5-year
Page 2 of 3
discovery period. This requirement shall survive expiration or termination of the
Agreement.
3. If coverage is canceled or non-renewed, and not replaced with another claims-
made policy form with a "Retro Date" prior to the effective date of the Agreement,
CONSULTANT must purchase "extended reporting" coverage for a minimum of
5 years following the expiration or termination of the Agreement.
4. A copy of the claims reporting requirements must be submitted to CITY for
review.
5. These requirements shall survive expiration or termination of the Agreement.
All policies of insurance required hereunder shall be endorsed to provide that the coverage shall
not be cancelled, non-renewed, reduced in coverage or in limits except after 30 calendar day
written notice by certified mail, return receipt requested, has been given to CITY. Upon
issuance by the insurer, broker, or agent of a notice of cancellation, non-renewal, or reduction in
coverage or in limits, CONSULTANT shall furnish CITY with a new certificate and applicable
endorsements for such policy(ies). In the event any policy is due to expire during the work to be
performed for CITY,CONSULTANT shall provide a new certificate, and applicable
endorsements, evldenclnq renewal of such policy not less than 15 calendar days prior to the
expiration date of the expiring policy.
Acceptability of Insurers
All policies of insurance required hereunder shall be placed-with an insurance company(ies)
admitted by the California Insurance Commissioner to do business in the State of California and
rated not less than "A-VII" in Best's Insurance Rating Guide, or authorized by CITY'S Risk
Manager.
Verification of Coverage
CONSULTANT shall furnish CITY with all certificate(s) and applicable endorsements effecting
coverage required hereunder. All certificates and applicable endorsements are to be received
and approved by the CITY'S Risk Manager or his/her designee prior to CITY'S execution of the
Agreement and before work commences.
Page 3 of 3
Exhibit C
DISCLOSURE OF CONFLICT OF INTEREST
Median Island Landscape and Irrigation
.PROJECT TITLE
~Z'bJ I-z..
Date I
~AAeD D.D.,~~yJL
(name)
~~)pU GI\.~...')..M~.~
(company)I
v #/c»JZ3+
(address)
~k&.CA-.~b.7Z{
(city state zip) 7
YES*NO
1 Are you currently in litigation with the City of Fresno or any of its 0 ~agents?
2 Do you represent any firm, organization or person who is in 0 ~litigation with the City of Fresno?
3 Do you currently represent or perform work for any clients who do 0 ~business with the City of Fresno?
4 Are you or any of your principals, managers or professionals,
owners or investors in a business which does business with the 0 iJCity of Fresno, or in a business which is in litigation with the City of
Fresno?
5 Are you or any of your principals, managers or professionals,
related by blood or marriage to any City of Fresno employee who 0 ~has any significant role in the subject matter of this service?
6 Do you or any of your subcontractors have, or expect to have, any
interest, direct or indirect, in any other contract in connection with 0 ~this Project?
*If the answer to any question is yes, please explain in full below.
~,
Explanation:~·A -,jeD·.'1Signature
o Additional page(s) attached.
City of
~~~~...~\I~
'-"K;";~;~~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.I'D
COUNCIL MEETING 05/17/12
APPROVEQBY~
~C~
DEPARTMENT DIRECTOR
FROM:PATRICK WIEMILLER,Director
Public Works Department CITYMANAGER ~~
BY:
SUBJECT:
EFREN BANUELOS,Assistant Director ~
Public Works Department, Capital Management Division
JAMES SULLIVAN, Construction Manager.~
Public Works Department, Construction Management Division
APPROVE CONTRACT CHANGE ORDER NUMBER 11 FOR A TIME
EXTENSION TO GOLDEN STATE UTILITY COMPANY FOR INTELLIGENT
TRANSPORTATION SYSTEM CLOVIS AVENUE FROM AMERICAN
AVENUE TO DAKOTA AVENUE, PW00510, (COUNCIL DISTRICTS NO.4
AND 5)
RECOMMENDATION
That the City Council approve Contract Change Order NO.11 with Golden State Utility Company for a Contract
time extension of eighty eight (88) working days and authorize the Public Works Director or his designate to
sign the Change Order on behalf of the City.
EXECUTIVE SUMMARY
On September 23, 2010 Council awarded a construction contract in the amount of $2,682,745.00 to Golden
State Utility Company for Intelligent Transportation System Clovis Avenue from American to Dakota Avenues.
Contract Change Order No.11 will provide a Contract Time extension of eighty-eight (88) working days to
resolve any and all claims for project delays resulting from installation of original contract work, additional work
added or deleted by Contract Change Orders No. 1 through No. 10 and for procurement and delivery of
manufactured project materials and equipment. Change Order No. 11 will also delete the unused Contract bid
item for claims mediation and provide a credit to the City of ($50,000.00).
BACKGROUND
On September 23, 2010 Council awarded a construction contract in the amount of $2,682,745.00 to Golden
State Utility Company for Intelligent Transportation System Clovis Avenue from American to Dakota Avenues.
A Notice to Proceed was issued on January 3,2011 with a contract completion date of June 22,2011.To date,
there have been ten (10) Contract Change Orders approved for a total decrease in Contract Price of
($105,001.46) and no change in Contract Time. The Contract Time has been increased ten (10) working days
for weather delays.
The contract requires the installation of a communication hub cabinet on the northwest corner of Clovis Avenue
and Belmont Avenue. The communication cabinet provides the system connections for the new fiber optic
conductors and equipment installed in Clovis Avenue to the Cal Trans cabinet at Blackstone Avenue and
Highway 180 and to the City Traffic Operations Center (TOC) located at the City Municipal Corporation Yard.
REPORT TOTHECITY COUNCIL
CCO No.11-Intelligent Transportation System Clovis Avenue.Golden StateUtility Company
May 17,2012
Page 2
In order to maintain compatibility with the existing system components throughout the City, the approved
cabinet is manufactured by Rittal Company in Germany. The normal production time for Rittal to manufacture a
cabinet is six to eight weeks plus an additional six weeks for overseas delivery to California. After placing the
cabinet order in December of 2010,the contractor was notified that Rittal had received many large orders from
other customers and that the estimated production time for the Fresno project cabinet would require 27 weeks
plus delivery time. The estimated delivery date was changed from May 2011 to the end of August 2011.The
actual delivery date was September 6,2011.
Contract Change Order No.11 will provide a time extension to the contract of 88 working days for the delayed
delivery of the required cabinet due to circumstances beyond the contractor's control. This change order also
resolves any and all claims related to project delays and will delete the unused bid item for claims mediation for
a credit of ($50,000.00)to the City.
Resolution No.94-114 requires City Council approval of Contract Change Orders which by itself or aggregate
with time increases allowed under previous Contract Change Orders provide a contract time extension equal
to or exceeding thirty days or 20 percent of the total time allowed under the contract,whichever is greater.
FISCAL IMPACT
This Change Order will result in a decrease in Contract Price of ($50,000.00).There will be no impact to the
general fund as a result of this change order.
I:\council reports\construction management div\2012-05-17 contract change order 11 pw00510 rev
2.doc
of Fresno
City of Fresno
PUBLIC WORKS DEPARTMENT
CONSTRUCTION MANAGEMENT DIVISION
1721 Van Ness AVenue• Fresno,CA 93721
Phone(559)621-5600
CONTRACT CHANGE ORDERNO...!!.
_ CITY COUNCIL :...:...J REDEVELOPMENT AGENCY .:.......J INFORMAL
DATE OF AWARD Sep 23.2010
SHEET 1
BID FILE NC).3014-11421
,CONTRACTOR
CONTRACT AWARDED BY:
PROJECT:INTELUGENT TRANSPORTATION SYSTEM CLOVIS,lWE (AMERICAN AVE. TO DAKOTA AVE.)
P.O.NO:OO()O()62620 PROJECT 10 No.PWOO51 0
TO:GOLI)ENSTATE UTILITY.4425FARMS~U:-:'P:-':P~L::=Y::=:D~R"=IV:":E::-;-::C:":E~R:::E:':"S-:C:-:A-::9:-::5307
Youare hfirebyrequestedio mak~the herein described changes from the plallsand specificationsor do the
following'described worknot includedin the plansandspecificationsonthiscontract.
NOTE: THIS CHANGE IS NOT EFFECTIVE UNTIL FULLY EXECUTED.Chan e re uested b : Ci
Description:
I.CHANGES TO CONTRACT PLANS AND SPECIFICATIONS.
A.Delete Lump Sum Bid Item No..52 -Mediator
Lump Sum Decrease to Contract Price $(50,000.00)
II.CONTRACT PRICE
Increase and/or decrease to contract price .shallinclude all costs for the above-noted work and shall be
considered full compensation for all materials,equipment,applicable mark-ups,and overheads.
Total Decrease to Contract Price $(50,000.00)
III.CONTRACT TIME
Extend Contract Time by eighty-eight (88) working days to account for time required to complete all
installations %riginal Contract work added/deleted by Contract Change Orders 1 through 10 inclusive
and work impacted by manufacturer caused procurement delays.
Total Extension of Contract Time 88 Working Days
PrOject Closeoul Agreemenl-Agreement·reached.toSllltle the.oulstandlngitemsassocialed with the cons.tructlol'I.of
the Project.
Contractor and City agree that this Contract Change Order settles all issues, impacts,disputes and claims associated with
construction of Intelligent Transportation System Clovis Avenue (American Avenue to Dakota Avenue)[project].Contractor
hereby waives any right to prompt payment penalties under the California Public Contract Code, if otherwise applicable, related
to theProject.The Contractor hereby also waives any right to additional compensation for Owner caused delay periods,if any,
associated with the work upon this Project.
SUbject to the above waivers, it is hereby agreed by both parties that installation of all equipment on this Project was
substantially completed on December 9, 2011. Likewise, Liquidated Damages equaling thirty-one (31) calander days shall
be charged against the Contractor upon the final recapitulation at the daily rate prescribed within the original Contract.
Revised Contract Price $2,527,743.54 SubstantialComplellon
DATE
contract K Working CalendarDays
ComputedDatefor Completion
Dateof Noticeto Proceed
Weather DaysthroughJuly 15,2011
SuspendedDaysthrough
Extended Datefor Completion
STATEMENT OF CONTRACT TIME-----------------,----._--,---_.._-----
I'NUMBER
1-0FDAYS
.._Timeextensiondaysthis CCO.
Totaltime extensiondaysall CCO's
-5.8%
(105,001.46)
(155,001.46)
2,682,745.00$
$Increase
$(50,000.00)Decrease
$
$
Net change in Contract Price Is
of the original Contract Price
Original Contract Price
Approved Cost Changes to Date
Total of all Contract Changes
including this Change Onder._""-_-,-,-====
Cost ofthis Change Order
Estimated
~"'-__~X~.. .._.
AcceptedDate ......!~'-'-'w...-4,IfT-"'-"-='-'...::..:=-------
Date
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Approvai
SubmittedBy:Terry Buller Recommended "';':A~~12.4~~~~~~---~'--~~~~'£.--
Inspector
Authorized:0 ChiefAdminislrativeOfficer
Ex-officio Executive Director ofotheRedevelopmentAgency
(if change orders or total of change orders exceed 5 percent of centrad price)
Authorized:• CityCouncil 0 Redevelopment Agency Minutesof MeetingDated:
(if changeorderor totalcnangeordersexceed10percentof contractpriceor if illdividuafchangeorder)
exceedsFresnoCityCharterlimit or Section33422 Hearlhand SafetyCodefor Agencycontracts.)
Approved:•Assistant Public Works Director
o Engineer for the Redevelopment Agency Date _
c: JohnStanboullan, ProjectManager
cek k:IProjecIFile.s-PWIPW00510 - IntelligenlTransportalionSystemClovis AvenueICCO'sICCO 11.xls 4/18/2012
This page intentionally left blank.
City of
~~~~...~\I~r.,.C;~~4~REPORT TO THE CITYCOUNCIL
May 17,2012
AGENDA ITEM NO.I E
COUNCIL MEETING 5/17/12
APPROVED BY
DEPARTMENT DIRECTOR
CITY MANAGER
FROM:
BY:
UBJECT:
BRUCE A.RUDD, Interim Director
Parks, After School, Recreation and Community Services Department
SHAUN R.SCHAEFER,Community Recreation Supervisor II :f.f:-
KAREN M. NORRIS, Administrative Manager IlrJ
Parks, After School, Recreation and Community Services Department
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING THE 73
rd
AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION NO. 2011-133
APPROPRIATING $158,200 IN THE PARKS, AFTER SCHOOL, RECREATION AND
COMMUNITY SERVICES DEPARTMENT TO CONDUCT THE INFORMAL SCIENCE
PROGRAM FOR CLOVIS UNIFIED SCHOOL DISTRICT, FRESNO COUNTY OFFICE OF
EDUCATION, FRESNO UNIFIED SCHOOL DISTRICT, AND ST.ANTHONY'S ELEMENTARY
SCHOOL RUNNING THROUGH JUNE 30,2012
RECOMMENDATIONS
Staff recommends that the City Council approve the attached resolution appropriating $158,200 from the
Clovis Unified School District (CUSD), Fresno County Office of Education (FCOE), Fresno Unified School
District (FUSD), and St.Anthony's Elementary School to conduct the Informal Science Programs running
through June 30, 2012. Approval of this appropriation will allow PARCS to receive up to $158,200 to cover
personnel and operating costs associated with providing collaborative After School Informal Science programs
at 15 Elementary Schools.
EXECUTIVE SUMMARY
On October 20, 2010, Resolution No. 2011-212 was approved authorizing the Director of the Parks,After
School, Recreation and Community Services Department (PARCS) to enter into contracts to provide after
school programs. Contracts have been approved for the Informal Science Program at CUSD (Reagan,
Weldon, Jefferson, Miramonte, Oraze), FCOE (San Joaquin Laton, Lowell, Burroughs, King, Sunset), FUSD
(Forkner, Webster, Migrant Education)and St. Anthony's Elementary Schools in Academic Year 2011/2012.
With this funding, PARCS can expand programming opportunities and reach additional customers/participants,
which will increase the number of satisfied community members.
BACKGROUND
In FY 1998, the City of Fresno Parks, Recreation and Community Services (PRCS) Department and Fresno
Unified School District (FUSD) began working together on an Informal Science program at 15 Intermediate
.school sites. In FY 1999, Informal Science program doubled in size to accommodate 30 Intermediate school
REPORT TO THE CITY COUNCIL
Informal Science Program
May 17, 2012
Page 2
sites. In 2002, in collaboration with both FUSD and the National Science Foundation, PARCS built the Mobile
Science Vehicle. The Mobile Science Vehicle delivers hands on science activities to the community through
on-site school programming, including the Dickey and Granny Science Centers,neighborhood parks, and
special events. Both agencies share the vision of energizing young students through hands-on project
building. The Community Science program has become a regional leader in providing science programming to
after school sites throughout the City of Fresno and Fresno County. This partnership with CUSD, FCOE,
FUSD, and St. Anthony's Elementary School ASES and Literacy programs will leverage existing Community
Services Division program resources to become a viable means of service augmentation with no impact to the
General Fund. The Informal Science and Family Science Nights programs will provide youth with positive
learning components during the critical 3:00 p.m. - 6:00 p.m. after school hours.
FISCAL IMPACT
There is no impact to the General Fund as up to $158,200 of revenue will be received from CUSD, FCOE,
FUSD, and St. Anthony's Elementary School as reimbursement for up to $158,200 of program expenses,
which includes a 10% administrative fee.
Attachment: Resolution
2
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO
ADOPTING THE 73
rd AMENDMENT TO THE ANNUAL APPROPRIATION
RESOLUTION NO.2011-133 APPROPRIATING $158,200 IN THE PARKS,
AFTER SCHOOL,RECREATION AND COMMUNITY SERVICES
DEPARTMENT TO CONDUCT THE INFORMAL SCIENCE PROGRAM
FOR CLOVIS UNIFIED SCHOOL DISTRICT, FRESNO COUNTY OFFICE
OF EDUCATION,FRESNO UNIFIED SCHOOL DISTRICT, AND ST.
ANTHONY'S ELEMENTARY SCHOOL RUNNING THROUGH JUNE 30,
2012
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO:
THAT PART III of the Annual Appropriation Resolution No.2011-133 be and is hereby amended
as follows:
TO: PARKS,AFTER SCHOOL,RECREATION &
COMMUNITY SERVICES DEPARTMENT
PARCS Contracted Services
Increase/<Decrease)
$ 158,200
THAT account titles and numbers requiring adjustment by this Resolution are as follows:
PARCS Contracted Services
Revenues:
Account: 33809 Fresno Unified School District
33810 Clovis Unified School District
33822 Other--Services
33847 Fresno County Office of Educat
Fund:24048
Org Unit: 170310
Total Revenues
Appropriations:
Account: 51201 Non-Permanent Salaries
51202 Non-Permanent Fringe
53402 Specialized Services /Tech
56107 Office Supplies
56120 Athletic &Recreation
Fund: 24048
Org Unit: 170310
Total Appropriations
- 1-
$ 35,900
35,700
4,900
81,700
$158.200
$ 73,000
5,800
3,000
2,000
74,400
$158,200
K:IUSERSIDOCSIRESOSIFY 12 AARI12 73rd IS.HJF.docx4/30/20129:17:41 AM
THAT the purpose is to appropriate $158,200 in the PARCS Department to conduct the Informal
Science Program at fifteen elementary schools running through June 30, 2012.
CLERK'S CERTIFICATION
STATE OF CALIFORNIA }
COUNTY OF FRESNO } ss.
CITY OF FRESNO }
I, YVONNE SPENCE,City Clerk of the City of Fresno, certify that the foregoing Resolution was
adopted by the Council of the City of Fresno, California, at a regular meeting thereof, held on the
____Day of , 2012
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:_
Mayor Approval/No Return:_
Mayor Veto:_
Council Override Veto:_
YVONNE SPENCE,CMC
City Clerk
-2-
,2012
,2012
,2012
,2012
K:IUSERSIDOCSIRESOSIFY 12AARI1273rd IS.HJF.docx4/30/20 129:17:41AM
AGENDA ITEM NO.J F
COUNCIL MEETING 5/17/12
APPROVED BY
May 17, 2012
DEPARTMENT DIRECTOR
CITY MANAGER
FROM:
BY:
SUBJECT:
BRUCE RUDD, Interim Director
Parks,After School, Recreation and Community Services Department
SHAUN R.SCHAEFER,Communit)\.R~~tion Supervisor II ~
IRMA YEPEZ-PEREZ,Grant Writer ~•
Parks,After School, Recreation and Community Services Department
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING THE 74
th
AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION NO.2011-133
APPROPRIATING $130,000 FROM THE CALIFORNIA ENDOWMENT BUILDING
HEALTHY COMMUNITIES GRANT IN THE PARKS,AFTER SCHOOL,RECREATION AND
COMMUNITY SERVICES DEPARTMENT FOR RECREATION &CULTURAL ARTS
PROGRAMS AT HOLMES AND ROMAIN NEIGHBORHOOD PARKS
RECOMMENDATIONS
Staff recommends that the City Council approve an appropriation of $130,000 from the California Endowment's
Building Healthy Communities grant award that will continue the implementation of recreation and cultural arts
programs through building partnerships in neighboring communities around Holmes and Romain
Neighborhood Parks.
EXECUTIVE SUMMARY
PARCS is again partnering with Fresno United Neighborhoods (F.U.N.)and the California Endowment's
Building Healthy Communities (BHC) initiative in FY 2013 to continue to provide enhanced site based
programming.PARCS will be utilizing a grant to F.U.N. from the BHC initiative to create recreation and
cultural arts programs that will be operated by existing staff and outside agency specialty instructors at Holmes
and Romain Neighborhood Parks, located in Central and Southeast Fresno. The program will be called
Summer Night Lights (SNL). The goal of the BHC initiative is to empower the participants and neighboring
communities to provide programming desired feedback, which will continue to enable PARCS to create a
customer service based menu of activities. PARCS will continue to partner with such agencies as Fresno
Metro Ministries, Fresno PO, the Center for Multi-cultural Cooperation,and Centro La Familia.
The SNL program will continue to provide a pilot project which will include recreation, youth leadership and
employment development,education and artistic programming at Holmes and Romain parks to reduce gang
violence and create safe environments for youth. Enhanced physical fitness programming brought forward by
the SNL program will include the opening of the Romain swimming pool and the Holmes wader pool, creation
of a walking path at Holmes, evening Summer Basketball League (youth &adult) at Romain, triathlon
instruction, youth sports programs, martial arts courses, drop in recreation and exercise classes. SNL cultural
arts programming will include special events, dance and art classes. SNL community service programming will
include introduction to technology courses, healthy snacks,community building and feedback.
Report to the City Council
Summer Night Lights Program (Grant Funded)
May 24,2012
Page 2 of 2
Thanks to BHC, both Holmes and Romain will have extended programming and hours of operation during the
week; Monday thru Friday from 6 to 9 p.m., and up to 6 hours on Saturdays. The goal for Year 2
implementation is to engage 100 or more youth in SNL activities at each of the two parks.
BACKGROUND
The California Endowment is a private, statewide health foundation that was created in 1996 as a result of Blue
Cross of California's creation of WellPoint Health Networks. The California Endowment's mission is to expand
access to affordable, quality health care for underserved individuals and communities, and to promote
fundamental improvements in the health status of all Californians. As part of this mission, The California
Endowment established a 10-year multi-million dollar commitment and identified 14 communities for strategic
investments. Central and West Fresno were both selected for large investments.
The California Endowment is working with numerous community and faith-based organizations to support the
development of communities where kids and youth are healthy, safe and ready to learn. The success of the
program will be measured by decreases in childhood obesity, youth violence and increases in school
attendance and access to quality health care.
FISCAL IMPACT
There is no impact to the General Fund as up to $130,000 of revenue will be received from F.U.N. as
reimbursement for up to $130,000 of program expenses.
Attachments: Award letter from BHC
AAR
2
~~The
California
Endowment
March 19,2012
Ms.Dana Liberty
Community Services Fresno United Neighborhoods (FUN)Coordinator
Fresno United Neighborhoods
4670 East Butler Avenue
Fresno,CA 93702
Dear Ms.Liberty:
Enclosed is a check for $130,000 representing full payment of this award.
Funds are to be used in accordance with the Grant Agreement
(Agreement).Please know that your compliance with the terms of the
Agreement for this and all other grants from The California Endowment is
considered when reviewing scheduled payments and new funding
proposals.
1000 North
Alameda Street
Los Angeles
CA 90012
213928.8800
FAX 213.928.8801
800.449.4149
Re: File Number 20102017,Fresno United Neighborhoods
Healthy Schools,Healthy Neighborhoods (20102017)
(All correspondence should include this ID number.)
Please adhere to the report schedule listed in the Conditions of Award
section of the Agreement.One month prior to a due date, we will send an
email reminder.The second report is due April 30, 2012.
If you have any questions or concerns,please contact me at 800-449-4149
ext. 8742 (sbozeman@calendow.org)or Program Manager Albert
Maldonado at 559-443-5307 (amaldonado@calendow.org).
Sincerely,
~l~~)
Grants Analyst
Enclosure
www.calendow.org
This page intentionally left blank.
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO
ADOPTING THE 74th AMENDMENT TO THE ANNUAL APPROPRIATION
RESOLUTION NO. 2011-133 APPROPRIATING $130,000 FROM THE
CALIFORNIA ENDOWMENT BUILDING HEALTHY COMMUNITIES GRANT
IN THE PARKS, AFTER SCHOOL, RECREATION AND COMMUNITY
SERVICES DEPARTMENT FOR RECREATION AND CULTURAL ARTS
PROGRAMS AT HOLMES AND ROMAIN NEIGHBORHOOD PARKS
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO:
THAT PART III of the Annual Appropriation Resolution No. 2011-133 be and is hereby amended
as follows:
TO: PARKS, AFTER SCHOOL, RECREATION &
COMMUNITY SERVICES DEPARTMENT
Parks BHC Grant
Increase/(Decrease)
$ 130,000
THAT account titles and numbers requiring adjustment by this Resolution are as follows:
Parks BHC Grant
Revenues:
Account: 33403 Local-Grant
Fund: 22088
Org Unit: 170302
Total Revenues
Appropriations:
Account: 51101 Permanent Salaries
51102 Permanent Fringe
51201 Non-Permanent Salaries
51202 Non-Permanent Fringe
53402 Specialized Services ITech
54101 Utilities
54501 Buildings &Improvements
56120 Athletic &Recreation
Fund: 22088
Org Unit: 170302
Total Appropriations
- 1-
$ 130,000
$130,000
s 30,600
9,100
38,700
3,000
8,000
5,000
21,800
7,000
$123,200
K:IUSERSIDOCSIRESOSIFY 12 AAR\l2 74th BHC.IUF.docx5/41201211 :20:09 AM
Appropriations:
Account:51201 Non-Permanent Salaries
51202 Non-Permanent Fringe
Fund: 22088
Org Unit:170305
Total Appropriations
$
Increase/<Decrease)
6,300
500
$6,800
THAT the purpose is to appropriate $130,000 in the Parks,After School,Recreation and
Community Services Department to conduct recreation and cultural arts programs at Holmes and
Romain Neighborhood Parks.
CLERK'S CERTIFICATION
STATE OF CALIFORNIA}
COUNTY OF FRESNO } ss,
CITY OF FRESNO }
I, YVONNE SPENCE,City Clerk of the City of Fresno,certify that the foregoing Resolution was
adopted by the Council of the City of Fresno,California,at a regular meeting thereof, held on the
____Dayof ,2012
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:_
Mayor Approval/No Return:_
Mayor Veto:_
Council Override Veto:_
YVONNE SPENCE,CMC
City Clerk
-2-
,2012
,2012
,2012
,2012
K:IUSERSIDOCSIRESOSIFY 12 AARI12 74th BHC.fUF.docx5/4/201211 :20:09 AM
City of
~.,~~...~I~
rnK:;;;~I~~.~REPORT TO THE CITYCOUNCIL AGENDA ITEM NO.J G
COUNCIL MEETING 05/17/2012
APPROVED BY
DEPARTMENT DIRECTOR;UuL~CITY MANAGER
May 17, 2012
FROM:
BY:
RENENA SMITH,Assistant City Manager t/J_
City Manager's Office .r
CRYSTAL SMITH,Management Analyst 11I0/
Finance DepartmentlCDBG Section
SUBJECT:A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING THE 76
TH
AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION NO.2011-133
APPROPRIATING $130,000 OF CDBG-R FUNDS FOR VARIOUS PARKS IMPROVEMENT
PROJECTS;APPROPRIATING $145,200 OF NSP FUNDS FOR STAFF
ADMINISTRATION COSTS; AND AUTHORIZING THE CITY MANAGER TO SIGN ALL
IMPLEMENTING DOCUMENTS AS APPROVED TO FORM BY THE CITY ATTORNEY
RECOMMENDATIONS
Staff recommends the City Council approve:
1.Appropriating the residual CDBG-R funds of $130,000 for park improvements at various
neighborhood parks;
2.Increasing NSP appropriations by $145,200 for administration activities related to staff
salaries;and
3.Authorize the City Manager to sign all implementing documents as approved to form by the
City Attorney.
EXECUTIVE SUMMARY
The City of Fresno was the recipient of NSP1 funds in 2008 and Community Development Block Grant
ARRA (CDBG-R)funds in 2009.Both funding sources were provided through the Department of
Housing and Urban Development (HUD). The NSP funds address the foreclosure crisis.A
reconciliation of the program recognizes the necessity to allocate additional appropriations to fully
fund staff administrative costs.The CDBG-R program planned projects have been completed and the
reconciliation resulted in residual funds that must be expended prior to the deadline of September
30,2012.The funds will be used to install energy-efficient field lighting improvements at park sites
throughout the City.
BACKGROUND
The City received $2,047,341 of ARRA funding in 2009 for use on community development projects that
may not otherwise have been completed because of an ailing economy.Funding went to rehabilitate
community centers $500,000;rehabilitate homes in Lowell Neighborhood $497,300;make street
improvements $900,000;and paint homes of senior citizens $150,000.Cost savings were realized from
the various completed projects and staff requests that the savings be appropriated in the amount of
Page 2
Report to the City Council
Grant Fund Appropriations
$130,000 for a project that can be completed immediately.The City will be required to return the money
to HUD if the funds are not expended by September 30,2012.Therefore it is imperative that a project be
identified that is ready to execute and meets the strict HUD criteria for CDBG-R funding.An analysis of
ready to go projects was performed to determine the best and most expedient use of the funding.As
such, the PARCS Department proposes to retrofit existing field lighting by installing a computerized system
that will help control, monitor and manage the field lights. The computerized system known as Musco would
allow the city to upgrade the field lighting at all of the older parks. Lighting schedules are entered based on the
field reservations, and/or seasonal adjustments. The system will reduce energy costs and improve efficiency
by reducing the number of fixtures that are operating when there is limited use of the park or inclement
weather. The system also allows real-time adjustments to lighting schedules to accommodate reservations for
league play. An extensive analysis quantified the energy savings at 318,930 KWh per year. At an average
cost of .12¢ per KWh, the city will save $38,272 in annual energy costs. The PARCS Department will also
benefit from significant long-term labor cost savings by eliminating the need for staff to physically visit each
park site to turn off the light controls or reset the timers. Staff has determined that In addition to the energy
savings, the Musco lighting improvements at six (6) of our city park sites currently save operating costs,
improve service, and reduce labor hours that can be redeployed to other value-added activities. Staff currently
spends up to 200 hours per year adjusting the lighting controls at parks with non-Musco lighting controls. Most
importantly, there are improved services at the parks and a reduction in the number of calls from area
residents concerned about lights that are left on. Not to mention the opportunity to reach targeted
environmental goals to help make Fresno a sustainable community.
The City was the recipient of $10,969,169 of NSP funding to address and revitalize neighborhoods
impacted by the foreclosure crisis. During the fiscal year staff charged salaries for work on NSP
activities to the Community Development Block Grant (CDBG)which needs to be reallocated.NSP has
generated $1.135 million of program income and can accommodate the staff salaries previously
charged to the CDBG Program. As such,staff proposes to appropriate $145,200 of the $1.135 million
of NSP program income earned in FY 2012 to reallocate salary expenses to the appropriate funding
source.The amount requested covers staff in the Housing Division and the CDBG Section of the
Finance Department.
FISCAL IMPACT
The NSP program will recognize a fiscal impact of $145,200 related to employee costs that were
inadvertently charged to the CDBG Program. The CDBG program will be adjusted to correct the
overcharge of staff time. This is a housekeeping item to close out fiscal year 2012. There is no impact
to the general fund.
There is no additional fiscal impact in utilizing the available CDBG-R funding provided by the federal
government.
Attachments:
Annual Appropriations Resolution 2011-133, 76
th Amendment
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING
THE 76TH AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION
NO.2011-133 APPROPRIATING $130,000 OF CDBG-R FUNDSFORVARIOUS
PARKS IMPROVEMENT PROJECTS;APPROPRIATING $145,200 OF NSP
FUNDS FOR STAFF ADMINISTRATION COSTS
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO:
THAT PART 11/of the Annual Appropriation Resolution No.2011-133 be and is hereby amended as
follows:
TO:BUDGET AND MANAGEMENT STUDIES
Neighborhood Stabilization Program
DEVELOPMENT AND RESOURCE MANAGEMENT
Neighborhood Stabilization Program
PARKS,AFTER SCHOOL,RECREATION &
COMMUNITY SERVICES DEPARTMENT
CDBG-R (ARRA)
Increase/{Decrease)
$ 30,200
$ 115,000
$ 130,000
THAT account titles and numbers requiring adjustment by this Resolution are as follows:
Neighborhood Stabilization Program
Revenues:
Account:33117 NSP Program Income
Fund:20515
Org Unit: 109901
Total Revenues
Appropriations:
Account:51101 Permanent Salaries
Fund:20515
Org Unit:400603
Total Appropriations
Account:51101 Permanent Salaries
Fund:20515
Org Unit:550103
Total Appropriations
$ 145,200
$145,200
$ 115,000
$115,000
$ 30,200
$30,200
C:IDocuments and SettingslCrystals.FRESNOILocal S~tti'lg~ITemporary Internet FileslContent.OutiooklR7H52UD7112 76th ANA.docx
CDBG-R (ARRA)
Revenues:
Account: 33101 Fed-Allocation &Entitlement
Fund: 20517
Org Unit: 109901
Total Revenues
Appropriations:
Account: 57301 Improvements
Account: 59105 Purchasing - Variable Charge
Fund: 20517
Org Unit: 179901
Project 10:PC00119
Total Appropriations
Increase/{Decrease)
$130,000
$130,000
$128,000
2,000
$130,000
THAT the purpose is to appropriate $145,200 of program income generated from the Neighborhood
Stabilization Program and increase appropriation to permanent salaries for staff time on NSP activities,
The remaining program income will remain undesignated capital for construction expenditures and
homebuyer assistance.To appropriate $130,000 of residual funding from completed CDBG-R (ARRA)
projects to the PARCS Department to complete an energy efficiency lighting project.
C:IDocuments and SettingslCrystals.FRESNOILocal S~tti21~ITemporary Internet FileslContent.OutlooklR7H52UD7112 76th ANA.docx
CLERK'S CERTIFICATION
STATE OF CALIFORNIA }
COUNTY OF FRESNO } ss.
CITY OF FRESNO }
I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing Resolution was
adopted by the Council of the City of Fresno, California, at a regular meeting thereof, held on the
____Day of , 2012
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:"2012
Mayor Approval/No Return:, 2012
Mayor Veto:, 2012
Council Override Veto:, 2012
YVONNE SPENCE, CMC
City Clerk
C:\Documents and Settings\Crystals.FRESNO\Local Se..tti39~\Temporary Internet Files\Content.Outlook\R7H52UD7\12 76th ANA.docx
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May 17, 2012
City of
~~~~...~I~
rn-=Q;~~~REPORT TO THE CITY COUNCIL
FROM:
BY:
AGENDA ITEM NO.I H
COUNCIL MEETING 05/17/12
AP~RO~OEPA~~L
CITY MANAGER ~
PATRICK N. WIEMILLER, Director
Public Works Department
KELLY S. RIDDLE, Facilities Manager lJjv/Q
Public Works Department, Facilities anrttajor Projects Division
MARK M. JOHNSON, Public Works Manager
Public Works Department, Facilities and Major Projects Division
SUBJECT: APPROVE AN AGREEMENT WITH BROOKS-RANSOM ASSOCIATES IN THE
AMOUNT OF $78,000 FOR THE PREPARATION OF CONSTRUCTION
DOCUMENTS FOR THE SCHOETTLER CONVENTION CENTER REROOF AND
HVAC UPGRADE PROJECT, AS WELL AS AUTHORIZATION FOR THE PUBLIC
WORKS DIRECTOR OR HIS DESIGNEE TO SIGN THE AGREEMENT ON THE
CITY'S BEHALF(COUNCIL DISTRICT NO.3)
RECOMMENDATION
Staff recommends that the City Council approve an agreement with Brooks-Ransom Associates in the
amount of $78,000 for the preparation of construction documents for the Schoettler Convention Center
Reroof and Heating, Ventilating and Air Conditioning (HVAC)Upgrade Project, as well as authorization for
the Public Works Director or his designee to sign the agreement on the City's behalf.
EXECUTIVE SUMMARY
The Schoettler Convention Center (SCC) was constructed in the late 1960's and the existing roof system and
mechanical system were last replaced in the 1980's. These elements have far exceeded their life
expectancies. The roof system experiences chronic leaking during the rainy seasons, which has saturated
the roof insulation and continues to damage the facility's interior finishes and infrastructure. The Public
Works Department is proposing to remove and replace the roof system and upgrade the HVAC systems at
the SCC. This agreement will provide for contract bid documents and support for bid and construction for the
Schoettler Convention Center Reroof and HVAC Upgrade Project.
Funding for this project comes from the 2008 Fresno Joint Powers Financing Authority Lease Revenue
Bonds and is included in the FY2012 budget.
BACKGROUND
The SCC is located at 717 M Street, Fresno, CA, adjacent to the Downtown Radisson Hotel. The facility is
owned by the City of Fresno and operated by the Radisson Hotel. Under lease agreement, the Radisson
Hotel provides the maintenance for the mechanical systems on the roof and has contracted with Trane to
perform this function. The SCC was constructed in the late 1960's and the roof system and mechanical
system, which were replaced in the 1980's have far exceeded their life expectancies.
REPORT TO THE CITY COUNCIL
Agreement -Schoettler Convention Center Reroof and HVAC Upgrade Project
May 17,2012
Page 2
The roof system is in very poor condition such that the roof experiences chronic leaking during the rainy
seasons. This leakage has saturated the roof insulation and continues to damage the facility's interior
finishes and infrastructure. According to the structural analysis, the weight of the 8 inches of saturated
Pearlite Board insulation, when added to the original design loads, overstresses major frame elements by up
to 31% in bending. The stresses resulting from this loading condition have exceeded minimum standards
prescribed by the California Building Code. The Public Works Department is therefore proposing to remove
and replace the roof system. The scope of work will include the removal of existing roof system insulation,
base flashings, patches, mastic, damaged roof sheathing, and related flashings down to wall and deck
substrates, and furnishing and installing a new 60 millimeter Thermoplastic Membrane Roof System with
X inch gypsum cover board and two (2) layers of 2 inch high thermal insulation mechanically attached to the
metal roof deck. The current wall braces will be redesigned to replace the current wall angle-iron wall braces
with new tube steel supports which will allow for incorporation of new standardized flashing elements, which
provide for a better seal.
.The existing HVAC system was installed in the 1980's and is well beyond its service life. The existing units
are in very poor operating condition and are unreliable, and some portions of the units have not functioned
for more than a year. The existing HVAC equipment uses R-22 refrigerant, which is being phased out by
2020. The cost to purchase this refrigerant has more than tripled in the past year due to EPA regulations.
Additionally, the cost to retrofit the equipment to utilize the new substitute refrigerant is estimated to exceed
the costs of unit replacement; and, we would lose both thermal and electrical efficiencies. The Public Works
Department is recommending replacing the HVAC system and associated controls. The scope of work
.includes the replacements of the existing roof mounted air conditioning units, kitchen make-up air unit, hot
water boiler, hot water pumps, exhaust fans (not including the kitchen hood fans), variable air volume
boxes and HVAC control system.Structural calculations will be provided for support of the mechanical
units. The new equipment will be more energy efficient and cost effective to operate. The old unreliable
pneumatic control system will be replaced with a Direct Digital Control (DOC) energy management system,
which is energy efficient, reliable, and user friendly for maintenance and scheduling of events, etc.
The Public Works Department is requesting the approval from Council for an agreement with Brooks-
Ransom Associates to provide contract bid documents and construction support for the reroofing and HVAC
upgrade on the Schoettler BUilding for a contract amount of $78,000. Staff also requests authorization for
the Public Works Director or his designee to sign the agreement on the City's behalf.
FISCAL IMPACT
This project was adopted by Council in the Department of Public Works Fiscal Year 2012 Budget and is
completely funded. The funding source is the 2008 Fresno Joint Powers FinancingAuthority Lease Revenue
Bonds. These bonds were issued for the Convention Center Phase II and Phase III projects. Bond fund
proceeds of $1.6 million are still available as some of the initial projects identified when the bonds were
issued cost less than the estimated amounts approved by Council. In addition, the Convention Center Air
Handler and Schoettler Roof projects were put on hold, which accounts for approximately $1.2 million of the
remaining funds.
Council approved using the remaining proceeds to complete the Schoettler Building reroofing ($800,000),
HVAC upgrade ($418,000) and remaining minor projects at Selland Arena ($394,500) as part of the FY 2012
Adopted Budget. Current cost estimates to complete these projects total $1.6 million so will require the
entire amount of remaining bond proceeds.
REPORT TOTHECITY COUNCIL
Agreement - Schoettler Convention CenterReroofandHVAC Upgrade Project
May17,2012
Page3
An alternate use of the remaining bond proceeds would be to use the funds for debt service payments on the
bonds.Currently,the debt service payment is made from the General Fund. The remaining amount would
pay approximately one-half the annual debt service payment in FY 2013 after ensuring that all existing
project expenditures are paid for.
Attachment:
-Consultant Agreement
This page intentionally left blank.
AGREEMENT
CITY OF FRESNO,CALIFORNIA
CONSULTANT SERVICES
THIS AGREEMENT is made and entered into effective the __day of April, 2012, by
and between the CITY OF FRESNO, a California municipal corporation (hereinafter referred to
as "CITY"), and Brooks-Ransom Associates, a California Corporation (hereinafter referred to as
"CONSULTANT").
RECITALS
WHEREAS,CITY desires to obtain professional Structural Engineering services for
Schoettler Convention Center Roof Project,hereinafter referred to as the "Project;" and
WHEREAS,CONSULTANT is engaged in the business of furnishing technical and
expert services as a Structural Engineer and hereby represents that it desires to and is
professionally and legally capable of performing the services called for by this Agreement;and
WHEREAS,CONSULTANT acknowledges that this Agreement is subject to the
requirements of Fresno Municipal Code Section 4-107 and Administrative Order No. 6-19; and
WHEREAS, this Agreement will be administered for CITY by its Public Works Director
(hereinafter referred to as "Director")or his/her designee.
AGREEMENT
NOW,THEREFORE,in consideration of the foregoing and of the covenants,conditions,
and promises hereinafter contained to be kept and performed by the respective parties, it is
mutually agreed as.follows:
1. Scope of Services.CONSULTANT shall perform to the satisfaction of CITY the
services described in Exhibit A,including all work incidental to, or necessary to perform, such
services even though not specifically described in Exhibit A.
2. Term of Agreement and Time for Performance. This Agreement shall be
effective from the date first set forth above and shall continue in full force and effect through the
earlier of complete rendition of the services hereunder or April 15, 2014,SUbject to any earlier
termination in accordance with this Agreement.The services of CONSULTANT as described in
Exhibit A are to commence upon CITY'S issuance of a written "Notice to Proceed."Work shall
be undertaken and completed in a sequence assuring expeditious completion, but in any event,
all such services shall be completed within 730 consecutive calendar days from such
authorization to proceed.
3.Compensation.
(a)CONSULTANTS sole compensation for satisfactory performance of all
services required or rendered pursuant to this Agreement shall be a total fee of $78,000.00,and
a contingency amount not to exceed $5,000.00 for any additional work rendered pursuant to
Subsection (c) below and authorized in writing by the Director. Such fees include all expenses
incurred by CONSULTANT in performance of such services.
(b) Detailed statements shall be rendered monthly and will be payable in the
normal course of CITY business.
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(c) The parties may modify this Agreement to increase or decrease the
scope of services or provide for the rendition of services not required by this Agreement, which
modification shall include an adjustment to CONSULTANTS compensation.Any change in the
scope of services must be made by written amendment to the Agreement signed by an
authorized representative for each party.CONSULTANT shall not be entitled to any additional
compensation if services are performed prior to a signed written amendment.
4. Termination. Remedies and Force Majeure.
(a) This Agreement shall terminate without any liability of CITY to
CONSULTANT upon the earlier of: (i)CONSULTANTS filing for protection under the federal
bankruptcy laws, or any bankruptcy petition or petition for receiver commenced by a third party
against CONSULTANT; (ii) 7 calendar days prior written notice with or without cause by CITY to
CONSULTANT;(iii) CITY'S non-appropriation of funds sufficient to meet its obligations
hereunder during any CITY fiscal year of this Agreement, or insufficient funding for the Project;
or (iv)expiration of this Agreement..
(b)Immediately upon any termination or expiration of this Agreement,
CONSULTANT shall'(i)immediately stop all work hereunder; (ii)immediately cause any and all
of its subcontractors to cease work; and (iii) return to CITY any and all unearned payments and
all properties and materials in the possession of CONSULTANT that are owned by CITY.
Subject to the terms of this Agreement,CONSULTANT shatl be paid compensation for services
satisfactorily performed prior to the effective date of termination.CONSULTANT shall not be
paid for any work or services performed or costs incurred which reasonably could have been
avoided.
(c) In the event of termination due to failure of CONSULTANT to satisfactorily
perform in accordance with the terms of this Agreement, CITY may withhold an amount that
would otherwise be payable as an offset to, but not in excess of,CITY'S damages caused by
such failure. In no event shall any payment by CITY pursuant to this Agreement constitute a
waiver by CITY of any breach of this Agreement which may then exist on the part of
CONSULTANT,nor shall such payment impair or prejudice any remedy available to CITY with
respect to the breach.
(d) Upon any breach of this Agreement by CONSULTANT,CITY may
(i) exercise any right, remedy (in contract, law or equity), or privilege which may be available to
it under applicable laws of the State of California or any other applicable law; (ii) proceed by
appropriate court action to enforce the terms of the Agreement;and/or (iii) recover all direct,
indirect, consequential,economic and incidental damages for the breach of the Agreement. If it
is determined that CITY improperly terminated this Agreement for default,such termination shall
be deemed a termination for convenience.
(e)CONSULTANT shall provide CITY with adequate written assurances of
future performance, upon Director's request, in the event CONSULTANT fails to comply with
any terms or conditions of this Agreement.
(f)CONSULTANT shall be liable for default unless nonperformance is
caused by an occurrence beyond the reasonable control of CONSULTANT and without its fault
or negligence such as, acts of God or the public enemy, acts of CITY in its contractual capacity,
fires, floods, epidemics,quarantine restrictions, strikes,unusually severe weather, and delays of
common. carriers.CONSULTANT shall notify Director in writing as soon as it is reasonably
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possible after the commencement of any excusable delay, setting forth the full particulars in .
connection therewith, and shall remedy such occurrence with all reasonable dispatch, and shall
promptly give written notice to Director of the cessation of such occurrence.
5. Confidential Information. Ownership of Documents and Copyright License.
(a) Any reports, information, or other data prepared or assembled by
CONSULTANT pursuant to this Agreement shall not be made available to any individual or
organization by CONSULTANT without the prior written approval of CITY. During the term of
this Agreement, and thereafter,CONSULTANT shall not,without the prior written consent of
CITY, disclose to anyone any Confidential Information. The term Confidential Information for
the purposes of this Agreement shall include all proprietary and confidential information of CITY,
including but not limited to business plans, marketing plans, financial information, designs,
drawings, specifications, materials, compilations, documents, instruments, models, source or
object codes and other information disclosed or submitted, orally, in writing, or by any other
medium or media. All Confidential Information shall be and remain confidential and proprietary
inCITV.
(b) Any and all original sketches, pencil tracings of working drawings, plans,
computations,specifications,computer disk files, writings and other documents prepared or
provided by CONSULTANT pursuant to this Agreement are the property of CITY at the time of
preparation and shall be turned over to CITY upon expiration or termination of the Agreement or
default by CONSULTANT.CONSULTANT grants CITY a copyright license to use such
drawings and writings.CONSULTANT shall not permit the reproduction or use thereof by any
other person except as otherwise expressly provided herein. CITY may modify the design
including any drawinqs or writings. Any use by CITY of the aforesaid sketches, tracings, plans,
computations,specifications,computer disk files, writings and other documents in completed
form as to other projects or extensions of this Project, or in uncompleted form,without specific
written verification by CONSULTANT will be at CITY'S sole risk and without liability or legal
exposure to CONSULTANT.CONSULTANT may keep a copy of all drawings and
specifications for its sole and exclusive use.
(c)If CONSULTANT should subcontract all or any portion of the services to
be performed under this Agreement,CONSULTANT shall cause each subcontractor to also
comply with the requirements of this Section 5.
(d) This Section 5 shall survive expiration or termination of this Agreement.
6. Professional Skill. It is further mutually understood and agreed by and between
the parties hereto that inasmuch as CONSULTANT represents to CITY that CONSULTANT and
its subcontractors,if any, are skilled in the profession and shall perform in accordance with the
standards of said profession necessary to perform the services agreed to be done by it under
this Agreement, CITY relies upon the skill of CONSULTANT and any subcontractors to do and
perform such services in a skillful manner and CONSULTANT agrees to thus perform the
services and require the same of any subcontractors.Therefore, any acceptance of such
services by CITY shall not operate as a release of CONSULTANT or any subcontractors from
said professional standards.
7. Indemnification. To the furthest extent allowed by law,CONSULTANT shall
indemnify, hold harmless and defend CITY and each of its officers, officials, employees, agents
and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damaqes
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(whether in contract, tort or strict liability, including but not limited to personal injury, death at
any time and property damage), and from any and all claims,demands and actions in law or
equity (including reasonable attorney's fees and litigation expenses)that arise out of, pertain to,
or relate to the negligence,recklessness or willful misconduct of CONSULTANT,its principals,
officers, employees, agents or volunteers in the performance of this Agreement.
If CONSULTANT should subcontract all or any portion of the services to be performed
under this Agreement,CONSULTANT shall require each subcontractor to indemnify, hold
harmless and defend CITY and each of its officers, officials, employees, agents and volunteers
in accordance with the terms of the preceding paragraph.
This section shall survive termination or expiration of this Agreement.
8. Insurance.
(a)Throughout the life of this Agreement,CONSULTANT shall pay for and
maintain in full force and effect all insurance as required in Exhibit 8 or as may be authorized in
writing by CITY'S Risk Manager or his/her designee at any time and in his/her sole discretion.
(b) If at any time during the life of the Agreement or any extension,
CONSULTANT or any of its subcontractors fail to maintain any required insurance in full force
and effect, all services and work under this Agreement shall be discontinued immediately,and
all payments due or that become due to CONSULTANT shall be withheld uritil notice is received
by CITY that the required insurance has been restored to full force and effect and that the
premiums therefore have been paid for a period satisfactory to CITY. Any failure to maintain the
required insurance shall be sufficient cause for CITY to terminate this Agreement.No action
taken by CITY pursuant to this section shall in any way relieve CONSULTANT of its
responsibilities under this Agreement.The phrase "fail to maintain any required insurance"shall
include,without limitation,notification received by CITY that an insurer has commenced
proceedings,or has had proceedings commenced against it, indicating that the insurer is
insolvent.
(c) The fact that insurance is obtained by CONSULTANT shall not be
deemed to release or diminish the liability of CONSULTANT,including,without limitation, liability
under the indemnity provisions of this Agreement. The duty to indemnify CITY shall apply to all
claims and liability regardless of whether any insurance policies are applicable. The policy limits
do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT.
Approval or purchase of any insurance contracts or policies shall in no way relieve from liability
nor limit the liability of CONSULTANT,its principals, officers, agents, employees, persons under
the supervision of CONSULTANT,vendors, suppliers, invitees, consultants,sub-consultants,
subcontractors,or anyone employed directly or indirectly by any of them.
(d) Upon request of CITY,CONSULTANT.shall immediately furnish CITY
with a complete copy of any insurance policy required under this Agreement,.including all
endorsements,with said copy certified by the underwriter to be a true arid correct copy of the
original policy. This requirement shall survive expiration or termination of this Agreement.
(e) If CONSULTANT should subcontract all or any portion of the services to
be performed under this Agreement,CONSULTANT shall require each subcontractor to provide
insurance protection in favor of CITY and each of its officers, officials, employees, agents and
volunteers in accordance with the terms of this section, except that any required certificates and
applicable endorsements shall be on file with CONSULTANT and CITY prior to the
commencement of any services by the subcontractor.
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9. Conflict of Interest and Non-Solicitation.
(a) Prior to CITY'S execution of this Agreement,CONSULTANT shall
complete a City of Fresno conflict of interest disclosure statement in the form as set forth in
Exhibit C. During the term of this Agreement,CONSULTANT shall have the obligation and
duty to immediately notify CITY in writing of any change to. the information provided by
CONSULTANT in such statement.
(b)CONSULTANT shall comply, and require its subcontractors to comply,
with all applicable (i) professional canons and requirements governing avoidance of
impermissible client conflicts; and (ii) federal, state and local conflict of interest laws and
regulations including, without limitation, California Government Code Section 1090 et. seq., the
California Political Reform Act (California Government Code Section 87100 et. seq.), the
regulations of the Fair Political Practices Commission concerning disclosure and disqualification
(2 California Code of Regulations Section 18700 et. seq.) and Section 4-112 of the Fresno
Municipal Code (Ineligibility to Compete). At any time, upon written request of CITY,
CONSULTANT shall provide a written opinion of its legal counsel and that of any subcontractor
that,after a due diligent inquiry,CONSULTANT and the respective subcontractor(s)are in full
compliance with all laws and regulations.CONSULTANT shall take, and require its
subcontractors to take, reasonable steps to avoid any appearance of a conflict of interest. Upon
discovery of any facts giving rise to the appearance of a conflict of interest,CONSULTANT shall
immediately notify CITY of these facts in writing.
(c) In performing the work or services to be provided hereunder,
CONSULTANT shall not employ or retain the services of any person while such person either is
employed by CITY or is a member of any CITY council, commission, board, committee, or
similar CITY body. This requirement may be waived in writing by the City Manager, if no actual
or potential conflict is involved.
(d)CONSULTANT represents and warrants that it has not paid or agreed to
pay any compensation, contingent or otherwise, direct or indirect, to solicit or procure this
Agreement or any rights/benefits hereunder.
(e) Neither CONSULTANT,nor any of CONSULTANT'S subcontractors
performing any services on this Project, shall bid for, assist anyone in the preparation of a bid
for, or perform any services pursuant to, any other contract in connection with this Project.
CONSULTANT and any of its subcontractors shall have no interest, direct or indirect, in any
other contract wifh a third party in connection with this Project unless such interest is in
accordance with all applicable law and fully disclosed to and approved by the City Manager, in
advance and in writing.
(f) If CONSULTANT should subcontract all or any portion of the' work to be
performed or services to be provided under this Agreement,CONSULTANT shall include the
provisions of this Section 9 in each subcontract and require its subcontractors to comply
therewith.
(g) This Section 9 shall survive expiration or termination of this Agreement.
10. Recycling Program. In the event CONSULTANT maintains an office or operates
a facility(ies),or is required herein to maintain or operate same, within the incorporated limits of
the City of Fresno,CONSULTANT at its sole cost and expense shall:
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(i)Immediately establish and maintain a viable and ongoing recycling program,
approved by CITY'S Solid Waste Management Division, for each office and
facility. Literature describing CITY recycling programs is available from CITY'S
Solid Waste Management Division and by calling City of Fresno Recycling
Hotline at (559) 621-1111 ..
(ii)Immediately contact CITY'S Solid Waste Management Division at
(559) 621-1452 and schedule a free waste audit, and cooperate with such
Division in their conduct of the audit for each office and facility.
(iii) Cooperate with and demonstrate to the satisfaction of CITY'S Solid Waste
Management Division the establishment of the recycling program in
paragraph (i) above and the ongoing maintenance thereof.
11. General Terms.
(a) Except as otherwise provided by law, all notices expressly required of
CITY within the body of this Agreement,and not otherwise specifically provided for, shall be
effective only if signed by the Director or his/her designee.
(b) Records of CONSULTANTS expenses pertaining to the Project shall be
kept on a generally recognized accounting basis and shall be available to CITY or its authorized
representatives upon request during regular business hours throughout the life of this
Agreement and for a period of three years after final payment or, if longer, for any period
required by law. In addition, all books, documents, papers, and records of CONSULTANT
pertaining to the Project shall be available for the purpose of making audits, examinations,
excerpts, and transcriptions for the same period of time. If any litigation, claim, negotiations,
audit or other action is commenced before the expiration of said time period, all records shall be
retained and made available to CITY until such action is resolved, or until the end of said time
period whichever shall later occur. If CONSULTANT should subcontract all or any portion of the
services to be performed under this Agreement,CONSULTANT shall cause each subcontractor
to also comply with the requirements of this paragraph. This Section 11(b) shall survive
expiration or termination of this Agreement.
(c) Prior to execution of this Agreement by CITY,CONSULTANT shall have
provided evidence to CITY that CONSULTANT is licensed to perform the services called for by
this Agreement (or that no license is required). If CONSULTANT should subcontract all or any
portion of the work or services to be performed under this Agreement,CONSULTANT shall
require each subcontractor to provide evidence to CITY that subcontractor is licensed to
perform the services called for by this Agreement (or that no license is required) before
beginning work.
12.Nondiscrimination.To the extent required by controlling federal, state and local
law,CONSULTANT shall not employ discriminatory practices in the provision of services,
employment of personnel, or in any other respect on the basis of race, religious creed,color,
national origin, ancestry, physical disability, mental disability, medical condition, marital status,
sex, age, sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam
era. SUbject to the foregoing and during the performance of this Agreement,CONSULTANT
agrees as follows:
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(a)CONSULTANT will comply with all applicable laws and regulations
providing that no person shall, on the grounds of race, religious creed, color, national origin,·
ancestry, physical disability, mental disability, medical condition, marital status, sex, age, sexual
orientation,ethnicity,status as a disabled veteran or veteran of the Vietnam era be excluded
from participation in, be denied the benefits of, or be subject to discrimination under any
program or activity made possible by or resulting from this Agreement.
(b)CONSULTANT will not discriminate against any employee or applicant for
employment because of race, religious creed, color, national origin, ancestry, physical disability,
mental disability, medical condition, marital status, sex, age, sexual orientation, ethnicity, status
as a disabled veteran or veteran of the Vietnam era.CONSULTANT shall ensure that
applicants are employed, and the employees are treated during employment, without regard to
their race, religious creed, color, national origin, ancestry, physical disability, mental disability,
medical condition, marital status, sex, age, sexual orientation, ethnicity, status as a disabled
veteran or veteran of the Vietnam era. Such requirement shall apply to CONSULTANT'S
employment practices including, but not be limited to, the following: employment, upgrading,
demotion or transfer;recruitment or recruitment advertising; layoff or termination; rates of payor
other forms of compensation; and selection for training, including apprenticeship.
CONSULTANT agrees to post in conspicuous places, available to employees and applicants for
employment, notices setting forth the provision of this nondiscrimination clause.
(c)CONSULTANT will, in all solicitations or advertisements for employees
placed by or on behalf of CONSULTANT in pursuit hereof, state that all qualified applicants will
receive consideration for employment without regard to race, religious creed, color, national
origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age,
sexual orientation, ethnicity, status as a disabled veteran or veteran of the Vietnam era.
(d)CONSULTANT will send to each labor union or representative of workers
with which it has a collective bargaining agreement or other contract or understanding, a notice
advising such labor union or workers' representatives of CONSULTANT'S commitment under
this section and shall post copies of the notice in conspicuous places available to employees
and applicants for employment.
(e) If CONSULTANT should subcontract all or any portion of the services to
be performed under this Agreement,CONSULTANT shall cause each subcontractor to also
comply with the requirements of this Section 12.
13.Independent Contractor.
(a) In the furnishing of the services provided for herein,CONSULTANT is
acting solely as an independent contractor. Neither CONSULTANT,nor any of its officers,
agents or employees shall be deemed an officer, agent, employee,joint venturer, partner or
associate of CITY for any purpose. CITY shall have no right to control or supervise or direct the
manner or method by which CONSULTANT shall perform its work and functions. However,
CITY shall retain the right to administer this Agreement so as to verify that CONSULTANT is
performing its obligations in accordance with the terms and conditions thereof.
(b) This Agreement does not evidence a partnership or joint venture between
CONSULTANT and CITY.CONSULTANT shall have no authority to bind CITY absent CITY'S
express written consent. Except to the extent otherwise provided in this Agreement,
CONSULTANT shall bear its own costs and expenses in pursuit thereof.
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(c) Because of its status as an independent contractor, CONSULTANT and
its officers, agents and employees shall have absolutely no right to employment rights and
benefits available to CITY employees. CONSULTANT shall be solely liable and responsible for
all payroll and tax withholding and for providing to, or on behalf of, its employees all employee
benefits inclUding,without limitation, health, welfare and retirement benefits. In addition,
together with its other obligations under this Agreement, CONSULTANT shall be solely
responsible, indemnify, defend and save CITY harmless from all matters relating to employment
and tax Withholding for and payment of CONSULTANTS employees, including, without
limitation, (i) compliance with Social Security and unemployment insurance withholding,
payment of workers' compensation benefits, and all other laws and regulations governing
matters of employee withholding, taxes and payment; and (ii) any claim of right or interest in
CITY employment benefits, entitlements, programs and/or funds offered employees of CITY
whether arising by reason of any common law, de facto, leased, or co-employee rights or other
theory. It is acknowledged that during the term of this Agreement, CONSULTANT may be
providing services to others unrelated to CITY or to this Agreement.
.14. Notices. Any notice required or intended to be given to either party under the
terms of this Agreement shall be in writing and shall be deemed to be duly given if delivered
personally, transmitted by facsimile followed by telephone confirmation of receipt, or sent by
United States registered or certified mail, with postage prepaid, return receipt requested,
addressed to the party to which notice is to be given at the party's address set forth on the
signature page of this Agreement or at such other address as the parties may from time to time
designate by written notice. Notices served by United States mail in the manner above
described shall be deemed sufficiently served or given at the time of the mailing thereof.
15. Binding. Subject to Section 16, below, once this Agreement is signed by all
parties, it shall be binding upon, and shall inure to the benefit of, all parties, and each parties'
respective heirs, successors, assigns, transferees, agents, servants, employees and
representatives.
16. Assignment.
(a) This Agreement is personal to CONSULTANT and there shall be no
assignment by CONSULTANT of its rights or obligations under this Agreement without the prior
written approval of the City Manager or his/her designee. Any attempted assignment by
CONSULTANT, its successors or assigns, shall be null and void unless approved in writing by
the City Manager or his/her designee.
(b) CONSULTANT hereby agrees not to assign the payment of any monies
due CONSULTANT from CITY under the terms of this Agreement to any other individual(s),
corporation(s) or entity(ies). CITY retains the right to pay any and all monies due
CONSULTANT directly to CONSULTANT.
17. Compliance With Law. In providing the services required under this Agreement,
CONSULTANT shall at all times comply with all applicable laws of the United States, the State
of California and CITY, and with.all applicable regulations promulgated by federal, state,
regional, or local administrative and regulatory agencies, now in force and as they may be
enacted, issued, or amended during the term of this Agreement.
18. Waiver. The waiver by either party of a breach by the other of any provision of
this Agreement shall not constitute a continuing waiver or a waiver of any subsequentbreachof
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either the same or a different provision of this Agreement.No provisions of this Agreement may
be waived unless in writing and signed by all parties to this Agreement.Waiver of anyone
provision herein shall not be deemed to be a waiver of any other provision herein.
19. Governing Law and Venue. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of California, excluding,
however, any conflict of laws rule which would apply the law of another jurisdiction.Venue for
purposes of the filing of any action regarding the enforcement or interpretation of this
Agreement and any rights and duties hereunder shall be Fresno County, California.
20. Headings. The section headings in this Agreement are for convenience and
reference only and shall not be construed or held in any way to explain, modify or add to the
interpretation or meaning of the provisions of this Agreement.
21. Severability. The provisions of this Agreement are severable. The invalidity, or
unenforceability of anyone provision in this Agreement shall not affect the other provisions.
22. Interpretation. The parties acknowledge that this Agreement in its final form is
the result of the combined efforts of the parties and that, should any provision of this Agreement
be found to be ambiguous in any way, such ambiguity shall not be resolved by construing this
Agreement in favor of or against either party, but rather by construing the terms in accordance
with their generally accepted meaning.
23. Attorney's Fees. If either party is required to commence any proceeding or legal
action to enforce or interpret any term,covenant or condition of this Agreement, the prevailing
party in such proceeding or action shall be entitled to recover from the other party its reasonable
attorney's fees and legal expenses.
24. Exhibits. Each exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
25.Precedence of Documents. In the event of any conflict between the body of this
Agreement and any Exhibit or Attachment hereto, the terms and conditions of the body of this
Agreement shall control and take precedence over the terms and conditions expressed within
the Exhibit or Attachment. Furthermore, any terms or conditions contained within any Exhibit or
Attachment hereto which purport to modify the allocation of risk between the parties, provided
for within the body of this Agreement, shall be null and void.
26. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall,wherever possible,be cumulative with all other remedies at law or in equity.
27. No Third Party Beneficiaries. The rights, interests, duties and obligations defined
within this Agreement are intended for the specific parties hereto as identified in the preamble of
this Agreement.Notwithstanding anything stated to the contrary in this Agreement, it is not
intended that any rights or interests in this Agreement benefit or flow to the interest of any third
parties.
28. Extent of Agreement. Each party acknowledges that they have read and fully
understand the contents of this Agreement. This Agreement represents the entire and
integrated agreement between the parties with respect to the subject matter hereof and
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supersedes all prior negotiations, representations or agreements, either written or oral. This
Agreement may be modified only by written instrument duly authorized and executed by both
CITY and CONSULTANT..
11/
1/1
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By:~~~~~:..J.---C.~~~~
Name:~;.o
Title:?Z~)t>EN\
" (if corporation or LLC, Board
Chair, Pres. or Vice Pres.)
Patrick N. Wiemiller, Director
Department of Public Works
By:-----_
CITY OF FRESNO,
a California municipal corporation
ATTEST:
YVONNE SPENCE, CMC
City Clerk
IN WITNESS WHEREOF, the parties have executed this Agreement at Fresno,
California, the day and year first above written.
By:_
Deputy
No signature of City Attorney required.
Standard Document #DPW 17.1 has been
used without modification, as certified by
the undersigned.
By:_
Kelly S. Riddle
Manager, Facilities &Major Projects
Department of Public Works
REVIEWED BY:
.
By:~0 11 ~\u.J.bu Qb
o 0
Name:Cf,0-Yl \o'fle l f)If:.J 6-H ")=
Title:~/
(if corporation or LLC, CFO,
Treasurer,Secretary or Assistant
Secretary)
Any Applicable Professional License:
Number:_
Name:_
Date of Issuance:_
Mark M. Johnson, Project Manager
Department of Public Works
Addresses:
CITY:
City of Fresno
Attention:Mark M. Johnson, Project
Manager
2101 "G" Street, Building A
Fresno, CA 93706
Phone: (559)621-1017
FAX: (559)457-1160
CONSULTANT:
Brooks-Ransom Associates
Attention: Gaylord Ransom,President
7415 North Palm, Suite 100
Fresno, CA 93711
Phone: (559)449-8444
FAX: (559)449-8404
Attachments:
1.
2.
3.
Exhibit A - Scope of Services
Exhibit B -Insurance Requirements
Exhibit C -Conflict of Interest Disclosure Form
DPW 17.1/12-10-10
-11-
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Exhibit A
SCOPE OF SERVICE
Consultant Agreement between the City of Fresno ("City")
and Brooks-Ransom Associates ("Consultant")
Our SchoettlerConvention Center Reroof
PROJECT TITLE
Brooks-Ransom Associates shall provide design services on behalf of the City, as well as a
variety of other services during various phases of the project. The project involves the design
and construction observation services for the re-roof and mechanical equipment upgrade of the
Schoettler Conference Center. The current wall braces will be redesigned to replace the current
wall angle-iron wall braces with new tube steel supports which will allow for incorporation of new
standardized flashing elements.
Provided two (2) roof system options based on 2D-year (base bid) and 3D-year (alternate bid)
manufacturer roof system warranties, as requested by the Client. Each option includes the
installation of four (4") inches of new, high thermal system roof insulation as part of the roofing
assembly.
SCOPE OF WORK
Brooks-Ransom Associates shall provide the following .rangeof services in association with the
project:
Structural Scope of Work
1. Provide the design phase coordination between the City, the Roofing Consultant and the
Mechanical Engineer. Related services to include on-site meetings, meeting with City staff,
field coordination, drawings coordination, calculation coordination, and specification
coordination.
2. Preparation of structural calculations/drawings/specifications for support of the mechanical
units, structural design and drawings for the modification of the existing parapet wall braces.
3. Assist the City; assembly of the bid documents. project bidding phase, plan check submittal,
prepare plan check responses to items devolved by the design team, prepare responses to
project RFI's and submittal, and responding to any requests for change orders.
4. Prepare Itemized Probable Construction Costs.
Mechanical Scope of Work
1. Provide design services for the replacement of the existing heating, ventilating and air
conditioning (HVAC) systems at the Conference Center. The design will include the
replacement of the existing; roof mounted air conditioning units; kitchen make-up air unit;
hot water boiler; hot water pumps; exhaust fans (not including the kitchen hood fans);
variable air volume boxes; and HVAC control system.
2. Clean the existing ductwork and the coils of the kitchen cold box condensing unit.
3. Preparation of plans and technical specifications.
4. Bid time consultation.
5. Review of submittals.
6. Project closeout and record drawing review.
llPage
7. Construction review visits.
Roofing Scope of Work
1. Conduct on-sitefield investigation to obtain informationcritical to design roof system.
2. Prepare technicalspecifications and plans to includeall aspects of reroofingwork.
3. Provide technical specifications for work involving disturbance of asbestos-containing
roofing materials.
4. Attend pre-bid conferencewith bidding contractors.
5. Assist City with Addendum(s), based on "Requestsfor Information"during bid phase.
6. Review bidsfor work with representatives of City of Fresno.
7. Review and approve roofing material submittals.
8. Attend pre-constructionmeeting prior to start of work.
9. Provide part-time quality assurance observationduring construction (total of 40 hours).
10. Develop list of deficient or incomplete items uponcompletionof work.
11. Conduct final inspectionwith Owner's Representative.
12.Conduct perimeter air sampling for total of two (2) days (per site) during initial asbestos
roofing removal on behalf of Client. Based on collecting three 3 air samples each day.
Analysis of air samples independent, accredited laboratory using Phase Contrast
Microscopy(PCM) method.
SERVICES NOT INCLUDE
1. Laboratory testing services, analysis of any aspect of the project other than that described
herein,
2. Payment of any plan or permit fees.
COMPENSATION
Brooks-Ransom Associates will provide consulting services and project oversight for a lump
sum amount not to exceed $78,000 as detailed below:
Compensation
Scope of Services Amount
Designand Listed Services $77,500
PrintingAnd Other Proiect Related Expenses $500
Total:$78,000
Additional services not specified in the Scope of Services shall be subject to a written
amendment in accordance with Section 3(d) of the Agreement. Such services are available
upon request by the City and will be billed on a time and materials basis, according to the Fee
Schedule attached herein.
SCHEDULE
Brooks-Ransom Associates is prepared to start the above mentioned scope of work
immediately upon completion of the Consultant Services Agreement and a Notice to Proceed.
Brooks-Ransom Associates will provide those services as described herein and provide
preliminary contract plans, specifications, and probable cost to the City for review within forty-
five (45) working days from the time of our receipt of a formal notice to proceed up to and
_._._._----
21Page
including turning in our final documents to the City for plan check submittal. This does not
include time by the City for required internal review, internal document preparation, bidding, plan
check, contract award, and other related items.
3/Page
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Exhibit B
INSURANCE REQUIREMENTS
Consultant Service Agreement between City of Fresno ("CITY")
and Brooks-Ransom Associates ("CONSULTANT")
Schoettler Convention Center Roof Project
PROJECT TITLE
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1. The most current version of Insurance Services Office (ISO) Commercial General
Liability Coverage Form CG 00 01,which shall include insurance for "bodily
injury," "property damage" and "personal and advertising injury" with coverage for
premises and operations, products and completed operations, and contractual
liability.
2. The most current version of Insurance Service Office (ISO) Business Auto
Coverage Form CA 00 01,which shall include coverage for all owned, hired, and
non-owned automobiles or other licensed vehicles (Code 1- Any Auto).
3. Workers' Compensation insurance as required by the California Labor Code and
Employer's Liability Insurance.
4. Professional Liability (Errors and Omissions) insurance appropriate to
CONSULTANT'S profession. Architect's and engineer's coverage is to be
endorsed to include contractual liability.
Minimum Limits of Insurance
CONSULTANT shall maintain limits of liability of not less than:
1"•General Liability:
$1,000,000 per occurrence for bodily injury and property damage
$1,000,000 per occurrence for personal and advertising injuiy
$2,000,000 aggregate for products and completed operations
$2,000,000 general aggregate applying separately to the work performed under
the Agreement
2. Automobile Liability:
$1,000,000 per accident for bodily injury and property damage
3. Employer's Liability:
$1,000,000 each accident for bodily injUry
$1,000,000 disease each employee
$1,000,000 disease policy limit
,
Page ~of 3
4:Professional Liability (Errors and Omissions)
$1,000,000 per claim/occurrence
$2,000,000 policy aggregate
Umbrella or Excess Insurance
In the event CONSULTANT purchases an Umbrella or Excess insurance policy(ies) to meet the
"Minimum Limits of Insurance," this insurance policy(ies) shall "follow form" and afford no less
coverage than the primary insurance policy(ies).
Deductibles and Self-Insured Retentions
CONSULTANT shall be responsible for payment of any deductibles contained in any insurance
policy(ies) required hereunder and CONSULTANT shall also be responsible for payment of any
self-insured retentions. Any deductibles or self-insured retentions must be declared to, and
approved by, the CITY'S Risk Manager or his/her designee. At the option of the CITY'S Risk
Manager or his/her designee, either (i) the insurer shall reduce or eliminate such deductibles or
self-insured retentions as respects CITY, its officers, officials, employees, agents and
volunteers;or (ii) CONSULTANT shall provide a financial guarantee, satisfactory to CITY'S Risk
Manager or his/her designee, guaranteeing payment of losses and related investigations, claim
administration and defense expenses. At no time shall CITY be responsible for the payment of
any deductibles or self-insured retentions.
Other Insurance Provisions
.The General Liability and Automobile Liability insurance policies are.to contain, or be endorsed
to contain, the following provisions:
1. CITY, its officers, officials, employees, agents and volunteers are to be covered
as additional insureds.
2. The coverage shall contain no special limitations on the scope of protection
afforded to CITY, its officers, officials, employees, agents and volunteers.
3. CONSULTANT'S insurance coverage shall be primary and no contribution shall
be required of CITY.
The Workers' Compensation insurance policy is to contain, or be endorsed to contain, the
following provision: CONSULTANT and its insurer.shall waive any right of subrogation against
CITY, its officers, officials, employees, agents and volunteers.
If the Professional Liability (Errors and Omissions) insurance policy is written on a claims-made
form:
1.·The "Retro Date"must be shown, and must be before the effective date of the
Agreement or the commencement of work by CONSULTANT.
2. Insurance must be maintained and evidence of insurance must be provided for at
least 5 years after any expiration or termination of the Agreement or, in the
alternative, the policy shall be endorsed to provide not less than a 5-year
,.-
Page 4of 3
discovery period. This requirement shall survive expiration or termination of the
Agreement.
3. If coverage is canceled or non-renewed, and not replaced with another c1aims-
made policy form with a "Retro Date" prior to the effective date of the Agreement,
CONSULTANT must purchase "extended reporting" coverage for a minimum of
5 years following the expiration or termination of the Agreement.
4. A copy of the claims reporting requirements must be submitted to CITY for
review.
5. These requirements shall survive expiration or termination of the Agreement.
All policies of insurance required hereunder shall be endorsed to provide that the coverage shall
not be cancelled, non-renewed, reduced in coverage or in limits except after 30 calendar day
written notice by certified mail, return receipt requested,has been given to CITY. Upon
issuance by the insurer, broker, or agent of a notice of cancellation, non-renewal, or reduction in
coverage or in limits, CONSULTANT shall furnish CITY with a new certificate and applicable
endorsements for such policy(ies). In the event any policy is due to expire during the work to be
performed for CITY, CONSULTANT shall provide a new certificate, and applicable
endorsements, evidencing renewal of such policy not less than 15 calendar days prior to the
expiration date of the expiring policy.
Acceptability of Insurers
All policies of insurance required hereunder shall be placed with an insurance company(ies)
admitted by the California Insurance Commissioner to do business in the State of California and
rated not less than "A_VII"in Best's Insurance Rating Guide; or authorized by CITY'S Risk
Manager.
Verification of Coverage
CONSULTANT shall furnish CITY with all certificate(s) and applicable endorsements effecting
coverage required hereunder. All certificates and applicable endorsements are to be received
and approved by the CITY'S Risk Manager or his/her designee prior to CITY'S execution of the
Agreement and before work commences.
3
Page hof 3
Exhibit C
DISCLOSURE OF CONFLICT OF INTEREST
Schoettler Convention Center Roof Project
PROJECT TITLE
YES*NO
1 Are you currently in litigation with the City of Fresno or any of its
agents?
2 Do you represent any firm,organization or person who is in
litigation with the City of Fresno?
3 Do you currently represent or perform work for any clients who do
business with the City of Fresno?
o
o
o
4 Are you or any of your principals,managers or professionals,
owners or investors in a business which does business with the
City of Fresno,or in a business which is in litigation with the City of
Fresno?
o
5 Are you or any of your principals,managers or professionals,
related by blood or marriage to any City of Fresno employee who 0 ~
has any significant role in the subject matter of this service?
6 Do you or any of your subcontractors have, or expect to have, any
interest,direct or indirect, in any other contract in connection with D~
this Project?
*If the answer to any question is yes, please explain in f~O~.~
Date
~4z~~D~SQh1
(name)
~CQ)2A\J~~S$(>G,
(company)
14\'O'~.'PA\..M ~\eA:'
(address)
~~Explanation:~rf ~~--
SiQnam~~'
~?-
o Additionalpage(s)attached.Fe6?l\lO GA.SJ'3JJl
(city state zip)
City of~.,~~...~I~
.r"lC::..;;pil"ii~~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.I I
COUNCIL MEETING 05/17/12
APPR~Y~~///~DEPART~~=
CITYMANAGER~~
FROM:
BY:
SUBJECT:
PATRICK N.WIEMILLER,Director
Public Works Department
SCOTT L. MOZIER, PE, City Engineer /Assistant Director .h'~
Public Works Department,Traffic and Engineering Services Division'/o o-:»>'-
CRAIG L. HANSEN,Supervising Real Estate Agent
Public Works Department, Real Estate Services Section
1. ADOPT FINDING OF NO POSSIBILITY OF SIGNIFICANT EFFECT
PURSUANT TO CEQA GUIDELINES SECTION 15061(B) (3) AND
CATEGORICAL EXEMPTION PURSUANT TO CEQA GUIDELINES
SECTION 15312 FOR THE SALE OF A SMALL ABANDONED
WATER WELL PARCEL WHICH IS ON THE SOUTH SIDE OF
BUTLER AVENUE AND EAST OF CHESTNUT AVENUE, APN 473-
020-18T, TO THE ADJACENT PROPERTY OWNER FRESNO
PACIFIC UNIVERSITY
2.APPROVE THE SALE OF A SMALL ABANDONED WATER WELL
PARCEL WHICH IS SOUTH OF BUTLER AVENUE AND EAST OF
CHESTNUT AVENUE KNOWN AS APN 473-020-18T TO THE
ADJACENT PROPERTY OWNER FRESNO PACIFIC UNIVERSITY
(PROPERTY LOCATED IN COUNCIL DISTRICT 5)
RECOMMENDATIONS
1. Adopt finding of no possibility of significant effect pursuant to CEQA Guidelines Section 15061(b)(3) and
Categorical Exemption pursuant to CEQA Guidelines Section 15312 for the sale of a small abandoned
water well parcel which is on the south side of Butler Avenue and east of Chestnut Avenue, APN 473-
020-18T, to the adjacent property owner Fresno Pacific University.
2.Authorize the City Manager, Public Works Director or their designee to execute the Agreement for
Purchase and Sale of Real Property and complete the disposal of excess land to the adjacent property
owner Fresno Pacific University.
REPORT TO THE CITY COUNCIL
Approve Sale of Abandoned Water Well Site No. 61 APN 473-020-18T
May 17, 2012
Page 2
EXECUTIVE SUMMARY
To eliminate maintenance costs and return land to the tax roll, it is proposed the City sell a small abandoned
well parcel to an adjacent owner. The site contains approximately 1,250 square feet. The site is located on
the south side of Butler Avenue just east of Chestnut Avenue. Because it is too small for independent
development, it can only be utilized by the adjacent owner. Staff estimated the sale price for this parcel to be
$5,500 which is broken down as $500.00 for the land and $5,000.00 for the recording fees, administrative
fees, labor and staff time. It is recommended that this parcel be sold "as is" to adjacent owner Fresno Pacific
University.
BACKGROUND
The City owns a number of abandoned water well parcels which are no longer in use or needed by the City.
The City Water Division plans to dispose of these parcels, which are either too small, irregularly shaped or
lack adequate access to be developed independently. Because of these characteristics, the sites can only be
utilized by adjacent owners. The sales price of the sites is established by analysis of the size, shape,
location, frontage, access, use potential, potential benefit it would add to the adjacent parcel and subsequent
negotiations with the prospective buyers. The sale price for the site in this request is generally in the range of
prices the City has received for similar surplus well sites, and is the best the City could receive at this time.
The adjacent property owners to the well site were contacted by the Real Estate Section of Public Works
Department to find out if they were interested in purchasing the parcel from the City of Fresno. Fresno Pacific
University is the adjacent owner on either side of this parcel and agreed to purchase the well site. The
documents signed by the property owner have approved as to form by the City Attorney's Office.
ENVIRONMENTAL FINDING
Staff has performed a preliminary environmental assessment of this action and, pursuant to California
Environmental Quality Act (CEQA) Guidelines, section 15061 (b) (3), has determined with certainty that there
is no possibility that this action may have a significant effect on the environment, because it is merely a
change of ownership. Therefore, this action does not constitute a project for CEQA purposes. However,
even if this action does constitute a project for CEQA purposes, it is exempt pursuant to CEQA Guidelines
Section 15312 (Class 12 Categorical Exemption), regarding the sale of surplus government property, and
none of the exceptions to Categorical Exemptions set forth in CEQA Guidelines Section 15300.2 are
applicable.
FISCAL IMPACT
There will be no General Fund dollars required to sell this parcel. The adjacent property owner deposited
$5,000.00 with the City of Fresno to cover the recording fees,administrative cost, labor, staff time and
$500.00 for the land cost to purchase the parcel.
2012-05-17 Staff Report Water Well Site 61 APN 473-020-18T Sale
Attachments:
-Vicinity Map
REPORT TO THE CITY COUNCIL
Approve Sale of Abandoned Water Well Site No. 61 APN 473-020-18T
May 17, 2012
Page 3
VICINTV MAP
APN 473-020-18T
P. S. 61
BUTLER AVENUE E10 CHESTNUT AVENUE
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REPORT TO THE CITY COUNCIL
AGENDA ITEM NO.
COUNCIL MEETING
lJ
5/11/12..
May 17,2012
FROM:
BY:
APPROVED BY
DEPARTMENT DIRECTOR U5
CITY MANAGER JA ~~~A AH
MARK SCOTT, DIRECTOR
Development and Resource Management Department \i:;I
KELLY VAUGHAN TREVINO,Economic Development r;;-.alyst
Development and Resource Management Department
SUBJECT:APPROVE RESOLUTION TO PERMANENTLY SUSPEND EXPENDITURES ON NEW
APPLICATIONS UNDER THE MUNICIPAL RESTORATION ZONE PROGRAM.
RECOMMENDATIONS
It is recommended that the City Council approve this resolution to permanently suspend expenditures on
new applications under the Municipal Restoration Zone Program.
EXECUTIVE SUMMARY
On November, 30, 2009, the City Council approved a temporary moratorium on the local Municipal Restoration
Zone (MRZ) program and its related funding. This moratorium is scheduled to end on July 1, 2012.Staff
recommends that Council now approve a permanent moratorium of the MRZ. This moratoriumwouldresultina
continued cost savings of approximately $250,000 to the General Fund per year for the remainder of the
program.
BACKGROUND
On October 31,2006 Council approved the MRZ, a local incentive zone providing building permit reductions
and business license, sales, and property tax refunds to qualified new and expanding businesses located
within its boundaries. The program,managed by the then Economic Development Department (now
Development and Resource Management Department), covers all City of Fresno incorporated land located
west of Peach and south of McKinley Avenues. The goal was to layer these benefits with other state and
federal incentive zone benefits, such as those offered by the Enterprise Zone and the (now expired)
Empowerment Zone, to further stimulate investment and hiring in this underserved area of the City.
Over the first three years, nineteen businesses benefited from the MRZ program, resulting in a
reinvestment of over $160,000 in the area, helping to create jobs and increase productivity. However, in
2009 the number of businesses qualifying for the program decreased substantially.This was attributed to
the downtum in the economy and the decreasing number of qualified businesses.
On November, 30, 2009, due to the prolonged downturn in the economy and its severe negative impact on
the City of Fresno,the City Council approved a temporary moratorium on the MRZ program and its related
funding. This moratorium is scheduled to end on July 1, 2012. The program is currently scheduled to be in
effect through 2021.
FISCAL IMPACT
This permanent moratorium would maintain a savings 9f up to $250,000 to the general fund per year for the
remainder of the program.
Attachment(s):Resolution
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RESOLUTION NO.-----
A RESOLUTION OF THE COUNCIL OF THE CITY OF
FRESNO,CALIFORNIA,PERMANENTLY SUSPENDING
EXPENDITURES ON NEW APPLICATIONS UNDER THE
MUNICIPAL RESTORATION ZONE PROGRAM
WHEREAS,on June 27, 2006,Council adopted Resolution 2006-251,expressing support for
establishing a Municipal Restoration Zone ("MRZ")and directing staff to develop enabling
documentation and procedures,with the policy to be effective as of July 1, 2006; and
WHEREAS,on October 31, 2006,Council adopted Resolution 2006-480,establishing an
MRZ effective as of July 1, 2006; and
WHEREAS,the MRZ program is scheduled to automatically terminate on June 30, 2021,
unless earlier terminated or extended by Council; and
WHEREAS,on November 30, 2009, the CityManager temporarily ceased MRZ expenditures
for new qualifying applications pending Council reconsideration of the program;and
WHEREAS,due to the prolonged downturn in the economy and its severe negative impact on
the City of Fresno,the Development and Resource Management Department now recommends a
permanent moratorium of funding for new qualifying applications under the MRZ program'which
would result in a cost savings up to $250,000 of the General Fund.
NOW,THEREFORE,BE IT RESOLVED by the Council of the City of Fresno as follows:
1.Expenditures for funding new qualifying applications under the MRZ program are
hereby permanently suspended unless and until reinstated by Council,
2.No new qualifying applications will be accepted or funded until the program is
reinstated.
lof2
Resolution Permanently Suspending
Expenditures On New Applications Under
The Municipal Restoration Zone Program
3. All other provisions of the MRZ Policy shall remain in full force and effect.
4. This resolution shall be in effect following its final adoption.
* * * * * * * * * * * * * *
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I,YVONNE SPENCE,City Clerk of the City of Fresno, certify that the foregoing
resolution was adopted by the Council of the City of Fresno, at a regular meeting held on the
___day of ,2012.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:,2012 .
Mayor Approval/No Return:,2012
MayorVeto:,2012
Council Override Vote:,2012
YVONNE SPENCE
City Clerk
BY:---'-_
Deputy
APPROVED AS TO FORM:
:~FICE
Katie Bradley Doerr
Senior Deputy City Attorney
KBD:prn [58690prn/reso]04-23-12
20f2
Resolution Permanently Suspending
Expenditures On New Applications Under
The Municipal Restoration Zone Program
City of
~.,~~...~I~
'-"E:Q;~~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.I K
COUNCIL MEETING 05/17/12
~
DEPARTMENT DIRECTOR
FROM:
BY:
PATRICK N.WIEMILLER,Director
Department of Public Utilities
STEPHEN A. HOGG,Assistant Director:
Department of Public Utilities,Wastewa e
SUBJECT:APPROVE THE FIRST AMENDMENT WITH BLAIR CHURCH &FLYNN
CONSULTING ENGINEERS,A CALIFORNIA CORPORATION OF CLOVIS
CALIFORNIA,FOR DESIGN SERVICES OF THE SEWER
REHABILITATION PROJECT IN HARRISON AVENUE FOR A NET
INCREASE OF $8,500 AND NO ADDITIONAL DAYS AND AUTHORIZE THE
DIRECTOR OF PUBLIC UTILITIES TO SIGN THE AGREEMENT ON
BEHALF OF THE CITY (COUNCIL DISTRICT NO.3)
RECOMMENDATIONS
Staff recommends the City Council:
1.Approve the first amendment with Blair Church &Flynn Consulting Engineers (BCF) in the amount of
$8,500 for design services of the sewer rehabilitation project in Harrison Avenue.
2.Authorize the Director of Public Utilities or his designee to sign the Agreement on behalf of the City.
EXECUTIVE SUMMARY
The Department of Public Utilities Wastewater Management Division has in place a professional engineering
services contract for the design of the Harrison Avenue sewer rehabilitation project. In September 2011, the
City entered into a consultant services agreement with BCF for the design of the rehabilitation project. Staff
recommends amending the scope of the services to include the design services and support during
construction for an additional 663 feet of sewer in Olive Avenue. The additional section was video inspected
by City staff and found to be in poor condition. The additional segment is shown on the attached exhibit. This
amendment increases the contract amount by $8,500 to a new total of $188,300 and no additional days.
BACKGROUND
On September 16, 2011, the City entered into a design contract with BCF for the rehabilitation of the 14,571
lineal feet of sewer as shown in the attachment.Staff subsequently discovered that they had inadvertently
omitted an additional 663 lineal feet. To confirm the necessity of rehabilitation staff performed a video
inspection of the additional 663 feet and found it to be in poor condition.Amending this contract to include the
additional section of pipe will reduce the design costs associated with preparing a separate design, advertising,
and managing a separate construction project. The cost savings are anticipated to be between $20,000 and
$30,000. The addition will also eliminate future needs for traffic control. Finally a single construction project at
this time will ensure timely rehabilitation of the sewer. The budget for FY12 does include costs for these
design services.
REPORT TO THECITY COUNCIL
Approve the First Amendment Design Contractwith BCFfor Harrison Sewer Rehab
May17,2012
Page2
The Council may award an amended contract in the amount of $8,500 to BCF, a California Corporation,of
Clovis,California.If the amended contract is not awarded, the new section will be dropped and a new Capital
project will need to be initiated.
The City Attorney's Office has reviewed and approved as to form this First Amendment to Agreement.
ENVIRONMENTAL FINDING
By the definition provided in the California Environmental Quality Act Guidelines (CEQA)Section 15378 the
award of this contract does not qualify as a "project" and is therefore exempt from the CEQA requirements.
FISCAL IMPACT
This project is identified in the five year Capital Improvement Plan and included in the adopted five year rate
plan. The funds for the design of these projects were budgeted and are available in the 2012 Sewer Enterprise
Fund No. 40501.
Attachments:
• VicinityMap
• Contract
• FiscalImpact Statement
LEGEND
----contract amendment
This page intentionally left blank.
FIRST AMENDMENT TO AGREEMENT
THIS FIRST AMENDMENT TO AGREEMENT ("Amendment") made and entered into as
of this __day of , 2012, amends the Agreement heretofore entered into
between the CITY OF FRESNO, a California municipal corporation (hereinafter referred to as
"CITY"), and Blair, Church &Flynn Consulting Engineers, a California corporation (hereinafter
referred to as "CONSULTANT").
RECITALS
WHEREAS, CITY and CONSULTANT entered into an agreement, dated
September 16, 2011, for professional engineering services for the design of the plans and
general construction contract documents for the rehabilitation of sewers in Harrison Avenue,
hereinafter referred to as "Agreement;" and
WHEREAS, CITY inadvertently omitted the rehabilitation of the sewer pipe section
between Manhole Nos. MH2353-01 and MH2353-03, a total of an additional 662.46 linear feet
of pipe, from the original Scope of Services; and
WHEREAS, CITY desires to modify the Agreement to include such additional sewer pipe
section in the Scope of Services;and
WHEREAS, the parties desire to modify the Agreement to include the full description of
the location of all sewers intended by the parties to be originally included; and
WHEREAS, the parties desire to modify the Agreement to revise the project schedule
and extend the completion date; and
WHEREAS, due to the need for additional services, the parties desire to increase the
total compensation by an additional $8,500 to complete the expanded Scope of Services; and
WHEREAS, due to the additional design services, the parties desire to reallocate the
compensation distribution; and
WHEREAS, with entry into this Amendment, CONSULTANT agrees that CONSULTANT
has no claim, demands or disputes against CITY.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and of the covenants,conditions,
and premises hereinafter contained, to be kept and performed by the respective parties, the
parties agree that the aforesaid Agreement be amended as follows:
1. Effective September 16, 2011, the "Project Background" in Exhibit A of the
Agreement is amended to add the Project Description in Attachment A, attached hereto and
incorporated by reference herein.
2. CONSULTANT shall provide additional design services under Section 1 and
Exhibit A of the Agreement to include the additional section of sewer pipe described as between
Manhole Nos. MH2353-01 and MH2353-03 and shown on Attachment A-1 to Attachment A as
that portion west from Harrison Avenue along Olive Avenue.
3. Effective September 16, 2011, Section 1(c)(8) of the Agreement is amended in
its entirety to read as follows:
"(8) Services shall be undertaken and completed in a
sequence assuring expeditious completion. All services shall be rendered
- 1 -
and deliverables submitted within 50 calendar days from the issuance of
a Notice to Proceed for this Part unless an extension of time is approved
in writing by the Director. Re-submittals, as necessary to obtain the
acceptance by CITY, shall be submitted to CITY within 15 calendar days
from receipt of CITY'S comments unless an extension of time is approved
in writing by the Director."
4. Section 3(a) of the Agreement is amended in its entirety to read as follows:
"(a) CONSULTANT'S sole compensation for satisfactory performance
of all services required or rendered pursuant to this Agreement shall be a total
fee not to exceed $188,300, paid on a time and materials basis in accordance
with the schedule of fees contained in Exhibit A."
5. Section 3(c) of the Agreement is amended in its entirety to read as follows:
"(c) For purposes of determining the division of the total compensation
to CONSULTANT as provided in Section 3(a) above, or should performance of
any succeeding Part not be authorized by CITY as provided in Section 1 of this
Agreement, it is agreed that the total compensation shall be allocated to the five
Parts of CONSULTANT'S performance as follows: Part 1 - 15%, Part 2 - 35%,
Part 3 - 34%, Part 4 - 3%, and Part 5 - 13%. Prior to the award of a general
construction contract for the Project, or should such contract not be awarded, the
approved Parts as provided above shall be utilized for purposes of determining
the fee due to CONSULTANT."
6. In the event of any conflict between the body of this Amendment and any Exhibit
or Attachment hereto, the terms and conditions of the body of this Amendment shall control and
take precedence over the terms and conditions expressed within the Exhibit or Attachment.
Furthermore, any terms or conditions contained within any Exhibit or Attachment hereto which
purport to modify the allocation of risk between the parties, provided for within the body of this
Amendment or the body of the Agreement, shall be null and void.
7. Except as otherwise provided herein, the Agreement entered into by CITY and
CONSULTANT, dated September 16, 2011, remains in full force and effect.
III
III
III
-2-
IN WITNESS WHEREOF,the parties have executed this Amendment at Fresno,
California,the day and year first above written.
CITY OF FRESNO,
a California municipal corporation
Blair, Church &Flynn Consulting
Engineers.,
a California corporation
Name:Karl E.Kienow
Patrick N.Wiemiller,Director
Department of Public Utilities
By:__---",---_
ATTEST:
YVONNE SPENCE, CMC
City Clerk
Title:Vice President
BY:~__
Name:Adam K.Holt
Title:CFO I Secretary
Deputy
By:---'----------
APPROVED AS TO FORM:
JAMES C.SANCHEZ
City Attorney
Attachments:Attachment A - Project Description
Attachment A-1 -Schematic Drawing
-3 -
This page intentionally left blank.
Attachment A
PROJECT DESCRIPTION
Consultant Service Agreement between City of Fresno ("City")
And Blair,Church &Flynn Consulting Engineers ("Consultant")
Sewer Rehabilitation in Harrison Avenue
PROJECT TITLE
DESIGN OF SEWERS REHABILITATION IN HARRISON AVENUE:
The Project includes the preparation of design, bid, build documents, support during bidding,
and support during construction for the repair of sewer lines in Harrison Avenue (Olive-Merced).
The Harrison Avenue sewer rehabilitation lines will be 27" and 30" diameter using CIPP liner.
These lines are located between Olive Avenue and Merced Avenue along North Harrison
. Avenue, North H Street, E Street, San Joaquin Street and South Modoc Street (approximately
14,571 linear feet). These sewer lines are located in Fresno Irrigation District ("FlO") and cross
some FlO facilities. Additionally, these lines also cross Union Pacific Railroad,
State Highway 180 and State Highway 99. The existing 27-inch and 3D-inch sewer lines are
with installation dates ranging from 1913 to 1955. These sewer lines from Olive Avenue along
Harrison Avenue, N. H Street, E Street, San Joaquin Street and South Modoc Street to Merced
Avenue are now deemed as being fair to poor condition. This Project is intended to repair the
structural integrity and prevent further corrosion caused by hydrogen sulfide. The location of
this Project as described above is shown on the attached drawing in Attachment A-1,
incorporated by reference herein. A geotechnical investigation shall be conducted for the
proposed sewer improvements. The Consultant's level of effort will .include at minimum the
following: the schematic design phase, design development phase, construction document
phase, bidding phase and construction phase.
Page 1 of 1
Attachment A-1
Page 1 of 1
FISCAL IMPACT STATEMENT
PROGRAM:
TOTAL OR ANNUALIZED
RECOMMENDATION CURRENT COST
Direct Cost *$8,500.00
Indirect Cost $0
TOTAL COST $8,500.00
Additional
Revenue or Savings
Generated $0
Net City Cost $8,500.00
Amount Budgeted
(If none budgeted,
identify source)*$8,500.00
*This bring the total encumbrance for this contract to $188,300.
This page intentionally left blank.
City of
I!!!!~~~".~\I~.-n-=~~',REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO. ,L
COUNCIL MEETING 05/17/12
~
DEPARTMENT DIRECTOR
CITY MANAGER
FROM:
BY:
PATRICK N. WIEMILLER, Director
Public Works Department
SCOTT L. MOZIER, PE, City Engineer/Assistant Director fi YV\
Public Works Department, Traffic and Engineering Services Division ,.'-
SUBJECT:ADOPT A RESOLUTION ORDERING THE SUMMARY VACATION OF
PORTIONS OF A WATER MAIN EASEMENT ON THE WALMART
PROPERTY AT EAST KINGS CANYON ROAD AND SOUTH ADLER
AVENUE (LOCATED IN COUNCIL DISTRICT NO.5)
RECOMMENDATIONS
Staff recommends that the City Council:
Adopt the attached resolution ordering the summary vacation of portions of a water main easement on
the Walmart property at East Kings Canyon Road and South Adler Avenue.
EXECUTIVE SUMMARY
CEI Engineering on behalf of Walmart Stores, Inc is requesting the vacation of portions of a public
water main easement located on the Walmart property at the northeast corner of East Kings Canyon
Road and South Adler Avenue as described in Exhibit "A" and shown on Exhibit "B" of the attached
resolution. The purpose of the vacation is to accommodate the expansion of the existing Walmart
store, as proposed by Conditional Use Permit No. C-04-018, by relocating portions of the existing
water main that loops around the existing store into replacement water main easements outside of the
expanded building's footprint and vacating the resultant unused portions of the existing water main
easement. The City's Department of Public Utilities (DPU), the only department or agency that has an
interest in this easement, has reviewed and approved this vacation with the understanding that
easements for the relocated water line will be provided before this vacation resolution is recorded.
BACKGROUND
CEI Engineering on behalf of Walmart Stores, Inc is requesting the vacation of portions of a public
water main easement located on the Walmart property at the northeast corner of East Kings Canyon
Road and South Adler Avenue as described in Exhibit "A" and shown on Exhibit "B" of the attached
resolution. The existing 30 foot wide water main easement was dedicated by a Deed of Easement
recorded March 23, 1993 as Document No. 93040128, Official Records of Fresno County. The
purpose of the vacation is to accommodate the expansion of the existing 131,164 square foot
Walmart store to 174,277 square feet, as proposed by Conditional Use Permit No. C-04-018. This will
be accomplished by relocating portions of the existing water main that loops around the existing store
into replacement water main easements outside of the expanded building's footprint and vacating the
resultant unused portions of the existing water main easement.
Because this is a vacation of an easement specifically for a City water main, the City's Department of
Public Utilities (DPU) is the only department or agency that has an interest in this easement, therefore
it was not necessary to have this proposal reviewed by other agencies or City departments as the
REPORT TO THE CITY COUNCIL
Summary Vacation of a Portion of Water Main Easement at Walmart
May 17, 2012
Page 2
easements cannot be used for any other public purpose. DPU has reviewed and approved this
vacation with the understanding that easements for the relocated water line will be provided before
this vacation resolution is recorded.
The provisions of Chapter 4, commencing with Section 8330 of the California Streets and Highways
Code, and more specifically Section 8333(c), authorize the Council to summarily vacate a public
service easement (Which would include a public water main easement) that has been superseded by
relocation and there are no other public facilities located within the easement to be vacated. Under
these provisions, only one Council action is necessary and a published notice, posting and public
hearing are not required.
The applicant's proposed plans for development would require modification if the vacation is denied.
The vacation, if approved by the Council, will become effective when the vacating resolution is
recorded in the office of the Fresno County Recorder.
The City Attorney's Office has reviewed and approved the attached resolution as to form.
ENVIRONMENTAL FINDING
On June 23,2011 the Council certified Environmental Impact Report (EIR) No. 10138 prepared for
Conditional Use Permit No. C-04-018, Rezone Application No. R-04-011, and Vesting Tentative
Parcel Map No. TPM-2007-40. The Notice of Determination for the EIR was then filed on June 24,
2011. The relocation of the water line is addressed Volume 1, Section 2, Subsection K, Impact K1
(page 340) of the Draft of EIR No. 10138. Since the water main relocation was included in
EIR No. 10138, no further environmental analysis is required.
FISCAL IMPACT
There will be no impact to the City's General Fund.
Attachments:1. Vicinity Map
2. Page 340 of the Draft of EIR No.1 0138
2.Notice of Determinationfor EIR No. 10138
3. Resolution
P.W.File No. 11642
/HWY.180
VICINITY MAP
OLIVE
BELMON,
TULARE
KllvGS CANYON (HWY.180)
BUTLER
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INITIAL DESIGN I 3/16/12 I SPS I 50 I JP I SD
I DATF"I PRN I PM I DES I DRW
WALMART STORES INC.
7543 N.INGRAM AIlE;SUITE 107 559-447-3119
5.';9 ·447-..11~R
,'-r ...,~,Engineering Associates, Inc.
r)rI["ENGINEERS •PLANNERS •SURVEYORS....._1.LANDSCAPE ARCHITECTS •ENVIRONMENTAL SClENTlSTS
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ATTACHMENT 1
5125 E.KNGS CANYON ROAD
FRESNO CA
DATE SHEET NO.
3/15/12 1 1
5:29 PM OF
Mitigation.
II.Environmental Setting, Impacts,and Mitigation Measures
K.Utilities and Service Systems
groundwater purnpage required to meet the water demands of the project would not
adversely affect groundwater resources. The project would have a less-than-significant
impactonwatersuppliesand resources.
As discussed in Section II.N Global Climate Change,unless atmospheric carbon dioxide
levels are brought into equilibrium by the end of the century, it is estimated there could
be 70 to 90 percent loss in Sierra snowpack. Whilethe overall quantity of precipitation is
not expected to change dramatically, more of it will fall as rain and flow downstream
rather than being stored as snowpack. Combinedwith earliermelting of snowpack which
does accumulate, these hydrological changes will force downstream water agencies to
capture more of this runoff through increased reservoir capacity.Climate change may
actually allow more surface water to be available for recharge since existing upstream
flood control facilities are not able to accommodate increased precipitation over greater
periods of time and may need to release flows more frequently to maintain available
flood storage capacity. It is expected that the water supply agencies will anticipate and
plan for these conditions and manage groundwater supplies accordingly. Although retail
centers are not heavy water users, overall water demand is expected to increase due to
increases in average temperatures, particularly for landscape irrigation. The rising cost of
water dueto supplyconstraints will place greateremphasison water conservation, recycling
and reuse. Overall,however, any constraints on watersupplyresulting from global climate
changearenot expectedto have a significant impacton theproject.
With respect to water supply infrastructure, City Water Division staff indicated that the
City's existing wells, storage facilities, and distribution mains have sufficient capacity to
serve the domestic water demands and the minimum fire flow requirements of the
project,"For example, the current hydrant flow rate is 1,800 gallons per minute, which
exceeds the minimum required flow rate of 1,500 gpm. The residual pressure is 35
pounds per square inch, which exceeds the minimumrequired 20 psi.10 .
There is an existing municipal well at the northwest comer of the project site, adjacent to
Adler Avenue, which produces about 1,300 gallons per minute. Water supply for the
Walmart expansionwill be provided from the City's 14-inchwater main in Adler Avenue
via the 12-inch main to be relocated within the project site as described under 'Existing
Conditions.' The existing looped water system around the existing building will be
relocated as needed to surround the expanded Walmartstore. Water supply for the outlot
retail development will be provided from new 12-inch private water lines which will
connect to the existing on-site water lines to the east and the City's existing 14-inchwater
main in AdlerAvenueto complete the loop.II
The final design for the on-site water system will be subject to review and approval by
the Fresno Water Division, with input from the Fresno Fire Department for fire service.
As required of all development projects, the project would be required to pay a water
service connection fee to the City of Fresno.
Based on the above discussion, existing water resources and facilities are adequate to
serve the domestic water and fire flow needs of the project. Therefore, the impact of the
project upon water supplies and facilities would be less-than-significant.
No mitigation required.
Fresno Southeast Walmart Expansion EIR
340
Draft -December 2010
NOTICE OF DETERMINATION
TO:-lL Office of PlannIng and Research FROM:
1400 Tenth Street,Room 121
Sacramento,CalifornIa 95814
-lL CountyClerk
Countyof Fresno
2221 KernStreet
Fresno,California 93721
CITYOF FRESNO
Development and
Resource Management Dept
2600FresnoStreet
Fresno,California 93721 M3604
DATE RECEIVED FOR FILING:
~~l ~~
JUN 24 2011
~~m<
DEPUlY
SUbJect:Filingof Noticeof Determination in compliance with Section 21152 of the Public Resources Code,
Cityof FresnoEIRNo.1 0138,theEIR prepared for the Southeast Walmart Expansion Project
PrOJ8ct Title
Area CodefTelephonelExtenslon
2007091064
Stat8 Clearinghouse Number
(If subjectto Clearinghouse)
Development and Resource Management Department
Cityof Fresno
Bonfgue Emerson (Salinas ),Planner
LeadAgency
Contact Person
(559)621-8024
Approximately 25 acresof property located onthe northeast cornerof East KIngs Canyon Road andSouthAdler Avenue,between
South WillowandSouthPeach Avenues,Fresno Cityand County.
Project Location (include County)
Project Description:Conditional UsePermitApplication No.C-04-018 consists ofthe following:The expansion and remodeling of
the existing Waimart storeand parking areafrom an eXisting 131,164 square feel locatedon a developed area of 15.2 acres to
174,277 squarefeet on a developed areaof19,2 acres;2)Development of5.7 acres of vacantlandinthe southwest portion ofthe
projectsitewithretailand restaurant outlotdevelopment consisting of four retail buildings and two restaurants (one a drive-thru);and
3)Sale of packaged alcoholic beverages consistent withaType21licenseat Walmart.TheEIR evaluated expanding Walmart by
52,213 squarefeet. MasterSign Program Application No.MSpM11·094Is a request to establish uniform sign requirements forthe
entire projectsite.Vesting Tentative Parcel MapNo.2007·40proposes to subdivide the approximately 25acresiteInto5 parcels.
Rezone Application No.R-04-o11 proposes unifythe zoning acrosstheentiresiteandto remove the conditional zoning from the
projectsiteIn recognition thaL the conditions of the previous zonechangeson thesitehavebeen satisfied in conjunction withthe
development ofthe existingWalmartstore. Theentiresitewouldbe rezoned tothe C·21BA·20 district.
Thisis to advisethatthe Cityof Fresno,theLead Agency,has approved the above-described projecton May4,2011 (master sign
program),May5,2011 (vesting tentative parcelmap),andJune 23.2011 (conditional usepermitandrezone application)and has made
the following determinations regarding the above-described project:
@lO11/ooooofP
1. Theproject([X ]will[ ] willnot)have a significant effect on the environment.
2. [X]An Environmental Impact Report was prepared for this project pursuant La the provisions of CEQA.
[lA Mitigated Negative Declaration was prepared for thisproject pursuant tothe provisions of CEQA.
{ ] A determination of project conformity to the2025Fresno General Plan Master Environmental Impact Report
(MEIRNo.10130)was made.
3.Mitigation measures ( [X]were [ )werenot)made a condition of the approval of theprojectas related to
EIRNo. 10138.
4. A statementof Overriding Considerations ([X]was I l was not)adopted for this project.
5.Findings (I X 1were[ ] were not)made pursuant to the provisions of CEQA.
Thisistocertifythat the above-described Environmental Impact Report,with comments and responses and record of project approval
Is available to the generalpublicat theCityof Fresno,Development and Resource Management Department.2600 Fresno Street,
Room 3076,F esno, alifomla 93721-3604.
This page intentionally left blank.
Recording Requested By:
Public Works Department
City of Fresno
No Fee-Gov't. Code Sections
6103 and 27383
When Recorded,Mail To:
City Clerk
City of Fresno
2600 Fresno Street
Fresno, CA 93721-3623
SPACE ABOVE THIS LINE FOR RECORDER'S USE
RESOLUTION NO._
ADOPT A RESOLUTION APPROVING THE SUMMARY VACATION OF A PORTIONS OF A
WATER MAIN EASEMENT ON THE WALMART PROPERTY AT EAST KINGS CANYON
ROAD AND SOUTH ADLER AVENUE
WHEREAS,the Council has elected to proceed under the provisions of the Public
Streets,Highways,and Service Easements Vacation Law (Division 9, Part 3 of the California
Streets and Highways Code),and specifically Chapter 4 (commencing with Section 8330)
thereof,to summarily vacate portions of a public water main easement located on the
Walmart property at the northeast corner of East Kings Canyon Road and South Adler
Avenue;and
WHEREAS,the portions of the public water main easement proposed to be vacated
are described in Exhibit "A" and shown on Exhibit "8",which are attached and incorporated in
this Resolution;and
WHEREAS,the existing 30 foot wide water main easement was dedicated by a Deed
of Easement recorded March 23,1993 as Document No.93040128,Official Records of
Fresno County;and
WHEREAS,the purpose of the vacation is to accommodate the expansion of the
existing 131,164 square foot Walmart store to 174,277 square feet, as proposed by
Conditional Use Permit No.C-04-018.This will be accomplished by relocating portions of the
existing water main that loops around the existing store into replacement water main
easements outside of the expanded building's footprint and vacating the resultant unused
portions of the existing water main easement;and
WHEREAS,because this is a vacation of an easement specifically for a City water
main, the City's Department of Public Utilities (DPU) is the only department or agency that
has an interest in this easement,therefore it was not necessary to have this proposal
reviewed by other agencies or City departments as the easement cannot be used for any
other public purpose. DPU has reviewed and approved this vacation with the understanding
that easements for the relocated water line will be provided before this vacation resolution is
recorded; and
WHEREAS,the provisions of Chapter 4,commencing with Section 8330 of the
California Streets and Highways Code,authorize the Council to summarily vacate a public
service easement (which would include a public water main easement)that has been
superseded by relocation and there are no other public facilities located within the easement
to be vacated.Under these provisions,only one Council action is necessary and a published
notice,posting and public hearing are not required; and
WHEREAS,on June 23,2011 the Council certified Environmental Impact Report (EIR)
No.10138 prepared for Conditional Use Permit No.C-04-018,Rezone Application No.
R-04-011,and Vesting Tentative Parcel Map No.TPM-2007-40,and thereafter filed a Notice
of Determination on June 11, 2011. The relocation of the water line is addressed Volume 1,
Section 2,Subsection K,Impact K1 (page 340) of the Draft of EIR NO.10138; and
WHEREAS,the Council desires to summarily vacate portions of a public water main
easement located on the Walmart property at the northeast corner of East Kings Canyon
Road and South Adler Avenue as described in Exhibit "A" and shown on Exhibit "B".
- 2 -
NOW,THEREFORE,IT IS RESOLVED BY THE COUNCIL OF THE CITY AS
FOLLOWS:
1. The portions of a public water main easement located on the Walmart property at
the northeast corner of East Kings Canyon Road and South Adler Avenue as described in
Exhibit "A" and shown on Exhibit "B" is hereby vacated.
2. The City Clerk of the City of Fresno shall certify to the passage of this Resolution
and shall cause a certified copy, attested by the Clerk under the seal of the City of Fresno, to
be recorded in the Office of the County Recorder of the County of Fresno, State of California.
3. This vacation shall become effective on the date this resolution is recorded.
4. From and after the date this resolution is recorded, the portions of a public water
main easement located on the Walmart property at the northeast corner of East Kings
Canyon Road and South Adler Avenue as described in Exhibit "A" and shown on Exhibit "B"
shall no longer constitute a public water main easement.
III
III
- 3 -
CLERK'S CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF FRESNO )
CITY OF FRESNO )
I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing
Resolution was adopted by the Council of the City of Fresno, California, at a regular meeting
thereof, held on the day of , 2012.
AYES:
NOES:
ABSTAIN:
ABSENT:
Mayor Approval:, 2012
Mayor Approval/No Return:, 2012
Mayor Veto:,2012
Council Override Vote:, 2012
YVONNE SPENCE, CMC
City Clerk
BY:-------------
APPROVED AS TO FORM:
JAMES C.SANCHEZ
CITY ATTORNEY
PW File No. 11642
Summary Vac. of a portion of water main easement at Walmart
-4 -
EXHIBIT "A"
Page 1 of2
A.P.N 463-050-36 (Portion)
Water Utility Easement Vacation
Certain real property being portions of that certain Deed of Easement for water utility purposes granted
to the City of Fresno on March 23, 1993 as Document No 93040128, Official Records of Fresno County,
lying in Parcel B of Parcel Map Number 92-06 according to the map thereof filed for record in Book 54 of
Parcel Maps at Page 13, Fresno County Records, also lying in Section 6,Township 14 South, Range 21
East,Mount Diablo Base and Meridian situated in the City of Fresno, Fresno County, State of California,
individual parcels being more particularly described as follows:
Parcel 1
COMMENCING at the northeast corner of said Easement, said corner being approximately North
89°27'54"West, a distance of 19.09 feet from the northeast corner of said Parcel B;Thence along the
easterly and southeasterly line of said Easement the following two (2) courses and distances:1) South
00°32'06"West, a distance of 434.90 feet, and 2) South 48°31'51" West, a distance of 40.37 feet to the
TRUE POINT OF BEGINNING;Thence continuing along said southeasterly line, South 48°31'51"West,
a distance of 19.95 feet; Thence leaving said line and crossing through said easement, North
89°27'54"West,a distance of 149.12 feet to a point on the southerly line of said Easement;Thence along
said southerly line the following two (2) courses and distances; 1) North 67°27'54"West, a distance of
63.65 feet, and 2) North 89°27'54"West, a distance of 357.14 feet; Thence leaving said line and crossing
through said Easement the following two (2) courses and distances: 1) North 00°32'06"East, a distance
of 158.94 feet, and 2) South 89°27'54"East, a distance of 15.00 feet to point on the westerly interior line
of said Easement; Thence along the westerly and southerly interior lines of said Easement the following
five (5)courses and distances: 1) South 00°32'06"West, a distance of 128.94 feet,
2) South 89°27'54"East, a distance of 347.97 feet, 3) South 6]027'54"East, a distance of 70.43 feet,
4) South 89°27'54"East, a distance of 122.67 feet, 5) North 48°31'51"East, a distance of 39.24 feet to
the easterly interior line of said Easement; Thence along the southerly prolongation of said easterly
interior line and crossing through said Easement, South 0°32'06"West, a distance of 40.37 feet to the
TRUE POINT OF BEGINNING.
The above described parcel contains 19,367 square feet, more or less.
Parcel 2
COMMENCING at the northwest corner of said Easement, said corner being approximately
South 89°27'54"East, a distance of 19.73 feet from the northwest corner of said Parcel B;Thence along
the westerly line of said Easement, South 00°32'06"West, a distance of 421.42 feet to the TRUE POINT
OF BEGINNING;Thence along the southerly prolongation of said westerly line, South 00°32'06"West, a
distance of 30.00 feet to a point on the southerly line of said Easement; Thence along said southerly line
and then easterly line of the westerly north-south strip of said Easement the following three (3) courses
and distances:1) North 89°27'54"West, a distance of 1.88 feet, 2) South 45°32'06"West, a distance of
3.57 feet, and 3) South 00°32'06"West, a distance of 21.31 feet; Thence leaving said easterly line and
crossing through said Easement, North 89°27'54"West, a distance of 30.00 feet to a point on the
PW FILE 11642
EXHIBIT "A"
Page 2 of 2
westerly line of said Easement; Thence along said westerly line the following three (3) courses and
distances:
1) North 00°32'06"East, a distance of 33.74 feet, 2) North 45°32'06"East, a distance of 28.38 feet, and
3) South 89°35'48"East, a distance of 14.34 feet to the TRUE POINT OF BEGINNING.
The above described parcel contains 1,548 square feet, more or less.
Parcel 3
COMMENCING at the northwest corner of said Easement, said corner being approximately
South 89°27'54"East, a distance of 19.73 feet from the northwest corner of said Parcel B;Thence along
the westerly line of said Easement, South 00°32'06"West, a distance of 43.62 feet;Thence leaving said
westerly line and crossing through said Easement, South 89°27'54"East, a distance of 30.00 feet to the
most westerly northwest interior corner of said Easement, said point being the TRUE POINT OF
BEGINNING;Thence along the interior line of said Easement the following two (2) courses and
distances:1) South 89°27'54"East, a distance of 50.00 feet, and 2) North 00°32'06"West, a distance of
13.62 feet;Thence leaving said interior line and crossing through said easement along the westerly
prolongation of the most northerly interior line of said Easement, North 89°27'54"West, a distance of
50.00 feet to the northerly prolongation of the most westerly interior line of said Easement;Thence along
said northerly prolongation,South 00°32'06"West, a distance of 13.62 feet to the TRUE POINT OF
BEGINNING.
The above described parcel contains 681 square feet, more or less.
Parcel 4
COMMENCING at the northwest corner of Parcel C of said Parcel Map Number 92-06;Thence along
the northerly line of said Parcel C,South 89°27'54"West, a distance of 20.50 feet to an angle point on
the easterly line of the westerly north-south strip of said Easement, said angle point being the TRUE
POINT OF BEGINNING;Thence along said easterly line the following three (3)courses and distances:
1) South 89°27'54"East, a distance of 81.49 feet, 2) North 00°32'06"East, a distance of 30.00 feet, and
3) North 89°27'54"West, a distance of 81.49 feet; Thence leaving said easterly line and crossing through
said Easement, South 00°32'06"West, a distance of 30.00 feet to the TRUE POINT OF BEGINNING.
The above described parcel contains 2,445 square feet, more or less.
Basis of Bearings for the above descriptions:The South line of Section 6,Township 14 South,
Range 21 East,Mount Diablo Base and Meridian, Taken to Bear: South 89°27'54"East.
PW FILE 11642
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PORTION OF WATER LINE
EASEMENT TO BE VACATED
WATER UTILITY EASEMENT
PER DOC. NO.93040128
O.R.F.C.
PROPOSED WATER UTILITY
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TRUE POINT OF
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OFFICIAL RECORDS
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ORG.NO.
CITY OF FRESNO
DEPARTMENT OF PUBLIC WORKS
WATER LINE EASEMENT VACATION
WALMART
KINGS CANYON ROAD, FRESNO, CA
REF &REV.
PW FILE 11642
PLAT2663
EXHIBIT "B"
(SHEET 2 OF 2)
LINE TABLE LINE TABLE LINE TABLE
LINE #BEARING LENGTH LINE #BEARING LENGTH LINE #BEARING LENGTH
L1 N89°27'54"W 19.09'L12 S89°27'54"E 122.67' L23 S89°27'54"E 19.73'
L2 S48°31'51"W 40.37' L13
N48°31'51liE 39.24'L24 S89°27'54"E 30.00'
L3 S48°31'51"W 19.95' L14 SOoo32'06"W 40.37' L25 S89°27'54"E 50.00'
L4 N89°27'54"W 149.12'L15 SOoo32'06"W 30.00' L26
NOoo32'06"E 13.62'
L5 N67°27'54"W 63.65'L16 N89°27'54"W 1.88' L27 N89°27'54"W 50.00'
L6 N89°27'54"W 357.14'L17 S45°32'06"W 3.57' L28 SOoo32'06"W 13.62'
L7 NOoo32'06"E 158.94'L18 SOoo32'06"W 21.32'L29 S89°27'54"E 20.50'
L8 S89°27'54"E 15.00'L19 N89°27'54"W 30.00' L30 S89°27'54"E 81.49'
L9 SOoo32'06"W 128.94'L20 NOoo32'06"E 33.74'L31 NOoo32'06"E 30.00'
L10 S89°27'54"E 347.97'L21 N45°32'06"E 28.38' L32 N89°27'54"W 81.49'
L11 S67°27'54"E 70.43' L22 S89°35'48"E 14.34' L33
SOoo32'06"W 30.00'
1,548 SQ. FT
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DETAIL D
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REF &REV.
PWFILE 11642
PLAT2663
CITY OF FRESNO
DEPARTMENT OF PUBLIC WORKS
WATER LINE EASEMENT VACATION
WALMART
KINGS CANYON ROAD, FRESNO, CA
PROJ.ID. 1011194
FUNDNO.__
ORG.NO.
DR.BY PJB
CH.BY NET
DATE 4-18·12
SCALE _
SHEET NO.IWQ
OF TWO SHEETS
CIty of
FRESNO
May 17, 2012
REPORT TO THE CITY COUNCIL AGENDA ITEM NO./O:OOam
COUNCIL MEETING 5/J 7/1 Z.
APPROVEDBY
DEPARTMENT DIRECTOR
CITY MANAGER
MARK SCOTT, Acting Director
FROM:
THROUGH: CRAIG SCHARTON, Assistant Direct
BY: KARANA HATTERSLEY-DRAYTON It-
Historic Preservation Project Manager
Secretary, Historic Preservation Commission
SUBJECT: CONSIDER ADOPTION OF RESOLUTIONS RELATED TO THE DESIGNATION OF THE
GEORGE H. WALLEY RESIDENCE LOCATED AT 1338 N STREET, THE BLACKS
PACKAGE STORE LOCATED AT 755 VAN NESS AVENUE, AND THE DROGE
BUILDING LOCATED AT 802 VAN NESS AVENUE TO THE LOCAL REGISTER OF
HISTORIC RESOURCES (DISTRICT 3).
RECOMMENDATION
The Historic Preservation Commission recommends that the City Council adopt the attached Resolutions
placing the George H. Walley Residence, the Black's Package Store and the Droge Building on the Local
Register of Historic Resources pursuant to FMC 12-1607 and 12-1609.
The Historic Preservation Commission recommends:
1) That the Council find that the George H. Walley Residence is eligible for listing on the Local
Register under Criterion iii; and
2) That the Council find that the Black's Package Store is eligible for listing on the Local Register
under Criteria i, ii and iii.
3) That the Council find that the Droge Building is eligible for listing as a building on the Local
Register under criteria i and ii.
EXECUTIVE SUMMARY
The property owners of the George H. Walley Residence, Prussak, Welch and Avila Inc., have agreed to
have their property located at 1338 N Street considered for inclusion in Fresno's Local Official Register
of Historic Resources. Likewise the owner of the (former) Black's Package Store, James Riley, has
applied to have his property located at 755 Van Ness Avenue included in the Local Register. The
property owners for the Droge Building located at 802 Van Ness Avenue, the Fresno Housing Authority,
are opposed to the designation of their property. However, the Historic Preservation Commission has
exercised its authority pursuant to FMC 12-1609(a) in requesting designation of this 1922 building, due
to its association with significant events in Fresno's agricultural and social history. The three properties
were evaluated with respect to the historic resource criteria of the City's Historic Preservation Ordinance,
Fresno Municipal Code (FMC), Article 16 of Chapter 12 (excerpts attached) and were publicly noticed in
the Fresno Bee as required by the Ordinance. The City of Fresno's Historic Preservation Commission
held a noticed public hearing on March 26, 2012 regarding nomination of the properties. The
Commission concluded that the George H. Walley Residence is eligible to the Register under Criterion iii,
Black's Package Store is eligible under Criteria i, ii and iii, and the Droge Building is eligible under
Criteria i and ii. The Historic Preservation Commission hereby forwards these nominations to the City
Council for consideration.
REPORT TO THE CITY COUNCIL
Consideration of Properties for the Local Register of Historic Resources
April 19, 2012
Page 2
BACKGROUND
The City's Historic Preservation Ordinance is located at Chapter 12, Article 16. Section 1607 outlines the
criteria for designation of a resource to the Local Register of Historic Resources. A "historic resource" is
"any building, structure, object or site" which is generally more than fifty years of age and "possesses
integrity of location, design, setting, materials, workmanship, feeling and association" and has historic
significance under one or more criterion (1607)(a)(1).
The process for designating a historic resource is outlined in FMC 12-1609. In brief, a request to
designate a resource to the Local Register may be made by the Council, the Commission, the Secretary to
the Commission, the property owner or an authorized representative of the owner (12-1609)(a).
Applications for listing use the state protocol for survey forms with both a DPR 523A (Primary) as well as a
DPR 523B (Building, Structure, Object Form) (12-1609)(a)(1-9). A notice must be published in a local
newspaper at least 10 days prior to the hearing and sent to the property owner as well. Commissioners
must physically visit the property, prior to the Commission hearing (12-1609(c)(1), etc.
The George H.Walley Residence was constructed circa 1886 and is among the oldest extant buildings in
Fresno. The wood frame cottage was originally built as a simple 4-square "box"and is depicted on the
1888 Sanborn Fire Insurance Map. By 1919 the Colonial Revival style home had been enlarged to include
additional rooms on the rear elevation. In 2010 the former property owner was honored with a Mayoral
Historic Preservation Award for "Outstanding Rehabilitation of a Residential Property." The current
property owners, the legal firm of Prussak, Welch and Avila Inc., are headquartered in Tustin, California,
and are in support of the designation of the property, which now serves as a satellite office. The George
H. Walley Residence has been evaluated as individually eligible for the National Register of Historic Places
in the draft Fulton-Corridor Specific Plan Historic Survey. Staff and the Historic Preservation Commission
find that the property is eligible for designation to the Local Register of Historic Resources under Criterion
iii as a rare example of a late-19
th century residence in downtown Fresno.
Black's Package Store was designed and built by the R.F. Felchlin Company, the preeminent
construction firm working at the time in downtown Fresno. The 1923, 3-story building was constructed as
a store and company headquarters for the Black's Package Company, founded circa 1908 in San Jose,
California. Fred P. Black revolutionized the grocery business by packaging convenient amounts of staples,
such as beans, rice, potatoes, crackers and candy at a time when items were only sold in bulk. In 1913 he
moved to Fresno and established his cash and carry system with a full service grocery. Over the next 30
years he expanded the business to a retail grocery empire worth $3,000,000 with a chain of stores in
Fresno, Sacramento and Stockton. The monolithic Black's Package Store at Van Ness and Inyo had a
large basement to accommodate 10 carloads of perishable merchandise, a main floor, a mezzanine on the
second floor and a separate third floor. The building was eventually purchased by the Gottschalk's
Department store for use as a warehouse and service center.
The property owner applied to have the 1923 building designated to the Local Register in 2005. The
Historic Preservation Commission approved the recommendation finding that the former Black's Package
Store was eligible for listing under criteria i and ii for the role the company and its founder',Fred P. Black,
played in revolutionizing the grocery business in California and specifically in Fresno. In addition, the
Commission found that the building also appeared to be eligible under criterion iii, as the work of a master,
the R.F. Felchlin Company. The City Council at a meeting held on October 11, 2005 did not approve
recommendation to the Register, in part due to concerns regarding the proposed South Stadium project.
Consultants for the potential developers, Forest City, however, concurred with the staff evaluation of
REPORT TO THE CITY COUNCIL
Consideration of Properties for the Local Register of Historic Resources
April 19,2012
Page 3
Black's Package Store as eligible not only to the Local Register but also to the California Register of
Historical Resources, and the building was thereafter treated as a historical resource for the purposes of
CEQA in the South Stadium environmental reviews. By 2007 the property owner had begun to rehabilitate
the building including restoration of windows, reapplication of finials at the top of the pilasters, exterior
paint, etc. The building now compares favorablyto historic photos of the earlier store.
The (former) Black's Package Store continues to be eligible to the Local Register of Historic Resources
(criteria i,ii and iii) as well as to the California Register of Historical Resources and staff and the
Commission recommend its designation.
The Droge Building is easily the most complicated of the resources proposed today for designation.
There is no doubt that the building is associated with significant events in Fresno's agricultural and cultural
history. The Droge Building was constructed in 1922for Peter Droge, a member of a prominent pioneering
fruit packing family. According to his obituary he was an early day leader in the cooperative marketing of
raisins in the San Joaquin Valley and helped organize the California Associated Raisin Company, which
was the predecessor of the Sun-Maid Raisin Growers of California. At one time his company was also the
largest fig packer in California. During the Depression the Droge Building provided offices for numerous
local, state and federal government programs including those associated with the "New Deal." For
example, in 1938 the Droge Building was the location of the Fresno office of the Works Progress
Administration (WPA) which helped put Americansto work. The Droge was also the site of the evacuation
control station (Civil Patrol Station) which was established in 1942 to register local Japanese and
Japanese-Americans for internment, following the bombing of Pearl Harbor and Roosevelt's issuance of
Executive Order 9066. Based upon this information the Droge Building would appear to be "associated
with events that have made a significant contribution to the broad patterns of our history"(FMC 12-
1607(a)(1 )(i).
However, for a resource to be eligible for designation to the Local Register it must first have integrity of
"location, design, setting, materials, workmanship,feeling and association" (12-1607(a)(1). The concept of
"Integrity"is not specifically defined in Fresno's Historic Preservation Ordinance but is implicitly based on
the definition used by the National Park Service for the National Register of Historic Places: ''the ability of a
property to convey its significance. (....)
The Droge Building has sustained serious material decline over the past several years: the roof has
collapsed and the interior is largely gutted. Window treatments on the first floor were changed out years
ago and have subsequently been removed. The building is currently boarded and its structural integrity is
reinforced by external supports that connect the buildingto the public right-of-way.The property owner, the
Fresno Housing Authority, has prepared conceptual plans which include integration of portions of the two
street elevations into a new mixed use design; currently there is no option to save and restore the entire
building as it was once constructed. The question thus becomes, is there enough "there, there?" Has the
building suffered too many changes to warrant listing as a building or is the shell, however altered
sufficient to "convey significance?" Also, if the two walls are saved and integrated into a new building,
does that act of preservation create an additional loss of integrity which nullifies listing the Droge as a
building?
As of April 5, 2012 the property owners are still uncertain as to whether they wish to support or oppose
designation of the building (versus the site) in part due to the additional anticipated costs of
approximately $777,000 to preserve in place and tie the exterior walls into a new design. The
Commission, however, has exercised its authority pursuant to FMC 12-1609(a) in requesting designation
REPORT TO THE CITY COUNCIL
Consideration of Properties for the Local Register of Historic Resources
April 19,2012
Page 3
Black's Package Store as eligible not only to the Local Register but also to the California Register of
Historical Resources, and the building was thereafter treated as a historical resource for the purposes of
CEQA in the South Stadium environmental reviews. By 2007 the property owner had begun to rehabilitate
the building including restoration of windows, reapplication of finials at the top of the pilasters,exterior
paint, etc. The building now compares favorably to historic photos of the earlier store.
The (former) Black's Package Store continues to be eligible to the Local Register of Historic Resources
(criteria i, ii and iii) as well as to the California Register of Historical Resources and staff and the
Commission recommend its designation.
The Droge Building is easily the most complicated of the resources proposed today for designation.
There is no doubt that the bUildingis associated with significant events in Fresno's agricultural and cultural
history. The Droge Building was constructed in 1922 for Peter Droge, a member of a prominent pioneering
fruit packing family. According to his obituary he was an early day leader in the cooperative marketing of
raisins in the San Joaquin Valley and helped organize the California Associated Raisin Company, which
was the predecessor of the Sun-Maid Raisin Growers of California. At one time his company was also the
largest fig packer in California. During the Depression the Droge Building provided offices for numerous
local, state and federal government programs including those associated with the "New Deal." For
example, in 1938 the Droge Building was the location of the Fresno office of the Works Progress
Administration (WPA) which helped put Americans to work. The Droge was also the site of the evacuation
control station (Civil Patrol Station) which was established in 1942 to register local Japanese and
Japanese-Americans for internment, following the bombing of Pearl Harbor and Roosevelt's issuance of
Executive Order 9066. Based upon this information the Droge Building would appear to be "associated
with events that have made a significant contribution to the broad patterns of our history" (FMC 12-
1607(a)(1)(i).
However, for a resource to be eligible for designation to the Local Register it must first have integrity of
"location, design, setting, materials, workmanship, feeling and association" (12-1607(a)(1). The concept of
"Integrity" is not specifically defined in Fresno's Historic Preservation Ordinance but is implicitly based on
the definition used by the National Park Service for the National Register of Historic Places: ''the ability of a
property to convey its significance. (....)
The Droge Building has sustained serious material decline over the past several years: the roof has
collapsed and the interior is largely gutted. Window treatments on the first floor were changed out years
ago and have subsequently been removed. The building is currently boarded and its structural integrity is
reinforced by external supports that connect the building to the public right-of-way. The property owner, the
Fresno Housing Authority, has prepared conceptual plans which include integration of portions of the two
street elevations into a new mixed use design; currently there is no option to save and restore the entire
building as it was once constructed. The question thus becomes, is there enough ''there, there?" Has the
building suffered too many changes to warrant listing as a building or is the shell, however altered
sufficient to "convey significance?" Also, if the two walls are saved and integrated into a new building,
does that act of preservation create an additional loss of integrity which nullifies listing the Droge as a
building?
As of AprilS,2012 the property owners are still uncertain as to whether they wish to support or oppose
designation of the building (versus the site) in part due to the additional anticipated costs of
approximately $777,000 to preserve in place and tie the exterior walls into a new design. The
Commission, however, has exercised its authority pursuant to FMC 12-1609(a) in requesting designation
REPORT TO THE CITY COUNCIL
Consideration of Properties for the Local Register of Historic Resources
April 19, 2012
Page 4
of this 1922 building, due to its association with significant events in Fresno's agricultural and social
history and due to its association with Peter Droge. The Commission, following several public meetings,
also concluded that the building has retained sufficient integrity to its period of significance, 1922-1942,
to convey its historic significance. The Historic Preservation Commission recommends that the City
Council designate the Droge Building to the Local Register of Historic Resources under criteria i and ii.
Should the City Council find that the building lacks sufficient integrity, the Council may wish to consider the
option of designating the Droge Building as a site rather than a building. The City's Historic Preservation
ordinance defines "historic resources" as "any building, structure, object or site" which has been in
existence more than fifty years and possesses integrity and historic significance. The City ordinance does
not define "site," but we can look to the National Register for help: "A site is a location of a significant
event, a prehistoric or historic occupation or activity, or a building or structure,whether standing, ruined or
vanished, where the location itself possesses historic, cultural, or archaeological value regardless of the
value of an existing structure" (National Register Bulletin 16A:15). Examples of historic sites in Fresno
include the "Frank Chance Field Site" (HP#264) and "Remembrance Plaza, Pinedale" (HP#256).There
are also several California Historical Landmark sites in Fresno including No. 803, the Site of the First
Junior College in California, and the sites of the two Temporary Detention Camps for Japanese Americans
(Pinedale and the Fresno Fairgrounds, No. 934.). The parcel located at 802 Van Ness appears to qualify
as a historic site, due to its association with significant historical events as previously discussed, with the
boundaries of the landmark the current .26 acre parcel.
FISCAL IMPACT
There is no fiscal impact to the City of Fresno.
Attachment:Exhibit A - Designation Criteria for the Local Register of Historic Resources.
Exhibit B - Aerial Photograph of the George H.Walley Residence (2008).
Exhibit C - State of California Survey Forms for the George H.Walley Residence
Prepared by Historic Resources Group for the City of Fresno 2
December 2011 with Continuation Sheets Prepared by Karana
Hattersley-Drayton 16 March 2012.
Exhibit D - A Resolution of the City Council of the City of Fresno, California,
Designating the George H. Walley Residence Located at 1338 N
Street, Fresno, California to the Local Register of Historic Resources.
Exhibit E - Aerial Photograph of Black's Package Store (2008).
Exhibit F - State of California Survey Forms for Black's Package Store Prepared
By Karana Hattersley-Drayton 17 August 2005 and 7 July 2011 and
Page and Turnbull 28 September 2007.
Exhibit G - A Resolution of the City Council of the City of Fresno, California,
Designating the Black's Package Store Located at 755 Van Ness
Avenue, Fresno, California to the Local Register of Historic Resources.
Exhibit H - Aerial Photograph of the Droge Building (2008).
Exhibit I - State of California Survey Forms for the Droge Building Located at
802 Van Ness Avenue Prepared by Karana Hattersley-Drayton 29
November 2010, 23 June 2011 and 27 March 2012 and Continuation
Sheets Prepared by Joe Moore 21 September 2011.
REPORT TO THE CITY COUNCIL
Consideration of Properties for the Local Register of Historic Resources
April 19, 2012
PageS
Exhibit J -A Resolution of the City Council of the City of Fresno,California,
Designating the Droge Building Located at 802 Van Ness
Avenue, Fresno,California to the Local Register of Historic Resources.
Exhibit K - A Resolution of the City Council of the City of Fresno,California,
Designating the Site of the Droge Building Located at 802 Van Ness
Avenue, Fresno,California to the Local Register of Historic Resources.
Historic Preservation Ordinance
FMC §12-1600,etseq.
Page5 of 17
Government statusandsurveysof newareas annexed or incorporated by
the city.
(10) Adopt procedural rulesfor the systematic reviewof such historical
resource surveysto determineif designation proceedings shouldbe initiated
on appropriate sites. Provideforthe removal of sitesnotfoundqualifiedfor
designation fromthe surveyandfromthe HistoricPropertyDataFilefor
FresnoCounty maintained bythe StateOfficeof Historic Preservation if
includedtherein.
(11) Reviewandmake recommendations on nominations for inclusion in
the CaliforniaRegisterof Historical Resources andthe National Register of
HistoricPlacesfor localhistoric resources or districtsto thechiefelected
localofficialfor transmission to the StateOfficeof Historic Preservation in
accordance with procedures established bythe Certified Local Government
Program.
(12) Reviewandmake recommendations on any proceedings under
Section106ofthe National Historic Preservation Act pertaining to properties
withinthecity limitsandestablish programmatic agreements withthe State
Officeof Historic Preservation as the Commission deems appropriate.
(13) Reviewandmake recommendations on historic preservation
certification applications for federaltax incentives.
(14) Developand recommend the adoption of historic preservation
incentives including but not limitedto conditional usepermitsallowinguses
nototherwise permitted bythe underlying zoning,MillsAct Contracts,and
other programs utilizedby otherCertifiedLocal Governments.
(15) Reviewand make recommendations on any applications to participate
in localhistoric preservation incentive programs established in orderto
effectuatethe purposesof this article.
(16) Preparean annualreporton the activitiesof the Commission to the
StateOfficeof Historic Preservation atthe endof eachcalendaryearin
accordance with procedures established bythe CertifiedLocal Government
Program.
(17) Ensurethat each commissioner attendsat leastone informational or
educational meeting,seminar,workshopor conference peryearin
accordance withthe requirements of the CertifiedLocal Government
Program.
(18)Perform anyotherfunctions consistent withthepurposeshereinor
that maybe directedbythe Councilfromtimeto time.
(19) Adopt,promulgate,amendand rescind,fromtimeto time,such rules,
guidelinesand regulations as the Commission maydeemnecessaryto
effectuatethe purposesof this article.
(20) Providefor a suitablesign,plaqueor othermarkerat publicor private
expense,on or nearthe Historic Resource or District(LHDor NRD),
indicatingthat the Resource or District(LHDor NRD)hasbeenso
designated.Thesign, plaqueor othermarkershallcontain information and
data deemed appropriate bythe Commission andits placement shallbeat
the discretion of the owner.
(21) Meetnot lessthan oncea monthat meetingsheldpursuantto public
noticeandopento the public.
(22) Keepminutesandrecordsof all meetingsand proceedings including
voting records,attendance,resolutions,findings,determinations and
decisionsas a matterof publicrecord.
(23) Renderadviceand guidance,uponthe requestof a propertyowneror
tenanton the financialandphysicalaspectsof the restoration,alteration,
rehabilitation,landscaping or maintenance of any Historic Resource,any
Contributorto any HistoricDistrict(LHDor NRD)or anyHeritage Property.
(24)Investigate and reportto the Council onthe useof various federal,
state, localor privatefundingsourcesand mechanisms availableto promote
historic resource preservation inthecity.
(25)Participate in,promoteandconductpublic information,educational
and interpretive programs pertaining to Historic Resources and provide for
public participation in all aspectsof thecity'shistoric preservation programs.
(AddedOrd.99-50,§§ 1,2, 9-9-99)
SEC.12-1607.DESIGNATION CRITERIA.
(a)HISTORIC RESOURCES:Any building,structure,objector site maybe
designated as an Historic Resource if it isfoundbythe Commission and
Councilto meetthe followingcriteria:
(1) It hasbeenin existencemorethanfiftyyearsandit possesses
integrityof location,design,setting,materials,workmanship,feelingand
association,and:
(i) It is associated witheventsthathavemadea significant
contribution to the broadpatternsof ourhistory;or
(ii) Itis associated withthe livesof personssignificantin ourpast;or
Historic Preservation Ordinance
FMC §12-1600,et seq.
Page 6 of 17
(iii) It embodies the distinctive characteristics of a type,period or
method of construction,or represents the work of a master, or
possesses high artistic values; or
(iv) It has yielded or may be likely to yield,information important in
prehistory or history:
(2) It has been in existence less than fifty years, it meets the criteria of
subdivision (1) of subsection (a) of this section and is of exceptional
importance within the appropriate historical context, local, state or national.
(b) LOCAL HISTORIC DISTRICTS:Any finite group of resources (buildings,
structures,objects or sites) may be designated as a Local Historic District if
it meets the definition set forth in Section 12-1602(s)of this article, its
designation is consented to by the majority of the property owners within the
Local Historic District, at least fifty percent of the resources within the
proposed Local Historic District are fifty years of age or older, and it is found
by the Commission and Council to meet one or more of the following criteria:
(1) It exemplifies or reflects special elements of the city's cultural, social,
economic,political,aesthetic,engineering,or architectural heritage,or
(2) It is identified with a person or group that contributed significantly to the
culture and development of the city, or
(3) It embodies distinctive characteristics of a style, type, period or method
of construction,or is a valuable example of the use of indigenous materials
or craftsmanship,or
(4)Structures within the area exemplify a particular architectural style or
way of life important to the city, or
(5) The area is related to a designated historic resource or district in such a
way that its preservation is essential to the integrity of the designated
resource or Local Historic District,or
(6) The area has potential for yielding information of archaeological interest.
(c)NATIONAL REGISTER HISTORIC DISTRICTS:The nomination of any finite
group of resources (buildings,structures,objects or sites),including any
Local Historic District, to the National Register of Historic Places as a
National Register Historic District may be recommended under this article if
it meets the definition set forth in Section 12-1602(u)of this article, meets
the criteria set forth in subsection (a) of this section,and if the nomination is
supported by more than fifty percent of the property owners within the
proposed National Register Historic District.
(d)HERITAGE PROPERTIES:Any building,structure,object or site may be
designated as a Heritage Property if it is found by the Commission to be
worthy of preservation because of its historical,architectural or aesthetic
merit.
(e)CONTRIBUTORS TO HISTORIC DISTRICTS:Any building,structure,object
or site may be designated as Contributor to a Local Historic District or a
proposed National Register Historic District if it contributes to the
significance of the specific Historic District under the criteria set forth above
in this section.(Added Ord. 99-50,§§1, 2,9-9-99)
SEC.12-1608.DESIGNATION PROCESS.
Buildings,structures,objects, sites and districts may be considered for designation as
Historic Resources,Historic Districts or Heritage Properties under this article as set
forth in sections 12-1608,12-1609,12-1610 and 12-1611.(Added Ord. 99-50,§§1,
2,9-9-99)
SEC.12-1609.HISTORIC RESOURCES.
(a)Requests for Designation:Designation of an Historic Resource may be
initiated by the Council,the Commission,the Secretary,the property owner,
or an authorized representative of the owner. The application for designation
consideration shall be filed with the Specialist,using a form approved by the
Secretary and shall include the following information:
(1) The Assessor's Parcel Number for the property containing the building,
structure,object or site proposed for designation along with the name and
address of the current owner(s)of record and a copy of the deed granting
title to the owner(s);
(2)Whether the proposed historic resource takes the form of a building,
structure,object or site as same are defined in this article;
(3) A detailed description of the specific building,structure,object or site
proposed for designation including but not limited to its dates of construction,
significant alterations and architectural style;
(4) The manner in which the proposed building,structure,object or site
meets the criteria for designation contained in Section 12-1607(a)of this
article;
(5)Current photographs of all aspects of the proposed historic resource,
supplemented by sketches,drawings or other descriptive materials;
(6) A description of the physical condition and appearance of the proposed
historic resource;
Date
Primary #:..-.__"'--__-'-..,..._-"'--"'----'-..,..._-'--'--
HRI #:.,..-....,...---'-_----,_....,...---'-....,...-----,--'-...,..,.
Trlf1omial ~-'--~---..,..._--~.
NRHP Status Code .....=.::='-"'==-_......_"'--........,...-_---..,.-
Other Listings,_~---,---,--------",--------,---,---,-_
Review Code Reviewer
state of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
PRIMARY RECORD
*a.County Fresno County
T R
City Fresno
Date
Page _1_ of ..L Resource name(s)or number (assigned by recorder)
P1.Other Identifier:George H. Walley Residence
*P2.Location:DNot for Publication -Unrestricted
*b. USGS 7.5' Quad
*c.Address 1338 N Street
*e.Other Locational Data: APN: # 46608312
1338 N Street
Zip 93721
*P3a.Description:(Describe resource andits major elements.Include design,materials,condition,alterations,size,setting,and boundaries.)
Located on the northeast side of N Street, between Tuolumne and Merced Streets, this one-story residence displays the
characteristics of a late-nineteenth-century cottage, accented with early twentieth-century American Colonial Revival detailing.
The building is rectangular in plan and capped with a hipped roof, clad in composition shingles. The roofline of the residence
terminates in shallow, boxed eaves, resting on a slightly corbelled cornice, accented with a dentil course. Below the roofline, a
broad, wrap-around fascia provides the transition from the roofline to the exterior walls. Wood shingles sheath the residence.
The facade features a full-length imbedded porch, supported by single posts with carved capitals. A low, wood post railing
fronts the porch, which is marked by a thin frieze extending across the facade. Elevated on six steps, the entrance is centered
on the facade and features a wood-framed door with a single light and wood surrounds. The entry is flanked by a pair of one-
over-one double-hung windows with wood frames. Decorative detailing of the window and door frames includes flared
molding with grooved side frames, simulating columns and an entablature. Fenestration consists primarily of fixed and one-
over-one double-hung sashes with wood frames. With few major alterations, the cottage is in good condition and exhibits a
good level of integrity.
*P3b.Resource Attributes:(list attributes and codes)HP2. Single-family Property.
*P4.Resources Present:_Building DStructure DObject DSite DDistrict DElement of District DOther
P5a. Photo
P5b.Photo:(viewanddate)
Southwest elevation
March 2, 2011
*P6. Date Constructed/Age and
Sources:-historic
1886 ca. (City of Fresno Downtown
and Community Revitalization
Department)
*P7.Owner and Address:
Prussak, Welch and Avila, Inc.
175 S. C Street, 2
nd Floor
Tustin, CA 92780
*P8.Recorded by:
Historic Resources Group
12 S. Fair Oaks Avenue, Suite 200
Pasadena, CA 91105-1915
*P9. Date Recorded:
December 2, 2011
*P10.Survey Type:
Intensive
*P11.Report Citation:(Cite survey report and other sources,or enter "none")
Downtown Fresno (Fulton Corridor) SUNey Report.
*Attachments:DNone DLocation Map DSketch Map DContinuation Sheet _Building, Structure, and Object Record
DArchaeological Record DDistrict Record DLinear Feature Record DMilling Station Record DRock Art Record
DArtifact Record DPhotograph Record 0 Other (list)
DPR 523A (1/95)
*Required information
State of.California""::'The Resou!#sAgenc:y ...Primary#:..----'-"'--_,.;-"'--"'--_"'--"'--_"'----'-'"'--...:....,;.;,;.;.
pE!'~TMENJ.()FP~KS~DRE<:R~TIOt1l·......•....•...•...••......>..:i;HRI#;.;,-·.··~_--.-,;~...,.;-,,,..=...,.;-,~.,...,..,...~---'-.
BUILDING,STRUCTURE,AND OBJECT RECORD
Page ..L of...l.*NRHP Status Code ::::3S~.~3QCQS~'..l:i:5::::S::::3 _
*Resource Name or #: 1338 N Street
B1.Historic Name: George H. Walley Residence
B2.Common Name: Same
B3.Original Use: Single-family Residential B4.Present Use: Single-family Residential
*B5.Architectural Style:Hipped-Roof Cottage
*B6.Construction History:(Construction date,alterations,anddateof alterations):
While original building permits were not available for this property, it appears on the 1888 Sanborn Fire Insurance Map.
Subsequent building permits show several alterations to the property, including unspecific repairs in 1910 ($250), an
unspecific alteration in 1923 ($500), a new garage in 1927, replacement porch foundations in 1939 ($1,000), and a re-roof in
1944. No further alterations were identified through building permit research. Although the home's American Colonial Revival
detailing appears to post-date the building's construction, these features date within the period of significance for early
residential development in downtown Fresno. The residence is otherwise intact and shows no further major alterations.
*B7.Moved?-No DYes DUnknown Date:Original Location:_
*B8.Related Features:None.
B9a.Architect:Unknown b.Builder:Unknown
*B10.Significance:Theme Late 19th and Early 20th Century Residential Area Downtown Fresno
Period of Significance:1886 ca.Property Type:Single-family Residential
Applicable Criteria:NRHP: A and C; CRHR: 1 and 3; City of Fresno: i and iii.
(Discuss importance in terms of historical or architectural context as defined by theme,period,and geographic scope.Also address integrity)
The residence at 1338 N Street is significant as a rare, intact example of a late nineteenth-century cottage, as well as a
reflection of the early residential settlement of downtown Fresno. From the late nineteenth to early twentieth centuries, much
of downtown Fresno consisted of residential neighborhoods. Expanding commercial development and large-scale
redevelopment projects of the mid- and late-20th century replaced many of downtown Fresno's neighborhoods, and today
intact early residential properties within the Downtown area are comparatively rare. With few visible alterations, 1338 N Street
retains sufficient integrity to convey its significance.
B11.Additional Resource Attributes:None
*B12.References:
City of Fresno BUildingPermits
County of Fresno Tax Assessor Data
Sanborn Fire Insurance Maps.
B13.Remarks:
*B14.Evaluator:C. McAvoy & P. Travis
*Date of Evaluation:April 2011
(This space reserved for official comments.)
DPR 523B (1/95)*Required information
Resource:George H. Walley Residence 1338N Street
State of California -:-The Resources Agency
DEPARTMENTOF PARKS AND RECREATION
CONTINUATION SHEET
Page 3 of 5
..Primary #~-...,..;-~_:__~~.,...,
HRI#---
.•Trinomial
*Recorded by:Karana Hattersley-Drayton *Date:March 16,2012 .Update
DPR 523L (1195)*Required information
State of.California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
CONTINUATION SHEET
Primary #.,---'--'-__
HRI#~~--~~
Trinomial
Page 4 of 5
DPR 523L (1195)
Resource:George H.Walley Residence
*Date:March 16, 2012 .Update
;'>i'o,...;,.,~~""
"Required information
Resource:George H. Walley Residence
StateofCalifornia~The Resources Agency
DEPARTMENT OF PARKSAND RECREATION
CONTINUATION SHEET
Page 5 of5
.Primal'Y #,.....----,....,....-------,....,....------'--
HRI~..,.......,.,~,.__--'-~----',.__--'-;.;__---
Trinomial
*Recorded by:Karana Hattersley-Drayton *Date:March 16, 2012 .Update
··~
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DPR 523L (1195)·Required information
Recording Requested by:
City Clerk, Fresno, California
No Fee-Govt. Code 6103
Return to City Clerk,Fresno
Space above this line reserved for Fresno County Recorder's Office
RESOLUTION NO. _
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRESNO,
CALIFORNIA,DESIGNATING THE GEORGE H.WALLEY RESIDENCE LOCATED
AT 1338N STREET,FRESNO,CALIFORNIA
TO THE LOCAL REGISTER OF HISTORIC RESOURCES
WHEREAS,the "George H.Walley"Residence was constructed in Fresno circa 1886 and is
depicted on the 1888 Sanborn Fire Insurance Map; and
WHEREAS,the wood frame cottage was originally built as a simple "box"and later
enlarged and has Colonial Revival and neoclassical design elements;and
WHEREAS,the property is named for the first known owner associated with the home as
identified on a 1910 building permit;George Walley; and
WHEREAS,the former home,now used as a business,is a rare example of a late-19th
century residence in downtown Fresno and in fact may be among the oldest extant buildings in
Fresno;and .
