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, 2023
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, 2023
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 Revenues, Expenditures and Change in Fund Balance (Statement of Sources and Uses of Sale and Lease Proceeds) of the City of Alameda as a Local Redevelopment Authority for the former Alameda Naval Air Station (NAS) for the year ended June 30, 2023 and the accompanying Balance Sheet as of June 30, 2023 (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 D ebt
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, 2023 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 ba lance 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, 2023.
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, 2023.
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 P
ublic 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, 2023. 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 and use of mana gement, 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.
Pleasant Hill, California
December 28, 2023
2 CITY OF ALAMEDA, CALIFORNIA
BASE REUSE FUNDS
BALANCE SHEET
PROCEEDS DERIVED FROM THE SALE OR LEASE OF NAS ALAMEDA
AS OF JUNE 30, 2023
ASSETS
Cash and Investments 47,034,262$
Restricted Cash and Investments 153,821
Accounts Receivable
685,537
Leases Receivable
73,010,671
Total Assets 120,884,291$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES
AND FUND BALANCE
Liabilities:
Accrued Payroll
75,570$
Refundable Deposits
1,360,777
Total Liabilities 1,436,347
Deferred Inflows of Resources:
Unavailable revenue - accounts receivable
685,537
Related to leases
69,807,540
Total Deferred Inflows of Resources 70,493,077
Fund Balance:
Restricted for Base Reuse
48,954,867
Total Liabilities, Deferred Inflows of Resources
and Fund Balance 120,884,291$
3 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, 2023
REVENUES
Lease Revenues 14,964,507 $
Rent Revenues 1,927,148
Interest and Other Use of Money and Property 1,427,519
Total Revenues 18,319,174
EXPENDITURES
Building Rehabilitation
4,347,310
Landscaping/Grading 126,313
Utility Construction 14,746,705
Transportation Management Facilities 100,979
Planning/Marketing of Redevelopment/Reuse 5,258,171
Operation/Maintenance of NAS Alameda 2,449,224
Total Expenditures 27,028,702
REVENUES OVER/(UNDER) EXPENDITURES
(8,709,528)
OTHER FINANCING SOURCES (USES)
Alameda Point Debt Service Contribution
(802,404)
Return of unspent funds (818,683)
Total Other Financing Sources (Uses) (1,621,087)
Net Change in Fund Balance
(10,330,615)
Fund Balance at Beginning of Period 59,285,482
Fund Balance at End of Period
48,954,867$
4 BACKGROUND
Prepared by City Management
Alameda Naval Air Station
In June 1993, the Defense Base Realignmen t and Closure Commission (BRAC) recommende d
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, together 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 the 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 reimbu
rsement 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