Agenda — Brawley City Council, October 1, 2024 (part 1 of 2)

Brawley City Council &
Successor Agency to Brawley
Community Redevelopment Agency
Regular Meeting Agenda
October 01, 2024 at 6:00 PM
City Council Chambers
383 Main Street
Brawley, California 92227
This meeting will be broadcast live at https://brawley-ca.granicus.com/ViewPublisher.php?view_id=1 Ramon Castro, Mayor William Smerdon, Acting Deputy City Clerk Donald L. Wharton, Mayor Pro-Tempore William Smerdon, Acting City Treasurer Gil Rebollar, Council Member William S. Smerdon, City Attorney Luke Hamby, Council Member Jimmy Duran, City Manager/
George Nava, Council Member Executive Director

CALL TO ORDER

ROLL CALL

INVOCATION

PLEDGE OF ALLEGIANCE
1 1. APPROVAL OF AGENDA

2. PUBLIC APPEARANCES/COMMENTS (Not to exceed 4 minutes.) This is the time for the public to address the Council on any item not appearing on the agenda that is within the subject matter jurisdiction of the City Council. The Mayor will recognize you and when you come to the microphone, please state your name for the record. You are not allowed to make personal attacks on individuals or make comments which are slanderous, or which may invade an individual’s personal privacy. Please direct your questions and comments to the City Council.

Any member of the public is invited to submit public comments in advance of the meeting to be read at the meeting. Please email your questions to [email protected] or call 760-351-3048 any time before 2:00 PM, October 01, 2024.

a. Public Comments for Items not on the Agenda
b. Proclamation to declare October 6th-12th as Fire Prevention Week in the City of Brawley. Presented by Chief Mike York.
(3 attachments)

3. CONSENT AGENDA
Items are approved by one motion. Council Members or members of the public may request consent items be considered separately at a time determined by the Mayor.

a. Approve City Council Minutes: September 17, 2024

b. Approve Accounts Payable: Sep 07, 2024 to Sep 13, 2024.

4. CITY MANAGER REPORT

5. REGULAR BUSINESS

a. Discussion and potential action to receive and file the Annual Financial Reports for Fiscal Year Ended June 30, 2023. Presented by Silvia Luna, Finance Director. (4 attachments)
b. Potential action to approve a City of Brawley Resolution appointing two (2) new members to the Brawley Community Improvement Committee. Presented by Ramon Castro, Mayor.
(1 attachment)
2 c. Potential action to approve Renewal of Microsoft Enterprise Agreement. Presented by Armando Garibay, IT Director.
(4 attachments)
d. Potential action to approve street closure and waiver of fees for the Saint Margaret Mary’s Kermes event. Presented by Thomas Garcia, Assistant to the City Manager. (2 attachments)
e. Potential action to approve a letter of support request for the IVRMA’s project to encourage responsible waste management practices in the Imperial County Region.

Presented by Thomas Garcia, Assistant to the City Manager. (2 attachments)
f. Potential Action to approve a letter of support for the Fort Yuma Quechan Indian Tribe to obtain national monument protections for their homelands managed by the Bureau of Land Management in Imperial County, California. Presented by Thomas Garcia, Assistant to the City Manager.
(1 attachment)
g. Potential action to Approve Contract for continued Wastewater Pretreatment Support from Ashworth Leininger Group (ALG). Presented by Rom Medina, Public Works Director.
(3 attachments)
h. Potential action to Approve Authorization of Amendment No. 1 to the Agreement with The Holt Group for continued CM Services. Presented by Rom Medina, Public Works Director.
(3 attachments)
i. Potential action to approve rejections of bids to the Traffic Signal Synchronization project, Specification No. 2023-10A. Presented by Rom Medina, Public Works Director.
(1 attachment)
j. Potential action to Authorize Contract Change Order No. 1 to Contract 2023-11A Water Pipeline Installation & Paving Project Improvements. Presented by Rom Medina, Public Works Director.
(2 attachments)

6. INFORMATIONAL REPORTS
a. Monthly Staffing Report for October 1, 2024.

7. CITY COUNCIL MEMBER REPORTS
3 8. CITY ATTORNEY REPORT

9. CLOSED SESSION
a. CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Property: Future Travel America location.

Agency negotiator: City Manager
Negotiating parties: Trifecta Property & Investments LLC Under negotiation: Terms of Development Agreement.

ADJOURNMENT: Regular Meeting October 15, 2024 @ 6:00 PM, 383 Main Street, Brawley, California. Supporting Documents are available for public review in the Office of the City Clerk, 383 Main Street, Brawley, California 92227 - Monday through Friday during Regular Business Hours; Individuals who require special accommodations are requested to give 48 hours prior notice. Contact: Office of the City Clerk @ 760-351-3048.

William Smerdon, Deputy City Clerk
4 City of Brawley
City Council
October 01, 2024
Agenda Item No 2b

STAFF REPORT
To: City Council
From: Mike York, Fire Chief
Prepared by: Mike York, Fire Chief
Subject: Proclamation of Fire Prevention Week in the City of Brawley RECOMMENDATION:

Approve proclamation of October 6th-12th as Fire Prevention week in the City of Brawley and announce the Fire Department's Open House on Saturday, October 12th, 2024.

BACKGROUND INFORMATION:

Each year, the National Fire Protection Agency recommends fire prevention week as an opportunity for Fire Departments to hold public outreach and education to the community served. Fire prevention, safe fire handling procedures and smoke alarm awareness are key topics. Each year, the Brawley Fire Department uses this opportunity to hold its open house as in conjunction; showcasing local safety agencies, their capabilities and providing an enjoyable and fun atmosphere in which to pass on important safety messages to the public.

FISCAL IMPACT:

None-activities are budgeted within the Fire Department's FY24/25 Budget ALTERNATIVES:

None
ATTACHMENTS:

1. Proclamation

2. Open house Flyer
REPORT COORDINATED WITH (other than person preparing the staff report):

Staff, Title or Consultant, Agency
Juan Rodelo, Deputy Chief/Fire Marshal, Brawley Fire Dept.

REPORT APPROVAL(S):

Staff, Title or Consultant, Agency Status – Date of Status Jimmy Duran, City Manager Approved - 9/24/2024
Silvia Luna, Finance Director Approved - 9/24/2024
2b
5 2024 Proclamation
Designating October 6
th – 12th
, 2024, as Fire Prevention Week in the City of Brawley
WHEREAS, the City of Brawley is committed to ensuring the safety and security of all those living in and visiting our Brawley and
WHEREAS, fire is a serious public safety concern both locally and nationally, and homes are the locations where people are at greatest risk from fire and
WHEREAS, home fires killed more than 2,700 people in the United States in 2022, with roughly three out of five fire deaths happen in homes with either no smoke alarms or with no working smoke alarms, and WHEREAS, working smoke alarms cut the risk of dying in reported home fires almost in half, and WHEREAS, residents should install smoke alarms in every sleeping room, outside each separate sleeping area, and on every level of the home, ensuring their smoke alarms meet the needs of all their family members, including those with sensory or physical disabilities, and WHEREAS, residents should test smoke alarms at least once a month, and WHEREAS, residents who have planned and practiced a home fire escape plan are more prepared and will, therefore, be more likely to survive a fire and
WHEREAS, first responders are dedicated to reducing the occurrence of home fires and home fire injuries through prevention and protection education and WHEREAS, residents are responsive to public education measures and can take personalsteps to increase their safety from fire, especially in their homes and WHEREAS, the 2024 Fire Prevention WeekTM theme, “Smoke alarms: Make them work for you.TM,” serves to remind us of the importance of having working smoke alarms in the home.

THEREFORE, I, Ramon Castro, Mayor of the City of Brawley, proclaim October 6–12, 2024, as Fire Prevention Week throughout this Brawley. I urge all the people of the City of Brawley to ensure their homes have working smoke alarms and to support the many public safety activities and efforts of our fire and emergency services.
2b.1
6 Join us forfood. fiat.
games. facepainting
and morel
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October 12
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2b.2
7 City of Brawley
City Council
Oct 1, 2024
Agenda Item No. 3b.1

STAFF REPORT
To: City Council
From: Silvia Luna, Finance Director
Prepared by: Jesse Sanchez, Sr. Accounting Assistant
Subject: Demand check registers processed from Sep 07, 2024 to Sep 13, 2024 RECOMMENDATION:

Approve demand check registers processed from Sep 07, 2024 to Sep 13 , 2024.

BACKGROUND INFORMATION:

Routine bills and payroll processed between Council meetings included the following:

All Bank Codes Check Summary
Utility refunds included the following:
3b
8 FISCAL IMPACT:

No additional fiscal impact to approve these reports.

FISCAL IMPACT:

No additional fiscal impact to approve these reports.

ALTERNATIVES:

None.

ATTACHMENTS:

1. Check Report by Check Number
REPORT COORDINATED WITH (other than person preparing the staff report):

None.

REPORT APPROVAL(S):

Staff, Title or Consultant, Agency Status – Date of Status Jimmy Duran, Chief of Police/Interim City Manager Approved – 9/24/2024 Silvia Luna, Finance Director Approved – 9/20/2024
3b
9 9/19/2024 6:58:32 PM Page 1 of 7
Check Report
City of Brawley By Check Number
Date Range: 09/07/2024 - 09/13/2024
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount Bank Code: US Bank-US Bank Operating Account
02561 Badge Frame Inc. 09/10/2024 EFT 0.00 1,166.99 745 42214 Invoice 09/05/2024 Wall Letters 0.00 1,252.01
42214SalesTax Credit Memo 09/05/2024 Sales tax 0.00 -85.02 02405 Brawley Analytical Inc. 09/10/2024 EFT 0.00 110.00 746 INV-000470 Invoice 09/05/2024 Water Testing/Microbiology SM9223B 0.00 110.00 00530 E&M Electric & Machinery Inc 09/10/2024 EFT 0.00 4,950.00 747 442996 Invoice 09/06/2024 Technical Support Renewal 0.00 4,950.00 02518 KVL Tires Inc 09/10/2024 EFT 0.00 1,099.00 748
24-0078192-114 Invoice 09/05/2024 Tire for Backhoe20 0.00 1,099.00 02346 LexisNexis Risk Solutions FL Inc. 09/10/2024 EFT 0.00 366.67 749 7031539-202403… Invoice 09/05/2024 AVCC Subscription Mar 2024 0.00 366.67 02290 ScribSoft Holdings Inc. 09/10/2024 EFT 0.00 150.00 750 PER00034939 Invoice 09/05/2024 Permitium Handling Fees - July 2024 0.00 150.00 00248 Brenntag Pacific, Inc. 09/13/2024 EFT 0.00 44,731.24 751 BPI450747 Invoice 09/11/2024 OPEN PO FOR CHEMICALS FY 24-25 0.00 7,736.28 BPI452165 Invoice 09/11/2024 OPEN PO FOR CHEMICALS FY 24-25 0.00 7,736.28 BPI453112 Invoice 09/11/2024 OPEN PO FOR CHEMICALS FY 24-25 0.00 15,111.53 BPI453889 Invoice 09/11/2024 OPEN PO FOR CHEMICALS FY 24-25 0.00 6,410.87 BPI455267 Invoice 09/11/2024 OPEN PO FOR CHEMICALS FY 24-25 0.00 7,736.28 00530 E&M Electric & Machinery Inc 09/13/2024 EFT 0.00 12,936.25 752 445750 Invoice 09/06/2024 SCADA upgrade for current and future pro… 0.00 12,936.25 00575 Enterprise FM Trust 09/13/2024 EFT 0.00 24,666.34 753 FBN5118484 Invoice 09/11/2024 R & M Cost/Unit Leases/Maintenance Fee… 0.00 24,666.34 02278 Grady Dexter Dutton 09/13/2024 EFT 0.00 6,845.00 754 24035 Invoice 09/06/2024 Rancho Los Lagos Project Consulting Servi… 0.00 6,845.00 02571 Health and Human Resource Center Inc 09/13/2024 EFT 0.00 329.70 755 E0327450 Invoice 09/11/2024 Employee Assitance Program/Oct 2024 0.00 4.20 E0327451 Invoice 09/11/2024 Employee Assitance Program/Oct 2024 0.00 325.50 02340 Municipal Information Technology Association of California 09/13/2024 EFT 0.00 130.00 756 300005322 Invoice 09/11/2024 MISAC Membership 0.00 130.00 01665 The Bank of New York Mellon Trust CO N.A. 09/13/2024 EFT 0.00 261,387.51 757 8-24 BRAWLEY20…Invoice 09/11/2024 Tax Allocation Refunding Bonds Series 201… 0.00 261,387.51 02542 Tripepi Smith and Associates, Inc. 09/13/2024 EFT 0.00 45,690.00 758 12865 Invoice 09/06/2024 Professional Services -Consulting-Public O… 0.00 45,690.00 00002 360 Business Products 09/09/2024 Regular 0.00 347.16 304079 WO-43980-1 Invoice 09/05/2024 Shipping Labels, Retractable Pens 0.00 181.13 WO-43980-2 Invoice 09/05/2024 Avery Shipping Labels 0.00 53.66 WO-43980-3 Invoice 09/05/2024 Mini Journals 0.00 21.57
WO-44017-1 Invoice 09/05/2024 Label Maker, Folders 0.00 90.80 00050 Alco Target CO. INC. 09/09/2024 Regular 0.00 1,084.64 304080 72442 Invoice 09/05/2024 NRA B-27 Cardboard and B-27 Paper Silho… 0.00 1,084.64 02531 Aldo Ayon Sanchez 09/09/2024 Regular 0.00 1,376.20 304081 3b.1
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9/19/2024 6:58:32 PM Page 2 of 7
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount INV0004852 Invoice 09/04/2024 Travel Adv/Backflow Cert Course & test 0.00 1,376.20 00084 Alsco American Linen Div Steiner Corp 09/09/2024 Regular 0.00 77.14 304082 LYUM1824618 Invoice 09/04/2024 Cleaning Services/Supplies/WTP 0.00 77.14 00211 Biblionix 09/09/2024 Regular 0.00 3,585.00 304083 10321 Invoice 09/03/2024 Apollo Integrated Library System 0.00 3,585.00 00228 Brawley Ace Hardware 09/09/2024 Regular 0.00 2,034.25 304084 J41955/2 Invoice 09/03/2024 Cable ties/Ziploc Bags 0.00 27.12 J41959/2 Invoice 09/03/2024 Ziploc bags 0.00 49.07
J44818/2 Invoice 09/03/2024 Glass Cleaner/Shoptowel 0.00 24.76 J45032/2 Invoice 09/03/2024 Spring Snap/Bolts 0.00 55.99 J45034/2 Invoice 09/03/2024 Power 73 Pool Shock PB1# 0.00 16.14 J45210/2 Invoice 09/03/2024 Lawn&Leaf Bags 0.00 17.23
J45519/2 Invoice 09/03/2024 Buckets/Garden Hose/Brush/Paint mixer... 0.00 243.74 J45526/2 Invoice 09/04/2024 Steel Bulk 0.00 11.43
J45851/2 Invoice 09/03/2024 Vinlyl tube/Towels/Liquid soap/Scent odor… 0.00 157.50 J46006/2 Invoice 09/03/2024 Paint for Exterior 0.00 312.45 J46298/2 Invoice 09/03/2024 Hammer Bit 0.00 9.26
J47139/2 Invoice 09/03/2024 Sol Hats/Lubricant Spray/Lid opener 0.00 24.53 J47253/2 Invoice 09/03/2024 Bottled Water/Correction tape wite-out 0.00 36.00 J48189/2 Invoice 09/03/2024 Sponge Assortment/Liquid Soap 0.00 17.20 J48190/2 Invoice 09/03/2024 Dolly Hardwood 0.00 38.78
J48384/2 Invoice 09/03/2024 Exterior Paint 0.00 156.23
J48777/2 Invoice 09/03/2024 Hose Barb/Tube Braid 0.00 15.90 J48990/2 Invoice 09/03/2024 PVC T connectors/Paint Pail/PVC pipe 3/4 0.00 46.00 J49073/2 Invoice 09/03/2024 Clening cloth/Ziploc Bag/Spray Bottle/Glas… 0.00 96.11 J49863/2 Invoice 09/03/2024 Paint/Grafitti Remover 0.00 136.82 J50044/2 Invoice 09/03/2024 Toilet Repair Kit 0.00 18.31 J50148/2 Invoice 09/03/2024 Brass Keys 0.00 30.95
J50408/2 Invoice 09/03/2024 Alkaline Batterys/Bleach 0.00 73.16 J50435/2 Invoice 09/03/2024 Charger Chords/Gloves/USB-C Cable 0.00 60.29 J50764/2 Invoice 09/03/2024 Bleach Sprayer 0.00 35.70
J51002/2 Invoice 09/03/2024 Steel Brush/Paint rollers/Amp recp. cover/… 0.00 130.95 J51458/2 Invoice 09/03/2024 Steel box Rail/Air Filters 0.00 142.06 J51664/2 Invoice 09/03/2024 Iron Plug/Cored Plug 0.00 19.14 J51849/2 Invoice 09/03/2024 Door lockset with keys 0.00 31.43 **Void** 09/09/2024 Regular 0.00 0.00 304085
00240 Brawley Public Safety Employee 09/09/2024 Regular 0.00 1,850.00 304086 INV0004871 Invoice 09/06/2024 Union Dues 0.00 1,850.00
00243 Brawley Tractor Repair Co 09/09/2024 Regular 0.00 247.42 304087 6574 Invoice 09/04/2024 Brakes adjusted and inspected/Brake Clea… 0.00 247.42 00287 California State Disbursement 09/09/2024 Regular 0.00 861.54 304088 INV0004857 Invoice 09/06/2024 Child Support Deductions 0.00 861.54 00299 Canon Financial Services Inc 09/09/2024 Regular 0.00 651.64 304089 32841428 Invoice 09/05/2024 Copier Usage/May 2024/Library 0.00 4.30 32843965 Invoice 09/05/2024 Copier Usage & Contract/City Hall & Library 0.00 647.34 00322 Cavendish Square 09/09/2024 Regular 0.00 200.47 304090 CAL348225I Invoice 09/05/2024 Cultures of the World Group 8 0.00 200.47 00531 EA Electric 09/09/2024 Regular 0.00 1,245.00 304091 INV208 Invoice 09/04/2024 Replace Chlorine flowmeter & calibrates 0.00 1,245.00 00660 Franchise Tax Boards State Of California 09/09/2024 Regular 0.00 300.00 304092 INV0004872 Invoice 09/06/2024 Earnings Withholding 0.00 300.00 00692 George Mitchell Builders, Inc 09/09/2024 Regular 0.00 7,388.53 304093 3b.1
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Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 10241 Invoice 09/05/2024 Airport Electrical Report - July 2023 0.00 48.00 10242 Invoice 09/05/2024 Airport Elec Rprt & Labor - Aug 2023 0.00 1,796.96 10243 Invoice 09/05/2024 Supplies - Aug 2023 0.00 47.88 10244 Invoice 09/05/2024 Airport Electrical Report - Sep 2023 0.00 48.00 10245 Invoice 09/05/2024 Airport Elec Rprt & Labor - Oct 2023 0.00 1,385.44 10246 Invoice 09/05/2024 Airport Electrical Report - Nov 2023 0.00 48.00 10247 Invoice 09/05/2024 Airport Electrical Report - Dec 2023 0.00 48.00 10248 Invoice 09/05/2024 Airport Electrical Report - Jan 2024 0.00 48.00 10249 Invoice 09/05/2024 Airport Electrical Report - Feb 2024 0.00 48.00 10250 Invoice 09/05/2024 Airport Electrical Report - Mar 2024 0.00 48.00 10251 Invoice 09/05/2024 Airport Electrical Report - Apr 2024 0.00 48.00 10252 Invoice 09/05/2024 Airport Electrical Report - May 2024 0.00 48.00 10253 Invoice 09/05/2024 Airport Elec Rprt June & Labor 0.00 3,597.36 10254 Invoice 09/05/2024 SP Elite Gates, SS Chain 0.00 128.89 00720 GovConnection Inc 09/09/2024 Regular 0.00 16.08 304094 75478268 Invoice 09/05/2024 4-Port USB-A HUB 0.00 16.08 01722 HD Supply, Inc. 09/09/2024 Regular 0.00 2,370.25 304095 INV00425681 Invoice 09/05/2024 Repl Salt Bridge, Hach Free Chlorine SwifT… 0.00 655.80 INV00433185 Invoice 09/05/2024 Differential PH Sensor Digital PEEK, 10m C… 0.00 1,714.45 00799 Imperial County Sheriff Civil Division 09/09/2024 Regular 0.00 50.00 304096 INV0004858 Invoice 09/06/2024 Earnings Withholdings 0.00 50.00 00809 Imperial Printers 09/09/2024 Regular 0.00 555.08 304097 24-2180 Invoice 09/05/2024 Bus. Cards Police Dept 0.00 84.52 24-2182 Invoice 09/05/2024 Bus. Cards Sahagun Castaneda Ayon 0.00 66.81 24-2252 Invoice 09/05/2024 Time Request Forms 0.00 258.28 24-2336 Invoice 09/05/2024 Electronic File for CR Report 0.00 26.94 24-2337 Invoice 07/23/2024 Ftrr Kitchen Pail Flyers 0.00 118.53 02360 Jo-Ann Stores LLC 09/09/2024 Regular 0.00 1,050.00 304098 51078600000618…Invoice 09/05/2024 Creativebug Subscription Renewal Jul-Jun… 0.00 1,050.00 01025 LaBrucherie Irrigation Supp LLC 09/09/2024 Regular 0.00 40.74 304099 OM41453 Invoice 09/05/2024 RainBird 6 Outlet Barb & Irritro Adj Flood … 0.00 40.74 01052 Lexipol, LLC 09/09/2024 Regular 0.00 2,222.43 304100 INVLEX11236507 Invoice 09/05/2024 Annual Fire Manuals 0.00 2,222.43 01891 NV5 Inc 09/09/2024 Regular 0.00 805.00 304101
404533 Invoice 09/04/2024 Springhouse Condominiums/July 2024 0.00 190.00 404539 Invoice 09/04/2024 AP24-01 Brawley Sr Apts/PC-004/July 2024 0.00 615.00 01289 OK Rubber Tires 09/09/2024 Regular 0.00 23.23 304102 102216 Invoice 09/04/2024 Tire Repair/Rubber Valve 0.00 23.23 02044 Robert J. Solis 09/09/2024 Regular 0.00 320.00 304103 07312024 Invoice 09/05/2024 Legal Prof Services- July 2024 0.00 320.00 01569 Shred-It 09/09/2024 Regular 0.00 66.67 304104
8007869241 Invoice 07/25/2024 Steri-Safe Budget Subscription - August 20… 0.00 66.67 01596 Southern California Gas Co 09/09/2024 Regular 0.00 17.52 304105 8-24GasLiftStation Invoice 09/05/2024 Nat Gas Consumption 7/7/24-8/7/24 0.00 17.52 02003 Southwest Equipment And Supply 09/09/2024 Regular 0.00 1,908.15 304106 28937 Invoice 09/05/2024 JCB 926 Fork Lift service 0.00 833.89 28938 Invoice 09/05/2024 Back Hoe Caterpillar 416C service 0.00 941.84 28939 Invoice 09/05/2024 Synthetic Food Grade Grease H-1 0.00 132.42 02566 Sparta 2002 Designs & Promotions Inc 09/09/2024 Regular 0.00 960.75 304107 53417 Invoice 09/05/2024 Ceramic Mugs with BPD Patch Crest 0.00 960.75 3b.1
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Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 01624 Stills Electric 09/09/2024 Regular 0.00 4,031.77 304108 10093 Invoice 07/03/2024 Lions Center Wired Switches & Installed F… 0.00 4,031.77 00496 The Desert Review 09/09/2024 Regular 0.00 1,350.00 304109 3871 Invoice 09/05/2024 3 x 15 Color Print Ad 7/24 & 8/7/24 0.00 1,350.00 01710 Unifirst Corporation 09/09/2024 Regular 0.00 270.88 304110 2340111859 Invoice 09/05/2024 Workshirts, Polos, Jean 0.00 270.88 01717 United Way of Imperial County 09/09/2024 Regular 0.00 5.00 304111 INV0004869 Invoice 09/06/2024 United Way Deductions 0.00 5.00 01732 Valley Pest Services Inc 09/09/2024 Regular 0.00 50.00 304112 14340794 MT Invoice 09/05/2024 Monthly Pest Control/PD 0.00 50.00 01738 Verizon Wireless 09/09/2024 Regular 0.00 1,839.00 304113 9970804759 Invoice 09/05/2024 Cell Phone Service/PD/0707-08062024 0.00 1,441.66 9970804761 Invoice 09/04/2024 Cell Phone Services/FD#2/7/7/24 - 8/6/24 0.00 157.16 9970804764 Invoice 09/05/2024 Cell Phone Center/Parks & Sr Center/0807… 0.00 240.18 01766 W.W. Grainger Inc 09/09/2024 Regular 0.00 1,392.38 304114 9197702799 Invoice 09/05/2024 Electric Drum Pump 0.00 1,392.38 00009 AA Electric 09/13/2024 Regular 0.00 312.62 304116 2046 Invoice 09/11/2024 Service Call/Check AC unit electrical at Lib… 0.00 312.62 00084 Alsco American Linen Div Steiner Corp 09/13/2024 Regular 0.00 637.20 304117 LYUM1823982 Invoice 09/12/2024 Cleaning Service/Supplies/WTP 0.00 131.12 LYUM1824612 Invoice 09/11/2024 Cleaning Services/Supplies/PD 0.00 170.52 LYUM1825490 Invoice 09/12/2024 Cleaning Services/Supplies/WTP 0.00 129.21 LYUM1826917 Invoice 09/11/2024 Cleaning Services/Supplies/WWTP 0.00 129.21 LYUM1827535 Invoice 09/11/2024 Cleaning Services/Supplies/WTP 0.00 77.14 02327 Garda CL West Inc. Lockbox #233209 09/13/2024 Regular 0.00 704.00 304118 10792801 Invoice 09/11/2024 Armored Transport Service/September 20… 0.00 346.46 20615390 Invoice 09/11/2024 Excess Items Shipped/August 2024 0.00 357.54 00805 Imperial Irrigation District 09/13/2024 Regular 0.00 79,464.70 304119 8-24IID8.28.24 Invoice 09/12/2024 Pwr Utility Bills/Various Depts/7/29/24 - 8… 0.00 79,464.70 00807 Imperial Landfill Inc 09/13/2024 Regular 0.00 11,330.15 304120 4136-000021694 Invoice 09/06/2024 Biosolids Removal 0.00 11,330.15 00979 K-C Welding Rentals Inc 09/13/2024 Regular 0.00 188.31 304121 48811 Invoice 09/12/2024 Flat Bar/Dr Socket/DRV/DR F Adapter 0.00 188.31 01026 Landmark Consultants Inc 09/13/2024 Regular 0.00 51,835.00 304122 LE0724-62 Invoice 09/11/2024 Geotechnical for LPP 0.00 3,625.00 LE0824-12 Invoice 09/11/2024 Geotechnical Services for Project 1 0.00 5,905.00 LE0824-13 Invoice 09/11/2024 Geotechnical for LPP 0.00 580.00 LE0824-14 Invoice 09/11/2024 Geotechnical Services 0.00 3,745.00 LE0824-57 Invoice 09/12/2024 Geotechnical Services for Project 1 0.00 9,890.00 LE0824-58 Invoice 09/11/2024 Geotechnical Services 0.00 4,795.00 LE0924-18 Invoice 09/12/2024 Geotechnical Services for Project 1 0.00 8,990.00 LE0924-19 Invoice 09/12/2024 Geotechnical for LPP 0.00 2,710.00 LE0924-20 Invoice 09/11/2024 Geotechnical Services 0.00 5,245.00 LE0924-68 Invoice 09/11/2024 Geotechnical Services for Project 1 0.00 1,240.00 LE0924-69 Invoice 09/12/2024 Geotechnical for LPP 0.00 480.00 LE0924-70 Invoice 09/11/2024 Geotechnical Services 0.00 4,630.00 01840 LC Paving & Sealing Inc 09/13/2024 Regular 0.00 191,155.20 304123 INV0004888 Invoice 09/11/2024 Paving various Streets 0.00 191,155.20 01230 Motion Picture Licensing Corp 09/13/2024 Regular 0.00 289.39 304124 3b.1
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Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 504443677 Invoice 09/12/2024 MPLC Umbrella License 10-1-24 to 9-30-25 0.00 289.39 01891 NV5 Inc 09/13/2024 Regular 0.00 1,781.00 304125
404532 Invoice 09/06/2024 Engineering Services 0.00 1,781.00 01352 Precision Electric Co Inc 09/13/2024 Regular 0.00 1,595.07 304126 0116568-IN Invoice 09/11/2024 WGT2-18-145T/WGT1-18-143T/WGT1/2-… 0.00 1,595.07 01358 Principal Life Insurance Company 09/13/2024 Regular 0.00 3,217.11 304127 9-24LifeInsurance Invoice 09/11/2024 Life Insurance/September 2024 0.00 3,217.11 01562 Sherwin-Wiiliams Company Inc 09/13/2024 Regular 0.00 12,357.08 304128 0685-3 Invoice 09/11/2024 Glass Beads 0.00 1,190.42
2834-5 Invoice 09/06/2024 paint 0.00 10,679.53
2963-2 Invoice 09/11/2024 Paint 0.00 487.13
01565 Shirley Bonillas 09/13/2024 Regular 0.00 107.39 304129 8-24Reimburse9 Invoice 09/11/2024 Painters Tape/Wall Clock/Vacumm Cleaner 0.00 107.39 02078 Southwest Traffic Signal Service Co. Inc 09/13/2024 Regular 0.00 1,936.56 304130 83685 Invoice 09/11/2024 Service Call/Traffic Signal Repairs/August … 0.00 1,936.56 02413 Sylvia Vizcarra 09/13/2024 Regular 0.00 75.00 304131 8-24 Reimburse Invoice 09/11/2024 Breakfast/Lunch/LOTO/Hand Power tools … 0.00 75.00 01668 The Holt Group 09/13/2024 Regular 0.00 49,130.00 304132 24-07-005 Invoice 09/11/2024 Main Street Water Pipeline and Paving Pro… 0.00 49,130.00 01649 T-Mobile USA Inc 09/13/2024 Regular 0.00 3,849.87 304133 8-24T-MobilePD Invoice 09/12/2024 On Call PD Cell Phone Usage/7/21/24- 8/2… 0.00 3,849.87 01710 Unifirst Corporation 09/13/2024 Regular 0.00 317.86 304134 2340106991 Invoice 09/11/2024 Workshirts/Polos/Jean 0.00 317.86 01732 Valley Pest Services Inc 09/13/2024 Regular 0.00 60.00 304135 14341672 MT Invoice 09/11/2024 Monthly Pest Control-Lawn Service 0.00 60.00 01756 Vision Care Center 09/13/2024 Regular 0.00 315.00 304136 8-24Escarcega Invoice 09/11/2024 Safety Glasses/Eduardo Escarcega 0.00 315.00 01772 Waxie Sanitary Supply 09/13/2024 Regular 0.00 299.81 304137 82681377 Invoice 09/11/2024 Soap Dispenser/Mop 0.00 299.81 01907 Western Switches & Controls Inc 09/13/2024 Regular 0.00 5,919.06 304138 174673 Invoice 09/06/2024 1PH 1600 BTU 115V AC Electrical Enclosure 0.00 5,919.06 01802 Xerox Corporation 09/13/2024 Regular 0.00 415.06 304139 022020452 Invoice 09/12/2024 Meter usage/Charges/Admin/7/28/24 - 8/… 0.00 415.06 00269 CalPERS Health Insurance 09/11/2024 Bank Draft 0.00 1,619.30 DFT0003201 100000017647234 Invoice 09/11/2024 Medical Insurance Premium/Non-Pers/Sep… 0.00 1,619.30 00269 CalPERS Health Insurance 09/11/2024 Bank Draft 0.00 157,238.44 DFT0003202 3b.1
14 Check Report Date Range: 09/07/2024 - 09/13/2024
9/19/2024 6:58:32 PM Page 6 of 7
Vendor Number Vendor Name Payment Date Payment Type Discount Amount Payment Amount Number Payable # Payable Type Post Date Payable Description Discount Amount Payable Amount 100000017647231 Invoice 09/11/2024 Medical Insurance Premium/Pers/Sep 2024 0.00 157,238.44 Regular Checks
Manual Checks
Voided Checks
Discount
Payment
Payment Type Count
Bank Code US Bank Summary
Bank Drafts
EFT's
59 0
1 2
14 0.00

