San Mateo County General Fund Obligations $612,605,687 3.158% $19,346,088 San Mateo County Board of Education Certificates of Participation 6,490,000 3.158% 204,954 Midpeninsula Regional Open Space District General Fund Obligations 99,705,600 0.001% 997 San Mateo County Mosquito and Vector Control District General Fund Obligations 3,825,000 3.158% 120,794 TOTAL OVERLAPPING GENERAL FUND DEBT $722,626,287 $19,672,832 OVERLAPPING TAX INCREMENT DEBT (Successor Agency) $4,160,000 100.000% $4,160,000 COMBINED TOTAL DEBT $156,960,016 (2)
(1) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the porting of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total taxable assessed value.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, and mortgage revenue bonds.
RATIOS TO 2021-22 ASSESSED VALUATION:
Direct Debt 0.05%
Combined Direct Debt 1.87%
Total Net Direct and Overlapping Tax and Assessment Debt 1.58% RATIOS TO REDEVELOPMENT SUCCESSOR AGENCY INCREMENTAL VALUATION ($1,776,907,469):
Total Overlapping Tax Incremental Debt 0.24%
163
374
CITY OF BELMONT
COMPUTATION OF LEGAL BONDED DEBT MARGIN
June 30, 2022
ASSESSED VALUATION:
Secured property assessed value, net of
exempt real property $8,410,535,906
BONDED DEBT LIMIT (3.75% OF ASSESSED VALUE) (a) $315,395,096 AMOUNT OF DEBT SUBJECT TO LIMIT:
Total Bonded Debt $0
Less Tax Allocation Bonds and Sales Tax Revenue
Bonds, Certificate of Participation not subject to limit $0 Amount of debt subject to limit $0
LEGAL BONDED DEBT MARGIN $315,395,096
Total net debt
Total Net Debt Legal applicable to the limit
Fiscal Debt Applicable to Debt as a percentage
Year Limit Limit Margin of debt limit
2013 $178,916,858 $178,916,858
2014 190,308,976 190,308,976
2015 200,849,889 200,849,889
2016 214,199,749 214,199,749
2017 230,075,502 230,075,502
2018 246,378,145 246,378,145
2019 264,366,934 264,366,934
2020 284,140,706 284,140,706
2021 302,531,239 302,531,239
2022 315,395,096 315,395,096
NOTE:
(a) California Government Code, Section 43605 sets the debt limit at 15%. The Code section was enacted prior to the change in basing assessed value to full market value when it was previously 25% of market value. Thus, the limit shown as 3.75% is one-fourth the limit to account for the adjustment of showing assessed valuation at full cash value. Limits presented from prior years have been adjusted for this methodology. 164
375
CITY OF BELMONT
HISTORIC OPERATING RESULTS – DEBT SERVICE AND COVERAGE RATIOS 2016 SEWER REVENUE AND SEWER REFUNDING REVENUE BONDS (2001 AND 2006 SEWER REVENUE BONDS), AND 2019 SEWER REVENUE BONDS
Last Ten Fiscal Years
Debt Service Requirements
Operating & Net
Fiscal System Maintenance System
Year (1) Revenues (2) Expenditures (3) Revenues Principal Interest Total Coverage 2013 $6,898,806 $4,610,335 $2,288,471 $355,000 $569,185 $924,185 2.48 2014 7,867,359 4,876,816 2,990,543 370,000 553,972 923,972 3.24 2015 7,886,591 5,219,101 2,667,490 385,000 537,995 922,995 2.89 2016 9,101,597 6,013,171 3,088,426 405,000 736,145 1,141,145 2.71 2017 9,470,233 6,577,227 2,893,006 485,000 762,279 1,247,279 2.32 2018 10,311,885 7,287,562 3,024,323 505,000 876,271 1,381,271 2.19 2019 10,850,538 8,473,802 2,376,736 520,000 860,896 1,380,896 1.72 2020 12,468,348 6,486,172 5,982,176 540,000 1,113,827 1,653,827 3.62 2021 12,572,930 7,257,702 5,315,228 735,000 1,662,471 2,397,471 2.22 2022 13,995,360 7,115,757 6,879,603 865,000 1,662,471 2,527,471 2.72 Notes:
(1) Beginning in 2016, only sewer collection fund activities included. (2) Beginning in 2016, includes sewer service charges and all other income, excluding interest earned, income on joint ventures, connection fees and other income pursuant to Installment Purchase Agreement dated March 1, 2016.
(3) Beginning in 2016, includes reasonable and necessary costs for maintaining and operating sewer system, excluding parity debt, capital improvements, depreciation and other costs pursuant to Installment Purchase Agreement dated March 1, 2016
Source: City of Belmont Annual Financial Statements
0.00 0.50
1.00 1.50
2.00 2.50
3.00 3.50
4.00 4.50
5.00 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Coverage
165
376
CITY OF BELMONT
REVENUE BOND COVERAGE
2009A AND 2018 SEWER TREATMENT FACILITY REVENUE BONDS
AND 2022 SEWER TREATMENT FACILITY OBLIGATIONS
Last Ten Fiscal Years
Sewer Debt Service Requirements
Treatment Net Revenue
Fiscal Facility Available for
Year Gross Revenue Expenses Debt Service Principal Interest Total Coverage 2013 $3,108,898 $78,964 $3,029,934 $155,000 $349,807 $504,807 6.00 2014 3,111,925 79,127 3,032,798 160,000 345,082 505,082 6.00 2015 3,113,080 84,082 3,028,998 165,000 340,207 505,207 6.00 2016 3,124,790 83,594 3,041,196 165,000 335,257 500,257 6.08 2017 3,093,423 75,282 3,018,141 170,000 330,232 500,232 6.03 2018 3,288,125 18,489 3,269,636 175,000 325,057 500,057 6.54 2019 3,611,952 77,591 3,534,361 180,000 319,732 499,732 7.07 2020 3,621,986 90,354 3,531,632 385,000 1,497,313 1,882,313 1.88 2021 3,207,534 126,823 3,080,711 535,000 1,329,209 1,864,209 1.65 2022 3,128,640 125,473 3,003,167 555,000 1,329,209 1,884,209 1.59 Notes: Debt service on the 2018 bonds did not begin until August 2019.
The 2022 Obligations refunded the 2009A Bonds and debt service on the 2022 Obligations does not begin until August 2022.
Source: City of Belmont Annual Financial Statements
0.00 1.00
2.00 3.00
4.00 5.00
6.00 7.00
8.00 9.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Coverage
166
377
CITY OF BELMONT
BONDED DEBT PLEDGED REVENUE COVERAGE
SUCCESSOR AGENCY (INCLUDING FORMER REDEVELOPMENT AGENCY BONDS) Last Ten Fiscal Years
Debt Service Requirements
Fiscal Tax
Year Revenue (a) Principal Interest Total Coverage
2013 $2,430,695 $1,110,000 $994,608 $2,104,608 1.15
2014 2,589,571 1,175,000 929,957 2,104,957 1.23
2015 1,744,119 15,605,000 165,050 15,770,050 0.11 (b)
2016 1,865,275 1,125,000 347,079 1,472,079 1.27
2017 1,498,633 1,160,000 307,056 1,467,056 1.02
2018 992,433 1,050,000 268,552 1,318,552 0.75
2019 966,582 695,000 238,235 933,235 1.04
2020 956,855 720,000 213,518 933,518 1.02
2021 966,457 740,000 188,015 928,015 1.04
2022 3,922,881 740,000 (c) 188,015 (c) 928,015 4.23
Notes:
(a) Tax Increment Revenues are no longer allocated to Redevelopment Agencies, effective January 31, 2012.
Effective February 1, 2012, the Successor Agency had assumed all obligations of the Redevelopment Agency. Pursuant to law, the Successor Agency receives Real Property Tax Trust Funds Allocations to finance its activities including debt service on obligations of the former Redevelopment Agency. (b) Coverage is low due to refunding of debt in fiscal year 2015 (c) The Bonds were defeased during fiscal year 2022.
Source: City of Belmont Annual Financial Statements
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
T
h
o
u
s
a
n
d
s
Tax Increment Revenue Debt Service Payment
167
378
CITY OF BELMONT
SEWER SYSTEM
SUMMARY STATEMENT OF HISTORICAL
REVENUE AND EXPENDITURES
Last Ten Fiscal Years
Fiscal Year Ended June 30,
Notes 2013 2014 2015 2016 2017
REVENUES
Charges for services $6,851,049 $8,054,697 $8,413,152 $9,092,502 $9,413,671 Connection charges (1) 428,116 1,503,782
Miscellaneous revenues (charges) 871 500 0 9,095 118
Interest revenue (1) 8,605 11,726 12,711 75,252 90,353
Joint venture interest (1) (88,572) (326,150) (922,413) (2,265,589) (240,494) Total Revenues 6,771,953 7,740,773 7,503,450 7,339,376 10,767,430
EXPENSES
Personnel services 1,105,207 1,137,123 1,181,169 1,232,220 1,589,589 Supplies, materials and services 3,347,179 3,535,644 4,037,932 4,780,951 4,987,638 Sewer treatment services 158,820 204,549 0
Interest expense (1) 562,980 547,501 530,041 1,059,926 719,883 Total Expenses 5,174,186 5,424,817 5,749,142 7,073,097 7,297,110 Net Operating Transfers In (Out) (1),(2) (704,024) (547,775) (628,769) (1,285,187) (824,580) NET REVENUES $893,743 $1,768,181 $1,125,539 ($1,018,908) $2,645,740 Less adjustments $0 $0 $0 $4,107,334 $190,822
AMOUNTS AVAILABLE FOR
DEBT SERVICE $893,743 $1,768,181 $1,125,539 $3,088,426 $2,836,562 Fiscal Year Ended June 30,
2018 2019 2020 2021 2022
REVENUES
Charges for services $10,311,885 $10,850,538 $12,468,348 $12,572,930 $13,995,360 Connection charges (1) 60,125 49,272 60,124 3,603,551 2,255,284 Miscellaneous revenues (charges) 1,708,958 0 125 0
Interest revenue (1) 388,306 481,193 632,309 86,058 (45,649) Joint venture interest (1) (228,686) (585,866) (652,586) (677,611) (723,609) Total Revenues 10,531,630 12,504,095 12,508,195 15,585,053 15,481,386
EXPENSES
Personnel services 2,047,229 1,785,140 1,233,263 1,478,448 1,709,147 Supplies, materials and services 5,240,333 6,688,662 5,252,909 5,779,254 5,406,610 Sewer treatment services
Interest expense (1) 771,944 780,887 1,385,791 1,424,429 1,387,174 Total Expenses 8,059,506 9,254,689 7,871,963 8,682,131 8,502,931 Net Operating Transfers In (Out) (1),(2) (1,312,423) 0 (325,000) (8,334) (98,948) NET REVENUES $1,159,701 $3,249,406 $4,311,232 $6,894,588 $6,879,507 Less adjustments (1), (2) $1,864,622 $836,288 $1,670,944 ($1,579,235) $96
AMOUNTS AVAILABLE FOR
DEBT SERVICE $3,024,323 $4,085,694 $5,982,176 $5,315,353 $6,879,603 Notes:
(1) Not included in System Revenues under the Installment Purchase Agreement, beginning March 1, 2016. (2) Includes transfers for storm drain improvements that mitigate infiltration and intrusion into the sewage system.
Source: City of Belmont
168
379
CITY OF BELMONT
TEN LARGEST USERS OF THE SEWER SYSTEM
Fiscal Year
2021-22
User Type Revenues*
McLellan Estate Co Various Multifamily Residential $332,754 Prime Old County LP 040-271-380 Multifamily Residential 284,371 PMI Belmont II LLC Various Multifamily Residential 190,907 Crestview South Apartments LLC Various Multifamily Residential 122,838 Timberlane Apartments Partnership LP 045-373-150 Multifamily Residential 121,028 Catania Limited Partnership Various Multifamily Residential 101,596 Spieker Richard Tod TR & Spieker Catherine Reilly TR Various Multifamily Residential 85,174 Carlmont Heights LLC 045-030-240 Multifamily Residential 83,858 Continentals Belmont Partnership Various Shopping Center 73,358 City of Belmont Various Public 73,208
* Includes Base and Flow Charges
Source: City of Belmont
Required per 2016 Sewer Revenue Bonds Continuing Disclosure.
NUMBER OF SEWER SERVICE USERS
User Type 2013 2014 2015 2016 2017
All Users 8,243 8,242 8,240 8,239 8,240
2018 2019 2020 2021 2022
All Users 8,240 8,248 8,253 8,358 8,360
(1) Decline due to a change from a flat rate to a metered rate system.
