Agenda — City Council/Successor Agency/Public Finance Authority, April 25, 2024 (part 1 of 2)

CITY OF AVENAL
“Pistachio Capital of the World®”

REGULAR CITY COUNCIL/SUCCESSOR AGENCY/PFA MEETING
APRIL 25, 2024; 5:15 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: Review of City Council Stipend/Compensation 4:15pm LAST ORDINANCE: 2022-06 CITY LAST RESOLUTION: 2024-15
(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):

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.

A. 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: 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.

2. Property Description: APN: 040-165-007 Negotiator(s): City Manager/City Attorney/CrisCom.

Party with whom negotiating: County of Kings/State of California. Instructions to negotiator concerning: Terms.

B. Pending Litigation (Government Code § 54956.9).

Conference with legal counsel – EXISTING LITIGATION (Government Code § 54956.9(d)(1)).

Parties, case/claim no: Ross Family Properties, LLC, v. City of Avenal (Kings County Superior Court, Case No. 24CU0071)

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.

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 March 28 & April 11, 2024.

B. Ratify Approval of Proclamation - Autism Acceptance and Awareness Month 2024.

C. Ratify adoption of the Fiscal Year 2020-2021 Financial Audit.

D. Consider Entering into an M.O.U. with Avenal Rotary Club for 2024 Old Timers’ Day Festival.

E. Consider Approval of a Subrecipient Agreement with County of Kings for a digital sign: Resolution 2024-16

6. ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

A. Activity Reports:

1. Police Department Activity Report: Cecilio Velasco, Chief of Police. a. SPECIAL RECOGNITIONS: Meritorious Conduct for Officers: Sofia Lopez and Irma Soto.

2. Community Development Activity Report: Karl Schoettler, Contract City Planner, 4Creeks B. Special Presentations/Reports:
1) MidValley Disposal: “Recycle Cart Rollout Update.” Presenter: Isaac Kulikoff April 25, 2025 Pg. 1

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

A. Consider Approval of Council Policy 2024-01 (Council Stipend/Compensation): Resolution 2024-17

8. PUBLIC HEARING(s):

A. None

9. OLD BUSINESS:

10. NEW BUSINESS:

A. Consider Approval to Establishing Two Temporary Employment Positions (Temporary Office Clerk & Temporary HR/Risk Assistant) within City Hall: Resolution 2024-18.

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, April 22, 2024.
__ /s/ Maria Ortiz
Maria Ortiz, City Clerk
April 25, 2025 Pg. 2

CIUDAD DE AVENAL
"Capital Mundial® del Pistacho"
REUNIÓN ORDINARIA DEL CONCEJO MUNICIPAL/AGENCIA
SUCESORA/PFA 25 DE ABRIL DE 2024; 5:15 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 usando el ID de reunión 872 4344 0488 para unirse.

Sesión de Estudio: Revisión del Estipendio/Compensación del Concejo Municipal 4:15 horas ÚLTIMA ORDENANZA: 2022-06 ÚLTIMA RESOLUCIÓN DE LA CIUDAD:
2024-15
(SA) ÚLTIMA RESOLUCIÓN: 2023-02 ÚLTIMA RESOLUCIÓN DE LA PFA:
2023-01
AGENDA

1. LLAMADO AL ORDEN Y JURAMENTO A LA BANDERA:

2. PASE NOMINAL: 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 ser elegidos para el Concejo Municipal. No reciben ninguna otra compensación por ser miembros de la Agencia Sucesora.

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

Es la intención de este órgano rector reunirse en sesión 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 Cerrada.

A. Conferencia con Negociador(es) de Bienes Raíces (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 con respecto a la compra, venta, intercambio o arrendamiento de bienes inmuebles por o para esta agencia de la siguiente manera:

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

Parte con quien negociar: Empresa CrisCom. Instrucciones al negociador relativas a: Condiciones de pago.

2. Descripción de la propiedad: APN: 040-165-007 Negociador(es): Administrador de la Ciudad/Abogado de la Ciudad/CrisCom.

Parte con la que se negocia: Condado de Kings/Estado de California. Instrucciones al negociador relativas a:

Términos.

B. Litigio pendiente (Código de Gobierno § 54956.9).

Conferencia con un asesor legal – LITIGIO EXISTENTE (Código de Gobierno § 54956.9(d)(1)).

Partes, caso/reclamación n.º: Ross Family Properties, LLC, contra la ciudad de Avenal (Tribunal Superior del Condado de Kings, caso n.º 24CU0071)

4. COMENTARIOS PÚBLICOS/ANUNCIOS Y APARICIONES NO PROGRAMADAS:

Cualquier persona puede dirigirse directamente al Concejo/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 Ayuntamiento/Agencia Sucesora. La ley estatal prohíbe que cualquier miembro del Consejo/Agencia comente o actúe sobre asuntos que no estén en la agenda. Se permiten tres (3) minutos por persona.

5. CALENDARIO DE CONSENTIMIENTO:

Todos los elementos enumerados en el calendario de consentimiento son rutinarios y se promulgan mediante una moción:
(Acción).

A. Considere la aprobación de las actas de la Ciudad de Avenal/Agencia sucesora para el 28 de marzo y el 11 de abril de 2024.

B. Aprobar la Proclamación - Mes de la Aceptación y Concientización sobre el Autismo 2024.

C. Consider Entering into an M.O.U. with Avenal Rotary Club for 2024 Old Timers’ Day Festival.

D. Considere la posibilidad de celebrar un memorando de entendimiento con el Club Rotario Avenal para el Festival del Día de los Veteranos de 2024.

E. Considerar la aprobación de un acuerdo de subreceptor con el condado de Kings para una señal digital:

Resolución 2024-16
April 25, 2025 Pg. 3

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

A. Informes de actividad:

1. Reporte de Actividad del Departamento de Policía: Cecilio Velasco, Jefe de Policía. a. RECONOCIMIENTOS ESPECIALES: Conducta meritoria para oficiales: Sofía López e Irma Soto.

2. Informe de Actividades de Desarrollo Comunitario: Karl Schoettler, Planificador Urbano Contratado, 4Creeks
B. Presentaciones/Informes Especiales:
a. “Recycle Cart Rollout Update.” Presenter: Isaac Kulikoff

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

A. Considerar la aprobación de la Política del Consejo 2024-01 (Estipendio/Compensación del Consejo):

Resolución 2024-17

8. AUDIENCIA(s) PÚBLICA(s):

A. Ninguno

9. NEGOCIOS ANTIGUOS:

10. NUEVOS NEGOCIOS:

A. Considerar la aprobación para establecer dos puestos de empleo temporal (empleado de oficina temporal y asistente temporal de recursos humanos/riesgos) dentro del Ayuntamiento: Resolución 2024-18.

11. CORRESPONDENCIA/ANUNCIOS/COMENTARIOS DE CIERRE:

Cualquier miembro del Consejo podrá solicitar que un tema se incluya en un orden del día futuro, siempre que una mayoría simple apoye también la adición de dicho tema. Queda terminantemente prohibido debatir o actuar sobre cualquier tema que no figure en el orden del día actual. Los comentarios finales tienen la intención de que los miembros del Consejo informen al público sobre la asistencia a cualquier evento especial y la información pertinente. • Próximos y futuros puntos del orden del día a tener en cuenta. • Correspondencia/Anuncios/Información/Comentarios finales.

12. APLAZAMIENTO:
1) De conformidad con la Ley de Estadounidenses con Discapacidades, si necesita asistencia especial para participar en esta reunión, comuníquese con la Oficina del Secretario Municipal al (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 [Concejo/Autoridad] después de la distribución del paquete de la agenda están disponibles para inspección pública en la oficina de [Secretarios Municipales] en 919 Skyline Blvd., Avenal, CA 93204 durante el horario comercial normal.

Certifico que esta Agenda del taller del Concejo Municipal 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 22 de abril de 2024.
__ /s/ María Ortiz
María Ortiz, Secretaria Municipal
April 25, 2025 Pg. 4

CITY OF AVENAL
“Pistachio Capital of the World®”

REGULAR CITY COUNCIL/SUCCESSOR AGENCY/PFA MEETING
March 28, 2024, 5:15 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 5:16 p.m.

ROLL CALL: Councilmen’s: Lou Gravelle, Pablo Hernandez, Councilman Ricardo Verdugo joined meeting at 5:30 p.m.

Mayor Pro Tem Alejandro Ramirez, Mayor Alvaro Preciado.

ABSENT: None.

STAFF: Lopez, Ortiz, Price, Bermudez, Davis, Velasco. Williams.

LEGAL COUNCEL: Moses Diaz.

CITY CLERK:

The City Council went into Closed Session at 5:19 p.m.

CLOSED SESSION: (City/Successor Agency):

It isthe 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.

A. 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: 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.

2. Property Description: APN: 040-165-007. Negotiator(s): City Manager / City Attorney.

Party with whom negotiating: CrisCom Company. Instructions to negotiator concerning: Terms.

B. Initiate Litigation (Government Code § 54956.9).

Conference with legal counsel – EXISTING LITIGATION (Government Code § 54956.9(d)(1)).

Parties, case/claim no: Ross Family Properties, LLC, v. City of Avenal (Kings County Superior Court, Case No. 24CU0071)
Mayor Preciado reopened meeting at 6:16 p.m. with nothing to report.

PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES:

Maria Ortiz, City Clerk announced: no public comment form submitted.

AGENDA ITEM NO. 5. – A.

April 25, 2025 Pg. 5
Joint Meeting City Council/Successor Agency/PFA – March 28, 2024

Page 2 of 3 ends

Cecilio Velasco, Chief of Police introduced Irma Soto, Senior Police Officer & Michael Harding, Police Officer to the Council. Chief Velasco stated that they are experienced and professional police and happy they’re on board. Senior Officer Soto and Officer Harding thanked the City Council now Avenal is their community.

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 March 14, 2024.

B. Consider Approval for Traffic Lines (striping) for South Seventh Ave. Road Project.

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

Roll Call Vote:

AYES: Gravelle, Hernandez, Verdugo, Ramirez, Preciado.

NOES: None.

ABSENT: None.

ABSTAIN: None.

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

A. Updates Regarding City Warrants, and Financial Statements (Informational) Griselda Price, Director of Administrative Services reported that Warrants & Financial Statements: As the Council is aware, City Staff is working with Price Paige & Company to help clean and organize the City’s financial books and bring all its numbers to actuality. Over the past few months, the Finance Department has worked closely with PP&C to provide all necessary information. The hope was to have an update and caught up on warrants and financial statements by the end of 2023, but many factors hindered PP&C from completing these tasks City Staff spoke to Josh Giosa, partner at PP&C who indicated they would provide a memo updating progress and current timeline for completing tasks for the City, as well as bank statements and General Ledger to show the status.

Audit: The 2020/2021 audit work is completed, per Sotomayor, as of Monday March 25th, 2024 (see attached email). The report is being drafted and staff expects to have it to Council before the April 11th meeting. Sotomayor is already preparing to initiate the 2021/2022 audit soon after.

ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

A. Activity Reports:
1) Police Department Activity Report: Cecilio Velasco, Chief of Police.

Cecilio Velasco, Chief of Police reported the following: 1) Avenal Police Department announces the return of Police Explore; 2) Leadership Stability; 3) Recruit and Retain the Best; 4) International Model of Community Trust; 5) Amongst the safest cities in America; and 6) Embrace wellness amongst our employees.

B. Special Presentations/Reports:
1) None.

PUBLIC HEARING(s):

A. None
OLD BUSINESS:

A. None.

NEW BUSINESS:

A. Consider Establishing One Additional Employment Position (Property & Evidence Officer) within Avenal Police Department (Resolution 2024-16): Chief Velasco.

Chief Velasco reported the following the strategic review of the Avenal Police Department's needs, it has been identified that the succession planning for the Property and Evidence responsibilities would be significantly enhanced by the creation of a April 25, 2025 Pg. 6
Joint Meeting City Council/Successor Agency/PFA – March 28, 2024

Page 3 of 3 ends

part-time Property and Evidence Officer. This action is aimed at ensuring the department's long-term operational stability and maintaining the integrity of our evidence management process, which is crucial for the justice system's effectiveness.

Creating the Property and Evidence Officer position is critical to the department's operation, and while the workload has remained consistent, the importance of preparing for future needs cannot be overstated. Currently these auxiliary duties are fulfilled by a Reserve Officer, who is also a retiree, and could plan to take time off in the future, creating a gap in fulfilling these duties.

Chief Velasco continues that to address this, the creation of a new part-time position within APD will serve as a key component in our succession planning efforts. This proactive approach will facilitate a smooth transition and continuous operation, safeguarding against potential operational vulnerabilities. Funding for this position will be allocated from existing personnel funds, capitalizing on savings from current vacancies. The use of existing funds ensures that the addition of this role is financially responsible and sustainable. Staff would recommend making any necessary adjustments in the next Fiscal Year budget to accommodate for the new position. Given the critical nature of the Property and Evidence Officer's role in our department and the necessity of robust succession planning, it is recommended that the City Council approve the establishment of an additional part-time Property and Evidence Officer position. This decision will reflect our commitment to maintaining the highest standards of operation within the Avenal Police Department and our foresight in planning for its future needs.

Staff recommends by Resolution, establishing one additional employment position within the Avenal Police Department, a part time Property and Evidence Officer. The Police Department- Utilize existing funds in the Personnel Budget for FY 2023/2024, and budget accordingly for FY 2024/2025.

RESOLUTION 2024-15: AMENDING AN EXISTING EMPOYMENT POSITION WITHIN CITY HALL PROPERTY & EVIDENCE OFFICER. Councilman Verdugo approved, second by Councilman Hernandez, and motion carried.

Roll Call Vote:

AYES: Verdugo, Hernandez, Gravelle, Ramirez, Preciado.

NOES: None.

ABSENT: None.

ABSTAIN: None.

CORRESPONDENCE/ANNOUNCEMENTS/CLOSING COMMENTS:

City Manager Lopez reported the following: 1) Financials will be presented at the next meeting; 2) Measure A brought in $700,00 and thanked the City Council.

Councilman Verdugo reported the following: 1) attended the Easter Egg Extravaganza great event and well attended.

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

ADJOURNMENT:

Mayor Preciado re-opened meeting at 7:22 with no further business the meeting was adjourned at 7:41 p.m.

Respectfully submitted,
Maria Ortiz, City Clerk
April 25, 2025 Pg. 7

CITY OF AVENAL
“Pistachio Capital of the World®”

REGULAR CITY COUNCIL/SUCCESSOR AGENCY/PFA MEETING
APRIL 11, 2024, 5:15 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 5:19 p.m.

ROLL CALL: Councilman Pablo Hernandez, Mayor Pro Tem Alejandro Ramirez, Mayor Alvaro Preciado.

ABSENT: Councilmen’s: Lou Gravelle, Ricardo Verdugo.

STAFF: Lopez, Ortiz, Price, Bermudez, Davis, Velasco. Williams Lara-Nieto, Nevarez.

LEGAL COUNCEL: Moses Diaz.

Mayor Preciado reported that as discussed with the City Attorney Moses Diaz due to Alejandro Ramirez, Mayor Pro Tem not feeling well decided to stay home and participate through teleconference to have a quorum.

Moses Diaz, City Attorney stated that is correct Mayor Pro Tem Ramirez is within the jurisdiction, which is one of the requirements when teleconference, the Board Members/the Council Members present need to approve of the teleconferencing. In addition, if the City Council has any technical requirements, they need to stop the meeting, resolve it before they can take any action or resume the meeting. So, the City Council must make sure that all are aware of the requirement. It is under the new legislation effective until January 1, 2026, in the League of Cities Opening Public meeting publication.

Mayor Preciado motioned to approve of the teleconferencing allowing Mayor Pro Tem Ramirez to patriciate in the meeting, seconded by Councilman Hernandez and motion carried.

Roll Call Vote:

AYES: Preciado, Hernandez, Ramirez.

NOES: None.

ABSENT: Gravelle, Verdugo.

ABSTAIN: None.

CITY CLERK:

Antony Lopez, City Manager requesting: 1) Adding Emergency Item to the agenda as New Business Item 10.-A. which would be to Consider Ratification and Adoption of the Fiscal Year 2020-2021 Financial Audit. This item was provided to Staff the day after the agenda was posted for this meeting and given that Staff has many organizations, grants that are waiting on this audit. It would be beneficial for the Council to approve this item at this meeting and Staff can bring it back for ratification at the next regular City Council meeting; and 2) Staff requesting consider opening Item 7.-A. Animal Control Report; Raul Valadez, Animal Control Officer II need to present first because has another engagement with Community Animal Shelter in Coalinga.

City Attorney Diaz state that an emergency item must have come to the attention of Staff after the posting of the agenda.

There must be an urgency needed to act before the next City Council meeting. In addition, to add the emergency item, there AGENDA ITEM NO. 5. – A.

April 25, 2025 Pg. 8
Joint Meeting City Council/Successor Agency/PFA – April 11, 2024

Page 2 of 5 ends

needs to be a majority approval of at least 4/5 here, since there only three (3) Council members the vote needs to be unanimous to add this item and as City Manager recommended, City Attorney Diaz, also recommend that these items be put on the agenda as urgency. Therefore, at the next meeting should be ratified/reapproved with a new opportunity for public to comment at that time and make sure that the City Council has a second approval using the proper time frame.

Mayor Preciado motioned to approve 1) Adding Emergency Item to the agenda as New Business Item 10.-A. which would be to Consider Ratification and Adoption of the Fiscal Year 2020-2021 Financial Audit; and 2) opening Item 7.- A. Animal Control Report; seconded by Councilman Hernandez and motion carried.

Roll Call Vote:

AYES: Preciado, Hernandez, Ramirez.

NOES: None.

ABSENT: Gravelle, Verdugo.

ABSTAIN: None.

7. ACTIVITY REPORTS/SPECIAL PRESENTATIONS& COMMITTEE REPORTS:

A. Activity Reports:
1) Animal Control Activity Report: Raul Valadez, Animal Control Officer II.

Raul Valadez, Animal Control Officer II reported the following: 1) Stray and abounded dogs, problem north of the high school and Avenal State Prison southbound of Hwy33 towards the Avenal Sports Complex; 2). Also, addressing these issues with City Manager, Public Works Director, and Public Works Supervisor to address issues with cats are free roaming animal and research State guidelines; 3) New rescues: Love Animal Heaven, Lemoore Animal Heaven & Santa Barbara Sanctuary to better assist us by either pulling animals from us, dogs, cats and believe it or not, owls, hawks, pigs, roosters, chickens, wildlife and farm animals; 4) multiple calls dogs running at large, do attaches etc.. the residents need to be honest about incidents going on to prioritize which is the most critical; 5) need more assistance with another Animal Control Vehicle, tranquilizer guns, netting all being useful but staff; 6) open door policy – He invites the City Council to come and see their work and ask question at the Animal Control Shelter; and 7) continue to work with the community/rescues and provide vaccinations for all dogs or cat May
The City Council went into Closed Session at 5:48 p.m.

CLOSED SESSION: (City/Successor Agency):

It isthe 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.

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

2. Property Description: APN: 040-165-007. Negotiator(s): City Manager / City Attorney.

Party with whom negotiating: CrisCom Company. Instructions to negotiator concerning: Terms.

B. Pending Litigation (Government Code § 54956.9).

Conference with legal counsel – EXISTING LITIGATION (Government Code § 54956.9(d)(1)).

Parties, case/claim no: Ross Family Properties, LLC, v. City of Avenal (Kings County Superior Court, Case No. 24CU0071)
Mayor Preciado reopened meeting at 6:26 p.m. with nothing to report. Welcomed all to the City Council meeting.

PUBLIC COMMENT/ANNOUNCEMENTS & UNSCHEDULED APPEARANCES:

Alma Madera commented that voicing support for the community grant funds for Kids Day 2024 and invited CONSENT CALENDAR:

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

April 25, 2025 Pg. 9
Joint Meeting City Council/Successor Agency/PFA – April 11, 2024

Page 3 of 5 ends

A. Consider City of Avenal/Successor Agency’s Approval of Minutes for March 28, 2024.

B. Consider Approval of Council Policy 2024-01 (Council Stipend/Compensation) Resolution 2024-16.

Mayor/Council Member/Successor Agency Member Preciado motioned to table this Consent Calendar, second by Councilman/Successor Agency Member Hernandez, and motion carried.

Roll Call Vote:

AYES: Preciado, Hernandez, Ramirez.

NOES: None.

ABSENT: Gravelle, Verdugo.

ABSTAIN: None.

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

A. Proclamation - Autism Acceptance and Awareness Month 2024.

Antony Lopez, City Manager gave a proclamation to Lucy Gonzales for Autism Acceptance and Awareness Month 2024.

