Agenda — City Council/Successor Agency/Public Finance Authority, September 14, 2023

CITY OF AVENAL
“Pistachio Capital of the World®”

REGULAR CITY COUNCIL/SUCCESSOR AGENCY/PFA MEETING
SEPTEMBER 14, 2023; 5:00 P.M.

AVENAL THEATER & EVENT CENTER, 233 E. KINGS ST., AVENAL, CA VIA ZOOM VIDEO/WEB CONFERENCING:

Web Link: bit.ly/AvenalCouncil or use https://us02web.zoom.us/j/87243440488 Or by calling +1 669 900 6833 and use meeting ID 872 4344 0488 to join.

Study Session: 4:30pm FY 2019/2020 Audit and Update on FY 2021-2022 Audits – Price Paige & Co.

LAST ORDINANCE: 2022-06 CITY LAST RESOLUTION: 2023-35
(SA) LAST RESOLUTION: 2023-02 PFA LAST RESOLUTION: 2023-01 AGENDA

1. CALL TO ORDER & PLEDGE OF ALLEGIANCE:

2. ROLL CALL: Councilmembers: Louis Gravelle, Ricardo Verdugo, Pablo Hernandez, Mayor Pro Tem Alejandro Ramirez; Mayor Alvaro Preciado.

CITY CLERK:

Government Code Section 54952.3: The members of the City Council/Successor Agency are entitled to receive a total of $300.00 per month because of being elected to the City Council. They receive no other compensation for sitting as a member of Successor Agency.

3. CLOSED SESSION: (City/Successor Agency):

A. Conference with Labor Negotiator(s) (Government Code § 54957.6).

It is the intent of this governing body to meet in Closed Session to review its position and to instruct its designated representatives:

Designated representatives: City Employees Bargaining Units 1-5 / APOA B. PENDING LITIGATION (Government Code § 54956.9).
a. Conference with legal counsel – ANTICIPATED LITIGATION (Government Code § 54956.9(d)).

Significant exposure to litigation (Government Code § 54956.9(d)(2)).

Number of potential cases is: 1
Facts and circumstances clearly known to potential plaintiff (if any) that might result in litigation (Government Code § 54956.9(e)(2)): none.
b. Conference with legal counsel – PENDING LITIGATION (Government Code § 54956.9).

Deciding whether or not basis exists for closed-session for anticipated litigation (Government Code § 54956.9(d)(3)). Number of potential cases is: 1
C. Conference with Real Property Negotiator(s) (Government Code § 54956.8).

It is the intent of this governing body to meet in Closed Session to confer with its real property negotiator(s) concerning the purchase, sale, exchange, or lease of real property by or for this agency as follows:

1. Property Description: APN: 038-290-028-000
Negotiator(s): City Manager/City Attorney
Party with whom negotiating: Ross Family Properties LLC.

Instructions to negotiator concerning: Terms of Payment.

2. Property Description: APN: 040-320-009-000; & 040-320-014-000 Negotiator(s): City Manager / City Attorney.

Party with whom negotiating: CrisCom Company.

Instructions to negotiator concerning: Terms of Payment.

D. Personnel (Government Code §54957(b)).

Consider Public Employee Performance Evaluation for the Position of:
• Chief of Police

4. PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES:

Any person may directly address the Council/Agency at this time on any item on the agenda or on any other items of interest to the public that is within the subject matter jurisdiction of the City Council/Successor Agency. State Law prohibits any member of the Council/Agency from commenting or acting on matters not on the agenda. Three (3) minutes are allowed per person.

Sept 14, 2023 Pg. 1

5. CONSENT CALENDAR:

All items listed under the consent calendar are routine and enacted by one motion: (Action).

A. Consider City of Avenal/Successor Agency’s Approval of Minutes for August 10, 2023 & August 17, 2023.

B. Ratify partnership agreement, "Project Reachout," between Avenal Animal Shelter and the Arizona Humane Society: (Motion).

C. Consider Ratifying the 2023 Bilingual Pay Meet and Confer, Side Letter, with the Avenal Police Officer's Association: (Resolution 2023-36).

6. MAYOR & COUNCIL MEMBER/ SUCCESSOR AGENCY/ ITEMS FOR CONSIDERATION:

A. Consider adopting temporary City Council Rules of Procedure and Decorum: (Discussion/Action).

B. Consider amending meeting Public Comment procedure, and adopting a comment card

7. ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

A. Activity Reports:

1. Public Works/Code Enforcement/Animal Control Departments Activity Report: Rob Williams, Public Works Director.

2. IT Department Activity Report: Humberto Bermudez, IT Manager.

3. Recreation Department Activity Report: Shelia Verdugo, Community Activities Supervisor.

B. Special Presentations/Reports:
1) None.

8. PUBLIC HEARING(s):

A. None.

9. OLD BUSINESS:

A. None.

10. NEW BUSINESS:

A. Consider ratification and formal adoption of the Fiscal Year 2019-2020 Financial Audit and corresponding Corrective Action Plans, Resolution 2023-37: (Discussion/Action).

B. Consider Extending the Agreement with Sotomayor & Associates LLP for the FY 2021 & 2022, Resolution 2023-38: (Discussion/Action).

11. CORRESPONDENCE/ANNOUNCEMENTS/CLOSING COMMENTS:

Any Council member may request an item be placed on a future agenda, provided that a simple majority also support adding said item. Discussion or action on any item not on the current agenda is strictly prohibited. Closing comments are intended for Council members to report attendance of any special events and pertinent information back to the public.
• Upcoming/Future Agenda Items to Consider.
• Correspondence/Announcements/Information/Closing Comments.

12. ADJOURNMENT:
1) In compliance with the Americans with Disability Act, if you need special assistance to participate in this meeting, please contact the City Clerk’s Office (559) 386-5766. Avenal Theater & Event Center, 233 East Kings Street Avenal, CA 93204. Notification 48 hours prior to the meeting will enable the city to make reasonable arrangements to ensure accessibility to this meeting [28 CFR 35.02.35.1044 AA Title II].
2) Materials related to an item on this Agenda submitted to the [Council/ Authority] after distribution of the agenda packet are available for public inspection in the [City Clerks] office at 919 Skyline Blvd., Avenal, CA 93204 during normal business hours.

I certify this Agenda of the City of Avenal City Council workshop is to be posted at the following locations: 1) City Council Chambers, Avenal Theater 233 E. Kings St.; 2) City Hall 919 Skyline Blvd.; 3) Avenal Lumber, 600 Skyline Blvd.; and 4) T&T Market, 801 Skyline Blvd. Avenal CA 93204 on, September 11, 2023.
__ /s/ Maria Ortiz
Maria Ortiz, City Clerk
Sept 14, 2023 Pg. 2

CIUDAD DE AVENAL
"Capital Mundial® del Pistacho"
REUNIÓN ORDINARIA DEL CONCEJO MUNICIPAL / AGENCIA
SUCESORA / PFA EL 14 DE SEPTIEMBRE DE 2023; 5:00 P.M.

AVENAL THEATER & EVENT CENTER, 233 E. KINGS ST., AVENAL, CA A TRAVÉS DE VIDEO/CONFERENCIA WEB DE ZOOM:

Enlace web: bit.ly/AvenalCouncil o utilizar https://us02web.zoom.us/j/87243440488 O llamando al +1 669 900 6833 y use el ID de reunión 872 4344 0488 para unirse.

Sesión de estudio: 4:30 pm Auditoría del año fiscal 2019/2020 y actualización sobre las auditorías del año fiscal 2021-2022 - Price Paige & Co.

ÚLTIMA ORDENANZA: 2022-06 CIUDAD ÚLTIMA RESOLUCIÓN: 2023-35 (SA) ÚLTIMA RESOLUCIÓN: 2023-02 PFA ÚLTIMA RESOLUCIÓN: 2023-01 AGENDA

1. LLAMADO AL ORDEN Y JURAMENTO DE LEALTAD:

2. PASE LISTA: Concejales: Louis Gravelle, Ricardo Verdugo, Pablo Hernández, Alcalde interino Alejandro Ramírez; Alcalde Álvaro Preciado.

SECRETARIO MUNICIPAL:

Sección 54952.3 del Código de Gobierno: Los miembros del Concejo Municipal / Agencia Sucesora tienen derecho a recibir un total de $ 300.00 por mes debido a haber sido elegidos para el Concejo Municipal. No reciben ninguna otra compensación por sentarse como miembros de la Agencia sucesora.

3. SESIÓN CERRADA: (Ciudad/Agencia sucesora):

La intención de este órgano rector es reunirse a puerta cerrada para revisar su posición e instruir a sus representantes designados: Cualquier persona puede dirigirse directamente al Consejo/Agencia en este momento sobre temas de interés relacionados con la sesión privada.

A. Conferencia con Negociador(es) Laboral(es) (Código de Gobierno § 54957.6).

Es la intención de este órgano rector reunirse en sesión cerrada para revisar su posición e instruir a sus representantes designados:

Representantes designados: Unidades de negociación de empleados de la ciudad 1-5 / APOA B. LITIGIO PENDIENTE (Código de Gobierno § 54956.9).
a. Conferencia con asesor legal – LITIGIO ANTICIPADO (Código de Gobierno § 54956.9(d)).

Exposición significativa a litigios (Código de Gobierno § 54956.9(d)(2)). El número de casos potenciales es: 1
Hechos y circunstancias claramente conocidos por el demandante potencial (si corresponde) que podrían resultar en litigio (Código de Gobierno § 54956.9 (e) (2)): ninguno. b. Conferencia con asesor legal – LITIGIO PENDIENTE (Código de Gobierno § 54956.9).

Decidir si existe o no base para una sesión cerrada para litigios anticipados (Código de Gobierno § 54956.9 (d) (3)). El número de casos potenciales es: 1
C. Conferencia con Negociador(es) de Bienes Inmuebles ( Código de Gobierno § 54956.8).

Es la intención de este órgano rector reunirse en sesión cerrada para consultar con su(s) negociador(es) de bienes inmuebles sobre la compra, venta, Intercambio o arrendamiento de bienes inmuebles por o para esta agencia de la siguiente manera:

1. Descripción de la propiedad: APN: 038-290-028-000
Negociador(es): Administrador de la Ciudad/Abogado de la Ciudad Parte con la que negocia: Ross Family Properties LLC.

Instrucciones al negociador sobre: Condiciones de pago.

2. Descripción de la propiedad: APN: 040-320-009-000; & 040-320-014-000 Negociador(es): Administrador de la Ciudad / Abogado de la Ciudad.

Parte con la que negocia: CrisCom Company.

Instrucciones al negociador sobre: Condiciones de pago.

D. Personal (Código de Gobierno §54957(b)).

Considere la evaluación del desempeño de los empleados públicos para el puesto de:
• Jefe de Policía

4. COMENTARIOS PÚBLICOS/ANUNCIOS Y APARICIONES NO PROGRAMADAS:

Cualquier persona puede dirigirse directamente al Consejo / Agencia en este momento sobre cualquier tema de la agenda o sobre cualquier otro tema de interés para el público que esté dentro de la jurisdicción del Concejo Municipal / Agencia sucesora.

La ley estatal prohíbe a cualquier miembro del Consejo / Agencia comentar o actuar sobre asuntos que no están en la agenda. Se permiten tres (3) minutos por persona.

Sept 14, 2023 Pg. 3

5. CALENDARIO DE CONSENTIMIENTO:

Todos los elementos enumerados en el calendario de consentimiento son rutinarios y promulgados por una moción: (Acción).

A. Considere la aprobación de las actas de la Ciudad de Avenal / Agencia Sucesora para el 10 de agosto de 2023 y el 17 de agosto de 2023.

B. Ratificar el acuerdo de asociación, "Project Reachout", entre Avenal Animal Shelter y Arizona Humane Society: (Moción).

C. Considere ratificar la reunión bilingüe de pago y consulta de 2023, carta al lado, con la Asociación de Oficiales de Policía de Avanal: (Resolución 2023-36).

6. ALCALDE Y CONCEJAL / AGENCIA SUCESORA / TEMAS A CONSIDERAR:

A. Considere la adopción temporal de Reglas de Procedimiento y Decoro del Concejo Municipal: (Discusión / Acción).

B. Considere enmendar el procedimiento de reunión de comentarios públicos y adoptar una tarjeta de comentarios

7. INFORMES DE ACTIVIDADES/PRESENTACIONES ESPECIALES E INFORMES DE COMITÉS:

A. Informes de actividad:

1. Informe de Actividades de los Departamentos de Obras Públicas/Aplicación de Códigos/Control de Animales: Rob Williams,
Director de Obras Públicas.

2. Informe de Actividades del Departamento de IT: Humberto Bermúdez, Gerente de TI.

3. Informe de Actividades del Departamento de Recreación: Shelia Verdugo, Supervisora de Actividades Comunitarias.

B. Presentaciones especiales/informes:
1) Ninguno.

8. AUDIENCIA(s) PÚBLICA(s):

A. Ninguno.

9. NEGOCIO ANTIGUO:

A. Ninguno.

10. NUEVOS NEGOCIOS:

A. Considerar la ratificación y adopción formal de la Auditoría Financiera del Año Fiscal 2019-2020 y los Planes de Acción Correctiva correspondientes, Resolución 2023-37: (Discusión/Acción).

B. Considere extender el Acuerdo con Sotomayor & Associates LLP para el año fiscal 2021 y 2022, Resolución 2023-38: (Discusión / Acción).

11. CORRESPONDENCIA/ANUNCIOS/COMENTARIOS FINALES:

Cualquier miembro del Consejo puede solicitar que un punto se incluya en un orden del día futuro, siempre que una mayoría simple también apoye la adición de dicho tema. La discusión o acción sobre cualquier tema que no esté en la agenda actual está estrictamente prohibida. Los comentarios finales están destinados a que los miembros del Consejo informen al público sobre la asistencia a cualquier evento especial y la información pertinente. • Temas del programa próximos/futuros que han de examinarse. • Correspondencia/Anuncios/Información/Comentarios finales.

12. APLAZAMIENTO:
1) En cumplimiento con la Ley de Estadounidenses con Discapacidades, si necesita asistencia especial para participar en esta reunión, comuníquese con la Oficina del Secretario de la Ciudad (559) 386-5766. Avenal Theater & Event Center, 233 East Kings Street Avenal, CA 93204. La notificación 48 horas antes de la reunión permitirá a la ciudad hacer arreglos razonables para garantizar la accesibilidad a esta reunión [28 CFR 35.02.35.1044 AA Título II].
2) Los materiales relacionados con un tema de esta Agenda presentados al [Consejo/Autoridad] después de la distribución del paquete de agenda están disponibles para inspección pública en la oficina de [Secretarios de la Ciudad] en 919 Skyline Blvd., Avenal, CA 93204 durante el horario comercial normal.

Certifico que este taller de Agenda del Ayuntamiento de la Ciudad de Avenal se publicará en los siguientes lugares: 1) Cámaras del Concejo Municipal, Teatro Avenal 233 E. Kings St.; 2) Ayuntamiento 919 Skyline Blvd.; 3) Avenal Lumber, 600 Skyline Blvd.; y 4) T&T Market, 801 Skyline Blvd. Avenal CA 93204 el 11 de septiembre de 2023. __ /s/ María Ortiz
Maria Ortiz, Secretaria Municipal
Sept 14, 2023 Pg. 4

CITY OF AVENAL
“Pistachio Capital of the World®”

REGULAR CITY COUNCIL/SUCCESSOR AGENCY/PFA MEETING
AUGUST 10, 2023; 5:00 P.M.

AVENAL THEATER & EVENT CENTER, 233 E. KINGS ST., AVENAL, CA VIA ZOOM VIDEO/WEB CONFERENCING:

Web Link: bit.ly/AvenalCouncil or use https://us02web.zoom.us/j/87243440488 Or by calling +1 669 900 6833 and use meeting ID 872 4344 0488 to join.

MINUTES
CALL TO ORDER & PLEDGE OF ALLEGIANCE: by Mayor Preciado at 5:02 p.m.

ROLL CALL: Councilmen’s: Luis Gravelle, Ricardo Verdugo, Pablo Hernandez Mayor Alvaro Preciado.

ABSENT: Mayor Pro Tem Ramirez.

STAFF: Lopez, Ortiz, Price, Bermudez, Williams, Nevarez, Yang.

LEGAL COUNCEL: Moses Diaz.

CITY CLERK:

The City Council went into Closed Session at 5:23 p.m.

CLOSED SESSION: (City/Successor Agency):

A. Conference with Labor Negotiator(s) (Government Code § 54957.6).

It is the intent of this governing body to meet in Closed Session to review its position and to instruct its designated representatives:

Designated representatives: City Employees Bargaining Units 1-5 / APOA.

B. PENDING LITIGATION (Government Code § 54956.9).
a. Conference with legal counsel – ANTICIPATED LITIGATION (Government Code § 54956.9(d)).

Significant exposure to litigation (Government Code § 54956.9(d)(2)).

Number of potential cases is: 1.

Facts and circumstances clearly known to potential plaintiff (if any) that might result in litigation (Government Code § 54956.9(e)(2)): none.
b. Conference with legal counsel – PENDING LITIGATION (Government Code § 54956.9).

Deciding whether or not basis exists for closed session for anticipated litigation (Government Code § 54956.9(d)(3)).

Number of potential cases is: 1.

C. Conference with Real Property Negotiator(s) (Government Code § 54956.8).

Property Description: APN: 038-290-028-000 Negotiator(s): City Manager/City Attorney Party with whom negotiating Avenal Sand Drags Association, Inc.

Instructions to negotiator concerning:

Mayor Preciado re-opened the City Council meeting at 6:58 p.m. with nothing to report.

PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES:

AGENDA ITEM NO. 5. – A.

Sept 14, 2023 Pg. 5
Joint Meeting City Council/Successor Agency/PFA – August 10, 2023

Page 2 of 4 ends

Jesus Mendez, ex-employee of City of Avenal wanted to share a bit of information, a lot of correspondence with City Manager. Mr.

Mendez has been waiting for something back from the city regarding his grievance. Mr. Mendez had over 2-hour conversation with Mr. Lopez and Mayor Preciado at Mr. Mendez residence and made him feel that there was, you know, the fact that they showed up at his residence and took a statement from him after Mr. Mendez was fired, told Mr. Mendez that there were some concerns. Mr. Mendez is concerned because he has not heard anything back and meanwhile, he has a life, family, and bills to pay. Mr. Mendez is left no response and has called Antony Lopez, City Manager many times recently and Ms. Maria “Angie Ortiz, City Clerk returned calls and Mr. Mendez thanked her for that.

Mr. Mendez’s continues that he realizes that it takes time, but meanwhile his family is suffering because of poor decisions made by Chief Robert Nevarez, and Captain Lenny Lujan. Mr. Mendez know that some of the information is coming to the City Council, but Mr. Mendez is getting nothing in return. So, it's just it's concerning. Also, there are residents that support him that day from the City of Avenal in the eight months employed by the city and that is the impact he had in the community. If Mr. Mendez could finish his career like his hopes were where that that impact would be much bigger. Chief Robert Nevarez knows this because Chief Nevarez's gave Mr.

Mendez a letter of commendation, put him in charge of the Citizens Police Academy, Avenal Explorers Program and the Santa Sledge giving toys to the community. Mr. Mendez did it for the community that the City Council represent, and he can't even get a call back.

Mr. Mendez thought much more of this administration and realizing the City Council cannot respond to any questions. Mr. Mendez would like a response to anything instead of just leaving him stressed knowing that he did nothing wrong, and his career after 18 years is gone. Also, meanwhile, the Avenal Police Department is hiring retirees from Fresno PD. Mr. Mendez thanked the City Council for their time.

Moses Diaz, City Attorney states that there was a delay of certain documents that were forwarded to his office for about 10 days. So, Public Interest Law Firm a Professional Corporation did finish completing review of the documents provided by Mr. Mendez.

Therefore, Staff will be following up soon. City Attorney Diaz apologize for the delay.

Sergio Ramirez, resident of Avenal stated that he known Mr. Mendez since he was a kid and he raised cattle. Mr. Ramirez would like the City Council to investigate and see if Mr. Mendez was fired with justice or not. Also, he has 100-signatures in support of Mr.

Mendez and more.

City Manager Lopez is requesting the City Council to consider moving item 7-B. Special Presentation: 1) Avenal Regional Landfill report; 2) MidValley Disposal report after Item 5. Consent Calendar.

The City Council was in consensus to move up items to be considered.

CONSENT CALENDAR:

All items listed under the consent calendar are routine and enacted by one motion: (Action).

A. Consider City of Avenal/Successor Agency’s Approval of Minutes for July 13, 2023 & July 31, 2023.

B. Professional Service Contract with Workforce Investment Board of Tulare County Regarding the Consulting Services for Community and Economic Development in the Kings-Tulare Valley, California Economic Resilience Fund (CERF) Subregion: (Approval by Motion).

C. Consider Approving a Transfer of Ownership, and Waiver, Release, and Indemnity Agreement in the Retirement of a Police Service Dog from the Avenal Police Department (Resolution 2023-34).

D. Ratify Tentative Agreement with Avenal Police Officer’s Association for Cost-of-Living Adjustments (Resolution 2023-35).

RESOLUTION 2023-34: A RESOLUTION APPROVING A TRANSFER OF OWNERSHIP, AND WAIVER, RELEASE,

AND INDEMNITY AGREEMENT IN THE RETIREMENT OF A POLICE SERVICE DOG FROM THE AVENAL POLICE DEPARTMENT. Councilman Gravelle approved, seconded by Councilman Hernandez, and motion caried.

RESOLUTION 2023-35: Resolution of the City Council of the City of Avenal Ratifying a Tentative Agreement with the Avenal Police Officer’s Association (APOA) For FY 2023/2024 & FY 2024/2025. Councilman Gravelle approved, seconded by Councilman Hernandez, and motion caried.

Council Member/Successor Agency Member Gravelle motioned to approve Consent Calendar, seconded by Councilman/Successor Agency Member Hernandez, and motion carried.

Roll Call Vote:

AYES: Gravelle, Hernandez, Verdugo, Preciado.

NOES: None.

ABSENT: Ramirez.

ABSTAIN: None.

Sept 14, 2023 Pg. 6
Joint Meeting City Council/Successor Agency/PFA – August 10, 2023

Page 3 of 4 ends

7. ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

B. Special Presentations/Reports:
1) Avenal Reginal Landfill Report: George Anderson, Landfill Site Manager.

George Anderson, Landfill Site Manager reported the following: 1) Q2. 96,737 tons inbound; 2) Divergent rate that cover material for alternative daily cover about 12,500 tons, recycled 2400 tons of concrete, and 3155 tons of road base which used to renew their road surfacing; 3) AB1383 zero green waste; 4) Still have commodity of wood chips that we're purchased; 5) due to rain they have a lot of vegetation growth and delayed some of the wood chips going out on the western slope; 6) diversion rate of 31,555 tons and diverted metals 53 tons; 8) New Cell 6. A – it is to maximum height; and 7) Also, waiting for the Water Board approval on Cell 6B and final walkthrough on the August 16th and the City Council is welcomed. The Landfill has 25 acres to work and looking good.

Mayor Preciado asked regarding a fire at the Landfill. Mr. Anderson mentioned that the Fire Department had it under control quickly, and glad the community cares and calls.
2) MidValley Disposal Quarterly Report: Thomas Hamon, Recycle Program Manager.

Isaac Kulikoff, District Manager MidValley Disposal introduced Thomas Hamon, Recycle Program Manager. Thomas Hamon, Recycle Program Manager reported the following: 1) Refuse 2266.04 tons; 2) Organics 550.53 tons; 3) Recycling 384.49 tons; SB 1383 continue to educate community; and Events – Pistachio Festival, Operation Gobble, High School Food Dries and Holiday Magic.

MAYOR & COUNCIL MEMBERS/ SUCCESSOR AGENCY/ITEMS FOR CONSIDERATION:

A. Discussion on Major Projects List & Hirings:

City Manager Lopez went over the Major Projects List & Hirings with the City Council B. Consider Changing the Date of the September 28, 2023, Regular City Council Meeting to accommodate Fresno Area Hispanic Foundation event on same day:

City Manager Lopez mentioned that The Fresno Area Hispanic Foundation (FAHF) has reached out to City Staff requesting to host a special event for community members and business owners in Avenal. The event will be a resource fair coupled with raffles and prizes for participants. The FAHF intends to provide cash prizes and grants to local businesses that could total over $10-15k to the community. Tim Rios is a major sponsor of the FAHF on behalf of Wells Fargo Bank and intends to be at the event in person to hand out the prizes. The FAHF is requesting the evening of September 28, 2023, to host the event. This date conflicts with the City’s second council meeting scheduled for that date.

Staff is recommending, a discussion to either move the September 28, 2023, City Council meeting to another date, or cancel said meeting. Staff is also working with Reef-Sunset Unified School District to potentially host the event at one of the high school gyms to accommodate the large crowd that is expected.

Councilman Gravelle motioned to reschedule City Council meeting to September 27, 2023, seconded by Councilman Hernandez and motioned carried.

Roll Call Vote:

AYES: Gravelle, Hernandez, Verdugo, Preciado.

NOES: None.

ABSENT: Ramirez.

ABSTAIN: None.