SEWER SERVICE REVENUES BY CLASS OF USER
June 30, 2022
User Class Revenue Percent
Single Family & Multiple Family Residential $12,367,267 88.49% Commercial/Institutional 1,609,356 11.51%
Total Revenue $13,976,623 100.00%
Source: nbsgov.com
169
380
CITY OF BELMONT
SCHEDULE OF BUDGETED & PROJECTED
SEWER TREATMENT FACILITY CHARGES
AND ASSOCIATED DEBT SERVICE
Fiscal Year 2017-18 2018-19 2019-20 2020-21 2021-22
Sewer Treatment Facility Charges Revenue (A) $3,225,639 $3,178,480 $3,196,757 $3,181,962 $3,142,679 Debt Service Series 2009A Bonds (B) (500,056) (499,732) (506,481) (505,436) (508,836) Debt Service Series 2018 Bonds (1,383,056) (1,390,750) (1,388,375) Surplus, after debt service 2,725,583 2,678,748 1,307,220 1,285,776 1,245,468 Debt Service Coverage Ratio 645.056% 636.037% 169.182% 167.809% 165.647% Fiscal Year 2022-23 2023-24 2024-25 2025-26 2026-27
Sewer Treatment Facility Charges Revenue (A) $3,142,057 $3,204,898 $3,268,996 $3,334,376 $3,401,064 Debt Service Series 2018 Bonds (1,390,125) (1,390,875) (1,390,625) (1,389,375) (1,387,125) Debt Service 2022 Sewer Treatment Facility Obligations (1,409,904) (1,440,922) (797,659) (796,911) (797,818) Surplus, after debt service 342,028 373,101 1,080,712 1,148,090 1,216,121 Debt Service Coverage Ratio 112.215% 113.175% 149.386% 152.513% 155.659% (A) Not including amounts on deposit in the Rate Stabilization Fund.
If such amounts were added to revenues, debt service coverage would be higher than shown. (B) Series 2009A Bonds were refunded in May 2022.
Collection of charge began in 2011-12.
Required per 2009 and 2018 Sewer Treatment Facility Revenue Bonds Continuing Disclosure.
Source: nbsgov.com
170
381
COMMUNITY FACILITIES DISTRICT NO. 2000-1 OF THE CITY OF BELMONT
CONTINUING DISCLOSURES
June 30, 2022
Bond Principal Outstanding - August 30, 2022 $4,035,000 Balance Outstanding by Fund - August 1, 2022
Reserve Fund $1
(surety bond w/
Ambac no value)
Maximum Debt Service Coverage
Year Ending August 1, Net Taxes Bond Debt Service
Debt Service
Coverage
2004 $855,013.15 $328,750.00 2.60
2005 840,459.85 650,000.00 1.29
2006 848,544.45 645,000.00 1.32
2007 856,703.50 642,200.00 1.33
2008 864,937.60 640,300.00 1.35
2009 873,247.39 640,400.00 1.36
2010 881,633.49 640,425.00 1.38
2011 890,096.52 639,925.00 1.39
2012 898,637.11 643,900.00 1.40
2013 907,255.90 642,088.00 1.41
2014 915,953.53 644,163.00 1.42
2015 924,730.64 644,788.00 1.43
2016 864,667.73 639,550.00 1.35
2017 870,121.20 643,738.00 1.35
2018 878,822.41 641,775.00 1.37
2019 866,272.46 638,950.00 1.36
2020 860,531.00 640,262.50 1.34
2021 869,462.47 640,425.00 1.36
2022 873,830.66 644,437.50 1.36
2023 882,568.97 642,012.50 1.37
2024 891,394.66 643,437.50 1.39
2025 900,308.61 643,425.00 1.40
2026 909,311.70 641,975.00 1.42
2027 918,404.82 644,087.50 1.43
2028 927,588.87 644,475.00 1.44
2029 936,864.76 643,137.50 1.46
2030 946,233.41 645,075.00 1.47
Total $23,953,596.86 $17,038,702.00 1.41
Special Tax Levy Delinquency Rate - June 30, 2022 0.26% (a) None
Owner Land Use Special Tax Total Special Tax
None N/A N/A N/A
Changes to Tax Rate and Method of Apportionment None
None
CDIAC To be filed by October 30
(a) Provided by NBS - Delinquency Summary Report
Special Tax Delinquency in Excess of 5% of Total Levy
Supplemental California Debt and Investment Advisory
Commission Reporting
Status of Foreclosure Actions on Special Tax Levy in Excess of $10,000 171
382
CITY OF BELMONT
DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
San Mateo City
Fiscal City Assessed County Population
Year Population Valuation Population % of County
2013 26,316 $4,712,109,574 735,678 3.58%
2014 26,559 5,013,618,086 745,193 3.56%
2015 26,748 5,209,249,361 753,123 3.55%
2016 27,608 5,648,901,772 765,895 3.60%
2017 27,343 6,077,587,115 770,256 3.55%
2018 27,388 6,477,809,867 774,155 3.54%
2019 27,174 6,951,922,956 774,485 3.51%
2020 26,669 7,453,883,672 773,244 3.45%
2021 27,587 7,946,879,729 751,596 3.67%
2022 27,203 8,281,898,247 744,662 3.65%
2016-2020 (a) 2010-2014 2008-2012 2006-2010
Per Capita Income: $79,061 $56,033 $52,862 $52,376
Unemployment Rate:
Male: 4.20% 8.59% 7.57% 6.16%
Female: 2.10% 5.61% 549.00% 5.57%
Total Personal Income: $160,046 $106,287 $103,083 $99,913 (a) The most recent information available is from 2020.
Source: California State Department of Finance
County of San Mateo Controller's Office
www.usa.com
3.00%
3.20%
3.40%
3.60%
3.80%
4.00%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
City Population as a % of County Population
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Billions
Assessed Valuation
172
383
Number of Number of
Employer Employees Employer Employees
RING CENTRAL, INC. 676 ORACLE AMERICA, INC. 871
AUTOBAHN MOTORS 132 CENGAGE LEARNING, INC. 338
SAFEWAY STORE #1138 113 SAFEWAY STORE 184
LUNARDI'S MARKET 90 SUNEDISON 150
SILVERADO - BELMONT HILLS 84 NIKON PRECISION, INC. 146
NIKON PRECISION, INC. 80 AUTOBANH MOTORS 120
WOODMONT REAL ESTATE SERVICES 57 CARLMONT GARDENS NURSING CENTER 110 SUNRISE OF BELMONT 56 SILVERADO SR LIVING BELMONT HILLS 103 MERRY MOPPET PRESCHOOL, INC. 54 JAMES ELECTRONICS/LTD 84 NIKON RESEARCH CORPORATION OF AMERICA 53 VINDICIA, INC. 75 Note: Excludes exempt entities, such as financial institutions, governments and non-profits.
Data not available for ranking or total employment.
Source: City of Belmont Finance, Business License (Hdl Companies) Fiscal 2021-2022 Fiscal 2012-2013
CITY OF BELMONT
PRINCIPAL EMPLOYERS
Current Year and Ten Years Ago
173
384
CITY OF BELMONT
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION Last Ten Fiscal Years
Fiscal Year Ended June 30,
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General government 33.00 30.00 30.00 31.00 33.50 34.00 34.00 33.42 33.00 33.00 Public safety 43.00 45.00 45.00 45.00 45.00 45.00 45.00 44.00 44.00 44.00 Highways and streets 28.00 28.00 27.00 27.00 30.00 30.00 33.00 33.00 33.00 33.00 Culture and recreation 22.10 22.85 22.85 22.85 23.30 24.30 24.30 24.30 24.30 24.30 Total 126.10 125.85 124.85 125.85 131.80 133.30 136.30 134.72 134.30 134.30 Source: City of Belmont Budget
0.00 20.00
40.00 60.00
80.00 100.00
120.00
140.00
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
FTE's
General government Public safety
Highways and streets Culture and recreation
174
385
This Page Left Intentionally Blank
386
Fiscal Year Ended June 30
2013 2014 2015 2016
Function/Program
Public safety:
Belmont Fire Department (established October 1, 2011) (1) Fire calls for service 2,948 2,585 2,678 2,225
Annual Fire Inspections 302 838 125 850
New Business License Inspections 50 55 45 52
Plan Checks 27 122 133 92
Police:
Police calls for service 28,887 30,087 30,426 29,981
Law violations: (2)
Part I crimes 555 495 340 493
Physical arrests (adult and juvenile) 448 575 546 470
Traffic violations (3) 4,190 1,360 1,535 2,177
Parking violations 2,332 2,732 3,351 3,078
Public works
Street resurfacing (miles) 0000
Culture and recreation:
Community Services:
Recreation class participants 35,145 39,605 39,715 40,150 Sewer
Sewer Connections 7,648 7,653 7,663 7,671
Average daily treatment (millions of gallons) - City only 1.64 1.64 1.80 1.80 Average daily treatment (millions of gallons) - Total SVCW 15.75 15.75 15.75 15.75 Treatment capacity - SVCW (millions of gallons) 29.00 29.00 29.00 29.00 Storm drain inlets 1,500 1,500 1,500 1,500
Sewer main blockages 6362
Source: City of Belmont
Notes:
(1) Fire services provided through Belmont-San Carlos Fire Department through September 30, 2011. (2) Belmont PD switched to the FBI and California DOJ required NIBRS crime reporting as of June 2021. (3) The Red Light Camera Enforcement began operations in May 2010 and ceased June 2013.
N/A denotes information not available.
CITY OF BELMONT
OPERATING INDICATORS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
176
387
Fiscal Year Ended June 30
2017 2018 2019 2020 2021 2022
2,459 2,294 2,354 2,249 2,455 2,510
451 647 466 249 403 340
83 53 49 38 7 29
131 183 157 36 209 171
29,039 26,715 24,947 25,347 25,559 20,858
474 498 513 558 556 506
383 336 373 358 459 504
2,449 2,373 1,644 1,580 989 1,150
2,461 2,428 2,350 2,037 1,935 1,574
007232
43,580 44,910 44,947 34,230 18,075 52,714
7,673 7,678 7,682 7,687 7,689 7,690
1.80 1.80 1.80 1.80 1.80 1.80
15.75 15.75 15.75 15.75 15.75 15.75
29.00 29.00 29.00 29.00 29.00 29.00
1,500 1,500 1,500 1,500 1,500 1,500
422222
177
388
2013 2014 2015 2016
Function/Program
General Government:
Administration Buildings 2 2 2 2
Public safety:
Fire stations (1) 2 2 2 2
Police stations 1 1 1 1
Public works
Miles of streets 70 70 70 70
Street lights 1,465 1,465 1,465 1,465
Traffic Signals 17 17 17 17
Culture and recreation:
Community services:
City parks:
Number of developed parks 14 14 14 14
Acres of developed parks 60.40 60.40 60.40 60.40
Number of undeveloped parks 3 3 3 3
Acres of undeveloped parks 29.16 29.16 29.16 29.16
Acres of open space 295.58 287.58 287.58 287.58
Community Buildings 19 19 19 19
Library:
City Library (2) 1 1 1 1
Water (Provided by Mid-Peninsula Water District)
Sewer
Miles of sanitary sewers 85.00 85.00 85.00 85.00
Storm Drains (miles) 27.00 27.00 27.00 27.00
Number of treatment plants (3) 1 1 1 1
Notes:
(1) Provided through the Belmont-San Carlos Fire Department through September 30, 2011.
Belmont Fire Department established October 1, 2011 provided services through January 12, 2019.
San Mateo Consolidated Fire Department established January 13, 2019. (2) The Library is property of the City of Belmont and operated by San Mateo County. (3) Provided through the Silicon Valley Clean Water Authority N/A denotes information not available.
Source: City of Belmont
Fiscal Year Ended June 30
CITY OF BELMONT
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
Last Ten Fiscal Years
178
389
2017 2018 2019 2020 2021 2022
222222
222222
111111
70 70 70 70 70 70
1,465 1,465 1,465 1,465 1,465 1,465
17 17 18 18 18 18
14 15 15 15 15 15
60.40 61.40 61.40 61.40 61.40 61.40
332222
29.16 29.16 28.16 28.16 28.16 28.16
287.58 287.58 287.58 287.58 287.58 287.58
19 19 19 19 19 19
111111
85.00 85.00 85.00 85.00 85.00 85.00
27.00 27.00 27.00 27.00 27.00 27.00
111111
Fiscal Year Ended June 30
179
390
This Page Left Intentionally Blank
391
SUPPLEMENTAL FINANCIAL INFORMATION
REGARDING SUCCESSOR AGENCY ASSESSED VALUATIONS
(UNAUDITED)
392
Assessed Valuations
The base year valuation for the Project Area was established in the fiscal year ending June 30, 1982. The following table shows historical incremental assessed valuation (including all categories of assessed value) within the Project Area as of the March 1 lien date for the fiscal years 1982-83 through 2021-2022. It should be noted that due to adjustments after the lien date, assessed value may increase or decrease during the year. Factors causing these adjustments include, but are not limited to, supplemental assessments and appeals to assessed value. These adjustments to assessed values, in turn, cause tax increment revenues to increase or decrease.