WHEREAS,the property has been faithfully restored and was honored with a 2010 Mayoral
Historic Preservation Award for Outstanding Rehabilitation of a Residential Property;
WHEREAS the George H.Walley Residence has been evaluated as individually eligible for
the National Register of Historic Places; and
WHEREAS,the property owners,Prussak,Welch and Avila Inc.of Tustin,California,
support the designation of the structure to Fresno's Local Official Register of Historic
Resources;and
WHEREAS,the City of Fresno Historic Preservation Commission,at a duly noticed public
hearing held on March 26,2012,heard testimony on the subject property;and
WHEREAS,based on that testimony, and the presentation of facts relating to the criteria
for official designation,as set forth in the Fresno Municipal Code, Chapter 12, Article 16, made
the following findings;
That the George H. Walley Residence meets the criteria set out in Article
16, Chapter 12, Section 12-1607 (a)of the Fresno Municipal Code; and is eligible
for listing on Fresno's Local Register of Historic Resources; and be recommended
to the Fresno City Council for adoption as a Local Resource; and whereas in
accordance with Fresno Municipal Code, Article 16 Section 12-1601 et seq. this
hearing has been duly noticed for Council action upon the designation
recommended by the Commission; and
WHEREAS,on May 17, 2012, Council held a hearing where it considered the
recommendation of the Historic Preservation Commission,and considered substantial evidence,
including but not limited to,staff presentation,a report prepared by staff addressing the
property's eligibility to the Local Register, a Primary Record ("PR") and a Building,Structure
and Object Record ("BSOR")prepared by the City's Historic Preservation Specialist (as defined
in FMC §12-1604(b)) finding that the property met the Historic Resource eligibility
requirements for criterion iii to subdivision 12-1607(a)(l).
NOW,THEREFORE,BElT RESOLVED by the Council of the City of Fresno:
1. Council finds that the above recitals are true and correct.
2. Council finds that the George H. Walley Residence is eligible for listing under
criterion iii of Fresno Municipal Code,subdivision 12-1607(a)(l)based upon the
evidence presented to Council in the staff presentation,staff report, the PR and
the BSOR.
3. Council designates the George H. Walley Residence as a Historic Resource to the
Local Register of Historic Resources.
****************************
CLERK'S CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I, YVONNE SPENCE, CMC, City Clerk of the City of Fresno, certify that the
foregoing resolution was adopted by the Council of the City of Fresno, at a regular
meeting held on the day of ,2012.
AYES
NOES:
ABSENT
ABSTAIN
Mayor Approval :
Mayor Approval/No Return:
Mayor Veto:
Council Override Vote:
APPROVED AS TO FO M:
JAMES C. SANCHE
City Attor
$~~~~,¥-SeniorDeputy
Date:__---I.--L.::::==--_
,2012
,2012
,2012
,2012
YVONNE SPENCE
City Clerk
Deputy
Trinomial
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..:",:,'"
Primary #--------"-----,-~~c--'-HRI#--:-'----:-_-"-"""--.,
State of California -Th~Resources Agency
DEPARTMENT OF PARKS AND RECREATION
CONTINUATION SHEET
Page 1 of 1 Resource:Black's Package Store (Gottschalk's Warehouse)
*Recorded by:Karana Hattersley-Drayton *Date:7.7.11 .Update
Black's package Store JUly 7,2011
DPR523L (1195)"Required information
Page 1 of 3
*Recorded by:Page &Turnbull
*Resource Name or #(Assigned by recorder)755 Van Ness Avenue
*Date 9/28/2007 0 Continuation 1:81 Update
755 Van Ness Avenue (APN 468-256-01),also known as Black's Package Store, was documented in August 2005 by the City of
Fresno and was determined eligible for the California Register of Historic Resources as an individual property (California Historical
Resource Status Code: 3CS) and for listing in the City of Fresno's Local Register of Historic Resources as an individual property
(California Historical Resource Status Code: 5S2).
Since 2005, the building has undergone rehabilitation.For the most part, the alterations undertaken have restored original
elements of the building. The most prominent of these changes was the addition of finials along the top of the parapet, which
correspond to the pilasters that divide the bays on the northwest and northeast facades. Historic photos show almost identical
finials on the building originally.The rehabilitation has also undertaken the replacement of the storefront assemblies at the first
story level, which were infilled previously.The building's original arrangement of storefronts along the northwest and northeast
facades is now restored.Window alterations at the upper story levels have occurred. Where the building once had profuse
fenestration at both the second and third story levels of the northwest and northeast facades, many of the windows at the second
story level and all windows at the third story level were infilled. The recent rehabilitation has maintained the infilled windows and
infilled a few additional windows at the second story level,further eliminating the original fenestration patterns. The building has
been repainted and appears to be in excellent condition, but its physical integrity is only fair; mostly due to the window alterations.
Based on the information presented in the Building, Structure, and Object Record for 755 Van Ness Avenue completed in 2005, the
property still appears to meet the criteria for listing in California Register and for local designation.The property was determined to
be significant under local register criteria i and ii (Whichcorrespond to National Register Criteria A and B) for association with
important historic events and a notable person;specifically,for the "role of the company and its founder, Fred P. Black, played in
revolutionizing the grocery business in California and specifically in Fresno." The findings of the 2005 Building,Structure,Object
Record have been corroborated by current research and this update record concurs that the Black's Package Store building is
individually eligible for the California Register and for the City of Fresno's Local Register of Historic Resources.
This property was not fully assessed for its potential to yield information important in prehistory or history, per National Register
Criterion D.
Northeast and northwest facades, from the north. (5/22/07)
DPR 523A (1/95)*Requlred Information
Primary#.
HRI#
.Trinomial
Page 2 of 3
*Recorded by:Page &Tumbull
"Resource Name or #(Assigned by recorder)755 Van Ness Avenue
"Date 9/28/2007 D Continuation [8]Update
Northeast facade, from the east. (8/27/07)
Rear (southwest) facade, from the west. (8/27/07)
DPR 523A (1/95)"Required Information
Primary#
HRI#
Trinomial
~.
';or?
-.o.L ~
"~'<-"--~\:
~~:.-
Page 3 of 3
*Recorded by:Page &Tumbull
*Resource Name or #(Assigned by recorder)755 Van Ness Avenue
*Date 9/28/2007
DPR 523A (1/95)
755 Van Ness Ave., c. 1960
(source:Fresno City Fire Department Collection,Fresno Historical Society)
Rear of 755 Van Ness Ave., C. 1960
(source:Fresno City Fire Department Collection,Fresno Historical Society)
*Requlred Information
Stateof California- The ResourcesAgency
DEPARTMENT OF PARKS AND RECREATION
PRIMARY RECORD
Primary #'...,-...,-~_
HRI #----'-..,--~~----'---
Trinomial,...,--'--...,-__...,-_---'-"'"'-
NRHP Status Code:....-...,-:....-...,-...,-_
Reviewer
Other Listings,...,-__-'--...,-__...,-_-'-:-
ReviewCode
P1.Resource Name: Black's Package Store (Gottschalk's Warehouse) (Listed previously as HP#158)
*P2.Location:*a.County:Fresno
*b. USGS 7.5'Quad
c.Address:755 Van Ness Avenue, Fresno
d.Assessor's Parcel Number:468-256-01
*P3a.Description:The former Black's Package Store (Gottschalk's Department Store warehouse) has a rectangular
plan and sits on the southwest corner of Van Ness and Inyo Avenue. The structural system is post and beam with
reinforced concrete piers with an infill and curtain walls of brick laid up in a common bond. There are seven bays on
the Inyo Street elevation and five on the Van Ness. As is typical of the building type, a two-part vertical block, the
principle elevations are divided into two zones with the lower serving as the base for the "shaft" or upper zone which is
treated as a unified whole (Longstreth 82-85). The skeletal system with its rhythm of engaged piers gives vertical
emphasis to the street elevations. These piers originally ended in finials of unknown composition. The first floor
bulkheads and store front windows have been filled in with concrete blocks. Many of the second and third story large
double hung sash windows have also been filled or modified. The rear elevation has a series of steel sash casement
windows. Three steel frame casement windows are also on the south elevation at the third floor level. The building is
clad with stucco on three sides with only the south elevation showing the concrete piers and brick curtain wall. Over
each of the second and third story piercings is a rectangular spandrel, picked out in stucco. The former front entrance
was centrally located on the Van Ness elevation. A marquee overhang of stainless steel over steel frame protects the
former entrance into the building. The original interior is still largely intact with a first floor encircled by a mezzanine
which is now partially enclosed.
*P3b.Resource Attributes:HP6 (Commercial Building, three stories or less in height)
*P4.Resources Present:• Building
P5b Photo date:8.11.05
*P6. Date Constructed/Age
and Sources:1923, Building
permit issued 4.25.23.
*P7.Owner and Address:
James and Lori Riley
727 Van Ness Avenue
Fresno,CA 93721
*P8.Recorded by:
Karana Hattersley-Drayton
Historic Preservation Project
Manager, City of Fresno
(Initial evaluation, 6.30.78 by
William E.Patnaude, FAIA)
*P9 Date Recorded:8.17.05
*P10.Survey Type:Intensive
*P11.Report Citation:"Reevaluation of the Black's Package Store 755 Van Ness Avenue for
Fresno's Local Register of Historic Resources."
*Attachments:• Building, Structure and Object Report • Continuation Sheet
DPR 523A (1/95)*Required information
Resource:Black's Package Store (Gottschalk's Warehouse)
State of California '"--The Resources Agency
DEPARTMENTOF PARKS AND RECREATION
CONTINUATION SHEET
Page 2 of4
Primary #_
HRI#-'-__...,....-
Trinomial
"Recorded by:Karana Hattersley-Drayton *Date:8.17.05 • Continuation o Update
West (alley)elevation 8.17.05
East (Van Ness)elevation and portion of south wall with exposed brick
DPR 523L (1/95)'Required information
State of California -The Resources Agency Primary *....,.-....,.-:-
DEPARTMENT OF PARKS AND RECREATION ..HRI*~_~__~_--'-___'____'..,..._--'----'-'----'_·
BUILDING,STRUCTURE,ANDOBJECTRECORD
*NRHP Status Code: 3CS, 5S2
*Resource Name: Black's Package Store (Gottschalk's Warehouse)
83.Original Use: Store and Company Headquarters 84.Present Use: Vacant/Storage
*85.Architectural Style:Two-part vertical block with restrained classicism
*86.Construction History:Store was constructed in 1923 (Building Permit #3089) for an estimated $150,000.
According to an article in the Fresno Republican R.F. Felchlin and Company were retained as "architects, engineers
and builders." Office partitions were added in 1944. Non-specific alterations were made in 1947 by the Larson-Ratto
Construction Co.
*87.Moved?.No
*88.Related Features:The building is on Van Ness Avenue on the edge of Fresno's historic downtown, with various
commercial buildings and parking structures in the immediate area.
89a.Architect:Attributed to R. F. Felchlin and Co.89b.8uilder:Attributed to R. F. Felchlin and Co.
*810.Significance:Theme:Commerce and economic development Area:California/Fresno
Period of Significance:1923-1940 Property Type:Two-part vertical block commercial building
Applicable Criteria:Local Register i and ii,III .
On January 2
nd 1923 the Black's Package Company began excavation for a new store and company headquarters on
the southwest corner of Van Ness Avenue and Inyo in Fresno (ffi 13 October 1922). According to an article in the
Fresno Republican R.F. Felchlin and Company were retained as "architects, engineers and builders." Black's already
had two other stores in town, one located up the street at 1025 Van Ness Avenue and the other at 924 Broadway. The
intent of the new building was to be ''the largest in the city," an indication of the "success and rapid growth of the
company" (FR 13 October 1922). The building would also house the company headquarters, which were relocated to
Fresno from San Jose (Simpson: 207).
Black's Package Company Stores were the brainchild of Fred P. Black, who was born in 1867 in London, Ontario,
Canada. In 1877 he came to San Jose California with his father, J.C. Black, a grocer. The family store was destroyed
in the 1906 earthquake but Fred P. Black soon opened his own grocery store and by 1908 had packaged goods and a
cash and carry policy. Black revolutionized the grocery business by packaging convenient amounts of staples, such
as beans, rice, potatoes, crackers and candy at a time when items were sold only in bulk (E!l 1 April 1949). In 1913
he came to Fresno and established his cash and carry system with a full service grocery. His business was so
successful that he was able to undersell his competitors.(continued)
*812.References:County Assessor's records; Building permits on file with the Planning and Development
Department; Sanborn Fire Insurance Maps 1898, 1906, 1918 and 1950; John Edward Powell, "Richard F. Felchlin"
1996; Fresno Republican 13 October 1922, 3 January 1923, 28 June 1928; Fresno Bee 19 January 1925,10 August
1940, 12 October 1940, 13 November 1941, 27 April 1952, 4
January 1949, 1 April 1949; Catherine Morrison Rehart, The
Valley's Legends and Legacies III p. 30; Dean Simpson,
"Business and Development," In Fresno Countv in the 20
th
Century....; Heritage Fresno: Homes and People p. 27; Richard
Longstreth, The Buildings of Main Street, 2000.
*814.Evaluator:Karana Hattersley-Drayton
*Date of Evaluation:August 17, 2005
(This space reserved for official comments.)
DPR 5238 (1/95)
State of California "":""The Resources Agency
DEPARTMENTOF PARKS AND RECREATION
CONTINUATION SHEET
Primary #-----....;....;.....,..,.......;....;.-~
HRI#..,..;---'-__---:----:-__---:-_
Trinomial
Page 4 of4 Resource:Black's Package Store 755 Van Ness Avenue
"Recorded by:Karana Hattersley-Drayton
810 Continued:
"Date:8.17.05 •Continuation
Over the next 30 years he expanded the business to a retail grocery empire worth $3,000,000 with a chain of stores in
Fresno,Sacramento and Stockton (ffi 19 January 1925, FB 1 April 1949). Fred P. Black also opened his own
discount store in 1940 at 727 Van Ness called Black's Bad Boy. This store was independently owned by Black and
sold items on a "thrift basis" through case lots and other large quantities, a precursor to today's bulk packaged outlets
(ffi 12 October 1940).
Fred P. Black married Winifred Maude Stevens in San Jose in 1902. Both Mrs. Stevens and their children were active
in the Black's company business. The family purchased the home previously owned by Arthur B. Long at 1727 L
Street (HP# 113) and was active in Fresno's civic affairs. Mrs. Black socialized with the wives of other leading Fresno
businessmen and was a member of a Tuesday afternoon card club with the spouses of Frederick E.Twining, Joseph
P. Collins, H. Rafael Lake and William O. Blasingame (FB 10 August 1940). Fred P. Black served as a director of the
Security-First National Bank and was a founder of the Fresno Community Chest (ffi 1 April 1949). In 1948 the Black's
Corporation was charged with violations of the state's unfair trade practices a scandal which may have hastened the
founder's death a year later in 1949. In 1956 all of the Fresno Black's Markets were sold and ''the largest locally-
owned grocery chain, closed its doors forever" (Simpson: 207).
The monolithic Black's Package Store at Van Ness and Inyo had a large basement to accommodate 10 carloads of
perishable merchandise,a main floor a mezzanine on the second floor and a separate third floor (FR 3 January 1923).
The building served not only as a market but also as the headquarters for the firm. The store apparently was designed
and constructed by the R.F. Felchlin Company who designed many of Fresno's outstanding commercial buildings
during this era including the Bank of Italy Building (1918) the Patterson Building (1922) and the San Joaquin Light and
Power Company Building (1923).
The former Black's Package Store eventually was purchased by the Gottschalk's Department Store for use as a
warehouse and service center. The Gottschalk's Company actively opposed listing the former Black's Package Store
on the Local Register of Historic Resources when it was nominated by the Historic Preservation Commission in 1980.
Nevertheless the building does appear to be eligible to Fresno's Local Register of Historic Resources under Criterion i
and Criterion ii,for the role the company and its founder Fred P. Black played in revolutionizing the grocery business in
California and specifically in Fresno. The building is also associated with the leading architectural,construction and
design firm of this era, R.F. Felchlin and Company (Criterion iii). With additional research the property may also be
individually eligible to the California Register of Historical Resources under Criterion 1, 2 and 3.
DPR 523L (1/95)*Required information
Recording Requested by:
City Clerk, Fresno, California
No Fee-Govt. Code 6103
Return to City Clerk,Fresno
Space above thisline reserved for Fresno County Recorder's Office
RESOLUTION NO. _
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRESNO,
CALIFORNIA,DESIGNATING BLACK'S PACKAGE STORE LOCATED AT
755VAN NESS AVENUE TO THE LOCAL REGISTER OF HISTORIC
RESOURCES
WHEREAS,the Black's Package Company Building was constructed in 1923 by the R.F.
Felchlin Company;and
WHEREAS,the building was at the time the largest grocery store in Fresno and also served
as the company headquarters for the Black's Package Company;and
WHEREAS,the building is associated with Fred P.Black who founded the company and
revolutionized the grocery business in California by packing foodstuffs in convenient amounts
(rather than selling in bulk) and by instituting a cash and carry protocol;and
WHEREAS,Fred P.Black built a grocery empire worth $3,000,000 with a chain of stores in
Fresno,Sacramento and Stockton;and
WHEREAS,the building is a two-part vertical block type with restrained classicism and
retains sufficient integrity to its period of significance of 1923-1940;and
WHEREAS,the design-build firm ofR.F.Felchlin Company was at the height of its success
and influence in Fresno at the time of construction and contributed numerous buildings to
Fresno's downtown landscape;and
WHEREAS,the property owner, James Riley, has over the past several years faithfully
restored many of the character defining features of the 1923 construction,including the finials on
the parapet;and
WHEREAS,the property owner supports the designation of the building to Fresno's Local
Official Register of Historic Resources;and
WHEREAS,the City of Fresno Historic Preservation Commission,at a duly noticed public
hearing held on March 26,2012,heard testimony on the subject property; and
WHEREAS,based on that testimony, and the presentation of facts relating to the criteria
for official designation,as set forth in the Fresno Municipal Code, Chapter 12, Article 16, made
the following findings;
That the Black's Package Store meets the criteria set out in Article 16,Chapter 12,
Section 12-1607 (a)of the Fresno Municipal Code; and is eligible for listing on
Fresno's Local Register of Historic Resources; and be recommended
to the Fresno City Council for adoption as a Local Resource; and whereas in
accordance with Fresno Municipal Code, Article 16 Section 12-1601 et seq. this
hearing has been duly noticed for Council action upon the designation
recommended by the Commission; and
WHEREAS,on May 17, 2012, Council held a hearing where it considered the
recommendation of the Historic Preservation Commission, and considered substantial evidence,
including but not limited to,staff presentation,a report prepared by staff addressing the
property's eligibility to the Local Register, a Primary Record ("PR")and a Building,Structure
and Object Record ("BSOR")prepared by the City's Historic Preservation Specialist (as defined
in FMC §12-1604(b))finding that the property met the Historic Resource eligibility
requirements for criteria i,ii and iii to subdivision 12-1607(a)(l).
NOW,THEREFORE,BE IT RESOLVED by the Council of the City of Fresno:
1. Council finds that the above recitals are true and correct.
2. Council finds that the Black's Package Store is eligible for listing under criteria i,
ii and iii of Fresno Municipal Code,subdivision 12-1607(a)(l)based upon the
evidence presented to Council in the staff presentation,staff report, the PR and
the BSOR.
3. Council designates the Black's Package Store as a Historic Resource to the Local
Register of Historic Resources.
****************************
CLERK'S CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I, YVONNE SPENCE, CMC, City Clerk of the City of Fresno, certify that the
foregoing resolution was adopted by the Council of the City of Fresno, at a regular
meeting held on the day of ,2012.
AYES
NOES:
ABSENT
ABSTAIN
Mayor Approval :
Mayor Approval/No Return:
Mayor Veto:
Council Override Vote:
APPROVED AS TO FORM:
JAMES C. SANCHEZ
City Attorne
BY:'---=~~-r-~----~~~~~LSenior Deputy
Date:__----=-.....:......=_
,2012
,2012
,2012
,2012
YVONNE SPENCE
City Clerk
Deputy
Trinomial,..;...,.,.--..;...,.,...;...,.,.-..;...,.,...;...,.,.--
NRHP Status Code,,--__..;...,.,.----'"..;...,.,.-
Primary #._____'"___'"__----:..._..;...,.,.~~;;,...,-
HRI #..;...,.,..,.,.----'"..;...,.,.---~..;...,.,.---'",...,..
Reviewer
Other Listings ..;...,.,.-------:--..;...,.,.-:--..;...,.,.~
Review Code
State of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
PRIMARY RECORD
P1. Resource Name: The Droge Building
*P2.Location:*a.County:Fresno
*b. USGS7.5' Quad:Fresno South 1963 Photorevised 1981
c. Address: 802VanNess Avenue,2107InyoStreet
d.Assessor's Parcel Number:46825205T
*P3a.Description:This two story (former)two-part commercial block building is located on the northeast
corner of Van Ness Avenue and Inyo Street in downtown Fresno. The 21,316 sf building has a rectangular
plan and sits on a .26 acre parcel. The building is currently in the process of restoration and the modern
faux-rock cladding and improvements have been removed and the interior is gutted.According to the
original building permit the construction is masonry although the brick is not visible from the exterior,due to
heavy stucco cladding.The Sanborn maps note that the construction is reinforced concrete.The corner
block, north and east ends of the building and an entrance facing onto Inyo Street are all articulated with a
decorative cornice which a previous evaluator noted as being of sheet metal.These sections of the
building are also enframed with decorative pilasters. All windows on the second story are 15 light metal
sash in a combination of fixed and awning styles. Above the windows on the decorative sections of the
building is low relief stucco ornamentation in an abstract garland design.The roof appears to be flat. All
windows on the first floor have been removed.
*P3b. Resource Attributes:HP6 (Commercial Building,under3 stories)
*P4. Resources Present: .Building
P5b Photo date:11.29.10
*P6. Date Constructed/Age
and Sources: 1922,building
permit#107
*P7. Owner and Address:
Housing Authorities of the City
andCountyof Fresno
1331 Fulton Mall
Fresno,CA 93721
*P8. Recorded by:
Karana Hattersley-Drayton,M.A.
Historic Preservation Project
Manager,Cityof Fresno
*P9. Date Recorded:11.29.10
*P10.Survey Type:Intensive
*P11. Report Citation:"Section 106 Evaluation of the Droge Building,802VanNessAvenue"
*Attachments:•Building,Structure andObject Report;.ContinuationSheet
DPR523A(1/95)*Required information
Resource:The Droge BuDding.802 Van Ness Avenue
State of California ~The Resources Agency
QEPARTMENTOFPARKSAND RECREATION
CONTINUATION SHEET
Page 2/4
Primary #__~'--'-_'--'-~--,....--,........,..-'--'-'--'----,~~
HRI#----,-.:....-.:....----:...,.....,..:....--,.----,-.:....------,.-7:-....,..-'-~.
Trin.omial
*Recorded by:Karana Hattersley-Drayton *Date:11.29.10 •Continuation
Van Ness Avenue Elevation and Window Detail,Droge Building
DPR 523L (1195)"Required information
Resource:The Droge Building,Secton 106review
St8teC)fCl1lifomia-Th~R~sourci$Agency .
DEPARTME~TOF PARKSAND RECREATION
CONTINUATION 'SHEET
Page 3 of4
.Primary #_----,_,.;..-_,.;..-----,_..,.,..:;----'----'-"'_~.........,~
HRI#----,~__"'_----,_"'_"'_"'--'--'-,"'-~"'-"'-"'""
Trinomial
*Recorded by:Karana Hattersley-Drayton *Date:7.7.11 •Continuation
Droge Building,First Floor Boarded Up,7.7.11
DPR 523L (1195)*Required information
State ofC8Ufomla -The.Resources Agency Primary.#~_~--~~-
DEPARTMENT OF PARKS AND RECREATION .HRI#~~~_
BUILDING,STRUCTURE,.AND OBJECT RECORD
*NRHP Status Code: 5S3
*Resource Name: The Droge Building
B3.Original Use: Commercial/Office B4.Present Use: Vacant
*B5.Architectural Style:Vernacular/Eclectic (2-part commercial block)
*B6.Construction History:A building permit was issued on 11 March 1922; major alterations occurred in 1948 and
1952.
*B7.Moved?.No
*B8.Related Features:The Droge Building is located on the northeast corner of Van Ness Avenue and Inyo Street
on lots 17-19, Block 96 of Fresno's original town grid in what is now a mixed commercial neighborhood on the edge of
downtown. The small one story building on the north of the Droge (814 Van Ness) was built in 1940 and was recently
completely remodeled and the facade altered. Directly behind the Droge is a 1962 motel.
B9a.Architect:None B9b.Builder:James McCullough, Engineer
*B10.Significance:Theme:Fresno's agriculture and social history Area: Downtown Fresno
Period of Significance:1922-1942 Property Type: 2-part commercial block Applicable Criteria:i,ii
The (former) 2-story commercial building located at the northeast corner of Van Ness Avenue and Inyo Street was
built in 1922 for Peter Droge, a member of a prominent pioneering fruit packing family. According to the Fresno
Morning Republican James McCullogh (engineer) designed the building (FMR 7 March 1922). McCullogh was
employed by the building's first tenant, the California Peach and Fig Growers Association. It is unknown how long
the Growers used the building but by the 1948 Sanborn map a Garment Factory was located on the 2
nd floor and
the first floor was used for offices and stores with a restaurant at the corner of Van Ness and Inyo. Also in 1948
and again in 1952 Harris Construction Company was hired to provide "general alterations" for a sum value of
$18,000. These alterations undoubtedly led to the exterior faux rock cladding on the first floor of the building which
was recently removed. In 1950 the space addressed as 812 Van Ness was a paint store, and a restaurant
remained on the Van Ness/lnyo corner. By 1978 when the building was evaluated as part of Fresno's first
architectural survey, a Sports Center occupied the space formerly used as a paint store and the corner tenant was
"Adult World" with a large blade sign which extended above the cornice line. The former Droge Building was
reviewed for its eligibility to the Local Register of Historic Resources at a noticed public hearing held on July 24,
1980 but was denied nomination by the Historic Preservation Commission. The building is currently vacant and the
interior is gutted, the roof is collapsing and the walls are shored up to prevent collapse. The building has lost
integrity to its period of significance (1922) through various modernizations and does not appear to be eligible to the
National Register of Historic Places or the California Register of Historical Resources. In a letter dated 28
December 2010, the State Historic Preservation Officer concurred that the Droge Building was not eligible for listing
on the National Register.
*B12.References:City of Fresno Building Permits; Richard Longstreth, The Buildings of Main Street, 2000; Sanborn
Fire Insurance Maps 1918, 1948, 1950, 1963; Historic Resources Inventoryform prepared 25 June 1978 by William E.
Patnaude with additional anonymous notes; memorandum on
history of the Droge Building prepared by John Edward Powell23
July 1980; Letter from the SHPO, 28 December 2010.
*B14.Evaluator:Karana Hattersley-DraytonM.A.
Historic Preservation Project Manager, City of Fresno
*Date of Evaluation:30 November 2010; 23 June 2011; 27
March 2012
(This space reserved for official comments.)
DPR 5238 (1/95)
Resource:Droge Building,802VanNess Avenue
Stateof California- The ResourcesAgency
DEPARTMENTOF PARKSAND RECREATION
CONTINUATION SHEET
Page1 of4
Primary #--,---,---'--
HRI#--,-_'__--,-_~~'---'---'--~
Trinomial
*Recorded by:Joe Moore *Date 9/21/11 .Update
Association with Peter Droge:
According to an obituary article on the front page of the Fresno Bee,April 29, 1953,Peter Droge was described as a
prominent local arigcultural businessman,and an influential force in the early effort to organize growers into co-ops,
an effort which led to the founding of the Sun-Maid Raisin Company and other valley packing firms.
"Peter Droge, 80 a retired fruit packer,vineyardist and early day leader in the cooperative marketing of the San
Joaquin Valley raisin crop died today... Droge was one of the first proponents of grower ownership of raisin packing
and sales facilities,and one of the most determined.With Charles Paulden, he was an organizer of the old California
Associated Raisin Company,which was the predecessor of the Sun-Maid Raisin Growers of California ... He came to
Fresno in 1891 and was connected with the packing house of Seropian Brothers until he formed his own packing
business in 1902.At one time his company was the largest fig packer in California and handled a third of the San
Joaquin Valley crop... In 1909 he evolved the plan for a $1,000,000 cooperative to be owned by the growers to handle
the crop and market it in an orderly fashion.Although he was a power financially,and a friend of such independent
packers as the Rosenberg Brothers,Abraham,Max and Adolph, he fought the raisin packing and sales battle on the
side of the little growers."
Association with Depression-Era Government Programs:
During the Great Depression,the Droge Building served as the local offices of numerous local, state, and federal
government programs,including those associated with President Franklin Delano Roosevelt's "New Deal."These
programs were an attempt to alleviate the conditions of poverty and unemployment that plagued the nation, and were
an early example of the so-called "social safety nef'espoused by leaders like Roosevelt.These include:
In 1934,the Droge Building was home to the offices of the State Emergency Relief Administration (SERA)a mini-relief
program that sought to find jobs for 300 individuals.Residents were required to visit the Droge Building to register for
this program.(Fresno Bee,June 13, 1934)
By 1938,the Droge Building was the location of the Fresno office of the Works Progress Administration (WPA),
established by Roosevelt though an executive order in 1935.The program put unemployed Americans to work
building infrastructure including highways,and other projects.(Fresno Bee March 3, 1938)
Association with World War II &Japanese-American Internment:
After the attack on Pearl Harbor on December 7, 1941,and American entry into the Second World War,President
Roosevelt authorized the internment of Japanese-Americans living in the western United States with Executive Order
9066 on February 19, 1942.The Droge Building served as headquarters for the local internment effort.
On May 6,1942 The Fresno Bee,in an article titled "Valley Japanese To Be Moved to Fresno Camp"describes the
arrangements made to accommodate the Japanese-American internees.
"The registration of an advance unit of Fresno County Japanese medical men,nurses and workmen to prepare
medical and living facilities at the Japanese assembly center at the Fresno County Fairground today got underway at
the hastily established evacuation control station at 2107lnyo Street."[Droge Building]
On May 12,1942 Page A 1,The Fresno Bee featured a front page article titled "Fresno Japanese Rush to Register for
Evacuation"accompanied by a photo ''Take First Step Toward Assembly Center"showing Japanese-American
residents lining up inside the Droge Building.
"Japanese residents of Fresno City paraded to a Civil Patrol Station at 2107 lnyo Street in droves today to register in
compliance with a United States Army order which will send more than 1,000 of them to assembly center by noon
Sunday.During the morning hours, facilities in the Droge Building and a crew of thirty five interviewers under the
supervision of Willard Marsh,United States Employment Service district manager in charge of the control station,
were overtaxed as registrants were handled at the rate of one a minute."
DPR 523L (1/95)"Required infonnation
State of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
CONTINUATION SHEET
Primary #-,-~
HRI#~
Trinomial
Page 2 of 4 Resource:Droge Building,802VanNess Avenue
*Recorded by:Joe Moore *Date 9/21/11 •Update
While local Japanese-Americans were temporarily interred at the County Fairgrounds and at Camp Pinedale, the
Droge Building is one of the last extant properties in Fresno County associated with the internment activities, and for
many,registration at the site marked the beginning of their internment.
The Droge Building also was associated with another aspect of the war effort. In 1944, the Kroesen Manufacturing
Company occupied the entire second floor of the building to house the main manufacturing plant to produce uniforms
for US Navy sailors.(Fresno Bee -October 13, 1944 - page A3)
Historic photographs:
In the January 5, 1924 edition of the Fresno Bee (page 8), the Droge Building is depicted from the roof of the
Californian Hotel. The building's fenestration is clearly evident, as well as its distinctive cast concrete facade, with
decorative balustrade details at the building's corners. An early storefront appears to reveal first floor transom
windows with awnings on the Van Ness Avenue elevation. The photograph also depicts the pre-Great Depression era
growth of commercial activity along Van Ness Avenue, remarking that with Black's Package Building, the street
"appears as a gorge cut through the city."
State of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
CONTINUATION SHEET
Primary #_
HRI#----'-_
Trinomial
Page 3 of 4 Resource:Droge Building, 802 Van Ness Avenue
*Recorded by:Joe Moore *Date 9/21/11 .Update
Historic photographs,continued:
From The Fresno Bee:On May 12, 1942 Page A1 - the following photo depicts Japanese-Americans inside the Droge
Building registering for the forced interment ordered by President Roosevelt.
TAKE fiRST STEP TOW ARDASSEMBL Y CENTER
DPR 523L (1/95)"Required infonnation
State of California - The Resources Agency
DEPARTMENT OF PARKS AND RECREATION
CONTINUATION SHEET
Primary #_
HRI#_
Trinomial
Page 4 of 4 Resource:Droge Building,802Van NessAvenue
*Recorded by:Joe Moore *Date 9/21/11 .Update
Historic photos continued:
The following photograph,from April 1956 was taken during the Fresno County Centennial parade at the intersection
of Van Ness & Mono avenue.The Van Ness facade of the building is clearly evident,including the cast concrete
balustrade,and original fenestration.Changes are evident from the 1924 photograph.Gone are the original first floor
storefronts and transom windows,now replaced by plaster and/or signage for Nason's Paint store, [?]Torosian,
Notary Public and Hamburger Heaven restaurant.Photographer unknown,photo available online at:
http://photos.reactionone.com/CAIFresno/Parades/1241 0720_wp9nb#888220722_LGK2H
DPR 523L (1/95)·Required information
Recording Requested by:
City Clerk, Fresno, California
No Fee-Govt. Code 6103
Return to City Clerk, Fresno
Space above this line reserved for Fresno County Recorder's Office
RESOLUTION NO.----
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRESNO,
CALIFORNIA,DESIGNATING THE DROGE BUILDING LOCATED AT
802 VANNESS AVENUE,FRESNO,CALIFORNIA
TO THE LOCAL REGISTER OF HISTORIC RESOURCES
WHEREAS,the Droge Building was constructed in 1922 for Peter Droge, a member of a
prominent pioneering fruit packing family; and
WHEREAS,the building was designed by James McCullough,an engineer;and
WHEREAS,Peter Droge was an early day leader in the cooperative marketing of raisins in
the San Joaquin Valley and helped organize the California Associated Raisin Company,which
was the predecessor of the Sun-Maid Raisin Growers of Cali fomia; and
WHEREAS,during the Depression the Droge Building housed numerous local, state and
federal government programs including in 1938 the Fresno office of the Works Progress
Administration (WPA)which put unemployed Americans to work on infrastructure projects
including highways and airports;and
WHEREAS,in 1942 an evacuation control station was established in an office at the Droge
Building to process Japanese-Americans for evacuation first to Assembly Centers, such as the
county fairgrounds and Camp Pinedale,and later to more permanent detention centers and is
therefore the only extant building associated with this episode in local history; and
WHEREAS,the Droge Building has suffered a loss of integrity over the years due to neglect
but still retains sufficient integrity of location,design, setting, feeling and association to its
period of significance of 1922; and
WHEREAS,the property owner, the Fresno Housing Authorities,is considering
incorporating the exterior street elevations of the building into a new mixed-use project;and
WHEREAS,the City of Fresno Historic Preservation Commission, at a duly noticed public
hearing held on March 26,2012,heard testimony on the subject property; and
WHEREAS,based on that testimony, and the presentation of facts relating to the criteria for
official designation,as set forth in the Fresno Municipal Code, Chapter 12, Article 16, made the
following findings;
That the Droge Building meets the criteria set out in Article 16, Chapter 12,Section
12-1607 (a)of the Fresno Municipal Code; and is eligible for listing on Fresno's
Local Register of Historic Resources; and be recommended to the Fresno City
Council for adoption as a Local Resource; and whereas in accordance with Fresno
Municipal Code, Article 16 Section 12-1601 et seq. this hearing has been duly
noticed for Council action upon the designation recommended by the Commission;
and
WHEREAS,on May 17, 2012, Council held a hearing where it considered the
recommendation of the Historic Preservation Commission, and considered substantial evidence,
including but not limited to,staff presentation,a report prepared by staff addressing the
property's eligibility to the Local Register, a Primary Record ("PR") and a Building,Structure
and Object Record ("BSOR")prepared by the City's Historic Preservation Specialist (as defined
in FMC §12-1604(b)) finding that the property met the Historic Resource eligibility
requirements for criteria i and ii to subdivision 12-1607(a)(l).
NOW,THEREFORE,BElT RESOLVED by the Council of the City of Fresno:
1. Council finds that the above recitals are true and correct.
2. Council finds that the Droge Building is eligible for listing under criteria i and ii
of Fresno Municipal Code,subdivision 12-1607(a)(l)based upon the evidence
presented to Council in the staff preseritation,staff report, the PR and the BSOR.
3. Council designates the Droge Building as a Historic Resource to the Local
Register of Historic Resources.
****************************
CLERK'S CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I,YVONNE SPENCE, CMC, City Clerk of the City of Fresno, certify that the
foregoing resolution was adopted by the Council of the City of Fresno, at a regular
meeting held on the day of ,2012.
AYES
NOES:
ABSENT
ABSTAIN
Mayor Approval :
Mayor Approval/No Return:
Mayor Veto:
Council Override Vote:
APPROVED AS TO FORM:
JAMES C.SANCHEZ
City Attorney
,2012
,2012
,2012
,2012
YVONNE SPENCE
City Clerk
BY:--------Deputy
This page intentionally left blank.
AGENDA ITEM NO.JO:30am A
Date
From:
May 17, 2012
KAREN M.BRAD~}tant Controller
Finance Departm~
COUNCIL MEETING
APPROVED BY
CITY MANAG~J't-n~'(/f
5/17/2012
SUBJECT:ACCEPT CITY OF FRESNO COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR) FOR FISCAL YEAR 2011
RECOMMENDATIONS
Staff recommends that the City Council accept the Comprehensive Annual Financial Report
(CAFR) for the fiscal year ended June 30, 2011.
EXECUTIVE SUMMARY
Provided to you was a copy of the City's 2011 Comprehensive Annual Financial Report (CAFR)
prepared in conformity with accounting principles generally accepted in the United States of
America, including the provisions of Governmental Accounting Standards Board (GASB)
Statement No. 34,Basic Financial Statements -and Managements Discussion and Analysis -
for State and Local Governments as well as GASB Statement No. 54,Fund Balance Reporting
and Governmental Fund Type Definitions.The CAFR reflects the ending balances and results
of operations of the City's governmental and business-type activities for each fund for the fiscal
year ended June 30, 2011. Fund Balances for governmental activities are presented using the
GASB 54 hierarchy which establishes fund balance classifications that are based primarily on
the extent to which a government is bound to observe constraints imposed upon the use of the
resources reported in the governmental funds. Accompanying this staff report is a
reconciliation/overview between the budget documents for the General Fund and how the
General Fund must be presented in the CAFR. In addition supplement pages have been
included which are intended to provide general guidance to management to enhance the
understanding of the CAFR.
BACKGROUND
The Comprehensive Annual Financial Report (CAFR) of the City of Fresno, for the fiscal
year ended June 30,2011,is hereby submitted. This report is certified as the official
publication of the City's financial position at June 30, 2011, showing the results of operations for
REPORT TO THE CITY COUNCIL
ACCEPT CITY OF FRESNO COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR)FOR FISCAL YEAR 2011
May 17, 2012
Page 2
the fiscal year for all City activities and funds. These operational results contributed to the
opening balances of fiscal year 2012.
The City prepared its CAFR using GASB Statement No. 34, Basic Financial Statements - and
Management's Discussion and Analysis - for State and Local Governments. Once again, the
City of Fresno has met all reporting deadlines associated with the Single Audit for Federal and
State governments as well as those related to our reporting and disclosure requirements related
to EMMA and the City's various Bond covenants. In addition, the filing deadline of the
Government Finance Officers Association (GFOA) was met in order to participate in their
Certificate of Achievement in Excellence in Financial Reporting Program.
The CAFR reflects that in Fiscal Year 2011, in spite of the City's best efforts to plan and build its
budgets on conservative estimates, Fresno continues to feel the effects of and be impacted by
the fiscal challenges of the economy. Although Total Assets of the City exceeded its Liabilities
at the close of June 2011 by nearly $1.61 billion, (reported as Total Net Assets of the City, pg.
55 of the CAFR), which compares to $1.55 billion at the end of June 2010, only $988,331 of the
increase of nearly $60.0 million comes from Governmental Activities. This is, however, an
improvement from the decline in Total Net Assets in 2010, of negative $21.29 million from
Governmental Activities. By no means, however, does this imply that the City is on the road to
recovery. The gains of 2011 pale when compared to the end of June 2007, when
Governmental Activities contributed $32.10 million to the growth in Net Assets for an overall
growth of $70.85 million.
The Total CAFR General Fund Balance at June 30,2010 was $40,178,764 as compared to only
$18,208,062 at the end of June 2011. This significant decrease was partially the result of the
Emergency Reserve declining from $10,585,846 at the end of 2010 to only $1,443,686 at the
end of 2011. The balance of the decline was the result of amounts due from the RDA, owed
back to the General Fund being classified as potentially uncollectable, at least in the near term.
The General Fund at June 30, 2011 reflects a negative ($64,274) as unassigned for any
particular purpose. This compares to negative ($2,227,677) at the end of June 2010.
As required by the City Charter, the amounts reflected in the 2011 CAFR have been audited by
an independent certified public accounting firm. The unqualified opinion of Macias Gini &
O'Connell, LLP is included in the CAFR report. (Behind the Financial Section Tab in the CAFR)
Last year's CAFR, as well as the financial statements for the eighteen previous years, was
awarded the Certificate of Achievement for Excellence in Financial Reporting by the
Government Finance Officers Association (GFOA). The Certificate of Achievement is the
highest form of recognition in governmental accounting and financial reporting, and its
attainment represents a significant accomplishment by a government and its staff. This year's
report has again been submitted to the award program for consideration.
REPORT TO THE CITY COUNCIL
ACCEPT CITY OF FRESNO COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR) FOR FISCAL YEAR 2011
May 17, 2012
Page 3
Attached to this report is the auditor's letter to management which is intended to provide
general guidance to management to enhance internal controls and promote management
stewardship. In order to plan and conduct their audit, auditors must obtain an understanding of
the City's internal control system. As a result of obtaining that understanding and as a result of
performing tests of internal controls, an auditor may note reportable conditions, material
weaknesses and/or opportunities for strengthening internal controls. The letter to management
reflects the items noted during the performance of the City's audit. A brief overview of the
auditor's comments was also previously provided to you along with the CAFR and is attached to
this staff report as well.
FISCAL IMPACT
None.
Attachments: Handout regarding the 2011 CAFR
Auditor's Letters to Management
A complete copy of the CAFR for the fiscal year ended June 3D,2011 may be viewed upon
request at the City Clerk's Office. The CAFR in its entirety is published on the City of Fresno
Website under the Financial Reports section on the Finance Department page along with the
Letters to Management.
This page intentionally left blank.
CAFR
2011
Comprehensive Annual
Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
Prepared by
The City of Fresno Finance Department
Financial Reporting Staff
Karen M. Bradley, CPA, Assistant Controller
S. Kim Jackson, Management Analyst III
Margaret Bell, CPA, Principal Accountant
Mike Getty, CPA, Principal Accountant
Anita Villarreal, Management Analyst II
Gilbert Elizondo, Senior Accountant-Auditor
Mary Boyajian, Accountant-Auditor II
Jane Mouanoutoua, Accountant-Auditor II
Greg Wiles, CPA, Treasury Officer
Phillip Hardcastle, Principal Accountant
Corrina Barbarite, Senior Accountant-Auditor
Special Thanks to
Mike Lima, Airports Finance Manager
Lisa Harwood, Airports Finance Officer
Yvonne Dedmore, Accountant-Auditor II
Rosie Rivera, Accountant-Auditor II
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Introductory Section Introductory Section
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
TABLE OF CONTENTS
PAGE
INTRODUCTORY SECTION
Controller’s Transmittal Letter .................................................................................................................. I
City Operating Fund Structure ........................................................................................................ XXXV
City Organizational Chart ................................................................................................................ XXXVI
Directory of City Officials ................................................................................................................ XXXVII
Certificate of Achievement – Government Finance Officers Association ............................... XXXIX
FINANCIAL SECTION
Independent Auditor’s Report ................................................................................................................. 1
Management’s Discussion and Analysis ................................................................................................ 4
BASIC FINANCIAL STATEMENTS
Government-wide Financial Statements:
Statement of Net Assets ......................................................................................................................... 55
Statement of Activities ........................................................................................................................... 56
Fund Financial Statements:
Balance Sheet – Governmental Funds ................................................................................................ 60
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets ...... 61
Statement of Revenues, Expenditures, and Changes in Fund Balances –
Governmental Funds .............................................................................................................................. 62
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances
of Governmental Funds to the Statement of Activities ............................................................. 63
Statement of Net Assets – Proprietary Funds .................................................................................... 64
Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Funds ........ 68
Statement of Cash Flows – Proprietary Funds ................................................................................... 70
Statement of Fiduciary Net Assets – Fiduciary Funds – Trust and Agency Funds ...................... 74
Statement of Changes in Fiduciary Net Assets – Fiduciary Funds – Trust Funds ........................ 75
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
TABLE OF CONTENTS – continued
PAGE
Notes to Financial Statements:
Note 1 Definition of Reporting Entity ................................................................................................. 78
Note 2 Summary of Significant Accounting Policies ......................................................................... 80
Note 3 Cash and Investments ............................................................................................................... 99
Note 4 Property Taxes .......................................................................................................................... 114
Note 5 Receivables ............................................................................................................................... 114
Note 6 Property, Plant and Equipment – Capital Assets ................................................................ 116
Note 7 Long-Term Liabilities ............................................................................................................... 120
Note 8 Interfund Activity ..................................................................................................................... 137
Note 9 Defeasance and Refunding of Long-Term Debt ................................................................. 145
Note 10 Risk Management Fund ........................................................................................................ 146
Note 11 Employee Benefit Programs ................................................................................................ 147
Note 12 No-Commitment Debt ........................................................................................................... 158
Note 13 Commitments and Contingencies ...................................................................................... 159
Note 14 Securities Lending ................................................................................................................. 173
Note 15 Other Information ................................................................................................................ 176
Note 16 Prior Period Adjustments ..................................................................................................... 176
Note 17 Subsequent Events ................................................................................................................ 176
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues and Expenditures – Budget and Actual
(Non GAAP Budgetary Basis) with Budget to GAAP Reconcilliation:
General Fund .................................................................................................................................. 182
Grants Special Revenue Fund ...................................................................................................... 184
Notes to the Required Supplementary Information ....................................................................... 186
Schedules of Funding Progress .......................................................................................................... 188
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
TABLE OF CONTENTS – continued
PAGE
OTHER SUPPLEMENTARY INFORMATION:
COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES:
Nonmajor Governmental Funds:
Combining Balance Sheet – Nonmajor Governmental Funds ...................................................... 192
Combining Statement of Revenues, Expenditures and Changes in Fund Balances –
Nonmajor Governmental Funds ................................................................................................... 194
Schedule of Revenues and Expenditures – Budget and Actual
(Non-GAAP Budgetary Basis) with Budget to GAAP Reconcilliation:
Special Gas Tax ............................................................................................................................... 196
Measure C ........................................................................................................................................ 197
Community Services ....................................................................................................................... 198
UGM Impact Fees ........................................................................................................................... 199
Special Assessments ....................................................................................................................... 200
City Combined ................................................................................................................................ 201
Proprietary Fund Types:
Nonmajor Enterprise Funds:
Combining Statement of Net Assets ........................................................................................... 204
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ............... 205
Combining Statement of Cash Flows .......................................................................................... 206
Internal Service Funds:
Combining Statement of Net Assets ........................................................................................... 210
Combining Statement of Revenues, Expenses and Changes in Fund Net Assets ............... 212
Combining Statement of Cash Flows .......................................................................................... 214
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
TABLE OF CONTENTS - continued
PAGE
Fiduciary Funds:
Combining Statement of Fiduciary Net Assets – Fiduciary Funds –Trust Funds ................ 220
Combining Statement of Changes in Fiduciary Net Assets – Fiduciary Funds –
Trust Funds ............................................................................................................................. 221
Combining Statement of Changes in Assets and Liabilities – Agency Funds ...................... 222
Discretely Presented Component Unit:
Statement of Net Assets ................................................................................................................ 226
Statement of Revenues, Expenses and Changes in Net Assets .............................................. 227
Statement of Cash Flows............................................................................................................... 228
STATISTICAL SECTION
Net Assets by Component – Last Ten Fiscal Years .......................................................................... 233
Change in Net Assets – Last Ten Fiscal Years ................................................................................... 234
Fund Balance, Governmental Funds – Last Ten Fiscal Years......................................................... 236
Changes in Fund Balances, Governmental Funds – Last Ten Fiscal Years .................................. 237
Gross Assessed Value and Estimated Actual Value of Taxable Property –
Last Ten Fiscal Years ..................................................................................................................... 238
Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ............................................ 239
Principal Property Taxpayers – Current Year and Nine Years Ago ............................................... 240
Property Tax Levies and Collections – Last Ten Fiscal Years ......................................................... 241
Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ......................................................... 242
Ratios of General Bonded Debt Outstanding – Last Ten Fiscal Years ......................................... 244
Direct and Overlapping Governmental Activities Debt – As of June 17, 2011 ......................... 245
Pledged Revenue Coverage – Last Ten Fiscal Years ....................................................................... 246
Legal Debt Margin Information – Last Ten Fiscal Years ................................................................. 248
Demographic and Economic Statistics – Last Ten Calendar Years ............................................... 249
Principal Employers – Current Year and Nine Years Ago ............................................................... 250
Full Time Equivalent City Government Employees by Function/Program –
Last Ten Fiscal Years ...................................................................................................................... 251
Operating Indicators by Function/Program – Last Ten Fiscal Years ............................................ 252
Capital Asset Statistics by Function/Program – Last Ten Fiscal Years.......................................... 254
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Controller’s Transmittal Letter
Controller’s TransmittalLetter
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I
CONTROLLER’S TRANSMITTAL
For the Fiscal Year Ended June 30, 2011
CITY OF FRESNO – FINANCE DEPARTMENT
2600 Fresno Street, Suite 2156 - Fresno, California 93721-3622
March 30, 2012
The Honorable Mayor Ashley Swearengin
The Honorable Members of the City Council
Distinguished Citizens of the City of Fresno
Fresno, California
COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF FRESNO
We are pleased to present the Comprehensive Annual Financial Report
(CAFR) of the City of Fresno, California for the fiscal year ended June 30,
2011 (FY 2010-2011), with the Independent Auditors’ Report, submitted in
compliance with City Charter Section 804(c). The CAFR has been prepared
by the Controller’s Office, in conformance with the principles and standards
for financial reporting set forth by the Governmental Accounting Standards
Board (GASB).
Responsibility for both the accuracy of the data and the completeness and
fairness of the presentation, including all disclosures, rests with the City.
We believe that the data, as presented, is accurate in all material respects,
that its presentation fairly shows the financial position and the results of the
City’s operations as measured by the financial activity of its various funds and, that the included
disclosures will provide the reader with an understanding of the City’s financial affairs.
FINANCIAL REPORTING AND FORMATS
The City has prepared its CAFR in conformance with the principles and
standards for financial reporting set forth by the Governmental
Accounting Standards Board (GASB). The existing comprehensive
structure of internal accounting controls in the City provides reasonable
assurance that the financial statements are free of any material
misstatements. Since the cost of internal control should not exceed
anticipated benefits, the objective is to provide reasonable, rather than
absolute, assurance that the financial statements are free of any
material misstatements. We believe that the reported data is accurate
in all material respects and that its presentation fairly depicts the City’s
financial position and changes in its financial position as measured by
the financial activity of its various funds. We are confident that the included disclosures provide
the reader with an understanding of the City’s financial affairs.
http://www.fresno.gov
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
II
GAAP requires that management provide a narrative introduction, overview, and analysis to
accompany the basic financial statements in the form of Management’s Discussion and Analysis
(MD&A). This letter of transmittal is designed to complement the MD&A and should be read in
conjunction with it. The MD&A can be found immediately following the report of the independent
auditors.
INDEPENDENT AUDIT
The City’s Charter Section 1216 requires an annual audit of the City’s financial records,
transactions and reports by an Independent Certified Public Accounting (CPA) firm. These records,
summarized in the Comprehensive Annual
Financial Report, have been audited by a
nationally recognized CPA firm, Macias Gini &
O’Connell LLP. Various other component units
of the City, consisting of, the Pension Trust
Fund, the Joint Powers Financing Authority
(JPFA), the Health and Welfare Trusts and the Redevelopment Agency, and a discretely
presented component unit, the City of Fresno Cultural Arts Properties, have been separately
audited by other CPA firms. The Independent Auditor’s Report on our current financial statements
is presented in the Financial Section.
In addition to this report, the City is required to undergo an annual “Single Audit” in conformity with
the provisions of the Federal Single Audit Act of 1996 and the U.S. Office of Management and
Budget Circular A-133, Audits of State and Local Governments and Non-Profit Organizations and
Government Auditing Standards, issued by the Comptroller General of the United States.
Information related to the Single Audit is included in a separate report.
Our CAFR is divided into the following sections:
The Introductory Section includes information about the organizational structure of the City, the
City’s economy, major initiatives, status of City services, and cash management.
The Financial Section is prepared in accordance with GASB
Statement No. 34 requirements by including the MD&A, the Basic
Financial Statements including notes, and the Required Supplementary
Information. The Basic Financial Statements include the government-
wide financial statements that report on all City financial operations,
and also include fund financial statements that present information for
all City funds. Also included in this section is the Independent Auditors’
Report on the Basic Financial Statements
and schedules.
The financial statements of several enterprise activities and all
component units of government, as well as one discretely presented
component unit, are included in this CAFR. Some component units’
financials are blended with the City’s, such as the Redevelopment
Agency of the City of Fresno, the Fresno Joint Powers Financing
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
III
Authority, the City of Fresno Fire and Police Retirement System, the City of Fresno Employees
Retirement System and The City of Fresno Employee Health Care Plan. The reason for this is that
these component units have substantially the same governing boards as the City or because they
provide services exclusively or almost exclusively for the benefit of the City even though they do
not provide services directly to the City.
The discretely presented component unit (City of Fresno Cultural Arts
Properties) is a legally separate entity for which the City is financially
accountable through the appointment of the corporation’s board and the
ability to approve the corporation’s budget; however it does not provide
services exclusively or almost exclusively to the City of Fresno. Through
its charitable purpose of owning and managing properties, it provides
ongoing services to the citizens of the community.
The Statistical Section includes up to ten years of historical financial
data, debt statistics, and miscellaneous social and economic data of the
City that is of interest to potential bond investors and other readers. Its
presentation conforms to GASB Statement No. 44.
THE REPORTING ENTITY AND ITS SERVICES
The City of Fresno (City) was incorporated in 1885, and is located in the Central San Joaquin
Valley of California. The City’s powers are exercised under the Strong-Mayor form of government.
Under this system, the Mayor serves as the City’s Chief Executive
Officer, and is responsible for appointing and overseeing the City
Manager, recommending legislation, and presenting the annual budget
to the City Council. The Mayor does not sit on the City Council nor
participate in their deliberations, except by exercising veto power. The
City Council serves as the legislative authority, and the Mayor serves
as the executive authority. The City Council is represented by seven
elected council members, one of whom is elected President by the
Council for a term of one year. The President is the presiding officer of
the Council. The City provides the full range of services, as specified
in the City Charter. These include public protection (police and fire),
construction and maintenance of public facilities (public works), parks
and recreation, public utility systems (water, sewer, community sanitation
and solid waste utilities), development and planning, tax collection,
transportation, and many others.
This CAFR covers the financial activities of the primary government, which
encompasses several enterprise activities, as well as all of its component
units and its one discretely presented component unit. Component units
include legally separate entities for which the primary government is
financially accountable and that have substantially the same governing
board as the City or provide services entirely to the City. For reporting
purposes, the operations of the Redevelopment Agency of the City of
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
IV
Fresno, and the Joint Powers Financing Authority are blended with the City. (For additional
information on the current status of the RDA as it relates to California State Assembly Bill 1X 26,
please refer to the MD&A pages 11-12, and to Note 8(b) Advances pages 139-140.) The City of
Fresno Cultural Arts Properties is discretely presented since it does not provide services
exclusively or almost exclusively to the City. For reporting purposes, its operations are presented
as a separate column on the government-wide financial statements.
FRESNO’S GOVERNMENT, ECONOMY AND OUTLOOK
Fresno is the county seat of Fresno County and is the economic and cultural hub of the fertile
Central San Joaquin Valley, a metropolitan region with more than 500,121 residents in the City
proper, and over 930,450 in Fresno County. As of 2011, the
population estimate has made Fresno the fifth largest city in
California, the largest inland city in California and the 36th largest
in the nation. Fresno is located in the center of the wide San
Joaquin Valley of Central California, approximately 200 miles
north of Los Angeles and 170 miles south of the state capitol,
Sacramento. The city is part of the Fresno-Clovis metropolitan
area, which, with a population of 1,107,416, is the second largest
metropolitan area in the Central Valley after Sacramento.
The economic base of Fresno County is predominantly
agriculturally oriented. Fresno County is the number one
agriculture-producing county in the United States. Grapes, cotton, cattle and calves, milk,
tomatoes, plums, turkeys, oranges, peaches and nectarines, and alfalfa hay are among the largest
income-producers and helped produce a gross farm income of $5.4 billion in 2010. Industry
related to agriculture, wholesale distribution, recreation, and tourism are the other components of
the Fresno economy. Industries related to agriculture include processing of fresh fruit, nuts and
citrus; manufacturing of farm machinery products, implements, and irrigation pumps, along with the
production of wine, fertilizers, insecticides, and sheet and bottle glass.
The City of Fresno currently has a land area of 112.29 square miles. Fresno County
encompasses approximately 6,017 square miles. The population of the County has grown by
approximately 16.4% in the past ten years, and boasts more than 90
different nationalities that speak over 75 different languages. Over
half of all county residents live in the City of Fresno, making it the
largest city in the county. The 2010 Federal census showed that
racial and ethnic diversity continues to be robust in the City, with all
minority groups combined representing nearly a majority of the City’s
population.
Fresno County’s economy is led by Fresno’s position as the hub for
education, healthcare, government and professional services for the
Central Valley. Construction employment rapidly expanded for many
years until the downturn in the housing market and the economy. Food processing has led the
manufacturing sector with such notable companies as Sun-Maid, Lyons-Magnus, Wawona Foods,
David Sunflower Seeds, Kraft Foods, Foster Farms, Zacky Farms, and others. Distribution has
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
V
many centers in the City, led by the 80 acre site of the Gap Pacific Distribution Center. Companies
specializing in machinery manufacturing, medical devices and water technology are also present.
Public sector employment is also a major contribution to the City’s economy.
Fresno’s location, very near the geographical centre of California, places the city a close proximity
to several major recreation areas and urban centers in the state. Fresno is approximately 200
miles north of Los Angeles and 170 miles south of the state capitol,
Sacramento. Fresno is just 60 miles south of Yosemite National Park,
and is the nearest major city to the park. Likewise, Kings Canyon
National Park is 60 miles and Sequoia National Park is just 75 miles
away.
The climate in the Fresno area is considered to be mild, ranging from a
yearly average minimum of 49.9 degrees to an average maximum of
76.2 degrees; however summers can range from 80 to 110 degrees.
Average annual precipitation is 9.86 inches, which comes principally in
the months of November through April. Winters are generally mild
with prevailing sunny weather. Snow is a rarity; the heaviest snowfall
was 2.2 inches on January 21, 1962.
Fiscal Year 2011 Economic Conditions, Budgetary Impact and Budgetary Adjustments
As with most cities in today’s economy, the City of Fresno has had to embrace structural financial
weaknesses that require immediate attention, prioritization and strategic direction. As the City’s
General Fund revenue base has eroded, there is an increasing need to consider the overall
financial health of the City as a factor in Budget resource allocation decisions. For instance, the
City, like many others, is burdened by debt and employee compensation obligations that have not
declined but rather have remained constant or even grown while revenues have declined. Several
areas of concern were identified in the Mayor’s 2012 Budget relating to the
City’s financial health:
Lack of General Fund Operating or Emergency Reserves
Existing Ongoing Negative Fund Balances
No Cushion for Operating Deficits
Ongoing Debt Service Loads (often tied to underperforming assets)
Increasing Compensated Absence Liability
Increasing Other Post-Employment Benefit (OPEB) Liability
A Potentially Underfunded Risk/Liability Fund
Uncertainly of Future Redevelopment Agency Funding
Overall Credit Rating Risk
Lack of General Fund Operating or Emergency Reserve Funds – Over the last three years, the
City’s Operating and Emergency Reserves have diminished to nearly zero. By City Council policy,
the City’s Emergency Reserve Fund was designated to remain frozen at 5% of General Fund
operating revenues/appropriations (approximately $10 million). However, due to declining
revenues and the need to repay/replenish negative fund balances, the General Fund Reserves
have been nearly depleted. In less austere times, the City budgets typically include a limited
number of other reserve or contingencies that could be tapped during an emergency to support the
Mayor Ashley Swearengin
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
VI
General Fund. However, there are few transferable balances in funds that normally would be
available (such as Vehicle Replacement or Risk/Liability Funds, which often hold unrestricted
funds contributed to them by the General Fund).
Negative Fund Balances – Over the last five or six years, the City of Fresno has gradually allowed
a variety of funds to “go negative” anticipating that at some point the funds
would be able to make reimbursements. By the beginning of Fiscal
Year 2011, excluding funds with reimbursement timing differences, the
sum of the negative fund balances on the budget (as outlined in a
presentation to Council early in Fiscal Year 2011) had grown to
approximately $36 million, of which approximately $13 million related to
the Parking Enterprise Fund alone.
In 2002, the City engaged a consultant to assess downtown parking
needs and to forecast key business needs for building a convention
center parking garage. The consultant’s report forecasted parking
demand that would substantiate the need to build and fund a
convention center parking garage. The accumulated effects of
unrealized revenues from changes in the original parking needs
forecast have resulted in a Parking Fund deficit. The table below denotes the major deviations
from the forecasted results.
Forecasted Demand in 2002 Current Parking Environment
Downtown Hotel Not Built
Convention Center & Exhibit Hall increased
events
SaveMart Center built reducing events in Selland
Arena
Daily and Monthly Parking Less than projected
Federal Courthouse Reduction in spaces needed
M Street Tower project Built private garage w/ public parking
Warehouse Row project along R Street Not built
Women’s Clinic on R Street Built facility in North Fresno
Privately owned Office Complex Not built
Civic Center Square Built private parking garage
Downtown Revitalization Delayed due to economic conditions
Other factors that resulted in negative funds were:
Overspending on a capital budget project (Shaw-Marks
interchange)
Overspending Grant Fund (HOME, CDBG)
Excess charges to Planning and Development; delayed fee
increases
Inadequate revenue to cover debt service for not only Parking but
also the Convention Center and Impact Fee Funds
During the November 2010 mid-year budget review, the City Council
approved a recommendation by the Mayor and City Manager to apply up
to $9.5 million of the General Fund Emergency Reserve to offset an
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
VII
equivalent portion of the $36 million in negative balances leaving approximately $26 million to be
repaid over time. The funds addressed were those that faced deficits that were not the result of
timing differences but rather the result of project cost overruns or lack of sufficient resources to pay
for debt service commitments. In recent years, these funds had initially borrowed from the cash
pool fully anticipating that they would ultimately be able to reimburse the pool including accrued
interest. As economic conditions faltered, the likelihood for repayment became more challenging
and as part of the mid-year budget strategy for Fiscal Year 2011, the new Mayor and City Manager
chose to address many of those fund deficits that clearly had no anticipated means of making
repayments. For CAFR purposes in prior years, these borrowings appeared as “Due to/Due from
other Funds”.
Fund
FY 2011 Budget
Beginning
Balance
FY 2011 Actual
Repayment
Progress
FY 2012 Mayor’s
Budget Proposed
Funding
Shaw-Marks Interchange ($1,624,136) $0 $1,187,135
FATRA (FYI Environmental & Development Funding ($7,267,130) $2,225,413 $1,350,000
Convention Center Operations ($839,242) $608,404 $184,800
Conference Center/Selland Expansion ($567,979) $475,993 $91,000
Zoo Enterprise Fund ($1,174,715) $588,936 $587,015
HOME Fund ($3,829,524) $631,424 $779,935
Parking Fund ($13,821,600) ($380,291) $22,800
No Cushion for FY 2012 Spending – The obvious implication of the lack of General Fund
Operating or Emergency Reserve Funds and existing negative fund balances is that even the
smallest deviation in budgeted revenues and expenses could have a significant impact on services
the City provides to its citizens. Revenue projections for Fiscal Year 2012 were based upon what
are believed to be conservative estimates and therefore expenses are
also considered to be conservative.
Ongoing Debt Service Loads/Underperforming Assets – The debt
service load in the General Fund for Fiscal Year 2012 is $17,349,100
or approximately 8 percent of all Operating Revenues. While not a
large percentage for many cities, this is a significant burden for a city
with no reserves. An even greater issue is the fact that many of the
assets related to the debt are under performing.
While not a large percentage for many cities,
this results in an even greater subsidy by the
General Fund. The biggest debt service draws
on the General Fund for debt include the
Convention Center, the Convention Center Parking Facility, the Downtown
Stadium and the No Neighborhood Left Behind Program. Most of the debt
obligations will be carried by the General Fund far into the future.
Increasing Compensated Absence Liability – The City’s Comprehensive
Annual Financial Report (CAFR) measures the annual change in the
liability for employee’s accumulated leave time, called Compensated
Absences. This amount is calculated at the actual dollar value of leave time
(vacation, holiday, sick leave, administrative leave, etc.) which employees have a right to use or to
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
VIII
be paid for in the future. While employees cannot use or claim all of the leave time at one time
(unless they leave City service), it is a concern when the total liability grows rapidly. From Fiscal
Year 2009 to Fiscal Year 2010, the Compensated Absences liability grew from approximately $45
million to $60 million respectively. While 2011 did not see the same extreme growth, it is expected
that this liability will continue to grow in the future. It is estimated that the majority of this growth
can be attributed to employee bargaining agreements, to negotiated deferrals and the impacts of
furloughs during the year-end holiday season (when leave time would otherwise have been used).
It is anticipated that unless agreements are revised in the future, this unfunded liability will continue
to grow. The provisions related to accumulated leave balances will be evaluated as part of the
review of future employee agreements and personnel practices.
Increasing OPEB Liability – Several years ago, the Government
Accounting Standards Board (GASB) began requiring governments to
reflect in their CAFR the actuarial liability of non-pension “other post-
employment benefits - OPEB”. The City of Fresno has not historically
provided expensive retiree medical benefits similar to what other California
cities have provided, and as a result the OPEB liability for the City
remained relatively low. Initially the OPEB was the result of retirees being
blended with active employee and as a result insurance premiums for the
retirees remained artificially low resulting in an implicit subsidy by the City.
However, in Fiscal Year 2010 the OPEB liability began a quick upward
trend resulting primarily from the Health Reimbursement Account (HRA)
program and has the potential to increase even more significantly in the
future. While the HRA program is similar to an OPEB type benefit, it is
accrued and reported as part of the compensated absence liability.
Beginning in 2006 the City began allowing bargaining units to transfer
some or all of their sick leave and supplemental sick leave balances
into the HRA program. Public Safety may also convert accumulated
holiday leave time into the HRA. The book balance of the leave is
accounted for but funds are not transferred into a separate account or
trust. The benefits are funded on a pay-as-you-go basis. The
balances earn interest and are used to pay health premiums for the
employee and their spouse and dependents until the individual
balances being accounted for are exhausted. Because the HRA funds
allow retired employees to pay reduced premiums and stay in the City’s
medical plan into their later years, the retiree health costs increase
substantially. These balances are treated as an additional OPEB.
Potentially Underfunded Risk/Liability Fund – As with most large cities, the City of Fresno is largely
self-insured for liability and litigation exposures with re-insurance at $3 million per incident. On an
annual basis, GASB requires that an actuarial valuation of outstanding property liability claims be
performed and that the City Attorney, as well as any outside legal Counsel being used, evaluate
the potential risk of loss related to outstanding litigation. There is a growing concern that the City’s
exposures may exceed annual funding set aside by the City to pay claims, settlements and
judgments. While these valuations are necessarily subjective, the City’s overall financial stresses
require a cautious approach to managing overall risks. It is management’s plan to re-evaluate the
City’s entire risk program and valuation methodology.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
IX
Uncertainty of Redevelopment Agency Funding – The 2012 Budget recognized the Governor’s
efforts to eliminate Redevelopment authority as being a threat both to the City’s ongoing economic
development and revitalization programs and to the City’s financial statements. While the hope
was that the State Legislature and/or the courts would act favorably
toward Redevelopment Agencies (RDA’s), that was not to be the case.
As a result of the December 29, 2011, State Supreme Court ruling that
upheld Assembly Bill 1X 26 which dissolves Redevelopment Agencies,
the funds owed between the City and the RDA are in question as to
being viable receivables to the City as a result of the ruling. While it is
considered premature to completely write off the debt owed by the
RDA to the City of Fresno, an allowance for doubtful accounts has
been recorded in the full amount of the debt, both principal and interest
in the amount of $80.1 million. It is however the City’s position that the
debt shown on the City’s books owed by the Redevelopment Agency is
currently due and owing, subject to the final judgment of the City of
Cerritos case and/or additional litigation based upon as applied challenges as may be brought.
The effect of recording the allowance to the financial statements is a reduction in advances due
from the RDA and an increase to Transfers Out. While the individual Funds reflect this
allowance/write down for Fiscal Year 2011, the Government-wide financial statements are not
impacted due to the elimination of related party transactions within those statements.
Deferred Maintenance – Nearly all governments have been required to
defer infrastructure and facility maintenance due to shrinking
resources. The City of Fresno has been no exception. The City
continues to seek out alternative funding sources, new technologies
and other long term solutions. Every effort is being made to invest in
maintenance that offers the earliest payback and those that have the
greatest and highest public benefit.
Credit Rating Risk – Staff is working diligently to demonstrate to the
investment community that the City of Fresno recognizes its financial
challenges, reports them fully and accurately and has viable strategies
to address them into the future, even during this downturn in the economy.
On Monday, August 1, 2011, Fitch Ratings in San Francisco, issued a report downgrading the
Fresno Joint Powers Finance Authority lease revenue bonds from AA- to
A-. The Fresno Joint Powers Finance Authority (JPFA) is the debt
financing arm of the City. Fitch kept the City’s rating outlook as
“Stable.” The downgrade applies to revenue bond issues that are paid
from or backed by the City’s General Fund. It would also apply to any
General Obligation (GO) bond issues. The City however has no current
plans to issue additional revenue bonds or GO bond debt in the near
future. A downgraded credit rating costs a city money due to higher
interest costs when they seek to issue additional debt. Thus, it is even
more critical that the Administration and City Council make the hard
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
X
decisions to adopt realistic achievable budgets which include rebuilding the reserves, reflecting a
sustainable organization. It is also critical that the City make steady progress in addressing the
weaknesses that have resulted in negative fund balances and depletion of fund reserves, reducing
debt loads and accelerating maintenance that has been deferred. The Reserve Management Act
that was adopted by Council in early 2011 is the first step in illustrating the City’s ongoing
commitment to resolve the City’s financial health issues.
In a press release to the local media, City Manager Mark Scott stated;
“While the City regrets the circumstances leading to the downgrade, we feel encouraged
that we are, collectively, on the right course and that with ongoing diligence, we will
achieve the sustainable structural balance we have been seeking over the last two,
sometimes painful, years.
We pledge to the public our ongoing efforts not only to reach true balance, but also to
reach a responsible level of government that provides properly-sized, well-managed core
services. Through discipline and prudence, we intend to regain our credit rating and earn
the respect of our public.”
On October 3, 2011, Standard & Poor’s also downgraded the City’s JPFA Lease Revenue Bonds
followed shortly by Moody’s on October 19, 2011. The downgrades were as follows:
Rating Agency Prior Rating Prior Outlook New Rating New Outlook
Lease Revenue Bonds
Fitch AA- Stable A- Stable
Standard & Poor’s AA- Stable A- Negative
Moody’s A1 Stable Baa1 Negative
General Obligation (GO)
Fitch AA Stable A Stable
Standard & Poor’s AA Stable A Negative
Moody’s Aa2 Stable A2 Negative
Additional discussion related to Rating Agency comments can be found in Note 17 to the Financial
Statements under Subsequent Events on pages 176-177.
Deficit Fund Recovery
As pointed out previously, the Mayor and City Management in the 2012
Budget have made rebuilding the City’s General Fund Operating and
Emergency Reserves and eliminating negative fund balances a top priority.
The Fiscal Year 2012 Budget included taking approximately $600,000 from
the General Fund to eliminate the deficit in the Zoo Enterprise Fund and
approximately $200,000 to eliminate the deficit in the Convention Center
Fund. Both of these were the result of timing issues in completing the
privatization of these operations. City Management also chose, despite
current economic conditions, to make great strides in reducing outstanding
deficit funds in Fiscal Year 2012. The Mayor’s 2012 Budget introduced a
proposal, which was adopted by Council which, if funds operate as
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XI
projected in the Budget, will enable all but two funds to rise out of the negative status. Those two
funds consist of the Fresno Yosemite International Airport/FATRA Fund and the Parking Fund. A
three year workout plan has been devised for FYI/FATRA which would bring the fund positive and
fully recovered by Fiscal Year 2015. The Parking Fund, previously discussed, continues to be a
work in progress.
The FYI/FATRA deficit is the result of the City’s litigation costs incurred related to contamination
that was discovered and identified in soils and groundwater beneath property at the Airport. This
property was once an old Army military base (Hammer Field) used
by Boeing, the U.S. Army Corps of Engineers and the United
States National Guard Bureau. The City maintained that all of the
contaminates were discharged by other parties; however, the City
continued to fund a significantly disproportionate share of the
cleanup costs during the litigation. The City filed a law suit
seeking fair and equitable compensation from the parties for their
responsibility for cleanup costs with the goal of obtaining a global
resolution with respect to each party’s fair share and equitable
percentage share of the contamination clean up costs and to
ensure the ongoing implementation of State-approved cleanup
activities. Effective September 16, 2010, the parties agreed to a settlement, ultimately approved
by the Court, which resulted in a onetime payment of $1,350,000 to the City and with the City only
being responsible for 10% of ongoing cleanup costs. Boeing and the US Government are
responsible for 90% of the ongoing cleanup. The June 30, 2010 CAFR reflected an account
receivable due from Boeing in the amount of $200,000 to offset administrative expenses
associated with past clean up costs. In addition, an amount of $1,150,000 was reflected in Due
from Other Governments with an offset to Cost of Services to reflect the payment from the US
Government to the City, also associated with the settlement of past costs related to the cleanup of
the Old Hammer Field.
Economic Workout Plan
The City of Fresno’s budget balancing efforts over the last two and a
half years have been ongoing. While the City historically has
prepared and adopted one budget per year, from 2009 through the
adoption of the Fiscal Year 2012 Budget, the City will have gone
through the development of seven major annual, mid-year, and year-
end budget plans in an effort to respond quickly to changing
economic trends.
With each of the seven major budget plans developed over the last
two and a half years, reductions in expenditures have been made
strategically with a vision for the future of the City of Fresno. Cuts
were not made indiscriminately but rather were developed, modified and adopted according to a
strategic plan that when fully implemented, should ultimately result in fiscal stability for the City,
restoration in the delivery of essential municipal services, and gradual revitalization to the most
economically distressed areas of the City.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XII
Some of the guiding principles used to develop the City’s expenditure plans thus far during the
Swearengin Administration include:
Protect funding to “core services” to the greatest extent possible, with public safety being
the top priority of those core services;
Adopt service level standards for the delivery of core services;
Make early and aggressive cuts to address budget shortfalls to minimize the impact on
public services;
Consider the overall long term financial health of the organization, not just the immediate
cash flow needs over the next twelve months;
Partner with community based organizations and private entities whenever and wherever
practical;
Invest in appropriate strategies that address the long-term economically challenged
portions of the City, all the while developing budget plans that deal with the immediate
operational needs of the City.
From an administrative standpoint, “core services” are those essential services that only municipal
government can provide either because the City alone has direct jurisdiction and responsibility for
the service/issue, and/or because city government has unique expertise or capacity to carry out
the service or address the issue. Core services relate directly to public health, safety and welfare.
As for the achievement of the desired service levels in the delivery of core services across the
board at City Hall, this continues to be a work in progress. While the City has incredibly talented
and dedicated people working throughout the organization, providing daily, many examples of
excellence; we continue to work toward an institutionalized standard of excellence in the
organization. There are still outdated practices in some areas in need of technology, and process
and policy updates. Some of these changes will take time and access to improved revenue
streams. Management however continues to aggressively work toward identifying these areas
and making the necessary changes in order to establish the desired excellence throughout the
organization.
Administration and City Council Strategic Priorities
In November 2010, Mayor Swearengin presented to the City Council an
overview of her strategic direction for the City of Fresno that is driven
by the guiding principles outline above. The strategy includes both a
focus on immediate and ongoing service priorities, but also long–term
objectives that both the Administration, working with the City Council,
should be addressing. The Mayor identified the immediate and ongoing
priorities to be as follows:
Public Safety – reduce violent crime, gangs, drugs and property
crime; maintain ongoing fire prevention and suppression efforts and improve emergency
response coordination.
Public Space and Utilities – develop a strategic plan for the City’s five-year capital
improvement projects; ensuring the operation of all parks and community centers;
maintaining roads, traffic signals, sidewalks, curbs and gutters; continuing the ongoing
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XIII
provision of high quality services; and planning ahead for capital repair and maintenance
of all City-owned facilities.
Effective, Efficient and Fiscally Prudent Operations – address working on the current fiscal
emergency by continuing to make the difficult decisions necessary to balance the budget;
putting the City back on the path toward being a structurally balanced, financially stable
organization; and improving the City’s inefficient and outdated operations, namely related
to development services and capital planning.
The “long-term and transformational” priorities identified by the Administration were as follows:
Business Growth and Jobs – the Mayor’s PIPES (Process Improvement and Permitting
Enhancement Strategy) initiative to streamline City Hall development processes; ensuring
adequate industrial infrastructure; improving customer service for industrial customers;
launch of the Fresno Food Expo to support the expansion of food companies in Fresno;
promotion of locally owned business through the creation of on-line and print business
directories; adult education and workforce development; and support for high speed rail
initiatives.
Revitalization – development land use policies and a City zoning code that support urban
revitalization; recruiting investors to Downtown Fresno; re-purposing the code enforcement
function within the City to support neighborhood revitalization; focusing grant dollars
toward Downtown neighborhoods; and implementing the 10-year plan to address
homelessness.
Significant Economic Outcomes
The local economy has been showing signs of a fragile recovery.
Revenue trends have improved somewhat in the last six months.
Unfortunately, unemployment in Fresno exceeds 17 percent and
real estate activity has only slightly improved, which indicates that
recovery will likely take several more years.
The City of Fresno’s General Fund reached a peak of $251.1 million
in Fiscal Year 2008 even though the City was beginning to see the impacts of recession by late
2007. Growth of City revenue, especially sales tax, began to decline during the last few months of
2007. Sales tax continued to decline at a precipitous rate throughout 2010. The City experienced
an uptick of Sales Tax receipts in the first two quarters of 2011 and is cautiously optimistic that this
trend will continue through Fiscal Year 2012.
Additionally, the burst of the housing bubble in 2008 had a material impact on home values, which
resulted in the County Assessor lowering property values across the City and County. This
reduction in assessed valuation resulted in a 5 percent decline in the General Fund’s property tax
revenue in 2010. In Fiscal Year 2011, the City realized a modest gain of 1.71 percent in assessed
valuations.
In 2004, the State and local governments agreed to “swap” vehicle license fee (VLF) revenue for
property tax backfill. This agreement links the VLF revenue to growth and decline in property tax
values. As such the City’s third highest revenue stream, VLF, realized a 5 percent reduction in
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XIV
2010, was flat in 2011, but was expected to increase by 2 percent in Fiscal Year 2012 consistent
with anticipated Property Tax valuations.
On the expenditure side, the City has incurred cost increases
over the last several years while our revenues have been
shrinking. In Fiscal Year 2012, costs will continue to increase.
These costs include contracted employee compensation and
benefit cost increases, rising property and health insurance costs,
greater unemployment insurance rates and increasing
contributions to the retirement funds.
The City of Fresno began the contraction of its General Fund
expenditures with mid-year adjustments in Fiscal Year 2009 and
has continued to cut General Fund expenses through the Fiscal Year 2011 annual budget process,
as well as through mid-year adjustments in the fall and spring. From January 2009 through the
Fiscal Year 2011 spring, the City has had to adjust for an $80.4 million General Fund shortfall.
The Fiscal Year 2012 budget addressed another $18.5 million shortfall for a combined total of
$99.2 million in budgeted cuts since January 2009.
Revenues
The tone of any government’s budget is always set by the availability of resources. Revenues and
available fund balances must be able to support budgeted expenditures. For the General Fund,
revenues include such categories as Sales Tax, Property Tax, Motor Vehicle License Fee (MVLF),
Business License, Room Tax (Transient Occupany Tax or TOT) and Charges for Services, among
others. The top three single largest revenues generated in the General Fund are Sales Tax,
Property Tax and MVLF. They represent 72.6% of operating revenue.
Sales and Use Tax: The sales tax an individual pays on a purchase is
collected by the State Board of Equalization and includes a state sales tax,
the locally levied Bradley-Burns sales tax and several other components.
The sales tax is imposed on the total retail price of any tangible personal
property.
A use tax is imposed on the purchaser for transactions in which the sales
tax is not collected. Sales and use tax revenue received by Fresno is
general purpose revenue and is deposited into the City’s General Fund.
Cities and counties may impose additional transaction and use taxes in
increments of 0.25% with a two-thirds City Council approval and majority
voter approval. The combined rate of the City and County transaction and
use taxes may not exceed 2%. The County of Fresno imposes three special purpose taxes in
addition to the Bradley-Burns rate of 8.25%. These include: (1) Public Library (FCPL) 0.125%; (2)
Measure C (FCTA) 0.50%, and (3) Zoo (FCZA) 0.10%. Of these special purpose taxes, the City of
Fresno receives a direct benefit from the Measure C tax, which is captured in its own fund,
separate from the General Fund.
Sales tax revenue is among the top three largest revenue sources to the City’s General Fund.
Between Fiscal Year 2002 through Fiscal Year 2007 the City of Fresno was reaping the rewards of
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XV
a growing community with average annual growth in sales tax that exceeded 4.6%. However, the
downturn in the economy has resulted in an immediate and ongoing impact on Sales Tax revenue.
Sales Tax continued to decline at a precipitous rate throughout 2008 – 2010. The monthly trends
currently reflect a 4% growth in this revenue stream however. The 2012 Budget assumed that the
pattern of recovery would continue with a slight increase to 4.4% through the end of Fiscal Year
2012.
Property Tax: The property tax is an ad valorem (value-based)
tax imposed on real property and tangible personal property.
(State law provides a variety of exemptions to the property tax,
including most government-owned property; nonprofit,
educations, religious, hospital, charitable and cemetery
properties; the first $7,000 of an owner-occupied home; business
inventories; household furnishings and personal effects; timber,
motor vehicles, freight and passenger vessels, and crops and
orchards for the first four years). California Constitution Article
XIIIA (Prop. 13) limits the property tax to a maximum one percent
of assessed value, not including voter-approved rates to fund debt.
The assessed value of property is capped at the 1975-76 base year plus inflation - or two percent
per year. Property that declines in value may be reassessed at the lower market value. Property
is reassessed to current full value upon changed in ownership (with certain exceptions). Under
Proposition 57, beginning in Fiscal Year 2004-05, the local (city) sales tax rate was reduced by
0.25% and the state rate increased by 0.25% to repay state fiscal recovery bonds. Cities and
counties are reimbursed dollar for dollar with additional property tax. This arrangement, known as
the “triple flip” will last approximately 10 years until the bonds are repaid.
The largest revenue in the City of Fresno’s General Fund is property tax
revenues which are directly affected by local property values. Property
Tax has grown an average of 8.7% over the five years prior to Fiscal Year
2009. However the market has changed substantially over the last few
years. Property values on homes traded in the last four years have
declined significantly. Additionally, the County Assessor made wholesale
reductions in the Assessed Valuations (AV). The reassessment resulted in
a decline in Property Tax revenue of 5% in Fiscal Year 2010. At the time
the 2012 Budget was prepared, information released by the Assessor’s
Office indicated that assessed values would not decline further in Fiscal
Year 2012, but rather would reflect modest growth of 2% overall. As of the
date of these financial statements it appears that rather than grow, they
may decline 2.6%.
Motor Vehicle License Fee (MVLF):The third major source of revenue for the City of Fresno is
Motor Vehicle In-Lieu fees. The MVLF is a tax imposed by the State on the ownership of a
registered vehicle in place of taxing vehicles as personal property. Under California Constitution
Article XI, Section 15, VLF revenue (based upon a rate of 0.65%) must go to cities and counties.
Since 1948, the VLF tax rate has been 2%. In 1998, the Legislature and Governor began cutting
the tax, backfilling the loss to cities and counties with a like amount of State general fund money.
In 2004, the State reduced the rate to 0.65% and replaced the State general fund backfill to cities
and counties with additional property tax in lieu of MVLF. The MVLF is collected by the State
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XVI
Department of Motor Vehicles (DMV). Most MVLF revenue goes to fund county health and welfare
programs (75%) and DMV administrative charges (14%). The allocation to cities is on the basis of
population and provides less than one percent of general fund revenues to the average city
budget.
Property Tax In-Lieu of Vehicle License Fees: In Fiscal year 2004 –
2005, cities and counties began receiving additional property tax to
replace MVLF revenue that was cut when the State repealed the
State general fund backfill for the reduction in the MVLF. Beginning
in Fiscal year 2005 – 2006, this property tax in-lieu of MVLF grows
with the change in gross assessed valuation of taxable property in
the jurisdiction from the prior year. Property tax in lieu of MVLF, or
VLF Swap allocations are in addition to other property tax
apportionments. Property tax/VLF Swap accounts for 15.4% of
general revenue for the City.
Property Tax/VLF Swap was projected to be $36.5 million in Fiscal Year 2012, which was a 2%
increase, at the time the budget was built over Fiscal Year 2011 estimated receipts. The revenue
assumption was based on the application of the Proposition 1A “Triple-Flip” methodology linking
MVLF to Property Tax growth and then backfilling as Property Tax. Actual receipts for Fiscal Year
2011 were $34.1 million.
Other Revenues
Business License Tax: Most cities in California levy a Business License Tax. Tax rates are
determined by each city which collects the taxes. For the City of Fresno, the maximum tax is
specified in the Master Fee Schedule for Retail and Wholesale
Business Tax and in the Municipal Code 7-1202B. On average,
the business license tax provides about 6.8% of the City’s
General Fund Revenue. This revenue was projected at $16.2
million in Fiscal Year 2012, which is $1.6 million less than that
estimated for 2011. In 2011 aggressive efforts towards
collections combined with additional revenue recovery efforts
resulted in a $1.6 million spike in realized revenue. In this
uncertain economy, there are businesses that will not survive,
which will negatively impact this revenue stream. While there are
likely to be new startup companies to offset some of these losses,
it is not anticipated that they will completely offset the losses.
Transient Occupancy Tax (TOT): Like the business license tax, a Transient Occupancy Tax (TOT)
may be levied by a city under the regulatory powers granted to cities in the State Constitution.
More than 380 cities in California impose TOT on people staying for 30 days or less in a hotel, inn
or other lodging facility. Rates range from 4 to 15 percent of the lodging cost. The City of Fresno’s
rate is 12%. This revenue started trending downward in Fiscal Year 2009 due to declining travel
and convention markets as a result of the economy and continued to decline through Fiscal Year
2010. Another factor has been the number of local hotel/motels struggling to stay in business and
failing to submit TOT collected to the City. Currently the City has no methodology in place to
“attach” collections or lien properties as many of the facilities are not owned by the operators but
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XVII
are rather being operated by Franchisees. The City has however seen a modest recovery in this
area.
Franchise Fees: Franchise Fees are collected in lieu of rent for use of cable television companies
and utilities. The City of Fresno currently has franchise agreements with Comcast, AT&T and
PG&E. These agreements are subject to commodity and usage. The City of Fresno renegotiated
the PG&E franchise fee in Fiscal Year 2011 doubling the amount on the gas franchise from 1 to 2
percent, which is expected to result in an increase in revenue of at least $1 million annually.
In addition, the Fiscal Year 2012 budget was built on the assumption that the City would collect a
franchise fee totaling $500,000 annually for roll-off trash bin services. The budget also included
the assumption that the City’s adoption of franchising its Commercial Solid Waste Operations
would begin October 1, 2011. The budget anticipated three quarters of the expected annual
revenue to the General Fund, which was estimated at $1.9 million. The actual assumption of
operations by the private haulers was delayed however until December 5th and as such revenue
projects required modification as part of the mid-year budget analysis.
Service Charges and Fee: Cities have authority to impose fees, charges and rates for services
and facilities they provide, such as plan checking or recreation classes. Use of these revenues is
limited to paying for the service for which the fees are collected, but may include overhead, capital
improvements and debt service. All fees charged must be approved by a resolution of the Council
and are presented in the Master Fee Schedule (MFS). The most recent MFS updates were either
approved in part by Council on May 5, 2011 or were addressed through the
budget adoption process.
Budget Strategies
The Fiscal Year 2012 Budget was prepared with three major strategies
to address the $18.5 million revenue shortfall going into 2012.
Continued Contraction of the Organization – Continued
contraction of ongoing operations through employee reductions and
departmental savings in maintenance and administration expenses;
Changes in Operations – Implementation of changes in the way
we do business, including outsourcing some City services; and
Financial Planning – Use of one time sales tax accrual to recognize June sales tax in the
year it is earned and adjusting the pay period ending date for the final 27th pay period to
smooth the impact of the additional pay period over the next 5 years.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XVIII
Over the last three years nearly 886 positions have been impacted resulting from departmental
cuts and layoffs which crossed all departments as denoted below.
Department FY 2010
Adopted
FY 2011
Adopted
FY 2011
Amended
FY 2012
Adopted
% Chg
2010 - 2012
General Fund Departments:
Mayor/City Manager 27 21.8 18.8 17.8 (34%)
City Council 25 23 23 23 (8%)
City Clerk’s Office 7 5 5 5 (29%)
PARCS 122.25 59.5 54 52 (58%)
Police Department 1280.4 1026.66 978 966.75 (25%)
Fire Department 440.6 392.95 374.7 357.65 (19%)
1902.25 1528.91 1453.5 1422.2 (25%)
Special Revenue Departments:
Public Works 401.4 302.4 275.6 288.6 (28%)
Enterprise Departments:
Airports Department 83 83 79 77 (7%)
Development and Resource Mgt 204.39 176.03 155.03 142.34 (30%)
Department of Public Utilities 744 749 710 697.08 (6%)
Transportation/FAX 494.8 416 409 409 (17%)
1526.19 1424.03 1353.03 1325.42 (13%)
Internal Service Funds:
City Attorney’s Office 44 39 33 33 (25%)
Budget & Management Studies 15 13 11 11 (27%)
Retirement/Redevelopment 12 12 12 11 (8%)
Information Services Department 76 56 49 49 (36%)
Finance Department 79.65 58 48 44.68 (44%)
General Services Department 4 3 0 0 (100%)
Personnel Services Department 41 35.8 31 31 (24%)
217.65 216.8 184 179.68 (17%)
Total Overall 4101.49 3472.14 3266.13 3215.9 22%
Sworn Safety Positions – included above
Department FY 2010
Adopted
FY 2011
Adopted
FY 2011
Amended
FY 2012
Adopted
% Chg
2010 - 2012
Police Department 849 816.58 783 766.75 (10%)
Fire Department 383 340.35 334,7 317.65 (17%)
Airports Department 5 5 5 5 (0%)
Total Overall 1237 1161.93 1122.7 1089.4 12%
The proposed budget for Fiscal Year 2012 was formally adopted on June
24, 2011 with nominal modifications to what had been rolled out in May
2011.
City’s 2011-2012 Budget
The following page provides a graphic illustration of the City of Fresno’s
originally adopted 2012 fiscal year budget, prior to mid-year budget
adjustments.
City’s 2011-12 Budget
Mayoral budget priorities:
–Deficit Fund Recovery
Rebuild the City’s General Fund Operating
and Emergency Reserves.
Eliminate negative fund balances.
Continue working on the Parking Fund
deficit.
–Economic Workout Plan
Protect funding to core services to the greatest
extent possible.
Adopt service level standards for delivery of
core services.
Make early and aggressive cuts to address
budget shortfalls.
Consider overall long term financial health of
organization, not just immediate cash flow.
Partner with community based and private
organizations to provide services.
Invest in strategies that address long-term
economically challenged portions of the City
Administrative and City Council Priorities:
Public Safety
Public Space and Utilities
Effective, Efficient and Fiscally Prudent
operations.
Business growth and jobs.
Neighborhood Revitalization
Highly focused and pro-active budget strategy
Financial Operations
Balanced General Fund Sources & Uses Structure
Mayor Ashley Swearengin
Financial Operations
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
General
Government
2.9%
Public Works
3.0%
PARCS
4.8%
Fire
20.4%
Police
57.6%
Public Safety D/S &
Matches
5.6%
General Fund
Transfers
4.3%
Net Citywide
Contractual
Obligations
1.4%
Uses
Intra-
governmental
3.0%
Franchise Tax
4.3%
Charges For
Services
6.0%
All Other
3.6%
Room Tax
3.7%
Motor Vehicle In-
Lieu
15.4%
Business Tax
6.8%
Property Tax
29.2% Sales Tax
28.0%
Sources
XIX
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XX
GRAPHIC OVERVIEW
The next several pages provide a graphic illustration of the City of Fresno’s regional perspective,
economic overview, and historic reserves and fund balances. Additional graphic financial
illustrations can be found in the Management Discussion & Analysis section immediately following
the report of the independent auditors.
Regional Perspective
City serves as the economic and cultural center for the San Joaquin Valley
Economic Overview
•The City of Fresno is strategically located in the center of
California with nearly half a million residents (500,121) as
of January 1, 2011
•While agriculture remains the primary industry (14.14%
of jobs), Fresno’s economy continues to diversify,
reflecting its advantageous location and attractive cost of
living
•City has land area of 112.29 square miles
•Fresno is the 5th largest city in California by population
and 34th largest in the nation
•Fresno is approximately 200 miles north of Los Angeles
and 170 miles south of the state capital, Sacramento and
is the second largest metropolitan area in the Central
Valley after Sacramento
•Home to many internationally known business incubators
•Approximately 60 miles south of Yosemite National Park,
Fresno also serves as gateway to Sequoia National Park
(75 miles), Sierra National Forest (40 miles) and Kings
Canyon National Park (75 miles)
Fresno is at the Center of California
1990 vs. 2010 Estimated Number of Workers by Industry
___________________________
Source: CA Employment Development Department
Agriculture
19%
Leisure &
Hospitality
6%
Government
18%
Finance, Insurance
& Real Estate
5%
Retail Trade
10%
Wholesale
4%
Service
20%
Mining &
Construction
6%
Manufacturing
9%
Transportation &
Public Utilities
3%
1990
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
Agriculture
14%
Leisure &
Hospitality
8%
Government
21%
Finance,
Insurance & Real
Estate
4%
Retail Trade
10%
Wholesale
4%
Service
24%
Mining &
Construction
4%
Manufacturing
8%
Transportation &
Public Utilities
3%
2011
Regional Perspective
City serves as the economic and cultural center for the San Joaquin Valley
Economic Overview
XXI
City Economic Overview Economic Overview
436 442 449 456 465 471 479 485 495 502 500
0
100
200
300
400
500
600
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Population in Thousands
Population Growth Principal Employers (Private Sector)
SummaryDiversified Agricultural Base
•Agricultural is the one of the backbones of the Fresno
area and remains robust; Fresno County produces
more than 350 commercial crops providing gross
production of $5.37 billion in 2010; California
produces most of the grapes grown in the United
States; Many specialty crops are almost solely
produced in California – almonds, kiwifruit, nectarines,
olives and pistachios; Growers continue to expand into
more lucrative products
•Fresno is marketing itself as an ideal location for
manufacturing and distribution due to strategic
location, low business costs and affordable housing
–Within one day’s drive of nearly 39 million people
there is the expectation of continued commercial
and industrial development over the long-term
•Government, services and trade are also
important economic sectors in the area
Employer Industry Employees
Community Medical Centers Healthcare 6,000
Saint Agnes Medical Center Hospital/Health Care 2,800
Permanente Medical Group Medical/Health Care 2,160
Pelco Video Security Systems 2,029
Children’s Hospital Pediatric Hospital 1,996
Ruiz Foods, Inc Frozen, Prepared Foods 1,729
Chukchansi Gold Resort/Casino Resort & Casino 1,385
Tachi Palace Hotel & Casino Resort & Casino 1,200
Foster Farms Poultry Farm/Processing 1,100
Adventist Health Hospital/Health Care 955
City is poised for steady, manageable long-term growth
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
City Economic Overview Economic Overview
City is poised for steady, manageable long-term growth
Grapes
12%
Nectarines
3%
Poultry
9%
Tomatoes
11%
Milk
5%
Almonds
9% Cattle and Calves
5%
Oranges
3%
Garlic
2%
Peaches
3%
Other Crops
38%
XXII
l & d l
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
Historical�Reserves�&�Fund�Balances
City’s Cash Balances Financial�Operations
Historical General Fund Cash Balances
$in millions
$11.468 $12.088 $13.365
$15.673
$22.051
$27.149
$22.473
$10.314 $10.648
10
15
20
25
30
$in�millions
Historical Unreserved Fund Balances through FY 2011(1)
$0.000
$2.526 $2.824
$0.094
$2.802 $1.508
0
5
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
20.0%
7.2%
8.70%8.10%8.90%7.90%
11.40%10.50%10.80%
15.00%15.80%
13.50%
11.70%
3.03%
*
5.0%
10.0%
15.0%
1. Unreserved Fund Balance and Emergency Reserve as a % of General Fund Expenditures & Transfers Out.
* The CAFR for 6/30/2011 reflects no Unreserved Fund Balances due to the change in presentation to GASB 54 – see below.
Committed, Assigned and Unassigned Fund Balances - new presentation GASB 54
(2)
0.17%0.00%*
0.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
3.38%
5.00%
0.59%
0.00%
2010 2011
2. Committed, Assigned and Unassigned Fund Balances as a % of General Fund Expenditures and Transfers Out
XXIII
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXIV
Fiscal Year 2012 Mid-Year Budget Adjustments
On March 12, 2012, Mayor Ashley Swearengin and City Manager Mark Scott held a press
conference relaying the message that the City of Fresno is in severe financial distress that requires
immediate action. They outlined a Fiscal Sustainability Policy that details a comprehensive series
of actions required to meet both short-term cash flow challenges and address long-term structural
budget issues.
Mayor Swearengin expressed that the City’s fiscal sustainability requires funding core services
first, eliminating all negative fund balances, and restoring at least minimal emergency and
maintenance/replacement reserves within 10 years. The proposed policy is intended as a
framework seeking to accomplish four outcomes:
Setting a course to restore the City’s overall financial health and
credit rating;
Achieving spending and minimum financial reserve targets;
Adopting employment compensation policy changes to be
negotiated as employee contracts are opened for
negotiations; and
Directing immediate actions seeking to match expenditures to
revenues and identifying options for savings in employee
compensation and other costs.
The administration announced that they would present a workshop on
the policy at the March 22 meeting of Fresno City Council and would ask Council to adopt the
policy at its March 29 meeting.
“This proposal recognizes the reality that despite the fact that we have made a series of hard
decisions over the past three-plus years, we have no choice but to take definitive action to make
fundamental, structural changes to our operations if the City is to achieve fiscal sustainability,”
Mayor Swearengin said. “This policy lays the foundation for a 10-year plan to bring the City of
Fresno back to fiscal health.”
Mayor Swearengin noted that the City already has addressed nearly
$100 million in budget shortfalls resulting from declining revenues
and increased expenses and reduced the City-wide workforce by
22 percent since 2009. However, the City still faces a $2.1 million
year-end deficit in Fiscal Year 2012 and a projected $65.8 million
deficit in five years if additional actions are not taken. All three
credit rating agencies have downgraded the City by three levels,
citing lack of cash reserves and negative fund balances, poor
prospects for the Valley economy, and lack of employee
compensation concessions.
“Despite every effort to reduce our costs through layoffs and
reductions to service levels, we simply cannot cut service levels deeper without jeopardizing the
community’s health, safety and welfare,” Mayor Swearengin said. “It appears impossible to pay our
future bills and operate in a cost-efficient, sustainable manner without help from our employee
bargaining groups.”
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXV
City Manager Mark Scott noted that despite significant spending cuts in other areas, the average
compensation “per employee” has gone up 10 percent since 2009 and, when adding retirement
and health benefits costs, the expense per employee has risen 25 percent over the same period.
Employee costs account for 81 percent of the City’s General Fund.
Because of the sheer magnitude of employee compensation costs, Mayor Swearengin and City
Manager Scott said that efforts must be taken immediately to meet and confer with employee
groups to study options and make meaningful cost reductions.
According to Mayor Swearengin and City Manager Scott, employee
bargaining groups should anticipate negotiations on salaries, salary
premiums, the length of bargaining agreements, medical benefits,
retirement benefits, leave accumulations and any other changes
appropriate to achieve fiscal sustainability while maintaining
essential city services.
They added that other actions included in the proposal are:
Conducting a public review of the City’s financial records and
immediate cash flow projections to provide complete
transparency for the public and interested stakeholders. City Manager Scott will be
scheduling one or more workshop meetings to present facts concerning the City’s financial
situation. Employee bargaining groups will be encouraged to involve their
financial/accounting consultants and advisors to participate;
Evaluating all options for reducing costs of health and welfare benefits. City staff will
comprehensively scrutinize all health care obligations to ensure they are sustainable,
prudent and consistent with community standards. The evaluation will include an analysis
of the Fresno City Employees Health and Welfare Trust to determine whether alternatives
exist to provide fair and sustainable benefits. The evaluation will be completed by May 1
and will be presented to City Council at a public meeting;
Evaluating all options for reducing retirement costs. The City will immediately initiate a
review of all pension obligations to determine what legally may be modified to reduce costs.
Reducing paid leave balances. According to the proposal, the accumulation of leave
balances includes future cost commitments that pose a significant and unfunded burden on
the City’s General Fund. The City will develop a City-wide program for leave that reduces
long-term liabilities and is rational, sustainable and consistent
with community standards.
Directing the City Manager to contact labor
representatives and request “meet and confer.” The City
Manager will request that labor groups re-open their existing
Memorandum of Understanding (MOU) or, for labor groups
who’s MOUs will soon expire, begin negotiations now on a
successor MOU. The City Manager will report to Council within
30 days about the bargaining groups’ response to the request.
The fiscal management policy will continue to follow established
policies such as the Better Business Act, Labor-Management Act, and the Reserve Management
Act. It also includes adopting fee increases that fully cover costs for fee-based services and
providing budget allocations for basic maintenance and replacement of equipment and property.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXVI
OTHER FINANCIAL INFORMATION
Internal Controls
In developing and evaluating the City’s accounting system,
consideration was given to the adequacy of internal accounting
controls. Internal accounting controls were designed to provide
reasonable, but not absolute, assurance regarding: (1) the safeguarding
of assets against loss from unauthorized use or disposition; and, (2) the
reliability of financial records for preparing financial statements and
maintaining accountability for assets. The concept of reasonable
assurance recognizes that: (1) the cost of a control should not exceed
the benefits likely to be derived; and, (2) the evaluation of costs and
benefits requires estimates and judgments by management. All internal
control evaluations occur within the above framework. We believe that
the City’s internal accounting controls adequately safeguard assets and
provide reasonable assurance of the proper recording of financial transactions.
Budgetary Process/Control
The City operates under the strong-Mayor form of government. Under the
strong-Mayor form of government, the Mayor serves as the City’s Chief
Executive Officer, appointing and overseeing the City Manager,
recommending legislation, and presenting the annual budget to the City
Council.
The budget of the City of Fresno, within the meaning and context of Section
No. 1205 of the City’s Charter, must be
adopted by resolution by the City Council
by June 30th of a given year. As provided
by Section 1206 of the Charter, any
adjustments in the amounts appropriated
for the purposes indicated at the
department/fund level shall be made only upon a motion to
amend the resolution adopted by the affirmative votes of at least
five Council members.
Administrative changes within the department/fund level may be
made without approval of Council within written guidelines established by the City Manager. For
accounting and auditing convenience, accounts may be established to receive transfers of
appropriations from department appropriations for capital improvements in two or more different
funds for the same capital project. Department appropriations in Internal Service Funds (ISF) may
be administratively adjusted, provided no amendment to the resolution is required to adjust the
appropriation in the department receiving the service from the ISF.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXVII
The funds allocated to the respective accounting object classes
comprising the total appropriation for each division or department, are for
purposes of budgeting consideration and are not intended to constitute
separate appropriations. Funds allocated to an object class may be
expended for the purpose of any other object class if such expenditures
are within the written guidelines established by the City Manager.
The objective of budgetary controls is to ensure compliance with legal
provisions embodied in the annual appropriated budget approved by the
City Council. Activities of the General Fund, Special Revenue Funds,
and certain Debt Service Funds are included in the annual appropriated
budget. Project-length financial plans are adopted for certain capital
project funds. The level of budgetary controls (the level at which
expenditures cannot legally exceed the appropriated amount) is maintained at the department
level by major expenditure category through an encumbrance system prior to the release of
purchase orders to vendors. Purchase orders that result in an overrun of department-level
balances by object are not released until additional appropriations are made available. A budget is
in balance when the amount of budgeted expenditures is equal to the amount of budgeted
revenues plus other available resources.
Fund Structure
The City, like other state and local governments, uses fund accounting to ensure that various
revenue sources are used for the purpose for which they were intended. The budget document is
organized to reflect this fund structure of the City’s finances. Fund
revenues and expenditures are rolled up to the various object levels by
division and department for presentation of information to the public.
Budget adoption and subsequent administration is carried out on a fund
basis.
A five-year capital budget is required from all
departments who work on capital projects. The
purpose is to give the Mayor and Council a tool
to plan for the future, as well as to more
realistically reflect the timing of many capital
projects that take more than one year to
complete. All capital budgets are built in
compliance with the City’s decision to use project costing to track the cost
of doing business and associated revenues in either more detail, or in
different categories than what a General Ledger-only accounting system
would provide. Project Costing uses structural elements that focus on
activities including project types, activity types, and resource types. Project
costing is available to track cost and revenue detail by Business Unit defined
activities and categories, and augments and expands General Ledger information; however it does
not replace it. Appropriation controls remain at the fund/organization level. The information
provided by Project Costing is intended as a management tool to provide more timely, detailed,
and accurate information to the Mayor, City Manager, Council, and the public.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXVIII
Budget Administration
The City’s Budget establishes appropriations and expenditure levels. Expenditures may be below
budgeted amounts at year end, due to unanticipated savings realized
from Department operations. The existence of a particular
appropriation in the budget does not automatically mean funds are
expended. Due to the time span between preparing the budget,
subsequent adoption by the governing body, as well as rapidly
changing economic factors, all expenditures are reviewed prior to any
disbursement. These expenditure review procedures assure
compliance with City requirements, and provide some degree of
flexibility for modifying programs to meet the changing needs and
priorities of the public. Therefore, Fresno City’s Fiscal Year 2012
budget is a forward-looking policy document which reflects a snapshot
in time of the City’s strategies to best serve the public.
Amending the Budget
The Annual Appropriation Resolution (AAR) adopted each year by Council is the legal document
that establishes spending authority to each City Department within funds. During the fiscal year,
numerous circumstances arise which make adjusting the adopted budget desirable or necessary.
This can arise when the Mayor or Council establishes new policy or revises an old one, when a
new source of funding for a project is obtained, when a department finds a need for something not
included in the adopted budget, or some other event is planned for. In general, an AAR
amendment is required when an appropriation in any line of the AAR needs to be changed.
Council approval (five affirmative votes) is required for the following proposed amendments to the
AAR: 1) Transfer of an appropriation from one fund to another fund; 2) Increases or decreases in
appropriations within a Department; or 3) Any new appropriation.
Certain year-end encumbrances that fulfill a spending commitment are carried forward and
become part of the following year’s budget. Open encumbrances at June 30, 2011, are reported as
reservations of fund balances.
Pension Trust Fund Operations
The City maintains two retirement systems for its employees. One covers all firefighters and police
officers (Fire and Police System), while the other covers all remaining
permanent employees (Employees’ System). The systems are single-
employer defined benefit pension plans administered by the City of Fresno
Retirement Boards. The net increase in net assets for the Fire and Police
System for Fiscal Year 2011 was $190.6 million or 20.74% (from $918.6
million to $1,109.2 million) as compared to an increase of $85.9 million or
10.32% (from $832.7 million to $918.6 million) in 2010. The net increase
in assets for the Employees’ System was approximately $157.8 million or
19.57% (from $806.6 million to $964.4 million) in 2011, as compared to an
increase of $70.9 million or 9.65% (from $735.6 million to $806.6 million) in
Fiscal Year 2010. These increases in both fiscal years 2010 and 2011
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXIX
were the result primarily from the gradual market recoveries in the performance of the depressed
investment markets.
For CAFR purposes, the actuarial assumptions used to compute contribution requirements and to
determine funding status are always based upon the prior year’s valuation, which for the Fiscal
Year 2011 is the actuarial valuation performed as of June 30, 2010. As of June 30, 2010, the
funded ratio for the Police and Fire System was 110.8% and for the Employees’ System it was
122.5%. Plan Trustees have also requested a preliminary evaluation as of June 30, 2011. This
evaluation estimates that the plans as of June 30, 2011 are 111.4% funded for the Police and Fire
System and 116.8% funded for the Employees’ System.
Contributions to the Employee Retirement System aggregating $13,489,788 ($8,214,569 employer
contributions and $5,275,219 employee contributions) were made in Fiscal Year 2011, based on
an actuarial valuation determined as of June 30, 2009, which
became effective for the year ended June 30, 2010. During
Fiscal Year 2011, the Employer contribution rate was set at
11.09%; however, a cash contribution of only $8,214,569 was
required from the City due to the use of a prefunded actuarial
accrued liability of the System. Employer and System member
contributions represented 6.89% and 4.42%, respectively of the
Fiscal Year 2011 covered payroll.
Contributions aggregating $3,684,570 for First Tier Police and
Fire ($3,457,053 net employer and $227,517 employee) were
made in Fiscal Year 2011, based on an actuarial valuation determined as of June 30, 2009, which
became effective for the year ended June 30, 2011. For the Fiscal Year 2011, the employer
contribution rate was set at 26.43%; however a cash contribution of only $3,457,053 was required
from the City due to the use of a prefunded actuarial liability of the System. Employer and
employee contributions represented 20.05% and 4.87% respectively, of the Fiscal Year 2011
covered payroll.
Contributions aggregating $23,016,644 for Second Tier Police and Fire ($15,940,125 net employer
and $7,076,519 employee) were made in Fiscal Year 2011, based on an actuarial valuation
determined as of June 30, 2009, which became effective for the year ended June 30, 2011. The
employer contribution rate was set at 18.6%; however, due to a contribution shortfall from the prior
year and additional $1,149,917 was required from the City. Employer and employee contributions
represented 20.04% and 9%, respectively, of the Fiscal Year 2011 covered payroll.
Pension Funding Status
The following page provides a graphic illustration of the City of Fresno’s pension funding status for
the City’s Fire and Police Retirement System and the Employees Retirement System.
Pension Funding Status
•City maintains two retirement systems for its
employees which are administered by the City of
Fresno Retirement Boards
–Fire & Police Retirement System (“FPRS”)
has 2,063 members (2 tiers)
–Employees Retirement System has 3,811
members
•City issued POBs in 1993-94, which were
restructured in 2002
–City cash contribution of $3,457,053 and use
of $15,889,805 from prefunded actuarial
liability for the Fire & Police Retirement
System
–City cash contribution of $8,214,569 and use
of $5,011,389 from prefunded actuarial
accrued liability for the Employees
Retirement System
•City levies taxes in the amount of $0.032438 per
$100 of assessed valuation to fund pension
obligations
–Tax override validated in 1983 & meets
requirement of Huntington Beach decision
City’s Pension Systems are Well-Funded Financial Operations
Fire and Police Retirement System Employees Retirement System
Actuarial Valuation
Date
Actuarial Value of
Assets
(a)
Actuarial Accrued
Liability
Entry Age (b)
(Prefunded) Unfunded
AAL
(b–a)
Funded Ratio
(a/b)
6/30/2003 749,505 617,879 (131,626)121.3
6/30/2004 793,059 642,194 (150,865)123.5
6/30/2005 846,718 670,101 (176,617)126.4
6/30/2006 906,223 722,722 (183,501)125.4
6/30/2007 1,000,961 773,236 (227,725)129.5
6/30/2008 1,066,778 830,036 (236,742)128.5
6/30/2009 1,045,774 874,355 (171,419)119.6
6/30/2010 1,018,605 919,286 (99,319)110.8
6/30/2011 1,022,996 917,941 (105,055)111.4
Actuarial Valuation
Date
Actuarial Value of
Assets
(a)
Actuarial Accrued
Liability
(b)
Unfunded
(Prefunded)
(b–a)
Funded Ratio
(a/b)
6/30/2003 698,885 545,687 (153,198)128.1
6/30/2004 741,766 554,366 (187,400)133.8
6/30/2005 790,858 565,550 (225,308)139.8
6/30/2006 847,516 613,913 (233,603)138.1
6/30/2007 926,525 631,913 (295,220)146.8
6/30/2008 980,961 689,883 (291,128)142.2
6/30/2009 958,032 715,250 (242,782)133.9
6/30/2010 926,370 756,258 (170,112)122.5
6/30/2011 920,217 788,110 (132,107)116.8
___________________________
Source: Actuarial Valuation Reports dated June 30, 2011 prepared by The Segal Company.
Systems’ Funding History
___________________________
*(Pension System Assets minus POBs)
*For CAFR purposes, the actuarial assumption used to compute contribution requirements and to determine funding status are based upon the prior
year’s valuation (2010). The table above includes the most current evaluation (2011), which has not yet been formally adopted by the City, and is
presented for management comparative purposes only.
*
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2010
Pension Funding Status
City’s Pension Systems are Well-Funded Financial Operations
$82.89
$139.85
$207.18 $226.12
$335.96 $345.09
$235.85
$95.77
$68.46
2003 2004 2005 2006 2007 2008 2009 2010 2011
0
50
100
150
200
250
300
350
400
450
500
550
600
Combined Surplus ERS UAAL Surplus FPRS UAAL Surplus Net Surplus*
XXX
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXI
Cash Management
The City’s pooled temporary idle funds and deposits are invested pursuant to the City’s Investment
Policy (the Policy) and the California Government Code (GC) by the
City Treasurer. The Policy seeks the preservation of capital, safety,
liquidity and yield, in that order of priority. The Policy addresses
soundness of financial institutions holding our assets and the types
of investments permitted by the GC. The City seeks to minimize
credit and market risk while maintaining a competitive yield on its
portfolio. Accordingly, the Policy permits investments in certificates
of deposit, obligations of the U.S. Treasury and U.S. Government
sponsored corporations and agencies, commercial paper, corporate
bonds, medium-term notes, bankers acceptances, repurchase and
reverse repurchase agreements, mutual funds invested in U.S.
Government and Treasury obligations, and the State Treasurer’s Investment Pool. The earned
yield for fiscal year 2011 was 1.29% as compared to fiscal year 2010 which was 1.71%.
The City invests in no derivatives other than structured (step-up)
notes, which guarantee coupon payments. These are minimal
risk instruments. All investments are held by a third-party
custodian in the City’s name.
With regard to investment style, the City employs a semi-active
strategy in managing the portfolio. First, all prospective
investments are reviewed from the standpoint of the risk of loss
of principal. Once safety concerns have been addressed, all
investments are purchased with the intention of holding them until
maturity. They are purchased at a point in time and with a particular maturity date judged to be the
most advantageous in terms of meeting the City’s liquidity needs and maximizing the return on the
portfolio.
However, as time passes and market conditions change, opportunities often arise in which funds
can be repositioned into other assets offering even greater advantages to the portfolio. In these
circumstances, one investment may be sold or swapped for another. Occasionally this may result
in a capital gain from the sale and at other times it may result in a loss. In
most cases however, the gains or losses combined with returns from the
newly acquired investment, result in a net added return to the portfolio. The
Pension Trust Retirement System and the Redevelopment Agency
deposits and investments are maintained outside the City Treasury and
follow policies established by their respective governing boards.
The City has adopted a comprehensive Investment Policy which
encompasses and incorporates deposit and investment polices meant to
minimize credit risk, concentration risk, interest rate risk, and foreign
currency risk in compliance with GASB No. 40, Deposit and Investment
Risk Disclosures.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXII
Risk Management
With certain exceptions, it is the policy of the City to use a combination
of self-insurance and purchased commercial insurance against
property or liability risks. The City believes it is more economically able
to manage its risks internally and set aside funds as needed for
estimated current claim settlements and unfavorable judgments
through annual appropriations and supplemental appropriations. The
City maintains limited coverage for certain risks that cannot be
eliminated. At this time, the City is engaged in an Owner-Controlled
Insurance Program covering the wastewater treatment expansion. The
Risk Management Division investigates and manages all liability claims
and property losses, evaluates risk exposure and insurance needs,
protects against contractual loss by reviewing and preparing insurance
and indemnification portions of construction contracts, leases and
agreements, emphasizes ongoing operational loss control, and purchases all insurance coverage
for the City.
The City maintains general liability insurance with limits of liability of $25 million. There is $3.0
million of self-insurance retention (SIR). The City also maintains
Airport Owners and Operators’ General Liability Insurance and
Aviation (Aircraft Liability) insurance, with limits of liability of $60
million and $25 million per occurrence, respectively. There is no
deductible or self-insured retention.
Furthermore, the City maintains property insurance and boiler and
machinery insurance, with total insured values of $1,397,312,235
and limits of liability of $1 billion and $100 million per occurrence,
respectively. There is a $100,000 deductible. Property insurance
does not cover losses due to seismic events. Finally, the City
maintains Aviation (Aircraft Hull) insurance for its two helicopters and one airplane, with limits of
liability of $1.5 million for each helicopter and $180,500 for the
airplane. There is a rotors in-motion deductible of 2% of insured
value for each claim, subject to a minimum of $7,500 and a $500
deductible for rotors not-in-motion for each helicopter. There are
no physical damage deductibles for the airplane.
The City’s Workers Compensation Program consists of $2 million
self-insured retention with purchased excess insurance layers up
to the statutory limits.
Settled claims have not exceeded commercial insurance
coverage in any of the last three fiscal years.
The claims and workers’ compensation liabilities reported on the balance sheet have been
actuarially determined and include an estimate of incurred but not reported losses.
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXIII
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and
Canada (GFOA) awarded a Certificate of Achievement for Excellence
in Financial Reporting to the City for its Comprehensive Annual
Financial Report (CAFR) for the Fiscal Year ended June 30, 2010. This
was the eighteenth consecutive year that the City has achieved this
prestigious national award. The Certificate of Achievement is the
highest form of recognition in the area of governmental accounting and
financial reporting. In order to be awarded a Certificate of
Achievement, the City must publish an easily readable and efficiently
organized CAFR whose contents conform to program standards. The
CAFR must satisfy both Generally Accepted Accounting Principles and
applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current
comprehensive annual report continues to meet the Certificate of Achievement Program’s
requirements and we are submitting it to the GFOA to determine its eligibility
for another certificate.
The GFOA has also presented a Distinguished Budget Presentation
Award to the City of Fresno for its annual budget for the fiscal year
beginning July 1, 2010 through June 30, 2011. This award is also valid for
a period of one year only. In order to receive this award, a governmental
unit must publish a budget document that meets program criteria as a
policy document, operations guide, financial plan, and as a
communications device. This is the eighth consecutive year that the City’s
Budget has received this award. The City of Fresno continues to prepare
its budgets in conformity to program requirements, and submitted its
budget for 2011-2012 to GFOA to determine eligibility for another award.
ACKNOWLEDGMENTS
The 2011 Comprehensive Annual Financial Statement most certainly reflects
the depth of the impacts of the national and State economic recession on the
City of Fresno. There is no doubt that Fresno like the State and the nation is
experiencing some very extraordinary times, which call for unrelenting
perseverance, stewardship and resolve. As the City continues to focus on
making the difficult and prudent decisions, we are doing so in an effort to
serve our citizens well, but also to continue to build the foundation for many
years to come. The CAFR and the Budget documents most certainly
illustrates the proactive steps being taken by the City to mitigate those
impacts and both the sacrifices and contributions being made by all City staff.
Fresno continues to monitor tax revenues, retail sales, housing and commercial real estate prices
and unemployment and vacancy rates and adjust expenditures to align with revenues being
received. These pressures on the City’s General Fund are expected to continue into Fiscal Year
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXIV
2012 and 2013. However the City and its staff will continue to position the City to maintain its
historic strength after the recession ends.
The Mayor’s Budget strategies; Contracting the Organization, Changes in Operations and Use of
the City’s Emergency Reserve, will have consequences not only in short term benefits but long-
term as well. It is adherence to our continuing prudent fiscal policies that has helped the City
maintain its service commitment to our citizens and to the programs and policies established by
the Mayor and City Council. We continue to be resolute in the financial discipline that has allowed
us to manage through these current economic challenges. This continued course of action and
the City’s managerial leadership will continue to guide us through the challenges that lie ahead.
We would like to express our appreciation to the entire staff of
the Finance Department, but especially the CAFR staff and their
families for their months of concerted team effort, and whose
professionalism, dedication and efficiency are responsible for the
preparation of this report. Thank you to: Margaret Bell, Gilbert
Elizondo, Mike Getty, Greg Wiles, Phillip Hardcastle, Kim
Jackson, Corrina Barbarite, Jane Mouanoutoua, John Simpson,
Anita Villarreal and Susan Nelson.
We would be amiss if we did not also thank the CAFR contacts in
each department, for working with us and whose invaluable contributions made the preparation of
this report possible.
We wish to also extend our sincere thanks to the staff in all City departments for their cooperative
efforts in responding to the many questions and requests for detailed information that
accompanies each annual audit. In addition, we would like to acknowledge the role of Macias Gini
& O’Connell, LLP, for their professional support in the preparation of the CAFR. Finally, we want to
thank the Mayor, the City Council members, and the City Manager for their continued leadership
and support in planning and conducting the City’s financial operations.
Respectfully submitted,
Mark Scott Karen M. Bradley, CPA
City Manager Assistant Controller
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXV
Enterprise Funds
Proprietary Fund Types
operate as if they were private
businesses. One type are
enterprise funds. These funds
provide services to other
governmental and non-
governmental entities,
including individuals and
businesses.
City of Fresno
Internal Service
Funds
Proprietary Fund Types
operate as if they were private
businesses. Another type of
Proprietary fund are the
internal service funds that
provide services to
departments within the City.
Airports
Transportation
City Manager
Information Services
Fire
Personnel Services
City Clerk
Mayor
Police
Budget & Management
Studies
Convention Center
City Attorney
PARCS
Finance
Development &
Resource
Management
City Council
General Fund
The General Fund is used to account
for unrestricted revenues. Revenues
received by the City that have no
legal or contractual restriction are
placed in the various General Funds.
Appropriations may be made from
the General Fund for any legal City
activity. Revenues such as sales tax,
property tax, and business tax are a
few examples of General Fund
revenues.
General City
Purpose
Public Utilities
City Operating Fund Structure
Special Revenue Fund
This fund type accounts for
revenue that the City receives
for a specific purpose. The City
receives a significant amount of
revenue that is restricted as to
its use. Examples of this type of
revenue would be assessment
districts, Community
Development Block Grant, and
various gas taxes.
Public Works
Retirement
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXVI
Enterprise Funds/General Fund/Internal Service Funds/Special Revenue Fund/Redevelopment Agency
City Clerk
Secretary to:
City Council
Redevelopment Agency
Records Management
Administration
City Attorney
Litigation
Legal Advisor
RDA
Administration
Bus Service
Bus Repair/Maintenance
Planning
Administration
Paratransit
Fleet Management
Acquisition & Maintenance
Transportation
(FAX)Airports
FYI Operations
Airport Projects Management
Airport Security & Safety
Chandler Downtown Airport
Administration
Managed by SMG as of
Jan. 2004
Sporting Events
Conventions
Concerts
Convention
Center
CITY COUNCIL
MAYOR
ASHLEY
SWEARENGIN
Council
Assistants
CITIZENS OF
FRESNO
Redevelopment
Agency
Executive Director
Parks, After School,
Recreation &
Community Services
After School Programs
Recreation
Community Centers
Senior Programs
Information
Services
Computer Services
Systems & Network Security
Help Desk
Systems & Applications
Programming
Communication Services
Personnel
Services
Recruitment & Exam
Job & Salary Analysis
Civil Service Board
Risk Management
Training
Labor Relations
Employee Benefits
Finance
Financial Reporting/Grants
Accounting/Treasury/Payroll
Business Tax/Permits
Purchasing
DBE Program
Central Printing
Fire
Fire Suppression & Emergency
Response
HazMat
Prevention & Investigation
Training & Support
Administration
Police
Patrol & Crime Suppression
Investigative Services
Graffiti Abatement
Special Operations
Administration
Development and
Resource
Management
Planning/Land Use Management
Building & Safety Inspection
Development Review
Sustainable Fresno
Community Revitalization
PIPES
Downtown Revitalization
Local Business Initiatives
Neighborhood Revitalization
Incentive Zone
Housing & Community Dev
HOME Program
Budget &
Management Studies
Budget Development/Monitoring
Master Fee Schedule
CDBG Monitoring &
Administration
Internal Audit
City Manager
City Departments
Support Services for Mayor and Council
Citywide Project Mgmt
Public Relations
Office of Independent Review
One Call Center
Public Works
Engineering Services
Street Maintenance
Capital Project Management
Traffic Operations Center
Parking Services
ADA Citywide Program
Traffic Signals & Streetlights
Park Maintenance
Facilities Management
Urban Growth Management
Public Utilities
Water Production, Quality &
Delivery
Solid Waste Services
Recycling Program
Operation Clean-up
Wastewater & Sewer
Management
Utility Billing & Collection
Retirement Office
Redevelopment Services Support
Intergovernmental Relations
General City Purpose
City of Fresno, California
Controller’s Transmittal Letter
For the Fiscal year Ended June 30, 2011
XXXVII
CITY OF FRESNO
DIRECTORY OF CITY OFFICIALS
Member Term Expires
MAYOR
Ashley Swearengin January 2013
COUNCIL MEMBERS
Blong Xiong, District 1 January 2015
Andreas Borgeas, District 2 January 2013
Oliver L. Baines III, District 3 January 2015
Larry Westerlund, District 4 January 2013
Sal Quintero, District 5 January 2015
Lee Brand, District 6 January 2013
Clint Oliver, District 7 January 2015
CITY OFFICIALS
Mark Scott, City Manager
James C. Sanchez, City Attorney
Rebecca E. Klisch, City Clerk (Retired 2012)
Karen M. Bradley, CPA, Assistant Finance Director/City Controller
Elected officials as of June 30, 2011.
This page intentionally left blank.
This page intentionally left blank.
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Financial Section
Financial Section
The Honorable City Council
of the City of Fresno, California
Independent Auditor’s Report
We have audited the accompanying financial statements of the governmental activities, the business-type
activities, the discretely presented component unit, each major fund, and the aggregate remaining fund
information of City of Fresno, California (City), as of and for the year ended June 30, 2011, which
collectively comprise the City’ basic financial statements as listed in the table of contents. These financial
statements are the responsibility of City’s management. Our responsibility is to express opinions on these
financial statements based on our audit. We did not audit the financial statements of the discretely
presented component unit and Redevelopment Agency Debt Service Fund, a major fund. Also, we did not
audit the financial statement of the Redevelopment Agency Capital Projects Fund, a nonmajor fund, and
the City of Fresno Employees Retirement System and the City of Fresno Fire and Police Retirement
System pension trust funds, which represent the following percentages of assets, net assets/fund balances
and revenues as of and for the year ended June 30, 2011.
Opinion Unit Assets
Net assets/fund
balances Revenues
Governmental Activities 5.4% 7.9% 6.0%
Discretely Presented Component Unit 100% 100% 100%
Aggregate Remaining Fund Information 93.0% 98.% 68.1%
Those financial statements were audited by other auditors, whose reports thereon have been furnished to
us, and our opinion, insofar as it relates to the amounts included for those entities, is based on the other
auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes consideration of internal
control over financial reporting as a basis for designing auditing procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City of
Fresno’s internal control over financial reporting. Accordingly, we express no such opinion. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presentation. We believe that our
audit and the reports of other auditors provide a reasonable basis for our opinions.
In our opinion, based on our audit and the reports of other auditors, the financial statements referred to
above present fairly, in all material respects, the respective financial position of the governmental
activities, the business-type activities, the discretely presented component unit, each major fund, and the
aggregate remaining fund information of the City of Fresno, California, as of June 30, 2011, and the
respective changes in financial position and, where applicable, cash flows thereof for the year then ended
in conformity with accounting principles generally accepted in the United States of America..
As discussed in Note 2 to the financial statements, the City adopted the provisions of Governmental
Accounting Standards Boards (GASB) statement No. 54, Fund Balance Reporting and Governmental Fund
Type Definitions.
As discussed in Note 8 to the financial statements, on June 29, 2011, the California State Legislature
enacted legislation that is intended to provide for the dissolution of redevelopment agencies in the State of
California (Assembly Bill 1X 26) unless certain payments can be made to the State of California
(Assembly Bill 1X 27). On December 29, 2011, the California Supreme Court (Court) largely upheld the
legislation for the dissolution of redevelopment agencies. Furthermore, the Court invalidated Assembly
Bill 1X 27. Accordingly, the Agency dissolved on January 31, 2012 under the guidelines for dissolution
set forth in the legislation. Except for establishing an allowance for doubtful accounts for advances owed
by the Agency to the City as discussed in Note 8, the financial statements do not include any adjustments
as a result of the dissolution of the Agency.
In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2012,
on our consideration of the City’s internal control over financial reporting and on our tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.
The purpose of that report is to describe the scope of our testing of internal control over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control
over financial reporting or on compliance. That report is an integral part of an audit performed in
accordance with Government Auditing Standards and should be considered in assessing the results of our
audit.
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and other required supplementary information identified in the accompanying
table of contents be presented to supplement the basic financial statements. Such information, although
not a part of the basic financial statements, is required by the Governmental Accounting Standards Board,
who considers it to be an essential part of financial reporting for placing the basic financial statements in
an appropriate operational, economic, or historical context. We and other auditors have applied certain
limited procedures to the required supplementary information in accordance with auditing standards
generally accepted in the United States of America, which consisted of inquiries of management about the
methods of preparing the information and comparing the information for consistency with management’s
responses to our inquiries, the basic financial statements, and other knowledge we obtained during our
audit of the basic financial statements. We do not express an opinion or provide any assurance on the
information, because the limited procedures do not provide us with sufficient evidence to express an
opinion or provide any assurance.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively
comprise the City’s financial statements as a whole. The introductory section, combining and individual
nonmajor fund financial statements, budgetary comparison schedules, and statistical section, are presented
for purposes of additional analysis and are not a required part of the financial statements. The combining
and individual nonmajor fund financial statements and budgetary comparison schedules are the
responsibility of management and were derived from, and relate directly to, the underlying accounting
and other records used to prepare the financial statements. The information has been subjected to the
auditing procedures applied by us and the other auditors in the audit of the financial statements and
certain additional procedures, including comparing and reconciling such information directly to the
underlying accounting and other records used to prepare the financial statements or to the financial
statements themselves, and other additional procedures in accordance with auditing standards generally
accepted in the United States of America. In our opinion, based on our audit and the reports of other
auditors, the information is fairly stated in all material respects in relation to the financial statements as a
whole. The introductory and statistical sections have not been subjected to the auditing procedures
applied and the other auditors in the audit of the basic financial statements and, accordingly, we do not
express an opinion or provide any assurance on them.
Newport Beach, California
March 30, 2012
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Management’s Discussion
and Analysis
Management’s Discussion and Analysis
MANAGEMENT’S DISCUSSION
AND ANALYSIS
For the Fiscal Year Ended June 30, 2011
CITY OF FRESNO, CALIFORNIA
This section of the City of Fresno’s
Comprehensive Annual Financial Report offers readers a narrative
overview and analysis of the financial activities of the City for the fiscal
year ended June 30, 2011. Readers are encouraged to consider the
information presented here, in conjunction with the City’s financial
statements, which follow this section, and the additional information that is
furnished in our letter of transmittal at the front of this report. This
discussion and analysis provides comparisons primarily for the previous
two years, but in some instances may include more extensive
comparisons.
FINANCIAL HIGHLIGHTS
In February 2009, the Government Accounting Standards Board issued GASB Statement No.
54 - Fund Balance Reporting and Governmental Fund Type Definitions. The objective of the
Statement was to enhance the usefulness of fund balance information by providing clearer fund
balance classifications that could be more consistently applied and by clarifying the existing
governmental fund type definitions. The Statement established fund balance classifications that
comprise a hierarchy based primarily on the extent to which a government is bound to observe
constraints imposed upon the use of the resources reported in governmental funds.
The initial distinction that is made in reporting fund balance information is to identify amounts that
are considered nonspendable, such as fund balances associated with inventories. The
Statement also provides for additional classifications as restricted, committed, assigned and
unassigned based on the relative strength of the constraints that control how specific amounts
can be spent.
The requirements of GASB 54 were effective for the City of Fresno’s financial statements
beginning with Fiscal Year 2011; however the provisions of the Statement were applied
retroactively to Fiscal Year 2010 to enable consistency for comparison purposes within the
Management Discussion and Analysis.
The assets of the City of Fresno exceeded its liabilities
at the close of the most recent fiscal year by $1,612,902,967
(reported as net assets). Of this amount, $1,537,304,254 relates
to the City’s investment in capital assets net of related debt and
$138,021,194 represents restricted net assets. This is offset by
a deficit of ($62,422,481) in unrestricted net assets which
represents a shortfall with respect to meeting the government’s
4
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
ongoing obligations to its citizens and creditors. The total net assets include all major
infrastructure networks.
As of June 30, 2011 and 2010 respectively, the City’s governmental funds reported combined
ending fund balances of $178,972,489 and $177,491,759. Of these amounts for each
respective year, $16,828,650 and $31,820,595 were nonspendable, $143,214,365 and
$165,678,582 were restricted, $1,443,686 and $10,585,846 were committed, and
$31,822,421 and $33,216,363 were assigned. The committed funds represent amounts that
can be used only for specific purposes determined by a formal action of the government’s
highest level of decision-making authority – the Fresno City Council. In prior years this
amount was referred to as the Emergency Reserve or Reserve for Economic Uncertainty. A
deficit of ($14,336,633) and ($63,809,627) as of June 30, 2011 and 2010, respectively, made
up the balance in the unassigned fund balance.
The Redevelopment Agency reflected a restricted fund balance
of $6,646,514 in 2011 as compared to $2,594,927 in 2010 and
an assigned fund balance deficit of ($48,476,824) in 2010
which made up approximately (75.9% of the shortfall at the end
of Fiscal Year 2010. When the Redevelopment Agency
unassigned is removed from the governmental funds, the
reported unassigned fund balance is a negative ($15,332,803)
in 2010.
At the close of the 2002 fiscal year, the City took advantage of
historically low interest rates to refinance the City’s Pension
Obligation Bonds. This action resulted in available resources
to establish a $10 million set aside which was designated to be used for
purposes of meeting unforeseen budgetary requirements of the City
as defined by the City Manager, and Mayor with approval by a vote
of the City Council. The Reserve for Economic Uncertainty, as it was
called, by June 30, 2003 had grown to $10,172,256. Council then
earmarked $1.5 million of the reserve for specific economic
development opportunities in the 2004 fiscal year. On January 27,
2004, Council took action to execute the Mayor’s executive order to
establish and maintain a five percent “General Fund Emergency
Reserve” providing some protection from State grabs, which at the
time, were certain to rob California’s local governments. The
Emergency Reserve as it is referred to, can only be used based upon
the declaration of a fiscal emergency declared by the Mayor and
ratified by the Council. A fiscal emergency is defined as:
Natural catastrophe
Public Safety emergency precipitated by such events as riots or terrorism
Precipitous decline in General Fund revenues
5
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
To implement this directive, a reserve amount is determined based on 5% of the Adopted
General Fund appropriations at the beginning of each fiscal year. Additional
funds are added to the fund as necessary to ensure that the reserve is
equal or greater than 5% of the Adopted General Fund appropriations. At
June 30, 2009, the General Fund Emergency Reserve totaled
$16,851,097.
In early May 2010, due to declining revenues in the General Fund, the
Mayor declared a fiscal emergency for the City and released her proposed
fiscal year 2011 budget. Her budget offered a three-pronged approach to
address what had become a $30.6 million revenue shortfall due to the
depressed economy. The emergency declaration was necessary to allow
the City to use its emergency reserves to meet the budgetary challenges
by paying for one-time expenses related to staff budget cuts.
The 2011 budget focused on three major strategies to address the shortfall.
Contracting the ongoing operations of the organization through departmental cuts.
Implementing changes in the way the City does business, including outsourcing and
franchising some City services and significant streamlining of land use management.
Using approximately $6.5 million from the City’s emergency reserves to pay for one-time
costs related to contracting the organization.The Mayor’s budget included a plan to use a
portion of the Emergency Reserves to fund the Employee Retirement Incentive (ERI)
program, employee leave payouts, and unemployment costs related to the contraction of the
organization. Twenty-nine employees chose to participate in the ERI program. The one-time
costs at that time were expected to create nearly $2.1 million in ongoing operational savings
in the future.
At the end of June 2010, the Emergency Reserve stood at $10,585,846 as a result of the use of
the reserves to cover the one-time costs.
As work began on the 2012 Budget in early 2011, economic conditions continued to deteriorate
and the City faced the inevitable fact that the City had severe structural financial weaknesses
requiring immediate attention, prioritization and strategic direction. With too much reliance on the
City’s eroding General Fund base, more in-depth consideration was needed regarding the overall
financial health of the City beyond the General Fund in resource
allocation decisions. As revenues have declined, debt and employee
compensation obligations have not, but rather remained constant or in
fact have even grown.
The City of Fresno had gradually allowed a variety of funds to “go
negative” anticipating that at some point the funds would be able to
make reimbursements. By Fiscal Year 2011, excluding timing
differences, the sum of negative fund balances on a budgetary basis
had grown to approximately $36 million of which $13.0 million related
to the Parking Fund alone.
6
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Fund
FY 2011 Budget
Beginning
Balance
FY 2011 Actual
Funding
Progress
FY 2012 Budget
Funding
Assistance
Shaw-Marks Interchange ($1,624,136) $0 $1,187,135
FATRA (FYI Environmental &
Development Funding
($7,267,130) $2,225,413 $1,350,000
Convention Center Operations ($839,242) $608,404 $184,800
Conference Center/Selland
Expansion
($567,979) $475,993 $91,000
Zoo Enterprise Fund ($1,174,715) $588,936 $587,015
HOME Fund ($3,829,524) $631,424 $779,935
Parking Fund ($13,821,600) ($380,291) $22,800
In less austere times, the City typically tapped into a number of other reserve or contingency
funds that would tide the budget over until the economy improved. However, there are almost no
transferable balances remaining in funds that normally would be available (such as Vehicle
Replacement or Risk/Liability Funds which often hold unrestricted funds contributed to them by
the General Fund) as these have been used over the last several years.
The General Fund unassigned fund balance, had a deficit ($2,227,677) or (1.07%) of total
General Fund expenditures of $208,439,126 at June 30, 2010 and by June 30, 2011 the
General Fund unassigned fund balance deficit stands at ($64,274) or (.033%) of total General
Fund expenditures of $191,373,696.
The City’s total Governmental long-term liabilities decreased by $3,660,074 (.65%) in 2011
and increased by $27,640,551 (5.15%) in 2010.
OVERVIEW OF FISCAL YEAR 2011 FINANCIAL STATEMENTS
This discussion and analysis are intended to serve as an
introduction to the City’s basic financial statements, which consist of
three components: (1) Government-wide financial statements, (2)
Fund financial statements and (3) Notes to the financial statements.
This report also contains other Supplementary Information in
addition to the basic financial statements.
Government-wide financial statements are designed to provide
both long-term and short-term information about the City’s overall
financial status in a manner similar to a private-sector business.
The Statement of Net Assets presents information on all assets and liabilities and reports
the difference between the two as net assets. Over time, increases or decreases in net
assets may serve as a useful indicator of whether the City’s financial position is improving
or deteriorating.
The Statement of Activities presents information showing how the net assets changed
during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing or related cash
7
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
flows. Thus, revenues and expenses are reported in this statement for some items that
will result in cash flows in future periods. Examples include revenues pertaining to
uncollected taxes and fees and expenses pertaining to earned but unused vacation and
sick leave.
Fund financial statements focus on individual parts of the City government, reporting the City’s
operations in more detail than the government-wide statements. They are used to maintain
control over resources that have been segregated for specific activities or objectives and to
ensure and demonstrate compliance with finance-related legal requirements. They can be
divided into three categories:
Governmental funds statements tell how general government services such as police, fire, and
public works were financed in the short term as well as what remains for future spending. The
focus is on near-term inflows and outflows of spendable resources, as well as on balances of
spendable resources available at the end of the fiscal year.
Proprietary fund statements offer short and long-term financial
information about the activities the City operates like businesses,
such as utility services, i.e., services charged to external or internal
customers through fees.
As previously noted, for the year ended June 30, 2011, the City
implemented Governmental Accounting Standards Board (“GASB”)
Statement No. 54, Fund Balance Reporting and Governmental
Fund Type Definitions. The fund balance classifications are
comprised of a hierarchy based primarily on the extent to which a
government is bound to observe constraints imposed upon the use of
the resources reported in governmental funds.
The initial distinction that is made is nonspendable, such as fund balance associated with
inventories. The remaining classifications are restricted, committed, assigned, and unassigned
and are based on the relative strength of the constraints that control how specific amounts can
be spent. The restricted fund balance category includes amounts that can be spent only for the
specific purposes stipulated by constitution, external resource providers, or through enabling
legislation. The committed fund balance classification includes amounts that can be used only
for the specific purposes determined by a formal action of the government’s highest level of
decision-making authority. Amounts in the assigned fund balance classification are intended to
be used by the government for specific purposes but do not meet the criteria to be classified as
restricted or committed. In governmental funds other than the general fund, assigned fund
balance represents the remaining amount that is not restricted or committed.
Unassigned fund balance is the residual classification for the government’s general fund and
includes all spendable amounts not contained in the other classifications. In other funds, the
unassigned classification should be used only to report a deficit balance resulting from
overspending for specific purposes for which amounts had been restricted, committed, or
assigned.
8
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Fiduciary fund statements provide information about the financial relationships – such as the
retirement plan for the City’s employees – in which the City acts solely as
trustee or agent for the benefit of others, to whom the resources belong.
These financial statements also include notes that explain some of the
information in the financial statements and provide more detailed data. The
Pension Plan’s Schedules of Funding Progress are included in the Notes to
the Financial Statements. In addition to these vital elements are combining
statements that provide details about non-major governmental funds, non-
major enterprise funds, internal service funds and agency funds, each of
which is presented in a column in the basic financial statements.
The following table summarizes the major features of the financial statements. The overview
section below also describes the structure and contents of each of the statements in more detail.
Government-
wide Statement
FUND FINANCIAL STATEMENTS
Governmental Proprietary Fiduciary
Scope Entire entity
(except fiduciary
funds)
The day-to-day operating activities of
the City for basic governmental services
The day-to-day
operating activities of
the City for business-
type enterprises
Instances in which the
City administers
resources on behalf of
others, such as
employee benefits
Accounting
basis and
measurement
focus
Accrual accounting
and economic
resources focus
Modified accrual accounting and current
financial resources measurement focus
Accrual accounting
and economic
resources focus
Accrual accounting
and economic
resources focus;
except agency funds
do not have
measurements focus
Type of asset
and liability
information
All assets and
liabilities, both
financial and
capital, short-term
and long-term
Current assets and liabilities that come
due during the year or soon thereafter
All assets and
liabilities, both
financial and capital,
short-term and long-
term
All assets held in a
trustee or agency
capacity for others
and all liabilities
Type of inflow
and outflow
information
All revenues and
expenses during
year, regardless of
when cash is
received or paid
Revenues for which cash is received
during the year or soon thereafter;
expenditures when goods or services
have been received and the related
liability is due and payable
All revenues and
expenses during year,
regardless of when
cash is received or
paid
All additions and
deductions during the
year, regardless of
when cash is received
or paid
9
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
ORGANIZATION OF CITY OF FRESNO COMPREHENSIVE ANNUAL FINANCIAL REPORT
Introductory INTRODUCTORY SECTION
Section
Management's Discussion and Analysis
Government-wide
Financial Fund Financial Statements
Statements
GOVERNMENTAL PROPRIETARY FIDUCIARY
Statement of Net FUNDS FUNDS FUNDS
Assets
Balance Statement of
Sheet Net Assets
Statement of
Fiduciary
Net Assets
Statement of Statement of
Financial Revenues, Revenues,CAFRSection Expenditures and Expenses and
Changes in Changes in
Fund Balances Fund Net Assets
Statement of
Statement of
Changes
Activities
in Fiduciary
Net Assets
Statement of
Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
REQUIRED SUPPLEMENTARY INFORMATION OTHER THAN MD&A
OTHER SUPPLEMENTARY INFORMATION
Statistical STATISTICAL SECTION
Section
10
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Government-Wide Statements (Reporting the City as a Whole)
The Government-Wide Statements report information about the City as a whole using accounting
methods similar to those used by private-sector companies. The Statement of Net Assets
includes all City assets and liabilities. The Statement of Activities reports all of the current year’s
revenues and expenses regardless of when the cash is received or paid. These Financial
Statements report information about the City, as a whole, and about its activities that should help
to answer the question, “Is the City, as a whole, better or worse off as a result of this year’s
activities?”
The two Government-Wide Statements report the City’s net assets and how
they have changed during the fiscal year. Over time, increases or
decreases in the City’s net assets can be one indicator of whether its
financial health is improving or deteriorating.
Both of the Government-Wide Financial Statements distinguish functions of
the City that are principally supported by taxes and inter-governmental
revenues (governmental activities) from other functions that are intended to
recover all or a significant portion of their costs through user fees and
charges (business-type activities). The governmental activities of the City
include general government, public protection, public ways and facilities, culture and recreation,
community development and redevelopment. The business-type activities of the City include two
airports, public transportation system, water, sewer, solid waste, community sanitation,
convention center, stadium, numerous parks, development department, and various parking
facilities.
The Government-Wide Financial Statements include not only the City itself (known as the
primary government), but also legally separate component units; the Redevelopment Agency of
the City of Fresno, and the Fresno Joint Powers Financing Authority. The component units have
been “blended” into the City’s financial statements because the governing boards are
substantially the same as the City or they provide services entirely or almost exclusively for the
benefit of the City even though they do not provide services directly to the City. Although legally
separate from the City, these component units are blended with the
City government because of their exercise of authority and their
financial relationships with the City.
On June 29, 2011, the Governor of the State of California signed
Assembly Bills 1X 26 and 27 as part of the State’s budget
package. Assembly Bill 1X 26 required that each California
redevelopment agency suspend nearly all activities except to
implement existing contracts, meet already-incurred obligations,
preserve its assets and prepare for the impending dissolution of
the agency. Assembly Bill 1X 27 provided a means for
redevelopment agencies to continue to exist and operate by
means of a voluntary alternative redevelopment program.
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit on July 18, 2011, on behalf of cities, counties and redevelopment agencies petitioning the
11
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
California Supreme Court (Court) to overturn Assembly Bills 1X 26 and 27 on the grounds that
these bills violated the California Constitution.
On December 29, 2011, the Court ruled that Assembly Bill 1X 26, the dissolution measure, is
largely upheld and is a proper exercise of the legislative power vested in the Legislature by the
State Constitution. A different conclusion was rendered with respect to Assembly Bill 1X 27,
which was invalidated in its entirety by the Court. Accordingly, the Redevelopment Agency is
required to dissolve in fiscal year 2011/2012 and the guidelines for dissolution are set forth in
Assembly Bill 1X 26. The resulting guidelines leave many more questions than provide answers.
The California Redevelopment Association is working to help cities and counties make sense of
the situation as drafts of cleanup legislation to address some ambiguities make their way through
the state Legislature. The City of Cerritos, along with 9 other cities, also filed a separate legal
challenge to AB1X26 in Sacramento Superior Court. This lawsuit raises constitutional claims
which were not addressed in the California State Supreme Court decision on December 29,
2011.
It is the view of the City of Fresno that the debt shown on the City’s books owed by the
Redevelopment Agency is currently due and owing, subject to the final judgment of the City of
Cerritos case and/or additional litigation based upon as applied challenges as may be brought.
The City considers it to be premature to completely write off the debt owed by the RDA to the
City of Fresno, however an allowance for doubtful accounts has been recorded in the full amount
of the debt, both principal and interest in the amount of $80.1 million.
The City believes that the recording of the allowance recognizes that it may be several years
before this volatile issue is resolved and the allowance presents a more conservative and
realistic measure of the amounts due from the RDA becoming cash in the near term.
Also presented in the Government-Wide Financial Statements is a discretely presented
component unit, the City of Fresno Cultural Arts Properties (COFCAP). COFCAP is a component
unit because it is a legally separate entity for which the City is financially accountable through the
appointment of the corporation’s board and the ability to approve the corporation’s budget. The
tax-exempt entity is however discretely presented because it does not provide services
exclusively or almost exclusively to the City of Fresno. Through its charitable purpose of owning
and managing properties, it provides ongoing services to the citizens of the community.
Financial information for this component unit is reported separately from the financial information
presented for the primary government in a separate column on the Government-Wide Financial
Statements as well as throughout the Notes to the Financial Statements.
The Government-Wide Financial Statements can be found on pages 55-57
of this report, identified as the statement of net assets and statement of
activities.
Fund Financial Statements
The Fund Financial Statements are designed to report information about
groupings of related accounts, which are used to maintain control over
resources that have been segregated for specific activities or objectives.
12
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
The City, like other state and local governments, uses fund accounting to ensure and
demonstrate compliance with finance-related legal requirements. A fund is a fiscal and
accounting entity with a self-balancing set of accounts that the City uses to keep track of specific
resources of funding and spending for a particular purpose. All of the funds of the City can be
divided into the following three categories: Governmental Funds, Proprietary Funds, and
Fiduciary Funds.
Governmental Funds: Governmental Funds are used to account for essentially the same
functions reported as governmental activities in the Government-Wide Financial Statements
(i.e., most of the City’s basic services are reported in Governmental Funds). These
statements, however, focus on (1) how cash and other financial assets can be readily
converted to available resources, and (2) the balances left at the year-end that are available
for spending. Such information may be useful in determining what financial resources are
available in the near future to finance the City’s programs.
Because the focus of Governmental Funds is narrower than that of the Government-Wide
Financial Statements, it is helpful to compare the information presented for Governmental
Funds with similar information presented for governmental activities in the Government-Wide
Financial Statements. By doing so, readers may better understand the long-term impact of
the government’s near-term financing decisions. Both, the Governmental Fund Balance
Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in the
Fund Balance provide a reconciliation to facilitate this comparison between Governmental
Funds and governmental activities. These reconciliations may be found on pages 61 and 63.
The City maintains several individual Governmental Funds
organized according to their type: general fund, special revenue,
debt service, and capital projects. Information is presented
separately in the Governmental Fund Balance Sheet and in the
Governmental Fund Statement of Revenues, Expenditures, and
Changes in Fund Balances for the General Fund, Grants Special
Revenue Fund, and Redevelopment Agency Debt Service Fund
(which are considered to be major funds). Data from the
remaining Governmental Funds are combined into a single,
aggregated presentation. Individual fund data for each of the
Non-major Governmental Funds is provided in the form of
combining statements elsewhere in this report. These Funds are
reported using modified accrual accounting, which measures cash and all other financial
assets that can readily be converted to cash.
The City adopts an annual appropriated budget. The City’s budget
reflects its priorities and tells the taxpayers and ratepayers what is being
done with their money.
Budgetary comparison schedules for fiscal year 2011, leading into fiscal
year 2012, have been provided in the required supplementary
information for the General Fund and the Grants Special Revenue Fund
can be found on pages 182-185 and demonstrate compliance with the
budget but also reflects in what areas actual results deviated from
13
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
expected budgetary estimates. Budgetary comparison schedules for the other Non-major
Governmental Funds are provided after the combining statements.
