CITY OF ALAMEDA
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURES
FOR ALAMEDA NAVAL AIR STATION BASE REUSE FUND
STATEMENT OF SOURCES AND USES OF
SALE AND LEASE PROCEEDS
FOR THE YEAR ENDED JUNE 30, 2021
(REVISED)
This Page Left Intentionally Blank
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURES
FOR ALAMEDA NAVAL AIR STATION BASE REUSE FUND
STATEMENT OF SOURCES AND USES OF
SALE AND LEASE PROCEEDS
FOR THE YEAR ENDED JUNE 30, 2021
To the Honorable Members of the City Council
City of Alameda, California
We have performed the procedures enumerated be low on evaluating the accompanying Statement of Sources and Uses of Sale and Lease Proceeds of th e City as a Local Redeve lopment Authority for the former Alameda Naval Air Station (NAS) for the year ended June 30, 2021 and the accompanying Balance Sheet as of June 30, 2021 (Statements). The City’s management is responsible for the Statements.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the
intended purpose of evaluating the Statements. This report may not be suitable for any other purpose. The procedures performed may not address all th e items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are re sponsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings are as follows:
A. Read the Background information prepared by City Management, pertaining to the agreement between the United States Navy (U.S. Navy) and the City.
Findings: None
B. After reading the agreement, we traced the revenu es presented on the Statement of Sources and Uses of Sale and Lease Proceeds to the Base Reuse Special Revenue Fund, Base Reuse Debt Service Fund and Alameda Point Capital Projects Fu nd in the audited financial statements of the City and verified, on a test basis, that revenues from other activities have been excluded.
Findings: None
C. We verified, on a test basis, that the expenditures presented on the Statement of Sources and Uses of Sale and Lease Proceeds for the year ended June 30, 2021 su fficiently show the uses of the proceeds that are to be used on ly for activities outlined in th e agreement between the U.S. Navy and the City.
Findings: None
D. We verified the accompanying balance sheet pres ents the assets, liabilities and fund balance of the sale and leasing activities of the City as of June 30, 2021.
Findings: None
1 E. We verified, on a test basis, that balances unrelated to the agreement have been excluded from the Statement of Sources and Uses of Sale and Leas e Proceeds and the Balance Sheet as of and for the year ended June 30, 2021.
Findings: None
We were engaged by the City to perform this ag reed-upon procedures enga gement and conducted our engagement in accordance with atte station standards established by th e American Institute of Certified Pub
lic Accountants. We were not engaged to and di d not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Statements as of and for the year ended June 30, 2021. Acco rdingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement. ********************
This report is intended solely for the information a nd use of management and th e City Council and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
February 9, 2022
2 CITY OF ALAMEDA, CALIFORNIA
BASE REUSE FUNDS
BALANCE SHEET
PROCEEDS DERIVED FROM THE SALE OR LEASE OF NAS ALAMEDA
AS OF JUNE 30, 2021
ASSETS
Cash and Investments 58,038,305 $
Restricted Cash and Investments 20,194
Accounts Receivable 2,170,117
Total Assets 60,228,616$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCE
Liabilities:
Accounts Payable 527,379 $
Accrued Payroll 46,110
Refundable Deposits 1,116,113
Total Liabilities 1,689,602
Deferred Inflows of Resources:
Unavailable revenue - accounts receivable 2,170,117
Fund Balance:
Restricted for Base Reuse 56,368,897
Total Liabilities, Deferred Inflows of Resources
and Fund Balance 60,228,616$
3 REVENUES
Lease Revenues 11,992,422 $
Utility Revenues 100,603
Rent Revenues 2,015,951
Interest and Other Use of Money and Property 123,742
Total Revenues 14,232,718
EXPENDITURES
Building Rehabilitation 3,618,005
Landscaping/Grading 36,527
Utility Construction 301,387
Transportation Management Facilities 225,459
Planning/Marketing of Redevelopment/Reuse 3,054,082
Operation/Maintenance of NAS Alameda 2,630,860
Total Expenditures 9,866,320
REVENUES OVER/(UNDER) EXPENDITURES 4,366,398
OTHER FINANCING SOURCES (USES)
Alameda Point Debt Service Contribution (414,111)
Contribution of Equity to Grant Funded Projects (25,000) Total Other Financing Sources (Uses) (439,111)
Net Change in Fund Balance 3,927,287
Fund Balance at Beginning of Period 52,441,610
Fund Balance at End of Period 56,368,897$
CITY OF ALAMEDA, CALIFORNIA
BASE REUSE FUNDS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE
PROCEEDS DERIVED FROM THE SALE OR LEASE OF NAS ALAMEDA
FOR THE YEAR ENDING JUNE 30, 2021
4 BACKGROUND
Prepared by City Management
Alameda Naval Air Station
In June 1993, the Defense Base Realignmen t and Closure Commission (BRAC) recommended the closure of the Naval Air Station Alameda (“NAS Alameda”), which encompasses the Naval facilities and grounds comprising the western en d of the City of Alameda and consists of approximately 2,693 acres of real property, toge
ther with the buildings, improvements and other
tangible personal property. President Clinton accepted the recommendation that same month, and Congress confirmed the closure in October 1993 . The NAS Alameda was decommissioned by the United States Department of the Navy in 1993 and closed operationally in April of 1997.
