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20240820 Regular City Council Meeting - PacketRegular City Council Meeting Agenda August 20, 2024 Page 1 of 5 Agenda City of Vernon Regular City Council Meeting Tuesday, August 20, 2024, 9:00 AM City Hall, Council Chamber 4305 Santa Fe Avenue, Vernon, California Judith Merlo, Mayor Melissa Ybarra, Mayor Pro Tem Leticia Lopez, Council Member Jesus Rivera, Council Member Crystal Larios, Council Member The public is encouraged to view the agenda and meeting at CityofVernon.org/publicmeetings. You may address the Council in the Council Chambers, via mail or email to PublicComment@cityofvernon.org, include the meeting date and item number in the subject line (mail and/or email must be received at least two hours prior to the start of the meeting). CALL TO ORDER FLAG SALUTE ROLL CALL APPROVAL OF AGENDA PUBLIC COMMENT At this time the public is encouraged to address the City Council on any matter that is within the subject matter jurisdiction of the City Council. The public will also be given a chance to comment on matters which are on the posted agenda during City Council deliberation on those specific matters. PRESENTATIONS 1. Swearing-In Ceremony for New Police Officer in the Police Department Recommendation: Administer the Oath of Office to Police Officer Bonnie Lee 2. Employee Service Pin Awards Recommendation: Recognize July 2024 Employee Service Pin Award recipients. Regular City Council Meeting Agenda August 20, 2024 Page 2 of 5 3. City Administrator Report Recommendation: Receive presentation on various topics including New Business Welcome, City Rebranding, Vernon CommUNITY Fund Grant Applications, Gas Division Safety Award, Development Projects, Community Partnerships, and Outreach Events. CONSENT CALENDAR All matters listed on the Consent Calendar are to be approved with one motion. Items may be removed from the Consent Calendar for individual consideration. Removed items will be considered immediately following the Consent Calendar. 4. Meeting Minutes Recommendation: Approve the August 6, 2024 Regular City Council Meeting Minutes. 5. Operating Account Warrant Register Recommendation: Approve Operating Account Warrant Register No. 134, for the period of June 30 through July 20, 2024, totaling $11,721,582.88 and consisting of ratification of electronic payments totaling $11,477,736.45 and ratification of the issuance of early checks totaling $243,846.43. 6. Fire Department Activity Report Recommendation: Receive and file the June 2024 Fire Department Activity Report. 7. Police Department Activity Report Recommendation: Receive and file the June 2024 Police Department Activity Report. 8. Authorize the Issuance of a Purchase Order for Motorola Public Safety Radios and Accessories Recommendation: Approve and authorize issuance of a purchase order to Motorola Solutions Inc. for the purchase of Motorola public safety radios and accessories for a total amount not-to-exceed $89,428. 9. Resolution Approving Authority to File Applications for Grant Funds from the Los Angeles County Regional Park and Open Space District for Measure A Funding. Recommendation: Adopt Resolution No. 2024-018 to apply for and accept Measure A Funds. 10. Services Agreement With Bob Murray & Associates for Executive Recruitment Services Recommendation: Approve and authorize the City Administrator to execute a Professional Services Agreement with Bob Murray & Associates, in substantially the same form as submitted, for Executive Recruitment Services for a total amount not-to-exceed $113,000, for a one-year term. Regular City Council Meeting Agenda August 20, 2024 Page 3 of 5 11. Haaker Equipment Company 2025 Vactor Truck Purchase Recommendation: A. Approve and authorize issuance of a Purchase Order (PO) for the purchase of one new 2025 CNG Vactor Truck from Haaker Equipment Company for a total amount not-to-exceed $757,716.28; and B. Authorize a contingency amount of $22,283.72 should the purchase of a comparable Vactor Truck be necessary due to limited inventory, and grant authority to the City Administrator to issue a Change Order to the PO to Haaker Equipment Company for an amount up to the contingency amount if necessary. 12. Extension of Franchise Granted to Pacific Pipeline System, Inc. Recommendation: A. Find that the proposed action is exempt from the California Environmental Quality Act (CEQA), in accordance with CEQA Guidelines Section 15301, because it consists of the maintenance, repair or minor alteration of existing facilities and equipment and involves negligible or no expansion of an existing use; and B. Adopt Resolution No. 2024-017 finding and determining that the public interest and necessity require the time extension of Ordinance No. 1046 Granting a Franchise to Pacific Pipeline System, Inc. to maintain and operate a pressurized steel pipeline and appurtenances in and under Alameda Street. 13. Change Order No. 20 to Amended and Restated Services Agreement with Siemens Energy Inc. Recommendation: A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is a government fiscal activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines section 15378; to the extent the Purchase Contracts with Siemens Energy, Inc. provides for facility and equipment maintenance or repairs, such work is categorically exempt from CEQA review, in accordance with CEQA Guidelines section 15301, because the project consists of the maintenance, repair or minor alteration of existing structures, facilities, or equipment, and involves negligible or no expansion of an existing use; and B. Approve and authorize the City Administrator to execute Change Order No. 20 to the Amended and Restated Services Agreement with Siemens Energy, Inc. (Siemens Energy), in substantially the same form as submitted, to revise the Projected Schedule Outage Plan, Payment Schedule, Cancellation Schedule, Upgrade Schedule, Dehumidifier Upgrade, Burner 26 Upgrade, Gearset Upgrade, Starter Motor Upgrade, amend the termination date of the agreement, and add a blanket Purchase Contracts schedule. NEW BUSINESS 14. Vernon Public Utilities Financial Reserves Policy Recommendation: Approve and adopt the Vernon Public Utilities Financial Reserves Policy. ORAL REPORTS 15. City Administrator Reports on Activities and Other Announcements Regular City Council Meeting Agenda August 20, 2024 Page 4 of 5 16. Council Reports on Activities (including AB 1234), Announcements, or Directives to Staff CLOSED SESSION 17. Conference with Legal Counsel – Anticipated Litigation Government Code Section 54956.9(d)(2) Significant exposure to litigation (1 potential matter) 18. Conference with Real Property Negotiators Government Code Section 54956.8 Property: 4528 Bandini Boulevard, Vernon, CA 90058 Agency Negotiation: Daniel Calleros, Interim City Administrator Negotiating Party: Zeem Solutions, LLC Under Negotiation: Price and Terms of Payment CLOSED SESSION REPORT ADJOURNMENT On August 15, 2024, the foregoing agenda was posted in accordance with the applicable legal requirements. Regular and Adjourned Regular meeting agendas may be amended up to 72 hours and Special meeting agendas may be amended up to 24 hours in advance of the meeting. Regular City Council Meeting Agenda August 20, 2024 Page 5 of 5 Guide to City Council Proceedings Meetings of the City Council are held the first and third Tuesday of each month at 9:00 a.m. and are conducted in accordance with Rosenberg's Rules of Order (Vernon Municipal Code Section 2.04.020). Copies of all agenda items and back-up materials are available for review in the City Clerk Department, Vernon City Hall, 4305 Santa Fe Avenue, Vernon, California, and are available for public inspection during regular business hours, Monday through Thursday, 7:00 a.m. to 5:30 p.m. Agenda reports may be reviewed on the City's website at www.cityofvernon.org or copies may be purchased for $0.10 per page. Disability-related services are available to enable persons with a disability to participate in this meeting, consistent with the Americans with Disabilities Act (ADA). In compliance with ADA, if you need special assistance, please contact the City Clerk department at CityClerk@cityofvernon.org or (323) 583-8811 at least 48 hours prior to the meeting to assure arrangements can be made. The Public Comment portion of the agenda is for members of the public to present items, which are not listed on the agenda but are within the subject matter jurisdiction of the City Council. The City Council cannot take action on any item that is not on the agenda but matters raised under Public Comment may be referred to staff or scheduled on a future agenda. Comments are limited to three minutes per speaker unless a different time limit is announced. Speaker slips are available at the entrance to the Council Chamber. Public Hearings are legally noticed hearings. For hearings involving zoning matters, the applicant and appellant will be given 15 minutes to present their position to the City Council. Time may be set aside for rebuttal. All other testimony shall follow the rules as set for under Public Comment. If you challenge any City action in court, you may be limited to raising only those issues you or someone else raised during the public hearing, or in written correspondence delivered to the City Clerk at or prior to the public hearing. Consent Calendar items may be approved by a single motion. If a Council Member or the public wishes to discuss an item, it may be removed from the calendar for individual consideration. Council Members may indicate a negative or abstaining vote on any individual item by so declaring prior to the vote on the motion to adopt the Consent Calendar. Items excluded from the Consent Calendar will be taken up following action on the Consent Calendar. Public speakers shall follow the guidelines as set forth under Public Comment. New Business items are matters appearing before the Council for the first time for formal action. Those wishing to address the Council on New Business items shall follow the guidelines for Public Comment. Closed Session allows the Council to discuss specific matters pursuant