Proprietary Funds: Proprietary Funds are generally used to account for services for which
the City charges customers (either outside customers, or internal units or departments of the
City). Proprietary Funds provide the same type of information as shown in the Government-
Wide Financial Statements, only in more detail. Proprietary Funds (Enterprise and Internal
Service) utilize the same method used by the private sector businesses, or accrual
accounting. The City maintains the following two types of Proprietary Funds:
Enterprise Funds are used to report the same functions as business-type activities in
the Government-Wide Financial Statements. The City uses Enterprise Funds to
account for the operations of the Public Utilities [Water System, Sewer System,
Solid Waste Management], Fresno Area Express [Transit], Fresno International
Airport (FYI) and the Fresno Chandler Downtown Airport (FCH) [Airports], Fresno
Convention Center, Chukchansi Park Stadium [Stadium], all of which are
considered to be major Funds of the City. Community Sanitation, Parking, Parks
and Recreation and Development Services are considered to be Non-major
Enterprise Funds of the City.
Internal Service Funds are used to report activities
that provide supplies and services for certain city programs and
activities. The City uses Internal Service Funds to account for
its fleet of vehicles, management information systems, printing
and mail services, property maintenance and electronics and
communication support (General Services), self-insurance
(Risk Management) and billing, collecting, and servicing
activities for the Water, Sewer, Solid Waste and Community
Sanitation Funds (Billing and Collection) and healthcare plans
(Employees Healthcare Plan) (Retirees Healthcare Plan),
(Blue Collar Employees Healthcare Plan) and (Blue Collar
Retirees Healthcare Plan). Because Risk Management, General Services and the
healthcare plans predominantly benefit governmental rather than business-type
functions, they have been included within governmental activities in the Government-
Wide Financial Statements, whereas Billing and Collection is included in the business-
type activities in the Government-Wide Financial Statements. The Internal Service
Funds are combined into a single, aggregated presentation in the Proprietary Fund
Financial Statements. Individual Fund data for the Internal Service Funds is provided
in the form of combining statements elsewhere in this report.
Fiduciary Funds: Fiduciary funds are used to account for resources
held for the benefit of parties outside The City.
Pension Trust Funds consist of funds for Fire & Police and other
Employees. The Fire and Police Retirement System Pension
Trust Funds account for the accumulation of resources for
pension benefit payments to qualified Fire and Police retirees.
The Employee Retirement System Pension Trust Fund
14
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
accounts for the accumulation of resources for pension benefit payments to qualified
General Service retirees.
The Agency Funds consist of City Departmental and Special Purpose Funds and
account for City-related trust activity, such as payroll withholding and bid deposits. In
addition, Agency Funds include Special Assessment Funds that account for receipts
and disbursements for the debt service activity of the special assessment districts
within the City.
Since the resources of Fiduciary Funds are not available to support the City’s own programs,
they are not reflected in the Government-Wide Financial Statements. The accounting used for
Fiduciary Funds is much like that used for Proprietary Funds. The basic financial statements can
be found on pages 55-179 of this report.
Notes to the Financial Statements
The Notes to the Financial Statements provide additional information that is essential to the full
understanding of the data provided in the Government-Wide and Fund Financial Statements. The
Notes to the Financial Statements can be found on pages 78-179 of this report.
Required Supplementary Information
In addition to the basic financial statements and accompanying notes, this
report presents certain required supplementary information including
budgetary comparison statements for major governmental funds. Required
Supplementary Information and accompanying notes can be found on
pages 182-189 of this report.
Combining Statements
The combining statements referred to earlier in connection with non-major
governmental funds, non-major enterprise funds, internal service funds,
fiduciary funds and Discretely Presented Component Unit are presented immediately following
the appropriately labeled tabs. Combining and individual fund statements and schedules can be
found on pages 192-229 of this report.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
The City presents its Financial Statements under the reporting model required by the
Governmental Accounting Standards Board Statement No. 34 (GASB 34), Basic Financial
Statements – and Management’s Discussion and Analysis (MD&A) – for State and Local
Governments. The current year’s analysis compares this year’s data primarily to the prior year.
However in other instances additional year’s information is provided.
15
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Net Assets – Government-Wide / Primary Government
June 30, 2011
Governmental
Activities
Business-type
Activities
Total
Assets:
Current and Other Assets $306,891,779 $516,422,712 $823,314,491
Capital Assets:
Land and Construction in Progress Not Being
Depreciated 277,681,260 166,513,622 441,194,882
Facilities, Infrastructure and Equipment, Net of
Depreciation 676,927,471 1,018,009,185 1,694,936,656
Total Capital Assets 954,608,731 1,184,522,807 2,139,131,538
Total assets 1,261,500,510 1,700,945,519 2,962,446,029
Liabilities:
Long-term Liabilities Outstanding 560,405,995 647,540,020 1,207,946,015
Other Liabilities 32,593,439 109,003,608 141,597,047
Total Liabilities 592,999,434 756,543,628 1,349,543,062
Net Assets:
Invested in Capital Assets, Net of Related Debt 760,927,178 776,377,076 1,537,304,254
Restricted 138,021,194 - 138,021,194
Unrestricted (230,447,296) 168,024,815 (62,422,481)
Total Net Assets $668,501,076 $944,401,891 $1,612,902,967
Net Assets – Government-Wide / Primary Government
June 30, 2010
Governmental
Activities
Business-type
Activities
Total
Assets:
Current and Other Assets $309,453,703 $535,791,940 $845,245,643
Capital Assets:
Land and Construction in Progress Not Being
Depreciated 287,099,076 281,743,704 568,842,780
Facilities, Infrastructure and Equipment, Net of
Depreciation 680,116,461 864,775,994 1,544,892,455
Total Capital Assets 967,215,537 1,146,519,698 2,113,735,235
Total assets 1,276,669,240 1,682,311,638 2,958,980,878
Liabilities:
Long-term Liabilities Outstanding 564,066,069 666,247,579 1,230,313,648
Other Liabilities 45,090,426 130,662,949 175,753,375
Total Liabilities 609,156,495 796,910,528 1,406,067,023
Net Assets:
Invested in Capital Assets, Net of Related Debt 781,252,564 760,271,904 1,541,524,468
Restricted 152,271,631 - 152,271,631
Unrestricted (266,011,450) 125,129,206 (140,882,244)
Total Net Assets $667,512,745 $885,401,110 $1,552,913,855
Analysis of Net Assets
16
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
As noted earlier, net assets may serve as a useful indicator of a government’s financial position.
For the City, assets exceed liabilities by $1,612,902,967 at the close of
the current fiscal year and by $1,552,913,855 at June, 30, 2010.
This is an increase of $59,989,112 between 2010 and 2011; and
$29,667,146 between 2009 and 2010 in the City’s net assets.
The largest portion of the City’s net assets (95.3%) reflects its
investment of $1,537,304,254 in capital assets (e.g., land, buildings,
and equipment); less any related outstanding debt used to acquire
the assets at June 30, 2011. These same figures for June 30, 2010
were (99.3%) with $1,541,524,468 in capital assets, net of debt. The
City uses capital assets to provide services to citizens; consequently,
these assets are not available for future spending. Although the
City’s investment in its capital assets is reported net of related debt, it
should be noted that the resources needed to repay this debt must be
provided from other sources, since the capital assets themselves cannot be liquidated for these
liabilities.
At the end of the current fiscal year and the prior fiscal year, Fresno was
able to report positive balances in two categories of net assets for the
government as a whole; net assets invested in capital assets, net of related
debt, and restricted net assets, as well as for both categories of business-
type activities. For the governmental activities, unrestricted net assets had
a deficit of ($230,447,296) and ($266,011,450) in 2011 and 2010
respectively, related primarily to debt associated with the Pension
Obligation Bonds, the Judgment Obligation Bonds, Redevelopment Agency
bonds as well as HUD Section 108 notes OPEB and the Health
Reimbursement Account programs.
17
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Changes in Net Assets – Government-Wide / Primary Government
For the Year Ended June 30, 2011
Governmental
Activities
Business Type
Activities
Total
Revenues
Program Revenues:
Charges for Services $51,299,542 $258,376,586 $309,676,128
Operating Grants and Contributions 43,010,752 49,400,519 92,411,271
Capital Grants and Contributions 40,295,307 17,744,196 58,039,503
General Revenues:
Property Taxes 125,686,674 - 125,686,674
Business Tax 14,249,287 - 14,249,287
Sales Taxes-Shared Revenues 49,250,575 - 49,250,575
Other Local Taxes 34,261,457 - 34,261,457
Investment earnings 4,434,769 3,528,113 7,962,882
Gain on sale of capital assets 536,383 153,000 689,383
Total Revenues 363,024,746 329,202,414 692,227,160
Expenses
General Government 26,642,342 - 26,642,342
Public Protection 192,992,899 - 192,992,899
Public Ways and Facilities 68,471,429 - 68,471,429
Culture and Recreation 21,797,047 - 21,797,047
Community Development and Redevelopment 19,801,941 - 19,801,941
Interest on Long-term Debt 25,722,478 - 25,722,478
Sewer, Water and Solid Waste - 157,126,696 157,126,696
Transit - 47,250,233 47,250,233
Airports - 29,019,666 29,019,666
Fresno Convention Center - 11,636,581 11,636,581
Community Sanitation - 10,023,819 10,023,819
Parking - 5,956,437 5,956,437
Parks and Recreation - 781,968 781,968
Development Services - 11,407,594 11,407,594
Stadium - 3,606,918 3,606,918
Total Expenses 355,428,136 276,809,912 632,238,048
Increase in Net Assets Before Transfers 7,596,610 52,392,502 59,989,112
Transfers (6,608,279) 6,608,279 -
Increase (Decrease) in Net Assets 988,331 59,000,781 59,989,112
Net Assets, Beginning of Year 667,512,745 885,401,110 1,552,913,855
Net Assets, End of Year $668,501,076 $944,401,891 $1,612,902,967
18
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Changes in Net Assets – Government-Wide / Primary Government
For the Year Ended June 30, 2010
Governmental
Activities
Business Type
Activities
Total
Revenues
Program Revenues:
Charges for Services $51,473,117 $253,736,337 $305,209,454
Operating Grants and Contributions 45,265,042 40,964,022 86,229,064
Capital Grants and Contributions 64,463,907 20,859,301 85,323,208
General Revenues:
Property Taxes 126,344,897 - 126,344,897
Business Tax 14,892,714 - 14,892,714
Sales Taxes-Shared Revenues 46,998,578 - 46,998,578
Other Local Taxes 32,949,909 - 32,949,909
Investment earnings 5,999,769 5,613,510 11,613,279
Gain on sale of capital assets 146,206 9,294 155,500
Total Revenues 388,534,139 321,182,464 709,716,603
Expenses
General Government 50,381,026 - 50,381,026
Public Protection 211,585,669 - 211,585,669
Public Ways and Facilities 73,653,032 - 73,653,032
Culture and Recreation 22,805,819 - 22,805,819
Community Development and Redevelopment 21,907,759 - 21,907,759
Interest on Long-term Debt 25,356,559 - 25,356,559
Sewer, Water and Solid Waste - 150,333,613 150,333,613
Transit - 47,626,682 47,626,682
Airports - 29,348,151 29,348,151
Fresno Convention Center - 12,489,071 12,489,071
Community Sanitation - 10,099,262 10,099,262
Parking - 7,956,780 7,956,780
Parks and Recreation - 1,992,204 1,992,204
Development Services - 10,886,481 10,886,481
Stadium - 3,627,349 3,627,349
Total Expenses 405,689,864 274,359,593 680,049,457
Increase (Decrease) in Net Assets Before Transfers (17,155,725) 46,822,871 29,667,146
Transfers (4,135,210) 4,135,210 -
Increase (Decrease) in Net Assets (21,290,935) 50,958,081 29,667,146
Net Assets, Beginning of Year 688,803,680 834,443,029 1,523,246,709
Net Assets, End of Year $667,512,745 $885,401,110 $1,552,913,855
19
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Analysis of Changes in Net Assets
The City’s net assets, overall, increased by $59,989,112 during the current fiscal year. For the
fiscal year ended June 30, 2010, net assets overall increased by
$29,667,146. Although the results for 2011 was an overall increase,
the City continues to experience the negative impacts of the depressed
nature of the general economy which resulted in ongoing sluggish
Property Taxes, Sales Tax, Other local taxes (which includes Room
Tax and Franchise Taxes) and a substantial reduction in Capital Grants
and Contributions. The declining economy also impacted Business Tax
which decreased as well. Operating Grants, Capital Grants and
Contributions decreased substantially due to the wind down of the
American Recovery and Reinvestment Act (ARRA) funding, an
economic stimulus package that was enacted by the 111th United
States Congress in February 2009.
Governmental Activities
Governmental activities for the current fiscal year increased net assets by $988,331. In 2010, net
assets decreased by ($21,290,935). The continuing impacts of the depressed housing market
resulted in less property taxes in 2011 than that received in 2010 however the decline was less
severe. Consumer spending (sales tax) however increased in
2011 over 2010. Operating expenditures in 2011 decreased
as a result of substantial cuts to employee costs, including
retirement benefits due to additional layoffs and retirements in
2011. Governmental net assets increased approximately 3.0%
and in 2011 and decreased 2010. Total revenue from
governmental activities was $363,024,746 and $388,534,139
respectively for each year.
Property tax revenues in 2011 and 2010 respectively,
comprised 35% and 32% of revenue from governmental
activities, with business taxes making up 4% in both 2011 and 2010 and sales tax making
up 14% in 2011 and 12% in 2010.
Other local taxes including hotel and utility user taxes made up 5%
of total governmental revenue in 2011 and in 2010. Governmental
activities in 2011 and 2010 also included In-Lieu Sales Tax which
were 4%; in each year.
Interest and investment income made up 1% of total governmental
revenues in both 2011 and 2010.
Grant revenue from state and federal sources, consisting of
operating grants and contributions (12%), capital grants and,
contributions (11%), and charges for services (14%) made up the
balance in 2011.
20
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Grant revenue from state and federal sources, consisting of operating grants and
contributions (12%), capital grants and contributions (17%), and charges for services
(13%) made up the balance in 2010.
For the most part, increases in expenses continue to parallel increases in the cost of living in the
Fresno Area and growth in the demand for government services. One notable exception,
however, is Public Protection. Fresno spends significantly less than its peer cities in most
functions with the exception of Police, an area where the City of Fresno spends significantly
more.
In 2011, Public Protection (police and fire) made up (54%) of the expenditures for governmental
activities. The balance consists of Public Ways and Facilities (19%); Human Welfare,
Neighborhood Development, and Redevelopment (6%); Culture and Recreation (6%); General
Government consisting of the City Clerk’s Office, the Mayor, City Council Offices, and the City
Manager’s Office (8%); with Interest on long-term debt at (7%).
In 2010, Public Protection (police and fire) made up (52%) of the expenditures for governmental
activities. The balance consists of Public Ways and Facilities (18%); Human Welfare,
Neighborhood Development, and Redevelopment (5%); Culture and Recreation (6%); General
Government consisting of the City Clerk’s Office, the Mayor, City Council Offices, and the City
Manager’s Office (13%); with Interest on long-term debt at (6%).
Governmental Activities – Charts and Graphs
The charts and graphs which follow on the next few pages
illustrate the City’s governmental revenues by source, and its
expenses and revenues by function. As can be seen, Public
Protection is by far the largest function reflecting the City’s
greatest overall expenses.
21
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Charges for services
14%
Operating grants and
contributions
12%
Capital grants and
contributions
11%
Business taxes
4%
Sales tax
14%
In-lieu sales tax
4%
Revenue restricted for
infrastructure
maintenance
0%
Property taxes
35%
Other local taxes
5%
Interest and investment
income 1%
Gain or loss, Restricted
revenue and Other
0%
Revenues by Source - Governmental Activities - 2011
Charges for services
13%
Operating grants and
contributions
12%
Capital grants and
contributions
17%
Business taxes
4% Sales tax
12%
In-lieu sales tax
4%
Revenue restricted for
infrastructure
maintenance
0%
Property taxes
32%
Other local taxes
5%
Interest and investment
income 1%
Gain or loss, Restricted
revenue and Other
0%
Revenues by Source - Governmental Activities - 2010
22
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Public protection
54%
Public ways and facilities
19%
Community development
and redevelopment
6%
Culture and recreation
6%
General Government
8%
Interest and Long-term
debt
7%
Expenses By Type - Governmental Activities 2011
Public protection
52% Public ways and facilities
18%
Community development
and redevelopment
5%
Culture and
recreation
6%
General Government
13%
Interest and Long-term
debt
6%
Expenses By Type - Governmental Activities 2010
23
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Public Protection Public Ways and
Facilities
Community
Development and
Redevelopment
Culture and
Recreation
General
Government
Interest on Long-
term Debt
Program Revenues and Expenses - Government Activities - 2011
Program Revenues Expenses
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Public Protection Public Ways and
Facilities
Community
Development and
Redevelopment
Culture and
Recreation
General
Government
Interest on Long-
term Debt
Program Revenues Expenses
Program Revenues and Expenses - Government Activities - 2010
24
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Business-Type Activities
Business-type activities increased the City’s net assets in 2011 by $59,000,781 and increased
net assets by $50,958,081 in 2010. Key factors related to these changes are as follows:
Public Utilities
Public Utilities, consisting of Water, Sewer, Solid Waste and
Community Sanitation is the second largest department in the City.
During fiscal years 2011 and 2010, respectively, net assets increased
by $52,348,746, and $55,784,316, for Water, Sewer, Solid Waste
Management and Community Sanitation, primarily due to its
continuing leadership role in the State in providing cost-effective
services.
More than 48 billion gallons of water were delivered in 2011
through approximately 1,700 miles of water mains that met mandated
State and Federal drinking water standards. This consisted of 45
billion gallons of groundwater pumped
from over 260 wells and 6.4 billion
gallons from the Surface Water Treatment Facility (SWTF).
Future water supply is assured through the purchase and
recharge of surface water entitlements from the U.S. Bureau of
Reclamation (USBR) at Friant Dam, the Fresno Irrigation District
from the Kings River, and an active conservation program. The
Division remains committed to extensive planning, outstanding,
innovative use of technology and keeping water rates the lowest
in the state.
The Utilities Enterprise Funds are primarily funded through
residential (single family and multi residential), municipal, school, commercial, and industrial
service charges/user fees. On February 27, 2007, a five year
rate plan was adopted by the City Council to fund operating
and capital expenditures. The adopted rate plan was
established to offset the operating, debt service and capital
expenditures appropriated in the Operating Funds for each
Division. These rates also took into consideration the debt
service on bonds that were issued in 2010 related in part to the
water meter installation program. Other sources of revenues
include anticipated grant and low interest awards; interest
earnings; reimbursements from capital and other divisions;
charges for various facilities; and revenue transfers to fully fund
capital expenditures; and other miscellaneous expenditures.
Consistent with the approved five-year rate plan was a 3.1% increase in sewer service
charges effective September 1, 2010, to offset the operating, debt service and capital
expenditures appropriated in the Operating Fund.
25
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
A single-family residential metered rate structure was approved through the Proposition
218 process effective March 1, 2010. The conversion of residences from a flat to a metered
rate began in mid to late 2011 as the meters are brought on line to transition from flat to
volumetric billing. This process will continue through calendar year 2012. The volumetric
billing structure is anticipated to be revenue neutral; that is implying no adjustment or change in
overall rate (revenue) levels. The consumption-based rates have been designed to collect
approximately the same level of revenue currently collected by the City for the residential rate
customers.
On March 31, 2011, a 5-year rate plan was presented by the Utility Advisory Committee to
the City Council to fund operating and capital expenditures. A 15% rate increase in customer
user fees for water was proposed along with a 2.5% increase for wastewater, a 3% decrease in
the single family solid waste rate along with a 4% decrease in the commercial rate and a 10.9%
increase in the multi-family rate. As of the date of this financial statement, the plan has yet to be
adopted and implemented due to management’s concern with the proposed rate increases and
their impact on the City’s customers particularly during these difficult financial times. The
proposed rates are being revisited. Should the fee increases not be implemented, it is
anticipated that the Utility Department’s operating and capital budgets will need to be adjusted
accordingly.
Solid Waste Management
Through Fiscal year 2011, the Solid Waste Management Division
was responsible for the collection of municipal solid waste, recyclables,
and green waste from more than 116,752 residential and commercial
customers per week who produce approximately 1,075 tons of material
each collection day. Solid Waste invests in the most efficient methods,
green solutions, and innovative ways to service, dispose and manage all
collections for a cleaner Fresno.
As one of the budget balancing measures, the administration
included in its 2011 Budget, the proposal to franchise Commercial Solid
Waste. In anticipation of the franchising of the Commercial Solid
Waste Operation, the management in the division was realigned
based upon the anticipated level of oversight required for remaining
staff. Management believed that franchising the Commercial
Operation had the potential of cutting the Division’s employees by
half. Effective July 1, 2010, the position of Assistant Director was
eliminated with the incumbent being demoted to a vacant Solid
Waste Manager position. Also eliminated as of July 1, 2010 was the
Solid Waste Chief of Operations position. The FY 2011 budget was
built upon the assumption that the franchise process would be
completed in January 2011 with the City completely divesting itself
of the business of collecting the solid waste of commercial
customers in the City of Fresno. Based upon previous analysis, it
was estimated that a 10% franchise fee would generate $2 - $3 million
annually to the City’s General Fund. Operating costs for the Solid Waste commercial operation
for the second half of FY 2011 were budgeted in contingency.
26
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
On December 9, 2010 the Fresno City Council approved a resolution declaring its intention to
award franchises to two Solid Waste vendors in preparation for holding a public hearing and a
final vote to award the franchises on January 6, 2011. The City anticipated receiving $2.6
million per year for its General Fund by franchising its commercial solid waste operations,
which include about 7,900 multi-family, commercial and industrial accounts. Residential solid
waste collection to approximately 106,000 customers would not be affected by Council’s action.
Under the resolution, contractors would be required to hire, for a period of six months, as many
City commercial solid waste employees as may be needed. The franchise agreements were to
be for a 10-year term plus two extensions at the City’s sole option, each for up to five years, for
a total of 20 years. The contractors would be required to purchase the City’s existing trucks
and bins. Council was initially expected to vote on awarding the franchises at its January 6,
2011 meeting.
The vote was delayed until January 27, 2011 because newly elected Council Members needed
more time to become familiar with the issues. The ultimate plan to privatize fell on a four-to-
three vote. Subsequent to the vote, the Mayor warned that without the estimated annual
franchise fee of roughly $2.5 million per year going to the General Fund, that there would need
to be drastic layoffs throughout the City.
The Budget for 2012 once again was built upon the
assumption that the City would franchise its Commercial Solid
operations and divest itself of the business of collecting the
solid waste of its commercial customers. On June 24, 2011,
the City Council approved the franchise proposal as part of the
budget approval process. On September 8, 2011, the Council
voted to approve a resolution declaring the City’s intent to
award franchises to Allied Waste Services (Allied) and Mid
Valley Disposal (Mid Valley) in preparation for holding public
hearings on the matter and to take a final vote. The Ordinance
was passed by Council on September 29, 2011 and the vendors
assumed operations on December 5, 2011. (See also the Subsequent Events footnote.)
On June 19, 2011 the City Council approved a resolution declaring its intent to award non-
exclusive franchises for roll-off collection services within the City of Fresno. Customers will be
able to select from among several companies based upon services and rates. The City will not
regulate the rates of these companies. In exchange for the granting of the right to collect roll-
off boxes under the non-exclusive agreement, the franchised companies have agreed to pay
the City a franchise fee of 10% of their roll-off gross rate revenues. Based upon analysis made
by outside consultants hired to assist with the transition and their conversations with vendors,
the annual franchise fees to be received by the City’s General Fund as a result of the non-
exclusive agreements has been estimated to equate to approximately $500,000 per year once
fully transitioned. The franchise arrangement began in September 2011 and as of the date of
these financial statements, franchise revenues are trending below expectations.
27
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Water
The City of Fresno is legally mandated to have all customers on a metered water system.
The project was initiated in FY 2009, with construction to be completed in FY 2013. The
addition of 111,100 water meters and the associated automated meter reading (AMR) system
will have a significant impact on operations and maintenance activities of the Water Division.
This added workload began as early as July 2010, when the first single family residential meters
were being placed in the ground. As the water meters are the
revenue tracking tool of the Division, the meter system must be
adequately operated and maintained to ensure that accurate
revenues are collected based upon actual water usage. As with
the start-up of any new large and complicated system, there will
be challenging areas and special issues that must be worked
through.
After undergoing a Proposition 218 process, a residential
metered rate structure was adopted and was initiated in January
2010 to transition from a flat to volumetric billing, while minimizing
the impacts to rates and customers. The volumetric-based rates will be revenue neutral,
implying no adjustment or change in overall rate (revenue) levels. The consumption-based
rates were designed to collect approximately the same level of revenue currently collected by
the City for the residential flat rate customers.
Wastewater Management
The Wastewater Management Division is responsible for the collection, conveyance,
treatment and reclamation of approximately sixty-eight million
gallons a day of wastewater generated by the residential,
commercial, and industrial sewer customers in the Fresno-Clovis
Metropolitan area. The Division maintains a wastewater collection
system, comprised of approximately 1,500 miles of sewer piping,
serving the sanitary sewer needs of a population exceeding
500,000 residents.
The 2012 Budget for the Wastewater Division was
decreased by 1.5% or $538,800 below the Fiscal Year 2011
Amended Budget as a direct result of mid-year 2011 staffing
reductions. In addition the Division did not bring forward any new initiatives in 2012.
Transportation/(FAX)
During fiscal year 2011 net assets increased by $11,897,017 due to a significant increase
in operating grant revenues. Passenger revenues slightly decreased and operating costs
decreased by nearly $2 million. The decrease in passenger revenue may be related to the high
rate of unemployment in FAX’s general population of customers and the decrease in operating
costs were primarily in the area of employee salaries, wages and benefits, repairs and
maintenance, and supplies. In fiscal year 2010, net assets decreased by ($1,017,290), due to a
significant increase in operating costs particularly in labor, fuel and depreciations and a
28
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
significant decrease in passenger revenue. Depreciation has increased as the result of the
department continuing to update their fleet with new “Green” CNG (compressed natural gas)
vehicles, including buses so as to contribute to reductions in harmful emissions.
The Department of Transportation (FAX) provides fixed-route and para-transit demand-
response service 363 days a year throughout the City of
Fresno and in some areas of Clovis and the County of
Fresno. This is down two days from a year ago due to
service reductions at a time when key revenue is
declining. Service is no longer provided on
Thanksgiving and Christmas.
Currently FAX operates 17 fixed routes, seven days a week
using a fleet of 120 buses. The Department also provides
paratransit demand service provided by Handy Ride. Handy Ride
operates seven days per week with service levels comparable to
the fixed-route system
The Department established a Transit Rates and Services Committee to discuss,
evaluate and make recommendations on issues such as fare structure and service efficiencies.
The Committee reviewed the transit fares and the fare structure. The Committee held public
forums involving the community. The findings and recommendations were submitted to the
Mayor and City Council for review and further consideration. On December 16, 2010 Council
adopted rates slightly modified from those recommended by the Committee. The new rates went
into effect January 10, 2011. The Transit Rates and Services Committee continues to discuss,
evaluate and make recommendations on such issues as future fare structures and service
efficiencies.
In mid-year Fiscal Year 2011, a citywide reorganization led to the Department of
Transportation/FAX acquiring a sixth division. The Fleet
Management Division, including the Acquisition section fit
easily into the structure and environment of the FAX
Department. Fleet Management manages and maintains the
City’s diverse fleet of equipment which consists of
approximately 2,100 vehicles and equipment valued at
approximately $120 million.
The Department is primarily funded through the
Transportation Development ACT (TDA) allocations, Federal
Transit Administration (FTA) grants which include Congestion
Mitigation and Air Quality (CMAQ) grants, Measure C funds and passenger fares. TDA revenue
is comprised of Local Transit Funds (LTF) and State Transit Assistance/Proposition 42 (STA)
received through the State of California based on diesel tax revenue. FTA grants are used to
fund the maintenance operations of the Department. Measure C, the half cent Fresno County
sales tax revenue is used for transportation infrastructure and operations.
29
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Airports
The number of passengers utilizing Fresno Yosemite International Airport (FYI) increased
slightly from totals seen in the previous fiscal year. Passengers using FYI during Fiscal Year
2011 totaled 1,209,033, a 1.00% increase over the previous fiscal year’s total of 1,197,078
passengers. While the increase may seem small, it is impressive
considering that FYI did not have any international air service
from August 2010 (when Mexicana Airlines declared bankruptcy
and ceased service) until April 2011, when both AeroMexico
Airlines and Volaris Airlines began daily non-stop service to
Guadalajara. The two carriers have more than made up for the
passengers that were served by Mexicana. Airports
management anticipates that the passenger count will continue
to grow in Fiscal Year 2012, as the effect of having two
international carriers for an entire year will be shown in the
passenger numbers.
Revenues (excluding Passenger Facility Charges and Customer Facility Charges)
increased by $1,844,566 (or 10.17%) from Fiscal Year 2010 levels. Sources contributing to the
revenue increase included rental revenue (approximately $260,000) and parking revenue
(approximately $180,000). Passenger Facility Charges grew by $86,932 (or 3.30%), reflecting
the increased passenger count. Customer Facility Charge (CFC) revenues generated by rental
car transactions at FYI increased by $401,770 or (50.15%) from Fiscal Year 2010 amounts. A
surge in rental car revenues, particularly in the last months of Fiscal Year 2011, accounted for
the growth in CFC revenues. In order to maintain these CFC revenue gains, a request by the
department to change the CFC rate applied at FYI from $10/transaction to $4.50/day (up to a
five day maximum) was approved by the City Council on November 17, 2011 for imposition on
January 1, 2012. Airports management believes that CFC revenue generated by the new rate
will be sufficient to fully cover the Series 2007 bond payment, as the CFC was intended to do.
Expenses also rose during Fiscal Year 2011. Cost of Services and Administration
expenses combined increased by 7.05% over Fiscal Year 2010 levels. However, $1,350,000 of
the increase is tied to a onetime expense incurred in Fiscal Year
2011. Airports management anticipates that expenses will
remain flat, if not decrease slightly, in Fiscal Year 2012.
The one-time, restricted nature of the cash that was
received for the Old Hammer Field settlement substantially
improved the Airports’ restricted cash position. Restricted
cash increased $4,270,961 or (42.22%). However, that same
improvement was not seen on the unrestricted cash account.
While unrestricted cash increased substantially on a
percentage basis (764.22%), it only increased $82,888 on a
dollar basis. Unrestricted cash was used to pay down Accrued Liabilities. Airports
management believes that unrestricted cash will improve dramatically on both a percentage
and a dollar basis in Fiscal Year 2012, as the full year of revenue from both international
carriers is realized, and expenses remain flat.
30
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
As anticipated, receivables showed a dramatic decrease from Fiscal Year 2010 levels.
While Net Receivables increased by $131,086 (or, 13.20%), all other receivable categories
showed substantial decreases. Intergovernmental Receivables decreased by $1,178,943 or
(93.56%), Due From Other Funds decreased by $398,228 or (43.03%), and Grants Receivable
decreased by $1,845,378 or (94.69%). Most of these decreases were due to the receipt of
amounts owed as part of the Old Hammer Field settlement, as well as payment by the Federal
government on several capital projects. Airports management anticipates that receivables,
particularly Grants Receivable, will increase in Fiscal Year 2012, as work commences on
several new federally funded capital projects.
Airports’ unrestricted cash was used to substantially lower the Airports’ liabilities. Current
liabilities decreased $1,657,738 or (27.61%). Airports management believes that liabilities will
likely increase as costs associated with several new capital projects are incurred. The Airports
met all of its debt obligations in Fiscal Year 2011, and finished the year with a debt coverage
ratio of 1.78 times the debt payment.
Airports capitalized approximately $17.7 million of assets in Fiscal Year 2011. Three
projects made up the bulk of the capitalized assets:
- Reconstruction of FYI’s Taxiway B, one of the main taxiways on the airfield ($11.5 million)
- Remodel of the FYI terminal’s security checkpoint ($3.6 million)
- Construction of a new main taxiway at Chandler Airport ($2.6 million)
With the large amounts capitalized in Fiscal Year 2011, it is no surprise that Construction
in Progress (CIP) declined from Fiscal Year 2010 levels. CIP decreased by $15.1 million (or
76.03%), for a total CIP of $4.8 million. The largest remaining amount in CIP (about $2 million)
as of June 30, 2011 is for planning costs that will be allocated to various construction projects
as they are completed. The largest amount remaining in CIP that is associated with a
construction project is $0.9 million for the rehabilitation of the ramp around the P-3 hangar
located on the northeast side of FYI’s airfield.
As shown in the charts on the adjacent pages, the largest of
Fresno’s business-type activities, the utilities – Sewer, Solid
Waste Management and Water, followed by Transit (FAX), each
had expenses in excess of $43 million in fiscal year 2011 and $41
million in fiscal year 2010, followed by Airports with operating
expenses of approximately $26 and $23 million, respectively. For
the current fiscal year, in all but two of these did revenues exceed
expenses prior to contributions and transfers. For all business-
type activities in 2011, except Transit, fees provide the largest
share of revenues [79%] followed by operating and capital grants
and contributions [20%], which are primarily received by Transit and interest and other income
[1%]. For all business-type activities in 2010, except Transit, fees provide the largest share of
revenues [79%] followed by operating grants and capital contributions [19%], which are primarily
received by Transit and interest and other income [2%].
31
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Business - Type Activities – Charts and Graphs
The charts and graphs which follow on the next few pages
illustrate the City’s business – type/enterprise revenues by
source, and its expenses and revenues by function. As can be
seen on the following pages, Sewer, Water and Solid Waste is
by far the largest business-type activity (function) reflecting the
City’s greatest overall expenses.
32
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Charges for services
79%
Operating grants and
contributions
15%
Capital grants and
contributions
5%
Interest and
investment income
1%
Gain or loss, Restricted
revenue and Other
0%
Revenues by Source - Business Type Activities - 2011
Charges for services
79%
Operating grants and
contributions
13%
Capital grants and
contributions
6%
Interest and investment
income
2% Gain or loss, Restricted
revenue and Other
0%
Revenues by Source - Business Type Activities - 2010
33
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Airport
11%
Transit
17%
Sewer, water and solid
waste
61%
Convention Center
4%
Parking
2%
Parks and Recreation
0% Development
4%
Stadium
1%
Expenses By Type - Business-type Activities 2011
Airport
11%
Transit
17%
Sewer, water and solid
waste
58%
Convention Center
5%
Parking
3%
Parks and
Recreation
1%
Development
4%
Stadium
1%
Expenses By Type - Business-type Activities 2010
34
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Airport Transit Sewer, water
and solid
waste
Convention
Center
Parking Parks and
Recreation
Development
Services
Stadium
Program Revenues Expenses
Program Revenues and Expenses - Business Type Activities - 2011
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Airport Transit Sewer, water
and solid
waste
Convention
Center
Parking Parks and
Recreation
Development
Services
Stadium
Program Revenues Expenses
Program Revenues and Expenses - Business Type Activities - 2010
35
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with
finance-related legal requirements. The purpose of this section is to provide a summarized recap
and comparison of operating results for the City’s various fund types.
Governmental Funds
The focus of the City’s governmental funds is to provide information on near-term inflows,
outflows, and balances of resources that are available for spending.
Such information is useful in assessing the City’s financing
requirements. In particular, unassigned fund balance may
serve as a useful measure of a government’s net resources
available for spending at the end of the fiscal year. Types of
Governmental funds reported by the City include the General
Fund, Special Revenue Funds, Capital Project Funds, and
Debt Service Funds.
Overall in 2011, Governmental Revenues increased from those
of 2010. The City began seeing a slight increase in property tax
and sales tax revenues but these certainly remained subdued as
compared to growth seen several years ago. While foreclosures have declined greatly, property
values continued to slide or level off at best. It is anticipated that while the decline will end, there
is however no anticipation that renewed growth will be rapid.
Grants and Special Revenue continued to increase with the City’s proactive and aggressive
search for these dollars. In fact, the City of Fresno has been selected as one of only six cities
nationwide to participate in the “Strong Cities, Strong Communities” initiative. The Obama
Administration has provided experienced staff to live in Fresno and to work directly with local
government, the private sector and other institutions to leverage federal dollars and to support
and encourage economic growth and community development.
License and permit revenues grew in 2011 due to the City partnering with Muni Services to
aggressively pursue businesses not paying business license fees as well as those delinquent in
paying what was due. The City added renewal and payment of Business License online for
those businesses in good standing which enabled more timely payment and receipt of Business
License dollars..
The City continued to look for ways to aggressively reduce costs and did so significantly except
in the area of Public Protection. Collective bargaining agreements hampered the City’s ability to
achieve some of the budgetary reductions that it sought and as a result the City continued to
remain unable to rebuild its reserves.
The General Fund was also required to back fill the debt service on several of its Lease Revenue
Bonds when impact fees tied closely to the housing market did not materialize. As a result the
General Fund was required to make a greater contribution toward the Convention Center Bonds,
the Convention Center Parking Facility Bonds and the Stadium Bonds.
36
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
The impact of deferred maintenance is being felt throughout the City. Nearly all governments
have had to defer infrastructure and facility maintenance due to shrinking resources. The City of
Fresno is no exception. Every effort is made to invest in maintenance that offers the earliest
payback and those that have the highest Public Benefit.
At the end of the current fiscal year, the City’s governmental funds
reported combined ending fund balances of $178,972,489. A deficit
($14,336,633) of this total amount constitutes unassigned fund balance.
Of this amount, a negative ($64,274) relates to the General Fund, and a
deficit ($14,272,359) relates to Grants Special Revenue Funds. The
remainder of the fund balance is reserved or bound to observe
constraints imposed upon the use of the resources; $143,214,365 is
restricted, $1,443,686 is committed; $31,822,421 is assigned and
$16,828,650 is nonspendable. In prior years the $1,443,686 was
referred to as the emergency reserve. In accordance with GASB 54, the
governmental fund balances has all been recategorized using the new
terminology.
At the end of 2010, the City’s governmental funds reported combined ending fund balances of
$177,491,759. A deficit ($63,809,627) of this total amount constitutes
unassigned fund balance. Of this amount, a deficit ($48,476,824) is
related to the Redevelopment Agency Debt Service Fund, a negative
($2,227,677) relates to the General Fund, and a deficit ($13,105,126)
relates to Special Revenue Funds. The remainder of the fund
balance is reserved or bound to observe constraints imposed upon
the use of the resources; $165,678,582 is Restricted; $10,585,846 is
committed; $33,216,363 is assigned and $31,820,595 is
nonspendable.
Revenues for governmental functions overall totaled $344,298,752 in
the fiscal year ended June 30, 2011. Expenditures for governmental
functions totaled $336,984,251 for the same period. In the fiscal year
ended June 30, 2011, revenues for governmental functions exceeded
expenditures by $7,314,501, or more than 2.1% prior to other
funding sources. Other funding sources and uses decreased
revenue by $5,833,771 resulting in a net overall increase in fund
balance of $1,480,730. Prior to other funding sources and uses,
the General Fund provided revenues greater than expenditures in
the amount of $28,770,798, the Grants Special Revenue Fund had
excess revenues over expenditures of $4,256,226, the
Redevelopment Agency Debt Service Fund had an excess of
revenues over expenditures totaling $12,467,531 and all Other
Governmental Funds had a deficiency of revenues over
expenditures totaling ($38,180,054) before other financing
sources/uses.
37
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Revenues for governmental functions overall totaled $331,507,650 in the fiscal year ended June
30, 2010. Expenditures for governmental functions totaled $400,658,481 for the same period. In
the fiscal year ended June 30, 2010, expenses for governmental
functions exceeded revenues by ($69,150,831), or more than
21% prior to other funding sources. Other, funding sources
increased revenue by $40,402,606 resulting in additional net
resources, an overall decrease in fund balance of
($28,748,225). Prior to other funding sources, the General
Fund provided revenues greater than expenditures in the
amount of $6,282,425, the Grants Special Revenue Fund had
excess expenses over revenues of ($5,515,169), the
Redevelopment Agency Debt Service Fund had an excess of
revenues over expenditures totaling $3,477,795 before transfers
out and all Other Governmental Funds had a deficiency of revenues over expenditures totaling
($73,395,882) before other financing sources/uses.
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the
unassigned fund balance/deficit of the General Fund was ($64,274), while total fund balance was
$18,208,062. Unassigned fund balance represents (.033%) of total General Fund expenditures of
$191,373,696, while total fund balance represents 9.5% of that same amount.
At the end of fiscal year 2010, the unassigned fund balance of the General Fund was
($2,227,677), while total fund balance was $40,178,764. Unassigned fund balance represents
(1.1%) of total General Fund expenditures of $208,439,126, while total fund balance represents
19.3% of that same amount.
Proprietary Funds
The City’s proprietary funds provide the same type of information found in
the Government-Wide Financial Statements, but with greater detail.
At the end of the current fiscal year, the unrestricted net assets for Water,
Sewer, and Solid Waste were $70,650,268, $97,324,585, and
$31,356,008 respectively. The unrestricted net assets for Airports was
$8,402,016 and for Transit the amount was $2,123,224. The unrestricted
net assets (deficit) for the City’s other proprietary funds were as follows:
Parking ($16,362,014); Parks and Recreation $41,276; the Convention
Center ($1,112,732), Stadium $599,516 and Development Services with
unrestricted net assets of $40,695. Community Sanitation reflected
unrestricted net assets of $1,338,306. Parks and Recreation, the
Convention Center and Development Services were assisted in
eliminating or reducing their deficit fund balances in Fiscal Year 2011
through infusions of cash from the City’s emergency reserves.
At the end of the fiscal year 2010, the unrestricted net assets for
Water, Sewer, and Solid Waste were $69,989,420, $73,183,696, and
$24,058,008 respectively. The unrestricted net assets for Airports
were $9,620,632. Transit had an unrestricted net deficit of
($9,483,179) as did Parking, Parks and Recreation, the Convention
38
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Center and Development Services with deficits in unrestricted net assets of ($15,462,888),
($1,200,394), ($2,209,655) and ($2,892,630) respectively. The Stadium and Community
Sanitation both reflected unrestricted net assets of $343,453 and $948,413 respectively.
At the end of fiscal year June 30, 2011, Internal Service Funds, which includes General Services,
Employees Healthcare Plan and Blue Collar Employees Healthcare Plan had unrestricted net
assets of $13,711,994, $11,563,494 and $113,506. Billing and Collection and the Risk
Management Fund had deficits in unrestricted net assets of ($1,531,204) and ($80,533,738)
respectively. At June 30, 2010, Internal Service Funds, which includes Billing and Collection,
General Services, Employees Healthcare Plan and Blue Collar Employees Healthcare Plan had
unrestricted net assets of $12,991,210, $10,226,393 and $255,080. Billing and Collection and the
Risk Management Fund had deficits in unrestricted net assets of ($457,790) and ($77,751,512)
respectively.
Fiduciary Funds
The City maintains Fiduciary Funds for the assets of the Employee’s Retirement System, Special
Assessment Funds and City Department and Special Purposes monies. These are all monies or
assets held by the City in a trustee capacity or as an agent for other governmental units, private
organizations or individuals. At the end of fiscal year 2011, the net assets of the Retirement
System totaled $1,109,211,576 for Fire and Police and $964,376,504 for all others, representing
an increase of $190,565,450 and $157,805,634 in total assets since June 30, 2010, respectively.
The change is primarily related to the gradual recovery in the investment markets and the
increase in market value of the respective Retirement System’s investments.
At the end of fiscal year 2010, the net assets of the Retirement System totaled $918,646,126 for
Fire and Police and $806,570,870 for all others, representing an increase of $85,918,353 and
$70,992,066 in total assets since June 30, 2009, respectively. The change is primarily related to
the continuing collapse in the investment markets and the decrease in market value of the
respective Retirement System’s investments.
The City Departmental and Special Purpose Funds account for City-related trust activity such as
payroll withholding, bid deposits, receipts and disbursements for the debt service activity of the
special assessments districts.
Capital Assets and Debt Administration
Capital Assets
The City’s capital assets for its governmental and business type
activities as of June 30, 2011, amount to $2,139,131,538 (net of
accumulated depreciation). Capital assets include land, buildings and
improvements, machinery and equipment, park facilities, roads,
streets, traffic signals, streetlights, and bridges. The net increase in
the City’s capital assets for the current fiscal year was approximately
1.2% (a 1.3% decrease for governmental activities and a 3.3%
increase for business-type activities) as shown in the table below.
Capital assets for June 30, 2010 amounted to $2,113,735,235 net of
39
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
accumulated depreciation. The net increase, for 2010, was approximately 5.45% (a 5.9%
increase for governmental activities and a 5.1% increase for business-type activities).
Changes in Capital Assets, Net of Depreciation
Governmental Activities Business-type Activities Total
2011 2010 2011 2010 2011 2010
Land $218,536,700 $214,515,141 $52,557,605 $50,403,123 $271,094,305 $264,918,264
Buildings and Improvements 145,551,166 146,719,073 780,994,246 643,128,750 926,545,412 789,847,823
Machinery and equipment 29,053,525 31,778,726 29,673,980 33,852,188 58,727,505 65,630,914
Infrastructure 502,322,780 501,618,662 207,340,959 187,795,056 709,663,739 689,413,718
Construction in progress 59,144,560 72,583,935 113,956,017 231,340,581 173,100,577 303,924,516
Total $954,608,731 $967,215,537 1,184,522,807 1,146,519,698 $2,139,131,538 $2,113,735,235
Major capital asset events during the fiscal year ended June 30, 2011, some of which were in
progress during the fiscal year ended June 30, 2010 included the following:
Regional Training Facility/Center – Police
The Regional Training Center is a complete law enforcement training facility covering 80 acres at
the corner of Central and Hayes
on property acquired by the
Police Department from the
Waste Water Treatment
Facility. The training facility
includes classrooms, an
Emergency Vehicle Operations
Course (EVOC) which features
pursuit and urban driving
environments; a 240ft x 300ft
skid pad; a PIT Training area;
driver awareness course; six
50 yard handgun ranges; a 200
yard rifle range; computer
controlled targeting system; a 3
story Tactical Training House and various other state of the art training systems.
The facility is being used by law enforcement personnel from not only the Central Valley but
agencies from around the State. The Police Department enters into for-fee training programs
with other agencies, reducing overall operations and maintenance costs of the facility, providing
approximately half of the estimated annual $1.4 million cost. The Facility was largely completed
and opened in mid-September 2010, at a cost at that time of approximately $12.8 million, which
was funded through bonds and developer impact fees. Costs capitalized project life to date has
been $15.4 million of which $3.1 million was expended in Fiscal Year 2011. The total project is
expected to be completed in Fiscal Year 2012
40
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Fire Station Renovations – Phase II
This project is in the final phase of a multi-year fire station renovation
program. This project encompassed addressing Station renovations for
Stations 1 through 14 and other sub-projects identified in Phase I that were
unable to be completed because of funding
limitations. Priority projects include installation
of power generators and apparatus bay
exhaust systems and completion of Station 3
and 4 renovations. At June 30, 2011
approximately $7.4 million has been expended
and capitalized on Phase I of the renovation program and $1.1
million has been expended on Phase II which was 90% complete
at June 30, 2011.
RFRW Organic Upgrade
The City continues with construction on the expansion and organic upgrade to the existing 80
million gallons per day (mgd) Fresno/Clovis Regional Water Reclamation Facility (RWRF). The
upgrades will provide greater flexibility in responding to the treatment challenges specific to the
Fresno-Clovis wastewater composition. Challenges pertain to the fact that a large component of
the Fresno-Clovis wastewater is comprised of industrial effluent. This requires a treatment facility
with the capability of responding with a variety of treatment alternatives to deal with this impact.
Currently the City uses most of the treated effluent for direct
use on farmland and incidental percolation to groundwater.
The plant not only supplies reclaimed water to farmers for
irrigation, but it uses biosolids to produce fertilizer. On a typical
day, this plant treats nearly 70 million gallons of wastewater.
The project includes extensive upgrades and additions
including new aeration basins, secondary sedimentation
basins, a RAS/WAS pump station, digester complex, new
blowers, and conversion of the plant’s gravity thickener to
dissolved air flotation thickeners (DAFTs). At June 30, 2011
$152,522,025 of the upgrade construction was completed and $6,636,636 of the Laboratory
building construction was completed.
As part of the Metro Plan Update, the City is planning to provide tertiary treatment at the RWRF
and/or other satellite wastewater treatment plants to supply tertiary treated recycled water for
landscape irrigation in new growth areas and existing landscaped
areas throughout the City’s service area.
Fresno Yosemite International Airport
The rebuild of Taxiway B, is a project which is the major south
parallel at Fresno Yosemite International Airport (FYI). The taxiway
had reached the end of its useful pavement life based upon the
airport’s pavement management plan and was eligible for
41
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
reconstruction under FAA guidelines. The project also includes the installation of an emergency
efficient LED lighting systems and infrastructure for the future installation of a Surface Movement
Guidance Control System (SMGCS) which will improve aircraft movement capabilities on the
ground in low visibility conditions.
Funding for this project is provided through a combination of Federal Aviation Administrative
Airport Improvement grants, Measure C and budgeted Airport funds. At June 30, 2011, the
project was completed with approximately $11.5 million in construction costs.
The Airport also completed construction of Taxiway H at Chandler Airport for a cost of
approximately $2.6 million. Federal monies were also used to expand and remodel the security
checkpoint at FYI at a cost of approximately $2.1 million.
Various Other Projects
CIP at June 30, 2011 included other projects in various stages of completion. Several projects
however were completed and capitalized. The Parks Department has various park projects
underway including construction/improvements at Dickey Youth
Development Center and Fig Loop Park. At June 30, 2011 Dickey
Youth Center improvements were capitalized at a cost of
approximately $5.6 million and improvements at Fig Loop were
capitalized at a cost of approximately $5.7 million including the
cost of land at nearly $1.9 million. This expansion of green
spaces and recreation facilities by constructing new or
rehabilitating existing parks facilities is funded through the use of
bond proceeds which are supported by Parks Impact Fees.
Other material project costs capitalized at June 30, 2011 included
$3.5 for the widening of Herndon Avenue between Highway 99 and
Weber and the purchase of approximately 50 acres of land for $1.9 million for use as water
recharge basins. Fund financial statements record capital asset purchases as expenditures.
Additional information about the City’s capital assets can be found in Note 6, pages 116-119 to
the financial statements.
Debt Administration
At the end of the current fiscal year, the City had total long-term bond
obligations and notes and leases payable outstanding of $964.6
million. Of this amount, $171.9 million is obligation bonds, backed by
the full faith and credit of the City and $557.5 million is revenue
bonds of the City’s business enterprises. The remainder includes
lease revenue bonds and tax allocation bonds for general
governmental projects.
During fiscal year 2011, the City’s total bonded debt decreased by
approximated $30.8 million. This decrease was the result of normal
debt service payments.
42
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
The ratio of net general obligation bonded debt to taxable valuation and the amount of bonded
debt per capita are useful indicators of the City’s debt position to management, citizens and
investors. A comparison of these indicators follows:
FY2011 FY2010
General Bonded debt
FY 2009
$171,935 $177,285 $182,345
General Bonded debt per $343.79 $352.94 $367.70
Debt service tax rate per $0.61 $0.62 $0.60
Although the City’s Charter imposes a limit on the amount of general obligation bonds that the
City can have outstanding at any given time to 20% of assessed value of property in the City, the
City recognizes that debt of that magnitude cannot be supported with its current tax base and as
such is very cautious about issuing general obligation debt.
Currently, there are no general obligation bonds outstanding.
On Monday, August 1, 2011 Fitch Ratings in San Francisco,
issued a report downgrading the Fresno Joint Powers Finance
Authority lease revenue bonds from AA- to A-. The Fresno
Joint Powers Finance Authority is the debt financing arm of the
City. Fitch kept the City’s rating outlook as “Stable.” The
downgrade applies to revenue bond issues that are paid from
or backed by the City’s General Fund. It would also apply to
any General Obligation (GO) bond issues. The City however
has no current plans to issue revenue bonds or GO bond debt. A downgraded credit rating
costs a city money due to higher interest costs. Thus, it is even more critical that the
Administration and City Council make the hard decisions to adopt
realistic achievable budgets which include rebuilding the reserves,
reflecting a sustainable organization. It is also critical that the City
make steady progress in addressing the weaknesses that have
resulted in negative fund balances and depletion of fund reserves,
reducing debt loads and accelerating maintenance that has been
deferred. The Reserve Management Act that was adopted by
Council in early 2011 is the first step in illustrating the City’s
ongoing commitment to resolve the City’s financial health issues.
On October 3, 2011, Standard & Poor’s also downgraded the
City’s JPA Lease Revenue Bonds followed shortly by Moody’s on
October 19, 2011. The downgrades were as follows:
Rating Agency Prior Rating Prior Outlook New Rating New Outlook
Lease Revenue Bonds
Fitch AA- Stable A- Stable
Standard & Poor’s AA- Stable A- Negative
Moody’s A1 Stable Baa1 Negative
General Obligation (GO)
Fitch AA Stable A Stable
Standard & Poor’s AA Stable A Negative
Moody’s Aa2 Stable A2 Negative
43
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Additional discussion related to Rating Agency comments can be found in Note 17 to the
Financial Statements under Subsequent Events.
The City has other rated debt as follows:
Rating
Agency
Prior Rating Prior
Outlook
New Rating New
Outlook
Date of
Change
Airport
Fitch BBB Stable on
Credit Watch
BBB Stable 11/14/2011
Sewer
Fitch AA and AA- Stable Affirmed Stable 11/09/2010
Standard &
Poor’s
AA Stable AA+ Stable 12/28/2011
Water
Fitch AA and AA- Stable Affirmed Stable 12/30/2011
Debt Compliance
There are a number of limitations, restrictions and covenants contained in the various bond
indentures. The City believes it is in compliance with all significant limitations, restrictions, and
covenants.
Legal Debt Limit and Legal Debt Margin
Article XVI, Section 18 of the California Constitution, (the “debt limit”)
prohibits cities (including chartered cities), counties and school
districts from entering into indebtedness or liability that in any year
exceeds the income and revenue provided for such year unless the
local agency first obtains two-thirds voter approval for the obligation.
This general limitation has several important exceptions as described
below. It is important to remember that this limitation applies not
only to traditional bonds, but could apply to many forms of
indebtedness or liability, such as installment payment obligations,
long-term service or construction contracts, letter-of-credit
reimbursement agreements and other types of arrangements
commonly seen in public finance transactions.
In determining whether the arrangement under consideration might pose a problem under the
debt limit it is useful to ask the following questions:
Does the arrangement provide for payment in future fiscal years that comes out of
revenue generated in those years?
Does the arrangement call for payments by a city, County, or school district (as opposed
to other types of governmental agencies)?
44
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
If the answer to these two questions is “yes”, then the analysis should proceed to determine if
one of the exceptions to the debt limit applies. There are three major exceptions to the debt limit
that have been recognized by California courts – the Offner-Dean lease exception, the special
fund doctrine, and the “obligations imposed by law” exception.
As of June 30, 2011, the City’s debt limit (20% of valuation subject to taxation) was $5.61 billion.
This is in comparison with debt limits of $5.71 billion in 2010. The City’s legal debt margin is
equal to the City’s limit because it has no debt subject to the limitation.
Arbitrage
Under U.S. Treasury Department regulations, all governmental tax-
exempt debt issued after August 31, 1986, is subject to arbitrage
rebate requirements. The requirements stipulate, in general, that
the earnings from the investment of tax-exempt bond proceeds that
exceed related interest expenditures on the bonds must be remitted
to the Federal government on every fifth anniversary of each bond
issue. The City has evaluated each general obligation bond, and
lease revenue bond issues subject to the arbitrage rebate
requirements and has deferred credits and other liabilities in the
governmental funds. Each Enterprise Fund has performed a similar
analysis of the debt the respective enterprises have issued which is subject to arbitrage rebate
requirements. Any material arbitrage liability related to the debt of the Enterprise Funds has
been recorded as a liability in the respective Fund. In addition, the Redevelopment Agency
records any arbitrage liability in deferred credits and other
liabilities.
Special District Debt
The City is not obligated in any manner for the Special District
debt, but is acting as an agent for property owners in collecting
the assessments and forwarding the collections to the trustee
or paying agent, and initiating foreclosure proceedings, if
appropriate. Special District debt payable to bondholders was
$4,641,642 at June 30, 2011 as compared to $4,864,324 at
June 30, 2010.
Additional information on the City of Fresno’s long-term obligations can be found in Note 7,
pages 120-137 of this report.
General Fund Budgetary Highlights
The FY 2011 Budget was built with the most current information that
was available in the spring of 2010. The unpredictable nature of the
economy was carefully considered when revenue projections were
made for 2011 and 2012. Downward revenue trends in April 2011
had appeared to stabilize. The budgeted forecasts were adjusted to
consider the declines in Sales Tax revenue and the anticipated
45
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
declines in Property Tax, Business License, TOT and Motor Vehicle License Fees (MVLF).
While reasonable estimates were made, care was also taken to balance existing trends so that
core services would continue to be provided at the highest level possible given the resources
available.
The Proposed Budget estimates for June 30, 2011, assumed the budget would be balanced with
no surplus or deficit. The final budgeted amounts anticipated a surplus of $920,000. The actual
amount on the budgetary basis was a deficit of $8.6 million. The Schedule of Revenues and
Expenditures – Budget and Actual with an analysis of the variances may be found on page 48 at
the end of this document.
Sales Tax
The Amended Budget for Fiscal Year 2011 projected sales tax
revenue of $62.6 million. The amount of sales tax revenue actually
realized through June 30, 2011, was $62.8 million. This was
reflective of the cash trend through April 2011 and was consistent
with MuniServices, LLC projections.
Current economic indicators, as well as MuniServices, predict that
any sales tax rebound will continue to be slow.
Property Tax
Property Tax revenue for FY 2011 was projected to be $101.7 million. The actual amount
realized was $101.1 million. Property Tax revenues consist of
several categories of which all but one of the categories
realized revenues as generally expected or slightly better than
expected. The exception was the Secured Property Taxes
category which realized revenues at $1.9 million less than
expected due to greater than expected declines in assessed
valuations and delinquencies. The County Assessor continues
to reassess properties and further declines in assessed
valuations are expected with partial offset for new development.
It is not anticipated that the Supplemental Tax revenue will
improve in the near future.
Other Revenues
Business License and Room Tax/Transient Occupancy Tax (TOT) also did not perform as
projected. They ended Fiscal Year 2011 at $2.8 million and $191,000 less than expected
respectively. The Business License revenues have improved since the City contracted with
MuniServices, LLC to aggressively audit and follow-up with those businesses that are not in
compliance. The TOT is also expected to improve over the
next few months.
Overall, revenue performance in the remaining account
objects ended the fiscal year as predicted. These outcomes
46
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
are not considered material or indicative of trends that necessitate current budgetary projection
adjustments.
Expenditures
On the expenditure side, the City has incurred cost increases over the last several years while
our revenues have been shrinking. These costs include employee
compensation and benefit cost increases, rising property and health
insurance costs, greater unemployment insurance rates and
increasing contributions to the retirement funds. The City began the
contraction of its General Fund expenditures with mid-year
adjustments in Fiscal Year 2009 and has continued to cut expenses
through the Fiscal Year 2011 annual budget process. Additionally
adjustments were made on a regular basis throughout 2011 to keep
expenses aligned with projected revenue streams.
Actions taken to reduce the Adopted Budget in Fiscal Year 2011
included cutting 113 positions, staffing 10 neighborhood centers with
Community Based Organizations, employee furloughs, and not filling
police officer vacancies as the positions attrite. Additional measures taken throughout the fiscal
year include consolidating departments, deleting an additional 173 positions, deferring internal
transfers, refinancing debt, returning 30 vehicles and initiating a
redeployment strategy in the Fire Department to reduce overtime.
General Fund expenditures were $1.9 million under budget estimates
due to the concentrated efforts of all departments to reduce spending.
The most significant reductions were as follows: 1) reductions were
realized in Employee Services through attrition and the holding of vacant
positions in the amount of $.760 million; 2) utility savings of $.208 million;
3) direct charges from support departments of $.328 million were
primarily the result of savings in communications and equipment
expenses. There were various accounts that exceeded budget however
overall objects and expenditures were within appropriation authority and
within the projected expenditures for the year.
A summary of the major budget to actual variances within each category group can be seen as
follows:
47
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Comparison of Revenues and Expenditures – Budget to Actual / General Fund
Budgeted
Original
Budgeted
Final
Actual
Budgetary
Basis
Variance
Over/
(Under)
Explanation
Revenues
Other Taxes
36,379,000 37,270,600 32,587,709 (4,682,891) The depressed economy continued to impact tax receipts.
Room Tax, Real Estate Transfer Tax and Franchise Fee were
much lower than anticipated. While aggressive pursuit of
Business License Tax was having results, collections were
slower than has been anticipated.
Other
Intergovernmental
1,299,900 1,865,100 393,049 (1,472,051) An anticipated settlement with the County on over collected
Administrative Fees did not materialize by the end of Fiscal
Year 2011.
Miscellaneous
12,081,700 12,568,700 10,728,779 (1,839,921) Various transactions did not occur as had been anticipated.
The sale of one piece of land which had been budgeted did
not occur (Blosser) whereas another that had not been
budgeted was sold (Palm Lakes) for an amount less than had
been budgeted for Blosser. Debt draws and Capital
Reimbursements were also not made as budgeted. .
Transfers from
Other Funds
59,685,000 60,102,300 62,007,466 1,905,166 Various transfers were made near year end to close out and
consolidate numerous funds. While these transfers were not
budgeted they were approved by Council Action.
Expenditures
Police Department
127,270,500 125,030,100 123,244,315 (1,785,785) A concerted effort was made to reduce costs particularly in
the area of employee costs, including overtime and in the
area of telephone charges – cell phones. No new fleet
vehicle leases were entered into thereby reducing costs.
Public Ways &
Facilities
4,729,500 4,673,400 3,711,068 (962,332) Numerous projects were delayed due to the economy and as
a result employee costs, construction materials, contact help
and City Attorney charges were materially reduced.
Culture and
Recreation
15,656,700 15,273,100 14,337,684 (935,416) The City partnered with many Community Based
organizations to take on activities previously supported by
Parks (General Fund) and Parks maintenance was moved to
Public Works. .
Comparison of Revenues and Expenditures – Budget to Actual / Grants Special Revenue
Budgeted
Original
Budgeted
Final
Actual
Budgetary
Basis
Variance
Over/
(Under)
Explanation
Revenues
Federal Grants
74,185,900 82,290,300 39,916,465 (42,373,835) As the National economy has deteriorated, reimbursements
on Grants where funds are received after the costs are
incurred have slowed dramatically and as a result have
impacted the City’s cash flow.
State Grants
20,413,600 25,477,800 7,008,338 (18,469,462) The State Budget crisis has also been reflected in the
timeliness of Grant reimbursements from State Agencies.
Charges for
Services
2,344,800 4,244,800 2,357,802 (1,886,998) The extreme slowdown in Grant reimbursements also
impacted revenues to internal City departments which
provide services to departments waiting for grant
reimbursements.
Expenditures
Public Protection
11,621,500 14,642,900 13,012,927 (1,629,973) The delay in Grant reimbursements resulted in department
having to cut cuts where possible in order to maintain cash
flow. The largest reductions were in employee costs
through employee attrition and reductions in outside
services.
Public Ways &
Facilities
12,325,200 14,127,500 8,413,084 (5,714,416) The delay in Grant reimbursements resulted in the
department having to lay off employees which delayed
numerous projects particularly in the area of road repairs.
Community
Development
27,829,200 29,991,600 12,916,136 (17,075,464) The economy and various timing issues simply did not allow
for projects to begin as quickly has had been originally
anticipated and budgeted for.
Capital Outlay
35,371,700 45,141,600 18,160,580 (29,981,020) The depressed economy and staff reductions continued to
delay projects that in turn delayed acquisition of land,
equipment and contract construction costs.
48
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
Conclusion
The hard work and difficult decisions of the Mayor, Council and City employees kept the City’s
budget in the black through FY 2011. However, the City continues to
face a stubborn annual gap between revenues and expenditures
for each year through 2014-2015. With a fairly weak economic
recovery expected, the budget-balancing decisions continue to be
ongoing and multiyear in nature in order to restore the finances of
the City to sound footing. Consistent with previous actions, it is
imperative that budget solutions result in structural alignment to
assure that the city continues to live within its means. While our
local economy continues to experience issues with a decline in
sales tax and property valuations, the City of Fresno has made and
will continue to make adjustments based on these trends in order to
maintain a balanced budget. It is the City’s intent to smooth these
adjustments over the next five to ten years. These ongoing actions are expected to continue to
require contraction within the organization which will result in reductions in services to the
community. However, excellence in providing core services will continue to be the priority
despite the economic climate.
Even though ongoing difficult decisions lie ahead, the City of Fresno will emerge from these
difficult economic times as a stronger, leaner and more effective municipal government. The City
will live within its means but not retreat from excellence in the quality and reliability of the
services it provides to the public.
49
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
GRAPHIC DEPICTION OF MAJOR REVENUE SOURCES
The chart below is a graphically depiction of the major General Fund revenue sources and the
trends in those revenues on an actual basis as well as the estimated figures used for the fiscal
year 2012 budget build.
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
FY 2008 Actual FY 2009 Actual FY 2010 Actual FY 2011 Actual FY 2012 Adopted Millions General Fund Revenue Comparision
Sales Tax Property Tax Motor Vehicle In-Lieu
50
City of Fresno, California
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2011
REQUESTS FOR INFORMATION
This financial report is designed to provide our citizens, taxpayers, customers, investors and
creditors with a general overview of the City’s finances and to demonstrate the City’s
accountability for the money it receives. Below is the contact for questions about this report or
requests for additional financial information.
City of Fresno
Office of the Controller/Finance Department
2600 Fresno Street, Room 2156
Fresno, California 93721-3622
Or contact us at
www.fresno.gov
51
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Government-Wide
Financial Statements Government-WideFinancial Statements
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The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF NET ASSETS
JUNE 30, 2011
Component Unit
Governmental
Activities
Business-Type
Activities Total
City of Fresno
Cultural Arts
Properties
Assets
Cash and Investments $ 104,498,466 $ 128,198,328 $ 232,696,794 $ 347,942
Receivables, Net 54,202,359 45,585,603 99,787,962 80,468
Internal Balances 36,098,201 (36,098,201) - -
Inventories 740,811 4,769,979 5,510,790 -
Deferred Charges 4,965,761 8,293,626 13,259,387 -
Property Held for Resale 34,928,321 - 34,928,321 -
Restricted Cash 14,753,033 295,447,834 310,200,867 -
Restricted Grants and Interest Receivable - 764,637 764,637 -
Loans, Notes, Leases and Other
Receivables, Net 56,704,827 69,460,906 126,165,733 -
Capital Assets:
Land and Construction in Progress
Not Being Depreciated 277,681,260 166,513,622 444,194,882 888,000
Facilities Infrastructure and Equipment
Net of Depreciation 676,927,471 1,018,009,185 1,694,936,656 13,632,920
Total Assets 1,261,500,510 1,700,945,519 2,962,446,029 14,949,330
Liabilities
Accrued Liabilities 25,798,555 30,785,401 56,583,956 -
Unearned Revenue 6,417,907 48,197,390 54,615,297 232,262
Deposits from Others 376,977 17,662,876 18,039,853 -
Other Liabilities, Capacity Rights - 12,357,941 12,357,941 -
Long-term Liabilities:
Due Within One Year 45,801,816 20,767,793 66,569,609 -
Due in more than one year 514,604,179 626,772,227 1,141,376,406 16,660,000
Total Liabilities 592,999,434 756,543,628 1,349,543,062 16,892,262
Net Assets
Invested in Capital Assets, Net of Related Debt 760,927,178 776,377,076 1,537,304,254 (2,139,080)
Restricted for:
Public Protection 3,550,753 - 3,550,753 -
Public Ways 39,625,601 - 39,625,601 -
Culture and Recreation 1,653,308 - 1,653,308 -
Community Development 39,677,613 - 39,677,613 -
Capital Projects 47,032,484 - 47,032,484 -
Debt Service 5,037,749 - 5,037,749 -
Emergency Reserve 1,443,686 - 1,443,686 -
Unrestricted (Deficit) (230,447,296) 168,024,815 (62,422,481) 196,148
Total Net Assets (Deficit)$ 668,501,076 $ 944,401,891 $ 1,612,902,967 $ (1,942,932)
Primary Government
55
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2011
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions
Primary Government
Governmental activities
General Government $ 26,642,342 $ 16,453,878 $ 75,537 $-
Public Protection 192,992,899 18,320,712 10,580,011 1,077,488
Public Ways and Facilities 68,471,429 13,439,576 15,719,626 37,131,482
Culture and Recreation 21,797,047 2,432,030 417,610 2,086,337
Community Development 14,981,201 653,346 16,027,021 -
Redevelopment 4,820,740 - 190,947 -
Interest on Long-term Debt 25,722,478 - - -
Total Governmental Activities 355,428,136 51,299,542 43,010,752 40,295,307
Business-type Activities
Water System 64,134,266 67,921,933 1,142,612 1,573,174
Sewer System 47,568,482 76,628,147 - 6,505,183
Solid Waste Management 45,423,948 51,753,225 90,715 -
Transit 47,250,233 9,485,574 46,229,499 4,576,448
Airports 29,019,666 21,700,560 1,937,693 5,089,391
Fresno Convention Center 11,636,581 2,929,106 - -
Community Sanitation 10,023,819 10,209,080 - -
Parking 5,956,437 5,996,813 - -
Parks and Recreation 781,968 742,319 - -
Development Services 11,407,594 10,669,548 - -
Stadium 3,606,916 340,281 - -
Total Business-type Activities 276,809,910 258,376,586 49,400,519 17,744,196
Total Primary Government $ 632,238,046 $ 309,676,128 $ 92,411,271 $ 58,039,503
Component Unit
City of Fresno Cultural Arts Properties $ 2,307,986 $ 282,262 $- $-
General Revenues:
Taxes and Licenses:
Property Taxes
Sales Taxes - Shared Revenues
In Lieu Sales Tax
Franchise Taxes
Business Tax
Room Tax
Other Taxes
Investment earnings
Gain on sale of capital assets
Transfers:
Total general revenues and transfers
Change in net assets
Net Assets, Beginning of Year
Prior Period Adjustment
Net Assets, Beginning of Year Restated
Net Assets (Deficit), End of Year
Program Revenue
56
The notes to the financial statements are an integral part of this statement.
Component Unit
City of Fresno
Governmental Business-type Cultural Arts
Activities Activities Total Properties
$ (10,112,927) $- $ (10,112,927) $-
(163,014,688)- (163,014,688)-
(2,180,745)- (2,180,745)-
(16,861,070)- (16,861,070)-
1,699,166 - 1,699,166 -
(4,629,793)- (4,629,793)-
(25,722,478)- (25,722,478)-
(220,822,535)- (220,822,535)-
- 6,503,453 6,503,453 -
- 35,564,848 35,564,848 -
- 6,419,992 6,419,992 -
- 13,041,288 13,041,288 -
- (292,022) (292,022)-
- (8,707,475)(8,707,475)-
- 185,261 185,261 -
- 40,376 40,376 -
- (39,649) (39,649)-
- (738,046) (738,046)-
- (3,266,635) (3,266,635)-
- 48,711,391 48,711,391 -
(220,822,535) 48,711,391 (172,111,144)-
(2,025,724)
125,686,674 - 125,686,674 -
49,250,575 - 49,250,575 -
15,946,589 -15,946,589 -
7,916,522 - 7,916,522 -
14,249,287 - 14,249,287 -
8,449,821 - 8,449,821 -
1,948,525 - 1,948,525 -
4,434,769 3,528,111 7,962,880 82,792
536,383 153,000 689,383 -
(6,608,279)6,608,279 - -
221,810,866 10,289,390 232,100,256 82,792
988,331 59,000,781 59,989,112 (1,942,932)
667,512,745 885,401,110 1,552,913,855 1,898,026
- - - (1,898,026)
667,512,745 885,401,110 1,552,913,855 -
$ 668,501,076 $ 944,401,891 $ 1,612,902,967 $ (1,942,932)
Primary Government
Net (Expense) Revenue and Changes in Net Assets
57
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Fund Financial Statements
Fund Financial Statements
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA 2011-06-30
BALANCE SHEET
GOVERNMENTAL FUNDS
June 30, 2011
Grants Redevelopment Other Total
General Special Revenue Agency, Debt Governmental Governmental
Fund Fund Service Fund Funds Funds
Assets
Cash and Investments $ 64,515 $600 $ 4,753,473 $ 63,078,797 $ 67,897,385
Receivables, Net 6,247,309 120 - 461,664 6,709,093
Grants Receivable 43,752 14,714,460 - 318,597 15,076,809
Intergovernmental Receivables 28,885,524 - - 2,494,395 31,379,919
Due From Other Funds 937 497,820 28,852 10,832,087 11,359,696
Advances to Other Funds, Net 16,828,650 - - - 16,828,650
Property Held for Resale - - - 34,928,321 34,928,321
Restricted Cash 1,443,686 283 1,876,198 11,123,276 14,443,443
Loans, Notes, Leases, Other Receivables, Net - 36,133,630 - 20,571,197 56,704,827
Total Assets $ 53,514,373 $ 51,346,913 $ 6,658,523 $ 143,808,334 $ 255,328,143
Liabilities and Fund Balances
Liabilities:
Accrued Liabilities $ 8,086,262 $ 3,280,197 $- $ 4,187,877 $ 15,554,336
Deferred Revenue 21,589,884 13,397,737 - 179,877 35,167,498
Due to Other Funds 1,221,441 6,996,867 - 291,111 8,509,419
Advances From Other Funds 4,106,508 - - 12,690,500 16,797,008
Deposits From Others 302,216 13,168 12,009 - 327,393
Total Liabilities 35,306,311 23,687,969 12,009 17,349,365 76,355,654
Fund Balances (Deficit):
Nonspendable 16,828,650 - - - 16,828,650
Restricted - 41,931,303 6,646,514 94,636,548 143,214,365
Committed 1,443,686 - - - 1,443,686
Assigned - - - 31,822,421 31,822,421
Unassigned (64,274) (14,272,359) - - (14,336,633)
Total Fund Balances 18,208,062 27,658,944 6,646,514 126,458,969 178,972,489
Total Liabilities and Fund Balances $53,514,373 $51,346,913 $6,658,523 $143,808,334 $255,328,143
60
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET ASSETS
JUNE 30, 2011
Fund balances – total governmental funds $ 178,972,489
Land $ 218,480,012
Buildings and Improvements, net of $70,444,922 accumulated depreciation 141,489,829
Machinery and Equipment, net of $28,847,407 accumulated depreciation 8,549,304
Infrastructure, net of $709,966,946 accumulated depreciation 502,322,780
Construction in Progress 59,110,117
Total Capital Assets 929,952,042
Some of the City's property taxes ($11,349,758), sales tax ($1,830,388), In Lieu Sales Tax
($4,921,863), grant revenue ($9,140,699) and Franchise Fee ($1,506,883) will be collected after year-
end, but are not available soon enough to pay for the current period's expenditures, and therefore
are reported as deferred revenue in the funds.28,749,591
Interest on long-term debt is not accrued in governmental funds, but rather is recognized as an
expenditure when due.(4,266,660)
Long-term liabilities applicable to governmental activities are not due and payable in the current
period and accordingly are not reported as fund liabilities.
Bonds and Certificates of Participation $(379,895,000)
Notes Payable (9,492,367)
Capital Leases (10,307,945)
Compensated Absences and Health Retirement Arrangment (40,367,571)
Net OPEB Obligation (24,055,818)
Pollution Remediation (10,919)
Retention Payable (438,686)
Total Long Term Liabilities (464,568,306)
Governmental funds report the effect of issuance costs, premium, original issue discount and
refunding charge, when debt is first issued, whereas in the statement of activities these amounts are
amortized to interest and amortization expense over the life of the debt.
Deferred Cost of Issuance $ 4,965,761
Deferred Amount on Refunding 1,048,546
Unamortized Premium (1,535,550)
Unamortized Discount 1,189,130
Total 5,667,887
Internal service funds are used by management to charge the costs of various activities, such as fleet
and insurance to individual funds. Assets and liabilities of certain internal service funds are included
in governmental activities in the statement of net assets.(6,005,967)
Net assets of governmental activities $668,501,076
Amounts reported for governmental activities in the statement of net assets are different because:
Capital assets used in governmental activities are not financial resources and, therefore are not
reported in the funds. Those assets consist of:
61
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2011
Grants Redevelopment Other Total
General Special Revenue Agency, Debt Governmental Governmental
Fund Fund Service Fund Funds Funds
Revenues
Taxes $ 197,416,619 $- $ 20,543,983 $ 25,194,240 $ 243,154,842
Licenses and Permits 423,381 - - - 423,381
Intergovernmental 3,337,022 52,158,701 - 2,686,789 58,182,512
Charges for Services 12,840,147 65,202 - 7,629,756 20,535,105
Fines 3,170,809 - - - 3,170,809
Use of Money and Property 1,451,055 891,272 474,720 1,408,023 4,225,070
Miscellaneous 1,505,461 183,954 - 12,917,618 14,607,033
Total Revenues 220,144,494 53,299,129 21,018,703 49,836,426 344,298,752
Expenditures
Current:
General Government 6,604,665 355,737 4,967,345 890,294 12,818,041
Public Protection 166,323,946 11,436,200 - 6,979,419 184,739,565
Public Ways and Facilities - 8,373,642 - 12,012,352 20,385,994
Culture and Recreation 14,260,745 1,084,148 - 877,742 16,222,635
Community Development 1,064,452 10,895,164 - 513,836 12,473,452
Capital Outlay 436,772 16,898,012 - 33,567,448 50,902,232
Debt Service:
Principal 1,539,888 - 943,008 11,885,562 14,368,458
Interest 1,143,228 - 2,640,819 21,289,827 25,073,874
Total Expenditures 191,373,696 49,042,903 8,551,172 88,016,480 336,984,251
Excess of Revenue
28,770,798 4,256,226 12,467,531 (38,180,054) 7,314,501
Other Financing Sources (Uses)
Transfers In 14,164,059 3,682,657 54,686,592 65,435,243 137,968,551
Transfers Out (66,690,361) (23,786,986) (14,625,712) (40,484,065) (145,587,124)
Proceeds for Capital Lease Obligations 1,707,352 - - - 1,707,352
Sale of Capital Assets 77,450 - - - 77,450
Total Other Financing
(50,741,500) (20,104,329) 40,060,880 24,951,178 (5,833,771)
Net Changes in Fund Balances (21,970,702) (15,848,103) 52,528,411 (13,228,876) 1,480,730
Fund Balances (Deficit) - Beginning 40,178,764 43,507,047 (45,881,897) 139,687,845 177,491,759
Fund Balances - Ending $ 18,208,062 $ 27,658,944 $ 6,646,514 $ 126,458,969 $ 178,972,489
Over (Under) Expenditures
Sources (Uses)
62
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
YEAR ENDED JUNE 30, 2011
Net change in fund balances - total governmental funds $1,480,730
Governmental funds report capital outlays as expenditures. However, in the statement of activities
the cost of those assets is allocated over their estimated useful lives and reported as depreciation
expense. This is the amount by which capital outlays of $30,695,022 and infrastructure
contributions of $5,056,025 were exceeded by depreciation of $43,728,885 and disposals of
$352,713 in the current period.(8,330,551)
Some expenses, pollution remediation, retention payable, rebatable arbitrage, and Net OPEB
Obligation reported in the statement of activities do not require the use of current financial
resources, and therefore are not reported as expenditures in governmental funds.(2,765,203)
In the statement of net assets acquiring debt increases long-term liabilities and does not affect the
statement of activities. Additionally, repayment of principal is an expenditure in the governmental
funds but reduces liability in the statement of net assets.
Capital Lease Obligations Incurred $(1,707,352)
Principal payments to bond, certificate and note holders 14,593,458
Net adjustment 12,886,106
Under the modified accrual basis of accounting used in the governmental funds, expenditures are
not recognized for transactions that are not normally paid with expendable available financial
resources. In the statement of activities, however, which is presented on the accrual basis,
expenses and liabilities are reported regardless of when financial resources are available. In
addition, interest on long term debt is not recognized under the modified accrual basis of accounting
until due, rather than as it accrues.
Compensated Absences and Health Retirement Arrangement $390,948
Additions and amortization of Debt Premium, Discount, and Refunding Charge 14,018
Additions and amortization of Debt Issue Costs (471,625)
Accrued Interest on Bonds, Certificates, and Notes (645,581)
Combined adjustment (712,240)
Revenues recognized in the statement of activites in previous years and recognized in the fund
statements in the current year were greater than revenues recognized in the statement of activities
in the current year but not reported in the funds as they do not provide current financial resources.(297,630)
Internal Service Funds are used by management to charge the costs of certain activities, such as
insurance and fleet, to individual funds. The net expenses of certain activities of internal service
funds is reported with governmental activities in the statement of activities.(1,272,881)
Change in net assets of governmental activities $ 988,331
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES
Amounts reported for governmental activities in the statement of activities are different because:
63
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
Run: 03/21/2012 at 01:10:58 PM
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2011
Business-Type Activities - Enterprise Funds
Water Sewer Solid Waste
System System Management Transit
Assets
Current Assets:
Cash and Investments $ 50,864,198 $ 63,211,514 $ 10,210,863 $1,300
Restricted Cash - Current - - - -
Interest Receivable 395,613 235,275 173,230 -
Accounts Receivables, Net 7,016,338 7,884,870 5,185,537 305,860
Grants Receivable - - 45,832 11,690,710
Inventories 1,409,285 2,477,436 - 812,025
Intergovernmental Receivables - 832,812 - 4,568,337
Due from Other Funds 62,389 15,581 874,699 5,000
Total Current Assets 59,747,823 74,657,488 16,490,161 17,383,232
Noncurrent Assets:
Restricted:
Cash and Investments 118,848,193 119,048,160 27,838,743 5,428,331
Grants and Interest Receivable 294,406 366,870 - -
Total Restricted Assets 119,142,599 119,415,030 27,838,743 5,428,331
Other Assets:
Other Receivables 1,072,012 13,818,986 - -
Other Assets 1,388,284 2,870,046 170,447 -
Unamortized CVP Water Settlement 36,636,042 - - -
Accounts Receivable from Solid
Waste Rate Payers - - 17,933,866 -
Advances to Other Funds, Net - 422,897 - -
Total Other Assets 39,096,338 17,111,929 18,104,313 -
Capital Assets:
Land 12,604,742 17,074,548 849,137 13,523
Buildings, Systems and Improvements 269,900,726 568,445,009 2,507,200 20,944,046
Machinery & Equipment 3,840,879 14,396,419 15,338,973 53,920,917
Infrastructure 64,367,925 109,586,539 - -
Construction in Progress 65,531,176 38,169,882 - 5,498,795
Less Accumulated Depreciation (133,370,734) (144,537,536) (13,131,670) (50,858,724)
Total Capital Assets, Net 282,874,714 603,134,861 5,563,640 29,518,557
Total Non-Current Assets 441,113,651 739,661,820 51,506,696 34,946,888
Total Assets 500,861,474 814,319,308 67,996,857 52,330,120
64
The notes to the financial statements are an integral part of this statement.
Business-Type Activities - Enterprise Funds
Fresno Other
Convention Enterprise Internal Service
Airports Center Stadium Funds Total Funds
$93,734 $580,458 $- $ 2,237,549 $ 127,199,616 $ 37,599,793
- 958,164 - - 958,164 -
35,642 - 1,374 9,148 850,282 329,762
1,123,564 508,244 - 5,377,203 27,401,616 769,899
- - - - 11,736,542 -
20,000 51,233 - - 4,769,979 740,811
81,037 - - 51,854 5,534,040 -
527,211 - - 10,986 1,495,866 12,719,205
1,881,188 2,098,099 1,374 7,686,740 179,946,105 52,159,470
14,385,870 4,228,160 1,631,389 - 291,408,846 3,390,414
103,361 - - - 764,637 -
14,489,231 4,228,160 1,631,389 - 292,173,483 3,390,414
- - - - 14,890,998 -
1,500,367 1,414,558 880,099 69,825 8,293,626 -
- - - - 36,636,042 -
- - - - 17,933,866 -
3,683,611 - - - 4,106,508 -
5,183,978 1,414,558 880,099 69,825 81,861,040 -
10,805,127 5,319,761 710,000 5,180,767 52,557,605 56,688
142,748,182 97,774,479 39,151,537 23,350,170 1,164,821,349 17,573,370
5,921,864 1,438,164 1,900,142 613,136 97,370,494 145,870,722
66,985,084 - - - 240,939,548 -
4,756,164 - - - 113,956,017 34,443
(63,896,079) (50,974,571) (9,056,347) (19,361,632) (485,187,293) (138,813,447)
167,320,342 53,557,833 32,705,332 9,782,441 1,184,457,720 24,721,776
186,993,551 59,200,551 35,216,820 9,852,266 1,558,492,243 28,112,190
188,874,739 61,298,650 35,218,194 17,539,006 1,738,438,348 80,271,660
(continued)
65
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF NET ASSETS
PROPRIETARY FUNDS
JUNE 30, 2011 (continued)
Business-Type Activities - Enterprise Funds
Water Sewer Solid Waste
System System Management Transit
Liabilities
Current Liabilities:
Accrued Liabilities $ 8,536,550 $ 8,399,599 $ 1,998,948 $ 3,244,943
Accrued Compensated Absences and HRA 219,703 276,127 296,041 539,376
Liability for Self Insurance - - - -
Unearned Revenue 13,367,036 22,372,180 2,114,493 9,726,298
Due to Other Funds - - - 671,699
Bonds Payable 4,220,000 6,790,000 230,000 -
Capital Lease Obligations - - - -
Notes Payable 367,726 - - -
Total Current Liabilities 26,711,015 37,837,906 4,639,482 14,182,316
Non-current Liabilities:
Accrued Compensated Absences and HRA 1,770,770 1,528,806 1,201,685 2,404,285
Capital Lease Obligations - - - -
Liability for Self-Insurance - - - -
Bonds Payable 161,118,540 229,466,498 7,244,038 -
Notes Payable 4,634,570 - - -
CVP Litigation Settlement 35,941,149 - - -
Pollution Remediation Obligation - - - -
Other Liabilities - 12,357,941 - -
Accrued Closure Costs - - 20,626,149 -
Advances From Other Funds - - - -
Net OPEB Obligation 1,048,991 1,141,001 1,210,901 4,101,738
Deposits Held for Others 1,030,637 12,336,150 - -
Total Non-current Liabilities 205,544,657 256,830,396 30,282,773 6,506,023
Total Liabilities 232,255,672 294,668,302 34,922,255 20,688,339
Net Assets
Invested in Capital Assets, Net of Related Debt 197,955,534 422,326,421 1,718,594 29,518,557
Unrestricted (Deficit)70,650,268 97,324,585 31,356,008 2,123,224
Total Net Assets (Deficit) $ 268,605,802 $ 519,651,006 $ 33,074,602 $ 31,641,781
66
The notes to the financial statements are an integral part of this statement.
Business-Type Activities - Enterprise Funds
Fresno Other
Convention Enterprise Internal Service
Airports Center Stadium Funds Totals Funds
$ 3,228,234 $ 3,072,397 $ 196,037 $ 1,355,788 $ 30,032,496 $ 6,291,778
182,817 56,929 - 387,024 1,958,017 747,933
- - - - - 21,868,023
- 140,269 - 477,114 48,197,390 -
- 242,809 85,920 14,111,018 15,111,446 1,953,902
935,000 3,351,578 1,065,000 50,000 16,641,578 -
- - - - - 126,576
- 69,744 - - 437,470 -
4,346,051 6,933,726 1,346,957 16,380,944 112,378,397 30,988,212
1,277,561 - - 2,550,290 10,733,397 5,711,982
- - - - - 236,965
- - - - - 65,670,265
57,457,938 47,376,758 38,056,784 2,273,558 542,994,114 -
- 551,744 - - 5,186,314 -
- - - - 35,941,149 -
956,559 - - - 956,559 -
- - - - 12,357,941 -
- - - - 20,626,149 -
- - - 1,743,500 1,743,500 2,394,650
640,248 9,192 - 2,073,068 10,225,139 4,456,891
138,752 1,076,513 - - 14,582,052 3,130,408
60,471,058 49,014,207 38,056,784 8,640,416 655,346,314 81,601,161
64,817,109 55,947,933 39,403,741 25,021,360 767,724,711 112,589,373
115,655,614 6,463,449 (4,785,063) 7,458,883 776,311,989 24,358,235
8,402,016 (1,112,732) 599,516 (14,941,237) 194,401,648 (56,675,948)
$ 124,057,630 $ 5,350,717 $ (4,185,547) $ (7,482,354) $ 970,713,637 $ (32,317,713)
Some amounts reported for Business-type activities in the statement of net
assets are different due to certain internal service fund assets and liabilities
being included with Business-type activities.(26,311,746)
Net assets of business-type activities $ 944,401,891
67
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2011
Water Sewer Solid Waste
System System Management Transit
Operating Revenues:
Charges for Services $ 67,921,933 $ 76,628,147 $ 51,753,225 $ 9,485,574
Operating Expenses:
Cost of Services 35,056,394 21,726,648 26,731,453 32,657,020
Administration 11,369,767 9,696,332 15,866,335 9,977,346
Amortization 123,143 174,694 14,744 -
Depreciation 9,702,942 13,930,904 892,279 3,776,035
Total Operating Expenses 56,252,246 45,528,578 43,504,811 46,410,401
Operating Income (Loss)11,669,687 31,099,569 8,248,414 (36,924,827)
Non-operating Revenue (Expenses):
Operating Grants 1,142,612 - 90,715 46,229,499
Interest Income 1,450,861 1,618,632 166,440 -
Interest Expense (7,095,226) (1,328,234) (448,067) (99,373)
Passenger Facility Charges - - - -
Customer Facility Charges - - - -
Gain ( Loss) on Disposal of Capital Assets - - (28,834) -
Total Non-operating Revenue (Expenses)(4,501,753) 290,398 (219,746) 46,130,126
Income (Loss) Before Contributions and Transfers 7,167,934 31,389,967 8,028,668 9,205,299
Capital Contributions 1,573,174 6,505,183 105,533 4,576,448
Transfers In - - - 159,000
Transfers Out (416,557) (1,179,914) (1,197,509) (2,043,730)
Changes in Net Assets 8,324,551 36,715,236 6,936,692 11,897,017
Total Net Assets (Deficit) - Beginning 260,281,251 482,935,770 26,137,910 19,744,764
Total Net Assets (Deficit) - Ending $ 268,605,802 $ 519,651,006 $ 33,074,602 $ 31,641,781
Business-Type Activities - Enterprise Funds
68
The notes to the financial statements are an integral part of this statement.
Business-Type Activities - Enterprise Funds
Fresno Other
Convention Enterprise Internal Service
Airports Center Stadium Funds Total Funds
$ 18,130,636 $ 2,929,106 $ 340,281 $ 27,617,760 $ 254,806,662 $ 131,479,587
9,088,780 3,339,604 - 16,118,176 144,718,075 104,132,713
8,779,274 1,166,607 13,377 10,726,753 67,595,791 25,608,566
100,853 138,477 71,965 4,068 627,944 -
7,568,625 3,918,043 1,091,283 400,871 41,280,982 9,609,700
25,537,532 8,562,731 1,176,625 27,249,868 254,222,792 139,350,979
(7,406,896) (5,633,625) (836,344) 367,892 583,870 (7,871,392)
1,937,693 - - - 49,400,519 -
18,129 156,871 4,789 17,041 3,432,763 496,793
(3,317,588) (3,073,850) (2,430,291) (275,769) (18,068,398) (17,041)
2,367,054 - - - 2,367,054 -
1,202,870 - - - 1,202,870 -
137,000 - - 16,000 124,166 388,268
2,345,158 (2,916,979) (2,425,502) (242,728) 38,458,974 868,020
(5,061,738) (8,550,604) (3,261,846) 125,164 39,042,844 (7,003,372)
5,268,186 - - 10,982 18,039,506 30,349
- 9,471,774 3,437,508 7,570,673 20,638,955 5,210,281
(4,305,932) (559,796) - (4,440,662) (14,144,100) (4,086,563)
(4,099,484) 361,374 175,662 3,266,157 63,577,205 (5,849,305)
128,157,114 4,989,343 (4,361,209) (10,748,511) 907,136,432 (26,468,408)
$ 124,057,630 $ 5,350,717 $ (4,185,547) $ (7,482,354) 970,713,637 $ (32,317,713)
Some amounts reported for Business-type activities in the statement of
activities are different due to the net revenue (expenses) of certain internal
service funds being reported with Business-type activities.(4,576,424)
Change in Net Assets of business-type activities $ 59,000,781
69
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2011
Water Sewer Solid Waste
System System Management Transit
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 66,470,606 $85,568,693 $ 51,167,996 $9,955,494
Cash Received from Interfund Services Provided - - - -
Cash Payment to Suppliers for Services (22,279,606) (21,184,440) (13,032,945) (9,659,055)
Cash Paid for Interfund Services Used (5,941,148) (5,360,340) (13,821,019) (5,396,152)
Cash Payments to Employees for Services (11,636,802) (12,385,662) (15,954,405) (25,248,904)
Cash Payment for Claims and Refunds - - - -
Net Cash Provided by (Used for) Operating Activities 26,613,050 46,638,251 8,359,627 (30,348,617)
CASH FLOWS FROM CAPITAL AND RELATED FINANCING
ACTIVITIES:
Capital Contributions 1,014,731 4,006,011 - 4,576,448
Passenger and Customer Facility Charges - - - -
Interest Payments on Capital Debt (9,900,864) (12,387,963) (447,681) -
Principal Payments on Capital Debt-bonds (4,140,000) (9,065,000) (220,000) -
Principal Payments on Capital Debt-notes (233,359) - - -
Principal Payment on Capital lease Obligations - - - -
Proceeds from Sale of Capital Assets - - - -
Acquisition and Construction of Capital Assets (42,390,886) (18,323,350) (301,619) (4,433,606)
Net Cash Provided by (Used for) Capital and Related Financing
Activities (55,650,378) (35,770,302) (969,300) 142,842
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES:
Operating Grants 1,142,612 - 306,175 35,957,237
Interest Payments, Noncapital - - - (99,373)
Borrowing, Repayment From (Repayment To) Other Funds - - - (11,265,005)
Transfers In - - - 159,000
Transfers Out (319,527) (322,057) (1,197,509) (2,043,730)
Net Cash Provided by (Used for) Non-Capital Financing Activities 823,085 (322,057) (891,334) 22,708,129
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends on Investments 1,412,469 1,544,155 129,076 -
Proceeds of investments securities with trustees 26,969,815 37,851,657 - -
Net Cash Provided by Investing Activities 28,382,284 39,395,812 129,076 -
Net Increase (Decrease) in Cash and Cash Equivalents 168,041 49,941,704 6,628,069 (7,497,646)
Cash and Cash Equivalents, Beginning of Year 93,549,372 118,570,626 31,421,537 12,927,277
Cash and Cash Equivalents, End of Year $ 93,717,413 $168,512,330 $ 38,049,606 $5,429,631
Business-Type Activities - Enterprise Funds
70
The notes to the financial statements are an integral part of this statement.
Fresno Other
Convention Enterprise Internal Service
Airports Center Stadium Funds Total Funds
$19,059,943 $2,993,643 $540,502 $25,944,784 $261,701,661 $26,494,970
- - - - - 108,301,761
(12,320,071) (2,934,918) (11,878) (5,893,885) (87,316,798) (28,490,583)
(1,294,407) (3,229) (650) (6,287,760) (38,104,705) (12,298,143)
(5,431,302) (1,568,465) - (13,926,873) (86,152,413) (30,428,012)
- - - - - (52,457,999)
14,163 (1,512,969) 527,974 (163,734) 50,127,745 11,121,994
5,089,391 - - - 14,686,581 20,097
3,569,924 - - - 3,569,924 -
(3,383,170) (2,963,822) (2,441,061) (109,510) (31,634,071) (19,966)
(890,000) (3,466,200) (1,005,000) (45,000) (18,831,200) -
- (66,264) - - (299,623) -
- - - - - (609,893)
137,000 - - 16,000 153,000 419,896
(3,831,249) (108,304) - (46,777) (69,435,791) (5,662,413)
691,896 (6,604,590) (3,446,061) (185,287) (101,791,180) (5,852,279)
3,783,071 - - - 41,189,095 -
- (22,575) - (168,268) (290,216) -
- (1,561,735) 85,920 (2,825,961) (15,566,781) 10,928,965
- 9,471,774 2,671,032 7,570,673 19,872,479 5,167,018
(150,552) (8) - (4,065,350) (8,098,733) (4,086,563)
3,632,519 7,887,456 2,756,952 511,094 37,105,844 12,009,420
15,271 138,617 6,590 22,347 3,268,525 552,791
- 2,401,300 - - 67,222,772 -
15,271 2,539,917 6,590 22,347 70,491,297 552,791
4,353,849 2,309,814 (154,545) 184,420 55,933,706 17,831,926
10,125,755 3,456,968 1,785,934 2,053,129 273,890,598 23,158,281
$14,479,604 $5,766,782 $1,631,389 $2,237,549 $329,824,304 $40,990,207
(Continued)
Business-Type Activities - Enterprise Funds
71
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
YEAR ENDED JUNE 30, 2011 (Continued)
Water Sewer Solid Waste
System System Management Transit
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating income (loss)$ 11,669,687 $ 31,099,569 $ 8,248,414 $ (36,924,827)
Depreciation expense 9,702,942 13,930,904 892,279 3,776,035
Amortization expense 123,143 174,694 14,744 -
Change in assets and liabilities:
Decrease (increase) in accounts receivable 1,709,194 1,011,576 1,314,402 65,195
Decrease (increase) in other receivables (33,951) 9,203,430 801,722 -
Decrease (increase) in due from other funds 24,760 (6,421) (843,682) 3,100
Decrease (increase) in due from other governments - (44,763) - 277,899
Decrease (increase) in material and supplies inventory 59,523 (267,695) - 83,060
Decrease (increase) in prepaid items - - - -
Decrease (increase) in advances to other funds 126,758 3,756 - -
(Decrease) increase in accrued liabilities 3,943,701 82,245 314,111 1,218,541
(Decrease) increase in due to other funds (161,525) (150,915) (767,616) 285,092
(Decrease) increase in other liabilities - (7,694,754) - -
(Decrease) increase in CIP Retention payable 395,659 (46,398) - 107,725
(Decrease) increase in accrued closure costs - - 25,322 -
(Decrease) increase in unearned revenue (1,394,936) (1,076,118) (1,148,330) (161,365)
(Decrease) increase in liability for self-insurance - - (1,090,055) -
(Decrease) increase in deposits 112 - - -
Increase (Decrease) in Pollution Remediation liability - - - -
(Decrease) increase in OPEB obligation 447,983 419,141 598,316 920,928
Net Cash Provided by (Used For) Operating Activities $ 26,613,050 $ 46,638,251 $ 8,359,627 $ (30,348,617)
Reconciliation of Cash and Cash Equivalents to the
Statement of Net Assets:
Cash and Investments:
Unrestricted $ 50,864,198 $ 63,211,514 $ 10,210,863 $1,300
Restricted - Current and Noncurrent 118,848,193 119,048,160 27,838,743 5,428,331
Total cash and investments 169,712,391 182,259,674 38,049,606 5,429,631
Less: Non-cash equivalents 75,994,978 13,747,344 - -
Cash and Cash Equivalents at End of Year on Statement
of Cash Flows $ 93,717,413 $ 168,512,330 $ 38,049,606 $ 5,429,631
Noncash Investing, Capital, and Financing Activities:
Acquisition and construction of capital assets on accounts payable $ 3,102,586 $ 2,349,746 $- $ 111,445
Amortization of bond premium, discount and loss on refunding (225,998) (21,147) 2,246 -
Borrowing under capital lease - - - -
Capital asset transfer in(out)- - 105,533 -
Decrease in fair value of investments 186,754 280,963 81,215 -
Developer and Other Capital Contributions 558,443 369,420 - -
Transfer in(out) to reduce advance (receivable)payable (97,031) (857,857) - -
Adjustment to reconcile operating income (loss) to net cash Provided
by (used for) operating activities:
Business-Type Activities - Enterprise Funds
72
The notes to the financial statements are an integral part of this statement.
Fresno Other
Convention Enterprise Internal Service
Airports Center Stadium Funds Total Funds
$ (7,406,896) $ (5,633,625) $ (836,346) $ 367,892 $ 583,868 $ (7,871,392)
7,568,625 3,918,043 1,091,283 400,871 41,280,982 9,609,700
100,853 138,477 71,965 4,068 627,944 -
(131,086) (70,764) 200,220 (1,211,785) 2,886,952 563,315
- - - - 9,971,201 -
398,228 - - 31,187 (392,828) 1,338,094
1,178,943 - - (51,854) 1,360,225 (255,000)
- (1,175) - - (126,287) 31,192
- (172,414) - - (172,414) -
(457,462) - - (8,388) (335,336) -
(1,277,347) 212,352 852 234,409 4,728,864 (36,736)
(31,622) - - (163,064) (989,650) 1,889,132
- - - - (7,694,754) -
(88,554) (40,617) - - 327,815 -
- - - - 25,322 -
- 102,727 - (272,067) (3,950,089) -
- - - - (1,090,055) 5,098,557
8,711 33,749 - - 42,572 (218,396)
(36,405) - - - (36,405) -
188,175 278 - 504,997 3,079,818 973,528
$ 14,163 $ (1,512,969) $ 527,974 $ (163,734) $ 50,127,745 $ 11,121,994
$ 93,734 $ 580,458 $- $ 2,237,549 $ 127,199,616 $ 37,599,793
14,385,870 5,186,324 1,631,389 - 292,367,010 3,390,414
14,479,604 5,766,782 1,631,389 2,237,549 419,566,626 40,990,207
- - - - 89,742,322 -
$ 14,479,604 $ 5,766,782 $ 1,631,389 $ 2,237,549 $ 329,824,304 $ 40,990,207
$ 295,581 $- $- $- $ 5,859,358 $ 34,443
3,023 110,403 (5,870) 1,540 (135,803) -
- - - - - 209,385
- - - (100,450) 5,083 43,263
18,320 - - 4,894 572,146 37,352
178,795 - - 10,982 1,117,640 10,252
(4,155,380) (559,788) 766,476 (274,862) (5,178,442) -
Business-Type Activities - Enterprise Funds
73
The notes to the financial statements are an integral part of this statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - TRUST AND AGENCY FUNDS
JUNE 30, 2011
Pension Trust
Funds Agency Funds
Assets
Cash and Investments $2,620,894 $5,447,251
Restricted Cash and Investments Held by Fiscal Agent - 1,149,754
Total Cash and Investments 2,620,894 6,597,005
Receivables:
Receivables for Investments Sold 20,276,912 -
Interest and Dividends Receivable 7,081,378 21,579
Other Receivables 8,451,234 243,053
Due from Other Governments - 398,722
Total Receivables 35,809,524 663,354
Investments, at fair value:
Short Term Investments 54,969,039 -
Domestic Equity 748,615,878 -
Corporate Bonds 255,746,925 -
International Equity 414,544,933 -
Emerging Market Equity 91,594,357 -
Government Bonds 328,446,185 -
Real Estate 198,154,805 -
Total Investments 2,092,072,122 -
Collateral Held for Securities Lent 324,087,249 -
Capital Assets, net of Accumulated Depreciation 101,266 -
Prepaid Expense 205,680 -
Total Assets 2,454,896,735 $7,260,359
Liabilities
Accrued Liabilities 54,917,754 $43,812
Collateral Held for Securities Lent 324,087,249 -
Deposits Held for Others - 7,216,547
Other Liabilities 2,303,652 -
Total Liabilities 381,308,655 $7,260,359
Net Assets
Net Assets Held in Trust for Benefits $ 2,073,588,080
74
The notes to the financial statements are an integral part of the statement.
CITY OF FRESNO, CALIFORNIA
STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - TRUST FUNDS
YEAR ENDED JUNE 30, 2011
Pension Trust
Additions Funds
Contributions:
Employer $ 27,611,747
System Members 12,579,255
Total Contributions 40,191,002
Investment Income:
Net Appreciation in Value of Investments 364,367,619
Interest 26,056,082
Dividends 23,896,068
Other Investment Related 93,870
Total Investment Income 414,413,639
Less Investment Expense (10,519,625)
Total Net Investment Income 403,894,014
Securities Lending Income:
Securities Lending Earnings 1,048,920
Less Securities Lending Expense (23,512)
Net Securities Lending Income 1,025,408
Total Additions 445,110,424
Deductions
Benefit Payments 92,044,110
Refund of Contributions 2,585,839
Administrative Expenses 2,109,391
Total Deductions 96,739,340
Net Increase 348,371,084
Net Assets Beginning 1,725,216,996
Net Assets Ending $ 2,073,588,080
75
2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Notes to Financial Statements
Notes toFinancial StatementsNote Page
1 Definition of Reporting Entity .............................................78
2 Summary of Significant Accounting Policies ......................80
3 Cash and Investments ........................................................99
4 Property Taxes ....................................................................114
5 Receivables ........................................................................114
6 Property, Plant and Equipment – Capital Assets ................116
7 Long-Term Liabilities ...........................................................120
8 Interfund Activity .................................................................137
9 Defeasance and Refunding of Long-Term Debt .................145
10 Risk Management Fund ......................................................146
11 Employee Benefit Programs ...............................................147
12 No-Commitment Debt ........................................................158
13 Commitments and Contingencies ......................................159
14 Securities Lending ..............................................................173
15 Other Information ................................................................176
16 Prior Period Adjustment.......................................................176
17 Subsequent Events .............................................................176
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 1. DEFINITION OF REPORTING ENTITY
The City of Fresno (City) is a political subdivision chartered by
the State of California and, as such, can exercise the powers
specified by the Constitution and laws of the State of California.
The City operates under its Charter and is governed by a
directly elected strong Mayor and a seven-member City
Council. The City Manager serves as the head of the
administrative branch of the City and is appointed by the Mayor.
As required by generally accepted
accounting principles (GAAP), these basic financial statements
present the financial status of the City and its component units,
entities for which the City is considered to be financially accountable.
Blended component units, although legally separate entities, are, in
substance, part of the City's operations, and so data from these units
are combined with data of the primary government.
These basic financial statements present the financial status of the
City and its component units, which are included in the City's reporting
entity because of the significance of their operational or financial relationships with the City.
As a government agency, the City is exempt from both federal income taxes and California State
franchise taxes.
Blended Component Units
Although the following component units are legally separate from the City (the Primary
Government), the component units have been "blended" into the City's basic financial statements
for financial reporting purposes because the governing boards are substantially the same as the
City, or because they provide services exclusively or almost exclusively for the benefit of the City
even though they do not provide services directly to the City. The City is financially accountable
for these units that are blended with the Primary Government because of their individual
governance or financial relationships to the City.
All potential component units were evaluated, resulting in inclusion in
the basic financial statements.
Redevelopment Agency of the City of Fresno: An independent public
entity responsible for the development and implementation of housing
and redevelopment programs and activities for the City of Fresno. The
Redevelopment Agency of the City of Fresno (RDA) was created in
1956. The City Council serves as the governing board of the RDA and
is responsible for its fiscal and administrative activities. The financial
activity of the RDA is included in the City's financial statements as the
RDA Debt Service and RDA Capital Projects funds. All lease
obligations between the City and the RDA have been eliminated in the financial statements.
Separate financial statements are prepared for the RDA and may be obtained from the
Redevelopment Agency Office at 2344 Tulare Street, Suite 200, Fresno, CA 93721-3604.
78
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Fresno Joint Powers Financing Authority: An independent public entity created in 1988. The
Authority acquires telecommunications equipment, office furniture,
streetlights, and constructs facilities and street improvements
through the issuance of limited obligation bonds, certificates of
participation and revenue bonds. The Authority currently is leasing
these assets to the City. The Authority’s governing board consists
of three board members appointed by the chief administrative
officer (the City Manager) and is responsible for its fiscal and
administrative decisions. The financial activity for the street
improvements is included in the Special Gas Tax Special Revenue
Fund. The financial activity for the office furniture and street lights
are included as part of a debt service fund entitled Financing
Authorities and Corporations Debt Service Fund. The financial activity for projects related to the
Lease Revenue Bonds is also included in the Financing Authorities and Corporations Debt
Service Fund. All lease obligations between the Authority and the City have been eliminated in
the financial statements. The Authority does not issue separate financial statements.
City of Fresno Fire and Police Retirement System: The System was established on July 1, 1955,
to provide benefits to the safety employees and retirees of the City of Fresno. The System is
maintained and governed by Articles 3 and 4 of Chapter 3 of the Fresno Municipal Code. The
System’s responsibilities include: Administration of the trust fund,
delivery of retirement, death and disability benefits to eligible
members, administration of programs, and general assistance
in retirement and related benefits. The governing board is
made up of two members appointed by the mayor, an elected
police member, an elected fire member and a Board appointed
member. The activity for the System is reflected within
Fiduciary Funds. Separate financial statements are prepared for
the Fire and Police Retirement System and may be obtained from the Retirement Office at 2828
Fresno Street, Fresno, CA 93721-3604.
City of Fresno Employees Retirement System: The System was established on June 1, 1939, to
provide benefits to the employees and retirees of the City of Fresno. The
System is governed by Article 5 of Chapter 3 of the City of Fresno
Municipal Code. The System’s responsibilities include: Administration of
the trust fund, delivery of retirement, disability and death benefits to eligible
members, administration of programs, and general assistance in
retirement and related benefits. The governing board is made up of two
mayor appointed members; two elected members and one board
appointed member. The activity for the System is reflected within Fiduciary
Funds. Separate financial statements are prepared for the Employees
Retirement System and may be obtained from the Retirement Office at
2828 Fresno Street, Fresno, CA 93721-3604.
City of Fresno Employee Health Care Plan: City of Fresno employees not
represented by the Stationary Engineers Local are covered by the Fresno
City Employees Health and Welfare Trusts which are self-insured trusts administered by an
outside third party administrator. The activity for the Trusts is reflected within Internal Service
Funds.
79
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Discretely Presented Component Unit
City of Fresno Cultural Arts Properties: A nonprofit public benefit corporation (an independent
public entity) created in 2010. The specific charitable and public purpose for which the
Corporation was organized is to benefit and support the City of Fresno and the Redevelopment
Agency and to lessen the burdens of the government of the City and the Agency by: (1)
purchasing, developing, financing, rehabilitating, and/or
demolishing vacant and blighted properties; (2) assisting the
City and the Agency in combating community blight and
deterioration in the City and its redevelopment areas and
contributing to the physical improvement of the City and its
redevelopment areas by redeveloping vacant or blighted
properties; and (3) acquiring, owning, operating, and leasing
property within a Low-Income Community (as defined in Section 45D(e)(1) of the Internal
Revenue Code) to community businesses, which will promote and support the social welfare of
the City.
The City of Fresno Cultural Arts Properties Corporation (COFCAP) was formed as part of a New
Market Tax Credits financing structure that was utilized by the City to assist in lessening a debt
burden to the City. The debt was a result of the City having to pay off the loan that it had
guaranteed on behalf of the Metropolitan Museum from United Security Bank. (See also Note 13
(f) for more information.)
COFCAP is a component unit due to it being a legally separate entity for which the City is
financially accountable through the appointment of the corporation’s board and the ability to
approve the corporation’s budget. COFCAP is discretely presented because it does not provide
services exclusively or almost exclusively to the City of Fresno. Through its charitable purpose
of owning and managing properties, it provides ongoing services to the citizens of the
community.
Separate financial statements are prepared for COFCAP and may be obtained from the City of
Fresno, Finance Department, 2600 Fresno Street, Suite 2156, Fresno, California 93721-3622.
COFCAP’s capital assets were purchased from the City of Fresno. In accordance with GASB
48, in the City’s financial statements, COFCAP’s capital assets have not been revalued, and
continue to be reported at the City’s carrying value at the date of sale plus additional
accumulated depreciation as appropriate.
Note 2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City have been prepared in conformity
with accounting principles generally accepted in the United States of
America as applied to governmental agencies. The Governmental
Accounting Standards Board is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles.
The more significant accounting policies of the City are described below.
80
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(a)Government-wide and Fund Financial Statements
The government-wide financial statements (i.e., the Statement of Net Assets and the Statement
of Activities) report information on all of the non-fiduciary activities of the primary government
and its component units. For the most part, the effect of inter-fund activity has been removed
from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are reported separately from business-type activities, which rely, to
a significant extent, on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given
function or segment is offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. Program revenues include (1) charges to
customers or applicants who purchase, use, or directly benefit from goods, services, or privileges
provided by a given function or segment and (2) grants and contributions that are restricted to
meeting the operational or capital requirements of a particular function or segment. Taxes and
other items, not properly included among program revenues, are reported instead as general
revenues.
The accounts of the City are organized on the basis of funds. A
fund is a separate accounting entity with a self-balancing set of
accounts. Each fund was established for the purpose of
accounting for specific activities in accordance with applicable
regulations, restrictions or limitations. Separate financial
statements are provided for governmental funds, proprietary
funds, and fiduciary funds, even though the latter are excluded
from the government-wide financial statements. Major individual
governmental funds and major individual enterprise funds are
reported as separate columns in the fund financial statements.
(b) Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide financial statements are reported using the economic
resources measurement focus and the accrual basis of accounting, as are
the proprietary fund and trust fund financial statements. Revenues are
recorded when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related cash flows. Property taxes are
recognized as revenues in the year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility
requirements have been met. Agency funds however, are unlike all other
types of funds, reporting only assets and liabilities. As such, they cannot
be said to have a measurement focus. They do however use the accrual
basis of accounting to recognize receivables and payables.
Governmental fund financial statements
are reported using the current financial
resources measurement focus and the modified accrual basis of
accounting. Revenues are recognized as soon as they are both
measurable and available. Revenues are considered to be
available when they are collectible within the current period or
soon enough thereafter to pay liabilities of the current period.
The City considers property tax revenues and other revenues to
81
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
be available if they are collected within 60 days of the end of the current fiscal period.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures related to vacation, sick leave,
claims and judgments, are recorded only when payment is due.
Property taxes, local taxes, licenses, interest, and other intergovernmental revenues associated
with the current fiscal period are all considered susceptible to accrual and so have been
recognized as revenues of the current fiscal period. All other revenue items are considered to be
measurable and available only when the City receives cash.
The City reports the following major governmental funds:
The General Fund is the City’s primary operating fund. It accounts
for all financial resources of the City except those required to be
accounted for in another fund.
The Grants Special Revenue Fund accounts for grants received
from federal, state, and other agencies, which are to be used for
various purposes identified within the confines of the individual
grant.
The Redevelopment Agency Debt Service Fund is used to
account for the debt service activity of those projects that have been
earmarked for redevelopment. The projects are financed with property tax increments and
bond proceeds.
The City reports the following major proprietary (enterprise) funds:
Water System Fund accounts for the construction, operation and maintenance of the
City's water distribution system. Revenues are derived from water service fees and
various installation charges.
Sewer System Fund accounts for the construction, operation and maintenance of the
City's sewer system. Revenues are derived from sewer service fees and various
installation charges.
Solid Waste Management Fund accounts for the operations of the City's solid waste
disposal service. Revenues are primarily derived from solid waste service fees.
Transit Fund accounts for the operation and maintenance of the City's mass
transportation service. Primary revenue sources are rider fares and Federal and State
operating grants.
Airports Fund accounts for the City's two airport operations. Revenues are primarily
derived from fees for airline operations out of the terminals.
Fresno Convention Center Fund accounts for the operation and maintenance of the
City's convention center. Revenues are primarily derived from fees charged for using the
facilities and General Fund support.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Stadium Fund accounts for the construction, operation and maintenance of the City’s
baseball stadium. Revenues are derived from the leasing of the facilities and General
Fund support.
Additionally, the City reports the following fund types:
Governmental Funds
Special Revenue Funds are used to account for the proceeds of specific revenue
sources that are restricted or committed to expenditure for specified purposes other than
debt service and capital projects.
Capital Projects Funds are used to account for and report financial resources that are
restricted, committed, or assigned to expenditure for capital outlays.
Debt Service Funds are used to account for and report financial resources that are
restricted, committed, or assigned to expenditure for principal and interest.
Proprietary Funds
Enterprise Funds account for operations that are financed and operated in a manner
similar to private business enterprises. Costs are financed or recovered primarily through
user charges.
Internal Service Funds account for the financing of goods or services provided by one
City department to another City department on a cost
reimbursement basis. The General Services Fund accounts
for the activities of the equipment maintenance services,
centralized printing and mailing services, centralized
telecommunications and information services, centralized
human resource functions and centralized accounting,
treasury and payroll functions. The Risk Management Fund
accounts for the City’s self-insurance, including provision for
losses on property, liability, workers’ compensation, and
unemployment compensation. The Billing and Collection Fund
accounts for the billing, collecting and servicing activities for
the Water, Sewer, Solid Waste, and Community Sanitation
funds.
The Employees Healthcare Plan accounts for the assets held on behalf of the City of
Fresno Employees’ Healthcare Plan for claim payments on behalf of qualified employees
and retirees. There is one plan; however, there is separate accounting for active
employees and retirees.
The Blue Collar Employees Healthcare Plan accounts for the
healthcare payments on behalf of qualified employees and
retirees of Local 39. There is one plan; however, there is
separate accounting for active employees and retirees.
Private-sector standards of accounting and financial reporting
issued prior to December 1, 1989, generally are followed in
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
both government-wide and proprietary fund financial statements to the extent that those
standards do not conflict with or contradict guidance of the Governmental Accounting
Standards Board (GASB). Governments also have the option of following subsequent
private-sector guidance for their business-type activities and enterprise funds, subject to
this same limitation. The City has elected not to follow subsequent private-sector
guidance.
In general, the effect of interfund activity has been eliminated from the government-wide
financial statements.
Proprietary funds distinguish operating revenues and expenses from non-operating items.
Operating revenues and expenses generally result from providing services in connection
with the fund’s principal ongoing operations. The principal operating revenues of the
City’s enterprise and internal service funds are charges for customer services, for sales
and for services. Operating expenses for enterprise funds and internal service funds
include the cost of services, administrative expenses, and depreciation on capital assets.
All revenues and expenses not meeting this definition are reported as non-operating
revenues and expenses.
Fiduciary Funds
Fiduciary funds are used to account for resources held for the benefit of parties outside
the government. Fiduciary funds are not reflected in the government-wide financial
statements because the resources of those funds are not available to support the City of
Fresno’s own programs. The accounting used for fiduciary funds is
much like that used for proprietary funds.
The Pension Trust Funds account for the assets held on behalf of
the City of Fresno Fire and Police Retirement System and the City
of Fresno Employees’ Retirement System for pension benefit
payments to qualified employees and retirees. Pension Trust
Funds are accounted for in essentially the same manner as the
proprietary funds.
Agency Funds account for assets held by the City in a custodial
capacity on behalf of individuals or other governmental units.
The City Departmental and Special Purpose Funds accounts for City-related trust activity,
such as payroll withholding and bid deposits. The Special Assessments District Funds
account for the receipts and disbursements for the debt service activity of bonded
assessment districts within the City. Agency Funds, being custodial in nature (assets
equal liabilities), do not involve the measurement of results of operations.
When both restricted and unrestricted resources are available for use, it is the City’s policy to use
restricted resources first, then unrestricted resources as they are needed.
(c) Budgetary Data
The budget of the City is a detailed operating plan, which identifies estimated costs and results in
relation to estimated revenues. The budget includes (1) the programs, projects, services and
activities to be provided during the fiscal year, (2) the estimated resources (inflows) and amounts
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
available for appropriation and (3) the estimated charges to appropriations. The budget
represents a process through which policy decisions are made, implemented, and controlled.
The City charter prohibits expending funds for which there is no legal appropriation.
Budget Control
The City operates under the Strong-Mayor form of government. Under the Strong-Mayor form of
government, the Mayor serves as the City’s Chief Executive Officer, appointing and overseeing
the City Manager, recommending legislation, and presenting the annual budget to the City
Council.
The budget of the City of Fresno, within the meaning and context of
Section No. 1206 of the Charter must be adopted by resolution by
the City Council:
As provided by Section 1206 of the Charter, any amendments to
the amounts appropriated for the purposes indicated at the
department/fund level shall be made only upon a motion to amend
the resolution adopted by the affirmative votes of at least five Council
members.
Administrative amendments within the same department/fund
level may be made without approval of Council within written
guidelines established by the Chief Administrative Officer.
For accounting and auditing convenience, appropriations for capital improvements may be
established in two or more different funds for the same capital project.
The objective of budgetary controls is to ensure compliance with legal provisions embodied in
the annual appropriated budget approved by the City Council. Activities of the General Fund and
Special Revenue Funds are included in the annual appropriated budget. Project-length financial
plans are adopted for certain capital project funds. The level of budgetary controls (the level at
which expenditures cannot legally exceed the appropriated amount) is maintained at the
department level by major expenditure category. Purchase orders that result
in an overrun (encumbrance exceeding available appropriations) of
department-level balances by object are not released until additional
appropriations are made available. Open encumbrances at June 30, are
reported as restricted, committed, or assigned fund balance in the
governmental funds balance sheet.
The City’s budget balancing efforts over the last three and a half years
have dominated the local headlines and been the focus of the majority of
the public dialogue. While the City has historically prepared and adopted
one budget per year, from FY 2009 through the adoption of the FY 2012
budget, the City will have gone through the development of more than
seven major annual, mid-year, and year-end budget plans in an effort to
respond quickly to the ever changing and declining local economic trends.
The City has had to repeatedly cut City staff all the while attempting to maintain public services.
As quickly as the City attempted to reduce expenditures according to a strategic vision toward
the future of the City, the economy has become more depressed and costs continue to rise.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Fund Structure
The budget document is organized to reflect the fund structure of the City’s finances. Fund
revenues and expenditures are rolled up to the various object levels by
division and department for presentation of information to the public.
Budget adoption and subsequent administration is carried out on a
fund basis.
Basis of Accounting
The City adopts an annual budget for the General Fund, Special
Revenue Funds, and Capital Projects Funds (except Redevelopment
Agency Capital Projects). These budgets are adopted on the cash
basis. Supplemental appropriations during the year must be approved
by the City Council. Budgeted amounts are reported as amended.
Encumbrances, which are commitments related to executory contracts
for goods or services, are recorded for budgetary control purposes in the Governmental Funds.
Encumbrance accounting is utilized for budgetary control and accountability and to facilitate cash
planning and control. Encumbrances outstanding at year-end are reported as part of restricted,
committed or assigned fund balance. At June 30, 2011, encumbrances totaled $597,609 in the
General Fund, $8,304,687 in Grants Special Revenue Fund and $3,607,573 in the Nonmajor
Governmental Funds.
Each of the funds in the City’s budget has a separate cash balance position. Restrictions and
Commitments represent those portions of fund equity not appropriable for expenditure or legally
segregated for a specific future use. Assigned fund balances represent tentative plans for future
use of financial resources. The cash reserve position is a significant factor evaluated by bond
rating agencies assessing the financial strength of an organization. Cash reserve amounts and
trends, represent the continued ability of a City to meet its obligations and facilitate the
requirements for a balanced budget.
Fund Equity/Deficit
The Stadium fund, the Parking Enterprise Fund, the Billing and Collection Internal Service Fund,
and the Risk Management Internal Service Fund all had deficit fund balances at June 30, 2011.
The deficit in the Stadium Fund ($4,185,547) is primarily the result of
the cost of operations, which includes non-cash depreciation
outpacing City sponsored event revenues. The City has engaged the
services of a third party Management Company to assist with the
Stadium (and Convention Center) operations.
As noted in the 2010 CAFR, as part of the 2011 mid-year budget
evaluation, in addition to reviewing the health of the City’s General
Fund, the Administration also conducted a comprehensive analysis
of all City funds that were being impacted by current economic
conditions. The funds focused on were those that faced continuing
deficits that were not the result of timing differences but rather were
the result of project cost overruns or lack of sufficient resources to pay
for debt service commitments. These funds had borrowed from the cash pool fully anticipating
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
that they would ultimately be able to reimburse the pool including accrued interest. As economic
conditions continued to falter the likelihood for short-term repayment or complete repayment
became more challenging.
As part of her strategy, the Mayor chose to utilize $9.3 million of the
Emergency Reserve to address specifically identified funds. The
second phase of her plan included funds that require workout plans
beyond FY 2011 and included General Fund resources which were
already considered in the Adopted Budget 5-Year Forecast and Non-
General Fund resources. The workout plans ranged from one to ten
years and rely on currently existing revenue streams ($2.6 million
from the General Fund and $9.8 from Non-General Fund sources).
The specifics of these long term plans are still being finalized as of
the date of these financial statements.
The last phase of the Mayor’s plan relates to the Parking fund. The Parking fund is unique in
that the General Fund began making an annual $2.5 million transfer to debt service starting in FY
2011 to keep the fund from going deeper into a deficit. Recovery of the exiting deficit is
dependent upon the final strategy to be approved by the City Council. There are several options
still being determined. It is anticipated that the details of the Parking Fund strategy as well as
more specific workout plans related to the second phase of the Mayor’s directive will be
developed during the course of the FY 2012 Budget.
Phase One of the Mayor’s “Fund Balance Recovery” strategy was to alleviate the 2010 deficit in
the Development Services fund ($568,543) with the use of emergency reserve funds during fiscal
year 2011. That action brought the Development Fund to a positive fund balance position and it
remains so as of June 30, 2011. The deficit in the Parking fund at June
30, 2011 ($13,233,554) was primarily the result of the cost of
operations which includes depreciation debt service outpacing usage
and the collection of user fees. The City continues to assess its
options regarding fund balance recovery, and Phase Three of the
Mayor’s strategy is to address the Parking fund deficit. The deficit in
Risk Management at June 30, 2011 ($80,532,239) was primarily due
to increases in the cost of services, claims and litigation costs. The
City continues to look for ways to reduce employee and litigation
related losses and costs as well as pursuing cost recovery efforts
where possible for the Risk Management fund, many of these
however are set by contractual Memorandum of Understanding
(MOU’s). The deficit in the Billing and Collection fund ($1,466,117) is
the result of reductions in budgeted revenues and interest income, and
cost increases also for contractual MOU’s. The City is closely monitoring this fund on a go
forward basis and is considering various strategies.
Revenue Estimation
Revenue estimates and the methodology for calculating the estimates vary depending on the
source of revenue. Considerable weight generally has been given to historical trends. This is
important because of the uniqueness of the Central Valley and the composition of the Fresno
economy, which differs from the state in general. As an example, the recession, which hit the
state in the late 1980’s, did not hit Fresno until the early 1990's and the recovery occurred in the
rest of California before it hit the Central Valley. The same holds true for the current economic
87
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
crisis. The City of Fresno began feeling the impacts of the current state and national financial
down turn much later and in some cases less so than many other communities.
But given the worldwide financial crisis, estimating revenues has become more difficult.
In the General Fund, sales tax revenues are the second largest revenue source. Historical
trends as well as paying close attention to the local economy are two of the primary keys for
projecting this revenue. Until the recent economic downturn, sales tax
had shown growth every year except one, 1992. However, beginning
in 2008 through 2010 sales tax declined annually. In 2011, sales tax
showed a slight increase over 2010.
Property tax is the largest revenue source in the General Fund. The
main source for projecting this revenue is information received from
the County. Again as in all budget revenue projections internal staff
relies heavily on historic trends as well as local developments. Once
again however, given the impacts of the global economy, trends are
not as easy to identify if they exist anymore.
Budget Administration
The budget establishes appropriation and expenditure levels. Expenditures may be below
budgeted amounts at year-end, due to unanticipated savings in the budget development. The
existence of a particular appropriation in the budget does not automatically mean funds are
expended. Because of the time span between preparing the budget, subsequent adoption by the
governing body, as well as rapidly changing economic factors, each expenditure is reviewed
prior to any disbursement. These expenditure review procedures assure compliance with City
requirements and provide some degree of flexibility for modifying programs to meet changing
needs and priorities.
(d)Implementation of New Accounting Pronouncements
(i) Governmental Accounting Standards Board Statement
No. 54
On March 11, 2009, the Governmental Accounting Standards
Board (GASB) issued Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions. The
objective of this Statement is to enhance the usefulness of fund
balance information by providing clearer fund balance
classifications that can be more consistently applied and by
clarifying the existing governmental fund type definitions. This
Statement establishes fund balance classifications that comprise
a hierarchy based primarily on the extent to which a government
is bound to observe constraints imposed upon the use of the
resources reported in governmental funds. This statement provides for identifying
non-spendable amounts, such as fund balance associated with inventories and
provides for additional classifications such as restricted, committed, assigned, and
unassigned based on the relative strength of the constraints that control how amounts
can be spent.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Governments are also required to classify and report amounts in the appropriate fund
balance classification by applying their accounting policies that determine whether
restricted, committed, assigned, and unassigned amounts are considered to have
been spent. This Statement also provides guidance for classifying stabilization
amounts on the face of the balance sheet and requires disclosure of certain
information about stabilization arrangements in the notes to the financial statements.
The City implemented Statement No. 54 in FY 2011. The effects of the standard can
be seen in the Governmental Funds balance sheet with additional disclosure in Note
2(p) Fund Equity on page 97.
(ii) Governmental Accounting Standards Board Statement No. 59
In June 2010, the GASB issued Statement No. 59, Financial Instruments Omnibus.
The objective of this Statement is to update and improve existing standards regarding
financial reporting and disclosure requirements of certain financial instruments and
external investment pools for which significant issues have been identified in practice.
This Statement provides for the following amendments:
National Council on Governmental Accounting Statement 4, Accounting and
Financial Reporting Principles for Claims and Judgments and Compensated
Absences, is updated to be consistent with the amendments to GASB
Statement No. 53, Accounting and Financial Reporting for Derivative
Instruments, regarding certain financial guarantees.
Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and
Note Disclosures for Defined Contribution Plans, and No. 43, Financial
Reporting for Postemployment Benefit Plans Other Than Pension Plans, are
amended to remove the fair value exemption for unallocated insurance
contracts. The effect of this amendment is that investments in unallocated
insurance contracts should be reported as interest-earning investment
contracts according to the provisions of paragraph 8 of Statement No. 31,
Accounting and Financial Reporting for Certain Investments and for External
Investment Pools.
Statement 31, is clarified to indicate that a 2a7-like pool, as described in
Statement 31, is an external investment pool that operates in conformity with
the Securities and Exchange Commission’s (SEC) Rule 2a7 as promulgated
under the Investment Company Act of 1940, as amended.
Statement No. 40, Deposit and Investment Risk
Disclosures, is amended to indicate that interest rate
risk information should be disclosed only for debt
investment pools—such as bond mutual funds and
external bond investment pools—that do not meet the
requirements to be reported as a 2a7-like pool.
Statement 53 is amended to: – Clarify that the net
settlement characteristic of Statement 53 that defines a
derivative instrument is not met by a contract provision
for a penalty payment for nonperformance.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Provide that financial guarantee contracts included in the scope of Statement
53 are limited to financial guarantee contracts that are considered to be
investment derivative instruments entered into primarily for the purpose of
obtaining income or profit.
Clarify that certain contracts based on specific volumes of sales or service
revenues are excluded from the scope of Statement 53.
Provide that one of the “leveraged yield” criteria of Statement 53 is met if the
initial rate of return on the companion instrument has the potential for at least
a doubled yield.
The City implemented Statement No. 59 in FY 2011. The implementation had no
effect on the City’s financial statements.
(e) Pronouncements issued but not yet adopted
The City is assessing what effect, if any, the implementation of the following standards will
have on the City’s financial statements.
(i) Governmental Accounting Standards Board Statement No. 60
In November 2010, the Governmental Accounting Standards Board (GASB) issued
Statement No. 60, Accounting and Financial
Reporting for Service Concession Arrangements.
The objective of this Statement is to improve
financial reporting by addressing issues related to
service concession arrangements (SCAs), which
are a type of public-private or public-public
partnership. As used in this Statement, an SCA is
an arrangement between a transferor (a
government) and an operator (governmental or
nongovernmental entity) in which (1) the transferor
conveys to an operator the right and related
obligation to provide services through the use of infrastructure or another public asset
(a “facility”) in exchange for significant consideration and (2) the operator collects and
is compensated by fees from third parties.
This Statement applies only to those arrangements in which specific criteria
determining whether a transferor has control over the facility are met.
This Statement also provides guidance for governments that are operators in an SCA.
For revenue sharing arrangements, this Statement requires governmental operators
to report all revenues and expenses. A transferor reports its portion of the shared
revenues.
This Statement requires disclosures about an SCA including a general description of
the arrangement and information about the associated assets, liabilities, and deferred
inflows, the rights granted and retained, and guarantees and commitments.
90
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The requirements of this Statement are effective for financial statements for periods
beginning after December 15, 2011. The provisions of this Statement generally are
required to be applied retroactively for all periods presented.
(ii) Governmental Accounting Standards Board Statement No. 61
In November 2010, the Governmental Accounting Standards Board (GASB) issued
Statement No. 61, The Financial Reporting Entity: Omnibus – an amendment of
GASB Statements No. 14 and No. 34.The objective of this Statement is to improve
financial reporting for a governmental financial reporting entity. The requirements of
Statement No. 14, The Financial Reporting Entity, and the related financial reporting
requirements of Statement No. 34, Basic Financial
Statements—and Management’s Discussion and
Analysis—for State and Local Governments, were
amended to better meet user needs and to address
reporting entity issues that have arisen since the
issuance of those Statements.
This Statement modifies certain requirements for
inclusion of component units in the financial reporting
entity. It also amends the criteria for reporting component units as if they were part of
the primary government (that is, blending) in certain circumstances. The blending
provisions are amended to clarify that funds of a blended component unit have the
same financial reporting requirements as a fund of the primary government. Lastly,
additional reporting guidance is provided for blending a component unit if the primary
government is a business-type activity that uses a single column presentation for
financial reporting.
This Statement also clarifies the reporting of equity interests in legally separate
organizations. It requires a primary government to report its equity interest in a
component unit as an asset.
The provisions of this Statement are effective for financial statements for periods
beginning after June 15, 2012. Earlier application is encouraged.
(iii) Governmental Accounting Standards Board Statement No.
62
In December 2010, the Governmental Accounting Standards
Board (GASB) issued Statement No. 62,Codification of
Accounting and Financial Reporting Guidance Contained in Pre-
November 30, 1989 FASB and AICPA Pronouncements.The
objective of this Statement is to incorporate into the GASB’s
authoritative literature certain accounting and financial reporting
guidance that is included in the following pronouncements
issued on or before November 30, 1989, which does not conflict
with or contradict GASB pronouncements:
1. Financial Accounting Standards Board (FASB) Statements and
Interpretations
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
2. Accounting Principles Board Opinions
3. Accounting Research Bulletins of the American Institute of Certified Public
Accountants’ (AICPA) Committee on Accounting Procedure.
Hereinafter, these pronouncements collectively are referred to as the “FASB and
AICPA pronouncements.”
This Statement also supersedes Statement No. 20, Accounting and Financial
Reporting for Proprietary Funds and Other Governmental Entities That Use
Proprietary Fund Accounting, thereby eliminating the election provided in paragraph 7
of that Statement for enterprise funds and business-type activities to apply post-
November 30, 1989 FASB Statements and Interpretations that do not conflict with or
contradict GASB pronouncements. However, those entities can continue to apply, as
other accounting literature, post-November 30, 1989 FASB pronouncements that do
not conflict with or contradict GASB pronouncements, including this Statement.
The requirements of this Statement are effective for financial statements for periods
beginning after December 15, 2011. Earlier application is encouraged. The provisions
of this Statement generally are required to be applied retroactively for all periods
presented.
(iv) Governmental Accounting Standards Board Statement No. 63
In June 2011, the Governmental Accounting Standards
Board (GASB) issued Statement No. 63,Financial
Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources, and Net Position.This Statement
provides financial reporting guidance for deferred outflows
of resources and deferred inflows of resources. Concepts
Statement No. 4, Elements of Financial Statements,
introduced and defined those elements as a consumption
of net assets by the government that is applicable to a
future reporting period, and an acquisition of net assets by
the government that is applicable to a future reporting
period, respectively. Previous financial reporting standards
do not include guidance for reporting those financial
statement elements, which are distinct from assets and liabilities.
Concepts Statement 4 also identifies net position as the residual of all other elements
presented in a statement of financial position. This Statement
amends the net asset reporting requirements in Statement No.
34, Basic Financial Statements—and Management’s
Discussion and Analysis—for State and Local Governments,
and other pronouncements by incorporating deferred outflows
of resources and deferred inflows of resources into the
definitions of the required components of the residual measure
and by renaming that measure as net position, rather than net
assets.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The provisions of this Statement are effective for financial statements for periods
beginning after December 15, 2011. Earlier application is encouraged.
(v) Governmental Accounting Standards Board Statement No. 64
In June 2011, the Governmental Accounting Standards Board (GASB) issued
Statement No. 64,Derivative Instruments: Application of Hedge Accounting
Termination Provisions – an amendment of GASB Statement No. 53.The objective
of this Statement is to clarify whether an effective hedging relationship continues after
the replacement of a swap counterparty or a swap counterparty’s credit support
provider. This Statement sets forth criteria that establish when the effective hedging
relationship continues and hedge accounting should continue to be applied.
The provisions of this Statement are effective for financial statements for periods
beginning after June 15, 2011. Earlier application is encouraged.
Financial Statement Elements
(f) Deposits and Investments
Investment in the Treasurer’s Pool
The City Controller/Treasurer invests on behalf of most funds of
the City in accordance with the City’s investment policy and the
California State Government Code. The City Treasurer, who
reports on a monthly basis to the City Council, manages the
Treasurer’s Pool.
The Treasurer’s investment pool consists of two components:
1) pooled deposits and investments and 2) dedicated
investment funds. The dedicated investment funds represent
restricted funds and relate to bond issuance of Enterprise
Funds. In addition to the Treasurer’s investment pool, the City
has other funds that are held by trustees. These funds are related to the issuance of bonds and
certain loan programs of the City.
Investment Valuation
The City reports their investments at fair value in accordance with
Governmental Accounting Standards Board Statement No. 31, Accounting
and Financial Reporting for Certain Investments and for External
Investment Pools. In addition, changes in fair value are reflected in the
revenue of the period in which they occur.
Statutes authorize the City to invest in obligations of the U.S. Treasury,
agencies and instrumentalities, commercial paper, bankers' acceptances,
repurchase agreements, money market funds and the State Treasurer’s
investment pool. The City's Pension Trust Funds are authorized to invest
in every kind of property or investment which persons of prudence,
discretion and intelligence acquire for their own account.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Except as noted in the following paragraph, investments are comprised of obligations of the U.S.
Treasury, agencies and instrumentalities, cash, time certificates of deposit, mutual funds,
bankers' acceptances, money market accounts and deposits in the State of California Local
Agency Investment Fund, and are stated at fair value. The Pension Trust Funds have real estate
and other investments as well.
Highly liquid money market investments, guaranteed investment contracts, and other
investments with maturities of one year or less at time of purchase are stated at amortized cost.
All other investments are stated at fair value. Market value is used as fair value for those
securities for which market quotations are readily available. The fair value of real estate
investments is based on independent appraisals. Investments that do
not have an established market are reported at estimated fair
values.
Investment Income
Cash balances of each of the City’s funds, except for certain Trust
and Agency Funds and other restricted accounts, are pooled and
invested by the City. Income from pooled investments is allocated
to the individual funds based on the fund participant’s average daily
cash balance at the month end in relation to total pooled
investments. The City’s policy is to charge interest to those funds that
have a negative average daily cash balance at month end. Deficit cash balances are
reclassified as due to other funds and funded by Enterprise Funds or related operating funds.
(g)Loans Receivable
For the purposes of the Fund Financial Statements, Special Revenue and Capital Project Funds
expenditures relating to long-term loans arising from loan subsidy programs are recorded as
loans receivable net of an estimated allowance for potentially
uncollectible loans. In some instances amounts due from external
participants are recorded with an offset to a deferred credit account.
The balance of long-term loans receivable includes loans that may be
forgiven if certain terms and conditions of the loans are met.
Financing Authorities and Corporations also reflect a note due from
FBB Investment Fund, LLC in connection with the new market tax
credit loans recorded by the City’s discretely presented component
unit, City of Fresno Cultural Arts Properties Corporation. The note is
recorded for the full amount and the entire outstanding principal
balance plus any unpaid interest is due on the maturity date, March 1,
2040. For purposes of the Government-wide Financial Statements,
long-term loans are not offset by deferred credit accounts.
(h)Inventories
Inventories recorded in the proprietary funds primarily consist of construction materials and
maintenance supplies. Generally, proprietary funds value inventory at cost or average cost and
expense supply inventory as it is consumed. This is referred to as the consumption method of
inventory accounting. The City uses the purchases method of accounting for inventories in
governmental fund types whereby inventory items are considered expenditures when purchased
and are not reported in the Statement of Net Assets.
94
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(i) Redevelopment Agency Property Held for Resale
Property of the RDA is held for resale and is recorded as an asset at the lower of estimated cost
or estimated conveyance value. Estimated conveyance value is management’s estimate of net
realizable value of a property based on current intended use.
(j)Restricted Assets
Restricted cash from the City’s bonds, as well as certain resources
set aside for their repayment, are classified as restricted assets on
the Statement of Net Assets because they are maintained in
separate bank accounts or tracked separately in the City Treasury
group of accounts. Use of the proceeds is limited by applicable
bond covenants and resolutions. Restricted assets account for the
principal and interest amounts accumulated to pay debt service,
unspent bond proceeds and amounts restricted for future capital
projects. Restricted grants and interest receivable represent cash
and receivables contributed for capital projects and the associated
interest.
(k) Capital Assets
Capital assets, which include land, buildings and improvements,
machinery and equipment, and infrastructure assets, are reported in
the applicable governmental activity, business-type activity, or
Discretely Presented Unit columns in the Government-wide Financial
Statements. Capital assets are defined as assets with an initial
individual cost of more than $5,000 (for land, building improvements
and infrastructure) or $2,000 (for machinery and equipment)
including bundled purchases, and an
estimated useful life in excess of two
years. Such assets are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated capital assets are
recorded at estimated fair market value at the date of donation.
Capital outlay is recorded as expenditures of the General, Special
Revenue, and Capital Projects Funds and as assets in the
Government-wide Financial Statements to the extent the City’s
capitalization threshold is met. Interest incurred during the
construction phase of capital assets of business-type activities is
included as part of the capitalized value of the assets constructed.
Capitalized interest totaled $13,476,413 in fiscal year 2011.
Amortization of assets acquired under capital lease is included in
depreciation and amortization.
Buildings and improvements, infrastructure, and machinery and equipment of the primary
government, as well as the component units, are depreciated using the straight-line method over
the following estimated used lives:
95
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
A s s e t s Y e a r s
Buildings and Improvements 20 to 50
Infrastructure 15 to 30
Machinery and Equipment 3 to 10
Works of art, historical treasures and zoological animals held for public exhibition, education, or
research in furtherance of public service, rather than financial gain, are not capitalized. These
items are protected, kept unencumbered, cared for and preserved by the City. It is the City’s
policy to utilize proceeds from the sale of these items for the acquisition of other items for
collection and display.
Capital Leases
Property, plant and equipment include the following property held under lease obligation at June
30, 2011:
G o v e r nm e nt a l
A c t i v i t i e s
Building and Improvements $ 2,855,000
Less: Accumulated Depreciation (1,459,500)
Net Building and Improvements $ 1,395,500
Machinery and Equipment $ 16,849,148
Less: Accumulated Depreciation (13,586,072)
Net Machinery and Equipment $ 3,263,076
(l) Bond Issuance Costs and Discounts
In the Government-wide Financial Statements and the
proprietary fund types in the Fund Financial Statements, long-
term debt and other long-term obligations are reported as
liabilities in the applicable governmental activities, business-
type activities, or proprietary fund Statement of Net Assets.
Bond premiums and discounts are deferred and amortized over
the life of the bonds using the effective interest method. Bonds
payable are reported net of the applicable bond premium or
discount. Bond issuance costs are reported as deferred
charges and amortized over the term of the related debt.
(m) Refunding of Debt
Gains or losses occurring from advance refunding are deferred and amortized into expense.
(n) Deferred and Unearned Revenues
Deferred and unearned revenues arise when resources are received by the City before it has a
legal claim to them (i.e., the City bills certain fixed rate services in advance; amounts billed but
not yet earned are deferred and amortized over the service period). Deferred revenues also
96
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
arise in governmental funds when potential revenue does not meet both the “measurable” and
“available” criteria for recognition in the current period.
(o) Interfund Transfers
Interfund transfers are generally recorded as transfers in (out)
except for certain types of transactions that are described below.
(1) Charges for services are recorded as revenues of the
performing fund and expenditures of the requesting
fund. Unbilled costs are recognized as an asset of the
performing fund at the end of the fiscal year.
(2) Reimbursements for expenditures, initially made by one
fund, which are properly applicable to another fund, are recorded as expenditures
in the reimbursing fund and as a reduction of expenditures in the fund that is
reimbursed.
(p) Fund Equity
In the fund financial statements, fund balances of the governmental funds are reported in a
hierarchy of classifications based on the extent to which the City is bound to honor constraints on
the specific purposes for which the amounts in the funds can be spent. Governmental fund
balance classifications consist of the following:
Nonspendable – Includes amounts that are either 1) not in spendable form or 2) are
legally or contractually required to be maintained intact. Not in spendable form includes
items that are not expected to be converted to cash such as inventories, prepaid items
and certain long-term receivables.
Restricted – Includes amounts which have constraints placed on the use of the resources.
The constraints are either externally imposed by creditors, grantors, contributors, or laws
or regulations of other governments or are imposed by law or enabling legislation of the
government itself and which are legally enforceable.
Committed – Includes amounts that can only be used for specific purposes pursuant to a
formal action of the City’s highest level of decision-making authority, resolution or
ordinance passed by the City Council and signed by the Mayor. Commitments may be
removed or changed only by the City taking the same formal action which imposed the
constraint.
Assigned – Includes amounts that are not classified as non-spendable, restricted, or
committed but which are intended by the City to be used for specific purposes. Intent
may be expressed by legislation or action of the governing body itself or the authority to
assign amounts for specific purposes may be delegated.
Unassigned – Is the residual classification for the General Fund and includes all amounts
not reported as non-spendable, restricted, committed or assigned. The General Fund
97
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
may report either positive or negative unassigned fund balance, and unassigned amounts
are available for any purpose. Other governmental funds may report only negative
unassigned fund balances if expenditures incurred for specific purposes exceeded
amounts restricted, committed or assigned for those purposes.
When multiple classifications of resources are available for use, it is the City’s policy to use
resources in the order of restricted, committed, assigned, and unassigned.
Fund Balances of the governmental funds at June 30, 2011 consist of the following:
Grants Redevelopment Other Total
General Special Revenue Agency, Debt Governmental Governmental
Fund Fund Service Fund Funds Funds
Fund Balances:
Nonspendable:
Long Term Receivables 16,828,650 - - - 16,828,650
Restricted:
Debt Service - 283 6,646,514 13,675,151 20,321,948
CDBG and Home Loans - 36,133,630 - - 36,133,630
Transportation and Streets - - - 7,246,312 7,246,312
Forfeitures - - - 1,555,976 1,555,976
Fresno Revitalization - - - 54,289 54,289
Police & Fire Grants - 432,558 - - 432,558
Parks Grants - 140,000 - - 140,000
Streets and Traffic Grants - 4,150,776 - - 4,150,776
Housing Grants - 517,921 - - 517,921
Planning Grants - 155,901 - - 155,901
CDBG Grants - 400,234 - - 400,234
Impact Fees - - - 16,153,203 16,153,203
Special Assessment Projects - - - 9,088,091 9,088,091
Redevelopment Projects - - - 46,863,526 46,863,526
Committed:
Emergency Reserve 1,443,686 - - - 1,443,686
Assigned:
Cable PEG, Nonprofit Media JPA - - - 176,133 176,133
Public Works Projects - - - 8,685,594 8,685,594
Public Protection Projects - - - 4,600,615 4,600,615
Parks Projects - - - 5,338,589 5,338,589
Redevelopment Projects - - - 13,021,490 13,021,490
Unassigned (64,274) (14,272,359) - - (14,336,633)
Total Fund Balances $ 18,208,062 $ 27,658,944 $ 6,646,514 $ 126,458,969 $ 178,972,489
(q) Net Assets
Net assets represent the difference between assets and liabilities in
the government-wide and proprietary fund statement of net assets.
Net assets invested in capital assets, net of related debt, consist of
capital assets, net of accumulated depreciation, reduced by the
outstanding balances of any borrowings used for the acquisition,
construction or improvement of those assets. Net assets are
reported as restricted when there are limitations imposed on their
use either through the enabling legislation adopted by the City or
through external restrictions imposed by creditors, grantors or laws
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
or regulations of other governments. Restricted resources are used first to fund appropriations.
Unrestricted net asset represent net assets which are not restricted.
(r)Cash Flows
Statements of cash flows are presented for proprietary fund types. Cash and cash equivalents
include all unrestricted and restricted highly liquid investments with original purchase maturities
of three months or less. Pooled cash and investments in the City’s Treasury represent monies
in a cash management pool and such accounts are similar in nature to demand deposits.
(s) Regulatory Assets and Liabilities
At June 30, 2011, the Statement of Net Assets, Business-Type
Activities, reflects approximately $36.6 million in regulatory assets
related to the CVP Water Settlement, which will continue to have an
impact on water rates which are to be charged to customers over the
next 25 years. The settlement for past deficiencies was negotiated
between the City and the United States Bureau of Reclamation
(USBR). Under FAS 71, regulatory assets represent future revenue
associated with certain costs (CVP Settlement) that will be recovered
from customers through the ratemaking process.
Additional information related to the Settlement and rate setting can be found in Footnote 13 –
Commitments and Contingencies. If all or a portion of the CVP Settlement Liability is reduced
due to early payment to the USBR, the corresponding asset will also be evaluated to determine
whether the regulatory asset also requires accelerated amortization or write-off.
Correspondingly, if the rate recovery is over a period other than 25 years currently anticipated,
the amortization period will also be adjusted.
(t) Estimates
The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.
Note 3.CASH AND INVESTMENTS
The City’s cash and investments are invested pursuant to investment policy guidelines
established by the City Controller/Treasurer, subject to review by the City Council. The
objectives of the investment policy are preservation of capital,
liquidity, and yield. The policy addresses the soundness of
financial institutions in which the City will deposit funds, types of
investment instruments as permitted by the California Government
Code, and the percentage of the portfolio that may be invested in
certain instruments with longer terms to maturity.
The City maintains a cash and investment pool available for use by
all funds. Each fund type's portion of this pool is displayed on the
financial statements as "Cash and Investments". In addition, certain
funds have investments with trustees related to debt issues.
99
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The following is a summary of cash, deposits and investments at June 30, 2011.
T o t a l
Cash and Investments $104,498,466 $ 128,198,328 $ 8,068,145 $ 240,764,939 $ 347,942
Restricted Cash and Investments 14,753,033 295,447,834 1,149,754 311,350,621 -
Pension Trust Investments at fair value -- 2,092,072,122 2,092,072,122 -
Collateral Held for Securities Lent -- 324,087,249 324,087,249 -
T o t a l $119,251,499 $ 423,646,162 $ 2,425,377,270 $ 2,968,274,931 $ 347,942
Primary Government
G o v e r n m e n t a l
A c t i v i t i e s
Component
Unit
B u s i n e s s-T y p e
A c t i vi t i e s
Fi d u c i a r y
Fu n d s
Cash and Deposits
At year-end, the City's bank balance was $32,678,429. The recorded balance reflected in the
June 30, 2011 financial statements was $22,912,826.
Cash, Deposits and Investments
Cash includes amounts in demand and time deposits. Investments
are reported in the accompanying financial statements at fair value,
except for certain certificates of deposit and investment contracts that
are reported at cost because they are not transferable and they have
terms that are not affected by changes in market interest rates.
Changes in fair value that occur during a fiscal year are recognized
as income from property and investments reported for that fiscal
year. Income from property and investments includes interest
earnings; changes in fair value; any gains or losses realized upon the
liquidation, maturity, or sales of investments; property rentals and the sale of City owned
property.
The City pools cash and investments of all funds, except for assets held by fiscal agents. Each
fund's share in this pool is displayed in the accompanying financial statements as cash and
investments. Investment income earned by the pooled investments is allocated to the various
funds on a monthly basis, based on each fund's daily cash balance. Interest payments are paid
to the various funds also on a monthly basis. Restricted cash and investments represent
amounts that are restricted under the terms of debt agreement.