182
393
CITY OF BELMONT SUCCESSOR AGENCY
(FORMERLY BELMONT REDEVELOPMENT AGENCY)
LOS COSTANOS COMMUNITY DEVELOPMENT PROJECT AREA
HISTORICAL INCREMENTAL ASSESSED VALUATION
Change in
Incremental
Total Incremental Assessed
Fiscal Year Assessed Assessed Valuation From
Ending June 30 Valuation Valuation (1) Previous Year
1983 $157,135,342 $21,536,072 not available
1984 171,237,981 35,638,711 65.48%
1985 184,060,881 62,564,250 75.55%
1986 201,153,514 65,554,244 4.78%
1987 234,842,064 99,242,794 51.39%
1988 246,823,012 111,223,742 12.07%
1989 254,810,733 119,211,463 7.18%
1990 275,154,532 139,555,262 17.07%
1991 313,264,539 177,665,269 27.31%
1992 349,801,313 214,202,043 20.56%
1993 376,194,509 240,595,239 12.32%
1994 389,900,944 254,301,674 5.70%
1995 397,847,297 262,248,027 3.12%
1996 420,827,405 285,228,135 8.76%
1997 441,467,705 305,868,435 7.24%
1998 483,248,340 347,649,070 13.66%
1999 508,606,319 373,007,049 7.29%
2000 551,190,752 415,591,482 11.42%
2001 628,703,301 493,104,031 18.65%
2002 703,196,659 567,597,389 15.11%
2003 736,172,756 600,573,486 5.81%
2004 763,224,908 627,625,638 4.50%
2005 793,262,313 657,663,043 4.79%
2006 828,369,282 692,770,012 5.34%
2007 882,997,061 747,397,791 7.89%
2008 925,665,178 790,065,908 5.71%
2009 1,001,611,395 866,012,125 9.61%
2010 1,021,824,923 886,225,653 2.33%
2011 979,692,227 844,092,957 -4.75%
2012 1,006,362,049 870,762,779 3.16%
2013 1,064,558,175 928,958,905 6.68%
2014 1,096,475,744 960,876,474 3.44%
2015 1,137,357,996 1,001,758,726 4.25%
2016 1,205,793,308 1,070,194,038 6.83%
2017 1,287,183,196 1,151,583,926 7.61%
2018 1,384,289,254 1,248,689,984 8.43%
2019 1,531,108,751 1,395,509,481 11.76%
2020 1,680,464,323 1,544,865,053 10.70%
2021 1,838,302,558 1,702,703,288 10.22%
2022 1,907,657,139 1,772,057,869 4.07%
Source: County of San Mateo
(1) Total assessed valuation in excess of the Agency's 1981-82 base year assessed valuation of $135,599,270.
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Historical Housing Set-Aside Amounts
The following table shows the historical allocation of tax increment revenues by the County of San Mateo derived from the project area.
CITY OF BELMONT SUCCESSOR AGENCY
(FORMERLY BELMONT REDEVELOPMENT AGENCY)
LOS COSTANOS COMMUNITY DEVELOPMENT PROJECT AREA
HISTORICAL RECEIPT OF TAX INCREMENT AND TRUST FUND REVENUES Fiscal Year Secured Unsecured Real Property Housing Change Ending Tax Tax Unitary Supplemental Total Tax Tax Trust Fund Set Aside From June 30 Increment (2) Increment (2) Revenue (3) Allocations (2) Increment (4) Allocations (6) Total Tax Amounts (5) Prior Year 1984 $285,494 $285,494 $57,099
1985 363,836 363,836 72,989 27.44%
1986 $429,246 $84,594 $16,681 530,521 530,521 103,097 45.81% 1987 725,932 82,321 58,699 866,952 866,952 168,560 63.42% 1988 787,579 69,137 103,030 959,746 959,746 191,949 10.70% 1989 924,058 73,737 87,124 1,084,919 1,084,919 216,983 13.04% 1990 1,035,629 85,045 $25,534 57,535 1,203,743 1,203,743 240,749 10.95% 1991 1,260,743 1,225,929 54,683 120,184 2,661,539 2,661,539 311,708 121.11% 1992 1,629,619 81,020 57,216 145,226 1,913,081 1,913,081 382,616 (28.12%) 1993 1,758,187 93,810 58,779 59,494 1,970,270 1,970,270 394,055 2.99% 1994 1,890,260 72,133 51,221 49,533 2,063,147 2,063,147 412,629 4.71% 1995 1,933,676 17,827 54,213 18,928 2,024,644 2,024,644 404,929 (1.87%) 1996 2,019,812 222,873 54,170 29,872 2,326,727 2,326,727 465,346 14.92% 1997 2,227,773 131,833 39,541 105,133 2,504,280 2,504,280 500,856 7.63% 1998 2,520,936 195,020 50,432 106,587 2,872,975 2,872,975 569,942 14.72% 1999 2,832,402 123,236 64,836 49,610 3,070,084 3,070,084 614,016 6.86% 2000 3,076,826 118,983 57,337 183,315 3,436,461 3,436,461 687,292 11.93% 2001 3,640,433 172,658 61,111 103,483 3,977,685 3,977,685 795,537 15.75% 2002 4,212,040 253,052 67,477 455,911 4,988,481 4,988,481 997,696 25.41% 2003 4,415,999 220,998 72,375 300,175 5,009,547 5,009,547 1,001,909 0.42% 2004 4,511,245 177,074 77,251 165,496 4,931,066 4,931,066 986,213 (1.57%) 2005 4,773,499 178,051 64,387 179,086 5,195,023 5,195,023 1,039,005 5.35% 2006 4,985,628 176,562 60,337 247,801 5,470,328 5,470,328 1,094,066 5.30% 2007 5,297,243 163,847 151,994 334,221 5,947,305 5,947,305 1,189,461 8.72% 2008 5,812,332 189,141 69,495 281,093 6,352,061 6,352,061 1,270,412 6.81% 2009 6,343,282 289,016 69,868 273,397 6,975,563 6,975,563 1,395,113 9.82% 2010 6,631,570 205,106 78,094 72,979 6,987,749 6,987,749 1,397,550 0.17% 2011 6,274,474 184,886 68,347 61,692 6,589,398 6,589,398 1,317,880 (5.70%) 2012 3,205,128 372,746 39,886 3,617,760 $1,821,662 5,439,422 723,552 (17.45%) 2013 2,430,695 2,430,695 (55.31%)
2014 2,589,571 2,589,571 6.54%
2015 1,744,119 1,744,119 (32.65%)
2016 1,865,275 1,865,275 6.95%
2017 1,498,633 1,498,633 (19.66%)
2018 992,433 992,433 (33.78%)
2019 966,582 966,582 (2.60%)
2020 956,855 956,855 (1.01%)
2021 966,457 966,457 1.00%
2022 3,922,881 3,922,881 305.90%
(1) Amounts shown are net of amounts waived by the Agency under County Fiscal Agreement. (2) Breakdown of tax increment amount secured, unsecured and supplemental categories not available for fiscal years ended June 30, 1984 through 1985.
(3) Unitary revenue reported separately starting in the fiscal year ended June 30, 1990. (4) Total tax increment includes housing set-aside amounts. Under the RDA Dissolution Legislation, the Housing Set Aside was not required in FY 2012 and forward.
(5) This amount calculated as defined in the Fiscal Agreement. (6) Tax Increment Revenues are no longer allocated to Redevelopment Agencies, effective January 31, 2012. Effective February 1, 2012, the Successor Agency has assumed all obligations of the Redevelopment Agency. Pursuant to law, the Successor Agency receives Real Property Tax Trust Funds Allocations to finance its activities including debt service on obligations of the former Redevelopment Agency.
Source: Belmont Successor Agency and County of San Mateo Controller’s Office. 184
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Debt Service Coverage
Housing Set-Aside Amounts in fiscal year 2021-2022 were $0 pursuant to AB x1-26. See the table above entitled "Historical Receipt of Tax Incremental Revenues.” Prior to July 1, 2011, tax increment revenues were used to fund debt service on the 1996 Housing Set-Aside Bonds. As a result of the dissolution of the Redevelopment Agency pursuant to state law, a Successor Agency assumed the debt and receives tax revenues used to pay debt service and fund other activities of the former Redevelopment Agency. Debt service repayments on these bonds are made by the Successor Agency from tax revenue.
Major Property Taxpayers
The ten largest assesses in the Project Area for fiscal 2021-2022 and the assessed valuation of their respective properties in the Project Area as reported by the County are provided in the following schedule. The total taxable value of these properties equals $432,702,061 which represents approximately 23.33% percent of the Project Area's secured taxable valuation (including Unitary Assessed valuation).
CITY OF BELMONT SUCCESSOR AGENCY
(FORMERLY BELMONT REDEVELOPMENT AGENCY)
LOS COSTANOS COMMUNITY DEVELOPMENT PROJECT AREA
TEN LARGEST SECURED PROPERTY TAX ASSESSES
Percentage
of Total
FY21 - 22 Secured Taxable
Taxable Value of
Assessee Use Value (2) Project Area (1)
1 600 Clipper Operating LLC Office $94,189,576 5.08%
2 Westlake Gresham Center LLC Office 57,763,739 3.11%
3 Belmont Hotells LLC Hotel 51,852,777 2.80%
4 Nikon Precision Inc. Office 44,786,779 2.41%
5 Prime Old County LP Residential Multi-Family 34,324,906 1.85% 6 Oracle Corporation Office 34,280,064 1.85%
7 SRE California - 3 LLC Retail 32,927,132 1.78%
8 Grand Prix Belmont LLC Hotel 31,473,548 1.70%
9 875 Woodside LLC Residential Multi-Family 25,864,728 1.39% 10 SSL Landlord LLC Residential Senior Living 25,238,758 1.36% Total $432,702,007 23.33%
Secured taxable value $1,854,734,643
(1) The secured taxable value of the Project Area for fiscal year 2021-2022 is $1,854,734,643.
Source: City of Belmont and County of San Mateo Assessor’s Office. 185
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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 Members of the City of Council
City of Belmont, 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 basic financial statements of the City of Belmont, California, as of and for the year ended June 30, 2022, and have issued our report thereon dated November 3, 2022. Our report includes a reference to other auditors who audited the financial statements of the San Mateo Consolidated Fire Department (SMC Fire) as of and for the year ended June 30, 2021, related to the calculation of the Investment in Joint Venture, as described in our report on the City’s financial statements. Our report also includes an emphasis of a matter paragraph disclosing the implementation of new accounting principles.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing 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’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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. 187
398
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. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’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 financial statements. 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 that are required to be reported under Government Auditing Standards.
We have also issued a separate Memorandum on Internal Control dated November 3, 2022, which is an integral part of our audit and should be read in conjunction with this report.
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 result 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.
Pleasant Hill, California
November3, 2022
188
399
CITY OF BELMONT
MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED JUNE 30, 2022
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CITY OF BELMONT
MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2022
Table of Contents
Page
Memorandum on Internal Control.................................................................................................................. 1 Schedule of Other Matters.................................................................................................................... 3 Status of Prior Year Significant Deficiencies........................................................................................ 15 Status of Prior Year Other Matters...................................................................................................... 17 402
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MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of Belmont, California
We have audited the basic financial statements of the City of Belmont for the year ended June 30, 2022, and have issued our report thereon dated November 3, 2022. Our opinions on the basic financial statements and this report, insofar as they relate to the Investment in Joint Venture of the San Mateo Consolidated Fire Department (SMC Fire), are based solely on the report of other auditors. In planning and performing our audit of the basic financial statements of the City as of and for the year ended June 30, 2022, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing 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’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’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.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we believe are opportunities for strengthening internal controls and operating efficiency.
This communication is intended solely for the information and use of management, City Council, others within the organization, and agencies and pass‐through entities requiring compliance with Government Auditing Standards, and is not intended to be and should not be used by anyone other than these specified parties.