to the Brown Act, Government Code Section 54956.9. Based on the advice of the City Attorney, discussion of these matters in open session would prejudice the position of the City. Following Closed Session, the City Attorney will provide an oral report on any reportable matters discussed and actions taken. At the conclusion of Closed Session, the Council may continue any item listed on the Closed Session agenda to the Open Session agenda for discussion or to take formal action as it deems appropriate. City Council Agenda Report Meeting Date:August 20, 2024 From:Robert Sousa, Chief of Police Department:Police Submitted by:Brandon Gray, Captain Subject Swearing-In Ceremony for New Police Officer in the Police Department Recommendation Administer the Oath of Office to Police Officer Bonnie Lee Background The City Council typically hosts a public Swearing-In Ceremony when new Police Officers are hired. During the past several months, there have been several Police Officer positions vacated due to retirements and promotions in the PD. The PD has filled these vacancies as leaving these positions vacant would negatively impact the necessary patrol deployment, and would increase overtime costs to cover staff shortages. To fill the vacancies, PD, with assistance from the Human Resources Department, conducted the necessary recruitment processes. Based on a review of the qualifications of each eligible candidate, and the completion of an extensive background investigation, Bonnie Lee was selected as the best-qualified candidate to fill the vacant Police Officer position. Officer Lee has been invited to attend the August 20th Council Meeting with her family for a public swearing-in and badge-pinning ceremony. Fiscal Impact There is no fiscal impact associated with this report. Attachments None. .  .  Item 1 Page 1 of 1 City Council Agenda Report Meeting Date:August 20, 2024 From:Michael Earl, Director of Human Resources Department:Human Resources Submitted by:Veronica Avendano, Human Resources Specialist Subject Employee Service Pin Awards Recommendation Recognize July 2024 Employee Service Pin Award recipients. Background The following employees are eligible to receive their service pin based on the number of service years with the City of Vernon: TEN YEARS OF SERVICE Stephanie D. Aceves, Police Dispatcher, Hired July 2014 FIVE YEARS OF SERVICE Cynthia G. Maciel, Police Officer, Hired July 2019 Fiscal Impact There is no fiscal impact associated with this report. Attachments None. .  .  Item 2 Page 1 of 1 7 6 9 City Council Agenda Report Meeting Date:August 20, 2024 From:Daniel Calleros, Interim City Administrator Department:City Administration Submitted by:Diana Figueroa, Senior Management Analyst Subject City Administrator Report Recommendation Receive presentation on various topics including New Business Welcome, City Rebranding, Vernon CommUNITY Fund Grant Applications, Gas Division Safety Award, Development Projects, Community Partnerships, and Outreach Events. Background The City Administrator Report is a presentation highlighting City projects, responses to Council inquiries, and events and activities of interest to the community. The report will be available at the time of the meeting. Fiscal Impact There is no fiscal impact associated with this report. Attachments None. .  .  Item 3 Page 1 of 20 City Administrator Report August 20, 2024 August 20, 2024 Item 3 Staff Presentation .  .  Item 3 Page 2 of 20 Topics 1)New Business Welcome 2)City Rebranding 3)Vernon CommUNITY Fund Grant Applications 4)Gas Division Safety Award 5)Development Projects 6)Community Partnerships 7)Outreach Events .  .  Item 3 Page 3 of 20 .  .  Item 3 Page 4 of 20 City Rebranding Steering Committee Rebranding Workshop July 15th •Goal to provide ideas to shape a refreshed brand identity that reflects the character, heritage, and future aspirations of Vernon •Diverse members selected to convey unique perspectives •Successful workshop – feedback is guiding preliminary design sketches .  .  Item 3 Page 5 of 20 Accepting Grant Applications •The Vernon CommUNITY Fund (VCF) is accepting grant applications for Fiscal Year 2024-25 through October 11th •A Grant Workshop is scheduled for September 11th to assist potential applicants with networking and in their pursuits for funding •Grant awards will be determined at the November VCF Grant Committee meeting.  .  Item 3 Page 6 of 20 VPU Gas Division Safety Award American Public Gas Association (APGA) 5x Safety Award Winner for 2023: VPU Natural Gas Division APGA represents America's publicly- and community-owned natural gas local distribution companies (LDCs) and prioritizes the safety of the systems, communities, and customers •Winner in 2018, 2019, 2020, 2021, 2022, and now 2023! •The VPU Gas Division recorded 8,800 man-hours worked for 2023 •Zero accidents or injuries •Winners have the lowest overall incident rate for the year .  .  Item 3 Page 7 of 20 Development Projects •As of mid-July, there were 18 development projects in City •Among the projects are 3 data centers (Goodman/Core Site- LA5/Prime Data) that are under plan check review or construction •Remaining projects are at various stages of submittal and plan check and include a green hydrogen production facility, two EV charging stations, and an 18-unit apartment complex on Santa Fe The diverse mix of businesses moving in is a testament to the shifting economic development in the City .  .  Item 3 Page 8 of 20 Development Projects •Happening all throughout the City at various stages of completion •Variety of land uses, with new construction and existing structures •Positive trajectory for Vernon .  .  Item 3 Page 9 of 20 Law Enforcement Torch Run •Event on June 4th to raise funds for SoCal Special Olympics •Routed through Vernon for second consecutive year •Vernon PD led by a Special Olympics Athlete this year •Vernon PD was one of the top donation teams in Southeast area, with the entire SoCal Chapter raising nearly $217,000 for this worthy cause Community Partnerships .  .  Item 3 Page 10 of 20 2024 Law Enforcement Torch Run .  .  Item 3 Page 11 of 20 SELA Collaborative LA River Cleanup •Event on July 27 aligned with the SELA Collaborative “Together in Service” initiative •Vernon lent support for the event by providing Vernon-branded giveaways for participants •Overwhelming interest from community – 100 RSVPs received! Community Partnerships .  .  Item 3 Page 12 of 20 SELA Collaborative LA River Cleanup .  .  Item 3 Page 13 of 20 Community Outreach Dreamfield Opening Day •YMCA hosted event on June 22nd •Included performance from Maywood Academy Band, Player Parade, and Dodgers Baseball Clinic •Vernon partnered to provide The Habit, branded giveaways, and to unveil the Dreamfield Plaque! .  .  Item 3 Page 14 of 20 Dreamfield Opening Day .  .  Item 3 Page 15 of 20 Community Outreach National Night Out •On August 6th, Vernon PD hosted this event focused on building relationships among law enforcement and community •Free food, backpack giveaways, lawn games, facepainting, and raffle prizes were available for about 150 attendees .  .  Item 3 Page 16 of 20 National Night Out .  .  Item 3 Page 17 of 20 National Night Out .  .  Item 3 Page 18 of 20 Upcoming Events Vernon Career Day •Vernon’s annual Career Day is tentatively scheduled for Wednesday, October 2nd •Opportunity for high school and college students to learn about careers in the public sector and hear directly from experienced City staff Event information provided at www.CityofVernon.org .  .  Item 3 Page 19 of 20 City Administrator Report Highlighting Industry, Community, and Service .  .  Item 3 Page 20 of 20 City Council Agenda Report Meeting Date:August 20, 2024 From:Deborah Harrington, City Clerk Department:City Clerk Submitted by:Sandra Dolson, City Clerk Specialist Subject Meeting Minutes Recommendation Approve the August 6, 2024 Regular City Council Meeting Minutes. Background Staff has prepared and submits the minutes for approval. Fiscal Impact There is no fiscal impact associated with this report. Attachments 1. August 6, 2024 Regular City Council Meeting Minutes .  .  Item 4 Page 1 of 8 MINUTES VERNON CITY COUNCIL REGULAR MEETING TUESDAY, AUGUST 6, 2024 COUNCIL CHAMBER, 4305 SANTA FE AVENUE CALL TO ORDER Mayor Merlo called the meeting to order at 9:00 a.m. FLAG SALUTE Mayor Merlo led the Flag Salute. ROLL CALL PRESENT: Judith Merlo, Mayor Melissa Ybarra, Mayor Pro Tem Leticia Lopez, Council Member Jesus Rivera, Council Member Crystal Larios, Council Member STAFF PRESENT: Daniel Calleros, Interim City Administrator Zaynah Moussa, City Attorney Deborah Harrington, Interim City Clerk Jessica Alcaraz, Financial Services Administrator Fredrick Agyin, Health and Environmental Control Director Michael Earl, Human Resources Director Robert Sousa, Police Chief Dan Wall, Public Works Director Margie Otto, Public Utilities Assistant General Manager APPROVAL OF THE AGENDA MOTION Mayor Pro Tem Ybarra moved and Council Member Larios seconded a motion to approve the agenda. The question was called and the motion carried unanimously. PUBLIC COMMENT None. .  .  Item 4 Page 2 of 8 Regular City Council Meeting Minutes Page 2 of 7 August 6, 2024 PRESENTATIONS 1. Proclamation Recognizing Retired Employee - Carlos R. Fandino Jr. Interim City Clerk Harrington read the proclamation and Council acknowledged and presented a Proclamation to retired employee Carlos R. Fandino Jr., City Administrator, in recognition of his dedicated service to the City of Vernon. The following individuals made presentations to Carlos R. Fandino, Jr.: Andie Lopez, Office of Senator Maria Elena Durazo Matthew Johnson, Office of Supervisor Janice Hahn Crystal Meza, Office of Assembly Member Miguel Santiago Kayla Terrazas, Office of Congressman Robert Garcia Marisa Olguin, Vernon Chamber of Commerce, spoke regarding the many attributes of Carlos R. Fandino, Jr. Mr. Fandino reflected on his time with the City and how grateful he is to the City Council, staff, and business community for the many accomplishments over the years. RECESS Mayor Merlo invited guests to refreshments in the lobby and recessed the meeting for a short break at 9:27 a.m. RECONVENE Mayor Merlo reconvened the meeting at 9:40 a.m. PUBLIC HEARINGS 2. Adoption of California Fire Code by Reference Public Works Director Wall presented the staff report. Mayor Merlo opened the public hearing at 9:42 a.m. There being no speakers, Mayor Merlo closed the public hearing at 9:42 a.m. MOTION Council Member Lopez moved and Council Member Rivera seconded a motion to: A. Find that the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is general policy and procedure-making activity that is unrelated to any specific project, which must undergo separate CEQA review, and that will not result in direct physical changes or reasonably foreseeable indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines Section 15378; and B. Conduct second reading and adopt Ordinance No. 1303 amending Title 8, Health and Safety, to adopt the 2022 California Fire Code by reference. The question was called and the motion carried unanimously. .  .  Item 4 Page 3 of 8 Regular City Council Meeting Minutes Page 3 of 7 August 6, 2024 CONSENT CALENDAR MOTION Council Member Lopez moved and Mayor Pro Tem Ybarra seconded a motion to approve the Consent Calendar. The question was called and the motion carried unanimously. The Consent Calendar consisted of the following items: 3. Meeting Minutes Recommendation: Approve the July 16, 2024 Regular City Council Meeting Minutes. 4. Public Works Department Monthly Report Recommendation: Receive and file the June 2024 Building Report. 5. Quarterly Report of Cash and Investments Recommendation: Receive and file the Second Quarter Cash and Investments Report. 6. Operating Account Warrant Register Recommendation: Approve Operating Account Warrant Register No. 133, for the period of June 16 through June 29, 2024, totaling $8,769,548.92 and consisting of ratification of electronic payments totaling $7,889,274.92 and ratification of the issuance of early checks totaling $880,274.00. 7. Report on Five-Year Contract Award Approved by the City Administrator for the Interagency Communications Interoperability System Recommendation: Receive and file report on the City Administrator’s finding that the Wireless Communications Use and Access Agreement with the Interagency Communications Interoperability System (ICI) is commercially unreasonable to rebid in three years pursuant to Vernon Municipal Code Sections 3.32.220 (B) and 3.32.110 (B)(3). 8. Amendment No. 1 with Jemmott Rollins Group, Inc. for Production of Vernon CommUNITY Fund Anniversary Promotional Publication Recommendation: A. Find that the best interests of the City are served by a direct award of the Vernon CommUNITY Fund publication project to Jemmott Rollins Group, Inc. (JRG) without a competitive process pursuant to Vernon Municipal Code Sections 3.32.110 (B)(2) and (3); and B. Approve and authorize the City Administrator to execute Amendment No. 1 with JRG, in substantially the same form as submitted, for an amount not-to-exceed $25,000, to prepare and produce the Vernon CommUNITY Fund Anniversary Promotional Publication. 9. Salvation Army Bell Shelter Reimbursement Agreement Recommendation: Approve and authorize the Mayor to execute a Reimbursement Agreement for shelter beds within the Salvation Army Bell Shelter with the cities of Bell, Bell Gardens, Commerce, Cudahy, Huntington Park, Maywood, and Southgate, collectively referred to as the Local Coordinating Alliance (LCA1), in substantially the same form as submitted for a total amount not-to-exceed $31,086.25 for a one-year term through June 30, 2025. .  .  Item 4 Page 4 of 8 Regular City Council Meeting Minutes Page 4 of 7 August 6, 2024 10. Federal Equitable Sharing Agreement and Annual Certification Report Recommendation: Approve and authorize the Police Chief and City Administrator to execute the Federal Equitable Sharing Agreement and Annual Certification Report. 11. Amendment No. 1 to Huntington Park Inmate Housing Agreement Ending Fiscal Year 2023-24 Recommendation: Approve and authorize the City Administrator to execute Amendment No. 1 to the Huntington Park Police Department Jail Division Agreement for Inmate Housing services, covering the period of July 1, 2021 through June 30, 2024, in substantially the same form as submitted, to increase the value of the agreement by a total amount not-to-exceed $5,149.97. 12. Authorize City’s Chief Building Official to Enforce the Fire Code Recommendation: Conduct second reading and adopt Ordinance No. 1302 amending Vernon Municipal Code Section 8.04.010, authorizing the City’s Chief Building Official, or authorized representative to enforce the Fire Code in accordance with California Health and Safety Code Section 13869.7(h)(1)(B). 13. Transfer Agreement No. 2024MP81 with the Los Angeles County Flood Control District for Measure W Funds Recommendation: Approve and authorize the City Administrator to execute the Transfer Agreement between the City of Vernon and the Los Angeles County Flood Control District, in substantially the same form as submitted, to receive Annual Safe, Clean Water Program Funds (Measure W), for a 4-year term. 14. Citywide Striping and Pavement Markings Recommendation: A. Find that the proposed action is categorically exempt from California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15301 (Existing Facilities), part (a) (existing highways and streets), because the project consists of the maintenance, repair, or minor alteration of existing facilities and involves negligible or no expansion of an existing use; B. Accept the bid proposal from WGJ Enterprises Inc., dba PCI (PCI) as the lowest responsive and responsible bidder for the Citywide Striping and Pavement Markings project and reject all other bids; C. Approve and authorize the City Administrator to execute Contract No. 20250017 (20240404) with WGJ Enterprises Inc., in substantially the same form as submitted, for the Citywide Striping and Pavement Markings project in an amount not-to-exceed $265,900; and D. Authorize a contingency amount of ten percent (10%) or $26,590 in the event of an unexpected changed condition in the project and grant authority to the City Administrator to issue a change order(s) for an amount up to the contingency amount, if necessary. 15. Contract with Elka Construction, Inc. for 55th Street Recycle Center & Nursery – Soil & Miscellaneous Construction Material Removal Recommendation: A. Find that the proposed action is categorically exempt under the California Environmental Quality Act (CEQA) review, in accordance with CEQA Guidelines Section 15304 (Minor Alterations to Land), part (a) (grading on land with a slope of less than 10 percent), because the project is merely making minor alterations to the land and involves negligible or no expansion of existing use; B. Accept the bid proposal from Elka Construction, Inc. as the lowest responsive and responsible bidder for the 55th Street Recycle Center & Nursery – Soil & .  .  Item 4 Page 5 of 8 Regular City Council Meeting Minutes Page 5 of 7 August 6, 2024 Miscellaneous Construction Material Removal, Contract No. 20250045 (20240407), and reject all other bids; C. Approve and authorize the City Administrator to execute Contract No. 20250045 (20240407) with Elka Construction, Inc., in substantially the same form as submitted, for the soil and miscellaneous construction material removal at 2221 E. 55th Street in an amount not-to-exceed $850,000; and D. Authorize a contingency amount of twenty-five percent (25%) or $212,500 to cover necessary disposal fees for materials collected at the site and/or to cover unanticipated expenses in the event of an unexpected changed condition in the project; and grant authority to the City Administrator to issue change order(s) for an amount up to the contingency amount, if necessary. 16. Attorney Services Agreement with Duncan, Weinberg, Genzer & Pembroke, P.C. Recommendation: A. Pursuant to Sections 3.32.220(B) and 3.32.110(B)(3) of the Vernon Municipal Code (VMC), find that it is commercially unreasonable to rebid the proposed agreement for specialized utility-related legal services every three years due to the expected continuous large development projects and various deal points that will be negotiated in phases and may span multiple years; and B. Approve and authorize the City Administrator to execute an Attorney Services Agreement with Duncan, Weinberg, Genzer & Pembroke, P.C. (DWGP), in substantially the same form as submitted, to provide specialized utility-related legal services to the Public Utilities Department in an amount not-to-exceed $1,160,382 for a five-year term. NEW BUSINESS 17. Annual City Council Reorganization Interim City Clerk Harrington presented the staff report. City Attorney Moussa responded to questions regarding the functionality of the proposed language. MOTION Council Member Rivera moved and Council Member Lopez seconded a motion to direct staff to bring back in final form language as a Charter Ballot Measure for the April 8, 2025 General Municipal Election. The question was called and the motion carried unanimously. 18. Resolution Approving the Submittals of Applications for Per Capita Grant Funds Public Works Director Wall presented the staff report. MOTION Mayor Pro Tem Ybarra moved and Council Member Lopez seconded a motion to: A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review because it is a government fiscal activity .  .  Item 4 Page 6 of 8 Regular City Council Meeting Minutes Page 6 of 7 August 6, 2024 that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA guidelines section 15378; any projects pursued under the grant program are possible future actions which the City has not approved, adopted, or funded; and B. Adopt Resolution No. 2024-016 Approving the Submittals of Applications for Per Capita Grant Funds. The question was called and the motion carried unanimously. 