Investments Authorized by the California Government Code and the City’s Investment Policy
The City maintains a formal, investment policy, which is adopted annually by the City Council. All
investments held in the Treasurer's Pool are consistent with the City's investment policy
objectives of safety of principal, adequacy of liquidity, and achievement of an average market
rate of return. The table below identifies the investment types that are authorized for the City by
the California Government Code or the City’s investment policy, where more restrictive. The
City’s maximum percent limit of portfolio for government sponsored enterprises agency notes is
70 percent versus 100% for California Government Code. The table identifies the investment
type, the maximum length of time to maturity for each investment, the maximum percentage of
the portfolio that can be invested in each type of security and the maximum amount of the
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
portfolio that can be invested in any single issuer of investments. The table does not address
investments of debt proceeds held by bond trustees that are governed by the provisions of debt
agreements of the City rather than the general provisions of the California Government Code or
the City’s investment policy.
Maximum Maximum % Limit
Maximum % Limit Of Of Portfolio Per
Authorized Investments Maturity Portfolio Single Issuer
City of Fresno Debt 5 Years 100% 100%
U.S. Treasuries 5 Years 100% 100%
California Debt 5 Years 100% 100%
Other 49 States Debt 5 Years 100% 100%
Cal Local Agency Debt 5 Years 100% 100%
Government Sponsored Enterprises Agency Notes 5 Years 70% 50%
Banker’s Acceptances 180 Days 40% 30%
Commercial Paper 270 Days 25% 25%
Negotiable CD’s 5 Years 30% 30%
Time Deposits 5 Years 100% 100%
Shares of Section 6509.7 JPA’s N/A 100% 100%
GC 53601.8 CD’s Until 1/1/2012 30% 30%
Repurchase Agmnts 1 Year 100% 100%
Reverse Repurchase Agmnts 92 Days 20% N/A
Securities Lending Agmnts 92 Days 20% N/A
Medium-Term Notes 5 Years 30% 20%
Mutual Funds N/A 20% 10%
Money Market Funds N/A 20% 20%
Mortgage/Asset Backed Debt 5 Years 20% 20%
State Local Agency Investment Fund N/A 100% 100%
Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees is governed by provisions of the debt
agreements, rather than the general provisions of the California Government Code or the City’s
investment policy. Investments held outside the Treasurer's Pool consist mainly of required
reserve funds for various bond issues. They are held by trustees, and are not available for the
City's general expenditures.
Investment agreements are used for the investments of bond proceeds in accordance with the
permitted investment provisions of the specific bond indentures which are prepared in
accordance with numerous safeguards to reduce the risk associated with a provider’s ability to
meet its contractual obligations.
Investment Risk
The City invests in no derivatives other than structured (step-up) notes,
which guarantee coupon payments. These are minimal risk instruments.
All investments are held by a third-party custodian in the City’s name.
As discussed under interest rate risk on page 103, this is the risk that
changes in market interest rates will adversely affect the fair value of an
investment in the market in which it is traded. Interest rate risk for the
101
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Treasurer’s Pool and for investments with trustees is disclosed in the following table.
As of June 30, 2011, the City had the following cash and investments in its portfolio:
T re a su re r’s P o o l Fair Value
Less than
1 Year
1 to 5
Years
5 to 10
Years
More than
10 Years
Cash Accounts $ 32,678,429
T re a su re r’s P o o l I n v e s t me n t s
U.S. Government Agencies:
Federal Farm Credit Bank 39,908,000 $ - $ 39,908,000 $ - $ -
Federal Home Loan Bank 40,853,350 - 40,853,350 - -
Federal Home Loan Mortgage Corporation 23,759,544 - 23,759,544 - -
Federal National Mortgage Association 50,707,120 - 50,707,120 - -
Subtotal of U.S. Government Agencies 155,228,014 - 155,228,014 - -
Medium Term Corporate Notes 24,949,550 - 24,949,550 - -
State Local Agency Investment Fund 50,078,823 50,078,823 - - -
Time Deposits 15,023,880 15,023,880 - - -
Money Market Deposit 50,024,446 50,024,446 - - -
Money Market Funds 58,573,064 58,573,064 - - -
T o t a l T re a su re r’s Po o l 386,556,206 $ 173,700,213 $ 180,177,564 $ - $ -
I n v e s t me n t s H e ld Ou t sid e t h e T re a su re r’s Po o l
Debt Service Funds/Bond Proceeds:
Guaranteed Investment Contracts 89,742,322 $ - $ 75,994,978 $ - $ 13,747,344
Money Market Mutual Funds 57,637,627 57,637,627 - - -
Repurchase Agreement 899,228 - - 899,228 -
U.S. Treasury Securities 27,045,780 27,045,780 - - -
$ 84,683,407 $ 75,994,978 $ 899,228 $ 13,747,344
Other Deposits 699,475
Outstanding Checks (10,993,402)
Deposits in Transit 528,324
Retirement Assets (See Retirement CAFR) 2,416,159,371
T o t a l P rima ry Go v e rn me n t 2,968,274,931
Component Unit Cash Accounts 347,942
T o t a l Ca sh a n d I n v e st me n t s $ 2,968,622,873
Investment Maturities
Deposit and Investment Risk
The risk disclosures below apply to the City's internal investment pool and deposits as well as
investments held by trustees for debt service funds or bond proceeds. Portfolio investments are
exposed to four main types of risk: concentration, interest rate, default and custodial risk.
Deposits are exposed primarily to custodial credit risk.
Concentration of Credit Risk
The investment policy of the City contains the following limitations on
the amount that can be invested in any one issuer which is more
restrictive than those stipulated by the California Government Code.
While the State has no limit on the percentage of the Portfolio that
can be invested in a single U.S. Government Agency Security, the
City’s Investment Policy limits investment in any one issuer to 50% of
the Portfolio. Also while the State limits investments to 30% of the
Portfolio for any single issuer of Medium Term Notes, the City's
102
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Investment Policy limits investments to 20% of the Portfolio invested in any single issuer.
Investments in any one issuer (other than U.S. Treasury securities, money market funds, and
external investment pools) that represent 5% or more of the total Treasurer’s Pool investments or
investments with trustees are as follows:
Treasurer's Pool Investments
Issuer Investment Type Reported Amount
General Electric Capital Corporation Note Medium-Term Corporate Notes $ 19,978,800 5.17%
Federal Farm Credit Bank U.S. Government Agency Securities 39,908,000 10.32%
Federal Home Loan Bank U.S. Government Agency Securities 40,853,350 10.57%
Federal Home Loan Mortgage Corporation (FHLMC) U.S. Government Agency Securities 23,759,544 6.15%
Federal National Mortgage Association (FNMA) U.S. Government Agency Securities 50,707,120 13.12%
$ 175,206,814 45.33%
Investments with Trustees
FSA Capital Management Services, LLC Guaranteed Investment Contract 13,747,344 7.84%
Credit Agricole Corporate & Investment Bank Guaranteed Investment Contract 75,994,978 43.35%
$89,742,322 51.19%
Percent of
Total
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will
adversely affect the fair value of an investment. Generally, the longer the
maturity of an investment, the greater will be the sensitivity of its fair value
to changes in market interest rates. One of the ways that the City manages
its exposure to interest rate risk is by purchasing a combination of shorter
term and longer term investments and by timing cash flows from maturities
so that a portion of the portfolio is maturing or coming close to maturity
evenly over time as necessary to provide the cash flow and liquidity needed
for operations. The City monitors the interest rate risk inherent in its
portfolio by measuring the weighted average maturity of its portfolio. The
Investment Policy limits the weighted average maturity of the Portfolio to
three (3) years, except for debt agreements held by trustees which are
governed by the indentures and may be longer.
The City's investments (including investments held by bond trustees) include the following
investments that are highly sensitive to interest rate fluctuations (to a greater degree than
already indicated in the information provided above):
Highly Sensitive Investments
Maturity Date Maturity Value
Fair Value at
Year End
FNMA – STEP UP NOTE 08/25/2015 $ 5,000,000 $ 5,011,250
FNMA – STEP UP NOTE 09/29/2015 5,000,000 5,890,920
FHLMC – STEP UP NOTE 10/15/2013 3,750,000 3,750,638
FHLB – STEP UP NOTE 12/29/2014 5,000,000 4,993,850
FHLB – STEP UP NOTE 11/25/2015 5,000,000 5,010,400
FHLB – STEP UP NOTE 06/30/2016 5,900,000 5,891,150
Default Credit Risk
Generally, default credit risk is the risk that an issuer of an investment will not fulfill its obligation
to the holder of the investment. This is measured by the assignment of a rating by a nationally
recognized statistical rating organization. Presented below is the minimum rating required by
103
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(where applicable) the California Government Code, the City’s investment policy, or debt
agreements, and the actual rating as of year-end for each investment type.
AAA Aa2
Aa
3 Unrated
Total
Investment
Portfolio
General Electric Capital
Corporation Note $ 19,978,800 A X 5.17%
International Business Machines
Corporation Note 4,970,750 A X 1.29%
U.S. Government Agency Securities 155,228,014 A X *40.16%
Time Deposits 15,023,880 NA X 3.89%
State investment pool 50,078,823 NA X 12.96%
Money Market Funds 108,597,510 NA X 37.90%
Total:$ 353,877,777 94.90%
Investments with Trustees
Guaranteed Investment Contracts $ 89,742,322 NA X 51.19%
Money Market Funds 57,637,627 NA X 32.87%
Repurchase Agreement 899,228 NA X 0.51%
U.S. Treasury Securities 27,045,780 NA X *15.43%
Total:$ 175,324,957 100.00%
* On August 5th 2011, U.S. Treasury Securities and U.S. Government Agency Securities were downgraded to AA+ rating by
Standard and Poor's.
Rating at Year End
Treasurer's Pool Investments
Minimum
Legal Rating
In 2008-2009, the U.S. Treasury bought shares in both the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation, converting the Federal
Government’s implicit guarantee of these firms into an explicit
guarantee. The Federal Government continued its oversight of the
Farm Credit Administration, which continued to be rated as an AAA
government-sponsored enterprise. The Treasury Department of the
Federal Government continued its supervisory and regulatory role of
the Federal Home Loan Bank system, and debt issued by the system
continued to be rated AAA.
On August 5, 2011, the credit rating agency Standard & Poor’s (S&P)
downgraded its credit rating of the U.S. federal government from AAA
to AA+. This was the first time that the federal government was given
a rating below AAA. S&P had previously announced a negative
outlook on the AAA rating in April 2011. Both Fitch Ratings and
Moody’s like S&P, as nationally recognized statistical rating
organizations (NRSRO) by the U.S. Securities and Exchange Commission, retained the U.S.’s
triple-A rating. Moody’s, however, changed its outlook to negative on June 2, 2011 and Fitch
changed its outlook to negative on November 28, 2011.
The City of Fresno’s Investment Policy requires that the City only invest in high quality
obligations, which means only those with a rating category of “A” or better by a nationally
recognized rating service. It is not anticipated at this time that the rating of the federal
104
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
government will immediately or significantly impact the investments held by the City of Fresno in
its investment pool.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial
institution, a government will not be able to recover its deposits or will not be able to recover
collateral securities that are in the possession of an outside party. Deposits or securities can be
legally restricted. The City maintains cash accounts at Bank of America
(BofA). The City maintains separate accounts for payment of general
accounts payable checks, payroll checks, and utility refund checks.
Amounts in excess of $250,000 are securitized in accordance with
California Government Code Section 53652. The California
Government Code and the City’s investment policy contain legal or
policy requirements that limit the exposure to custodial credit risk for
deposits. The California Government Code requires that a financial
institution secure deposits made by state or local governmental units
by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the
governmental unit.) The market value of the pledged securities in the collateral pool must equal
at least 110% of the total amount deposited by the public agencies. California law also allows
financial institutions to secure City deposits by pledging first trust deed mortgage notes having a
value of 150% of the secured public deposits. The collateral pledged to cover the public fund
deposits in California is held in the name of the California Collateral Pool Administrator and is
held in their name by the Federal Reserve Bank as custodian. The City had no uncollateralized
cash at June 30, 2011. As of June 30, 2011, the City’s deposits with institutions in excess of
federal depository insurance limits, was $87,876,755 held in accounts collateralized in
accordance with State law as described above.
The custodial credit risk for investments is the risk that, in the event of the failure of the
counterparty (e.g. broker-dealer) to the transaction, a
government will not be able to recover the value of its
investment of securities that are in the possession of the
counterparty. As of June 30,2011, in accordance with the
City's investment policy, none of the City's investments were
held with a counterparty. All of the City's investments were held
with an independent third party custodian bank. The City uses
Bank of New York Trust Company (BNY) as a third-party
custody and safekeeping service for its investment securities.
Custodial credit risk is the risk that the City will not be able to
recover the value of its investments in the event of a BNY
failure. All City investments held in custody and safe-keeping by BNY are held in the name of the
City and are segregated from securities owned by the bank. This is the lowest level of custodial
credit risk exposure.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment
Fund (LAIF) that is regulated by the California Government Code
under the oversight of the Treasurer of the State of California. The
fair value of the City's investment in this pool is reported in the
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
accompanying financial statements at amounts based upon the City's pro-rata share of the fair
value provided by LAIF for the entire LAIF portfolio ( in relation to the amortized cost of that
portfolio). The balance available for withdrawal is based on the accounting records maintained by
LAIF, which are recorded on an amortized cost basis.
The total amount invested by all public agencies in LAIF as of June 30, 2011 was $24.0 billion.
LAIF is part of the California Pooled Money Investment Account (PMIA) which at June 30, 2011
has a balance of $66.4 billion, of that amount 5.01% was invested in medium-term and short-
term structured notes and asset-backed securities. The average maturity of PIMA investments
was 237 days as of June 30, 2011.
Redevelopment Agency Funds
The Redevelopment Agency (RDA), a blended component unit of the
City of Fresno, has $11,572,231 of idle funds deposited in a money
market fund at Wells Fargo Bank. The fund, known as the Cash
Investment Money Market I Fund, is part of the bank's "Advantage"
money market funds, designed to work in connection with an
institution's demand deposit account. The Fund is unrated, but
invests in short-term money market instruments considered to have
little risk of credit default. The RDA does not have a formal
investment policy, since aside from these funds, the RDA has only
funds deposited in a demand deposit account, subject to the California
state requirements for collateralizing public funds, and approximately $1.8 million of bond
proceeds governed by bond indentures. These funds, because of their immediate liquidity, are
not subject to any other risks including concentration risk, interest rate risk, and custodial risk.
Deposits and Investments
The investment guidelines for the City of Fresno’s Retirement Systems (Systems) reflect the
duties imposed by an investment standard known as the “prudent expert rule.” The prudent
expert rule establishes a standard for all fiduciaries, which includes anyone who has
discretionary authority with respect to the Systems’ investments.
Northern Trust serves as custodian of the Systems’
investments. The Systems’ asset classes include Domestic
Equity, International Equity, Emerging Market Equity, Short
Term Investments, Corporate Bonds, Government Bonds and
Real Estate. Any class may be held in direct form, pooled form
or both. The Systems have 14 external investment managers,
managing 18 individual portfolios. Investments at June 30,
2011, consist of the following:
106
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
I n v e s t m e n t s a t F a i r V a l u e 2 0 1 1
Short Term Investments $ 54,969,039
Domestic Equity 748,615,878
Corporate Bonds 255,746,925
International Equity 414,544,933
Emerging Market Equity 91,594,357
Government Bonds 328,446,185
Real Estate 198,154,805
Total Investments at Fair Value $ 2,092,072,122
The Retirement Boards have established policies for investing, specifying the following target
allocations with a minimum and maximum range for each of these asset classes:
A s s e t C l a s s
Large Capital Equities 18.5%22.5%26.5%
Small Capital Equities 4.5%7.5%10.5%
International Equities 18.0%22.8%29.0%
Emerging Market Equities 2.0%5.0%7.0%
Real Estate 8.0%10.0%12.0%
Domestic Fixed Income 20.0%25.0%30.0%
High Yield Bonds 0.0%5.0%8.0%
Cash & Equivalents 0.0%0.0%2.0%1
T a r g e tMinimum M a x i m u m
Allowable securities must meet the reporting requirements of the Securities and Exchange
Commission and must meet a “prudent expert” standard for investing. In no case may either
System have 5 percent or more of System net assets invested in any one organization.
Pension Trust Funds
The Retirement Boards’ investment policies and guidelines
permit investment in numerous specified asset classes to take
advantage of the non-correlated economic behavior of diverse
asset classes. The result is a well-diversified portfolio.
Custodial Credit Risk
The Retirement Systems’ investment securities are not exposed to
custodial credit risk since all securities are registered in the Systems’ name and held by the
Systems’ custodial bank. Any cash associated with the Systems’ investment portfolios not
invested at the end of a day is temporarily swept overnight into Northern Trust Collective Short-
Term Investment Fund. That portion of the Systems’ cash held by the
City as part of the City’s cash investment pool totaled $87,257 at June
30, 2011. Accordingly, the Systems’ Investments in the pool are held
in the name of the City and are not specifically identifiable.
Credit and Interest Rate Risk
Credit risk associated with the Systems’ debt securities is identified by
their ratings in the table below. Interest rate risk is the risk that
changes in market interest rates will adversely affect the fair value of an
investment. The System has no general policy on credit and interest
rate risk. The System limits its investments in below investment grade
107
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
bonds and monitors the interest rate risk inherent in its portfolio by measuring the duration of its
portfolio.
The average duration of the systems’ debt portfolios in years is listed in the table below:
T yp e o f I n v e s t me n t Fa i r V a lu e Cr e d i t Qu a li t y D u ra t io n
Asset Backed Securities $3,401,186 BBB-1.89
Commercial Mortgage-Backed 12,448,623 AA+3.29
Common Stock 2,382,782 NR 13.00
Corporate Bonds 214,355,895 BBB-5.05
Corporate Convertible Bonds 6,207,794 B-6.21
Convertible Equity 2,215,283 B+5.96
Government Agencies 15,992,178 AAA 3.67
Government Bonds 110,963,972 AAA 4.18
Government Mortgage Backed Securities 184,951,087 AAA 2.29
Guaranteed Fixed Income 1,161,698 AA+1.11
Index Linked Government Bonds 21,564 CC 1.32
Municipal/Provincial Bonds 16,517,414 A-10.01
Non-Government backed C.M.O’s 11,402,645 B+3.19
Other Fixed Income 52,938 NR 13.00
Preferred Stock 2,118,081 BB-4.67
$584,193,140 1
Per section 5.4(6) of the Retirement Systems’ Investment Policy Statement, no more than 15
percent of an investment manager’s fixed income portfolio may be invested in below investment
grade rated securities (BB or B rated bonds). Therefore, at least 85 percent of the manager’s
fixed income portfolio must be invested in investment grade securities. Intermediate Bond
portfolios shall maintain an average credit quality of A+ or better.
High yield fixed income portfolios, in accordance with section 5.4(7) of the Systems’ Investment
Policy Statement, shall maintain an average credit quality rating of at least B1/B+ at all times. No
more than 20 percent of a high yield manager’s portfolio may be invested in bonds rated
Caa1/CCC+ or lower with non-rated bonds being limited to 5 percent of the portfolio with both
limits subject to maintaining the average portfolio credit quality of B1/B+. No more than 25
percent of a high yield manager’s portfolio may be invested in foreign securities; and within this
limit up to 15 percent of the portfolio may be invested in non-US dollar denominated securities.
Firms that manage fixed income portfolios will continually monitor the risk associated with their
fixed income investments. They will be expected to report as a component of their quarterly
report, a risk/reward analysis of the management decisions relative to their benchmarks.
Statistics that relate performance variance to effective duration decisions will be included in each
quarterly report.
Concentration Risk
The Investment portfolio as of June 30, 2011 contained no concentration of investments in any
one entity (other than those issued or guaranteed by the U.S. Government) that represented 5
percent or more of the total investment portfolio.
108
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Foreign Currency Risk
Foreign Currency Risk is the risk that changes in foreign exchange rates will adversely affect the
fair value of an investment or deposit. The System has no general investment policy with respect
to foreign currency risk. The System’s investment policy guidelines allow international developed
and emerging equity managers to hedge their currency risks in foreign countries through the
purchase of derivatives. Used as a defensive measure and in an effort to control the risks
associated with international portfolios, international equity investment managers are permitted
to invest in forward currency contracts, swaps currency futures, and exchanged-traded index
futures that represent broad equity exposure to countries represented in their respective
benchmark index.
The following positions represent the Systems’ exposure to foreign currency risk as of June 30,
2011:
E q u i t i e s
Base Currency:
Equities/
Fixed Income
Foreign
Currency
Contracts
Rights &
Warrants
Cash & Cash
Equivalents Total
Australia Dollar – AUD 28,554,867$ $ (2,207) $ - $ 42,980 $ 28,595,640
Brazil Real – BRL 9,669,097 - - 939,084 10,608,181
Canada Dollar – CAD 14,200,665 - - - 14,200,665
Swiss Franc – CHF 26,842,461 2,357 - 95,563 26,940,381
Chilean Peso - CLP (260,381)(1,507) - - (261,888)
Colombian Peso - COP 267,150 - - - 267,150
Czech Koruna - CZK 450,951 - - - 450,951
Danish Krone – DKK 10,374,495 (4,102) - - 10,370,393
Egyptian Pound – EGP 55,746 - - - 55,746
Euro – EUR 102,748,669 (8,846) - 10,700 102,750,523
British Pound Sterling– GBP 79,245,829 54 - - 79,245,883
Hong Kong Dollar – HKD 31,302,311 (4) - 57,316 31,359,623
Hungarian Forint – HUF 1,213,029 - - 7,650 1,220,679
Indonesia Rupiah – IDR 4,396,820 - - 147,566 4,544,386
New Israeli Shekel - ILS 343,960 - - - 343,960
India Rupee - INR 4,669,288 - - 6,377 4,675,665
Japan Yen – JPY 66,716,313 69 - - 66,716,382
South Korean Won – KRW 19,608,620 - - 5,849 19,614,469
Mexican Peso – MXN 2,959,142 - - 95,721 3,054,863
Malaysian Ringgit – MYR 2,036,383 - - - 2,036,383
Norwegian Krone – NOK 9,257,811 - - - 9,257,811
Philippine Peso - PHP 261,508 - - - 261,508
Polish Zloty - PLN 1,223,907 (23) - - 1,223,884
Swedish Krona – SEK 16,583,770 - - - 16,583,770
Singapore Dollar – SGD 9,403,875 - - 33,859 9,437,734
Thai Baht – THB 1,742,934 - - 4 1,742,938
Turkish Lira – TRY 3,042,036 - - - 3,042,036
New Taiwan Dollar – TWD 7,042,700 - - - 7,042,700
United States Dollar – USD - 7,146 11,895 - 19,041
South African Rand - ZAR 10,051,515 (2,312) - 101,010 10,150,213
Total Non-USD Equities (in USD) 464,005,471$ (9,375)$ 11,895$ 1,543,679$ 465,551,670$
109
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Per section 5.4(5) of the Systems’ Investment Objectives and Policy
Statement, assets in international equity portfolios will be primarily
composed of foreign ordinary shares and ADRs. Primarily, large
capitalization securities may be held, although investments in small
and mid capitalization securities are also allowed. Firms will
continually monitor their country, currency, sector and security
selection risks associated with their international portfolios. All of the
risks will be included in the manager’s quarterly reports and
performance attribution based on these factors will also be included.
The System’s complete Investment Objectives and Policy Statement can be found on the
System’s website at www.CFRS-CA.org or by contacting the Retirement Office at 2828 Fresno
Street Suite 201, Fresno, CA 93721
Derivatives
The Retirement Boards have authorized certain investment managers to invest in or otherwise
enter into transactions involving derivative financial instruments when, in the judgment of
management, such transactions are consistent with the investment objectives established for a
specific investment manager’s assignment.
The acceptable investment purposes for the use of derivatives are as follows:
Mitigation of risk (or risk reduction).
A useful substitute for an existing, traditional investment.
To provide investment value to the portfolio while being consistent with the Systems’
overall and specific investment policies.
To obtain investment exposure which is appropriate for the manager’s investment
strategy and the Systems’ investment guidelines, but which could not be made through
traditional investment securities.
The Retirement Boards monitor and review each investment manager’s
securities and derivative positions as well as the manager’s performance
relative to established benchmark rates of return and risk measures. In
management’s opinion, derivative activities must be evaluated within the
context of the overall portfolio performance and cannot be evaluated in
isolation.
Derivative financial instruments held by the retirement system consist of
the following:
Cash securities containing derivative
features, including callable bonds, structured notes and collateralized
mortgage obligations (CMO’s). These instruments are generally
traded in over-the-counter bond markets.
Financial instruments whose value is dependent upon a
contractual price or rate relative to one or more reference prices or
rates, applied to a notional amount, including interest rate futures,
110
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
options, swaps and caps, and foreign currency futures and forward contracts. Some of
these instruments are exchange-traded and others are traded over-the-counter (OTC).
Market Risk
Market risk is the risk of change in value of an instrument in response to changes in a market
price or index. While all investments are subject to market risk, derivatives often have a higher
degree of market risk than other types of investment instruments. Values of cash securities
containing derivative features are often more susceptible to market risk than other types of fixed
income securities, because the amounts and/or timing of their scheduled cash flows may
fluctuate under changing market conditions, according to their contractual terms. For other types
of derivatives, amounts of contractual cash flows may be either positive or negative depending
upon prevailing market conditions relative to the reference prices or rates, and thus the values of
such instruments may be positive or negative, despite the fact that little or no cash is initially
exchanged to enter into such contracts.
Credit Risk
Credit risk of cash securities containing derivative features, as explained, is based upon the
credit worthiness of the issuers of such securities. The Retirement Boards establish minimum
credit requirements for such securities. The other derivative instruments described above are
subject to credit risk to the extent that their value is a positive market value, and the counterparty
to such contract fails to perform under the terms of the instrument.
Exchange traded derivatives are generally considered to be of lower credit risk than OTC
derivatives due to the exchanges’ margin requirements. Equity Index Swaps are derivatives and
represent an agreement between two parties to swap two sets of equity values. Equity Futures
are contracts used to replicate an underlying stock market index. These equity futures can be
used for hedging against an existing equity position, or speculating on future movements of the
index.
As of June 30, 2011, the Systems held a total value of $5,903,323 in derivative holdings. These
holdings consisted of Right/Warrants and Foreign Currency Forwards held as components of the
System’s international equity investments, and S&P 500 Equity Futures, S&P MidCap 400 Equity
Futures and Russell 200 Index Futures as a component of the System’s investments in
BlackRock S&P 500 Equity Index, Russell 1000, and 2000 Growth Funds.
There is no net counterparty exposure for which there is a positive replacement cost to the fund.
The details of these derivative holdings are as follows:
Derivative Type:FY 2010
Notional Value Fair Value Fair Value
Rights/Warrants 933* 11,895$ 7,697$ 4,198$
Foreign Currency Forward (9,375)$ (9,375) 46,963 (56,338)
Future Contracts - Domestic Equity Index - 4,983,835 3,385,610 1,598,225
Future Contracts - International Equity Index - 916,968 - 916,968
5,903,323$ 3,440,270$ 2,463,053$
* Shares
FY 2011 FY 2011 - FY 2010
Change in Fair Value
Total
111
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Securities Lending
The City of Fresno Municipal Code and the Retirement Boards’
policies permit the Retirement Board of the City of Fresno Fire and
Police Retirement System and the City of Fresno Employees
Retirement System to use investments of both Systems to enter into
securities lending transactions, i.e., loans of securities to broker-
dealers and other entities for collateral with a simultaneous
agreement to return the collateral for the same securities in the future.
The Systems have contracted with Northern Trust, their custodian, to
manage the securities lending program for the Systems and all
securities held in a separately managed account are available for
lending. Detail information with respect to the fair value of loaned
securities and the fair value of collateral received for loaned securities
can be found at Note 14 to the Financial Statements.
The Systems’ securities lending income is as follows:
2011
Gross Income $ 1,048,920
Expense:
Borrow Rebates (232,590)
Bank Fees 256,102
Total Expenses 23,512
Net Income from Securities Lending $ 1,025,408
Investments/Policies
California statutes and the City's investment policy authorize investments in
obligations of the U.S. Treasury, agencies and instrumentalities, bankers’,
acceptances, negotiable certificates of deposit, GC53601.8 CD’s,
repurchase agreements and the State Treasurer's investment fund. The
City is also authorized to enter into reverse repurchase agreements, but did
not enter into any reverse repurchase agreements transactions during fiscal
year 2011. City Sponsored Investment Pool
As part of the City’s total cash and investment portfolio, the Treasury Officer
manages an investment pool that includes only internal investors. The pool is not registered with
the Securities and Exchange Commission as an investment company. The Treasury Officer is
granted authority for managing the pool by Fresno Municipal Code Section 4-104. The Treasury
Officer reports investment activity monthly to the City Council and annually an investment policy
is submitted to the Council for review and approval. The fair value of investments is determined
monthly. Participants’ shares are determined by the daily cash balance deposited in the pool (the
value of its pool shares). The value of the pool shares is based upon amortized cost in day-to-
day operations but is adjusted to the fair value at year-end. The investments are reported at fair
value. The value of the shares is supported by the value of the underlying investments.
112
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Stewardship, Compliance and Accountability
There have been no material violations of finance-related legal or contractual provisions.
Restricted Assets
Restricted assets are as follows at June 30, 2011:
T o t a l s
G o v e r n m e n t a l A c t i v i t i e s :
General Fund $ 1,443,686 $- $- $ 1,443,686
Grants Special Revenue Fund 283 - - 283
Redevelopment Agency, Debt Service 1,876,198 - - 1,876,198
Nonmajor Governmental Funds 11,123,276 - - 11,123,276
Internal Service Fund 309,590 - - 309,590
S u b t o t a l 14,753,033 - - 14,753,033
B u s i n e s s -t y p e A c t i v i t i e s :
Water 118,848,193 70,265 224,141 119,142,599
Sewer 119,048,160 366,870 - 119,415,030
Solid Waste 27,838,743 - - 27,838,743
Transit 5,428,331 - - 5,428,331
Airports 14,385,870 - 103,361 14,489,231
Convention Center 5,186,324 - - 5,186,324
Stadium 1,631,389 - - 1,631,389
Internal Service Fund 3,080,824 - - 3,080,824
S u b t o t a l 295,447,834 437,135 327,502 296,212,471
F i d u c i a r y :
Agency Funds 1,149,754 - - 1,149,754
T o t a l s $ 311,350,621 $ 437,135 $ 327,502 $ 312,115,258
I n t e r e s t
R e c e i v a b l e
G r a n t s
R e c e i v a b l e
C a s h a n d
I n v e s t m e n t s
C u r r e n t a n d
N o n c u r r e n t
Restricted cash includes funds held by trustees relating to bonds payable and those amounts
held by each fund for which a specific, non-operating use has been determined. Grants
receivable represent amounts due from a granting agency for which the specific, non-operating
use has been determined. Restricted interest receivable represents interest associated with
restricted cash.
113
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 4.PROPERTY TAXES
Article XIII of the California Constitution (Proposition 13) limits
ad valorem taxes on real property to one percent of value plus
taxes necessary to pay indebtedness approved by voters prior
to July 1, 1978. The Article also established the 1975/76
assessed valuation as the base and limits annual increases to
the cost of living, not to exceed two percent, for each year
thereafter. Property may also be reassessed to full market value
after a sale, transfer of ownership, or completion of new
construction. The State is prohibited under the Article from imposing new ad valorem, sales, or
transaction taxes on real property. Local government may impose special taxes (except on real
property) with the approval of two-thirds of the qualified electors.
All property taxes are collected and allocated by the County of Fresno to the various taxing
entities. Property taxes are determined annually as of January 1 and attached as enforceable
liens on real property as of July 1. Taxes are due November 1 and February 1 and are
delinquent if not paid by December 10 and April 10, respectively. Secured property taxes
become a lien on the property on January 1. Property taxes on the unsecured roll are due on the
January 1 lien date and become delinquent if unpaid on August 31. Property tax revenues are
recognized in the governmental funds in the fiscal period for which they are levied and collected,
adjusted for any amounts deemed uncollectible and amounts expected to be collected more than
60 days after the fiscal year.
Note 5.RECEIVABLES
Receivables are presented in the financial statements net of the allowance for uncollectible
accounts. The uncollectible accounts related to accounts receivable at June 30, 2011 are
$47,862 for the General Fund, $1,551,319 for Water System, $1,534,145 for Sewer System,
$1,495,800 for Solid Waste Management, $39,054 for Airports, $95,452 for Convention Center,
and $2,998,324 for Other Enterprise Funds. The uncollectible accounts related to notes
receivable at June 30, 2011 are $15,115,439 for Grants Special Revenue Fund and $500,000 for
Other Governmental Funds. Accounts not scheduled for collection during the subsequent year
are $55,841,896 for governmental notes and loans and $65,158,906 for business-type notes and
loans.
The allowance for doubtful accounts is a Statement of Net Assets account (balance sheet
adjustment) that reduces the reported amount of a receivable. Providing an allowance for
doubtful accounts presents a more realistic picture of how much of the receivable is likely to be
turned into cash. The amount of the allowance for each fund is a management determination
made by reviewing past collections received on each account. This analysis includes reviewing
the aging of the receivable balance, past account write-offs and other known variables. The
allowance is evaluated at the end of the year for adequacy.
114
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Receivables, net of amounts uncollectible, as of June 30, 2011, were as follows:
In t e r es t
A c c o u n ts ,
N e t
I n te r -
g o v e r n m en t a l To t a l
Go v e r n m e n t a l A c t i v i ti e s :
General Fund $ 75,650 $ 6,171,659 $ 43,752 $ 12,432,315 $ 16,453,209 $- $ 35,176,585
Grants Special Revenue Fund - 120 14,714,460 - - 36,133,630 50,848,210
Other Governmental Funds 253,614 208,050 318,597 2,494,395 20,571,197 23,845,853
Internal Service Funds 266,639 769,899 - - - - 1,036,538
To t a l $ 595,903 $ 7,149,728 $ 15,076,809 $ 12,432,315 $ 18,947,604 $ 56,704,827 $ 110,907,186
B u s i n e s s -T y p e A c t i v i t i e s :
Water System $465,878 $ 7,016,338 $ 224,141 $- $- $ 37,708,054 $ 45,414,411
Sewer System 602,145 7,884,870 - - 832,812 13,818,986 23,138,813
Solid Waste Management 173,230 5,185,537 45,832 - - 17,933,866 23,338,465
Transit - 305,860 11,690,710 - 4,568,337 - 16,564,907
Airports 35,642 1,123,564 103,361 - 81,037 - 1,343,604
Fresno Convention Center - 508,244 - - - - 508,244
Stadium 1,374 - - - - -1,374
Other Enterprise Funds 9,148 5,377,203 - - 51,854 - 5,438,205
Internal Service Funds 63,123 -- - - - 63,123
To t a l $ 1,350,540 $ 27,401,616 $ 12,064,044 $- $ 5,534,040 $ 69,460,906 $ 115,811,146
Gr a n t
R e c e i v a b l e s
P r o p e r t y
Ta x e s
N o t es ,
L o a n s ,
O t h e r , N e t
Receivables are presented on the Statement of Net Assets as follows:
Governmental
Activities:
Business-Type
Activities:Total
$$$
Restricted Grants and Interest Receivable - 764,637 764,637
Loans, Notes, Leases and Other Receivables, Net 56,704,827 69,460,906 126,165,733
$ 110,907,186 $ 115,811,146 $ 226,718,332
Receivables, Net 54,202,359 45,585,603 99,787,962
115
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 6.PROPERTY, PLANT AND EQUIPMENT–CAPITAL ASSETS
The following is a summary of capital assets as of June 30, 2011:
G o ve r n m e n t a l
A c t i v i t i e s
B u si n e s s -T y p e
A c t i v i t i e s Total
C u l t u r a l A r t s
P r o p e r t i e s
C o r p
Land $ 218,536,700 $ 52,557,605 $ 271,094,305 $ 888,000
Construction in Progress 59,144,560 113,956,017 173,100,577 -
277,681,260 166,513,622 444,194,882 888,000
Buildings and Improvements 229,458,121 1,164,871,349 1,394,329,470 14,223,940
Machinery and Equipment 182,654,075 97,983,852 280,637,927 -
Infrastructure 1,212,289,726 240,939,548 1,453,229,274 -
1,624,401,922 1,503,794,749 3,128,196,671 14,223,940
Buildings and Improvements (83,906,955) (383,877,103)
(467,784,058) (591,020)
Machinery and Equipment (153,600,550) (68,309,872)
(221,910,422) -
Infrastructure (709,966,946) (33,598,589)
(743,565,535) -
(947,474,451) (485,785,564)
(1,433,260,015) (591,020)
676,927,471 1,018,009,185 1,694,936,656 13,632,920
$ 954,608,731
$ 1,184,522,807
$ 2,139,131,538
$ 14,520,920
C o m p o n e n t
U n i tPrimary G o v e r n m e n t
T o t a l A c c u m u l a t e d D e p r e c i a t i o n
T o t a l Ca p i t a l A s s e t s B e i n g
D e p r e c i a t e d , N e t
T o t a l Ca p i t a l A s s e t s , N e t
L e s s : A c c u m u l a t e d D e p r e c i a t i o n f o r :
C a p i t a l A ss e t s N o t B e i n g De p r e c i a t e d :
T o t a l Ca p i t a l A s s e t s N o t B e i n g
D e p r e c i a t e d
C a p i t a l A ss e t s B e i n g D e p r e c i a t e d :
T o t a l Ca p i t a l A s s e t s B e i n g De p r e c i a t e d
116
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Governmental
Capital asset activity related to governmental activities for the year ended June 30, 2011, was as
follows:
Beginning
Balance Increases Decreases Ending Balance
Capital Assets Not Being Depreciated:
Land $214,515,141 $ 4,374,272 $ (352,713) $ 218,536,700
Construction in Progress 72,583,935 39,714,008 (53,153,383) 59,144,560
Total Capital Assets Not Being Depreciated 287,099,076 44,088,280 (53,506,096) 277,681,260
Capital Assets Being Depreciated:
Buildings and Improvements 223,882,352 5,981,842 (406,073) 229,458,121
Machinery and Equipment 183,830,644 9,016,587 (10,193,156) 182,654,075
Infrastructure 1,176,733,976 35,555,750 - 1,212,289,726
Total Capital Assets Being Depreciated 1,584,446,972 50,554,179 (10,599,229) 1,624,401,922
Less: Accumulated Depreciation For:
Buildings and Improvements (77,163,279) (6,871,619) 127,943 (83,906,955)
Machinery and Equipment (152,051,918) (11,606,811) 10,058,179 (153,600,550)
Infrastructure (675,115,314) (34,851,632)- (709,966,946)
Total Accumulated Depreciation (904,330,511) (53,330,062) 10,186,122 (947,474,451)
Total Capital Assets Being Depreciated, Net 680,116,461 (2,775,883) (413,107) 676,927,471
Total Capital Assets, Net $967,215,537 $ 41,312,397 $ (53,919,203) $ 954,608,731
Depreciation Was Charged To Functions As Follows:
General Government $10,737,693
Public Protection 2,975,899
Public Ways and Facilities 36,680,341
Culture and Recreation 2,770,158
Community Development 16,177
Redevelopment 149,794
Total Governmental Activities Depreciation Expense $53,330,062111
Governmental Activities
117
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Business–Type Activities
Capital asset activity related to business-type activities for the year ended June 30, 2011, was as
follows:
Business–Type Activities
Beginning
Balance Increases Decreases
Ending
Balance
Land $ 50,403,123 $ 2,154,482 $- $ 52,557,605
Construction in Progress 231,340,581 88,142,821 (205,527,385) 113,956,017
Total Capital Assets Not Being Depreciated 281,743,704 90,297,303 (205,527,385) 166,513,622
Buildings and Improvements 999,836,368 167,344,349 (2,309,368) 1,164,871,349
Machinery and Equipment 96,643,295 1,578,505 (237,948) 97,983,852
Infrastructure 215,119,950 25,819,598 - 240,939,548
Total Capital Assets Being Depreciated 1,311,599,613 194,742,452 (2,547,316) 1,503,794,749
Buildings and Improvements (356,707,618) (29,378,402) 2,208,917 (383,877,103)
Machinery and Equipment (62,791,107) (5,637,408)118,643 (68,309,872)
Infrastructure (27,324,894) (6,273,695)- (33,598,589)
Total Accumulated Depreciation (446,823,619) (41,289,505) 2,327,560 (485,785,564)
Total Capital Assets Being Depreciated, Net 864,775,994 153,452,947 (219,756) 1,018,009,185
Total Capital Assets, Net $ 1,146,519,698 $ 243,750,250 $ (205,747,141) $ 1,184,522,807
Water System $ 9,702,942
Sewer System 13,930,904
Solid Waste Management 892,279
Transit 3,776,035
Airports 7,568,625
Fresno Convention Center 3,918,043
Stadium 1,091,283
Other Enterprise Funds 400,871
Business-type - Internal Service 8,523
$ 41,289,505Total Business - Type Activities Depreciation Expense
Capital Assets Not Being Depreciated:
Capital Assets Being Depreciated:
Less: Accumulated Depreciation For:
Depreciation Was Charged To Functions As Follows:
118
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Component Unit
Capital asset activity related to the discretely presented component unit activities for the year
ended June 30, 2011, was as follows:
Beginning
Balance Increases Decreases
Ending
Balance
Capital Assets Not Being Depreciated:
Land $888,000 $- $- $ 888,000
Capital Assets Being Depreciated:
Buildings and Improvements 14,223,940 -- 14,223,940
Less: Accumulated Depreciation For:
Buildings and Improvements (434,620) (274,933) 118,533 (591,020)
Total Capital Assets Being Depreciated, Net 13,789,320 (274,933) 118,533 13,632,920
Total Capital Assets, Net $14,677,320 $ (274,933) $ 118,533 $ 14,520,920
City of Fresno Cultural Arts Properties
At June 30, 2011 Construction in Progress consisted of the following:
G o v e r n m e n t a l :
Fire Station Renovations $9,640,060
General Street Projects 17,221,326
Regional Park Improvements 12,345,702
Police Capital Projects 15,956,666
Misc Building, Grounds & Facility 3,946,363
Other Miscellaneous Projects 34,443
Total Governmental $59,144,560
B u s i n e s s -T y p e :
Water Capital Projects $65,531,176
Sewer/Wastewater Capital Projects 38,169,882
Airports Capital Projects 4,756,164
Transit Capital Projects 5,498,795
Total Business-Type $113,956,017
T o t a l C o n s t r u c t i o n i n P r o g r e s s $173,100,577
P r o j e c t T i t l e
P r o j e c t T i t l e
C o n s t r u c t i o n C o s t s
T o D a t e
C o n s t r u c t i o n C o s t s
T o D a t e
119
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 7.LONG-TERM LIABILITIES
The following is a summary of long-term liabilities. Balances are reported as of June 30, 2011 for
the City:
SUMMARY OF LONG-TERM LIABILITIES
Component
Unit
Revenue and Other Bonds $370,610,000 $557,546,242 $928,156,242 $-
Tax Allocation Bonds 9,285,000 - 9,285,000 -
Deferred Amounts (702,126) 2,089,450 1,387,324 -
Notes Payable 9,492,367 5,623,784 15,116,151 16,660,000
Capital Lease Obligations 10,671,486 - 10,671,486 -
T o t a l 399,356,727 565,259,476 964,616,203 16,660,000
Compensated Absences and Health
Retirement Arrangement 45,932,840 13,586,060 59,518,900 -
Net OPEB Obligation 27,567,221 11,170,627 38,737,848 -
Liabilities for Self Insurance 87,538,288 - 87,538,288 -
CVP Litigation Settlement - 35,941,149 35,941,149 -
Accrued Closure Cost - 20,626,149 20,626,149 -
Pollution Remediation 10,919 956,559 967,478 -
T o t a l 161,049,268 82,280,544 243,329,812 -
$ 560,405,995 $ 647,540,020 $ 1,207,946,015 $ 16,660,000
45,801,816 20,767,793 66,569,609 -
514,604,179 626,772,227 1,141,376,406 16,660,000
$560,405,995 $ 647,540,020 $ 1,207,946,015 $ 16,660,000
1
Primary Government
C i t y o f F r e s n o
C u l t u r a l A r t s
P r o p e r t i e s
T o t a l L o n g -T e r m L i a b i l i t i e s
G o v e r n me n t -W i d e S t a t e m e n t
Go v e r n m e n ta l
A c t i v i t i e s
B u s i n e s s -t y p e
A c t i v i t i e s
T ota l P r i m a r y
Go v er n m e n t
D u e W i t h i n M o r e Th a n On e Y e a
T o t a l L o n g -T e r m L i a b i l i t i e s
G o v e r n me n t -W i d e S t a t e m e n t
D u e W i t h i n On e Y e a r
Oth e r L o n g -t e r m L i a b i l i ti e s
L on g -t e r m D e b t
Internal service funds (ISFs), except for Billing and Collection, primarily serve the governmental funds.
Accordingly, long-term liabilities for ISFs are included as part of the above totals for governmental
activities, while those for Billing and Collection are included as part of the totals for business-type activities.
Also, for the governmental activities, compensated absences are generally liquidated by the General Fund,
while claims and judgments are liquidated by Risk Management, Employees Healthcare Plan and Retirees
Healthcare Plan.
120
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Activity of Long Term Liabilities
Lease Revenue Refunding Bonds 2002 A, Street
Light Acquisition Project
Lease Revenue Bonds, Series 2004 39,950,000 - 1,795,000 38,155,000 1,870,000
Lease Revenue Bonds, Series 2008A NNLB 33,890,000 - 2,110,000 31,780,000 2,210,000
Lease Revenue Bonds, Series 2008 C & D
Parks Projects 34,080,000 - 675,000 33,405,000 700,000
Lease Revenue Bonds, Series 2008E, City Hall Chiller 3,405,000 - - 3,405,000 -
Lease Revenue Bonds, Series 2009A, Police and
Fire/Public Safety 42,720,000 - 650,000 42,070,000 1,000,000
Lease Revenue Bonds 2010, City Hall Refunding,
Fresno Bee Building, Granite Park , Improvements 46,495,000 - - 46,495,000 2,255,000
Taxable Pension Obligation Bonds Refunding
Series 2002 173,665,000 - 4,960,000 168,705,000 5,255,000
Judgment Obligation Refunding Bonds 2002 3,620,000 - 390,000 3,230,000 405,000
Tot a l R e v en u e a n d O t h e r B o n d s 381,775,000 - 11,165,000 370,610,000 14,310,000
Ta x A l l o c a t i o n B o n d s :
2001 Redevelopment Agency Merger 1 6,130,000 - 595,000 5,535,000 625,000
Series 2003, Mariposa Project Area 3,970,000 - 220,000 3,750,000 228,000
T ot a l Ta x A l l o c a t i o n B o n d s 10,100,000 - 815,000 9,285,000 853,000
L e s s D e f e r r e d A m o u n t s :
For Issuance (Discounts)/Premiums 512,012 - 165,592 346,420 -
On Refunding (1,200,120) - (151,574) (1,048,546) -
Tot a l D e f e r r e d A m ou n ts (688,108) - 14,018 (702,126) -
N o t e s P a y a b l e :
California Infrastructure Bank - City 2,174,571 - 59,081 2,115,490 61,167
California Energy Commissions 1,740,871 - 216,481 1,524,390 229,766
California Infrastructure Bank - RDA 1,886,748 - 51,261 1,835,487 53,071
HUD Sec 108 Note Reg. Med Center 1997-A 1,715,000 - 165,000 1,550,000 175,000
HUD Sec 108 Note FMAAA 970,000 - 70,000 900,000 75,000
HUD Sec 108 Note Neighborhood Streets/Parks 1,177,000 - 60,000 1,117,000 64,000
Community Hospital, BNSF Quiet Zone 600,000 - 150,000 450,000 150,000
To t a l N o t e s P a y a b l e 10,264,190 - 771,823 9,492,367 808,004
C a p i t a l L e a s e s 10,981,277 1,916,737 2,226,528 10,671,486 1,925,314
Tot a l L o n g -t e r m D e b t 412,432,359 1,916,737 14,992,369 399,356,727 17,896,318
O t h e r L i a b i l i t i e s :
Fresno County - Elkhorn Settlement 225,000 - 225,000 - -
Compensated Absences and Health Retirement
Arrangement 46,864,878 4,892,052 5,824,090 45,932,840 6,026,556
Net OPEB Obligation 21,949,101 5,618,120 - 27,567,221 -
Liability for Self Insurance 82,439,731 55,586,646 50,488,089 87,538,288 21,868,023
Pollution Remediation 155,000 95,277 239,358 10,919 10,919
Tot a l O t h e r L i a b i l i t i e s 151,633,710 66,192,095 56,776,537 161,049,268 27,905,498
G o v er n m e n t a l L o n g -t e r m L i a b i l i t i e s T o t a l $ 564,066,069 $ 68,108,832 $ 71,768,906 $ 560,405,995 $ 45,801,816
B o n d s P a y a b l e (R e v e n u e a n d Oth e r B o n d s ):
G o v er n m e n ta l A c t i v i ti es :
A d d i t i o n s
$ 3,950,000 $- $
B e g i n n i n g
B a l a n c e
E n d i n g
B a l a n c e
D u e W i t h i n
On e Y e a r
3,365,000 $585,000 $615,000
R ed u c t i o n s
121
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
B u s i n e s s -t y p e A c t i v i t i e s :
B o n d s P a y a b l e (R ev e n u e a n d O t h e r B o n d s ):
Water System Revenue Refunding Bonds 2003 $ 10,580,000 $- $ 840,000 $ 9,740,000 $ 890,000
Water System Revenue Bonds (Non-Taxable) 2010 A-1 and
(Taxable BABs) 2010 A-2 157,935,000 - 3,300,000 154,635,000 3,330,000
Sewer System Revenue Bonds 1993 A 80,640,000 - 6,395,000 74,245,000 6,790,000
Sewer System Revenue Bonds 1995 A 2,670,000 - 2,670,000 - -
Sewer System Revenue Bonds 2008 A 159,845,000 - - 159,845,000 -
Solid Waste Management Enterprise Revenue Bonds 2000 A 7,720,000 - 220,000 7,500,000 230,000
Lease Revenue Bonds 1998, Exhibit Hall Expansion Project 25,552,442 - 1,121,200 24,431,242 1,126,578
Airport Revenue Bonds 2000 37,320,000 - 890,000 36,430,000 935,000
Lease Revenue Bonds 2001 A and B, Stadium Project 40,055,000 - 1,005,000 39,050,000 1,065,000
Lease Revenue Bonds 2008 – NNLB Arena 1,725,000 - 550,000 1,175,000 575,000
Lease Revenue Bonds 2006 – Convention Center 7,630,000 - 655,000 6,975,000 460,000
Airport Revenue Bonds 2007 – Cons. Rental Car 22,000,000 - - 22,000,000 -
Lease Revenue Bonds 2008 - Riverside Golf Course 2,395,000 - 45,000 2,350,000 50,000
Lease Revenue Bonds 2008 - Convention Center 20,310,000 - 1,140,000 19,170,000 1,190,000
To ta l R e v e n u e a n d O t h e r B o n d s 576,377,442 - 18,831,200 557,546,242 16,641,578
L e s s D e f e r r e d A m o u n t s :
For Issuance (Discounts)/Premiums 7,090,805 - 668,638 6,422,167 -
On Refunding (4,865,552) - (532,835) (4,332,717) -
To ta l D e f e r r e d A m o u n t s 2,225,253 - 135,803 2,089,450 -
N ot es P a y a b l e :
Agricultural Drainage Water Management Loan 404,829 - 132,619 272,210 136,729
Ground Water Recharge Construction Loan 652,690 - 100,740 551,950 103,714
Construction of Water Supply Disinfection Buildings 2,210,000 - - 2,210,000 88,223
Improvements on the Enterprise and Jefferson Canals 1,968,136 - - 1,968,136 39,060
Convention Center: Employee Benefits Cost Reimbursement
Settlement 687,752 - 66,264 621,488 69,744
To ta l N o t e s P a y a b l e 5,923,407 - 299,623 5,623,784 437,470
To ta l L o n g -t e r m D eb t 584,526,102 - 19,266,626 565,259,476 17,079,048
Ot h e r L o n g -t e r m L i a b i l i t i e s :
Compensated Absences and Health Retirement
Arrangement 13,261,813 3,311,400 2,987,153 13,586,060 2,088,745
Net OPEB Obligation 7,880,210 3,290,417 - 11,170,627 -
CVP Litigation Settlement 37,812,011 - 1,870,862 35,941,149 700,000
Accrued Closure Cost 21,774,479 - 1,148,330 20,626,149 900,000
Pollution Remediation 992,964 - 36,405 956,559 -
To ta l O t h e r L o n g -T e r m L i a b i l i t i e s 81,721,477 6,601,817 6,042,750 82,280,544 3,688,745
B u s i n e s s -t y p e L o n g -t e r m L i a b i l i t i e s T ot a l $666,247,579 $6,601,817 $25,309,376 $647,540,020 $20,767,793
E n d i n g
B a l a n c e
D u e W i t h i n
O n e Y e a r
B e g i n n i n g
B a l a n c e A d d i t i o n s R e d u c t i o n s
122
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
D i s c r e tel y P r es e n te d C o m p o n en t U n i t :
Ci t y o f F r e sn o C u l t u r a l A r t s P r o p e r t i e s :
N o t e s P a y a b l e:
New Market Tax Credit Clearinghouse $16,660,000 $- $- $16,660,000 $-
C o m p o n e n t U n i t L o n g -t e r m L i a b i l i ti e s T o ta l $16,660,000 $- $- $16,660,000 $-
E n d i n g
B a l a n ce
D u e W i t h i n
O n e Y ea r
B eg i n n i n g
B a l a n c e A d d i t i o n s R ed u c t i o n s
The following is a description of long-term liabilities at June 30, 2011:
Year Ended
June 30, 2011
Primary Government
(a)Revenue And Other Bonds
Governmental Activities
a. Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds
2002 Series A (Street Light Acquisition) $3,390,090
2002 Series A Street Light Acquisition Project bonds issued May 1, 2002.
Proceeds were used to refund the Lease Revenue Bonds 1992 Series A
Street Light Acquisition Project. Interest is at 4.25% to 5.00% on bonds
outstanding. Annual principal installments ranging from $615,000 to
$735,000 through October 1, 2015; interest due semiannually. The principal
amount due is reported net of deferred premium of ($25,090).
Repayment of the bonds is payable solely by revenues pledged in the lease
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City. The City’s obligation to make Base Rental
Payments is payable from any lawfully available funds of the City.
Revenues pledged for a total debt service is $3,756,119, until fiscal year
2016. During fiscal year 2011, $754,763 lease revenue was recognized,
while the 2011 debt service was $754,763.
b. Fresno Joint Powers Financing Authority: Lease Revenue Bonds, Series 2004 38,229,930
2004 Lease Revenue Bonds, Series 2004A ($15,810,000) 2004B
($8,100,000) and 2004C ($28,870,000), issued April 14, 2004. Proceeds
were used to fund the Calcot Project, Fire Department Projects, Downtown
Parking Projects, Santa Fe Depot Project, Roeding Business Park Project
Area and other capital projects. Interest is at 3.50% to 5.90% on bonds
outstanding. Principal due in annual installments of $1,140,000 to
$2,155,000 through October 1, 2034; interest due semi-annually. The
principal amount due is reported net of a deferred premium of ($74,930).
Repayment of the bonds is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a facility lease. The City’s obligation
to make Base Rental Payments is payable from any lawfully available funds
of the City. Revenues are pledged for a total debt service of $62,647,927
until fiscal year 2035. During fiscal year 2011, $3,874,293 lease revenue
was recognized, while the 2011 debt service was $3,874,293.
c. Fresno Joint Powers Financing Authority: Lease Revenue Bonds, Series 2008A
- No Neighborhood Left Behind 32,701,223
123
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
2008 Lease Revenue Bonds, Series 2008A ($38,210,000), issued April 29,
2008. Proceeds were used to refund the 2005 Series A Bond used for No
Neighborhood Left Behind Capital Improvements Projects. Interest is at
3.25% to 5.25% on fixed rate bonds. Principal due in annual installments of
$2,195,000 to $3,350,000 through April 1, 2023; interest due semiannually.
The principal amount due is reported net of a deferred premium of
($1,380,970) and a refunding charge of $459,747.
Repayment of the bonds is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a Master Facilities Sublease. The
City’s obligation to make Base Rental Payments is payable from any
lawfully available funds of the City. Revenues are pledged for a total debt
service of $42,564,638 until fiscal year 2023. During fiscal year 2011,
$3,708,762 revenue was recognized, while the 2011 debt service was
$3,708,762.
d. Parks: Lease Revenue Bonds Series 2008 C & D (Various Parks
Improvements) 33,030,233
Fresno Joint Powers Financing Authority Lease Revenue Bonds Series C
($33,675,000 tax-exempt) and Series D ($1,530,000 taxable), issued June
12, 2008. Proceeds were used to provide funds to finance various capital
projects for improvements to various parks and community centers. Interest
is 3.25% to 5.00% on outstanding bonds. Annual principal installments
range from $700,000 to $2,090,000 through April 1, 2038; interest due
semiannually. The principal amount due is reported net of a deferred
discount of $374,767.
Repayment of the bonds is payable from a pledge of revenues consisting
primarily of Base Rental Payments to be paid by the City of Fresno to the
Authority pursuant to a Master Facilities Sublease. The City’s obligation to
make Base Rental Payments is payable from any lawfully available funds of
the City. Revenues are pledged for a total debt service of $59,174,550 until
fiscal year 2038. During fiscal year 2011, $2,193,346 lease revenue was
recognized, while the 2011 debt service was $2,193,346.
e. Lease Revenue Bonds, Series 2008E – City Hall Chiller Project 3,358,756
2008 Lease Revenue Bonds, Series E ($3,405,000 – Tax-exempt), issued
August 14, 2008. Proceeds were used to provide funds to finance the City
Hall Chiller capital project. Interest is at 4.50% to 4.60% on bonds
outstanding. Principal due in annual installments of $950,000 to $2,455,000
through April 1, 2024; interest due semiannually. The principal amount due
is reported net of a deferred discount of $46,244.
Repayment of the bonds is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a facility lease. The City’s obligation
to make Base Rental Payments is payable from any lawfully available funds
of the City. The total debt service is $5,386,090, until fiscal year 2024.
During fiscal year 2011, $155,680 lease revenues were recognized, while
the 2011 debt service was $155,680.
f. Lease Revenue Bonds, Series 2009A – Police & Fire Master Lease Projects 41,336,880
2009 Lease Revenue Bonds, Series A ($43,385,000 – Tax exempt), issued
April 3, 2009. Proceeds were used to provide funds to finance the
construction, acquisition and installation of various police and fire capital
improvements projects. Interest is at 3.00% to 6.375% on bonds
outstanding. Principal due in annual installments of $950,000 to $2,765,000
124
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
through April 1, 2039; interest due semiannually. The principal amount due
is reported net of a deferred discount of $733,120.
Repayment of the bonds is payable from a pledge of Revenues consisting
primarily of Base Rental Payments to be paid by the City of Fresno to the
Authority pursuant to a Master Facilities Sublease. The City’s obligation to
make Base Rental Payments is payable from any lawfully available funds of
the City. The total debt service is $86,411,636, until fiscal year 2039.
During fiscal year 2011, $3,110,181 revenues were recognized as Base
Rental Payments, while the 2011 debt service was $3,110,181.
g. Lease Revenue Bonds, Series 2010 – City Hall Refinancing, Bee Building,
Granite Park, Improvements 46,016,496
2010 Lease Revenue Bonds ($25,450,000 Tax-exempt & $21,045,000
Taxable), issued June 4, 2010. Proceeds were used to provide funds to
current-refund 2000 Fresno City Hall Lease Revenue Bonds, acquire the
Fresno Bee Building and Granite Park, and provide improvements to
Fresno City Hall and the Downtown Spiral Parking Garage. Interest is at
3.47% to 7.30% on bonds outstanding. Principal due in annual installments
through August 1, 2030; interest due semiannually. The principal amount
due is reported net of a refunding charge of $478,504.
Repayment of the bonds is payable from a pledge of Revenues consisting
of Base Rental Payments to be paid by the City of Fresno to the Authority
pursuant to a Master Facilities Sublease. The City’s obligation to make
Base Rental Payments is payable from any lawfully available funds of the
City. The total debt service is $74,398,463 until fiscal year 2031. During
fiscal year 2011, $1,592,772 revenues were recognized as base rental
payments while the 2011 debt service was $1,592,772.
h. Taxable Pension Obligation Bonds Refunding Series 2002 168,705,000
2002 Pension Obligation Bonds issued February 21, 2002. Proceeds were
used to refund the Refunding Series of 2000 Taxable Pension Obligation
Bonds. Interest is at 6.02% to 6.55% on bonds outstanding. Annual
principal installments of $5,255,000 to $15,195,000 through June 1, 2029;
interest due semiannually.
Payment of principal and interest on the Bonds is not limited to any special
source of funds of the City. Assets of the Systems, however, are not
available for payment of the Bonds. The total debt service is $291,423,369,
until fiscal year 2029. During fiscal year 2011, $220,144,494 General Fund
revenues were recognized, while the 2011 debt service was $16,190,004.
i. City of Fresno Judgment Obligation Refunding Bonds, Series 2002 3,216,659
2002 Judgment Obligation Bonds issued May 23, 2002. Proceeds were
used to refund a portion of the Judgment Obligation Bonds Series 1994,
and the Judgment Obligation Refunding Bonds Series 1998. Interest is at
4.00% to 4.70%. Principal due in annual installments of $405,000 to
$525,000 through August 15, 2017; interest due semiannually. The principal
amount due is reported net of a deferred discount of $13,341.
The City’s obligation to repay the bonds is not limited to any special source
of funds of the City. No assurance can be given as to the amount and
source of money available to the City Treasurer for such transfer at any
particular time. The total debt service is $3,765,205, until fiscal year 2018.
During fiscal year 2011, $220,144,494 General Fund revenues were
recognized, while the 2011 debt service was $539,076.
125
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
Business-type Activities
a. Water: Water System Revenue Refunding Bonds 2003 9,244,173
2003 Water System Revenue Refunding Bonds issued April 23, 2003.
Proceeds were used to refund all of the 1993 Series A bonds and to finance
certain capital improvements to the Water System. Interest rates range from
4.00% to 6.00% on bonds outstanding. Principal due in annual installments
of $890,000 to $1,310,000 through June 2020; interest due semiannually.
The principal amount due is reported net of a deferred premium of
($267,054) and a refunding charge of $762,881.
Repayment of the bonds is payable solely from revenues derived from the
operation of the City Water System. All revenues of the City Water System
are pledged with the exception of connection fees and charges, refundable
deposits, and capital contributions. Revenues are pledged in parity with the
pledge securing the 2010 Bonds and the State loans, for a total debt
service of $12,398,275, until fiscal year 2020. During fiscal year 2011,
$69,372,794 Water System revenue was recognized, while the 2011 debt
service was $1,374,750.
b. Water: Water System Revenue Bonds 2010 Series A-1 and Series A-2 156,094,367
2010 Water System Revenue Bonds 2010 Series A-1 ($66,810,000 Tax-
Exempt) and Series A-2 ($91,340,000 Taxable BABs) issued on February
3, 2010. Proceeds were used to current-refund all of the 1998 bonds and to
finance certain capital improvements to the Water System. Interest rates
range from 3.00% to 6.75% on bonds outstanding. Principal due in annual
installments of $3,330,000 to $7,715,000 through June 2040; interest due
semiannually. The principal amount due is reported net of a deferred
premium of ($4,848,904), and a refunding charge of $1,408,995 on Series
A-1, and a deferred discount of $1,980,542 on Series A-2.
Repayment of the bonds is payable solely from revenues derived from the
operation of the City Water System, including federal subsidies to offset
35% of interest payments on these bonds. All Revenues of the City Water
System are pledged with the exception of connection fees and charges,
refundable deposits, and capital contributions. Revenues are pledged in
parity with the pledge securing the 2003 Bonds and the State loans, for a
total debt service of $317,446,100, until fiscal year 2040. During fiscal year
2011, $69,372,794 Water System revenues were recognized, while the
2011 debt service was $12,509,988.
c. Sewer: Sewer System Revenue Bonds (1993 Series A) 74,156,661
1993 Sewer System Revenue Bonds, Series A issued September 1, 1993.
Proceeds were used to provide funds for the rehabilitation and expansion of
the City’s Wastewater Treatment Facility. Interest rates range from 4.50%
to 6.25%. Principal due in annual installments of $45,000 to $10,090,000
through September 1, 2022; interest due semiannually. The principal
amount due is reported net of a deferred discount of $88,339.
Repayment of the bonds is payable solely from the operation of the City
Sewer System. All revenues of the City Sewer System are pledged with the
exception of connection fees and charges, refundable deposits, and capital
contributions. Revenues are pledged in parity with the pledge to secure
1995 and 2008 Bonds, for a total debt service of $93,242,663, until fiscal
year 2022. During fiscal year 2011, $76,628,147 Sewer System revenue
was recognized, while the 2011 debt service was $10,754,019.
126
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
d. Sewer: Sewer System Revenue Bonds 2008 Series A 162,099,837
2008 Sewer System Revenue Bonds, Series A issued July 24, 2008.
Proceeds were used to provide funds to improve the City’s Wastewater
Reclamation Facility and to refund the Sewer System 2000A bonds and a
portion of the Sewer System 1995 Series A bonds. Interest rates range
from 4.625% to 5.00%. Principal due in annual installments off $5,410,000
to $13,090,000 through September 1, 2037; interest due semiannually. The
principal amount due is reported net of a deferred premium of ($3,831,761)
and a refunding charge of $1,576,924.
Repayment of the bonds is payable solely from the operation of the City
Sewer System. All revenues of the City Sewer System are pledged with the
exception of the connection fees and charges, refundable deposits, and
capital contributions. Revenues are pledged in parity with the pledge to
secure 1993 and 1995 Bonds, for a total debt service of $313,193,604, until
fiscal year 2038. During fiscal year 2011, $76,628,147 Sewer System
revenue was recognized, while the 2011 debt service was $7,948,844.
e. Solid Waste: Solid Waste Management Enterprise Revenue Bonds (Fresno
Sanitary Landfill Closure Project and Acquisition of Solid Waste Bins) (2000
Series A) 7,474,038
2000 Solid Waste Management Enterprise Revenue Bonds Series A issued
May 25, 2000. Proceeds were used to finance the closure of the City’s
Sanitary Waste Landfill Facility and to purchase solid waste bins. Interest
rates range from 5.20% to 6.00% on outstanding bonds. Principal due in
annual installments of $230,000 to $625,000 through May 1, 2030; interest
due semiannually. The principal amount due is reported net of a deferred
discount of $25,962.
Repayment of the bonds is payable solely from the operation of the City
Solid Waste Management System. All revenues of the City Solid Waste
Management System are pledged. Revenues are pledged for a total debt
service of $12,675,379, until fiscal year 2030. During fiscal year 2011,
$51,753,225 Solid Waste System revenue was recognized, while the 2011
debt service was $667,681.
f. Convention Center: Fresno Joint Powers Financing Authority: 1998 Exhibit
Hall Expansion Project 24,072,898
1998 Exhibit Hall Expansion Project Bonds issued September 1, 1998.
Proceeds were used to provide funds for the construction of an exhibit hall
expansion to the City of Fresno’s Convention Center. Interest is at 4.50% to
5.00% on outstanding bonds. Annual principal installments range from
$1,126,578 to $1,737,405 through September 1, 2028; interest due
semiannually. The principal amount due is reported net of a deferred
discount of $358,344.
Repayment of the bonds is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a facility lease. The City’s obligation
to make Base Rental Payments is payable from any lawfully available funds
of the City. Revenues are pledged for a total debt service of $42,706,956
until fiscal year 2029. During fiscal year 2011, $2,383,361 revenues were
recognized as lease payments, while the 2011 debt service was
$2,383,361.
127
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
g. Airports: Airport Revenue Bonds 2000 36,392,938
City of Fresno Airport Revenue Bonds, Series 2000A and Series 2000B,
issued July 12, 2000. Proceeds were used to provide funds to finance a
portion of the cost of certain capital improvements at Fresno Yosemite
International Airport. Interest is at 5.50% to 6.00% on outstanding bonds.
Annual principal installments range from $935,000 to $5,695,000 through
July 1, 2030; interest due semiannually. The principal amount due is
reported net of a deferred discount of $37,062.
Repayment of the bonds is payable solely from the operation of the City
Airport System. All revenues of the City Airport System are pledged with the
exception of grant monies, loan or bond proceeds, lease rentals, insurance
proceeds, payments received pursuant to a Swap Agreement, amounts
deposited into the Construction fund prior to the date of beneficial
occupancy, proceeds from sale or disposal of City Airports property, and
revenues derived from FYI Airport properties which are required to be
deposited to the Airways Golf Course Capital fund. Revenues are pledged
in parity with the pledge to secure 2007 Bonds, for a total debt service of
$62,175,450, until the year 2031. During fiscal year 2011, $18,130,636
Airport System revenue was recognized, while the 2011 debt service was
$2,989,910.
h. Fresno Joint Powers Financing Authority: Lease Revenue Bonds Series
2001A, Series 2001B, Multi-purpose Stadium 39,121,784
2001 Multi-Purpose Stadium Lease Revenue Bonds issued May 15, 2001.
Proceeds were used to provide funds to acquire and construct a
multipurpose outdoor stadium. Interest is at 4.75% to 7.03% on bonds
outstanding. Annual principal installments range from $1,065,000 to
$3,250,000 through June 1, 2031; interest due semiannually. The principal
amount due is reported net of a deferred premium of ($71,784).
Repayment of the bonds is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a facility lease. The City’s obligation
to make Base Rental Payments is payable from any lawfully available funds
of the City. The total debt service is $68,903,193, until fiscal year 2031.
During fiscal year 2011, $3,446,061 revenues were recognized as lease
payments, while the 2011 debt service was $3,446,061.
i. Fresno Joint Powers Financing Authority: Lease Revenue Bonds, Series 2008
A & B – No Neighborhood Left Behind - Refunding of Arena 1994 Capital
Improvement Debt. 1,187,758
2008 Lease Revenue Bonds, Series 2008A ($340,000 – tax exempt) and
Series 2008B ($2,405,000 - taxable), issued April 29, 2008 to refinance
Selland Arena. Proceeds were used to refund Series 2005A Revenue
bonds and finance various capital projects. Interest is at 4.00% to 5.00%
on fixed rate bonds and varies on the ACR bonds. Principal due in annual
installments of $575,000 to $600,000 through April 1, 2013; interest due
semiannually. The principal amount due is reported net of a deferred
premium of ($31,358) and a refunding charge of $18,600.
Repayment of the bonds Is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to a facility lease. The City’s obligation
to make Base Rental Payments is payable from any lawfully available funds
of the City. The total debt service is $1,258,000, until fiscal year 2013.
During fiscal year 2011, $630,500 revenues were recognized as Base
Rental Payments, while the 2011 debt service was $630,500.
128
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
j. Fresno Joint Powers Financing Authority: Lease Revenue Bonds, Series 2006
A & B Convention Center Improvement Projects 6,971,661
2006 Lease Revenue Bonds, Series 2006A ($15,420,000 – Tax-exempt)
and 2006B $3,305,000 - Taxable), issued June 28, 2006. Proceeds were
used to finance the construction and acquisition of convention center
improvements. Interest is at 4.00% to 5.50% on tax-exempt bonds and
5.5% on the taxable bonds. Principal due in annual installments of
$320,000 to $575,000 through October 1, 2026; interest due semiannually.
The principal amount due is reported net of a deferred discount of $3,339.
Repayment of the bonds Is payable solely by revenues pledged in the trust
agreement consisting primarily of Base Rental Payments to be received by
the Authority from the City pursuant to the Facilities Sublease. The City’s
obligation to make Base Rental Payments is payable from any lawfully
available funds of the City. Revenues are pledged for a total debt service of
$9,574,697 until fiscal year 2027. During fiscal year 2011, $971,321 lease
revenue was recognized, while the 2011 debt service was $971,321.
k. Airports: Airport Revenue Bonds 2007 22,000,000
City of Fresno Airport Revenue Bonds, Taxable Series 2007 issued May 31,
2007. Proceeds were used to construct a consolidated rental car facility and
related improvements at the Fresno Yosemite Airport. Interest is at 5.833%
on outstanding bonds. Annual principal installments range from $15,000 to
$2,265,000 between July 1, 2012 and July 1, 2037; interest due
semiannually.
Repayment of the bonds is payable solely from the operation of the City
Airport System. All revenues of the City Airport System are pledged with the
exception of grant monies, PFC Revenues, loan or bond proceeds, lease
rentals, insurance proceeds, payments received pursuant to a Swap
Agreement, amounts deposited into the Construction fund prior to the date
of beneficial occupancy, proceeds from sale or disposal of City Airports
property, and revenues derived from FYI Airport properties which are
required to be deposited to the Airways Golf Course Capital fund.
Revenues are pledged in parity with the pledge to secure 2000 Bonds, for a
total debt service of $47,356,051, until fiscal year 2038. During fiscal year
2011, $18,130,636 Airport System revenue was recognized, while the 2011
debt service was $1,283,260.
l. Parks: Lease Revenue Bonds Series 2008 C & D (Riverside Golf Course) 2,323,558
Fresno Joint Powers Financing Authority Lease Revenue Bonds Series C
($2,375,000 tax-exempt) and Series D ($105,000 taxable), issued June 12,
2008. Proceeds were used to finance Riverside Golf Course capital
projects. Interest is 3.25% to 5.00% on outstanding bonds. Annual principal
installments range from $50,000 to $150,000 through April 1, 2038; interest
due semiannually. The principal amount due is reported net of a deferred
discount of $26,442.
Repayment of the bonds is payable from a pledge of Revenues consisting
primarily of Base Rental Payments to be paid by the City of Fresno to the
Authority pursuant to a Master Facilities Sublease. The City’s obligation to
make Base Rental Payments is payable from any lawfully available funds of
the City. The total debt service is $4,229,569 until fiscal year 2038. During
fiscal year 2011, $154,510 revenues were recognized as Base Rental
Payments, while the 2011 debt service was $154,510.
m. Lease Revenue Bonds, Series 2008 F – Convention Center Improvement
Project 18,496,019
129
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
2008 Lease Revenue Bonds, Series F ($21,410,000 – Taxable), issued
August 14, 2008. Proceeds were used to refund a portion of the 2006
Convention Center Bonds and to finance various Convention Center
projects. Interest is at 4.991% to 6.70% on bonds outstanding. Principal
due in annual installments of $1,190,000 to $2,175,000 through April 1,
2023; interest due semiannually. The principal amount due is reported net
of a deferred discount of $108,664 and a refunding charge of $565,317.
Repayment of the bonds is payable from a pledge of Revenues consisting
primarily of Base Rental Payments to be paid by the City of Fresno to the
Authority pursuant to a Master Facilities Sublease. The City’s obligation to
make Base Rental Payments is payable from any lawfully available funds of
the City. Revenues are pledged for a total debt service of $27,988,456, until
the year 2023. During fiscal year 2011, $2,411,104 revenues were
recognized as Base Rental Payments, while the 2011 debt service was
$2,411,104.
Net Revenue and Other Bonds 929,620,959
Net Deferred Charges (1,464,717)
Total Primary Government Revenue And Other Bonds $928,156,242
(b)Tax Allocation Bonds
Governmental Activities
a. Fresno Joint Powers Financing Authority: Tax Allocation Revenue Bonds,
Series 2001 $5,589,560
2001 Tax Allocation Revenue Bonds, issued March 1, 2001. Proceeds were
used for redevelopment purposes within the Agency’s Merger No. 2 Project
Area and to repay a loan from the City of Fresno. Interest is at 4.10% to
5.50% on bonds outstanding. Principal due in annual installments of
$535,000 to $825,000 through August 1, 2018; interest due semiannually.
The principal amount due is reported net of a deferred premium of
($54,560).
Repayment of the bonds is payable solely from tax increment revenues
allocated to the Redevelopment Agency’s Merger No. 2 Project Area. All of
the above revenues are pledged with the exception of the 20% dedicated
Housing Allocation. Revenues are pledged until fiscal year 2018 for a total
debt service of $6,698,729. During fiscal year 2011, $3,749,048 Merger No.
2 Project Area tax increment revenue was recognized, while the 2011 debt
service was $880,728.
b. 2003 Tax Allocation Refunding Bonds, Series 2003: Mariposa Project Area 3,618,047
2003 Tax Allocation Refunding Bonds, Series 2003 (Mariposa Project Area)
was issued August 22, 2003. Proceeds were used to refund the Agency’s
1993 Tax Allocation Bonds, Series A (Mariposa Redevelopment Project).
Interest is at 4.75% to 5.625% on bonds outstanding. Principal due in
annual installments of $228,000 to $418,000 through February 1, 2018;
interest due annually. The principal amount due is reported net of a
deferred discount of $21,658 and a refunding charge of $110,295.
Repayment of the bonds is payable solely from tax increment revenues
allocated to the Redevelopment Agency’s Mariposa Project Area. All of the
above revenues are pledged with the exception of the 20% dedicated
Housing Allocation. Revenues are pledged until fiscal year 2023 for a total
130
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
debt service of $5,216,883. During fiscal year 2011, $1,181,213 Mariposa
Project Area tax increment revenue was recognized, while the 2011 debt
service was $429,956.
Net Tax Allocation Bonds 9,207,607
Net Deferred Charges 77,393
Total Primary Government Tax Allocation Bonds $9,285,000
(c)Notes Payable
Governmental Activities
a. City of Fresno: California Infrastructure and Economic Development Bank Loan $2,115,490
Thirty year loan dated March 18, 2004 from the California Infrastructure and
Economic Development Bank in the amount of $2,441,100, proceeds of
which were used to complete the Roeding Business Park. Principal and
interest at 3.530% due in annual installments of $61,167 to $131,212
through August 1, 2033. Secured by Facility Lease on City Hall Annex
between the City and the “I-Bank” with reciprocal Site Lease between the “I-
Bank” and the City.
b. City Debt: Energy Usage Conservation Loan Program 1,524,390
California Energy Commission Loan Program under the California Public
Resources Code dated July 12, 2004. Contract between the State of
California, California Energy Commission and the City to be used for solar
energy enhancements at the Municipal Service Yard. Principal and interest
at 3.920% to 3.950% due in 24 semi-annual installments of $114,883 to
$138,483 through December 2017. Repayment of the note is funded from
actual savings in energy costs resulting from the project or other available
Division funds.
c. Redevelopment Agency: California Infrastructure and Economic Development
Bank Loan 1,835,487
Thirty year tax allocation loan dated March 18, 2004 from the California
Infrastructure and Economic Development Bank in the amount of
$2,118,000 proceeds of which were used to complete the Roeding
Business Park. Principal and interest at 3.530% due in annual installments
of $53,071 to $113,845 through August 1, 2033; interest due semi-annually.
Repayment of the loan is payable solely from tax increment revenues
allocated to the Redevelopment Agency’s Roeding Project Area. All the
above revenues are pledged with the exception of the 20% dedicated
Housing Allocation. Revenues are pledged for a total debt service of
$2,678,468 until the year 2034. During fiscal year 2011, $763,681 Roeding
Project Area tax increment revenue was recognized, while the 2011 debt
service was $116,927.
d. City Debt: Regional Medical Center Section 108 Note 1,550,000
Regional Medical Center Section 108 Notes dated October 28, 1997 with
interest at 6.610% to 7.13% to be paid semi-annually. Principal payments
are due annually ranging from $175,000 to $270,000 through August 1,
2017.
131
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
e. City Debt: Fresno Madera Area Agency on Aging Section 108 Note 900,000
Fresno Madera Area Agency on Aging Section 108 Notes dated June 14,
2000 with interest at 7.198% to 7.958% to be paid semi-annually. Principal
payments are due annually ranging from $75,000 to $135,000 through
August 1, 2019.
f. City Debt: Neighborhood Streets/Parks Improvement Project Section 108 Note 1,117,000
Neighborhood Streets/Parks Improvement Project Section 108 Note dated
August 8, 2002 with interest at 4.160% to 6.120% to be paid semi-annually.
Principal payments are due annually ranging from $64,000 to $130,000
through August 1, 2022.
g. City Debt: Community Medical Center 450,000
Loan dated May 18, 2009 to assist City with expediting BNSF Quiet Zone in
the Downtown Area 0% interest for four years with payments annually
beginning in fiscal year 2011.
Business-type Activities
a. Water: Agricultural Drainage Water Management Loan 272,210
Agricultural Drainage Water Management Loan Program under the Water
Conservation and Water Quality Bond Law of 1986 dated March 1, 1992.
Contract between the State of California Department of Water Resources
and the City for an agricultural drainage water management project loan
under the Water Conservation and Water Quality Bond Law of 1986,
interest at 3.100%. Principal due in annual installments of $135,481 to
$136,729 through October 16, 2012; interest due annually. Repayment of
the note is funded from revenues of the Water Fund and any net proceeds
received from any settlement or judgment.
b. Water: Ground Water Recharge Construction Loan 551,950
Ground Water Recharge Construction Loan under the Water Conservation
Bond Law of 1988 dated February 22, 1993. Contract between the State of
California Department of Water Resources and the City for a ground water
recharge construction loan under the Water Conservation Bond Law of
1988, interest at 3.08%. Principal and interest due in semiannual
installments of $59,982 through April 1, 2016; interest due annually.
Repayment of the note is funded from revenues of the Water Fund.
c. Water: Water Supply Disinfection Buildings (Safe Drinking Water) Revolving
Loan 2,210,000
Contract between the State of California Department of Public Health and
the City dated July 1, 2009 to protect the City’s drinking water supplies from
Possible Contaminating Activities (PCA’s). Proceeds were used to construct
Water Supply Disinfection Buildings. Interest is at 2.2923%. Principal and
interest due in semiannual installments of $69,190 through October 1,
2030. Payments begin April 1, 2011. The amount approved for drawdown to
date was $2,210,000. The amount of actual drawdown to date was
$825,115.
Repayment of the note is funded from revenues of the Water Fund.
132
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Year Ended
June 30, 2011
d. Water: Enterprise & Jefferson Canal Improvements (Safe Drinking Water)
Revolving Loan 1,968,136
Contract between the State of California Department of Public Health and
the City dated July 1, 2009 for improvements on the Enterprise and
Jefferson Canals. Interest is at 2.2923%. Principal and interest due in
semiannual installments of $61,618 from January 1, 2012 through July 1,
2031. The amount approved for drawdown to date was $1,968,136. The
amount of actual drawdown to date is $0.
Repayment of the note is funded from revenues of the Water Fund.
e. Convention Center: Employee Benefits Cost Reimbursement Settlement 621,488
Management Agreement between the City of Fresno and SMG, a property
management group, dated January 1, 2009, to settle a conflict with
Employee Benefits Costs incurred by SMG. Interest is imputed at
5.12974068%. Principal and interest due in monthly installments of
$8,333.33 through December 31, 2018. Repayment of the note is funded
from revenues of the Convention Center Operating Fund.
Total Primary Government Notes Payable $15,116,151
Discretely Presented Component Unit
(a) Notes Payable
a. City of Fresno Cultural Arts Properties: Fresno Bee Building Loan A $12,690,500
Thirty year loan dated March 31, 2010 from Clearinghouse NMTC LLC in
the amount of $12,690,500, proceeds of which were used to purchase the
Fresno Bee Building and associated properties from the City of Fresno, to
be operated as a qualified active low-income community business in a
manner consistent with New Market Tax Credit requirements. Loan is due
March 1, 2040 with interest at 1.0% due monthly. Interest on both Fresno
Bee Building loans to be paid from annual base rent due in monthly
installments of $31,250 pursuant to Master lease agreement with City of
Fresno. Principal to be repaid upon sale of Property.
b. City of Fresno Cultural Arts Properties: Fresno Bee Building Loan B 3,969,500
Thirty year loan dated March 31, 2010 from Clearinghouse NMTC LLC in
the amount of $3,696,500, proceeds of which were used to purchase the
Fresno Bee Building and associated properties from the City of Fresno, to
be operated as a qualified active low-income community business in a
manner consistent with New Market Tax Credit requirements. Loan is due
March 1, 2040 with interest at 2.42% due monthly. Interest on both Fresno
Bee Building loans to be paid from annual base rent due in monthly
installments of $31,250 pursuant to Master lease agreement with City of
Fresno. Principal to be repaid upon sale of Property.
Total Component Unit Notes Payable $16,660,000
133
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Debt Service Requirements
The annual debt service requirements excluding capital lease obligations for City of Fresno long-
term debt outstanding as of June 30, 2011, are as follows:
Y e a r E n d i n g
Ju n e 3 0 P r i n c i p a l In t e r e s t P r i n c i p a l I n te r e s t
2012 $ 15,971,004 $ 21,938,933 $ 17,079,048 $ 30,767,857
2013 16,711,355 21,207,824 17,813,130 29,921,379
2014 17,321,066 20,425,503 18,010,408 28,983,447
2015 18,028,306 19,574,438 18,966,994 28,022,346
2016 17,821,049 18,705,379 20,055,037 27,027,484
2017-2021 93,014,639 79,158,648 105,901,546 119,180,556
2022-2026 95,013,156 52,088,324 102,607,020 91,923,736
2027-2031 76,931,403 22,296,192 110,780,924 62,547,769
2032-2036 26,680,389 7,560,020 92,775,919 31,925,689
2037-2041 11,895,000 1,313,363 59,180,000 6,544,945
S u b t o t a l 389,387,367 264,268,624 563,170,026 456,845,208
D e f e r r e d C h a r g e s
(o n i s s u a n c e )(702,126) - 2,089,450 -
T o t a l $ 388,685,241 $ 264,268,624 $ 565,259,476 $ 456,845,208
B u s i n e s s -t y p e
A c t i v i t i e s
G o v e r n m en t a l
A c t i v i ti e s
Debt Compliance
There are a number of limitations, restrictions and covenants contained in the various loan, note
and bond indentures. The City believes it is in compliance with all
significant limitations, restrictions and covenants.
Debt Management Policy
On December 3, 2009, the Fresno City Council adopted a Debt
Management Policy which sets forth certain debt management
objectives and establishes overall parameters and provides
general direction in the planning for issuing and administering the
City’s debt. The purpose of the Policy is to assist in the City’s
ability to incur debt and other long-term obligations at favorable
interest rates for capital improvements, facilities and equipment which
are beneficial to the City and necessary for providing essential services. Recognizing that cost-
effective access to the capital markets depends on prudent management of the City’s debt
program, the City Council adopted the Debt Management Policy by resolution.
The purpose of the Debt Management Policy is to assist the City in the pursuit of the following
equally important objectives:
Minimize debt service and issuance costs
Maintain access to cost-effective borrowing;
Achieve the highest practical credit rating;
Full and timely repayment of debt;
Balance use of pay-as-you-go and debt financing;
Maintain full and complete financial disclosure and reporting;
Ensure compliance with applicable State and Federal laws.
134
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The adopted resolution integrated the best practices of other debt management plans utilized by
similar California cities and made them applicable to the City of Fresno. The plan is consistent
with the provisions of the City Charter, and any enabling legislation. It incorporated existing
business practices and informal debt issuance and management policies and it established
parameters for issuing debt and managing a debt portfolio. These encompassed the City's
capital improvement needs and its ability to repay financial obligations using a long term financial
planning model. Debt management policies are viewed as helping to improve the quality of
decisions, provide justification for the structure of debt issuance, identify policy goals, and
demonstrate a commitment to long term financial planning. The resolution established conditions
for the use of debt and created procedures and policies that are viewed as being able to
minimize the City's debt service and insurance costs, retain the highest credit rating for the City,
and maintain full and complete disclosure and reporting requirements.
Legal Debt Limit and Legal Debt Margin
Article XVI, Section 18 of the California Constitution, (the “debt limit”) prohibits cities (including
chartered cities), counties and school districts from entering into indebtedness or liability that in
any year exceeds the income and revenue provided for such year unless the local agency first
obtains two-thirds voter approval for the obligation. This general limitation has several important
exceptions as described below. It is important to remember that this limitation applies not only to
traditional bonds, but could apply to many forms of indebtedness or liability, such as installment
payment obligations, long-term service or construction contracts, letter-of-credit reimbursement
agreements and other types of arrangements commonly seen in public finance transactions.
In determining whether the arrangement under consideration might pose a problem under the
debt limit it is useful to ask the following questions:
Does the arrangement provide for payment in future fiscal years that comes out of
revenue generated in those years?
Does the arrangement call for payments by a city, County, or school district (as opposed
to other types of governmental agencies)?
If the answer to these two questions is “yes”, then the analysis should proceed to determine if
one of the exceptions to the debt limit applies. There are three major exceptions to the debt limit
that have been recognized by California courts – the Offner-Dean lease exception, the special
fund doctrine, and the “obligations imposed by law” exception.
As of June 30, 2011, the City’s debt limit (20% of valuation subject to taxation) was $5.61 billion.
This is in comparison with debt limits of $5.71 billion in 2010. The City’s legal debt margin is
equal to the City’s limit because it has no debt subject to the limitation.
Arbitrage
Under U.S. Treasury Department regulations, all governmental
tax-exempt debt issued after August 31, 1986, is subject to
arbitrage rebate requirements. The requirements stipulate, in
general, that the earnings from the investment of tax-exempt
bond proceeds that exceed related interest expenditures on the
bonds must be remitted to the Federal government on every fifth
anniversary of each bond issue. The City has evaluated each
general obligation bond, certificates of participation, and lease
135
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
revenue bond issues subject to the arbitrage rebate requirements and has deferred credits and
other liabilities in the governmental funds. Each Enterprise Fund has performed a similar
analysis of the debt the respective enterprises have issued which is subject to arbitrage rebate
requirements. Any material arbitrage liability related to the debt of the Enterprise Funds has
been recorded as a liability in the respective Fund. In addition, the Redevelopment Agency
records any arbitrage liability in deferred credits and other liabilities.
Special District Debt
The City is not obligated in any manner for the Special District
debt, but is acting as an agent for property owners in collecting the
assessments and forwarding the collections to the trustee or
paying agent, and initiating foreclosure proceedings, if appropriate.
Special District debt payable to bondholders was $4,641,642 at
June 30, 2011 as compared to $4,864,324 at June 30, 2010.
Capital Lease Obligations
The City entered into a long-term master lease agreement with De Lage Landen for the
purpose of financing the acquisition of equipment and furniture related primarily to Police and
Fire operations and General Services. These lease agreements
qualify as capital leases for accounting purposes and,
therefore, have been recorded at the present value of their
future minimum lease payments as of the inception date. Other
existing lease agreements with balances are with All Points
Capital, Pitney Bowes Credit Corporation and Koch Financial
Corporation. Balances are included in the Summary of Long-
Term Liabilities. In 2011, the City entered into three lease
arrangements; one for three fire trucks, one for four Police
motorcycles and one for five Police undercover vehicles all of
which are included in the table below.
Debt service requirements are presented below. Interest rates range from 2.140% to 8.500%.
Y e a r E n d i n g
J u n e 3 0 P r i n c i p a l I n t e r e s t
2012 $ 1,925,314 $ 485,350
2013 1,855,421 404,516
2014 1,543,936 328,842
2015 1,360,548 265,811
2016 918,451 210,965
2017-2021 2,202,866 632,386
2022-2026 864,950 154,639
T o t a l $ 10,671,486 $ 2,482,509 1
A c t i v i t i e s
G o v e r n m e n t a l
136
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Several of the leases were assigned to other leasing companies by De Lage Landen. These
agencies include, Banc of America Capital Corp, Sun Trust, US Bankcorp Equipment Finance,
Capital One Bank, and Comerica Leasing Corporation. The lease terms to the City however,
were unaffected.
Fresno County – Elkhorn Settlement
The City entered into a compromise settlement agreement in January of 2007 with Fresno
County in which the City agreed to pay $900,000 over a four year period due in four equal annual
installments of $225,000 each with no interest accruing for the Elkhorn Boot camp Facility. The
fourth and final payment was made on July 19, 2010 which fell in fiscal year 2011.
General Fund Obligations – Short-Term Borrowing
The City issued Tax and Revenue Anticipation Notes (TRANS) in the amount of $56.3 million at
a coupon rate of 2.00% and a net interest cost of 0.4470%. The City’s net proceeds of $56.941
million were used to fund uneven cash flows in the General Fund due to timing differences
between revenues and expenditures. TRANS were issued on July 1, 2010, and matured on
June 30, 2011. These notes were collateralized by unrestricted revenues.
Note 8.INTERFUND ACTIVITY
(a)Due to/from Other Funds
Due to Other Funds represents short-term borrowings resulting
from a funds temporary need for additional cash. Primarily,
these amounts have been recorded when funds overdraw their
share of pooled cash. These balances are generally expected to
be repaid within the next twelve-month fiscal operating cycle.
As part of her 2011 mid-year strategy, the Mayor chose to utilize
$9.3 million of the Emergency Reserve to address specifically
identified funds. The second phase of her plan includes funds
that require workout plans beyond FY 2011 and includes General
Fund resources which were already considered in the Adopted Budget 5-Year Forecast and
Non-General Fund resources. The workout plan ranges from one to ten years and relies on
currently existing revenue streams ($2.6 million from the General Fund and $9.8 from Non-
General Fund sources). The specifics of these plans are still being finalized.
137
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The composition of interfund balances as June 30, 2011, is as follows:
R e c e i v a b l e F u n d P a y a b l e F u n d A m o u n t
General Fund Internal Service Funds $937
Grants Special Revenue Fund Internal Service Funds 497,820
Redevelopment Agency, Debt Service General Fund 28,852
Nonmajor Governmental Funds Grants Special Revenue Fund 6,996,867
Nonmajor Enterprise Funds 3,711,018
Internal Service Funds 124,202
10,832,087
Water System Internal Service Funds 62,389
Sewer System Internal Service Funds 15,581
Solid Waste Management Transit 671,699
Internal Service Funds 203,000
874,699
12,238,668
Transit Internal Service Funds 5,000
Airports General Fund 236,100
Nonmajor Governmental Funds 291,111
527,211
Nonmajor Enterprise Funds Internal Service Funds 10,986
Internal Service Funds General Fund 956,489
Fresno Convention Center 242,809
Stadium 85,920
Nonmajor Enterprise Funds 10,400,000
Internal Service Funds 1,033,987
12,719,205
T o t a l D u e t o /f r o m O t h e r F u n d s $25,574,767
138
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(b)Advances
Advances represent long-term borrowing between funds.
Advances over the years between the City and the Redevelopment Agency were made to
provide funds to eliminate blight and to develop, construct, rehab and revitalize Fresno’s inner
city neighborhood, downtown and industrial areas. The advances have all been secured by and
payable from the incremental property tax revenues of the redeveloped properties. Interest rates
have varied between 5% and 9% with payments on the advances and related interest based
upon budgetary priority as approved by the Redevelopment Agency. Redevelopment Agencies
were structured such that incremental property tax revenues would continue to be received
during the period that the debt remained outstanding.
In prior years, the City evaluated the collectability of all of its receivables including advances due
to the Redevelopment Agency. The City established an allowance for doubtful account which at
June 30, 2011 totaled $80,113,531. This amount was reflective primarily of principal and interest
accrued over the years on the advances. The allowance is the City’s acknowledgement that
there is a potential that the advances will not be fully collected.
On June 29, 2011, the Governor of the State of California signed Assembly Bills 1X 26 and 27 as
part of the State’s budget package. Assembly Bill 1X 26 required that each California
redevelopment agency suspend nearly all activities except to implement existing contracts, meet
already-incurred obligations, preserve its assets and prepare for the impending dissolution of the
agency. Assembly Bill 1X 27 provided a means for redevelopment agencies (Agency) to
continue to exist and operate by means of a voluntary alternative redevelopment program.
The League of California Cities and the California Redevelopment Association (CRA) filed a
lawsuit on July 18, 2011, on behalf of cities, counties and redevelopment agencies petitioning the
California Supreme Court (Court) to overturn Assembly Bills 1X 26 and 27 on the grounds that
these bills violated the California Constitution.
On December 29, 2011, the Court ruled that Assembly Bill 1X 26, the dissolution measure, is
largely upheld and is a proper exercise of the legislative power vested in the Legislature by the
State Constitution. A different conclusion was rendered with respect to Assembly Bill 1X 27,
which was invalidated in its entirety by the Court. While the Court upheld the Assembly Bill 1X
26, it modified some of the effective dates due to the stay during litigation.
The provisions requiring dissolution became effective February 1, 2012. Accordingly, the
Redevelopment Agency of the City of Fresno was dissolved effective that date, and a Successor
Agency was created to wind down Agency business. Guidelines for dissolution were set forth in
Assembly Bill 1X 26; however the resulting guidelines leave many more questions than provide
answers. The Bill does provide that once redevelopment agencies are dissolved, property tax
previously directed to redevelopment agencies for redevelopment projects would instead be paid
to local taxing entities.
It is the view of the City of Fresno that the debt shown on the City’s books owed by the
Redevelopment Agency is currently due and owing, subject to the final judgment of the City of
Cerritos case and/or additional litigation based upon as applied challenges as may be brought.
While it is considered premature to completely write off the debt owed by the RDA to the City of
Fresno, an allowance for doubtful accounts has been recorded in the full amount of the debt,
both principal and interest in the amount of $80.1 million. The effect of recording the allowance
139
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
to the financial statements is a reduction in advances due from the RDA and an increase to
Transfers Out.
The California Redevelopment Association is working to help cities and counties make sense of
the situation as drafts of cleanup legislation to address some ambiguities make their way through
the state Legislature.
The dissolution law provides that the Successor Agency shall pay “enforceable obligations” of
the former Agency. Enforceable obligations primarily include pending contractual commitments
of the former Agency. However, the law excludes from the definition of enforceable obligations
debt a former agency owes to the city that created it, unless the debt was created in the first two
years following the agency’s creation or debt that represents third party obligations, such as
bonds.
The records of the City of Fresno show that the former Fresno Redevelopment Agency owes
$80.1 million to the City. That debt was created over many years, largely representing
agreements where the City would expend money for a project in a redevelopment project area,
and the Agency agreed to reimburse the City.
Property tax is paid to redevelopment agencies only to the extent an agency carries debt in a
redevelopment project area. The concept of redevelopment is that money is borrowed to improve
and stimulate property values in an area, then as property values improve, the increase in
property value over a baseline, “increment,” is then paid to the agency to be used to fund further
improvements and ultimately to pay back debt.
It is the City’s position that the United States and California Constitutions prohibit the State from
impairing contracts. Here, the State has effectively impaired the ability of the City to be paid
debts owed to it by the former Redevelopment Agency. A lawsuit has been filed in the
Sacramento Superior Court challenging AB1x 26 on this basis, among others. The petitioners
include the City of Cerritos, its redevelopment agency, and nine other cities and agencies. While
a preliminary injunction was denied in January 2012, the petitioners have appealed to the Court
of Appeals. The trial court also stated that it was considering only a facial challenge to the law,
and not “as applied” challenges that may not be ripe until successor agency oversight boards,
county auditor/controllers, or the State Department of Finance reject specific debts owed to
cities. In any event, the City of Fresno could file its own suit based upon an as applied challenge
if and when the Fresno RDA debt is denied, regardless of the outcome of the Cerritos case.
An allowance for doubtful accounts is an account that reduces the reported amount of
outstanding receivables/advances that an entity expects to be able to collect, i.e., turn into cash
within the near term or ultimately if at all. While the City intends to vigorously defend its right to
collect the amounts due it from the RDA, the City recognizes that it may be several years before
this determination can be made. Therefore the City believes that the recording of the allowance
for doubtful accounts presents a more conservative and realistic measure of the amounts due
from the RDA becoming cash in the near term due to the volatility of the issue.
Interest for the advance between the Sewer System and General Fund is equal to two percent
(2%) above the City’s monthly Pooled Investment Rate. The first interest only payment was due
July 31st, 2008. Principal, at not less than 1/29 th of the original principal, and interest payments
are due annually thereafter.
Annual principal payments of $584,400 plus interest at rates between 3.79% and 4.75% are due
annually on the advance between the Airports Fund and the General Fund. The remaining
140
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
advances are interest free and payable on demand. The amounts are not expected to be repaid
within the next twelve-month fiscal operating cycle. The composition of interfund balances
(advances from/to other funds) as of June 30, 2011 is as follows:
R e c e iv a b l e F u n d P a y a b le F u n d A m o u n t
General Fund Redevelopment Agency, Debt Service Fund $32,061,627
(Allowance for Doubtful Account)(32,061,627)
Nonmajor Governmental Funds 12,690,500
Nonmajor Enterprise Funds 1,743,500
Internal Service Funds 2,394,650
16,828,650
Grants Special Revenue Fund Redevelopment Agency, Debt Service Fund 38,219,346
(Allowance for Doubtful Account)(38,219,346)
-
Nonmajor Governmental Funds Redevelopment Agency, Debt Service Fund 3,331,710
(Allowance for Doubtful Account)(3,331,710)
-
Water System Redevelopment Agency, Debt Service Fund 97,031
(Allowance for Doubtful Account)(97,031)
-
Sewer System General Fund 422,897
Redevelopment Agency, Debt Service Fund 857,857
(Allowance for Doubtful Account)(857,857)
422,897
Airports General Fund 3,683,611
Redevelopment Agency, Debt Service Fund 4,711,310
(Allowance for Doubtful Account)(4,711,310)
3,683,611
Fresno Convention Center Redevelopment Agency, Debt Service Fund 559,788
(Allowance for Doubtful Account)(559,788)
-
Nonmajor Enterprise Funds Redevelopment Agency, Debt Service Fund 274,862
(Allowance for Doubtful Account)(274,862)
-
T o t a l A d v a n c e s $20,935,158 1
141
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The advance between the Airports Fund and the General Fund originated with a transfer of
Airport property. The Sewer System sold land to the General Fund for the purpose of
constructing a regional public safety training facility. The advance between the General Fund
and Nonmajor Enterprise Funds originated from a 1989 loan of $1,743,000 to the Parking Fund.
In the years 1990 through 1993 the General Fund indirectly made debt service payments for the
Municipal Service Center resulting in the advance between the General Fund and Internal
Service Funds for $2,394,650. The advance between the General Fund and Nonmajor
Governmental Funds provided $12.7 million for Financing Authorities to loan in connection with
the New Market Tax Credit transaction associated with the acquisition and sale of the Fresno
Metropolitan Museum.
(c) Transfers
Transfers represent subsidies by one fund to another in accordance with the budget and provide
support for various City programs and provide resources for the payment of debt service. The
following is a summary of interfund transfers for the year ended June 30, 2011.
General Fund Grants Special Revenue Fund $6,232
Nonmajor Governmental Funds 11,339,518
Solid Waste Management 726,000
Transit 321,900
Nonmajor Enterprise Funds 19,200
Internal Service Funds 1,751,209
14,164,059
Grants Special Revenue Fund General Fund 3,073,707
Nonmajor Governmental Funds 597,250
Nonmajor Enterprise Funds 11,700
3,682,657
Redevelopment Agency, Debt Service Fund General Fund 23,061,627
Grants Special Revenue Fund 22,219,346
Nonmajor Governmental Funds 3,460,701
Water System 97,031
Sewer System 857,857
Airports 4,155,380
Fresno Convention Center 559,788
Nonmajor Enterprise Funds 274,862
54,686,592
R e c e i v i n g F u n d P a y i n g F u n d A m o u n t
142
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
R e c e i v in g F u n d P a y i ng F u n d A m o u n t
Nonmajor Governmental Funds General Fund 17,671,185
Grants Special Revenue Fund 1,448,625
Redevelopment Agency, Debt Service Fund 14,598,797
Nonmajor Governmental Funds 24,871,850
Water System 319,526
Sewer System 322,057
Solid Waste Management 471,509
Transit 721,830
Airports 150,552
Fresno Convention Center 8
Nonmajor Enterprise Funds 3,366,383
Internal Service Funds 1,492,921
65,435,243
Transit Nonmajor Enterprise Funds 159,000
Fresno Convention Center General Fund 9,411,436
Nonmajor Governmental Funds 40,156
Internal Service Funds 20,182
9,471,774
Stadium General Fund 2,783,606
Redevelopment Agency, Debt Service Fund 26,915
Nonmajor Governmental Funds 17,470
Nonmajor Enterprise Funds 609,517
3,437,508
Nonmajor Enterprise Funds General Fund 7,300,770
Grants Special Revenue Fund 112,783
Nonmajor Governmental Funds 157,120
7,570,673
Internal Service Funds General Fund 3,388,030
Transit 1,000,000
Internal Service Funds 822,251
5,210,281
T o t a l T r a n s f e r s $ 163,817,787 1
143
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The General Fund transferred $17.7 million to Nonmajor Governmental Funds to provide support
for debt service payments and capital projects; $9.4 million to the Convention Center for debt
service as well as general operating support; and $1.7 million to the Stadium Fund for debt
service payments as well as $1 million for operating support; $1.7 million to Nonmajor Enterprise
Funds for Zoo and operating support; $3.3 million to Internal Service Funds for budgeted
transfers of leave payoffs and unemployment funds; and $1 million to Redevelopment Agency,
Debt Service Fund as allowances for doubtful accounts on advances. The General Fund
Emergency Reserve transferred $3 million to Grants Special Revenue Fund and $5.6 million to
Nonmajor Enterprise Funds to resolve negative fund issues.
Transfers of $14.6 million from the Redevelopment Agency Debt Service provided support for
construction purposes to Nonmajor Governmental Funds. Nonmajor Governmental Funds
transferred $15.5 million drawdowns of bond proceeds to other Nonmajor Governmental Funds
for construction purposes; $4.7 million to provide support for debt service payments; and $4.7
million for miscellaneous purposes. Nonmajor Enterprise Funds transferred $3.4 million to
Nonmajor Governmental Funds to provide support for debt service payments.
Nonmajor Governmental Funds transferred $8.1 million of Redevelopment Agency debt and $3.2
million of reimbursement and miscellaneous to the General Fund.
d) Recap of Interfund Activity
The following schedule recaps Interfund Activity at June 30, 2011:
D u e fr o m
O t h er F u n d s
D u e to O t h e r
F u n d s
A d v a n c e s
t o Ot h er
F u n d s
Ad v a n ce s
F r o m Ot h er
F u n d s Tr a n s f e r s In Tr a n s f e r s Ou t
Go v e r n m en t a l F u n d s :
General Fund $937 $1,221,441 $16,828,650 $4,106,508 $14,164,059 $66,690,361
Grants Special Revenue Fund 497,820 6,996,867 - - 3,682,657 23,786,986
Redevelopment Agency Debt
Service Fund 28,852 - - - 54,686,592 14,625,712
Nonmajor Governmental Funds 10,832,087 291,111 - 12,690,500 65,435,243 40,484,065
Total Governmental Funds 11,359,696 8,509,419 16,828,650 16,797,008 137,968,551 145,587,124
P r o p r ie t a r y F u n d s :
Water System 62,389 - - - - 416,557
Sewer System 15,581 - 422,897 - - 1,179,914
Solid Waste Management 874,699 - - - - 1,197,509
Transit 5,000 671,699 - - 159,000 2,043,730
Airports 527,211 - 3,683,611 - - 4,305,932
Fresno Convention Center - 242,809 - - 9,471,774 559,796
Stadium - 85,920 - - 3,437,508 -
Nonmajor Enterprise Funds 10,986 14,111,018 - 1,743,500 7,570,673 4,440,662
Internal Service Funds 12,719,205 1,953,902 - 2,394,650 5,210,281 4,086,563
To t a l $25,574,767 $25,574,767 $20,935,158 $20,935,158 $163,817,787 $163,817,787
144
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 9.DEFEASANCE AND REFUNDING OF LONG-TERM DEBT
(a) Current-Year Defeasances
The City of Fresno did not defease any bonds during Fiscal Year 2011.
(b) Prior-Year Defeasances
The Fresno Joint Powers Financing Authority advance-refunded $8.6 million of the 2006 Lease
Revenue Bonds (Convention Center Projects) through the issuance of
$24.815 million Par Lease Revenue Bonds on August 14, 2008 in order
to remediate a tax issue created by entering into a private-activity lease
arrangement at the City of Fresno’s Selland Arena (reflected as
Business-type Activities under Note 7 of the CAFR Footnotes). The
portion of the 2008 Lease Revenue Bonds that defeased the 2006
Lease Revenue Bonds was $10,199,233 compared to $8,600,000 par
which was refunded. The aggregate difference in debt service between
the refunding portion of the 2008 Lease Revenue Bonds is $2,969,067.
The defeasance resulted in an economic loss of $2,799,158. The $8.6
million, advance-refunded, is held in an escrow account by an
independent third-party trustee and therefore does not appear on the
City’s financial statements because it has been legally defeased.
The Fresno Joint Powers Financing Authority defeased the remaining $37.24 million of its 2005
Lease Revenue Bonds on April 29, 2008 through a refunding. $30.625 million were auction rate
securities that were being impacted by turmoil in the marketplace. The current-refunding fixed
the rates on the new bonds to take the Fresno Joint Powers Financing Authority out of the
auction rate market and remove interest rate risk from its portfolio. The remaining $6.615 million
were fixed rate bonds that were advance-refunded to free up assets securing the old debt so
they could be used to secure the new debt, and to remediate a tax issue. The new bonds are
Fresno Joint Powers Financing Authority Lease Revenue Bonds Series A and Series B. The
aggregate difference in debt service between the 2008 Lease Revenue Bonds and the 2005
Lease Revenue Bonds is $2,974,629. The City inquired of the GFOA on how to calculate the
Economic Gain/(Loss) given the complexity caused by issuing fixed-rate bonds to refund
variable-rate bonds and refunding bonds with a Reserve Fund surety with new bonds having a
fully-funded Reserve Fund. Pursuant to a determination by the GFOA, the City has calculated
the economic loss on the advance-refunding to be $59,570. $1.05 million is held in an escrow
account by a third-party trustee, independent of the City and therefore does not appear on the
City’s financial statements because it has been legally defeased.
Liabilities for defeased bonds are not included in the City’s financial statements.
145
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 10.RISK MANAGEMENT FUND
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction
of assets; business interruption; errors and omissions; automobile
liability and accident claims; natural disasters; employee health
benefit claim payments; and injuries to employees (workers’
compensation). Within certain exceptions, it is the policy of the City to
use a combination of self-insurance and purchased commercial
insurance against property or liability risks of loss. The City believes it
is more economical to manage its risks internally and set aside funds
as needed for estimated current claim settlements and unfavorable
judgements through annual appropriations and supplemental
appropriations. The City maintains limited coverage for certain risks
that cannot be eliminated. At this time, the City is engaged in an
Owner-Controlled Insurance Program covering the wastewater
treatment expansion. The Risk Management Division investigates
and manages all liability claims and property losses, evaluates risk
exposure and insurance needs, protects against contractual loss by reviewing and preparing
insurance and indemnification portions of construction contracts, leases and agreements,
emphasizes ongoing operational loss control, and purchases all insurance coverage for the City.
The City maintains General Liability insurance, with limits of liability of $25,000,000. There is a
$3,000,000 self-insured retention (SIR). The City also maintains Airport Owners and Operators
General Liability insurance and Aviation (Aircraft Liability) insurance, with limits of liability of
$60,000,000 and $25,000,000 per occurrence, respectively. There is no deductible or self-
insured retention (SIR).
Furthermore, the City maintains Property insurance and Boiler and Machinery insurance, with
total insured values of $1,397,312,235 and limits of liability of $1 billion and $100,000,000 per
occurrence, respectively. There is a $100,000 deductible. Property insurance does not cover
losses due to seismic events. Finally, the City maintains Aviation (Aircraft Hull) insurance for its
two helicopters and one airplane, with limits of liability of $1,500,000 for each helicopter and
$180,500 for the airplane. There is a rotors in-motion deductible of 2% of insured value for each
claim, subject to a minimum of $7,500 and a $500 deductible for rotors not in-motion for each
helicopter. There are no physical damage deductibles for the airplane.
The City’s Workers Compensation Program consists of $2,000,000 self-insured retention with
purchased excess insurance layers up to the statutory limits.
Settled claims have not exceeded commercial insurance coverage in any of the last three fiscal
years.
The claims liabilities and worker’s compensation liabilities reported on the Statement of Net
Assets have been actuarially determined and include an estimate of incurred but not reported
losses.
Charges to other City funds by the Risk Management Fund are based on historical cost
information and are adjusted over a reasonable period of time so that Internal Service Fund
revenues and expenses are approximately equal. Reserves for self-insurance for these
programs include estimated liability amounts for claims filed against the City for their programs
as well as the estimated amount of claims incurred but not reported.
146
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The estimated liabilities of the Risk Management Internal Service Fund as of June 30, 2011, are
determined by the City based on recommendations from an independent actuarial evaluation.
The liabilities are based on estimates of the ultimate cost of claims (including future claim
adjustments expenses) that have been reported but not settled, and claims that have been
incurred but not reported (IBNR). The claims liability of $84,138,288 reported in the Risk
Management Internal Service Fund at June 30, 2011, is based on the requirement that claims be
reported if information prior to the issuance of the financial statements indicates it is probable
that a liability has been incurred at the date of the financial statements and the amount of loss
can be reasonably estimated.
The recorded liabilities for each program at June 30, 2011, are
as follows:
Workers' Compensation *$64,687,101
Liability and Property Damage *19,451,187
Total $84,138,288
* The liabilities for workers' compensation and general liability
are presented at present value, using a discount rate of 3%.
Changes in the funds claims liability amount for the last two fiscal years are as follows:
F i s c a l
Y e a r
E n d e d
J u n e 3 0
2010 74,618,774$ 24,164,782$ 19,643,825$ 79,139,731$
2011 79,139,731 24,873,285 19,874,728 84,138,288 1
E n d o f F i s c a l
Y e a r L i a b i l i t y
B e g i n n i n g o f
F i s c a l Y e a r
L i a b i l i t y
C u r r e n t Y e a r
C l a i m s a n d
C h a n g e s i n
E s t i m a t e s
C l a i m s
P a y m e n t s
See Note 11 for changes in funds claims liability related to Employees Healthcare Plan.
Note 11.EMPLOYEE BENEFIT PROGRAMS
(a)Retirement Plans
The Employees Retirement System and the Fire and Police
Retirement System (the Systems) are single-employer defined
benefit pension plans administered by two individual Retirement
Boards. The Systems provide retirement, disability, and death
benefits to plan members and beneficiaries. Cost-of-living
adjustments are provided to members and beneficiaries as provided
for in the City of Fresno's Municipal Code. Articles 3, 4 and 5 of the
Municipal Code of the City of Fresno assign authority to administer
the retirement systems to the respective Retirement Boards. The
Systems issue publicly available financial reports that include
financial statements and required supplementary information for the
Employees Retirement System and the Fire and Police Retirement
System. The reports may be obtained by writing the City of Fresno Retirement Office, 2828
Fresno Street, Suite 201, Fresno, California, 93721.
147
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Permanent full-time employees of the City of Fresno are eligible to participate in the respective
Employees Retirement or Fire and Police Retirement Systems. Employees working in limited,
interim, provisional, temporary, seasonal, or part-time positions are not eligible to participate in
the Systems. Participation is mandatory if an employee is eligible except in the case of the City
Manager, City Attorney, City Clerk, Department Heads and Council Assistants as provided in the
Fresno Municipal Code (FMC) Section 5-318. The City Manager, City Clerk, City Attorney,
Department Heads or Council Assistants, who are not already a member, may negotiate other
retirement benefits if such an agreement is established by resolution of the Council.
Basis of Accounting
The Systems use the accrual basis of accounting. Investment
income is recognized when it is earned and expenses are
recognized when they are incurred. Contributions are recognized
when due. Benefits and refunds are recognized when due and
payable under the terms of the Systems per Sections 3-523, 3-
529 and 3-322, 3-324 of the Municipal Code.
Securities lending transactions are accounted for in accordance
with GASB Statement No. 28, Accounting and Financial Reporting
for Securities Lending Transactions, which establishes reporting standards for securities lending
transactions. In accordance with Statement No. 28, cash received as collateral on securities
lending transactions and investments made with that cash are reported as assets and liabilities
resulting from these transactions and are both reported in the Statement of Fiduciary Net Assets.
In addition, the costs of securities lending transactions are reported as an expense in the
Statement of Changes in Fiduciary Net Assets.
Valuation of Investments
System investments are reported at fair value, calculated as cost plus
unrealized gains or losses. Short-term investments are reported at
cost, which approximates fair value. Securities traded on a national or
international exchange are valued at the last reported sales price at
current exchange rates. Investments in both bonds and mortgage-
backed pass-through certificates are carried at fair value.
Cost values are derived from Master Custodial Transaction Records.
The fair value of real estate investments is based on independent
appraisals. Investments that do not have an established market are
reported at estimated fair values.
Funding Policy
The contribution requirement of System members and the City of Fresno is established by
Municipal Code and administered by the Retirement Boards.
Contribution rates, which are based on the calculations of the
Systems' independent actuary and adopted by the Boards, are
presented as a percentage of annual covered salary/payroll.
Currently, the employer’s normal contribution rate for the
Employees System is 11.09%. However, no cash contributions
were required from the City as the employer contribution came
from prepaid contributions used of $8,214,569 on deposit with the system and the prefunded
148
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
actuarial accrued liability. For the Fire and Police System Tier I, the rate is 26.43% for the fiscal
year ended 2011, and for Tier II, the rate is 18.60%. A cash contribution of $3,457,053 for Tier I,
and $15,940,125 for Tier II, was required from the City.
Employees Fire & Police I Fire & Police II
Members' Average Rate 5.53% * 9.00%
Employer's Gross Rate 10.21 % 26.43% 18.60%
Prefunded Pct. Accrued
Liability Offset (10.21)% (6.58)% (1.25)%
Net Employer’s Rate 0 19.85% 19.85%
*The employee contribution rates are dependent upon entry age with rates for ages
25, 35, and 45 being 4.88%, 6.29% and 6.67% respectively.
Annual Pension Cost and Net Pension Obligation
The annual required contribution for the current year was determined as part of the June 30,
2010 actuarial valuation. The City's annual pension cost and net pension obligation (asset) for
the Employees Retirement System and the Fire & Police Retirement System for the fiscal year
ended June 30, 2011 were as follows:
Employees Fire & Police
Retirement Retirement
System System
Annual required contribution (ARC)$ 8,214,569 $ 19,397,178
Interest charged (earned) on net pension obligation - -
Adjustment to annual required contribution - -
Annual pension cost 8,214,569 19,397,178
Contributions made (8,214,569) (19,397,178)
Increase in net pension obligation - -
Net pension obligation (asset) beginning of year - -
Net pension obligation (asset) end of year $- $-
Three-Year Trend Information
The City of Fresno contributed 100% of its annual pension cost (APC) for the Employees
Retirement System and 100% of its annual pension cost (APC) for the Fire and Police
Retirement System in fiscal year 2011. Actual employer contributions were partially required in
the Employees Retirement System due to the prefunded actuarial liability of the system.
149
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
EMPLOYEES RETIREMENT SYSTEM
Fiscal Year
Funding
June 30
Annual
Pension
Cost [APC]
Percentage
of APC
Contributed
Net
Pension
Asset
2009 $ 2,363,720 56.92% $ (3,088,481)
2010 6,355,696 51.41% 0
2011 8,214,569 100% 0
FIRE AND POLICE RETIREMENT SYSTEM
Fiscal Year
Funding
June 30
Annual
Pension
Cost [APC]
Percentage
of APC
Contributed
Net
Pension
Asset
2009 $ 10,489,075 85.22% $ 0
2010 12,094,355 100% 0
2011 19,397,178 100% 0
The Schedules of Funding Progress, presented as RSI following the Notes to the Financial
Statements, present multiyear trend information about whether the actuarial value of plan assets
is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
Schedules of Funding Progress
EMPLOYEES RETIREMENT SYSTEM
Schedule of Funding Progress
(Dollars in Millions)
(1) (2) (3) (4) (5) (6)
Actuarial
Valuation
Date
Actuarial
Value
of Assets
Actuarial
Accrued
Liability
(AAL)
Percentage
Funded
(1) / (2)
(Prefunded)/
Unfunded
AAL
(2) - (1)
Annual
Covered
Payroll
(Prefunded)/
Unfunded AAL
Percentage of
Covered
Payroll
(4) / (5)
2010 $ 926 $ 756 122.5% $ (170) $ 131 (129.6%)
FIRE AND POLICE RETIREMENT SYSTEM
Schedule of Funding Progress
(Dollars in Millions)
(1) (2) (3) (4) (5) (6)
Actuarial
Valuation
Date
Actuarial
Value
of Assets
Actuarial
Accrued
Liability
(AAL)
Percentage
Funded
(1) / (2)
(Prefunded)/
Unfunded
AAL
(2) - (1)
Annual
Covered
Payroll
(Prefunded)/
Unfunded AAL
Percentage of
Covered
Payroll
(4) / (5)
2010 $ 1,019 $ 919 110.8% $ (99.31) $ 102 (96.7%)
Actuarial Assumptions
The actuarial assumptions used to compute contribution requirements and to determine funding
status are always based upon the prior year’s valuation, which for fiscal year 2011 is the
actuarial valuation performed as of June 30, 2010. The actuarial value of assets was determined
using techniques that smooth the effects of short-term volatility in the market value of
150
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
investments over a period of five years. The Systems do not have unfunded actuarial liabilities.
Additional information in the actuarial valuation follows:
Employee Fire & Police
Valuation Date 6/30/10 6/30/09
Actuarial Cost Method Projected Unit Credit Entry Age Normal Cost
Amortization Method Level Percentage Open Level Percentage Open
Remaining Amortization Period 15 Years 15 Years
Asset Valuation Method 5-year Smoothed Market 5-year Smoothed Market
Actuarial Assumptions:
Investment Rate of Return 8.00% 8.25%
Projected Salary Increases 4.60% + merit & longevity 4.00% + merit & longevity
Includes Inflation At 3.50% 3.75%
Cost-of-Living Adjustments 3.50% per year 1-5%** increase maximum of 5% ** 1st Tier Rank-Average Option: Increases are determined by the increases attached to ranks of active safety employees. 3-Year Average Option: Cost-of-living is based on the percentage of change in the weighted mean average monthly compensation attached to all ranks of members, as compared with the prior fiscal year and limited to a maximum of 5% per year.
** 2nd Tier - CPI increase, maximum of 3%.
Administrative Expenses
Section 3-532, Section 3-325 of the Fresno Municipal Code provides
that all administrative costs of the system shall be a charge against
the assets of the Employees Retirement System and Fire and Police
Retirement System, respectively.
Post Retirement Supplement Benefit Program
The Post-Retirement Supplemental Benefit ("PRSB") Program was
created to provide assistance to eligible retirees to pay for various
post-retirement expenses which in most cases consist of premiums for
health insurance or medications. Each Retirement Board will annually
review the actuarial valuation report and declare an actuarial surplus, if available, in accordance
with the procedures in Municipal Code Sections 3-567, 3-354.
If an actuarial surplus is declared, the surplus is allocated into two components. One component
composed of two-thirds of the declared surplus shall be used to reduce or offset the City's
pension required contributions. Any unused portion shall be reserved in the City Surplus Reserve
and drawn upon in subsequent years if needed. The remaining one-third component shall be
distributed among eligible post-retirement supplemental benefit recipients in accordance with
procedures in Municipal Code Sections 3-567(f)(4) and 3-354(f)(4). Any unused portion shall be
reserved in the PRSB Reserve and drawn upon in subsequent years if needed.
For the fiscal year ended June 30, 2011 the System distributed PRSB benefits for eligible
retirees in Employees Retirement System in the amount of $1,587,450 and offset the required
City pension contributions by $586,532 with the declared actuarial surplus. As of June 30, 2011,
the City Surplus Reserve balance was ($2,963,201) and the PRSB Reserve balance was
approximately $211,740 of which $211,740 is committed for PRSB distribution for the months of
July through December 2011. For the fiscal year ended June 30, 2011 the System distributed
benefits for eligible retirees in the Fire and Police Retirement System in the amount of
151
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
$1,936,537 and offset contributions by $440,134. As of June 30, 2011, the City Surplus Reserve
balance was ($3,092,969) and the PRSB Reserve balance was $269,117.
(b)Deferred Compensation Plan
The City offers its employees a deferred compensation plan in
accordance with Internal Revenue Code (IRC) Section 457. The plan,
available to all permanent full-time and part-time employees and Council
Members, permits deferral of a portion of the employee’s salary into a
tax-deferred program. The deferred compensation is not available to
employees or other beneficiaries for withdrawal until termination,
retirement, death, or unforeseeable emergency or loan program. Upon
separation from employment with the City, an individual may roll over
their deferred account into another IRS Allowable Plan or upon receipt,
the distribution will become taxable.
The Deferred Compensation Board contracted with Fidelity Management Trust Company as the
trustee and plan administrator. The City Retirement System assists Fidelity in the administration
of the Deferred Compensation Plan. In addition to the Retirement Office,
City staff in the Payroll section of the Finance Department, the City Attorney’s Office and
Information Services Department all assist in the administration of the Plan. The City has no
fiduciary accountability for the plan and, accordingly, the plan assets and related liabilities to plan
participants are not included in the basic financial statements.
(c) Compensated Absences
Vacation pay, which may be accumulated up to 600 hours
depending on an employee’s bargaining group and length of
service, is payable upon termination. Sick leave, which may be
accumulated up to 12 hours per month, has no maximum.
Several bargaining groups have payoff provisions at retirement
based on formulas specific to the groups. The majority of
employees however, do not have sick leave payoff provisions in
their bargaining group’s contract.
Annual leave, which may be accumulated up to 1200 hours is
payable upon termination or retirement. Holiday leave may be
accumulated indefinitely depending upon the bargaining groups
and is payable for active employees as well as at termination or
retirement. Annual leave allows for the cashing out of the higher of 25% of the accumulated
balance or 48 hours, once per fiscal year. Supplemental sick leave is awarded to unrepresented
management, middle management, professionals and to white collar employees at the rate of 40
hours at the beginning of each fiscal year. The balance can only be used after other leave
balances are exhausted, or for other specific reasons outlined in the various MOU’s or Salary
Resolutions. The balance is payable at termination or retirement or is accounted for as part of a
Health Reimbursement Arrangement (HRA) which is unfunded and expended on a pay-as-you-
go basis.
152
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Starting in FY 2006, some bargaining units selected to account for some or all of their sick leave
and supplemental sick leave balances as an HRA. The book value of these balances is
accounted for (by employee) in off-line spreadsheets, administered by HealthComp, is given
credit for calculated interest, and is used to pay health premiums for the employee, their spouse
and dependents – until their individual balance is exhausted. The HRA is not held in a trust but
rather is funded on a pay-as-you-go-basis. The portion of the City's obligation relating to
employees' rights to receive compensation for future absences, that is attributable to services
already rendered, is accrued when incurred in the government-wide, proprietary and fiduciary
fund financial statements. In fiscal year 2011, current year payments for compensated absences
on termination have been budgeted and paid from the department incurring the liability.
Accrued Employee Leave balances as of June 30, 2011, are as follows:
Go v e r n m e n t a l A c t i v i t i e s :
General Fund $ 37,272,967 $ 5,041,074
Grants Special Revenue Fund 2,013,171 231,382
Special Gas Tax 453,835 24,892
Measure C 403,214 74,021
Community Services 39,676 21,200
City Combined 28,871 814
Special Assessment 155,837 15,968
General Services 5,353,674 589,255
Risk 211,595 27,950
Total Governmental Activities 45,932,840 6,026,556
C u r r e n t P o r t i o n
To t a l
A c c r u e d
V a c a t i o n , S i c k
L e a v e , a n d H R ADepartment/A c t i v i t y
T o t a l
B u s i n e s s -t y p e A c t i v i t i e s :
Water System 1,990,473 219,703
Sewer System 1,804,933 276,127
Solid Waste Management 1,497,726 296,041
Transit 2,943,661 539,376
Airports 1,460,378 182,817
Convention Center 56,929 56,929
Community Sanitation 598,394 78,561
Parking 204,602 20,249
Development Services 2,134,318 288,214
Billing and Collection 894,646 130,728
Total Business-type Activities 13,586,060 2,088,745
Total $59,518,900 $8,115,301
C u r r e n t P o r t i o n
A c c r u e d
V a c a t i o n , S i c k
L e a v e , a n d H R ADepartment/A c t i v i t y
153
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Accrued employee leave balances related to governmental activities are recorded in the
Government-Wide financial statements.
(d) Termination Benefits
During fiscal year 2011, 15 employees received severance pay. These individuals received a
lump sum payment computed on base pay and years of service. This amount totaled $411,738.
(e) Health Benefit Plan
The City offers its employees participation in the Fresno City Employees Health and Welfare
Trust Plan. The Trust offers a self-insured medical plan for full-time and
permanent part-time employees and their dependents. The medical
plan is a PPO plan with a $200 individual annual deductible and a $600
annual family maximum. The Trust also provides dental, vision,
pharmacy and chiropractic coverage. Employees have the opportunity,
on an annual basis, to elect a reduced benefit level in which the plan
pays 60% of covered medical charges and the employee pays 40%, or
they may elect a higher benefit level in which the plan pays 80% of
covered charges and the employee pays 20%. Employees electing the
lower benefit level pay nothing for their coverage. Employees electing
the higher benefit level pay 20% of the monthly premium through payroll
deductions. City of Fresno retirees are also eligible for participation in
the plan by paying the full premium cost. The City is in the midst of
assessing the impact of the federal health care reform legislation on the City’s liabilities.
(f) Other Post Employment Benefits
Plan Description
The City of Fresno Retirees Healthcare Plan is a single-employer defined benefit medical plan
administered by Healthcomp and funded through the City of Fresno Health and Welfare Trust. It
is reported as an Internal Service Fund of the City and provides OPEB to eligible retirees and
his/her dependents, spouse or domestic partner. OPEB includes the authorization for retirees to
purchase health insurance through the plan at current employee rates. The establishment and
amendment of benefit provisions are negotiated between the employee bargaining units and the
City of Fresno, and are recommended by the City Manager
subject to the approval of the Mayor and the City Council. The
trust does not issue separate publicly available financial
statements.
The City of Fresno Blue Collar Retirees Healthcare Plan is an
agent multi-employer defined benefit plan administered by
Associated Third Party Administrators (ATPA) and funded
through Stationary Engineers Local 39 Health & Welfare Trust.
It is reported as an Internal Service Fund of the City and
provides OPEB to eligible retirees of Local 39 and his/her
dependents, spouse or domestic partner. OPEB includes the
authorization for retirees to purchase health insurance through
the plan at current employee rates. The establishment and amendments of benefit provisions
are negotiated between Local 39 bargaining unit and the City of Fresno, and are approved by the
154
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
City Manager and the City Council. Publicly available financial statements are not issued
separately.
Funding Policy
The establishment and amendment of contribution requirements are negotiated between
employee bargaining units and the City and are recommended by the City Manager subject to
the approval of the Mayor and City Council. The contribution requirement of plan members and
the City are funded on a pay-as-you-go basis. Although participant retirees pay 100% of their
premium costs, because retirees are allowed to purchase insurance at blended premium rates,
the City’s contribution is deemed to be that portion of retiree claims costs over premiums
required to be contributed by retirees. In fiscal year 2011 the City’s contribution, or implicit rate
subsidy, was deemed to be $2,294,600.
Actuarial Methods and Assumptions
Actuarial valuations for OPEB plans involve estimates of the value of reported amounts and
assumptions about the probability of events far into the future. Actuarially determined amounts
are subject to continual revision as results are compared to past expectations and new estimates
are made about the future. Projections of benefits for financial reporting purposes are based on
the OPEB benefits provided under the terms of the substantive plan in effect at the time of each
valuation and on the pattern of sharing of costs between the employer and plan members to that
point. The actuarial calculations of the OPEB plan are designed to reflect a long-term perspective
and include certain techniques used to reduce short-term volatility in the actuarial accrued
liabilities and actuarial value of assets.
The actuarial valuation date was June 30, 2010. The actuarial cost method used for determining
benefit obligations was the Projected Unit Credit. Amortization of the Unfunded AAL and the Net
OPEB Obligation used the level dollar method over a rolling 30 years, open basis. The
investment rate of return was changed from 4.5% to 4.0%. Projected salary increases are 2.0%
per year. Significant adjustments from the prior evaluation included a decrease in the overall
number of participants covered under the OPEB plan, and new claims data which produces
lower expected future claims costs for retirees. Trend rates for medical and prescription drug
begin at 10% then grade down to rates between 5% and 6%. These rates include a 3% inflation
assumption. Non-Medicare retirees are assumed to elect coverage at 35% for general, 70% for
safety and 35% for Local 39. 80% of White collar males, 90% of Blue Collar males, and 25% of
females were assumed to have a covered spouse upon retirement. Future Male retirees were
assumed to be three years older than their spouses, while future female retirees were assumed
to be two years younger than their spouses. All age 65 or over retirees were assumed to be
Medicare-eligible.
Funded Status and Funding Progress
The most recent valuation date was June 30, 2011. The funded status of the plan is 0%. The
actuarial value of plan assets is $0. At this time the City is not contemplating making
contributions to fund the plan based on the actuarial accrued liability (AAL). The schedule of
funding progress, presented in the Required Supplementary Information, presents multiyear
trend information.
155
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Actuarial Valuation as of June 30, 2010 under GASB 45 is as follows:
G e n e r a l
E m p l o y e e s S a f e t y T i e r 1 S a f e t y T i e r 2 T o t a l
Active - Eligible 460 146 54 156 816
Active - Not Eligible 1,229 41 813 451 2,534
Retiree 262 337 15 52 666
Total Count 1,951 524 882 659 4,016
Active - Eligible $3,741,141 $4,190,632 $868,078 $729,827 $9,529,678
Active - Not Eligible 17,384,790 10,331,011 85,467,012 2,348,976 115,531,789
Retiree 4,836,256 16,978,065 2,659,795 594,884 25,069,000
Total APVB $25,962,187 $31,499,708 $88,994,885 $3,673,687 $150,130,467
Active - Eligible $3,741,141 $4,190,632 $868,078 $729,827 $9,529,678
Active - Not Eligible 6,647,521 8,490,653 33,570,185 945,346 49,653,705
Retiree 4,836,256 16,978,065 2,659,795 594,884 25,069,000
Total AAL $15,224,918 $29,659,350 $37,098,058 $2,270,057 $84,252,383
Actuarial Value of Assets $0 $0 $0 $0 $0
Unfunded Actuarial Accrued Liability $15,224,918 $29,659,350 $37,098,058 $2,270,057 $84,252,383
Funded Ratio 0%0%0%0%0%
Covered Payroll $104,502,900 $22,423,900 $81,977,900 $37,556,700 $246,461,400
1 UAAL as a % of Covered Payroll 15% 132%45%6%34%#
1
Total ARC for 2010/2011 $2,162,569 $2,277,759 $7,018,874 $275,795 $11,734,997
Annual Required Contribution (ARC)
Summary of Valuation Results (based on 4.0% discount rate)
Participant Count
Actuarial Present Value of Benefits (APVB) at June 30, 2010
Actuarial Accrued Liability (AAL) at June 30, 2010
Funded Status at June 30, 2010
R et i r e e s He a l t h c a r e P l a n B l u e C o l l a r
R e t i r e e s
H e a l t h c a r e
P l a n
156
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Annual OPEB Cost and Net OPEB Obligation
The City's annual OPEB cost,percentage of annual OPEB cost contributed to the plan, and the
net OPEB obligation for the current and two prior years are as follows:
Percentage of
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obiligation
6/30/2009 $ 2,958,300 24.67% $ 3,291,500
6/30/2010 1,842,326 33.16%4,522,823
6/30/2011 2,081,927 31.63%5,946,236
Percentage of
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obiligation
6/30/2009 $ 3,633,000 43.97% $ 3,402,200
6/30/2010 1,987,838 71.72%3,964,352
6/30/2011 2,207,074 69.62%4,634,926
Percentage of
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obiligation
6/30/2009 $ 10,157,700 1.17% $ 15,594,900
6/30/2010 5,521,869 0.70%21,078,068
6/30/2011 6,643,049 0.63%27,679,417
Percentage of
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obiligation
6/30/2009 $ (3,200) (490.63%) $ 55,900
6/30/2010 259,527 19.79%264,068
6/30/2011 271,087 21.35%477,269
Percentage of
Fiscal Year Annual Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obiligation
6/30/2009 $ 16,745,800 14.70% $ 22,344,500
6/30/2010 9,611,560 22.13%29,829,311
6/30/2011 11,203,137 20.48%38,737,848
General Employees
Safety Tier 1
Safety Tier 2
Blue Collar
Total
157
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The annual required contribution for the current year was determined as part of the June 30,
2010, actuarial valuation. The City's annual pension cost and net pension obligation for the
Retirees Healthcare Plan and the Blue Collar Retirees Healthcare Plan for the fiscal year ended
June 30, 2011 were as follows:
Blue Collar
Retirees
General Healthcare
Employees Safety Tier 1 Safety Tier 2 Plan Total
Annual required contribution (ARC)$ 2,162,569 $ 2,277,759 $ 7,018,874 $ 275,795 $ 11,734,997
Interest charged on net OPEB obligation 180,913 158,574 843,122 10,563 1,193,172
Adjustment to annual required contribution (261,555) (229,259) (1,218,947) (15,271) (1,725,032)
Annual OPEB cost 2,081,927 2,207,074 6,643,049 271,087 11,203,137
Contributions made (658,514) (1,536,500) (41,700) (57,886) (2,294,600)
Increase in net OPEB obligation 1,423,413 670,574 6,601,349 213,201 8,908,537
Net OPEB obligation beginning of year 4,522,823 3,964,352 21,078,068 264,068 29,829,311
Net OPEB obligation end of year $ 5,946,236 $ 4,634,926 $ 27,679,417 $ 477,269 $ 38,737,848
1
Retirees Healthcare Plan
(g) Healthcare Plan Claims Liability
The recorded liability for the Employees Healthcare Plan at June 30, 2011, for employee health
benefit claim payments for direct provider care is $3,400,000.
Changes in the funds claims liability amount for the last two fiscal years are as follows:
F i s c a l
Y e a r
E n d ed
J u n e 3 0
2010 3,400,000$ 32,434,589$ 32,534,589$ 3,300,000$
2011 3,300,000 30,713,361 30,613,361 3,400,000
E n d o f F i s c a l
Y e a r L i a b i l i t y
B e g i n n i n g o f
F i s c a l Y e a r
L i a b i l i t y
C u r r e n t Y e a r
C l a i m s a n d
C h a n g e s i n
E s t i m a t e s
C l a i m s
P a y m e n t s
Note 12.NO-COMMITMENT DEBT
The City is not liable for repayment of any of the following bonds, and accordingly, they are not
reflected in the accompanying basic financial statements.
(a) Health Facilities Bonds
The City has remaining health facilities bonds totaling $102.915
million. These bonds were issued to provide administrative and
service facilities for St. Agnes Medical Center.
b)Industrial Development Bonds
The City has only one issue of industrial development bonds
totaling $885,000. These bonds were issued to purchase land
and construct a health equipment manufacturing plant within
the City’s Enterprise Zone.
p y g
158
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(c) Multifamily Housing Revenue Bonds
The City has issued multifamily housing revenue bonds totaling $24.440 million. The bonds were
issued to provide funds for the purchase and/or construction of multifamily housing facilities to
provide low-income housing to Fresno residents.
(d) Special District Debt
The City is not obligated in any manner for the Special District debt, but is acting as an agent for
property owners in collecting the taxes and assessments and forwarding the collections to the
trustee/paying agent, and initiating foreclosure proceedings, if appropriate. Special District debt
payable to bond holders was $641,642 at June 30, 2011 as compared to $4,864,324, at June 30,
2010.
Note 13.COMMITMENTS AND CONTINGENCIES
(a) Closure and Postclosure Care Cost
The City continues to monitor a former landfill site as part of the
Environmental Protection Agency's (EPA) Superfund program.
Management estimates the remaining monitoring costs as of
June 30, 2011, to be $20,626,149 and has recorded this liability
in the Solid Waste Enterprise Fund. It is anticipated that $1.1
million in monitoring costs and $900,000 in landfill site closure
costs will be paid in fiscal year 2012. The former landfill site
has not received solid waste since 1987 and was redesigned as
part of a 350-acre environmentally conscious facility to integrate
the former landfill site into a championship caliber sports
complex/regional park. The estimated total remaining postclosure care costs as of June 30,
2011 are based on the equipment, facilities, and services required to monitor and maintain the
closed landfill. The liability for postclosure care costs is an estimate and subject to change
resulting from inflation, deflation, technology or changes in applicable laws.
The Sports Complex includes: four championship lighted tournament softball fields and two
lighted tournament/practice softball fields; seven tournament soccer fields; picnic shelters; five
playgrounds; restrooms with concession booths and showers; hiking trails and arboretum; hilltop
overlook; and lake and waterfowl habitat island.
During fiscal year 1992, in accordance with Financial Accounting Standards Board (FASB)
Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation," the City recorded a receivable from rate payers approximately equal to the
original estimated liability for clean up and monitoring of the site. The statement provides for the
recording of the receivable because the City Council is empowered by statute, subject to
Proposition 218, to establish rates that bind customers, and the rate increase was designed to
recover only costs incurred related to the landfill site closure, rather than provide for similar future
costs. The amount receivable at June 30, 2011, is $17,933,866 and is paid through utility fees.
159
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(b)CVP Water Contract
The City’s 60,000 acre-foot water supply entitlement from the United States Bureau of
Reclamation (“USBR”) is equivalent to approximately 40% of the City’s annual water demand.
This supply, derived from the Friant Dam on the San Joaquin
River, is part of the USBR’s Central Valley Project (“CVP”) and
is the primary resource for the operation of the City’s current
(and future) surface water treatment plant.
On December 2, 2010, the City Council approved the
conversion of the City’s CVP water service contract into a
permanent repayment contract (“CVP Repayment Contract”).
The CVP Repayment Contract provides the City with a
permanent right to up to 60,000 acre-feet per year of water from
the CVP, provided that the City meets the obligations described
below.
On or before January 31, 2014, the City must pay-off the City’s share of the accumulated capital
costs of the CVP – an approximate $17.5 million obligation. Currently, this capital obligation is
amortized and included in the volumetric water rates the City pays to the USBR. Once the City
makes the capital pay-off to the USBR, the City will no longer pay the USBR tiered rates for its
CVP water supply. Once the capital costs are paid off and the contract obligations are met, the
contract becomes permanent and the City will no longer be required to engage in any
subsequent renewal negotiations or related environmental review processes related to its
ongoing entitlement to its CVP water supply.
In addition to the capital obligation described above, the City has
also accrued a share of the ongoing unpaid operation,
maintenance and interest costs associated with $19.2 million.
This obligation is also amortized and included in the volumetric
water rates the City pays the USBR and will continue as such
under the CVP Repayment Contract. The present value of the
City’s debt obligation to the Bureau has been capitalized in
accordance with Financial Accounting Standards Board
Statement No. 71 “Accounting for the Effects of Certain Types of
Regulation” in the Water System Proprietary Fund and is being
amortized against expected future revenues generated through
water rates. In accordance with FAS 71, the amount capitalized is
reflected in the City’s Water Fund under the caption “Unamortized CVP Water Settlement” and
totaled $36,636,042 on June 30, 2011, while the related liability reported as “CVP Litigation
Settlement” totaled $35,941,149 on June 30, 2011.
The City has been evaluating the potential of pursuing alternative debt financing for the
cumulative USBR debt obligation. In addition, recent water rate studies took into consideration
these financing alternatives, as did the Utility Commission deliberations.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The CVP Repayment Contract retains and continues the requirement from the City’s water
service contract that the City comply with "best management practices," including charging all
City customers based upon the actual amount of water delivered, that is, charging customers
based on metered use. Metering of all City water service connections requires the retrofit of
some City service connections. The CVP Repayment Contract requires
that the City complete the metering program by January 1, 2013. The
City is moving forward with the retrofit program and is on track to
comply with the January 1, 2013 deadline. Currently over 74,000
residential water meters have been installed out of approximately
110,000. At this time, the estimated cost of meter installation is
projected to be approximately $87 million. When this project is
completed, it will be the largest automatic metering infrastructure AMI
project in the Nation.
The City adopted residential metered rates on November 5, 2009
pursuant to Proposition 218. The metered rates took effect March 1,
2010. Under the new rate ordinance, once a meter has been installed,
the City charges that customer according to the applicable metered rate.
Consistent with the requirements of Proposition 218, the metered rate structure generates
revenues sufficient to cover the cost of providing water service to City customers, as did the prior
flat rate structure.
In late 2010, the City of Fresno was invited by the California Department of Public Health
(CDPH) to put forward a Statement of Intent expressing its interest in submitting an application
for funding under the CDPH (Category “H”) Safe Drinking Water State Revolving Fund
(SDWSRF) Low Interest Loan; 2010 – 2011 Construction (Tier 1) Funding Program. Standard
loan terms for these types of loans are typically for a period of
twenty (20) years at one-half (1/2) the State bond rates.
The purpose of the SDWSRF loan is to provide a reduced cost
funding alternative for the City’s Meter Retrofit Project while
affording redirection of available revenue to meet current fiscal
budgetary challenges.
While the original application submitted was for $30 million,
during the State’s application review period, the CDPH found
the City to be eligible as a Disadvantaged Community and as
such, project funding was converted to a no-interest (0%) loan. As
the total remaining estimated meter project completion costs were found to be approximately
$51.4 million, the funding offer was increased to $40 million with an additional availability of
$11.4 million for potential future fiscal funding. To realize the significant benefits offered through
the initial $40 million, no-interest funding opportunity, the funding agreement was required to be
approved and signed by June 30, 2011. The item was taken to and
approved by Council on June 30, 2011 to meet the deadline.
The SDWSRF loan funding will provide a financial avenue for City-
wide conservation projects to reduce water demand, ensure the
safekeeping of vital contract surface waters which can be used to
supplement and restore overused groundwater resources, and
afford reallocation of available funds. Certain capital projects that
had been earmarked for pay-as-you-go funding or future bond
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
financing may now take advantage of the interest free loan of $40 million to be repaid over a
term of twenty years.
The Residential Water Meter Retrofit Project began with funding originating from bonds issued in
February 2010. It is planned that the SDWSRF loan proceeds will replace these bond funds in
the amount awarded and the replaced bond funds will then be redirected to other critical and
eligible capital projects for the Water System. The acceptance of the SDWSRF loan presents
significantly more options thereby minimizing current and future impacts to the City’s five-year
rate plan, and its long-term financial impacts on ratepayers particularly during this difficult
economic times.
As a result of the City submitting its application for the SDWSRF loan, the adoption of a new five
year rate plan (FY 2012 – FY 2016) proposed by the City’s Utility Advisory Committee (UAC),
was delayed for approval. It is now anticipated that an approved
rate plan may be adopted sometime in FY 2012. Adoption of
the UAC rate plan scenarios would provide full funding for the
existing bonds and this new loan. In addition, the new loan
would effectively allow funding of some projects included in the
UAC plan at a reduced rate.
The SDWSRF loan is repayable from Department of Public
Utility (DPU) revenues, consisting of user water rates, fees and
charges. Throughout the life of the SDWSRF loan, the City
must maintain a debt coverage ratio of 1.25 (Rate Covenant)
meaning that net revenues from the water system must equal
125% of the total debt service payable from water system
revenues. The annual debt service payment on the SDWSRF
loan is approximately $2 million per year for twenty years. The City is also evaluating a proposal
to pay-off the $17.5 million capital balance due to the USBR prior to January 31, 2014.
(c)FAA Audit of the Fresno Yosemite International Airport
In early calendar year 2006, the Airports Compliance Division of the U.S. Department of
Transportation, Federal Aviation Administration, (FAA) performed
an on-site review of the Fresno Yosemite International Airport
(Airport). In August 2006 the review report was issued and
several corrective actions were suggested by the FAA including
certain conditions they believed the City should comply with as a
consequence of a transfer of airport property in the late 1990’s.
The FAA believed, based upon their understanding of the facts,
that the City’s General Fund should transfer certain sums to the
Airport enterprise fund for past financial and real estate
transactions. The City negotiated with the FAA and reached an
agreement which was subsequently approved by the City Council
on July 24, 2007.
The agreement reached with the FAA consisted of the City (General Fund) repaying the Airport
enterprise fund approximately $5.8 million plus interest of approximately $1.2 million over a
period of ten years. The balance is reported in the General Fund as advances to other funds.
The first payment was made in mid-November 2007 for FY 2008 with each subsequent payment
to be made each fiscal year thereafter. Three payments/transfers have been made for fiscal
years 2008, 2009 and 2010.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Due to the general state of the economy, the City has contacted the FAA at the beginning of
Fiscal Year 2011 to request a deferral of the next two years of payments/transfers from the
General Fund to the Airport in an effort to assist the General Fund through these difficult times.
The City also requested that the payback period be extended by two years. In June 2011, the
FAA responded by stating that the request to extend the payback period was denied. The
request to defer payments was also denied. However, the FAA did agree to reduce the required
payment to $250,000 in both Fiscal Years 2011 and 2012. The City made the $250,000
payment in Fiscal Year 2011 and will make the $250,000 payment in Fiscal Year 2012 as well.
Regular payments are scheduled to resume in Fiscal Year 2013 with that year’s payment,
including interest, totaling $944,000.
Other Litigation
There are various other lawsuits and claims pending against the City.
Although the outcome of these claims and lawsuits is not presently
determinable, management, after consultation with legal counsel, is of
the opinion that a majority of these matters will not have a material
adverse effect on the financial condition of the City at June 30, 2011,
with the exception of those cases that involve constitutional violations
whereby even a minimal verdict may result in an award of attorney’s
fees.
(d)Toxics Mitigation
Hammer Field
Contamination (primarily from the common solvent trichloroethylene, “TCE” was discovered and
identified in 1989, in soils and groundwater beneath property currently owned by the City. The
site known as Old Hammer Field (OHF), a prior Army military
base in the 1940’s, was the subject of investigation and
cleanup efforts which had previously been jointly funded by
Boeing, the U.S. Army Corps of Engineers and the City of
Fresno. The area had been used for the repair, overhaul,
maintenance, refurbishing and construction of aircraft during
and after World War II. The California Department of Toxic
Substances Control (DTSC) was the lead regulatory agency-
overseeing site cleanup.
It has been maintained by the City that all contaminants were
discharged by other parties, not by the City. As a non-contributory, overlaying landowner, the
City believed that it had limited fiscal liability for cleanup efforts.
DTSC issued a preliminary nonbinding allocation of responsibility
(NBAR) on December 23, 2003 placing the City’s share at five
percent, which was consistent with independent analysis
commissioned by the City. The Final Remedial Action Plan was
approved by the DTSC, and capital construction of the remedial
systems commenced. It was initially estimated that cleanup efforts
could last between 20 to 50 years, with total remaining clean up
costs estimated to be between $13 to $17 million (net present
value of capital and operations/maintenance) of which the City’s
share was estimated to equal 5% or $650,000 to $859,000 (as of
January 1, 2008).
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The United States of America (USA), the United States Army Corps of Engineers (USACE), the
United States National Guard Bureau (NGB) and the Boeing Company (Boeing) were all subject
to the NBAR; however the City had paid a significantly disproportionate share of the costs
despite its role as the nonpolluting landowner. The City, unlike Boeing and the United States
entities, continued to fund a major component of the RAP.
The City, on November 2, 2006 filed a law suit seeking fair and equitable compensation from the
United States parties and Boeing for their responsible shares of the cleanup costs of Old
Hammer Field. The goal of the City was to obtain a global resolution with respect to each party’s
fair and equitable percentage share of the contamination clean up costs and to ensure the
ongoing implementation of State-approved cleanup activities. In order to continue to protect the
health and safety of the public while the City sought to force the United States and Boeing to pay
their fair share of the cleanup, the City had and was committed to maintaining the most vital
component of the cleanup and investigation efforts that began over fifteen years previously. It
did this even with the City bearing the entire cost and expense to do so.
Negotiations resulted in a settlement agreement which calls for the Airports Department to be
responsible, going forward, for 10% of the cleanup costs. The settlement called for the US
Government and Boeing to make a joint one-time payment of $1,350,000 for past costs which
they made in Fiscal Year 2011.
The Court approved the settlement agreement which included the one-time payment noted
above, covenants not to sue and an operating agreement for purposes of coordinating further
efforts to implement the State-Approved Remedial Action Plan to obtain Site Closure. All parties
agreed to bear their own costs and expenses, including attorney’s fees in the case. The
Operating Agreement stipulates the form of operating committee, and the means for settling
disputes.
As of June 30, 2011 the Airport allocated $282,962 in additional Old Hammer Field litigation
costs as being reimbursable to FYI by the RDA. The RDA questioned whether or not they have
a responsibility to reimburse litigation costs as they maintained such costs are not eligible for
payment under the Fresno Air Terminal Redevelopment Area (FATRA) formation document.
The Airport maintains that since the RDA received the benefit of the reduced responsible
percentage that was negotiated in the settlement, then the RDA should pay its share of the legal
costs. The issue has been impacted by the dissolution of the RDA effective February 2012 and
the creation of the successor agency to wind down the business of the RDA.
While the Airport believes the RDA does owe this amount to the Airport for legal costs, the
Airport wrote off $1,944,070 of the original balance that had been recorded as a receivable due
from the RDA and recorded an allowance for uncollectible of $4,711,310 for the entire remaining
balance.