0.00 0.00

0.00 0.00
76 0.00
Payment
457,886.36

0.00 0.00
158,857.74
404,558.70
1,021,302.80
Payable
Count
132
0 0
2 20
154
3b.1
15 Check Report Date Range: 09/07/2024 - 09/13/2024
9/19/2024 6:58:32 PM Page 7 of 7
All Bank Codes Check Summary
Payment Type Discount
Payment
Count Payment
Payable
Count
Regular Checks
Manual Checks
Voided Checks
Bank Drafts
EFT's
59 0
1 2
14 0.00

0.00 0.00

0.00 0.00
76 0.00
457,886.36

0.00 0.00
158,857.74
404,558.70
1,021,302.80
132
0 0
2 20
154
Fund Name Period Amount
Fund Summary
999 POOLED CASH 9/2024 1,021,302.80
1,021,302.80
3b.1
16 9/19/2024 7:03:18 PM Monthly Transaction Report Page 1 of 1 City of Brawley
Monthly Transaction Report
Date Range: 9/7/2024 - 10/1/2024
Account Number Name Date
Adj
Type Amount Reference Packet Receipt Type
9/13/2024 Refund 51.38 Check #: 304115 UBPKT07716
Revenue Code Current Plus 1 Plus 2 Plus 3 Plus 4 Balance

PADILLA, JENNIFER
996 51.38 0.00 0.00 0.00 0.00 51.38
Aging Total: 51.38 0.00 0.00 0.00 0.00 51.38
Transaction Grand Total for Period: 51.38
Transaction Type Count Amount
Totals by Transaction Type
Refund 1 51.38
Total for Period: 1 51.38
Transaction Type Count Amount
Totals by Transaction Type and Revenue Code
Revenue Code
Refund
996 - 996 1 51.38
Refund Total: 51.38
Total for Period: 1 51.38
Count Amount
Totals by Revenue Code
Revenue Code
996 - 996 1 51.38
Total for Period: 1 51.38
3b.2
17 City of Brawley
City Council
October 01, 2024
Agenda Item No 5a

STAFF REPORT
To: City Council
From: Silvia Luna, Finance Director
Prepared by: Silvia Luna, Finance Director
Subject: Annual Financial Reports for Fiscal Year Ended June 30, 2023 RECOMMENDATION:

Receive and file the Annual Financial Reports for Fiscal Year Ended June 30, 2023.

BACKGROUND INFORMATION:

At the end of each fiscal year, the City’s financial records are audited by an independent audit firm pursuant to California law. The results (including City background information and detailed financial reports) are compiled and presented in the Annual Financial Report.

In the independent auditors’ report (located at the front of the financial section of the Annual Financial Report), Rogers, Anderson, Malody & Scott LLP, Certified Public Accountants issued an “unmodified” opinion on the City’s financial statements for the year ended June 30, 2023, which is the most favorable conclusion. The independent audit involved examining evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and estimates made by management, and evaluating the overall financial statement presentation for governmental activities, business type activities, each major fund, and the aggregate fund information for the City of Brawley.

The following narratives provide an overview the financial statements and are included in the Annual Financial Report.

1. Transmittal Letter – located at the beginning provides an overview of the City and includes a government profile, local economy summary, long-term financial planning, and a discussion on the future.

2. Independent Auditor’s Report – starting on page 1 provides an overview of the parties responsible for preparing the financial statements along with the audit opinion.

3. Management Discussion and Analysis – starting on page 5 provides a year-over- year comparison of both governmental and business type activities.

4. Notes to the Financial Statements – starting on page 39 include14 notes summarizing significant accounting policies, cash and investments, receivables, payables, long-term debt, retirement obligations, Successor Agency activities, and subsequent events related to the pandemic.

The Independent auditors also completed a separate independent audit that involved examining evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and estimates made by management, and evaluating the overall financial statement 5a
18 presentation for the Transportation Development Act Funds 213, Article 3, Bicycle and Pedestrian and Fund 216, Article 8E Public Transportation. The City is required annually to present Audited Financial Statements to the Imperial County Transportation Commission in order to claim the allocated funds that are used by the City as supplemental funding to invest on bicycle and pedestrian street and transit station improvements
The City required a Federal Single Audit for fiscal year 2022/23 because federally funded expenses exceeded the required threshold of $750,000 during the fiscal year. Rogers, Anderson, Malody & Scott LLP, Certified Public Accountants conclusion was that the City complied in all material respects with the compliance requirements for each of the major federal programs for the year ended June 30, 2023.

FISCAL IMPACT:

None.

ALTERNATIVES:

No alternatives are recommended, the Annual Financial Reports and Single Audit are an annual requirement.

ATTACHMENTS:

1. 2022/23 Annual Financial Report for year ended June 30,2023

2. 2022/23 Annual Financial Report for TDA Funds year ended June 30,2023

3. 2022/23 Single Audit for year ended June 30,2023
REPORT COORDINATED WITH (other than person preparing the staff report):

Staff, Title or Consultant, Agency
, , Roger's Anderson, Malody & Scott LLP,
REPORT APPROVAL(S):

Staff, Title or Consultant, Agency Status – Date of Status Silvia Luna, Finance Director Approved - 9/24/2024
Jimmy Duran, City Manager Approved - 9/24/2024
5a
19 City of Brawley
A n n u a l F i n a n c i a l R e p o r t
Fiscal Year Ended
June 30, 2023
Brawl
i n a n c
5a.1
20 This page intentionally left blank
5a.1
21 City of Brawley
Brawley, California

ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
5a.1
22 This page intentionally left blank
5a.1
23 City of Brawley
Annual Financial Report
For the Fiscal Year Ended June 30, 2023
-iTABLE OF CONTENTS
Page

INTRODUCTORY SECTION
Table of Contents ...................................................................................................................... i Transmittal letter ....................................................................................................................... iii List of Principal Officials ............................................................................................................ vi Organizational Chart ................................................................................................................. vii

FINANCIAL SECTION
Independent Auditor’s Report .............................................................................................. 1 Management’s Discussion and Analysis ............................................................................. 5 Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position ........................................................................................... 20 Statement of Activities ................................................................................................. 21 Fund Financial Statements:

Governmental Funds:

Balance Sheet ....................................................................................................... 23 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position ................................................................................ 25 Statement of Revenues, Expenditures and Changes in Fund Balances ............... 26 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ............ 28 Proprietary Funds:

Statement of Net Position ...................................................................................... 29 Statement of Revenues, Expenses and Changes in Net Position ......................... 31 Statement of Cash Flows ...................................................................................... 33 Fiduciary Funds:

Statement of Fund Net Position ............................................................................ 37 Statement of Changes in Fund Net Position ......................................................... 38 Notes to Basic Financial Statements ................................................................................ 39 5a.1
24 City of Brawley
Annual Financial Report
For the Fiscal Year Ended June 30, 2023
-iiTABLE OF CONTENTS, CONTINUED
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

General Fund .............................................................................................................. 84 Economic & Community Development Special Revenue Fund .................................. 85 American Rescue Plan (ARPA) Special Revenue Fund .............................................. 86 Highway Relinquishment Special Revenue Fund ........................................................ 87 Measure D Special Revenue Fund .............................................................................. 88 Schedule of the City’s Proportionate Share of the Net Pension Liability ..................... 89 Schedule of Pension Contributions ............................................................................. 90 Schedule of Changes in Total OPEB Liability and Related Ratios .............................. 91 Notes to Required Supplementary Information ................................................................. 92 Other Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – Development Impact Capital Projects Fund .............................. 93 Budget and Actual – Streets Capital Projects Fund .................................................... 94 Nonmajor Governmental Funds:

Description ........................................................................................................................ 95 Combining Balance Sheet .................................................................................................. 96 Combining Statement of Revenues, Expenditures and Changes in Fund Balances ........ 99 Internal Service Funds:

Description ....................................................................................................................... 102 Combining Statement of Net Position .............................................................................. 103 Combining Statement of Revenues, Expenses and Changes in Net Position ................. 104 Combining Statement of Cash Flows ................................................................................ 105 5a.1
25 City of Brawley, Finance Dept.
400 Main Street
Brawley, CA 92227
760-344-8941
To the Citizens of Brawley, the Honorable Mayor, and Members of the City Council:

It is with great pleasure that we present the Annual Financial Report for the City of Brawley for the fiscal year ending June 30, 2023. This report, prepared by the Finance Department, serves the interests of City Council Members, citizens, investors, grantors, employees, and other stakeholders invested in the financial well-being of our City.

The Annual Financial Report provides a detailed account of the City’s financial activities. This transmittal letter offers a summary of the City’s finances, services, achievements, and economic outlook. For a more in-depth analysis, please refer to the Management’s Discussion and Analysis (MD&A) section, which follows the independent auditor’s report. The MD&A provides a comprehensive overview of the basic financial statements and complements this summary.

The accuracy and completeness of the financial disclosures are the responsibility of the City of Brawley. We believe the enclosed data is accurate and presented in a manner that fairly reflects the financial position and results of City operations. The report adheres to Generally Accepted Accounting Principles (GAAP) and Governmental Accounting Standards Board (GASB) Statements.

Rogers, Anderson, Malody & Scott LLP, Certified Public Accountants, has provided an unmodified (“clean”) opinion on the City’s financial statements for the year ended June 30, 2023. This represents the highest level of assurance regarding the accuracy and reliability of our financial statements.

Government Profile
Brawley is located in the southeastern part of California, in Imperial County. Despite its desert environment, the area is one of the most fertile agricultural regions in the U.S., thanks to water from the All American Canal and an extensive system of canals.

As of June 30, 2023, the City's population was 27,849.

Incorporated on April 6, 1908, Brawley operates as a general law city under a council/manager form of government. The City is governed by a five-member City Council with members serving four-year terms on a staggered schedule. The City Council elects a Mayor annually, and the City Manager, appointed by the Council, oversees day-to-day operations.

Brawley is a full-service city, providing police, fire, street maintenance, parks, recreation, library, water, sewer, solid waste, airport, housing, planning, building inspection, and general administrative services.
-iii5a.1
26 Local Economy
As of June 2023, Brawley’s unemployment rate was 14.5%, compared to 17.3% in Imperial County and 4.6% statewide. Major industries include service stations, quickservice restaurants, and farm/construction equipment. Key sales tax contributors are Arco AM PM, Jordan Implement, Pilot Travel Center, RDO Water, and Walmart Supercenter.

In 2022/23, the City issued 149 building permits, with 70% allocated to residential developments and the remainder to commercial projects. Upcoming projects include rehabilitating main avenues such as Legion Road, and Main Street, aimed at boosting economic development revitalizing the downtown area. Additionally, development projects under review include hotel expansions, discount retailers, and fast food establishments.

Long-Term Financial Planning
The City is committed to sound long-term financial governance and planning for capital improvements and liabilities. In 2022/23, the General Fund’s balance increased by nearly $3 million compared to the previous year. Savings were achieved through expense management, including vacancies and deferred projects. A portion of these savings has been allocated to Committed Reserves for capital replacements, public safety personnel, and operational carryovers for ongoing projects.

In June 2023, the City Council adopted a budget with a deficit of $188,360. To maintain service levels, the City utilized general fund reserves. The 2023/24 budget ensures continued funding for essential services, including police, fire, and infrastructure maintenance.

Future Outlook
The City of Brawley looks forward to ongoing economic prosperity, efficient resource use, and long-term fiscal stability. We remain dedicated to serving our community effectively and prudently managing our resources.

Acknowledgements
We would like to express our sincere appreciation to the City Council for their steadfast oversight of the City's financial affairs and their prudent guidance on fiscal, economic, and land use policies. Their leadership has been instrumental in ensuring the City's financial health and strategic direction.

We also extend our gratitude to the City staff, with special recognition to the Finance Department, for their dedication to providing accurate financial data and for their -iv5a.1
27 exceptional work in preparing this report. Their continued efforts are crucial in maintaining transparency and accountability in our financial reporting.

Thank you for your commitment to the City’s success and the well-being of our community.

Sincerely,
Tyler Salcido, City Manager Silvia Luna, Finance Director -v5a.1
28 -viCity of Brawley
List of Principal Officers
As of June 30, 2023
City Council
George Nava - Mayor
Ramon Castro – Mayor Pro-Tempore
Donald Wharton - Council Member
Luke Hamby - Council Member
Gilbert Rebollar– Council Member
City Staff
Tyler Salcido - City Manager
William Smerdon - City Attorney/City Treasurer
Thomas Garcia – Assistant to the City Manager
Alma Benavides - City Clerk
Silvia Luna – Interim Finance Director
Jimmy Duran - Chief of Police
Michael York - Fire Chief
Romualdo Medina - Director of Public Works Operations
Vacant - Development Services Director
Shirley Bonillas - Human Resources Administrator
Petra Ortega - Library Manager
Rachel Fonseca - Parks and Recreation Manager
Armando Garibay - Information Technology Director
5a.1
29 -vii5a.1
30 This page intentionally left blank
5a.1
31 FINANCIAL SECTION
5a.1
32 This page intentionally left blank
5a.1
33 -1-
Independent Auditor’s Report
The Members of the City Council of the
City of Brawley
Brawley, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Brawley (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. 5a.1
34 -2-
Other Matters
As discussed in note 1 to the financial statements, in the year ended June 30, 2023, the City adopted new accounting guidance under Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription-Based Information Technology Arrangements. Our opinions are not modified with respect to these matters.

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

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.
 Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.
 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
5a.1
35 -3-
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the required supplementary information, such as management’s discussion and analysis and schedules as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying supplementary information, such as the combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 5a.1
36 -4-
Other Information
Management is responsible for the other information. The other information comprises the introductory section but does not include the financial statements and our auditor's report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated August 23, 2024 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

San Bernardino, California
August 23, 2024
5a.1
37 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-5-
As management of the City of Brawley (City), we offer readers of the City’s financial statements this overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2023. Our intent is to assist the reader of these financial statements in better understanding the impact of financial decisions made by the City. The analysis will focus on changes from prior year to explain the City overall financial condition. Please read this analysis in conjunction with the financial statements, which follow this section.

The City of Brawley, California (the City) is located in the County of Imperial in the southeastern part of the State of California. The City is situated approximately 210 miles southeast of Los Angeles and 30 miles north of the international border with Mexico. Brawley is a general law city incorporated in 1908 as a Council/Manager form of government.

FINANCIAL HIGHLIGHTS
Financial highlights of fiscal year ended June 30, 2023 include the following:

Government-wide:
 The City’s total net position was $128,713,268 as of June 30, 2023. Of this total, $48,511,509 was governmental net position and $80,201,759 was business-type net position.
 Revenues for governmental activities include program revenues of $13,154,726 and general revenues and transfers of $15,216,459, for a total of $28,371,185.  Expenses for governmental activities were $30,536,503.  Business-type program revenues, interest and transfers were $16,324,229 while business-type expenses were $15,178,457.

Fund Level:
 Governmental fund balances increased $3,594,601 in fiscal year 2023 prior to prior period adjustments.
 Governmental fund revenues increased $2,723,836 in fiscal year 2023 due to increased collection of taxes, increased charges for services, and availability of grant reimbursements.
 Governmental fund expenditures increased $5,346,459 in fiscal year 2023 largely due to increased expenditures in public safety, community development, and culture and leisure.

General Fund:
 General Fund revenues increased $2,483,937 in fiscal year 2023.  General Fund expenditures increased $1,570,667 in fiscal year 2023.  General Fund balance increased $ 3,045,115 in fiscal year 2023. 5a.1
38 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-6-

OVERVIEW OF THE ANNUAL FINANCIAL REPORT
This Annual Financial Report is divided into five parts:

1. Government-wide financial statements

2. Fund financial statements

3. Notes to these financial statements

4. Required supplementary information

5. Other supplemental information
Government-wide Financial Statements
The Government-wide financial statements provide a longer-term view of the City’s activities as a whole, and comprise the Statement of Net Position and the Statement of Activities. The Statement of Net Position provides information about the financial position of the City as a whole, including all of its capital assets and long-term liabilities on the full accrual basis, similar to that used by corporations.

The Statement of Activities provides information about all the City’s revenues and all of its expenses, also on the full accrual basis, with the emphasis on measuring net revenues or expenses of each of the City’s programs. The Statement of Activities explains in detail the change in net positions for the fiscal year.

All of the City’s activities are grouped into governmental activities and business-type activities, as explained below. The amounts in the Statement of Net Position and the Statement of Activities are separated into governmental activities and business-type activities in order to provide a summary of these two activities for the City as a whole.

Government-wide financial statements are prepared on the accrual basis, which mean they measure the flow of all economic resources of the City as a whole.

The Statement of Net Position and the Statement of Activities present information about the following:

Governmental Activities – All of the City’s basic services are considered to be governmental activities. These services are supported by the general City revenues such as taxes, and by specific program revenues such as user fees and charges.

Business-type Activities – The City’s enterprise activities of water, and wastewater are reported in this area. Unlike governmental services, these services are supported by charges paid by users based on the amount of service they use. 5a.1
39 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-7-
OVERVIEW OF THE ANNUAL FINANCIAL REPORT (continued)
Fund Financial Statements
The fund financial statements report on the City’s operations in more detail than the Government-wide statements and focus primarily on the short-term activities of the City’s General Fund and other major funds. The fund financial statements measure only current revenues and expenditures and fund balances; they exclude capital assets, long-term debt and other long-term amounts.

The fund financial statements provide detailed information about each of the City’s most significant funds, called major funds. Major funds account for the major financial activities of the City and are presented individually, while the activities of non-major funds are presented in summary, with subordinate schedules presenting the detail for each of these other funds. The concept of major funds, and the determination of which funds are major, was established by the Governmental Accounting Standards Board (GASB) Statement No. 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, with all non-major funds summarized and presented only in a single column.

Subordinate schedules present detail of these non-major funds. Major funds present the major activities of the City for the fiscal year, and may change from year to year as a result of changes in the pattern of the City’s activities.

In the City’s case, there are six major governmental funds in addition to the General Fund - Economics and Community Development, American Rescue Plan Act (ARPA), Highway Relinquishment, Measure D, and Development Impact, and Streets.

The City reports 2 major enterprise funds- Water and Wastewater.

Fund financial statements include governmental and proprietary funds as discussed below.

Governmental fund financial statements are prepared on the modified accrual basis, which means they measure only current financial resources and uses. Capital assets and other longlived assets, along with long-term liabilities, are not presented in the governmental fund financial statements.

Proprietary funds financial statements are prepared on the full accrual basis and includes all of their assets and liabilities, current and long-term.
5a.1
40 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-8-

FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
This analysis focuses on the net positions and changes in net positions of the City as a whole.

Tables 1, 2 and 3 focus on the City’s Governmental Statement of Net Position and Statements of Activities, while Table 4 focuses on the City’s Business-type Statement of Net Position and Statement of Activities.

