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, 2022
This Page Left Intentionally Blank
MMAZE
& ASSOCIATES
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, 2022
To the Honorable Members of the City Council
City of Alameda, California
(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 the 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 responsible 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 revenues presented on the Statement of Sources and ses of Sale and Lease Proceeds to the Base Reuse Special Revenue Fund, Base Reuse Deb Service Fund and Alameda Point Capital Projects Fund in the audited financial statements of th 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, 2022 sufficiently show the uses of the proceeds that are to be used only for activities outlined in the agreement between the U.S. Navy and the City.
Findings: None
D. We verified the accompanying balance sheet presents the assets, liabilities, deferred inflows of resources and fund balance of the sale and leasing activities of the City as of June 30, 2022.
Findings: None
т 925.930.0902
Accountancy Corporation F 925.930.0135
3478 Buskirk Avenue, Suite 215 e [email protected] Pleasant Hill, CA 94523 w mazeassociates.com
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 Lease Proceeds and the Balance Sheet as of and for the year ended June 30, 2022.
Findings: None
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did 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, 2022. Accordingly, 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 and use of management, the City Council and the Department of Defense 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.
Mage Associates
Pleasant Hill, California
December 29, 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, 2022
ASSETS
Cash and Investments $ 62,489,296
Restricted Cash and Investments 104,089
Accounts Receivable 897,229
Leases Receivable 59,343,502
Total Assets 122,834,116
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCE
Liabilities:
Accounts Payable $ 3,646,868
Accrued Payroll 51,854
Refundable Deposits 1,077,968
Total Liabilities 4,776,690
Deferred Inflows of Resources:
Unavailable revenue - accounts receivable 897,229
Related to leases 57,874,715
Total Deferred Inflows of Resources 58.771.944
Fund Balance:
Restricted for Base Reuse 59,285,482
Total Liabilities, Deferred Inflows of Resources
and Fund Balance $ 122,834,116
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, 2022
REVENUES
Lease Revenues $ 15,417,089
Utility Revenues 29,580
Rent Revenues 1,928,087
Interest and Other Use of Money and Propert 636,425
Total Revenues 18,011,181
EXPENDITURES
Building Rehabilitation 3,554,830
Landscaping/Grading 102,069
Utility Construction 5,085,147
Transportation Management Facilities 88,282
Planning/Marketing of Redevelopment/Reuse 3,492,613
Operation/Maintenance of NAS Alameda 2,265,579
Total Expenditures 14,588,520
REVENUES OVER/(UNDER) EXPENDITURES 3,422,661
OTHER FINANCING SOURCES (USES)
Alameda Point Debt Service Contribution (515,114)
Return of unspent funds 2,038
Total Other Financing Sources (Uses) (506,076)
Net Change in Fund Balance 2,916,585
Fund Balance at Beginning of Period 56,368,897
Fund Balance at End of Period 59,285,482
4 BACKGROUND
Prepared by City Management
Alameda Naval Air Station
In June 1993, the Defense Base Realignment and Closure Commission (BRAC) recommended the closure of the Naval Air Station Alameda ("NAS Alameda"), which encompasses the Naval acilities and grounds comprising the western end of the City of Alameda and consists of approximately 2,693 acres of real property, together with the buildings, improvements and othe 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 and 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 property at the former NAS Alameda. On June 6, 2000, the Department of the Navy and the City of Alameda signed an Economic Development Conveyance Memorandum of Agreement (EDC MOA), 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 Reuse 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 and Navy to the Reuse Plan by including in the Agreement an enforcement mechanism to deter development 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 approximately 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-acres was conveyed in April 2017 (Phase 3A Conveyance); and a fourth conveyance of 42 acres (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 after 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 Agreement. 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 legislation, the Department of Defense requires Local Redevelopment Authorities to submit financial statements that account for the reinvestment of proceeds by the approved categories for a minimum period of seven years from the date of property conveyance.