As of FY 2011 Advances to Other Funds related to the litigation and reflected as a receivable
from RDA nets to zero. It includes a beginning balance of $6,372,418, a prior year allowance for
uncollectible for $2,500,000, an FY 2011 accrual in the amount of $282,962, a reduction of
$1,944,070 recorded as transfers, and an addition to allowance for uncollectible of $2,211,310
also recorded as transfers.
164
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
In addition $291,111 in outstanding RDA reimbursements due, related to ERM expenditures, are
reflected in the fund Due from Other Funds at June 30.
A liability for future cleanup costs on the Old Hammer Field site is recorded on the FY 2011
CAFR in the amount of $956,559.The FY 2010 CAFR recorded an accrual of $992,964, derived
by calculating the net present value of the City’s share of the probable cost. Total costs have
been estimated to range between $10 and $20 million, based upon currently known data. The
clean up time frame has also been estimated and is expected to continue for 20 to 40 years with
the City’s share of cleanup costs to be 10%. Cleanup costs totaled $36,405 in FY 2011. The
estimate ranges take into consideration two contingency issues:
TCP contamination and whether or not it could ultimately impact Well 70 at some time in
the future. Well 70 is a major contributing facilitator in the current cleanup process; and
Capture at the “toe-of-plume”. A second “toe-of-plume” well as required by the State has
been installed and the City may be required to take additional action if the State is not
satisfied with the results. Costs for additional action, if any, cannot be estimated at this
time and are not included in the accrual.
The City will reevaluate this accrual annually and make adjustments as necessary.
DBCP, EDB and TCE Groundwater Contamination
The widespread occurrence of DBCP, an agricultural pesticide, has
been identified in certain groundwater throughout the Fresno
Metropolitan Area. At various City well sites, DBCP exceeds drinking
water limits and is removed by Granular Activated Carbon treatment.
The City fronted the costs of clean up with respect to the known wells
and reimbursed itself from a litigation settlement in an original amount
of approximately $21 million. $10 million was stipulated to be used
toward past costs, and $11 million was to be applied toward the
installation of carbon filtration treatment units, all of which have been
completed. Subject to numerical limits, the settlement arrangement
also provides for the City to be reimbursed for the capital costs of the
installation of granular activated carbon treatments (GAC) at wells
exceeding maximum contaminant levels with reimbursements ranging
from $337,500 to $540,000 depending on the well site. Funding also
is provided under the settlement for the on-going operation and
maintenance clean up costs of approximately $27,900 to $31,000 per
contaminated well (depending on type), adjusted for inflation, with
such payment obligations ending on June 26, 2035. The City is not
responsible for “cleanup” in the context common to hazardous
material remediation.
The City can elect to treat wells or simply shut them down. Future
costs to clean up and monitor new discoveries of contamination at
existing sites or additional sites that may be identified are being
budgeted as a contingency of approximately $500,000 per year and
are eligible for reimbursement under the settlement agreement through June 26, 2035.
165
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Pollution Remediation
Although the Redevelopment Agency (RDA) is generally not involved with operations that pose a
higher risk for environmental liabilities, properties acquired for redevelopment purposes could be
contaminated or may contain lead and/or asbestos. The RDA’s due diligence property acquisition
policies require that the RDA obtain a Phase I Environmental Site
Assessment (ESA) report on all properties to be acquired by the Agency to
minimize or avoid potential environmental liabilities. A Phase I ESA is the
first step in determining the presence or likely presence of hazardous
substances or petroleum products in those properties. If the Phase I ESA
findings and conclusions indicate the need for further environmental
investigation, a Phase II ESA is commissioned. In the event of an
acquisition leading to demolition, the RDA obtains a Phase I and/or Phase
II report and, if necessary, remediates the property according to state and
federal laws prior to demolition. In instances where hazardous substances
or petroleum products are detected by the Phase II ESA, environmental
remediation (cleanup) is subsequently planned and executed. The Phase II
ESA and cleanup work are normally supervised and sanctioned by local environmental agencies
such as the California Regional Water Quality Control Board (RWQCB). This agency accepts the
completion of the cleanup work by issuing a “Case Closure” letter that officially declares the
property free of hazardous substances or petroleum products.
During Fiscal Year 2011, the Agency performed environmental investigation and remediation
work at three locations: 317 W. California, 665 “G” Street and 450 “M” Street has been
completed and the case closed.
317 W. California – Phase I and Phase II ESAs were prepared for this Brownfield site (former
auto dismantling yard) in 1980, 2003 and 2008. A Remedial Action Plan (RAP) completed in
September 2008 recommended the excavation, removal and replacement of surface soils
contaminated with lead, polycyclic aromatic hydrocarbons (PAH) and poly-chlorinated biphenyls
(PCB). The RDA, in partnership with the Housing Authorities of the City and County of Fresno
(HACCF), applied for and received a $200,000 Environmental Protection Agency (EPA)
hazardous substance cleanup grant in March 2009 that required an RDA match of 20%
($40,000). The cleanup work began in early January 2011 and was completed in November 2011
with the issuance of the RWQCB’s “Case Closure” letter. Pollution Remediation liability was
$10,919 at June 30, 2011.
655 “G” Street and 705 “G” Street – Chinatown - In February 2009 the City of Fresno (City)
transferred title to three parcels in the Chinatown project area to the Agency. On October 1995,
a Phase I ESA completed for the three parcels. The parcel at 718 “F” Street was free of
hazardous substances or petroleum products. In contract, the other two parcels at 655 and 705
“G” Street were found to be in need of further assessment (Phase II ESA) because suspected
leaking gasoline tanks had been removed from both sites. In April 2007, the City received a
Phase II ESA (RAP and soil-vapor test) proposal for the assessment of the 655 “G” Street site,
but the proposal was not accepted nor implemented. Currently, the Agency is seeking grant
funds to implement the SVE pilot test and RAP at the 655 “G” Street site and to commission a
Phase II ESA for the 705 “G” Street site.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
450 “M” Street - Relocation of the City of Fresno Fire Department Headquarters, located at 450
“M” Street, was a condition of the Disposition and Development Agreement (DDA) with the Old
Armenian Town Master Developer for land assembly in Phase 1B. To comply with the terms of
the DDA, the City of Fresno (City) transferred title to the 450 “M” Street location to the RDA. In
preparation of the title transfer, a Phase I ESA was commissioned and its findings indicated that
an underground fuel storage tank had been removed from the site in 1988. In April 2009, the
RWQCB notified the City that a Phase II ESA assessment for the presence of petroleum
hydrocarbons beneath the former tank’s location was required. In June 2009, on behalf of the
City, the Agency commissioned a Phase II ESA (including a soil-vapor test) that found weathered
hydrocarbons (gasoline) at 15 to 60 feet below ground surface. Since local groundwater was
detected at 105 feet below ground surface, the RWQCB considered the weathered hydrocarbons
non-threatening to the local groundwater. In July 2010, the RWQCB issued a “Case Closure”
letter for this site.
(e)Measure Z
Measure Z, Zoo Accreditation, Fresno Chaffee Zoo Corporation
As a result of a ballot initiative, Fresno County voters approved Measure Z which added one
penny for every $10 spent on taxable goods for a period of ten years. In accordance with an
agreement between the City of Fresno and the Fresno
Chaffee Zoo Corporation, a California benefit corporation,
a non-profit board operates the zoo. The City and the
Fresno Chaffee Zoo Corporation (FCZC) negotiated a
lease and a financing arrangement.
The lease agreement set forth the terms and conditions
between the City and FCZC with respect to the
approximate 18 acres of Zoo premises and any expansion
that might occur related to the approximate 21 acres of potential future expansion area. The City
is responsible for all maintenance and operation costs in the expansion area until such time as
the Corporation takes possession of the expansion area by exercising its rights in accordance
with lease provisions. The Corporation officially took over operations on January 1, 2006.
The City retains ownership of the land, buildings, structures, permanent fixtures, and
improvements in existence at the commencement date of the lease and the FCZC is the owner
of all buildings, structures and improvements constructed thereafter until the end of the lease
term.
The Financing Agreement conveyed the Zoo animals and Zoo
personal property to the Corporation along with all obligations the
City had with respect to the animals exhibited, housed or otherwise
kept or cared for at the Zoo during the term of the lease. At the
termination of the Lease or the end of the Lease Term, should the
City decide not to continue operations of the Zoo, the Corporation
has the right to sell or dispose of the Zoo Animals and keep the
proceeds of any sale or disposition at their sole cost or expense.
The Corporation also has the authority to acquire, sell or dispose of
Zoo animals in the course of the lease so long as the compliment of
animals at all times is similar in type and proportion to the Zoo animals on hand upon
commencement of the lease.
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Under the Financing Agreement, the City contributed $1.2 million for the first year; however, this
amount is reduced by 20% per year thereafter. The lease agreement has been negotiated for a
thirty year period with a 25 year renewal of the term if the Zoo Tax is reinstated after its initial 10
year term or two additional ten year renewal options if the tax in not renewed. The lease rate is at
$1.00 per year.
The FCZC must maintain AZA accreditation of the Chaffee Zoo and is required to maintain an
animal collection of similar type and ratio that previously existed at the Zoo at the time of
transition. If Measure Z is renewed at the ten year mark, or another tax measure is passed, the
term of the lease will automatically renew for 25 years.
Under the Financing Agreement, the City had a decreasing subsidy to the Zoo over a five year
period, as called for in the Measure Z ballot language. The final subsidy payments totaling
$120,000 for Fiscal Year 2011 were paid in July and October of 2010.
(f) Granite Park and the Fresno Metropolitan Museum of
Art and Science
In 2005 the City of Fresno (“City”) entered into a Contingent
Debt Purchase Agreement with the Bank of the West (“Bank”),
guaranteeing the Bank’s $5.2 million loan (“Loan”) to “The
Granite Park Kids’ Foundation” a California nonprofit
corporation (“Borrower”) regarding developing a 20-acre
sports-related complex, (“Project”) adjacent to office and
commercial retail amenities.
On June 23, 2009, the Bank made a formal demand on the City
to purchase the Loan Package (as defined in the Contingent
Debt Purchase Agreement) for a “Purchase Price” of $4,992,753 in outstanding principal,
accrued and unpaid interest at a pre-default rate for three months in the amount of $107,518,
plus $5,000 in attorney’s fees and other costs and expenses incurred by the Bank. On
September 17, 2009, the City deposited $5,105,271 in a Loan purchase escrow. The City
utilized funds from its cash pool with the intention of ultimately issuing long term bonds to finance
the acquisition over 30 years, consistent with a September 10, 2009 bond Reimbursement
Resolution. The Loan purchase escrow remained open until December 31, 2009 at which time
the City purchased the Loan and assumed the first position insured deed of trust along with other
non-real property collateral and personal guarantees.
The City proceeded to purchase the Granite Park property at a
unified foreclosure sale and took title to and possession of Granite
Park sports fields pursuant to Trustee’s Deed recorded in Fresno
County on March 16, 2010. The City paid $5,105,218 against a
total debt obligation owing of $5,610,880. The City holds the
property for possible use, development and/or disposition.
In July 2007, the City Council of the City of Fresno adopted
Resolution No. 2007-264 approving a Contingent Debt Purchase
Agreement, by which the City of Fresno guaranteed a proposed
interim, commercial, draw loan in the principal amount of up to $15
million (“Loan”) between United Security Bank (“Bank”) and the Fresno Metropolitan Museum of
Art and Science (“Met”).
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City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
As a condition precedent to the City entering into the Purchase Agreement, the Met entered into
a Performance Guaranty with the City, which guaranteed compliance with the Loan and was
secured by a Deed of Trust that gave the City a lien on certain real property owned by the Met.
On May 13, 2009 the Met Museum and the City of Fresno received a letter from United Security
Bank stating that it was exercising its right to immediately accelerate the obligations under the
Loan Documents and declare the full-unpaid balance of the Note due and payable. A letter
dated May 28, 2009 from Powell/Pool, legal counsel for United Security Bank, sent to the Met
and the City, made a formal demand that the City purchase the Bank’s loan documents no later
than 30 calendar days from the date of the letter.
The City, the Met and the Bank continued discussions and on
June 23, 2009, Council made a motion authorizing the $15.5
million transfer of cash adding that the off-setting revenue line
item as loan proceeds either from internal borrowing or
proceeds that would be negotiated from other sources in the
course of the coming year.
The City worked closely with United Security Bank and on June
8, 2009 obtained the concession to allow the City to pay the
loan in full on July 15, 2009. On July 14, 2009, the City of
Fresno wired $15,111,940 to purchase the United Security Bank loan for the Met Museum.
Once again the City utilized funds from its cash pool to fund the pay off of the United Security
Bank loan with the intention of ultimately issuing long term bonds to finance the acquisition over
30 years. The City, even prior to the pay off of the Met loan had been in conversations as to the
potential use of New Market Tax Credits (NMTC) to lessen the debt burden of the Met.
Subsequent to the City’s assumption of the Met debt, the talks related to the NMTC were
pursued even more extensively. The City Manager’s Office engaged in conversations with US
Bank Community Development Corporation (USB) and Clearinghouse CDFI (CDFI) and on
October 22, 2009 a Term and Conditions sheet was taken to Council. Upon council approval of
the Term and Conditions sheet, negotiations were continued as was the establishment of the
Qualified Active Low Income Community Business (QALICB) and the Community Development
Entity (CDE). The City also took title to the Met real estate.
Negotiations continued and on March 18, 2010 Council and the
Fresno Joint Powers Financing Authority were asked to approve the
use of NMTC in refinancing the $15.2 million obligation incurred by
the City of Fresno when it purchased and paid off the debt between
the Fresno Metropolitan Museum and United Security Bank.
New Market Tax Credits are designed to infuse private sector
capital into distressed communities by providing a tax credit for
taxpayers who make qualified investments into designated Community
Development Entities (CDE). The investor in the Met transaction is CDFI (Investor). The credit
provided to investors totals 39% of the investment in the CDE and is claimed over a seven-year
credit allowance period.
The NMTC transaction is a very complex structure which involves a Leveraged Lender (the
Fresno JPFA) providing funding into a newly created investment fund (Fund). The Investor then
provides the equity into the Fund. The Fund then loans the full amount of the financial
transaction to the CDE, who in turn loans the funds to the QALICB.
169
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
To complete the transaction, several new structures had to be created one of which was a non-
profit entity created for purposes of holding title to the property involved
in the NMTC deal. The City created a 501(c)(3) non-profit public
benefit corporation to act as the QALICB, as the City is not eligible to
be the QALICB. The QALICB is known as the City of Fresno Cultural
Arts Properties Corporation (COFCAP). The Mayor, Council
President and the RDA Chairperson serve as the members of the
board of COFCAP.
The NMTC transaction is active for at least seven years. At the end of
the seven years, the Investor will “put” the transaction and the
financing structure dissolves. At that time, the City will then again hold
title to the MET building and the non-profit entity, COFCAP, will likely
cease to exist.
There is some nominal risk of tax credit recapture if COFCAP, acting as the QALICB, fails to
maintain its obligations in the transaction. If the IRS recaptures the credits, the City may be
responsible for repayment of the entire equity amount, which equals to approximately $6 million
inclusive of penalties. The likelihood of this occurring is minimal as it is the City’s intent to take
whatever steps are necessary to ensure compliance with all NMTC requirements.
COFCAP is presented as a component unit in the CAFR because it is a legally separate entity
for which the City is financially accountable through the appointment of the corporation’s board
and the ability to approve the corporation’s budget. COFCAP is discretely presented because it
does not provide services exclusively or almost exclusively to the City of Fresno. Through its
charitable purpose of owning and managing properties, it provides ongoing services to the
citizens of the community.
On a parallel track with the Met Museum NMTC transaction, the
City was working on the financing to reimburse itself for the
borrowings from the Pool that had been undertaken in order to pay
off the debt for both Granite Park and the Met. Bank of America,
the City’s banking services provider, partnered with the City for a
Private Placement transaction.
On May 6, 2010 Council approved a draft “terms and conditions” sheet from Bank of America
Corporation for a proposed Private Placement financing mechanism for both Granite Park and
the Met. The deal also included the refunding of previously issued City Hall debt, which resulted
in debt service savings and freed up equity in City Hall, which could then be pledged as security
for the new City Hall financing and serve as additional collateral for the Met portion of the deal
(since the Met building and land and its associated 6 land parcels were pledged for the NMTC
transaction) and Granite Park. The proposal also included new money for improvements to City
Hall and the Spiral Parking Garage.
The Private Placement piece related to Granite Park resulted in bonds with a par amount of
$5.945 million, consisting of $5.2 million to reimburse the City, $719,692 in capitalized interest,
$27,107 for cost of issuance, and ($1,798) short in excess proceeds. Although capitalizing
interest resulted in slightly more overall cost to the City over the term of the bonds, this was done
in order to provide some relief to the General Fund for a few years due to the state of the
economy and its impact on sources of revenue to the General Fund over the next twelve months.
170
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The transactions related to the Granite Park portion of the private placement with Bank of
America appear in the Government-wide, Statement of Activities –
Governmental Activities
Mitigation Related to Granite Park
On August 11, 2008, more than three years after the Bank of
the West had recorded its Granite Park Loan, Shady Tree
Farms (“Shady Tree”), a landscaping company allegedly
entered into a verbal agreement with the project developer to
provide trees for the Granite Park property. Although Shady
Tree never obtained a signed contract, it allegedly delivered
nearly $2 million dollars worth of trees to the site (959), some of
which were planted (46). The trees were allegedly delivered during August 12, 2008 through
November 10, 2008. During this time and thereafter, notwithstanding that Shady Tree had been
paid only $50,000 of the total sum due for the trees, Shady Tree did not reclaim the trees or
otherwise take action to mitigate its damages. Shady Tree allowed the trees to die on the site
without being watered or planted.
On April 2, 2009, Shady Tree filed a complaint in Fresno County Superior Court, naming the
project developer, the Bank of the West and the City of Fresno, seeking to recover the alleged
balance due for the trees and variously asserting statutory lien rights (foreclosure rights) against
the Granite Park Property now owned by the City.
The Bank and the City successfully tendered defense to the title company insuring the Bank’s
2005 deed trust Loan. Insurance defense counsel took the position that Shady Tree’s lien claim
was fatally defective. On November 1, 2010, the Court adopted its tentative decision, granted
summary judgment in favor of the Bank and the City. On February 4, 2011 the Court issued its
final judgment in favor of the Bank and the City.
The February 4, ruling also expunged the Notice of Lis Pendens and removed the Mechanic’s
Lien. On April 7, 2011 Shady Tree filed a notice of Appeal. On September 1, 2011 Shady Tree
timely filed four volumes of the appendix and its opening brief with the Appellate Court. The
issues on appeal are the same as those set forth in the motion for summary judgment. They will
continue to monitor the appeal through outside counsel and still maintain the position that if
Shady Tree were to prevail, they could only recover for the value for the 46 trees which were
actually planted. The City believes that this exposure equates to approximately $54,520.
(g)Leases Operating
The City has operating leases for certain buildings, parking areas, ponding basins, hanger space
and storage areas which require the following minimum annual payments.
171
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Governmental Activities
P u b li c
F i s c a l Y e a r s P o l i c e F i r e W o r ks T o t a l
2012 $ 128,783 $ 600,562 $ 211,703 $ 941,048
2013 128,783 588,910 211,893 929,586
2014 128,783 511,400 218,388 858,571
2015 128,783 10,000 108,990 247,773
2016 128,783 10,000 - 138,783
2017 - 2021 515,132 50,000 - 565,132
2022 - 2026 - 30,000 - 30,000
T o t a l $ 1,159,047 $ 1,800,872 $ 750,974 $ 3,710,893
Business – type Activities
O t h e r
D e p t s .
2012 $320,148 $43,483 $163,555 $527,186
2013 326,148 - 160,884 487,032
2014 332,148 - 164,502 496,650
2015 338,148 - 168,204 506,352
2016 344,148 - 171,990 516,138
2017 - 2021 1,810,740 - 919,774 2,730,514
2022 - 2026 1,159,444 - 295,922 1,455,366
T o t a l $4,630,924 $43,483 $2,044,831 $6,719,238
T o t a lFiscal Y e a r s A i r p o r t s T r a n s i t
The City has various other operating leases (both Governmental and Business – type) that have
either expired and are now functioning on a month-to-month basis, or were written on a month-
to-month or some other basis, or which state no specified expiration date. These leases
combined require annual lease payments totaling $153,260 per year. The City also leases
property to others outside of the City. All of these leases generally operate on a month to month
basis. The combined current annual income from these leases total approximately $10.3 million.
172
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
(j)Construction and Other Significant Commitments
At June 30, 2011, the City had commitments for the following major construction projects:
R e m a i n i n g
C o n s t r u c t i o n
P r o je c t T i t le C o m m i t t e d
G o v e r n m e n t a l :
Clovis Ave Integrated Traffic Signal
Dakota to Jensen
$ 1,247,892
Total Governmental 1,247,892
R e m a i n i n g
C o n s t r u c t i o n
C o m m i t t e d
P r o p r i e t a r y :
Water Meter box installation 25,399,245
Millbrook, Ashlan & Butler Sewer Rehab 2,155,460
Digester Rehab Project 2,380,764
Gas Conditioning System 9,096,510
Enhanced Dewatering Project 14,531,279
Water T-3 2MG Tank 16,503,727
Total Proprietary 70,066,985
Total Major Construction Projects $ 71,314,877
P r o je c t T i t le
Note 14.SECURITIES LENDING
The City of Fresno Municipal Code and the Retirement Boards’ policies permit the Retirement
Board of the City of Fresno Fire and Police Retirement System and the City of Fresno
Employees Retirement System to use investments of both Systems to
enter into securities lending transactions, i.e., loans of securities to
broker-dealers and other entities for collateral with a simultaneous
agreement to return the collateral for the same securities in the
future. The Systems have contracted with Northern Trust, their
custodian, to manage the securities lending program for the Systems
and all securities held in a separately managed account are available
for lending. As securities lending agent, Northern Trust calculates
collateral margins and accepts collateral in the form of cash or
marketable securities and irrevocable bank letters of credit for all
securities lending transactions. Transactions are collateralized at
102 percent of market value (contract value) for domestic securities
and 105 percent of market value (contract value) for international
173
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
securities. Collateral is marked to market daily. When a loan is secured by cash, a rebate is
negotiated and the cash collateral is invested according to the guidelines in the collateral pool.
As designated by the Boards, cash collateral is invested in Northern Trust’s Core U.S.A.
Collateral Section (short-term investment pool), which, as of June 30, 2011 had a weighted
average duration of 21 days, average maturity is 102 days and an average monthly yield of 0.29
percent. The relationship between the maturities of the investment pool
and the System’s loans is affected by the maturities of the security loans
made by other entities that use the Northern Trust Core U.S.A. Collateral
Section and a definitive statement of that relationship cannot be
formulated by the System. As of June 30, 2011, the CORE USA Cash
Collateral Fund had 0.015 percent exposure in below investment grade
long-term securities and there were no known credit risks related to the
securities lending transactions.
Northern Trust will ensure that, in any agreement with a borrower, it
retains its absolute right to terminate the agreement without cause, upon
short notice and without any penalty. The System cannot pledge or sell
collateral securities received unless the borrower defaults. In the event of
a borrower default, Northern Trust indemnifies the System against losses and will replace or
reimburse the System for any borrowed securities not replaced. In general, the average term of
all System loans is overnight or “on demand”. All securities loans can be terminated on demand
by either the lender or the borrower, although the average term of the System’ s loans was
approximately 88 days as of June 30, 2011.
During the year ended June 30, 2009, Northern Trust implemented more conservative
investment practices for all collateral pools in response to the credit market crisis earlier that
fiscal year. In general, the new guidelines largely align the collateral pool investments with the
guidelines governing money market funds subject to SEC Rule 2a-7 and reflect a more
conservative investment profile.
Employees Retirement System
Fair Value of Collateral Received for Loan Securities as of June 30, 2011
U.S. Government and Agency $ 42,766,125 $ 581,222 $ 43,347,347
Domestic Equities 76,106,560 8,800 76,115,360
Domestic Fixed Equities 14,849,758 - 14,849,758
International Equities 16,284,783 126,658 16,411,441
T o t a l $150,007,226 $ 716,680 $ 150,723,906
T o t a l sCollateralized b y C a s h S e c u r i t i e s
174
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Employees Retirement System
Fair Value of Loaned Securities as of June 30, 2011
U.S. Government and Agency $ 41,888,501 $ 569,119 $ 42,457,620
Domestic Equities 74,698,942 8,641 74,707,583
Domestic Fixed Equities 14,566,461 - 14,566,461
International Fixed Equities 15,562,431 122,977 15,685,408
T o t a l $ 146,716,335 $ 700,737 $ 147,417,072
T o t a l sCollateralized b y C a s h S e c u r i t i e s
Fire and Police System
Fair Value of Collateral Received for Loan Securities as of June 30, 2010
U.S. Government and Agency $ 49,189,798 $ 668,525 $ 49,858,323
Domestic Equities 87,538,123 10,121 87,548,244
Domestic Fixed Equities 17,080,262 - 17,080,262
International Equities 18,730,834 145,681 18,876,515
T o t a l $ 172,539,017 $ 824,327 $ 173,363,344
C o l l a t e r a l i z e d b y C a s h S e c u r i t i e s T o t a l s
Fire and Police System Fair Value of Loaned Securities as of June 30, 2011
U.S. Government and Agency $ 48,180,351 $ 654,603 $ 48,834,954
Domestic Equities 85,919,074 9,939 85,929,013
Domestic Fixed Equities 16,754,412 - 16,754,412
International Equities 17,899,982 141,448 18,041,430
T o t a l $ 168,753,819 $ 805,990 $ 169,559,809
C o l l a t e r a l i z e d b y C a s h S e c u r i t i e s T o t a l s
175
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Note 15.OTHER INFORMATION
Construction Retainage Escrow Accounts
The City enters into construction contracts with various outside third-party contractors with
respect to major capital projects. As the construction progresses, progress payments are made
to the contractors. Portions of the payments, retention payments, are paid into an escrow
account. While these funds are earned by the contractors, generally 5% to 10% of the contract
amount, they are not released out of the escrow account to the contractor until some agreed
upon date, usually the completion of the job. These amounts are retained for a variety of
reasons; as an incentive to complete the job in a timely manner, or as a fund for the benefit of
suppliers and subcontractors. The City may not convert the funds in these escrow accounts for
its use unless a breach of contract occurs. At June 30, 2011, the City had made payments into
various contract escrow accounts in the amount of $257,000.
Note 16.PRIOR PERIOD ADJUSTMENTS
City of Fresno Cultural Arts Properties (COFCAP) is a discretely presented component unit of the
City of Fresno which was formed on March 15, 2010 as a nonprofit public benefit corporation
with a fiscal year ending on June 30th. The City reported the activities and balances of COFCAP
for the three month period ending on June 30, 2010 in the City’s FY 2010 CAFR. It was later
determined that for reporting and tax purposes, COFCAP would better serve the public as an
entity with a calendar year end, and that legal change was made. COFCAP was audited by
Price Paige & Company, 677 Scott Avenue, Clovis, California 93612, for the nine month period
ended December 31, 2010. The activities and balances of COFCAP for the nine month period
ending on December 31, 2010 have been included in the City’s FY 2011 CAFR with a prior
period adjustment for the three months previously reported.
Note 17.SUBSEQUENT EVENTS
Bond Ratings Downgrade
Subsequent to year end, the City of Fresno experienced rating downgrades from all three rating
agencies, Fitch, S&P and Moody’s on various of its Fresno Joint Powers Finance Authority
Lease Revenue Bonds as well as the City’s implied general obligation (GO) bond rating. The
first downgrade by Fitch occurred on August 1, 2011, followed in short order by S&P on October
3, 2011 and finally by Moody’s on October 19, 2011. The downgrades were as follows:
Rating Agency Prior Rating Prior Outlook New Rating New Outlook
Lease Revenue Bonds
Fitch AA- Stable A- Stable
Standard & Poor’s AA- Stable A- Negative
Moody’s A1 Stable Baa1 Negative
General Obligation (GO)
Fitch AA Stable A Stable
Standard & Poor’s AA Stable A Negative
Moody’s Aa2 Stable A2 Negative
176
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
Each similarly indicated that one of the key factors in their decisions for the downgrade was the
rapid erosion in the City’s financial position evidenced by use of the emergency reserve and low
overall flexibility. They cited the City’s dependence on both property and sales taxes, and
challenges to management in achieving structural budget balance. The City’s current decision to
not immediately rebuild the Emergency Reserve also was also a ratings driver. Fitch noted that
the City’s overall debt is expected to remain moderate given that the City has not additional debt
plans and that the pension and other post-employment liabilities
are manageable and compare favorable to other large cities.
Standard & Poor’s’ comments were consistent with those of
Fitch with the added view that current General Fund reserves
and cash balances leave the City with inadequate short-term
flexibility if revenue performance is weaker than budgeted. In
addition from their perspective, the City’s ability to resolve
additional structural imbalances would likely require political
and collective bargaining cooperation that may they believe
may not be achievable in the short or intermediate term,
resulting in further weakening of the City’s financial profile.
Moody’s further noted the City’s high fixed costs burden and increasing General Fund subsidy for
underperforming enterprise assets further constraining its flexibility. Also mentioned was the
City’s weak economic base, unfavorable demographics and economic trends in direct reference
to low-skilled, low paying jobs and the area’s below-average personal and family income levels.
Tax and Revenue Anticipation Bonds
Due to rating pressures, unlike prior years, the City did not issue
Tax and Revenue Anticipation Notes. These are normally issued
in July and repaid prior to the end of the fiscal year, which would
have been in June 2012.
Non – Exclusive Franchises for Roll-Off Collection Services
On June 19, 2011 the City Council approved a resolution declaring
its intent to award non- exclusive franchises for roll-off collection services within the City of
Fresno. The City believes that establishing a non-exclusive
franchise to regulate the roll-off haulers will be a benefit to the
City in that it will result in an increased ability to track collection
and diversion activities, establish minimum diversion standards
and provide the opportunity for the City to collect franchise
fees.
Customers will be able to select from among the companies
based upon services and rates. The City will not regulate the
rates of the companies. In exchange for the granting of the
right to collect roll-off boxes under the non-exclusive
agreement, the franchised companies have agreed to pay the City a franchise fee of 10% of their
roll-off gross rate revenues.
177
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The term of the franchise agreements will run for five years and
commenced for sixteen of the vendors on August 1, 2011. The
agreements also allow for the City at the end of the five year term,
to continue the non-exclusive franchise system, grant exclusive
rights to roll-off services to one or more haulers within specific
areas of the City, or provide the roll-off services through municipal
operations. Three additional vendors were approved in December,
and their agreements commenced on January 1, 2012.
Based upon analysis made by outside consultants hired to assist
with the transition and their conversations with vendors, the annual franchise fees to be received
by the City’s General Fund as a result of the non- exclusive agreements has been estimated to
equate to approximate $500,000 per year once fully transitioned.
The City however retains the right to provide roll-off collection service for materials collected from
City facilities and parks and from special events and venues sponsored by the City, provided
such collection is performed by the City’s municipal collection operation or City crews.
Exclusive Franchise Agreements for Collection of Multi-Family and Commercial Solid
Waste
In 2010 and early 2011, the City planned and developed a Commercial Solid Waste (CSW)
franchising system, procured bids, as well as negotiated contacts with Allied Waste Services
(Allied) and Mid Valley Disposal (Mid Valley). In December 2010, while the City Council
approved a Resolution of Intent to award the franchises they did not however approve the
ordnance granting the franchises. However in May 2011, the
Mayor included the franchise recommendation in her
proposed FY 2012 budget due to a lack of better alternatives
for resolving General Fund revenue shortfalls, and the
recommendation was approved by the City Council on June
24, 2011.
On September 8, 2011, the Council voted to approve a
resolution declaring the City’s intent to award franchises to
Allied and Mid Valley in preparation for holding a public
hearing on the matter and to take a final vote to award the
franchises. Council’s approval of this resolution also began
the process for introducing an ordinance that would allow for the franchising of the CSW
services, followed by a public hearing. At the conclusion of the public
hearing, the City Council was asked to decide whether to grant the
franchises.
Presentations to Council outlined potential benefits from the franchise
arrangements as being environmental benefits through a new rate
structure, expanded customer service and outreach, and additional
recycling and food waste composting services that are anticipated to
encourage increased landfill diversion. It was anticipated that the City
would benefit by being able to collect franchise fees, recycling-related
revenue and free solid waste/recycling services estimate to generate
additional revenue annually in the General Fund that could be used to
support essential cored services such as public safety and parks.
178
City of Fresno, California
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2011
The agreements also called for a 5-year performance review of the Contractors and an 8-year
evaluation of the franchising system. The Ordinance was passed by Council on September 29,
2011 and the vendors assumed Commercial Solid Waste operations on December 5, 2011.
Also listed as the benefits of privatization of the City’s commercial solid waste operations were;
increased competition which could eventually result in lower prices and improved services, better
efficiency due to the vendors lower overhead, and the elimination of the City’s liability for
commercial truck accidents. This move on the part of the City enables the collection a franchise
fee from the commercial solid waste franchisees of approximately $2 million annually which will
go to the City’s General Fund. The estimated annual franchise fee was provided by the outside
consultants hired to assist with this process.
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Required Supplementary Information
RequiredSupplementary Information
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - GENERAL FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with
Amounts Final Budget
Budgeted Amounts Budgetary Over
Original Final Basis (Under)
Resources (inflows):
Taxes:
Property Taxes $ 103,775,000 $ 101,775,000 $ 101,137,353 $(637,647)
Sales Taxes 64,133,200 62,633,200 62,825,011 191,811
Other Taxes 36,379,000 37,270,600 32,587,709 (4,682,891)
Licenses and Permits 357,600 375,400 423,381 47,981
Intergovernmental:
State Motor Vehicle In-Lieu 1,689,400 1,689,400 2,276,375 586,975
Other State Revenue 875,500 875,500 768,071 (107,429)
Other Intergovernmental 1,299,900 1,865,100 393,049 (1,472,051)
Charges for Services:
Charges for Services 13,258,800 13,557,400 12,840,147 (717,253)
Fines and Violations 3,427,100 3,427,100 3,170,809 (256,291)
Use of Money and Property 78,200 78,200 (375,914) (454,114)
Miscellaneous 12,081,700 12,568,700 10,728,779 (1,839,921)
Other Financing Sources:
Transfers from Other Funds 59,685,000 60,102,300 62,007,466 1,905,166
Loan Proceeds 57,082,100 57,082,100 56,940,710 (141,390)
Total Available
for Appropriations 354,122,500 353,300,000 345,722,946 (7,577,054)
Charges to Appropriations (outflows):
General Government:
Mayor and City Council 5,065,300 4,950,000 4,393,970 (556,030)
Other General Government 17,017,800 17,628,200 17,117,159 (511,041)
Public Protection:
Police Department 127,270,500 125,030,100 123,244,315 (1,785,785)
Fire Department 43,205,600 42,662,700 41,784,088 (878,612)
Public Ways & Facilities 4,729,500 4,673,400 3,711,068 (962,332)
Culture and Recreation 15,656,700 15,273,100 14,337,684 (935,416)
Community Development 1,526,500 1,135,800 1,198,004 62,204
Capital Outlay 2,609,400 2,532,700 2,012,190 (520,510)
Debt Service 56,718,100 56,718,100 56,649,107 (68,993)
Other Financing Uses:
Transfers to Other Funds 80,995,300 81,775,500 89,849,229 8,073,729
Total Charges to Appropriations 354,794,700 352,379,600 354,296,814 1,917,214
Excess (Deficit) Resources
Over Appropriations $(672,200) $920,400 $(8,573,868) $(9,494,268)
See accompanying notes to the required supplementary information.
182
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - GENERAL FUND
YEAR ENDED JUNE 30, 2011
Explanation of differences between budgetary inflows and outflows
and GAAP Revenues and Expenditures:
Sources/inflow of Resources:
Actual amounts (budgetary basis) available for appropriation from
the Budget to Actual Comparison schedule.$ 345,722,946
Differences - Budget to GAAP:
The city budgets for taxes, intergovernmental and miscellaneous revenue on the 793,363
cash basis, rather than on modified accrual basis.
Interfund reimbursements are not revenue and are expenditures for financial reporting (6,036,716)
Accrued interest on interfund advances is not budgeted as an inflow of resources.1,826,969
Transfers from other funds are inflows of budgetary resources but are not
revenues for financial reporting purposes.(62,007,466)
Revenues from other funds may be reclassed as transfers for financial reporting.(3,213,892)
The proceeds from loans are inflows of budgetary resources but are not revenues
for financial reporting purposes.(56,940,710)
Total revenues as reported on the Statement of Revenues, Expenditures, and
Changes in Fund Balance-Governmental Funds.$220,144,494
Uses/Outflows of Resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the Budget to Actual Comparison schedule.$354,296,814
Differences--budget to GAAP:
The city budgets for expenditures on the cash basis, rather than on the
modified accrual basis.(585,045)
Interfund reimbursements are a reduction of expenditures for financial reporting (6,036,716)
Pension Obligation bond debt payments at City Hall Rent recognized as
tranfers out to other funds (12,683,740)
The issuance of interfund loans are outflows of budgetary resources
but are not expenditures for financial reporting purposes.90,049
Transfers to other funds are outflows of budgetary resources but are
not expenditures for financial reporting purposes.(89,849,229)
The repayment of loans are outflows of budgetary resources
but are not expenditures for financial reporting purposes.(53,858,437)
Total charges to appropriations as reported on the Statement of Revenues,
Expenditures, and Changes in Fund Balance-Governmental Funds.$191,373,696
See accompanying notes to the required supplementary information.
183
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - GRANTS SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with
Amounts Final Budget
Budgeted Amounts Budgetary Over
Original Final Basis (Under)
Resources (inflows):
Intergovernmental:
Federal Grants $ 74,185,900 $ 82,290,300 $ 39,916,465 $ (42,373,835)
State Grants 20,413,600 25,477,800 7,008,338 (18,469,462)
Local Support 402,800 460,700 659,572 198,872
Charges for Services 2,344,800 4,244,800 2,357,802 (1,886,998)
Use of Money and Property 342,200 561,800 772,768 210,968
Miscellaneous - 700,000 184,454 (515,546)
Other Financing Sources:
Transfers from Other Funds 299,700 4,360,500 4,038,446 (322,054)
Total Available
for Appropriations 97,989,000 118,095,900 54,937,845 (63,158,055)
Charges to Appropriations (outflows):
General Government 865,900 885,400 875,663 (9,737)
Public Protection 11,621,500 14,642,900 13,012,927 (1,629,973)
Public Ways & Facilities 12,325,200 14,127,500 8,413,084 (5,714,416)
Culture and Recreation 886,900 1,016,700 993,333 (23,367)
Community Development 27,829,200 29,991,600 12,916,136 (17,075,464)
Capital Outlay 35,371,700 45,141,600 18,160,580 (26,981,020)
Other Financing Uses:
Transfers to Other Funds 10,000 25,000 1,193,191 1,168,191
Total Charges to Appropriations 88,910,400 105,830,700 55,564,914 (50,265,786)
Excess (Deficit) Resources
Over Appropriations $ 9,078,600 $12,265,200 $(627,069) $(12,892,269)
See accompanying notes to the required supplementary information.
184
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - GRANTS SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Explanation of differences between budgetary inflows and outflows
and GAAP Revenues and Expenditures:
Sources/inflow of Resources:
Actual amounts (budgetary basis) available for appropriation from
the Budget to Actual Comparison schedule.$ 54,937,845
Differences - Budget to GAAP:
Grant reimbursements are budgeted on the cash basis rather than on the
modified accrual basis.4,576,348
Accrued interest on interfund advances is not budgeted as an inflow of resources.912,873
Transfers from other funds are inflows of budgetary resources but are not
revenues for financial reporting purposes.(4,038,446)
Interfund reimbursements are treated as adjustments to expenditures.(2,293,100)
The receipt of loan payments are inflows of budgetary resources
but are not revenues for financial reporting purposes.(796,391)
Total revenues as reported on the Statement of Revenues, Expenditures, and
Changes in Fund Balance-Governmental Funds.$53,299,129
Uses/Outflows of Resources
Actual amounts (budgetary basis) "total charges to appropriations"
from the Budget to Actual Comparison schedule.$ 55,564,914
Differences--budget to GAAP:
The city budgets for expenditures on the cash basis,
rather than on the modified accrual basis.(682,229)
Increase in allowance for doubtful accounts 1,132,135
Pension Obligation bond debt, HUD debt, and City Hall Rent recognized as
tranfers out to other funds (728,888)
Transfers to other funds are outflows of budgetary resources but are
not expenditures for financial reporting purposes.(1,193,191)
Interfund reimbursements are treated as adjustments to expenditures.(2,293,100)
The issuance of notes receivable are outflows of budgetary resources
but are not expenditures for financial reporting purposes.(2,756,738)
Total charges to appropriations as reported on the Statement of Revenues,
Expenditures, and Changes in Fund Balance-Governmental Funds.$ 49,042,903
See accompanying notes to the required supplementary information.
185
City of Fresno, California
Notes to the Required Supplementary Information
For the Fiscal Year Ended June 30, 2011
Budgetary Data
The City adopts annual budgets for all governmental funds on the cash basis of
accounting plus encumbrances. The budget includes: (1) the programs, projects,
services, and activities to be provided during the fiscal year, (2) the estimated resources
(inflows) and amounts available for appropriation, and (3) the estimated charges to
appropriations. The budget represents a process through which policy decisions are
made, implemented, and controlled. The City Charter prohibits expending funds for
which there is no legal appropriation.
The following procedures are used in establishing the budgetary data reflected in the
budgetary comparison schedules.
Original Budget
(1) Prior to June 1, the Mayor submits to the City Council a proposed detailed operating
budget for the fiscal year commencing July 1. The operating budget includes
proposed expenditures and the means of financing them.
(2) Public hearings are conducted to obtain taxpayer comment on the proposed annual
budget. The Mayor and his staff analyze, review and refine the budget submittals.
(3) Prior to July 1, the budget is legally enacted through adoption of a resolution by the
City Council.
Final Budget
(1) Certain annual appropriations are budgeted on a project or program basis. If such
projects or programs are not completed at the end of the fiscal year, unexpended
appropriations, including encumbered funds, are carried forward
to the following year. In certain circumstances, other programs
and regular annual appropriations may be carried forward after
appropriate approval. Annually appropriated funds, not
authorized to be carried forward, lapse at the end of the fiscal
year. Appropriations carried forward from the prior year are
included in the final budgetary data.
(2) The City Manager is authorized to transfer funds already
appropriated within a department's budget within a fund. However, any revisions
that alter the total appropriation of a department within a fund must be approved by
the City Council. Expenditures may not legally exceed budgeted appropriations at
the department level within a fund.
(3) The City adopts an annual budget for the General Fund, Special Revenue Funds
and Capital Projects Funds. No budgets are legally adopted for Debt Service
Funds, the Redevelopment Agency and Financing Authorities & Corporations.
Budgets are adopted on the cash basis. Budgeted amounts are reported as
amended. During the year, several supplementary appropriations were necessary
but were not material in relation to the original appropriations. Supplemental
appropriations during the year must be approved by the City Council.
186
City of Fresno, California
Notes to the Required Supplementary Information
For the Fiscal Year Ended June 30, 2011
Budget Development
The preparation of the budget document is the result of a Citywide effort. Each
department is presented with an operating base budget that is used as the foundation for
building their requests for the operations of their organizations. All one-time expenditure
increases are removed, except for those demonstrable and
mandatory. A five-year capital budget is required from all
departments. The purpose is to give the Mayor and Council a tool
to plan for the future as well as to more realistically reflect the timing
of many capital projects that take more than one year to complete.
Departments submit their requests to be analyzed and reviewed by
the City’s Budget and Management Studies Division (BMSD).
Requests are evaluated based on individual operations, City funding
resources and the goals and strategies identified by each organization related to the
impact on performance measures. Recommendations are presented to the Mayor and
City Manager in a review meeting comprised of management representatives from each
department and BMSD. Upon final decisions of format and content, the Mayor’s
Proposed Budget Document is printed and presented to Council for deliberation and
adoption. The Adopted Budget Document is prepared to include all the various changes
approved by the Council.
Budgetary Results Reconciliation
(a) Basis Differences
The City’s budgetary process is based upon accounting on a basis other than generally
accepted accounting principles (GAAP). The results of operations (actual) are presented
in the budget and actual comparison schedule in accordance with the budgetary process
(Budget basis) to provide a meaningful comparison with the budget, while the financial
statements are presented using the GAAP basis. Loan proceeds, loan repayments,
transfers and interfund reimbursements primarily relate to basis differences.
(b)Timing Differences
One of the major differences between the Budget basis and GAAP basis are timing
differences. Timing differences represent transactions that are accounted for in different
periods for Budget basis and GAAP basis reporting. Revenues such as property tax,
sales tax and grant revenues recognized on a cash basis have been deferred for GAAP
reporting, while various expenditures not recognized on the cash basis have been
accrued for GAAP reporting.
187
City of Fresno, California
Required Supplementary Information
For the Fiscal Year Ended June 30, 2011
Schedule of Funding Progress
EMPLOYEES RETIREMENT SYSTEM
Schedule of Funding Progress
(Dollars in Millions)
(1) (2) (3) (4) (5) (6)
Actuarial
Valuation
Date
Actuarial
Value
of Assets
Actuarial
Accrued
Liability
(AAL)
Percentage
Funded
(1) / (2)
(Prefunded)/
Unfunded
AAL
(2) - (1)
Annual
Covered
Payroll
(Prefunded)/
Unfunded AAL
Percentage of
Covered
Payroll
(4) / (5)
2008 $ 981 $ 690 142.2% $ (291) $ 133 (218.7%)
2009 958 715 133.9% (243) 139 (174.3%)
2010 926 756 122.5% (170) 131 (129.6%)
FIRE AND POLICE RETIREMENT SYSTEM
Schedule of Funding Progress
(Dollars in Millions)
(1) (2) (3) (4) (5) (6)
Actuarial
Valuation
Date
Actuarial
Value
of Assets
Actuarial
Accrued
Liability
(AAL)
Percentage
Funded
(1) / (2)
(Prefunded)/
Unfunded
AAL
(2) - (1)
Annual
Covered
Payroll
(Prefunded)/
Unfunded AAL
Percentage of
Covered
Payroll
(4) / (5)
2008 $ 1,067 $ 830 128.5% $ (237) $ 99 (239.6%)
2009 1,046 874 119.6% (171) 102 (167.5%)
2010 1,019 919 110.8% (99) 102 (96.7%)
188
City of Fresno, California
Required Supplementary Information
For the Fiscal Year Ended June 30, 2011
General Employees
Actuarial UAAL as
Actuarial Actuarial Accrued Unfunded a % of
Valuation Asset Liability (AAL) AAL Funded Covered Covered
Date (1)Value Entry Age (UAAL) Ratio Payroll Payroll
6/30/2008 $
- $ 22,943 $ 22,943 0.00% $ 91,602 25.0%
6/30/2010 - 15,225 15,225 0.00%104,503 15.0%
Safety Tier 1
Actuarial UAAL as
Actuarial Actuarial Accrued Unfunded a % of
Valuation Asset Liability (AAL) AAL Funded Covered Covered
Date (1)Value Entry Age (UAAL) Ratio Payroll Payroll
6/30/2008 $
- $ 53,732 $ 53,732 0.00% $ 24,273 221.0%
6/30/2010 - 29,659 29,659 0.00%22,424 132.0%
Safety Tier 2
Actuarial UAAL as
Actuarial Actuarial Accrued Unfunded a % of
Valuation Asset Liability (AAL) AAL Funded Covered Covered
Date (1)Value Entry Age (UAAL) Ratio Payroll Payroll
6/30/2008 $
- $ 52,329 $ 52,329 0.00% $ 67,033 78.0%
6/30/2010 - 37,098 37,098 0.00%81,978 45.0%
Blue Collar
Actuarial UAAL as
Actuarial Actuarial Accrued Unfunded a % of
Valuation Asset Liability (AAL) AAL Funded Covered Covered
Date (1)Value Entry Age (UAAL) Ratio Payroll Payroll
6/30/2008 $
- $ (179) $ (179) 0.00% $ 33,075 -1.0%
6/30/2010 - 2,270 2,270 0.00%37,556 6.0%
Total
Actuarial UAAL as
Actuarial Actuarial Accrued Unfunded a % of
Valuation Asset Liability (AAL) AAL Funded Covered Covered
Date (1)Value Entry Age (UAAL) Ratio Payroll Payroll
6/30/2008 $
- $ 128,825 $ 128,825 0.00% $ 215,983 60.0%
6/30/2010 - 84,252 84,252 0.00%246,461 34.2%
(1)The actuarial valuation report is prepared biennially.
RETIREES HEALTHCARE PLAN - Other Postemployment Benefits
Schedule of Funding Progress
(Dollars in Thousands)
189
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Nonmajor Governmental Funds NonmajorGovernemental Funds
CITY OF FRESNO, CALIFORNIA
COMBINING BALANCE SHEET
NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2011
Special Revenue
Special Community UGM Special
Gas Tax Measure C Services Impact Fees Assessments
Assets
Cash and Investments $ 974,371 $ 4,326,180 $ 7,678,198 $ 16,596,743 $ 3,071,292
Receivables, Net - 18,224 229,624 92,491 39,987
Grants Receivable 138,720 - - - -
Intergovernmental Receivables 1,429,348 998,826 - - 66,221
Due From Other Funds - 3,513 330 33,265 6,704,139
Property Held for Resale - - - - -
Restricted Cash - - - - -
Loans, Notes, Leases, Other Receivables, Net - - 54,289 - -
Total Assets $2,542,439 $5,346,743 $7,962,441 $16,722,499 $9,881,639
Liabilities and Fund Balances
Liabilities:
Accrued Liabilities $954,185 $1,063,045 $823,499 $432,466 $793,548
Deferred Revenue - - - - -
Due to Other Funds - - - - -
Advances From Other Funds - - - - -
Total Liabilities 954,185 1,063,045 823,499 432,466 793,548
Fund (Deficit) Balances:
Restricted 1,588,254 4,283,698 2,984,625 16,153,203 9,088,091
Assigned - - 4,154,317 136,830 -
Total Fund Balances 1,588,254 4,283,698 7,138,942 16,290,033 9,088,091
Total Liabilities and Fund Balances $ 2,542,439 $ 5,346,743 $ 7,962,441 $ 16,722,499 $ 9,881,639
192
Debt Service Capital Projects
Financing Total
Authorities Nonmajor
and City Redevelopment Governmental
City Debt Corporations Combined Agency Funds
$ 2,076 $ 2,537,972 $ 10,807,115 $ 17,084,850 $ 63,078,797
972 14,440 38,116 27,810 461,664
- - - 179,877 318,597
- - - - 2,494,395
- - 3,735,712 355,128 10,832,087
- - - 34,928,321 34,928,321
43,054 11,080,222 - - 11,123,276
- 12,690,500 - 7,826,408 20,571,197
$46,102 $26,323,134 $14,580,943 $60,402,394 $143,808,334
$- $3,585 $71,159 $46,390 $4,187,877
- - - 179,877 179,877
- - - 291,111 291,111
- 12,690,500 - - 12,690,500
- 12,694,085 71,159 517,378 17,349,365
46,102 13,629,049 - 46,863,526 94,636,548
- - 14,509,784 13,021,490 31,822,421
46,102 13,629,049 14,509,784 59,885,016 126,458,969
$ 46,102 $ 26,323,134 $ 14,580,943 $ 60,402,394 $ 143,808,334
193
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
YEAR ENDED JUNE 30, 2011
Special Revenue
Special Community UGM Special
Gas Tax Measure C Services Impact Fees Assessments
Revenues
Taxes $12,527,190 $11,954,265 $712,785 $- $-
Intergovernmental 167,812 - 1,727,598 - -
Charges for Services - - 943,657 6,686,099 -
Use of Money and Property 73,921 8,891 257,315 116,189 59,116
Miscellaneous 240,593 18,401 5,631,022 39,984 6,168,197
Total Revenues 13,009,516 11,981,557 9,272,377 6,842,272 6,227,313
Expenditures
Current:
General Government - - 709,301 - -
Public Protection - - 6,979,419 - -
Public Ways and Facilities 10,270,730 - 1,741,622 - -
Culture and Recreation - - 877,742 - -
Community Development - - 513,836 - -
Capital Outlay 372,435 11,664,004 564,153 4,799,520 4,436,838
Debt Service:
Principal - - - - -
Interest - - - - -
Total Expenditures 10,643,165 11,664,004 11,386,073 4,799,520 4,436,838
2,366,351 317,553 (2,113,696) 2,042,752 1,790,475
Other Financing Sources (Uses)
Transfers In 706,238 14,781 360,861 6,412,703 440
Transfers Out (4,558,858) (637,581) (4,231,401) (3,285,233) (92,629)
(3,852,620) (622,800) (3,870,540) 3,127,470 (92,189)
Net Change in Fund Balances (1,486,269) (305,247) (5,984,236) 5,170,222 1,698,286
Fund Balances - Beginning 3,074,523 4,588,945 13,123,178 11,119,811 7,389,805
Fund Balances - Ending $ 1,588,254 $ 4,283,698 $ 7,138,942 $ 16,290,033 $ 9,088,091
Excess of Revenue
Over (Under) Expenditures
Total Other Financing Sources (Uses)
194
Debt Service Capital Projects
Financing Total
Authorities Nonmajor
and City Redevelopment Governmental
City Debt Corporations Combined Agency
Funds
$- $- $- $- $25,194,240
- - 355,610 435,769 2,686,789
- - - - 7,629,756
2,352 75,676 668,986 145,577 1,408,023
- - 819,421 - 12,917,618
2,352 75,676 1,844,017 581,346 49,836,426
26,516 154,477 - - 890,294
- - - - 6,979,419
- - - - 12,012,352
- - - - 877,742
- - - - 513,836
- - 5,513,652 6,216,846 33,567,448
6,070,562 5,815,000 - - 11,885,562
11,715,030 9,574,797 - - 21,289,827
17,812,108 15,544,274 5,513,652 6,216,846 88,016,480
(17,809,756) (15,468,598) (3,669,635) (5,635,500) (38,180,054)
17,780,990 10,895,461 14,564,522 14,699,247 65,435,243
- (15,708,613) (9,320,668) (2,649,082) (40,484,065)
17,780,990 (4,813,152) 5,243,854 12,050,165 24,951,178
(28,766) (20,281,750) 1,574,219 6,414,665 (13,228,876)
74,868 33,910,799 12,935,565 53,470,351 139,687,845
$ 46,102 $ 13,629,049 $ 14,509,784 $ 59,885,016 $ 126,458,969
195
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - SPECIAL GAS TAX - SPECIAL REVENUE FUNDS
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Taxes $ 12,310,500 $ 12,352,700 $ 11,438,610 $ (914,090) $ 1,088,580 $ 12,527,190
Intergovernmental 300,000 300,000 390,698 90,698 (222,886) 167,812
Use of Money and Property 50,000 50,000 (19,067) (69,067) 92,988 73,921
Miscellaneous 271,900 271,900 240,596 (31,304) (3) 240,593
Other Financing Sources:
Transfers from Other Funds 5,000 5,000 706,238 701,238 - 706,238
Total Available
for Appropriations 12,937,400 12,979,600 12,757,075 (222,525) 958,679 13,715,754
Public Ways and Facilities 11,117,400 11,012,500 10,440,627 (571,873) (169,897) 10,270,730
Capital Outlay 102,400 251,400 398,956 147,556 (26,521) 372,435
Other Financing Uses:
Transfers to Other Funds 1,078,900 1,078,900 1,311,280 232,380 3,247,578 4,558,858
Total Charges
to Appropriations 12,298,700 12,342,800 12,150,863 (191,937) 3,051,160 15,202,023
Excess (Deficit) Resources
Over (Under) Appropriations $ 638,700 $ 636,800 $ 606,212 $ (30,588) $ (2,092,481) $ (1,486,269)
Charges to Appropriations
(outflows):
196
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - MEASURE C - SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Taxes $ 32,742,700 $ 34,412,600 $ 11,843,756 $ (22,568,844) $ 110,509 $ 11,954,265
Use of Money and Property 31,100 31,100 26,910 (4,190) (18,019) 8,891
Miscellaneous (150,000) (150,000) (131,599) 18,401 150,000 18,401
Other Financing Sources:
Transfers from Other Funds 50,000 50,000 29,381 (20,619) (14,600) 14,781
Total Available
For Appropriations 32,673,800 34,343,700 11,768,448 (22,575,252) 227,890 11,996,338
Capital Outlay 37,877,500 40,463,300 11,816,644 (28,646,656) (152,640) 11,664,004
Other Financing Uses:
Transfers to Other Funds 191,800 191,800 164,904 (26,896) 472,677 637,581
Total Charges
to Appropriations 38,069,300 40,655,100 11,981,548 (28,673,552) 320,037 12,301,585
Excess (Deficit) Resources
Over (Under) Appropriations $ (5,395,500) $ (6,311,400) $ (213,100) $ 6,098,300 $ (92,147) $ (305,247)
25,850,000
Charges to Appropriations
(outflows):
197
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - COMMUNITY SERVICES FUND - SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Taxes $ 600,000 $ 600,000 $ 556,675 $ (43,325) $ 156,110 $ 712,785
Intergovernmental 1,969,000 2,706,000 3,278,840 572,840 (1,551,242) 1,727,598
Charges for Services 1,223,300 1,594,100 969,008 (625,092) (25,351) 943,657
Use of Money and Property 149,300 150,000 306,429 156,429 (49,114) 257,315
Miscellaneous 5,551,600 5,600,900 5,583,474 (17,426) 47,548 5,631,022
Other Financing Sources:
Transfers from Other Funds 51,100 51,200 492,084 440,884 (131,223) 360,861
Total Available
For Appropriations 9,544,300 10,702,200 11,186,510 484,310 (1,553,272) 9,633,238
Charges to Appropriations
(outflows):
General Government 709,300 709,300 709,300 - 1 709,301
Public Protection 8,207,600 8,308,200 6,682,526 (1,625,674) 296,893 6,979,419
Public Ways and Facilities 1,360,300 2,378,800 1,831,672 (547,128) (90,050) 1,741,622
Culture and Recreation 336,800 1,128,800 892,953 (235,847) (15,211) 877,742
Community Development 582,200 663,600 551,223 (112,377) (37,387) 513,836
Capital Outlay 2,111,900 2,447,400 932,197 (1,515,203) (368,044) 564,153
Other Financing Uses:
Transfers to Other Funds 100,000 114,500 472,625 358,125 3,758,776 4,231,401
Total Charges to Appropriations 13,408,100 15,750,600 12,072,496 (3,678,104) 3,544,978 15,617,474
Excess (Deficit) Resources
Over (Under) Appropriations $ (3,863,800) $ (5,048,400) $ (885,986) $ 4,162,414 $ (5,098,250) $ (5,984,236)
(1,092,000)
(1,092,000)
13,408,100
198
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - UGM IMPACT FEES - SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Charges for Services $ 5,123,100 $ 5,138,100 $ 6,690,613 $ 1,552,513 $ (4,514) $ 6,686,099
Use of Money and Property 183,500 183,500 162,572 (20,928) (46,383) 116,189
Miscellaneous 526,400 526,400 2,047,658 1,521,258 (2,007,674) 39,984
Other Financing Sources:
Transfers from Other Funds 1,500,000 1,500,000 5,735,600 4,235,600 677,103 6,412,703
Total Available
for Appropriations 7,333,000 7,348,000 14,636,443 7,288,443 (1,381,468) 13,254,975
Capital Outlay 10,623,100 12,453,400 4,723,020 (7,730,380) 76,500 4,799,520
Other Financing Uses:
Transfers to Other Funds 3,354,000 3,354,000 8,196,417 4,842,417 (4,911,184) 3,285,233
Total Charges
to Appropriations 13,977,100 15,807,400 12,919,437 (2,887,963) (4,834,684) 8,084,753
Excess (Deficit) Resources
Over (Under) Appropriations $ (6,644,100) $ (8,459,400) $ 1,717,006 $ 10,176,406 $ 3,453,216 $ 5,170,222
3,729,400
Charges to Appropriations
(outflows):
199
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - SPECIAL ASSESSMENTS - SPECIAL REVENUE FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Use of Money and Property $ 85,700 $ 85,700 $ 71,227 $ (14,473) $ (12,111) $ 59,116
Miscellaneous 5,551,100 5,551,100 6,169,947 618,847 (1,750) 6,168,197
Other Financing Sources:
Transfers from Other Funds - 700 440 (260) - 440
Total Available
for Appropriations 5,636,800 5,637,500 6,241,614 604,114 (13,861) 6,227,753
Capital Outlay 7,308,900 7,325,100 4,516,149 (2,808,951) (79,311) 4,436,838
Other Financing Uses:
Transfers to Other Funds 61,800 61,800 61,800 - 30,829 92,629
Total Charges
to Appropriations 7,370,700 7,386,900 4,577,949 (2,808,951) (48,482) 4,529,467
Excess (Deficit) Resources
Over (Under) Appropriations $ (1,733,900) $ (1,749,400) $ 1,663,665 $ 3,413,065 $ 34,621 $ 1,698,286
-
Charges to Appropriations
(outflows):
200
CITY OF FRESNO, CALIFORNIA
SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET AND ACTUAL
(NON-GAAP BUDGETARY BASIS) - CITY COMBINED - CAPITAL PROJECTS FUND
YEAR ENDED JUNE 30, 2011
Actual Variance with Actual
Amounts Final Budget Budget Amounts
Budgeted Amounts Budgetary Over To GAAP GAAP
Original Final Basis (Under) Reconciliation Basis
Resources (inflows):
Intergovernmental $- $- $ 355,610 $ 355,610 $- $ 355,610
Use of Money and Property 572,900 588,000 690,019 102,019 (21,033) 668,986
Miscellaneous 23,769,000 24,410,000 7,504,984 (16,905,016) (6,685,563) 819,421
Other Financing Sources:
Transfers Budgeted as
Bond Proceeds 654,000 985,700 1,058,194 72,494 13,506,328 14,564,522
Total Available
for Appropriations 24,995,900 25,983,700 9,608,807 (16,374,893) 6,799,732 16,408,539
Capital Outlay 24,233,000 26,966,000 6,569,385 (20,396,615) (1,055,733) 5,513,652
Other Financing Uses:
Transfers to Other Funds 1,700,000 1,700,000 1,156,962 (543,038) 8,163,706 9,320,668
Total Charges
to Appropriations 25,933,000 28,666,000 7,726,347 (20,939,653) 7,107,973 14,834,320
Excess (Deficit) Resources
Over (Under) Appropriations $ (937,100) $ (2,682,300) $ 1,882,460 $ 4,564,760 $ (308,241) $ 1,574,219
722,000
Charges to Appropriations
(outflows):
201
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Nonmajor Enterprise Funds
Nonmajor EnterpriseFunds
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF NET ASSETS
NONMAJOR ENTERPRISE FUNDS
JUNE 30, 2011
Business - Type Activities - Enterprise Funds
Parks Total
Community And Development Nonmajor
Sanitation Parking Recreation Services Enterprise Funds
Assets
Current Assets:
Cash and Investments $ 2,208,996 $- $ 3,893 $ 24,660 $ 2,237,549
Interest Receivable 9,148 - - - 9,148
Accounts Receivable, Net 839,821 483,843 935 4,052,604 5,377,203
Intergovernmental Receivable - - - 51,854 51,854
Due from Other Funds - 5,567 4,500 919 10,986
Total Current Assets 3,057,965 489,410 9,328 4,130,037 7,686,740
Other Assets:
Other Assets - - 69,825 - 69,825
Capital Assets:
Land - 2,853,434 11,508 2,315,825 5,180,767
Buildings, System and Improvements - 11,323,167 12,027,003 - 23,350,170
Machinery & Equipment 252,657 189,957 100,612 69,910 613,136
Less Accumulated Depreciation (172,553) (11,238,098) (7,888,045) (62,936) (19,361,632)
Total Capital Assets, Net 80,104 3,128,460 4,251,078 2,322,799 9,782,441
Total Noncurrent Assets 80,104 3,128,460 4,320,903 2,322,799 9,852,266
Total Assets 3,138,069 3,617,870 4,330,231 6,452,836 17,539,006
Liabilities
Current Liabilities:
Accrued Liabilities 300,726 458,255 36,742 560,065 1,355,788
Accrued Compensated Absences and HRA 78,561 20,249 - 288,214 387,024
Unearned Revenue 477,114 - - - 477,114
Due to Other Funds - 14,111,018 - - 14,111,018
Bonds Payable - - 50,000 - 50,000
Total Current Liabilities 856,401 14,589,522 86,742 848,279 16,380,944
Noncurrent Liabilities:
Accrued Compensated Absences and HRA 519,833 184,353 - 1,846,104 2,550,290
Bonds Payable - - 2,273,558 - 2,273,558
Advances From Other Funds - 1,743,500 - - 1,743,500
Net OPEB Obligation 342,925 334,049 1,135 1,394,959 2,073,068
Total Noncurrent Liabilities 862,758 2,261,902 2,274,693 3,241,063 8,640,416
Total Liabilities 1,719,159 16,851,424 2,361,435 4,089,342 25,021,360
Net Assets
Invested in Capital Assets,80,104 3,128,460 1,927,520 2,322,799 7,458,883
Unrestricted (Deficit)1,338,806 (16,362,014) 41,276 40,695 (14,941,237)
Total Net Assets (Deficits)$ 1,418,910 $(13,233,554) $1,968,796 $2,363,494 $(7,482,354)
204
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2011
Businness - Type Activities - Enterprise Funds
Parks Total
Community And Development Nonmajor
Sanitation Parking Recreation Services Enterprise Funds
Operating Revenues:
Charges for Services $ 10,209,080 $ 5,996,813 $ 742,319 $ 10,669,548 $ 27,617,760
Operating Expenses:
Cost of Services 6,311,776 2,164,751 95,380 7,546,269 16,118,176
Administration 3,378,739 3,478,287 256,509 3,613,218 10,726,753
Amortization - - 4,068 - 4,068
Depreciation 18,216 76,463 304,905 1,287 400,871
Total Operating Expenses 9,708,731 5,719,501 660,862 11,160,774 27,249,868
Operating Income (Loss)500,349 277,312 81,457 (491,226) 367,892
Non-operating Revenue (Expenses):
Interest Income 6,942 8,388 1,711 - 17,041
Interest Expense - (154,663) (121,106) - (275,769)
Gain (Loss) on Sale of Capital Assets - 16,000 - - 16,000
Total Non-operating Revenue (Expense)6,942 (130,275) (119,395) - (242,728)
Income (Loss) Before Contributions and Transfers 507,291 147,037 (37,938) (491,226) 125,164
Capital Contributions - - 10,982 - 10,982
Transfer In - 2,602,701 1,242,313 3,725,659 7,570,673
Transfer Out (135,114) (3,714,758) (288,394) (302,396) (4,440,662)
Changes in Net Assets 372,177 (965,020) 926,963 2,932,037 3,266,157
Total Net Assets (Deficit) - Beginning 1,046,733 (12,268,534) 1,041,833 (568,543) (10,748,511)
Total Net Assets (Deficit) - Ending $ 1,418,910 $ (13,233,554) $ 1,968,796 $ 2,363,494 $ (7,482,354)
205
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2011
Community
Sanitation Parking
Parks
And
Recreation
Development
Services Total
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 9,936,672 $6,084,217 $745,318 $9,178,577 $25,944,784
Cash Payments to Suppliers for Services (1,302,014) (3,378,650) (326,975) (886,246) (5,893,885)
Cash Paid for Interfund Services Used (3,076,444) (574,544) (2,998) (2,633,774) (6,287,760)
Cash Payments to Employees for Services (5,237,628) (1,589,423) (52,449) (7,047,373) (13,926,873)
Net Cash Provided by (Used for) Operating Activities 320,586 541,600 362,896 (1,388,816) (163,734)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Interest payments on capital debt - - (109,510) - (109,510)
Principal payments on capital debt-bonds - - (45,000) - (45,000)
Proceeds from sale of capital assets - 16,000 - - 16,000
Acquisition and construction of capital assets - (10,570) (36,207) - (46,777)
Net Cash Provided by (Used for) Capital and Related
Financing Activities - 5,430 (190,717) - (185,287)
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES:
Interest Payments, Noncapital - (154,663) (13,605) - (168,268)
Borrowing, Repayment From (Repayment To) Other Funds - 436,440 (1,246,107) (2,016,294) (2,825,961)
Transfers In - 2,602,701 1,242,313 3,725,659 7,570,673
Transfers Out (135,114) (3,439,896) (187,944) (302,396) (4,065,350)
Net Cash Provided by (Used for) Non-Capital Financing
Activities (135,114) (555,418) (205,343) 1,406,969 511,094
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends on investments 6,391 8,388 1,711 5,857 22,347
Net Cash Provided by Investing Activities 6,391 8,388 1,711 5,857 22,347
Net Increase (Decrease) in Cash and Cash Equivalents 191,863 - (31,453) 24,010 184,420
Cash and Cash Equivalents, Beginning of Year 2,017,133 - 35,346 650 2,053,129
Cash and Cash Equivalents, End of Year $ 2,208,996 $- $3,893 $24,660 $2,237,549
Business-Type Activities - NonMajor Enterprise Funds
206
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
NONMAJOR ENTERPRISE FUNDS
YEAR ENDED JUNE 30, 2011
Community
Sanitation Parking
Parks
And Recreation
Development
Services Total
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating income (loss)$ 500,349 $ 277,312 $81,457 $ (491,226) $ 367,892
Adjustments to reconcile operating income (loss) to net
cash provided by (used for) operating activities:
Depreciation expense 18,216 76,463 304,905 1,287 400,871
Amortization expense - - 4,068 - 4,068
Change in assets and liabilities:
Decrease (increase) in accounts receivable 136,191 103,947 - (1,451,923) (1,211,785)
Decrease (increase) in due from other funds - - - 31,187 31,187
Decrease (increase) in due from other governments - - - (51,854) (51,854)
Decrease (increase) in advances to other funds - (8,388) - - (8,388)
(Decrease) increase in accrued liabilities (113,882) 19,332 (28,556) 357,515 234,409
(Decrease) increase in due to other funds (136,528) (8,155) - (18,381) (163,064)
(Decrease) increase in unearned revenue (272,067) - - - (272,067)
(Decrease) increase in OPEB obligation 188,307 81,089 1,022 234,579 504,997
Net Cash Provided by (Used For) Operating Activities $ 320,586 $ 541,600 $ 362,896 $ (1,388,816) $ (163,734)
Reconciliation of Cash and Cash Equivalents to
the Statement of Net Assets:
Cash and Investments:
Unrestricted $ 2,208,996 $- $3,893 $24,660 $ 2,237,549
Total cash and investments $ 2,208,996 $- $3,893 $24,660 $ 2,237,549
Noncash Investing, Capital, and Financing Activities:
Amortization of bond premium, discount and loss on refunding $- $- $1,540 $- $1,540
Capital asset transfer in(out)- - (100,450) - (100,450)
Decrease in fair value of investments 4,894 - - - 4,894
Developer and Other Capital Contributions - - 10,982 - 10,982
Transfer in(out) to reduce advance(receivable) payable - (274,862) - - (274,862)
Business-Type Activities - NonMajor Enterprise Funds
207
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Internal Service Funds
Internal ServiceFunds
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF NET ASSETS
INTERNAL SERVICE FUNDS
June 30, 2011
Billing
and General Risk
Collection Services Management
Assets
Current Assets:
Cash and Investments $ 998,712 $ 18,160,208 $ 3,071,430
Interest Receivable 63,123 149,937 21,974
Accounts Receivable, Net - 2,064 767,835
Inventories - 740,811 -
Due from Other Funds - 10,400,000 2,064,205
Total Current Assets 1,061,835 29,453,020 5,925,444
Noncurrent Assets:
Restricted:
Cash and Investments 3,080,824 - 309,590
Total Restricted Assets 3,080,824 - 309,590
Capital Assets:
Land - 56,688 -
Buildings, Systems and Improvements 50,000 17,523,370 -
Machinery & Equipment 613,358 145,234,136 23,228
Construction in Progress - 34,443 -
Less Accumulated Depreciation (598,271) (138,193,447) (21,729)
Total Capital Assets, Net 65,087 24,655,190 1,499
Total Noncurrent Assets 3,145,911 24,655,190 311,089
Total Assets 4,207,746 54,108,210 6,236,533
Liabilities
Current Liabilities
Accrued Liabilities 752,905 2,908,892 2,242,810
Accrued Compensated Absences and HRA 130,728 589,255 27,950
Liability for Self Insurance - - 18,468,023
Due to Other Funds - 1,698,902 -
Capital Lease Obligations - 126,576 -
Total Current Liabilities 883,633 5,323,625 20,738,783
Noncurrent Liabilities:
Accrued Compensated Absences and HRA 763,918 4,764,419 183,645
Capital Lease Obligations - 236,965 -
Liability for Self-Insurance - - 65,670,265
Advances From Other Funds - 2,394,650 -
Net OPEB Obligation 945,488 3,335,324 176,079
Deposits Held for Others 3,080,824 49,584 -
Total Noncurrent Liabilities 4,790,230 10,780,942 66,029,989
Total Liabilities 5,673,863 16,104,567 86,768,772
Net Assets
Invested in Capital Assets, Net of Related Debt 65,087 24,291,649 1,499
Unrestricted (Deficit)(1,531,204) 13,711,994 (80,533,738)
Total Net Assets (Deficit)$ (1,466,117) $ 38,003,643 $ (80,532,239)
210
Employees Retirees Blue Collar Blue Collar
Healthcare Healthcare Employees Retirees
Plan Plan Healthcare Plan Healthcare Plan Totals
$ 14,790,507 $- $578,936 $- $ 37,599,793
91,919 - 2,809 - 329,762
- - - - 769,899
- - - - 740,811
255,000 - - - 12,719,205
15,137,426 - 581,745 - 52,159,470
- - - - 3,390,414
- - - - 3,390,414
- - - - 56,688
- - - - 17,573,370
- - - - 145,870,722
- - - - 34,443
- - - - (138,813,447)
- - - - 24,721,776
- - - - 28,112,190
15,137,426 - 581,745 - 80,271,660
173,932 - 213,239 - 6,291,778
- - - - 747,933
3,400,000 - - - 21,868,023
- - 255,000 - 1,953,902
- - - - 126,576
3,573,932 - 468,239 - 30,988,212
- - - - 5,711,982
- - - - 236,965
- - - - 65,670,265
- - - - 2,394,650
- - - - 4,456,891
- - - - 3,130,408
- - - - 81,601,161
3,573,932 - 468,239 - 112,589,373
- - - - 24,358,235
11,563,494 - 113,506 - (56,675,948)
$ 11,563,494 $- $113,506 $- $ (32,317,713)
211
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2011
Billing
and General Risk
Collection Services Management
Operating Revenues:
Charges for Services $ 6,358,131 $ 57,838,456 $ 26,040,347
Operating Expenses:
Cost of Services 5,055,976 38,366,318 22,864,879
Administration 2,245,770 12,745,329 8,388,898
Depreciation 8,523 9,600,632 545
Total Operating Expenses 7,310,269 60,712,279 31,254,322
Operating Income (Loss)(952,138) (2,873,823) (5,213,975)
Nonoperating Revenues (Expenses):
Interest Income 95,349 221,668 15,931
Interest Expense - (17,041) -
Gain on Disposal of Capital Assets - 388,268 -
Total Nonoperating Revenues 95,349 592,895 15,931
Income Before Contributions and Transfers (856,789) (2,280,928) (5,198,044)
Capital Contributions - 30,349 -
Transfer In 43,263 898,988 4,268,030
Transfer Out (225,149) (1,871,795) (1,852,757)
Changes in Net Assets (1,038,675) (3,223,386) (2,782,771)
Total Net Assets (Deficit) - Beginning (427,442) 41,227,029 (77,749,468)
Total Net Assets (Deficit) - Ending $ (1,466,117) $ 38,003,643 $ (80,532,239)
212
Blue Collar Blue Collar
Employees Retirees Employees Retirees
Healthcare Plan Healthcare Plan Healthcare Plan Healthcare Plan Totals
$ 26,572,175 $ 7,447,990 $ 6,728,239 $ 494,249 $ 131,479,587
23,503,584 7,109,777 6,737,930 494,249 104,132,713
1,890,356 338,213 - - 25,608,566
- - - - 9,609,700
25,393,940 7,447,990 6,737,930 494,249 139,350,979
1,178,235 - (9,691) - (7,871,392)
158,866 - 4,979 - 496,793
- - - - (17,041)
- - - - 388,268
158,866 - 4,979 - 868,020
1,337,101 - (4,712) - (7,003,372)
- - - - 30,349
- - - - 5,210,281
- - (136,862) - (4,086,563)
1,337,101 - (141,574) - (5,849,305)
10,226,393 - 255,080 - (26,468,408)
$ 11,563,494 $- $ 113,506 $- $ (32,317,713)
213
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2011
Billing &
Collection
General
Services
Risk
Management
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 1,192,926 $ 13,635,803 $-
Cash Received from Interfund Services Provided 4,917,864 47,984,002 25,823,483
Cash Payments to Suppliers for Services (969,911) (18,693,456) (6,442,978)
Cash Paid for Interfund Services Used (1,424,893) (9,255,051) (1,618,199)
Cash Payments to Employees for Services (4,852,462) (23,354,440) (2,221,110)
Cash Payments for Claims and Refunds - - (14,876,171)
Net Cash Provided by (Used For) Operating Activities (1,136,476) 10,316,858 665,025
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Capital contributions - 20,097 -
Interest payments on capital debt - (19,966) -
Principal payment on capital lease obligations - (609,893) -
Proceeds from sale of capital assets - 419,896 -
Acquisition and construction of capital assets - (5,662,413) -
Net Cash Provided by (Used for) Capital and Related Financing
Activities - (5,852,279) -
CASH FLOWS FROM NON-CAPITAL FINANCING
ACTIVITIES:
Borrowing, Repayment From (Repayment To) Other Funds 1,016,294 10,197,889 (285,218)
Transfers In - 898,988 4,268,030
Transfers Out (225,149) (1,871,795) (1,852,757)
Net Cash Provided by (Used for) Non-Capital Financing
Activities 791,145 9,225,082 2,130,055
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends on investments 100,791 245,454 22,501
Net Cash Provided by Investing Activities 100,791 245,454 22,501
Net Increase (Decrease) in Cash and Cash Equivalents (244,540) 13,935,115 2,817,581
Cash and Cash Equivalents, Beginning of Year 4,324,076 4,225,093 563,439
Cash and Cash Equivalents, End of Year $ 4,079,536 $ 18,160,208 $ 3,381,020
214
Employees
Healthcare Plan
Retirees
Healthcare Plan
Blue Collar
Employees
Healthcare Plan
Blue Collar
Retirees
Healthcare Plan Total
$ 4,831,756 $ 5,211,276 $ 1,565,323 $57,886 $ 26,494,970
21,740,419 2,236,714 5,162,916 436,363 108,301,761
(2,046,025) (338,213) - - (28,490,583)
- - - - (12,298,143)
- - - - (30,428,012)
(23,503,584) (7,109,777) (6,474,218) (494,249) (52,457,999)
1,022,566 - 254,021 - 11,121,994
- - - - 20,097
- - - - (19,966)
- - - - (609,893)
- - - - 419,896
- - - - (5,662,413)
- - - - (5,852,279)
- - - - 10,928,965
- - - - 5,167,018
- - (136,862) - (4,086,563)
- - (136,862) - 12,009,420
178,874 - 5,171 - 552,791
178,874 - 5,171 - 552,791
1,201,440 - 122,330 - 17,831,926
13,589,067 - 456,606 - 23,158,281
$ 14,790,507 $- $ 578,936 $- $ 40,990,207
(Continued)
215
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
YEAR ENDED JUNE 30, 2011 (Continued)
Billing &
Collection
General
Services
Risk
Management
Reconciliation of Operating Income (Loss) to Net Cash
Provided by (Used for) Operating Activities:
Operating income (loss)$ (952,138) $ (2,873,823) $ (5,213,975)
Adjustments to reconcile operating income to net cash
provided by operating activities:
Depreciation expense 8,523 9,600,632 545
Change in assets and liabilities:
Decrease (increase) in accounts receivable - 1,192 562,123
Decrease (increase) in due from other funds - 2,117,081 (778,987)
Decrease (increase) in due from other governments - - -
Decrease (increase) in material and supplies inventory - 31,192 -
(Decrease) increase in accrued liabilities (156,120) (948,935) 1,060,276
(Decrease) increase in due to other funds (28,870) 1,663,002 -
(Decrease) increase in liability for self-insurance - - 4,998,557
(Decrease) increase in deposits (218,470) 74 -
(Decrease) increase in OPEB obligation 210,599 726,443 36,486
Net Cash Provided by (Used For) Operating Activities $ (1,136,476) $ 10,316,858 $ 665,025
Reconciliation of Cash and Cash Equivalents
to the Statement of Net Assets:
Cash and Investments:
Unrestricted $ 998,712 $ 18,160,208 $ 3,071,430
Restricted 3,080,824 - 309,590
Cash and Cash Equivalents at End of Year on Statement
of Cash Flows $ 4,079,536 $ 18,160,208 $ 3,381,020
Noncash Investing, Capital, and Financing Activities:
Acquisition and construction of capital assets on accounts payable $- $34,443 $-
Borrowing under capital lease - 209,385 -
Capital asset transfer in 43,263 - -
Decrease in fair value of investments 9,014 19,876 8,462
Developer and Other Capital Contributions - 10,252 -
216
Employees
Healthcare Plan
Retirees
Healthcare Plan
Blue Collar
Employees
Healthcare Plan
Blue Collar
Retirees
Healthcare Plan Total
$ 1,178,235 $- $(9,691) $- $ (7,871,392)
- - - - 9,609,700
- - - - 563,315
- - - - 1,338,094
(255,000) - - - (255,000)
- - - - 31,192
(669) - 8,712 - (36,736)
- - 255,000 - 1,889,132
100,000 - - - 5,098,557
- - - - (218,396)
- - - - 973,528
$ 1,022,566 $- $ 254,021 $- $ 11,121,994
$ 14,790,507 $- $ 578,936 $- $ 37,599,793
- - - - 3,390,414
$ 14,790,507 $- $ 578,936 $- $ 40,990,207
$- $- $- $- $34,443
- - - - 209,385
- - - - 43,263
- - - - 37,352
- - - - 10,252
217
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Fiduciary Funds
Fiduciary Funds
CITY OF FRESNO, CALIFORNIA
2011-06-30
COMBINING STATEMENT OF FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - TRUST FUNDS
June 30, 2011
Pension Trust Funds
Fire And Police Employee
Retirement Retirement
System System Total
Assets
Cash and Investments $ 1,317,503 $ 1,303,391 $2,620,894
Receivables:
Receivables for Investments Sold 11,096,805 9,180,107 20,276,912
Interest and Dividends Receivable 3,757,293 3,324,085 7,081,378
Other Receivables 4,550,765 3,900,469 8,451,234
Total Receivables 19,404,863 16,404,661 35,809,524
Investments, at fair value:
Short Term Investments 29,404,478 25,564,561 54,969,039
Domestic Equity 400,477,491 348,138,387 748,615,878
Corporate Bonds 136,784,237 118,962,688 255,746,925
International Equity 221,750,417 192,794,516 414,544,933
Emerging Market Equity 48,997,718 42,596,639 91,594,357
Government Bonds 175,695,061 152,751,124 328,446,185
Real Estate 105,837,124 92,317,681 198,154,805
Total Investments 1,118,946,526 973,125,596 2,092,072,122
Collateral Held for Securities Lent 173,363,344 150,723,905 324,087,249
Capital Assets, net of Accumulated Depreciation 50,633 50,633 101,266
Prepaid Expense 102,840 102,840 205,680
Total Assets 1,313,185,709 1,141,711,026 2,454,896,735
Liabilities
Accrued Liabilities 29,377,186 25,540,568 54,917,754
Collateral Held for Securities Lent 173,363,344 150,723,905 324,087,249
Other Liabilities 1,233,603 1,070,049 2,303,652
Total Liabilities 203,974,133 177,334,522 381,308,655
Net Assets
Net Assets Held in Trust for Benefits $ 1,109,211,576 $ 964,376,504 $ 2,073,588,080
220
CITY OF FRESNO, CALIFORNIA
2011-06-30
COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS
FIDUCIARY FUNDS - TRUST FUNDS
YEAR ENDED JUNE 30, 2011
Pension Trust Funds
Fire And Police Employees
Retirement Retirement
System System Total
Additions
Contributions:
Employer $ 19,397,178 $ 8,214,569 $ 27,611,747
System Members 7,304,036 5,275,219 12,579,255
Total Contributions 26,701,214 13,489,788 40,191,002
Investment Income:
Net Appreciation in Value of Investments 194,349,041 170,018,578 364,367,619
Interest 13,911,170 12,144,912 26,056,082
Dividends 12,758,726 11,137,342 23,896,068
Other Investment Related 48,344 45,526 93,870
Total Investment Income 221,067,281 193,346,358 414,413,639
Less Investment Expense (5,621,785) (4,897,840) (10,519,625)
Total Net Investment Income 215,445,496 188,448,518 403,894,014
Securities Lending Income:
Securities Lendings Earnings 561,097 487,823 1,048,920
Less Securities Lending Expense (12,577) (10,935) (23,512)
Net Securities Lending Income 548,520 476,888 1,025,408
Total Additions 242,695,230 202,415,194 445,110,424
Deductions
Benefit Payments 50,556,250 41,487,860 92,044,110
Refund of Contributions 493,579 2,092,260 2,585,839
Administrative Expenses 1,079,951 1,029,440 2,109,391
Total Deductions 52,129,780 44,609,560 96,739,340
Net Increase 190,565,450 157,805,634 348,371,084
Net Assets Available for Benefits Beginning 918,646,126 806,570,870 1,725,216,996
Net Assets Ending $ 1,109,211,576 $ 964,376,504 $ 2,073,588,080
221
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
YEAR ENDED JUNE 30, 2011
CITY DEPARTMENTAL AND SPECIAL PURPOSE FUNDS
Balance Balance
June 30, 2010 Additions Deletions June 30, 2011
Assets
Cash and Investments $ 5,536,809 $ 257,835,522 $ 258,231,204 $ 5,141,127
Restricted Cash and Investments Held by Fiscal Agent 304,622 50,982 - 355,604
Interest Receivable 20,932 65,241 67,230 18,943
Loans and Other Receivable 265,802 243,882 266,631 243,053
Due From Other Governments 11,983 - 11,983
Total Assets $ 6,128,165 $ 258,207,610 $ 258,565,065 $ 5,770,710
Liabilities
Accrued Liabilities $121,478 $65,585,858 $65,664,374 $42,962
Deposits Held for Others 6,006,687 6,858,926 7,137,865 5,727,748
Total Liabilities $6,128,165 $72,444,784 $72,802,239 $5,770,710
SPECIAL ASSESSMENTS DISTRICT FUNDS
Balance Balance
June 30, 2010 Additions Deletions June 30, 2011
Assets
Cash and Investments $ 638,533 $ 698,392 $ 1,030,801 $ 306,124
Restricted Cash and Investments Held by Fiscal Agent 582,473 211,677 - 794,150
Interest Receivable 12,892 4,091 14,347 2,636
Due from Other Governments 369,665 386,739 369,665 386,739
Total Assets $ 1,603,563 $ 1,300,899 $ 1,414,813 $ 1,489,649
Liabilities
Accrued Liabilities $$ 100,216 $ 99,366 $850
Prepayment of Special Assessment - 84,827 84,827 -
Deposits Held for Others 1,603,563 1,457,042 1,571,806 1,488,799
Total Liabilities $ 1,603,563 $ 1,642,085 $ 1,755,999 $ 1,489,649
222
CITY OF FRESNO, CALIFORNIA
COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES
AGENCY FUNDS
YEAR ENDED JUNE 30, 2011
TOTAL AGENCY FUNDS
Balance Balance
June 30, 2010 Additions Deletions June 30, 2011
Assets
Cash and Investments $ 6,175,342 $ 258,533,914 $ 259,262,005 $ 5,447,251
Restricted Cash and Investments Held by Fiscal Agent 887,095 262,659 - 1,149,754
Interest Receivable 33,824 69,332 81,577 21,579
Loans and Other Receivable 265,802 243,882 266,631 243,053
Due from Other Governments 369,665 398,722 369,665 398,722
Total Assets $ 7,731,728 $ 259,508,509 $ 259,979,878 $ 7,260,359
Liabilities
Accrued Liabilities $121,478 $ 65,686,074 $ 65,763,740 $ 43,812
Prepayment of Special Assessment - 84,827 84,827 -
Deposits Held for Others 7,610,250 8,315,968 8,709,671 7,216,547
Total Liabilities $ 7,731,728 $ 74,086,869 $ 74,558,238 $ 7,260,359
223
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Discretely Presented Component Unit Discretely PresnetedComponent Unit
STATEMENT OF NET ASSETS
DISCRETELY PRESENTED COMPONENT UNIT
DECEMBER 31, 2010
City of Fresno
Cultural Arts
Properties
Assets
Cash and Investments $ 347,942
Receivables, Net 80,468
Capital Assets:
Land and Construction in Progress
Not Being Depreciated 888,000
Facilities Infrastructure and Equipment
Net of Depreciation 13,632,920
Total Assets 14,949,330
Liabilities
Unearned Revenue 232,262
Notes Payable, due in more than one year 16,660,000
Total Liabilities 16,892,262
Net Assets
Invested in Capital Assets, Net of Related Debt (2,139,080)
Unrestricted 196,148
Total Net Assets (Deficit)$ (1,942,932)
CITY OF FRESNO, CALIFORNIA
226
CITY OF FRESNO, CALIFORNIA
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS
DISCRETELY PRESENTED COMPONENT UNIT
FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2010
City of Fresno
Cultural Arts
Properties
Operating Revenues:
Charges for Services $ 282,262
Operating Expenses:
Cost of Services 1,862,112
Depreciation 274,933
Total Operating Expenses 2,137,045
Operating (Loss)(1,854,783)
Non-operating Revenue (Expenses):
Interest Income 82,792
Interest Expense (170,941)
Total Non-operating Revenue (Expense)(88,149)
Changes in Net Assets (1,942,932)
Total Net Assets (Deficit) - Beginning (1,898,026)
Prior Period Adjustment 1,898,026
Total Net Assets - Beginning Restated -
Total Net Assets (Deficit) - Ending $ (1,942,932)
227
CITY OF FRESNO, CALIFORNIA
STATEMENT OF CASH FLOWS
DISCRETELY PRESENTED COMPONENT UNIT
FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2010
City of Fresno
Cultural Arts
Properties
CASH FLOWS FROM OPERATING ACTIVITIES:
Cash Received from Customers $ 435,091
Cash Payments to Suppliers for Services (1,547,060)
Net Cash (Used for) Operating Activities (1,111,969)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES:
Interest payments on capital debt (170,941)
Proceeds from capital leases 16,660,000
Acquisition and construction of capital assets (15,111,940)
Net Cash Provided by Capital and Related Financing Activities 1,377,119
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest and dividends on investments 82,792
Net Cash Provided by Investing Activities 82,792
Net Increase in Cash and Cash Equivalents 347,942
Cash and Cash Equivalents, Beginning of Year 218,537
Prior Period Adjustment (218,537)
Beginning Cash Restated -
Cash and Cash Equivalents, End of Year $ 347,942
228
CITY OF FRESNO, CALIFORNIA
STATEMENT OF CASH FLOWS
DISCRETELY PRESENTED COMPONENT UNIT
FOR THE NINE MONTH PERIOD ENDED DECEMBER 31, 2010
City of Fresno
Cultural Arts
Properties
Reconciliation of Operating (Loss) to Net Cash
(Used for) Operating Activities:
Operating (loss)$ (1,854,783)
Adjustments to reconcile operating (loss) to net cash
(used for) operating activities:
Depreciation expense 274,933
Change in assets and liabilities:
Decrease (increase) in accounts receivable (14,351)
(Decrease) increase in accrued liabilities 449,970
(Decrease) increase in unearned revenue 32,262
Net Cash (Used For) Operating Activities $ (1,111,969)
Reconciliation of Cash and Cash Equivalents
to the Statement of Net Assets:
Cash and Investments:
Unrestricted $ 347,942
Cash and Cash Equivalents at End of Year on Statement
of Cash Flows $ 347,942
229
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2011 CAFR
Comprehensive Annual Financial Report
City of Fresno, California
For the fiscal year ended June 30, 2011
City of Fresno • www.fresno.gov
Statistical Section
Statistical Section
232
CITY OF FRESNO, CALIFORNIA
52nd COMPREHENSIVE
ANNUAL FINANCIAL REPORT
Statistical Section
This section of the City's comprehensive annual financial report presents detailed
information as a context for understanding what the information in the financial statements, note
disclosures, and required supplementary information says about the City's financial health.
Contents
Financial Trends
These schedules contain trend information to help the reader understand how the City's
financial performance and well-being have changed over time. (Pages 233 to 237)
Revenue Capacity
These schedules contain information to help the reader assess the City's most significant
local revenue sources, the property tax. (Pages 238 to 241)
Debt Capacity
These schedules present information to help the reader assess the affordability of the City's
current levels of outstanding debt and the City's ability to issue additional debt in the future.
(Pages 242 to 248)
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the reader understand the
environment within which the City's financial activities take place. (Pages 249 to 250)
Operating Information
These schedules contain information about the City's operations and resources to help the
reader understand how the City's financial information relates to the services the City provides
and the activities it performs. (Pages 251 to 255)
Sources:
Unless otherwise noted, the information in these schedules is derived from the comprehensive
annual financial reports for the relevant year. The City implemented Governmental Accounting
Standards Board Statement No. 34, Basic Financial Statements - and Management's Discussion
and Analysis - for State and Local Governments in 2002; schedules presenting government-wide
data include information beginning in that year.
CITY OF FRESNO, CALIFORNIA
NET ASSETS BY COMPONENT
LAST TEN FISCAL YEARS
(dollars in thousands)
233
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Government activities
Invested in Capital Assets, net of
related Debt 633,842$ 645,328$ 636,914$ 658,781$ 662,073$ 697,544$ 732,835$ 736,410$ 781,253$ 760,927$
Restricted 119,203 65,073 163,823 136,785 145,581 148,392 181,207 219,892 152,271 138,021
Unrestricted (271,745) (218,281) (314,809) (234,193) (225,716) (231,900) (227,490) (267,498) (266,011) (230,447)
Total governmental activities net
assets 481,300$ 492,120$ 485,929$ 561,373$ 581,937$ 614,036$ 686,552$ 688,804$ 667,513$ 668,501$
Business-type activiites
Invested in Capital Assets, net of
related Debt 352,536$ 424,990$ 480,153$ 479,670$ 509,975$ 537,897$ 622,600$ 679,116$ 760,272$ 776,377$
Restricted 40,583 35,090 30,338 29,921 28,752 31,705 31,222 42,922 - -
Unrestricted 206,118 157,126 149,331 139,418 165,691 165,646 131,167 112,405 125,129 168,025
Total business-type activities 599,237$ 617,206$ 659,822$ 649,009$ 704,418$ 735,248$ 784,989$ 834,443$ 885,401$ 944,402$
Primary government
Invested in Capital Assets, net of
related Debt 986,378$ 1,070,318$ 1,117,067$ 1,138,452$ 1,172,048$ 1,235,441$ 1,355,434$ 1,415,526$ 1,541,524$ 1,537,304$
Restricted 159,785 100,163 194,162 166,706 174,333 180,097 212,429 262,815 152,271 138,021
Unrestricted (65,626) (61,155) (165,478) (94,775) (60,026) (66,253) (96,323) (155,093) (140,882) (62,422)
Total primary government 1,080,537$ 1,109,326$ 1,145,751$ 1,210,382$ 1,286,355$ 1,349,285$ 1,471,540$ 1,523,247$ 1,552,914$ 1,612,903$
Source: City of Fresno, Finance Department
Notes: No long term debt issued in FY2003.
Fiscal Year
(400,000,000)
(200,000,000)
-
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Government Activities
Invested in Capital Assets,
net of related Debt
Restricted
Unrestricted
-
200,000,000
400,000,000
600,000,000
800,000,000
1,000,000,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Business-type Activities
Invested in Capital Assets,
net of related Debt
Restricted
Unrestricted
CITY OF FRESNO, CALIFORNIA
CHANGE IN NET ASSETS
LAST TEN FISCAL YEARS
(dollars in thousands)
234
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Expenses
Government activities:
General Government 30,786$ 13,262$ 18,866$ 24,108$ 23,637$ 23,842$ 30,023$ 30,592$ 50,381$ 26,642$
Public Protection 114,855 120,987 137,802 144,932 163,607 183,974 205,714 204,013 211,586 192,993
Public Ways and Facilities 51,295 41,536 62,163 49,128 52,824 56,236 56,961 66,053 73,653 68,471
Culture and Recreation 17,888 21,527 21,614 20,787 24,714 25,119 28,689 27,497 22,806 21,797
Community Development 15,707 12,668 8,516 8,996 11,385 15,849 18,767 20,331 14,823 14,981
Redevelopment 6,415 5,831 8,398 6,669 8,876 6,300 6,036 12,079 7,084 4,821
Interest on Long-term Debt 14,658 21,113 20,804 23,388 24,361 23,970 24,445 24,811 25,357 25,722
Total government activities 251,603 236,924 278,163 278,008 309,405 335,289 370,635 385,376 405,690 355,428
Business-type activities:
Water System 39,969 34,619 35,575 37,180 42,523 47,147 50,476 52,370 58,013 64,134
Sewer System 42,774 40,722 28,255 44,541 45,853 54,145 46,475 49,867 47,476 47,568
Solid Waste System 35,641 38,246 39,117 30,469 36,523 45,061 45,358 43,671 44,845 45,424
Transit 31,557 30,744 34,168 35,007 39,749 43,012 47,737 47,529 47,627 47,250
Airports 14,031 13,724 17,559 21,356 23,319 21,311 24,861 26,728 29,348 29,020
Fresno Convention Center 11,802 12,067 10,323 9,961 9,756 10,593 11,376 11,676 12,489 11,637
Community Sanitation 9,243 10,162 9,184 8,420 8,116 10,595 10,114 9,683 10,099 10,024
Parking 3,767 4,773 4,718 5,444 5,707 7,568 6,518 6,909 7,957 5,956
Parks and Recreation 2,022 2,233 2,096 2,557 1,688 1,454 1,142 2,043 1,992 782
Development Services 8,005 8,186 9,440 11,132 14,344 17,434 18,227 13,543 10,886 11,408
Stadium 32 3,254 3,955 3,808 3,816 3,769 3,729 3,977 3,627 3,607
Total business-type activities 198,843 198,730 194,391 209,876 231,392 262,090 266,013 267,996 274,359 276,810
Total primary government expenses 450,447$ 435,654$ 472,554$ 487,885$ 540,797$ 597,379$ 636,648$ 653,372$ 680,049$ 632,238$
Program Revenues
Government activities:
Charges for Services:
General Government 13,770$ 11,868$ 9,786$ 10,464$ 11,451$ 5,555$ 18,798$ 17,432$ 17,286$ 16,454$
Public Protection 2,035 7,128 9,592 12,163 14,355 16,684 22,889 19,628 19,014 18,321
Public Ways and Facilities 7,218 9,736 6,067 5,357 10,891 7,926 4,150 3,583 12,515 13,440
Culture and Recreation 1,343 1,211 1,375 1,416 854 1,933 1,763 1,837 2,389 2,432
Community Development 1,237 265 140 153 572 543 125 138 269 653
Other 78 - - - - - - - - -
Operating Grants and Contributions 25,982 11,817 28,670 30,486 41,498 51,657 60,552 40,480 45,265 43,011
Capital Grants and Contributions 19,388 26,827 26,816 29,962 22,734 39,976 62,661 57,261 64,464 40,295
Total government program revenues 71,051 68,852 82,446 90,000 102,356 124,274 170,938 140,359 161,202 134,606
Business-type activities:
Charges for Services:
Water System 36,702 39,703 39,957 41,603 39,255 45,137 56,360 65,597 67,722 67,922
Sewer System 52,962 46,502 48,248 49,360 48,404 50,363 60,799 62,521 74,158 76,628
Solid Waste Management 30,411 37,301 38,613 39,303 38,820 43,251 47,719 49,849 51,364 51,753
Transit 8,038 7,738 7,583 7,404 7,704 8,286 9,711 10,280 9,588 9,486
Airports 9,827 12,822 13,122 16,066 14,669 15,163 16,137 19,768 19,367 21,701
Fresno Convention Center 7,645 4,442 3,497 2,917 3,267 3,043 3,353 3,130 3,038 2,929
Community Sanitation 9,159 9,293 8,814 9,215 9,456 9,692 9,702 10,075 10,182 10,209
Parking 4,458 4,765 5,285 4,984 5,719 7,765 6,346 7,129 6,756 5,997
Parks and Recreation 1,676 1,804 1,924 1,930 885 542 560 490 635 742
Development Services 7,776 9,960 12,926 14,379 16,319 15,678 12,732 9,952 9,251 10,669
Stadium 250 1,571 1,505 1,500 1,500 1,500 1,508 1,500 1,675 340
Operating Grants and Contributions 17,786 18,801 21,772 20,815 21,921 31,256 38,059 35,959 40,964 49,401
Capital Grants and Contributions 16,074 11,165 41,063 39,288 59,862 40,126 36,306 33,762 20,859 17,744
Total business-type program revenues 202,766 205,866 244,309 248,763 267,780 271,801 299,292 310,012 315,559 325,521
Total primary government program
revenues $ 273,816 $ 274,718 $ 326,755 $ 338,764 $ 370,136 $ 396,076 $ 470,230 $ 450,371 $ 476,761 $ 460,127
Fiscal Year
CITY OF FRESNO, CALIFORNIA
CHANGE IN NET ASSETS
LAST TEN FISCAL YEARS
(dollars in thousands)
235
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Net (Expense)/Revenue
Governmental activities (180,553)$ (168,071)$ (195,717)$ (188,008)$ (207,049)$ (211,014)$ (199,696)$ (245,017)$ (244,488)$ (220,822)$
Business-type activities 3,922 7,136 49,918 38,886 36,388 9,712 33,279 42,016 41,200 48,711
Total primary government net expense (176,631)$ (160,936)$ (145,799)$ (149,121)$ (170,661)$ (201,303)$ (166,417)$ (203,001)$ (203,288)$ (172,111)$
General Revenues and other changes
in Net Assets
Government activities:
Property Taxes 50,840$ 53,833$ 58,450$ 58,577$ 69,250$ 119,320$ 134,266$ 135,353$ 126,345$ 125,687$
Sales Taxes 54,504 59,140 64,615 52,986 60,525 59,881 57,238 50,332 46,999 49,251
In Lieu Sales Tax - - - 17,123 19,546 19,279 18,524 16,274 15,208 15,947
Franchise Taxes 5,117 4,652 5,237 5,389 7,482 6,166 6,552 7,376 7,059 7,916
Business Taxes 12,055 13,116 14,255 15,130 18,015 16,510 17,614 14,611 14,893 14,249
Room Tax 3,981 8,552 8,711 8,981 10,065 10,815 10,791 9,927 8,548 8,450
Other Taxes 9,422 9,561 2,720 3,564 4,118 3,894 3,472 3,717 2,134 1,948
Revenues Restricted for Infrastructure
Maintenance 944 582 460 1,596 1,461 1,627 395 295 - -
In Lieu VLF - - - 24,341 29,926 - - - - -
Unrestricted Grants and Contributions 24,434 25,978 20,716 13,221 3,837 - - - - -
Investment earnings 7,290 5,232 3,952 5,573 8,984 12,314 11,445 8,476 6,000 4,435
Gain on sale of capital assets 596 (406) 878 709 983 82 981 485 146 536
Other 244 - - - - - - - - -
Transfers (1,037) (1,347) 9,531 56,260 (6,577) 1,146 (520) (1,718) (4,135) (6,608)
Total government activities 168,392 178,892 189,526 263,452 227,614 251,034 260,758 245,128 223,197 221,811
Business-type Activities:
Investment earnings 15,291 8,950 2,229 6,372 4,749 11,809 12,186 7,809 5,614 3,528
Passenger and Customer Facility
Charges - - - - 4,003 3,686 3,706 - - -
FAA Audit Compliance Settlement - - - - - 6,479 - - - -
Gain on sale of capital assets (583) 536 - 188 - 291 50 52 9 153
Transfers 1,037 1,347 (9,531) (56,260) 6,577 (1,146) 520 1,718 4,135 6,608
Total business-type activities 15,744 10,832 (7,302) (49,699) 15,329 21,119 16,462 9,579 9,758 10,289
Total primary government 184,136$ 189,724$ 182,224$ 213,752$ 242,943$ 272,153$ 277,220$ 254,707$ 232,955$ 232,100$
Change in Net Assets
Government activities (12,162)$ 10,820$ (6,191)$ 75,444$ 20,565$ 40,019$ 61,062$ 111$ (21,291)$ 989$
Business-type activities 19,666 17,968 42,616 (10,813) 51,718 30,831 49,740 51,595 50,958 59,000
Total primary government 7,505$ 28,788$ 36,425$ 64,631$ 72,282$ 70,850$ 110,802$ 51,706$ 29,667$ 59,989$
Source: Source: Department of Finance, City of Fresno
Notes: Accounting requirements changed in FY 2002 due to GASB Statement 34
Fiscal Year
CITY OF FRESNO, CALIFORNIAFUND BALANCE GOVERNMENTAL FUNDSLAST TEN FISCAL YEARS(modified accrual basis of accounting)(dollars in thousands)20022003200420052006200720082009General FundReserved14,198$ 15,059$ 17,385$ 21,292$ 24,133$ 26,089$ 27,463$ 28,296$ Unreserved18,560 19,234 20,451 29,083 35,483 33,449 30,636 474 Total General Fund32,759$ 34,294$ 37,836$ 50,375$ 59,617$ 59,538$ 58,099$ 28,771$ All other Governmental FundsReserved130,531$ 132,742$ 179,021$ 200,323$ 176,499$ 182,687$ 163,004$ 184,111$ Unreserved, reported in:Special Revenue Funds4,212 1,581 (1,935) (7,826) (4,332) (11,175) 3,064 (1,792) Debt service funds(59,978) (64,016) (67,357) (73,786) (77,367) (76,487) (33,147) (24,183) Capital projects funds(1,354) (1,561) (4,620) (867) 14,649 12,610 18,539 19,333 Total all other governmental funds73,412$ 68,746$ 105,110$ 117,844$ 109,449$ 107,635$ 151,460$ 177,469$ 2010 12011 1General FundNonspendable31,821$ 16,828$ Committed10,586 1,444 Unassigned(2,228) (64) Total General Fund40,179$ 18,208$ All other Governmental FundsRestricted165,679$ 143,214$ Assigned33,216 31,822 Unassigned(61,582) (14,272) Total all other governmental funds137,313$ 160,764$ Notes: 1 The City implemented GASB No. 54 in fiscal year 2011 and restated the presentation for fiscal year 2010. Source: City of Fresno, Finance DepartmentFiscal YearFiscal Year236
CITY OF FRESNO, CALIFORNIA
CHANGES IN FUND BALANCES, GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(dollars in thousands)
237
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Revenues
Taxes 132,527$ 147,117$ 160,711$ 170,732$ 225,253$ 241,884$ 258,186$ 258,840$ 233,399$ 243,155$
Licenses and Permits 240 241 310 321 307 352 357 317 292 423
Intergovernmental 64,867 59,116 44,569 62,333 38,417 44,718 56,925 36,508 53,157 58,183
Charges for Services 17,124 22,445 16,072 18,833 30,265 31,924 28,314 25,901 22,646 20,535
Fines 896 702 2,323 3,126 3,005 3,767 5,008 3,250 3,372 3,171
Use of Money and Property 7,383 5,066 4,045 4,819 7,855 10,283 8,746 6,973 3,688 4,225
Contributed from Property Owners 1,114 1,625 94 - - - - - - -
Other Revenue - - 178 - - - - - - -
Miscellaneous 13,692 9,592 9,505 14,888 10,544 16,027 14,218 14,938 14,953 14,607
Total Revenues 237,843 245,903 237,807 275,053 315,645 348,956 371,754 346,727 331,507 344,299
Expenditures
General Government 25,899 12,648 12,676 14,543 13,088 15,048 16,965 16,774 30,693 12,818
Public Protection 108,524 117,981 133,611 147,180 161,960 177,000 191,076 187,075 183,168 184,740
Public Ways and Facilities 25,388 29,933 21,583 19,010 19,292 20,268 21,500 19,010 24,857 20,386
Culture and Recreation 16,616 19,118 19,868 20,654 23,098 22,685 23,884 23,596 20,400 16,223
Community Development 12,872 12,654 7,713 8,919 10,548 15,168 18,347 20,227 13,012 12,473
Capital Outlays 34,694 29,404 35,840 61,663 47,786 56,132 64,193 91,708 81,121 50,902
Debt Service:
Bond Issuance Cost - - - 739 - - - - - -
Principal 7,466 8,505 8,630 8,896 12,796 19,296 13,999 15,241 21,312 14,368
Interest 13,445 20,795 20,394 22,991 24,162 24,027 24,353 23,746 26,095 25,074
Total Expenditures 244,902 251,037 260,314 304,595 312,731 349,624 374,317 397,377 400,658 336,984
Excess (Deficiency) of Revenue Over (Under)
Expenditures (7,059) (5,134) (22,507) (29,542) 2,914 (668) (2,563) (50,650) (69,151) 7,315
Other Financing Sources (Uses)
Transfers In 17,322 35,482 45,072 82,416 67,679 73,115 77,395 91,923 142,202 137,969
Transfers Out (18,350) (37,018) (37,990) (78,715) (72,112) (70,557) (74,898) (91,505) (141,669) (145,587)
Discount on Debt Issued - - - - - - (437) (870) - -
Refunding Bond Issued - - 5,005 - - - 38,210 - 23,395 -
FAA Litigation Settlement - - - - - (5,847) - - - -
Payment to Refunding Bonds (215,774) - (4,809) - - - (34,745) - (23,286) -
Note Proceeds - 1,500 - - - 48 - - - -
Gain on Sales of Property - (845) 440 - - - - - - -
Long Term Debt Issued 218,768 - 52,780 47,690 - - 35,205 46,790 23,100 -
Premium on Debt Issued - - 126 300 - - 2,019 - - -
Proceeds for Note Obligation - - - - - - - 600 - -
Proceeds for Capital Lease Obligations 693 2,885 1,789 3,124 2,366 2,017 2,200 392 - 1,707
Sale of Capital Assets - - - - - - - - 16,661 77
Total Other Financing Sources (Uses)2,659 2,004 62,413 54,816 (2,068) (1,224) 44,949 47,330 40,403 (5,834)
Net Change in Fund Balance (4,400)$ (3,130)$ 39,906$ 25,274$ 847$ (1,893)$ 42,386$ (3,320)$ (28,748)$ 1,481$
Debt Service as a Percentage of Non-capital
Expenditures 9.64% 14.09% 12.47% 13.73% 13.43% 15.42% 11.94% 11.22% 14.75% 12.88%
Source: City of Fresno, Finance Department
Notes: To properly calculate the ratio of total debt service expenditures to noncapital expenditures, only governmental fund
expenditures for the acquisition and construction of assets that are classified as capital assets for reporting in the
government-wide financial statements have been subtracted from the total governmental fund expenditures. These figures
by fiscal year are as follows: (2002) $27,983,591; (2003) $43,053,133; (2004) $27,501,712; (2005) $72,289,487; (2006)
$37,560,975; (2007) $68,760,714; (2008) $53,216,919 and; (2009) $49,825,792; (2010) $79,262,273; (2011) $30,695,022.
Fiscal Year
238
CITY OF FRESNO, CALIFORNIA
GROSS ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
Fiscal Year
2002 15,733,109,644$ 1,174,245,532$ 16,907,355,176$ 1.197359% 100%
2003 16,351,150,411 1,316,935,915 17,668,086,326 1.210636% 100%
2004 17,620,912,683 1,290,154,954 18,911,067,637 1.233568% 100%
2005 19,578,018,093 1,473,733,287 21,051,751,380 1.243238% 100%
2006 21,871,531,043 1,230,769,455 23,102,300,498 1.177892% 100%
2007 25,129,666,067 1,232,429,282 26,362,095,349 1.219102% 100%
2008 28,342,504,628 1,630,011,237 29,972,515,865 1.208642% 100%
2009 28,935,909,029 1,314,490,825 30,250,399,854 1.138298% 100%
2010 26,857,338,571 1,695,509,992 28,552,848,563 1.231626% 100%
2011 26,427,029,439 1,607,052,037 28,034,081,476 1.231352% 100%
-54995442
1.361E+09
Source:County of Fresno
Notes: Fresno County does not collect Actual Value (Market Value) information
on taxable properties
Fresno County does not collect Actual Value (Market Value) information
on tax exempt properties
The estimated actual value of taxable property is the same as the gross assessed value.
Secured Unsecured
Total Taxable
Assessed Value
Total Direct
Tax Rate
Assessed
Value as a
Percent of
Estimated
Actual ValueEstimated Actual Estimated Actual
$-
$5,000,000,000
$10,000,000,000
$15,000,000,000
$20,000,000,000
$25,000,000,000
$30,000,000,000
$35,000,000,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Estimated Value of Taxable Property
Unsecured
Secured
239
CITY OF FRESNO, CALIFORNIA
DIRECT AND OVERLAPPING PROPERTY TAX RATES
LAST TEN FISCAL YEARS
(Percentage per $100 of Assessed Value)
City of Fresno County-Wide
Fiscal
Year
Debt Service
Tax Rate
Fresno
Unified
School
District
State Center
Community
College
Property Tax
Rate
Total
Overlapping
Property Tax
Rate
2002 0.032438 0.164921 0.000000 1.0 1.197359
2003 0.032438 0.178198 0.000000 1.0 1.210636
2004 0.032438 0.185486 0.015644 1.0 1.233568
2005 0.032438 0.196428 0.014372 1.0 1.243238
2006 0.032438 0.139568 0.005886 1.0 1.177892
2007 0.032438 0.181626 0.005038 1.0 1.219102
2008 0.032438 0.160586 0.015618 1.0 1.208642
2009 0.032438 0.105266 0.000594 1.0 1.138298
2010 0.032438 0.010324 0.188864 1.0 1.231626
2011 0.032438 0.188864 0.010050 1.0 1.231352
Source: County of Fresno
Notes: On June 6, 1978, California voters approved a constitutional amendment to Article XIIIA
of the California Constitution, commonly known as Proposition 13, which limits the taxing power of
California public agencies. Legislation enacted by the California Legislature to implement Article XIIIA
(Statutes of 1978, Chapter 292, as amended) provides that, notwithstanding any other law, local
agencies may not levy any property tax except to pay debt service on indebtedness approved by voters
prior to July 1, 1978, and that each county will levy the maximum tax permitted by Article XIIIA of $1.00
per $100.00 of full cash value. Assessed value is equal to full cash value, pursuant to Senate Bill 1656,
Statutes of 1978.
FY2005 overlapping tax rate has been corrected. Incorrect figure (1.210636) previously reported for FY2005.
Schools
CITY OF FRESNO, CALIFORNIA
PRINCIPAL PROPERTY TAX PAYERS1
CURRENT YEAR AND NINE YEARS AGO
240
Taxpayer Type of Business
Taxable
Assessed Value Rank
% of Total
County
Assessed
Value
Taxable
Assessed Value Rank
% of Total
County
Assessed
Value
Pacific Gas & Electric Company Utility 1,673,607,678$ 1 0.0274 - -
Chevron USA, Inc.Petroleum 589,250,329 2 0.0096 - -
So. California Edison Co.Utility 389,489,054 3 0.0064 - -
Panoche Energy Center, LLC Utility 328,000,000 4 0.0054 - -
AERA Energy, LLC3 Petroleum 201,213,101 5 0.0033 - -
AT&T California (Pacific Bell)Telecommunications 169,327,699 6 0.0028 - -
The Gap Inc Warehousing 116,677,841 7 0.0019 97,409,550 1 0.0027
Macerich Fresno Limited Partner Real Estate 129,168,510 8 0.0021 90,715,638 2 0.0025
Gallo E & J Winery Winery 109,693,295 9 0.0018 67,322,914 4 0.0019
Atlantic Path 152 Electric Transmission 89,980,839 10 0.0015 - -
Harris Farms Inc. Farm Products - - -- -
GST Telecom Telecommunications - - -- -
Riverpark Properties II Shopping Center - --67,892,470 3 0.0019
Riverview Estates Real Estate - --59,091,760 5 0.0016
McClatchy Newspaper Newspaper - --52,338,187 6 0.0014
George Andrews Real Estate - --51,006,623 7 0.0014
Foster Poultry Farms Food Processing - --36,312,324 8 0.0010
Capri Sun, Inc Food Processing - --36,255,149 9 0.0010
Stephen Investments, Inc.Shopping Center - --36,176,595 10 0.0010
Total 3,796,408,346$ 0.0621 594,521,210$ 0.0164
Source: County of Fresno
Notes: 1 Information provided for the County of Fresno. A breakdown of property taxpayers for the City of Fresno is not available
2 Formerly Trans-Elect NTD 15, LLC.
3 Consists of California onshore and offshore exploration and production (E&P) assets previously operated by CalResources LLC.
4 Taxpayer Information as of 10/28/2010.
2011 4 2002
241
CITY OF FRESNO, CALIFORNIA
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
2002 35,800,012$ 5,666,330$ 41,466,342$ 40,714,792$ 98.19% 1,141,457$ 41,856,249$ 100.94%
2003 37,027,281 5,666,366 42,693,647 41,140,273 96.36% 784,581 41,924,854 98.20%
2004 39,297,358 6,019,454 45,316,812 43,981,854 97.05% 2,012,461 45,994,315 101.50%
2005 38,372,942 6,768,814 45,141,756 44,752,794 99.14% 1,769,044 46,521,838 103.06%
2006 42,611,672 12,806,292 55,417,964 54,159,317 97.73% 1,786,932 55,946,249 100.95%
2007 84,872,378 13,626,269 98,498,647 96,163,757 97.63% 2,213,392 98,377,149 99.88%
2008 95,970,818 13,845,541 109,816,359 106,410,341 96.90% 1,809,904 108,220,245 98.55%
2009 96,222,918 12,489,738 108,712,656 106,562,128 98.02% 10,721,793 117,613,827 108.19%
2010 3 90,717,173 8,915,811 99,632,984 95,393,395 95.74% 3,846,403 99,239,798 99.61%
2011 88,944,564 10,281,793 99,226,357 97,816,966 98.58% 3,320,387 101,137,353 101.93%
Average Collections 101.28%
Source: County of Fresno
Notes:
1 Supplemental Assessments include voter approved indebtedness for Fire and Police Pensions and
supplemental assessments added whenever new construction is completed and whenever real property changes ownership
under Chapter 3.5 of Part 0.5 of Division 1 of the California Revenue and Taxation Code,
2 Delinquent tax collections include penalties and interest because Fresno County is unable to provide the delinquent portion of the
total amount.
3 Original Levy for FY10 corrected by Fresno County.
Total Tax
Collections
Percent of
Collection of
Adjusted
Tax Levy
Current Tax Collections
Fiscal
Year
Amount
Collected
Percentage
of Net Tax
Levy
Delinquent Tax
Collections 2
Total Adjusted
Tax Levy
Total Net Tax
Levy
(Original Levy)
Supplemental
Assessments 1
242
CITY OF FRESNO, CALIFORNIA
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
(dollars in thousands, except per capita)
Revenue and
Other Bonds
Tax Allocation
Bonds
Certificates of
Participation
Special
Assessment
Bonds
Notes
Payable
Capital
Leases
Airport
Revenue
Bonds
Solid Waste
Revenue
Bonds
2002 259,515$ 14,690$ 7,020$ -$ 5,853$ 6,934$ 43,045$ 16,820$
2003 253,885 14,280 6,500 - 6,765 8,463 42,445 15,855
2004 300,865 14,195 5,945 - 6,174 8,962 41,815 14,845
2005 335,315 13,635 5,355 - 12,770 11,134 41,155 13,790
2006 326,005 13,055 4,725 - 12,387 12,108 40,460 12,685
2007 310,795 12,360 4,055 - 11,410 12,429 61,735 11,530
2008 339,055 11,637 3,350 - 10,858 17,365 60,970 10,315
2009 374,340 10,882 2,590 - 10,876 14,128 60,165 9,050
2010 381,775 10,100 - - 10,264 10,981 59,320 7,720
2011 370,610 9,285 - - 9,492 10,671 58,430 7,500
Source: Debt Information - City of Fresno, Finance Department
Population Information - State of California Department of Finance, Demographic Research Unit
Notes: See the Schedule of Demographic and Economic Statistics on page 239 for personal and population data.
The City current-refunded the 1994 COP's (Arena Financing Project)
by issuing the 2005 Lease Revenue Bonds (No Neighborhood Left Behind Project).
Because of this refunding, the balance moved from the COP column to the Revenue
and Other Bonds column.
The City is not obligated in any manner for the Special Assessment debt, but is acting
as an agent for property owners in collecting the assessments and forwarding the collections
to the trustee or paying agent, and initiating foreclosure proceedings, if appropriate.
As of FY2008, General Services and Risk Fund Capital Leases previously reported under Business-Type Activities
are now reported under Governmental Activities.
Governmental Activities Business Type Activities
243
Sewer
Revenue
Bonds
Lease
Revenue
Bonds
Certificates
of
Participation
Notes
Payable
Capital
Leases
Water
Revenue
Bonds
Total Primary
Government
Notes
Payable
Percentage
of Personal
Income
Net Debt
per Capita
251,355$ 77,980$ 17,180$ 2,688$ 7,809$ 49,795$ 760,684$ - 3.86% 1,721
239,170 77,480 15,070 2,704 5,267 48,445 736,329 - 3.57% 1,642
232,775 76,245 13,425 2,438 2,445 46,990 767,119 - 3.47% 1,682
226,100 78,775 6,790 2,163 3,444 45,465 795,891 - 3.49% 1,713
219,110 95,725 6,080 1,922 5,062 43,890 793,214 - 3.31% 1,682
211,770 92,612 5,335 1,716 5,473 42,265 783,485 - 3.11% 1,629
204,050 92,356 4,550 1,503 - 40,590 796,599 - 2.85% 1,639
251,710 102,019 3,725 2,034 - 38,850 880,369 - 3.14% 1,775
243,155 97,667 - 5,923 - 168,515 995,420 16,660 Not Available 2,015
234,090 93,151 - 5,624 - 164,375 963,229 16,660 Not Available 1,959
Component
UnitBusiness Type Activities
244
CITY OF FRESNO, CALIFORNIA
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS
Fiscal
Year
General Bonded
Debt
Redevelopment
Bonds Total
Percent of Actual
Taxable Value of
Property Population
Net Debt per
Capita
2002 211,615,000$ 14,690,000$ 226,305,000$ 1.339%441,900 512$
2003 207,895,000 14,280,000 222,175,000 1.257%448,500 495
2004 204,095,000 14,195,000 218,290,000 1.154%456,100 479
2005 200,150,000 13,635,000 213,785,000 1.016%464,727 460
2006 196,020,000 13,055,000 209,075,000 0.905%471,479 443
2007 191,690,000 12,360,000 204,050,000 0.774%481,035 424
2008 187,140,000 11,637,000 198,777,000 0.663%486,171 409
2009 182,345,000 10,882,000 193,227,000 0.639%495,913 390
2010 177,285,000 10,100,000 187,385,000 0.656%502,303 373
2011 171,935,000 9,285,000 181,220,000 0.646%500,121 362
Source: General Bonded Debt Information - City of Fresno Department of Finance
Population Information - State of California Department of Finance, Demographic Research Unit
General Bonded Debt Outstanding
245
CITY OF FRESNO, CALIFORNIA
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT¹
AS OF JUNE 17, 2011
Debt
Applicable
Percent June 17,
Applicable 2011
Overlapping Tax, Assessment and General Fund Debt
City of Fresno Community Facilities District No. 4 100.000 %1,570,000$
City of Fresno Community Facilities District No. 5 100.000 1,215,000
City of Fresno Community Facilities District No. 7 100.000 1,805,000
State Center Community College District 44.221 48,957,069
Clovis Unified School District 51.908 116,761,540
Clovis Unified School District Certificates of Participation 51.908 21,526,248
Fresno Unified School District 82.391 217,777,640
Fresno Unified School District Lease Tax Obligations 82.391 8,671,653
Fresno Unified School District Certificates of Participation 82.391 25,224,005
Central Unified School District 79.370 77,303,847
Central Unified School District Certificates of Participation 79.370 24,057,047
Other School Districts Various 20,407,490
Fresno County Pension Obligations 48.236 231,032,472
Fresno County General Fund Obligations 48.236 39,727,170
Sub-total overlapping debt 836,036,181
Direct General Fund Debt
City of Fresno General Fund Obligations 2 100.000 %291,826,242
City of Fresno Judgement Obligations 100.000 3,230,000
City of Fresno Pension Obligations 100.000 168,705,000
Sub-total Direct Debt 463,761,242
Total Direct and Overlapping Debt 3 1,299,797,423$
Source: California Municipal Statistics, Inc.
Notes: ¹Does not include City Revenue Bonds or Parking District Bonds, which are self-supporting.
2Exludes Issue to be sold.
3Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and
non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at
maturity.
CITY OF FRESNO, CALIFORNIA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
246
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 36,702,306$ 32,610,936$ $ 4,091,370 1,215,000$ 2,624,252$ 1.07
2003 3 39,702,643 28,385,629 11,317,014 17,505,000 2,171,090 0.58
2004 39,956,895 29,139,172 10,817,723 1,455,000 2,282,790 2.89
2005 41,602,576 28,016,826 13,585,750 1,525,000 2,212,440 3.64
2006 39,254,582 33,254,469 6,000,113 1,575,000 2,163,826 1.60
2007 45,136,898 36,786,028 8,350,870 1,625,000 2,113,540 2.23
2008 56,359,824 39,754,834 16,604,990 1,675,000 2,059,142 4.45
2009 65,596,663 41,728,670 23,867,993 1,740,000 1,996,222 6.39
2010 67,721,958 43,783,270 23,938,688 28,485,000 4,628,353 0.72
2011 67,921,933 46,426,161 21,495,772 4,140,000 9,744,738 1.55
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 52,961,767$ 25,885,698$ $ 27,076,069 14,555,000$ 11,158,753$ 1.05
2003 46,502,457 27,202,509 19,299,948 12,185,000 10,098,473 0.87
2004 48,247,747 22,760,763 25,486,984 6,395,000 10,552,427 1.50
2005 49,359,690 33,397,428 15,962,262 6,675,000 9,700,957 0.97
2006 48,403,620 26,014,652 22,388,968 6,990,000 10,191,531 1.30
2007 50,362,926 39,753,076 10,609,850 7,340,000 10,336,552 0.60
2008 60,798,990 31,909,771 28,889,219 7,720,000 10,433,419 1.59
2009 5 62,521,061 31,646,468 30,874,593 112,185,000 12,079,524 0.25
2010 74,157,960 30,714,505 43,443,455 8,555,000 12,924,557 2.02
2011 76,628,147 31,422,980 45,205,167 9,065,000 12,387,963 2.11
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 30,411,290$ 31,860,175$ $ (1,448,885)920,000$ 924,021$ (0.79)
2003 37,300,555 34,645,773 2,654,782 965,000 883,591 1.44
2004 38,613,025 35,756,411 2,856,614 1,010,000 839,201 1.54
2005 39,302,948 29,060,871 10,242,077 1,055,000 792,741 5.54
2006 38,820,396 34,661,314 4,159,082 1,105,000 743,156 2.25
2007 43,250,635 42,230,822 1,019,813 1,155,000 691,221 0.55
2008 47,719,291 42,697,351 5,021,940 1,215,000 636,359 2.71
2009 49,848,807 41,805,444 8,043,363 1,265,000 577,431 4.37
2010 51,363,783 40,957,109 10,406,674 1,330,000 514,181 5.64
2011 51,753,225 42,597,788 9,155,437 220,000 447,681 13.71
Notes:1 The pledged-revenue coverage calculations presented in this schedule conform to the requirements
of GASB Statement No. 44 and as such differs significantly from the methodology required for
calculations as laid out in the following: Airport’s Series 2000; Airport Series 2007; Sewer 2008;
Water 2003; and Water 2010 bond indentures.
2 Operating Expenses do not include interest, amortization or depreciation expenses.
3 In FY03 Water System Revenue Refunding Bond 1993 A Principal Balance of $16,535,000 and
Interest of $433,519 Paid off.
4 Parks bonds issued 4/1/2008. There were no Principal or Interest payments prior to FY 2009.
5 In FY09 Sewer System Subordinate Lien Variable Rate Revenue Refunding Bonds 2000A Principal
balance of $74,000,000 and Interest of $363,762.57 Paid off.
Water Revenue Bonds
Debt Service
Sewer Revenue Bonds
Debt Service
Solid Waste Revenue Bonds
Debt Service
CITY OF FRESNO, CALIFORNIA
PLEDGED REVENUE COVERAGE
LAST TEN FISCAL YEARS
247
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 9,826,593$ 8,476,173$ $ 1,350,420 -$ 2,412,035$ 0.56
2003 12,821,895 9,745,773 3,076,122 600,000 2,397,035 1.03
2004 13,121,880 11,456,209 1,665,671 630,000 2,366,285 0.56
2005 16,066,393 15,361,031 705,362 660,000 2,334,035 0.24
2006 14,668,777 13,568,542 1,100,235 695,000 2,300,160 0.37
2007 15,162,563 13,738,411 1,424,152 725,000 2,262,848 0.48
2008 16,136,789 15,672,366 464,423 765,000 2,926,013 0.13
2009 19,768,368 16,380,360 3,388,008 805,000 3,467,795 0.79
2010 19,367,292 16,462,316 2,904,976 845,000 3,426,545 0.68
2011 21,700,560 17,868,054 3,832,506 890,000 3,383,170 0.90
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 7,645,417$ 7,163,353$ $ 482,064 408,000$ 1,158,518$ 0.31
2003 4,441,723 7,231,332 (2,789,609)500,000 1,140,508 (1.70)
2004 3,497,094 5,474,905 (1,977,811)515,000 1,121,473 (1.21)
2005 2,917,281 5,700,187 (2,782,906)515,000 1,121,473 (1.70)
2006 3,267,366 5,371,391 (2,104,025)990,000 1,308,394 (0.92)
2007 3,042,812 5,731,581 (2,688,769)2,292,608 1,996,759 (0.63)
2008 3,352,662 6,463,610 (3,110,948)4,620,990 2,163,404 (0.46)
2009 3,130,426 5,073,021 (1,942,595)10,302,095 2,019,101 (0.16)
2010 3,037,604 5,312,425 (2,274,821)3,356,400 3,037,480 (0.36)
2011 2,929,106 4,506,211 (1,577,105)3,466,200 2,930,086 (0.25)
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue Principal Interest Coverage
2002 250,000$ 32,084$ $ 217,916 -$ 2,642,185$ 0.08
2003 1,571,101 60,683 1,510,418 - 2,725,463 0.55
2004 1,504,707 85,054 1,419,653 720,000 2,725,763 0.41
2005 1,500,000 7,389 1,492,611 755,000 2,694,203 0.43
2006 1,500,000 5,899 1,494,101 785,000 2,660,674 0.43
2007 1,500,000 4,482 1,495,518 820,000 2,624,302 0.43
2008 1,508,013 4,481 1,503,532 860,000 2,585,848 0.44
2009 1,500,000 301,893 1,198,107 905,000 2,543,386 0.35
2010 1,675,220 1,114 1,674,106 950,000 2,496,923 0.49
2011 340,281 13,379 326,902 1,005,000 2,441,061 0.09
Principal Interest Coverage
2009 4 489,826$ 1,855,534$ $ (1,365,708)40,000$ 90,663$ (10.45)
2010 634,706 1,280,465 (645,759) 45,000 111,409 (4.13)
2011 742,319 351,889 390,430 45,000 109,510 2.53
Debt Service
Fiscal Year
Charges for
Services
Less:
Operating Expenses2
Net Available
Revenue
Parks Bonds
Debt Service
Airport Revenue Bonds1
Debt Service
Fresno Convention Center Revenue Bonds
Debt Service
Stadium Bonds
248
CITY OF FRESNO, CALIFORNIA
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Dollars in Thousands)
Legal Debt Limit Calculation for FY 2011
Assessed Value 28,034,081$
Debt Limit (20% of assessed value, pursuant to City Charter)5,606,816
Debt applicable to the limit:
General obligation bonds 1 -
Less amount set aside for repayment of GO debt -
Total net debt applicable to limit -
Legal debt margin 5,606,816$
Fiscal Year Debt Limit
Total net debt
applicable to limit
Legal Debt
Margin
Total net debt
applicable to the
limit as a
percentage of
debt limit
2002 3,381,471$ 211,615$ 3,169,856$ 6.26%
2003 3,533,617 207,895 3,325,722 5.88%
2004 3,782,213 204,095 3,578,118 5.40%
2005 4,210,350 200,150 4,010,200 4.75%
2006 4,620,460 196,020 4,424,440 4.24%
2007 5,272,419 191,690 5,080,729 3.64%
2008 5,994,503 187,140 5,807,363 3.22%
2009 6,050,080 - 6,050,080 0.00%
2010 5,710,570 - 5,710,570 0.00%
2011 5,606,816 - 5,606,816 0.00%
Source: Assessed Valuation Information - County of Fresno, Tax Rate Book
Notes:1 The City's Judgment and Pension obligation bonds were the result of legal judgments
that were financed to be paid out over a period of time. Per Article XVI, Section 18 of the
California Constitution "obligations imposed by law" are deemed exceptions to the debt limit.
249
CITY OF FRESNO, CALIFORNIA
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Population Personal Income
1
Per Capita
Personal
Income1
Unemployment
Rate
Area Square
Miles
2002 441,900 $ 19,690,862,000 $ 23,672 11.600% 105.08
2003 448,500 20,636,618,000 24,267 11.800% 106.04
2004 456,100 22,136,282,000 25,573 10.500% 106.77
2005 464,727 22,796,108,000 25,961 9.000% 107.35
2006 3 471,479 23,980,463,000 27,081 8.000% 110.10
2007 481,035 25,214,459,000 28,181 8.600% 110.72
2008 486,171 27,994,357,000 30,997 10.600% 111.10
2009 2 495,913 28,049,514,000 30,646 15.100% 111.78
2010 502,303 Not Available Not Available 15.800% 112.35
2011 500,121 Not Available Not Available Not Available 112.29
Source: Population Information - State of California Department of Finance, Demographic Research Unit
Unemployment information - California Employment Development Department, Labor
Market Information
Per Capita Income and Personal Income - Bureau of Economic Analysis (BEA).
Notes:
1 Information pertains to Fresno, CA, Metropolitan Statistical Area (MSA).
2 Personal income and Per Capita Income for 2009 are adjusted per BEA (Figures previously reported were preliminary).
3 2006 Area square miles are estimated.
Calendar
Year
250
CITY OF FRESNO, CALIFORNIA
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
Employer Employees Rank
Percent of Total
City Employment Employees Rank
Percent of Total
City Employment
Community Medical Centers 6,000 1 3.10%4,818 3 2.54%
City of Fresno2 3,790 2 1.96%4,000 4 2.11%
Saint Agnes Medical Center 2,800 3 1.45%1,940 6 1.02%
Kaiser Permanente Medical Center 2,160 4 1.12%1,750 7 0.92%
Foster Farms 1,100 5 0.57%---
Zacky Farms, LLC 900 6 0.46%---
AmeriGaurd Security Systems 700 7 0.36%---
Guarantee Real Estate 502 8 0.26%---
Rex Moore Electrical Contractors and Engineers 500 9 0.26%---
Lyons Magnus 400 10 0.21%
Fresno Unified School District3 ---7,931 1 4.19%
County of Fresno3 ---6,975 2 3.68%
Fresno Internal Revenue Service3 ---3,200 5 1.69%
California State University, Fresno3 ---1,304 8 0.69%
Beverly Health Care3 ---1,220 9 0.64%
Central Unified School District3 ---1,260 10 0.67%
Total 18,852 9.73%34,398 18.16%
Fresno City Employment4 193,700 189,400
Source: Employer Information - The Business Journal - Book of Lists
Employment Development Department - Labor Market Information, State of California
Notes: 1Current year employer information available from 2011 Book of Lists and represents the number of 2010 full time employees.
2 The City of Fresno number of employees derived from City of Fresno Budget Management & Studies Division - Adopted
Budgets, Authorized Positions as of June 2010.
4 FY2011 Fresno City Employment as of May 20, 2011.
2011 1 2002
3 2010 figures not available for these private and public sector employers in 2011 Book of Lists.
CITY OF FRESNO, CALIFORNIA
FULL TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY PROGRAM1
LAST TEN FISCAL YEARS
251
2002 2 2003 3 2004 3 2005 3 2006 3 2007 3 2008 3 2009 3 2010 3 2011
General Government
Management 76.00 81.00 81.00 79.00 86.00 100.00 102.00 104.00 103.00 88.80
Finance 125.65 126.65 126.65 128.65 129.65 130.65 130.65 130.65 130.65 101.00
General Services 138.00 139.00 138.00 141.00 129.00 136.00 137.00 139.00 139.00 104.00
Other 107.75 108.00 108.80 109.60 120.60 128.00 128.00 129.00 129.00 103.80
Enterprise Functions
Convention Center4 42.00 41.00 36.00 - - - - - - -
Transportation
Airports
Sworn11 17.00 17.00 20.00 22.00 5.00 5.00 5.00 5.00 5.00 5.00
Civilian 71.00 70.00 70.00 70.00 72.00 74.50 75.20 78.00 78.00 78.50
FAX Department12 333.55 331.80 331.80 330.80 357.80 386.80 420.80 420.80 420.80 342.00
Public Utilities9 535.00 540.00 595.00 623.00 648.00 650.00 664.00 669.00 683.00 691.00
Economic Growth and Expansion
Downtown & Community Revitalization Department15 - - - - - - - 10.00 10.00 20.00
Planning and Development8 92.00 92.00 187.50 204.03 210.03 198.03 203.03 203.03 194.39
Economic Development15 - - 6.00 6.00 6.00 9.00 10.00 - - -
142.20 138.40 - - - - - - - -
Public Works7 240.20 243.20 242.20 325.20 327.60 334.60 337.40 338.40 339.40 264.40
Culture and Recreation
208.97 207.97 207.97 184.17 184.16 171.95 170.95 169.95 148.25 85.50
Public Protection
Police
Sworn6 702.00 719.00 778.00 804.00 835.00 835.00 843.00 849.00 849.00 774.00
Civilian14 355.00 393.20 388.20 402.20 406.80 444.80 461.80 470.40 431.40 198.00
Fire
Sworn 10,13 261.00 273.00 273.00 304.00 305.00 337.00 383.00 383.00 383.00 340.35
Civilian 23.75 23.00 20.00 22.00 58.75 67.00 70.00 59.00 58.00 392.95
Total 3,471.07 3,544.22 3,610.12 3,755.65 3,881.39 4,008.33 4,141.83 4,158.23 4,101.89 3,589.30
Source:City of Fresno Budget Management & Studies Division - Adopted Budgets, Authorized Positions. Information prior to 2002 not comparable.
Notes: 1 Figures for FTE's include Permanent, Permanent Part-Time and Permanent Intermittent employees only.
2 FY2002 includes mid-year reorganization of the Department of Administrative Services (Other).
3 Total permanent postions for each fiscal year are represented as of the following dates: FY2003 as of July 2002; FY2004 as of July, 2003;
FY2005 as of June 30, 2005; FY2006 as of April, 2006; FY2007 as of April, 2006; FY2008 as of May, 2008; FY2009 as of May 2009; FY2010 as of June 2010;
FY2011 as of May 2011.
4The City contracted with SMG in January 2004 for operations and marketing of the Fresno Convention Center. Convention Center
positions were authorized until December 31, 2004, but are shown for a full year.
5 In FY2004 the Housing, Economic and Community Development Department was reorganized. Divisions were moved to
Planning and Development; and Public Utilities; and the Economic Development Department was created.
6 FY2006 Upswing in sworn positions due to UHP grant and increase in officers added to the Motorcycle Unit, Neighborhood Traffic Unit.
7 Beginning in FY2005, Public Works staff increased to directly support the "No Neighborhood Left Behind" program. In addition, positions
responsible for street landscaping maintenance were moved from Parks, Recreation & Community Service to Public Works.
8 In FY2005 Planning and Development added positions to improve project time lines and inspection efficiencies.
9 In FY2005 and FY2006 positions were added primarily to the Solid Waste and Wastewater Maintenance Divisions due to a surge
in residential customer growth, ordinance enforcement and commercial recycling efforts.
10 In FY2005 additional sworn positions were added in the Fire Suppression & Emergency Response Division to staff a new Fire Station.
Inspector positions were added to the Fire Prevention & Investigation Division to perform inspections on existing buildings and new construction.
11 In FY2006 Airport Public Safety positions were transferred to the Police and Fire Departments.
12 In FY2007 Positions added to support 15-minute frequencies on two (2) routes based on Congestion Mitigation Air Quality (CMAQ) grant.
13 In FY2007 Due to additional funding (a portion of which was provided by Staffing for Adequate Fire and Emergency Response
(SAFER) grant) a 4th firefighter was added to several existing fire companies.
14 In FY2007 additional Police Cadets added and the Stamp Out graffiti program from Planning and Development to the police department.
15 In FY2009 the Economic Development Department was restructured and renamed the Downtown & Community Revitalization Department to
reflect focus on strengthening the local economy through downtown revitalization, improving neighborhoods and supporting loc ally owned businesses.
Housing, Economic and Community Development5
Parks, Recreation and Community Services
Fiscal Year
CITY OF FRESNO, CALIFORNIAOPERATING INDICATORS BY FUNCTION / PROGRAMLAST TEN FISCAL YEARS2002200320042005200620072008200920102011General GovernmentBuilding Permits Issued2Commercial1,358 1,524 1,530 1,498 1,891 1,647 1,546 1,1861,174 1,133Residential4,815 6,201 7,024 7,526 7,987 6,669 5,514 3,4943,557 3,276PolicePhysical Arrests440,274 45,128 47,989 52,360 54,250 50,241 44,953 47,246 43,674 35,726Traffic Violations (citations issued)3,12Not Avail 26,348 63,546 85,937 94,993 90,569 85,388 95,354 Not Avail 58,132Calls Received for Police Service9373,214 405,302 413,064 416,390 430,528 606,695 777,600 775,629 771,742 864,005FireEmergency Medical Service Calls19,607 19,050 19,723 20,577 22,614 19,235 21,398 22,143 22,758 19,671Fire Incidents148,906 10,557 10,286 9,329 10,107 10,976 11,266 12,063 12,220 12,109Fire Inspections1,10Not Avail Not Avail Not Avail Not Avail 13,497 19,410 19,401 11,210 14,962 12,151Fire Hydrant Inspections10,955 10,570 11,399 10,564 13,388 22,159 25,422 25,594 36,233 28,109Wastewater TreatmentAverage Daily Sewage Treatment (million gallons per day)69.73 70.31 70.72 70.43 72.00 71.00 69.70 69.70 65.20 66.08Wastewater Treatment Capacity (million gallons per day) 80 80 80 80 80 8080 80 80 80Solid WasteRefuse Collected (tons per day)1,080 1,106 1,098 1,113 1,124 1,085 1,015 961 965 979Recyclables Collected (tons per day)142 155 171 189 201 221 453 238 216 214Green Waste Collected (tons per day)273 304 320 339 334 326 193 398 327 325Other Public WorksStreet Resurfacing (miles)817 22 12 12 12 12 161 102 27 27Parking Violations (citations issued)3Not Avail Not Avail 18,741 51,231 66,796 62,313 67,689 68,736 59,790 56,270Parks and RecreationAthletic Field Permits Issued1,11Not Avail Not Avail Not Avail Not Avail99 153 147 1,614 1,639 2,662Memorial Auditorium User Groups77 70 49 40 41 3640 28 30 34Memorial Auditorium, Audience73,400 54,000 32,700 46,300 34,135 34,487 33,365 22,490 31,395 33,136WaterNumber On-Service Accounts114,209 118,258 120,399 122,732 124,517 127,646 128,812 130,844132,184 131,880Main/Service Leaks Repaired1Not Avail Not Avail Not Avail Not Avail251 440 513610569 644Avg. Daily Per Capita Consumption (gallons)332 329 335 286 297 299 296298275 260Peak Daily Consumption (MGD - Million Gallons per Day)1,13 Not Avail Not Avail Not Avail Not Avail 249 253244 244 238 220Fiscal Year252
CITY OF FRESNO, CALIFORNIAOPERATING INDICATORS BY FUNCTION / PROGRAMLAST TEN FISCAL YEARS2002200320042005200620072008200920102011Fiscal YearTransportationAirportsNumber of Commercial Airlines7 7 7 7 10 10988 9Number of Cargo Carriers66 6 6 6 5 4444 3Total Number Tenant Aircraft6455 450 439 433 367 377 354354378 401Annual Fuel Consumption (gallons)611,947,481 11,300,663 12,001,624 11,818,177 11,775,106 10,938,066 11,182,606 10,152,8209,905,916 5,787,043Origin and Destination PassengersDomestic940,717 1,028,355 1,086,302 1,155,357 1,225,262 1,236,486 1,272,308 1,116,4101,133,605 1,163,568International- - - - 12,067 45,942 57,645 63,34463,473 45,465Origin and Destination Mail (lbs.)136,799 65,183 49,232 37,875 14,033 9,709 386451,397 91Origin and Destination Freight (lbs.)623,844,443 30,104,179 29,349,121 33,335,314 33,040,899 24,116,940 21,188,608 17,188,69517,204,154 20,630,316Fresno Area Express (FAX)5Actual Route Miles4,038,917 4,032,376 3,957,332 4,039,871 4,229,020 4,335,012 4,661,278 4,690,193 4,610,108 4,563,016Passengers11,905,195 11,213,019 10,854,998 11,241,649 11,808,729 12,080,346 16,925,826 18,049,827 17,554,565 17,589,425Mini-Buses - Purchased Transportation25 25 34 39 38 4757 48 45 46Source: City of Fresno - Various DepartmentsNotes: 1 Information not available for all years for all categories.2 Building Permits Issued includes individual units and structures as appropriate -- a composite of new construction, additions, alterations, repairs and relocations. 3 Parking Violations for FY2004 representative of those citations that remain outstanding. Citations that were paid or dismissed are not included in this number. 4 Police department figures are based on calendar year and are as of Jan 1 of reported year. 5 Fresno Area Express Figures for FY2006 and FY2007 are unaudited figures. 6 Information combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH). 7 International Service to Mexico started in FY2006. 8 Street resurfacing miles for FY2002 through FY2007 are departmental estimates. In FY2008, the figures are actual miles based on new asset management system.9 The California Highway Patrol (CHP) discontinued handling of "911" calls. Those calls are currently routed to the nearest city. 10 Fire inspections figure now reflects only those performed in the City of Fresno and excludes service calls for neighboring fire districts. 11 Parks and Recreation implemented a new software system that allows for more accurate usage totals. 12 Statistics not gathered in FY09 due to adminstrative staff reductions due to budget reductions in Police Department. In FY11 reduction in citations attributed to 18% decrease in number of motor officers issuing citations due to unfilled attrition vacancies due to department-wide budget reductions. 13 Figures previously reported, corresponded to Thousands of Gallons per Minute. At the request of the department, figures and measurement changed to Million Gallons per Day. 14 FY10 figure for fire incidents corrected per Fire department request. 253
CITY OF FRESNO, CALIFORNIACAPITAL ASSET STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS12002200320042005200620072008200920102011Police DepartmentStations1 5 5 5 5 5 5 5 5 5Patrol Bureaus6 7 7 7 7 7 7 7 7 7Vehicular Patrol units225 229 229 237 237 250 250 252 277 250Helicopters3 3 3 2 2 2 2 2 2 2Fixed Wing Aircraft---1 1 1 1 1 1 1Fire Department Fire Stations16 16 16 16 19 20 20 20 20 20Engine Companies16 16 16 16 19 20 20 20 16 16Truck Companies5 5 5 5 5 6 6 6 4 4Public WorksStreets (miles)61,583 1,626 1,654 1,800 1,678 1,778 1,700 1,700 1,666 1,692Street Lights735,902 37,298 38,694 40,485 45,000 46,600 78,020 39,000 40,000 41,100Traffic Signals1Not Avail Not Avail Not Avail Not Avail Not Avail Not Avail 430 441 437 442Solid Waste DivisionCollection Trucks108 108 112 119 115 121 127 129 129 126Water DivisionWater Mains (miles)1,700 1,700 1,626 1,638 1,687 1,737 1,758 1,765 1,775 1,779Wells246 248 247 247 250 257 273 280 272 269Fire HydrantsNot Avail Not Avail Not Avail Not Avail 11,820 12,232 12,426 12,769 12,878 12,914Sewer Maintenance DivisionSewer Mainlines (miles)81,343 1,359 1,386 1,411 1,437 1,472 1,486 1,494 1,497 1,503Manholes19,835 20,207 20,706 21,152 21,566 21,062 22,703 22,867 22,977 23,123Lift Stations15 15 15 15 15 15 14 14 15 15ParksMetropolitan Parks (Regional)2 3 3 3 3 3 3 3 3 3Neighborhood Parks41 32 32 27 27 29 29 29 31 31Pocket ParksNot Avail Not Avail 21 17 17 18 21 21 21 21Zoo1 1 1 1 1 1 1 1 1 1Golf Courses3 3 3 3 3 2 2 2 2 2Community Parks0 0 0 0 0 0 1 1 1 1Skate Parks1 1 1 2 2 5 5 5 5 6Tennis Courts51 46 46 43 42 40 40 40 40 40Acres of ParksNot Avail Not Avail Not Avail Not Avail 1,520 1,523 1,523 1,523 1,535 1,535
254Fiscal Year
CITY OF FRESNO, CALIFORNIACAPITAL ASSET STATISTICS BY FUNCTIONLAST TEN FISCAL YEARS12002200320042005200620072008200920102011Fiscal YearParks cont.Neighborhood Centers5 5 5 11 11 11 12 12 12 12Community Center6 6 6 5 5 5 5 5 5 5Swimming Pools 10 11 11 9 9 9 15 15 10 5TransportationAirports32 2 2 2 2 2 2 2 2 2Municipal Airport Total Acreage3,42,350 2,350 1,894 1,894 1,899 1,899 1,899 1,899 1,900 1,900Length of Longest Runway (surfaced) - Linear FT. 312,424 12,424 12,848 12,853 12,853 12,853 12,853 12,853 12,853 12,853Number of Runways3,94 4 4 4 4 3 3 3 3 3Number of Terminals32 2 2 2 2 2 2 2 2 2Terminals (square footage)3125,195 170,132 170,132 170,132 180,980 180,980 180,980 184,936 193,364 193,364Number of Parking Spaces (surface lot) 1,442 2,247 2,247 2,247 2,247 2,769 2,769 2,396 2,425 2,425Air Cargo Ramp Spaces20 0 0 9 9 9 9 9 9 9Air Cargo Ramp (surface square footage)20 0 0 806,390 806,390 806,390 806,390 806,390 806,390 806,390Number of Hangars3,5296 400 255 284 301 300 298 302 304 302Buses - Directly Operated103 103 118 118 114 126 120 125 125 122Source: City of Fresno - Various DepartmentsNotes: 1 Information not available for all years for all categories. 2 Air Cargo Ramp completed in FY20053 Information combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH). 4 In FY2004 parcels of land were sold to Caltrans for easements and wetland mitigation efforts (Airports).5 In FY2004 Taxiway construction work at both airports necessitated the elimination of some hangars. 6 Street miles in FY2005, FY2006 and FY2007 are estimated. Figure in FY2005 deemed to be an overestimation. In FY2008, new asset management system utilized to calculate actual miles. In FY2008, figure equates to 5,412 lane miles. 7 Number of Street Lights in FY2006, FY2007,FY2008, FY2010 and FY2011 are estimated. In FY2008, figure originally deemed as actual was not. FY09 Supported by field survey per Department. 8 Figures for 2002-2006 restated due to decimal point placement correction. 9 One runway at Chandler Executive Airport (FCH) closed in FY2007.255
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CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30,2011
Table of Contents
Page
Transmittal Letter 1
Required Communications 3
Current Year Recommendations:
Control Deficiencies:
2011-1 Fund Balance Reserves 6
2011-2 Utility Billing Receipts 7
2011-3 Capital Assets 8
2011-4 Information Technology: UserAccount Management...8
2011-5 Information Technology: Security of Server Room 9
Status of Prior Year Recommendations:
Significant Deficiencies:
2010-1 Proper Recognition of Revenue in Proprietary Funds 10
2010-2 Proper Recognition of Revenue in Governmental Funds 10
Control Deficiencies:
2010-4 Utility Billing Receipts 11
2010-5 Deposits From Others 11
2010-6 Capital Assets 12
2010-7 Information Technology 12
certified PabUc AccoIllltaDts.