Table 1
Governmental Governmental
Activities Activities
2023 2022
Assets
Cash and investments $ 43,581,799 $ 37,876,582
Other assets 10,587,516 10,323,352
Capital assets, net 32,524,211 30,628,520
Net pension asset - 1,960,134
Total Assets 86,693,526 80,788,588
Deferred Outflows of Resources
Pension related 12,574,483 5,775,672
OPEB related 674,176 782,903
Total Deferred Outflows of Resources 13,248,659 6,558,575 Liabilities
Other liabilities 16,183,452 13,718,416
Long term liabilities 11,750,960 12,767,721
Net pension liability 13,032,474 -
Total OPEB Liability 3,593,630 4,299,532
Total Liabilities 44,560,516 30,785,669
Deferred Inflows of Resources
Pension related 4,475,513 4,147,103
OPEB related 2,394,647 1,737,564
Total Deferred Inflows of Resources 6,870,160 5,884,667 Net Position
Net investment in capital assets 31,253,193 29,989,414
Restricted 28,872,769 27,841,568
Unrestricted (11,614,453) (7,154,155)
Total Net Position $ 48,511,509 $ 50,676,827
5a.1
41 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-9-
FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE (continued) The City’s governmental net position amounted to $48,511,509 as of June 30, 2023, a decrease of $2,165,318 from the prior fiscal year before prior period adjustments. The City’s net position as of June 30, 2023 comprised the following:

Cash and investments comprised $43,581,799. Substantially all of these amounts were held in short-term investments in government securities, as detailed in Note 3 to the financial statements.

Receivables comprised $2,532,298 of current receivables and loans receivable of $8,019,507 that is due over longer periods of time as explained in the Notes.

Capital assets of $32,524,211 net of depreciation charges, which included all the City’s capital assets used in governmental activities.

Current liabilities, including accounts payable, claims and other amounts due currently, totaled $15,007,879.

Long-term liabilities of $29,552,637 includes the net pension liability but not the current portion of long-term debt.

Net investment in capital assets of $31,253,193, representing the City’s investment in capital assets used in governmental activities, any cash with fiscal agent associated with capital asset related debt net of accumulated depreciation, and amounts borrowed to finance those investments.

Unrestricted net position, the part of net positions that can be used to finance day to day operations without constraints established by debt covenants or other legal requirements or restrictions, was $(11,614,453) as of June 30, 2023 due to the size of the net pension liability. $ 14,001,119
$ 6,315,408
$ 4,863,258
$ 1,976,060 $ 736,554
$ 310,321
Sources of Revenue
Taxes
Charges for services
Capital grants and contributions
Operating grants and
contributions
Other revenue
Use of money and property
5a.1
42 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-10-
As the Sources of Revenue chart above shows, $14,001,119, or 50% of the City’s fiscal year 2023 governmental activities revenue came from taxes, while $6,315,408, or 22% came from charges for services, $4,863,258 or 17%, came from capital grants and contributions, $1,976,060 or 7% came from operating grants and contributions, and the remainder came from a variety of sources including interest revenue.
$ 5,770,127
$ 17,151,577
$ 2,505,628
$ 2,650,076
$ 2,085,331 $ 373,764
Functional Expenses
General government
Public safety
Culture and leisure
Community development
Transportation
Interest on long‐term debt
The Functional Expenses chart above includes only current year expenses; it does not include capital outlays, which are added to the City’s capital assets. As the chart shows, general government was $5,770,127 or 19%, of total governmental expenses, public safety was $17,151,577, or 56%, culture and leisure was $2,505,628, or 8%, community development was $2,650,076, or 9%, and transportation was $2,085,331 or 7%, the remainder is composed of interest expense.
5a.1
43 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-11-
The Statements of Activities presents program revenues and expenses and general revenues in detail. All of these elements in the changes in governmental net position are summarized below.

Table 2
Governmental Governmental
Activities Activities
2023 2022
Expenses
General government $ 5,770,127 $ 4,171,987
Public safety 17,151,577 700,927
Culture and leisure 2,505,628 1,601,000
Community development 2,650,076 619,594
Transportation 2,085,331 1,435,447
Interest on long-term debt 373,764 478,448
Total Expenses 30,536,503 9,007,403
Revenues
Program revenues
Charges for services 6,315,408 5,975,855
Operating grants and contributions 1,976,060 2,812,004
Capital grants and contributions 4,863,258 3,904,909
Total Program Revenues 13,154,726 12,692,768
General revenues and transfers
Taxes 14,001,119 12,582,560
Use of money and property 310,321 (293,473)
Other revenue 736,554 1,204,332
Transfer 168,465 154,110
Total General Revenues and Transfers 15,216,459 13,647,529 Total Revenues and Transfers 28,371,185 26,340,297
Change in Net Position $ (2,165,318) $ 17,332,894
5a.1
44 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-12-
As Table 2 above shows, $13,154,726 or 46%, of the City’s fiscal year 2023 governmental revenue, came from program revenues and $15,216,459, or 54%, came from general revenues such as taxes and interest and transfers. Program revenues were composed of charges for services of $6,315,408, which included permit revenues, fees and charges used to fund expenses incurred in providing services; $1,976,060 of operating grants and contributions, which included gas tax revenues and housing and police grants; and capital grants and contributions of $4,863,258, that consisted mainly of project grants and developer impact fees restricted to capital outlay. During the fiscal year ended 2023, internal charges have been eliminated on the government-wide statements while previously they had not been. This causes a decrease in both revenues and expenditures but has no net effect on the operating results of the City and needs to be considered when comparing revenue or expenditure related operating results when viewed in isolation.

General revenues are not allocable to programs. General revenues are used to pay for the net cost of governmental programs.

Table 3 presents the net expense or revenue of each of the City’s governmental activities, including interest on long-term liabilities. Net expense is defined as total program cost less the revenues generated by those specific activities.

Table 3

GOVERNMENTAL ACTIVITIES
Net Revenue Net Revenue
(Expense) from (Expense) from
Services 2023 Services 2022
General government 661,276 $ 1,207,481 $
Public safety (15,917,521) 40,876
Culture and leisure (2,188,926) (1,297,921)
Community development (2,003,606) 505,439
Transportation 2,440,764 3,707,938
Interest and fiscal charges (373,764) (478,448)
Total $ (17,381,777) $ 3,685,365
5a.1
45 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-13-

BUSINESS-TYPE ACTIVITIES
The Statement of Net Position and Statement of Activities present a summary of the City’s Business-type activities that are composed of the City’s enterprise funds.

Table 4
BUSINESS-TYPE NET POSITION AT JUNE 30, 2023
Business-type Business-type
Activities Activities
2023 2022
Assets
Cash and investments $ 35,170,518 $ 31,230,823
Other assets 2,423,389 1,812,237
Capital assets, net 53,206,856 55,677,595
Net pension asset - 269,064
Total Assets 90,800,763 88,989,719
Deferred Outflows of Resources
OPEB related 1,714,702 792,817
Pension related 63,006 73,167
Total Deferred Outflows of Resources 1,777,708 865,984
Liabilities
Other liabilities 2,236,333 2,081,787
Long term liabilities 7,193,274 7,584,450
Net pension liability 1,777,156 -
Total OPEB Liability 335,854 401,826
Total Liabilities 11,542,617 10,068,063
Deferred Inflows of Resources
OPEB related 610,297 569,265
Pension related 223,798 162,388
Total Deferred Inflows of Resources 834,095 731,653
Net Position
Net investment in capital assets 45,722,206 47,151,511
Unrestricted 34,479,553 31,904,476
Total Net Position $ 80,201,759 $ 79,055,987
5a.1
46 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-14-
BUSINESS-TYPE ACTIVITIES (continued)
The net position of business-type activities increased by $1,145,772 in fiscal year 2023 before prior period adjustments.

Table 5

CHANGE IN BUSINESS-TYPE NET POSITION
Net Revenue Net Revenue
(Expense) from (Expense) from
Services 2023 Services 2022
Water 65,834 $ 2,646,562 $
Wastewater 1,458,107 2,808,240
Solid waste 68,385 76,754
Airport (452,872) (423,862)
Total $ 5,107,694 1,139,454 $

ANALYSIS OF MAJOR FUNDS
Governmental Funds
General Fund
General Fund revenues increased by $2,483,937 during the current fiscal, while expenditures increased in relation to the previous fiscal year. Total revenues exceeded budgeted amounts by $120,891 due to tax revenue being higher than amounts originally anticipated based on prior year operating results. Other revenues related to operating and capital grants were lower than anticipated due directly to the timing and completion of capital improvement projects.

General Fund expenditures were $18,095,688, an increase of $1,694,326 compared to the prior fiscal year. Expenditures were $2,463,216 less than budgeted due to personnel vacancies and capital improvement projects pending completion.

As of June 30, 2023, the General Fund’s fund balance totaled $8,643,324. The unassigned portion of $5,774,177 of the fund balances represents available liquid resources.

Economics and Community Development Special Revenue Fund This fund is utilized to track deferred loans receivable. Funds were not utilized in the fiscal year 2023.
5a.1
47 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-15-
ANALYSIS OF MAJOR FUNDS (continued)
American Rescue Plan Act
This fund accounts for federal funding received as part of the American Rescue Plan Act passed by Congress to provide funding for economic recovery for local governments resulting from economic hardship caused by the coronavirus pandemic. During fiscal year 2023, the City allocated funding primarily to projects with high priority such as the acquisition of equipment and vehicles for Public Safety and City infrastructure.

Highway Relinquishment Fund
This fund accounts for the revenues received by the City under SB325 for public transportation.

Funds are being held for the resurfacing of Main Street scheduled to begin in fiscal year 2023/24.

Measure D Fund
The City is a participant, along with Imperial County and the other cities in the county, in the Imperial County Local Transportation Authority (LTA). The ballot measure (Measure D) increased the sales tax in Imperial County by one-half of one percent (0.5%) for a period of twenty years, to provide funding for transportation improvements. Revenues are allocated to each participating jurisdiction based on a formula contained in the ballot measure. During fiscal year 2023, the City received $1,943,384 in tax proceeds, 3% lower or $59,496 less than the prior year. Measure D funds have been allocated to multi-year street improvement projects.

Development Impact Fees Fund
This fund accounts for fees paid by developers to offset the cost of providing public facilities for police, fire, parks, recreation, library, and other public facilities and street construction. During fiscal year 2023, Development Impact Fees decreased by $379,203 compared to the prior year.

Development Impact Fee expenditures were $61,693, or 47% ($19,602) higher compared to the prior year. The increase is largely due to multi-year Public Safety and Parks projects scheduled for completion during fiscal years 2022/23 and 2023/24.

Streets Fund
This fund accounts for resources set aside for major improvements to local streets and roads.

Revenues and expenditures vary yearly depending on the Capital Improvement Plan adopted for the fiscal year. During fiscal year 2023, the City received $246,615 in grant revenues. The Street fund expenditures were $2,558,544 and were related to the Legion and Western Avenue Street Rehabilitation projects that will be completed in 2023/24. 5a.1
48 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-16-
Proprietary Funds
Water Fund
Operating revenues decreased by $167,424 in fiscal year 2023 and expenses increased by $2,416,227 resulting in a net operating gain of $112,740. This change was largely due salary, and benefits cost increase and the cost of supplies and services. Water usage increased with industrial customers but remained consistent with residents.

The fund’s net position increased by $2,640 to a new total of $28,176,368. Of this amount, $19,115,655 was net investment in capital assets.

Wastewater Fund
Operating revenues increased $208,021 in the fiscal year 2023. Operating expenses increased by $1,565,349. The fund's net position increased by $1,454,849 in fiscal year 2023. There weren’t any significant changes in operations during the current fiscal year.

As of June 30, 2023, the fund’s net position was $46,245,271, of which $21,860,346 was net investment in capital assets, and $24,384,925 was unrestricted.

CAPITAL ASSETS
GASB No. 34 required the City to record all its capital assets including infrastructure, which was not recorded prior to GASB No. 34. Infrastructure includes roads, bridges, signals and similar assets used by the entire population.

The City performs a thorough review and inventory of its capital assets at the end of every fiscal year and records all additions and retirements of capital assets at that time. In addition, all assets are appropriately depreciated at that time.

In fiscal year 2023, the City reported the cost of all its infrastructure assets and computed the amounts of accumulated depreciation for these assets based on their original acquisition dates.

At the end of fiscal year 2023, the cost of infrastructure and other capital assets recorded on the City’s financial statements is as shown in Table 6 on the following page. 5a.1
49 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-17-
CAPITAL ASSETS (continued)
Table 6
Balance as of Balance as of
June 30, 2022 Additions Deletions June 30, 2023
Governmental Activities
Nondepreciable capital assets
Land $ 966,706 $ - $ - $ 966,706
Construction in progress 2,945,178 3,151,013 - 6,096,191 Total nondepreciable capital assets 3,911,884 3,151,013 - 7,062,897 Depreciable capital assets
Equipment 11,090,221 1,854,929 (23,334) 12,921,816
Software - 730,754 - 730,754
Buildings 14,565,604 29,981 14,595,585 -
Improvements other than buildings 18,272,190 - 18,272,190 - Infrastructure 27,181,822 - 27,181,822 -
Total depreciable capital assets 71,109,837 2,615,664 (23,334) 73,702,167 Less accumulated depreciation
Equipment (9,202,043) (425,996) (9,628,039) -
Software - (223,662) - (223,662)
Buildings (6,545,872) (459,885) (7,005,757) -
Improvements other than buildings (10,399,352) (671,390) (11,070,742) - Infrastructure (18,976,688) (1,335,965) (20,312,653) -
Total accumulated depreciation (45,123,955) (3,116,898) (48,240,853) - Net depreciable capital assets 25,985,882 (501,234) (23,334) 25,461,314 Net capital assets $ 29,897,766 $ 2,649,779 $ (23,334) $ 32,524,211 Balance as of Balance as of
June 30, 2022 Additions Deletions June 30, 2023
Business-type Activities
Nondepreciable capital assets
Land $ 37,076 $ - $ - $ 37,076
Construction in progress 701,064 386,408 - 1,087,472
Total nondepreciable capital assets 738,140 386,408 - 1,124,548 Depreciable capital assets
Equipment 3,842,556 110,684 - 3,953,240
Buildings 56,762,536 - 56,762,536 -
Improvements other than buildings 14,743,384 - 14,743,384 - Conveyance systems 36,938,578 - 36,938,578 -
Total depreciable capital assets 112,287,054 110,684 112,397,738 - Less accumulated depreciation
Equipment (3,061,475) (192,434) (3,253,909) -
Buildings (25,999,082) (1,353,470) (27,352,552) -
Improvements other than buildings (7,498,410) (600,059) (8,098,469) - Conveyance systems (20,788,632) (821,868) (21,610,500) - Total accumulated depreciation (57,347,599) (2,967,831) (60,315,430) - Net depreciable capital assets 54,939,455 (2,857,147) 52,082,308 - Net capital assets $ 55,677,595 $ (2,470,739) $ 53,206,856 - $ 5a.1
50 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-18-
CAPITAL ASSETS (continued)
Details on capital assets, current year additions and construction in progress can be found in the Notes.

The City depreciates all its capital assets over their estimated useful lives, as required by GASB No. 34. The purpose of depreciation is to spread the cost of a capital asset over the years of its useful life so that an allocable portion of the cost of the asset is borne by all users. Additional information on depreciable lives may be found in the Notes to the financial statements.

DEBT ADMINISTRATION
The City issued no new bonded debt in fiscal year 2023. The City made all scheduled repayments of existing debt. The City’s debt issues are discussed in detail in Notes of the financial statements. The City's debt balances as of June 30 were as follows:

Table 7

LONG-TERM LIABILITIES
Balance as of Balance as of Due Within
June 30, 2022 Additions Reductions June 30, 2023 One Year Governmental Activities:

Pension obligation bonds $ 12,575,000 $ (750,000) - $ $ 11,825,000 $ 815,000 Financed purchases 182,007 60,083 (72,910) 169,180 58,566 Subscriptions 457,099 - (125,387) 331,712 121,815
Compensated absences 523,065 613,809 (536,233) 600,641 180,192 Total Long-Term Liabilities 13,280,072 $ $ (1,484,530) 1,130,991 $ 12,926,533 $ $ 1,175,573 Business-type Activities:

Water Fund
Debt from direct borrowings
and direct placements:

MFC note payable $ 694,500 $ (272,123) - $ $ 422,377 $ 279,658 Unamortized premium 1,486 - (766) 720 -
Financed purchases 118,323 - (27,909) 90,414 26,727
Wastewater Fund
Debt from direct borrowings
and direct placements:

CSWRCB loan 7,690,296 (734,948) - 6,955,348 742,297
Financed purchases 21,479 - (5,688) 15,791 5,688
Compensated absences 141,476 113,257 (106,357) 148,376 44,513 Total Long-Term Liabilities 8,667,560 $ $ 113,257 $ 7,633,026 (1,147,791) $ $ 1,098,883 5a.1
51 City of Brawley
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
-19-

ECONOMIC CONDITION, OUTLOOK AND ACTIVITY
The City is undergoing a gradual economic recovery, marked by increased economic activity and a growing interest in construction and new home building. Steady property assessments support a stable revenue base while rising sales tax revenue is projected to remain at current levels for the upcoming year, indicating a strong retail environment. Additionally, the extension and modernization of the Utility Users Tax, approved by voters in 2022, continue to provide a stable or enhanced revenue stream.

The City’s financial projections reveal stagnant tax revenues coupled with increasing costs for essential services, resulting in anticipated deficits for the coming years. To address these financial constraints, the City is proposing a general sales tax ballot measure for November 2024. If approved by voters, this measure is expected to enhance and sustain vital services, including public safety, street improvements, and community programs.

The City is dedicated to maintaining a conservative and prudent fiscal approach, ensuring effective resource management and adaptability to future economic conditions.

CONTACTING THE CITY’S FINANCIAL MANAGEMENT
This Annual Financial Report is intended to provide citizens, taxpayers, and creditors with a general overview of the City’s finances. Questions about this report should be directed to the City of Brawley, 383 W. Main Street, Brawley, CA.
5a.1
52 This page intentionally left blank
5a.1
53 City of Brawley
Statement of Net Position
June 30, 2023
The accompanying notes are an integral part of these financial statements. -20-
Governmental Business-type
Activities Activities Total
ASSETS
Current Assets:

Cash and investments $ 43,402,007 $ 35,170,518 $ 78,572,525 Restricted cash and investments with fiscal agent 179,792 - 179,792 Accounts receivable 663,474 1,667,906 2,331,380
Interest receivable 91,247 58,238 149,485
Loans receivable 8,019,507 - 8,019,507
Due from other governments 1,777,577 82,627 1,860,204
Prepaid expenses 35,711 - 35,711
Total current assets 54,169,315 36,979,289 91,148,604
Noncurrent Assets:

Advances to other funds - 614,618 614,618
Capital assets not being depreciated 7,062,897 1,124,548 8,187,445 Capital assets, net of accumulated depreciation 25,461,314 52,082,308 77,543,622 Total noncurrent assets 32,524,211 53,821,474 86,345,685 Total assets 86,693,526 90,800,763 177,494,289

DEFERRED OUTFLOWS OF RESOURCES
Pension related 12,574,483 1,714,702 14,289,185
OPEB related 674,176 63,006 737,182
Total deferred outflows of resources 13,248,659 1,777,708 15,026,367

LIABILITIES
Current Liabilities:

Accounts payable 1,364,479 624,041 1,988,520
Accrued liabilities 102,565 34,217 136,782
Accrued interest payable 13,886 37,681 51,567
Deposits payable 557,123 486,024 1,043,147
Advances from others 12,969,826 12,969,826 -
Total current liabilities 15,007,879 1,181,963 16,189,842 Noncurrent liabilities:

Due within one year 1,175,573 1,054,370 2,229,943
Due in more than one year 11,750,960 6,578,656 18,329,616 Advances from other funds - 614,618 614,618
Net pension liability 13,032,474 1,777,156 14,809,630
Total OPEB liability 3,593,630 335,854 3,929,484
Total noncurrent liabilities 29,552,637 10,360,654 39,913,291 Total liabilities 44,560,516 11,542,617 56,103,133

DEFERRED INFLOWS OF RESOURCES
Pension related 4,475,513 610,297 5,085,810
OPEB related 2,394,647 223,798 2,618,445
Total deferred inflows of resources 6,870,160 834,095 7,704,255

NET POSITION
Net investment in capital assets 31,253,193 45,722,206 76,975,399 Restricted for:

Streets and roads 10,323,152 10,323,152 -
Public safety 193,476 - 193,476
Community development 17,022,990 17,022,990 -
CFD improvements and maintenance 1,333,151 - 1,333,151
Unrestricted (deficit) (11,614,453) 34,479,553 22,865,100 Total net position $ 48,511,509 $ 80,201,759 $ 128,713,268 5a.1
54 City of Brawley
Statement of Activities
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -21-
Program Revenues
Operating Capital
Charges for Contributions Contributions
Functions/Programs Expenses Services and Grants and Grants Governmental Activities:

General government $ 5,770,127 $ 4,293,389 $ 524,772 $ 1,613,242 Public safety 17,151,577 344,281 889,775 -
Culture and leisure 2,505,628 316,702 - -
Community development 2,650,076 416,859 226,294 3,317
Transportation 2,085,331 944,177 335,219 3,246,699
Interest on long-term debt 373,764 - - -
Total governmental activities 30,536,503 6,315,408 1,976,060 4,863,258 Business-type Activities:

Water 7,518,285 7,584,119 - -
Wastewater 5,283,348 6,741,455 - -
Solid waste 1,805,568 1,873,953 - -
Airport 571,256 118,384 - -
Total business-type activities 15,178,457 16,317,911 - - Total primary government $ 45,714,960 $ 22,633,319 $ 1,976,060 $ 4,863,258 General Revenues:

Taxes:

Property taxes
Sales and use
Utility users taxes
Transient lodging taxes
Franchise taxes
Business license taxes
Licenses and permits
Fines and forfeitures
Miscellaneous
Use of money and property
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of fiscal year, as restated
Net position - end of fiscal year
5a.1
55 -22-
Net (Expense) Revenue and Changes in Net Position
Primary Government
Governmental Business-type
Activities Activities Total
$ 661,276 $ - $ 661,276
(15,917,521) (15,917,521) -
(2,188,926) - (2,188,926)
(2,003,606) - (2,003,606)
2,440,764 - 2,440,764
(373,764) - (373,764)
(17,381,777) (17,381,777) -
- 65,834 65,834
- 1,458,107 1,458,107
- 68,385 68,385
- (452,872) (452,872)
- 1,139,454 1,139,454
(17,381,777) 1,139,454 (16,242,323)
5,364,635 - 5,364,635
4,770,324 - 4,770,324
2,657,345 - 2,657,345
484,779 - 484,779
657,498 - 657,498
66,538 - 66,538
55,354 - 55,354
14,012 - 14,012
667,188 42,175 709,363
310,321 132,608 442,929
168,465 (168,465) -
15,216,459 6,318 15,222,777
(2,165,318) 1,145,772 (1,019,546)
50,676,827 79,055,987 129,732,814
$ 48,511,509 $ 80,201,759 $ 128,713,268
5a.1
56 City of Brawley
Balance Sheet
June 30, 2023
The accompanying notes are an integral part of these financial statements. -23-
General
Economic &
Community
Development
American
Rescue Plan
Act (ARPA)
Highway
Relinquishment
ASSETS
Cash and investments 7,169,565 $ 865,194 $ 4,134,301 $ 8,166,774 $ Restricted cash and investments with fiscal agent - 601 - - Interest receivable 5,334 1,874 6,771 14,313
Accounts receivable 357,030 - - -
Due from other governments 1,603,348 171,879 - -
Due from other funds 954,209 - - -
Loans receivable - 7,386,118 - -
Prepaid expenditures 35,711 - - -
Total assets 10,125,197 $ 8,425,666 $ 4,141,072 $ 8,181,087 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 274,306 $ 103 $ 13,719 $ 2,270 $
Accrued liabilities 97,580 - - -
Deposits payable 534,851 - - 22,272
Advances from others - 663,000 4,064,603 7,858,315
Due to other funds - - - -
Total liabilities 906,737 663,103 4,078,322 7,882,857
Deferred inflows of resources:

Unavailable revenue 575,136 169,084 - -
Total deferred inflows of resources 575,136 169,084 - - Fund balances (deficit):

Nonspendable 35,711 - - -
Restricted for:

Streets and roads - - - 298,230
Public safety - - - -
Community development - 7,593,479 62,750 -
CFD improvements and maintenance - - - -
Committed 2,833,436 - - -
Unassigned 5,774,177 - - -
Total fund balances 8,643,324 7,593,479 62,750 298,230
Total liabilities, deferred inflows of
resources, and fund balances $ 10,125,197 $ 8,425,666 $ 4,141,072 $ 8,181,087 5a.1
Special Revenue Funds
57 -24-
Special
Revenue Fund
Measure D
Development
Impact Streets
Nonmajor
Governmental
Funds
Total
Governmental
Funds
$ 9,290,064 7,779,965 $ 673,568 $ 3,921,962 $ 42,001,393 $ - - - 179,191 179,792
40,045 14,335 - 6,274 88,946
- - - 306,444 663,474
- - - - 1,775,227
- - - - 954,209
630,107 - - - 8,016,225
- - - - 35,711
$ 9,960,216 7,794,300 $ 673,568 $ 4,413,871 $ 53,714,977 $ $ 7,064 29,022 $ 944,777 $ 91,854 $ 1,363,115 $
- - - 4,981 102,561
- - - - 557,123
- - - 383,908 12,969,826
- - - 536,436 536,436
7,064 29,022 944,777 1,017,179 15,529,061
- 655,189 - 176,529 1,575,938
- 655,189 - 176,529 1,575,938
- - - - 35,711
7,765,278 - - 2,530,853 10,594,361
- - - 193,476 193,476
- 9,297,963 - 68,798 17,022,990
- - - 1,333,151 1,333,151
- - - - 2,833,436
- - (271,209) (906,115) 4,596,853
7,765,278 9,297,963 (271,209) 3,220,163 36,609,978
$ 7,794,300 $ 9,960,216 $ 673,568 $ 4,413,871 $ 53,714,977 Capital Projects Fund
5a.1
58 This page intentionally left blank
5a.1
59 City of Brawley
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
Governmental Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements. -25-
Fund balances of governmental funds $ 36,609,978
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets net of accumulated depreciation have not been included as financial resources in the governmental funds. Capital assets of the internal service fund are included below ($1,101,838) 31,422,373
In governmental funds, deferred outflows and inflows of resources relating to pensions and OPEB are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows of resources relating to pensions and OPEB are reported.