19. Opposition to Metro Link Union Station (Link US) Project Interim City Administrator Calleros presented the staff report. MOTION Mayor Pro Tem Ybarra moved and Council Member Lopez seconded a motion to take a position to oppose the Metro Link US Project based on concerns about its potential negative effects on the City and surrounding communities that include, but are not limited to, public safety, air quality, traffic, transportation, economic/financial, and socioeconomic impacts. The question was called and the motion carried unanimously. ORAL REPORTS 20. City Administrator Reports on Activities and Other Announcements. Interim City Administrator Calleros announced National Night Out is being held this afternoon at City Hall from 5:00 p.m.-7:00 p.m. on the front lawn. The Vernon Police Department will be present to connect with the community. Book stations will be set up for the young guests. The City Council meeting of September 3, 2024 will be cancelled. 21. City Council Reports on Activities (including AB 1234), Announcements, or Directives to Staff. None. CLOSED SESSION RECESS Mayor Merlo recessed the meeting to Closed Session at 10:06 a.m. 22. Conference with Legal Counsel – Anticipated Litigation Receipt of claim pursuant to the Government Claims Act Government Code Section 54956.9(e)(3) Claimant: Sareen LLC .  .  Item 4 Page 7 of 8 Regular City Council Meeting Minutes Page 7 of 7 August 6, 2024 23. Conference with Legal Counsel – Anticipated Litigation Initiation of Litigation Government Code Section 54956.9(d)(4) Number of potential cases: 1 24. Public Employment Government Code Section 54957 Title: City Administrator/Interim City Administrator RECONVENE At 10:53 a.m., Mayor Merlo adjourned the Closed Session and reconvened the regular meeting. CLOSED SESSION REPORT City Attorney Moussa reported that Council met in Closed Session, discussed the items on the agenda, and took no reportable action. ADJOURNMENT Mayor Merlo adjourned the meeting at 10:54 a.m. _____________________________ JUDITH MERLO, Mayor ATTEST: ______________________________ YONNIE PARKER, Deputy City Clerk (seal) .  .  Item 4 Page 8 of 8 City Council Agenda Report Meeting Date:August 20, 2024 From:Jessica Alcaraz, Financial Services Administrator Department:Finance Submitted by:John Lau, Accountant Subject Operating Account Warrant Register Recommendation Approve Operating Account Warrant Register No. 134, for the period of June 30 through July 20, 2024, totaling $11,721,582.88 and consisting of ratification of electronic payments totaling $11,477,736.45 and ratification of the issuance of early checks totaling $243,846.43. Background Vernon Municipal Code Section 2.32.060 indicates the City Treasurer, or an authorized designee, shall prepare warrants covering claims or demands against the City which are to be presented to City Council for its audit and approval. Pursuant to the aforementioned code section, the Deputy City Treasurer has prepared Operating Account Warrant Register No. 134 covering claims and demands presented during the period of June 30 through July 20, 2024, drawn, or to be drawn, from East West Bank for City Council approval. Fiscal Impact The fiscal impact of approving Operating Account Warrant Register No. 134, totals $11,721,582.88. The Finance Department has determined that sufficient funds to pay such claims/demands, are available in the respective accounts referenced on Operating Account Warrant Register No. 134. Attachments 1. Operating Account Warrant Register No. 134 .  .  Item 5 Page 1 of 46 .  .  Item 5 Page 2 of 46 .  .  Item 5 Page 3 of 46 .  .  Item 5 Page 4 of 46 .  .  Item 5 Page 5 of 46 .  .  Item 5 Page 6 of 46 .  .  Item 5 Page 7 of 46 .  .  Item 5 Page 8 of 46 .  .  Item 5 Page 9 of 46 .  .  Item 5 Page 10 of 46 .  .  Item 5 Page 11 of 46 .  .  Item 5 Page 12 of 46 .  .  Item 5 Page 13 of 46 .  .  Item 5 Page 14 of 46 .  .  Item 5 Page 15 of 46 .  .  Item 5 Page 16 of 46 .  .  Item 5 Page 17 of 46 .  .  Item 5 Page 18 of 46 .  .  Item 5 Page 19 of 46 .  .  Item 5 Page 20 of 46 .  .  Item 5 Page 21 of 46 .  .  Item 5 Page 22 of 46 .  .  Item 5 Page 23 of 46 .  .  Item 5 Page 24 of 46 .  .  Item 5 Page 25 of 46 .  .  Item 5 Page 26 of 46 .  .  Item 5 Page 27 of 46 .  .  Item 5 Page 28 of 46 .  .  Item 5 Page 29 of 46 .  .  Item 5 Page 30 of 46 .  .  Item 5 Page 31 of 46 .  .  Item 5 Page 32 of 46 .  .  Item 5 Page 33 of 46 .  .  Item 5 Page 34 of 46 .  .  Item 5 Page 35 of 46 .  .  Item 5 Page 36 of 46 .  .  Item 5 Page 37 of 46 .  .  Item 5 Page 38 of 46 .  .  Item 5 Page 39 of 46 .  .  Item 5 Page 40 of 46 .  .  Item 5 Page 41 of 46 .  .  Item 5 Page 42 of 46 .  .  Item 5 Page 43 of 46 .  .  Item 5 Page 44 of 46 .  .  Item 5 Page 45 of 46 .  .  Item 5 Page 46 of 46 City Council Agenda Report Meeting Date:August 20, 2024 From:Daniel Calleros, Interim City Administrator Department:City Administration Submitted by:Diana Figueroa, Senior Management Analyst Subject Fire Department Activity Report Recommendation Receive and file the June 2024 Fire Department Activity Report. Background Attached is a copy of a Fire Department Activity Report which covers the period of June 1 through June 30, 2024. The report is provided by Los Angeles County Fire and consists of incident details and a summary for the month. Fiscal Impact There is no fiscal impact associated with this report. Attachments 1. Fire Department Activity Report – June 2024 .  .  Item 6 Page 1 of 12 .  .  Item 6 Page 2 of 12 .  .  Item 6 Page 3 of 12 .  .  Item 6 Page 4 of 12 .  .  Item 6 Page 5 of 12 .  .  Item 6 Page 6 of 12 .  .  Item 6 Page 7 of 12 .  .  Item 6 Page 8 of 12 .  .  Item 6 Page 9 of 12 .  .  Item 6 Page 10 of 12 .  .  Item 6 Page 11 of 12 .  .  Item 6 Page 12 of 12 City Council Agenda Report Meeting Date:August 20, 2024 From:Robert Sousa, Chief of Police Department:Police Submitted by:Donna Aggers, Records Manager Subject Police Department Activity Report Recommendation Receive and file the June 2024 Police Department Activity Report. Background The Vernon Police Department’s activity report consists of activity during the specified reporting period, including a summary of calls for service, and statistical information regarding arrests, traffic collisions, stored and impounded vehicles, recovered stolen vehicles, the number of citations issued, and the number of reports filed. Fiscal Impact There is no fiscal impact associated with this report. Attachments 1. June 2024 Police Department Activity Report .  .  Item 7 Page 1 of 55 .  .  Item 7 Page 2 of 55 .  .  Item 7 Page 3 of 55 .  .  Item 7 Page 4 of 55 .  .  Item 7 Page 5 of 55 .  .  Item 7 Page 6 of 55 .  .  Item 7 Page 7 of 55 .  .  Item 7 Page 8 of 55 .  .  Item 7 Page 9 of 55 .  .  Item 7 Page 10 of 55 .  .  Item 7 Page 11 of 55 .  .  Item 7 Page 12 of 55 .  .  Item 7 Page 13 of 55 .  .  Item 7 Page 14 of 55 .  .  Item 7 Page 15 of 55 .  .  Item 7 Page 16 of 55 .  .  Item 7 Page 17 of 55 .  .  Item 7 Page 18 of 55 .  .  Item 7 Page 19 of 55 .  .  Item 7 Page 20 of 55 .  .  Item 7 Page 21 of 55 .  .  Item 7 Page 22 of 55 .  .  Item 7 Page 23 of 55 .  .  Item 7 Page 24 of 55 .  .  Item 7 Page 25 of 55 .  .  Item 7 Page 26 of 55 .  .  Item 7 Page 27 of 55 .  .  Item 7 Page 28 of 55 .  .  Item 7 Page 29 of 55 .  .  Item 7 Page 30 of 55 .  .  Item 7 Page 31 of 55 .  .  Item 7 Page 32 of 55 .  .  Item 7 Page 33 of 55 .  .  Item 7 Page 34 of 55 .  .  Item 7 Page 35 of 55 .  .  Item 7 Page 36 of 55 .  .  Item 7 Page 37 of 55 .  .  Item 7 Page 38 of 55 .  .  Item 7 Page 39 of 55 .  .  Item 7 Page 40 of 55 .  .  Item 7 Page 41 of 55 .  .  Item 7 Page 42 of 55 .  .  Item 7 Page 43 of 55 .  .  Item 7 Page 44 of 55 .  .  Item 7 Page 45 of 55 .  .  Item 7 Page 46 of 55 .  .  Item 7 Page 47 of 55 .  .  Item 7 Page 48 of 55 .  .  Item 7 Page 49 of 55 .  .  Item 7 Page 50 of 55 .  .  Item 7 Page 51 of 55 .  .  Item 7 Page 52 of 55 .  .  Item 7 Page 53 of 55 .  .  Item 7 Page 54 of 55 .  .  Item 7 Page 55 of 55 City Council Agenda Report Meeting Date:August 20, 2024 From:Robert Sousa, Chief of Police Department:Police Submitted by:Brandon Gray, Captain Subject Authorize the Issuance of a Purchase Order for Motorola Public Safety Radios and Accessories Recommendation Approve and authorize issuance of a purchase order to Motorola Solutions Inc. for the purchase of Motorola public safety radios and accessories for a total amount not-to-exceed $89,428. Background The Vernon Police Department’s (PD) radio system is an essential part of our public safety commitment. Our radio systems connect our first responders with dispatchers, who relay information gathered from our citizens. Recently, PD transitioned to an encrypted radio frequency in response to recent changes to Federal Bureau of Investigation (FBI) and California Department of Justice (CA DOJ) policies. The transition to an encrypted radio frequency necessitated the replacement of public safety radios and associated equipment. In furtherance of this transition, PD is requesting to purchase six (6) APX 8500 All-Band P25 Mobile Police Unit Radios. The radios to be purchased will be used to replace outdated radios currently installed in PD vehicles and will be installed in new PD vehicles that are either awaiting outfitting or anticipated to be delivered this fiscal year. PD is also seeking to purchase one (1) APX 8000 All-Band P25 Portable Police Radio. In 2018, PD purchased fifty-one (51) portable radios. As PD continues to create and fill vacant police officer and support staff positions, the number of available portable radios has diminished. The purchase of an additional portable radio will ensure PD maintains a sufficient inventory of available portable radios. In addition to the portable and mobile radios, PD is also requesting to purchase the following radio accessories: Forty (40) Motorola Impres 2 batteries – These batteries will replace several of the batteries that were included with the purchase of the APX 8000 portable radios in 2018. The batteries have reached their expected lifespan and are in need of replacement. Two (2) Motorola Impres 2 battery charging banks – The charging banks will be used to supplement the existing charging banks. The additional charging banks will allow us to have an additional 12 batteries charged and ready for deployment at any time. Ten (10) Motorola Remote Speaker Microphones – These remote speaker microphones attach to our existing APX 8000 portable radios, allowing an officer to utilize the radio easier. The microphones to be purchased, will be issued to officers who were never issued a microphone. Five (5) Replacement cables for Motorola Remote Speaker Microphones – These cables connect the microphone to the portable radio. The purchased cables will be used to repair microphones that have damaged cables, negating the need to replace the microphone..  .  Item 8 Page 1 of 23 Five (5) Motorola Portable Radio Holsters – These holsters clip onto a standard belt, allowing officers to carry our portable radio while in business attire. These holsters will be issued to officers who were never issued a radio holster. One (1) Motorola Radio Programing Cable – This cable is used to program both our mobile and portable radios. Currently, PD has had to borrow the cable from another agency in order to program our radios. One (1) Motorola E5 Control Head – This mobile radio control head will be installed in the rear cargo area of our Patrol Sergeant’s vehicle. The rear cargo area has been outfitted to be used as a mobile command post. The control head will be connected to the APX 8500 mobile radio installed in the front of the vehicle, allowing the supervisor to utilize the radio from the rear cargo area. The existing control head is obsolete and incompatible with our APX 8500 mobile radios. The proposed purchase is exempt from competitive bidding pursuant to Vernon Municipal Code (VMC) Section 3.32.110 A (5)(b), which states in part that competitive bidding shall not be required for supplies, equipment or services that can be purchased from a vendor offering the same prices, terms and conditions as in a previous award from the City or another public agency either by competitive bid or through a negotiated process and, in the opinion of the Finance Director or designee, it is to the advantage of the City to do so. PD is receiving discounted pricing for this purchase by piggybacking on the existing contract between Motorola Solutions Inc. and Los Angeles County (Contract# MA-IS-2240228-1). The Financial Services Administrator concurs that it is to the advantage of the City to purchase the necessary equipment based on the discounted pricing offered in the LA County contract. City Council approval is required pursuant to VMC Section 3.32.030 (B) as the City has made other purchases from Motorola Solutions Inc. that, together with the proposed purchase orders in this report, would exceed the $100,000 threshold. Fiscal Impact The fiscal impact is not-to-exceed $89,428. Sufficient funds are available in General Fund, Police Department, Capital Equipment – Nonauto Account No. 011-030-300-660015 for the current fiscal year. Attachments 1. Motorola Solutions Quote #2718309 2. LA County Contract MA-IS-2240228-1 .  .  Item 8 Page 2 of 23 .  .  Item 8 Page 3 of 23 .  .  Item 8 Page 4 of 23 .  .  Item 8 Page 5 of 23 .  .  Item 8 Page 6 of 23 .  .  Item 8 Page 7 of 23 .  .  Item 8 Page 8 of 23 .  .  Item 8 Page 9 of 23 .  .  Item 8 Page 10 of 23 .  .  Item 8 Page 11 of 23 .  .  Item 8 Page 12 of 23 .  .  Item 8 Page 13 of 23 .  .  Item 8 Page 14 of 23 .  .  Item 8 Page 15 of 23 .  .  Item 8 Page 16 of 23 .  .  Item 8 Page 17 of 23 .  .  Item 8 Page 18 of 23 .  .  Item 8 Page 19 of 23 .  .  Item 8 Page 20 of 23 .  .  Item 8 Page 21 of 23 .  .  Item 8 Page 22 of 23 .  .  Item 8 Page 23 of 23 City Council Agenda Report Meeting Date:August 20, 2024 From:Daniel S. Wall, P.E., Director of Public Works Department:Public Works Submitted by:Lissette Melendez, Project Engineer Subject Resolution Approving Authority to File Applications for Grant Funds from the Los Angeles County Regional Park and Open Space District for Measure A Funding. Recommendation Adopt Resolution No. 2024-018 to apply for and accept Measure A Funds. Background Measure A, the Safe, Clean Neighborhood Parks, Open Space Beaches, Rivers Protection, and Water Conservation Measure, was approved by voters in 2016. The measure was developed to meet current and future park needs throughout Los Angeles County based on the findings of the Countywide Parks and Recreation Needs Assessment completed that same year. Measure A includes both formula-based allocations to agencies throughout the study area, as well as competitive grants that are open to public agencies, non-profit organizations and schools. The City of Vernon has accumulated $557,595.98 in formula-based allocations. In order to apply for and accept Measure A funds, the Los Angeles County Regional Park and Open Space District requires a resolution from the City of Vernon. Staff recommends that the City Council adopt Resolution No. 2024-018 authorizing the acceptance of Measure A funds. Fiscal Impact There is no fiscal impact associated with this report. Receipt of Measure A funds and projects utilizing the funds will be brought to Council as required in the future. Attachments 1. Resolution No. 2024-018 .  .  Item 9 Page 1 of 3 RESOLUTION NO. 2024-018 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AUTHORIZING THE DIRECTOR OF PUBLIC WORKS TO FILE APPLICATIONS FOR GRANT FUNDS FROM THE LOS ANGELES COUNTY REGIONAL PARK AND OPEN SPACE DISTRICT FOR MEASURE A FUNDING FOR PROJECTS AND PROGRAMS SECTION 1. Recitals. A. The voters of the County of Los Angeles on November 8, 2016, approved the Safe, Clean Neighborhood Parks, Open Space Beaches, Rivers Protection, and Water Conservation Measure (Measure A). B. Measure A also designated the Los Angeles County Regional Park and Open Space District (District) to administer said funds. C. The District set forth the necessary policies and procedures governing the application for grant funds under Measure A. D. The District’s policies and procedures require the governing body of the City of Vernon (Vernon) to approve the filing of an application before submission of said application to the District. E. Said application contains assurances that Vernon must comply with. F. Vernon will enter into Agreement(s) with the District to provide funds for acquisition projects, development projects, and/or programs. G. The City Council wishes to delegate authorization to execute the Agreement(s) with the District and any amendments thereto to the Director of Public Works. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2. The City Council of the City of Vernon hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council hereby authorizes the Director of Public Works, or his or her designee, to conduct all negotiations, and to execute and submit all documents including, but not limited to, applications, agreements, amendments, payment requests and so forth, which may be necessary for the completion of projects or programs for, and on behalf of, the City of Vernon and to take whatever actions are deemed necessary or desirable for the purpose of implementing and carrying out the purposes of this Resolution and the actions herein approved or authorized. .  .  Item 9 Page 2 of 3 Resolution No. 2024-018 Page 2 of 2 _______________________ SECTION 4. The Deputy City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED August 20, 2024. ________________________ JUDITH MERLO, Mayor ATTEST: YONNIE PARKER, Deputy City Clerk (seal) APPROVED AS TO FORM: ZAYNAH N. MOUSSA, City Attorney .  .  Item 9 Page 3 of 3 7 8 1 City Council Agenda Report Meeting Date:August 20, 2024 From:Michael Earl, Director of Human Resources Department:Human Resources Submitted by:Michael Earl, Director of Human Resources Subject Services Agreement With Bob Murray & Associates for Executive Recruitment Services Recommendation Approve and authorize the City Administrator to execute a Professional Services Agreement with Bob Murray & Associates, in substantially the same form as submitted, for Executive Recruitment Services for a total amount not-to-exceed $113,000, for a one-year term. Background With vacancies in four key executive-level positions in the City, including City Administrator, Director of Finance/City Treasurer, City Clerk, and Director of Human Resources, the City published a Request for Proposals (RFP) for executive recruitment services on June 27, 2024. Pursuant to Vernon Municipal Code (VMC) Section 3.32.080, the RFP was posted on the City’s website and Human Resources staff emailed the RFP to eight firms known to provide the requested services. Responses were due by 5:00 pm on July 15, 2024. A total of eighteen proposals were received, including one proposal received after the response deadline and, therefore, not considered. Staff reviewed the proposals in accordance with the specifications set forth within the RFP and determined that five proposals were best aligned with the needs of the City. Established criteria were used in reviewing and comparing the proposals and the top two rated firms were invited for an interview and presentation. References were also contacted for the two finalists. Priority for the selected firm will be on the recruitment for City Administrator while simultaneously coordinating the recruitments for the other three positions. Following the RFP process, staff is recommending the selection of Bob Murray & Associates to provide the requested executive recruiting services. Bob Murray & Associates has extensive experience providing executive recruitment services for municipal public agencies in California. Bob Murray & Associates is being recommended based on their experience; particularly in recruiting at the level of City Administrator/City Manager, their approach to conducting the recruitments, the level of customer service outlined in their proposal and during their interview and presentation, as well as their proposed costs for services. The proposed agreement requires City Council approval pursuant to VMC Section 3.32.030 (A) as the total value over the lifetime of the contract exceeds $100,000. Fiscal Impact The fiscal impact is estimated at $113,000. Approval of this action would require an additional appropriation of $113,000 for executive recruiting services in the General Fund, Human Resources Department, Professional Services – Other, Account No. 011-010-120-529215 for the current fiscal year from available General Fund Unassigned Fund Balance. Attachments 1. Professional Services Agreement with Bob Murray & Associates.  .  Item 10 Page 1 of 36 .  .  Item 10 Page 2 of 36 .  .  Item 10 Page 3 of 36 .  .  Item 10 Page 4 of 36 .  .  Item 10 Page 5 of 36 .  .  Item 10 Page 6 of 36 .  .  Item 10 Page 7 of 36 .  .  Item 10 Page 8 of 36 .  .  Item 10 Page 9 of 36 .  .  Item 10 Page 10 of 36 .  .  Item 10 Page 11 of 36 .  .  Item 10 Page 12 of 36 .  .  Item 10 Page 13 of 36 .  .  Item 10 Page 14 of 36 .  .  Item 10 Page 15 of 36 .  .  Item 10 Page 16 of 36 .  .  Item 10 Page 17 of 36 .  .  Item 10 Page 18 of 36 .  .  Item 10 Page 19 of 36 .  .  Item 10 Page 20 of 36 .  .  Item 10 Page 21 of 36 .  .  Item 10 Page 22 of 36 .  .  Item 10 Page 23 of 36 .  .  Item 10 Page 24 of 36 .  .  Item 10 Page 25 of 36 .  .  Item 10 Page 26 of 36 .  .  Item 10 Page 27 of 36 .  .  Item 10 Page 28 of 36 .  .  Item 10 Page 29 of 36 .  .  Item 10 Page 30 of 36 .  .  Item 10 Page 31 of 36 .  .  Item 10 Page 32 of 36 .  .  Item 10 Page 33 of 36 .  .  Item 10 Page 34 of 36 .  .  Item 10 Page 35 of 36 .  .  Item 10 Page 36 of 36 City Council Agenda Report Meeting Date:August 20, 2024 From:Daniel S. Wall, P.E., Director of Public Works Department:Public Works Submitted by:Cynthia Cano, Administrative Secretary Subject Haaker Equipment Company 2025 Vactor Truck Purchase Recommendation A. Approve and authorize issuance of a Purchase Order (PO) for the purchase of one new 2025 CNG Vactor Truck from Haaker Equipment Company for a total amount not-to-exceed $757,716.28; and B. Authorize a contingency amount of $22,283.72 should the purchase of a comparable Vactor Truck be necessary due to limited inventory, and grant authority to the City Administrator to issue a Change Order to the PO to Haaker Equipment Company for an amount up to the contingency amount if necessary. Background The adopted Public Works Department, Street Operations Division budget for FY 2024-25 included planned capital expenditures for the purchase of one new 2025 CNG Vactor Truck. The acquisition aims to meet the operational needs of the Street Division. The Vactor Truck will be used for routine maintenance tasks, including cleaning and flushing sewer lines, catch basins, and stormwater systems. These tasks are essential for preventing sewer and stormwater system overflows. The quote secured for this purchase comes from Haaker Equipment Company and is based on Sourcewell contract #101221-VTR. Pursuant to Vernon Municipal Code (VMC) Sections 3.32.110(A)(5) and (B)(1), the proposed Vactor Truck purchase is exempt from competitive bidding and competitive selection as Sourcewell is a public agency and service cooperative that awards contracts through a competitive process and provides the lowest price available. Staff recommends approving the acquisition of one new 2025 CNG Vactor Truck through Haaker Equipment Company. Fiscal Impact The fiscal impact is not-to-exceed $780,000. Sufficient funds are available in the General Fund, Public Works Department, Street Maintenance Division, Capital Equipment Account No. 011- 040-430-660010 for the current fiscal year. Attachments 1. Haaker Equipment Company-Quote 5-14-24 2. Sourcewell Contract No. 101221 .  .  Item 11 Page 1 of 34 .  .  Item 11 Page 2 of 34 .  .  Item 11 Page 3 of 34 .  .  Item 11 Page 4 of 34 .  .  Item 11 Page 5 of 34 .  .  Item 11 Page 6 of 34 .  .  Item 11 Page 7 of 34 .  .  Item 11 Page 8 of 34 .  .  Item 11 Page 9 of 34 .  .  Item 11 Page 10 of 34 .  .  Item 11 Page 11 of 34 .  .  Item 11 Page 12 of 34 .  .  Item 11 Page 13 of 34 .  .  Item 11 Page 14 of 34 .  .  Item 11 Page 15 of 34 .  .  Item 11 Page 16 of 34 .  .  Item 11 Page 17 of 34 .  .  Item 11 Page 18 of 34 .  .  Item 11 Page 19 of 34 .  .  Item 11 Page 20 of 34 .  .  Item 11 Page 21 of 34 .  .  Item 11 Page 22 of 34 .  .  Item 11 Page 23 of 34 .  .  Item 11 Page 24 of 34 .  .  Item 11 Page 25 of 34 .  .  Item 11 Page 26 of 34 .  .  Item 11 Page 27 of 34 .  .  Item 11 Page 28 of 34 .  .  Item 11 Page 29 of 34 .  .  Item 11 Page 30 of 34 .  .  Item 11 Page 31 of 34 .  .  Item 11 Page 32 of 34 .  .  Item 11 Page 33 of 34 .  .  Item 11 Page 34 of 34 City Council Agenda Report Meeting Date:August 20, 2024 From:Daniel S. Wall, P.E., Director of Public Works Department:Public Works Submitted by:Lissette Melendez, Project Engineer Subject Extension of Franchise Granted to Pacific Pipeline System, Inc. Recommendation A. Find that the proposed action is exempt from the California Environmental Quality Act (CEQA), in accordance with CEQA Guidelines Section 15301, because it consists of the maintenance, repair or minor alteration of existing facilities and equipment and involves negligible or no expansion of an existing use; and B. Adopt Resolution No. 2024-017 finding and determining that the public interest and necessity require the time extension of Ordinance No. 1046 Granting a Franchise to Pacific Pipeline System, Inc. to maintain and operate a pressurized steel pipeline and appurtenances in and under Alameda Street. Background On May 20, 1997, the City of Vernon adopted Ordinance No. 1046 granting a franchise to Pacific Pipeline System, Inc. to install, maintain and operate a pressurized steel pipeline and appurtenances in and under Alameda Street. This Franchise was granted for a term of twenty- five years and with the possibility to request a time extension for an additional twenty-five years at the end of its first term by a resolution of the City Council without a public hearing. In 1999, Pacific Pipeline System installed approximately 96 feet of twenty-inch diameter, insulated, pressurized steel petroleum pipeline, and a control cabinet in the median on Alameda Street to transmit oil and oil products. During the term of this franchise, Pacific Pipeline System has been making annual payments in accordance with the California Public Utilities Code Section 6231.5 and per Ordinance No. 1046. Pacific Pipeline states that there have not been any oil spills or leaks in the pipeline during the term of the agreement. According to their records, in 2008, a protective composite wrap was installed around the line to repair external corrosion. Pacific Pipeline has provided records of their annual payments from 2007 to 2024. Ordinance No. 1046 expired in May 2022. Pacific Pipeline requested the extension in 2021 but the franchise extension was delayed until Pacific Pipeline provided maintenance and fee information requested by the City. The requested information was provided in July 2024 so the extension could proceed. The Public Works Department recommends the adoption of Resolution No. 2024-017 extending the agreement for 25 years. Fiscal Impact Approval of the extension of Ordinance No. 1046 will result in the continued annual payment from the franchisee resulting in additional revenue to the General Fund Franchises and Agreements Account No. 011-410-000-410300 estimated at $212.05. The franchise fee will be computed and increased annually by the September Consumer Price Index for the area as cited in the California Public Code Section 6231.5. Attachments.  .  Item 12 Page 1 of 110 1. Resolution No. 2024-017 2. Renewal Request 3. Ordinance No. 1046 .  .  Item 12 Page 2 of 110 RESOLUTION NO. 2024-017 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON EXTENDING THE FRANCHISE AGREEMENT WITH PACIFIC PIPELINE SYSTEM, INC. SECTION 1. Recitals. A. On April 8, 1997, the City Council adopted Resolution No. 6937 declaring its intention to grant a Franchise to Pacific Pipeline System, Inc. (Franchisee) to install, maintain and operate a pressurized steel pipeline and appurtenances in and under Alameda Street in the City of Vernon. B. On May 20, 1997, the City Council adopted Ordinance No. 1046 granting a Franchise to Franchisee to install, maintain and operate a pressurized steel pipeline and appurtenances in and under Alameda Street in the City of Vernon for a term of twenty- five (25) years. C. On July 5, 2000, Pacific Pipeline Systems notified the City that 96 feet of 20” crude oil pipeline and a control cabinet on the median were constructed in the City’s right-of- way under the Vernon Franchise. The Franchise term expired on May 20, 2022. D. On November 15, 2021, the Public Works Department received a written request from the Franchisee to extend the Franchise for an additional term of twenty-five (25) years. E. Pursuant to Section 4 of Ordinance No. 1046 and upon written request by Franchisee, the City Council has the discretion to extend the Franchise by resolution, without a public hearing, for one additional term of twenty-five (25) years. F. The City Council wishes to extend the Franchise for an additional twenty-five (25) years pursuant to Section 4 of Ordinance No. 1046, effective May 21, 2022. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 2. The City Council hereby finds and determines that the above recitals are true and correct. SECTION 3. The City Council hereby finds that this action is categorically exempt from the California Environmental Quality Act (CEQA), in accordance with CEQA Guidelines Section 15301, because it consists of the maintenance, repair or minor alteration of existing facilities and equipment and involves negligible or no expansion of an existing use. .  .  Item 12 Page 3 of 110 Resolution No. 2024-017 Page 2 of 2 _______________________ SECTION 4. Effective May 21, 2022, the City Council hereby approves the extension of the Franchise to Pacific Pipeline System, Inc. for an additional twenty-five (25) years. SECTION 5. The Deputy City Clerk shall certify the passage and adoption of this resolution and enter it into the book of original resolutions. APPROVED AND ADOPTED August 20, 2024. ________________________ JUDITH MERLO, Mayor ATTEST: YONNIE PAKER, Deputy City Clerk (seal) APPROVED AS TO FORM: ZAYNAH N. 