Sacramento·Walnut Creek·Oakland·Los Angeles/Century City.Newport Beach.San Diego
To the Honorable Mayor and
Members of the City Council
City of Fresno
Fresno, California
mlocpa.com
In planning and performing our audit of the financial statements of the governmental activities, the
business type activities, the discretely presented component unit, each major fund, and the aggregate
remaining fund information of the City of Fresno, California (City) as of and for the year ended June 30,
2011, in accordance with auditing standards generally accepted in the United States of America, we
considered the City's internal control over financial reporting (internal control) as a basis for designing our
auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the
purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do
not express an opinion on the effectiveness of the City's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described in first preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses.
Given these limitations during our audit, we did not identify any deficiencies in internal control that we
consider to be material weaknesses. However we noted other matters involving internal control and its
operation that are identified as items 2011-1 through 2011-5 in the Current Year Recommendations
section of this report.
The City's written responses to the current year recommendations identified in our audit have not been
subjected to the audit procedures applied in the audit of the financial statements and, accordingly, we
express no opinion on them.
Professional auditing standards require that we provide you with information about our responsibilities
under generally accepted auditing standards and Government Auditing Standards, as well as certain
information related to the planned scope and timing of our audit. We have communicated such
information in our engagement letter dated July 21, 2011. Professional standards also require that we
communicate to you other information related to our audit as discussed on pages 2 through 4.
We have also included in this letter a status of the prior year recommendations. We would like to thank
City management and staff for the courtesy and cooperation extended to us during the course of our
engagement.
The accompanying communications and recommendations are intended solely for the information and
use of management, the honorable City Mayor and Members of the City Council, and others within the
organization, and are not intended to be and should not be used by anyone other than these specified
parties.
~a.:7'O·~~{../-'
Newport Beach, CA
March 30, 2012
3000 S Street
Suite 300
Sacramento.
CA95816
2121 N.California Blvd.
Suite 750
Walnut Creck
CA94S96
SOS14th Street
Sth Floor
Oakland
CA94612
2029 Century Parkeast
SuiteSOO
Los Angeles
CA90067
4675 Ma.cArthurCt.
Suite 600
Newport Beach
CA92660
225 Broadway
Suite 1750
San Diego
CA92101
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
REQUIRED COMMUNICATIONS
SignificantAudit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in Note 2 to the basic financial statements. Effective
July 1, 2010, the City adopted the provisions of Governmental Accounting Standards Board Statement
No. 54,Fund Balance Reporting and Governmental Fund Type Definitions as described in Note 2.d.i.
We noted no transactions entered into by the City during the year for which there is a lack of authoritative
guidance or consensus. All significant transactions have been recognized in the financial statements in
the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management's knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their significance
to the financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the financial statements were:
• Depreciation estimates for capital assets, including depreciation methods and useful lives
assigned to depreciable assets.
• Allowance for interfund advances from the General Fund and other funds to the Redevelopment
Agency
• Accrual and disclosure of pension benefits and other postemployment benefits
• Accrual and disclosure of risk management liabilities which includes workers compensation and
general liabilities.
• Accrual and disclosure of CVP Water Settlement.
Management's judgments and estimates were based on the following:
• Useful lives for depreciable assets were determined by management based on the nature of the
capital assets.
• Allowance for interfund advances equaled the full amount of the outstanding balance of amounts
owed by the Redevelopment Agency and based on the criteria in Assembly Bill 1X 26.
• Accrual and disclosure of pension benefits and other postemployment benefits are based on the
actuarial studies performed by an independent actuary.
• Risk management liabilities were based on an actuarial reports performed by an independent
actuary.
• Accrual and disclosure of the CVP Water Settlement is based on the initial agreed upon present
value of the "past" amount to be paid and has been capitalized in accordance with Financial
Accounting Standards Board Statement No. 71, Accounting for the Effects of Certain Types of
Regulation.
We evaluated the key factors and assumptions used to develop the estimates described above in
determining that they are reasonable in relation to the financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The most sensitive disclosure affecting the financial statements was the disclosure of
legislation regarding the dissolution of redevelopment agencies in the State of California in Note 8 to the
basic financial statements.
3
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
REQUIRED COMMUNICATIONS (Continued)
Difficulties Encountered in Performing theAudit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management.
The following summarizes uncorrected misstatements of the financial statements. Management has
determined that their effects are immaterial, both individually and in the aggregate, to the financial
statements taken as a whole:
General Fund
General Fund
Opinion Unit Account Description
Capital Outlay
Public Protection
Debit Credit
$1,707,352
$1,707,352
To reclassify capital lease expense from Public Protection to Capital Out/ay for
capital lease entered into during the year ended June 30,2011.
The following material misstatements detected as a result of audit procedures and as a result of criteria in
Assembly Bill 1X 26 related to the termination of redevelopment agencies were corrected by
management:
Opinion Unit Account Description Debit Credit
General Fund Transfers To Other Funds $23,061,627
General Fund Allowance for Bad Debts (RDA)$23,061,627
Grants Special Revenue Fund Transfers To Other Funds 22,219,346
Grants Special Revenue Fund Allowance for Bad Debts (RDA)22,219,346
Nonmajor Governmental Funds Transfers To Other Funds 3,331,710
Nonmajor Governmental Funds Allowance for Bad Debts (RDA)3,331,710
Water System Fund Transfers To Other Funds 97,031
Water System Fund Allowance for Bad Debts (RDA)97,031
Sewer System Fund Transfers To Other Funds 857,857
Sewer System Fund Allowance for Bad Debts (RDA)857,857
Airports Fund Transfers To Other Funds 2,211,310
Airports Fund Allowance for Bad Debts (RDA)2,211,310
Fresno Convention Center Fund Transfers To Other Funds 559,788
Fresno Convention Center Fund Allowance for Bad Debts (RDA)559,788
Nonmajor Enterprise Funds Transfers To Other Funds 274,862
Nonmajor Enterprise Funds Allowance for Bad Debts (RDA)274,862
Redevelopment Agency, Debt Service
Fund Advances from Other Funds 52,613,531
Redevelopment Agency, Debt Service
Fund Transfers from Other Funds 52,613,531
To record an allowance for the outstanding advance owed by the Redevelopment
Agency, Debt Service Fund,based on the criteria in Assembly Bill1X 26.
4
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
REQUIRED COMMUNICATIONS (Continued)
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a financial
accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be
significant to the financial statements or the auditor's report. We are pleased to report that no such
disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letters dated March 30, 2012.
Management Consultations withOther Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application
of an accounting principle to the City's financial statements or a determination of the type of auditor's
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge,
there were no such consultations with other accountants.
OtherAuditFindingsor Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City's auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
Other Information in Documents Containing Audited Financial Statements
With respect to the supplementary information accompanying the financial statements, we made certain
inquiries of management and evaluated the form, content, and methods of preparing the information to
determine the information complies with accounting principles generally accepted in the United States of
America, the method of preparing it has not changed from the prior period, and the information is
appropriate and complete in relation to our audit of the financial statements. We compared and
reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
5
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
CURRENT YEAR RECOMMENDATIONS
2011-1 FUND BALANCE RESERVES
Observation
Effective July 1, 2010, the City adopted the provisions of Governmental Accounting Standards Board
(GASB) Statement No. 54,Fund Balance Reporting and Governmental Fund Type Definitions.The
provisions of this statement revised the classifications of fund balances for governmental funds. During
our audit, we reviewed the City's Unappropriated Reserve Fund policy established under section 1212 of
the City's Municipal Code.
The Municipal Code directs the City Council to establish an Unappropriated Reserve Fund "for the
purpose of meeting unforeseen contingencies and emergencies of the City...which shall remain intact,
except by the affirmative vote of at least five members of the Council, with a statement declaring the
reason for its use." The City Council established the Unappropriated Reserve Fund by adopting
Resolution No. 2004-27, creating the General Fund Emergency Reserve Fund (Reserve Fund) at 5% of
General Fund annual expenditures.
In November 2010, in accordance with Resolution No. 2004-27, the Mayor declared a fiscal emergency
which was unanimously approved by the City Council in Resolution No. 2010-260, thereby reducing the
Reserve Fund balance from $10.6M at July 1, 2010, to $1.4M at June 30, 2011. Based upon the City's
interpretation of the reserve policy, 5% of the 2012 Adopted General Fund Appropriation of $214.8 million
is $10.74. According to the reserve policy, the Reserve Fund was underfunded by $9.34 at June 30,
2011, after considering the existing balance at fiscal year end. The $1.4M balance of the Reserve Fund
at June 30, 2011, was reportedas committed in the financial statements.
Recommendation
We recommend that the City review its current Reserve Fund policy and current financial position and
develop and document a plan to be approved by City Council on how the Reserve Fund will be
replenished to comply with the policy. In addition, the City Council should consider amending section
1212 of the Municipal Code to address how the Reserve Fund should be replenished.
Management's Response
On April 7, 2011, the Fresno City Council adopted the Reserve Management Act in an effort to improve
City of Fresno reserve policies and fiscal practices. The Act incorporates the best practices of many other
cities and includes the new standards for reporting governmental fund balances, known as Government
Accounting Standards Board Statement #54. While City Charter Section 1212 established an
unappropriated reserve fund for the purpose of unforeseen emergencies, it did not set an amount or
percentage. Executive Order 2004-27 did indeed further define the reserve fund policy as an amount
equal to 5% of the next year's General Fund appropriations; the Reserve Management Act greatly
expands and defines the existing General Fund reserve policy and addresses several other new City
reserves. The Act delineates guidelines for reserve replenishment, requires annual fund balance status
reports and a five-year reserve rate review as well as other reports.
As part of the 2013 budget process and the corresponding General Fund 5 year plan, the replenishment
of the Reserve Fund is being reviewed. Given the current budgetary situation, it is not anticipated
however that any replenishment will occur during Fiscal Year 2013. The most immediate funding
objective is to fully address ongoing negative fund balances and to develop plans to eliminate existing
negative balances and find permanent solutions to prevent future development of such. This will be an
ongoing work-in-progress which is predicted at this time, given current economic conditions, to
encompass the next eight to ten years.
6
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
CURRENT YEAR RECOMMENDATIONS (Continued)
2011-2 UTILITY BILLING RECEIPTS
Observation
During our consideration of internal controls over the utility billing system, we noted that the HTE
(SunGard), the City's utility billing subsidiary ledger, does not interfacewith PeopleSoft, the City's general
ledger system. Currently, the Finance Department (transferred to the Utility Department subsequent to
June 30, 2011 upon the move of UB&C to Utilities) prepares a manual entry as a result of a cumbersome
reconciliation process.
Recommendation
We recommend that the City consider developing an automatic interface between the HTE and
PeopleSoft systems to ensure utility revenue is accurately captured and reported in the financial
statements reducing the risk of a misstatement occurring during the manual reconciliation process.
Management's Response
The City continues to agree with this recommendation and ultimately intends to make this a reality.
While it is true that a manual journal entry is still required to record the Utility receipts on the PeopleSoft
books, part of the contract with the outside consultant assisting the City in its conversion over to water
meters was to build the interface necessary for the HTE system to post daily into PeopleSoft. The plan
for the interface was that it would be built toward the end of the project as the City had to first complete
the conversion of the HTE system from bimonthly billing to monthly billing - which it did; fUllycapture all
reads from the newly installed water meters and complete the creation of bills reflecting charges based
upon actual usage rather than a flat rate. Water meters continue to be installed throughout the City of
Fresno and as such the system and interface are still a work in progress.
A Utility Advisory Committee made up of citizens from Fresno, made recommendations to the City
Council as to what they believed the appropriate Utility rates should be for the City of Fresno for the next
five years. They also made suggestions as to how best to roll out the water meter program to the citizens
of Fresno and took their latest recommendations to Council on March 31, 2011 with respect to the
suggested tiered rate the City should implement with respect to water usage. Initially the City was billing
a charge for the size of meter installed with a flat rate for water, no matter how much is used. Little by
little, the billings are being converted from a flat water rate to a ratethat reflects actual usage based upon
reads from the meters installed. After testing and upon reaching a comfort level that meter reads are
accurate and billings based upon these reads are also properly calculated and accurate, the actual usage
rate is being "turned on" for customers. This is the immediate and priority focus. Toward the end of the
meter installation, the bridge program will be created enabling the direct posting of utility payments into
the PeopleSoft system on a daily basis. At this time, it is not expected that the interface will be completed
by June 30, 2012 but it is anticipated that the project will begin in earnest fairly soon upon the completion
of all water meter installations and the full conversion over to monthly billings based upon actual water
usage. Until that time, the manual posting will continue along with the reconciliation procedures
necessary to ensure that the amounts journaled into PeopleSoft from HTE reports are accurate.
7
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
CURRENT YEAR RECOMMENDATIONS (Continued)
2011-3 CAPITAL ASSETS
Observation
It is the obligation of public-sector managers to maintain adequate control over all of a government's
resources,includingcapital assets, to minimize the risk of loss or misuse. During our audit of capital assets,
we noted that the City's capitalization threshold is $2,000 for all capital assets. The Government Finance
Officers Association (GFOA) recommends that capitalization thresholds never be less than $5,000 for an
individualitem. As of June 30,2011,the City had capitalized$22,346,765 (originalcost or .7% of total assets
and $4,048,367 net book value or .1%of total assets) which equates to 15,744 assets with individual values
of lessthan $5,000.
Recommendation
We recommendthat the City evaluate its currentcapitalizationthreshold and determine if a change in
threshold is reasonablefor the City's activities. As part of this evaluationthe City should consider that the
capitalizationthresholdfor equipment items acquiredwith federal awards cannot exceed $5,000.
Management's Response
For numerous years the Finance Department has had the desire to revise the capitalization threshold for
capital (fixed) assets. Several years ago, revisions to the Administrative Order (AO) were proposed and
submitted to Management; approval however was not obtained. It is believed that the confusion resulted
from the misconception that by raising the capitalization threshold the tracking of smaller assets would be
eliminated. PeopleSoft Asset Management provides departments the ability to track smaller assets that are
considered "sensitive" which would provide for control and tracking of those assets management and
departments consider subject to theft or misuse. These "assets" may be inventoried by the responsible
departments, but they should not be capitalized for CAFR purposes. This functionality is available for
departments to use if they so desire and as a result the AO has been rewritten and resubmitted to
management for consideration. The AO was approved by the Labor Management Task Force and is being
resubmittedto the City Manager's Office for review and consideration. Finance is also making some minor
revisionsto a separateAO related to sale of Scrap or Obsolete items which cause some minor conflicts with
the Capitalized Asset AO. Upon completion of these revisions, this AO will also be submitted to the City
Managerfor approval.
2011-4 INFORMATION TECHNOLOGY:User Account Management
Observation
During our audit we considered the general controls over information systems, including user rights to the
network and applications. We tested the City's controls over employee terminations and noted the user
accounts were still active subsequent to the termination dates for 2 of 25 terminated employees selected
for testing. During our audit for fiscal year 2010, we noted a similar finding where 5 of 25 terminated
employees still had active user accounts subsequent to the termination dates.
Recommendation
Though the condition has slightly improved, we recommend the City evaluate and revise its current
procedures related to employee terminations. Procedures should include a method of communication
between the Human Resources Department and the Information Services Department, to ensure user
access is terminated timely to safeguard the City's data.
8
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30,2011
CURRENT YEAR RECOMMENDATIONS (Continued)
2011-4 INFORMATION TECHNOLOGY: User Account Management (Continued)
Management's Response
The Human Resources Department (PSD) and the Information Services Department (ISD) have
established an automated process that notifies ISD and the Finance Department of employee
terminations, and automatically disables the active directory and the PeopleSoft user accounts. There is
a process in place to prevent continued access from occurring and it is working. This does not prevent a
City department from requesting continued access for an individual separated from the City through ISD
where access may occur after termination; however, this requires manager or higher level approval.
Additionally there are occasional delays by City departments in submitting the end of employment
paperwork, EAF which will allow the user to continue to have access to their account including email. It
should be noted however that the two instances where "access" occurred subsequent to the end of
employment was access via Smartphone and was only to the City's email system and not to PeopleSoft
or other more sensitive applications.
2011-5 INFORMATION TECHNOLOGY: Security of Server Room
Observation
During our audit, we performed a walkthrough of the City's server room and noted the equipment is not
adequately safeguarded. Within the City's Information Systems (IT) office, the room housing the City's
servers and other critical equipment is secured by a partitioned wall that can be easily moved to allow
access. Though the IT office is secured, it is imperative that not all IT personnel are allowed access to
the server equipment in order to protect the integrity of the City's data
Recommendation
We recommend the City replace the partitioned wall with a permanent dry wall to ensure the safety of the
server room and implement an electronic key entrance similar to other IT office entrances in order to
identify and verify who accesses the server room.
Management's Response
The ISD Server room (Room 1065) is indeed a partitioned room that contains both the server equipment
as well as human occupancy. We agree that this is not an ideal situation. Prior to the large staff
reductions throughout the City, this was the most cost effective solution to limited space and a restricted
budget. With the loss of staff over the past few years, space has now become available which would
allow for the relocation of staff to other areas outside of the Server room. The Server room itself is
already protected with electronic key entrance devices. It would be more budgetarily feasible to relocate
staff out of the Server room as opposed to building a permanent wall. This would also allow for future
Server room expansion if necessary whereas a permanent wall would not. This solution would also
potentially address an additional known issue as it relates to maintaining a recommended temperature
and humidity level in the Server roomthereby facilitating maximum equipment efficiency.
To build a permanent wall between the Server room and the human occupants would require a wall be
built below the raised floor and above the drop ceiling but it would not address the temperature and
humidity issue without extensive retooling of the HVAC system.
This issue is currently being reviewed by ISD in conjunction with Facilities Management.
9
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
STATUS OF PRIOR YEAR RECOMMENDATIONS
2010-1 PROPER RECOGNITION OF REVENUE IN PROPRIETARY FUNDS
(Significant Deficiency)
Observation
During our audit, we noted there was a widespread occurrence of DBCP, an agricultural pesticide in
certain groundwater throughout Fresno. At various City well sites, DBCP exceeds drinking water limits
and is removed by Granular Activated Carbon treatment. The City fronted the costs of clean up with
respect to the known wells and reimbursed itself from a litigation settlement (with Shell) in an original
amount of $21 million, $10 million was stipulated to be used toward past costs, and $11 million was to be
applied toward the installation of carbon filtration treatment units and capital costs of the installation of
granular activated carbon treatments at wells exceeding maximum contaminant levels.Generally at the
end of each fiscal year, the City evaluates the costs incurred in the current fiscal year and records an
entry to move the unearned revenue into revenue to match the current year expenses. As of June 30,
2010, the City did not evaluate or review the current year expenses; therefore, revenue was not properly
recognized for the year resulting in an overstatement of unearned revenue and an understatement of
revenue in the amount of $1,057,908.
Recommendation
We recommend that the City create or update a year end task list to include evaluation of the DBCP
Settlement to ensure the activity is evaluated annually and unearned revenue and revenue are properly
reflected each year.
Status of Corrective Action
Implemented.
2010-2 PROPER RECOGNITION OF REVENUE IN GOVERNMENTAL FUNDS
(SignmcantDeficrency)
Observation
The City processes approximately 26,000 Business License Renewals every quarter. In January 2010
the City installed and implemented new business license software. As part of the implementation of the
new software, the invoices developed did not contain the proper bar coding; therefore, payments received
by mail from January through June 2010 had to be manually entered into PeopleSoft. In addition, due to
current economic conditions, the City reduced the staff size in the Business License Department from 5
employees to 2 employees. During the period January through June 2010, the City kept all payments
received by mail locked in the vault until the receipts were processed. Furthermore, checks were not
deposited into the bank until the payment was processed, which in some cases occurred 3 months after
receipt of payment. As part of the year end process, the City evaluated the collection of business license
receipts and accrued $2,439,066 of payments processed in September 2010, which actually related to
activity for the year ended June 30, 2010, to properly capture business license receivables and revenues.
The City has made efforts to bring the business license receipts posting up to date by using additional
resources within the Finance Department. As of March 30, 2011, the City is up to date except for those
receipts that have unresolved issues.
10
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30,2011
STATUS OF PRIOR YEAR RECOMMENDATIONS (Continued)
2010-2 PROPER RECOGNITION OF REVENUE IN GOVERNMENTAL FUNDS (Continued)
Recommendation
We recommend the City establish or revise its procedures for depositing checks during times of transition
or reduced staffing, to ensure checks are deposited in a timely manner. These procedures could include
making copies of all checks received by mail and attaching them to the remittance advices to ensure
proper recording in PeopleSoft.
Status of Corrective Action
Implemented.
2010-4 UTILITY BILLING RECEIPTS
(Control Deficiency)
Observation
As part of the information gathering process and understanding of the utility billing system, we noted that
the general ledger software used by the City is PeopleSoft, while the utility billing software is HTE
(SunGard). Currently, HTE does not automatically interface with PeopleSoft; therefore, a manual entry is
required to post utility billing revenue in PeopleSoft. The posting of this journal entry is a multi-step
process: daily revenue is posted to a "suspense" account in PeopleSoft, while a monthly revenue report is
generated by HTE and, based on this report; "actual" revenue is transferred from the suspense account to
the revenue accounts. This comment was also noted on our letter dated February 24, 2010. During
current year testwork, we noted that the City has continued to make steps to improve the reconciliation
process; however, a manual entry is still required.
Recommendation
We recommend that the City continue to create an automatic interface between HTE and PeopleSoft to
ensure utility revenue is properly recognized and recorded in the general ledger.
Status of Corrective Action
See current year recommendation 2011-2.
2010-5 DEPOSITS FROM OTHERS
(Control Deficiency)
Observation
During deposits from others testwork, we noted outstanding deposits recorded in the City's general ledger
received from 1969 to 2009 that range from $20 to $550,000. The City has been either unable to find the
depositor or since they are dated, no documentation exists with a number of the deposits. As part of the
City's policies and procedures,it is up to each individual department to give the Finance Department the
approval to release the deposits. This comment was also noted in our letter dated February 24, 2010.
During the current year testwork, we noted that the City has continued to make steps to "clean up" old
deposits and the remaining deposits under review relate primarily to the Planning and Development
Department.
11
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
STATUS OF PRIOR YEAR RECOMMENDATIONS (Continued)
2010-5 DEPOSITS FROM OTHERS (Continued)
Recommendation
We recommend that the City perform a reconciliation of outstanding, dated deposits and return the deposit
amounts or recognize the revenue of deposits as deemed appropriate. We further recommend that the City
develop a policy and procedure relating to the on-going process of all deposits including the collection of
receipts,refundsand timely reconciliations.
Status of Corrective Action
Implemented.
2010-6 CAPITAL ASSETS
(Control Deficiency)
Observation
During capitalasset testwork,we noted that the City's capitalizationthreshold is $2,000for all capital assets.
Recommendation
We recommendthat the City evaluate the current capitalizationthreshold and determine if the currentamount
is reasonable for the City's activities. The Government Finance Officers Association (GFOA) recommends
that capitalization thresholds never be less than $5,000. We further recommend that the City consider a
higherthresholdfor infrastructureassets, such as $100,000.
Status of Corrective Action
See current year recommendation 2011-3.
2010-7 INFORMATION TECHNOLOGY
(Control Deficiency)
Observation
During testwork performed of User Rights to Network and Applications, we noted that 5 out of 25
terminated employees selected for testwork had active user accounts after the date of termination. This
comment was also noted in our letter dated February 24, 2010.
During our audit, we performed a walkthrough of the server room and noticed the following; 1) the server
room contains wet sprinklers, which if discharged would cause extensive damage to the servers, 2) there
is a second door to the server room that does not require the use of an electronic key but a manual key,
and 3) one side of the server room is a partitioned wall that can be easily moved to allow access.
Recommendation
We recommend management establish formal policies and procedures for user account management.
This includes the creation of user accounts as well as the removal of accounts upon separation from the
City. We also recommend that when employees change positions or job duties that their user profile in
various applications be reviewed and amended as required. This is a process which needs to be
coordinated with Human Resources as well as Information Services and the other departments which
control application access.
12
CITY OF FRESNO
Report to the Mayor and City Council
For the Year Ended June 30, 2011
STATUS OF PRIOR YEAR RECOMMENDATIONS (Continued)
2010-7 INFORMATION TECHNOLOGY (Continued)
Recommendation (Continued)
We recommend the wet sprinkler system be replaced with dry pipe, pre-action sprinklers or a clean
agent/gaseous system which are the predominant protection system for high value assets. Additionally,
we recommend the City build a dry wall where the partitioned wall exists to ensure the safety of the server
room and implement an electronic key entrance to mirror the other entrance in order to verify who enters
the server room.
Status of Corrective Action
User Account Management -See current year recommendation 2011-4
Security of Server Room -See current year recommendation 2011-5
Fire Suppression System - Pass on Implementation of the Recommendation
The replacement of the wet sprinkler system with dry pipe, pre-action sprinklers or a clean agent/gaseous
system are simply too cost prohibitive at this time. Most fires in mission critical facilities can be prevented
if common mistakes are avoided and fire detection is properly specified and monitored. Human error
plays a large role in preventing fire hazards and must be eliminated through training and procedures that
are enforced. The removal of staff in this area assists in this process. The City will work closely with its
Fire Department and the Emergency Preparedness Office to develop the most cost effective resolution to
this issue.
13
City of~~~~...~I~
r ....IGiW#;';jj~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.10:30QlfY')B
COUNCIL MEETING 05/17/12
...~
DEPART::::
CITY MANAGE
FROM:
BY:
SUBJECT:
PATRICK N. WIEMILLER,Director
Public Works Department
SCOTT L. MOZIER, PE, City Engineer/Assistant Director ~Yk
Public Works Department, Traffic and Engineering Services Division /tf"I ''-
RESOLUTION -ADOPTING THE 67
TH AMENDMENT TO THE ANNUAL
APPROPRIATIONS RESOLUTION NO. 2011-133 APPROPRIATING
$295,000 IN PROPOSITION 1A FUNDS FOR ENGINEERING AND PLAN
REVIEW FOR THE HIGH-SPEED RAIL (HSR)PROJECT UNDER THE
MASTER COOPERATIVE AGREEMENT
RECOMMENDATION
Staff recommends that the Council adopt a resolution adopting the 67th Amendment to the Annual
Appropriations Resolution No. 2011-133 appropriating $295,000 in Proposition 1A funds for engineering
and plan review for the High-Speed Rail (HSR) project under the Master Cooperative Agreement.
EXECUTIVE SUMMARY
Staff has been working with representatives of the California High-Speed Rail Authority (CHSRA)to
develop a Master Cooperative Agreement between the CHSRA and the City of Fresno that will set forth
the design, construction and maintenance responsibilities for facilities to be constructed, modified or
relocated as part of the HSR project. On May 3, 2012, the Council approved a Memorandum of
Understanding (MOU) for this work and authorized the Public Works Director or designee to sign the
MOU. The CHSRA has agreed to compensate the City for costs related to developing the agreement up
to $295,000.
In order for the interests of the community to be adequately addressed, such as streets, traffic signals,
water and sewer systems, it is critical for City staff to be engaged in the review of the proposed designs
and modifications, particularly in locations where grade separations will be constructed to carry traffic
under or over the High-Speed Rail/Union Pacific Railroad corridor. It should be noted that the design
and engineering work provided for through this agreement can also be used to support future grade
separation projects as outlined in Regional Measure C/Rail Consolidation Program.
Therefore, staff recommends that Council adopt a resolution amending the Annual Appropriations
Resolution (AAR) to appropriate the CHSRA funding needed to perform this critical design and
engineering work.
BACKGROUND
The CHSRA is proposing to begin construction in Fresno within the next year and on May 3, 2012,
certified the Final Environmental Impact Report for the Merced to Fresno segment. The alignment as
depicted in the project's Environmental Impact Report is generally on the west side of the Union Pacific
Railroad (UPRR) tracks from north of Herndon Avenue through downtown and south to Jensen Avenue,
Report to the City Council
ResolutionAdopting 67
th Amendmentto AAR Memorandumof Understandingwith California High-Speed Rail Authority
May 17, 2012
Page 2
then curving toward an alignment on the west side of the Burlington Northern Santa Fe (BNSF) tracks
from the Highway 99 crossing to the southerly sphere of influence boundary at American Avenue. In
order to construct the HSR corridor on the proposed track alignment, numerous City facilities will have to
be relocated or modified. These facilities include the protection, modification or relocation of numerous
sewer and water pipelines, the relocation of Golden State Boulevard between the Herndon Avenue/SR-
99 interchange and Ashlan Avenue, extensive modification of streets such as Parkway Drive west of
SR-99 as a result of shifting SR-99 to the west, street closures, grade separations (such as Shaw
Avenue, McKinley Avenue, Olive Avenue, Belmont Avenue, Fresno Street underpass extension, Tulare
Street, Ventura Street, Church Avenue, Central Avenue) and associated work such as signing, striping,
traffic signal modifications, street lighting, drainage facilities, curbs, gutters and sidewalks. Much of this
work would also be applicable if and when a decision was made to begin grade separating a number of
these corridors pursuant to the Measure C Rail Consolidation Program.
Staff has been contacted by Parsons Brinckerhoff, the engineering consultants for the CHSRA in order
to develop a Master Cooperative Agreement that will assign design, construction, and maintenance
responsibilities for the project. An interagency cooperative agreement would typically be required for a
project of this magnitude. For example, each of the previous freeway extension projects has involved a
cooperative agreement between Caltrans and the City of Fresno. High-speed rail will need to follow a
similar process and as such the proposed MOU will provide the City with the necessary funding to
partner with the CHSRA in the development of a cooperative agreement.
The Public Works Department and the Department of Public Utilities have estimated.the cost to perform
the needed tasks identified in the attached Scope of Work at $295,000, as described in the MOU which
was approved by the Council on May 3, 2012. This estimate of cost was transmitted to Parsons
Brinckerhoff by letter, a copy of which is attached. The MOU will obligate the CHSRA to reimburse the
City, up to $295,000, for costs incurred in performing the items listed in the Scope of Work. Upon
successful negotiation of a detailed Master Cooperative Agreement, staff will return to Council for
approval of the proposed agreement.
FISCAL IMPACT
No General Fund dollars will be required for the proposed work. The City's costs for services provided
under the proposed MOU will be paid for by CHSRA project funding. Council approval will allow the City
to receive CHSRA funding for this very critical engineering work and result in a significant savings of City
dollars.
Attachments:
1. ProjectArea Map
2.6ili Amendment to the Annual Appropriations Resolution
3. MOU with California High-Speed Rail Authority
4. City Letter to Parsons Brinckerhoff
..-\
<
'c • \
..,'".",
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO
ADOPTING THE 67"AMENDMENT TO THE ANNUAL APPROPRIATION
RESOLUTION NO.2011·133 APPROPRIATING $295,000 IN
PROPOSITION 1A FUNDS FOR ENGINEERING AND PlAN REVIEW
FOR THE HIGH SPEED RAIL (HSR)PROJECT UNDER THE MASTER
COOPERATJVEAGREEMENT
BE rr RESOLVED BYTHE COUNCIL OFTHE CrN OF FRESNO:
THATPARTIIIof the Annual Appropriation ResoJutlon No.2011·133 beand Is hereby amended
as follows:
Inqeasel(Decre8ae\
TO:PUBLIC WORKS DEPARTMENT
High Speed Ran Projects $295,000
THATaccounttiUesand numbers requiring adjustment bythis ResoJutlon are as follows:
Hiah Speed Rail Prop
Revenues:
Account 33529 Proposition 1A Revenue
Fund:28001
Org Unit 1....
Total Revenues
Appropriations:
Account 51101 Permanent Salaries
51104Penn Fringe-HeaJth&WeJfare
53302 Prof SvcslConsuIting •OutsIde
55501 Printing &Bindlng-OIS Vendor
59102City Attomey Charges
59105 Purchasing·Variable Charge
59117 Overhead
Fund:26001
Org Unit 18_1
Project:PWD0863
Total Appropriations
s 295.000
S 2R§'c)go
$82,500
19,000
90,000
4,500
10,000
2,400
86.600
THAT the purpose is to appropriate $295,000 lnProp 1Afunds for engineering and plan review
to be perfonned by the CIty for the High Speed Rail (HSR)project underthe Master Cooperative
Agreement.
-1-
K:\U8ERS\DOCS1RE808IFY 12 AAR\12 87th PJop1A HSR.SRM.docx
CLERK'8 CERTFICATION
STATE OF CALFORNIA }
COUNTY OF FRESNO }••
CITY OF FRESNO }
I.YVONNE SPENCE.CIty Clerk of the City fA FI88OO.eerily that the fcngalng ReeoIutIon was
adapted by the CouncI of the City of F...-.o.Ce~.at.NgUIar meeting thenIof.held on the
___Day of .2012
AYES:
NOES:
ABSENT:
ABSTAIN:
MayorApproval:.~~-"2012
MayorAppmvaIINo ReIum:,2012
MayorVetD:,2012
Council Override Veto:,2012
YVONNE SPENCE.CMC
CIty Clerk
-2-
STATEOF CALIFORNIA
STANDARD AGREEMENT
STD21'__1i-~_R_l_l_:._NUMBER_NU-MlEA-=----------"l
1.this Agreement is entered intobetween the State Agencyand the Coilbactot named below:
STATE AGENCY'S HAlE
California Higb-8peed-RaiI Authority
CONTRACTOA'S NAME
City of Fresno
2.The termof this April 20, 2012 through June 30,2013
Agreement is:or upon DOS approval.whichever is lalcr
3.The maximum amount $296,000.00
of this Agreement is:Two Hundred Ninety-six Thousand Dollars
4. The parties agreetocomply with the termsand conditions of the following exhibits which are by this referencemadea
part of the Agreement
Exhibit A -Scope of Work 3 page(s)
Exhibit B-Budget Detail and Payment Provisions
ExhibitC· -General Terms and Concfdions
Check mark one item below as Exhtit 0:
~Exhibit- 0 Special Terms and Conditions..(Attached hereto88 part ofthis agreement)
[Q]exhibit - 0*Special Terms and Conditions
ExhibitE-Adcfltional Provisions
Attachment 1-Cost ProposaVnmeline 7 page(s)
3 page(s)
4 page(s)
10 page(s)
2 page(s)
Items shown with an Astelisk n.ate heteby incorporaIed by trIfetence and madtI paIt ofthis agtNment as Hatltlched Mteto.
These documents can be viewed at WWW.oIs.dgs.CII.gov~
IN WITNESS WHEREOF,this Agreement ....been execulld by ..........a..to.
CONTRACTOR c.JIIotnItI ".,."",.",of GftnfnI
SKn-.U.OnIy
CONTRACTOFrS NAME(If fJIher than.,1ndifIIdutII,.."",.",..QOIjiOi........._)
City of Fresno
BY (AuIhotizaI SignIJIute)DATE SlGNED{DlPI/IIII"'"
It5
PRINTED NAME ANDTITlEOF PERSON SIGNING
Scott Mozier,P.E.,City Engineer/Assistant Director
ADDRESS
City of Fresno. PublicWorksDepartment
2600Fresno Street,4111 Floor,Fresno,CA93721-3623
STATEOF CALIFORNIA
AGENCY NAME
CaliforniaHigb-Speed-RailAuthority
BY (AuthDdzfIdSi(pJIute)DATE SlGNEDtDD_1.P1
I<
PRINTED NAME ANDTlTlE OFPERSON SIGNING [J Exemptper:
Thomas Fellenz,Chief Counsel
ADDRESS
770 L Street,Suite 800,Sacramento,CA 95814
City of Fresno
HSRll-29
Page 10f3
EXHIBIT A
SCOPEOFWORKAND DELIVERABLES
I.BACKGROUND
TheCalifornia High-Speed Rail Authority (AUTHORITY)is undertaking a projecttodesignand
constructa high-speed rail linetoconnectthemajorcitiesin California.Thesystemis scheduled
to begin operation in 2020. The California High-Speed Train Project (CHSTP) will have a
nominal end-to-end length of 800 miles, with trains travelling at speeds up to 220 mph. The
AUTHORITY willoperateinandout of the (CONTRACTOR)service territory.
A. This Agreement will commence on the start date April 20, 2012 as presentedherein or
upon approval by the AUTHORlTY,.whichever is later and no work shall begin before
that time.This Agreement is of no effect unless approved by the AUTHORITY.The
Contractor shall not receive payment for work performed prior to approval of the
Agreement and before receipt of notice to proceed by the AUTHORITY's Contract
Manager.This Agreement shallexpireon June 30, 2013.The services shall be provided
during Monday through Friday,except designated State holidays.The parties may
amendthis agreement as permitted bylaw.
B. All inquiries during the term of this Agreement will be directed to the project
representatives identified below:
California High-Speed Rail Authority CityofFresno,PublicWorksDepartment
Contract Manager:Shahin Pourvahidi,P.E. Proiect Manager:ScottMozier,P.E.
Address:770LStreet,Suite800 Address:2600FresnoStreet,41D Floor
Sacramento,CA 95814 Fresno,CA 93721-3623
Phone: (916)384-0564 Phone:(559)621-8811
Fax:(916)322-0827 Fax:(559)488-1045
e-mail:soourvahidi@hsr.cagov e-mail:scott.mozier@fresno.20v
Theproject representatives duringthe term of this Agreement maybechangedbyadvance
writtennoticewithoutthe necessity of an amendment tothe Agreement.
II.CONTRACTOR REPORTS AND/OR MEETINGS
A. The Contractor shall submit a schedule for the submittal of reports, and report
content,withinthe first 3O-days of this Agreement.
B.The Contractor'sProjectManagershallbe available to the AUTHORITY'sContract
Managerasneededtodiscuss progress on the Agreement.
City of Fresno
HSRII-29
Page2 of3
EXHIBIT A
SCOPEOFWORKAND DELIVERABLES
m.SCOPEOFWORK
I.Agreement
1.1 Risk Management
A. Risk Analysis
1.2LegalServices
A.Reviewand re-review of Agreement by CityAttorney's Office
B.Reviewof reportspreparedby staffforCityCouncil consideration
1.3 Project Meetings
A.Publications,projectmeetings,andnotices
B.Staff participation in projectmeetings
1.4 CityStaffEffort
A.Preparation of draftagreement
B.Negotiations with HSR staffand consultants regarding terms,contentand
formof Agreement
C.Verification ofexisting rights of way information requestedby designlbuild
contractors
D. Staffeffortby theCity's FinanceandPublicWorks Departments in
budgetingandpreparing Appropriations Resolutions
E.Overalloversightoftheagreement development processbytheCity
EngineerandCityTrafficEngineer
F.Preparation ofvariousCityCouncilReports,includingCouncil
presentation
G.Attenddesign coordination meetings
2.Prior Rights
2.1Street Construction
A.ReviewofDesignfor conformance to CityStandards
B. Planreviewandapproval
C. StudyvehicleCirculationImpacts
D. Streetrightsof wayanalysis
2.2 Underground Utilities
A. AnalyzeCityownedutilities within HSRRIWwhichshallremainunder
Cityownership
B. Analyzeeasementscontainingutilitieswhichshallremain with the City
City of Fresno
HSRll-29
Page 3 of3
EXHIBIT A
SCOPEOF WORK AND DELIVERABLES
3.Project Conflicts with Existing Infrastmcture
3.1 Conflict Review
A.Preliminary and pre-plan check review of conflicts with City owned
utilities,sanitary sewer,water, and fiber optic network
B.Analyze vehicular circulation conflicts with construction
4.Consultant Selection
4.1 Selection of Special Consultantls to Assist in Development of Master Cooperative
Agreement
A.Analyze consultantls work schedule
B.Determine consultantls costs and fees
C.Interview and hire consultants for plan checking
Cityof Fresno
HSR11-29
Page 1 of3
EXHIBITB
BUDGET DETAIL AND PAYMENT PROVISIONS
A.FUNDING REQUIREMENTS
I.It is mutually agreed that if the BudgetAct of the currentyearand/orany subsequent
years covered under this Agreement does not appropriate sufficient funds for
pursuing work under this contract,this Agreement shall be of DO further force and
effect.In this event, the AUTHORITY shall have no liability to pay any funds
whatsoevertoContractoror tofurnishanyother considerations underthis Agreement
andtheContractorshallnot be obligated to perform anyprovisionof this Agreement.
2.In addition,this Agreement is subject to any additional restrictions,limitations,
conditionsor anystatuteenactedby theCongressor State Legislature that may affect
the provisions,termsor funding of thisAgreementin anymanner.
3.If fundingforany fiscalyear is reducedor deletedby the BudgetAct for purposesof
this Agreement,the AUTHORITY shall have the option to either cancel this
Agreement withno liabilityoccurringto the AUTHORITY or Contractor,or offer an
Agreement Amendment to theContractortoreflectthereducedamount.
B.COMPENSATION,INVOICING ANDPAYMENT
2.The total amountpayableby the AUTHORITY~for this Agreement shall not exceed
$XXXX.It is understood and agreed this total is an estimate,and the actual amount
ofworkrequestedbythe AUTHORITY may be less.
3.Any changes in scope requested by the AUTHORITY or work required beyond
expectations may result in additional time to completethe Study and shall be billed
accordingly and proceeded with asoutlined.At any time the Contractor detennines
the Study is expected to cost more than $XXXXXX, the CONTRACfOR shall
promptly notify the AUTHORITYand provide an estimate of any additional costs.
Upon receipt of such notice, the AUTHORITY shall either: (a) request the
CONTRACTORtoterminate the Study,or (b)amend the agreement.
4.The Contractorshall not commence performancenor will payment be made for any
workperformedpriorto approvalof this Agreement by State and writtennotification
to proceed has been issued by the AUTHORITY's ContractManager, nor will any
payment be madeforworkperformedaftertheexpirationdateof this Agreement.
5.Invoices shall include the Agreement Number,include actualhours worked (by
individual positions),actual costsfor salarieslbenefits,travel andotherdirect
andindirectcosts(by individual),with accompanying receipts andother
documentation to support travel/other directcosts.
Cityof Fresno
HSR11·29
Page2 of3
EXHmITB
BUDGET DETAIL AND PAYMENT PROVISIONS
6. Invoices shall be submitted monthly in arrears to:
California High-Speed Rail Authority
Financial Operations Section
770 L Street, Suite 800
Sacramento, CA 95814
7.If the AUTHORITY determines additional work beyond that specified in theCost
Proposal is desired,the AUTHORITY may increase the additional workby an
agreement amendment.The maximum totalcost as specified inthisExhibitB,shall
notbe exceeded unless authorized by an agreement amendment.
8.The Authoritymay demand that CONTRACTOR tenninate the Study at any time.
Immediatelyfollowing receipt of written notice of such termination from the Authority,
CONIRACTORshall tenninate the Study asdemanded.In such case,the Authority
shall reimburse CONTRACTOR only for the costs actually incurred for the
performance of the terminated Smdy.
C. COST PRINCIPLES
I. The Contractor agrees that the Contract Cost Principles and Procedures,48 CPR,
Federal Acquisition Regulations System,Chapter 1,Part 31 et seq., shall be used to
determine the allowability of individual itemsofcost.
2. The Contractor alsoagreesto comply withFederal procedures in accordance with49
CPR, Part 18,Uniform Administrative Requirements for Grants and Cooperative
Agreements toStateandLocal Governments.
3. Anycostsfor which paymenthasbeenmadeto the Contractor thatare determined by
subsequent audit to be unallowable under48 CPR, Federal Acquisition Regulations
System,Chapter 1, Part 31 et seq.or 49 CPR, Part 18, Uniform Administrative
Requirements for Grants and Cooperative Agreements to State and Local
Governments,aresubject to repayment by the Contractor to the AUTHORITY.
City of Fresno
HSRll·29
Page 3 of3
EXHffiITB
BUDGET DETAIL AND PAYMENT PROVISIONS
D. CONTINGENTFEE
The Contractor warrants. by execution of this Agreement, that no person or selling
agency has been employed or retained to solicit or secure this Agreement upon an
agreement or understandingfor a commission,percentage,brokerage, or contingent fee,
excepting bona fide employees or bona fide established commercial or selling agencies
maintained by the Contractor for the purpose of securing business. For breach or
violation of this warranty, the AUTHORITY has the right to annul this Agreement
without liability, pay only for the value of the work actually performed, or in its
discretion,to deductfrom the Agreementprice or consideration,or otherwiserecover. the
full amount of suchcommission,percentage,brokerage,or contingentfee.
Cityof Fresno
HSRll-29
Page lof4
EXHIBITC
GENERALTERMSAND CONDmONS
GTC610
1.APPROVAL:This Agreementis of no force or effectuntilsignedbybothpartiesand
approvedbytheDepartmentof GeneralServices,ifrequired.Contractormay notcommence
perfonnanceuntilsuchapproval has beenobtained.
2.AMENDMENT:Noamendmentor variationof the termsof this Agreementshall be valid
unlessmadein writing,signedby the partiesandapprovedas required.No oralunderstandingor
Agreementnotincorporatedin the Agreementis bindingonanyof theparties.
3.ASSIGNMENT:This Agreementis notassignablebytheContractor,eitherin wholeor in
part,withouttheconsentof the Statein thefonn of a fonnal writtenamendment.
4.AUDIT:Contractor agrees thatthe awarding department,theDepartmentof GeneralServices,
theBureau of StateAudits,or theirdesignated representative shallhavethe righttoreview and
to copyanyrecordsandsupporting documentation pertainingto the perfonnance of this
Agreement.Contractoragreesto maintainsuchrecordsforpossibleauditfor a minimumof three
(3)years afterfinalpayment,unlessa longerperiodof recordsretentionis stipulated.Contractor
agrees to allowtheauditor(s)accessto suchrecordsduringnormalbusinesshoursandto allow
interviewsofanyemployeeswhomightreasonablyhaveinformationrelatedto suchrecords.
Further,Contractoragreesto includea similarrightof theStateto auditrecordsandinterview
staffin anysubcontractrelated to perfonnance of this Agreement.(Gov.Code §8546.7, Pub.
ContractCode §101l5 et seq.,CCRTitle 2,Section1896).
5.INDEMNIFICATION:Contractoragreesto indemnify,defendandsaveharmlessthe State, its
officers,agentsandemployeesfromanyandallclaimsandlosses accruing or resultingto any
andallcontractors,subcontractors,suppliers,laborers,andanyotherperson,finn orcorporation
furnishingor supplyingworkservices,materials,or suppliesin connectionwith theperformance
of this Agreement,andfromany andallclaimsandlossesaccruingor resultingto any person,
finn or corporationwhomay be injuredor damagedbyContractorintheperformance ofthis
Agreement.
6.DISPUTES:Contractorshallcontinuewiththe responsibilities underthisAgreementduring
anydispute.
7.TERMINATION FORCAUSE:TheStatemayterminate this Agreementand be relievedof
anypaymentsshould the Contractorfail toperformthe requirements of this Agreementat the
timeandin themannerhereinprovided.In the eventof such termination theStatemay proceed
withtheworkin anymannerdeemedproperby the State.Allcosts tothe Stateshall be deducted
fromany sumduetheContractorunder this Agreementandthe balance,if any, shall be paidto
theContractorupondemand.
Cityof Fresno
HSRIl-29
Page20f4
EXHIBlTC
GENERAL TERMS ANDCONDmONS
8.INDEPENDENT CONTRACTOR'Contractor.andtheagentsand employees of Contractor.
inthe performance of this Agreement,shallactin an independent capacityandnotasofficersor
employees oragentsoftheState.
9.RECYCLING CERTIFICAnON:The Contractor shallcertifyin writingunderpenaltyof
perjury.the minimum,if not exact,percentage ofpost consumer material asdefinedin thePublic
ContractCodeSection 12200.in products.materials.goods.orsuppliesofferedor soldto the
State regardless ofwhether the productmeetsthe requirements ofPublicContractCodeSection
12209.Withrespecttoprinteror duplication cartridges thatcomplywiththe requirements of
Section 12156(e).the certification required by this subdivision shallspecifythatthe cartridges so
comply (Pub.ContractCode §12205).
10.NON-DISCRIMINATION CLAUSE:Duringthe performance of this Agreement.Contractor
andits subcontractors shall not unlawfully discriminate.harass.or allow harassment againstany
employee or applicant for employment because ofsex.race,color,ancestry.religiouscreed.
national origin.physical disability (including HIVand AIDS). mental disability.medical
condition(e.g.•cancer).age(over40).maritalstatus.anddenialof family careleave.Contractor
and subcontractors shallinsurethatthe evaluation and treatment of their employees and
applicants for employment are free fromsuch discrimination and harassment.Contractor and
subcontractors shallcomplywiththe provisions of the Fair Employment and Housing Act(Gov.
Code§12990(a-f)et seq.)and the applicable regulations promulgated thereunder (California
Codeof Regulations.Title2.Section7285et seq.).The applicable regulations of theFair
Employment andHousing Commission implementing Government CodeSection12990(a-f).set
forthin Chapter5 ofDivision 4 ofTitle2oftheCalifomiaCodeof Regulations,are incorporated
intothis Agreement by reference and made a part hereofasif setforthinfull.Contractorandits
subcontractors shallgive written notice oftheir obligations underthisclause to labor
organizations withwhichtheyhavea collective bargaining or other Agreement.
Contractor shallincludethe nondiscrimination and compliance provisions of thisclausein all
subcontracts toperformworkunderthe Agreement.
II.CERTIFICATION CLAUSES:The CONTRACTOR CERTIFICATION CLAUSES
containedinthe document CCC307are hereby incorporated by reference andmadeapartof this
Agreement by this reference asif attached hereto.
12.TIMELINESS:Timeis oftheessencein this Agreement.
13.COMPENSATION:The consideration to be paid Contractor.as provided herein,shallbe in
compensation forallof Contractor's expenses incurred in the performance hereof.including
travel.per diem,andtaxes.unless otherwise expressly so provided.
Cityof Fresno
HSRII-29
Page30f4
EXlDBITC
GENERAL TERMS AND CONDmONS
14.GOVERNING LAW:Thiscontractis governed byandshallbe interpreted in accordance
withthelawsof theStateof California.
15.ANTITRUST CLAIMS:The Contractor bysigningthis agreement herebycertifiesthat if
these services orgoodsare obtained bymeansofa competitive bid,the Contractor shallcomply
withthe requirements of the Government Codes Sections setout below.
a.The Government CodeChapteron Antitrust claims contains the following.definitions:
1)"Public purchase"meansa purchase by means of competitive bidsofgoods,services,or
materials bytheStateoranyof itspolitical subdivisions orpublic agencies onwhosebehalfthe
Attorney Generalmaybringanactionpursuantto subdivision (c)of Section 16750 of the
Business and Professions Code.
2)"Publicpurchasing body"meanstheStateor the subdivision oragencymakinga public
purchase.Government CodeSection4550.
b.In submitting a bidtoapublic purchasing body,thebidderoffersandagreesthatif thebidis
accepted,it will assign tothe purchasing bodyall rights,title,andinterestinandto all causesof
actionitmayhaveunderSection4 ofthe Clayton Act(15U.S.C.Sec.15)orunderthe
Cartwright Act(Chapter2 (commencing withSection167(0)ofPart2 of Division 7of the
Business and Professions Code),arisingfrom purchases of goods,materials,or services bythe
bidderforsaletothe purchasing bodypursuantto the bid.Such assignment shallbemadeand
becomeeffectiveat thetimethe purchasing body tenders fmal payment tothe bidder.
Government CodeSection4552.
c.Ifan awarding bodyorpublic purchasing body receives,either through judgmentor
settlement,a monetary recovery foracauseofaction assigned underthischapter,theassignor
shall beentitledtoreceive reimbursement foractuallegalcosts incurred andmay,upon demand,
recoverfromthepublicbodyanyportion ofthe recovery,including treble damages,attributable
to overcharges thatwerepaidbytheassignorbutwerenotpaidbythe publicbodyaspartof the
bidprice,less the expenses incurred in obtaining thatportion of the recovery.Government Code
Section4553.
d.Upon demand in writing bythe assignor,the assignee shall,within oneyearfromsuch
demand,reassign thecauseofaction assigned underthispartif theassignorhasbeenor may
havebeeninjuredbythe violation oflawforwhichthecauseof actionaroseand(a)theassignee
hasnotbeeninjured thereby,or (b)the assignee declines tofileacourtactionforthecauseof
action.See Government CodeSection4554.
16.CHILD SUPPORT COMPLIANCE ACI': Forany Agreement inexcessof $100,000,the
contractor acknowledges in accordance withPublicContractCode7110,that:
a.Thecontractorrecognizes the importance ofchildand family support obligations andshall
fullycomplywithall applicable stateand federal lawsrelatingtochildandfamilysupport
City of Fresno
HSR11-29
Page40f4
EXHIBITC
GENERALTERMSAND CONDmONS
enforcement,including,butnotlimited to,disclosureof informationandcompliancewith
earningsassignmentorders,asprovided in Chapter 8 (commencing withsection 52(0)of Part 5
of Division 9 of the FamilyCode;and
b.The contractor,to the best of itsknowledgeisfullycomplyingwiththeearningsassignment
orders of aU employeesandis providing the names of all newemployees to the NewHire
Registry maintained bytheCaliforniaEmploymentDevelopmentDepartment.
17.UNENFORCEABLE PROVISION:In theevent that anyprovisionof thisAgreementis
unenforceableor heldto be unenforceable,thenthe parties agree that all other provisions of this
Agreementhaveforce andeffectand shallnot be affected thereby.
18.PRIORITYHIRING CONSIDERAnONS:If thisContractincludesservices in excess of
$200.000,theContractor shall givepriority consideration in fillingvacancies in positionsfunded
by theContracttoqualifiedrecipientsof aidunderWelfareandInstitutionsCodeSection 11200
in accordancewithPub.ContractCode§10353.
19.SMALLBUSINESS PARTICIPATION AND DVBE PARTICIPATION REPORTING
REQUIREMENTS:
a.Iffor this ContractContractormadea commitmentto achievesmallbusinessparticipation,
thenContractormustwithin60daysof receivingfinalpaymentunderthis Contract(or within
suchother timeperiodas may be specifiedelsewhere in this Contract)report to theawarding
departmenttheactualpercentageof smallbusiness participation thatwasachieved. (Govt.Code
§14841.)
b.Iffor thisContractContractormade a commitmentto achievedisabledveteranbusiness
enterprise(DVBE)participation,thenContractormustwithin 60 daysof receivingfinal payment
underthis Contract(orwithinsuchothertimeperiodas maybe specifiedelsewherein this
Contract)certifyin a reportto theawarding department:(1)thetotalamounttheprime
Contractorreceivedunder the Contract;(2)thenameandaddressof the DVBE(s)that
participated in the performanceof theContract;(3)the amount each DVBEreceivedfrom the
primeContractor;(4)that all payments under the Contracthavebeenmadeto theDVBE;and (5)
theactualpercentageof DVBEparticipationthatwasachieved. A personorentitythat
knowinglyprovidesfalseinformationshall be subjectto a civilpenaltyfor eachviolation. (Mil.
&Vets.Code §999.5(d);Govt.Code §14841.)
20.LOSS LEADER:
If thiscontractinvolvesthefurnishingofequipment,materials.or suppliesthenthe following
statementis incorporated:Itis unlawfulfor anypersonengaged in businesswithinthis state to
selloruse anyarticleor productasa "lossleader"as definedin Section17030of theBusiness
and ProfessionsCode.(PeC 10344(e).)
Cityof Fresno
HSRll-29
Page 1 of 10
EXHIBITD
SPECIAL TERMS AND CONDmONS
A.AMENDMENr (CHANGE IN TERMS)
1.No amendment orvariationofthetermsof thisagreementshall be validunless
madeinwriting,signedbytheparties,andapproved as required.Nooral
understanding or agreement not incorporated in agreement is bindingon any of
the parties.
2.The Contractorshallonly commence workcoveredbyanamendmentafter the
amendment is executed and notification toproceed has beenprovidedin writing
bytheAUTHORITY'sContract Manager.
3.Thereshallbenochangein theContractor'sProjectManageror membersof the
projectteam,as listedin thecostproposal,whichis a partof this Agreement,
withoutpriorwritten approval bythe AUTHORITY'sContract Manager.If the
Contractorobtains approval fromtheAUTHORITY'sContractManagerto add or
substitute personnel,the Contractormustprovidethe Personnel RequestForm,a
copyof theSF330orresumeforthe additional or substituted personnel,along
with a copyofthecertifiedpayrollfor that person.
B.DISPUTES
1.TheContractorshallcontinuewiththe responsibilities underthisAgreement
duringanywork dispute.Any dispute,otherthanaudit,concerninga questionof
factarisingunderthis Agreement thatis notdisposedof by agreementshallbe
decidedbytheChiefExecutive Officer.
2.In theeventof a dispute,theContractorshallfile a "Noticeof Dispute"withthe
California High-Speed RailAuthorityand the ChiefExecutiveOfficerwithinten
(l0)daysof discovery of the problem.Withinten (10)days,theChiefExecutive
OfficershallmeetwiththeProjectManagerfor purposesof resolvingthedispute.
ThedecisionoftheChief Executive Officershall be final.
3.Neitherthependencyof a disputenorits consideration by theChiefExecutive
OfficerwillexcusetheContractorfromfullandtimely performance in
accordance withthe terms ofthis Agreement.
C.TERMINATION
This sectionregarding termination is in additionto GTe 610.
1.The AUTHORITY reservestherightto terminate thisAgreementimmediatelyin
theeventof breachor failureof performance by the Contractor,orupon thirty
Cityof Fresno
HSRII-29
Page2 of 10
EXHIBITD
SPECIAL TERMSAND CONDmONS
(30)calendardayswrittennoticeto the Contractor if terminated forthe
convenience of the AUTHORITY.
2. The AUTHORITY may terminate this Agreement and be relievedofany
paymentsexceptasprovidedforunderearly termination shouldtheContractor
failtoperfonnthe requirements of this Agreement at the timeandin themanner
herein provided.In the eventof such termination,the AUTHORITY mayproceed
withtheworkin anymannerdeemedproperbythe AUTHORITY.AIlcoststo
the AUTHORITY shall be deducted fromanysumduetheContractorunderthis
Agreement andthe balance,if any,shall be paidtothe Contractor upondemand.
D.EARLY TERMINATION OFTHIS AGREEMENT OR SUSPENSION OFTHIS
AGREEMENT
General Conditions
I.In theeventthis Agreement is terminated,suspended,or aWorkPlanis
terminated forthe convenience of the AUTHORITY,theContractorshallbe paid
forthe percentage of thework completed.relativeto thetotalworkeffortcalled
forunderthis Agreement,andfor termination costs.Nobillablecostswillbe
considered payableunderthe Agreement during suspension.
2. Within30daysof thedatethe Contractor isnotifiedof theearly termination of
Work Planes)issuedagainstthis Agreement forthe convenience of the
AUTHORITY,the Contractor shallprepareandsubmittotheAUTHORITY's
Contract Manager,for approval,two(2)separate supplemental cost proposals:
a. A final revisedcost proposal forall project-related costsfortherevised
termination date.
b. A cost proposal specifically addressing the termination settlement costs
only.
E.CONTRACTOR'S DELNERABLES UNDER EARLY TERMINATION
TheContractorshallprovideall project-related documents and correspondence required
aspartof the Scopeof WorklDeliverables.Project-related documents shallbe described,
listed.and identified aspartofthefinalrevisedcost proposal.Project-related documents
shallincludeall documents thatarein complete andfinalfonn andwhichhavebeen
accepted as complete by the AUTHORITY,or documents indraftand/orincomplete
fonn forthose deliverables,whicharein progressbytheContractorandhave notbeen
accepted as complete.All documents mustbe received andacceptedbeforethesettlement
costinvoiceis paid.
Cityof Fresno
HSRll-29
Page 3 of 10
EXHffiITD
SPECIAL TERMS AND CONDmONS
F.INVOICE SUBMITIAL UNDER EARLY TERMINATION
Separatefinalinvoicesfor project-related costsandterminationsettlement costs shall be
submittednolater than thirty (30)calendardays after thedatetheContractoris notified
of acceptanceofthefinalcostproposalsbytheAUTHORITY'sContractManager.
Invoicesshall be submittedin accordance with EXHIBIT B.Theinvoice for termination
settlementcostsshallinclude the following,to theextenttheyare applicable:lease
termination costsforequipmentand facilities approvedunderthetermsof this
Agreement;equipmentsalvagecostsfor equipmentvaluedover$500.00;rentalcostsfor
unexpiredleases,lesstheresidualvalueof thelease;cost ofalterationsandreasonable
restorationsrequiredby the lease;settlementexpenses,e.g.,accounting,legal,clerical,
storage,transportation,protection anddispositionof propertyacquiredor producedunder
this Agreement,indirect costs,suchas payrolltaxes,fringebenefits,occupancycosts,
andimmediate supervision costsrelatedtowagesandsalaries,incurred as settlement
costs.
G.TERMINATION ISSUESFOR SUBCONTRACTORS, SUPPLIERS, AND SERVICE
PROVIDERS
The Contractorshallnotifyany Subcontractor and serviceor supplyvendorproviding
servicesunderthisAgreementoftheearly termination dateofthis Agreement.Failureto
notifyany Subcontractor andserviceor supplyvendorshallresultin theContractorbeing
liablefor the termination costsincurredby any Subcontractor andserviceor supply
vendorfor workperformedunderthis Agreement,exceptthosespecificallyagreedto in
the termination noticeto the Contractor.
H. COST PRINCIPLES UNDER EARLY TERMINATION
Terminationsettlementexpenseswill be reimbursed in accordance with 48 CPR,Federal
Acquisition Regulations System,Chapter1,Part31.Subpart 31.20542 (c)dealingwith
initial costsis not applicable to Architectural and Engineering Agreement terminations.
I. DISPUTES UNDER EARLY TERMINATION CONDmONS
Disputesunderearly termination conditions shall be resolvedin accordancewiththis
Exhibit.
J.AUDIT REVIEW PROCEDURES UNDER EARLY TERMINATION
AuditReview procedures shall be in accordance withExhibitD, AuditReview
Procedures,section XN below.
City of Fresno
HSRII-29
Page 4 of 10
EXHIBITD
SPECIAL TERMS AND CONDmONS
K.CONTRACTOR CLAIMS AGAINST THIS AGREEMENT UNDER EARLY
TERMINATION
The Contractor agrees to release the AUTHORITY from any and all further claims for
services performed arising out of this Agreement or its early termination,upon
acceptance by the Contractor of payment in the total amount agreed upon as full and final
payment of its costs from performance and early termination of this Agreement.
L.NON-DISCRIMINATION
This section regarding non-discrimination is in addition to GTC 610.
I.During the performance of this agreement,the Contractor and its Subcontractors
shall not unlawfully discriminate,harass or allow harassment against any
employee or applicant for employment because of sex, race, color,ancestry,
religious creed,national origin,physical disability (including HIV and AIDS),
medical condition (cancer),age,marital status,denial of family and medical care
leave, and denial of pregnancy disability leave.Contractors and Subcontractors
shall insure the evaluation and treatment of their employees and applicants for
employment are free of such discrimination and harassment.The Contractor and
Subcontractors shall comply with the provision of the Fair Employment and
Housing Act (Government Code,Section 12900 et seq.)and the applicable
regulations promulgated thereunder (California Code of Regulations,Title 2,
Section 7285.0 et seq.),The applicable regulations of the Fair Employment and
Housing Commission implementing Government Code,Section 12990 (a-f),set
forth in Chapter 5 of Division 4 of Title 2 of the California Code of Regulations
are incorporated into this Agreement by reference and made a part hereof as if set
forth in full. The Contractor and its Subcontractors shall give written notice of
their obligations under this clause to labor organizations with which they have a
collective bargaining or other agreement.
2.The Contractor shall include the nondiscrimination and compliance provisions of
this clause in all sub agreements to perform work under this clause.
M.RETENTION OF RECORD/AUDITS
1. For the purpose of determining compliance with Public Contract Code Section
10115, et seq.and Title 21,California Code of Regulations,Chapter 21,Section
2500 et seq.,when applicable,and other matters connected with the performance
of the Agreement pursuant to Government Code Section 8546.7,the Contractor,
Subcontractors,and the AUTHORITY shall maintain all books,documents,
papers,accounting records,and other evidence pertaining to the performance of
the Agreement,including but not limited to, the costs of administering the
Cityof Fresno
HSRll-29
PageS of 10
EXHmITD
SPECIALTERMSAND CONDmONS
Agreement.All parties shall make such materials available at their respective
offices at all reasonable times during the Agreement period and for thirty-five
(35)yearsfromthedateof expenditure underthis Agreement.The AUTHORITY,
the State Auditor,or any dulyauthorized representative havingjurisdiction under
any lawsorregulationsshallhaveaccessto anybooks,records,and documentsof
the Contractor that are pertinent to the Agreement for audits,examinations,
excerpts,and transactions,andcopiesthereofshallbe furnished if requested.
2. Anysubagreementinexcessof $25.000.00,enteredintoasa resultof this
Agreement,shall contain all theprovisionsofthisclause.
N. AUDIT REVIEW PROCEDURES
I. Anydisputeconcerninga questionof factarisingunderaninterimor post auditof
this Agreement thatis notdisposedof by agreement shall be reviewedbythe
Project Manager.
2. Not later than 30 days after issuance of an interim or final audit report, the
Contractor may request a review by the Project Manager of unresolved audit
issues.The requestfor reviewwillbe submitted in writingto the ChiefExecutive
Officer.The request mustcontaindetailedinfonnationof the factors involved in
the disputeas wellasjustificationsfor reversal.A meetingby theChiefExecutive
Officer will be scheduled if the Project Manager concurs that further review is
warranted.After the meeting,the ProjectManagerwillmake recommendations to
the Chief ExecutiveOfficer will make the final decision for the AUTHORITY.
The final decision will be made within three (3) months of receipt of the
notification of dispute.
3. Neither the pendency of a dispute nor its consideration by AUTHORITY will
excuse the Contractorfrom full and timely performance,in accordancewith the
termsof thisclause.
CityofFresno
HSRll-29
Page6 of 10
EXHIBITD
SPECIAL TERMS AND CONDITIONS
O.SUBCONTRACTING
Nothing contained inthis Agreement or otherwise,shallcreateany contractual relation
between theStateandany subcontractors,andno subcontract shallrelievethe Contractor
ofhis responsibilities and obligations hereunder.The Contractor agrees to be as fully
responsible totheStatefortheactsand omissions ofits subcontractors andof persons
wither directly or indirectly employed byanyofthemas itisfortheactsand omissions
of persons directly employed bythe Contractor.TheContractor's obligation topayits
subcontractors isan independent obligation from theState's obligation tomake payments
tothe Contractor.Asa result,the Stateshallhaveno obligation to payor toenforcethe
payment ofany moneys toany subcontractor.
P.PURCHASE OF EQUIPMENT
No equipment identified inthis Agreement is approved for purchase.
Q. INSPECI10NOF WORK
The Contractor shallpermitthe AUTHORITY to review andinspecttheproject activities
at all reasonable times during the performance period ofthis Agreement including review
and inspection ona daily basis.
R.SAFETY
1. The Contractor shall comply with OSHA regulations applicable tothe Contractor
regarding necessary safety equipment or procedures.The Contractor shallcomply
with safety instructions issuedbythe AUTHORITY's SafetyOfficerandother
State representatives.The Contractor's personnel shallwearwhitehardhatsand
orangesafetyvestsat all times while working onthe construction projectsite.
2.Pursuant tothe authority contained in Section 591ofthe Vehicle Code,the
AUTHORITY has determined thatwithinsuchareasasarewithinthelimitsof
the project andareopentopublic traffic,the Contractor shallcomplywithallof
the requirements setforthin Divisions 11,12,13,14,and 15ofthe Vehicle Code.
The Contractor shalltake all reasonably necessary precautions forsafe operation
ofits vehicles andthe protection ofthe traveling publicfrominjuryanddamage
fromsuch vehicles.
3. The Contractor musthavea Division of Occupational SafetyandHealth (CAL-
OSHA)pennit(s)as outlined in California LaborCode Sections 6500 and 6705,
City of Fresno
HSRl1-29
Page 7 of 10
EXHmITD
SPECIAL TERMS AND CONDmONS
prior to the initiation of any practice, work, method,operation,or process related
to the construction or excavation of trenches which are five feet or deeper.
S. DAMAGES DUE TO ERRORS AND OMISSIONS
l.Architect-Engineer (A&E)Contractors shall be responsible for the professional
quality, technical accuracy, and coordination of all services required under this
Agreement.A Contractor may be liable for the AUTHORITY's costs resulting
from errors or deficiencies in designs furnished under its Agreement.
2. When a modification to a construction contract is required because of an error or
deficiency in the services provided under this A&E Agreement,the contracting
officer (with the advice of technical personnel and legal counsel) shall consider
the extent to which the A&E Contractor may be reasonably liable..
3. The AUTHORITY's Contract Manager shall enforce the liability and collect the
amount due,if the recoverable cost will exceed the administrative cost involved
or is otherwise in the AUTHORITY's interest. The contracting officer shaI1
include in the Agreement file a written statement of the reasons for the decision to
recover or not to recover the costs from the firm,
T.OWNERSHIP OF DATA
1. Upon completion of all work under this Agreement,all intellectual property
rights,ownership and title to all reports, documents, plans,specifications,and
estimates produced as part of this Agreement will automatically be vested in the
AUTHORITY and no further agreement will be necessary to transfer ownership
to the AUTHORITY.The Contractor shall furnish the AUTHORITY all
necessary copies of data needed to complete the review and approval process.
2. It is understood and agreed that all calculations,drawings and specifications,
whether in hard copy or machine readable form, are intended for one-time use in
the construction of the project for which this Agreement has been entered into.
3. The Contractor is not liable for claims, liabilities or losses arising out of, or
connected with, the modification or misuse by the AUTHORITY of the machine
readable information and data provided by the Contractor under this agreement;
further, the Contractor is not liable for claims, liabilities or losses arising out of,
or connected with, any use by the AUTHORITY of the project documentation on
other projects, for additions to this project, or for the completion of this project by
others,excepting only such use as may be authorized, in writing, by the
Contractor.
Cityof Fresno
HSRll-29
Page8 of 10
EXHIBITD
SPECIAL TERMS AND CONDmONS
4. Anysub agreement inexcessof $25,000.00,enteredintoasa resultof this
Agreement,shall contain allof the provisions ofthis clause.
U.CONFIDENTIALITY OF DATA
1.AU financial,statistical,personal,technical,orotherdataand information
relativeto the AUTHORITY's operations,which is designated confidential by
the AUTHORITY and made available to the Contractor inordertocarryout
this Agreement,shall be protected by the Contractor from unauthorized use
and disclosure.
2.Permission to disclose information onone occasion orpublic hearing heldby
the AUTHORITY relating tothis Agreement shallnot authorize the Contractor
to further disclose such information or disseminate thesameonanyother
occasion.
3. The Contractor shallnot comment publicly tothepressoranyothermedia
regarding this Agreement orthe AUTHORITY's actionson thesame,except
to the AUTHORITY's staff,Contractor'sown personnel involved in the
performance ofthis Agreement,atpublic hearings,orin response to questions
froma Legislative committee.
4.The Contractor shallnotissueanynews release orpublic relations itemofany
nature whatsoever regarding work performed orto be performed underthis
Agreement without prior review ofthe contents thereofby the AUTHORITY
and receiptof the AUTHORITY's written permission.
5. All information related tothe construction estimate is confidential andshallnot
be disclosed by the Contractor toanyentity,otherthanthe AUTHORITY.
V.STATEMENT OF COMPLIANCE
TheContractor's signature affixed hereinanddatedshall constitute a certification under
penalty of perjury underthelawsoftheStateof California thatthe Contractor has,unless
exempt,complied with the nondiscrimination program requirements of Government Code
Section12990andTitle2,California Codeof Regulations,Section 8103.
CityofFresno
HSRII-29
Page9 of 10
EXHIBITD
SPECIAL TERMS AND CONDmONS
W.DEBARMENT AND SUSPENSION CERTIFICATION
1. TheContractor's signature affixedhereinshall constitute a certification under
penalty of peJjury underthelawsoftheStateof California thatthe Contractor or
anyperson associated therewith inthecapacityofowner,partner,director,officer
or manager.
a.Is not currently under suspension,debarment,voluntary exclusion,or
determination of ineligibility byany federal agency;
b. Hasnotbeen suspended,debarred,voluntarily excluded,or determined
ineligible byany federal agency withinthepast three (3)years;
c. Doesnothavea proposed debarment pending;and
d. Hasnotbeen indicted,convicted,or hada civiljudgmentrenderedagainst
it bya courtof competent jurisdiction inanymatterinvolvingfraudor
official misconduct within thepast three (3)years.
2. Any exceptions tothis certification must be disclosed to the AUTHORITY.
Exceptions willnot necessarily resultindenialof recommendation foraward,but
will be considered in determining bidder responsibility.Disclosures mustindicate
thepartyto whom the exceptions applythe initiating agency,andthedatesof
agency action.
X.CONFLICT OF INTEREST
I. Duringthetermofthis Agreement,the Contractor shall disclose any financial,
business,orother relationship with AUTHORITY thatmayhaveanimpactupon
the outcome ofthis Agreement orany ensuing AUTHORITY construction
project.The Contractor shallalsolist current clientswhomayhavea financial
interestin the outcome of this Agreement oranyensuing AUTHORITY
construction projectwhichwill follow.
2. The Contractor hereby certifies thatit doesnotnowhavenorshallitacquireany
financial or business interestthat would conflictwiththe performance of services
underthis agreement.
3. The Contractor andits employees,and all its Subcontractors and employees,shall
comply withthe AUTHORITY's Conflict ofInterest Code.
Cityof Fresno
HSRll-29
Page 10of 10
EXHIBITD
SPECIAL TERMS AND CONDITIONS
4. Anysub agreement inexcessof 525,000.00,enteredintoasaresultofthis
Agreement,shallcontainallofthe provisions ofthisclause.
Y.REBATES,KICKBACKS OR OTHER UNLAWFUL CONSIDERATION
The Contractor warrants that this Agreement was not obtained or secured through
rebates,kickbacks or other unlawful consideration either promised or paid to any
AUTHORITY agency employee.For breach or violation of this warranty,the
AUTHORITY shallhave theright,in its discretion,to terminate this Agreement without
liability,to payonlyfor the valueof thework actually perfonned,or to deductfrom this
Agreement price or otherwise recoverthe full amount of such rebate,kickbackor other
unlawful consideration.
z.PROHIBITION OF EXPENDING STATE FUNDS FOR LOBBYING
1.The Contractor certifies,to thebestof hisorher knowledge andbelief,that:
NoState appropriated funds havebeenpaidor will be paid,byor onbehalfof the
Contractor,to anypersonfor influencing or attempting to influence an officeror
employee of anyState agency,a MemberoftheState Legislature or UnitedStates
Congress,an officeror employee ofthe Legislature or Congress,.or any employee
of a Memberof the Legislature or Congress in connection with the awarding of
any State agreement,the making of any Stategrant,the makingof any State, the
entering into of any cooperative agreement,and the extension,continuation,
renewal,amendment.or modification of any State agreement.grant,loan, or
cooperative agreement.
2.This certification is a material representation of fact upon which reliance was
placed when this transaction was made or entered into.Submission of this
certification is a prerequisite for making or enteringinto this transaction imposed
by Section 1352,Title 31, U.S. Code. Anyperson who fails to file the required
certification shallbe subjectto a civilpenaltyof not lessthan $10,000.00 and not
morethan $100,000.00 foreachsuch failure.
3.The Contractor also agreesby signing this document that he or she shall require
thatthe language of this certification be included in all lowertier sub agreements,
which exceed 5100,000.00,and that all such sub recipients shall certify and
disclose accordingly.
City of Fresno
HSRll-29
Page 1 oi2
EXHIBITE
ADDmONAL PROVISIONS
Supplemental Terms and Conditions for Contracts Using ARRA Funds
1.ARRA FUNDED PROJECT:FtIldIng for Ihis contract has been provided through the American Recovery and
Reinvestment Act (ARRA)of 2009,Pub.L 111-5.All contractors,incluclng both primeand subcontractors,are
subject to audit by appropriate federalor State of California (State)entities.The Statehas the rightto cancel,
terminate, or suspend the contract if any contractor or subcontractor fails to comply with the reporting and
operational requirements contained herein.
2.ENFORCEABILITY:Contractor agrees that if Contractor or one of Its subcontractors fails to comply with all
applicable federal and State requirements governing the use of ARRAfunds, the State may withhold or
suspend,in wholeor in part.funds awarded underthe program,or recovermisspent funds following an audit.
This provision is in addition to all other remecies avaiJable to the Stateunder an applicable Stateandfederal
laws.
3.PROHIBITION ON USE OF ARRA FUNDS:Contractor agrees in accordance with ARRA,section 1604,that
none of 1he funds made available underthis contract may be used forany casino or othergambling establishment,
aquarium,zoo,golf course,or swimming pools.
4.REQUIRED USE OF AMERICAN IRON,STEEL AND OTHER MANUFACTURED GOODS (Buy
America):Contractor agrees that in accordance with ARRA,Section 1606,neither Contractor nor its
subcontractors will use ARRAfundsfor a projectfor the construeIion,alteration,maintenance,or repairof a
public building or ptbIic work unlessall of the iron,steel and manufactured goods used in the project are
produced in the United States in a manner consistent with United States obligations under intematlonal
agreements.The Contractor understands thatthis requirement mayonlybe waivedby the applicable federal
agency in limited situations asset out in ARRA,Section 1605[49 U.S.C.211.405(a»)
5.WAGE RATE REQUIREMENTS:In accordance withARRA,Section 1606,[49 U.S.C.2105(c)(2»the Contractor
assures that it and its subrecipients shaD fuHy complywithsaid Section and notwithstanding anyotherprovision
of law and in a manner consistent withother provisions of ARRA,an laborers and mechanics employed by
contractors and subcontractors on projects funded direetly by or assisted in whole orin part byand through the
federal government pursuant to ARRAshallbe paid wages at ratesnotless than those prevailing onprojectsof a
charactersimilarin the locality as determined bytheUnitedStates Secretary of Laborin accordance with
Subchapter IVofChapter31 of Title40,UnitedStatesCode (Davis-Bacon Act).ItIs understood thatthe
secretaryof labor hasthe authority and functions set forth in Reorganization Plan Numbered 14or 1950 (64
Stat 1267;5 U.S.C.App.)and section3145 ofTiUe 40,UnitedStatesCode.
6.INSPECTIONOF RECORDS:In accordance with ARRA8ectlons 902,1514and1515,Contractor agreesthat It
shallpermitthe State of California,the United StatesComptroller General or his representative orthe·appropriate
Inspector General appointed underSection 3 or 8Gof the United States Inspector General Act of 1978or his
representative to:(1)examine any records that directlypertainto,andinvolve transactions relating to, this
contract;and (2)interviewany offICer or employee ofContractororanyof its 8ubcontraclors regarding the
activitiesfundedwithfunds appropriated or otherwise made available by the ARRA.Contractor shallincludethis
provisionin all of the contractor's agreements with its subcontractors from whomthe contractor acquiresgoods
or services in its execution of the ARRAfunded work.
7.WHISTLEBLOWER PROTEcnoN:Contractor agrees that both it and its subcontractors shallcomply with
section 1553 of the ARRA,which prohibits all non-federal Contractors,including theState,andall contractors of
the State,from discharging,demoting or otherwise discriminating againstan employee for disclosures by the
employee that the employee reasonably believes are evidence of:(1)gross mismanagement of a contract
relatingto ARRA funds;(2)a gross waste of ARRAfunds;(3)a substantial and specificdangerto public health
orsafetyrelatedto the implementation or use of AflRA funds;(4)an abu$e of authorityrelated to
implementation oruse of ARRAfunds;or (5)a violation of law,rule,or regUlation related toanagencycontract
(including thecompetltionforor negotiation of a contract)awarded or Issued relating to ARRA funds.Contractor
agreesthatit and its subcontractors shallpost notice oftherightsand remedies available to employees under
Section 1553of TIde XVof Division A of the ARRA.
Cityof Fresno
HSRll-29
Page 2 of2
EXHIBITE
ADDmONAL PROVISIONS
8.FALSE CLAIMS ACT:Contractor agrees that it shaJI prompIly notifythe State and shall refer 10 an appropriate
federal inspector general any credible evidence thai a principal,employee,agent,subcontractor or other
person has committed a false claimunder the False Claims Act or has committed a criminal or civil violation of
laws pertaining 10fraud,confIicI of interest,bribery,gratuity,orsimDar mlsconduct invoMngARRAfunds.
9. REPORTING REQUIREMENTS:Pursuant to Section 1512of the ARM.inorderforstate agencies receiving
ARRAfunds to preparethe required reports,Contractor agrees to providethe awardingstate agency with the
following infonnation ona monthly(quarterly)basis:
a.The totalamountof ARRAfunds received by Contractorduringthe Reporting Period;
b. The amountof ARRAfundsthatwere expended or obligatedduringthe Reporting Period;
c.A detailedlist ofallprojectsor activities forwhichARRAfundswere expending or obligated,including:
(i.) The name of the project or activity;
(Ii.)A description of the project or activity;
(iii.)An evaluationof the completionstatusof the project or activity; and
(iv.) Anestimate of the numberof jobs createdand lor retainedbythe projector activity;
d Forany contracts equal to orgreaterthan $25,000:
(i.) The nameof the entity receivingthe contract;
(iL) The amount of the contract;
(iiL) The transaction type;
(Iv.)The North American IncIustJy ClassifIcation System (NAlCS)code or catalog of Federal
Domestic Assistance (CFOA)number,
(v.) The Program source;
(v!.) An award title descriptive of the purposeof eachfundingaction;
(vii.)The location of the entJty receiving the contract;
(viii.)Theprimarylocationof the contract,includingthecity, state,congressional districtandcountry;
(ix.) The DUNSnumber,or nameand zip code for the entity headquarters;
(x.) A unique identifier of the entity receiving the contract and the parent entityof Contractor,
should the entity beownedby another;and
(xi.)The namesand total compensation ofthe five most highlycompensated officers of the company if
it received:1)80%or more of its annuaJ gross revenues in Federal awards;2)$25M or more in
annual gross revenue from Federal awards and;3)if the public does not haveaccess 10 information
about the compensation of senior executives through periodic reports filedunder section 13(a)or
15(d)ofthe securities Exchange Act of 1934 or section 6104 of Internal Revenue Code of 1986.;
e.For any contracts of tess than $25,000 or 10 individuals,the information required above may be reported in
the aggregate and requires the certification of an authorized offICer of Contractor that the information
contained in the reportis accurate.
Any other infortnlltlon reasonably requ"'ed by ,he SIaIe of california or required by BIBle or federal
law or regulation.
Standard data elements and federal instructions for use in complying with repOrtIng requIrements underSection 1512
of the ARRA,are pending review bythe federal government,and were published In the Federal Register on April1,
2009(74FA 14824),and are tobe provided online at www.FederalReportlna.gov.The additional requirements will
be added to this contract(s).
CCC-307
CERTIFICATION
I,the official named below,CERTIFY UNDER PENALTY OF PERJURy that J am duly
authorized to legallybind the prospective Contractor to the clause(s)listedbelow.This
certification is made under thelaws of the Stale of California.
ContraetorIBit/der Firm Name (Printed)FederallD Number
By (Authorit.ed Signature)
PrintedName and Title ofPerson Signing
Date Executed Executed in the County of
CONTRAcroR CERTIFICATION CLAUSES
1.STATEMENT OF COMPLIANCE:Contractor bas,unless exempted,complied with
thenondiscrimination programrequirements.(Gov.COde §12990(a-t)andCCR,Title2.
Section 8103)(Not applicable to public entities.)
2.DRUG-FREE WORKPLACE REQUIREMENTS:Contractor will complywith the
requirements of the Drug-Free WOIkplace Actof 1990and will provideadrug-free
workplace by taking the following actions:
a.Publisha statement notifying employees that unlawful manufacture,distribution,
dispensation,possession or useofa controlled substance is prohibited and specifying
actions tobe taken against employees for violations.
b. Establisha Drug-Free Awareness Program to inform employees about:
I)the dangersof drug abuse in the workplace;
2)the person'sor organization's policyof maintaining a drug-free workplace;
3)anyavailable counseling,rehabilitation and employee assistance programs;and,
4) penalties that maybe imposed upon employees for drug abuse violations.
c. Everyemployeewhoworkson the proposed Agreement will:
1)receive a copyof the company's drug-free workplace policy statement;and,
2)agree to abideby the terms of the company's statementasa condition of employment
on the Agreement.
Failure to comply with these requirements mayresult in suspension of payments under
theAgreementor termination of the Agreement or both and Contractor maybeineligible
forawardof any future State agreements if the department determines that anyof the
following has occurred:the Contractor basmadefalse certification,or violatedthe
eatification byfailingto carry out the requirements as noted above.(Gov.Code §8350 et
seq.)
3.NATIONALLABOR 1m.ATIONS BOARDCERTIFICATION:Contractor certifies
that no more than one (1)final unappealable finding of contempt of courtby a Federal
court bas been issued against Contractorwithin the immediately preceding two-year
periodbecause of Contractor's failure to oomplywith an order of a Federal court,which
orders Contractor to complywithanorder of the NationalLabor Relations Board.(Pub.
ContractCode §10296)(Not applicable to publicentities.)
4.CONTRACTS FORLEGAL SERVICES $3000 OR MORE-PRO BONO
REQUIREMENT:Contractorhereby certifies thatoontractor willcomplywith the
requirements ofSection 6072 of theBusiness and Professions Code.effective January 1.
2003.
Contractor agrees to makea good faith effort to provide a minimum numberof hoursof
pro bono legalservices during each year of the oontraet equal to the lessor of 30
multipliedby the number of full time attorneys in the fum's offices in the State.with the
numberofhours prorated on an actual daybasisforany contract period of less than a full
yearor 10%of its contract withtheState.
Failure to make a good faith effort maybecausefor non-renewal of a state contractfor
legal services,and maybe taken into account when defennining the awardof future
oontracts withtheStatefor legal services.
5.EXPATRIATE CORPORATIONS:Contractor bercbydeclares thatit is notan
expatriate corporation or subsidiary of an expatriatecorporation within the meaning of
PublicContract Code Section10286 and 10286.1,and is eligible to contractwiththe
State of California.
6.SWEATFRRB CODE OF CONPUCf:
a.All Contractors contracting forthe procurement or laundering of apparel,garments or
correspondiag accessories.or the procurement of equipment,materials,or supplies,other
than procurement related to a publicworks contract,declareunderpenalty of perjury that
no apparel.garmentsor corresponding accessories.equipment,materials,or supplies
furnished to the state pursuant to the contracthavebeen laundered orproduced in whole
or in part by sweatshop labor,forcedlabor,convictlabor.indentured labor under penal
sanction.abusive fODDS of childlaboror exploitation of children in sweatshop labor.or
with the benefit of sweatshop labor.forcedlabor.convictlabor.indentured laborunder
penal sanction,abusivefonns ofchildlaboror exploitation of children in sweatshop
labor. Thecontractor further declares underpenaltyofperjurythatthey adhere to the
Sweatfree Code of Conductas set forthon the CaliforniaDepartmentof Industrial
Relationswebsitelocatedat www.dir.ca.gov.andPublicContractCodeSection6108.
b.The oontractoragrees tocooperatefully in providing reasonable access to the
contractor'srecords,documents,agentsor employees.orpremises ifreasonablyrequired
byauthorizedofficials of the oontracting agency.the Department ofIndustrialRelations,
or the Department of Justiceto determine the contractor's compliance with the
requirements under paragraph (a).
7.DOMESTIC PARTNERS:For contracts over$100.000 executed oramended after
January I,2007,the contractor certifies that contractor is in compliancewithPublic
Contract Code section 10295.3.
DOING BUSINESS WITH THESTATEOF CALIFORNIA
The followinglawsapply to personsor entitiesdoingbusinesswith the Stateof
California
1.CONFLIcr OF INTEREST:Contractor needs to be awareof thefollowingprovisions
regarding currentorformerstate employees.IfContractor basanyquestionson the
status of any person rendering services orinvolvedwith the Agreement,the awarding
agencymust be contactedimmediatelyfor clarification.
Cwrent StateEmployees(Pub.Contract Code §10410):
1).No officeror employeeshallengagein any employment,activityor enteIprise from
which the officeror employeereceives compensation or has a financialinterest and
whichis sponsored orfundedby any state agency,unless the employment,activity or
enterprise is required as a condition of regular state employment.
2). No officeror employee shallcontracton his or her own behalf as anindependent
conttaetor withanystateagencyto providegoodsor services.
FormerStateEmployees(Pub.ContractCode §10411):
1).For the two-year period from thedate he or she leftstateemployment,no formerstate
officeror employeemayenterintoa contractin whichheor she engagedin any of the
negotiations,transactions,planning,ammgementsor any part of thedecision-making
process relevantto thecontractwhileemployed in anycapacityby anystateagency.
2).For the twelve-month period from the date he or she left stateemployment,no former
stateofficeroremployeemayenterinto a contractwithanystateagency if he or shewas
employedby that stateagencyin a policy-making position in the same generalsubject
area as the proposedcontractwithin the 12-monthperiod priortohis orher leavingstate
service.
If Contractorviolatesanyprovisionsofabove paragraphs,suchactionby Contractorshall
renderthisAgreementvoid.(Pub.ContractCode §10420)
Membersof boardsandcommissionsareexemptfromthissection if theydo notreceive
paymentotherthanpayment of eachmeetingof the board or commission,paymentfor
preparatorytimeandpaymentfor per diem.(Pub.ContractCode §10430(e)
2. LABOR CODF!WOBKERS'COMPENSATION:Contractor needs to be aware of the
provisionswhich require everyemployer to be insured against liabilityfor Worker's
Compensation or to undertake self-insurancein accordance with theprovisions,and
Contractor affions to complywithsuchprovisions befOJe commencing theperformance
of die work of 1his AgreemenL (Labor Code Section 37(0)
3.AMERICANS WITH DISABILffffiS Acr:Contractor assures the State that it
complies widl the Americanswith Disabilities Act(ADA)of 1990.which prohibits
discrimination on thebasis of disability,as wellas all applicablereplations and
guidelinesissued pursuantto the ADA.(42U.S.C.12101 et seq.)
4.CONTRACIQR NAME CHANGB:An amendmentis IeqUimI to change the
Contractor's name as listed on 1his AgreemenL Upon receipt of legal documentation of
die name change the State will process the amendmenL Payment of invoicespresented
with a new name cannot be paidprior to approval of said amendmenL
5. CORPORATE OllAl.1FICATIONS TO 00 BUSINESSINCALIFORNIA:
a. When agreements are to be performed in die state by corporations,the contracting
agencieswill be verifying that thecontractoris currentlyqualified to do businessin
Californiain order to ensure thatall obligations due to thestate are fulfilled.
b. "Doingbusiness"is defined in R&TC Section 23101 as activelyengaging in any
transaction for the purpose of fmancialor pecuniary gainor profit. Althoughthere are
somestatutory exceptions to taxation,rarely willa corporate contractor perfonning
within the state not be subjectto thefranchisetax.
c.Both domesticandforeign corporations (those incorporated outside of California)must
be in goodstanding in order to be qualified todo business in California. Agencieswill
detennine whether a corporation is in good standingby calling the Office of the Secretary
of State.
6.RESOLUTION:A county,city,district,or otherlocalpublicbodymust provide the
State with a copy of a resolution,order.motion,or ordinance of the local governingbody
which bylaw bas authority to enter into an agreement,authorizing execution of the
agreement
7.AIR OR WATER POLLmON YIOLATION:Under the State laws, the Conttaetor
sball not be: (1) in violation of any order or resolution not subject to review promulgated
by the State Air ResourcesBoard or an air pollution control district;(2)subject to cease
and desist order not subject to reviewissued pursuant to Section 13301 of the Water
Code for violation of wastedischarge requirements or dischargeprohibitions;or (3)
finallydetermined to be in violation of provisions of federallawrelating to air or water
pollution.
8. FAYEEDATA RECORDFORM SID.204:Thisformmust becompletedby all
contractors that arenot anotberstate agencyor other governmental entity.
This page intentionally left blank.
PU8UCWORKS DEPARTMENT
March 1,2012
Mr.TonyVaJdez,CCM
Parsons Brinck8rhoff
2329 Gateway Oaks Drive
Suite 200
Sacramento,CA 95833-4231
SUBJECT:Cost Estimate for PNparation of Master Cooperative Agreement for the Califomia
High-Speed Rail Project through the Cityof Fresno
Dear Mr.Valdez:
This letter is in response to your request foran estimate of staff C08I8 that the Citywill incuras
we work together to aaft the Master CoopeIative Agreement for the high speed rail project.Ata
meeting on February 28"staffestimated the amount of time n~to have the Agreement
ready for approval by theCily and theC8lJfomIa·HJgh-Speed RaiI.Authority.
The cost detennination is based an the following:
1.Preparation of the draft agreement.
2.Staff negotiations with HSR staff and its consuItantI regarding terms,content,and form
of the Agreement.
3.Review of the Agreement by the City's RiIk Manager
4.Preliminary and pre-pIan ct-=k review of confIioIs with City owned utilities.sanitary
sewer,water,and fiberoptic network.
5.Review of the Agreement by the City AtIomey's Office.
6.Right of way verification (prior rights)information needed by the deeignJbulid contractor's
requiring staff involvement in City records researoh,copy and delivery costs.
7.0veraU oversight of the agreement development proce88 bythe City Engineerand City
Traffic Engineer.
8.Costs related to publications and notices.
9.Staff costs incurred by the City Finance DeparIrne(It·1n budgeting and preparingrequired
Appropriations Resolutions related to staffing.
10. Staff preparation of the report tolle·aty Council.including legal review and presentation
for approval.
11.Consultant costs incurred by the Cityfora special consultant hired specifically to assiSt
staff in crafting the Agreement
I
Page 2
Mr.Tony Valdez
After caJ8fuI consideration of aI the potential aspects of an agreement for a project of this
magnitude,staff determined that the best estimate of City incurred costs for an agreement
ready to be signed by the CaIfomia ~Rail AuIhority is $295,000.
If you have any questions regarding this maller,please contacI Mr.David Cisneros at
(559)621-8804.
Sincerely.
~~P---y=-
Scott L Mozier,P.E.
Assistant DiI8dor/City Engineer
C:Bran BanueIoe,A8liatant DIrector,PubUcWorks
Scott Tyler,P.E.,CIty Traffic Engineer
David Cisneros,Public Works·Manager
Robert Andersen.P.E..Assistant·Director,Public Utilities
cart Kassabian,P.E.,Consultant
2
ATTACHMENT 1•COST PROPOSAUTIMElINE
7
Project Timeline
The Cityof Fresno
Street Construction
Underaround UtIlIties
Conflict Review
HSR11-29
SCOPE OF WORK
1.MamerAgreemem
1.1 Risk Management
A. RiskAnalysis
1.2 LegalServices
A.Review and re-review of Agreement by City Attorney's Office
B.Review of reports prepared bystaffforCity Council consideration
1.3 Project Meetings
A.Publications,project meetings.and notices
B.Staff participation in project meetings
1.4 City Staff Effort
A.Preparation of draft agreement
B.Negotiations with HSR staff and consultants regarding tenns,content and
form of Agreement
C.Verification of existing rights ofway Information requested by designlbuild
contractors
D."Staff effortbytheCity's Finance and Public Works Departments in
budgeting and preparing Appropriations Resolutions
E.Overall oversight of the agreement development process by theCity
Engineer andCity Traff'1C Engineer
F.Preparation of various City Council Reports,including Council
presentation
G.Attend design coordination meetings
2. Prior Rights
2.1 Street Construction
A.Review of DesIgn for conformance toCity Standards
B.Plan review and approval
C.Studyvehicle Circulation Impacts
D.Street rights ofway analysis
2.2 Underground Utilities
A.Analyze City owned utilities within HSR RIW which shall remain under
City ownership
B.Analyze easements containing utilities which shall remain withthe City
EXHIBIT A
1
Cityof Fresno
HSRll-29
Page2 of3
EXHIBIT A
SCOPEOFWORKAND DELIVERABLES
m.SCOPEOFWORK
1.Agreement
1.1 Risk Management
A.Risk Analysis
1.2 LegalServices
A. Reviewand re-review of Agreement byCity Attorney'sOffice
B.Review of reports prepared bystafffor CityCouncil consideration
1.3 ProjectMeetings
A.Publications,project meetings,andnotices
B. Staff participation inproject meetings
1.4 CityStaffEffort
A.Preparation of draft agreement
B.Negotiations withHSRstaffand consultants regarding terms,contentand
formof Agreement
C.Verification ofexistingrightsof way information requested by designlbuild
contractors
D.StaffeffortbytheCity's Finance andPublicWorks Departments in
budgetingand preparing Appropriations Resolutions
E.Overall oversight ofthe agreement development processbytheCity
EngineerandCity Traffic Engineer
F.Preparation of various CityCouncil Reports,including Council
presentation
G.Attenddesign coordination meetings
2.PriorRights
2.1 Street Construction
A.Review ofDesignfor coeformance toCity Standards
B. Planreviewand approval
C. Study vehicle Circulation Impacts
D. Streetrightsof way analysis
2.2 Underground Utilities
A.AnalyzeCityowned utilities withinHSRRIWwhichshallremainunder
City ownership
B.Analyze easements containing utilitieswhichshallremainwiththeCity
City of Fresno
HSRll-29
Page3 of3
EXHIBIT A
SCOPEOFWORKAND DELIVERABLES
3.Project ConflictswithExisting Infrasuueture
3.1 ConflictReview
A.Preliminary and pre-plancheckreviewof conflictswithCityowned
utilities.sanitary sewer.water.and fiber opticnetwork
B.Analyze vehicularcirculation conflicts with construction
4.Consultant Selection
4.1 SelectionofSpecial Consultantls toAssist in Development of Master Cooperative
Agreement
A.Analyze consultantls wode schedule
B.Determine consultantls costsandfees
C.Interview and hire consultants forplanchecking
City of
r~~~...~I~
r"IG-.i#;~~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.I o:aOarf'\C
COUNCIL MEETING 05/17/12
~
DEPARTMENT DIRECTOR
FROM:
BY:
CITY MANAG
PATRICK N. WIEMILLER, Director
Public Works Department
EFREN BANUELOS, Assistant Director r:f7
Public Works Department, Capital Management Division
LALKUMAR GOONAWARDENA,Design Services Manager Jf'>J /'
Public Works Department, Capital Management Division x;r
SUBJECT:1. ADOPT FINDING OF CATEGORICAL EXEMPTION PER STAFF
DETERMINATION,PURSUANT TO SECTION 15301 CLASS 1 (c) OF THE
CEQA GUIDELINES, FOR THE ASHLAN AVENUE GRIND AND OVERLAY
FROM BLACKSTONE AVENUE TO FIRST STREET PROJECT
2. AWARD A CONSTRUCTION CONTRACT WITH AGEE CONSTRUCTION
CORPORATION OF CLOVIS, CALIFORNIA, IN THE AMOUNT OF $607,097
FOR THE ASHLAN AVENUE GRIND AND OVERLAY FROM BLACKSTONE
AVENUE TO FIRST STREET PROJECT, BID FILE 3155 (LOCATED IN
COUNCIL DISTRICTS NO.4 AND 7)
RECOMMENDATIONS
Staff recommends that the City Council:
1. Adopt finding of Categorical Exemption per staff determination,pursuant to
Section 15301 Class 1 (c) of the California Environmental Quality Act (CEQA) Guidelines for the
Ashlan Avenue grind and overlay from Blackstone Avenue to First Street Project.
2. Award a construction contract in the amount of $607,097 to Agee Construction Corporation of
Clovis, California, as the lowest responsive and responsible bidder for the Ashlan Avenue grind
and overlay from Blackstone Avenue to First Street Project, and authorize the Public Works
Director or his designee to sign the contract on behalf of the City.
EXECUTIVE SUMMARY
The City of Fresno is proposing to overlay Ashlan Avenue from Blackstone Avenue to First Street.
The proposed asphalt overlay will correct existing deteriorated pavement conditions, increase the life
of the pavement and provide a smooth riding surface for motorists at a reasonable cost
Staff recommends that City Council adopt the finding of a categorical exception and award a
construction contract in the amount of $607,097.00 to Agee Construction Corporation of Clovis,
California, as the lowest responsive and responsible bidder, for the Ashlan Avenue grind and overlay
REPORT TO THE CITY COUNCIL
Award a contract to Agee Construction
May 17, 2012
Page 2
from Blackstone Avenue to First Street Project, and authorize the Public Works Director or his
designee to sign the contract on behalf of the City.
BACKGROUND
This project will rehabilitate the street pavement on Ashlan Avenue from Blackstone Avenue to First
Street. The scope of the project includes asphalt paving, upgrading the existing wheelchair ramps to
current ADA standards, replacement of damaged traffic signal detector loops and re-striping. The
project was adopted by the City Council in the Department of Public Works Fiscal year 2011 Budget
and is funded by a Regional Surface Transportation Program life line grant in the amount of $673,511
and Proposition 1B in the amount of $70,100.
Public Works staff prepared Plans and Specifications and a Notice Inviting Bids was advertised in the
Fresno Business Journal and posted on the City's website on February 8, 2012. Seven building
exchanges were sent Notices Inviting Bids, and the bid documents were distributed to thirty eight (38)
prospective bidders. Eight (8) sealed bids were received and opened in a public bid opening on
March 22, 2012. Bid proposals ranged from $607,097 to $701,107. Agee Construction Corporation of
Clovis, California, submitted the lowest bid in the amount of $607,097, and was determined to be the
lowest responsive and responsible bidder. The apparent low bid price was 6.3 percent below the
Engineer's Estimate. Bids will expire sixty-four (64) days after the bid opening.
ENVIRONMENTAL FINDING
Staff performed a preliminary environmental assessment of this project and has determined that it falls
within the Categorical Exemption set forth in CEQA Guidelines, Section 15301 Class 1 (c) which
exempts the repair and maintenance of existing facilities that involves negligible or no expansion of an
existing use. This exemption applies because this project involves the resurfacing of an existing
roadway and does not involve the expansion of the roadway to accommodate additional traffic. The
purpose of the project is to increase life of the pavement and provide a smooth riding surface for the
motorists. Furthermore, staff has determined that none of the exceptions to Categorical Exemptions
set forth in the CEQA Guidelines, Section 15300.2 apply to this project.
CITY COUNCIL OPTIONS
The City Council may take the following actions:
1. Adopt finding of Categorical Exemption per staff determination, pursuant to Section 15301 Class
1(c) of the CEQA Guidelines, for the Ashlan Avenue grind and overlay from Blackstone Avenue to
First Street Project.
Award a construction contract in the amount of $607,097 to Agee Construction Corporation of
Clovis, California, as the lowest responsive and responsible bidder, for the Ashlan Avenue grind
and overlay from Blackstone Avenue to First Street project, and authorize the Public Works Director
or his designee to sign the contract on behalf of the City; or
2. Reject all bids.
REPORT TO THE CITY COUNCIL
Award a contract to Agee Construction
May 17, 2012
Page 3
The project will be completed within thirty (30) working days from the date of the Notice to Proceed.
However, in the event all bids are rejected a minimum of sixty (60) days are required to rebid this
project.
FISCAL IMPACT
Project funding is provided by RSTP life line grant in the amount of $673,511 and Proposition 1B in the
amount of $70,100.
Attachments:
Fiscal Impact Statement
Bid Evaluation
Location Map
PROGRAM:
FISCAL IMPACT STATEMENT
PW00574,ASHLAN AVENUE GRIND AND OVERLAY FROM
BLACKSTONE TO FIRST
RECOMMENDATION
Direct Cost
Indirect Cost
TOTAL COST
Additional
Revenue or Savings
Generated
Net City Cost
Amount Budgeted
(If none budgeted,
identify source)
TOTAL OR
CURRENT
$607,097.00
$92,700.00
$699,797.00
PW00574
ANNUALIZED
COST
Indirect costs consist of the following:
Contract Administration
(Const. Manage., Surveying,Inspection,
Contract Compliance and material testinq)
Contract Engineering Support
Contract Contingencies
TOTAL
$60,700.00
$1,500.00
$30,000.00
$92,200.00
EVALUATION OF BID PROPOSALS
FOR: ASHLAN GRIND AND OVERLAY FROM BLACKSTONE TO FIRST
BIDDERS
1. Agee Construction Corporation
1039 Hoblitt Ave.
Clovis, CA 93612
2 Witbro Inc. dba Seal Rite Paving &Grading
959 Clovis Ave.
Clovis, CA 93612
3. Yarbs Grading and Paving Inc.
PO Box 87
Fowler, CA 93625
4. Steve Dovali Construction Inc.
8461 E. Olive Ave.
Fresno, CA 93737
5. Dave Christian Construction Company Inc.
2233 S.Minnewawa Ave.
Fresno, CA 93727
6. Granite Construction Company
585 West Beach Street
Watsonville,CA 95076
7. Menefee Construction
PO Box 129
Selma, CA 93625
8. Papich Construction Company
800 Farroll Road
Grover Beach, CA 93433
Page 1
Bid File No.3155
Bid Opening: 03/22/12
BID AMOUNT
$607,097.00
$614,2880.00
$617,429.00
$644,734.05
$667,657.95
$686,569.00
$695,008.90
$701,107.00
Each bidder has agreed to allow the City sixty-four (64) days from date bids are opened to accept or reject their bid
proposal. Purchasing requests that you complete the following sections and return this bid evaluation to the
Purchasing Division at the latest by Wednesday,April 11 ,2012,5:00 P.M.
The Engineer's Estimate/Budget Allocation for this expenditure is $648,486. The contract price is 6.3% below the
Engineer's Estimate.
BACKGROUND OF PROJECT (To be completed by Evaluating Department/
Division. Explain need for project/equipment):
This project is to rehabilitate Ashlan Avenue pavement from Blackstone Avenue to FirstStreet. Scope ofthis project
includes asphalt pavement grinding and overlaying with asphalt concrete to an average thickness 0.2', upgrading
wheelchair ramps to current ADA standards, replacing damaged traffic signal detector loops and restriping.
K:\FORMS\EVALUATIONWITH DBEWPD
EVALUATION OF BID PROPOSALS
FOR: ASHLAN GRIND AND OVERLAY FROM BLACKSTONE TO FIRST
DEPARTMENT CONCLUSIONS AND RECOMMENDATION:
Page 2
Bid File No.3155
Bid Opening: 03/22/12
[2g Award a contract in the amount of $607,097.00 to Agee Construction Corporation of Clovis
California
Remarks:
U Reject all bids. Reason:
Department Head Approval
A DBE goal of ~%was established for this project. The recommended Contractor complied with the DBE
requirements pursuant to the bid specifications.
DBE Program Coordinator
~Approve Dept. Recommendation U Approve Finance/Purchasing
Recommendation
U
U
Disapprove
See Attachment
U Disapprove
FINANCE DEPARTMENT CITY MANAGER
~~yanager or Designee
{r¥~
ate
K:\FORMS\EVALUATIONWITH DBEWPD
Vicinity Map
N
A
This page intentionally left blank.
City of
~~~~...~\I~
r ....-==~;~~~REPORT TO THE CITY COUNCIL
May 17, 2012
AGENDA ITEM NO.IO::30sN'\D
COUNCIL MEETING:05117/2012
APPROVED BY
DEPARTMENT DIRECTOR
CITYMANAGE~~
FROM:
THROUGH:
BY:
SUBJECT:
MARK SCOTT, Interim Director
Development and Resource Management Department
KEITH BERGTHOLD,Assistant Director
Development and Resource Management Department
JOSEPH W. OLDHAM,Sustainability Manager ~tI!~
Sustainable Fresno Division,Development and 1source Management Department
DOCUMENTS PERTAINING TO EXPANSION OF THE FRESNO REGIONAL
COMPREHENSIVE RESIDENTIAL RETROFIT PROGRAM UNDER EXISTING CONTRACT
NO.400-09-032 WITH THE CALIFORNIA ENERGY COMMISSION.
1.ADOPT THE 75th AMENDMENT TO THE ANNUAL APPROPRIATION
RESOLUTION NO.2011-133 APPROPRIATING $500,000 OF U.S.
DEPARTMENT OF ENERGY,ENERGY EFFICIENCY AND CONSERVATION
BLOCK GRANT FUNDING FROM THE CALIFORNIA ENERGY COMMISSION
FOR IMPLEMENTATION OF THE FRESNO REGIONAL COMPREHENSIVE
RESIDENTIAL RETROFIT PROGRAM IN FRESNO,MADERA,KERN,TULARE,AND
KINGS COUNTIES
RECOMMENDATIONS
Staff recommends that the City Council adopt the 75
th Amendment to the Annual Appropriations Resolution
(AAR)No.2011-133 appropriating $500,000 of U.S Department of Energy,Energy Efficiency and
Conservation Block Grant funding from the California Energy Commission for implementation of the Fresno
Regional Comprehensive Residential Retrofit program in Fresno, Madera, Kern, Tulare and Kings Counties.
EXECUTIVE SUMMARY
On June 17, 2010, the City Council authorized the Director of the Development and Resource Management
Department under Resolution 2010-123 to enter into an intergovernmental agreement with the California
Energy Commission (CEC) to implement a comprehensive residential retrofit program called the Fresno
Regional Comprehensive Residential Retrofit (FRCRR)program across multiple counties in the San Joaquin
Valley. The Resolution also authorized the Director to "execute and deliver such applications, instruments,
contracts, agreements, MOU's, amendments, and related documents as are reasonably required to implement
and carry out the specified in the Program".Contract No.400-09-032 was finalized between the City of Fresno
and the California Energy Commission on October, 13, 2010.Originally funded at $1.9 million and covering
Fresno and Kern Counties, the program was expanded in October, 2011 to cover four counties, Fresno,
Tulare, Kings, and Kern with a total of $2.4 million in funding. The FRCRR program provides free in-home
energy assessments for homeowners and free Building Performance Institute (BPI)certification training for
contractors.
REPORT TO THE CITY COUNCIL
Adopt 75
th Amendment to AAR No. 2011-133 for Contract 400-09-032
May 17,2012
Page 2
On April 11, 2012, the California Energy Commission made available another $500,000 in added funding for
expansion of the FRCRR program into Madera County and to address increased homeowner demand for
energy assessments that threatened to end the program prior to contract expiration in June, 2012.
Because the funding has an extremely short spending window and Resolution 2010-123 authorized the Interim
Director of the Development and Resource Management Department to sign the contract amendment for the
additional $500,000 in funding from the CEC without further City Council action which was confirmed with the
City Attorney's office, staff recommends that the City Council adopt the 75
th Amendment to the Annual
Appropriations Resolution (AAR) No. 2011-133 appropriating $500,000 of U.S Department of Energy, Energy
Efficiency and Conservation Block Grant funding from the California Energy Commission for implementation of
the Fresno Regional Comprehensive Residential Retrofit program in Fresno, Madera, Kern, Tulare and Kings
Counties.
BACKGROUND
On June 17, 2010, the City Council authorized the Director of the Development and Resource Management
Department under Resolution 2010-123 to enter into an intergovernmental agreement with the California
Energy Commission (CEC) to implement a comprehensive residential retrofit program called the Fresno
Regional Comprehensive Residential Retrofit (FRCRR) program across multiple counties in the San Joaquin
Valley. The Resolution also authorized the Director to "execute and deliver such applications, instruments,
contracts, agreements, MOV's, amendments, and related documents as are reasonably required to implement
and carry out the specified in the Program".Contract No. 400-09-032 was finalized between the City of Fresno
and the California Energy Commission on October,13,2010.Originally funded at $1.9 million and covering
Fresno and Kern Counties, the program was expanded in October, 2011 to cover four counties, Fresno,
Tulare, Kings, and Kern with a total of $2.4 million in funding. The FRCRR program provides free in-home
energy assessments for homeowners and free Building Performance Institute (BPI) certification training for
contractors.
The FRCRR program has become a huge success with over 900 homes receiving the free Home Energy
Rating System (HERS) testing and one hundred (100) contractors trained to receive Building Performance
Institute certification. Demand for the home testing portion of the program called the "Home Tune-up" program
has risen to 250 to 300 calls for surveys per month and the program is on track to complete over 1,600 surveys
before the end of June, 2012 when the current contract with the CEC expires. Based on a recent poll of
homeowners who have used the "Home Tune-up" program, there is a 3.5 to 1 direct economic multiplier to the
local economy from the program through increased contractor business and equipment sales. The energy
savings per home ranges from 10 to 30+% with over 37% of homeowners who receive the testing taking action
to reduce energy use in their homes.
Because the Home Tune-up program has been very successful in getting participation from homeowners and
due to availability of funding from other programs in the state that have not performed well, the CEC approved
adding another $500,000 in funding to the FRCRR program at their business meeting on April 11, 2012. The
additional funding amount must be utilized within the original contract term.
The Interim Director of the Development and Resource Management Department was authorized to sign any
amendment to Contract No. 400-09-032 from the California Energy Commission increasing program funding
2
REPORT TO THE CITY COUNCIL
Adopt 75
th Amendment to AAR No.2011-133 for Contract 400-09-032
May 17, 2012
Page 3
without further City Council action, as authorized under Resolution 2010-123 and confirmed with the City
Attorney's Office, thereby facilitating the receipt of added funding for the program near the end of the contract
period.
Program services will continue to be provided using existing City of Fresno Sustainable Fresno Division staff
and contractors until Contract No.400-09-032 expires in June, 2012.
FISCAL IMPACT
All costs associated with the project will be paid for with funding from the California Energy Commission.
There is no impact to the General Fund from this project.
ATTACHMENTS
75th Amendment to the Annual Appropriations Resolution (AAR) No. 2011-133
3
This page intentionally left blank.
RESOLUTION NO._
A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING THE
75th AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION NO. 2011-
133 APPROPRIATING $500,000 OF U.S.DEPARTMENT OF ENERGY, ENERGY
EFFICIENCY AND CONSERVATION BLOCK GRANT FUNDING FROM THE
CALIFORNIA ENERGY COMMISSION FOR IMPLEMENTATION OF THE FRESNO
REGIONAL COMPREHENSIVE RESIDENTIAL RETROFIT PROGRAM IN
FRESNO, MADERA, KERN,TULARE,AND KINGS COUNTIES
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO:
THAT PART III of the Annual Appropriation Resolution No.2011-133 be and is hereby amended
as follows:
Increase/(Decrease)
TO:DEVELOPMENT AND RESOURCE MANAGEMENT
DEPARTMENT
FRCRR (ARRA)$ 500,000
THAT account titles and numbers requiring adjustment by this Resolution are as follows:
FRCRR (ARRA)
Revenues:
Account: 39015 Miscellaneous--Other Revenue
Fund: 20520
Org Unit: 400801
Total Revenues
Appropriations:
Account: 53302 Prof Svcs/Consulting - Outside
53303 Public Relations &Information
Fund: 20520
Org Unit: 400801
Project: EG00004
Total Appropriations
$500,000
$500,000
$ 450,000
50,000
$500,000
THAT the purpose is to appropriate $500,000 of U.S.Department of Energy, Energy
Efficienciy and Conservation Block Grant funding in the Fresno Regional Comprehensive
Residential Retrofit (FRCRR) program.
1 5/2/2012K:IUSERSIOOCSIRESOSIFY 12 AARI12 75th.PR.docx
CLERK'S CERTIFICATION
STATE OF CALIFORNIA }
COUNTY OF FRESNO } ss.
CITY OF FRESNO }
I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing Resolution was
adopted by the Council of the City of Fresno, California, at a regular meeting thereof, held on the
___Day of , 2012
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor Approval:-:--=-'2012
Mayor Approval/No Return:,2012
Mayor Veto:, 2012
Council Override Veto:, 2012
YVONNE SPENCE, CMC
City Clerk
2 5/2/2012K:IUSERSIDOCSIRESOSIFY 12 AARI12 75th.PR.docx
City of
~~~~...~I~
.-....E:~;";S~~REPORT TO THE CITY COUNCIL
April 26, 2012
FROM: PATRICK N. WIEMILLER, Director
Department of Public Utilities
BY:ROBERT N. ANDERSEN, P.E., Assistant Director
Department of Public Utilities
AGENDA ITEM NO.IO:30arf'l E
COUNCIL MEETING 5'/17/J2-
APPROVED BY
DEPART~
CITYMANAGE~~
SUBJECT:CONSIDER AMENDING SECTION 6-804 OF THE FRESNO MUNICIPAL CODE
RELATING TO THE INSPECTION OF BACKFLOW PREVENTION DEVICES
RECOMMENDATION
Staff recommends Council introduce the attached Ordinance amending Section 6-804 of the Fresno Municipal
Code allowing the consumer to choose the company whom will provide the necessary annual Backflow
Prevention Assembly testing.
EXECUTIVE SUMMARY
Staff is requesting a change in the Municipal Code which would allow the Water Systems Manager to provide a
list of companies to provide the testing. The Municipal Code change will set forth the criteria for the approved
testers and the City will compile a list of testing companies and supply this list to the consumers as well as the
date the testing needs to be done. The consumer can also choose another company as long as they have the
necessary experience and certification to perform the tests.
BACKGROUND
The City of Fresno is required by State Law to have all privately owned backflow prevention devices tested on
an annual basis. Current practice in the City of Fresno is to charge a monthly fee for consumers who have
backflow preventers for the maintenance, annual testing and maintenance of these records. Other cities within
the valley require the consumer to provide the annual testing and maintenance of their backflow device.
In water supply systems, water is normally maintained at a significant pressure to enable water to flow from the
tap, shower etc. When pressure fails or is reduced as may happen if a water main bursts, pipes freeze or there
is unexpectedly high demand on the water system, the pressure in the pipe may be reduced and may allow
contaminated water from the ground, from storage or from other sources to be drawn into the system. To
prevent this from occurring, a backflow prevention device is required between the public water system and the
private consumer system.
The State of California Code of Regulations Title 17 requires that at a minimum, the Backflow Assembly needs
to be tested annually and the City Water System is required to maintain records on the testing and
Presented toCity Council
Date 'if,;'"'-~'2.•
Disposition CLb~~~
/-8 6//2/IA
REPORT TO THE CITY COUNCIL
Amending Section 6-804 to the Municipal Code
April 26, 2012
Page 2
maintenance of these devices for a minimum of three years. Since these devices are privately owned, the cost
of testing and maintenance falls to the water consumer.
Staff is -requesting a change in the Municipal Code which would allow the Water Systems Manager to provide a
list of entities to provide the testing. The consumer can also choose another company as long as they have the
necessary experience and certification to perform the tests..
The Municipal Code change will set forth the criteria for the approved testers and the City will compile a list of
testers and supply this list to the consumers as well as the date the testing needs to be done. Not only would
this allow the consumer the flexibility to choose whom they wish to test their backflow assembly, this will also
free up needed personnel in the Water Division to perform other duties.
If this change in the Municipal Code is approved by Council, staff will prepare a request to compile the testing
company list and also change the Master Fee Schedule to reflect the reduction in the testing cost per month.
Staff is planning on retaining an administrative fee to pay for the required maintenance of testing records.
FISCAL IMPACT
None.
BILL NO.
ORDINANCE NO. _
AN ORDINANCE OF THE CITY OF FRESNO,
CALIFORNIA,AMENDING SUBSECTION (b)OF SECTION
6-804 OF THE FRESNO MUNICIPAL CODE,RELATING TO
BACKFLOW PREVENTION DEVICE TESTING
THE COUNCIL OF THE CITY OF FRESNO DOES ORDAIN AS FOLLOWS:
SECTION 1.Subsection (b)of Section 6-804 of the Fresno Municipal Code is amended to read:
(b) Policy.
(l)No water service connection to any premises shall be installed or
maintained by the City of Fresno Water Division unless the water supply is
protected as required in this Ordinance.Service of water to any premises shall be
discontinued by the City of Fresno if a backflow prevention assembly required by
this Ordinance is not installed,tested and maintained,or if it is found that a
backflow prevention assembly has been removed,by passed,or if any cross
connection exists on the premises.Service will not be restored until such conditions
or defects are corrected.Unsafe conditions or defects requiring immediate
discontinuance of service include,but are not limited to direct or indirect
connection between the city water system and a system or equipment containing
toxic chemicals or sewage.
(2) The Consumer's System shall be open for inspection at all
reasonable times to authorized representatives of the Water Division to determine
whether cross-connections or other structural or sanitary hazards,including
violations of these regulations exist. The Water Systems Manager shall deny or
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
immediately discontinue service to the premises by providing for a physical break
in the service line until the consumer has corrected the condition in conformance
with the regulations adopted pursuant thereto. Unsafe conditions or defects shall be
corrected in the time specified in Section 6-802-803(b).
(3) An approved backflow prevention assembly shall be installed on
each service line to a Ceonsumer's watef-..s.system wherever the following
conditions exists:
(i)In the case of premises having an auxiliary water supply.
(ii) In the case of premises containing any actual or potential
hazard to the city water systems.
(iii)In the case of premises having intricate plumbing and piping
arrangements or where entry to all portions ofthe premises is not readily
accessible for inspection purposes.
(4) Where multiple public water services supply a property and one of
the water services requires the installation of an approved backflow prevention
assembly, all services supplying the property must have an approved backflow
prevention assembly installed to protect the public supply from potential cross-
connections of on-site plumbing.
(5) Type of protective assembly required:
(i) In the case of any premises where the public water system is
used to supplement a reclaimed water supply, the city water system shall be
protected by an approved air gap.
(ii)In the case of any premises where there are wastewater
2
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
pumping and/or treatment plants and there is no interconnection with the
potable water system,an approved reduced pressure principle backflow
prevention assembly may be provided in lieu of an air gap if approved by
the city. This does not include a single-family residence that has a sewage
lift pump.
(iii) In the case of any premises where reclaimed water is used
and there is no interconnection with the potable water system,an approved
reduced pressure principle backflow prevention assembly may be provided
in lieu of an air gap if approved by the city.
(iv) In the case of any prernises where hazardous substances are
handled in a manner in which the substances may enter a potable water
system,an approved reduced pressure principle backflow prevention
assembly may be provided in lieu of an air gap if approved by the city. This
does not include a single-family residence that has a sewage lift pump.
(v) In the case of any premises where there are irrigation
systems into which fertilizers,herbicides,or pesticides are, or can be,
injected shall be protected by an approved reduced pressure principle
backflow prevention assembly.
(vi) In the case of any premises where there is an unapproved
auxiliary water supply which is interconnected with the public system, an
approved reduced pressure principle backflow prevention assembly or an
approved double check valve assembly may be provided in lieu of an air
gap if approved by the city.
3
Ordinance Amending 6-804(b) Relating to
Backflow Device Testing
(vii)In the case of any premises where there is an unapproved
auxiliary water supply and there are no interconnections with the public
water system, an approve double check valve backflow prevention
assembly may be approved in lieu of a approved reduced pressure principle
backflow prevention assembly if approved by the city.
(viii)In the case of any premises where the fire system is directly
supplied from the public water system and there is an unapproved auxiliary
water supply on or to the premises (not interconnected).The city system
shall be protected by a double check backflow prevention assembly.
(ix) In the case of any premises where the fire system is supplied
from the public water system and interconnected with an unapproved
auxiliary water supply, an approved reduced pressure principle backflow
prevention assembly may be provided in lieu of an air gap if approved by
the city.
(x) In the case of any premises where the fire system is supplied
from the public water system and where either elevated storage tanks or fire
pumps which take suction from the private reservoirs or tanks are used, an
approved reduced pressure principle backflow prevention assembly may be
provided in lieu of an air gap if approved by the city.
(xi)Temporary water use from fire hydrants requires the
installation of a reduced pressure principle backflow assembly or air gap on
any portable water transportation equipment.
(xii)Premises where the fire system is supplied from the public
4
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
water system and where recycled water is used in a separate system within
the same building,an approved double check valve backflow prevention
assembly may be provided.
(xiii)In the case of any premises where pier hydrants are used for
supplying water to vessels for any purpose,the city system shall be
protected by an approved reduced pressure principle backflow prevention
assembly.
(xiv)In the case of any premises where there are marine facilities,
the city system shall be protected by an approved reduced pressure principle
backflow prevention assembly.
(xv)In the case of any premises where entry is restricted such that
inspections for cross-connections cannot be made with short notice to
assure that cross connections do not exist,the city system shall be protected
by an approved reduced pressure principle assembly.
(xvi)In the case of any premises where there is a repeated history
of cross-connections being established or re-established,the city system
shall be protected by an approved reduced pressure principle backflow
prevention assembly.
(xvii)In the case of any premises where two or more services
supplying water from different street mains to the same building,structure,
or premises through which art interstreet main flow may occur,shall have at
least a standard check valve on each water service to be located adjacent to
and on the property side of the respective meters.Such check valve shall
5
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
not be considered adequate ifbackflow protection is deemed necessary to
protect the city's mains :from pollution or contamination;in such cases the
installation of approved backflow prevention assemblies at such service
connections shall be required.
(xviii) In the case of any premises where there is water or a
substance that would be objectionable but not hazardous to health,if
introduced into the city water system,the city water system shall be
protected by an approved double check valve backflow prevention
assembly.
(xix)In the case of any premises where toxic or objectionable
chemicals are or may be transmitted,stored or used in a manner which may
endanger the water system, an approved air gap separation or an approved
reduced pressure principle backflow prevention assembly shall be installed.
(xx) In the case of any premises where there are "controlled"or
"uncontrolled"cross-connections,either actual or potential,the city water
system shall be protected by an approved air gap separation or an approved
reduced pressure principle backflow prevention assembly at the service
connection.
(xxi) In the case of any premises where, it is impossible or
impractical to make a complete in-plant cross-connection survey, the city
water system shall be protected against backflow from the premises by
either an approved air gap separation or an approved reduced pressure
principle backflow prevention assembly on each service to the premises.
6
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
(6) Any backflow prevention assembly required herein shall be of a
model and size approved by the Water Systems Manager or his designee. The
Water Division shall maintain and provide a list of Approved Backflow Prevention
Assemblies acceptable for installation on city water services.
(7) Internal protection in lieu of service protection.The city reserves the
right to require backflow protection at the ',vater userconsumer's connection or
within the ~onsumer's premises or both.
(8)Location of backflow prevention assemblies.
(i) Air gap separation. An air gap separation shall be located as
close as practical to the u-SeFs-consumer's connection and all piping between
the aser's-consumer's connection and the receiving tank shall be entirely
visible unless otherwise approved in writing by the city.
(ii) Double check valve assembly. A double check valve
assembly shall be located as close as practical to the user's-consumer's
connection and shall be installed above grade,if possible, and in a manner
where it is readily accessible for testing and maintenance.
(iii) Reduced pressure principle backflow prevention assembly. A
reduced pressure principle backflow prevention assembly shall be located as
close as practical to the u-serconsumer's connection and shall be installed a
minimum of twelve inches (12") above grade and not more than thirty
inches (30") above grade measured for the bottom of the device and with
minimum of twelve inches (12") side clearance.
(9)It shall be the responsibility of the consumer at any premises >,vhere
7
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
backflow prevention assemblies are installed to permit certi.fied inspections and
operational tests at least once annually.Backflow prevention assemblies shall be
tested immediately after they are installed,relocated or repaired and not placed in
service unless they are functioning as required.In those instances where the Water
Systems Manager deems the hazard to be great enough,he/she may require
certified inspections at more frequent intervals.It shall be the duty of the Water
Systems Manager to require that these tests are completed in a timely manner.The
Water Systems Manager or his/her representative shall notify the consumer in
advance when the tests are to be undertaken or required.The Water Systems
Manager shall require backflow prevention assemblies be tested and maintained
either by Water Division personnel or by certified backflow assembly testing
companies as follows:
(i)Unless otherwise directed by the Water Systems Manager,it
shall be the responsibility of the consumer at any premises where backflow
prevention assemblies are installed to have cetiified inspections and
operational tests at least once annually or more frequently as may be
required by the Water Systems Manager.Backflow prevention ::.Riese
assemblies shall be tested and maintained repaired or replaced by Water
Division personnel,certified as competent to perform tests and maintenance
by the Water Systems Manager.The consumer shall be responsible for any
costs of testing,repairs or replacement of the backflow prevention
assembly.Fees for tests and repairs or replacement shall be paid by the
consumer as designated in the Master Fee Schedule.Records of such tests,
8
Ordinance Amending 6-804(b)Relating to
.Backflow Device Testing
repairs and replacement shall be submitted and retained in the office of the
Water Systems Manager.
(m If directed by the Water Systems Manager,it shall be the
responsibility of the consumer at any premises where backflow prevention
assemblies are installed to obtain certified inspections and operational tests
at least once annually or as may be required by the Water Systems
Manager.Certified inspection and operation tests must be conducted using
a portable differential pressure test gauge tested for accuracy at least once
annually.Testing must be performed by a backflow prevention assembly
tester,certified by either the American Backflow Prevention Association or
the American Water Works Association,operating under a valid business
license from the City of Fresno. The Water Systems Manager may make
available a non-exhaustive list of certified backflow prevention assembly
testing companies to the consumer.The consumer shall be responsible for
any costs of testing, repairs or replacement of the backflow prevention
assembly. The consumer shall be responsible for submitting all test records
and results to the office of the Water Systems Manager.Fees for
maintenance of records of the testing history of the backflow assemblies
shall be as designated in the Master Fee Schedule.
(10) All presently installedbackflow prevention assemblies which do not
meeting the requirements of this section but were approved devices for the
purposes described herein at the time of installation and which that have been
properly maintained,shall be excluded from these requirements of these rules so
9
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
///
///
/II
///
long as the Water Systems Manager is assured that they will satisfactorily protect
the city water system.Whenever the existing device is moved from the present
location,requires more than minimum maintenance or when replacement parts are
no longer available,or when the Water Systems Manager fmds that the
maintenance constitutes a hazard to health,the unit shall be replaced with an
approved backflow prevention assembly at the customer's expense.
10
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
SECTION 2. This ordinance shall become effective and in full force and effect at 12:01a.m. on
the thirty-first day after its final passage.
**** * * * * * * * * * *
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing
ordinance was adopted by the Council of the City of Fresno, at a regular meeting held on the
__day of ,2012.
AYES
NOES
ABSENT
ABSTAIN
Mayor Approval:',2012
Mayor ApprovallNo Return:,2012
Mayor Veto:,2012
Council Override Vote:,2012
YVONNE SPENCE, CMC
City Clerk
BY:-r-t-r-__
Deputy
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
BY:-----,-_
Shannon L.Chaffin Date:
Senior Deputy City Attorney
SLC:cg-[58568cglord]4/4/12;II:l lam
11
Ordinance Amending 6-804(b)Relating to
Backflow Device Testing
This page intentionally left blank.
City of
E!I!SE!••~I~
.-Inl!--.~,REPORT TO THE CITY COUNCIL
May 3,2012
FROM:
By:
SUBJECT:
AGENDA ITEM NO.Jo:aOam F
COUNCIL MEETING _.51/1 J J 2.-
APPROVED BY
CRAIG SCHARTON, Assis ~~AR~T=M!!:.!EN~T~D~IR~E~CT~O~R_--,.-_
Development and Resource Management J/j /~
CITY MANAGFlf/U4-~
CLAUDIA CAZARES, Division Manag r~~~"'(.-
Housing and Community Development ivision &-<:---0
CORRINA NUNEZ, Project Manage l
Housing and Community Developm t ivisl n
ADOPT FINDING OF CATEGORICAL EXEMPTION, PURSUANT TO ARTICLE 19, SECTION
153321CLASS 32 (IN-FILL DEVELOPMENT), OF THE CALIFORNIA ENVIRONMENTAL
QUALITY ACT GUIDELINES AND APPROVE A $733,025 HOME INVESTMENT
PARTNERSHIPS PROGRAM AGREEMENT WITHFULTON COURT PARTNERS,LLC,
FOR ACQUISITION AND REHABILITATION OF THE FULTON COURT APARTMENTS,A
10-UNIT AFFORDABLE MULTI-FAMILY HOUSING BUNGALOW COURT LOCATED AT
142 N.FULTON AVENUE IN THE LOWELL NEIGHBORHOOD
RECOMMENDATIONS
Staff recommends the City Council:
1)Adopt Finding of Categorical Exemption,Pursuant to Article 19, Section 15332/Class 32 (In-Fill
Development),of the California Environmental Quality Act (CEQA)guidelines;and
2)Approve a $733,025 HOME Investment Partnerships (HOME) Program Agreement,substantially in
the form attached as Exhibit "B" and subject to the City Attorney's prior approval as to form, with
Fulton Court Partners, LLC (Developer),for acquisition and rehabilitation of the Fulton Court
Apartments,a 10-unit affordable multi-family housing bungalow court located at 142 N. Fulton
Avenue (APN: 4:59-303-18), in the Lowell neighborhood (please see Exhibit "C" -Project Location
Map).
EXECUTIVE SUMMARY
On April 15, 2011, the City received a HOME funding proposal from the Developer in response to the City's
HOME Program Notice of Funding Availability (NOFA), published March, 2011. The Developer is proposing to
perform moderate rehabilitation to the interior and exterior of the buildings, and grounds of the Fulton Court
Apartments. If the HOME Agreement is approved as recommended,HOME Program funds in the amount
of $733,025 will be provided to the Fulton Court Partners, LLC, in the form of a 1%percent interest loan
with principal and interest payable from net operating income. The project cost is estimated at $999,187, of
which $733,025 is proposed to be funded with HOME Program funds (73% of the acquisition and rehabilitation
cost). Of the $266,162 needed to complete project financing; $100,000 represents a deferred Developer fee,
$56,162 is from Developer equity, and $110,000 is a loan from the seller.
REPORT TO COUNCIL
HOME PROGRAM AGREEMENT FOR ACQUISITION AND REHABIUTA TlON OF FULTON COURT
May 3,2012
Page 20'3
BACKGROUND
Fulton Court was built in 1942 in a Spanish Revival style and includes ten units within four building
structures that are arranged in a double "L" Plan around an open courtyard (please see Exhibit "E" - Site
Plan). Fulton Court's tree-canopied courtyard fosters a sense of community with the doors and windows
opening onto a shared open space. A low rock wall rests at the entrance to the courtyard separating the
complex from North Fulton Street. Fulton Court sits on a .39-acre (17,000 sq. ft.) parcel and is comprised
of two studio units and eight one-bedroom units, which are in need of rehabilitation (please see Exhibit
"0"-Existing Conditions).
On April 15, 2011, the Developer submitted a HOME Program application requesting HOME Program
funds for acquisition and rehabilitation of Fulton Court. The Developer is proposing to perform moderate
rehabilitation to the interior and exterior of the structures,garages, backyard areas, and courtyard, and
install new appliances.The overall goal of the rehabilitation project is to preserve as much of the unique
architecture of the bungalow court while improving the condition of the City's affordable housing stock
(please see Exhibit "F" - Proposed Rehabilitation).
The project cost is estimated at $999,187, of which $733,025 is proposed to be funded by HOME Program
funds. A summary of the project's budget is shown in the attached Exhibit "A" -Project Cost Information
and Budget. If.the HOME Program funding is approved as recommended, the HOME funds will be
provided to Fulton Court Partners, LLC, in the form of a 1%interest loan, with the principal and interest
payable from net property income.
The estimated completion date of the rehabilitation activities is scheduled for June 1, 2013. Once the
rehabilitation is completed,the units will be affordable to households earning 50% to 55% of the area median
income, or below, for a period of 55 years. The rent for a one-bedroom unit will range from $499 to $643 per
month and the rent for a studio unit will range from $474 to $607 per month. The studio units have 481
square feet of living space and the one-bedroom units have 646 to 659 square feet of living space. The
cost per square foot is estimated at $162 ($999,187/6,160 sq. ft. of living space).
Since the apartment complex is currently 50% occupied, the budget includes a line item for relocation
costs to re-house the existing tenants within the complex. The Developer proposes to rehabilitate the
vacant units first. Once the vacant units are rehabilitated and ready for occupancy, the tenants in the
occupied units will be relocated to the newly rehabilitated units. The current on-site property manager will
continue to serve in this capacity after rehabilitation and will be responsible for maintaining the day-to-day
operations of the complex to ensure on-going compliance with the HOME Program requirements.
The Development team consists of Jeff Altimus and Mike Strausser.Both have over twenty-five years of
real estate and construction contracting experience. Jeff Altimus is the founder and owner of Altimus
Construction, Inc. and Mike Strausser is the founder and owner of Strausser Construction, Inc. Strausser
Construction will serve as the general contractor on this rehabilitation project. The Fulton Court rehabilitation
project will be the development team's second affordable housing project. The team's first affordable housing
project was the rehabilitation of the· College Apartments on North College Avenue in the Fulton/Lowell
neighborhood. Both team members have completed many private and publicly-funded projects, such as
rehabilitation of the Clovis Post Office, shopping centers, and the Catholic Charities office (located across the
REPORT TO COUNCIL
HOME PROGRAM AGREEMENT FOR ACQUISITION AND REHABIUTA TlON OF FULTON COURT
May 3,2012
Page 3 0(3
street from Fulton Court). It was while working on the Catholic Charities project that the development team
decided to submit a proposalto rehabilitatethe Fulton Court apartments.
Once completed, the Fulton Court rehabilitation project will assist the City in meeting its affordable housing
goals as identified in the Housing Element of the 2025 General Plan and the 2010-2014 Consolidated Plan to
HUD, and is part of a larger effort by the City to revitalizethe Lowell neighborhood.
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission recommended approval of the items on April 11,
2012.
ENVIRONMENTAL COMPLIANCE
In anticipation of funding approval and the subsequent commencement of the rehabilitation activities,a
National Environmental Policy Act assessment was completed on January 3, 2012, and resulted in the
completion of a Statutory Worksheet with consultation/mitigated requirements.Also on January 3, 2012,
a CEQA assessment was completed and resulted in a Categorical Exemption,pursuant to Article 19,
Section 15332/Class 32 (In-Fill Development),of the CEQA guidelines (please see Exhibit "G" - CEQA
Exemption Statement).
FISCAL IMPACT
HOME Program funds for the proposed rehabilitation project are available in the Development and Resource
Management Department's Fiscal Year 2012 Budget.
Attachments:
Exhibit A - Project Cost Informationand Budget
Exhibit B - Draft HOME Program Agreement
Exhibit C - Project Location Map
Exhibit D- Existing Conditions
Exhibit E - Site Plan
Exhibit F- Proposed Rehabilitation
Exhibit G - CEQA ExemptionStatement
K:\HOUSING\PROCEDURES MANUAL\CHAPTER 21 HCDC &COUNCIL\Council\STAFF REPORTS\2012HCDC 5-3-12 Fulton Court Project
EXHIBIT "A"
PROJECT COST INFORMATION AND BUDGET
PROJECT COST INFORMATION
Proiect Name:Fulton Court Rehabilitation
Location:District 3: 142 N. Fulton Street
Total No. of Housing Units:10
Total No. of HOME Units:10
Residential Estimates
Gross Square Feet:6,160
Construction (Hard Costs):$522,887
Soft Costs:$172,300
Land Cost:$304,000
Total Development Costs Residential:$999,187
Total Cost Per Unit:$99,919 (rounded up)
Total Cost Per GSF:$162.32
PROJECT SOURCES AND USES OF FUNDS
Sources
City HOME Program Loan
Loan from Seller
Deferred Developer Fee
Developer's Equity
Total
Uses
Land
Soft Costs
Hard Costs
Relocation
Developer Fee
Total
$ 733,025
$ 110,000
$ 100,000
$56,162
$ 999,187
$ 304,000
$ 44,300
$ 522,887
$ 28,000
$100,000
$ 999,187
EXHIBIT "B"
DRAFT HOME PROGRAM AGREEMENT
Recorded at the Request of
and When Recorded Return to:
City of Fresno
City Clerk
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603
(SPACE ABOVE THIS LINE FOR RECORDER'S USE ONL Y)
This Agreement is recorded at the request and for the benefit of the City of Fresno and is
exempt from the payment of a recording fee pursuant to Government Code Section 6103.
By:_
Mark Scott
It's: City Manager
Date:_
CITY OF FRESNO
HOME INVESTMENT PARTNERSHIPS AGREEMENT
by and between
CITY OF FRESNO,
a municipal corporation
and
Fulton Court Partners, LLC
regarding
Fulton Court Apartments Rehabilitation Project
142 Fulton Street, Fresno,California 93701 (APN:459-303-18)
(Fulton/Lowell Area)
TABLE OF CONTENTS
ARTICLE 1.DEFINITIONS 2
ARTICLE 2.TERMS OF THE LOAN 6
ARTICLE 3.REPRESENTATIONS AND WARRANTIES OF DEVELOPER •••.•.••..•..•..•..7
ARTICLE 4.COVENANTS OF DEVELOPER 8
ARTICLE 5.PROPERTY MAINTENANCE 13
ARTICLE 6.DISBURSEMENT OF HOME FUNDS ..............•..••..•••••....•.•..•.•.••.•....••.••••..•..•.16
ARTICLE 7.DEVELOPMENT AND REHABILITATION•....•••••...•.............•..••••••••••••.......•18
ARTICLE 8.PROJECT OPERATIONS 23
ARTICLE 9.INSURANCE AND INDEMNITY 26
ARTICLE 10.DEFAULT AND REMEDIES 29
ARTICLE 11.GENERAL PROVISIONS 31
HOME INVESTMENT PARTNERSHIPS PROGRAM AGREEMENT
This HOME Investment Partnerships Program Agreement (hereinafter referred to as the
"Agreement")is entered into this , 2012, by and between the CITY OF
FRESNO, a municipal corporation, acting through its Development and Resource
Management Department - Housing and Community Development Division (hereinafter
referred to as the "CITY"), and Fulton Court Partners, LLC, a California limited liability
company (hereinafter referred to as "DEVELOPER").
RECITALS
A.The CITY anticipates it will receive HOME Investment Partnerships
Program (hereinafter referred to as "HOME Program") grant funds from the U.S.Department of
Housing and Urban Development (hereinafter referred to as "HUD"), under Title II of the
Cranston-Gonzalez National Affordable Rental Housing Act of 1990, as amended (hereinafter
referred to as the "Act").
B. To advance the supply of Affordable rental housing within the City of
Fresno, the CITY desires, among other things, to encourage private investment in the
affordable rental housing market.
D. The DEVELOPER desires to act as the owner/developer exercismq
effective project control, as to the moderate rehabilitation of the ten (10) unit Fulton Court
Apartments (hereinafter referred to as the "Project"), as more particularly described in the
Project Description and Schedule, attached hereto as EXHIBIT "B" and incorporated herein.
C. The Project will provide for the moderate rehabilitation of the existing ten
(10) unit Fulton Court Apartments, of which ten (10) units will be fixed HOME-assisted
affordable rental housing units at the Property identified in Property Description,attached
hereto as EXHIBIT "A" and incorporated herein.
E. The Project will be rehabilitated on HOME Program eligible Property to be
owned by the DEVELOPER and located within the boundaries of the City of Fresno, as more
particularly described in the Project Description, attached hereto as EXHIBIT "A" and
incorporated herein.
F. To further its goal to increase the supply of Affordable Rental Housing, the
CITY desires to assist the DEVELOPER by providing a total of up to Seven Hundred Thirty
Three Thousand Twenty Five dollars and 00/10Oth ($733,025.00)in annually allocated and
available fiscal year 2012 HOME Program funds for a HOME Program Loan to the Project
(hereinafter referred to as "Loan"), for payment of the HOME Program eligible costs, as further
identified in the Project Budget, attached as EXHIBIT "C" and incorporated herein,variously
secured by the underlying real property and the Affordable Housing covenants, upon the terms
and conditions in this Agreement. The simple interest will be at 1% annually. Principal and
interest will be payable annually at times prior to the Maturity Date and in full upon the Maturity
Date.
1
G. A January 3, 2012,environmental review of the Project pursuant to the
National Environmental Policy Act ("NEPA")guidelines resulted in completion of a Statutory
Worksheet with complete consultation/mitigated requirements.Additionally,a January 3,
2012,environmental review of the Project pursuant to the California Environmental Quality Act
("CEQA")guidelines resulted in an Exemption from the provisions of the CEQA.
H. The CITY has determined that this Agreement is in the best interest of,
and will materially contribute to, the Housing Element of the General Plan. Further, the CITY
has found that the Project: (i) will have a positive influence in the neighborhood and
surrounding environs; (ii) is in the vital and best interest of the CITY, and the health, safety,
and welfare of CITY residents; (iii)complies with applicable federal, state, and local laws and
requirements;(iv) will increase, improve, and preserve the community's supply of Low-Income
Housing available at Affordable Rental Housing cost to Very Low- and Low-Income
households,as defined hereunder; (v) planning and administrative expenses incurred in
pursuit hereof are necessary for the production,improvement,or preservation of Low-Income
Housing;and (vi) will comply with any and all owner participation rules and criteria applicable
thereto.
I. The CITY and DEVELOPER have determined that the Project's HOME
Assisted Units constitute routine programmatic/grantee lender activities utilizing available and
allocated program/grantee funding, outside the reach of California Constitution Article XXXIV
and enabling legislation."
J. On , 2012 the Housing and Community Development
Commission of the City of Fresno reviewed this Agreement and recommended approval.
K. On February 27, 2012 the Fulton Court Partners, LLC's governing
body/managing member reviewed and approved the development and authorized entry of a
HOME Program Project agreement.
NOW,THEREFORE,IN CONSIDERATION of the above recitals, which recitals
are contractual in nature, the mutual promises herein contained, and for other good and
valuable consideration hereby acknowledged,the parties agree as follows:
ARTICLE 1.DEFINITIONS
The following terms have the meaning and content set forth in this Article wherever used in this
Agreement,attached exhibits or attachments that are incorporated into this Agreement by
reference.
1.1 ADA means the Americans with Disabilities Act of 1990, as most recently
amended.
1.2 Affirmative Marketing means a good faith effort to attract eligible persons of all
racial,ethnic and gender groups, in the housing market area, to rent the proposed Affordable
Project units, as hereinafter defined.
2
1.3 Affordability Period means fifty-five (55) years commencing from the date the
final Project Budget and tenant information is entered into HUD's Integrated Disbursement and
Information System (lOIS), provided as an administrative amendment to the Agreement.
1.4 Affordable Unit means the ten (10) units rented as Very Low and Low-Income
housing, each of which will be.required to meet the affordability requirements of this Agreement
and 24 CFR 92.252 which affordability requirements shall run with the land for the Affordability
Period subject to release as provided in this Agreement.
1.5 Budget means the pro-forma Project Budget, attached hereto as EXHIBIT "C"
and incorporated herein, for the Project, as may be amended upon the approval of the CITY's
Housing and Community Development Division Manager, provided any increase in HOME
Program Funds hereunder requires City Council Approval.
1.6 Certificate of Completion means that certificate attached hereto as EXHIBIT "E"
and incorporated herein, to be issued to the DEVELOPER by the CITY evidencing completion
of the Project, and release of construction related covenants for the purposes of the
Agreement.
1.7 CFR means the Code of Federal Regulations.
1.8 Commencement of Rehabilitation means the date that the DEVELOPER or
DEVELOPER's construction contractor begins substantial physical rehabilitation work on the
Property, including, without limitation, delivery of materials and any work, beyond maintenance
of the Property in its status quo condition which shall occur with respect to the Property at the
times set forth in the Project Schedule, attached hereto as EXHIBIT "B" and incorporated
herein..'
1.9 Completion Date means the date that the CITY issues a recorded Certificate of
Completion for the Project. The Completion Date for the Project is identified in the Project
Schedule, attached hereto as EXHIBIT "B" and incorporated herein.
1.10 Debt Service means payments made in a calendar year pursuant to the financing
obtained for the acquisition, rehabilitation, operation and/or ownership of the Project, but
excluding payments made pursuant to the Note.
1.11 Declaration of Restrictions means the Declaration of Restrictions, as outlined
substantially in the form attached hereto as EXHIBIT "H" and incorporated herein, which shall
be recorded against the Property no later than the date of disbursement of Loan funds, setting
forth the requirements of this Agreement which shall run with the land. The DEVELOPER shall
record both the Declaration of Restrictions and record a deed restriction for the Declaration of
Restrictions.
1.12 Deed of Trust means that standard first (1 st) position lien including assignment of
rents and security agreement given by the DEVELOPER, as Trustor, to the CITY as
beneficiary, issued through·the First American title company escrow established by the
DEVELOPER at its sole cost and expense, with a title company acceptable to the CITY,
recorded against the Property, insured in the full amount of the Loan and acceptable to the
3
City Attorney, as well as any "amendments to, modifications of, and restatements of said Deed
of Trust. The terms of any such Deed of Trust shall be substantially the form attached hereto
as EXHIBIT "G" and incorporated herein.
1.13 Eligible Costs means any and all HOME Program eligible Project costs as may
be reimbursed by the Loan, consistent with the Budget, attached hereto as EXHIBIT "C" and
incorporated herein, allowable under 24 CFR Part 92, as specified in 24 CFR 92.205 and
92.206 and not disallowed by 24 CFR 92.214, provided, however, that costs incurred in
connection with any activity that is determined to be ineligible under the Program by HUD or
the CITY shall not constitute ~Iigible Costs.
1.14 Event of Default shall have the meaning assigned to such term under Section
10.1 hereunder.
1.15 Family has the ~ame meaning given that term in 24 CFR 5.403.
1.16 Federal HOME Investment Partnerships Funds (also referred to in this
Agreement as "HOME Funds" or "HOME Program Funds") means the federal HOME Program
monies consisting of the Loan, in an amount not to exceed the sum of Seven Hundred Thirty
Three Thousand Twenty Five dollars and 00/100th ($733,025.00) to be used for eligible
Project costs..
1.17 Funding Sources means: (i) The CITY's HOME Funds, (ii) the former property
owner loan to the DEVELOPER, and (iii) the deferred DEVELOPER fee referenced in the
Budget as source(s) of funding for the Project, and any other financing sources described in
the Budget.
1.18 Hazardous Materials means any hazardous or toxic substances, materials,
wastes, pollutants or contaminants which are defined, regulated or listed as "hazardous
substances," "hazardous wastes," "hazardous materials," "pollutants," "contaminants" or "toxic
substances"under federal or state environmental and health safety laws and regulations,
including without limitation, petroleum and petroleum byproducts, flammable explosives, urea
formaldehyde insulation, radioactive materials, asbestos and lead. Hazardous Materials do
not include substances that are used or consumed in the normal course of developing,
operating or occupying a housing project, to the extent and degree that such substances are
stored, used and disposed of in the manner and in amounts that are consistent with normal
practice and legal standards.'
1.19 Household means one or more persons occupying a Unit in the proposed
Project.
1.20 HUD means the United States Department of Housing and Urban Development.
1.21 Loan means the non-assumable, loan of HOME Funds, in an amount not to
exceed the lesser of the sum of Seven Hundred Thirty Three Thousand Twenty Five dollars
and 00/100th ($733,025.00) and the aggregate HOME Program per unit cap (24 C.F.R.
92.250) for the Affordable Units, as determined by the CITY made available by the CITY to the
DEVELOPER for the Project pursuant to this Agreement, as more specifically described in the
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Budget attached hereto as EXHIBIT "C" and incorporated herein, and in the Note attached
hereto as EXHIBIT "F" and incorporated herein.
1.22 Loan Documents are collectively this Agreement, the Note, Deed of Trust,
Declaration of Restrictions,and all related documents/instruments as they may be amended,
modified or restated from time to time along with all exhibits and attachments thereto, relative
to the Loan.
1.23 Low-Income for:the purposes of this Agreement Low-Income means those whose
annual income does not exceed fifty-five percent (55%) of the median income for the Fresno,
County area as determined by HUD, except as HUD may establish income ceilings higher or
lower than fifty-five percent (55%) of the median for the area on the basis of HUD findings that
such variations are necessary.
1.24 Note means the non-assumable, HOME Program Loan Note in a principal
amount of the Loan, given by the DEVELOPER as promissor, in favor of the CITY as
promissee, evidencing the Loan, secured by the Deed of Trust and provided to the CITY no
later than the date of Project funding disbursement hereunder Promissory Note, attached
hereto as EXHIBIT "F" and incorporated herein, as well as any amendments to, modifications
of and restatements of said Note consented to by CITY.
1.25 Notice to Proceed means that written notice provided to the DEVELOPER by the
CITY instructing the DEVELOPER to proceed with physical rehabilitation work at the Property.
1.26 Operating Expenses means actual, reasonable and customary (for comparable
quality, newly rehabiliated rental housing complexes in Fresno County) costs, fees and
expenses directly incurred, paid, and attributable to the operation, maintenance and
management of the Project in a calendar year, including, without limitation: painting, cleaning,
repairs, alterations, landscaping, utilities, refuse removal, certificates, permits and licenses,
sewer charges, real and i personal property taxes, assessments, insurance, security,
advertising and promotion, janitorial services, cleaning and building supplies, purchase, repair,
servicing and installation of appliances, equipment, fixtures and furnishings which are not paid
from the capital replacement reserve, fees and expenses of property management and
common area expenses, fees and expenses of accountants, attorneys and other
professionals, the cost of social services, and other actual operating costs and capital costs
which are incurred and paid by Borrower, but which are not paid from reserve accounts.
1.27 Project Units mean the ten (10) housing units rehabilitated on the property of
which ten (10) units will be preserved as Affordable Units.