City Manager Lopez read the proclamation:

Proclamation
Autism Acceptance and Awareness Month 2024
WHEREAS, autism affects an estimated 1 in 36 children and is a complex disorder that affects each person differently, resulting in unique strengths and challenges; and WHEREAS, autism can cause challenges with verbal and nonverbal communication, social interaction, and repetitive behaviors, and can affect anyone, regardless of age, race, ethnicity, gender, or socioeconomic background; and WHEREAS, autism is often accompanied by medical conditions that impact quality of life; and
WHEREAS, a comprehensive, collaborative approach will help to advance research, providing a better understanding of the many forms of autism, while strengthening advocacy efforts and ensuring access to services and resources throughout the lifespan; and
WHEREAS, early diagnosis and intervention tailored to individual needs can have lifelong benefits, easing the transition to adulthood and fostering greater independence; and, WHEREAS, each person and family affected by autism should have access to reliable information, services, supports and opportunities to live up to their greatest potential; and, WHEREAS, the City of Avenal is honored to take part in the annual observance of Autism Awareness Month and World Autism Day to address the diverse needs of individuals and families affected by autism; NOW, THEREFORE, I, Alvaro M. Preciado, do hereby proclaim April as Autism Acceptance and Awareness Month in the City of Avenal, California, and pledge to increase understanding and acceptance of Autistic People throughout the city.

IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Seal of the City of Avenal to be affixed this 11th day of April, in the year 2024.

SIGNATURE: ________________________________.

Alvaro M. Preciado, Mayor of Avenal
ATTEST: ________________________.

Maria A. Ortiz, City Clerk
ACTIVITY REPORTS/SPECIAL PRESENTATIONS & COMMITTEE REPORTS:

A. Activity Reports:

1. Public Works/Code Enforcement/Animal Control Departments Activity Report: Scott Davis, Public Works Supervisor.

Scott Davis, Public Works Supervisor reported the following: 1) Code Enforcement; 2) Park & Landscape; 3) Animal Control; 4) Streets; 5) Water Distribution; 6) Wastewater Distribution; and 7) Vehicle, Equipment, Building Maintenances.

April 25, 2025 Pg. 10
Joint Meeting City Council/Successor Agency/PFA – April 11, 2024

Page 4 of 5 ends

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

Humberto Bermudez, IT Manager reported the following: 1) Internet; 2) Phone System; 3) Emails; 4) Services: Regular Security Maintenance, -Continuing reorganizing documentation of all services for future reference, beginning ordering equipment to replace Kings County IT’s loaned networking equipment, Server purchasing to follow soon after. The City’s next scheduled check-in call is on April19th; and 5) Other: Continuing to assist in local events (Food distributions, Easter egg hunt) and continues to maintain the city website and provide tech support across all facilities. a. City Engineer Report, Javier Andrade – A&M Consulting Engineering:

Javier Andrade, PE, QSD/Principle Civil Engineer – A&M Consulting Engineers reported the following:1) Current Grant Applications – Raise Grant Application Raise Grant Application- Advancing Community Connectivity with Equity, Safety, and Sustainability (ACCESS) Approx.: 17M; Active Transportation Program Grant (ATP) (Cycle 7)- Undergrounding the Camino de Arroyo (trail) Approx.: 3-5Million; Sustainable Transportation Program (Completed)- Climate Action and Adaptation Plan $350,000; Congestion Mitigation And Air Quality (CMAQ)- Quick Build South 7th Approx.: $500,000; Congestion Mitigation And Air Quality (CMAQ)- North 7th Avenue reconstruction Approx.: $2 Million; •Urban GreeningAvenal Urban Greenway $3.5M.

3. Recreation Department Activity Report: Anna Senior Community Activities:

Anna Senior Community Activities: 1) Community Garden; 2) Easter Extravaganza – Was held on March 23rd from 11 – 2 p.m.; 3) Rental Report; 4) working on: Avenal Old Timers Day, Family Tea-Time, Summer Kidz Spot program. 5) Administrative Activity Report: Robert Nevarez, Director of Public Safety; 6) Collaborations: Avenal State Prison Kidz Day, Health Collaborative Outdoor Movies, Gear up / RSUSD Resource/ Health Fair, Rotary – OTD/Food Distributions, KCAO – Scholarships for Kidz Spot Summer Program, Valley Voices, Family Engagement Back to School Event; 7) Regular Rentals - Veterans Hall: Seniors, Monday-Friday 10-4pm, Every Saturday, KCAO (tax program) 8am-4pm. By appointment only, AA Group- Paid Rental, Assembly of God- Paid Rental. Avenal Theater – St Joseph Catholic Church.

Recreation Center - Kings County Election Office- Paid rental, Valley Voices- Every 2nd Friday of each month- Covid/Food Distribution – Paid Rental, St. Joseph Catholic Church- Paid Rental, Community paid rental. Rice Park Pavilion & Sports Complex: 6 Community – Paid Rental.

4. Activity Report for Public Safety: Anna Senior Community Activities:

Robert Nevarez, Director of Public Safety reported: 1) Significance projects; 2) planning staffing; 3) presenting budget in June;4) Police Department memorandum of understanding (MOU) recommendations; 5) Kings County MOU regarding Dispatching gave recommendations to City Manager; and 6) Internal Investigation Claim completed.

B. Special Presentations/Reports:
1) None.

PUBLIC HEARING(s):

A. None
OLD BUSINESS:

A. None.

NEW BUSINESS:

A. Consider ratification & adoption of the Fiscal Year 2020-2021 Financial Audit - EMERGENCY ITEM Griselda Price, Director of Administrative Services, reported that Mr. Ivan Sotomayor, CPA with Sotomayor and Associates, CPAs the City’s independent auditor, has submitted the FY 20/21 Audited Financial Statements for the Council/Agency Members on April 9, 2023. The FY 20/21 Audit is included in the Council Packet for the City Council/Successor Agency/PFA consideration. The FY 20/21 Audit contains no findings, compared to previous audits that highlighted the City’s struggles to reconcile the finance system with the bank statements in FY 15/16; 16/17; 17/18; 18/19; and 19/20. Of note, there was no report for the Single Audit given that the expenditures are below the single audit threshold of $750,000. This is being presented as an Emergency Item given that the final audit was submitted after the agenda was posted for the April 11th meeting and approving the audit to share with our grantors and other agencies as soon as possible is of upmost importance to not lose funding and allow projects to proceed.

April 25, 2025 Pg. 11
Joint Meeting City Council/Successor Agency/PFA – April 11, 2024

Page 5 of 5 ends

Staff recommends by motion, formal acceptance of the FY 20/21 Audited Financial Statements, ratifying the City Manager’s acceptance of said audit and consent to continue with Sotomayor and Associates, CPAs for the FY 21/22 audit, with an upcoming representation letter. Direct Staff to present this item once again at the next City Council meeting in the Consent Calendar.

CORRESPONDENCE/ANNOUNCEMENTS/CLOSING COMMENTS:

City Manager Lopez reported the following: 1) Thanked all Councilmember for their continued support of all the projects; 2) attended the Walk Audit and thanked all who participated; 3) City County Coordinating Meeting hosted by City of Hanford save the date and RSVP with Staff May 15th; 4) April 17th Avenal Police Department Block Party Corcoran by Lassen Street all invited; and 5) Also, will bring to the next meeting is an MOU with Rotary for events and Measure A brought in $700,000.

Mayor Preciado reported the following: 1) attended many meetings and thanks the community for attending.

ADJOURNMENT:

Mayor Preciado report that with no further business the meeting was adjourned at 8:41 p.m.

Respectfully submitted,
Maria Ortiz, City Clerk
April 25, 2025 Pg. 12
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: April 11, 2024
RE: Proclamation - Autism Acceptance and Awareness Month 2024 INFORMATION:

Staff is pleased to present support of the proposed proclamation for the City of Avenal to declare April as Autism Acceptance and Awareness Month. This initiative is not just a formal declaration; it symbolizes our city's commitment to fostering an inclusive and supportive community for all its members, especially those affected by autism.

Background and Importance
Autism affects approximately 1 in 36 children, cutting across all demographic lines. This complex condition presents both unique challenges and strengths. Recognizing and addressing these needs through Autism Acceptance and Awareness Month is crucial. It signifies our dedication to understanding autism's multifaceted nature and ensures that individuals and families affected by autism receive the support and resources they need.

Community Support
The Avenal community has shown robust support for individuals with autism and their families. Our Avenal Police Department officers wear autism awareness patches throughout April as one example. Additionally, our Community Activities staff's ongoing engagement with parents and families of special needs children exemplifies the City’s proactive approach. Through regular meetings, we have identified and work to integrate activities suited for all demographics into our events, ensuring inclusivity and accessibility for everyone.

Conclusion
Adopting this proclamation is a reaffirmation of our city's values of inclusivity, understanding, and support for all its residents, particularly those directly affected by autism. It aligns with our ongoing efforts, such as the commendable initiatives by our APD and Community Activities staff, and reiterates that we are a community that acknowledges and celebrates diversity in all forms.

Staff strongly advocates for the adoption of this proclamation and urge the City Council to recognize the significance of Autism Acceptance and Awareness Month. Let us stand united in supporting this initiative, reflecting the strength and compassion of our community.

RECOMMENDATION:

By motion, approve Proclamation 2024-01.

April 25, 2025 Pg. 13
Proclamation
Autism Acceptance and Awareness Month 2024
WHEREAS, autism affects an estimated 1 in 36 children and is a complex disorder that affects each person differently, resulting in unique strengths and challenges; and WHEREAS, autism can cause challenges with verbal and nonverbal communication, social interaction, and repetitive behaviors, and can affect anyone, regardless of age, race, ethnicity, gender, or socioeconomic background; and WHEREAS, autism is often accompanied by medical conditions that impact quality of life; and
WHEREAS, a comprehensive, collaborative approach will help to advance research, providing a better understanding of the many forms of autism, while strengthening advocacy efforts and ensuring access to services and resources throughout the life span; and
WHEREAS, early diagnosis and intervention tailored to individual needs can have lifelong benefits, easing the transition to adulthood and fostering greater independence; and,
WHEREAS, each person and family affected by autism should have access to reliable information, services, supports and opportunities to live up to their greatest potential; and,
WHEREAS, the City of Avenal is honored to take part in the annual observance of Autism Awareness Month and World Autism Day to address the diverse needs of individuals and families affected by autism;
NOW, THEREFORE, I, Alvaro M. Preciado, do hereby proclaim April as Autism Acceptance and Awareness Month in the City of Avenal, California and pledge to increase understanding and acceptance of Autistic People throughout the city.

IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the Seal of the City of Avenal to be affixed this 11
th day of April, in the year 2024.

SIGNATURE: ________________________
Alvaro M. Preciado,
Mayor of Avenal

ATTEST: _____________________________
Maria A. Ortiz, City Clerk
April 25, 2025 Pg. 14
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766

EMERGENCY ITEM
TO: The Honorable Mayor and City Council
FROM: Griselda Price, Director of Administrative Services DATE: April 11, 2023
RE: Consider ratification and formal adoption of the Fiscal Year 2020-2021 Financial Audit
INFORMATION:

Mr. Ivan Sotomayor, CPA with Sotomayor and Associates, CPAs the City’s independent auditor, has submitted the FY 20/21 Audited Financial Statements for the Council/Agency Members on April 9, 2023. The FY 20/21 Audit is included in the Council Packet for the City Council/Successor Agency/PFA consideration.

The FY 20/21 Audit contains no findings, compared to previous audits that highlighted the City’s struggles to reconcile the finance system with the bank statements in FY 15/16; 16/17; 17/18; 18/19; and 19/20.

Of note, there was no report for the Single Audit given that the expenditures are below the single audit threshold of $750,000.

This is being presented as an Emergency Item given that the final audit was submitted after the agenda was posted for the April 11th meeting, and approving the audit to share with our grantors and other agencies as soon as possible is of upmost importance to not lose funding and allow projects to proceed.

RECOMMENDATION:

By motion, formal acceptance of the FY 20/21 Audited Financial Statements, ratifying the City Manager’s acceptance of said audit and consent to continue with Sotomayor and Associates, CPAs for the FY 21/22 audit, with an upcoming representation letter.

Direct Staff to present this item once again at the next City Council meeting in the Consent Calendar.

April 25, 2025 Pg. 15
DRAFT

City of Avenal
California
Report on Financial Statements
For the Year Ended June 30, 2021
April 25, 2025 Pg. 16
DRAFT

CITY OF AVENAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2021

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 April 25, 2025 Pg. 17
DRAFT

TABLE OF CONTENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(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 April 25, 2025 Pg. 18
1 DRAFT
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and City Council
City of Avenal, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Avenal, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements 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, as of June 30, 2021, 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.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements The City’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.

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
April 25, 2025 Pg. 19
2 DRAFT
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit 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, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and budgetary comparison information be presented to supplement the basic financial statements. Such information is the responsibility of management and, 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.

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 combining and individual nonmajor fund financial statements are the responsibility of management and was derived from and relates 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 and individual nonmajor fund financial statements 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 March 15, 2024 on our consideration of 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 solely 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 the effectiveness of 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 City’s internal control over financial reporting and compliance.

Sotomayor & Associates, LLP
Certified Public Accountants
Westlake Village, CA
March 15, 2024
April 25, 2025 Pg. 20
DRAFT

GOVERNMENT-WIDE FINANCIAL STATEMENTS
April 25, 2025 Pg. 21
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, 2021
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments $ 4,428,441 $ 6,070,885 $ 10,499,326 Cash with fiscal agent 810,317 - 810,317
Receivables:

Consumer receivables - 979,053 979,053
Taxes 56,779 - 56,779
Intergovernmental 1,552,800 - 1,552,800
Grants 82,505 - 82,505
Community loans 0 - -
Notes 64,600 - 64,600
Internal balances 3,378,999 (3,378,999) -
Advances to other funds 1,740,000 - 1,740,000
Due from Successor Agency - - -
Inventories - 77,765 77,765
Other assets - 12,962 12,962
Non-depreciable 1,197,273 1,672,188 2,869,461
Depreciable, net of accumulated depreciation 19,157,227 11,021,699 30,178,926 Total assets 32,468,941 16,455,553 48,924,494

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 802,415 481,997 1,284,412 Deferred outflows from OPEB 1,469,280 302,970 1,772,250 Total deferred outflows of resources 2,271,695 784,967 3.056,662

LIABILITIES
Accounts payable 443,771 272,569 716,340
Accrued interest payable 85,192 - 85,192
Consumer deposits - 95,638 95,638
Unearned revenue 100,000 - 100,000
Due to Successor Agency 327,870 - 327,870
Due in one year:

Compensated absences 147,766 28,394 176,160
Revenue bond payable 410,000 - 410,000
Noncurrent liabilities:

Compensated absences - 68,238 68,238
Revenue bond payable 4,785,000 - 4,785,000
Net pension liability 1,529,062 1,895,103 3,424,165
Other postemployment benefit obligation 13,895,862 2,865,327 16,761,234 Total liabilities 21,724,523 5,225,313 26,949,836

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 1,931,271 398,234 2,329,505 Deferred inflows from OPEB 16,011 88,637 104,648
Total deferred inflows of resources 1,947,282 486,871 2,434,153

NET POSITION
Net investment in capital assets 15,159,500 12,693,887 27,853,387 Restricted for:

Highway and streets - - -
Community development - - -
Unrestricted (4,090,669) (1,165,551) (5,256,220)
Total net position $ 11,068,831 $ 11,528,336 $ 22,597,167 April 25, 2025 Pg. 22
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, 2021
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 $ 1,025,113 $ 30,929 $ 21,740 - $ (972,444) $ - $ (972,444) Building regulations 79,544 - - - (79,544) - (79,544)
Planning - 6,383 - - 6,383 - 6,383
Community development 558,696 275,903 1,051,290 - 768,497 - 768,497 Public safety: -
Law enforcement 3,76,801 129,435 162,846 - (2,784,520) - (2,784,520) Animal control 221,538 70,475 - - (151,061) - (151,061) Parks and recreation 349,424 4,432 - - (344,992) - (344,992) Highway & Streets 1,975,731 - 1,129,904 - (845,827) - (845,827) Interest on long-term debt (5,720) - - - (5,720) - (5,720) Total governmental activities 7,281,125 517,557 2,365,780 - (4,394,788) - (4,397,788) Business-type activities:

Water 5,231,135 5,797,376 - - - 566,242 566,242
Sewer 2,554,790 3,794,508 - - - 1,239,719 1,239,719
Solid waste 1,069,271 608,558 123,572 - - (337,141) (337,141) Streetlight 60,169 62,001 - - - 1,833 1,833
Total business-type activities 8,915,365 10,262,443 123,572 - - 1,470,652 1,470,652 Total $ 16,196,490 $ 10,780,000 $ 2,489,352 $ - $ (4,394,788) $ 1,470,652 $ (2,927,136) General revenues:

Taxes:

Property taxes 583,496 - 583,496
Sales taxes 342,106 - 342,106
Franchise taxes 332,302 - 332,302
Other taxes 7,277 - 7,277
Motor vehicle in-lieu 2,216,538 - 2,216,538
Rental income 337,379 - 337,379
Investment income 55,990 3,444 59,434
Miscellaneous 151,108 20,598 171,706
Transfers (937,974) 881,446 (56,528)
Total general revenues and transfers 3,088,222 905,488 3,993,710 Change in net position (1,309,566) 2,376,140 1,066,574
Net position - beginning 12,378,397 9,152,196 21,530,593 Prior period restatement* - - -
Net position - beginning (restated) 12,378,397 9,152,196 21,530,593 Net position - ending $ 11,068,831 $ 11,528,336 $ 22,597,167 April 25, 2025 Pg. 23
6 DRAFT
THIS PAGE IS LEFT BLANK INTENTIONALLY.

April 25, 2025 Pg. 24
7 DRAFT

FUND FINANCIAL STATEMENTS
April 25, 2025 Pg. 25

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, 2021
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 $ 3,353,588 $ 109,741 $ 219,695 $ 205,270 $ 25,438 $ 446 $ 514,263 $ 4,428,441 Cash with fiscal agent 246,000 564,317 - - - - - 810,317 Receivables:

Taxes 56,779 - - - - - - 56,779
Intergovernmental 21,759 - - - - - 1,531,041 1,552,800
Community loans - - 2,535,091 5,595,687 4,060,432 - - 12,191,210 Notes 64,600 - - - - - - 64,600
Interfund receivables - - - - - - - -
Due from Successor Agency - 3,455,000 - - - - - 3,455,000 Advances to other funds - 1,740,000 - - - - - 1,740,000 Total assets $ 3,742,726 $ 5,869,058 $ 2,754,786 $ 5,800,957 $ 4,085,870 $ 446 $ 2,045,304 $ 24,299,147

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 276,922 $ - $ - $ - $ - $ - $ 166,849 $ 443,771 Due to Successor Agency - 327,870 - - - - - 327,870
Interfund payables - - - - - - - -
Advances from other funds - 330,569 - - - - - 330,569
Unearned Revenue 100,000 - - - - - - 100,000
-
Total liabilities 376,922 658,439 - - - - 166,849 1,202,210

DEFERRED INFLOWS OF

RESOURCES
Unavailable revenues - loans - - 2,535,091 5,595,687 4,060,432 - - 12,191,210 Total deferred inflows of resources - - 2,535,091 5,595,687 4,060,432 - - 12,191,210 Fund balances:

Nonspendable:

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

Public safety - - - - - - - -
Highways and streets - - - - - - - -
Community development - - - - - - - -
Debt service - - - - - - - -
Committed:

Capital projects - - - - - - - -
Assigned:

General government - - - - - - - -
Unassigned 3,301,204 5,210,619 219,695 205,269 25,439 446 1,878,455 10,841,127 Total fund balances 3,365,804 5,210,619 219,695 205,269 25,439 446 1,878,455 10,905,727 Total liabilities and fund balances $ 3,742,726 $ 6,412,948 $ 2,754,786 $ 5,800,956 $ 4,085,871 $ 446 $ 2,045,304 $ 24,299,147 April 25, 2025 Pg. 26
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, 2021
Amounts reported for governmental activities in the statement of net position are different because:

Total fund balances -governmental funds $ 10,905,727
Capital assets used in governmental activities were not current financial resources and, therefore, were not reported in the governmental funds. 20,354,500 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 (1,529,062)
Other postemployment benefits (13,895,862)
Loan payable (5,195,000)
Compensated absences (147,766)
Unmatured interest on long-term debt is not accrued in the governmental funds, but rather is recognized as an expenditure when due. (85,192) Pension related deferrals are reported as deferred outflows and inflows of resources on the Statement of Net Position. 786,404
Post employment benefit deferrals are reported as deferred outflows and inflows of resources on the Statement of Net Position (461,991) Other long-term assets are not available to pay for current period expenditures and, therefore, they are deferred in the governmental funds. 337,073 Net position of governmental activities $ 11,068,831
April 25, 2025 Pg. 27
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, 2021
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 2,789,954 -
- - - - - 2789,954
Other taxes 690,944 - - - - - - 690,944
Intergovernmental revenues 266,567 - - - - 3,851 2,095,528 2,365,946 Charges for services 98,293 - - - - - - 98,293
Licenses and permits 293,316 - - - - - - 293,316
Fines and penalties 25,818 - - - - - - 25,818
Investment income 25,321 29,516 73 74 11 (98) 1,093 55,990 Rents 341,369 - - - -
- (3,991) 337,378
Loan repayments - - 48,818 52,277 26,647 - - 127,742
Other revenue 353,163 - - - - 47,500 - 400,663
Total revenues 4,884,745 29,516 48,891 52,351 26,658 51,253 2,092,630 7,186,044

EXPENDITURES
Current:

General government 737,079 -
- - - - 43,336 780,415
Building regulation 79,544 -
- - - - - 79,544
Community development 192,814 - 350 1,600 950 85,500 272,931 554,145 Public safety:

Law enforcement 2,899,548 - - - -
- - 2,899,548
Animal control 221,536 - - - -
- - 221,536
Parks and recreation 501,358 - - - -
- 182,617 683,975
Highways and streets -
- - - -- 450,414 450,414
Capital outlay:

General government 3,289 - - - -
- - 3,289
Building regulation -
- - - -- - -
Community development -
- - - -- - -
Public safety:

Law enforcement -
- - - -- - -
Animal control -
- - - - - - -
Parks and recreation -
- - - - - - -
Highways and streets -
- - - - - 1,409,823 1,409,823
Debt service: -
Principal - 390,000 - - - - - 390,000
Interest - 248,051 - - - - - 248,051
Total expenditures 4,635,168 638,051 350 1,600 950 85,500 2,359,121 7,720,740 Excess (deficiency) of revenues over
(under) expenditures 249,577 (608,535) 48,541 50,751 25,708 (34,247) (266,491) (534,696)

OTHER FINANCING SOURCES
(USES)
Transfers in - - - - - - - -
Transfers out - - - - - - (937,974) (937,974)
Total other financing sources (uses) - - - - - - (937,974) (937,974) Net change in fund balances 249,577 (608,535) 48,541 50,751 25,708 (34,247) (1,204,465) (1,472,670) Fund balances - beginning 3,116,227 5,819,154 171,154 154,518 (269) 34,693 3,082,920 12,378,397 Prior Period adjustments - - - - - - - -
Fund balances - ending $ 3,365,804 $ 5,210,619 $ 219,695 $ 205,269 $ 25,439 $ 446 $ 1,878,455 $ 10,905,727 April 25, 2025 Pg. 28

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, 2021
Amounts reported for governmental activities in the statement of activities are different because:

Net change in fund balances - total governmental funds $ (1,472,670) 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. 735,640
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. (5,585,000)
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. (633,214) 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. (2,976,487)
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. 390,000
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. 8,232,165
Change in net position of governmental activities $ (1,309,566) April 25, 2025 Pg. 29
DRAFT
THIS PAGE IS LEFT BLANK INTENTIONALLY.