C. Discussion on filling two (2) Vacant Planning Commission Seats – Councilmembers Gravelle & Verdugo City Manager Lopez reported that as of August 7, 2023, the Planning Commission has two vacancies. Former Chair, Lymari Larios, handed her resignation due to moving out of the City on July 28, 2023. Commissioner Donna Elliott has also indicated her intention to step down from the commission effective August 8, 2023. This creates two vacancies in the Planning Commission, which will require two new appointments by the Council per the rotation, Councilmembers Gravelle and Verdugo have the next opportunities to appoint a commissioner. Staff can advertise the vacancies and bring any new applications back for Council’s consideration at the September meetings.

Councilman Gravelle & Councilman Verdugo would like Staff to advirties.

Sept 14, 2023 Pg. 7
Joint Meeting City Council/Successor Agency/PFA – August 10, 2023

Page 4 of 4 ends

ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

A. Activity Reports

1. Community & Economic Development Department Report: Kao Nou Yang, Director of Community & Economic Development.

Kao Nou Yang, Director of Community & Economic reported the following: 1) Planning Division; 2) Long Range Planning; 3) Building Division;4) Economic Development CrissComm; and 5) Programs – First Time Buyers, Home Rehabilitation, Accessory Dwelling (ADU) Program.

2. Police Department Report: Chief Robert Nevarez
Chief Robert Nevarez reported the following: 1) Leadership Stability; 2) Recruit and Retain the Best; 3) International Model of Community Trust; 4) Amongst the safest cities in America; 5) Embrace wellness amongst our employees and 6) Internal Affairs end of year report.

Mayor Preciado called for 5-minute recess and commended meeting.

PUBLIC HEARING(s):

Joint Hearing of the City of Avenal Successor Agency RDA Trust Obligations Fund/Public Finance Authority:

A. None.

OLD BUSINESS:

A. None.

NEW BUSINESS:

A. None.

CORRESPONDENCE/ANNOUNCEMENTS/CLOSING COMMENTS:

City Clerk Ortiz reported the following: 1) Save the Date for City County Coordinating meeting. RSVP with City Clerk - August 23, 2023, and location the City of Corcoran.

City Manager Lopez reported the following: 1) County Coordinating meeting; 2) Pat Sanchez last day August 30, 2023, and appointed Superintendent Juan Ruiz and plans to continue partnerships with city; 3) Leadership training for next week August 17th 2-5PM and all confirmed. Mr. Juan Garza facilitator will be emailing everybody a survey and Humberto almost had all the iPads ready and plan to distribute next weeks.

Councilman Verdugo reported the following: 1) report of sales taxes; and 2) abounded vehicles and vehicle abatement program.

Currently. Yeah, this is too quick things. Name meaning. Follow up on. Superintendent Sanchez 's last day is. August 30th. And currently.

Mayor Preciado reported the following: 1) many meetings; and 2) thanked all for attending.

ADJOURNMENT:

There being no further business the City Council meeting was adjourned at 8:37 p.m.

Respectfully submitted,
Maria Ortiz, City Clerk
Sept 14, 2023 Pg. 8

SPECIAL JOINT MEETING

AVENAL CITY COUNCIL/SUCCESSOR AGENCY
233 E. KINGS ST., AVENAL, CA 93204
THURSDAY, AUGUST 17, 2023; 2:15 P.M.

MINUTES
CALL TO ORDER & PLEDGE OF ALLEGIANCE: by Mayor Preciado at 2:21 p.m.

ROLL CALL: Councilmembers: Pablo Hernandez, Lou Gravelle, Ricardo Verdugo, Mayor Alvaro Preciado, Mayor Pro Tem Alejandro Ramirez.

ABSENT: None.

STAFF: Lopez, Ortiz, Bermudez.

LEGAL COUNCEL: None.

CITY CLERK:

PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES:

No public comments were Offred at 2:23 p.m.

A. Review of Computer and Electronic Technology Usage Policy:

Humberto Bermudez, IT Manager went over the computer & electronic usage policy with the City Council for 1-hour. He then proceeded to issue cellular iPads to each councilmember to receive official City communications and review the council packet.

B. Leadership/Governance Training Technology for Elected and Appointed Officials: Leadership Associates Leadership Associates went over Leadership training with City Council: from 3:25 p.m. to 6:16 p.m.

Actions for Staff & Council as follows:

Public Comments:
• Public Comment Cards will be required if not providing comment online. If providing online, they still require that they provide their name and address - information.
• City Clerk will keep track of three minute maximum for all public comments and provide a 30 second warning and a final 10 second warning and ask the participant to end their comments. • The agenda will state that up to 25 minutes will be allotted for Public Comments, unless extended by majority vote of the Council.
• The Mayor may ask for consensus from individuals who come for the same item, by a show of hands to show support or consensus for a certain comment or topic.

Dress Code
• Dress code of business casual attire will be required by all Council and staff:
•Acceptable Business Casual Attire includes, but is not limited to slacks, khakis, capris, golf shirts, and shirts with a finished neckline, skirts, dresses, turtlenecks, or sweaters. Caps and hoodies must be organization issued or from an affiliate organization. Clothing and shoes must be neat and clean. •Unacceptable attire includes, but is not limited to tee shirts; sweat pants, shorts, sweatshirts, or workout attire; cutoffs; beach attire; halter and spaghetti strap dresses, tank tops, miniskirts, short skirts, spandex and Lycra; dresses or skirts that are excessively short; clothes that are too tight, too small, sheer or clothing that otherwise is revealing, distracting, or provocative; and tennis shoes, flip flops, beach shoes, slippers, caps or hoodies not affiliated with the organization or its partners.
• Staff will provide Council with at least two City Polos to wear at Council meetings and events.

Sept 14, 2023 Pg. 9
Joint Meeting City Council/Successor Agency/PFA – August 17, 2023

Page 2 of 2 ends

• Agenda Item Discussion Procedure
· When the Mayor opens an item on the agenda, staff will give their presentation, then the City Manager will follow up with each council member, in a rotation, for their comments or questions and help moderate the response. Each councilmember has one opportunity for comments or questions, then the Mayor will request a motion for action.

Closing comments:
• Council agrees to allow each councilmember adequate time to provide their final comments about the meeting, and report attendance of any special events and pertinent information back to the public. *Note – although no time limit will be imposed upon any councilmember, brevity should be practiced.

Reminders:
• This is a Council meeting in public. Not a public meeting of the Council. • The Council commits to always reach out if they have a question about items on the agenda. The City Council will contact the City Manager with questions in advance by Wednesday at noon the day before a Council meeting.

The City Council went into Closed Session at 6:16 p.m.

CLOSED SESSION: (City/Successor Agency):

It is the intent of this governing body to meet in closed session to review its position and to instruct its designated representatives: Any person may directly address the Council/Agency at this time on items of interest regarding Closed Session. • City Manager
Mayor Preciado reopened regular meeting at 6:43 p.m. with nothing to report out of Closed Session.

ADJOURNMENT:

There being no further business the City Council meeting was adjourned at 6:43 p.m. p.m.

Respectfully submitted,
Maria Ortiz, City Clerk
Sept 14, 2023 Pg. 10
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 5. B
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager
DATE: September 12, 2023
RE: Ratify partnership agreement, "Project Reachout," between Avenal Animal Shelter and the Arizona Humane Society
INFORMATION:

Staff of the Animal Control Department continue making progress to maintain the Avenal Animal Shelter as a “primary no-kill” shelter by facilitating rescues and adoptions with numerous organizations throughout the state of California. As the Animal Control officers continue networking with rescue organizations, a new opportunity has presented itself to connect the shelter’s animals with a large humane society that could potentially take a large quantity of animals from the shelter on a regular basis – helping ease operations for the Animal Control Department.

Attached is a memo from the acting Animal Control Officer II, that details a partnership with the Arizona Humane Society (AHS) and how it benefits the City, at no additional costs.

To assist in overcrowding at the shelter, the City Manager executed a partner agreement and MOU (both attached) with the Arizona Humane Society, officially registering the City as a partner with AHS in order to begin processing rescues.

RECOMMENDATION:

By Motion, ratify the execution by the City Manager of the attached partnership agreement and MOU for "Project Reachout," between Avenal Animal Shelter and the Arizona Humane Society.

Sept 14, 2023 Pg. 11
Memo regarding partnership with Arizona Humane Society
Hello, my name is Raul Valadez, and I am an Animal Control Officer at the Avenal Animal Shelter in Avenal, California. I am reaching out with an urgent plea on behalf of some of the wonderful dogs at our shelter. We find ourselves in a dire situation - our shelter is currently overwhelmed and at full capacity. Unless we can move some of our dogs out, we will have no choice but to consider euthanizing some due to lack of space. All our dogs have been tested with other dogs, spayed or neutered, received rabies vaccinations, and are known to be friendly with people. Their only 'crime' is being born in a drastically overpopulated area. We desperately need assistance, and we need it now.

Please take a moment to consider adopting one of the dogs I have attached photos of in this email or browse through our volunteer Facebook page, 'Friends of Avenal Animal Shelter,' to see if you could provide a home for any of the listed dogs. Your support can make a life-saving difference.

This is just one example of the messages we send out to rescue organizations, pleading for help. We are pleased to share that our plea has been answered! Our shelter is committed to helping every animal that comes to us and providing them with an opportunity for a better home.

I am excited to introduce you to the Arizona Humane Society, who has generously offered to partner with the Avenal Animal Shelter to make a significant impact on the lives of dogs and cats. You may wonder how they plan to assist us. Having the Arizona Humane Society on board will significantly expedite the process of moving dogs and cats out of our shelter due to their capacity to accommodate a larger number of animals. This partnership will, without a doubt, spare us from having to make the heart-wrenching decision to euthanize animals due to overcrowding.

Freeing up space not only benefits our shelter but also has a positive impact on our community. It enables us to rescue more dogs and cats from the streets, ultimately enhancing public health and safety. I firmly believe that this partnership will be a tremendous asset to the shelter and our community.

I'd like to emphasize that there is no financial burden on the City of Avenal in this partnership. All they require are things we are already committed to providing, such as vaccinations upon arrival, rabies vaccinations, spaying/neutering, and basic medical care. Our rabies and spaying/neutering efforts are supported by a grant from U.C. Davis.

Thank you for taking the time to consider our plea and for your potential support. Together, we can make a significant difference in the lives of these animals and our community. -Raul Valadez
Code Enforcement/Water Conservation Officer
City of Avenal
Sept 14, 2023 Pg. 12
Placement Programs - Project Reachout / December 2022 azhumane.org 1 Project Reachout
California Partner Agreement
Thank you for taking part in our Project Reachout Program as a Source Partner. Please read over the following statements and initial to confirm understanding.

Source Partner vaccinates dogs on intake with a DA2PP vaccine or similar. _ Source Partner vaccinates cats on intake with a FVRCP vaccine or similar.

Source Partner will provide dewormer, flea/tick preventative and rabies vaccinations for cats and dogs prior to transport.
__ Source Partner will notify AHS if there has been any contagious diseases at Source Shelter in the past 60 days. Examples: Parvovirus, Distemper, Ringworm, Sarcoptic Mange, and Feline Panleukopenia. _ Each animals’ individual health record, as known at the Source Shelter, must be accurately described and communicated. Source Partner must provide clearly written health records that describe health status of the animal including:
• Vaccinations
• Testing performed
• Procedures
__ Each animals’ individual behavior record, as known at the Source Shelter, must be accurately described and communicated. Source Partner must provide clearly written behavior records if applicable that describe behavior status of the animal including:
• Previous owner records
• All behavior records while in shelter
• Kennel notes if applicable
__ Source Partner must adhere to any health examinations required by state or federal transportation regulations which may include a healthy certificate and/or rabies vaccinations __ If transporting animals, Source Partner must adhere to humane and safe standards of transportation and keep each animal separate from one another during transportation. _____ ______ ____________________________________

SOURCE AGENCY DESTINATION AGENCY
Signature: ___________________________ Signature: ___________________________ Print Name: _____ ________ Print Name: __________________________ Title: ___ Title: ________________________________
Sept 14, 2023 Pg. 13
Project Reachout Memorandum of Understanding
1 MEMORANDUM OF UNDERSTANDING (MOU) BETWEEN THE
ARIZONA HUMANE SOCIETY AND ______ ____________,

REGARDING THE DISPOSITION OF ANIMALS TRANSPORTED/RELOCATED TO THE ARIZONA HUMANE SOCIETY THROUGH PROJECT REACHOUT.

This MOU is made and entered into as of this day ___ , month___________ and year___ by and between the ____________________________________, having the address of ____________________________________________(source agency) and the Arizona Humane Society, having the address of 9226 N 13th Avenue, Phoenix, AZ 85021 (destination agency).

WHEREAS, Source Agency confirms its intent to transfer certain animals to the Destination Agency and confirms it is the rightful owner of any animals that may be transferred and that such animals have surpassed any applicable state or municipality required stray hold; and WHEREAS, Destination Agency has the desire, as well as the available space and sufficient resources, to take ownership and possession of the animals with the intent of finding permanent placement for the animals; and
WHEREAS, Source Agency has reviewed and signed Destination Agency’s required and necessary vaccination protocols for transfer from said state that the Source Agency resides and has performed all necessary vaccinations and testing prior to the transport of these animals; and WHEREAS, Source Agency understands Destination Agency will execute all available resources to find the animals permanent placement and that in the event that placement cannot be safely or humanely found and an animal must be humanely euthanized for a behavioral concern (check one); ______ Destination Agency will notify Source Agency and allow for Source Agency to arrange transport of said animal back to Source Agency in a timely manner or ______Destination Agency will not notify Source Agency
Destination Agency is unable to notify Source Agency in the event that placement cannot be safely or humanely found and an animal must be humanely euthanized for a medical concern.

WHEREAS, Destination and Source agencies shall mutually arrange for the safe and humane transport of the animals through its own means or the assistance of a reputable third party carrier; and WHEREAS, Source Agency shall transfer and Destination Agency shall accept all rights, ownership, control and responsibility of the animals in accordance with the terms of this Agreement.

NOW THEREFORE, in consideration of the mutual promises contained herein and for other good and valuable consideration the receipt of which is acknowledges, the Agencies hereby agree as follows:

Sept 14, 2023 Pg. 14
Project Reachout Memorandum of Understanding
2 AGREEMENT
Confirmation of the Viability of a Transport Program
Both agencies has reviewed and confirmed the following:
a. The impact on and capacity of each Agency’s to engage in animal transport b. The impact on and capacity of each Agency’s community if that Agency participates in animal transport
c. A high likelihood of improving the outcome for animals if a transport program is implemented
d. A strong commitment to transparent agency collaboration Key Transport Program Elements
The transport program operates within these parameters:
a. Public health and safety will be the primary concerns. b. Agencies will be registered 501-C-3 or municipal organizations. c. Agencies and all their representatives will abide by all local, state and federal regulations.
d. Agencies and all their representatives will maintain positive and open communication when interacting privately or publicly.
e. Humane standards of care will be afforded to every animal being transported.

TERM
This MOU shall be effective as of the effective date written above and binding upon the parties until the notice of termination is provide by either party of this MOU.

IN WITNESS WHEREOF, the parties have, by their authorized agents, signed and delivered this agreement as of the effective date set forth above.
____________________________________ ____________________________________

SOURCE AGENCY DESTINATION AGENCY
Signature: ___________________________ Signature: ___________________________ Print Name: _________________________ Print Name: __________________________ Title: _______________________________ Title: _______________________________ Sept 14, 2023 Pg. 15
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
Fax: (559) 386-0629
AGENDA ITEM NO. 5. C
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager
DATE: September 14, 2023
RE: Ratifying the 2023 Bilingual Pay Meet and Confer, Side Letter, with the Avenal Police Officer's Association
INFORMATION:

On August 10, 2023, the City Council and the Avenal Police Officer’s Association (APOA), reached an agreement for extending the current APOA MOU to June 30, 2025. Pending in the negotiations were clarifications to the City’s bilingual skills differential pay incentive that provided different requirements for a 2.5% incentive and a 5% pay incentives depending on level of skill and certifications in another language.

After numerous discussions with the APOA, both sides agreed that the 5% incentive, its requirements, and use for day to day work of the Police Department, may no longer be relevant and has created an irrelevant goal and confusion for some staff.

Attached is a side letter which simplifies the bilingual skills differential pay incentive policy by eliminating the 5% pay incentive, and clarifying the steps and requirements to receive the 2.5% incentive. Any pending issues with currently employed officers about what incentive rate they should receive is also resolved with this letter and policy. The side letter would carry with it the same lifespan as the MOU extension to June 30, 2025.

Attached is also a resolution which ratifies the City Manager signing and executing the side letter with the APOA. A full resolution is being presented today in open session for ratification.

RECOMMENDATION:

Approve by motion Resolution 2022-36 as presented.

Sept 14, 2023 Pg. 16
Sept 14, 2023 Pg. 17
Sept 14, 2023 Pg. 18
Sept 14, 2023 Pg. 19
1 of 2

BEFORE THE CITY COUNCIL OF THE

CITY OF AVENAL
IN THE MATTER OF:

Resolution of the City Council of the City
of Avenal Ratifying a Side Letter with the
Avenal Police Officer’s Association
(APOA) Attached to the July 1, 2021 –
June 30, 2025 MOU.

RESOLUTION 2023-__36__
WHEREAS, a Resolution to Meet and Confer with the Avenal Police Officer’s Association (APOA) was adopted in 2011 to meet and discuss working conditions, salaries, benefits, and other incidental matters; and
WHEREAS, the City Council and APOA have discussed said matters which relate to and affect the FY 2023/2024 & 2024/2025 City Budget; and WHEREAS, the City Council and the City Manager have agreed to the following:

SEE ATTACHMENT A
UPON MOTION OF COUNCIL MEMBER ______ , SECONDED BY
COUNCIL MEMBER _______ , THE FOLLOWING WAS PASSED,

APPROVED, AND ADOPTED BY THE CITY COUNCIL AT AN OFFICIAL REGULAR MEETING HELD ON SEPTEMBER 14, 2023, BY THE FOLLOWING VOTE:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

Alvaro Preciado, Mayor

CITY OF AVENAL
MARIA A. ORTIZ, City Clerk

CITY OF AVENAL
* * * * * * * * * * * * * * * * * *
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL:

1. Found the foregoing recitals to be true, correct and incorporated herein;

2. That the City Council hereby approves the side letter agreement as agreed upon by both the City and APOA as per Attachment A.

Sept 14, 2023 Pg. 20
2 of 2

3. That such benefits are effective as of July 1, 2023.

4. All other benefits shall remain the same.

5. That the bilingual skills differential pay incentive in the current MOU be replaced with Attachment A.

6. The City Council of the City of Avenal hereby authorizes the Mayor or City Manager to sign and execute documents and agreements related to this action on behalf of the City of Avenal.

7. Ordered relevant City staff to carry out the terms and conditions of this resolution and to take all steps reasonably necessary, proper and/or convenient and/or incidental thereto.
* * * * * * * * * * * * * * * * * *
20200916 - Avenal - Resolution Appointing City Attorney-v1.doc Sept 14, 2023 Pg. 21
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 6. A
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager
DATE: September 14, 2023
RE: Consider adopting temporary City Council Rules of Procedure and Decorum INFORMATION:

Two years ago, when the Council participated in goal setting workshops, were draft Council Norms (Attachment B) was introduced at the February 25, 2021 Council Meeting, but not formally adopted.

As the Council continues to progress and modernize many practices, such as digital agendas and virtual meetings, the Council expressed a desire to further refine the process and running of the regular Council meetings. Juan Garza of Leadership Associates led the Council in a leadership/governance training to further refine the Council’s rules of procedure and decorum.

In Attachment A, Staff has compiled the list of temporary rules of procedure and decorum for the running of the Council meetings. As suggested by Mr. Garza, the Council should adopt the following agreed upon rules (per the minutes for the August 17, 2023 meeting), and practice them for two – three council meetings, and then provide feedback and suggest changes at the net leadership/governance training workshop.

Staff asking for Council to review the City Council Rules of Procedure and Decorum, make any clarifications to the rules, and begin utilizing said rules as of this meeting.

RECOMMENDATION:

By Motion, adopt the Temporary City Council Rules of Procedure and Decorum as presented in Attachment A until November 16, 2023, and begin utilizing the temporary City Council Rules of Procedure and Decorum at the September 14, 2023 meeting.

Sept 14, 2023 Pg. 22
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 6. A

ATTACHMENT A
Temporary City Council Rules of Procedure and Decorum
For Use Until November 16, 2023
Public Comments:
• Public Comment Cards will be required if not providing comment online. If providing online, commentors are still required to provide their full name and address. • City Clerk will keep track of three minute maximum for all public comments and provide a 30 second warning and a final 10 second warning and ask the participant to end their comments. • The agenda will state that up to 25 minutes will be allotted for Public Comments, unless extended by majority vote of the Council.
• The Mayor may ask for consensus from individuals who come for the same item, by a show of hands to show support or consensus for a certain comment or topic.

Reminders:
• This is a Council meeting in public. Not a public meeting of the Council.

Sept 14, 2023 Pg. 23
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 6. A
• The Council commits to always reach out if they have a question about items on the agenda. The City Council will contact the City Manager with questions in advance by Wednesday at noon the day before a Council meeting.

Sept 14, 2023 Pg. 24
DRAFT

AVENAL CITY COUNCIL NORMS
! Demonstrate honesty and integrity in every action and statement ! Inspire public confidence in our city government
! Work for the common good, not personal interest
! Respect the proper roles of elected officials and City staff in ensuring open and effective government
! Communicate through the City Manager
! Questions and concerns from community members, point them to the source (i.e., department heads)
! Prepare in advance of Council meetings and be familiar with issues on the agenda – ask questions the day before the meeting
! Fully participate in City Council meetings and other public forums while demonstrating respect, consideration, and courtesy to others ! Participate in scheduled activities to increase Council effectiveness ! Share information with other Councilmembers about committee meetings attended
! Work for win-win -- strive for consensus and seek common ground ! Honor “discussion” before “decisions” – reserving making formal motions until initial discussions have taken place
! Disagree agreeably and professionally – respect and move on ! Share information and avoid surprises
! Approach the business of governing in a professional manner – conducting business in a way that brings honor to the institution of government ! Praise in public; criticize in private
! Work together as a body, modeling teamwork and civility for our community
! Cellphones on “silent” during meetings – excuse yourself if you must take an emergency call
! Use hand gestures to indicate “moving on” or going around the table in order to reach a consensus
Sept 14, 2023 Pg. 25
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 6. B
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager & María A. Ortiz, City Clerk DATE: September 14, 2023
RE: Consider amending meeting Public Comment procedure, and adopting a comment card
INFORMATION:

As a continuation of item 6. A of this meeting, the Council has expressed a desire to adopt a public comment card requirement to providing public comments before the Council at council meetings. The City Clerk reached out to other City Clerks throughout the State to find examples of how other cities handle their public comment section of their meetings.

Attached our the top three examples that City Staff felt contained the information and wording that could fit Avenal: City of Monrovia, City of Laguna Hills, and City of La Cañada Flintridge.

Staff captured portions of each of these examples and composed the following example in Attachment A, as a draft Public Comment card the City Council could consider adopting. This draft is also provided in Spanish.

By adopting a public comment card requirement, members of the public will be asked to submit this form before the “Public Comment/Announcements & Unscheduled Appearances” item on the Agenda in order to provide their public comment. This system will ensure members of the public are aware of the three minute rule, that Council cannot take action on items not on the agenda, and will assist in collection contact information for follow up.

When presenting or commenting online, members of the public will still be required to submit this same form online at the City’s website. That form will be emailed to the City Clerk to add that person to the public comment queue.

In either case of in-person or online comments, if the commentor is not available to provide their comment, the request will still be recorded to the meeting’s minutes.

RECOMMENDATION:

By Motion, adopt a version of the Public Comment Card – Request to Speak: Avenal City Council form that will be required to provide a comment during the Public Comment/ Announcements & Unscheduled Appearances item on the Agenda.

Sept 14, 2023 Pg. 26

SPEAKER INFORMATION FORM

To address the City Council, where possible, please submit this form to the City Clerk prior to your comments.

Please provide the City Clerk with a copy of any written materials used in your address to the Council as well as a copy of any printed materials you wish the City Clerk to distribute to the City Council. This form is a public record.

SUBJECT
 Public Input – for matters NOT on the
Agenda
 Agenda Item No(s): _____________________
 In Favor  Oppose  Other
Meeting Date:

Name:

Street Address:

City:

Representing
(if applicable):

MATTERS NOT ON THE AGENDA should be presented within a
three (3) minute time frame during the time designated as “PUBLIC INPUT.” Speakers will be heard on a first come, first served basis during the 45-minute period of Public Input.

Additional speakers will be accommodated during Public Input, Continued, following public City Business. By State law, the City Council may not discuss or vote on items not on the agenda.

If you wish to address the City Council on MATTERS ON THE AGENDA, please indicate the Agenda Item Numbers(s) on this form. Your name will be called at the appropriate time and you may proceed with your presentation within the five (5) minute time frame.

PUBLIC HEARINGS AND APPEALS are items scheduled for
which public input is either required or desired. The applicant shall be allowed a ten (10) minute time frame to present project testimony and a five (5) minute time frame to respond following further public testimony. Appellants will be afforded the same opportunities. Other members of the public who wish to speak have a five (5) minute time frame with no rebuttal time.