1.28 Project Schedule means the schedule for commencement and completion of the
Project included within the Project Description and Schedule, attached hereto as EXHIBIT "B"
and incorporated herein.
1.29 Property means the property located at 142 N. Fulton Street, Fresno, California
93701, (APN: 459-303-18), more specifically described in the Project Description, attached as
EXHIBIT "A", including four (4) existing structures arranged in an "L" shape formation and are
poured in place concrete buildings.
5
1.30 Rent means the total monthly payment a tenant pays for an Affordable Unit
including the following: use and occupancy of the Unit and land and associated facilities,
including parking, any separately charged fees or service charges assessed by the
DEVELOPER which are required of all tenants (other than security deposits), the cost of an
adequate level of service for utilities paid by the tenant (including garbage collection, sewer,
water, common area electricity, but not telephone service), any other interest, taxes, fees or
charges for use of the land or associated facilities and assessed by a public or private entity
other than the DEVELOPER, and paid by the tenant. Rent does not include payments for any
optional services provided by'the DEVELOPER.
;
1.31 Unit means a dwelling unit within the Project.
1.32 Very Low-Income for the purposes of this Agreement Very Low-Income means
those whose annual income does not exceed fifty-percent (50%) of the median income for the
Fresno, California area as determined by HUD, except as HUD may establish income ceilings
higher or lower than 50% of the median income for the area on the basis of HUD findings that
such variations are necessary.
ARTICLE 2.TERMS OF THE LOAN
2.1 Loan of HOME Funds. The CITY agrees to provide a Loan of HOME Funds to
the DEVELOPER in an amount not to exceed Seven Hundred Thirty Three Thousand Twenty
Five dollars and 00/10Oth ($733,025.00) under the terms and conditions provided in this
Agreement. The HOME Funds shall only be used for payment of HOME Eligible Costs.
2.2 Loan Documents. The DEVELOPER shall execute and deliver the Note to the
CITY and the Deed of Trust to the Title Company for recordation against the Property, as
provided for in this Agreement.
.;
2.3 Term of Agreement. This Agreement is effective upon the Effective Date and
shall remain in force with respect to the Project for the duration of the Affordability Period
unless earlier terminated as provided herein. After the fifty-five (55) year Affordability Period,
this Agreement will expire.jexcept as to financial obligations then due and owing. It is
understood and agreed upon, however, that if for any reason this Agreement should be
terminated in whole or in:part as provided hereunder by the DEVELOPER prior to
disbursement of the Loan, the CITY agrees to record a Notice of Cancellation regarding this
Agreement and instruments recorded hereunder, upon the written request of the
DEVELOPER.
2.4 Loan Repayment and Maturity. The Loan will be due and payable in accordance
with the Note and not later than the maturity date provided in the Note.
2.5 Incorporation of Documents. The City Council approved Minutes of ,
2012 approving this Aqreement, the Loan Documents, the Act and HUD regulations at 24 CFR
Part 92, and all exhibits, attachments, documents and instruments referenced herein, as now
in effect and as may be amended from time to time, constitute part of this Agreement and are
incorporated herein by reference. All such documents have been provided to the parties
6
,
herewith or have been otherwise provided to/procured by the parties and reviewed by each of
them prior to execution hereof.
2.6 Covenants of DEVELOPER. The DEVELOPER for itself and its agents/assigns
covenants and agrees to comply with all the terms and conditions of this Agreement and the
requirements of 24 CFR Part 92 that are applicable to the Project.
ARTICLE 3.REPRESENTATIONS AND WARRANTIES OF DEVELOPER
3.1 Existence and Qualification. The DEVELOPER represents and warrants to the
CITY as of the date hereof,that the DEVELOPER is a duly organized limited liability company
in good standing with the State of California; the DEVELOPER has the requisite power, right,
and legal authority to execute, deliver, and perform its obligations under this Agreement and
has taken all actions necessary to authorize the execution, delivery, performance, and
observance of its obligations under this Agreement. This Agreement, when executed and
delivered by the DEVELOP~R and the CITY, shall constitute the legal, valid, and binding
obligations of the DEVELOPER enforceable against the DEVELOPER in accordance with its
respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other similar laws of general
applicability affecting the enforcement of creditors' rights generally, and (b) the application of
general principles of equity without the joinder of any other party.
3.2 No Litigation Material to Financial Condition. The DEVELOPER represents and
warrants to the CITY as of the date hereof that, except as disclosed to and approved by the
CITY in writing, no litigation or administrative proceeding before any court or governmental
body or agency is now pending, nor, to the best of the DEVELOPER's knowledge, is any such
litigation or proceeding now threatened, or anticipated against the DEVELOPER that, if
adversely determined, would have a material adverse effect on the financial condition,
business, or assets of the DEVELOPER or on performance of this Agreement or the operation
of the Project.'
3.3 No Conflict of Interest. The DEVELOPER represents and warrants to the CITY
as of the date hereof that no official, officer, agent, or employee of the CITY directly or
indirectly owns or controls "any interest in the DEVELOPER, and no person, directly or
indirectly owning or controlling any interest in the DEVELOPER, is an official, officer, agent, or
employee of the CITY.
3.4 No Legal Bar. The DEVELOPER represents and warrants to the CITY as of the
date hereof that the execution, delivery, performance, or observance by the DEVELOPER of
this Agreement will not, to the best of the DEVELOPER's knowledge, materially violate or
contravene any provisions of:(a) any existing law or regulation, or any order of decree of any
court, governmental authority, bureau, or agency applicable to the DEVELOPER; (b) governing
documents and instruments.of the DEVELOPER; or (c) any mortgage, indenture, security
agreement, contract, undertaking, or other agreement or instrument to which the DEVELOPER
is a party or that is binding on any of its properties or assets, the result of which would
materially or substantially impair the DEVELOPER's ability to perform and discharge its
obligations or its ability to complete the Project under this Agreement.
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3.5 Assurance of Governmental Approvals and Licenses. The DEVELOPER
represents and warrants, as of the date hereof, that the DEVELOPER has obtained and, to the
best of the DEVELOPER's knowledge, is in compliance with all federal, state, local
governmental reviews, consents, authorizations, approvals, and licenses presently required by
law to be obtained by the DEVELOPER for the Project.
)
ARTICLE 4.COVENANTS OF THE DEVELOPER
4.1 Affirmative Marketing. The DEVELOPER warrants, covenants and agrees that it
shall comply with all affirmative marketing requirements, including without limitation, those set
out at 24 CFR 92.350, 24 CFR 92.351, in order to provide information and otherwise attract
eligible persons from all racial,ethnic and gender groups in the housing market. The
DEVELOPER shall be responsible for complying with the CITY's "Affirmative Marketing Policy"
document,as amended from time to time. The DEVELOPER shall maintain records of actions
taken to affirmatively market units, and to assess the results of these actions.
4.2 Availability of HOME Funds. The DEVELOPER understands and agrees that the
availability of HOME Funds is subject to the control of HUD, or other federal agencies, and
should the HOME Funds be encumbered, withdrawn or otherwise made unavailable to the
CITY,weather earned by or, promised to the DEVELOPER, and/or should the CITY in any
fiscal year hereunder fail to allocate said HOME Funds, the CITY shall not provide said HOME
Funds unless and until they are made available for payment to the CITY by HUD and the CITY
receives and allocates said HOME Funds. No other funds owned or controlled by the CITY
shall be obligated under this Agreement.
4.3 Compliance with Agreement. The DEVELOPER warrants,covenants and agrees
that, in accordance with the requirements of 24 CFR 92.252 and 24 CFR Part 85, upon any
uncured default by the DEVELOPER within the meaning of Article 10 of this Agreement,the
CITY may suspend or terminate this Agreement and all other agreements with the
DEVELOPER without waiver or limitation of rightslremedies otherwise available to the CITY.
4.4 Conflict of Interest. The DEVELOPER warrants, covenants and agrees that it
shall comply with the Conflict of Interest requirements of 24 CFR 92.356 including,without
limitation, that no officer, employee, agent or consultant of the DEVELOPER may occupy any
of the ten (10)Affordable Units. The DEVELOPER understands and acknowledges that no
employee,agent, consultant,officer or elected official or appointed official of the CITY, who
exercises or has exercised any functions or responsibilities with respect to the Project, or who
is in a position to participate in a decision making process or gain inside information with
regard to these activities, may obtain a financial interest or benefit from the Project, or have an
interest in any contract,subcontract or agreement with respect thereto, or the proceeds
thereunder,either for him or herself or for anyone with which that person has family or
business ties, during his or her tenure or for one year thereafter. To the extent provided at 24
CFR 92.356(f), no owner,developer or sponsor of the Project, or officer, employee,agent or
consultant thereof, may occupy any of the ten (10)Affordable Units.
4.5 Rehabilitation Standards. The DEVELOPER shall rehabilitate the ten (10)
Project Units assisted under.this Agreement in compliance with all applicable local codes,
ordinances and zoning requirements in effect at the time of issuance of CITY building permits.
8
4.6 Covenants and Restrictions to Run with the Land. The CITY and the
DEVELOPER expressly warrant, covenant and agree to ensure that the covenants and
restrictions set forth in this Agreement are recorded and will run with the land, provided,
however, that, on expiration of this Agreement such covenants and restrictions shall expire.
A.The CITY and the DEVELOPER hereby declare their understanding and
intent that the covenants and restrictions set forth herein directly benefit the land by: (a)
making possible the obtaininq of advantageous financing for the rehabilitation and (b)
enhancing and increasing the enjoyment of the proposed Project by certain Very Low- and
Low-Income households.
B. The DEVELOPER covenants and agrees that upon notification from the
CITY that the ten (10) Aff6rdable Unit tenant information has been entered into HUD's
Integrated Disbursement andlntormation System until the expiration of the Affordability Period,I.
it shall cause the ten (10)U:nits to be rented as Affordable Housing for Very Low and Low-
Income households.
C. Without waiver or limitation, the CITY shall be entitled to injunctive or other
equitable relief against any violation or attempted violation of any covenants and restrictions,
and shall, in addition, be entitled to damages available under law or contract for any injuries or
losses resulting from any violations thereof.
D. All present and future owners of the Property and other persons claiming
by, through, or under them shall be subject to and shall comply with the covenants and
restrictions. The acceptance of a deed of conveyance to the Property shall constitute an
agreement that the covenants and restrictions, as may be amended or supplemented from
time to time, are accepted and ratified by such future owners, tenant or occupant, and all such
covenants and restrictions shall be covenants running with the land and shall bind any person
having at any time any interest or estate in the Property, all as though such covenants and
restrictions were recited and stipulated at length in each and every deed, conveyance,
mortgage or lease thereof.'
E.The failure or delay at any time of the CITY or any other person entitled to
enforce any such covenants or restrictions shall in no event be deemed a waiver of the same,
or of the right to enforce the ~same at any time or from time to time thereafter, or an estoppel
against the enforcement thereof.
4.7 Displacement of Persons. The DEVELOPER covenants and agrees with the
CITY that pursuant to 24 CFR 92.353, it will take all reasonable steps to minimize the
displacement of any persons (families, individuals, businesses, nonprofit organizations and
farms). The parties acknowledqe and agree that the Property is partially occupied with
tenants.
4.8 Initial and Annual Income Certification. The DEVELOPER covenants and agrees
with the CITY that it shall comply with the procedures for annual income determinations at 24
CFR 92.203 for the ten (10hAffordable Units. The DEVELOPER shall obtain, complete and
maintain on file, immediately prior to initial occupancy, and annually thereafter, income
certifications from each tenant Household renting any HOME-assisted Unit. The DEVELOPER
9
shall make a good faith effort to verify that the income provided by an applicant or occupying
Household in an income certification is accurate by taking one or more of the following steps
as part of the verification process: (1) obtain a pay stub for the most recent pay period; (2)
obtain an income verification form from the applicant's current employer; (3) obtain an income
verification form from the Social Security Administration and California Department of Social
Services if the applicant receives assistance from either of such agencies; or (4) if the
applicant is unemployed,obtain another form of independent verification. Copies of household
income certification and veriflcatlon must be available for review by the CITY. The
DEVELOPER further warrants, covenants and agrees that it shall cooperate with the CITY in
the CITY's income certification/affordability monitoring activities.
4.9 Lead-Based Paint. The DEVELOPER covenants and agrees with the CITY that
it shall comply with all applicable requirements of the Lead-Based Paint Poisoning Prevention
Act of 42 U.S.C. 4821 et seq., 24 CFR Part 35, including the HUD 1012 Rule, and 24 CFR
982.4010),and any amendments thereto, and EPA Section 402( c)(3) of the Toxic Substances
Control Act (TSCA) to address lead-based paint hazards created by renovation, repair, and
painting activities that disturb lead-based paint in target housing and child-occupied facilities.
Contractors performing renovations in lead-based paint units must be EPA-certified
renovators. These requirements apply to all Units and common areas of the Project. The
DEVELOPER shall incorporate or cause incorporation of this provision in all contracts and
subcontracts for work performed on the Project, which involve the application of paint. The
DEVELOPER shall be responsible for all disclosure, inspection, testing, evaluation, and control
and abatement activities.
4.10 Minority Outreach Activities. The DEVELOPER covenants and agrees with the
CITY that it shall comply with all federal laws and regulations described in Subpart H of 24
CFR Part 92, including, without limitation, any requirement that the DEVELOPER comply with
the CITY's minority outreach program.
4.11 Other Laws and Regulations. The DEVELOPER covenants and agrees with the
CITY that, in addition to complying with the federal laws and regulations already cited in this
Agreement, the DEVELOPER has reviewed, and shall comply with, all other federal laws and
regulations that apply to the HOME Program, including, without limitation, requirements of 24
CFR 58.6 and the Flood Disaster Protection Act of 1973, as amended (42 U.S.C. 4001-4128)
and the following:
A.The DE\lELOPER does not intend to use any financing that is secured by
a mortgage insured by HUD;in connection with the Project as part of its rehabilitation of the
Project unless reflected in.the Project Budget, attached hereto as EXHIBIT "C" and
incorporated herein, and approved by HUD and the CITY.
~
B. The Project is not located in a tract identified by the Federal Emergency
Management Agency as having special flood requirements.
C. The Project requirements, Subpart F of 24 CFR Part 92, as applicable and
in accordance with the type of Affordable Units assisted, including, but not limited to, the limit
on the HOME per-unit subsidy amount at 24 CFR 92.250.
10
D. The property standards at 24 CFR 92.251.,
E The Project "Labor" requirements, as applicable, of 24 CFR 92.354
including Davis Bacon prevailing wage requirements (40 U.S.C. 276a - 276a-7), as
supplemented by Department of Labor regulations (29 CFR Part 5).
F. The provisions of Section 102 and 107 of the Contract Work Hours and
Safety Standards Act (40'U.S.C.327-333), as supplemented by Department of Labor
Regulations (29 CFR Part 5),~in regards to the construction and management of the proposed
Project.
G. The DEVELOPER and its contractors,subcontractors and service
providers for the Project, shall comply with all applicable local, state and federal requirements
concerning equal employment opportunity, including compliance with Executive Order ("EO.")
11246, Equal Employment Opportunity, as amended by EO.11375,"Amending Executive
Order 11246 Relating to Equal Employment Opportunity,"and as supplemented by regulations
at 41 CFR part 60, "Office of Federal Contract Compliance Programs, Equal Employment
Opportunity,Department of Labor."
H. The provisions of the Copeland "Anti-Kickback"Act (18 U.S.C. 874), as
supplemented by Department of Labor regulations (29 CFR Part 3,"Contractors and
Subcontractors on Public Bliilding or Public Work Financed in Whole or in Part by Loans or
Grants from the United States").
I. The provisions of the Clean Air Act (42 U.S.C. 7401 et seq.) and the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), as amended.
!
J.The provisions of the Byrd Anti-Lobbying Amendment (31 U.S.C. 1352).
K. The provision of EO.s 12549 and 12689,"Debarment and Suspension,"
as set forth at 24 CFR Part 24.
L.The provisions of the Drug-Free Workplace Act of 1988 (42 U.S.C. 701),
in accordance with the Act arid with HUD's rules at 24 CFR Part 24,Subpart F.
M.Title 8 ofthe Civil Rights Act of 1968 PL. 90-284.
N.Executive Order 11063 on Equal Opportunity and Housing.
O. Section 3 of the Housing and Urban Development Act of 1968.
P.The Housing and Community Development Act of 1974.
Q.Clean Water Requirements 33 U.S.C. 1251.
R.Civil Rights Requirements,29 U.S.C.§623, 42 U.S.C.§2000, 42 U.S.C.
§6102,42 U.S.C.§12112,42 U.S.C.§12132,49 U.S.C.§5332, 29 CFR Part 1630, 41 CFR
Parts 60 et seq.
11
4.12 Faith Based Activities. DEVELOPER warrants, covenants and agrees that it
shall not engage in any prohibited activities described in 24 CFR 92.257.
4.13 Reporting Requirements. The DEVELOPER warrants, covenants and agrees
with the CITY that it shall submit performance reports to the CITY as detailed in Section 7.18.
Furthermore, the DEVELOPER agrees to provide, at the sole cost of the DEVELOPER, annual
audited Financial Statements for the Project expenses and ongoing financial transactions
which occur as a result of this Agreement as detailed in Section 5.6 of this Agreement. The
DEVELOPER agrees to account for the expenditure of HOME Funds using generally accepted
accounting principles, which financial documentation shall be made available to the CITY and
HUD, upon their respective written request(s).
4.15 Housing Affordability. The DEVELOPER covenants and agrees with the CITY
that ten (10) of the Project Units will be affordable to Very Low- and Low-Income households
and other requirements of 24 CFR 92.252 during the Affordability Period. Two (2) of the ten
(10) Units shall, at a minimum, be rented to and occupied by, or, if vacant, available for rental
and occupancy by (a) person(s) whose annual household income at the time of initial
occupancy is not greater than fifty percent (50%), of the most recent annual median income
calculated and published by HUD for the Fresno Metropolitan Statistical Area applicable to
such household's size, and at an affordable rent consistent with HOME Program regulations,
for the Affordability Period,and eight (8) of the ten (10) Units shall, at a minimum, be rented to
and occupied by, or, if vacant, available for rental and occupancy by (a) person(s) whose
annual household income at the time of initial occupancy is not greater than fifty-five percent
(55%), of the most recent annual median income calculated and published by HUD for the
Fresno Metropolitan Statistical Area applicable to such household's size, and at an affordable
rent consistent with HOME Program regulations, for the Affordability Period, provided that
upon foreclosure by a lender'or other transfer in lieu of foreclosure, or assignment of an FHA-
insured mortgage to HUD, the Affordability Period shall be terminated if the foreclosure or
other transfer in lieu of foreclosure or assignment recognizes any contractual or legal rights of
public agencies, nonprofit sponsors, or others to take actions that would avoid the termination
of low-income affordability. However, the requirements with respect to the Project shall be
revived according to their original terms, if during the original Affordability Period, the owner of
record before the foreclosure or other transfer, or any entity that includes the former owner or
those with whom the former 'owner has or had family or business ties, obtains an ownership
interest in the Project or the Property, the Affordability Period shall be revived according to its
original terms. In the event the DEVELOPER fails to comply with this Section or the
Affordability Period is not revived following transfer by foreclosure or transfer in lieu of
foreclosure, the DEVELOPER shall return to the CITY all HOME Funds disbursed to the
DEVELOPER by the CITY.
4.16 Terminated Project. The DEVELOPER understands and agrees that, if the
Project is terminated before the completion, either voluntary or otherwise, such constitutes and
ineligible activity and the CITY, without waiver or limitation upon other rights and remedies will
not be required to provide any further HOME Funding to the Project Units.
12
;ARTICLE 5.PROPERTY MAINTENANCE
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The DEVELOPER covenants and agrees with the CITY to the following, for the entire
term of the Agreement.i
5.1 Adequate Repa;ir and Maintenance. After completion of the rehabilitation Project,
the DEVELOPER shall maintain the Project and Property in compliance with all applicable
codes, laws, and ordinances.
5.2 Affordable Rental Housing. Shall constitute ten (10) Affordable rental housing
units preserved as Very LOW-and Low-Income Rental Housing (as provided at 24 CFR
92.252) during the entire Affordability Period. This covenant shall remain in effect and run with
and restrict the land during the entirety of the Affordability Period. In the event that the
DEVELOPER fails to comply with the time period in which the Affordable Units constitute
Affordable Housing, the CITY shall without waiver or limitation is entitled to injunctive relief, as
the DEVELOPER acknowledges that damages are not an adequate remedy at law for such
breach.i
5.3 Compliance with Environmental Laws. The DEVELOPER shall cause the
Affordable Units to be in compliance with, and not to cause or permit the Project to be in
violation of, any Hazardous Materials law, rule, regulation, ordinance, or statute. Although the
CITY will utilize its employees and agents for regular inspection and testing of the eligible
Property, the DEVELOPER ~grees that, if the CITY has reasonable grounds to suspect any
such violation, the DEVELOPER shall be entitled to thirty (30) days' notice and opportunity to
cure such violation. If the suspected violation is not cured, the CITY shall have the right to
retain an independent consultant to inspect and test the Property for such violation. If a
violation is discovered, the DEVELOPER shall pay for the reasonable cost of the independent
consultant.
Additionally, the DEV~LOPER agrees:
i
A. That the CITY shall not be directly or indirectly responsible, obligated or
liable with the inspection, testing, removal or abatement of asbestos or other hazardous or
toxic chemicals, materials, substances, or wastes and that all cost, expense and liability for
such work shall be and remain solely with the DEVELOPER;
B. Not to transport to or from the proposed Property, or use, generate,
manufacture, produce, store, release, discharge, or dispose of on, under, or about the
Property, or surrounding real estate, or transport to or from the Property, or surrounding real
estate, any hazardous or toxic chemicals, materials, substance, or wastes or allow any person
or entity to do so except in such amounts and under such terms and conditions permitted by
applicable laws, rules, regulations, ordinances, and statutes;
C. To give prompt written notice to the CITY of the following:
(i) Any proceeding or inquiry by any governmental authority with respect
to the presence of any hazardous or toxic chemicals, materials, substance, or waste in or on
13
14
the eligible Property or the surrounding real estate or the migration thereof from or to other
property; and
(ii) All claims made or threatened by any third party against the
DEVELOPER or such properties relating to any loss or injury resulting from any hazardous or
toxic chemicals,materials, substance, or waste; and
(iii)The'DEVELOPER's discovery of any occurrence or condition on any
real property adjoining or in the vicinity of such properties that would cause such properties or
underlying or surrounding real estate or part thereof to be subject to any restrictions on the
ownership,occupancy,transterability,or use of the property under any environmental law,
rule, regulation,ordinance or statute: and
(iv) To jndemnify,defend, and hold the CITY harmless from any and all
claims, actions, causes of action, demands,judgments,damages, injuries,administrative
orders,consent agreements,orders, liabilities, penalties, costs,expenses (including attorney's
fees and expenses),and disputes of any kind whatsoever arising out of or relating to the
DEVELOPER or any other-party's use or release of any hazardous or toxic chemicals,
materials,substance,or wastes on the Property regardless of cause or origin,including any
and all liability arising out of or relating to any investigation, site monitoring,containment,
cleanup, removal, restoration, or other remedial work of any kind or nature.
5.4 Compliance with Laws. The DEVELOPER shall be responsible for and promptly
and faithfully comply with, conform to and obey all present and future federal, state and local
statutes,regulations,rules,ordinances and other legal requirements applicable by reason of
this Agreement or otherwise.to the Project including without limitation as to prevailing wage
requirements.The DEVELOPER acknowledges that the use of federal funds on the Project is
subject to extensive federal regulation and covenants and agrees that it shall comply with,
conform to and obey (and take such steps as are required of the DEVELOPER to enable the
CITY to comply with, conform to and obey) all federal statutes, regulations, rules and policies
applicable to the Project.;
5.5 Existence, Qualification, and Authority. The DEVELOPER shall provide to the
CITY any evidence required or requested by the CITY to demonstrate the continuing
existence,qualification,and authority of the DEVELOPER to execute this Agreement and to
perform the acts necessary to carry out the Project.
5.6 Financial Statements and Audits. The DEVELOPER (or its successor who shall
receive federal financial assistance), as a recipient of federal financial assistance,is required
to comply with the provisions of the Single Audit Act of 1984 (31 U.S.C.Sections 7501 et seq.),
as amended.Annually,within one hundred and eighty (180) days following: 1) the end of fiscal
year(s)in which the federal funds are disbursed hereunder, and 2) the end of fiscal year(s) in
which this contract shall terminate, and otherwise upon the CITY's, written request during the
term of this Agreement,DEVELOPER,at its sole cost and expense shall submit to the CITY.
A.Audited annual financial statements that are current, signed, and prepared
according to generally accepted accounting principles consistently applied (except as
otherwise disclosed therein).
~,
B. Audited Financial Statements covering the income and expenses, and the
financial transactions for the Affordable Project during the prior fiscal year.
5.7 Inspection and Audit of Books. Records and Documents. The DEVELOPER shall
be accountable to the CITY for HOME Funds disbursed for this Project pursuant to this
Agreement. Any duly authorized representative of the CITY or HUD shall, at all reasonable
times, have access to and the right to inspect, copy, make excerpts or transcripts, audit, and
examine all books of accounts, records, files and other papers or property, and other
documents of the DEVELOPER pertaining to the Project and for up to six (6) years after the
expiration or termination of this Agreement.
A.The DEVELOPER will maintain books and records for the Project using
generally accepted accounting principles. The DEVELOPER agrees to maintain books and
records that accurately and fully show the date, amount, purpose and payee of all
expenditures financed with,HOME Funds and to keep all invoices, receipts and other
documents related to expenditures financed with HOME Funds for not less than six (6) years
after the expiration or termination of the Agreement. Books and records must be kept accurate
and current. For purposes of this section, "books, records and documents" include, without
limitation; plans, drawings, specifications, ledgers,journals, statements, contracts/agreements,
funding information, funding applications, purchase orders, invoices, loan documents,
computer printouts, correspondence, memoranda, and electronically stored versions of the
foregoing. This section shall survive the termination of this Agreement.
B. The CIT¥'may audit any conditions relating to this Agreement at the
CITY's expense, unless such'audit shows a significant discrepancy in information reported by
the DEVELOPER in which case the DEVELOPER shall bear the cost of such audit. The
DEVELOPER shall also comply with any applicable audit requirements of 24 CFR 92.506.
This section shall survive the termination of this Agreement.
C. The DEyELOPER will cooperate fully with the CITY and HUD in
connection with any interim or final audit relating to the Programs and the Project that may be
performed relative to the performance of this Agreement.
5.a Inspection of Ptoperty.Any duly authorized representative of the CITY or HUD
shall, at all reasonable times, have access and the right to inspect the Property until
completion of the Project and expiration of the applicable Affordability Period within seventy-
two (72) hours written notice.isubject to the rights of the tenants.
5.9 No Other Liens. The DEVELOPER shall not create or incur, or suffer to be
created or incurred, or to exist, any additional mortgage, pledge, encumbrance, lien, charge, or
other security interest of any kind on the eligible Property, other than those related to
rehabilitation in relation to the Project consistent with the Project Budget, attached hereto as
EXHIBIT "C" and incorporated herein.
5.10 Nondiscrimination. The DEVELOPER shall comply with and cause any and all
contractors and subcontractors to comply with any and all federal, state, and local laws with
regard to illegal discrimination, and the DEVELOPER shall not illegally discriminate against
15
any persons on account of race, religion, sex, family status, handicap, or place of national
origin in its performance of thts Agreement and the completion of the Project.
5.11 Ownership.Except as required in pursuit hereof, the DEVELOPER shall not sell,
lease, transfer, assign or otherwise dispose of ("Transfer") all or any material part of any
interest it might hold in the Property or the Project without prior written consent of the CITY,
which consent shall not be unreasonably withheld or delayed.,
5.12 Payment of Liabilities.The DEVELOPER shall pay and discharge in the ordinary
course of its business all material obligations and liabilities, the nonpayment of which could
have a material or adverse impact on its financial condition, business, or assets or on the
operation of the Project, except such obligations and liabilities that have been disclosed to the
CITY in writing and are being'contested in good faith.
5.13 Report of Events of Default. The DEVELOPER shall promptly give written notice
to the CITY upon becoming aware of any Event of Default under this Agreement.
ARTICLE 6.DISBURSEMENT OF HOME FUNDS
Without waiver of limitation, the parties agree as follows, regarding disbursement of
HOME Funds:
6.1 Loan Commitmbnts and Financing Plan. The DEVELOPER shall submit its most
current Finance Plan for the Project to the CITY within the time frame provided in the Project
Schedule. So long as the Finance Plan is consistent with the Budget, the CITY shall accept
the Finance Plan. If the Finance Plan is not consistent with the Budget, then within thirty (30)
days after receiving the Finance Plan, the CITY, through its Development and Resource
Management Department, Housing and Community Development Division, will review the
Finance Plan and deliver notice to the DEVELOPER either approving or disapproving the
Finance Plan in its reasonable discretion. If the CITY disapproves the Finance Plan, it will
specify the reason for the disapproval and ask the DEVELOPER to provide any additional
information the CITY may need to approve the Finance Plan. The failure of the CITY to send
notice within such thirty (30) day time period shall be deemed an approval of the Finance Plan.
6.2 Finance Plan Content. The Finance Plan shall contain all Project pre-
construction, construction and post-construction/permanent loans or letters of intent from one
or more qualified public/private lenders or funding sources, in sufficient amounts, combined
with any other developer financing, for the DEVELOPER to complete rehabilitation of the
Project. The total amount of the liens to be recorded against the Property as presented in the
Finance Plan shall not exceed the DEVELOPER's estimated construction Project Budget.
;
6.3 Use of HOME Funds. The DEVELOPER warrants, covenants and agrees that it
shall request HOME Funds only for reimbursement of eligible costs incurred as identified in the
attached Project Budget, limited to the amount needed for the Affordable Units, including costs
allowable under 24 CFR 92';206,aggregating not more than the Loan amount. The CITY's
obligations shall in no event exceed the HOME Funds amount specified in this Agreement.
16
A.If any such Funds shall be determined to have been requested and/or
used by the DEVELOPER for costs other than for eligible costs, and subject to the notice and
cure provisions of Section a 0.2 hereunder, an equal amount from nonpublic funds shall
become immediately due ana payable by the DEVELOPER to the CITY; provided, however,
that the DEVELOPER shall, subject to its full cooperation with the CITY, be entitled to
participate in any opportunity-to remedy, contest, or appeal such determination.
B. In the event HOME Funds are requested to reimburse Eligible Costs
which subsequently lose eligibility as Eligible Costs, the DEVELOPER shall immediately return
such HOME Funds to the ClllY.
C. The CITY will disburse HOME Funds, only to the DEVELOPER through
proper invoicing, for eligible rehabilitation costs of the Affordable Project as provided in this
Article 6.
"
6.4 Conditions Precedent to Disbursement. The CITY shall not be obligated to make
or authorize any disbursements of HOME Funds unless all the following conditions are
satisfied:
A.There exists no Event of Default as provided in Article 10, nor any act,
failure, omission or condition that with the giving of notice would constitute an Event of Default.
B. The DEVELOPER has submitted evidence that the combined monies from
the Funding Sources and the,HOME Funds are not less than Nine Hundred Seventy Thousand
Nine Hundred Ninety Two dollars and 00/100 ($970,992) attached hereto in Exhibit "C", the
amount necessary to complete the project.
C. The CITY has approved the requested reimbursement of eligible Project
costs.
D. The DEYELOPER has obtained insurance coverage and delivered to the
CITY evidence of insurance as required inArticle 9.
E.The DEVELOPER is current with its compliance of all reporting
requirements set forth in this Agreement.
F. The DEVELOPER has provided the CITY with a written request for Funds
(in a CITY-approved Form),'for reimbursement of eligible Project costs, and detailing such
Eligible Costs applicable to the request.
G. The CITY has received Certification required by Section 6.6 of this
Agreement.
H.
HOME Funds.
The CITY has received, and continues to have the right to disburse,,
6.5 Request for and Disbursement of HOME Funds. The DEVELOPER shall request
disbursement of HOME Funds using the CITY's Request for Disbursement of Funds form. The
DEVELOPER shall only request a maximum of the Loan amount in HOME Program assistance
i 17
for the Project. All requests must provide in detail such Eligible Costs applicable to the
request. All requests for HOME Funds disbursement shall be accompanied with the
Certification required by Section 6.6 of this Agreement.
6.6 DEVELOPER Certification. The DEVELOPER shall submit to the CITY a written
certification that, as of the date of the Request for Disbursement ("Certification"):
A.The representations and warranties contained in or incorporated by
reference in this Agreement continue to be true, complete and accurate in all material
respects;
B. The DEVELOPER has carried out all of its obligations and is in
compliance with all the material obligations or covenants specified in this Agreement,to the
extent that such obligations; or covenants are required to have been carried out or are
applicable at the time of the request for the Disbursement;
C. The DEVELOPER has not committed or suffered an act, event,
occurrence,or circumstance .that constitutes an Event of Default or that with giving of notice
would constitute an Event of Default; and
D. The Disbursement requested will be used solely for reimbursement of
eligible costs and must be supported by the itemized obligations that have been properly
incurred and are properly charqeable in connection with the Project.
6.7 Disbursement of Funds.Disbursements of HOME Program Loan proceeds shall
occur within thirty (30)days:after the CITY receives the Certification and to the extent of
annually allocated and available HOME Funds.
ARTICLE 7.REHABILITATION
Without waiver of limitation, the parties agree as follows:
7.1 Pre-construction Meeting Regarding Program Processes and Procedures. The
CITY will schedule, and the DEVELOPER shall attend a meeting prior to construction with the
CITY for the purpose of outlining Project processes and procedures.
7.2 Commencement and Completion of Project. The DEVELOPER shall commence
rehabilitation/construction upon receipt of a Notice to Proceed from the CITY, and record a
Notice of Completion upon completion of the rehabilitation of the Project in accordance with
the Project Schedule, attached here to as EXHIBIT "B" and incorporated herein.
7.3 Contracts and'Subcontracts.Consistent with Section 5.3, all demolition,
hazardous waste abatement, construction work and professional services for the Project shall
be performed by persons or'entities licensed or otherwise legally authorized to perform the
applicable work or service in the State of California and the City of Fresno. The DEVELOPER
shall provide the CITY with~'copies of all agreements it has entered into with any and all
general contractors for the Project,The DEVELOPER shall require that each such general
contractor agreement contain a provision whereby the party(ies) to the agreement other than
the DEVELOPER agree to: (i) notify the CITY immediately of any event of default by the
18
DEVELOPER thereunder;(ii).notify the CITY immediately of the filing of a mechanic's lien; (iii)
notify the CITY immediatelybf termination or cancellation of the agreement; and (iv) provide
the CITY, upon the CITY's request, an Estoppel Certificate certifying that the agreement is in
full force and effect and the:DEVELOPER is not in default thereunder. The DEVELOPER
agrees to notify the CITY immediately of termination or cancellation of any such agreement(s),
notice of filing of a mechanic's lien, or breach or default by other party(ies) thereto.
7.4 Damage to Property. To the extent consistent with the requirements of any
permitted encumbrance, or as otherwise approved by the CITY, and subject to Article 9 of this
Agreement, if any building or improvement constructed on the Property is damaged or
destroyed by an insurable cause, the DEVELOPER shall, at its cost and expense, diligently
undertake to repair or restore said buildings and improvements consistent with the original
Plans and Specifications of the Project. Such work or repair shall commence within ninety (90)
days after the insurance proceeds are made available to the DEVELOPER and shall be
complete within two (2) years thereafter. All insurance proceeds collected for such damage or
destruction shall be applied to the cost of such repairs or restoration and, if such insurance
proceeds shall be insufficient for such purpose, the DEVELOPER shall make up the
deficiency.
7.5 Fees. Taxes and Other Levies. The DEVELOPER shall be responsible for
payment of all fees, assessments, taxes, charges and levies imposed by any public authority
or utility company with respect to the Project Property, and shall pay such charges prior to
delinquency. However, the DEVELOPER shall not be required to pay and discharge any such
charge so long as: (a) the legality thereof is being contested diligently and in good faith and by
appropriate proceedings, and (b) if requested by the CITY, the DEVELOPER deposits with the
CITY any funds or other forms of assurances that the CITY, in good faith, may determine from
time to time are appropriate to protect the CITY from the consequences of the contest being
unsuccessful. The DEVELOPER shall have the right to apply for and obtain an abatement
and/or exemption of the Project from real property taxes in accordance with all applicable rules
and regulations, including Section 214(g) of the California Revenue and Taxation Code.
7.6 Financing. The DEVELOPER shall promptly inform the CITY of any new
financing or funding not included in the Budget for the Project, and the DEVELOPER shall
provide the CITY copies of all agreements with any and all Funding Sources for the Project.
The DEVELOPER shall require each agreement with any and all Funding Sources not
included in the Budget to contain a provision whereby the party(ies) to the agreement other
than the DEVELOPER, if permitted by the parties' applicable rules and regulations, agree to:
(i) notify the CITY immediately of 'any event of default by the DEVELOPER thereunder; (ii)
notify the CITY immediately of termination or cancellation of the agreement; and (iii) provide
the CITY, upon CITY's request, an Estoppel Certificate certifying that the agreement is in full
force and effect and the DEVELOPER is not in default thereunder. The DEVELOPER agrees
to notify the CITY immediafely of termination or cancellation of any such agreement(s) or
receipt of notice of default thereunder. The DEVELOPER shall comply with all obligations of
any such agreement(s) with any and all Funding Sources until the respective expiration of such
agreement(s).r,
7.7 Identification Signage. Before the start of rehabilitation/construction, the
DEVELOPER shall place a 'poster or sign, with a minimum four feet by four feet in size,
19
identifying the City of Fresno as a Project participant. The sign shall also include the CITY's
Housing Logo, as well as HUD's Equal Housing Opportunity logo, as mandated by HUD. Font
size shall be a minimum of four (4) inches. The poster/sign shall be appropriately placed, and
shall remain in place throughout the Project construction.
7.8 Inspections.The DEVELOPER shall permit, facilitate, and require its contractors
and consultants to permit and facilitate observation and inspection at the job site by the CITY
and other public authorities during reasonable business hours, for determining compliance with
this Agreement, including without limitation periodic on-site inspections.
7.9 Utilities. The DEVELOPER shall be responsible, at its sole cost and expense, to
determine the location of any utilities on the Property and to negotiate with the utility
companies for and to relocate the utilities, if any, as necessary to complete the Project.
7.10 Insurance and Bonds. Upon the CITY's reasonable request, the DEVELOPER
shall submit for CITY approval, bonds, certificates, and/or applicable endorsements for all
insurance and bonds required by this Agreement in accordance with Article 9.
7.11 Mechanic's Liens and Stop Notices. If any claim of lien is filed against the
Property or a stop notice affecting any financing, HOME Funds or Funding Sources for the
Project, is served on the CITY or any other third party in connection with the Project, the
DEVELOPER shall, within twenty (20) days of such filing or service, either pay and fully
discharge the lien or stop notice, effect the release of such lien or stop notice by delivering to
the CITY a surety bond in sufficient form and amount, or provide the CITY with other
assurance satisfactory to the CITY that the claim of lien or stop notice will be paid or
discharged.
A.If the DEVE~OPER fails to discharge, bond or otherwise satisfy the CITY with
respect to any lien, encumbrance, charge or claim referred to in this Section 7.11, then, in
addition to any other right or,remedy, the CITY may, but shall not be obligated to, discharge
such lien, encumbrance, charge, or claim at the DEVELOPER's expense. Alternatively, the
CITY may require the DEVELOPER to immediately deposit with the CITY the amount
necessary to satisfy such lie"or claim and any costs, pending resolution thereof. The CITY
may use such deposit to satisfy any claim or lien that is adversely determined against the
DEVELOPER. The DEVELOPER hereby agrees to indemnify and hold the CITY harmless
from liability for such liens, encumbrances, charges or claims together with all related costs
and expenses.
7.12 Permits and Licenses. Upon CITY's reasonable request, the DEVELOPER shall
submit, for CITY approval, all the necessary permits and licenses required for Commencement
of rehabilitation of the Project. As the CITY may reasonably request, the DEVELOPER, at its
sole cost and expense, shall provide to the CITY copies of any and all permit approvals and
authorizations including plot plan, plat, zoning variances, sewer, building, and other permits
required by governmental authorities other than the CITY in pursuit of the Project, and for its
stated purposes in accordance with all applicable building, environmental, ecological,
landmark, subdivision, zoning codes, laws, and regulations. The DEVELOPER is responsible,
at its sole cost and expense, to determine the location of any utilities on the Property and to
20
i4'
negotiate with the utility companies for and to relocate the utilities, if any, as necessary to
complete the Project.~
7.13 Plans and SpeCifications.
A. The DEVELOPER has submitted to the CITY preliminary plans and
specifications for the Project under Conditional Use Permit file number _
("Affordable Preliminary Plans"),The DEVELOPER will rehabilitate the Project in full
conformance with the CITY-approved Conditional Use Permit and plans and specifications and
modifications thereto approved by the CITY. The DEVELOPER shall obtain the CITY's prior
written approval for any modifications to the plans and specifications.
B. The HOME Agreement shall contain by reference the design and site plan
of the Project; such design must be approved by the City Council with the HOME Agreement.
j
C. Before commencement of rehabilitation, the DEVELOPER shall submit to
the CITY, for its review and approval, the final Plans and Specifications for the Project. The
DEVELOPER will rehabilitate the Project in full conformance with the Plans and Specification
and modifications thereto approved by the CITY. The DEVELOPER shall obtain the CITY's
prior written approval for any modifications to the Plans and Specifications.
7.14 Project Respdnsibilities/Public Work-Prevailing Wage Requirements.The
DEVELOPER shall be solely responsible for all aspects of the DEVELOPER's conduct in
connection with the Project, 'including but not limited to, compliance with all local, state and
federal laws including without limitation, as to prevailing wage and public bidding requirements.
This Project is a "public work" project for federal purposes including David Bacon and Related
Acts wage requirements absent written direction/determination otherwise by U.S. HUD or a
court of competent jurisdlction.The Project is a "public work" project for state purposes
including California Labor Code Section 1720 et seq. wage requirements, to which Section
1771 applies, absent written direction/determination otherwise the California Department of
Industrial Relations or a court of competent jurisdiction.Based thereon the DEVELOPER shall
cause the Project work to be performed as a "public work." The Council of the City of Fresno
has adopted Resolution No. 82-297 ascertaining the general prevailing rate of per diem wages
and per diem wages for holidays and overtime in the Fresno area for each craft,classification
or type of workman needed in the execution of contracts for the CITY. A copy of the resolution
is on file at the Office of the City Clerk. Actual wage schedules are available upon request at
the City's Construction Management Office.Without limiting the foregoing, the DEVELOPER
shall be solely responsible for the quality and suitability of the work completed and the
supervision of all contracted work,qualifications and financial conditions of and performance of
all contracts,subcontractors,'consultants and suppliers. Any review or inspection undertaken
by the CITY with reference to the Project and/or payroll monitoring/auditing is solely for the
purpose of determining whether the DEVELOPER is properly discharging its obligation to the
CITY, and shall not be relied 'upon by the DEVELOPER or by any third parties as a warranty or
representation by the crrv as to governmental compliance and/or the quality of work
completed for the Project..
7.15 Property Condition. The DEVELOPER shall maintain the Property and all
improvements on site in reasonably good condition and repair (and, as to landscaping,in a
.21
healthy condition), all according to the basic design and related plans, as amended from time
to time. The DEVELOPER and those taking direction under the DEVELOPER shall: (i)
maintain all on-site improvements according to all other applicable law, rules, governmental
agencies and bodies having or claiming jurisdiction and all their respective departments,
bureaus, and officials; (ii) keep the improvements free from graffiti; (iii) keep the Property free
from any accumulation of'debris or waste material; (iv) promptly make repairs and
replacements to on-site imprpvements; and (v) promptly replace any dead, or diseased plans
and/or landscaping (if any) with comparable materials.,
7.16 Quality of Work The DEVELOPER shall ensure that rehabilitation of the
proposed Project employs building materials of a quality suitable for the requirements of the
Project. The DEVELOPER shall cause completion of the rehabilitation of the proposed Project
in full conformance with applicable local, state and federal laws, statutes, regulations, and
building and housing codes.
7.17 Relocation. If and to the extent that rehabilitation of the proposed Project results
in the permanent or temporary displacement of residential tenants, homeowners or
businesses, the DEVELOPER shall comply with all applicable local, state, and federal statutes
and regulatory with respect to relocation planning, advisory assistance and payment of
monetary benefits. The DEVELOPER shall be solely responsible for payment of any
relocation benefit to any displaced persons and any other obligations associated with
complying with said relocation laws.
7.18 Reporting Requirements. The DEVELOPER shall submit to the CITY the
following Project reports:
A.From the.date of the execution of the Agreement, until issuance of the
recorded Certificate of Completion, the DEVELOPER shall submit a Quarterly Report, in a
form approved by the CITY, which will include the progress of rehabilitation of the Project and
affirmative marketing efforts (as applicable). The Quarterly Reports are due within fifteen (15)
days after each March 31s(,June 30th, September 30th, and December 31st, during said
period.I'
B. Annually; beginning on the first day of the month following the CITY's
issuance of the recorded Certificate of Completion, and continuing until the termination of the
Agreement, the DEVELOPER shall submit an Annual Report to the CITY for the Project,
containing the following information: the rent, the annual income, and the family size of the
Households. The report shall also state the date tenancy commenced for each Affordable
rental Unit, certification from an officer of the DEVELOPER that the Affordable Project Units
are in compliance with the Affordable Rental Unit Requirements, and such other information
the CITY may be required by law to obtain. The DEVELOPER shall provide any additional
information reasonably requested by the CITY.
C. Annually; beginning on the first day of the month following the CITY's
issuance of the recorded Certficate of Completion for the Project, and continuing until the
expiration of the Agreement,' the DEVELOPER shall submit proof of insurance as required in
Article 9.
22
7.19 Scheduling and,Extension of Time; Unavoidable Delay in Performance. It shall
be the responsibility of the D~VELOPER to coordinate and schedule the work to be performed
so that the Commencement .of the Project and issuance of the Certificate of Completion will
take place in accordance with the provisions of the Agreement and Project Schedule. The
time for performance contained in the Project Schedule shall be automatically extended upon
the following:
!i".
A. The time,for performance of provisions of the Agreement by either party
shall be extended for a period equal to the period of any delay directly affecting the Project or
this Agreement which is caused by: war, insurrection, strike or other labor disputes, lock-outs,
riots, floods,earthquakes,fi~es,casualties, acts of God, acts of a public enemy, epidemics,
quarantine restrictions, freight embargoes, lack of transportation, suits filed by third parties
concerning or arising out of this Agreement, or unseasonable weather conditions. An
extension of time for any of the above specified causes shall be granted only if written notice
by the party claiming such extension is sent to the other party within thirty (30)calendar days
from the date the affected party learns of the commencement of the cause and the resulting
delay and such extension oftime is accepted by the other party in writing. In any event, the
Project must be completed no later than one hundred eighty (180)calendar days after the
scheduled completion date specified in this Agreement,notwithstanding any delay caused by
that included in this section.
B. Any and ,all extensions hereunder shall be by mutual written agreement of
the CITY's Housing and Community Development Division Manager and the DEVELOPER
and shall not cumulatively exceed one hundred eighty (180)days.
7.20 Certificate's)of Completion. Upon completion of the rehabilitation Project, the
DEVELOPER shall:1)certify in writing to the CITY that the Project has been rehabilitated in
accordance with the Final Plans;2)submit to the CITY a cost-certifying final Project budget
where the DEVELOPER shall identify the actual costs of rehabilitation of the Project;3)submit
to the CITY a Certificate of Occupancy for the Project;4)submit to the CITY a recorded Notice
of Completion for the Project;and 5)submit to the CITY an Architect's certification in a form
reasonably acceptable by the CITY. Upon a determination by the CITY that the DEVELOPER
is in compliance with all of the DEVELOPER's rehabilitation obligations, as specified in this
Agreement,the CITY shall furnish, within thirty (30)calendar days of a written request by the
DEVELOPER,a recorded Certificate of Completion for the Project in the form attached as
EXHIBIT "E". The CITY Will not unreasonably withhold or delay furnishing the recorded
Certificate of Completion.Ifthe CITY fails to provide the recorded Certificate of Completion
within the specified time, it shall provide the DEVELOPER with a written statement indicating in
what respects the DEVELOPER has failed to complete the Project in conformance with this
Agreement or has otherwise failed to comply with the terms of this Agreement,and what
measures the DEVELOPER will need to take or what standards it will need to meet in order to
obtain the recorded Certificate of Completion. Upon the DEVELOPER taking the specified
measures and meeting the specified standards, the DEVELOPER will certify to the CITY in
writing of such compliance and the CITY shall deliver the recorded Certificate of Completion to
the DEVELOPER in accordance with the provisions of this section.
"ARTICLE 8. PROJECT OPERATIONS
23
8.1 Operation of the Project. The DEVELOPER shall lease, operate and manage the
Project in full conformity with the terms of this Agreement.
8.2 Occupancy Retiuirements.Two (2) of the ten (10) HOME-Assisted Affordable
Units shall be rented and occupied by, or if vacant, available for rental occupancy by those
whose annual household income at the time of initial occupancy is not greater than fifty
percent (50%) of the most recent annual median income, calculated and published by HUD for
the Fresno Metropolitan Statlstical Area, applicable to such household's size, and at an
affordable rent consistent with HOME Program regulations (as provided at 24 CFR 92.252) for
the term of this Agreement and eight (8) of the ten (10) HOME-Assisted Affordable Units shall
be rented and occupied by,qr if vacant, available for rental occupancy by those whose annual
household income at the time of initial occupancy is not greater than fifty-five percent (55%) of
the most recent annual median income, calculated and published by HUD for the Fresno
Metropolitan Statistical Area, applicable to such household's size, and at an affordable rent
consistent with HOME Program regulations (as provided at 24 CFR 92.252) for the term of this
Agreement the DEVELOPER shall comply with the income targeting requirements of 24 CFR
92.216.
8.3 Leasing the HOME Units. Before leasing any Affordable Units, the DEVELOPER
shall submit its proposed form of lease agreement for the CITY's review and approval. The
DEVELOPER covenants and;agrees to utilize only leases that have been approved in advance
by the CITY. The CITY shall respond to the DEVELOPER's submission of a sample lease
agreement within thirty (30) days. Should the CITY not respond within thirty (30) days of the
lease agreement submittal, the DEVELOPER shall be authorized to use the submitted sample
lease agreement. Additionally, DEVELOPER agrees not to terminate the tenancy or to refuse
to renew or lease with a tenant of the Affordable Units assisted with HOME Funds except for
serious or repeated violation.of the terms and conditions of the lease agreement, for violation
of applicable federal,state.ior local law, or for other good cause. Any such termination or
refusal to renew must be preceded by not less than thirty (30) days' written notice served by
the DEVELOPER or its authorized management entity upon the tenant specifying the grounds
for such action. The DEVELOPER agrees it shall annually report to the CITY the number of
leases that were not renewed or terminated and the reason for such non-renewal or
termination.
8.4 Lease of HOME Units Provisions. In addition to the requirements of 24 CFR
92.253, the leases are subject to the following:
A.The DEVELOPER shall include in its lease agreement for the Affordable
Units, provisions which authorize the DEVELOPER to immediately terminate the tenancy of
any Household of which one or more of members misrepresented any fact material to the
Household's qualification as a Very Low- or Low-Income household. Each such lease
agreement shall also provide'that the Household is subject to annual certification, and that, if
the Household's annual income increases above the applicable limits for Low-Income, such
Household's rent may be subject to increase to the lesser of: (1) the amount payable by tenant
under state or local law; or (2)thirty percent (30%) of the Household's actual adjusted monthly
income.'
24
8.5 Final Management Plan. Before leasing and at least sixty (60)calendar days
prior to the Completion Date, the DEVELOPER shall submit to the CITY, for review and
approval,a plan for marketing and managing the proposed Project ("Final Management Plan").
The Final Management Plan shall address in detail how the DEVELOPER or its designated
management entity plans to market the availability of Affordable Units to prospective tenants
and how the DEVELOPER plans to certify the eligibility of potential Low-Income tenants.The
Final Management Plan shalll also address how the DEVELOPER and/or the management
entity plan to manage and maintain the Affordable Project Units in accordance with HOME
Program regulations at Section 92.251 Property Standards, and shall include appropriate
financial information and documentation.The Final Management Plan shall contain detailed
descriptions of policies and procedures with respect to tenant selections and evictions.Topics
to be covered in these procedures shall include at a minimum the following:
•Interviewing procedures for prospective tenants;
•Previous rental history of tenants with references;
•Credit reports and checks;
•Criminal background checks;
•Deposit amounts, purpose, use and refund policy;
•Employment/Income verification;
•Occupancy restrictions;
•Income Limits;
• Equal Housing Opportunity Statement;
•Restrictions on use of the premises; and
•Tenant/Landlord dispute resolution procedures.
The Final Management Plan shall contain copies of all standardized forms associated
with the above listed topics.The Final Management Plan shall include a form lease agreement
that the DEVELOPER proposes to enter into with the Very Low and Low-Income tenants. The
DEVELOPER shall abide by the terms of this Final Management Plan,approved by the CITY,
in marketing,managing and maintaining the Affordable Project Units.
t
At least ninety (90)'calendar days prior to the Project Completion Date, the
DEVELOPER shall also submit any proposed management contract to the CITY for prior
review. The CITY shall have the right to review any proposed amendments,other than
renewals to the management contract, and any new management contracts during the term of
this Agreement.Such management contract(s) shall contain a provision expressing this right.
8.6 Property Management.The DEVELOPER shall comply with the following:
A.Management Responsibilities.The DEVELOPER directly and/or through
its designated management entity, is specifically responsible for all management functions with
respect to the Project including,without limitation, the selection of tenants,certification and re-
certification of Household size and income, evictions, collection of Rents and deposits,
construction management,-affirmative marketing,maintenance,landscaping,routine and
extraordinary repairs,replacement of capital items and security. The CITY shall have no
responsibility for such management of the Affordable Units.
25
8.7 Maintenance and Security. The DEVELOPER shall at its own expense maintain
the Project in good condition, in good repair and in decent, safe, sanitary, habitable and
tenantable living conditions for the benefit of the Unit occupants. The DEVELOPER shall not
commit or permit any waste on or to the Project, and shall prevent and/or rectify any physical
deterioration of the housing. The DEVELOPER shall maintain the Affordable Units in
conformance with all applicable federal, state and local laws, ordinances, codes and
regulations, the Final Manaqernent Plan, and this Agreement. The DEVELOPER agrees that
its failure to maintain the property in accordance with this section will result in acceleration of
the HOME Loan.
8.8 Nondiscrimination. All of the HOME Units shall be available for occupancy on a
continuous basis to households who are income eligible. The DEVELOPER shall not illegally
discriminate or segregate in the rehabilitation of the complex, the use, enjoyment, occupancy
or conveyance of any part cif the Project or Property on the basis of race, color, ancestry,
national origin, religion, sex,'marital status, family status, source of income/rental assistance
subsidy, physical or mental disability, Acquired Immune Deficiency Syndrome (AIDS) or AIDS-
related conditions (ARC), sexual orientation, or any other arbitrary basis. The DEVELOPER
shall otherwise comply with all applicable local, state and federal laws concerning
nondiscrimination in housing. Neither the DEVELOPER nor any person claiming under or
through the DEVELOPER, shall establish or permit any such practice or practices of illegal
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants or vendees of any Unit or in connection with employment of persons for
the rehabilitation of any Affordable Unit. All deeds or contracts made or entered into by the
DEVELOPER as to the Affordable Units or the project or portion thereof, shall contain
covenants concerning nondiscrlmmation consistent with this section. The DEVELOPER shall
include a statement in all advertisements, notices and signs for availability of Affordable Units
for rent to the effect that the DEVELOPER is an Equal Housing Opportunity Provider.
A. Nothing in this section is intended to require the DEVELOPER to change
the character, design, use or operation of the Project; or to require the DEVELOPER to obtain
licenses or permits other than those required for the Project.
8.9 Rent Schedule and Utility Allowances. The DEVELOPER covenants and agrees
not to charge rent to tenants for HOME Units in an amount which exceeds those rents
prescribed to the Affordable Units as they associate with particular income and rent limitations
levels as established annually by HUD, consistent with the HOME Program requirements
applicable to the Affordable Units in the Fresno, California area, as established by HUD, and
further covenants not to impose a monthly allowance for utility services to tenants of such
Affordable Units in excess of.an amount approved by HUD in accordance with 24 CFR 92.252.
The DEVELOPER agrees to'furnish to the CITY with a certificate setting forth the maximum
monthly rentals for HOME Units and the monthly allowances for utilities and services to be
charged during any annual"period until the expiration of the Affordability Period. The
DEVELOPER shall reexamlrie the income of each tenant Household living in the Affordable
Units on an annual basis..:
ARTICLE 9.INSURANCE AND INDEMNITY
26
Without waiver of limitation, the parties agree as follows regarding the DEVELOPER's
Insurance and Indemnity Obligations:
9.1 Indemnification.,DEVELOPER shall indemnify, hold harmless and defend the
CITY, HUD and each of thejr officers, officials, employees, agents and volunteers from any
and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract,tort
or strict liability,including but not limited to personal injury, death at any time and property
damage)incurred by the Cln',HUD,DEVELOPER or any other person, and from any and all
claims,demands and actions in law or equity (including attorney's fees and litigation
expenses),arising or alleqed to have arisen directly or indirectly our of performance of this
Agreement.DEVELOPER's bbligation under the preceding sentence shall apply regardless of
whether the CITY, HUD or any of their officers, officials, employees,agents or volunteers are
negligent,but shall not apply to any loss, liability, fines, penalties,forfeitures,costs or damages
caused solely by the gross negligence, or caused by the willful misconduct,of the CITY, HUD
or any of their officers, officials, employees, agents or volunteers.
A. If the DEVELOPER should contract all or any portion of the work to be
performed under this Agreement,the DEVELOPER shall require each contractor and
subcontractor to indemnify, hold harmless and defend the CITY and each of its officers,
officials,employees,agents and volunteers in accordance with the terms of the preceding
paragraph.
B. This section shall survive termination or expiration of this Agreement.
9.2 Insurance.Throughout the life of this Agreement, the DEVELOPER shall itself
and/or through its consultant(s),assignee(s),nominee(s),contractors and subcontractors pay
for and maintain in full force and effect all policy(ies) of insurance required hereunder with (an)
insurance company(ies)either (1) admitted by the California Insurance Commissioner to do
business in the State of Calitomta and rated not less than "A-VII" in Best's Insurance Rating
Guide, or (2)authorized by the CITY's Risk Manager. The following policies of insurance are
required:
A. Until issuance of Certificate(s)of Completion,BUILDERS RISK (Course of
Construction) insurance in an amount equal to the completed value of the Affordable Project
with no coinsurance penalty provisions.
B. Following issuance of Certificate(s)of Completion,Commercial Property
insurance which shall be at least as broad as the most current version of Insurance Service
Office (ISO)Commercial Property Form CP 10 30 (Cause of Loss -Special Form), with limits
of insurance in an amount equal to full one hundred percent (100%)replacement cost (without
deduction for depreciation)of the improvements with no coinsurance penalty provisions.Such
insurance shall include coverage for business income, including "rental value", in an amount
equal to the two (2) years of the annual rent generated by the improvements.Coverage for
business income,including "rental value", shall be at least as broad as the most current
version of Insurance Service Office (ISO)Commercial Property Form CP 00 30.
1. The above described policy(ies) of insurance shall be endorsed to provide
that the coverage shall not be cancelled, non-renewed, reduced in coverage or in limits except
",27
after thirty (30) calendar daywritten notice has been given to CITY an unrestricted thirty (30)
day written notice in favor of the CITY, of policy cancellation, change or reduction of coverage.
Upon issuance by the insurer, broker, or agent of a notice of cancellation, non-renewal,
change or reduction in coverage, the DEVELOPER or its contractors/subcontractors, as the
case may be, shall furnish CiTY with a new certificate and applicable endorsements for such
policy(ies). In the event the policy is due to expire during the term of this Agreement, the
DEVELOPER shall provide a new certificate, and applicable endorsements, a new certificate
evidencing renewal of such policy shall be provided not less than fifteen (15) days prior to the
expiration date of the expiri~g policy. Upon issuance by the insurer, broker, or agent of a
notice of cancellation, change or reduction in coverage, the DEVELOPER or its
contractors/subcontractors, as the case may be, shall file with the CITY a certified copy of the
new or renewal policy and certificates for such policy.
2. The Builders Risk (Course of Construction) and Property Insurance
policies shall name the CITY as loss payee. The insurance required herein shall contain no
special limitations on the scope of protection afforded to the City.
3. If at any time during the life of this Agreement or any extension, the
DEVELOPER fails to maintain the required insurance in full force and effect, all work under this
Agreement shall be discontinued immediately, until notice is received by the CITY that the
required insurance has been restored to full force and effect and that the premiums therefore
have been paid for a period satisfactory to the CITY. Any failure to maintain the required
insurance, subject to notice .and cure requirements herein, shall be sufficient cause for the
CITY to terminate this Agreement.
9.3 Bonds. DEVELOPER shall pay for and maintain good and sufficient surety bonds
from a corporate surety, admitted by the California Insurance Commissioner to do business in
the State of California and Treasury-listed, in a form satisfactory to the CITY and naming the
CITY as Obligee..
"A.The "Faithful Performance Bond" shall be at least equal to one hundred
percent (100%) of the DEVELOPER's estimated construction costs, as reflected in the
DEVELOPER's pro forma budget, attached hereto as EXHIBIT "C", to guarantee faithful
performance of the Project,~ithin the time prescribed, in a manner satisfactory to the CITY,
consistent with this Agreement, and that all materials and workmanship will be free from
original or developed defects;
B. The "Material and Labor Bond" shall be at least equal to one hundred
percent (100%) of the DEVELOPER's estimated construction costs, as reflected in the
DEVELOPER's pro forma budget, attached hereto as EXHIBIT "C", to satisfy claims of material
supplies and of mechanics and laborers employed for this Project. The bond shall be
maintained by the DEVELOPER in full force and effect until the Project is completed, and until
all claims for materials and labor are paid, released, or time barred, and shall otherwise comply
with any applicable provisions of the California Civil Code.
C. In lieu of the bonds required above, CITY, in its sole discretion, may
accept from the DEVELOPER an Irrevocable Standby Letter of Credit issued with the CITY
named as the sole beneficiary in the amount(s) of the bonds required above. The Irrevocable
28
Standby Letter of Credit is to be issued by a bank, and in a form,acceptable to CITY. This
Irrevocable Standby Letter of Credit shall be maintained by the DEVELOPER in full force and
effect until CITY is provided with a recorded Notice of Completion for reconstruction of the
Project and shall be subject to and governed by the laws of the State of California."
ARTICLE 10. DEFAULT AND REMEDIES
10.1 Events of Default. Each of the following shall constitute an "Event of Default"for
purposes of this Agreement after the cure period in Section 10.2 has expired without a cure:,
A.DEVELOPER's failure to obtain a Notice to Proceed from the CITY prior to
commencement of physical work on the Project Property.
B.DEVELOPER's use of HOME Funds, for costs other than Eligible Costs or
for uses not permitted by the terms of this Agreement;
C.DEVELOPER's failure to maintain the property to HOME Program
standards as required under this Agreement;
D.DEVELOPER's failure to obtain and maintain the insurance coverage as
required under this Agreement;
J
r
E.Except as otherwise provided in this Agreement,the failure of the
DEVELOPER to punctually and properly perform any other covenant or agreement contained
in this Agreement including without limitation the following: (1) the DEVELOPER's substantial
deviation in the rehabilitation of the Project from the Final Plans,without the CITY's prior
written consent; (2) the DEVELOPER's use of defective or unauthorized materials or defective
workmanship in pursuit of the Project; (3) the DEVELOPER's failure to commence or complete
the Project, unless delay is permitted under Section 7.19 of this Agreement;(4) the cessation
of work on the Project for a period of more than fifteen (15)consecutive days (other than as
provided at Section 7.19 of this Agreement)prior to submitting to the CITY,pursuant to Section
7.20,certification that the Project is complete; (5) any material adverse change in the financial
condition of the DEVELOPER or the Project that gives the CITY reasonable cause to believe
that the Project cannot be completed by the Completion Date according to the terms of this
Agreement;(6) the DEVELOPER's failure to remedy any deficiencies in record keeping or
failure to provide records to the CITY upon the CITY's request; (7) the DEVELOPER's failure
to substantially comply with 'any federal, state or local laws or applicable CITY restrictions
governing the Project, including but not limited to provisions of this Agreement pertaining to
equal employment opportunity,nondiscrimination and lead-based paint;
F.Any representation,warranty, or certificate given or furnished by or on
behalf of the DEVELOPER shall prove to be materially false as of the date of which the
representation,warranty, or 'certification was given, or that the DEVELOPER concealed or
failed to disclose a material lfact to the CITY, provided, however, that if any representation,
warranty, or certification that 1>roves to be materially false is due merely to the DEVELOPER's
inadvertence,the DEVELOPER shall have a thirty (30) day opportunity after written notice
thereof to cause such representation,warranty, or certification to be true and complete in every
respect;
29
G. The DEVELOPER shall file, or have filed against it, a petition of
bankruptcy, insolvency, or similar law, state or federal, or shall file any petition or answer
seeking, consenting to, or 'acquiescing in any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief, and such petition shall not have been
vacated within ninety (90) days; or shall be adjudicated bankrupt or insolvent, under any
present or future statute, law, regulation, under state or federal law, and such judgment or
decree is not vacated or set aside within ninety (90) days;
H. The DEVELOPER's failure, inability or admission in writing of its inability
to pay its debts as they become due or the DEVELOPER's assignment for the benefit of
creditors;'
I.A receiver, trustee, or liquidator shall be appointed for the DEVELOPER or
any substantial part of the DEVELOPER's assets or properties, and not be removed within ten
(10) days;
J.DEVELQPER's breach of any other material condition, covenant,
warranty, promise or representation contained in this Agreement not otherwise identified within
this Section;
K. Any substantial or continuous breach by the DEVELOPER of any material
obligation owed by the DE\f:ELOPER imposed by any other agreement with respect to the
financing, of the Project, whether or not the CITY is a party to such agreement after expiration
of all notice and cure perlods.contained within such document.
10.2 Notice of Defau~lt and Opportunity to Cure. The CITY shall give written notice to
the DEVELOPER of any Eyent of Default by specifying: (1) the nature of the event or
deficiency giving rise to the default, (2) the action required to cure the deficiency, if any action
to cure is possible, and (3)CJ date, which shall not be less than the lesser of any time period
provided in this Agreement, or thirty (30) calendar days from the date of the notice, by which
such deficiency must be cured, provided that if the specified deficiency or default cannot
reasonably be cured within the specified time, the DEVELOPER shall have an additional
reasonable period to cure so long as it commences cure within the specified time and
thereafter diligently pursues the cure in good faith. The CITY acknowledges and agrees that
the DEVELOPER shall have the right to cure any defaults hereunder and that notice and cure
rights hereunder shall extend to any and all partners of the DEVELOPER that are prior
identified in a writing delivered to the CITY in the manner provided in this Agreement.
10.3 Remedies Upon an Event of Default. Upon the happening of an Event of Default
by the DEVELOPER and a failure to cure said Event of Default within the time specified, the
CITY's obligation to disburse any undisbursed Funds shall terminate. The CITY may also at its
option and without notice institute any action, suit, or other proceeding in law, in equity or
otherwise, which it shall deem necessary or proper for the protection of its interests and may
without limitation proceed with any or all of the following remedies in any order or combination
that the CITY may choose in its sole discretion:
A.
DEVELOPER;
Terminate this Agreement immediately upon written notice to the
30
B. Bring an,action in equitable relief seeking specific performance by the
DEVELOPER of the terms and conditions of this Agreement, and/or enjoining, abating or
preventing any violation of said terms and conditions, and/or seeking declaratory relief; and
C. Pursue any other remedy allowed by law or in equity or under this
Agreement.
ARTICLE 11.GENERAL PROVISIONS
Without waiver of limitation, the parties agree that the following general provisions shall
apply in the performance hereof:
11.1 Amendments. No modification or amendment of any provision of this Agreement
shall be effective unless made in writing and signed by the parties hereto.
11.2 Attorney's Fees~If either party is required to commence any proceeding or legal
action to enforce or interpret any term, covenant or condition of this Agreement, the prevailing
party will be entitled to recover from the other party its reasonable attorney's fees and legal
expenses.
11.3 Binding on All Successors and Assigns. Unless otherwise expressly provided in
this Agreement, all the termsand provisions of this Agreement shall be binding on and inure to
the benefit of the parties hereto, and their respective nominees, heirs, successors, assigns,
and legal representatives.
11.4 Counterparts. This Agreement may be executed in counterparts, each of which
when executed and delivered will be deemed an original, and all of which together will
constitute one instrument. The execution of this Agreement by any party hereto will not
become effective until counterparts hereof have been executed by all parties hereto.
11.5 Disclaimer of Relationship. Nothing contained in this Agreement, nor any act of
the CITY or of the DEVELOPER, or of any other person, shall in and by itself be deemed or
construed by any person to create any relationship of third party beneficiary, or of principal and
agent, of limited or general partnership, or of joint venture.
11.6 Discretionary Governmental Actions. Certain planning, land use, zoning and
other permits and public actions required in connection with the Project including, without
limitation, the approval of this Agreement, the environmental review and analysis under NEPA,
CEQA or any other statute, and other transactions contemplated by this Agreement are
discretionary government actions. Nothing in this Agreement obligates the CITY or any other
governmental entity to grant;final approval of any matter described herein. Such actions are
legislative, quasi-judicial, or otherwise discretionary in nature. The CITY cannot take action
with respect to such matters';before completing the environmental assessment of the Project
under NEPA, CEQA and any 'other applicable statutes. The CITY cannot and does not commit
in advance that it will give final approval to any matter. The CITY shall not be liable, in
contract, law or equity, to the'DEVELOPER or any of its executors, administrators, transferees,
successors-in-interest or assigns for any failure of any governmental entity to grant approval
on any matter subject to discretionary approval.
31
11.7 Effective Date.;This Agreement shall be effective upon the date first above
written on Page 1, upon the Parties' complete execution following City Council approval.
11.8 Entire Agreement. This Agreement represents the entire and integrated
agreement of the parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, representations or agreements, either written or oral.
11.9 Exhibits.Each'exhibit and attachment referenced in this Agreement is, by the
reference, incorporated into and made a part of this Agreement.
11.10 Expenses Incurred Upon Event of Default. The DEVELOPER shall reimburse
the CITY for all reasonable expenses and costs of collection and enforcement, including
reasonable attorney's fees, incurred by the CITY as a result of one or more Events of Default
by the DEVELOPER under this Agreement.
11.11 Governing Law· and Venue. Except to the extent preempted by applicable
federal law, the laws of the. State of California shall govern all aspects of this Agreement,
including execution, interpretation, performance, and enforcement. Venue for filing any action
to enforce or interpret this Agreement will be Fresno, California.
11.12 Headings. The headings of the articles, sections, and paragraphs used in this
Agreement are for convenierice only and shall not be read or construed to affect the meaning
or construction of any provision.
11.13 Interpretation.This Agreement in its final form is the result of the combined
efforts of the parties. Any ambiguity will not be construed in favor or against any party, but
rather by construing the terms in accordance with their generally accepted meaning.
11.14 No Assignmentor Succession. The DEVELOPER shall not sell, lease, transfer,
assign or otherwise dispose of all or any material part of any interest it might hold in the
Property without the prior:written consent of the CITY, which consent shall not be
unreasonably withheld or delayed.
11.15 No Third-Party Beneficiary. No contractor, subcontractor, mechanic,
materialman, laborer, vendor; or other person hired or retained by the DEVELOPER shall be,
nor shall any of them be deemed to be, third-party beneficiaries of this Agreement, but each
such person shall be deemed to have agreed (a) that they shall look to the DEVELOPER as
their sole source of recovery if not paid, and (b) except as otherwise agreed to by the CITY
and any such person in writinq, they may not enter any claim or bring any such action against
the CITY under any circumstances. Except as provided by law, or as otherwise agreed to in
writing between the CITY and such person, each such person shall be deemed to have waived
in writing all right to seek redress from the CITY under any circumstances whatsoever.
11.16 No Waiver. Neither failure nor delay on the part of the CITY in exercising any
right under this Agreement shall operate as a waiver of such right, nor shall any single or
partial exercise of any such fight preclude any further exercise thereof or the exercise of any
other right. No waiver of any provision of this Agreement or consent to any departure by the
DEVELOPER therefrom shall be effective unless the same shall be in writing, signed on behalf
32
of the CITY by a duly authorized officer thereof, and the same shall be effective only in the
specific instance for which it is given. No notice to or demand on the DEVELOPER in any
case shall entitle the DEVELOPER to any other or further notices or demands in similar or
other circumstances, or constitute a waiver of any of the CITY's right to take other or further
action in any circumstances without notice or demand.
11.17 Nonreliance. The DEVELOPER hereby acknowledges having obtained such
independent legal or other advice as it has deemed necessary and declares that in no manner
has it relied on the CITY, it aqents,employees or attorneys in entering into this Agreement.
,
11.18 Notice. Any notice to be given to either party under the terms of this Agreement
shall be given by certified United States mail, postage prepaid, return receipt requested, at the
addresses specified below,or at such other addresses as may be specified in writing by the
parties..~
If to the CITY:;City of Fresno
Development and Resource Management Department
Housing and Community Development Division
Attn: Manager
2600 Fresno Street, Room 3070
Fresno, CA 93721-3605
If to DEVELOPER: Fulton Court Partners, LLC
Jeff Altimus, Member
49707 Stillmeadow Lane
Oakhurst, CA 93644
11.19 Precedence ofiDocuments. In the event of any conflict between the body of this
Agreement and any exhibit os attachment hereto or document incorporated herein, the terms
and conditions of the body ofthis Agreement will control.
~
11.20 Recording of Documents. The DEVELOPER agrees to cooperate with the CITY
and execute any documentsrequired,promptly upon the CITY's request, the Deed of Trust,
and any other documents/instruments that the CITY requires to be recorded, in the Official
Records of Fresno County, California, consistent with this Agreement.
11.21 Remedies Cumulative. All powers and remedies given by this Agreement shall
be cumulative and in addition to those otherwise provided by law.
11.22 Severability. The invalidity, illegality, or un-enforceability of anyone or more of
the provisions of this Agreement shall not affect the validity, legality, or enforceability of the
remaining provisions hereof or thereof.
11/
11/
11/
33
IN WITNESS WHEREOF, the parties have executed this Agreement in Fresno,
California, the day and year first above written.
CITY OF FRESNO, a Municipal Corporation
By:__--------,-----
Mark Scott, City Manager;
(Attach notary certificate of acknowledgment)
Date:_
ATTEST:
YVONNE SPENCE, CMC
City Clerk
By:-"-_
Deputy
Date:----'-_
FULTON COURT PARTNERS, LLC
a California limited liability company
By:_
Jeff Altimus,Member
(Attach notary certificate of acknowledqrnent)
Date:_
APPROVED AS TO FORM:
JAMES SANCHEZ
City Attorney
By:_
______, Deputy City Attorney
Date:_
Attachments:
EXHIBIT A:
EXHIBIT B:
EXHIBIT C:
EXHIBIT D:
EXHIBIT E:
EXHIBIT F:
EXHIBITG:
EXHIBIT H:
PROPERTY DESCRIPTION
PROJECT DESCRIPTION AND SCHEDULE
BUDGET
55-YEAR CASH FLOW STATEMENT
FORM OF CERTIFICATE OF COMPLETION
PROMISSORY NOTE
DEED OF TRUST
DECLARATION OF RESTRICTIONS
34
EXHIBIT "A"
PROPERTY DESCRIPTION
APN:459-303-18
Legal Description:
Real Property in the City of Fresno, County of Fresno, State of California,described as
follows:.
LOTS 34, 35, 36 AND 37 IN BLOCK 1 OF FORTHCAMP ADDITION,ACCORDING TO
THE MAP THEREOF RECORDED IN BOOK1, PAGE 17 OF PLATS,FRESNO COUNTY
RECORDS.
Page 1 of 1
EXHIBIT "B"
PROJECT DESCRIPTION AND SCHEDULE
The Project will consist of related on- and off-site improvements,and rehabilitation of
ten (10)Very Low and Low-Income HOME Program housing units, in accordance
with the following chart:
HOME FUNDED FIXED UNITS
Percent of Studio One Bedroom Units
Median Income
50%1 1
55%1 7
Total 2 8
All ten (10) of the units will be reserved as Very Low- and Low-Income Affordable
Units for a period of fifty-five (55) years.
HOME Funds will be made available by the CITY for payment of HOME eligible costs
not to exceed the lesser of Seven Hundred Thirty Three Thousand Twenty Five
dollars and 00/10Oth ($733,025.00),the aggregate HOME Program per unit cap (24
C.F.R. 92.250) for the ten (10)HOME-assisted Units as determined by the CITY, as
needed, for HOME eligible project development costs.
-.PROJECT SCHEDULE
Finance Plan-April 30, 2012
Obtain Building Permits May 5,2012
Start Construction June 1, 2012
Complete Construction June 1,2013
Complete Lease Up August 30,2013
Page 1 of 1
~.:
EXHIBIT C PROJECT BUDGET
Acquisition Costs:
Purchase Price
Liens
Closing,Title &Recording Costs
Extension Payment
Other:_
SUBTOTAL
Construction
Basic Construction Contract
Bond Premium
Infrastructure Improvements
Hazardous Abate.&Monitoring
Construction Contingency
Sales Taxes
Other Construction Costs:Appliances.
Other Construction Costs:.
SUBTOTAL
Development
Appraisal
Architect/Engineer
Environmental Assessment
Geotechnical Study
Boundary &Topographic Survey
Legal
Developer Fee
Project Management
Technical Assistance
Other Consultants:_
Other:_
SUBTOTAL
Other Development
Real Estate Tax
Insurance
Relocation
Bidding Costs
Permits,Fees &Hookups
Impact/Mitigation Fees
Development Period Utilities
Construction Loan Fees
Construction Interest
Other Loan Fees (State HF, etc.)
L1HTC Fees
Accounting/Audit
Marketing/Leasing Expenses
Carrying Costs at Rent Up
Operating Reserves
Replacement Reserves:
SUBTOTAL
Total Development Costs
507,387
5,000
15,500
2,638
530525
733,025
100,000
100000
110,000
3,362
3362
850
8,500
4,650
5,000
19000
3,800
28,000
1,500
500
33800
56,162
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EXHIBIT "0"
55-YEAR CASH FLOW STATEMENT
EXHIBIT "D"
Q
o
..,---,,", ,..,n I 17,392
---------------_.24,918
Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
64,712 65,683 66,668 67,668 68,683 69,714 70,759 71,821 72,898 73,991
64,712 65,683 66,668 67,668 68,683 69,714 70,759 71,821 72,898 73,991
6,471 6,568 6,667 6,767 6,868 6,971 7,076 7,182 7,290 7,399
58,241 59,115 60,001 60,901 61,815 62,742 63,683 64,639 65,608 66,592
17,816 18,440 19,085 19,753 20,445 21,160 21,901 22,668 23,461 24,282
40,425 40,675 40,916 41,148 41,370 41,582 41,782 41,971 42,147 42,310
24,685 24.944 25,194 25,177
17,214
40,166
57,380
63,756
63,756
6,376
:Yijy?tlS';481:1JXi;:L5j,481 "."':.}lS;4sr;:ri:)V2t:t;;'Jij;t5i4S'3!;,'\;.
258.,.0',n_,.__",n_,",n_,
o 0 0 0 8,275 8,49'1 lJ,/U::I lJ,::IU::I ::I,U::IlJ ':J,,l,Il+1'7"'/i;='~:~\J=i~~;2=;':;~=$,:liJJi:(!)~;61'1·"<;?::2.~~::J~{~~R~;?g;@]I!,t,:\::;;:'::,2,~~1"'~.67tl:,i'.'j:~.~91~·70,,1",".,'"'i'~\~;z:1;:I;~!:i)({i2;'i2.1
INCOME:
Income from Rents 1.50%
POTENTIAL GROSS REVENUE:
Vacancy 10%
NET INCOME:
OPERATING EXPENSES:
Annual Operating Expenses 3.50%
NET OPERATING INCOME:
DEBT SERVICE:
Seller Loan ($110,000@6.75% for 10-yrs) 2nd PL
Deferred Developer Fee (4 payments)
HOME ($733,025@1%: pmts: Balloon at 55)1 st PL
CASH FLOW:
Debt Coverage Ratio
ESTIMATED 55-YEAR CASH FLOW STATEMENT
Inflation Year 1
Factor 2014
Year12 Year 13 Year14 Year 15 Year 16 Year 17 Year 18 Year19 Year 20 Year21 Year22 Year 23 Year24 Year 25 Year26
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039
75,101 76,228 77,371 78,532 79,710 80,905 82,119 83,351 84,601 85,870 87,158 88,466 89,792 91,139 92,506
75,101 76,228 77,371 78,532 79,710 80,905 82,119 83,351 84,601 85,870 87,158 88,466 89,792 91,139 92,506
7,510 7,623 7,737 7,853 7,971 8,091 8,212 8,335 8,460 8,587 8,716 8,847 8,979 9,114 9,251
67,591 68,605 69,634 70,679 71,739 72,815 73,907 75,016 76,141 77,283 78,442 79,619 80,813 82,025 83,256
25,132 26,012 26,922 27,864 28,839 29,849 30,894 31,975 33,094 34,252 35,451 36,692 37,976 39,305 40,681
42,459 42,594 42,712 42,814 42,899 42,966 43,014 43,041 43,047 43,031 42,991 42,927 42,837 42,720 42,575
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
I..17,3921.--17,3921··- 17,392 L 17,392 1 17,3921 _.17,3921 ._t7.,3921 .'17,392 I..17,392 17,392 I .17,3!;l2 1 .. 17,392·1_.17,3921 17,392 I 17,392
25,067 25,201 25,320 25,422 25,507 25,574 25,622 25,649 25,655 25,639 25,599 25,535 25,445 25,328 25,183
Year 27 Year 28 Year 29 Year 30 Year31 Year 32 Year 33 Year 34 Year35 Year 36 Year 37 Year 38 Year39 Year 40 Year41
2040 2041 2042 2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053 2054
93,894 95,302 96,732 98,183 99,656 101,151 102,668 104,208 105,771 107,358 108,968 110,602 112,261 113,945 115,655
93,894 95,302 96,732 98,183 99,656 101,151 102,668 104,208 105,771 107,358 108,968 110,602 112,261 113,945 115,655
9,389 9,530 9,673 9,818 9,966 10,115 10,267 10,421 10,577 10,736 10,897 11,060 11,226 11,395 11,565
84,505 85,772 87,059 88,365 89,690 91,036 92,401 93,787 95,194 96,622 98,071 99,542 101,035 102,551 104,089
42,105 43,578 45,104 46,682 48,316 50,007 51,757 53,569 55,444 57,384 59,393 61,472 63,623 65,850 68,155
42,400 42,194 41,955 41,682 41,374 41,028 40,644 40,218 39,750 39,237 38,678 38,071 37,412 36,701 35,934
Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
_1_-,17,392 1 17,3921 17,3921~,17,392 1--17,39:21 .._17,3~21 --17,392 1 -17,392 1 17.,392 1 17,3921Q ,17,3921'd_J7.,3921·,17,3921 17,392.1 ..._17,392
25,008 24,802 24,563 24,290 23,982 23,636 23,252 22,826 22,358 21,845 21,286 20,679 20,020 19,309 18,542
Year42 Year 43 Year44 Year45 Year46 Year47 Year48 Year 49 Year50 Year51 Year52 Year 53 Year54 Year 55
2055 2056 2057 2058 2059 2060 2061 2062 2063 2064 2065 2066 2067 2068
117,389 119,150 120,937 122,752 124,593 126,462 128,359 130,284 132,238 134,222 136,235 138,279 140,353 142,458
117,389 119,150 120,937 122,752 124,593 126,462 128,359 130,284 132,238 134,222 136,235 138,279 140,353 142,458
11,739 11,915 12,094 12,275 12,459 12,646 12,836 13,028 13,224 13,422 13,624 13,828 14,035 14,246
105,650 107,235 108,844 110,476 112,134 113,816 115,523 117,256 119,014 120,800 122,612 124,451 126,318 128,212
70,540 73,009 75,564 78,209 80,946 83,780 86,712 89,747 92,888 96,139 99,504 102,986 106,591 110,322
35,110 34,226 33,279 32,267 31,187 30,036 28,811 27,509 26,127 24,661 23,108 21,464 19,727 17,891
Q Q Q Q Q Q Q Q Q Q Q Q Q Q
0 0 0 0 0 0 0 0 0 0 0 0 0 0
1 17,3921,.H,392 1 17,39~1·,17,3921,17,3921 .17,392 I 17,3921,17,3921.,17,3921 17,3921 17,3921 17,392 1.17,392 ,69,567,1-,"
17,718 16,834 15,887 14,875 13,795 12,644 11,419 10,117 8,735 7,269 5,716 4,072 2,335 -51,676
This page intentionally left blank.
EXHIBIT "E"
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
City of Fresno
City Clerk
2600 Fresno Street, Room 2133
Fresno, CA 93721-3603 City of Fresno
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
CERTIFICATE OF COMPLETION
This Certificate of Completion is recorded at the request and for the benefit of the City of
Fresno and is exempt from the payment of a recording fee pursuant to Government Code
Section 6103.
APN:459-303-18
City of Fresno
By:_
Craig Scharton,Assistant Director
Development and Resource
Management Department
Date:_
Page 1 of 3
REHABILITATION HOUSING PROJECT
APN:459-303-18
Recitals:
A. By a HOME Investment Partnerships (HOME) Program Agreement dated
____, 2012 ("HOME Agreement") between the City of Fresno, a municipal corporation
("CITY"), and Fulton Court Partners, LLC, a California limited liability company (hereinafter
referred to as "DEVELOPER"), agreed to rehabilitation the ten (10) unit Fulton Court
Apartments,of which ten (10) units would be reserved for rental by a Very Low and Low-
Income household ("Project"), upon the premises legally described in EXHIBIT "A" attached
to the HOME Agreement as amended from time to time, made a part hereof by this
reference, (the "Property") for the purposes of the Project, with the assistance of HOME
Funds while meeting the affordable housing, income targeting and other requirements of 24
CFR 92 according to the terms and conditions of the HOME Agreement and the Loan
Documents and other document/instruments referenced therein for the ten (10)Affordable
Units.
B. The HOME Agreement or a memorandum of it was recorded on _
as Instrument No.in the Official Records of Fresno County, California.
C.Under the terms of the HOME Agreement, after the DEVELOPER completes
the Project, the DEVELOPER may ask CITY to record a Certificate of Completion.
D. The DEVELOPER has asked CITY to furnish DEVELOPER with a recordable
Certificate of Completion.
E. The CITY's issuance of this Certificate of Completion is conclusive evidence
that the DEVELOPER has completed construction the Project as set forth in the HOME
Agreement.
NOW THEREFORE:.
1. The CITY certifies that the DEVELOPER commenced the Project on
____and completed the Project on 20_and has done so in full compliance
with the HOME Agreement.
2. This Certificate of Completion is not evidence of the DEVELOPER's
compliance with, or satisfaction of, any obligation to any mortgage or security interest
holder, or any mortgage or security interest insurer, securing money lent to finance work on
the Property or Project, or any part of the Property or Project.
3. This Certificate of Completion is not a notice of completion as referred
to in California Civil Code Section 3093.
4. Nothing contained herein modifies any provision of the HOME
Agreement.
Page 2 of 3
IN WITNESS WHEREOF,CITY has executed this Certificate of Completion as of this
____day of ,20_"
CITY OF FRESNO
By:----"_
Craig Scharton, Assistant Director
Development and Resource Management Department
ATTEST:
CITY CLERK
YVONNE SPENCE,CMC
By:_
Deputy
Date:_
FULTON COURT PARTNERS,LLC
a California limited liability company
By:--"--_
(Attach notary certificate of acknowledgment)
Name:_
Title:_
Date:_
APPROVED AS TO FORM:
JAMES SANCHEZ,CITY ATTORNEY
By:_
Assistant/DeputyCityAttorney
Date:----------
Page 3 of 3
This page intentionally left blank.
EXHIBIT "F"
DO NOT DESTROY THIS NOTE: When paid, this note must be surrendered to Borrower for
Cancellation.
PROMISSORY NOTE
Loan Amount: $733,025.00
Fresno, California
Date:, 2012
For value received, the undersigned, Fulton Court Partners, LLC, a California
limited liability company ("Borrower"), promises to pay to the order of the City of Fresno, a
California municipal corporation, ("Lender"), the sum of Seven Hundred Thirty Three
Thousand Twenty Five dollars and 00/100th ($733,025.00), to the extent that such funds are
loaned to Borrower, with interest on the unpaid principal balance running from the date of the
recorded Certificate of Completion at the rate of 1%annually in accordance with the HOME
Investment Partnerships Agreement dated , 2012, entered into between the
BORROWER and Lender, ("Agreement"), with all the principal and interest due and payable
before the earlier of: (i) Borrower's uncured default under the Agreement with respect to the
Project, and (ii) fifty-five (55)years from the date of this Note, ("Maturity Date"), on which date
the unpaid balance of principal with unpaid interest thereon shall be due and payable, along
with attorney's fees and costs of collection, and without relief from valuation and
appraisement laws.
Principal and interest payments shall be due annually beginning one year from the
recordation of the Certificate of Completion, and said payment continues each successive
year thereafter until the Maturity Date, upon which all principal and interest shall be due and
payable (prorated amounts to be paid for the first and last year of the Note). Any failure to
make a payment required hereunder within ten (10) days after such payments are due shall
constitute a default under the Agreement with respect to the Project and this Note.
Additionally any failure to timely submit to Lender audited financial statements within thirty
(30) days after such financial statements are due shall constitute a default under the
Agreement with respect to the Project and Note. It shall not be a default hereunder if no
payment was made because'of insufficient operating income for any particular year.
All capitalized terms used in this Note, unless otherwise defined, will have the
respective meanings specified in the Agreement. In addition, as used in this Note, the
following terms will have thefollowing meanings:
;~
Business Day means any day other than Saturday, Sunday, or public holiday or the
equivalent for banks generally under the laws of California. Whenever any payment
to be made under this Note is stated to be due on a day other than a Business Day,
that payment may be made on the next succeeding Business Day.
This Note, and any extensions or renewals hereof, is secured by a Deed of Trust,
Security Agreement and Fixture Filing with Assignment of Rents on real estate in Fresno
County, California, that provides for acceleration upon stated events, dated as of the same
56929\126525v3 Page 1 of 4
date as this Note, and executed in favor of and delivered to the Lender ("Deed of Trust"),
insured as a first (1 st )position lien on the Property.
Time is of the essence. It will be a default under this Note if Borrower defaults
under the Agreement,anybther Loan Document with the Lender, or this Note and such
default continues beyond the notice and cure period as provided in such documents. In the
event of a default by Borrower with respect to any sum payable under this Note and the
failure to cure such default within ten (10) days, the Borrower shall pay a late charge equal to
the lesser of 2% of any outstanding payment or the maximum amount allowed by law. All
payments collected shall be:applied first to payment of any costs, fees or other charges due
under this Note or any other Loan Documents then to the interest and then to principal
balance. On the occurrence of an uncured default or on the occurrence of any other event
that under the terms of the Loan Documents give rise to the right to accelerate the balance of
the indebtedness, then, at the option of Lender, this Note or any notes or other instruments
that may be taken in renewal or extension of all or any part of the indebtedness will
immediately become due without any further presentment, demand, protest, or notice of any
kind. Lender acknowledges and agrees that it shall send notice of any default hereunder to
the limited partners of Borrower and shall accept any cure offered by such limited partners on
the same basis as it would accept a cure from Borrower.
The indebtedness evidenced by this Note may, at the option of the Borrower, be
prepaid in whole or in part Without penalty. Lender will apply all the prepayments first to the
payment of any costs,fees,late charges, or other charges due under this Note or under any
of the other Loan Documents and then to the interest and then to the principal balance.
All Loan payments:are payable in lawful money of the United States of America at
any place that Lender or the legal holders of this Note may, from time to time, in writing
designate.'
Borrower agrees to pay all costs including, without limitation, reasonable attorney
fees, incurred by the holder 'of this Note in the successful enforcement of payment, whether
or not suit is filed, and including, without limitation, all costs, reasonable attorney fees, and
expenses incurred by the holder of this Note in connection with any bankruptcy,
reorganization,arrangement;or other similar proceedings involving the Borrower that in any
way affects the exercise by (he holder of this Note of its rights and remedies under this Note.
All costs incurred by the holder of this Note in any action undertaken to obtain relief from the
stay of bankruptcy statutes are specifically included in those costs and expenses to be paid
by Borrower.
Any notice, demand, or request relating to any matter set forth herein shall be in
writing and shall be given as-provided in the Agreement.
No delay or omission of Lender in exercising any right or power arising in
connection with any defaultwill be construed as a waiver or as acquiescence, nor will any
single or partial exercise preclude any further exercise. Lender may waive any of the
conditions in this Note and no waiver will be deemed to be a waiver of Lender's rights under
this Note, but rather will be deemed to have been made in pursuance of this Note and not in
modification. No waiver of any default will be construed to be a waiver of or acquiescence in
or consent to any preceding or subsequent default.
56929\126525v3 Page 2 of4
The Deed of Trust provides as follows:
Except as provided herein or in the Agreement, if the Trustor/Grantor shall sell,
conveyor alienate said property, or any part thereof, or any interest therein, or shall
be divested of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the Beneficiary being first
had and obtained, Beneficiary shall have the right, at its option, except as prohibited
by law, to declare any indebtedness or obligations secured hereby, irrespective of
the maturity date specified in any Note evidencing the same, immediately due and
payable.
Lender may transfer this Note and deliver to the transferee all or any part of the
Property then held by it assecurity under this Note, and the transferee will then become
vested with all the powers arid rights given to Lender; and Lender will then be forever relieved
from any liability or responsibility in the matter, but Lender will retain all rights and powers
given by this Note with respect to Property not transferred.
If anyone or more of the provisions in this Note is held to be invalid, illegal, or
unenforceable in any respect by a court of competent jurisdiction, the validity, legality, and
enforceability of the rernaininq provisions will not in any way be affected or impaired. This
Note will be binding on and inure to the benefit of Borrower, Lender, and their respective
successors and assigns.
Borrower and Lender agree that this Note will be deemed to have been made under
and will be governed by the laws of California in all respects, including matters of
construction, validity, and performance,and that none of its terms or provisions may be
waived, altered, modified,or amended except as Lender and Borrower may consent to in a
writing duly signed by Borrower or Lender or its authorized agents.
This Note shall be nonrecourse to Borrower and all its constituent members and may
be prepaid at any time without penalty. Neither Borrower nor any of its members shall have
any personal liability for repayment of the Loan. The sole recourse of the Lender under the
Loan Documents for repayment of the Loan shall be the exercise of its rights against the
Property pursuant to the Deed of Trust and Lender shall have no right to seek or recover any
deficiency amount from Borrower or any partner of Borrower.
11/
11/
/11
56929\126525v3 Page3 of4
IN WITNESS WHEREOF,Borrower has caused this Promissory Note to be executed
as of the date and year first above written.
FULTON COURT PARTNERS,LLC
a California limited liability company
By:----"_
Name:(Attach notary certificate of acknowledgment)
Title:_
Date:----------'-----
56929\126525v3 Page 4 of4
EXHIBIT "G"
RECORDING REQUESTED BY
Chicago Title Company
AND WHEN RECORDED MAil TO:
City of Fresno
Housing and Community Dev. Division
2600 Fresno Street, Room 3070
Fresno CA 93721-3605
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
File No.:----
A.P.N.:459-303-18
DEED OF TRUST AND ASSIGNMENT OF RENTS
THIS DEED OF TRUST, made this ,2011,by
TRUSTOR:Fulton Court Partners.LLC.a California limited liability company
whose address is 49707 Stillmeadow Lane.Oakhurst.CA 93644
TRUSTEE:First American Title Company.a California corporation
and BENEFICIARY:City of Fresno.a California municipal corporation
Witnesseth:That Trustor IRREVbcABLY GRANTS,TRANSFERS AND ASSIGNS to TRUSTEE IN TRUST,
WITH POWER OF SALE, that property in the City of Fresno, Fresno County, State of California,described as:
See Exhibit "A"attached hereto.
TOGETHER WITH the rents, issues, and profits thereof, SUBJECT, HOWEVER, to the right,power and
authority given to and conferred upon Beneficiary by paragraph 10 of the provisions,incorporated by
reference, to collect and apply such rents, issues and profits.
FOR THE PURPOSE OF SECURING:
1.Performance of each agreement of Trustor, incorporated by reference or contained herein, including without
limitation the HOME Agreement entered between Fulton Court Partners, LLC, a California limited liability
company and Beneficiary dated __,2012.
2.Payment of the indebtedness evidenced by a Promissory Note of even date herewith, and any extension or
renewal thereof, in the principal sum of $733,025 to City of Fresno executed by Trustor in favor of Beneficiary
or order.
3.Payment of such further sums as the then record Owner of said property hereafter may borrow from
Beneficiary, when evidenced by another Note (or Notes) reciting it is so secured.
TO PROTECT THE SECURITY 0F THIS DEED OF TRUST,TRUSTOR AGREES:
(1) To keep said property in g09d condition and repair; not to remove or demolish any building thereon; to
complete or restore promptly and in good and workmanlike manner any building which may be constructed,
damaged or destroyed thereon,and to pay when due all claims for labor performed and materials furnished
therefore; to comply with all laws affecting said property or requiring any alterations or improvements to be
made thereon; not to commit Of permit waste thereof; not to commit, suffer or permit any act upon said
property in violation of law; to cultivate,irrigate, fertilize, fumigate, prune and do all other acts which from the
56929\126543v3 Page 1 of4
character or use of said property may be reasonably necessary, the specific enumerations herein not
excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any fire or other insurance policy may be applied by Beneficiary
upon indebtedness secured hereby and in such order as Beneficiary may determine, or at option of
Beneficiary the entire amount so collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or invalidate any act done pursuant
to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee; and to pay all costs and expenses, including cost of evidence of title and
attorneys' fees in a reasonable sum, in any such action or proceeding in which Beneficiary or Trustee may
appear, and in any suit brought by Beneficiary to foreclose this Deed of Trust.
(4) To pay: at least ten days before delinquency, all taxes and assessments affecting said property, including
assessments on appurtenant water stock; when due, all encumbrances, charges and liens, with interest, on
said property or any part thereotwhlch appear to be prior or superior hereto; all costs, fees and expenses of
this Trust..
Should Trustor fail to make any payment or to do any act as herein provided, then Beneficiary or Trustee, but
without obligation so to do and Without notice to or demand upon Trustor and without releasing Trustor from
any obligation hereof, may:make or do the same in such manner and to such extent as either may deem
necessary to protect the security hereof, Beneficiary or Trustee being authorized to enter upon said property
for such purposes; appear in and defend any action or proceeding purporting to affect the security hereof or
the rights or powers of Beneficiary or Trustee; pay, purchase, contest or compromise any encumbrance,
charge or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any
such powers, pay necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or Trustee, with interest
from date of expenditure at the rate called for in the note secured hereby, or at the amount allowed by law at
date of expenditure, whichever is greater, and to pay for any statement provided for by law in effect at the date
hereof regarding the obligation secured hereby any amount demanded by the Beneficiary not to exceed the
maximum allowed by law at the time when said statement is demanded.
(6) That any award of damages in connection with any condemnation for public use of or injury to said
property or any part thereof is hereby assigned and shall be paid to Beneficiary who may apply or release
such moneys received by him in this same manner and with the same effect as above provided for disposition
of proceeds of fire or other insurance,
(7) That by accepting payment of any sum secured hereby after its due date, Beneficiary does not waive his
right either to require prompt payment when due of all other sums so secured or to declare default for failure
so to pay.
(8) That at any time or from time to time, without liability therefore and without notice, upon written request of
Beneficiary and presentation of this Deed of Trust and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured hereby, Trustee may: reconvey any
part of said property; consent to the making of any map or plat thereof; join in granting any easement thereon;
or join in any extension aqreernent or any agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums secured hereby have been paid, and upon
surrender of this Deed of Trust ahd said Note to Trustee for cancellation and retention and upon payment of
its fees, Trustee shall reconvey. without warranty, the property then held hereunder. The recitals in such
reconveyance of any matters or"facts shall be conclusive proof of the truthfulness thereof. The Grantee is
such reconveyance may be described as "the person or persons legally entitled thereto." Five years after
issuance of such full reconveyance, Trustee may destroy said Note and this Deed of Trust (unless directed in
such request to retain them.)
(10) That as additional security,Trustor hereby gives to and confers upon Beneficiary the right, power and
authority, during the continuance of these Trusts, to collect the rents, issues and profits of said property,
reserving unto Trustor the right,:prior to any default by Trustor in payment of any indebtedness secured
56929\126543v3 Page 2 of4
hereby or in performance of any ~greement hereunder, to collect and retain such rents, issues and profits as
they become due and payable. Upon any such default, Beneficiary may at any time without notice, either in
person, by agent, or by a receiver to be appointed by a court, and without regard to the adequacy of any
security for the indebtedness hereby secured, enter upon and take possession of said property or any part
thereof, in his own name sue foror otherwise collect such rents, issues and profits, including those past due
and unpaid, and apply the same:less costs and expenses of operation and collection, including reasonable
attorneys' fees, upon any indebtedness secured hereby, and in such order as Beneficiary may determine.
The entering upon and taking possession of said property, the collection of such rents, issues and profits and
the application thereof as aforesaid, shall not cure or waive any default or notice of default hereunder or
invalidate any act pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness secured hereby or in performance of any
agreement hereunder after expiration of all applicable cure periods, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for
sale and of written notice of default and of election to cause to be sold said property, which notice Trustee
shall cause to be filed for record. Beneficiary also shall deposit with Trustee this Deed of Trust, said Note(s)
and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the recordation of said notice of default,
and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell
said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels,
and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the
United States, payable at time of sale.
Trustee may postpone sale of aU or any portion of said property by public announcement at such time and
place of sale, and from time to time thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such purchaser its deed conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals in such deed of matters or
facts shall be conclusive proof.of the truthfulness thereof. Any person, including Trustor, Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.,
After deducting all reasonable costs, fees and expenses of Trustee and of this Trust, including cost of
evidence of title in connection with sale, Trustee shall apply the proceeds of sale to payment of: all sums
expended under the terms hereof: not then repaid, with accrued interest at the amount allowed by law in effect
at the date hereof; all other sums then secured hereby; and the remainder, if any, to the persons or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness secured hereby may, from time to time,
by instrument in writing, substitute a successor or successors to any Trustee named herein or acting
hereunder, which instrument, executed by the Beneficiary and duly acknowledged and recorded in the office
of the recorder of the county or counties where said property is situated, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall, without conveyance from the Trustee
predecessor, succeed to all its title, estate, rights, powers and duties, must contain the name of the original
Trustor, Trustee and Beneficiary hereunder, the book and page where this Deed of Trust is recorded and the
name and address of the new Trustee.
(13) That this Deed of Trust applies to, insures to the benefit of, and binds all parties hereto, their heirs,
legatees, devisees, administrators, executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledqees,of the Note secured hereby, whether or not named as Beneficiary
herein. In this Deed of Trust, whenever the context so required, the masculine gender includes the feminine
and/or neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made a
public record as provided by law.
'Trustee is not obligated to notify any party hereto of pending sale under any
other Deed of Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee shall be party
unless brought by Trustee..
(15) The Loan is a nonrecourse obligation of Trustor. Neither Trustor nor any of its general and limited
partners shall have any personal liability for repayment of the Loan. The sole recourse of the Lender under
the Loan Documents for repayment of the Loan shall be the exercise of its rights against the Property.
56929\126543v3 Page 3 of4
(16) The withdrawal, removal and/or replacement of (where applicable) a member of Trustor pursuant to the
terms of articles of organization and/or operating agreement due to a violation by a member of the terms
thereof, or a voluntary withdrawal by a member, and any transfer of interests in the same, shall not constitute
a default under any of the Loan Documents, and any such actions shall not accelerate the maturity of the
Loan.
(17)Beneficiary agrees that thelien of this Deed of Trust shall be subordinate to any extended low-income
housing commitment (as such term is defined in Section 42(h)(6)(B)of the Internal Revenue Code) (the
"Extended Use Agreement")recorded against the Property, provided that such Extended Use Agreement, by
its terms,must terminate upon foreclosure under this Deed of Trust or upon a transfer of the Property by
instrument in lieu of foreclosure, in accordance with Section 42(h)(6)(E)of the Internal Revenue Code,subject
to the limitations upon evictions,'terminations of tenancies and increases in gross rents of tenants of low-
income units as provided in that secnon.
(18) Prior to declaring or takinq.any remedy permitted under Loan Documents, (where applicable)Trustor's
members shall have an additional period of not less than thirty (30) days to cure such alleged default.
Notwithstanding the foregoing,inthe case of a default that cannot with reasonable diligence be remedied or
cured within thirty (30) days,Trustor's members shall have such additional time as reasonably necessary to
remedy or cure such default,burin no event more than ninety (90) days from the expiration of the initial thirty
(30) day period above, and if the Trustor's members reasonably believe that in order to cure such default,
Trustor's members must remove Trustor's managing member(s) in order to cure such default,Trustor's
members shall have and additional thirty (30) days following the effective date of such removal to cure such
default..
(19)Beneficiary shall give the Trustor's members notice of any default under the Loan Documents at the
following address:
In accordance with Section 2924b, Civil Code, request is hereby made that a copy of any Notice of Default
and a copy of any Notice of Sale be mailed to Trustor at Trustor's address hereinbefore set forth, or if none
shown, to Trustor at property address.,
NOTICE: A COPY OF ANY NOTICE OF DEFAULT AND OF ANY NOTICE OF SALE WILL BE SENT ONLY
TO THE ADDRESS CONTAINED IN THIS RECORDED REQUEST. IF YOUR ADDRESS CHANGES, A
NEW REQUEST MUST BE RECORDED.
Except as provided herein or in tfje HOME Agreement, if the Trustor/Grantor shall sell,conveyor alienate said
property, or any part thereof, or any interest therein, or shall be divested of his title or any interest therein in
any manner or way,whether voluntarily or involuntarily,without the written consent of the Beneficiary being
first had and obtained,Beneficiafy shall have the right, at its option, except as prohibited by law, to declare
any indebtedness or obligationS:secured hereby, irrespective of the maturity date specified in any Note
evidencing the same,immediately due and payable.
Signature of Trustor(s):
By:"'--_
Its:
AL':'"""L-=S"':"":IG=-=N"":"'"A=-=T=-U:-::R=-=E=-=S:-:M:::':U:-:":S:::-:T=-:B=":E=-:"":N'::'O=TA7'R=":I=Z=E=-D
J
56929\126543v3 -(,Page 4 of4
EXHIBIT "An TO DEED OF TRUST
..PROPERTY DESCRIPTION
APN:459-303-18
Legal Description:
Real Property in the City of Fresno, County of Fresno, State of California,described as
follows:
LOTS 34, 35, 36 AND 37 IN BLOCK 1 OF FORTHCAMP ADDITION,ACCORDING TO
THE MAP THEREOF RECORDED IN BOOK1, PAGE 17 OF PLATS,FRESNO COUNTY
RECORDS.:
Page 1 of 1
This page intentionally left blank.
EXHIBIT H
RECORDING REQUESTED BY AND for the benefit
of the City of Fresno and is exempt from the
payment of a recording fee in accordance with
Government Code Sections 6103 and 27383.
AND WHEN RECORDED MAIL TO:
CITY OF FRESNO
Downtown and Community Revitalization Dept.
Housing and Community Development Division
2600 Fresno Street, Rm. 3070
Fresno, CA 93721-3605
Title Order No. _Escrow No. _
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
DECLARATION OF RESTRICTIONS
THIS DECLARATION OF RESTRICTIONS,("Declaration"),is executed as of this_
of , 2012 by Fulton Court Partners, LLC, a California limited liability company
("Declarant") in favor of the City of Fresno, acting by and through its Development and
Resource Management Department - Housing and Community Development Division,
("CITY").'
WHEREAS, Declarant is the owner of the real estate in the county of Fresno, state of
California, consisting of APN: 459-303-18, which is more particularly described in Exhibit
"A", attached hereto and made a part hereof (the "Property");and
WHEREAS,Pursuant to a certain HOME Investment Partnerships Program
Agreement dated , 2012 incorporated herein ("HOME Agreement") and
instruments referenced therein, Declarant agrees to utilize, and CITY agrees to provide,
certain HOME Program Funds from the United States Department of Housing and Urban
Development (HUD), to Declarant and Declarant agrees to preserve the Project Units for
Very Low and Low-Income households (collectively "Affordable Units"), subject to the terms
and conditions set forth in the HOME Agreement; and
WHEREAS, the HOME Program regulations promulgated by HUD, including without
limitation 24 CFR Section 92.252, and the HOME Agreement impose certain affordability
requirements upon Declarant-owned property, which affordability restrictions shall be
enforceable on the ten (1 0) Affordable Units for a fifty-five (55) year period; and
WHEREAS, these restrictions are intended to bind Declarant and all purchasers and
their successors.
NOW THEREFORE,:"Declarant declares that the Property is held and will be held,
transferred, encumbered,L1sed,sold, conveyed and occupied subject to the covenants,
restrictions, and limitations set forth in this Declaration, all of which are declared and agreed
to be in furtherance of the proposed Project. All of the restrictions, covenants and
limitations will run with the 'land and will be binding on all parties having or acquiring any
56929\126532v3 Page 1 of 5
right, title or interest in the Property or any part thereof, will inure to the benefit of the City,
and will be enforceable by it. Any purchaser under a contract of sale covering any right, title
or interest in any part of the Property, by accepting a deed or a contract of sale or
agreement of purchase, accepts the document subject to, and agrees to be bound by, any
and all restrictions, covenants, and limitations set forth in this Declaration commencing on
the date the final Project Budget and tenant information is entered into HUD's Integrated
Disbursement and Information System (IDIS), recorded as an administrative amendment to
this Agreement and continuing for fifty-five (55) years thereafter (UAffordability Period").
1. Declarations. : Declarant hereby declares that the Affordable Units are and
shall be subject to the covenants and restrictions hereinafter set forth, all of which are
declared to be in furtherance of the Project and the HOME Agreement, and are established
and agreed upon for the purpose of enhancing and protecting the value of the Property and
in consideration for CITY entering into the HOMEAgreement with Declarant.
2.Restrictions.;The following covenants and restrictions on the use and
enjoyment of the Property; shall be in addition to any other covenants and restrictions
affecting the Property, and all such covenants and restrictions are for the benefit and
protection of CITY, and shall run with the Property and be binding on any future owner's of
the Property and inure to the benefit of and be enforceable by the CITY. These covenants
and restrictions are as folloWs:
a. Declarant for itself and its successor(s) on title covenants and agrees
that from the date of recordation of the CITY's Certificate of Completion, until the expiration
of the Affordability Period it shall cause the ten (10) Project Units to be used as Affordable
Units. Declarant further agrees to file a recordable document setting forth the Project
Completion Date(s) and the Affordability Period when determined by the CITY. Unless
otherwise provided in the HOME Agreement, the term Affordable Project Units shall include,
without limitation, compliance with the following requirements:
(i) Nondiscrimination. There shall be no discrimination against nor
segregation of any person 'Or group of persons on account of race, color, creed, religion,
sex, marital status, national origin, ancestry, or handicap in the sale, transfer, use,
occupancy, tenure, or enjoyment of any of the Property, nor shall Declarant or any person
claiming under the Declarant, establish or permit any practice of discrimination or
segregation with reference to the selection, location, number, use or occupancy of owners
or vendees of the Project and/or Property.
(ii) Principal Residence. Each of the Affordable Units within the
Project upon the Property shall be leased only to eligible Very Low- and Low-Income
households, who shall occupy the Affordable Units as their a principal residence. The
foregoing requirement that the Property tenants occupy the Affordable Units as their
principal residence does not apply to persons, other than natural persons, who acquire the
Property or portion thereof by foreclosure or deed in lieu of foreclosure; or HUD qualified
entities that acquire the Property or portion thereof, with the consent of the CITY.
(iii) Income Requirements. Two (2) of the ten (10) Affordable Units
may be leased only to eligible households whose annual household income at the time of
initial occupancy is not greater than fifty percent (50%) of the most recent annual median
income calculated and published by HUD for the Fresno Metropolitan Statistical Area
applicable to such household's size, and at an affordable rent consistent with the HOME
56929\126532v3 Page 2 of 5
Program regulations, and eight (8) of the ten (10) Affordable Units may be leased only to
eligible households whose annual household income at the time of initial occupancy is not
greater than fifty-five percent (55%) of the most recent annual median income calculated
and published by HUD for the Fresno Metropolitan Statistical Area applicable to such
household's size, and at anaffordable rent consistent with the HOME Program regulations.
3. Enforcement of Restrictions. Without waiver or limitation, the CITY shall be
entitled to injunctive or other equitable relief against any violation or attempted violation of
any Covenant and Restriction.
4. Acceptance and Ratification. All present and future owners of the Property
and other persons claiming by, through, or under them shall be subject to and shall comply
with the Covenant and Re,strictions.The acceptance of a deed of conveyance to the
Property shall constitute an agreement that the Covenant and Restrictions, as may be
amended or supplemented from time to time, are accepted and ratified by such future
owners, tenant or occupant, and such Covenant and Restriction shall be a covenant
running with the land and shall bind any person having at any time any interest or estate in
the Property, all as though"such Covenant and Restriction was recited and stipulated at
length in each and every deed, conveyance, mortgage or lease thereof.
Notwithstanding the foregoing, upon foreclosure by a lender or other transfer
in lieu of foreclosure, or assignment of an FHA-insured mortgage to HUD, the Affordability
Period shall be terminated-if the foreclosure or other transfer in lieu of foreclosure or
assignment recognizes any contractual or legal rights of public agencies, nonprofit
sponsors, or others to take actions that would avoid the termination of low-income
affordability. However, the requirements with respect to Affordable Rental Units shall be
revived according to their original terms, if during the original Affordability Period, the owner
of record before the foreclosure or other transfer, or any entity that includes the former
owner or those with whom the former owner has or had formerly, family or business ties,
obtains an ownership interest in the Project or the Property, the Affordability Period shall be
revived according to its original terms.
5. Benefit.This:Declaration shall run with and bind the Property for a term
commencing on the date this Declaration is recorded in the Office of the Recorder of the
County of Fresno, state of .Californla,and expiring upon the expiration of the Affordability
Period. The failure or delay at any time of the CITY or any other person entitled to enforce
this Declaration shall in no event be deemed a waiver of the same, or of the right to enforce
the same at any time or from time to time thereafter, or an estoppel against the enforcement
thereof.
6. Costs and Attorney's Fees. In any proceeding arising because of failure of
Declarant or any future owner of the Property to comply with the Covenant and Restrictions
required by this Declaration, as may be amended from time to time, the CITY shall be
entitled to recover its costs.and reasonable attorney's fees incurred in connection with the
successful enforcement of such default or failure.
7. Waiver. NeitHer Declarant nor any future owner of the Property may exempt
itself from liability for failure to comply with the Covenant and Restrictions required in this
Declaration; provided however, that upon the transfer of the Property, the transferring
owner shall be released from liability hereunder, upon CITY's written consent of such
56929\126532v3 Page 3 of 5
transfer, which consent shall not be unreasonably withheld, conditioned or delayed.
8. Severability. .The invalidity of the Covenant and Restrictions or any other
covenant, restriction, condition, limitation, or other provision of this Declaration shall not
impair or affect in any manner the validity, enforceability, or effect of the rest of this
Declaration and each shall be enforceable to the greatest extent permitted by law.
9. Pronouns. Any reference to the masculine, feminine, or neuter gender herein
shall, unless the context clearly requires the contrary, be deemed to refer to and include all
genders. Words in the singular shall include and refer to the plural, and vice versa, as
appropriate.::;
10. Interpretation.: The captions and titles of the various articles, sections,
subsections, paragraphs,and subparagraphs of this Declaration are inserted herein for
ease and convenience of reference only and shall not be used as an aid in interpreting or
construing this Declaration er any provision hereof.
11.Amendment. No amendment or modification of this Declaration shall be
permitted without the prior written consent of the CITY and Declarant.
12. Recordation. Declarant acknowledges that this Declaration will be filed of
record in the Office of the Recorder of county of Fresno, State of California.
13. Capitalized Terms. All capitalized terms used in this Declaration, unless
otherwise defined herein,'shall have the meanings assigned to such terms in the
Agreement.
14.Headinqs,The headings of the articles, sections, and paragraphs used in this
Agreement are for convenience only and shall not be read or construed to affect the
meaning or construction of any provision.
15. Neither Declarant nor any of its members shall have any personal liability for
the obligations under this Declaration. The sole recourse of the City shall be the exercise of
its rights against the Property pursuant to the Deed of Trust and Lender shall have no right
to seek or recover any deficiency amount from Declarant or any member of Declarant.
lilt
III
11/
56929\126532v3 Page 4 of 5
IN WITNESS WHEREOF,Declarant has executed this Declaration of Restrictions on
the date first written above.,
DECLARANT:
FULTON COURT PARTNERS, LLC
a California limited liability company
By:~_
Name:(Attach notary certificate of acknowledgment)
Title:.......;..._
Date:-"--_
56929\126532v3 Page 5 of 5
This page intentionally left blank.
EXHIBIT "An TO DECLARATION OF RESTRICTIONS
PROPERTY DESCRIPTION
APN:459-303-18
Legal Description:
Real Property in the City of Fresno, County of Fresno, State of California,described as
follows:
LOTS 34, 35, 36 AND 37 IN BLOCK 1 OF FORTHCAMP ADDITION,ACCORDING TO
THE MAP THEREOF RECORDED IN BOOK1, PAGE 17 OF PLATS,FRESNO COUNTY
RECORDS.
Page 1 of 1
This page intentionally left blank.
EXHIBIT "e"
PROJECT LOCATION MAP
0-ro
~
c::o:;:;ro
(Jo
...J
t5
(])
"e-o,
31\v J.S~M·S
EXHIBIT "0"
EXISTING CONDITIONS
-.~..•r;i
EXHIBIT "E"
SITE PLAN
tJN\T 4-
UN1T 3
UNIT 6
,.I
~--~
1J-.......~.._-_.-...._....
,
142 N.FULTON
EXHIBIT "F"
PROPOSED REHABILITATION
PROPOSED REHABILITATION
Abatement
Certified LBP &asbestos w/certificate of disposal
Demolition
Parking structure &slab
Flat work removal
Removal of 1 tree/trimming of existing trees
Cabinets in kitchen & bath &shower
Concrete
Parking structure slab &laundry room slab
New flat work &sidewalks
Metals
New carports
Car port fencing w/individual gates
Courtyard wrought iron gates at carport area
Wrought iron gates &fence at entryway wall
Miscellaneous metal flashings
Carpentry
Construct water heater enclosure
Construct one laundry room enclosure
Interior doors
Repair sub-flooring in restrooms
Miscellaneous trim repairs
Furnishing
Window blinds
Mechanical
Kitchen &bath sinks and faucets, garbage disposals,
shower valves, new shower/tub combo, new toilets,
new drains.
Additional roof vents on all buildings
Relocate hot water heater
New heating &cooling units,including cook top
hoods &vents
Electrical
Upgrade of panels
Interior light fixtures
Exterior light fixtures
Hot water heater room
Stucco
Patch exterior
$45,250
$
$6,794
$1,950
$4,807
$4,188
$
$10,117
$7,912
$
$18,477
$2,383
$4,150
$9,597
$600
$
$2,192
$19,000
$6,226
$6,655
$800
$
$3,721
$
$38,211
$2,644
$4,100
$39,026
$
$11,201
$2,511
$723
$950
$
$9,489
$
$
$
$
Roofing
Remove existing title,install vapor barrier w/new
batts,install new vents,re-install existing roof tiles,
replace damaged tiles
Windows
Replace windows w/prefab wood
Finishes
Refurbish existing hard wood floors
Vinyl flooring in kitchen &bathroom
Carpet in bedrooms ,
Repair walls w/drywall &plaster skim coat
Interior &exterior painting and windows
Landscaping
New sprinklers,draught resistant plants,ground
cover
Specialties
Apartment signage
Fire Extinguishers
Bathroom accessories
Kitchen &bath cabinets
Counter tops
Two bike racks
Two BBQpits
Construction costs
General Requirements
Overhead &Profit
Construction Contingency
Total Construction Budget
$
$23,805
$
$40,680
$
$10,278
$5,682
$3,608
$19,346
$35,893
$
$14,799
$
$500
$400
$650
$25,480
$7,290
$1,400
$920
$454,405.00
$28,529.00
$24,453.00
$15,500.00
$522,887.00
EXHIBIT "G"
CEQA EXEMPTION STATEMENT
~~KraZaI1&ASSOCIATES,~€lVEO
GEOTECHNICAL ENGINEERING.ENVIRONMENTAL ENGINEERING
CONSTRUCTION TESTING &INSPECTIOlUl1 JAN 12AM1J 131
ENVIRONMENTAL ASSESSMENT CITY CLERK.fRESNO CA
KRAZAN PROJECT NO. 014-11117
CITY OF FRESNO
EXEMPTION FROM THE PROVISIONS OF THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT
THE PROJECT DESCRIBED HEREIN IS DETERMINED TO BE EXEMPT FROM THE
PREPARATION OF ENVIRONMENTAL DOCUMENTS PURSUANT TO THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA) GUIDELINES (CALIFORNIA CODE OF
REGULATIONS §15000 ET SEQ)
APPLICANT:
PROJECT LOCATION:
PROJECT DECRIPTION:
EXPLANATION:
City of Fresno, Development and Resource Management
Department.
142North Fulton Avenue, Fresno, California
The City of Fresno proposes to provide HOD HOME Program Grant
funds for the rehabilitation of existing structures by Fulton Court
Partners, LLC on one parcel of property,approximately 0.39 acres in
size, located at 142 North Fulton Avenue in Fresno,Fresno County
Assessor's Parcel Number (APN) 459-303-18. Ten units of the
existing five building apartment complex are proposed for moderate
rehabilitation to interiors, garage area, courtyard, backyards and front
entrance.
Public Resources Code 21080.14 provides exemption for actions
related to the construction, conversion, or use of lower-income
housing projects of 100 units or less in urban areas,provided the site
is less than 5 acres, not a wildlife habitat and is assessed for
environmental conta:minants.The proposed project includes 10 units,
is approximately 0.39 acres in size, is not a wildlife habitat and was
found to have no recognized environmental conditions based upon an
October 31, 2011 Phase I Environmental Site Assessment.Therefore,
environmental review under the provisions of CEQA is not required.
DATE:January 3, 2012
OJ -<J..
Arthur C. Farkas
t..)PREPARED BY:M 0 Registered Environmental Assessor..:z:0 --(/)
W x:\.l..J
>-<r a::::
LL..-~~W N ~
U a::::SUBMITTED BY:\.l..JW:z:-.J Mark Scott, City Managera:::<C w.....,
City of FresnoC'ol >-
~~
C"o;I D
City of~BEA.·~I~.-n=-~."I~~REPORT TO THE CITY COUNCIL
March 29, 2012
FROM:
CLINTON J.OLIVIER
Council President
AGENDA ITEM NO ..
COUNCIL MEETING-rr1TI APPROVED BY~r:;I-tE~.-·-_·------
SUBJECT:
BACKGROUND
CONSIDER CHARTER REVIEW COMMITTEE RECOMMENDATIONS,ITEMS· 1-
55.
On September 30,2010 Council Members Andreas Borgeas and Lee Brand brought forth a proposal to
establish a Charter Review Committee (CRC). Resolution 2010-219 was adopted on September 30,2010 with
a 5-2 vote. Each Council Member appointed a commissioner and the Mayor appointed two for a total of 9
commissioners. The commissioners' backgrounds included private sector businessmen, former elected and
appointed officials and practicing attorneys.
The CRC met regularly from July 26, 2011 to February 7, 2012. During the months of January and
February 2012, the CRG met once a week. These meetings were subject to the Brown Act and were video
record~~./The"City Manager and City Attomey attended every meeting and provided input during
dellber tiOns.The Mayor and all Council Members appeared to discuss their perspectives on various topics
consid red by the CRC The CRC also communicated extensively with and sought input from public
organizations such as the Chamber ofCommerce, League of Women Voters and EI Concilio de Fresno.
On March 1, 2012, the CRC chair, Bill Stewart made a presentation regarding the CRC's deliberations
that resulted in 55 recommendations. The 55 items contained 32 additional items from the 23 that were
originally submitted for review. Some of the items recommend Charter amendments requiring placement on a
.future ballot for voter approval, while others recommend policy changes not necessitating voter approval. For
ease of Council review, these items are divided into 4 groups for Council consideration. The initial group is
those items necessitating voter approval of Charter amendments for the November 2012 General Election
ballot.
Procedurally, we are agendizing the item for consideration on the April 5
th Council meeting and then
continuing the meeting over subsequent council meetings until Council has reviewed all of the CRC
recommendations.
:~~ent"to Ci,~;~~
Dispositon!oJA _-;La
___..~Z4JI(
--_..-.....r
bd.Jt,+c&/1~d(Jra-f,IJh..,j k-t(
la.l~arer-10 /I e.d-l11.eefIH.j
This page intentionally left blank.
Report of the City of Fresno
Charter Review Commission
February 7, 2012
Fresno,California
I
I~
TABLE OF CONTENTS
EXECUTIVE SUMMARY 3
ABOUT THE COMMISSION 3
ABOUT THE PROCESS 4
ISSUES RAISED BY RESOLUTION 2010·219 FOR CONSIDERATION AS CHARTER
PROVISIONS :5
POLICY OBSERVATIONS AND RECOMMENDATIONS 17
CONCLUSiON 21
APPENDICES 23
REPOI1T OFTHE CITY OF FRESNOCHARTERREVIEW COMMISSION
February 7,2012,
EXECUTIVE SUMMARY
The Commission met from July 26,2011 to February 7,2012 and faithfully
considered each of the twenty-three (23) items it was charged with discussing,as well
as 32 additional itemsput forth during-the deliberations.
What follows are the Commission's recommendations as to 23 Council
suggested Charter revisions and numerous policy suggestions during the course of
deliberations.
ABOUT THE COMMISSION
In 1993 the citizens of the City of Fresno chose to implement the Strong Mayor
form of government. Fresno is one of four cities in California with the Strong Mayor
format. Others are San Diego,Oakland,Los AngeJes and San Francisco. This format
is currently being considered by Sacramento,
Prior to the 1993 election.a prior Charter Review Commission was appointed.
The citizens of Fresno owe a debt of great gratitude to this Commission because it did
its job very well,Appendix I is a copy of the 1992 report.Appendix II is a copy of the
current Charter.
In 2010 members of the City Council decided it was time to review the Charter
and consider revisions,additions and deletions to it.
Over several months the Council and Mayor debated the scope and charge of
the Commission.
On November 12, 2010 the City Council voted 5 to 2 to move forward with a new
Charter Review Commission, On that date the Council issued Appendix III, which is
titled Resolution 2010 - 219.Appendix III is the source document given to the
Commission to guide it in its deliberations,including the requirement of a super majority
as to certain actions,
Thereafter each Council Member and the Mayor,independently and not in
consultation with each other,appointed nine Commissioners.The appointed
Commissioners were:
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION'
February 7. 2012 3
Many of the Commissioners had extensive experience as city council members,
commissioners,as elected officials or governmental administrators. Others had
community leadership experience. All were committed to effectuating the best possible
governance for the City of Fresno.
The Commissioners were convened at a meeting held at City Hall on July 26,
2011 and sworn in. At the-second meeting·the Commission selected Bill Stewart as its
Chair and Riley Walter as Vice Chair.Walter was also designated as the scribe for this
Report. Dr. Stewart had also chaired the 1992 Commission.
ABOUT THE PROCESS
From July 26, 2011 to February 7, 2012 the Commission met every month. For
several months meetings were held twice per month. Beginning in January, 2012 the
Commission met on a weekly basis and, always in compliance with the Brown Act.All
meetings were video recorded. .
Early in the existence of the Commission it was determined that the
Commissioners wished to hear from as many people from as many different
communities and viewpoints as possible. An expansive net was cast and over 50
organizations were invited to provide commentsto the Commission.
At virtually every meeting comments were taken from interested persons and
organizations.
The listing of the persons who made presentations to the Commission or
submitted written materials is shown on Appendix IV:
Of particular note,every Council Member appeared at least once to give his
views to the Commission, as is shown above.
The Mayor also freely participated in the discussions and gave the
Commissioners the benefit of her views, as did the City Manager.
All sessions were videotaped, recorded, and conducted in accordance with the
Brown Act.Those recordings are available for review through the City Clerk's Office.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012 4
The City Manager, Mark Scott, was present at almost every meeting as was the
City Attorney, James Sanchez. Both Mr. Scott and Mr. Sanchez contributed greatly to
the discussions and deliberations..
Once all comments had been received the Commissioners then met to narrow
the discussion items down into two broad groups -Charter Issues and Non- .
Charter/Policy Issues.
After determining which of the 23 items on Appendix III were in the nature of
Charter.issues, the Commission then.debated and discussed each of these items. The
recommendations of the Commissioners as to the 23 items are found below. The
Commission then considered 32 other issues brought before it.
ISSUES CONSIDERED AS CHARTER PROVISIONS
Below are the 23 issues the Commissioners were directed to address by
Resolution 2010-219. The comments of the Commission are italicized. The Resolution
also allowed the Commission to consider items other than the 23 but dictated that a
super majority of the Commission was required for such consideration.Items 24 - 55
are the items presented to the Commission outside the 23 items provided by the
Resolution.
1.Whether the creation of an Emergency Reserve Fund is by setting
aside and maintaining a percentage of General Fund appropriations.
By a unanimous 7-0 vote the Commission recommends the inclusion of the
following language in the Charter:
"The City Council shall establish a Specific Reserve
Management Policy to control future spending,enhance the
City's credit rating, and establish reserve policies to meet the
City's debt obligations. A supermajority vote of the Council
shall be required for amendment to the policy."
2.Whether to amend Charter Section 1233 to reduce the 20% limit
on General Obligation Bonds to 10% of City assets, and to add a provision
that places a limit of 10% on the net debt service for General Fund
appropriations..
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSiON
February 7,2012 5
In consideration of the recommendations for Charter
revisions shown at 1, 3 and 4 it was decided by a 7-0 vote
that this item was not necessary..
3.Whether to require a super majority vote on all debt financing
decisions not contained in the adoption ofthe annual budget by the
Council.
The Commission recommends by a unanimous 7-0 vote to include the following
language in the Charter:
"The City Council shall establish a debt management
ordinance(s)for the purpose of issuing and managing the
City's debt (including other financial obligations exceeding
one year in length,except those required by state or federal
law orobligalions arising from contracts with the City's
employees),consistent with sound financial management
practices. The Controller shall certify prior to each issuance
decision the specific funding source(s) for repayment of the
debt and the reliability of the funding for the life of the debt. A
supermajority of the City Council shall be required to amend
the debt management ordinance(s),authorize debt
inconsistent with the debt management ordinance(s),or to
authorize debt other than as part of the adoption of a
budget."
4.Whether to establish a charter section that would trigger due
diligence and oversight policies, using a private sector banking model;
require the City Attorney and City Manager to provide written reports to the
Council and require a super majority vote to approve, for any request for
financial assistance exceeding $1,000,000.
The Commission recommends by a unanimous vote of 7-0 the inclusion of the
following language in the Charter:
"The City Council shall establish an ordinance(s)
regarding the procedures and scope for conducting a due
diligence process for any proposed project that includes a
request for direct or indirect financial assistance,including·
extension(s)or renewal(s)of assistance but excluding City
requests for proposal(s),that exceeds $1,000,000 or one"
half percent (.5%)of the general fund revenues for the
preceding fiscal year,whichever is greater. The due
diligence process shall include any material financial, legal,
business, legislalive,and regulatory issues associated with
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012 6
the proposed project Any amendments to the ordinance(s).
describing this due diligence process or approval of a
proposed project that requires this due diligence process
shall require approval of a supermajority of the City Council."
5.Whether the City should require a Fiscal Impact Report that
includes a detailed financial analysis of wage and benefit costs and an
actuarial report,if deemed necessary by the City Manager,for <111
Memorandum of Understanding labor agreements.
Bya unanimous vote the Commission concluded this
is a policy issue and recommends the Mayor and Council
continue on with the Labor Management Act.
6.Whether the Council should affirm, by majority vote, the hiring of
the City Manager and .his/her compensation contract,assuming reasonable
affirmation not be withheld.
The Commission unanimously agreed this is
unnecessary. The Mayor,as chief executive of the City,
should decide who will be the City Manager.
7.Whether the Charter clearly identifies the jurisdictional authority to
organize and structure administrative departments lies with the Mayor,
subject to Council confirmation.
Bya 5-3 vote the Commission recommends the
adoption of the following language for the Charter:
"The Mayor shall, in conjunction with the Chief
Administrative Officer,subject to the budgetary authority of
the City Council,provide for the creation of departments,
divisions, offices and agencies, and for their consolidation,
alteration or abolition. No office provided in this Charter to be
filled by appointment by the Chief Administrative Officer may
be consolidated with an office to be filled by appointment by
the Council. The Council,subject to the provisions ofthis
Charter, shall provide for the number, titles,qualifications,
duties and compensation of all appointive officers and
employees."
8.Whether the Charter should require annual budgets be in a two
year format and also include extended projections.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012 7
The Commission unanimously agreed this is
unnecessary as a Charter provision.Extended projections
are already prepared and provided to the Council.
9.Whether the Mayor shall release the proposed budget to the
Council at least sixty rather than thirty days prior to the beginning of each
fiscal year (§ 1203).
The Commission agreed this is unnecessary as a
Chatter provision.Consensus was that a policy position
should be taken urging release of the Mayors recommended
budget at least 45 days prior to the end of the fiscal year.
10.Whether the Mayor's veto powers should extend to all legislative
land use decisions(§605 (c)(2).
The Commission unanimously agreed this is unnecessary
as a Chatter provision.
11.Whether the Mayor should have veto authority over the decisions
of the Civil Service Board (§ 1002).
The Commission unanimously recommends that the
Council adopt policy language urging the Mayor and Council
to review policy,procedures and term limits for the Civil
Service Board Commissioners.
12.Whether a separate entity instead of the Council should establish
Council and Mayor compensation (§ 308).
The Commission unanimously agreed this is
unnecessary as a Chatter provision.
13.Whether a provision should be included in the Charter, as a
counterpart to §706, that would provide that the Mayor, City Manager, and
Staff shall not interfere with the execution by the City Council and of its
legislative powers and duties (related to §500 et seq.).
The Commission unanimously agreed this is
unnecessary. and not wotthy of Chatter revision.
14.Whether a 'provision should be included in the Charter that
information requests by Council be responded to by City Staff in a timely
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION'
February 7,2012 8
fashion relative to the time sensitivity of the subject matter and the
responsebe sufficiently detailed to provide an adequate answer.
The Commission unanimously agreed this is
unnecessary as a Charter provision
15,Whether Council should have the exclusive authority to appoint
and remove their respective Council assistants (§500),
The Commissioners unanimously agree that the
following language should be made a part of the Charter:
"Each Councilmember shall neve-the right to appoint
and remove his or her own Council Assistant(s),"
16,WhethertheCharter should provide that the Council Presidency
is based on a rotational system with majority confirmation ..'
Bya 7 to 1 vote the Commission concluded this need
not to be made a Charter provision but does recommend the
Council confirm the current policy of rotation.
17.Whether the City's campaign contribution policy should be
modified (§ 309).
Bya 6-2 vote the Commission recommends the
following revision to the Charter:
"No Mayoral candidate,Council candidate, or any
committee controlled by such person shall solicit or accept
any contribution in support of such candidate's election prior
to one year of the first date fixed by law for the filing of
.nomination papers with respect to such election,or 120 days
after Council declares the results of the election, that a
candidate has been elected to that office."
18.Whether the Charter should include a provision obligating City
employees to report suspected illegal activities to the City Attorney's or City
Manager's office.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012 9
As this is superseded by a host of federal and state
laws, it is not necessary to revise the Charter to include this
provision. While clearly a good idea, it is not a Charter issue.
19.Whether the Mayor should be able to maintain separate legal
counsel.
On a 6-1 vote, the Commission recommends as a policy,
and in the event #55 is not enacted, that the Council should
budget a reasonable amount, on an annual basis,for the
Mayor to engage outside,independent legal counsel and
form an attorney-client relationship to provide the Mayor with
confidential advice,recpgnizing the City Attorney is the legal
representative of the City.
20.Whether a provision should be included in the Charter which
would enable Council to direct the City Controller to respond to financial
inquiries posed by Council without processing such inquiries through the
City Manager, assuming such inquiries would not pose an unreasonable
burden on staff or otherwise interfere with the City Manager's
administrative service under section 706.
Consistent with several other issues presented by
Resolution 2010-219, the Commission notes that the
administration flows through the Mayor and City Manager
and this suggested provision,like others,undermines that
principle.Unanimously deleted from consideration.
21.Whether the City Controller shall submit directly to Council a
quarterly financial statement (§804 (c)).
The Commission unanimously recommends that the
Charter be revised to require a quarterly financial statement
from the Controller received through and from the City
Manager.
22.Whether the Controller should certify: 1) the specific funding
source(s)for all newly created programs; and 2) the reliability of funding for
the life of the program, In the case of defunding,where the monies are
transferred.
REPORT OF THE CITY OF FRESNO CHARTEH REVIEW COMMISSION
February 7,2012 10
The Commission unanimously agreed this is
unnecessary as a Charter provision.
23,Whether the organizational structure and role of the RDA and the
City should be examined to eliminate redundancies in services and develop
a more efficient model for revitalization,.
Unanimously deleted further consideration of this
item,
Items 24 -55 are those proposed by various Commissioners, Council
members, citizens and organizations,
Items 24 -55 were presented to the commissioners for consideration as
Charter provisions by interested persons;Based on Resolution 2010-219
a supermaj.ority of the G.ommissioners.had to agree .to consider.these
items for that action.
24,Whether the Charter should provide for reverse auctions for City
purchasing,
Bya 7-0 vote the Commission recommended the
following be adopted as a Charter revision:
"Every contract involving an expenditure of City
moneys of more than $100,000,adjusted annually on the
first of July to the nearest $1,000 in response to changes in
the National Consumer Price index (U S.city average for all
products), for materials, supplies,equipment or for any
public work of improvement shall be made only to the
winning responsive and responsible bidders at a publicly
noticed,competitive bidding process. The Council may by
resolution or ordinance determines the procedures for such
competitive bidding and define public work of improvement."
25. Whether the Charter should include a provision for a Council
financial/budget staff person appointed by and reporting to Council
The Commission unanimously agreed this is
unnecessary as a Charter provision.
26.Whether new council members should be trained to adhere to
stewardship standards/commitment.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012 11
i :
The Commission unanimously agreed this is
unnecessary as a Chertet provision..
27.Whether the Commission should recommend a study calling for
pension reform.
The City is already studying this issue so it was
unanimously deleted from furlher consideration by the
Commission.
28.Whether alternatives to Civil Service Commission should be
considered.
The Commission unanimously agreel1 this is
unnecessety as a Charter provision.
29.Whether city zoning should be consistent with adopted General
Plan.
By unanimous vote it is recommended the Council
adopt the following policy:
It is recommended that the Council adopt a
streamlined process for initiation of rezoning consistent with
a newly adopted general plan.
Following the adoption of the 2035 General Plan, the
City should allow for pro-active rezone for all requesting
properly owners to rezone their properly to be consistent
with the zoning designation(s)in the 2035 General Plan and
would streamline the rezone process for numerous properly
owners on a voluntary basis, with properly effectively being
rezoned even before an entitlement application was
submitted to the City.
A pro-active rezone concept could be accomplished
by including an appropriate policy in the 2035 General Plan,
giving notice of the City's emottizetion ordinance for non-
conforming uses,and following the current zoned district
amendment procedure in the Fresno Municipal Code. The
rezone proceeding could be initiated by City Council
resolution with the property owners either acting as co-
applicants or consenting to the rezone process in writing.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7. 2012 12
The period in which property owners are allowed to
pro-actively rezone their property in conformance with the
2035 General Plan should be the longest reasonable period
consistent with CEQA and the environmental impact report
associated with the 2035 General Plan.All such requests
should be processed solely on an administrative,shall-issue
basis for a fee approximately equal to Ihe anticipated cost to
process such a request.
Subsequent to the end of Ihe pro-active zoning
period, the City should designate an administrative rezoning
officer to approve rezoning of property consistent with the
zoning designation(s)in the 2035 General Plan, upon the
property owners'request,and without requiring any
additional approvaffrom the Planning COmmission or City
Council.
30.Whether to return to Council-Managerfonn of government.
The Commission unanimously agreed this is
unnecessary as a Charter provision
31.Whether to have Office of Independent Review to be a Charter
mandated position with specific reporting requirements, duties and
authorities.
Bya majority vote, as a policy it is recommended that
the existing position be budgeted and filled. It is also
recommended that the City request the District Attorney to
reinstitute making investigations.
32.Whether the City Charter should permit proposals from private
companies to provide City services.
Unanimously deleted from consideration -with the
notation that this is already permitted.
33.Whether to make ita requirement that all positions within Mayor's
Office to be accounted for to reflect true cost.
The Commission unanimously agreed this is
unnecessary as a Charter provision
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012 13
34.:Whether to have Mayor and Council to make a concerted effort
to represent Fresno diverse population in appointments to Boards and
Commissions.
The Commission unanimously recommends adoption
of the following as a Charter provision:
"The City and its elected officials are encouraged to
make appointments to City boards,commissions and
committees that reflect the city's rich cultural,geographic
and social diversity. "
35.Whether to expand Gity Council membership from seven to nine
given the increase in population.
Commission felt that the people recently voted on this
item to amend the City Charter to not increase council
membership and recommends the Council consider
expansion to nine members when City population reaches
750,000.
36.Whether to have two year moratorium on City employees
conducting business with City.
Unanimously approved to be deleted from
consideration.
37.Whether the Charter should prohibit privatization of City services
without a vote of the people.
Bya vote of 8-1 the Commission approved deletion
from further consideration.
38.Whether to create a single Department of Transportation
including bus service and airport, etc.
The Commission unanimously agreed this is
unnecessary as a Charter provision.
39.Whether to make the City prohibited from participating in a joint
powers entity with, or otherwise providing leases or other credit
enhancements to, the Redevelopment Agency.
REPORT OF THE CITY OF FRESNO CHAHTER REVIEW COMMISSION
February 7,2012 14
By vote of 7-1 the Commissioners voted against this
as a Charter revision.
40.Whether to have City be prohibited from participating in a joint
powers entity with, or otherwise providing leases or other credit
enhancements to the Redevelopment .Agency, unless the RDA Board
appoints the City Manager as the ED of the Agency, and unless state law is
amended to include the Mayor as a Member of the RDA Board,consistent
with the treatment accorded the mayors in Charter Cities in the County of
San Bernardino pursuant to Health and,Safety Code Section 33200(a)
(and with the powers accorded such Mayors in such provision).
By vote of 7-1 the Commissioners voted against this
as 'a Chetterrevieion..
41. Should the'Charter define "materiality",
Having concluded it is impossible to define
"materiality"with the requisite precision, it was concluded
unanimously to delete this item from consideration.
42.Whether to have the Charter define what elements at a minimum
should be in the annual budget document submitted by Mayor/CM to
Council.
It is recommended that the City Council and Mayor
devise a policy as to what should be the presentation
structure of the annual budget, reflecting the best practices
known and available.
43,Additional citizen suggested items. Items 43,44,45,46,47,48,
49, 50 and 51 were unanimously approved to be deleted from
consideration, Item 44 was considered in conjunction with Items 1-4. As to
Item 48, see below.
43.Building/development fees should pay for new schools
prior to homes being constructed in an area.
44. The City of Fresno should eliminate the Fresno Police
Department and contract with the Fresno County Sheriff to
provide law enforcement in the City,transitioning current
officers to the County. (see item 45)
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012 15
45. Increase efforts to force the federal government to
enforce immigration laws for illegal immigrants arrested by
the Fresno Police Department.
46.Prohibit the City from investing in or engaging in
public/private partnerships,including loan or other financial
guarantees,but excluding the operations of the RDA.
47.Eliminate any connection with SEIU.
48. Reduce and/or eliminate City regulatory limits on building
and construction,particularly in regards to permitting.The
commenter specifically suggested we consider the recent
changes the City of Sanger has done for its permitting
process.
The.Commission.recommends by a 7-1
vote tl1atthe City Council and Mayor examine
the permit process to reduce the steps and
barriers to issuances of permits to streamline
the process and keep the approved steps to
the minimum legal standard.
49.Prohibit Section 8 housing near Fresno State, via zoning
or otherwise.
50. Impose a moratorium on new housing project permits
until the market can digest the existing housing inventory.
51.Recommend that the City address traffic light timing
issues created by either recent syncing/timing of lights on
major arteries and/or by rapid transit busses.I believe the
commenter wanted more demand timing of traffic lights on
the non-synced arteries,instead oftiming periods where no
cars are crossing an intersection.
52.Whether the Charter should require consolidation of services.
Bya 7-0 vote this item was deleted from further
consideration.
53.Whether the Charter should provide for the Mayor as President of
the Council.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012 16
Bya vote of 5-3 this item was deleted from
consideration.
54.Whether the Charter should require an independent body to draw
council boundaries.
The Commission unanimously voted 8-0 to delete this
from consideration.
55.Whether the City Charter should be amended to give the Mayor
authority to appoint the City Attorney.
Bya vote of 6-3,a supermajority oithe
Commissioners voted to include a Charter revision
consistent with the recommendation of the 1992
Commission as follows:
"The Mayor shall hire and fire the City Attorney
subject to the approval of a majority of the City Council:"
By way of explanation,the supermajority was the
opinion that the recommendation of the 1992 Commission
was sound then and if enacted now it would better serve the
interest of the City as a whole, and reduce/eliminate
numerous areas of friction and promote greater
independence in representation and advice.
POLICY OBSERVATIONS AND RECOMMENDATIONS
Over the course of the discussion,deliberations and testimony, the Commission
observed that there are a number of general comments that might be made which could
aid the counsel in improving the governments of the city.Below are a series of such
observations and recommendations.
1.NON·CHARTER RECOMMENDATIONS:
At the outset, the Commission was well aware of the requirement that
consideration of any item outside the original list of 23 items set out on Appendix
II, required a super majority vote.Nonetheless,over the course of the
Commission's existence and deliberations,it became apparent that there were
numerous items that, although not per se charter level, were of important policy
level consideration and deserving of comment.
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012
18
The below listing is fairly general in nature and is intended to be advisory
and worthy of discussion by the Council and Mayor at the policylevel.The points
made below are not in any order of importance.
1.1 Strong Mayor Format
During the discussions interest in a Council Manager form of
government was suggested by a few however a majority of the
.Commissioners were not in agreement with this. However, it was plain
that the Council may be having some reluctance to migrate toward full
implementation of the Strong Mayor Format.
In reviewing the original Little Hoover Commission Report and the
Report of the 1992 Commission,the majority of the Commissioners felt
this issue had been well stated in the 1992 Report wherein it was said:
"The Committee feels that the Mayor, as
the single official elected City-wide,must be .
given the authority to compel legislative action
and to subdue, by veto, any action conceived
which has as its results the denigration of
effective governance."
"The Mayor should be considered not
only as a presiding officer and ceremonial
officer, but as the leader in setting agendas.
Local governance must rely on a popularly
elected Mayor;authority to perform must be
provided and power to initiate action must be
included."
The Commission understands that human nature tends to resist
giving up perceived prerogatives and power, but for effective governance
the agenda should be set by the Mayor and the policies set by the
Council, followed by implementation by the administration.The tensions
over these roles should be lessened for the good of the City. Micro
management by the Council is inconsistent with the above quote from the
1992 Report.
1.2 Role of City Attorney
A majority of the Commissioners perceived there is considerable
tension between the Executive Branch and Legislative Branch relative to
the role and function of the City Attorney's Office. The majority perceives
that the Mayor cannot obtain independent,objective,confidential advice
from the City Attorney, who reports directly to the Council, and leads to
REPORT OF THF CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7, 2012
t-
potential conflicts. It is also clear that from time-to-time,it is necessary for
the Mayor to have access to confidential, objective,independent advice
without going through the City Attorney's Office.
The Commission noted that the 1992 Commission recommended
that the City Attorney report to the Mayor,notCouncil.This
recommendation was not followed,which gives rise to the current situation
and conflict.
A majority of the Commission,thus, believe that the Mayor should
have access from time to time to confidential,independent legal advice
without going through the City Attorney's Office, with such advice that is
not subject to disclosure to either the City Attorney or Council, and a
funding mechanism should be budgeted for this advice.
At the same time, it should be remembered that the City Attorney is
the attorney for the City of Fresno as a-corporate body, with the
corresponding duties and responsibilities ..
1.3 Growing Pains
It is also apparent to the Commission that there are "growing pains"
as the City seeks to sort out what the Strong Mayor form of government
should look like. This is most apparent in matters involving decisions as to
whether a particular item is administrative or legislative.
Concurring with the 1992 Commission,the current Commission's
view is that the Council should set policy and approve budgets.that reflect
policy decisions, and leave the implementation of the policies to the
Administration.
The Council has more than ample power to see the policies are
carried out through various resolutions and budgets, but care should be
taken to avoid micro-management of the Administration.
Examples of this problem include the suggestion that the Mayor
"not interfere with legislative powers and duties",whether the Council
should be able to directly control the City Controller, and etc.Another
example is control over the City's departmental structure. The City
Manager should have the ability to structure administrative services in the
most efficient manner possible,and the Council should not be involved in
the structuring,except as a policy or budgetary matter.
A primary reason for moving to the Strong Mayor format of
government,which was approved by a majority of the citizens, was to
utilize a professional full-time City Manager who is expert in such matters,
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012 19
and should be given leave to structure the administrative departments as
the Administration believes is in the best interest otthe City as a whole.
1.4 Composition of Commissions
Although not raised by Resolution 2010-219 giving the charge to
the Commission, the Commissioners do recommend that all future
appointments to boards,commissions and etc. be reflective of the entire
community so that the people of Fresno feel the appointees on such
bodies are truly representative of the interests of all of the citizens. As
noted above in Item no.34, the Commission recommends that the Charter
be amended to include the following language:
"The City and its elected officials are'encouraged to make'
appointments to City boards,commissioners and committees that reflect
the City's rich cultural,geographic and social diversity."
1.5 General Policy of Commission
Throughout the deliberations it was generally agreed that the adage
of "If it ain't broke don't fix it" should apply. While many of the ideas
proposed had merit, unless it was perceived there was a current or
.looming problem the item was generally deleted from consideration.
1.6 Future Charter Review Commission
The Commissioners noted that they were each appointed by an
elected representative consisting of members of the City Council and the
Mayor. It was felt that in the future it would be wise for the elected leaders
to appoint a Nominating Committee, akin to what happened with the 1992
Commission, so that the Nominating Committee makes the
recommendations as to future Commissioners to review th.e Charter. It is
also recommended that the Charter be reviewed not less often than every
.10 years and those future charges to the Commission stress that the
Commission should consider deletions from the Charter as well as
additions.
Moreover, the Commission recommends that thefuture
commissioners and Councils should be wary of-cluttering up the Charter
with unnecessary provisions that can be better addressed at the policy
level. The Charter should be viewed as a flexible document reflecting the
broader governance of the City and not be a repository of micro
management intended to inflexibility tie the hands of future Councils.ior
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012 20
give elected representatives freedom from calling or addressing the hard
questions they were elected to address.
CONCLUSION
The Commissioners have been privileged to discuss,consider and debate
changes in the governance of the City of Fresno and present their conclusions and
recommendations to the Council and Mayor and submit this report for further
consideration and action.by the City Council..."-.'.,.
. The undersigned members of the Charter Review Commission certify that the
preceding report is'an 'accurate account of the actions of the,Commission during its four
months of hearings ·anddel!berations.
REPORT OF THE CITY OF FRESNO CHARTER fiiEVIEW COMMISSION
February 7, 2012 21
February J--,2012
Robert Cook
Daruel Fitzpatrick
HEPOIH OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7,2012
)
-;1L.(//~-
brirey Reid
AA<~)\0 (j,Qtt--_.!.~.~_~_:i~_~~k:~.._,.__.__,_,_.__.__. .,
Nicholas Webber
Bill Stewart
~C,W(1({ey
Riley Walter
21
APPENDICES
Appendix I is a copy of the 1992 report.
Appendix II is a copy of the current Charter.
Appendix III is titled Resolution 2010-219.