Pension related deferred outflows 12,574,483
OPEB related deferred outflows 674,176
Pension related deferred inflows (4,475,513)
OPEB related deferred inflows (2,394,647)
Long-term liabilities and assets have not been included in the governmental funds.

Long-term debt (12,325,892)
Total OPEB liability (3,593,630)
Net pension liability (13,032,474)
Compensated absences (600,641)
In governmental funds, interest on long-term debt is not recognized until the period in which it matures and is paid. In government-wide statement of net position, it is recognized in the period that it is incurred. (13,886)
Internal service funds are used by management to charge the costs of certain activities, such as maintenance and risk management, to individual funds. The assets and liabilities of the internal service funds must be added to the statement of net position. 2,091,244 In governmental funds, certain receivables are not available to pay for current period expenditures and, therefore, are offset by unavailable revenue or not recognized as receivables in the fund statements 1,575,938
Net position of governmental activities $ 48,511,509
5a.1
60 City of Brawley
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -26-
General
Economic &
Community
Development
American
Rescue Plan
Act (ARPA)
Highway
Relinquishment

REVENUES
Taxes:

Property 5,104,446 $ - $ - $ - $
Sales and use 4,770,324 - - -
Utility users 2,657,345 - - -
Transient lodging 484,779 - - -
Franchise 657,498 - - -
Business license 66,538 - - -
Licenses and permits 56,071 - - -
Fines and forfeitures 14,803 - - -
Charges for services 5,102,359 - - -
Use of money and property 85,415 107,643 13,548 22,417
Intergovernmental 769,990 3,317 1,613,242 -
Miscellaneous 306,520 - - 304,070
Total revenues 20,076,088 110,960 1,626,790 326,487

EXPENDITURES
Current:

General government 2,803,803 - 29,981 -
Public safety 9,719,622 - - -
Culture and leisure 2,116,210 - - -
Community development 1,439,602 156,541 - -
Public works - - - 116,730
Capital outlay 457,099 - 1,566,871 -
Debt Service:

Principal 922,163 - 16,022 -
Interest 513,374 - 369 -
Total expenditures 17,971,873 156,541 1,613,243 116,730 Excess of revenues over
(under) expenditures 2,104,215 (45,581) 13,547 209,757

OTHER FINANCING SOURCES (USES)
Financed purchase 60,083 - - -
Subscription acquisitions 457,099 - - -
Transfers in 423,718 - - -
Transfers out - - - (547,352)
Total other financing sources (uses) 940,900 - - (547,352) Net change in fund balances 3,045,115 (45,581) 13,547 (337,595) Fund balance - beginning of fiscal year 5,598,209 7,639,060 49,203 635,825 Fund balance - end of fiscal year $ 8,643,324 $ 7,593,479 $ 62,750 $ 298,230 Special Revenue Funds
5a.1
61 -27-
Special
Revenue Fund
Measure D
Development
Impact Streets
Nonmajor
Governmental
Funds
Total
Governmental
Funds
$ - - $ - $ 259,802 $ 5,364,248 $
- - - - 4,770,324
- - - - 2,657,345
- - - - 484,779
- - - - 657,498
- - - - 66,538
- - - - 56,071
- - - - 14,803
1,238,962 - - 5,235 6,346,556
66,656 23,777 - (4,718) 314,738
- 1,943,384 246,615 2,202,775 6,779,323
- - - 67,293 677,883
1,305,618 1,967,161 246,615 2,530,387 28,190,106
- - - - 2,833,784
- - - 259,886 9,979,508
- 2,440 - - 2,118,650
- 32,899 - 43,354 1,672,396
342,074 - 29,340 1,407,089 1,895,233
- 26,354 2,529,204 744,000 5,323,528
- - - 10,112 948,297
- - - 1,731 515,474
342,074 61,693 2,558,544 2,466,172 25,286,870
1,625,087 1,243,925 (2,311,929) 64,215 2,903,236
- - - - 60,083
- - - - 457,099
- - 1,496,296 - 1,920,014
(948,944) - - (249,535) (1,745,831)
(948,944) - 1,496,296 (249,535) 691,365
676,143 1,243,925 (815,633) (185,320) 3,594,601
7,089,135 8,054,038 544,424 3,405,483 33,015,377
$ 7,765,278 $ 9,297,963 $ (271,209) $ 3,220,163 $ 36,609,978 Capital Projects Fund
5a.1
62 This page intentionally left blank
5a.1
63 City of Brawley
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -28-
Net change in fund balances - total governmental funds $ 3,594,601 Amounts reported for governmental activities in the statement of activities differ because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those capital assets are allocated over their estimated useful lives as depreciation expense. This is the amount by which capital asset additions exceeds depreciation in the current period. 2,352,790
Certain revenues are reported in the government-wide statements but not in the governmental funds because they are not available to pay for current expenditures. This is the net change in associated receivables for the current period. 9,246 The issuance of long-term debt provides current financial resources to governmental funds, while repayment of the principal of long-term debt consumes the current financial resources of the governmental funds.

Debt issuance (leases and subscriptions) (517,182)
Principal repayment 948,297
Accrued interest for debt service. This is the net change in accrued interest for the current period 141,710 Compensated absences reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in a governmental funds. This is the net change in compensated absences for the current period. (77,576)
In governmental funds, pension and OPEB costs are recognized when employer contributions are made. In the statement of activities, pension and OPEB costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis pension and OPEB costs and actual employer contributions including supplemental contributions are as follows:

Pension related costs and contributions (8,522,207)
OPEB related costs and contributions (59,908)
Internal service funds are used by management to charge the costs of certain activities, such as maintenance and risk management, to individual funds. The net revenues (expenses) (less depreciation expense of $138,844) of the internal service funds is reported under governmental activities. (35,089)
Change in net position of governmental activities $ (2,165,318) 5a.1
64 City of Brawley
Statement of Net Position
Proprietary Funds
June 30, 2023
The accompanying notes are an integral part of these financial statements. -29-
Water Wastewater Solid Waste Airport
ASSETS
Current Assets:

Cash and investments 10,470,376 $ $ 23,726,024 $ 372,487 $ 601,631 Accounts receivable, net 803,879 665,624 176,225 22,178 Interest receivable 17,170 39,278 951 839
Due from other governments 2,018 80,289 - 320
Loans receivable - - - -
Total current assets 11,293,443 24,511,215 549,663 624,968 Noncurrent Assets:

Advances to other funds - 614,618 - -
Capital assets not being depreciated 946,101 144,322 - 34,125 Capital assets, net of accumulated depreciation 18,683,065 28,687,163 - 4,712,080 Net pension asset - - - -
Total noncurrent assets 19,629,166 29,446,103 - 4,746,205 Total assets 30,922,609 53,957,318 549,663 5,371,173

DEFERRED OUTFLOWS OF RESOURCES
Pension related 1,000,243 714,459 - -
OPEB related 37,803 25,203 - -
Total deferred outflows of resources 1,038,046 739,662 - -

LIABILITIES
Current Liabilities:

Accounts payable 332,312 155,842 126,396 9,491
Accrued liabilities 18,392 15,348 374 103
Interest payable 2,904 34,777 - -
Deposits payable 480,672 1,000 - 4,352
Due to other funds - - - -
Current portion of long-term liabilities 306,385 747,985 - - Total current liabilities 1,140,665 954,952 126,770 13,946 Noncurrent Liabilities:

Compensated absences 93,406 54,970 - -
Long-term liabilities 207,126 6,223,154 - -
Advances from other funds 614,618 - - -
Net pension liability 1,036,674 740,482 - -
Total OPEB liability 201,513 134,341 - -
Total noncurrent liabilities 2,153,337 7,152,947 - -
Total liabilities 3,294,002 8,107,899 126,770 13,946

DEFERRED INFLOWS OF RESOURCES
Pension related 356,006 254,291 - -
OPEB related 134,279 89,519 - -
Total deferred inflows of resources 490,285 343,810 - -

NET POSITION
Net investment in capital assets 19,115,655 21,860,346 - 4,746,205 Unrestricted 9,060,713 24,384,925 422,893 611,022
Total net position $ 28,176,368 $ 46,245,271 $ 422,893 $ 5,357,227 Business-type Activities
Enterprise Funds
Nonmajor
5a.1
65 -30-
Governmental
Activities
Internal
Service
Totals Funds
$ 1,400,614 35,170,518 $
- 1,667,906
58,238 2,301
82,627 2,350
- 3,282
36,979,289 1,408,547
614,618 -
1,124,548 11,138
52,082,308 1,090,700
- -
53,821,474 1,101,838
90,800,763 2,510,385
1,714,702 -
63,006 -
1,777,708 -
624,041 1,364
34,217 4
37,681 -
486,024 -
- 417,773
1,054,370 -
2,236,333 419,141
148,376 -
6,430,280 -
614,618 -
1,777,156 -
335,854 -
9,306,284 -
11,542,617 419,141
610,297 -
223,798 -
834,095 -
45,722,206 1,101,838
34,479,553 989,406
$ 80,201,759 $ 2,091,244
5a.1
66 City of Brawley
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -31-
Water Wastewater Solid Waste Airport

OPERATING REVENUES
Charges for services 7,584,119 $ 6,741,455 $ $ 1,873,953 $ 118,384

OPERATING EXPENSES
Salary and benefits 2,116,249 1,341,437 9,201 8,093
Administration 561,780 435,380 42,133 14,044
Supplies and services 3,292,127 2,456,319 1,754,234 82,206 Depreciation and amortization 1,524,908 976,010 - 466,913 Total operating expenses 7,495,064 5,209,146 1,805,568 571,256 Total income (loss) 89,055 1,532,309 68,385 (452,872)

NON-OPERATING REVENUES (EXPENSES)
Use of money and property 46,906 54,422 30,126 1,154
Intergovernmental revenue - - - 42,175
Interest expense and fiscal charges (23,221) (74,202) - - Total non-operating revenues (expenses) 23,685 (19,780) 30,126 43,329 Income (loss) before transfers 112,740 1,512,529 98,511 (409,543)

TRANSFERS
Transfers out (110,100) (57,680) - (685)
Total Transfers (110,100) (57,680) - (685)
Changes in net position 2,640 1,454,849 98,511 (410,228) Total Net Position - beginning 28,173,728 44,790,422 324,382 5,767,455 Total Net Position - ending $ 28,176,368 $ 46,245,271 $ 422,893 $ 5,357,227 Business-type Activities
Enterprise Funds
Nonmajor
5a.1
67 -32-
Governmental
Activities
Internal
Service
Totals Funds
$ 97,230 16,317,911 $
3,474,980 75,705
1,053,337 -
7,584,886 54,264
2,967,831 138,844
15,081,034 268,813
1,236,877 (171,583)
132,608 3,368
42,175 -
(97,423) -
77,360 3,368
1,314,237 (168,215)
(168,465) (5,718)
(168,465) (5,718)
1,145,772 (173,933)
79,055,987 2,265,177
$ 80,201,759 $ 2,091,244
5a.1
68 City of Brawley
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -33-
Business-type Activities
Enterprise Funds
Nonmajor
Water Wastewater Solid Waste Airport

CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers and users $ 6,976,337 $ 6,239,868 $ 1,839,213 $ 99,755 Cash payments to suppliers for goods and services (3,170,937) (2,373,829) (1,627,838) (79,300) Cash payments for employees and benefit programs (1,476,080) (862,046) (8,827) (7,996) Net cash provided (used) by operating activities 2,329,320 3,003,993 202,548 12,459

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Transfers (110,100) (57,680) - (685)
Interfund borrowing (repayment) - - - -
Cash received (payments) from (to) other governments - - - 110,637 Loan repayment - - - -
Net cash provided (used) by non-capital
financing activities (110,100) (57,680) - 109,952

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Purchase of capital assets (431,638) (33,279) (32,175) - Loan repayment (100,401) 100,401 - -
Principal paid on debt (300,032) (740,636) - -
Interest on debt and fiscal charges (24,266) (77,876) - - Net cash used by capital and related
financing activities (856,337) (751,390) (32,175) -

CASH FLOWS FROM INVESTING ACTIVITIES
Use of money and property 34,000 25,306 29,242 557

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,396,883 2,220,229 231,790 90,793

CASH AND CASH EQUIVALENTS, BEGINNING OF
FISCAL YEAR 9,073,493 21,505,795 140,697 510,838

CASH AND CASH EQUIVALENTS, END OF
FISCAL YEAR $ 10,470,376 $ 23,726,024 $ 372,487 $ 601,631 5a.1
69 (continued)
-34-
Governmental
Activities
Internal
Service
Totals Fund
$ 15,155,173 $ 94,880
(7,251,904) (55,548)
(2,354,949) (78,733)
5,548,320 (39,401)
(168,465) (5,718)
- (57,485)
110,637 -
- 1,303
(57,828) (61,900)
(497,092) -
- -
(1,040,668) -
(102,142) -
(1,639,902) -
89,105 1,775
3,939,695 (99,526)
31,230,823 1,500,140
$ 35,170,518 $ 1,400,614
5a.1
70 City of Brawley
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -35-
Business-type Activities
Enterprise Funds
Nonmajor
Water Wastewater Solid Waste Airport
Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ 89,055 $ 1,532,309 $ 68,385 $ (452,872) Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation and amortization 1,524,908 976,010 - 466,913 (Increase) decrease in accounts receivable 43,535 (4,879) 7,393 (4,635) (Increase) decrease in due from other governments (1,579) (61,328) - - Increase (decrease) in prepaids - - - -
Increase (decrease) in net pension asset 156,267 112,797 - - Increase (decrease) in deferred outflows (533,695) (378,029) - - Increase (decrease) in accounts payable and
accrued liabilities 81,963 63,411 126,770 3,003
Increase (decrease) in compensated absences (2,502) 9,402 - - Increase (decrease) in net pension liability 1,036,674 740,482 - - Increase (decrease) in OPEB liability (39,583) (26,389) - - Increase (decrease) in deferred inflows 62,235 40,207 - - Increase (decrease) in deposits payable (87,958) - - 50 Total adjustments 2,240,265 1,471,684 134,163 465,331
Net cash provided by (used by) operating activities $ 2,329,320 $ 3,003,993 $ 202,548 $ 12,459 5a.1
71 (concluded)
-36-
Governmental
Activities
Internal
Service
Totals Fund
$ (171,583) 1,236,877 $
138,844 2,967,831
- 41,414
- (62,907)
(2,350) -
- 269,064
- (911,724)
(4,312) 275,147
- 6,900
- 1,777,156
- (65,972)
- 102,442
- (87,908)
132,182 4,311,443
$ (39,401) 5,548,320 $
5a.1
72 City of Brawley
Statement of Fund Net Position
Fiduciary Fund
June 30, 2023
The accompanying notes are an integral part of these financial statements. -37-
Private Purpose
Trust Fund
RDA
Successor
Agency
ASSETS
Cash and investments $ 258,632
Interest receivable 122
Land held for resale 1,081,003
Total assets 1,339,757

LIABILITIES
Interest payable 25,244
Long-term liabilities:

Due within one year 202,697
Due in more than one year 3,255,061
Total lLiabilities 3,483,002

NET POSITION (DEFICIT)
Unrestricted (2,143,245)
Total net position (deficit) $ (2,143,245)
5a.1
73 City of Brawley
Statement of Changes in Fund Net Position
Fiduciary Fund
For the Fiscal Year Ended June 30, 2023
The accompanying notes are an integral part of these financial statements. -38-
Private Purpose
Trust Fund
RDA
Successor
Agency

ADDITIONS
Tax increment $ 330,144
Use of money and property 554
Total additions 330,698

DEDUCTIONS
Community development 2,470
Interest 105,278
Administrative expenses 25,000
Total deductions 132,748
Change in net position 197,950
Net position (deficit) - beginning of fiscal year (2,341,195) Net position (deficit) - end of fiscal year $ (2,143,245) 5a.1
74 This page intentionally left blank
5a.1
75 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-39-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Brawley (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The Governmental Accounting Standards Boards (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below:

A) Financial Reporting Entity
The City of Brawley is located in the southeastern part of the State of California, in the center of Imperial County, which with water provided by canal from the Colorado River, makes this one of the most fertile agricultural areas in the country. The City was incorporated on April 6, 1908, under the general laws of the State of California and enjoys all the rights and privileges pertaining to “General Law” cities.

The City is governed by a five member Council, elected at large for four years on staggered schedules. The Council selects the Mayor from its members, generally for a one year term. The Council has hired a City Manager to administer the daily affairs of the City.

The services provided by the City include police, fire, street maintenance, parks, recreation, library, water, wastewater, solid waste, airport, housing, planning, building inspection, and general administrative services.

These basic financial statements present the financial status of the City and its component units, which are included in the City’s reporting entity because of the significance of their operational or financial relationships with the City. Component unit financial statements may be obtained from the City’s Department of Finance.

Blended Component Units – Blended component units, although legally separate entities, are, in substance, part of the City’s operations.

Brawley Public Improvement Corporation – The Brawley Public Improvement Corporation was formed in October 1986 to facilitate the financing of the water and wastewater treatment facilities through the issuance of certificates of participation. The debt has since been defeased and, as such, any liability for those certificates of participation has been removed from the City of Brawley’s financial statements. The Brawley Public Improvement Corporation is reported within the primary government, however there are no balances and there has been no activity during fiscal year ended June 30, 2023. 5a.1
76 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-40-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B) Basis of Presentation
The City’s basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

Government-wide Financial Statements
The Statement of Net Position and the Statement of Activities display information about the primary government (City) and its component units. These statements include the financial activities of the overall City government, except for fiduciary activities. The effect of interfund activity has been removed from these statements. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The Statement of Activities presents a comparison between direct expenses and program revenues for each segment of the City’s governmental activities. Direct expenses are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to meeting the operational need of a particular program, and (c) fees, grants, and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.

Fund Financial Statements
The fund financial statements provide information about the City’s funds, including fiduciary funds and blended component units. Separate statements for each fund category - governmental, proprietary, and fiduciary - are presented. The emphasis of fund financial statements is on major individual funds, each of which is displayed in a separate column. All remaining funds are aggregated and reported as nonmajor funds.

Proprietary fund financial statements include a Statement of Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows.

Proprietary funds are accounted for using the “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses, and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which liability is incurred.
5a.1
77 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-41-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B) Basis of Presentation (continued)
Operating revenues in the proprietary funds are those revenues that are generated from the primary operation of the fund. All other revenues are reported as nonoperating revenues.

Operating expenses are those expenses that are essential to the primary operations of the fund.

All other expenses are reported as nonoperating expenses.

C) Major Funds
GASB Statement No. 34, defines major funds and requires that the City’s major governmental funds are identified and presented separately in the fund financial statements. All other governmental funds, called nonmajor funds, are combined and reported in a single column, regardless of their fund-type.

Major funds are defined as funds that have either assets, liabilities, revenues, or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total of all fund types. The General Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.

The City reported the following major governmental funds in the accompanying financial statements:

General Fund
This fund accounts for all financial resources except those to be accounted for in another fund. It is the general operating fund of the City.

Economic and Community Development Fund
This fund accounts for revenues and expenditures of the Community Development Block Grant program and the related program income.

American Rescue Plan Act (ARPA) Fund
This fund accounts for revenues and expenditures resulting from the State and Local Fiscal Recovery Fund.

Highway Relinquishment Fund
This fund accounts for revenue received from the State under 7Article 8(a) of the Transportation Development Act (Section 99400(a) of the Public Utilities Code). Uses are restricted to local streets and roads. This fund also accounts for $7,858,315 received (unearned revenue until spent) from the State of California for ongoing maintenance and repairs related to relinquished portions of streets and street lights. 5a.1
78 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-42-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) C) Major Funds (continued)
Measure D Fund
This fund accounts for revenue received from the Local Transportation Authority for the City’s portion of the ½% local sales tax revenue for a 20-year street rehabilitation program.

Uses are restricted to those purposes necessary and convenient for the maintenance, operation, and construction of local streets and roads.

Development Impact Fund
This fund accounts for fees paid by developers to offset the cost of providing public facilities for police, fire, parks, recreation, library, and other public facilities and for street construction.

Streets Fund
This fund accounts for resources set aside for major improvements to local streets and roads.

The City reported the following major proprietary funds:

Water Fund
This fund accounts for the costs of treatment and distribution of drinking water to the community.

Wastewater Fund
This fund accounts for the costs of collection, treatment, and disposal of sewage generated in the community.

The City reported the following internal service funds:

Internal Service Funds
These funds account for maintenance of the City’s fleet of vehicles and certain public facilities, and the costs of providing insurance, including risks maintained by the City, for general liability, property damage, unemployment benefits, workers’ compensation, and employee health benefits.

The City also reports the following fund:

Private Purpose Trust Fund
This Fund is used to account for the activities of the Successor Agency to the Brawley Redevelopment Agency.
5a.1
79 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-43-
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D) Basis of Accounting
The basis of accounting determines when transactions are reported on the financial statements.

The government-wide, proprietary, and fiduciary funds financial statements are reported using the economic resources measurement focus and accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On the accrual basis, revenues from property taxes are recognized in the fiscal year for which the taxes are levied. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent that they have matured. Capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of long-term debt and acquisitions under leases are reported as other financing sources.

Revenues susceptible to accrual are property taxes and interest revenue. Sales taxes, and other amounts collected and held by the state at fiscal yearend on behalf of the City also are recognized as revenue. Fines, licenses, permits and other revenues are not susceptible to accrual because generally they are not measurable until received in cash.

Proprietary funds distinguish between operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met.

Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures/expenses. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
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Notes to Basic Financial Statements
June 30, 2023
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E) Cash and Cash Equivalents
For purposes of the statement of cash flows, the City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures and funds for the Successor Agency to the Brawley Community Redevelopment Agency. Cash equivalents have an original maturity date of three months or less from the date of purchase.

F) Cash and Investments
Most cash balances of the City’s funds and its component units are pooled and invested by the City Treasurer. Unless otherwise dictated by legal or contractual requirements, income earned or losses arising from the investment pooled cash are allocated on a quarterly basis to the participating funds and component units based on their proportionate shares of the average weekly cash balance.

The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tiered fair value hierarchy as follows: Level 1 – Investments reflect prices quoted in active markets; Level 2 – Investments reflect prices that are based on similar observable assets either directly or indirectly, which may include inputs in markets that are not considered active; and Level 3 – Investments reflect prices based upon unobservable sources.

G) Revenue Recognition
Revenue from taxpayer-assessed taxes (sales and use, business license, gas, and franchise fees) is accrued in governmental funds when they are both measurable and available. The City considers these taxes available if they are received within 60 days after fiscal year end.

Grants, entitlements, or shared revenues are recorded as receivables and revenues in the General, Special Revenue, and Capital Projects Funds when they are received or measurable and available. Grants awarded for Proprietary Funds are recorded as receivables and nonoperating revenues when they are earned and are measurable.

Utility service accounts receivable are reported net of allowance for doubtful collections. 5a.1
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Notes to Basic Financial Statements
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) H) Interfund Transactions
Activities between funds that are representative of lending/borrowing outstanding at the end of the fiscal year are referred to as either “interfund receivables/payables” (i.e. the current portion of interfund loans) or “advances to/from other funds” (i.e. the non-current portion of interfund loans). All other outstanding balances between funds are reported as “due to/from other funds”.

Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources.

With Council approval, resources may be transferred from one City fund to another. Transfers are used to (1) move revenues from one fund that statue or budget requires collecting them to the fund that statue or budget requires to expend them, and (2) use unrestricted revenues collected in the General Fund to finance various programs accounted for in the other funds in accordance with budget authorizations.

I) Property Tax
The City's property taxes are levied on the first day of January by the County assessor and are payable to the County tax collector in two installments.

The first installment is due November 1st and is delinquent after December 10th; the second installment is due February 1st and is delinquent after April 10th. Taxes become a lien on the property on January 1st, and on the date of the transfer of the title, and the date of new construction. The City has elected under State law (TEETER) to receive all of the annual property assessments in three installments as follows:

December 55%
April 40%
June 5%
100%
J) Inventory
All inventories are valued at cost using the first-in/first-out (FIFO) method. Inventories for governmental funds are recorded as expenditures when consumed rather than when purchased.

K) Restricted Assets
Certain proceeds of revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants.
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) L) Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure, are reported in the applicable columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of $5,000 for property, plant, and equipment and $25,000 for infrastructure and have a useful life of more than 3 year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at their acquisition value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized.

Property, plant, and equipment of the City, as well as the component units, are depreciated using the straight-line method over their estimated lives of 2 to 50 years.

M) Compensated Absences
It is the City's policy to permit employees to accumulate earned but unused vacation benefits and sick leave. All vacation and sick leave benefits are accrued as earned by employees. All vacation and sick leave pay are accrued when incurred in the government-wide financial statements. A liability for these amounts is reported in the governmental funds if they have matured, for example, as a result of employee resignation and retirements.

N) Self-insurance
The City is self-insured for worker’s compensation, general liability, auto liability, and certain other risks. The City’s workers’ compensation activities are funded and accounted for separately in the fund financial statements based upon the activities of each fund. The current portion of claims liability are accounted for in the General Fund and the enterprise funds on the basis of settlements reached or judgments entered within the current fiscal year. In the government-wide financial statements and the enterprise fund financial statements, the estimated liability for all self-insurance liability claims is recorded as a liability.

O) Long-term Debt, Discount, Premiums, and Issuance Costs In the government-wide financial statements and proprietary fund financial statements, longterm debt and other long-term obligations are reported as liabilities in the statement of net position.

Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are expensed when paid.
5a.1
83 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) O) Long-term Debt, Discount, Premiums, and Issuance Costs (continued) In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

P) Net Position and Fund Equity
In the government-wide financial statements and proprietary fund financial statements, net position is reported in three categories under GASB Statement No. 34. These captions apply only to net position, which are determined for government-wide, proprietary funds, and fiduciary funds and are described below.

Net Investment in Capital Assets describes the portion of net position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include developer fees received for use on capital projects, debt service requirements, and gas tax funds for street construction.