Sept 14, 2023 Pg. 27

LAGUNA HILLS CITY COUNCIL MEETING
In order to assist us in corresponding with persons who wish to address the City Council on matters within the Council’s subject matter jurisdiction, we would appreciate your completion of this form. Please provide this form to the City Clerk prior to the start of the meeting so that she can notify the Mayor regarding your desire to speak and the subject or Agenda Item No. you wish to speak to.

Completion of this form is voluntary. All persons may attend the meeting regardless of whether this form is completed. When called upon to address the City Council, there is a time limitation of three minutes per person. (For tips on making your presentation, see reverse)

PLEASE PRINT
MEETING DATE: AGENDA ITEM NO.

AGENDA TITLE OR SUBJECT TO BE ADDRESSED:

PLEASE CHECK ONE: In Favor O In Opposition O Neutral O
NAME:

Please provide the following optional information to allow us to contact you as needed.

Address (optional):

Email (optional): Telephone (optional):

PRESENTATION TIPS
Your City Council is interested in your opinion!
The following presentation tips are provided in an effort to assist you in making your opinion known to the City Council. Specific time allotments help ensure that all persons who wish to state their opinion have the opportunity to do so.

To make the most efficient use of your time:
• State your name and address (optional but useful)
• Clearly state your concern - be concise.
• At the conclusion of your remarks, summarize the action you desire. • If you wish to discuss an item on the Agenda, you may review the staff report and documentation in the Agenda packet on the table at the back of the Council Chamber.

The Request to Speak form should be filled out and handed to the City Clerk prior to the Agenda item being called. You are not required to provide your address, telephone number, or group affiliation; however, it is helpful if there is any follow-up necessary related to your request. The information provided on this form is a matter of public record.

Sept 14, 2023 Pg. 28
REQUEST TO SPEAK - LA CAÑADA FLINTRIDGE CITY COUNCIL
Citizen participation is invited at all City Council meetings. To ensure that all speakers have an opportunity to be heard before the City Council, a “COMMENTS FROM THE PUBLIC” period is included on every agenda pursuant to state law.

If you would like to address the City Council on any item on the Agenda or any subject within the subject matter jurisdiction of the City Council, please fill out this card and hand it to the City Clerk. When the Mayor calls your name, step to the podium and state your name and City before beginning your presentation. This is for the City Clerk’s information only in order to accurately prepare the minutes of the meeting.

Date:

Agenda Item No.: Topic: In favor: Opposed:

Subject (if speaking under Comments from the Public):

Name: Phone: Email:

Address:

Representing:
(Please observe the 3-minute time limit)
REQUEST TO SPEAK - LA CAÑADA FLINTRIDGE CITY COUNCIL
Citizen participation is invited at all City Council meetings. To ensure that all speakers have an opportunity to be heard before the City Council, a “COMMENTS FROM THE PUBLIC” period is included on every agenda pursuant to state law.

Date:

Agenda Item No.: Topic: In favor: Opposed:

Subject (if speaking under Comments from the Public):

Name: Phone: Email:

Address:

Representing:
(Please observe the 3-minute time limit)
Under state law, the City Council may take no action on matters raised under the Comments from the Public portion of the agenda.

The City Council may refer your concerns to the City Manager for administrative action, or it may be scheduled for a subsequent City Council meeting. This document is a public record, subject to disclosure under the California Public Records Act. If you need additional help, please see the City Clerk. Thank you for your interest.

Under State law, the City Council may take no action on matters raised under the Comments from the Public portion of the agenda.

Sept 14, 2023 Pg. 29
Tips on Making Your Presentation
The following presentation tips are provided in an effort to assist you in making your opinions known to the City Council.

The three (3) minute time limit for presentations helps to ensure that all persons who wish to state their opinions have the opportunity to do so. The “Comments from the Public” portion of the meeting is limited to a maximum of 20 minutes.

Speakers not able to speak due to the 20-minute time limit will be provided the opportunity to speak at the end of the meeting.
❖ When your name is called, come forward to the speaker’s podium and state your name.

So that you may make the most efficient use of your time, you may wish to:
❖ State your message clearly and concisely as you commence speaking. ❖ At the conclusion of your remarks, summarize for the City Council your message, concern or request. ❖ If the City Council meeting has started and Comments from the Public has not commenced, fill out the Speaker card and submit it directly to the City Clerk.
❖ If you wish to review agenda items or topics to be discus sed, the complete agenda including staff reports is available for your review on the counter directly outside the Council Chambers.

Your City Council is interested in Your Opinion!
Tips on Making Your Presentation
The following presentation tips are provided in an effort to assist you in making your opinions known to the City Council.

So that you may make the most efficient use of your time, you may wish to:
❖ State your message clearly and concisely as you commence speaking. ❖ At the conclusion of your remarks, summarize for the City Council your message, concern or request. ❖ If the City Council meeting has started and Comments from the Public has not commenced, fill out the Speaker card and submit it directly to the City Clerk.
❖ If you wish to review agenda items or topics to be discussed, the complete agenda including staff reports is available for your review on the counter directly outside the Council Chambers.

Your City Council is interested in Your Opinion!
Sept 14, 2023 Pg. 30
REQUEST TO SPEAK: AVENAL CITY COUNCIL
Citizen participation is invited at all City Council meetings. To ensure that all speakers have an opportunity to be heard before the City Council, a “PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES” period is included on every agenda pursuant to state law.

If you would like to address the City Council on any item on the Agenda or any subject within the subject matter jurisdiction of the City Council, please fill out this card and hand it to the City Clerk prior to the Public Comment item beginning. When the Mayor calls your name, step to the podium and state your name and City before beginning your presentation. This is for the City Clerk’s information only in order to accurately prepare the minutes of the meeting.

Date: Agenda Item No.: In favor: Opposed:

Agenda Title or Subject to be Addresses:

Name: Phone: Email:

Address:

Representing:
(Please observe the 3-minute time limit)
Tips on Making Your Presentation
The following presentation tips are provided in an effort to assist you in making your opinions known to the City Council. The three (3) minute time limit for presentations helps to ensure that all persons who wish to state their opinions have the opportunity to do so. The “Public Comment/Announcements & Unscheduled Appearances” portion of the meeting is limited to a maximum of 25 minutes. Speakers not able to speak due to the 25-minute time limit may be provided the opportunity to speak upon majority consent of the Council.

The Public Comment Card form should be filled out and handed to the City Clerk prior to the Public Comment/ Announcements & Unscheduled Appearances Agenda item being called. You are not required to provide your address, telephone number, or group affiliation; however, it is helpful if there is any follow-up necessary related to your request. The information provided on this form is a matter of public record.

Your City Council is interested in Your Opinion!
Neutral:

Under state law, the City Council may take no action on matters raised under the Comments from the Public portion of the agenda.

Sept 14, 2023 Pg. 31
SOLICITUD DE HABLAR: AYUNTAMIENTO DE AVENAL
Se invita a la participación ciudadana en todas las reuniones del Concejo Municipal. Para garantizar que todos los oradores tengan la oportunidad de ser escuchados ante el Concejo Municipal, se incluye un período de "COMENTARIOS PÚBLICOS / ANUNCIOS Y APARICIONES NO PROGRAMADAS" en cada agenda de conformidad con la ley estatal.

Si desea dirigirse al Concejo Municipal sobre cualquier tema de la Agenda o cualquier tema dentro de la jurisdicción del Concejo Municipal, complete esta tarjeta y entréguela al Secretario de la Ciudad antes de que comience el tema de Comentarios Públicos. Cuando el alcalde lo llame por su nombre, suba al podio y diga su nombre y ciudad antes de comenzar su presentación. Esto es para información del Secretario de la Ciudad solo para preparar con precisión las actas de la reunión.

Fecha: Punto del orden A favor: Opuesto:

Título de la agenda o tema a abordar:

Nombre: Teléfono: Email:

Dirección:

Representando:
(Por favor, respete el límite de tiempo de 3 minutos)
Consejos para hacer su presentación
Los siguientes consejos de presentación se proporcionan en un esfuerzo por ayudarlo a dar a conocer sus opiniones al Concejo Municipal. El límite de tiempo de tres (3) minutos para las presentaciones ayuda a garantizar que todas las personas que deseen expresar sus opiniones tengan la oportunidad de hacerlo. La parte de "Comentarios públicos / Anuncios y apariciones no programadas" de la reunión está limitada a un máximo de 25 minutos. Los oradores que no puedan hacer uso de la palabra debido al límite de tiempo de 25 minutos podrán tener la oportunidad de hablar con el consentimiento mayoritario del Consejo.

Para hacer el uso más eficiente de su tiempo:
• Indique su nombre y dirección (opcional pero útil)
• Exprese claramente su preocupación: sea conciso.
• Al final de sus comentarios, resuma la acción que desea. • Si desea debatir un punto del orden del día, puede examinar el informe del personal y la documentación que figura en el paquete del orden del día que figura sobre la mesa al fondo del Salón del Consejo.

El formulario de Tarjeta de Comentarios Públicos debe completarse y entregarse al Secretario de la Ciudad antes de que se llame al tema de la Agenda de Comentarios Públicos / Anuncios y Comparecencias No Programadas. No está obligado a proporcionar su dirección, número de teléfono o afiliación grupal; Sin embargo, es útil si hay algún seguimiento necesario relacionado con su solicitud. La información proporcionada en este formulario es un asunto de registro público. ¡Tu Ayuntamiento está interesado en tu opinión!
Neutral:

Bajo la ley estatal, el Concejo Municipal no puede tomar ninguna medida sobre los asuntos planteados bajo los Comentarios de la parte pública de la agenda. El Concejo Municipal puede remitir sus inquietudes al Administrador de la Ciudad para una acción administrativa, o puede programarse para una reunión posterior del Concejo Municipal. Este documento es un registro público, sujeto a divulgación bajo la Ley de Registros Públicos de California. Si necesita ayuda adicional, consulte al Secretario de la Ciudad. Gracias por su interés.

Sept 14, 2023 Pg. 32
Sept 14, 2023 Pg. 33
Monthly Report
July 2023
Vehicle Abatements
Total of Vehicles Tagged (private property) 00
City of Avenal Abatements 00
Voluntary Abetments 00
Pending 00
Property Abetments
Mailed Abetments 18
Courtesy Verbal Abetments 35
Courtesy Door Hangers 21
Abetments Completed 67
Pending 07
Miscellaneous Complaints
Illegal Business/Expired License 01
Stop Work/No Permit 01
Illegal Occupancy 02
Illegal Venders 03
Complaints Received 03
*Phone 02
*Walk In 00
Miscellaneous Inspections 72
Miscellaneous Meetings 03
Recycling Control 01
Graffiti Control 03
Water Waste Control (verbal and/or citations) 02
Weed Abatement (properties posted for cleanup) 01
Weed Abatement (completed) 00
Illegal Yard Sales/No Permits 00
Notes: 2 properties have been posted for cleanup with possible 2 more in prosses for posting. Water waste is doing good. Have reminded a couple residents the use of water especially if its just running down the street.

Sept 14, 2023 Pg. 34
Monthly Report
August 2023
Vehicle Abatements
Total of Vehicles Tagged (private property) 00
City of Avenal Abatements 00
Voluntary Abetments 00
Pending 00
Property Abetments
Mailed Abetments 22
Courtesy Verbal Abetments 42
Courtesy Door Hangers 59
Abetments Completed 98
Pending 25
Miscellaneous Complaints
Illegal Business/Expired License 00
Stop Work/No Permit 01
Illegal Occupancy 01
Illegal Venders 05
Complaints Received 06
*Phone 01
*Walk In 00
Miscellaneous Inspections 89
Miscellaneous Meetings 02
Recycling Control 02
Graffiti Control 08
Water Waste Control (verbal and/or citations) 05
Weed Abatement (properties posted for cleanup) 01
Weed Abatement (completed) 01
Illegal Yard Sales/No Permits 00
Notes: we been getting more illegal street vendors coming in on the evenings and weekends. I have been flexing different hours on weekends. We had one vendor on the holiday as he said we don’t work on holidays. Graffiti is slowly coming back up again as it happens when gang members get out of jail.

Sept 14, 2023 Pg. 35
To: Rob Williams, Public Works Director
From: Raul Valadez, Animal Control Department
For: July 1, 2023 to July 31, 2023
Total dogs 45
RETURNED TO OWNER 3
ADOPTED 0
DIED IN SHELTER 0
EUTHANIZED 0
ESCAPED FROM SHELTER 0
REMAINING IN SHELTER 31
DOGS RESCUED 11
Dogs Brought in for the month of July 13
DOG BITE(S) 0
CITATIONS 0
COMPLAINTS 14
DOOR HANGERS 3
CATS DETAINED 0
EUTHANIZED 0
RESCUED 0
REDEEMED 0
ADPOTDED 0
Roosters/Chickens/Owls/Turtles, etc. 0
Deceased Animals
Dogs 2
Cats 8
Other Animals Deceased 0
Animal Control Activity Report
City Of Avenal
Animal Control Activity Report
August 1, 2023
Sept 14, 2023 Pg. 36
To: Rob Williams, Public Works Director
From: Raul Valadez, Animal Control Department
For: July 1, 2023 to July 31, 2023
Total Dogs 38
RETURNED TO OWNER 0
ADOPTED 0
DIED IN SHELTER 0
EUTHANIZED 0
ESCAPED FROM SHELTER 0
REMAINING IN SHELTER 24
DOGS RESCUED 14
Dogs Brought in for the month of July 7
DOG BITE(S) 0
CITATIONS 0
CATS DETAINED 0
EUTHANIZED 0
RESCUED 0
REDEEMED 0
ADPOTDED 0
Roosters/Chickens/Owls/Turtles, etc. 0
Deceased Animals
Dogs 6
Cats 6
Other Animals Deceased 0
Animal Control Activity Report
City Of Corcoran
Animal Control Activity Report
August 1, 2023
Sept 14, 2023 Pg. 37
To: Rob Williams, Public Works Director
From: Raul Valadez, Animal Control Department
For: August 1, 2023 to August 31, 2023
Total dogs 58
RETURNED TO OWNER 4
ADOPTED 0
DIED IN SHELTER 0
EUTHANIZED 4
ESCAPED FROM SHELTER 0
REMAINING IN SHELTER 31
DOGS RESCUED 19
Dogs Brought in for the month of August 24
DOG BITE(S) 0
CITATIONS 0
COMPLAINTS 10
DOOR HANGERS 2
CATS DETAINED 0
EUTHANIZED 1
RESCUED 1
REDEEMED 0
ADPOTDED 1
Roosters/Chickens/Owls/Turtles, etc. 0
Deceased Animals
Dogs 3
Cats 18
Other Animals Deceased 0
Note: Even though rescue numbers are been small; large breed where the rescued more this month .

Animal Control Activity Report
City Of Avenal
Animal Control Activity Report
September 1, 2023
Sept 14, 2023 Pg. 38
To: Rob Williams, Public Works Director
From: Raul Valadez, Animal Control Department
For: August 1, 2023 to August 31, 2023
Total Dogs 46
RETURNED TO OWNER 1
ADOPTED 1
DIED IN SHELTER 0
EUTHANIZED 3
ESCAPED FROM SHELTER 0
REMAINING IN SHELTER 29
DOGS RESCUED 12
Dogs Brought in for the month of August 13
DOG BITE(S) 2
CITATIONS 0
CATS DETAINED 0
EUTHANIZED 0
RESCUED 0
REDEEMED 0
ADPOTDED 0
Roosters/Chickens/Owls/Turtles, etc. 0
Deceased Animals
Dogs 6
Cats 13
Other Animals Deceased 0
Note: Even though rescue numbers are been small; large breed where the rescued more this month .

Animal Control Activity Report
City Of Corcoran
Animal Control Activity Report
September 1, 2023
Sept 14, 2023 Pg. 39
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
Fax: (559) 386-0629
“Pistachio Capital of the World”
“Oasis in the Sun – Gateway to the Coast”
AGENDA ITEM NO. 7- A.2
TO: The Honorable Mayor and City Council
FROM: Humberto Bermudez, IT Manager
DATE: September 11th, 2023
RE: Information Technology Monthly Report May Report 2023 CURRENT PROJECTS:

Internet:

Reconnecting the service with RSUSD is currently on hold. Staff works on purchasing Spectrum for the Recreation Center to hold us off until bandwidth is available on RSUSD’s side to reconnect us. Awaiting final answer from Spectrum whether our service falls under Enterprise or Business. Staff continues working with Kings County IT regarding the Avenal Police Department internet situation.

Phone System: Staff works with Kings County IT to gather information on the networking and POTS porting requirements to both move over the outdoor phone over from POTS to Cellular with uninterrupted service and replacing the Avenal Police Department’s unsupported Mitel PBX (Private Branch eXchange) system over to Verizon OneTalk, unifying them with other City Buildings. Still awaiting response from Champi Fence for their services.

Server:
-Regular Security Maintenance and policy adjustments to aid in workflow as needed -Continuing reorganizing documentation of all services for future reference Other:
-Deployed Cellular iPad Airs to City Council to allow for remote attendance and to shift away from physical media.
-Deployed Cellular iPad Mini to Public Works to manage Underground Service Alert (USA) Tickets.
-Continues to assist Avenal PD with footage review as requested. -Reviewing security footage from other sites as requested -Continues to work with KCAG to allow regular remote viewing and participation of their monthly meetings
-Continues to maintain the city website and provide tech support across all facilities.

Sept 14, 2023 Pg. 40
Community Activities Department
September 2023 Report
UPDATE
Kidz Spot
• All monies have come in from KCAO, a total of 52 kids @120.00. A total of $6,240.00.

See attached Program Revenue/Expense Report
Market
• 2 Food vendors confirmed.
• 8 Merchandise/Information
• Valley Voices will be offering COVID Vaccine Clinic inside the Rec Center 1-8pm Community Movie
• August 30th @6pm
• September 6th @6pm
• September 29th @6pm
August rentals
• 1 Recreation Center- RSUSD
• 1 paid recreation Center
• 1 paid Pavilion rental
• 1 Veterans Hall
July rentals
• 1 paid Recreation Center
• 1 Recreation- KCAO
• 1 paid Theater
• 1 Veterans Hall
KCAO
• Will be starting a 4-week Nutrition Class, at Rec Center, every Wednesday starting September 6th until September 27th, 6-7pm. Class will be in English/Spanish.

KPFP & City Partnership
• Suicide Prevention & Awareness Event – Sept 9th – 5-7 pm – Vet's Hall. Resourse, guest speaker, music by Avenal Assembly of God, Awareness walks from Vet’s Hall to Skyline to City Hall and back, Candle lighting, prayer, and song immediately following.

Sept 14, 2023 Pg. 41
Community Activities Department
September 2023 Report
Community Garden Update:
• Marcos Montoya met staff and is working on providing information on restroom options
• Rob and Art measured area for pavilion and will provide to Antony to order • Art and Scott working on getting quotes for concrete work for pavilion, walkway, and restroom
• Eduardo Vargas will contact staff reschedule the Thursday, sept 7th meeting to finalize material needs for fence/gate
• PW went and cleaned the weeds and debris in the garden • Antony ordered solar lighting
• Rules, waiver, registration have all been approved and ready to put out to community
• Staff have secured 12 plot sponsorships for Seniors to garden for free. The remaining 11 will be for the community
• Advertisement is ready to post.
• Open Date – shooting for January
9-11 Observance
• Movie at movie – Free Movie - Popcorn and drink included • Pins for 1st responders
• Decorated outdoor bandstand with timeline of events
Senior Picnic
• Staff assisted as needed –
Collaborations
• KPFP
• APD
• AHS Junior Class
• Valley Voices
• Rotary
Sept 14, 2023 Pg. 42
2023 SUMMER KIDZ SPOT
(EXPENDITURES AND REVENUES)
WHEN: JUNE 19TH – AUGUST 4TH
TIME: 9:00 A.M. – 2:30 PM.

PLACE: AVENAL RECREATION
CENTER

EXPENDITURES ON PROGRAM SUPPLIES
ORIENTAL TRADING $500.00
AMAZON $700.00
SMART & FINAL $600.00
STATE FOODS $200.00

FAMILY DOLLAR & DOLLAR
GENERAL $100.00

EXPENDITURES ON FIELD TRIPS

ISLAND WATER PARKENTRANCE
FEE
50 PEOPLE
$1,670.38
CHARTER BUS $1,579.00
LUNCH (pizza) $216.43

ADVENTURE PARK ENTRANCE
FEE $828.00
TOTAL EXPENDITURES $6,393.81
Sept 14, 2023 Pg. 43

REVENUES

KCAO KIDZ SPOT SPONSORSHIP
52 KIDS $7,800.00
MENA FAMILY DONATION $250.00

ISLAND WATER PARK

KIDS ENTRANCE FEE
$20.00
$1,290.00

ADVENTURE PARK
KIDS ENTRANCE FEE $20
$459.00
TOTAL REVENUES $9,799.00
END BALANCE $3,405.19
Sept 14, 2023 Pg. 44
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 10. A
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager & María A. Ortiz, City Clerk DATE: September 14, 2023
RE: Consider ratification and formal adoption of the Fiscal Year 2019-2020 Financial Audit and corresponding Corrective Action Plans INFORMATION:

Mr. Ivan Sotomayor, CPA with Sotomayor and Associates, CPAs the City’s independent auditor, has submitted the FY 19/20 Audited Financial Statements for the Council/Agency Members on August 31, 2023. The FY 19/20 Audit is included in the Council Packet for the City Council/Successor Agency/PFA consideration.

Within the FY 19/20 Audit are two findings; the findings are similar to the FY 15/16; 16/17, 17/18, & 18/19 audits regarding the City’s struggles to reconcile the finance system with the bank statements.

Attachment A includes a Corrective Action Plan for both findings.

RECOMMENDATION:

By motion, formal acceptance of the FY 19/20 Audited Financial Statements, ratifying the City Manager’s acceptance of said audit and representation letter; and, by Resolution, adopt the included Corrective Action Plan in Attachment A:

Resolution 2023-37.

Sept 14, 2023 Pg. 45
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 10. A
EXHIBIT A – Resolution 2023-37
Corrective Action Plan for FY 2019-2020
Audit Findings
FINDING 2019-1 Bank Reconciliation - Repeated in Current Year During our audit procedures, we noticed that the total cash balance on the operating bank account reconciliation did not reconcile to the cash balances recorded on the general ledger as of June 30, 2020, 2019, 2018 and 2017.

CORRECTIVE ACTION:

In FY 2022, the City of Avenal retained outside consultants, Price Paige & Company (PP&C), to assist in the bank reconciliations in order to address the previous year's audit findings. PP&C has developed a process to keep financial statements and bank reconciliations caught up and up to date, and training staff to handle the process moving forward once all the audits are complete.

In FY 2023, the City of Avenal is upgrading the finance system from Central Square to OpenGov and is working with the City’s financial institution to have electronic bank statements provided that are compatible with the new software. -----
FINDING 2020-1 Bank Reconciliation - Repeated in Current Year During our audit procedures, we noticed that the City continues leaving the bank reconciliation unreconciled. The total cash balance on the operating bank account reconciliation did not reconcile to the cash balances recorded on the general ledger as of June 30, 2020, 2019, 2018 and 2017.

CORRECTIVE ACTION:

Sept 14, 2023 Pg. 46
1 of 1

BEFORE THE CITY COUNCIL OF THE

CITY OF AVENAL
IN THE MATTER OF:

Resolution of the City Council of the City
of Avenal Adopting Corrective Action Plan
for FY 2019-2020 Audit Findings
RESOLUTION 2023-__37__
WHEREAS, the City's Auditor, Sotomayor & Associates, has issued the auditor's reports on the City's Annual Financial Report for the Year Ended June 30, 2020; and WHEREAS, the auditor issued findings that the City was not in compliance with certain provisions of laws, regulations, contracts and/or grants; and WHEREAS, City staff have prepared a Corrective Action Plan to address the findings:

SEE ATTACHMENT A
UPON MOTION OF COUNCIL MEMBER ______ , SECONDED BY
COUNCIL MEMBER _______ , THE FOLLOWING WAS PASSED,

APPROVED, AND ADOPTED BY THE CITY COUNCIL AT AN OFFICIAL REGULAR MEETING HELD ON SEPTEMBER 14, 2023, BY THE FOLLOWING VOTE:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

Alvaro Preciado, Mayor

CITY OF AVENAL
MARIA A. ORTIZ, City Clerk

CITY OF AVENAL
* * * * * * * * * * * * * * * * * *
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL:

1. Found the foregoing recitals to be true, correct and incorporated herein;

2. That the City Council adopts the Corrective Action Plan for the audit findings for the Annual Financial Report for the Year Ended June 30, 2020 marked Exhibit A

3. The City Council of the City of Avenal hereby authorizes the Mayor or City Manager to sign and execute documents and agreements related to this action on behalf of the City of Avenal.

4. Ordered relevant City staff to carry out the terms and conditions of this resolution and to take all steps reasonably necessary, proper and/or convenient and/or incidental thereto.
* * * * * * * * * * * * * * * * * *
Sept 14, 2023 Pg. 47
1 Management Representation Letter
City of Avena l 919 Skyline Blvd.

Avenal. CA 93204
Phone: (559) 386-5766
Fax: (559) 386-0629
08/24/2023
Sotomayor & Associates, LLP
699 Hampshire Rd. Suite 101
Westlake Village, CA 91361
This representation letter is provided in connection with your audit(s) of the financial statements of City of Avenal, which comprise the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows for the year then ended, and the related notes to the financial statements, for the purpose of expressing opinions as to whether the financial statements are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

Certain representations in this letter are described as being limited to matters that are material. Items are considered material, regardless of size, if they involve an omission or misstatement of accounting information that, in light of surrounding circumstances, makes it probable that the judgment of a reasonable person relying on the information would be changed or influenced by the omission or misstatement. An omission or misstatement that is monetarily small in amount could be considered material as a result of qualitative factors.