Appendix IV is the list of presenters.
m;\!rcw\clly charter review commissionveport ofthe city of fresno charter review commission february 2012.020912.kk,v9.docx
REPORT OF THE CITY OF FRESNO CHARTER REVIEW COMMISSION
February 7. 2012 23
A1mendix I
1992 Report of the City of Fresno Charter
Review Committee to the Fresno City Council
Report of the
CITY OF FRESNO
CHARTER REVIEW COMMITTEE
to the
FRESNO CITY COUNCIL
November 3, 1992
CITY OF FRESNO
CHARTER REVIEW COMMITTEE
Bill F.Stewart
Chairman
Leonel Alvarado
Marn J.Cha
Roger .T.Flynn
Rutherford B.Gaston
Debra .T.Kazanjian
Consuelo Sterling Meux
Hugo Morales
Ida Parrott
Nominating Committee
Juan Arambula
Lewis S. Eaton
Harold H. Haak, Ph.D.
Honorable Annette LaRue
Judith L. Soley
We note in sadness the passing of Lewis S. Eaton,
who initially met with us and gave us our charge.
We dedicate this report to him.
FOREWORD
The members of the Charter Review Committee were first presented to the Fresno
City Council on July 21,1992.The formation of the committee was a direct result of the
recommendations of the Little Hoover Commission;the blue ribbon Nominating
Committee which selected the Little Hoover Commission also served as the Nominating
Committee for the selection of Charter Review Committee members.
Our specific charge was "to recommend a govemment structure that will efficiently
and effectively manage the City from now and into the year 2020."Within this charge,we
were also asked to recommend the advisability of adding one or more council districts,
and the method of electing council members from each district, including cnrrent districts.
The Little Hoover Commission has specifically addressed the issue of Charter Section 809;
this Committee's charge did not inclnde a review of that section of the Charter,
The committee consisted of nine members-one from each council district and
tbree at-large members. On July 15, 1992, the Nominating Committee held an initial
meeting with the members selected to serve on the Charter Review Committee,after
which the committee met alone for the first time and selected Bill Stewart as their
chairman.
At its first full meeting,the Committee felt it was very important to submit onr
recommendations to the Council in time to allow the Council to give them due
consideration and to place them for inclusion on the March,1993, ballot.After consulting
with City staff,we concluded that onr report must reach the City Council by its November
3,1992,meeting which,coincidentally,was election day.
As a result of this time line, the Committee sought to acquire the most research
and citizen input it could in the time 'available to us.Subconunittees were formed as
follows:The Academic/Research Committee consisted of Dr.Mam Cha; the Citizen
Input Committee consisted of Consuelo Meux,Hugo Morales and Bud Gaston; the
Official Input Committee consisted of Leonel Alvarado and Ida Parrott; the Finance
Committee consisted of Roger Flynn and Dr. Bill Stewart; the primary responsibility of
writing the final report was given to Debra Kazanjian.Dr. Bill Stewart; the primary
responsibility of writing the final report was given to Dehra Kazanjian. Dr.Bill Stewart
presided over all of onr meetings.
Beginning in August, 1992, and continuing on a regular basis through the end of
October,1992,the committee met and gathered information to allow us to form our
conclusions.We met with a panel of academicians to review the current literature and
philosophies pertaining to our charge; we met with the City Manager,Mayor and members
of the City Council; we met with varions citizens,citizens'groups and other local officials.
We reviewed the City Charters and charter rewiew reports of other California cities.
Committee member Bud Gaston,while on his own private vacation,interviewed public
officials from the cities of Atlanta, Georgia and Pittsburgh,Pennsylvania as to their form
of government and method of election. We reviewed the 1992 City of Fresno Statistical
Abstract and nnmerons other research materials provided to us by Dr. Cha, the city
Manager's office, the League of California Cities and the Fresno League of Women
Voters.
In our meetings with citizens and citizens'groups,we received several ideas to
improve city government and citizen participation.One idea that was consistently raised
was the possibility of reviving neighborhood councils. We also heard testimony from
noncitizen residents about their need to participate in the political process; the possibility
of neighborhood councils might help meet such a need.
The Committee had no budget when it was initially constituted and City budget
constraints precluded any allocation for this purpose.The Committee solicited donors
from the community,who generously funded the committee's expenses.
The membership of the Charter Review Committee represented a variety of
viewpoints,reflecting the Council's desire to make it broadly representative of the whole
community,The scope and nature of our charge required us to deal with a number of
controversial issues.Nevertheless,an atmosphere of professionalism and collegiality
pervaded our work.
Each of the recommendations of this Committee emerged after careful study and
consideration;all have withstood the test of frank and open discussion.The
recommendations faithfully carry out the charge given to this Committee to propose
changes that will take our municipal government into the 20ili Century.
PRINCIPAL RECOMMENDATIONS
FORM OF GOVERNMENT
BACKGROUND
Originally,the City Manager form of government evolved out of tilereform
movement in the United States in the late 19th and early 20th century as a response to
widespread corruption. Pursuant to om City charter,Fresno's Mayor is elected at large,
presides over the Council and is avoting member of the council. The Mayor has no veto
power,appoints members of boards and commissions subject to confirmation by the
Council, and is recognized as the officiai head of the City.
Om charter furtherprovides that the six Council members are elected by district
and constitute tile governing body oftbe City. The City Manager is a professional, who
serves as the Chief Administrative Officer and is the head of tile administrative branch of
the City government;he/she serves at tilepleasure of a majority ofthe Council.The
Council-Manager form of government is the most commonly used form of government in
the COW1try today.
In reviewing the Charter, the Committee felt very strongly that the Charter shouid
not be read nor revised with certian personalities in mind. Rather, the only criteria for OUT
research and recommendations would be the charge given to us, to wit: "To recommend a
government structure that will efficiently and effectively manage the City from now and
into the year 2020."
The overwhehning majority of om research,interviews,personal observations, and
consideration of Fresno's future growth led us to the conclusion that our CUITent form of
government is not best suited to lead us into the 20th Century. The Little Hoover
Commission Report emphasized the need for tile Mayor and Council to share a common
"Vision"of what Fresno should be as the turn ofthe century approaches.Fresno's rapidly
changing population size, diversity and economic demands require decisive leadership and
a government framework that allows that leadership.
Under om current Council-Manager form of government, decisive leadership by
the Mayor and City Manager is extremely difficult because all members of tile COW1cil and
the Mayor constantly want the full and undivided attcntion of the City Manager.Fresno's
past record.indicates that the average Manager's tenure is three years, which does not give
rise to the opportunity to develop a common "Vision"with the Conncil.
The Committeefeelsthat theMayor, asthe singleofficialelectedcitywide,must
be giventhe authorityto compellegislativeactionand tosubdue,by veto,any action
conceived which has asits results the denigration of effective governance.
TheMayorshould be considered not onlyas apresidingofficerand ceremonial officer,but
as the leaderin setting agendas.Local governance must rely upona popularly elected
Mayor; authority to performmustbe providedandpower to initiate actionmnst be
included.
Recommendations
The Committee strongly recommendsthatthe Cityamendits charterto adopta
StrongMayor forrnof govenment only aslong as specificchecksand balances delineated
below aregiven to the Councel.The StrongMayor formof governmentsuggestedherein
is notmeantto be synonymous with conjuredimagesmanyhave of big citypoliticsin the
East.,which are associated with corruptionand patronage. Rather, the StrongMayor form
we recommendallowstheMayor to articulateavision, to have a professionalmanagerto
helpimplement the vision,anda City Councilvestedwith certainpowersto hold the
Mayor's increased powers in check.Some arguethat the Council-Manager form of
governmentcan work ifthe personalityof the Mayor is that of a"strong leader." As set
forth above,we do not believethat the City is bestservedif our recommendations
considerthe personalities of anypublic officials.We are, instead,suggesting a structural
changeto insure that ourgovernmentis not drivenby a personalitybut is,instead,driven
by aprocess.
Under the StrongMayorform of govermnentrecommended below,the traditional
responsibilities of a professional City Managerwouldremain. TheCity Managerwould
retain the power to ensurethat the City Charterand Ordinancesare enforced,exercise
controlover all departments,appointall departmentheads,assistthe Mayorin preparing
the budget, establish financial andaccountingrecords,establisha centralpurchasing
system,advisethe Mayorof theCity's financial affairs,andperform suchotherdutiesas
prescribedby the Charteror requiredof him/herby the Mayor.It is important that the
City Managerretainthese traclitional dutiesso that the Citymay continueto bewell-
managed in an efficientandproductive manner.
Specifically,we recommend the following changesto ourform of government,to
be voted on in the march,1993 city-wide elections,but not to be implemented until the
nextcity-widemayoralelectionfouryears fromMarcb, 1993:
Mayor
Fresno should adopta StrongMayor form of government.
The Mayorwouldnot sit as a votingmemberof the CityCouncil.
The Mayor would be recognized as the executive head of City government.
The Mayor wouldbe assigned responsibility for human relations leadership in 111e
community.
The Mayor would be required to develop an annual municipal legislative program
for presentation to the Council and would be authorized to develop and
propose other legislative proposals to the Council from time to time.
The Mayor would prepare or cause to be prepared the proposed annual city
budget, and would submit the same to 111e Council for their deliberation and
approval.
The Mayor would rot directly supervise any City department. A professional City
Manager would directly supervise all operations of City departments.
The Mayor would be authorized to appoint members of boards. commissions and
permanent committees. Said appointments would be confirmed by a majority
of the Council.
The Mayor would be given the power of veto in all matters which must be passed
by the City Council; the mayor must exercise his/her veto within ten (10) days
of passage of a measure,otherwise 111e measure becomes effective without
his/her signature; the Council shall have thirty (30) days from the date of a veto
to override it by a two-thirds (2/3) majority.
The Mayor would be elected at large.
The Mayor would provide the liaison between the City Manager and 111e Council,
fostering a sense of cohesionarnong Council members and educating the public
about the needs and prospects of the City.
The Mayor would hire and fire the City Manager, City Attomey and City Clerk,
subject to the approval of a majority of the City Council.
City Manager
The City Manager would be a professional,pursuant to the same qualifications of a
City Manager now contained in Section 701 of the Chmiel'of the City of Fresno.
The City Manager, CityAttorney and City Clerk wonld be hired and fired by the
Mayor,subject to the approval of a majority of the City Council.
The City Manager would continne to be the head of the administrative branch of the
City govermnent.
The City Manager shonld retain the right to hire and fire all major department heads
and division heads; all executive-level and policy making-level employees should
remain exempt from the Civil Service System.
The City Manager would continue to retain those powers granted him/her under
Section 705 of the current Charter, except as otherwise specifically modified by
the recommendations contained herein
ELECTION SYSTEM
Background
Currently, all six COlIDCil members are elected by district. By City Ordinance, the
allowable population within each Council district ranges from a minimum of
60,541 persons to a maximum of 66,913 persons. The State of California has
recently announced that the January 1, 1992, City of Fresno population is 382,362
persons.It is estimated that Fresno's population will be at 500,000 by the year
2000. This year's required analysis by City staff of the population distribution of
the six Council districts found that, due to Fresno's rapid growth,in-migration and
annexation activity, Districts 4, 5 and 6 were not in conformance with the
population criteria of Article 2 of the Fresno Municipal Code. The Council was in
the process of changing district boundaries to comply with the Municipal Code at
the time our research was being conducted.
Pursuant to the terms of the Voting Rights Act,most communities now adopt
.some form of district elections.The concept of district elections helps provide
comprehensive neighborhood-based representation to all oftbe City's residents.
District elections provide a way to encompass and integrate a diverse population
mix into the political life of the City. Groups which see little or no chance of
affecting outcomes of a city-wide election may become dispirited.Moreover,
resentment at exclusion can grow. Opinion is split on whether the costs of
organizing a local campaign are much less than for a city-wide campaign. Further,
legitimate policy concerns may go unexpressed and unrepresented if the Council
reflects only a relatively homogeneous majority bloc of voters.
Notwithstanding the merits of district elections,at-large election advocates argue
that district elections, while solving the problem of providing the opportunity for
representation to minorities, fosters a system where Council members cannot rise
above the parochial interests to look to the needs of the city as a whole.At-large
devotees also point out that their system can broaden minority representation by
increasing a minority group's influence over a larger number of City Council races
than possible under a strictly single-member district system. The fact that district-
based and at-large Councilmembcrs represent different constituencies causes a
wider range of policy issues to be discussed at Council meetings. The result is that
all Council members have a more representative picture of what is going on
throughout the city.
Recommendations
The Committee felt that it was imperative to maintain district elections by at least
the current six districts. The committee also felt that at least three more Council
members should be added to accommodate fresno's growth and to facilitate the
Strong Mayor form of gobcrnment.The three additional Council members would
be elected by district.It was the strong feeling of the Committee that no additional
Council districts be added if the Council does not accept our recommendation to
change to a Strong Mayor form of government.
The following, then, are recommended changes to our election system to be voted
on in the March, 1993 city-wide elections, but not to be implemented until the next
city-wide mayoral election four years from March, 1993:
CUy Council
The City Council would retain all powers not otherwise specifically provided
by law or by City Charter and not otherwise specifically modified by the
recommendations herein.
The City Council would be increased to nine members; tile Mayor would not
serve on the Council.
New Council Districts would be drawn, each having approximately the
same population and all nine Council members would be elected by district.
The Chairperson of the council would be elected by majority vote of the
Council members and would serve as tile Mayor Pro-Tern in the absence of
the Mayor. He/she would still vote at Council meetings when serving in
the absence of the Mayor.
OTHER RECOMMENDATIONS
While the committee was Dotspecifically charged with review of certain charter
provisions, it nevertheless makes recommendations on the following:
1. City-wide elections should be changed from odd-numbered years to even-
numbered years to save the approximately $500,000.00 it costs to
have off-year elections and to increase voter turnout.
2.Each Councilmember should have the right to appoint his/her own Council
assistant.
ACKNOWLEDGEIY1ENTS
The Committee expresses its thanks to City Manager Michael Bierman and Chief
Deputy City Manager James K.Katen for their special efforts in securing and delivering
various research materials which were requested of them by the Committee.Without their
assistance,the Committee's work could not have been accomplished given our time frame.
The Committee also thanks Mayor Karen Humphrey and Council 111e111bers Rod
Anaforian,Tom Bohigian,Brian Seteneieh and Robert Smith, each ofwhom personally
met with the Committee and provided valuable insight to our work.
No work of this scope and time frame would be possible without the efforts of a
very capable administrative assistant to keep the Committee informed and organized.The
Committee is deeply grateful for the support and services of Cindy Spring,Administrative
Assistant to Dr.Bill Stewart.Cindy's professionalism and quiet competence allowed the
'VOIle of the Committee ':.0'1 proceed on schedule.
We would Jso li·'.:e to thank the following businesses for their commitment to
good government 't!:U·ol.:p:r;their contributions of office space and financial support to the
Committee:
Bank of America
California Office Furnishings
Edwin S.Darden Associates
Densmore Engines
DERCO Foods
Donaghy Sales
Electric Motor Shop
lE.Ethridge Construction,Inc.
Gottschalks
Hallowell Chevrolet Co., Inc.
Johanson Transportation Service
Krazan &Associates,Inc.
Charles A.Looney Advertising
Lyles diversified,Inc.
Pacific Bell
Pacific Gas and Electric
Pacific Resources
Piccadilly Inn
Pittsburg Plate Glass
Producers Dairy Foods,Inc.
Shepherd-Knapp-Appleton
SJV Financial Corporation
State Center community College District
Stephen Investments,Inc.
Twining Labs, Inc.
Valley Yellow Pages
tymendix II
Current Charter of the City of Fresno
"HA:,TER OF 'mE err;OF FRESNO
'CHARTER OF THE CITY OF FRESNO
ARTICLE I INCORPORATION AND SUCCESSiON
SEC.100.NAME AND BOUNDARIES.The City of Fresno,hereinafter termed
the City, shall continue to be a municipal corporation under its present name of "City of
Fresno," The boundaries of the City shall be the boundaries as established at the time
this Charter takes effect, or as such boundaries may be changed thereafter in the
manner authorized by law,
SEC.101.SUCCESSION,RIGHTS AND lIABILI'TU::S.The City of Fresno shall
continue to own, possess and control all rights and property of every kind and nature
owned,possessed or controlled by it at the time this Charter takes effect and shall be
subject to all its debts, obligations, liabilities and contracts,
SEC.102.ORDINANCES.All lawful ordinances, resolutions, rules and regulations,
or portions thereof, in force at the time this Charter takes effect, and not in conflict or
inconsistent herewith, are hereby continued in force until the same shall have been duly
repealed,amended, changed or superseded by proper authority.
SEC.103.CONTINUANCE OF PRESENT OFFICERS AND
EMPLOYEES.The appointive officers of the City,except members of boards and
commissions,and the employees of the City under the preceding Charter shall continue
to perform the duties of their respective offices and employments without interruption
and for the same compensations and under the same conditions until the appointment of
their successors or until they are specifically relieved of their duties, but subject to the
provisions of this Charter.
SEC.104.TRANSFER OF RECORDS AND PROPERTY.All records, property
and equipment of any office,department or agency, or part thereof, all of the powers and
duties of which are assigned to any other office,department or agency by or pursuant to
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CHf,RTER OF mE CITY OF FRESNO
this Charter,shall be transferred and delivered to the office,department or agency to
which such powers and duties are so assigned.If part of the powers and duties of any
office,department or agency or part thereof is assigned to another office,department or
agency by or pursuant to this Charter, all records,property and equipment relating
exclusively thereto shall be transferred and delivered to the office,department or agency
to which said powers and duties are so assigned.
SEC.105.OPERATIVE DATE OF CHARTER.For the purpose of nominating and
electing the first Mayor and first Councilmen,the provisions of this Charter shall become
operative when the concurrent resolution of the legislature approving this Charter is filed
with the Secretary of State. For all other purposes this Charter shall become operative at
twelve o'clock noon on the first Tuesday next following the date of the election of the first
Mayor and first Councilmen and the qualification of not less than five members of the
Council so elected.At such time the terms of all elective officers of the City under the
preceding Charter shall terminate.
The first council elected hereunder shall immediately by resolution create temporary
departments for the administration of the City government and shall appoint temporary heads
thereof, said temporary department headsto continue as such until appointment of their
successors by the Chief Administrative Officer under the provisions of this Charter.
SEC.106.GENDER REFERENCES.It is hereby declared that any gender
references including but not limited to the terms "man" or "men,""he," "him," or "his" in
this Charter or any ordinances,resolutions or other written policies of the City of Fresno
should be gender neutral and shall be amended to reflect gender neutrality when the
particular Charter Section,ordinance,resolution or other written policy is amended for
any purpose.
(Amendment ratified 1988 Primary Election,June 7,1988.)
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l"HrCLE II POWERS OF THE OTY
@:~RTICLE II POWERS OF THE CITY
$IEC.200.GENERAL POWERS.The City shall have the power to make and
enforce all laws and regulations in respect to municipal affairs,subject only to such
restrictions and limitations as may be provided in this Charter and in the Constitution of
the State of California.It shall also have the power to exercise any and all rights,powers
and privileges heretofore or hereafter established,granted or prescribed by any law of
the State, by this Charter, or by other lawful authority, or which a municipal corporation
might or could exercise under the Constitution and laws of the State of California.
The enumeration in this Charter of any particular powershall notbe held to be exclusive of, or
"fly lirnitation upon,the qeneralilv ofthe foregoing provisions.
SEC.201.PROCEDURES.The City shall have the power and may act pursuant to
any procedure established by any law of the State,unless a different procedure is
established by this Charter or by ordinance.
SEC.202.CONTRACTS FOR MUNICIPAL SERVICES.The City shall have the
power to enter into a contract with any other city or county within the state, with a state
department,or with any other public or private agency or firm for the performance of any
administrative function of the City.
SEC.203.CONTINUANCE OF LAWS.All lawful ordinances,resolutions,rules
and regulations or portions thereof now in force and not in conflict or inconsistent
herewith are continued in force until they have been duly repealed,amended,changed
or superseded by proper authority.
(Amendment ratified 1993 General Municipal Election,April 27,1993.)
SEC.204.FORM OF GOVERNMENT.The government provided by this Charter
shall be known as the Mayor-Council form of government.
(Amendment ratified 1993 General Municipal Election,April 27,1993.)
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.O.RllCLE III El.ECnVE OFI'1CERS
ARTICLE III ELECTIVE OFFICERS
SEC.300.ENUMERATION.The elective officers of the City shall be a mayor and
seven Councilmembers.The Council shall consist of seven Councilmembers,each of
whom shall have the right to vote on all matters coming before the Council.
(Amendment ratified 1988 Primary Election,June 7, 1988.)
(Amendment ratified 1993 General MunicipalElection, April 2.7,1993.)
m:;;c.301.MANNEROfiElECTION.The Mayor shall be elected from the City at
large at the times and in the manner provided in this Charter.The Council members shall
be elected by district at the times and in the manner provided in this Charter.
(Amendment ratified 1980 Special MunicipalElection, June 3, 1980.)
(Arnendment ratified 1988 Primary Election,June 7,1988.)
SEC.302.DESIGNATION OF COUNCILMEMBERS FOR ELECTION.As to
the council members there shall be deemed to be seven separate offices to be filled,one
of which shall be designated as council member Number One,another as
Councilmember Number Two,another as Council member Number Three,another as .'
Councilmember Number Four,another as Councilmember Number Five,another as
Councilmember Number Six, and another as Councilmember Number Seven.No
candidate shall file for more than one elective office.Such designation shall be used on
all nomination papers,certificates of election and all election papers referring to the
office.
(Amendment ratified 1980 Special Municipal Election,June 3,1980)
(Amendment ratified 1988 Primary Election,June 7, 1988.)
(Amendment ratified 1993 General MunicipalElection, April 27, 1993.)
SEC.303.TERM OF OFFICE.
(a) Except as otherwise provided in this Charter, the terms of elective officesshall be for four
years.
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!,InKLE III ELEGIVE OFFICERS
(b) In 1981 and every fourth year thereafter,the offices of Councilmembers designated as
Number Two,Number Four and Number Six and the office of Mayor shall be filled at the general
municipal election held in May, or at such other time as provided by this Charter. In 1983 and
every fourth year thereafter, the offices of Councilmembers designated as Number One,Number
Three, and Number Five shall be filled at the general municipal election held in May, or at such
other time as provided by this Charter.
(c)Beginning in 1995, each elected officer shall take office on the first Tuesday following the first
Monday in January of the odd-numbered year following his or her election to office except ion
the case of special elections in which the person elected shall take office upon the certification of
election results.Incumbents shall hold office until their successors are elected and qualified.
(d)Councilmembers designated as Number 1,Number 3,and Number 5 elected to office in
1991 shall serve in office until the first Tuesday following the first Monday in January Of1995.
(8)Councilmembers designated as Number 1, Number-S,and Number 5 elected to office in
1994 shall commence their terms in office on the first Tuesday following the first Monday in
.lan uary of 1995.
',n Couricilmembers designated cIS Number 2,Number 4,and Number 6 and the Mayor elected
to office in 1993 shall serve in office until the first Tuesday following the first Monday in January
of 1997.
(g)Council members designated as Number 2,Number 4, and Number 6 and the Mayor elected
to office in 1996 shall commence their terms in office on the first Tuesday following the first
Monday in January of 1997.
(h) The initial term for Councilmember designated as Number 7 shall commence on the first
Tuesday following the first Monday in January 1997 and end on the first Tuesday following the
first Monday in January 1999, Thereafter, the term of Councilmember designated as Number 7
shall commence and end at the same time as the terms of Councilmembers designated as
Numbers 1, 3, and 5.
(Amendment ratified 1975 General Municipal Election.)
(Amendment ratified 1980 Special Municipal Election, June 3, 1980,)
(Amendment ratified 1988 Primary Election,June 7,1988.)
(Amendment ratified 1993 Primary Election, March 2, 1993.)
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
SiEC.303.1.LIMITATION OF TERMS OF OFFICE.No person elected to the
office of Councilmember or Mayor for two successive terms shall again be eligible to
hold that same office until one full term has intervened.This limitation applies to terms to
which persons had been elected or appointed after May,1985.
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ARTICLE][[ELECTIVE OFFICERS
(Amendment ratified 1992 General Election,November3, 1992.)
(/\mendment ratified 1996 Consolidated General Election,November 5,1996.)
SEC.304.ELIGIBILITY,CITY RESIDENCE.No person shall be eligible to hold
an elective office unless that person is, and has been for a period of at least thirty days
immediately preceding the filing of nomination papers for such office or appointment to
such office, a resident of the City, and unless that person is, and has been at the time of
assuming such office,an elector of the City.
(Amendment ratified 1969 General Municipal Election; approved,Assembly Concurrent
Resolution No. 172, filed with.Secretary of State on June 12, 1969,Res.Ch.197,Stat 1969.)
(Amendment ratified 1973 General Municipal Election.)
(Arnendmentratified 1977 Special Municipal Election,May 31, 1977.)
(/\mendment ratified 1988 Primary Election,June 7, 1988.)
SEC.304.1.ELIGIBILITY,DISTRiCT RESIDENCE.Commencing with the 1981
general municipal election,no person shall be eligible to hold elective office as a
Councilmember unless that person is, and has been for a period of at least thirty days
immediately preceding the filing of nomination papers for such office or appointment to
such office, a resident within the Council district corresponding in number to the office to
which that person is elected or appointed.Each Council member shall,during that
Councilmember's term of office,reside within such Council district.The boundaries of
such districts shall be determined by the Council by ordinance and shall be
redetermined by the Council, by ordinance adopted not later than one hundred and
twenty days following the publication of each federal census thereafter;provided that the
population disparity between districts shall not exceed ten percent at the time of any
such boundary determination or redetermination,and no boundary shall be altered so as
to exclude any incumbent from office prior to the expiration of that incumbent's term.
(Amendment ratified 1977 Special Municipal Election,May 31, 1977.)
(Amendment ratified 1980Special Municipal Election,June 3, 1980.)
(Amendment ratified 1988 Primary Election,June 7, 1988.)
:SlEC.305.VACANCIES.
(3)An elective office becomes vacant when the incumbent thereof dies,resigns,is removed
from office under recall proceedings,is adjudged insane,is convicted of a felony or of an offense
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!\RIICLE III ELECnVE OFI'1CERS
involvinq a violation of his or her duties, ceases to be a resident of the City or the district
corresponding in number to the office to which he or she was elected, neglects to qualify within
the time prescribed by the provisions of this Charter, is absent from the State without leave for·
more than sixty consecutive days, or failsthe attend the meetings of the body of which he or she
's a member for a like period without being excused therefrom by such body.
(b) The Council shall declare the existence of any vacancy except vacancy caused by death or
resignation.Such declaration shall be a final determination of the existence of the vacancy
unless a court review is sought within thirty days after such declaration.
(c) A resignation is effective when received by the City Clerk unless a different time is stated in
the resignation.
(d) A vacancy in an elected office shall be filed as follows:
(1) A vacancy in the office of a Councilmember may be filled by appointment by the
Council if:
(i) The Council declares the existence of the vacancy or the incumbent dies or
resigns in the final year of the term, and
(ii) The appointment is made within thirty days after the Council declares the
existence of the vacancy or the incumbent dies or resigns.
(2) Any vacancy in the office of a Councilmember not filled pursuant to paragraph (1)
shall be filled by a special election to be held not sooner than ninety days after the
Council calls such election nor later than the next regular election date after the
expiration of such ninety days.
(3) In the event of a vacancy in the office of Mayor, the Council shall appoint·the Mayor
Pro Tempore as Mayor for the period of time from the date of appointment to the date the
newly elected Mayor assumes office and the Council shall call a special election for filling
the vacancy, which election shall be called within thirty days after such vacancy occurs,
provided that if such vacancy occurs within one hundred twenty days, but not less than
eighty-eight days from the date of a municipal primary nominating election at which the
office of mayor would regularly be filled, the City Council shall not cause a special
election to be held to fill the vacancy but said vacancy shall be filled as part of the regular
election process. If elected by a specially called election pursuant to this subsection (305)
(d), the Mayor so elected shall serve for the remainder of the unexpired term of the
Mayor whose vacation of the office has caused the special election to be held.
(e) Any person appointed or elected to fill a vacancy shall serve for the remainder of any
unexpired term and until his or her successor qualifies. If a person appointed to fill a
vacancy is a candidate for the same office which he or she then holds, the designation
under the candidate's name on the ballot may be the words "appointed incumbent"or
may be words designating the profession, vacation, or occupation of the candidate.
(f) If the Council fails either to fill a vacancy by appointment or to call a special election
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ARTICLE III ELECTIVE OfFICERS
within thirty days after the incumbent dies, or his or her resignation is effective, or the
declaration of the existence of the vacancy becomes final, the salary or other
compensation of each member of the Council shall cease until the Council calls such
special election.
(g)At any special election called to fill a council or mayoral vacancy,the candidate
receiving the majority of votes cast shall succeed to the vacated office for the unexpired
term upon certification of the election results. If no candidate receives a majority of votes
cast,Council shall call another special election within thirty days of the certification of the
election results and the two candidates receiving the most votes shall be placed on that
special election ballot.
(Amendment ratified 1975 General Municipal Election.)
(f\.mendment ratified 1977 Special Municipal Election,May 31,1977.)
(t\rnendment ratified 1988 Primary Election,June 7,1988.)
(Amendment ratified 1993 General Municipal Election,April 27,1993.)
SEC.306.HOLDING OF OTHER OFFICE.No elective officer shall hold any other
municipal office or hold any office or employment the compensation of which is paid out
of municipal moneys; nor be elected or appointed to any office created or the
compensation of which is increased by the Council, while a member thereof, until one
year after the expiration of the term for which that person was elected.
(Amendment ratified 1988 Primary Election,June 7,1988.)
SEC.308.COMPENSATION OF ELECTIVE OFFICERS.
(3) The Council shall establish by ordinance the compensation of the elective officers of the City.
(b)Once the compensation of elective officers is fixed pursuant to subsection (a) of this section,
the compensation of an elective officer shall not thereafter be increased or diminished during
that elective officer's term of office.
(Amendment ratified 1980 Special Municipal Election,June 3,1980.)
(Amendment ratified 1988 Primary Election,June 7,1980.)
SIEC.309.OFF·YEAR CONTRIBUTIONS PROHIBITION.No mayoral
candidate, Council candidate, or any committee controlled by such person shall solicit or
accept any contribution in support of such candidate's election prior to the date fixed by
law for the filing of nomination papers with respect to such election, or following the year
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AR'nCLE III ELECTIVE OFFICERS
in which such election is held,
:)\mendment ratified 1993 Primary Election, March 2,1993,)
(Amendment ratified 1988 Primary Election, June 7,1988.)
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t,'rnCLc IV THE ~lAYOR
ARTICLE IV THE MAVOR
SEC.400.Powers and Duties.The executive power of the City shall be vested in
the office of the Mayor,The Mayor shall have the power to veto legislative and
budgetary actions of the Council pursuant to and in accordance with the provisions of
this Charter.The Mayor shall be the Chief Executive Officer of the City,responsible for
providing leadership and taking issues to the people and marshalling public interest in
and support for municipal activity.The Mayor shall be responsible to the People of
Fresno for the proper and efficient administration of all affairs of the City.
In addition to these general responsibilities, the Mayor shall have the following specific duties:
(a) The Mayor shall execute and enforce all laws and ordinances and policies of the City,
(b)The Mayor shall have sole authority to appoint and remove the Chief Administrative Officer,
(c) The Mayor shall exercise control over the Chief Administrative Officer.
(d) The Mayor shall prepare or cause to be prepared the proposed annual City budget, and shall
submit the same to the Council for its deliberation and approval.
(e) The Mayor shall have the power of veto in all legislative matters which must be passed by
the City Council,except as provided in this Chapter,
(f) The Mayor shall have power of veto in all actions of Council relating to the budget, including
line item budgetary veto authority over all programs and budgetary units, This authority includes
the ability to reduce or eliminate the fiscal year funding to any program or budget unit.
(g) The Mayor shall not directly supervise any City department.
(h) The Mayor shall provide the liaison between the Administrative Service and the Council,
fostering a sense of cohesion among Councilrnembers and educating the public about the needs
and prospects of the City,
(i) The Mayor shall provide community leadership and actively promote economic development
to broaden and strengthen the commercial and employment base of the City,
(j)The Mayor shall recommend to the Council such measures and ordinances as he or she may
deem necessary or expedient and to make such other recommendations to the Council
concerning the affairs of the City as the Mayor finds desirable.
(k) The Mayor shall investigate those affairs of the City under the mayor's supervision,
(Amendment ratified 1971 General Municipal Election; approved,Assembly Concurrent
Resolution No, 130, filed with Secretary of State on June 18, 1971, Res, Ch. 77, Stat. 1971.)
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(/\rnendment ratified 1993 General Municipal Election, April 27, 1993.)
Sl::::C.401.MAYOR PRO TEMPORE.The President of the Council shall serve as
Mayor Pro Tempore. In addition to his or her regular duties as Councilmember, the
Mayor Pro Tempore shall perform the duties of the Mayor during the Mayor's absence
except,however, the Mayor Pro Tempore shall not have veto authority in the absence of .
the Mayor. If the Mayor Pro Tempore is appointed Mayor pursuant to subsection 305(d)
(2)of this Charter, he or she shall exercise all of the powers of the office of Mayor until a
successor is elected and qualified.
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
~i1iEC,402.COiV1PENSA"f~ON.
nl'pealed;ratified 1980 Special f\i!unicipal Election, June 3,1980.)
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,\;nlGE V THE COUNCIL
3~iRTICLIE V THE COUNCIL
SEC.500.POWERS VESTED IN THE COUNCIl.All powers herein granted to
and vested in the City of Fresno shall,except as herein otherwise provided, be
exercised by a Council to be designated the Council of the City of Fresno. Said Council
shall the be governing body of the City and, subject to the express limitations of this
Charter,shall be vested with all powers of legislation in municipal affairs adequate to a
complete system of local government consistent with the Constitution of the State, Each
Councilmember shall have the right to appoint and remove his or her own Council
Assistant.
i/'Imendrnent ratified 1993 General Municipal Election,April 27,1993,)
,sEC.501.PRESIDENT Of THE COUNCIL.Commencing in 1997 on the first
fuesday after the first Monday in January,the Council shall elect a President of the
Council from among its members to serve for a one-year term. The President of the
Council shall be the presiding officer of the Council. In addition,upon vacancy in the
officer of the Mayor, the office of the Mayor shall be filled by the President of the Council
as provided on Article III of this Charter. In the event of a vacancy in the office of
F'resident of the Council or in the event the President is required to fill the office of
Mayor,the Council shall select an Acting President who shall serve until the previously
elected President returns to office or that Council member's term expires.
(Repealed;ratified 1980 Special Municipal Election,June 3, 1980.)
(Amendment ratified 1993 General Municipal Election,April 27,1993.)
SEC.502.MEETINGS.The Council shall hold regular meetings and shall provide
the time, place and manner of holding its meetings by resolution.All meetings of the
Council shall be opened to the public,except executive sessions permitted by the law of
the State.
(Amendment ratified 1973 General Municipal Election.)
(Amendment ratified 1996 Primary Election,March 26,1996,)
SEC.503.QUORUM.A Majority of the entire membership of the Council shall
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,",;lCLE VTHE COUNCIL
constitute a quorum for the transaction of business,but a less number may adjourn from
time to time, In the absence of all members of the Council from any regular meeting or
adjourned regular meeting the City Clerk may declare the same adjourned to a stated
day and hour,
::~,;itEC.504.RULES AND PROCEDURES.The Council shall establish rules for the
conduct of its proceedings and to preserve order at its meetings,It shall cause a record
of its proceedings to be maintained which shall be open to public inspection,
SEC.505.·ADMINISTERING OATHS.SUBPOENAS.Each member of the
Council shall have the power to administer oaths and affirmations in any investigation or
proceeding pending before the Council. The Council shall have the power and authority
to compel the attendance of witness,to examine them under oath and to compel the
production of evidence before it.Subpoenas may be issued in the name of the City and
l.e attested by the City Clerk,[)isobedience of such subpoena or the refusal to testify,
upon other than constitutional grounds, shall constitute a misdemeanor and shall be
punishable in the same manner as violations of this Charter are punishable.
SEC.506.CITIZEN PARTICIPATION,No citizen shall be denied the right
personally,or through counsel, to present grievances or offer suggestions for the
betterment of municipal affairs at any regular meeting of the Councilor any City advisory
board,commission or committee.
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ARTICLE VI l.EGISLATJON
t\RTICLE VI LEGISLATiON
SEC.600.ENACTMENT Of ORDINANCES.Legislative action,including the
establishment of a fine or other penalty or the grant of a franchise,shall be taken by the
Council only by means of an ordinance,as follows:
(a) Each ordinance shall be introduced in writing, and its enacting clause shall be substantially
as follows:
"The Council of the City of Fresno does ordain as follows:"
(b) No ordinance shall be adopted by the Council on the day of its introduction, or on the day it is
altered after introduction,nor within five days thereafter,except as follows:
(1) An ordinance which takes effect upon final passage;
(2) An ordinance changinq the land use zoning district of property, or adopting,
amending, or repealing a specific plan or a redevelopment plan, when the adoption of
such ordinance has been the subject of a noticed public hearing by the Council;
(c) No ordinance,except an emergency ordinance, shall be adopted at any time other than a
regular or adjourned regular meeting.
(d) Upon the demand of a member of the Council at the time of the adoption of an ordinance, it
shall be read in full, unless the reading thereof is waived by the Council.
(e) No ordinance changing the land use zoning district of property shall be adopted in conflict
with any specific plan adopted by ordinance.
(f)An alteration necessary to correct a typographical or clerical error or omission only, may be
performed by the City Clerk with the written approval and concurrence of the City Attorney, so
long as the alteration does not materially or substantially alter the contents, requirements, rights,
responsibilities,conditions, or prescriptions contained in the original text of the ordinance. A
typographical or clerical error shall include, but is not limited,incorrect spelling, grammar,
numbering,punctuation,transposed words or numbers, and duplicate words or numbers.
(Amendment ratified 1969 General Municipal Election; approved, Assembly Concurrent
Resolution No. 172, filed with Secretary of State on June 12, 1969, Res. Ch. 197, Stat. 1969.)
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
Resolution No. 130, filed with Secretary of State on June 18,1971,Res. Ch. 77, Stat. 1971.)
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
(Amendment ratified 1996 Consolidated General Election,November 5, 1996.)
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N'.TlCLE VI LEGISLATION
:SEC.601.VOTE REQUIRED.No ordinance shall be passed or become effective
without receiving the affirmative vote of at least four members of the Council unless
otherwise provided in the Charter.
(Amendment ratified 1969 General Municipal Election; approved, Assembly Concurrent
f~esolution No. 172, filed with Secretary of State on June 12, 1969,Res.Ch. 197,Stat 1969.)
•
SEC.602.ROLL CALL VOTE.APPROVED SUBSTITUTE.At the demand of
any member or at the request of the City Clerk,upon any question,the members shall
individually cast their votes, by audible voice vote at the call of the roll by the City Clerk,
or by other means,approved by a majority of the members,which registers and publicly
discloses the individual vote of each member.The City Clerk shall cause the ayes and
noes cast to be entered into the minutes of the meeting ..
(Amendment ratified 1969 General Municipal Election; approved, Assembly Concurrent
r'esolution No.172, filed with Secretary of State on June 12, 1969,Res.Ch. 197,Stat 1969.)
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
Resolution No. 130, filed with Secretary of State on June 18, 1971,Res.Ch. 77, Stat.1971)
SEC.603.EMERGENCY ORDINANCES.Any ordinance declared by the Council
to be necessary as an emergency measure for preserving the public peace,health or
safety,and containing a statement of the reasons for its urgency,may be introduced,
adopted,and become effective at one and the same meeting if passed by at least five
affirmative votes.
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
SEC.604.SIGNATURE AND ATTESTATION.All ordinances and resolutions
shall be attested by the City Clerk and when required by law, shall be signed by the
Mayor.
SEC.605.VETO OF CITY COUNCIL ACTIONS BY MAYOR.
(a) The Mayor shall have veto powerover all legislative acts of Council,whether such actions be
taken by ordinance,resolution,or otherwise. The Mayor's veto power shall not extend to
administrative decisions or quasi-judicialdecisions of Council. The veto power shall be afforded
the Mayor irrespective of any super-majority vote by Council, except that the veto power shall
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·ARTICLE VI LEGISLATION
not extend to override votes taken pursuant to Section 609 of this Charter.
(b) For purposes of this Charter Section 605,legislative acts shall include amendments to the
Fresno Municipal Code; adoption of general plans,community plans and specific plans; grants
of franchise;establishment of fines, penalties,or regulations; tax levies; annexation of property;
exemption of property from taxation;ordinances required by state law in matters wherein state
law preempts local law; actions calling an election or otherwise relating to an election;
resolutions and actions relating to eminent domain; adoption of budget;amendment of budqet;
fixing of compensation of officers and employees;position authorizations;establishment of fees;
issuance of bonds; and all matters subject to the power of initiative and referendum.
(c)Notwithstanding,subsections 605(a) and (b), the Mayor's veto power shall not extend to:
(1)Emergency ordinances;
(2)Certain land use decisions including; the amendment of specific plans, community
plans, and general plans rezonings;conditional use permits or other special use permits
approved by Council after consideration by the Planning Commission; or
(3) Any other land use action.other than text amendments to the Fresno Municipal Code,
and whether legislative o: quasi-judicial in nature, in which the matter has been
considered at a public hearing before the City Council and Planning Commission.
(d) Each proposed resolution or ordinance voted on by the Council that is not approved by the
Council and each ordinance or resolution adopted by the Council shall, within forty-eight hours of
such action. be transmitted to the Mayor by the City Clerk, with appropriate notation of the action
of the Council thereon./\11 ordinances, resolutions, or other action of Council SUbject to power of
the mayor's veto shall be acted upon by the mayor within ten days of receiving the clerk's
transmittalby Council
The Mayor shall either approve each ordinance,resolution or other action adopted by Council
subject to power of the mayor's veto adopted by the Council by signing and returning same to
the City Clerk within the required time limits, or shall veto any ordinance, resolution or other
action adopted by Council and shall return each such ordinance, resolution or action to the City
Clerk with his or her written objections within the required time limit. Failure to make such return
within the required time limit shall constitute approval and such ordinance, resolution, or action
shall take effect without the Mayor's signed approval. The City Clerk shall note such fact on the
official copy of such ordinance, resolution or action.
Any proposed ordinance, resolution or other action subject to power of the Mayor's veto which is
voted on by the Council that is not approved by the Council shall be reconsidered by the Council
on written request of the Mayor, stating his or her reasons therefor,filed with the City Clerk by
the mayor within ten days after the Council's action on such resolution or ordinance. The Council
shall reconsider such measure at its convenience,but not later than thirty days after the filing of
the Mayor's request therefor.
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
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;,RTICLE VI LEGISLATION
SEC,606.AMENDMENT OF ORDINANCES,The amendment of any section or
subsection of an ordinance may be accomplished solely by the re-enactment of such
section or subsection at length, as amended.
SEC,607.CODIFICATION Of ORDINANCES,The Council shall cause to be
classified and codified under appropriate heads all general ordinances in force and
cause the same to be printed in book,pamphlet,or looseleaf form for the use of the City,
its officers, and the public.
SEC.608.ORDINANCES,VIOLATION PENALTY.The Council may make the
violationof its ordinances a misdemeanor or an infraction which may be prosecuted in
the name of the People of the State of California,or may be redressed by civil action.
The Council may prescribe punishment for a violation which constitutes a misdemeanor
by a fine notto exceed one thousand dollars ($1000)or by imprisonment not to exceed
one year, or by both such fine and imprisonment,and may prescribe punishment for a
violation which constitutes an infraction.
(Amendment ratified 1975 General Municipal Election.)
SEC,609,ENACTMENT OVER VETO.The Council may reconsider any
ordinance,resolution,or other action SUbjectto the Mayor's veto,which has been vetoed
by the mayor and if, after such reconsideration,five members of the Council shall vote in
favor of passage thereof, it shall become effective notwithstanding the Mayor's veto. If
more than five votes are required for the adoption or approval of any resolution,
ordinance or other action by the provisions of this Charter or other superseding law,
such larger vote shall be required to overcome the veto of the Mayor. If such vetoed
ordinance,resolution,or other action is not passed over the Mayor's veto within thirty
days of such veto, the resolution,ordinance,or other action shall be deemed
disapproved.
(Amendment ratified 1993 General Municipal Election,April 27, 1993.)
SEC,610.EFFECTIVE DATE OF ORDINANCES.An ordinance adopted by the
Council shall become effective thirty days from and after the date of its final passage,
except the foilowinq,which shall take effect on the date of final passage:
(a) An ordinance calling or otherwise relating to an election;
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j,.v.T1CLE VI LEGISLATION
(;;) An ordinance declaring the amount of money necessary to be raised by taxation, or fixing the
rate of taxation, or levying the annual tax upon property;
(c) An emergency ordinance adopted in the manner provided in this Charter;
(d) An ordinance annexing areas to the City; or
(e) An ordinance providing for a tax levy or an appropriation for the usual current expenses and
outlays of the City.
The date of final passage shall be deemed the date of approval by Mayor pursuant to Charter
Section 605. In those cases, where the mayor does not have veto power, the date of final
passage shall be deemed the date of Council adoption.
If an ordinance becomes law when the time for approval or veto by mayor has expired and no
action has been taken, the date of expiration of that time shall be deemed the date of its final
passage.If an ordinance is adopted by Council pursuant to aveto override vote, the date of
Council's override vote shall be deemed the date of final passage.
(Amendment ratified 1993 General Municipal Election, Apr'127,'1993.)
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ARTICl.E VI!CHIEF ADMINISTRADVE OFFICER
"~RTICLE VII CHIEF ADMINISTRA.TIVE OFFICER
SEC.700.ADMINISTRATIVE POSITION.There shall be a Chief Administrative
Officer who shall be head of administrative branch of the City government.
SEC.701.QUALIFICATIONS.The Chief Administrative Officer shall be appointed
solely on the basis of his executive and administrative qualifications,with special
reference to his actual experience in or his knowledge of accepted practice in respect to
the duties of his office as hereinafter set forth. He shall have at least five year's
experience as the administratve head or assistant administrative head ofa city, or he
shall have had equivalent experience in the direction and supervision of other
IJovernmental,private business, or industrial activities of comparable importance and
magnitude.He need not be a resident of the City or State at the time of his appointment,
but during his tenure in office, he shall reside in the City of Fresno. No resident of the
County of Fresno at the time this Charter becomes fully operative shall be appointed
Chief Administrative Officer within twelve months thereafter.
SEC.702.APPOINTMENT AND REMOVAL.The Chief Administrative Officer
shall be appointed by the Mayor. Such appointment must be made within ninety days
after the first election held under this Charter and within ninety days after any
subsequent vacancy occurs in the office. The Chief Administrative Officer may be
removed from office by the Mayor.
(Amendment ratified 1993 General Municipal Election, April 27,1993,)
SEC.703.RESIGNATION.Before resigning his position,it shall be the duty of the
Chief Administrative Offcier to give the Mayor at least thirty days' notice in writing of his
or her intention to resign, stating the reasons therefor.
(Amendment ratified 1993 General Municipal Election, April 27,1993.)
SEC.704.COMPENSATION.The Chief Administrative Officer shall be paid a
salary commensurate with his or her responsibilities as Chief Administrative Officer of
the City which salary shall be established by Council resolution.In the event of his or her
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ARllCLE IffI CHIEF ADMINISTRATIVE OFFICER
removal from office,the Chief Administrative Officer shall be paid his or her salary
through thirty days following the date of his or her removal.
(/\mendment ratified 1993 General Municipal Election, April 27, 1993.)
SEC.705.POWERS AND DUTIES.The Chief Administrative Officer shall work
under the direct supervision of the Mayor.He or she shall be responsible to the Mayor
for the administration of all affairs of the City not otherwise assigned in this Charter.He
or she shall have the power and be required to:
(a)Exercise control over all departments, offices and agencies under his or her jurisdiction;
(b)Advise the Mayor concerning the creation, organization, conduct, operation, alteration, or
abolition of the various departments, offices and agencies of the city government
(c) Appoint, and he or she may suspend or remove, subject to the Civil Service System
provisions of this Charter, all department heads and officers of the City except elective officers
and officers the power of whose appointment is vested by this Charter in the Council, provided,
however, that the appointment, removal and suspension of the Controller shall be subject to the
approval of the'Council; approve or disapprove all proposed appointments and removals of
deputies,assistants and subordinate employees by department heads or officers except those
officers whose appointment is vested by this Charter in the Councilor mayor, and such
appointments and removals by such department heads or officers shall be subject to his or her
approval;
(d)Administer the budqet after adoption;
(e)Establish such financial and accounting records and procedures as will reflect the current
financial status of all municipal activities;
(f) Establish a central purchasing system of all city offices, departments and agencies;
(g) Keep the Mayor advised of the financial affairs and conditions and future needs of the City
and make recommendations to the Mayor concerning the administration of city affairs;
(h) Prepare and submit to the Mayor reports in answer to requests for information made to him
or her by the mayor;
(i) Perform such other duties as may be prescribed by this Charter or required of him or her by
the Mayor, not inconsistent with this Charter;
U)Attend all meetings of the Council, unless excused therefrom by the Mayor.
(Amendment ratified 1993 General Municipal Election, April 27,1993.)
SEC.706.INTERFERENCE IN ADMINISTRATIVE SERVICE.Neither the
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AHTlCLE VII CHIEF ADMINIS'ffiATlVE OFFICER
[\f)ayor nor the Council except by official action taken in policy matters, nor any of its
members shall interfere with the execution by the Chief Administrative Officer of his
powers and duties, or order, directly or indirectly, the appointment by the Chief
Administrative Offcier or by any of the department heads in the administrative service of
the city, of any person to an office or employment or his removal therefrom,Except for
the purpose of inquiry, the Mayor, the Council and its members shall deal with the
administrative service under the Chief Administrative Officer solely through the Chief
Administrative Officer and neither the Mayor nor the Council nor any member thereof
shall give orders to any subordinates of the Chief Administrative Officer, either publicly
or privately.
SEC.707.CHIEF ADMINISTRATIVE OFFICER PRO TEMPORE.
(Repealed;ratified 1993 General i'/lunicipal Election, April 27, 1993.)
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HrICLE VlIl OFFICtRS AND EMPLOYEES
"H~TICLE VIII OFFICERS AND EMPLOYEES
SEC.800.OFfiCERS TO BE APPOINTED BY THE COUNCIL.There shall be
a City Attorney and a City Clerk who shall be appointed by and serve at the pleasure of
the Council,but who may be removed only by a majority vote of the entire Council.
(Amendment ratified 1993 General Municipal Election, April 27, 1993.)
SEC.801.ADMINISTRATIVE DEPARTMENTS.The Council shall provide by
resolution not inconsistent with this Charter,for the organization,conduct and operation
of the several offices established by this Charter,and for the creation of departments,
i!:visions,offices and agencies,and for their consolidation,alteration or abolition.The
C.(jullcil by resolution,may assign additional functions or duties to offices,departments
Of"agencies not inconsistent with this Charter.No office provided in this Charter to be
filled by appointment by the Chief Administrative Officer may be consolidated with an
office to be filled by appointment by the Council.The Council,subject to the provisions
of this Charter,shall provide for the number,titles,qualifications,powers,duties and
compensation of all appointive officers and employees.
(Amendment ratified 1996 Primary Election, March 26, 1996.)
~H!C.802.CITY CLERK.POWERS AND DUTIES.The City Clerk shall have
power and be required to:
(<1)Be responsible for the recording and maintaining of a full and true record of all the
proceedings of the Council in books that shall bear appropriate titles and be devoted to such
purpose, and attend all meetings of the Council either in person or by deputy:
(b) Maintain separate books, in which shall be recorded respectively all ordinances and
resolutions, with the certificate of the Clerk annexed to each thereof stating the same to be the
Original or a correct copy, and as to an ordinance requiring publication, stating that the same has
been published in accordance with this Charter; keep all books properly indexed and open to
public inspection when not in actual use;
(c) Maintain separate files, with appropriate indexes thereto, of all contracts the execution of
which was specifically authorized byCouncil action, and of all official bonds of the City;
(d)Be the custodian of the Seal of the City;
(e)Administer oaths or affirmations, take affidavits and depositions periaining to the affairs and
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,",RTICLE VlII OFFJCERS AND E,1PLDYEES
business of the City and certify copies of official records;
(f)Be ex-officio Assessor, unless the Council has availed itself, or does in the future avail itself,
of the provisions of the general laws of the State relative to the assessment of property and the
collection of City taxes by county officers, or unless the Council by ordinance provides otherwise.
(g)Maintain in appropriate books and files such other records,documents,instruments,and
papers as the Council shall provide by ordinance.
Except as may be otherwise provided by ordinance or resolution of the Council the destruction
or other disposition of City records,documents,instruments,books, and papers in the custody of
the City Clerk shall be governed by the laws of the State regulating the destruction or disposition
of the records of general law cities.
(Amendment ratified 1969 General Municipal Election; approved,Assembly Concurrent
Resolution No. 172, filed with Secretary of State on June 12,1969,Res. Ch. 197, Stat. 1969.)
SEC,803..CITY ATTORNEY.POWERS AND DUTIES.To become eligible for
City Attorney the person appointed shall be an attorney-at-law duly licensed as such
under the laws of the State of California, and shall have been engaged in the practice of
law for at least five years prior to his appointment.The City Attorney shall have power
and may be required to:
(a)Represent and advise the Council and all city officers in all matters of IB.w pertaining to their
offices;
(b)Represent and appear for the city in any or all actions or proceedings in which the city is
concerned or is a party, includinq the prosecution of violations of this Charter and ordinances
enacted by the Council, and represent and appear for any city officer or employee, or former city
officer or employee,in any or all actions and proceedings in which any such officer or employee
is concerned or is a party for any act arising out of his employment or by reason of his official
capacity provided the interest of the city in such action or proceeding is not adversely affected;
(c) Attend all regular meetings of the Council and give his advice or opinion in writing whenever
requested to do so by the Councilor by any of the boards or officers of the city;
(d)Approve the form of all contracts made by and all bonds given to the city,endorsing his
approval thereon in writing;
(e)Prepare any and all proposed ordinances or resolutions for the city and amendments thereto;
(f)Surrender to his successor all books,papers,files and documents pertaining to the city's
affairs;
(g) The Council shall have control of all legal business and proceedings and may employ other
attorneys to take charge of any litigation or matter or to assist the City Attorney therein.
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Ai{j ,ClE VIII OFFICERS AND EMPLOYEES
SEC.804.CITY CONTROLLER.There shall be a Controller appointed by the
Chief Administrative Officer with the approval of the Council who shall have power and
shall be required to:
(a) Have charge of the Finance Department and of the administration of the financial affairs of
the city under the direction of the Chief Administrative Officer;
(b) Supervise and be responsible for the disbursement of all moneys and have control of all
expenditures to insure that budget appropriations are not exceeded;
(c)Submit to the Council through the Chief Administrative Officer a monthly statement of all
receipts and disbursements in sufficient detail to show the exact financial condition of the city;
and as of the end of each fiscal year, submit a complete financial statement and report;
(d) Supervise the keeping of current inventories of all property of the city by all city departments,
offices and agencies.
SEC.805,ADMINISTEFUNG OATHS.Each department head and his deputies
shall have the power to administer oaths and affirmations in connection with any official
business pertaining to his department.
SEC.806.DEPARTMENT HEADS.APPOINTMENT POWERS.Each
department head and officer authorized by the Charter shall have the power to appoint,
suspend or remove such deputies,assistants and subordinate employees as are
provided for by the Council for his department or office,subject to the approval of the
Chief Administrative Officer, the provisions of this Charter and of the Civil Service
System as adopted hereunder.
SEC.807.NEPOTISM.The Council shall not appoint to a salaried position under
the city government any person who is a relative by blood or marriage within the third
degree of anyone or more of the members of such Council, nor shall any department
head or other officer having appointive power or other supervising employee as defined
by ordinance appoint any relative of his within such degree to any such position.
SEC.808.OFFICIAL BONDS.The Council shall fix by ordinance or resolution the
amounts and terms of the official bonds of all officials or employees who are required by
ordinance to give such bonds. All bonds shall be executed by responsible corporate
surety, shall be approved as to form by the City Attorney,and shall be filed with the City
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!,'{!1CLE VIII OFFICERS AND EMPLOYEES
Clerk.Premiums on official bonds shall be paid by the City.
There shall be no personal liability upon,or any right to recover against,a superior officer,or his
oond, for any wrongful actor omission of his subordinate,unless such superiorofficerwas a
party to, or conspired in,such wrongful act or commission.
SEC.809.SALARIES AND WAGES.Compensation of officers and employees of
the City,except where this Charter provides that no salary shall be paid, shall be fixed
by the Council as it may from time to time determine;provided further,that city
employees shall be paid not less than the prevailing wage paid in private employment in
the City of Fresno in the job or position in which said employees work and the City shall
not require its employees to work longer hours for the same wage than workers in
private employment in said city work for such wage in like employment.
(/\mendment ratified 1993 Primary Election,March 2,1993.)
SEC.810.HOURS OF WORK.There shall not be established for any position in
the city service a regularly scheduled work day of more than eight hours or a regularly
scheduled work week of more than five days,except that there may be established a
regularly scheduled work day of up to ten hours for any position for which the regularly
scheduled work week is not more than four days, or any other work week mutually
agreed to between the City and a non-represented employees or between the City and a
recognized employee organization. A member of the city fire fighting force shall be
required to work, on a twenty-four hour day basis, not more than fifty-six hours per week
on an average,said average to be determined in multiples not to exceed ninety days.
(Amendment ratified 1973 General Municipal Election.)
(Amendment ratified 1996 Primary Election,March 26, 1996.)
SEC.811.HOLIDAYS.All employees,excepttemporary employees,shall be
entitled to or shall receive credit for all holidays during each fiscal year without loss of
compensation.The word "holiday" as used in this section, shall mean every state
holiday,including that day in November known as Thanksgiving Day, but not including
Sundays or any other day appointed by the President of the United States or the
C;overnor of the State as a public fast,thanksgiving,or holiday,unless such appointed
day is also declared to be a holiday pursuant to ordinance or resolution of the Council.
The amendmentof this section to specifythe exclusionof Sunday as a "holiday"underthis
section is declaredto be a restatement,for the purpose of clarification only, of the lawof the
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A!U1CLE V]]]OFFICERS AND EMPLOYEES
.iection in effect prior to such an amendment.
(Amendment ratified 1973 General Municipal Election.)
SEC.812.STATUS OF EXISTING EMPLOYEES.Persons employed by the city
at the time this Charter becomes fully operative,except elective officers and members of
appointive boards,commissions,and committees holding positions the same in
substance as positions established or continued in the plan of organization provided
under this Charter or by ordinance not inconsistent therewith and who have completed
the period of probationary employment under the preceding Charter provisions and Civil
:3ervice rules or have served satisfactorily an equivalent period of time in positions not
subject to probationary employment,shall have the right to remain in such positions or
other positions of like duties,responsibilities and authority until promoted,removed,or
reduced in rankin accordance with the provisions of this Charter.f\ny rights previously
accumulated by a person under probationary status shall be retained.
f'..ny officer or employee of the cily who is appointed to or continued in a position as Department
Head and is subsequently removed therefrom, except for malfeasance or misconduct, shall
revert to his former position without loss of any rights or privileges and upon the same terms and
conditions as if he had remained in said position continuously. Should such person be eligible for
retirement under the retirement or pension system, he shall upon recommendation of the Chief
Administrative Officer be retired instead of being restored to his former position.
The rights of employees relating to accrued sick leave and vacation or the validity of eligible lists
created by virtue of Charter or Civil Service provisions in effect at the time this Charter becomes
fully operative shall continue until exhausted pursuant to such provisions.
SEC.813.POLITICAL ACTIVITIES.Except as otherwise provided by the general
laws of this state heretofore or hereafter enacted,no person in the Administrative
Service,or seeking admission thereto,shall be employed,promoted,demoted or
discharged or in any way favored or discriminated against because of political opinions
or affiliations or because of race, sex, or religious belief.
No officer or employee of the city and no candidate for any city office shall,directly or indirectly,
solicit any assessment, subscription, or contribution, whether voluntary or involuntary, for any
political purpose whatever, from anyone on the eligible lists or holding any position in the
Administrative Service.
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
F~esolution No. 130, filed with Secretary of State on June 18, 1971,Res.Gh. 77, Stat. 1971.
Amendment ratified March 5,1985 Special Municipal Election; filed with Secretary of State on
r'J1ay 6,1985.)
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!'.R.TlCLE IX BOARDS AND COl1MISSIONS
.ARTICLE IX BOARDS AND COMMISSIONS
SEC.900.IN GENERAL.There shall be such boards and commissions as are
hereinafter established which shall have the powers and duties herein stated.The
Council may create by ordinance additional boards or commissions as in its judgment
are required,and may grant to them such powers and duties as are consistent with the
provisions of this Charter.
SEC.901.APPROPRIATIONS.The Council shall include in its annual budget such
appropriations of funds as in its opinion shall be sufficient for the efficient and proper
functioning of such boards and commissions.
SEC.902.APPOINTMENTS,TERMS.The members of each of such boards or
commissions shall be appointed by the Mayor with the approval of the Council from the
qualified electors of the City, none of whom shall hold any paid office or employment in
the City government.They shall be subject to removal by motion of the Council adopted
by at least five affirmative votes. The members thereof shall serve for a term of four
years and until their respective successors are appointed and qualified.
The terms of the members first appointed to each board and commission shall be determined by
lot so that as nearly as possible theterms of twenty-fivepercent of thetotal membershipof each
board or commission shall expire each succeeding July 1.
Thereafter,any appointmentto fill an unexpired term shallbe for such unexpired period.
(Amendment ratified 1969 General Municipal Election;approved,Assembly Concurrent
Resolution No.172,filed with Secretary of State on June 12, 1969,Res.Ch.197.Stat.1969.)
SEC.903.EXISTING BOARDS AND COMMISSIONS.The respective terms of
office of all members of the boards and commissions in existence at the time this
Charter becomes fully operative shall terminate.
SEC.904.MEETINGS,CHAIRMEN.As soon as practicable,following the first day
of July of every year, each of such boards and commissions shall organize by electing
one of its members to serve as presiding officer at the pleasure of such board or
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AHTICLE IX BOARDS AND COMMISSIONS
cornrnission.Each board or commission established by this Charter shall hold regular
meetinqs at least once each month.Each board or commission created by ordinance
shall hold regular meetings at such regular intervals as the proper transaction of its
business shall require,but not less often than once each year.All proceedings shall be
open to the public.
Lxcept as may be otherwise provided in this Charter, the Chief Administrative Officer shall
designate a secretary for the recording of minutes for each of such boards and commissions,
who shall keep a record of its proceedings and transactions. Each board or commission may
prescribe its own rules and regulations which shall be consistent with this Charter and copies of
which shall be kept on file in the office of the City Clerk where they shall be available for public
inspection. Each board or commission shall have the same power as the Council to compel the
attendance of witnesses, to examine them under oath, to compel the production of evidence
before it and to administer oaths and affirmations.
(Amendmentratified 196~JGeneral Municipal Election; approved, Assembly Concurrent
Resolution No.172,.filedwith S",netary of State on June 12,1969,Res. Ch. 197, Stat. 1969.)
SEC.905.COMPENSATION.VACANCIES.The members of boards and
commissions shall serve without compensation for their services as such unless the
Council shall otherwise provide,but may receive reimbursement for necessary traveling
and other expenses incurred on official duty when such expenditures have received
authorization by the Council.
.Any vacancies in any board or commission, from whatever cause arising, shall be filled by
appointment by the Mayor with the approval of the Council. Upon a vacancy occurring leaving an
unexpired portion of a term, any appointment to fill such vacancy shall be for the unexpired
portion of such term. If a member of a board or commission absents himself from three
consecutive regular meetings of such board or commission, unless by permission of such board
or commission expressed in its official minutes, or is convicted of a felony, or ceases to be a
qualified elector of the City, his office shall become vacant and shall be so declared by the
Council.
SEC.906.PLANNING COMMiSSiON.ESTABLISHED.There shall be a
Planning Commission consisting of seven members.Such city officers and employees
as shall be designated by the Chief Administrative Officer shall meet with and participate
in the discussions of the Planning Commission but shall not have a vote.
SEC.907.PLANNING COMMISSION.The Planning Commission shall have the
power and duty to:
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ARTICLE IX BOARDS MID COMMISSIONS
(a)After a public hearing thereon,recommend to the Council the adoption, amendment, or
repeal of the General Plan, or any part thereof,for the development of the city;
(b)Exercise such control over land subdivisions as is granted to it by the Council;
(c)Make recommendations concerning proposed public works and for the clearance and
rebuilding of blighted or substandard areas within the city;
(d)Exercise such functions with respect to zoning and land use as may be prescribed by
ordinance,not inconsistent with the provisions of this Charter,
(Amendment ratified 1971 General Municipal Election; approved,Assembly Concurrent
Resolution No, 130, filed with Secretary of State on June 18, 1971,Res,Ch, 77, Stat.1971,)
SEC.908.CIVIL SERVICE BOARD.The Civil Service Board shall consist of five
members,none of whom while a member of the Board,or for a period of one year after
ne has ceased for any reason to be a member,shall be eligible for appointment to any
salaried office or employment in the service of the City,"Salaried office"shall not be
deemed to include an elective office or membership on a board or commission of the
city,
(Amendment ratified 1971 General Municipal Election; approved,Assembly Concurrent
Resolution No, 130, filed with Secretary of State on June 18, 1971, Res, Ch. 77, Stat.1971,)
SEC.909.CIVIL SERVICE BOARD,POWERS AND DUTIES.The Civil
Service Board shall have the power and duty to:
(a)Recommend to the Council, after a public hearing thereon, the adoption, amendment, or
repeal of Civil Service rules and regulations;
(b)Act in an advisory capacity to the Council on problems concerning personnel administration;
(c)Conduct hearings as provided in Section 1002 relative to the suspension,demotion, and
removal of any person in the City employment;
(d)Make any investigation which it may consider desirable concerning the conditions of
employment and the administration of personnel in the municipal service and report its findings
to the Council;
(e) Perform such other duties as may be prescribed by ordinance not inconsistent with the
provisions of this Charter.
(Amendment ratified 1971 General Municipal Election; approved,Assembly Concurrent
Resolution No,130, filed with Secretary of State on June 18, 1971,Res,Ch, 77, Stat. 1971.)
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,t;RTlell:IX BOARDS AND COMMISSIONS
sec,910.RETIREMENT ANDIOR PENSION BOARDS.Notwithstanding any
other provisions in this Charter, the City of Fresno Fire and Police Retirement Board and
the City of Fresno Employee's Retirement Board shall each consist of five members,
selected as follows:
(a) two members elected by and from the City employees affected;and,
(b) two members from management appointed by the Mayor with the approval of the City
Council;and,
(e) the fifth member chosen by the previously designated four members,
The members of such boards shall be removable only by the appointing or electing authority.
The Retirement Board shall appoint and direct a Retirement Administrator who shall report to the
~loard;serve at the Board's pleasure;administer the retirement office and its financial affairs as
directed by the Board; appoint.suspend and remove subordinate employees subject to the Civil
:>ervice System provisions of this Charter; and perform such other administrative duties as
,ilr,,;c!ed by the Board,
(Amendment ratified 1996 Primary Election, March 26,1996,)
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MH!CLE X CIVIL SERVICE SYSTEM
ARTICLE X CIVIL SERVICE SYSTEM
SEC.1000.UNCLASSifIED AND CLASSifiED SERVICE.The administrative
::3ervice of the City shall be divided into Unclassified and Classified Service:
(a) The Unclassified Service shall be comprised of the following officers, employees, and
positions:
(1) The Chief Administrative Officer, his or her deputies, if any, the City Clerk, the City
Attorney,his or her deputies, if any, Council Assistants and all management employees
serving in a class which contains one or more positions atthe division head level and
above, including the heads of all departments created by the Council.
(2)Positions in any class or grade created for special or temporary purposes for a period
of not lonqer than one year within any two consecutive fiscal years;
(3)Persons employed to render professional, scientific, technical, or expert services of .
any occasional or exceptional character:
.(4)Part-time employees paid on an hourly or per diem basis.
(b) The Classified Service shall be comprised of all positions not specifically included in this
section in the Unclassified Service.
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
Resolution No. 130, filed with Secretary of State on June 18, 1971, Res. Ch. 77,Stat.1971.)
(Amendment ratified 1981 Municipal Election, March 3, 1981.)
(Amendment ratified 1993 General Municipal Election, April 27,1993.)
SEC.1001.MERIT PRINCIPLE.All appointments to and promotions within the
Classified Service shall be based upon efficiency and fitness which shall be ascertained
by means of recognized personnel selection techniques.
SEC.1002.SUSPENSION,DEMOTION,AND DISMISSAL.Except as
otherwise provided in this Charter, an officer or employee holding a position in the
classified service may be suspended without pay,demoted,or removed from his
position for malfeasance,misconduct,incompetence,inefficiency or for failure to perform
tile duties of his position or to observe the established rules and regulations in relation
thereto,or to cooperate reasonably with his superiors or fellow employees, but subject to
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rrnICLE X CIVIL SERVICE SYSTEM
Hle right to a hearing before the Civil Service Board in the manner set forth herein.
;\n officer or employee suspended,demoted,or removed shall be given in writing the reasons
fur his suspension,demotion, or removal. He shall be allowed a reasonable time for answering
the same and may demand a public hearing upon the charges before the Civil Service Board,
such hearing to be held in accordance with procedures established therefor.Hearings may be
conducted informally and the technical rules of evidence need not apply but the officer or
employee whose suspension,demotion,or removal is sought may be heard in person, be
permitted to be represented by counsel and to produce testimony in his own behalf.
The decision of the Civil Service Board upon any such hearing shall be final. Any action or
proceeding brought to determine the validity of the decision shall be commenced in a court of
competent jurisdiction within thirty days after the date of mailing of notice of the decision to the
parties.
(/\mendment ratified 1971 General Municipal Election;approved,Assembly Concurrent
Peso!ution No. 130, filed with Secretary of State on June 18, 1971, Res. Ch. 77, Stat. 1971.)
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ARncLE XI RETIREMENT
ARTICLE XI RETIREMENT
SEC.1100.RETIREMENT SYSTEM.The Council shall by ordinance provide for
and establish a fund or funds for the relief and pensioning of all employees ofthe City of
Fresno,except elective officers and part-time employees,who have been disabled or
become superannuated in the service of the City and shall provide for the administration
of such fund or funds; provided,however,that retirement benefits established by any
ordinance existing at the effective date of this Charter shall not be reduced,decreased
or diminished.
~;EC.1101,VETERANS"i',jotwithstanding any provision of law, any member of the
J\dministrative Service of the City of Fresno who enters or shall have heretofore entered
the armed services of the United States or the State of California during time of war or
during any emergency declared by the President of the United States while so
employed,and shall have been honorably discharged therefrom and thereupon returned
to such employment within a reasonable time, after the termination of such war or
emergency,shall for all purposes of any pension or retirement ordinance now or
hereafter in effect, be entitled to have such time as he may have served in such armed
forces deemed as service to the City of Fresno at the rate of compensation received
immediately prior to his entry into such armed service.However,no contribution toward
any pension or retirement fund shall be required of such person for the time spent in
such armed forces.
The provisions of this section shall be cumulative to any provisions of law enacted by the State
of Californiaorthe United States relating to the reemployment of persons entering the armed
forces of the United Statesorof theState of California.
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!.FTlCLL XII FISCAL ADI'iINISTRATION
)\RTRClE XII FISCAL ADMINISTRATION
:::tiEC.1200.TAX SYSTEM.For the purpose of municipal property taxation,the City
L'dy continue to use the County system of assessment,tax collection and deposit as
s.ich system is now in effect or may hereafter be amended and insofar as such provision
'S not in conflict with this Charter.
'··;hould there arise any reason whatsoever that prevents the City from using the County system,
JiC]Council shall provide by ordinance a systemfor the assessment,collection and deposit of
municipal property taxes.
:;~.l'::C.1201.FISCAL YEAH:,The fiscal year of the City shall begin on the first day of
July of each year and end on the thirtieth day of June of the following year.
SEC.1202.ANNUAL BUDGET.PREPARATION BY CHIEF
,f.\It)MINISTRATIVE OFFICER.At such date as the Mayor shall determine,each
department head shall furnish to the Mayor through the Chief Administrative Officer,
estimates of revenue and expenditures for his or her department,detailed in such
manner as may be prescribed by the mayor.In preparing the proposed budget, the
Mayor shall review the estimates, hold conferences thereon with the Chief
,\dministrative Officer and respective department heads and may revise the estimates
as he or she may deem advisable.
I.Amendment ratified 1993 General Municipal Election,April 27, 1993.)
SEC.1203.BUDGET.SUBMISSION TO THE COUNCil.At least thirty days
prior to the beginning of each fiscal year,the Mayor shall submit to the Council the
proposed budget as prepared for him or her. The Council may review the proposed
oudget and make such revisions as it may deem advisable.At the time he or she
submits the proposed budget to the Council the Mayor shall determine, and shall advise
the Council of, the time for holding of a public hearing thereon,and shall cause notice to
be given of the time and place of such hearing,not less than ten days prior to the time
fixed therefor,by publication of such notice at least once in a newspaper of general
circulation in the City. Copies of the proposed budget shall be available for inspection by
The public in the office of the City Clerk at least ten days prior to the hearing.
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ARTICLE XII FlSCAL ADMINISTRATION
(/\rnendment ratified 1993 General Municipal Election,April 27,1993.)
SEC.1204.BUDGET,PUBLIC HEARING.At the time so advertised or at any
time to which such public hearing shall from time to time be adjourned,the Council shall
hold a public hearing on the proposed budget, at which interested persons desiring to be
heard shall be given such opportunity.
SEC.1205.BUDGET,FURTHER CONSIDERATION AND ADOPTION.After
the conclusion of the public hearing the Council shall further consider the proposed
budget and make any revisions thereof that it may deem advisable and on or before
June 30, it shall adopt a budget. A copy thereof, certified by the City Clerk, shall be filed
with the person retained by the Council to perform auditing functions for the Council and
a further copy shall be placed and shall remain on file in the office of the City Clerk,
where it shall be available for public inspection The budget so certified shall be
reproduced and copies made available for the use at departments,offices and agencies
of the City.
(Amendment ratified 1971 General Municipal Election;approved,Assembly Concurrent
Resolution No.130,filed with Secretary of State onJune 18,1971,Res.Ch.77,Stat.1971.)
SEC.1206.BUDGET,APPROPRIATIONS.From the effective date of the budget,
the several amounts stated therein as proposed expenditures shall be and become
appropriated to the several departments,offices and agencies for the respective objects
and purposes therein named. All appropriations shall lapse at the end of the fiscal year
to the extent that they shall not have been expended or lawfully encumbered.
At any meeting afterthe adoption ofthe budget,the Council may amend or supplement the
budqetby motion adopted bythe affirmative votes of at least five members so as to authorize
the transferof unused balances appropriated for one purpose to anotherpurposeor to
appropriate available funds not included in the budget.
SEC.1207.TAX LEVY.On or before the last Tuesday in August in each year, the
Council shall, by ordinance, levy such tax as may be necessary to meet the
appropriations made (less the estimated amount of revenue from other sources), and all
sums required by law to be raised on account of the City debt and interest thereon,
together with such addition,not exceeding five per cent, as may be deemed necessary
to meet commissions,fees and deficiencies from the estimates in the amount of taxes
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.,;,':1 JCLE XII FISCAL ADI~INISTRA nON
collected.
:SIEC.1208.PROCUREMENT AND COMPETITIVE BIDDING,
(a)Every contract involving an expenditure of city moneys of more than one hundred thousand
dollars ($100,000),adjusted annually on the first of July to the nearest one thousand dollars
($1,000)in response to changes in the National Consumer Price Index (United States City
Average For All Products),for materials, supplies,equipment orfor any public work of
improvement,shall be let to the lowest responsive and responsible bidder after notice by
uublication in a newspaper of general circulation within the city by one or more insertions,the
first of which shall be at least seven days before time for opening bids, For purposes of this
subsection,Council shall by ordinance define "public work of improvement",
(1) All bids hereunder shall be accompanied by either a certified, or cashier's check, an
irrevocable letter of credit or a bidder's bond executed by a corporate surety admitted by
the California Insurance Commissioner to do business in California, payable and
acceptable to the city,SL;ch security shall be in an amount not less than.that specified in
the notice inviting bids or in the specifications referred to therein, or if no amount be so
specified, then in an amount not less than ten percent of the aggregate amount of the
bid, A certificate of deposit or other instrument approved by Council may be accepted by
the city in lieu of a bidder's bond, If the successful bidder neglects or refuses to enter into
the contract within the time specified in the notice inviting bids or specifications referred
to therein,the amount of the bidder's security may be declared forfeited to the city and
may be collected and paid into a lawful,available city fund, and all bonds so forfeited
shall be prosecuted and the amount thereof collected and paid into such fund,
(2) All bids hereunder shall be submitted in a sealed envelope and shall be filed with the
officer in charge of the purchasing function prior to the opening time specified in the
notice inviting. bids, Such officer shall receive and be custodian of such bids and keep the
same confidential until they are opened and declared,
(3) All bids received hereunder shall be publicly opened and declared at the time and at
the place fixed in the notice inviting bids,Thereafter,the bids shall be tabulated and
analyzed by the officer in charge of the purchasing function, who shall submit them,
together with recommendations thereon,to the Chief Administrative Officer, The Chief
Administrative Officer shall review the bids and submit them to the Council,along with his/
her recommendations,at a duly scheduled meeting of the Council.
(4) The Council shall have the right to waive any informality or minor irregularity in a bid,
The Council may reject any and all bids presented and may readvertise in its discretion,
(5) The provisions of this subsection (a) shall not apply to any of the following:
(i) A work of improvement obtained through a design build process if authorized
pursuant to subsection (c) herein,
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;WHCLE XII fISCAL AOMINISTRAl10N
(ii) Work done by the city with its own personnel and/or equipment.
(iii) Materials, supplies,equipment or any public work of improvement obtained
from or through any governmental agency.
(iv) When Council determines that the work to be done or the goods to be
supplied can only be provided by one source, and the purchase is authorized by
resolution of the Council containing a declaration of the facts constituting the sale
source.
(v) When the purchase is deemed by Council to be of urgent necessity for the
preservation of life, health or property, and such purchase is authorized by
resolution passed by at least five affirmative votes of the Council and containing a
declaration of the facts constituting the urgency.
(6) For those instances when alternative bid forms, or additive or deductive items are
included in bid specifications, Council may establish by ordinance the method that will be
used to determine the lowest bid. The establishment of any such method by the Council
will not preclude the city from addinq to or deducting from the contract any of the additive
or deductive items after the lowest responsive and responsible bidder has been
determined.Nothing in this subsection (a) shall preclude the Council from establishing a
method reserving to the Council the right to award,after consideration of the amount of
the bids and the combination of work to be performed, to the lowest responsive and
responsible bidder of any alternative bid form or any combination of bid prices on the
base contract and additive and/or deductive items identified in the city specifications,
when in Council's discretion it determines such award to be either in the best interests of
the city or obtains for the public the best economic result Notwithstanding subdivisions
(2) and (3) of this subsection (a),Council may establish by ordinance a method whereby
the identity of the bidder is kept confidential until following Council's determination of the
lowesl bid.
(7) The Council may by resolution or ordinance establish procedures and requirements
for hearing appeals by any bidder who has been determined by the Chief Administrative
Officer to be nonresponsive or nonresponsible.The Council may also by resolution or
ordinance establish procedures and requirements for the debarment of any bidder who
has been determined by the Council to be nonresponsible.
(b)Notwithstanding subsection (a) above, the Council may by ordinance authorize the officer in
charge of the purchasing function, in the evaluation of any or all sealed bids for the purchase of
materials,supplies,equipment and/or any public work of improvement,to extend up to a five
percent preference for a local business in award of all contracts except for those contracts
funded by the federal or state government when such funding would be jeopardized because of
this preference. For purposes of this section, "local business" shall be as defined by Council
within such ordinance.
(1) The amount of the preference shall be equal to the amount of the percentage applied
to the lowest responsive and responsible bid.
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(2) If the bidder submitting the lowest responsive and responsible bid is not a local
business,and if a local business has also submitted a responsive and responsible bid,
and, with the benefit of the preference, the local business's bid is equal to or less than
the original lowest responsive and responsible bid, the city shall award the contract to the
local business at its submitted bid price.
(3)The bidder shall certify, under penalty of perjury, that the bidder qualifies as a local
business. The preference is waived if the certification does not appear on the bid.
(c) Council mayby ordinance establish a "design build process" which may be utilized in lieu of a
competitive bid process as required by this section for construction of any public work of
improvement.
lei)To be valid hereunder,any contract with the city for property, goods, services, materials,
supplies,equipment or work shall be in writing and approved as to form by the City Attorney.
(e) The city shall notbe subject to the California Public ContractCode,in whole or in part, unless
Council agrees by ordinance.
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
!\8solution No. 130, filed with Secretary of State on June 18, 1971, Res. Ch. 77, Stat. 1971.)
(Amendment ratified 1979 General Municipal Election, March 6, 1979.)
(Amendment ratified 1988 General Election,November 8, 1988.)
(Amendment ratified 1992 General Election,November 3, 1992.)
(Amendment ratified 1996 Primary Election, March 26, 1996.)
(Amendment ratified 2002 Consolidated Direct Primary Election, March 5, 2002.)
gIEC.1209.CASH BASIS FUND.The Council may maintain a revolving fund, to be
known as the "Cash Basis Fund", for the purpose of placing the payment of the running
expenses of the City on a cash basis when so maintained.A reserve shall be built up in
[his fund from any available sources in an amount which the Council deems SUfficient.
with which to meet all lawful demands against the city for the first five months, or other
necessary period,of the succeeding fiscal year prior to the receipt of ad valorem tax
revenues.Transfers may be made by the Council from such fund to any other fund or
funds of such sum or sums as may be required for the purpose of placing such funds, as
nearly as possible,on a cash basis. All moneys so transferred from the Cash Basis
Fund shall be returned thereto before the end of the fiscal year.
;SEC.1210.TEMPORARY LOANS.Money may be borrowed in anticipation of the
receipts from taxes during any fiscal year, by the issue of notes, certificates of
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ART1CLC XIl !'!SC!\L ADCllN1STRATION
indebtedness or revenue bonds; but the aggregate amount of such loans at any time
outstanding shall not exceed twenty-five percent of the receipts from taxes during the
preceding fiscal year; and all such loans shall be paid out of the receipts from taxes for
the fiscal year in which they are issued.
SEC.12'11,CAPITAL OUTLAYS fUND.A fund for capital outlays,generally is
hereby created,to be known as the "Capital Outlays Fund".The Council may create by
ordinance a special fund or funds for a special capital outlay purpose. The Council may
levy and collect taxes for capital outlays and may include in the annual tax levy a levy for
such purposes in which event it must apportion and appropriate to any such fund or
funds the moneys derived from such levy;provided,however,that the tax rate for capital
outlay purposes does not exceed twenty cents (20¢) in anyone year.
Once created, such fund shall remain inviolatefor the purpose for which itwas created;if for
capital outlays generally,then for any such purposes,and if for a special capital outlay,then for
such purpose only, unless the useof such fund for some other purpose is authorized by the
affirmativevotes of a majority ofthe electors voting on such proposition at a general or special
election at which such proposition is submitted.
if the purpose for which any capital outlayfund has been created has been accomplished,the
Council may transfer any unexpended or unencumbered surplus remaining in such fund to the
fund for capital outlays generally,established by this Charter.
SEC.1212.UNAPPROPRIATED RESERVE FUND.The Council shall establish
a fund known as the "Unappropriated Reserve Fund"for the purpose of meeting
unforeseen contingencies and emergencies of the City for such amount as established
by the Council.Said fund shall remain intact except by the affirmative vote of at least five
members of the Council with a statement declaring the reason for its use.
SEC.1213.BONDED DEBT LIMIT.The City shall not incur indebtedness
evidenced by general obligation bonds which shall in the aggregate exceed the sum of
twenty percent of the total assessed valuation for purposes of City taxation of all the real
and personal property within the City,exclusive of any indebtedness that has been or
may hereafter be incurred for the purposes of acquiring,constructing,extending,or
maintaining municipal utilities for which purpose a further indebtedness may be incurred
by the issuance of bonds,subject only to the provisions of the State Constitution and of
this Charter.
No bonded indebtedness which shallconstitute a general obligation of the City maybe created
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ill rless authorized by the affirmative votes of a majority of the electors voting on such proposition
,:,i any election at which the question is submitted to the electors and unless in substantial
compliance with the provisions of the State Constitution and of this Charter.
(Amendment ratified 1971 General Municipal Election; approved,Assembly Concurrent
{"solution No. 130; filed with Secretary of State on June 18, 1971, Res. Ch. 77, Stat.1971.)
:"'1>12:.«::.1214.PRESENTATION OF DEMANDS.(Repealed Resolutions Chapter
'152,Statutes 1961).
'SEC.1215.ACTIONS AGAINST THE CITY.(Repealed Resolutions Chapter
152,Statutes 1961).
;c;,Ir:;C.1216.INDEPENDENT AUDIT.The Council shall employ at the beginning of
each fiscal year a public accountant who shall, at such time or times as may be specified
by the Council,and at such other times as he shall determine,examine the books,
records,inventories and reports of all officers and employees who receive,handle or
disburse public funds and of all such other officers,employees or departments as the
Council may direct. As soon as practicable after the end of the fiscal year, a final audit
and report shall be submitted by such accountant to the Council,one copy thereof to be
distributed to each member,one to the Chief Administrative Officer,Controller,
Treasurer,and City Attorney,respectively,and three additional copies to be placed on
file in the office of the City Clerk where they shall be available for inspection by the
qeneral public.
SEC.1217.REGISTERING WARRANTS.Warrants on the City Treasurer which
me not paid for lack of funds shall be registered.All registered warrants shall be paid in
the order of their registration when funds therefor are available and shall bear interest
from the date of registration at such rate as shall be fixed by the Council by resolution.
SEC.1218.MUNICIPALLY OWNED UTILITIES.The Council through the Chief
Administrative Officer shall endeavor to make each municipally owned utility financially
self-sustaininq.After providing for depreciation reserves and amortization of general
obligation and revenue bonds issued for such utility and for reasonable accumulation of
reserves for improvement and expansion,and for deposits into special funds created to
",ecure revenue bonds issued for such utility,each utility shall apply all annual profits
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ARTICLE XII FISCAL ADMINISTRATION
Thereafter remaining to rate reductions, subject to any limitations on the application of
such profits or on rate reductions contained in any resolution of the Council relating to
the issuance of revenue bonds for such utility. No municipally owned utility shall be
operated for the benefit of other municipal functions nor be used directly or indirectly as
a general revenue-producing agency for the City, but may pay to the City such amounts
of money,in lieu of property and other taxes normally placed upon private business
enterprises,as the Council may provide by ordinance and may also pay to the City for
any lawful purpose such amounts of surplus annual profits as may be permitted by the
provisions of any resolution of the Council relating to the issuance of revenue bonds.
SEC.12'19.OFF·STREET VEHICULAR PARKING.That the City of Fresno, in
addition to all other powers elsewhere enumerated in this Charter, shall have the power
to acquire (Whether by purchase, lease,eminent domain or otherwise)construct,
establish,improve, extend, maintain, operate, administer, lease,sublease and let off
street vehicular parking facilities and places within the City of Fresno in order to relieve
traffic congestion and promote the welfare of the citizens and inhabitants thereof.
WitllOut limiting the generality of the next preceding paragraph, the City shall have the power:
(a) To acquire lands and property and rights-of-way necessary and convenient for use as
parking places;
(b) To acquire lands and property and rights-of-way necessary and convenient for the
opening, widening, straightening and extending of streets or alleys necessary or
convenient for ingress or egress from any parking place herein established;
(c) To acquire by condemnation, purchase, or gift any property or any interest therein.
Any lands or property necessary or convenient for off-street vehicular parking places may
be acquired in fee simple by condemnation or otherwise;
(d) To improve any lands acquired by the construction thereon of garages or other
buildings or improvements necessary or convenient for off-street vehicular parking
purposes;
(e) To coiled fees or charges to pay all or any part of purchasing,improving,repairing or
operating off-street vehicular parking. To establish and regulate rates and charges for all
services provided the users of such facilities;
(f) To establish funds for such system or systems and place limitations upon the use of .
moneys therefrom;
(g) To establish off-street vehicular parking places only within the City of Fresno;
(h) To make all necessary rules and regulations regarding the operation and
maintenance of off-street vehicular parking facilities;
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(i) To issue revenue bonds and refunding revenue bonds for the purchase,acquisition,
construction,improvement,operation and maintenance of any and ali off-street vehicular
parking facilities so acquired and to evidence such obligation for payment,discharge and
retirement of the cost of such facilities,improvements and projects by the issuance of
revenue bonds therefor,including refunding revenue bonds,in negotiable or non-
negotiable form and payable solely out of the revenue derived from the operation,and
control of such off-street vehicular parking facilities,in accordance with the procedure
established by Section 1222 of this Charter;
OJ To bind,allocate,pledge and authorize payment of all or any part of the net revenues
collected from the establishment and operation of parking meters within this city for
periods of years for the payment of operation and maintenance costs of such off-street
vehicular parking facilities and principal and interest on all revenue bonds issued and
outstanding,until all of such bonds have been fully paid;
(k) To do any andall acts or things necessary or appropriate to carry out the purpose of
this section.
SEC.'1220.AIRPORT FACILITIES.The City of Fresno shall have the power to
acquire (whether by lease,purchase,eminent domain or otherwise),construct,
establish,improve,extend,maintain,operate,administer,lease,sub-lease and let
airport facilities,including but not limited to runways,hangars,warehouses,bUildings for
[he repair or manufacture of airplanes or airplane parts,control towers,traffic control
devices and administration facilities within or without the City of Fresno to promote and
facilitate air traffic and promote the welfare of the citizens and inhabitants thereof.
Without limiting the generality of the next preceding paragraph,the City shall have the power:
(a) To acquire lands and property and rights-of-way necessary and convenient for use for
airport purposes;
(b) To acquire by condemnation,purchase,or gift any property or any interest therein;
(c) To improve any lands acquired by the construction thereon of runways,hangars,
warehouses,buildings for the repair or manufacture of airplanes or airplane parts, or
other buildings or improvements necessary or convenient for airport purposes;
(d) To collect fees,rentals or charges to pay all or any part of purchasing,improving,
repairing or operating airport facilities;to establish and regulate rentals,rates and
charges for all services provided the users of such facilities;
(e) To establish funds for any or all such facilities and place limitations upon the uses of
the money therefrom;
(f) To make all necessary rules and regulations regarding the operation and maintenance
of airport facilities or properties;
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t,hTIC!..E XII FISCAL ADMINISTRATION
(g) To issue revenue bonds and refunding revenue bonds for the purchase, acquisition,
construction,improvement,extension, operation or maintenance of any and all airport
facilities so acquired and to evidence such obligation for payment,discharge and
retirement of the cost of such facilities,improvements and projects by the issuance of
revenue bonds therefor, including refunding revenue bonds, in negotiable or non-
negotiable form and payable solely out of the revenue derived from the operation,control
or leasing of such airport facilities or properties or any part thereof, in accordance with
the procedure established by Section 1222 of this Charter;
(h) To bind, allocate, pledge and authorize payment of all or any part of the gross
revenues collected from airport operations or from lands owned or held for airport
purposes of every kind and nature for periods of years, for the payment of operation and
maintenance costs of such airport facilities and principal and interest on all revenue
bonds or refunding revenue bonds issued and outstanding until all such bonds have
been fully paid;
(i) To do any and all acts C"things necessary or appropriate to carry out the purposes of
this section.
SEC,'1221.OTHER REVENUE·PRODUCING UTILITIES.The City of Fresno
shall have power to acquire (whether by lease,purchase,eminent domain or otherwise),
construct,establish,improve,extend,maintain,operate,administer,lease,sublease and
sublet any revenue-producing utility,including any and all improvements,buildings,
systems,plants,works,facilities or undertakings used or useful in
(I) the obtaining,conserving,treating, and supplying of water for domestic use,irrigation,
sanitation,industrial use, fire protection, recreation, or any other public or private uses;
{iii the collection,treatment or disposal of garbage or other solid waste matter;
(iii)the collection,treatment or disposal of sewage, liquid industrial waste matter, or waste or
storm water, including drainage.
Each such utility shall include all parts thereof,whether now in existence or hereafter
constructed or acquired, and all improvements and extensions thereof hereafter acquired,and
al! lands,easements,rights-of-way, water rights, licenses, franchises, equipment,improvements
or facilities whatsoever appurtenant or relating thereto, within or without the City of Fresno to
promote the welfare of the citizens and inhabitants thereof.
Without limiting the generality of the next preceding paragraph,the City shall have power:
(a) To acquire lands and property and rights-of-way and any rights,licenses or franchises
necessary or convenient for use for a revenue-producing utility;
(b) To acquire by condemnation,purchase or gift any property or interest therein;
(c) To improve any lands acquired by any construction necessary or convenient for the
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purposes of any such utility;
(d) To collect fees, rentals or charges to pay all or any part of purchasing,improving,or
operating any such utility; and to establish and regulate rentals, rates and charges for all
services provided the users of any such utility;
(e) To establish funds for any such utility and place limitations upon the uses of the
money therefrom;
(f) To make all necessary rules and regulations regarding the use, operation and
maintenance of any such utility;
(g) To issue revenue bonds and refunding revenue bonds for the purchase,acquisition,
construction,improvement,extension,operation or maintenance of any such utility and to
evidence such obligation for payment,discharge and retirement of the cost of such
facilities,improvements and projects by the issuance of revenue bonds therefor,
including refunding revenue bonds, in negotiable or non-negotiable form and payable
solely out of the revenue derived from the operation, control or leasing of all or any part
of any such utility, in accordance with the procedure established by Section 1222 of this
Charter;
(h) To bind, allocate,pledge and authorize payment of all or any part of the gross
revenues of any such utility or of any improvement or extension thereof for periods of
years, for the payment of operation and maintenance costs of such utility and principal
and interest on all revenue bonds or refunding revenue bonds issued and outstanding
until all such bonds have been fully paid;
(i) To do any and all acts or things necessary or appropriate to carry out the purposes of
this section,
SEC.1222.REVENUE BONDS.
(3)Revenue bonds may be authorized by the Council of the City of Fresno by resolution of five
atfirmative votes of the Council at a duly assembled meeting, All such revenue bonds so issued
shall contain a recital on their face that neither the payment of the principal of or interest thereon
constitutes a debt,liability, or obligation of the City of Fresno,except as provided in this section,
1\11 such revenue bonds shall be payable either
(1)exclusively from the revenues derived from the operation of off-street vehicular
parking facilities and revenues from parking meters, or such specific portions thereof as
may be allocated and pledged to the payment of such revenue bonds; or
(2)exclusively from the revenues derived from the operation of airport facilities or
properties,or such specific portions thereof as may be allocated and pledged to the
payment of such revenue bonds; or
(3)exclusively from the revenues derived from theoperation of any revenue-producing
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i,R.TICLL XlJ fISCAl.ADMINISTRATION
utility referred to in Section 1221 of this Charter, or such specific portions thereof as may
be allocated and pledged to the payment of such revenue bonds, in accordance with the
terms of the resolution under which said revenue bonds are authorized to be issued.
Reference on the face of such revenue bonds to such resolution by its date of adoption shall be
sufficient to incorporate all of the provisions thereof into the body of said revenue bonds and
their appurtenant coupons. Each taker and subsequent holder of said revenue bonds or
coupons,whether such coupons are attached to or detached from said revenue bonds, shall
have recourse to all of the provisions of such resolution and shall be bound thereby.
(b) The Council of the City of Fresno shall have power and is hereby authorized:
(1) To fix the aggregate principal amount of all revenue bonds which may from time to
time be issued for any purpose authorized by this section; to prescribe the purpose or
purposes for which the same may be issued and to provide for the issuance of additional
bonds and the security therefor;
(2) To prescribe the form and denomination of the revenue bonds and the terms and
conditions upon which the same shall be issued, paid, and retired. Revenue bonds may
be issued in one or more series: may bear such date or dates; may mature at such time
or times not exceeding forty years from their respective dates (provided that if any
authorized issue of revenue bonds is divided into two or more series or divisions, the
maximum maturity date of each such series or division shall be calculated from the date
on the face of each bond separately,irrespective of the fact that different dates may be
prescribed for the bonds of each separate series or division of any authorized issue);
may be in the form of serial bonds or sinking fund bonds with serial of term maturities;
may bear interest at a rate or rates not exceeding nine percent per annum,payable
annually or semi-annually;may be in such denomination or denominations and in such
form,either coupon or registered; may carry such registration or conversion privileges;
may be executed in such manner may be payable in such medium of payment and at
such place or places within or without the State of California; may be subject to such
terms of redemption with or without premium; may be subject to call or redemption prior
to their fixed maturity date, provided the right to exercise such call is expressly stated on
the face of the bonds; all as provided in such resolution or resolutions of said Council;
provided further,that all revenue bonds maturing subsequent to five years from their date
may be issued as callable bonds, subject to redemption at the option of the City upon
such terms as the Council shall determine;
(3) To provide, in and by the resolution or resolutions authorizing the issuance, the terms
and conditions upon which all such revenue bonds issued thereunder may be declared or
become due and payable in the event of said defaults, if any, as may be specified in said
resolution; may also provide for the replacement of mutilated, destroyed, stolen, or lost
bonds;
(4) To provide in and by such resolution for the authentication and execution of revenue
bonds by manual, lithoqraphed, or mechanically reproduced facsimile signatures of any
officers of the Council and also to provide for additional authentication of such revenue
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bonds by any trustee or fiscal agent appointed by said Council If any of the officers
whose signatures on bonds or coupons cease to be officers before the delivery of said
revenue bonds or coupons to the purchasers thereof,their signatures or
countersignatures shall nevertheless be valid and of the same force and effect as if such
officers had remained in office until the delivery of the revenue bonds and coupons;
(5) To provide by resolution,pending the preparation of the definitive bonds,for the
issuance of interim receipts or temporary bonds exchangeable for definitive bonds when
such definitive bonds are ready for delivery in such form and with such provisions as may
be provided in said resolution, and further to provide that notwithstanding the form or
tenor of such interim receipts or temporary bonds that such interim receipts,temporary
bonds, and also all revenue bonds shall at all times be, and be treated as,negotiable
instruments for all purposes;
(6) To provide that the proceeds of the sale of said revenue bonds shall be applied to the
payment of all costs and expenses to be incurred in connection with the issuance of said
bonds,including fiscal aqents, and legal expenses,working capital and interest,which it
is estimated will accrue during the construction period and for not exceeding six months
thereafter on money borrowed or which it is estimated will be borrowed through the
issuance of such revenue bonds,
(c)Revenue bonds authorized hereby may be sold by the Council from time to time in such
-rarmer as the Council may determine and at a price below the par value thereof;provided that
~he maximum net interest cost on revenue bonds sold below par or face value shall not exceed
an average of nine percent per annum,payable annually or semiannually,to the respective
maturity dates of said revenue bonds as determined by standard tables of bond values.
;d)The Council shall have authority to provide for the issuance,sale, or exchange of refunding
revenue bonds for the purpose of redeeming,retiring, or refunding any revenue bonds issued
under this Charter subject to any limitations contained in the resolution provldinq for the
issuance of such revenue bonds. All provisions of this section applicable to the issuance of
revenue bonds are hereby made applicable to the issuance of refunding bonds and to the sale
or exchange thereof.Refunding revenue bonds may be issued in the principal amount sufficient
to provide funds for the payment of all revenue bonds to be refunded thereby and in addition for
the payment of all expenses incident to the calling, retiring, or paying of such outstanding
revenue bonds in the issuance of such refunding bonds.Such expenses may include any
amount necessary to be made available for the payment of interest upon such refunding bonds
from the date of sale thereof to the date of payment of the revenue bonds to be refunded and
also the premium,if any,necessary to be paid in order to call and retire the outstanding revenue
bonds and the interest accruing thereon to the call date.
(e)All revenue bonds issued by the Council shall be secured by a lien upon the gross revenue of
the project for the acquisition,construction and completion of which said revenue bonds are to
be issued,and
(1) In the case of revenue bonds for off-street vehicular parking facilities,revenues from
parking meters, as shall be more fully described in the resolution of the Council
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authorizing the issuance of said bonds, and said Council shall have power in and by such
resolution to pledge and assign as security for such revenue bonds all or any part of the
gross revenues of any project for the acquisition or construction of which said revenue
bonds are to be issued, including revenues from improvements and extensions thereof
thereafter constructed or acquired, as well as the revenues of existing off-street vehicular
parking project operated or controlled by said City of Fresno and also any sums allocated
by the Council from the operation of parking meters to the revenue bond fund for
payment of expenses, principal, and interest of the revenue bonds; or
(2) In the case of revenue bonds for airport facilities, revenues of any existing airport
facilities or properties operated or controlled by the City of Fresno and of any
improvements and extensions thereof thereafter constructed or acquired as shall be
more fully described in the resolution of the Council authorizing the issuance of said
bonds, said Council shall have power in and by such resolution to pledge and assign as
security for such revenue bonds all or any part of the gross revenues of any project for
the acquisition or construction of which said revenue bonds are to be issued, including
revenues from improvements and extensions thereof thereafter constructed or acquired,
and also any slims allocated by the Council from the gross revenues collected from any
existing airport facilities or properties, including revenues from improvements and
extensions thereof thereafter constructed or acquired, to the revenue bond fund for
payment of expenses, or for the payment or security of the principal of and interest on
the revenue bonds; or
(3) In the case of revenue bonds for any other revenue-produCing utility, revenues of any
existing portion or portions of such utility operated or controlled by the City of Fresno and
of any improvements or extensions thereof thereafter constructed or acquired as shall be
more fully described in the resolution of the Council authorizing the issuance of said
bonds, and said Council shall have power in and by such resolution to pledge and assign
as security for such revenue bonds all or any part of the gross revenuesof any project for
the acquisition or construction of which said revenue bonds are to be issued, includinq
revenues from improvements and extensions thereof constructed or acquired, and also
any sums allocated by the Council from the gross revenues collected from any existing
portion or portions of such utility, including revenues from improvements and extensions
thereof thereafter constructed or acquired,to the revenue bond fund for payment of
expenses,or for the payment or security of the principal of and interest on the revenue
bonds.
Sums required to meet the payment of interest on and principal of revenue bonds issued under
this Charter shall be secured by a first, direct, and exclusive charge and lien upon all revenues
:'escribed in the resolution authorizing the issuance of such revenue bonds and upon all sinking
funds,reserve funds, or redemption funds created for the further security of said revenue bonds
and the income therefrom, and all such revenues and funds and the income therefrom shall
constitute a trust fund for the security and payment of such revenue bonds and shall not be used
for any other purpose as long as such bonds, or any of them, and the interest thereon are
outstanding and unpaid, except that in the resolution providing for the issuance of said revenue
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:;'i:Jnc!s,there may be apportioned, so long as the interest on and principal of such revenue bonds
';paid as the same becomes due and payable,together with all other charges required by such
.csolution for the protection of or better securing of such revenue bonds, such sums as may be
specified in such resolution for the payment of maintenance and operating costs of such projects
end of any existing facilities or utility the revenues of which are pledged and assigned as security
for such revenue bonds, or for any other lawful purpose of the City of Fresno, but only to the
extent specified and described in said resolution.
,:n Any resolution of the Council providing for the issuance of revenue bonds may also, in
addition to all other appropriate agreements deemed necessary or advisable by the Council,
contain such covenants and agreements as it deems necessary or advisable for the better
security of the revenue bonds issued thereunder.The Council is hereby authorized and
empowered in and by the terms of any such resolution to covenant and agree with the holders of
any of said revenue bonds so long as the same shall be outstanding as follows: .
(1) That the proceeds of the sale of said revenue bonds shall be deposited in a fund
separate and apart from 3!1 other funds of the City of Fresno and shall be applied solely
and exclusively to the object and purpose for which said revenue bonds are herein
authorized to be issued and that any proceeds remaining unexpended atter the object
and purpose for which said revenue bonds are authorized to be issued shall have been
completed shall be applied to the payment of principal and interest of such revenue
bonds and that none of said moneys shall be transferred to any other fund of the City of
Fresno or used for any purpose other than as specified in said resolution;
(2) That the City of Fresno shall operate or cause to be operated, all projects and
properties acquired from the proceeds of the sale of said revenue bonds continuously so
long as said revenue bonds are outstanding in an efficient manner and in good working
order and condition, and will make all needful and necessary repairs, improvements, and
replacements;
(3) That the Council will establish and maintain reasonable rentals, rates, tolls, and/or
charges for all properties maintained, owned,operated,leased, or controlled by it
(including parking meters in the case of off-street parking projects), or acquired from the
proceeds of the sale of revenue bonds and that such rentals, rates, tolls,and/or charges
shall at all times be adequate to yield annual revenue equal to all redemption payments
and interest charges on said revenue bonds as the same fall due,together with such
additional sums as may be required for any sinking fund, reserve fund, or any other
special fund provided for the security of revenue bonds or for any maintenance and
operation,depreciation,reserve fund, or other charges in connection with the operation
of any properties of the City of Fresno, and further that such rentals, rates, tolls, and/or
charges shall not be reduced below an amount sufficient to provide funds to meet all
obligations set forth in the resolution authorizing the issuance of such revenue bonds. No
person shall be permitted to use or operate any of the facilities or properties of the City of
Fresno or to make use thereof, except upon payment of the regularly established charge
therefor,except only, as may be provided in the resolution authorizing the issuance of
such revenue bonds, in the case of firemen,policemen,and other essential public
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A','X'[XiI FISCAl.ADI"1INISTRATJON
employees,to be specifically set forth in such resolution. All such rentals, rates, tolls, and/
01-charges shall be paid only in such coin or currency as on the date of payment is legal
payment for public or private debts, or in scrip or tokens issued only upon payment of the
face value of such coin or currency. Any agreement contained in said resolution with
respect to such rentals, rates, tolls, and/or charges shall be binding upon the City of
Fresno and upon its officers,departments,and boards thereof;
(4) That accurate books and records of account showing all revenues received from the
operation of all properties by the City of Fresno, and all expenditures thereof, will be kept
and provided, and that all books and records of the City of Fresno pertaining to the
operation of such off-street vehicular parking places or airport facilities or other revenue-
producing utility shall be open at all times during business hours to the inspection of the
holders of one or more of the revenue bonds, or of any percentage of such holders or
their dilly authorized representatives as may be provided in such resolution. That annual
or other periodic statements of the condition of all such off-street vehicular parking
properties or airport facilities or other revenue-producing utility operated by the City of
Fresno will be furnished to the holders of such revenue bonds and that summaries
thereof will be published at least annually in the official newspaper of the City of Fresno.
Tile resolution providing tor the issuance of revenue bonds may also provide that the
books and records of the City of Fresno pertaining to the operation of such off-street
vehicular parking places or airport facilities or other revenue-producing utility shall be
audited by independent public accountants in such manner and under such
circumstances as may be set forth in the resolution;
(5) That no part of the said properties in the City of Fresno shall be sold, leased,
mortgaged,or otherwise encumbered or disposed of except upon such terms and
conditions as may be defined in said resolution and that if any part of the properties of
the City of Fresno shall be taken by eminent domain or other proceedings authorized by
law, the proceeds therefrom shall be applied to the replacement of properties of like kind
and character or to the payment and retirement of revenue bonds, or as may be set forth
in said resolution;
(6) That said resolution may contain such other terms and conditions with respect to the
payment of the bonds, the operation of said off-street vehicular parking facilities or airport
facilities or other revenue-producing utility and properties by the City of Fresno,payment
of claims, or the obtaining of insurance of any kind or character on any of said properties
of the City of Fresno and the payment of the premium therefor, events of default and the
rights of the holders of revenue bonds in the event thereof, the procedure under which
the terms and conditions of the revenue bonds and of the resolution authorizing the
issuance thereof may be amended at a meeting of the bondholders or by written assent
of bondholders without a meeting and the manner in which such consent of the
bondholders may be given, either with or without a meeting, and the effect of such an
amendment or modification upon the rights of all holders of the bonds and coupons and
also all other agreements deemed necessary or desirable in order to secure said
revenue bonds or to make the same more marketable.
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·.!:TICLE XH FJSCAL ADI'INISTRAI10N
:'c;)The validity of any revenue bonds issued by the Council of the City of Fresno shall not be
:::ependent on or affected in any way by any proceedings taken by the City of Fresno for
acquisition,construction,or completion of any properties or projects for which said bonds are to
»e issued or any contracts made in connection with the acquisition, construction, or operation of
any such properties. Said revenue bonds shall be incontestable and shall by their issuance and
delivery conclusively establish the due performance of all conditions precedent to their issue.
(11)The City of Fresno may, at any time after the adoption of a resolution providing for the
issuance of any revenue bonds under this Charter and prior to the actual delivery of such bonds
to any purchaser thereof, bring an action in the Superior Court of Fresno County to determine
the validity of any such bonds. Such action shall be in the nature of a proceedingin rem.The
jurisdiction of all parties mteresred may be had by publication of summons for at least once a
week for three weeks in some newspaper of general circulation published in Fresno County,
such newspaper to be designated by the Judge of the Court having jurisdiction of the
proceedinqs.The jurisdiction shall be completed within ten days after publication of the
summons in the manner herein provided Anyone interested may at any time before the
expiration of said ten days appear and by proper proceedings contest the validity of such
revenue bonds. Such action shall De speedily tried and judgment rendered declaring the bonds
(',ither valid or invalid. Either party shall have the right to appeal to the Supreme Court of the
State of California at any time within thirty days after the entry of such judgment and such appeal
shall be heard and determined by said Court within three months from the time of submission
thereof to said Court.
(i)The provisions of this section constitute full and complete authority for the issuance of
revenue bonds as herein provided by the Council of the City of Fresno and no other procedure
or proceedings,consents, approvals, orders, or permission from any municipal officer or a board
of the City of Fresno shall be required for the acquisition,construction, or completion of any
properties or the issuance of any revenue bonds except as specifically provided in Section 1219,
'1220,or 1221 of this Charter. The powers and authorities conferred by said sections of this
Charter are in addition to and supplemental to all other powers and authorities conferred upon
the City of Fresno. The method provided in said sections for the acquisition of properties and the
issuance of revenue bonds shall be deemed an additional method for acquiring such properties
and providing funds therefor, provided that the City of Fresno may, in its discretion, acquire any
properties of a like or similar nature and issue general obligation bonds of the City of Fresno
therefor, but subject to the conditions that the City of Fresno shall not, while any revenue bonds
are issued or outstanding,acquire, construct, or complete any competing projects or properties
similar to those maintained or operated through the issuance of revenue bonds by the Council.
Revenue bonds issued under this Charter shall not be taken into consideration in determining
the bonded indebtedness which the City of Fresno is authorized to incur pursuant to Section
1213 of this Charter.
(Amendment ratified 1971 General Municipal Election; approved, Assembly Concurrent
l'\esolution No,130, filed with Secretary of State on June 18, 1971, Res. Ch.n,Stat. 1971.)
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":"~C.1223.REVENUE BONDS.Notwithstanding anything contained in the
;:n,cc)ding Sections 1218 to 1222, the Council may issue revenue bonds for any lawful
)urpose,in such manner and upon such terms and conditions as it may fix and establish
hy the provisions of a procedural ordinance.Such bonds shall be payable only out of
revenues specified by the Council and shall not constitute an indebtedness of the City,
rhis section shall be deemed to provide a complete,additional and alternative method
ror doing the things authorized by such preceding sections,and shall be regarded as
supplemental and additional to the powers conferred thereby or by other laws,
(Amendmentratified 1981 Municipal Election,March 3,1981.)
SEC.1224.PROHIBITION ON TAXING UTILITIES USERS.The city shall not
tax any person for using any utility service,including but not limited to,intrastate
telephone communication service, gas delivered through mains or pipes, and electrical
'mergy.This prohibition shall take effect for the tax year beginning on July 1,following
ihc passage of this amendment and shall also apply to each fiscal year thereafter.
(Amendmentratified 1981 Municipal Election,March 3,1981.)
SEC.1225.WATER METERS PROHIBITED.The City shall not,directly or
'ndirectly (1)install or require the installation of water meters at single-family housing
units; (2) bill or otherwise levy charges for single-family residential water consumption at
a metered rate; or (3)charge the property owner or tenant for the cost of installing,
rnaintaining,or removing residential water meters from single-family residents.
(Amendmentratified 1992 General Election,November3,'1992.)
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hRTICllE xru FRANCtfiSES
•
SEC.1300.GRANTING OF FRANCHISES.Any person, firm or corporation
furnishing the City or its inhabitants with transportation communication,terminal'
Facilities,water,light, heat, electricity, gas, power,refrigeration,storage or any other
public utility or service,or using the public streets,ways,alleys or places for operation of
plants,works or equipment for the furnishing thereof,or traversing any portion of the City'
for the transmitting or conveying of any such service elsewhere,may be required by
ordinance to have a valid and existing franchise therefor.The Council is empowered to
Jrant such franchise to any person, firm,corporation,whether operating under an
!.:'xisting franchise or not, and to prescribe the terms and conditions of any such grant. It
may also provide,by procedural ordinance,the method of procedure and additional
I"rrns and conditions of such grants,or the making thereof,all subject to the provisions
ct this Charter.
Nothing inthis section,or elsewhere in this article,shall apply to the City,or to any department
thereof,when furnishing any such utility or service.
SEC.1301.RESOLUTION OF INTENTION.NOTICE AND PUBLIC
HEARING.Before granting any franchise,the Council shall pass a resolution declaring
its intention to grant the same, stating the name of the proposed grantee, the character
of the franchise and the terms and conditions upon which it is proposed to be granted.
Such resolution shall fix and set forth the day,hour and place when and where any
persons having any interest therein or any objection to the granting thereof may appear
before the Council and be heard thereon. It shall direct the City Clerk to publish said
resolution at least once, within fifteen days of the passage thereof, in a newspaper of
Qenerai circulation within the City. Said notice shall be published at least ten days prior
to the date of the hearing.
At the time set for the hearing,or at any adjournment thereof,the Council shallproceedto hear
and pass upon all protests and its decision thereon shall be final and conclusive.Thereafter it
may by ordinance grant the franchise on the terms and conditions specified inthe resolution of
Intention to grant the same,subjectto the right of referendum of the people,or it may denythe
same.Ifthe Council shall determine that changes should be made in theterms and conditions
upon which the franchise is proposed to be granted,a new resolution of intention shall be
adopted and like proceedings had thereon.
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/\t:I-ICL.t XIII fRANCHiSES
~)EC,'1302,TERM OF FRANCHISE.Every franchise shall state the term for which
it is granted, which shall not exceed fifty years.
:SEC,1303.EMINENT DOMAIN.No franchise grant shall in any way, or to any
extent,impair or affect the right of the city to acquire the property of the grantee thereof
either by purchase or through the exercise of the right of eminent domain, and nothing
therein contained shall be construed to contract away or to modify or to abridge,either
for a term or in perpetuity,the city's right of eminent domain with respect to any public
utility.
~;EC.1304.RAILROAD CORPORATIONS.Inrespec:t of a railroad corporation,as
such term is used in Section i'5fi5 of the Public Utilities Code of California, the term
'franchise"as used in this article includes "franchise or permit"as used in said Section
7t;rr::.1,_,·:)0.
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I,KllCiY XN ELEmONS
.~\IRTICLE XiV ELECTIONS
SlEC.1400.DIRECT PRiMARY AND GENERAL MUNiCIPAL ELECTIONS.
(a) Beginning in 1996, direct primary elections for the nomination of candidates to be voted for at
the ensuing general municipal election and for such other purposes as the Council may
prescribe shall be held in the City on same date as the statewide direct primary election as
provided in the Elections Code of the State of California. If any candidate for a particular office
receives a majority of all votes cast for a particular office, that candidate shall be declared
elected and no general municipal election shall be held for that office.
(b)Beginning in 1996, general municipal elections for the election of officers and for such other
purposes as the Council may prescribe shall be held in the City on the same date as the
statewide general election as provided in the Elections Code of the State of California..
!'Jolwithstanding subsections 1400(a) and (b),the Council may by ordinance or resolution
provide for such elections to be held within thirty-one days of either of such dates for the
purpose of consolidation with any election to be conducted in the County of Fresno, State of
California.
(Amendments ratified 1965 General Municipal Election; approved, Assembly Concurrent
Resolution No. 112, filed with Secretary of State on May 20, 1965, Ch. 96, Stat. 1965.)
(Amendment ratified 1975 General Municipal Election.)
(Amendment ratified 1980 Special Municipal Election, June 3, 1980.)
(Amendment ratified 1996 Primary Election, March 26,1996.)
SEC.1401.SPECIAL MUNICIPAL ELECTIONS.All other municipal elections
Ihat may be held by authority of this Charter,or of any law,shall be known as special
municipal election.
A special municipal election shall be held for the election of the first Mayor and first Councilmen
under this Charter on the second Tuesday in April following the filing of the concurrent resolution
of the l.egislature approving this Charter with Secretary of State.
SEC.1402.PROCEDURE FOR HOLDING ELECTIONS.Unless otherwise
provided by ordinance hereafter enacted,all elections shall be held in accordance with
the provisions of the Elections Code of the State of California,as the same now exist or
hereafter'may be amended,for the holding of elections in general law cities so far as the
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/l.~ncu:XIV EU:CnOIlJS
SHine are not in conflict with this Charter.
~~!EC"1403.INITIATIVE,REFERENDUM AND RECALL.There are hereby
'esel'ved to the electors of the city the powers of initiative and referendum and of the
.'ecall of municipal elective officers. The provisions of the Elections Code of the State of
'::(]Iifornia,as the same now exist or hereafter may be amended,governing the initiative
and referendum and the recall of municipal officers, shall apply to the use thereof in the
City so far as such provisions of the Elections Code are not in conflict with the provisions
of this Charter.
:;iEC.1404.BALLOT MEASURES.Any measure submitted to the voters at a
municipal election shall be worded so that a "yes" vote indicates approval of the
measure proposed and a "no' vote indicates disapproval.
,}\:nend!T!Unt ratified 1993 Primary Election,March 2,1993.)
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:\h:i icu;XV CENLRAl.PReVISIONS
;t',,;R"IfICLE XV GENERAL PROVISIONS
SIEC.1500.VALIDITY OF CHARTER.If any provision of this Charter, or the
application thereof to any person or circumstance is held invalid, the remainder of the
Charter, and the application of such provisions to other persons 01"circumstances,shall
not be affected thereby.
slEe.1501.DEFINITIONS.Unless the provision or the context otherwise requires,
as used in this Charter:
(a)"Shall"is mandatory,and "rna)!"is permissive;
.b)"City"is the City of Fresno,and "department"."board","commission","agency","officer",or
'employee",is a department,board,commission,agency,officer or employee,as the case may
be,of the City of Fresno;
(c)"County"is the County of Fresno;
(d)"State"is the State of California;
(e)"Council"is the City Council of the City of Fresno;
(f) A "Councilrnernber"means anyone of the seven members of the Council.
(g)Reserved.
(h)"Newspaper of general circulation within the city" is as defined by Section 6000 of the
Covernment Code of the State of California.
(Amendment ratified 1993 General Municipal Election,April 27,1993.)
SEC,1502.VIOLATIONS.The violation of any provision of this Charter shall be
deemed a misdemeanor and be punishable upon conviction by a fine of not exceeding
one thousand dollars ($1000) or by imprisonment for a term of not exceeding one year,
or by both such fine and imprisonment.
SEC.1503.IMPLEMENTATION OF COUNCIL·MAYOR fORM OF
GOVERNMENT.The Mayor-Council form of government shall become operative on
the first Tuesday after the first Monday in January, 1997.
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I'f{f ICU~y:v GENERAL PROViSIONS
';-:c;Council shall redraw the current Council office boundaries no later than June 30, 1995, to
:vid a Council office designated as Councilmember Number 7. This office shall be filled for an
i,'.itial two-year term at either the direct Primary or General Municipal Election of 1996,taking
uifice on the first Tuesday after the first Monday in January,1997 Thereafter,terms for the
cff:ce of Council member Number 7 shall be for four-year terms,
~/\mendment ratified 1993 General Municipal Election,April 27, 1993,)
SEC.1504.EXPANSION OF COUNCIL MEMBERSHIP.
('--1)At such time as the population of the City of Fresno reaches 540,000, the Council shall add
hie Council offices to the Council designated as Councilmember Number 8 and Council member
Number 9,FOI'making a determination as to whether the 540,000 population figure has been
leached,the City shall utilize census data from the Dernoqraphic Research Unit of-the State
!),;partment of Finance issued annually on May 1st.cr asirnilarly reliable source of population
::IJI ires in the event the Demographic Research Unit no longer provides such information.Within
i ;';C,days of receipt of validated population figures evidencing this population total,the Council
~h81i redraw the Council district boundaries,after a duly notioed public hearing, to reflect the two
additional Council seats.
(b)The two seats shall be initially filled in the next reqular municipal election held in which City
':·tfices are filled,Both Councilmember seats 8 and 9 shall be filled at said next regular municipal
election,Thereafter,Couneilmember seat number 8 shall be filled in the same electoral cycle as
even-numbered Council seats and Councilmember seat number 9 shall be filled in the same
electorial cycle as odd-numbered Council seats.Depending on when the election cycle for filling
Councilrnember seat numbers 8 and 9 falls, the initial term for one of the two seats shall be a
two-year term.
i,;)/\1:such time as the Councilmernbers designated as Council member Number 8 and
Councilmernber Number 9 are installed in office the following provisions shall be deemed
r.hanqed:
(1) All provisions in this Charter for a requirement of an "affirmative vote of at least four
members of the Council"or any similar language requiring four votes shall be deemed
chanqsd to require "affirmative vote of at least five members of the Council."
(2) All provision of this Charter for a requirement of an "affirmative vote of at least five
members of the Council"or any similar language requiring five votes shall be deemed
chanqed to require "an affirmative vote of at least six members of the Council."
.Amendrnent ratified 1993 General Municipal Election,April Z];1993.)
BEe.1505.OPERATIVE DATE Of CHARTER AMENDMENTS.The
nrovisions of the various amendments to the Charter adopted in the May 4,1993 ballot
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/,;'llCLE xv GENERAL PROVISIONS
shall become effective as provided by law but shall be operative in accordance with the
following rules which are intended to provide a smooth and efficient transition from the
»resent municipal election cycle to an election cycle whereby municipal elections are
:unsolidated with statewide elections held in June and November of even-numbered
years and from the present Council-Manager form of government to a strong Mayor form
of government to be known as Mayor-Council form of government:
(a)The amendments of Sections 303 and 1400 of the Charter as set forth in the resolution
submitting the ballot measure to the voters shall be operative on and after January 1, 1994; until
that date Sections 303 and 1400 as they existed on May 3, 1993, shall remain in full force and
effect;on and after January 1,1994,Sections 303 and 1400 as they existed on May 3,1993,
shall be deemed repealed, of no further force and effect and superseded by said amended
sections as approved on May 4, 1993.
(b) The amendment of Sections 203,204,300, 302, 305, 400,401,500,501,600,603,605,
609,610, 102, 703, 704, 705,'1080,1202, 1501 of the Charter as setforthin the resolution
subrnitting the ballot measure to the voters shall be operative on and after the first Tuesday after
the first Monday in January, 1997 until that date said sections as they existed on May 3, 1993,
"hail remain in full force and effect; on and after January 1997, said sections as they existed on
May 3, 1993, shall be deemed repealed,of no further force and effect and superseded by said
amended sections as approved on May 4, 1993,
(c)Sections 609 and 610, as added to the Charter, and the repeal of Section 707 and
subsection 1501(g) as set forth in the ballot measure approved by the voters in May 4, 1993
shall be operative only on and after the first Tuesday after the first Monday in January,1997.
(d) All other amendments to the Charter adopted by the voters on May 4, 1993, shall be deemed
operative on their effective date as provided by law or by their operative language,
(Amendment ratified 1993 General Municipal Election, April 27, 1993,)
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MPendix III
Resolution 2010-219 Establishing the Charter
Review Committee
RESOLUTION N03<2-lCl:3!?__
A RESOLUTION OFTHE c:mJNCILOFTilE CITY OF FRESNO,
CALIFORNIA,ESTABLlSHINCJ THE CHARIER REVIEW
COMMIlTEE.
WHl,REAS,inI992 the City of Fresno,pursuant to recommendations ofthe Little Hoover
Commission,authorizeda Charter Review Committee,from which the City receiveda report on
recommended changes to our City Charter resulting in the city's current strong-mayor form of
government,and,.
WHEREAS, it is approaching twentyyears since the City of Fresno last examined its
C.~.h~1r!f:J'';i,,-,n:llfChc.ns\vely;~..i'J:;.,
?JI.J:EREAS:Fresno ~:,:IS experienced profoundchanges in population, technology,
l~(;\:cnn;:;ent,structure,industry.regional influence,and civic,responsibility and practice;and,
\yHERFAS~therehave been three administrationsof the strong-mayor form of government
2U1d with;the experience of these administrations,now is theappropriatetime to examine our
Charter and pursue efficiencies and best practices whereneeded.
dow THEREFORE,BE ITRESOLVED by the Councilof the City of Fresno as follows:
I:The Charter Review Cornminee ishereby established and shall operate consistent
with applicable Jaw,including the Ralph M.nrcwn Act (Government CodeSection54950 01.seq.).
2: 'rho purposeof the CharterReview Committee is toevaluate and make
recommendatjons tothe Fresno City Council on the belowreferenced topics, while also retaining
sorne limited discretion to investigate other areas deemedrelevantand important:
a, Whether the City shall create an Emergency Reserve Fundby setting aside and
maintaining a percentageof General Fund appropriations (9 1212);
b. Whether the City shall amend ,Cba.rter Section 1233to reduce the 20% limit on
General Obligation Bonds to 10%of City assets,and 1'0 add a provision that
places a limit of10% on thenet debt servicefor General Fundappropriations;
e. Whether the Charter should he amended to require a super maioritv vote On all
debt financing decisions not contained in the adoption of the annual budget by
the CounciI;
Page]of4
Resolution Establishing the
Charter Review Committee
::::;,'i~~~f~:~~
\,:..'..
d.Whcth"r the Cily should establish a charter section that would trigger due
diligence and oversight.policies,using i1 private sector banking model;require
the City Attorney and City Man<:!gcr to provide written reports to the Council
,iI1d requrre a super majority vote to approve, for any request for financial
cSSiSWUl.;8 exceeding $1,000,000;
c.Whether the City should requirea Fiscal ImpactReport that includes a detailed
financial analysis of wage and benefit costs and 3(1 actuarialreport,if deemed
necessary hy the City Managers,for all Memorandum of Understanding labor
agreements;
f WheTher the COUl1Cil should affirm,by majority vote,the hiring of the City
Manager and his/her compensation contract,assuming reasonable affirmation
r:(;I::x \\i~'Jlhe;d;
p:.\Vhe!Ju:r Lhe Charter clearly identifies the jurisdictional authority to organize'
fllQ :;:I·:~.~i~ne aorninistrative departments lies witI::the Mayor,su L:j cct to
Cotlri'':'.iJ confinnation;
h.'Whether the Charter should require f~nn\lal budgets be ill 8.two-year formatand
also include extended projections;
J.Whether the Mayor shall release the proposed budget to the Council at least
si"i.y rather than thirty days prior tothe beginning ofeach fiscal year(§POO);
J.Whether the Mayor's veto powers should extend .to all legislative land usc
decisions (§605 (0)(2));
k.Whether the Mayor should have vela authority over the decisions of 1110 Civil
ServiceBoard(§1002);
1.Whether a separate entity instead of the Council should establish Council and
Mayur compensation (§308\
rn. Whether a provision should be included in the Charter, as a counterpart 10
§706,that would provide that the Mayor,City Manager,and Staff shall not
interfere with the execution by the City Council of its legislative powers and
duties(relatedto §500 et seq.);
n. Whether a provision should be included in the Charter that information
requests by Councilbe respondedto by City Staff ina timelyfashion relativeto
the lime sensitivity of the subject matter and the response be sufficiently
detailed to provide an adequate answer.
Page 2 of 4
Resolution Establishing the
Charter Review Committee
o. Whether Council :;hould nave the exclusive authority to appoint and remove
their respective Council ilssistrmts (§500);
p. Whether the Charter should provide that the CounciI Presidency is based on <1
rotational sysier»with majority confirmation;
'l Whether the City's campaign cootribution policy should he modified (§309);
r, Whether the Charter should include a provision obligating City employees to
report suspected illegu)activities to the City Attorney's or City Manager's
office;
-s. Whether the Mayorshould be able to maintain separate kg,d COUJ1s0L.
t.Wheih-r :<provision should be included in the Charter that would enable'
COU!"lCi_.o direct the Controller [0 respond to fin1-,i}'!c.jal.inquiries posed by
Cou.nc;;\,iU1m.11 pnA',\~~;:;bg s.:'ch inquiries t!J:·')1..l.gh iilt:City Manager,assuming
such 1ne,u:llies would not pose an unreasonable burden all staff or otherwi ...c
interfere v/i!h the CityManager's administrative service under section 706;
u.Whether the City Controller shall submitdirectly to Council Ii qliarterl;i
financial stGI~ment (§804 (e));
v.Whethe,the Controller should certify: 1) the specific funding source(s) for all
newly created programs;and 2)the reliability of funding for the life of the
program. In the case of defunding,where the monies me transferred;
w, Whether the orgamzaticnal structure and role of the RDA and the City should
be examined to el.rninate redundancies in services and develop a more efficient
model for revitalization;
3 i The CharierReviewCommittee 8h~1I automatically terminate one hundred and
i;ighty (180)days(six (6) months)from its creation unless expressly provided for herein or
extendedby Councilresolution.
4.,The membership shall consist of:
a.Nine (9)members.The Committee will elect among themselves a Chairperson
and a Vice-Chairpersonwho willpresideover the meetings and through whom
informational inquiries in writing will pass to City staff.
Page 3 of 4
Resolution Establishing the
Charter Review Committee
James C. Sanchez
City Attorney
April 19, 2012
VIA FACSIMILE TO (916)851-1995
AND FIRST CLASS MAIL
Paul Q.Goyette,Esq.
Goyette &Associates,Inc.
2366 Gold Mcadow Way, Suite 200
(,old River,CA 95670
Re:Charter Review Committee Recommendations -_.Request to Meet and Confer
Dear Mr. Goyette:
I am disappointed by the assertions in your letter dated April 18,2012,indicating you only
recently learned that the City of Fresno had established a Charter Review Committee (Committee)
and that the Committee has been regularly convening to identify recommendations for Charter
amendments.Your recent discovery is surprising,as this Committee was created by Resolution in
November 2010 and the City has held approximately 15 public meetings,which were properly
noticed to provide public comment before the Committee published a final report setting forth their
recommended amendments in February,2012.Additionally,the Committee Report was posted on
the City website in February,2012 and the Council conducted a public meeting on the matter at end
of March,20I2.
Further,you requested the Council remove hom the April 19,2012 Agenda,the properly
noticed review of the Committee's recommendations on the grounds the Meyers-Milias Brown Act
("MMBA")requires the City and the FCEA to engage in the "meet and confer"process.The City
acknowledges its obligations under the MMBA to meet and confer regarding matters within the
scope of representation,but we deem your demand premature.Your letter fails to identify with any
specificity which Charter recommendation(s)are subject to the "meet and confer"process. The City
recognizes that dependent upon the Council's decisions today on specific items, the "meet and
confer"process may be invoked,and the City will take the necessary steps to meet its obligations.
c: Mark Scott,City nager
James C.Sanchez,c:y ttorney
Maribel Hernandez,Deputy City Attorney
FMK:tlp [58673tlp/fmkJ
City Hall·Fresno,California 93721 • (559) 621-7500 • FAX (559) 488-1084
Poul Q .GO)'CIIC'
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A pril 18, 2012
C ity of F resno
A ttn:Mark Scott ,City M anager
2600 Fres no Street
Fresno,CA 93721
City o f Fresno
A ttn:Ja mes Sanchez,C ity A tt orney
2600 Fres no Street,Room 2 031
F resno,CA 93721
R e: C harter Rev iew C ommittee R ecommendations;
Reque st to Meet an d C onfer
D ear Mr .Scott and Mr.Sanchez:
....t i a .n d toPleasebe a dv ise d this o ffice r e presents the Fresno CIty E mployees A S.SOC lU I?n 8-t-te f"
writes to you in s uch capacity .Pl ease direct a ll communicatio ns regard i ng th is specIfic jI'
t he undersigned,
vieW
.It h as rece ntly come to ~y atten tion tha t th.e C ity of Fres !l0 estab lisl-:c d a C ha rter I~f.&I 5
COIl1ITIlttee a nd that the Committee h as been meeting regu larly tor the last few mo nt hs.
also recently come to my at tention that the Co mmittee has come up with n U.1"J.1.e rous .£11 _
re c ommendations for Charter a mend ments some of which w ill req uire fut ure v?ter apPI~~,-vVjVJ.t
Those ~ec om n;,enda t!ons a re co ntaine.d in a c!oCU!l1 ent enti tled "Re p?rt to the C ity C?U J~11 e c B p or
t he s u bject of Consider Ch arter Review Committee Recommendations ,ltem S 1-55 .1
vas f o rwarded to me just a cou ple of days ago .
A review of t his report s hows th at a n umber of the reco mme ndations ,i f adop t~d ~m ay
f eet the wages,b enefits,hours,or o ther te rms a nd cond itions of employment of F.CEA
.mbers. P lease accep t th is lett er as a d emand to meet and co nfer over the CoCr"l.1ruttee M'I j ~9 :>
o nu nendations,Items I-55 p u rsuant t o Government Code §3505 et al.,of t he Me>'er~:>I I
wn Ac t. It is m y unders tand ing that the City of Fres no City Counci l will be con~ldenn~.
t her to tak e action o n Items 1 throu gh 11 o f the Co m mittee recomm enda ti on .at Its l11ee I~g
i s sc heduled for Thursday,A pril 19,20 12,at 1:00 p .m.Si nce the C ity has nO t engage (111 ,
/l,CA tvIODESTO.CA REDOING,CA FIlESNO .CA
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BALLOT QUESTION:??'J~v.;..t/!iJ c{)e,~(Yrd,,-J)
Shall the Charter be amended to provide for enhanced fiscal management policies, to include a
comprehensive evaluation process when City financial assistance is requested by the private
sector, a specific debt management policy, and a specific reserve management policy?
CHARTER SECTION POLICY FOR COMPREHENSIVE REVIEW OF
APPLICATIONS FOR CITY FINANCIAL ASSISTANCE
The City Council shall establish a policy regarding the procedure and scope for conducting a
due diligence process on a proposed project when the City receives a direct or indirect request
for financial assistance exceeding $1,000,000. This includes requests to extend or to renew
assistance, but does not apply to City initiated requests for proposals.
The investigation shall include the financial, legal, business, legislative, and regulatory issues
associated with the project. A supermajority vote of the Council is required for approval of the
project. The Chief Administrative officer shall have the responsibility to provide oversight of the
approved projects, and prepare an annual report to the Council.
CHARTER SECTION,POLICY FOR DEBT MANAGEMENT
The City Council shall establish a Debt Policy for the purpose of issuing and managing the
City's debt in a manner that adheres to sound financial management practices. Bonded
indebtedness with a total par of $5 million or more, shall require approval by a supermajority of
Council,subject to the governing documents,financing authority, State Constitution, and
provisions of this Charter. Bonded indebtedness under $5 million will only require a majority
vote of the Council,subject to the provisions of this Charter.
The City Controller shall certify, for all debt issuance decisions: 1) the specific funding source(s)
for all newly created programs; and 2) the reliability of the funding for the life of the program
and/or loan.
CHARTER SECTION POLICY FOR RESERVE MANAGEMENT
~-.._._-
The City Council shall establish a Specific Reserve Management Policy to control future
spending,enhance the City's credit rating, and establish reserve policies to meet the City's debt
obligations. The Policy shall also prohibit deficit financing to prevent a deficit in the budget,
which will occur when City expenditures exceed its revenues.
The Council shall establish a fund known as the "Committed General Fund Balance Reserve
Account for Economic Uncertainties"in the amount of 10% of the General Fund appropriations.
This fund shall remain intact except by affirmative vote of at least five members of the Council
with a statement declaring the reason for its use.
The Council shall establish afund known as the "Committed General Fund Reserve Accountfor
Contingency Stabilization"for the amount of 5% of General Fund appropriations.This reserve
fund may be used at the discretion of the Chief Administrative Officer or by simple majority vote
of the Council.
Item
A Listof CharterReviewCommittee
Recommendations discussedbytheCityCouncil
Motion Made By Seconded YesVote No Vote Result
.'.;·;.e",·;'·......,:',,::'.,""'.-r::\,;,..>,',<'",:..'...',I/:.i;·,',',:,,:,";,,":',/<U.::i.,....i.....
. Whetherthe creation of an Emergency ReserveFundis bysettingaside Move forward for ballotconsideration.AB LB LB BX AB oscc.>Passedandmaintainingapercentageof GeneralFund appropriations LWSO .'.~Whetherto amendCharterSection1233to reducethe20%limiton Move forward for ballot consideration LB AB LB BX ABOB LWSQ CO
General Obligation Bondsto 10%of Cityassetsandto adda provision Passedthat placesa limitof 10%onthe netdebtservicefor GeneralFund
appropriations.
I Whetherto requirea supermajorityvoteon all debt financing decisions Move forward for ballot consideration LB LW LBABOB'LW,i'
not contained in the adoption of theannualbudgetbytheCouncil
-.
1 .,:::Xi;.·."·:\i:"i?Passed
,.'
I Whetherto establish a CharterSectionthat wouldtriggerduediligence Move forward for ballot consideration LB AB LB BX ABOB LW
andoversightpolicies,usinga privatesectorbanking model;requirethe SQCO
CityAttorneyandCityManagerto providewritten reports to theCouncil Passedandand requirea supermajorityvotetoapprove,for anyrequestfor
financial assistance exceeding $1,000,000
i WhethertheCityshouldrequirea FiscalImpactReportthatincludesa No further consideration LB LW LB BX AB OBAbsent
detailed financial analysis of wageand benefitcostsandan actuarial LWSQCO Passedreport,if deemed necessary bytheCityManager,forall Memorandum '.
of Understandings IMOU)labor aareernents..i.·.
I Whetherthe Council shouldaffirm,by majorityvote,thehiringof theCity No further consideration LB CO LB BX AB dl3Absent
Managerandhis/her compensation contract,assuming reasonable LW SQ CO
.',".....".\',~,.~:Passed
affirmationnot be withheld .:.........,.'.'.
/WhethertheCharterclearlyidentifiesthejurisdictional authority to Move forward for ballot consideration AS LB LB AB .~\iVsqcOax
organizeand structure administrative departmentslieswiththeMayor,OB A;bsl:!nt ....•...Failed
subjectto Councilconfirmation :.
"..'.0
:WhethertheChartershouldrequireannualbudgetsbeina two(2) year NofurthetcopSicleratlon:,"'..".',.',...'.AS LB LB BX AB LB BX AB
formatandalsoinclude extended projections ....LWSQ CO LWSQ CO Passed
I
OB Absent
I WhethertheMayorshallreleasethe proposedbudgettheCouncilat No further consideration LB AB LB BX AB DB Absent
leastsixty(60)ratherthan thirty(30)dayspriorto the beginning of each LWSQCO Passed
fiscalyear(§1203)..'.,',
I Whetherthe Mayor'svetopowersshouldextendto all legislative land No further consideration LB BX
LB BX AB OB Absent Passedusedecisions(§605)(c) (2)LW SO CO
5
9
2
7
6
4
3
8
1
10
Page1
A List of Charter Review Committee
Recommendationsdiscussed by the City Council
Passed
Passed
I Passed
OB Absent
OBAbsent
I
LB BX AB
LW SO CO
lBSX AB
lWSO CO
LB BX AB lwloB Absent
SQ CO
L
LW
LB
AB
LB
LW
LBlllWhetherthe Mayorshouldhave veto authorityover thedecisions of the INo further consideration
Civil Service Board (§1002)
13IWhether a provisionshould be included in the Charter, as a counterpart INa further consideration
to §706,that would providethat the Mayor, City manager,and staff shall
not interfere with the executionby the City Council and of its legislative
powers and duties (relatedto (§500 et seq.).
121Whethera separate entityinsteadof the Council should establish INo further consideration
Council and Mayorcompensation (§ 308)
141Whethera provision shouldbe included in the Charter that information IMove forward for ballot consideration
requests by Council be respondedto by City staff in a timely fashion
relativeto the time sensitivityof the subject mailer and the response be
sufficientlydetailedto providean adequate answer
LW BX LB BX AB
LW CO
SQ
OBAbsent
Passed
15
L.B B.X AB OB·I ..LB BX..A..BOBLWSQCO . LW SQ ,CO
17 LB BX AB OB ILB BX AB OB
LWSQ CO LWSQ CO
18
LB....BX.AB ()B ILB...B..X..'.A..B OBLW SQ CO LW SQCO
19 LB BX AB OB ILB BX AB OB
LWSQ CO LWSQ CO
20
LB BX..AB..OB IL.:B•.....B.X...A...B..OBLWSQ.CO .'.LW S.QCO .
21 LB BX AB OB ILB BX AB OB
LW SQ CO LW SQ CO
22 L.B ...BX AB OB IL,..B..'.B.X.'.AB...OBlWSQ CO .LWSQCO
LB =LeeBrand
Page 2
BX =Blong Xiong
AB=Andreas Borgeas
OB =Oliver L.Baines III
LW =Larry Westerlund
SQ =Sal Quintero
CO =Clint Olivier
A Listof Charter ReviewCommittee
Recommendationsdiscussedbythe CityCouncil
Page3
This page intentionally left blank.
City of
I!!!~~O~.~I~
r"K::Q;~~.~REPORT TO THE CITY COUNCIL AGENDA ITEM NO./0".4/5 8
COUNCIL MEETING 51171 1 2.
May 17,2011
FROM:
SUBJECT:
Councilmember Larry westerlun~WJ~',fU\1'
APPROVE THE "HIGH SPEED RAIL BUSINESS IMPACT INITIATIVE"FRAMEWORK AND
DIRECT STAFF TO RETURN TO COUNCIL WITH DETAILED AND SPECIFIC POLICIES
FOR FAST-TRACK ENTITLEMENT AND LAND USE PROCESSING,POSSIBLE
MODIFICATION OF LOCAL REGULATIONS AND ESTABLISH PERMITTING AND
ENTITLEMENT TIMELINES FOR PROPERTIES AFFECTED BY HIGH SPEED RAIL
On May 3, 2012, the High Speed Rail Authority ("HSRA")certified the Environmental Impact
Report for the Fresno to Merced section of High Speed Rail ("HSR"), which now legally allows
the HSRA to begin the property appraisal and acquisition of the right of way. It is anticipated that
in the near future the California Legislature will approve the sale of bonds to fund the first phase
of HSR. As a result,whether one supports HSR or not,property and business owners in the
HSR alignment are going to be impacted in the very near future. In anticipation of those huge
impacts and in an effort to assist local businesses in dealing with them, I have been working with
Mayor Swearengin and staff to develop the "High Speed Rail Business Impact Initiative"
("HSRBII").
The "High Speed Rail Business Impact Initiative"("HSRBII")would provide a broad framework to
establish City of Fresno policies that would be designed to assist our HSR impacted properties
and businesses by getting fast tracked land use and entitlement processes,minimize and
streamline City of Fresno rules and regulations for affected properties and provide performance
targets for land use and entitlement applications and permits processed through the City.
Moreover, the HSRBII would authorize the creation of a City of Fresno internal organization,
funded by the High Speed Rail Authority ("HSRA"), to directly and specifically deal with impacted
properties and businesses.In fact, HSRA has already authorized the funding for the City of
Fresno to create the new internal organization to assist in the development review and permit
processes.The new organization in affect would be the "Planning,Development and Permit
Department"for HSR affected businesses and properties and would work in conjunction with
other City departments to facilitate and expedite the processing of all HSR affected business and
parcels for relocation and accommodation in the City of Fresno.
Additionally,the HSRBII would establish policies and timelines establishing goals for the
processing of entitlement and permitting documents for all City of Fresno departments.HSRBII
would request that staff review the City entitlement and land use approval processes and return
to Council with recommendation to further fast-track,stream-line and mitigate the effects if HSR
as it is built in and through the City of Fresno.
REPORT TO THE CITY COUNCIL
May 17, 2012
Page 2
The City owes it to our impacted businesses and properties to do all that we can to minimize and
mitigate those impacts and to actively support those businesses and properties through the
entire HSR building and rebuilding process in partnership with the HSRA.
Initiative program key points:
New Internal Organization:
1.Establishes a City of Fresno internal organization,funded by the HSRA, to specifically and
directly be responsible for dealing with the full range of permit,entitlement processing,
relocation and business retention for HSR affected properties and allows for hiring of
additional personnel as required and requested by the City Manager.
a. On March 1, 2012, the HSRA authorized funding and execution of an agreement
with the City of Fresno to provide the necessary temporary resources to ensure
timely responses through the permit processing which are required to advance the
HSR construction.Additionally,it provides resources necessary to assist affected
businesses through the acquisition/relocation processes,and assist with business
retention.Finally, the HSRA also authorized the temporary resources to assist in
expediting project delivery activities.
2. This organization would be the primary contact,as well as the Planning and Development
Authority for all HSR impacted businesses and properties within the City of Fresno.
3.Allow for the City Manager to engage in third party contracts consistent with code and law
to allow for work and output requirements.
4. This City of Fresno internal organization would work directly with other key construction
and development stakeholders including PG&E, AT&T, and the Metropolitan Flood Control
District. The internal organization would also work with Economic Development
Corporation regarding business relocation and retention.
5. This Initiative officially requests that the new internal organization establishment,
operations,personnel and contracts be funded by the HSRA (see above regarding
approved funding).
6.Allows for the new internal organization to continue in existence until such time that HSR
building and impacts wind down at which time the City Manager would request the Council
wind-up and disestablishment of the internal organization or when HSRA does not provide
further funding,which ever come first.
7. Requires the City internal organization to annually report to Council on its activities in
general and more specifically the processing time for each property entitlement application
or project.
8. Requires the City internal organization to get appropriate history,metrics for analysis of
effectiveness and lessons learned to be shared with other cities and communities to be
impacted by building HSR.
9. Require staff to establish an annual budget for the new internal organization.The budget
would be reviewed and approved as part of the City annual budget until the internal
organization would be terminated (see above for discussion).
REPORT TO THE CITY COUNCIL
May 17, 2012
Page 3
10.High speed rail impacted industrial parcels with active operating businesses are to be
given the highest priority in terms of entitlement,permitting,land use processing and
customer service.This policy would apply to all City departments.
11.The City posture and attitude should be and will be: "We want you and your business to
stay,grow and thrive here in Fresno! We will do all we can within our authority and power
to assist you in dealing with the affects of the HSR build."
12.Consider the establishment of a public website for the dissemination of appropriate
information on HSR impacts and maintain it with updated and accurate information.
13.Consider the establishment of a controlled website where property and business owners
can track the progress of City review on entitlement and permitting applications.
14.Establish a separate and distinct HSR impacted business planning and development
"Desk" in the Planning and Development counter area on the 3
rd floor and distinct and
appropriate signage throughout City Hall.
Entitlement/Permitting and Review Process Timelines Goals:
15.AII professionally drawn site plans will be reviewed and returned to the applicant in no
more than seven (7)calendar days.
16.AII professionally drawn building plans will be reviewed and have permits issued in no
more than thirty (30)calendar days.
a. The forgoing "review and return"timelines are very important goals that should be
measured and reported back to Council for accountability,but do not create any sort
of legally binding obligation.
17.City will allow work based on Building Plans "at risk" if the contractor/builder/owner so
decides to begin work prior to final permit sign-off and signs an acknowledgement of "at
risk" notice.
18.The City will make every attempt to use the same inspector for an entire project until
completion,in an effort to avoid different counter inspection instructions or requirements.
19.To the fullest extent possible, City inspectors will be made available to conduct inspections
on weekends and holidays at rates set per the master fee schedule and consistent with
applicable MOUs.
Environmental Assessment (EA)
20.Staff review and return to Council with a legal analysis using the HSR EIR as the
environmental documents for entitlement of HSR effected properties and their rebuilding.
21.Staff review and return to Council with recommendations to streamline the EA process for
HSR affected properties.
Conditional Use Permits (CUP)
22.Staff review and return to Council with analysis and recommendations on the possible
transfer of currently valid conditional use permits,except for uses that are a direct threat to
the public safety or other criteria to be established,from the current HSR affected property
to a new similar zoned parcel.
REPORT TO THE CITY COUNCIL
May 17, 2012
Page 4
a.Staff may consider creating distinct transfer zones for industrial users.
23.Staff review and return to Council with recommendations to streamline CUP processing for
HSR affected properties and businesses.
Municipal Code Impacts
24.Staff review and return to Council with analysis and recommendations on the possible
suspension of selected Fresno Municipal Codes ("FMC"), not directly related to public
safety, to allow HSR impacted properties to quickly and affordably rebuild within the City of
Fresno.
a. An example of possible suspension of the FMC would be requiring parking lots to be
upgraded with shade coverage for the renovation of a parcel affected by HSR.
b. These actions may require a Fresno Municipal Code text amendment.
Business License Requirements
25. A significant number of HSR impacted companies may be operating within the City of
Fresno without the required business license.Staff should review and return to Council an
appropriate policy to allow the impacted companies to become licensed and current
without paying required currently established penalties.
CONCLUSION
In 2012, the City of Fresno will see the ground breaking for High Speed Rail (HSR) and will be the
epicenter of the beginning of one of the largest public works project in the history of California and the
United States. HSR is a massive undertaking that will have a huge impact on a significant portion of
property located in the heart of Fresno. It is estimated that HSR will affect some 600 parcels in
Fresno County and approximately 340 parcels within the City of Fresno and some 650 businesses
will be directly impacted. While not nearly as large a number of affected parcels for the construction
of Highway 41, 168 or 180, the HSR project has a very short and accelerated timeline.
Whether one supports or opposes HSR, the City of Fresno must be prepared to deal with the impacts
intended or otherwise that the building of HSR will have on the City and its resident businesses and
the public in general. To that end, the City should take the reasonable and prudent steps necessary
to prepare ourselves for HSR. Several of those steps include the establishment of an internal
organization within the city to be funded by HSR to receive process and deliver all aspects of HSR
impacts on effected parcels and as outlined in this HSRBII.
Scheduled Communication
May 17,2012
RECEIVED
REQUEST TO APPEAR
2012 Mp,Y -7 A~110:18
BEFORE THE FRESNO CITY COUNCIL
CITY CLERK.FRESHO Ct
On April 1, 1980,the Fresno City Council adopted a policy relating to procedures to be used for those
persons wishing to appear before the Fresno City Council, as follows:
SCHEDULED ORALCOMMUNICATIONS -APPEARANCES ON PRINTED AGENDA
In order to be placed on the agenda for a scheduled time,complete and submit the form below.State
the topic to be discussed and provide any supporting material,if any. Also state the action you want the
City Council to take. Your request will be referred to the City Manager and placed on the agenda no
sooner than ten (10) days after receipt of your written letter in order to provide an opportunity for City
staff to prepare comments for Council consideration.The policy is to limit your presentation to three (3)
minutes pursuant to Ordinance 96-67.The City Clerk shall provide copies of your request to the Fresno
City Council.
UNSCHEDULED ORALCOMMUNICATIONS
You may address the City Council at the conclusion of the Council meeting and the policy is to limit your
presentation to three (3)minutes pursuant to Ordinance 96-67. Please be present at the conclusion of
the Council meeting if you wish to be heard.
REQUEST TO APPEAR BEFORE THE FRESNO CITY COUNCIL~n ,(A~/7t!t1 ~/Z
Name ~//r~rr:~~~/Gr~v'://'t'~$
Address /3?C,W·Jlev~~.~-;~,eq·9'371/
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Telephone No.&<7&1)4-3~...tP ,t!?Z:J Date:5"-03 ...ZO/z...
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Topic:(td..!e-$d-~./61J!::..,K!4/Qrf!'d zuh/~~f
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Action (if any):&fU<-;Zr pl/e;;ce7?~pI ~~S
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K:\Request to Appear.docx
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City of Fresno
Directors Meeting
April 10
th,2012
'Westlake'
Entitlement Timeline
I. City staff completes internal comments
2. Consultant completes responses
3. 45 day public comment period opens
4. 45 day public comment period closes
5. Consultant completes response to comments
6.Staff report complete
7. Planning Commission Hearing
8. City Council Hearing No.1
9. City Council Hearing No.2
Note:Entitlements include SCH 2007121033 - ErR / A-07-001
/R-07-008/VTTMNo.5915 /
4-30-12
6-01-12
6-04-12
7-20-12
8-24-12
9-14-12
9-19-12
10-18-12
10-25-12
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