Pleasant Hill, California
November 3, 2022
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MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE The following comment represents new pronouncements taking affect in the next few years. We cite them here to keep you informed of developments:
EFFECTIVE FISCAL YEARS 2022, 2023 and 2024:
GASB 99 – Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The practice issues addressed by this Statement are as follows:
Classification and reporting of derivative instruments within the scope of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument Clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives Clarification of provisions in Statement No. 94, Public‐Private and Public‐Public Partnerships and Availability Payment Arrangements, related to (a) the determination of the public‐private and public‐public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset
Clarification of provisions in Statement No. 96, Subscription‐Based Information Technology Arrangements, related to the subscription‐based information technology arrangement (SBITA) term, classification of a SBITA as a short term SBITA, and recognition and measurement of a subscription liability
Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP)
Disclosures related to nonmonetary transactions
Pledges of future revenues when resources are not received by the pledging government 3 406
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 99 – Omnibus 2022 (Continued)
Clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, related to the focus of the government‐wide financial statements
Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position Terminology used in Statement 53 to refer to resource flows statements.
The Requirements of this Statement are Effective as Follows:
The requirements in paragraphs 26–32 related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.
The requirements in paragraphs 11–25 related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter.
The requirements in paragraphs 4–10 related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.
Earlier application is encouraged and is permitted by individual topic.
How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will enhance comparability in the application of accounting and financial reporting requirements and will improve the consistency of authoritative literature. Consistent authoritative literature enables governments and other stakeholders to more easily locate and apply the correct accounting and financial reporting provisions, which improves the consistency with which such provisions are applied. The comparability of financial statements also will improve as a result of this Statement. Better consistency and comparability improve the usefulness of information for users of state and local government financial statements.
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SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2022/23:
GASB 91 – Conduit Debt Obligations
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 extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.
A conduit debt obligation is defined as a debt instrument having all of the following characteristics:
There are at least three parties involved:
(1) an issuer
(2) a third‐party obligor, and
(3) a debt holder or a debt trustee.
The issuer and the third‐party obligor are not within the same financial reporting entity. The debt obligation is not a parity bond of the issuer, nor is it cross‐collateralized with other debt of the issuer.
The third‐party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt issuance.
The third‐party obligor, not the issuer, is primarily obligated for the payment of all amounts associated with the debt obligation (debt service payments).
All conduit debt obligations involve the issuer making a limited commitment. Some issuers extend additional commitments or voluntary commitments to support debt service in the event the third party is, or will be, unable to do so.
An issuer should not recognize a conduit debt obligation as a liability. However, an issuer should recognize a liability associated with an additional commitment or a voluntary commitment to support debt service if certain recognition criteria are met. As long as a conduit debt obligation is outstanding, an issuer that has made an additional commitment should evaluate at least annually whether those criteria are met. An issuer that has made only a limited commitment should evaluate whether those criteria are met when an event occurs that causes the issuer to reevaluate its willingness or ability to support the obligor’s debt service through a voluntary commitment.
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SCHEDULE OF OTHER MATTERS
GASB 91 – Conduit Debt Obligations (Continued)
This Statement also addresses arrangements—often characterized as leases—that are associated with conduit debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a conduit debt obligation and used by third‐party obligors in the course of their activities.
Payments from third‐party obligors are intended to cover and coincide with debt service payments.
During those arrangements, issuers retain the titles to the capital assets. Those titles may or may not pass to the obligors at the end of the arrangements.
Issuers should not report those arrangements as leases, nor should they recognize a liability for the related conduit debt obligations or a receivable for the payments related to those arrangements. In addition, the following provisions apply:
If the title passes to the third‐party obligor at the end of the arrangement, an issuer should not recognize a capital asset.
If the title does not pass to the third‐party obligor and the third party has exclusive use of the entire capital asset during the arrangement, the issuer should not recognize a capital asset until the arrangement ends.
If the title does not pass to the third‐party obligor and the third party has exclusive use of only portions of the capital asset during the arrangement, the issuer, at the inception of the arrangement, should recognize the entire capital asset and a deferred inflow of resources. The deferred inflow of resources should be reduced, and an inflow recognized, in a systematic and rational manner over the term of the arrangement.
This Statement requires issuers to disclose general information about their conduit debt obligations, organized by type of commitment, including the aggregate outstanding principal amount of the issuers’ conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities related to supporting the debt service of conduit debt obligations also should disclose information about the amount recognized and how the liabilities changed during the reporting period.
How the Changes in this Statement will Improve Financial Reporting The requirements of this Statement will improve financial reporting by eliminating the existing option for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The clarified definition will resolve stakeholders’ uncertainty as to whether a given financing is, in fact, a conduit debt obligation. Requiring issuers to recognize liabilities associated with additional commitments extended by issuers and to recognize assets and deferred inflows of resources related to certain arrangements associated with conduit debt obligations also will eliminate diversity, thereby improving comparability in reporting by issuers. Revised disclosure requirements will provide financial statement users with better information regarding the commitments issuers extend and the likelihood that they will fulfill those commitments. That information will inform users of the potential impact of such commitments on the financial resources of issuers and help users assess issuers’ roles in conduit debt obligations.
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SCHEDULE OF OTHER MATTERS
GASB 94 – Public‐Private and Public‐Public Partnerships and Availability Payment Arrangements The primary objective of this Statement is to improve financial reporting by addressing issues related to public‐private and public‐public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange‐like transaction. Some PPPs meet the definition of a service concession arrangement (SCA), which the Board defines in this Statement as a PPP in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement.
This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). As defined in this Statement, an APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange‐like transaction.
PPPs – This Statement requires that PPPs that meet the definition of a lease apply the guidance in Statement No. 87, Leases, as amended, if existing assets of the transferor that are not required to be improved by the operator as part of the PPP arrangement are the only underlying PPP assets and the PPP does not meet the definition of an SCA. This Statement provides accounting and financial reporting requirements for all other PPPs: those that either (1) meet the definition of an SCA or (2) are not within the scope of Statement 87, as amended (as clarified by this Statement). The PPP term is defined as the period during which an operator has a noncancelable right to use an underlying PPP asset, plus, if applicable, certain periods if it is reasonably certain, based on all relevant factors, that the transferor or the operator either will exercise an option to extend the PPP or will not exercise an option to terminate the PPP.
A transferor generally should recognize an underlying PPP asset as an asset in financial statements prepared using the economic resources measurement focus. However, in the case of an underlying PPP asset that is not owned by the transferor or is not the underlying asset of an SCA, a transferor should recognize a receivable measured based on the operator’s estimated carrying value of the underlying PPP asset as of the expected date of the transfer in ownership. In addition, a transferor should recognize a receivable for installment payments, if any, to be received from the operator in relation to the PPP.
Measurement of a receivable for installment payments should be at the present value of the payments expected to be received during the PPP term. A transferor also should recognize a deferred inflow of resources for the consideration received or to be received by the transferor as part of the PPP. Revenue should be recognized by a transferor in a systematic and rational manner over the PPP term.
This Statement requires a transferor to recognize a receivable for installment payments and a deferred inflow of resources to account for a PPP in financial statements prepared using the current financial resources measurement focus. Governmental fund revenue would be recognized in a systematic and rational manner over the PPP term.
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GASB 94 – Public‐Private and Public‐Public Partnerships and Availability Payment Arrangements (Continued)
This Statement also provides specific guidance in financial statements prepared using the economic resources measurement focus for a government that is an operator in a PPP that either (1) meets the definition of an SCA or (2) is not within the scope of Statement 87, as amended (as clarified in this Statement). An operator should report an intangible right‐to‐use asset related to an underlying PPP asset that either is owned by the transferor or is the underlying asset of an SCA. Measurement of the right‐to‐use asset should be the amount of consideration to be provided to the transferor, plus any payments made to the transferor at or before the commencement of the PPP term, and certain direct costs. For an underlying PPP asset that is not owned by the transferor and is not the underlying asset of an SCA, an operator should recognize a liability measured based on the estimated carrying value of the underlying PPP asset as of the expected date of the transfer in ownership. In addition, an operator should recognize a liability for installment payments, if any, to be made to the transferor in relation to the PPP. Measurement of a liability for installment payments should be at the present value of the payments expected to be made during the PPP term. An operator also should recognize a deferred outflow of resources for the consideration provided or to be provided to the transferor as part of the PPP. Expense should be recognized by an operator in a systematic and rational manner over the PPP term.
This Statement also requires a government to account for PPP and non‐PPP components of a PPP as separate contracts. If a PPP involves multiple underlying assets, a transferor and an operator in certain cases should account for each underlying PPP asset as a separate PPP. To allocate the contract price to different components, a transferor and an operator should use contract prices for individual components as long as they do not appear to be unreasonable based on professional judgment or use professional judgment to determine their best estimate if there are no stated prices or if stated prices appear to be unreasonable. If determining the best estimate is not practicable, multiple components in a PPP should be accounted for as a single PPP.
This Statement also requires an amendment to a PPP to be considered a PPP modification, unless the operator’s right to use the underlying PPP asset decreases, in which case it should be considered a partial or full PPP termination. A PPP termination should be accounted for by a transferor by reducing, as applicable, any receivable for installment payments or any receivable related to the transfer of ownership of the underlying PPP asset and by reducing the related deferred inflow of resources. An operator should account for a termination by reducing the carrying value of the right‐to‐use asset and, as applicable, any liability for installment payments or liability to transfer ownership of the underlying PPP asset. A PPP modification that does not qualify as a separate PPP should be accounted for by remeasuring PPP assets and liabilities.
APAs – An APA that is related to designing, constructing, and financing a nonfinancial asset in which ownership of the asset transfers by the end of the contract should be accounted for by a government as a financed purchase of the underlying nonfinancial asset. This Statement requires a government that engaged in an APA that contains multiple components to recognize each component as a separate arrangement. An APA that is related to operating or maintaining a nonfinancial asset should be reported by a government as an outflow of resources in the period to which payments relate.
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SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription‐Based Information Technology Arrangements This Statement provides guidance on the accounting and financial reporting for subscription‐based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right‐to‐use subscription asset— an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. To the extent relevant, the standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
A SBITA is defined as a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange‐like transaction.
The subscription term includes the period during which a government has a noncancelable right to use the underlying IT assets. The subscription term also includes periods covered by an option to extend (if it is reasonably certain that the government or SBITA vendor will exercise that option) or to terminate (if it is reasonably certain that the government or SBITA vendor will not exercise that option).
Under this Statement, a government generally should recognize a right‐to‐use subscription asset—an intangible asset—and a corresponding subscription liability. A government should recognize the subscription liability at the commencement of the subscription term, —which is when the subscription asset is placed into service. The subscription liability should be initially measured at the present value of subscription payments expected to be made during the subscription term. Future subscription payments should be discounted using the interest rate the SBITA vendor charges the government, which may be implicit, or the government’s incremental borrowing rate if the interest rate is not readily determinable.
A government should recognize amortization of the discount on the subscription liability as an outflow of resources (for example, interest expense) in subsequent financial reporting periods.
The subscription asset should be initially measured as the sum of (1) the initial subscription liability amount, (2) payments made to the SBITA vendor before commencement of the subscription term, and (3) capitalizable implementation costs, less any incentives received from the SBITA vendor at or before the commencement of the subscription term. A government should recognize amortization of the subscription asset as an outflow of resources over the subscription term.
Activities associated with a SBITA, other than making subscription payments, should be grouped into the following three stages, and their costs should be accounted for accordingly:
Preliminary Project Stage, including activities such as evaluating alternatives, determining needed technology, and selecting a SBITA vendor. Outlays in this stage should be expensed as incurred.
Initial Implementation Stage, including all ancillary charges necessary to place the subscription asset into service. Outlays in this stage generally should be capitalized as an addition to the subscription asset.
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SCHEDULE OF OTHER MATTERS
GASB 96 – Subscription‐Based Information Technology Arrangements (Continued) Operation and Additional Implementation Stage, including activities such as subsequent implementation activities, maintenance, and other activities for a government’s ongoing operations related to a SBITA. Outlays in this stage should be expensed as incurred unless they meet specific capitalization criteria.
In classifying certain outlays into the appropriate stage, the nature of the activity should be the determining factor. Training costs should be expensed as incurred, regardless of the stage in which they are incurred.
If a SBITA contract contains multiple components, a government should account for each component as a separate SBITA or nonsubscription component and allocate the contract price to the different components. If it is not practicable to determine a best estimate for price allocation for some or all components in the contract, a government should account for those components as a single SBITA.
This Statement provides an exception for short‐term SBITAs. Short‐term SBITAs have a maximum possible term under the SBITA contract of 12 months (or less), including any options to extend, regardless of their probability of being exercised. Subscription payments for short‐term SBITAs should be recognized as outflows of resources.
This Statement requires a government to disclose descriptive information about its SBITAs other than short‐term SBITAs, such as the amount of the subscription asset, accumulated amortization, other payments not included in the measurement of a subscription liability, principal and interest requirements for the subscription liability, and other essential information.
How the Changes in this Statement will Improve Financial Reporting The requirements of this Statement will improve financial reporting by establishing a definition for SBITAs and providing uniform guidance for accounting and financial reporting for transactions that meet that definition. That definition and uniform guidance will result in greater consistency in practice.