We confirm, to the best of our knowledge and belief, as of August 24, 2023, the following representations made to you during your audit.

Financial Statements
1) We have fulfilled our responsibilities, as set out in the terms of the audit engagement letter dated September 28, 2020, including our responsibility for the preparation and fair presentation of the financial statements in accordance with U.S. GAAP and for preparation of the supplementary information in accordance with the applicable criteria.
2) The financial statements referred to above are fairly presented in conformity with U.S. GAAP and include all properly classified funds and other financial information of the primary government and all component units required by generally accepted accounting principles to be included in the financial reporting entity. 3) We acknowledge our responsibility for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
4) We acknowledge our responsibility for the design, implementation, and maintenance of internal control to prevent and detect fraud.
5) Significant assumptions we used in making accounting estimates, including those measured at fair value, are reasonable.
6) Related party relationships and transactions, including revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and amounts receivable from or payable to related parties have been appropriately accounted for and disclosed in accordance with U.S. GAAP. 7) Adjustments or disclosures have been made for all events, including instances of noncompliance, subsequent to the date of the financial statements that would require adjustment to or disclosure in the financial statements or in the schedule of findings and questioned costs. 8) The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to the financial statements as a whole for each opinion unit. A list of the uncorrected misstatements is attached to the representation letter.

Sept 14, 2023 Pg. 48
2 9) The effects of all known actual or possible litigation, claims, and assessments have been accounted for and disclosed in accordance with U.S. GAAP.
10) Guarantees, whether written or oral, under which the City of Avenal is contingently liable, if any, have been properly recorded or disclosed.

Information Provided
11) We have provided you with:
a) Access to all information, of which we are aware, that is relevant to the preparation and fair presentation of the financial statements, such as records, documentation, and other matters and all audit or relevant monitoring reports, if any, received from funding sources. b) Additional information that you have requested from us for the purpose of the audit. c) Unrestricted access to persons within the City of Avenal from whom you determined it necessary to obtain audit evidence.
d) Minutes of the meetings of City Council/Successor Agency or summaries of actions of recent meetings for which minutes have not yet been prepared.
12) All material transactions have been recorded in the accounting records and are reflected in the financial statements and the schedule of expenditures of federal awards. 13) We have disclosed to you the results of our assessment of the risk that the financial statements may be materially misstated as a result of fraud.
14) We have no knowledge of any fraud or suspected fraud that affects the City of Avenal and involves— • Management,
• Employees who have significant roles in internal control, or • Others where fraud could have a material effect on the financial statements. 15) We have no knowledge of any allegations of fraud or suspected fraud affecting the City of Avenal’s financial statements communicated by employees, former employees, regulators, or others. 16) We have no knowledge of instances of noncompliance or suspected noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse, whose effects should be considered when preparing financial statements.
17) We have no known actual or possible litigation, claims, and assessments whose effects should be considered when preparing the financial statements.
18) We have disclosed to you the identity of the City of Avenal’s related parties and all the related party relationships and transactions of which we are aware.

Government-specific
19) There have been no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices.
20) We have a process to track the status of audit findings and recommendations. 21) We have identified to you any previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. 22) We have provided our views on reported findings, conclusions, and recommendations, as well as our planned corrective actions, for the report.
23) The City of Avenal has no plans or intentions that may materially affect the carrying value or classification of assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fund balance or net position.
24) We are responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to us, including tax or debt limits and debt contracts, and legal and contractual provisions for reporting specific activities in separate funds.

Sept 14, 2023 Pg. 49
3 25) We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. 26) We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that we believe have a material effect on the determination of financial statement amounts or other financial data significant to the audit objectives. 27) We have identified and disclosed to you all instances that have occurred or are likely to have occurred, of abuse that could be quantitatively or qualitatively material to the financial statements or other financial data significant to the audit objectives.
28) There are no violations or possible violations of budget ordinances, laws and regulations (including those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant agreements, tax or debt limits, and any related debt covenants whose effects should be considered for disclosure in the financial statements, or as a basis for recording a loss contingency, or for reporting on noncompliance. 29) As part of your audit, you assisted with preparation of the financial statements and related notes [and schedule of expenditures of federal awards]. We acknowledge our responsibility as it relates to those nonaudit services, including that we assume all management responsibilities; oversee the services by designating an individual, preferably within senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of the services performed; and accept responsibility for the results of the services. We have reviewed, approved, and accepted responsibility for those financial statements and related notes and schedule of expenditures of federal awards.
30) The City of Avenal has satisfactory title to all owned assets, and there are no liens or encumbrances on such assets nor has any asset been pledged as collateral.
31) The City of Avenal has complied with all aspects of contractual agreements that would have a material effect on the financial statements in the event of noncompliance. 32) The financial statements include all component units as well as joint ventures with an equity interest, and properly disclose all other joint ventures and other related organizations. 33) The financial statements properly classify all funds and activities in accordance with GASB Statement No. 34 . 34) All funds that meet the quantitative criteria in GASBS Nos. 34 and 37 for presentation as major are identified and presented as such and all other funds that are presented as major are particularly important to financial statement users.
35) Components of net position (net investment in capital assets; restricted; and unrestricted) and classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned) are properly classified and, if applicable, approved.
36) Investments, derivative instruments, and land and other real estate held by endowments are properly valued. 37) Provisions for uncollectible receivables have been properly identified and recorded. 38) Expenses have been appropriately classified in or allocated to functions and programs in the statement of activities, and allocations have been made on a reasonable basis. 39) Revenues are appropriately classified in the statement of activities within program revenues, general revenues, contributions to term or permanent endowments, or contributions to permanent fund principal. 40) Interfund, internal, and intra-entity activity and balances have been appropriately classified and reported. 41) Special and extraordinary items are appropriately classified and reported. 42) Deposits and investment securities and derivative instruments are properly classified as to risk and are properly disclosed.
43) Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and, if applicable, depreciated.
44) We have appropriately disclosed the City of Avenal’s policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available and have determined that net position is properly recognized under the policy.

Sept 14, 2023 Pg. 50
4 45) We are following our established accounting policy regarding which resources (that is, restricted, committed, assigned, or unassigned) are considered to be spent first for expenditures for which more than one resource classification is available. That policy determines the fund balance classifications for financial reporting purposes.
46) We acknowledge our responsibility for the required supplementary information (RSI). The RSI is measured and presented within prescribed guidelines and the methods of measurement and presentation have not changed from those used in the prior period. We have disclosed to you any significant assumptions and interpretations underlying the measurement and presentation of the RSI. 47) With respect to federal award programs:
a) We are responsible for understanding and complying with and have complied with, the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), including requirements relating to preparation of the schedule of expenditures of federal awards. b) We acknowledge our responsibility for preparing and presenting the schedule of expenditures of federal awards (SEFA) and related notes in accordance with the requirements of the Uniform Guidance, and we believe the SEFA, including its form and content, is fairly presented in accordance with the Uniform Guidance. The methods of measurement or presentation of the SEFA have not changed from those used in the prior period and we have disclosed to you any significant assumptions and interpretations underlying the measurement or presentation of the SEFA. c) If the SEFA is not presented with the audited financial statements, we will make the audited financial statements readily available to the intended users of the SEFA no later than the date we issue the SEFA and the auditor’s report thereon.
d) We have identified and disclosed to you all of our government programs and related activities subject to the Uniform Guidance compliance audit, and have included in the SEFA, expenditures made during the audit period for all awards provided by federal agencies in the form of federal awards, federal costreimbursement contracts, loans, loan guarantees, property (including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other direct assistance.
e) We are responsible for understanding and complying with, and have complied with, the requirements of federal statutes, regulations, and the terms and conditions of federal awards related to each of our federal programs and have identified and disclosed to you the requirements of federal statutes, regulations, and the terms and conditions of federal awards that are considered to have a direct and material effect on each major program.
f) We are responsible for establishing and maintaining, and have established and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that we are managing our federal awards in compliance with federal statutes, regulations, and the terms and conditions of federal awards that could have a material effect on our federal programs. We believe the internal control system is adequate and is functioning as intended. g) We have made available to you all federal awards (including amendments, if any) and any other correspondence with federal agencies or pass-through entities relevant to federal programs and related activities.
h) We have received no requests from a federal agency to audit one or more specific programs as a major program.
i) We have complied with the direct and material compliance requirements (except for noncompliance disclosed to you), including when applicable, those set forth in the OMB Compliance Supplement, relating to federal awards and have identified and disclosed to you all amounts questioned and all known noncompliance with the direct and material compliance requirements of federal awards OR confirm that there were no amounts questioned and no known noncompliance with the direct and material compliance requirements of federal awards.
j) We have disclosed any communications from federal awarding agencies and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications received from the end of the period covered by the compliance audit to the date of the auditor’s report.

Sept 14, 2023 Pg. 51
5 k) We have disclosed to you the findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor’s report. l) Amounts claimed or used for matching were determined in accordance with relevant guidelines in OMB‘s Uniform Guidance (2 CFR part 200, subpart E).
m) We have disclosed to you our interpretation of compliance requirements that may have varying interpretations.
n) We have made available to you all documentation related to compliance with the direct and material compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements.
o) We have disclosed to you the nature of any subsequent events that provide additional evidence about conditions that existed at the end of the reporting period affecting noncompliance during the reporting period.
p) There are no such known instances of noncompliance with direct and material compliance requirements that occurred subsequent to the period covered by the auditor’s report. q) No changes have been made in internal control over compliance or other factors that might significantly affect internal control, including any corrective action we have taken regarding significant deficiencies or material weaknesses in internal control over compliance, subsequent to the period covered by the auditor’s report.
r) Federal program financial reports and claims for advances and reimbursements are supported by the books and records from which the financial statements have been prepared. s) The copies of federal program financial reports provided to you are true copies of the reports submitted, or electronically transmitted, to the respective federal agency or pass-through entity, as applicable. t) We have issued management decisions for audit findings that relate to federal awards made to subrecipients and such management decisions have been issued within six months of acceptance of the audit report by the Federal Audit Clearinghouse. Additionally, we have followed-up ensured that the subrecipient has taken timely and appropriate action on all deficiencies detected through audits, on-site reviews, and other means that pertain to the federal award provided to the subrecipient. [Omit this item if there are no subrecipients.]
u) We have no subrecipient audits.
v) We have charged costs to federal awards in accordance with applicable cost principles. w) We are responsible for and have accurately prepared the summary schedule of prior audit findings to include all findings required to be included by the Uniform Guidance, and we have provided you with all information on the status of the follow-up on prior audit findings by federal awarding agencies and passthrough entities, including all management decisions. x) We are responsible for and have ensured the reporting package does not contain protected personally identifiable information.
y) We are responsible for and have accurately prepared the auditee section of the Data Collection Form as required by the Uniform Guidance.
z) We are responsible for taking corrective action on each audit finding of the compliance audit and have developed a corrective action plan that meets the requirements of the Uniform Guidance. aa) We have disclosed to you all contracts or other agreements with service organizations, and we have disclosed to you all communications from the service organizations relating to noncompliance at the service organizations.

Signature: Signature:

City of Avenal
Title: Title:

Sept 14, 2023 Pg. 52
DRAFT

City of Avenal
California
Report on Financial Statements
For the Year Ended June 30, 2020
Sept 14, 2023 Pg. 53
DRAFT

CITY OF AVENAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2020

TABLE OF CONTENTS
Page
INDEPENDENT AUDITOR’S REPORT......................................................................................................................................................1 BASIC FINANCIAL STATEMENTS:

Government-Wide Financial Statements:

Statement of Net Position....................................................................................................................................................................4 Statement of Activities.........................................................................................................................................................................5 Fund Financial Statements:

Governmental Funds:

Balance Sheet...........................................................................................................................................................................................7 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position…................................................................................................................................................................8 Statement of Revenues, Expenditures and Changes in Fund Balances..............................................................................9 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities............................................................................................10 Proprietary Funds:

Statement of Net Position.................................................................................................................................................................12 Statement of Revenues, Expenses and Changes in Net Position.......................................................................................13 Statement of Cash Flows…..............................................................................................................................................................14 Fiduciary Funds:

Statement of Fiduciary Net Position – Successor Agency of the Redevelopment Agency.....................................................................................................................................................................15 Statement of Changes in Fiduciary Net Position – Successor Agency of the Redevelopment Agency….................................................................................................................................................................16 Notes to the Basic Financial Statements..............................................................................................................................................18

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Changes in the City’s Net Other Postemployment Benefits Liability and Related Ratios...............................................................................................................................................................................................................51 Proportionate Share of Net Pension Liability....................................................................................................................................52 Schedule of Contributions….....................................................................................................................................................................53 Sept 14, 2023 Pg. 54
DRAFT

TABLE OF CONTENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
(Continued)
Page
REQUIRED SUPPLEMENTARY INFORMATION (Continued)
Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget to Actual:

General Fund…......................................................................................................................................................................................54 CalHOME Special Revenue Fund.................................................................................................................................................55 Home Program Income Special Revenue Fund........................................................................................................................56 CDBG Program Income Special Revenue Fund......................................................................................................................57 Home Investment Special Revenue Fund...................................................................................................................................58 Notes to the Required Supplementary Information.................................................................................................................59

OTHER SUPPLEMENTARY INFORMATION
Nonmajor Governmental Funds............................................................................................................................................................61 Combining Nonmajor Governmental Funds Statements:

Combining Balance Sheet – Nonmajor Governmental Funds............................................................................................62 Combining Statement of Revenues, Expenditures and
Changes in Fund Balances – Nonmajor Governmental Funds...........................................................................................63 Combining Balance Sheet – Nonmajor Special Revenue Funds…...................................................................................64 Combining Statement of Revenues, Expenditures and
Changes in Fund Balances – Nonmajor Special Revenue Funds…..................................................................................65 Combining Balance Sheet – Nonmajor Capital Projects Fund...........................................................................................66 Combing Statement of Revenues, Expenditures, and
Changes in Fund Balance – Nonmajor Capital Projects Fund…........................................................................................67 OTHER INDEPENDENT AUDITOR’S REPORT
Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.......................................................................................................69 Independent Auditor’s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by Uniform Guidance............................................................................................71 Schedule of Expenditures of Federal Awards.............................................................................................................................................73 Notes to the Schedule of Expenditures of Federal Awards…................................................................................................................74

FINDINGS AND QUESTIONED COSTS
Schedule of Findings and Questioned Costs................................................................................................................................................75 Summary of Prior Year Findings .....................................................................................................................................................................76 Corrective Action Plan.........................................................................................................................................................................................78 Sept 14, 2023 Pg. 55
1 DRAFT
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of Avenal, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Avenal, California (the City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Avenal, as of June 30, 2020, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Sotomayor & Associates, LLP
Certified Public Accountants
699 Hampshire Road, Suite 101
Westlake Village, California 91361
(626) 397-4900
Fax: (626) 397-4908
E-mail: [email protected]
Web Site www.sotomayorcpa.com
Sept 14, 2023 Pg. 56
2 DRAFT
Other Matters
Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the schedule of changes in the City’s net other postemployment benefits liability and related ratios, the proportionate share of net pension liability, the schedule of contributions, and budgetary comparison information be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements are presented for the purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements.

The combining nonmajor fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining nonmajor fund financial statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 24, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Sotomayor & Associates, LLP
Certified Public Accountants
August 24, 2023
Sept 14, 2023 Pg. 57
DRAFT

GOVERNMENT-WIDE FINANCIAL STATEMENTS
Sept 14, 2023 Pg. 58
The notes to the basic financial statements are an integral part of this statement. 4 DRAFT

CITY OF AVENAL

STATEMENT OF NET POSITION
JUNE 30, 2020
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 5,044,591 $ 6,224,665 $ 11,269,256 Cash with fiscal agent 838,948 - 838,948
Receivables:

Consumer receivables - 737,453 737,453
Taxes 227,351 - 227,351
Intergovernmental 1,452,710 - 1,452,710
Community loans 12,027,974 - 12,027,974
Notes 64,600 - 64,600
Internal balances 3,299,338 (3,299,338) -
Due from Successor Agency 2,225,000 - 2,225,000
Inventories - 73,694 73,694
Other assets - 12,962 12,962
Non-depreciable 1,898,906 101,000 1,999,906
Depreciable, net of accumulated depreciation 16,984,757 12,762,967 29,747,724 Total assets 44,064,175 16,613,401 60,677,576

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 699,567 567,049 1,266,616 Deferred outflows from OPEB 1,027,579 544,612 1,572,191 Total deferred outflows of resources 1,727,146 1,111,661 2,838,807

LIABILITIES
Accounts payable 476,008 176,772 652,780
Accrued interest payable 111,323 - 111,323
Consumer deposits - 81,612 81,612
Due to Successor Agency 298,132 - 298,132
Due in one year:

Compensated absences 157,103 33,889 190,991
Revenue bond payable 390,000 - 390,000
Noncurrent liabilities:

Compensated absences 17,766 94,104 111,870
Revenue bond payable 5,195,000 - 5,195,000
Net pension liability 1,145,235 1,959,194 3,104,429
Other postemployment benefit obligation 9,734,058 5,158,996 14,893,054 Total liabilities 17,524,625 7,504,566 25,029,191

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 37,804 158,385 196,189
Deferred inflows from OPEB 1,716,845 909,918 2,626,763
Total deferred inflows of resources 1,754,649 1,068,303 2,822,952

NET POSITION
Net investment in capital assets 13,298,663 12,863,967 26,162,630 Restricted for:

Highway and streets 1,332,818 - 1,332,818
Community development 1,859,587 - 1,859,587
Unrestricted 10,020,979 (3,711,774) 6,309,205
Total net position $ 26,512,047 $ 9,152,193 $ 35,664,240 Sept 14, 2023 Pg. 59
The notes to the basic financial statements are an integral part of this statement. 5 DRAFT

CITY OF AVENAL

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020
Net (Expense) Revenue and
Program Revenues Changes in Net Position
Charges For
Operating
Grants and
Capital
Grants and Governmental
BusinessType
Expenses Services Contributions Contributions Activities Activities Total FUNCTIONS/PROGRAMS:

Governmental activities:

General government $ 1,050,145 $ 26,737 $ 67,979 - $ (955,429) $ - $ (955,429) Building regulations 144,636 - - - (144,636) - (144,636) Planning - 12,592 - - 12,592 - 12,592
Community development 4,283,426 69,654 3,987,790 - (225,982) - (225,982) Public safety: -
Law enforcement 5,323,089 208,995 - - (5,114,094) - (5,114,094) Animal control 216,094 60,296 - - (155,798) - (155,798) Parks and recreation 451,835 1,868 - - (449,967) - (449,967) Highway & Streets 1,609,954 - 1,060,383 - (549,571) - (549,571) Interest on long-term debt 280,487 - - - (280,487) - (280,487) Total governmental activities 13,359,666 380,142 5,116,152 - (7,863,372) - (7,863,372) Business-type activities:

Water 3,455,374 3,077,869 - - - (377,505) (377,505)
Sewer 1,988,235 1,648,744 - - - (339,491) (339,491)
Solid waste 884,769 609,114 130,452 - - (145,203) (145,203) Street light 56,617 62,952 - - - 6,335 6,335
Total business-type activities 6,384,995 5,398,679 130,452 - - (855,864) (855,864) Total $ 19,744,661 $ 5,778,821 $ 5,246,604 $ - $ (7,863,372) $ (855,864) $ (8,719,236) General revenues:

Taxes:

Property taxes 286,432 - 286,432
Sales taxes 309,517 - 309,517
Franchise taxes 310,977 - 310,977
Other taxes 6,258 - 6,258
Motor vehicle in-lieu 2,068,418 - 2,068,418
Rental income 480,909 - 480,909
Investment income 50,151 26,942 77,093
Miscellaneous 764,631 36,620 801,251
Transfers (123,507) 123,507 -
Total general revenues and transfers 4,153,786 187,069 4,340,855 Change in net position (3,709,586) (668,795) (4,378,381) Net position - beginning 30,221,633 9,878,857 40,100,490 Prior period restatement* - (57,869) (57,869)
Net position - beginning (restated) 30,221,633 9,820,988 40,042,621 Net position - ending $ 26,512,047 $ 9,152,193 $ 35,664,240 * Prior period adjustment is required due to correction of interest income in various funds and Avenal City Operating Authority Fund balance not reported Sept 14, 2023 Pg. 60
6 DRAFT
THIS PAGE IS LEFT BLANK INTENTIONALLY.

Sept 14, 2023 Pg. 61
7 DRAFT

FUND FINANCIAL STATEMENTS
Sept 14, 2023 Pg. 62

CITY OF AVENAL
The notes to the basic financial statements are an integral part of this statement. 7 DRAFT
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2020
General
Fund
Avenal
Public
Financing
Authority
Debt Service
Fund
CalHOME
Special
Revenue
Fund
HOME
Program
Income
Special
Revenue
Fund
CDBG
Program
Income
Special
Revenue
Fund
Home Investment
Special Revenue
Funds
Other
Governmental
Funds
Total
Governmental
Funds
ASSETS
Cash and investments $ 2,871,512 $ - $ 171,154 $ 154,519 $ (270) $ (26,103) $ 1,873,779 $ 5,044,591 Cash with fiscal agent 246,000 592,948 - - - - - 839,948 Receivables:

Taxes 227,351 - - - - - - 227,351
Intergovernmental - - - - - 60,796 1,391,914 1,452,710
Community loans - - 2,583,909 5,358,251 4,085,814 - - 12,027,974 Notes 64,600 - - - - - - 64,600
Interfund receivables - - - - - - - -
Due from Successor Agency - 2,225,000 - - - - - 2,225,000 Advances to other funds - 3,595,000 - - - - - 3,595,000 Total assets $ 3,409,463 $ 6,412,948 $ 2,755,063 $ 5,512,770 $ 4,085,544 $ 34,693 $ 3,265,693 $ 25,476,174

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 293,236 $ - $ - $ - $ - $ - $ 182,772 $ 476,008 Due to Successor Agency - 298,132 - - - - - 298,132
Interfund payables - - - - - - - -
Advances from other funds - 295,662 - - - - - 295,662
-
Total liabilities 293,236 593,794 - - - - 182,772 1,069,802

DEFERRED INFLOWS OF

RESOURCES
Unavailable revenues - loans - - 2,583,909 5,358,252 4,085,813 - - 12,027,974 Total deferred inflows of resources - - 2,583,909 5,358,252 4,085,813 - - 12,027,974 Fund balances:

Nonspendable:

Notes receivable 64,600 - - - - - - 64,600
Restricted for:

Public safety - - - - - - - -
Highways and streets - - - - - 34,693 1,298,125 1,332,818 Community development - - 171,154 154,518 (269) - 1,534,184 1,859,587 Debt service - 5,819,154 - - - - - 5,819,154
Committed:

Capital projects - - - - - - 9,696 9,696
Assigned:

General government - - - - - - - -
Unassigned 3,051,627 - - - - - 240,915 3,292,542
Total fund balances 3,116,227 5,819,154 171,154 154,518 (269) 34,693 3,082,920 12,378,397 Total liabilities and fund balances $ 3,409,463 $ 6,412,948 $ 2,755,063 $ 5,512,770 $ 4,085,544 $ 34,693 $ 3,265,692 $ 25,476,173 Sept 14, 2023 Pg. 63
The notes to the basic financial statements are an integral part of this statement. 8 CITY OF AVENAL
DRAFT

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE

SHEET TO THE STATEMENT OF NET POSITION
JUNE 30, 2020
Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances -governmental funds $ 12,378,397
Capital assets used in governmental activities were not current financial resources and, therefore, were not reported in the governmental funds. 18,883,663 Long-term liabilities were not due and payable in the current period; therefore, they are not reported in the governmental funds balance sheet:

Net pension liability (1,145,234)
Other postemployment benefits (9,734,058)
Loan payable (5,585,000)
Compensated absences (174,869)
Unmatured interest on long-term debt is not accrued in the governmental funds, but rather is recognized as an expenditure when due. (111,323) Pension related deferrals are reported as deferred outflows and inflows of resources on the Statement of Net Position. 661,763
Post employment benefit deferrals are reported as deferred outflows and inflows of resources on the Statement of Net Position (689,266) Other long-term assets are not available to pay for current period expenditures and, therefore, they are deferred in the governmental funds. 12,027,974 Net position of governmental activities $ 26,512,047
Sept 14, 2023 Pg. 64
The notes to the basic financial statements are an integral part of this statement. 9 CITY OF AVENAL
DRAFT

STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
JUNE 30, 2020
General
Fund
Avenal
Public
Financing
Authority
Debt Service
Fund
CalHOME
Special
Revenue
Fund
HOME
Program
Income
Special
Revenue
Fund
CDBG
Program
Income
Special
Revenue
Fund
Home
Investment
Special Revenue
Funds
Other
Governmental
Funds
Total
Governmental
Funds

REVENUES
Property taxes 2,350,382 -
- - - - - 2,350,382
Other taxes 631,250 - - - - - - 631,250
Intergovernmental revenues 221,802 - - - - 1,206,445 3,678,133 5,106,380 Charges for services 104,437 - - - - - - 104,437
Licenses and permits 86,180 - - - - - - 86,180
Fines and penalties 26,481 - - - - - - 26,481
Investment income 47,333 - 77 39 6 23 2,673 50,151
Rents 389,773 - - - -
- 91,136 480,909
Loan repayments - - 106,819 89,514 7,524 - - 203,857
Other revenue 123,970 884,641 - - - - - 1,008,611
Total revenues 3,981,608 884,641 106,896 89,553 7,530 1,206,468 3,771,942 10,048,638

EXPENDITURES
Current:

General government 665,084 -
- - - - 40,943 706,027
Building regulation 143,266 -
- - - - - 143,266
Community development 574,677 - 360 1,100 600 1,554,899 2,192,937 4,324,573 Public safety:

Law enforcement 3,180,975 - - - -
- - 3,180,975
Animal control 212,498 - - - -
- - 212,498
Parks and recreation 506,698 - - - -
- 23,727 530,425
Highways and streets -
- - - -- 469,074 469,074
Capital outlay:

General government 62,069 - - - -
- - 62,069
Building regulation -
- - - -- - -
Community development -
- - - -- - -
Public safety:

Law enforcement -
- - - -- - -
Animal control -
- - - - - - -
Parks and recreation 8,554 - - - - - 20,385 28,939
Highways and streets -
- - - - - 100,978 100,978
Debt service: -
Principal - 740,000 - - - - - 740,000
Interest - 280,487 - - - - - 280,487
Total expenditures 5,353,821 1,020,487 360 1,100 600 1,554,899 2,848,044 10,779,311 Excess (deficiency) of revenues over
(under) expenditures (1,372,213) (135,846) 106,536 88,453 6,930 (348,431) 923,898 (730,673)

OTHER FINANCING SOURCES
(USES)
Transfers in 366,983 - - - - - (1) 366,982
Transfers out (326,711) - - - (73,779) - (90,000) (490,490) Total other financing sources (uses) 40,272 - - - (73,779) - (90,001) (123,508) Net change in fund balances (1,331,941) (135,846) 106,536 88,453 (66,849) (348,431) 833,897 (854,181) Fund balances - beginning 4,448,168 5,955,000 64,618 66,065 66,580 383,124 2,249,023 13,232,578 Prior Period adjustments - - - - - - - -
Fund balances - ending $ 3,116,227 $ 5,819,154 $ 171,154 $ 154,518 $ (269) $ 34,693 $ 3,082,920 $ 12,378,397 Sept 14, 2023 Pg. 65

CITY OF AVENAL
The notes to the basic financial statements are an integral part of this statement. 10 DRAFT

RECONCILIATION OF THE GOVERNMENTAL FUNDS

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN

FUND BALANCES TO THE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020
Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds $ (854,181) Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those assets are capitalized. This is the amount of capital assets recorded. -
Depreciation expense on capital assets is reported in the government-wide statement as changes in net position, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure in the governmental funds. (2,115,143)
Changes to net pension liability and pension related deferred outflows and inflows of resources do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. (61,629) Community loans are reported in the governmental funds as expenditures and are not expenses in the statement of activities. This is the amount of community loans given. (26,142)
Compensated absences expense reported in the statement of activities does not require the use of current financial resources and, therefore, is reported as an expenditure in the governmental funds. -
Repayment of long-term principal is an expenditure in governmental funds, but the repayment reduced long-term liabilities in the government-wide statement of net position. 740,000
Other post-employment benefit expense is reported in the government-wide statement of activities, but it does not require the use of current financial resources.