Unrestricted describes the portion of net position which is not restricted as to use.

Q) Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America, as prescribed by the GASB and the AICPA, require management to make assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates.

R) Fiscal Year
The fiscal year of the City begins on July 1 and ends on June 30.

S) Use of Restricted Resources
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources, as they are needed. 5a.1
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) T) Fund Balance
In the fund financial statements, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent.  Nonspendable fund balance – amounts that cannot be spent because they are either (a) not spendable in form or (b) legally or contractually required to be maintained intact.  Restricted fund balance – amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.
 Committed fund balance – amounts that can only be used for specific purposes determined by formal action of the City’s highest level of decision-making authority (the City Council) and that remain binding unless removed in the same manner. The underlying action that imposed the limitation needs to occur no later than the close of the reporting period.
 Assigned fund balance – amounts that are constrained by the City’s intent to be used for specific purposes. The intent can be established at either the highest level of decision making, or by a body or an official designated for that purpose.  Unassigned fund balance – the residual classification for the City’s funds that include amounts not contained in the other classifications.

When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed.

U) Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
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85 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) U) Pensions (continued)
GASB 68 requires that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used.

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
V) Other Post-Employment Benefits (OPEB)
For purposes of measuring the total OPEB liability, deferred outflows and inflows of resources related to OPEB, and OPEB expense of the City’s defined benefit OPEB plan are measured on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.

Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:

Valuation Date (VD) June 30, 2021
Measurement Date (MD) June 30, 2022
Measurement Period (MP) July 1, 2021 to June 30, 2022
W) Deferred Outflows and Inflows of Resources
The City recognizes deferred outflows and inflows of resources in relation to unavailable revenues, pension, and OPEB. Deferred outflow and inflow of resources are defined as a consumption or resource of net position by the government that is applicable to a future report period. The City recognizes deferred outflows/inflows of resources related to pensions and OPEB.

X) Implementation of new pronouncement
For the year ended June 30, 2023, the financial statements include the adoption of GASB Statement No. 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. Under this statement, a lessee is required to recognize a SBITA liability and an intangible right-to-use lease asset. For additional information, refer to the disclosures for capital assets and long-term liabilities. 5a.1
86 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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2) STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
A) Budgets and Budgetary Accounting
The City Council is required to adopt an annual budget resolution by July 1st of each fiscal year for the General Fund, special revenue, capital projects, debt service, and enterprise funds.

These budgets are adopted and presented for reporting purposes on a basis consistent with generally accepted accounting principles.

The appropriated budget is prepared by fund, function, and department. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. The City Council made several supplemental budgetary appropriations throughout the fiscal year.

B) Deficit Fund Balances/Net Position
At June 30, 2023, the following funds had an accumulated deficit:

Fund Amount
Streets - Capital Projects Fund $ (271,209)
Gas Tax (906,115)
Internal Service Fund:

Risk Management Fund (413,586)
This fund balance/net position deficit is primarily due to the City incurring costs in excess of revenues. The Funds should alleviate this deficit as revenues are received or as General Fund transfers funds.

C) Excess of Expenditures over Appropriations
For the fiscal year ended June 30, 2023, the following funds had excess of expenditures over appropriations:

Final
Fund Appropriation Expenditures Excess
General Fund
Capital outlay 21,000 $ 457,099 $ (436,099) $
Debt service:

Principal 871,868 922,163 (50,295)
Economic and Community Development Fund
Community development 114,100 156,541 (42,441)
5a.1
87 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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2) STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (continued) C) Excess of Expenditures over Appropriations (continued) Excess of current expenditures over appropriation in the General Fund is due to the implementation of GASB 96 for SBITAs (see note 1(X) for more details). These software subscriptions were originally budgeted in the year the agreement commenced. 3) CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash and investments $ 78,572,525
Restricted cash and investments with fiscal agent 179,792 Fiduciary Fund:

Cash and investments 258,632
Total cash and investments $ 79,010,949
Cash and investments as of June 30, 2023 consist of the following:

Cash on hand $ 5,575
Deposits with financial institutions 34,317,761
Investments 44,687,613
Total cash and investments $ 79,010,949
A) Investments Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City of Brawley (City) by the California Government Code or the City’s investment policy, where more restrictive. The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.
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88 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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3) CASH AND INVESTMENTS (continued)
A) Investments Authorized by the California Government Code and the City’s Investment Policy
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer Local Government Bonds 5 years 80% Less than 80%
U.S. Treasury Obligations 5 years 80% Less than 80%
U.S. Government Agency Securities 5 years 80% Less than 80% Banker's Acceptances 180 days 40% 30%
Commercial Paper, Prime Quality 270 days 25% 10%
Certificates of Deposit 5 years None None
Negotiable Certificates of Deposit 5 years 30% None
Medium-Term Notes 5 years 30% 5%
Money Market Mutual Funds N/A 20% 10%
Local Agency Investment Fund (LAIF) N/A None $75 Million B) Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustees. The table also identifies certain provisions of these debt agreements that address interest rate risk, credit risk, and concentration of credit risk.

Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio in One Issuer U.S. Treasury Obligations None None None
U.S. Agency Securities None None None
Mortgage-backed Securities 3 years None None
Banker's Acceptances 360 days None None
Commercial Paper None None None
Certificates of Deposit 5 years None None
Negotiable Certificates of Deposit None None None
Investment Agreements None None None
Repurchase Agreements 30 days None None
Money Market Mutual Funds N/A None None
Local Agency Investment Fund (LAIF) N/A None None
5a.1
89 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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3) CASH AND INVESTMENTS (continued)
C) Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

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

Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60
Investment Type Totals or Less Months Months
Local Agency Investment Fund (LAIF) 15,619,679 $ 15,619,679 $ - $ $ - Certificates of Deposit 15,534,565 5,828,941 3,030,062 6,675,562 U.S. Government Agency Securities 4,973,061 4,973,061 - - Medium-Term Notes 8,560,308 628,236 954,915 6,977,157
Total $ 44,687,613 $ 27,049,917 $ 3,984,977 $ 13,652,719 D) Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating (Standard & Poor’s) as of fiscal year end for each investment type.

Rating as of Fiscal Year End
Minimum
Legal Not
Investment Type Totals Rating AA A BBB Rated
Local Agency Investment Fund (LAIF) 15,619,679 $ N/A - $ -$ $ 15,619,679 - $ Certificates of Deposit 15,534,565 N/A - - 15,534,565 - U.S. Government Agency Securities 4,973,061 N/A - - 4,973,061 - Medium-Term Notes 8,560,308 N/A 6,416,699 1,702,999 440,610 - Total $ 44,687,613 $ 1,702,999 6,416,699 $ 440,610 $ $ 36,127,305 5a.1
90 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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3) CASH AND INVESTMENTS (continued)
E) Concentration of Credit Risk
The investment policy of the City contains limitations on the amount that can be invested in any one issuer. There was no investment in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represents 5% or more of total City investments.

Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. brokerdealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits; The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the government unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2023, none of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts.

Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California and operates in accordance with appropriate state laws and regulations. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The reported value of the pool is the same as the fair value of the pool shares. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.

Deposits and withdrawals are made on the basis of $1 and not fair value. Currently, LAIF does not have an investment rating. LAIF has a minimum $5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits and withdrawals) per month. LAIF requires a one-day prior notice for deposits and withdrawals of $10 million or more. 5a.1
91 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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3) CASH AND INVESTMENTS (continued)
E) Concentration of Credit Risk (continued)
Fair Value Measurements
The City categorizes its fair value measurements within the fair value hierarchy establish by generally accepted accounting principles. These principles recognize a three tiered fair value hierarchy as follows: Level 1 – Investments reflect prices quoted in active markets; Level 2 – Investments reflect prices that are based on similar observable asset either directly or indirectly, which may include inputs in markets that are not considered active; and Level 3 – Investments reflect prices based upon unobservable sources.

FMV Measurement
Pooled Investments by Fair Value Hierarchy Total Level 2 Investments subject to fair value hierarchy:

Certificates of Deposit $ 15,534,565 15,534,565 $
U.S. Government Agency Securities 4,973,061 4,973,061
Medium-Term Notes 8,560,308 8,560,308
Total investments measured at fair value hierarchy 29,067,934 $ 29,067,934 Investments measured using uncategorized inputs:

State Investment Pool (LAIF) 15,619,679
Total investments not subject at fair value hierarchy 15,619,679 Total investments $ 44,687,613
Both type of Certificates of Deposit and Federal Agency Securities are valued using a variety of techniques such as matrix pricing, market corroborated pricing inputs such as yield curves and indices, and other market-related data and classified in Level 2. 4) INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS
A) Long-Term Advances
Advances to/from other funds are non-current interfund loans and are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriations and are not expendable available financial resources. Repayments for the following long-term advance will be made when excess net revenue is available. During the fiscal year ended June 30, 2010, the Water Fund had incurred a negative cash balance of $1,605,839 due to rates not being updated based on cost of operations. In order to meet ongoing financial obligations, the Wastewater Fund advanced the Water Fund the necessary funds. The repayments for these advances began during the fiscal year ended June 30, 2010.

The advance incurs interest at a rate of 1.5% per year, the LAIF return rate at the time of inception. The repayment of these advances is subordinate to all other outstanding debt and the cost of operations.

Receivable Fund Payable Fund Amount
Enterprise Fund: Enterprise Fund:

Wastewater Fund Water Fund $ 614,618
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92 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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4) INTERFUND RECEIVABLES, PAYABLES, AND TRANSFERS (continued) B) Interfund Receivables and Payables
During the course of normal operations, numerous transactions occur between individual funds that may result in amounts owed between funds. Those related to goods and services type transactions are classified as “due to and from other funds”. The following presents a summary of current interfund balances at June 30, 2023.

Receivable Fund Amount Payable Fund Amount
Major Governmental Fund: Nonmajor Governmental Funds:

General Fund $ Gas 954,209 Tax $ 536,436
Internal Service Fund:

Risk Management 417,773
Total $ 954,209
All interfund balances listed above are short term borrowings due to cash needs and will repaid within the next fiscal year.

C) Interfund Transfers
Transfers are utilized for funding for capital projects, lease payments or debt service, subsidies of various City operations, and re-allocations of special revenues. All inter-fund transfers between individual government funds have been eliminated on the government-wide statements. The following schedule briefly summarizes the City’s transfer activity for the fiscal year ended June 30, 2023:

Fund Transfers in Transfers out
Major Fund:

General $ 423,718
Highway Relinquishment 547,352
Measure D 948,944
Streets 1,496,296
Nonmajor Governmental Funds:

Gas Tax 22,852
Pedestrian & Bicycle Facilities
Assessment District 226,632
Public Transport
Local Law Enforcement 51
Major Proprietary Funds:

Water 110,100
Wastewater 57,680
Nonmajor Proprietary Funds:

Airport 685
Internal Service Fund:

Maintenance 5,718
Totals $ 1,920,014 $ 1,920,014
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Notes to Basic Financial Statements
June 30, 2023
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5) LOANS RECEIVABLE
Loans receivable amounts primarily represent loans made for economic development, and property rehabilitation.

Management Risk Fund - Internal Service Fund
Employee loans, repayment through payroll deductions $ 3,282 Economic & Community Development Fund - Special Revenue Fund Loans to Inferno 800. Secured by deed of trust 8,609
4,063,000
Program Name Balance
04-STBG-1952 $ 660,142
03-STBG-1804 134,557
STBG 2002-1688 174,631
01-STBG-1569 115,823
STBG-2000-1453 50,569
1997 Grant 113,948
STBG 1996 89,590
STBG 1994 38,889
1993 CDBG 34,430
1991 Grant 49,692
1990 Grant 19,998
STBG 304 28,671
Community Development Grants 240,383
First Time Home Buyer 727,227
05-CalHOME-134 167,483
06-CalHOME-261 89,767
11-HOME-7664 48,649
15-HOME-10897 366,379
18-CDBG-12905 163,681 3,314,509
Development Impact Fund - Special Revenue Fund
238,879
391,228
Total Loans Receivable 8,019,507 $
HOME Investment Partnerships Program Loan to BESA, L.P., C/O Chelsea Investment Corporation. Annual payments are in the amount equal to 50% of the residual receipts from the apartment complex. Payments are due 90 days following the end of the calendar year with respect to the preceding year.

Deferred notes receivable. No installment payments of principal or interest are required until the loans reach their maturity or underlying property is sold.

Secured by deeds of trust. Details of loans by program are listed below:

Development impact fee (DIF) loan deferral for Brawley Pacific Associate.

Secured by a Promissory Note and Deed of Trust.

Development impact fee (DIF) loan deferral for Brawley Adams I CIC, L.P.

Secured by a Promissory Note and Deed of Trust.
5a.1
94 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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5) LOANS RECEIVABLE (continued)
On August 1, 2004, to assist with the construction of 31 apartment assisted living units occupied by low and very low-income households, the City received a loan from the Housing Investment Partnerships (HOME) Program for $3,400,000, which was provided to Chelsea Investment Corporation (Developer) with a no interest fifty-five (55) year repayment term maturing in 2059.

The development is known as Brawley Elks Senior Apartments and is located at 955 Willard Avenue. The principal will be repaid from annual residual receipts as defined in the Note and shall apply to the Development through and including fifty-five (55) years from the date of the recordation regardless of any prepayment of the loan or sale, assignment, transfer or conveyance of the Development, unless otherwise terminated by the City or extended upon mutual agreement. The loan is secured by a Recorded Regulatory Agreement. As of June 30, 2023, the outstanding principal balance is $4,063,000.

On February 17, 2015, the City approved a fifty-five (55) year development impact fee (DIF) loan deferral for Brawley Pacific Associate (aka AMG & Associates) to secure California Tax Credit Allocation Committee funds to build a 41-unit two story income restricted family apartment complex located on the southeast corner of Malan Street and South 1st Street. On the third (3rd) anniversary year of the project construction loan closing and thereafter the $238,879 DIF loan shall bear annual simple interest of 3% with a 55-year term and payments made from residual receipts and secured by a Promissory Note and Deed of Trust. As of June 30, 2023, the outstanding principal balance is $238,879 and the outstanding interest balance is $25,082.

On March 14, 2019, the City approved a fifty-five (55) year development impact fee (DIF) loan deferral for Brawley Adams I CIC, L.P. (aka Maker) to secure California Tax Credit Allocation Committee funds to build a 60-unit affordable housing apartment complex. Located at 1598 C Street. Upon issuance of certificate of occupancy and thereafter the $526,793 DIF loan shall bear annual compound interest of 2.91% with a 55-year term and payments made from 20% of residual receipts and secured by a Promissory Note and Deed of Trust. As of June 30, 2023, the outstanding principal balance is $391,228 and the outstanding interest balance is $0. 5a.1
95 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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6) CAPITAL ASSETS
Capital asset activity for the fiscal year ended June 30, 2023 was as follows:

Balance as of Balance as of
June 30, 2022 Additions Deletions June 30, 2023
Governmental Activities
Nondepreciable capital assets
Land $ 966,706 $ - $ 966,706 - $
Construction in progress 2,945,178 3,151,013 6,096,191 - Total nondepreciable
capital assets 3,911,884 3,151,013 7,062,897 -
Depreciable capital assets
Equipment 11,090,221 1,854,929 (23,334) 12,921,816
Software subscriptions 730,754 - - 730,754
Buildings 14,565,604 29,981 14,595,585 -
Improvements other than buildings 18,272,190 - 18,272,190 - Infrastructure 27,181,822 - 27,181,822 -
Total depreciable capital assets 71,109,837 2,615,664 (23,334) 73,702,167 Less accumulated depreciation
Equipment (9,202,043) (425,996) (9,628,039) -
Software subscriptions (223,662) - (223,662) -
Buildings (6,545,872) (459,885) (7,005,757) -
Improvements other than buildings (10,399,352) (671,390) (11,070,742) - Infrastructure (18,976,688) (1,335,965) (20,312,653) -
Total accumulated depreciation (45,123,955) (3,116,898) (48,240,853) - Net depreciable capital assets 25,985,882 (501,234) (23,334) 25,461,314 Net capital assets $ 29,897,766 $ 2,649,779 $ (23,334) $ 32,524,211 Depreciation expense was charged to functions/programs of the primary government as follows:

General government $ 2,103,636
Public safety 474,011
Culture and leisure 27,054
Community development 369,539
Transportation 3,814
Internal service funds 138,844
Total $ 3,116,898
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96 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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6) CAPITAL ASSETS (continued)
Balance as of Balance as of
June 30, 2022 Additions Deletions June 30, 2023
Business-type Activities
Nondepreciable capital assets
Land $ 37,076 $ - $ - $ 37,076
Construction in progress 701,064 386,408 1,087,472 -
Total nondepreciable
capital assets 738,140 386,408 1,124,548 -
Depreciable capital assets
Equipment 3,842,556 110,684 3,953,240 -
Buildings 56,762,536 - 56,762,536 -
Improvements other than buildings 14,743,384 - 14,743,384 - Conveyance systems 36,938,578 - 36,938,578 -
Total depreciable capital assets 112,287,054 110,684 112,397,738 - Less accumulated depreciation
Equipment (3,061,475) (192,434) (3,253,909) -
Buildings (25,999,082) (1,353,470) (27,352,552) -
Improvements other than buildings (7,498,410) (600,059) (8,098,469) - Conveyance systems (20,788,632) (821,868) (21,610,500) - Total accumulated depreciation (57,347,599) (2,967,831) (60,315,430) - Net depreciable capital assets 54,939,455 (2,857,147) 52,082,308 - Net capital assets $ 55,677,595 $ - (2,470,739) $ 53,206,856 $ Depreciation expense was charged to functions/programs of the business-types activities as follows:

Water $ 1,524,908
Wastewater 976,010
Airport 466,913
Total $ 2,967,831
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97 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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7) LONG-TERM LIABILITIES
Governmental Activities
The following is a summary of long-term debt activity of the City’s governmental activities for the fiscal year ended June 30, 2023:

Balance as of Balance as of Due Within
June 30, 2022 Additions Reductions June 30, 2023 One Year Governmental Activities:

Pension obligation bonds $ 12,575,000 $ - $ (750,000) $ 11,825,000 $ 815,000 Debt from direct borrowings and
direct payments:

Financed purchases 182,007 60,083 (72,910) 169,180 58,566 Subscriptions - 457,099 (125,387) 331,712 121,815
Compensated absences 523,065 613,809 (536,233) 600,641 180,192 Total long-term liabilities 13,280,072 $ $ 1,130,991 $ (1,484,530) $ 12,926,533 $ 1,175,573 Governmental Activities: Pension Obligation Bonds Series 2017 On July 1, 2017, the City of Brawley issued Pension Obligation Bonds totaling $16,310,000. The proceeds of the issuance were used to refinance the City’s outstanding “side fund” obligation to the California Public Employees’ Retirement System (CalPERS) with respect to certain of the City’s defined benefit pension plans for its public safety employees and miscellaneous employees. The bonds bear interest with rates between 1.75% and 4.12% with a final maturity date of September 1, 2032. The balance outstanding as of June 30, 2023 is $11,825,000. Debt service requirements are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 815,000 $ 427,789 $ 1,242,789 $
2025 885,000 399,578 1,284,578
2026 965,000 368,877 1,333,877
2027 1,035,000 368,877 1,403,877
2028 1,125,000 295,803 1,420,803
2029 - 2033 7,000,000 734,441 7,734,441
Total $ 11,825,000 $ 2,595,365 $ 14,420,365
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98 City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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7) LONG-TERM LIABILITIES (continued)
Governmental Activities (continued)
Governmental Activities: Financed Purchase
Starting in March 2020, the city entered into a vehicle lease agreement with Enterprise Fleet management with the goal of strategically replacing obsolete vehicles utilized by multiple departments over several years. In fiscal year 2019-20, four vehicles were financed ranging from $26,754 to $29,566 (three of these vehicles are allocated between governmental and business-type activities). In fiscal year 2020-21 two vehicles were financed for $43,128 each. In fiscal year 2021-22, four vehicles were financed ranging from $32,570 to $39,710 (two of these vehicles are allocated between governmental and business-type activities). In fiscal year 2022- 23, two vehicles were financed ranging from $28,482 to $31,600. Debt service requirements, including interest, as of June 30, 2023, are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 $ 58,566 $ 6,483 $ 65,049
2025 56,092 8,726 64,818
2026 30,363 5,507 35,870
2027 22,683 4,596 27,279
2028 1,476 410 1,886
Total $ 169,180 $ 25,722 $ 194,902
Governmental Activities: Subscriptions
For the year ended June 30, 2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription activities. This statement establishes a single model for subscription accounting based on the principle that subscriptions are financings of the right to use an underlying asset. Under this Statement, an organization is required to recognize a subscription liability and an intangible right-to-use subscription asset.

Effective July 1, 2022, the City entered into various software subscriptions. An initial subscription liability was recorded in the amount of $457,099. As of June 30, 2023, the total value of the subscription liabilities is $331,712. The City is required to make routine payments (some annual, quarterly or monthly). The subscriptions have varying interest rates, ranging from

2.5030% to 3.378%. The total value of the right to use subscription assets is $730,754, with accumulated amortization of $223,662 and is included in the capital asset footnote. Each subscription has various extension option lengths.
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Notes to Basic Financial Statements
June 30, 2023
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7) LONG-TERM LIABILITIES (continued)
Governmental Activities (continued)
Debt service requirements, including interest, as of June 30, 2023, are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 $ 121,815 $ 9,120 $ 130,935
2025 122,064 6,374 128,438
2026 28,979 2,694 31,673
2027 28,982 1,806 30,788
2028 29,872 916 30,788
Total $ 331,712 $ 20,910 $ 352,622
Business-Type Activities
The following is a summary of long-term debt activity of the City’s business-type activities for the fiscal year ended June 30, 2023:

Balance as of Balance as of Due Within
June 30, 2022 Additions Reductions June 30, 2023 One Year Business-type Activities:

Water Fund
Debt from direct borrowings and
direct payments:

MFC note payable $ 694,500 $ - $ (272,123) $ 422,377 $ 279,658 Unamortized premium 1,486 - (766) 720 -
Financed purchases 118,323 - (27,909) 90,414 26,727
Wastewater Fund
Debt from direct borrowings and
direct payments:

CSWRCB loan 7,690,296 - (734,948) 6,955,348 742,297
Financed purchases 21,479 - (5,688) 15,791 5,688
Compensated absences 141,476 113,257 (106,357) 148,376 44,513 Total long-term liabilities 8,667,560 $ $ 113,257 $ (1,147,791) $ 7,633,026 $ 1,098,883 5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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7) LONG-TERM LIABILITIES (continued)
Business-Type Activities (continued)
Water Enterprise Fund: Direct Borrowings and Placements of Debt - MFC Note Payable On October 1, 2004, the City participated in a pooled revenue bond issue with the California Statewide Communities Development Authority (CSCDA). The CSCDA issued $4,000,000 of revenue bonds on behalf of the City for its Water enterprise fund, at an average interest rate of

4.37% and a final maturity of October 1, 2024. The City has since paid off the Bond with a Note from the Municipal Finance Corporation. In the event of a default the full outstanding balance of the note immediately becomes due and payable.

The debt service requirements to maturity on the note are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 $ 279,658 $ 9,706 $ 289,364
2025 142,719 1,962 144,681
Total $ 422,377 $ 11,668 $ 434,045
Wastewater Enterprise Fund: Direct Borrowings and Placements of Debt - California State Water Resource Control Board Loan
The City entered into a project finance agreement with the California State Water Resource Control Board (Water Control Board). Through the use of ARRA funds, the Water Control Board provided funding assistance for the rehabilitation and upgrade of the wastewater treatment plant. The City must repay the project funds at an interest rate of 1% per annum. The term of the agreement is from the fiscal year ended June 30, 2013, to the fiscal year ended June 30, 2032. A portion of the loan totaling $10,000,000 was forgiven by the Water Control Board leaving an outstanding balance of $6,955,348 at June 30, 2023. In the event of a default the full outstanding balance of the loan immediately becomes due and payable. Annual debt service requirements for the CSWRCB Loan are shown below:

Fiscal Year
Ending June 30, Principal Interest Total
2024 $ 742,297 $ 69,554 $ 811,851
2025 749,720 62,131 811,851
2026 757,218 54,633 811,851
2027 764,790 47,061 811,851
2028 772,438 39,413 811,851
2029 - 2032 3,168,885 79,633 3,248,518
Total $ 6,955,348 $ 352,425 $ 7,307,773
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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7) LONG-TERM LIABILITIES (continued)
Business-Type Activities (continued)
Water Enterprise Fund: Financed Purchase
Starting in March 2020, the city entered into a vehicle lease agreement with Enterprise Fleet management with the goal of strategically replacing obsolete vehicles utilized by multiple departments over several years. In fiscal year 2019-20, three vehicles were financed ranging from $29,171 to $29,566 (these vehicles are allocated between governmental and businesstype activities). In fiscal year 2021-22, four vehicles were financed ranging from $27,268 to $34,958 (two of these vehicles are allocated between governmental and business-type activities). Debt service requirements, including interest, as of June 30, 2023, are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 26,727 $ 5,119 $ 31,846 $
2025 26,343 4,936 31,279
2026 19,088 3,903 22,991
2027 17,076 3,475 20,551
Total 89,234 $ 17,433 $ 106,667 $
Wastewater Enterprise Fund: Financed Purchase
Starting in March 2020, the city entered into a vehicle lease agreement with Enterprise Fleet management with the goal of strategically replacing obsolete vehicles utilized by multiple departments over several years. In fiscal year 2019-20, three vehicles were financed ranging from $29,171 to $29,566 (These vehicles are allocated between governmental and businesstype activities). In fiscal year 2021-22, two vehicles were financed for $34,952 and 34,968 (these vehicles are allocated between governmental and business-type activities). Debt service requirements, including interest, as of June 30, 2023, are as follows:

Fiscal Year
Ending June 30, Principal Interest Total
2024 5,688 $ 974 $ 6,662 $
2025 5,125 908 6,033
2026 2,513 536 3,049
2027 2,465 521 2,986
Total $ 15,791 $ 2,939 $ 18,730
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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8) RISK MANAGEMENT
An internal service fund is used to account for the City’s risk management and insurance programs, including self-insurance, commercial insurance, and participation in a public entity risk pool. Operating revenues of this fund consist of payments from other City funds and are based upon estimated cost of excess insurance premiums, self-insurance losses, and other operating expenses.