April 25, 2025 Pg. 30
DRAFT

PROPRIETARY FUNDS
April 25, 2025 Pg. 31

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, 2021
Water Sewer Solid Waste Street Light
Fund Fund Fund Fund Total
ASSETS
Current assets:

Cash and investments $ 2,062,137 $ 2,951,688 $ 489,829 $ 567,213 $ 6,070,885 Consumer receivables 546,949 289,799 132,271 10,034 979,053 Supplies inventory 58,198 19,567 - - 77,765
Other assets 12,962 - - - 12,962
Total current assets 2,680,246 3,261,054 622,100 77,265 7,140,665 Noncurrent assets:

Advances to other funds - - - - -
Capital assets:

Nondepreciable 101,000 - - - 101,000
Construction in progress 427,151 1,144,037 - - 1,571,188 Depreciable, net 8,341,635 2,179,919 - 500,145 11,021,699 Total noncurrent assets 8,869,786 3,323,956 - 500,145 12,693,887 Total assets 11,550,032 6,585,010 622,100 1,077,410 19,834,552

DEFERRED OUTFLOWS OF

RESOURCES
Deferred outflows from OPEB 115,347 129,802 57,821 - 302,970 Deferred outflows from pensions 194,047 257,592 30,358 - 481,997 Total deferred outflows of resources 309,394 387,394 88,179 - 784,697

LIABILITIES
Current liabilities:

Accounts payable 181,284 43,419 45,621 2,245 272,569
Deposits 95,898 (14) (232) (14) 95,638
Compensated absences - - - - -
Total current liabilities 277,182 43,405 45,389 2,231 368,207 Noncurrent liabilities:

Advances from other funds 3,455,000 - - - 3,455,000
Compensated absences 32,027 60,119 4,486 - 96,632
Net pension liability 763,779 1,012,393 118,931 - 1,895,103 Other postemployment benefits obligation 1,090,903 1,227,617 546,852 - 2,865,372 Total noncurrent liabilities 5,341,709 2,300,129 670,269 - 8,312,107 Total liabilities 5,618,891 2,343,534 715,658 2,231 8,680,314

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from OPEB 151,616 170,616 - - 322,232
Deferred inflows from pensions 35,544 47,402 5,691 - 88,637 Total deferred inflows of resources 187,160 218,018 5,691 - 410,869

NET POSITION
Net investment in capital assets 8,869,786 3,323,956 - 500,145 12,693,887 Unrestricted (2,816,411) 1,086,896 (11,070) 575,034 (1,165,551) Total net position $ 6,053,375 $ 4,410,852 $ (11,070) $ 1,075,179 $ 11,528,336 April 25, 2025 Pg. 32
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, 2021
Water Sewer Solid Waste Streetlight
Fund Fund Fund Fund Total
Operating revenues
Charges for services $ 5,797,376 $ 3,794,508 $ 608,558 $ 62,001 $ 10,262,443 Operating expenses:

Personnel costs 2,008,654 1,658,335 311,835 6,899 3,985,723 Operations 451,371 152,470 - 59 603,900
Contract services - - 614,416 - 614,416
Franchise 93,789 - - - 93,789
Utilities 1,529,434 201,699 - 30,221 1,761,354
Administration 392,841 400,337 143,020 - 936,198
Depreciation 496,868 141,949 - 27,959 666,776
Total operating expenses 4,972,957 2,554,790 1,069,271 65,138 8,662,156 Operating income (loss) 824,419 1,239,718 (460,713) (3,137) 1,600,287 Nonoperating revenues (expenses):

Connection fees 24,238 20,158 - - 44,396
Other revenue 20,629 468 - - 21,066
Other surcharges and surtaxes - - 25 - 25
Interest income (438) 2,858 91 235 2,777
Department of Correction - 448 - - 448
Interest expense (174,305) - - - (174,305)
Total nonoperating revenues
(expenses) (129,879) 23,932 116 235 (105,593)
Other financing sources (uses):

Transfers in/(out) 121,240 913,307 (153,101) - 881,446
Total other financing sources (uses) 121,240 913,307 (153,101) - 881,446 Change in net position 815,783 2,176,957 (613,698) (2,902) 2,376,140 Net position - beginning 5,237,592 2,233,895 602,628 1,078,081 9,152,196 Prior period restatement* - - - - -
Net position - beginning (restated) 5,237,592 2,233,895 602,628 1,078,081 9,152,196 Net position - ending $ 6,053,375 $ 4,410,852 $ (11,070) $ 1,075,179 $ 11,528,336 * Prior period adjustment is required due to correction of interest income in various funds and Avenal City Operating Authority Fund balance not reported April 25, 2025 Pg. 33
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, 2021
Water Sewer Solid Waste Street Light
Fund Fund Fund Fund Total
Cash flows from operating activities:

Cash received from customers $ 2,999,890 $ 1,553,197 $ 746,301 $ 63,513 $ 5,362,901 Cash payments to suppliers for goods and services (763,239) 234,134) 2,656 (27,686) 1,022,403) Cash payments to employees for services (2,287,631) (2,070,559) (312,129) (6,899) 4,677,218) Cash payments to Other - - (710,343) - (710,343)
Net cash provided (used) by operating activities (50,980) (751,496) (273,515) 28,928 (1,047,063) Cash flows from noncapital financing activities:

Prior period adjustment - - - - -
Cash received/paid from other funds (18,760) 913,775 - (2) 895,013 Cash received for connection fees 44,867 20,606 123,542 - 189,014 Net cash provided (used) by noncapital financing activities 26,107 934,381 123,542 (2) 1,084,027 Cash flows from capital and related financing activities:

Acquisition of capital assets (21,676) - - - (21,676)
Gain (Loss) on Disposal of Equipment 1,791 1,791
Interest paid on capital debt (174,305) - - - (174,305) Net cash provided (used) by capital and related financing activities (194,190) - - - (194,190)
Cash flows from investing activities:

Interest on investments (438) 2,858 787 237 3,444
Net cash provided (used) by investing activities (438) 2,858 787 237 3,444 Increase (decrease) in cash and cash equivalents (219,501) 185,743 (149,186) 29,163 (153,782) Cash and cash equivalents - July 1 2,281,638 2,765,945 639,015 538,068 6,224,666 Cash and cash equivalents - June 30 $ 2,062,137 $ 2,951,688 $ 489,829 $ 567,231 $ 6,070,884 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income (loss) $ 824,419 $ 1,239,718 $ (460,713) $ (3,137) $ 1,600,287 Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation 496,868 141,949 - 27,959 666,776
Changes in assets, deferred outflows of resources,
Liabilities and deferred inflow of resources:
(Increase) decrease in consumer receivables (87,754) (117,936) (27,679) (2,624) (235,993) (Increase) decrease in supplies inventory 2,177 (6,248) - - (4,071) (Increase) decrease in receivables from other funds 295,662 - - - 295,662 (Increase) decrease in deferred outflows of resources
for pensions (108,557) 136,645 (22,487) - 5,601
(Increase) decrease in deferred outflows of resources
for OPEB 156,960 119,663 - - 276,623
Increase (decrease) in accounts payable 50,228 41,150 2,656 1,764 95,798 Increase (decrease) in consumer deposits 14,226 - - - 14,226 Increase (decrease) in compensated absences payable (15,068) (16,157) (157) - (31,382) Increase (decrease) in other postemployment benefits
obligation (1,856,424) (2,170,466) 212,515 4,966 (3,809,409) Increase (decrease) in net pension liability 467,602 212,483 17,605 - 697,690 Increase (decrease) in deferred inflows of resources
for pensions 12,024 37,431 4,745 - 54,200
Increase (decrease) in deferred inflows of resources
for OPEB (303,343) (369,728) - - (673,071)
Net cash provided (used) by operating activities $ (50,980) $ (751,496) $ (273,515) $ 28,928 $ (1,047,063) April 25, 2025 Pg. 34

CITY OF AVENAL

STATEMENT OF FIDUCIARY NET POSITION

SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
JUNE 30, 2021
Trust
Funds
The notes to the basic financial statements are an integral part of this statement. 15 DRAFT
ASSETS
Current assets:

Cash and investments $ 234,991
Due from City of Avenal 327,870
Total current assets 562,861
Land Inventory -
Total noncurrent assets -
Total assets 562,861

LIABILITIES
Current liabilities:

Accounts payable 3,310
Total current liabilities 3,310
Due to City of Avenal Public Finance Authority 1,740,000 Total noncurrent liabilities 1,740,000
Total liabilities 1,743,310

NET POSITION
Held in trust
$ (1,180,449)
April 25, 2025 Pg. 35

CITY OF AVENAL

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

SUCCESSOR AGENCY OF THE REDEVELOPMENT AGENCY
JUNE 30, 2021
Trust
Funds
The notes to the basic financial statements are an integral part of this statement. 16 DRAFT

ADDITIONS
Intergovernmental revenues $ 199,347
Interest (21,948)
Total additions 177,399

DEDUCTIONS
Planning and community development 142,874
Bond principal payments -
Interest and fiscal charges 89,850
Total deductions 232,724
Change in net position (55,325)
Net position - beginning (1,125,124)
Prior year adjustments -
Net position - ending $ (1,180,449)
April 25, 2025 Pg. 36
DRAFT

NOTES TO THE BASIC FINANCIAL STATEMENTS
April 25, 2025 Pg. 37

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 38
19 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 general revenues.

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.

April 25, 2025 Pg. 39
20 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 40
21 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 41
22 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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).

April 25, 2025 Pg. 42
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 43
24 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 44
25 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 is as follows:

Cash on hand $ 350
Primary government deposits 7,328,652
Local Agency Investment Fund 3,405,315
U.S. government securities 810,317
Total cash and investments $ 11,544,634
Government-Wide:

Statement of Net Position:

Cash and investments $ 10,499,326
Cash with fiscal agent 810,317
Fiduciary Funds 234,991
Total $ 11,544,634
April 25, 2025 Pg. 45
26 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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.

April 25, 2025 Pg. 46
27 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 $ 3,405,315 $ 3,405,315 $ - $ -
Morgan Stanley certificate of
deposit with Multi Bank Securities 246,000 - 246,000 -
Held by bond trustee:

Treasury obligation funds 564,317 564,317 - -
Total $ 4,215,631 $ 3,969,631 $ 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 $ 3,405,315 $ 3,405,315 $ $ -
Morgan Stanley certificate of deposit
with Multi Bank Securities 246,000 - 246,000 -
Held by bond trustee:

Treasury obligation funds 564,317 - 564,317 -
Total $ 4,215,631 $ 3,405,315 $ 810,317 $ -
April 25, 2025 Pg. 47
28 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021, the carrying amount of the City’s bank deposits was $ 87,328,652. 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, 2021 balance was $ 3,405,315. 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, 2020:

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 564,317 - 564,317 -
Total $ 810,317 $ 246,000 $ 564,317 $ -
Treasury obligations categorized as Level 2 are valued using a matrix pricing technique that values securities based on their relationship to benchmark quoted prices.

April 25, 2025 Pg. 48
29 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 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, 2021, the interfund balances are as follows:

Long-Term Interfund Advances
At June 30, 2021, 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, 2021:

Due to Fund Due from Fund Amount
None None -
Total $ -
Advances From Advances To Amount
Avenal Public Financing Authority Debt
Service Fund Water Fund $ 3,455,000
Total $ 3,455,000
6,557 Transfers
In Out Reasons
Major Funds:

Governmental funds:

General Fund $ - $ 937,974 Capital assets from capital improvement projects and 20% Cost of Refuse Service to Residents
Other governmental funds:

CDBG Program Income Special
Revenue Fund -
Capital Improvement Project Fund -
Enterprise funds:

Water Fund
Sewer Fund
121,240
816,734
-
-
20% Cost of Refuse Service to Residents
Total $ 937,974 $ 937,974
April 25, 2025 Pg. 49
30 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021

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, 2021, 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 $32,410 as of June 30, 2021. 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 $12,191,210 as of June 30, 2021.

April 25, 2025 Pg. 50
31 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2020 Increases Decreases
Balances
June 30, 2021
Governmental Activities:

Capital assets not being depreciated:

Land $ 1,131,602 $
0 - $ - $ 1,131,602
Construction in progress 105,554 1,620,935 (1,660,818) 65,671 Total capital assets not being depreciated 1,237,156 1,620,935 1,197,273 Capital assets being depreciated:

Buildings and improvements 11,937,062 253,612 - 12,190,674 Machinery and equipment 4,584,409 51,654 - 4,636,063
Infrastructure 25,792,966 1,407,206 - 27,200,172
Total capital assets being depreciated 42,314,437 1,712,472 - 44,026,909 Less accumulated depreciation for:

Buildings and improvements (3,520,855) (303,493) - (3,824,348) Machinery and equipment (3,163,065) (268,727) - (3,431,792) Infrastructure (15,918,741) (786,359) - (16,705,100)
Total accumulated depreciation (22,602,661) (1,358,579) - (23,961,240) Total capital assets being depreciated, net 19,711,776 353,893 - 20,065,669 Governmental activities capital assets, net $ 20,948,932 $ 1,974,828 $ (1,660,818) $ 21,262,942 General government $ 299,406
Community development -
Parks and recreation 176,790
Highway and streets 725,116
Public safety 105,186
Public works 52,081
Total $ 1,358,579
April 25, 2025 Pg. 51
32 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 6 – CAPITAL ASSETS (Continued)
Balances Balances
July 1, 2019 Increases Decreases June 30, 2020
Business-Type Activities:

Capital assets not being depreciated:

Land $ 101,000 $ - $ - $ 101,000
Construction in progress 633,214 $ 937,974 - 1,571,188
Total capital assets not being depreciated 734,214 937,974 - 1,672,188 Capital assets being depreciated:

Buildings and improvements 7,939,279 - - 7,939,279
Machinery and equipment 1,530,427 - - 1,530,427
Utility system - - - -
Infrastructure 21,732,064 - - 21,732,064
Total capital assets being depreciated 31,201,770 - - 31,201,770 Less accumulated depreciation for:

Buildings and improvements (4,560,361) (164,941) - (4,725,302) Machinery and equipment (1,161,915) (54,639) - (1,216,554) Utility system - - - -
Infrastructure (13,791,019) (447,196) - (14,238,215)
Total accumulated depreciation (19,513,295) (666,776) - (20,180,071) Total capital assets being depreciated, net 11,688,475 (666,776) - 11,021,699 Business-type activities capital assets, net $ 12,422,689 $ 271,198 - 12,693,887 Total capital assets $ 33,371,621 $ 2,246,026 $ - $ 33,956,829 Depreciation expense on capital assets was charged to the business-type functions as follows:

Water $ 496,868
Sewer 141,949
Solid Waste -
Streetlight 27,959
Total $ 666,776
April 25, 2025 Pg. 52
33 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 $ 2,535,091 $ - $ - $ 2,535,091
HOME loans - 5,595,687 - 5,595,687
CDBG loan - - 4,060,432 4,060,432
Total $ 2,535,091 $ 5,595,687 $ 4,060,432 $ 12,191,210
April 25, 2025 Pg. 53
DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 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, 2021 was $3,847.37.

Future minimum operating lease commitments are as follows:

Year Ending June 30,
2021 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 April 25, 2025 Pg. 54
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 $68,238 for business- type activities at June 30, 2021 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, 2020 Incurred Satisfied
Balance
June 30, 2021
Amounts
Due Within
One Year
Amounts Due in
More
Than One Year
Governmental Activities:

Compensated absences $ 188,180 $ 113,747 $ (154,161) $ 147,766 $ 147,766 $ - Business-Type Activities:

Compensated absences $ 96,457 $ 39,101 $ (38,927) $ 96,632 $ 28,394 $ 68,238 April
35 25, 2025 Pg. 55
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021:

Balance
July 1, 2020
Incurred
or Issued
Satisfied
or Matured
Balance
June 30, 2021
Amounts
Due Within
One Year
Amounts
Due in More
Than One Year
Governmental Activities:

Revenue bonds $ 5,585,000 $ 390,000 $ 5,195,000 $ 5,195,000 $ 410,000 $ 4,785,000 Total governmental activities $ 5,585,000 $ 390,000 $ 5,195,000 $ 5,195,000 $ 410,000 $ 4,785,000 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, 2021 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
April 25, 2025 Pg. 56
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 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
April 25, 2025 Pg. 57
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 $150,061 for the fiscal year ended June 30, 2021.

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, 2021 were $600,802.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2021, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $3,424,165.

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, 2020 and 2021 was as follows:

Total
Proportion - June 30, 2020 0.0303%
Proportion - June 30, 2021 0.0303%
Change - Increase/(Decrease) 0.0011%
For the year ended June 30, 2021, the City recognized pension expense of $862,107. At June 30, 2021, 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 $ 608,070 $ - Changes in assumptions - 24937
Differences between actual and expected experience 264,048 - Net differences between projected and actual earnings on plan investments 116,193 -
Changes in employer's proportions 141,131 4590
Differences between the employer's actual contributions and the employer's proportionate share of contributions 154,970 75121 Total $ 1,284,412 $ 104,648
April 25, 2025 Pg. 58
39 DRAFT

CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$600,802 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, 2022. 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, 2021 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.

April 25, 2025 Pg. 59
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021.

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 April 25, 2025 Pg. 60
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 4,429,383 2,768,365 1,393,1667
Safety Plan 1,049,281 655,800 314,426
Total $ 5,478,664 $ 3,424,165 $ 1,707,593
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, 2021.

April 25, 2025 Pg. 61
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 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, 2021, the City’s cash contributions were $128,075 in total payments, which were recognized as a reduction to the OPEB liability.

E. Change in Assumptions
The discount rate decreased from 2.79 percent at June 30, 2019 to 2.66 percent at June 30, 2020, resulting in a change in assumption in the amount of $405,863.

F. Discount Rate
The discount rate used was based on the Bond Buyer 20-bond General Obligation index. At June 30, 2021, 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.

April 25, 2025 Pg. 62
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 2.66% at June 30, 2020 (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 4.9% in 2023 decreasing to 4.8% 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, 2021, were as follows:

Total OPEB
Liability
Balance at 6/30/20* $ 14,893,053
Changes for the year:

Service cost 1.208,894
Interest 446,550
Assumption changes 405,863
Benefit payments and refunds (193,126)
Net Changes 1,868,181
Balance at 6/30/21** $ 16,761,234
*Measurement date 6/30/19
**Measurement date 6/30/20
April 25, 2025 Pg. 63
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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 As of fiscal year, ended June 30, 2021, the City reported deferred outflows of resources related to OPEB from the following sources:

The City will recognize the Deferred contribution in the next fiscal year. In addition, future recognition of these deferred resources is shown below.

Current - 1%

1.66%
Current

2.66%
Current + 1%

3.66%
Total OPEB Liability $ 20,401,473 $ 16,761,234 $ 13,965,501 Current - 1% Current
Trend
Current + 1%
Total OPEB Liability $ 13,892,034 $ 16,761,234 $ 20,531,847 Deferred Outflows of Resources Deferred Inflows of Resources Employer contributions made
subsequent to the measurement date $ 221,346 $ -
Difference Between Expected and
Actual Experience $ 626,895 $ 1,598,457
Changes of assumptions 1,145355 731,048
Total $ 1,993,596 $ 2,329,505
Fiscal Year Ended
June 30
Deferred Outflows/
(Inflows) of Resources
2022 $ (91,455)
2023 (91,455)
2024 (91,455)
2025 (91,455)
2026 (91,455)
Thereafter (99,980)
Total $(557,255)
April 25, 2025 Pg. 64
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021:

Total assets $ 150,621,596
Total liabilities 129,774,819
Member's equity $ 20,846,777
Total revenues $ 55,391,674
Total expenses 54,084,619
Excess of income (loss) over expenses $ 1,307,055
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.

