We recommend the City review the adjustment list provided during the audit and consider which entries can be posted prior to the start of the audit in the future to increase audit efficiency.
Cash Reconciliation
We recommend the City prepare a combined cash and investments reconciliation with each account in a column and reconciling items in rows that reconciles to total combined governmental activity, businesstype activity and fiduciary fund cash and investments accounts. This would simplify the reconciliation of cash and investments to the balance sheet and footnotes during the audit. Many city clients prepare a similar reconciliation. The City is waiting until after their accounting system is upgraded before implementing this suggestion.
* * * * *
We would like to take this opportunity to acknowledge the courtesy and assistance extended to us during the course of the audit. This communication is intended solely for the information and use of management, the City Council and others within the organization and is not intended to be, and should not be, used by anyone other than these specified parties.
December 30, 2021
298
550 Howe Avenue, Suite 210
Sacramento, California 95825
Telephone: (916) 564-8727
FAX: (916) 564-8728
GOVERNANCE LETTER
To the City Council
City of American Canyon, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of American Canyon (the City) for the year ended June 30, 2021, and have issued our report thereon dated December 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our engagement letter to you dated September 28, 2019 and to a member of the City Council during the audit. Professional standards also require that we communicate to you the following information related to our audit.
Our Responsibilities under U.S. Generally Accepted Auditing Standards As stated in our engagement letter dated September 28, 2019, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles. Our audit of the financial statements does not relieve you or management of your responsibilities.
In planning and performing our audit, we will consider the City’s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide assurance on the internal control over financial reporting.
Planned Scope and Timing of the Audit
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit involves judgment about the number of transactions to be examined and the areas to be tested.
Our audit includes obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Material misstatements may result from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the entity or to acts by management or employees acting on behalf of the entity. No material weaknesses in internal control were noted as a result of our audit. 299
To the City Council
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note A to the financial statements. The City adopted Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities, during the year ended June 30, 2021, which revised the identification and reporting of fiduciary activities. The City’s fiduciary activities are classified as custodial funds rather than agency funds, which now report a statement of fiduciary net position and a statement of changes in fiduciary net position. The application of existing policies was not changed during the year. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected.
Accounting estimates are used in the following areas: the allowance for uncollectible accounts and loans receivable, including accrued interest thereon, qualifying expenses claimed under grants, the depreciable lives used for capital assets, the liability for self-insured workers’ compensation claims, the net pension liability and the net other postemployment benefits liability. Management has determined an allowance for uncollectible accounts and loans receivable is necessary based on estimates of collectability and estimated collateral values. The City has an administrator for their self-insurance program that develops the estimate of the incurred, but unreported claims liability. The City has actuarial calculations performed on its net pension liability and net other postemployment benefits liability. We evaluated the key factors and assumptions used to develop the estimates in determining that they are reasonable in relation to the financial statements taken as a whole. The City has recorded an allowance for doubtful accounts on most of its BEGIN program loans and its shared appreciation loans and related accrued interest of $8,527,434 because of the previous decrease in property values and the uncertainty if repayment will be received.
This allowance does not affect fund balance because these loans are offset by deferred inflows of resources.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were the following:
Net Pension Liability: The disclosure of the net pension liability in Note J to the financial statements discusses the pension liability that is reflected in the Statement of Net Position and related deferred balances as well as the assumptions that were used to determine the amounts and other required disclosures. The required supplementary information schedules also provide historical information on the pension obligation.
Net Other Postemployment Benefits (OPEB) Liability: The disclosure of the net OPEB liability in Note K to the financial statements discusses the liability that is reflected in the Statement of Net Position and related deferred balances as well as the assumptions that were used to determine the amounts and other required disclosures.
The financial statement disclosures are neutral, consistent, and clear. 300
To the City Council
Difficulties Encountered in Performing the Audit
We encountered no difficulties in dealing with management in performing and completing our audit. The number of adjustments and closing entries posted during the audit was a difficulty encountered, however.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.
During our audit, 60 adjustments and closing entries were recorded. These adjustments included reclassifying receivables, recording capital asset activity, updating the OPEB, pension, debt and workers compensation balances, reclassify fund balance and net position, reclassify developer contributions, reclassify revenue and revising operating transfers. In addition, the attached schedule summarizes an unadjusted audit difference in the financial statements. Management has determined that the effect of the unadjusted difference is immaterial to the financial statements as a whole.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting or auditing matter, whether or not resolved to our satisfaction that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 30, 2021.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to management’s discussion and analysis, budgetary comparison schedules for the General and major special revenue funds, schedules of the proportionate share of the net pension liability, schedules of contributions to the pension plan, schedules of contributions to the other postemployment benefits plan and schedules of funding progress of the other postemployment benefits plan, which are required supplementary information (RSI) that supplements the basic financial statements.
Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic 301
To the City Council
financial statements, and other knowledge we obtained during our audit of the basic financial statements.
We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
We have been engaged to report on the combining and individual fund financial statements which accompany the financial statements but are not RSI. With respect to the supplementary information, which is identified in the table of contents of the financial statements, accompanying the financial statements, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements.
We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We are not engaged to report on the introductory and statistical sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it. * * * *
This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.
December 30, 2021
302
Description (Nature)
of Audit Difference
To accrue payable for rail signal capital project. 79,994 $ (79,994) $ 79,994 $ Net Unadjusted Audit Differences 79,994 (79,994) 79,994 Financial Statement Caption Totals-Governmental Activities 332,6 $ 37,481,728 40,764 $ 298,755,253 $ 8,280,464 $ Net Audit Differences as % of F/S Captions 0.02% (0.21%) 0.03% 0.00% To accrue payable for rail signal capital project. 79,994 $ (79,994) $ 79,994 $ 79,994 $ Net Unadjusted Audit Differences 79,994 (79,994) 79,994 79,994 Financial Statement Caption Totals-General Fund 300,108 $ 80,671 $ 219,437 $ 6,181,989 Net Audit Differences as % of F/S Captions 26.66% (99.16%) 36.45% 1.29%
CITY OF AMERICAN CANYON
SUMMARY OF UNADJUSTED AUDIT DIFFERENCES
YEAR ENDED JUNE 30, 2021
Financial Statements Effect -
CITY CAPITAL PROJECTS FUND
GOVERNMENTAL ACTIVITIES
Amount of Overstatement (Understatement) of:
Total
Assets
Total
Liabilities
Total Net
Position/Fund
Balance
Total Change
Net
Position/Fund
Balance
303
550 Howe Avenue, Suite 210
Sacramento, California 95825
Telephone: (916) 564-8727
FAX: (916) 564-8728
INDEPENDENT ACCOUNTANTS’ REPORT ON AGREED-UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT TESTING
To the City Council
City of American Canyon, California
We have performed the procedures enumerated below to the accompanying calculation of the Appropriation Limit of the City of American Canyon (the City) for the year ended June 30, 2021. The City and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) have agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The City’s management is responsible for the Appropriations Limit calculation. 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 performed and our findings were as follows:
1. We obtained the City’s calculation of the 2020/2021 appropriations limit and compared the limit and annual adjustment factors included in the calculation to the limit and annual adjustment factors that were adopted by resolution of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. We compared the methodology used to determine the cost-of-living adjustment component to Article XIIIB which states that the City may annually adjust the component for either the change in California per capita personal income or, the percentage change in the City’s assessed valuation which is attributable to non-residential new construction. We recalculated the factor based on the above information.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the methodology used to determine the population adjustment component to Article XIIIB which states that the City may annually choose to adjust the component for either the change in population in the County in which the City is located, or the change in population within the unincorporated area of the County in which the City is located. We recalculated the factor based on the above information.
Finding: The City rounded the population adjustment factor used to 0.9920% rather than using the correct factor of 0.9922%.
Recommendation: We recommend the City revised the population factor used and have the City Council reapprove the 2020/2021 appropriations limit calculation and any future calculations based on the 2020/2021 calculation.
304
To the City Council
4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Calculation to the prior year appropriations limit adopted by the City Council for the prior year.
Finding: No exceptions were noted as a result of our procedures.
5. We recalculated the 2020/2021 Appropriation Limit by multiplying the product of the two above factors by the 2019/2020 appropriation limit.
Finding: See item 3 finding and recommendation.
6. We compared the City’s actual revenues to the computed appropriation limit for fiscal year 2020/2021.
Finding: For the 2020/2021 fiscal year, the City’s actual revenues subject to the appropriations limit did not exceed the appropriation limit adopted by resolution of the City Council.
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 AICPA. We are 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 appropriations limit calculation. Accordingly, we do not express such an opinion or conclusion. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by Article XIII-B of the California Constitution.
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 use of the City Council and management of the City and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited.