No Cost Economic Development Conveyance
In 1996, the Alameda Reuse an d Redevelopment Authority (ARRA ), of which the City is a member, approved the NAS Alameda Community Reuse Plan, as amended in 1997, to establish a plan for the reuse and redevelopment of the proper ty at the former NAS Al ameda. On June 6, 2000, the Department of the Navy and the City of Alameda signed an Economic Development Conveyance Memorandum of Agreement (EDC M OA), which authorized a no-cost conveyance of major portions of NAS Alameda property, including Alameda Point and Bayport, to the ARRA consistent with the NAS Alameda Community Re use Plan (Reuse Plan) adopted in 1996, and subsequently amended. The ARRA and Navy entered into Amendment No. 2 to the EDC MOA on January 4, 2012 that re-commits the ARRA an d Navy to the Reuse Plan by including in t he
Agreement an enforcement mechanism to deter de velopment different from that contemplated by the Reuse Plan. On February 7, 2012 the City of Alameda accepted a transfer of all of the ARRA’s rights, obligations and assets, including the EDC MOA. The United States Office of Economic Adjustment, on behalf of the Secretary of Defense, recognized the City as the official Local Reuse Authority on March 9, 2012.
Pursuant to these agreements: phase one conveyance of approxim ately 1,379 acres, including 509 acres of land and 870 acres of submerged land of the Alameda Point property was transferred from the Navy to the City in June 2013 (Phase 1 Conveyance); a second phase of land was transferred from the Navy to the City in April 2016, consisting of 183 acres (Phase 2 Conveyance); a small third conveyance of 2.6-acr es was conveyed in April 2017 (Phase 3A Conveyance); and a fourth conveyance of 42 acr es (Phase 3B Conveyance) was conveyed in September 2017.
Reporting
On October 5, 1999, the President signed into law legislation amending Section 2905(b) (4) of the Defense Base Closure and Realignment Act of 1990 authorizing the Secretary of the Navy to convey surplus property at a closing installation to a Local Redevelopment Authority at no cost for economic development purposes.
The 1999 legislation requires local redevelopment authorities to reinvest proceeds from the use of former military bases for the first seven years af ter acceptance of applicable Quitclaim Deeds, and the amended Memorandum of Agreement extends that term to the 25 year period following the execution of the amendment No. 2 to the Ag reement. The reinvestment of proceeds must support job-generation and economic development activities. 5 These allowable activities included reimbursement of the following categories:
1. Road construction
2. Transportation
management facilities
3. Storm and sanitary sewer construction
4. Police and fire protection facilities and other public facilities
5. Utility
construction
6. Building rehabilitation
7. Historic property preservation
8. Pollution prevention equipment or facilities
9. Demolition
10. Disposal of hazardous materials generated by demolition
11. Landscaping grading and other site or public improvements
12. Planning for or the marketing of the redevelopment and reuse of the Property To ensure compliance with the no-cost legislatio n, the Department of Defense requires Local Redevelopment Authorities to submit financial st atements that account for the reinvestment of proceeds by the approved cate gories for a minimum period of seven years from the date of property conveyance.
6