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Recommendation A. Find that approval of the proposed action is exempt from California Environmental Quality Act (CEQA) review, because it is a government fiscal activity that will not result in direct or indirect physical changes in the environment, and therefore does not constitute a “project” as defined by CEQA Guidelines section 15378; to the extent the Purchase Contracts with Siemens Energy, Inc. provides for facility and equipment maintenance or repairs, such work is categorically exempt from CEQA review, in accordance with CEQA Guidelines section 15301, because the project consists of the maintenance, repair or minor alteration of existing structures, facilities, or equipment, and involves negligible or no expansion of an existing use; and B. Approve and authorize the City Administrator to execute Change Order No. 20 to the Amended and Restated Services Agreement with Siemens Energy, Inc. (Siemens Energy), in substantially the same form as submitted, to revise the Projected Schedule Outage Plan, Payment Schedule, Cancellation Schedule, Upgrade Schedule, Dehumidifier Upgrade, Burner 26 Upgrade, Gearset Upgrade, Starter Motor Upgrade, amend the termination date of the agreement, and add a blanket Purchase Contracts schedule. Background On November 16, 2021, the City Council adopted Resolution No. 2021-41, approving a Purchase and Sale Agreement (PSA) with Bicent (California) Malburg LLC (Bicent) for the acquisition of the Malburg Generating Station (MGS). Under the PSA, the City is required to assume or otherwise comply with certain vendor contracts previously entered by Bicent. As such, the City was obligated to accept the existing Long Term Service Agreement (LTSA) between Bicent and Simens Energy, Inc. (Siemens Energy). On November 21, 2023, the City Council approved Change Order No. 19 to the Amended and Restated Services Agreement with Siemens Energy to perform a Feedwater Pump Motor Life Expectancy Analysis Program test and add Contingency Funds for Extra Work Authorizations executed during the December 2023 outage. As assigned, the LTSA was designed for Siemens Energy to provide program parts, non-program parts, miscellaneous hardware, inspection hardware, generator parts, generator scheduled outages, steam turbine parts, steam turbine scheduled outages, scheduled outages services, and program management services for MGS's ongoing needs. LTSAs are among the most complex contracts encountered by combined cycle power plants. These contracts involve high complexity in legal, financial, and technical aspects, especially in regard to gas turbine technology. Understanding the fundamental factors that drive parts replacement and maintenance costs is crucial for negotiating with suppliers. The gas turbine constitutes a significant portion of combined cycle maintenance costs, with hot gas path parts being the main contributors. The current LTSA with Siemens Energy is set to expire in September 2025. In preparation for this, on May 13, 2024, the City entered into a Services Agreement with SS&A Power Consultancy (SS&A) to provide consulting services for an extension to the LTSA through Fiscal Year (FY) .  .  Item 13 Page 1 of 3 2033. SS&A reviewed the proposed change order to assess whether the pricing and terms align with the current business market, especially for other similar contracts. The review included an assessment of any potential issues and an overall evaluation of the contract. SS&A has an extensive track record of helping clients define their gas turbine maintenance strategies and negotiate long term service agreements, resulting in visibility of many similar contracts. This knowledge is used to review the contract considering best achievable terms and conditions as well as current market pricing. This enables a comparison of the MGS LTSA to LTSAs for similar units. In SS&A’s evaluation, the Long-Term Program (LTP) adjusted price excluded extra costs such as a dehumidifier as well as a payment shift of the remaining $6.3 million from the existing LTP, resulting in an adjusted price of $20,368,343. This was compared to an estimated transactional cost of $23,600,000 if the LTP scope of work were purchased on an individual basis. In addition to the transaction cost savings, the LTP also includes a term warranty for all program parts, engineering support, outage planning support and execution as well as many other integrated benefits as a result of this change order that are essential components to the long term operational and maintenance success of a power generation facility. Based on SS&A’s experience, they estimated that the transactional cost of the work to be completed under the LTP would likely be higher than the cost of the LTP extension, also without the additional benefits of the items mentioned above. SS&A used a top-down approach to pricing analysis, comparing the overall price with other prices seen in the market. This approach is a common way to analyze market prices on a $/MWh basis. This top-down analysis is also useful in assessing if the price is generally within the market range. Based on other contracts SS&A has seen for the SGT-800 class or similar gas turbine-based power plants, the MGS LTP extension price is within expected market price levels. Change Order No. 20 to the Amended and Restated Services Agreement extends the agreement to June 30, 2034. The LTSA's Exhibit C, "Projected Scheduled Outage Plan," has been updated to show the projected dates and plan for scheduled outages through June 2034. Furthermore, Exhibit E, “Payment Schedule; Taxes,” has been modified to reflect the number of Planned Outages outlined in Exhibit C, "Projected Scheduled Outage Plan" (Rev. 3), and assumes that all payments in the Payment Schedule are made. Furthermore, the Payment Schedule reflects the utility’s estimated electric load forecast. Exhibit J, “Upgrades,” details the upgrades that Siemens Energy will install according to a mutually agreed schedule with the City. City Council approval of Change Order No. 20 is required pursuant to Vernon Municipal Code Section 3.32.030(B), which states if, in the 12 months preceding the effective date of a proposed new, renewed, or otherwise amended contract, the City has paid or awarded the proposed vendor more than $100,000 pursuant to contracts with the vendor, then the proposed new, renewed, or otherwise amended contract shall be approved only by the City Council. Change Order No. 20 also includes a schedule for blanket Purchase Contracts detailing the issuance of annual contracts to Siemens Energy. Approval of Change Order No. 20 would authorize the issuance of the annual blanket Purchase Contracts referenced in the schedule from FY 2024-25 through 2032-33. Such Purchase Contracts will not exceed $100,000 annually and will be provided at the start of each Fiscal Year (FY) to cover annual, unforeseen or emergency parts and/or services that may be required by Siemens Energy. Any remaining balance at the end of each fiscal year will not be carried over to the next fiscal year. Change Order No. 20 has been reviewed and approved as to form by the City Attorney’s Office. Change Order No. 20 contains confidential and proprietary information and will be provided to the City Council under separate cover; it will not be included in the public Agenda Packet. Fiscal Impact.  .  Item 13 Page 2 of 3 The fiscal impact associated with Change Order No. 20 is estimated at $31,111,674 since fees are subject to the annual Escalation Factor and will be either increased or decreased by the Escalation Factor at the time of each invoice. VPU has included an estimated escalation of costs in the FY 2024-25 budget. Sufficient funds are available in the Electric Fund, Malburg Generation Station, Long-Term Plant Maintenance Account No. 055-050-586-529001 for the current fiscal year and sufficient funds will be budgeted in subsequent years. The fiscal impact is not-to-exceed $100,000 for the annual blanket Purchase Contract. Sufficient funds are available in the Electric Fund, Malburg Generation Station, Repairs & Maintenance Account No. 055-050-586-529000 for the current fiscal year and sufficient funds will be budgeted in subsequent years. Attachments None. .  .  Item 13 Page 3 of 3 City Council Agenda Report Meeting Date:August 20, 2024 From:Todd Dusenberry, General Manager of Public Utilities Department:Public Utilities Submitted by:Adriana Ramos, Administrative Analyst Subject Vernon Public Utilities Financial Reserves Policy Recommendation Approve and adopt the Vernon Public Utilities Financial Reserves Policy. Background The 2019 Electric Cost of Service Analysis and Rate Design Study (Study) for Vernon Public Utilities (VPU) included a multi-year financial plan.  On April 2, 2019, the City Council adopted Resolution No. 2019-07, approving and adopting a four-step rate adjustment for Fiscal Years (FYs) 2020 through 2023 as follows: (i) a 0.8% electric rate increase effective July 1, 2019, (ii) a 1.9% electric rate increase effective July 1, 2020, (iii) a 4% electric rate increase effective July 1, 2021, and (iv) a 4% rate increase effective July 1, 2022. However, the 2019 Study did not include a comprehensive Financial Reserves Policy (FRP) for the VPU Electric Fund. On April 4, 2023, the City Council approved an agreement with NewGen Strategies & Solutions, LLC (NewGen) to conduct a new Study and to provide rate adjustment and rate design recommendations, which included a plan to establish and implement a long-term FRP for VPU. As part of the FY 2023-24 budget, VPU included a five percent (5%) electric rate increase to address factors beyond the Department’s control, including rising energy and natural gas costs, supply chain issues, and regulatory and legislative mandates, as well as the departure of key business customers. On June 6, 2023, the City Council adopted Resolution No. 2023-13, amending the electric rates for FY 2023-24 with a five percent (5%) rate adjustment effective July 1, 2023. Additionally, on August 15, 2023, the City Council adopted Resolution No. 2013-19 to update and implement an Energy Cost Adjustment Billing Factor procedure and computation method which establishes an Energy Cost Adjustment to be billed under all electrical rate schedules for energy transmitted, distributed, and supplied to the City of Vernon electric customers. At the time, the plan to present the FRP was deferred so that staff could focus on the results and implementation of the Study. The FRP is one of the most important financial policies that VPU can utilize for its overall financial strategy and managing its financial risk. As financial and operational risks impact VPU on an ongoing basis, the FRP will guide VPU management in mitigating that risk. It will also ensure that VPU has sufficient funding available to meet its operating, capital, energy resources, and emergency requirements. The FRP supports VPU’s strategy to strive to meet the goal of having the lowest electric rates in California by 2030. The Electric Fund has faced many challenges over the last several years, including the COVID- 19 pandemic, the impact of uncertain political and security situations in the world, including the invasion of Ukraine on natural gas prices, high inflation, and supply chain issues, including higher costs for materials and supplies, chemicals, and construction costs, which have resulted in a .  .  Item 14 Page 1 of 22 recent rate adjustment to VPU’s customers. Moreover, energy prices and natural gas costs are significantly higher when compared to historical average prices. VPU is also experiencing electric load reductions when compared to the 2019 Study. As noted during the FY 2023-24 budget process and the August 15, 2023 Study presentation, VPU is in a transition period for the next several years to develop and implement a clean commerce business strategy to attract more customers as well as a more diverse customer base. Historically, VPU has not had an established FRP to respond to the need to adjust rates, loss of customers, unforeseen emergency repairs to its distribution and generation systems, mitigate higher energy and natural gas costs, respond to higher-than-expected operating costs, or fund capital investment when issuing debt is not financially prudent. The FRP is designed to define overall cash reserve levels that are reasonable, prudent, and necessary to provide adequate liquidity for the Electric Fund. The FRP will enhance VPU’s long- term financial stability and help to maintain level rates that are competitive and as stable as reasonably possible. Levelized rates will help VPU maintain its competitive position in the statewide utility industry in order to attract and retain a robust, diversified customer base. At the same time, funding reserves will promote financial stability by mitigating operating, capital, and volatile energy market risks. Publicly Owned Utilities, such as VPU, are cash-driven utilities and ensure short and long-term financial stability by maintaining enough cash after operating expenses to meet debt service, support infrastructure investment, provide working capital, and fund other cash needs. In addition, utilities such as VPU are subject to a broad array of risks, which vary from small temporary business disruptions to substantial events, which could result in significant adverse financial consequences for VPU and its customers. Financial reserves help VPU mitigate these risks and reduce volatility in financial performance and customer impacts. Industry practice shows that the proper FRP can address both the operating cash needs and risk mitigation opportunities facing utilities. Cash reserve balances are also a critical element in reviewing a municipal utility’s financial health by rating agencies such as Standard and Poor’s and Moody’s. These reviews lead to the rating agency determining a rating on the creditworthiness of the utility, which, in turn, affects the cost of borrowing for the utility. VPU is subject to many types of risk that can be mitigated by having sufficient cash reserves to ensure adequate and reasonable liquidity. The major areas of risk are the loss of a major customer(s), the risk that budgeted revenue is not realized, the risk of sudden increases in commodity costs (i.e., natural gas and energy), the risk of a major equipment or utility asset failure, an unforeseen natural disaster, and the risk of unexpected increases in operating costs. The FRP also establishes funds to reduce the amount of debt that the utility would otherwise be required to issue to maintain or expand its capital infrastructure. The funds will also be used for additions and replacement of major electric utility assets. The funds defined in the FRP, and the targeted balances of these funds are based upon rating agency guidelines, staff assessment of the probability of certain risks associated with the Electric Fund, and historical volatility in revenues and expenses. The FRP was developed by VPU staff and was reviewed by NewGen. The recommended FRP is based on Days Cash on Hand, which is a financial metric used by rating agencies when reviewing and updating each utility’s credit profile..  .  Item 14 Page 2 of 22 The specific Reserve Funds to be established in this Policy include the following: 1. Rate Stabilization Fund Funded at an amount to help protect VPU’s overall liquidity and includes Revenue Risks, Commodity Risks, and Counterparty Credit Risks. It is used to temporarily absorb permanent increases until decisions are made to adjust rates, if necessary. This type of fund avoids “rate shock” to customers. 2. Operating Reserves Fund (Working Capital) Funded in an amount to ensure adequate liquidity to meet VPU’s ongoing operations. 3. Capital Reserve Fund Provides for future capital expenditure needs for planned capital improvement projects and provides a contingency for unexpected capital funding needs. The recommended minimum and target levels for the FRP are summarized below. Recommended Funding Levels by 2030 In Million ($) Reserve Type Minimum Target Rate Stabilization Fund $ 70.2 $ 135.5 Operating Reserves Fund $ 26.9 $ 53.9 Capital Reserve Fund $ 21.7 $ 65.1 Total Financial Reserves $ 118.8 $ 254.5 The FRP also defines the specific events and uses of each type of reserve. It also defines a process and timeframe for replenishing each reserve type if it falls below the minimum levels. The FRP defines recommended minimum and targeted levels of liquidity for each type of reserve. The FRP should be reviewed annually as part of VPU’s financial planning and budgeting process and, more often, as material changes or other event(s) deemed critical by VPU management impact VPU’s financial and operational risk profile. VPU staff recommends that the City Council approve and adopt VPU’s FRP. The FRP has been reviewed and approved as to form by the City Attorney’s Office. Fiscal Impact There is no fiscal impact associated with this report. Attachments 1. Vernon Public Utilities Financial Reserves Policy .  .  Item 14 Page 3 of 22 .  .  Item 14 Page 4 of 22 .  .  Item 14 Page 5 of 22 .  .  Item 14 Page 6 of 22 .  .  Item 14 Page 7 of 22 .  .  Item 14 Page 8 of 22 .  .  Item 14 Page 9 of 22 .  .  Item 14 Page 10 of 22 .  .  Item 14 Page 11 of 22 .  .  Item 14 Page 12 of 22 .  .  Item 14 Page 13 of 22 Financial Reserves Policy VERNON PUBLIC UTILITIES CITY OF VERNON August 20, 2024 August 20, 2024 Item 14 Staff Presentation .  .  Item 14 Page 14 of 22 COMMITTED TOCUSTOMERCOMPETITIVENESS Our Mission … To meet the goal of having one of the lowest electric rates in California by 2030 .  .  Item 14 Page 15 of 22 Planning for the Cost of Service Electric Cost of Service Analysis and Rate Design – presented in August 2023 To Be Updated- 2025 Financial Plan 5 Year Financial Plan for Electric Fund – Continuous Process Policy Financial Reserve Policy August 2024 Cost of Service Upcoming: Cost of Service Study Update for Water Fund in late 202 4/early 2025 Plan to include Financial Reserves Future .  .  Item 14 Page 16 of 22 Electric Fund Financial StrategyAugust 2023 1)Meet Debt Service Coverage Ratio (DSCR) Requirement of 1 .1 i.Target of 1 .2 DSCR was established for setting rates ii.Utilize $18M from VPU’s Expense Stabilization Fund in Fiscal Year 2023-24 2)Establish a minimum level of cash reserves at approximately 180 days and a target of 300 days cash 3)Implement a long -term VPU Financial Reserves Policy 4 ) Provide competitive base rates and stable ECA to customers 5 ) Maintain highest reliability and customer service standards .  .  Item 14 Page 17 of 22 Purpose of the Financial Reserves Policy 1)Positive signal to customers and bond investors that the City is committed to the long -term financial strength of VPU 2)Maintains stable rates for customers to ensure their competitiveness 3)Funds to mitigate revenue risks, unanticipated costs and system improvements, including transmission, distribution, and generation, for future growth and maintain reliability 4)Consistent with industry best practices 5)Significant financial metric used by credit rating agencies .  .  Item 14 Page 18 of 22 Reserve Policy Categories and Recommended Levels by 2030 1)Rate Stabilization Fund •Mitigates rate shock due to revenue and commodity risks •Loss of customer(s), reduced/delayed electric load, volatile energy markets •Minimum : $70.2 M •Target : $135.5 M 2)Operating Reserves Fund (Working Capital) •Sufficient funds to pay on-going operating expenses •Insulate customers from temporary, short term -events •Minimum : $26.9 M •Target : $53.9 M 3)Capital Reserve Fund •Provides partial funding for future capital expenditures •Minimum : $21.7 M •Target : $65.1 M .  .  Item 14 Page 19 of 22 Electric Fund Financial Reserves Policy Summary S&P Credit Overview S&P Global Ratings raised its rating to A - from BBB+ •“We view management and governance as improved in light of the adoption of an energy risk management policy,”… •“The city has improved its financial management policies and procedures over the past several years,”… •“Vernon is also finalizing a revised financial risk policy that sets guidelines with regard to various reserve designations .” Financial Metric Days’ Liquidity 281 S&P - June 30, 2023 VPU - 2030 Days’ Liquidity 212 Minimum Days’ Liquidity 453 Target .  .  Item 14 Page 20 of 22 Questions/Comments www.cityofvernon.org VERNON PUBLIC UTILITIES .  .  Item 14 Page 21 of 22 Approve and adopt the Vernon Public Utilities Financial Reserves Policy VPU Recommendation .  .  Item 14 Page 22 of 22