December 30, 2021
305
APPENDIX A
CITY OF AMERICAN CANYON
APPROPRIATION LIMIT CALCULATION
Year Ended June 30, 2021
APPROPRIATION LIMIT
ADOPTED BY CITY:
Recorded in Final 2020/2021 Budget 19,762,460 $
APPROPRIATION LIMIT
COMPUTATION PER REVIEW:
2019/2020 Appropriation Limit 19,205,500 $
Cost of living factor:
Change in California per capita income 1.0373
Population Adjustment Factor:
Population change in City of American Canyon 0.9922
Auditor computed limitation 19,766,301
Variance $ (3,841)
306
550 Howe Avenue, Suite 210
Sacramento, California 95825
Telephone: (916) 564-8727
FAX: (916) 564-8728
INDEPENDENT ACCOUNTANTS’ REPORT ON AGREED-UPON PROCEDURES
APPLIED TO APPROPRIATIONS LIMIT TESTING
To the Fire Protection District Board
City of American Canyon Fire Protection District
City of American Canyon, California
We have performed the procedures enumerated below to the accompanying calculation of the Appropriation Limit of the City of American Canyon Fire Protection District (the District) for the year ended June 30, 2021. The District and the League of California Cities (as presented in the publication entitled Agreed-Upon Procedures applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution) have agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose to assist the District in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The District’s management is responsible for the Appropriations Limit calculation. 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 performed and our findings were as follows:
1. We obtained the District’s calculation of the 2020/2021 appropriations limit and compared the limit and annual adjustment factors included in the calculation to the limit and annual adjustment factors that were adopted by resolution of the Fire Protection District Board.
Finding: No exceptions were noted as a result of our procedures.
2. We compared the methodology used to determine the cost-of-living adjustment component to Article XIIIB which states that the District may annually adjust the component for either the change in California per capita personal income or, the percentage change in the District’s assessed valuation which is attributable to non-residential new construction. We recalculated the factor based on the above information.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the methodology used to determine the population adjustment component to Article XIIIB which states that the District may annually choose to adjust the component for either the change in population in the County in which the District is located, or the change in population within the unincorporated area of the County in which the District is located. We recalculated the factor based on the above information.
Finding: No exceptions were noted as a result of our procedures. 307
To the Fire Protection District Board
4. We compared the prior year appropriations limit presented in the accompanying Appropriations Limit Calculation to the prior year appropriations limit adopted by the Fire Protection District Board for the prior year.
Finding: No exceptions were noted as a result of our procedures.
5. We recalculated the 2020/2021 Appropriation Limit by multiplying the product of the two above factors by the 2019/2020 appropriation limit.
Finding: No exceptions were noted as a result of our procedures.
6. We compared the District’s actual revenues to the computed appropriation limit for fiscal year 2020/2021.
Finding: For the 2020/2021 fiscal year, the District’s actual revenues subject to the appropriations limit did not exceed the appropriation limit adopted by resolution of the Fire Protection District Board.
We were engaged by the District to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the AICPA. We are 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 Appropriations Limit Calculation. Accordingly, we do not express such an opinion or conclusion. No procedures have been performed with respect to the determination of the Appropriations Limit for the base year, as defined by Article XIII-B of the California Constitution.
We are required to be independent of the District 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 use of the Board of Directors and management of the District and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. However, this report is a matter of public record and its distribution is not limited.
December 30, 2021
308
APPENDIX A
CITY OF AMERICAN CANYON FIRE PROTECTION DISTRICT
APPROPRIATION LIMIT CALCULATION
Year Ended June 30, 2021
APPROPRIATION LIMIT
ADOPTED:
Recorded in Final 2020/2021 Budget 13,219,399 $
APPROPRIATION LIMIT
COMPUTATION PER REVIEW:
2019/2020 Appropriation Limit 12,844,344 $
Cost of living factor:
Change in California per capita income 1.0373
Population Adjustment Factor:
Population change in City of American Canyon 0.9922
Auditor computed limitation 13,219,399
Variance $ 0
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David Oro - City Council Member Committee Report
Committee Name: Napa Valley Tourism Business Improvement District (AmCan TBID) Meeting Date: January 6, 2022
Topics of Discussion:
Received reports and updates from Visit Napa Valley, AmCan Hotels and the City of American Canyon. Some notes:
● Lodging and Tourism levels are coming up but not near 2019 levels, closer to 2013 Levels.