The City is self-insured for unemployment claims. Health insurance is purchased from an independent carrier. The City is a member of the California Joint Powers Insurance Authority (Authority) for workers’ compensation and for liability and property damage coverage as outlined below.

Description of Self-Insurance Pool Pursuant to Joint Powers Agreement The City is a member of the California Joint Powers Insurance Authority (Authority). The Authority is composed of 124 California public entities and is organized under a joint powers agreement pursuant to California Government Code §6500 et seq. The purpose of the Authority is to arrange and administer programs for the pooling of self-insured losses, to purchase excess insurance or reinsurance, and to arrange for group purchased insurance for property and other lines of coverage. The California JPIA began covering claims of its members in 1978. Each member government has an elected official as its representative on the Board of Directors. The Board operates through a nine-member Executive Committee.

Primary Self-Insurance Programs of the Authority
Each member pays an annual contribution at the beginning of the coverage period. A retrospective adjustment is then conducted annually thereafter, for coverage years 2012-13 and prior. Coverage years 2013-14 and forward are not subject to routine annual retrospective adjustment. The total funding requirement for primary self-insurance programs is based on an actuarial analysis. Costs are allocated to individual agencies based on payroll and claims history, relative to other members of the risk-sharing pool.

Primary Liability Program
Claims are pooled separately between police and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $100,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $100,000 to $500,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $500,000 to $50 million, are distributed based on the outcome of cost allocation within the first and second loss layers. 5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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8) RISK MANAGEMENT (continued)
The overall coverage limit for each member, including all layers of coverage, is $50 million per occurrence. Subsidence losses also have a $50 million per occurrence limit. The coverage structure is composed of a combination of pooled self-insurance, reinsurance, and excess insurance. Additional information concerning the coverage structure is available on the Authority’s website: https://cjpia.org/coverage/risk-sharing-pools/.

Primary Workers’ Compensation Program
Claims are pooled separately between public safety (police and fire) and general government exposures. (1) The payroll of each member is evaluated relative to the payroll of other members. A variable credibility factor is determined for each member, which establishes the weight applied to payroll and the weight applied to losses within the formula. (2) The first layer of losses includes incurred costs up to $75,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the first layer. (3) The second layer of losses includes incurred costs from $75,000 to $200,000 for each occurrence and is evaluated as a percentage of the pool’s total incurred costs within the second layer. (4) Incurred costs from $200,000 to statutory limits are distributed based on the outcome of cost allocation within the first and second loss layers.

For 2022-23 the Authority’s pooled retention is $1 million per occurrence, with reinsurance to statutory limits under California Workers’ Compensation Law. Employer’s Liability losses are pooled among members to $1 million. Coverage from $1 million to $5 million is purchased through reinsurance policies, and Employer’s Liability losses from $5 million to $10 million are pooled among members.

Purchased Insurance
Pollution Legal Liability Insurance
The City participates in the pollution legal liability insurance program which is available through the Authority. The policy covers sudden and gradual pollution of scheduled property, streets, and storm drains owned by the City. Coverage is on a claims-made basis. There is a $250,000 deductible. The Authority has an aggregate limit of $20 million.

Property Insurance
The City participates in the all-risk property protection program of the Authority. This insurance protection is underwritten by several insurance companies. City property is currently insured according to a schedule of covered property submitted by the City to the Authority. City property currently has all-risk property insurance protection in the amount of $76,322,760. There is a $10,000 deductible per occurrence except for non-emergency vehicle insurance which has a $2,500 deductible.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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8) RISK MANAGEMENT (continued)
Earthquake and Flood Insurance
The City purchases earthquake and flood insurance on a portion of its property. The earthquake insurance is part of the property protection insurance program of the Authority. City property currently has earthquake protection in the amount of $73,982,078. There is a deductible of 5% per unit of value with a minimum deductible of $100,000.

Crime Insurance
The City purchases crime insurance coverage in the amount of $1,000,000 with a $2,500 deductible. The fidelity coverage is provided through the Authority.

Adequacy of Protection
During the past three fiscal years, none of the above programs of protection experienced settlements or judgments that exceeded pooled or insured coverage. There were also no significant reductions in pooled or insured liability coverage in 2022-23. 9) COMMITMENTS AND CONTINGENCIES
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the City expects such amounts, if any, to be immaterial.

Construction Commitments
Various construction projects were in progress at June 30, 2023. Project costs are funded by various revenue sources and are paid out of the capital projects funds. Management asserts that the remaining commitments on open projects are not significant to the financial statements as of June 30, 2023.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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10) JOINT VENTURES
Local Transportation Authority:

The City is a participant, along with Imperial County and the other cities in the county, in the Imperial County Local Transportation Authority (LTA). The LTA is considered a joint venture without equity interest. The City is also not obligated in any manner for debt of the LTA. Each participating jurisdiction appoints one member to the governing board of the LTA. The LTA was approved by voters of Imperial County at a special election on November 8, 1989. The ballot measure (Measure D) increased the sales tax in Imperial County by one-half of one percent (0.5%) for a period of twenty years, to provide funding for transportation improvements. The revenues are allocated to each participating jurisdiction based on a formula contained in the ballot measure.

On May 1, 2012 the LTA issued $53,975,000 of sales tax revenue bonds (limited tax bonds) to fund certain transportation projects for the City and other members of the LTA. The amount made available to the City by this issuance was $7,723,672. The LTA has pledged the City’s share of sales tax revenue as security for the amount. The amount received during the 2022- 2023 fiscal year was $1,943,384, which is net of the City’s share of debt service required on this bond issue. The City has no other liability for the debt. The balance outstanding at June 30, 2023 is $4,470,000. Additional financial information on the LTA is available from the Imperial County Transportation Local Transportation Authority.

Imperial Valley Emergency Communications Authority:

The City is a participant, along with Imperial County and the other cities in the county, in the Imperial Valley Emergency Communication Authority (IVECA). IVECA is considered a joint venture without equity interest. The purpose of IVECA is to consolidate a communications center by equipping, maintaining, operating and staffing a single-site facility to provide emergency communications (call receiving and dispatching) for public safety and emergency services. It is also anticipated that IVECA will provide centralized dispatching services throughout Imperial County at some point in the future. The City’s contribution for the 2022-2023 fiscal year was $162,468.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN
A) General Information about the Pension Plan
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools.

Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under generally accepted accounting principles. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City participates in five rate plans (two miscellaneous and three safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS’ website, at www.calpers.ca.gov.

Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 5 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in some cases require approval by the CalPERS Board.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
A) General Information about the Pension Plan (continued) The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

Miscellaneous Plan Safety Plan
Prior to On or after Prior to On or after
Hire date January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 Benefit formula 2% @ 55 2% @ 62 3% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years of service 5 years of service 5 years of service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 50 - 67 & up 52 - 67 & up 50 - 55 & up 50 - 57 & up Monthly benefits, as a % of eligible compensation 1.43% to 2.42% 1.0% to 2.5% 3.00% 2.0% to 2.7% Required employee contribution rates 7.00% 6.75% 9.00% 13.00% Required employer contribution rates 10.87% 7.47% 23.75% 12.78% Contributions
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions. Employer Contributions to the Plan for the fiscal year ended June 30, 2023 were $1,682,095. The actual employer payments of $1,614,504 made to CalPERS by the District during the measurement period ended June 30, 2022 differed from the City’s proportionate share of the employer’s contributions of $5,378,805 by $3,764,300, which is being amortized over the expected average remaining service lifetime in the Public Agency Cost-Sharing Multiple Employer Plan.

B) Net Pension Liability
The City’s net pension liability for the Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures. A summary of principal assumptions and methods used to determine the net pension liability is as follows. 5a.1
108
City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
B) Net Pension Liability (continued)
Actuarial Methods and Assumptions Used to Determine Total Pension Liability The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial valuation as of June 30, 2021, with update procedures used to roll forward the total pension liability to June 30, 2022. The collective total pension liability was based on the following assumptions:

Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry Age Actuarial Cost Method
Asset Valuation Method Fair Value of Assets
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table (1) Derived using CalPERS' membership data for all funds Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter.
(1) The mortality table used was developed based on CalPERS’ specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Preretirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

Long-term Expected Rate of Return
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. 5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
B) Net Pension Liability (continued)
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points.

The expected real rates of return by asset class are as follows:

Asset Class
Assumed Asset
Allocation Real Return1,2
Global equity - cap-weighted 30.00% 4.54%
Global equity - non-cap-weighted 12.00% 3.84%
Private equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed securities 5.00% 0.50%
Investment grade corporates 10.00% 1.56%
High yield 5.00% 2.27%
Emerging market debt 5.00% 2.48%
Private debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage (5.00%) (0.59%)
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Change of Assumptions
Effective with the June 30, 2021, valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return.

In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. 5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-74-
11) DEFINED BENEFIT PENSION PLAN (continued)
B) Net Pension Liability (continued)
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Subsequent Events
On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.

On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes.

This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.

Pension Plan Fiduciary Net Position
Information about the pension plan’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, and fiduciary net position are presented in CalPERS’ audited financial statements, which are publicly available reports that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The plan’s fiduciary net position and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis used by the pension plan, which is the economic resources measurement focus and the accrual basis of accounting.

Benefits and refunds are recognized when due and payable in accordance with the terms of the plan. Investments are reported at fair value.
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
C) Proportionate Share of Net Pension Liability
The following tables shows the Plan’s proportionate share of the net pension liability over the measurement period.

Plan Total
Pension Liability
Plan Fiduciary
Net Position
Plan Net
Pension Liability/
(Asset)
Balance at: 6/30/2021 (VD) 98,450,074 $ $ 100,679,272 $ (2,229,198) Balance at: 6/30/2022 (MD) 104,761,934 89,952,304 14,809,630 Net Changes during 2021-22 6,311,860 $ $ (10,726,968) $ 17,038,828 Increase (Decrease)
Valuation Date (VD), Measurement Date (MD)
The City’s proportion of the net pension liability was determined by CalPERS using the output from the Actuarial Valuation System and the fiduciary net position, as provided in the CalPERS Public Agency Cost-Sharing Allocation Methodology Report, which is a publicly available report that can be obtained at CalPERS’ website, at www.calpers.ca.gov. The City’s proportionate share of the net pension liability for the Total Plan as of the June 30, 2021 and 2022 measurement dates was as follows:

Proportion - June 30, 2021 -0.04122%
Proportion - June 30, 2022 0.12821%
Change - Increase (Decrease) 0.16943%
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate
The following presents the City’s proportionate share of the net pension liability of the Plan as of the measurement date, calculated using the discount rate of 6.9 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.9 percent) or 1 percentage-point higher (7.9 percent) than the current rate:

Plan's Net Pension Discount Rate Current Discount Rate Discount Rate Liability/(Asset) - 1% (5.90%) (6.90%) + 1% (7.90%)
Miscellaneous $ 13,483,283 $ 6,835,844 $ 1,366,650
Safety 15,706,986 7,973,786 1,653,642
Total $ 29,190,269 $ 14,809,630 $ 3,020,292
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
C) Proportionate Share of Net Pension Liability (continued) Amortization of Deferred Outflows and Deferred Inflows of Resources Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Net difference between
projected and actual earnings
on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected average remaining service lives (EARSL) of all members that
are provided with benefits (active, inactive and retired) as of the beginning of the measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing Multiple-Employer Plan (PERF C).

The EARSL for PERF C for the measurement period ending June 30, 2022 is 3.7 years, which was obtained by dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by 153,587 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2021), the City’s net pension asset was $2,229,198. For the measurement period ending June 30, 2022 (the measurement date), the City incurred a pension expense of $11,369,670.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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11) DEFINED BENEFIT PENSION PLAN (continued)
D) Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions (continued)
As of June 30, 2023, the City has deferred outflows and deferred inflows of resources related to pensions as follows:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Changes of Assumptions $ - 1,504,474 $
Differences between Expected and Actual Experience 467,283 178,531 Differences between Projected and Actual Investment
Earnings 2,511,317 -
Differences between Employer's Contributions and
Proportionate Share of Contributions 4,907,279 -
Change in Employer's Proportion 8,124,016 -
Pension Contributions Made Subsequent to
Measurement Date 1,682,095 -
Total $ 5,085,810 14,289,185 $
The amounts above are net of outflows and inflows recognized in the 2021-22 measurement period expense. Contributions subsequent to the measurement date of $1,682,095 reported with deferred outflows of resources will be recognized as a reduction of the net pension liability in the upcoming fiscal year. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in future pension expense as follows:

Deferred
Fiscal Year outflows/ (inflows)
Ending June 30: of Resources
2024 $ 2,253,867
2025 2,299,456
2026 1,433,992
2027 1,533,965
2028 -
Thereafter -
Total $ 7,521,280
E) Payable to the Pension Plan
At June 30, 2023, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year then ended.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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12) OTHER POST EMPLOYMENT BENEFITS (OPEB)
Plan Description
The postemployment benefit plan is a single-employer defined healthcare plan administrated by the City. The City provides postretirement health and life insurance benefits, as provided for in various collective bargaining agreements for retirees that meet certain criteria. The City pays a contribution percentage of the employee’s premium for benefit coverage for all qualifying employees. These costs are typically liquidated in the General, Water, and Wastewater Funds.

Retirees may not convert the benefit into an in-lieu payment to secure coverage under independent plans. The plan does not issue a stand-alone report. The City funds the benefits on a pay-as-you-go basis. No assets are accumulated in a trust.

Eligibility
The table below presents a summary of the basic participant information for the active and retired participants covered under the terms of the Plan.

Valuation Date
6/30/2021
Participants eligible for OPEB
Inactive employees or beneficiaries currently receiving benefits 59 Inactive employees entitled to but not yet receiving benefit payments - Active employees 121
Total 180
Total OPEB Liability
The following tables show the components of the City’s annual OPEB cost, the amount paid by the employer as benefits came due, and changes in the OPEB liability for fiscal year June 30, 2023. The City’s total OPEB liability of $3,929,484 was measured as of June 30, 2022, and was determined by an actuarial valuation as of that date.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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12) OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued)
Actuarial Method and Assumptions
The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified.

Discount Rate 3.69%
Inflation 2.30%
Salary Increases

2.80% wage inflation plus seniority, merit, and promotion salary increases based on CalPERS Experience Study and
Review of Actuarial Assumptions published in November
2021
Investment Rate of Return N/A; OPEB Plan is unfunded
Mortality Rate
Based on CalPERS Experience Study and Review of
Actuarial Assumptions published in November 2021 for
Public Agency Miscellaneous and Police members
Healthcare Trend Rate
Based on 2021 Getzen model that reflects actual premium increases through 20231, followed by 5.50% decreasing
gradually to an ultimate rate of 4.04% by 2075 for nonMedicare and 3.75% for all years for Medicare Discount Rate
Under GASB 75, the discount rate used in valuing OPEB liabilities as of the Measurement Date for an unfunded plan is a single rate that reflects a yield or index rate for 20-year tax-exempt general obligation municipal bonds with an average rating of AA/Aa or higher (or equivalent quality on another rating scale). For the current 2021 actuarial valuation, the municipal bond index as of the Measurement Dates is 1.92%.
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-80-
12) OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued)
Change in Total OPEB Liability
Total OPEB
Liability
Balance at June 30, 2022 $ 4,701,358
(Valuation Date: June 30, 2021)
Changes recognized for the measurement period:

Service cost 373,511
Interest 96,566
Differences between expected and
actual experience (21,124)
Changes of assumptions (1,129,631)
Benefit payments (91,196)
Net changes (771,874)
Balance at June 30, 2023 $ 3,929,484
There is sensitivity of the total OPEB liability due to changes in the discount rate and healthcare cost trend rates. The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using the discount and trend rate that were 1 percentage point lower or 1 percentage point higher than the current discount and healthcare cost trend rates.

Sensitivity of the Total OPEB Liability to changes in the Discount Rate Total OPEB Liability
1% decrease in Discount Rate (2.69%) $ 4,516,288
Current Discount Rate (3.69%) $ 3,929,484
1% increase in Discount Rate (4.69%) $ 3,447,831
Sensitivity of the Total OPEB Liability to changes in the Healthcare Cost Trend Rates Total OPEB Liability
1% decrease om Healthcare Cost Trend Rates $ 3,329,102
Current Healthcare Cost Trend Rates $ 3,929,484
1% increase in Healthcare Cost Trend Rates $ 4,699,225
5a.1
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City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-81-
12) OTHER POST EMPLOYMENT BENEFITS (OPEB) (continued)
OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $171,451. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Changes between expected and actual experience $ 196,896 $ 1,376,509 Changes of assumptions 434,342 1,241,936
Contributions to OPEB plan subsequent to the
measurement date - 105,944
Total 737,182 $ 2,618,445 $
Deferred outflows of resources related to contributions subsequent to the measurement date of $105,944 will be recognized as a reduction of the total OPEB liability in the subsequent fiscal year ended.

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

Fiscal Year
Ended June 30
Deferred
Outflows/(Inflows) of
Resources
2024 $ (298,626)
2025 (298,626)
2026 (298,626)
2027 (274,452)
2028 (304,176)
Thereafter (512,701)
Total (1,987,207) $
5a.1
118
City of Brawley
Notes to Basic Financial Statements
June 30, 2023
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13) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY
On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Brawley (City) that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the city or other unit of local government will agree to serve as the “successor agency” to hold the assets units they are distributed to other units of state and local government. On January 10, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of the City resolution number 12-001.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence as the date of the dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

A) Long-term debt of the Successor Agency as of June 30, 2023, consisted of the following:

Balance as of Balance as of Due Within
June 30, 2022 Additions Deletions June 30, 2023 One Year Tax Allocation Bonds $ 3,690,000 $ (200,000) - $ $ 3,490,000 $ 205,000 Unamortized premium 60,386 - (4,026) 56,360 4,026
Deferred loss on refunding (94,931) - 6,329 (88,602) (6,329) Totals $ 3,655,455 $ (197,697) - $ $ 3,457,758 $ 202,697 2016 Tax Allocation Refunding Bonds Payable
On October 3, 2006, the Community Redevelopment Agency issued $5,875,000 of 2006 Tax Allocation Bonds. Interest is payable semiannually each April 1 and October 1 with principal due each October 1 beginning in 2008 with final maturity in 2036. The bonds were issued with interest rates varying between 3.65% and 5.00% Proceeds from the issue are to be used to finance improvements, fund a reserve account, fund a capitalized interest account, and pay costs of issuance. Tax increment revenue is pledged against the bonds. 5a.1
119
City of Brawley
Notes to Basic Financial Statements
June 30, 2023
-83-
13) SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (continued)
On January 27, 2016 the Successor to the Community Redevelopment Agency issued $4,800,000 of 2016 Tax Allocation Refunding Bonds to refund the 2006 Tax Allocation Bonds.

Interest is payable semiannually each April 1 and October 1 with principal due each October 1 beginning in 2016 with final maturity in 2036. The bonds were issued with interest rates varying between 2.125% and 5.00%. Tax increment revenue is pledged against the bonds.

The scheduled annual minimum debt service requirements at June 30, 2023 are as follows:

Fiscal Year
Ended June 30, Principal Interest Total
2024 $ 205,000 $ 96,875 $ 301,875
2025 215,000 90,491 305,491
2026 220,000 85,731 305,731
2027 225,000 80,584 305,584
2028 235,000 74,975 309,975
2029 - 2033 1,250,000 274,913 1,524,913
2034 - 2037 1,140,000 75,031 1,215,031
Totals $ 3,490,000 $ 778,600 $ 4,268,600
14) PRIOR PERIOD ADJUSTMENTS
A prior period adjustment was recognized in the government-wide statement of activities due to implementation of GASB 96 Subscription Based Information Technology Arrangements.

Governmental Activities
Net position, beginning of year, as previously stated 50,403,172 $ Restatement due to new accounting pronouncement 273,655 Net position, beginning of year, as restated $ 50,676,827 Beginning balance - subscription asset $ 730,754
Beginning balance - subscription liability (457,099)
Prior period restatement $ 273,655
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REQUIRED SUPPLEMENTARY INFORMATION
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City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual General Fund
For the Fiscal Year Ended June 30, 2023
-84-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Taxes:

Property tax $ 4,685,800 $ 4,825,800 $ 5,104,446 $ 278,646 Sales and use tax 4,030,000 4,190,000 4,770,324 580,324 Utility users 2,300,000 2,300,000 2,657,345 357,345
Transient lodging 430,000 430,000 484,779 54,779
Franchise 650,000 650,000 657,498 7,498
Business license 54,000 54,000 66,538 12,538
Licenses and permits 32,100 32,100 56,071 23,971
Fines and forfeitures 13,100 13,100 14,803 1,703
Charges for services 4,868,701 5,104,448 5,102,359 (2,089) Use of money and property 32,660 32,660 85,415 52,755
Intergovernmental 260,000 1,008,439 769,990 (238,449)
Miscellaneous 265,000 1,314,650 306,520 (1,008,130)
Total revenues 17,621,361 19,955,197 20,076,088 120,891

EXPENDITURES
Current:

General government 3,182,654 4,759,954 2,803,803 1,956,151 Public safety 9,596,696 10,105,903 9,719,622 386,281
Culture and leisure 2,102,311 2,210,489 2,116,210 94,279 Community development 1,969,973 2,076,308 1,439,602 636,706 Capital outlay - 21,000 457,099 (436,099)
Debt service:

Principal 750,000 871,868 922,163 (50,295)
Interest 452,100 513,382 513,374 8
Total expenditures 18,053,734 20,558,904 17,971,873 2,587,031 Excess of revenues over
(under) expenditures (432,373) (603,707) 2,104,215 2,707,922

OTHER FINANCING SOURCES (USES)
Financed purchase - - 60,083 60,083
Subscription acquisitions - - 457,099 457,099
Transfers in 448,683 448,683 423,718 (24,965)
Transfers out - (33,310) - 33,310
Total other financing sources (uses) 448,683 415,373 940,900 525,527 Net change in fund balance 16,310 (188,334) 3,045,115 3,233,449 Fund balance - beginning of fiscal year 5,598,209 5,598,209 5,598,209 - Fund balance - end of fiscal year $ 5,614,519 $ 5,409,875 $ 8,643,324 $ 3,233,449 5a.1
124
City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Economic & Community Development Special Revenue Fund
For the Fiscal Year Ended June 30, 2023
-85-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Use of money and property $ 17,000 $ 17,000 $ 107,643 $ 90,643 Intergovernmental 110,000 110,000 3,317 (106,683)
Miscellaneous 100 100 - (100)
Total revenues 127,100 127,100 110,960 (16,140)

EXPENDITURES
Current:

Community development 114,100 114,100 156,541 (42,441)
Total expenditures 114,100 114,100 156,541 (42,441)
Net change in fund balance 13,000 13,000 (45,581) (58,581) Fund balance - beginning of fiscal year 7,639,060 7,639,060 7,639,060 - Fund balance - end of fiscal year $ 7,652,060 $ 7,652,060 $ 7,593,479 $ (58,581) 5a.1
125
City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual American Rescue Plan (ARPA) Special Revenue Fund
For the Fiscal Year Ended June 30, 2023
-86-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Use of money and property $ 10,000 $ 10,000 $ 13,548 $ 3,548 Intergovernmental 3,137,028 3,137,028 1,613,242 (1,523,786) Miscellaneous - - - -
Total revenues 3,147,028 3,147,028 1,626,790 (1,520,238)

EXPENDITURES
Current:

General government 3,596,200 - 29,981 3,566,219
Public safety 576,559 - - 576,559
Capital outlay 1,569,417 - 1,566,871 2,546
Debt Service:

Principal - 16,022 16,022 -
Interest - 369 369 -
Total expenditures 5,758,567 - 1,613,243 4,145,324
Net change in fund balance 3,147,028 (2,611,539) 13,547 2,625,086 Fund balance - beginning of fiscal year 49,203 49,203 49,203 - Fund balance - end of fiscal year $ 3,196,231 $ 62,750 (2,562,336) $ $ 2,625,086 5a.1
126
City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Highway Relinquishment Special Revenue Fund
For the Fiscal Year Ended June 30, 2023
-87-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Use of money and property $ 60,000 $ 60,000 $ 22,417 $ (37,583) Miscellaneous - 304,070 - 304,070
Total revenues 60,000 60,000 326,487 266,487

EXPENDITURES
Current:

Public works 40,000 41,700 116,730 (75,030)
Total expenditures 40,000 41,700 116,730 (75,030)
Excess of revenues over
(under) expenditures 20,000 18,300 209,757 191,457

OTHER FINANCING SOURCES (USES)
Transfers out (562,550) (560,850) (547,352) 13,498
Total other financing sources (uses) (562,550) (560,850) (547,352) 13,498 Net change in fund balance (542,550) (542,550) (337,595) 204,955 Fund balance - beginning of fiscal year 635,825 635,825 635,825 - Fund balance - end of fiscal year $ 93,275 $ 93,275 $ 298,230 $ 204,955 5a.1
127
City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Measure D Special Revenue Fund
For the Fiscal Year Ended June 30, 2023
-88-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Use of money and property $ 25,000 $ 25,000 $ 23,777 $ (1,223) Intergovernmental 1,500,000 1,500,000 1,943,384 443,384 Total revenues 1,525,000 1,525,000 1,967,161 442,161

EXPENDITURES
Current:

Public works 333,409 354,123 342,074 12,049
Total expenditures 333,409 354,123 342,074 12,049
Excess of revenues over
(under) expenditures 1,191,591 1,170,877 1,625,087 454,210

OTHER FINANCING SOURCES (USES)
Transfers out (2,055,467) (2,532,083) (948,944) 1,583,139 Total other financing sources (uses) (2,055,467) (2,532,083) (948,944) 1,583,139 Net change in fund balance (863,876) (1,361,206) 676,143 2,037,349 Fund balance - beginning of fiscal year 7,089,135 7,089,135 7,089,135 - Fund balance - end of fiscal year $ 6,225,259 $ 5,727,929 $ 7,765,278 $ 2,037,349 5a.1
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City of Brawley
Required Supplementary Information
Schedule of the City's Proportionate Share of the Net Pension Liability Last Ten Years*
-89-
Measurement
Date
Employer's
Proportion of
the Collective
Net Pension
Liability /
(Asset)1
Employer's
Proportionate
Share of the
Collective Net
Pension Liability
/ (Asset)
Covered
Payroll
Employer's
Proportionate
Share of the
Collective Net
Pension Liability /
(Asset) as a
percentage of the
Covered Payroll
Pension Plan's
Fiduciary Net
Position as a
percentage of the
Total Pension
Liability / (Asset)
6/30/2014 0.273% 16,595,334 $ $ 7,564,276 219.39% 79.82% 6/30/2015 0.256% 17,598,726 7,550,886 233.07% 77.27%
6/30/2016 0.248% 21,420,429 8,001,162 267.72% 72.69%
6/30/2017 0.242% 24,015,174 7,543,740 318.35% 71.71%
6/30/2018 0.074% 7,107,035 7,360,997 96.55% 73.39%
6/30/2019 0.072% 7,397,749 7,533,772 98.19% 73.37%
6/30/2020 0.091% 9,846,592 7,335,135 134.24% 89.78%
6/30/2021 -0.041% (2,229,198) 6,602,459 -33.76% 102.26% 6/30/2022 0.128% 14,809,630 6,897,217 214.72% 85.86%
* Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Additional years will be presented as information becomes available.
1 Proportion of the net pension liability represents the plan's proportion of PERF C, which includes both the Miscellaneous and Safety Risk Pools excluding the 1959 Survivors Risk Pool. 5a.1
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City of Brawley
Required Supplementary Information
Schedule of Pension Contributions
Last Ten Years*
-90-
Fiscal Year
Actuarially
Determined
Contribution
Contributions in
Relation to the
Actuarially
Determined
Contribution
Contribution
Deficiency
(Excess)
Covered
Payroll
Contributions
as a
Percentage of
Covered Payroll
6/30/2015 $ (1,783,377) 1,783,377 $ - $ 7,550,886 $ 23.62% 6/30/2016 (1,806,003) 1,806,003 - 8,001,162 22.57%
6/30/2017 (2,313,745) 2,313,745 - 7,543,740 30.67%
6/30/2018 (17,806,372) 925,723 (16,880,649) 7,360,997 12.58% 6/30/2019 (951,338) 951,338 - 7,533,772 12.63%
6/30/2020 (997,419) 997,419 - 7,335,135 13.60%
6/30/2021 (1,273,362) 1,273,362 - 6,602,459 19.29%
6/30/2022 (1,614,504) 1,614,504 - 6,897,217 23.41%
6/30/2023 (1,682,095) 1,682,095 - 7,346,248 22.90%
Notes to Schedule:
* Measurement date 6/30/2014 (fiscal year 2015) was the first year of implementation. Additional years will be presented as information becomes available.