Therefore, the expense is not reported as an expenditure in the governmental funds. (1,392,491)
Change in net position of governmental activities $ (3,709,586) Sept 14, 2023 Pg. 66
DRAFT
THIS PAGE IS LEF T BLANK INTENTIONALLY.

Sept 14, 2023 Pg. 67
DRAFT

PROPRIETARY FUNDS
Sept 14, 2023 Pg. 68

CITY OF AVENAL
The notes to the basic financial statements are an integral part of this statement. 12 DRAFT

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2020
Water Sewer Solid Waste Street Light
Fund Fund Fund Fund Total
ASSETS
Current assets:

Cash and investments $ 2,281,638 $ 2,765,945 $ 639,015 $ 538,068 $ 6,224,665 Consumer receivables 459,195 171,862 98,986 7,410 737,453 Supplies inventory 60,375 13,319 - - 73,694
Other assets 12,962 - - - 12,962
Total current assets 2,814,170 2,951,126 738,001 545,478 7,048,775 Noncurrent assets:

Advances to other funds 295,662 - - - 295,662
Capital assets:

Nondepreciable 100,000 - 1,000 - 101,000
Depreciable, net 8,878,939 3,350,960 - 533,068 12,762,967 Total noncurrent assets 9,274,601 3,350,960 1,000 533,068 13,159,629 Total assets 12,088,771 6,302,086 739,001 1,078,546 20,208,404

DEFERRED OUTFLOWS OF

RESOURCES
Deferred outflows from OPEB 272,306 272,306 - - 544,612 Deferred outflows from pensions 85,490 188,410 293,149 - 567,049 Total deferred outflows of resources 357,796 460,716 293,149 - 1,111,661

LIABILITIES
Current liabilities:

Accounts payable 131,054 2,270 42,966 482 176,772
Deposits 81,672 (14) (32) (14) 81,612
Compensated absences 12,111 20,962 815 - 33,888
Total current liabilities 224,837 23,218 43,749 468 292,272 Noncurrent liabilities:

Advances from other funds 3,595,000 - - - 3,595,000
Compensated absences 34,984 55,315 3,805 - 94,104
Net pension liability 296,177 1,366,427 296,593 - 1,959,194 Other postemployment benefits obligation 2,579,498 2,579,498 - - 5,158,996 Total noncurrent liabilities 6,505,659 4,001,240 300,398 - 10,807,288 Total liabilities 6,730,496 4,024,458 344,147 465 11,099,557

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from OPEB 454,959 454,959 - - 909,918
Deferred inflows from pensions 23,520 49,490 85,375 - 158,385 Total deferred inflows of resources 478,479 504,449 85,375 - 1,068,309

NET POSITION
Net investment in capital assets 8,978,939 3,350,960 1,000 533,068 12,863,967 Unrestricted (3,741,347) (1,117,065) 601,628 545,013 (3,711,771) Total net position $ 5,237,592 $ 2,233,895 $ 602,628 $ 1,078,081 $ 9,152,193 Sept 14, 2023 Pg. 69
The notes to the basic financial statements are an integral part of this statement. 13 CITY OF AVENAL
DRAFT

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Water Sewer Solid Waste Street Light
Fund Fund Fund Fund Total
Operating revenues
Charges for services $ 3,162,164 $ 1,686,867 $ 636,114 $ 63,381 $ 5,548,526 Operating expenses:

Personnel costs 1,134,494 1,163,382 152,727 23 2,450,626 Operations 400,421 99,124 - - 499,545
Contract services - - 611,884 - 611,884
Franchise 87,506 - - - 87,506
Utilities 958,726 165,375 - 28,418 1,152,519
Administration 356,694 357,721 120,158 - 834,573
Depreciation 517,533 202,633 - 28,176 748,342
Total operating expenses 3,455,374 1,988,235 884,769 56,617 6,384,995 Operating income (loss) (293,210) (301,368) (248,655) 6,764 (836,469) Nonoperating revenues (expenses):

Connection fees 5,705 4,811 - - 10,516
Other revenue 26,433 - 9,323 864 36,620
Other surcharges and surtaxes - - 130,452 - 130,452
Interest income 16,977 7,387 2,329 249 26,942
Department of Correction - 7,067 - - 7,067
Interest expense (167,427) - - - (167,427)
Total nonoperating revenues
(expenses) (118,312) 19,265 142,104 1,113 44,170
Other financing sources (uses):

Transfers in - - 123,507 - 123,507
Total other financing sources (uses) - - 123,507 - 123,507 Change in net position (411,522) (282,104) 16,956 7,877 (668,792) Net position - beginning 5,706,983 2,515,999 585,672 1,070,204 9,878,858 Prior period restatement* (57,869) - - - (57,869)
Net position - beginning (restated) 5,649,114 2,515,999 585,672 1,070,204 9,820,989 Net position - ending $ 5,237,592 $ 2,233,895 $ 602,628 $ 1,078,081 $ 9,152,193 * Prior period adjustment is required due to correction of interest income in various funds and Avenal City Operating Authority Fund balance not reported Sept 14, 2023 Pg. 70
The notes to the basic financial statements are an integral part of this statement. 14 CITY OF AVENAL
DRAFT

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Water Sewer Solid Waste Street Light
Fund Fund Fund Fund Total
Cash flows from operating activities:

Cash received from customers $ 2,964,650 $ 1,651,292 $ 589,746 $ 60,987 $ 5,266,675 Cash payments to suppliers for goods and services (1,812,962) (665,569) (104) (30,529) (2,509,164) Cash payments to employees for services (1,004,332) (1,131,877) (141,833) (23) (2,278,065) Cash payments to Other - - (707,811) - (707,811)
Net cash provided (used) by operating activities 147,356 (146,154) (260,002) 30,435 (244,488) Cash flows from noncapital financing activities:

Prior period adjustment (57,868) - - - (57,868)
Cash received/paid from other funds (135,000) - 123,507 864 (10,629) Cash received for connection fees 32,138 11,876 139,775 - 183,789 Net cash provided (used) by noncapital financing activities (160,730) 11,876 263,282 864 115,292 Cash flows from capital and related financing activities:

Acquisition of capital assets (141,902) - - - (141,902) Gain (Loss) on Disposal of Equipment 60,115 60,115
Interest paid on capital debt (167,427) - - - (167,427) Net cash provided (used) by capital and related financing activities (249,214) - - - (249,214)
Cash flows from investing activities:

Interest on investments 16,977 7,387 2,329 249 26,942
Net cash provided (used) by investing activities 16,977 7,387 2,329 249 26,942 Increase (decrease) in cash and cash equivalents (245,611) (126,891) 5,609 31,548 (35,345) Cash and cash equivalents - July 1 2,527,249 2,892,835 633,406 506,520 6,560,010 Cash and cash equivalents - June 30 $ 2,281,638 $ 2,765,945 $ 639,015 $ 538,068 $ 6,224,665 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ (293,210) $ (301,368) $ (248,655) $ 6,764 $ (836,469) Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation 517,533 202,633 - 28,176 748,342
Changes in assets, deferred outflows of resources,
Liabilities and deferred inflow of resources:
(Increase) decrease in consumer receivables (197,514) (35,575) (46,368) (2,394) (281,851) (Increase) decrease in supplies inventory 3,774 (6,315) - - (2,541) (Increase) decrease in receivables from other funds 7,492 - - - 7,492 (Increase) decrease in deferred outflows of resources
for pensions (123,030) (125,627) 28,504 - (220,153)
(Increase) decrease in deferred outflows of resources
for OPEB (235,646) (235,646) - - (471,292)
Increase (decrease) in accounts payable (39,434) (37,033) (104) (2,110) (78,681) Increase (decrease) in consumer deposits 18,551 - - - 18,551 Increase (decrease) in compensated absences payable 15,336 19,315 1,045 - 35,696 Increase (decrease) in other postemployment benefits
obligation (33,342) (163,045) - - (196,387)
Increase (decrease) in net pension liability 80,723 114,250 8,474 - 203,447 Increase (decrease) in deferred inflows of resources
for pensions (14,551) (18,414) (2,897) - (35,862)
Increase (decrease) in deferred inflows of resources
for OPEB 440,672 440,672 - - 881,344
Net cash provided (used) by operating activities $ 147,354 $ (146,153) $ (260,001) $ 30,436 $ (228,364) Sept 14, 2023 Pg. 71

CITY OF AVENAL

STATEMENT OF FIDUCIARY NET POSITION

SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
JUNE 30, 2020
Trust
Funds
The notes to the basic financial statements are an integral part of this statement. 15 DRAFT
ASSETS
Current assets:

Cash and investments $ 550,903
Due from City of Avenal 313,973
Total current assets 864,876
Land Inventory -
Total noncurrent assets -
Total assets 864,876

LIABILITIES
Current liabilities:

Accounts payable -
Total current liabilities -
Due to City of Avenal Public Finance Authority 1,990,000 Total noncurrent liabilities 1,990,000
Total liabilities 1,990,000

NET POSITION
Held in trust
$ (1,125,124)
Sept 14, 2023 Pg. 72

CITY OF AVENAL

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
JUNE 30, 2020
Trust
Funds
The notes to the basic financial statements are an integral part of this statement. 16 DRAFT

ADDITIONS
Intergovernmental revenues $ 550,859
Interest (5,798)
Total additions 545,060

DEDUCTIONS
Planning and community development 164,799
Bond principal payments -
Interest and fiscal charges 93,551
Total deductions 258,350
Change in net position 286,711
Net position - beginning (1,412,274)
Prior year adjustments 439
Net position - ending $ (1,125,124)
Sept 14, 2023 Pg. 73
DRAFT

NOTES TO THE BASIC FINANCIAL STATEMENTS
Sept 14, 2023 Pg. 74

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
18 DRAFT
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the City of Avenal have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board is the accepted standard-setting body for governmental accounting and financial reporting principles. The most significant of the government’s accounting principles are described below.

Reporting Entity
The City of Avenal (the “City”) was incorporated in 1979 as a general law city. The City has a council/manager form of government and is governed by a five-member elected council. The City Manager is appointed by the City Council. The City provides the following services: public safety (law enforcement, animal control, and emergency services), water utility, sanitation (solid waste disposal and sanitary wastewater), parks and recreation, planning and community development, public works, street maintenance, building regulation and general administrative services.

The accompanying basic financial statements include the financial activities of the City; the primary government; and its component unit, the Avenal Public Financing Authority (the “Authority”). Financial information for the City and this component unit are accounted for in the accompanying financial statements in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board. The City Council members, in separate session, serve as the governing board of the Authority. As such, this entity is presented on a blended basis.

No separate annual financial statements are prepared for the Authority.

Blended Component Units
The Avenal Public Financing Authority (the Authority) is a joint exercise of powers authority organized and existing under and pursuant to a Joint Exercise of Powers Agreement dated March 20, 1989. The agreement is between the City and the Authority, and under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the Government Code for the purpose of financing the acquisition of bonds, notes and other obligations to provide financing for public capital improvements to be owned by the City or the Authority. The City Council acts as the governing board of the Authority and is responsible for the Authority’s fiscal and administrative activities. The funds of the Authority have been included in the governmental activities of the financial statements.

Basis of Presentation
The accounts of the City are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained consistent with legal and managerial requirements.

The statement of net position and the statement of activities display information about the primary government (the City) and its component unit. These statements include the financial activities of the overall government, except for fiduciary activities. Eliminations have been made to minimize the double-counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities are generally financed through taxes, intergovernmental revenues, and other non-exchange transactions. Business-type activities are financed in whole or in part by fees charged to external parities.

Sept 14, 2023 Pg. 75
19 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued)
The statement of activities presents a comparison between direct expenses and program revenues for each different identifiable activity of the City’s business-type activities and for each of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are included in the program expense reported for individual function. Certain indirect costs, which cannot be identified and broken down, are included in the program expense reported for individual functions and activities. Program revenues include 1) fines, fees, and charges paid by the recipients of goods and services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes are presented instead as generalrevenues.

Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables and receivables. All internal balances in the statement of net position have been eliminated, except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the statement of activities, interfund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated: Due to/Due from Other Funds, Advance to Other Funds/Advance from Other Funds, and Transfers In/Transfer Out.

Fund Financial Statements – The fund financial statements provide information about the City’s funds. Separate statements for each fund category – governmental and proprietary – are presented. The emphasis of fund financials is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. All accompanying schedules are presented to reconcile and explain the differences in funds and changes in fund balances as presented in these statements to the net position and changes in net position presented in the government-wide financialstatements.

Propriety fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses.

The City reports the following major governmental funds:

The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund.

The Avenal Public Financing Authority Debt Service Fund is used to account for the repayment of debt issued by the Avenal Public Financing Authority.

The CalHOME Special Revenue Fund is used to account for CalHOME grant activities.

The HOME Program Income Special Revenue Fund is used to account for HOME Investment Partnership loan repayments. Receipts are transferred to the appropriate funds.

The CDBG Program Income Special Revenue Fund is used to account for community development block grant loan repayments.

The HOME Investment Special Revenue Funds is used for federal HOME Investment Partnership grants activity.

Sept 14, 2023 Pg. 76
20 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Presentation (Continued)
Enterprise fund financial statements include a statement of net position, a statement of revenues, expenses and changes in net position, and a statement of cash flows for each major enterprise fund.

The City has four enterprise funds – the Water, Sewer, Solid Waste, and Street Light – which are used to account for operations that are financed and operated in a manner similar to private business enterprise. In an enterprise fund, the intent of the City Council is that the costs (expenses, including depreciation) of providing services to the general public, on a continuing basis, be financed or recovered primarily through user charges.

The City reports the following major proprietary funds:

The Water Fund is used to account for financial activity of the water utility system.

The Sewer Fund is used to account for the financial activity of the sewage collections wastewater treatment utility system.

The Solid Waste Fund is used to account for the financial activity of the solid waste utility system.

The Street Light Fund is used to account for the financial activity of the street light system.

The City’s fiduciary funds represent agency trust funds, which are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The agency trust funds are accounted for on an economic resources measurement focus and accrual basis of accounting.

The City reports the following fiduciary fund:

The Successor Agency of the Redevelopment Agency is used to account for assets liabilities of the former redevelopment agency until they are distributed to other units of state and local government as a result of the dissolution of the redevelopment agency.

Measurement Focus Basis of Accounting
Government-Wide and Proprietary Fund Financial Statements – The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flow takes place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenues from sales taxes are recognized when the underlying transactions take place. Revenues from grants, entitlements, and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.

Sept 14, 2023 Pg. 77
21 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Measurement Focus, Basis of Accounting (Continued)
Governmental Fund Financial Statements – Governmental funds are reported using current financial resources measurement focus and modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Property and sales taxes, interest, certain state and federal grants, and charges for services are accrued when their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. Expenditures are generally recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other financing sources.

The City applies all applicable GASB pronouncements (including all NCGA Statements and Interpretations currently in effect), as well as the following pronouncements issued on or before November 30, 1989, unless those pronouncements conflict with or contradict GASB pronouncements: Financial Accounting Standards Board (FASB) Statements and Interpretations, Accounting Principles Board (APB) Opinions, and Accounting Research Bulletins (ARB) of the committee on Accounting Procedure. In addition, the City applies all FASB Statements and Interpretations issued after November 30, 1989, except those that conflict with or contradict GASB pronouncements, to its business-type activities.

Propriety funds distinguish operating revenues and expenses from non-operating items. Operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of each fund. Nonoperating revenues, such as interest income, state and federal grants, and subsidies, result from nonexchange transactions or ancillary activities. Operating expenses include costs for providing services and delivering goods such as administrative expenses and depreciation on capital assets. All other expenses not meeting this definition are reported as non-operating expenses.

Assets, Liabilities and Net Position
Cash and Cash Equivalents
For purposes of the statement of cash flows, the City considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

All cash and cash equivalents of the proprietary funds are pooled with the City’s pooled cash and cash equivalents.

The City follows the practice of pooling the cash from all funds for investment purposes.

Receivables
Proprietary fund receivables are shown net of allowance for uncollectible accounts. All customers are billed monthly.

The estimated value of services provided, but unbilled at year-end, has been included in the accompanying financial statements.

Grant and entitlement revenues are recorded as receivables in the funds when all eligibility requirements have been met.

The corresponding governmental fund revenues are recorded when they become available, with the differences recorded as deferred revenue. Proprietary fund revenues are recorded as non-operating revenues when the receivables are recorded. Some grant and entitlement revenues are not susceptible to accrual, in which case the corresponding revenues are recorded when received.

The City accrues as receivable all property taxes received during the first sixty (60) days of the new fiscal year.

Sept 14, 2023 Pg. 78
22 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position (Continued)
Supplies Inventory and Prepaid Items
Inventory items are recorded as expenditures at the time of purchase. Records are not maintained for inventory and supplies on hand.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Interfund Transactions
Activity between funds that represent lending/borrowing arrangements outstanding at the end of the fiscal year is referred to as either “interfund receivables/payables” (i.e. the current interfund loans) or “advances to/advances from” (i.e. the noncurrent interfund loans). Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

Capital Assets
The City’s assets are capitalized at historical cost or estimated historical cost. City policy has set the capitalization threshold for reporting capital assets at $5,000. The City has chosen not to capitalize infrastructure in place prior to the adoption of GASB Statement No. 34. Gifts or contributions of capital assets are recorded at fair value when received.

Depreciation is recorded on a straight-line basis over the useful lives of the assets asfollows:

Buildings.........................................................10-50 years Improvements...................................................5-10 years Machinery and equipment................................3-25 years Infrastructure ..................................................15-50 years In June 1999, the Governmental Accounting Standards Board (GASB) issued Statement No. 34 which requires the inclusion of infrastructure capital assets in local governments’ basic financial statements. In accordance with this statement, the City has included the value of all infrastructure capital assets acquired since the beginning of the 2003 fiscal year into the current year basic financial statements.

The City defines infrastructure as capital assets that are stationary and have expected useful lives significantly in excess of most capital assets. The assets include the street system, water purification and distribution system, sewer collection and treatment system, parks and recreation improvement, storm water conveyance system, and buildings combined with the site amenities, such as parking and landscaped areas used by the City in the conduct of its business.

Interest Payable
In the government-wide financial statements, interest payable of long-term debt is recognized as the liability is incurred for government fund types and proprietary fund types.

In the fund financial statements, proprietary fund types recognize the interest payable when the liability is incurred.

Unearned Revenue
Unearned revenue is that for which asset recognition criteria have been met, but for which revenue recognition criteria have not been met. The City typically records unearned revenues related to intergovernmental revenues (primarily grants and subventions) received but not earned (qualifying expenditures not yet incurred).

Sept 14, 2023 Pg. 79
23 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position (Continued)
Unavailable Revenue
In the fund financial statements, unavailable revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unavailable revenue for transactions for which revenues have been earned, but for which funds are not available to meet current financial obligations. Typical transactions for which unavailable revenue is recorded are intergovernmental revenues when funding requirements have been met, but the related funding is not yet available.

Compensated Absences Payable
It is the City’s policy to permit employees to accumulate a maximum amount of 320 hours of earned or unused vacation and sick leave. Sick leave is accumulated at 8 hours per month for full-time regular employees. Vacation is accumulated at 10 days per year for full-time regular employees with less than five years of service and employees earn an additional day for each year after five years. This amount is included as a liability in the government-wide and proprietary fund financial statements.

Long-Term Debt
In the government-wide and proprietary fund financial statements, long-term debt and other long-term obligations are reported as liabilities.

Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Avenal’s California Public Employees’ Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Property Tax Calendar
Property taxes are assessed, collected and allocated by Kings County throughout the fiscal year according to the following property tax calendar.

Lien Date January 1
Levy Date July 1 to June 30
Due Dates November 1,1st installment; February 1,2
nd installment
Delinquent Dates December 10, 1
st installment; April 10, 2nd installment
Revenues from taxpayer-assessed taxes (sales and use, business license, transient occupancy, utility users, gas, and franchise fees) are accrued in the governmental funds when they are both measurable and available. The City considers these revenues available if they are received during the period when settlement of prior fiscal year accounts payable occurs. Historically, the majority of these taxes are received within 60 days of the fiscal year-end.

Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.

Sept 14, 2023 Pg. 80
24 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position (Continued)
Classification of Net Position
In the government-wide financial statements, net position is classified in the following categories:

Net Investment in capital assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category.

Restricted net position – This category presents external restrictions imposed by creditors, grantors, contributors, or by laws or regulations of other governments, and restrictions imposed by law through constitutional provisions and enabling legislation. Additionally, this category presents restrictions placed on the categories of capital projects, and specific projects and programs as established by the City Council.

Unrestricted net position – This category consists of all resources that do not meet the definition of “net investment in capital assets” or “restricted net position.”
When an expense is incurred for purposes for which both restricted and unrestricted net position are available, the City’s policy is to apply restricted resources first and then unrestricted resources as needed.

Fund Balance Classification
The governmental fund financial statements present fund balances based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. The classifications used in the governmental fund financial statements are as follows:
• Nonspendable: This classification includes amounts that cannot be spent because they are either (a) not in spendable form or (b) are legally or contractually required to be maintained intact. The City has classified inventories and prepaid items as being Nonspendable as these items are not expected to be converted to cash or are not expected to be converted to cash within the next year. • Restricted: This classification includes amounts for which constraints have been placed on the use of the resources either (a) externally imposed by creditors (such as through a debt covenant), grantors, contributors, or laws or regulations of other governments, or (b) imposed by law through constitutional provisions or enabling legislation. Debt service resources are to be used for future servicing of the revenue note and are restricted through debtcovenants.
• Committed: This classification includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the City Council. These amounts cannot be used for any other purpose unless the City Council removes or changes the specified use by taking the same type of action (ordinance or resolution) that was employed when the funds were initially committed. This classification also includes contractual obligations to the extent that existing resources have been specifically committed for use in satisfying those contractualrequirements.
• Assigned: This classification includes amounts that are constrained by the City’s intent to be used for a specific purpose but are neither restricted nor committed. This intent can be expressed by the City Council or through the City Council delegating this responsibility to the City manager through the budgetary process. This classification also includes the remaining positive fund balance for all governmental funds except for the GeneralFund.
• Unassigned: This classification includes amounts that have not been assigned to other funds or restricted, committed or assigned to a specific purpose within theCity.