Establishing the capitalization criteria for implementation costs also will reduce diversity and improve comparability in financial reporting by governments. This Statement also will enhance the relevance and reliability of a government’s financial statements by requiring a government to report a subscription asset and subscription liability for a SBITA and to disclose essential information about the arrangement.
The disclosures will allow users to understand the scale and important aspects of a government’s SBITA activities and evaluate a government’s obligations and assets resulting from SBITAs. 10 413
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EFFECTIVE FISCAL YEAR 2023/24:
GASB 100 – Accounting for Changes and Error Corrections The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. As part of those descriptions, for (1) certain changes in accounting principles and (2) certain changes in accounting estimates that result from a change in measurement methodology, a new principle or methodology should be justified on the basis that it is preferable to the principle or methodology used before the change. That preferability should be based on the qualitative characteristics of financial reporting—understandability, reliability, relevance, timeliness, consistency, and comparability. This Statement also addresses corrections of errors in previously issued financial statements.
This Statement prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections. This Statement requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period. The requirements of this Statement for changes in accounting principles apply to the implementation of a new pronouncement in absence of specific transition provisions in the new pronouncement. This Statement also requires that the aggregate amount of adjustments to and restatements of beginning net position, fund balance, or fund net position, as applicable, be displayed by reporting unit in the financial statements.
This Statement requires disclosure in notes to financial statements of descriptive information about accounting changes and error corrections, such as their nature. In addition, information about the quantitative effects on beginning balances of each accounting change and error correction should be disclosed by reporting unit in a tabular format to reconcile beginning balances as previously reported to beginning balances as restated.
Furthermore, this Statement addresses how information that is affected by a change in accounting principle or error correction should be presented in required supplementary information (RSI) and supplementary information (SI). For periods that are earlier than those included in the basic financial statements, information presented in RSI or SI should be restated for error corrections, if practicable, but not for changes in accounting principles.
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EFFECTIVE FISCAL YEAR 2024/25:
GASB 101 – Compensated Absences
The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures.
Recognition And Measurement
This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. A liability should be recognized for leave that has not been used if (a) the leave is attributable to services already rendered, (b) the leave accumulates, and (c) the leave is more likely than not to be used for time off or otherwise paid in cash or settled through noncash means. Leave is attributable to services already rendered when an employee has performed the services required to earn the leave. Leave that accumulates is carried forward from the reporting period in which it is earned to a future reporting period during which it may be used for time off or otherwise paid or settled. In estimating the leave that is more likely than not to be used or otherwise paid or settled, a government should consider relevant factors such as employment policies related to compensated absences and historical information about the use or payment of compensated absences. However, leave that is more likely than not to be settled through conversion to defined benefit postemployment benefits should not be included in a liability for compensated absences.
This Statement requires that a liability for certain types of compensated absences—including parental leave, military leave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be recognized until the leave is used.
This Statement also establishes guidance for measuring a liability for leave that has not been used, generally using an employee’s pay rate as of the date of the financial statements. A liability for leave that has been used but not yet paid or settled should be measured at the amount of the cash payment or noncash settlement to be made. Certain salary‐related payments that are directly and incrementally associated with payments for leave also should be included in the measurement of the liabilities.
With respect to financial statements prepared using the current financial resources measurement focus, this Statement requires that expenditures be recognized for the amount that normally would be liquidated with expendable available financial resources.
Notes To Financial Statements
This Statement amends the existing requirement to disclose the gross increases and decreases in a liability for compensated absences to allow governments to disclose only the net change in the liability (as long as they identify it as a net change). In addition, governments are no longer required to disclose which governmental funds typically have been used to liquidate the liability for compensated absences. 12 415
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SCHEDULE OF OTHER MATTERS
GASB 101 – Compensated Absences (Continued)
How the Changes in this Statement Will Improve Financial Reporting The unified recognition and measurement model in this Statement will result in a liability for compensated absences that more appropriately reflects when a government incurs an obligation. In addition, the model can be applied consistently to any type of compensated absence and will eliminate potential comparability issues between governments that offer different types of leave.
The model also will result in a more robust estimate of the amount of compensated absences that a government will pay or settle, which will enhance the relevance and reliability of information about the liability for compensated absences.
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MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR SIGNIFICANT DEFICIENCIES
2021‐01 Review Budget Amendments for Proper Recording in the General Ledger The original budget and the final budget data, after all amendments have been approved, should be accurately reflected in the general ledger.
After the general ledger was provided for audit, City staff discovered that the final budget amounts had been overstated by a total of $2.9 million in thirteen general ledger accounts in eleven funds and was understated by $210 thousand in one fund. In addition, for one interfund transfer budget amendment of $400 thousand approved during the year, only the budget for the transfer in for the transaction had been recorded in the general ledger.
As a result, the final budgeted amounts were misstated in the twelve funds noted above.
We understand the majority of the misstatements were due to prior year encumbrances being rolled forward incorrectly, and the transfer out budget was not recorded due to it being related to a new account number that was overlooked.
The City should develop procedures to review the budget data periodically to ensure amendments or encumbrance rollovers are recorded properly.
Current Status:
Implemented
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MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR OTHER MATTERS
2021‐02 Payroll Database Access and Review
To ensure proper and accurate processing of the City’s payroll transactions and to ensure that only authorized changes are made to pay rates and other critical data, payroll database access should be restricted only to employees that are not involved with processing payroll data.
We understand that the City’s third‐party payroll system implemented in fiscal year 2020 includes the control point that certain employees can initiate changes to pay rates, but those changes must be approved by a second employee in the Human Resources department. However, during our interim audit, we noted that the Controller has the ability to update employee pay rates without any secondary approval required by the third‐party payroll system. We also noted that the Controller serves as one of the backup payroll processors in the event the Accounting Technician III is not available.
During our review of the third‐party payroll system access log, we also noted that there were twelve employees listed as “practitioner,” including the Controller, the Information Services Director, three Human Resources personnel, the primary payroll processor and six employees that are not involved with the payroll process. We also noted that the Controller and three of the other employees also had the “manager” user profile in the payroll system, which might be the source/cause of the ability to make changes without approval of a separate employee. We were not able to confirm whether any of these other employees have access to both initiate and approve changes to the pay rates or other critical data in the system.
Since pay rate changes are expected be approved electronically, we understand there is no periodic review of changes made to the payroll database to ensure they were approved. We understand that during the implementation of the third‐party payroll system in fiscal year 2020, the Controller was assigned super‐user rights in the system due to her proficiency with the payroll system, but those rights were not revised or removed after the implementation was complete.
When employees have access to make changes to the payroll system without review and approval by a second person, there is a risk that unauthorized payrate or other changes could be made and employees that are not involved with payroll processing and approval should not be included in the system as “practitioners.”
Although we did select four of the thirty‐nine employees that received pay rate changes during fiscal year 2021 for testing of authorization of those changes and noted no exceptions, the City must develop procedures to ensure that any pay rate or other critical data changes are initiated and approved by two separate employees and that the system will not allow one employee to execute both sides of the transaction.
The City should remove access to the payroll system from staff that are not involved with processing payroll and ensure those with access to change the pay rates can only initiate such changes and the execution of the changes requires the secondary review by a separate person. The City should also establish procedures to have an employee that does not have edit rights in the ADP payroll system to periodically review and approve changes made to the payroll database and that review should be documented in some formal manner, including the date and time of the review. 17 420
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STATUS OF PRIOR YEAR OTHER MATTERS
2021‐02 Payroll Database Access and Review (Continued)
Current Status:
Implemented ‐ Employees who have “practitioner” status in the third‐party payroll system are now limited to employees who are involved with payroll processing and approval. Pay rates changes are initiated by employees who have “manager” status in the third‐party payroll system, which gets reviewed and approved by a “practitioner” in Human Resources. 2021‐03 Review of Payroll Tax Documents Prior to Filing with Federal Agencies Payroll tax documents, such as the quarterly tax returns and annual W‐2’s, should be reviewed for accuracy prior to filing with the State or Federal agencies. If the City relies upon a third party vendor to prepare the documents, those documents should still be reviewed and approved prior to filing.
During the year end audit, we noted that the City had incurred additional costs of approximately $20 thousand in the Human Resources Department from penalties and interest incurred due to errors in quarterly payroll tax reporting, form W‐2 reporting, and other payroll‐related filings.
We understand that the City outsourced the filing of these documents to its third‐party payroll processor, but City staff did not review the documents prior to filing, so the errors went undetected. As a result, the City incurred unnecessary costs in multiple payroll areas.
City staff should develop procedures to review payroll‐related quarterly and annual tax documents prepared by the third party payroll processor prior to filing with the State and federal agencies to ensure reporting is accurate.
Current Status:
Implemented
2018‐01 Finance Personnel Super‐User Rights
Good internal controls are based on segregation of duties, and no one finance employee should have access to an asset and the controlling documentation that supports that asset. Ideally, one employee should retain authorization to use an asset and another employee should maintain the records over that asset. Super‐user rights give an individual the potential to perform both of these functions. Due to the reasons mentioned above, Finance staff should not normally be allowed to have super‐user rights in the City’s general ledger system.
The City’s former Controller left the City in January 2018, however, we reviewed the City’s accounting system access log as of March 2018, and noted that the former Controller had an active status within the Super‐User rights group.
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MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR OTHER MATTERS
2018‐01 Finance Personnel Super‐User Rights (Continued) Although we understand that the former Controller’s access to the City’s network system had been inactivated upon departure, which precluded the individual from access to the City’s general ledger system, when Finance staff have super‐user rights, there is a potential risk of restricting or allowing access to other user’s abilities to access the different modules in the accounting system. In addition, unauthorized transactions could be processed without proper review and approval.
The City should review the necessity of granting Finance employees super‐user rights to the financial system. For any module within the financial system that these employees do not need to edit, their access should be limited to read‐only. In the event the access is deemed to be necessary, the City should implement mitigating controls such as a review and approval of changes made to the system by the applicable employees.
Current Status:
Implemented. “Power User” rights that allows for a wide‐range of access in the accounting system are restricted only to certain Finance staff, including the Finance Director and Finance Managers. There is a higher‐level assignment of “System Administrator” that allows for user creation, password resets, and other high‐level functionalities. The System Administrator role is held within the Information Technology Department, which serves as a compensating control and segregation of duties in the City's general ledger system. 19 422
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CITY OF BELMONT
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED JUNE 30, 2022
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CITY OF BELMONT
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2022
Table of Contents
Page
Required Communications................................................................................................................. 1 Significant Audit Matters.............................................................................................................. 1 Qualitative Aspects of Accounting Practices............................................................................ 1 Difficulties Encountered in Performing the Audit................................................................... 6 Corrected and Uncorrected Misstatements........................................................................... 6 Disagreements with Management.......................................................................................... 6 Management Representations................................................................................................. 6 Management Consultations with Other Independent Accountants...................................... 6 Other Audit Findings or Issues.................................................................................................. 7 Other Matters............................................................................................................................... 7 426
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REQUIRED COMMUNICATIONS
To the City Council of
the City of Belmont, California
We have audited the basic financial statements of the City of Belmont, California, for the year ended June 30, 2022. We did not audit the financial statements of the San Mateo Consolidated Fire Department (SMC Fire) as of and for the year ended June 30, 2021, related to the calculation of the Investment in Joint Venture, which represents 2%, 3%, and 0%, respectively, of the total assets, net position and revenues of the governmental activities. The financial statements of SMC Fire were audited by other auditors, whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for this entity, is based solely on the report of the other auditors.
Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards and Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information orally during our discussion with the Audit Committee on April 19, 2022. Professional standards also require that we communicate to you the following information related to our audit:
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Accounting Policies – Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the year, except as follows:
Accounting for City‐wide administration costs ‐ Prior to fiscal year 2022, the City charged the cost generated from a General Fund service department to another General Fund service department to cover for the cost of City‐wide administration. These charges were reflected as an expenditure in the General Fund with the same amount of corresponding revenue in the General Fund, resulting in no net impact to the General Fund. Beginning in fiscal year 2022, these charges are no longer imposed upon the departments. 1 428
GASB 87 – Leases
The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right‐to‐use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby enhancing the relevance and consistency of information about governments’ leasing activities.
A lease is defined as a contract that conveys control of the right to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange‐like transaction. Examples of nonfinancial assets include buildings, land, vehicles, and equipment. Any contract that meets this definition should be accounted for under the leases guidance, unless specifically excluded in this Statement.
The pronouncement became effective, and as disclosed in Note 9F to the financial statements required a prior period restatement for the cumulative effect on the financial statements. The beginning the balances of leases receivable and deferred inflows of resources related to leases were $8,222,012 as of July 1, 2021 and restated and increased the balances in that amount, and the net effect on beginning net position was zero. See the Leases disclosure in Note 10.