April 25, 2025 Pg. 65
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021:
0BGovernmental Funds:

Nonmajor Funds:

Tire Amnesty Special Revenue Fund $ -
Community Development Block Grant Fund -
Water Trans Line Grant Fund -
Avenal City Operating Authority -
April 25, 2025 Pg. 66
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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, 2021 was comprised of the following:

Balance
July 1, 2020 Additions Retirements
Balance
June 30, 2021
Due Within
One Year
Avenal 2005 Refunding
Revenue Bond $ 2,225,000 $ 485,000 $ - $ 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, 2021, 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.

April 25, 2025 Pg. 67
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
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. 91 The GASB has issued Statement No. 91, "Conduit Debt Obligations." The requirements of this Statement are effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged. The primary objectives of this Statement are to provide 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. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments April 25, 2025 Pg. 68
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CITY OF AVENAL

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
49 extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2023.

Governmental Accounting Standards Board Statement No. 94 The GASB has issued statement No. 94, “Public-Private and Public-Public Partnerships and Availability Payment Arrangements”. The objective of this Statement is to better meet the information needs of financial statement users by improving the comparability of financial statements among governments that enter into PPPs and APAs and by enhancing the understandability, reliability, relevance, and consistency of information about PPPs and APAs. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2023.

Governmental Accounting Standards Board Statement No. 96 The GASB has issued statement No. 96, “Subscription-Based Information Technology Arrangements”. The objective of this Statement is to better meet the information needs of financial statement users by (a) establishing uniform accounting and financial reporting requirements for SBITAs; (b) improving the comparability of financial statements among governments that have entered into SBITAs; and (c) enhancing the understandability, reliability, relevance, and consistency of information about SBITAs. The City will implement this statement, as applicable, to its financial statements for the year ending June 30, 2023.

Governmental Accounting Standards Board Statement No. 97 The GASB has issued statement No. 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans”. The primary objectives of this Statement are to (a) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (b) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (c) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans.

April 25, 2025 Pg. 69
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April 25, 2025 Pg. 70
DRAFT

REQUIRED SUPPLEMENTARY INFORMATION
April 25, 2025 Pg. 71

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, 2021
Fiscal Year Ending 2021 2020 2019
Measurement Date 06/30/2020 06/30/2019 06/30/2018
Discount Rate on the Measurement Date 2.66% 2.79% 2.98% Total OPEB Liability
Service Cost $ 1,208,894 $ 1,233,237 $ 1,143,993
Interest 446,550 451,093 413,907
Changes of Benefit terms - - -
Differences between expected and actual experience - (1,196,200) - Changes of assumptions 405,863 587,529 420,572
Benefit payments (193,126) (173,385) (135,116)
Net change in total OPEB liability 1,868,181 902,274 1,843,356 Total OPEB liability - beginning 14,893,053 13,990,779 12,147,423 Total OPEB liability – ending (a) 16,761,234 14,893,053 13,990,779 Plan fiduciary net position – beginning - - -
Plan fiduciary net position – ending (b) - - -
Net OPEB liability – ending (a) – (b) $ 16,761,234 $ 14,893,053 $ 13,990,779 Covered-employee payroll 3,535,941 3,670,844 3,437,200
Net OPEB liability as a % of covered-employee
payroll
474.02 % 405.71% 407.04%
April 25, 2025 Pg. 72

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.
2017 2018 2019 2020 2021
Proportion of the net pension liability 0.0285% 0.0290% 0.0292% 0.0303% 0.0315% Proportionate share of the net pension liability $ 2,464,592 2,880,505 2,813,825 3,104,329 3,424,165 Covered payroll $ 2,389,045 2,284,031 2,696,343 3,138,337 3,243,431 Proportionate share of the net pension liability
as percentage of covered payroll 103.16% 126.11% 104.36% 98.92% 105.57% Plan fiduciary net position as a percentage of the
total pension liability 77.40% 76.08% 78.10% 77.60% 77.32% April 25, 2025 Pg. 73

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.
2017 2018 2019 2020 2021
Actuarily required contribution (actuarially
determined) $ 364,226 439,707 515,718 600,802 608,070
Contributions in relation to the actuarially
determined contributions 364,226 439,707 515,718 600,802 608,070 Contribution deficiency (excess) $ - - - - -
Covered payroll $ 2,284,031 2,696,343 3,138,337

3,243,431

2,903,782
Contributions as a percentage of covered
payroll

15.95% 16.31% 16.43% 18.52% 20.94%
April 25, 2025 Pg. 74

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, 2021
Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Property taxes $ 2,693,000 $ 2,693,000 $ 2,789,954 $ 96,954 Other taxes 677,852 677,852 690,944 13,092
Intergovernmental revenues 210,500 210,500 266,567 56,067 Charges for services 124,260 124,260 98,293 (25,967)
Licenses and permits 159,350 159,350 293,316 133,966
Fines and penalties 33,660 33,660 25,818 (7,842)
Investment income 40,130 40,130 25,321 (14,809)
Rent 520,236 520,236 341,369 (178,867)
Other revenue 208,900 208,900 159,382 (49,518)
Total revenues 4,667,888 4,667,888 4,690,964 23,076

EXPENDITURES
Current services:

General government 622,903 622,903 737,079 (114,176)
Building regulations 183,750 183,750 79,544 104,206
Community development 511,853 511,853 192,814 319,039
Public safety:

Law enforcement 3,582,380 3,582,380 2,899,548 682,832
Animal control 227,600 227,600 212,536 6,064
Parks and recreation 716,820 716,820 501,358 215,462
Capital outlay:

General government 51,300 51,300 3,289 47,911
Community development - - - -
Parks and recreation 1,000 1,000 - 1,000
Public safety:

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

Principal - - - -
Interest - - - -
Total expenditures 5,959,689 5,959,689 4,635,168 1,324,521 Excess (deficiency) of revenues over
(under) expenditures (1,291,801) (1,291,801) 55,796 1,347,597

OTHER FINANCING SOURCES (USES)
Transfers in $ 214,375
$
214,375 $ - $ (214,375)
Transfers out (132,000) (132,000) - 132,000
Total other financing sources (uses) 82,375 82,375 - (82,375) Net change in fund balances (1,209,426) (1,209,426) 55,796 1,265,222 Fund balance - beginning 3,116,227 3,116,227 3,116,227 - Prior period adjustment - - 193,781 193,781
Fund balance - ending $ 1,906,801 $ 1,906,801 $ 3,365,804 $ 1,459,003 April 25, 2025 Pg. 75

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, 2021
Variance with
Budgeted Amounts Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental revenues $ - $ - $ - $ -
Investment income 30 30 73 43
Loan repayments 500 500 48,818 48,318
Total revenues 530 530 48,892 48,362

EXPENDITURES
Current services:

Community development - - 350 (350)
Total expenditures - - 350 (350)
Excess (deficiency) of revenues over (under)
expenditures 530 530 48,542 48,012

OTHER FINANCING SOURCES (USES)
Transfers in
$ -
-
$ -
-
$ -
-
$ -
-
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances 530 530 48,542 48,012
Fund balance - beginning 64,586 64,586 64,586 -
Fund balance - ending $ 65,116 $ 65,116 $ 113,128 $ 48,012 April 25, 2025 Pg. 76

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, 2021
Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Investment income $ 20 $ 20 $ 74 $ 54
Loan repayments 5,600 5,600 52.277 46,677
Total revenues 5,620 5,620 52,351 46,731

EXPENDITURES
Transfers in - - - -
Community development 78 78 1,600 (1,522)
Net change in fund balances 5,542 5,542 50,751 45,209
Fund balance - beginning 154,518 154,518 154,518 -
Fund balance - ending $ 160,060 $ 160,060 $ 205,269 $ 45,209 April 25, 2025 Pg. 77

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, 2021
DRAFT
57 Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Investment income $ 110 $ 110 $ 10 $ (99)
Loan repayments 36,200 36,200 26,647 (9,553)
Total revenues 36,310 36,310 26,657 (9,653)

EXPENDITURES
Community development - - 950 (950)
Total expenditures - - 950 (950)
Excess (deficiency) of revenues over
(under) expenditures 36,310 36,310 25,707 (10,603)

OTHER FINANCING SOURCES (USES)
Transfers in $ - $ - $ - $ -
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances 36,310 36,310 25,707 (10,603) Fund balance - beginning - - 280,619 280,619
Fund balance - ending $ 36,310 $ 36,310 $ 306,326 $ 270,016 April 25, 2025 Pg. 78

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, 2021
DRAFT
58 Variance with
Budgeted Amount Final Budget -
Positive
Original Final Actual (Negative)

REVENUES
Intergovernmental revenues $ 4,941,041 $ 4,941,041 $ 3,851 $ (4,937,190) Investment income - - (98) (98)
Total revenues 4,941,041 4,941,041 3,753 (4,937,288)

EXPENDITURES
Current services:

Community development 4,949,081 4,949,081 85,500 4,863,581 Total expenditures 4,949,081 4,949,081 85,500 4,863,581 Excess (deficiency) of revenues over
(under) expenditures (8,040) (8,040) (81,747) (73,707)

OTHER FINANCING SOURCES
(USES)
Transfers in $ - $ - $ - $ -
Transfers out - - - -
Total other financing sources (uses) - - - -
Net change in fund balances (8,040) (8,040) (81,747) (73,707) Fund balance - beginning 34,696 34,696 34,693 -
Fund balance - ending $ 26,653 $ 26,653 $ (47,054) $ (73,707) April 25, 2025 Pg. 79

CITY OF AVENAL

NOTES TO THE REQUIRED SUPPLEMENTARY
INFORMATION FOR THE YEAR ENDED JUNE 30, 2021
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.

April 25, 2025 Pg. 80
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OTHER SUPPLEMENTARY INFORMATION
April 25, 2025 Pg. 81
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.

April 25, 2025 Pg. 82

CITY OF AVENAL
DRAFT
62 COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTALFUNDS
JUNE 30, 2021
Nonmajor Special
Revenue
Nonmajor Capital
Projects
Total
Nonmajor
Governmental
Funds
ASSETS
Cash and investments $ 2,795,239 $ 9,709 $ 2,804,948
Receivables:

Intergovernmental 770,473 - 770,473
Total assets $ 3,565,712 $ 9,709 $ 3,575,421

LIABILITIES AND FUND BALANCES
Liabilities:

Accounts payable $ 166,849 $ - $ 166,849
Interfund payables - - -
Total liabilities 166,849 - 166,849
Fund balances:

Restricted for:

Highways and streets 1,272,312 - 1,272,312
Community development 1,639,701 - 1,639,701
Committed:

Capital projects - 9,709 9,709
Unassigned 486,850 - 486,850
Total fund balances 3,398,863 9,709 3,408,572
Total liabilities and fund balances $ 3,565,712 $ 9,709 $ 3,575,421 April 25, 2025 Pg. 83

CITY OF AVENAL
DRAFT
63 COMBINING STATEMENT OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTALFUNDS
FOR THE YEAR ENDED JUNE 30, 2021
Nonmajor
Special
Revenue
Nonmajor
Capital
Projects
Total
Nonmajor
Governmental
Funds

REVENUES
Intergovernmental revenues $ 2,314,511 $ - $ 2,314,511
Investment income 1,077 13 1,090
Rents (3,991) - (3,991)
Miscellaneous1 - - -
Total revenues 2,311,597 13 2,311,610

EXPENDITURES
Current:

General government 43,336 - 43.336
Community development 37,085 - 37,085
Parks and recreation 9,035 - 9,035
Highways and streets 450,414 - 450,414
Capital outlay:

Parks and recreation -
-
-
Highways and streets 1,367,323 - 1,367,323
Total expenditures 1,907,193 - 1,907,193
Excess (deficiency) of revenues over
(under) expenditures 404,404 13 404,417

OTHER FINANCING SOURCES (USES)
Transfers out - - -
Total other financing sources (uses) - - -
Net change in fund balances 404,404 13 404.417
Fund balances - beginning 2,994,459 96,96 3,004,155
Prior year adjustments - - -
Fund balances - ending $ 3,398,863 $ 9,709 $ 3,408,572
April 25, 2025 Pg. 84

CITY OF AVENAL
DRAFT
64 COMBINING BALANCE SHEET

NONMAJOR SPECIAL REVENUE FUNDS
JUNE 30, 2021
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 $ 891,617 $ - $ 1,605,359 $ - $ 98,640 $ 245,923 $ (46,300) $ 2,795,239 Receivables: -
Intergovernmental 503,399 - 52,380 - - 214,694 - 770,473 Total assets $ 1,3,95,016 $ - $ 1,657,739 $ - $ 98,640 $ 460,617 $ (46,300) $ 3,565,712

LIABILITIES AND FUND

BALANCES
Liabilities:

Accounts payable $ 122,704 $ - $ 18,038 $ - $ - $ 25,079 $ 1,028 $ 166,849 Interfund payables $ - - - - - - - -
Total liabilities - - 18,038 - - 25,079 - 166,849
Fund balances:

Restricted:

Highways and streets 1,272,312 - - - - - - 1,272,312
Community development - - 1,639,701 - - - - 1,639,701
Unassigned - - - - 98,640 130,778 (47,328) 486,850
Total fund balances 1,272,312 - 1,639,701 - 98,640 130,778 (37,328) 3,398,863 Total liabilities and fund balances $ 1,395,016 $ - $ 1,657,739 $ - $ 98,640 $ 155,857 $ (46,300) $ 3,565,712 April 25, 2025 Pg. 85

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, 2021
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 $ 511,399 $ - $ 616,505 $ - $ - $ 1,184,607 $ - $ 2,314,511 Investment income 561 - 599 - (81) (2) - 1,077
Rents - - - - - - (3,991) (3,991)
Miscellaneous - - - - - - - -
Total revenues 511,960 - 619,104 - (81) 1,184,605 (3,991) 2,311,597

EXPENDITURES
Current:

General government - - - - - - 43,336 43,336
Community development - - - - 37,085 - 37,085
Parks and recreation - - - - 9,035 - - 9,035
Streets 2,498 - 447,916 - - - - 450,414
Capital outlay:

Parks and recreation - - - - - - -
Streets 1,301,652 - 65,671 - - - - 1,367,323
Total expenditures 1,304,150 - 513,587 - 9,035 37,085 43,336 1,907,193 Excess (deficiency) of revenues over
(under) expenditures

(792,190) - 105,517 - (9,116) 1,147,520 (47,327) 404,404

OTHER FINANCING SOURCES
(USES)
Transfer In -
- - - - - - -
Transfer Out - - - - - (937,974) - -
Total other financing sources (uses) - - - - - (937,974) - - Net change in fund balances (792,190) - 105,517 - (9,116)

209,546 (47,327) 404.404
Fund balances - beginning 1,219,360 - 1,534,184 - 107,756 (78,768) (1) 2,994,459 Prior period adjustments 845,142 - - - - - - 845,142
Fund balances - ending $ 1,272,312 $ - $ 1,639,701 $ - $ 98,640 $ 130,778 $ (47,327) $ 4,032,077 April 25, 2025 Pg. 86

CITY OF AVENAL
66 DRAFT

COMBINING BALANCE SHEET

NONMAJOR CAPITAL PROJECTS FUND
JUNE 30, 2021
Capital
Improvement
Project Fund
ASSETS
Cash and cashequivalents $ 9,709
Total assets $ 9,709

LIABILITIES
Accounts payable $ -
Total liabilities $ -

FUND BALANCE
Fund balance:

Committed:

Capital projects
9,709
Total fund balance
9,709
Total liabilities and fund balance $ 9,709

LIABILITIE
S
April 25, 2025 Pg. 87
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, 2021
Capital
Improvement
Project Fund

REVENUES
Intergovernmental revenue $ 0
Investment income $ 13
Total revenues 13

OTHER FINANCING SOURCES (USES)
Transfers in -
Transfers out -
Total other financing sources (uses) -
Net change in fund balance 13
Fund balance - beginning 9,696
Prior year adjustments -
Fund balance - ending $ 9,709
April 25, 2025 Pg. 88
DRAFT
OTHER INDEPENDENT AUDITOR’S REPORTS
April 25, 2025 Pg. 89
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April 25, 2025 Pg. 90
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, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated March 15, 2024.

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.

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
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
April 25, 2025 Pg. 91
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
March 15, 2024
April 25, 2025 Pg. 92
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, 2021. 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, 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
April 25, 2025 Pg. 93
DRAFT
Report on Internal Control Over Compliance
The 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
March 15, 2024
72 April 25, 2025 Pg. 94
DRAFT

CITY OF AVENAL

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
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
Avenal Community Center 14.228 16-CDBG-11133 253,612
Rental Housing Development 14.239 15-HOME-10091 36,160
Home Investment Partnership Program 14.239 15-HOME-10892 3,840 COVID Sustenance Payments 14.228 20-CDBG-CV1-00055 26,904 Total U.S. Department of Housing and Urban Development $ 320,516 U.S. DEPARTMENT OF WATER
Direct Award:

Solar Generation System at Wastewater Treatment Plant-Planning 66.458 D17-04006 39,192 Solar Generation System at Wastewater Treatment Plant-Construction 66.458 C-06-8392-110 814,094 Avenal 18” Water Transmission Line Replacement Project 66.468 D20-02007 - Avenal Water Transmission Line Planning Project 66.468 D16-02003 120,457 Total U.S. Department of Water $ 973,743
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 1,294,259
April 25, 2025 Pg. 95
DRAFT

CITY OF AVENAL

NOTE TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2021
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 purposes 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. 74 April 25, 2025 Pg. 96
DRAFT

CITY OF AVENAL

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
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
75 April 25, 2025 Pg. 97
DRAFT

CITY OF AVENAL

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
FOR THE YEAR ENDED JUNE 30, 2021
SECTION II – FINANCIAL STATEMENT FINDINGS
Finding 2021-1 Bank Reconciliation - Repeated in Current Year None reported.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS None reported.
76 April 25, 2025 Pg. 98
DRAFT

CITY OF AVENAL

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED JUNE 30. 2021

FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS
Finding 2020-1 Bank Reconciliation
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, 2021, 2020, 2019 and 2018.

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.

April 25, 2025 Pg. 99
April 11, 2024
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 the audit of FY 2021-2022, 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, 2021 through June 30, 2022:

Doc
#
Request List
General 1 City Organizational Chart
2 Signed Board and Committee minutes related to City’s finance matters for FY 2021-2022 3 Approved cost allocation plan for the FY 2021-2022
4 City budget for FY 2021-2022 and any modifications (if applicable) and city budget for FY 2021-2022 (if applicable)
5 The most recent tax fillings
6 General ledger detail report of all transactions for year ended June 30, 2022 7 Trial balance for the year ended June 30, 2022
8 Spreadsheet for Schedule of Expenditures of Federal Awards FY 2021-2022 9 New Contracts signed in FY 2021-2022
10 New Grant awarded in FY 2021-2022
11 Insurance policies for FY 2021-2022
Cash &
Investment
12 All bank statements and all bank reconciliation as of June 30, 2022 13 Summary and related supporting documents for government deposits and local agency investment fund
14 All of the investment statements for the certificate of deposit during FY 2021-2022 15 All of the statement for the cash held by fiscal agent during FY 2021-2022 Receivable 16 AR schedule for period 13 of FY 2021-2022 17 Avenal Utilities Reconciliation FY 2021-2022
18 Summary and related supporting documents for loan receivables/unearned revenue 19 Avenal Annual Grant Report FY 2021-2022
Capital
Assets
20 Spreadsheet for Capital Assets FY 2021-2022
21 Fixed Assets Acquisitions List and supporting documents (purchase agreement, invoices, checks, etc.,) for FY 2021-2022
22 Fixed Assets Retired list for FY 2021-2022
23 All of the supporting documents (agreements, invoices, checks, etc.) for construction in progress 24 Depreciation schedule for FY 2021-2022
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
April 25, 2025 Pg. 100
Other
Asset
25 Spreadsheet for Inventory Water Sewer FY 2021-2022
Current
Liabilities
26 List of accounts payable as of June 30, 2021
27 Schedule for Accounts payable accrual in period 13 FY 2021-2022 28 Check Register from July 1, 2021 to June 30, 2022
29 All of the payroll registers for FY 2021-2022
30 New hire report for FY 2021-2022
31 Termination report for FY 2021-2022
32 Supporting documents (JEs, payroll register, timecards, etc.,.) of year end payroll accrual for FY 2021-2022
33 First payment period payroll register in FY 2021-2022 Long-term
Liabilities
34 All of the CalPers GASB 68 reports (both safety and misc plans) for FY 2021-2022 35 OPEB Actuarial report for FY 2021-2022
36 Exiting Capital and Operating Lease agreements (if any changes or updates) 37 CSJVRMA audit report and all other related reports for FY 2021-2022 38 Schedule of Compensated Absences for FY 2021-2022
39 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
April 25, 2025 Pg. 101
1 April 11, 2024
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, 2022.