The City would typically use restricted resources first, followed by committed resources, and then assigned resources, as appropriate opportunities arise, but reserves the right to selectively spend unassigned resources first to defer the use of these other classified funds.

Sept 14, 2023 Pg. 81
25 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Assets, Liabilities and Net Position (Continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Accordingly, actual results could differ from those estimates.

NOTE 2 – CASH AND INVESTMENTS
The City follows the practice of pooling cash and investments in all funds. Interest income earned on pooled cash and investments is allocated monthly to the various funds based on the month-end cash and investment balances.

Summary of Deposits and Investments
A reconciliation of the City’s deposit and investment balances as of June 30, 2020 is as follows:

Cash on hand $ 350
Primary government deposits 8,863,978
Local Agency Investment Fund 3,367,058
U.S. government securities 839,794
Total cash and investments $ 13,071,180
Government-Wide:

Statement of Net Position:

Cash and investments $ 11,680,483
Cash with fiscal agent 839,794
Fiduciary Funds 550,903
Total $ 13,071,180
Sept 14, 2023 Pg. 82
26 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 2 – CASH AND INVESTMENTS (Continued)
Investments Authorized by the California Government Code and the City’s Investment Policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provision of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Securities of U.S. Government, or its agencies
Certificates of Deposit (or time deposits) placed with
commercial banks and/or savings and loan companies
Negotiable Certificates of Deposit
Bankers' Acceptances
Local Agency Investment Fund deposits (state pool)
Repurchase Agreements (Repos)
Passbook savings account demand deposits
Investments Authorized by the Debt Agreements
Investment of debt proceeds held by the bond trustee are governed by provisions of the debt agreements rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risks, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Type Maturity of Portfolio Non Issuer U.S. Treasury Bonds/Bills None None None
U.S. Government Agency Bonds None None None
Negotiable Certificates of Deposit 365 days None None
Time Certificates of Deposit 365 days None None
Banker's Acceptances 365 days None None
Commercial Paper 365 days None None
Money Market Fund None None None
All the City’s investment activities were within State statutes and the City’s investment policy.

Sept 14, 2023 Pg. 83
27 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 2 – CASH AND INVESTMENTS (Continued)
Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways the City manages its exposure to interest rate risk is by maintaining funds in liquid, shortterm investments which can be converted to cash when necessary to meet disbursement requirements.

Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity.

Remaining Maturity (in Months)
12 Months 13 to 60 More than 60
Investment Type Total or Less Months Months
State investment pool $ 3,367,058 $ 3,367,058 $ - $ -
Morgan Stanley certificate of
deposit with Multi Bank Securities 246,000 - 246,000 -
Held by bond trustee:

Treasury obligation funds 593,794 593,794 - -
Total $ 4,206,853 $ 3,960,853 $ 246,000 $ -
Concentration of Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. The City does not have any investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% or more of total City’s investments.

Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required (where applicable) by the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type. The column marked “exempt from disclosure” identifies those investment types for which GASB Statement No. 40 does not require disclosure as to credit risk:

Rating as of Year-End
Exempt from
Investment Type Total Disclosure AAAm Not Rated
State investment pool $ 3,367,058 $ 3,367,058 $ $ -
Morgan Stanley certificate of deposit
with Multi Bank Securities 246,000 - 246,000 -
Held by bond trustee:

Treasury obligation funds 593,794 - 593,794 -
Total $ 4,289,114 $ 3,367,058 $ 839,794 $ -
Sept 14, 2023 Pg. 84
28 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 2 – CASH AND INVESTMENTS (Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a city will not be able to recover its deposits or will not be able to recover collateral securities that are in possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterpart (e.g. broker-dealer) to a transaction, a city will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits:

As of June 30, 2020, the carrying amount of the City’s bank deposits was $ 8,863,978. the total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name as discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City’s name.

According to California law, the fair value of pledged securities with banking institutions must equal at least 110% of the City’s cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgages having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The City, however, has not waived the collateralization requirements.

Local Agency Investment Fund
The City participates in an external investment pool, as defined by the Governmental Accounting Standards Board (GASB) Statement No. 31, by way of its funds on deposit in the Local Agency Investment Fund (LAIF) managed by the State of California Treasurer and is not registered with the Securities and Exchange Commission. These funds are pooled with those of other agencies in the State and invested in accordance with State guidelines. The value of the city’s shares in the LAIF that may be withdrawn is determined on an amortized costs basis, which may be different from the fair value of the City’s position in the pool. The City’s portion of the June 30, 2020 balance was $ 3,367,058. A breakdown of the investments included in the balance is not available at the balance sheet date.

Investment Valuation
The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Fair value measurements of the City’s investments are as follows at June 30, 2019:

Investments Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs Morgan Stanley certificate of deposit
with Multi Bank Securities 246,000 246,000 -
Held by bond trustee:

Treasury obligation funds 593,794 - 593,974 -
Total $ 839,794 $ 246,000 $ 593,794 $ -
Treasury obligations categorized as Level 2 are valued using a matrix pricing technique that values securities based on their relationship to benchmark quoted prices.

Sept 14, 2023 Pg. 85
29 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 3 – INTERFUND ACTIVITIES
Interfund balances for the purpose of the government-wide statements have been eliminated. The composition of interfund balances in the fund level statements as of June 30, 2020 is as follows:

Interfund Receivables/Payables
Current interfund balances arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. At June 30, 2020, the interfund balances are as follows:

Long-Term Interfund Advances
At June 30, 2020, the funds below have made advances that were not expected to be repaid in one year or less.

Transfers Between Funds
With Council approval, resources may be transferred from one City fund to another. The purpose of the majority of transfers is to reimburse a fund that has made expenditures on behalf of another fund. Current year transfers included activity to recognize the refunding of debt. Transfers in and out consisted of the following as of June 30, 2020:

Due to Fund Due from Fund Amount
General Fund HOME Investment Special Revenue Fund 64,647 Total $ 64,647
Advances From Advances To Amount
Avenal Public Financing Authority Debt
Service Fund Water Fund $ 3,595,000
Water Fund
Avenal Public Financing Authority
Debt Service Fund 295,662
Total $ 3,890,662
6,557 Transfers
In Out Reasons
Major Funds:

Governmental funds:

General Fund $ 40,272 $ Capital assets from capital improvement projects and 20% Cost of Refuse Service to Residents
Other governmental funds:

CDBG Program Income Special
Revenue Fund 73,779 Miscellaneous program fund
Capital Improvement Project Fund 90,000 Capital assets and construction in progress transfers Enterprise funds:

Solid Waste Fund 123,507 20% Cost of Refuse Service to Residents Total $ 163,779 $ 163,779
Sept 14, 2023 Pg. 86
30 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020

NOTE 4 – NOTES RECEIVABLE
On October 3, 2007, the City entered into an agreement with Avenal Sand Drags Association for the sale of land that includes the sand drag tracks with a sales price of $68,000 payable to the City. In 2014, the City approved an addendum to the agreement. The terms of the revised agreement call for five annual interest only payments commencing September 18, 2014, followed by 10 annual principal payments of $6,800 each, together with accrued interest commencing on September 18, 2019. The interest is a 5% fixed rate, simple interest. If the City determines that the sand drags tracks and/or other use conducted by Avenal Sand Drags Association are no longer in the best interest of the City, the City retains the right to repurchase the property for the original sales price. As of June 30, 2020, the balance of this note receivable was $68,000.

NOTE 5 – HOUSING LOANS RECEIVABLE
The housing grant funds expended are recorded as expenditures in the year the loans are made to participants even though the amounts will be recovered as the loans are paid. The City maintains detailed records of these loans and records loan principal and interest payments as program revenues in the year that such payments are received. Loans which have monthly/annual activity are “performing” loans and are included as receivables and unavailable revenue.

Such loans totaled $34,444 as of June 30, 2020. Deferred payment loans are not required to be paid back until the participating homeowner sells, transfers title to the property, or discontinues residence in the dwelling, at which time the full amount of the deferred loan is due. Deferred payment loans are “non-performing” loans that are also recorded as receivables and unavailable revenue. Such loans totaled $12,027,974 as of June 30, 2020.

Sept 14, 2023 Pg. 87
31 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 6 – CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure additions as of the beginning of the 2002-03 fiscal year in the government-wide statement of net position. The City elected to use the basic approach whereby accumulated depreciation and depreciation expense have been recorded. The following tables present summary information on capital assets:

Depreciation expense on capital assets was charged to the governmental functions as follows:

Balances
July 1, 2019 Increases Decreases
Balances
June 30, 2020
Governmental Activities:

Capital assets not being depreciated:

Land $ 1,131,601 $
0 - $ - $ 1,131,601
Construction in progress 767,305 - - 767,305
Total capital assets not being depreciated 1,898,906 - 1,898,906 Capital assets being depreciated:

Buildings and improvements 10,581,800 - - 10,581,800
Machinery and equipment 4,333,406 - - 4,333,407
Infrastructure 25,094,201 - - 25,094,200
Total capital assets being depreciated 40,009,407 - - 40,009,407 Less accumulated depreciation for:

Buildings and improvements (3,171,718) (275,304) - (3,447,022) Machinery and equipment (2,823,727) (345,924) - (3,169,651) Infrastructure (15,260,309) (816,598) - (16,076,907)
Total accumulated depreciation (21,255,754) (1,437,827) - (22,693,581) Total capital assets being depreciated, net 18,753,653 (1,437,827) - 17,315,826 Governmental activities capital assets, net $ 20,652,559 $ (1,437,827) $ - $ 19,214,732 General government $ 275,304
Community development -
Parks and recreation 179,231
Highway and streets 816,598
Public safety 102,426
Public works 64,267
Total $ 1,437,827
Sept 14, 2023 Pg. 88
32 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 6 – CAPITAL ASSETS (Continued)
Balances Balances
July 1, 2018 Increases Decreases June 30, 2019
Business-Type Activities:

Capital assets not being depreciated:

Land $ 101,000 $ - $ - $ 101,000
Total capital assets not being depreciated 101,000 - - 101,000 Capital assets being depreciated:

Buildings and improvements 7,838,695 - - 7,838,695
Machinery and equipment 1,514,385 - - 1,514,385
Utility system 20,225,347 - - 20,225,347
Infrastructure 1,506,715 - - 1,506,715
Total capital assets being depreciated 31,085,142 - - 31,085,142 Less accumulated depreciation for:

Buildings and improvements (4,302,379) (174,155) - (4,476,534) Machinery and equipment (1,107,686) (42,238) - (1,149,924) Utility system (12,387,565) (421,984) - (12,809,549)
Infrastructure (945,466) (28,176) - (973,642)
Total accumulated depreciation (18,743,096) (666,553) - (19,409,650) Total capital assets being depreciated, net 12,342,046 (666,553) - 11,675,492 Business-type activities capital assets, net $ 12,342,046 $ (666,553) - 11,776,492 Total capital assets $ 33,095,606 $ (2,104,379) $ - $ 30,991,224 Depreciation expense on capital assets was charged to the business-type functions as follows:

Water $ 421,984
Sewer 216,393
Solid Waste -
Streetlight 28,176
Total $ 666,553
Sept 14, 2023 Pg. 89
33 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 7 – DEFERRED INFLOWS/OUTFLOWS OF RESOURCES
GASB Statement No. 63 provides financial reporting guidance for deferred outflows of resources and deferred inflows of resources. This Statement also amends the net asset reporting requirements and other pronouncements by incorporating deferred outflows of resources and deferred inflows of resources into the definitions of the required components of the residual measure and by renaming that measure as net position, rather than net assets.

GASB Statement No. 65 establishes accounting and financial reporting standards that reclassify, as deferred outflows of resources or deferred inflows of resources, certain items that were previously reported as assets and liabilities and recognizes, as outflows of resources or inflows of resources, certain items that were previously reported as assets and liabilities.

In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position or fund balance that applies to a future period(s) and thus, will not be recognized as an outflow of resources (expense/expenditure) until then. The City has no items that qualify for reporting in this category.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has only one type of item, which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. Deferred inflows of resources reported in the governmental funds for unavailable revenues are as follows:

HOME CDBG
Program Program
CalHome Income Income
Special Special Special
Revenue Fund Revenue Fund Revenue Fund Total
CalHOME loans $ 2,583,909 $ - $ - $ 2,583,909
HOME loans - 5,358,252 - 5,358,252
CDBG loan - - 4,085,813 4,085,813
Total $ 2,583,909 $ 5,358,252 $ 4,085,813 $ 12,027,974
Sept 14, 2023 Pg. 90
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 8 – OPERATING LEASES
Rental Expense
The City entered into two lease agreements effective May 1, 2015 with Stanton Office Machine Company to lease copiers for City Hall and the Police Department. The City Hall copy machine lease is payable for 60 months with payments of $363 per month plus applicable taxes. The City Hall copy machine lease has a separate maintenance agreement, recorded as an expense at $115 per month plus applicable taxes. The Police Department copy machine lease is also payable for 60 months with payments of $218 per month plus applicable taxes. The Police Department copy machine lease also has a separate maintenance agreement, recorded as an expense at $155 per month plus applicable taxes. The total lease payment for the year ended June 30, 2020 was $12,179.14.

The City entered into a lease agreement effective March 1, 2015 with Avaya Financial Services to lease telephone equipment for City Hall. The telephone equipment lease is payable for 60 months with payments of $177 per month plus applicable taxes. The total lease payment for the year ended June 30, 2020 was $3,847.37.

Future minimum operating lease commitments are as follows:

Year Ending June 30,
2020 9,928
$ 9,928
Lease Between the City of Avenal and the Avenal Hospital District A lease memorandum between the City of Avenal (the City) and the Avenal Hospital District (the District) provides for a below market rental rate of $1 per year from July 8, 2010 to December 31, 2015. There are two one-year options to renew the lease on the same terms and conditions. Although the Hospital District is a legal entity, there are no hospital services or operations at this facility. Part of the operations of the Avenal Police Department occupy this facility.

At the end of April 2018, a Joint Powers Agreement was signed which created the City of Avenal Operating Authority (CAOA). The members of this CAOA are the City of Avenal and the Avenal Hospital District (District).

The City of Avenal Police Department is granted continued use of the property at 317 Alpine Street in Avenal, on the same terms as the current lease agreement dated July 8, 2010, including Addendum No. 1 dated December 10, 2015, for a period of fifty years. The City shall pay rent to the CAOA at $1 per year.

The City is responsible for management of the property, can charge the District for allocated staff time, and handles District funds to pay obligations. Also, the City does not assume any District obligations, holds the City harmless and indemnifies the City for claims related to District debt. 34 Sept 14, 2023 Pg. 91
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 9 – COMPENSATED ABSENCES
The City’s policy relating to compensated absences is described in Note 1. As shown in the table below, the long-term portion of this debt, amounting to $17,766 for governmental activities and $74,554 for business- type activities at June 30, 2020 is expected to be paid in future years from future resources. In prior years, compensated absences have been liquidated primarily by the general fund and the proprietary funds.

Balance
July 1, 2019 Incurred Satisfied
Balance
June 30, 2020
Amounts
Due Within
One Year
Amounts Due in
More
Than One Year
Governmental Activities:

Compensated absences $ 169,520 $ 189,708 $ (184,359) $ 174,869 $ 157,103 $ 17,766 Business-Type Activities:

Compensated absences $ 92,319 $ 43,197 $ - $ 135,516 $ 33,889 $ 101,627 35 Sept 14, 2023 Pg. 92
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
36 NOTE 10 – LONG-TERM OBLIGATIONS
The following is a summary of long-term obligation transactions for governmental activities for the year ended June 30, 2020:

Balance
July 1, 2019
Incurred
or Issued
Satisfied
or Matured
Balance
June 30, 2020
Amounts
Due Within
One Year
Amounts
Due in More
Than One Year
Governmental Activities:

Revenue bonds $ 5,955,000 $ - $ (370,000) $ 5,585,000 $ 390,000 $ 5,195,000 Total governmental activities $ 5,955,000 $ - $ (370,000) $ 5,585,000 $ 390,000 $ 5,195,000 Revenue Bonds
2005 Avenal Public Financing Authority Revenue Bonds
In September 2005, the City issued $9,660,000 in revenue bonds. The bonds refinance the 1997 Avenal Public Financing Authority Refunding Revenue Bonds. The bonds authorized and issued have stated interest rates for each payment starting at 2.875% per annum and increasing annually to prescribed increments not exceeding .5% through the term of the bonds to a maximum of 5.0% per annum. The interest rate at June 30, 2020 was 4.375% per annum. These bonds are special obligations of the Authority and are payable solely from Public Finance Authority revenues. The Public Financing Authority maintains $658,440 as a minimum reserve for the authorized bonds. Below is a schedule of remaining debt service:
2005 Avenal Public Financing
Authority Refunding Revenue Bonds
Fiscal Years Ending Principal Interest Total
2021 390,000 264,155 654,155
2022 410,000 246,350 656,350
2023-2027 2,330,000 723,613 3,053,613
2028-2032 1,075,000 484,375 1,559,375
2033-2037 1,380,000 179,500 1,559,500
Totals $ 5,585,000 $ 1,897,993 $ 7,482,993
Sept 14, 2023 Pg. 93
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
37 NOTE 11 – PENSION PLAN
A. General Information about the Pension Plans
Plan Description – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all other.) Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City of Avenal’s (City) sponsors four rate plans (two miscellaneous and two safety.) Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law.

The rate plan provisions and benefits in effect at June 30, 2020 are summarized as follows:

Miscellaneous
1st Tier
Miscellaneous
PEPRA
Prior to On or after
Hire date January 1, 2013 January1,2013
Benefit formula 2% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 66 52 - 67
Monthly benefits, as a % of eligible compensation 2.0% to 2.5% 2.0% Required employee contribution rates 7.0% 6.75%
Required employer contribution rates 10.340% 67.590%
Unfunded accrued liability $157,158 $4,942
Safety
1st Tier
Safety
PEPRA
Prior to On or after
Hire date January 1, 2013 January 1, 2013
Benefit formula 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 2.0% to 3.0% 2.0% to 2.7% Required employee contribution rates 9.0% 13.0%
Required employer contribution rates 20.640% 13.130%
Unfunded accrued liability $53,242.92 $6,929
Sept 14, 2023 Pg. 94
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
38 NOTE 11 – PENSION PLAN (Continued)
A. General Information about the Pension Plan (Continued) Beginning in fiscal year 2019, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability.

The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability was $157,158 for the fiscal year ended June 30, 2020.

Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City’s contributions to the plan for the year ended June 30, 2020 were $515,718.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2020, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $3,104,329.

The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2018, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017, rolled forward to June 30, 2018, using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability for the Plan as of June 30, 2019 and 2020 was as follows:

Total
Proportion - June 30, 2019 0.0292%
Proportion - June 30, 2020 0.0303%
Change - Increase/(Decrease) 0.0011%
For the year ended June 30, 2020, the City recognized pension expense of $810,331. At June 30, 2020, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date $ 600,802 $ - Changes in assumptions 148,508 47,989
Differences between actual and expected experience 218,279 11,447 Net differences between projected and actual earnings on plan investments - 53543
Changes in employer's proportions 137,152 2,257
Differences between the employer's actual contributions and the employer's proportionate share of contributions 161,875 80,953 Total $ 1,266,616 $ 196,189
Sept 14, 2023 Pg. 95
39 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
NOTE 11 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$515,718 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2021. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended
June 30
2021 $ 356,923
2022 39,577
2023 62,379
2024 10,746
C. Actuarial Assumptions
The total pension liabilities in the June 30, 2020 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2018
Measurement Date June 30, 2019
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.15%(2)
Mortality
Derived using CalPERS'
Membership Data for all Funds(3)
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation (3) The mortality table was developed based on CalPERS specific data.

The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016.

Change of Assumptions –In Fiscal Year 2016-17, the financial reporting discount rate for the PERF C was lowered from 7.65 percent to 7.15 percent. In December 2016, the CalPERS Board approved lowering the funding discount rate used from 7.50 percent to 7.00 percent, which is to be phased-in over a three-year period (7.50 percent to 7.375 percent,

7.375 percent to 7.25 percent, and 7.25 percent to 7.00 percent) beginning with the June 30, 2016 valuation reports. The funding discount rate includes a 15 basis-point reduction for administrative expenses, and the remaining decrease is consistent with the change in the financial reporting discount rate.

Sept 14, 2023 Pg. 96
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
40 NOTE 11 – PENSION PLAN (Continued)
D. Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent and reflects the long-term expected rate of return for the Plan net of investment expenses and without reduction for administrative expenses. The projection of cash flows used to determine the discount rate assumed that contributions from plan numbers will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long- term market return expectations as well as the expected PERF cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set to equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The expected real rates of return by asset class can be found in CalPERS’ Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2019.

The table below reflects the long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses.

Asset Class
New Strategic
Allocation
Real Return
Years 1-10(a)
Real Return
Years 11+(b)
Global Equity 50.00% 4.80% 5.98%
Global Fixed Income 28.00% 1.00% 2.62%
Inflation Sensitive 0.00% 0.77% 1.81%
Private Equity 8.00% 6.30% 7.23%
Real Estate 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% (0.92%)
Total 100%
(a) An expected inflation of 2.0% used for this period
(b) An expected inflation of 2.92% used for this period Sept 14, 2023 Pg. 97
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
41 NOTE 11 – PENSION PLAN (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Discount Rate is -1%

6.15%
Current Discount Rate

7.15%
Discount Rate +1%

8.15%
Miscellaneous Plan 4,028,094 2,509,784 1,269,679
Safety Plan 954,219 594,545 286,556
Total $ 4,982,313 $ 3,104,329 $ 4,556,235
E. Pension Plan Fiduciary NetPosition
Detailed information about the Plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

F. Payable to the Pension Plan
The City did not have a payable for the outstanding number of contributions to the pension plan for the year ended June 30, 2020.

Sept 14, 2023 Pg. 98
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
42 NOTE 12 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS A. Plan Description
The City provides a self-funded, single employer, defined benefit plan to provide medical coverage for all eligible active and retired City employees. Retirees are currently covered by the CalPERS medical program as permitted under the Public Employees Medical and Hospital and Care Act (PEMHCA). As such, the City is obligated to contribute toward the cost of retiree medical coverage for the retiree’s lifetime or until coverage is discontinued. This coverage is available for employees who satisfy the requirements for retirement under CalPERS (attained age 50 with 5 years of State or public agency service or approved disability retirement). An employee cannot terminate employment before meeting the age condition and be entitled to receive benefits.

B. Funding Policy
The City funds the benefits on a pay-as-you-go basis. The City’s contribution for each employee shall be the amount necessary to pay the full cost of an employee’s enrollment in a health benefit plan. Dependent coverage is available but, if selected, is paid by the employee. A covered spouse who survives the retiree, if entitled to survivor benefits under the CalPERS retirement program, may continue coverage and receive the premium subside for the remainder of his or her lifetime as well, provided they apply for benefits within 60 days of the employee’s death.

C. Employees Covered
As of the June 30, 2020 actuarial valuation, the following current and former employees were covered by the benefit terms under the HC Plan:

Active 49
Inactive employees or beneficiaries currently receiving benefits 15 Inactive employees entitled to, but not yet receiving benefits 0 Total 64
D. Contributions
The required contribution is based on projected pay-as-you-go financing requirements. For the measurement date ended June 30, 2020, the City’s cash contributions were $173,385 in total payments, which were recognized as a reduction to the OPEB liability.

E. Change in Assumptions
The discount rate decreased from 2.98 percent at June 30, 2019 to 2.79 percent at June 30, 2020, resulting in a change in assumption in the amount of $587,529.

F. Discount Rate
The discount rate used was based on the Bond Buyer 20-bond General Obligation index. At June 30, 2020, the rate is 2.63 percent. The City does not prefund any portion of the OPEB liability; the funding is a “pay-as-you-go” method.

Sept 14, 2023 Pg. 99
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
43 NOTE 12 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (Continued) G. Total OPEB Liability
Because the City has not contributed to a qualifying trust, the fiduciary net position of the plan is $0 and the net OPEB liability is by definition equal to the total OPEB liability. The City’s total OPEB liability of $13,990,779 was based on an actuarial valuation as of June 30, 2018, a measurement date of June 30, 2018, and a discount rate of 3.13 percent. The results of the June 30, 2018 actuarial valuation were used to determine the total OPEB liability as of the June 30, 2018 measurement date, without adjustment.

The total OPEB liability was determined using an actuarial valuation as of June 30, 2018, using the following actuarial assumptions.

Actuarial Valuation Date 6/30/2021
Contribution Policy Pay-as-you-go
Actuarial Cost Method Entry Age Normal Cost, Level Percent of Pay Discount Rate 2.98% at June 30, 2018 (Bond Buyer 20 Index)

2.79% at June 30, 2019 (Bond Buyer 20 Index)
General Inflation 2.63% per annum
Mortality, Disability, Termination, Retirement CalPERS 2014 Experience Study Mortality Improvement MacLeod Watts Scale 2017 applied generationally from 2008
Salary Increases 3.125% per year
Medical Trend 8.00% in 2019 decreasing to 5.00% in 2025 and later Healthcare Participation at Retirement Active employees and current retirees: 100% for the member’s lifetime
Spouse Participation 75% are assumed to be married participants who will choose to cover a spouse in retirement
Medical Plan at Retirement
Active employees and current retirees under age 65:

Coverage is assumed to continue in the medical plan
offered by the City until age 65. Current Medicare-eligible retirees: Those currently covered by a supplemental plan are assumed to remain in that plan until the retiree’s death.