Changes in Benefit Terms: There were no changes to benefit terms that applied to all members of the Public Agency Pool. Additionally, the figures above do not include any liability impact that may have resulted from Golden Handshakes that occurred after the June 30, 2020 valuation date, unless the liability impact is deemed to be material to the Public Agency Pool.

Changes in Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. There were no assumption changes for 2021. For 2020, the Plan adopted a new amortization policy effective with the 2019 actuarial valuation. The new amortization policy shortens the period over which actuarial gains and losses are amortized from 30 years to 20 years with the payments computed as a level dollar amount. In addition, the new policy does not utilize a five-year rampup and ramp-down on UAL bases attributable to assumption changes and non-investment gains/losses.

The new policy also does not utilize a five-year ramp-down on investment gains/losses. These changes apply only to new UAL bases established on or after June 30, 2019. There were no changes in assumptions in 2019. In 2018, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. There were no changes in the discount rate in 2019. In 2017, the accounting discount rate was reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes in the discount rate. In 2015, amounts reported reflect an adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.5 percent discount rate.
5a.1
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City of Brawley
Required Supplementary Information
Schedule of Changes in Total OPEB Liability and Related Ratios Last Ten Years*
-91-
Measurement Date (June 30) 2022 2021 2020 2019 2018 2017 Fiscal Year ended (June 30) 2023 2022 2021 2020 2019 2018 Total OPEB Liability
Service cost $ 373,511 $ 394,752 $ 326,673 $ 285,565 $ 273,166 $ 299,551 Interest 96,566 160,111 174,584 169,334 155,924 130,903 Differences between expected and
actual experience (21,124) (1,805,786) 553,152 383,528 - - Changes of assumptions (1,129,631) (111,530) (5,805) 161,809 (38,747) (415,296) Benefit payments (91,196) (152,228) (167,303) (115,331) (94,476) (89,254) Net change in total OPEB liability (771,874) (1,514,681) 881,301 884,905 295,867 (74,096) Total OPEB liability - beginning 4,701,358 6,216,039 5,334,738 4,449,833 4,153,966 4,228,062 Total OPEB liability - ending (a) $ 3,929,484 $ 4,701,358 $ 5,334,738 6,216,039 $ 4,449,833 $ 4,153,966 $ Covered-employee payroll $ 6,577,373 $ 6,322,852 $ 8,732,808 8,914,601 $ 7,807,710 $ 8,037,184 $ Total OPEB liability as a percentage of
covered-employee payroll 59.74% 74.36% 69.73% 61.09% 56.99% 51.68% Notes to schedule:

Funding Policy : The City funds the benefits on a pay-as-you-go basis. No assets are accumulated in a trust.

Contributions are fixed and not based on a measure of pay, therefore covered-employee payroll is used in the schedule.

Changes in assumptions :
* Measurement date 6/30/2017 (fiscal year 2018) was the first year of implementation. Additional years will be presented as information becomes available.

Single Equivalent Discount Rate (SEDR) was increased from 1.92% as of June 30, 2021 to 3.69% as of June 30, 2022 based on the updated municipal bond index, which caused a decrease in the liability.

Second year health care trend rates have been updated to reflect actual premium increases from 2022 to 2023, which caused a slight decrease in the liability.
5a.1
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City of Brawley
Note to Required Supplementary Information
June 30, 2023
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1) BUDGETS AND BUDGETARY DATA
A key element of the City’s financial management process is the preparation of the annual budget. Each year the City Manager presents to City Council a proposed budget, which includes all current balances and expected revenues and other financing sources of the City, and describes by department how those resources will be utilized. Under terms of various grant and financing agreements, the budget is to be adopted by the end of June, prior to the beginning of each fiscal year. The budget is adopted by motion of the City Council, and if amended, generally is done by resolution.

Budgets for the General and Special Revenue Funds are adopted on a basis substantially consistent with the accounting principles generally accepted in the United States of America (US GAAP). Accordingly, actual revenues and expenditures can be compared with the related budgeted amounts without any significant reconciling items.

All appropriations lapse at the end of the fiscal year to the extent that they have not been expended.

General Budget Policies
The City Council approves each year’s budget submitted by the City Manager prior to the beginning of the new fiscal year. The Council conducts public meetings prior to its adoption. The budget is prepared by fund, function and activity and includes information on the past fiscal year, current year estimates and requested appropriations for the next fiscal year. Supplemental appropriations, when required during the period are also approved by the Council.

Intradepartmental budget changes are approved by the City Manager. Expenditures may not exceed appropriations at the departmental level. At fiscal year-end, all operating budget appropriations lapse. During the fiscal year, several supplementary appropriations were necessary.
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SUPPLEMENTARY INFORMATION
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City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Development Impact Capital Projects Fund
For the Fiscal Year Ended June 30, 2023
-93-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Charges for services $ 823,000 $ 823,000 $ 1,238,962 $ 415,962 Use of money and property 15,850 15,850 66,656 50,806
Total revenues 838,850 838,850 1,305,618 466,768

EXPENDITURES
Current:

General government 8,000 8,000 - 8,000
Public safety 9,000 9,000 - 9,000
Culture and leisure 6,000 6,000 2,440 3,560
Community development 35,210 65,210 32,899 32,311
Capital outlay 1,722,000 3,327,395 26,354 3,301,041
Total expenditures 1,780,210 3,415,605 61,693 3,353,912 Net change in fund balance (941,360) (2,576,755) 1,243,925 3,820,680 Fund balance, beginning of year 8,054,038 8,054,038 8,054,038 - Fund balance, end of year $ 7,112,678 $ 5,477,283 $ 9,297,963 $ 3,820,680 5a.1
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City of Brawley
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual Streets Capital Projects Fund
For the Fiscal Year Ended June 30, 2023
-94-
Budget Amounts Actual Variance with
Original Final Amounts Final Budget

REVENUES
Intergovernmental $ 3,104,440 $ 3,104,440 $ 246,615 $ (2,857,825) Miscellaneous 2,707,079 2,305,979 - (2,305,979)
Total revenues 5,811,519 5,410,419 246,615 (5,163,804)

EXPENDITURES
Current:

Public works - - 29,340 (29,340)
Capital outlay 8,826,808 8,902,324 2,529,204 6,373,120
Total expenditures 8,826,808 8,902,324 2,558,544 6,343,780 Excess of revenues over
(under) expenditures (3,015,289) (3,491,905) (2,311,929) 1,179,976

OTHER FINANCING SOURCES (USES)
Transfers in 3,015,289 3,491,905 1,496,296 (1,995,609)
Transfers out - (29,340) - 29,340
Total other financing sources (uses) 3,015,289 3,462,565 1,496,296 (1,966,269) Net change in fund balance - (29,340) (815,633) (786,293) Fund balance, beginning of year 544,424 544,424 544,424 - Fund balance (deficit), end of year $ 544,424 $ 515,084 $ (271,209) $ (786,293) 5a.1
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City of Brawley
Description
Nonmajor Governmental Funds
June 30, 2023
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Special Revenue Funds
Special Revenue Funds are used to account for specific revenues that are legally restricted for particular purposes.

Gas Tax Fund – To account for City’s share of state gas tax revenue restricted for street improvements and maintenance.

Public Transport Fund – To account for revenue received from the State under Article 8(e) Local, which is restricted for capital expenditures to acquire vehicles and related equipment, bus shelters, benches, communication equipment, and for meeting public transportation needs.

Road Maintenance Fund – To account for revenue derived from the Road Repair and Accountability Act (RMRA) of 2017 (SB1). Uses are restricted to street improvements and maintenance.

Pedestrian & Bicycle Facilities Fund – To account for revenue received from the State under Article 3 of the Transportation Development Act (Section 99234 of the Public Utilities Code).

Uses are restricted to facilities for exclusive use by pedestrians and bicycles.

Downtown Parking Fund – To account for fees collected from merchants in the downtown business district to provide parking facilities in the downtown area.

Local Law Enforcement Fund – To account for revenues received by the City as a result of its participation in a task force with other law enforcement agencies in the area, and to account for revenues of various federal and state grants for law enforcement.

Assessment Districts Fund – To account for the collection of assessments from property owners and the associated expenditures for the maintenance of landscaped areas within the district, and to account for revenues and expenditures of Community Facilities Districts (CFD).

Business License Fund – To account for revenue the State mandated $4 business license fee associated with ADA compliance under Assembly Bill 1379 (2017). These revenues are remitted to the State of California.

CDBG - Sr. Citizen Utility Grant – To account for revenue received from a utility assistance grant received for COVID impacted senior citizens.

Capital Projects Funds
Capital Projects funds account for financial resources to be used for the acquisition or construction of major capital facilities.

Park Projects – This fund accounts for grant funding and contributions that are to be used on parks capital improvements projects.

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City of Brawley
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
-96-
Gas Tax
Public
Transport
Road
Maintenance
Pedestrian
& Bicycle
Facilities
ASSETS
Cash and investments - $ $ 264,599 $ 209,487 1,998,927 $ Restricted cash and investments with fiscal agents - - - - Interest receivable - 460 3,284 319
Due from other governments 63,292 123,042 53,982 53,487 Total assets $ 63,292 $ 388,101 $ 263,293 2,056,193 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ 44,082 $ 205 $ - $ -
Accrued liabilities 4,981 - - -
Advances from others 383,908 - - -
Due to other funds 536,436 - - -
Total liabilities 969,407 205 - -
Deferred inflows of resources:

Unavailable revenues - 123,042 - 53,487
Fund balances:

Restricted for:

Streets and roads - 264,854 2,056,193 209,806
Public safety - - - -
Community development - - - -
CFD improvements and maintenance - - - -
Unassigned (906,115) - - -
Total fund balance (deficit) (906,115) 264,854 2,056,193 209,806 Total liabilities, deferred inflows of
resources, and fund balances $ 63,292 $ 388,101 $ 263,293 2,056,193 $ Special Revenue Funds
5a.1
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(continued)
-97-
Downtown
Parking
Local Law
Enforcement
Assessment
Districts
Business
License
CDBG - Sr.

Citizen Utility
Grant
$ 216,254 5,034 $ $ 1,158,853 $ 13,831 $ 21,667
- - 179,191 - -
8 301 1,858 44 -
- 12,521 120 - -
$ 5,042 $ 229,076 $ 1,340,022 $ 13,875 $ 21,667
$ - $ 40,642 $ 6,871 $ 54 $ -
- - - - -
- - - - -
- - - - -
- 40,642 6,871 54 -
- - - - -
- - - - -
5,042 188,434 - - -
- - - 13,821 21,667
- 1,333,151 - - -
- - - - -
5,042 188,434 1,333,151 13,821 21,667
$ 5,042 $ 229,076 $ 1,340,022 $ 13,875 $ 21,667
Special Revenue Funds
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City of Brawley
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023 (concluded)
-98-
Park Projects
Total Nonmajor
Governmental
Funds
ASSETS
Cash and investments 33,310 $ 3,921,962 $
Restricted cash and investments with fiscal agents - 179,191 Interest receivable - 6,274
Due from other governments - 306,444
Total assets $ 33,310 $ 4,413,871

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable $ - $ 91,854
Accrued liabilities - 4,981
Unearned revenue - 383,908
Due to other funds - 536,436
Total liabilities - 1,017,179
Deferred inflows of resources:

Unavailable revenues - 176,529
Fund balances:

Restricted for:

Streets and roads - 2,530,853
Public safety - 193,476
Community development 33,310 68,798
CFD improvements and maintenance - 1,333,151
Unassigned - (906,115)
Total fund balance (deficit) 33,310 3,220,163
Total liabilities, deferred inflows of
resources, and fund balances $ 33,310 $ 4,413,871
Capital
Projects Fund
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City of Brawley
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023
-99-
Gas Tax
Public
Transport
Road
Maintenance
Pedestrian
& Bicycle
Facilities

REVENUES
Property tax - $ - $ - $ - $
Charges for services - - - -
Use of money and property 109 474 4,369 649
Intergovernmental 708,686 594,629 - -
Miscellaneous 67,293 - - -
Total revenues 776,088 598,998 474 649

EXPENDITURES
Current:

Public safety - - - -
Community development - - - -
Public works 1,383,916 22,723 - -
Capital outlay - - - -
Debt Service:

Principal 10,112 - - -
Interest 1,731 - - -
Total expenditures 1,395,759 22,723 - -
Excess of revenues over
(under) expenditures (619,671) (22,249) 598,998 649

OTHER FINANCING SOURCES (USES)
Transfer out (22,852) - - -
Total other financing sources (uses) (22,852) - - -
Net change in fund balance (642,523) (22,249) 598,998 649 Fund balance (deficit) - beginning of fiscal year (263,592) 287,103 1,457,195 209,157 Fund balance (deficit) - end of fiscal year $ (906,115) $ 264,854 $ 209,806 2,056,193 $ Special Revenue Funds
5a.1
143
(Continued)
-100-
Downtown
Parking
Local Law
Enforcement
Assessment
Districts
Business
License
CDBG - Sr.

Citizen Utility
Grant
$ - -$ 259,802 $ -$ -$
665 - - 4,570 -
12 96 2,613 (13,164) 124
- 526,044 216,713 - 123,393
- - - - -
677 526,140 479,128 (8,594) 123,517
- 259,886 - - -
- - 43,354 - -
- - - 450 -
- 744,000 - - -
- - - - -
- - - - -
1,003,886 - 43,354 450 -
677 (477,746) 435,774 (9,044) 123,517
- (226,632) (51) - -
- (226,632) (51) - -
677 (477,797) 209,142 (9,044) 123,517
4,365 666,231 1,124,009 22,865 (101,850)
$ 5,042 $ 188,434 $ 1,333,151 $ 13,821 $ 21,667
Special Revenue Funds
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City of Brawley
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Fiscal Year Ended June 30, 2023 (concluded)
-101-
Park Projects
Total Nonmajor
Governmental
Funds

REVENUES
Property tax $ - $ 259,802
Charges for services - 5,235
Use of money and property - (4,718)
Intergovernmental 33,310 2,202,775
Miscellaneous - 67,293
Total revenues 33,310 2,530,387

EXPENDITURES
Current:

Public safety - 259,886
Community development - 43,354
Public works 1,407,089 -
Capital outlay - 744,000
Debt Service:

Principal - 10,112
Interest - 1,731
Total expenditures 2,466,172 -
Excess of revenues over
(under) expenditures 33,310 64,215

OTHER FINANCING SOURCES (USES)
Transfer out - (249,535)
Total other financing sources (uses) - (249,535)
Net change in fund balance 33,310 (185,320)
Fund balance (deficit) - beginning of fiscal year 3,405,483 - Fund balance (deficit) - end of fiscal year $ 33,310 $ 3,220,163 Capital
Projects Fund
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City of Brawley
Internal Service Funds
June 30, 2023
-102-
Internal Service Funds
Internal service funds are used to account for the financing of goods and services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.

Maintenance Fund – To account for the costs of maintenance of the City’s fleet of vehicles and certain public facilities.

Risk Management Fund – To account for the costs of providing insurance, including risks retained by the City, for general liability, property damage, unemployment benefits, workers’ compensation and employee health benefits. This fund also finances postemployment health care benefits provided to retirees and to former employees. 5a.1
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City of Brawley
Internal Service Funds
Combining Statement of Net Position
June 30, 2023
-103-
Maintenance
Risk
Management
Total Internal
Service Funds
ASSETS
Current assets:

Cash and investments $ 1,400,614 $ - $ 1,400,614
Interest receivable 2,301 - 2,301
Due from other governments - 2,350 2,350
Loans receivable - 3,282 3,282
Total current assets 1,402,915 5,632 1,408,547
Noncurrent assets:

Capital assets:

Construction in progress 11,138 - 11,138
Depreciable assets 3,522,519 - 3,522,519
Total capital assets 3,533,657 - 3,533,657
Less accumulated depreciation (2,431,819) (2,431,819) - Net capital assets 1,101,838 - 1,101,838
Total noncurrent assets 1,101,838 - 1,101,838
Total assets 2,504,753 5,632 2,510,385

LIABILITIES
Current liabilities:

Accounts payable (77) 1,441 1,364
Accrued liabilities - 4 4
Due to other funds - 417,773 417,773
Total current liabilities (77) 419,218 419,141
Total liabilities (77) 419,218 419,141

NET POSITION
Net investment in capital assets 1,101,838 - 1,101,838
Unrestricted 1,402,992 (413,586) 989,406
Total net position $ 2,504,830 $ (413,586) $ 2,091,244
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City of Brawley
Internal Service Funds
Combining Statement of Revenues, Expenses, and Changes in Net Position For the Fiscal Year Ended June 30, 2023
-104-
Risk
Maintenance Management Total

REVENUES
Charges for services - $ 97,230 $ $ 97,230

EXPENSES
Salary and benefits 75,705 - 75,705
Supplies and services 16,039 38,225 54,264
Depreciation 138,844 - 138,844
Total expenses 230,588 38,225 268,813
Operating income (loss) (230,588) 59,005 (171,583)

NON- OPERATING REVENUE (EXPENSES)
Use of money and property 3,368 - 3,368
Total non-operating revenue 3,368 - 3,368
Net income (loss) before transfers (227,220) 59,005 (168,215) Transfers out (5,718) - (5,718)
Change in net position (232,938) 59,005 (173,933)
Net position (deficit), beginning of fiscal year 2,737,768 (472,591) 2,265,177 Net position (deficit), end of fiscal year $ 2,504,830 $ (413,586) $ 2,091,244 5a.1
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City of Brawley
Internal Service Funds
Combining Statement of Cash Flows
For the Fiscal Year Ended June 30, 2023
-105-
Risk
Maintenance Management Totals
CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from users - $ 94,880 $ 94,880 $
Cash payments to suppliers and contractors (16,846) (38,702) (55,548) Cash payments for employees and benefit programs (78,737) 4 (78,733) Net cash provided (used) by operating activities (95,583) 56,182 (39,401)

CASH FLOWS FROM NON-CAPITAL
FINANCING ACTIVITIES:

Transfers (5,718) - (5,718)
Loan repayment issuance - 1,303 1,303
Interfund borrowing (repayment) - (57,485) (57,485)
Net cash used by non-capital
financing activities (5,718) (56,182) (61,900)
CASH FLOWS FROM INVESTING ACTIVITIES:

Use of money and property 1,775 - 1,775
Net cash provided (used) by investing activities 1,775 - 1,775

NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (99,526) - (99,526)

CASH AND CASH EQUIVALENTS,
BEGINNING OF FISCAL YEAR 1,500,140 - 1,500,140

CASH AND CASH EQUIVALENTS,
END OF FISCAL YEAR $ 1,400,614 $ - $ 1,400,614
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City of Brawley
Internal Service Funds
Combining Statement of Cash Flows (Continued)
For the Fiscal Year Ended June 30, 2023
-106-
Risk
Maintenance Management Totals
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities
Operating income (loss) (230,588) $ 59,005 $ $ (171,583) Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation 138,844 - 138,844
Increase (decrease) in due from other governments - (2,350) (2,350) Increase (decrease) in accounts payable and
accrued liabilities (3,839) (473) (4,312)
Total adjustments 135,005 (2,823) 132,182
Net cash provided (used) by operating activities $ (95,583) $ 56,182 $ (39,401) 5a.1
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

FINANCIAL STATEMENTS
June 30, 2023
5a.2
152

CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

TABLE OF CONTENTS
JUNE 30, 2023
Page
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT
Independent Auditor’s Report 1
Financial Statements
Balance Sheet 4
Statement of Revenues, Expenditures, and Changes in Fund Balances 5 Notes to Financial Statements 6
Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Article 8(e) 8
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Article 3 9
Independent Auditors’ 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 10 5a.2
153
-1-
Independent Auditor’s Report
City Council of the
City of Brawley
Brawley, California
Report on the Audit of the Financial Statements
Opinions
We have audited the financial statements of the Local Transportation Funds Non-Transit of the City of Brawley, California (City) as of and for the fiscal years ended June 30, 2023, which collectively comprise the Local Transportation Funds Non-Transit financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Local Transportation Funds Non-Transit as of June 30, 2023, and the changes in financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Local Transportation Funds Non-Transit of the City of Brawley and do not purport to, and do not, present fairly the financial position of the City of Brawley as of June 30, 2023, the changes in its financial position, or, where applicable, its cash flows for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.
5a.2
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-2-
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Report on Summarized Comparative Information
We have previously audited the City’s 2022 financial statements, and we expressed unmodified opinions on the respective financial statements of the Local Transportation Funds Non-Transit in our report dated April 11, 2024. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2022, is consistent, in all material respects, with the audited financial statements from which it has been derived.

Other Matter
Prior Year Comparative Information
The financial statements include summarized prior-year comparative information. Such information does not include sufficient detail to constitute a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the Local Transportation Funds Non-Transit’s financial statements for the year ended June 30, 2022, from which such summarized information was derived.

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and GAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. 5a.2
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-3-
In performing an audit in accordance with GAAS and GAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Transportation Fund’s internal control. Accordingly, no such opinion is expressed.
 Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Transportation Fund’s ability to continue as a going concern for a reasonable period of time.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the Local Transportation Funds NonTransit of the City of Brawley. The accompanying supplementary information, such as the Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated July 8, 2024, on our consideration of the City’s internal control over the Local Transportation Funds Non-Transit’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Local Transportation Funds Non-Transit’s financial reporting and compliance.

San Bernardino, California
July 8, 2024
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

BALANCE SHEET
JUNE 30, 2023
(WITH COMPARATIVE DATA FOR PRIOR YEAR)
The accompanying notes are an integral part of these financial statements. -4-
2022
Bus Benches Pedestrians
and and Bicycles
Shelters Fund Fund
Article 8(e) Article 3 Total Total
ASSETS
Cash and investments $ 264,599 $ 209,487 $ 474,086 $ 498,476 Interest receivable 460 319 779 236
Due from other governments 123,042 53,487 176,529 87,924 Total Assets $ 388,101 $ 263,293 $ 651,394 $ 586,636

LIABILITIES, DEFERRED INFLOWS,

AND FUND BALANCES

LIABILITIES
Accounts payable $ 205 $ - $ 205 $ 2,452
Total Liabilities 205 - 205 2,452

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 123,042 53,487 176,529 87,924
Total Deferred Inflows of Resources 123,042 53,487 176,529 87,924

FUND BALANCES
Restricted for transportation 264,854 209,806 474,660 496,260 Total Fund Balances 264,854 209,806 474,660 496,260
Total Liabilities, Deferred Inflows,
and Fund Balances $ 388,101 $ 263,293 $ 651,394 $ 586,636 2023
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED JUNE 30, 2023
(WITH COMPARATIVE DATA FOR PRIOR YEAR)
The accompanying notes are an integral part of these financial statements. -5-
2022
Bus Benches Pedestrians
and and Bicycles
Shelters Fund Fund
Article 8(e) Article 3 Total Total

REVENUES
Use of money and property 474 $ 649 $ 1,123 $ $ (7,497) Total Revenues 474 649 1,123 (7,497)

EXPENDITURES
Salaries and wages 1,172 - 1,172 10,527
Supplies and materials 18,734 - 18,734 12,789
Services 2,817 - 2,817 15,803
Total Expenditures 22,723 - 22,723 39,119
Excess of Revenues Over (Under) Expenditures (22,249) 649 (21,600) (46,616) Fund balances, beginning of year 287,103 209,157 496,260 542,876 Fund balances, end of year $ 264,854 $ 209,806 $ 474,660 $ 496,260 2023
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Reporting Entity
The Local Transportation Funds – Non-Transit are special revenue funds of the City of Brawley (City) and the financial statements of the funds are included in the basic financial statements of the City. The financial statement of the Local Transportation Funds do not purport to present the financial position or results of operations of the City of Brawley, California.