Audit Scope and Objectives
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, 2022. 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 Avenal’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 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
April 25, 2025 Pg. 102
2 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 The objectives of our audit are to obtain reasonable assurance as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error; issue an auditor’s report that includes our opinion about whether your financial statements are fairly presented, in all material respects, in conformity with GAAP, and 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. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists.

Misstatements, including omissions, can arise from fraud or error and are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment of a reasonable user made based on the financial statements.

Auditor’s Responsibilities for the Audit of the Financial Statements We will conduct our audit in accordance with GAAS and will include tests of your accounting records and other procedures we consider necessary to enable us to express such opinions. As part of an audit in accordance with GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit.

We will evaluate the appropriateness of the accounting policies used and the reasonableness of significant accounting estimates made by management. We will also evaluate the overall presentation of the financial statements, including the disclosures, and determine whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 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 an unavoidable risk that some material misstatements may not be detected by us, even though the audit is properly planned and performed in accordance with GAAS. 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. However, we will inform the appropriate level of management of any material errors, fraudulent financial reporting, or misappropriation of assets that comes 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. 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.

We will also conclude, based on the audit evidence obtained, whether there are conditions or events considered in the aggregate, that raise substantial doubt about the government’s ability to continue as a going concern for a reasonable period of time.

Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, direct confirmation of receivables and certain assets and liabilities by correspondence with selected customers, creditors, and financial institutions. We will also request written representations from your attorneys as part of the engagement.

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 April 25, 2025 Pg. 103
3 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.

Our audit of the financial statements does not relieve you of your responsibilities.

Audit Procedures—Internal Control
We will obtain an understanding of the government and its environment, including the system of internal control, sufficient to identify and assess the risks of material misstatement of the financial statements, whether due to error or fraud, and to design and perform audit procedures responsive to those risks and obtain evidence that is sufficient and appropriate to provide a basis for our opinions. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentation, or the override of internal control. An audit is not designed to provide assurance on internal control or to identify deficiencies in internal control.

Accordingly, we will express no such opinion. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional 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 the provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our audit 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 of City of Avenal in conformity with accounting principles generally accepted in the United States of America based on information provided by you.

We will perform the services in accordance with applicable professional standards. The other services are limited to the financial statement 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.

You agree to assume all management responsibilities for the 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.

Responsibilities of Management for the Financial Statements Our audit will be conducted on the basis that you acknowledge and understand your responsibility for designing, implementing, and maintaining 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 accounting principles generally accepted in the United States of America with the oversight of those charged with governance.

Management is responsible for making drafts of financial statements, all financial records, and related information available to us and for the accuracy and completeness of that information (including information from outside of the general and subsidiary ledgers). 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 April 25, 2025 Pg. 104
4 the financial statements, such as records, documentation, identification of all related parties and all relatedparty relationships and transactions, and other matters; (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. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters.

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, grantors, regulators, or others. In addition, you are responsible for identifying and ensuring that the government complies with applicable laws and regulations.

You are responsible for the preparation of the supplementary information in conformity with accounting principles generally accepted in the United States of America (GAAP). 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.

Engagement Administration, Fees, and Other
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, 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 California State Controller’s Office or its designee. The California State Controller’s Office or its designee may intend or decide to distribute the copies or information contained therein to others, including other governmental agencies.

Ivan Sotomayor, CPA is the engagement partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it. We expect to begin our audit on approximately April 15, 2024 and our engagement ends on delivery of our audit report for the reporting year.

Our fee for services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, word processing, postage, travel, copies, telephone, confirmation service provider fees, etc.) except that we agree that our gross fee, including expenses, will not exceed $49,500. Our standard hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to your audit based on the following table:

April 25, 2025 Pg. 105
5 PROFESSIONAL SERVICES RATES
Direct Labor Level of Service Rate
Managing Partner Engagement planning and supervising $270 Audit Manager Review planning and reporting $150
Senior Auditors Planning, supervising, and reporting $125 Technical Reviewer Review auditing methodology $180
Staff Auditor Field work and testing $110
Administrative Support Administrative and clerical support $65 Billable Expenses
Meals and Lodging A flat fee for field work, 1 day for 3 staff members $1,500
Copies and other Adm.
expenses
A flat fee of $600
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 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.

Reporting
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 Audit Committee of City of Avenal. Circumstances may arise in which our report may differ from its expected form and content based on the results of our audit. Depending on the nature of these circumstances, it may be necessary for us to modify our opinions, add a separate section, or add an emphasis-of-matter or other-matter paragraph to our auditor’s report, or if necessary, withdraw from this engagement. 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 withdraw from this engagement.

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 attached copy and return it to us.

April 25, 2025 Pg. 106
6 Very truly yours,
Sotomayor & Associates LLP
RESPONSE:

This letter correctly sets forth the understanding of the City of Avenal.

Management signature:

Title: City Manager
Date: 04/12/2024
Governance signature:

Title: Mayor
Date: 04/12/2024
April 25, 2025 Pg. 107
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. 5.- D
TO: The Honorable Mayor and City Council
FROM: Antony V. López, City Manager
DATE: April 25, 2024
RE: Consider Entering into an M.O.U. with Avenal Rotary Club for 2024 Old Timers’ Day Festival
INFORMATION:

For over three decades, the Avenal Old Timers’ Day has been a premier event in Avenal hosted by the local Avenal Rotary Club. The festivals activities have included closing down Kings Street for the annual parade and activities at Rice Park which include: bounce houses, food vendors, raffles, contests, tournaments, and many more activities.

Old Timers’ Day staple of Avenal’s culture and a long-lasting tradition, Staff is seeking formal consent by Council to collaborate and commit resources to this event in collaboration with Avenal Rotary.

Examples of potential resources being used are: City facilities (which have a small charge to non-profits), staff time to help manage certain activities, advertising the event, and city equipment.

Staff has prepared a basic M.O.U. to be signed by both the City and Avenal Rotary Club to begin the process of more formally recognizing the collaboration between both the City and Avenal Rotary Club, and authorizing the waiving of fees for City facilities.

RECOMMENDATION:

Staff is recommending, authorizing the City Manager to sign an M.O.U. with Avenal Rotary Club regarding the collaborations for the 2024 Old Timers’ Day Festival FISCAL IMPACT:

None. This event was already budgeted by Community Activities. Small loss in revenue by waiving the rental fees for City facilities and overtime from Public Works Staff.

April 25, 2025 Pg. 108

MEMORANDUM OF UNDERSTANDING

FOR USE OF CITY FACILITIES AND STAFF TIME
OLD TIMERS’ DAY FESTIVAL 2024
This AGREEMENT is made and entered into by the City of Avenal and Avenal Rotary International Club (Rotary), to establish partnership on a yearly event – Old Timers’ Day held between May 3rd – May 5 th 2024.

WHEREAS, the Old Timers’ Day Festival will been organized and sponsored by Rotary every year and; WHEREAS, Rotary in collaboration with the City of Avenal will coordinate event providing free facilities for use, and staff time as feasibly possible;
NOW THEREFORE, City of Avenal and Rotary, enter into this agreement.

Staffing: Rotary will manage the event site during use and assist possible by assigning volunteer staff to the location.

Also, request to the City Manager or Community Activities Supervisor for staff help when need on-site during the Old Timers’ Day Festival.

Costs: All reasonable and eligible costs associated with this event and the operation of the Old Timers’ Day Festival area that include City facilities, equipment and associated systems directly related to their use in support of the event will be waived for consideration at the discretion of the City Manager.

Recordkeeping: Daily logs showing hours worked and equipment and materials used in this event will be kept by both Rotary and the City for purposes of accounting and record keeping.

Insurance: Both of the Parties to this Memorandum of Understanding agrees to indemnify and hold the other Party harmless from and against any and all loss and damage, and any and all claims, demands, suits, liabilities and payments, including cost of defense, arising in whole or in part, out of the negligent act or omission of the party, its officers, employees, agents or subcontractors, or the negligent act or omission of any person for which a party or subcontractor is held liable.

Required Insurance – A Commercial General Liability coverage form at least as broad as ISO form CG 00 01 with limits of liability of no less than $500,000 per Class I event and $1 million for Class II – V events from a California admitted insurance company with an AM Best rating of no less than an “A VII” (subject to approval of the City), with the City of Avenal listed as an Additional Insured with Endorsement(s).

However, if any losses, damages, claims, demands, suits, liabilities and payments, including cost of defense, arise out of or result from the concurrent negligence of both parties, their officers, employees, agents, subcontractors or any other person for which a party is held liable, this indemnity provision shall be valid and enforceable only to the extent of the negligence of any indemnitor's officers, employees, agents, subcontractors, or any other person for which an indemnitor is held liable.

Amendments: This agreement may be amended at any time by signature approval of the parties' signatories ortheir respective designees.

Termination of Agreement: Each Party may withdraw at any time from this MOU, except as stipulated above, by transmitting a signed statement to that effect to the other Party. This MOU and the partnership created thereby will be considered terminated thirty (30) days at the conclusion of the final event of the 2024 Old Timers’ Day Festival activities Capacity to Enter into Agreement: The persons executing this MOU on behalf of their respective entities hereby represent and warrant that they have the right, power, legal capacity, and appropriate authority to enter this MOU on behalf of the entity for which they sign.

ROTARY CLUB CITY OF AVENAL

Jimmie D. Tuttle Antony V. López, City Manager
April 25, 2025 Pg. 109
City of Avenal
919 Skyline Blvd.

Avenal, CA 93204
Phone: (559) 386-5766
AGENDA ITEM NO. 5.- E
TO: The Honorable Mayor and City Council
FROM: Humberto Bermudez, IT Manager
DATE: April 25, 2023
RE: Consider Approval of a Subrecipient Agreement with
County of Kings for a digital sign
BACKGROUND:

The proposed collaboration involves replacing an outdated digital sign with a new, large digital sign. This initiative began with KCBH agreeing to allocate funds for the purchase of the sign, an action that the Council previously approved. The location for the new sign is where an existing sign currently exists, at the corner of Kings Street and Skyline Boulevard.

Following a thorough review by the City Attorney, only minor modifications were suggested to the draft Memorandum of Understanding (MOU). KCBH has provided satisfactory assurances regarding the management of advertisements and announcements, detailing how both KCBH and the City will utilize the digital sign.

Based on the collaborative negotiations and the strategic benefits to the City, staff recommends approval of the MOU. KCBH will be permitted to use the sign for their announcements for up to 50% of the operational time.

Staff, together with KCBH, will determine the useful life of the sign, estimated between 5 to 10 years. Upon conclusion of this period, the City will assume full operational control of the sign.

Post-approval, the next steps will include:
• Official agreement by the County in May.
• Transfer of funds from KCBH to the City.
• City procurement and purchase of the digital sign (to be approved in a future meeting). • Oversight of construction and implementation by the City, who will also maintain managerial responsibility for the sign.

RECOMMENDATION:

By motion, approve the subrecipient agreement with County of Kings for a digital sign FISCAL IMPACT:

Staff is updating the quotes for the digital signs, and hopes to be able to purchase two signs – one with KCBH passthrough funds, and another using ARPA funds. Those options will be presented at a future meeting.

April 25, 2025 Pg. 110
Agreement No. _____

COUNTY OF KINGS

SUBRECIPIENT AGREEMENT
THIS SUBRECIPIENT AGREEMENT (“Agreement”) is made and entered into on __________ ____, 2024, (the “Effective Date”), by and between the County of Kings, a political subdivision of the State of California (“County”), and the City of Avenal, a California city (“City of Avenal”) (singularly a “Party,” collectively the “Parties”).

R E C I T A L S
WHEREAS, the purpose of the Funding American Rescue Plan-Substance Abuse Block Grant (ARPA-SABG), Penal Code § 1463.25 (SB920) and Health and Safety Code § 11372.7 (SB921) Fee Funding is to provide funding, in part, to the County of Kings, Behavioral Health Department, to promote mental health awareness and substance use prevention;
WHEREAS, the County has allocated ARPA-SABG, SB920 and SB921 Fee Funding for the use of Primary Prevention via Pass-Through to the City of Avenal (“PassThrough Funds”); WHEREAS, the County desires to provide Pass-Through Funds to the City of Avenal for the purchase and operation of two digital signs (“Program”), as more fully described herein and subject to the terms and conditions of this Agreement; NOW, THEREFORE, the Parties mutually agree as follows:

1. TYPE OFAWARD
The Agreement is a subaward of federal and state funds awarded by the County to the City of Avenal. County will pay the City of Avenal for allowable/eligible costs as provided for in EXHIBIT A.

2. SCOPE OF SERVICES
A. The City of Avenal will be responsible for services in a manner satisfactory to the County and consistent with any standards required as a condition of providing these funds. The City of Avenal will perform the services set forth in the Scope of Work as set forth in EXHIBIT A and incorporated herein by reference.

B. The City of Avenal shall execute the equipment acquisition under this program in compliance with the ARPA-SABG, SB90, and SB 921 Fee Program requirements. The City of Avenal hereby assures and certifies compliance with all applicable local, State, April 25, 2025 Pg. 111
2 and federal statutes, regulations, policies, guidelines, and requirements, including those relevant portions of the Federal Award Conditions, as set forth in EXHIBIT B, and incorporated herein by reference.

3. FINANCIALPROVISIONS (COMPENSATION)
A. County will disburse Pass-Through Funds to the City of Avenal. It is expressly agreed and understood that the total amount to be paid by County under this Agreement shall not exceed One Hundred Thousand Dollars ($100,000), provided that funds are available for this purpose under the funding source and the City of Avenal is in compliance with all terms and conditions of this Agreement.

B. County shall make a one-time lump sum payment to reimburse the City of Avenal following the procurement and expenditure of funds for the equipment acquisition. In accordance with Section 5 below, the City of Avenal shall keep detailed documentation of its spending of ARPA-SABG, SB920 and SB921 Fee Funds.

C. All funds are paid contingent upon the City of Avenal's continuous compliance with all applicable Uniform Administrative Requirements (see Section 5(G) below), program regulations, and the terms of thisAgreement.

D. City of Avenal understands and agrees that the availability of ARPA-SABG, SB920 and SB921 Fee funds are subject to the control of the Substance Abuse and Mental Health Service Administration (SAMHSA), or other federal and State agencies, and should the ARPA-SABG, SB920 and SB921 Fee funds be encumbered, withdrawn or otherwise made unavailable to County, whether earned by or promised to the City of Avenal, County shall not provide said funds unless and until they are made available for payment to County by SAMHSA and County receives said funds. No other funds owned or controlled by County shall be obligated under this Agreement to the Program. County agrees to notify City of Avenal upon learning that said funds are no longer available to County.

E. The City of Avenal is responsible for any additional funds expended over the amount stipulated in this Agreement and understands that it will not be reimbursed for any funds expended over the budget of this Agreement.

4. TERM
This Agreement shall commence on the Effective Date and shall continue until June 30, 2024, unless otherwise terminated sooner in accordance with its terms. Provided that compliance by City of Avenal is completed by June 30, 2024, reimbursement of PassThrough Funds may occur thereafter.

5. RECORD AND REPORTING
A. The City of Avenal shall maintain and furnish to County financial information and reports as required under the Federal Office of Management and Budget (OMB) Uniform April 25, 2025 Pg. 112
3 Guidance at 2 CFR Part 200.300 or SAMHSA requirements, and any other relevant information or reports necessary to demonstrate compliance and agreement completion, in such forms as County may reasonably prescribe, as applicable.

B. The City of Avenal shall cooperate with and as reasonably requested, assist County in the development and preparation of those portions of required reports, which pertain to the City of Avenal’s activities under this Agreement. Such reports shall be prepared according to the timeframes established by the County and shall be reviewed and revised in accordance with the directives of the County. Such reports shall be approved, signed and submitted to the County, or the appropriate authorities, by County.

C. Notwithstanding Section 3, in the event that the City of Avenal fails to deliver the required reports at the designated times, or otherwise comply with the terms of this Agreement, the Parties agree that County may terminate this Agreement in accordance with Section 6 below.

D. The City of Avenal shall maintain full, complete, and accurate fiscal and project books, records, documents, and other evidence with respect to all matters covered under this Agreement. All such records shall be prepared in accordance with generally accepted accounting procedures, shall be clearly identified, and shall be kept readily accessible.

Adequate supporting documentation shall be maintained in such detail to permit tracing transactions from the invoices to the accounting records, to the supporting documentation.

Notwithstanding any other provision in this Agreement, records shall be maintained for five (5) years after submission of the final expenditure report of the funds awarded hereunder, or for such other periods as may be specifically required by the OMB Guidance at 2 CFR Part 200.333 and the ARPA-SABG, SB920 and SB921 Fee requirements, as applicable, except in the following cases:
i.If any litigation, claim, or audit is begun before the expiration of the five (5) year period, the records must be retained until all litigation, claims, or audit finding involving the records have been resolved and final action taken. ii.When the City of Avenal is notified in writing by County to extend the retention period for a specified period.
iii.Records for real property and equipment acquired with federal funds must be retained for three years after final disposition.

E. The City of Avenal shall make available to County, the Department of General Services, the Department of Finance, the California State Auditor, or their duly authorized representatives, upon appropriate notice, such records that are pertinent to the award for audit, examination, excerpt, transcript, and copying purposes, for as long as such records are retained. This right also includes timely and reasonable access to the City of Avenal’s facility and personnel for the purpose of interview and discussion related to such documents. The City of Avenal shall, upon request, transfer certain portions of such records to the custody of the County.

April 25, 2025 Pg. 113
4 F. Monitoring, Oversight and Assessment. The City of Avenal shall comply with this Agreement and ARPA-SABG, SB920 and SB921 Fee requirements. If the County identifies any instances of the City of Avenal’s non-compliance with the terms of this Agreement, the County shall notify the City of Avenal of such deficiencies and ask for a corrective action plan. The County, in its sole discretion, may offer to provide technical assistance to the City of Avenal in order to correct or eliminate such deficiencies.

Additionally, the County shall grant the City of Avenal a reasonable time period to correct or eliminate deficiencies. Thereafter, nothing contained in this section shall limit or alter the rights which the County may have for termination of this Agreement under any other provision of this Agreement, or any other right which County may have for default or breach of contract by the City ofAvenal as described in Section 6.

G. Audit. In conformance with OMB CFR Part 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, if the City of Avenal does not expend Seven Hundred Fifty Thousand Dollars ($750,000.00) or more in total federal awards during any fiscal year that coincides with the term of this Agreement it will be exempt from federal audit requirements for the Pass-Through Funds. However, the City of Avenal understands and agrees that it must keep and maintain records for review or audit in accordance with this Section 5 and make them available for review or audit by appropriate officials of SAMHSA, the County or Government Accountability Office (GAO).

6. TERMINATION
The right to terminate this Agreement may be exercised without prejudice to any other right or remedy to which the terminating Party may be entitled at law or under this Agreement.

A.Without Cause. Either Party may terminate this Agreement without cause by giving the other Party thirty (30) calendar days written notice of its intention to terminate pursuant to this provision, specifying the date of termination. If ARPA-SABG, SB920 and SB921 Fee funds under this Agreement become unavailable, the County may terminate this Agreement effective immediately by issuing written notice thereof.

B.With Cause. County may suspend or terminate this Agreement if the City of Avenal materially breaches its duties or responsibilities hereunder. Upon determining a material breach has occurred, the County shall provide written notice to the City of Avenal of its intention to terminate this Agreement and inform the City of Avenal whether the breach is able to be cured or not.
i)Breach Subject to Cure. Unless otherwise specifically noted in the Notice of Breach, all Notices of Breach shall be deemed subject to this provision. If the County deems the breach of a nature subject to cure, the County shall allow the City of Avenal a period of at least ten (10) calendar days to cure the breach. If the breach is not remedied within the period specified in the Notice of Breach, the County may April 25, 2025 Pg. 114
5 terminate the Agreement upon further written notice specifying the date of termination.
a. In the event the nature of the breach requires more time than allowed in the Notice of Breach to cure, the City of Avenal may submit a written proposal to the County within that period, setting forth a specific plan to remedy the breach and the date certain for completion. If the County assents to the proposed plan in writing, the City of Avenal shall immediately commence curing the breach. If the City of Avenal fails to cure the breach within said period, the County may terminate this Agreement: i) immediately; ii) on the date specified in the Notice of Breach; or iii) grant the City of Avenal additional time to cure.
b. Alternatively, the County may elect to cure the breach and the City of Avenal shall bear all expenses incurred by the County in curing the breach.

C. Effects of Termination. Termination of this Agreement shall not terminate the City of Avenal’s obligation or liability to the County for damages sustained by the County because of the City of Avenal’s breach, nor the City of Avenal’s duty to indemnify, maintain and make available any records pertaining to this Agreement, cooperate with any audit, be subject to offset, or make any reports of pre-termination contract activities.

Further, upon termination of this Agreement, the City of Avenal will return any unused Pass-Through Funds to County. Upon termination, all finished or unfinished documents and reports prepared by the City of Avenal under this Agreement shall, at the option of the County, become County’s property.

D. No Waiver of Breach or Default by Forbearance. In no event will County’s act of forbearance regarding previous acts by the City of Avenal: i) constitute a breach or default of the County’s obligations under this Agreement; ii) waive County’s right to assert breach or default; nor iii) impair or prejudice any remedy available to County.