H. Changes in the OPEB Liability
The components of the City of Avenal’s total OPEB liability as of June 30, 2020, were as follows:

Total OPEB
Liability
Balance at 6/30/19* $ 13,990,779
Changes for the year:

Service cost 1,233,237
Interest 451,093
Assumption changes 587,529
Benefit payments and refunds (1,369,585)
Net Changes 902,274
Balance at 6/30/20** $ 14,893,053
*Measurement date 6/30/18
**Measurement date 6/30/21
Sept 14, 2023 Pg. 100
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
44 NOTE 12 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (Continued) I. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2018:

J. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the City if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2018:

K. OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2020, the City recognized OPEB expense of $868,495. As of fiscal year, ended June 30, 2020, the City reported deferred outflows of resources related to OPEB from the following sources:

The $193,126 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2019 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2020.

Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

Current - 1%

1.79%
Current

2.79%
Current + 1%

3.79%
Total OPEB Liability $ 18,108,589 $ 14,893,053 $ 12,419,939 Current - 1% Current
Trend
Current + 1%
Total OPEB Liability $ 12,343,649 $ 14,893,053 $ 18,243,400 Deferred Outflows of Resources Deferred Inflows of Resources Employer contributions made
subsequent to the measurement date $ 193,126 $ -
Difference Between Expected and
Actual Experiance $ 699,368 $ 1,783,249
Changes of assumptions 872,824 843,516
Total $ 1,765,318 $ 2,626,765
Fiscal Year Ended
June 30
Deferred Outflows/
(Inflows) of Resources
2021 $ (129,565)
2022 (129,565)
2023 (129,565)
2024 (129,565)
2025 (129,565)
Thereafter (406,748)
Total $(1,054,573)
Sept 14, 2023 Pg. 101
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
45 NOTE 13 – RISK MANAGEMENT
The City is exposed to various risks and losses related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Risk of loss is primarily handled through the Central San Joaquin Valley Risk Management Authority (CSJVRMA). CSJVRMA is a consortium of cities for workers’ compensation programs and the pooled liability program in the San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et. seq. CSJVRMA is governed by a Board of Directors which meets three to four times per year, consisting of one member appointed by each member city. The dayto-day business is handled by a management group employed by CSJVRMA.

CSJVRMA provides $4,500,000 coverage limits in excess of the retained limit of $500,000 and also participates in the California Association of Counties Excess Insurance Authority (CSAC-EIA) for coverage in excess of $5,000,000 up to the statutory limit.

Under the pooled liability program, expected claims are actuarially determined and deposited with CSJVRMA along with all estimated operating costs. Each year is retrospectively adjusted five years following its conclusion and any funds remaining are returned to the City. Likewise, funds paid out in excess of the City’s original deposit are collected from the City. The risk sharing pool covers the first $1,000,000 of losses. CSJVRMA is a member of the California Affiliated Risk Management Authorities (CARMA), which provides coverage in excess of the retained limit up to $29,000,000.

The latest financial information and the most current information available for CSJVRMA for the fiscal year ended June 30, 2020:

Total assets $ 110,234,633
Total liabilities 92,209,231
Member's equity $ 18,025,402
Total revenues $ 44,355,775
Total expenses 46,619,021
Excess of income (loss) over expenses $ (263,246)
At the termination of the joint powers agreement and after all claims have been settled, any excess or deficit will be divided among the cities in accordance with governing documents.

Sept 14, 2023 Pg. 102
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
46 NOTE 14 – COMMITMENTS AND CONTINGENCIES
General Liability
There are various claims and legal actions pending against the City for which no provision has been made in the financial statements. In the opinion of City Management, liabilities arising from these claims and legal actions, if any, will not be material to these financial statements.

Federal Awards and Grants
The City has received federal grants for specific purposes that are subject to review and audit by the federal government. Although such audits could result in expenditure disallowances under grant terms, any required reimbursements are not expected to be material.

Landfill
The City entered into a lease agreement with Madera Disposal Systems, Inc., a California Corporation. Madera Disposal Systems, Inc. will lease the City’s landfill site. They will assume all liabilities associated with the landfill and in return they will pay the City a set rental fee plus $30 per ton of waste accepted over 300 tons daily. The City will also have a guaranteed rate on tipping fees for City waste. The lease is for the permitted life on the landfill which ends in year 2029.

NOTE 15 – DEFICIT FUND EQUITY
The following funds had deficit fund balances as of June 30, 2020:
0BGovernmental Funds:

Nonmajor Funds:

Tire Amnesty Special Revenue Fund $ -
Community Development Block Grant Fund -
Water Trans Line Grant Fund 78,768
Avenal City Operating Authority -
Sept 14, 2023 Pg. 103
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
47 NOTE 16 – SUCCESSOR AGENCY TRUST FUND
On January 26, 2013, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Assembly Bill 1X26 as part of City Resolution Number 2013-11.

Under the control of an oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution of the redevelopment agency (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

Successor agencies are only allocated revenue in the amount that is necessary to pay estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill.

The City’s position on this issue is not a position of settled law and there is considerable uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue favorably for the City.

After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

Long-Term Debt
Long-term debt reported in the Successor Agency Trust Fund at June 30, 2020 was comprised of the following:

Balance
July 1, 2019 Additions Retirements
Balance
June 30, 2020
Due Within
One Year
Avenal 2005 Refunding
Revenue Bond $ 2,225,000 $ - $ - $ 2,225,000 $ 485,000
2005 Avenal Public Finance Authority Refunding Revenue Bonds In September 2005, the Agency issued $4,585,000 in Refunding Revenue Bonds. The proceeds were used to refinance the 1997 Tax Allocation Bonds. The bonds authorized and issued have stated interest rates for each payment starting at

2.875% per annum and increasing annually in prescribed increments not exceeding .5% through the term of the bonds to a minimum of 5.0% per annum. The interest rate at June 30, 2020, was 4.375% per annum. The 2005 Revenue Refunding Bonds are repaid from the property tax revenues collected on properties within the redevelopment project area. The debt agreement requires a reserve account to be held by the trustee. Interest earned on the reserve account is applied to the interest owed.

Sept 14, 2023 Pg. 104
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
48 NOTE 16 – SUCCESSOR AGENCY TRUST FUND (Continued)
Long Term Debt (Continued)
Annual debt service requirements to maturity for the Avenal 2005 Revenue Refunding Bonds are as follows:

Fiscal Years Ending Principal Interest Total
2020 $ 235,000 $ 100,491 $ 335,491
2021 250,000 89,850 339,850
2022-2026 1,415,000 253,575 1,668,575
2027 325,000 16,250 341,250
Total $ 2,225,000 $ 460,166 $ 2,685,166
NOTE 17 – SUBSEQUENT EVENT
On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19), a global pandemic recommended containment and mitigation measures worldwide. The COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closing of businesses and shelter in place orders for all but those essential services. While the business disruption is currently expected to be temporary, there is considerable uncertainty around the duration of the closings and shelter in place orders. As a result, the outbreak has caused uncertainty in the financial markets. Although many of the City of Avenal’s services are considered essential, City Hall was closed to the public, certain other services transitioned to online-only and because the City’s major revenue sources, including businesses that collect sales taxes, are directly impacted by these events, it is probable that this matter will negatively impact the City. However, the ultimate financial impact and duration cannot be estimated at this time.

The correction resulted in the restatement of beginning total fund balance for various funds to correct interest income not previously reported and fund balance for Avenal City Operating Authority not reported.

NOTE 18 – PRONOUNCEMENTS
(1) New Accounting Pronouncements Adopted
Governmental Accounting Standards Board Statement No. 95 In May 2020, the GASB issued Statement No. 95 Postponement of The Effective Dates of Certain Authoritative Guidance. GASB Statement No. 95 provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later. The effective dates of certain provisions pronouncements are postponed by one year.
(2) New Accounting Pronouncements Not Yet Adopted
Governmental Accounting Standards Board Statement No. 83 In November 2016, the GASB issued Statement No. 83, Certain Asset Retirement Obligations. GASB Statement No. 83 addresses accounting and financial reporting for asset retirement obligations. The statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for Asset Retirement Obligations and requires disclosures of methods and assumptions used. The new standard is effective for periods beginning after June 15, 2018. Application of this statement is effective for the City’s year ending June 30, 2020.

Sept 14, 2023 Pg. 105
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2020
49 Governmental Accounting Standards Board Statement No. 84 The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2020.

Governmental Accounting Standards Board Statement No.88 In March 2018, the GASB issued Statement No. 88 Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements. GASB Statement No.88 defines debt for purposes of disclosure in notes to financial statements as a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation is established. The new standard is effective for periods beginning after June 15, 2018. Application of this statement is effective for the City’s year ending June 30, 2020.

Governmental Accounting Standards Board Statement No. 87 In June 2017, the GASB issued Statement No. 87, Leases. GASB Statement No. 87 establishes a single model for lease accounting and requires reporting of certain lease assets, liabilities, and deferred inflows that currently are not reported.

The new standard is effective for periods beginning after December 15, 2019. Application of this statement is effective for the City’s year ending June 30, 2021.

Governmental Accounting Standards Board Statement No.91 In May 2019, the GASB issued Statement No. 91 Conduit Debt Obligations. GASB Statement No. 91 provides a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The new standard is effective for periods beginning after December 15, 2021. Application of this statement is effective for the City’s year ending June 30, 2023.

The GASB has issued Statement No. 95, “Postponement of the Effective Dates of Certain Authoritative Guidance”. The primary objective of this Statement is to provide temporary relief to governments and other stakeholders in light of the COVID-19 pandemic. That objective is accomplished by postponing the effective dates of certain provisions in Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018, and later.

The effective dates of certain provisions contained in the following pronouncements are postponed by one year:
• Statement No. 83, Certain Asset Retirement Obligations • Statement No. 84, Fiduciary Activities
• Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements • Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period • Statement No. 90, Majority Equity Interests
• Statement No. 91, Conduit Debt Obligations
• Statement No. 92, Omnibus 2020
• Statement No. 93, Replacement of Interbank Offered Rates • Implementation Guide No. 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting) • Implementation Guide No. 2018-1, Implementation Guidance Update—2018 • Implementation Guide No. 2019-1, Implementation Guidance Update—2019 • Implementation Guide No. 2019-2, Fiduciary Activities. • The effective dates of the following pronouncements are postponed by 18 months:
• Statement No. 87, Leases
• Implementation Guide No. 2019-3, Leases.

Earlier application of the provisions addressed in this Statement is encouraged and is permitted to the extent specified in each pronouncement as originally issued.

Sept 14, 2023 Pg. 106
DRAFT
THIS PAGE IS LEFT BLANK INTENTIONALLY.

Sept 14, 2023 Pg. 107
DRAFT

REQUIRED SUPPLEMENTARY INFORMATION
Sept 14, 2023 Pg. 108

CITY OF AVENAL

REQUIRED SUPPLEMENTARY

INFORMATION
DRAFT
51 SCHEDULE OF CHANGES IN THE CITY’S NET OTHER POSTEMPLOYMENT

BENEFITS LIABILITY AND RELATED RATIOS
FOR THE YEAR ENDED JUNE 30, 2020
Fiscal Year Ending 2020 2019 2018
Measurement Date 06/30/2019 06/30/2018 06/30/2017
Discount Rate on the Measurement Date 2.79% 2.98% 3.13% Total OPEB Liability
Service Cost $ 1,233,237 $ 1,143,993 $ 1,262,350
Interest 451,093 413,907 349,207
Changes of Benefit terms - - -
Differences between expected and actual experience (1,196,200) - - Changes of assumptions 587,529 420,572 (1,180,920)
Benefit payments (173,385) (135,116) (101,917)
Net change in total OPEB liability 902,274 1,843,356 328,720 Total OPEB liability - beginning 13,990,779 12,147,423 11,818,703 Total OPEB liability – ending (a) 14,893,053 13,990,779 12,147,423 Plan fiduciary net position – beginning - - -
Plan fiduciary net position – ending (b) - - -
Net OPEB liability – ending (a) – (b) $ 14,893,053 $ 13,990,779 $ 12,147,423 Covered-employee payroll 3,670,844 3,437,200 3,389,109
Net OPEB liability as a % of covered-employee
payroll
405.71% 407.04% 358.43%
Sept 14, 2023 Pg. 109

CITY OF AVENAL

REQUIRED SUPPLEMENTARY

INFORMATION
DRAFT
52 PROPORTIONATE SHARE OF NET PENSION
LIABILITY LAST TEN YEARS*

NOTES TO SCHEDULE
Changes in Benefit Terms - None
Changes in Assumptions - None
*Schedule is intended to show information for ten years. Additional years will be displayed as they become available.
2016 2017 2018 2019 2020
Proportion of the net pension liability 0.0283% 0.0285% 0.0291% 0.0292% 0.0303% Proportionate share of the net pension liability $ 1,944,365 2,464,592 2,880,505 2,813,825 3,104,329 Covered payroll $ 2,516,715 2,711,383 2,814,525 3,146,140 3,138,337 Proportionate share of the net pension liability
as percentage of covered payroll 77.26% 90.90% 102.34% 89.44% 98.92% Plan fiduciary net position as a percentage of the
total pension liability 78.22% 75.77% 75.19% 77.84% 77.60% Sept 14, 2023 Pg. 110

CITY OF AVENAL

REQUIRED SUPPLEMENTARY

INFORMATION
DRAFT
53 SCHEDULE OF CONTRIBUTIONS
LAST TEN YEARS*
*Schedule is intended to show information for ten years. Additional years will be displayed as they become available.
2016 2017 2018 2019 2020
Actuarily required contribution (actuarially
determined) $ 536,542 505,516 559,335 677,015 600,802
Contributions in relation to the actuarially
determined contributions 536,542 505,516 559,335 677,015 600,802 Contribution deficiency (excess) $ - - - - -
Covered payroll $ 2,516,715 2,711,383 2,814,525

3,146,140

3,243,431
Contributions as a percentage of covered
payroll

21.32% 18.64% 19.87% 21.52% 18.52%
Sept 14, 2023 Pg. 111

CITY OF AVENAL

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL
DRAFT
54 GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Property taxes $ - $ - $ 2,349,748 $ 2,349,748
Other taxes - - 631,250 631,250
Intergovernmental revenues - - 221,802 221,802
Charges for services - - 104,437 104,437
Licenses and permits - - 86,180 86,180
Fines and penalties - - 26,481 26,481
Investment income - - 47,333 47,333
Rent - - 389,773 389,773
Other revenue - - 123,970 123,970
Total revenues - - 3,980,974 3,980,974

EXPENDITURES
Current services:

General government 757,969 762,469 665,084 97,385
Building regulations 183,750 183,750 143,266 40,484
Community development 511,675 511,853 574,677 (62,824)
Public safety:

Law enforcement 3,582,380 3,582,380 3,180,975 401,405
Animal control 227,600 227,600 212,498 15,102
Parks and recreation 721,870 721,870 506,698 215,172
Capital outlay:

General government 51,300 51,300 62,069 (10,769)
Community development - - - -
Parks and recreation 10,500 10,500 8,554 1,946
Public safety:

Law enforcement 62,183 62,183 - 62,183
Animal control - - - -
Debt Service:

Principal - - - -
Interest - - - -
Total expenditures 6,109,227 6,113,905 5,353,821 760,084 Excess (deficiency) of revenues over
(under) expenditures (6,109,227) (6,113,905) (1,372,847) 4,741,058

OTHER FINANCING SOURCES (USES)
Transfers in $ - $ - $ 366,983 $ 366,983
Transfers out - - (326,711) (326,711)
Total other financing sources (uses) - - 40,272 40,272
Net change in fund balances (6,109,227) (6,113,905) (1,332,575) 4,781,330 Fund balance - beginning 4,448,168 4,448,168 4,448,168 - Prior period adjustment - - - -
Fund balance - ending $ (1,661,059) $ (1,665,737) $ 3,115,593 $ 4,781,330 Sept 14, 2023 Pg. 112

CITY OF AVENAL

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL
DRAFT
55 CalHOME SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental revenues $ - $ - $ - $ -
Investment income - - 77 77
Loan repayments - - 106,819 106,819
Total revenues - - 106,896 106,896

EXPENDITURES
Current services:

Community development - - 360 (360)
Total expenditures - - 360 (360)
Excess (deficiency) of revenues over (under)
expenditures - - 106,536 106,536

OTHER FINANCING SOURCES (USES)
Transfers in
$ -
-
$ -
-
$ -
-
$ -
-
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances - - 106,536 106,536
Fund balance - beginning 64,618 64,618 64,618 -
Fund balance - ending $ 64,618 $ 64,618 $ 171,154 $ 106,536 Sept 14, 2023 Pg. 113

CITY OF AVENAL

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL
DRAFT
56 HOME PROGRAM INCOME SPECIAL REVENUE
FUND FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Investment income $ - $ - $ 39 $ 39
Loan repayments - - 89,514 89,514
Total revenues - - 89,553 89,553

EXPENDITURES
Transfers in - - - -
Community development 78 78 1,100 (1,022)
Net change in fund balances (78) (78) 88,453 88,531
Fund balance - beginning 66,065 66,065 66,065 -
Fund balance - ending $ 65,987 $ 65,987 $ 154,518 $ 88,531 Sept 14, 2023 Pg. 114

CITY OF AVENAL

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL

CDBG PROGRAM INCOME SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
DRAFT
57 Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Investment income $ - $ - $ 6 $ 6
Loan repayments - - 7,524 7,524
Total revenues - - 7,530 7,530

EXPENDITURES
Community development - - 600 (600)
Total expenditures - - 600 (600)
Excess (deficiency) of revenues over
(under) expenditures - - 6930 6930

OTHER FINANCING SOURCES (USES)
Transfers in $ - $ - $ - $ -
Transfers out - - (73,779) (73,779)
Total other financing sources (uses) - - (73,779) (73,779) Net change in fund balances - - (66,849) (66,849)
Fund balance - beginning - - 66,580 66,580
Fund balance - ending $ - $ - $ (269) $ (269)
Sept 14, 2023 Pg. 115

CITY OF AVENAL

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCES – BUDGET (GAAP BASIS) AND ACTUAL

HOME INVESTMENT SPECIAL REVENUE FUND
FOR THE YEAR ENDED JUNE 30, 2020
DRAFT
58 Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental revenues $ - $ - $ 1,271,091 $ 1,271,091 Investment income - - 23 23
Total revenues - - 1,271,114 1,271,114

EXPENDITURES
Current services:

Community development 4,949,081 4,949,081 1,554,899 3,394,182 Total expenditures 4,949,081 4,949,081 1,554,899 3,394,182 Excess (deficiency) of revenues over
(under) expenditures (4,949,081) (4,949,081) (283,785) 4,665,296

OTHER FINANCING SOURCES (USES)
Transfers in $ - $ - $ - $ -
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances (4,949,081) (4,949,081) (283,785) 4,665,296 Fund balance - beginning 383,124 383,124 383,124 -
Fund balance - ending $ (4,565,957) $ (4,565,957) $ 99,339 $ 4,665,296 Sept 14, 2023 Pg. 116

CITY OF AVENAL

NOTES TO THE REQUIRED SUPPLEMENTARY
INFORMATION FOR THE YEAR ENDED JUNE 30, 2020
DRAFT
59 NOTE 1 – BUDGETARY INFORMATION
The City follows these procedures annually in establishing the budgetary data reflected in the budgetary comparison schedules:

1. The City Manager submits to the City Council a proposed budget for the fiscal year commencing the following July 1. The budget includes proposed expenditures and the means of financing them.

2. The City Council reviews the proposed budget at specially scheduled sessions, which are open to the public.

The Council also conducts a public hearing on the proposed budget to obtain comments from interested persons.

3. Prior to June 1, the budget is legally adopted through passage of a resolution. This budget is reported as Original Budget in the budgetary comparison schedules.

4. During the fiscal year, changes to the adopted budget may be authorized as follows:
a) Items requiring City Council action – appropriation of fund balance revenues, transfers of appropriations between funds, appropriation of any non-departmental revenue, new interfund loans or advances, and creation of new capital projects or increases to existing capital projects. b) Items delegated to the City Manager – transfers between departments within funds, appropriation of unbudgeted departmental revenues, and approval of transfers which increase salary and benefit appropriations.
c) Item delegated to department head – allocation of departmental appropriations to line item level.

5. Formal budgetary integration is employed as a management tool for all funds. Annual budgets are legally adopted and amended as required for the general, special revenue or enterprise funds. Project length budgets are adopted for the capital projects funds. All budgets are prepared on a basis consistent with generally accepted accounting principles (GAAP), and budgetary comparisons for the general and major special revenue funds are presented on that basis in the required supplementary information. A debt service payment schedule for the debt service fund is also approved as part of the budget process.

6. Budget amounts are reflected after all authorized amendments and revisions. This budget is reported as the Final Budget in the budgetary comparison schedules.

7. For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the activity level. The legal appropriation basis is at the level called “department”. A “department” for legal appropriation purposes may be a single organization, or an entire department having multiple organizations with the same fund, or an entire fund.

Sept 14, 2023 Pg. 117
DRAFT

OTHER SUPPLEMENTARY INFORMATION
Sept 14, 2023 Pg. 118
DRAFT
61 NONMAJOR GOVERNMENTAL FUNDS
The Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditure for specified purposes.

Local Transportation Funds
To account for Local Transportation Fund tax revenue restricted to street maintenance and construction.

Tire Amnesty Special Revenue Fund
To account for CalRecycle grant funding for the cost of cleanup, abatement and other actions related to the disposal of waste tires at cleanup projects and amnesty events.

Gas Tax Special Revenue Fund
To account for the City’s apportioned share of revenue assessed by the State of California on the sale of gasoline in the State. The funds are to be used exclusively for maintenance and improvement of the City’s streets and roads.

Community Development Block Grant Funds
To account for annual federal grants that provide for development of a viable urban community by providing suitable housing, principally for low and moderate-income residents.

Parks and Recreation Grants Funds
To account for expenditures of the park and recreation grants from the State of California.

Capital Projects Funds
To account for financial resources to be used for the acquisition or construction of major capital facilities and improvements (other than those financed by proprietary funds).

Capital Improvement Project Fund
To accumulate revenues to fund specific projects designated by the City Council.

Avenal City Operating Authority Fund
To account for the financial resources to be used in the management of the Ken Brown Public Safety Center.