● ToT collections are up
● From the Chamber of Commerce: Planning three “Meet Me in the Streets” in 2022, as well as another event for the 30th Anniversary of the founding of the City of American Canyon as a City.
● As a reminder, please review our tourist website www.exploreamcan.com ● AC Chamber is hosting a job fair January 26, 2022 @ 1:00 PM - 6:00 PM (PST) at Adobe Lumber. Registration here
https://amcanchamber.chambermaster.com/eventregistration/register/3846 ● AC Hotels - Omicron impacts: staffing is hard, lots of cancellations to start the year. ● North Bay Medical Facility at Napa Junction will open by May. ● Discussed TBID Goals and objectives
○ Read and discussed Joe Nabrynski’s comments about TBID supporting the Reindeer Run. Will follow-up
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● American Canyon Dreaming - see notes and flyer below.
Community Events and Other Activities
Napa Valley Dreaming campaign with a spotlight on American Canyon Meeting Date: November 12, 2022
Attended the Visit Napa Valley is town-focused Napa Valley Dreaming campaign with a spotlight on American Canyon in January. January is #AmCanDreaming, a month dedicated to celebrating the town at the southern tip of Napa Valley, American Canyon, and the outdoor attractions, hotels, and restaurants that call it home. Held at the Napa Valley Welcome Center on First Street, the campaign showcases American Canyon as a marketing and social media blitz throughout the month of January, showcasing the gateway to the Napa Valley.
See flyer below for more information and at https://www.visitnapavalley.com/ 311
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CITY COUNCIL COMMITTEE REPORT
1/14/2022 Page 1 of 2
Meeting Date: January 18, 2022 Submitted By: Mark Joseph, Council member Committee Name: Climate Action Committee
Attended the December meeting. Re-elected our Chair/Vice-Chair and confirmed our meeting dates for 2022; heard a presentation on ABAG’s parking policy handbook; clarified our workplan for 2022 (I pushed for a presentation from PGE—do we have Grid Capacity to handle increased electrical demand?) and heard an update on the GHG Inventory study (we’re on schedule).
Also, the Council’s Ad Hoc Committee on Climate Change met to work out our Mission/Vision and Strategy statement, as well as draft the Emergency Resolution. It is now ready for Council consideration for Feb. 1.
Committee Name: NVUSD 2X2 Committee
Attended a brief but promising meeting with our School District counterparts. We discussed areas where the City and District can collaborate to our mutual benefits. Staff will be working on the details, and we will meet again in February.
Committee Name: Council Finance Subcommittee
Attended my last meeting as a member. We heard the preliminary year end financials for FY 2020-
21. (Things turned out better than we expected). We also received a demonstration of the Open Gov program—very flexible reporting tool. Also learned that Finance has completed its work developing what our total Deferred Maintenance price tag for Parks and Streets. This is a critical first step towards addressing our older streets and parks. The big reveal will be at our Council Retreat later this month.
Committee Name: City Activities and Events
Attended the Visit Napa Valley (VNV) event at their Welcome Center, in which American Canyon will be the highlighted City for January. This was also my first visit to their Welcome Center—very impressive. Heard a presentation from “On the Move” program administrators. They are housed in the new Napa Junction elementary school. Very exciting to hear about all their program elements. City and Parks Foundation members met at Wetlands Edge Park to consider potential sites for public art. ACCPF is spearheading an effort to raise the funds. City help may also be needed. Was requested to be interviewed by the Grand Jury, but I can’t comment on the subject matter or remarks at this time. Attended the TBID meeting and received updates on VNV, our Welcome Center and future goals and objectives.
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CITY COUNCIL COMMITTEE REPORT
1/14/2022 Page 2 of 2
Committee Name: Community Activities and Events
Attended Fil-Am’s Parol Festival at Shenandoah Park. There were four entries and all very attractive (especially the Covid-19 one!). As usual, excellent food and good drink for a cold day! Went to the Farm Bureau’s Annual Holiday Event at their offices in Napa. Helped with the Kiwanis Food Pantry distribution, and we have started planning for our annual Crab Feed fundraiser—it will be a drive-through again. Went to the Arts Foundation’s Board Retreat—we will have a new President (Clarence Mamaril) and a new direction—focus on outdoor activities; build a better partnership with the High School, and provide expanded member benefits, both financial and social. Attended the monthly Napa Working Families Coalition—heard about infrastructure funding opportunities at the State and National levels, as well as an update on the Coalition’s activities.
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