GASB 90 – Majority Equity Interests (an amendment of GASB Statements No. 14 and No. 61) The primary objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. It defines a majority equity interest and specifies that a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special‐purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment (including permanent and term endowments) or permanent fund. Those governments and funds should measure the majority equity interest at fair value.
For all other holdings of a majority equity interest in a legally separate organization, a government should report the legally separate organization as a component unit, and the government or fund that holds the equity interest should report an asset related to the majority equity interest using the equity method. This Statement establishes that ownership of a majority equity interest in a legally separate organization results in the government being financially accountable for the legally separate organization and, therefore, the government should report that organization as a component unit.
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This Statement also requires that a component unit in which a government has a 100 percent equity interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the government acquired a 100 percent equity interest in the component unit. Transactions presented in flows statements of the component unit in that circumstance should include only transactions that occurred subsequent to the acquisition.
The pronouncement became effective, but did not have a material effect on the financial statements.
GASB 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans—An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32
The primary objectives of this Statement are to (1) 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; (2) 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 (3) 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.
The pronouncement became effective, but did not have a material effect on the financial statements. Implementation of the provisions of the pronouncement did require the inclusion of a new note disclosure – see Note 12F to the financial statements.
GASB 98 – The Annual Comprehensive Financial Report
This Statement establishes the term annual comprehensive financial report and its acronym ACFR. That new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments.
The requirements of this Statement are effective for fiscal years ending after December 15, 2021, and the City implemented the provisions of the Statement for the year ended June 30, 2022.
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GASB 99 – Omnibus 2022
The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The Statement contains provisions that are to be implemented in phases over three fiscal years. The practice issues addressed by this Statement that are effective in fiscal year 2022 are as follows:
Extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt Accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP)
Disclosures related to nonmonetary transactions
Pledges of future revenues when resources are not received by the pledging government
Clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, related to the focus of the government‐wide financial statements Terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position
Terminology used in Statement 53 to refer to resource flows statements.
The requirements in paragraphs 26‐32 of the pronouncement became effective, but did not have a material effect on the financial statements.
The following pronouncements became effective, but did not have a material effect on the financial statements:
GASB 89 – Accounting for Interest Cost Incurred before the End of a Construction Period GASB 92 – Omnibus 2020
GASB 93 – Replacement of Interbank Offered Rates
Unusual Transactions, Controversial or Emerging Areas – We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
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Accounting Estimates – Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Estimated Net Pension Liabilities and Pension‐Related Deferred Outflows and Inflows of Resources: Management’s estimate of the net pension liabilities and deferred outflows/inflows of resources are disclosed in Note 11 to the financial statements and are based on accounting valuations determined by the California Public Employees Retirement System, which are based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimates and determined that they are reasonable in relation to the basic financial statements taken as a whole.
Estimated Net OPEB Liabilities and OPEB–Related Deferred Outflows and Inflows of Resources:
Management’s estimate of the net OPEB liabilities and deferred outflows/inflows of resources are disclosed in Note 12 to the financial statements and are based on actuarial studies determined by a consultant, which are based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimated Fair Value of Investments: As of June 30, 2022, the City held approximately $117.4 million of cash and investments as measured by fair value as disclosed in Note 3 to the financial statements. Fair value is essentially market pricing in effect as of June 30, 2022. These fair values are not required to be adjusted for changes in general market conditions occurring subsequent to June 30, 2022.
Estimated Investments in Joint Ventures: Management’s estimate of the investments in joint ventures is disclosed in Note 14A to the financial statements and is based on the audited financial statements of the two entities for the prior year fiscal year. We evaluated the key factors and assumptions used to develop the investment in joint venture in determining that it is reasonable in relation to the financial statements taken as a whole.
Estimate of Depreciation: Management’s estimate of the depreciation is based on useful lives determined by management. These lives have been determined by management based on the expected useful life of assets as disclosed in Note 1G to the financial statements. We evaluated the key factors and assumptions used to develop the depreciation estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimate of Compensated Absences: Accrued compensated absences which are comprised of accrued vacation, holiday, and certain other compensating time is estimated using accumulated unpaid leave hours and hourly pay rates in effect at the end of the fiscal year as disclosed in Note 1H to the financial statements. We evaluated the key factors and assumptions used to develop the accrued compensated absences and determined that it is reasonable in relation to the basic financial statements taken as a whole.
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Estimated Claims Liabilities: Management’s estimate of the claims liabilities payable is disclosed in Note 13 to the financial statements and is based on estimates determined by a third party administrator, which are based on the claims experience of the City. We evaluated the key factors and assumptions used to develop the estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Disclosures – The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in a management representation letter dated November 3, 2022.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
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Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the required supplementary information that accompanies and supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information that accompanies the financial statements, but is not required supplementary information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections included as part of the Annual Comprehensive Financial Report, but are not required supplementary information. We did not audit or perform other procedures on this other information, and we do not express an opinion or provide any assurance on them.
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This information is intended solely for the use of City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties.
Pleasant Hill, California
November 3, 2022
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MEMORANDUM
TO: Audit Committee
FROM: Grace Castaneda, Finance Director
SUBJECT: City of Belmont Financial Policies
DATE: November 7, 2022
The City of Belmont has a long history of being a best practice city and, as such, incorporates Best Practices and Advisories issued annually by the Government Finance Officers Association (GFOA) and from other sources. GFOA Best Practices and Advisories are written as a guide, identifying specific policies and procedures contributing to improved government management. They aim to promote and facilitate positive change rather than to codify current accepted practices. These policies are used by staff to identify enhanced techniques and provide information about effective strategies when these topics arise. They are not prescriptive, but are formative.
As part of the City’s annual update, the GFOA Best Practices and Advisories include new or modified recommended practices as they apply to the City. These Best Practices and Advisories can be referenced at www.gfoa.org/best-practices.
Staff would also like to draw the Audit Committee’s attention to the annual budget document, which includes a Financial Policies section (www.belmont.gov/budget). It serves as a central reference point to the most important of the City’s policies, which are critical to the continued financial health of our local government.
By receiving and accepting this report, the Audit Committee recognizes the importance of Best Practices in the design, operation, and administration of the City’s internal control system, and in doing so, discharges its fiduciary duties and responsibilities. It is recommended that the Audit Committee direct the Chair to transmit this action to the City Council as part of its annual report on the audit to City Council. By doing so, the Committee is recommending that the financial policies be accepted by City Council.
Comments and suggestions for additional areas of public finance that could be better served by the development of policies are encouraged.
Feel free to contact me, should you have any questions. 436
STAFF REPORT
Meeting Date: November 22, 2022
Agency: City of Belmont
Staff Contact: Dino Francesconi, Chief Building Official, (650) 595-7450, [email protected]
Agenda Title: 2022 California Building, Residential, Mechanical, Plumbing and Electrical Codes with local Amendments, and the 2022 California Fire Code as Amended by the San Mateo Consolidated Fire Department
Agenda Action: Ordinance
Recommendation
Introduce an ordinance adopting the 2022 California Building Standards Codes with local amendments (First Reading), set a public hearing date for the ordinance for January 10, 2023, and adopt the findings necessary for the local amendments by resolution.
Strategic Focus Area
Not Applicable
Background
On January 1, 2023 the 2022 California Building Standards Code, also known as the California Code of Regulations (CCR) Title 24, will go into effect. These regulations, which include the California Building Code, are applicable to all occupancies, in all cities and counties. Local governments may amend the provisions of the code if findings can be made that due to either climatic, geological, or topographical conditions it is necessary to make such changes. Staff is recommending that the Council adopt the California Building Standards Code and the accompanying amendments and appendices. A companion effort centers on review and adoption of Reach Energy Codes consistent with City Council action taken in June 2022.
Staff will introduce the Reach Energy Code Amendments item at an upcoming Council meeting (within the next 45 days but no later than the January 10, 2023, Council meeting).
Analysis
The City of Belmont is part of the Silicon Valley Uniform Code Adoption and Interpretation Program, which strives to achieve uniformity among the local jurisdictions in the enforcement of the codes. To that end, minimizing the number of amendments to the state codes is the prime goal. The ordinance presented as part of this report attempts to achieve that goal to a large degree; however, there are exceptions. These exceptions are attributable to local conditions that are somewhat unique to cities located on the San Francisco peninsula.
The exceptions are in the form of amendments and appendices, and are summarized below.
1. The San Mateo Consolidated Fire Department is seeking consistency with other local fire departments by amending state codes to better suit the unique environment on the Peninsula. These amendments impact both the fire code and the building code. 437
2022 CBSC Adoption
• Amendments to Chapter 9—FIRE PROTECTION SYSTEMS and Chapter 15—ROOF ASSEMBLIES AND ROOFTOP STRUCTURES of the California BuildingCode Purpose: The Fire Department wishes to amend Chapter 9 of the Building Code to duplicate the proposed amendments to the automatic fire sprinkler sections that are contained in the 2016 California Fire Code. The proposed amendments to Chapter 15 of the Building Code are intended to address Belmont’s particular needs relative to climatic and topographical conditions that would require a higher fire-resistive rating for roof coverings.
2. The state has chosen to not adopt the following code section from the Uniform Plumbing Code (the model code that serves as a basis for the California Plumbing Code). Staff is recommending the adoption of this code section in the best interest of the community. The code section and the purpose for its adoption are as follows:
• Section 609.10 Water Hammer Arrestors of the California Plumbing Code Purpose: The City of Belmont is situated in hilly terrain. Consequently, the water pressure for the community varies depending on the location of a building relative to the adjacent topography and the proximity to the water pumps. Water hammer is a frequent problem that is detrimental to the supply system. The condition is especially acute at quick acting valves. The installation of air chambers has proven ineffectual in mitigating water hammer. Adoption of this entire code section addresses this condition.
3. The state has chosen to not adopt the following appendices from the building codes. Staff is recommending their adoption in the best interest of the community. Those appendices and the purpose for their adoption are as follows:
• Appendix Chapter AH of the CRC—Patio Covers
Purpose: During the summer months, prevailing westerly winds from the Pacific Ocean move through the City of Belmont often in excess of 18 miles per hour. This condition can compromise the outdoor experience, even during periods of warm weather. In order to enjoy the sunshine and views, without the discomfort of the wind, a patio cover is desirable. However, due to the percentage of fenestration, these structures would not meet the requirements of the energy code.
As such a special category, which is not considered conditioned space, is necessary. • Appendix Chapter AK of the CRC—Sound Transmission
Purpose: The topography of the City of Belmont is such that development of tracts of single unit homes will be rare. The City is primarily built-out. Future development is anticipated to include mixed-use occupancies and higher density housing along the transit corridor. Secondary dwelling units will increase in popularity. Sound transmission controls have been excluded in the California Residential Code, although they are included in the California Building Code. The inclusion of 438
2022 CBSC Adoption
this appendix in the CRC will allow enforcement of sound transmission controls in secondary dwelling units and duplexes.
• Appendix Chapter AX of the CRC—Swimming Pools, Spas, and Hot Tubs Purpose: The City of Belmont enjoys a Mediterranean climate with temperatures that can reach 90 degrees Fahrenheit in the summer months. A popular form of outdoor recreation is the use of swimming pools, spas, and hot tubs. The majority of pools in Belmont are located in single unit dwellings. However, the California Residential Code has not adopted the provisions of the Swimming Pool Safety Act, although they have been adopted in the California Building Code. If challenged, this omission makes enforcement difficult to substantiate.
CEQA
Adoption of the ordinance and resolution are exempt from the requirements of the California Environmental Quality Act (CEQA) under Title 14 of the California Code of Regulations, Section 15061(b)(3), in that it is not a Project which has the potential for causing a significant effect on the environment.
Alternatives
1. Direct any questions to staff for additional research and response.
2. Take no action.
Attachments
A. Ordinance Adopting the 2022 California Building, Residential, Mechanical, Plumbing and Electrical Codeswith Local Amendments. Additionally, to Ratify the 2022 California Fire Code as Amended by the San Mateo Consolidated Fire Department.
Fiscal Impact
☒ No Fiscal Impact
☐ Funding Source Confirmed:
Source: Purpose: Public Outreach:
Staff Statutory/Contractual Requirement Posting of Agenda 439
ORDINANCE NO. ______
AN ORDINANCE OF THE CITY OF BELMONT ADOPTING THE 2022 CALIFORNIA
BUILDING, PLUMBING, MECHANICAL, ELECTRICAL, AND RESIDENTIAL CODES
BY REFERENCE AS AMENDED, AND RATIFYING THE SAN MATEO
CONSOLIDATED FIRE DEPARTMENT FIRE CODE ADOPTING AND AMENDING 2022 CALIFORNIA FIRE CODE AND 2021 INTERNATIONAL WILDLAND URBAN
INTERFACE CODE
THE CITY COUNCIL OF THE CITY OF BELMONT DOES ORDAIN AS FOLLOWS:
SECTION 1. REPEALS
All ordinances or parts of ordinances of the City of Belmont that are in conflict with this ordinance are repealed to the extent that they are in conflict with this ordinance.