Sept 14, 2023 Pg. 119

CITY OF AVENAL
DRAFT
62 COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTALFUNDS
JUNE 30, 2020
Nonmajor Special
Revenue
Nonmajor Capital
Projects
Total
Nonmajor
Governmental
Funds
ASSETS
Cash and investments $ 1,864,083 $ 9,696 $ 1,873,779
Receivables:

Intergovernmental 1,391,916 - 1,391,916
Total assets $ 3,255,999 $ 9,696 $ 3,265,695

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 182,773 $ - $ 182,773
Interfund payables - - -
Total liabilities 182,773 - 182,773
Fund balances:

Restricted for:

Highways and streets 1,219,360 - 1,219,360
Community development 1,534,184 - 1,534,184
Committed:

Capital projects - 9,696 9,696
Unassigned 240,915 - 240,915
Total fund balances 2,994,459 9,696 3,004,155
Total liabilities and fund balances $ 3,177,232 $ 9,696 $ 3,186,928 Sept 14, 2023 Pg. 120

CITY OF AVENAL
DRAFT
63 COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTALFUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Nonmajor
Special
Revenue
Nonmajor
Capital
Projects
Total
Nonmajor
Governmental
Funds

REVENUES
Intergovernmental revenues $ 3,599,367 $ - $ 3,599,367
Investment income 1,126 1,547 2,673
Rents 91,136 - 91,136
Miscellaneous1 - - -
Total revenues 3,691,629 1,547 3,693,176

EXPENDITURES
Current:

General government 40,943 - 40,943
Community development 2,280,288 - 2,280,288
Parks and recreation 23,727 - 23,727
Highways and streets 469,074 - 469,074
Capital outlay:

Parks and recreation 20,385 - 20,385
Highways and streets 100,978 - 100,978
Total expenditures 2,935,395 - 2,935,395
Excess (deficiency) of revenues over
(under) expenditures 756,234 1,547 757,781

OTHER FINANCING SOURCES (USES)
Transfers out - (90,000) (90,000)
Total other financing sources (uses) - (90,000) (90,000) Net change in fund balances 756,234 (88,453) 667,781
Fund balances - beginning 2,150,874 98,149 2,249,023
Prior year adjustments 87,351 - 87,351
Fund balances - ending $ 2,994,459 $ 9,696 $ 3,004,155
Sept 14, 2023 Pg. 121

CITY OF AVENAL
DRAFT
64 COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2020
Community
Development Water Trans Avenal City
Local Tire Gas Tax Block Grant Parks and Line Grant Operating Transportation Amnesty Fund Funds Recreation Funds Authority Totals ASSETS
Cash and investments $ 891,480 $ - $ 1,501,286 $ (408,561) $ 89,613 $ (202,144) $ (7,591) $ 1,864,083 Receivables: -
Intergovernmental 327,880 - 41,008 773,295 18,143 223,998 7,591 1,391,915 Total assets $ 1,219,360 $ - $ 1,542,294 $ 364,734 $ 107,756 $ 21,854 $ - $ 3,255,998

LIABILITIES AND FUND

BALANCES
Liabilities:

Accounts payable $ - $ - $ 8,110 $ 152,806 $ - $ 21,857 $ - $ 182,773 Interfund payables $ - - - - - - - -
Total liabilities - - 8,110 152,806 - 21,857 - 182,773
Fund balances:

Restricted:

Highways and streets 1,219,360 - - - - - - 1,219,360
Community development - - 1,534,184 - - - - 1,534,184
Unassigned - - - 211,928 107,756 (78,768) (1) 240,915
Total fund balances 1,219,360 - 1,5,34,184 211,928 107,756 (78,768) (1) 2,994,459 Total liabilities and fund balances $ 1 ,219,360 $ - $ 1,542,294 $ 364,734 $ 107,756 $ (56,911) $ (1) $ 3,177,232 Sept 14, 2023 Pg. 122

CITY OF AVENAL
DRAFT
65 COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES

NONMAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Community
Development Water Trans Avenal City
Local Tire Gas Tax Block Grant Parks and Line Grant Operating Transportation Amnesty Fund Funds Recreation Funds Authority Totals

REVENUES
Intergovernmental revenues $ 290,332 $ - $ 768,851 $ 2,200,807 $ 19,342 $ 320,035 $ - $ 3,599,367 Investment income 442 - 627 5 52 - - 1,126
Rents - - - - - - 91,136 91,136
Miscellaneous - - - - - - - -
Total revenues 290,774 - 769,478 2,200,812 19,394 320,035 91,136 3,691,629

EXPENDITURES
Current:

General government - - - - - - 40,943 40,943
Community development - - - 1,982,547 297,741 - 2,280,288 Parks and recreation - - - - 23,727 - - 23,727
Streets 3,340 - 465,734 - - - - 469,074
Capital outlay:

Parks and recreation - - - 20,385 - - 20,385
Streets - - 100,978 - - - - 100,978
Total expenditures 3,340 - 566,712 1,982,547 44,112 297,741 40,943 2,935,395 Excess (deficiency) of revenues over
(under) expenditures 287,434 - 202,766 218,265 (24,718) 22,294 50,193 756,234

OTHER FINANCING SOURCES
(USES)
Transfer In -
- - - - - - -
Transfer Out - - - - - - - -
Total other financing sources (uses) - - - - - - - -
Net change in fund balances 287,434 - 202,766 218,265 (24,718) 22,294 50,193 756,234 Fund balances - beginning 931,926 - 1,331,418 (6,337) 132,474 (101,062) (50,194) 2,238,225 Prior period adjustments - - - - - - - -
Fund balances - ending $ 1,219,360 $ - $ 1,534,184 $ 211,928 $ 107,756 $ (78,768) $ (1) $ 2,994,459 Sept 14, 2023 Pg. 123

CITY OF AVENAL
66 DRAFT

COMBINING BALANCE SHEET

NONMAJOR CAPITAL PROJECTS FUND
JUNE 30, 2020
Capital
Improvement
Project Fund
ASSETS
Cash and cashequivalents $ 9,696
Total assets $ 9,696

LIABILITIES
Accounts payable $ -
Total liabilities $ -

FUND BALANCE
Fund balance:

Committed:

Capital projects
9,696
Total fund balance
9,696
Total liabilities and fund balance $ 9,696

LIABILITIE
S
Sept 14, 2023 Pg. 124
67 CITY OF AVENAL
DRAFT

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES

NONMAJOR CAPITAL PROJECTS FUND FOR THE
YEAR ENDED JUNE 30, 2020
Capital
Improvement
Project Fund

REVENUES
Intergovernmental revenue $ 0
Investment income $ 1,547
Total revenues 1,547

OTHER FINANCING SOURCES (USES)
Transfers in -
Transfers out (90,000)
Total other financing sources (uses) (90,000)
Net change in fund balance (88,453)
Fund balance - beginning 98,149
Prior year adjustments -
Fund balance - ending $ 9,696
Sept 14, 2023 Pg. 125
DRAFT
OTHER INDEPENDENT AUDITOR’S REPORTS
Sept 14, 2023 Pg. 126
DRAFT
THIS PAGE IS LEFT BLANK INTENTIONALLY.

Sept 14, 2023 Pg. 127
69 DRAFT
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and City Council
City of Avenal, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Avenal, California (the City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated August 24, 2023.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City of Avenal, State of California’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City of Avenal, State of California’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City of Avenal, State of California’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did identify certain deficiencies in internal control, described in the accompanying schedule of findings and questioned costs as findings 2019-1 and 2018-1 that we consider to be material weaknesses.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Avenal, State of California’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Sotomayor & Associates, LLP
Certified Public Accountants
150 S Los Robles Avenue, Suite 450
Pasadena, California 91101
(626) 397-4900
Fax: (626) 397-4908
E-mail: [email protected]
Web Site www.sotomayorcpa.com
Sept 14, 2023 Pg. 128
70 DRAFT
City of Avenal, State of California’s Responses to Finding City of Avenal, State of California’s responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. City of Avenal, State of California’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Sotomayor & Associates, LLP
Certified Public Accountants
August 24, 2023
Sept 14, 2023 Pg. 129
71 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR

EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER

COMPLIANCE REQUIRED BY UNIFORM GUIDANCE
To the Honorable Mayor and City Council
City of Avenal, California
Report on Compliance for Each Major Federal Program
We have audited the City of Avenal, California’s (the City) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of City’s major federal programs for the year ended June 30, 2020. The City’s major federal program is identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.

Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program.

However, our audit does not provide a legal determination of the City’s compliance.

Opinion on Each Major Federal Program
In our opinion, the City of Avenal, California, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2020.

Sotomayor & Associates, LLP
Certified Public Accountants
150 S Los Robles Avenue, Suite 450
Pasadena, California 91101
(626) 397-4900
Fax: (626) 397-4908
E-mail: [email protected]
Web Site www.sotomayorcpa.com
Sept 14, 2023 Pg. 130
DRAFT
Report on Internal Control Over Compliance
Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of City’s internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Sotomayor & Associates, LLP
Certified Public Accountants
August 24, 2023
Sept 14, 2023
72 Pg. 131
DRAFT

CITY OF AVENAL

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2020
Contract/
Federal Pass-Through
Federal Grantor/Pass Through CFDA Entity Identifying Federal Grantor/Program or Cluster Title Number Number Expenditures U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Passed through California Department of Housing and
Urban Development
Home Investment Partnerships Program 14.239 15-HOME-10892 132,593 Community Development Block Grant Program 14.228 16-CDBG-11133 2,095,992 Total U.S. Department of Housing and Urban Development $ 2,228,585 TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,228,585
73 Sept 14, 2023 Pg. 132
DRAFT

CITY OF AVENAL

NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL
The accompanying Schedule of Expenditures of Federal Awards (SEFA) presents the activity of all federal award programs of the City of Avenal. Federal awards received directly from federal agencies, as well as federal awards passed through other government agencies are included in the schedule. The information in this SEFA is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The expenditures are below the single audit threshold of $750,000 and are presented for information purpose only.

BASIS OF ACCOUNTING
The accompanying SEFA is presented using the modified accrual basis of accounting except for programs recorded in the City’s enterprise funds, which are presented using the accrual basis of accounting, which is described in Note 1 of the City’s basic financial statements.

RELATIONSHIP TO BASIC FINANCIAL STATEMENTS
Federal award expenditures agree or can be reconciled with the amounts reported in the City’s basic financial statements.

INDIRECT COST RATE
The City has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance.

Sept 14, 2023
74 Pg. 133
DRAFT

CITY OF AVENAL

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2020
SECTION I – SUMMARY OF AUDITOR’S RESULTS
Financial Statements
Type of auditor'sreport issued: Unmodified
Internal control over financial reporting:

Material weaknesses identified. X Yes No
Significant deficienciesidentified that
are not considered to be material weaknesses? Yes X None reported Noncompliance material to financial statements noted? Yes X No Federal Awards
Internal control over major programs:

Material weaknesses identified. Yes X No
Significant deficienciesidentified that
are not considered to be material weaknesses? Yes X None reported Type of auditor's report issued on compliance
for major programs: Unmodified
Any audit findings disclosed that are required to be
reported in accordance with
2 CFR section 200.516(a). Yes X No
Identification of major programs:

CFDA Number(s) Name of Federal Program orCluster

14.239 Home Investment PartnershipsProgram
Dollar threshold used to distinguish between Type A
and Type B programs: $750,000
Auditee qualified as low-risk auditee? Yes X No
Sept 14, 2023
75 Pg. 134
DRAFT

CITY OF AVENAL

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2020
SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2020-1 Bank Reconciliation - Repeated in Current Year Condition: During our audit procedures, we noticed that the City continues leaving the bank reconciliation unreconciled. The total cash balance on the operating bank account reconciliation did not reconcile to the cash balances recorded on the general ledger as of June 30, 2020, 2019, 2018 and 2017.

Criteria: The City should be clearing out all reconciling items from the bank reconciliation monthly to identify potential errors within the system and ensure their cash balance is correct.

Cause: The staff member responsible for approving the bank reconciliation is not checking all reconciling items are accounted for.

Effect: The City did not have a complete and accurate bank reconciliation as of June 30, 2020.

Recommendation: The City should consider a new accounting system that has the bank reconciliation module. The system will not allow finalizing the bank reconciliation until it is properly reconciled. Currently, it is prepared manually which allows us to stay continually unreconciled. The person responsible for approving should only sign if it is completely balanced.

Auditee’s Comments: The City is working with other software companies for quotes and demonstrations to find an appropriate program for the City to use.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None reported.
76 Sept 14, 2023 Pg. 135
DRAFT

CITY OF AVENAL

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30. 2020

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
Finding 2019-1 Bank Reconciliation - Repeated in Current Year Condition: During our audit procedures, we noticed that the total cash balance on the operating bank account reconciliation did not reconcile to the cash balances recorded on the general ledger as of June 30, 2020, 2019, 2018 and 2017.

Criteria: An effective internal control system provides reasonable assurance for the safeguarding of assets, and it requires that general ledger account balances be properly reconciled.

Cause: Due to the fact that the City has a small accounting department, the final and most important step on the reconciliation process was not performed due to time constraints.

The bank reconciliation balance was reconciled to the general ledger balances; however, there were remaining balances which were not material to the financial statements.

Effect: The City did not have a complete and accurate bank reconciliation as of June 30, 2020, 2019, 2018, and 2017.

Recommendation: The current format of the bank reconciliation makes reconciliation of the general ledger balance and the bank balance difficult. We recommend that the bank reconciliation format be changed to make reconciliation of these items easier. This would ensure that the bank statement is agreed to the general ledger on a monthly basis and enable a visible monthly summary of activity. We also recommend that a member of management review the completed bank reconciliation and documents his or her approval by initialing the form.

Auditee’s Comments: This finding is considered unresolved. 77 77
Sept 14, 2023 Pg. 136
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 10. B
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager & María A. Ortiz, City Clerk DATE: September 14, 2023
RE: Consider Extending the Agreement with Sotomayor & Associates LLP for the FY 2021 & 2022
INFORMATION:

The existing service provider for the Annual Audit Services is Sotomayor & Associates, LLP.

The City had originally executed a three-year contract with Sotomayor & Associates LLP, which expired on June 30, 2020.

The previous contract has an optional two-year extension of audit services for fiscal years 2020 and 2021. On November 5, 2020, the Council approved extending the agreement with Sotomayor for a period not to extend two (2) years. Given that the FY 2019-2020 Audit is now finalized, Sotomayor would like to revisit and execute a new engagement letter to begin work on the FY 2020-2021 Audit.

Because we are three (3) months into the new fiscal year 2023, it is in the City’s best interest to continue contacting with Sotomayor & Associates, LLP for auditing services in order to catch up to 2023 as quickly as possible.

Sotomayor anticipates completing the FY 2021 audit by December 2023. Soon after, City Staff will ask Sotomayor to begin the FY 2022 audit.

Given best practice is to solicit new auditors on average of five years, City Staff anticipates going out to RFP for the 2023 audit. Price Paige & Company would assist in this search.

RECOMMENDATION:

By Resolution, authorize and ratify, the City Manager and Mayor to enter into an engagement letter with Sotomayor & Associates, LLP extending the existing Professional Service Agreement for a period not to exceed one (1) years for FY 2020-2021 Annual Audit Services.

Sept 14, 2023 Pg. 137
1 of 2

BEFORE THE CITY COUNCIL OF THE

CITY OF AVENAL
IN THE MATTER OF:

A Resolution of The City Council of The
City of Avenal Authorizing and Ratifying
the City Manager and Mayor to Execute an
Engagement Letter Providing One-Year
Extension to an Existing Professional
Service Agreement with Sotomayor &
Associates LLP for FY 2020-2021 Annual
Auditing Services.

RESOLUTION 2023-__38__
WHEREAS, the existing contract for Annual Audit Services with Sotomayor & Associates LLP expired June 30, 2022; and
WHEREAS, the City does have a need for annual audit services in the routine course of business; and
WHEREAS, the contract for Annual Audit Services with Sotomayor & Associates LLP has an optional two-year extension; and
WHEREAS, both the City and Sotomayor & Associates LLP wish to enact the one-year extension and engagement letter.

UPON MOTION OF COUNCIL MEMBER ______ , SECONDED BY
COUNCIL MEMBER _______ , THE FOLLOWING WAS PASSED,

APPROVED, AND ADOPTED BY THE CITY COUNCIL AT AN OFFICIAL REGULAR MEETING HELD ON SEPTEMBER 14, 2023, BY THE FOLLOWING VOTE:

AYES:

NOES:

ABSTAIN:

ABSENT:

ATTEST:

Alvaro Preciado, Mayor

CITY OF AVENAL
MARIA A. ORTIZ, City Clerk

CITY OF AVENAL
Sept 14, 2023 Pg. 138
2 of 2
* * * * * * * * * * * * * * * * * *
NOW THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL:

1. Found the foregoing recitals to be true, correct and incorporated herein;

2. The City Council of the City of Avenal hereby authorizes the Mayor or City Manager to sign and execute documents and agreements related to this action on behalf of the City of Avenal.

3. Ordered relevant City staff to carry out the terms and conditions of this resolution and to take all steps reasonably necessary, proper and/or convenient and/or incidental thereto.
* * * * * * * * * * * * * * * * * *
Sept 14, 2023 Pg. 139
1 September 11, 2023
City of Avenal Audit Committee
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
We are pleased to confirm our understanding of the services we are to provide to the City of Avenal for the period ended June 30, 2021. We will audit the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information, including the related notes to the financial statements, which collectively comprise the basic financial statements of City of Avenal as of and for period ended June 30, 2021. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management’s discussion and analysis (MD&A), to supplement City of Avenal’s basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to City of Avenal’s RSI in accordance with auditing standards generally accepted in the United States of America.

These limited procedures will consist 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 financial statements, and other knowledge we obtained during our audit of the basic financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by U.S. generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited:
1) Management’s Discussion and Analysis
2) The Budgetary Comparison schedules
3) GASB required supplementary pension
4) OPEB
We have also been engaged to report on supplementary information other than RSI that accompanies City of Ceres’s financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with GAAS, and we will provide an opinion on it in relation to the financial statements as a whole in a report combined with our auditor’s report on the financial statements. 1) Schedule of expenditures of federal awards.
2) Combining and individual nonmajor fund financial statements Sotomayor & Associates, LLP
Certified Public Accountants
699 Hampshire Road, Suite 101
Westlake Village, California 91361
(626) 397-4900
Fax: (626) 397-4908
E-mail: [email protected]
Web Site www.sotomayorcpa.com
Sept 14, 2023 Pg. 140
2 Audit Objectives
The objective of our audit is the expression of opinions as to whether your financial statements are fairly presented, in all material respects, in conformity with generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and will include tests of the accounting records and other procedures we consider necessary to enable us to express such opinions. We will issue a written report upon completion of our audit of City of Avenal’s financial statements. Our report will be addressed to the Honorable Mayor and City Council of the City of Avenal. We cannot provide assurance that unmodified opinions will be expressed. Circumstances may arise in which it is necessary for us to modify our opinions or add emphasis-of-matter or other-matter paragraphs. If our opinions are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed opinions, we may decline to express opinions or may withdraw from this engagement.

Audit Procedures—General
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the government or to acts by management or employees acting on behalf of the government
Because of the inherent limitations of an audit, combined with the inherent limitations of internal control, and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements or noncompliance may exist and not be detected by us, even though the audit is properly planned and performed in accordance with U.S. generally accepted auditing standards and Government Auditing Standards. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements or on major programs. However, we will inform the appropriate level of management of any material errors, any fraudulent financial reporting, or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential, and of any material abuse that comes to our attention. We will include such matters in the reports required for a Single Audit. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors.

Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts and may include tests of the physical existence of inventories, and direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about your responsibilities for the financial statements; schedule of expenditures of federal awards; federal award programs; compliance with laws, regulations, contracts, and grant agreements; and other responsibilities required by generally accepted auditing standards.

Audit Procedures—Internal Control
Our audit will include obtaining an understanding of the government and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the Sept 14, 2023 Pg. 141
3 nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements.

Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards.

Audit Procedures—Compliance
As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of City of Avenal’s compliance with provisions of applicable laws, regulations, contracts, and agreements, including grant agreements. However, the objective of those procedures will not be to provide an opinion on overall compliance, and we will not express such an opinion.

Other Services
We will also assist in preparing the financial statements, schedule of expenditures of federal awards, and related notes of City of Avenal in conformity with U.S. generally accepted accounting principles and the Uniform Guidance based on information provided by you. These non-audit services do not constitute an audit under Government Auditing Standards and such services will not be conducted in accordance with Government Auditing Standards. We will perform the services in accordance with applicable professional standards. The other services are limited to the financial statements, schedule of expenditures of federal awards, and related notes services previously defined. We, in our sole professional judgment, reserve the right to refuse to perform any procedure or take any action that could be construed as assuming management responsibilities.

Management Responsibilities
Management is responsible for designing, implementing, and maintaining effective internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error, including monitoring ongoing activities; for the selection and application of accounting principles; and for the preparation and fair presentation of the financial statements in conformity with U.S. generally accepted accounting principles.

Management is also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, including identification of all related parties and all related-party relationships and transactions, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence.

Your responsibilities include adjusting the financial statements to correct material misstatements and confirming to us in the management representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements of each opinion unit taken as a whole.

You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud affecting the government involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the government received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the government complies with applicable laws and regulations.

Sept 14, 2023 Pg. 142
4 You are responsible for the preparation of the supplementary information in conformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon OR make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon]. Your responsibilities include acknowledging to us in the representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2) you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information.

You agree to assume all management responsibilities for financial statement preparation services and any other nonattest services we provide; oversee the services by designating an individual, preferably from senior management, with suitable skill, knowledge, or experience; evaluate the adequacy and results of the services; and accept responsibility for them.

Engagement Administration, Fees, and Other
We may from time to time and depending on the circumstances, use third-party service providers in serving your account. We may share confidential information about you with these service providers but remain committed to maintaining the confidentiality and security of your information. Accordingly, we maintain internal policies, procedures, and safeguards to protect the confidentiality of your personal information. In addition, we will secure confidentiality agreements with all service providers to maintain the confidentiality of your information and we will take reasonable precautions to determine that they have appropriate procedures in place to prevent the unauthorized release of your confidential information to others. In the event that we are unable to secure an appropriate confidentiality agreement, you will be asked to provide your consent prior to the sharing of your confidential information with the third-party service provider.

Furthermore, we will remain responsible for the work provided by any such third-party service providers.

We understand that your employees will prepare all cash, accounts receivable, or other confirmations we request and will locate any documents selected by us for testing.

The audit documentation for this engagement is the property of Sotomayor & Associates LLP and constitutes confidential information. However, subject to applicable laws and regulations, audit documentation and appropriate individuals will be made available upon request and in a timely manner to California State Controller’s Office or its designee, a federal agency providing direct or indirect funding, or the U.S. Government Accountability Office for purposes of a quality review of the audit, to resolve audit findings, or to carry out oversight responsibilities. We will notify you of any such request. If requested, access to such audit documentation will be provided under the supervision of Sotomayor & Associates LLP personnel. Furthermore, upon request, we may provide copies of selected audit documentation to the aforementioned parties. These parties may intend, or decide, to distribute the copies or information contained therein to others, including other governmental agencies.

We expect to begin our audit on September 12th, 2023 and to issue our reports as work permits no later than January 31, 2024. Ivan Sotomayor, CPA is the engagement partner and is responsible for supervising the engagement and signing the reports or authorizing another individual to sign them.

Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone, etc.) except that we agree that our gross fee, including expenses will not exceed $45,000. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit. Our invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with our firm policies, work may be suspended if your account becomes 30 (Thirty) days or more overdue and may not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed upon written notification of Sept 14, 2023 Pg. 143
5 termination, even if we have not completed our report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of termination. The above fee is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, we will discuss it with you and arrive at a new fee estimate before we incur the additional costs.

We appreciate the opportunity to be of service to the City of Avenal and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us.

Very truly yours,
Sotomayor & Associates LLP
RESPONSE:

This letter correctly sets forth the understanding of the City of Avenal Management signature:

Title:

Date:

Governance signature:

Title:

Date:

Sept 14, 2023 Pg. 144
September 11, 2023
Subject: Initial List of Required Documents for the Engagement In connection with the audit engagement for City of Avenal as required by Government Auditing Standards and OMB Circular A-133 for FY 2020-2021, please find enclosed the first list of documents, reports and schedules that we would like to request.

We would appreciate receiving these documents in electronic format where possible. This could be from your accounting system, Word or Excel. This will save us the time in scanning these documents. All information requested below should be prepared for the audit period, July 1, 2020 through June 30, 2021:
▪ City Organizational Chart
▪ Signed Board and Committee minutes related to City’s finance matters for FY 2020-2021 ▪ Approved cost allocation plan for the FY 2020-2021
▪ City budget for FY 2020-2021
▪ General ledger detail report of all transactions for year ended June 30, 2021 ▪ Trial balance for the year ended June 30, 2021 TB 12 and TB13 both. ▪ All bank statements and all bank reconciliation as of June 30, 2021 ▪ Accounting and finance policies and manuals
▪ The most recent tax fillings
▪ Most recent internal audit reports (if any)
▪ Brief description of accounting system and all other related information system ▪ Financial statements for the year ended June 30, 2021 ▪ Grouping Schedule for the year ended June 30, 2021
▪ Insurance policies for FY 2020-2021
▪ Summary and related supporting documents for government deposits and local agency investment fund ▪ All of the investment statements for the certificate of deposit during FY 2020-2021 ▪ All of the statement of the cash held by fiscal agent during FY 2020-2021 ▪ AR schedule for period 13 of FY 2020-2021
▪ Avenal Utilities Reconciliation FY 2020-2021
▪ Summary and related supporting documents for loan receivables/unearned revenue ▪ Avenal Annual Grant Report 2020-2021
▪ Spreadsheet for Capital Assets 2020-2021
▪ Fixed Assets Acquisitions List and supporting documents (purchase agreement, invoices, checks, etc.) FY 2020-2021
▪ Fixed Assets Retired List for FY 2020-2021
▪ All of the supporting documents (agreements, invoices, checks, etc.) for construction in progress ▪ Depreciation schedule for FY 2020-2021
▪ Spreadsheet for Inventory Water Sewer FY 2020-2021
▪ List of accounts payable as of June 30, 2021
Sotomayor & Associates, LLP
Certified Public Accountants
699 Hampshire Road, Suite 101
Westlake Village, California 91361
(626) 397-4900
Fax: (626) 397-4908
E-mail: [email protected]
Web Site www.sotomayorcpa.com
Sept 14, 2023 Pg. 145
▪ Schedule for Accounts payable accrual in period 13 FY 2020-2021 ▪ Check Register from July 1, 2020 to September 30, 2021 ▪ All of the payroll registers for FY 2020-2021
▪ New hire report for FY 2020-2021
▪ Termination report for FY 2020-2021
▪ Supporting documents (JEs, payroll register, timecards, etc.) of year end payroll accrual for FY 2020-2021 ▪ First payment period payroll register in FY 2020-2021 ▪ Public financing authority revenue bond documents (if any changes or updates) ▪ All of the CalPERS GASB 68 reports (both safety and misc. plans) for FY 2020-2021 ▪ OPEB Actuarial report for FY 2020-2021
▪ SEFA Report
▪ Exiting Capital and Operating Lease agreements (if any changes or updates) ▪ CSJVRMA audit report and all other related reports for FY 2020-2021 ▪ Schedule of Compensated Absences for FY 2020-2021
▪ Employee benefit plans and insurance programs
Note that this list is not inclusive of all documentation needed to complete the audit. We may request additional documentation as the engagement progresses.

If you have any questions, please do not hesitate to contact us.

Sincerely,
Ivan Sotomayor
Sotomayor & Associates, LLP
Sept 14, 2023 Pg. 146

City Council/Successor Agency/Public Finance AuthoritySeptember 14, 2023

City Council/Successor Agency/Public Finance Authority
September 14, 2023