7. CONFLICT OF INTEREST
The City of Avenal warrants that its City Council, employees, officers, including the immediate families of each have no financial interest, direct or indirect, that conflicts with rendering the services under this Agreement and will not acquire any such financial interest. The City of Avenal shall maintain a written conflict of interest policy that includes provisions to ensure that no employee, director, officer, or agent shall participate in the administration of ARPA-SABG, SB920 and SB921 Fee funds if an actual, apparent or potential conflict of interest would be involved. Such a conflict would arise when, for example, the employee, director, officer, or member of the City of Avenal’s City Council uses their position for purposes that are, or give the appearance of being, motivated by the possibility of private gain for their self, or others, such as those with whom they have family, business, or personal ties. The City of Avenal has an affirmative duty to and shall disclose the name(s) of any person(s) who have an actual, potential, or apparent conflict of interest.

April 25, 2025 Pg. 115
6 8. CLOSEOUT PROCEDURES
Upon expiration of this Agreement, or earlier termination, the City of Avenal agrees to comply with the following closeout procedures:
a.City of Avenal shall submit all financial, performance and other reports as required by the terms and conditions of this Agreement. At its sole discretion, County may approve or deny extensions for the submission of required documents when requested by the City of Avenal.
b.City of Avenal shall liquidate all obligations incurred pursuant to thisAgreement. c.Notwithstanding the termination of this Agreement, the City of Avenal’s obligations to County shall not terminate until all closeout requirements are completed. Further, those provisions listed in Section 25 shall survive the termination of thisAgreement.

9. SPECIAL TERMS AND CONDITIONS
The City of Avenal affirms that it is not currently debarred by any federal, State or local entity from applying for or receiving federal, State or local grant funds. Additionally, the City of Avenal affirms that it has not been convicted of any crimes involving theft, fraud or embezzlement of federal, State or local grant funds within the last three (3) years. The City of Avenal will notify County should such debarment or conviction occur during the term of this Agreement.

10. CONFIDENTIALITY
The City of Avenal shall not use any of County’s confidential information (“Confidential Information”) for any purpose other than performing under this Agreement and shall prevent the unauthorized disclosure of Confidential Information. Upon receipt of a thirdparty’s request to disclose Confidential Information, the City of Avenal shall promptly submit said request to County.

11. INDEPENDENT CONTRACTOR
All services performed pursuant to this Agreement by the City of Avenal shall be performed as an independent contractor. Under no circumstances shall the City of Avenal, its officers, employees, or agents, look to County as its employer, or as a partner, agent, or principal. The City of Avenal shall not be entitled to any benefits accorded to the County’s employees. The City of Avenal shall be responsible for providing, at its own expense, and in its name, disability, worker's compensation, or other insurance as well as licenses or permits usual or necessary for conducting the services hereunder.

12. INDEMNIFICATION
To the furthest extent allowed by law, the City of Avenal shall indemnify, defend, and hold harmless County and each of its Board members, officers, officials, employees, agents and April 25, 2025 Pg. 116
7 volunteers from any and all loss, liabilities, damages, costs, and expenses, including attorney’s fees, arising or alleged to have arisen directly or indirectly out of the performance of this Agreement. The City of Avenal's obligations under the preceding sentence shall apply regardless of whether County or any of its officers, officials, employees, agents or volunteers are negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the active negligence or willful misconduct of County or any of its officers, officials, employees, agents or volunteers.

If the City of Avenal should contract or subcontract all or any portion of the work to be performed under this Agreement, the City of Avenal shall require each subrecipient and/or subcontractor to indemnify, hold harmless and defend the County and each of its officers, officials, employees, agents, and volunteers in accordance with the terms of the preceding paragraph. The obligations of this section shall survive termination of this Agreement.

13. INSURANCE
A.Without limiting the County’s right to obtain indemnification from the City of Avenal or any third parties, prior to the commencement of work or execution of this Agreement, the City of Avenal shall purchase and maintain the following types of insurance for the minimum limits indicated below throughout the term of this Agreement.

B.The City of Avenal shall provide an Endorsed Additional Insured page from the City of Avenal’s Insurance Carrier to the County’s Risk Manager guaranteeing such coverage to the County prior to the execution of this Agreement. The City of Avenal shall deliver proof of insurance and all endorsements in accordance with Section 16, or as otherwise agreed between the Parties. Failure to obtain, maintain, or provide proof of insurance coverage is a material breach of this Agreement and may result in the immediate suspension or termination of this Agreement for cause, in addition to any other remedies the County may have under the law.

C.To the extent possible, each insurance policy must include a waiver of the insurer’s subrogation rights against the County. Insurance is to be placed with admitted insurers rated by A.M. Best Co. A:VII or higher, or through the Central San Joaquin Valley Risk Management Authority. The City of Avenal shall cause each of the below insurance policies to be endorsed to provide the County with thirty (30) days’ prior written notice of cancellation. Exceptions to the insurance requirements within this Section must be approved in writing by the County’s Risk Manager.

D. Commercial General Liability in the amount of Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) annual aggregate covering bodily injury, personal injury and property damage.

E. Comprehensive Automobile Liability Insurance with limits for bodily injury of not less than Five Hundred Thousand Dollars ($500,000) per person, One Million Dollars ($1,000,000) per accident, and not less than One Hundred Thousand Dollars ($100,000) for property damage, or such coverage with a combined single limit of One Million April 25, 2025 Pg. 117
8 Dollars ($1,000,000).

F. Workers Compensation, if and as required according to the California Labor Code.

G. Professional Liability in the amount of One Million Dollars ($1,000,000) per occurrence or claim and Three Million Dollars ($3,000,000) annual aggregate limit covering the city of Avenal’s wrongful acts, errors, and omissions.

14. AMENDMENTS
A. This Agreement may be modified only by a written amendment signed by both Parties.

Except for the specific provision(s) of this Agreement which thereby may be amended, this Agreement shall continue in full force and effect after such amendment.

B.Notwithstanding Subsection A., County may, in its discretion, amend this Agreement to conform with federal, State or local governmental guidelines, policies and available funding amounts, or for other necessary reasons. If such amendments result in a change in the amount of funding, the scope of services, or schedule of the activities to be undertaken as part of this Agreement, such modifications will only be incorporated by written amendment signed by both the County and the City of Avenal.

15. UNFORESEEN CIRCUMSTANCES
Neither Party shall be responsible for any delay caused by natural disaster, epidemic, pandemic, war, civil disturbance, labor dispute, or other cause beyond the reasonable control of a Party, on the condition the affected Party notices the other Party in writing of the delay’s cause within ten (10) calendar days of the date the delay began. Thereafter, the Parties shall meet and confer as to whether to amend, suspend, or terminate this Agreement.

16. NOTICE
Any notice necessary to the performance of this Agreement shall be given in writing by personal delivery, fax, overnight carrier, e-mail or by prepaid first-class mail addressed as follows:

COUNTY: With A Copy To:

Lisa Lewis, PhD., Director
Kings County Behavioral Health

COUNTY OF KINGS
1400 West Lacey Blvd, Bldg#13
Hanford, CA 93230
[email protected]
April 25, 2025 Pg. 118
9 CITY: With A Copy To:

City Manager

CITY OF AVENAL
919 Skyline Boulevard
Avenal, California 93204
Moses Diaz, City Attorney

PUBLIC INTEREST LAW FIRM
A Professional Corporation
2924 West Main Street
Visalia, California 93291
559-900-3500
559-900-3555 – Fax
If notice is given by: a) personal delivery, it is effective as of the date of personal delivery; b) fax, it is effective as of the date of the fax; c) overnight carrier, it is effective as of the date of delivery; d) e-mail, it is effective as of the date it was sent, with read receipt, and provided that a hardcopy is also immediately mailed with first-class postage prepaid; e) first class mail, it is effective as of the fifth (5th) day following the date of mailing or the date of delivery reflected upon a return receipt, whichever occurs first.

17. ASSIGNMENT
The rights, obligations and responsibilities established herein shall not be assigned, subcontracted, or transferred by either Party without the express written consent of the other Party.

18. CHOICE OFLAW
The Parties executed and delivered this Agreement in Kings County, in the State of California. The laws of the State of California govern the validity, enforceability, and interpretation of this Agreement. Kings County is the appropriate venue for bringing any action in connection with this Agreement, whether in law or equity. The City of Avenal waives any rights it may possess under Code of Civil Procedure § 394 to transfer any action arising out of this Agreement to a neutral county, or alternate venue.

19. SEVERABILITY
If a court of competent jurisdiction finds any of the provisions of this Agreement unenforceable, the remaining provisions remain enforceable and the unenforceable provisions constitute an amendment to the limited extent required to permit enforcement of the Agreement as a whole.

20. SURVIVAL
The following sections of this Agreement shall survive its termination: Section 5 Records and Reporting, Section 10 Confidentiality, Section 12 Indemnification, and Section 13 Insurance.

21. NO THRID-PARTY BENEFICIARY
April 25, 2025 Pg. 119
10 Unless otherwise specifically stated in this Agreement, the County and the City of Avenal are the only Parties to this Agreement and the only Parties entitled to enforce its terms.

Nothing in this Agreement gives, is intended to give, or will be construed to gran any right or benefit to any third party(ies), directly, indirectly, or otherwise. The City of Avenal shall include this paragraph in all contracts/subcontracts.

22. ENTIRE AGREEMENT; CONTRIBUTIONS OFBOTH PARTIES
This Agreement, including its Recitals and Exhibits, are fully incorporated into and are integral parts of this Agreement. This Agreement constitutes the entire Agreement between the parties. There are no inducements, promises, terms, conditions, or obligations made or entered into by the County or the City of Avenal, other than those contained in this Agreement.

Each Party had the opportunity to review this Agreement, consult with legal counsel, and negotiate terms. The Parties waives the rule under Civil Code § 1654, that ambiguities in a contract should be construed against the drafter. Civil Code § 1654 has no application to the construction of the Agreement.

23. ELECTRONIC SIGNATURES; COUNTERPARTS
The Parties may execute this Agreement by electronic means, and in two (2) or more counterparts that together constitute one (1) Agreement.

24. AUTHORITY
Each signatory to this Agreement represents that it is authorized to enter into this Agreement and to bind the Party to which its signature represents.

REMAINDER OF PAGE INTENTIONALLY BLANK

SIGNATURES ARE ON FOLLOWING PAGE
April 25, 2025 Pg. 120
11 IN WITNESS WHEREOF, the Parties executed this Agreement the day and year first written above.

COUNTY OF KINGS CITY OF AVENAL
By: ____________________________ By:_________________________________ Doug Verboon, Chairman Alvaro Preciado, Mayor, City of Avenal Kings County Board of Supervisors
ATTEST ATTEST:

By:_________________________________ _________________________________ Catherine Venturella, Clerk of the Board Maria A. Ortiz, City Clerk

RISK MANAGEMENT APPROVED AS TO

INSURANCE
By:_________________________________
Sarah Poots, Risk Manager
APPROVED AS TO FORM APPROVAL AS TO FORM:
_________________________________
By:_________________________________ Moses Diaz, City Attorney Zachary S. Adams, Deputy County Counsel
Exhibits/Attachments:

Exhibit A: Scope of Work
Exhibit B: Federal AwardConditions
Exhibit C: Compliance Criteria SUD
Exhibit D: HIPPA
Exhibit E: Assurances and Certifications
April 25, 2025 Pg. 121
12 EXHIBIT A: Scope of Work

1. Purpose
The County of Kings, hereafter identified as the “County”, receives Substance Abuse Prevention and Treatment Block Grant (SABG) funding to ensure availability of alcohol and other drug (AOD) prevention, treatment, and recovery support services as a response to the growing need for substance use disorder (SUD) prevention and treatment services. According to the Substance Abuse and Mental Health Services Administration (SAMHSA) 2019 National Survey on Drug Use and Health, it was determined that among people aged 12 or older, 60.1 percent had used a substance in the past month.

On January 27, 2020, the Secretary of Health and Human Services determined that a public health emergency existed due to the confirmed cases of Novel Coronavirus (COVID-19). The COVID-19 pandemic has had a significant impact on people with substance use disorders. Provisional data from Centers for Disease Control and Prevention (CDC) shows that there was an 18 percent increase in death from drug overdose and a

34.8 percent increase in overdose mortality from stimulants since the onset of COVID-19.

Additionally, it was determined that the necessary recommendations to reduce the spread of COVID-19, such as social distancing, has resulted in increased reports of isolation and loneliness which can lead to increased stress, anxiety, drinking of alcohol, misuse of substances, and increases in opioid overdose mortality.

The 2020 Kings County SUD primary prevention survey indicated that Methamphetamine is the most frequently treated primary substance in the County at 42%; Cannabis is the second treated substance at almost 40%; Alcohol is the third most treated substance at about 10%; further 90% of youth in treatment have a cannabis use disorder and almost 10% of youth have an alcohol use disorder, while adults make up 70% of individuals receiving SUD Treatment in the county the highest group are adults aged 25- 35 with 44%.

This need for outreach and messaging allowed Primary Prevention Set-Aside funded expenditures to be directed at individuals who have not been determined to require treatment for a SUD rather are those who are experiencing the increased stressors brought on from the recent pandemic, especially those residing in more rural and geographically isolated areas.

SABG Primary Prevention does not include the following services: SUD treatment, recovery, relapse prevention, early intervention, secondary/tertiary prevention, mental health, primary care, or tobacco cessation. Thus, ARPA SABG primary prevention funds may NOT be used for enforcement of alcohol, tobacco, or drug laws. It may be used to provide technical assistance and education to maximize enforcement, including education through outreach and messaging.

The purchase and use of digital signage shall target those in these more rural areas, April 25, 2025 Pg. 122
13 following the Primary prevention strategy of Information Dissemination which provides awareness and knowledge of the nature and extent of alcohol, tobacco and drug use, abuse and addiction and their effects on individuals, families, and communities. It also provides knowledge and awareness of available prevention programs and services. Information dissemination is characterized by one-way communication from the source to the audience, with limited contact between the two.

2. Objective
A. The City of Avenal shall purchase digital signage that will provide access to and messaging of SUD prevention services. Digital sign use and purchase by the City of Avenal shall be targeted to provide outreach and messaging to the residents of the City of Avenal via information dissemination definition above in “purpose” that will meet at least one of the following four primary prevention goals though audio and/or visual outlets:
i. Strengthen and promote mental health wellness and
resilience by addressing underlying risks factors associated with trauma and depression;
ii. Reduce alcohol, cannabis, and/or opioid substance use by youth and young adults up to age 25 through implementation of evidence based, innovative, or community defined practices; iii. Ensure recruitment and retention of a highly skilled, welltrained, culturally responsive, dedicated prevention workforce;
iv. Utilize a “health in all policies approach”to address Social Determinants of Health (SDOH) that are disproportionately impacting certain populations and communities.

B. City of Avenal shall identify and secure a location to install equipment, and shall be responsible for the selection, procurement, and installation of the digital signs.

C. City of Avenal shall maintain and make all necessary repairs of the signs and any supporting infrastructure to include digital information for display, in a timely and appropriate manner to insure safe, visible, and working conditions of the digital signs.

D. City of Avenal is responsible for all purchasing, installation, and maintenance and repair needs to keep the signs operational such as, but not limited to, electrical requirements, installation permits, and location approvals.

E. County agrees that the City of Avenal can move the signage to any location(s) as the city and community need warrants, so long as the sign messaging remain visible and available to the public, and that the County continues to have the ability to send messages to the City of Avenal for display on the digitalsignage.

F. City of Avenal will be responsible for the initial and ongoing production and display of messaging, and the review, oversight of, and approval of messaging April 25, 2025 Pg. 123
14 content, imagery, and appropriateness.

3. Milestones
A. The City of Avenal shall develop a plan of action that will meet the abovementioned objectives and identify placement location(s) of the signage, notifying, in writing, the Kings County Behavioral Health Director or designee of its action plan and location decision by March 31, 2024.

B. City of Avenal shall have at a minimum three competitive bids or proposals for procuring equipment by March 31, 2024, and proceed with purchasing with best offer. Sole-source and other usual exemptions shall be available, if applicable.

C. City of Avenal must procure and have in its possession all equipment, and invoice County by June 30, 2024.

4. Deliverables
A. Digital sign messages should be delivered in the County’s threshold languages of English and Spanish and adhere to cultural competency standards and general compliance terms found within EXHIBIT C of this agreement.

B. Messages should be displayed daily, 24-hours a day, 7 days a week unless other arrangements are needed such as black-out period for light pollution per the city or community need for which the City of Avenal shall notify the Kings County Behavioral Health Director or designee of arrangement and necessity.

C. The City of Avenal will report the following data and information monthly to Kings County Behavioral Health Substance Use Disorder System of Care via [email protected] limited to the life of the digital sign. The Kings County Behavioral Health Director or designee may add to or alter data and information required from the City of Avenal for collection and reporting, as needed, beyond that listed below. i. The messages displayed for the month;
ii. The targeted audience intended for each message (e.g. age groups, students, families, etc.);
iii.Primary prevention goal addressed by each of the messages; and iv. The number of message displays for the month.

D. Monthly data report is due on the 5th of each month, following the closing month.

E. The City of Avenal will notify in writing to the Kings County Behavioral Health Director or designee and the Substance Use Disorder System of Care email noted above when the end of life for the equipment occurs for disposal instructions.

5. Outcomes
A. City of Avenal shall display minimum of five (5) substance use disorder April 25, 2025 Pg. 124
15 prevention messages, generated by or reviewed and approved by Kings County Behavioral Health, per year for the non-fully depreciated life of the digital sign for universal information dissemination that will prevent the use and misuse of substances and the development of substance use disorders, in alignment with at least one of the four previously listed primary prevention goals;
B. Purchase, install, and operationalize, within the city limits of the City of Avenal, at least one (1) digital sign to be made visible to the public for displaying SUD prevention messages and other messaging to support and promote community wellbeing and resilience;
C. 25% of messages shall target youth ages 7-17 years of age; D. 25% of messages shall target parents;
E. 50% of messages shall target adults ages 18+;
ARPA SABG Funds used to procure equipment will be subject to all applicable requirements that govern federal monies associated with SABG set forth in United States Code (USC) Title 42 Part B, and the Uniform Guidance 2 Code of Federal Regulations (CFR) Part 200, as codified by the U.S Department of Health and Human Services in 45 CFR Part 75. The City of Avenal agrees to the terms and conditions of this in its fulfillment of the scope.

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16 EXHIBIT B: Federal Award Conditions
Reporting and Fiscal Requirements for ARPA-SABG Funds
The City of Avenal receiving ARPA-SABG funding is obligated to adhere to the fiscal requirements outlined in the Financial Provisions (COMPENSATION) section in the contract.

1.Payments:

The City of Avenal shall receive payment for services in accordance with terms detailed in Section 3 of Compensation.

2.Audits:

The City of Avenal shall comply with County, State or Federal Fiscal or Quality Assurance Audits and repayment requirements based on audit findings. The City of Avenal and MHP shall each be responsible for any audit exceptions or disallowances on their part.

MHP shall not withhold payment from the City of Avenal for exceptions or disallowances for which the MHP is financially responsible, consistent with Welfare and Institutions Code § 5778(b)(4).
•The City of Avenal will be subject to completing a pre-award risk assessment. •In accordance with the Substance Abuse Prevention & Treatment Block Grant (SABG) agreement with the Department of Health Care Services (DHCS) the County of Kings Substance Use Disorder-System of Care (SUD-SOC) is responsible for ensuring subcontracted programs and services funded through SABG are monitored for programmatic and fiscal requirements to ensure appropriate quality standards, compliance with block grant laws, regulations, and other program specifications identified in the State-County SABG agreement.

3.Records to be Maintained:

The City of Avenal shall keep and maintain accurate records of all costs incurred and all time expended for work under this contract. All such records kept by the City of Avenal shall be made available to County or its authorized representative, or officials of the County, State or Federal agencies for review or audit during normal business hours. All supporting records shall be maintained for ten (10) years or until all Audits and Appeals are completed, whichever is later.
•Costs and/or expenses deemed unallowable shall not be reimbursed or, if mistakenly reimbursed, those costs and/or expenses shall be subject to recovery by the County pursuant to California Health and Safety Code (HSC) § 11817.8(e).

April 25, 2025 Pg. 126
17 EXHIBIT C

COMPLIANCE CRITERIA
SECTION 1. SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK

GRANT (SABG) AND DEPARTMENT OF HEALTH CARE SERVICES DRUG

MEDI-CAL (DMC) CONTRACT REQUIREMENTS

GENERAL

1.Additional Contract Restrictions
This Agreement (“Contract”) is subject to any additional restrictions, limitations, or conditions enacted by the Congress, or any statute enacted by the Congress, which may affect the provisions, terms, or funding of this Contract in any manner.

2.Hatch Act
The City of Avenal agrees to comply with the provisions of the Hatch Act (USC, Title 5, Part III, Subpart F., Chapter 73, Subchapter III), which limit the political activities of employees whose principal employment activities are funded in whole or in part with federal funds.

3.No Unlawful Use or Unlawful Use Messages Regarding Drugs The City of Avenal agrees that information produced through these funds, and which pertains to drugs and alcohol-related programs, shall contain a clearly written statement that there shall be no unlawful use of drugs or alcohol associated with the program.