SECTION 2. DRAFTING SYNTAX
Belmont City Code (BCC) section text is italicized in this ordinance to assist the reader in distinguishing between City of Belmont modifications to the California Building Standards Code and the City Code section text adopting the modifications.
For each section of the California Building Standards Code that is modified in part by the City of Belmont, whole subsections that are not modified are indicated by the subsection number followed by "{text not modified}"with the appropriate acronym for the specific code, which is to be codified as written. Each subsection that is deleted in its entirety by the City of Belmont is indicated by the subsection number followed by "- deleted".
SECTION 3. BCC SECTION 7-22 AMENDED
Belmont City Code Section 7-22 is amended to read as follows:
Sec. 7-22 2022 California Building Code Adopted
The 2022 California Building Code (CBC), California Code of Regulations, Title 24, Part 2, adopting the 2021 International Building Code of the International Code Council with necessary California amendments, is adopted by reference as the Building Code of the City of Belmont, California. A copy of 2022 CBC must be maintained in the Office of the City Clerk.
SECTION 4. BCC SECTION 7-23 AMENDED
Belmont City Code Section 7-23 is amended to read as follows:
Sec. 7-23 2022 CBC Appendix Chapters Adopted
(a) The following Appendix Chapter of the 2022 California Building Code is adopted:
Appendix Chapter I (Patio Covers).
(b) The remaining Appendix Chapters are not adopted unless adopted by a state agency for application to occupancies subject to that agency's jurisdiction. 440
SECTION 5. BCC SECTION 7-24 AMENDED
Belmont City Code Section 7-24 is amended to read as follows:
Sec. 7-24 2022 CBC Chapter 1, Division II Adopted with Amendments (a) Except for the sections set forth in subsection (b), the requirements reproduced in Chapter 1, Division II of the 2022 California Building Code are adopted by reference, and govern the administration of the Belmont Building Code. References to model codes in the adopted sections mean the corresponding California Codes as adopted by the City of Belmont. (b) The following sections of Chapter 1, Division II of the 2022 California Building Code are not adopted: 101.1, 101.2, 101.4.4, 102.1, 102.5, 102.6, 103, 104.8, 114.3, and 114.4.
SECTION 6. BCC SECTION 7-25 AMENDED
Belmont City Code Section 7-25 is amended to read as follows:
Sec. 7-25 Numbering of Amendments to 2022 CBC
The 2022 California Building Code is amended as provided in Sections 7-25.502, 7-25.903, 7-
25.905, 7-25.907, and 7-25.1009. The number to the right of the decimal point in these sections corresponds to the section in the 2022 California Building Code that is amended.
SECTION 7. BCC SECTION 7-25.502 AMENDED
Belmont City Code Section 7-25.501 is amended as follows:
Sec. 7-25.502 Amendment of 2022 CBC Section 502 (Building Address) Section 502 of the 2022 California Building Code is amended as follows:
502.1 Address Identification. New and existing buildings must have approved address numbers, building numbers or approved building identification placed in a position that is plainly legible and visible from the street or road fronting the property. These numbers must contrast with their background. Address numbers must be Arabic numerals or alphabet letters. The numbers must be either internally or externally illuminated in all new construction and in all alterations greater than 50% of the original structure.
Numbers must be as follows:
1. Minimum of ½ inch stroke by 6 inches high.
2. When the structure is 36 to 50 feet from the street or fire district access a minimum of ½ inch stroke by 9 inches high is required.
3. When the structure is more than 50 feet from the street or fire apparatus access, a minimum of 1 inch stroke by 12 inches high is required. 502.1.2 Multi -Tenant Buildings. Numbers or letters must be designated on all occupancies within a building. Size must be ½ inch stroke by 4 inches high and on a 441
contrasting background. Directional address numbers or letters must be provided. The addresses or numbers must be visible from the street posted at a minimum height of 5 feet, 6 inches above the finished floor, must be visible from the street and must be either internally or externally illuminated in all new construction. 502.1.3 Multiple buildings on one site. Where multiple buildings on one property are accessed by the means of a private road, and the buildings cannot be viewed from the public way, a monument sign, or other signs or other approved means must be used to identify the structure. Address identification must be maintained on each of the buildings within the site.
502.1.4 Rear Addressing. When required by the chief, approved numbers or addresses must be placed on all new and existing buildings in such a position as to be plainly visible and legible from the fire apparatus road at the back of a property or where rear parking lots or alleys provide an acceptable vehicular access. Number stroke and size must comply with 502.1.
SECTION 8. BCC SECTION 7-25.901 DELETED
Belmont City Code Section 7-25.901 is repealed. The code publisher is directed to not show the section as reserved.
SECTION 9. BCC SECTION 7-25.903 AMENDED
Belmont City Code Section 7-25.903 is amended as follows:
Sec. 7-25.903 Amendment of 2022 CBC Section 903 (Automatic Sprinkler Systems)
Section 903 of the 2022 California Building Code is amended to read:
903.1 through 903.1.1 {CBC text not modified}
903.2 Where required. Approved automatic sprinkler systems must be installed throughout all new buildings unless the structure does not require a building permit.
Exception: Detached Group U occupancies separated from structures in accordance with Table 705.5 of the California Building Code.
903.2.1 through 903.2.10 - deleted
903.2.11 through 903.2.21 {CBC text not modified}
903.2.22 Existing buildings and structures. Proposed addition, alterations or fire repairs in existing non-sprinklered buildings over a three-year period exceeding 50% of the original gross floor area square footage must require the entire building to be installed with an automatic fire sprinkler system as follows:
1. Any additions that increase the existing gross floor area by more than 50% require the entire building to be installed with an automatic fire sprinkler system. 442
2. Any combination of additions, alterations and/or fire repairs to more than 50% of the existing gross building area requires the entire existing building to be installed with an automatic fire sprinkler system. For purposes of this section, alterations only apply to the building area if they increase the size of the fire area of the room or space. See the Policy Manual for further guidance.
3. Any addition, alteration or repair within a building that contains an automatic fire sprinkler system must have the automatic fire sprinkler system extended or modified to the area of proposed work.
4. Any change in use or occupancy creating a more hazardous fire or life safety condition, as determined by the Fire Code Official requires that an automatic fire sprinkler system be installed. For purposes of this section, the relative hazard category must be in accordance with table 903.2.20 based on table 1011.5 of the International Existing Building Code.
Table 903.2.22
Relative Hazard Occupancy Class
1 (Highest Hazard) H, L
2 I-2, I-2.1, I-3, I-4
3 A, C, E, M, R-1, R-2, R-2.1, R-4
4 B, F-1, M, S-1, R-3, R-3.1
5 (Lowest Hazard) F-2, S-2, U
Exceptions:
1. Seismic or accessibility improvements
2. Any exemption otherwise allowable under the Fire Code, as adopted by the San Mateo Consolidated Fire Department at the discretion of the Fire Marshal.
3. Exterior improvements and work not requiring permits as provided in the Building Code.
4. Detached Group U occupancies or detached carports less than 400 square feet.
5. Work requiring only a mechanical, electrical, plumbing and/or demolition permit.
6. Group R-3.1 occupancies unless already containing a fire sprinkler system. 903.3 through 903.3.1.1.3 {CBC text not modified}
903.3.1.2 NFPA 13 sprinkler systems. Automatic sprinkler systems in Group R occupancies must be installed throughout in accordance with 903.3.1.1. 443
Exception:
R-3 occupancies must have an automatic sprinkler system installed in accordance with NFPA 13D.
903.3.1.2.1 through 903.3.1.2.3 {CBC text not modified} 903.3.1.3 NFPA 13D sprinkler systems. Automatic Sprinkler systems installed in oneand two-family dwellings; Group R-3; and townhouses may be installed throughout in accordance with NFPA 13D as amended in Chapter 35. NFPA 13D sprinkler systems must comply with section 903.4.2 Alarms.
903.3.2 through 903.4.1 {CBC text not modified}
903.4.2 Alarms. One approved audible and visual devices must be connected to every automatic sprinkler system at an approved location. The sprinkler water-flow alarm devices must be activated by waterflow equivalent to the flow of a single sprinkler of the smallest orifice size installed in the system. Where a fire alarm system is installed, actuation of the automatic sprinkler system must actuate the building fire alarm system. 903.4.3 through 903.5 {CBC text not modified}
SECTION 10. BCC SECTION 7-25.905 AMENDED
Belmont City Code Section 7-25.905 is amended as follows:
Sec. 7-25.905 Amendment of 2022 CBC Section 905 (Standpipe Systems) Section 905 of the 2022 California Building Code is amended to read:
905.1 through 905.3 {CBC text not modified}
905.3.1 Height. {CBC text not modified}
1. {CBC text not modified}
2. Buildings that are more than 2 stories in height.
3. {CBC text not modified}
4. {CBC text not modified}
Exceptions: 1 – 6.2 {CBC text not modified}
905.3.2 through 905.11 {CBC text not modified}
SECTION 11. BCC SECTION 7-25.907 AMENDED
Belmont City Code Section 7-25.907 is amended as follows:
444
Sec. 7-25.907 Amendment of 2022 CBC Section 907 (Fire Alarm and Detection Systems)
Section 907 of the 2022 California Building Code is amended to read:
907.1 through 907.1.5 {CBC text not modified}
907.1.6 Fire Alarm Certification. New fire alarm systems must be UL-Certified. A Certificate of Completion and other documentation as listed in NFPA 72 must be provided for all new fire alarm system installations. It is the responsibility of the building owner or owner's representative to obtain and maintain a current and valid Certificate.
The protected premise must be issued a UUFX type certification from Underwriters Laboratories (UL).
907.1.6.1 Posting of Certificate. The UL certificate required in section 907.1.6 must be posted in a durable transparent cover within 3 feet of the fire alarm control panel within 45 days of the final acceptance test/inspection.
907.2 through 907.8 {CBC text not modified}
SECTION 12. BCC SECTION 7-25.1009 AMENDED
Belmont City Code Section 7-25.1009 is amended as follows:
Sec. 7-25.1009 Amendment of 2022 CBC Section 1009 (Accessible Means of Egress)
Section 1009 of the 2022 California Building Code is amended to read:
1009.1 through 1009.3.3 Exception 6 {CBC text not modified} 1009.3.4 Convenience Stair. Convenience stairs in buildings 4 or more stories in height that are not required as exits must be limited to connect only 2 floors. 1009.4 through 1009.12 {CBC text not modified}
SECTION 13. BCC SECTION 7-32 AMENDED
Belmont City Code Section 7-32 is amended to read:
Sec. 7-32 2022 California Residential Code Adopted
The building standards in the 2022 California Residential Code (CRC), California Code of Regulations, Title 24, Part 2.5, adopting the 2021 International Residential Code of the International Code Council with necessary California amendments, is adopted by reference as the Residential Code of the City of Belmont, California. A copy of 2022 CRC must be maintained on file in the office of the City Clerk.
445
SECTION 14. BCC SECTION 7-33 AMENDED
Belmont City Code Section 7-33 is amended to read as follows:
Sec. 7-33 2022 CRC Appendix Chapters Adopted
(a) The following Appendix Chapters of the 2022 California Residential Code are adopted:
Appendix Chapters AK (Sound Transmission) and AX (Swimming Pool Safety Act). (b) The remaining Appendix Chapters are not adopted unless adopted by a state agency for application to occupancies subject to that agency's jurisdiction.
SECTION 15. BCC SECTION 7-34 AMENDED
Belmont City Code Section 7-34 is amended to read as follows:
Sec. 7-34 2022 CRC Chapter 1, Division II Adopted with Amendments (a) Except for the sections set forth in subsection (b), the requirements reproduced in Chapter 1, Division II of the 2022 California Residential Code are adopted by reference, and govern the administration of the Belmont Residential Code. References to model codes in the adopted sections mean the corresponding California Codes as adopted by the City of Belmont. (b) The following sections of Chapter 1, Division II of the 2022 California Residential Code are not adopted: R101, R102.1, R102.5, R102.6, R102.7, R102.7.1, R103, R104.8, R104.8.1, R112.3., R112.4, and R113.3.
SECTION 16. BCC SECTION 7-35 AMENDED
Belmont City Code Section 7-35 is amended to read:
Sec. 7-35 Numbering of Amendments to 2022 CRC
The 2022 California Residential Code is amended as provided in Sections 7-35.R313, 7-
35.R319, and 7-35.R902. The number to the right of the decimal point in these sections corresponds to the section in the 2022 California Residential Code that is amended.