The accounting policies of the Transportation Funds are in conformity with generally accepted accounting principles in the United States applicable to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing accounting and financial reporting principles.

Basis of Accounting
The Local Transportation Funds – Non-Transit are accounted for using the current financial resources measurement focus and the modified accrual basis of accounting whereby revenues are recognized when they become both measurable and available to finance expenditures of the current period and expenditures are generally recognized when the related fund liabilities are incurred. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after fiscal year-end. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent that they have matured.

Grant revenues are recognized in the fiscal year in which all eligibility requirements are met.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Cash Equivalents
The City considers cash and cash equivalents as short term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures and funds for the Successor Agency to the Brawley Community Redevelopment Agency. Cash equivalents have an original maturity date of three months or less from the date of purchase. The cash and investments reported in the Local Transportation Funds-Non-Transit are part of the City's pooled cash and investments. The Local Transportation Funds-Non-Transit does not own individual investments.

NOTE 2: INTERGOVERNMENTAL ALLOCATION – TDA/LTF
The City was allocated the following funds:

Article Fund Section
8(e) LTF 99233.3 123,042$
3 LTF 99234 53,487
176,529$
As of June 30, 2023, the intergovernmental allocation is recorded as unavailable revenue.

NOTE 3: INTERNAL ACCOUNTING CONTROL
As part of our audit, procedures were performed of the City’s system of internal accounting control to the extent we considered necessary to evaluate the system as required by auditing standards generally accepted in the United States of America. Under these standards, the purpose of such evaluation is to establish a basis for reliance on the system of internal accounting control in determining the nature, timing, and extent of other auditing procedures that are necessary for expressing an opinion on the financial statements. No material weaknesses in internal control were discovered.
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SUPPLEMENTARY INFORMATION
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL – ARTICLE 8(e)
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
-8-
Variance
Final with Final
Budget Actual Budget

REVENUES
Use of money and property 1,000 $ 474 $ $ (526)
Intergovernmental - TDA/LTF 60,000 - (60,000)
Total Revenues 61,000 474 (60,526)

EXPENDITURES
Salaries and wages 8,250 1,172 7,078
Supplies and materials 16,700 18,734 (2,034)
Services 2,400 2,817 (417)
Total Expenditures 27,350 22,723 4,627
Excess of Revenues Over (Under) Expenditures 33,650 (22,249) (55,899)

OTHER FINANCING SOURCES (USES)
Transfers out 80,000 - 80,000
Total other financing sources (uses) 80,000 - 80,000
Net change in fund balance 113,650 (22,249) 24,101
Fund balance, beginning of year 287,103 287,103 -
Fund balance, end of year $ 400,753 $ 264,854 $ 24,101
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CITY OF BRAWLEY
LOCAL TRANSPORTATION FUNDS – NON-TRANSIT

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL – ARTICLE 3
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
-9-
Variance
Final with Final
Budget Actual Budget

REVENUES
Use of money and property 1,500 $ 649 $ (851) $
Intergovernmental - TDA/LTF 26,000 - (26,000)
Total Revenues 27,500 649 (26,851)

EXPENDITURES - - -
Excess of Revenues Over (Under) Expenditures 27,500 649 (26,851)

OTHER FINANCING SOURCES (USES)
Transfers out (317,272) - 317,272
Total other financing sources (uses) (317,272) - 317,272 Net change in fund balance (289,772) 649 290,421
Fund balance, beginning of year 209,157 209,157 -
Fund balance, end of year $ (80,615) $ 209,806 $ 290,421 5a.2
163
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INDEPENDENT AUDITORS’ 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
City Council of the
City of Brawley
Brawley, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Local Transportation Funds Non-Transit of the City of Brawley, California (the City), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s Local Transportation Funds Non-Transit’s basic financial statements, and have issued our report thereon dated July 8, 2024.

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 the Local Transportation Funds Non-Transit’s 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 entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. 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 were not identified.
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Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Local Transportation Funds Non-Transit’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, including Transportation Development Act §99400 (a), the California Code of Regulations, and the rules and regulations of the Imperial Valley Association of Governments. In our audit, we performed, to the extent applicable, the tasks contained in Section 6664 of Title 21 of the California Code of Regulations, 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 or other matters that are required to be reported under Government Auditing Standards, including §99400 (a), the California Code of Regulations, and the rules and regulations of the Imperial Valley Association of Governments. In our audit, we performed, to the extent applicable, the tasks contained in Section 6664 of Title 21 of the California Code of Regulations.

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

San Bernardino, California
July 8, 2024
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165
City of Brawley
Brawley, California
Single Audit Report on Federal Awards
Year Ended June 30, 2023
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166

CITY OF BRAWLEY

SINGLE AUDIT REPORT ON FEDERAL AWARDS
YEAR ENDED JUNE 30, 2023

TABLE OF CONTENTS
Page
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

1 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

3 Schedule of Expenditures of Federal Awards 7

Notes to the Schedule of Expenditures of Federal Awards 8

Schedule of Findings and Questioned Costs 9

Summary Schedule of Prior Audit Findings
Corrective Action Plan
13 14

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- 1 -

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
Independent Auditor's Report
To the Honorable City Council
City of Brawley
Brawley, California
We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the businesstype activities, the aggregate remaining fund information and each major fund of the City of Brawley (the City) as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated August 23, 2024.

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 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 entity’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.
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-2-
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 were not identified. We identified certain deficiencies in internal control, described in the accompanying Schedule of Findings and Questioned Costs as items 2023-001 and 2023-002 that we consider to be a significant deficiency.

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 determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Management’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the management’s response to the findings identified in our audit and described in the accompanying Schedule of Findings and Questioned Costs. The management’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

San Bernardino, California
August 23, 2024
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-3-

REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL
PROGRAM; REPORT ON INTERNAL CONTROL OVER
COMPLIANCE; AND REPORT ON SCHEDULE OF

EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE

UNIFORM GUIDANCE
Independent Auditor's Report
To the Honorable City Council
City of Brawley
Brawley, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Brawley’s (the City) compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2023. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
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-4-
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.
 Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
 Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. 5a.3
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Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon, dated August 23, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements and certain additional procedures including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.
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In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the financial statements as a whole.

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

San Bernardino, California
August 23, 2024
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CITY OF BRAWLEY

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
Year Ended June 30, 2023
-7-
Assistance Pass-Through Amount
Listing Program Federal Provided to
Federal Grantor/Pass-Through Grantor/Program Title Number Number Expenditures Subrecipients U.S. Department of Housing and Urban Development
Passed through the State of California Housing and
Community Development Department:

Community Development Block Grant/Entitlement Grants 14.228 18-CDBG-12905 $ 149,910 -$ Community Development Block Grant/Entitlement Grants 14.228 21-CDBG-PI-00029 7,493 - Total AL 14.228 157,403 -
Total U.S. Department of Housing and Urban Development 157,403 - U.S. Department of Justice
Direct Assistance:
2021 COPS Hiring Program 16.710 2020-UM-WX-0077 33,121 - 2022 COPS Hiring Program 16.710 15JCOPS-22-GG-03364-UHPX 46,371 - Total AL 16.710 79,492 -
2022 Edward Byrne Memorial Justice 16.738 15PBJA-22-GG-02883-JAGX 10,097 - Equitable Sharing Program (Federal Asset Forfeiture) 16.922 Unknown 188,866 - Total U.S. Department of Justice 278,455 -
Executive Office of the President
Direct Assistance:

High Intensity Drug Trafficking Areas Program 95.001 HIDTA Best 11,332 - High Intensity Drug Trafficking Areas Program 95.001 HIDTA DHE 7,747 Total AL 95.001 19,079 -
Total Executive Office of the President 19,079 -
U.S. Department of Transportation
Direct Assistance:

Airport Improvement Program 20.106 3-06-0028-023-2022 32,175 - Passed through the State of California Department of Transportation:

Highway Planning and Construction 20.205 CML- 5167 (045) 913,844 - Highway Planning and Construction 20.205 CML-5167 (044) 922,951 - Highway Planning and Construction 20.205 STPL -5167(043) 19,845 - Total AL 20.205 1,856,640 -
Total U.S. Department of Transportation 1,888,815 -
U.S. Department of the Treasury
Passed through the State of California Office of Emergency Services American Rescue Plan Act 21.027 Unknown 1,612,502 -
Total U.S. Department of the Treasury 1,612,502 -
U.S. Department of Homeland Security
Direct Assistance:

Homeland Security Investigations (ICAC) 16.800 ICAC 6,304 - Homeland Security Grant Program 97.067 OPSG 151,371 -
Homeland Security Investigations (OCDETF) 97.067 SW-CAS-0799 20,742 - Homeland Security Investigations 97.067 SLOT 25,320 -
Total AL 97.067 197,433 -
Total U.S. Department of Homeland Security 203,737 -
Total Expenditures of Federal Awards $ 4,159,991 $ -
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CITY OF BRAWLEY

NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS Year Ended June 30, 2023
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(1) Basis of Presentation
The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal awards activity of the City of Brawley (the City) under federal programs of the federal government for the year ended June 30, 2023. The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the City, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the City.
(2) Summary of Significant Accounting Policies
Expenditures reported on the Schedule are reported on the modified accrual basis of accounting. Under the modified accrual basis of accounting, expenditures are incurred when the City becomes obligated for payment as a result of the receipt of the related goods and services. Expenditures reported include any property or equipment acquisitions incurred under the federal program. The City did not elect to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
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CITY OF BRAWLEY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2023
-9-
SECTION I: SUMMARY OF AUDITOR'S RESULTS
Financial Statements
accordance with GAAP: Unmodified
Internal control over financial reporting:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? X Yes None Reported Noncompliance material to financial
statements noted? Yes X No
Federal Awards
Internal control over major programs:

Material weakness(es) identified? Yes X No
Significant deficiency(ies) identified? Yes X None Reported Type of auditor's report issued on compliance for major federal programs: Unmodified Any audit findings disclosed that
are required to be reported in
accordance with section 2CFR
200.516(a)? Yes X No
Identification of major federal programs:

CFDA Number

20.205

21.027
Dollar threshold used to distinguish
between type A and type B programs: $750,000
Auditee qualified as low-risk auditee? Yes X No
Name of Federal Programs
Type of report the auditor issued on whether the financial statements audited were prepared in Highway Planning and Construction
American Rescue Plan Act
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CITY OF BRAWLEY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2023
-10-
SECTION II: FINANCIAL STATEMENT FINDINGS
Finding 2023-001: Year-End Closing
Significant Deficiency
Criteria
The organization is required to prepare accurate and timely financial statements in accordance with Generally Accepted Accounting Principles (GAAP) and ensure all adjusting journal entries are reviewed and approved by management before closing the books for the fiscal year.

Condition
During the audit, it was noted that several year-end closing processes, such as account reconciliations and adjusting entries, were not performed in a timely manner.

Cause
The deficiency occurred due to a lack of adequate internal controls over the financial reporting process, as well as limited staffing available to perform these functions.

Effect
As a result of the deficiency, there were significant delays in finalizing the trial balance and issuing the annual financial statements, which could lead to misinformed decision-making by stakeholders. The potential for material misstatements increases without proper review and approval of journal entries, compromising the reliability of the financial reporting process.

Recommendation
We recommend that the organization implement a formal policy requiring management review and approval of all adjusting journal entries. Additionally, staff involved in the year-end closing process should receive training on the importance of internal controls and accurate financial reporting. Management should also perform a periodic review of the financial statements to ensure accuracy and completeness.

Management Response
See attached Corrective Action Plan.
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CITY OF BRAWLEY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2023
-11-
SECTION II: FINANCIAL STATEMENT FINDINGS, Continued
Finding 2023-002 – Preparation of the Schedule of Expenditures of Federal Awards Significant Deficiency
Criteria
In order to have a proper basis for the single audit, the entity must have procedures in place in order to prepare an accurate Schedule of Expenditures of Federal Awards (SEFA).

Condition
During the audit, as a result of audit inquiries, SEFA totals were adjusted and we received various revisions to the SEFA.

Cause
The City is managing multiple federal award with different reporting timeframes, which could potentially lead to errors and confusion, and complexities in tracking.

Identification as a Repeat Finding
This is a new finding for fiscal year 2023.

Effect
Errors in the preparation of the SEFA could result in increased difficulties in securing future federal grants or funding, due to a history of noncompliance or audit findings.

Context/Sampling
During testing of the Highway Planning and Construction program, auditor reviewed the program expenditures on the SEFA and noted that they were based on balances listed on the grant agreements instead of being reflective of actual program expenditures. This resulted in an overstatement of $98,325, which was then corrected upon revision of the SEFA.

Questioned Costs
No questioned costs.

Recommendation
We recommend that the City develop clear policies and procedures for preparation of the SEFA, including guidelines for data collection, reporting and review.

Management’s Response
See attached Corrective Action Plan.
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CITY OF BRAWLEY

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
Year Ended June 30, 2023
-12-
SECTION III. FEDERAL AWARD FINDINGS
No matters to report.
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CITY OF BRAWLEY

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
Year Ended June 30, 2023
-13-
CURRENT STATUS OF PRIOR YEAR FINDINGS:

Finding 2022-001:

Material Weakness
Corrective action was taken.

Finding 2022-002:

Noncompliance
Corrective action was taken.
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City of Brawley, Finance Department
400 Main Street
Brawley, CA 92227
760-344-8941
August 19, 2024
Rogers, Anderson, Malody & Scott, LLP
735 E Carnegie Drive, Suite 100
San Bernardino, Ca 92408
Re: Management response to Schedule of Findings and Questioned Costs for Audit Yearended June 30, 2023 We appreciate the thorough review conducted by Rogers, Anderson, Malody & Scott, LLP and the identification of areas for improvement in our financial reporting processes. We value your insights and are committed to addressing the findings to enhance our internal controls and ensure compliance with regulatory standards. Below, we provide our formal responses to the audit findings and detail our corrective action plans.

Management Response to Finding 2023-001: Year-End Closing We acknowledge the finding and agree with the recommendations provided and have developed a Corrective Action Plan to address the issues identified.

Action Plan:

1. Formal Policy Implementation:
o We will develop and implement a formal policy that mandates the review and approval of all adjusting journal entries by management before the fiscal year-end close. This policy will be documented and communicated to all relevant staff. o The policy will outline specific procedures and timelines for the preparation, review, and approval of adjusting journal entries to ensure compliance with GAAP.

2. Training and Development:
o We will organize comprehensive training sessions for all staff involved in the yearend closing process. This training will focus on the importance of internal controls, accurate financial reporting, and adherence to our new policies and procedures. o The training program will be developed and conducted by our finance team in collaboration with external experts and resources if necessary.

3. Periodic Review of Financial Statements:
o Management will implement a structured process for periodic reviews of financial statements throughout the fiscal year. This will include interim reviews to ensure accuracy and completeness before the year-end close.

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181
o A review schedule will be established, and management will ensure that reviews are performed in a timely manner to avoid last-minute delays.

Monitoring and Follow-Up:
x We will establish a monitoring system to track the implementation of these corrective actions and assess their effectiveness. Regular follow-up meetings will be scheduled to review progress and make necessary adjustments.

Management Response to Finding 2023-002: Preparation of the Schedule of Expenditures of Federal Awards (SEFA)
We acknowledge the findings related to the Schedule of Expenditures of Federal Awards (SEFA) and understand the importance of accurate reporting. To address these issues, we are implementing the following actions:

1. Enhanced Procedures:
o We will develop and implement clearer procedures for preparing the SEFA to ensure accuracy. This includes a review process to cross-check SEFA totals with actual program expenditures.

2. Improved Tracking:
o We will enhance our tracking system for federal awards to better manage different reporting timeframes and reduce the risk of errors.

3. Staff Training:
o Relevant staff will receive training on the preparation and reporting of the SEFA to ensure they understand the importance of accurate data entry and reporting.

We are dedicated to improving our internal controls and financial reporting processes to address the findings and prevent their recurrence. We value the recommendations provided and appreciate your assistance in strengthening our financial management practices. Should you require any further information or wish to discuss our action plans in more detail, please do not hesitate to contact us.

Silvia Luna
Finance Director
City of Brawley
[email protected]
(760)-344-8941
15-
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182
RESOLUTION 2024-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRAWLEY, CALIFORNIA

APPOINTMENT OF MEMBERS TO THE BRAWLEY COMMUNITY IMPROVEMENT COMMITTEE.

WHEREAS, City of Brawley Resolution 2023-27, adopted on August 1, 2023, established the Brawley Community Improvement Committee; and
WHEREAS, The purpose of Community Improvement Committee shall be selecting appropriate projects, and planning, coordinating and managing construction of the same utilizing volunteers (as that term is defined in Cal. Labor Code § 1720.4); and WHEREAS, Resolution 2023-27 provided that two (2) initial members of the Community Improvement Committee shall be appointed for a term of two (2) years.

NOW, THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF BRAWLEY, CALIFORNIA, DETERMINES AND ORDERS AS FOLLOWS:

That the following individuals are appointed to fill the two (2) initial vacancies on the Brawley Community Improvement Committee that expire on June 30, 2026.

1. Sal Rubalcaba

2. John Waddell
PASSED AND ADOPTED this 1st day of October 2024, by the following vote:

AYES:

NAYES:

ABSTAIN:

ABSENT:

CITY OF BRAWLEY, CALIFORNIA
___________________________
Ramon Castro, Mayor
ATTEST:
____________________________
Thomas Garcia, Deputy City Clerk
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City of Brawley
City Council
October 01, 2024
Agenda Item No 5c

STAFF REPORT
To: City Council
From: Armando Garibay, Information Technology Director
Prepared by: Armando Garibay, Information Technology Director Subject: Renewal of Microsoft Enterprise Agreement
RECOMMENDATION:

Review and approve the 3-year renewal of the City’s Microsoft Enterprise Agreement with the reseller GovConnection, Inc. for $80,279.03 per year and authorize the City Manager to execute the required documentation.

BACKGROUND INFORMATION:

Valid software licenses are required for the City and its employees to utilize Microsoft Office365 products and services. These products include but are not limited to Email, Desktop Operating Systems, Server Operating Systems, and the cloud-hosted Collaborative Software Suite.

FISCAL IMPACT:

If approved, the anticipated yearly cost of $80,279.03 (three-year term) would be paid from Account No. 101-181.000-740.411 Software Subscription.

Total FY24-25: $80,279.03
Total FY25-26: $80,279.03
Total FY26-27: $80,279.03
Three-Year Service: $240,837.09
ALTERNATIVES:

Alternatively, if the City decides not to renew the Microsoft agreement, the City would be required to migrate the Hosted/Cloud email environment on-premise. This migration would incur significant hardware costs and staff augmentation.

ATTACHMENTS:

1. GovConnection - Quote

2. CDWG - Quote Request

3. SofwareOne - Quote Request
REPORT COORDINATED WITH (other than person preparing the staff report):

Staff, Title or Consultant, Agency
5c
184
REPORT APPROVAL(S):

Staff, Title or Consultant, Agency Status – Date of Status Silvia Luna, Finance Director Approved - 9/24/2024
Jimmy Duran, City Manager Approved - 9/24/2024
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185
Account Executive: Wayne Patton
Phone:

Fax:

Email: [email protected] Date: 9/6/2024
Valid Through: 10/6/2024
Account #:

Customer Contact: Armando Garibay Phone: (760) 351-8805 Email: [email protected] Fax:

DELIVERY FOB SHIP VIA SHIP WEIGHT TERMS CONTRACT ID#
Destination Small Pkg Ground Service Level .00 lbs Net 30 * Line # Qty Item # Mfg. Part # Description Mfg. Price Ext 1 100 41686692 KV3-00368
Govt. GovEA Windows Enterprise SA
Only Per Device Year 1
Microsoft Gov Ea
Microsoft Gov Ea $ 51.06 $ 5,106.00
2 1 41601728 D87-01159 Govt. GovEA Visio Pro ALNG Year 1 SA Microsoft Gov Ea Microsoft Gov Ea $ 115.22 $ 115.22
3 40 41372993 9GS-00135
GovEA CIS Datacenter 2Core SA Only
Year 1 Annual Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 174.17 $ 6,966.80
4 16 41315597 9GA-00313
GovEA CIS Suite Standrd Core SA Only
Year 1 Annual Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 37.31 $ 596.96
5 20 KV3-00381
GovEA Windows Enterprise Upgrade
License w / SA Per Device
Microsoft Gov Ea
Microsoft Gov Ea $ 70.67 $ 1,413.40
6 73 AAA-11924
Office 365 Gov E3 from SA ShrdSvr per
User
Microsoft Gov Ea
Microsoft Gov Ea $ 217.97 $ 15,911.81
7 174 41225679 AAA-12416
GovEA Core CAL Bridge Office 365 From
SA All Lang MVL Per User 36 Month
Annual Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 17.83 $ 3,102.42
8 121 41420351 AAA-11894
GovEA O365 G3 GCC Sub Per User 36
Month Annual Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 257.68 $ 31,179.28
9 20 41225681 AAA-12414
GovEA Core CAL Bridge Office 365
UserCAL Subscription 36 Month Annual
Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 21.02 $ 420.40
10 194 41385325 MQM-00001
GovEA Azure Active Directory Premium
P1 GCC Shared Server Subscription MVL
Per User 36 Annual Paymen
Microsoft Gov Ea
Microsoft Gov Ea $ 57.42 $ 11,139.48
11 101 41593387 4ES-00001
Govt. GovEA Exchange Online
Subscription GCC Shared Server Per
User 36 Month Annual Payment
Microsoft Gov Ea
Microsoft Gov Ea $ 29.55 $ 2,984.55
US
(760) 351-3080 (760) 351-3080
5-30 Days A/R/O
Important Notice: --- THIS QUOTATION IS SUBJECT TO THE FOLLOWING Terms of Sale: All purchases from GovConnection, Inc. are subject to the Company's Standard Terms of Sale, which describe important legal rights and obligations. You may review the Company's Standard Terms of Sale on the Company's website: www.govconnection.com, or you may request a copy via fax, e-mail, or mail by calling your account representative. The only exception to this policy is if your order is being placed under any one of our many national, state, educational or cooperative Agreements, in which case the Terms and Conditions of your Purchase Order are already pre-negotiated and stated in that Agreement. No other Terms and Conditions shall apply and any other terms and conditions referenced or appearing in your Purchase Order are considered null and void. Due to the industry-wide constraints and fluctuations, we reserve the right to change pricing at any time. Please refer to our Quote Number in your order.

SALES QUOTE
GovConnection, Inc. # 25676836.02
732 Milford Road PLEASE REFER TO THE ABOVE
Merrimack, NH 03054 QUOTE # WHEN ORDERING

CITY OF BRAWLEY
US
351 MAIN ST
QUOTE PROVIDED TO: SHIP TO:

AB#: 14750212 AB#: 14807359

CITY OF BRAWLEY, CA
ACCOUNTS PAYABLE ATTN: ARMANDO GARIBAY
400 MAIN ST
BRAWLEY, CA 92227 BRAWLEY, CA 92227

Page 1 of 3 ends

5c.1
186
Account Executive: Wayne Patton
Phone:

Fax:

Email: [email protected] Date: 9/6/2024
Valid Through: 10/6/2024
Account #:

Customer Contact: Armando Garibay Phone: (760) 351-8805 Email: [email protected] Fax:

DELIVERY FOB SHIP VIA SHIP WEIGHT TERMS CONTRACT ID#
Destination Small Pkg Ground Service Level .00 lbs Net 30 * Line # Qty Item # Mfg. Part # Description Mfg. Price Ext US
(760) 351-3080 (760) 351-3080
5-30 Days A/R/O
Important Notice: --- THIS QUOTATION IS SUBJECT TO THE FOLLOWING Terms of Sale: All purchases from GovConnection, Inc. are subject to the Company's Standard Terms of Sale, which describe important legal rights and obligations. You may review the Company's Standard Terms of Sale on the Company's website: www.govconnection.com, or you may request a copy via fax, e-mail, or mail by calling your account representative. The only exception to this policy is if your order is being placed under any one of our many national, state, educational or cooperative Agreements, in which case the Terms and Conditions of your Purchase Order are already pre-negotiated and stated in that Agreement. No other Terms and Conditions shall apply and any other terms and conditions referenced or appearing in your Purchase Order are considered null and void. Due to the industry-wide constraints and fluctuations, we reserve the right to change pricing at any time. Please refer to our Quote Number in your order.

SALES QUOTE
GovConnection, Inc. # 25676836.02
732 Milford Road PLEASE REFER TO THE ABOVE
Merrimack, NH 03054 QUOTE # WHEN ORDERING

CITY OF BRAWLEY
US
351 MAIN ST
QUOTE PROVIDED TO: SHIP TO:

AB#: 14750212 AB#: 14807359

CITY OF BRAWLEY, CA
ACCOUNTS PAYABLE ATTN: ARMANDO GARIBAY
400 MAIN ST
BRAWLEY, CA 92227 BRAWLEY, CA 92227
Subtotal $ 78,936.32
Fee $ 0.00
Shipping and
Handling $ 0.00
Tax $ 1,342.71
Total $ 80,279.03

Page 2 of 3 ends

Brawley City CouncilOctober 1, 2024

Brawley City Council
October 1, 2024