Additionally, no aspect of a drug or alcohol-related program shall include any message on the responsible use, if the use is unlawful, of drugs or alcohol (HSC, Division 10.7, Chapter 1429, §§ 11999-11999.3). By signing this Enclosure, Contractor agrees that it will enforce, and will require its subcontractors to enforce, these requirements.

4.Limitation on Use of Funds for Promotion of Legalization of Controlled Substances.

None of the funds made available through this Contract may be used for any activity that promotes the legalization of any drug or other substance included in Schedule I of Section 202 of the Controlled Substances Act (21 USC 812).

5.Debarment and Suspension.

The City of Avenal shall not subcontract with or employ any party listed on the government wide exclusions in the System for Award Management (SAM), in accordance April 25, 2025 Pg. 127
18 with the OMB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp. p. 189) and 12689 (3 CFR part 1989., p. 235), “Debarment and Suspension.” SAM exclusions contain the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549.

The City of Avenal shall advise all subcontractors of their obligation to comply with applicable federal debarment and suspension regulations, in addition to the requirements set forth in 42 CFR Part 1001.

If the City of Avenal subcontracts or employs an excluded party, DHCS has the right to withhold payments, disallow costs, or issue a CAP, as appropriate, pursuant to HSC Code § 11817.8(h).

6.Restriction on Distribution of Sterile Needles.

No SABG funds made available through this Contract shall be used to carry out any program that includes the distribution of sterile needles or syringes for the hypodermic injection of any illegal drug unless DHCS chooses to implement a demonstration syringe services program for injecting drug users.

7.Health Insurance Portability and Accountability Act (HIPAA) of 1996 All work performed under this Contract is subject to HIPAA, the City of Avenal shall perform the work in compliance with all applicable provisions of HIPAA. As identified in EXHIBIT D, DHCS and Contractor shall cooperate to assure mutual agreement as to those transactions between them to which this provision applies.

Refer to EXHIBIT D for additional information.

A.Trading Partner Requirements

1. No Changes. The City of Avenal hereby agrees that for the personal health information (Information), it will not change any definition, data condition or use of a data element or segment as proscribed in the Federal Health and Human Services (HHS) Transaction Standard Regulation (45 CFR 162.915 (a)).

2. No Additions. The City of Avenal hereby agrees that for the Information, it will not add any data elements or segments to the maximum data set as proscribed in the HHS Transaction Standard Regulation (45 CFR 162.915 (b)).

3. No Unauthorized Uses. The City of Avenal hereby agrees that for the Information, it will not use any code or data elements that either are marked “not used” in the HHS Transaction’s Implementation specification or are not in the HHS Transaction Standard’s implementation specifications (45 CFR 162.915 (c)).

April 25, 2025 Pg. 128
19 4. No Changes to Meaning or Intent. The City of Avenal hereby agrees that for the Information, it will not change the meaning or intent of any of the HHS Transaction Standard’s implementation specification (45 CFR 162.915 (d)).

B.Concurrence for Test Modifications to HHS Transaction Standards The City of Avenal agrees and understands that there exists the possibility that DHCS or others may request an extension from the uses of a standard in the HHS Transaction Standards. If this occurs, the City of Avenal agrees that it will participate in such test modifications.

C.Adequate Testing
The City of Avenal is responsible for adequately test all business rules appropriate to their types and specialties. If the City of Avenal is acting as a clearinghouse for enrolled providers, City of Avenal has obligations to adequately test all business rules appropriate to each and every provider type and specialty for which they provide clearinghouse services.

D.Deficiencies
The City of Avenal agrees to correct transactions, errors, or deficiencies identified by DHCS, and transactions errors or deficiencies identified by an enrolled provider if the City of Avenal is acting as a clearinghouse for that provider. When the City of Avenal is a clearinghouse, City of Avenal agrees to properly communicate deficiencies and other pertinent information regarding electronic transactions to enrolled providers for which they provide clearinghouse services.

E.Code Set Retention
Both Parties understand and agree to keep open code sets being processed or used in this Contract for at least the current billing period or any appeal period, whichever is longer.

F.Data Transmission Log
Both parties shall establish and maintain a Data Transmission Log which shall record any and all Data Transmissions taking place between the Parties during the term of this Contract. Each Party will take necessary and reasonable steps to ensure that such Data Transmission Logs constitute a current, accurate, complete, and unaltered record of any and all Data Transmissions between the Parties and shall be retained by each Party for no less than twenty-four (24) months following the date of the Data Transmission. The Data Transmission Log may be maintained on computer media or other suitable means April 25, 2025 Pg. 129
20 provided that, if it is necessary to do so, the information contained in the Data Transmission Log may be retrieved in a timely manner and presented in readable form.

8.Nondiscrimination and Institutional Safeguards for Religious Providers The City of Avenal shall establish such processes and procedures as necessary to comply with the provisions of USC, Title 42, Section 300x-65 and CFR, Title 42, Part 54.

9.Counselor Certification
Any counselor or registrant providing intake, assessment of need for services, treatment or recovery planning, individual or group counseling to participants, patients, or residents in a DHCS licensed or certified program is required to be registered or certified as defined in CCR, Title 9, Division 4, Chapter 8. (Document 3H).

10.Cultural and Linguistic Proficiency
To ensure equal access to quality care by diverse populations, each service provider receiving funds from this Contract shall adopt the Federal Office of Minority Health Culturally and Linguistically Appropriate Service (CLAS) national standards as outlined online at: https://thinkculturalhealth.hhs.gov/clas

11.Intravenous Drug Use (IVDU) Treatment
The City of Avenal shall ensure that individuals in need of IVDU treatment shall be encouraged to undergo AOD treatment (42 USC 300x-23 (45 CFR 96.126(e)).

A. Routinely make available TB services to individuals receiving treatment.

B. Reduce barriers to patients’ accepting TB treatment.

C. Develop strategies to improve follow-up monitoring, particularly after patients leave treatment, by disseminating information through educational bulletins and technical assistance.

12.Tuberculosis Treatment
A. Routinely make available TB services to individuals receiving treatment.

B. Reduce barriers to patients’ accepting TB treatment.

C. Develop strategies to improve follow-up monitoring, particularly after patients leave treatment, by disseminating information through educational bulletins and technical assistance.

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21 13.Trafficking Victims Protection Act of 2000
The City of Avenal and its subcontractors that provide services covered by this Contract shall comply with the Trafficking Victims Protection Act of 2000 (USC, Title 22, Chapter 78, Section 7104) as amended by section 1702 of Pub. L. 112-239.

14.Tribal Communities and Organizations
The City of Avenal shall regularly review population information available through Census, compare to information obtained in the California Outcome Measurement System for Treatment (CalOMS-Tx) to determine whether the population is being reached, and survey Tribal representatives for insight in potential barriers to the substance use service needs of the American Indian/Alaskan Native (AI/AN) population within the City of Avenal’s geographic area. The City of Avenal shall also engage in regular and meaningful consultation and collaboration with elected officials of the tribe, Rancheria, or their designee for the purpose of identifying issues/barriers to service delivery and improvement of the quality, effectiveness, and accessibility of services available to AI/AN communities within the City of Avenal.

15.Marijuana Restriction
Grant funds may not be used, directly or indirectly, to purchase, prescribe, or provide marijuana or treatment using marijuana. Treatment in this context includes the treatment of opioid use disorder. Grant funds also cannot be provided to any individual who or organization that provides or permits marijuana use for the purposes of treating substance use or mental disorders. See, e.g., 45 CFR. § 75.300(a) (requiring HHS to “ensure that Federal funding is expended . . . in full accordance with U.S. statutory . . . requirements.”); 21 USC § 812(c) (10) and 841 (prohibiting the possession, manufacture, sale, purchase, or distribution of marijuana). This prohibition does not apply to those providing such treatment in the context of clinical research permitted by the DEA and under an FDA-approved investigational new drug application where the article being evaluated is marijuana or a constituent thereof that is otherwise a banned controlled substance under Federal law.

16.Participation of County Behavioral Health Director’s Association of California The County AOD Program Administrator shall participate and represent the City of Avenal in meetings of the Contractor Behavioral Health Director’s Association of California for the purposes of representing the County in their relationship with DHCS with respect to policies, standards, and administration for AOD abuse services.

The County AOD Program Administrator shall attend any special meetings called by the Director of DHCS. Participation and representation shall also be provided by the April 25, 2025 Pg. 131
22 Contractor Behavioral Health Director’s Association of California.

17.Adolescent Best Practices Guidelines
The City of Avenal must utilize DHCS guidelines in developing and implementing youth treatment programs funded under this Enclosure. The Adolescent Best Practices Guidelines can be found at:
https://www.dhcs.ca.gov/Documents/CSD_CMHCS/Adol%20Best%20Practices%20 Guide/AdolBestPracGuideOCTOBER2020.pdf

18.Adolescent Substance Use Disorder Best Practices Guidelines The City of Avenal will follow the guidelines in Document 1V, “Adolescent Substance Use Disorder Best Practice Guidelines,” in developing and implementing youth treatment programs funded under this EXHIBIT. No formal amendment of this Contract is required for new guidelines to be incorporated into this Contract.

19.Perinatal Practice Guidelines
The City of Avenal will follow the guidelines in Document 1G, “Perinatal Practice Guidelines,” in developing and implementing perinatal treatment and recovery programs funded under this EXHIBIT, until new Perinatal Practice Guidelines are established and adopted. No formal amendment of this Contract is required for new guidelines to be incorporated into this Contract.

20.Byrd Anti-Lobbying Amendment (31 USC § 1352)
The City of Avenal certifies that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 USC § 1352. The City of Avenal shall also disclose to DHCS any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award.

21.Nondiscrimination in Employment and Services
By signing this Contract, the City of Avenal certifies that under the laws of the United States and the State of California, incorporated into this Contract by reference and made a part hereof as if set forth in full, the City of Avenal will not unlawfully discriminate against any person.

22.Federal Law Requirements:

April 25, 2025 Pg. 132
23 A.Title VI of the Civil Rights Act of 1964, § 2000d, as amended, prohibiting discrimination based on race, color, or national origin in federally funded programs.

B.Title VIII of the Civil Rights Act of 1968 (42 USC §§ 3601 et seq.) prohibiting discrimination on the basis of race, color, religion, sex, handicap, familial status or national origin in the sale or rental of housing.

C.Age Discrimination Act of 1975 (45 CFR Part 90), as amended 42 USC §§ 6101 – 6107), which prohibits discrimination on the basis of age.

D.Age Discrimination in Employment Act (29 CFR Part 1625).

E.Title I of the Americans with Disabilities Act (29 CFR Part 1630) prohibiting discrimination against the disabled in employment.

F.Title II of the Americans with Disabilities Act (28 CFR Part 35) prohibiting discrimination against the disabled by public entities.

G.Title III of the Americans with Disabilities Act (28 CFR Part 36) regarding access.

H.Section 504 of the Rehabilitation Act of 1973, as amended (29 USC § 794), prohibiting discrimination on the basis of individuals with disabilities.

I.Executive Order 11246 (42 USC §§ 2000(e) et seq. and 41 CFR Part 60) regarding nondiscrimination in employment under federal contracts and construction contracts greater than $10,000 funded by federal financial assistance.

J.Executive Order 13166 (67 FR 41455) to improve access to federal services for those with limited English proficiency.

K.The Drug Abuse Office and Treatment Act of 1972, as amended, relating to nondiscrimination on the basis of drug abuse.

L.Confidentiality of Alcohol and Drug Abuse Patient Records (42 CFR Part 2, Subparts A – E).

23.State Law Requirements:

A.Fair Employment and Housing Act (Government Code §§ 12900 et seq.) and the applicable regulations promulgated thereunder (2 CCR 7285.0 et seq.).

B. Title 2, Division 3, Article 9.5 of the Government Code, commencing with Section 11135.

April 25, 2025 Pg. 133
24 C. Title 9, Division 4, Chapter 8 of the CCR, commencing with Section 13000.

D. No State, federal, or County Realignment funds shall be used by the City of Avenal or its subcontractors for sectarian worship, instruction, or proselytization. No federal or State funds shall be used by the City of Avenal or its subcontractors to provide direct, immediate, or substantial support to any religious activity.

E.Noncompliance with the requirements of nondiscrimination in services shall constitute grounds for DHCS to withhold payments under this Contract or terminate all, or any type, of funding provided hereunder.

F.Welfare & Institution Code §§ 14184.402, 14184.403 and 14059.5.

24.Information Access for Individuals with Limited English Proficiency A.The City of Avenal shall comply with all applicable provisions of the Dymally-Alatorre Bilingual Services Act (Government Code §§ 7290-7299.8) regarding access to materials that explain services available to the public as well as providing language interpretation services.

B.The City of Avenal shall comply with the applicable provisions of Section 1557 of the Affordable Care Act (45 CFR Part 92), including, but not limited to, 45 CFR 92.201, when providing access to:
a.Materials explaining services available to the public, b.Language assistance,
c.Language interpreter and translation services, or
d.Video remote language interpreting services.

25.Noncompliance with Reporting Requirements
The City of Avenal agrees that DHCS has the right to withhold payments until the City of Avenal has submitted any required data and reports to DHCS, as identified in EXHIBIT A, Attachment I, Part III – Reporting Requirements, or as identified in Document 1F(a), Reporting Requirements Matrix for Counties.

26.Additional Contract Restrictions
Noncompliance with the requirements of nondiscrimination in services shall constitute grounds for DHCS to withhold payments under this Contract or terminate all, or any type, of funding provided hereunder.

This Contract is subject to any additional restrictions, limitations, or conditions enacted by the federal or State governments that affect the provisions, terms, or funding of this April 25, 2025 Pg. 134
25 Contract in any manner.

27.Language and Formatting laws and regulations, Nondiscrimination Requirements, and Information Access for Individuals with Limited English Proficiency and/or Disabilities The City of Avenal shall comply with all applicable State and federal requirements regarding nondiscrimination, language assistance, information access related to MediCal beneficiaries including but not to Dymally-Alatorre Bilingual Services Act, Section 1557 of the Patient Protection and Affordable Care Act, the Americans with Disabilities Act, WIC Section 14029.91 and Gov. Code 11135, Title 42 Code of Federal Regulations parts 438.10(a), 438.10(d), 438.408(d), 438.408(e), 438.404(a); Title VI of the Civil Rights Act of 1964 and Section 504 of the Rehabilitation Act of 1973; BHIN 18-010E; BHIN 22- 070.

28.Other services approved by a State Plan amendment or waiver authorizing federal financial participation.

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26 EXHIBIT C (cont.)
SECTION 2. ADDITIONAL DEPARTMENT OF HEALTH CARE SERVICES CONTRACT

REQUIREMENTS FOR (SABG) AND DRUG MEDI-CAL (DMC)
The City of Avenal must be compliant with the following SABG and DMC laws, regulations, and guidelines in addition to all Behavioral Health Bulletins, Information Notices, and Letters received by DHCS that notify the County and contractors of changes in policies or procedures at the Federal or State levels found at:
https://www.dhcs.ca.gov/formsandpubs/Pages/Behavioral_Health_Information_Notice.aspx Additionally, must also be compliant with documents that may be incorporated by reference into this Contract. Aforementioned documents may not be physically attached to the Contract, but can be found at DHCS’ website:
https://www.dhcs.ca.gov/provgovpart/Pages/DMC-Contracts.aspx

1. Exhibit C - General Terms and Conditions

2. Exhibit E - Privacy and Information Security Provisions

3. Enclosure 2 - Program Specifications

4. Enclosure 3 - Budget Detail and Payment Provisions

5. Enclosure 5 - Special Terms and Conditions

6. Enclosure 5, Attachment I – Certification Regarding Lobbying

7. Enclosure 5, Attachment II – Certification Regarding Lobbying

8. Document 1A: Title 45, Code of Federal Regulations (CFR) 96, Subparts C and L, Substance Abuse Prevention and Treatment Block Grant Requirements

9. Document 1B: Title 42, CFR Charitable Choice Regulations

10. Document 1C: Driving-Under-the-Influence Program Requirements

11. Document 1F(a): County Reporting Requirement Matrix

12. Document 1G: Perinatal Practice Guidelines FY 2018-19 (and/or latest version)

13. Document 1K: Drug and Alcohol Treatment Access Report & Drug and Alcohol Treatment Access Report (DATAR) User Manual

14. Document 1P: Alcohol and/or Other Drug Program Certification Standards

15. Document 1V: Adolescent Substance Use Disorder Best Practices Guide

16. Document 2A: Sobky v. Smoley, Judgment, Signed February 1,1995

17. Document 2C: Title 22, California Code ofRegulations

18. Document 2F(a):Minimum Quality Drug Treatment Standards for DMC

19. Document 2F(b): Minimum Quality Drug Treatment Standards for SABG

20. Document 2P: County Certification - Cost Report Year-End Claim for Reimbursement April 25, 2025 Pg. 136
27 21. Document 2G: Drug Medi-Cal BillingManual

22. Document 2K:Multiple Billing Override Certification (MC 6700) Document 2L(a):

Good Cause Certification (6065A)

23. Document 2L(b):Good Cause Certification (6065B)

24. Document 2P: County Certification - Cost Report Year-End Claim for Reimbursement Document 2P(a): Drug Medi-Cal Provider Cost Report Excel Workbook

25. Document 3G: California Code of Regulations (CCR) Title 9, Division 4, Chapter 4:

Narcotic Treatment Programs

26. Document 3H: CCR Title 9, Division 4, Chapter 8: Certification of Alcohol and Other Drug Counselors

27. Document 3J: CalOMS Treatment Data Collection Guide

28. Document 3S: CalOMS Treatment Data Compliance Standards

29. Document 3T: Non-Drug Medi-Cal and Drug Medi-Cal Local Assistance Funding Matrix

30. Document 3V: Culturally and Linguistically Appropriate Services(CLAS) National Standards

31. Document 4A:Drug Medi-Cal Claim Submission Certification – County Contracted Provider – DHCS Form MC 100186 with Instructions

32. Document 4B:Drug Medi-Cal Claim Submission Certification – County Operated Provider – DHCS Form MC 100187 with Instructions

33. Document 4D:Drug Medi-Cal Certification for Federal Reimbursement (DHCS 100224A)

34. Document 4E: Treatment Standards for Substance Use Diagnosis: A Guide for Services (Spring 2010)

35. Document 4F: Drug Medi-Cal (DMC) Services Quarterly Claim for Reimbursement of County Administrative Expenses (Form #MC 5312)

36. Document 5A: Confidentiality Agreement
April 25, 2025 Pg. 137
28 EXHIBIT C (cont.)
A signature below is an assurance that all requirements listed above have been met.

AUTHORIZED SIGNATURE
(This document must be signed by the person who is authorized to sign the Grant Agreement.)

NAME OF AUTHORIZED OFFICER TITLE TELEPHONE

STREET ADDRESS CITY STATE ZIP CODE

EMAIL ADDRESS
SIGNATURE (This document must be signed by the person who is authorized to sign the Grant Agreement.

The authorized signatory may sign with a digital signature OR a wet blue ink signature.) DATE
X
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29 EXHIBIT D
County of Kings
HIPPA Business Associate Agreement
I. Recitals.

A. This Agreement has been determined to constitute a business associate relationship under the Health Insurance Portability and Accountability Act ("HIPAA") and its implementing privacy and security regulations at 45 CFR Parts 160 and 164 (the "Health Insurance Portability Act regulations").

B. The County of Kings ("County") wishes to, or may, disclose to City of Avenal ("Business Associate") certain information pursuant to the terms of this Agreement, some of which may constitute Protected Health Information ("PHI") pursuant to HIPAA regulations.

C. "Protected Health Information" or "PHI" means any information, whether oral or recorded in any form or medium that relates to the past, present, or future physical or mental condition of an individual, the provision of health or dental care to an individual, or the past, present, or future payment for the provision of health or dental care to an individual; and that identifies the individual or with respect to which there is a reasonable basis to believe the information can be used to identify the individual. PHI shall have the meaning given to such term under HIPAA and HIPAA regulations, as the same may be amended from time to time.

D. "Security Incident" means the attempted or successful unauthorized access, use, disclosure, modification, or destruction of PHI, or confidential data that is essential to the ongoing operation of the Business Associate's organization and intended for internal use; or interference with system operations in an information system.

E. As set forth in this Agreement, City of Avenal as the Business Associate of County provides services, arranges, performs, or assists in the performance of functions or activities on behalf of County and creates, receives, maintains, transmits, uses or discloses PHI.

F. County and Business Associate desire to protect the privacy and provide for the security of PHI created, received, maintained, transmitted, used, or disclosed pursuant to this Agreement, in compliance with HIPAA and HIPAAregulations.

G. The purpose of this EXHIBIT is to satisfy certain standards and requirements of HIPAA and the HIPAA regulations, and other applicablelaws.

H. The terms used in this EXHIBIT, but not otherwise defined, shall have the same April 25, 2025 Pg. 139
30 meaning as those terms are defined in the HIPAAregulations.

In exchanging information pursuant to this Agreement, the parties agree as follows:

II. Permitted Uses and Disclosures of PHI by BusinessAssociate.

A. Permitted Uses and Disclosures. Except as otherwise indicated in this EXHIBIT, Business Associate may use or disclose PHI only to perform functions, activities or services specified in this Agreement, for, or on behalf of County, provided that such use or disclosure would not violate the HIPAA regulations, if done byCounty.