SECTION 17. BCC SECTION 7-35.R313 AMENDED
Belmont City Code Section 7-35.R313 is amended to read:
Sec. 7-35.R313 Amendment of 2022 CRC Section R313 (Automatic Fire Sprinkler Systems)
Section R313 of the 2022 California Residential Code is amended to read:
R313.1 Townhouse and one- and two family dwelling automatic fire sprinkler systems. An automatic residential fire sprinkler system (ARFS) must be installed in townhouses, one-family and two-family dwellings throughout the entire building or structure as follows:
446
1. In new unit construction.
2. When additions, alterations or repairs are made to an existing building or structure.
3. When any change in use or occupancy occurs creates a more hazardous fire/life safety condition as determined by the Fire Code Official Exceptions:
1. In an existing building or structure without an ARFS, additions, alterations, and repairs that when combined over a three year period total 50% or less the original floor area. For purposes of this exception, only alterations that increase the size of the fire area of the room or space are counted. See the San Mateo Consolidated Fire Department Fire Policy Manual for further guidance.
2. Seismic or accessibility improvements;
3. Any exemption required by law or otherwise allowable under the Fire Code as determined by the Code Official.
4. Exterior improvements and work not requiring permits as provided in the Building Code.
5. Detached Group U occupancies or detached carports less than 400 square feet.
6. Work requiring only a mechanical, electrical, plumbing and/or demolition permit.
7. Group R-3.1 occupancies unless already containing a fire sprinkler system.
8. An accessory dwelling unit to a single- or two family dwelling provided all of the following are met:
8.1 The unit meets the definition of Accessory Dwelling Unit in Government Code Section 65852.2
8.2 The existing primary residence does not have automatic fire sprinklers.
8.3 The detached unit does not exceed 1,200 square feet.
8.4 The unit is on the same lot as the primary residence.
R313.1.1 NFPA 13D sprinkler systems. Automatic Sprinkler systems installed in oneand two-family dwellings; Group R-3; and townhouses may be installed throughout in accordance with NFPA 13D as amended in Chapter 44. NFPA 13D sprinkler systems must comply with section R313.1.2 Alarms.
R313.1.2 Alarms. One approved audible and visual devices must be connected to every automatic sprinkler system at an approved location. The sprinkler water-flow alarm 447
devices must be activated by waterflow equivalent to the flow of a single sprinkler of the smallest orifice size installed in the system. Where a fire alarm system is installed, actuation of the automatic sprinkler system must actuate the building fire alarm system.
R313.2 –R313.2.1 deleted.
R313.3 through R313.3.8.2 {CRC text not modified}
SECTION 18. BCC SECTION 7-35.R319 AMENDED
Belmont City Code Section 7-35.R319 is amended to read:
Sec. 7-35.R319 Amendment to 2022 CRC Section R313 (Site Address) Section R319 of the 2022 California Residential Code is amended to read:
SECTION R319
SITE ADDRESS
R319.1 Address identification. New and existing buildings must have approved address numbers, building numbers or approved building identification placed in a position that is plainly legible and visible from the street or road fronting the property. These numbers must contrast with their background. Address numbers must be Arabic numerals or alphabet letters. The numbers must be either internally or externally illuminated in all new construction and in all alterations greater than 50% of the original structure.
Numbers must be as follows:
1. Minimum of ½ inch stroke by 6 inches high.
2. When the structure is 36 to 50 feet from the street or fire department access a minimum ½ inch stroke by 9 inches high is required.
3. When the structure is more than 50 feet from the street or fire apparatus access, a minimum of 1 inch stroke by 12 inches high is required.
R319.1.1 Multi-tenant buildings. Numbers or letters must be designated on all occupancies within a building. Size must be ½ inch stroke by 4 inches high and on a contrasting background. Directional address numbers or letters must be provided. The addresses or numbers must be visible from the street posted at a minimum height of 5 feet, 6 inches above the finished floor, must be visible from the street and must be either internally or externally illuminated in all new construction.
R319.1.2 Multiple buildings on one site. Where multiple buildings on one property are accessed by the means of a private road, and the buildings cannot be viewed from the public way, a monument sign, or other signs or other approved means must be used to identify the structure. Address identification must be maintained on each of the buildings within the site.
R319.1.3 Rear addressing. When required by the chief, approved numbers or addresses must be placed on all new and existing buildings in such a position as to be plainly visible 448
and legible from the fire apparatus road at the back of a property or where rear parking lots or alleys provide an acceptable vehicular access. Number stroke and size must comply with CBC 505.1.
SECTION 19. BCC SECTION 7-35.R902 AMENDED
Belmont City Code Section 7-35.R902 is amended to read as follows:
Sec. 7-35. R902 Amendment to 2022 CRC Section R902 (Fire Classification) Section R902 of the 2022 California Residential Code is amended to read:
R902.1 through R902.l.1 {CRC text not modified}
R902.1.2 Roof coverings in all other areas. The entire roof covering of every existing structure where more than 50 percent of the total roof area is replaced within any oneyear period, the entire roof covering of every new structure, and any roof covering applied in the alteration, repair or replacement of the roof of every existing structure, must be a fire-retardant roof covering that is at least Class B.
R902.2.1.3 through R902.4 {CRC text not modified}
SECTION 20. BCC SECTION 7-42 AMENDED
Belmont City Code Section 7-42 is amended to read as follows:
Sec. 7-42 2022 California Electrical Code Adopted
The building standards in the 2022 California Electrical Code (CEC), California Code of Regulations, Title 24, Part 3, adopting the 2020 National Electrical Code of the National Fire Protection Associations with necessary California amendments, is adopted by reference as the Electrical Code of the City of Belmont, California. A copy of 2022 CEC must be maintained on file in the office of the City Clerk.
SECTION 21. BCC SECTION 7-43 AMENDED
Belmont City Code Section 7-43 is amended to read as follows:
Sec. 7-43 Administrative Provisions
The administrative provisions in 2022 California Building Code, Chapter 1, Division II as adopted and amended by Section 7-24, govern the administration of the Belmont Electrical Code.
SECTION 22. BCC SECTION 7-52 AMENDED
Belmont City Code Section 7-52 is amended to read as follows:
Sec. 7-52 2022 California Mechanical Code Adopted
The building standards in the 2022 California Mechanical Code (CMC), California Code of 449
Regulations, Title 24, Part 4, adopting the 2021 Uniform Mechanical Code of the International Association of Plumbing and Mechanical Officials with necessary California amendments, is adopted by reference as the Mechanical Code of the City of Belmont, California. A copy of 2022 CMC will be maintained on file in the office of the City Clerk.
SECTION 23. BCC SECTION 7-53 AMENDED
Belmont City Code Section 7-53 is amended to read as follows:
Sec. 7-53 2022 CMC Appendix Chapters Adopted
(a) The following Appendix Chapters of the 2022 California Mechanical Code are adopted:
(none).
(b) The remaining Appendix Chapters are not adopted unless adopted by a state agency for application to occupancies subject to that agency's jurisdiction.
SECTION 24. BCC SECTION 7-54 AMENDED
Belmont City Code Section 7-54 is amended to read as follows:
Sec. 7-54 2022 CMC Chapter 1, Division II Adopted with Amendments (a) Except for the sections set forth in subsection (b), the requirements reproduced in Chapter 1, Division II of the 2022 California Mechanical Code are adopted by reference, and govern the administration of the Belmont Mechanical Code. References to model codes in the adopted sections mean the corresponding California Codes as adopted by the City of Belmont. (b) The following sections of Chapter 1, Division II of the 2022 California Mechanical Code are not adopted unless adopted by a state agency: 101, 102.1, 103.2, and 106.3.
SECTION 25. BCC SECTION 7-55 AMENDED
Belmont City Code Section 7-55 is amended to read:
Sec. 7-55 Numbering of Amendments to 2022 CMC
The 2022 California Mechanical Code is amended as provided in Section 7-55.T104.5. The number to the right of the decimal point in these sections corresponds to the section in the 2022 California Mechanical Code that is amended.
SECTION 26. BCC SECTION 7-55.T104.5 AMENDED
Belmont City Code Section 7-55.T104.5 is amend to read:
Sec. 7-55.T104.5 Amendment of 2022 CMC Table 104.5 (Mechanical Permit Fees)
Table 104.5 of the 2022 California Mechanical Code is amended to read:
Table 104.5. Mechanical permit fees are as set forth on the City's Master Fee Schedule. 450
SECTION 27. BCC SECTION 7-62 AMENDED
Belmont City Code Section 7-62 is amended to read as follows:
Sec. 7-62 2022 California Plumbing Code Adopted
The building standards in the 2022 California Plumbing Code (CPC), California Code of Regulations, Title 24, Part 5, adopting the 2021 Uniform Plumbing Code of the International Association of Plumbing and Mechanical Officials with necessary California amendments, is adopted by reference as the Plumbing Code of the City of Belmont, California. A copy of 2022 CPC must be maintained on file in the office of the City Clerk.
SECTION 28. BCC SECTION 7-63 AMENDED
Belmont City Code Section 7-63 is amended to read as follows:
Sec. 7-63 2022 CPC Appendix Chapters Adopted
(a) The following Appendix Chapters of the 2022 California Plumbing Code are adopted:
(none).
(b) The remaining Appendix Chapters are not adopted unless adopted by a state agency for application to occupancies subject to that agency's jurisdiction.
SECTION 29. BCC SECTION 7-64 AMENDED
Belmont City Code Section 7-64 is amended to read as follows:
Sec. 7-64 2022 CPC Chapter 1, Division II Adopted with Amendments (a) Except for the sections set forth in subsection (b), the requirements reproduced in Chapter 1, Division II of the 2022 California Plumbing Code are adopted by reference, and govern the administration of the Belmont Plumbing Code. References to model codes in the adopted sections mean the corresponding California Codes as adopted by the City of Belmont. (b) The following sections of Chapter 1, Division II of the 2022 California Plumbing Code are not adopted unless adopted by a state agency: 101, 102.1, 103.2, and 106.2 and 106.3.
SECTION 30. BCC SECTION 7-65 AMENDED
Belmont City Code Section 7-65 is amended to read:
Sec. 7-65 Numbering of Amendments to 2022 CPC
The 2022 California Plumbing Code is amended as provided in Sections 7-65.T104.5 and 7-
65.609.10. The number to the right of the decimal point in these sections corresponds to the section in the 2022 California Plumbing Code that is amended.
SECTION 31. BCC SECTION 7-65.T104.5 ADDED
Belmont City Code Section 7-65 T104.5 is added to read:
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Sec. 7-65.T104.5 Amendment of 2022 CPC Table 104.5 (Plumbing Permit Fees) Table 104.5 of the 2022 California Plumbing Code is amended to read:
Table 104.5. Plumbing permit fees are as set forth on the City's Master Fee Schedule.
SECTION 32. BCC SECTION 7-65.609.10.2 AMENDED
Belmont City Code Section 7-65.609.10.2 is amended to read:
Sec. 7-65.609.10.2 Addition of Section 609.11.2 to 2022 CPC Section 609.11.2 is added to the 2022 California Plumbing Code to read:
609.11.2 Section 609.11 applies to all occupancies including HCD 1 and 2.
SECTION 33. BCC SECTION 7-70 AMENDED
Belmont City Code Section 7-70 is amended to read:
Sec. 7-70 Ratification of San Mateo Consolidated Fire Department Fire Code
San Mateo Consolidated Fire Department Ordinance 2022-001 “Establishing The San Mateo Consolidated Fire Department Fire Code By Adopting The 2021 International Fire Code With The 2022 California Fire Code Amendments And the 2021 International Wildland Urban Interface Code with Local Findings And Modification” adopting the 2022 California Fire Code with local amendments and the 2021 International Wildland Urban Interface Code with local amendments as the Fire Code for the joint powers authority is hereby ratified by the City of Belmont in accordance with Health and Safety Code Section 13869.7 and applies throughout the city.
SECTION 34. SEVERABILITY.
If any section, subsection, sentence, clause or phrase of this Ordinance is for any reason held by a court of competent jurisdiction to be invalid, such a decision does not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Belmont declares that it would have passed this Ordinance and each section or subsection, sentence, clause and phrase thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid.
SECTION 35. EFFECTIVE DATE.
This Ordinance takes effect and will be enforced 30 days after its adoption. 452
* * *
The City Council of the City of Belmont, California introduced the foregoing ordinance, on [insert date], 2022 and adopted the ordinance at a regular meeting held on [insert date], 2022 by the following vote:
Ayes:
Noes:
Absent:
Abstain:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM:
City Attorney
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