B. Specific Use and Disclosure Provisions. Except as otherwise indicated in this EXHIBIT, Business Associate may:
1) Use and Disclose for Management and Administration. Use and disclose PHI for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate, provided that disclosures are required by law, or the Business Associate obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and will be used or further disclosed only as required by law or for the purpose for which it was disclosed to the person, and the person notifies the Business Associate of any instances of which it is aware that the confidentiality of the information has been breached. 2) Type of Services to be Provided by the Business Associate. BAA will promote mental health awareness and substance use prevention. Said services are set forth in the Scope of Work, attached to the Agreement as EXHIBIT A.

III. Responsibilities of Business Associate
Business Associate agrees:

A. Nondisclosure. Not to use or disclose Protected Health Information (PHI) other than as permitted or required by this Agreement or as required by law.

B. Safeguards. To implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the PHI, including electronic PHI, that it creates, receives, maintains, uses, or transmits on behalf of County; and to prevent use or disclosure of PHI other than as provided for by this Agreement. Business Associate shall develop and maintain a written information privacy and security program that includes administrative, technical, and physical safeguards appropriate to the size and complexity of the Business Associate's operations and the nature and scope of its activities, and which incorporates the requirements of section C, Security, below. Business Associate will provide County with its current and updated policies.

C. Security. The Business Associate shall take any and all steps necessary to ensure April 25, 2025 Pg. 140
31 the continuous security of all computerized data systems containing County PHI. These steps shall include, at a minimum:
1) Complying with all of the data system security precautions listed in the Business Associate Data Security Standards set forth in Attachment 1 to this EXHIBIT; 2) Security Officer. If the incident occurs after business hours or on a weekend or holiday and involves electronic PHI, notification shall be provided by calling the County ITSD Help Desk. Business Associate shall take:
i. Prompt corrective action to mitigate any risks or damages involved with the breach and to protect the operating environment and
ii.Any action pertaining to such unauthorized disclosure required by applicable Federal and State laws and regulations.
3) Investigation of Breach. To immediately investigate such security incident, breach, or unauthorized use or disclosure of PHI or confidential data. Within seventy-two (72) hours of the discovery, to notify the County:
i. What data elements were involved, and the extent of the data involved in the breach,
ii. A description of the unauthorized persons known or reasonably believed to have improperly used or disclosed PHI or confidential data,
iii. A description of where the PHI or confidential data is believed to have been improperly transmitted, sent, or utilized,
iv. A description of the probable causes of the improper use or disclosure; and v. Whether Civil Code §§ 1798.29 or 1798.82 or any other federal or state laws requiring individual notifications of breaches are triggered 4) Written Report. To provide a written report of the investigation to the County under HIPAA within ten (10) working days of the discovery of the breach or unauthorized use or disclosure. The report shall include, but not be limited to, the information specified above, as well as a full, detailed corrective action plan, including information on measures that were taken to halt and/or contain the improper use or disclosure. 5) Notification of Individuals. To notify individuals of the breach or unauthorized use or disclosure when notification is required under state or federal law and to pay any costs of such notifications, as well as any costs associated with the breach. The County shall approve the time, manner, and content of any such notifications. 6) County Contact Information. To direct communications to the above referenced County staff, Business Associate shall initiate contact as indicated herein. County reserves the right to make changes to the contact information below by giving written notice to the Business Associate. Said changes shall not require an amendment to this Exhibit or the April 25, 2025 Pg. 141
32 Agreement to which it isincorporated.

County of Kings Administration
Attn: - HIPAA Compliance officer 1400 W. Lacey Blvd., Bldg. 1 Hanford, California 93230
(559) 852-2377
D. Employee Training and Discipline. To train and use reasonable measures to ensure compliance with the requirements of this EXHIBIT by employees who assist in the performance of functions or activities on behalf of County under this Agreement and use or disclose PHI; and discipline such employees who intentionally violate any provisions of this EXHIBIT, including by termination of employment. In complying with the provisions of this Section D, Business Associate shall observe the following requirements:
1) Business Associate shall provide information privacy and security training, at least annually, at its own expense, to all its employees who assist in the performance of functions or activities on behalf of County under this Agreement and use or disclose PHI. 2) Business Associate shall require each employee who receives information privacy and security training to sign a certification, indicating the employee's name and the date on which the training was completed.
3) Business Associate shall retain each employee's written certifications for County inspection for a period of six (6) years following contract termination.

IV. Obligation of County
County agrees to:

A. Notice of Privacy Practices. Provide Business Associate with applicable and relevant Notice(s) of Privacy Practices that County HIPAA-covered healthcare components produce in accordance with 45 CFR 164.520, as well as any changes to suchnotice(s).

B. Permission by Individuals for Use and Disclosure of PHI. Provide the Business Associate with any changes in, or revocation of, permission by an Individual to use or disclose PHI, if such changes affect the Business Associate's permitted or required uses and disclosures.

C. Notification of Restrictions. Notify the BusinessAssociate of any restriction to the use or disclosure of PHI that County has agreed to in accordance with 45 CFR 164.522, to the extent that such restriction may affect the Business Associate's use or disclosure of PHI.

D. Requests Conflicting with HIPAA Rules. Not request the Business Associate to use or disclose PHI in any manner that would not be permissible under the HIPAA regulations if done byCounty.

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33 V. Audits, Inspection and Enforcement
From time to time, County may inspect the facilities, systems, books, and records of Business Associate to monitor compliance with this Agreement and this Exhibit. Business Associate shall promptly remedy any violation of any provision of this Exhibit and shall certify the same to the County Privacy Officer or the County Chief Information Security Officer in writing. The fact that County inspects, or fails to inspect, or has the right to inspect, Business Associate's facilities, systems and procedures does not relieve Business Associate of its responsibility to comply with this EXHIBIT, nor does County's:

A. Failure to detect; or
B. Detection, but failure to notify Business Associate or require Business Associate's remediation of any unsatisfactory practices constitute acceptance of such practice or a waiver of County's enforcement rights under this Agreement and this EXHIBIT C.

VI. Termination
A. Termination for Cause. Upon County's knowledge of a material breach of this Exhibit by Business Associate, County shall:
1) Provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement if Business Associate does not cure the breach or end the violation within the time specified by County;
2) Immediately terminate this Agreement if Business Associate has breached a material term of this EXHIBIT and cure is not possible; or 3) If neither cure nor termination is feasible, report the violation to the Secretary of the U.S. Department of Health and Human Services.

B. Judicial or Administrative Proceedings. Business Associate will notify County if it is named as a defendant in a criminal proceeding for a violation of HIPAA. County may terminate this Agreement if Business Associate is found guilty of a criminal violation of HIPAA. County may terminate this Agreement if a finding or stipulation that the Business Associate has violated any standard or requirement of HIPAA, or other security or privacy laws is made in any administrative or civil proceeding in which the Business Associate is a party or has been joined.

C. Effect of Termination. Upon termination or expiration of this Agreement for any reason, Business Associate shall promptly return or destroy all PHI received from County (or created or received by Business Associate on behalf of County) that Business Associate still maintains in any form, and shall retain no copies of such PHI or, if return or destruction is not feasible, shall continue to extend the protections of this EXHIBIT to such information, and shall limit further use of such PHI to those purposes that make the April 25, 2025 Pg. 143
34 return or destruction of such PHI infeasible. This provision shall apply to PHI that is in the possession of subcontractors or agents of BusinessAssociate.

VII. Miscellaneous Provisions
A. Disclaimer. County makes no warranty or representation that compliance by Business Associate with this EXHIBIT, HIPAA or the HIPAA regulations will be adequate or satisfactory for Business Associate's own purposes or that any information in Business Associate's possession or control, or transmitted or received by Business Associate, is or will be secure from unauthorized use or disclosure. Business Associate is solely responsible for all decisions made by Business Associate regarding the safeguarding of PHI.

B. Amendment. The parties acknowledge that federal and State laws relating to electronic data security and privacy are rapidly evolving and that amendment of this EXHIBIT may be required to provide for procedures to ensure compliance with such developments. The parties specifically agree to take such action as is necessary to implement the standards and requirements of HIPAA, the HIPAA regulations and other applicable laws relating to the security or privacy of PHI. Upon County's request, Business Associate agrees to promptly enter into negotiations with County concerning an amendment to this EXHIBIT embodying written assurances consistent with the standards and requirements of HIPAA, the HIPAA regulations or other applicable laws. County may terminate this Agreement upon thirty (30) days written notice in the event:
1) Business Associate does not promptly enter into negotiations to amend this EXHIBIT when requested by County pursuant to this Section; or 2) Business Associate does not enter into an amendment providing assurances regarding the safeguarding and security of PHI that County, in its sole discretion, deems sufficient to satisfy the standards and requirements of HIPAA and the HIPAAregulations.

C. Assistance in Litigation or Administrative Proceedings. Business Associate shall make itself and any subcontractors, employees, or agents assisting BusinessAssociate in the performance of its obligations under this Agreement, available to County at no cost to County to testify as witnesses, or otherwise, in the event of litigation or administrative proceedings being commenced against County, its directors, officers or employees based upon claimed violation of HIPAA, the HIPAAregulations or other laws relating to security and privacy, which involves inactions or actions by the Business Associate, except where Business Associate or its subcontractor, employee, or agent is a named adverse party.

D. No Third-Party Beneficiaries. Nothing express or implied in the terms and conditions of this EXHIBIT is intended to confer, nor shall anything herein confer, upon any person other than County or Business Associate and their respective successors or assignees, any rights, remedies, obligations, or liabilities whatsoever.

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35 E. Interpretation. The terms and conditions in this EXHIBIT shall be interpreted as broadly as necessary to implement and comply with HIPAA, the HIPAA regulations and applicable State laws. The parties agree that any ambiguity in the terms and conditions of this EXHIBIT shall be resolved in favor of a meaning that complies and is consistent with HIPAA and the HIPAAregulations.

F. Regulatory References. A reference in the terms and conditions of this EXHIBIT to a section in the HIPAAregulations means the section as in effect or as amended.

G. Survival. The respective rights and obligations of a Business Associate under Section VII.C of this EXHIBIT shall survive the termination or expiration of this Agreement.

H. No Waiver of Obligations. No change, waiver or discharge of any liability or obligation hereunder on any one or more occasions shall be deemed a waiver of performance of any continuing or other obligation, or shall prohibit enforcement of any obligation, on any other occasion.

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36 EXHIBIT D-Attachment 1
Business Associate Data Security Standards
I.General Security Controls.

A. Confidentiality Statement. All persons that will be working with County PHI must sign a confidentiality statement. The statement must include at a minimum, General Use, Security and Privacy Safeguards, Unacceptable Use, and Enforcement Policies. The statement must be signed by the workforce member prior to access to County PHI. The statement must be renewed annually. The Business Associate shall retain each person's written confidentiality statement for County inspection for a period of six (6) years following contract termination.

B. Background Check. Before a member of the Business Associate's workforce may access County PHI, Business Associate must conduct a thorough background check of that worker and evaluate the results to assure that there is no indication that the worker may present a risk for theft of confidential data. The Business Associate shall retain each workforce member's background check documentation for a period of three (3) years following contracttermination.

C. Workstation/Laptop Encryption. All workstations and laptops that process and/or store County PHI must be encrypted using a FIPS 140-2 certified algorithm, such as Advanced Encryption Standard (AES), with a 128-bit key or higher. The encryption solution must be full disk unless approved by the County Information Security Office.

D. Server Security. Servers containing unencrypted County PHI must have sufficient administrative, physical, and technical controls in place to protect that data, based upon a risk assessment/system security review.

E. Minimum Necessary. Only the minimum necessary amount of County PHI required to perform necessary business functions may be copied, downloaded, or exploited.

F. Removable Media Devices. All electronic files that contain County PHI data must be encrypted when stored on any removable media or portable device (i.e., USB thumb drives, floppies, CD/DVD, Blackberry, backup tapes, etc.). Must be encrypted using a FIPS 140-2 certified algorithm, such as Advanced Encryption Standard (AES), with a 128-bit key or higher.

G. Antivirus Software. All workstations, laptops and other systems that process and/or store County PHI must install and actively use comprehensive anti-virus software solution with automatic updates scheduled at least daily.

H. Patch Management. All workstations, laptops and other systems that process and/or store County PHI must have security patches applied, with system reboot if April 25, 2025 Pg. 146
37 necessary. There must be a documented patch management process which determines installation timeframe based on risk assessment and vendor recommendations. At a maximum, all applicable patches must be installed within 30 days of vendor release.

I. User IDs and Password Controls. All users must be issued a unique username for accessing County PHI. Username must be promptly disabled, deleted, or the password changed upon the transfer or termination of an employee with knowledge of the password. Passwords
are not to be shared. Must be at least eight characters. Must be a non-dictionary word.

Must not be stored in readable format on the computer. Must be changed every 60 days.

Must be changed if revealed or compromised. Must be composed of characters from at least three of the following four groups from the standard keyboard:
• Upper case letters (A-Z)
• Lower case letters (a-z)
• Arabic numerals (0-9)
• Non-alphanumeric characters (punctuation symbols)
J. Data Sanitization. All County PHI must be sanitized using NIST Special Publication 800- 88 standard methods for data sanitization when the County PSCI is no longer needed.

II. System Security Controls.

A. System Timeout. The system must provide an automatic timeout, requiring reauthentication of the user session after no more than 20 minutes of inactivity.

B. Warning Banners. All systems containing County PHI must display a warning banner stating that data is confidential, systems are logged, and system use is for business purposes only. Users must be directed to log off the system if they do not agree with these requirements.

C. System Logging. The system must maintain an automated audit trail which can identify the user or system process which initiates a request for County PHI, or which alters County PHI. The audit trail must be date and time stamped, must log both successful and failed accesses, must be read only, and must be restricted to authorized users. If County PHI is stored in a database, database logging functionality must be enabled. Audit trail data must be archived for at least six (6) years after occurrence.

D. Access Controls. The system must use role-based access controls for all user authentications, enforcing the principle of least privilege.

E. Transmission Encryption. All data transmissions of County PHI outside the secure internal network must be encrypted using a FIPS 140-2 certified algorithm, such as Advanced Encryption Standard (AES), with a 128-bit key or higher. Encryption can be April 25, 2025 Pg. 147
38 end to end at the network level, or the data files containing County PHI can be encrypted.

This requirement pertains to any type of County PHI in motion such as website access, file transfer, andE-Mail.

F. Intrusion Detection. All systems involved in accessing, holding, transporting, and protecting County PHI that are accessible via the Internet must be protected by a comprehensive intrusion detection and prevention solution.

III. Audit Controls.

A. System Security Review. All systems processing and/or storing County PHI must have at least an annual system risk assessment/security review which provides assurance that administrative, physical, and technical controls arc functioning effectively and providing adequate levels of protection. Reviews shall include vulnerability scanning tools.

B. Log Reviews. All systems processing and/or storing County PHI must have a routine procedure in place to review system logs for unauthorized access.

C. Change Control. All systems processing and/or storing County PHI must have a documented change control procedure that ensures separation of duties and protects the confidentiality, integrity, and availability of data.

IV. Business Continuity / Disaster Recovery Controls.

A. Disaster Recovery. Business Associate must establish a documented plan to enable continuation of critical business processes and protection of the security of electronic County PHI in the event of an emergency. Emergency means any circumstance or situation that causes normal computer operations to become unavailable for use in performing the work required under this Agreement for more than 24 hours.

B. Data Backup Plan. Business Associate must have established documented procedures to back-up County PHI to maintain retrievable exact copies of County PHI.

The plan must include a regular schedule for making back-ups, storing back-ups offsite, an inventory of back-up media, and the amount of time to restore County PHI should it be lost. At a minimum, the schedule must be a weekly full back-up and monthly offsite storage of County data.

V. Paper Document Controls.

A. Supervision of Data. County PHI in paper form shall not be left unattended at any time, unless it is locked in a file cabinet, file room, desk, or office. Unattended means that information is not being observed by an employee authorized to access the information. County PHI in paper form shall not be left unattended at any time in vehicles or planes and shall not be checked in baggage on commercial airplanes.

B. Escorting Visitors. Visitors to areas where County PHI is contained shall be April 25, 2025 Pg. 148
39 escorted and County Protected Health Information shall be kept out of sight while visitors are in the area.

C. Confidential Destruction. County PHI must be disposed of through confidential means, using NIST Special Publication 800-88 standard methods for data sanitization when the County PSCI is no longer needed.

D. Removal of Data. County PHI must not be removed from the premises of the Business Associate except with express written permission of County.

E. Faxing. Faxes containing County PHI shall not be left unattended and fax machines shall be in secure areas. Faxes shall contain a confidentiality statement notifying persons receiving faxes in error to destroy them. Fax numbers shall be verified with the intended recipient before sending.

F. Mailing. County PHI shall only be mailed using secure methods. Large volume mailings of County Protected Health Information shall be by a secure, bonded courier with signature required on receipt. Disks and other transportable media sent through the mail must be encrypted with a County approved solution, such as a solution using a vendor product specified on the CSSI.

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40 EXHIBIT E

ASSURANCES AND CERTIFICATIONS
Contractor agrees that programs and services receiving financial assistance from and through the Department of Health Care Services (“DHCS”) or Kings County Behavioral Health will be administered in accordance with the Health and Safety Code §§ 11750 et seq. and any other applicable state or federal requirements, including civil rights.

A.Contractor certifies and agrees that:

1.A working transition plan for services to persons with disabilities exists and is in use as defined in Title 9, Sections 10800, et seq. of the California Code of Regulations.

2.All products, reports, preliminary findings, or data assembled or compiled by Contractor under this Agreement becomes the property of the State. The State reserves the right to authorize othersto use or reproduce such materials.

3.All announcements of events, such as public meetings, hearings, or training courses, shall include a statement of advance notice for accommodations for any disabled, deaf, or hearing-impaired individual.

4.Limited English Proficiency (“LEP”) - Contractor will take reasonable steps to ensure meaningful access to its programs, services, and information on the services the Contractor provides, free of charge. Additionally, the Contractor certifies that it has established and implemented as required by DHCS, policies and procedures for language assistance services that provide LEP persons with meaningful access, i.e., oral interpretation services, bilingual staff, telephone interpreter lines, written language services, community volunteers, etc.

5.Sexual contact shall be prohibited between participants/clients and the treatment/recovery program staff, including members of the Board of Directors. Service Providers shall include this policy prohibition as part of an overall clients’ rights statement given to the client at admission and shall include a statement in each employee personnel file that notes that the employee has read and understood the sexual contact prohibition.

This policy shall remain in effect for six (6) months after a client is discharged from treatment services.

B.Contractor further agrees to establish a complaint policy and procedure, which provides the following:

1. A procedure by which a person of any class of persons subjected to discrimination prohibited by Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, Sections 11135, et seq. of the California Government Code, or April 25, 2025 Pg. 150
41 Title 9, Sections 10800, et seq. of the California Code of Regulations may individually or by a representative file a written complaint. The subject complaint will clearly state under which law the complaint is filed.

2. A statement advising individuals that complaints may be filed with the County or the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”).

3. A statement advising individuals that in cases where the complaint is filed initially with the OCR, the OCR may elect to investigate the complaint or request that the Civil Rights Officer for the County conduct the investigation.

4. Within the time limits procedurally imposed, the complainant shall be advised in writing as to the findings regarding the alleged complaint. In the same written notice, the complainant shall be advised that if he/she is not satisfied with the decision, an appeal may be filed with the U.S. Department of Health and Human Services’ Office for Civil Rights.

5. Maintenance of records regarding:
(a) The number of complaints filed;
(b)The nature of the complaint;
(c) The validity of the complaint; and
(d) The corrective action taken.

Contractor shall adhere to the confidentiality of patient records as specified under State, Federal, and local laws, including, but not limited to, Title 45 of the Code of Federal Regulations, Parts 80 and 84, Title VI of the Civil Rights Act of 1964, and the privacy requirements of the “Privacy Rule” promulgated by the U.S. Department Health and Human Services at Title 45 of the Code of Federal Regulations, sections 160 through 164.

Nothing in this paragraph shall preclude the parties from subsequently entering into a Business Associate Agreement if required by the Privacy Rule.

Drug-Free Workplace under Government Code § 8355
C.Contractor agrees that all program contractors of services receiving funds from and through the DHCS will provide an alcohol/drug free workplace by doing all of the following:

1. Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited in the person or organization’s workplace and specifying the actions that will be taken against employeesfor violations ofsaid prohibition.

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42 2. Establishing a drug-free awareness program to inform employees about all of the following:
(a) The dangers of drug abuse in the workplace;
(b) The person or organization’s policy of maintaining a drug-free workplace;
(c) Any available drug counseling, rehabilitation, and employee assistance programs;
(d) The penalties that may be imposed upon employees for drug abuse violations.

Requiring that each employee engaged in the performance of the contract or grant be given a copy of the company’s drug-free policy statement and that, as a condition of employment on the contract or grant, the employee agrees to abide by the terms of the statement. (Govt. Code §§ 8350 et seq)
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Page 1 of 2 ends

City Council/Successor Agency/Public Finance AuthorityApril 25, 2024

City Council/Successor Agency/Public Finance Authority
April 25, 2024